United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued May 11, 2007 Decided June 15, 2007
No. 06-1089
E.I. DU PONT DE NEMOURS AND COMPANY,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
UNITED STEEL, PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED INDUSTRIAL AND
SERVICE WORKERS INTERNATIONAL UNION, ET AL.
INTERVENORS
Consolidated with
06-1163, 06-1168
On Petitions for Review and Cross-Application for
Enforcement of an Order of the
National Labor Relations Board
Steven W. Suflas argued the cause for petitioner E.I. du Pont
de Nemours and Company. With him on the briefs were
Jennifer L. Sova and James D. Donathen.
2
James B. Coppess argued the cause for petitioners United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union, et al.
On the brief was Daniel M. Kovalik. Peter Herman entered an
appearance.
Philip A. Hostak, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
were Ronald E. Meisburg, General Counsel, John H. Ferguson,
Associate General Counsel, Aileen A. Armstrong, Deputy
Associate General Counsel, and David S. Habenstreit,
Supervisory Attorney.
Steven W. Suflas, Jennifer L. Sova, and James D. Donathen
were on the brief for intervenor E.I. du Pont de Nemours and
Company.
Daniel M. Kovalik was on the brief for intervenors United
Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union, et al.
Before: SENTELLE, GARLAND and KAVANAUGH, Circuit
Judges.
Opinion for the Court filed by Circuit Judge KAVANAUGH.
KAVANAUGH, Circuit Judge: This case arises out of
negotiations between E.I. du Pont de Nemours and Company
and the Union that represents employees at one of the
Company’s factories in New York. In 2001, the Company
declared impasses with respect to two sets of negotiations, one
concerning the subcontracting of certain positions and one
concerning the parties’ overall collective bargaining agreement.
The National Labor Relations Board determined that the
Company had permissibly declared an impasse with respect to
3
the overall collective bargaining agreement but had wrongfully
declared an impasse with respect to the subcontracting
negotiations. Both the Company and the Union filed petitions
for review in this Court. The Union contends that the Company
impermissibly bifurcated the subcontracting issue and the
overall collective bargaining agreement issues into two separate
sets of negotiations, and that because the subcontracting impasse
was unlawful, so too the collective bargaining agreement
impasse was unlawful. The Company argues, contrary to the
conclusion of the Board, that there was a lawful impasse on the
subcontracting issue. For the reasons set forth below, we deny
the petitions for review and grant the Board’s cross-petition for
enforcement.
I
1. At its facility in Tonawanda, New York, E.I. du Pont de
Nemours and Company manufactures Corian “shapes.” Corian
is a “solid surface” material used to make countertops in
kitchens and other areas. At the Tonawanda facility, liquid
Corian is poured into molds in the shapes of bowls and sinks.
Employees called “millers” then remove the outer layer from the
shapes and drill drain holes. After that, employees called
“finishers” sand the shapes to smooth them out and remove
blemishes. Along with the rest of the employees at the
Tonawanda facility (approximately 400 in all), these millers and
finishers are represented by the Union.
4
In 1977, the Company and the Union signed a collective
bargaining agreement.* The CBA included an “evergreen”
clause, which permitted either party to terminate or propose
alterations to the agreement at any time. Sixteen years later, in
1993, the Company invoked that clause and notified the Union
that it intended to terminate the CBA and negotiate a new
agreement. After a year of unfruitful negotiations over a new
CBA, the Company declared an impasse in 1994 and
implemented its final offer.
Two features of that final offer are relevant to this case.
First, the Company eliminated “pyramiding,” an overtime pay
system in which employees are compensated at the overtime rate
both for hours worked per day in excess of eight hours and for
hours worked per week in excess of 40 hours. Second, the
Company eliminated most available healthcare plans and
implemented a cost-sharing formula to gradually equalize
Company and employee contributions to healthcare costs.
In response to the Company’s implementation of its final
offer, the Union filed unfair labor practice charges with the
NLRB. In 1997, however, the Company and the Union entered
into a settlement agreement, in which the Company agreed to
restore pyramiding and freeze healthcare cost-sharing at the ratio
that existed as of 1996. The parties resumed negotiations over
a new CBA in 1998.
