UNITED STATES COURT OF APPEALS FOR THE D.C. CIRCUIT


DETROIT TYPOGR # 18

v.

NLRB


98-1599a

D.C. Cir. 2000


*	*	*


United States Court of Appeals


FOR THE DISTRICT OF COLUMBIA CIRCUIT


Argued May 4, 2000 Decided July 7, 2000 


No. 98-1599


Detroit Typographical Union No. 18, et al.,  Petitioners


v.


National Labor Relations Board,  Respondent


Detroit News, Inc., et al.,  Intervenors


Consolidated with  99-1111, 99-1112, 99-1163, 99-1180


On Petitions for Review and Cross Applications For  Enforcement of
Orders of the  National Labor Relations Board


James B. Coppess argued the cause for the Union petition- ers. With him
on the briefs were Samuel C. McKnight,  Duane F. Ice, John G. Adam,
and Richard Rosenblatt.


Jeremy P. Sherman argued the cause for the Employer  petitioners. With
him on the briefs was Joshua L. Ditelberg.


Sharon I. Block, Attorney, National Labor Relations  Board, argued the
cause for respondent. With her on the  brief were Leonard R. Page,
General Counsel, Linda Sher,  Associate General Counsel, Aileen A.
Armstrong, Deputy  Associate General Counsel, and Charles Donnelly,
Superviso- ry Attorney. John D. Burgoyne, Deputy Associate General 
Counsel, entered an appearance.


James B. Coppess argued the cause for the Union interve- nors. With him
on the brief were Samuel C. McKnight,  Duane F. Ice, John G. Adam, and
Barbara Camens.


Jeremy P. Sherman and Joshua L. Ditelberg filed the brief  for the
Employer intervenors.


Before: Silberman and Sentelle, Circuit Judges, and  Buckley, Senior
Circuit Judge.


Opinion for the Court filed by Circuit Judge Silberman.


Silberman, Circuit Judge: Two groups of petitioners chal- lenge
National Labor Relations Board orders arising out of a  strike against
the Detroit newspapers. The employers chal- lenge those portions of
the Board's orders determining that  they committed unfair labor
practices, see Detroit Newspaper  Agency, 326 N.L.R.B. No. 64 (1998)
(Detroit I), on reconsid- eration, 327 N.L.R.B. No. 146 (1999)
(Detroit III), and that  the strikers were unfair labor practice
strikers, see Detroit  Newspaper Agency, 326 N.L.R.B. No. 65 (1998)
(Detroit II),  while the unions object to the Board's determination
that one  employer's unilateral implementation of a change in work-
assignment rules was lawful. The employers' petition for  review is


I.


From July 1995 through February 1997, employees went  on strike against
Detroit's two major newspapers--petition-


ers The Detroit News, Inc. (the News) and The Detroit Free  Press, Inc.
(Free Press)--and a joint endeavor created by the  papers under a
partnership agreement signed in 1986, peti- tioner Detroit News Agency
(DNA). Each paper is responsi- ble for its news and editorial
operations, but many other  functions, such as circulation, marketing
and some labor  relations, are handled by DNA. The employees of these 
three companies are represented by 12 unions each repre- senting a
separate bargaining unit of the papers or DNA;  petitioners are six of
these unions which compose the Metro- politan Council of Newspaper
Unions (the Council). Two of  the unions in the Council are
particularly important to this  case: the Detroit Typographical Union
No. 18 (DTU), repre- senting composing room employees of DNA, and the
Newspa- per Guild of Detroit, representing editorial employees at the 


Each newspaper and DNA is responsible for its own labor  negotiations.
During bargaining in 1992, noneconomic issues  were negotiated between
DNA and each individual union, but  economic issues were handled by
DNA and the Council.  Detroit I, 326 N.L.R.B. No. 64 at 34. When the
1992  agreements were about to expire (on April 30, 1995) and the 
parties began to discuss the next round of collective bargain- ing,
DNA initially declined to accept the joint bargaining  format,
insisting instead on bargaining with each union sepa- rately.
Agreements were eventually concluded with the  skilled-trades unions,
but negotiations on a unit basis with  members of the Council ran past
the 1992 agreements' expi- ration date, resulting in those agreements
being extended  day-by-day. See id. at 2, 34.


To expedite matters DNA tentatively agreed to engage in  joint economic
bargaining if progress could be made on  noneconomic issues (the
"two-stage bargaining agreement").  DNA continued to discuss economic
issues with the individual  unions, however, and as negotiations
lagged DNA set June 30  as a deadline for their conclusion. (DNA
frequently referred 




__________

n 1 The Guild also represents DNA's janitorial employees and the  Free
Press's editorial employees.


to its June 30 deadline in subsequent communications with  the Council
and its member unions.) The Council then  requested that DNA formally
agree in writing to two-stage  bargaining; DNA declined to do so but
again expressed its  tentative agreement if individual negotiations
over non- economics could be finished by June 30. Negotiations be-
tween DNA and individual unions went past this deadline and  were
halted by the strike on July 13. See id. at 2.


