By Jennifer L. Mora and Jeffrey A.  Berman

Seyfarth Synopsis: When a new President is about to shift the balance of power at the National Labor Relations Board, a Board dissent can foreshadow how the newly constituted Board will consider a similar issue. Such is the case in Stericycle, Inc., a February 17, 2021 divided Board decision addressing unilateral implementation of an employee handbook.

In Stericycle, the employer had a collective bargaining relationship with the Teamsters. In February 2015, the employer distributed a company-wide handbook at one of the union facilities. The handbook was inconsistent with several provisions in the parties’ collective-bargaining agreement, including those involving attendance, overtime, time off, work rules, discipline, grievance procedures, and the employee probationary period.

However, the first page of the handbook stated that “[s]ome benefits may not apply to union team members and in some cases these policies may be impacted by collective bargaining agreements.” The last page of the handbook required employees to sign and return to human resources a statement attesting that they “understand it is [our] responsibility to know and abide by its contents.” The employer had not applied the nationwide employee handbook in a manner inconsistent with the collective bargaining agreement.

The administrative law judge (ALJ) found the employer was obligated to provide the union advance notice and an opportunity to bargain over the handbook before distributing it. According to the ALJ, the handbook “contained numerous Company policies and practices that affected numerous mandatory subjects of bargaining.” The ALJ also ruled that the disclaimer language on the first page referring to union-represented employees “did not provide . . . clear guidance as to the applicable policies affecting certain terms and conditions of employment.”

A majority of the three Member panel, Members Emanuel and Ring, disagreed. While the handbook undoubtedly conflicted with some mandatory subjects in the labor agreement, the majority concluded the employer did not represent to employees that the handbook trumped the labor agreement and did not profess to make any changes to the collective bargaining agreement. The majority found it telling that the handbook stated on the first page that the labor agreement affected the policies in the handbook, and that some terms in the handbook might be different for the union-represented employees. Thus, the majority found no evidence of an intent to “modify, alter or change the existing contract” – – essentially, the employer’s disclaimer carried the day.

But it is Chairman McFerran’s dissent which, in the end, may be the most important part of the decision as it likely provides a roadmap for how the Biden Board will consider employer efforts to implement employee handbooks. Starting with the undisputed premise that the handbook conflicted in some respects with the labor agreement, the dissent took issue with the Board’s conclusion that the employer did not purport to change the labor agreement or represent to employees that the handbook superseded the agreement. The problem with this argument, according to McFerran, was that union-represented employees were required to sign an acknowledgement of their receipt of the handbook. Thus, the employer was essentially telling employees that it “was free to sidestep the Union and supplant, expand, or alter terms and conditions of employment that the parties had reached through bargaining and impose additional terms and conditions of employment without bargaining.”

Chairman McFerran also found the disclaimer lacking for several reasons. First, the disclaimer did not communicate to employees with “the clarity or the specificity required by the duty to recognize and bargain with the Union as employees’ exclusive representative.” Next, the handbook should have advised employees that the labor agreement trumped the handbook (rather than the opposite). This failure meant that employees were left to guess which handbook provisions were impacted by the labor agreement. And the disclaimer was silent about the application of new terms and conditions in the handbook that were not in the collective bargaining agreement. Ultimately, according to the dissent, the message the employer communicated to unit employees was that “it did not respect the Union as their exclusive representative.”

While employers with a mix of union and non-union workforces might understand that their employee handbooks do not supplant or alter a collective bargaining agreement with their employees’ bargaining representative, the Biden Board will ask in future cases – – do union-represented employees share this same understanding? The lesson for employers with mixed workforces is take a fresh look at their handbook disclaimers to make it extremely clear to unionized workforces that, if conflicts exist, the labor agreement always wins. However, depending on the composition of the new Biden Board, even this may not be sufficient.