United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 4, 2000 Decided July 7, 2000
No. 98-1599
Detroit Typographical Union No. 18, et al.,
Petitioners
v.
National Labor Relations Board,
Respondent
Detroit News, Inc., et al.,
Intervenors
Consolidated with
99-1111, 99-1112, 99-1163, 99-1180
On Petitions for Review and Cross Applications For
Enforcement of Orders of the
National Labor Relations Board
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.
Jeremy P. Sherman argued the cause for the Employer
petitioners. With him on the briefs was Joshua L. Ditelberg.
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.
Jeremy P. Sherman and Joshua L. Ditelberg filed the brief
for the Employer intervenors.
Before: Silberman and Sentelle, Circuit Judges, and
Buckley, Senior Circuit Judge.
Opinion for the Court filed by Circuit Judge Silberman.
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.
I.
From July 1995 through February 1997, employees went
on strike against Detroit's two major newspapers--petition-
ers The Detroit News, Inc. (the News) and The Detroit Free
Press, Inc. (Free Press)--and a joint endeavor created by the
papers under a partnership agreement signed in 1986, peti-
tioner Detroit News Agency (DNA). Each paper is responsi-
ble for its news and editorial operations, but many other
functions, such as circulation, marketing and some labor
relations, are handled by DNA. The employees of these
three companies are represented by 12 unions each repre-
senting a separate bargaining unit of the papers or DNA;
petitioners are six of these unions which compose the Metro-
politan Council of Newspaper Unions (the Council). Two of
the unions in the Council are particularly important to this
case: the Detroit Typographical Union No. 18 (DTU), repre-
senting composing room employees of DNA, and the Newspa-
per Guild of Detroit, representing editorial employees at the
News.1
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.
To expedite matters DNA tentatively agreed to engage in
joint economic bargaining if progress could be made on
noneconomic issues (the "two-stage bargaining agreement").
DNA continued to discuss economic issues with the individual
unions, however, and as negotiations lagged DNA set June 30
as a deadline for their conclusion. (DNA frequently referred
__________
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.
Two days later, the News faxed the Guild a new, more
detailed proposal:
All employees of The Detroit News editorial department
will receive a pay increase effective on the date of
ratification of the new collective bargaining agreement.
No pay increase will be less than one (1) percent. The
average of all pay increases will be four (4) percent.
Increases above one (1) percent will be based on the
employees [sic] most recent evaluation unless the em-
ployee or his/her manager requests that another evalua-
tion be done because the employee's performance has
changed since the last evaluation. Irrespective of any
delay caused by such re-evaluation, all raises will be
retroactive to the date of ratification.
Raises for the second and third years of the contract will
be handled under the above procedure and will be effec-
tive May 1, 1996 and May 1, 1997, respectively. The only
change is that the minimum each year will be one (1)
percent and the average will be three (3) percent.
Each year all contract minimums will increase by one (1)
percent.
Employees of the union may grieve, but not arbitrate,
the employee's evaluation or the timing or amount of the
employee's pay increase.
News negotiators offered to meet to explain the proposal.
The Guild negotiators claimed to understand it, although the
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.
At the June 14 session the News clarified for the Guild that
merit payments would be based on actual salaries. The
Guild's negotiator again rejected the News's suggestion that
negotiations over merit pay were deadlocked, claiming to
have come to the meeting to make counterproposals. Howev-
er, although he asked questions about the News's proposal,
no counterproposals were made, and he stated that the unit
members were adamantly opposed to merit pay. See id. at
63-64. Negotiations over the overtime exemption proposal
also went no further. The Guild again expressed its view that
the proposal was illegal, though its negotiators asked ques-
tions about how exactly the proposal would work, and re-
quested a list of employees eligible under the proposal. They
also suggested that instead of the News determining whether
individual employees qualified under the proposal, such deter-
minations be made by the Department of Labor. The News
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.
Following the June 14 meeting, the Guild on June 16 asked
for negotiations to be delayed until some time in early July,
after its national convention in Boston which would run from
June 17 through June 24, with the Guild negotiators re-
turning on June 26. The News's negotiator responded on
June 20 by writing that he saw no reason to delay negotia-
tions, and also wrote:
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.
On June 28 the News released to its employees a memo
providing details about the merit pay proposal, specifically
that those employees who received an evaluation of "out-
standing" or "commendable" would qualify, and some 90% of
employees could expect to receive merit pay. The memo also
accused the Guild of being unwilling to meet. On June 29 the
Guild repeated its earlier request for a meeting, and stated a
willingness to discuss overtime exemption. In response, at
eight o'clock in the evening of June 30, a Friday, the News
faxed the Guild an offer to negotiate the following Monday,
July 3, at ten in the morning. The Guild's negotiators did not
see this offer until late Monday afternoon, and when the
News's negotiators met the Guild's earlier that day on an
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.
