Pegasus Broadcasting of San Juan, Inc. v. National Labor Relations Board , 82 F.3d 511 ( 1996 )

UNITED STATES COURT OF APPEALS
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
FOR THE FIRST CIRCUIT
No. 95-1966
PEGASUS BROADCASTING OF SAN JUAN, INC.,
Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD,
Respondent.
UNION DE PERIODISTAS Y ARTES GRAFICAS Y RAMAS ANEXAS,
AFFILIATED TO THE NEWSPAPER GUILD, AFL-CIO,
Intervenor.
ON PETITION FOR REVIEW AND CROSS-APPLICATION
FOR ENFORCEMENT OF AN ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
Before
Stahl, Circuit Judge,
Aldrich, Senior Circuit Judge,
and Lynch, Circuit Judge.
Radames A. Torruella with whom McConnell Valdes was on brief for
petitioner.
David A. Fleischer, Senior Attorney, with whom Frederick L.
Feinstein, General Counsel, Linda Sher, Associate General Counsel,
Aileen A. Armstrong, Deputy Associate General Counsel, and National
Labor Relations Board were on brief for respondent.
Ginoris Vizcarra De Lopez-Lay and Lopez-Lay Vizcarra & Porro on
brief for intervenor.
April 22, 1996
ALDRICH, Senior Circuit Judge. This is a petition
to review an order of the National Labor Relations Board
brought by Pegasus Broadcasting of San Juan, Inc., d/b/a
WAPA-TV (the Company), with the usual cross-application by
the Board for enforcement of its order. The Company was
charged with violation of sections 8(a)(5) and (1) of the
National Labor Relations Act (Act), 29 U.S.C. 158(a)(5)
and (1), by withholding granting wage increases. We enforce
the order.
The Unfair Practice
The Board found that for 18 years the Company had
granted annual merit-based salary increases to its reporters
based on individual evaluation, effective January of each
year. In January of 1990-92 the individual raises had varied
between 3% and 8%. In 1993 the Company, instead, granted a
flat 1%. The Board chose to regard this as a continuance of
the practice. In January of 1994, however, the Company had
begun negotiations for its first collective bargaining
agreement (CBA) with a newly certified union,1 and,
allegedly believing that to do otherwise would violate the
Act, it unilaterally discontinued all merit wage increases.
It did not notify the union, nor did it indicate it was
1. In February of 1993 the Union de Periodistas y Artes
Graficas y Ramas Anexas, Local 225, The Newspaper Guild, AFL-
CIO, CLC, was certified to represent all of the Company's
reporters and reporter-anchor persons employed at its
television facilities in Puerto Rico.
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merely temporarily suspending the program during bargaining.
In May, 1994, during bargaining, the union filed the present
charge.
If this were a novel matter we might have initial
sympathy with the Company's view that it was between the
devil and the deep blue. It claims to have suspended its
annual merit increases because awarding discretionary merit
pay increases during bargaining seemed to it to fall within
the prohibition on making changes with respect to mandatory
bargaining matters, in violation of section 8(a)(5). See
NLRB v. Katz, 369 U.S. 736, 745-46 (1962). Indeed, with
unilateral discretion, there would seem room for improper
maneuvering. Id. at 746-47. However, Katz distinguished
between merit increases that are part of an established
practice of granting annual merit reviews, and those that are
not, id. at 746, ruling that granting the latter is a
violation of the Act. Id. Here, the Board found that even
though the amounts of the increases were discretionary, it
was abandonment of the practice itself that was forbidden
under the Act. Pegasus Broadcasting of San Juan, Inc., 317
N.L.R.B. No. 165 (July 20, 1995).
The record adequately supports the Board's finding,
and we have no reason to disagree with it. Rather, we are in
full accord with the recent similar case of Daily News of Los
Angeles v. NLRB, 73 F.3d 406, 410 (D.C. Cir. 1996). See 29
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U.S.C. 158(a)(5) and (d); Katz, 369 U.S. at 743 (any
unilateral change to a mandatory subject of bargaining
violates the Act, despite good faith). We have previously
indicated that a perception of the law such as the Company
claims to have had is incorrect. See General Motors
Acceptance Corp. v. NLRB, 476 F.2d 850, 854 (1st Cir. 1973).
