Opinion ID: 4529815
Heading Depth: 4
Heading Rank: 1

Heading: Wages and benefits proposals

Text: Determining wages is of utmost importance in the bargaining process. Liquor Indus. Bargaining Grp., 333 N.L.R.B. at 1221. An employer’s demand for unilateral control over wages while refusing to provide any governing standard or guidance for how compensation will be set can 18 IATSE LOCAL 15 V. NLRB indicate bad faith. See id. at 1220–21; Marina Assocs., 296 N.L.R.B. 1116, 1130–33 (1989). In Liquor Industry Bargaining Group, the employer’s final proposal eliminated the employees’ ability to contest the amount of wages or how the employer set wages. 333 N.L.R.B. at 1219–21. The proposal also allowed the employer to redirect sales away from union sales representatives, which would effectively reduce their wages. Id. Despite repeated requests from the union for information about how the employer intended to set compensation, the employer “stubbornly refused to offer any details, saying only that it needed ‘flexibility’ in it[s] operations.” Id. at 1221. The NLRB held that the employer’s “offer was extreme in nature . . . and evidence[d] that the [employer] was not negotiating in good faith with a view to [sic] trying to reach or complete agreement with the Union.” Id. Likewise, in Marina Associates, the employer’s proposal gave the union “no role in determining wages.” 296 N.L.R.B. at 1130. The employer proposed a tiered wage structure with minimums and maximums for each tier and a review process for wage increases, but it refused to specify the minimum or maximum rates—despite repeated requests from the union—or to define any guidelines for when increases would be granted because that was “left to the sole discretion of the [employer].” Id. Additionally, wage decisions were exempted from the employer’s grievance and arbitration process. Id. Under these circumstances, the NLRB held the employer’s wage proposal evidenced its bad faith because it sought to “retain unilateral control over all aspects of wages and thus effectively removed wages as a negotiable issue not only at the bargaining table but also for the term of any bargaining agreement.” Id. at 1133. IATSE LOCAL 15 V. NLRB 19 Here, we agree with the NLRB that PSAV’s wage proposal is distinguishable from those the employers presented in Liquor Industry Bargaining Group and Marina Associates. PSAV specified a starting pay range for new employees with an opportunity for merit increases and guaranteed that existing employees would not have their wages reduced under the newly proposed wage structure. PSAV also explained that it would set a new employee’s compensation based on the “employee’s qualifications and skills” and that it would set merit increases “based on employee performance as determined by the employee’s yearly performance appraisal.” PSAV also provided its performance-appraisal scale and the corresponding raise percentages. Thus, unlike in Liquor Industry Bargaining Group and Marina Associates, PSAV did not hide the ball regarding how it would set employee compensation or what rates it would pay. It is undisputed that PSAV’s wage proposals remained unchanged throughout the bargaining process. But Local 15 also took a rigid stance on wages, consistently demanding substantial increases. Even though Local 15 lowered its initial rate proposal by $2 per hour, as the NLRB noted, this reduced rate still constituted a 64- to 106-percent increase from the status quo. Local 15 based its proposed significant wage increases for the employees in Washington in part on PSAV’s California union contracts, but PSAV explained that the employees in the two markets work under materially different circumstances regarding the consistency of work they receive. See Apogee Retail, NY, LLC, 363 N.L.R.B. No. 122, 2016 WL 683211, at  n.3 (Feb. 17, 2016) (explaining that good faith bargaining requires parties to justify or explain their positions). That PSAV never changed its wage 20 IATSE LOCAL 15 V. NLRB proposal does not itself establish that it acted in bad faith. See St. George Warehouse, 349 N.L.R.B. 870, 872 (2007) (“[A] party is entitled to stand firm on a position if he reasonably believes that it is fair and proper or that he has sufficient bargaining strength to force the other party to agree.”). PSAV’s explanation for rejecting the Union’s wage proposal is not facially unreasonable or disingenuous. And in the context of the parties’ negotiations, PSAV’s wage proposal is not the kind of “unrealistically harsh or extreme proposal[]” that itself evidences bad faith. Liquor Indus. Bargaining Grp., 333 N.L.R.B. at 1220. Moreover, as the NLRB found, PSAV’s bargaining conduct does not indicate that it took an all-or-nothing stance on wages and refused to negotiate this issue with Local 15. Instead, the negotiations thus far demonstrate that the parties have divergent views on the appropriate business model and wage rates for the Washington market, which is not something we or the NLRB have the authority to regulate. See Ins. Agents’ Int’1 Union, 361 U.S. at 488; 29 U.S.C. § 158(d). Local 15 also claims that PSAV demanded exclusive control over employee benefits. Specifically, Local 15 contends it was bad faith for PSAV to insist on aligning bargaining unit employees’ benefits with the benefits provided to non-unit employees. PSAV’s proposal lacks the hallmarks of exerting total control over employee benefits. Cf. Pub. Serv. Co. of Okla., 334 N.L.R.B. at 488 (employer’s final proposal denied the union any role in establishing or maintaining employee benefits by, among other things, permitting the employer to “chang[e] from time to time for business reasons important employee benefits such as vacation days, holidays, medical insurance, leave time, and life, disability, and on-the-job accident insurance”) (internal quotation marks omitted). PSAV specified the accrual rates for vacation time and paid sick and safe time. For all other IATSE LOCAL 15 V. NLRB 21 benefits (retirement savings, disability plan, life insurance, etc.), PSAV proposed that unit employees would be granted the same benefits offered to non-unit employees. PSAV’s counterproposal differed from Local 15’s benefit proposal, but there is no indication that Local 15 materially challenged PSAV’s position in subsequent bargaining sessions or communications. Instead, Local 15 claims that PSAV refused to bargain over benefits in the August 2016 session where Shankman claimed the wage proposals would be suicide for PSAV. On this record, we cannot conclude that PSAV’s position on benefits is evidence of bad faith either by itself or in conjunction with its overall bargaining posture. For these reasons, we find that substantial evidence supports the NLRB’s conclusion that PSAV’s wages and benefits proposals did not indicate bad faith; instead, both parties were “engaged in hard bargaining.” Audio Visual Servs. Grp., Inc., 2019 WL 1198973, at .