Bakersfield Californian

National Labor Relations Board - Board Decisions

Dec 20, 2001

337 N.L.R.B. 296 (N.L.R.B. 2001)

296 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
The Bakersfield Californian and Bakersfield Typo-
graphical Union No. 439, Affiliated with Com­
munications Workers of America, AFL–CIO,
CLC. Cases 31–CA–23978 and 31–CA–23979.
December 20, 2001
DECISION AND ORDER
BY CHAIRMAN HURTGEN AND MEMBERS LIEBMAN
AND WALSH
On October 17, 2000, Administrative Law Judge Fre­
derick C. Herzog issued the attached decision. The Ge n­
eral Counsel and the Charging Party each filed excep­
tions and a supporting brief. The Respondent filed an
answering brief.
The National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the decision and the record
in light of the exceptions and briefs and has decided to
affirm the judge’s rulings, findings, and conclusions and
to adopt the recommended Order.
Background
The Charging Party, Bakersfield Typographical Union
No. 439, represents certain of the Respondent’s employ­
ees in two separate bargaining units. The complaint al­
leged that, on or about January 12 and 13, 1999,1 the
Respondent “implemented” its last, best, and final offers
for both bargaining units, which offers included a wholly
discretionary merit wage and bonus provision. The
January dates correspond to when the Respondent, after
lawful impasse, posted the terms and conditions of em­
ployment encompassed in its final offers.
At the beginning of the hearing, the Respondent stipu­
lated that: (1) throughout 1999, it awarded merit bonuses
and merit wage increases to several employees, (2) prior
to awarding these increases, it did not negotiate with the
Union over the timing or amount of these increases, and
(3) its merit pay proposal, just like the merit pay provi­
sion in the expired contract, allowed it full discretion
over the timing and amount of any payments above scale.
Subsequently, in its opening argument, the Respondent
stated that, while it had stipulated that it had granted
merit increases post-impasse, the complaint referred only
to the “implement[ing]” conduct of January 12 and 13,
and did not allege that the Respondent violated the Act
by actually unilaterally changing wages. The Respon­
dent’s counsel stated that he wanted to make his “posi­
tion clear” that nothing that transpired after January 12
and 13, mattered for purposes of determining whether a
violation occurred. The Respondent’s counsel also spe-
1 All dates are in 1999 unless otherwise indicated.
cifically stated that he was trying to avoid a possible con­
tention by the General Counsel that, even if there was no
violation when the Respondent “stuck it [the terms and
conditions] on the wall,” a violation occurred when the
Respondent actually started changing wages.
In response to this statement of position, the judge
stated that, if the posting of the terms and conditions was
not itself a violation, he would not find the Respondent
in violation of the Act for granting subsequent merit pay
increases. Neither the General Counsel nor the Charging
Party objected or otherwise responded to the judge’s
statement as to the limited scope of the complaint.2
In McClatchy Newspapers, 321 NLRB 1386 (1996),
enfd. 131 F.3d 1026 (D.C. Cir. 1997), cert. denied 524
U.S. 937 (1998) (McClatchy II),3 the Board recognized a
narrow exception to the general rule permitting an em­
ployer, after reaching impasse in bargaining, to unilater­
ally implement the terms of its final pre-impasse offer.
The McClatchy exception to that general rule prohibits
an employer, even after reaching an impasse in bargain­
ing, from unilaterally implementing a wage proposal that
gives the employer broad discretionary powers that nec­
essarily entail recurring unilateral employer decisions
regarding changes in employee wage rates. Id. at 1388.
Thus, the Board has stated that a respondent’s obligation
is “to negotiate to agreement or to impasse ‘definable
objective procedures and criteria’ governing raises under
its merit pay proposal prior to implementation of the
proposal.” McClatchy Newspapers, 322 NLRB 812, 813
(1996) (McClatchy III).
After the close of the instant hearing on January 31,
2000, but before the judge issued his attached decision
on October 17, 2000, the Board issued its decision in
Woodland Clinic, 331 NLRB 735 (2000) (Woodland).
There, the Board dismissed a complaint allegation that
the respondent in that case unlawfully “implemented”
(emphasis in original) merit wage increases under its
pay-for-performance system, where “the General Coun­
sel concede[d] that the Respondent never actually imple­
mented or granted any merit pay increases pursuant to its
proposal.” (Emphasis added.) The Board said: “Absent
evidence that the Respondent actually granted merit
wage increases to unit employees, there is no basis for
2 The General Counsel’s understanding of the judge’s limitation of
the lit igation is reflected in his posthearing brief to the judge:
The sole issue presented to the Administrative Law Judge was
whether Respondent violated Section 8(a)(5) of the Act by
