PG Publishing Co Inc v. NLRB ( 2023 )

PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_______________
Nos. 22-2774 and 22-2868
_______________
PG PUBLISHING CO., INC., DBA Pittsburgh Post-Gazette,
Petitioner in 22-2774
v.
NATIONAL LABOR RELATIONS BOARD,
Petitioner in 22-2868
_______________
On Petition for Review and Cross-Application for
Enforcement of an Order of the National Labor Relations
Board
(NLRB Case No. 06-CA-233676)
_______________
Argued
June 29, 2023
Before: JORDAN, KRAUSE and SMITH, Circuit Judges
(Filed: September 26, 2023)
_______________
Alex R. Beining
Taylor Brailey
Brian M. Hentosz [ARGUED]
Littler Mendelson
625 Liberty Avenue
EQT Plaza, 26th Fl.
Pittsburgh, PA 15222
Richard C. Lowe
Michael D. Oesterle
King & Ballow
315 Union Street
1100 Union Street Plaza
Nashville, TN 37201
Counsel for PG Publishing Co., Inc.,
DBA Pittsburgh Post Gazette
Ruth E. Burdick
Elizabeth A. Heaney
Joel Heller [ARGUED]
National Labor Relations Board
1015 Half Street SE
Washington, DC 20570
Counsel for National Labor Relations Board
Patrick K. Lemon
Joseph J. Pass
Justin T. Romano
Jubelirer Pass & Intrieri
219 Fort Pitt Boulevard – 1st Fl.
Pittsburgh, PA 15222
2
Maneesh Sharma [ARGUED]
AFL-CIO
815 16th Street NW, 6th Fl.
Washington, DC 20006
Counsel for Graphic Communications
International Union and GCC International
Brotherhood of Teamsters Local 24M 9N
_______________
OPINION OF THE COURT
_______________
JORDAN, Circuit Judge.
“Never pick a fight with anyone who buys ink by the
barrel and paper by the ton.” 1 That advice recalls a time when
newspapers were, as the name suggests, always printed on
paper. Things are different now. This case arises in the
aftermath of a decision by PG Publishing Co., Inc. (the “Post-
Gazette” or the “Newspaper”) to forsake the printed page and
begin the move to an all-digital format. That decision led to
the termination of two paperhandlers represented by Local
24M/9N of the Graphic Communications International Union
(the “Union”). The layoffs took place during negotiations
1
The quotation is of uncertain origin and apocryphally
attributed to the likes of Benjamin Franklin, Mark Twain, and
H.L. Mencken. See I Never Argue with a Man Who Buys Ink
by the Barrel, QuoteInvestigator (Apr. 24, 2018)
https://quoteinvestigator.com/2018/04/24/ink/https://quoteinv
estigator.com/2018/04/24/ink/ (tracing competing claims of
authorship).
3
between the Union and the Post-Gazette for a successor to their
collective bargaining agreement (“CBA”), which, by its terms,
had ended on March 31, 2017. The paperhandlers were among
twenty-four Post-Gazette employees covered by a provision of
the expired CBA that had guaranteed those employees five
shifts per week “for the balance of the Agreement, ending
March 31, 2017[.]” (J.A. at 217.)
The Union filed a charge of unfair labor practices with
the National Labor Relations Board, and the Board’s General
Counsel unsuccessfully pursued the matter before an
Administrative Law Judge. A divided Board reversed the ALJ,
finding an unfair labor practice. The matter is now before us,
with the General Counsel seeking to enforce the Board’s
decision, and the Post-Gazette petitioning to have it
overturned. 2 The parties’ arguments implicate two principles
identified in the Supreme Court’s decisions under the National
Labor Relations Act (“NLRA”). The first, exemplified by
Litton Financial Printing Division v. N.L.R.B., is that an
employer commits an unfair labor practice under the NLRA if,
after the expiration of a CBA, the employer alters the post-
expiration status quo during negotiations for a successor CBA
without first negotiating with its employees to an overall
impasse on that successor CBA. 501 U.S. 190, 206-07 (1991).
The second is that, under First National Maintenance Corp. v.
N.L.R.B., employers are privileged to make non-bargainable
entrepreneurial decisions about the scope and direction of their
2
We will refer to the body whose decisions we are
reviewing as the Board (e.g., “the Board held ….”) and the
party appearing before us on the Board’s behalf as the General
Counsel (e.g., “the General Counsel argues ….”).
4
business and, with respect to such a decision, the employer
need not bargain with the union about whether to make the
decision; it need only bargain about the “effects” of the
decision once made. 452 U.S. 666, 681-82, 684 (1981).
The Board majority held that the five-shift guarantee in
the expired CBA had become part of the status quo, and the
layoffs, therefore, violated the guarantee and constituted an
unfair labor practice because the Post-Gazette had not
bargained to impasse with the Union on a new CBA. The
majority reached that holding even though it acknowledged
that the Newspaper’s decision to go to an all-digital format is,
indeed, a non-bargainable “core entrepreneurial decision.”
(J.A. at 32 n.18.) The Board dissent, by contrast, concluded
that the five-shift guarantee was not part of the status quo and
that, instead, First National Maintenance dictated the required
scope of bargaining – namely bargaining about the effects of
the all-digital decision – before the Post-Gazette could
implement its proposed layoffs.
The dissent had it right. The proper mode of analysis
requires application of ordinary contract principles to the
expired CBA to determine whether the parties intended the
five-shift guarantee to end with the expiration of the CBA.
Applying those principles, we hold that the five-shift guarantee
did not become part of the post-expiration status quo, as that
provision makes plain the guarantee was to end when the CBA
expired. But that does not bring this matter to a close because,
under its own theory of the case, the Post-Gazette was still
precluded from implementing the layoffs unless it engaged in
adequate effects bargaining. We will therefore remand for the
Board to determine whether the Post-Gazette did so.
5
I. BACKGROUND
A. Legal Principles
The complicated procedural background of this case
may be more understandable with the aid of some background
on the law governing labor negotiations, which we provide
before turning to the facts.
1. Post-Expiration Status Quo
The Supreme Court has explained that “[a] fundamental
aim of the [NLRA] is the establishment and maintenance of
industrial peace to preserve the flow of interstate commerce.”
First Nat’l Maint., 452 U.S. at 674. To that end, the NLRA
grants “[e]mployees … the right … to bargain collectively
through representatives of their own choosing[.]” 29 U.S.C.
§ 157. Section 8(a)(1) of the NLRA makes it an “unfair labor
practice for an employer … to interfere with … the exercise
of” that right. 29 U.S.C. § 158(a)(1). Further, Section 8(a)(5),
with limited exceptions, makes it “an unfair labor practice for
an employer … to refuse to bargain collectively with the
representatives of his employees[.]” 29 U.S.C. § 158(a)(5).
That same subsection, “as augmented by § 8(d), requires an
employer to bargain over ‘wages, hours, and other terms and
conditions of employment.’” Citizens Publ’g & Printing Co.
v. N.L.R.B., 263 F.3d 224, 233 (3d Cir. 2001) (quoting 29
U.S.C. § 158(d)).
The parties do not dispute that, in general, an employer
commits an unfair labor practice, violative of Sections 8(a)(1)
and 8(a)(5) of the NLRA, when, after the expiration of a CBA
and during negotiations for a successor CBA, the employer
6
alters the post-expiration status quo regarding the terms and
conditions of employment without first negotiating with its
employees to an overall impasse on the successor CBA. That
proposition flows from the Supreme Court’s decision in
N.L.R.B. v. Katz, which held “that an employer’s unilateral
change in conditions of employment under negotiation is
similarly a violation of [Section 8(a)(5) of the NRLA, 29
U.S.C. § 158(a)(5)], for it is a circumvention of the duty to
negotiate which frustrates the objectives of [Section 8(a)(5)]
much as does a flat refusal.” 3 369 U.S. 736, 743 (1962); see
also Bottom Line Enters., 302 NLRB 373, 374 (1991) (citing
Katz, 369 U.S. 736) (“[W]hen, as here, the parties are engaged
in negotiations, an employer’s obligation to refrain from
unilateral changes extends beyond the mere duty to give notice
and an opportunity to bargain; it encompasses a duty to refrain
from implementation at all, unless and until an overall impasse
has been reached on bargaining for the agreement as a
whole.”).
