RAYTHEON COMPANY

National Labor Relations Board - Board Decisions

Dec 15, 2017

365 NLRB No. 161 (N.L.R.B. 2017)

365 NLRB No. 161
NOTICE: This opinion is subject to formal revision before publication in the
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C.
20570, of any typographical or other formal errors so that corrections can
be included in the bound volumes.
Raytheon Network Centric Systems1 and United Steel,
Paper & Forestry, Rubber, Manufacturing, En-
ergy, Allied Industrial & Service Workers In-
ternational Union, AFL–CIO. Case 25–CA–
092145
December 15, 2017
DECISION AND ORDER
BY CHAIRMAN MISCIMARRA AND MEMBERS PEARCE,
MCFERRAN, KAPLAN, AND EMANUEL
In NLRB v. Katz, 369 U.S. 736 (1962), the Supreme
Court held that unionized employers must refrain from
making a unilateral change in employment terms, unless
the union first receives notice and the opportunity to bar-
gain over the change.
In the instant case, the Respondent is alleged to have
violated Section 8(a)(5) of the National Labor Relations
Act (NLRA or Act) in 2013, following expiration of its
collective-bargaining agreement (CBA), when it unilat-
erally modified employee medical benefits and related
costs consistent with what it had done in the past.2 Rely-
ing primarily on the Board’s decision in E.I. du Pont de
Nemours, Louisville Works, 355 NLRB 1084 (2010)
(DuPont I), enf. denied and remanded 682 F.3d 65 (D.C.
Cir. 2012), the judge found that the Respondent violated
Section 8(a)(5) of the Act. The judge rejected the Re-
spondent’s defense that its 2013 adjustments were a law-
ful continuation of the status quo, even though the Re-
spondent had made similar modifications to healthcare
costs and benefits at the same time every year from 2001
through 2012.
Subsequent to the judge’s decision, the Board decided
E.I. du Pont de Nemours, 364 NLRB No. 113 (2016)
(DuPont).3 In DuPont, which issued without any prior

1 During the hearing, the judge granted the General Counsel’s unop-
posed motion to amend the complaint to change the name of the Re-
spondent from Raytheon Company to Raytheon Network Centric Sys-
tems. We have amended the case caption accordingly.
2 On November 19, 2013, Administrative Law Judge Eric M. Fine
issued the attached decision. The Respondent filed exceptions and a
supporting brief, the General Counsel and Charging Party filed answer-
ing briefs, and the Respondent filed a reply brief. The Board has con-
sidered 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.
3 The Board’s 2016 DuPont decision resolved two cases—DuPont I
and E.I. du Pont de Nemours & Co., 355 NLRB 1096 (2010) (DuPont
II), enf. denied and remanded 682 F.3d 65 (D.C. Cir. 2012)—that had
been remanded to the Board from the Court of Appeals for the District
of Columbia Circuit. See E.I. du Pont de Nemours & Co. v. NLRB, 682
F.3d 65 (D.C. Cir. 2012) (DuPont v. NLRB). Although the 2016
invitation for the filing of amicus briefs, the Board ma-
jority dramatically altered what constitutes a “change”
requiring notice to the union and the opportunity for bar-
gaining prior to implementation. The majority in
DuPont held that, even if an employer continues to do
precisely what it had done many times previously—for
years or even decades—taking the same actions consti-
tutes a “change,” which must be preceded by notice to
the union and the opportunity for bargaining, if a CBA
permitted the employer’s past actions and the CBA is no
longer in effect. The DuPont majority also stated, as part
of its holding, that bargaining would always be required,
in the absence of a CBA, in every case where the em-
ployer’s actions involved some type of “discretion.”
Then-Member Miscimarra criticized the Board majori-
ty’s decision in DuPont as follows:
When evaluating whether new actions constitute a
“change,” my colleagues do not just compare the new
actions to the past actions. Instead, they look at wheth-
er other things have changed—specifically, whether a
collective-bargaining agreement . . . previously existed,
whether the prior CBAs contained language conferring
a management right to take the actions in question, and
whether a new CBA exists containing the same con-
tract language. If not, the employer’s new actions con-
stitute a “change” even though they are identical to
what the employer did before.
In effect, my colleagues . . . [hold that] whenever a
CBA expires, past practices are erased and everything
subsequently done by the employer constitutes a
“change” that requires notice and the opportunity for
bargaining before it can be implemented.4
We conclude that the Board majority’s decision in
DuPont is fundamentally flawed, and for the reasons
expressed more fully below, we overrule it today.
DuPont is inconsistent with Section 8(a)(5), it distorts
the long-understood, commonsense understanding of
what constitutes a “change,” and it contradicts well-
established Board and court precedent. In addition, we
believe DuPont cannot be reconciled with the Board’s
responsibility to foster stable bargaining relationships.
We further conclude that it is appropriate to apply our
decision retroactively, including in the instant case.

DuPont decision might be referred to as DuPont III (since it was decid-
ed after DuPont I and DuPont II had been remanded to the Board from
the court of appeals), for ease of reference we refer to it simply as
DuPont.
4 364 NLRB No. 113, slip op. at 15–16 (Member Miscimarra, dis-
senting).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD2
Accordingly, we find that the Respondent’s modifica-
tions in unit employee healthcare benefits in 2013 were a
continuation of its past practice of making similar chang-
es at the same time every year from 2001 through 2012.
Therefore, the Respondent did not make any “change”
when it made the challenged modifications, and accord-
ingly it lawfully implemented these modifications with-
out giving the Union prior notice and opportunity to bar-
gain. Because the 2013 modifications were lawful, we
also find that the Respondent’s 2012 announcement of
those modifications was lawful. For these reasons, we
reverse the judge’s unfair labor practice findings and
dismiss the complaint.5
Background
Since 1997, the Respondent has operated a facility in
Fort Wayne, Indiana, where it designs, manufactures,
tests, integrates, and installs electronic systems, radars,
missile systems, and related equipment for the Federal
government and other customers.6 The Union represents
a unit of approximately 35 production and maintenance
employees employed at the Fort Wayne facility. The
Respondent and the Union (and its predecessor union)
have been parties to CBAs for more than 20 years.7 The
parties’ most recent CBA ran from May 3, 2009 until
April 29, 2012. The Union does not represent any of the
Respondent’s employees other than those in the Fort
Wayne production-and-maintenance bargaining unit.
In 1998, after it had merged with Hughes Aircraft, the
Respondent decided to create a uniform, nationwide sys-
tem of benefits for its employees. On January 1, 1999,
the Respondent implemented a comprehensive nation-
wide “cafeteria-style” benefits plan called the Raytheon
Unified Benefits Program (Raytheon Plan). The Raythe-
on Plan includes healthcare coverage with various op-
tions, dental coverage, vision coverage and other bene-
fits, such as an investment plan. Raytheon Medical is a
self-insured healthcare option within the Raytheon Plan.
Beginning January 1, 1999, the Respondent made cov-
erage under the Raytheon Plan available to salaried and

5 Because we find that the Respondent’s benefit changes did not alter
the status quo and therefore did not require notice and an opportunity to
bargain before implementation, we need not reach the question of
whether the Union waived its right to bargain.
6 The parties stipulated to the relevant facts in this case, which are
set forth in greater detail in the judge’s decision.
7 As described in the judge’s decision, Hughes Aircraft operated the
Fort Wayne facility prior to 1997. PACE Local 6-0254 represented
production and maintenance employees at the facility for more than 20
years. In 2005, PACE merged with the Steelworkers Union, and some-
time between 2005 and 2009 PACE Local 6-0254 became USW Local
7-0254. Meanwhile, the Respondent had merged with Hughes Aircraft,
recognized the Union, and assumed the CBA in effect at the time of the
merger.
hourly nonunion employees at the Fort Wayne facility.
During annual enrollment periods each fall, employees
choose the level of coverage they want. As discussed
below, the terms of the Raytheon Plan allow the Re-
spondent to alter costs and benefits for covered employ-
ees.
After the Respondent implemented the Raytheon Plan
in 1999, its employees in the Fort Wayne bargaining unit
continued for a time to receive healthcare coverage under
separate plans provided for in the then-current CBA.
During negotiations for a successor CBA, however, the
Respondent and the Union agreed to make coverage un-
der the Raytheon Plan (including the various medical
options under the Raytheon Plan) available to the unit
employees effective January 1, 2001. The parties also
agreed that the unit employees’ contributions for Ray-
theon Medical would not exceed the rates paid by sala-
ried employees at the facility. The Respondent would
pay the majority of the premiums for Raytheon Medical,
and employees would be responsible for the balance.
Beginning in January 2001, pursuant to the parties’
2000–2005 CBA, the unit employees received coverage
under the Raytheon Plan. Coverage under the Raytheon
Plan was also provided under the parties’ 2005–2009
CBA and 2009–2012 CBA. Accordingly, every year
from 2001 to 2012, and pursuant to the then-current CBA
and Raytheon Plan documents referenced therein, the
unit employees at the Fort Wayne facility were covered
by the Raytheon Plan on the same basis as the Respond-
ent’s nonunit employees.
Raytheon Plan documents provide that “the Company
reserves the absolute right to amend the plan and any or
all Benefit Programs incorporated [therein] from time to
time, including, but not limited to, the right to reduce or
eliminate benefits,” and the parties’ CBAs referred to and
incorporated this right. Thus, the 2000–2005 CBA,
2005–2009 CBA, and 2009–2012 CBA all included pro-
visions stating that the Respondent “reserves the right to
amend or terminate said Group Benefit Plans,” and that
“[a]ll benefits . . . are subject in every respect to the
terms of the applicable Plan documents under which
payment is claimed.” Thus, under the terms of the Ray-
theon Plan and the successive CBAs, the Respondent had
the right to alter costs incurred by and/or benefits re-
ceived by bargaining-unit members under the Raytheon
Plan.
During the fall of each year from 2000 to 2011, the
Respondent mailed a document entitled “Your Raytheon
Benefits” to participating employees.8 The document

8 In some years, the document was called “Raytheon Benefits” or
“For Raytheon Employees—Benefits.”
RAYTHEON NETWORK CENTRIC SYSTEMS 3
described the available medical and benefit options. The
document also described any upcoming modifications to
employees’ benefits, premiums, deductibles, and copay-
ments that would be effective at the beginning of the next
year. The Respondent then made such changes in Janu-
ary of every year from 2001 to 2012. The changes have
included, without exception, increases in premiums for
health insurance. There have also been various other
changes, including changes to available benefits, medical
options, deductibles, and copayments.
The Union did not object to any of the changes be-
tween 2001 and 2012 or seek to bargain over any of
them. There is no dispute that the modifications were
authorized by the several CBAs and Raytheon Plan doc-
uments referenced therein. At no time since 2001 has
there been any hiatus period between CBAs that over-
lapped with an open enrollment period.
The 2009–2012 CBA was set to expire on April 29,
2012. In February 2012, the Union informed the Re-
spondent that it wanted to open negotiations and sched-
ule bargaining sessions for a successor contract. On
April 24, 2012, the Respondent and the Union began
negotiations. Over the course of the next 5 months, the
parties met 10 times in an effort to reach an agreement.
The Union submitted proposals to change contract provi-
sions granting the Respondent the right to make annual
changes to unit employees’ health insurance. One such
proposal was to strike the “pass through” language in the
expiring contract9 and to provide that the Raytheon Plan
benefits (and other benefits) offered to the unit employ-
ees would remain the same for the duration of the con-
tract. The Union also stated that it was no longer willing
to waive its right to bargain over a mandatory subject of
bargaining, such as health benefits. The Respondent
rejected the Union’s proposals to modify the contract
language and asked the Union to provide alternative pro-
posals. The Union proposed that the “pass through” lan-
guage be revised to state that changes be made “by mu-
tual agreement.” The Respondent provided a counter-
proposal, which the Union rejected. The Union subse-
quently stated that its medical insurance proposal had not
changed.
According to the Union, continuing to agree to the
“pass through” language was one of the two biggest is-
sues for the membership. Bargaining continued on the
“pass through” language (and two other issues) on April
28, with no resolution. The contract expired the next

9 The “pass through” language in the expiring contract provided that
the same disability/leave of absence benefits, paid time off, and Ray-
theon Plan offered to all of the approximately 65,000 domestic Raythe-
on employees would be offered to the Fort Wayne bargaining-unit
employees on a year-to-year basis.
day, and unit employees continued to work under the
status quo terms and conditions of employment. The
parties subsequently met for further negotiations, but
they did not make headway on the “pass through” lan-
guage issue and did not reach agreement on a new con-
tract. However, they did not reach impasse.
During a negotiating session on September 26, 2012,
the Union solicited the Respondent’s position on whether
the unit employees would be asked to participate in the
upcoming enrollment period for the Raytheon Plan. The
Respondent informed the Union that open enrollment
was about to commence and that it would proceed as
planned for all Raytheon employees based on the Re-
spondent’s belief that this was required by the terms of
the expired contract. The Union asked the Respondent to
exclude the unit employees from the upcoming open en-
rollment period. The Respondent rejected this request.
Subsequently, the Respondent announced changes to the
2013 benefit package in the “Your Raytheon Benefits”
document sent to all domestic employees, including the
unit employees at the Fort Wayne facility, in the fall of
2012. The parties have not held a negotiating session
since September 2012.
On January 1, 2013, the Respondent, over the objec-
tion of the Union, implemented several changes to the
Raytheon Plan, thereby modifying the Raytheon Plan for
all employees, including the unit employees at the Fort
Wayne facility. The various modifications included,
among other things, the expansion of the Plan’s “well-
ness reward” and the conversion of a medical insurance
plan into a health savings account.
The Union filed an unfair labor practice charge, and
the General Counsel issued a complaint alleging that the
Respondent’s announcement and implementation of the
2013 changes to the Raytheon Plan violated Section
8(a)(5) of the Act. Applying DuPont I, the judge found
that the Respondent’s 2013 modifications to the Raythe-
on Plan constituted a change, not the continuation of
preexisting practice. Accordingly, the judge found that
the Respondent violated Section 8(a)(5) by announcing
and implementing those modifications. Our dissenting
colleagues, applying DuPont, would likewise find that
the Respondent’s actions violated Section 8(a)(5) be-
cause (i) Raytheon’s past practice of making annual
modifications in costs and/or benefits under the Raythe-
on Plan was developed under management-rights clauses
in three consecutive CBAs, and (ii) the Board majority in
DuPont held that, whenever an employer’s past practice
is developed while relevant CBA provisions (e.g., a
management-rights clause) permit the employer to act
unilaterally, the past practice is treated as if it never ex-
isted when the CBA expires. Thus, according to our col-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD4
leagues, the Respondent’s continuation of what it previ-
ously did—making annual modifications to medical ben-
efits and relevant costs under the Raytheon Plan—after
the parties’ CBA expired constituted a unilateral
“change” in violation of Section 8(a)(5), since the Union
was not given advance notice and the opportunity for
bargaining. Second, our dissenting colleagues argue that
Raytheon exercised discretion when it made annual mod-
ifications in costs and/or benefits under the Raytheon
Plan, and under DuPont the exercise of any discretion
precludes a “past practice” defense to a Katz-type 8(a)(5)
allegation. For the reasons that follow, however, we
overrule DuPont, reverse the judge’s decision and dis-
miss the complaint.
Discussion
A. The Supreme Court’s Katz Decision and Other Cases
Addressing What Constitutes a “Change”
Prior to the Supreme Court’s decision in Katz, it was
well established that Section 8(a)(5) requires parties to
bargain in good faith, upon request, regarding mandatory
subjects of bargaining, which the Act defines as “wages,
hours, and other terms and conditions of employment.”10
Separate from this duty to bargain upon request,11 the