The News initially provided the Guild with a list of propos- als for
its editorial employee unit including Proposal 7, "News  Department
employees who qualify as professionals within  the meaning of Federal
wage and hour laws may, at their  option, apply annually to be
salaried and exempt from over- time," Proposal 8, allowing the News to
assign employees to  radio and television projects, and Proposal 11,
which stated  "All future pay increases to bargaining unit employees
will be  on the basis of merit utilizing the Company's performance 
appraisal system." See id. at 60-61 (the "overtime exemp- tion,"
"radio/tv," and "merit pay" proposals, respectively).  The radio/tv
proposal came with some baggage. In Novem- ber 1994 the News
implemented a similar proposal following a  purported impasse with the
Guild; an unfair labor practice  charge was filed with the NLRB, which
ruled in the union's  favor on July 14, 1995. In the meantime, the
News had  introduced proposal 8.


At early bargaining sessions Guild negotiators expressed  their opinion
that the overtime exemption proposal was a  subject upon which it was
illegal to bargain and illegal to  agree upon according to the Guild's
legal advice, and until the  News's unilateral implementation of this
proposal on July 5  no counterproposal was ever made. Id. at 61. The
Guild also  stated with respect to merit pay that the performance ap-
praisal system was a waste of time that it wanted to get rid  of, and
that it was concerned that merit pay decisions would  be corrupted by
race or gender discrimination. The News,  on the other hand, was
anxious to introduce merit pay and  viewed it as a central issue. See


On April 25, the News provided the Guild with a more  detailed merit
pay proposal: unit members making the con- tract's minimum salary
would receive at least a one percent  salary increase, but a merit
component would increase their  pay by an average of four percent from
the minimum. Salary  increases for those making more than the minimum
would be  based solely on merit. At this meeting Guild negotiators 
asked numerous questions, but News negotiators admitted  that specific
details had yet to be considered. See id. at 62.


Two days later, the News faxed the Guild a new, more  detailed
proposal:


All employees of The Detroit News editorial department  will receive a
pay increase effective on the date of  ratification of the new
collective bargaining agreement.  No pay increase will be less than
one (1) percent. The  average of all pay increases will be four (4)
percent.  Increases above one (1) percent will be based on the 
employees [sic] most recent evaluation unless the em- ployee or
his/her manager requests that another evalua- tion be done because the
employee's performance has  changed since the last evaluation.
Irrespective of any  delay caused by such re-evaluation, all raises
will be  retroactive to the date of ratification.


Raises for the second and third years of the contract will  be handled
under the above procedure and will be effec- tive May 1, 1996 and May
1, 1997, respectively. The only  change is that the minimum each year
will be one (1)  percent and the average will be three (3) percent.


Each year all contract minimums will increase by one (1)  percent.


Employees of the union may grieve, but not arbitrate,  the employee's
evaluation or the timing or amount of the  employee's pay increase.


News negotiators offered to meet to explain the proposal.  The Guild
negotiators claimed to understand it, although the 


ALJ found that they were uncertain whether the merit  increases were to
be based on the contractual minimum  salaries or employees' actual
salaries (typically higher). See  Detroit I, 326 N.L.R.B. No. 64 at
63. At a meeting a week  later, without inquiring into whether the new
proposal was  based on actual salaries or contract minimums, Guild
negoti- ators reported that unit members were not at all interested in
 the merit proposal. The News rejected a Guild proposal of  an
across-the-board 15% pay increase. On several occasions  after this
meeting, the News characterized the Guild's treat- ment of the merit
pay proposal that day as a rejection of the  proposal. See id. at
62-63. At this meeting the Guild also  reiterated its view that the
overtime exemption proposal was  illegal. See id. at 63.


In a flurry of letters at the end of May and beginning of  June, the
News informed the Guild that it thought negotia- tions over merit pay
were deadlocked, and the Guild respond- ed that it disagreed; when the
News asked if the Guild were  prepared to offer counterproposals, the
Guild stated that it  would be prepared to respond to all the issues
on the table,  and a meeting was scheduled for June 14. At this time
the  News also sought to set a firm deadline of June 30 for the 
completion of negotiations. See id.


At the June 14 session the News clarified for the Guild that  merit
payments would be based on actual salaries. The  Guild's negotiator
again rejected the News's suggestion that  negotiations over merit pay
were deadlocked, claiming to  have come to the meeting to make
counterproposals. Howev- er, although he asked questions about the
News's proposal,  no counterproposals were made, and he stated that
the unit  members were adamantly opposed to merit pay. See id. at 
63-64. Negotiations over the overtime exemption proposal  also went no
further. The Guild again expressed its view that  the proposal was
illegal, though its negotiators asked ques- tions about how exactly
the proposal would work, and re- quested a list of employees eligible
under the proposal. They  also suggested that instead of the News
determining whether  individual employees qualified under the
proposal, such deter- minations be made by the Department of Labor.


replied that it did not have a list of employees and was unable  to
compile one because eligibility could only be determined at  the time
of each employee's application. In response to post- implementation
information requests, however, it supplied the  Guild with a list of
categories of employees who might be  eligible. The union's proposal
that the Labor Department  become involved in the application process
was rejected as  merely retaliatory. See id. at 63.