3
As a technical matter, we have explained that such a
unilateral change violates Section 8(a)(5) directly, while
Section 8(a)(1) is violated derivatively because “[b]y
unilaterally changing the employees’ terms and conditions of
employment, an employer ‘minimizes the influence of
organized bargaining’ and ‘emphasiz[es] to the employees that
there is no necessity for a collective bargaining agent.’”
Citizens Publ’g, 263 F.3d at 233 (quoting May Dep’t Stores
Co. v. N.L.R.B., 326 U.S. 376, 385 (1945)). Because that
distinction makes no difference to the question before us, we
do not give it further attention.
7
The Supreme Court in Litton made clear that, although
an expired CBA may “by its own terms release[] all its parties
from their respective contractual obligations,” the expired
CBA remains of central importance to the status quo inquiry.
501 U.S. at 206. That is, the terms of the expired CBA “‘retain
legal significance because they define the status quo’ for
purposes of the prohibition on unilateral changes.” Id. (quoting
Derrico v. Sheehan Emergency Hosp., 844 F.2d 22, 26 (2d Cir.
1988). Thus, whether a particular term survives a CBA’s
expiration depends on the contracting parties’ intent as
embodied in the CBA.
2. Right to Make Entrepreneurial Decisions
More than forty years ago, in First National
Maintenance, the Supreme Court considered whether “an
employer, under its duty to bargain in good faith ‘with respect
to wages, hours, and other terms and conditions of
employment,’ … [must] negotiate with the certified
representative of its employees over its decision to close a part
of its business?” 452 U.S. at 667 (quoting 29 U.S.C. §§ 158(d)
and 158(a)(5)). The Court answered no. Id. at 686.
In doing so, it noted that the NLRA does not require
employers to bargain over entrepreneurial decisions. The
Court explained that, while employers and employees are “free
to bargain about any legal subject,” the congressionally
mandated duty to bargain is “limited … to matters of ‘wages,
hours, and other terms and conditions of employment.’” Id. at
674-75. These are mandatory subjects of bargaining. And an
employer’s unilateral change to such matters “violates the
statutory duty to bargain and is subject to the Board’s remedial
order.” Id. at 674-75 (citing Katz, 369 U.S. 736).
8
Nevertheless, the Court made it plain that, “in
establishing what issues must be submitted to the process of
bargaining, Congress had no expectation that the elected union
representative would become an equal partner in the running
of the business enterprise in which the union’s members are
employed.” Id. at 676. Instead, “the union must be given a
significant opportunity to bargain about [the related] matters of
job security as part of the ‘effects’ bargaining mandated by
§ 8(a)(5).” Id. at 681. In that way, the union can still play a
salutary role once the entrepreneurial decision is made. Id. at
682.
B. Factual Background 4
The Post-Gazette publishes a daily newspaper and the
Union has represented the Newspaper’s pressmen and
paperhandlers for many years, including all times relevant to
the petitions before us. The Post-Gazette’s now-expired CBA
with the Union became effective November 16, 2014. That
CBA contained a clause providing that the whole agreement
would terminate on March 31, 2017. 5 During the duration of
4
The Post-Gazette and General Counsel agreed to
proceed before the ALJ on a stipulated record, including
exhibits. Except for the extent of effects bargaining, this case
does not turn on any dispute of material fact.
5
The cover page of the expired CBA states: “Effective:
November 16, 2014” and “Expires: March 31, 2017.” (J.A. at
209.) On the first page of the body of the expired CBA, in
Section 1.2, it provides: “This Agreement shall continue in
force from its effective date until and including the shift
9
the CBA, the Newspaper published a print edition seven days
a week.
Section 10.2 of the expired CBA provides a five-shift
guarantee and states in pertinent part:
Effective the first payroll week following the
signing of the collective bargaining agreement,
all employees listed by name at the time of the
signing of this Agreement shall be guaranteed a
five (5) shift mark-up each payroll week for the
balance of the Agreement, ending March 31,
2017, except under the following circumstances
….
(J.A. at 217.) 6
The Post-Gazette and the Union began negotiating for a
successor CBA in March 2017, but they have not yet entered
starting March 31, 2017[,] and from year to year thereafter,”
unless written notice is given by either party “of its intention
to open negotiations for a new agreement[.]” (J.A. at 212.) No
one has argued that the requisite notice was not given.
6
The exceptions in Section 10.2 do not deal with
extending the duration of the provision. Rather, they deal with
exceptions to the five-shift guarantee that were available while
that provision was in effect. No one argues that those
exceptions are implicated here, as the Post-Gazette has not
attempted to justify firing Murrio or Jenkins in accordance with
an exception that would have obtained if the five-shift
guarantee had remained binding on it.
10
into such an agreement. In June 2018, fifteen months after the
expiration of the CBA, the Post-Gazette informed the Union
that the newspaper would undergo a transition to an all-digital
format, beginning in August 2018 with a reduction from a daily
print edition to only five print editions each week, and that
there would be consequent layoffs, starting with the
paperhandlers. It is undisputed that the Post-Gazette engaged
in some bargaining over the effects flowing from the decision
to go all-digital, including the layoffs.
In August 2018, according to plan, the Newspaper
eliminated its Tuesday and Saturday print editions. Although
the Post-Gazette and the Union had not bargained to an overall
impasse on the content of a successor CBA, Messrs. Murrio
and Jenkins were laid off roughly six weeks later, in October
2018.
C. Procedural Background
1. Proceedings Before the ALJ
After those layoffs, the Union filed a charge of unfair
labor practices with the Board. 7 The Board’s General Counsel
then issued an administrative complaint in March 2020,
noticing a hearing for June 2020. The Post-Gazette filed an
answer, including several affirmative defenses. At the parties’
joint request, the ALJ accepted factual stipulations and briefing
without holding a hearing.
7
The Union filed the unfair labor practice charge on
January 7, 2019, filing an amended charge on February 14,
2019. References herein are to the amended charge.
11
In his briefing to the ALJ, the General Counsel argued
that the Post-Gazette violated the NLRA in two ways. 8 The
first was “by eliminating the five shift per week guarantee and
laying off two paperhandlers because it was engaged in
successor contract negotiations at the time and … could not
unilaterally implement layoffs, a mandatory subject of
bargaining, absent overall impasse.” (J.A. at 369.) The second
was by laying off Murrio and Jenkins, which, according to the
General Counsel, “constituted a violation of [the Post-
Gazette’s] statutory duty to maintain the status quo, which
arguably included the minimum-shift guarantee.” (J.A. at 369
(citing Finley Hosp., 362 NLRB 915 (2015).) The General
Counsel also asked the Board to overrule the decision he was
relying on for that point, Finley Hospital. 9 (J.A. at 369, 377-
80.)
8
Part of the administrative complaint dealt with certain
information requests from the Union to the Post-Gazette. The
ALJ upheld the Post-Gazette’s disposition of those requests,
and the Board affirmed the ALJ on that point. No one has
challenged that aspect of the Board’s decision, so there is no
need to discuss it further.
9
In relevant part, the Board’s Finley Hospital decision
stands for two propositions. The first is that most terms in an
expired CBA – at least those touching on a point of mandatory
bargaining (i.e., wages, hours, and other terms and conditions
of employment) – continue during the pendency of
negotiations of a successor CBA by operation of the NLRA.
362 NLRB 915, 916-18 (2015). The second is that, with
respect to such a term, it is not enough that an expired CBA
provides that the term is no longer operative as a contractual
matter. Id. at 917-18. Instead, the CBA must contain “clear
12
For its part, the Post-Gazette advanced two lines of
argument before the ALJ that are pertinent here. Invoking
First National Maintenance, the Post-Gazette declared that it
had made a non-bargainable entrepreneurial decision to move
to an all-digital format, so it needed only to engage in adequate,
good faith “effects” bargaining regarding the layoffs, and had
done so. Its second argument was that the five-shift guarantee,
according to its terms, did not survive the expiration of the
CBA and so did not become part of the post-expiration status
quo. In a footnote to that latter argument, the Newspaper
“agree[d] with the General Counsel’s position that Finley
Hospital was wrongly decided and should be overturned[.]”
