The National Labor Relations Act (NLRA) was passed by Congress back in 1935. The Law applies to most employees in the private sector and grants them rights to organize for the purpose of bargaining with an employer for better pay and working conditions. The NLRA prohibits employers from refusing to recognize and bargain with employee representatives and is enforced by the National Labor Relations Board (NLRB).
Over the years, courts interpreting the NLRA have established standards for determining when employers have violated the law. When employees are represented by a union, employers are not allowed to make certain kinds of decisions without notifying the union and opening the issue for bargaining.
To understand why a recent decision by the NLRB limits employer ability to make unilateral changes in the workplace and what it means for Texas businesses, keep reading for a discussion by the Texas Labor and Employment Lawyers at MehaffyWeber.
The NLRB Returns to Established Law With Recent Decision
In December 2024, the NLRB issued a decision and order in Endurance Environmental Solutions, LLC (Endurance). The Board overturned a previous decision and reinstated the standard that had been well-established for many years.
At issue was the employer’s unilateral decision to install cameras in work trucks to monitor employee activity. The employer countered the allegations of unfair labor practices with the affirmative defense that the right to bargain over the decision had been surrendered by the employees in the collective bargaining agreement. Until 2019, the standard used by the Board had been that to effectively waive the right to collective bargaining, the union’s intent to waive the right must be “clear and unmistakable”.
In MV Transportation Inc., the Board had abandoned the more specific, clear, and unmistakable standard in favor of the more general “contract coverage” standard. The more employer-friendly standard looked at the language of the bargaining agreement to determine whether the action taken was within the scope of the employer’s authority to act unilaterally.
The Board explained in Endurance that requiring the waiver to be clear and unmistakable was more consistent with the NLRA goal of encouraging the resolution of labor disputes through collective bargaining. The decision stressed the obligation of employers to bargain with employees over changes regarding wages and working conditions. Relinquishing the right to bargain must be done by an express intention.
What Kinds of Unilateral Employer Actions Require a Clear and Unmistakable Waiver of Bargaining Rights?
The NLRA requires employers and employees to bargain over ‘mandatory subjects’ when either side proposes a change. Mandatory subjects are non-minor kinds of changes that affect wages, hours, or working conditions. Employers must recognize and cooperate with employee representatives and bargain in good faith.
Whether a unilateral employer change affects a mandatory subject is determined on a case-by-case basis. Any changes related to compensation and benefits or to work schedules will involve mandatory subjects. Mandatory subjects also include changes that affect job responsibilities, employee disciplinary procedures, and job security.
When a Waiver of Bargaining Rights is Considered Clear and Unmistakable
Requiring the waiver of bargaining rights to be clear and unmistakable can be understood to mean that the language in the bargaining agreement must specifically address the employer action in question and evidence a direct intention to relinquish decision-making authority to the employer. The bargaining history of the parties is relevant to the question of waiver when it is clear a particular issue was specifically negotiated, and the union unmistakably relinquished the right to future bargaining.
The management rights clause in a labor contract delineates the authority retained by an employer to manage business operations without needing to bargain with the union on behalf of employees. Essentially, a management rights clause defines the unilateral actions an employer is allowed to take.
Employers would typically favor a management rights clause with less specific language to confer a broader grant of authority. However, under current law, the authority granted would likely need to be fairly specific, or it may be found too general to constitute a valid waiver of bargaining rights.
In Endurance, the employer relied on language in the management rights clause giving the employer the right to “implement changes in equipment.” The NLRB found the language too general to evidence the specific intention to grant authority to the employer to install cameras in employee work trucks unilaterally.
Other Recent NLRB Decisions Indicating an Intention to Limit Employers From Making Unilateral Changes
Two other recent decisions by the NLRB support the Board’s intent to limit the ability of employers to act unilaterally regarding mandatory subjects. In August of 2023, the NLRB issued two decisions affecting an employer’s ability to take unilateral action that is consistent with past practices.
In Wendt Corporation, the Board overturned a previous decision that had allowed employers to take unilateral action when it was consistent with actions taken in the past. The Board got a little more specific in Technocap, LLC, and determined that an employer could not take unilateral action based on past practices authorized by an expired collective bargaining agreement (CBA).
Employers who may be running operations relying on the authority of past practices or the language of an expired CBA should review their practices and consult with a labor and employment lawyer to ensure they are not violating the NLRA.
How the NLRB Decisions Will Affect Texas Employers
For the time being, Texas union employers should proceed cautiously when considering unilateral action. Unilateral action should be taken only after a careful review of the bargaining agreement’s management rights clause and the opinion of a Texas labor and employment attorney.
Though the NLRB has been decidedly pro-employee under the Biden administration, it is anticipated that the winds of change with the Trump administration will start the pendulum swinging back in the direction of a more employer-friendly NLRB.
Already, the Trump administration removed NLRB member Gwynne Wilcox and discharged Jennifer Abruzzo, NLRB general counsel and her replacement NLRB Acting General Counsel, Jessica Ruttler. President Trump appointed William B. Cowen, a former NLRB member under George W. Bush, as acting general counsel of the NLRB. Labor attorneys believe that the changes in the board’s composition will result likely in more employer-friendly policies and decisions. NLRB could revisit and revise several policies, including election procedures, work rules, union recognition, independent contractor classification and unilateral policy changes.
MehaffyWeber Can Help Keep Your Business on Track
Union membership among the workforce in Texas has been historically lower than the national average. However, unionization is growing. In 2023, there were close to 600,000 union members in Texas – up from about 520,000 in 2022. Charges of unfair labor practices are also increasing.
At MehaffyWeber, we understand the legal challenges facing Texas employers who are trying to manage a workforce and successfully operate a business. Our labor and employment attorneys help businesses develop practical solutions to minimize conflict and promote productivity.