NLRB Returns to Arbitration-Friendly Standard

United Parcel Service, Inc., (UPS) discharged an employee, Atkinson, for violating its package delivery procedures. Atkinson had previously been heavily involved in union activities and filed two grievances referencing Section 8(a)(3) of the National Labor Relations Act (NLRA) over his discharge. A joint grievance panel, consisting of two representatives from the union and two from UPS, had a hearing to consider Atkinson’s grievances and upheld the discharge. Atkinson had also filed charges with the National Labor Relations Board (NLRB), alleging that his discharge violated the NLRA. After a hearing, the administrative law judge applied the deferral standard adopted within Babcock & Wilcox Construction Co., 361 NLRB 1127 (2014), and overruled the joint grievance panel, finding that Atkinson’s discharge was unlawful.

Thereafter, the NLRB issued a Notice and Invitation to File Briefs, inviting the parties to file briefs addressing whether the NLRB should adhere to its existing standard for post-arbitral deferral or if it should return to Spielberg Mfg. Co., 112 NLRB 1080 (1955), and Olin Corp., 268 NLRB 573, (1984).

After considering the briefs of the parties and general counsel, as well as amicus briefs submitted by the U.S. Chamber of Commerce and the Association for Union Democracy, the NLRB overruled Babcock and announced a return to its previously long-held standards for deferral under Spielberg/Olin. In providing its reasoning, the NLRB stated that the standard set forth in Babcock:

1. reflected a “general distrust of arbitration as adequate to protect individual statutory rights under the Act in discharge and discipline cases,” a distrust the NLRB characterized as untenable;
2. interfered with parties’ freedom to contract into arbitration agreements;
3. encouraged multiple litigations of a single contest by rewarding unions for withholding evidence in arbitration proceedings; and
4. mistakenly shifted the burden of proof to the party seeking deferral. 

Lastly, the NLRB held that the Spielberg/Olin standard would apply retroactively and, in applying that standard, dismissed Atkinson’s complaint. United Parcel Service, Inc. and Robert C. Atkinson, Jr., Case 06-CA-143062, 369 NLRB No. 1, (December 23, 2019).

Practice Points

With United States Parcel Service, Inc. the NLRB returned to its traditional, deferral-friendly standard for deciding whether to defer to an arbitrator’s prior resolution of a grievance concerning an employee’s discipline or discharge that has been alleged to violate the NLRA. Under this standard, the NLRB will defer to the arbitrator’s decision where:

1. the arbitral proceedings appear to have been fair and regular;
2. all parties have agreed to be bound;
3. the arbitrator considered the unfair labor practice issue; and
4. the arbitrator’s decision is not clearly repugnant to the NLRA.

The burden to show that these standards have not been met rests on the party opposing deferral.