10 Sec. 8(a)(5). A subject is considered a “mandatory” subject of
bargaining when it is among the subjects described in Sec. 8(d) of the
Act, which defines the duty to bargain collectively as encompassing
“wages, hours, and other terms and conditions of employment.” See
NLRB v. Borg-Warner Corp., 356 U.S. 342, 349 (1958) (regarding
mandatory subjects, the employer and union upon request have an
“obligation . . . to bargain with each other in good faith,” although
“neither party is legally obligated to yield”); NLRB v. Katz, 369 U.S. at
743 (“A refusal to negotiate in fact as to any subject which is within §
8(d), and about which the union seeks to negotiate, violates § 8(a)(5)
though the employer has every desire to reach agreement with the un-
ion upon an over-all collective agreement and earnestly and in all good
faith bargains to that end.”).
11 There are some exceptions to the requirement to bargain upon re-
quest over a mandatory subject, including, for example, where the
parties have entered into a collective-bargaining agreement that sus-
pends the obligation to bargain for the agreement’s term, or that consti-
tutes a waiver of the obligation to bargain or covers the subject matter
at issue. Provena St. Joseph Medical Center, 350 NLRB 808, 811
(2007). Cf. Department of Navy v. FLRA, 962 F.2d 48, 57 (D.C. Cir.
1992) (describing “contract coverage” standard applied by some courts
when evaluating whether unilateral action is permitted); NLRB v. Postal
Service, 8 F.3d 832, 836–837 (D.C. Cir. 1993) (same); Chicago Trib-
une Co. v. NLRB, 974 F.2d 933, 936–937 (7th Cir. 1992) (same).
Significantly, the duty to bargain upon request regarding a mandato-
ry subject of bargaining is not eliminated by an employer’s past prac-
tice. Even if an employer has taken actions involving wages or other
employment terms in precisely the same way, the existence of such a
past practice does not permit the employer to refuse to bargain over the
subject if requested to do so by the union. See, e.g., Shell Oil Co., 149
NLRB 283, 287 (1964). In other words, even though Katz permits the
employer to take unilateral actions to the extent they are consistent with
past practice and therefore not a “change,” the employer must engage in
bargaining regarding those actions whenever the union requests such
Supreme Court in Katz held that Section 8(a)(5) requires
employers to refrain from making a change in mandatory
bargaining subjects unless the change is preceded by
notice to the union and the opportunity for bargaining
regarding the planned change.12
Among other things, the employer in Katz, while en-
gaged in initial contract negotiations with the union, uni-
laterally implemented three types of changes from the
status quo: (i) across-the-board “wage increases,”13 (ii)
modifications in the existing “sick-leave plan,”14 and (iii)
“merit increases” (given to 20 employees out of approx-
imately 50 in the bargaining unit, and ranging from $2 to
$10).15 In Katz, the Supreme Court discussed each of
these changes and found that each type of unilateral
change violated Section 8(a)(5).16 When discussing the
third type of change—which the Court referred to as
“merit increases”17 or “merit raises”18—the Court stated:
The respondents’ third unilateral action related to merit
increases, which are also a subject of mandatory bar-
gaining. Labor Board v. Allison & Co., 165 F.2d 766.
The matter of merit increases had been raised at three
of the conferences during 1956 but no final understand-
ing had been reached. In January 1957, the company,
without notice to the union, granted merit increases to
20 employees out of the approximately 50 in the unit,
the increases ranging between $2 and $10. This action
too must be viewed as tantamount to an outright refusal
to negotiate on that subject, and therefore as a violation
of 8(a)(5), unless the fact that the January raises were
in line with the company’s long-standing practice of
granting quarterly or semiannual merit reviews—in ef-

bargaining, unless an exception to the duty to bargain applies—e.g.,
unless the union has waived bargaining over the subject contractually
or bargaining over the subject has already occurred. See Provena,
supra; Department of Navy v. FLRA, supra.
12 Although Katz involved the obligation to refrain from making
changes to the status quo during negotiations for a first contract, the
Katz principle was subsequently reaffirmed by the Supreme Court in
the context of negotiations for a new CBA following expiration of the
prior CBA. See Litton Financial Printing Division v. NLRB, 501 U.S.
190, 198 (1991).
13 Katz, 369 U.S. at 745. The Supreme Court described the wage in-
creases as “a new system of automatic wage increases whereby there
would be an increase of $5 every 3 months up to $74.99 per week; an
increase of $5 every 6 months between $75 and $90 per week; and a
merit review every 6 months for employees earning over $90 per
week.” Id.
14 Id. at 744.
15 Id. at 745–746.
16 Id. at 744 (discussion of “sick leave” changes); id. at 744–745
(discussion of the employer’s “unilateral action in increasing wages,”
also referred to as “wage increases”); id. at 745–746 (discussion of
“merit increases”).
17 Id. at 741, 745–746.
18 Id. at 746.
RAYTHEON NETWORK CENTRIC SYSTEMS 5
fect, were a mere continuation of the status quo—
differentiates them from the wage increases and the
changes in the sick-leave plan. We do not think it does.
Whatever might be the case as to so-called “merit rais-
es” which are in fact simply automatic increases to
which the employer has already committed himself, the
raises here in question were in no sense automatic, but
were informed by a large measure of discretion. There
simply is no way in such case for a union to know
whether or not there has been a substantial departure
from past practice, and therefore the union may proper-
ly insist that the company negotiate as to the procedures
and criteria for determining such increases.19
The Supreme Court’s Katz decision establishes that a
unilateral change in a mandatory bargaining subject (i.e.,
wages, hours, and other terms and conditions of em-
ployment) violates Section 8(a)(5). In cases interpreting
Katz, the Board has stated that “the vice . . . is that the
employer has changed the existing conditions of em-
ployment. It is this change which is prohibited and
which forms the basis of the unfair labor practice
charge.”20
In reliance on Katz, the Board has likewise held:
[W]here an employer’s action does not change existing
conditions—that is, where it does not alter the status
quo—the employer does not violate Section 8(a)(5) and
(1). . . . An established past practice can become part
of the status quo. See Katz, 369 U.S. at 746. Accord-
ingly, the Board has found no violation of Section
8(a)(5) and (1) where the employer simply followed a
well-established past practice.21

19 Id. at 745–747 (footnotes and citations omitted; emphasis added).
As the above quotation shows, the Supreme Court in Katz indicated that
the unilateral “merit increases” violated Sec. 8(a)(5) “unless the fact
that the January raises were in line with the company’s long-standing
practice of granting quarterly or semiannual merit reviews—in effect,
were a mere continuation of the status quo—differentiates them from
the wage increases and the changes in the sick-leave plan” (which were
the two other unilateral changes the Court found to be unlawful). The
Court then answered its own question by stating: “We do not think it
does” (meaning that the merit increases were unlawful, as were the
other two unilateral changes involving “wage increases” and “the
changes in the sick-leave plan”). Id.
20 Daily News of Los Angeles, 315 NLRB 1236, 1237 (1994) (em-
phasis in original) (quoting NLRB v. Dothan Eagle, 434 F.2d 93, 98
(5th Cir. 1970)), enfd. 73 F.3d 406 (D.C. Cir. 1996), cert. denied 519
U.S. 1090 (1997). See also Post-Tribune Co., 337 NLRB 1279, 1280
(2002) (same).
21 Post-Tribune Co., 337 NLRB at 1280 (emphasis added) (citing
House of the Good Samaritan, 268 NLRB 236, 237 (1983)); see also
Luther Manor Nursing Home, 270 NLRB 949, 959 (1984), affd. 772
F.2d 421 (8th Cir. 1985); A-V Corp., 209 NLRB 451, 452 (1974).
The principle that an employer may lawfully take unilateral
action that “does not alter the status quo,”22 which permits
changes that have become part of the status quo, is often
referred to as the “dynamic status quo.” This principle was
described by Professors Gorman and Finkin in their well-
known labor law treatise as follows:
[T]he case law (including the Katz decision itself)
makes clear that conditions of employment are to be
viewed dynamically and that the status quo against
which the employer’s “change” is considered must
take account of any regular and consistent past pattern
of change. An employer modification consistent with
such a pattern is not a “change” in working conditions
at all.23
Our dissenting colleagues themselves, when interpreting
Katz, have invoked the “dynamic status quo” concept, refer-
ring to it as “the familiar ‘dynamic status quo’ doctrine,”
and citing with approval the 2004 edition of the labor law
treatise by Professors Gorman and Finkin. See Finley Hos-
pital, 362 NLRB No. 102, slip op. at 5 (2015), enf. denied
827 F.3d 720 (8th Cir. 2016); fn. 23, supra. Similarly, our
dissenting colleagues acknowledged in the DuPont majority
opinion that “[t]he Board’s past practice doctrine also flows
from Katz.” DuPont, supra, slip op. at 7.
Judge Harry Edwards of the D.C. Circuit described the
vital role that “change” plays when interpreting the Su-
preme Court’s Katz decision, stating:
[I]t makes absolutely no difference under Katz whether
the change at issue adds to or subtracts from employ-
ees’ wages, or whether it institutes a new employment
policy or withdraws one that already exists. Thus, “in
some circumstances it will be an unfair labor practice to
grant unilaterally a wage increase, and . . . in other cir-
cumstances it will be an unfair labor practice to deny
unilaterally a wage increase. The Act is violated by a
unilateral change in the existing wage structure whether
that change be an increase or the denial of a scheduled
increase.” . . . It cannot be doubted that, under the pre-
vailing case law from the Supreme Court, the circuit
courts, and the Board, the relevant inquiry here is

22 Id.
23 Robert A. Gorman, Matthew W. Finkin, Labor Law Analysis and
Advocacy, at 720 (Juris 2013) (hereinafter “Gorman & Finkin”) (em-
phasis added). This is the most recent edition of the well-known au-
thoritative treatise by Professors Gorman and Finkin, published in
2004, which described the “dynamic status quo” in relation to Katz
using the same language quoted above. See Robert A. Gorman, Mat-
thew W. Finkin, Basic Text on Labor Law, Sec. 20.14 (2d ed. 2004).
See also Westinghouse Electric Corp. (Mansfield Plant), 150 NLRB
1574, 1577 (1965) (referring to whether unilateral subcontracting deci-
sions “var[ied] significantly in kind or degree from what had been
customary under past established practice”), and fn. 89, infra.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD6
whether any established employment term on a manda-
tory subject of bargaining has been unilaterally
changed.24

24 Daily News of Los Angeles v. NLRB, 73 F.3d 406, 411 (D.C. Cir.
1996) (initial ellipsis in original; emphasis added) (quoting NLRB v.
Allied Prods. Corp., 548 F.2d 644, 652–653 (6th Cir. 1977), and citing
NLRB v. Dothan Eagle, Inc., 434 F.2d 93, 98 (5th Cir. 1970)), cert.
denied 519 U.S. 1090 (1997).
If our dissenting colleagues dispute the correctness of our descrip-
tion of the Supreme Court’s Katz decision, their contentions are plainly
without merit. Our discussion of Katz, as set forth in this opinion,
consists exclusively of verbatim quotations from the Katz opinion itself
(see, e.g., fn. 19, supra and accompanying text) or descriptions of the
Katz opinion that are unquestionably accurate (see, e.g., fns. 13–16,
supra and accompanying text, indicating that the Supreme Court ruled
that three different types of unilateral changes—involving wage in-
creases, changes to the sick-leave plan, and merit raises—were unlaw-
ful). Nor is there any doubt that the Board and the courts have uni-
formly interpreted Katz to require advance notice and the opportunity
for bargaining only when the employer’s actions constitute a “change.”
As the Board held in Daily News, “the vice . . . is that the employer has
changed the existing conditions of employment. It is this change which
is prohibited and which forms the basis of the unfair labor practice
charge.” Daily News of Los Angeles, 315 NLRB at 1237; see also Post-
Tribune Co., 337 NLRB at 1280 (same). And as shown above, the
D.C. Circuit has held likewise. See Daily News, 73 F.3d at 411 (quoted
in text). Finally, the “dynamic status quo” doctrine—requiring advance
notice and the opportunity for bargaining over an employer’s actions
only when the actions differ from a pattern of prior changes that have
become an employer’s past practice—is equally well established in
“case law” and “the Katz decision itself.” See Gorman & Finkin, supra
fn. 23. As noted in the text, our dissenting colleagues themselves have
interpreted Katz as embracing the “dynamic status quo” concept, refer-
ring to it as “the familiar ‘dynamic status quo’ doctrine,” and citing
with approval the 2004 edition of the labor law treatise by Professors
Gorman and Finkin. See Finley Hospital, 362 NLRB No. 102, slip op.
at 5; see also fn. 23, supra.
Chairman Miscimarra responds as follows to the criticism belatedly
raised by Members Pearce and McFerran—nearly one and one-half
years after they participated in the DuPont case—who now assert that
Chairman Miscimarra’s dissenting opinion in DuPont contained a
“misquotation” or “incomplete quotation” that constituted a “misread-
ing” of the Supreme Court’s Katz decision. Preliminarily, to the extent
that the dissent complains that the Supreme Court’s Katz decision was
misquoted in the DuPont dissent, this has no bearing on the instant case
because, as noted previously, this opinion quotes in full the language in
Katz addressing the employer’s unlawful merit wage increases and past
practice. Moreover, Members Pearce and McFerran were part of the
DuPont majority, and their own DuPont opinion never claimed that the
DuPont dissent misquoted the Supreme Court’s Katz decision.
DuPont, slip op. at 10–12 (DuPont majority’s “Response to Dissent”).
Nonetheless, Members Pearce and McFerran now augment their prior
DuPont opinion by asserting that the DuPont dissent “entirely altered
the meaning” of the Supreme Court’s discussion in Katz. This claim is
specious, and as explained in the text, Members Pearce and McFerran
misconstrue the Katz opinion in the instant case. See also fn. 76, infra.
The DuPont dissent—like dissenting Members Pearce and McFerran
here—clearly indicated that the Katz Supreme Court rejected the em-
ployer’s past practice defense. Immediately preceding the DuPont
dissent’s quotation of Katz, the dissent stated that the Supreme Court in
Katz held the employer’s merit wage increases “constituted an unlawful
refusal to bargain in violation of Section 8(a)(5).” DuPont, slip op. at
19 (Member Miscimarra, dissenting) (emphasis added). Immediately
When interpreting Katz, the Board and the courts have
often evaluated whether particular actions constitute a
“change.” As to this issue, numerous cases have focused
on whether there has been “a substantial departure from
past practice,”25 with no scrutiny into whether CBAs
existed when the employer’s prior actions created the
past practice, and regardless of whether any CBAs con-
tained language expressly permitting the actions in ques-
tion.
For example, the Board decided Shell Oil in 1964—2
years after the Supreme Court issued its decision in

after this language, the DuPont dissent quoted the Supreme Court’s
reference to a possible past practice defense (i.e., that the employer’s
merit increases, “in effect, were a mere continuation of the status quo”),
and the DuPont dissent quoted the Supreme Court’s explanation why
the past practice defense was rejected—i.e., “the raises . . . were in no
sense automatic, but were informed by a large measure of discretion,”
and there was “simply . . . no way in such case for a union to know
whether or not there has been a substantial departure from past prac-
tice.” Id. (quoting Katz, 369 U.S. at 746–747). And immediately fol-
lowing the Katz quotation, the DuPont dissent reiterated the holding of
Katz—again focusing on the violation found by the Supreme Court—as
follows: “The rule in Katz is that employers cannot deviate from the
status quo by making unilateral changes in wages and other mandatory
bargaining subjects.” Id. (emphasis in original). Next, the DuPont
dissent referred to the “dynamic status quo” principle, as described by
Professors Gorman and Finkin, supra fn. 23, whose treatise states that
case law, including Katz, “makes clear that the status quo against which
the employer’s ‘change’ is considered must take account of any regular
and consistent past pattern of change.” Id., quoted in DuPont, slip op.
at 19 (Member Miscimarra, dissenting). Members Pearce and McFer-
ran themselves have invoked the same “dynamic status quo” principle,
as noted in the text, citing with approval the 2004 edition of the labor
law treatise by Professors Gorman and Finkin. See Finley Hospital,
supra, 362 NLRB No. 102, slip op. at 5. Finally, Members Pearce and
McFerran attach significance, erroneously, to the DuPont dissent’s
quotation of Katz without including one phrase (“the fact that”) and one
sentence (“We do not think so”). In Katz, the latter sentence appears
after the Supreme Court commented on whether the employer’s past
practice “differentiate[d]” the disputed merit raises from the “wage
increases” and “changes in the sick-leave plan,” both of which the
Supreme Court had already found unlawful. Yet, as noted above, the
DuPont dissent quoted the Court’s explanations rejecting the employ-
er’s past practice defense, and the DuPont dissent indicated that the
disputed merit raises in Katz were unlawful, which is precisely what the
Supreme Court conveyed in the sentence, “We do not think so.” More-
over, the Supreme Court in Katz clearly did not hold that past practice
was immaterial when determining whether an employer’s actions con-
stituted an unlawful unilateral change from the status quo. Indeed, the
DuPont majority’s own opinion stated that employers in some circum-
stances may lawfully “act unilaterally pursuant to an established prac-
tice” and that the “Board’s past practice doctrine also flows from Katz.”
DuPont, supra, slip op. at 7 (emphasis added). Thus, the DuPont dis-
sent—like Members Pearce and McFerran here—portrayed Katz as
rejecting the employer’s past practice argument, and creating the prin-
ciple that actions consistent with an established practice are not a
“change” within the meaning of Katz. Again, as noted previously,
these observations have no bearing on the Board’s opinion in the in-
stant case, which quotes in full the entire Supreme Court discussion in
Katz regarding the employer’s unlawful merit raises and past practice.
25 Katz, supra, 369 U.S. at 746.
RAYTHEON NETWORK CENTRIC SYSTEMS 7
Katz—and the Board squarely rejected the position taken
by the majority in DuPont. The Board in Shell Oil held
that the determination of whether an employer’s actions
constitute a “change” does not depend on whether past
actions were permitted by language in a CBA that has
since expired.
In Shell Oil, the parties’ CBA contained a subcontract-
ing clause—article XIV—that authorized the employer to
subcontract bargaining-unit work without giving the un-
ion notice and an opportunity to bargain. Consistent with
management’s right recognized in article XIV, the em-
ployer “for some time” had subcontracted construction
and maintenance work.26 The CBA expired in March
1962, and a lengthy hiatus period ensued during which
no CBA was in effect.27 During the hiatus, the employer
subcontracted three construction and/or maintenance jobs
without giving the union notice and opportunity to bar-
gain.28
In these circumstances, the Board in Shell Oil found
that the employer did not violate Section 8(a)(5) of the
Act when it unilaterally subcontracted work during the
hiatus between contracts because the challenged subcon-
tracting was consistent with what the employer had done
previously. The General Counsel argued that the sub-
contracting during the hiatus must be regarded as a
“change” because the prior subcontracting occurred dur-
ing the term of the CBA (which contained article XIV,
the subcontracting clause that recognized management’s
right to engage in subcontracting unilaterally), and the
General Counsel contended that “termination of the pre-
ceding agreement in March 1962 revived any bargaining
rights the Union may have surrendered under article
XIV.”29 The Board rejected this argument for reasons
that have equal application in the instant case:
In our opinion, the rights and duties of parties to collec-
tive bargaining, during a hiatus between contracts, may
be derived from sources other than a formal extension
agreement. Thus, it is well settled that notwithstanding
the termination of a labor contract, the parties, pending
its renewal or renegotiation, have the right and obliga-
tion to maintain existing conditions of employment.
Unilateral changes therein violate the statutory duty to
bargain in good faith. We are persuaded and find that
Respondent’s frequently invoked practice of contract-
ing out occasional maintenance work on a unilateral
basis, while predicated upon observance and imple-
mentation of article XIV, had also become an estab-