Following the June 14 meeting, the Guild on June 16 asked  for
negotiations to be delayed until some time in early July,  after its
national convention in Boston which would run from  June 17 through
June 24, with the Guild negotiators re- turning on June 26. The News's
negotiator responded on  June 20 by writing that he saw no reason to
delay negotia- tions, and also wrote:


I understood prior to the last meeting that you intended  to bargain on
pay and overtime. However, you made no  proposals on these key
subjects and I have never re- ceived any indication that you intend to
bargain over  them. Unless you can assure me that you intend to 
modify your position on those issues, we will have no  choice but to
implement our last offer to you.


Id. at 64. No further meetings took place before the News's  unilateral
implementation of its proposals on July 5.


On June 28 the News released to its employees a memo  providing details
about the merit pay proposal, specifically  that those employees who
received an evaluation of "out- standing" or "commendable" would
qualify, and some 90% of  employees could expect to receive merit pay.
The memo also  accused the Guild of being unwilling to meet. On June
29 the  Guild repeated its earlier request for a meeting, and stated a
 willingness to discuss overtime exemption. In response, at  eight
o'clock in the evening of June 30, a Friday, the News  faxed the Guild
an offer to negotiate the following Monday,  July 3, at ten in the
morning. The Guild's negotiators did not  see this offer until late
Monday afternoon, and when the  News's negotiators met the Guild's
earlier that day on an 


unrelated matter, the proposed meeting was not mentioned.  See id. at
64-65.


Two days later, July 5, the News unilaterally implemented  its
proposals. In announcing implementation to employees  the News stated
that Guild negotiators had failed to appear at  meetings and had
refused to bargain. See id. at 65. At a  post-implementation
bargaining session on July 10 the Guild  continued to ask questions
about the proposals, making an- other request for a list of
overtime-exemption eligible employ- ees (a request repeated on August
4). It also asked that the  overtime-exemption provision contain a
clause specifying that  employees working on an overtime basis would
not be dis- criminated against on assignments, proposed a flat
increase in  salaries for all employees, and again raised the
possibility of  having the Labor Department issue "advisory opinions"
on  the eligibility of employees for salaried status. Over this and 
the following day, the News answered some but not all of the  Guild's
questions about its proposals, and rejected all of the  Guild's


The Council and its constituent unions began to plan a  strike prior to
the News's declaration of impasse. For in- stance, DNA's decision not
to engage in joint bargaining,  despite its tentative agreement to do
so, was mentioned  throughout June as a causus belli. Individual
unions also  held meetings in which they obtained strike authorization
 from their membership. See id. at 75. On July 6, following  the
News's declaration of impasse, the Council met and  agreed to set a
strike deadline of July 13. On July 12 the  Council met once more and
agreed to the following resolution:


Whereas the DNA/Detroit Newspapers (including the  News and Free Press)
has engaged in anti-union con- duct, negotiated in bad faith and
reneged on its promise  to bargain jointly on economics, the
undersigned Unions  hereby resolve their members employed at the DNA/ 
Detroit Newspapers each will strike and honor each  other's strike in
protest of the DNA/Detroit Newspapers  [sic] (including the News and
Free Press) anti-union  conduct and unfair labor practices.


Id. at 76. Testimony credited by the ALJ established that  the unfair
labor practices referred to in the resolution were  the modification
of DTU's jurisdiction (discussed next), imple- mentation of the merit
pay proposal, and the decision by  DNA not to engage in joint
bargaining. See id.


The next day the unions began a strike which would last  until February
1997 when the unions made an unconditional  offer to return to work.
The employers, however, refused to  discharge replacement workers to
make room for the re- turning strikers, treating the strike as an
economic strike.  Instead, returning strikers were placed onto a
preferential  hiring list. See Detroit II, 326 N.L.R.B. No. 65 at


* * * *


The unions' petition involves negotiations between DTU  and DNA.
Petitioner DTU's relationship with the newspa- pers and DNA is
generally governed by collective bargaining  agreements. In 1975,
however, negotiations between the  individual newspapers, on the one
hand, and DTU on the  other led to the parties entering into Memoranda
of Agree- ment in addition to collective bargaining agreements; when 
DNA came into existence, it agreed to adopt the obligations  those
memoranda placed upon the newspapers. One Memo- randum of Agreement
guaranteed essentially lifetime employ- ment to certain workers, and
in exchange the unit was to be  governed by a Section 10(a), entitled
"work arrangements."  In relevant part, Section 10(a) states "This
section will de- scribe the work arrangements of the [DTU] employee
involv- ing the use of scanners and VDT terminals when such  equipment
is performing composing room work within the  jurisdiction of the
Union." See Detroit I, 326 N.L.R.B. No.  64 at 47 (emphasis added).
The section then goes on to  describe under what circumstances only
unit employees may  use such equipment, and when non-unit employees


