Source: https://law.justia.com/cases/federal/appellate-courts/cadc/98-1599/98-1599a-2011-03-24.html
Timestamp: 2019-04-23 08:06:07+00:00

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James B. Coppess argued the cause for the Union petition- ers. With him on the briefs were Samuel C. McKnight, Duane F. Ice, John G. Adam, and Richard Rosenblatt.
Sharon I. Block, Attorney, National Labor Relations Board, argued the cause for respondent. With her on the brief were Leonard R. Page, General Counsel, Linda Sher, Associate General Counsel, Aileen A. Armstrong, Deputy Associate General Counsel, and Charles Donnelly, Superviso- ry Attorney. John D. Burgoyne, Deputy Associate General Counsel, entered an appearance.
James B. Coppess argued the cause for the Union interve- nors. With him on the brief were Samuel C. McKnight, Duane F. Ice, John G. Adam, and Barbara Camens.
Silberman, Circuit Judge: Two groups of petitioners chal- lenge National Labor Relations Board orders arising out of a strike against the Detroit newspapers. The employers chal- lenge those portions of the Board's orders determining that they committed unfair labor practices, see Detroit Newspaper Agency, 326 N.L.R.B. No. 64 (1998) (Detroit I), on reconsid- eration, 327 N.L.R.B. No. 146 (1999) (Detroit III), and that the strikers were unfair labor practice strikers, see Detroit Newspaper Agency, 326 N.L.R.B. No. 65 (1998) (Detroit II), while the unions object to the Board's determination that one employer's unilateral implementation of a change in work- assignment rules was lawful. The employers' petition for review is granted; the unions' is denied.
Each newspaper and DNA is responsible for its own labor negotiations. During bargaining in 1992, noneconomic issues were negotiated between DNA and each individual union, but economic issues were handled by DNA and the Council. Detroit I, 326 N.L.R.B. No. 64 at 34. When the 1992 agreements were about to expire (on April 30, 1995) and the parties began to discuss the next round of collective bargain- ing, DNA initially declined to accept the joint bargaining format, insisting instead on bargaining with each union sepa- rately. Agreements were eventually concluded with the skilled-trades unions, but negotiations on a unit basis with members of the Council ran past the 1992 agreements' expi- ration date, resulting in those agreements being extended day-by-day. See id. at 2, 34.
__________ 1 The Guild also represents DNA's janitorial employees and the Free Press's editorial employees.
to its June 30 deadline in subsequent communications with the Council and its member unions.) The Council then requested that DNA formally agree in writing to two-stage bargaining; DNA declined to do so but again expressed its tentative agreement if individual negotiations over non- economics could be finished by June 30. Negotiations be- tween DNA and individual unions went past this deadline and were halted by the strike on July 13. See id. at 2.
The News initially provided the Guild with a list of propos- als for its editorial employee unit including Proposal 7, "News Department employees who qualify as professionals within the meaning of Federal wage and hour laws may, at their option, apply annually to be salaried and exempt from over- time," Proposal 8, allowing the News to assign employees to radio and television projects, and Proposal 11, which stated "All future pay increases to bargaining unit employees will be on the basis of merit utilizing the Company's performance appraisal system." See id. at 60-61 (the "overtime exemp- tion," "radio/tv," and "merit pay" proposals, respectively). The radio/tv proposal came with some baggage. In Novem- ber 1994 the News implemented a similar proposal following a purported impasse with the Guild; an unfair labor practice charge was filed with the NLRB, which ruled in the union's favor on July 14, 1995. In the meantime, the News had introduced proposal 8.
At early bargaining sessions Guild negotiators expressed their opinion that the overtime exemption proposal was a subject upon which it was illegal to bargain and illegal to agree upon according to the Guild's legal advice, and until the News's unilateral implementation of this proposal on July 5 no counterproposal was ever made. Id. at 61. The Guild also stated with respect to merit pay that the performance ap- praisal system was a waste of time that it wanted to get rid of, and that it was concerned that merit pay decisions would be corrupted by race or gender discrimination. The News, on the other hand, was anxious to introduce merit pay and viewed it as a central issue. See id.
On April 25, the News provided the Guild with a more detailed merit pay proposal: unit members making the con- tract's minimum salary would receive at least a one percent salary increase, but a merit component would increase their pay by an average of four percent from the minimum. Salary increases for those making more than the minimum would be based solely on merit. At this meeting Guild negotiators asked numerous questions, but News negotiators admitted that specific details had yet to be considered. See id. at 62.