(J.A. at 329 n.2.)
2. The ALJ’s Decision
The ALJ dismissed the General Counsel’s
administrative complaint. In so doing, he noted that parties
negotiating a successor collective bargaining agreement are
generally required to bargain until they reach an overall
impasse before either may unilaterally change the status quo;
that the five-shift guarantee was part of the status quo; and that
the parties had not reached an overall impasse on a new CBA.
He also thought it obvious that, “as a general matter, layoffs
proposed during contract negotiations are subject to the …
overall-impasse rule.” 10 (J.A. at 19.) The ALJ thus reasoned,
and unmistakable” language sufficient to waive a statutory
right to prevent the continuation of that term post-expiration.
Id. at 916.
10
As he explained, under Board precedent, “it is long-
settled that the decision to lay off unit employees is a
mandatory subject of bargaining.” (J.A. at 18 (citing, among
13
“[e]ven granting, arguendo, the [Post-Gazette]’s premise that
the section 10.2 [five-shift] guarantee did not continue as part
of the postexpiration status quo, this would not give the [Post-
Gazette] the right to impose layoffs without bargaining during
collective-bargaining negotiations for a new agreement.” (J.A.
at 18 n.7.)
And yet the ALJ recognized the “difficult issue” that,
“while the [Post-Gazette]’s layoff proposals arose during
contract negotiations, they arose as a result and effect of the
[Post-Gazette’s] decision to become a digital news
organization and reduce print operations.” (J.A. at 19.)
Although there was no Board precedent directly on point, the
ALJ concluded that “application of the … overall-impasse rule
to bargaining over layoffs that are the effect of a non-
bargainable decision is inconsistent with the Board’s approach
to effects bargaining.” 11 (J.A. at 20.) Thus, the ALJ rejected
the argument that the layoffs constituted an unfair labor
practice and dismissed it accordingly. He also concluded that
other things, Tri-Tech Servs., 340 NLRB 894, 895 (2003) (“It
is well established that the layoff of unit employees is a change
in terms and conditions of employment over which an
employer must bargain.”))).
11
In Bottom Line Enterprises, the Board laid out the
overall impasse rule, saying, “[w]hen … the parties are
engaged in negotiations, an employer’s obligation to refrain
from unilateral changes extends beyond the mere duty to give
notice and an opportunity to bargain; it encompasses a duty to
refrain from implementation at all, unless and until an overall
impasse has been reached on bargaining for the agreement as a
whole.” 302 NLRB at 374 (citing Katz, 369 U.S. 736).
14
the General Counsel had forfeited the separate but related
theory of liability that the elimination of the five-shift
guarantee was itself an improper departure from the status quo.
In essence, the ALJ ruled that only one theory of liability had
been properly advanced, a theory based on the layoffs.
3. Proceedings Before the Board
The General Counsel filed exceptions to the ALJ’s
decision, and, despite prevailing before the ALJ, the Post-
Gazette filed cross-exceptions. 12 The General Counsel’s
exceptions continued to advance his earlier positions,
contending that the Post-Gazette engaged in unfair labor
practices in two ways. First, he argued that the layoffs
“violated Section 8(a)(5) of the Act because [the Post-Gazette]
was engaged in successor contract negotiations at the time and
… could not lawfully unilaterally implement layoffs and
thereby eliminate the minimum shift guarantee, mandatory
subjects of bargaining, absent overall impasse.” (General
Counsel’s Br. in Support of Exceptions at 3.) And, second,
“under Finley Hospital, the layoffs constituted a violation of
its statutory duty to maintain the status quo, which included a
guarantee that workers would receive minimum number of
shifts per week.” (Id.) The General Counsel continued to
maintain that Finley Hospital ought to be overruled. 13 (Id. at
12
We note that the General Counsel’s brief in support
of his exceptions was inadvertently omitted from the Joint
Appendix. But it is publicly available on the Board’s docket
under Case 06-CA-233676. https://www.nlrb.gov/case/06-
CA-233676 (last visited on Aug. 23, 2023).
13
During the pendency of the matter before the Board,
General Counsel Peter Robb (an appointee of former President
15
7.) He argued that “the ALJ wrongfully found that the
unilateral elimination of the shift guarantee was not an
independent violation of the Act[.]” (Id. at 6.)
The General Counsel made plain his disagreement with
the notion that only one theory of liability was before the ALJ
and that the overall-impasse rule did not apply. The “layoffs
constituted a unilateral change in terms and conditions of
employment[,]” the General Counsel said, “[e]ven granting,
arguendo, [the Post-Gazette’s] premise that the section 10.2
guarantee did not continue as part of the postexpiration status
quo[.]” (Id. at 11 (quoting the ALJ’s decision).) He also
argued “that the ALJ erred in finding that the … overall-
impasse rule is not applicable here … .” 14 (Id. at 10.)
Donald Trump) was removed from office. Acting General
Counsel Peter Sung Ohr sought to file a supplemental brief to
withdraw that recommendation, a request the Post-Gazette
opposed. The request was denied. This apparent change of
views is not the focus of the briefing before us. Thus, it is not
further discussed herein and does not play a role in our
decision.
14
The General Counsel also questioned the legal basis
for the ALJ’s conclusion that the overall-impasse rule does not
apply when an employer makes layoffs based on an
entrepreneurial decision. For example, the General Counsel
said that “[t]he ALJ failed to recognize that this area of law is
unclear, and the Board should clarify what an employer’s
obligations are in this situation accordingly.” (General
Counsel’s Br. in Support of Exceptions at 10.) He did not
dispute that the “decision to move towards a digital news
organization and reduce print operations by two-days a week
16
The Post-Gazette advanced fourteen cross-exceptions,
reiterating its positions that Finley Hospital should be
overruled, that the five-shift guarantee had expired, and that
First National Maintenance controls the outcome of this case.
Additionally, the Post-Gazette urged that the ALJ had erred by
failing to conclude that, after it had “provided notice and
offer[ed] to discuss the effects of its non-bargainable decision
[to go digital], [the Post-Gazette] bargained to a lawful impasse
before lawfully implementing its layoff effects proposal.”
(J.A. at 395.)
4. The Board Majority’s Decision
The full Board, divided three to two, reversed the ALJ’s
dismissal and concluded that the Newspaper had, indeed,
engaged in an unfair labor practice. The Board majority
rejected the ALJ’s decision in three ways pertinent to this
appeal. First, it concluded that, “contrary to the [ALJ’s
determination,] the General Counsel’s brief to the [ALJ]
confirmed that the General Counsel had raised two theories of
liability under Section 8(a)(5) of the Act, one of which was that
the layoffs were unlawful because they constituted a violation
of the [Post-Gazette]’s statutory duty to maintain the status
quo, which included a guarantee that workers would receive a
is a nonbargainable entrepreneurial decision under First
Maintenance.” (Id. at 12.) Rather he argued that, if “the Board
finds that [the Post-Gazette] was not bound to the … overall-
impasse rule in these circumstances, the parties did not bargain
to impasse over the effects of [the Post-Gazette]’s decision, nor
did the Union clearly and unmistakably waive its right through
bargaining.” (Id. at 14.)
17
minimum number of shifts per week.” (J.A. at 29.) In other
words, the Board majority determined that there were two
theories of liability – one premised on the layoffs, the other
premised on the elimination of the five-shift guarantee – and
that neither had been forfeited.
Second, the Board majority expressly reaffirmed its
Finley Hospital precedent and then, under that authority,
condemned the elimination of the five-shift guarantee.
