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Employers Must Arbitrate Grievances Under Expired CBA with Subsequently-Superseded Union: NLRB
Practical Law Legal Update w-003-3973 (Approx. 7 pages)
Employers Must Arbitrate Grievances Under Expired CBA with Subsequently-Superseded Union: NLRB
by Practical Law Labor & Employment
| Published on 13 Sep 2016 • USA (National/Federal) |
In Children's Hospital and Research Center of Oakland, the National Labor Relations Board (NLRB) held that employers are required to arbitrate pending grievances with a former union under a collective bargaining agreement (CBA) with that union, even if the former union was subsequently decertified and superseded by another union.
On August 26, 2016, the panel (Board) heading the NLRB's judicial functions held on remand from the US Court of Appeals for the District of Columbia Circuit, in a matter of first impression for the Board, that employers are required to arbitrate pending grievances with a former union under a collective bargaining agreement (CBA) with that union, even if the former union was subsequently decertified and superseded by another union (364 N.L.R.B. No. 114 (Aug. 26, 2016)).
Background
Until May 2012, the Service Employees International Union (SEIU) represented most employees of the Children's Hospital and Research Center of Oakland. On May 24, 2012, when the National Union of Healthcare Workers (NUHW) was certified as the new representative for the hospital's employees, the SEIU and the hospital had three outstanding grievances based on incidents that occurred while their currently-nullified CBA was then in effect. The hospital declined to arbitrate the grievances because the SEIU no longer represented the employees. The Board:
- Concluded that the hospital:
- was obliged to arbitrate the grievances as part of collective bargaining obligations it had with the SEIU; and
- committed an unfair labor practice (ULP) under Section 8(a)(5) of the NLRA by refusing to arbitrate those grievances.
- Ordered the hospital to arbitrate the pending grievances.
The hospital petitioned the DC Circuit for review and the NLRB cross-petitioned for enforcement. The DC Circuit:
- Held that:
- there is a latent ambiguity in the NLRA between Section 8(a)(5), which may require an employer to arbitrate disputes covered by a CBA (including even after the CBA expires or union is decertified) as part of its duty to bargain with its employees' union, and Section 9(a), which provides that once a union is certified as a bargaining unit's collective bargaining representative, an employer must bargain with that union exclusively regarding the bargaining unit;
- the NLRA does not address when an employer's obligation to arbitrate grievances filed by a subsequently-decertified union, under an expired CBA ends and its duty to bargain exclusively with its employees' newly certified union begins; and
- the NLRB is responsible for initially interpreting the NLRA to resolve statutory ambiguities and failed to do so in this case.
The DC Circuit also remanded the case to the Board, stating that:
- The Board's order was not entitled to Chevron deference because the Board:
- failed to resolve, or much less, acknowledge the statutory ambiguity under Sections 8(a)(5) and 9(a) about whether an employer has a duty to arbitrate outstanding grievances with an old union under an expired or nullified CBA after a new union has been certified;
- did not rely on precedent dealing with the situation of a decertified union replaced by a new union and how that affects Section 9(a)'s exclusivity principle; and
- curiously, did not argue that its decision was entitled to deference under Chevron's two-step framework.
- It is premature to decide whether the NLRB's decision was "manifestly contrary" to the NLRA or arbitrary and capricious because the NLRB has not yet attempted to resolve a relevant ambiguity in the NLRA, as it is required to do (Chevron, U.S.A., Inc.v.Natural Resources Defense Council, Inc., 467 U.S. 837, 844 (1984); SEC v. Chenery, 318 U.S. 80, 94 (1943)).
Outcome
On remand, the Board (Members Miscimarra and McFerran, along with Member Hirozawa who concurred in the majority's opinion "in all respects" but wrote a separate concurrence to address another issue offering further support to the majority's opinion):
- Set out to address:
- the "interplay" between Section 8(a)(5) and Section 9(a); and
- why requiring employers under Section 8(a)(5) to arbitrate pending grievances with a superseded union is the best way to resolve the latent ambiguity between that section and Section 9(a).
