Iatse Local 15 v. NLRB

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
INTERNATIONAL ALLIANCE OF No. 19-70651
THEATRICAL STAGE EMPLOYEES,
LOCAL 15, NLRB Nos.
Petitioner, 19-CA-186007
19-CA-192068
v.
NATIONAL LABOR RELATIONS OPINION
BOARD,
Respondent.
On Petition for Review of an Order of the
National Labor Relations Board
Argued and Submitted March 4, 2020
Seattle, Washington
Filed April 29, 2020
Before: Sandra S. Ikuta, Ryan D. Nelson,
and Danielle J. Hunsaker, Circuit Judges.
Opinion by Judge Hunsaker
2 IATSE LOCAL 15 V. NLRB
SUMMARY *
Labor Law
The panel affirmed the National Labor Relations Board’s
findings that: (a) the employer, Audio Visual Services
Group d/b/a PSAV Presentation Services, effectively
retracted its claim of inability to pay the union’s wage and
benefit proposals, thereby limiting its obligation to produce
financial documents to the union; and (b) PSAV’s conduct
did not constitute bad faith bargaining in violation of the
National Labor Relations Act (the “Act”).
The International Alliance of Theatrical Stage
Employees, Local 15 (the “Union”) is the certified
collective-bargaining representative for PSAV’s employees.
At issue in this collective bargaining case was whether
PSAV effectively retracted its claim of inability to pay the
union’s wage and benefits proposals, thereby limiting its
obligation to produce financial documents to the union, and
whether PSAV failed to bargain in good faith.
The panel held that substantial evidence supported the
NLRB’s finding that the substance of PSAV’s bargaining
position was an unwillingness to pay, rather than an inability
to pay, the Union’s demands. The panel concluded that
substantial evidence supported the NLRB’s finding that
PSAV retracted its inability-to-pay claim, and PSAV’s
failure to produce documents responsive to the Union’s first
document request did not violate the Act.
*
This summary constitutes no part of the opinion of the court. It
has been prepared by court staff for the convenience of the reader.
IATSE LOCAL 15 V. NLRB 3
The panel rejected the Union’s arguments that PSAV
bargained in bad faith. First, the panel held that the fact that
PSAV never changed its wage proposal did not itself
establish that it acted in bad faith; and on this record, the
panel could not conclude that PSAV’s position on benefits
was evidence of bad faith either by itself or in conjunction
with its overall bargaining posture. Second, PSAV’s
employee discipline proposals did not evidence its bad faith.
Third, PSAV’s behavior away from the bargaining table did
not demonstrate its bad faith. Fourth, PSAV’s withholding
of documents did not evidence PSAV’s overall bad faith.
Finally, PSAV’s refusal to bargain before May 2016 did not
evidence overall bad faith bargaining.
COUNSEL
Dmitri Iglitzin (argued), Laura Ewan, and Kelly Skahan,
Barnard Iglitzin & Lavitt LLP, Seattle, Washington, for
Petitioner.
Kellie Isbell (argued) and Gregoire Sauter, Attorneys; Usha
Dheenan, Supervisory Attorney; David Habenstreit, Acting
Deputy Associate General Counsel; Alice B. Stock,
Associate General Counsel; Peter B. Robb, General
Counsel; National Labor Relations Board, Washington,
D.C.; for Respondent.
4 IATSE LOCAL 15 V. NLRB
OPINION
HUNSAKER, Circuit Judge:
At issue in this collective bargaining case is whether the
employer, Audio Visual Services Group d/b/a PSAV
Presentation Services (“PSAV”), effectively retracted its
claim of inability to pay the union’s wage and benefits
proposals, thereby limiting its obligation to produce
financial documents to the union, and whether PSAV failed
to bargain in good faith. Petitioner International Alliance of
Theatrical Stage Employees, Local 15 (“Local 15” or
“Union”) is the certified collective-bargaining representative
for PSAV’s employees. The National Labor Relations Board
(“NLRB”) found that PSAV did retract its inability-to-pay
claim and that PSAV’s conduct both at and away from the
bargaining table did not establish that it acted in bad faith in
violation of the National Labor Relations Act (“Act”),
29 U.S.C. §§ 151–169. Rather, the NLRB concluded that
Local 15 “did not sufficiently test [PSAV]’s willingness to
bargain prior to filing its bad-faith bargaining charge.” Audio
Visual Servs. Grp., Inc., 367 N.L.R.B. No. 103, 2019 WL
1198973, at *10 (Mar. 12, 2019). We hold that substantial
evidence supports the NLRB’s findings, and we affirm.
I. BACKGROUND
PSAV provides event technology services to hotels and
conference centers nationwide, and it maintains offices in
Washington state and Pennsylvania. In December 2015,
Local 15 was certified as the exclusive collective-bargaining
representative for the riggers and technicians 1 in
1
Riggers work with scaffolding and attached devices while
technicians work with the operation, maintenance, and transportation of
IATSE LOCAL 15 V. NLRB 5
Washington who provide audio visual support services for
PSAV. PSAV challenged the union’s certification and
refused to bargain with Local 15 from January 2016 until the
NLRB denied PSAV’s request for review in May 2016. 2
Audio Visual Servs. Grp., Inc., 365 N.L.R.B. No. 84, 2017
WL 2241025, at *3 (May 19, 2017). A few days after its
request for review failed, PSAV acknowledged Local 15 as
the collective-bargaining representative and promptly
responded to Local 15’s request to begin negotiations. 3 From
mid-2016 through early 2017, PSAV and Local 15 engaged
in the bargaining process and held multiple in-person
bargaining sessions, but they did not reach agreement.