*
The employees at the Tonawanda facility were represented
by the Buffalo Yerkes Union until 1999. At that point, the Buffalo
Yerkes Union affiliated with the Paper, Allied Industrial, Chemical
and Energy Workers International Union, the predecessor to the
United Steel, Paper and Forestry, Rubber, Manufacturing, Energy,
Allied Industrial and Service Workers International Union, one of the
petitioners in this case. For ease of reference, we refer simply to “the
Union.”
5
Meanwhile, in 1995, after the Company declared the
impasse on the CBA negotiations but before the parties reached
the settlement agreement, the parties began a separate set of
negotiations concerning the discrete issue of finishing work (the
sanding of Corian shapes performed by finishers). Since 1985,
the Company had subcontracted finishing work off premises.
The Company announced in early 1995, however, that it
intended to bring finishing work back in-house. In August of
that year, the parties reached an agreement – even though
negotiations on the overall CBA were at that time stalled – in
which the Company promised to keep 85% of finishing work
in-house and the Union accepted a lower wage requirement for
finishing work. That agreement was called the “CCMC finisher
agreement.”
To summarize, by 1997 the Company and the Union had
entered into two agreements relevant to this case. The first was
a settlement agreement that preserved negotiations over the
overall CBA by restoring pyramiding and freezing the ratio of
healthcare cost-sharing at the 1996 level. The second was the
CCMC finisher agreement, which related to the discrete issue of
bringing finishing work in-house.
2. From 1998 to 2001, the parties continued to bargain over
a new CBA. In January 2001, the Company presented the Union
with another final offer in the CBA negotiations. That final
offer, like the one in 1994, would have eliminated pyramiding
and resumed the gradual phase-in of healthcare cost-sharing. At
the same time, the Company proposed a “Supplemental
Agreement” that amended the CCMC finisher agreement. That
amendment would have committed the Company to gradually
raising the wages of finishers but would have eliminated the
requirement that the Company keep a minimum percentage of
finishing work in-house.
6
In February 2001, the Company changed course and
informed the Union that it would terminate the CCMC finisher
agreement in June of that year. The Company told the Union
that emerging technologies would soon make it possible to
completely eliminate all finishing positions, as well as milling
positions. In response to this, the Union presented a “helping
hands” proposal that would purportedly have alleviated some of
the bottleneck problems at the factory, but the Company rejected
it. The Company also insisted that negotiations over the CCMC
finisher agreement be kept separate from negotiations over the
CBA.
In April 2001, the Company informed the Union that it had
conducted a feasibility study; the study demonstrated that the
Company could save $1 million per year by subcontracting
finishing and milling work. As a result, the Company would
subcontract all of the finishing and milling work by May 1
unless the Union submitted a plan with comparable cost savings.
Throughout April, the Union submitted information requests to
the Company concerning the basis for the $1 million cost-
savings figure, most of which the Company complied with.
On April 12, the Company declared an impasse on the CBA
negotiations and implemented its final offer eliminating
pyramiding and gradually equalizing healthcare cost-sharing.
Then, on May 1, the Company declared an impasse on the
subcontracting negotiations and began to subcontract finishing
and milling work.
3. Before the NLRB, the Union challenged the legality of
the two impasses under Sections 8(a)(1) and 8(a)(5) of the
National Labor Relations Act. See 29 U.S.C. § 158(a)(1), (5).
In February 2006, the Board ruled (as relevant here): (1) the
Company had wrongfully failed to provide information in
response to seven specific requests by the Union on April 23,
7
2001, and this failure rendered the impasse on the
subcontracting issue unlawful; (2) the Company had not violated
the duty to bargain in good faith by insisting on separate
negotiations over the subcontracting issue and the CBA; and (3)
the Company’s implementation after impasse of its plan to
gradually equalize healthcare costs did not confer upon the
Company such open-ended discretion as to be unlawful. See E.I.
du Pont de Nemours & Co., 346 NLRB No. 55, at 4-9 (2006)
(“Decision and Order”). Board Member Liebman dissented
from the latter two conclusions. See id. at 10-12.
