Monterey Newspapers

National Labor Relations Board - Board Decisions

Aug 9, 2001

334 N.L.R.B. 1019 (N.L.R.B. 2001)

MONTEREY NEWSPAPERS 1019
Monterey Newspapers, Inc., a wholly owned subsidi-
ary of Knight-Ridder, Inc. and The San Jose
Newspaper Guild Local 98, chartered by The
Newspaper Guild, AFL–CIO, CLC. Case 32–
CA–16323
August 9, 2001
DECISION AND ORDER
BY CHAIRMAN HURTGEN AND MEMBERS
LIEBMAN
AND TRUESDALE
On September 30, 1998, Administrative Law Judge
William L. Schmidt issued the attached decision. The
Respondent filed exceptions and a supporting brief, the
The General Counsel and the Union each filed an an-
swering brief, and the Respondent filed reply briefs to
both answering briefs. Additionally, the General Counsel
and the Union each filed limited exceptions and a sup-
porting brief, and the Respondent filed answering briefs.
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 only
to the extent consistent with this Decision and Order.
The judge found that the Respondent violated Section
8(a)(5) and (1) of the Act by failing to notify the Union
and provide it with an opportunity to bargain concerning
the rates of pay to be offered applicants for employment.
We reverse the judge and dismiss the complaint.1
The Respondent acquired Monterey Newspapers, Inc.
(MNI), publisher of the Monterey County Herald news-
paper, from E. W. Scripps on August 24, 1997. During
Scripps’ ownership of MNI, MNI’s employees were rep-
resented by the Union and, at the time of the purchase,
were covered by a collective-bargaining agreement effec-
tive through June 30, 1999. The Respondent hired a vast
majority of the unit employees and continued publishing
the Herald without interruption. On August 28, 1997, the
Respondent recognized the Union as the exclusive bar-
gaining representative of employees in “an appropriate
unit.” The judge found that the Respondent was a succes-
sor employer obligated to recognize the Union as the
exclusive bargaining representative of the employees in
the historical unit described in the collective-bargaining
agreement.2 There are no exceptions to this finding.

1 The judge also dismissed a complaint allegation concerning the
Respondent’s failure to pay overtime to certain employees. No excep-
tions were filed regarding the judge’s disposition of this allegation.
2 When a new employer acquires a business, makes no change in its
essential nature, and a majority of its employees worked previously for
the predecessor, the new employer has a duty to recognize and bargain
with the union that represented its predecessor’s employees. Fall River
Dyeing Corp. v. NLRB, 482 U.S. 27, 36–41 (1987); NLRB v. Burns
Security Services, 406 U.S. 272, 278–281 (1972).
Prior to acquiring MNI, the Respondent established, as
part of its initial terms and conditions of employment, a
separate pay system applicable to new employees hired
after its acquisition of MNI. Under this system, the Re-
spondent created a pay band for each job classification.
The pay bands were for use in determining wage rates
offered to job applicants. Thus, the Respondent would
offer a job applicant a starting wage rate within the pay
band for the particular job classification for which the
applicant was to be hired. The Respondent would decide
on the specific rate within the pay band based on the ap-
plicant’s qualifications and the local market conditions
for such jobs. The Respondent might raise its initial offer
but would keep the offer within the pay band for the job
classification.
This new pay system was applicable only to new em-
ployees hired after the Respondent’s acquisition of MNI.
The former Scripps employees whom the Respondent
retained were paid the same pay rates that they had pre-
viously earned, which had been determined under the
Union’s collective-bargaining agreement with Scripps.
The judge found that the Respondent lawfully estab-
lished its pay system for new hires as part and parcel of
its initial terms and conditions of employment under the
Burns3 doctrine. In Burns, the Supreme Court held that
“a successor employer is ordinarily free to set initial
terms on which it will hire employees of a predecessor.”4
The judge, nevertheless, found that the Respondent vio-
lated Section 8(a)(5) and (1) of the Act by failing to pro-
vide the Union with prior notice and an opportunity to
bargain concerning the rate of pay it proposed in each job
offer it made to each prospective new employee.
In finding this violation, the judge reasoned that the
Respondent had effectively created a dual-compensation
system, i.e., one compensation system for former Scripps
employees and a separate compensation system for new
hires, and that all aspects of the dual compensation sys-
tem directly and vitally affected the unit employees. The
judge explained that a specific pay offer to an applicant
occurred immediately before the applicant’s transition to
unit employee status, that the pay rate an applicant was
offered was derived from the pay bands, a mandatory
subject of bargaining, and that hiring employees at rates
different from those paid comparable former Scripps
employees was likely to create employee unrest and
make contract negotiations more lengthy and difficult.
Additionally, the judge agreed with the General Coun-

3 NLRB v. Burns Security Services, supra.
4 Id. at 294.
334 NLRB No. 128
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1020
sel’s argument that the discretion exercised by the
Respondent’s local managers in determining applicant
pay rates was analogous to decisions frequently made in
merit pay situations.
We find that the judge’s analysis fails to accord the
Respondent its proper rights as a lawful Burns successor.
While the Court in Burns agreed with the Board that a
successor employer was obligated to recognize and bar-
gain with the union that had represented the predeces-
sor’s employees, the Court found that the successor was
not bound by its predecessor’s collective-bargaining
agreement with the union. The Court explained:

Holding either the union or the new employer bound to
the substantive terms of an old collective-bargaining
contract may result in serious inequities. A potential
employer may be willing to take over a moribund busi-
ness only if he can make changes in corporate structure,
composition of the labor force, work location, task as-
signment, and the nature of supervision. Saddling such
an employer with the terms and conditions of employ-
ment contained in the old collective-bargaining contract
may make these changes impossible and may discour-
age and inhibit the transfer of capital. . . . The congres-
sional policy manifest in the Act is to enable the parties
to negotiate for any protection either deems appropri-
ate, but to allow the balance of bargaining advantage to
be set by economic power realities.5

The Court also made clear that, in setting initial terms
and conditions of employment that differed from those
maintained by the predecessor employer under its collec-
tive-bargaining agreement, the successor was not making
an unlawful unilateral change in conditions of employ-
ment. The Court stated:

It is difficult to understand how [the successor] could
be said to have changed unilaterally any pre-existing
terms or conditions of employment without bargaining
when it had no previous relationship whatsoever to the
bargaining unit and . . . no outstanding terms and condi-
tions of employment from which a change could be in-
ferred.6

The court thus found that “a successor employer is or-
dinarily free to set initial terms on which it will hire the
employees of a predecessor.”7

