Board Revises Standard on Employers’ Duty to Bargain Before Changing Terms and Conditions of Work

Today, the NLRB issued two full-Board decisions, Wendt Corporation and Tecnocap, LLC, (both decided on August 26, 2023), addressing the statutory duty of employers to bargain with unions before making changes in terms and conditions of work.

In Wendt, the Board overruled Raytheon Network Centric Systems (2017), which had given employers greater latitude to make unilateral changes affecting a unionized workforce during a contractual hiatus or during negotiations for a first contract.  The Board explained that allowing employers to justify discretionary unilateral changes during such time periods as a “past practice” was both inconsistent with the Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736 (1962) and undermined the pro-bargaining policies of the National Labor Relations Act. The Board in Wendt also reaffirmed the longstanding principle that an employer may never rely on an asserted past practice of making unilateral changes before employees were represented by a union (when the employer had no duty to bargain) to justify unilateral changes after the workers select a bargaining representative.

In Tecnocap, the Board overruled a different aspect of Raytheon that had not been addressed in Wendt. The Board held that an employer’s past practice of unilateral changes that was developed under a management-rights clause in a collective-bargaining agreement cannot authorize unilateral changes made after the agreement expires and while bargaining for a new agreement is under way. The Board explained that the Raytheon holding harmed the collective-bargaining process in two ways:  It forced unions to bargain to regain terms of employment lost to post-expiration unilateral changes, and it discouraged unions from agreeing to management-rights clauses in the first place.

“Our decision today returns to a more faithful application of Supreme Court precedent. By protecting employees who have chosen a union representative from being subject to discretionary unilateral changes in their terms and conditions of employment without bargaining, the policy we announce today better promotes the collective-bargaining process that lies at the core of the National Labor Relations Act,” said Chairman Lauren McFerran.

Members Wilcox and Prouty joined Chairman McFerran in issuing the decisions. In Wendt, Member Kaplan concurred in finding that the employer acted unlawfully but but did not agree with the majority’s decision to reach the validity of Raytheon upon remand. In Tecnocap, Member Kaplan dissented.