The Company and the Union filed timely petitions for
review in this Court, with the Company challenging the Board’s
first holding and the Union challenging the other two holdings.
The Board filed a cross-petition for enforcement. We must
uphold the Board’s decisions if its factual findings are supported
by substantial evidence and the decisions are not arbitrary and
capricious. Carpenters & Millwrights, Local Union 2471 v.
NLRB, 481 F.3d 804, 808-09 (D.C. Cir. 2007). Among other
circumstances, the Board acts arbitrarily when it departs from its
own precedent without a reasonable explanation. See Jochims
v. NLRB, 480 F.3d 1161, 1167 (D.C. Cir. 2007).
II
1. The Company argues that its refusal to provide the
Union with information in response to seven specific requests
did not preclude a lawful impasse on the subcontracting issue,
contrary to the Board’s decision. In the Company’s view,
NLRB precedent requires the Board to find a “causal
connection” between the refused information requests and the
impasse – beyond the fact that the information requests were
relevant to the central issues on the table – such as specific
evidence that the Union would have formed a counterproposal
had the Company granted the information requests. Therefore,
8
the Company argues, the Board unreasonably departed from its
own precedent by declaring the impasse invalid.
The Company’s objection to the Board’s decision is wrong
both factually and legally.
As a factual matter, the Board clearly did find some causal
connection between the denied information requests and the
impasse. The Board explained that “[i]n order to assess the
accuracy of the [Company’s] claims [about cost savings], it was
necessary for the Union to examine the data that formed the
basis for the [Company’s] conclusions.” Decision and Order at
5-6. The Board found that at least one request was both
“relevant and essential to the Union’s ability to assess the
[Company’s] assertion that [certain] costs constituted 40 percent
of its labor costs.” Id. at 6. As to the other six requests, the ALJ
determined that they were “necessary and relevant in order for
the Union to either assess, or understand, the feasibility study,
or formulate its own proposals,” and the Board adopted this
finding. E.I. du Pont de Nemours & Co., JD-138-03, at 22, 2003
WL 23109100 (2003); Decision and Order at 1. In short, there
is no merit to the Company’s claim that the Board did not find
a causal link between the information requests and the impasse.
As a legal matter, although the Board has consistently
suggested the necessity for some causal connection between an
unfair labor practice and an interruption in bargaining before
declaring impasse, the Board has never required the
establishment of “but for” causation in absolute terms. The
Board has, however, repeatedly reiterated the principle that “a
finding of valid impasse is precluded where the employer has
failed to supply requested information relevant to the core issues
separating the parties.” Caldwell Mfg. Co., 346 N.L.R.B. No.
100, at 12 (2006) (emphasis added); see also Titan Tire Corp.,
333 N.L.R.B. 1156, 1159 fn. 11 (2001); U.S. Testing Co., 324
9
N.L.R.B. 854, 860 (1997). As the Board has explained, “[a]
legally recognized impasse cannot exist where the employer has
failed to satisfy its statutory obligation to provide information
needed by the bargaining agent to engage in meaningful
negotiations.” Decker Coal Co., 301 N.L.R.B. 729, 740 (1991);
see also Roytype Div., Pertec Computer Corp., 284 N.L.R.B.
810, 812 (1987). And this Court, in a case in which an employer
refused to provide relevant information, held that the employer’s
“unlawful refusal to supply the requested [information]
preclude[s] the Company from declaring an impasse.” U.S.
Testing Co., Inc. v. NLRB, 160 F.3d 14, 20, 22 (D.C. Cir. 1998);
accord Raven Servs. Corp. v. NLRB, 315 F.3d 499, 505 (5th Cir.
2002); Olivetti Office U.S.A., Inc. v. NLRB, 926 F.2d 181,
188-89 (2d Cir. 1991); Cone Mills Corp. v. NLRB, 413 F.2d 445,
449-50 (4th Cir. 1969).