implementing a wholly discretionary merit wage and bonus plan on
January 12 and 13, 1999, without first offering to meet and bargain
with the Union concerning the timing and amounts of such merit and
wage bonuses.
3 All subsequent citations to McClatchy reference McClatchy II
unless otherwise stated.
337 NLRB No. 42
BAKERSFIELD CALIFORNIAN 297
finding a violation of the Act under McClatchy.” Id., slip
opinion at 7.
The Judge’s Decision
The judge found that the Respondent’s wage proposal
was “similar to McClatchy” in that the “Respondent re­
tained ultimate discretion over the timing and amount of
individual merit increases.” However, the judge also
found that the Respondent had attempted, during pre­
liminary matters at the hearing, to clarify the scope of the
complaint and the General Counsel had “remained si­
lent” during this attempt. Based on the General Coun­
sel’s “seeming agreement,” the judge limited the scope
of the complaint to “posting,” to which limitation the
General Counsel did not object. Thus, no evidence re­
garding the Respondent’s actual granting of merit wages
was heard.4 The judge noted that although he could pass
on an issue that was not alleged in the complaint if it
were closely related to a subject matter in the complaint
and was fully litigated, because he had expressly refused
to hear evidence regarding the actual granting of merit
pay increases, that issue was not fully litigated. The
judge concluded that the only question properly before
him was whether the Respondent violated the Act by
mere posting. Applying Woodland, the judge found that
the January 12 and 13 posting, without more, did not
violate the Act under McClatchy.
Exceptions
The General Counsel excepts, contending that the
judge failed to make findings of fact and conclusions of
law based on allegations in the complaint. The Ge neral
Counsel argues that the judge exceeded his authority by
effectively revising the complaint from one alleging
“implementing” to one alleging “posting.” The General
Counsel further argues that his silence at the hearing did
not signal agreement. He contends that interjection dur­
ing the Respondent’s opening statement would have been
improper. In any event, the General Counsel asserts,
there was no need to amend or clarify the complaint be-
cause it alleged “implementing.” Moreover, the General
Counsel argues, the issue of implementation was fully
litigated because the Respondent stipulated that it
granted fully discretionary merit pay increases through-
out 1999, and because the admission of all facts neces­
sary to establish a violation makes an issue “fully liti­
gated.” Finally, the General Counsel argues that there is
no prejudice to the Respondent, because there is no evi­
dence which the Respondent could have adduced which
would exculpate it from a violation under McClatchy.
4 However, as noted above, there was a stipulation of fact that the
Respondent had granted such increases.
The Charging Party’s exceptions largely mirror the
General Counsel’s. Additionally, the Charging Party
argues that the judge’s finding that implementation re-
quires that employees actually be granted merit pay is
erroneous. The Charging Party further argues that
Woodland is distinguishable because the employer’s final
offer there specifically required further discussion with
the union prior to implementation of the merit wage por­
tion of the proposal.
Analysis
For the following reasons, we find that the exceptions
do not warrant reversal of the judge’s dismissal of the
complaint. The complaint alleged that the Respondent
implemented its last, best and final offers in two separate
bargaining units, on or about January 12 and 13, respec­
tively. The complaint further alleged that those offers
included a wholly discretionary merit wage and bonus
provision. The complaint did not allege that the Respon­
dent violated the Act by actually granting merit wage
increases.
As noted by the judge, the parties stipulated at hearing
that what occurred on January 12 and 13 was the Re­
spondent’s posting of a letter and a listing of its working
conditions (which conditions constituted the Respon­
dent’s last, best and final offer). The posted conditions
included the right to grant merit increases. As noted
above, the parties further stipulated that the Respondent
actually granted merit increases throughout 1999 (after
January 13), and that it did not negotiate with the Union
over the timing or amount of these increases prior to
granting them.
Having entered into these stipulations, the Respondent,
as recounted by the judge, “took great care” at the com­
mencement of the hearing “to clarify exactly what the
factual allegations were,” “voiced its concerns,” and
stated its position that the “Complaint and stipulations at
hearing concerned the posting of conditions on January
12, 1999 and January 13, 1999 only.” In response, the
General Counsel “remained silent.” Relying on this si­
lence, the judge assured the Respondent that, if the post­
ing of the merit wage proposal on January 12 and 13,