5 Id. at 287–288.
6 Id. at 294.
7 Ibid. An exception to this rule, not applicable here, occurs in “in-
stances in which it is perfectly clear that the new employer plans to
retain all of the employees in the unit and in which it will be appropri-
ate to have him initially consult with the employees’ bargaining repre-
In finding a violation in the present case, the judge re-
lied heavily on his finding that the wage rates that the
Respondent offered to applicants “vitally affected” cur-
rent unit employees. We agree with the judge that the
wage rates that job applicants were offered (and, thus,
that newly hired employees were paid) are mandatory
subjects of bargaining. That finding, however, is not suf-
ficient to support the judge’s conclusion that the Respon-
dent’s failure to provide the Union with notice and an
opportunity to bargain concerning the rates of pay to be
offered job applicants under the Respondent’s new pay
system violated Section 8(a)(5) and (1) of the Act. In-
deed, as noted above, the Supreme Court held in Burns
that a successor employer, such as the Respondent, is
ordinarily free to set initial terms on mandatory subjects
of bargaining, including such subjects as wages. Thus,
the fact that wage rates to be offered job applicants were
mandatory subjects of bargaining does not take them
outside of Burns.
Additionally, contrary to the judge’s apparent reason-
ing, the Respondent did not incur a bargaining obligation
merely because, by establishing a new pay system for
new employees, the Respondent created what could be
characterized as a dual compensation system.8 Dual
compensation systems are not excepted from the Burns
rule allowing successor employers to set initial employ-
ment terms.9
The Respondent, as the judge initially found,10 law-
fully established its pay system for new hires as part and
parcel of its initial terms and conditions of employment
under the Burns doctrine. The pay system, as described
above, set a pay band for each job classification. Under
the pay system, the Respondent was to determine a start-
ing wage rate within the appropriate pay band to offer
each new job applicant whom the Respondent wished to
hire. The Respondent’s setting of a starting wage in this

sentative before he fixes terms.” Id. at 294–295. See Spruce Up Corp.,
209 NLRB 194 (1974), enfd. 529 F.2d 516 (4th Cir. 1975).
8 The General Counsel did not contend at hearing or in his brief to
the judge that the Respondent was required to bargain merely because it
established a dual compensation system. Indeed, in his brief to the
judge, the General Counsel expressly stated: “If prior to August 24,
[1997] Respondent had established a pay system for new hires that set
forth a specific wage rate for persons hired into each bargaining unit
position, then Respondent would not be obligated to bargain with the
Union over the pay rate of each new hire.” (Emphasis added.)
9 Indeed, there is nothing particularly unusual about dual, or two-
tiered, compensation systems. Collective-bargaining agreements some-
times incorporate such systems of compensation. See, e.g., Arrow Uni-
form Rental, 300 NLRB 246, 247 (1990) (older two-tiered wage struc-
ture “grandfathered” by more recent contracts); Johnson-Bateman Co.,
295 NLRB 180, 192 (1989) (agreement set forth two-tiered wage struc-
ture with different hourly rates depending on whether employee was
hired before or after Aug. 1, 1986).
10 See sec. II,A,2 of the judge’s decision.
MONTEREY NEWSPAPERS 1021
manner was an integral part of the pay system. Thus, to
find, as the judge did, that the Respondent, as a lawful
Burns successor, could establish the pay system for new
hires as part of its initial terms of employment but could
not offer a starting wage to any job applicant under that
system without bargaining with the Union, deprived the
Respondent of the rights to which it was entitled under
Burns.
The Respondent’s discretion under its pay system for
new hires was tightly circumscribed. It permitted the
Respondent to set pay rates only within predetermined
pay bands. Additionally, the pay system applied only to
new outside hires, not to Scripps employees whom the
Respondent retained. Finally, the pay system concerned
only the initial pay rates of the new hires. Once the new
hires became part of the Respondent’s work force, any
subsequent raises or changes in their compensation
would be matters on which the Respondent would be
required to bargain with the Union. Moreover, wage rates
established in any collective-bargaining agreement nego-
tiated between the Respondent and the Union would pre-
sumably apply to all employees, including new outside
hires.
Unlike the judge, we do not find the merit pay cases
cited by the General Counsel analogous to the circum-
stances here. In NLRB v. Katz, 369 U.S. 736 (1962), the
employer implemented merit increases while contract
negotiations were ongoing. In Oneita Knitting Mills, 205
NLRB 500 (1973), a newly organized employer granted
discretionary merit increases assertedly consistent with
its past practice. And, in Colorado-Ute Electric Assn.,
295 NLRB 607 (1989), enf. denied 939 F.2d 1392 (10th
Cir. 1991), the employer implemented a merit pay pro-
gram giving it “virtually unlimited discretion in deter-
mining the timing and amounts of merit increases.” 295
NLRB at 609. In each instance, the Board found the em-
ployer’s implementation of merit pay to violate Section
8(a)(5) of the Act.
The present case concerns a successor employer’s set-
ting of its initial terms of employment under which it
agrees to take over operation of the enterprise from the
predecessor. As provided in Burns, a successor employer
has a right to establish unilaterally its own initial terms of
employment. Thus, the setting of initial employment
terms by a lawful Burns successor stands on different
footing than decisions made by an incumbent em-
ployer.11

11 Our dissenting colleague disagrees with us and finds appropriate
the General Counsel’s analogy between this case and cases in which
incumbent employers must bargain over merit pay increases to employ-
ees. In our view, however, there is a substantial difference between a
lawful successor employer’s determining, within finite pay bands,
Accordingly, we find that the Respondent did not vio-
late Section 8(a)(5) and (1) of the Act by failing to notify
the Union and provide it with an opportunity to bargain
concerning the rates of pay to be offered applicants for
employment. Therefore, we shall dismiss the complaint.
ORDER
The complaint is dismissed.

MEMBER LIEBMAN, dissenting.
Contrary to my colleagues, I would find, in agreement
with the judge, that the Respondent violated Section
8(a)(5) and (1) of the Act by failing to notify the Union
and provide it with an opportunity to bargain about the
rates of pay to be offered new applicants for employ-
ment.
The facts are undisputed. The Respondent acquired
Monterey Newspapers, Inc. (MNI) from E. W. Scripps
on August 24, 1997. On August 28, 1997, the Respon-
dent recognized the Union as the exclusive bargaining
representative of the unit employees. The judge found
that the Respondent is a successor employer obligated to
recognize and bargain with the Union.
Before it acquired MNI, the Respondent established, as
part of its initial terms and conditions of employment, a
separate pay system applicable only to employees hired
after the acquisition of MNI. Under the new pay system,
the Respondent established a pay band for each job clas-
sification and, within those pay bands, the Respondent
unilaterally determined the wage rate to be offered each
job applicant based on the applicant’s qualifications and
the local market conditions. The Respondent did not
provide the Union with prior notice and an opportunity to
bargain concerning the pay rates to be offered each ap-
plicant.
The judge found that the Respondent lawfully estab-
lished its pay system for new hires as part of its initial
terms and conditions of employment under NLRB v.
Burns Security Services, 406 U.S. 272 (1972). He also
found, however, that the Respondent nevertheless vio-