The parties’ first in-person bargaining session was in
June 2016, and the parties primarily focused on establishing
ground rules for their bargaining process. The following
month, Local 15 presented its first contract proposal, which
sought wages of $33 to $45 per hour, representing a 73- to
equipment. This case concerns the bargaining process related to the
technicians only.
2
Because the NLRB’s certification decision was not a “final order,”
29 U.S.C. § 160(f), PSAV could obtain review of the decision “only by
refusing to bargain, thereby causing the Board to rule that the employer
[has] committed an unfair labor pr[actice].” NLRB v. S.R.D.C., Inc.,
45 F.3d 328, 330 n.2 (9th Cir. 1995) (internal quotation marks and
citation omitted); accord Boire v. Greyhound Corp., 376 U.S. 473, 477
(1964).
3
Local 15 filed a charge with the NLRB against PSAV in January
2016 asserting that PSAV violated the Act by refusing to negotiate while
its challenge to Local 15’s certification was pending. Audio Visual Servs.
Grp., Inc., 2017 WL 2241025, at *1. The NLRB agreed and held that
PSAV’s refusal to negotiate until May 2017 was an unfair labor practice
in violation of the Act. Id. at *3. The NLRB’s decision regarding Local
15’s January 2016 charge is not at issue in this appeal.
6 IATSE LOCAL 15 V. NLRB
120-percent increase depending on job classification. Local
15 also sought, among other things, overtime pay in
circumstances where it is not legally required, contributions
to Local 15’s pension and health plans, limits on PSAV’s
ability to subcontract work, progressive discipline measures
and “just cause” limits on termination and discipline, and an
arbitration provision. A few weeks later, PSAV presented a
counter-proposal to pay wage rates from $15 to $30 per hour
depending on job classification. PSAV also proposed,
among other things, that current employees would “maintain
their current rate of pay and not be subject to a reduction in
pay as a result of this Agreement,” overtime would be paid
as required by law, the same benefits provided to
unrepresented employees would be provided to the
employees represented by Local 15, discipline would be
based on a “reasonable belief” standard, and arbitration
proceedings would be final.
The parties held their second bargaining session a week
later, on August 17–18, 2016. 4 Local 15 relayed the
employees’ disappointment with PSAV’s wage proposal.
PSAV’s attorney, David Shankman, responded that Local 15
was “delusional” and misleading employees and that
agreeing to the Union’s proposed wage increase would be
“suicide” for PSAV and put it “underwater.” Audio Visual
Servs. Grp., Inc., 2019 WL 1198973, at *2. Shankman
asserted that PSAV pays 50-percent commissions to Seattle-
area hotels and convention centers, its contracts with those
properties are nonexclusive and precarious, and the Seattle
market would not support event rates necessary to cover the
union’s proposed wage rates. Local 15 explained that its
4
We refer to the two-day meeting in August as a single bargaining
session while the Administrative Law Judge (“ALJ”) referred to the
August sessions as two separate sessions.
IATSE LOCAL 15 V. NLRB 7
wage proposal was partially based on PSAV’s union
contracts in California markets, but PSAV disputed the
relevance of those contracts because they relate to “as-
needed” employees who have “no expectation of regular
hours” unlike PSAV’s in-house Washington technicians
who “work regardless of specific shows or events and often
work when no billable opportunity is presented.” During this
second bargaining session, Local 15 reduced its requested
wage rates by $2 per hour (still a 64- to 106-percent increase)
and adjusted its overtime and discipline proposals. The
parties did not reach agreement on these issues but reached
tentative agreements on other contract terms.
After the second bargaining session, Local 15 requested
financial information supporting PSAV’s assertion that the
Union’s wage proposal would put PSAV “underwater” and
would be “suicide” for the company. Specifically, Local 15
requested:
[1] Documents sufficient to substantiate
PSAV’s claim of its inability to pay the
requested wages; particularly, we request
that the company provide documents that
demonstrate the company’s gross
revenues, expenses, and profits for 2015
and 2016 to date;
[2] PSAV’s current contracts with any and
all of its hotel clients in Seattle, SeaTac,
Bellevue, Tukwila, and Tacoma;
[3] If the contracts requested in above don’t
expressly establish the commission rates
and sums PSAV has paid to such property
owners between January 1, 2015 and the
8 IATSE LOCAL 15 V. NLRB
present, documents that demonstrate that
information;
and,
[4] Documents sufficient to show the rates
charged to all event clients to whom
PSAV has provided service in the cities
listed above within the past year
(September 1, 2015 to present).
Id. at *3. Shankman rebuffed these requests, stating “[t]his
is not an inability to pay for lack of revenue. It’s a refusal to
pay an hourly rate that would be detrimental to the business.”
He further explained that “no employer in this business
would pay such a wage to its hourly workforce that was so
grossly outside of its business model and if it did so, it would
be suicide for the company.” Local 15 did not respond to
PSAV’s clarification that it was unwilling, rather than
unable, to pay the Union’s requested wages.
In mid-September, the parties exchanged additional
counterproposals in anticipation of their third in-person
bargaining session on September 19, 2016, but neither party
changed their position on wages, benefits, or discipline.
