On December 23, 2019, in United Parcel Service, Inc., 369 NLRB 1 (2019), the National Labor Relations Board (the Board) gave employers one final holiday gift by returning to its traditional standard for post-arbitral deferral. The Board uses this standard to decide whether it should defer to arbitration awards in cases alleging the unlawful discipline or discharge of an employee under the National Labor Relations Act (the Act). Under the re-established traditional standard, the Board defers to the arbitrator’s award if the following four elements are met: (1) the arbitral proceedings appear to have been fair and regular; (2) all parties have agreed to be bound; (3) the arbitrator considered the unfair labor practice issue; and (4) the arbitrator’s decision is not clearly repugnant to the Act.
The Board changed the post-arbitral deferral standard in Babcock & Wilcox Construction Co., 361 NLRB 1127 (2014). Under the 2014 standard, even if the arbitration procedures appeared to have been fair and regular and the parties agreed to be bound by the results of arbitration, the Board would not defer to an arbitral decision unless (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, or was prevented from doing so by the party opposing deferral; and (3) Board law reasonably permitted the award. The burden of proof rested with the party urging deferral. According to the current Board, that change was “a drastic contraction of deferral practices that had existed for decades” and “by disfavoring the peaceful resolution of employment disputes about discharge and discipline issues through collectively bargained grievance arbitration proceedings, [the 2014 standard] disrupted the labor relations stability that the Board is charged by Congress to encourage.”
Now it is more likely that the Board will defer to arbitration awards when dealing with parallel unfair labor practice charges. This should come as a reprieve to employers as they will no longer have to litigate the same claims twice.
Notably, this is the Board’s first major decision after Board member Lauren McFerran’s term ended on December 16, 2019. She was the only Democratic member left and an ardent opponent of the current Board’s employer-friendly and rulemaking stance.