According to the majority:
The five-shift guarantee is a mandatory subject
of bargaining; it was an established term of
employment under the parties’ collective-
bargaining agreement …. It is therefore clear
that the [Post-Gazette] was barred from
unilaterally terminating the five-shift guarantee
at the expiration of the collective-bargaining
agreement (and thereby laying off employees
covered by the five-shift guarantee), absent
either an impasse in bargaining with the Union
or a waiver by the Union of the right to demand
compliance with the guarantee on behalf of
bargaining unit employees. Here, the parties
stipulated that they were not at an overall
impasse. And, … the parties’ collective-
bargaining agreement contains no language
clearly and unmistakably waiving the Union’s
statutory right to maintenance of the five-shift
guarantee (unless and until the parties reached an
impasse in bargaining or a new collective-
bargaining agreement). Accordingly, the [Post-
Gazette] violated the [National Labor Relations]
18
Act by unilaterally failing to abide by the [five]-
shift guarantee with respect to the two
employees[, Murrio and Jenkins].
(J.A. at 32 (footnotes omitted).)
Third, having concluded that the termination of Murrio
and Jenkins constituted an unfair labor practice, the Board
majority declined to discuss whether the overall-impasse rule
ought to be applied to bargaining over the effects of a non-
bargainable decision. The Board majority nevertheless
acknowledged that the Post-Gazette’s decision to “transition to
an all-digital format and eliminate 2 days of print publication
per week was a core entrepreneurial decision over which the
[Newspaper] had no duty to bargain.” (J.A. at 32 n.18.) But,
the majority said, “[t]his entrepreneurial decision … did not
alter the terms of its preexisting collective-bargaining
agreement with the Union or the resulting postexpiration status
quo that it had a statutory obligation to maintain, including the
five-shift guarantee, independent of any effects-bargaining
obligation.” (Id.)
5. Board Dissent
Two members of the Board joined in a vigorous dissent.
They would have held that the five-shift guarantee did not
survive the expiration of the CBA, that the Board’s Finley
Hospital precedent was no longer good law, and that the
Supreme Court’s opinion in First National Maintenance
dictated a decision in favor of the Post-Gazette.
On the first point, the dissenting Board members said
that a contractual obligation ends when a CBA expires and
19
only becomes part of the post-expiration status quo when the
expired CBA expressly provides by its terms that it survives.
In support of this position, which might be called their “express
condition” argument, the dissenting members quoted the
Supreme Court’s decision in M & G Polymers USA, LLC v.
Tackett, 574 U.S. 427 (2015), and said, “contractual
obligations will cease, in the ordinary course, upon termination
of the bargaining agreement.” (J.A. at 43 (quoting Tackett, 574
U.S. at 441-42, which in turn quotes Litton, 501 U.S. at 207).)
The dissenters observed, however, that it was unnecessary to
go that far to resolve the case. In their view, it was evident
that, based on the text of the CBA, the five-shift guarantee was
not intended to form part of the post-expiration status quo.
They described the text of Section 10.2 as “doubly
reinforc[ing] the durational limitation of the five-shift
guarantee: not only did the guarantee apply only ‘for the
balance of the Agreement,’ but section 10.2 also set a specific
end date for the five-shift guarantee, ‘March 31, 2017.’” (J.A.
at 43.) Accordingly, the “durational language is properly
interpreted to terminate the five-shift guarantee for statutory
purposes[.]” (J.A. at 43.)
As to the second point, the dissent framed the question
as “whether an employer engaged in negotiations for a
successor collective-bargaining agreement must refrain from
implementing layoffs necessitated by a non-bargainable
decision in the absence of an overall impasse in negotiations.”
(J.A. at 47.) The dissent concluded that the ALJ had correctly
answered that question with a “no.”
But the dissent went on to say that the result the ALJ
reached was compelled by First National Maintenance, 452
U.S. 666, rather than being merely derived implicitly from the
20
Board’s precedent on effects bargaining, as the ALJ had
concluded. 15 According to the dissent, “subjecting effects
bargaining to the overall-impasse rule” would permit a union
to thwart management’s ability to implement a non-
bargainable decision if it has the “opportunity for delay[] over
issues entirely unrelated to the managerial decision in
question.” (J.A. at 47.)
6. Cross-Petitions
The case has arrived in our Court via the Post-Gazette’s
petition for review of the Board’s decision and the General
Counsel’s petition for enforcement of the same. The Union has
filed a brief as intervenor.
II. DISCUSSION 16
A. The Five-Shift Guarantee
The Post-Gazette’s arguments largely track those
advanced by the Board dissent. Although it endorses the Board
15
The Supreme Court analogized the “decision[]
involving a change in the scope and direction of the
enterprise,” to “the decision whether to be in business at all[.]”
452 U.S. at 677. Such a decision is non-bargainable and only
requires the employer to bargain “over the effects of [the]
decision . . . in a meaningful manner and at a meaningful
time[.]” Id. at 681-82.
16
The Board had jurisdiction pursuant to 29 U.S.C.
§ 160(a), (c) to prevent unfair labor practices under 29 U.S.C.
§ 158(a)(1), (5). We have jurisdiction to consider a petition for
enforcement filed by the General Counsel under 29 U.S.C.
21
dissent’s express condition argument concerning the status of
expired CBAs, 17 the Newspaper does not put all its eggs in that
basket. Citing the Supreme Court’s decisions in Tackett and
CNH Indus. N.V. v. Reese, 138 S. Ct. 761 (2018), each of which
stated that expired CBAs are generally interpreted according to
ordinary contract principles, the Post-Gazette contends that it
prevails under the more modest argument that, in light of
Section 10.2’s express statement that “the guarantee would be
in effect ‘for the balance of the Agreement, ending March 31,
2017,’” “there is only one way to interpret the five-shift
guarantee – it ended with the Agreement on March 31, 2017[,]”
§ 160(e). And we have jurisdiction to consider the Post-
Gazette’s petition for review of the Board’s order under 29
U.S.C. § 160(f). “An order of the Board is customarily entitled
to enforcement if its findings are supported by substantial
evidence and the order is consistent with the policies of the
NLRA.” Int’l Bhd. of Elec. Workers, Loc. 803, AFL-CIO v.
N.L.R.B., 826 F.2d 1283, 1287 (3d Cir. 1987). And the Board’s
interpretation of the NLRA will be “upheld unless it represents
‘an unreasonable or an unprincipled construction of the
statute[.]’” Id. (quoting Ford Motor Co. v. N.L.R.B., 441 U.S.
488, 497 (1979)). But we owe the Board no deference on
matters of contractual interpretation, even when undertaken in
connection with unfair labor practice proceedings. Litton, 501
U.S. at 202-03.
17
Again, as noted supra in Section I.C.5, the express
condition argument contends that, in the absence of express
contractual language providing that a term survives the
expiration of the CBA, the term does not become part of the
post-expiration status quo for statutory purposes under the
NLRA.
22
and so never became part of the post-expiration status quo.
(See, e.g., Opening Br. at 9.)
The General Counsel responds with a defense of the
Board’s majority opinion. He says the Board was correct to
apply a clear-and-unmistakable-waiver standard to determine
whether the five-shift guarantee became part of the status quo
and thus survived the CBA’s expiration. 18 He also argues that
nothing in Tackett and Reese overruled or modified Litton’s
emphasis on the importance of an expired CBA in establishing
the background status quo for bargaining over a new CBA, as
those later decisions examined expired CBAs in the context of
the Employee Retirement Income Security Act of 1974
(“ERISA”), not in an NLRA case. Thus, the General Counsel
argues, under the waiver standard, the Board correctly
determined that the five-shift guarantee was part of the post-
expiration status quo. The Union’s arguments are effectively
identical to those advanced by the General Counsel on the five-
shift guarantee issue, so we do not set them out separately.
The dispute over the five-shift guarantee thus boils
down to this: whether ordinary contract principles or the
heightened standard applicable to the waiver of a statutory
right, i.e., the clear-and-unmistakable-waiver standard, should
apply in determining whether a provision in an expired CBA
becomes part of the post-expiration status quo for purposes of
future labor negotiations. We believe the answer to that
question inheres in the Supreme Court’s observation in Litton
18
The General Counsel also contends that the Post-
Gazette has abandoned any argument that the clear-and-
unmistakable-waiver standard was satisfied.