ALJ found that they were uncertain whether the merit increases were to be based on the contractual minimum salaries or employees' actual salaries (typically higher). See Detroit I, 326 N.L.R.B. No. 64 at 63. At a meeting a week later, without inquiring into whether the new proposal was based on actual salaries or contract minimums, Guild negoti- ators reported that unit members were not at all interested in the merit proposal. The News rejected a Guild proposal of an across-the-board 15% pay increase. On several occasions after this meeting, the News characterized the Guild's treat- ment of the merit pay proposal that day as a rejection of the proposal. See id. at 62-63. At this meeting the Guild also reiterated its view that the overtime exemption proposal was illegal. See id. at 63.
In a flurry of letters at the end of May and beginning of June, the News informed the Guild that it thought negotia- tions over merit pay were deadlocked, and the Guild respond- ed that it disagreed; when the News asked if the Guild were prepared to offer counterproposals, the Guild stated that it would be prepared to respond to all the issues on the table, and a meeting was scheduled for June 14. At this time the News also sought to set a firm deadline of June 30 for the completion of negotiations. See id.
replied that it did not have a list of employees and was unable to compile one because eligibility could only be determined at the time of each employee's application. In response to post- implementation information requests, however, it supplied the Guild with a list of categories of employees who might be eligible. The union's proposal that the Labor Department become involved in the application process was rejected as merely retaliatory. See id. at 63.
I understood prior to the last meeting that you intended to bargain on pay and overtime. However, you made no proposals on these key subjects and I have never re- ceived any indication that you intend to bargain over them. Unless you can assure me that you intend to modify your position on those issues, we will have no choice but to implement our last offer to you. Id. at 64. No further meetings took place before the News's unilateral implementation of its proposals on July 5.
unrelated matter, the proposed meeting was not mentioned. See id. at 64-65.
Two days later, July 5, the News unilaterally implemented its proposals. In announcing implementation to employees the News stated that Guild negotiators had failed to appear at meetings and had refused to bargain. See id. at 65. At a post-implementation bargaining session on July 10 the Guild continued to ask questions about the proposals, making an- other request for a list of overtime-exemption eligible employ- ees (a request repeated on August 4). It also asked that the overtime-exemption provision contain a clause specifying that employees working on an overtime basis would not be dis- criminated against on assignments, proposed a flat increase in salaries for all employees, and again raised the possibility of having the Labor Department issue "advisory opinions" on the eligibility of employees for salaried status. Over this and the following day, the News answered some but not all of the Guild's questions about its proposals, and rejected all of the Guild's proposals.
Whereas the DNA/Detroit Newspapers (including the News and Free Press) has engaged in anti-union con- duct, negotiated in bad faith and reneged on its promise to bargain jointly on economics, the undersigned Unions hereby resolve their members employed at the DNA/ Detroit Newspapers each will strike and honor each other's strike in protest of the DNA/Detroit Newspapers [sic] (including the News and Free Press) anti-union conduct and unfair labor practices. Id. at 76. Testimony credited by the ALJ established that the unfair labor practices referred to in the resolution were the modification of DTU's jurisdiction (discussed next), imple- mentation of the merit pay proposal, and the decision by DNA not to engage in joint bargaining. See id.
The next day the unions began a strike which would last until February 1997 when the unions made an unconditional offer to return to work. The employers, however, refused to discharge replacement workers to make room for the re- turning strikers, treating the strike as an economic strike. Instead, returning strikers were placed onto a preferential hiring list. See Detroit II, 326 N.L.R.B. No. 65 at 2-3.
The unions' petition involves negotiations between DTU and DNA. Petitioner DTU's relationship with the newspa- pers and DNA is generally governed by collective bargaining agreements. In 1975, however, negotiations between the individual newspapers, on the one hand, and DTU on the other led to the parties entering into Memoranda of Agree- ment in addition to collective bargaining agreements; when DNA came into existence, it agreed to adopt the obligations those memoranda placed upon the newspapers. One Memo- randum of Agreement guaranteed essentially lifetime employ- ment to certain workers, and in exchange the unit was to be governed by a Section 10(a), entitled "work arrangements." In relevant part, Section 10(a) states "This section will de- scribe the work arrangements of the [DTU] employee involv- ing the use of scanners and VDT terminals when such equipment is performing composing room work within the jurisdiction of the Union." See Detroit I, 326 N.L.R.B. No. 64 at 47 (emphasis added). The section then goes on to describe under what circumstances only unit employees may use such equipment, and when non-unit employees may do so. See id. at 47-48.
isdiction," explaining, inter alia, that "all composing room work" was within the Union's jurisdiction. During negotia- tions over a successor bargaining agreement DNA proposed modifying these jurisdictional provisions by including in the new agreement language specifying that this jurisdiction would be non-exclusive: "Employees of other departments of [DNA] as well as employees of the Detroit News and Detroit Free Press may perform such work as is necessary." DTU, claiming that the ongoing Memorandum of Agreement--not the expiring collective bargaining agreement--defined its jur- isdiction, considered DNA's proposal an attempt to modify an existing agreement, and therefore only a permissive subject of bargaining. It refused to bargain, and on May 11 DNA declared impasse and implemented the proposal.
