Hunton Employment & Labor Perspectives

An employer’s duty to bargain may change during emergency situations, and the General Counsel for the National Labor Relations Board released a series of case summaries Friday to help employers navigate the exceptions.

General Counsel Peter Robb summarized nine Board cases addressing both general public emergencies and emergencies particular to individual employers.  Robb did not make any declarations about how the COVID-19 outbreak and associated response might affect bargaining obligations, but the summarized cases provide good examples of bargaining exceptions that may or may not apply.

Duty to Bargain during Public Emergency Situations

 The first set of cases covered by the NLRB release involved public emergencies.  We previously provided some guidance on this issue in an earlier blog available here.  The Board discussed some of the same cases, but also provided some additional helpful examples.

In K-Mart Corp., 341 NLRB 702, 720 (2004), the employer implemented extensive layoffs after the September 11 terrorist attacks caused it to lose 60 percent of its anticipated business volume and resulted in a bankruptcy filing.  Because 9/11 represented an “extraordinary unforeseen event having a major economic effect that required the employer to take immediate action,” the administrative law judge held the employer’s unilateral layoffs did not violate the National Labor Relations Act.  The employer did, however, provide the union with notice of the layoffs, although it did not wait for the union to request bargaining before moving forward with the decision.

In two other cases involving compensation changes, the employers’ unilateral changes without bargaining violated the Act.  In Dynatron, 324 NLRB 572, 578-79 (1997), the employer changed its policy regarding pay for employees during hurricanes without attempting to bargain with the union.  And in Gannett Rochester Newspapers, 319 NLRB 215 (1995), the employer unilaterally decided not to pay employees under an expired collective bargaining agreement for absences caused by an emergency no-travel order related to an ice storm.  Because wages for time lost due to weather emergencies qualified as a mandatory subject of bargaining, the Board held the employer had a duty to provide notice and an opportunity to bargain before making the change.

Interestingly, Gannett involved two different unions, and created two different results.  The second union contract was not expired, and included a zipper clause that allowed the employer to make unilateral changes regarding topics that did not fall within the scope of the CBA.  Because the CBA did not otherwise cover wages for weather emergencies, the Board found the unilateral change fell within the scope of the employer’s right based on the zipper clause.  This case illustrates an important point for employers with CBAs during the coronavirus -- that they should review their CBAs to see if issues are addressed before  deciding whether it is necessary to utilize an emergency exception.

Duty to Bargain for Employer-Specific Emergencies

 General Counsel Robb’s case summaries also included several cases involving exigencies specific to particular employers.  Two cases involve failures to obtain credit, and two involved supply-side shortages.  All four cases stand for the principle that even if an employer may make a unilateral change under certain circumstances, it will not excuse the duty to bargain over the effects of the change.

The two credit cases, Cyclone Fence, Inc., 330 NLRB 1354 (2000) and Raskin Packing Company, 246 NLRB 78 (1979), both involved employers that abruptly closed after their lenders terminated their lines of credit.  In those cases, the Board found that the employers maintained their duty to bargain over the effects of the closures, even though the closures themselves resulted from unforeseen economic emergencies that left the employers with no choice but to cease operations.

Both of the supply cases involved log shortages in the lumber industry.  In the first case, Brooks-Scanlon, Inc., 247 NLRB 476 (1979), the Board held that a decline in forestable trees, activities of conservation groups, and needs of other area lumber companies created a set of “economic factors so compelling that bargaining could not alter them.”  Thus, the employer did not violate the Act by making unilateral lay off decisions.  But, the employer did properly bargain with the union over the effects of the closures.

In Hankins Lumber,  316 NLRB 837 (1995), the Board refused to excuse an employer’s failure to bargain over terminations resulting from a log shortage.  The Board held that the supply-side issues were foreseeable and did not experience a “precipitate worsening” in the period leading up to the lay offs.  Thus, distinguishing Brooks-Scanlon, the Board found the employer violated the Act by failing to bargain over the lay offs, despite the acknowledged supply shortage.

Finally, in Virginia Mason Hospital, 357 NLRB 564 (2011), the Obama Board found the employer violated the Act by unilaterally implementing a flu prevention policy for its nurses.  The ALJ found the hospital policy change fell within an exception to the duty to bargain because it (1) went directly to the employer’s core purpose: to protect patient’s health; (2) the policy was narrowly tailored to prevent the spread of influenza; and (3) the employer limited the requirement to nurses who refused to be immunized.  But the Board found that case the employer relied on, Peerless Publications, 283 NLRB 334 (1987), was limited on its facts because it involved a constitutional question related to a newspaper’s First Amendment rights.  Thus, the three-part test in Peerless -- that an employer could make certain unilateral changes if they went to the core of its purpose, were narrowly tailored, and limited in applicability, did not apply more broadly to other businesses.

Takeaways

The case summaries contain a few common themes.  First, emergency exceptions to the duty to bargain apply only in unforeseeable situations.  If an employer ends up in an unsustainable position because it failed to address foreseeable business problems, then the exceptions likely do not apply.  If an employer’s business problems are directly related to COVID-19, then it is more likely an emergency exception applies.

Second, even if an emergency exception excuses a duty to bargain over a particular decision, the employer likely maintains its duty to bargain over its effects.  The exigency exception allows exceptions from the bargaining obligation when prompt action is required, but once that immediate exigency ceases, bargaining obligations continue.

Third, whenever possible, employers should provide the union notice of their intent to make changes to terms and conditions of employment.  Even if an employer ultimately determines it needs to make a change without bargaining, the provision of notice and some (brief) period of time for the union to respond will support an employer’s good faith attempt to meet its NLRA obligations.

As the COVID-19 outbreak continues and stresses on business increase, experienced labor counsel can assist employers unsure about whether an emergency exception may apply to a proposed business change and how to make needed changes while staying within the confines of the law and their contractual obligations.