23
that the terms of an expired CBA “retain legal significance
because they define the status quo.” Litton, 501 U.S. at 206
(emphasis added) (quoting Derrico, 844 F.2d at 26, in a
parenthetical, while citing Derrico more broadly, 844 F.2d at
25-27). We are thus directed to the language of the CBA in
question, and to the ordinary principles of contract
interpretation, to determine whether a particular term forms
part of the status quo. If the language of the CBA does not
indicate that the term in question persists as part of the status
quo, the inquiry ends. If, but only if, the contract indicates in
some fashion that the term does form part of the post-
expiration status quo – and therefore continues to govern the
parties by operation of the NLRA – then the employer must
meet the clear-and-unmistakable-waiver standard if it wishes
to assert that its employees have waived their statutory right to
the benefits of the contested term.
The Board majority misapprehended the lesson of
Litton. That lesson is best understood by first considering the
Second Circuit’s decision in Derrico, which provided a cogent
explanation of “the post-expiration effect of a CBA[,]” and
which Litton cited with approval. 19 The Second Circuit said it
19
In Derrico, the plaintiff was a registered nurse who
was fired after the expiration of a collective bargaining
agreement between his former employer, a hospital, and his
former union, while that employer negotiated a successor
agreement with a new union. 844 F.2d at 23. After the Acting
Regional Counsel for the Board declined to issue a complaint
under the NLRA as to either of the two charges, the nurse sued
for breach of contract in New York state court. Id. at 24. As
relevant here, after the case was removed to district court, the
court construed that claim to proceed on the theory that “the
24
was a mistake to believe “that federal law preserves the expired
CBA ‘in full force and effect’ pending an impasse in
bargaining.” Derrico, 844 F.2d at 26. Rather, there was an
overarching principle “that the parties must maintain the status
quo until they have negotiated to impasse, and an employer’s
unilateral change of terms and conditions of employment
during this process constitutes” an unfair labor practice. Id.(citing Katz, 369 U.S. at 743). And further, there was “[a]
corollary to this principle[, namely,] that after expiration of a
CBA and before impasse in bargaining, it is an unfair labor
practice for an employer unilaterally to alter the status quo
defined by the expired contract.” Id. Consequently, the
Second Circuit said, in language later quoted in Litton, “[t]he
terms of an expired agreement … retain legal significance
because they define the status quo.” Id. But, of particular
importance here, the Derrico court went on to observe that
“[r]ights and duties under a collective bargaining agreement do
not otherwise survive the contract’s termination at an agreed
expiration date.” Id. at 26-27.
for-cause limitation in the expired CBA” became part of a
separately enforceable implied contract under New York law
between the plaintiff and his employer. Id. The district court
then dismissed the case “on the ground that the complaint
raised issues within the primary jurisdiction of the NLRB.” Id.
The Second Circuit affirmed that removal was proper and that
the case was indeed preempted by federal law. Id. at 27-29. In
so doing, the court found it necessary to summarize its
“understanding of the post-expiration effect of a CBA.” Id. at
26.
25
The implication here is that not everything in a CBA
should be taken as constituting the status quo that must be
honored during later negotiations. Rather, ordinary contract
principles must be applied to analyze which provisions of an
expired CBA define the status quo; those provisions then
continue to have effect, while the rest of the CBA lapses at the
agreed-upon expiration date. While the Supreme Court, in
approving the approach laid out in Derrico, said that, “after
expiration [of a CBA,] most terms and conditions of
employment are not subject to unilateral change[,]” 501 U.S.
at 206, it did not suggest that everything in a CBA defines the
status quo.
The Board majority failed to follow the appropriate
analytical path because it evidently read the word “most” in
Litton to mean that all subjects of mandatory bargaining
necessarily form the post-expiration status quo and so continue
unless the clear-and-unmistakable-waiver standard attendant
to statutory rights is met. The General Counsel and the Union
advance that same view before us.
In their collective reasoning, use of the word “most”
carves out only non-mandatory subjects of bargaining such as
“arbitration provisions, no-strike clauses, and union-security
agreements” from being part of the post-expiration status quo.
(General Counsel Br. at 13 & n.4.) Or, in the words of the
Board majority, the five-shift guarantee is not among such
“categorical exceptions” to the prohibition on unilateral
changes to the status quo, as laid out in the rule enunciated in
Katz, 369 U.S. at 743, and reiterated in Litton. (J.A. at 32.)
But “most” does not mean “all.” And simply because
certain provisions in an expired CBA may address subjects
26
besides the mandatory-bargaining issues captured in the phrase
“wages, hours, and other terms and conditions of
employment,” 369 U.S. at 742-43, that does not mean that all
other provisions in an expired CBA are necessarily included in
the post-expiration status quo. Nothing in Supreme Court
jurisprudence says that any provision touching on subjects of
mandatory bargaining is by law included in the post-expiration
status quo without reference to the terms of the expired CBA.
In Litton, the questions were, first, whether a CBA
provision dealing with arbitration of certain labor grievances
survived the CBA’s expiration and covered the period before a
successor CBA was entered into, and second, if so, whether the
survival of that provision was (i) a contractual matter pursuant
to the terms of the expired CBA, (ii) a result of the statutory
obligation not to unilaterally change the status quo, or (iii)
both. 501 U.S. at 193, 198-99, 203-06. Properly understood,
Litton was making the non-controversial point that just because
it had concluded a provision at issue in another case – Nolde
Bros., Inc. v. Bakery Workers, 430 U.S. 243 (1977) – and it had
survived as a matter of contract law in the circumstances of that
case, there was no reason to believe the same would be true in
every case. As the Litton Court stated:
We agree with the approach of the Board and
those courts which have interpreted Nolde
Brothers to apply only where a dispute has its
real source in the contract. The object of an
arbitration clause is to implement a contract, not
to transcend it. Nolde Brothers does not
announce a rule that post[-]expiration grievances
concerning terms and conditions of employment
remain arbitrable.
27
Litton, 501 U.S. at 205.
It was in connection with that last sentence that Litton
uttered the words the Board majority used to dismiss Tackett,
namely, that “no language in Tackett casts doubt on Litton’s
teaching that most terms and conditions of employment
continue, by operation of law, pending impasse or agreement
over a successor contract.” (J.A. at 35-36 n.30.) But, again,
whether a term does survive requires analysis of the contractual
language. Litton certainly does not suggest that a contract term
providing for its own expiration at the end of the CBA should
not be given effect.
1. Finley Hospital
The proper relationship between ordinary contract law
principles and the question of the post-expiration status quo
was aptly illustrated by the Eighth Circuit’s refusal to enforce
the Board’s decision in Finley Hospital, 362 NLRB 915. In
that case, the Eighth Circuit dealt with a Board majority’s
decision that Finley Hospital had violated the NLRA by
“unilaterally discontinuing annual pay raises negotiated in a
one-year collective bargaining agreement … without
bargaining with” the union representing the hospital’s nurses.
Finley Hosp. v. N.L.R.B., 827 F.3d 720, 722 (8th Cir. 2016).
The court held that the Board majority had erred in determining
“that the one-year-long CBA with the Union established a
status quo of annual, compounded raises that, under the NLRA,
must be continued after the agreement’s expiration.” 20 Id. at
20
The analysis is instructive. The Eighth Circuit began
its analysis with five straightforward points (some specific to
28
724. The court correctly identified a flaw in the Board
majority’s analysis: The Board did not bother to “discuss[]
exactly how the language of [the CBA provision in question]
established a status quo of annual pay raises[.]” Id. Instead, it
“simply assumed that because the CBA authorized a one-time
3% pay raise, annual 3% raises automatically became part of
the status quo that must be maintained during negotiations.”
Id. Thus, the court observed, in the words of the Board’s
dissenting member in that case, the majority ignored the “time
constraint that was an inherent part of the wage increase
obligation, … mak[ing] a time-bound obligation into a
perpetual one.” Id. at 725.