The unions filed unfair labor practice charges with the NLRB alleging that DNA and the newspapers had violated Sections 8(a)(5) and (1) of the National Labor Relations Act by breaching the two-stage bargaining agreement; by imple- menting the merit wage proposal and the radio/tv proposal; by abrogating DTU's jurisdiction; and by failing to provide a list of employees who would be eligible for overtime exemp- tion.
reasoning with respect to merit pay, concluding that the News had bargained in bad faith, preventing a good-faith impasse on this proposal. It then reasoned that even if the News had bargained in good faith, its merit pay proposal was standardless, and therefore, under the Board's rule an- nounced in McClatchy Newspapers Inc., 321 N.L.R.B. 1386 (1996), enforced, 131 F.3d 1026 (D.C. Cir. 1997) (McClatchy II), it could not be implemented even at impasse because it would be destructive of employees' collective bargaining rights.
An ALJ, meanwhile, had found that the employers unlaw- fully refused to rehire returning unfair labor practice strik- ers, relying on the earlier ALJ opinion as evidence of unfair labor practices. On the same day the underlying unfair labor practice findings were affirmed by the Board in Detroit I, it also affirmed the second ALJ opinion and ordered the rehir- ing of returning strikers. See generally Detroit II, 326 N.L.R.B. No. 65.
practice by making a unilateral midterm change to the ongo- ing Memorandum of Agreement.
enforced 922 F.2d 832 (3d Cir. 1990)). The employers do not generally challenge this procedural policy.
__________ 2 The employer's counsel at oral argument came perilously close to insisting that it would have to prevail on this issue to win the case.
"discretionary cloud." See McClatchy II, 131 F.3d at 1032. Under such circumstances, we noted on review, the employer had essentially "de-collectivized" bargaining and prevented the union from knowing what it would be bargaining against in the future; we therefore held this justified a Board-created exemption to the general rule that employers may implement their last, best offer following impasse. See id. at 1032-33.
Although we had previously in NLRB v. McClatchy News- papers, Inc, 964 F.2d 1153 (D.C. Cir. 1992) (McClatchy I), remanded for a fuller explanation of the contours of the Board's McClatchy doctrine, in McClatchy II we recognized the Board could legitimately proceed case-by-case to develop the boundaries of the doctrine. See 131 F.2d at 1035. That did not mean, however, that the Board could simply brandish McClatchy, without any real explanation, to prevent an em- ployer from ever implementing a merit pay proposal after impasse. After all, as we recognized in McClatchy I, the Supreme Court has squarely held that merit pay is a manda- tory subject of bargaining, see McClatchy I, 964 F.2d at 1162, citing NLRB v. Katz, 369 U.S. 736, 745 (1962), and if the Board is to treat it differently from other such subjects with respect to post-impasse implementation it must carefully jus- tify its course.
Purportedly without regard to McClatchy, the Board found that the News had bargained in bad faith regarding its merit pay proposal (and its overtime proposal discussed infra), and therefore it never reached a valid impasse justifying imposi- tion of its overall proposal. This is a difficult question on review only because the Board's finding of bad faith negotia- tion is, like any question of fact (really a mixed question), entitled to a good deal of deference. See NLRB v. Cau- thorne, 691 F.2d 1023, 1026 n.5 (D.C. Cir. 1982). We con- clude, nevertheless, that the Board's finding cannot stand because it is infected with the legal error we have just discussed, and it is otherwise not supported by substantial evidence on the record as a whole.
__________ 3 The intervenor unions stressed at oral argument post-impasse statements by the News that various unspecified factors, such as the need to retain particular employees, could enter into merit pay determinations. See, e.g., Detroit I, 326 NLRB No. 64 at 68. This possibility was not foreclosed by the News's proposal--it was part of its retained discretion.