The collective bargaining agreement between DNA and  DTU for the
1992-1995 term, meanwhile, had sections titled  "Jurisdiction,"
"Equipment Jurisdiction," and "Computer Jur-


isdiction," explaining, inter alia, that "all composing room  work" was
within the Union's jurisdiction. During negotia- tions over a
successor bargaining agreement DNA proposed  modifying these
jurisdictional provisions by including in the  new agreement language
specifying that this jurisdiction  would be non-exclusive: "Employees
of other departments of  [DNA] as well as employees of the Detroit
News and Detroit  Free Press may perform such work as is necessary."
DTU,  claiming that the ongoing Memorandum of Agreement--not  the
expiring collective bargaining agreement--defined its jur- isdiction,
considered DNA's proposal an attempt to modify an  existing agreement,
and therefore only a permissive subject  of bargaining. It refused to
bargain, and on May 11 DNA  declared impasse and implemented the


* * * *


The unions filed unfair labor practice charges with the  NLRB alleging
that DNA and the newspapers had violated  Sections 8(a)(5) and (1) of
the National Labor Relations Act  by breaching the two-stage
bargaining agreement; by imple- menting the merit wage proposal and
the radio/tv proposal;  by abrogating DTU's jurisdiction; and by
failing to provide a  list of employees who would be eligible for
overtime exemp- tion.


The ALJ agreed with the unions on all but the DTU issue.  The Board
generally affirmed the ALJ's opinion; however, on  the issue of the
joint bargaining agreement it found that  DNA had never clearly and
unequivocally agreed to joint,  two-stage bargaining, and therefore
concluded it was not an  unfair labor practice for DNA to insist on
bargaining with  individual unions. See generally Detroit I, 326
N.L.R.B. No.  64. The Board went on to observe, sua sponte, that while
 negotiating rules are only a permissive subject of bargaining  and
the Unions had struck in part to force agreement on such  rules, "We
do not suggest that the Union's insistence on  adherence to the
two-stage bargaining procedure was unlaw- ful here." See id. at 5. The
Board adopted the ALJ's 


reasoning with respect to merit pay, concluding that the  News had
bargained in bad faith, preventing a good-faith  impasse on this
proposal. It then reasoned that even if the  News had bargained in
good faith, its merit pay proposal was  standardless, and therefore,
under the Board's rule an- nounced in McClatchy Newspapers Inc., 321
N.L.R.B. 1386  (1996), enforced, 131 F.3d 1026 (D.C. Cir. 1997)
(McClatchy  II), it could not be implemented even at impasse because
it  would be destructive of employees' collective bargaining 


An ALJ, meanwhile, had found that the employers unlaw- fully refused to
rehire returning unfair labor practice strik- ers, relying on the
earlier ALJ opinion as evidence of unfair  labor practices. On the
same day the underlying unfair labor  practice findings were affirmed
by the Board in Detroit I, it  also affirmed the second ALJ opinion
and ordered the rehir- ing of returning strikers. See generally
Detroit II, 326  N.L.R.B. No. 65.


II.


The employers challenge the unfair labor practice findings  as well as
the determination that the alleged unfair labor  practices caused the
strike. The thrust of their latter argu- ment is that the unions
struck not over the purported unfair  labor practices, but to enforce
the joint bargaining agree- ment. Indeed, they claim, the strike was
unprotected be- cause the unions unlawfully sought to force adherence
to the  joint bargaining agreement, a permissive subject of bargain-
ing. Moreover, according to the employers, the Board's  determination
that the employers committed unfair labor  practices is not supported
by substantial evidence. The  Board's examples of the News's bad faith
were unsubstantiat- ed or trivial, and the Board ignored the unions'
refusal to  bargain over key issues. They distinguish this case from 
McClatchy by emphasizing the details in the News's merit  pay proposal
not provided in the McClatchy proposal. DTU's  petition claims that
the News committed an unfair labor 


practice by making a unilateral midterm change to the ongo- ing
Memorandum of Agreement.


A. Lawfulness of the Strike


The employers' primary argument, which was the focus of  the Board's
reconsideration order, is that the strike was  unprotected because it
(unlawfully) sought to force DNA's  adherence to the two-stage
bargaining agreement, which was  only a permissive subject of
bargaining. As the Board ex- plained in Detroit III,


There are certain situations in which the Board has  found that a
strike or other economic action in support of  a proposal on a
nonmandatory bargaining subject is  unlawful.... These situations have
involved ... a strike  in furtherance of the unlawful condition that
further  bargaining depends on acquiescence to a demand on a 
nonmandatory subject.