The Eighth Circuit noted there was no basis offered
under the NLRA or contract law to support the Board’s
that CBA): First, under “[t]he unilateral change doctrine … ‘an
employer’s unilateral change in conditions of employment
under negotiation is’” an “unfair labor practice.” Finley Hosp.,
827 F.3d at 724 (quoting Katz, 369 U.S. at 743). Second, “[t]he
terms and conditions that continue as part of the status quo
under the unilateral change doctrine ‘are no longer agreed-
upon terms; they are terms imposed by law.’” Id. (quoting
Litton, 501 U.S. at 206). Third, the parties agreed that,
“because the CBA had expired, the Hospital no longer had any
contractual obligations.” Id. Fourth, that left “[t]he critical
inquiry[, namely,] whether there existed an established practice
or status quo that created a statutory obligation of
compounded, annual raises.” Id. (first alteration in original)
(cleaned up). And, fifth, “[t]he Board relied solely on its
interpretation of Article 20.3 of the CBA to conclude that
continuing 3% pay increases were part of the status quo.” Id.
29
decision. As for the NLRA, “[t]he purpose of the [Act] was
surely not to make all wage terms in every employment
agreement last beyond the tenure of the bargained-for
agreement.” Id. On the question of contract interpretation, the
court reasoned that “the raise-providing provision[] states that
it applies only ‘for the duration of this Agreement[,]’ [and t]hat
phrase, or a slight variation of that phrase, is used three times
in [that provision], and the parties knew that the CBA expired
in one year.” Id.
The Eighth Circuit concluded that the provision, by its
“plain language,” “does not, as the Board states, provide for
periodic wage increases or annual raises; rather, the language
sets forth a straight forward, singular pay increase on a
particular day during the one-year contract.” Id. And, further,
it was not a situation where a status quo was created absent a
contractual provision by operation of a “longstanding practice
of giving such raises.” Id. at 726. Consequently, because the
Eighth Circuit held that the provision “did not establish a status
quo of, and thus a statutory right to, annual 3% raises,” that
ended the matter without necessitating a consideration of
whether “the [u]nion waived its alleged statutory right to post-
expiration raises.” Id. Accordingly, the court set aside the
Board’s decision on that point, affirming as to non-contested
ancillary points. Id. at 726-27.
2. Wilkes-Barre Hospital
The decision of the D.C. Circuit in Wilkes-Barre Hosp.
Co., LLC v. N.L.R.B., 857 F.3d 364 (D.C. Cir. 2017), likewise
models the proper analysis for determining whether a term in
an expired CBA forms part of the post-expiration status quo.
There, the employer, who operated a hospital in Wilkes-Barre,
30
Pennsylvania, sought review of the Board’s decision that it had
committed an unfair labor practice “by unilaterally ceasing the
payment of longevity-based wage increases to its nurses after
the expiration of the parties’ collective bargaining agreement.”
Id. at 367. The hospital argued that “the language of the
agreement and the parties’ shared understanding of that
language demonstrate that the Hospital was not obligated to
continue paying longevity-based increases upon expiration of
the agreement.” Id. The D.C. Circuit denied the petition for
review and enforced the Board’s order. Id.Helpfully for our purposes, after explaining that the
“primary dispute in this case concerns the proper determination
of the post-expiration status quo[,]” the D.C. Circuit examined
the expired CBA and determined, through the contract’s
“language and structure, [that it] establishe[d] two distinct
types of wage increases: across-the-board raises and longevity-
based increases.” 21 Id. at 374-75. The court concluded that the
“terms of the … CBA establish that the payment of longevity-
based increases represents the post-expiration status quo,” but
that was not the case for the across-the-board raises. Id. at 376.
According to the court, “[t]he longevity-based increases,
21
The D.C. Circuit did so after observing that, “[i]n
defining the post-expiration status quo in this case, therefore,
we look to the substantive terms of the 2011 CBA.” Wilkes-
Barre Hosp., 857 F.3d at 374. Though it does not cite Litton
for that proposition, lines earlier it relied on the pertinent
portion of Litton, stating “certain terms of an expired
agreement extend beyond the agreement’s expiration and
continue to ‘define the status quo[.]’” Id. (quoting Litton, 501
U.S. at 206).
31
unlike the across-the-board raises, were tied to an individual
nurse’s anniversary date, not to the term of the agreement.” Id.
at 375. “Specifically, the agreement state[d] that longevity-
based increases were to be paid on ‘January 27th of the year
following the employee’s anniversary date.’” Id. Only after
that nuanced examination of the durational language associated
with the two types of pay increases did the D.C. Circuit
consider whether the durational language associated with the
longevity increases was sufficient to constitute a waiver. Id.
Wilkes-Barre Hospital therefore supports the
proposition that we are to apply ordinary contract principles to
assess, in the first instance, whether a term in an expired CBA
constitutes part of the post-expiration status quo. And, further,
we read Wilkes-Barre Hospital as teaching that dates supplied
in a challenged provision are properly considered, before any
consideration of waiver, to determine whether the parties
intended that provision to end with the expiration of the CBA.
Notably, neither Finley Hospital nor Wilkes-Barre
Hospital suggests that the Supreme Court’s decision in Tackett
represented a sea change. Instead, each cites Tackett for the
modest proposition that “[w]e interpret collective-bargaining
agreements … according to ordinary principles of contract law,
at least when those principles are not inconsistent with federal
labor policy.” Finley Hosp., 827 F.3d at 725 (quoting Tackett,
574 U.S. at 435); see also Wilkes-Barre Hosp., 857 F.3d at 373(“When interpreting a collective bargaining agreement, we
generally apply ‘ordinary principles of contract law.’”)
(quoting Tackett, 574 U.S. at 435). Furthermore, there is no
indication that either court viewed Tackett – which, as
previously noted, examined an expired CBA in the context of
ERISA – as overruling or modifying Litton on the proper
32
understanding of the NLRA. And Tackett makes no suggestion
that it does. The same is true of Reese. 22
Consequently, we do not endorse the more sweeping
proposition advocated by the Board dissent that the terms in an
expired CBA form a part of the post-expiration status quo only
when there is some explicit statement by the parties. We see
no support for that proposition in Tackett or Reese.
3. Application
With all that in mind, we apply ordinary contract law
principles to ascertain whether the five-shift guarantee became
part of the post-expiration status quo. As the Supreme Court
has explained, the task of contract interpretation does not
materially differ when that contract is an expired CBA. That
is, “[i]n this endeavor, as with any other contract, the parties’
intentions control.” Tackett, 574 U.S. at 435 (quoting Stolt-
Nielsen S.A. v. AnimalFeeds Int’l Corp., 559 U.S. 662, 682
(2010)). Thus, “[w]here the words of a contract in writing are
clear and unambiguous, its meaning is to be ascertained in
accordance with its plainly expressed intent.” Id. (quoting 11
R. Lord, Williston on Contracts § 30:6, p. 108 (4th ed. 2012)).
We hold that Section 10.2 unambiguously provides that
the five-shift guarantee ended on March 31, 2017. Again, in
relevant part, that section provides:
22
Of course, Finley Hospital and Wilkes-Barre Hospital
both preceded Reese and so have nothing to say about it.
33
Effective the first payroll week following the
signing of the collective bargaining agreement,
all employees listed by name at the time of the
signing of this Agreement shall be guaranteed a
five (5) shift mark-up each payroll week for the
balance of the Agreement, ending March 31,
2017, except under the following circumstances
….
(J.A. at 217.) 23
We reject the notion espoused by the Board majority
that the participial phrase “ending March 31, 2017” modifies
“the Agreement.” That does not comport with good grammar.
When a comma precedes a participial phrase, the phrase
typically modifies a word earlier in the sentence, but, if the
phrase is meant to modify the word immediately preceding it,
a comma is not used. 24 The comma after the word
“Agreement” in this provision matters.
23
As noted supra, the exceptions in Section 10.2 do not
deal with extending the duration of the provision. Instead, they
deal with exceptions to the five-shift guarantee that were
available while that provision was in effect. Again, no one
argues those exceptions are implicated here.
