Court Opinion

ID: 6937264
Source: CourtListenerOpinion
Date Created: 2022-07-24 00:41:41.290657+00
Date Added: 2024-06-11T16:07:32.358970
License: Public Domain

KAREN LECRAFT HENDERSON, Circuit Judge,
dissenting:
In NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), the Supreme Court held that an employer violates section (8)(a)(5) of the National Labor Relations Act (Act) by unilaterally awarding discretionary merit increases during union negotiations. *417Now the majority holds it is a violation of the same section not to award such raises. Neither authority nor reason supports this “catch 22” conundrum.
In Katz, the Supreme Court rejected the contention that, because the merit raises awarded “were in line with the company’s long-standing practice of granting quarterly or semiannual merit reviews,” they “in effect, were a mere continuation of the status quo.” 369 U.S. at 746, 82 S.Ct. at 1113. If awarding such a raise does not continue the status quo, I do not see how the raise can be “a fixed condition or term of employment,” as the majority would have it. See Phelps Dodge Mining Co. v. NLRB, 22 F.3d 1493 (10th Cir.1994) (“Payments to employees which are fixed as to timing but discretionary in amount do not become part of the employees’ reasonable expectation and thus are not considered ‘terms and conditions’ of employment.”) (citing Daily News of Los Angeles v. NLRB, 979 F.2d 1571, 1575 (D.C.Cir.1992)).
The majority strains mightily, but unconvincingly, to escape the inevitable effect of Katz. Most fundamentally, the majority attempts to portray the annual increases as something other than “discretionary,” dismissing that term as an “appellation” and a “label.” Majority Op. at 408. Yet the Board itself so described the raises based on the administrative law judge’s unassailable factual finding that “the amount of the increase, if any, is totally discretionary.” 304 N.L.R.B. at 514. Given this total discretion, the Company was bound, as the majority concedes, only to give “an appropriate increase” if an employee’s evaluation so “warranted.” Maj. Op. at 408 (emphases added). Such a program may not have been “whimsical,” as the majority states, but it does seem wispish. It plainly did not create a “fixed” term of employment or give employees any bankable expectations.1
The majority also seeks support from Circuit ease law, see Maj.Op. at 412, but its authority is inapposite. In NLRB v. Blevins Popcorn Co., 659 F.2d 1173 (D.C.Cir.1981), the merit raise was “discretionary” only in that the amount varied according to the objective criterion of job classification. It did not depend, as the raises here do, on the employer’s subjective assessment of the employee’s performance. See Katz, 369 U.S. at 746, 82 S.Ct. at 1113-14 (distinguishing “the case as to so-called ‘merit raises’ which are in fact simply automatic increases to which the employer has already committed himself’). On the other hand, in UAW v. NLRB, 455 F.2d 1357 (D.C.Cir.1971), the court, “assuming that increases pursuant to the merit review plan were wholly discretionary,” concluded that “employees would at least have expected that they would be evaluated according to the plan.” 455 F.2d at 1365. Here, as the majority acknowledges, this expectation was satisfied. See Maj.Op. at 409 (“The Company did, however, continue to issue annual performance appraisals to all employees.”).2
Because the Company’s practice of awarding totally discretionary annual merit raises was not a fixed term or condition of employment, I dissent from the majority’s denial of the petition for review.

. That the discretionary raise was not a "fixed" term of employment is clear from the obvious impracticality of the Board's remedy, which the majority has endorsed (“that the employees be paid the ‘difference between their actual wages and the wages they would have otherwise received' if the merit increases had not been unilaterally discontinued”, 304 N.L.R.B. at 516). As we observed in our earlier opinion in this case: "Given the ALJ's finding here that the amounts of raises in the past practice were ‘totally discretionary’, it is altogether unclear how the ALJ or the Board would enforce its order that the News pay the employees ‘the difference between their actual wages and the wages they would have otherwise received', as the latter by hypothesis are unascertainable.” 979 F.2d at 1577 (record citations omitted).

. The opinions the majority cites from other circuits, see Maj.Op. at 411, are no more helpful. In NLRB v. Allied Prods. Corp., 548 F.2d 644 (6th Cir.1977), the court upheld the NLRB's conclusion that the discontinuance of an annual review program violated the Act, while in NLRB v. Dothan Eagle, Inc., 434 F.2d 93 (5th Cir.1970), the raises at issue were not “totally discretionary” but rather “automatic progression wage increases” of “10 to 15 cents per hour” that "were regularly granted every six months.” 434 F.2d at 96.