4 As in McClatchy the Board throws in the phrase drawn from Great Dane that implementing the merit pay proposal after impasse was "inherently destructive" of collective bargaining. See NLRB v. Great Dane Trailers, Inc., 388 U.S. 26, 34 (1967). If that is meant to provide an alternative rationale for the holding it will not do.
5 It should be noted that the Guild's convention occupied only one week of this period.
been told that June 30 was the News's bargaining deadline. With the exception of a proposal for an across-the-board pay increase made on May 3 the Guild does not appear to have done anything at these negotiation sessions but ask questions. The truth of the matter, which the record clearly reveals, is that the Guild's unit was unalterably opposed to the merit pay proposal from the outset and continuing up to the employer's implementation--not to the details but to the very concept. There was no evidence that the Guild was prepared to engage in real negotiations on the employer's proposals.
The Board found that the News had "repeatedly obfuscated and withheld details about its merit pay proposal, which details were relevant and necessary to the Guild's under- standing of the proposal and to the formulation of a bargain- ing response." Detroit I, 326 N.L.R.B. No. 64 at 7. And the ALJ whose recommended findings the Board accepted deter- mined that the Guild could not gain an understanding of the merit pay proposal's "cost, timing, criteria and procedures," and therefore could not "bargain intelligently" about the proposal. See id. at 71-72. But the essence of discretion-- the News at one point characterized its merit pay determina- tions as "not rote," see id. at 66--implies that the employer will not be pinned down ex ante as to precisely how its discretion will be exercised. Management's decision to pro- pose a discretionary merit pay system--and to insist on retaining legitimate bounds of discretion--cannot (except for the limited McClatchy exception) be treated differently than other mandatory subjects of bargaining; it cannot be "ve- toed" by the Board. See NLRB v. Insurance Agents' Int'l Union, 361 U.S. 477, 487 (1960). The union's questions as to these criteria and procedures were obviously designed to narrow the zone of discretion the employer wished to pre- serve. That answers satisfactory to the union or the Board were not forthcoming is simply another way to say that the proposal carried insufficient details to pass the McClatchy test, and we have already rejected the Board's reasoning in that respect.
This seems to us to be a wholly insignificant bit of evidence. Once the News had sent its final merit pay proposal to the Guild its negotiator offered to meet with his Guild counter- part to explain it. The Guild negotiator responded, however, that he already understood it. Similarly, when the negoti- ators met a week later no clarification was sought on this point. The problem, according to the Guild, was that the News did not "understand" the employees' dislike of the very concept. The Guild was informed that actual salaries would be used at the June 14 meeting, a full three weeks before impasse was declared. We cannot see how this sequence of events hints at the News's bad faith, nor how the Guild's not knowing this particular detail until three weeks before im- passe hindered its ability to negotiate.
__________ 6 The Board regarded the News's statements to employees claim- ing that the Guild had refused to negotiate as evidence of bad faith.
The Board also regarded the News's proposed scheduling of bargaining sessions on dates in June when it purportedly knew the Guild to be unavailable because of a convention as showing bad faith. We think that inference is unsupportable. The Guild on June 16 requested a delay in negotiations because of unstated "prior commitments." The News's nego- tiator responded "I cannot imagine what 'prior commitments' you have that are more important than these negotiations," and requested a meeting "for the next few days," which would be during the convention. See Detroit I, 326 N.L.R.B. No. 64 at 64. The ALJ found that the News must have known that the prior commitment was the convention because postings on a bulletin board at the News had announced it, and because a News memo sent the following week to employees criticized Guild negotiators for attending the convention instead of negotiating. See id. What the News knew a week later is not powerful evidence of what it knew a week earlier--it may have discovered, in response to its request for a meeting, that the Guild's negotiators were all out of town.7 Even if the News's negotiator had known that which the union negoti- ators were apparently unwilling to say--the latter wished to attend the convention--the worst interpretation that could be placed on the employer's gambit is that it was seeking to pressure the union negotiators to either admit the reasons for wanting a delay or to offer an early negotiating session.
See Detroit I, 326 N.L.R.B. No. 64 at 7. Neither its order nor the ALJ's recommendation explain why and the employer complains that the Board was improperly restricting its free speech. Before us the Board apparently abandoned that line of analysis and instead claimed that the employers were communicating to the employees that which it refused to tell the union. We simply do not under- stand this attempted transformation and therefore decline to pay any attention to this point.
