NLRB Addresses “Contract Coverage” Standard Following Expiration of CBA
In KOIN-TV, the National Labor Relations Board held that its recently adopted “contract coverage” standard is inapplicable to an employer’s unilateral changes made after a collective-bargaining agreement (“CBA”) has expired unless the CBA “contained language explicitly providing that the provision [permitting the unilateral change] would survive contract expiration.” Here, because the parties’ CBA included no such explicit language providing that the contractual management rights clause survived the CBA’s expiration, the Board held that the employer violated Section 8(a)(5) of the National Labor Relations Act by making two unilateral changes.
Background: The parties’ CBA included a management rights clause, as well as provisions related to employee scheduling and employee travel. The management rights clause vested the employer with the authority to “establish working rules [that]…do not violate the terms and provisions of [the CBA].” Additionally, while the CBA required the employer to post schedules at least two weeks in advance, the employer had an established practice of posting schedules four months in advance. Following expiration of the CBA, the employer made two changes to employees’ terms and conditions of employment. First, the employer began posting work schedules two weeks in advance, which was consistent with the expired CBA provision but constituted a change from the established practice of posting four months early. Second, the employer instituted a requirement that employees complete a driver background check annually. The employer conceded that both changes were made unilaterally, and without prior notification or bargaining with the union. The union alleged that both changes violated Section 8(a)(5) of the NLRA.
Analysis: The Board first reaffirmed that the “contract coverage” standard applies to changes made during the term of a CBA. That is, an employer has right to act unilaterally – and without notifying or bargaining with the union – during the term of a CBA where the change is “within the compass or scope of the contractual language granting the employer’s right to act unilaterally.” (This principle was established in the Board’s 2019 MV Transportation decision that we discussed here). But this case addressed whether that standard is applicable to unilateral changes after a CBA has expired.
The Board held that the “contract coverage” standard does not apply to unilateral changes made after expiration of the CBA unless the CBA includes explicit language giving the employer the right to act unilaterally after contract expiration. The Board reasoned that contractual rights expire with the CBA unless the parties agree in “explicit” terms that the provision providing the contractual right will survive expiration of the CBA. In other words, absent explicit language to the contrary, the contractual rights exist only for the duration of CBA agreed upon by the parties. Accordingly, because the CBA lacked explicit language giving the employer the right to act unilaterally after expiration of the CBA, the employer violated Section 8(a)(5) by unilaterally altering the scheduling procedures and instituting the driver background check. (Notably, the employer conceded that it did not notify or bargain the changes to impasse with the union prior to implementing the changes. Similarly, the Board found that the union did not “clearly and unmistakably” waive its right to bargain over the changes.)
Lessons for Employers: Employers will be unable to rely upon contractual language to make unilateral changes – typically set forth in the management rights clause – after expiration of the CBA unless the CBA included explicit language that the provision privileging the unilateral action survived expiration of the CBA. Absent such explicit language, an employer seeking to act unilaterally will typically have to (a) notify and bargain with the union to impasse, or (b) establish that the union “clearly and unmistakably” waived its right to bargain over the change, or some other recognized defense for making the unilateral change (e.g., exigent circumstances). Employers desiring to act unilaterally after expiration of a CBA should seek clear, explicit contract language providing that right.