was not a violation, he would not find a violation based
on conduct which occurred after January 12 and 13.
Still, as the judge stated, the General Counsel “did not
object.” The judge thereafter refused to hear any evi­
dence that the parties may have had regarding circum­
stances surrounding the actual granting of merit pay. We
find that the judge, with no objection from the General
Counsel, effectively ruled that the alleged “implementa­
tion” in the complaint encompassed only the Respon­
dent’s posting of the merit wage proposal on January 12
and 13.
298 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
In McClatchy, supra, the Board articulated the issue as
whether the respondent had violated the Act by “unilat­
erally changing” employee wages after having bargained
to impasse on its final proposal to institute a wholly dis­
cretionary merit pay plan. The respondent had first
posted its preimpasse contractual wage proposal and
thereafter unilaterally granted wage increases pursuant to
that proposal. Without referring to the posting of the
proposal, and referring only to the actual subsequent uni­
lateral granting of wage increases pursuant to the pro­
posal, the Board found that the respondent had unlaw­
fully “implemented” its wage proposal. 321 NLRB at
1388. In Woodland, the Board noted that the General
Counsel had conceded that the respondent had “never
actually implemented or granted” any merit pay increases
pursuant to its proposal. Thus, the General Counsel re-
lied solely on the announcement of the system. The
Board found that this was not a basis for finding a viola­
tion of the Act under McClatchy. Woodland, supra, 331
NLRB 735, 740. In so finding, the Board in Woodland
clearly implied that merely posting or otherwise an­
nouncing the terms of such a wage proposal, without
more, would not violate the Act under McClatchy.5
The judge, considering both McClatchy and Wood-
land, found that, substantively, the Respondent’s merit
wage proposal was similar to that found unlawful in
McClatchy. However, he also found that, in McClatchy,
“implementation” took the form of a unilateral change in
wages—i.e., the respondent had actually granted wage
increases. The judge acknowledged the Respondent’s
admissions here regarding the actual granting of merit
pay, but noted that those admissions occurred during
preliminary matters and as a “direct attempt by Respon­
dent to clarify the matters alleged in the complaint.” The
judge emphasized the Ge neral Counsel’s silence, and
explained both why and how that silence affected his
consequent construction of the complaint. The judge
also correctly noted the scope of his authority to rule on
an issue not alleged in a complaint. Considering the pro­
cedural posture of this case and basic “fairness,” the
judge concluded that the only issue he could properly
rule on was the January 12 and 13 posting. And he con­
cluded, applying Woodland, that the posting, in and of
itself, was not unlawful.
We agree with the judge’s findings, conclusions, and
analysis. Specifically, we agree with the judge that, un-
5 Contrary to our dissenting colleague, we do not find that the facts
presented in Woodland clearly dictate a different result here. This is
especially so, given the procedural history lent to this case by the Gen­
eral Counsel’s pleading and posit ion at the hearing.
der Woodland,6 the Respondent’s postimpasse posting of
its terms and conditions of employment on January 12
and 13 is not a basis for finding a violation under
McClatchy. Unlike in Woodland, of course, the Respon­
dent here has stipulated that it unilaterally granted wage
increases pursuant to its final pre-impasse contractual
wage proposal. The General Counsel, however, by fail­
ing to object when the judge stated that he was not going
to consider events after January 12 and 13, has clearly
acquiesced in the judge’s limiting of the scope of the
complaint to encompass only the Respondent’s January
12 and 13 posting of the proposal.
Implicit in the General Counsel’s exceptions is that he
did not know at the hearing that an actual grant of merit
pay was an essential element to plead and prove. How-
ever, the General Counsel did know at the hearing that
the judge had limited the scope of the litigation (and po­
tential legal liability) to the events of January 12 and 13.
Further, the General Counsel knew that the Respondent
was explicitly attempting to foreclose litigation of the
question whether the subsequent act of granting merit
wage increases violated the Act. Under these circum­
stances, it was incumbent on the General Counsel to
voice his opposition to the judge’s narrowing of the
complaint at the hearing, rather than waiting to do so
until after the issuance of the judge’s decision.7
Our colleague seeks to distinguish Woodland on the
basis that the employer there, unlike here, promised to
meet and confer with the union prior to implementing its
pay system. However, that difference relates to the issue
of whether a proposal is of the type found objectionable
6 The judge’s application of Woodland, despite its issuance after the
