Daily News of Los Angeles, a Div. of Cooke Media Group, Inc. v. N.L.R.B.
| Decision Date | 19 January 1996 |
| Docket Number | I,No. 95-1047,AFL-CI,95-1047 |
| Citation | 73 F.3d 406 |
| Parties | 151 L.R.R.M. (BNA) 2242, 315 U.S.App.D.C. 306, 64 USLW 2512 DAILY NEWS OF LOS ANGELES, a Division of Cooke Media Group, Inc., Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent, Los Angeles Newspaper Guild, Local 69,ntervenor. |
| Court | U.S. Court of Appeals — District of Columbia Circuit |
Thomas P. Burke argued the cause, for petitioner, with whom Jamie L. Johnson was on the briefs.
David A. Fleischer, Senior Attorney, argued the cause, for respondent, with whom Linda R. Sher, Associate General Counsel, and Aileen A. Armstrong, Deputy Associate General Counsel, were on the brief. Paul J. Spielberg and Ellen Greenstone entered appearances.
Before: EDWARDS, Chief Judge, HENDERSON and ROGERS, Circuit Judges.
Opinion for the Court filed by Chief Judge EDWARDS.
Between 1986, when the Daily News ("Company") purchased its daily newspaper operation, and 1989, when the National Labor Relations Board ("NLRB" or "Board") certified the Los Angeles Newspaper Guild, Local 69, AFL-CIO ("Guild" or "Union"), as the collective bargaining representative of the Company's editorial employees in Washington, D.C. and eight locations in California, the Company followed its predecessor's policy of giving annual merit increases to employees in the editorial department. However, following the Union's certification, the Company unilaterally decided to terminate its practice of granting merit increases. In response, the Guild filed a complaint with the NLRB.
The Board determined that the Daily News had unlawfully refused to bargain, in violation of section 8(a)(5) of the National Labor Relations Act ("NLRA" or "Act"), 1 by discontinuing the merit-increase policy without first negotiating to impasse with the Guild. The Board rejected the Company's argument that the wage increases were totally discretionary, and, therefore, could be terminated at any time. Instead, the Board ruled that the program of granting annual, merit-based wage increases based on performance evaluations had become a fixed term or condition of employment that could not be discontinued except pursuant to negotiations with the Union. On the basis of this finding of an unfair labor practice, the Board ordered the Daily News to award employees back pay representing the difference between their current salaries and the approximate amount of their salaries absent the unlawful termination of the merit-increase policy.
On appeal, the Company contends that the Board's decision should be reversed because a discretionary program can never become a fixed term or condition of employment. However, the Company's argument is misguided in suggesting that a term or condition of employment can never be a mandatory subject of bargaining so long as it carries the appellation "discretionary." Indeed, the proper analysis in a case such as this one does not begin with the label assigned to a particular employee benefit, but, rather, with the character of the program at issue. Here, the Board found that the Company had an established practice of annually evaluating the merit of each employee based upon standard performance evaluations, and then determining an appropriate increase based only on the merit criterion. The program was in no sense whimsical, for each employee was assured an annual evaluation and a merit increase if his or her evaluation warranted it. The only discretion retained by the Company was with respect to the amount of the increases to be given to employees who earned good evaluations. Thus, the Board properly determined that the Company could not discontinue the entire program based on non-merit considerations, at least not without first negotiating with the Guild. Because there is substantial evidence in the record as a whole to support the Board's findings, and because we find no infirmity in the legal analysis underlying the Board's judgment, the Company's petition for review is denied, and the Board's cross-application for enforcement is granted.
On January 1, 1986, the Daily News took over the operation of a daily newspaper it had purchased from another company, the Valley News. At that time, the Company adopted its predecessor's policy of annually evaluating the performance of each editorial department employee on or about the anniversary of the employee's date of hire or last promotion, and using the performance review as the basis for increasing salaries. These merit increases could range from no increase to a substantial raise, depending upon the employee's evaluation.
Although the amount of the increase was discretionary, the timing of the reviews was fixed, and the sole criterion for determining the amount of the increase was merit (except for those employees who had already reached the top pay for their job classification). Moreover, a vast majority of all eligible employees received some kind of raise each year. For example, in 1986, 81.5% of the employees who received performance evaluations received merit raises; in 1987, 82.7% received merit raises; and in 1988 and the first five months of 1989, 89% received merit raises. 2 Petitioner/Cross-Respondent's Appendix ("P.A.") 430-31.
On May 8, 1989, the Board certified the Guild as the collective bargaining representative for all of the Company's full-time and regular part-time editorial department employees in Washington, D.C. and at eight locations in California. Bargaining negotiations between the Guild and the Company commenced on June 14, 1989. The parties agreed to defer bargaining on economic issues until all non-economic issues had been negotiated. Company negotiator Tom Burke also stated that, pending negotiations, the Company did not intend to continue with the merit program. P.A. 427. The Guild's Administrative Officer, James Smith, stated that he considered the salary increases to be an existing condition of employment that the Company could not unilaterally discontinue, and that, during the course of bargaining, the Daily News should continue to grant the increases to all employees on their anniversary dates. Burke replied that the Company would continue to consider whether it would discontinue the increases during the course of bargaining. Id. at 427-28.
