Ken Dolin Published in the National Law Journal

The May 4, 2006 issue of the NLJ published Ken's bylined article ("The NLRB's 'Bath Iron Works' Decision") in which Ken notes : "The National Labor Relations Board recently held in Bath Iron Works, 345 NLRB No. 33 (Aug. 27, 2005), that an employer did not violate the National Labor Relations Act by merging its pension plan into the larger pension plan of its corporate parent without the consent of the three affected unions. The board reasoned that under a reasonable interpretation of the collective bargaining agreements and the plan documents, the employer had the authority to implement the merger without the unions' consent. It rejected the contention that the merger was unlawful because the unions had not "clearly and unmistakably waived" their right to bargain over the merger, finding this "clear and unmistakable" standard inappropriate for contract-modification cases."

He writes: "Section 8(d) of the NLRA contains various bargaining obligations, one of which is to meet and bargain in good faith about terms and conditions of employment. A unilateral change is inconsistent with that duty. A separate §8(d) obligation is the duty to continue in full force and effect the terms and conditions of an existing contract. A modification of the contract is inconsistent with that obligation. The unilateral-change case and the contract-modification case differ in terms of principle, possible defenses and remedy. In terms of principle, the unilateral-change case does not require the showing of a contract provision; it requires showing only that there is an employment practice concerning a mandatory bargaining subject, and that the employer has made a significant change to it without bargaining. By contrast, in the contract-modification case, a contractual provision must be identified and it must be shown that the employer has modified that provision. In terms of defenses, a defense to a unilateral change can be that the union has waived its right to bargain. A defense to the contract-modification case can be that the union has consented to the change.

"The board decision in Bath Iron Works is consistent with the long-standing federal policy favoring arbitration of labor disputes and minimizes the board's role in resolving contract disputes. When an employer has a sound arguable basis for ascribing a particular meaning to its contract and its action is in accordance with the terms of the contract as the employer construes it, the board arguably should not enter the dispute to serve the function of arbitrator in determining which party's interpretation is correct. This same rationale can be applied in unilateral-change cases. . . . However, the Bath Iron Works holding is limited to contract-modification cases and expressly does not resolve the issue that has divided the board and several circuit courts of appeals in recent years, namely the unilateral-change case in which the employer defends on the basis of a contractual provision. The board has historically taken the position that the contractual provision must clearly and unmistakably waive the right to bargain; otherwise a violation exists. . . . On the other hand, various courts have taken the position that it is sufficient if the contract covers the subject matter. If it does, the court will determine whether the employer was privileged to make the change without further bargaining."