Wilkes-Barre Hospital Co., LLC v. National Labor Relations Board

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued March 21, 2017 Decided May 19, 2017

No. 15-1318

WILKES-BARRE HOSPITAL COMPANY, LLC, DOING BUSINESS

AS WILKES-BARRE GENERAL HOSPITAL,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

PENNSYLVANIA ASSOCIATION OF STAFF NURSES AND ALLIED

PROFESSIONALS,

INTERVENOR

Consolidated with 15-1384

On Petition for Review and Cross-Application

for Enforcement of an Order of

the National Labor Relations Board

Kaitlin Kaseta argued the cause for petitioner. With her

on the briefs was Bryan T. Carmody.

Kellie J. Isbell, Attorney, National Labor Relations Board,

argued the cause for respondent. On the brief were Richard F.

Griffin, Jr., General Counsel, John H. Ferguson, Associate

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General Counsel, Linda Dreeben, Deputy Associate General

Counsel, Elizabeth Heaney, Supervisory Attorney, and

Michael R. Hickson, Attorney.

Before: PILLARD, Circuit Judge, and EDWARDS and

SENTELLE, Senior Circuit Judges.

Opinion for the Court filed by Senior Circuit Judge

SENTELLE.

SENTELLE, Senior Circuit Judge: Petitioner Wilkes-Barre

Hospital Company, LLC d/b/a Wilkes-Barre General Hospital

(the “Hospital”) petitions for review of the National Labor

Relations Board’s (“NLRB” or the “Board”) decision and order

finding that the Hospital violated section 8(a)(1) and (a)(5) of

the National Labor Relations Act (the “Act”), 29 U.S.C.

§ 158(a)(1), (5), by unilaterally ceasing the payment of

longevity-based wage increases to its nurses after the

expiration of the parties’ collective bargaining agreement. See

generally Litton Fin. Printing Div. v. NLRB, 501 U.S. 190

(1991); NLRB v. Katz, 369 U.S. 736 (1962). The NLRB

cross-applies for enforcement of its decision and order. The

Hospital argues that the language of the agreement and the

parties’ shared understanding of that language demonstrate that

the Hospital was not obligated to continue paying

longevity-based increases upon expiration of the agreement.

Relying on NLRB v. Noel Canning, 134 S. Ct. 2550 (2014), the

Hospital also challenges the NLRB Regional Director’s

authority to issue and prosecute the underlying complaint

against the Hospital. For the reasons set forth below, we deny

the Hospital’s petition for review and grant the NLRB’s

cross-application for enforcement.

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I.

The Collective Bargaining Agreements

Petitioner operates an acute care facility in Wilkes-Barre,

Pennsylvania. The Hospital’s full-time and part-time graduate

and registered nurses are represented by the Pennsylvania

Association of Staff Nurses and Allied Professionals,

AFL-CIO (the “Union”). The Union is the exclusive collective

bargaining representative for a bargaining unit of

approximately 450 of the Hospital’s nurses.

In or around May 2009, the Union negotiated with the new

owner of the Hospital a memorandum of agreement that served

as the parties’ collective bargaining agreement through June

30, 2009 (“2009 CBA”). The 2009 CBA incorporated by

reference certain terms of the prior collective bargaining

agreement between the Hospital’s former owner and the Union

(“2005 CBA”), including Article 25, which provided nurses

with annual across-the-board raises and longevity-based wage

increases. After the 2009 CBA expired on July 1, 2009, the

parties began negotiations but did not reach a successor

collective bargaining agreement until April 30, 2011 (“2011

CBA”). Accordingly, the parties were without a collective

bargaining agreement from July 1, 2009, to April 30, 2011. No

wage increases, including the longevity-based increases, were

paid to the nurses in January 2010 or January 2011.

In response to the Hospital’s failure to pay longevity-based

increases in January 2010, the Union filed an unfair labor

practice charge with the NLRB’s Regional Office. The

NLRB’s Regional Director dismissed the charge and the

General Counsel upheld the dismissal. The Union did not file

an unfair labor practice charge in connection with the

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Hospital’s failure to pay longevity-based increases in January

2011.

The 2011 CBA became effective on April 30, 2011, and

expired on April 30, 2013. The new CBA, like the 2009 CBA,

provides that a nurse’s minimum base hourly rate would be

determined by his/her experience level. The seven experience

levels were grouped as follows: 0-2 years; 3-4 years; 5-9 years;

10-14 years; 15-19 years; 20-24 years; and 25+ years. Similar

to the 2005 CBA and the 2009 CBA, Article 25 and Appendix

A of the 2011 CBA provide for two types of wage increases:

across-the-board raises and longevity-based increases.

Sections 1 through 3 of Article 25 describe the

across-the-board raises, which were provided to nurses on three

dates certain. After the 2011 CBA became effective on April

30, 2011, nurses received a catch-up increase in their base

hourly rate in May 2011. Nurses then received a 2.75%

increase in base hourly rate on January 27, 2012, and a further

2.00% increase on January 27, 2013.