The Company could have avoided its alleged conundrum by
freely offering January 1, 1994 merit increases at the
bargaining table, rather than taking unilateral action
without notice to the union. See generally Daily News, 73
F.3d 406.2 See also Eastern Maine Medical Ctr. v. NLRB, 658
F.2d 1, 8-9 (1st Cir. 1981) (withholding wage increase).
The Remedy
Pursuant to its authority under 29 U.S.C. 160(c),
the Board ordered a multi-faceted remedy directing the
Company to, inter alia, (1) cease and desist from
unilaterally withholding the merit wage increases and
"interfering, restraining or coercing employees" in their
exercise of rights guaranteed by section 7 of the National
Labor Relations Act, (2) make whole each employee "for any
loss of earnings suffered because of [the Company]'s having
2. We note that Daily News covers individual raises. 73
withheld such increase," with interest, to be computed during
F.3d at 413. For raises across the board, see NLRB v.
Blevins Popcorn Co., 659 F.2d 1173, 1189 (D.C. Cir. 1981).
"the compliance stage of this proceeding,"3 and (3) post
3. Such a bifurcated procedure is common and has met with
approval. See, e.g., Holyoke Visiting Nurses Ass'n. v. NLRB,
11 F.3d 302, 308 (1st Cir. 1993). See also NLRB v. Rutter-
Rex Mfg. Co., 396 U.S. 258, 260 (1969); NLRB v. Deena
Artware, 361 U.S. 398, 411 (1960).
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notice of the violation at its facilities. Pegasus
Broadcasting, 317 N.L.R.B. No. 165, slip op. at *1, 2-3.
This is, presumptively, appropriate. The Supreme Court "has
repeatedly interpreted [ 160(c)] as vesting in the Board the
primary responsibility and broad discretion to devise
remedies that effectuate the policies of the Act, subject
only to limited judicial review," in which courts of appeal
"should not substitute their judgment for that of the Board
in determining how best to undo the effects of unfair labor
practices." Sure-Tan, Inc. v. NLRB, 467 U.S. 883, 898-99
(1984). A Board-ordered remedy "should stand unless it can
be shown that [it] is a patent attempt to achieve ends other
than those which can fairly be said to effectuate the
policies of the Act." Virginia Elec. & Power Co. v. NLRB,
319 U.S. 533, 540 (1943).
Put briefly, it is the Board -- and union --
position that, the Company having committed an unfair labor
practice by unilaterally cancelling the merit wage increase
program in January 1994, it is now for the Board to determine
the consequences, if any. The Company objects, first, on the
ground that the backpay order transgressed the Board's
authority, because the raises were always discretionary as to
amount and, as such, not amenable to Board determination.
This thought has been sufficiently answered by the Daily News
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court. 73 F.3d at 415. More interesting is the Company's
next suggestion, that the wage question is now moot.
The Company and the union completed bargaining and
entered into a CBA, effective September 22, 1995, that sets
wages retroactive to January 1, 1994. The Company asserts
that the CBA contains a so-called zipper clause providing
that it comprises "the complete agreement among the
parties."4 In this circumstance the Company would have us
say that the Board's ordered remedy, insofar as it relates to
lost wages from January 1994 plus interest, has been taken
care of by the CBA, rendering the order moot or, at the very
least, obviating the need for further backpay proceedings.
Further proceedings would necessarily involve the Board in
impermissibly interfering with the bargaining process, and
altering the terms of the CBA. See NLRB v. American Ins.
Co., 343 U.S. 395, 404 (1952); NLRB v. Insurance Agents, 361
U.S. 477, 487 (1960) (section 8(d) "prevent[s] the Board from
controlling the settling of the terms of collective
bargaining agreements"). See also H.K. Porter Co. v. NLRB,
397 U.S. 99, 103-04 (1970). The Board's short answer is that
4. The clause, submitted after oral argument upon request of
the panel, reads, in full:
A. This agreement includes the complete
agreement among the parties. This
agreement cannot be modified, expanded or
amended except by a written stipulation
properly signed by the authorized
representative of the parties.
