On December 10, 2024, the National Labor Relations Board (NLRB or “the Board”) took advantage of its Democratic majority in the waning days of the Biden administration to issue its decision in Endurance Environmental Solutions, LLC, and overturn a Trump-era standard that had strengthened management rights clauses in collective bargaining agreements.

In Endurance Environmental Solutions, the employer installed cameras in its entire fleet of 400 trucks without bargaining with the union that represented its drivers. Installation of security cameras is a mandatory subject of bargaining, and employers typically must bargain over the installation. In this case, however, the management rights clause in the collective bargaining agreement with the union allowed the company to “implement changes in equipment.”  The Company relied on this management rights language in deciding unilaterally to install the security cameras.

The union challenged the employer’s actions by filing an unfair labor practice charge with the NLRB. An administrative law judge (ALJ), at first, agreed with the Company and its reliance on MV Transportation, Inc., 368 NLRB No. 66 (2019). Under MV Transportation, Inc., the Board applies the “contract coverage” test and examines the plain language of the parties’ contract to determine whether the employer’s actions fell “within the compass or scope” of the contract, such that the employer had the “right to act unilaterally.” If so, the change would not violate the National Labor Relations Act (NLRA). The ALJ found that the installation of the security cameras was “covered” by the management rights language granting the Company the right to “implement changes in equipment,” and thus, that the Company did not act improperly in unilaterally installing the cameras.

On appeal, the NLRB overruled MV Transportation and reversed the ALJ’s decision in favor of the Company. In place of the contract coverage test, the Board returned to the “clear and unmistakable waiver” standard, which the Board had applied prior to MV Transportation. This standard requires employers to show a union had given a “clear and unmistakable waiver” of its rights to bargain over an issue as part of the collective bargaining agreement—for instance, contract language that explicitly gives the employer the right to install security cameras, which was not present in the agreement. This is a heightened standard that makes it significantly more difficult for employers to make changes to working conditions solely relying on general management rights contract language. Employers will now need more explicit contract language that authorizes the type of unilateral change they wish to implement or to bargain the changes with the union. Indeed, Democratic Board Chairperson Lauren McFerran (who joined the majority) later remarked, “Returning to the clear and unmistakable waiver standard better serves the pro-bargaining policy of the [NLRA].”

As with other hot-button NLRA issues (such as joint employment), the final chapter of this story may not yet have been written. With the Senate’s refusal earlier this month to approve another term for Chairman McFerran, Republicans may regain control of the Board shortly after the new Trump administration takes over in January, opening up the possibility of a future Board decision reestablishing the MV Transportation standard. Furthermore, the Company could still appeal the decision, and the “clear and unmistakable waiver” standard has proved unpopular with federal appellate courts. In fact, the U.S. Court of Appeals for the D.C. Circuit, which can hear appeals from the NLRB in cases from across the country, as well as the First and Seventh Circuits, have already rejected the Board’s “clear and unmistakable waiver” standard. Thus, more developments in this area of traditional labor law are likely to come.