26 149 NLRB 283, 284 (1964).
27 Id. at 285.
28 Id. at 285–286.
29 Id. at 287.
lished employment practice and, as such, a term and
condition of employment.30
The Board concluded:
[I]t does not appear that the subcontracting during this
hiatus period materially varied in kind or degree from
what had been customary in the past. In these circum-
stances, we cannot say that the Respondent’s action in
subcontracting, according to its established practice,
certain unit work without prior notice to or bargaining
with the Union during the period when no bargaining
agreement was in effect was in derogation of a statuto-
ry duty to bargain on terms and conditions of employ-
ment.31
Significantly, the Supreme Court in Fibreboard Paper
Products Corp. v. NLRB upheld the Board’s position that
certain subcontracting decisions were a mandatory sub-
ject of bargaining.32 Yet, in the Board’s very first post-
Fibreboard case evaluating subcontracting—
Westinghouse Electric Corp. (Mansfield Plant)33—the
Board reiterated that determining what constitutes a
“change,” even during the hiatus between contracts, in-
volves comparing the challenged actions taken by the
employer with what the employer had done in the past.
Thus, in Westinghouse, the Board, applying Katz and
Fibreboard, squarely rejected the position the Board ma-
jority subsequently adopted in DuPont.
In Westinghouse, the Board held that the employer
lawfully implemented “thousands of contracts”34 during
a hiatus period between CBAs, explaining as follows:
[I]t is wrong to assume that, in the absence of an exist-
ing contractual waiver, it is a per se unfair labor prac-
tice in all situations for an employer to let out unit work

30 Id. at 287 (emphasis added).
31 Id. at 288. The Board in Shell Oil also held that, even though the
employer could continue its practice of unilateral subcontracting during
the hiatus between contracts, the union retained its right to request
bargaining over subcontracting, and the employer, though permitted to
proceed with subcontracting unilaterally, was still required to bargain
on request by the union. Thus, separate from the employer’s right to
engage in lawful subcontracting under Katz, any existing past practice
did not eliminate the employer’s duty to bargain upon request because
the union had the right “to propose a change in or elimination of the
Company’s practice and to request bargaining thereon.” Id. But the
Board stated that “the Union’s demand to bargain for a modification or
elimination of the Respondent’s established practice did not suspend
the Respondent’s right to maintain its established practice, any more
than a demand by the Union to modify the existing wage structure
would suspend Respondent’s obligation to maintain such wage struc-
ture during negotiations.” Id. at 287–288.
32 379 U.S. 203, 211 (1964).
33 Supra, 150 NLRB at 1574.
34 Id. at 1576.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD8
without consulting the unit bargaining representative.
As the Supreme Court [in Katz] has indicated in a
broader context, even where a subject of mandatory
bargaining is involved, there may be “circumstances
which the Board could or should accept as excusing or
justifying unilateral action.”
It is also pertinent to the issue before us to observe that
an employer’s duty to give a union prior notice and an
opportunity to bargain normally arises where the em-
ployer proposes to take action which will effect some
change in existing employment terms or conditions
within the range of mandatory bargaining. In the Fi-
breboard line of cases, where the Board has found uni-
lateral contracting out of unit work to be violative of
Section 8(a)(5) and (1), it has invariably appeared that
the contracting out involved a departure from previous-
ly established operating practices, effected a change in
conditions of employment, or resulted in a significant
impairment of job tenure, employment security, or rea-
sonably anticipated work opportunities for those in the
bargaining unit.
Here, however, there was no departure from the norm
in the letting out of the thousands of contracts to which
the complaint is addressed. The making of such con-
tracts was but a recurrent event in a familiar pattern
comporting with the Respondent’s usual method of
conducting its manufacturing operations at the Mans-
field Plant. It does not appear that the subcontracting
engaged in during the period in question materially var-
ied in kind or degree from that which had been custom-
ary in the past.35

35 Id. (emphasis added). In Westinghouse, the Board again stated
that an employer’s right to engage in unilateral subcontracting con-
sistent with past practice did not affect or diminish the employer’s
obligation, upon request, to bargain with the union regarding subcon-
tracting. Id. at 1576–1577 (“We do not mean to suggest that, because
subcontracting in accordance with an established practice may stand on
a different footing from that of subcontracting in other contexts, an
employer is any less under an obligation to bargain with the union on
request at an appropriate time with respect to such restrictions or other
changes in current subcontracting practices as the union may wish to
negotiate.”). Significantly, the Board held that this duty to bargain
upon request was an additional reason not to require bargaining before
an employer took action that was consistent with past practice. Thus,
the Board in Westinghouse explained: “The fact that the Union does
have an opportunity to bargain generally on request about Respondent’s
recurrent subcontracting practices, provides in our view a contributing,
though not a controlling, reason for not imposing upon the Respondent
the duty to bargain separately, at the decision-making level, about each
of the thousands of individual subcontracts covering work that could be
performed by its own employees.” Id. at 1577 (emphasis added). As
noted in the text, the union’s right to request bargaining regarding
mandatory subjects is not affected, let alone eliminated, merely because
an employer may have the right to take unilateral action consistent with
Even when dealing with something as central to the
Act as wages, the Board has likewise found that when an
employer has a past practice of providing certain wage
increases, an employer does not violate Section 8(a)(5)
when it provides new wage increases in keeping with
that practice without affording the union notice and op-
portunity to bargain. See, e.g., Daily News of Los Ange-
les, supra, 315 NLRB at 1236. Indeed, although the
DuPont majority determined that any “discretion” asso-
ciated with an employer’s action means the action consti-
tutes a “change” that cannot be unilaterally implemented,
regardless of whether the employer has taken precisely
the same actions in the past, the Board in other cases has
expansively defined “past practice” and found that the
Act required employers to act unilaterally—specifically,
to provide wage increases and to do so without bargain-
ing—even though the past wage increases involved sub-
stantial employer discretion. See Arc Bridges, Inc., 355
NLRB 1222 (2010), enf. denied 662 F.3d 1235 (D.C.
Cir. 2011); Mission Foods, 350 NLRB 336, 337 (2007);
Central Maine Morning Sentinel, 295 NLRB 376
(1989).36
Neither has the Board required bargaining prior to an
employer’s minor variations from actions taken in the
past. “When changes in existing plant rules . . . consti-
tute merely particularizations of, or delineations of
means for carrying out, an established rule or practice,” it
is lawful to continue applying the same rules without
bargaining because the changes are not sufficiently “ma-
terial, substantial, and significant” to require notice and
the opportunity to bargain. Bath Iron Works Corp., 302
NLRB 898, 901 (1991); see Trading Port, Inc., 224
NLRB 980, 983–984 (1976) (employer implemented no
change that required bargaining when the employer ap-
plied its preexisting productivity standards, including
penalties for failing to satisfy those standards, but “de-
vised a more efficient means of detecting individual lev-
els of productivity, of policing individual efficiency, and
advanced a more stringent view towards below average
producers than in the preceding 18 months or so”).

its past practice, and any contractual waiver of the union’s right to
request bargaining would remain predicated on the existence of a con-
tract. Id.
36 The Board must exercise considerable care when interpreting
Katz—where the Supreme Court described a past practice defense to an
allegation that an employer’s unilateral changes violated Sec. 8(a)(5)—
to mean that Sec. 8(a)(5) imposes an obligation on employers to make
unilateral changes, particularly since the Act explicitly states that the
duty to bargain “does not compel either party to agree to a proposal or
require the making of a concession.” Sec. 8(d); see also H. K. Porter
Co. v. NLRB, 397 U.S. 99, 102 (1970). We express no opinion on this
reverse version of the Katz exception.
RAYTHEON NETWORK CENTRIC SYSTEMS 9
In more recent decisions—as the United States Court
of Appeals for the D.C. Circuit recognized when remand-
ing DuPont I and II—the Board and the courts have
likewise held that, following a CBA’s expiration, em-
ployers may lawfully take unilateral actions consistent
with past practice, even though the practice may have
developed in whole or in part while prior CBAs were in
effect. In Courier-Journal, 342 NLRB 1093 (2004)
(Courier-Journal I), the Board held that the legality of
employer actions consistent with past practice following
contract expiration did not depend on “‘whether a con-
tractual waiver of the right to bargain survives the expira-
tion of the contract’ but rather upon whether the change
‘is grounded in past practice, and the continuance there-
of.’”37 And in Capitol Ford, 343 NLRB 1058 (2004), the
Board stated that “‘the mere fact that the past practice
was developed under a now-expired contract does not
gainsay the existence of the past practice,’” and “alt-
hough the employer ‘cannot rely upon the management
rights clause of that contract to justify unilateral action,’
the ‘past practice is not dependent on the continued ex-
istence of the [expired] collective-bargaining agree-
ment.’”38 To the same effect, as the D.C. Circuit ob-
served in its decision remanding DuPont I and II, the
Court of Appeals for the Sixth Circuit “captured the
point precisely” when it stated: “‘[I]t is the actual past
practice of unilateral activity under the management-
rights clause of the CBA, and not the existence of the
management-rights clause itself, that allows the employ-
er’s past practice of unilateral change to survive the ter-
mination of the contract.”39 Further, in Beverly Health &
Rehabilitation Services, 346 NLRB 1319 (2006) (Beverly
II), although a consistent past practice had not been es-
tablished, the Board stated that “‘without regard to
whether the management-rights clause survived,’” the
employer would have been “‘privileged’” to make “‘the
unilateral changes at issue if [its] conduct was consistent
with a pattern of frequent exercise of its right to make
unilateral changes during the term of the contract.’”40
Contrary to this extensive and consistent application of
Katz, where the Board has found that an employer has
made no “change” when it continues to do what it has
done in the past—regardless of whether a CBA was in

37 DuPont v. NLRB, 682 F.3d at 69 (quoting Courier-Journal I, 342
NLRB at 1095). See also Courier-Journal, 342 NLRB 1148 (2004)
(Courier-Journal II).
38 Id. (quoting Capitol Ford, 343 NLRB at 1058 fn. 3) (alteration in
DuPont v. NLRB).
39 Id. (quoting Beverly Health and Rehabilitation Services, Inc. v.
NLRB, 297 F.3d 468, 481 (6th Cir. 2002)) (alteration in DuPont v.
NLRB; emphasis added).
40 Id. at 69–70 (quoting Beverly II, 346 NLRB at 1319 fn. 5) (altera-
tion in DuPont v. NLRB).
effect at the time of the past acts—the Board issued deci-
sions in Beverly Health & Rehabilitation Services, 335
NLRB 635 (2001) (Beverly I), and Register-Guard, 339
NLRB 353 (2003), that support the reasoning adopted by
the majority in DuPont. However, as the above discus-
sion demonstrates, Beverly I and Register-Guard were
short-lived departures from preexisting case law, and the
Board returned to its prior longstanding treatment of this
issue, consistent with Katz, in the Courier-Journal cases
(decided in 2004), Capitol Ford (also decided in 2004),
and Beverly II (decided in 2006).41

41 It is not correct, as the DuPont majority appeared to argue, that
Shell Oil, 149 NLRB at 283, and Winn-Dixie Stores, 224 NLRB 1418
(1976) (subsequent history omitted), were subsequently overruled with
respect to the holdings of those cases that are relevant here. The
DuPont majority stated that Shell Oil and Winn-Dixie were “deemed”
by the Board in Beverly I to have been “overruled in relevant part[,]”
sub silentio, by subsequent precedent. 364 NLRB No. 113, slip op. at 5
fn. 17. However, the only aspects of Shell Oil and Winn-Dixie that
were referenced in Beverly I as being purportedly overruled involved a
different proposition—that a management-rights clause does not sur-
vive contract expiration—which is not at issue here and which we
would not dispute if it were. See Beverly I, 335 NLRB at 636 (“[T]he
management-rights clause in those agreements . . . did not survive the
contracts’ expiration.”) (footnote omitted). The Board in Beverly I
stated that “[t]o the extent” that Shell Oil and Winn-Dixie “could be
read to imply the contrary,” they had been overruled sub silentio in
more recent cases. Again, this pertained only to whether a manage-
ment-rights clause survives contract expiration, which is not disputed in
the instant case. Moreover, the Board’s suggestion in Beverly I—that
Shell Oil or Winn-Dixie could be read to imply that management-rights
clauses survive contract expiration—was unfounded. Neither Shell Oil
nor Winn-Dixie implies any such thing: in neither decision did the
Board hold or so much as suggest that a management-rights clause
survives the expiration of the CBA that contained it. Rather, the
Board’s decisions in Shell Oil and Winn-Dixie reflect the fact that an
employer’s actions based on past practice do not constitute a “change”
over which bargaining is required. It is true that in Beverly I, two
members of a three-member panel—Members Liebman and Walsh—
took the same position as was taken by the majority in DuPont, i.e., that
a past practice developed under the auspices of a management-rights
clause terminates at the expiration of the CBA that contained that
clause. 335 NLRB at 636 & fn. 7. However, the third member of the
panel, Chairman Hurtgen, rejected that view, stating that “even if the
management-rights clause expired with the contract, the work practices
that were extant during the contract constituted a part of the terms and
conditions of employment. Thus, if the employer, after contract expira-
tion, continues to act consistently with those practices, it has not
‘changed’ the status quo and it has not violated Section 8(a)(5).” Id. at
646. Because the Board adheres to the practice that two members
cannot overrule Board precedent, it is clear that the panel majority
consisting of Members Liebman and Walsh in Beverly I did not over-
rule Shell Oil or Winn-Dixie. Thus, prior to DuPont, the Board had
never overruled Shell Oil or Winn-Dixie (by implication or otherwise)
regarding the holding of those cases that the existence of a past practice
is unaffected by the existence or non-existence of a management-rights
clause, and this holding was subsequently reaffirmed in the Courier-
Journal cases, Capitol Ford, and Beverly II.
Moreover, in its decision remanding DuPont I and II, the D.C. Cir-
cuit pointed out the irrelevancy of the post-expiration nonsurvival of
management-rights clauses to the issue of past practice. As the court
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD10
B. DuPont Is Incompatible with the Supreme Court’s
Decision in NLRB v. Katz and Important Purposes of
the Act
In DuPont, the Board majority held that, when evaluat-
ing whether actions constitute a “change,” parties may
not simply compare those actions to past actions. In-
stead, the majority held that parties must look at whether
other things have changed—specifically, whether a CBA
previously existed, whether the prior CBA contained
language conferring a management right to take the ac-
tions in question, and whether a new CBA exists contain-
ing the same contract language. If not, according to the
DuPont majority, the employer’s new actions constitute a
“change” even though they continue what the employer
previously did and can be seen not to involve any “sub-
stantial departure” from past practice.42 The majority in
DuPont also held that, if the employer’s past and present
actions involved any “discretion,” this always means a
“change” occurred (requiring advance notice and the
opportunity for bargaining), even where the employer
obviously was continuing its past practice and was not
altering the status quo. In so holding, the DuPont ma-
jority overruled Beverly II, Capitol Ford, and the Couri-
er-Journal cases, plus earlier cases consistent with those
decisions, including Shell Oil Co., 149 NLRB at 283, and
Winn-Dixie Stores, Inc., 224 NLRB at 1418.
As explained below, we find that the Board majority’s
decision in DuPont is incompatible with established law
as reflected in NLRB v. Katz as well as fundamental pur-
poses of the Act. We overrule DuPont, and we restore
the correct analysis to this area, specifically, principles
reflected in the Shell Oil line of cases and embodied
more recently in the Courier-Journal cases, Capitol
Ford, and Beverly II.
Our view of this case is straightforward, and it consists
of two parts: (1) in 1962, the Supreme Court held in
Katz, supra, that an employer must give the union notice
and the opportunity for bargaining before making a
“change” in employment matters;43 and (2) actions con-

stated, “whether a management-rights clause survives the expiration of
the contract is beside the point Du Pont is making.” DuPont v. NLRB,
682 F.3d at 69. The court then stated that the Sixth Circuit “captured
the point precisely” when it observed that “‘it is the actual past practice
of unilateral activity under the management-rights clause of the CBA,
and not the existence of the management-rights clause itself, that allows
the employer’s past practice of unilateral change to survive the termina-
tion of the contract.’” Id. (quoting Beverly Health and Rehabilitation
Services, Inc. v. NLRB, 297 F.3d at 481).
42 Katz, supra, 369 U.S. at 746.
43 See text accompanying fns. 12–24, supra. Obviously, the Board is
bound by the Act, which requires bargaining in Sec. 8(a)(5) and
8(b)(3). And the Board is bound by Supreme Court decisions, includ-
ing NLRB v. Katz.
stitute a “change” only if they materially differ from
what has occurred in the past.
The DuPont majority disagreed with the second of
these two points. When evaluating whether new actions
constitute a “change,” the DuPont majority did not just
compare the new actions to the past actions. Instead, the
DuPont majority held that parties must look at whether
other things had changed—specifically, whether a CBA
previously existed, whether the prior CBA or CBAs con-
tained language conferring on management the right to
take the actions in question, and whether a new CBA
exists containing the same contract language. If not, the
employer’s new actions constitute a “change” even
though they are identical to what the employer did be-
fore.
The following example, borrowed from then-Member
Miscimarra’s dissent in DuPont, illustrates the funda-
mental error in the DuPont majority’s decision:
Take, for example, an employer that has always painted
factory walls blue every summer and green every win-
ter. When doing this painting, the employer exercised
discretion: it varied the precise shade of blue and
green, and it also varied the precise time when the
painting would be done. Summer approaches. If the
employer again paints the factory walls blue, will that
constitute a “change”? In my view, because this is
what the employer has always done, it is not a
“change” for the employer to do the same thing again.44
The Board majority in DuPont saw things differently.
Again, we quote then-Member Miscimarra’s dissent:
Here is how my colleagues would analyze it. Summer
approaches, and with it, the time to paint the factory
walls blue. Will this constitute a “change”? To answer
that question, the parties must look at whether CBAs
existed previously during all or some of the past facto-
ry-wall-painting. If CBAs existed previously, parties
must then determine whether those CBAs contained
language conferring on management the right to paint
the walls as described above, and whether a new CBA
containing the same language exists now. If no CBA
exists now, or if the CBA does not contain the same
language conferring a management right to paint the
walls, then everything the employer did in the past is
treated like it never happened. Therefore, even though
the employer does what it always did (paints the walls
blue every summer), my colleagues will find this con-
stitutes a unilateral “change,” which means the em-
ployer will have violated our statute, and to avoid vio-