7 Nor was there any evidence that the News's negotiator had actually seen the bulletin board posting.
declaration of impasse and unilateral implementation. The ALJ's opinion emphasizes this event as infecting the entire negotiating process: the News, according to the ALJ, essen- tially prevented the Guild from meeting to engage in negotia- tions which might have broken the deadlock that seemingly developed at the June 14 meeting, after which the Guild's negotiators signaled their desire to engage in further negotia- tions. Again, we think this inference is unsupportable. It is obvious that lawyers on both sides were maneuvering and the News was delivering the Guild a last clear chance. But convention or not, holiday or not, if the Guild really had wished to bargain on merit pay they had plenty of time to indicate that to the News. Asking questions was not enough. Cf. Serramonte Oldsmobile, Inc. v. NLRB, 86 F.3d 227, 233 (D.C. Cir. 1996) (concluding impasse was valid where "not a single one of the Union's statements ... actually committed the Union to a new position or contained any specific propos- als").
The Board nevertheless asserts that the parties had not reached a good-faith impasse for another reason. The ALJ found that the unremedied unfair labor practice associated with the radio/tv proposal prevented the News from declaring impasse because it "necessarily tended to adversely affect the bargaining atmosphere and relationship between the parties," see Detroit I, 326 N.L.R.B. No. 64 at 72 (emphasis added), and the Board adopted this conclusion. See id. at 7 n. 17. Before us the Board apparently argues that only negotiations over the radio/tv proposal alone itself were affected, but that deadlock over this proposal was sufficient to prevent a good- faith impasse.
the unfair labor practice affected negotiations in this case, seem to have applied such a presumption. That is especially problematic here because the ALJ's account of negotiations suggests the radio/tv proposal was relatively unimportant compared to the merit pay and overtime exemption proposals; implementation of this proposal was not even mentioned by the ALJ in his discussion of strike causation. See Detroit I, 326 N.L.R.B. No. 64 at 77; see also Teamsters Local Union No. 639 v. NLRB, 924 F.2d 1078, 1083 (D.C. Cir. 1991) (to determine whether there is a valid impasse the Board "con- siders a number of factors, including ... the importance of the issue or issues as to which there is disagreement"). We therefore conclude there is not substantial evidence to sup- port the Board's determination that the unremedied unfair labor practice prevented the News from declaring impasse.
The Board's decision that the News committed an unfair labor practice by failing to respond to the Guild's overtime exemption information request rested on pure conjecture, and is therefore not supported by any--let alone substantial-- evidence. Throughout negotiations the Guild repeatedly re- quested a list of employees eligible to take salaried status under the overtime exemption proposal. The News repeated- ly responded that it could not compile such a list because it would not be able to determine eligibility until an employee actually applied. Instead, in response to post-implementation information requests it provided the Guild with a list of categories of employees who might be eligible.
the judge's doubts that [the News] would have made the proposal, and bargained so ardently for it, without some informed estimation of its effects. Even if the News did not possess a list of those employees whom it believed would qualify for exemption, the Guild was entitled to whatever information Respondent News did rely on. Id. at 8.
D. The Unions' Petition We agree with the NLRB that DNA did not commit an unfair labor practice by unilaterally implementing a change in its collective bargaining agreement with petitioner DTU. The Memorandum of Agreement only describes working ar- rangements when equipment is "performing composing room work within the jurisdiction of the Union." That jurisdiction was defined not in the Memorandum of Agreement, but in the collective bargaining agreement. Since the collective bar- gaining agreement had expired DNA could propose a modifi- cation to DTU's jurisdiction, and since DTU refused to bargain over the proposal DNA could declare impasse and unilaterally implement it. This is exactly what happened, and it does not constitute an unfair labor practice.
__________ 8 The News argues that even had it compiled a list of eligible employees, it was under no obligation to divulge it because the Guild persisted in labeling the overtime exemption proposal as illegal and refused to bargain over it. Because we do not think the Board had substantial evidence to support its finding that the News had a list of eligible employees, we need not reach this alternate argument.
tices which motivated the strike were DNA's decision not to engage in joint bargaining, its unilateral change of DTU's jurisdiction, and the News's unilateral implementation of mer- it pay and its failure to comply with information requests. See Detroit I, 326 N.L.R.B. No. 64 at 77; see also Detroit III, 327 N.L.R.B. No. 146 at 1. Having determined that the Board's conclusion that the News committed unfair labor practices is legally erroneous and unsupported by substantial evidence, we, of course, reverse its subsequent order holding the strikers to be unfair labor practice strikers. See Alwin, 192 F.3d at 141 (A strike is an unfair labor practice strike "if the employer's violations of the labor laws are a contributing cause of the strike.") (internal quotation marks and citation omitted).

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