The Company points to Alwin Manufacturing Co. v. NLRB,
192 F.3d 133 (D.C. Cir. 1999). In that case, an employer had
unilaterally imposed new production standards and a new
vacation policy during negotiations, both of which the Board
later determined to be unfair labor practices. Id. at 135. The
Board further found that those practices had contributed to the
impasse and therefore ruled that the impasse was invalid. Id. at
135, 137. Before this Court, the employer argued that the Board
had applied an impermissible per se rule that any unfair labor
practice committed during negotiations necessarily precluded a
lawful impasse. Id. at 138. This Court agreed with the
employer that a per se rule would be inappropriate but found
that the Board had demonstrated “a causal connection between
the unilateral changes and the failure to reach an agreement.”
Id. Thus, Alwin Manufacturing stands for the unremarkable
proposition that an employer’s commission of an unfair labor
practice during negotiations does not necessarily preclude a
lawful impasse and that the demonstration of a “causal
connection” is important to a decision invalidating an impasse.
10
That general principle says nothing about the legal effect of a
specific unfair labor practice central to the negotiation process:
the withholding of information relevant to the issues on the
bargaining table.
Likewise, in Sierra Bullets, the Board considered the
“precise issue” of “whether the mere existence of any
information request, regardless of its relevance to the core
issues that separate the parties at the bargaining table, precludes
a finding of impasse.” 340 N.L.R.B. 242, 244 (2003) (emphasis
added). The Board found that because the requested information
in that case was irrelevant, there was “no convincing argument
that [providing the information] would have changed the fact
that the parties were deadlocked.” Id. The key principle of
Sierra Bullets was relevance; the decision didn’t suggest that
any broader causal nexus is required when an employer fails to
provide relevant information. To the contrary, the clear
implication of Sierra Bullets is that denial of an information
request relevant to core bargaining issues precludes a lawful
impasse. See Caldwell Mfg. Co., 346 N.L.R.B. No. 100, at 12-
13.
In sum, Board and court precedents reflect the principle that
a denial of “information relevant to the core issues separating
the parties” can preclude a lawful impasse, and such a
commonsense principle is certainly reasonable. In this case,
moreover, the Board expressly and repeatedly stated that it
believed that the Union’s seven information requests were
“necessary” and “essential” to the bargaining over the
subcontracting issue. We therefore reject the Company’s
“causal connection” challenge.
2. The Company also argues that the information requests
by the Union do not meet the standard of relevance established
by the Board. In the Company’s view, “any discrepancies
11
between the information provided and that later demanded by
the Union in the seven requests at issue are so small” that the
Union had “an adequate basis to evaluate [the Company’s]
claims.” Company Pet’r’s Br. at 54.
The Board’s relevance standard is “a liberal discovery-type
standard, under which the requested information need only be
relevant to the union in its negotiations.” U.S. Testing Co., 160
F.3d at 19. As this Court has stated, “in the absence of a
countervailing interest [such as confidentiality concerns], any
requested information that has a bearing on the bargaining
process must be disclosed.” Id.
The thrust of the Board’s relevance finding in this case was
that the Company provided the Union with only “generalized or
bundled figures” to support its $1 million cost-saving assertions
and therefore the Union properly requested the hard data that the
Company used to arrive at its figures. Decision and Order at 5.
In the Board’s judgment, “it was necessary for the Union to
examine the data that formed the basis for the [Company’s]
conclusions.” Id. at 5-6. For example, to respond to the
Company’s claim that 40% of its labor costs were attributable to
employee benefits, the Union requested the cost data for benefits
of finishing and milling employees. See id. at 6. Similarly, the
Union requested information on the number of Corian bowls of
each style and color finished in-house versus off-site in order to
determine whether the Company had purposefully been
manufacturing the most labor-intensive kinds of bowls in-house
in order to skew upward the in-house costs. See id.