During their third bargaining session the parties reached
tentative agreements on several terms but not on any of their
key points of disagreement.
Less than one month later, in early October 2016, Local
15 filed an NLRB charge against PSAV, asserting: “Within
the past six (6) months [PSAV] has violated the [the Act] by
failing and refusing to provide information to IATSE Local
15 that is relevant to its role and duties as employees’
collective bargaining representative.” Two days later,
Shankman sent a letter to Local 15 and the entire bargaining
IATSE LOCAL 15 V. NLRB 9
unit defending PSAV’s wage proposal and explaining that
the Union’s wage proposal was based on contracts from
California markets where union employees are hired as-
needed with no expectation of regular hours. Shankman’s
letter stated: “We heard your proposal for a nearly 100% pay
increase for some positions. We just don’t agree with it, and
we don’t accept it.”
The parties cancelled bargaining sessions planned for
November and December but continued to exchange
contract proposals. In late January 2017, Local 15 emailed
PSAV a partial contract proposal with modified discipline,
grievance, and arbitration provisions. Local 15 stated: “We
look forward to the parties’ return [to] the table and hope that
the time away brings a renewed sense of purpose to the
parties’ talks and an eye towards real progress.” The parties
held their fourth in-person bargaining session on January 26,
2017, and reached tentative agreements on some additional
terms. The next day, however, Local 15 filed another NLRB
charge alleging that PSAV was bargaining in bad faith. After
filing this charge, Local 15 cancelled the parties’ bargaining
session scheduled in March 2017 and declined PSAV’s
requests to continue negotiations.
After Local 15 filed its second NLRB charge, PSAV’s
CEO, Mike McIlwain, attended a meeting of the company’s
Philadelphia employees the day before the employees were
scheduled to vote on unionization and stated that
negotiations in Seattle were at a stalemate and the same
impasse could happen in Philadelphia. A slide from
McIlwain’s presentation also asserted: “Collective
bargaining does not always result in agreement . . . . PSAV
will not enter into an agreement that would negatively
impact our business model.” He also stated that, while PSAV
10 IATSE LOCAL 15 V. NLRB
had to bargain in good faith, it was not obligated to agree on
any specific terms.
The NLRB General Counsel issued a complaint against
PSAV in May 2017 based on Local 15’s October 2016 and
January 2017 charges. After briefing and a two-day hearing,
the ALJ determined that PSAV violated Sections 8(a)(5) and
(1) of the Act by not giving Local 15 the financial
information it requested and by not bargaining in good faith
during the parties’ negotiations. PSAV appealed to the
NLRB.
The NLRB agreed in part with the ALJ regarding the
document requests, concluding that PSAV violated the Act
by refusing to produce the information responsive to Local
15’s second, third, and fourth requests because this
information was relevant to Local 15’s ability to bargain
over wages. However, the NLRB concluded that Local 15’s
first document request related to PSAV’s inability-to-pay
claim, which PSAV had retracted and, therefore, it did not
have to provide this information. Further, the NLRB held
that PSAV did not act in bad faith by withholding documents
responsive to requests two through four because PSAV
reasonably believed that disclosure was not required after it
retracted its inability-to-pay claim. The NLRB reversed the
ALJ’s finding that PSAV failed to bargain in good faith, the
subject of Local 15’s January 2017 charge, stating: “After
considering the totality of [PSAV]’s conduct, both at and
away from the bargaining table, we find that the General
Counsel did not establish that [PSAV] failed to bargain in
good faith in violation of Section 8(a)(5) and (1).” Audio
Visual Servs. Grp., Inc., 2019 WL 1198973, at *12. Local 15
now appeals and asks us to overturn the NLRB’s decision.
IATSE LOCAL 15 V. NLRB 11
II. DISCUSSION
Local 15 asserts the NLRB made two errors. First, it
argues that PSAV did not effectively retract its inability-to-
pay claim and, therefore, was obligated to produce all
documents requested by the Union, including the documents
responsive to its first request. 5 Second, it argues that PSAV’s
conduct at and away from the bargaining table establishes
that PSAV failed to bargain in good faith. We have
jurisdiction under 29 U.S.C. § 160(f) and address each
argument in turn.
A. Standard of Review
We must affirm the NLRB if its findings of fact are
supported by substantial evidence and it correctly applied the
law. NLRB v. Int’l Ass’n. of Bridge Iron Workers, Local 229,
941 F.3d 902, 904 (9th Cir. 2019). Evidence is substantial
when a “‘reasonable mind might accept [it] as adequate to
support a conclusion’—even if it is possible to draw a
contrary conclusion from the evidence.” Recon Refractory
& Constr. Inc. v. NLRB, 424 F.3d 980, 986 (9th Cir. 2005)
(alteration in original) (quoting Edlund v. Massanari,
253 F.3d 1152, 1156 (9th Cir. 2001)). Thus, we must
“evaluate the entire record” and uphold the NLRB if a
reasonable jury could have reached the same conclusion,
even if we “would justifiably have made a different choice”
under de novo review. Local Joint Exec. Bd. of Las Vegas v.
NLRB, 515 F.3d 942, 945 (9th Cir. 2008) (internal quotation
marks and citation omitted).
5
PSAV did not appeal the NLRB’s decision that PSAV was
obligated to produce information responsive to Local 15’s second, third,
and fourth document requests and, therefore, the NLRB’s decision on
those requests stands and we do not address them.