327 N.L.R.B. No. 146 at 95; see also United Food & Com- mercial Workers
Int'l Union v. NLRB, 880 F.2d 1422, 1428  (D.C. Cir.
1989)("[C]ategorizing a matter a mandatory subject  will ... authorize
the union to use the economic weapons at  its disposal to back up its
demands at the negotiating table.").  Two-stage bargaining, contend
the employers, was the "para- mount" reason for the strike. See
Detroit III, 327 N.L.R.B.  No. 164 at 95 ("[A]nalysis of the legality
of conduct vis-a-vis a  nonmandatory subject requires examination of
the impact of  such conduct on negotiations for mandatory


We think the Board permissibly ruled, however, that the  employers
waived this argument by failing to raise it in a  timely fashion
before the ALJ. Though the employers' argu- ment was presented in
their exceptions from the ALJ's  decision and motion for
reconsideration, the Board in Detroit  III determined it had been
waived, as "[a] contention raised  for the first time in exceptions to
the Board is ordinarily  untimely raised and, thus, deemed waived."
327 N.L.R.B.  No. 146 at 1 (quoting Yorkaire, Inc., 297 N.L.R.B. 401


enforced 922 F.2d 832 (3d Cir. 1990)). The employers do not  generally
challenge this procedural policy.


The employers do claim that the Board is, in effect, es- topped from
applying its policy because it decided sua sponte  the lawfulness
issue in Detroit I, by saying "We do not  suggest that the Union's
insistence on adherence to the two- stage bargaining procedure was
unlawful here." 326  N.L.R.B. No. 64 at 5. That is an apparent
mischaracteriza- tion of the Board's statement. The Board did not
actually  decide the lawfulness issue in Detroit I. Even if the Board 
had analyzed the issue more extensively, that still would not  be
sufficient to prevent the Board from applying its waiver  policy. Cf.
Local 900 Int'l Union of Elec., Radio and Mach.  Workers v. NLRB, 727
F.2d 1184, 1191 (D.C.Cir. 1984) (dis- cussion of an issue by the NLRB
did not necessarily prove  compliance with s 10(e) of the NLRA
requiring that issues be  raised before the Board in order to obtain
judicial review of  such). Nor does the Board's resolution of the
merits of the  employers' argument on reconsideration in Detroit III
under- mine its position; the merits discussion was merely an alter-
native holding to its determination that the argument had  been
waived. Cf. Burkhart v. WMATA, 112 F.3d 1207, 1215  (D.C.Cir. 1997)
(district court's discussion of an alternative  ground for its
decision did not undercut its ruling that  appellant's claim was


B. Merit Pay


We begin our discussion of this subject with the Board's  determination
that the News's implementation of its merit  pay proposal runs afoul
of McClatchy because we think that  legal issue pervades the Board's
analysis of the parties' merit  pay negotiations. In McClatchy the
Board confronted the  implementation of an employer's merit pay
proposal which  would have set salaries strictly on the basis of
"merit" as  determined by the employer; no objective procedures or 
standards at all were proposed--there was nothing but a 




__________

n 2 The employer's counsel at oral argument came perilously close  to
insisting that it would have to prevail on this issue to win the 
case.


"discretionary cloud." See McClatchy II, 131 F.3d at 1032.  Under such
circumstances, we noted on review, the employer  had essentially
"de-collectivized" bargaining and prevented  the union from knowing
what it would be bargaining against  in the future; we therefore held
this justified a Board-created  exemption to the general rule that
employers may implement  their last, best offer following impasse. See
id. at 1032-33.


Although we had previously in NLRB v. McClatchy News- papers, Inc, 964
F.2d 1153 (D.C. Cir. 1992) (McClatchy I),  remanded for a fuller
explanation of the contours of the  Board's McClatchy doctrine, in
McClatchy II we recognized  the Board could legitimately proceed
case-by-case to develop  the boundaries of the doctrine. See 131 F.2d
at 1035. That  did not mean, however, that the Board could simply
brandish  McClatchy, without any real explanation, to prevent an em-
ployer from ever implementing a merit pay proposal after  impasse.
After all, as we recognized in McClatchy I, the  Supreme Court has
squarely held that merit pay is a manda- tory subject of bargaining,
see McClatchy I, 964 F.2d at 1162,  citing NLRB v. Katz, 369 U.S. 736,
745 (1962), and if the  Board is to treat it differently from other
such subjects with  respect to post-impasse implementation it must
carefully jus- tify its course.