hearing in this case, comports with the well-established legal principle
that “a court is to apply the law in effect at the time it renders its deci­
sion, unless doing so would result in manifest injustice or there is statu­
tory direction or legislative history to the contrary.” Certain-Teed
Corp., 271 NLRB 76, 77 (1984), quoting Bradley v. Richmond School
Board , 416 U.S. 696, 711 (1974).
7 See Paul Mueller Co., 332 NLRB 1350 (2000), where the Board
reversed the judge on due process grounds. The judge had found a
violation on a theory effectively disclaimed by the General Counsel.
While there the General Counsel had made affirmative representations,
our due process concerns regarding the “parties’ understanding of the
scope of the complaint allegations” are the same. There, like here,
respondent’s counsel sought to clarify the scope of the complaint alle­
gation, and there, like here, the General Counsel’s action (there, by
affirmative statements; here, by silence) “reasonably led the Respon­
dent to believe that it would not have to defend” against certain con-
duct. There, we concluded that the General Counsel was “not entitled
to a ‘second bite of the apple’” through a remand, and here we conclude
the same.
See also Precision Products Group, 319 NLRB 640, 641 (1995),
where the Board reversed a hearing officer who had reassured the em­
ployer’s counsel that he was limiting the scope of the hearing, and
thereafter decided an issue which the employer “had good reason to
believe” would not be considered.
BAKERSFIELD CALIFORNIAN 299
in McClatchy, which issue goes to the extent to which a
proposal excludes the union from the process. It does
not relate to the issue of whether the posting of a merit
pay proposal is itself a violation.
ORDER
The recommended Order of the administrative law
judge is adopted and the complaint is dismissed.
MEMBER LIEBMAN, dissenting.
Contrary to the majority and the judge, I would find
that the Respondent violated Section 8(a)(5) and (1) of
the Act by implementing its wholly discretionary merit
pay plan on January 12 and 13, 1999. My disagreement
with my colleagues and the judge stems from my belief
that Woodland Clinic, 331 NLRB 735 (2000), did not
establish a per se rule that a McClatchy1 violation may
never accrue prior to an employer’s actual granting of
discretionary merit increases. In my view, the Board
may find in appropriate circumstances that an employer
has “implemented” a McClatchy-type merit pay pro­
posal, even if the employer has yet to actually grant any
increases. I would find that this is such a case.2
The Facts
The parties stipulated to the following facts. On De­
cember 1, 1997, the Respondent and the Union com­
menced negotiations for successor collective-bargaining
agreements covering two units of the Respondent’s em­
ployees: the packaging and distribution unit (P&D Unit)
and the composing room unit (composing unit). On No­
vember 20, 1998, the Respondent presented the Union
with “last, best, and final” contract offers for each unit.
The Union rejected those offers and the Respondent de­
clared impasse.
On January 12, 1999,3 the Respondent posted its final
contract proposal for the P&D unit and an accompanying
letter to the Union and the P&D employees. The letter
advised, “effective immediately, we will be implement­
ing the changes in working conditions referenced in the
posted documents.” On January 13, the Respondent
posted its final contract proposal for the Composing Unit
and an accompanying letter to the Union and the Com­
posing employees. This letter too advised, “effective
immediately, we will be implementing the changes in
working conditions referenced in the posted documents.”
1 McClatchy Newspapers, 321 NLRB 1386 (1996), enfd. 131 F.3d
1026 (D.C. Cir. 1997), cert. denied 524 U.S. 937 (1998).
2 Consequently, even if the General Counsel waived reliance on the
Respondent’s post -January 13 granting of merit increases (a finding
about which I have doubts), I would find the waiver immaterial in this
instance.
3 All dates hereinafter are 1999, unless stated otherwise.
Among the working conditions in each of the Respon­
dent’s final contract proposals was a merit wage increase
and bonus provision.4 The parties stipulated that, pursu­
ant to this provision, “the Respondent maintain[ed] full
discretion . . . . as to [the] time and amount of any [such]
payments.” The parties further stipulated that after Janu­
ary 13, the Respondent granted merit wage increases
and/or bonuses to various unit employees without bar-
gaining with the Union as to the timing or amount of
those payments.
The Judge’s Decision
As more fully described in the majority decision, the
judge found that he could not consider the Respondent’s
actual granting of discretionary merit wage increases
and/or bonuses after January 13. As a result, the judge
limited his decision to whether the “Respondent violated
the Act by posting the last, best, and final offer which
included a wholly discretionary merit and bonus wage
increase [provision].” As to this issue, the judge read