44 364 NLRB No. 113, slip op. at 16 (Member Miscimarra, dissent-
ing).
RAYTHEON NETWORK CENTRIC SYSTEMS 11
lating the Act, the employer must first give the union
notice and the opportunity for bargaining. In a separate
part of their holding, my colleagues also decide that,
whenever the employer exercises any “discretion” (in
my illustration, for example, the employer always de-
termined the shade of blue or green as well as the exact
time when the painting would occur), taking precisely
the same action would always constitute a “change”
because the employer exercised “discretion.”45
Of course, employers do not just paint walls. They
take all kinds of actions, including many that affect wag-
es, hours, benefits, and other employment terms. Again,
the Board and the courts—interpreting Katz—have re-
peatedly held that employers can lawfully take such ac-
tions without bargaining if doing so does not constitute a
“change.”46 According to the DuPont majority, however,
if a past practice developed under contractual manage-
ment-rights language, the expiration of a CBA means
that every employer action taken thereafter constitutes a
“change,” even though the employer merely continues
doing what it has done before.
We believe that this outcome is wrong because it con-
tradicts the Supreme Court’s decision in Katz and defies
common sense. Moreover, we believe the DuPont ma-
jority’s approach will produce significant labor relations
instability at a time when employers and unions already
face serious challenges attempting to negotiate successor
collective-bargaining agreements. In highlighting the
additional flaws in the majority’s approach in DuPont,
the following three considerations are important.
First, unions and employers face enormous challenges
in contract negotiations: prioritizing issues, reconciling
divergent positions, preparing and responding to infor-
mation requests, and managing the bargaining process.
The majority in DuPont needlessly added to these chal-
lenges by creating a new Board-imposed duty for parties
to negotiate before the employer takes actions that repre-
sent a continuation of what the employer has done be-
fore.
Second, when no CBA exists, the bargaining obliga-
tion imposed by the DuPont majority is not merely to
negotiate to impasse or agreement regarding the particu-

45 Id. (footnote omitted). In his DuPont dissent, then-Member
Miscimarra used the painting of factory walls as an example to illus-
trate the definition he attached to the word “change,” on the one hand,
in comparison to the definition utilized by the majority in DuPont, on
the other hand. However, Member Miscimarra did not reach or pass on
whether the color of factory walls is a sufficiently substantial term or
condition of employment to require bargaining under Sec. 8(a)(5) of the
Act before the walls can be painted a different color, even assuming
that doing so constitutes a “change” for purposes of Katz, nor do we
reach or pass on that question.
46 See fns. 20–24, supra and accompanying text.
lar action that the employer wishes to take (e.g., painting
the walls blue, to use the earlier example). Rather, under
extant case law, if no CBA exists, the employer must
bargain to a complete agreement or overall impasse re-
garding all mandatory bargaining subjects under negotia-
tion before the employer can take action regarding any
subject.47 Thus, the majority’s decision in DuPont, in
tandem with other cases, prevents employers from doing
precisely what they have done in the past until everything
is resolved in contract negotiations. This is contrary to
Katz and to the Board’s obligation to foster stable labor
relations,48 and it was clearly not intended by Congress.
Third, applying the Katz doctrine in a straightforward
manner, as described above, does not permit employers
to evade their duty to bargain under Section 8(d) and
8(a)(5) of the Act. Even though employers, under Katz,
have the right to take unilateral actions where it can be
seen that those actions are not a substantial departure
from past practice, employers still have an obligation to
bargain upon request with respect to all mandatory bar-
gaining subjects—including actions the employer has the
right to take unilaterally—whenever the union requests
such bargaining. The Act imposes two types of bargain-
ing obligations upon employers: (1) the Katz duty to
refrain from making a unilateral “change” in any em-
ployment term constituting a mandatory bargaining sub-
ject, which entails an evaluation of past practice to de-
termine whether a “change” would occur if the employer
took the contemplated action;49 and (2) the duty to en-
gage in bargaining regarding any and all mandatory bar-
gaining subjects upon the union’s request to bargain.50
Existing law makes it clear that this duty to bargain upon
request is not affected by an employer’s past practice.51

47 See Bottom Line Enterprises, 302 NLRB 373, 374 (1991) (“[A]n
employer’s obligation . . . encompasses a duty to refrain from imple-
mentation at all, unless and until an overall impasse has been reached
on bargaining for the agreement as a whole.”), enfd. mem. sub nom.
Master Window Cleaning, Inc. v. NLRB, 15 F.3d 1087 (9th Cir. 1994);
RBE Electronics of S.D., 320 NLRB 80 (1995) (same). We do not here
pass on whether Bottom Line Enterprises and RBE Electronics were
correctly decided.
48 One of the Board’s primary responsibilities under the Act is to fos-
ter labor relations stability. Colgate-Palmolive-Peet Co. v. NLRB, 338
U.S. 355, 362–363 (1949) (“To achieve stability of labor relations was
the primary objective of Congress in enacting the National Labor Rela-
tions Act.”); NLRB v. Appleton Elec. Co., 296 F.2d 202, 206 (7th Cir.
1961) (A “basic policy of the Act [is] to achieve stability of labor rela-
tions.”).
49 See fns. 20–24, supra and accompanying text.
50 See fn. 9, supra and accompanying text.
51 For more detail regarding the difference between the duty to bar-
gain upon request and the Katz duty to refrain from unilaterally chang-
ing a term or condition of employment—and the fact that an employ-
er’s past practice leaves the former duty undiminished—see fns. 11, 31,
& 35, supra.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD12
In the “painting-the-walls-blue” illustration, for example,
we would find that the employer does not have to bargain
before it paints the walls blue this summer (because do-
ing so would not be a “change”); but the employer is still
required to bargain over this subject—regardless of any
past practice—if the union requests such bargaining.52
Another troubling aspect of the majority’s analysis in
DuPont is their misleading description of the develop-
ment of Board case law in this area. The DuPont majori-
ty constructed a narrative that took as its starting point a
time when the Board (in their view) properly applied the
law, as follows: (a) if employer actions occurred during a
CBA’s term, these actions were lawful only because the
union had waived its bargaining rights contractually,
typically pursuant to a management-rights clause; and (b)
if the employer took the same (or similar) actions after
that CBA had expired, the Board supposedly applied a
“traditional and longstanding past practice doctrine”53
under which the employer’s new actions constituted a
“change” even if they were identical to what the employ-
er had done in the past. Under the DuPont majority’s
narrative, this utopian period when the Board properly
applied the law was reflected primarily in two cases:
Beverly I54 and Register-Guard,55 decided in 2001 and
2003, respectively.
As the DuPont majority tells the story, the key villains
that came along and wrecked everything were the Couri-
er-Journal cases decided in 2004.56 According to the
DuPont majority, the Courier-Journal cases were “unex-
plained departures from well-established . . . legal prin-
ciples” and “veered sharply from the well-established
precedent defining a past practice status quo.”57 And the
majority further maintained that the Courier-Journal
cases “cannot be reconciled with the traditional and
longstanding past practice doctrine”58 established in Bev-
erly I and Register-Guard. Therefore, in DuPont, the
majority purported to “return to the rule followed in our
earlier cases,”59 thereby restoring the law to its proper
state and where it had always been, setting aside the ne-
farious Courier-Journal cases and their accursed proge-
ny, Capitol Ford and Beverly II.

52 Although the duty to engage in bargaining upon request is undi-
minished by the existence of a past practice, there are some potential
exceptions that can affect this duty. See fn. 11, supra.
53 DuPont, 364 NLRB No. 113, slip op. at 6.
54 Supra, 335 NLRB at 635.
55 Supra, 339 NLRB at 353.
56 Courier-Journal I, supra, 342 NLRB at 1093; Courier-Journal II,
supra, 342 NLRB at 1148. The majority passed equally harsh judgment
on similar Board decisions in Capitol Ford, supra, 343 NLRB at 1058,
and Beverly II, supra, 346 NLRB at 1319.
57 364 NLRB No. 113, slip op. at 8.
58 Id., slip op. at 6.
59 Id., slip op. at 3.
This narrative has two problems. First, the story is not
true. It does not account for an earlier, decades-long
period during which the Board—consistent with the
Courier-Journal cases—similarly held that employer
actions were not a “change” that required bargaining
under Katz if they were consistent with past practice,
regardless of whether or when a CBA was in effect.60 In
other words, the majority’s decision in DuPont is not, in
fact, supported by any “traditional and longstanding past
practice doctrine.” Rather, the Board’s “traditional and
longstanding” past practice doctrine contradicts the ma-
jority’s approach in DuPont. The Board applied Beverly
I and Register-Guard (the two cases relied upon by the
DuPont majority)61 during a relatively brief 3-year peri-
od, which was preceded and followed by numerous
Board cases that squarely rejected the reasoning em-
braced by the DuPont majority.
There is a more fundamental problem with the narra-
tive constructed by the majority in DuPont. The present
case—just like the DuPont cases—is, at bottom, a simple
one: the Board is bound by the Act, and we must adhere
to Supreme Court decisions, including the Supreme
Court’s decision in Katz. There, the Supreme Court held
that an employer must provide the union prior notice and
the opportunity for bargaining before it implements a
“change.” Most people understand what “change”
means, and this commonsense understanding is what the
Supreme Court embraced in Katz: when an employer
acts consistently with what it did before, this is not a
“change.” It does not matter whether or what type of
CBA may exist, or may have existed, when evaluating
whether a particular action constitutes a “change.” The
majority’s view to the contrary in DuPont improperly
confused the subject of contractual waivers of the right to
bargain—which depend, of course, on the existence of a
contract—with the analysis of what constitutes a
“change” for purposes of Katz. Equally incorrect, in our
view, was their finding that every employer action con-
stitutes a “change” requiring prior notice and opportunity
to bargain, even if the action is materially identical to
what the employer has always done, if the employer ex-
ercises any discretion in taking the action. As explained
more fully below, this aspect of DuPont is contrary to

60 See, e.g., Shell Oil Co., supra, 149 NLRB at 283; Westinghouse
Electric Corp. (Mansfield Plant), 150 NLRB at 1574; Winn-Dixie
Stores, Inc., supra, 224 NLRB at 1418. See also the text accompanying
notes 26–40, supra.
61 Although Beverly I and Register-Guard provide support for the
reasoning adopted by the DuPont majority, each case was distinguisha-
ble from the DuPont cases. In Beverly I, the employer did not rely on a
past practice defense, and the employer in Register-Guard did not
establish that the changes undertaken were consistent with its past
actions.
RAYTHEON NETWORK CENTRIC SYSTEMS 13
Katz as well as numerous other longstanding and recent
Board and court decisions.
C. The Board Majority in DuPont Incorrectly Expanded
the Scope of Employer Actions That Might Be a
“Change” Requiring Advance Notice and the
Opportunity for Bargaining.
For several reasons, we disagree with the DuPont ma-
jority’s redefinition of the term “change,” and we believe
that decision erroneously expanded the Katz duty to re-
frain from making unilateral changes to encompass situa-
tions where an employer has not effected a “change” but
rather has maintained the status quo by continuing its
preexisting practice. In particular, when evaluating
whether an employer’s actions constitute a “change,” we
believe that it is unreasonable to require parties and the
Board to examine whether a CBA or CBAs containing
contractual bargaining waivers may have existed at vari-
ous times in the past. We also reject the DuPont majori-
ty’s conclusion that every action constitutes a “change”
within the meaning of Katz, regardless of what an em-
ployer has done in the past, if the employer’s actions
involve any “discretion.”
First, as noted above, numerous Board and court cases,
interpreting Katz, support a view that, when determining
whether an employer’s action constitutes a “change” and
thus triggers the obligation to provide the union notice
and the opportunity for bargaining, the only relevant fac-
tual question is whether the employer’s action is similar
in kind and degree to what the employer did in the past.
See Parts A and B, above.
Second, in Katz, the employer was engaged in bargain-
ing for an initial contract, and the Supreme Court evalu-
ated the employer’s unilateral changes in comparison to
other wage increases that occurred in the past, without
regard to the existence or non-existence of any prior con-
tractual waiver (since no prior contract existed).
Third, although the DuPont majority portrayed these
issues as being within the province of the Board—which,
if true, would have left the Board free to change existing
law if it articulated a reasoned justification for doing
so62—the Board cannot deviate from decisions of the
Supreme Court, including decisions interpreting the Act.
As to the proper interpretation of what constitutes a
“change,” the DuPont Board failed to provide a “rea-
soned justification”63 for abandoning the Board’s

62 As the D.C. Circuit correctly observed when remanding DuPont I
and II to the Board, when the Board deviates from its own precedent—
which it clearly did when it decided DuPont I and II—the Board is
required to provide a “reasoned justification for departing from its
precedent.” DuPont v. NLRB, 682 F.2d at 70 (citation omitted).
63 Id. at 70.
longstanding interpretation of Katz64 that the Board ap-
plied consistently over several decades—save only for
the 3-year period when it deviated from this interpreta-
tion in Beverly I and Register-Guard—as reflected in the
Courier-Journal cases, Shell Oil, and Westinghouse,
among others. As the Board has stated, (i) whether a
“change” has occurred for purposes of the Katz doctrine
does not depend on “whether a contractual waiver of the
right to bargain survives the expiration of the contract,”
but rather upon whether the challenged action “is
grounded in past practice, and the continuance thereof”;65
(ii) “the mere fact that the past practice was developed
under a now-expired contract does not gainsay the exist-
ence of the past practice”;66 and (iii) even when the em-
ployer’s unilateral actions involved “thousands of con-
tracts” with outside employers during a hiatus between
CBAs, there was no “change” that required the employer
to give the union advance notice and opportunity to bar-
gain when the employer’s actions did not materially vary
“in kind or degree from that which had been customary
in the past.”67
Fourth, as noted above, the DuPont majority’s under-
standing of what constitutes a “change” is counterintui-
tive. Nearly everyone would evaluate whether a
“change” has occurred by comparing the challenged ac-
tion to the employer’s past actions. In contrast, to deter-
mine whether a “change” has occurred under the stand-
ard adopted in DuPont requires an examination of mat-
ters other than the challenged action in comparison to
past actions. Specifically, if an employer is doing now
precisely what it has always done before, the majority in
DuPont would find that the employer nonetheless has
made a “change” if past actions were taken when a CBA
containing a management-rights clause was in effect, and
the CBA was no longer in effect when the subsequent

