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Employer Must Negotiate Changes To Grievance Arbitration Procedure And Cannot Unilaterally Impose Changes Even If Such Changes Are “Reasonable.”
The case concerns a corporation, Transportation Services of St John, Inc., that provides ferry passenger transportation in the U.S. Virgin Islands, and the union that represents the crewmen on the ferries.
In 1998, the NLRB certified the Seafarers International Union as the exclusive representative for crewmen employed by the corporation purposes of collective bargaining. The corporation and union are parties to a collective bargaining agreement (CBA) covering the terms and conditions of employment of the unit, which has been extended since 2009 and remains in effect by mutual agreement of the parties.
The CBA contains a grievance arbitration provision, which has been unchanged since 1999. In practice, the provision provides that, after the union files a grievance, the parties will meet to discuss the grievance, and the corporation will file a written response. If the union is not satisfied, it can take the grievance to the next step and, ultimately, can demand arbitration. Demanding arbitration involves notice to the corporation and requesting a panel of federal arbitrators from which each side will strike names until a single arbitrator remains who will adjudicate the dispute. In the past 15 years, the parties have arbitrated only one dispute.
In December 2016, pursuant to the grievance arbitration provision of the CBA, the union filed a grievance concerning a two-week suspension of an employee for alleged poor performance and insubordination. Ultimately, the union requested that the matter be submitted to arbitration as outlined in the CBA. Thereafter, a lengthy dispute began concerning the expense of the arbitration, which necessitated travel and accommodation expenses. During this dispute, the corporation rejected the selection of arbitrators from the panel of federal arbitrators but rather proposed either arbitration by video conference or the selection of a local arbitrator. The union rejected both of these proposals.
The union then filed an unfair labor practice charge alleging that the corporation violated Section 8 of the National Labor Relations Act (NLRA) by failing to continue in effect the terms of the CBA. Before an Administrative Law Judge (ALJ), the corporation argued that the modifications that it proposed would be significantly less costly than the express terms of the CBA’s grievance arbitration provision.
The ALJ analyzed NLRB precedent, which distinguishes between conduct that violates the terms of a CBA and conduct that reveals a party has unilaterally modified a contract provision. The ALJ concluded that, as a general proposition, a mere contract violation does not violate Section 8, but a unilateral contract modification regarding a mandatory subject of bargaining without the union’s consent will violate Section 8. The ALJ found that a grievance arbitration provision is a mandatory subject of bargaining and that an employer’s refusal to arbitrate pursuant to a grievance-arbitration provision violates Section 8. The ALJ then applied the facts at issue, including: (1) that the terms of the parties’ CBA were in effect at all relevant times; and (2) the corporation refused to meet its obligations under the CBA and required that the union consent to changing the terms of the CBA. Finally, the ALJ held that it was immaterial how “reasonable” the corporation’s proposed changes may have been since the union was under no obligation to agree to changes during the term of the CBA.
In conclusion, the ALJ held that, by failing and refusing to continue in effect the terms of the parties’ CBA by refusing to arbitrate grievances unless the union consented to modifications, the corporation engaged in an unfair labor practice. The NLRB then affirmed the ALJ’s rulings, findings, and conclusions and adopted the recommended order.
Transp. Services of St. John, Inc. & United, Indus., Serv., Transp., Prof’l & Gov’t Workers of N. Am., of the Seafarers Int’l Union of N. Am., Atl., Gulf, Lakes & Inland Waters Dist./nmu, Afl-Cio (Jan. 30, 2020) 369 NLRB No. 15.
Collective bargaining agreement provisions cannot be changed unilaterally during the term of a contract, whether or not they are reasonable, so it is imperative that employers consider the practical implications of any contract language prior to agreeing to it in a collective bargaining agreement.