Woodland Clinic as holding that the “posting” of such a
provision “as part of the implementation of [a] last, best,
and final offer does not, itself, constitute a violation un­
der McClatchy.” Applying this reading of Woodland
Clinic, the judge found no violation in the Respondent’s
announcements on January 12 and 13, that, “effective
immediately, we will be implementing” the discretionary
merit wage increase and bonus provision.
Discussion
As stated, I do not read Woodland Clinic as establis h­
ing a per se rule that implementation of a McClatchy­
type proposal may never occur prior to the employer’s
actual granting of merit pay increases. As the Board
explained in Woodland Clinic, the vice in a McClatchy
situation is the employer’s “‘exclusion of the [union] at
4 This provision, nearly identical in both proposals, stated:
The wages referred to above are minimum only. The Employer shall
have the right to grant wage increases and bonuses based on job per­
formance reviews. on an annual basis.
Any employee who receives a job performance review may, within
two weeks, appeal the evaluation by:
(i) The employee shall first take his/her appeal to the Manager.
(ii) Should the Manager fail to resolve the issue, the employee may
then appeal to the Director.
(iii) An appeal may be made for (i) and (ii) to H.R. H.O.D.
(iv) An employee’s Job Performance Rating and the applicable
wage rate increase or bonus will be given to the Union.
(iv) (v) The Union representative may participate with the employee
in the appeal process.
Contrary to the Respondent’s suggestion, this provision proposed mate-
rial changes in the parties’ prior agreement.
300 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the point of its implementation of the merit pay plan from
any meaningful bargaining as to the procedures and crite­
ria governing the merit pay plan[.]’” 331 NLRB 735,
740 at fn. 12 (quoting McClatchy Newspapers, 321
NLRB 1386, 1391 (1996), enfd. 131 F.3d 1026 (D.C.
Cir. 1997), cert. denied 524 U.S. 937 (1998)). To be
sure, the Board in Woodland Clinic fixed the point of
implementation in that case at the employer’s actual
granting of merit increases. Id. But that result clearly
was dictated by the facts presented in Woodland Clinic.
The employer’s proposal in that case provided in pert i­
nent part:
The [Respondent] shall have the right to develop and
implement a pay-for-performance system of its own
choosing . . . . Prior to implementing such pay-for-
performance system the [Respondent] shall notify the
Union of the proposed system and, upon request, meet
and confer with the Union prior to implementation no
later than three (3) weeks prior to the proposed imple­
mentation date.
331 NLRB at 739 Obviously, given this language, it
would have been premature for the Board to find a re­
fusal-to-bargain violation based on the employer’s post-
impasse declaration that it was implementing its merit
pay proposal.
This case presents a significantly different situation.
The Respondent’s merit pay proposal did not mandate, or
even contemplate, further bargaining with the Union
prior to the actual granting of merit increases. Indeed,
the Respondent’s proposal immediately authorized it to
exercise unfettered managerial discretion over such in-
creases. Considering these facts, I would find that the
Respondent “implemented” its proposal for purposes of
McClatchy when it unequivocally declared on January 12
and 13, that its proposal was being implemented, “effec­
tive immediately.” I see no sound reason to require a
union to delay the filing of an unfair labor practice
charge in such circumstances.
I would therefore find that, by implementing its merit
pay plan on January 12 and 13, the Respondent violated
Section 8(a)(5) and (1) of the Act. I am mindful that the
Board may not “brandish McClatchy without any real
explanation” as to why the implementation of a particular
merit pay proposal was unlawful. Detroit Typographical
Union No. 18 v. NLRB, 216 F.3d 109, 118 (D.C. Cir.
2000). Here, the Respondent’s proposal virtually spoke
for itself. As the Respondent admitted, the proposal
granted it “full discretion . . . . as to [the] time and
amount of any” merit increases. The proposal, more-
over, contained no other definable procedures or criteria.
The only role for the Union under the proposal was as an
after-the-fact participant in an employee’s appeal, if any,
of his performance review (the purported basis for the
Respondent’s wholly discretionary merit pay decisions).
Even then, however, the Respondent remained free to
ignore the Union’s input. See McClatchy, supra at 1391.
In these circumstances, I would find that the Respon­
dent’s merit pay proposal excluded the Union “at the
point of its implementation . . . . from any meaningful
bargaining as to the procedures and criteria governing the
merit pay plan.” McClatchy, supra at 1391. I would find
therefore that the Respondent’s implementation of its
proposal on January 12 and 13, in the P&D and Compos­
ing Units, respectively, was unlawful.
Brian D. Gee, Atty., for the General Counsel.

