Late last year, the National Labor Relations Board (NLRB) handed down what is likely to be its last major decision before President Trump takes office and nominates two new members who will change the majority of the five board members from Democrat to Republican.
Specifically, the decision removes a standard approved by the board during Trump’s first term that had strengthened management rights clauses in collective bargaining agreements, allowing management to take unilateral action in many cases instead of being required to notify and possibly secure agreement from their unions.
Created in 1935, the NLRB is governed by a five-person board and a general counsel, all of whom are appointed by the president subject to approval by the Senate. Board members are appointed to staggered five-year terms and the general counsel is appointed for a four-year term.
After Trump’s election victory last November, it was generally expected that the Democrat-dominated Senate would approve Lauren McFerran’s renomination as chairman of the NLRB before the new Republican majority Senate could take control. Her term had expired last year but she was allowed to continue serving until asked to leave by the President or approved to serve a new term by the Senate.
However, maverick Senators Joe Manchin (I-W.VA) and Kyrsten Sinema (I-AZ)—who previously had served as Democrats—refused to go along with their former colleagues, putting the kibosh on giving McFerran another five-year term. This now paves the way for Trump to nominate a Republican chair, who is likely to be confirmed by the GOP-dominated Senate.
If McFerran had been confirmed, the earliest Trump could have nominated a board member to create a Republican majority would have been 2026. The current board, including McFerran, has three Democrats and one Republican, with another Republican seat left vacant by President Biden.
Now that McFerran has been left unconfirmed, this will allow President Trump to name two new Republican board members (including the chairman), which if approved by the Senate would then constitute a three-vote majority. So far, no news has leaked from the Trump transition team about who these new board nominees might be.
However, Trump surprised earlier by announcing his intention to nominate a pro-union Secretary of Labor who was handpicked by the Teamsters General President Sean O'Brien. O’Brien had provided material support to Trump during the election and has since expressed a keen interest in maintaining a pro-union NLRB. So far, Trump appears to be committed to making labor leaders as happy as possible to hold the new Republican coalition together, including his recent public stance urging West Coast port terminal operators to bend to the longshoremen’s union demands for limiting port automation to avoid a strike.
For this reason, it is not a sure thing that the new Republican NLRB majority can be expected to revisit and change even the Biden board’s most controversial decisions handed down over the previous four years, including this most recent one dealing with management rights.
Get Everything in Writing
The board’s December 10 decision involved Endurance Environmental Solutions, which had installed cameras throughout its fleet of 400 trucks without making any attempt to reach an agreement with the union that was representing its drivers under an existing collective bargaining agreement. Normally, installation of security cameras would have been a mandatory subject of bargaining, and employers typically must bargain over the installation, point out attorneys Gregory P. Ripple and James P. Looby of the Vedder Price law firm.
In this case, however, the management rights clause in the collective bargaining agreement with the union allowed the company to “implement changes in equipment” and it relied on this management rights language in ultimately deciding unilaterally to install the security cameras in its trucks. However, the union objected anyway, and the board ultimately found that the employer’s action could be considered an unfair labor practice (ULP) under federal labor law.
The new ruling reverses a 2019 board decision that was made when Trump was President in his first term, holding that employers could unilaterally change working conditions if it is “within the compass or scope” of contract language, allowing employers to implement changes.
Because of the new decision, employers will have to wage a substantial uphill battle to show—through existing contract language, bargaining history or past practice—that they and the union representing their employees unequivocally and specifically expressed their mutual intention to permit unilateral employer action with respect to a particular employment term, according to attorneys Thomas Stanek and Zachary Zagger of the law firm of Ogletree Deakins.
In addition, employers should keep in mind that the Endurance Environmental Solutions decision will be applied retroactively to other cases. It also has been suggested that employers will choose to challenge the decision in court.
Disagreeing with the board’s decision was the only current Republican board member, Marvin E. Kaplan, named to the NLRB by Trump in 2017 and who has been a lone dissenting voice in recent years because of President Biden’s refusal to nominate another Republican member. Kaplan argued that the decision by the majority creates a standard that now makes it impossible for management to defend an action unless permission to do so is explicitly detailed in the wording of the collective bargaining agreement.
In the absence of a clear and unmistakable waiver standard for imposing an irrebuttable presumption against unilateral employer action unless explicitly stated, Kaplan believes it will undermine the collective bargaining process and the stability of labor contracts. He stressed that the previous decision better promoted the effectiveness of collective bargaining agreements, aligned with ordinary principles of contract interpretation and respected existing negotiated agreements.
