Employment Law Daily Employer must sign fully negotiated CBA even though decertification petition circulated
Wednesday, May 11, 2016

Employer must sign fully negotiated CBA even though decertification petition circulated

By Dave Strausfeld, J.D. A company could not refuse to sign a collective bargaining agreement once its attorney signaled assent to the union’s proposed wording of the last disputed clause, even though employees had begun to circulate a decertification petition that quickly obtained majority support. By this point, it was too late for the company to repudiate the agreement, and its attempt to do so was bad faith negotiating in violation of Section 8(a)(1) and (5), held the Seventh Circuit, enforcing an NLRB order requiring the employer to sign the CBA and comply with its terms until the agreement expired (Polycon Industries, Inc. v. NLRB, May 9, 2016, Posner, R.). New language was “fine.” By January, after protracted negotiations, a plastic bottle manufacturer and a union had largely agreed on the terms of a CBA. But in March, the agreement not yet signed, the company’s attorney asked that a “union shop” clause be revised. After further negotiations the union suggested some language for addressing the issue. On May 3, the company’s attorney replied that the proposed new language was “fine,” and he asked the union to send him a complete final version of the CBA, which he would “review and, assuming that it is consistent with our agreement, forward to the client for signing.” Four days later (May 7) the union emailed a copy of the CBA with the new language—and two days after that the attorney replied that the company would not sign the agreement. The refusal was not because of any inconsistency between the copy and what he had agreed upon but because the company’s employees had begun circulating a petition to decertify the union as their collective bargaining representative. Too late to back out. The company violated the NLRA by refusing to sign the agreement, held the Seventh Circuit, concurring with the Board. Once the parties agreed on the CBA’s terms, as they did on May 3 when the company’s attorney notified the union that its proposed union shop language was “fine,” they were obligated to execute the agreement. Company’s “meeting of the minds” argument. “Desperately,” as the appeals court described it, the company argued that, under Indiana law, there was no meeting of the minds on May 3. But state contract law is inapplicable to the interpretation and enforcement of CBAs within the Board’s jurisdiction, the court pointed out. “Borders on the frivolous.” The company also insisted that its approval, not merely the assent of its attorney, was needed before the parties could be bound by the CBA. But the attorney clearly had been authorized to speak for the company when he told the union that the suggested addition was fine. Under these facts, the Board’s decision to order the company to sign the CBA was so “clearly correct” that the company’s challenge “borders on the frivolous.” The Supreme Court’s decision in H.J. Heinz Co. v. NLRB was on point: An employer’s “refusal to honor, with his signature, the agreement which he has made with a labor organization, discredits the organization, impairs the bargaining process and tends to frustrate the aim of the statute to secure industrial peace through collective bargaining.” The stakes in this case were high, the appeals court commented. Once a CBA takes effect, the union enjoys a conclusive presumption of majority support until either the agreement’s end date or three years from the agreement’s effective date, whichever is earlier, even if a decertification petition is filed, as it was in this case.

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