News & Events

National Labor Relations Board Guidance Limits Deferral Arbitration

Submitted by Firm:
Cross, Gunter, Witherspoon & Galchus, P.C.
Firm Contacts:
Abtin Mehdizadegan, J. Bruce Cross, Misty Wilson Borkowski
Article Type:
Legal Update

The National Labor Relations Board (NLRB or Board) has issued two guidance memorandums limiting deferral arbitration. The NLRB's Acting General Counsel claims the Board's traditional deferral policy has failed to appropriately consider the practical effect deferral can have on the NLRB's ability to protect employees' Section 7 rights. The memorandums create new standards advocating more limited deferral to arbitration awards and grievance settlements in cases involving alleged violations of Section 8(a)(1) and (3) of the National Labor Relations Act (NLRA or Act).

These cases typically allege that the issuance of disciplining or discharging an employee constitutes unlawful discrimination or interference with employees' Section 7 rights under the NLRA. Consequently, under these standards, the risk increases that employers will be forced to defend employment actions in NLRB investigations as well as through the grievance-arbitration process. In fact, preliminary reviews of charges will now be the norm, including taking of evidence. The Board's guidance also includes Board review of settlement agreements entered into between the employer and union prior to conclusion of the arbitration process. Such settlements may be rejected by the Board in determining whether to continue prosecution of a deferred Section 8(a)(1) or 8(a)(3) case.

The Acting General Counsel also asserts that delays in the arbitration process leave a charging party without an effective relief. Consequently, by the time the NLRB addresses any deficiency in an arbitrator's remedy of an unfair labor practice, circumstances at the job site may have changed so dramatically that it is impossible for the employer to meaningfully comply with the NLRB's order. Therefore, the Acting General Counsel has revised its deferral policy in such a way as to ensure the NLRB's statutory duty to prevent and remedy unfair labor practices is not thwarted by cases bogged down by a significant arbitration backlog. This impacts employers in that grievance step meeting and arbitration delays could result in the revocation of a deferred charge.

As a result of these changes, employers who regularly seek deferral or desire to have deferral as an option when faced with an 8(a)(1) or (3) charge should examine their grievance-arbitration practices. Ensuring compliance with these new standards up-front could save your company time and expense. Additionally, employers who do not currently prioritize grievances based on subject matter may wish to do so in order to ensure that grievances implicating Sections 8(a)(1) and (3) will move expeditiously through the grievance-arbitration process.