The National Labor Relations Board recently overturned a decision issued in 2014 and returned to its time-honored standard for post-arbitral deferral in unfair labor practice cases alleging discipline or discharge in violation of Sections 8(a)(1) and (3) of the National Labor Relations Act (NLRA). The Board relies on the post-arbitral deferral standard in considering whether to defer to an arbitrator’s prior resolution of an employee’s grievance.  Under the restored standard—which had been in place for decades—the Board will now defer to an arbitrator’s decision where “(1) the arbitration proceedings were fair and regular, (2) the parties agreed to be bound, (3) the contractual issue was factually parallel to the unfair labor practice issue, (4) the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice, and (5) the decision was not clearly repugnant to the purposes and policies of the Act.”¹

Background

The decision, United Parcel Services, Inc., 369 NLRB No. 1, involved the termination of a package delivery driver who was fired for violating the company’s package delivery policies. In the months preceding his employment termination, the employee had actively campaigned in opposition to the ratification of the company’s national and local collective bargaining agreements with the International Brotherhood of Teamsters.

The employee filed two grievances alleging that his discharge violated Section 8(a)(3) of the NLRA, which makes it an unfair labor practice for an employer, “by discrimination in regard to hire or tenure of employment or any term or condition of employment[,] to encourage or discourage membership in any labor organization.” The employee’s grievances were presented at a joint grievance panel, which unanimously found “no violation of any contract articles” and upheld the employee’s job termination. The employee had also filed unfair labor practice charges with the NLRB, alleging that the employer had unlawfully terminated his employment on the same grounds.

At the hearing before the administrative law judge (ALJ), the company argued that the ALJ should defer to the decision of the joint grievance panel and uphold the employee’s termination. Applying the standard articulated in Babcock & Wilcox Construction Co., Inc., 361 NLRB 1127 (2014), the ALJ rejected the company’s request for post-arbitral deferral. Under Babcock, a party urging deferral must show that (1) the arbitrator was explicitly authorized to decide the unfair labor practice issue; (2) the arbitrator was presented with and considered the statutory issue, or was prevented from doing so by the party opposing deferral; and (3) Board law reasonably permits the award. The ALJ concluded that the case could not be deferred, because the company failed to demonstrate that the grievance panel had specifically considered the statutory issue of whether the discharge violated the NLRA. 

The company appealed the ALJ’s decision to the Board, where a three-member panel unanimously reversed the ALJ’s decision and reinstated the aforementioned five-factor post-arbitral deferral standard established in Spielberg Manufacturing Co., 112 NLRB 1080 (1955), and Olin Corp., 268 NLRB 573 (1984).  Thus, in cases where an employee grievance and an unfair labor practice charge share a common nucleus of facts, a party seeking deferral no longer needs to show that the statutory issue was specifically considered by the arbitrator.

Practical Implications

The Board’s decision in this case promotes the resolution of employment disputes through the grievance and arbitration machinery, and furthers federal policy in favor of arbitration. The Board’s return to the less stringent Spielberg/Olin standard will likely result in an increase in the number of post-arbitral deferrals issued by the Board. It is important to note that the new Spielberg/Olin standard applies retroactively to all cases currently pending before the Board. Thus, employers should assess whether any pending cases may be affected by this decision.