National Labor Relations Board Reverses Another Obama-Era  Labor Board Ruling and Reinstates Historical Deferral DoctrineThe National Labor Relations Board in recent weeks has continued to overturn Board decisions from President Obama’s administration. In United Parcel Service, Inc., the current Republican-controlled Board returned to a long-standing legal standard for “deferring” unfair labor practices to private arbitration.

The Issue

Often when workers are disciplined, whether in a union or nonunion setting, they file “unfair labor practices” with the National Labor Relations Board. These charges usually allege that the company took disciplinary actions to interfere with workers’ rights to engage in protected collective or group activities under the National Labor Relations Act or in retaliation for activities protected by the act. In a union setting, the company and the union usually have a collective bargaining agreement (CBA) that contains arbitration procedures. Historically, companies in this scenario respond to these types of unfair labor practices by asking the Board “to defer” to the arbitration procedure and let the arbitrator decide the disciplinary issue for both the grievance filed under the CBA and the unfair labor practices filed with the Board.

The Historical Standard

Under long-standing Board law, when a company responded to an unfair labor practice charge by urging deferral to arbitration, the Board would do so if the so-called Spielberg standards were met. Spielberg was a 1955 Board decision that governed when an unfair labor practice charge should be deferred (and dismissed) due to an already-decided arbitration decision. Here were the Spielberg factors:

(1) The arbitral proceedings appeared to be “fair and regular,”

(2) The parties had agreed to be bound, and

(3) The arbitration decision was not “repugnant” to the act.

Importantly, subsequent Board decisions placed the burden of proof on the party opposing deferral (usually the worker) to show that deferral was not appropriate.

The Obama Board

With the 2014 Babcock and Wilcox decision, the Democratic-controlled Board dramatically changed the historical standard. The deferral standard became as follows:

(a) The arbitrator had to be explicitly authorized to decide the unfair labor practice,

(b) The arbitrator must have been presented with and have decided the statutory issue, and

(c) Board law reasonably permitted the award.

 Moreover, the burden was placed on the company to show that deferral was appropriate rather than on the worker to show that it was not.

The Return to the Historical Standard

In United Parcel Service, the Board considered the Obama-era shift and decided to return to the historical standard. The Board noted that the Obama Board considered no empirical or statistical evidence in deciding that the historical standard created a risk of erroneous decisions in unfair labor practice cases. The Obama-era Board’s distrust of arbitration also was “untenable” considering the act’s preference for resolution of disputes through an agreed-upon bargained procedure and the overwhelming judicial precedent favoring arbitration. Finally, the change from historical precedent encouraged duplicative litigation of single employment decisions. The new Board thus reinstated the historical standard and clarified that deferral will be appropriate when the issue under the CBA is factually parallel to the unfair labor practice and the arbitrator is presented generally with the facts related to the statutory issue.

Under the new Board, companies once again will have greater chances for deferral and lesser chances of being required to litigate single employment decisions more than once. More shifts in labor law under the new Board are likely to follow.