Sections 4 and 5 of Article 25 provide for the

longevity-based increases. Section 4 explains that wage

minimums were “based upon the employee’s length of

continuous service as a registered nurse,” and Section 5 states

that longevity-based increases were to be paid on “January 27th

of the year following the employee’s anniversary date.” Nurses

received longevity-based increases as they advanced from one

experience level to the next (e.g., 0-2 years level to 3-4 years

level), resulting in an increase in their hourly pay rate the

following January 27th.

The initial wage scale and the subsequent increases during

the term of the 2011 CBA were set forth in Appendix A in the

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following chart showing minimum hourly wage rates for nurses

in the seven experience levels:

“Reading across, the chart shows the three annual

across-the-board raises; reading down, the chart shows the

longevity-based wage increases.” Wilkes-Barre Hosp. Co.,

362 N.L.R.B. No. 148, at *4 (July 14, 2015).

The Hospital’s Failure to Pay Longevity-Based

Increases in 2014

The parties began negotiations for a successor collective

bargaining agreement in February 2013. The 2011 CBA

expired on April 30, 2013, and the parties bargained without

impasse through July 2014. Following the expiration of the

2011 CBA, the Hospital did not pay any wage increases in

January 2014. The Hospital does not dispute that it neither

gave the Union prior notice of its intention to cease paying

longevity-based increases in 2014 nor afforded the Union the

opportunity to bargain over that decision.

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The Union filed charges with the NLRB’s Regional

Director, including its contention that the Hospital’s failure to

pay longevity-based increases in January 2014 violated section

8(a)(1) and (a)(5) of the Act. The Union did not assert that the

nurses were entitled to additional across-the-board raises. The

General Counsel, through Dennis P. Walsh, the Regional

Director of Region 4, issued a consolidated complaint on April

23, 2014.

The Board Proceedings and Order

An administrative law judge considered charges that the

Hospital violated section 8(a)(1) and (a)(5) by ceasing to pay

longevity-based increases to nurses in January 2014. See

Wilkes-Barre Hosp. Co., Case 04-CA-123748, 2014 WL

6386518 (Nov. 17, 2014). The complaint charged that, under

the rule first articulated in NLRB v. Katz, 369 U.S. 736 (1962),

when the 2011 CBA expired, the Hospital had a statutory

obligation to maintain the status quo as to its nurses’ terms and

conditions of employment. See, e.g., Honeywell Int’l, Inc. v.

NLRB, 253 F.3d 125, 127, 131 (D.C. Cir. 2001). The Hospital

argued that, within the status quo, the longevity-based

increases operated in tandem with the across-the-board raises.

The Hospital further argued that the evidence established that

past practice permitted it to pretermit the payment of the

longevity-based increases after the expiration of the CBA.

The ALJ accepted the General Counsel’s position that the

across-the-board raises and the longevity-based increases were

“distinct rights” that did not “go hand-in-hand” and found it

“quite simple” for the Hospital to apply “the terms that already

existed in the contract and grant[] hourly wage rate increases

as specified in appendix A” after the agreement’s expiration.

She therefore concluded that the Hospital violated its statutory

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duty to bargain by failing to pay longevity-based increases in

January 2014.

She explained that the 2011 CBA did not include language

either “specifically limiting the applicability of” the

longevity-based increases to the term of the agreement or

clearly and unmistakably waiving the nurses’ statutory right to

receive those increases. Thus, the ALJ held, the

longevity-based increase provision “continue[d] in effect” after

the agreement’s expiration. She also rejected the Hospital’s

past practice argument, finding that the evidence did not

establish that the parties had a longstanding practice of the

Hospital’s unilateral changes going unchallenged by the

Union.

The Hospital also moved to dismiss on the ground that

Director Walsh had been improperly appointed by an

unconstitutionally constituted Board and therefore did not have

the authority to issue the complaint upon which the proceeding

was held. The ALJ denied this motion, citing the record fact

that a later, lawfully constituted Board had ratified the

Director’s appointment. The NLRB summarily affirmed the

ALJ’s rulings, findings, and conclusions, and adopted her

recommended order with slight modifications. Wilkes-Barre

Hosp., 362 N.L.R.B. No. 148, at *1.

The Hospital timely filed the present petition for review,

and the NLRB filed a cross-application for enforcement. We

have jurisdiction pursuant to 29 U.S.C. § 160(e), (f).

II.

Before considering the merits of the Board’s order, we

must address the threshold question raised by the Hospital’s

motion to dismiss. The Hospital argues that all the acts of

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Regional Director Walsh were ultra vires, as his appointment

was invalid. The NLRB had appointed him as Regional

Director on March 10, 2013. In NLRB v. Noel Canning, 134 S.

Ct. 2550 (2014), the Supreme Court invalidated the recess

appointments of three of the Board’s five members. As a result,

the Board lacked a valid quorum between January 2012 and

August 2013. Therefore, argues the Hospital, Walsh had no

authority to issue the complaints against it. See ManorCare of

Kingston PA, LLC v. NLRB, 823 F.3d 81, 89 (D.C. Cir. 2016);

Advanced Disposal Servs. E., Inc. v. NLRB, 820 F.3d 592, 596

& n.1 (3d Cir. 2016).