Sometime after the June 14 bargaining session, the Daily News decided that it would not give any raises to employees who were part of the collective bargaining unit ("unit employees"). The Company concedes that this decision was not based on any merit determinations regarding the individual employees. Indeed, at least two unit employees were informed at their annual performance appraisal that, based on their performance, they would have received increases, but that the Company would not give raises because of the Union negotiations. Tr. of Hearing (Dec. 12, 1989) 27, 33-34, reprinted in P.A. 148, 154-55.
At the second bargaining session, held on July 5, 1989, Burke announced that the Company had decided to discontinue granting merit raises to unit employees. The Company did, however, continue to issue annual performance appraisals to all employees, and also continued to grant merit increases to those employees outside of the collective bargaining unit.
The Guild filed a complaint with the NLRB, which issued a Decision and Order on August 27, 1991. Daily News of Los Angeles, 304 N.L.R.B. 511, 1991 WL 171476 (1991) ("DNLA I "). The Board found that the merit-increase program, although discretionary as to the precise amount of each individual increase, had nevertheless become a fixed term or condition of employment that, pursuant to NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962), could not be changed without bargaining. While acknowledging the Company's discretion in setting the amount of any raises, the Board nevertheless determined that the Company was not free to discontinue the policy, and so was required to continue its prior practice of giving unit employees increases based on individualized merit assessments. Id. at 511.
Further, the Board rejected the Company's argument that the Guild had waived any possible objections to changes in the increase program by agreeing to the employer's exercise of discretion in granting the increases. The Board ruled that the Guild had only agreed to the exercise of discretion concerning the amount of the raises, but did not waive an objection to the discontinuance of the entire program. Id.
Accordingly, the Board determined that the Company had violated section 8(a)(5) of the NLRA by unilaterally withholding the annual merit increases from employees. The Board ordered the Company to cease and desist from this unfair labor practice and to make the unit employees whole for any monetary losses sustained because of the Company's unlawful conduct. Id. at 516.
On appeal, this court questioned whether the Board's core holding might be inconsistent with prior Board precedent. The court noted that, in other cases where there has been "an established pattern of increases that [was] fixed as to timing but discretionary as to amount," the Board has appeared to treat such programs as lacking the character of an established practice. Daily News of Los Angeles v. NLRB, 979 F.2d 1571, 1575 (D.C.Cir.1992). Of particular concern to the court was the Board's decision in Anaconda Ericsson Inc., 261 N.L.R.B. 831, 1982 WL 24497 (1982). The court also noted that the Supreme Court's decision in Katz, on which the Board had relied, did not necessarily dictate the result reached by the Board because Katz only addressed the case of an employer who unilaterally decides to give a discretionary merit wage increase, whereas, in this case, the Daily News was attempting to discontinue its policy. See 979 F.2d at 1573. Ac...
To continue reading
Request your trial
-
N.L.R.B. v. Beverly Enterprises-Massachusetts, Inc.
...awarded is a mandatory subject of bargaining. See Daily News of Los Angeles, 315 NLRB 1236, 1239, 1994 WL 731261 (1994), enforced, 73 F.3d 406 (D.C.Cir.1996); Central Maine Morning Sentinel, 295 NLRB 376, 378-79, 1989 WL 224140 (1989) ("[T]he exercise of some discretion is not fatal to the ......
-
Raytheon Network Centric Systems, 25-CA- 092145
...of Los Angeles, 315 NLRB 1236, 1237 (1994) (emphasis in original) (quoting NLRB v. Dothan Eagle, 434 F.2d 93, 98 (5th Cir. 1970)), enfd. 73 F.3d 406 (D.C. Cir. 1996), cert. denied 519 U.S. 1090 (1997). See also Post-Tribune Co., 337 NLRB 1279, 1280 (2002) (same). [21] Post-Tribune Co., 337 ......
-
Wilkes-Barre Hosp. Co. v. Nat'l Labor Relations Bd.
...relationship to negotiate in good faith over 'wages, hours, and other terms and conditions of employment.' " Daily News of L.A. v. NLRB , 73 F.3d 406, 410 (D.C. Cir. 1996) (quoting 29 U.S.C. § 158(d) ); see also 29 U.S.C. § 158(a)(5). Section 8(a)(1) makes it an unfair labor practice for an......
-
Advanced Life Sys. Inc. v. Nat'l Labor Relations Bd.
...to lead to "automatic wage increases" for individual employees. Katz , 369 U.S. at 746, 82 S.Ct. 1107 ; see Daily News of Los Angeles v. NLRB , 73 F.3d 406, 412 n.3 (D.C. Cir. 1996) (expressing doubt that simply awarding pay raises at fixed intervals would alone be sufficient to bring them ......
-
Time to Rein in the Nlrb
...it cho[oses], we doubt that discontinuing the policy [will result] in a violation of Section 8(a)(5)." Daily News of Los Angeles v. NLRB, 73 F.3d 406, 412 n.3 (DC Cir. 1996). Wage increases that "are fixed as to timing but discretionary in amount do not become part of the employee's reasona......