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the issue of whether or not the CBA moots the order is one of
fact, concerning events subsequent to the Board's order, and
is not presently before us.
We agree with the Board. The CBA succeeded the
order, and was not, and never has been, presented to it. The
terms are not of record. Board counsel's courteous
affirmative answer to our question about the zipper clause
was accompanied by a statement that his answer could not bind
the Board. Nor can we take, of our own accord, the Company's
submission of the CBA. We, particularly, know that we lack
the same broad right or supervisory power over the Board that
we might have over a district court on new matter. Cf. NLRB
v. Ochoa Fertilizer Corp., 368 U.S. 318, 322 (1962). The Act
unequivocally requires that new matter go through the Board:
If either party shall apply to the court
for leave to adduce additional evidence
. . . the court may order such additional
evidence to be taken before the Board,
its member, agent, or agency, and to be
made a part of the record. The Board may
modify its findings as to the facts, or
make new findings by reason of additional
evidence so taken and filed, and it shall
file such modified or new findings, which
findings with respect to questions of
fact if supported by substantial evidence
on the record considered as a whole shall
be conclusive, and shall file its
recommendations, if any, for the
modification or setting aside of its
original order.
29 U.S.C 160(e). See also Ochoa, 368 U.S. at 322.
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Amicable adjustment by parties is of course
permissible, and encouraged. See 29 C.F.R. 101.9(a) and
101.16. However, "parties" include representatives of the
Board, and formal settlement is contingent upon the General
Counsel's approval. Id. 101.9, 101.13, 101.16, 102.52 et
seq. See NLRB v. Tennessee Packers, Inc., 390 F.2d 787, 788
(6th Cir. 1968) (collecting cases). Here, neither the union
nor the Board agrees with the Company that the issue of
compliance with the backpay order has been settled by the
CBA. This court is without jurisdiction to entertain
arguments not previously presented to the Board. See Woelke
& Romero Framing, Inc. v. NLRB, 456 U.S. 645, 665-66 (1982)
(court of appeals without jurisdiction to consider question
that could have been presented in petition for
reconsideration or rehearing before the Board). If there is
any question the proper course is for the Company to present
its proofs regarding amounts in further proceedings before
the Board. 29 U.S.C. 160(e). See, e.g., Holyoke Visiting
Nurses, 11 F.3d at 308; Fox Painting Co. v. NLRB, 16 F.3d
115, 116 (6th Cir. 1994). 29 C.F.R. 102.52 et seq.
The Company nonetheless presses that the Act bars
the Board in this particular case from conducting compliance
proceedings, or otherwise implementing the order, because it
has now fully bargained to agreement with the union over the
very amounts the Board would address. In other words, as a
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matter of law, any compliance order would operate to alter or
impermissibly supplement the terms of the CBA, in violation
of 8(d) of the Act. H.K. Porter, 397 U.S. at 103-04. This
is simply not so. The Board, in effect, found the bargaining
had not been on the now universally-demanded level playing
field. More exactly, having unfairly lacked the expected
benefits of the unilaterally cancelled merit increase
program, the union was required to start behind the line of
scrimmage. As observed in John Zink Co., 196 N.L.R.B. 942(1972), 1972 WL 12497 at *1, the employer is "enjoying the
fruits of his unfair labor practices and gaining undue
advantage at the bargaining table when he bargains about the
benefits which he has already [illegally] discontinued."
The Board's order means that the bargaining was not
free, a matter of public, as well as private, concern. Cf.
Phelps Dodge Corp. v. NLRB, 313 U.S. 177, 192-95 (1941).
What were the consequences of the order? Did the Company
change its behavior, admit, for example, merit increases for
January 1, 1994? We, of course, make no suggestion, but it
is for the Board, not the Company, to say whether the
ultimate bargaining in fact accomplished the entirety of the
Board's purpose.
The Company's petition is denied, and the Board's
application for enforcement is granted.
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