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Washington Labor & Employment Wire » NLRB Acting General Counsel Proposes Changes in Arbitration Deferral

NLRB Acting General Counsel Proposes Changes in Arbitration Deferral

In a January 20, 2011 memorandum to the regional offices of the National Labor Relations Board (”NLRB” or “Board”), NLRB Acting General Counsel Lafe Solomon proposed that the NLRB adopt a new approach for deferral to arbitration decisions concerning NLRA Section 8(a)(1) interference and Section 8(a)(3) discrimination cases.

The memorandum (Memorandum GC 11-05) proposed changing the burden of proof for deferral, shifting the burden to the party requesting deferral. Under the new proposed test, the party requesting deferral would have to demonstrate (1) the contract at issue incorporated the statutory right at issue or otherwise presented the statutory issue to the arbitrator, and (2) in determining the issue, the arbitrator correctly and adequately spelled-out and applied the appropriate statutory principles. If such showing were made, Solomon proposed that the Board should defer to the arbitration award unless the award was “clearly repugnant” or inconsistent with the NLRA.

Solomon, who was nominated by President Obama earlier this month to a four-year term as General Counsel, explained that such an approach would ensure that substantive outcomes from arbitrations would not depart from those the Board would reach, protecting statutory requirements and protections. In making this recommendation, Solomon referenced language in NLRA Section 10(a), stating that the NLRA’s authority “shall not be affected by any other means of adjustment or prevention that has been or may be established by agreement, law, or otherwise,” and argued that the provision limited the ability of parties to enter into private agreements or alternative dispute resolution that would alter protected NLRA rights. Nevertheless, Solomon noted Congress has favored private resolution of labor disputes and provided the Board with significant leeway to defer to arbitration procedures, as long as the individual rights protected by Section 10(a) were respected.

Solomon’s memorandum also referenced 14 Penn Plaza v. Pyett, 129 S. Ct. 1456 (2009), a recent Supreme Court opinion which held that unions are able to mandate arbitration to resolve statutory discrimination claims - thus waiving employee rights to bring such cases in a particular forum - provided that the collective bargaining agreement expresses the waiver in clear and unmistakable terms and gives the arbitrator the authority to decide the statutory issue. Solomon noted that the NLRB’s existing standard for deferral set forth in Olin Corp., 268 N.L.R.B. 573 (1984), was in tension with 14 Penn Plaza, as it permitted deferral to arbitration awards that differed significantly from NLRB standards, requiring only that the arbitrator considered facts relevant to resolve contractual and statutory issues. The new standard would resolve this tension by ensuring that the arbitrator adequately considered statutory rights and resolved unfair labor practice complaints consistent with the NLRA.