Board Restores Longstanding Arbitral Deferral Standards
The Office of Public Affairs reported on December 23, 2019 that the NLRB released a decision in United Parcel Service, Inc., 369 NLRB 1 (2019), which would overrule the Babcock standard with the former Spielberg/Olin Standard of arbitral deferral.
If you are learning about or working with unions, this is big news. What it boils down to is an unfair labor practice case in which the NLRB changed its interpretation of the arbitral standard in the midst of determining the case, returning to a former standard that was in place for 60 years.
December 23, 2019
Washington DC – In a decision released today in United Parcel Service, Inc., 369 NLRB 1 (2019), the National Labor Relations Board returned to its traditional standard for post-arbitral deferral. The post-arbitral deferral standard is used by the Board to decide whether to defer to an arbitrator’s prior resolution of a grievance concerning an employee’s discipline or discharge that has been alleged to violate the National Labor Relations Act.
Under the restored standard, the Board will defer to the arbitrator’s decision where:
- the arbitral proceedings appear to have been fair and regular,
- all parties have agreed to be bound,
- the arbitrator considered the unfair labor practice issue, and
- the arbitrator’s decision is not clearly repugnant to the Act.
Today’s decision overrules Babcock & Wilcox Construction Co., Inc., 361 NLRB (2014), and represents a return to the post-arbitral deferral standards set forth in Spielberg Mfg. Co., 112 NLRB 1080 (1955), and Olin Corp., 268 NLRB 573 (1984) aka the Spielberg/Olin Standard.
The decision restores policies for pre-arbitral deferral established in United Technologies Corp., 268 NLRB 557 (1984), and for deferral to pre-arbitral settlement agreements set forth in Alpha Beta Co., 273 NLRB 1546 (1985).
Under the restored traditional standard, the Board will continue to safeguard the exercise of Section 7 rights—particularly by ensuring that arbitral awards are not clearly repugnant to the Act—while better promoting the strong federal policy in favor of arbitration as the parties’ agreed-upon mechanism for resolving employment disputes.
Chairman John F. Ring and Members Marvin E. Kaplan and William J. Emanuel participated in the case.
The decision can be found here (this is a PDF download): https://apps.nlrb.gov/link/document.aspx/09031d4582ed448d
From page 1, under the Decision and Order:
After careful consideration, we find, for the reasons set forth below, that the 3-member majority holding in Babcock upset the proper balance of interests struck by the longstanding precedent it overruled. It drastically restricted the prior longstanding deferral policy established in Olin Corp., 268 NLRB 573 (1984), and the even more venerable substantive review standard for postarbitral deferral set forth in Spielberg Mfg. Co., 112 NLRB 1080 (1955), as well as complementary policies for prearbitral deferral established in United Technologies Corp., 268 NLRB 557 (1984), and for deferral to prearbitral settlement agreements in Alpha Beta Co., 273 NLRB 1546 (1985).
By doing so, Babcock greatly diminished the prospect of Board deferral to collectively bargained grievance arbitration procedures for the resolution of disputes over discharge and discipline. This radical contraction of deferral policy was not persuasively shown to be necessary to protect either employees’ Section 7 rights or the Board’s jurisdiction to resolve unfair labor practice allegations. Further, by disfavoring the peaceful resolution of employment disputes about discharge and discipline issues through collectively bargained grievance arbitration proceedings, Babcock disrupted the labor relations stability that the Board is charged by Congress to encourage.
Accordingly, we have decided to overrule Babcock and to reinstate both the Spielberg/Olin postarbitral deferral standard and related prearbitral deferral standards that existed prior to Babcock. In accord with the Board’s usual practice, we shall apply these standards retroactively “‘to all pending cases in whatever stage.’” Applying the Spielberg/Olin standard to the facts of this case, we reverse the judge and dismiss the complaint, deferring to the unanimous decision of a joint grievance panel upholding the October 28, 2014 discharge of Charging Party Robert C. Atkinson, Jr.
Established in 1935, the National Labor Relations Board is an independent federal agency that protects employees, employers, and unions from unfair labor practices and protects the right of private-sector employees to join together, with or without a union, to improve wages, benefits and working conditions. The NLRB conducts hundreds of workplace elections and investigates thousands of unfair labor practice charges each year.
Spielberg Mfg. Co., 112 NLRB 1080 (1955)
Olin Corp., 268 NLRB 573 (1984)
United Technologies Corp., 268 NLRB 557 (1984)
Alpha Beta Co., 273 NLRB 1546 (1985)
NLRB, National Labor Relations Board
Chairman John F. Ring,
Member Marvin E. Kaplan
Member William J. Emanuel