24
See, e.g., Participles, Purdue Univ.,
https://owl.purdue.edu/owl/general_writing/mechanics/gerun
ds_participles_and_infinitives/participles.html (last visited
Aug. 23, 2023) (“If a participial phrase comes at the end of a
sentence, a comma usually precedes the phrase if it modifies
an earlier word in the sentence but not if the phrase directly
follows the word it modifies.”).
34
Moreover, reading “ending March 31, 2017” in the
phrase “for the balance of the Agreement, ending March 31,
2017” to merely apprise the reader – or perhaps remind the
reader – of when the CBA ends does not comport with the text
and structure of the CBA or, frankly, common sense. Any
party reading the expired CBA would be well aware of the
expiration date long before reaching Section 10.2. Indeed, on
the cover page, the title begins with: “2014 – 2017
AGREEMENT.” (J.A. at 209.) On that same cover page it
states the expired CBA is “Effective: November 16, 2014” and
“Expires: March 31, 2017.” (J.A. at 209.) Furthermore, as
noted earlier, the first page of the body of the expired CBA
provides an automatic renewal mechanism and explains that, if
not renewed, the expired CBA will “continue in force from its
effective date until and including the shift starting March 31,
2017[.]” (J.A. at 212.) Again, as previously noted, no one has
argued that the requisite notice was not given, or that for some
other reason the expired CBA did not terminate on March 31,
2017.
Additionally, Section 10.2 contains two notable features
suggesting that the five-shift guarantee was drafted with
precision as to its commencement and termination. First, the
five-shift guarantee did not become effective when the CBA
came into force, which was November 16, 2014. Rather, it
became “[e]ffective the first payroll week following the
signing of the collective bargaining agreement[.]” (J.A. at
217.) Second, in both instances where the expired CBA is
referenced in Section 10.2 – first as “the collective bargaining
agreement” and second as the “Agreement” – neither the
CBA’s effective date nor its expiration date are stated. (J.A. at
217.) Instead, the first date referenced in Section 10.2 is the
35
one indicating that the beginning of the five-shift guarantee is
keyed to the signing date. It is only after that, in connection
with language addressing the duration of the guarantee, that the
date of March 31, 2017 appears. It makes sense to explain with
specificity when the guarantee will end, because the
guarantee’s duration is not coextensive with the entire span of
the CBA.
One could perhaps quibble with that reasoning if
Section 10.2’s phrasing were present elsewhere in the expired
CBA, but it is not. That phrasing – “for the balance of the
Agreement, ending March 31, 2017” – is unique to Section
10.2. (J.A. at 217.) Indeed, that is highlighted by the General
Counsel’s and Union’s unpersuasive attempts to make hay of
other instances in the CBA where some form of durational
language is used. None of those instances say both “duration”
and “ending.” And there is no need to do so. For example, the
expired CBA prohibits strikes and lockouts “during the term of
this Agreement.” (J.A. at 237.) But that provision is not
incongruous with the span of the expired CBA, nor is it unclear
because it lacks the words “ending March 31, 2017.” Section
10.2, by contrast, needs and imposes its own, precise endpoint.
Similarly, there is one instance providing certain retirees with
a choice to participate in a health insurance stipend program
“during the life of the 2014-2017 collective bargaining
agreement[.]” (J.A. at 230.) Nothing in that language casts
doubt on the meaning of Section 10.2 or the parties’ intent to
provide a specific termination point for the five-shift
guarantee.
One final point raised by the Board majority warrants
mention here. The Board majority concluded it was “clear that
the [five-shift] guarantee, as a contractual matter, was intended
36
by the parties to be in place ‘for the balance of the
Agreement[,]’” but the majority then said, “the language does
not, by its terms, clearly and unmistakably address what
happens after the ‘balance of the Agreement’ is over[.]” (J.A.
at 32.) We must disagree. There is no question about what
happens to the five-shift guarantee after that March 31, 2017;
it ends, period. There is nothing confusing or odd about that.
It is not as if the CBA could not exist without the continuation
of Section 10.2. That provision is not essential to
comprehending the rest of the CBA or to the functioning of the
Post-Gazette. It can hardly be said that the notion of a job
without a five-shift guarantee defies imagination. So, if the
parties entered into a successor CBA tomorrow that had the
same substance as the expired CBA but lacked Section 10.2,
no one could reasonably say that the contract was rendered
inscrutably vague.
By its terms, then, the five-shift guarantee did not
become part of the post-expiration status quo. Rather, in
accordance with the parties’ express and unambiguous
agreement, the guarantee ended on March 31, 2017.
37
B. We Will Remand for the Board to Determine
Whether the Post-Gazette Engaged in
Adequate Effects Bargaining Before
Implementing Layoffs
1. We Cannot Enforce the Board’s Order
in Light of Our Holding that the Five-
Shift Guarantee did not Become Part of
the Post-Expiration Status Quo
Having concluded that the five-shift guarantee did not
become part of the post-expiration status quo, we cannot
enforce the Board’s order. Although the General Counsel
advanced two theories of liability before the ALJ and the
Board, we think it plain that the Board addressed only one of
those two theories, namely, that the Post-Gazette “violated the
Act by unilaterally failing to abide by the 5-shift guarantee with
respect to the two employees.” (J.A. at 32.) The affirmative
statement of the violation that concludes with the just-quoted
sentence makes that clear. 25 Furthermore, before us, the
General Counsel framed the Board’s decision as we just have.
(See, e.g., General Counsel Br. at 5 (“Applying the General
Counsel’s second theory, the Board held that the unilateral
elimination of the five-shift guarantee and the layoffs were
unlawful because the Post-Gazette was required to maintain
the five-shift guarantee as part of the status quo until reaching
a new agreement or impasse.”) (citing J.A. at 29).)
25
Again as noted supra, the Board majority explained
the violation as follows:
38
In short, having concluded that the sole basis for the
Board’s finding of a violation does not withstand scrutiny, we
could not enforce the decision under S.E.C. v. Chenery Corp.,
Application of well-settled principles leads to the
finding of a violation here. The five-shift
guarantee is a mandatory subject of bargaining;
it was an established term of employment under
the parties’ collective-bargaining agreement; and
it is not among the categorical exceptions to the
Katz rule noted in Litton. It is therefore clear that
the [Post-Gazette] was barred from unilaterally
terminating the five-shift guarantee at the
expiration of the collective-bargaining
agreement (and thereby laying off employees
covered by the five-shift guarantee), absent
either an impasse in bargaining with the Union
or a waiver by the Union of the right to demand
compliance with the guarantee on behalf of
bargaining unit employees. Here, the parties
stipulated that they were not at an overall
impasse. And, as we will explain, the parties’
collective-bargaining agreement contains no
language clearly and unmistakably waiving the
Union’s statutory right to maintenance of the
five-shift guarantee (unless and until the parties
reached an impasse in bargaining or a new
collective-bargaining agreement). Accordingly,
the [Post-Gazette] violated the Act by
unilaterally failing to abide by the 5-shift
guarantee with respect to the two employees.
(J.A. at 32 (footnotes omitted).)
39
318 U.S. 80 (1943), even if we thought there were a sound
alternative basis for it. See Mercy Cath. Med. Ctr. v.
Thompson, 380 F.3d 142, 151 (3d Cir. 2004) (“[W]e may
affirm the agency’s decision only on grounds on which the
agency actually relied, and not on the basis of alternative
rationales or justifications put forward by counsel on appeal.”)
(citing Chenery, 318 U.S. at 87); see also Slaughter v.
N.L.R.B., 794 F.2d 120, 122 (3d Cir. 1986) (“In Sears a
majority of the Board held that the Act compels the conclusion
that nonunion employees do not enjoy the rights recognized in
the Weingarten decision. The reasoning of Sears was
incorporated by reference into the Board’s decision in this
case. Thus, if we are to sustain the Board’s action, it must be
on the basis that no other interpretation of the Act is
permissible, regardless of whether their order could be
sustained on other grounds.”) (citing Chenery, 318 U.S. at 87).