initial wage rates to offer applicants and an incumbent employer’s
setting wholly discretionary merit increases for current employees.
Finding these two disparate situations analogous ignores the unique
status of successors under Burns and runs contrary to the Supreme
Court’s intent in Burns, quoted above, to permit successor employers to
make changes that they may deem necessary to revitalize a predeces-
sor’s business. In sum, where a union becomes the representative of a
unit of employees, the employer must bargain about all terms and con-
ditions of employment. However, in a successorship situation (where
the union continues to be the representative), the Supreme Court ex-
pressly gave the new employer a unilateral right to set initial terms and
conditions, even if they differed from those prevailing under the prede-
cessor. There is nothing in Burns to suggest that such initial terms
cannot include flexibility, i.e., discretion within bounds. That is what
occurred here.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1022
lated Section 8(a)(5) and (1) of the Act by failing to pro-
vide the Union with the opportunity to bargain concern-
ing each rate of pay it proposed to offer each applicant. I
agree with the judge on both points.
Initially, I find that the wage rates offered by the Re-
spondent to job applicants are mandatory subjects of bar-
gaining because they concern the wages that newly hired
unit employees are to be paid. My colleagues agree.
In finding no obligation to bargain about the initial pay
rates, however, my colleagues reason that even though
the applicants’ initial pay rates are mandatory subjects of
bargaining, the Respondent may unilaterally set those
rates because, under Burns, a successor employer is ordi-
narily free to set initial terms even on mandatory bar-
gaining subjects. My colleagues conclude that not to
allow the Respondent unilaterally to set the rates under
the pay band system would deprive the Respondent of its
Burns right to set initial terms. I disagree.
The judge correctly found that because the pay band
system provided for considerable discretion in determin-
ing the amounts to be paid each applicant, the Respon-
dent must offer to bargain with the Union over those
amounts. The judge analogized the discretion exercised
by the Respondent under its pay band system to the dis-
cretion that employers exercise in determining merit pay
increases under an existing merit pay system after a un-
ion becomes the bargaining representative of a group of
employees. In such cases,1 the Board has found that an
employer is entitled to continue its merit pay system, but
it must give the union notice and an opportunity to bar-
gain over the discretionary aspects of the system, i.e., the
timing and amounts of each merit pay increase.
My colleagues disagree with this analogy, finding that
“the setting of initial terms by a lawful Burns successor
stands on different footing than decisions made by an
incumbent employer.” I find the analogy apt. Just as the
incumbent employer may continue its merit pay system,
the successor may establish the pay band system as an
initial term. In both cases, however, they must bargain
over the amounts actually to be paid. As the General
Counsel argues in his answering brief, in “both the merit
pay and pay for new hires situations, the employer has a
pre-existing term and condition of employment which it
wants to continue after its obligation to bargain with the
union arises; and in both situations the employer exer-
cises considerable discretion in determining the amount

1 Although my colleagues characterize the Respondent’s discretion
under its pay band system as “tightly circumscribed” because the Re-
spondent was permitted to set pay rates only within predetermined pay
bands, I find that even this type of limited discretion is sufficient to
trigger the Respondent’s obligation to notify and bargain with the Un-
ion over the exercise of that discretion.
to be paid each employee. Since the Board has deter-
mined that the employer’s obligation to bargain extends
to the discretionary aspect of the merit pay determina-
tions, it follows that Respondent’s obligation to bargain
with the Union extends to the substantial discretion it
exercises in determining the wage rate of each new bar-
gaining unit employee.” I agree with the General Coun-
sel.2
For these reasons, I find, in agreement with the judge,
that the Respondent violated Section 8(a)(5) and (1) by
failing to notify the Union and provide it with an oppor-
tunity to bargain concerning the rates of pay to be offered
to new job applicants.

