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Overturning DuPont, full NLRB clarifies ‘past practice’ unilateral change doctrine

In another 3-2 decision, this one involving Raytheon Network Centric Systems, the fully constituted NLRB has issued a ruling addressing bargaining obligations required before an employer implements a unilateral “change” in employment matters. Consistent with other Board cases dating back to 1964, the Board held that actions do not constitute a change if they are similar in kind and degree with an established past practice consisting of comparable unilateral actions. The Board also held this principle applies regardless of whether (i) a collective bargaining agreement (CBA) was in effect when the past practice was created, and (ii) no CBA existed when the disputed actions were taken. Finally, the Board ruled such actions consistent with an established practice do not constitute a change requiring bargaining merely because they may involve some degree of discretion (Raytheon Network Centric Systems, December 15, 2017).

The decision overruled a case decided last year—E.I. Du Pont de Nemours, Louisville Works, (August 26, 2016) (DuPont)—where a divided Board held that actions consistent with an established past practice constitute a change, and therefore require the employer to provide the union with notice and an opportunity to bargain prior to implementation, if the past practice was created under a management-rights clause in a CBA that has expired, or if the disputed actions involved employer discretion.

But now the Board has concluded that the employer’s changes to employee healthcare benefits in 2013 were a continuation of Raytheon’s past practice involving similar unilateral changes made at the same time every year from 2001 to 2012. It accordingly found the company did not violate the National Labor Relations Act by failing to give its union advance notice and the opportunity for bargaining before making the 2013 changes.

Dissent. Members Pearce and McFerran dissented in the case, again noting the majority had failed to provide notice and an opportunity for briefing, violating an agency norm. The dissent also pointed out that DuPont is currently under review by the U.S. Court of Appeals for the District of Columbia Circuit, which had – in a prior remand – plainly indicated that the Board was free to choose the rule adopted and explained in DuPont.

“In holding that an employer may continue to make sweeping discretionary changes in employment terms even after a contractual provision authorizing such changes has expired and while the parties are seeking to reach a new collective-bargaining agreement, the majority’s decision fundamentally misinterprets the Supreme Court’s decision in NLRB v. Katz. Indeed, Katz clearly says the exact opposite: that an employer’s unilateral change violates the duty to bargain under the National Labor Relations Act, even where the change is consistent with a past practice of changes made, if the changes involve significant employer discretion,” concluded the dissent.