NLRB's General Counsel Moves to Narrow Deferral Policy

On January 20, 2011, Lafe Solomon, the Acting General Counsel of the National Labor Relations Board ("GC"), issued a memorandum to all regional offices ("Memorandum") informing them of the GC's desire to have the National Labor Relations Board ("Board") narrow the scope of the Board's deference to contractual grievance settlements and arbitration awards in cases involving alleged violations of Sections 8(a)(1) and (3) of the National Labor Relations Act ("Act"). Although, technically, the Board has not yet adopted the GC's new approach, and will not do so until after the GC argues for it in a case presented to the Board, the GC directed his regional offices to implement the new procedures now and to send any cases that do not comply with the new procedures to the GC's Office of Advice for further consideration. Therefore, as a practical matter and for the foreseeable future, regional offices will not be deferring to grievance settlements or arbitration decisions that do not comply with the approach the GC is advocating.

Sections 8(a)(1) and (3) of the Act make it unlawful for an employer to discriminate against or interfere with employees in the exercise of their rights under the Act. To vindicate these rights, employees and/or unions can file unfair labor practice charges with a regional office of the GC. In the past, if an unfair labor practice charge presented issues that could be resolved under a collective bargaining agreement's grievance and arbitration procedures, and the employer was willing to process the dispute under those procedures, the region would defer the dispute to those procedures. Once the procedures were completed, either by way of a settlement or an arbitration decision, the region would examine the settlement or decision and, so long as the contractual and the unfair labor practice issues were factually parallel and the decision was not repugnant to the Act, the region would defer to the settlement or decision and the unfair labor practice charge would be withdrawn or dismissed.

The GC now wants the regions to exercise a greater degree of scrutiny and defer to a settlement or arbitration decision only under more limited circumstances. Specifically, in Section 8(a)(1) and (3) cases, the GC wants to limit deferral to those situations where the employer can demonstrate that (1) in the case of a grievance settlement, the settlement demonstrates that the parties intended to settle the unfair labor practice charge as well as the contractual issue, and (2) in the case of an arbitration decision, the decision demonstrates that (a) the contract had the statutory right incorporated into it or the parties presented the statutory issue to the arbitrator, and (b) the arbitrator correctly identified and applied the applicable statutory principles in deciding the issue. If the employer fails to meet these burdens, the region will not defer to the settlement or decision and, instead, must send the case the GC's Office of Advice for instructions on how to proceed.

Presumably, the Office of Advice will hold such cases in abeyance until the GC has had an opportunity to argue for the new approach in a case before the Board. If the Board agrees with the GC, then the Office of Advice will likely direct the regions to issue complaints in the pending cases.

The GC also wants the regions to change how they investigate cases that may be covered by these new procedures. Specifically, the regions now must obtain affidavits from the charging party and from all witnesses within the charging party's control before the region makes an initial decision of whether to commence the deferral process.

In sum, the Board has not yet changed its deferral standards. Nonetheless, the GC intends to ask the Board to adopt the new procedures that the GC outlined in his Memorandum and has directed the regions to begin using those procedures. Accordingly, as a practical matter, employers who want to insure that a region defers to a grievance settlement or arbitration decision likely will be required to comply with the conditions set forth in the Memorandum, at least until the Board issues a decision on this issue.

Accordingly, to help insure that a region defers a Section 8(a) (1) or (3) unfair labor practice to a grievance settlement pending a Board decision on this issue, an employer should attempt to insure that the settlement expressly states that it is intended to resolve the unfair labor practice charge. Likewise, to help insure that a region defers to an arbitration decision, the employer should make it clear that the issues presented to the arbitrator include those presented by the unfair labor practice charge, and the employer should encourage the arbitrator to squarely address the statutory issues along with the contractual issues.