NLRB Restores Employers' Right to Freely Discipline Represented Employees Before Reaching a First Contract

Since the enactment of the National Labor Relations Act in 1935, employers maintained their right to discipline newly-represented employees while bargaining for a first contract without having to provide the union notice and an opportunity to bargain over that discipline, provided the discipline was consistent existing policies and past practices.

That long-standing rule changed suddenly in 2016 when a two-member majority of the National Labor Relations Board instituted a new bargaining obligation in Total Security. Prior to issuing that decision, such an obligation had never before been recognized by Congress, the U.S. Supreme Court, or prior Boards.

The Board Overrules Total Security

Prior to Total Security, the U.S. Supreme Court and the Board determined that once an employer incurred a bargaining obligation that employer must preserve the "dynamic status quo"—i.e., refrain from making discretionary changes to wages, hours and working conditions—unless the employer provides the union notice and an opportunity to bargain first.

In Total Security, the Board extended that obligation to discretionary acts involved in issuing serious discipline, even if that discipline was consistent with established policy and practice.

However, the Board, in 800 River Road Operating Company, LLC d/b/a Care One at New Milford, overruled Total Security, declaring the rationale for the decision was "contorted," "bereft of statutory support," and "shredded longstanding principles governing the duty to bargain." The Board expressed particular concern that the Total Security Board "misconstrue[d] the general unilateral-change doctrine announced [by the U.S. Supreme Court in NLRB v. Katz]."

[W]e find that the correct analysis . . . must focus on whether an employer's individual disciplinary action is similar in kind and degree to what the employer did in the past within the structure of established policy or practice. The fact that [policies or practices] reserve to [the employer] a degree of discretion or that every conceivable disciplinary event is not specified does not alone vitiate the system as a past practice and policy. As such, in order to maintain the status quo, an employer must continue to make decisions materially consistent with its established policy or practice, including its use of discretion, after the certification or recognition of a union. To do otherwise would constitute a change from its preexisting policy or practice, prohibited by [settled law].

Accordingly, the Board found Total Security was inconsistent with the purpose of the NLRA, and rescinded any pre-disciplinary bargaining obligation.

Key Takeaways

• The Board's decision in 800 River Road Operating Company applies retroactively and is now the legal standard for all pending cases.
• 800 River Road Operating Company makes it harder for unions to prevail against employers who discipline represented employees during bargaining for a first contract.
• So long as Employers can show that their disciplinary decisions are "similar in kind and degree" to what the employer has done in the past, employers do not violate the NLRA (or face sanctions including reinstatement and back pay) for not providing a union with notice and an opportunity to bargain employee discipline during the "status quo" period before a first contract.