While the Hospital’s argument is correct in its basic

assumptions, events have overtaken it since the initial

invalidity of Walsh’s appointment and his unlawful issuance of

complaints. After the period of invalid Board operation

recognized in Noel Canning, the President made valid

appointments to create a quorum on the Board. The

reconstituted Board ratified the appointment of Walsh as

Director, among many other actions. Walsh, as Director,

thereafter ratified his own prior invalid actions. Because both

the Board and Director Walsh ratified the actions taken during

the period in which the Board lacked a valid quorum, we

conclude that the Hospital’s motion was properly denied.

In general, “[r]atification occurs when a principal

sanctions the prior actions of its purported agent.” Doolin Sec.

Sav. Bank, F.S.B. v. Office of Thrift Supervision, 139 F.3d 203,

212 (D.C. Cir. 1998), superseded by statute on other grounds,

Federal Vacancies Reform Act of 1998, Pub. L. No. 105-277,

122 Stat. 2681 (1998), as recognized in SW Gen., Inc. v. NLRB,

796 F.3d 67, 70–71 (D.C. Cir. 2015), aff’d 137 S. Ct. 929

(2017). Our precedents establish that ratification can remedy a

defect arising from the decision of “an improperly appointed

official . . . when . . . . a properly appointed official has the

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power to conduct an independent evaluation of the merits and

does so.” See Intercollegiate Broad. Sys., Inc. v. Copyright

Royalty Bd., 796 F.3d 111, 117–21, 124 (D.C. Cir. 2015)

(citing Doolin Sec., 139 F.3d at 213–14; FEC v. Legi-Tech, 75

F.3d 704, 708–09 (D.C. Cir. 1996)). Relevant to this case, we

previously suggested that “a properly constituted Board” could

ratify the decisions of an improperly constituted Board. See

Laurel Baye Healthcare of Lake Lanier, Inc. v. NLRB, 564 F.3d

469, 476 (D.C. Cir. 2009); see also Allied Aviation Serv. Co. of

N.J. v. NLRB, ___ F.3d ___, 2017 WL 1379517, at *6 (D.C.

Cir. 2017).

On July 18, 2014, after the Supreme Court’s decision in

Noel Canning, all five members of a properly constituted Board

adopted and ratified “all administrative, personnel, and

procurement matters approved by the Board or taken by or on

behalf of the Board between January 4, 2012, and August 5,

2013,” inclusive. Wilkes-Barre Hosp., 362 N.L.R.B. No. 148,

at *5. The Board expressly authorized Director Walsh’s

appointment, and Director Walsh affirmed and ratified his own

actions in a separate order on July 30, 2014.

After considering relevant materials, the properly

constituted Board expressly ratified its appointment of Director

Walsh as a Regional Director. The Hospital presents no

evidence to suggest that the Board failed “to conduct an

independent evaluation of the merits,” Intercollegiate Broad.,

796 F.3d at 117, or make “a detached and considered

judgment,” Doolin Sec., 139 F.3d at 213, when it ratified

Director Walsh’s appointment. The Hospital argues that the

Board’s ratification was an improper attempt to “insulate the

Board from the invalidity of the original appointments and the

actions taken thereunder.” This argument fails. Ratification

can remedy defects arising from the decisions of improperly

appointed officials. See, e.g., Intercollegiate Broad., 796 F.3d

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at 117–18. Therefore, the properly constituted Board’s

ratification remedied any defect arising from the quorum

violation.

Because he acted as “both the principal and the agent,” the

propriety of Director Walsh’s ratification of his own actions

presents a more difficult question. See Advanced Disposal, 820

F.3d at 602–03. After considering the applicable law and the

facts of this case, we conclude that Director Walsh’s

ratification was sufficient to remedy the defect. As an initial

matter, we note that the only evidence presented by the

Hospital on the invalidity of Director Walsh’s ratification is a

memorandum from the Board’s Office of Inspector General

concluding that probable cause existed to find that Director

Walsh violated the Standards of Ethical Conduct for

Employees of the Executive Branch by participating in certain

prohibited fundraising activities. As the violation is unrelated

to the Hospital or Director Walsh’s issuance of complaints

during the period in which the Board lacked a quorum, we fail

to see the relevancy of this information to the question

presented in this case.

The Hospital’s primary argument is that Director Walsh’s

“self-ratification” was improper because “human nature”

makes it impossible for an individual to be disinterested in his

own prior decision-making. Although we have not been

confronted with this precise situation, our precedents shed

some light on the question. In Doolin Security, for example,

we applied our ratification precedents even though the situation

was “not easily characterized as between a principal . . . and an

agent.” See 139 F.3d at 213–14. We further explained in

Legi-Tech that, “given human nature,” forcing a properly

appointed official to start at the beginning of the process does

not necessarily promise a “more detached and ‘pure’

consideration of the merits of the case . . . .” 75 F.3d at 709.