David S. Durham, Atty., Littler Mendelson, of San Francisco,

California, for Respondent .
Richard Rosenblatt, Atty., of Englewood, Colorado, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
FREDERICK C. HERZOG, Administrative Law Judge. This
case was heard by me in Bakersfield, California, on January 31,
2000, and is based on two charges filed on July 2, 1999, by
Bakersfield Typographical Union No. 439 (Union), alleging
generally that The Bakersfield Californian (Respondent) vio­
lated Section 8(a)(5) of the National Labor Relations Act, as
amended (29 U.S.C. § 151 et seq.) (the Act). On September 30,
1999, the Regional Director for Region 31 of the National La­
bor Relations Board (the Board) issued an order consolidating
the two complaints and issued a consolidated complaint and
notice of hearing alleging violations of Section 8(a)(5) of the
Act. Respondent thereafter filed a timely answer to the allega­
tions contained within the complaint, denying all wrongdoing.
All parties appeared at the hearing, and were given full op­
portunity to participate, to introduce relevant evidence, to ex­
amine and cross-examine witnesses, to argue orally, and file
briefs. Based on the record, my consideration of the briefs filed
by counsel for the General Counsel, counsel for Respondent,
and counsel for the Union, and my observation of the demeanor
of the witnesses, I make the following
FINDINGS OF FACT
I. JURISDICTION
The complaint alleges, the answer admits, and I find that Re­
spondent is a California Corporation, with its principal place of
business in Bakersfield, California, where it is engaged in the
business of publishing a daily newspaper; and that it derives
gross annual revenues in excess of $200,000 and that it annu­
ally purchases and receives at its Bakersfield, California facility
goods valued in excess of $50,000 directly from points outside
the State of California.
Accordingly, I find that Respondent is an employer engaged
in commerce within the meaning of Section 2(2), (6), and (7) of
the Act.
BAKERSFIELD CALIFORNIAN 301
II. THE LABOR ORGANIZATI ON
The complaint alleges, the answer admits, and I find that the
Union is now, and at all times material has been, a labor or­
ganization within the meaning of Section 2(5) of the Act.
III. THE ALLEGED UNFAIR L ABOR PRACTICES
A. Relevant Facts
The Union represents employees of the Respondent who
work in the mailroom (packing and distributing unit) and the
composing room. On September 30, 1997, the separate collec­
tive-bargaining agreements covering these employees expired.
Negotiations for a new contract began on December 1, 1997,
and the parties met on 12 separate occasions.
In regards to pay, Respondent proposed to maintain its merit
pay plan and offered no across the board pay increases. The
Union made no proposals to change the operative language to
the merit pay but actively sought an across the board increase in
wages.
On November 20, 1998, Respondent made a last, best, and
final offer to the Union which was rejected and impasse was
declared. On January 12 and 13, 1999, Respondent posted their
last, best, and final offer which included the merit wage and
bonus language which had been presented by Respondent dur­
ing negotiations. The language for the composing unit contract
was as follows and included the indicated modification marks
Section 4. The wages to above are minimum only. The Em­
ployer shall have the right to grant wage increases and bo­
nuses based on job performance reviews on an annual basis.
Any employee who receives a job performance review may,
within two weeks, appeal the evaluation by:
(i) The Employee shall first take his/her appeal to the Man­

