N.L.R.B. v. McClatchy Newspapers, Inc. Publisher of The Sacramento Bee, AFL-CI

CourtUnited States Courts of Appeals. United States Court of Appeals (District of Columbia)
Citation964 F.2d 1153
Docket NumberAFL-CI,No. 90-1602,CL,I,90-1602
Parties140 L.R.R.M. (BNA) 2249, 296 U.S.App.D.C. 32, 121 Lab.Cas. P 10,167 NATIONAL LABOR RELATIONS BOARD, Petitioner, and Northern California Newspaper Guild, Local 52, The Newspaper Guild,ntervenor, v. McCLATCHY NEWSPAPERS, INC. PUBLISHER OF THE SACRAMENTO BEE, Respondent.
Decision Date23 July 1992

Linda Dreeben, Supervisory Atty., N.L.R.B., with whom Jerry M. Hunter, Gen. Counsel, and Aileen A. Armstrong, Deputy Associate Gen. Counsel, Washington, D.C., were on the brief, for petitioner.

Allen W. Teagle, with whom John Skonberg, San Francisco, Cal., was on the brief, for respondent.

James B. Coppess, with whom David Jonathan Cohen, Washington, D.C., and Marsha Berzon, San Francisco, Cal., were on the brief, for intervenor.


Separate statements filed by Circuit Judge HARRY T. EDWARDS, Circuit Judge SILBERMAN and Circuit Judge KAREN LeCRAFT HENDERSON.



The National Labor Relations Board ("Board") petitions for enforcement of its decision in McClatchy Newspapers, Inc., 299 N.L.R.B. No. 156 (1990). A majority of the panel holds that the Board's justification for its finding that "the Respondent's failure to bargain with the Union about the timing and amount of merit increases constitutes a violation of Section 8(a)(5) and (1) of the [National Labor Relations] Act," id. at 7, does not constitute reasoned decisionmaking under past Board and court interpretations of the Act. Judge Silberman believes that the Board's explanation is inadequate Set out below are statements of Judge Edwards and Judge Silberman, who separately concur in this order. Also set out below is a statement of Judge Henderson, who concurs in the denial of the petition for enforcement but dissents from the decision to remand the case to the Board.

                under those precedents.   We therefore deny the petition for enforcement.   Judge Edwards and Judge Silberman agree that the case must be remanded to the Board for further consideration

So Ordered.

HARRY T. EDWARDS, Circuit Judge:

The National Labor Relations Board ("NLRB" or "Board") petitions for enforcement of an order finding that McClatchy Newspapers, Inc. ("Newspaper" or the "employer") violated sections 8(a)(1) and (5) of the National Labor Relations Act ("NLRA" or the "Act"), 29 U.S.C. § 158(a)(1), (5) (1988). In negotiations with the union representing a unit of its employees, McClatchy proposed a merit pay system that was designed to give the employer virtually complete, unilateral control of all employee salaries. Employer and union representatives bargained in good faith to impasse over the proposal; following impasse, the Newspaper implemented the proposal and awarded merit pay increases to selected employees. The Board found this to be a violation of the duty to bargain over individual wages.

The precise issue to be resolved in this case is whether, after bargaining in good faith to impasse, an employer may unilaterally implement a merit pay proposal and, pursuant thereto, change individual employees' wage rates without further notice to or bargaining with the union. While seemingly narrow in scope, this is a deceptively difficult question, reaching to the heart of labor law. And, although this particular question only recently has been raised, it occupies a space between several well-established doctrines of labor law. First, proposals covering wages (including systems of merit pay) are mandatory subjects of bargaining, with respect to which the parties must bargain in good faith in an effort to reach agreement. Second, even when a party is guilty of bad-faith bargaining, the Board may not compel either side to accede to a particular proposal. Third, following good-faith negotiations, the impasse rule applies and a party generally may take unilateral action with respect to a mandatory subject of bargaining over which impasse has been reached. Fourth, the Supreme Court has held that unilateral action may not be taken with respect to nonmandatory subjects of bargaining; furthermore, the Court has ruled that there are certain limited, categorical exceptions (covering the statutory right to strike, extension of arbitration beyond the term of an agreement, union security, and withdrawal from multiemployer bargaining) which are beyond the scope of the impasse rule.

