Deferral is a term that hardcore labor lawyers, like yours truly, know, but unless you are a seasoned labor practitioner, you probably don’t know what it means. In the NLRB’s 1955 Spielbergruling, the Board decided that it would defer to arbitrators’ decisions when the proceedings appeared to have been fair and regular, the parties had agreed to be bound, and the decision wasn’t “clearly repugnant to the purposes and policies” of the National Labor Relations Act.

At the end of 2014, the Board changed the terms of when deferral is appropriate. Now, the NLRB will only defer on an issue under Section 8(a)(1) or (3) of the National Labor Relations Act if the party advocating for deferral (usually the employer) can prove that the arbitrator was: (a) explicitly authorized to decide the unfair labor practice issue; (b) the arbitrator was presented with and considered the statutory issue; and (c) NLRB law would reasonably permit the award.

This new approach requires employers with unionized workforces to reconsider their labor arbitration strategies and specific contract language addressing whether to specifically give arbitrators the power to decide Unfair Labor Practices.