ager.

(ii) Should the Manager fail to resolve the issue, the employer

may then appeal to the Director.

(iii) An appeal may be made for (i) or (ii) to H.R. H.O.D.

(iv) An employee’s Job Performance Rating and the applica­

ble wage rate increase or bonus will be given to the Union.

(v) The Union representative may participate with the em­

ployee in the appeal process.

Section 5. The employer shall provide a copy of applicable
Changes of Status to the union. Keep a copy of payroll for
the use of the Union
The language of the Packing and Distributing unit contract
was the same except that the phrases “on an annual basis” and
“applicable wage rate increase or bonus will be given to the
Union” were not struck from section four.
Since January 1999, Respondent has granted merit bonuses
to certain employees in the composing unit and merit bonuses
and merit wage increases to certain employees in the packing
and distributing unit.
B. Analysis and Conclusion
At paragraph 10, the complaint alleges:
(a) On or about January 12, 1999, Respondent acting through

Koers, implemented its last, best and final offer for the P. + D.

Unit employees.

(b) Respondent’s last, best and final offer included a wholly

discretionary merit wage and bonus provision.”

At paragraph 11, the complaint makes the same allegation
regarding the composing unit employees on January 13, 1999.
At the hearing, it was stipulated that on January 12, 1999,
and January 13, 1999, Respondent posted a letter and working
conditions. These working conditions were the last, best, and
final offer from Respondent. Counsel for the General Counsel
argues that under McClatchy Newspaper, 321 NLRB 1386
(1996), Respondent cannot implement a discretionary merit
wage and bonus plan without bargaining with the Union over
the timing and amounts and that Respondent therefore violated
Section 8(a)(5) of the Act.
The judicially created “implementation at impasse” doctrine
allows an employer to implement its last, best, and final offer
after the parties reach a bona fide impasse in negotiations.
NLRB v. Katz , 369 U.S. 736 (1962); see also NLRB v. Cromp­
ton-Highland Mills, Inc., 337 U.S. 217 (1949). McClatchy
recognized “a narrow exception to the implementation-upon-
impasse rules, at least in the case of wage proposals, such as the
one at issue here, that confer on an employer broad discretion­
ary powers that necessarily entail recurring unilateral decisions
regarding changes in the employees’ rates of pay.” 321 NLRB
at 1388. Respondent’s proposal is similar to McClatchy in that
“Respondent retained ultimate discretion over the timing and
amount of individual merit increases.”1 Id. at 1386.
However, in McClatchy, implementation was a unilateral
change in wages; the employer had exercised its discretion by
actually granting the change in wages. During preliminary
matters at the hearing, Respondent admitted that it, too, granted
merit wage increases and bonuses to certain individuals within
the packaging and distribution unit and to individuals within the
composing unit throughout 1999, but stated that this was not
relevant to any of the alleged unfair labor practices. Respon­
dent stated that the complaint and stipulations at hearing con­
cerned the posting of conditions on January 12, 1999, and Janu­
ary 13, 1999 only.
Respondent was attempting to clarify the allegations in the
complaint. The General Counsel could have entered into the
colloquy between myself and Respondent to offer comment, to
interpret the complaint, or to amend the complaint, which is his
right. The General Counsel, instead, remained silent. This left
the complaint unamended. Based on this colloquy, and Coun­