12 IATSE LOCAL 15 V. NLRB
B. Did PSAV effectively retract its inability-to-pay
claim?
Local 15 claims the NLRB erred by finding that PSAV
retracted its inability-to-pay claim. According to Local 15,
because PSAV maintained the same bargaining posture after
its purported retraction, the retraction was ineffective.
The duty to bargain in good faith requires the employer
to “provide the union with information that is relevant and
necessary to bargaining.” Frankl ex rel. NLRB v. HTH Corp.,
693 F.3d 1051, 1064 (9th Cir. 2012). Whether an employer’s
refusal to provide requested financial documents violates the
duty to bargain in good faith “turns upon the particular facts
of a case.” Id.; see also NLRB v. Truitt Mfg. Co., 351 U.S.
149, 152–53 (1956). When an employer justifies its
bargaining position by claiming an inability to pay the
union’s demands, the union may “request financial
documents sufficient to substantiate the employer’s
position.” Frankl, 693 F.3d at 1064. As the Supreme Court
explained, “[i]f such an argument is important enough to
present in the give and take of bargaining, it is important
enough to require some sort of proof of its accuracy.” Truitt,
351 U.S. at 152–53.
However, asserting an unwillingness to pay a union’s
demands during negotiations is different than asserting a
financial inability to pay. See Int’l Chem. Workers Union
Council v. NLRB, 467 F.3d 742, 749 n.4 (9th Cir. 2006)
(discussing cases); Nielsen Lithographing Co., 305 N.L.R.B.
697, 699–701 (1999) (same). An employer asserting only an
unwillingness to pay does not have a duty to produce
information about its financial viability upon request from
the union. Nielsen Lithographing Co., 305 N.L.R.B. at 700–
01; SDBC Holdings, Inc. v. NLRB, 711 F.3d 281, 288 (2d
Cir. 2013) (“[N]o . . . need for financial information exists
IATSE LOCAL 15 V. NLRB 13
where an employer has professed only an unwillingness to
meet the union’s demands, as opposed to, expressly or by
implication, claiming it cannot do so during the term of the
very contract being negotiated.”); Lakeland Bus Lines, Inc.
v. NLRB, 347 F.3d 955, 961 (D.C. Cir. 2003) (“[D]ecisions,
both from the Board and this court, have emphasized a
distinction between asserting an inability to pay, which
triggers the duty to disclose, and asserting a mere
unwillingness to pay, which does not.”); Rivera-Vega v.
ConAgra, Inc., 70 F.3d 153, 159 (1st Cir. 1995) (“Circuit
courts interpreting Truitt have long distinguished between
cases in which an employer claims an inability to pay . . .
and those in which the employer maintains that complying
with the union’s request would place it at a competitive
disadvantage, ordering disclosure in the former but denying
it in the latter.”).
We determine whether an employer asserted an inability-
to-pay claim not based on the use of magic words but on
whether the “essential core of the [employer’s] bargaining
posture as a whole, as expressed to the Union, was grounded
in assertions amounting to a claim that it could not
economically afford to pay for the Union’s proposals.” Int’l
Chem. Workers Union Council, 467 F.3d at 749 (internal
quotation marks and citation omitted). After an employer
makes an inability-to-pay claim, it “can shed its obligation
to furnish financial information if it truthfully and properly
communicates a disavowal of its previous assertions of
inability to pay.” Id. at 752. A retraction is effective if the
employer makes it “unmistakably clear to a union that it has
abandoned its plea of poverty.” Id. (internal quotation marks
and citation omitted). Again, we look to “‘the substance of
the employer’s bargaining position’” to determine whether
it retracted its claim. Id. (emphasis in original) (quoting
Rivera-Vega, 70 F.3d at 159).
14 IATSE LOCAL 15 V. NLRB
Here, PSAV concedes Shankman’s statements at the
August 2016 bargaining session that accepting Local 15’s
proposed wage increases would be “suicide” for PSAV and
would put it “underwater” constituted an inability-to-pay
claim. Therefore, we express no opinion on that issue and
focus on Local 15’s argument that the NLRB erred by
concluding that PSAV retracted this claim. Following
Shankman’s August statements, Local 15 issued four
document requests to “better understand PSAV’s financial
position.” In declining these requests, Shankman stated:
What I was explaining during our
negotiations is that no employer in this
business would pay such a wage to its hourly
workforce that was so grossly outside of its
business model and if it did so, it would be
suicide for the company. This is not an
inability to pay for lack of revenue. It’s a
refusal to pay an hourly rate that would be
detrimental to the business.
This is a clear disavowal of a claim of poverty. See Lakeland
Bus Lines, 347 F.3d at 963. PSAV expressly communicated
to Local 15 that its refusal to pay the requested wage rates
stemmed from a judgment regarding appropriate business
strategy, not from financial nonviability, and no evidence
suggests that PSAV’s clarification of its position was
disingenuous.
The record here does not reveal the type of
circumstances present in International Chemical—such as
making repeated references to economic hardship or
threatening an economic layoff—to suggest that PSAV was
playing semantic games and “continue[d] to represent its
position as one of an ability to pay.” 467 F.3d at 754. Quite
IATSE LOCAL 15 V. NLRB 15
the contrary. Shankman sent a letter to the entire bargaining
unit a few weeks after his initial retraction and explained:
“We heard your proposal for a nearly 100% pay increase for
some positions. We just don’t agree with it, and we don’t
accept it.” He further explained that Local 15’s reliance on
California contracts in crafting its wage proposal was flawed
because employees in the California markets “are hired on
an as-needed basis and have no expectation of regular hours”
unlike the employees in Seattle who “work regardless of
specific shows or events and often work when no billable
opportunity is presented.”