The Board’s relevance finding here was a reasonable
application of the well-established NLRB principle that a union
is entitled to inspect the data relied on by an employer and does
not have to accept the employer’s bald assertions or generalized
figures at face value. See, e.g., Republic Die & Tool Co., 343
12
N.L.R.B. 683, 686-87 (2004) (financial information); Ormet
Aluminum Mill Prods. Corp., 335 N.L.R.B. 788, 802 (2001)
(purchasing information); Merchant Fast Motor Lines, Inc., 324
N.L.R.B. 562, 563 (1997) (financial information); McGuire
Steel Erection, Inc., 324 N.L.R.B. 221, 222-24 (1997) (payroll
records); cf. NLRB v. Truitt Mfg. Co., 351 U.S. 149, 152-53
(1956) (“If . . . an argument is important enough to present in the
give and take of bargaining, it is important enough to require
some sort of proof of its accuracy.”). The Company has
advanced no persuasive reason for this Court to disturb the
Board’s reasonable conclusion.
3. Before this Court, the Company also suggests that the
Board’s remedy in this case – an order to reinstate the finishing
and milling employees – imposes an “undue burden.” See Vico
Prods. Co. v. NLRB, 333 F.3d 198, 212 (D.C. Cir. 2003);
O’Dovero v. NLRB, 193 F.3d 532, 538 (D.C. Cir. 1999). The
Board responds that it has reserved that issue for a future
compliance proceeding and therefore that judicial review of the
question is inappropriate at this time. See Decision and Order
at 6 n.10. We agree. As we have explained, “[t]he first and only
opportunity for [the Court to vacate a Board-imposed remedy]
is ordinarily in a petition for review of the Board order imposing
the remedy but, if the Board reserves the issue for later
consideration, that opportunity will necessarily be deferred until
the Board resolves the issue in a subsequent order.” Scepter,
Inc. v. NLRB, 448 F.3d 388, 391 (D.C. Cir. 2006); see also
Great Lakes Chem. Corp. v. NLRB, 967 F.2d 624, 629-30 (D.C.
Cir. 1992).
III
1. In its petition for review, the Union argues that the
Board unreasonably approved the Company’s separation of the
subcontracting negotiations from the overall CBA negotiations.
13
In the Union’s view, the impasse in the CBA negotiations could
have been averted had the Union been able to bargain over the
CBA issues and the subcontracting issue together.
As a general matter, with respect to mandatory subjects of
bargaining, a party has the right to insist on negotiating an entire
contract rather than engaging in piecemeal negotiation over
particular issues. As the Board has stated, it “is well settled that
the statutory purpose of requiring good-faith bargaining would
be frustrated if parties were permitted, or indeed required, to
engage in piecemeal bargaining.” E.I. Dupont de Nemours &
Co. (Spruance), 304 N.L.R.B. 792, 792 n.1 (1991); see Vincent
Indus. Plastics, Inc. v. NLRB, 209 F.3d 727, 735 (D.C. Cir.
2000); Trumball Mem’l Hosp., 288 N.L.R.B. 1429, 1446-47
(1988); see also Duffy Tool & Stamping, LLC v. NLRB, 233 F.3d
995, 997-99 (7th Cir. 2000); Visiting Nurse Servs., Inc. v. NLRB,
177 F.3d 52, 59 (1st Cir. 1999). In this case, however, the Board
reasonably concluded that the Company did not violate its duty
to bargain in good faith because the parties had a long and
firmly established history of bargaining over issues related to the
milling and finishing operation separately from those issues
relating to the CBA.
The Union contends that this case is indistinguishable from
a previous case involving the same company. In Spruance, as
in this case, the Company insisted that negotiations on two
specific issues take place separately from negotiations on an
overall collective bargaining agreement. 304 N.L.R.B. at 802.
The Board found in that case that “management, by this course
of conduct, had . . . unreasonably reduced the flexibility of
collective bargaining and narrowed the range of possible
compromises.” Id. It was clear in Spruance that the employer
had purposefully bifurcated the negotiations in order to avoid
“horse trade” offers and accelerate impasse and implementation.
Id. The Union posits that the same thing happened in this case:
14
The Company segregated negotiations in order to avoid
protracted negotiations and more quickly implement its
proposals.
