NLRB Changes Standard for Deferral to Arbitration in Discrimination and Retaliation Cases

In a significant recent decision, the National Labor Relations Board (NLRB or Board) again abandoned long-standing, accepted Board precedent. In Babcock & Wilcox Construction Co., 361 NLRB No. 132 (Dec. 15, 2014), the Board changed its standard for deferral to arbitration awards, grievance/arbitration proceedings and pre-arbitration grievance settlements in cases where it is alleged that employees suffered retaliation or reprisal for engaging in union and/or protected concerted activity in violation of Section 8(a)(3) and (1) of the National Labor Relations Act (Act).1 Agreeing with the Board’s General Counsel (GC) that the existing deferral standard for arbitration awards in the Board’s 1984 decision in Olin Corp. “does not adequately balance the protection of employees’ rights under the Act and the national policy of encouraging arbitration of disputes arising over the application or interpretation of a collective-bargaining agreement,” the Board ruled that, going forward, employers urging deferral to an arbitration award have the burden of showing that the “statutory issue” was presented to the arbitrator, that the arbitrator considered the statutory issue and that Board law “reasonably permits” the award. The Board also changed the standards for pre-arbitration deferral and deferral to pre-arbitration settlements to be consistent with the change to the arbitration award standard.