However, an employer’s good faith is not at issue when its conduct constitutes an out-and-out refusal to bargain on a mandatory subject. Some examples:

• An employer may not refuse to meet with the employees’ representative because the employees are out on strike.
• An employer may not insist, until bargaining negotiations break down, on a contract provision that all employees will be polled by secret ballot before the union calls a strike.
• An employer may not fail to bargain about the effects of a decision to close one of the employer’s facilities.
• An employer may not dictate to a union its selection of agents or representatives and the employer must, in general, recognize the designated agent. The duty of an employer to meet and confer with the representative of its employees generally includes the duty to deal with whomever is designated by the employees’ representative to carry on negotiations.
• An employer may not refuse to supply, upon request, information that is “relevant and necessary” to allow the employees’ representative to bargain intelligently and effectively with respect to wages, hours and other conditions of employment. Refusing to supply cost and other data concerning a group insurance plan covering the employees is also a violation of the duty to bargain.
• An employer normally may not make unilateral changes to material terms and conditions of employment without consulting the employees’ representative (i.e., announcing a wage increase without consulting the employees’ representative is a violation).

In 2023, the Board issued two decisions1 regarding the statutory duty of employers to bargain with unions prior to changing terms and conditions of work. These decisions overrule 2017 and 2019 decisions2 that permitted employers to make unilateral changes if such changes were “similar in kind and degree” to an employer’s past practice during negotiation of an initial agreement or under an expired collective bargaining agreement. Both decisions will be applied retroactively to all pending cases.

First, in Wendt Corp., the Board majority held that the 2017 Raytheon decision conflicted with a 1962 U.S. Supreme Court case, NLRB v. Katz,3 which held that employers cannot unilaterally make changes involving “a large measure of discretion,” and overruled Raytheon ’s “kind and degree test.” The Board majority also explained that in its view, giving employers latitude to make discretionary unilateral changes based on past practice undermined the pro-bargaining policies of the Act.

Going forward, based on language in Wendt, employers will now have to show that any changes essentially were automatic and fixed by an established formula or ratio or other nondiscretionary standards and guidelines. Employers will no longer be able to rely on their prior reservations of discretion or past practices that are not essentially formulaic. The Board also explained that “the further the evidence adduced by an employer strays from showing an annualized or similar recurring event, the more unlikely it is that the employer has met its burden” of showing a past practice. This means employers will need to also show a routine cadence to support a change.

Finally, although not presented as a new holding, the Board in Wendt reaffirmed the “longstanding principle” that an employer may not defend a unilateral change in terms and conditions by citing a past practice of such changes before its employees were represented by a union, indicating that going forward, the Board will be skeptical of any past practice that existed pre-representation, further complicating the status quo analysis post-organizing.

In the second case, Tecnocap LLC, the Board overruled a different portion of Raytheon that Wendt did not address, related to past practice of unilateral changes developed under a management rights clause. The Board in Tecnocap held that an employer’s past practice of this nature does not authorize unilateral changes made after the collective bargaining agreement expires and while bargaining for a successor agreement is underway.

Multi-Employer Bargaining

When a history of bargaining exists between a union and a number of employers acting jointly, the employees represented constitute a multi-employer bargaining unit. After such a unit is established, any of the participating employers — or the union — may withdraw from this multi-employer bargaining relationship only by mutual assent or by a timely submitted withdrawal. Withdrawal is considered timely if unequivocal notice of the withdrawal is given near the termination of a CBA, but before bargaining begins on the next agreement.

Successor Employers

An employer that purchases or otherwise acquires the operations of another employer may be obligated to recognize and bargain with the union that represented the employees before the business was transferred. In general, these bargaining obligations exist — and the purchaser is termed a successor employer — when a substantial continuity in the employing enterprise exists despite the sale and transfer of the business.

Whether the purchaser is a successor employer depends on several factors, including the number of bargaining unit employees taken over by the purchasing employer, the similarity in operations and product of the two employers, the manner in which the purchaser integrates the purchased operations into its other operations and the character of the bargaining relationship and agreement between the union and the original employer.

California law requires a successor grocery employer to retain eligible workers for a 90-day transitional period and, upon completion of that period, requires the successor grocery employer to consider offering continued employment to those workers. The new law applies to retail stores in California that are more than 15,000 square feet in size and that sell primarily household foodstuffs for offsite consumption.

The law permits successor employers to establish new terms and conditions for the inherited employees, which may allow for an opportunity to renegotiate any existing union contracts. For more information, please see Layoffs and Plant Closings.

1. Tecnocap LLC, 372 NLRB No. 136 (Aug. 26, 2023) and Wendt Corporation, 372 NLRB No. 135 (Aug. 26, 2023)