The Council and its constituent unions began to plan a
strike prior to the News's declaration of impasse. For in-
stance, DNA's decision not to engage in joint bargaining,
despite its tentative agreement to do so, was mentioned
throughout June as a causus belli. Individual unions also
held meetings in which they obtained strike authorization
from their membership. See id. at 75. On July 6, following
the News's declaration of impasse, the Council met and
agreed to set a strike deadline of July 13. On July 12 the
Council met once more and agreed to the following resolution:
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.
The collective bargaining agreement between DNA and
DTU for the 1992-1995 term, meanwhile, had sections titled
"Jurisdiction," "Equipment Jurisdiction," and "Computer Jur-
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.
The ALJ agreed with the unions on all but the DTU issue.
The Board generally affirmed the ALJ's opinion; however, on
the issue of the joint bargaining agreement it found that
DNA had never clearly and unequivocally agreed to joint,
two-stage bargaining, and therefore concluded it was not an
unfair labor practice for DNA to insist on bargaining with
individual unions. See generally Detroit I, 326 N.L.R.B. No.
64. The Board went on to observe, sua sponte, that while
negotiating rules are only a permissive subject of bargaining
and the Unions had struck in part to force agreement on such
rules, "We do not suggest that the Union's insistence on
adherence to the two-stage bargaining procedure was unlaw-
ful here." See id. at 5. The Board adopted the ALJ's
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.
II.
The employers challenge the unfair labor practice findings
as well as the determination that the alleged unfair labor
practices caused the strike. The thrust of their latter argu-
ment is that the unions struck not over the purported unfair
labor practices, but to enforce the joint bargaining agree-
ment. Indeed, they claim, the strike was unprotected be-
cause the unions unlawfully sought to force adherence to the
joint bargaining agreement, a permissive subject of bargain-
ing. Moreover, according to the employers, the Board's
determination that the employers committed unfair labor
practices is not supported by substantial evidence. The
Board's examples of the News's bad faith were unsubstantiat-
ed or trivial, and the Board ignored the unions' refusal to
bargain over key issues. They distinguish this case from
McClatchy by emphasizing the details in the News's merit
pay proposal not provided in the McClatchy proposal. DTU's
petition claims that the News committed an unfair labor
practice by making a unilateral midterm change to the ongo-
ing Memorandum of Agreement.
A. Lawfulness of the Strike
The employers' primary argument, which was the focus of
the Board's reconsideration order, is that the strike was
unprotected because it (unlawfully) sought to force DNA's
adherence to the two-stage bargaining agreement, which was
only a permissive subject of bargaining. As the Board ex-
plained in Detroit III,
There are certain situations in which the Board has
found that a strike or other economic action in support of
a proposal on a nonmandatory bargaining subject is
unlawful.... These situations have involved ... a strike
in furtherance of the unlawful condition that further
bargaining depends on acquiescence to a demand on a
nonmandatory subject.
327 N.L.R.B. No. 146 at 95; see also United Food & Com-
mercial Workers Int'l Union v. NLRB, 880 F.2d 1422, 1428
(D.C. Cir. 1989)("[C]ategorizing a matter a mandatory subject
will ... authorize the union to use the economic weapons at
its disposal to back up its demands at the negotiating table.").
Two-stage bargaining, contend the employers, was the "para-
mount" reason for the strike. See Detroit III, 327 N.L.R.B.
No. 164 at 95 ("[A]nalysis of the legality of conduct vis-a-vis a
nonmandatory subject requires examination of the impact of
such conduct on negotiations for mandatory subjects.")
We think the Board permissibly ruled, however, that the
employers waived this argument by failing to raise it in a
timely fashion before the ALJ. Though the employers' argu-
ment was presented in their exceptions from the ALJ's
decision and motion for reconsideration, the Board in Detroit
III determined it had been waived, as "[a] contention raised
for the first time in exceptions to the Board is ordinarily
untimely raised and, thus, deemed waived." 327 N.L.R.B.
No. 146 at 1 (quoting Yorkaire, Inc., 297 N.L.R.B. 401 (1989),
enforced 922 F.2d 832 (3d Cir. 1990)). The employers do not
generally challenge this procedural policy.
The employers do claim that the Board is, in effect, es-
topped from applying its policy because it decided sua sponte
the lawfulness issue in Detroit I, by saying "We do not
suggest that the Union's insistence on adherence to the two-
stage bargaining procedure was unlawful here." 326
N.L.R.B. No. 64 at 5. That is an apparent mischaracteriza-
tion of the Board's statement. The Board did not actually
decide the lawfulness issue in Detroit I. Even if the Board
had analyzed the issue more extensively, that still would not
be sufficient to prevent the Board from applying its waiver
policy. Cf. Local 900 Int'l Union of Elec., Radio and Mach.
