Under the National Labor Relations Act, an employer is not permitted to bypass a union and deal directly with employees in connection with their terms and conditions of employment. This direct dealing concept can become complicated, however, when an individual employee asserts a legal proceeding against the employer in which the employee’s union is not a participant and is not involved in settlement negotiations.

Recently, the National Labor Relations Board’s Office of the General Counsel, Division of Advice, encountered this factual scenario in American Water Service Co., 15-CA-086838 (Div. of Advice, Apr. 30, 2013). In this case, an employee suffered a workplace injury and retained an attorney to seek worker’s compensation benefits. Over three years later, with the worker’s compensation action still pending, the employer discharged the employee. The employee’s union grieved the employee’s discharge. A month later, the employee settled the worker’s compensation claim with the employer, and as a term of the settlement, the employee signed a general release which forfeited her right to assert a claim against the employer in connection with her separation. The employer’s representative who typically handled union grievances was unaware of the worker’s compensation settlement and the employer’s worker’s compensation agent was unaware of the union’s grievance.

The Division of Advice preliminarily noted that the Act “requires an employer to attempt to afford the union notice and an opportunity to be present for settlement discussions regarding individual employee claims…, where the employer’s proposed settlement would effectively resolve the union’s grievance over the employee’s discharge.” Based on this standard, the Division of Advice found that the employer engaged in direct dealing, because, although the employer inadvertently failed to apprise the union of the settlement agreement, “the agreement on its face effectively settled the [employee’s] discharge allegation by precluding her from pursuing [sic] any claim arising from her employment.”

Ultimately, however, the Division of Advice recommended the Region dismiss the charge because the employer assured it would permit the union to arbitrate the employee’s grievance provided the union did not seek reinstatement or monetary considerations. Alternatively, the employer agreed to permit the employee to rescind the agreement so the union could seek a reinstatement and/or monetary remedy in arbitration.

This case demonstrates that employers must be mindful of their obligations to provide an employee’s union the chance to be present for settlement negotiations in connection with an individual employee’s lawsuit or administrative proceeding or else risk an unfair labor practice charge asserting unlawful direct dealing. In addition, this guidance highlights the importance of ensuring there is open communication between an employer’s various attorneys/agents who may be representing the employer in more than one forum with respect to the same employee.

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Photo of Howard M. Bloom Howard M. Bloom

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues.

Howard M. Bloom is a Principal in the Boston, Massachusetts, office of Jackson Lewis P.C. He has practiced labor and employment law representing exclusively employers for more than 36 years.

Mr. Bloom counsels clients in a variety of industries on labor law issues. He trains and advises executives, managers and supervisors on union awareness and positive employee relations, and assists employers in connection with union card-signing efforts, traditional union representation and corporate campaigns, and union decertification campaigns. He also represents clients at the National Labor Relations Board in connection with bargaining unit issues, objections and challenges, as well as unfair labor practice investigations and trials. Mr. Bloom also has been the spokesperson at countless first and successor contract collective bargaining negotiations, and regularly advises on collective bargaining agreement administration issues, including grievance/arbitration issues.

Mr. Bloom has appeared before the Massachusetts Supreme Judicial Court, the U.S. Court of Appeals for the District of Columbia, several U.S. District Courts, the National Labor Relations Board, the Massachusetts Labor Relations Commission, the Equal Employment Opportunity Commission and the Massachusetts Commission Against Discrimination.

Mr. Bloom speaks frequently to employer groups on a wide range of labor and employment law topics. He also has written extensively on labor and employment law for a variety of publications, including New England Business magazine, The Boston Globe and the Boston Business Journal. He also is editor of and a frequent contributor to the Jackson Lewis Labor & Collective Bargaining Blog.

While attending law school, he was the Executive Editor of The Advocate: the Suffolk University Law School Journal and President of the Student Bar Association.

Mr. Bloom is a diehard baseball fan. His first book, The Baseball Uncyclopedia: A Highly Opinionated Myth-Busting Guide to the Great American Game, was published in February 2006.

Photo of Daniel D. Schudroff Daniel D. Schudroff

Daniel D. Schudroff is an Associate in the New York City office of Jackson Lewis P.C.. His practice is focused on traditional labor matters, employment litigation, and counseling. Mr. Schudroff represents clients in both federal and state courts, as well as before administrative…

Daniel D. Schudroff is an Associate in the New York City office of Jackson Lewis P.C.. His practice is focused on traditional labor matters, employment litigation, and counseling. Mr. Schudroff represents clients in both federal and state courts, as well as before administrative agencies including the National Labor Relations Board, New York State Public Employment Relations Board, Equal Employment Opportunity Commission, New York State Division of Human Rights, New York City Commission on Human Rights, and New York State Department of Labor. Mr. Schudroff also advocates on behalf of employers at arbitration hearings and during collective bargaining negotiations. In addition, Mr. Schudroff regularly advises unionized and non-unionized clients with respect to a wide array of issues arising under the National Labor Relations Act and Labor Management Reporting and Disclosure Act. Mr. Schudroff also regularly counsels employers affected by the Fair Labor Standards Act, Railway Labor Act, Worker Adjustment and Retraining Notification Act, Uniformed Services Employment and Reemployment Rights Act, New York Labor Law, and Taylor Law.