In a memo dated December 28, 2018 (but denominated as a “2019” memorandum), National Labor Relations Board (NLRB or Board) General Counsel Peter Robb issued a memorandum with instructions for NLRB Regional Offices concerning a change in the Board’s deferral policy.  Memorandum GC-19-03 (NLRB, 12/28/18).  The NLRB, which enforces the National Labor Relations Act (NLRA), has long had a policy of deferring to the arbitration process when an unfair labor practice (ULP) claim under the NLRA also implicates provisions of a collective bargaining agreement (CBA).  Deferral essentially means that under certain circumstances, the NLRB allows the arbitration process under a CBA to resolve disputes that that could include claims that an employer violated the NLRA by committing a ULP.  If the NLRB defers to arbitration, it is tantamount to dismissing the ULP claim when the arbitral process can adequately resolve the underlying dispute while protecting both statutory and contractual rights.  The Board has revised the parameters of its deferral policy over the years, with the most recent revision occurring in 2014 in the case of Babcock & Wilcox Construction Co.[1].

In Babcock, the Board had modified “the post-arbitral deferral standard for Section 8(a)(1) and (3)[2] cases to require that the party urging deferral demonstrate that: (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 permits the arbitral award.”  GC-19-03, fn. 3.  In contrast with the then-existing policy, the Board placed the burden of proof on the party seeking deferral, meaning that there was a presumption against deferring to arbitration.  The Babcock case itself involved a “post-arbitral” situation in which an arbitration panel had issued a final award on the underlying dispute before the Board completed its ULP process, but the Board extended the Babcock policy to “pre-arbitral” ULP filings in which a Charging Party files a ULP claim without filing a grievance under the CBA, but it appears that the grievance/arbitration process could resolve the ULP as well as any contractual disputes.  See GC-19-03, p. 1.  In 2015, then-General Counsel Richard Griffin instructed Regional Offices to also apply the Babcock policies to so-called Dubo deferrals, Memorandum GC-15-02 (2/10/15), which involve cases “where one or more of the parties has initiated the grievance-arbitration machinery before or during the course of filing an unfair labor practice charge on the underlying issue.” GC-19-03, p. 1.

Mr. Robb’s 2019 memorandum concerned Dubo deferrals.  Mr. Robb stated that because the 2015 General Counsel’s memorandum on the subject “was incorrect,”  Regional Offices should use the prior Dubo deferral standards which allow deferral of “ ‘the further processing of an unfair labor practice case, where the matter in dispute in that case is being processed through the grievance-arbitration machinery and there is a reasonable chance that the use of that machinery will resolve the dispute or set it at rest.’ ”  GC-19-03, p. 2, quoting GC-79-36.

GC-19-03, p.2.  Under the pre-2015 Dubo standards, the burden of proof is on the party opposing deferral: the 2019 memorandum states that “where the Charging Party has voluntarily chosen to have the statutory issue decided through grievance and arbitration rather than through Board processes, it has effectively authorized the arbitrator to decide the unfair labor practice claim and it is appropriate to defer to the award unless it is ‘palpably wrong.’ ”  GC-19-03, p. 5.

The effect of the 2019 memorandum is to make it easier for a party to be successful at persuading the Board to defer to an ongoing arbitration process.  The National Law Review stated that the General Counsel had “announced an updated approach that will help employers avoid litigating unfair labor practice charges filed by unions or union-represented employees who have filed grievances regarding the same underlying dispute.”

Although the 2019 memorandum addressed only Dubo deferrals, the General Counsel also urged the Board to take a second look at the Babcock decision for post- and pre-arbitral deferrals, stating that he thought that the 2014 Babcock decision “was wrongly decided and should be reexamined by the Board.”  GC-19-03, fn. 9.  The NLRB often addresses issues at the suggestion of the General Counsel, so it is possible that we will see a new deferral policy for 8(a)(1) and 8(a)(3) claims for both post- and pre-arbitral situations.

[1] 361 NLRB 1127 (2014).

[2] Section 8(a)(1) and 8(a)(3) of the NLRA, 29 U.S.C. §§ 158(a)(1) and 158(a)(3), describe ULPs in which employers interfere with workers’ rights of self-organization and collective bargaining (8(a)(1)) and discriminate against workers with the goal of encouraging or discouraging membership in a labor union (8(a)(3)).