Many employers are unsure about the NLRB’s deferral to arbitration rules. For nearly 60 years the National Labor Relations Board (NLRB) had applied the “Spielberg/Olin” standard in cases involving whether to defer to a decision reached through a grievance/arbitration procedure in a union contract. Under this standard, the NLRB would defer IF the following factors were present:
- all parties had agreed to be bound by the decision;
- the proceeding appear to be fair and regular;
- the arbitrator or grievance committee had been presented generally with the relevant facts to consider the unfair labor practice issue; and
- the award is not clearly repugnant to the NLRA.
However, in Babcock & Wilcox Construction Co., Inc., 361 NLRB # 132 (December 15, 2014) the NLRB announced a new standard for deferral . This new standard, which makes deferral to an arbitration decision less likely (and which is applied only prospectively), requires that the following factors be met:
- the arbitrator must have been EXPLICITLY authorized to decide the unfair labor practice issue;
- the arbitrator was presented with AND considered the statutory issue, or was prevented from doing so by the party opposing deferral; and
- NLRB law reasonably permits the award.
Employers should keep in mind these regulations when negotiating arbitration provisions for union contracts.