On December 14, 2012, the National Labor Relations Board reversed decade-old precedent and held in Alan Ritchey, Inc., 359 NLRB No. 40, that unionized employers may not impose discretionary discipline unilaterally. The decision marks another in the trend of mid-December Board offerings completely changing the course of NLRA interpretation — and prospectively only.

This case arose after Respondent’s employees voted to be represented by the Union, but before the parties were able to enter into a binding collective-bargaining agreement. Respondent had continued to impose discipline for absenteeism, insubordination, threatening behavior, and failure to meet efficiency standards. The sanctions, ranging from a formal warning to discharge, were imposed pursuant to Respondent’s pre-existing progressive disciplinary system, which had been in effect since Respondent opened the facility — and prior to the union’s recognition. While Respondent’s disciplinary system outlined specific sanctions to be enacted in response to certain situations, the Respondent’s employee handbook also provided that Respondent reserved the right to exercise discretion in the enforcement of its policies, acknowledging that situations may arise that would warrant flexibility on the part of management.

The Board relied heavily on its decision in Oneita Knitting Mills, 205 NLRB 500 (1973) wherein it held that an employer with a past history of a merit increase program could not unilaterally discontinue the program, nor could the employer exercise unilateral discretion with regard to such increases, once an exclusive bargaining agent had been selected by the employees. Instead, the employer was required to continue the general framework and to bargain with the union over the amount of the "discretionary" merit-based increases.

Purportedly applying the principle from Oneita Knitting to the case at hand, the Board held that where an employer’s disciplinary system is fixed as to broad standards, but discretionary as to what type of discipline will be imposed in a particular circumstance, an employer must maintain the system’s fixed aspects and bargain with the Union over any discretionary aspects of the system. The Board further held that the duty to bargain is triggered before an employee could be suspended, demoted, or discharged. However, the duty to bargain over lesser sanctions, such as oral or written warnings, is not triggered until after their imposition. The Board maintained that the difference in the timing of the duty to bargain was appropriate because suspensions and discharges greatly affect an employee’s terms and conditions of employment, while oral and written warnings have much less of an effect.

Where the pre-imposition duty to bargain exists, an employer is now obligated to provide the Union with notice and an opportunity to bargain before discipline is imposed. The Board held that this duty involves sufficient advance notice to the Union to allow for meaningful discussion regarding the grounds for imposing discipline and the grounds supporting the form of discipline chosen to the extent that there has been an exercise of discretion on the part of management officials. Furthermore, the employer has a duty to provide the Union with relevant information under the Board’s established approach to information requests.

Importantly, the employer is not required to bargain to agreement or impasse before the imposition of discipline. Instead, the duty to bargain continues after the imposition of discipline if the parties are unable to reach an agreement before the imposition of sanctions. Moreover, the employer need not bargain over the imposition of discipline that is consistent with its past practices. Finally, the Board held that an employer may act unilaterally in any situation that presents an “exigent circumstance.” The Board defined an exigent circumstance as any situation where an employer has a reasonable and good-faith belief that an employee’s continued presence on the job presents a serious, imminent danger to the employer’s personnel or business.

As mentioned above, as was the case with its recent decision in WKYC-TV, 359 NLRB No. 30 (2012), the Board held that this new interpretation will be applied prospectively only.