The National Labor Relations Board has issued a press release announcing its intention to revisit precedent created under a pair of Board decisions nearly 59 and 30 years old, respectively.  The precedent involves under what circumstances the NLRB will defer to decisions of labor arbitrators in cases where there are pending NLRB unfair labor practice charges arising out of the same facts.

In its press release, the Board described the current precedent this way:

Under the existing standard, the Board defers to an arbitration award when (1) the arbitration proceedings are fair and regular; (2) all parties agree to be bound; and (3) the arbitral decision is not repugnant to the purposes and policies of the Act.  Spielberg Mfg. Co., 112 NLRB 1080 (1955).  Further, the arbitral forum must have considered the unfair labor practice issue.  The Board deems the unfair labor practice issue adequately considered if (1) the contractual issue is factually parallel to the unfair labor practice issue, and (2) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice issue.  Olin Corp., 268 NLRB 573 (1984).  The burden of proof rests with the party opposing deferral.

The Board explained that the General Counsel (based on Memorandum GC 11-05 (January 20, 2011)) has asked the Board to change existing law regarding whether the unfair labor practice issue was adequately considered (developed in the Olin case) in the following way:

Under his proposal, the party urging deferral would bear the burden of demonstrating that (1) the collective-bargaining agreement incorporates the statutory right, or the statutory issue was presented to the arbitrator, and (2) the arbitrator correctly enunciated the applicable statutory principles and applied them in deciding the issue.  If the party urging deferral makes that showing, the Board would defer unless the award was clearly repugnant to the Act. 

The Board issued an order in the case in which the issue is presented (Babcock & Wilcox Construction Company, Case 28-CA-022625) setting out the questions for amici to address.  Principal amicus briefs are due by March 25, 2014, and may not exceed 50 pages.  Responsive briefs are due by April 8, 2014, and may not exceed 25 pages.

As General Counsel of the NLRB I asked the Division of Operations Management to issue Memorandum OM 10-13 (November 3, 2009).  The OM Memorandum noted, among other things, that in contrast to the Spielberg/Olin factors applied by the Board, the United States Court of Appeals for the District of Columbia Circuit had adopted in effect a two step test when reviewing those Board determinations: (1) whether the arbitral procedures were fair and regular, and (2) whether the union had violated the duty of fair representation.  E.g., Titanium Metals Corp. v. NLRB, 392 F.2nd 439 (D.C. Cir. 2004).   This test would virtually eliminate the ability of the Board to determine whether an unfair labor practice issue was adequately considered and whether the arbitrator’s award was “repugnant to the Act.”   

Because of the major role played by the D.C. Circuit in the review of Board cases (it has jurisdiction to hear petitions for review of NLRB decisions filed by private parties in virtually any case), the OM Memorandum noted ”[t]he need for refinement” of the Spielberg/Olin test, and that “a new approach to cases involving arbitral deference may be warranted” (emphasis added).  Fifteen months later, Acting General Counsel Solomon issued Memorandum GC 11-05, setting forth the test now sought by the General Counsel in the Babcock & Wilcox case.

It will be interesting to see what the Board does in this case.  The Board clearly has an interest in arbitration awards (and grievance settlements) which implicate statutory rights under the National Labor Relations Act.  But it should avoid any standard that undermines the utility and finality of labor arbitration by making grievance-arbitration procedures simply another step in the NLRB process.