We conclude that the Board reasonably distinguished its
precedent in Spruance. In that case, the parties did not have a
history of separate bargaining over the two issues. On the
contrary, the employer negotiated with the union over those
proposals at the same sessions where the CBA was discussed,
see id. at 793, and, far from accepting bifurcation, the union
insisted that the proposals were part of the CBA negotiations,
see id. at 794. In this case, by contrast, there was a long history
of separate negotiations between the Company and the Union
with respect to the subcontracting issue (as well as other discrete
issues). Here, the CBA’s “evergreen” clause permitted the
parties to negotiate components of the contract while the balance
of the contract’s terms remained in effect. As the Board found,
“[t]he parties utilized this clause throughout the life of the
contract, negotiating and implementing new terms in discrete
areas, such as bonuses, wage increases, and health benefits.”
Decision and Order at 4. Of specific relevance to this case, “the
issue of subcontracting the milling and finishing work . . . was
historically separate” from “general bargaining [and] was not
even in the unit, i.e., it was subcontracted, for about 10 years.”
Id. After all, the original CCMC finisher agreement was
“proposed, negotiated, and implemented separate and apart from
the rest of the contract” – during a period when overall CBA
negotiations were stalled. Id. Additionally, the CCMC finisher
agreement included its own, separate termination clause.
Whereas the CBA could be terminated upon notice by either
party 60 days prior to its expiration date, the CCMC finisher
agreement could not be terminated unless a party gave 120 days
notice. Furthermore, there were different committees to bargain
over the two sets of issues: a “contract committee” negotiated
15
CBA issues, while issues related to the CCMC finisher
agreement were discussed by the “executive board.”
Moreover, not only did the Union not insist on unified
bargaining, since “1995, i.e., at the very inception of the in-
house milling and finishing work, the parties . . . willingly
bargained separately for that operation.” Id. And while “the
Union subsequently made a proposal to retain” the milling and
finishing operation, “it never protested on the ground that the
negotiations were separate.” Id. The Board’s finding that “the
issue of subcontracting the milling and finishing work . . . was
historically separate” from “general bargaining,” id., was
supported by substantial evidence. In light of that history, its
determination that the present case fell outside of its general rule
against bifurcated negotiations was reasonable.
The Board concluded that this history of separation
demonstrates that the Company did not insist on bifurcated
negotiations in order to distort the bargaining process; the
Company simply adhered to the parties’ longstanding practice
of separate negotiations. The Board’s judgment was reasonable.
Whether a party has bargained in good faith is assessed by
looking to the totality of the circumstances. See NLRB v.
Cauthorne, 691 F.2d 1023, 1026 n.5 (D.C. Cir. 1982). As the
Board has stated, “good faith or the lack of it depends upon a
factual determination based on overall conduct.” In re
Matanuska Elec. Ass’n, Inc., 337 N.L.R.B. 680, 681 (2002)
(internal quotation marks omitted). In this case, it was
reasonable for the Board to look to the parties’ long history of
bargaining separately on these issues (even to the point where
stalled negotiations on the CBA did not prevent the formation of
the CCMC finisher agreement in 1995).
2. According to the Union, had it been given more time and
information to formulate a cost-saving plan in response to the
16
Company’s feasability study on subcontracting, the Union could
have prevented the impasse in the CBA negotiations by coming
up with a “horse trade” linking the two sets of issues. In light of
our holding that the Board reasonably found that bifurcation was
lawful, however, we reject this argument. The Company
permissibly kept the two sets of negotiations separate, and
therefore the Company could properly declare a lawful impasse
in the CBA negotiations even though it could not declare a
lawful impasse in the subcontracting negotiations.
3. Finally, the Union argues that, even assuming a valid
impasse existed, the Company’s implementation of its
healthcare cost-sharing proposal was improper. As a general
matter, a lawful impasse entitles an employer to implement the
“last, best offer” it presented in negotiations. Detroit
Typographical Union No. 18 v. NLRB, 216 F.3d 109, 117-18
(D.C. Cir. 2000); see also TruServ Corp. v. NLRB, 254 F.3d
1105, 1114 & n.8 (D.C. Cir. 2001); Noel Foods, a Div. of Noel
Corp. v. NLRB, 82 F.3d 1113, 1120 (D.C. Cir. 1996). The
Board, however, has carved out a narrow exception to that
general rule: An employer may not unilaterally implement a
proposal that gives the employer standardless discretion over
future changes with respect to mandatory subjects of bargaining,
such as pay and benefits. See McClatchy Newspapers, Inc., 321
N.L.R.B. 1386, 1390-91 (1996); KSM Indus., Inc., 336 N.L.R.B.
