The NLRB Requires Employers to Bargain Over Discretionary Discipline Prior to First Contract

January 8, 2013

By: Kristen E. Smith

The National Labor Relations Board (“NLRB”) continues to issue rule-changing decisions that create troubling results for employers.  We recently reported, for example, on the NLRB’s reversal of decades-old precedent when it ruled that a dues checkoff provision survives the expiration of a collective bargaining agreement.  Two days after issuing that decision, the NLRB issued a decision in Alan Ritchey, Inc., holding that an employer must bargain with a union under certain circumstances prior to imposing discretionary discipline on an employee who is represented by a union.

This new rule will apply only in the absence of a binding agreement between the employer and the union to address discipline, such as a grievance-arbitration procedure.  Therefore, as the NLRB explained, this obligation to bargain over employee discipline will typically arise only after a union is newly certified, but before the parties have agreed to a first contract.

In Alan Ritchey, Inc., after the union was certified and while negotiations were being conducted for a first contract, the employer continued to rely on its pre-existing five-step progressive disciplinary system set forth in its employee handbook to discipline several employees for absenteeism, insubordination, threatening behavior, and failure to meet efficiency standards.  Pursuant to the handbook, the employer reserved the right to exercise discretion in the enforcement of policies, and the employer admittedly exercised this discretion in setting the levels of discipline with regard to the employees in this case.  For example, when imposing discipline for failing to meet performance standards, three employees were treated leniently because of extenuating circumstances -- one employee’s husband died, another worked in a low volume area, and another was unable to work consecutive days in the same position.

The Union filed unfair labor practice charges to challenge these disciplinary actions, taking the position that it should have first been notified and given an opportunity to bargain.  The NLRB agreed.  It held that even though the employer’s existing discipline system represents the status quo that can and must be continued during bargaining for a first contract, the employer was not privileged to exercise any discretion with regard to that discipline system without negotiating with the union.  Rather, the employer was required to provide the union with notice and an opportunity to bargain each time it seeks to exercise any discretion with regard to employee discipline.  Recognizing that it had never articulated this requirement before, the NLRB opted to apply the rule only prospectively.

The NLRB set forth a few limiting principles in laying out this rule:

  • First, the employer will only be required to provide the union with notice and an opportunity to bargain prior to implementing the discipline where it seeks to impose a suspension, demotion, or discharge.  For lesser forms of discipline, such as warnings and counselings, there is still a bargaining obligation, but the employer can delay providing the notice and opportunity to bargain until after the implementation of the discipline.
  • Second, where there is an obligation to provide pre-implementation notice and opportunity to bargain, the employer need not bargain to agreement or impasse at this stage.  The employer need only provide sufficient notice, and provide responses to union information requests, if any.  If the parties cannot reach an agreement, the discipline can be imposed, and the bargaining obligation continues after imposition (albeit with the possibility that the discipline may have to be rescinded or altered).
  • Third, no prior notice is required where “exigent circumstances” exist.  The NLRB defines this as a reasonable, good faith belief that “the employee’s continued presence on the job presents a serious, imminent danger to the employer’s business or personnel.”  This includes situations where the employer believes the employee is engaging in unlawful conduct, is posing a significant risk of imposing legal liability on the employer, or threatens safety, health, or security inside or outside the workplace.

In its decision, the NLRB expressed its view that this new bargaining obligation will not “unduly burden” employers.  It is difficult to agree with this assessment.  This new obligation presents a significant impediment to an employer's ability to manage its workforce while bargaining for an initial contract.  Although the employer need not complete bargaining regarding the discipline before imposing the proposed discipline, the obligation to provide meaningful notice and to respond to union information requests prior to imposing the proposed discipline will certainly create significant delays in the disciplinary process.