NLRB General Counsel Issues Memorandum Seeking Limitation Of Arbitration Deferral Standards

NLRB General Counsel Issues Memorandum Seeking Limitation Of Arbitration Deferral Standards

The General Counsel’s (GC) office of the National Labor Relations Board (NLRB) has issued a guideline memorandum advocating more limited deferral to arbitration awards and grievance settlements in Section 8(a)(1) and (3) cases under the National Labor Relations Act (NLRA). The GC’s memo claims that the current deferral process does not sufficiently safeguard employees’ Section 7 rights under the NLRA. Additionally, the GC claims that in contrast to Supreme Court cases dealing with non-labor employment rights which require a showing that the arbitrator was explicitly authorized to decide the underlying statutory issue and applied the appropriate statutory standard before giving effect to the award, the Board’s standards for accepting an arbitrator’s decision as a final resolution of an NLRA dispute are “overly deferential.” In Olin Corp., 268 NLRB 573 (1984), the Board ruled that an arbitration award is to be considered a final resolution of the matter so long as the contract and statutory issues were “factually parallel” and the arbitrator was “presented generally with the facts relevant to resolving the unfair labor practice.”

The new approach urged by the acting GC is as follows:

Specifically, in Section 8(a)(1) and 8(a)(3) statutory rights cases, the Board should no longer defer to an arbitral resolution unless it is shown that the statutory rights have adequately been considered by the arbitrator. This includes not only cases involving Section 8(a)(1) and 8(a)(3) discipline and discharge, but also all other cases involving Section 8(a)(1) conduct that is subject to challenge under a contractual grievance provision.

The memo further urges the Board to impose the burden of proof for deferral upon the party seeking deferral:

Thus, the party seeking deferral must demonstrate that: (1) the contract had the statutory right incorporated in it or the parties presented the statutory issue to the arbitrator; and (2) the arbitrator correctly enunciated the applicable statutory principles and applied them in deciding the issue. If the party seeking deferral makes that showing, the Board should, as now, defer unless the award is clearly repugnant to the Act.

Finally, because the GC claims employees’ Section 8(a)(1) and 8(a)(3) rights are not sufficiently protected under this scheme, the memo acknowledges that changes in Regional Office investigation procedures are necessary in light of these developments:

To prevent any such difficulties in future cases raising allegations of Section 8(a)(1) and 8(a)(3) that will be deferred under Collyer [Insulated Wire, 192 NLRB 837 (1971) (establishing that certain charges must be deferred to an existing contractual grievance procedure)], particularly as a heightened standard would likely make at least some additional arbitral awards inappropriate for deferral, Regions should take affidavits from the Charging Party, and from all witnesses within the control of the Charging Party, before they make their “arguable merit” determination in considering Collyer deferral.

Only then, if the Region determines there is arguable merit to the charge and the other Collyer requirements are met, should the Region defer the charge. If the Region concludes the charge is without merit, of course, it should dismiss the charge, absent withdrawal.

In all pending and future cases where the Region has deferred a charge to arbitration under Collyer, when the arbitral award issues, the Region must review the award to determine whether post-arbitral deferral is appropriate. The Region should determine if the party seeking deferral can demonstrate that: (1) the contract had the statutory right incorporated in it or the parties presented the statutory issue to the arbitrator; (2) the arbitrator correctly enunciated the applicable statutory principles and applied them in deciding the issue; and (3) the arbitral award is not clearly repugnant to the Act. Upon making its determination, the Region should submit the case to the Division of Advice, along with the Region’s recommendation as to whether to defer.

As a result, even in cases where the underlying merits are subject to pending or past grievance and arbitration proceedings, the Board will thoroughly conduct its investigation of the merits before concluding whether deferral is appropriate. Following the award, the Board will review the award to ensure the standards have been met. Employers must adjust their approach to negotiating discrimination, grievance and arbitration provisions in collective-bargaining agreements; how they approach and litigate discrimination and interference issues at arbitration; and, their expectations in connection with the processing of 8(a)(1) and (3) unfair labor practice charges filed during the life of a contract.