Pennsylvania State Corrections v. NLRB ( 2018 )

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 21, 2017 Decided July 6, 2018
No. 16-1328
PENNSYLVANIA STATE CORRECTIONS OFFICERS ASSOCIATION,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 16-1396
On Petition for Review and Cross-Application
for Enforcement of an Order of
the National Labor Relations Board
Michael McAuliffe Miller argued the cause for petitioner.
With him on the briefs was Edward R. Noonan.
Micah P.S. Jost, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
were Richard F. Griffin, Jr., General Counsel, John H.
Ferguson, Associate General Counsel, Linda Dreeben, Deputy
Associate General Counsel, and Robert J. Englehart,
Supervisory Attorney. Ruth E. Burdick, Deputy Assistant
General Counsel, entered an appearance.
2
Before: HENDERSON, Circuit Judge, and WILLIAMS and
GINSBURG, Senior Circuit Judges.
Opinion for the Court filed by Senior Circuit Judge
GINSBURG.
Dissenting opinion filed by Circuit Judge HENDERSON.
GINSBURG, Senior Circuit Judge: The Pennsylvania State
Corrections Officers’ Association (the Employer) petitions for
review of an order of the National Labor Relations Board
holding it had committed an unfair labor practice by failing to
bargain with the Business Agents Representing State Union
Employees Association (the Union) before terminating five
employees. The Board therefore ordered the Employer to
bargain with the Union over the effects of the discharge and to
pay back wages to the employees. The parties bargained over
the effects to an impasse, but the Board subsequently held it
was not a lawful impasse because the Employer sought to
bargain about, and reduce, the back pay amount set by the
Board. The Board therefore held the Employer was liable for
a substantially longer period of back pay. The Employer
contends (1) the Board lacks substantial evidence that it failed
to bargain over the effects to a lawful impasse, (2) the back pay
requirement is arbitrary, capricious, and contrary to law, and
(3) one of the five employees is not eligible to receive back pay.
The Board cross-appeals for enforcement of the order. We
hold the order is not supported by substantial evidence and
therefore grant the petition for review, vacate the order, and
remand the case to the Board to re-determine the back pay due
to each employee.
3
I. Background
The Employer is a union representing approximately
11,000 corrections officers. It deploys a number of corrections
officers, on leave from their jobs with the Commonwealth of
Pennsylvania, as “business agents” to represent it in
disciplinary matters involving members. The business agents
remain employees of the Commonwealth, which pays their
salaries and receives reimbursement from the Employer. In
June 2010, several of the business agents organized their own
union (the Union), which then negotiated a collective
bargaining agreement with the Employer.
For reasons not relevant here, later in 2010 the Employer
terminated five of the business agents. Four of them returned
to the corrections officer positions from which they were on
leave during their tenure at the Employer. The Employer gave
each terminated employee one week of severance pay. The
Union filed a complaint with the NLRB alleging the
Employer’s action violated the National Labor Relations Act
because the Employer did not first bargain with the Union over
the effects of the terminations.
An Administrative Law Judge conducted a hearing and
issued a recommended decision holding the failure to bargain
was an unfair labor practice. Pa. State Corrections Officers
Ass’n and Bus. Agents Representing State Union Emps. Ass’n
(PSCOA I), 358 NLRB 108, 115 (2011). He ordered what the
Board calls a Transmarine remedy, after Transmarine
Navigation Corp., 170 NLRB 389 (1968), which required the
Employer to do two things. First, upon request, it had to engage
in effects bargaining with the Union. PSCOA I, 358 NLRB at
115. Second, it had to pay the employees an amount of back
pay tied to the pace of the negotiations. Back pay would begin
to accrue “5 days after the date of [the] order” and run until the
4
Employer and the Union reached “a bona fide impasse in
bargaining.” Id. The ALJ also imposed minimum and
maximum amounts; regardless of the amount due under the
formula he prescribed, in no event could back pay be “less than
the employees would have earned for a 2-week period at the
rate of their normal wages when last in [the Employer’s]
employ” or more than “the amount they would have earned as
wages from the date they were discharged to the time they
secured equivalent employment elsewhere.” Id. The remedy
also provided that the back pay award was subject to reduction
in the amount of “any net interim earnings” the employee
received from other work during that period. Id. On March 23,
2012 the Board summarily affirmed and issued an order (the
“Initial Order”) adopting the remedies recommended by the
ALJ. Pa. State Corrections Officers Ass’n and Bus. Agents
Representing State Union Emps. Ass’n (PSCOA II), 358 NLRB
108, 108-09 (2012).
Soon thereafter the Employer and the Union began
bargaining over the effects of the terminations. On April 4,
2012, the Employer offered to pay each of the business agents
two weeks of back pay (i) without any reduction for other
wages they had earned but (ii) minus the one week of post-
termination severance pay each agent had already received and
(iii) subject to withholding the other week of back pay as a
credit to offset disputed automobile mileage expense payments
for which it had reimbursed several of the employees. The
Union counteroffered on April 11, demanding “2 weeks’
severance pay and all unused leave paid back” for each of the
five and reimbursement of additional expenses that one of them
claimed. Later the same day the Employer rejected the Union’s
counteroffer, disputed the vacation time and expense requests,
declared the parties at an impasse, and said it would implement
its April 4 offer. Thereafter neither party contacted the other,
the Employer made no payments to the employees, and the
5
Union’s bargaining authority lapsed when it became defunct on
September 28, 2012.
In late 2013 the General Counsel of the Board initiated
compliance proceedings against the Employer before the ALJ.
The General Counsel claimed the Employer’s insistence on a
credit against disputed expenses was contrary to the Initial
Order, which allowed deductions from back pay only for net
wages the employees had earned in other employment. The
General Counsel therefore alleged that the Employer had
insisted upon an “illegal” topic of bargaining, to wit, offering
back pay below the minimum set by the Initial Order, that
undercut the validity of the April 11 impasse. The Employer
acknowledged that during the bargaining it had “identified the
sum which it intended to pay as a Transmarine remedy and
offset that against previously improperly paid benefits.”
Nonetheless it moved to dismiss the compliance proceeding on
the ground that it had complied with the Initial Order by
bargaining to a bona fide impasse with the Union. It also
argued that one employee, Mr. Bill Parke, was not entitled to
any back pay because he had decided not to return to his job as
a corrections officer, and therefore had failed to mitigate his
losses. While the compliance case was pending before the
ALJ, the parties stipulated that the Employer and Union
reached an impasse in bargaining on April 11, 2012.
Following a hearing, the ALJ issued a recommended
decision concluding the Employer had not complied with the
Initial Order. Pa. State Corrections Officers Ass’n and Bus.
Agents Representing State Union Emps. Ass’n (PSCOA III),
364 NLRB No. 108, 2014 WL 2194809 (May 23, 2014). He
found “the Board’s order required a minimum of two weeks of
back pay,” the Employer “offered two weeks of back pay, but
required that there be a set off against that amount,” thereby
“[i]nsist[ing] to impasse on a position that derogates from a
6
specific Board remedy” and was therefore “an illegal subject
of bargaining.” Id. at 12. “At the least, such a position does
not constitute a mandatory subject, about which the other party
must bargain.” Id. He therefore concluded “that the impasse
of April 11 was not a valid impasse and the back pay period
continued to run thereafter” until September 28, 2012, when
the Union lost its bargaining authority; hence the back pay
period was 26 weeks. Id. With regard to Parke, the ALJ found
he failed to mitigate his lost wages by not returning to his
position as a corrections officer, which the ALJ regarded as
equivalent to his position as a business agent because the two
were “intrinsically intertwined.” Id. He therefore ordered the
Employer to pay Parke the minimum two weeks of back pay.
