The National Labor Relations Board has just agreed to consider forcing employers to defend unfair practice claims twice—once before an arbitrator, and then again before the Board. The case is Babcock v. Wilcox Constr., No. 28-CA-022625 ("Babcock"). Interested parties are invited to submit briefs to the Board on whether it should maintain, modify, or abandon its current approach on deferral to arbitration awards.
Under existing standards, the Board will defer to the arbitrator’s award if (1) the Board finds that arbitral proceedings were "fair and regular"; (2) the arbitrator’s decision would otherwise be binding on the parties; (3) the arbitrator’s ruling on collective bargaining agreement ("CBA") issues included consideration of the factual issues underlying any parallel, pending unfair labor practice ("ULP") charges over the same dispute; and (4) the arbitrator’s outcome is not "repugnant" to the purposes and policies of the National Labor Relations Act ("NLRA" or "Act"). The party seeking to avoid such a deferral result (typically the union), bears the burden of convincing the Board not to defer.
But recently, the NLRB general counsel has urged a new framework. The professed goal is to afford greater protection to employees’ rights under the Act. If the Board in Babcock adopts the urged framework, the burden will shift to the party seeking deferral (typically the employer), and the Board will not defer unless it concludes that the CBA in arbitration actually incorporates the statutory rights at issue in the ULP charge, or that the arbitrator actually considered and decided whether those statutory rights had been violated. In addition, the party seeking deferral must convince the Board not only that the arbitrator’s decision is not clearly repugnant to the Act, but also that the arbitrator correctly articulated and applied the relevant NLRA principles when resolving the parties’ CBA dispute.
The negative consequences for employers of the proposed new framework plainly are huge. In addition to making it much harder to get the Board to defer to favorable arbitration awards, the new framework would imperil the finality of all arbitration awards that implicate NLRA issues. Unions also would get a "do-over" at the Board in these cases—resulting in employers having to spend duplicative time and resources, plus run the risk of inconsistent decisions. Board adoption of the new framework could even cause collateral damage in additional areas, such as the Board’s willingness to defer on ULP charges pending arbitral consideration in the first instance (known as a Collyer deferral).
Stay tuned for any developments in Babcock. Briefs to the Board are due by March 25, 2014.