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NLRB Finds Employers Do Not Have Bargain Discipline with a Newly Certified Union Prior to the Signing of an Initial Contract

Labor & Employment Publications

On Tuesday, the National Labor Relations Board (NLRB) in 800 River Road Operating Company, LLC d/b/a Care One at New Milford,  (Care One) issued a decision overturning the controversial Total Security Management decision. In Care One, the NLRB held that employers are not obligated to bargain prior to disciplining employees after the certification of a union but prior to an initial contract.  The decision brings clarity regarding an employer’s obligation to maintain the status quo during the period between certification of a new bargaining unit and the signing of an initial contract.   

Pre-disciplinary Bargaining Obligation

As a general matter, employers bargaining an initial contract with a newly certified union are required to maintain the status quo regarding terms and conditions of employment. For decades this meant that if an employer had an established disciplinary procedure, the employer was free to discipline employees under the established procedure until a collective bargaining agreement was signed. However, in the 2012 Alan Ritchey decision, the Board, for the first time, announced a standard requiring an employer who was bargaining an initial contract to bargain with the union prior to issuing “serious” disciplinary action. While this case was invalidated due to the Board lacking a quorum to issue the decision, its holding was affirmed and extended in Total Security Management Illinois 1, LLC, 364 NLRB No. 106 (2016). In Total Security Management, the Board held that employers bargaining an initial contract, with limited exceptions, were required to bargain with the union before disciplining employees if the employer exercised any degree of discretion in issuing the discipline. The rationale was built on the premise that by exercising discretion in issuing discipline, the employer was unilaterally changing terms and conditions of employment and had to bargain the change with the union.

The Board Overrules Total Security Management

Care One involved a group of employees at a New Jersey nursing home who were disciplined after the certification of a union, but prior to the parties coming to terms on an initial contract. The Union filed a charge alleging the employer violated Section 8(a)(5) of the Act by disciplining workers without providing notice and an opportunity to bargain the discipline. In an interesting twist, the union attempted to withdraw this charge while it was pending. However, the Board rejected the union’s request and decided to process the case to decision.  

In reversing Total Security Management, the Board found that the majority unjustifiably created a pre-discipline bargaining obligation that was at odds with established Board and Court precedent. Most notably, the Board noted Total Security Management misconstrued the unilateral change doctrine under the Supreme Court’s decision in Katz. In Katz, the Court held that once a union was certified, employers must maintain the status quo, i.e., refrain from making a material change regarding employee terms and condition. The Board stated the Total Security Management majority erred by holding that the use of any degree of discretion in a disciplinary decision meant that a “change” occurred within the meaning of Katz. The Board clarified that the correct analysis under Katz focuses on whether an employer is making a disciplinary decision materially consistent with its established disciplinary procedures, including the use of discretion. If it is, then the status quo has been maintained.  

The Board also noted that Total Security Management created a complicated and burdensome bargaining scheme incompatible with general bargaining principals. For example, under the decision, parties were subjected to a hybrid bargaining system which required bargaining for serious discipline, but not for other less serious offenses, although both are mandatory subjects of bargaining.

In sum, the Board found Total Security Management lacking support in law and logic and returned to the longstanding principal that an employer can discipline an employee of a newly certified union pursuant to an existing disciplinary policy prior the signing of an initial contract.

Retroactive Application

The Board applied its decision retroactively, meaning the ruling applies to all pending cases regardless of their stage. Parties who are currently litigating this issue before the Board or in the Courts, are subject to this ruling. 

Key Takeaway

After a union is certified, but before the initial collective bargaining agreement is executed, an employer is free to discipline employees pursuant to existing disciplinary without bargaining with the union. However, during this time, employers should also be cautious in making changes to existing disciplinary policies or issuing discipline in a way that is conceivably inconsistent with how the discipline has been issued under existing policies.