Id. at 13.
Both the Employer and the General Counsel of the Board
filed exceptions to the recommended decision. The Employer
challenged all the ALJ’s findings and conclusions save those
related to Parke, which the General Counsel challenged.
In 2016 the Board issued, over Commissioner
Miscimarra’s partial dissent, a Supplemental Decision and
Order adjudicating the compliance case. Pa. State Corrections
Officers Ass’n and Bus. Agents Representing State Union
Emps. Ass’n (PSCOA IV), 364 NLRB No. 108, 2016 WL
4582492 (Aug. 26, 2016). The Board and the dissenter agreed
the Transmarine remedy was mandated by the Board, and
therefore a topic over which the parties could not bargain. Id.
at 3; id. at 6 (Miscimarra, Comm’r, dissenting). The Board
found the Employer had attempted to “bargain about the
Transmarine backpay remedy”; because “from the outset, the
[Employer had] proposed reducing the Transmarine amount,”
it “in effect demanded a modification of the Transmarine
remedy.” Id. at 3-4. From these facts the Board concluded the
Employer “never made a proposal that met its effects-
7
bargaining obligation” and therefore did not reach a lawful
impasse. Id. at 3-4. It also held that, “even if the [Employer]
was permitted to bargain over the Board’s Transmarine back
pay remedy,” its “insistence to impasse on treating 1 week of
Transmarine back pay as a credit ... was impermissible”
because “the Transmarine remedy ... requires the [Employer]
to pay employees a minimum of 2 weeks’ back pay minus only
interim earnings.” Id. at 4. “In sum, in the effects bargaining,
the [Employer] was not entitled to demand that the
Transmarine remedy be reduced from 2 weeks of backpay to 1
by claiming the second week as a credit.” Id.
Commissioner Miscimarra interpreted the Employer’s
offer as being more generous than required by Transmarine,
wherefore he would have held the impasse was reached
lawfully. Id. at 6-9. He did so in part because “the
Transmarine backpay order provided that ‘net interim earnings
would be deducted from the gross amount of backpay’”
whereas the Employer “offered the affected employees ‘two
weeks pay without deductions for interim earnings.’” Id. at 9
(quoting the record). He also would have credited the parties’
stipulation that the Employer and the Union had bargained to
impasse. Id. at 7-8.
The Board unanimously reversed the ALJ’s findings and
conclusions regarding Parke. Applying Board precedents
under which the equivalence of two jobs is determined by
comparing pay, working conditions, and duties, the Board
found Parke’s blue collar corrections officer position was not
equivalent to his white collar union job, citing in particular the
differences in pay and in the duties of the jobs. Id. at 5. The
Board therefore held Parke had not failed to mitigate and was
entitled to the same back pay award – 26 weeks of pay minus
net interim earnings – as the other employees. Id.
8
II. Analysis
This court “will uphold a decision of the Board unless it
relied upon findings that are not supported by substantial
evidence, failed to apply the proper legal standard, or departed
from its precedent without providing a reasoned justification
for doing so.” E.I. DuPont de Nemours & Co. v. NLRB, 682
F.3d 65, 67 (D.C. Cir. 2012); see 29 U.S.C. § 160(f). When
reviewing the Board’s factual findings, we must determine
whether “the evidence supporting that decision is substantial,
when viewed in the light that the record in its entirety
furnishes.” Universal Camera Corp. v. NLRB, 340 U.S. 474,
488 (1951). We will affirm the legal conclusions of the Board
so long as they are not arbitrary and capricious. See Mail
Contractors of Am. v. NLRB, 514 F.3d 27, 31, 34-36 (D.C. Cir.
2008).
The Employer challenges three aspects of the
Supplemental Order. First, it argues there is not substantial
evidence to support the Board finding that the parties did not
reach a lawful impasse on April 11. Second, it argues the
Supplemental Order is arbitrary and capricious because it
impermissibly intrudes into the substantive aspects of the
bargaining, confuses the procedural requirement to bargain
with a substantive requirement to offer specific terms, and
constitutes a fine that exceeds the Board’s remedial authority
under Section 10(c) of the Act, 29 U.S.C. § 160(c). Third, it
argues the Board erred when it found Parke eligible to receive
the full award of back pay, which we interpret as an argument
that there is not substantial evidence to support that finding.
A. Substantial Evidence
The Employer argues there is not substantial evidence to
support the Board’s findings concerning the validity of the
9
impasse and the associated Transmarine remedy. The Board
argues preliminarily that we lack jurisdiction to hear the
argument because it “did not appear in the [Employer’s] filings
with the Board.” It argues in the alternative that it “reasonably
found” the parties did not reach a lawful impasse.
1. Jurisdiction
The Board’s jurisdictional objection is that the Employer
never urged the substantial evidence argument before it.
Section 10(e) of the Act bars us from considering any
“objection that has not been urged before the Board ... unless
the failure or neglect to urge such objection shall be excused
because of extraordinary circumstances.” 29 U.S.C. § 160(e);
see Woelke & Romero Framing, Inc. v. NLRB, 456 U.S. 645,
665-66 (1982).
The Board argues, following Alden Leeds, Inc. v. NLRB,
812 F.3d 159, 167-68 (D.C. Cir. 2016), that “section 10(e) bars
review of any issue not presented to the Board, even where the
Board has discussed and decided the issue.” It claims the
Employer did not raise any of its present arguments, including
the substantial evidence challenge, at any point before the
Board. The Employer argues it had properly raised the
argument in its exceptions and that, as in Trump Plaza
Associates v. NLRB, 679 F.3d 822, 830 (D.C. Cir. 2012), these
exceptions “sufficiently apprised [the Board], for the purpose
of section 10(e),” of its objection that there is not substantial
evidence to support the Board’s findings.
In assessing a claim of forfeiture under § 10(e), “the
critical question is whether the Board received adequate notice
of the basis for the objection.” Camelot Terrace, Inc. v. NLRB,
824 F.3d 1085, 1090 (D.C. Cir. 2016) (cleaned up). “Although
briefing and argument before the Board are desirable ... section
10
10(e) does not require such procedures.” Local 900, Int’l
Union of Elec., Radio and Mach. Workers, AFL-CIO v. NLRB,
727 F.2d 1184, 1192 (D.C. Cir. 1984). An appellant may
adequately notify the Board of the basis for its objection by
“articulating [it] in its exceptions to the ALJ’s decision.” Davis
Supermarkets, Inc. v. NLRB, 2 F.3d 1162, 1175 (D.C. Cir.
1993); see Consol. Freightways v. NLRB, 669 F.2d 790, 793
(D.C. Cir. 1981). That is precisely what happened here. For
the obverse situation, see BPH & Co. v. NLRB, 333 F.3d 213,
219-220 (D.C. Cir. 2003) (holding a petitioner satisfied § 10(e)
by briefing an argument before the Board despite it’s not
having been in the petitioner’s exceptions).
