Opinion ID: 723909
Heading Depth: 2
Heading Rank: 2

Heading: The Management's Rights Clause

Text: 16 Article 11 of the CBA provides in pertinent part: 17 It is also solely the responsibility of Management to determine and to redetermine the organization of the ... Division including but not limited to its location, relocation, types of operation; and to determine the methods, processes and materials to be employed; to discontinue in whole or in part processes or operations or to discontinue their performance by employees of the ... Division or of the Company; to transfer either within or without the Company any work, technology, equipment or process. 18 The Board concluded that the Management's Rights clause does not permit a change in the number of progression units because it does not specify that it applies to progression units, because there is a reasonable reading of the provision by which it does not apply to progression units, and because there [is no] evidence that in negotiating the 1993-'96 agreement the parties intended the provision to apply to progression units. 19 Conoco rejects this reasoning and reminds us of the ALJ's dual findings--to which the parties raised no objection--that (1) progression units are aligned with operating divisions, and (2) the Company can unilaterally rearrange the operating divisions. It follows, according to Conoco, that the right to change progression units is embraced within the right to change divisions. 20 In Postal Service, we relied upon a similar management rights clause to permit the employer unilaterally to change the work schedule and reduce the hours of certain employees. We acknowledged that the clause did not expressly relate to work hours; still, we stated: 21 [I]t is naive to assume that bargaining parties anticipate every hypothetical grievance and purport to address it in their contract. Rather, a collective bargaining agreement establishes principles to govern a myriad of fact patterns. 22 In the case before us, it is clear that service reductions are within the compass of Article 3 [the management rights clause]. That provision grants the Postal Service the exclusive right To transfer and assign employees, and To determine the methods, means and personnel by which [its] operations are to be conducted. Article 3 also gives the Postal Service the more general right To maintain the efficiency of the operations entrusted to it. These rights surely permit an employer unilaterally to rearrange its employees' work schedules. 23 8 F.3d at 838. Conoco contends that the Management's Rights clause in its CBA is comparable in generality and scope to the clause in Postal Service; just as work hours are not mentioned but are nonetheless encompassed by the Postal Service clause, so also is the number of progression units implicitly covered by the Conoco clause. 24 The Board calls our attention to International Union, United Auto., Aerospace and Agr. Implement Workers v. NLRB, 765 F.2d 175 (1985) (UAW), where we suggested that a specific provision in a CBA will control over a generalized provision in a management rights clause. In that case, the employer advised the union that a part of the company's operations might be relocated unless the union agreed to wage concessions; when the union rejected the concessions, the company announced its decision to relocate. Even though the contract contained a broad management rights clause, id. at 182 n. 24, we concluded that section 8(d) limitations on midterm modifications apply and, therefore, the union need not consent to the wage reductions, id. at 181. Unlike Postal Service where the reduction in work hours did not violate the express terms of the CBA, the wage decreases in UAW would have contravened a specific provision of the contract. That difference, says the Board, accounts for the court's willingness to apply the generalized management rights clause in Postal Service but not in UAW, and because the CBA in Conoco explicitly prescribes the number of progression units, the holding of UAW governs--i.e., the specific contract term overridesthe more general management rights clause. 25 Our reading of UAW differs from the Board's. To be sure, we declined to apply the management rights clause in that case to allow the company unilaterally to reduce wages, but that is because the terms of the clause had nothing whatever to do with wages. The management rights clause in UAW gave the company the exclusive right to manage the plant and business and direct the working forces. Id. at 182 n. 24. More specifically, the company had the right 26 to plan, direct and control operations, to determine the operations or services to be performed in or at the plant or by the employees of the Company, to establish and maintain production and quality standards, to schedule the working hours, to hire, promote, demote, and transfer, to suspend, discipline or discharge for just cause or to relieve employees because of lack of work or for other legitimate reasons, to introduce new and improved methods, materials or facilities, or to change existing methods, materials or facilities. 27 Id. Nothing in that clause remotely suggests the right to alter wage levels. 28 In stark contrast, we did invoke the management rights clause in UAW for the proposition that the company could unilaterally relocate its plant when the union rejected the proposed wage concessions; indeed, the union conceded the company's contractual right to make that decision. Id. at 181-82. The right to relocate is implicit throughout the clause, even if not enumerated in any of its express provisions. Moreover, we applied the management rights clause despite finding that the issue of relocation was contained in the contract, thereby triggering the requirements of § 8(d). Id. at 181. [I]n light of the breadth of the management rights clause, id. at 182, its general provisions trumped. That relocation was deemed to be contained in the contract was no obstacle. 29 By this analysis, the key question in Conoco is whether the Management's Rights clause can reasonably be interpreted to permit the Company's decision to increase the number of progression units. We hold that it can--at least when such change is accompanied by a realignment of operating divisions. Among the express authorizations in the clause, Conoco has the right to (a) determine the organization of the divisions, including types of operation; (b) discontinue processes or operations, or their performance by certain employees; and (c) transfer within or without the Company any work, technology, equipment, or process. It is difficult to imagine that these provisions would not encompass the right to increase the number of progression units--a number that traditionally has changed whenever the Company rearranges its divisions. 30 Where the employer acts, as here, pursuant to a contractual claim of right, the resolution of a refusal to bargain charge rests on an interpretation of the CBA. Postal Serv., 8 F.3d at 837. A party may exercise its right to bargain about a particular subject by negotiating for a provision in a [CBA] that fixes the parties' rights and forecloses further mandatory bargaining as to that subject. IBEW, 927 F.2d at 640. That is what occurred here; in negotiating the Management's Rights clause, the Union has already bargained over, and consented to, a change in the number of progression units associated with a restructuring of the Company's operating divisions.