64 When it rejected the Board’s analysis in DuPont I and II, the D.C.
Circuit stated that the analysis was not consistent with the Board’s own
decisions. The D.C. Circuit did not state its views regarding the merits,
but it is significant that the court described Katz as holding that an
employer “unilaterally may implement changes ‘in line with [its] long-
standing practice’ because such changes amount to ‘a mere continua-
tion of the status quo,’” and the court quoted Courier-Journal for the
proposition that “‘a unilateral change made pursuant to a longstanding
practice is essentially a continuation of the status quo—not a violation
of Section 8(a)(5).’” 682 F.3d at 67 (quoting Katz, 369 U.S. at 746, and
Courier-Journal I, 342 NLRB at 1094). Both of these propositions,
which the D.C. Circuit quoted with approval, are contrary to the Board
majority’s holding in DuPont.
65 Courier-Journal I, 342 NLRB at 1094.
66 Capitol Ford, 343 NLRB at 1058 fn. 3.
67 Westinghouse, 150 NLRB at 1576; see also Shell Oil, 149 NLRB
at 288 (no duty under Katz during hiatus period between contracts to
provide advance notice and the opportunity for bargaining regarding
subcontracting that had not “materially varied in kind or degree from
what had been customary in the past”).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD14
challenged action was taken. It is incongruous, however,
to determine whether a “change” has occurred during
periods when no CBA exists by undertaking a detailed
examination of past CBAs, all of which have expired.
Not only does this improperly confuse the concept of
“contractual waiver” with the Katz focus on what consti-
tutes a “change,” it is a near certainty that the Board’s
analysis of these purely contractual issues would not be
afforded deference by the courts. See Litton Financial
Printing Division v. NLRB, 501 U.S. at 203 (“We would
risk the development of conflicting principles were we to
defer to the Board in its interpretation of the contract, as
distinct from its devising a remedy for the unfair labor
practice that follows from a breach of contract.”).
Fifth, by requiring scrutiny of prior CBAs—possibly
extending back in time over decades—to determine
whether employers have effected a “change,” the majori-
ty in DuPont established a standard with which most
employers will find it impossible to comply. Contrary to
the DuPont majority’s portrayal of their new standard, it
clearly requires meticulous scrutiny into myriad details,
including the following:
(a) precisely when did prior actions occur, when did
they commence, and when did they cease;
(b) whether and to what extent prior actions coincided
with times when prior CBAs existed, or before any
CBAs existed, and/or during hiatus periods between
CBAs;68
(c) where prior actions were permitted pursuant to side
agreements, grievance settlements, or arbitration
awards that were not memorialized in any CBA,
whether these constituted a “waiver” or were merely
based on a preexisting management right that existed
separate from any agreement;
(d) what substantive contract terms existed in any prior
CBAs pertaining to the “past practice”; what came first,
the CBAs or the employer’s practice; and did the CBA
constitute a “waiver” permitting unilateral actions the
employer could otherwise not take, or did the CBA
merely recognize a preexisting management right that
existed separate from the CBA;

68 The DuPont majority did not rely on the (false) dichotomy be-
tween unilateral changes made during the term of a contract and unilat-
eral changes made during hiatus periods between contracts, which the
Board previously relied on in attempting, unsuccessfully, to distinguish
the DuPont cases from the Courier-Journal cases. See DuPont I, 355
NLRB at 1084–1085; DuPont II, 355 NLRB at 1096. This notwith-
standing, the standard adopted in DuPont would still require the Board
to analyze, in at least some circumstances, interpretations of language
in (expired) contracts in connection with actions taken during hiatus
periods.
(e) how did relevant CBA provisions, side agreements,
grievance settlements, or arbitration awards evolve
over the years; when did the changes occur; and how
did these provisions, agreements, settlements or awards
coincide with the employer’s past actions; and
(f) did negotiating history establish that parties agreed
the employer lacked the right to take particular actions
absent express language in the CBA, or did the em-
ployer insist on CBA provisions that conformed to a
right that had already been exercised and as to which
the union acquiesced.
The Supreme Court did not deem any of these considera-
tions relevant when it decided Katz and Litton. Indeed, it is
clear the Supreme Court would have rejected arguments that
such scrutiny was necessary to determine whether employer
actions constituted a “change” from what had occurred be-
fore. To borrow the Supreme Court’s language in Katz,
under the DuPont majority’s approach, “[t]here simply is no
way . . . for a union” or anyone else “to know whether or
not there has been a substantial departure from past prac-
tice.”69

69 Katz, 369 U.S. at 746–747 (emphasis added). Indeed, another in-
congruity resulting from the DuPont majority’s redefinition of
“change” under Katz was their creation of multiple standards that par-
ties would need to apply when evaluating whether a “change” occurred.
One Katz standard would apply during bargaining for an initial con-
tract, when no union has previously represented the unit employees and
no CBA has previously existed. In this situation, parties would deter-
mine whether a “change” occurred merely by comparing the challenged
employer actions with the employer’s past actions. A second Katz
standard would apply during contract negotiations, where the same
employer and union were party to prior CBAs. Here, whether a
“change” occurred would depend, in part, on a detailed scrutiny of prior
CBA provisions in relation to the employer’s past actions, as described
in the text. A third Katz standard would apply whenever the employer
is engaged in first contract negotiations with one union, where employ-
ees were previously represented by a different union that had been party
to prior CBAs with the same employer. In this situation, the DuPont
majority would find that the employer’s prior actions, if taken pursuant
to one or more CBAs with the different union, would be irrelevant
when determining whether the challenged action or actions constituted
a change. However, this conclusion would follow from the prior
CBAs, under the reasoning of the DuPont majority, only if the employ-
er’s prior actions were impermissible in the absence of a contractual
bargaining waiver, which would again require detailed examination of
the prior CBAs and the specific CBA provisions that ostensibly privi-
leged the employer’s past actions. Other situations could very well
involve different combinations of the above circumstances. In any
event, because the DuPont majority’s reasoning would require this type
of examination—an examination parties would nearly always find
impossible to conduct within a reasonable period to permit bargaining,
if required—DuPont effectively eliminated the “dynamic status quo”
principle that, as described by Professors Gorman and Finkin, flows
from “case law,” including “the Katz decision itself,” under which
“conditions of employment are to be viewed dynamically and . . . the
status quo against which the employer’s ‘change’ is considered must
take account of any regular and consistent past pattern of change.” See
text accompanying fn. 23, supra.
RAYTHEON NETWORK CENTRIC SYSTEMS 15
Sixth, the DuPont majority attempted to minimize the
unworkable nature of their decision, as illustrated above,
but in doing so, they made matters worse. The corner-
stone of their analysis was that, whenever management
actions are taken pursuant to rights conferred by clear
and unmistakable CBA language, those actions are not
part of the “status quo” that may lawfully be continued
unilaterally following the CBA’s expiration, because
contractual bargaining waivers expire with the CBA.
However, this also means that employers have the right
to continue without bargaining, as part of the status quo,
past practices that are unrelated to contractual rights con-
ferred under past CBAs. The DuPont majority had to
recognize that these types of past practices continue as
part of the status quo because (i) this is precisely what
the Board and courts have indicated in cases interpreting
Katz, and (ii) even under the DuPont majority’s analysis,
the expiration of a CBA only eradicates those past prac-
tices where the employer’s unilateral actions were based
on rights conferred by clear and unmistakable CBA lan-
guage.70 In fact, the DuPont majority conceded that,
under their theory, all “extracontractual terms and condi-
tions of employment that have become established by
past practice” remain part of the status quo that may be
continued unilaterally after a CBA’s expiration. To bor-
row the DuPont majority’s words, these extracontractual
past practices “must be maintained after a contract’s ex-
piration.”71 Therefore, as explained in the preceding
paragraph, the majority’s analysis requires parties to re-
construct what past practices developed under rights con-
ferred by past clear and unmistakable CBA language
(which the majority would find may not be continued as
part of the status quo), as opposed to those “extracontrac-
tual” past practices that employers may continue—
indeed, must continue—as part of the status quo without
bargaining.
Here is where matters got even worse in DuPont. The
majority, responding to then-Member Miscimarra’s dis-
sent, stated that their new approach would not require
drilling down into past CBAs because, in their view, any

70 The entire premise of the DuPont majority’s reasoning was that
contractual waivers terminate with the expiration of the CBA. There-
fore, on their view, the types of past practice that are extinguished upon
the CBA’s expiration are actions that were based on rights conferred by
CBA language. This means that when a CBA expires, the extinguished
past practices must be limited to those based on actions taken under the
auspices of “clear and unmistakable” CBA language, which is the
standard that the Board (with only mixed acceptance in the courts)
uniformly applies when evaluating contractual waivers. See fn. 11,
supra. As noted in the text, the DuPont majority also conceded that
“extracontractual” past practices remain part of the status quo and may
be continued (indeed, must be continued) without bargaining following
a CBA’s expiration. See text accompanying fn. 72, infra.
71 364 NLRB No. 113, slip op. at 4 (emphasis added).
CBA’s expiration extinguishes all past practices, includ-
ing those that developed extracontractually. The DuPont
majority’s explanation speaks for itself:
[W]e impose no great new burden on employers or on
the bargaining process generally. First, identifying the
status quo is not difficult and does not involve the
strained “drilling-down” scenario set forth in the dis-
sent. The status quo is whatever employees’ concrete
terms and conditions of employment are—on the
ground, so to speak—when the contract expires. That
is the baseline from which the parties bar-
gain. . . . Second, employers who wish to be able to
continue making discretionary unilateral changes post-
expiration can bargain for contract language in the
successor agreement that clearly and unmistakably
gives them that right.72
But the majority in DuPont could not have it both ways.
Their own decision differentiated between “extracontractu-
al” practices that employers may continue (must continue)
without bargaining following the CBA’s expiration, and
practices developed under clear and unmistakable contract
language that may not be continued (according to the
DuPont majority) as part of the status quo. This distinction
requires the type of meticulous drilling-down that we de-
scribed previously. Alternatively, if one accepts the expla-
nation of the DuPont majority in the above-quoted passage,
there is no need for drilling down, but this is only because
they extinguished all past practices from the status quo
when any CBA expires—including those that developed
extracontractually—and the “baseline” from which parties
must bargain consists of “whatever employees’ concrete
terms and conditions of employment are . . . when the con-
tract expires.”73 To be sure, their “baseline” approach had
one virtue: it is indeed simple. Employers can never take
actions unilaterally based on any past practice after a CBA
expires. However, this approach is irreconcilable with Katz,

72 364 NLRB No. 113, slip op. at 12.
73 Ostensibly, the DuPont majority did not find that employers vio-
late the Act by taking actions, following a CBA’s expiration, based on
“a practice of automatic change based on fixed timing and criteria
[where] that practice was established pursuant to a management-rights
clause” (364 NLRB No. 113, slip op. at 12 fn. 31). Although this cave-
at appeared in their opinion, their analysis permits no other conclusion.
They found that a CBA’s expiration, which discontinues all contractual
waivers, extinguishes past practices that are based on contractual rights.
This rationale necessarily encompassed all “contractual” past practices,
even if employers elected to exercise their contractual discretion by
taking action “based on fixed timing and criteria.” For the reasons
explained in the text, we believe that treating past practices in these
circumstances as if they did not exist is directly contrary to Katz and
extensive Board case law.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD16
and it is irreconcilable with numerous cases interpreting
Katz.74
Seventh, we disagree with the DuPont majority that an
employer’s actions always constitute a “change” under
Katz whenever the employer’s actions involve “discre-
tion.” Although the Supreme Court in Katz mentioned
that the employer’s merit increases at issue in that case
involved “a large measure of discretion,” this was a fac-
tual observation made by the Court when contrasting the
disputed merit increases (which ranged between $2 and
$10 and were awarded only to 20 employees out of ap-
proximately 50 employees in the bargaining unit) against
“so-called ‘merit raises’” that, according to the Court,
were “in fact simply automatic increases.”75 The Su-
preme Court certainly did not articulate a blanket rule
that every action taken by an employer involving any
“discretion” required advance notice and the opportunity
for bargaining, even if the employer was continuing to do
precisely what it had always done. Rather, regarding the
merit increases at issue in Katz, the Supreme Court ex-
amined whether they constituted a “change,” and the
Court referred (among other things) to whether the merit
increases were a “substantial departure from past prac-
tice.”76 Moreover, the Board has interpreted Katz to hold
that an employer may lawfully take unilateral actions
where those actions are similar in kind and degree with
what the employer did in the past, even though the chal-
lenged actions involved substantial discretion. For ex-
ample, in Westinghouse, the employer engaged in unilat-
eral subcontracting by implementing “thousands of con-
tracts,” and the Board found that no “change” occurred
within the meaning of Katz because the subcontracting
had not “materially varied in kind or degree from what
had been customary in the past.”77 Additionally, the ma-
jority’s holding in DuPont that the exercise of “discre-
tion” precludes unilateral action is squarely contrary to
the Board’s treatment of Section 8(a)(5) cases addressing

74 See Arc Bridges, Inc., 355 NLRB at 1222; Mission Foods, 350
NLRB at 337; Central Maine Morning Sentinel, 295 NLRB at 376.
75 Katz, 369 U.S. at 746–747 (emphasis added) (quoted in the text
accompanying fn. 19, supra).
76 Id. Our dissenting colleagues erroneously construe Katz when
they say that the Court’s opinion “clearly says . . . that an employer’s
unilateral change violates the duty to bargain under the National Labor
Relations Act even where the change is consistent with a past practice
of changes made if the changes involve significant employer discre-
tion.” As explained above in the text, our colleagues’ reading of Katz
fails to acknowledge that the Supreme Court’s reference to “discretion”
was made when the Court was comparing the “January raises” (merit
increases selectively given to 20 employees out of 50, ranging between
$2 and $10) to “so-called ‘merit raises’” that the Court described as
“simply automatic increases to which the employer [had] already
committed himself.” Katz, 369 U.S. at 746 (emphasis added).
77 Westinghouse, 150 NLRB at 1576; see also Shell Oil, 149 NLRB
at 288.
whether past changes (e.g., wage increases) are part of
the status quo that must be continued without bargain-
ing. In these cases, as noted above, the Board has held it
does not constitute a “change” for an employer to grant
unilateral wage increases—indeed, the Board has found
that the employer is required to give those increases
without bargaining—even though past wage increases
involved substantial employer discretion.78
Finally, the change in the law adopted in DuPont con-
cerned one of the most central aspects of the Act—the
duty to bargain—and the inability of employers to act in
line with past practice until the parties bargain to agree-
ment on a complete contract or overall impasse may sub-
stantially undermine employers’ ability to operate their
businesses. Parties need to know the scope of their re-
spective rights and obligations, and DuPont created con-
fusion by constructing standards that will prevent em-
ployers from having any “certainty beforehand” regard-
ing when they may safely continue to act as they have in
the past.79 Applicable here are the Supreme Court’s ob-
servations in First National Maintenance, where the
Court (evaluating partial closing decisions) found that no
duty to bargain existed:
An employer would have difficulty determining before-
hand whether it was faced with a situation requiring
bargaining or one that [was] . . . sufficiently compelling
to obviate the duty to bargain. . . . A union, too, would
have difficulty determining the limits of its preroga-
tives, whether and when it could use its economic pow-
ers to try to alter an employer’s decision, or whether, in
doing so, it would trigger sanctions from the Board.80
In sum, and for the reasons stated above, we overrule
DuPont as well as Beverly I and Register-Guard, and we
reinstate Shell Oil, Westinghouse, Winn-Dixie Stores,
Beverly II, Capitol Ford, and the Courier-Journal cases.
Henceforth, regardless of the circumstances under which
a past practice developed—i.e., whether or not the past
practice developed under a collective-bargaining agree-
ment containing a management-rights clause authorizing
unilateral employer action—an employer’s past practice
constitutes a term and condition of employment that
permits the employer to take actions unilaterally that do
not materially vary in kind or degree from what has been
customary in the past. We emphasize, however, that our
holding has no effect on the duty of employers, under
Section 8(d) and 8(a)(5) of the Act, to bargain upon re-

78 See Arc Bridges, Inc., 355 NLRB at 1222; Mission Foods, 350
NLRB at 337; Central Maine Morning Sentinel, 295 NLRB at 376.
79 First National Maintenance Corp. v. NLRB, 452 U.S. 666, 679
(1981).
80 Id. at 684–686 (emphasis added; citations omitted).
RAYTHEON NETWORK CENTRIC SYSTEMS 17
quest over any and all mandatory subjects of bargaining,
unless an exception to that duty applies.81
E. Application of the Correct Standard to the
Instant Case
“The Board’s usual practice is to apply new policies
and standards retroactively ‘to all pending cases in what-
ever stage.’” SNE Enterprises, 344 NLRB 673, 673
(2005) (quoting Deluxe Metal Furniture Co., 121 NLRB
995, 1006–1007 (1958)). Under Supreme Court prece-
dent, “the propriety of retroactive application is deter-
mined by balancing any ill effects of retroactivity against
‘the mischief of producing a result which is contrary to a
statutory design or to legal and equitable principles.’”
Id. (quoting Securities & Exchange Commission v.
Chenery Corp., 332 U.S. 194, 203 (1947)).
We perceive no ill effects that would be occasioned by
applying the standard we announce herein to this case
and to all pending cases. No party that has acted in reli-
ance on DuPont will be found to have violated the Act as
a result of applying the standard we announce today ret-
roactively. In reliance on DuPont, parties may have en-
gaged in bargaining that our decision today renders un-
necessary, but such bargaining is merely rendered super-
erogatory by our decision, not unlawful. True, parties
will have been put to unnecessary time and expense, but
those were consequences of the decision we overrule, not
of applying our decision retroactively. On the other
hand, failing to apply the new standard retroactively
would “produc[e] a result which is contrary to a statutory
design or to legal and equitable principles.” SEC v.
Chenery Corp., supra. As we have explained at length,
DuPont was contrary to the Supreme Court’s decision in
Katz, it was contrary to the overwhelming weight of
Board precedent save for a brief 3-year period, and it was
ill-advised on policy grounds. Accordingly, we find that
application of our new standard in this and all pending
cases will not work a “manifest injustice.” SNE Enter-
prises, supra. We proceed to do so now.
As described above, the parties stipulated that, over the
course of several CBAs, and pursuant to contractual res-
ervation-of-rights language, the Respondent modified its
employees’ healthcare costs and/or benefits in January of
every year from 2001 to 2012. The changes applied
equally to bargaining-unit employees employed at the
Fort Wayne facility and the Respondent’s unrepresented
employees.
Thus, during the fall of each year from 2000 to 2011,
the Respondent mailed a benefits document, entitled
“Your Raytheon Benefits,” to participating employees.
The document described the available medical and bene-