Two exceptions the Employer put before the Board are
pertinent. First, the Employer excepted “[t]o the ALJ’s finding
that [its] position ... was contrary to the minimum back pay
remedy in the Board’s [Initial] Order.” Second, the Employer
excepted “[t]o the ALJ’s failure to find that ... the Board’s
[Initial] Order in the underlying case tolled back pay at the
point that the parties were at a lawful impasse, e.g. on or before
April 11, 2012.” It did not repeat either point in its brief before
the Board.
We need not debate whether, in the abstract, these
exceptions provided adequate notice to the Board; we know
they did because the Board addressed them in the Supplemental
Order. First, the Board said it “affirm[ed] the [ALJ’s] finding
that the parties’ April 11, 2012 impasse was not a lawful
impasse and therefore did not toll the back pay period.”
PSCOA IV, 364 NLRB No. 108, at 3. It explained that the
Initial Order required the Employer to “(1) bargain over the
effects of the [termination], and (2) give affected employees
‘limited backpay’ for a period beginning 5 days after the date
of the Board’s Order and ending at the earliest” of several
enumerated conditions. Id. It found the Employer had
11
“propos[ed] during effects bargaining that the parties bargain
about the Transmarine backpay remedy” and “insist[ed] to
impasse on its offer to the Union of ‘backpay … for a 2-week
period’ with 1 week’s pay deducted … and the other 1 weeks’
pay treated as a credit.” Id. The Employer “in effect demanded
a modification of the Transmarine remedy” because “from the
outset, the [Employer] proposed reducing the Transmarine
amount” and as such it “never made a proposal that met its
effects-bargaining obligation.” Id. at 3-4. Second, the Board
said the Employer’s back pay proposal was “impermissible”
because “in the effects bargaining, the [Employer] was not
entitled to demand that the Transmarine remedy be reduced
from 2 weeks of backpay to 1 by claiming the second week as
a credit.” Id. at 4.
The Board thus responded to – and thereby acknowledged
its awareness of – both the relevant exceptions. Under our
precedents, this is sufficient to satisfy Section 10(e). See BPH
& Co., 333 F.3d at 220 (holding petitioner had “adequately
apprised the Board” of an argument, and therefore “compl[ied]
with section 10(e),” because it had briefed the argument before
the Board and the Board had “acknowledged” as much in the
order under review). Moreover, because the arguments were
properly presented to the Board, Alden Leeds is inapposite and
the Board’s reliance upon it is misplaced.
Our dissenting colleague would hold we do not have
jurisdiction to consider the Employer’s substantial evidence
argument for two reasons. First, she would hold the Employer
did not use the words “gross” and “net” in its exceptions before
the Board, and therefore did not state its objection with the
necessary precision. Dissenting Op. at 8 (“[T]he Employer
nowise made the specific point that one week’s gross unearned
wages exceeded two weeks of net pay and ipso facto produced
a lawful impasse.”); see id. at 1, 6, 9. Second, she would hold
12
the argument forfeit because it was not properly presented to
us. See id. at 9-11.
Regarding the former objection, we have never before
required a litigant to frame a challenge to a finding of the Board
with such precision. On the contrary, “we have not required
that the ground for the exception be stated explicitly in the
written exceptions filed with the Board” so long as “the ground
for the exception [is] evident by the context in which the
exception is raised.” Trump Plaza Assocs., 679 F.3d at 829(Henderson, J.) (cleaned up) (quoting Parsippany Hotel Mgmt.
Co. v. NLRB, 99 F.3d 413, 417 (D.C. Cir. 1996)). Nor have we
required a litigant to state a substantial evidence objection with
great precision; for example, we have deemed sufficient an
argument merely implied by the arguments actually presented
to the Board. See id. at 830 (holding Section 10(e) satisfied
because the argument made before the Board “necessarily
includes” the argument made on appeal); BPH & Co., 333 F.3d
at 220 (Henderson, J.) (holding a substantial evidence objection
satisfied Section 10(e) “notwithstanding its not being
addressed expressly to the conduct alleged” in a settlement
agreement the Board cited as evidence of an unfair labor
practice). Therefore under our precedents the Employer’s
exception to the specific Board finding that it was not “at a
lawful impasse ... on or before April 11,” for the specific reason
that its bargaining position was not “contrary to the minimum
back pay remedy in the Board’s [Initial] Order,” was more than
sufficient.
Regarding the latter objection, our dissenting colleague
scrutinizes the Employer’s brief and finds only two “bare
assertions” and no legal reasoning. Dissenting Op. at 9. We
find much more there: In a section that begins with the heading
“The NLRB’s findings of fact are not supported by substantial
evidence on the record as a whole,” the Employer argues it
13
“made a lawful severance pay proposal during effects
bargaining” and “never attempted to negotiate downward the
Board-ordered backpay remedy.” In the following three
paragraphs, the Employer argues “the Board majority’s
conclusion that [the Employer] merely attempted to negotiate
downward the Board-ordered backpay remedy is not supported
by substantial evidence on the record as a whole,” “the Union
plainly did not view [the Employer’s] proposal as an attempt to
negotiate down the Board-ordered remedy,” the Employer
“complied [with] the effects bargaining order and negotiated to
a lawful, stipulated impasse in good faith,” and “[t]he Board’s
findings to the contrary must be reversed.” That is enough for
us.
2. Merits
Satisfied that the argument is properly before us, we turn
to the Employer’s claim there is not substantial evidence to
support the Board’s finding that the Employer and the Union
did not reach a lawful impasse on April 11, 2012.
Notwithstanding the Employer’s representation to the ALJ and
the Board that its offer to the Union concerned severance pay,
the Board found the Employer sought “to bargain to impasse
about Transmarine backpay” and “in effect demanded a
modification of the Transmarine remedy” by “demand[ing]
that the Transmarine remedy be reduced from 2 weeks of
backpay to 1.” The Employer argues it “never attempted to
negotiate downward the Board-ordered back pay remedy,”
which it acknowledges “the parties cannot modify,” and that its
offer “exceeded the minimum Transmarine requirement.”
Therefore the critical question is whether substantial
evidence supports the Board finding that the Employer
bargained about the Transmarine remedy, and more
specifically whether in the course of any such bargaining the
14
Employer sought the Union’s agreement to accept less than the
Transmarine amount the Board specified in the Initial Order.
If the record were unambiguous on this point, perhaps it would
be sufficient to rely, as does our dissenting colleague, solely
upon a semantic analysis of the terms offered in the course of
negotiations.1 Here, because the Board’s finding is a
mathematical proposition, namely that the Employer sought to
pay less than the Transmarine amount set by the Board, a
quantitative analysis is more appropriate. If the Employer
offered to pay more than the Transmarine amount, then it
complied with the Initial Order. If it offered to pay less, then
it did not. An offer to pay employees back pay equal to twice
the Transmarine amount is not an attempt to negotiate about
the Transmarine amount; rather, it is an offer to pay the
Transmarine amount, as required, and a substantial increment
on top of that.