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We note that other circuits have held that ratification can

be effective even where the same party is both the agent and

the principal. In Advanced Disposal, the Third Circuit

considered the question in a context so directly parallel to the

present case that the same Director Walsh was the

agent/principal in both. See 820 F.3d at 602–03. Citing our

decision in Doolin Security, and analyzing the question that

lingers, the Third Circuit ruled that Director Walsh’s filing of

a complaint necessarily affirmed the validity of his earlier

action. Id. at 605.

Similarly, in CFPB v. Gordon, 819 F.3d 1179 (9th Cir.

2016), the Ninth Circuit considered the effect of the CFPB

Director’s ratification of his own prior invalid actions. See id.

at 1185–86, 1190–91. The Director, like the NLRB in the case

before us, was serving under an unconstitutional recess

appointment at the time he made the initial actions. That

circuit, relying on our decision in Legi-Tech, concluded that

“even if the subsequent . . . ‘review’ was ‘nothing more than a

rubberstamp,’” it “resolve[d] any Appointments Clause

deficiencies.” See id. at 1191–92 (quoting Legi-Tech, 75 F.3d

at 709); see also Intercollegiate Broad., 796 F.3d at 118 & n.1

(suggesting that ratification may be sufficient even if the

subsequent decision rubberstamped the previous decision).

In this case, the Hospital presented no evidence suggesting

that Director Walsh failed to make a detached and considered

judgment or that he was “actually biased” against the Hospital.

Legi-Tech, 75 F.3d at 709. It also appears that forcing Director

Walsh to reissue the complaint in this case would likely “do

nothing but give the [Hospital] the benefit of delay.” See

Doolin Sec., 139 F.3d at 214. We also note that the Hospital

has failed to assert any “continuing prejudice” from the

violation. See Legi-Tech, 75 F.3d at 708–09. Consistent with

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precedent, we conclude that “the better course” is to take his

ratification “at face value and treat it as an adequate remedy.”

Id. at 709. In short, the bare fact that Director Walsh ratified

his own actions, without more, does not make his ratification

insufficient. In any event, it is the General Counsel who has

final authority over the issuance of complaints, see 29 U.S.C.

§ 153(d), and Director Walsh was acting on behalf of General

Counsel Richard Griffin, who had been duly confirmed when

the complaint against the Hospital issued on April 23, 2014.

We conclude that Director Walsh’s ratification of his own

action remedied the defect in his original issuance of the

complaint. We therefore proceed to review the merits of the

petition.

III.

A.

Our review of the Board’s unfair labor practice

determination is limited. Brewers & Maltsters, Local Union

No. 6 v. NLRB, 414 F.3d 36, 42 (D.C. Cir. 2005). “We . . . must

sustain the Board’s decision unless, reviewing the record as a

whole, it appears that the Board’s factual findings are not

supported by substantial evidence, or that the Board acted

arbitrarily or otherwise erred in applying established law to the

facts at issue.” S. Nuclear Operating Co. v. NLRB, 524 F.3d

1350, 1355 (D.C. Cir. 2008) (citation and internal quotation

marks omitted). We also defer to the Board’s reasonable

construction of section 8(a)(5) and (d), 29 U.S.C. § 158(a)(5),

(d). See Brewers & Maltsters, 414 F.3d at 41–42.

While the Board has authority to interpret collective

bargaining agreements to resolve unfair labor practice charges,

NLRB v. U.S. Postal Serv., 8 F.3d 832, 837 (D.C. Cir. 1993),

we owe “no deference to the Board’s interpretation of a

13

disputed collective bargaining agreement,” Commonwealth

Commc’ns, Inc. v. NLRB, 312 F.3d 465, 468 (D.C. Cir. 2002).

Federal courts, not the Board, are the primary source of

authority in interpreting collective bargaining agreements.

Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 202–03

(1991); Enloe Med. Ctr. v. NLRB, 433 F.3d 834, 837–38 (D.C.

Cir. 2005); see also Chicago Tribune Co. v. NLRB, 974 F.2d

933, 937–38 (7th Cir. 1992) (“The Board is not an expert in

contract interpretation.”). We therefore interpret the 2011

CBA de novo. See Postal Serv., 8 F.3d at 837. When

interpreting a collective bargaining agreement, we generally

apply “ordinary principles of contract law.” M&G Polymers

USA, LLC v. Tackett, 135 S. Ct. 926, 933 (2015).

B.

The Unilateral Change Doctrine

“Section[] 8(a)(5) and 8(d) of the [Act] require parties in a

collective bargaining relationship to negotiate in good faith

over ‘wages, hours, and other terms and conditions of

employment.’” Daily News of L.A. v. NLRB, 73 F.3d 406, 410

(D.C. Cir. 1996) (quoting 29 U.S.C. § 158(d)); see also 29

U.S.C. § 158(a)(5). Section 8(a)(1) makes it an unfair labor

practice for an employer to interfere with its employees’

exercise of their rights under the Act. 29 U.S.C. § 158(a)(1).

Thus, an employer’s violation of section 8(a)(5)’s duty to

bargain also violates section 8(a)(1). Enter. Leasing Co. of Fla.

v. NLRB, 831 F.3d 534, 546 (D.C. Cir. 2016).

