Unionized businesses should take note of the National Labor Relations Board’s (“Board”) recent decision in MV Transportation, Inc, where the Board eased the path for employers to make unilateral changes to collective bargaining agreements.

In the latest of a string of recent management-friendly decisions, the Board voted 3-1 to abandon the “clear and unmistakable waiver” test in favor of the “contract coverage” test as the standard for determining whether a collective bargaining agreement grants the employer the right to take certain actions unilaterally. The Board’s decision impacts management’s obligations to bargain with the union and emphasizes the “here and now” of the parties arriving at a comprehensive collectively bargained agreement over reliance on the prospect of “future bargaining.”

The New Test vs. The Old Test

Under the clear and unmistakable waiver test, management would violate the Act if it acted unilaterally with respect to mandatory subjects of bargaining unless the parties “unequivocally and specifically” expressed their mutual intention to permit unilateral employer action with respect to a particular employment term. This standard was predicated on the union’s waiver of its right to insist on bargaining, i.e., asking whether the union knowingly and voluntarily relinquished its right to bargain about a matter. If management could not identify “sufficiently specific” contractual language permitting unilateral action, then no waiver occurred.

The “contract coverage” test, however, recognizes that where the disputed change is covered by the collective bargaining agreement, the union has exercised its bargaining right making the question of waiver irrelevant. Adopting the contract coverage test, which multiple federal courts of appeal have embraced explicitly or in principle, the Board will look at the plain language of the collective bargaining agreement. The Board will now find that the agreement covers the challenged unilateral act if the act falls within the scope of the contract language that grants the employer to the right to act unilaterally.

Significant is that the Board will not require that the agreement specifically mention, refer to, or address the employer decision at issue. This departure from the clear and unmistakable waiver test recognizes collective bargaining agreements are meant to cover a myriad of fact patterns, as it is impossible for parties to foresee every possible outcome when drafting the agreement.

In short, where the contract covers the act in question, there is no violation of the Act. Notably, if a contract does not cover a disputed unilateral change, the Board will next apply the clear and unmistakable waiver test to determine whether the union waived its right to bargain.

What MV Transportation Means for Employers

Management should not expect carte blanche authority derived from the purposely ambiguous management-rights clause. For example, unions may bargain harder over management-rights clauses and parties may be forced to define their bargained agreement regarding such clauses more precisely. Unions may also push for reserving certain actions for future collective bargaining.

As the Board states, however, the collective bargaining process is exactly where these issues should be resolved. The Board’s adoption of the contract coverage test encourages parties to negotiate an enduring collective bargaining agreement.