81 See supra fn. 10.
fit options. The document also described any upcoming
modifications to employees’ benefit programs, premi-
ums, deductibles, and copayments that would be effec-
tive at the beginning of the next year. The Respondent
implemented the announced changes in January of every
year from 2001 to 2012. The changes have included,
without exception, increases in premiums. Other chang-
es included changes in available benefits, medical op-
tions, deductibles, and copayments. According to the
judge, the changes were random and lacked definable
criteria. We disagree. All of the changes were typical of
the changes one regularly sees from year to year in cafe-
teria-style benefit plans. Changes made from year to
year did not materially vary in kind or degree from one
year to the next.82 We find that they constituted a past
practice and a term and condition of employment privi-
leging the Respondent to make further changes in costs
and/or benefits under the Raytheon Plan, provided those
further changes did not materially vary in kind or degree
from what had been customary in the past.83
The Union did not object to any of the changes be-
tween 2000 and 2012 or seek to bargain over them.
There is no dispute that the modifications were author-
ized by the several CBAs and Raytheon Plan documents
referenced therein. However, the fact that the past prac-
tice developed under contractual language authorizing
unilateral action does not gainsay the existence of the
past practice.84
The most recent CBA was set to expire on April 29,
2012. On April 24, 2012, the Respondent and the Union
began negotiations for a successor agreement. Over the
course of the next five months, the parties met 10 times
in an attempt to reach a complete agreement. The Union
submitted proposals to change provisions granting the
Respondent the right to make annual changes to unit em-
ployees’ health insurance. One such proposal was to
strike the “pass through” language in the expiring con-
tract85 and to provide that the Raytheon Plan benefits
(and other benefits) offered to the unit employees would
remain the same for the duration of the contract. The
Union also stated that it was no longer willing to waive
its right to bargain over a mandatory subject of bargain-
ing, such as health benefits. The Respondent rejected the
Union’s proposals to modify the contract language and

82 See Westinghouse, supra, 150 NLRB at 1576; Shell Oil, 149
NLRB at 288.
83 Id.
84 Capitol Ford, 343 NLRB at 1058 fn. 3.
85 The “pass through” language in the expiring contract provided that
the same disability/leave of absence benefits, paid time off, and Ray-
theon Plan offered to all of the approximately 65,000 domestic Raythe-
on employees would be offered to the Fort Wayne bargaining-unit
employees on a year-to-year basis.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD18
asked the Union to provide alternative proposals. The
Union provided alternative language regarding some of
these matters, but it did not modify its health insurance
proposal.
According to the Union, continuing to agree to the
“pass through” language was one of the two biggest is-
sues for the membership. Bargaining continued on the
“pass through” language (and another issue) on April 28,
with no resolution. The contract expired the next day,
and unit employees continued to work under the status
quo terms and conditions of employment. The parties
subsequently met for further negotiations, but they did
not make headway on the “pass through” language issue
and did not reach agreement on a new contract. Howev-
er, they did not reach impasse.
During a negotiating session on September 26, 2012,
the Union solicited the Respondent’s position on whether
the unit employees would be asked to participate in the
upcoming enrollment period for the Raytheon Plan. The
Respondent informed the Union that open enrollment
was about to commence and that it would proceed as
planned for all Raytheon employees based on the Re-
spondent’s belief that this was required by the terms of
the expired contract. The Union asked the Respondent to
exclude the unit employees from the upcoming open en-
rollment period. The Respondent rejected this request.
Subsequently, the Respondent announced changes to the
2013 benefit package in the “Your Raytheon Benefits”
document sent to all domestic employees, including the
unit employees at the Fort Wayne facility, in the fall of
2012. The parties have not held a negotiating session
since September 2012.
On January 1, 2013, the Respondent, over the objec-
tion of the Union, implemented several changes to the
Raytheon Plan, thereby modifying the Raytheon Plan for
all employees, including the unit employees. The vari-
ous modifications included, among other things, the ex-
pansion of the Plan’s “wellness reward” and the conver-
sion of a medical insurance plan into a health savings
account. Acting on an unfair labor practice charge filed
by the Union, the General Counsel issued a complaint
alleging that the Respondent’s announcement and im-
plementation of the changes violated Section 8(a)(5) and
(1).
On these facts, and consistent with Katz and longstand-
ing Board precedent embodied in the Shell Oil line of
cases, the Courier-Journal cases, Capitol Ford, and Bev-
erly II—which we have reinstated today—we find that
the Respondent’s 2013 changes were lawfully imple-
mented consistent with its “long-standing practice.”86

86 Katz, 369 U.S. at 746.
The Respondent’s unilateral changes to unit employees’
benefits in January 2013, after the parties’ CBA had ex-
pired, maintained the status quo created by the Respond-
ent’s past practice of making annual modifications to unit
employees’ costs and/or benefits under the Raytheon
Plan in January of every year from 2001 to 2012. The
changes made in 2013 did not materially vary in kind or
degree from the changes made in prior years, the changes
were made at the same time—January—as in past years,
and the changes applied to unit and nonunit employees
alike. And because the 2013 changes themselves were
lawfully implemented, the Respondent’s announcement
of those changes in the fall of 2012 was also lawful.
Two other considerations deserve further comment
here.
First, the DuPont majority disregarded the fact that
parties have a particular need for certainty and predicta-
bility, which the Supreme Court emphasized in First
National Maintenance,87 when dealing with medical ben-
efits like those at issue here. We do not at all suggest
that because of the importance of medical benefits,
changes involving such benefits warrant a departure from
or exception to the bargaining obligations imposed by the
Act. If anything, the importance of these benefits—no
less than wages—warrants vigilance by the Board to en-
sure that parties satisfy their bargaining obligations.
However, we believe the Board should recognize that the
Katz holding—permitting unilateral employer actions
that do not constitute a “change” because they do not
materially vary in kind or degree from actions taken pre-
viously—is sufficiently flexible to accommodate actions
that involve significant complexity and thus require ad-
vance planning, provided, of course, that the employer
acts consistently with its past practice. These considera-
tions are especially relevant in the instant case, given the
existence of fixed annual enrollment periods, the partici-
pation by represented employees in benefit plans that
applied throughout the company, and the lack of certain-
ty when bargaining for a successor contract might re-
sume, let alone conclude.
Second, concerns about the Union being excluded
from bargaining over actions that are consistent with past
practice are misplaced. Such concerns have been ad-
dressed by Congress in Section 8(d) and 8(a)(5) of the
Act, by the Supreme Court in Katz and other cases, and
by the Board in many decisions, including Shell Oil and
Westinghouse. Under existing law, even when an em-
ployer’s past practice permits the employer to take the
same or similar actions unilaterally under Katz, the em-
ployer is required under Section 8(a)(5) to bargain with

87 See text accompanying fn. 80, supra.
RAYTHEON NETWORK CENTRIC SYSTEMS 19
the union upon request over the mandatory subject of
bargaining at issue in the actions being taken unilateral-
ly—and indeed, over those very actions (although the
employer may still act unilaterally). This duty to bargain
upon request over mandatory subjects, which includes
matters that may be unilaterally implemented by an em-
ployer under Katz, is unaffected by any past practice, and
an employer’s refusal to engage in such requested bar-
gaining clearly constitutes a violation of Section
8(a)(5).88
F. Response to the Dissent
There is no merit in our dissenting colleagues’ view
that we have announced a new standard. Rather, we are
merely reinstating the law that existed for many years
prior to the DuPont decisions. In this regard, our dissent-
ing colleagues are clearly incorrect when they assert that
today’s decision and case law that preceded the Board’s
DuPont rulings are contrary to the treatment of past prac-
tice in the Supreme Court’s Katz decision.89 As ex-

88 The allegations here, however, were litigated solely under a Katz
“unilateral change” theory.
89 As noted previously, if our dissenting colleagues dispute the cor-
rectness of our description of the Supreme Court’s Katz decision, their
contentions are plainly without merit. See the discussion in fn. 24,
supra. Furthermore, numerous Board and court cases indicate—and we
restate today—that the existence of “discretion” does not mean that
particular actions constitute a change requiring advance notice and the
opportunity for bargaining. Rather than turning on the existence or
non-existence of discretion, the Board and the courts have repeatedly
held that actions constitute a change, and require notice and the oppor-
tunity for bargaining, only when the actions are a “departure from the
norm,” Westinghouse Electric (Mansfield Plant), 150 NLRB at 1576, or
“materially var[y] in kind or degree from what had been customary in
the past,” Shell Oil, 149 NLRB at 288. See also Westinghouse Electric
(Mansfield Plant), 150 NLRB at 1576–1577 (stating the test as whether
the actions “materially varied in kind or degree from that which had
been customary in the past” or “var[ied] significantly in kind or degree
from what had been customary under past established practice”); Gor-
man & Finkin, supra fn. 23 and accompanying text (under Katz, an
“employer modification” that is consistent with “any regular and con-
sistent past pattern of change” is “not a ‘change’ in working conditions
at all”). Indeed, the dissent concedes, as it must, that actions involving
“some discretion” have been held not to require notice and the oppor-
tunity for bargaining where, for example, wage increases were con-
sistent with an established practice. See infra, slip op. at 30, quoting
Central Maine Morning Sentinel, 295 NLRB at 379. In the instant
case, the Respondent’s past practice was fixed as to timing (changes
occurred annually in January from 2001 to 2012) and as to regularity
(changes were made in each of those years) with premium increases
occurring every year. Further, the changes were of the same kind and
degree each year, consistently addressing premium increases and bene-
fits availability. See DuPont v. NLRB, 682 F.3d at 68 (past practice
defense established where “changes were similar in scope to those it
had made in previous years”). Finally, the Respondent’s discretion was
significantly constrained by the requirement that the benefits plan of-
fered to the 35 unit employees would be the same plan offered on the
same basis to all of Raytheon’s 65,000 domestic employees. See id. at
68–69 (noting that the employer’s discretion was limited by the re-
quirement of like treatment of union and nonunion employees). There-
plained above, our decision today is consistent with Katz,
along with decades of Board and court cases that have
consistently applied Katz in the same manner we apply it
today. Indeed, if the Supreme Court’s Katz decision had
been misapplied in earlier Board cases—such as Shell
Oil, Westinghouse Electric (Mansfield Plant), Winn-
Dixie Stores, Beverly II, Capitol Ford, and Courier-
Journal—the D.C. Circuit would not have given the
Board the option of adhering to the treatment of past
practice reflected in these cases. Thus, in the instant
case, the Board merely considers the same options that
the D.C. Circuit presented when remanding the DuPont
cases to the Board, and approves and reinstates the
treatment of past practice in the above-cited cases. There
is nothing unprecedented or improper about this type of
policy change. “It is a fact of life in NLRB lore” that the
Board’s interpretation of the Act will “invariably fluctu-
ate with the changing compositions of the Board.” Epi-
lepsy Foundation of Northeast Ohio v. NLRB, 268 F.3d
1095, 1097 (D.C. Cir. 2001). Congress created the
Board with five members whose terms are staggered so
that a different member’s term expires every year, and
the Board in recent years has exhibited no reluctance to
modify well-established principles involving many of the
most fundamental aspects of the Act.
Our decision today reflects a reasoned re-evaluation
and rejection of the prior Board majority’s decision in
DuPont. We believe that decision improperly departed
from fundamental principles governing past practice and
the duty to bargain. Accordingly, based on the consider-
ations described at length above, we overrule DuPont
and reinstate the legal principles that governed this area
before DuPont was decided.
Conclusion
“When changing existing law, the Board should first
endeavor to do no harm: we should be vigilant to avoid
doing violence to undisputed, decades-old principles that
are clear, widely understood, and easy to apply.”90 In
DuPont, the majority ignored this advice by taking a
well-known term that that most people understand—the
word change—and instead of simply comparing what the
employer did now to what it did in the past, set forth a
standard under which the Board would have been re-
quired to embark on a detailed examination of past con-
tracts going back years, perhaps decades, to determine

fore, the structure and design of Respondent’s benefits program—
which applied to an extremely large number of participants—
constituted a significant limitation on the Respondent’s discretion when
evaluating changes affecting the 35-employee bargaining unit at issue
here.
90 Purple Communications, Inc., 361 NLRB 1050, 1067 (2014)
(then-Member Miscimarra, dissenting) (emphasis added).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD20
what contracts were in effect at what times, what em-
ployer actions occurred when, whether past actions were
taken pursuant to a management-rights clause or other
contractual waiver language, and possibly whether the
past actions predated the earliest contract.
In our view, this makes no sense, and the Board’s de-
cision in DuPont was unsupported by the Act as inter-
preted in the Supreme Court’s Katz decision. As stated
at the outset, in contrast to the majority’s analysis in
DuPont, we believe cases of the sort before us today in-
volve a simple question with a straightforward answer.
Under Katz, an employer must provide notice and the
opportunity for bargaining before making a “change” in
employment matters. It is equally clear, as demonstrated
by innumerable Board and court decisions interpreting
Katz, that bargaining is not required when no “change”
has occurred. Where, as here, the employer takes actions
that are not materially different from what it has done in
the past, no “change” has occurred and the employer’s
unilateral actions do not violate Section 8(a)(5) of the
Act.
Again, even when new actions taken by the employer
are consistent with past practice and therefore lawfully
taken, the union’s right to request bargaining regarding
all mandatory subjects—including actions the employer
may lawfully take unilaterally—remains intact and unaf-
fected, and we in no way question the well-established
principle that the employer remains bound by its duty to
bargain upon request concerning any and all mandatory
subjects, without regard to any past practice that may
exist privileging unilateral action.91
For these reasons, we overrule DuPont and return to
the rule embodied in the Shell Oil line of cases, the Cou-
rier-Journal cases, Capitol Ford, and Beverly II. And as
described above, under this framework the Respondent
did not violate the Act by announcing or making the
changes in costs and/or benefits under the Raytheon Plan
described above without providing the Union advance
notice and the opportunity for bargaining.
ORDER
The complaint is dismissed.
Dated, Washington, D.C. December 15, 2017
______________________________________
Philip A. Miscimarra, Chairman

91 See fns. 11, 31, 35 & 53, supra and accompanying text. Again, the
employer’s conventional duty to engage in bargaining upon request is
subject to certain other potential exceptions, but is unaffected by past
practice. See fn. 11, supra.
______________________________________
Marvin E. Kaplan, Member
______________________________________
William J. Emanuel, Member
(SEAL) NATIONAL LABOR RELATIONS BOARD
MEMBER KAPLAN, concurring.
I join in the decision today to overrule the Board’s
holding in E.I. du Pont de Nemours, 364 NLRB No. 113
(2016) (DuPont). I am writing separately, however, to
express my support for an alternative rationale, not raised
by the Respondent, that would also support a finding that
the Respondent’s modifications to the Raytheon Plan on
January 1, 2013 did not alter the status quo and that,
therefore, the Respondent did not violate Section
8(a)(5).1
During the negotiations for the 2000 collective-
bargaining agreement (CBA), the parties agreed that unit
employees would be covered by the Raytheon Plan. The
Union agreed to the Raytheon Plan in its entirety, with
the understanding that the Respondent had the right to
alter costs incurred by and/or benefits received by bar-
gaining-unit members under the plan pursuant to the res-
ervation of rights provision in the plan documents and
language governing the plan in the 2000–2005 CBA.
The language in the 2000–2005 CBA provided, among
other things, that “[e]mployee contributions for the Med-
ical/Vision Plan [under the Raytheon Plan] will not ex-
ceed the rates paid by salaried employees at our Ft.
Wayne facilities.” Further, in the 2005–2009 and 2009–
2012 CBAs, the language in the respective CBAs pro-
vided that the Raytheon Plan “will be available for [unit]
employees, offered on the same basis as is offered to
salaried employees at the Fort Wayne, Indiana location
from year-to-year.” Every year during the term of the
contract, the Respondent provided unit employees with
coverage under the Raytheon Plan at the same level as
for all other employees under the plan, including changes
made to the plan on an annual basis.
Following the expiration of the parties’ CBA on April
29, 2012, the Respondent was required to maintain the
terms and conditions of employment of the expired CBA
until the parties negotiated a new agreement or bargained

