NLRB Changes Arbitration Deferral Standards

In 1984 the NLRB held that it should defer action if the contractual issue under a collective bargaining agreement is “factually parallel” to an unfair labor practice issue, an arbitrator is presented with relevant facts to resolve the issue, and an arbitration award is not “clearly repugnant” to the National Labor Relations Act. Thirty years later, the 2014 Board said this standard “creates excessive risk that the Board will defer when an arbitrator has not adequately considered the statutory issue, or when it is impossible to tell whether he or she has done so.” So now, the Board will defer to an arbitral decision if the party urging deferral shows “(1) the arbitrator was explicitly authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, or was prevented from doing so by the party opposing deferral; and (3) Board law reasonably permits the award.”

According to a dissenting opinion by Board Member Miscimarra, who was a management-side labor lawyer before accepting appointment to the NLRB, the Board’s new approach is inconsistent with Section 10(C) of the NLRA, which precludes reinstatement and back pay for employees discharged for cause. “In other words,” he said, “The Act makes ‘cause’ and ‘statutory issue’ as a matter of law in every discharge and suspension case.” He continued by warning that “if parties do not rewrite their collective bargaining agreements, the majority’s new standards make two track arbitration / Board litigation a near certainty, thereby eliminating the benefits previously afforded by ‘final and binding’ arbitration.”

Matt Austin is a lawyer based in the Columbus, Ohio office of Roetzel & Andress, LPA who limits his practice to representing employers dealing with labor, employment, and OSHA matters. You can call Matt at (614) 723-2010 or email him at maustin@ralaw.com.