What, then, was the Transmarine amount? The
Transmarine back pay period began on March 28, 2012, five
days after entry of the Initial Order. See PSCOA I, 358 NLRB
at 109, 115. As of April 11, 2012, when the parties reached an
impasse in bargaining, the Transmarine back pay period was
14 days. Therefore the formula fixed the Transmarine amount
1
Our colleague asserts that (1) her analysis is “substantive,” not
semantic, because she would “hold the Employer to the precise
meaning of the technical term[]” it used in its offer, i.e., back pay,
and (2) “severance pay and backpay are different things.” Dissenting
Op. at 13 n.3, 16-17 n.5. We are unconvinced for two reasons. First,
discerning “the precise meaning” of a word is the very archetype of
a semantic analysis. Second, because “severance payments may be
deducted from an employer’s backpay obligation,” id. at 13 n.3
(citing W.R. Grace & Co., 247 NLRB 698, 699 n.5 (1980)),
severance pay and back pay are not distinct when, as here, the
severance pay disbursed by the Employer may be credited toward its
back pay obligation.
15
at two weeks’ wages, net of any other earnings, which
coincidentally was also the minimum Transmarine amount
imposed by the Board, viz., the amount the employees “would
have earned for a 2-week period .... less any net interim
earnings.” Id. Consequently, the Employer was not trying to
bargain “about” the Transmarine remedy or to “reduce” its
Transmarine obligation if, as of April 11, it had offered to pay
the employees at least two weeks of net wages.
Based upon the record before us, it is clear the Employer
had done that and therefore the parties reached a lawful
impasse on April 11. The Board focused simply upon the
number of weeks of wages required or offered, i.e., two, but as
Commissioner Miscimarra recognized in his dissenting
opinion, the parties discussed two different measures of wages,
gross wages and net wages. On April 11 the Board’s
Transmarine remedy stood at two weeks’ net wages. The
Employer had offered back pay “for a two week period,” which
is to say two weeks’ gross wages, less a deduction for “the one
week [of severance] pay” it had already given each of the
business agents, with the other week to “act as a credit to reduce
the amount” of any improper expense claims it had paid. This
distinction between gross and net wages makes all the
difference.
Consider the case of Shawn Hood, former president of the
Union. The parties stipulated that his salary when he was
terminated was $3,194.52 biweekly. After being terminated
Hood returned to his position as a correctional officer for the
Commonwealth of Pennsylvania. The General Counsel
estimated Hood’s interim net earnings from his new position
were $17,086.90 for the thirteen weeks following his
termination, or $2,628.75 biweekly. Therefore the
Transmarine amount due to Hood – two weeks of Employer
salary less two weeks of net interim earnings – is $565.77.
16
Meanwhile, the Employer offered to pay Hood his “normal
wages [at the Employer] without deducting net interim
earnings [from the Commonwealth] for a 2-week period,”
which as just explained is $3,194.52. It also noted Hood had
already received one week of gross salary, or $1,597.26, as
severance pay. The Board readily concedes, citing W.R. Grace
& Co., 247 NLRB 698, 699 n.5 (1980), that the Employer could
lawfully credit severance pay towards its Transmarine
obligation.
Therefore, the Employer’s offer to pay Hood one week of
gross back pay, which he had already received, exceeded the
Transmarine amount of two weeks of net pay. In other words,
the Employer had already satisfied its back pay obligation
when negotiations reached an impasse; offering Hood another
week of wages, whether as a credit or otherwise, could not
violate the back pay provision in the Initial Order. The same is
likely true for several, if not all, the other terminated business
agents.
Our dissenting colleague does not stop to consider the
dollar value of either the Employer’s offer or its Transmarine
obligation but simply interprets the term “back pay” in the offer
to mean the amount due under the Board’s Transmarine
remedy. Thus would she find the Employer “bargain[ed] about
Transmarine backpay instead of severance pay,” “insisted to
impasse about the form of Transmarine backpay,” and reached
an “impasse on backpay matters.” Dissenting Op. at 13
(emphasis omitted). In this telling, “back pay” is synonymous
with the Transmarine amount and any proposed offset from
back pay necessarily means the Employer sought “a more
favorable bargain,” id. at 14, than the Transmarine remedy
permitted.
17
A controversy concerning money, if we are to get to the
bottom of it, requires of us more than a semantic treatment. So
too does the substantial evidence test, which requires us to
undertake “a review of the whole record ... tak[ing] into
account whatever in the record fairly detracts from the Board’s
conclusions.” Healthbridge Mgmt., LLC v. NLRB, 798 F.3d
1059, 1078 (D.C. Cir. 2015) (Henderson, J., concurring in part)
(cleaned up). Having made the requisite calculations, which
neither the ALJ nor the Board bothered to do, we necessarily
conclude there is not substantial evidence to support the
Board’s finding.
Accordingly, we must vacate the Supplemental Order and
remand the case to the Board to assess more carefully whether
the Employer’s offer to the Union exceeded the Transmarine
amount. In so doing we leave to the Board the various
questions that affect that assessment, such as how to treat the
Employer’s proposed credit and whether to account for the fact
the Employer did not claim Parke owed any disputed mileage.
B. Arbitrary and Capricious Review
Because we must vacate the Supplemental Order for want
of substantial evidence, we have no occasion to consider the
Employer’s alternative argument that the Supplemental Order
is arbitrary and capricious.
C. Parke’s Eligibility for Back Pay
Finally, the Employer challenges the evidentiary support
for the Board’s finding that Parke did not fail to mitigate his
lost wages and therefore is eligible to receive the full award of
back pay. Under the Initial Order – the validity of which is not
at issue here – Parke is due a minimum of two weeks of net
pay. During the compliance case the ALJ found Parke had
18
failed to mitigate but nonetheless “is entitled to the minimum
2 weeks of back pay set forth in the Board’s order in the
underlying case.” PSCOA III, 364 NLRB No. 108 at 13. On
appeal the Board found Parke did not fail to mitigate and
therefore awarded him the full 26 weeks of back pay. PSCOA
IV, 364 NLRB No. 108 at 5.
On remand the Board may find the Employer reached a
lawful impasse on April 11 and therefore owes each employee
only two weeks of back pay. If that occurs, then the question
of Parke’s mitigation would be moot, as the back pay award
due to him – two weeks – might be the same regardless whether
he mitigated his lost wages. Under these circumstances, the
question whether Parke mitigated his losses is not yet ripe for
our review.
III. Conclusion
For the reasons set out above, we grant the petition for
review, vacate the Supplemental Order, and remand the case to
the Board for further proceedings.
So ordered.
KAREN LECRAFT HENDERSON, Circuit Judge, dissenting:
My colleagues conclude that the Pennsylvania State
Corrections Officers Association (Employer) offered its
terminated employees “at least two weeks of net wages” as
backpay under Transmarine Navigation Corp., 170 NLRB 389(1968), “and therefore the parties reached a lawful impasse” in
effects bargaining. Maj. Op. 15. I see two problems with this
conclusion. First, it relies on an argument the Employer never
made: that for each employee, “one week of gross salary”
“likely” “exceeded the Transmarine amount of two weeks of
net pay.” Maj. Op. 16. Second, the Employer’s payment of
two weeks’ backpay did not ipso facto mean that the parties
reached a lawful impasse or even that the Employer satisfied
its full backpay obligation, which exceeded two weeks if no
lawful impasse was reached until later. In my view, even
assuming the Employer paid its terminated employees two
weeks of backpay by virtue of one week’s gross wages,
substantial evidence demonstrates that there was no lawful
impasse within two weeks. Indeed, as I read the record, the
National Labor Relations Board (Board) reasonably found that
the backpay period ran for twenty-six weeks. I would enforce
its decision and deny the Employer’s petition for review. 1
Accordingly, I respectfully dissent.
