Certain managerial decisions, such as subcontracting, relocation and other operational changes, may not be mandatory subjects of bargaining even though they affect employees’ job security and working conditions. The issue of whether these decisions are mandatory subjects of bargaining depends on the employer’s reasons for taking action. Even if the employer is not required to bargain about the decision itself, it must bargain about the decision’s effects on unit employees. This is a particularly complex issue of labor law. Employer should consult with legal counsel.

On “nonmandatory” subjects, matters that are lawful but not related to “wages, hours and other conditions of employment,” the parties are free to bargain and to agree, but neither party may insist on bargaining on such subjects to the point of impasse or as a condition to reaching an ultimate contract.

Collective bargaining agreements often contain clauses reserving employers’ rights to take certain unilateral actions without bargaining, often referred to as management-rights clauses. In some instances, however, the employers and unions get into disputes over whether an employer’s unilateral action falls under the scope of the management-rights reserved within the agreement or whether it requires the employer to bargain.

When these disputes arise, the NLRB looks at precise wording of the relevant contract provisions to determine whether the agreement contains a clear and unmistakable waiver of the right to bargain over the specific issue in dispute. If it doesn’t, then the employer has an obligation to bargain with the union over the change.

In one recent case, an employer that used trucks to haul waste and other materials to landfills relied on its management-rights clause language reserving the right to “implement changes in equipment” to unilaterally install camera systems in its fleet of trucks to monitor driver safety. The NLRB determined that the management-rights language doesn’t refer in any way to video or audio monitoring or surveillance of employees and found no evidence in the bargaining history suggesting the union waived its right to bargain on the issue.1

Waiver of State Employment Rights

The Ninth Circuit Court of Appeals ruled that a unionized employer cannot use its collective bargaining agreement (CBA) as an excuse for failing to meet state employment law requirements. The only exception occurs where state law permits waiving those requirements and the waiver is described in clear and unmistakable language in the CBA.

When employees filed a lawsuit claiming that they were denied meal and rest breaks mandated by the California Labor Code, the employer argued that the right to meal and rest breaks is negotiable and can be waived by a CBA. The employer relied on the principle that federal labor law governing collective bargaining generally trumps state employment regulation of union contracts. The court disagreed, ruling that meal and rest breaks are an unconditional, nonnegotiable right provided by state law for the benefit of individual employees.2

There are many California laws that expressly exempt employees covered under a valid Collective Bargaining Agreement. For example, California Labor Code Section 512 excepts certain limited categories of employees (i.e., construction, commercial driver, security services, or utility employees) from California’s meal period requirements if the following conditions are satisfied: (1) the employee is covered by a valid collective bargaining agreement; and (2) the valid collective bargaining agreement expressly provides for the wages, hours of work, and working conditions of employees, including provisions for meal periods, final and binding arbitration of disputes concerning application of its meal period provisions, premium wage rates for all overtime hours worked, and a regular hourly rate of pay of not less than 30 percent more than the state minimum wage rate.3

In addition, Labor Code Section 514 and some California Wage Orders contain a similar exemption for overtime for certain employees covered by a valid collective bargaining agreement if the agreement expressly provides for the wages, hours of work, and working conditions, and if the agreement provides premium wage rates for all overtime hours worked and a regular hourly rate of pay for those employees of not less than 30 percent more than the state minimum wage.

• Employers should proceed with caution concerning Collective Bargaining Agreement exemptions and consult with legal counsel before exempting certain employees from California’s legal requirements.

1. E ndurance Environmental Solutions, LLC, 373 NLRB No. 141 (2024)