Instead, the Board treated this case as if it were on all  fours with
McClatchy. See Detroit I, 326 N.L.R.B. No. 64 at  7. We think that was
quite unreasonable (arbitrary and  capricious). McClatchy presented an
unusual situation where  an employer provided no details at all of its
merit pay plan.  Here, on the other hand, the News's proposal stated
that  raises would average four percent in the first year of the 
contract, and three percent in the second and third years.  Merit pay
determinations would be based on the annual  employee evaluation
process (the evaluation forms for which  consumed over 100 pages in
the joint appendix) and would be  effective on fixed dates. Employees
would also be permitted  to contest the size of their raises using
grievance procedures.  To be sure, the employer's proposal carried a
good deal of  discretion. It did not foreclose the possibility that an
employ- ee would get a merit pay increase without achieving the top 


performance rating.3 But any merit pay system inherently  carries much
employer discretion which, of course, is why  unions resist them. In
sum, we reject the Board's blithe  extension of McClatchy to this case
as unreasoned and unrea- sonable.4


Purportedly without regard to McClatchy, the Board found  that the News
had bargained in bad faith regarding its merit  pay proposal (and its
overtime proposal discussed infra), and  therefore it never reached a
valid impasse justifying imposi- tion of its overall proposal. This is
a difficult question on  review only because the Board's finding of
bad faith negotia- tion is, like any question of fact (really a mixed
question),  entitled to a good deal of deference. See NLRB v. Cau- 
thorne, 691 F.2d 1023, 1026 n.5 (D.C. Cir. 1982). We con- clude,
nevertheless, that the Board's finding cannot stand  because it is
infected with the legal error we have just  discussed, and it is
otherwise not supported by substantial  evidence on the record as a


The Guild was initially presented with the News's final  merit pay
proposal on April 27. The extant bargaining  agreements expired on
April 30, yet negotiations continued  for an additional two months.
The Guild made no counter- proposals at the negotiation session on
June 14, nor did it  send anything to the News in the three week
interim between  this meeting and the July 5 implementation,5 although




__________

n 3 The intervenor unions stressed at oral argument post-impasse 
statements by the News that various unspecified factors, such as  the
need to retain particular employees, could enter into merit pay 
determinations. See, e.g., Detroit I, 326 NLRB No. 64 at 68. This 
possibility was not foreclosed by the News's proposal--it was part  of
its retained discretion.


4 As in McClatchy the Board throws in the phrase drawn from  Great Dane
that implementing the merit pay proposal after impasse  was
"inherently destructive" of collective bargaining. See NLRB v.  Great
Dane Trailers, Inc., 388 U.S. 26, 34 (1967). If that is meant  to
provide an alternative rationale for the holding it will not do.


5 It should be noted that the Guild's convention occupied only one 
week of this period.


been told that June 30 was the News's bargaining deadline.  With the
exception of a proposal for an across-the-board pay  increase made on
May 3 the Guild does not appear to have  done anything at these
negotiation sessions but ask questions.  The truth of the matter,
which the record clearly reveals, is  that the Guild's unit was
unalterably opposed to the merit pay  proposal from the outset and
continuing up to the employer's  implementation--not to the details
but to the very concept.  There was no evidence that the Guild was
prepared to engage  in real negotiations on the employer's


The Board found that the News had "repeatedly obfuscated  and withheld
details about its merit pay proposal, which  details were relevant and
necessary to the Guild's under- standing of the proposal and to the
formulation of a bargain- ing response." Detroit I, 326 N.L.R.B. No.
64 at 7. And the  ALJ whose recommended findings the Board accepted
deter- mined that the Guild could not gain an understanding of the 
merit pay proposal's "cost, timing, criteria and procedures,"  and
therefore could not "bargain intelligently" about the  proposal. See
id. at 71-72. But the essence of discretion-- the News at one point
characterized its merit pay determina- tions as "not rote," see id. at
66--implies that the employer  will not be pinned down ex ante as to
precisely how its  discretion will be exercised. Management's decision
to pro- pose a discretionary merit pay system--and to insist on 
retaining legitimate bounds of discretion--cannot (except for  the
limited McClatchy exception) be treated differently than  other
mandatory subjects of bargaining; it cannot be "ve- toed" by the
Board. See NLRB v. Insurance Agents' Int'l  Union, 361 U.S. 477, 487
(1960). The union's questions as to  these criteria and procedures
were obviously designed to  narrow the zone of discretion the employer
wished to pre- serve. That answers satisfactory to the union or the
Board  were not forthcoming is simply another way to say that the 
proposal carried insufficient details to pass the McClatchy  test, and
we have already rejected the Board's reasoning in  that respect.


The Board fixed upon the News's failure to make clear  early on that
salary increases, under the merit plan, would be  based on actual, not
nominal, contract minimum salaries. 