1 Because this argument was not raised by the parties, and is in fact
inconsistent with the parties’ litigation concessions in this matter, I
recognize that the thoughts expressed in this concurrence are dicta.
RAYTHEON NETWORK CENTRIC SYSTEMS 21
in good faith to impasse.2 In my view, pursuant to this
duty to maintain the status quo, the Respondent was re-
quired to continue to provide unit employees with cover-
age under the Raytheon Plan, in its entirety.3 The Re-
spondent was not free to provide the unit employees with
only certain aspects of the Raytheon Plan, nor was the
Respondent free to provide unit employees with different
benefits than that provided to non-unit employees under
the Raytheon Plan on an annual basis. In fact, it seems
clear that, had the Respondent kept in place for unit em-
ployees the specific benefits in place at contract expira-
tion, but then revised the Raytheon Plan benefits for all
other employees, such action would constitute a violation
of the Act. For these reasons, in my view, it is not rea-
sonable to consider the Respondent’s responsibility to
maintain the status quo as a responsibility to maintain
certain, specific benefits that were in place at the time of
the contract expiration. Rather, the Respondent’s status
quo duty was to continue providing the unit employees
with the coverage provided to all employees under the
Raytheon Plan, including annual changes made pursuant
to the terms of the Raytheon Plan itself. 4
It is also my view that the “reservation of rights”
clause in the Raytheon Plan should not be considered a
management-rights provision, at least for the purposes of
the application of Board law pertaining to management-
rights clauses. The Board jurisprudence applying to
management-rights clauses recognizes that these clauses
are understood to be a waiver by the union for the term
of the contract for a wide range of otherwise bargainable
issues that are not expressly covered in the parties’ con-
tract. The “reservation of rights” clause included in the
Raytheon Plan, however, is significantly different. To
begin, it is a discrete, specific, and integral component of

2 See Laborers Health & Welfare Trust Fund v. Advanced Light-
weight Concrete Co., 484 U.S. 539, 544 fn. 6 (1988) (citing NLRB v.
Katz, 369 U.S. 736 (1962)).
3 Thus, the Respondent was required to provide the 35 bargaining
unit employees at the Fort Wayne facility with the same coverage that
was being offered to the Respondent’s approximately 65,000 domestic
employees.
4 Furthermore, the “same basis” included within the CBA itself un-
derscores this view; the parties’ understanding was that the Respondent
would provide the unit employees with benefits under the Raytheon
Plan, including any changes to the general plan that were applicable to
non-unit employees.
The parties could have agreed in the 2009–2012 CBA to additional
restrictions on the Respondent’s authority to make annual changes to
unit employees’ health insurance under the Raytheon Plan. If the par-
ties had negotiated such an agreement, those provisions would have
created a different status quo post-expiration. But that is not what the
parties did here. As discussed above, the Union agreed to the entire
Raytheon Plan during the 2000 negotiations and did not seek any
changes to health insurance until the 2009–2012 CBA expired.
the benefit plan. 5 As discussed above, I do not think it
is appropriate to view an employer’s duty to continue
providing benefits under an established plan as a duty to
continue to apply only certain provisions of that plan.
Furthermore, unlike a management-rights clause which
covers subjects not otherwise addressed in the contract,
the reservation of rights clause in the Raytheon Plan and
the language in the CBA concerning the plan are part of
the benefits plan to which the parties agreed contractual-
ly.6 The Respondent never agreed to provide benefits
under the Raytheon Plan without the unilateral right to
make changes to such plan; it agreed to provide those
benefits with conditions, and those conditions are as
much a part of the parties’ agreement concerning benefits
as are the benefits themselves. It is the Raytheon Plan in
its entirety, and the language in the CBA governing the
plan that is the term and condition of employment and,
under this plan, the Respondent reserved the right to
modify unit employees’ costs and/or benefits. Once the
parties’ CBA expired on April 29, 2012, the status quo
required the Respondent to maintain this term and condi-
tion of employment until the parties negotiated a new
contract.
As mentioned at the outset, the parties did not argue
that the Raytheon Plan language at issue did not consti-
tute a management-rights clause, and therefore I do not
apply this analysis in deciding the instant case. I would,
however, consider this argument in a future appropriate
case.
Dated, Washington, D.C. December 15, 2017
______________________________________
Marvin E. Kaplan, Member
NATIONAL LABOR RELATIONS BOARD
MEMBERS PEARCE and MCFERRAN, dissenting.
Reversing our recent DuPont precedent,1 a newly-
constituted Board majority today gives employers new
power to make unilateral changes in employees’ terms
and conditions of employment after a collective-
bargaining agreement expires. Here, as in other new

5 Accordingly, Beverly Health & Rehabilitation Services, 335 NLRB
635 (2001), enfd. 317 F.3d 316 (D.C. Cir 2003), and similar cases cited
by the dissent are distinguishable because they all involve traditional
management-rights clauses.
6 To the extent that Mary Thompson Hospital, 296 NLRB 1245,
1249 (1989), and other Board precedent have treated a reservation of
rights clause contained within a corporatewide benefit plan as a negoti-
ated management-rights clause waiving a union’s right to bargain over
changes to the plan only for the contract term, I disagree. I would be
open to reviewing those cases in a future appropriate case.
1 E.I. DuPont de Nemours, 364 NLRB No. 113 (2016).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD22
decisions, the majority fails to provide notice and an op-
portunity for briefing, violating an agency norm.2 And it
changes course even though DuPont is currently under
review by the U.S. Court of Appeals for the District of
Columbia Circuit, which had – in a prior remand – plain-
ly indicated that the Board was free to choose the rule
adopted and explained in DuPont.3
With little justification other than a change in the
Board’s composition,4 the majority essentially cuts and
pastes Chairman Miscimarra’s dissent in DuPont into a
new majority opinion. In holding that an employer may
continue to make sweeping discretionary changes in em-
ployment terms even after a contractual provision author-
izing such changes has expired and while the parties are
seeking to reach a new collective-bargaining agreement,
the majority’s decision fundamentally misinterprets the
Supreme Court’s decision in NLRB v. Katz. Indeed, Katz
clearly says the exact opposite: that an employer’s uni-
lateral change violates the duty to bargain under the Na-
tional Labor Relations Act, even where the change is
consistent with a past practice of changes made, if the
changes involve significant employer discretion.
The Board is not free to adopt a position so manifestly
inconsistent with Supreme Court precedent.5 Moreover,
the majority’s new rule is not only foreclosed by Su-

2 As stated by Member McFerran in her Boeing dissent, and adopted
by Member Pearce, “[s]ince at least the 1950’s, the Board has solicited
briefing in some major cases,” and “[i]n the last decade, this has be-
come the Board’s routine practice in significant cases.” 365 NLRB No.
154, slip op. at 31 (2017) (footnote collecting cases omitted). But, over
our objection, the new Board repeatedly has broken with this practice,
for no sound reason. See UPMC, 365 NLRB No. 153 (2017); The
Boeing Co., supra.; Hy-Brand Industrial Contractors, 365 NLRB No.
156 (2017); PCC Structurals, Inc., 365 NLRB No. 160 (2017).
Although the majority emphasizes that DuPont was decided without
inviting amicus briefing, it fails to note that the General Counsel had
expressly asked the Board to revisit precedent, a fact certainly not lost
on persons interested in the development of Federal labor law. Further,
the United States Court of Appeals for the District of Columbia Circuit
had remanded the case to the Board with the express instructions to
decide between two conflicting branches of precedent. See E.I. Du
Pont de Nemours & Co. v. NLRB, 682 F.3d 65, 70 (D.C. Cir. 2012).
Following the remand, in turn, the Board solicited statements of posi-
tions from the parties. Thus, the reversal of precedent in DuPont can-
not fairly be characterized as a surprise to the parties and the public—in
contrast to today’s decision.
3 E.I. Du Pont de Nemours & Co. v. NLRB, 682 F.3d 65 (D.C. Cir.
2012).
4 Of course, the Board has rejected the argument that a change in its
composition is a good reason to reconsider an earlier decision. See
Brown & Root Power & Mfg., Inc., 2014 WL 4302554 (Aug. 29, 2014);
UFCW, Local No. 1996 (Visiting Nurse Health System, Inc.), 338
NLRB 1074, 1074 (2003) (full Board), citing Iron Workers Local 471
(Wagner Iron Works), 108 NLRB 1237, 1239 (1954).
5 See, e.g., Lechmere, Inc. v. NLRB, 502 U.S. 527, 536–537 (1992).
Nor is the Board entitled to judicial deference when it interprets Su-
preme Court precedent. See, e.g., Univ. of Great Falls v. NLRB, 278
F.3d 1335, 1341 (D.C. Cir. 2002).
preme Court authority, it is also impermissible as a poli-
cy choice. As the Supreme Court and other Federal
courts have explained, permitting an employer to make
unilateral changes while negotiations for a new contract
are under way frustrates the process of collective bar-
gaining. The Act demonstrably was intended to “en-
courag[e] the practice and procedure of collective bar-
gaining,” not to undermine it.6 Undermining collective
bargaining to the advantage of employers is precisely
what the majority achieves today. But, for reasons we
will show, that result cannot stand.
I. FACTS
The relevant facts are straightforward. In 1998, the
Respondent instituted a nationwide benefits plan, the
Raytheon Unified Benefits Program (Plan), which in-
cluded health insurance (“Raytheon Medical”). The Plan
documents for these benefits contained the following
reservation of rights language:
[T]he Company reserves the absolute right to amend
the Plan and any or all Benefit Programs incorporated
herein from time to time, including, but not limited to,
the right to reduce or eliminate benefits . . . .
***
[T]he Company reserves the absolute and uncondition-
al right to terminate the Plan and any and all Benefit
Programs, in whole or in part, with respect to some or
all of the Employees.
The Respondent implemented the Plan at all of its facilities
nationwide in 1999, except for the Union-represented Fort
Wayne bargaining unit.
During negotiations for a 2000–2005 collective-
bargaining agreement, the Respondent and Union agreed
to include Fort Wayne unit employees in the Raytheon
Plan. The agreement provided that unit employees are
covered by the Plan under its terms which were de-
scribed in an appendix to the contract—thereby incorpo-
rating the Plan’s reservation of rights provision into the
collective-bargaining agreement. Subsequently, the par-
ties negotiated 2005–2009 and 2009–2012 collective-
bargaining agreements which similarly included Fort
Wayne unit employees in the Raytheon Plan. These
agreements further provided that the plans and benefits
selected by the Respondent “will be available for all em-
ployees, offered on the same basis as is offered to sala-
ried employees at the Ft. Wayne, Indiana, location from
year-to-year.” The parties refer to this “on-the-same-
basis” language as a “pass-through” provision.

6 National Labor Relations Act, Sec. 1, 29 U.S.C. §151.
RAYTHEON NETWORK CENTRIC SYSTEMS 23
Under the collective-bargaining agreements in effect
from 2000–2012, which incorporated the reservation of
rights provision of the Plan, the Respondent retained
“significant discretion” (as stipulated) to modify and/or
terminate the Plan, and the Respondent regularly exer-
cised that discretion. Each year that the contracts were in
effect, the Respondent unilaterally decided what plans
and benefits to offer its employees and the costs of the
benefits to be borne by the employees. Some changes
were intermittent, while others, such as the portion and
amount of health care premiums paid by employees,
changed annually.7 While these collective-bargaining
agreements were in effect, the Respondent did not offer
to bargain with the Union over its changes to the Plan,
and the Union did not object to any of the changes. Dur-
ing this period there was no hiatus between the succes-
sive collective-bargaining agreements that overlapped
with open enrollment periods.
In February 2012, two months before the April 29 con-
tract expiration, the Union notified the Respondent that it
wished to schedule negotiations for a successor agree-
ment. At the outset of negotiations, the Union informed
the Respondent on April 25 that it was no longer willing
to waive its right to bargain over a mandatory subject of
bargaining such as health benefits and that it wished to
eliminate or revise the pass-through language in any fu-
ture agreement. At subsequent bargaining sessions, the
Union proposed several solutions to address health bene-
fits but no headway was made, including exploring
whether unit employees could be insured through the
Union’s health plan. During bargaining on July 26, the
Respondent presented the Union with a last, best and
final offer, with no modification to the pass-through pro-
vision of the expired collective-bargaining agreement.
The Respondent informed the Union that open enroll-
ment for the 2013 Plan benefits period was about to
commence and that it would proceed with announced
changes applicable to all company employees. The Un-
ion requested that the Respondent exclude unit employ-
ees from the open enrollment but the Respondent re-
fused. Without informing the Union about the specifics
of its Plan changes, or providing the Union with an op-
portunity to bargain about them, the Respondent sent a
newsletter to all company employees, including unit em-

7 The employees did not pay a fixed percentage or dollar amount of
the premiums year to year. Among the many changes that the Re-
spondent made as a result of its annual reviews included the introduc-
tion of preferred providers, the addition or deletion of types of cover-
age, alterations in the scope of covered dependents, modifications in
deductibles and co-pays, changes to the administrator for drug or other
coverage, and revisions to eligibility for coverage. The Respondent
unilaterally implemented some of its changes nationwide; others were
imposed regionally, or on an even more limited basis.
ployees, detailing the benefit options available for selec-
tion during the October enrollment period.
On January 1, 2013, the Respondent implemented its
changes to the Plan, over the objection of the Union. It is
undisputed that the parties were not at a bargaining im-
passe when the changes were implemented.
II. DISCUSSION
A. Procedural Background
As noted above, the Board’s 2016 DuPont decision
was prompted by a remand from the D.C. Circuit.8 In the
two remanded cases,9 the Board had found that DuPont
had violated Section 8(a)(5) and (1) of the Act by unilat-
erally making discretionary, post-contract expiration
changes to employees’ health benefits, notwithstanding
that DuPont, pursuant to a management-rights clause
incorporated into the expired agreements, had a practice
of making such changes only during the periods that
those agreements were in effect. In the court’s view, the
Board’s findings departed—without explanation—from
certain precedent holding that, after an agreement ex-
pires, an employer may continue to act unilaterally pur-
suant to an established past practice, even if the practice
had its genesis in a contractual management-rights clause
or other contractual waiver of the union’s right to bar-
gain.10 The court nevertheless acknowledged that the
Board’s findings were consistent with earlier cases in
which the Board had held that unilateral action in those
circumstances was unlawful.11
Faced with those conflicting lines of precedent, the
court remanded both cases to the Board to explain its
position on this issue. More specifically, the court di-
rected the Board either to conform its precedent to the
cases that appeared to permit DuPont’s unilateral post-
expiration changes or to explain why it was returning to
the earlier cases under which DuPont’s unilateral action
would be unlawful. The court thus gave the Board a
choice, and in its 2016 decision the Board chose the sec-
ond option.12

8 E.I. Du Pont de Nemours & Co. v. NLRB, 682 F.3d 65.
9 E.I. Du Pont de Nemours, Louisville Works, 355 NLRB 1084
(2010), and E.I. Du Pont de Nemours and Co., 355 NLRB 1096 (2010).
10 Beverly Health & Rehabilitation Services, 346 NLRB 1319
(2006); Capitol Ford, 343 NLRB 1058 (2004); and Courier-Journal,
342 NLRB 1093 (2004).
11 Register Guard, 339 NLRB 353 (2003); and Beverly Health &
Rehabilitation Services, 335 NLRB 635 (2001), enfd. in relevant part
317 F.3d 316 (D.C. Cir. 2003).
12 The Board thus reaffirmed the rule expressed in Register Guard,
above, 339 NLRB 353, and Beverly Health & Rehabilitation Services,
above, 335 NLRB 635, that a contractual management-rights clause—
along with any discretionary past practices it might have authorized—
does not survive the expiration of the contract absent evidence that the
parties intended it to do so. At the same time, the Board overruled
Beverly Health & Rehabilitation Services, above, 346 NLRB 1319,
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD24
On remand, and after soliciting position statements
from the parties, the DuPont Board carefully explained
its decision to return to the earlier cases identified by the
court and reaffirmed its findings that DuPont’s discre-
tionary, post-expiration unilateral changes to employees’
health benefits violated the Act. The Board firmly
grounded its decision in the status quo principles estab-
lished in Katz and Litton,13 and the Act’s overarching
policy to promote collective bargaining. As the Board
explained, in the post-contract expiration context, the
“status quo” envisioned by Katz and Litton consists, with
few exceptions, of the terms and conditions of employ-
ment existing on the date the contract expired.14 And, as
the Board emphasized, maintaining that “status quo” is
vital to protecting the “continuing statutory bargaining
duty that unilateral actions would circumvent. Any other
approach would undermine collective bargaining by
making it harder for the parties to reach agreement, while
simultaneously undermining the union as the representa-
tive of the unit employees.”15
Having reviewed the rationale of DuPont, and the ma-
jority’s arguments for overruling it, we have no doubt
that the DuPont Board chose wisely between the options
offered by the District of Columbia Circuit. According-
ly, for the reasons discussed below, we would reaffirm
that choice today and find that the Respondent violated
its statutory duty to bargain when it unilaterally altered
unit employees’ medical benefits following the expira-
tion of the parties’ agreement.
B. The Duty to Bargain
As the Board stated in DuPont, a fundamental policy
of the Act is to protect and promote the practice of col-
lective bargaining.16 In furtherance of this statutory poli-
cy, Sections 8(a)(5) and 8(d) of the Act require employ-
ers to bargain collectively and in good faith with respect
to wages, hours, and other conditions of employment.17
An employer’s duty to bargain in good faith, however,
includes more than a willingness to engage in negotia-
tions with an open mind and with a purpose of reaching a
collective-bargaining agreement with the union that rep-
resents its employees. The duty also includes the obliga-
tion to refrain from unilaterally changing established

