06/05/2024: Unilateral Change, Mid-Term Modification, and Breach of Contract: What's the Difference?

A case illustrating one of the more mind-numbing areas of Board law.

Lake Union Drydock Company, Inc., 19-RC-339417 (Regional Election Decision)

The Carpenters union filed a petition to sever the machinist craft employees from the historically recognized multi-craft bargaining unit represented by the Metal Trades and Machinists. The Employer and Intervenors opposed the petition, arguing that the criteria for craft severance set forth in Mallinckrodt Chemical Works, 162 NLRB 387 (1966) were not met. According to that case, the Regional Director must weigh six specific factors to determine whether severing a unit into multiple units is appropriate, which it did in the following ways:

1. Craft Distinction:

   • The machinists at Lake Union Drydock perform skilled, non-repetitive work on marine vessels, have separate supervision, and their own work area. The Board has historically found machinists to constitute a distinct craft. This factor weighed in favor of severance.

2. History of Bargaining and Industrial Stability:

   • The machinists have been part of a multi-craft bargaining unit for at least 50 years, contributing to industrial stability. Severing them could disrupt this stability, especially concerning pension contributions and cross-craft cooperation in the workplace. This factor weighed heavily against severance.

3. Separate Identity:

   • Although the machinists have distinct pension and health plans and their own work area, they share many terms and conditions of employment with other crafts and have participated in the existing labor relations system. Their disengagement is due to inaction, not lack of opportunity. This factor weighed slightly against severance.

4. History and Pattern of Collective Bargaining in Marine Repair Industry:

   • The Metal Trades have a long history of representing machinists in the marine repair industry in the Puget Sound region. In contrast, the Carpenters do not represent machinists in this industry. This factor weighed heavily against severance.

5. Integration:

   • The Employer’s production process is highly integrated, requiring all crafts, including machinists, to work together. Severing the machinists could disrupt these interdependent processes. This factor weighed heavily against severance.

6. Qualifications of Petitioner:

   • The Carpenters represent shipwrights and millwrights in construction and industrial settings but do not have experience representing machinists in the marine repair industry. This factor is neutral.

The factors of industrial stability, separate identity, regional bargaining patterns, and integration weigh against severance. The only factor in favor of severance is the distinct nature of the machinist craft, which is insufficient on its own. Thus, the Regional Director dismissed the petition for severance.

New York-Presbyterian Hudson Valley Hospital, JD(NY)-15-24, 02-CA-301255 (ALJ Decision)

The General Counsel alleged that the hospital violated Section 8(a)(5) and (1) of the National Labor Relations Act by unilaterally granting sign-on hiring bonuses to newly hired bargaining unit employees and by unreasonably delaying the furnishing of relevant requested information regarding those bonuses to the union. The ALJ found that the hospital unlawfully delayed the furnishing of information but did not find that the unilateral action of providing sign-on bonuses was unlawful under the theory asserted by the General Counsel.

Failure to Furnish Information

The union requested information regarding sign-on bonuses to understand the scope and remedy potential violations of the CBA. The hospital delayed nearly 20 months in furnishing this information, which was deemed unreasonable and unlawful. The ALJ highlighted the importance of employers providing relevant information timely as part of their duty to bargain in good faith.

Unilateral Change

The question of whether the unilateral change in sign-on bonuses violated the NLRA is a more complicated one that requires understanding a variety of different concepts in Board law. Below is an effort to explain these concepts clearly and explain how they end up being applied in this case:

1. Unilateral Change: A unilateral change occurs when an employer makes a material change to a mandatory subject of bargaining (such as wages) without first notifying the union and providing an opportunity to bargain over the change. Unilateral changes violate Section 8(a)(5)'s duty to bargain in good faith.

2. Mid-Term Modification: A mid-term modification is a change to a provision already contained in an existing collective bargaining agreement (CBA) during the term of that agreement. Mid-term modifications are permissive subjects of bargaining, meaning the union must consent to the change. Absent consent, a mid-term modification violates Section 8(d).

3. Contract Coverage Standard: Under the contract coverage standard from MV Transportation, 368 NLRB No. 66 (2019), if a unilateral change involves a mandatory subject that is covered by the CBA, there is no duty to bargain over the change during the contract term. The Board first looks to whether the plain language of the CBA covers the disputed action. If not, the employer must bargain unless the union clearly and unmistakably waived its right to bargain.

4. Zipper Clause: A zipper clause is a provision stating that the parties have had the opportunity to bargain over all mandatory subjects, and they waive their right to bargain over such matters during the term of the agreement, even if the specific matter was not discussed. Zipper clauses help establish that the CBA is intended to cover the full range of bargaining subjects.

5. Application to this Case: The ALJ found that the sign-on bonuses were covered by the CBA's wage provisions based on the arbitrator's interpretation. However, even if the bonuses were not expressly included, the ALJ noted the CBA's zipper clause would have privileged the unilateral action. The zipper clause stated that the CBA represented the parties' full agreement and waived bargaining over any subjects not contained therein, even if not contemplated or discussed in bargaining. This indicated the parties' intent to have the CBA comprehensively cover all mandatory subjects. Since the zipper clause made the bonuses a topic covered by the CBA as a whole, the Respondent had no statutory duty to bargain before implementing them.

In sum, while the bonus payments likely violated the CBA's wage provisions, they did not constitute an unlawful unilateral change as alleged because the zipper clause established the subject was covered by the agreement. Without a statutory duty to bargain over a covered topic, no 8(a)(5) unilateral change violation occurred. If, as both the ALJ and the arbitrator in a separate proceeding concluded, the sign-on bonuses violated the CBA’s wage provisions, the proper remedy for that is not an unfair labor practice charge, but rather a breach of contract claim.

Significant Cases Applied

• N.L.R.B. v. Acme Industrial, 385 U.S. 432 (1967) - An employer must provide a union with requested information that is relevant and necessary for its representational duties.

• N.L.R.B. v. Truitt Mfg. Co., 351 U.S. 149 (1956) - Employers must provide relevant information necessary for collective bargaining.

• TDY Industries, LLC, 369 NLRB No. 128 (2020) - The totality of the circumstances, including the nature of the information, the time taken to provide it, and reasons for delay, is considered in determining if an information delay is unreasonable.

• United Parcel Service, Inc., 372 NLRB No. 70 (2023) - Unions are entitled to information relevant to a pending grievance to determine whether it should be pursued or dropped.