Labor News & Commentary December 15, National Labor Relations Board limits employers' ability to make unilateral changes

https://onlabor.org/december-15-2024/

By Gilbert Placeres, is a student at Harvard Law School.

In today’s News & Commentary, the National Labor Relations Board limits employers’ ability to make unilateral changes to employment and Klarna announces it has mostly stopped hiring employees and instead increasingly relied on artificial intelligence.

In their recent Endurance Environmental Solutions, LLC decision, the National Labor Relations Board limited employers’ ability to make changes to job requirements and working conditions without first giving notice and an opportunity to bargain to a union. The Board overturned a precedent from the first Trump administration which adopted the “contract coverage” standard, meaning an employer could change anything not in the plain language of a collective bargaining agreement. The Board instead returned to its longstanding “clear and unmistakeable waiver” standard, meaning an employer can only make unilateral changes on issues the union specifically waived its right to bargain over. NLRB Chairman Lauren McFerran stated this “better serves the pro-bargaining policy” of the National Labor Relations Act. The case involved an employer’s decision to install security cameras on the trucks of its trash transporters without bargaining with their union.

The Chief Executive Officer for Klarna Group, a financial technology company that provides payment processing services for e-commerce, announced that the firm stopped hiring a year ago and has instead invested in artificial intelligence, which is now doing the work of hundreds of staff across the firm. Their headcount has fallen 22% and the company now has about 200 people using AI for their core work. CEO Sebastian Siemiatkowski said he has gotten employees on board by promising they will receive portions of the productivity gains reaped from AI in their paychecks. “People internally at Klarna are just rallying to deploy as much efficiency AI as they can,” Siemiatkowski said. “We’re going to give some of the improvements that the efficiency that AI provides by increasing the pace at which the salaries of our employees increases.” Siemiatkowski also said he believes “AI can already do all of the jobs that we as humans do” and had an AI version of himself present the company’s financial results to attempt to prove that point. However, contrary to Siemiatkowski’s comments, some hiring is still taking place, which one spokesperson described as “backfilling some essential roles, predominantly engineering.”