But that does not end the case. All along, the Post-
Gazette has contended that it had the right to implement its
proposed layoffs under First National Maintenance, so long as
it engaged to impasse in good faith “effects” bargaining. As
the Union correctly observed at oral argument, however, there
has never been a determination that the Post-Gazette did in fact
adequately engage in effects bargaining. Even though it
prevailed before the ALJ, the Newspaper still filed cross-
exceptions, and one of the bases for its cross-exceptions was
the ALJ’s failure to affirmatively find it had engaged in
adequate effects bargaining.
Thus, it would seem straightforward that we should,
under the Post-Gazette’s theory, remand to the Board with
directions to return the matter to the ALJ for a factual finding
on the adequacy of the Post-Gazette’s effects bargaining. And,
40
if there is a finding of inadequacy of that effects bargaining,
the ALJ and Board should be given the opportunity to fashion
a proper remedy in keeping with such a violation under First
National Maintenance. That would be the ordinary course, but
this is no ordinary case. We must first deal with another
problem that is well-stated in the General Counsel’s brief:
“[T]he Board held that this is not an effects-bargaining case”
under First National Maintenance. (General Counsel Br. at 42
(emphasis added).)
That remarkable conclusion by the Board was not based
on the premise that the Newspaper’s decision to go to a digital
format is something other than a non-bargainable
entrepreneurial decision. To the contrary, the Board majority
expressly acknowledged that the decision to “transition to an
all-digital format and eliminate 2 days of print publication per
week was a core entrepreneurial decision over which the [Post-
Gazette] had no duty to bargain.” (J.A. at 32 n.18.) Despite
that, the Board majority stated in no uncertain terms that “[t]his
entrepreneurial decision, however, did not alter the terms of its
preexisting collective-bargaining agreement with the Union or
the resulting postexpiration status quo that it had a statutory
obligation to maintain, including the five-shift guarantee,
independent of any effects bargaining obligation.” (Id.) The
Board therefore did not sidestep the First National
Maintenance question, as the General Counsel has suggested
before us both in briefing and at argument. Instead, the Board
stated a legal conclusion that is plainly inconsistent with First
National Maintenance. And because that conclusion addresses
a purely legal question, we have no obligation under Chenery
to give the Board a second bite at the apple.
41
That is especially proper here because the Post-Gazette
has pressed its First National Maintenance argument at every
stage – before the ALJ, before the Board, and before us. 26 We
are not required under Chenery to turn “judicial review of
agency action into a ping-pong game.” Ricketts v. Att’y Gen.,
955 F.3d 348, 351 (3d Cir. 2020) (quoting N.L.R.B. v. Wyman-
Gordon Co., 394 U.S. 759, 766 n.6 (1969)). So we will not
return this matter to the Board without first “correct[ing] the
error of law committed by that body,” and only then will we
“remand the case to the [agency] so as to afford it the
opportunity of examining the evidence and finding the facts as
required by law.” 27 Hasan v. U.S. Dep’t of Lab., 545 F.3d 248,
26
It was in part for this reason that we laid out so fully
the parties’ arguments in Section 1.D. There is no need to
reiterate them here. Simply put, we perceive no forfeiture of
this question. See Geness v. Cox, 902 F.3d 344, 355 & n.6 (3d
Cir. 2018) (noting that arguments not raised in an appellant’s
opening brief are forfeited); see also Simko v. U.S. Steel Corp,
992 F.3d 198, 205 (3d Cir. 2021) (“It is well-established that
arguments raised for the first time on appeal are not properly
preserved for appellate review.”). And we do not run afoul of
the “principle of party presentation.” See generally United
States v. Sineneng-Smith, 140 S. Ct. 1575, 1579 (2020) (“[A]s
a general rule, our system is designed around the premise that
[parties represented by competent counsel] know what is best
for them, and are responsible for advancing the facts and
argument entitling them to relief.” (internal quotation marks
and citation omitted; second alteration in original)).
27
Because the applicability of the overall impasse rule
to effects bargaining is a matter of first impression that neither
this Court nor any Court of Appeals has addressed, Judge
42
251 (3d Cir. 2008) (quoting Interstate Com. Comm’n v. Clyde
S.S. Co., 181 U.S. 29, 32-33 (1901)).
Accordingly, we turn now to the Board’s First National
Maintenance error. Although the Supreme Court has held that
employers need not bargain over changes to “the scope and
direction” of their businesses, they must “bargain about the
results or effects” of those entrepreneurial decisions. First
National Maintenance, 452 U.S. at 677 & n.15. The Board’s
view – that when an employer decides to change the scope of
its business during negotiations for a CBA, the employer must
bargain to an overall impasse before effectuating its
entrepreneurial decision – would render the managerial
prerogative of First National Maintenance illusory. Unions
would gain “a powerful tool for achieving delay,” id. at 683, as
CBA negotiations can take years, see, e.g., J.A. at 4 (observing
that the Post-Gazette and the Union have been engaged in
negotiations for a successor CBA since March 2017). And it
shows no disrespect to unions to observe where their self-
interest lies. They have every incentive to avoid change “as
long as [the business at issue continues] generating wage
payments.” Keith N. Hylton, Efficiency and Labor Law, 87
Nw. U. L. Rev. 471, 516 (1993). Thus, granting unions a
pocket veto over employers’ entrepreneurial decisions would
undermine the Supreme Court’s decision in First National
Maintenance. Cf. Arrow Auto. Indus., Inc. v. N.L.R.B., 853
F.2d 223, 230 (4th Cir. 1988) (Wilkinson, J.) (“The Supreme
Court remains the final arbiter of the meaning of the National
Smith would not rely on Chenery’s futility exception and
would instead remand without reaching the effects bargaining
issue.
43
Labor Relations Act, and its decisions are binding on the Board
no less than on the lower courts.”).
The Union contends that enabling employers to
implement entrepreneurial decisions before entering a CBA or
reaching an overall impasse would frustrate contract
negotiations by permitting “piecemeal bargaining” that
“remov[es] issues from the bargaining agenda [and] make[s] it
less likely for the parties to find common ground.” (The Union
Br. at 24 (quotations omitted).) Yet the Board has previously
recognized that it is “prudent” for parties to “bargain about
‘effects’ when it is most meaningful to do so.” Show Indus.,
Inc., 326 N.L.R.B. 910, 912 (1998) (plurality). Accordingly,
employers and unions should negotiate immediately over
entrepreneurial decisions, even though “other subjects [will]
not be[] bargained simultaneously,” because changes in the
scope of a business will often render other matters “moot or at
least less critical.” Id. at 913. Those observations track the
Supreme Court’s statement that “bargaining over the effects of
a decision must be conducted in a meaningful manner and at a
meaningful time.” First National Maintenance, 452 U.S. at
681-82.
Finally, as the ALJ here astutely observed, the typical
remedy for unilateral changes to the status quo – reinstatement
of any terminated employees with full backpay – is a poor fit
for entrepreneurial decisions. The elimination of a line of
business often results in redundancies, so when an employer
terminates employees pursuant to an entrepreneurial decision
without engaging in effects bargaining the Board instead
orders the employer to resume negotiations and merely provide
“limited backpay” to the laid-off employees. Transmarine
Navigation Corp., 170 N.L.R.B. 389, 390 (1968); see also
44
Lapeer Foundry & Mach., 289 N.L.R.B. 952, 957 n.11 (1988)
(“[R]einstatement with full backpay does not constitute an
appropriate remedy for an effects-bargaining violation.”). That
may hold true here, as reinstating employees who were once
needed and had done fine work still makes no sense when there
is little or no work for them to do. But we need say no more,
as there has been no predicate finding of inadequate effects
bargaining. Should such a finding be made, the ALJ and Board
may impose a remedy consistent with Transmarine.
III. CONCLUSION
For the foregoing reasons, the General Counsel’s
petition for enforcement of the Board’s order will be denied.
The Post-Gazette’s petition for review will be granted, except
that we will remand for a determination of whether the
Newspaper has indeed engaged in adequate effects bargaining
and, if not, for the crafting of an appropriate remedy for any
effects-bargaining violation.
45