“The Board has taken the position that it is difficult to

bargain if, during negotiations, an employer is free to alter the

very terms and conditions that are the subject of those

negotiations.” Litton Fin., 501 U.S. at 198. Indeed, the

Supreme Court has equated an employer’s unilateral change to

14

terms and conditions of employment to “a flat refusal” to

bargain. NLRB v. Katz, 369 U.S. 736, 743 (1962).

Accordingly, absent impasse or waiver, an employer violates

both section 8(a)(1) and (a)(5) by unilaterally changing terms

and conditions of employment. Honeywell Int’l, Inc. v. NLRB,

253 F.3d 125, 127, 131 (D.C. Cir. 2001) (citing Litton Fin., 501

U.S. 190; Katz, 369 U.S. 736). This “unilateral change

doctrine” extends to cases “where, as here, an existing

agreement has expired and negotiations on a new one have yet

to be completed.” Id. at 127–28 (quoting Litton Fin., 501 U.S.

at 198); see also More Truck Lines, Inc. v. NLRB, 324 F.3d 735,

738–39 (D.C. Cir. 2003); Sw. Steel & Supply, Inc. v. NLRB,

806 F.2d 1111, 1113 (D.C. Cir. 1986).

Status Quo under the 2011 CBA

To avoid running afoul of the unilateral change doctrine,

an employer must maintain the status quo as to terms and

conditions of employment after the expiration of a collective

bargaining agreement. See Laborers Health & Welfare Trust

Fund for N. Cal. v. Advanced Lightweight Concrete Co., 484

U.S. 539, 543–44 nn.5–6 (1988). The primary dispute in this

case concerns the proper determination of the post-expiration

status quo. Because an employer’s obligation to maintain the

status quo derives from the Act, not from the agreement, see

More Truck Lines, 324 F.3d at 738-39; Honeywell Int’l, 253

F.3d at 128, 131, certain terms of an expired agreement extend

beyond the agreement’s expiration and continue to “define the

status quo,” Litton Fin., 501 U.S. at 206 (emphasis omitted).

Otherwise put, the unilateral change doctrine requires

employers “to honor the terms and conditions of an expired

collective-bargaining agreement.” Laborers Health & Welfare

Trust Fund, 484 U.S. at 544 n.6. In defining the post-expiration

status quo in this case, therefore, we look to the substantive

terms of the 2011 CBA. See NLRB v. Cauthorne, 691 F.2d

15

1023, 1025 (D.C. Cir. 1982); E.I. Du Pont De Nemours, 364

N.L.R.B. No. 113, at *5 (Aug. 26, 2016); see also

Intermountain Rural Elec. Ass’n v. NLRB, 984 F.2d 1562, 1567

(10th Cir. 1993) (noting that “the contract language itself . . .

defines the [post-expiration] status quo”).

In considering an unfair labor practice charge premised on

the unilateral change doctrine, “the relevant inquiry . . . is

whether any established employment term on a mandatory

subject of bargaining has been unilaterally changed.” Daily

News, 73 F.3d at 411. In this case, the longevity-based wage

increase provision was a mandatory subject of bargaining, see

29 U.S.C. § 158(d); More Truck Lines, 324 F.3d at 738–39, and

an established term of the 2011 CBA that survived the

agreement’s expiration. It is undisputed that the parties did not

bargain to lawful impasse and that the Hospital did not notify

the Union of its intention to cease paying longevity-based

increases. Accordingly, upon expiration of the 2011 CBA, the

Hospital was obligated to continue paying longevity-based

increases absent lawful impasse or a new agreement with the

Union. See Honeywell Int’l, 253 F.3d at 127–28, 131–32.

The Hospital counters that the longevity-based increases

were paid “exclusively in conjunction with” the

across-the-board raises, which were expressly limited to the

term of the agreement and thus cannot define the

post-expiration status quo. The Hospital argues that during the

term of the agreement, nurses were given a single wage rate

increase on each of three specific dates consisting of a

combination of an across-the-board raise and a longevity-based

increase, if applicable. According to the Hospital, therefore,

cessation of all wage increases represents the post-expiration

status quo. The Hospital’s argument misses the mark.

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In essence, the Hospital seeks to define the status quo by

taking a snapshot of each individual nurse’s pay rate at the

moment the 2011 CBA expired. But the terms of the expired

agreement define the post-expiration status quo, see, e.g.,

Litton Fin., 501 U.S. at 206; Sw. Steel, 806 F.2d at 1113, not

each individual employee’s circumstance at the time of

expiration, see Daily News, 73 F.3d at 409, 412–13 (stating that

employer must continue merit-increase program after the

agreement’s expiration even though the increases were

“discretionary as to the precise amount”).

The 2011 CBA, through its language and structure,

establishes two distinct types of wage increases:

across-the-board raises and longevity-based increases.

Sections 1, 2, and 3 of Article 25 set forth the across-the-board

raises. These raises resulted in a percentage increase in each

nurse’s base minimum hourly rate and were provided to all of

the Hospital’s nurses on three specific dates during the term of

the agreement. Sections 4 and 5 of Article 25 provide for the

longevity-based increases, which were paid to individual

nurses who advanced from one experience level to the next.