I. BACKGROUND
The majority opinion recounts much of the relevant
background. But it downplays circumstances that, to my
mind, illuminate the problems mentioned above. I therefore
summarize what I believe to be the factual and legal highlights.
1
My colleagues do not pass upon the Employer’s claim that
one of the discharged employees, Bill Parke, is ineligible for
backpay. Maj. Op. 17-18. For that reason, I spill no ink on the
matter except to note that I discern no basis for disturbing the Board’s
finding that Parke is eligible.
2
A. BARGAINING ORDER
The Employer discharged five of its business agents. At
the time, it paid them one week’s wages it later characterized
as unearned. But it did not bargain about the effects of the
discharges with the business agents’ collective-bargaining
representative, the Business Agents Representing State Union
Employees Association (Union). As no one now disputes, the
discharges were lawful but the failure to bargain beforehand
about their effects violated the National Labor Relations Act
(Act).
The Administrative Law Judge (ALJ) recommended that
the Board remedy the violation by (1) ordering the Employer
to bargain with the Union about the effects of the discharges
and (2) requiring the Employer to pay backpay per
Transmarine. The Board adopted both components of the
ALJ’s recommended remedy. As to the second component,
the Board ordered the Employer to pay the discharged business
agents “backpay at their normal wages from 5 days after the
date of this order until the earliest of the following conditions”:
an agreement in effects bargaining; “a bona fide impasse in
bargaining”; the Union’s failure to bargain in a timely fashion;
or the Union’s failure to bargain in good faith. 358 NLRB
108, 115 (2012); see id. at 109. “[I]n no event,” however, was
the backpay amount to be less than two weeks’ wages minus
any interim earnings. Id. at 115; see NLRB Casehandling
Manual, Pt. 3, Compliance Proceedings § 10528.7 (July 2017)
(enumerating standard conditions of Transmarine backpay),
perma.cc/D89T-LC4A.
I pause here to point out that Transmarine backpay is not
an end in itself. It is “designed to restore at least some
economic inducement for an employer to bargain” about the
effects of terminating its employees even after it terminates
3
them. O.L. Willis, Inc., 278 NLRB 203, 205 (1986); see
Kirkwood Fabricators, Inc. v. NLRB, 862 F.2d 1303, 1307 (8th
Cir. 1988) (backpay restores “bargaining strength” employees
“would have had” absent employer’s violation); Yorke v.
NLRB, 709 F.2d 1138, 1145 (7th Cir. 1983) (it “create[s] an
incentive for the [employer] to bargain in good faith” and
“discourage[s] premature impasse”). In Transmarine, the
employer violated the Act by closing a facility without
bargaining over the closure’s effects on employees. 170
NLRB at 389. The Board reasoned that “a bargaining order
alone cannot serve as an adequate remedy” for such a violation
after “the collective strength of the employees’ bargaining unit
[has] dissipated.” Id. at 389-90. Accordingly, and on the
theory that the wrongdoing employer, not his employees,
“should bear the consequences of his unlawful conduct,” the
Board devised the backpay requirement “to recreate in some
practicable manner a situation in which the parties’ bargaining
position is not entirely devoid of economic consequences for”
the employer. Id.
B. EMPLOYER’S ATTEMPT AT EFFECTS BARGAINING
Effects bargaining typically involves “things like
severance packages, neutral recommendation letters, or
benefits payouts.” Fallbrook Hosp. Corp., 360 NLRB 644,
655 (2014), enforced, 785 F.3d 729 (D.C. Cir. 2015); see Sea-
Jet Trucking Corp., 327 NLRB 540, 540 (1999) (it can involve
“moving expenses” and “transportation costs”), enforced, 221
F.3d 196 (D.C. Cir. 2000) (unpublished table decision); Times
Herald Printing Co., 315 NLRB 700, 702 (1994) (it can
involve “pension fund payments, health insurance coverage
and conversion rights”). In this case, by contrast, the
Employer sought to bargain about the particulars of
Transmarine backpay itself.
4
On April 4, 2012, 2 representatives of the Employer and
the Union met to bargain. Counsel for the Employer
memorialized the meeting. Joint Appendix (JA) 213-14.
According to his memorandum:
• The Employer reminded the Union that it had paid the
business agents one week’s unearned wages when it
discharged them. JA 214.
• The Employer also asserted that the business agents had
for years collected “invalid and unsubstantiated
mileage reimbursement[s].” Id.• The Employer offered to pay two weeks of backpay in
the form of two separate one-week setoffs. Id. It
proposed to treat the unearned wages it had paid at the
time of discharge as one week of backpay. Id. And it
proposed to “credit” the second week of backpay by
deducting its amount from whatever the Employer
might seek in a civil suit claiming the business agents
had collected “invalid and unsubstantiated mileage.”
Id.Counsel sent the Union an offer letter to the same effect, noting
further that the Employer proposed to pay the two weeks of
backpay “without deducting [any] net interim earnings for
[that] period.” JA 222 (emphasis omitted).
By letter on April 10, the Union protested any setoff for
mileage, claiming there was no proof the reimbursements were
invalid. The Union made a counteroffer seeking, for each
business agent, two weeks’ severance pay plus compensation
for unused leave. On April 11, the Employer rejected the
2
Specific dates mentioned in this opinion were in 2012.
5
Union’s counteroffer, unilaterally declared impasse and
“implement[ed]” the aforementioned setoffs against two weeks
of backpay. JA 225. The Employer and the Board General
Counsel later stipulated that the Employer and Union “reached
an impasse” on April 11, insofar as neither side ever contacted
the other “to engage in further bargaining.” JA 252; see JA
69-70 (Union vice president testified that, because Employer
had effectively said “‘This is it,’” Union “was left with nothing
to bargain for”). On September 28, the Union went defunct
and was no longer available to bargain.
C. COMPLIANCE PROCEEDING
The Board Regional Director initiated a compliance
proceeding, alleging that no condition for ending the backpay
period had ever occurred: the parties never reached an
agreement or lawful impasse and the Union timely bargained
in good faith. Therefore, according to the Regional Director,
the backpay period ran for twenty-six weeks: from March 28
(five days after the Board’s bargaining order) until September
28 (the first day the Union was no longer available to bargain).
In response, the Employer asserted that the parties reached
a lawful impasse on April 11 and, thus, the backpay period ran
for exactly two weeks (from March 28 to April 11), not twenty-
six. The Employer did not support that assertion with any
meaningful argument. As relevant here, it did not allege that,
standing alone, the one week of unearned wages it had already
paid the business agents “exceeded the Transmarine amount of
two weeks of net pay.” Maj. Op. 16. Much less did it claim
that the unearned wages, standing alone, satisfied its
bargaining obligation. Maj. Op. 13-17.
The ALJ held an evidentiary hearing. At the outset, he
asked the Employer whether it had “insisted . . . to the point of
impasse” on the setoff for mileage reimbursements. JA 45.
