As we have been noting recently, the NLRB and its Acting General Counsel (AGC) have embarked on an aggressive campaign to increase NLRB influence and control over labor-management relations. At hearings on Friday, February 11, 2011 before the House Committee on Education and the Workforce, the employer community raised concerns about a number of those initiatives, including two recent AGC Memoranda, which are enforcement directives from the NLRB General Counsel to NLRB Regional Offices around the country. In GC 11-04, the AGC issued a controversial direction to the Regional Offices to include mandatory default language in settlement agreements. In GC 11-05, the AGC announced a significant change in the way the NLRB will proceed when issues brought before the NLRB could also be brought in front of an arbitrator under a labor contract grievance procedure.

Memorandum GC 11-04 instructs the NLRB’s Regional Offices to include certain language in all settlement agreements over unfair labor practice charges. The new language says that if an employer fails to comply with any aspect of the settlement, the employer will automatically be deemed to have admitted all of the allegations in the underlying unfair labor practice complaint. This language means that employers entering into settlement agreements with the NLRB will have to be very cautious not to do anything that might be construed a violation of its obligations under the settlement agreement because violating the settlement will make the employer automatically liable for the underlying allegations.

Memorandum GC 11-05 revises the NLRB’s long-standing practice of deferring to arbitration awards and grievance settlements. Up until now, if a union that represented an employee covered by a labor contract with a grievance/arbitration procedure filed a charge with the NLRB claiming unfair treatment, the NLRB would usually defer to the grievance arbitration procedure if the conduct complained about could be pursued under those procedures. In Memorandum GC 11-05, the AGC says that the NLRB’s current policy is "overly deferential" and does not adequately protect employee rights. The AGC urges Regional Directors to investigate charge allegations and make a decision whether the charge has "arguable merit" before deferring to arbitration. In cases where an arbitration decision has already been issued, the NLRB Regional Directors are told to determine whether the parties presented to the arbitrator the statutory right that the charging party sought to enforce and whether the statutory right was incorporated into the arbitrator’s decision. The Regional Director is also to consider whether the arbitrator correctly recognized the statutory principles and applied them in issuing his or her decision. Only then will the Board defer to the arbitrator’s award. Also, the AGC urges Regional Directors not to defer to grievance settlements unless it is clear the parties intended for the settlement to resolve the unfair labor practice issues. Regional Directors are also encouraged to consider whether the settlement is "reasonable," whether it appears any fraud, duress, or coercion occurred and whether the respondent has a history of unfair labor practices or of violating settlement agreements.

All of the hurdles set out in Memorandum GC 11-05 will make it far less likely that the NLRB will defer to grievance arbitration procedures. This means that employers with union contracts can expect much more often to be required to battle before the NLRB regarding the very same issues that are being pursued under the union contract grievance arbitration procedures.