Federal Labor Board Ruling Seen As Win For LTL Employers

A decision by the U.S. National Labor Relations Board (NLRB) in a dispute involving a passenger transport contractor and a local transit union could benefit major less-than-truckload (LTL) carriers in their bargaining with the International Brotherhood of Teamsters.

In a majority decision released on September 10, the five-member board, whose members are appointed by the President, adopted the "contract coverage" standard for determining whether a unionized employer's unilateral change in a term or condition of employment violates the National Labor Relations Act (NLRA).

At the same time, the board said it is abandoning the "clear and unmistakable waiver" standard, which has been rejected by several federal courts of appeals, notably the Court of Appeals for the District of Columbia Circuit.

The "clear and unmistakable waiver" standard is generally considered to pose a higher hurdle for employers than the "contract coverage" standard.

The decision was made in a case involving the Las Vegas operations of MV Transport and the Amalgamated Transit Union. In issue was MV Transport's intent to implement new and revised work rules pursuant to the terms of their labor agreement with the union.

Using the previous standard, the board would find that a unilateral change to a work policy made by an employer violated the NLRA unless there was a contractual provision that "unequivocally and specifically" referred to the type of employer action at issue. The NLRB reaffirmed that standard in 2007 and has stuck to it since. However, the D.C. Circuit has applied the "contract coverage" standard for more than 25 years in appeals cases – even sanctioning the board in 2016 for continuing to apply the previous and more strict "clear and unmistakable waiver" standard.

"In addition to pointing out the futility of adhering to a standard unenforceable in the D.C. Circuit, the board said that the ‘contract coverage' standard is more consistent with the purposes of the [NLRA], explaining that it will encourage parties to anticipate and resolve potential labor-management issues through comprehensive collective bargaining and to settle unilateral-change disputes through grievance arbitration," the NLRB ruled.

Even though the case specifically involved a transit union, cases brought before the NLRB involving the Teamsters Union and its contracts with major LTL carriers – YRC Freight, ABF Freight, and UPS Freight – would presumably be held to the same standard, according to Jack Finklea, a partner with the Scopelitis law firm and an expert in transportation labor policy.

"This is a win for unionized trucking companies, because it makes it a little easier for the company to show when it has the power to make unilateral changes in employment policy, whereas prior to today's decision they had a higher standard to overcome," Finklea told FreightWaves. The Teamsters Union was not available to comment.

In dissenting from the majority's opinion, NLRB board member Lauren McFerran called the decision a "grave threat" to collective bargaining. Replacing the previous standard with the "contract coverage" standard, she said, creates a "powerful incentive" for employers to insist on provisions benefiting management in labor agreements.

"With such contractual language in place, employers will be free to change employees' terms and conditions of employment at will during the term of the agreement and after, the duty to bargain…will effectively be set aside, and American workplaces risk returning to the era before 1935 when employers could, and did, exercise their power unchecked."

The decision follows a series of rulings from the board that could be seen as siding with employers versus employees. The most recent ruling asserted that misclassifying employees is not considered a violation.

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