Tribune Publishing Co. v. National Labor Relations Board

United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued November 18, 2008 Decided April 28, 2009
No. 07-1455
TRIBUNE PUBLISHING COMPANY,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
Consolidated with 07-1506
On Petition for Review and Cross-Application for
Enforcement of an Order
of the National Labor Relations Board
L. Michael Zinser argued the cause and filed the briefs for
petitioner.
Gregory P. Lauro, Attorney, National Labor Relations
Board, argued the cause for respondent. With him on the brief
were Ronald E. Meisburg, General Counsel, John H. Ferguson,
Associate General Counsel, Linda Dreeben, Deputy Associate
General Counsel, and Julie B. Broido, Supervisory Attorney.
Jewel L. Fox, Attorney, entered an appearance.
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Before: SENTELLE, Chief Judge, and GRIFFITH, Circuit
Judge, and RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Chief Judge SENTELLE.
SENTELLE, Chief Judge: Tribune Publishing Company
petitions for review of the National Labor Relations Board’s
decision determining that the Company violated the National
Labor Relations Act, 29 U.S.C. §§ 151-169 (2008), by
unilaterally discontinuing the use of the Company’s direct
deposit system to collect union dues. Because the National
Labor Relations Board’s decision is supported by substantial
evidence and is consistent with the law, we deny the petition and
grant the National Labor Relations Board’s cross-application to
enforce its order.
Background
No factual issues appear to be in dispute. Petitioner Tribune
Publishing Company (“Tribune” or “Company”) publishes a
daily newspaper in Columbia, Missouri. Certain press room
employees, including operators of the printing presses, are
represented by the Graphic Communications International Union
(“Union”). In 1997 the Company and the Union entered into a
collective bargaining agreement (“CBA”), which included a
provision for payroll deduction of union dues upon written
request of the employee. (Commonly referred to as “dues
checkoff.”) Approximately 37 employees used this procedure
to have their union dues deducted from their paychecks. The
CBA expired on November 30, 2001. The Company
nevertheless continued dues checkoff until December 19, 2001,
at which time it sent each employee a letter stating that the
Company was exercising its legal right to discontinue payroll
deduction of union dues because the CBA had expired.
Thereafter, the Union’s secretary-treasurer apparently began
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collecting union dues from each individual employee.
During this time period, Company policy provided for the
direct deposit of an employee’s paycheck into a bank account;
direct deposit also allowed the employee to pay loans and
deposit to other accounts such as savings. With this direct
deposit provision in mind, after expiration of the contract and
while the parties were bargaining for a new contract, the Union
secretary-treasurer obtained a direct deposit authorization form,
reproduced it 37 times, filled in some of the information on the
forms and had each employee complete his or her form. He then
took the forms to Tribune’s administrative manager, Mary
Twenter, who had previously been on the negotiating committee
for the expired contract and had oversight responsibility for the
Company’s labor relations and human resources. Twenter told
the Union secretary-treasurer that it was “a good idea” to use
direct deposit for the payment of union dues and, accepted the
direct deposit forms for processing. After a trial run in April,
2002, the Company effectuated the direct deposit of union dues
on May 10, 2002, and provided to the Union an itemized list
containing the names of the depositing employees and the
amount of their dues payments. On May 24, 2002, however,
after only a one-time use of direct deposit for payment of union
dues, administrative manager Twenter sent a letter to each
employee stating that direct deposit of union dues was being
discontinued because dues checkoff had “been previously
discontinued by the Company and the direct deposit transactions
reinstated dues checkoff. Establishing direct deposit for dues
was a mistake.”
On May 30, 2002, the Union filed with the National Labor
Relations Board (“NLRB” or “Board”) an unfair labor practice
charge against the Company. The NLRB investigated the
charge and issued a complaint against the Company alleging,
inter alia, that the Company violated Sections 8(a)(5) and (1) of
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the National Labor Relations Act (the “Act”) by unilaterally
discontinuing the direct deposit of union dues. A hearing was
held before an NLRB administrative law judge (“ALJ”), who
determined that direct deposit of payroll deductions constitute
working conditions of the Union employees and are therefore
mandatory subjects of collective bargaining under the Act. He
also determined that the direct deposit of union dues was a
separate procedure unrelated to the CBA. The ALJ
consequently found that the Company violated Sections 8(a)(5)
and (1) of the Act* when it changed the working conditions of its
employees by ceasing to allow direct deposit of union dues
without affording the Union an opportunity to bargain about that
conduct.
The Company filed exceptions to the ALJ’s decision, and
the matter was assigned to a three-member panel of the NLRB.
