NLRB Flips on Deferral

In Union Democracy Review 217, we reported on the National Labor Relations Board (NLRB) decision to review (once more) its “deferral” standard. Over the years the Board has gone back and forth on setting the standard it will use for processing an unfair labor practice (ULP) case where the charging party already has had a “day in court” before an arbitrator. With its latest flip, the NLRB makes it harder for such employees to get Board review of their allegations. AUD is therefore again weighing in, urging the retention of the current standard, which provides stronger protections for union dissidents.

What does “deferral” mean in this context? In practice, what happens is that a union member who has not prevailed in his or her contractual grievance process wants to take his case to the NLRB. By deferring, the NLRB would refuse to process the unfair labor practice allegations on the grounds that the member already had a fair hearing through the contract’s dispute resolution process. AUD’s particular interest in such cases arises out of the fact that this practice places the greatest disadvantage on union dissidents, who are more likely to have experienced inferior representation by their union.

Prior to 2015, for nearly three decades NLRB followed its “Spielberg-Olin” standard in deciding whether or not to defer to an arbitration or a joint employer-union panel decision.

Under Spielberg-Olin, grievants seeking NLRB review of a ULP had the burden of proof in first showing that the CBA process had been unfair. Failing that, under Spielberg-Olin the only other justification for getting the Board to hear the case was to demonstrate that the arbitration or joint board decision was “clearly repugnant to the Act” (the National Labor Relations Act), a very difficult standard to meet.

Spielberg-Olin was discarded in 2015 in Beneli v. Babcock-Wilcox. In that case, the Board placed the burden of proving the lack of a fair arbitration process onto the party urging deferral rather than on the grievant. The Board sided with the view endorsed in AUD’s amicus brief, that shifting the standard would better protect grievants (and therfore dissidents). To address Spielberg-Olin’s propensity to defer too readily, the Board’s new Babcock-Wilcox standard mandated that the arbitrator or joint board must show evidence in its decision that it had considered the ULP and thus the statutory rights of the grievant.

Last fall, the Board decided to revisit Babcock-Wilcox. The case dealt with a joint labor management committee that had reviewed the dismissal of a UPS employee, Rob Atkinson. The joint committee upheld the termination in a decision announced in a single sentence. Atkinson had been involved with Teamsters for a Democratic Union, a dissident group within the IBT. He argued before the NLRB that this internal union activism affected the level of representation provided by the union as it advocated on his behalf in the dismissal case. The NLRB regional office’s administrative law judge (ALJ) found that the Babcock-Wilcox standard was in fact not satisfied by the contractual joint board process in this case, because that review board failed to show it fairly considered Atkinson’s ULP. Accordingly, the ALJ ordered reinstatement with back pay. But UPS appealed to the full Board. Rather than simply ruling on the case at hand by applying the relatively new Babcock-Wilcox standard, the Board decided to question the standard itself, and asked for public comment. AUD’s amicus brief argued that protecting the rights of union dissidents required retention of the Babcock-Wilcox standard, keeping the burden of proof on the party urging deferral.

The AUD amicus brief also argued that even if the Board decided to re-embrace the Spielberg-Olin standard, it should only be applied to traditional arbitration where there is a neutral arbitrator. AUD argued that this standard should not apply to a case decided by an employer-union appointed joint board or grievance committee (such as the one Atkinson sat before in challenging his dismissal) because no such adjudicator, by definition, is a neutral party to the conflict.

In discarding Babcock-Wilcox, NLRB acknowledged that since its inception it had always tried to balance two imperatives when it comes to whether to defer to an arbitration or joint board. First, “…the Board’s exclusive administrative authority and mandate under Section 10(a) of the Act to prevent unfair labor practices” and second, the declaration in Section 1 of the Act that its purpose is to reduce industrial strife by “encouraging practices fundamental to the friendly adjustment of industrial disputes” and “encouraging the practice and procedure of collective bargaining.”

The unanimous 3-0 decision in the UPS case reverted to the Spielberg-Olin standard. The Board, in reversing course, claimed it was giving Section 1, protecting “the practice and procedure of collective bargaining” its proper weight. It asserted that its decision was not merely defending the collective bargaining regime as defined by the Wagner Act, but also the system of grievance arbitration itself, and characterized Babcock-Wilcox as representing a “radical” departure. It faulted Babcock-Wilcox for not placing enough faith in and regard for the ability of the generic arbitrator or joint panel to adjudicate labor disputes fairly and with proper regard for statutory concerns. The Board was not persuaded by AUD’s amicus brief argument that union dissidents were less likely to get a fair hearing under Spielberg-Olin than under Babcock-Wilcox, and ignored AUD’s argument regarding the impartiality of joint boards. Having overturned Babcock-Wilcox, the Board’s December 23, 2019 decision applied Spielberg-Olin to the Atkinson case before it, and reversed the NLRB ALJ ruling. Atkinson has petitioned the federal Third Circuit Court of Appeals for judicial review of this Board decision deferring to the joint labor management board and upholding Atkinson’s dismissal. An AUD amicus brief urged that the Babcock-Wilcox deferral standard be maintained or at the very least a retained Speilberg-Olin should not apply to joint boards.

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