Daily Labor Report®

NLRB Fights Arbitrator’s Mandate to Reopen Health Unit

March 19, 2020, 1:53 PM

The National Labor Relations Board’s top lawyer told a House panel last week that he saw no justification for reopening the agency’s employee health service program. He didn’t mention that the NLRB is fighting an arbitrator’s decision ordering it to re-institute the program immediately.

The NLRB’s appeal of the arbitrator’s September ruling—that the closure violated a collective bargaining agreement with one of its two employee unions—remains pending at the Federal Labor Relations Authority.

Shutting down the health service program, the NLRB says, was necessary due to budget constraints. But the agency offered no evidence to show that it would suffer serious harm unless it eliminated the health program, the arbitrator said. Endorsing NLRB’s claim that it could close the program under its budgetary authority, she added, could usher in the “evisceration” of federal sector labor contracts and the “demise of unions that represent employees in this sector.”

“It could lead to the unacceptable and unjustifiable conclusion that Federal sector management could negate any provision of a contract based on a claim, bona fide or not, that it interfered with management’s right to control the budget,” arbitrator Mollie Bowers wrote.

The dispute over closing the health program signals how adversarial labor-management relations have grown at the NLRB, the federal agency responsible for overseeing labor-management relations in the private sector. It comes as two unions representing NLRB employees are trying to negotiate new collective bargaining agreements with the agency.

In congressional testimony and a statement to Bloomberg Law, the NLRB has maintained the closure was driven by financial considerations and recommended by an agency working group formed prior to the arrival of Trump administration appointees.

“The health unit was eliminated because of budget concerns in 2018,” NLRB spokesman Edwin Egee said via email. “It was done pursuant to recommendations formulated by a task force that included union representatives and a variety of managers.”

Most NLRB employees are on mandatory telework through April 1 due to the novel coronavirus, the agency announced this week. Some staffers criticized NLRB leadership after a regional director rescinded a policy of liberally granting telework in light of a centralized process for reviewing remote work requests nationwide.

Health Unit Closure

The NLRB had been providing health services under its program, commonly known as the “health unit,” for more than 30 years. Services included flu shots, health screening, routine medical treatment, and emergency response. The program served employees at agency headquarters via its own clinic, and field staffers by paying for them to use clinics in the federal buildings where they worked or at nearby locations.

An NLRB working group put the health unit on an August 2017 list of potential cost-saving cuts the agency might have to make to prevent layoffs and furloughs. The group was preparing for an expected $16 million budget cut for fiscal year 2018. The health unit cost $331,000 per year.

The agency continued to operate through continuing budget resolutions that maintained level funding through the first few months of FY2018. Congress finalized an appropriations measure in late March 2018 that left the NLRB’s budget unchanged.

But the NLRB had announced earlier in March 2018 that it would close the health unit at the end of the month due to budget constraints.

NLRB Professional Association President Karen Cook called the agency’s justification an “obfuscation.” The working group deemed closing the health unit a last resort option to respond to budget cuts and those cuts never materialized, she said.

“The fact that the Agency still refuses to reinstate health units in the face of a global public health crisis demonstrates profoundly bad judgment,” Cook said via email.

Both employee unions are operating on expired collective bargaining agreements. The NLRB Union, which represents staffers in field offices and support staff in headquarters, says the agency stopped rolling over its deal in December 2018. The NLRBPA, which represents employees in the agency’s headquarters, says the NLRB canceled its annually renewing contracts in October 2018.

Grievance Arbitration, Appeal

Both NLRB employee unions challenged the closure in grievance arbitration. One arbitrator ruled in December 2018 that the NLRBPA filed its grievance too late.

A different arbitrator, however, decided in September 2019 that the agency violated its labor agreement with the NLRBU by closing the health unit without bargaining, giving the union sufficient notice, or showing it was necessary to avoid serious adverse impacts.

The NLRB appealed the arbitration decision on several grounds, including that there was no contract violation and the ruling was contrary to law, interfered with management’s right to determine spending, and exceeded the arbitrator’s authority, according to an NLRB spokesman.

NLRBU President Burt Pearlstone said the agency took a “shotgun approach” with its appeal. But not only did the NLRB fail to show any economic necessity, the arbitrator ruled that the contract didn’t allow the agency to unilaterally close the health unit without regard to budgetary considerations, Pearlstone said. The arbitrator’s interpretation of the contract isn’t appealable, he said.

Successfully challenging arbitration decisions at the FLRA is a “steeper hill to climb than other appellate forums,” said William Wiley, a management-side attorney and former chief of staff to the FLRA general counsel.

“For the most part, agencies have to prove an arbitrator issued an award that’s illegal,” Wiley said, “not that it’s just wrong.”

To contact the reporter on this story: Robert Iafolla in Washington at riafolla@bloomberglaw.com

To contact the editors responsible for this story: Jay-Anne B. Casuga at jcasuga@bloomberglaw.com; Chris Opfer at copfer@bloomberglaw.com

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