NLRB Orders Bargaining Over Effects Covered by CBA, Payment of Bargaining Expenses

Practical Law Legal Update w-001-8163 (Approx. 7 pages)

NLRB Orders Bargaining Over Effects Covered by CBA, Payment of Bargaining Expenses

by Practical Law Labor & Employment

Background

Columbia College Chicago (CCC), a private arts college, was party to a collective bargaining agreement (CBA) with a union representing its part-time faculty. In the CBA's management rights clause, CCC reserved the right to reduce credit hours assigned to classes, and effectively the right to reduce the unionized professors' credit hours. The CBA linked salary and benefits to the number of credit hours professors taught. Professors who worked less than those specified numbers of credit hours would receive a prorated portion of CBA's proscribed salary minimums and benefits.

The union, acknowledging CCC's right to reduce credit hours, purported to seek bargaining about the only the effects of the credit hours reductions on some part-time professors. CCC denied that it was obligated to bargain about those effects and for three months refused to do so unless the union set out proposals and identified the affected professors.

Separately, during collective bargaining for a successor agreement, a federal mediator aided the parties' negotiations by having them parse contract language, designating terms as either disputed issues or issues that were not in dispute (NIDs). The parties did not close bargaining on NIDs and CCC clarified that the exercise of selecting NIDs was something even less binding than tentative agreements. After more than a year, CCC provided a comprehensive CBA proposal incorporating some of the NIDs. For six months, the parties worked from that CBA proposal and the NIDs not included within it. Shortly after CCC received the unfair labor practice (ULP) complaint, which was related to, among other things, the alleged refusal to engage in effects bargaining about credit hour reductions, CCC proposed returning to its comprehensive proposal from six months earlier and discarding any NIDs that were not included in it.

During the course of negotiations, CCC also:

Rebuffed the union's demands to resume face-to-face bargaining for four months, insisting that the union comment on, or supply counterproposals to, the CCC's then most recent proposal.
Proposed that the union waive its right to bargain over the effects of decisions previously reserved in the CBA to CCC's discretion.

CCC also was found to have refused to provide requested relevant information and to have retaliated against the union's president for making protected statements.

Outcome

The Board unanimously held that CCC unlawfully set preconditions on bargaining when it declined to engage in face-to-face bargaining for four months unless the union commented on, or made counterproposals to, CCC's proposal.

The Board majority (Members Hirozawa and McFerran) held that:

The effects of the credit hours reduction were not inevitable. Fresno Bee's inevitable consequence rationale, which frees an employer of effects bargaining obligations when changes to employment terms and conditions are natural consequences of a lawful decision, did not apply (339 N.L.R.B. 1214 (2003)).
The Board will continue to reject the contract coverage test endorsed by the US Courts of Appeals for the District of Columbia and Seventh Circuits.
The union did not unmistakably waive bargaining over the effects of the credit hour cuts by agreeing to contract terms that specify the salary and benefits faculty would receive under the CBA if their credit hours were below the minimum ban on the salary and benefit scales. The scales set out minimums, not absolute terms for all circumstances. There might have been other bargainable effects or alternatives that the parties would have discovered had they engaged in effects bargaining. (Good Samaritan Hosp., 335 N.L.R.B. 901, 903-04 (2001).)
Since CCC had an obligation to bargain about the effects, it unlawfully set preconditions on bargaining when it refused to bargain unless the union supplied effects proposals and identified the affected professors.

The Board majority held that CCC's ULPs warranted reimbursement of the union's negotiation expenses, because:

Board precedent indicates that in cases of unusually aggravated misconduct, an order requiring reimbursement of the charging party's negotiation expenses was appropriate (Frontier Hotel & Casino, 318 N.L.R.B. 857, 859 (1995)).
Without explanation, CCC reopened bargaining issues that had long been considered "not in dispute."
CCC imposed unlawful preconditions to the bargaining between the two parties.
CCC's proposal that the union waive effects bargaining on issues reserved to management in the management rights clause would have left the union with fewer rights and less protection than they would have under the NLRA without a contract. That proposal showed the tenor of CCC's bargaining, however, the majority denied that it was holding the proposal was unlawful.
CCC's misconduct at the negotiating table was exacerbated by its other violations that diminished the union's strength.
CCC purposely acted to prevent meaningful progress during the bargaining process and engaged in overall bad-faith bargaining.