Gary M. Connaughton, Atty., for the Acting General Counsel.
Derek Woodhouse and Daniel J. Muller, Attys. (Littler, Mendelson), of San Jose, California, for
the Respondent.
Eugene Miller, Atty., of Seaside, California, for the Charging Party.
DECISION
STATEMENT OF THE CASE
WILLIAM L. SCHMIDT, Administrative Law Judge. I heard this case at Monterey, Cali-
fornia, on August 12, 1998. The San Jose Newspaper Guild Local 98, chartered by The News-
paper Guild, AFL–CIO, CLC (Union or Guild) filed the underlying charge on September 3,
1997,1 against Monterey Newspapers, Inc., a wholly owned subsidiary of Knight-Ridder, Inc.
(Respondent or MNI and Knight-Ridder). The Regional Director for NLRB Region 32 issued
the complaint and notice of hearing on January 30, 1998. The complaint alleges, in essence,
that Respondent violated Section 8(a)(1) and (5) of the National Labor Relations Act (Act) by
implementing new wage rates for newly hired employees and by discontinuing the payment of
overtime to its district managers and single copy manager without providing the Guild with
prior notice and an opportunity to bargain concerning these matters. Respondent filed a timely
answer denying that it engaged in the unfair labor practices alleged and interposing certain
affirmative defenses.
The case presents the following two issues for resolution: (1) Does Respondent have a duty
to notify the Guild and provide it with an opportunity to bargain about the specific pay rate it
proposes to offer to applicants for employment in unit positions; and (2) Did Respondent have a
duty to bargain with the Guild before designating its district manager and single copy manager
jobs as an exempt positions under the Fair Labor Standards Act.
On the entire record, including my observation of the demeanor of the witnesses, and after
considering the briefs filed by the Acting The General Counsel (General Counsel), the Guild,
and the Respondent, I have concluded that Respondent violated the Act as to the matter of pay
rates for applicants but that it did not violate the Act as to other issue based on the following
FINDINGS OF FACT
I. JURISDICTION
Respondent admits that it is a Colorado corporation with an office and place of business in
Monterey, California, where it is engaged in the publication of a newspaper of general circula-
tion. Respondent further admits that since August 24, 1997, when it commenced operations, it
has received gross revenues in excess of $200,000 and that its direct inflow exceeded $5000.
2 Although my colleagues characterize the Respondent’s discretion
under its pay band system as “tightly circumscribed” because the Re-
spondent was permitted to set pay rates only within predetermined pay
bands, I find that even this type of limited discretion is sufficient to
trigger the Respondent’s obligation to notify and bargain with the Un-
ion over the exercise of that discretion.
1 All dates refer to the 1997 calendar year unless otherwise indi-
cated.
MONTEREY NEWSPAPERS 1023
During the same period, Respondent subscribed to interstate news services, published nation-
ally syndicated features, and advertised nationally sold products. Therefore, I find that Re-
spondent meets the Board’s jurisdictional standards and that it would effectuate the purposes of
the Act for the Board to exercise its statutory jurisdiction to resolve this labor dispute. Respon-
dent also admits, and I find, that the Guild is a labor organization within the meaning of Section
2(5) of the Act.
II. THE ALLEGED UNFAIR LABOR PRACTICES
A. Relevant Facts
1. Background
MNI publishes the Monterey County Herald (Herald), a general circulation daily newspa-
per serving Monterey County, California, and the surrounding area. Since approximately the
mid-1970s, the Guild has represented MNI’s employees and negotiated a series of successive
collective-bargaining agreements, the most recent being effective by its terms from January 1,
1996, through June 30, 1999. On August 24, Knight-Ridder acquired MNI from E. W. Scripps
(Scripps), hired a vast majority of the unit employees, and continued publishing the Herald
without interruption. Although Knight-Ridder declined to adopt the Guild’s collective-
bargaining agreement, it employed the unit employees at the same rate of pay they earned under
the Scripps ownership, in effect, the rates of pay specified in the Scripps-Guild contract.
By a letter dated August 28, Respondent’s counsel informed the Guild that Respondent ac-
knowledged “that you represent a majority of the employees in an appropriate unit.” The letter
goes on to recognize the Guild as the exclusive bargaining representative “in an appropriate
bargaining unit.” On it’s face, the unit described in the August 28 recognition letter varies
somewhat from the historical unit as described in the most recent collective agreement. How-
ever, by the time of the hearing, the parties had engaged in negotiations for approximately 11
months but had not yet reached agreement on the terms of a new collective-bargaining agree-
ment.
In his complaint, the General Counsel alleged and the answer admits that Respondent pur-
chased the MNI’s assets from Scripps and thereafter continued to operate MNI from the same
location, providing essentially the same service to the same customers, and has as a majority of
its employees, individuals who were previously employees of Scripps. Despite that admission,
Respondent’s answer denies that it has continued the employing entity and is a successor of
Scripps. In addition, the General Counsel alleged the historical contractual unit as the current
appropriate unit. At the hearing, The General Counsel introduced the most recent collective-
bargaining agreement. On the basis of the unit described therein, I find that the unit alleged in
the complaint accurately describes the historical unit. Nevertheless, Respondent’s answer
denied that the historical unit was appropriate even though it admits that Scripps had recog-
nized the Guild as the exclusive representative for that unit.
In his brief, the General Counsel argues that in successorship situations such as this, the his-
torical unit is the appropriate unit unless Respondent proved the that unit was repugnant to the
Act. Respondent made no attempt to do so here. Moreover, Respondent’s most fundamental
argument in this case is that on the basis of the Burns successorship doctrine,2 it had the right
to establish the initial terms and conditions of employment. In addition, no evidence was
adduced that the Guild demonstrated either through a recent election or a showing of current
authorization cards that it represented a majority of the employees in the more limited unit
described in the August 28 recognition letter. Absent some legal obligation, even that limited
recognition of the Guild would be unlawful. Based on Respondent’s admission that it pur-
chased the MNI’s assets, continued its operation serving the same customers with essentially
the same service from the same location employing a majority of the employees formerly
employed by Scripps, I find Respondent to be a successor employer obliged to recognize the
Guild as the exclusive representative in the historical unit. Furthermore, based on its arguments
in this case, I find that Respondent has implicitly admitted that it is a successor employer. In the
absence of evidence that the historical unit is repugnant to the Act, I find it to be the appropriate
unit. Trident Seafoods, Inc., 318 NLRB 738 (1995).

2 NLRB v. Burns Security Services, 406 NLRB 272 (1972).
Before this acquisition, the Knight-Ridder organization sent several managers and special-
ists to Monterey, in effect, to survey MNI’s method of operation under Scripps ownership, to
make operational changes compatible with operations in the Knight-Ridder organization, and to
interview job applicants to staff MNI following its acquisition. Two compensation changes
applicable to unit employees are pertinent to this case. The first concerns the compensation
system Knight-Ridder established at MNI for new employees hired after its initial staffing from
the ranks of its predecessor. The second concerns the timing of a change made in the job
descriptions of its district managers and its single copy sales manager that precluded their
eligibility for overtime pay that they received under the Scripps ownership.
2. The new hire issue
As noted, Knight-Ridder hired a large majority of the former Scripps employees at the same
pay rate they previously earned. Therefore, the pay rates for the former Scripps employees are
rooted in the last Guild collective-bargaining agreement with MNI under Scripps ownership. It
is undisputed that Knight-Ridder established a separate pay system in the pre-acquisition period
applicable to new employees hired after it acquired MNI. Although neither the General Coun-
sel nor the Guild would concede as much at the hearing, I am satisfied that the evidence shows
conclusively that Knight-Ridder established this separate pay system for new hires at MNI as a
part and parcel of its initial terms and conditions of employment permitted under the Burns
doctrine.
Under the compensation system for new hires, a pre-determined high, midpoint and low
pay range or pay band has been established for each MNI job classification. In the following
testimony, Jan Pallares, MNI’s business manager, succinctly explained the operation of the
system and MNI’s hiring procedures:

Q. [By Mr. Connaughton]: [Have you] been in-
volved in the determination of the amounts that are offered
to new bargaining unit employees?
A. Yes.
Q. And what role do you play?
A. Well, I have to approve all new hires, so my signa-
ture or that of the [local] publisher is necessary before a
hire offer is made.
Q. Do you actually—do you only look at it after an
amount has been suggested, or do you get involved in the
actual discussion?
A. No. The way it works is the department manager
who is requesting a position submits a form, a request for
a position. A person is requesting a reporter, for example.
We take the reporter position that they’re requesting. We
go ahead and look on the salary band grid that we have.
We find that position, and we go ahead and put in there the
salary band, minimum to maximum. Then at that point we
go ahead and we give the approval to start interviewing,
place an ad in the paper, conduct interviews, try to solicit
candidates for the position. Once the hiring manager and
the HR director agree on a candidate, we review their
qualifications. Then the HR director and me sometimes
says, “You have approval to—hire within the bands, this
particular range, from the minimum to the midpoint or the
midpoint [to the maximum].” And then the offer is made
to the candidate.
Q. How do you determine if someone is offered be-
tween the minimum and the midpoint; how do you deter-
mine that as opposed to the midpoint to the maximum?
A. Well, there’s a lot of different factors involved, and
the factors depend on the individual candidate that we
have in mind, their preparation, their skills, the difficulty
that we have had in obtaining similar candidates in the
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1024
past for those positions. It involves local market condi-
tions for individuals. There’s a whole slew of different
factors involved.
Q. Okay. And—but they’re always hired within that
narrow range within the bands, always hired—at least
since you’ve been there, they’ve always been hired within
the bands?
A. That’s right.
Q. And—now is it always decided that—I’m not sure
if I understood some of your testimony, that you would au-
thorize only to be hired between the minimum and the
midpoint?
A. No, that was an example.
Q. Okay.
A. Within a band. Let’s assume that the band is from
25 to 35,000, minimum being 25 the maximum being 35.
We might say, “Go ahead and make an offer. You can-
not”—“you must offer the minimum, but you cannot ex-
ceed the midpoint.” Let’s assume the midpoint is 30, or
we could say, “You’re range is 28,000 to 32,000.” Again,
within the band, a different range that we decide on.
Q. If somebody—has it happened that somebody has
turned down an initial offer that was made?
A. Of course, yes.
Q. And what do you do then?
A. Well, let’s assume that the candidate in this hypo-
thetical situation, assuming we offer 30, that being the
midpoint, the maximum being 35, the candidate comes
back with a counteroffer. He says, “I want 33.” As long
as it’s within the range, we discuss it, and we could dis-
cuss to make a—counter all the 33 or whatever counter we
decide.

