Court rules in union's favor on NLRB challenge

The Court of Appeals has sided with a labor union in its challenge to management's unilateral personnel decisions that imposed a mandatory six-day workweek for unionized technicians. This is one of those rare moments when the Second Circuit reverses a decision of the National Labor Relations Board.

The case is International Brotherhood of Electrical Workers v. National Labor Relations Board, issued on August 12. The employees worked for ADT in Syracuse, the company that manufactures security systems for home and the office. After ADA issued the six-day workweek order, the union objected, claiming the collective bargaining agreement disallowed that directive. The CBA does state that management has a general right to determine the amount of work required of its technicians. But it also states that the workweek shall be 40 hours during any one workweek, or 8 eight hours for each workday, noting further that the normal work schedule is 8.5 hours comprising of five consecutive days, Monday through Saturday, between 8:00 am and midnight. It also provides for a four-day workweek comprised of 10.5 hour workdays between 8:00 am and midnight, Monday through Friday. Under the CBA, some employees may have to work early in the morning to meet customer needs, starting at 7:00 a.m. 

When a private equity group purchased ADT in September 2016, it imposed a mandatory six-day workweek for service and installation technicians to meet customer demand. This new rule took effect without any bargaining with the union, which brought its case to the National Labor Relations Board, which in turn upheld the directive and said no bargaining was necessary.

The Court of Appeals (Walker, Chin and Leval) reverses and rules for the union. Under the National Labor Relations Act, management must negotiate work rules with the union unless the CBA permits those changes. In years past, the NLRB used the "clear and unmistakable waiver" standard in determining whether the CBA permitted unilateral changes in work rules. The union's challenge would fail if the new rules were unequivocally and specifically authorized by the CBA, such that the union would have "waived" its challenge. Under new NLRB rules, we have a new test: the "contract coverage" test that says "where the employer acts pursuant to a claim of right under the parties' agreement, the resolution of the refusal to bargain charge rests on an interpretation of the contract," not on a "waiver" analysis. Under this standard, the CBA does not have to specifically mention or address the management decision. Instead, we apply traditional contract interpretation principles. 

Under the new standard, the union wins the appeal, and the NLRB got it wrong in this case. The Court reasons:

we  adopt  the  “contract  coverage”  test  as  the governing  standard  for  determining  whether  a  CBA  permits  an employer’s unilateral change to an established policy.  Applying that test here, we find that (1) the CBAs did not grant ADT the right to unilaterally impose a mandatory six-day workweek on technicians in the Service Department at all, and (2) the CBAs did not grant ADT the right  to  unilaterally  impose  a  mandatory six-day  workweek  on technicians  in  the  Installation  Department  without  complying  with the two-step procedure.  Accordingly, we conclude that ADT violated Sections 8(a)(5) and (1) of the Act by failing to bargain with the Union before implementing the change.