sel for the General Counsel’s seeming agreement with the
statements made therein, Respondent was therefore assured by
me that if there was not a violation to be found in the posting of
the discretionary language in the last, best, and final offer, no
violation would be found. There was no objection. With this
assurance, any factual information or legal arguments that the
1 With the exception of the inclusion of the “on an annual basis” lan­
guage that was not struck from the packing and distributing unit con-
tract.
302 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
parties may have had regarding Respondent’s granting of merit
wages and bonuses was not heard.
A (judge) is allowed to pass on an issue not alleged in the
complaint if it is closely related to a subject matter in the com­
plaint and is fully litigated. Monroe Feed Store, 112 NLRB
1336, 1337 (1955); see also Hi-Tech Cable Corp., 318 NLRB
280 (1995); Meisner Electronic, 316 NLRB 597 (1995); Per­
gament United Sales, 296 NLRB 333 (1989). Fairness, how-
ever, must be considered in the circumstances of the case.
Facet Enterprises v. NLRB, 907 F.2d 963, 972 (10th Cir. 1990);
Maintenance Service Corp., 275 NLRB 1422, 1425–1426
(1985).
Here, Respondent took great care to clarify exactly what the
factual allegations were. Notably, the Respondent voiced its
concerns about the complaint during the preliminary matters
portion of the hearing. That is, prior to putting on its case. The
General Counsel had full and fair opportunity to correct the
Respondent’s understanding of the complaint prior to my hear­
ing any evidence at the hearing but did not.2 Therefore, the
issue regarding Respondent’s actual granting of merit wages
and bonuses was not fully litigated.
2 It is noted that admissions by a Respondent witness have been con­
sidered fully lit igated issues. Pergament United Sales Inc., 296 NLRB
333, 334 (1989); Timken Co., 236 NLRB 757, 758 (1978). When con­
sidering the fairness argument, I find these cases are distinguishable
from the present case in two respects. First, the admission occurred
during the testimonial phase of the hearing, not while attending to
preliminary matters. Second, the admission in this case was a direct
attempt by Respondent to clarify the matters alleged in the complaint.
Accordingly, the question is whether or not Respondent vio­
lated the Act by posting the last, best, and final offer which
included a wholly discretionary merit and bonus wage increase.
In its interpretation of McClatchy, in Woodland Clinic, 331
NLRB 735 (2000), the Board found that the mere posting of a
wholly discretionary merit wage program as part of the imple­
mentation of the last, best, and final offer does not, itself, con­
stitute a violation under McClatchy. Following this precedent, I
therefore find no violation in Respondent’s posting of their last,
best, and final offer which included a wholly discretionary
merit wage and bonus program.
CONCLUSIONS OF LAW
1. By posting its last, best, and final offer, Respondent has
not engaged in unfair labor practices affecting commerce
within the meaning of Section 8(a)(5) and Section 2(6) and (7)
of the Act.
2. By posting its last, best, and final offer, Respondent has
not violated Section 8(a)(5) of the Act.
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended3
ORDER
The complaint should be, and is, dismissed in its entirety.
3 If no exceptions are filed as provided by Sec. 102.46 of the Board’s
Rules and Regulations, the findings, conclusions, and recommended
Order shall, as provided in Sec. 102.48 of the Rules, be adopted by the
Board and all objections to them shall be deemed waived for all pur­
poses.