Pallares further explained that if the applicant insists on a pay rate above the maximum amount, that
applicant will not be hired. Since August 24, MNI has hired 49 new employees using this system
albeit some have already terminated their employment. In preparation for this hearing, Pallares, the
business manager since March 1998, discovered that five employees have been hired at pay rates
other than provided for under this system in the period between August 24 and the start of his
tenure. No determination had been made about what corrective action, if any, would be taken.
Respondent concedes that it does not provide the Guild with prior notice and an opportunity bargain
concerning the pay rates to be offered applicants. As discussed below, it argues that it has no legal
obligation to do so.
3. The overtime issue
The timing of the second change at issue is pertinent to the outcome and the facts pertaining
to that change are disputed. This change involved reclassifying two positions, district manager
and single copy sales manager, from nonexempt to exempt employees for purposes of the Fair
Labor Standards Act.3 As exempt employees, the incumbents of those positions would not be
eligible for overtime pay. Under the Scripps’ ownership, MNI’s district managers and the
single copy manager were nonexempt employees paid on a biweekly basis who, under the
terms of the Guild agreement, received overtime pay for all work beyond 7.5 hours per day or

3 District managers oversee the work of the newspaper carriers who
deliver the newspaper to its subscribers’ homes. The single copy man-
ager supervises the independent contractors who distribute the newspa-
per to news racks and the news dealers. They are supervised by the
circulation department manager and have been unit employees histori-
cally.
37.5 hours per week.4 Every 2 weeks, MNI’s accounting department distributed biweekly
timesheets to the various departments where they, in turn, were provided to the nonexempt
employees for the purpose of recording their hours of work. At the end of the 2-week period,
the employees submitted their timesheets. Thereafter, the timesheets were reviewed and signed
by a department supervisor and submitted to the payroll department for processing.
An employee handbook distributed to employees at the time that they accepted employment
with Knight-Ridder imposed a requirement for all nonexempt employees to accurately record
their time. The handbook further provides that nonexempt employees would only receive
overtime if they worked more than 40 hours per week or 8 hours per day as provided by law.5
Arden Dickey, at the time a Knight-Ridder’s corporate vice president for circulation, Eva
Perez, a Knight-Ridder Miami-based human relations consultant, and Mark Olson, at the time
MNI’s circulation director, all agree that a decision was made during the preacquisition period
to change the status of the district managers and the single copy sales manager from nonexempt
to exempt. According to Olson, MNI’s human relations director, redrafted the job descriptions
for these two positions to reflect this change. Both Dickey and Olson reviewed and edited the
changed job descriptions through this period. Dickey and Perez testified that the revised job
description had been completed before they interviewed applicants for those two positions
during the week of August 12 but Olson’s recollection indicated that the job descriptions may
not have actually been completed until about a week before Knight-Ridder took over. Regard-
less of when the job description revision was actually completed, all who directly participated
agree that the decision was made to for this change in status prior to the time the applicants
were interviewed.
Laurie Fox, a director of administration in human relations at another Knight-Ridder prop-
erty in California, was sent to Monterey in August to coordinate the interviewing and hiring of
employees at MNI. Fox testified that she worked as a part of the team which developed the
new compensation scheme at MNI that, in essence, was imported from Knight-Ridder’s prop-
erty in Myrtle Beach, South Carolina, with an adjustment factor to account for California
conditions. For her work as a coordinator, Fox was provided with a classification by classifica-
tion listing of jobs segregated on the basis of their exempt and nonexempt status. The lists
provided to Fox reflected the district manager and the single copy sales manager positions as
exempt.
Dickey and Perez interviewed the applicants for the district manager and single copy sales
manager jobs at MNI. Both agree that the applicants, or at least the Scripps employees who, in
effect, applied for their own jobs with the Knight-Ridder organization, were all told during the
interviews that the job would be an exempt position. Dickey claimed that he followed a
prepared format for all of the interviews. He further claimed that he asked all of the applicants
for the district manager positions whether “they aware that the position was being changed
from nonexempt to exempt” and whether they would have a problem with that change. Dickey
gained the impression that nearly all were unaware of this change but he also gained the sense
from their responses that it would not make much difference to them. If the interviewee
indicated in any way that he did not understand the significance of the change, Perez explained
that the principal significance would be that they would not be eligible for overtime pay.
However, neither Dickey nor Perez recalled a discussion of this matter with Malcom Beety, the
applicant for the single copy sales manager position.
Michael Johnson, a long time MNI district manager, and Malcom Beety, MNI’s long time
single copy sales manager, both applied for their same jobs with Knight-Ridder. They provided
a different account of Dickey’s interviews. On direct examination, Johnson testified that
nothing at all was said in the interview about changing the status from nonexempt to exempt or
about overtime. Later, during his cross-examination, he recalled that the subject of the exempt
status of the position did come up in the interview. During his redirect examination, Johnson
claims that Dickey ask him what his “feelings” would be if the job was exempt. Johnson told
Dickey that it “wouldn’t change anything.” Johnson claimed that he worked a lot of overtime
4 Under the agreement, other employees worked an established 35-
hour workweek. Knight-Ridder did not change the basic workweek
schedule, at least for nonexempt employees.
5 At the time, California law provided for overtime pay after 8 hours
work per day. That has since changed.
MONTEREY NEWSPAPERS 1025
with Scripps but that he sought pay for very little of it. Beety recalled that he was told in the
interview that the job “may or may not be an exempt position” and that he was asked if it would
make any difference to him. Beety told the interviewers that it would not.
About a week after the interviews, Knight-Ridder extended written job offers to all of the
Scripps district managers and to Beety, the single copy manager. Although the job offers
specified their existing rate of pay, it was silent as to their status for overtime pay purposes. No
evidence shows that anything further was mentioned to these employees about their status apart
from what had been said in the Dickey interviews but there is evidence that there was consider-
able discussion among the employees about their overtime status in the preacquisition period.
Knight-Ridder’s acquisition became effective on Sunday, August 24, precisely in the mid-
dle of the usual biweekly pay period. For that pay period, employees, including the district
managers and the single copy manager, completed two separate timesheets, one for a week’s
pay from Scripps and the other for a week’s pay from Knight-Ridder. It appears that the
circulation department employees at issue were provided with the usual timesheets and that
they completed them in the usual fashion. For Wednesday, August 27, Beety recorded 9-1/2
hours of work and claimed 1-1/2 hours of overtime for that day. The timesheets appear to have
been approved by Operations Manager Roy Ulrich rather than Olson who usually performs this
task if he is available. Beety subsequently received the claimed overtime premium.
Timesheets for the disputed circulation department employees were again distributed in the
usual fashion for the following pay period. In this pay period, district managers Johnson and
Priest each claimed one hour overtime pay in the second week of the pay period. Ulrich again
signed the timesheets and these two employees subsequently received the overtime pay.
However, Olson recalled that Ulrich approved the timesheets for that pay period because he had
taken time off from work. When he returned the following week, Olson claims that Ulrich
reported that he had raised the question of the district manager’s exempt status with an em-
ployee in the payroll department and had been told that they were nonexempt employees.
This report prompted Olson, who claimed generally that there was considerable turmoil in
the transition period, to speak with at least some of disputed employees. As a result, Olson
learned that some believed that they were now exempt employees but others did not. District
Manager Johnson recalled a meeting in this period in which Olson explained that they would no
longer get overtime because he understood that they were now “managers.” On this occasion,
Johnson argued that “[n]one of us were told we were managers.” Johnson claims that Olson
responded that he check on the situation with Tom Hooten in human resources.
According to Olson, Hooten agreed that the disputed employees were now exempt and he
agreed to straighten the matter out. However, because the payroll was already in progress,
Hooten and Olson agreed that the claimed overtime would be paid but that Olson would notify
all of the disputed employees that they were now exempt employees. As a consequence, Olson
issued a memo to Beety and the district managers dated September 26. That memo states:

