A federal court rejected an NLRB decision finding that an employer had illegally laid off two employees, noting the Board “failed to follow the appropriate analytical path.” The Third Circuit Court of Appeals ruled that the Board’s approach to mandatory subjects of collective bargaining after a labor contract expires was incorrect and sent the case back to the Board.
The decision is one of the first instances of a federal court rejecting the current Board’s aggressive approach to labor law. The Third Circuit was notably harsh in its assessment of the Board’s decision-making, saying that it did not “comport with good grammar” nor “common sense,” among other rebukes. The decision serves as a reminder that while the current Board may continue to push the boundaries of labor law and policy, federal courts – to which all Board decisions may be appealed – may serve as an important backstop to the Board’s more aggressive changes, such as card check recognition.
Background: The case, PG Publishing Co., Inc. v. NLRB, 3d Cir. App., No. 22-2774 (Sept. 26, 2023), involved a newspaper which laid off two employees who were previously guaranteed work under an expired union contract. The union claimed that although the contract had expired, the provision guaranteeing shifts should remain in effect while the two sides negotiated a new collective bargaining agreement. A Board majority agreed, concluding the newspaper could not lay off the employees without bargaining with the union first. Dissenting Board members disagreed, finding the layoffs lawful, and concluded the newspaper was only required to bargain over the effects of the layoffs.
“The dissent had it right.” A Third Circuit panel rejected the Board majority’s reasoning and endorsed the dissent, concluding the provision guaranteeing shifts expired when the contract expired. The court found that the Board’s “clear and unmistakable waiver” approach, which only permits unilateral employer changes where the union has clearly waived its right to bargain such changes, was incorrect. The court held that the approach should only be used when the collective bargaining agreement indicates that certain provisions are meant to survive expiration. Otherwise, ordinary contractual principles should apply to determine whether certain provisions survive expiration.
Outlook: In a separate case, the Board is considering whether to make the “clear and unmistakable waiver” approach the standard for unilateral employer actions cases. In light of the Third Circuit’s decision, the Board may reconsider that approach. Employers can hope that federal courts will similarly stymie other Board efforts to radically change federal labor law.
