Dish Network Corp. v. National Labor Relations Board, 032020 FED5, 18-60522

Docket Nº:18-60522
Opinion Judge:ANDREW S. OLDHAM, CIRCUIT JUDGE
Party Name:DISH NETWORK CORPORATION, Petitioner / Cross-Respondent, v. NATIONAL LABOR RELATIONS BOARD, Respondent / Cross-Petitioner.
Judge Panel:Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges.
Case Date:March 20, 2020
Court:United States Courts of Appeals, Court of Appeals for the Fifth Circuit
 
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DISH NETWORK CORPORATION, Petitioner / Cross-Respondent,

v.

NATIONAL LABOR RELATIONS BOARD, Respondent / Cross-Petitioner.

No. 18-60522

United States Court of Appeals, Fifth Circuit

March 20, 2020

On Petition for Review and Cross-Petition for Enforcement of an Order of the National Labor Relations Board

Before SOUTHWICK, WILLETT, and OLDHAM, Circuit Judges.

ANDREW S. OLDHAM, CIRCUIT JUDGE

DISH negotiated with a labor union for more than four years. Eventually, DISH got tired and determined the parties were at an impasse. The question presented is whether the National Labor Relations Board had substantial evidence to gainsay DISH's impasse determination and penalize the employer for refusing still more years of negotiation. It did not.

I.

It's easy to see how the parties tired of this years-long negotiation. We do our best to summarize the events that turned a relatively simple dispute into a contentious multi-round National Labor Relations Board ("NLRB" or "Board") proceeding and cross-petitions for review in federal court.

A.

DISH Network Corporation ("DISH") provides its customers with satellite TV. Local branches serve as hubs for technicians who conduct installations and repairs. Before 2009, DISH generally paid its employees by the hour with minor incentives.

In 2009, DISH experimented with a new compensation scheme for employees at two of its Dallas-Fort Worth locations: Farmers Branch and North Richland Hills. Under the Quality Performance Compensation ("QPC") payment scheme, employees were paid a lower hourly wage with greater performance-based incentives. DISH's employees hated QPC. They hated it so much that they unionized to oppose it at both of the affected branches. The Communication Workers of America, AFL-CIO ("the Union"), became the designated collective bargaining representative of the affected employees.

Bargaining over an initial contract began in July of 2010. For a time, it appeared the parties might agree to eliminate QPC and replace it with a different incentive-based payment plan (known as "Pi"). According to one of the negotiators, as of March 22, 2013, "We were at Pi-they were at Pi."

Things went haywire in July 2013. That's when the Union changed its position on QPC. Instead of opposing the QPC compensation scheme-which was the entire basis for the Union's existence-the union now demanded to keep it. Why, you might wonder? In a word: Technology. As the district court explained in a related case: QPC paid employees based on performance metrics that DISH was unable to adjust due to collective bargaining. As DISH improved its processes and technologies, DISH technicians were able to complete tasks more quickly and thus earn more under the QPC incentive program. As a result, the wages of unit technicians increased by about $17, 000 between 2013 and 2015. In 2015, Union members were making, on average, $19, 000 more than their non-unionized peers.

Kinard ex rel. NLRB v. DISH Network Co., 228 F.Supp.3d 771, 775 (N.D. Tex. 2017) (quotation omitted). As the district court noted, 1 the gap between Union employees and others grew over time. Union technicians working under QPC made 14 percent more than their non-union peers in 2013, then 41 percent more in 2014, and 43 percent more in 2015. Eventually, the technicians who were making more under QPC were working less than their non-union peers. By 2015, the gap was about 200 hours on average.

In addition to creating these horizontal disparities, QPC also produced vertical anomalies. One high-earning technician with an interest in management acknowledged that moving up the company ladder would have decreased his pay. So, as one might imagine, the Union fought hard to keep QPC. DISH tried to get rid of it. After the Union's change of heart, the parties made progress on some other issues. But on QPC, they made little headway.

B.

By November 2014, the parties had conducted approximately 25 face-to-face bargaining sessions over the course of more than four years. And they were no closer to an agreement on QPC than when they started. So, at a meeting on November 18, 2014, DISH made a "final proposal" that included the elimination of QPC. The final proposal said, "[DISH] rejects continuation of QPC." Not surprisingly, that session also adjourned without an agreement. More bargaining sessions had been scheduled for early December, but the Union had to cancel those meetings. The Union asked to reschedule, and DISH's lead negotiator responded by saying that DISH had "provided a final offer for [the Union] to accept or reject." DISH further emphasized that, if the Union couldn't meet as scheduled or offer a counterproposal, DISH would "consider the bargaining to be at an impasse."