During the hiring of the district managers and the sin-
gle copy manager by the Knight-Ridder team . . . the posi-
tion descriptions for those jobs were reviewed by corpo-
rate human resources personnel and by corporate counsel
to determine if they met the Fair Labor Standards Act cri-
teria as exempt positions, i.e., positions that due to the na-
ture of the work performed, are salaried positions that are
exempt from over time provisions. They all agreed that
they are exempt positions. Tom Hooten and I recently
learned that not all employees in those positions under-
stood their exempt status, so we felt we should issue this
letter to make sure there were no misunderstandings.
As exempt managers, you are salaried, and you will
not fill out time cards. Your hours of work will be ar-
ranged by Linda [Franks, the newly hired home delivery
manager] and myself.
If you have any questions related to your status, please
talk to me or Tom Hooten.

Since that time, the disputed employees have not received pay for any overtime worked and
presumably have not completed timesheets as in the past. The Guild was not given prior notice
of Olson’s memo.
B. Further Findings and Conclusions
1. The new hire issue
The General Counsel contends that the minimum-maximum pay bands established by Re-
spondent for use in hiring new employees leaves the local managers considerable discretion in
setting rates of pay for use in hiring. The General Counsel further argues that this discretion is
analogous to the discretion employers exercise in fixing merit pay increases. That being the
case, the General Counsel argues that Respondent had a duty to provide the Guild with prior
notice and an opportunity to bargain concerning the specific pay rates management offered to
applicants for employment. For support, the General Counsel relies on the line of merit pay
cases including NLRB v. Katz, 369 U.S. 736 (1962); Oneida Knitting Mills, 205 NLRB 500
(1973); and Colorado-Ute Electric Assn., 295 NLRB 607 (1989), enf. denied 939 F.2d 1392
(10th Cir. 1991). Recognizing that Respondent and the Guild are currently engaged in negotia-
tions for a new collective-bargaining agreement, the General Counsel proposes a novel bargain-
ing scheme that would permit Respondent to implement a pay offer to an applicant without the
Guild’s agreement even in the absence of an overall impasse in the extended, ongoing negotia-
tions. The Guild adopts the argument advanced by the General Counsel but differs with the
General Counsel over the appropriate remedy for this alleged violation.
Respondent argues that at the time it makes wage offers to applicants, they have not yet be-
come bargaining unit employees and have no employment relationship with MNI. Accord-
ingly, it asserts that it has no duty to bargain with the Guild concerning wage offer it plans to
extend to the applicant. In support, Respondent relies on the Board’s preliminary conclusion in
Star Tribune, 295 NLRB 543, 545 (1989), that applicants for employment are not “employees”
for purposes of the Act’s bargaining obligations. In its brief, Respondent recognized that “once
Respondent and the Guild reach an agreement on a first contract, MNI will be obligated to pay
its new hires the negotiated contract wages.” Based on that statement, Respondent presumably
also recognizes that at the moment the applicant for employment is transformed into a bargain-
ing unit employee, his or her rate of pay is thrown into the milieu of mandatory bargaining
subjects, contract or no contract.
Respondent does not contend that the fixing of the rates of pay offered to applicants does
not involve the exercise of managerial discretion and I agree with the General Counsel’s
argument that the discretion exercised by Respondent’s local managers in determining appli-
cant pay rate offers is analogous to decisions frequently made in merit pay situations. But I
also agree with Respondent’s contention that an employer generally has no duty to bargain as to
applicants for employment. In the Star Tribune case the Board held as follows:

Consistent with [the Supreme Court’s] analysis in [Al-
lied Chemical & Alkali Workers v. Pittsburgh Plate Glass
Co., 404 U.S. 157 (1971)] we conclude that applicants for
employment are not “employees” within the meaning of
the collective bargaining obligations of the Act.10 Appli-
cants for employment do not fall within the ordinary
meaning of an employer’s “employees.” Applicants per-
form no services for the employer, are paid no wages, and
are under no restrictions as to other employment or activi-
ties. And, unlike the intermittent employment situation
that gives rise to the need of employers and unions for hir-
ing halls, there is no economic relationship between the
employer and an applicant, and the possibility that such a
relationship may arise is speculative.
We further conclude that the applicants could not
properly be joined with active employees in the Guild unit
because they do not share a community of interest broad
enough to justify their inclusion in the bargaining unit.11
Like retirees, applicants are not permitted by the Board to
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1026
vote in elections or considered to be part of a bargaining
unit for representation elections.12
__________________________
10 Our conclusion that applicants are not employees for pur-
poses of Sec. 8(a)(5) does not affect the established body of law
that holds that the antidiscrimination provisions of Sec. 8(a)(3) of
the Act forbid discrimination against applicants for employment.
Phelps Dodge Corp. v. NLRB, 313 U.S. 177 (1941).
11 Fn. text omitted.
12 Fn. text omitted.