While PSAV expressly declined to deviate from its
business model presumably due to financial considerations,
substantial evidence supports the finding that “‘the
substance of [PSAV]’s bargaining position’” was an
unwillingness to pay the Union’s demands, not an inability
to pay. Id. at 752 (emphasis in original) (quoting Rivera-
Vega, 70 F.3d at 159). Not every financially-motivated
decision by an employer establishes that the employer lacks
an ability to pay. See, e.g., Nielsen Lithographing Co.,
305 N.L.R.B. at 701 (“Efforts to maximize profits and/or
minimize costs or to reallocate expenses among various
categories of the production function do not, in and of
themselves, constitute a financial inability to pay . . . .”).
PSAV did not refer to financial nonviability after retracting
its inability-to-pay claim, nor does the larger context of the
parties’ negotiations suggest that PSAV’s position was
based on a lack of financial viability. Thus, our decision in
International Chemical is distinguishable from this case, and
we conclude substantial evidence supports the NLRB’s
finding that PSAV retracted its inability-to-pay claim. As a
result, we affirm the NLRB’s decision that PSAV’s failure
to produce documents responsive to Local 15’s first
document request did not violate the Act.
16 IATSE LOCAL 15 V. NLRB
C. Did PSAV violate its duty to bargain in good faith?
Local 15 argues the NLRB erred in concluding that
PSAV bargained in good faith, and it points to several
aspects of PSAV’s conduct during the bargaining process
that it contends evidence bad faith, including PSAV’s
(1) wage and benefits proposals, (2) employee discipline
proposals, (3) CEO’s statements at a union meeting in
Philadelphia, (4) refusal to produce the documents that Local
15 requested, and (5) refusal to bargain with Local 15 before
May 2016. We address each of Local 15’s arguments.
Section 8(a)(5) of the Act establishes that it is 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). Both Sections 8(a)(5) and 8(d) of the
Act “require an employer to bargain ‘in good faith with
respect to wages, hours, and other terms and conditions of
employment.’” Litton Fin. Printing Div. v. NLRB, 501 U.S.
190, 198 (1991) (quoting 29 U.S.C. § 158(d)). The duty to
bargain in good faith focuses on the bargaining parties’
conduct and attitude during negotiations and is satisfied
where the parties make a “serious attempt to resolve
differences and reach a common ground.” NLRB v. Ins.
Agents’ Int’1 Union, 361 U.S. 477, 486 (1960) (quoting
29 U.S.C. § 158(d)). But the duty to negotiate in good faith
does not “compel either party to agree to a proposal or
require the making of a concession.” Id. at 486–87. Nor is
hard bargaining prohibited. See Seattle-First Nat. Bank v.
NLRB, 638 F.2d 1221, 1227 n.9 (9th Cir. 1981). The
bargaining parties must mutually approach the bargaining
process “in good faith with a desire to reach agreement, . . .
[but] Congress intended that the parties should have wide
latitude in their negotiations, unrestricted by any
governmental power to regulate the substantive solution of
IATSE LOCAL 15 V. NLRB 17
their differences.” Ins. Agents’ Int’l Union, 361 U.S. at 488
(emphasis added).
To determine if a party negotiated in good faith, the
NLRB examines and draws inferences from the parties’
conduct as a whole “both at and away from the bargaining
table.” Pub. Serv. Co. of Okla., 334 N.L.R.B. 487, 487
(2001). When evaluating whether a specific contract
proposal evidences bad faith, the NLRB “focuses on
whether, on the basis of objective factors, a demand is
clearly designed to frustrate agreement on a collective-
bargaining agreement.” Liquor Indus. Bargaining Grp.,
333 N.L.R.B. 1219, 1220 (2001). “[U]nrealistically harsh or
extreme proposals can serve as evidence that the party
offering them lacks a serious intent to adjust differences and
reach an acceptable common ground.” Id. For example, the
NLRB has held an inference of bad faith can be drawn where
an employer’s contract proposals “taken as a whole, would
leave the union and the employees . . . with substantially
fewer rights and less protection than provided by law
without a contract.” Pub. Serv. Co. of Okla., 334 N.L.R.B.
at 487–88. But always, our analysis of the parties’
bargaining must bear on their attitude toward, and conduct
during, the bargaining process itself rather than pass
judgment on the substance of their contract positions
separate from what they reveal about the bargaining process.
Ins. Agents’ Int’1 Union, 361 U.S. at 488–89; Pub. Serv. Co.
of Okla., 334 N.L.R.B. at 487–88.
