Labor, Employment, Benefits & Immigration

Employers with a unionized workforce are familiar with the general prohibition under the National Labor Relations Act (NLRA) against unilaterally changing terms and conditions of employment that are specifically covered by an existing collective bargaining agreement (CBA). For terms and conditions not specifically covered by an existing CBA, employers also know that they may not make changes without bargaining to an agreement or reaching an impasse over those issues. However, what may an employer do when faced with an unforeseen and unprecedented external force such as the coronavirus pandemic, which results in a government-imposed shutdown of operations or a significant curtailment of operations?

The place for employers to start is with a review of the applicable CBA. The CBA may have provisions which allow an employer to unilaterally take the action sought. For example, the CBA may have a force majeure clause relieving the employer from strict compliance with the terms of the CBA due to catastrophic circumstances such as war, natural disasters, epidemics or pandemic illnesses. In fact, it has been recently reported that the NBA is considering using just such a clause to withhold players’ salaries for games canceled in connection with the coronavirus pandemic. See New York Post, March 21, 2020, posted at 10:42 a.m. Furthermore, virtually all CBAs have a management’s rights clause that sets out the terms and conditions of employment about which the employer has reserved to itself the right to take unilateral action. That clause may provide the right sought.

Apart from the terms of the CBA, current case law under the NLRA may allow unilateral action under the circumstances currently facing employers as a result of the coronavirus pandemic and the mandatory business closures being ordered (or strongly suggested) by various state governors regardless of the terms of the CBA. The National Labor Relations Board (NLRB) has held that, with regard to a decision to lay off employees, an employer faced with “economic exigencies [that] compel prompt action,” may implement its decision without bargaining with the union. See, Seaport Printing & Ad Specialties, Inc., 351 NLRB 1269 (2007). In Seaport, the NLRB held that the employer acted properly in laying off all of its workforce in Lake Charles, Louisiana, as a result of the mandatory evacuation of the city due to the arrival of Hurricane Rita without first bargaining with the union. The NLRB may see the need for immediate action in connection with an impending hurricane as similar to the need for immediate action in connection with a global pandemic. It is important to understand, however, that this “economic exigencies” exception is very narrow and should only be used after a careful analysis of the facts and current circumstances is conducted.

Of course, speaking with the union ahead of taking any unilateral action may help maintain a good working relationship and may result in an agreement that meets the employer’s needs.

This alert was written by Marc Sloane, a lawyer in the Labor, Employment, Benefits & Immigration practice group at Miles & Stockbridge.

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