The longevity-based increases, unlike the across-the-board

raises, were tied to an individual nurse’s anniversary date, not

to the term of the agreement. Specifically, the agreement states

that longevity-based increases were to be paid on “January 27th

of the year following the employee’s anniversary date.” Thus,

as the Board held, the across-the-board raises and

longevity-based increases were “distinct rights,” and nurses

had a continued “right to wage rate increases when they

advanced to the next experience level.” Wilkes-Barre Hosp.,

362 N.L.R.B. No. 148, at *7.

The Hospital argues that the chart in Appendix A

illustrates the interplay between the two wage increases,

asserting that the chart combines the five wage sections in

17

Article 25 “into one, singular wage increase table.” Appendix

A, however, does not support the Hospital’s contention. As the

Board explained: “Reading across, the chart shows the three

annual across-the-board raises; reading down, the chart shows

the longevity-based wage increases.” Id. at *4. It is undisputed

that the wage rates included in the chart froze at the January

2013 levels upon the agreement’s expiration, meaning that

nurses were not entitled to an across-the-board raise in their

base minimum hourly rates in January 2014. Although the

wage rates froze, each individual nurse could still move up the

steps of the chart based on his/her experience level until a new

agreement or lawful impasse was reached. Appendix A

therefore reflected the nurses’ ongoing right to receive

post-expiration longevity-based increases, as set forth in

Sections 4 and 5 of Article 25. We agree with the Board that

when a nurse reached one of the milestone work anniversaries,

“the longevity-based scale at appendix A” can easily be applied

without any “concomitant across-the-board raises.” Id. at *7.

The Hospital also directs our attention to the language

accompanying the chart, which explains that the wage scale

and subsequent wage increases set forth in the 2011 CBA

applied “[d]uring the term of th[e] Agreement.” This

durational clause, the Hospital argues, removed any

uncertainty as to whether longevity-based increases survived

the 2011 CBA’s expiration. But the durational clause in

Appendix A speaks to the nurses’ contractual rights, not to their

statutory rights. See, e.g., Litton Fin., 501 U.S. at 207 (noting

“the distinction between contractual obligations and

postexpiration terms imposed by the [Act]”). Without more,

such a general durational clause cannot defeat the unilateral

change doctrine. See Honeywell Int’l, 253 F.3d at 128, 132–

33.

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The Hospital makes a secondary argument based on the

past practice of the parties to the 2011 CBA. An employer may

implement unilateral changes to terms and conditions of

employment when such changes are in line with its

longstanding practice. See E.I. Du Pont De Nemours & Co. v.

NLRB, 682 F.3d 65, 67–70 (D.C. Cir. 2012); Int’l Bhd. of Elec.

Workers Local 1466 v. NLRB, 795 F.2d 150, 153 (D.C. Cir.

1986). Rather than constitute an unlawful unilateral change, an

action taken pursuant to an established practice actually

preserves the status quo. See Katz, 369 U.S. at 746; E.I. Du

Pont, 682 F.3d at 67–68; see also Aaron Bros. Co. v. NLRB,

661 F.2d 750, 753 (9th Cir. 1981) (“Wage changes that merely

reflect continuations of past company policy are not considered

changes in existing work conditions, and thus fall outside the

Katz rule.”). To support its past practice argument, the

Hospital points to the Union’s failure to file an unfair labor

practice charge in connection with the Hospital’s non-payment

of longevity-based increases in January 2011, after the

expiration of the 2009 CBA. But a union’s one-time failure to

challenge an employer’s unilateral change does not qualify as

an established practice. See Brewers & Maltsters, 414 F.3d at

45.

In conclusion, the terms of the 2011 CBA establish that the

payment of longevity-based increases represents the

post-expiration status quo between the Hospital and the Union.

The Contract Coverage Doctrine and Waiver

Having concluded that the Act “does not shield” the

Hospital’s unilateral decision to cease payment of

longevity-based increases, we turn to the Hospital’s argument

that the Union “surrendered the[] right to bargain over the . . .

change[] through either waiver or contract.” S. Nuclear

Operating, 524 F.3d at 1357. First, invoking the “contract

19

coverage doctrine,” the Hospital asserts that the parties agreed

in the 2011 CBA that the payment of all wage increases would

cease upon the expiration of the agreement. Second, the

Hospital contends that it demonstrated that the Union clearly

and unmistakably waived the nurses’ right to post-expiration

longevity-based increases. We reject both arguments.

There are important distinctions between the contract

coverage doctrine and waiver—a point we have repeatedly

stressed. See generally Heartland Plymouth Court MI, LLC v.

NLRB, 838 F.3d 16 (D.C. Cir. 2016). Because “the question of

contractual coverage, one of contractual interpretation, is

antecedent to the waiver question,” id. at 19 n.1, we first

consider whether the Hospital’s decision to cease paying

longevity-based increases was covered by the 2011 CBA.

