Union Employers May Make Unilateral Employment Policy Changes When Consistent with Past Practices…
In a 3-2 decision involving Raytheon Network Centric Systems last week, the National Labor Relations Board restored a 1964 precedent allowing an employer to implement employment changes that are consistent with past practice without first bargaining with the union.
The Board’s new Republican majority said a 2016 decision overturning the 53-year-old precedent had distorted a “long-understood, commonsense understanding of what constitutes a change…and contradicts well-established court and Board precedent.”
In the 2016 case – E.I. du Pont de Nemours – the Board had ruled that actions consistent with an established past practice do constitute a “change,” which require an employer to notify the union and provide an opportunity for bargaining prior to implementation.
In its ruling on December 15, 2017, the Board concluded that Ratheon’s modifications to its employee healthcare benefits in 2013 were a continuation of its past practice involving similar unilateral changes that were made annually from 2000 to 2011, and were not the type of “change” that required bargaining with the union.
Ratheon had operated a facility in Fort Wayne, Indiana starting in 1997. In 1999 following a merger with Hughes Aircraft, Ratheon created a unified, nationwide benefits plan, which was made available to non-union employees. For a time, union workers continued to receive coverage under a separate plan provided by an existing collective bargaining agreement (CBA). In 2001, the bargaining unit joined the Ratheon plan under an agreement that the union employees’ contributions to the plan would not exceed the rates paid by non-union employees.
Plan documents stated that Ratheon “reserve(d) the absolute right to amend the plan and any or all Benefit Programs … from time to time, including but not limited to, the right to reduce or eliminate benefits.” The parties’ CBAs “referred to and incorporated this right.”
From 2000 to 2011, Ratheon sent documentation to all employees describing that year’s available benefit options, including modifications such as premiums, deductibles, and co-pays. During those years, the union did not object to the modifications or attempt to bargain over them.
Consistent with this practice, in 2013 Ratheon implemented modifications to the plan. Although these routine health care program changes had been made for a decade without bargaining according to the discretion the CBA vested in Raytheon, the union objected based on the Obama-era Board’s rejection of the 1964 precedent.
The Board disagreed with the union, recognizing that the long-standing practice of the parties is important to determining what constitutes a “change.”