Opinion ID: 187060
Heading Depth: 2
Heading Rank: 3

Heading: The McClatchy doctrine

Text: In McClatchy Newspapers, 299 N.L.R.B. 1045 (1990) ( McClatchy I ), the Board announced a new exception to the implementation-after-impasse rule, again in order to facilitate post-impasse bargaining. In that case the employer, after an impasse in negotiations, implemented its proposed merit pay system, which gave it almost complete discretion to determine wages. Initially the Board held the employer had committed an unfair labor practice because the union had not waived its right to bargain over wages. Id. at 1046-47. This court found the Board's explanation inconsistent with Board precedent, granted the employer's petition for review, and remanded the case for the Board to give a more adequate account of its position. NLRB v. McClatchy Newspapers, Inc., 964 F.2d 1153, 1153-54 (D.C.Cir.1992) (per curiam) ( McClatchy II ). In separate concurring opinions, Judges Edwards and Silberman proposed a variety of alternative theories upon which the Board might justify its result. Among them was Judge Edwards's theory that a unilateral, discretionary merit pay scheme . . . may pose a substantial threat to the union's role as the employees' representatives. Id. at 1172. He explained: If . . . the employer can make unconstrained wage adjustments, the futility of union representation may be driven home to each employee in much the same way the unilateral change doctrine seeks to avoid. Admittedly, the unilateral change doctrine generally presumes that implementing changes post-impasse does not hurt collective bargaining. But if the employer can indefinitely adjust employee wages . . . impasse will no longer be [a] temporary phenomenon. . . . Where the employer has the unconstrained authority to adjust wages to respond to changing conditions, it will have substantially smaller incentives to restart collective bargaining. Id. at 1172-73 (footnote omitted). On remand, the Board again held the employer had committed an unfair labor practice, essentially adopting Judge Edwards's rationale, See McClatchy Newspapers, Inc., 321 N.L.R.B. 1386, 1390-91 (1996) ( McClatchy III ) ([C]arte blanche authority over Wage increases would be inherently destructive of the fundamental principles of collective bargaining) (emphasis and footnote omitted). If the employer had complete discretion to set wages, the Board explained, then the union would be unable to participate knowledgeably in further bargaining. Id. at 1391. Moreover, the merit pay provision would disparage the [union] by showing, despite its resistance to this proposal, its incapacity to act as the employees' representative in setting terms and conditions of employment. Id. Emphasizing the paramount importance of wages as a mandatory subject of bargaining, id. at 1391 n.. 22, the Board concluded the provision was inimical to the policies of the Act because it excluded the union from any meaningful bargaining as to the procedures and criteria governing the merit pay plan. Id. at 1391. McClatchy again petitioned for review, and this time we enforced the Board's order. McClatchy Newspapers, Inc. v. NLRB, 131 F.3d 1026 (D.C.Cir.1997) ( McClatchy IV ). Citing Bonanno Linen, we noted that the Board has wide latitude to monitor the bargaining process. Id. at 1031. We deferred to the Board's opinion that the prevision at issue might irreparably undermine [the union's] ability to bargain. Since the union could not know what criteria, if any, petitioner was using to award individual salary increases, it could not bargain against those standards; instead, it faced a discretionary cloud. Id. at 1032. We also accepted the Board's rationale that the union would appear impotent to its members if it had no information to relay. Id. at 1033. Recognizing the principle of Insurance Agents that the Board may not act at large in equalizing disparities of bargaining power between employer and union, id. (quoting Insurance Agents, 361 U.S. at 490, 80 S.Ct. 419) (alteration and internal quotation marks omitted), we concluded this case is marginally closer to Bonanno Linen ; as in Bonanno Linen, the Board has denied the employer a particular economic tactic for the sake of preserving the stability of the collective bargaining process. Id. Most important for purposes of the present case, we noted the Board had confined its decision to provisions governing wages because wages are a key term and condition of employment and a primary basis of negotiations, id. at 1035 (internal quotation marks omitted). We concluded: [T]he Board is free to draw on its expertise to determine that wages are typically of paramount importance in collective bargaining and to suggest that wages, unlike scheduling or a host of other decisions generally thought closely tied to management operations, are expected to be set bilaterally in a collective bargaining relationship. Id. The Board has since held employers ran afoul of the rule in McClatchy in four cases, three of which involved wage provisions. We approved the Board's application of McClatchy to a wage provision that gave unfettered discretion to the employers at every stage of the pay determination process, Anderson Enters., 329 N.L.R.B. 760 (1999), enf'd, 2 Fed.Appx. 1, 3 (2001), but vacated an order in which the Board applied McClatchy to a relatively nondiscretionary unilateral wage provision. Detroit Newspaper Agency, 326 N.L.R.B. 700 (1998), vacated sub nom. Detroit Typographical Union No. 18 v. NLRB, 216 F.3d 109, 118 (2000). The First Circuit vacated the third Board decision, which concerned a provision giving an employer the discretion either to pay a predefined wage or to abide by current marketplace pay practices, and remanded the case for further consideration. See Edward S. Quirk. Co., Inc., 330 N.L.R.B. 917 (2000), vacated and remanded, 241 F.3d 41, 45 (2001) ( McClatchy is based on employer discretion and discretion is a matter of degree, implicating policy judgments informed by Board expertise. However . . . the Board owes the employer and a reviewing court . . . a reasoned explanation of where it draws the line. . . .), reinstated, 340 N.L.R.B. 301, 301-02 (2003). In the fourth case, which was not reviewed by any court, the Board applied McClatchy to a highly discretionary provision involving health benefits. KSM Indus., Inc., 336 N.L.R.B. 133, 135 (2001), modified in part, 337 N.L.R.B. 987 (2002).