The duty to bargain does not prevent a union from

“exercis[ing] its right to bargain about a particular subject by

negotiating for a provision in a collective bargaining contract

that fixes the parties’ rights and forecloses further mandatory

bargaining as to that subject.” Postal Serv., 8 F.3d at 836

(quoting Local Union No. 47, Int’l Bhd. of Elec. Workers v.

NLRB, 927 F.2d 635, 640 (D.C. Cir. 1991)); see also S. Nuclear

Operating, 524 F.3d at 1358. Thus, pursuant to the contract

coverage doctrine, an employer is “free to make unilateral

changes . . . without running afoul of the Act” when those

changes are “covered by the collective bargaining agreement.”

Enter. Leasing, 831 F.3d at 547 (citations and internal

quotation marks omitted).

A dispute regarding a subject that is “covered by” a

collective bargaining agreement presents “an issue of contract

interpretation,” Bath Marine Draftsmen’s Ass’n v. NLRB, 475

F.3d 14, 23 (1st Cir. 2007) (citing Postal Serv., 8 F.3d at 836–

37), and when parties negotiate for a contractual provision

20

limiting the union’s statutory rights, “we will give full effect to

the plain meaning of such provision,” Local Union No. 47, 927

F.2d at 641; see also Postal Serv., 8 F.3d at 836 (“[T]he courts

are bound to enforce lawful labor agreements as written . . . .”).

Importantly, a subject may be covered by an agreement even if

the agreement does not clearly and unmistakably address that

particular subject. See Enloe Med., 433 F.3d at 837–38; Postal

Serv., 8 F.3d at 838; Connors v. Link Coal Co., 970 F.2d 902,

906 (D.C. Cir. 1992); Local Union No. 47, 927 F.2d at 641.

Accordingly, in analyzing whether the Hospital’s decision to

cease paying longevity-based increases upon the expiration of

the 2011 CBA was covered by that agreement, we consider

whether that subject was “within the compass of” the terms of

the agreement. Postal Serv., 8 F.3d at 838.

We begin by noting that the Board improperly collapsed

the contract coverage and waiver questions. The Board found

that the 2011 CBA did not “specifically limit[]” the

applicability of the longevity-based increases to the

agreement’s term or clearly and unmistakably waive the

Union’s statutory rights. Wilkes-Barre Hosp., 362 N.L.R.B.

No. 148, at *6. In determining whether an employer’s

unilateral decision is covered by a collective bargaining

agreement, we consistently have rejected the Board’s attempts

to require the agreement to “specifically mention,” Enloe Med.,

433 F.3d at 839, “specifically refer[]” to, Postal Serv., 8 F.3d

at 838, or “specifically address,” Connors, 970 F.2d at 906, that

decision. As we previously explained, the Board’s approach

fails to recognize that “bargaining parties [cannot] anticipate

every hypothetical grievance and purport to address it in their

contract,” Postal Serv., 8 F.3d at 838, and “imposes an

artificially high burden on an employer,” Enloe Med., 433 F.3d

at 837.

21

Nevertheless, after reviewing the terms of the 2011 CBA,

we conclude that the Hospital’s decision to cease paying

longevity-based increases after the agreement’s expiration is

not covered by the agreement. The Hospital argues that,

because the 2011 CBA expressly limited the across-the-board

raises to the term of the agreement, the agreement necessarily

limited the Hospital’s statutory obligation to pay

longevity-based increases to the term of the agreement as well.

As explained above, however, the across-the-board raises and

the longevity-based increases are distinct rights that operate

independently of each other. And unlike the across-the-board

raises, the longevity-based increases were “not limited to a time

certain.” See Honeywell Int’l, 253 F.3d at 128, 132–33. The

durational clause in Appendix A, which stated that the initial

wage scale and subsequent wage increases applied “[d]uring

the term of th[e] Agreement,” does not change this conclusion.

Because the unilateral change doctrine “presupposes the end of

a collective bargaining agreement,” the standard durational

clause in Appendix A, without more, cannot “‘cover[]’ and

[thereby] vitiate[] [the] Union’s statutory claim to continued”

longevity-based increases. See id. at 128, 132–33. We

therefore conclude that the Hospital’s decision to cease paying

longevity-based increases in January 2014 is not covered by the

terms of the 2011 CBA.

The Hospital also argues that the Union clearly and

unmistakably waived the nurses’ statutory right to receive

longevity-based increases after the expiration of the 2011

CBA. “A waiver occurs when a union knowingly and

voluntarily relinquishes its right to bargain about a matter . . . .”

Postal Serv., 8 F.3d at 836 (citation and emphasis omitted). By

waiving the right to bargain over a particular matter, a union

“surrenders the opportunity to create a set of contractual rules

that bind the employer, and instead cedes full discretion to the

employer on that matter.” S. Nuclear Operating, 524 F.3d at

22

1357 (citation and internal quotation marks omitted). It follows

that “an employer’s unilateral change to contract terms on that

subject does not violate the Act.” Enter. Leasing, 831 F.3d at

546. For this reason, unlike the contract coverage doctrine, a

waiver “must be ‘clear and unmistakable.’” Honeywell Int’l,

253 F.3d at 133 (quoting Metro. Edison Co. v. NLRB, 460 U.S.

693, 703 (1983)).

