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Employer bans radios in plant despite union’s objections

03.01.2007

The National Labor Relations Board (NLRB) recently found that a management rights clause empowered an employer to unilaterally prohibit the use of radios in its plant. Additionally, the union’s failure to invoke the contractually established procedure for challenging the rule constituted a waiver of its right to bargain over the issue. Although it took six years for the Board to reach that conclusion, this case illustrates the value of drafting and enforcing strong, clear contract language.

Facts

The Budd Company manufactures automobile parts at its Shelbyville manufacturing plant. In 1998, the United Automobile, Aerospace and Agricultural Implement Workers of America, Local 2383, became the certified bargaining representatives for a unit of Budd’s technical and production associates. The company and the union entered into a collective bargaining agreement (CBA) effective from November 16, 1998, to November 9, 2001. The parties appended a list of “Company Rules and Policies” to the CBA, but the list wasn’t incorporated into the agreement. Neither the CBA nor the appended list addressed the use of radios in the plant.

In November 2000, two employees complained to management about safety concerns over the use of radios in the plant. On November 17, 2000, the HR manager met with the union president and two other union officials and announced that effective November 22, radios, CD players, and similar devices would be banned form the plant in the interest of safety. The union representatives attempted to persuade Budd to bargain over the decision, asserting it had no contractual authority to unilaterally implement the rule, but the company declared the subject “non-negotiable.”

The union filed a grievance when the rule took effect on November 22, asserting the company lacked the contractual authority to unilaterally implement the radio ban. Budd denied the grievance on November 29, and on December 4, the union filed an unfair labor practice charge with the NLRB.

NLRB’s decision

Section 8(a)(5) of the National Labor Relations Act provides that it is an unfair labor practice for an employer to fail or refuse to bargain collectively with its employees’ representative. The union alleged that Budd violated Section 8(a)(5) by refusing its request for bargaining and unilaterally implementing the radio ban instead. The Board disagreed. Budd argued that it had the right to implement the rule under the CBA. It also argued that it had maintained an unwritten rule prohibiting radios before November 22, although it admitted that the rule wasn’t consistently enforced. Nevertheless, it claimed that the new rule was merely a modification of the existing rule. The union countered that Budd had a practice of allowing radios before November 22. Finally, Budd argued that the CBA included a “clear and unmistakable waiver” by the union of the right to bargain over the decision. The Board analyzed the parties’ CBA and ultimately agreed with Budd.

Article IX of the parties CBA titled Discipline and Discharge, provided in pertinent part:

Section (2) The company shall continue to have and exercise the right to make and enforce rules…to provide for the safety of associates and equipment…

Section (3) Should the Union wish to contest a rule as being arbitrary, unreasonable or in conflict with the Agreement, the Union must, within a ten calendar day period after being notified in writing of the new or modified rule, protest the specific rule, indicate why it believes the rule is arbitrary, unreasonable or the specific provision of the agreement the proposed rule is allegedly in conflict with, and request an immediate conference and discussion with the Company. If the parties are unable to agree on the rule, and the Union wishes to arbitrate the disagreement it must within ten calendar days of the meeting submit its protest to expedited arbitration.

The CBA also contained a broad management rights clause and a zipper clause. Article III, Section (1), of the management rights clause provided:

The terms of this Agreement establish the relationship between the company and its associates. Except as specifically abridged, delegated, granted or modified by the Agreement, all of the rights, powers, prerogatives, and authority the Company had prior to the execution of this Agreement are retained by the Company and remain the sole and exclusive rights of management. Additionally, the Company will meet and confer and make its best efforts to reach a consensus with the Union prior to initiating or changing Company policies relating to terms and conditions of employment

The zipper, or “entire agreement,” clause contained in Article XXXVI of the CBA provided:

The parties acknowledge that, during the negotiations which resulted in this Agreement, each had the unlimited right and opportunity to make demands and proposals with respect to any subject matter not removed by law from the area of collective bargaining, and that ll understandings and agreements arrived at by the parties after the exercise of that right and opportunity are fully set forth in writing in this Agreement. Therefore, for the life of this Agreement, each party voluntarily and unqualifiedly waives the right, and each agrees that the other shall not be obligated to bargain collectively with respect to any subject or matter referred to or covered in this Agreement, or with respect to any subject or matter not specifically referred to or covered in this Agreement, even though such subject or matter may not have been within the knowledge or contemplation of either or both of the parties at the time they negotiated or signed this Agreement.

The union conceded that the use of radios posed a potential safety hazard in the plant and that Budd had the right under CBA to promulgate a rule pertaining to radios, but it argued that the company was first required to bargain over the rule’s details. The NLRB found that Article IX of the CBA gave Budd a clear “right to make and enforce rules and regulations…to provide for the safety of associates and equipment.” The Board also found that Article IX clearly applied to both “new [and] modified rule[s].” Thus, Article IX gave Budd the right to implement the radio ban, regardless of whether it was characterized as a new rule or a modification of an existing practice.

The NLRB also ruled for Budd on the waiver issue. Article IX, Section (3), prescribed clear, mandatory procedures for the union to follow if it wished to challenge a rule like the radio ban. The Board found that by agreeing to the exclusive procedures for challenging a proposed rule prescribed in Article IX, Section (3), the union clearly and unmistakably waived its right to challenge the rule by any other means. When it failed to demand arbitration within the time limit set out in Article IX, Section (3), choosing instead to file a charge with the NLRB, it forfeited its right to challenge Budd’s decision to implement the radio ban.

Because the union failed to challenge the radio ban according to the contractual procedures, it was barred from seeking additional recourse from the NLRB. For those reasons, the Board dismissed the complaint against Budd. The Budd Company, 348 NLRB No. 85 (Dec. 6, 2006).

Bottom line

This case is instructive for any employer that has or is contemplating a CBA with a union. Budd’s CBA contained a strong management rights clause that generally preserved all its pre-CBA powers except as otherwise expressly provided. Article IX specifically stated that the employer retained the authority to unilaterally make and enforce work rules. It also limited the union’s ability to challenge any such rule by requiring it to follow a specific grievance process. Finally the zipper clause clearly and unmistakably provided that the CBA constituted the parties’ entire agreement and that neither party could be required to bargain over any matter during the life of the agreement. Combined, those provisions put Budd in a strong position to maintain control of its workplace.

This case also illustrates how long it can take for even a relatively simple case to work its way through the NLRB’s machinery. The dispute arose on November 22, 2000, and the charge was filed les than two weeks later. Approximately 12 weeks later, on February 27, 2001, the NLRB’s regional director issued a complaint. An administrative law judge (ALJ) heard the case in Louisville on May 23, 2001, approximately six months after the radio ban’s implementation. The ALJ rendered a decision in favor of the union on December 20, 2001, approximately one year after the charge was filed. The company filed exceptions to ALJ’s decision with the NLRB. The Board reversed the ALJ on December 6, 2006. More than six years elapsed between the charge being filed and the Board rendering a decision, demonstrating that NLRB proceedings are not for the impatient.

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If you have any questions or need help, please contact any member of the Greenebaum Doll & McDonald Labor and Employment Department. 

Copyright 2007 M. Lee Smith Publishers LLC 
KENTUCKY EMPLOYMENT LAW LETTER does not attempt to offer solutions to individual problems but rather to provide information about current developments in Kentucky employment law.  Questions about individual problems should be addressed to the employment law attorney of your choice.

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