This seems to us to be a wholly insignificant bit of evidence.  Once
the News had sent its final merit pay proposal to the  Guild its
negotiator offered to meet with his Guild counter- part to explain it.
The Guild negotiator responded, however,  that he already understood
it. Similarly, when the negoti- ators met a week later no
clarification was sought on this  point. The problem, according to the
Guild, was that the  News did not "understand" the employees' dislike
of the very  concept. The Guild was informed that actual salaries
would  be used at the June 14 meeting, a full three weeks before 
impasse was declared. We cannot see how this sequence of  events hints
at the News's bad faith, nor how the Guild's not  knowing this
particular detail until three weeks before im- passe hindered its


The Board also relied on the News's failure to provide the  Guild with
other crucial information and provision of such  information directly
to unit employees. It found the News  "refused to provide the Guild
with information as to how  much money it proposed putting in the
merit pay pool." See  Detroit I, 326 N.L.R.B. No. 64 at 7. This is
simply wrong;  the News responded to the Guild's negotiator's June 14 
inquiry by telling him to apply the 4% average raise to  payroll
information in the Guild's possession. The Board also  thought a
series of memoranda given unit employees immedi- ately before and
after implementation, which stated that  merit increases would be
given to those receiving an evalua- tion of "outstanding" or
"commendable," and that 80 to 90%  of employees would or had received
merit pay, was evidence  of bad faith, because such information had
not previously  been furnished to the Guild. But the News's proposal
stated  that merit pay would be based on the evaluations, and the 
evaluation forms state "A[n employee] whose overall perfor- mance
rating is outstanding or commendable is eligible for a  merit
increase." The Guild had copies of these forms, and  knowledge of how




__________

n 6 The Board regarded the News's statements to employees claim- ing
that the Guild had refused to negotiate as evidence of bad faith. 


The Board also regarded the News's proposed scheduling  of bargaining
sessions on dates in June when it purportedly  knew the Guild to be
unavailable because of a convention as  showing bad faith. We think
that inference is unsupportable.  The Guild on June 16 requested a
delay in negotiations  because of unstated "prior commitments." The
News's nego- tiator responded "I cannot imagine what 'prior
commitments'  you have that are more important than these
negotiations,"  and requested a meeting "for the next few days," which
would  be during the convention. See Detroit I, 326 N.L.R.B. No. 64 
at 64. The ALJ found that the News must have known that  the prior
commitment was the convention because postings on  a bulletin board at
the News had announced it, and because a  News memo sent the following
week to employees criticized  Guild negotiators for attending the
convention instead of  negotiating. See id. What the News knew a week
later is  not powerful evidence of what it knew a week earlier--it may
 have discovered, in response to its request for a meeting, that  the
Guild's negotiators were all out of town.7 Even if the  News's
negotiator had known that which the union negoti- ators were
apparently unwilling to say--the latter wished to  attend the
convention--the worst interpretation that could be  placed on the
employer's gambit is that it was seeking to  pressure the union
negotiators to either admit the reasons for  wanting a delay or to


As we noted after the convention the News, in response to  a subsequent
Guild request for a meeting, faxed a proposal on  a Friday night for a
meeting the following Monday morning-- one day before a national
holiday and two days before the 




__________

n


See Detroit I, 326 N.L.R.B. No. 64 at 7. Neither its order nor the 
ALJ's recommendation explain why and the employer complains  that the
Board was improperly restricting its free speech. Before  us the Board
apparently abandoned that line of analysis and instead  claimed that
the employers were communicating to the employees  that which it
refused to tell the union. We simply do not under- stand this
attempted transformation and therefore decline to pay  any attention


7 Nor was there any evidence that the News's negotiator had  actually
seen the bulletin board posting.


declaration of impasse and unilateral implementation. The  ALJ's
opinion emphasizes this event as infecting the entire  negotiating
process: the News, according to the ALJ, essen- tially prevented the
Guild from meeting to engage in negotia- tions which might have broken
the deadlock that seemingly  developed at the June 14 meeting, after
which the Guild's  negotiators signaled their desire to engage in
further negotia- tions. Again, we think this inference is
unsupportable. It is  obvious that lawyers on both sides were
maneuvering and the  News was delivering the Guild a last clear
chance. But  convention or not, holiday or not, if the Guild really
had  wished to bargain on merit pay they had plenty of time to 
indicate that to the News. Asking questions was not enough.  Cf.
Serramonte Oldsmobile, Inc. v. NLRB, 86 F.3d 227, 233  (D.C. Cir.
1996) (concluding impasse was valid where "not a  single one of the
Union's statements ... actually committed  the Union to a new position


The Board nevertheless asserts that the parties had not  reached a
good-faith impasse for another reason. The ALJ  found that the
unremedied unfair labor practice associated  with the radio/tv
proposal prevented the News from declaring  impasse because it
"necessarily tended to adversely affect the  bargaining atmosphere and
relationship between the parties,"  see Detroit I, 326 N.L.R.B. No. 64
at 72 (emphasis added),  and the Board adopted this conclusion. See
id. at 7 n. 17.  Before us the Board apparently argues that only
negotiations  over the radio/tv proposal alone itself were affected,
but that  deadlock over this proposal was sufficient to prevent a


