NLRB Overrides Arbitration Finding that Car Placards on Premises Violated CBA Picketing Ban | Practical Law

NLRB Overrides Arbitration Finding that Car Placards on Premises Violated CBA Picketing Ban | Practical Law

In Verizon New England, Inc., the National Labor Relations Board (NLRB) declined to defer to an arbitration award finding that unionized employees were violating their collective bargaining agreement’s (CBA) express or implied picketing ban by posting protest placards in their cars parked on the employer’s premises while they were working. The NLRB found that the award was clearly repugnant to the National Labor Relations Act (NLRA) and that the employer unlawfully directed employees to remove the protest placards from their cars.

NLRB Overrides Arbitration Finding that Car Placards on Premises Violated CBA Picketing Ban

by Practical Law Labor & Employment
Published on 17 Mar 2015 • USA (National/Federal)
In Verizon New England, Inc., the National Labor Relations Board (NLRB) declined to defer to an arbitration award finding that unionized employees were violating their collective bargaining agreement’s (CBA) express or implied picketing ban by posting protest placards in their cars parked on the employer’s premises while they were working. The NLRB found that the award was clearly repugnant to the National Labor Relations Act (NLRA) and that the employer unlawfully directed employees to remove the protest placards from their cars.
On March 9, 2015, in Verizon New England, Inc., the majority of a delegation of the panel (Board) heading the NLRB's judicial functions declined to defer to an arbitration award finding that unionized employees were violating their collective bargaining agreement (CBA) by posting protest placards in their cars parked on the employer's premises while they were working. The Board held that an NLRB administrative law judge erred by deferring to the award when ruling on allegations in a related unfair labor practice (ULP) complaint because the award was "clearly repugnant" to the NLRA. The Board majority found that the employer unlawfully directed employees to remove the informational protest placards from their personal cars' windows while the cars were parked on the employer's property. Although this ruling comes in the wake of the Board's recent decision in Babcock & Wilcox Construction Co., which modified the Board's postarbitral deferral standard, the Board decided this case under the standard used in Olin Corp. because of its vintage (361 N.L.R.B. slip op. 132 (Dec. 15, 2014); 268 N.L.R.B. 573 (1984); see Legal Update, NLRB Sets New Arbitration and Grievance Settlement Deferral Standards.)
(362 N.L.R.B. slip op. 24 (Mar. 9, 2015).)

Background

In March 2008, shortly before the August 2008 expiration of a CBA between Verizon New England and a local union of the International Brotherhood of Electricians that covered several of the employer's facilities in New England, the union distributed picket signs to members that stated, "Verizon, Honor Our Existing Contract" and "Honor Our Contract."
The union had a practice of engaging in informational picketing near the employer's property typically in periods approaching expiration of the CBA before employees would start their shifts. Employees at some of the employer's Massachusetts facilities began using the signs for ambulatory picketing near the facilities at which they worked. Employees at the Westfield, Springfield and Hatfield, Massachusetts facilities began displaying the picket signs in the windows of their personal vehicles located on the employer's property ahead of the ambulatory picketing planned for April 2008.
The employer instructed the employees to remove the signs from the cars parked on its premises. The employees complied and no employee was disciplined over the incident.
The CBA between the employer and the union contained:
  • A no strike provision that prohibited union members from picketing any of the employer's premises.
  • A union bulletin boards provision stating that:
    • designated boards on the employer's premises are to be used by the union for posting notices concerning union business or other related union related matters;
    • at the employer's request, the union will remove postings that the employer considers controversial or derogatory; and
    • if the union refuses to remove controversial or derogatory postings at the employer's request, the employer may remove them unilaterally.
  • A management rights clause.
  • A grievance and arbitration provision that permitted arbitrators to undo discretionary decisions by the employer only if the employer acted arbitrarily or in bad faith.
The union filed:
  • A grievance alleging that the employer violated the CBA by requiring employees to remove the picket signs arbitrarily or in bad faith.
  • A ULP charge alleging that the employer violated Section 8(a)(1) of the NLRA by not allowing employees to display the union signs in their vehicles.
An NLRB regional director deferred investigation and prosecution of the ULP charge under Collyer Insulated Wire (192 N.L.R.B. 837 (1971)).
An arbitration panel conducted a hearing on the union's grievance and found in favor of the employer. The arbitration panel ruled that:
  • The CBA gave the employer the right to require employees to remove the picket signs displayed in their parked cars on the employer’s premises.
  • Employees who posted the signs in their cars violated, among other things, the CBA's no picketing provision.
  • The panel did not have the authority to resolve whether the employees' Section 7 rights were violated when the employer directed employees to remove the signs.
An administrative law judge (ALJ), using a stipulated record recommended that the ULP complaint be dismissed. He concluded that the NLRB should defer to the arbitration award under Olin Corporation (268 N.L.R.B. 573 (1984)), principally because:
  • The Board's deferral precedent recognizes that parties to an arbitration have voluntarily assumed through collective bargaining the possibility that an arbitrator might decide a particular set of facts differently than the Board.
  • There was nothing in the Board's precedent preventing an arbitrator from interpreting the word "picket" in a CBA provision prohibiting picketing more broadly than the Board would in a ULP case not involving such a provision, especially where the Board's precedent has vacillated in how it would define the term.
  • The union and counsel for the NLRB's General Counsel failed to sustain their burden that the arbitrator's decision was palpably wrong and repugnant to the NLRA. The decision was susceptible to an interpretation that is consistent with the NLRA.
The union and NLRB's General Counsel filed exceptions to the ALJ's decision deferring to the arbitration award and dismissing the complaint.

