Labor & Employment Law Daily Wrap Up, LABOR—BARGAINING—Neb. Sup.Ct.: Nebraska need not bargain over EO prohibiting remote work for state employees, (Apr 21, 2026)

By Ronald Miller, J.D.

The rationale for the contract coverage rule is that when a union and an employer enter into a CBA that covers an issue, the parties have already bargained over and settled that issue.

Applying the contract coverage rule, the Nebraska Supreme Court determined that Nebraska’s Commission of Industrial Relations (CIR) did not err in finding that the state lawfully refused a union’s demand to bargain over an executive order issued by the governor that prohibited executive branch employees from working remotely. Because the relevant provision in the parties’ collective bargaining agreement gave the state the authority to change the location where covered employees are expected to perform their work, the state was not obligated to accede to the union’s demands to bargain. However, the state high court reversed the CIR’s order awarding the state attorney fees and costs (Nebraska Association of Public Employees Local 61 of the American Federation of State, County, and Municipal Employees v. State of Nebraska, No. S-25-026 (Neb. Sup.Ct. Apr. 17, 2026)).

Executive order. In November 2023, the Nebraska governor entered an executive order (EO) that generally required state employees to work “in the office, facility, or field location assigned by their agency and not from a remote location.” The EO also pro­vided, however, that “[a]gency heads” could grant exceptions to individual employees in some circumstances.

A union representing many state employees demanded to bargain over the remote work executive order, asserting that remote work was a mandatory subject of bar­gaining. The state declined to bargain over the issue. It argued that the existing CBA permitted the implementation of the executive order regarding remote work and that the state was therefore not obligated to bargain over it.

CIR petition. The union responded by filing a petition with the CIR, alleging that the state had engaged in a prohibited labor practice by refusing to negotiate over a man­datory subject of bargaining.

The relevant provision of the CBA provided that the state had the “right to increase, reduce, change, modify and alter the composition and site of the work force.” The agreement provided that the state also retained the right “to adopt, modify, change, enforce, or discontinue any existing rules, regulations, procedures or policies.”

Evidence regarding the negotiation of the operative CBA revealed that the union had proposed a provision that would have allowed employees the right to request remote work assignments, but that the state was not willing to discuss the pro­posed remote work language.

The CIR dismissed the union’s prohibited practices petition, concluding that the state was not obligated to bargain over the remote work executive order because even if it was a mandatory subject of bargaining, the issue was “covered by” the existing collec­tive bargaining agreement. The CIR also found that the state was entitled to an award of attorney fees, concluding that the union could not have “reasonably or in good faith believed they would prevail by bringing this case” before the CIR. The union appealed.

On appeal to the Nebraska Supreme Court, the union argued (1) the CIR erred in finding that its prohibited practices petition lacked merit, and (2) the CIR erred in its award of attorney fees to the State.

Prohibited labor practice. As an initial matter, the state high court addressed the union’s contention that it proved the state engaged in a prohibited labor practice and that the CIR erred by finding otherwise.

The union demanded that the state enter negotiations regarding a mandatory topic of bargaining. The CIR did not decide this issue, relying instead on the “contract coverage rule,” and concluding that because the par­ties’ CBA covered the issues on which the union sought to bargain, the state had no obligation to bargain over those issues.

Contract coverage rule. The high court’s analysis considered whether that determination by the CIR was correct. In determining whether a public employer has commit­ted a prohibited labor practice by refusing a union’s demand to bargain, there is often this threshold question: whether the CBA already covers what would otherwise be a mandatory subject of bargaining. If a topic is covered by a CBA, then the parties have no further obligation to bargain over the issue.

The Nebraska Supreme Court adopted the contract coverage rule in Douglas Cty. Health Ctr. Sec. Union v. Douglas Cty., 284 Neb. 109, 117, 817 N.W.2d 250, 256 (2012), finding persuasive the rea­soning of federal circuit courts, particularly the U.S. Court of Appeals for the D.C. Circuit, that had adopted the rule in the context of federal labor law.

The rationale for the contract coverage rule is that when a union and an employer enter into a CBA that covers an issue, the parties have already bargained over and settled that issue. Therefore, they should not be forced back to the negotiating table to bargain over it again while the agreement is in effect.

The Nebraska Supreme Court found no merit to the union’s argument that the CIR erred when it determined that the contract coverage rule applied and that the state was not obligated to accede to the union’s demands to bargain. The relevant provision of the CBA provided that the state had the right to “increase, reduce, change, modify and alter the composition and site of the work force.” That provision gave the state the authority to change the location where covered employees are expected to perform their work. The executive order thus fell “within the compass” of the contractual provision.

Thus, the CIR did not err in concluding that the contract coverage rule applied and that the state had no obligation to accede to the union’s bargaining demand.

Award of attorney fees. Next, the high court turned to the union’s argument that the CIR erred in its award of attorney fees to the state. Specifically, the union argued that an award of attorney fees was not authorized in this case by either Rule 42 of the CIR or Section 25-824. The high court agreed with the union on this point.

Rule 42 of the CIR addresses pro­hibited practices petitions. The CIR concluded that it could order the union to pay attorney fees under Rule 42 because it found that it had engaged in “prohibited conduct” under that rule by pursuing its petition in bad faith.

Rule 42 per­mits the CIR to award attorney fees in a prohibited practices case as a remedy for “repetitive, egregious, or willful pro­hibited conduct by the opposing party.” The reference to “prohibited conduct by the opposing party” in this context refers to conduct of the party opposing the petition that is prohibited by labor law, not the litigation con­duct of the petitioner. Rule 42 did not authorize the award of attorney fees here.

Frivolous petition. The state argued that attorney fees could be awarded under Section 25-824(2) because the union’s prohibited practices peti­tion was frivolous. While the union’s petition lacked merit, the high court disagreed that it was so lacking in legal support as to be frivolous. The union could point to language in Douglas Cty. Health Ctr. Sec. Union and in Public Assn. of Govt. Empl. v. City of Lincoln, 24 Neb. App. 703, 896 N.W.2d 630 (2017), to support its argument that the contract coverage rule did not apply in the absence of language in the CBA setting forth the steps the state would follow if it changed its remote work policies. It was thus not frivolous for the union to contend that it had not waived the right to bargain over remote work.

Because neither Rule 42 of the CIR nor Section 25-824(2) authorized an award of attorney fees in this case, the CIR erred in its attorney fee award.

The case is No. S-25-026.

Judge: Papik, J.

Attorneys: Abby Osborn (Shiffermiller Law Office) and Richard Griffin (Bredhoff & Kaiser) for Nebraska Association of Public Employees Local 61 of the American Federation of State, County, and Municipal Employees. Michael T. Hilgers, Office of the Attorney General, for State of Nebraska.

Companies: Nebraska Association of Public Employees Local 61 of the American Federation of State, County, and Municipal Employees; State of Nebraska

Cases: StateLawClaims PublicEmployees Labor Bargaining ContractClaims AttorneysFees NebraskaNews GCNNews