1. Wages and benefits proposals
Determining wages is of utmost importance in the
bargaining process. Liquor Indus. Bargaining Grp.,
333 N.L.R.B. at 1221. An employer’s demand for unilateral
control over wages while refusing to provide any governing
standard or guidance for how compensation will be set can
18 IATSE LOCAL 15 V. NLRB
indicate bad faith. See id. at 1220–21; Marina Assocs.,
296 N.L.R.B. 1116, 1130–33 (1989). In Liquor Industry
Bargaining Group, the employer’s final proposal eliminated
the employees’ ability to contest the amount of wages or how
the employer set wages. 333 N.L.R.B. at 1219–21. The
proposal also allowed the employer to redirect sales away
from union sales representatives, which would effectively
reduce their wages. Id. Despite repeated requests from the
union for information about how the employer intended to
set compensation, the employer “stubbornly refused to offer
any details, saying only that it needed ‘flexibility’ in it[s]
operations.” Id. at 1221. The NLRB held that the employer’s
“offer was extreme in nature . . . and evidence[d] that the
[employer] was not negotiating in good faith with a view to
[sic] trying to reach or complete agreement with the Union.”
Id.
Likewise, in Marina Associates, the employer’s proposal
gave the union “no role in determining wages.”
296 N.L.R.B. at 1130. The employer proposed a tiered wage
structure with minimums and maximums for each tier and a
review process for wage increases, but it refused to specify
the minimum or maximum rates—despite repeated requests
from the union—or to define any guidelines for when
increases would be granted because that was “left to the sole
discretion of the [employer].” Id. Additionally, wage
decisions were exempted from the employer’s grievance and
arbitration process. Id. Under these circumstances, the
NLRB held the employer’s wage proposal evidenced its bad
faith because it sought to “retain unilateral control over all
aspects of wages and thus effectively removed wages as a
negotiable issue not only at the bargaining table but also for
the term of any bargaining agreement.” Id. at 1133.
 IATSE LOCAL 15 V. NLRB 19
Here, we agree with the NLRB that PSAV’s wage
proposal is distinguishable from those the employers
presented in Liquor Industry Bargaining Group and Marina
Associates. PSAV specified a starting pay range for new
employees with an opportunity for merit increases and
guaranteed that existing employees would not have their
wages reduced under the newly proposed wage structure.
PSAV also explained that it would set a new employee’s
compensation based on the “employee’s qualifications and
skills” and that it would set merit increases “based on
employee performance as determined by the employee’s
yearly performance appraisal.” PSAV also provided its
performance-appraisal scale and the corresponding raise
percentages. Thus, unlike in Liquor Industry Bargaining
Group and Marina Associates, PSAV did not hide the ball
regarding how it would set employee compensation or what
rates it would pay.
It is undisputed that PSAV’s wage proposals remained
unchanged throughout the bargaining process. But Local 15
also took a rigid stance on wages, consistently demanding
substantial increases. Even though Local 15 lowered its
initial rate proposal by $2 per hour, as the NLRB noted, this
reduced rate still constituted a 64- to 106-percent increase
from the status quo.
Local 15 based its proposed significant wage increases
for the employees in Washington in part on PSAV’s
California union contracts, but PSAV explained that the
employees in the two markets work under materially
different circumstances regarding the consistency of work
they receive. See Apogee Retail, NY, LLC, 363 N.L.R.B. No.
122, 2016 WL 683211, at *1 n.3 (Feb. 17, 2016) (explaining
that good faith bargaining requires parties to justify or
explain their positions). That PSAV never changed its wage
20 IATSE LOCAL 15 V. NLRB
proposal does not itself establish that it acted in bad faith.
See St. George Warehouse, 349 N.L.R.B. 870, 872 (2007)
(“[A] party is entitled to stand firm on a position if he
reasonably believes that it is fair and proper or that he has
sufficient bargaining strength to force the other party to
agree.”). PSAV’s explanation for rejecting the Union’s wage
proposal is not facially unreasonable or disingenuous. And
in the context of the parties’ negotiations, PSAV’s wage
proposal is not the kind of “unrealistically harsh or extreme
proposal[]” that itself evidences bad faith. Liquor Indus.
Bargaining Grp., 333 N.L.R.B. at 1220. Moreover, as the
NLRB found, PSAV’s bargaining conduct does not indicate
that it took an all-or-nothing stance on wages and refused to
negotiate this issue with Local 15. Instead, the negotiations
thus far demonstrate that the parties have divergent views on
the appropriate business model and wage rates for the
Washington market, which is not something we or the NLRB
have the authority to regulate. See Ins. Agents’ Int’1 Union,
361 U.S. at 488; 29 U.S.C. § 158(d).
Local 15 also claims that PSAV demanded exclusive
control over employee benefits. Specifically, Local 15
contends it was bad faith for PSAV to insist on aligning
bargaining unit employees’ benefits with the benefits
provided to non-unit employees. PSAV’s proposal lacks the
hallmarks of exerting total control over employee benefits.
Cf. Pub. Serv. Co. of Okla., 334 N.L.R.B. at 488 (employer’s
final proposal denied the union any role in establishing or
maintaining employee benefits by, among other things,
permitting the employer to “chang[e] from time to time for
business reasons important employee benefits such as
vacation days, holidays, medical insurance, leave time, and
life, disability, and on-the-job accident insurance”) (internal
quotation marks omitted). PSAV specified the accrual rates
for vacation time and paid sick and safe time. For all other
IATSE LOCAL 15 V. NLRB 21
benefits (retirement savings, disability plan, life insurance,
etc.), PSAV proposed that unit employees would be granted
the same benefits offered to non-unit employees. PSAV’s
counterproposal differed from Local 15’s benefit proposal,
but there is no indication that Local 15 materially challenged
PSAV’s position in subsequent bargaining sessions or
communications. Instead, Local 15 claims that PSAV
refused to bargain over benefits in the August 2016 session
where Shankman claimed the wage proposals would be
suicide for PSAV. On this record, we cannot conclude that
PSAV’s position on benefits is evidence of bad faith either
by itself or in conjunction with its overall bargaining posture.