In dissent, Member Miscimarra asserted that CCC had no obligation to provide notice and an opportunity to the union to bargain about the effects of the decision to reduce credit hours. In particular:

Fresno Bee's inevitable consequence rationale applied.
If Fresno Bee did not apply, then either:
- under the contract coverage test endorsed by the DC and Seventh Circuits, the CBA covered what would happen to professors' compensation and benefits if the employer exercised its right to reduce credit hours (NLRB v. Postal Serv., 8 F.3d 832 (D.C. Cir. 1993); Chicago Tribune Co. v. NLRB, 974 F.2d 933, 936-37 (7th Cir. 1992)); or
- under the Board's clear and unmistakable waiver test, the union clearly and unmistakably waived bargaining about how credit hour reductions would affect professors' salary and benefits (Provena St. Joseph Med. Ctr., 350 N.L.R.B. 808, 811 (2007)).

The dissent also would have held that:

Since the effects of the credit hours reduction was controlled by the CBA and the union waived the issue, the union's demand to bargain about effects was a demand for midterm modifications of the current CBA. Under Section 8(d) of the NLRA, an employer has no obligation to reopen the CBA or modify existing terms. Also the CBA's "Entire Agreement" clause waived the parties' rights to bargain about these effects. With no obligation to engage in the requested bargaining, the employer was free to set preconditions for any bargaining on that topic, including, as it had, demanding the union supply its proposals and identify the affected professors.
The majority improperly lowered the threshold for conduct meriting negotiation expense reimbursements. Member Miscimarra would have affirmed the ALJ's denial of that remedy because, "among other reasons":
- NIDs were open items, so the union's expenditures on bargaining these items were appropriate.
- CCC's conduct did not rise to the level of "unusually aggravated misconduct."
- Precedent demonstrates that CCC did not act unlawfully by proposing that the union waive its effects bargaining rights.

Practical Implications

In Columbia College Chicago, among the most interesting parts of the analysis was that the Board majority cited the CBA's statement that wage scales are "minimums" as evidence that reductions in wages and benefits were not an inevitable consequence of CCC exercising its contractual right to reduce credit hours without bargaining about that decision. Theoretically, other salary figures could exist if the parties bargained about them.

This case analysis may be used by unions demanding midterm modifications of wage terms whenever an employer exercises management rights and sets in motion a shift in employment terms and conditions. If the Board expands this analysis, employers should be leery of setting "minimum" terms in CBAs rather than identify rates in the CBA and memorialize specific out of the norm wage or benefit provisions for whomever is intended to be paid more than the minimum.

The bargaining expense reimbursement analysis also uses the language of a case (Frontier Hotel & Casino) involving outrageous conduct to undermine the union. However, the facts of this case are not like those in the cited case. There was an extensive, mostly productive, bargaining history with a few rough stretches worsened by bargaining preconditions.

The Board majority has not expressly, but has effectively, lowered the bar for evidence of conduct requiring bargaining expense reimbursement. The majority's view in this case is that there is no bar and it may look at the totality of the circumstances, even the tenor of a bargaining proposal that it might not find unlawful.

UPDATE: On February 2, 2017, in Columbia College Chicago v. NLRB, the US Court of Appeals for the Seventh Circuit:

Granted Columbia's petition for review and granted in part and denied in part the Board's petition for enforcement.
Vacated the portion of the NLRB's order requiring Columbia to engage in effects bargaining, holding that Columbia was not under any further obligation to bargain with the union over the effects of the credit-hour reductions because:
- the Board's application of the "clear and unmistakable waiver" standard conflicted with Seventh Circuit precedent;
- the terms of the CBA gave Columbia the right to alter course credits; and
- the CBA itself did not provide for separate treatment of effects bargaining and decision bargaining.
Vacated the Board's award of bargaining expenses to the union (based on the court's holding that Columbia was not obligated to engage in effects bargaining).
Remanded to the Board to determine whether bargaining expenses were still warranted, given that the Board awarded bargaining expenses in part based on Columbia's conduct during the effects bargaining negotiations (and instructed the Board not consider the effects bargaining behavior on remand).

(847 F.3d 547 (7th Cir. 2017).)

UPDATE: On September 30, 2019, in Columbia College Chicago, the Board, on remand:

Held that, given the removal of the effects-bargaining violation from consideration, Columbia's remaining misconduct did not warrant an award of negotiation expenses.
Found that the remaining violations:
- were insufficient to establish that Columbia had "infected the core of the bargaining process"; and
- did not constitute unusually aggravated misconduct warranting the negotiation expenses remedy.
Concluded that it would not order Columbia to reimburse the union for negotiation expenses.

(368 N.L.R.B. No. 86 (Sept. 30, 2019.)

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