- Held that:
- Employers are required to arbitrate pending grievances with a former union under a CBA with that union, even if the union was subsequently superseded by another union.
- Requiring an employer to arbitrate pending grievances with a superseded union so as not to violate Section 8(a)(5)'s duty to bargain does not violate Section 9(a)'s requirement that unions chosen by the majority of employees in a bargaining unit are the exclusive bargaining representatives of all employees in the unit (see 29 U.S.C. § 158(a)(5); 29 U.S.C. § 159(a)).
The Board noted that:
- Both the Board and Federal Circuit Courts of Appeal held that an employer is required to arbitrate grievances under an expired CBA with a decertified union (Antioch Building Materials Co., 316 N.L.R.B. 647, 647 fn. 1 (1995); Auto Workers Local 1369 v. Telex Computer Prods., 816 F.2d 519, 523–24 (10th Cir. 1987)).
- The US Supreme Court held that an employer may be required to arbitrate grievances under a CBA between a union and a company with which the employer merged where the union of the merged company's employees was not any bargaining unit's majority representative (John Wiley & Sons, Inc. v. Livingston, 376 U.S. 543, 550–51 (1964)).
- In a similar case involving whether an employer had a duty to arbitrate grievances under a prior CBA if the old union was not only decertified but superseded by a new union with majority support among employees, the Board held that the employer cannot be required to arbitrate with the new union unless the employer clearly consents to the arbitration (Arizona Portland Cement Co., 302 N.L.R.B. 36 (1991)).
- The text of the two NLRA sections "frames the issue but does not resolve it."
- Section 9(a) effectively requires employers to negotiate with no representative other than the union selected by a majority of employees in a bargaining unit once that new union is certified (Medo Photo Supply Corp. v. NLRB, 321 U.S. 678, 684 (1944)).
The Board reasoned that its rule requiring employers to arbitrate pending grievances with a former union under an expired CBA with that union even if the former union was superseded by a new union:
- Was not inconsistent with the exclusivity principle of Section 9(a) that makes the new union the employees' exclusive representative because:
- the exclusivity principle "cuts both ways" in that it makes the old union the employees' exclusive representative during the period before it was superseded by the new union;
- the new union lacks authority to compel arbitration on pending grievances from the CBA with the old union and therefore, in this way, cannot represent employees exclusively or really at all;
- the underlying concern behind the exclusivity principle of preventing employers from interfering in employees' rights to choose their bargaining representative and to prevent chaos in bargaining due to there being two or more CBAs applying to a group of employees simultaneously would not be present in the situation here involving "transition from one exclusive representative to another and the need to resolve pre-existing labor disputes";
- requiring an employer to arbitrate grievances with the old union would not reasonably lead employees to believe that the employer is interfering with their right to choose a new representative; and
- the rule did not implicate concerns of multiple CBAs applying to a single unit of employees simultaneously, as in this situation the employer was only being required to arbitrate over the expired CBA with the old union, and the old union was not asserting new bargaining rights but only those rights based on the expired CBA.
- Served the NLRA's policy goal of vindicating employees' Section 7 right to bargain collectively because:
- only the old, superseded union has the authority to compel arbitration under the grievance and arbitration procedure established by the old CBA; and
- the old union is more likely to effectively pursue arbitration than the new union under the old CBA because the old union negotiated and administered it.
Member Hirozawa's concurrence pointed out as additional support for the Board's decision and holding that Section 9(a) does not mean that a union must be employees' exclusive representative for the employer to have a duty to bargain with it. Therefore, the employer could still have a Section 8(a)(5) duty to bargain with the superseded union over the pending grievances without violating Section 9(a)'s exclusivity principle.
Practical Implications
The Board's decision in Children's Hospital held, in a matter of first impression, that employers are required to arbitrate grievances with a superseded union arising under an expired CBA with that superseded union even where a new union has been chosen as the employees' representative. Now that the Board has apparently fulfilled the DC Circuit's directive to resolve the latent ambiguity between Section 8(a)(5) and Section 9(a), the matter could return to the DC Circuit. The court would then address whether the NLRB's decision was "manifestly contrary" to the NLRA or arbitrary and capricious under Chevron.