6
The Employer answered: “It was certainly part of the impasse,
Yes, Your Honor.” JA 46. The ALJ asked the Employer
whether it was arguing that the setoff was “a mandatory
subject” on which it could properly insist to impasse. Id.“That’s right,” the Employer responded. Id.The ALJ issued a recommended decision concluding that
the Employer “derogate[d] from” the Board’s bargaining order
in insisting to impasse on the setoffs for unearned wages and
mileage reimbursements. JA 309. The ALJ found that the
setoffs against backpay were not mandatory subjects about
which the Union was required to bargain. Id. Thus, in the
ALJ’s view, the Employer “poisoned the well by insisting on
improper conditions” and “the impasse of April 11 was not a
valid impasse and the back pay period continued to run
thereafter.” Id.The Employer filed exceptions to the ALJ’s decision. It
argued that the ALJ erred in finding that the setoffs were
“contrary to the minimum back pay remedy in the Board’s
[o]rder.” JA 273. Again, however, it did not contend that,
standing alone, the one week of unearned wages it had already
paid the business agents “exceeded the Transmarine amount of
two weeks of net pay,” Maj. Op. 16, and ipso facto satisfied its
bargaining obligation, Maj. Op. 13-17. Nor did it advance any
such contention in its supporting brief to the Board. Rather,
the Employer again argued simply that its proposed setoffs
against Transmarine backpay were subjects on which it could
properly insist to impasse and that, accordingly, there was a
lawful impasse on April 11.
Over a dissent, the Board affirmed the ALJ’s findings that
there was no lawful impasse on April 11 and that “the backpay
period ran for 26 weeks, from March 28 to September 28.”
364 NLRB No. 108, at 3 (2016). In the Board’s view, the
7
Employer “conflated” its bargaining obligation with its
backpay obligation in “bargain[ing] about the Transmarine
backpay remedy” instead of severance pay and other
mandatory subjects. Id. Indeed, the Board concluded that
the Employer improperly insisted to impasse on subjects
related to backpay, “defeat[ing] the purpose of the remedy.”
Id. The end result was that the Employer “never made a
proposal that met its effects-bargaining obligation.” Id. at 4.
As an alternative holding, the Board found that “even if
the [Employer] was permitted to bargain over the Board’s
Transmarine backpay remedy,” it could not insist to impasse
on a one-week setoff for mileage reimbursements. 364 NLRB
No. 108, at 4. The Board reasoned that, in seeking such a
“credit” against a potential award “in a private lawsuit,” the
Employer “in effect demanded a modification of the
Transmarine remedy.” Id. (citing, inter alia, The State
Journal, 238 NLRB 388, 388 (1978), which had held that
backpay “is not a private right but is a public right granted to
vindicate” “the public interest in preventing and deterring
unfair labor practices”).
II. ANALYSIS
The procedural road was long and winding but the
questions before us are straightforward. Did the Employer
satisfy its bargaining obligation? That is, did it bargain to a
lawful impasse? And if not, how many weeks of backpay
does it owe? In my view, substantial evidence supports the
Board’s answers to these questions: no, no and twenty-six
weeks, respectively. My colleagues conclude otherwise
because, by their calculations, the unearned wages the business
agents received at the time of discharge exceeded two weeks of
net pay and so produced a lawful impasse. But the Employer
8
forfeited that argument, which cannot support vacatur in any
event.
A. FORFEITURE
My colleagues observe that an employer “may adequately
notify the Board of the basis for its objection by articulating it
in its exceptions to the ALJ’s decision.” Maj. Op. 10 (brackets
and internal quotation omitted). That is true as far as it goes
but it does not go far. The exceptions must be “sufficiently
specific to apprise the Board that an issue might be pursued on
appeal.” Trump Plaza Assocs. v. NLRB, 679 F.3d 822, 829
(D.C. Cir. 2012) (internal quotation omitted); see Parsippany
Hotel Mgmt. Co. v. NLRB, 99 F.3d 413, 417 (D.C. Cir. 1996)
(“[T]he ground for the exception [must] be evident by the
context in which [it] is raised.” (internal quotation omitted)).
In the exceptions on which my colleagues rely, the Employer
nowise made the specific point that one week’s gross unearned
wages exceeded two weeks of net pay and ipso facto produced
a lawful impasse. Nor did the Employer’s supporting brief
supply any argument or authorities to that effect. Cf. Camelot
Terrace, Inc. v. NLRB, 824 F.3d 1085, 1090-91 (D.C. Cir.
2016) (“Companies’ written exceptions and supporting briefs
together preserved their argument” because, inter alia, briefs
included on-point argument heading and additional statements
that “apprised the Board”).
My colleagues take pains to note that, in decisions I have
participated in, we have not “required a litigant to state a
substantial evidence objection with great precision.” Maj. Op.
12 (citing Trump Plaza and BPH & Co. v. NLRB, 333 F.3d 213,
220 (D.C. Cir. 2003)). I have not forgotten. The Employer,
however, was not simply imprecise. Nor did it merely omit
magic words like “gross” and “net.” Rather, it utterly failed
to suggest to the Board, in any form or fashion, that payment
9
of one week’s unearned wages fully satisfied its bargaining and
backpay obligations. Indeed, I am confident the argument
never so much as dawned on the Employer. Had the
Employer thought one week’s unearned wages, standing alone,
fully satisfied its obligations, it would have had no need to
propose—let alone insist on—a second week’s setoff for
mileage reimbursements.
My colleagues conclude that, even if the exceptions were
not sufficiently specific “in the abstract,” they must have
“provided adequate notice to the Board” because “the Board
addressed them.” Maj. Op. 10. I disagree. Yes, the Board
addressed and denied the exceptions, such as they were: it
found that there was no lawful impasse on April 11 because the
Employer “demanded a modification of the Transmarine
remedy” instead of making “a proposal that met its effects-
bargaining obligation.” 364 NLRB No. 108, at 4. But the
Board did not consider—because the Employer did not raise—
any argument that one week’s unearned wages, standing alone,
exceeded two weeks of net pay and so produced a lawful
impasse.
For that matter, the Employer does not sufficiently
preserve any such argument in this Court. The closest it
comes are two bare assertions, nine pages apart, that it “offered
two weeks[’] pay without deductions for interim earnings,”
Pet’r’s Br. 37 (internal quotation and emphasis omitted), and
that the offer “exceeded the minimum requirement of
Transmarine,” Pet’r’s Br. 28. Such disjointed statements—
adorned by no analysis of their legal significance—does not a
reasoned contention make. See N.Y. Rehab. Care Mgmt., LLC
v. NLRB, 506 F.3d 1070, 1076 (D.C. Cir. 2007) (“It is not
enough merely to mention a possible argument in the most
skeletal way, leaving the court to do counsel’s work.” (internal
quotation omitted)); Seattle Opera v. NLRB, 292 F.3d 757, 764
10
n.8 (D.C. Cir. 2002) (party does not preserve argument by
mentioning fact without explaining its “legal significance”);
see also Jones v. Kirchner, 835 F.3d 74, 83 (D.C. Cir. 2016)
(“[J]udges are not like pigs, hunting for truffles buried in briefs
or the record[.]” (internal quotation omitted)).
