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NLRB overrules another precedent, finds employer lawfully disciplined employees without notice to union prior to first contract

By Ronald Miller, J.D.

A pre-discipline bargaining obligation does not exist when an employer exercises discretion within the framework of an established disciplinary policy.

An employer lawfully disciplined four employees without first providing a union with notice and an opportunity to bargain before imposing discipline, ruled the NLRB. In so ruling, the Board overruled its 2016 decision in Total Security Management Illinois 1, LLC, and reversed an administrative law judge’s finding that the employer violated Section 8(a)(5) and (1) of the NLRA. The Board noted that the employer applied its preexisting disciplinary policy, which included the use of discretion, in disciplining the four employees, which it was lawfully permitted to do. The correct analysis, said the Board, must focus on whether an employer’s individual disciplinary action is similar in kind and degree to what the employer did in the past within the structure of established policy or practice (800 River Road Operating Company, LLC dba Care One at New Milford, June 23, 2020).

Disciplinary policy. In 2012, the union was certified as the bargaining representative of certain nonprofessional employees at the employer’s nursing care facility. During this time, the employer maintained a disciplinary policy in its employee handbook. The policy outlined guidelines that supervisors could take in administering discipline to correct misconduct. Under the policy, various disciplinary actions, including termination, may be initiated at any stage of the process depending on the nature of the specific inappropriate behavior, conduct, or performance and other relevant factors. Disciplinary actions included verbal or written warnings, suspension, final written warning, and termination.

Between October 2016 and March 2017, the employer suspended three employees and discharged a fourth employee pursuant to its disciplinary policy. It did not provide the union with notice or an opportunity to bargain prior to disciplining the employees. Rather, in June, during negotiations for an initial collective bargaining agreement, the employer informed the union of the suspensions and discharge. The union did not request bargaining over any of the suspensions or the discharge.

Pre-disciplinary bargaining obligation. An administrative law judge found that the suspensions and discharge met the definition of serious discipline under Total Security Management Illinois 1, LLC, and that the employer was required to provide notice and an opportunity to bargain to the union before it disciplined the employees. Total Security required an employer to provide a union with notice and opportunity to bargain about discretionary elements of an existing disciplinary policy before imposing serious discipline on any individual union-represented employees who are not yet covered by a collective bargaining agreement. Accordingly, the ALJ found that the employer violated Section 8(a)(5) and (1) when it failed to engage in pre-discipline bargaining with the union.

In Total Security, the Board majority claimed that “the Board has never clearly and adequately explained how (and to what extent) the [Katz unilateral-change] doctrine requiring employers to bargain over discretionary aspects of unilateral changes applies to the discipline of individual employees.” It relied on precedent applying the Supreme Court’s 1962 decision in NLRB v. Katz, which addressed the issue of what constitutes a material change in working conditions, in other contexts.

Union representative. Here, the Board also found that the language in the Supreme Court’s 1975 decision in NLRB v. Weingarten, Inc., generally supported the conclusion that employers do not have a statutory pre-discipline bargaining obligation. In Weingarten, the Court agreed with the Board that a bargaining-unit employee has the right to request that a union representative be present when the employee reasonably believes that an investigatory interview could result in discipline.

With regard to Total Security, the Board concluded that it cannot be reconciled with precedent specifically supporting the view that there is no statutory pre-discipline bargaining obligation, giving due consideration to the unique characteristics of disciplinary decision making, which necessarily involves some managerial discretion. Further, it concluded that the majority in Total Security was fundamentally mistaken in its interpretation of the Katz unilateral-change doctrine regarding when a material change has occurred in employees’ terms and conditions of employment.

In Katz, the Supreme Court held that, upon commencement of a bargaining relationship, employers of union-represented employees are required to maintain the status quo unless notice and an opportunity to bargain regarding a contemplated change to the status quo is provided to the union. Katz itself addressed employer actions taken after commencement of a bargaining relationship but before the parties have bargained to agreement or impasse. The Total Security majority erred by looking only at whether the application of an employer’s preexisting disciplinary policy or practice to discipline an individual employee included the use of any discretion and holding that the exercise of that discretion always means a “change” occurred within the meaning of Katz requiring advance notice and bargaining.

In this instance, the Board held that the correct analysis under Katz must focus on whether an employer’s individual disciplinary action is similar in kind and degree to what the employer did in the past within the structure of established policy or practice. Thus, the Board overruled the new bargaining requirements imposed by Total Security, and returned to long-standing law establishing that, upon commencement of a collective bargaining relationship, employers do not have an obligation under Section 8(d) and 8(a)(5) of the Act to bargain prior to disciplining unit employees in accordance with an established disciplinary policy or practice.

Retroactive application. Finding that Total Security Management was contrary to decades-old Board and Court precedent, and was ill-advised on policy grounds, the Board concluded that application of its new standard in this and all pending cases will not work a “manifest injustice.”

Accordingly, after determining that the employer did not violate the Act by applying its preexisting disciplinary policy in disciplining the four employees, the Board reversed the ALJ’s findings and dismissed the complaint allegation.