In adopting the ALJ’s conclusion that the Company violated
Sections 8(a)(5) and (1) of the Act, the NLRB panel noted that,
after expiration of the contract and unilateral cessation of the
direct deposit of union dues by the Company, the Union
secretary-treasurer met with Company administrative manager
Twenter, and that during the meeting Twenter agreed with the
Union secretary-treasurer to allow use of the direct deposit
system for the payment of union dues. The panel also noted that
the Company had implemented direct deposit of union dues for
a full pay period. In light of these circumstances, the panel
determined that the deduction and direct deposit of union dues
became a new term and condition of employment. Since direct
deposit of payroll deductions is a mandatory subject of
bargaining, the panel stated, the Company was required to
*
The ALJ also found that the unilateral termination by the
Company of direct deposit of union dues violated Section 8(a)(3) of
the Act, but the Board stated that it did not consider this finding as it
would not materially affect the remedy.
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bargain with the Union before it could terminate the deductions.
Because it failed to bargain, the panel concluded that the
Company violated Sections 8(a)(5) and (1) of the Act.
The Company now files with this court a petition for
review, seeking reversal of the panel’s conclusion and dismissal
of the charges against it.
Discussion
“We enforce a Board order if the factual findings upon
which it rests are supported by ‘substantial evidence,’ see United
States Testing Co. v. NLRB, 160 F.3d 14, 19 (D.C. Cir. 1998),
and the Board’s interpretation of the Act is reasonable and
consistent with applicable precedent, see Local 702, Int’l Bhd.
of Elec. Workers, AFL-CIO v. NLRB, 215 F.3d 11, 15 (D.C. Cir.
2000).” Fashion Valley Mall, LLC. v. NLRB, 451 F.3d 241, 243
(D.C. Cir. 2006).
Tribune argues that it was error for the NLRB panel to find
that Tribune and the Union entered into a new agreement when
the Company agreed to deduct union dues by way of direct
deposit. Rather, Tribune contends, when it allowed its
employees to directly deposit their union dues after expiration
of the union contract, it was reinstituting the dues checkoff
provision in that expired union contract. The Company, noting
that the expired union contract provided for the withholding of
union dues from employee paychecks, contends that this was in
fact what direct deposit of union dues accomplished.
Consequently, argues Tribune, dues checkoff and direct deposit
of union dues are one and the same and the Company is
privileged to discontinue either in the context of an expired
union contract. Putting it another way, the Company asserts
that, because it had the right to discontinue payroll deduction of
union dues upon expiration of the union contract, when it
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stopped direct deposit of union dues it “[o]nce again . . .
exercised its right, in the context of an expired Collective
Bargaining Agreement, to cease deducting money from the
wages of employees in payment of membership dues to the
union.” Even if an oral agreement was reached, argues Tribune,
if an employer can cease payroll deduction of union dues upon
expiration of a union contract which contained an express
provision for union dues deduction, “then surely the employer
has the same right to cease payroll deduction of union dues
pursuant [to] an informal oral agreement reached during a
contract hiatus.”
The NLRB responds by first noting that pursuant to §§
8(a)(5) and (d) of the Act, it is an unfair labor practice for an
employer “to refuse to bargain collectively with the
representatives of his employees” with respect to “wages, hours,
and other terms and conditions of employment.” The NLRB
asserts that this provision bars an employer from unilaterally
discontinuing terms and conditions of employment that concern
a mandatory subject of bargaining. Here, argues the NLRB,
there is no serious dispute that direct deposit of union dues is a
mandatory subject of bargaining. The NLRB consequently
contends that when the Company agreed to directly deposit
union dues, this was a new agreement concerning terms and
conditions of employment that could not be unilaterally
terminated by the Company. The NLRB argues that, therefore,
the panel reasonably found that Tribune had violated §§ 8(a)(5)
and (d) by unilaterally terminating the new agreement made
with the Union. Although Tribune’s arguments focus on the
dues checkoff clause of the expired union contract, the NLRB
contends, that contract is not relevant here because this case
turns on whether Tribune reached a new agreement to use direct
deposit to remit union dues.
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Pursuant to the NLRA, employees have the right “to bargain
collectively through representatives of their own choosing.” 29
U.S.C. § 157. Furthermore, it is an unfair labor practice for an
employer “to interfere with, restrain, or coerce employees in the
exercise of the rights guaranteed in [§ 157],” and “to refuse to
bargain collectively with the representatives of his employees.”
29 U.S.C. §§ 158(a)(1) and (5). The obligation to bargain
collectively is defined as the meeting of the employer and
representative of the employees to “confer in good faith with
respect to wages, hours, and other terms and conditions of
employment.” 29 U.S.C. § 158(d). Pursuant to Board and court
decisions, dues checkoff is a matter related to “wages, hours,
and other terms and conditions of employment” within the
meaning of the Act and is therefore a mandatory subject for
collective bargaining. See Quality House of Graphics, Inc., 336
N.L.R.B. 497, 511 & n.42 (2001) (citing various cases); see also
Sw. Steel & Supply v. NLRB, 806 F.2d 1111, 1114 (D.C. Cir.