Workers v. NLRB, 727 F.2d 1184, 1191 (D.C.Cir. 1984) (dis-
cussion of an issue by the NLRB did not necessarily prove
compliance with s 10(e) of the NLRA requiring that issues be
raised before the Board in order to obtain judicial review of
such). Nor does the Board's resolution of the merits of the
employers' argument on reconsideration in Detroit III under-
mine its position; the merits discussion was merely an alter-
native holding to its determination that the argument had
been waived. Cf. Burkhart v. WMATA, 112 F.3d 1207, 1215
(D.C.Cir. 1997) (district court's discussion of an alternative
ground for its decision did not undercut its ruling that
appellant's claim was untimely raised).2
B. Merit Pay
We begin our discussion of this subject with the Board's
determination that the News's implementation of its merit
pay proposal runs afoul of McClatchy because we think that
legal issue pervades the Board's analysis of the parties' merit
pay negotiations. In McClatchy the Board confronted the
implementation of an employer's merit pay proposal which
would have set salaries strictly on the basis of "merit" as
determined by the employer; no objective procedures or
standards at all were proposed--there was nothing but a
__________
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.
Instead, the Board treated this case as if it were on all
fours with McClatchy. See Detroit I, 326 N.L.R.B. No. 64 at
7. We think that was quite unreasonable (arbitrary and
capricious). McClatchy presented an unusual situation where
an employer provided no details at all of its merit pay plan.
Here, on the other hand, the News's proposal stated that
raises would average four percent in the first year of the
contract, and three percent in the second and third years.
Merit pay determinations would be based on the annual
employee evaluation process (the evaluation forms for which
consumed over 100 pages in the joint appendix) and would be
effective on fixed dates. Employees would also be permitted
to contest the size of their raises using grievance procedures.
To be sure, the employer's proposal carried a good deal of
discretion. It did not foreclose the possibility that an employ-
ee would get a merit pay increase without achieving the top
performance rating.3 But any merit pay system inherently
carries much employer discretion which, of course, is why
unions resist them. In sum, we reject the Board's blithe
extension of McClatchy to this case as unreasoned and unrea-
sonable.4
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.
The Guild was initially presented with the News's final
merit pay proposal on April 27. The extant bargaining
agreements expired on April 30, yet negotiations continued
for an additional two months. The Guild made no counter-
proposals at the negotiation session on June 14, nor did it
send anything to the News in the three week interim between
this meeting and the July 5 implementation,5 although it had
__________
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.
The Board fixed upon the News's failure to make clear
early on that salary increases, under the merit plan, would be
based on actual, not nominal, contract minimum salaries.
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.
The Board also relied on the News's failure to provide the
Guild with other crucial information and provision of such
information directly to unit employees. It found the News
"refused to provide the Guild with information as to how
much money it proposed putting in the merit pay pool." See
Detroit I, 326 N.L.R.B. No. 64 at 7. This is simply wrong;
the News responded to the Guild's negotiator's June 14
inquiry by telling him to apply the 4% average raise to
payroll information in the Guild's possession. The Board also
thought a series of memoranda given unit employees immedi-
ately before and after implementation, which stated that
merit increases would be given to those receiving an evalua-
tion of "outstanding" or "commendable," and that 80 to 90%
of employees would or had received merit pay, was evidence
of bad faith, because such information had not previously
been furnished to the Guild. But the News's proposal stated
that merit pay would be based on the evaluations, and the
evaluation forms state "A[n employee] whose overall perfor-
mance rating is outstanding or commendable is eligible for a
merit increase." The Guild had copies of these forms, and
knowledge of how unit employees had been rated.6
__________
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.
As we noted after the convention the News, in response to
a subsequent Guild request for a meeting, faxed a proposal on
a Friday night for a meeting the following Monday morning--
one day before a national holiday and two days before the
__________
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.
While it is sometimes true that unremedied unfair labor
practices have this effect, see, e.g., Alwin Mfg. Co. v. NLRB,
192 F.3d 133 (D.C. Cir. 1999), that is not necessarily the case.
In Cauthorne, "we reject[ed] any presumption that an em-
ployer's unfair labor practice automatically precludes the
possibility of meaningful negotiations and prevents the par-
ties from reaching a good faith impasse." 691 F.2d at 1025;
see also Alwin Mfg., 192 F.3d at 137-38. The ALJ and the
Board, by failing to rely on any evidence demonstrating how
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.
C. Overtime Exemption
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.
Although it was never shown that a list of eligible employ-
ees existed--the General Counsel failed to subpoena the
purported list, see Detroit I, 326 N.L.R.B. No. 64 at 28-29
(Members Brame and Hurtgen, dissenting in part)--the ALJ
opined that "It is difficult to believe that the News entered
negotiations without having formulated its own expectation of
the scope and impact of its proposal...." See id. at 73. The
Board agreed, noting that it shared
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.
Such speculation is not evidence. See, e.g., Arizona Pub.
Serv. Co. v. United States, 742 F.2d 644, 649 n.2 (D.C. Cir.
1984) ("[M]ere conjecture and abstract theorizing offered in a
vacuum are inadequate to satisfy us that the agency has
engaged in reasoned decisionmaking.").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.
III.
The Board's discussion of strike causation was sparse, but
the ALJ's opinion suggests the purported unfair labor prac-
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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).
* * * *
The employers' petition for review is granted; the union's
petition for review is denied.
So ordered.