The Coronavirus pandemic has shuttered much economic activity and forced employers to make business decisions in response to a rapidly shifting legal landscape. The deluge of federal, state, and local orders, regulations, and guidance can complicate labor relations for unionized employers. “Essential employers” who have remained operational have faced demands for increased pay, enhanced leave, and increased safety measures (at the very least). Businesses that are gearing up to resume operations after being shut down and laying off or furloughing employees are likely to face similar demands. Already there have been reports of real and threatened job actions by unionized employees to support those demands.
In addition, employers who have continued to operate during the pandemic and those who are preparing to resume operations have had to generate COVID-19 prevention policies to protect their workforce and customers from the coronavirus. For unionized employers, some have collective bargaining agreements, or “CBAs,” with their union(s) that address these issues, but not all CBAs do. What must a unionized employer do?
Put simply, unionized employers must comply with their collective bargaining agreements and duty to bargain under the National Labor Relations Act lest they face a slew of potential unfair labor practice charges, or grievances under their CBAs. As every unionized employer knows, the NLRA requires them to bargain with the unions representing their employees “in respect to rates of pay, wages, hours of employment, or other conditions of employment.” Put in labor law lingo, employers must bargain over “mandatory subjects of bargaining,” such as pay increases or reductions, layoffs and recall from layoffs, job security, worker health and safety, and attendance and absence policies, to name but a few. But what exactly does this mean during a pandemic?
With one limited exception, the answer is straightforward: the duty to bargain remains the same as it was before the pandemic hit. Thus, the employer’s collective bargaining agreements remain in effect. Here are a few basic rules:
An employer is generally not entitled to make unilateral changes to the terms of its CBA.
Conversely, an employer is not required to entertain union proposals to modify a CBA during the term of the agreement.
Where mandatory subjects of bargaining are not covered by the collective bargaining agreement, an employer is generally required to provide notice to the union and an opportunity to bargain before implementing changes unless the collective bargaining agreement itself grants the employer the discretion to make the changes.
If an employer does not have an existing collective bargaining agreement -- either because the CBA has expired or because the employer is negotiating with a union for an initial contract -- all mandatory subjects are subject to the duty to bargain, and an employer is obligated to maintain the status quo as it existed before the union achieved representational status. Generally this means that the employer is prohibited from changing the wages, hours, or terms and conditions of unionized employees’ employment without giving the union notice and an opportunity to bargain.
The one limited exception to the above is the so-called “exigent circumstances” exception. The General Counsel of the National Labor Relations Board – noting the “unprecedented situation” caused by the pandemic – recently and helpfully published a Memorandum summarizing several cases in which the Board considered the exigent circumstances exception and the duty to bargain during emergencies such as hurricanes, a local travel ban due to an ice storm, and the 9/11 attacks. This exception excuses an employer from its bargaining obligation when “economic exigencies compel prompt action.” The upshot of this limited exception is that an employer is privileged to take unilateral action when there are “extraordinary, unforeseen events having a major economic effect that requires the employer to take immediate action.” Absent such a catastrophe, however, an employer must provide the union with notice and an opportunity to bargain when confronted with external exigencies that are not reasonably foreseeable and require prompt action. Even in situations in which an employer is excused from bargaining under the exigent circumstances exception, the employer still has an obligation to bargain over the “effects” of any unilaterally-implemented decision.
What should unionized employers be doing?
Before taking any action in response to the pandemic, every employer should review and analyze its CBA to determine what subjects are covered by the agreement. If the CBA does not explicitly address a particular issue, you should analyze the agreement’s Management Rights Clause and any “Zipper Clause” to determine the breadth of these provisions and whether they permit you to unilaterally take the proposed course of action.
Currently, a majority of the NLRB has adopted a “contract coverage”-based analysis in evaluating whether an employer has unlawfully failed to bargain in violation of the NLRA. When engaging in this analysis, the Board looks at the agreement to see whether the challenged act falls within the “scope” of contract language granting the employer the ability to act unilaterally. If it does, then there is no unfair labor practice in not bargaining with the union. If it doesn’t, the employer must engage in bargaining or there is a violation of the law.
Employers should nevertheless proceed with caution. Just because an employer’s actions do not violate the NLRA does not mean that they don’t violate the collective bargaining agreement. An employer may face a grievance and possibly arbitration under the CBA brought by the union to determine whether the employer’s actions complied with the CBA. Thus, if the employer doesn’t have the right to unilaterally take a certain action under the CBA, the employer should give the union notice and an opportunity to bargain about the proposed action.
Employers also should review and analyze the no-strike provisions of their CBAs. Most no-strike clauses prohibit employees from engaging in job actions to modify the terms of an existing CBA. However, employers should proceed with caution where the job action is based on safety concerns, because Section 13(a) of the Occupational Safety and Health Act and Section 502 of the Labor Management Relations Act permit employees to refuse to work in certain limited circumstances due to imminent and abnormally dangerous conditions. However, unionized employers without a CBA – either because their CBA has expired or because they are in the process of negotiating an initial CBA – should be aware that employees have the right to strike or engage in other forms of protected concerted activities to support demands to change the terms and conditions of their employment.
Unless covered by the CBA, unionized employers should give their unions notice and an opportunity to bargain over COVID-19 prevention policies before implementing such policies.
Employers also should be mindful that unions are likely to be submitting numerous information requests regarding how the employer intends to keep employees safe during the pandemic. As a general rule, employers are obligated to furnish to unions, upon reasonable requests, information pertaining to mandatory subjects of bargaining. Such information should be provided to the extent that it exists, is not unduly burdensome to produce, and does not implicate confidentiality concerns. An employer should negotiate with its union over requests that are too onerous or that request confidential information.
To the extent that an employer took action under the “exigent circumstances” exception to the duty to bargain, the employer should contact its union(s) and offer to negotiate over the effects of the action if it has not already done so.
There is an additional complication for employers who have obtained loans under the Coronavirus Economic Stabilization Act provisions of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act). The CARES Act requires loan recipients not to “abrogate existing collective bargaining agreements for the term of the loan and 2 years after completing repayment of the loan.” Unfortunately, the CARES Act does not define the term “abrogate.” Nor has any guidance been issued to clarify what this provision means. Accordingly, it is uncertain what impact the CARES Act may have on the usual rules of collective bargaining under the National Labor Relations Act. Does this provision of the CARES Act apply only to an employer who tries to get rid of its CBA entirely? Or does it sweep more broadly and also apply, for example, to a collectively bargained modification of an existing CBA, employer proposals to modify an expired CBA while negotiating the terms of a successor contract, or an employer’s implementation of its final offer after negotiating to impasse to replace an expired CBA? These questions have yet to be answered.
The current pandemic has created difficulties for all employers and has the potential to generate particular problems for unionized employers. Oftentimes, the best course for a unionized employer is to try to work with its union to arrive at negotiated solutions. That general rule is just as applicable during this pandemic as it was before. Attorneys in the Labor Relations Practice Group at Constangy are available to help.
For a printer-friendly copy, click here.