By Nelson Cary and Lauren Sanders
With COVID-19 disrupting business, employers may be questioning whether the virus has an effect on the duty to bargain with labor organizations. On Friday, the NLRB’s General Counsel, Peter B. Robb, attempted to answer these questions, issuing a letter to regional officials clarifying employers’ duty to bargain during emergencies.
The General Counsel’s letter summarized nine NLRB decisions involving a variety of emergencies, including hurricanes, 9/11, ice storms, and credit shortages. The General Counsel explained that it was his “hope that these summaries prove useful to those considering this issue during these challenging times.” Notably, the letter did not summarize any cases involving shutdowns or closures due to illness or infectious disease. Nor did the letter provide any advice to employers specific to the current pandemic.
The General Counsel’s letter is divided into two sections. The first section summarizes cases that involving public emergencies. For example, the letter summarizes Port Print & Specialties, a case from 2007 in which the NLRB found that an employer did not violate Section 8(a)(5) of the NLRA when it laid off employees in anticipation of an impending hurricane. The NLRB explained that one exception to the duty to bargain with a labor organization is an “extraordinary event[] which [is] an unforeseen occurrence, having a major economic effect requiring the company to take immediate action.” The NLRB fit a hurricane into this category. The NLRB also found that the employer later violated Section 8(a)(5) by failing to bargain over the effects of the layoff and by using non-unit employees to perform unit work after the hurricane had passed.
Another case summarized in this first section is K-Mart Corp. In this 2004 case, the ALJ concluded that the employer’s layoff following September 11th was not unlawful. The employer’s business had shrunk 60 percent, causing the employer to go bankrupt. The ALJ concluded that the economic fallout (like the hurricane in Port Print & Specialties) had given rise to “extraordinary unforeseen events having a major economic effect that required the employer to take immediate action.”
The second half of the General Counsel’s letter summarizes cases involving emergency situations particular to individual employers. For instance, the letter summarizes Cyclone Fence, Inc., a case from 2000 in which an employer unilaterally closed one of its facilities and terminated the employees who worked there after discovering that its lender had halted its line of credit. The NLRB concluded that the employer did not have to bargain over the decision to close the operations, but was required to bargain over the closing effects.
For labor professionals grappling with COVID-19’s effect on bargaining issues, there appears to be at least a few take-aways from the General Counsel’s letter and the cases he summarizes. Specifically, an employer may not have a duty to bargain during an unforeseen, extraordinary event that has major economic effects and that causes a company to take immediate action—a category that could include COVID-19. Nonetheless, and certainly after the unforeseen, extraordinary event passes, the employers have a duty to bargain with a labor organization over the event’s effects. That said, General Counsel’s memorandum is not law and employer’s should be accordingly wary of unilaterally ceasing to bargain with a labor organization. Every unionized employer considering unilateral action in response to COVID-19 should contact qualified labor law counsel before proceeding.