My colleagues point to the Employer’s assertion that it
“made a lawful severance pay proposal.” Maj. Op. 13
(quoting Pet’r’s Br. 36). But the Employer’s assertion that it
offered severance pay is not an argument that one week’s
unearned wages satisfied the backpay obligation, much less an
argument that satisfying the backpay obligation automatically
produced a lawful impasse. See infra note 3 (severance pay
and backpay are distinct). Nor does the Employer preserve the
argument by claiming it “never attempted to negotiate
downward the Board-ordered backpay remedy.” Maj. Op. 13
(quoting Pet’r’s Br. 36). As best I can tell from the
Employer’s briefing—which is, at minimum, opaque—that
claim is another way of saying only that the two setoffs
together permissibly equalled two weeks’ backpay.
Oral argument was especially illuminating. Counsel for
the Employer did not himself plow the ground in which the
majority plants vacatur. Instead, when prodded about whether
the record contains “any indication” that the one week of gross
unearned wages “was less than the two weeks’ net pay required
by Transmarine,” counsel responded: “You’re right, Your
Honor, I don’t believe that that’s in the record.” Oral Arg.
Recording 6:10-6:37. Counsel noted that this was a point the
dissenting Board member made, id. at 7:03-7:07, and he
“agree[d]” with it, id. at 7:07-7:10, 8:01-8:09. But counsel
never said anything else about it, which is unsurprising given
that it does not appear in the briefs. And because it does not
appear in the briefs, Board counsel was understandably
gobsmacked. Id. at 24:19-24:35 (“It’s, um, it’s an interesting
11
argument, Your Honor, and it’s an argument that should’ve
been placed before the Board. . . . I don’t read [the] exception[s]
as remotely raising the issue that you’re describing here.”); id.
at 25:16-25:28 (“They certainly didn’t elaborate on it in any
way that put the Board on notice. . . . And that’s why the subject
hasn’t been briefed or argued in any sort of detail before the
Court.”).
B. MERITS
Preserved or not, the argument my colleagues endorse
lacks merit. I do not disagree with their calculations; I assume
arguendo that the Employer in effect paid the business agents
two weeks’ net backpay when, at the time of discharge, it paid
them one week’s gross wages. Maj. Op. 14-16. To me,
however, it does not follow that the Employer and Union
“therefore” reached a lawful impasse. Maj. Op. 15.
As an initial matter, I am not sure why my colleagues treat
the “Transmarine amount” as though it were a set amount the
bargainers knew with exactitude ex ante. See, e.g., Maj. Op.
13-14 (focusing on “whether in the course of . . . bargaining the
Employer sought the Union’s agreement to accept less than the
Transmarine amount”). Recall that, under the bargaining
order, the backpay period ran from March 28 “until the earliest
of the following conditions”: an agreement, a lawful impasse
or the Union’s failure to bargain in a timely fashion or in good
faith. 358 NLRB at 115. In the usual case, I doubt the parties
know at the time of bargaining how long the backpay period
will last—and thus how much backpay the employer will
owe—because they do not know with precision when there will
be an agreement, a lawful impasse or a failure to timely bargain
in good faith.
Here, by contrast, the Employer predetermined a few days
into the bargaining process that the backpay period was going
12
to cover exactly two weeks. JA 214 (April 4 memorandum of
Employer’s counsel referred to “the two week backpay
period”). And sure enough, exactly two weeks into the period,
the Employer unilaterally declared an impasse. JA 225 (April
11 letter to Union). None of this was “coincidental[].” Maj.
Op. 15. It neatly dovetailed with the bargaining order’s
proviso that “in no event” was the amount of backpay to be less
than two weeks’ wages minus any interim earnings. 358
NLRB at 115.
My colleagues see no problem with this tactic.
Apparently, what matters to them is that the Employer met the
backpay amount it effectively set for itself in declaring
impasse. Again, I disagree. The key question is whether the
impasse was lawful. As I understand the majority’s
reasoning:
 The April 11 impasse was lawful because the Employer
paid two weeks of backpay.
 The backpay period lasted two weeks because the
parties reached a lawful impasse on April 11.
This circular logic unravels if in fact the backpay period lasted
longer than two weeks. And the backpay period did last
longer than two weeks if the April 11 impasse was not lawful—
or not “bona fide,” to use the terms of the bargaining order.
358 NLRB at 115. To me, the lawfulness of the impasse does
not turn on whether and to what extent the Employer offered or
paid backpay, contra Maj. Op. 14 (theorizing that “[i]f the
Employer offered to pay more than the Transmarine amount,
then it complied with the [bargaining order],” no further
questions asked). Instead, it turns on whether the Employer
made any offer that met its antecedent obligation “to bargain
13
with the Union” about “the effects of its decision to discharge
employees.” 358 NLRB at 115 (emphasis added).
I agree with the Board that the Employer never made such
an offer. 364 NLRB No. 108, at 4. As the Board explained,
id. at 3, the Employer “conflated” its bargaining obligation
with its backpay obligation by bargaining about Transmarine
backpay instead of severance pay and other mandatory
subjects. Indeed, as the Employer admitted to the ALJ, it
insisted to impasse about the form of Transmarine backpay.
JA 45-46 (when ALJ asked Employer whether it “insisted
upon” mileage setoff “to the point of impasse,” Employer said
“[i]t was certainly part of the impasse, Yes, Your Honor”).
This impasse on backpay matters defeated backpay’s very
purpose: to induce the Employer to bargain about severance
pay, unused leave and other benefits—not backpay itself. 3
O.L. Willis, 278 NLRB at 205; Transmarine, 170 NLRB at
389-90; see Kirkwood Fabricators, 862 F.2d at 1307; Yorke,
709 F.2d at 1145; see also supra pp. 2-3.
3
Lest there be confusion, severance pay and backpay are
different things. As the Board explained, severance is paid “in
addition to Transmarine backpay.” 364 NLRB No. 108, at 3. The
Board provided the following illustration: “At the end of 3 weeks of
effects bargaining pursuant to Transmarine, a union and a respondent
agree to 1 week’s severance pay. The discriminatees will receive 1
week’s severance pay and 3 weeks’ Transmarine backpay.” Id. at
3 n.7. Granted, severance payments may be deducted from an
employer’s backpay obligation because the Board treats such
payments as “interim earnings.” W.R. Grace & Co., 247 NLRB
698, 699 n.5 (1980). But neither the Employer nor the majority cites
any law suggesting that effectively paying backpay via a severance
deduction satisfies an employer’s obligation to bargain about
severance and related matters.
14
The Employer’s own litigating position should have
doomed its case. Before both the ALJ and the Board, the
Employer argued that Transmarine backpay—or, more
precisely, the manner in which it was to be paid—was a
mandatory subject on which the Employer could properly insist
to impasse. JA 45-46, 287. The Board rejected that
argument, 364 NLRB No. 108, at 3, and for good reason.
Mandatory subjects are “matters that vitally affect wages,
hours, and other terms and conditions of employment.”
Cushman & Wakefield, Inc., 360 NLRB 42, 45 (2013) (internal
quotation omitted). Backpay is not such a subject but a
remedy that enables effective bargaining about such subjects.
