Whether the new standard will be applied retroactively remains an open question.

On December 10, 2024, in Endurance Environmental Solutions, LLC, the National Labor Relations Board (NLRB) reverted to its previous standard for evaluating whether a union has waived its right to bargain over changes to terms and conditions of employment that an employer wishes to make during the term of a labor agreement. The Biden Board rejected the “contract coverage standard” embraced by the Trump Board and reinstated a “clear and unmistakable waiver standard.” The immediate effect will be to make it more difficult for unionized employers to make unilateral changes. Whether the new standard will be applied retroactively remains an open question.

The MV Transportation Standard

The basic question that the Board addressed in Endurance Environmental Solutions concerns an employer’s obligation to bargain over a proposed change to a term or condition of employment. Before 2019, the Board applied a clear and unmistakable waiver standard, which required an employer to show that a union had explicitly waived the right to bargain over a particular issue. By contrast, in MV Transportation, the Board took a different approach and embraced what is known as a contract coverage standard. Under this standard, the Board would consider whether the parties’ agreement implicitly allowed for the change that the employer was proposing to make. That is, if the parties had already bargained over an issue during contract negotiations, the Board would allow an employer to make changes without bargaining over them again.

Under MV Transportation, the Board would first “determine whether the parties’ collective-bargaining agreement covers the disputed unilateral change … giv[ing] effect to the plain meaning of the relevant contractual language [and] applying ordinary principles of contract interpretation.” If the Board found that the challenged “act falls within the compass or scope of contract language that grants the employer the right to act unilaterally,” then the employer could so act. If, on the other hand, the agreement did not cover the proposed action, then the employer would generally have to bargain over it. The MV Transportation Board reasoned that the clear and unmistakable waiver standard undermined contractual stability and posed a risk of conflicting decisions by the NLRB and the courts.

The Board’s Reasoning for Overturning MV Transportation

In Endurance Environmental Solutions, the Board reasoned that the decision in MV Transportation was premised on “erroneous assumptions.” The Board argued that, far from interfering with the right to contract, the clear and unmistakable waiver standard honored the parties’ intentions by requiring them to explicitly identify those issues that would no longer be  subject to mandatory bargaining. In addition, the Board majority argued that the clear and unmistakable waiver rule provides a clear and uniform standard that reduces the risk of uncertain outcomes.

The Board attacked MV Transportation on a number of grounds. It took issue with that decision’s assertion that the clear and unmistakable waiver standard favors unions over management, that it is “in practice [] all but impossible to meet,” that it undermines the authority of arbitrators and that it is inconsistent with the rulings of circuit courts of appeals, several of which have explicitly embraced a contract coverage standard. The Board noted that while the clear and unmistakable waiver standard sets a high bar, it is consistent with how the Board and courts have treated other purported waivers of statutory rights.

In support of its revival of the clear and unmistakable waiver standard, the Board argued that the standard provides “stability to collective-bargaining relationships by providing consistency and respite from change to both parties” (emphasis in original). Additionally, the Board argued that the contract coverage standard impedes bargaining by encouraging employers to “insist on the broadest language possible.” Finally, the NLRB reasoned that the contract coverage standard destabilizes relations between the employer and the union, as well as between the union and its member-employees. According to the Board, any changes an employer may make without bargaining cause employees to lose morale and become less likely to organize.

Application in Endurance Environmental Solutions

In Endurance Environmental Solutions, the employer, a transporter of trash to landfills, determined that it was in its best interest to install cameras monitoring driver behavior in response to unsafe driving and collisions. The management rights language in the employer’s collective bargaining agreement with the union included broad language allowing the employer to “implement changes in equipment.”

Despite the management rights provision, the union filed an unfair labor practice charge against the employer for allegedly violating of Sections 8(a)(1) and 8(a)(5) of the NLRA by refusing to bargain. The administrative law judge (ALJ) dismissed this portion of the union’s charge under MV Transportation’s contract coverage standard. The ALJ found that the union’s waiver of the right to bargain over “changes in equipment” in the management rights provision of the collective bargaining agreement covered the employer’s decision to install the safety cameras. Accordingly, the judge also found that the union had waived the right to bargain over the effects of the installation of the safety cameras in the management rights provision.

In applying the revived clear and unmistakable waiver standard, the Board found that the management rights clause stated a general proposition and that recognizing the employer’s broad discretion to change equipment was not a clear and unmistakable waiver of the right to bargain over this particular change. In order for there to be a clear and unmistakable waiver, the Board reasoned, there must be evidence that the specific issue was “fully discussed and consciously explored.” The employer in this case was not able to provide such evidence.

What This Means for Employers

Because the Board has not determined whether the revived clear and unmistakable standard will be applied retroactively or prospectively, employers who have cases pending before the NLRB should begin gathering evidence that they actually relied on the MV Transportation standard in making unilateral changes. The Board has indicated that actual reliance on MV Transportation may be considered in pending cases. Experienced labor counsel can provide advice on what evidence is helpful and otherwise assist employers prepare to make their cases.

Moving forward, employers should consider the implications of any unilateral changes they may wish to make during the term of a collective bargaining agreement under a clear and unmistakable waiver standard. This is to say, employer action will be under significantly increased scrutiny based on contractual language and bargaining history.

Finally, it is important to note that Endurance Environmental Solutions will almost certainly not be the Board’s last word on this subject. This is just one of the outgoing Biden Board’s decisions that is likely to face scrutiny when Republicans regain control under the incoming Trump administration.

For More Information

If you have any questions about this Alert, please contact Eve I. Klein, Haley Ferise, Jesse Stavis, Elizabeth Mincer, any of the attorneys in our Employment, Labor, Benefits and Immigration Practice Group or the attorney in the firm with whom you are regularly in contact.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.