NLRB ALJ Rules That An Interim Grievance Procedure Does Not Require An Arbitration Option

June 17, 2014

In a decision issued last week, an Administrative Law Judge (“ALJ”) for the National Labor Relations Board (“NLRB”) ruled that an interim grievance procedure between an employer and a newly-certified union did not have to include an arbitration option in order to relieve the employer of the obligation to provide the union with notice and an opportunity to bargain before imposing significant discretionary discipline. As we previously posted, in late 2012, the NLRB issued a groundbreaking decision in Alan Ritchey, Inc., requiring for the first time that in the absence of a binding agreement addressing discipline, an employer must provide the union with a bargaining opportunity prior to issuance of significant discretionary discipline (i.e., suspension, demotion, or discharge). This issue would ordinarily arise during the period after a union is newly certified, but before an agreement has been reached with the employer on an initial contract. The Alan Ritchey decision did not specifically address whether an interim grievance procedure had to offer an arbitration option if internal grievance efforts failed to resolve any disagreement over the proposed discipline. There was no binding agreement between the employer and the union in the Alan Ritchey case and, recognizing the significant change in the law that the decision entailed, the NLRB decided to apply the new requirement on a prospective basis only. In Medic Ambulance Service, ALJ Cracraft found that an interim grievance procedure did not require an arbitration option to satisfy the Alan Ritchey requirements. In Medic Ambulance, while negotiations for an initial collective bargaining agreement were underway, the employer and the newly certified union agreed to follow the first two steps set forth in the grievance/arbitration section of the employer’s expired agreement with a prior union. The parties also expressly agreed, however, that the third step (arbitration) would not be available until a new contract was signed. ALJ Cracraft found that the agreement regarding the first two grievance steps constituted an agreed-upon interim grievance procedure that relieved the employer of its obligation to bargain with the union prior to imposing significant discretionary discipline. The General Counsel for the NLRB contended that the procedure did not satisfy the Alan Ritchey requirements because it did not include an arbitration option, but ALJ Cracraft summarily rejected that argument:

Surely if the Board intended to mandate arbitration as a part of an interim grievance procedure, its decision would have clearly provided such guidance. Thus, in disagreement with the General Counsel, I find that Alan Ritchey does not specifically require that an interim grievance procedure contain an arbitration component.

Having concluded that arbitration was not a required element of an interim grievance procedure, the ALJ held that the two-step “grievance only” procedure was sufficient to relieve the employer of its obligation to provide the union with notice and an opportunity to bargain before it terminated several employees. The ALJ's Medic Ambulance decision offers a welcome constraint to the far-reaching scope of the NLRB's Alan Ritchey decision. Employers should be cautioned, however, that the ALJ's decision is not binding precedent and the union may still pursue an appeal to the NLRB.

Overview