In this case, the Board ignored the impasse rule; but, in finding the employer guilty of a refusal to bargain, the Board neither claimed to rely on any explicit statutorily-protected right, nor did it purport to hold that merit pay warranted status as a categorical exception to the impasse rule. Rather, the Board, in a wholly unconvincing opinion, rested on a badly misguided theory of "waiver," holding that the Newspaper was guilty of an unfair labor practice because it had acted without securing a necessary waiver of the union's right to bargain with regard to each individual employee's merit increase.

On the present record, I agree that we cannot enforce the Board's order. The result reached by the Board is arguably defensible; but it rests on a completely inadequate theory and fails to recognize the settled legal doctrines which bound this case.


The essential facts in this case are undisputed and can be found in the NLRB's decision below, McClatchy Newspapers, Inc., 299 N.L.R.B. No. 156 (1990), reprinted in Joint Appendix ("J.A.") 311. The following brief summary is offered merely to put the case in focus.

McClatchy Newspapers, Inc. is the publisher of the Sacramento Bee, the largest daily and Sunday paper in Sacramento, California. Northern California Newspaper Guild, Local 52 (the "Guild"), represents several hundred editorial, advertising and telephone switchboard employees at the Bee. The parties have had a collective bargaining relationship for nearly 50 years, McClatchy Newspapers, CA No. 21429, at 2 (ALJ decision), J.A. 324 ("ALJ Decision "), and their most recent collective bargaining agreement, in effect from April 14, 1984, to April 13, 1986, provided for minimum salaries and step increases for each of several job classifications. The agreement also included a merit pay system for employees who had reached the top step of their classification and had worked at the Bee for more than one year. Although the Guild had the right to comment on the merit review and appeals process, the Newspaper retained ultimate discretion over the timing and amount of individual merit pay increases. 1 Additionally, while an employee could request union representation in an appeal over a merit pay decision, the Newspaper's judgments on merit increases were not subject to the collective bargaining agreement's grievance and arbitration provisions.

On February 13, 1986, two months before the extant collective bargaining agreement was to expire, the parties began negotiations with an eye toward a new contract. The initial wage proposals were diametrically opposed: the Guild requested a 25% wage increase, elimination of the merit pay system, and integration of cost-of-living adjustments into the step structure; the Newspaper proposed eliminating the guaranteed minimums and the step structure and sought to use merit increases exclusively, without notice to or participation by the Guild.

The parties quickly agreed that they should begin with noneconomic issues and return to economic issues later. After approximately 20 meetings, on November 11, 1986, the parties again took up the wage proposals. The Newspaper and Guild positions remained far apart, and in December the parties invited a federal mediator to participate in the stalemated negotiations. The parties continued to bargain in good faith in the presence of the mediator in January and February, but no agreement could be reached. At the February meeting, the Newspaper made a "last, best and final offer" that would have set guaranteed minimum wages at the current levels and would have "grandfathered" existing employees at the top step of the old wage structure. The Guild previously had rejected this proposal because only 10% of unit employees would be guaranteed salary increases, leaving substantially all salary adjustments within the employer's merit pay plan. As under the old merit pay program, the Guild would not have the right to comment on individual employees before their merit reviews were completed. Employees also could not grieve or arbitrate disagreements with the Newspaper's judgments on merit increases.

The union rejected the proposal and recommended to its membership that it vote against the Newspaper's offer. The membership did so. At the parties' last meeting on March 5, 1987, the Guild "made counterproposals, including a return to the combined negotiated wage and merit arrangement in the expired contract." McClatchy Newspapers, 299 N.L.R.B. No. 156, at 3, J.A. 313. The Newspaper countered with a proposal concerning unit exclusions. The parties reached a deadlock and negotiations were terminated. The next day, the Newspaper posted its merit plan and other terms and conditions consistent with its final offer. "Subsequently, the [Newspaper] granted merit pay increases to some unit employees without prior discussion with the Union." Id.

After individual merit increases were implemented without union consent, the Guild filed an unfair labor practice charge with the NLRB. The charge initially was dismissed, but the NLRB's National Appeals Office ordered it reinstated. Thereafter, an Administrative Law Judge found for the Guild and the Newspaper appealed to the Relying on its decision in Colorado-Ute Electric Association, 295 N.L.R.B. No. 67 (1989), enforcement denied, 939 F.2d 1392 (10th Cir.1991), petition for cert. filed, 60 U.S.L.W. 3582 (U.S. Feb. 25, 1992) (No. 91-1284...

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