Saturday, February 20, 2010

Ferris on Notice and Good-Faith Bargaining

Ferris Frank Ferris (National Executive Vice President of the National Treasury Employees Union) has forwarded to us an essay discussing a recent FLRA case on the important issue of whether "specific or adequate notice" is part of the initiating party's basic "good faith" bargaining obligation or whether it is only relevant when the employer seeks to establish a union-waiver defense to a charge of mid-term unilateral implementation.  Here it is.  As always, comments are welcome:

The Federal Labor Relations Authority (FLRA) administers labor laws for over a million organized federal employees.  In late January, it decided a question that even the NLRB has not yet faced squarely, i.e., at what moment is a term bargaining obligation created.  (Dept. of Treasury, IRS, Washington, D.C. and NTEU, 64 FLRA 426 (Jan. 28, 2010) In the FLRA case, the union charged management with a “bad faith bargaining” unfair labor practice.  It alleged management forced it to impasse on ground rules for negotiating a new term agreement (a mandatory subject of bargaining in the federal sector) without giving it specific notice of the management-proposed changes the parties would be bargaining over.  An arbitrator heard the ULP case and agreed with the union.  When management appealed that decision to the FLRA, the Authority had to decide what was the “moment of conception” for a term contract bargaining obligation?   Was the union obligated to bargain before it got specific notice of the proposed term contract changes--whether it was over ground rules or anything else, or could it insist on receiving specific notice before it was obligated to bargain ground rules for negotiating over them?  The FLRA chose the former.
 
The Authority distinguished its (and the NLRB’s) very long line of cases requiring that management provide the union specific notice before the union is obligated to bargain (or waive the right to bargain) over a management-initiated midterm proposal.  It noted that while management has a specific notice obligation in midterm bargaining, ground rules do not implicate the same requirements because they "inherently precede changes in conditions of employment."   It chose to neither explain the significance of that nor to distinguish term contract ground rules from midterm change ground rules which are also a mandatory subject of bargaining.  

More importantly, it failed to identify a statutory basis for distinguishing between the requirements of term versus midterm bargaining, management-initiated versus union-initiated or even ground rules versus all other bargaining.  Oddly, it seems to admit elsewhere in the decision that bargaining over ground rules is under the same statutory good faith bargaining standard as any other form of negotiations, "Further, as the obligation to bargain over ground rules is inseparable from the obligation to bargain in good faith, a party may not insist upon bargaining over ground rules that do not enable the parties to fulfill their mutual obligation."
 
The FLRA also held that specific notice is just a means for assessing the union's response to management-proposed midterm changes.  But, once again, it failed to distinguish that from a similar need to measure a union's response to management-proposed term contract changes.  In either case, management can implement its proposed changes if the union fails to respond timely. Indeed, the ability to penalize a union’s unresponsiveness through unilateral implementation only arises if specific notice has been served.   It is fair to say that the FLRA believes that specific notice has no value for the union.  It is not a union right, so much as an employer-imposed liability.

The union referred the arbitrator and Authority to an NLRB case in which management sent the union a one-sentence notice that it wished to modify the term contract.  The union ignored the notice, apparently through an oversight, and, after a proper wait, the employer unilaterally implemented changes in employee fringe benefits.   When the union filed charges alleging a unilateral change, the Board rejected the employer's union-waiver defense, and 9th Circuit backed it up saying, "Disclosure of proposed changes will facilitate open discussions by requiring employers to specify proposed changes in conditions of employment before implementing them unilaterally. Such disclosure will give the unions notice of exactly what might be lost if they waive the opportunity to bargain by continual and unwarranted delay.” Stone Boat Yard v. National Labor Relations Board, 715 F2d 441 (9th Cir. 1983) Although a waiver defense was the issue before the Board and court, the case arguably stands for the proposition that the union is not obligated to do anything, even read management's bargaining request, until served with specific notice.  By reading this case as only about waiver, FLRA confined specific notice to being merely an element of a union waiver defense.  It told the federal parties that their moment of conception is marked merely by something as simple as the one-sentence demand to bargain for some unidentified change.   The question is whether FLRA put the cart before the horse.
 
The Authority further justified its decision by pointing to a 1987 FLRA decision involving a union demand to reopen term negotiations once its membership had rejected ratification of the original term contract.  The employer refused to return to the bargaining table until the union justified in writing why it had the right to reopen talks and served the employer with specific notice of the issues or changes the union wished to renegotiate.  The FLRA found the employer’s demands violated law.  Putting aside whether that was correctly decided and is even comparable to the current facts, the FLRA did not explain how that 1987 decision or the new one promotes the goals of the statute.

The federal sector statute established collective bargaining, in part, to contribute to the effective conduct of public business. (5 USC 7101(a))  With this decision, the Authority seems to be saying that neither party needs to know what term contract changes the other wishes to negotiate over in order to finalize ground rule issues such as, 1- how many people will be on each team, 2- whether observers will be allowed, 3- how often the teams will meet, 4- where they will meet, or 5- even when they will start bargaining.  Ironically, it has left the federal parties in a position where now either can demand to break ground rules bargaining into two stages.  The first agreement wound deal with when the proposed changes must be identified, and once both sides know the scope of the bargaining they would return to the ground rules table to address the logistical questions by fitting them to the facts of the bargaining ahead.  The Authority did not explain how pushing parties in this direction “furthers the bargaining process,” which is a standard it claims to use to evaluate the good faith intent behind a ground rules proposal.
 
As noted, this issue and these facts have arisen rarely.  Generally, the parties work something out permissively or just go along with the other party’s lead, whether it be to submit formal proposals, submit just a description of the desired changes or simply state that it wants to bargain something.  There is nothing illegal about one party agreeing to negotiate term contract ground rules before it knows what changes the other party will propose, e.g., will they be many or few, economic or non-economic, simple or complex, applicable to everyone in the unit or isolated to one occupation, impact just the field offices, headquarters or both, etc.  However, if one party refuses to go along, can it insist on specific notice before incurring any obligation to bargain.
 
Should this decision be put before a federal court of appeals, it will set the stage to determine just what does mark the moment of conception of a term contract bargaining obligation. Precisely when does the clock start running on the party receiving a demand to act or suffer penalties?
 
Stay tuned for whatever lies next.

 rb

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