The Union responded with a counterproposal. Under the terms of the counterproposal, all technicians employed by DISH at the time would retain QPC for the length of the contract. So everyone who had QPC would keep QPC going forward. Any new hires, however, would be paid according to a different plan.

DISH rejected the Union's counterproposal and insisted that its final offer was indeed its "last, best[, ] and final offer." After finding out that the Union's lead negotiator was unavailable for the rest of December, DISH's lead negotiator asked the Union to take DISH's final offer to its members for a vote. He stated, "Once we know whether DISH's final offer is accepted or rejected, we can discuss if further bargaining is warranted." The Union refused to take the final offer to its members and asked for another bargaining session. The next day, December 31, 2014, DISH's lead negotiator replied and explained that his partner would take over for the rest of the negotiations. He also said that DISH's new representative would "be getting back to [the Union] sometime after the new year."

C.

A year's silence ensued-there was no contact between the parties until after the next new year. In January 2016, DISH's new lead negotiator sent a letter to ask whether the Union would accept DISH's final offer. The letter also stated that since that final offer was indeed "[DISH's] final offer, it does not appear at this point that further bargaining would be productive."

In response, the Union again asked for yet another bargaining session. DISH's replacement negotiator said he understood the Union's response as a rejection of DISH's final offer. He also observed that the parties had been bargaining since 2011, and that in his view, DISH and the Union were "at a standstill." He asked the Union to explain whether it disagreed; otherwise, DISH would "implement its last, best[, ] and final proposal." In response, the Union demanded another meeting. In early April 2016, DISH said that "further bargaining would be futile," and DISH would implement its final offer-and nix QPC-no later than April 23, 2016.

On April 23, 2016, DISH did exactly that. With QPC gone, unit technicians saw their wages drop significantly. Seventeen employees quit.

D.

The Union brought a complaint to the NLRB and alleged that DISH committed unfair labor practices. An administrative law judge ("ALJ") determined DISH unlawfully declared an impasse. In the ALJ's view, the Union's November 2014 counterproposal-that existing employees could keep QPC but new hires could not-constituted a "white flag." The ALJ asserted that DISH's technicians had a "very high [annual] attrition rate" that ranged from 116 percent to 13 percent. The ALJ repeatedly cited the 116 percent figure to support his premise that the relevant attrition rate was "very high." Given such high attrition rates, the ALJ surmised that under the Union's counterproposal, DISH "would have attained most of what it wanted on wages in the short term," and "eventually abolishing QPC would have become an easier selling point." That is, if a high percentage of employees left and were replaced by new employees who didn't receive QPC, then QPC would quickly become less expensive for DISH and less important to the Union. According to the ALJ, the Union's counterproposal to phase out QPC prevented impasse. And because there was no impasse, the ALJ said, DISH violated Section 8(a)(5) of the National Labor Relations Act ("the Act" or "NLRA") by eliminating QPC. The ALJ also found that DISH violated Section 8(a)(3) of the Act when it constructively discharged 17 employees. On his theory, DISH did so by presenting the employees with a Hobson's Choice of quitting or "continuing to work under greatly diminished conditions that flowed from the violation of [the employees'] rights."

The NLRB affirmed all of the ALJ's findings and conclusions. But the Board noted that the ALJ had not explicitly applied the proper test for impasse analysis. So the Board applied that test and reached the same conclusion- there was no impasse in negotiations. In its impasse analysis, the Board acknowledged that by December 2014, the parties had bargained hard for four years. Moreover, the Board recognized that QPC "remained the most important issue of disagreement." But according to the Board, "[e]ven if the parties may have been near a valid impasse then," the Union's white flag changed everything. As to constructive discharge, the Board's decision simply included a footnote adopting the ALJ's rationale and finding.

One Board member dissented. He would have found that an impasse existed at least by April 23, 2016, and that as a result of that impasse, DISH "lawfully implemented the terms of its final offer." Because that conduct was lawful, he would have found "no support" for constructive discharge under the theory proffered by the ALJ and accepted by the majority of the Board.

DISH petitioned for review of the Board's conclusions on unlawful implementation and...

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