WORK WITH US
Board Reverses Course On Standard For Deferring To Arbitration, Overrules Babcock And Restores Spielberg/Olin, United Technologies And Alpha Beta
In yet another decision reversing an Obama-era decision, the Board overruled the standard for deferring to arbitral decisions in unfair practice cases articulated in Babcock & Wilson Construction Co., Inc. (2014) 361 NLRB 1127 and reinstated prior Board policy and standards for pre- and post-arbitral deferral and for deferral to pre-arbitral settlement. The Board considered these issues in the context of a UPS driver and Teamsters shop steward who filed a grievance following his discharge. The grievance arbitration panel reviewing the discharge denied the grievance, upholding the discharge, and the grievant filed charges with the Board, contending that the discharge violated the NLRA.
The Board began by analyzing the Babcock decision and the significant contraction of deferral practices that that decision required.
Under Babcock, the Board would not defer to a post-arbitral decision in an unfair practice case unless: (1) the arbitrator was specifically authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, and (3) Board law reasonably permitted the award. This represented a significant change from the Board’s prior deferral policy, which is established in Olin Corp. (1984) 268 NLRB 573 and the substantive review standard for post arbitral deferral set forth in Spielberg Mfg. Co. (1955) 112 NLRB 1080. In Spielberg, the Board found deferral appropriate where the arbitral proceedings “appear to have been fair and regular, all parties had agreed to be bound, and the decision of the arbitration panel is not clearly repugnant to the purposes and policies of the Act.” In Olin, the Board held that would defer to an arbitral award “if (1) the contractual issue is factually parallel to the unfair labor practice issue; and (2) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice.” The Babcock decision overruled both Olin and Spielberg.
The Babcock decision also significantly altered the pre-arbitral standard for deferral to grievance arbitration proceedings and to pre-arbitral grievance settlements in unfair labor practice cases. Babcock held that the Board would no longer defer to grievance arbitration proceedings unless the parties in a collective bargaining relationship explicitly authorized the arbitrator to decide the unfair labor practice issue and that it would not defer to settlement agreements unless they comported with the new requirements for post-arbitral deferral. This represented a change from the Board’s pre-arbitral deferral standard articulated in United Technologies Corp. (1984) 268 NLRB 557 and the deferral to pre-arbitral settlement established in Alpha Beta Co. (1985) 273 NLRB 1546. Under United Technologies, the Board held that it would be appropriate to defer litigation of Section 8(a)(1) and (3) unfair labor practice charges to the contractual grievance arbitration procedure. Under Alpha Beta, the Board permitted pre-arbitral grievance settlement with little, if any, showing that the parties intended to settle the unfair labor practice, that the unfair labor practice was addressed in the settlement agreement or that Board law necessarily permitted such settlement. The Babcock decision overruled both United Technologies and Alpha Beta.
The Board then analyzed the Babcock decision, finding that it was premised on two fundamental and mistaken concepts: (1) that there is an “excessive risk” that arbitrators will not adequately consider statutory issues implicated in discharge and discipline cases unless they are expressly authorized to do so and required to make specific findings as to those issues; and (2) that individual statutory rights remain unaffected by grievance arbitration provisions in collective bargaining agreements and are independent of contractual rights, and that the Board retains in full its primary adjudicatory role to protect those rights.
The Board concluded that the Spielberg/Olin post-arbitral standard and the related pre-arbitral standards in United Technologies and Alpha Beta represent a cohesive policy choice that is more commensurate with the role contemplated by Congress for arbitration of statutory claims and for Board deference to the grievance arbitration procedure and its results. As a result, the Board overruled Babcock, reinstated the prior deferral standards, and dismissed the complaint.
United Parcel Service, Inc. and Robert Atkinson Jr. (Dec. 23, 2019) 369 NLRB No. 1.
This case represents a return to the Board’s prior, longstanding arbitral deferral standards and makes it less likely for the Board to second-guess arbitrators in labor disputes. Under the reinstated standard, the Board will defer to an arbitrator’s prior resolution of a grievance concerning an employee’s discipline or discharge that has been alleged to violate the NLRA where (1) the arbitral proceedings appear to have been fair and regular; (2) all parties have agreed to be bound; (3) the arbitrator considered the unfair labor practice issue; and (4) the arbitrator’s decision is not clearly repugnant to the Act.