1986).
Under Board precedent, the expiration of a collective
bargaining agreement that created payroll deduction of union
dues results in the expiration of the employer’s obligation to
continue that deduction. See Bethlehem Steel Co., 136 N.L.R.B.
1500, 1502 (1962). But after expiration of the agreement a
company may, if it wishes, continue payroll deduction of union
dues until such time it elects to cease making that deduction.
See Lowell Corrugated Container Corp., 177 N.L.R.B. 169, 173
(1969), enf’d on other grounds, 431 F.2d 1196 (1st Cir. 1970);
cf. Redway Carriers, 274 N.L.R.B. 1359, 1377 (1985) (noting
employer’s continuation of dues checkoff notwithstanding
expiration of contract between parties). The Company therefore
claims, and the Union does not dispute, that after expiration of
the contract the Company was at liberty to continue payroll
deduction of union dues even though it could lawfully terminate
the deduction.
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The Company’s primary argument is that the direct deposit
of union dues was merely the “reinstitution” of dues checkoff
under the CBA; the Company is claiming, in other words, that
when the direct deposit of union dues was implemented it was
as if the Company had never discontinued dues checkoff. That
is, the Company effectively was still operating under the
conditions of an expired CBA, i.e., that the Company was
entitled to cease dues checkoff at its discretion. We disagree.
When the Company discontinued dues checkoff, it unilaterally
terminated the practice. Because it is undisputed that dues
checkoff is a term or condition of employment, it could not be
“reinstituted” under the expired CBA. See NLRB v. Katz, 369
U.S. 736, 743 (1962) (holding “that an employer’s unilateral
change in conditions of employment under negotiation is . . . a
violation of s 8(a)(5)”). The practice could only be instituted
again under a new agreement.
The Company argues that even if its argument that dues
checkoff and direct deposit of union dues are identical is
rejected, the use of direct deposit is nevertheless unauthorized
under Section 302 of the Labor Management Relations Act
(“LMRA”), 29 U.S.C. §§ 141-144, 171-183, 185-187 (1998).
Section 302 states that it is
unlawful for any employer . . . to pay, lend, or deliver,
or agree to pay, lend, or deliver, any money or other
thing of value . . . to any labor organization . . . which
represents . . . any of the employees of such employer
[except] with respect to money deducted from the
wages of employees in payment of membership dues in
a labor organization: Provided, That the employer has
received from each employee, on whose account such
deductions are made, a written assignment which shall
not be irrevocable for a period of more than one year,
or beyond the termination date of the applicable
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collective agreement, whichever occurs sooner.
29 U.S.C. §§ 186(a), (a)(2), (c). The Company claims that the
new agreement is not in accordance with Section 302 because
union dues can be deducted from an employee’s paycheck only
if there is in existence a signed collective bargaining agreement
that contains a provision authorizing payroll deduction of union
dues. The Company suggests that no such agreement was
created at the time direct deposit of union dues took place. The
NLRB, in turn, claims that Tribune errs when it argues that
under Section 302 the direct deposit agreement could not be
enforced because there was no signed, existing union contract.
Taking issue with Tribune’s argument that Section 302 requires
that any agreement for payroll deduction of union dues must be
in writing in a signed union contract, the NLRB asserts that
Tribune cites no cases to support that claim. Noting that
Section 302 provides for deduction of union dues if employees
have given written consent and that their consent is revocable
after a year or, if sooner, the expiration of the union contract, the
NLRB states that there is no dispute that the direct deposit
authorizations at issue here were revocable at will.
The Company suggests that even if it is determined that it
made a new agreement to use direct deposit to deduct union
dues, the agreement is void because Section 302 of the LMRA
requires that any such agreement be reduced to writing in a
signed CBA. But the Company, as the NLRB points out, cites
no authority for this claim. Section 302 does not require a
written collective bargaining agreement. In order for payroll
deduction of union dues to be lawful, Section 302 requires
merely that employees give written consent that is revocable
after a year. Here, as even the Company describes it, the direct
deposit of union dues was “a written assignment, and . . .
nothing but dues deduction in an altered form.” Presumably
most of the time payroll deductions of union dues will in fact be
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made pursuant to a CBA provision. But such procedure is not
the only one available; as the ALJ noted, employees might
choose the Company’s direct deposit procedure over any
collective bargaining agreed upon dues deduction procedure.
We have considered the Company’s remaining arguments
and find them to be without merit. In sum, we conclude that the
NLRB’s decision has substantial evidentiary support and is
consistent with the law.
Conclusion
For the reasons set forth above, we deny the Company’s
petition for review and grant the NLRB’s cross-application to
enforce its order.