NLRB waters down management rights in latest union-friendly Board decision, but potential Republican Board majority in early 2025 may turn the tide toward employers

Since 2019, employers have relied heavily on the management rights clauses in collective bargaining agreements to make unilateral workplace changes involving operational decisions. They did so with the protection of the "contract coverage" standard established by the National Labor Relations Board ("Board") in the 2019 case MV Transportation Inc., 368 NLRB No. 66, where the plain language of a collective bargaining agreement - including management rights clauses - determined whether unilateral changes were permitted. However, that decision, issued by a Republican-majority in President-elect Trump's first term, was recently overturned by the Biden Board in Endurance Environmental Solutions, LLC, 373 NLRB No. 141 (2024). Now, employers must show a "clear and unmistakable" waiver to bargain the specific change at issue.

"Clear and unmistakable" can be a difficult burden to meet. It often requires showing the parties explicitly discussed the potential change during bargaining and the union agreed to waive its right to bargain it. In Endurance Environmental Solutions, the employer installed security cameras in its trucks to monitor drivers without first bargaining with the union, believing the change was covered by the management rights clause that provided it could make unilateral changes to equipment. The Board ruled that there was no "clear and unmistakable" waiver by the union, and the unilateral change was a violation of the National Labor Relations Act.

This decision has major implications for employers of unionized workforces because they can no longer rely on broadly worded management rights clauses to make unilateral changes. The decision underscores the importance of collective bargaining and obtaining union consent for certain workplace changes.

Change may be near

Employers may not be burdened with this standard for long. The Biden Board has been led by three Democratic appointed - and union-friendly - members. However, one of those appointees, NLRB Chair Lauren McFerran, recently lost a key procedural vote in the United States Senate to approve her to serve a second term, that would have lasted until 2026. Now, McFerran is likely to lose her seat on the Board on December 16, 2024. That would leave the Board with two Democratic appointed members, one Republican appointee, and two vacancies. President-elect Trump will likely appoint two new employer-friendly members to fill those vacancies immediately upon taking office in January 2025. This shift could lead to a reversal of the Endurance "clear and unmistakable" standard and other recent pro-union decisions, potentially reinstating more employer-friendly standards similar to those seen during the previous Trump administration. While this pendulum shift is typical when the presidency changes parties, the swing will likely come sooner this time with President-elect Trump filling two vacancies immediately upon taking office.

This evolving landscape highlights the need for employers to stay informed and consult with labor law experts to navigate these changes effectively.