It is common sense, really. Ordinarily an employer must
provide “notice and an opportunity to bargain” about vital
terms and conditions before or contemporaneously with a
change in those terms and conditions. Washoe Med. Ctr., Inc.,
337 NLRB 202, 202 (2001); see, e.g., Transmarine, 170 NLRB
at 389 (employer violated Act by closing facility without
timely bargaining over closure’s effects on employees). Here,
before the discharges, no backpay requirement yet existed
because the Employer had not yet violated the Act. Because
the point of backpay is to “restore[]” the “status quo ante with
respect to bargaining power,” Times Herald Printing Co., 315
NLRB 700, 702 (1994), and because backpay is not a subject
(mandatory or otherwise) of bargaining before a violation, the
Employer cannot be permitted to use it as a negotiating chip
after a violation, thereby striking a more favorable bargain
precisely because the Employer violated the Act.
Retreating from the position it staked out before the Board,
the Employer told us at oral argument that backpay—or at least
a mileage setoff for backpay—is a permissive, not mandatory,
subject of bargaining. Oral Arg. Recording 11:05-11:34.
This was a crucial change in stance given that “[i]nsistence
upon matters not within the scope of mandatory bargaining as
15
a condition to any agreement constitutes a refusal to bargain in
good faith.” Teamsters Local Union No. 515 v. NLRB, 906
F.2d 719, 723 n.3 (D.C. Cir. 1990) (citing NLRB v. Wooster
Div. of Borg-Warner Corp., 356 U.S. 342, 349 (1958)). To
sum up, the Employer admitted to the ALJ that it insisted to
impasse on a mileage setoff. It then admitted to us that it could
not properly insist to impasse on a mileage setoff. Case
closed, it seems to me. 4
Still, while I am on the subject of the Employer’s litigating
position, I make a final observation for the sake of
completeness: the arguments the Employer advances in this
Court are no stronger than the unpreserved claim the majority
endorses.
First, the Employer argues that the Board cannot “sit in
judgment upon the substantive terms” offered in effects
bargaining. Pet’r’s Br. 23 (emphasis omitted) (quoting H.K.
Porter Co. v. NLRB, 397 U.S. 99, 106 (1970)). True, but the
Board can decide the lawfulness of an impasse. See, e.g.,
NLRB v. Cent. Mach. & Tool Co., 429 F.2d 1127, 1129-30
(10th Cir. 1970) (“[T]he H.K. Porter case does not appear to
withdraw the Board’s authority to determine whether a . . .
4
As the Board explained, even if backpay in general were a
mandatory subject, a mileage setoff would not be. 364 NLRB No.
108, at 4 (Employer’s “insistence to impasse on treating 1 week of
Transmarine backpay as a credit against an anticipated recovery in a
future lawsuit was impermissible” because it sought to transform
public right into private one); see The State Journal, 238 NLRB at
388 (because backpay “is not a private right but is a public right
granted to vindicate” “the public interest in preventing and deterring
unfair labor practices,” “the Board has refused to permit an employer
to reduce the amount of backpay by the amount of its private
claims”).
16
violation has occurred by a company’s insistence upon
including a nonmandatory bargaining subject to a point of
impasse.”).
Second, the Employer argues that its proposed setoffs
constituted “an offer of severance,” Pet’r’s Br. 13, and that it
lawfully insisted to impasse on such “severance,” Pet’r’s Br.
25-26, 30-31. Virtually all the evidence is to the contrary.
The Employer’s counsel’s memorialization of the April 4
meeting described the offer, six times, as involving “backpay.”
JA 213-14. The memo nowhere mentioned severance pay.
The Employer’s offer letter to the Union described the offer,
five times, as involving “backpay.” JA 222-23. The letter
nowhere mentioned severance pay. Granted, for a fleeting
moment in testimony before the ALJ, the Union president
described the offer as involving “severance pay.” JA 50. A
few moments later, however, he described it as involving “back
pay.” JA 53. There is no indication that in either instance he
gave any thought to the legal distinction between the two. His
equivocal testimony, two years after the fact, does not fairly
detract from the weight of the Employer’s counsel’s
contemporaneous memo and the offer letter itself. 5
5
For reasons I have discussed, see supra pp. 2-3, 13 & note 3,
the distinction between severance pay and backpay is substantive,
not “semantic,” Maj. Op. 14, 17. Contrary to the majority’s
apparent view—and even accounting for the Union president’s
equivocal testimony—it is by no means unreasonable to hold the
Employer to the precise meaning of the technical terms its counsel
used (and pointedly did not use) during the negotiations themselves.
See RESTATEMENT (SECOND) OF CONTRACTS § 202(3) (1981)
(“Unless a different intention is manifested, . . . technical terms and
words of art are given their technical meaning when used in a
transaction within their technical field.”). Nor do I see any basis to
discount the terms used in the contemporaneous memo and offer
17
Third, the Employer argues in its reply brief—but not
sufficiently in its opening brief—that the Union lacked
capacity to bargain because of a decertification petition filed
by unit employees (but later dismissed by the Regional
Director). Compare Pet’r’s Br. 11-12, 35 (mentioning
petition in passing), with Pet’r’s Reply Br. 16-22 (finally
raising argument about it). Even apart from the Employer’s
forfeiture of the argument, see Bellagio, LLC v. NLRB, 863
F.3d 839, 848 (D.C. Cir. 2017) (argument first raised in reply
is forfeited), it fails because a pending decertification petition
(let alone a dismissed one) does not affect a union’s bargaining
status, Levitz Furniture Co., 333 NLRB 717, 727 (2001).
Fourth, and finally, the Employer argues that “the Union,
the General Counsel and the [Employer] all stipulated” that the
parties “reached a lawful impasse” on April 11. Pet’r’s Br. 17;
see Oral Arg. Recording 12:06-12:15 (asserting stipulation said
“that a lawful impasse had been reached”). This is a gross
misstatement that one hopes was unintentional. The
stipulation was between the Employer and General Counsel
only. JA 251-53. It was a “stipulation of facts” signed during
Board proceedings two years after bargaining and more than
eighteen months after the Union ceased to exist. JA 251; see
JA 253. In short, the Union never stipulated that the parties
reached an impasse, lawful or otherwise.
letter merely because the Employer made an unsupported, self-
serving, post hoc “representation” to the Board that the offer
“concerned severance pay.” Maj. Op. 13 (apparently referring to
Employer’s Board brief at JA 284). It should go without saying that
the offer letter is the best evidence of the offer, cf. FED. R. EVID.
1002, whereas an argument in litigation is no evidence at all, cf.
United States v. Williams, 212 F.3d 1305, 1312 (D.C. Cir. 2000) (it
is “standard” practice to tell jurors as much).
18
As for the General Counsel, he stipulated only that the
parties “reached an impasse” in the factual sense: after April
11, neither side contacted the other “to engage in further
bargaining.” JA 252. The stipulation was careful to state that
it did not address “whether or not impasse was reached in
April.” Id. From context, I take the quoted language to mean
that the General Counsel did not concede the impasse was
lawful. After all, on the same day he entered the stipulation,
see JA 30, he argued to the ALJ that “although the parties had
reached an impasse [on April 11], such impasse was not
lawful,” JA 40-41 (emphasis added).
In my view, neither the Employer nor the majority has
offered any good reason to second-guess the Board’s findings
that the April 11 impasse was not lawful and that, as a result,
the backpay period lasted for twenty-six weeks. Accordingly,
I respectfully dissent.