While it is sometimes true that unremedied unfair labor  practices have
this effect, see, e.g., Alwin Mfg. Co. v. NLRB,  192 F.3d 133 (D.C.
Cir. 1999), that is not necessarily the case.  In Cauthorne, "we
reject[ed] any presumption that an em- ployer's unfair labor practice
automatically precludes the  possibility of meaningful negotiations
and prevents the par- ties from reaching a good faith impasse." 691
F.2d at 1025;  see also Alwin Mfg., 192 F.3d at 137-38. The ALJ and
the  Board, by failing to rely on any evidence demonstrating how 


the unfair labor practice affected negotiations in this case,  seem to
have applied such a presumption. That is especially  problematic here
because the ALJ's account of negotiations  suggests the radio/tv
proposal was relatively unimportant  compared to the merit pay and
overtime exemption proposals;  implementation of this proposal was not
even mentioned by  the ALJ in his discussion of strike causation. See
Detroit I,  326 N.L.R.B. No. 64 at 77; see also Teamsters Local Union 
No. 639 v. NLRB, 924 F.2d 1078, 1083 (D.C. Cir. 1991) (to  determine
whether there is a valid impasse the Board "con- siders a number of
factors, including ... the importance of  the issue or issues as to
which there is disagreement"). We  therefore conclude there is not
substantial evidence to sup- port the Board's determination that the
unremedied unfair  labor practice prevented the News from declaring


C. Overtime Exemption


The Board's decision that the News committed an unfair  labor practice
by failing to respond to the Guild's overtime  exemption information
request rested on pure conjecture, and  is therefore not supported by
any--let alone substantial-- evidence. Throughout negotiations the
Guild repeatedly re- quested a list of employees eligible to take
salaried status  under the overtime exemption proposal. The News
repeated- ly responded that it could not compile such a list because
it  would not be able to determine eligibility until an employee 
actually applied. Instead, in response to post-implementation 
information requests it provided the Guild with a list of  categories
of employees who might be eligible.


Although it was never shown that a list of eligible employ- ees
existed--the General Counsel failed to subpoena the  purported list,
see Detroit I, 326 N.L.R.B. No. 64 at 28-29  (Members Brame and
Hurtgen, dissenting in part)--the ALJ  opined that "It is difficult to
believe that the News entered  negotiations without having formulated
its own expectation of  the scope and impact of its proposal...." See
id. at 73. The  Board agreed, noting that it shared


the judge's doubts that [the News] would have made the  proposal, and
bargained so ardently for it, without some  informed estimation of its
effects. Even if the News did  not possess a list of those employees
whom it believed  would qualify for exemption, the Guild was entitled
to  whatever information Respondent News did rely on.


Id. at 8.


Such speculation is not evidence. See, e.g., Arizona Pub.  Serv. Co. v.
United States, 742 F.2d 644, 649 n.2 (D.C. Cir.  1984) ("[M]ere
conjecture and abstract theorizing offered in a  vacuum are inadequate
to satisfy us that the agency has  engaged in reasoned
decisionmaking.").8


D. The Unions' Petition


We agree with the NLRB that DNA did not commit an  unfair labor
practice by unilaterally implementing a change in  its collective
bargaining agreement with petitioner DTU.  The Memorandum of Agreement
only describes working ar- rangements when equipment is "performing
composing room  work within the jurisdiction of the Union." That
jurisdiction  was defined not in the Memorandum of Agreement, but in
the  collective bargaining agreement. Since the collective bar-
gaining agreement had expired DNA could propose a modifi- cation to
DTU's jurisdiction, and since DTU refused to  bargain over the
proposal DNA could declare impasse and  unilaterally implement it.
This is exactly what happened, and  it does not constitute an unfair


III.


The Board's discussion of strike causation was sparse, but  the ALJ's
opinion suggests the purported unfair labor prac-




__________

n 8 The News argues that even had it compiled a list of eligible 
employees, it was under no obligation to divulge it because the  Guild
persisted in labeling the overtime exemption proposal as  illegal and
refused to bargain over it. Because we do not think the  Board had
substantial evidence to support its finding that the News  had a list
of eligible employees, we need not reach this alternate  argument.


tices which motivated the strike were DNA's decision not to  engage in
joint bargaining, its unilateral change of DTU's  jurisdiction, and
the News's unilateral implementation of mer- it pay and its failure to
comply with information requests.  See Detroit I, 326 N.L.R.B. No. 64
at 77; see also Detroit III,  327 N.L.R.B. No. 146 at 1. Having
determined that the  Board's conclusion that the News committed unfair
labor  practices is legally erroneous and unsupported by substantial 
evidence, we, of course, reverse its subsequent order holding  the
strikers to be unfair labor practice strikers. See Alwin,  192 F.3d at
141 (A strike is an unfair labor practice strike "if  the employer's
violations of the labor laws are a contributing  cause of the
strike.") (internal quotation marks and citation  omitted).


* * * *


The employers' petition for review is granted; the union's  petition
for review is denied.


So ordered.