In determining whether the Union waived its statutory

rights, we consider the language of the 2011 CBA as well as

the parties’ course of conduct. See S. Nuclear Operating, 524

F.3d at 1357–58; Honeywell Int’l, 253 F.3d at 133–34. An

employer bears the burden of showing that a union clearly and

unmistakably waived its statutory rights. Sw. Steel, 806 F.2d

at 1114–15. To satisfy its burden, the Hospital must establish

that the parties “consciously explored or fully discussed the

matter on which the union has consciously yielded its rights.”

S. Nuclear Operating, 524 F.3d at 1357–58 (citation and

internal quotation marks omitted).

The Hospital contends that the language of the 2011 CBA

establishes that the Union clearly and unmistakably waived the

nurses’ right to post-expiration longevity-based increases.

“[G]enerally speaking, waivers of statutory rights must be

demonstrated by an express statement in the contract to that

effect.” Gannett Rochester Newspapers v. NLRB, 988 F.2d

198, 203–04 (D.C. Cir. 1993) (citations, internal quotation

marks, and alteration omitted). Consequently, employers

cannot rely on contractual silence. Id. at 203; S-B Mfg. Co.,

270 N.L.R.B. 485, 490 (1984). Nor can “general contractual

provision[s],” Gannett Rochester, 988 F.2d at 203, or

“[e]quivocal, ambiguous language in a bargaining agreement,”

NLRB v. Gen. Tire & Rubber Co., 795 F.2d 585, 588 (6th Cir.

1986), meet that standard. We also have noted that when a

particular subject is not “covered by” a collective bargaining

23

agreement, that agreement generally will not “clearly and

unmistakably waive bargaining over that matter.” Heartland

Plymouth, 838 F.3d at 26. This case is no exception.

The Hospital fails to identify any express language in the

2011 CBA to support its waiver defense, arguing instead that

the agreement’s language does not affirmatively “point to an

ongoing statutory obligation” to pay longevity-based increases.

The Hospital’s argument fails to consider that, pursuant to the

unilateral change doctrine, wage rates established in a

collective bargaining agreement continue in effect “even after

an employer is released from any contractual obligations.” See

More Truck Lines, 324 F.3d at 738–39; see also Honeywell

Int’l, 253 F.3d at 134. Moreover, as noted above, the 2011

CBA’s silence on the Hospital’s statutory obligation to

continue paying longevity-based increases after the

agreement’s expiration as part of the status quo is insufficient

to establish waiver. Gannett Rochester, 988 F.2d at 203.

While a contract duration clause that expressly authorizes the

employer to terminate its statutory obligations upon expiration

is sufficient to establish waiver, see Local Joint Exec. Bd. of

Las Vegas v. NLRB, 540 F.3d 1072, 1080–82 (9th Cir. 2008);

Honeywell Int’l, 253 F.3d at 133–34; Staffco of Brooklyn, LLC,

364 N.L.R.B. No. 102, at *2–4 & n.8 (Aug. 26, 2016), the 2011

CBA does not contain such a clause. The durational clause in

Appendix A “makes it clear that the Union’s contractual right”

to longevity-based increases ended on April 30, 2013, but it “is

silent on the Union’s [post-expiration] statutory rights.”

Honeywell Int’l, 253 F.3d at 134. Accordingly, the durational

clause “in no way evinces a clear and unmistakable waiver by

the Union.” Id.

The Hospital also fails to establish through “other

contextual factors” that the Union waived the nurses’ statutory

right to longevity-based increases. See Regal Cinemas, Inc. v.

24

NLRB, 317 F.3d 300, 312–14 (D.C. Cir. 2003). The record

does not reveal any evidence concerning the parties’ bargaining

history. Instead, the Hospital once again relies on the Union’s

failure to bring an unfair labor practice charge in January 2011,

arguing that this failure illustrates that the parties agreed that

the Hospital could cease the payment of longevity-based

increases upon expiration. But the Union’s one-time failure to

challenge the Hospital’s cessation of longevity-based increases

in January 2011 “does not estop subsequent assertion of that

right.” S. Nuclear Operating, 524 F.3d at 1358; see also

Brewers & Maltsters, 414 F.3d at 45. We note that the

Supreme Court has held that two instances of a union’s silence

did not “establish a pattern of decisions clear enough to convert

the union’s silence into binding waiver.” See Metro. Edison,

460 U.S. at 707–10. In sum, nothing in the record establishes

that the Union fully discussed the nurses’ right to receive

longevity-based increases after the 2011 CBA’s expiration and

then “voluntarily relinquished [its] right to bargain over them.”

S. Nuclear Operating, 524 F.3d at 1358.

***

For the reasons stated, we conclude that the Hospital

violated section 8(a)(1) and (a)(5) by unilaterally ceasing the

payment of longevity-based wage increases to nurses after the

expiration of the parties’ collective bargaining agreement.

Accordingly, we deny the Hospital’s petition for review and

grant the Board’s cross-application for enforcement.

So ordered.