Although the decisions in both Pittsburgh Plate Glass and Star Tribune excluded entire
classes of individuals no longer or not yet in the bargaining unit from the Act’s bargaining
obligations, each of the underlying decisions in those cases concluded alternatively that a duty
to bargain existed because the subject matter at issue vitally affected current unit employees.
Under that alternative theory, those decisions held an employer must bargain with the employee
representative about subjects relating primarily to persons outside the bargaining unit if those
subjects “materially or significantly affect unit employees’ terms and conditions of employ-
ment.” But an employer need not bargain concerning those subjects if they have only an
“indirect or incidental impact on unit employees.” United Technologies Corp., 274 NLRB
1069 (1985), enfd. 789 F.2d 121 (2d Cir. 1986). Implicitly, this standard requires a case-by-
case analysis. In Pittsburgh Plate Glass, the Supreme Court held, contrary to the Board, that
the employer’s unilateral changes in its retirees’ medical benefits following the enactment of
Medicare did not vitally affect the unit employees. And in Star Tribune, the Board held,
contrary to the administrative law judge, that the employer’s pre-employment alcohol and drug
testing program did not vitally affect the unit employees.
In this case the General Counsel argues that the “wage rates offered to applicants, which
become the “wage rates paid to new hires . . . vitally affect the terms and conditions of bargain-
ing unit employees.” In his brief, The General Counsel’s brief asserts:

[I]f employers were entitled to set the wage rates of new hires based on Respondent’s theory,
then contractual wage rates would be totally undermined. Regardless of what a collective bar-
gaining agreement might set as wage rates, an employer would be able to set up a totally differ-
ent pay scale for new hires and by “churning” the workforce essentially replace the contractual
rates with different and inevitably lower rates. Consequently, the wage rates offered to prospec-
tive employees and paid to new hires are both vitally important to bargaining unit employees
and vitally affect their terms and conditions of employment. Thus, in light of the standard set
forth in the Supreme Court’s decision in Pittsburgh Plate Glass, Respondent’s defense is totally
without merit.

Respondent relied solely on the Star Tribune holding that applicants are not employees under
Section 8(a)(5) and did not address the theory that the pay rates offered to applicants vitally
affects the terms and conditions of employment of the current unit employees.
I find the General Counsel’s argument unpersuasive. His argument fails to recognize that
the parties’ protracted negotiations have, as yet, produced no collective-bargaining agreement.
But assuming the parties eventually conclude a collective-bargaining agreement fixing a
minimum pay rate for each classification as is typically the case, Respondent will not be at
liberty legally to engage in the destructive “churning” practice the General Counsel predicts.
Thus, if Respondent foolishly negotiates a pay rate with an applicant that is below the minimum
contractual rate, Respondent still would be legally obliged to pay the minimum contractual rate
from the time that person begins to perform unit work. This obligation is fully enforceable
either through the grievance-arbitration system if one exists, a Section 301 action, or in an
unfair labor practice proceeding if Respondent’s conduct amounts to repudiation.
Nevertheless, I find that Knight-Ridder effectively created a dual compensation system at
MNI when it acquired that property, one for the former Scripps employees and one for new
hires. In my judgment, all aspects of the dual compensation system Respondent created when it
acquired the MNI directly and vitally affects the current unit employees. At the outset, it must
be recognized that the specific pay offer made to an applicant is virtually the final step in the
hiring process. Put another way, it occurs immediately prior to the applicant’s transition in
status to a unit employee. It may be reasonably assumed that the vast majority of the applicants
who progress to this point in the hiring process have an extremely high probability of becoming
employed.
As the established pay bands already effectively fix a floor and a ceiling for starting wages
rates, Respondent unquestionably would be required to bargain with the Guild before altering
the current pay band ranges. Therefore, it is evident that the actual pay rate within the pay
bands selected by individual managers in hiring employees is intimately connected to and
derived from an already mandatory subject of bargaining. Moreover, each new employee hired
at a rate different than the rate applicable to comparable employees hired from the predeces-
sor’s work force places an added burden on the already extended negotiations in order to
eventually reconcile any resulting disparities. The probability that Respondent’s dual compen-
sation system will create considerable employee unrest is, in my opinion, extremely high as
such systems are notorious for inciting disharmony. Accordingly, the Guild would have a
considerable interest in the rates of pay offered applicants as the hiring of employees at dispa-
rate pay rates will likely prolong the parties efforts to conclude a collective-bargaining agree-
ment.
For the foregoing reasons, I conclude that Respondent is obliged to provide the Guild with
prior notice and an opportunity to bargain concerning the rate of pay it proposes to offer each
applicant. By failing to do so, Respondent has violated Section 8(a)(5) and (1) of the Act.
2. The overtime issue
The General Counsel claims that, at least as to the three circulation department managers
who claimed and received overtime pay in the first two pay periods following after Knight-
Ridder acquired MNI, Olson’s September 26 memo unlawfully alters their existing terms and
conditions of employment. He argues at some length that I should not credit the claims by
Dickey, Perez, and Olson that Knight-Ridder changed the district manager and single copy
sales manager jobs from hourly nonexempt positions to salaried exempt positions as a part of
its initial terms and conditions of employment. In effect, the General Counsel asserts that
although Respondent may have contemplated such a change during the preacquisition period, it
never actually implemented this change until almost a month following Knight-Ridder’s
acquisition when Olson issued his clarification memo. The General Counsel believes, there-
fore, that this belated implementation came too late to be considered as a part of the initial
terms and conditions and that it had a duty to bargain with the Guild concerning that change.
Respondent contends that Knight-Ridder actually adopted the change in status for these two
positions in the pre-acquisition stage and that the failure to fully implement the change in the
first two pay periods following its acquisition of MNI was simply a mistake corrected by its
officials immediately upon learning of the error. For this reason, Respondent argues, in effect,
that it had no duty to bargain with the Guild before Olson issued his September 26 clarification
memo. Respondent further asserts that enough was said about this potential change in the
interviewing process to meet Spruce-Up considerations.6
I reject the General Counsel’s invitation to discredit virtually all of Respondent’s witnesses
on this question. Even if I assume that the testimony of Dickey and Perez exaggerates the
strength of the statements they made in the interviews about the change at issue, the testimony
by Johnson and Beety establishes, at the very least, that the subject matter was raised in the
interviews, their position about the change was solicited, and they expressed a lack of concern
about the change insofar as their continued employment was concerned. It is reasonable to
assume that if the General Counsel had evidence that one or more in this group strongly pro-
tested the change, I would have heard that evidence. Accordingly, Dickey’s testimony that,
contrary to expectations, this group expressed virtually no concern with this change is corrobo-
rated by the employee witnesses. Put another way, if Respondent had not already actually
made the decision to change the status of this group by the time of the interviews, which I
doubt, the employees certainly gave Respondent the green light to make that change during the
course of the interviews. Hence, Respondent’s argument that the circumstances here do not
implicate considerations addressed in Spruce Up is strongly supported.
Having concluded that, at the very least, the employees expressed little or no concern about
this change after they were consulted about it in the interviews, the question remains as to
whether Respondent actually adopted the change as a part of its initial terms and conditions of