For these reasons, we find that substantial evidence
supports the NLRB’s conclusion that PSAV’s wages and
benefits proposals did not indicate bad faith; instead, both
parties were “engaged in hard bargaining.” Audio Visual
Servs. Grp., Inc., 2019 WL 1198973, at *8.
2. Employee discipline proposals
Local 15 also claims that PSAV’s employee discipline
proposals evidence its bad faith. As the NLRB found,
PSAV’s proposed discipline standard did not maintain the
status quo. Coming into the bargaining process, the
employees represented by Local 15 were at-will. At-will
employment gives the employer unfettered discretion: “an
employee may be terminated for a good reason, bad reason,
or no reason at all.” Engquist v. Or. Dep’t of Agric., 553 U.S.
591, 606 (2008) (internal quotation marks and citation
omitted). As the NLRB correctly found, PSAV proposing a
reasonable-belief standard demonstrates that it was “willing
to limit its discretion over discipline and discharge.” Audio
Visual Servs. Grp., Inc., 2019 WL 1198973, at *9 n.15.
Contrary to Local 15’s assertion, PSAV’s employee
discipline proposal is not an example of an employer leaving
22 IATSE LOCAL 15 V. NLRB
the “Union and the employees with substantially fewer rights
and protection than they would have had without any
contract at all.” Pub. Serv. Co. of Okla., 334 N.L.R.B. at 489.
Nor does this proposal show PSAV was trying to “frustrate
agreement on a collective-bargaining contract.” Liquor
Indus. Bargaining Grp., 333 N.L.R.B. at 1220.
3. CEO McIlwain’s statements
Local 15 also asserts that PSAV’s behavior away from
the bargaining table demonstrates its bad faith. Specifically,
Local 15 points to a meeting held the day before PSAV’s
Philadelphia employees were scheduled to vote on
unionization during which McIlwain stated that negotiations
in Washington were at a “stalemate,” which could occur in
Philadelphia, and that PSAV “will not enter into an
agreement that would negatively impact our business
model.”
Generally, the NLRB is “reluctant to find bad-faith
bargaining exclusively on the basis of a party’s misconduct
away from the bargaining table.” St. George Warehouse,
Inc., 349 N.L.R.B. at 877 (internal quotation marks and
citation omitted). We consider such conduct only “for what
light it sheds on conduct at the bargaining table.” Id. (internal
quotation marks omitted). For example, in St. George
Warehouse, the NLRB held that unlawfully assisting with a
petition to decertify the union and unilaterally changing the
employees’ health plan were insufficient to demonstrate the
employer bargained in bad faith. Id. Significant to the NLRB
were that two individuals who helped with the
decertification petition did not represent the employer during
negotiations, and the third individual who was involved in
both the decertification and negotiations had only one
conversation about decertification. Id. This person’s
involvement with the petition did not cause negotiations to
IATSE LOCAL 15 V. NLRB 23
break down because negotiations continued for another year.
Id. Likewise, the employer changed the employees’ health
plan because the prior plan expired, and it was unclear
whether the new plan was a “material and substantial change
to the status quo.” Id.
Conversely, in Overnite Transportation Company,
296 N.L.R.B. 669, 670–71 (1989), the NLRB held that
statements threatening employees with plant closures and
job loss if the employees unionized, coupled with the
employer’s threats to bargain in bad faith, refuse to sign a
contract with the union, and break a strike showed that the
employer was “bent on behaving as its managers had earlier
threatened.” See also Koons Ford of Annapolis,
282 N.L.R.B. 506, 521 (1986) (threats of forcing a strike,
severe discipline, and loss of preexisting employee
privileges such as a parts discount and ability to work on
personal vehicles after hours violated section 8(a)(1) of the
Act); Kona 60 Minute Photo, 277 N.L.R.B. 867, 868 (1985)
(holding that employer’s threatening and interrogating
employee in connection with union organizing constituted
an unfair labor practice).
Here, McIlwain did not threaten unlawful conduct. He
described the status of negotiations in Washington and stated
the truism that the duty to bargain in good faith does not
require PSAV to accept specific proposals. See Ins. Agents’
Int’1 Union, 361 U.S. at 486. And even if his comments were
intended to dissuade PSAV’s Philadelphia employees from
supporting the union, they do not demonstrate that PSAV
acted in bad faith in its Washington negotiations. As in St.
George Warehouse, there is no evidence that McIlwain’s
speech caused the parties’ negotiations to break down where
the speech occurred after Local 15 filed a charge alleging
that PSAV was negotiating in bad faith and refused to
24 IATSE LOCAL 15 V. NLRB
continue negotiations with PSAV. Nor were McIlwain’s
statements akin to the threats of plant closures and job losses
in Overnite. Thus, we conclude that substantial evidence
supports the NLRB’s conclusion that PSAV’s conduct away
from the bargaining table does not indicate bad faith
bargaining.
4. Refusal to provide requested documents
In addition to arguing that PSAV’s withholding of
documents was itself a violation of the Act, Local 15 also
argues the withholding evidences PSAV’s overall bad faith.