Outcome

A majority of the Board panel (Chairman Pearce and Member Hirozawa) held that:
  • The arbitration award in favor of the employer was palpably wrong and "clearly repugnant" to the NLRA because:
    • it incorrectly concluded that by agreeing to the CBA's no picketing provision, the union waived its right to display signs in the windows of employee vehicles on the employer's property. There was no evidence of a clear and unmistakable waiver of the particular sign-posting activity;
    • it lacked support for its finding that the employees' conduct constituted picketing;
    • the employer appeared to waive its right to enforce the CBA's no picketing provision by permitting the union to engage in ambulatory picketing near its premises in the past;
    • it failed to rely on any evidence indicating that employees displaying signs on their vehicles was the type of conduct the parties intended to prohibit in the no picketing provision in the collective bargaining agreement, or that the parties understood "picketing" to include the displaying of signs on employees' cars; and
    • it failed to reference any Board or court decisions defining picketing, including decisions noting that confrontation is a key element of picketing (Eliason & Knuth of Arizona, Inc., 355 N.L.R.B. 797 (2010)).
Member Johnson dissented, affirming the ALJ's conclusions that deferral to the arbitration award was warranted because the arbitrator's conclusions were within the broad parameters of the NLRA and allowable under Board precedent. Member Johnson noted among other things that:
  • Board precedent has held that displaying stationary signs can constitute picketing, especially if that activity were preceded by related ambulatory picketing using the same signs (see Eliason & Knuth, 355 N.L.R.B. at 804).
  • Board precedent has permitted arbitrators to interpret CBAs to determine if parties waived rights to engage in certain statutory actions even if the arbitrator did not apply the statutory waiver standard (Motor Convoy, 303 N.L.R.B. 135, 136 (1991)).
  • The Board majority's disagreement with the arbitration panel's interpretation of the CBA was not a sufficient reason to set aside the arbitration award. The parties bargained for the arbitrator's interpretation of the CBA (Olin, 268 N.L.R.B. at 576).

Practical Implications

The Board majority's decision in Verizon New England, Inc. reflects the Board's continually narrowing definition of coercive picketing and expansion of its definition of Constitutionally-protected informational picketing (see Legal Update, NLRB Further Expands Protections for Union Bannering Activity).
The decision affirms that even when it does not apply Babcock, the Board majority is not inclined to defer to an arbitrator's award that reaches a different conclusion than it would have. Member Johnson and the ALJ determined that the arbitration award was arguably within the bounds of Board precedent and entitled to deferral under the Board's deferral precedent. However, the majority disposed of the award and found the employer's actions unlawful by cherry-picking elements of individually inapposite Board precedent condemning an employer for either:
  • Unilaterally imposing rules that forbade union postings in its parking lots (without collective bargaining).
  • Forbidding union postings in cars off of its premises.
  • Forbidding unions from placing stationary signs near their premises when there was no related ambulatory picketing.
Employers should be more concerned that the majority suggested that it will:
  • Second guess arbitrator's interpretations of CBA's express terms, like the picketing prohibition in this case.
  • Consider extrinsic evidence of parties' bargaining histories and past practices to find that an employer appeared to waive its right to enforce a CBA's express terms, like the picketing prohibition in this case.
  • Require labor arbitrators to expound on how a union clearly and unmistakably waived rights through CBA terms or else the Board will nullify their awards through ULP proceedings.
  • Decline to find that a union clearly and unequivocally waived a right to engage in a form of picketing if a CBA bans "picketing" without parsing out every prohibited form of picketing.
The decision also suggests that the Board majority has its sights set on waivers of NLRA rights through collective bargaining and will closely scrutinize employer defenses that unions' contractually waived statutory rights in ULP proceedings.
Update: In Verizon New England Inc. v. N.L.R.B., the US Court of Appeals for the District of Columbia Circuit granted Verizon's petition for review and denied the Board's cross-application for enforcement, concluding that:
  • The Board misapplied its highly deferential standard for reviewing arbitration decisions.
  • Under that standard, the Board should have upheld the arbitration decision in this case.
  • The Board acted unreasonably by overturning the arbitration decision.
    ( (D.C. Cir. June 21, 2016).)