NLRB Improves Arbitration Deferral Standard

February 10, 2015 by Susan Garea

The NLRB for many years has placed on hold union and employee unfair labor practice (ULP) charges filed during the term of a collective bargaining agreement, and instead deferred the charge to the parties’ contractual arbitration process.  Once an arbitration decision is issued, the Board also defers to that decision, and in essence adopts the arbitrator’s decision as its own, so long as the arbitration decision satisfies certain criteria.  In Babcock & Wilcox Construction Co., 361 NLRB No. 132 (December 15, 2014), the NLRB has modified its standard for deferring to arbitral decisions that overlap with an unfair labor practice charge alleging violation of Section 8(a)(3) of the National Labor Relations Act (prohibiting discrimination against employees for engaging in union activities). For more on rulings related to union organizing protections visit the Beeson, Tayer and Bodine (BT&B) blog.

Under its prior standard set forth in Olin Corp., 268 NLRB 573 (1984), the Board deferred to arbitral decisions where (1) the contractual issue was “factually parallel” to the unfair labor practice issue; (2) the arbitrator was presented generally with the facts relevant to resolving the issue; and (3) the award was not “clearly repugnant” to the Act.

In Babcock & Wilcox, the Board concluded that the old standard created a significant risk that the Board was abdicating its duty to enforce the Act and permitting, for example, discipline to stand that was, in fact, an unlawful reprisal for union or protected concerted activity.

Under the Board’s new standard for post-arbitral deferral in 8(a)(3) cases, the Board will defer to an arbitration decision only where the party urging deferral shows that:

(1)   the arbitrator was explicitly authorized to decide the unfair labor practice issue;

(2)   the arbitrator was presented with and considered the statutory issue or was prevented from doing so by the party opposing deferral; and

(3)   Board law reasonably permits the award.

While the Babcock & Wilcox post-arbitration deferral standard is more protective of employees’ statutory rights, it does not require the arbitrator to reach the same result the Board itself might have reached were it to have decided the case.

In addition, the Board ruled that it will now only defer to settlement agreements arising out of the grievance-arbitration process if it can be shown that 1) the parties intended to settle the unfair labor practice issue, 2) that the parties addressed the ULP in the settlement agreement, and 3) that Board law reasonably permits the settlement agreement.

Finally, the Board adopted a new pre-arbitration deferral standard, ruling that it will not defer an 8(a)(3) unfair labor practice charge pre-arbitration unless the parties have authorized the arbitrator to decide the unfair labor practice issue.

If you are confronting a potential unfair labor practices situation where an employer has violated both a collective bargaining agreement and employees’ statutory rights to engage in union or protected concerted activity, Beeson, Tayer & Bodine can advise you in enforcing employees’ statutory and contractual rights. Please visit our website or contact us at our offices in Oakland [510.625.9700] or Sacramento [916.325.2100].

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