NLRB General Counsel Policy Change Would Limit Arbitration Deferral

The National Labor Relations Board’s Office of the General Counsel has once again directed changes to the Board’s arbitration deferral policy. In a memorandum (doc) issued on January 20, 2012, Acting General Counsel (GC) Lafe Solomon seeks to prevent the routine deferral of Section 8(a)(1) and 8(a)(3) cases to arbitration if resolution of these unfair labor practice (ULP) charges by arbitration cannot be achieved within one year. The GC would apply this change in policy to cases that have already been deferred to arbitration – but have been pending for more than one year – as well as new cases in which there are indications that resolution via arbitration would likely take considerable time. The new policy would apply only in situations in which grievance-arbitration procedures are already explicitly laid out in a collective bargaining agreement. The new deferral policy would also apply – albeit under very limited circumstances – to cases involving allegations of contractual violations under Section 8(a)(5).

Under the long-standing arbitration deferral policy, as established by the decision Collyer Insulated Wire, the Board defers making a final determination on certain ULP charges when a grievance involving the same issue(s) can be processed under the grievance/arbitration provisions of the parties’ collective bargaining agreement. The purpose of doing so, according to the Board, is to encourage collectively-bargained dispute resolution. In January of last year, the GC first sought to amend Collyer deferral by instructing NLRB regional offices not to “defer to an arbitral resolution unless it is shown that the statutory rights have adequately been considered by the arbitrator.” According to a Board press release, the new directive builds upon these earlier changes.

As stated in the memorandum:

[w]hile deferral serves the policy goal of promoting collective bargaining by holding the parties to their own agreement, the Board’s deferral policy has not given appropriate consideration to the practical effect a serious delay can have on another primary policy goal of the Act: to protect employees’ Section 7 rights. For this reason, we are asking the Board to revise the Collyer deferral policy to ensure that the Board’s statutory duty to prevent and remedy unfair labor practices is not thwarted by cases bogged down by a significant arbitration backlog.

To this end, the memorandum sets forth new case handling guidelines for matters subject to arbitration deferral. First, in the initial investigation of the charging party’s claim, the regional director is instructed to assess whether grievance arbitration would be completed in less than a year. If so, the case would be deferred to arbitration, although the regional director would be obligated to regularly monitor the case to ensure it is proceeding as predicted. If the matter has not been arbitrated or otherwise resolved within a year, the regional director would be required to consider whether the deferral should continue or whether the case should instead be submitted to the Division of Advice.

If the regional director determines that deferral would take more than a year, the region is instructed to complete a full investigation of the charge to see whether it has merit. If found to be meritorious, the charge would be submitted to the Division of Advice, unless there was a good reason to proceed with deferral despite the expected delay. In this event – if both parties preferred arbitration, for example – the regional director would need to contact the Division of Advice before proceeding with deferral.

Section 8(a)(5) cases are often referred to arbitration as a matter of course. The GC’s memorandum acknowledges such cases “usually turn on a matter of contract interpretation often better left to an arbitrator’s skill and expertise.” The new guidelines, however, permit regional directors to submit the matters to the Division of Advice if after a full investigation they determine that deferral would “very likely” result in a delay of more than a year and that such delay “would frustrate the Board’s remedial authority.”

As a result of this significant policy change, employers can expect fewer cases to be deferred to the usual process of grievance arbitration and will likely process more cases through the Board proceedings.