133, 134-35 (2001), modified in part, 337 N.L.R.B. 987 (2002);
see also Detroit Typographical Union, 216 F.3d at 117-18. The
rationale for that exception is that such discretion would render
future bargaining impossible because the Union could not know
what criteria the employer was using to formulate its proposals.
Detroit Typographical Union, 216 F.3d at 117; McClatchy
Newspapers, Inc. v. NLRB, 131 F.3d 1026, 1032 (D.C. Cir.
1997); accord The Edward S. Quick Co. v. NLRB, 241 F.3d 41,
43 (1st Cir. 2001) (“[A]llowing a succession of unilateral
changes by the employer . . . would make a union seem impotent
17
to its members over time and further undermine the union’s
bargaining ability by creating uncertainty about prevailing
terms.”).
The Union contends in particular that a provision in the new
healthcare plan gives the Company too much discretion in
making future changes to employees’ healthcare plans. That
provision states: “Participants will pay for premiums, co-pays,
co-insurance and deductibles established for a particular plan
year. . . . Projected increases for future plan years will be shared
equally between Du Pont and participants, provided, however,
such increases may be allocated to premiums, components of
plan design, or any combination thereof.” Therefore, the
Company and the employees must share any future increase in
healthcare costs equally, but the Company has discretion to
allocate those costs among premiums and other components of
the healthcare plan as the Company sees fit. The Union seizes
on this comparatively small measure of employer discretion,
claiming that it violates the McClatchy Newspapers principle
and that therefore the Board has unreasonably departed from its
own precedent by upholding the Company’s implementation of
the healthcare proposal.
We disagree with the Union because the Board reasonably
distinguished this case from its precedents. The Board
explained that in prior cases where the Board invalidated
employer implementations after impasse, the employer had
implemented a “broad discretionary provision.” Decision and
Order at 8. For example, in McClatchy Newspapers, the
employer had implemented a “merit pay” clause that gave it
unlimited discretion to decide all future pay increases. Id.
(citing McClatchy Newspapers, 321 N.L.R.B. at 1391).
Similarly, in KSM Industries, the employer had reserved for
itself broad discretion over such fundamental healthcare plan
elements as the overall level of benefits – not just over which
18
specific components of a plan might be subject to future cost
increases. See id. (citing KSM Indus., 335 N.L.R.B. at 135). By
contrast, the Board explained, in this case the Company
implemented “a narrow, specific clause that, by its terms, sets
limits on the [Company’s] discretion to act.” Id. The
Company’s proposal specifically defines how future cost
increases will be shared and thus does not give the Company
“unfettered discretion to act.” Id.
In Detroit Typographical Union, where we held that the
Board had unreasonably applied McClatchy Newspapers to
preclude an employer from implementing a wage proposal, we
made clear that even “a good deal of [employer] discretion” is
insufficient to invalidate an employer’s implementation of a
proposal after impasse. 216 F.3d at 118. In that case, the
employer’s plan had specified the average annual increase in
employee pay going forward, but had retained substantial
discretion for the employer to determine whether individual
employees should receive a raise. Id. The current case is more
analogous to Detroit Typographical Union than to McClatchy
Newspapers or KSM Industries. The Company’s plan broadly
cabins its discretion over healthcare costs by requiring a fixed
cost-sharing ratio for all future increases, just as the plan in
Detroit Typographical broadly set targets for future pay
increases. The Company’s limited discretion to allocate
increases among the various elements of the healthcare plan
does not set this proposal within the narrow McClatchy
Newspapers exception any more than the employer’s discretion
over individual merit pay determinations did so in Detroit
Typographical Union – or so the Board could reasonably
conclude.
19
* * *
We deny the petitions for review and grant the Board’s
cross-petition for enforcement.
So ordered.