Making Lawful Unilateral Changes to Union Contracts
Employers usually commit an unfair labor practice when unilaterally changing terms of a collective bargaining agreement. But not always. I’ve unilaterally changed many terms of a CBA without acting unlawfully.
The safest way to do this is when there is an emergency (labor law calls it an “exigent circumstance”).
Exigent circumstances are created by things like a hurricane, mandatory evacuation, the events of 9/11, an ice storm, the termination of a company’s line of credit, or shortages of raw materials.
The current nationwide labor shortage may be another situation that allows employers to unilaterally modify union contracts.
The NLRB seems OK with companies providing unilateral wage increases to combat the current labor shortages across the United States. Unilateral wage increases during Covid-19 were usually lawful.
A 2020 NLRB General Counsel Memorandum (GC 20-04) said “economic exigencies compel prompt action” especially when the events causing the exigency are unforeseen, have a major economic effect, or require immediate action.
The inability to hire workers would seem to satisfy these criteria.
Consider this: a manufacturer’s operations are threatened by its inability to hire. A shortage of workers will result in a curtailment of production or services being offered. Orders miss deadlines. New orders are rejected. Financial health of the company suffers.
During exigent circumstances, employers are relieved of their duty to bargain over the unilateral change. The Board may still want employers to negotiate over the “effects” of that change, though.
If the unilateral change is increased wages, the effects are beneficial to the union and the employee: employees make more money, and the union plausibly receives additional dues revenue. In this situation, there isn’t much to bargain.
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Matt Austin is a nationwide management labor lawyer. Labor laws govern virtually all private-sector employees regardless of union membership. Proactive management of labor relations is critical to maintaining flexibility and increasing profit.
Matt also runs Austin Legal’s HR Legal Compliance Program that, for a small monthly fee, ensures HR decisions are protected by the attorney-client privilege.
Matt’s experience is deeply rooted in helping manage many aspects of his clients’ businesses. To effectively manage labor relations, he must also manage budgets, forecasts, new growth areas, and projected market corrections. High emotional intelligence is also critical to negotiating union contracts and to properly advise HR Legal Compliance members through the nuances of the law, its application to their companies, and how it will be received by employees.
You can reach Matt via email at Matt@MattAustinLaborLaw.com.