As previously discussed, the duty to bargain in good faith
generally requires employers to provide “relevant
information needed by a labor union for the proper
performance of its duties as the employees’ bargaining
representative.” Detroit Edison Co. v. NLRB, 440 U.S. 301,
303 (1979). However, not every refusal to produce
documents, even relevant documents, violates the Act.
NLRB v. Associated Gen. Contractors of Cal., Inc., 633 F.2d
766, 770 (9th Cir. 1980). “The employer’s reasons for
nondisclosure and the negotiating conduct of the parties
must be considered.” Id.; see also Detroit Edison Co.,
440 U.S. at 318 (rejecting “proposition that union’s interests
in arguably relevant information must always predominate
over all other interests, however, legitimate” and noting
“such an absolute rule has never been established”); Frankl,
693 F.3d at 1064 (recognizing circumstances where an
employer can limit its disclosure in response to union’s
requests for records).
We previously concluded that PSAV was not required to
produce documents responsive to Local 15’s first document
request because it retracted its inability-to-pay claim.
Therefore, PSAV’s failure to produce those documents was
not an act of bad faith. Likewise, we conclude that PSAV’s
IATSE LOCAL 15 V. NLRB 25
failure to produce documents responsive to Local 15’s other
requests does not indicate bad faith bargaining. PSAV
believed, although mistakenly, that the relevance of all of
Local 15’s document requests depended on PSAV making
an inability-to-pay claim and, therefore, it had no duty to
provide the requested information because it was not making
such a claim. PSAV also explained it was unwilling to
produce documents responsive to Local 15’s requests
because they sought “proprietary and confidential business
information.”
This is not a case where PSAV ignored or refused even
to consider Local 15’s requests. Nor is it a case where the
information sought by Local 15 was presumptively relevant
to the bargaining process. See Associated Gen. Contractors
of Cal., 633 F.2d at 770 n.4a. PSAV explained to Local 15
why it was not producing documents responsive to the
document requests. And even though the NLRB later
determined that PSAV’s position was partially wrong, the
error was not so patently obvious as to suggest that PSAV’s
position was illegitimate or that it was trying to frustrate the
parties’ ability to reach an agreement. Further, there is no
indication that Local 15 challenged PSAV’s explanation or
made any effort to negotiate this issue with PSAV or
persuade PSAV that the requested documents remained
relevant to the bargaining process regardless of any inability-
to-pay claim. See id. at 770 (holding “the negotiating
conduct of the parties” is relevant in assessing good faith
related to document production); cf. Frankl, 693 F.3d
at 1064–65 (holding that employer withheld requested
documents in bad faith where union repeatedly explained
why limited production was inadequate and where union
signed confidentiality agreement to address employer’s
concerns). Instead, less than a month after issuing its
document requests, Local 15 filed a charge against PSAV
26 IATSE LOCAL 15 V. NLRB
with the NLRB. Under these facts, we conclude that PSAV’s
failure to produce documents responsive to Local 15’s
requests is not evidence of bad faith bargaining.
5. Refusal to bargain before May 2016
Finally, Local 15 contends that PSAV acted in bad faith
by refusing to bargain with Local 15 from January to May
2016. As noted above, see supra note 2, PSAV refused to
bargain during this time in order to obtain review of the
NLRB’s certification decision, see S.R.D.C., Inc., 45 F.3d
at 330 n.2, and the NLRB found that PSAV’s refusal was
unlawful, Audio Visual Servs. Grp., Inc., 2017 WL 2241025,
at *3. However, in the current proceeding, the NLRB
concluded that PSAV’s refusal did not evidence overall bad
faith bargaining. Specifically, the NLRB noted that PSAV’s
challenge to Local 15’s certification was pending during this
time and that after PSAV’s challenge was rejected, it quickly
engaged in the bargaining process with Local 15. The record
does not compel a contrary conclusion. PSAV has actively
engaged in the bargaining process since May 2016 by
attending multiple in-person bargaining sessions,
responding to Local 15’s contract proposals, making its own
proposals, and reaching agreement with Local 15 on
numerous contract terms.
Finally, we note—as did the NLRB—that viewing the
parties’ entire course of negotiations reveals that Local 15
did not sufficiently utilize the bargaining process before
charging PSAV with bad faith. The negotiations occurred
from June 2016 through January 2017—eight months. Local
15 filed an NLRB charge related to its document requests in
October, less than a month after issuing the requests. PSAV
had explained why it was not producing the requested
documents, and Local 15 never responded to PSAV’s
explanation or asserted its continued belief that it was
IATSE LOCAL 15 V. NLRB 27
entitled to the requested documents. Then, after only one
additional bargaining session (because both parties
cancelled bargaining sessions scheduled for late 2016),
Local 15 filed another NLRB charge asserting PSAV was
bargaining in bad faith. And since filing that charge, it has
refused PSAV’s efforts to continue bargaining. On this
record, we find no error in the NLRB’s conclusion that Local
15 “did not sufficiently test [PSAV]’s willingness to bargain
prior to filing its bad-faith bargaining charge.” Audio Visual
Servs. Grp., Inc., 2019 WL 1198973, at *10.
III. CONCLUSION
PSAV effectively retracted its inability-to-pay claim
and, therefore, we affirm the NLRB’s decision that PSAV
did not violate the Act by failing to produce documents
responsive to Local 15’s first document request. Substantial
evidence also supports the NLRB’s conclusion that PSAV’s
conduct at and away from the bargaining table did not
constitute bad faith bargaining.
AFFIRMED.