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INSIGHT: NLRB Opens Pandora’s Box on Union ‘Contract Bar’ Doctrine

July 29, 2020, 8:01 AM

On July 7 the National Labor Relations Board invited briefs on whether to repeal, retain, or alter the “contract bar” rule of labor law, which has been established for longer than any of the board’s members have been alive and even longer than the limits on unions created by the 1947 Taft-Hartley amendments to the National Labor Relations Act.

The board members should consider whether they might open a Pandora’s box with this invitation, and taken on more long-settled issues than they—and courts— might care to chew on.

The rule dates from 1939. The board instructed parties to file their briefs by Aug. 6, but amici were given until Sept. 23 to file briefs on the issue.

Exclusive Union Representation

The basics of the “contract bar” rule are that when a union is the exclusive representative of any group of an employer’s employees and has made an agreement with that employer, the union’s status as exclusive representative of those employees cannot be challenged during the duration of that contract or the first three years of that contract. That a union is an “exclusive representative” of employees has always been in the statute.

The board’s reconsideration of the contract bar rule is all the more gratuitous because in the Mountaire Farms Inc. case in which the board has invited briefs, the agency had already ordered and actually conducted a decertification election, for which the ballots have been impounded.

And while the board granted the union’s request for reconsideration of the decision to have an election, the list of issues in the board’s invitation for briefs does not include whether the union is correct that provisions in its contract are legal such that under board precedent the contract should serve as a bar.

50 Years of Safegaurds

The board and courts have applied safeguards for more than 50 years to ensure that the contract bar rule does not improperly interfere with the “employee choice” that the decertification petitioner claimed is impinged on by the rule.

Other rules limiting the impact of the contract bar rule are:

  • the three-year maximum period for the bar no matter how long the contract itself is (the contract at issue in Mountaire Farms actually has a duration of five years);
  • a “window period” from 90 days to 60 days prior to any new contract during which an employee can file a decertification or other petition, meaning an employer and union cannot make a new agreement to bar an election;
  • a “premature extension” doctrine that prevents an employer and union from making a new agreement prior to that window period to prevent any election for longer than three years;
  • a petition for an election is allowed if the employer-union contract expires prior to the parties negotiating a new contract (and such expirations without new contracts are common in recent years) and a petition can even be filed prior to the effective date of a new contract that has been agreed to;
  • to create a bar the contract must be in writing and signed by both parties and include a definite duration and other substantial terms (preventing “sweetheart” or “quickie” agreements to interfere with employee choice); and,
  • in many circumstances a contract will not serve as a bar if new circumstances arise such as relocations or other significant changes in the workplace or employees who are represented.

U.S. Supreme Court Considered It When Adopting Labor Law Rules

The board created many of these safeguards just prior to Congress amending the Labor-Management Relations Act in 1959. And while neither the safeguards, nor the contract bar itself, are expressly written into the statute, Congress considered the contract bar rule when making other amendments to the statute. And so did the U.S. Supreme Court when adopting other labor law rules not long afterwards.

Congress referenced the contract bar rule in 1959 when it made several amendments to the National Labor Relations Act. The House Committee on Education and Labor Report [No. 86-741] on the bill that eventually became those amendments mentioned that under the new Section 8(f) applying to construction industry agreements, the “contract bar” to elections would not apply. Should the board reflect on what the 1959 Congress might or might not have done in amending the NLRA regarding the construction industry if the contract bar rule had not been adopted 20 years prior?

In 1961, the U.S. Supreme Court established multiple additional NLRA rules that remain central to how the law is applied. In Int’l Ladies’ Garment Workers’ Union v. NLRB (Bernhard-Altmann) [366 U.S. 731], the court interpreted NLRA Sections 8(a)(1) & (2) and 8(b)(1)(A) as meaning that an employer could never recognize a “minority” union, one that was not actually supported by a majority of employees, even if the employer and union both had good-faith belief that the union had such support.

If the current board were to repeal the contract bar rule, would that mean unions could now raise the argument the Supreme Court rejected in Bernhard-Altmann? Or challenge the Bernhard-Altmann rule in general? These are the kinds of questions that are raised when the board announces it wants to review a rule, like contract bar, that has been the rule for more than 80 years. After all, the contract bar rule predates that 1961 precedent by more than two decades.

The Supreme Court again referred to the contract bar in 1986 in NLRB v. Financial Inst. Employees of America, Local,1182 [474 U.S. 192] when it stated, “The basic purpose of the National Labor Relations Act is to preserve industrial peace” and cited to the contract bar rule, and multiple NLRA provisions added subsequent to that rule, as those intended to encourage industrial peace through stable bargaining relationships.

The board in its July 2020 invitation for briefs did acknowledge that it had to balance “the statutory goal of promoting labor relations stability”—which as was just stated the Supreme Court declared to be the “basic purpose” of the NLRA—with its statutory responsibility to serve “employee wishes.”

If the board were to repeal or even substantially diminish the contract bar rule, it must fully explain why it has decided to recalibrate the balance by eliminating or much reducing the effects of a rule that’s almost as old as the statute, and on which Congress and the Supreme Court have relied and that the latter has identified as a basis for multiple statutory provisions subsequently enacted. Those provisions could also be put into question if the board significantly changes the contract bar rule.

This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.

Author Information

Michael Hayes is an associate professor at the University of Baltimore School of Law, beginning there in 1998. From August 2013 to January 2017 he worked in the Department of Labor as the director of the Office of Labor-Management Standards (OLMS), at that time the only political position in that agency. The views expressed here are solely his own.

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