As we have noted previously, the make-up of the Board currently stands at four out of five total members, divided evenly between two warring factions making it pretty much impossible to change the law which requires a majority.  It also means the precedent the new General Counsel has highlighted will not be reviewed until a fifth member is confirmed.  The President has appointed attorney John Ring, who awaits confirmation from the Senate.

The Board is issuing decisions on non-controversial cases almost daily.  There haven’t been many of interest, some default cases, others addressing garden variety issues.  Every so often one of the cases catches the eye and is worth discussing.  That is true of the Board’s recent decision in Operating Engineers, Local 501 (Brady Linen Services LLC), 366 NLRB No. 3 (January 23, 2018), which discusses the law concerning the legal duty to reduce a collective bargaining agreement to writing, and then sign it.

Negotiations Fail To Produce An Agreement: Employer Issues Last, Best And Final Offer

The facts are pretty straightforward.  The employer runs a commercial laundry and its employees are represented by the union.  The parties met to negotiate a successor collective bargaining agreement.  One proposal concerned the use of apprentices.  The apprentice proposal consisted of 3 sections.  The employer and the union tentatively agreed on section 1 of the proposal and section 3 but not section 2.  Section 2 concerned whether the employer would pay for apprentices.  The employer’s proposal on section 2 in negotiations left the amount to be paid for apprentices blank.

The parties reached the end of negotiations and did not reach a tentative agreement on a new collective bargaining agreement.   The employer issued a last, best and final offer to the union.  The employer’s last, best and final contained no section 2 of the apprentice provision.  The employer’s cover letter accompanying the offer stated, “Any outstanding union proposals, whether in the form of a formal proposal or in the form of contract language that is not identified above is, formally rejected.”  The last, best and final offer did not include a section 2 in the apprenticeship proposal.

The union submitted the last, best and final for employee ratification.  The employees voted to accept the offer.  The union then stated that it would draft the CBAs for the employer’s review and signature.   The union then submitted for signature a contract which contained section 2 of the apprentice provision.  The employer immediately objected to the inclusion of this provision.  After some back and forth with the union, the employer redacted section 2 and sent the agreement to the union for signature.  The union refused to sign the agreement.  The employer filed charges, alleging that the union’s failure to execute the agreed upon collective bargaining agreement violated Section 8(b)(3) of the Act (which is the corollary to Section 8(a)(5) – requiring the employer to bargain in good faith).

Administrative Law Judge Finds Union Actions Violate Act In Two Different Ways

After a trial the ALJ reviewed the law regarding such issues:

It is well settled that the 8(d) obligation to bargain collectively requires either party, upon the request of the other party, to execute a written contract incorporating an agreement reached during negotiations.  H.J. Heinz Co. v. NLRB, 311 U.S. 514 (1941).  Specifically, the Board has held that under Section 8(b)(3) it is a per se violation for a union to refuse an employer’s request to sign a negotiated agreement.  SeeWindward Teachers Assn., 346 NLRB 1148, 1150 (2006).

This is known in labor circles as a Heinz violation.

The union raised the defense that there could be no violation because of the dispute over whether the parties intended to include section 2 in the final agreement.  This argument is one of contract law:  that there was no meeting of the minds over the apprentice provision.  Specifically, the union asserted the entire apprentice provision,–all 3 sections,– was “meaningless” if it did not include section 2.  Since the parties agreed upon section 1 and section 3, they must have meant to include section 2.  The judge disposed of this argument summarily, “[i]f the union believed this to be the case it could have communicated this exact sentiment prior to ratifying the agreement.”  The judge also noted that the employer had made clear it was rejecting the all proposals not addressed in its last, best and final offer. The ALJ found the parties did have a meeting of the minds and the union’s failure to execute the redacted version of the collective bargaining agreement was a violation of Section 8(b)(3).

The ALJ also found the union to have separately violated Section 8(b)(3) by its insertion of the provision not agreed upon in negotiations into the draft collective bargaining agreement.  The judge noted the insertion of section 2 was an unlawful attempt by the union to get what it could not get in negotiations:  “The attempt to obtain terms that it deemed more favorable than the terms which it agreed upon by simply unilaterally inserting them constitutes an unlawful refusal to execute a completed contract in violation of the Act.”

Takeaways

The Heinz violation has been around for at least 77 years, so it’s hardly new.  Both employers and unions are required to reduce the agreement they make to writing and sign it or they violate the duty to bargain.  Signing an agreement has special significance in Board law.  Among other things, a signed agreement serves as an absolute bar to employees filing a decertification petition during the term of the agreement (with some timing limitations), while an unsigned agreement does not bar such a petition.   A signed agreement also, obviously, is more easily enforced as it signifies to the entire world that this is the deal, and that the parties signed it after evaluation of its terms.

The other main takeaway from this case, and this may be more important than understanding the law about signing the agreement, is that it is very important for parties in negotiations to carefully document what is being offered and what is not being offered.  Had the employer not indicated that all items not addressed in its last, best and final offer were rejected, the union’s argument that there was no meeting of the minds would have more substance behind it.