6 See Spruce Up Corp., 209 NLRB 194 (1974).
MONTEREY NEWSPAPERS 1027
employment. In this connection, I regard all of the ado at the hearing about when the revised
job descriptions were completed as of little or no import as that action is little other than
implementing detail for the decision itself. In concluding that this decision was made at the
pre-acquisition stage, I credit in particular Olson’s testimony. By the time Olson testified in
this hearing, he had left Knight-Ridder’s employ and had returned to work for Scripps in
Ventura County, California. In these circumstances, I am at a loss to understand why Olson
would chose to fabricate his testimony in this case; in fact, I do not believe that he did. More-
over, I am satisfied that Olson’s conduct after discovering that this group continued to claim
and receive overtime is consistent with the conclusion that such payments resulted from an
organizational mistake. Johnson’s own testimony about the meeting Olson held with the
employees demonstrates that Olson recognized the overtime claims as inconsistent with the
decision to change the status of this group that had been made earlier. In fact, Laurie Fox’s
credible testimony, which The General Counsel does not address, provides a strong indication
that the decision to change the status of these managers probably occurred before the inter-
views.
Finally, it should be recognized that, in reality, the evidence here shows that only a single
payment was made mistakenly. As Olson’s testimony shows, Respondent’s managers became
aware of the overtime claims by Johnson and Priest in the second pay period after the acquisi-
tion and they made a conscious decision to permit those payments only because the process for
payment had gone too far. At the same time, however, Olson promptly clarified and corrected
the situation. In sum, the evidence shows, as Respondent argues, that the change was made as a
part of establishing its initial terms and conditions, and the subsequent overtime payments
resulted from nothing other than an organizational mistake.
For the foregoing reasons, I will recommend that the complaint allegation pertaining to the
district managers and the single copy sales manager be dismissed.
CONCLUSIONS OF LAW
1. Respondent is an employer engaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
2. The Guild is a labor organization within the meaning of Section 2(5) of the Act and is
the exclusive collective-bargaining representative of Respondent’s employees in the following
appropriate unit under Section 9(a) of the Act:

All full time and regular part-time employees employed by Respondent in its Advertising (in-
cluding classified), Building Maintenance, Business Office, Circulation, and News Depart-
ments; excluding all employees in classifications listed in Article 1, Section 2 of the January 1,
1996 through June 30, 1999 collective bargaining agreement between Scripps and the Guild,
guards, and supervisors as defined in the Act.

3. By failing to notify the Guild and provide it with an opportunity to bargain concerning
the rates of pay to be offered applicants for employment, Respondent violated Section 8(a)(1)
and (5) of the Act.
4. Respondent did not violate the Act in connection with designating its district managers
and single copy sales manager positions as exempt employees under the Fair Labor Standards
Act.
5. Respondent’s unfair labor practice affects commerce within the meaning of Section 2(6)
and (7) of the Act.
REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I find that it
must be ordered to cease and desist and to take certain affirmative action designed to effectuate
the policies of the Act.
As noted, the General Counsel and the Guild are not in agreement as to an appropriate rem-
edy in this case. The General Counsel seeks an order requiring Respondent to bargain with the
Guild over “the wage rates of new hires until a contract is reached or until an overall impasse is
reached and Respondent has implemented its wage proposal all subject to what the General
Counsel refers to as a “mini-impasse,” i.e., an impasse over the pay rate to be offered an
applicant The General Counsel further believes that Respondent should be required to bargain
over the rates applicable to all post-August 24 new hires and, if the parties agree that a higher
rate is appropriate, that rate should be made retroactive to the date of hire.
The Guild believes that the remedy proposed by the General Counsel “is incomplete.” In
order to restore the status quo, the Guild argues that as Respondent failed to bargain over the
discretionary aspects of the pay offers to applicants, it should be required to now fix their pay
rates at the levels set for employees hired from the Scripps workforce until a new rate is bar-
gained and to pay the new hires for any loss of wages suffered due to the different rates of pay.
In the Guild’s view, the General Counsel’s proposed remedy rewards Respondent for its
wrongdoing.
I concur that Respondent must bargain about future pay offers. In my view, each of those
pay offers would constitute a “discrete event” separate from the parties’ overall negotiations so
that the employer need not await an overall impasse in their negotiations if the parties are
unable to conclude an understanding about the pay offer in a reasonable time under the circum-
stances. See Brannan Sand & Gravel, 314 NLRB (1994) 282; Stone Container Corp., 313
NLRB 336 (1993).
However, as I have concluded that Respondent’s dual compensation system would likely
prolong negotiations for a collective bargaining agreement, I believe that affirmative remedial
action is required to minimize the effects of that system on current negotiations without further
burdening those negotiations. With this objective in mind, my recommended order requires
Respondent, upon the request of the Guild, to supplant the rate of pay for any specific unit
employee hired since August 24, without providing the Guild notice and an opportunity to
bargain over the rate of pay offered, with the rate that would have been applicable to that
employee had he or she been hired from the existing Scripps workforce and to reimburse that
employee for any resulting difference in pay as provided in Ogle Protection Service, 183
NLRB 682, 683 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest computed in the
manner set forth in New Horizons for the Retarded, 283 NLRB 1173 (1987). Nothing in my
recommended Order should be construed as requiring the Respondent to so supplant any
employee’s existing pay rate without a request from the Guild to do so. See Taft Broadcasting
Co., 264 NLRB 185 fn. 6 (1982). Although the parties are a liberty to engage in separate
negotiations about those specific cases if they so chose, it is my view that it is unnecessary to
require such separate negotiations apart from the parties’ overall contract negotiations.
[Recommended Order omitted from publication.]