To Bargain or Not to Bargain: Employer’s Duty to Bargain During the COVID-19 Crisis

By Dennis E. Westlind and Jessica E. Wilcox - Bullard Law

April 2, 2020

If you have a union-represented workforce, you already know that you may have a duty to bargain over changes to the terms and conditions of employment. But as you respond to the COVID-19 public emergency, you’re making critical decisions in the moment and have no time to spare. Is there an “emergency exception” to your duty to bargain?

The National Labor Relations Board recently published a memorandum to provide guidance to employers on their duty to bargain during emergency situations like the coronavirus pandemic. The memorandum does not make any new rules, but does highlight the leading cases that can aid employers as they consider a reduction in force, layoff, furlough, closure or other extreme action in response to the coronavirus pandemic. The cases make it clear that an employer’s duty to bargain changes with the union will be determined on a case-by-case basis.

In public emergency cases like COVID-19, unionized employers can take unilateral action without collectively bargaining when there are “economic exigencies”—“extraordinary events which are an unforeseen occurrence, having a major economic effect requiring the company to take immediate action.” Port Printing & Specialties, 351 NLRB 1269 (2007). It is not enough that there be an emergency; the emergency must have a serious impact on your business. For example, the unforeseen business impact of the 9/11 terrorist attack excused K-Mart‘s duty to bargain over layoffs after its business plummeted by 60% of and it was forced to file for bankruptcy. K-Mart Corp., 341 NLRB 702 (2004).  

Even if the emergency might excuse the duty to bargain during the emergency, the employer may have a duty to bargain with the union over the effects of its action once the emergency has passed.  For example, it was excusable for a Louisiana employer to conduct a layoff without bargaining in the aftermath of Hurricane Rita, but the employer subsequently violated the Act by failing to bargain with the union after the hurricane passed, and the employer resumed operations with non-union staff.  Port Printing & Specialties, supra.

The memorandum also cited several cases for the proposition that an overall economic downturn, while it might be triggered by an emergency, does not suspend the employer’s duty to bargain.

What does this mean for employers during the current coronavirus pandemic?  It is relatively safe to say that if your business is immediately and significantly impacted by either government action or an actual COVID-19 outbreak among your workforce, you may take immediate and necessary action without bargaining with the union.  You should, however, notify the union and offer to bargain over the effects of those actions as soon as the emergency has passed.  But if you experience a general downturn in business in the months following the outbreak, you will still have a duty to bargain over any changes.

There are two other factors that may relieve or reduce your duty to bargain.  First, you can always follow the terms of an existing collective bargaining agreement.  For example, if your CBA contains a layoff provision and you follow it, you do not need to bargain with the union or inform them beyond what is required under the CBA.  Second, a recent NLRB case, MV Transportation, greatly expanded an employer’s ability to make unilateral changes during the term of a CBA.  Under the Board’s new “contract coverage” standard, employers may act without bargaining as long as the change is within the scope of contractual language granting the employer the right to act unilaterally (such as a management rights clause), and does not conflict with other express provisions of the CBA.