Capitol Ford, above, 343 NLRB 1058, and Courier-Journal, above,
342 NLRB 1093, to the extent that those cases were to the contrary.
The Board also specifically overruled Courier-Journal’s finding that
discretion is limited when changes to benefits must be the same for
unionized and for unrepresented employees—finding that to be “no
limitation at all.” E.I. Du Pont, supra, slip op. at 9.
13 Litton Financial Printing Div. v. NLRB, 501 U.S. 190 (1991).
14 E. I. Du Pont, supra, slip op. at 5.
15 Id.
16 364 NLRB No. 113, slip op. at 4.
17 Id.
terms and conditions of employment without prior notice
to and bargaining to an impasse with the union. Katz;18
Bottom Line Enterprises.19 This prohibition against uni-
lateral changes extends both to negotiations for an initial
contract and for successor agreements. Litton.20
The Supreme Court has explained that unilateral
changes made during contract negotiations injure the
very process of collective bargaining and “must of neces-
sity obstruct bargaining, contrary to the congressional
policy.” Katz.21 “[I]t is difficult to bargain if, during
negotiations, an employer is free to alter the very terms
and conditions that are the subject of those negotiations.”
Litton.22 Indeed, “an employer’s unilateral change in
conditions of employment under negotiation . . . is a cir-
cumvention of the duty to negotiate which frustrates the
objectives of § 8(a)(5) much as does a flat refusal.”
Katz.23
As the Board recognized in DuPont,24 permitting an
employer to make unilateral changes during bargaining
would have a deleterious effect on the bargaining process
by requiring the union to bargain to regain benefits lost
through the employer’s unilateral action.25 Placing a
union in this weakened position fundamentally under-
mines the process of collective bargaining “and interferes
with the right of self-organization by emphasizing to the
employees that there is no necessity for a collective bar-
gaining agent.” Honeywell Int’l, Inc. v. NLRB.26 In
McClatchy Newspapers,27 the Board explained that the
employer’s “ability to exercise its economic force” by
unilaterally imposing changes, and thereby excluding the
union from negotiating them, “disparage[s] the [union]
by showing, despite its resistance to th[e] proposal, its
incapacity to act as the employees’ representative in set-
ting terms and conditions of employment.” It poses the
very real danger that the unilateral action will destabilize
relations by undermining a union’s institutional credibil-
ity. Aaron Bros. Co. v. NLRB.28 As described by the
influential labor law scholar Archibald Cox:
[w]hen [unilateral action is] taken during negotiations
or upon subjects on which the union wishes to bargain

18 369 U.S. at 743.
19 302 NLRB 373, 374 (1991).
20 501 U.S. at 198.
21 369 U.S. at 747.
22 501 U.S. at 198.
23 369 U.S. at 743.
24 364 NLRB No. 113.
25 Id., slip op. at 12.
26 253 F.3d 125, 131 (D.C. Cir. 2001) (quoting May Dep’t Stores Co.
v. NLRB, 326 U.S. 376, 385 (1945)).
27 321 NLRB 1386, 1391 (1996), enfd. 131 F.3d 1026 (D.C. Cir.
1997), cert. denied 524 U.S. 937 (1998).
28 661 F.2d 750, 753 (9th Cir. 1981).
RAYTHEON NETWORK CENTRIC SYSTEMS 25
it weakens the union by showing the employees that it
is useless to try to negotiate.
Archibald Cox, The Duty To Bargain in Good Faith, 71
Harv. L. Rev. 1401, 1423 (1958).
In addition to refraining from unilaterally changing
terms and conditions of employment during negotiations,
an employer has the corollary duty to maintain terms and
conditions of employment during bargaining. Litton.29
Where, as in this case, the parties were engaged in bar-
gaining for a successor contract, the status quo consists
of the terms and conditions that existed at the time the
contract expired. Although these terms and conditions
“are no longer agreed-upon terms; they are terms im-
posed by law.”30 This is so because “an expired contract
has by its own terms released all its parties from their
respective contractual obligations.”31 The “rights and
duties under the expired agreement ‘retain legal signifi-
cance because they define the status quo’ for purposes of
the prohibition on unilateral changes.”32 It is this status
quo that constitutes the baseline from which negotiations
for a new agreement will occur, and from which the un-
ion will base its bargaining proposals.
There are two limited exceptions to the foregoing prin-
ciples which, if established by an employer, will preclude
finding a Section 8(a)(5) violation. Under the first ex-
ception, an employer in certain narrow circumstances
may implement unilateral changes to terms and condi-
tions of employment if it has an established past practice
of doing so. Katz;33 Post-Tribune Co.34 As described
below, the past practice exception is narrowly construed
(Adair Standish Corp. v. NLRB),35 and an employer
claiming this exception bears a heavy burden of proof.
NLRB v. Allis-Chalmers Corp.;36 Eugene Iovine.37 The
second exception is waiver. Under this exception, if the
evidence establishes that a union has waived its statutory
right to bargain about a mandatory subject of bargaining,
an employer may lawfully implement changes to it.
Provena St. Joseph Medical Center.38
The majority contends that the Respondent lawfully
implemented unilateral changes to its healthcare Plan
benefits in 2013, following the expiration of the 2009–
2012 contract, pursuant to an established past practice.

29 501 U.S. at 206.
30 Id.
31 Id.
32 Id. (emphasis in original).
33 369 U.S. at 746.
34 337 NLRB 1279 (2002).
35 912 F.2d 854, 864 (6th Cir. 1990).
36 601 F.2d 870, 875–876 (5th Cir. 1979).
37 328 NLRB 294, 294–295 fn. 2 (1999), enfd. 1 Fed. Appx. 8 (2d
Cir. 2001).
38 350 NLRB 808, 811 (2007).
As we explain, the changes the Respondent imposed,
based on the Union’s agreement to grant the Respondent
broad discretion to make changes to employee health
benefits during the term of the contract, do not constitute
an established past practice under Katz because they
were informed by a large measure of discretion. In addi-
tion, the waiver defense is not available to the Respond-
ent because, as we explained in DuPont, an employer’s
contractual right to make unilateral changes, pursuant to
an agreed upon management-rights provision, does not
survive contract expiration.
C. Past Practice
1. Katz establishes the analytical framework for the
past practice exception
On one point we agree with the majority: “the Board
is bound by the Act, and we must adhere to Supreme
Court decisions, including . . . Katz,” which defines the
contours of the past-practice doctrine. It is on what Katz
holds that we part ways. In Katz, the Supreme Court
held that the employer violated Section 8(a)(5) in three
respects during bargaining for an initial contract: (1) uni-
laterally announcing a change in its sick leave policy, (2)
unilaterally instituting a new system of automatic wage
increases, and (3) unilaterally granting merit wage in-
creases. After finding that the unilateral changes with
respect to the first two subjects “plainly frustrated the
statutory objective of establishing working conditions
through bargaining” and “conclusively manifested bad
faith in the negotiations,”39 the Katz Court considered
whether the employer’s unilaterally instituted merit in-
creases should be treated as lawful because they were
consistent with a “long-standing practice” of granting
such increases. The Court firmly rejected this past prac-
tice defense.
This action too must be viewed as tantamount to an
outright refusal to negotiate on that subject, and there-
fore as a violation of §8(a)(5), unless the fact that the
January raises were in line with the company’s long-
standing practice of granting quarterly or semiannual
merit reviews – in effect, were a mere continuation of
the status quo – differentiates them from the wage in-
creases and the changes in the sick leave plan. We do
not think it does. Whatever might be the case as to so-
called ‘merit raises’ which are in fact simply automatic
increases to which the employer has already committed
himself, the raises here in question were in no sense au-
tomatic, but were informed by a large measure of dis-
cretion. There simply is no way in such case for a un-
ion to know whether or not there has been a substantial

39 369 U.S. at 744, 745.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD26
departure from past practice, and therefore the union
may properly insist that the company negotiate as to the
procedures and criteria for determining such increas-
es.40
Due to the discretionary, non-automatic nature of the
merit raises, the Court held that “the fact that the raises
were in line with the company’s long-standing practice”
did not “differentiate[] them” from the unilateral changes
to the sick leave plan and institution of an automatic
wage increase that were also found unlawful.41 This is
because changes made to a mandatory subject of bargain-
ing that are informed by a large measure of discretion are
subject to the duty to bargain. As the Katz Court ex-
plained, there “simply is no way in such case for a union
to know whether or not there has been a substantial de-
parture from past practice,” and this “of necessity ob-
struct[s] bargaining,” when the parties are attempting to
reach a negotiated agreement.42
As the Board discussed in DuPont, the Board and
courts have consistently adhered to these principles in
Katz by holding that “employers may act unilaterally
pursuant to an established practice only if the changes do
not involve the exercise of significant managerial discre-
tion.”43 The importance of that precedent and the majori-
ty’s failure to acknowledge it here, compels us to reiter-
ate it. We start with the decisions in State Farm Mutual
Auto Insurance Co.44 and Oneita Knitting Mills, Inc.45 In
both cases, applying Katz, the Board found that although
the employers had a past practice of granting merit in-
creases, they violated Section 8(a)(5) by continuing their
practice of unilaterally granting the increases during con-
tract negotiations, because the increases were informed
by a significant degree of discretion. In Oneita Knitting,
the Board explained that the employer could not “exer-
cise his discretion” in continuing to grant the merit raises
during contract bargaining with the union. Rather,
“[w]hat is required is a maintenance of preexisting prac-
tices, i.e., the general outline of the program, however
the implementation of that program (to the extent that
discretion has existed in determining the amounts or tim-
ing of the increases), becomes a matter as to which the
bargaining agent is entitled to be consulted.”46
In the years following these decisions, Katz’s emphasis
on the degree of employer discretion exercised in prior
unilateral changes has been the foundation underlying

40 Id. at 746–747 (emphasis added).
41 Id.
42 Id.
43 364 NLRB No. 113, slip op. at 7 (emphasis in original).
44 195 NLRB 871, 889–890 (1972).
45 205 NLRB 500, 500 fn. 1, 502–503 (1973).
46 Id. at fn. 1.
the Board’s narrow definition of what constitutes a past
practice. What the Board has required is “reasonable
certainty” as to the purported practice’s “timing and cri-
teria.” Eugene Iovine, Inc.47 In Eugene Iovine, for ex-
ample, the Board found that the employer failed to estab-
lish a past practice of recurring reductions of employees’
work hours because the alleged practice lacked a “‘rea-
sonable certainty’ as to timing and criteria” and the em-
ployer’s discretion to reduce hours “appear[ed] to be
unlimited.”48 Accord: Adair Standish Corp.49
The Board has applied these same principles to other
mandatory subjects of bargaining, like the healthcare
benefits at issue here. Thus, in Dynatron/Bondo Corp.,50
the Board found that the employer unlawfully increased
employee contributions to health insurance premiums
without bargaining where the amounts employees paid in
prior years did not follow a fixed percentage and the em-
ployer retained “total discretion” over what employees
were required to contribute. Similarly, in Garrett Flexi-
ble Products, Inc.,51 the Board found that the employer
unlawfully increased health insurance premiums paid by
unit employees where the employer had exercised sub-
stantial discretion in allocating the increases between
itself and employees. Accord: Mid-Continent Concrete52
and Maple Grove Health Care Center.53 By contrast,
where the purported practice was fixed as to timing and
criteria, thereby limiting the employer’s discretion, con-
tinued unilateral changes in accord with that practice
have been found lawful. In Post Tribune Co., for exam-
ple, the Board found that the employer “had a consistent,
established past practice of allocating health insurance
premiums on an 80/20-percent and 60/40-percent basis”;
accordingly, it did not violate Section 8(a)(5) by unilat-
erally allocating premium increases at the same fixed
ratio during bargaining.54 The Board reached the same
conclusion in Luther Manor Nursing Home,55 where, in
accordance with its past practice of fixed automatic
changes, the employer paid one third of an insurance
premium and required employees to pay the remaining

47 328 NLRB at 294, 297.
48 Id. at 294.
49 292 NLRB 890, 890 fn. 1 (1989) (because of its exercise of discre-
tion, employer failed to establish past practice with respect to its recur-
ring implementation of economic layoffs), enfd. in relevant part 912
F.2d 854 (6th Cir. 1990).
50 323 NLRB 1263, 1265 (1997), enfd. in relevant part 176 F.3d
1310 (11th Cir. 1999).
51 276 NLRB 704 (1985).
52 336 NLRB 258, 259, 268 (2001), enfd. 308 F.3d 859 (8th Cir.
2002).
53 330 NLRB 775, 780 (2000).
54 337 NLRB at 1280.
55 270 NLRB 949, 959 (1984), affd. 772 F.2d 421 (8th Cir. 1985).
RAYTHEON NETWORK CENTRIC SYSTEMS 27
two thirds. Accord: House of the Good Samaritan56 and
A-V Corp.57
The courts have also held, in agreement with the
Board’s application of Katz, that an employer practice of
unilateral changes to a mandatory subject of bargaining,
marked by significant managerial discretion, does not
establish a past practice that permits further unilateral
changes. In City Cab Co. of Orlando v. NLRB,58 the
Eleventh Circuit affirmed the Board’s finding that the
employer violated Section 8(a)(5) by unilaterally chang-
ing, over a 2-year period, its drivers’ taxicab rental rates.
The court rejected the employer’s defense that the
changes “were merely the continuation of established
practices which operated merely to maintain the status
quo,” finding that the employer “had not committed itself
to any fixed practice” and had “exercised an impermissi-
ble degree of discretion” when it both increased and de-
creased the rental charges to its drivers.59 To the extent
that the employer “had any practice at all,” the court
found that “it was simply one of constant change.”60
Similarly, the Fifth Circuit in NLRB v. Allis-Chalmers
Corp. rejected the employer’s argument that its unilateral
wage increases and benefit improvements, found unlaw-
ful by the Board, were privileged based on a past practice
of periodic surveys of wages and benefits.61 The court
held that the employer failed to meet its “heavy burden”
of showing that its unilateral actions were “purely auto-
matic and pursuant to definite guidelines,” noting that the
wage increases and benefit improvements were not au-
tomatic but involved “considerable discretion.”62 The
Ninth Circuit decision in Aaron Brothers Co. v. NLRB63
is particularly instructive. The Board had found that the
employer violated Section 8(a)(5) by implementing a
wage increase during bargaining, but the court remanded
the case to address whether the increase was lawfully
instituted “pursuant to a longstanding company policy.”
The court stated that in determining that question, the
Supreme Court in Katz:
has counseled lower courts to examine the degree to
which an employer has discretion to award a benefit or
determine its size. The greater the discretion, the Court
has reasoned, the greater the danger unilateral action

56 268 NLRB 236 (1983).
57 209 NLRB 451, 452 (1974).
58 787 F.2d 1475, 1479–1480 (11th Cir. 1986).
59 Id. at 1478–1480.
60 Id. at 1480.
61 601 F.2d 870.
62 Id. at 875.
63 661 F.2d 750.
will destabilize relations by undermining a union’s in-
stitutional credibility.64
Thus, the court directed the Board to give consideration to
“whether the benefit change was fixed by an established
formula containing variables beyond the employer’s imme-
diate influence.”65 Because “[n]othing in th[e] record sug-
gest[ed] that [the employer] relie[d] upon pre-established
guidelines or formulae in deciding whether to grant a wage
increase or in determining its size,” and because the record
indicated instead that the wage decision was the product of
an “ad hoc decisionmaking process,” the court remanded
the issue to the Board “to determine whether the increase
resulted from nondiscretionary standards and guidelines.”66
2. The Respondent’s discretionary unilateral changes do
not constitute a past practice under Katz
Applying these principles here, we start with the stipu-
lated fact that the Respondent’s changes to its healthcare
Plan benefits since 2001 were based on “significant dis-
cretion.” That fact, alone, defeats the Respondent’s past
practice defense. But even absent this admission, the
factual recitation, above, firmly supports the judge’s
finding that no past practice was established. In accord
with the reservation of rights clause in each contract that
granted the Respondent the absolute right to amend Plan
benefits, the judge found that the Respondent gave its
health benefits professionals “free rein to come up with
whatever benefits they think is best” for employees.
What they came up with and what was unilaterally im-
plemented by the Respondent during the terms of succes-
sive contracts from 2001–2012 included increases to
employee copayments for emergency room treatment,
outpatient surgeries, and specialist visits, as well as in-
creases to deductibles and other out-of-pocket expenses.
The Respondent also added plan options, eliminated oth-
ers, changed eligibility requirements, and merged some
plans. Additionally, increases to medical premiums were
made every year, without any fixed percentage ratio,
starting in 2002 with the Respondent paying 85 percent
of the premiums to employees’ 15 percent, culminating

64 Id. at 753 (internal citations omitted).
65 Id.
66 Id. at 754.
Other circuit courts are in accord. See Adair Standish Corp. v.
NLRB, 912 F.2d at 864 (6th Cir.) (citing Katz, no past practice where
changes were “‘unpredictably episodic’ as well as ‘ad hoc and highly
discretionary’”); NLRB v. John Zink Co. 551 F.2d 799, 801–802 (10th
Cir. 1977) (unilateral changes to job classifications and merit increases
during bargaining unlawful under Katz because they involved manage-
rial discretion); E.I. DuPont De Nemours and Co. v. NLRB, 682 F. 3d at
67 ( citing Katz, “the Act does not permit a unilateral change ‘informed
by a large measure of discretion’”); NLRB v. Blevins Popcorn Co., 659
F.2d 1173, 1189 (D.C. Cir. 1981) (same).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD28
in a 75 percent to 25 percent employer-to-employee ratio
by the end of the 2009–2012 contract.67
The judge properly concluded that based on the broad
discretion afforded the Respondent under the Plan, in-
cluding the discretion to eliminate benefits entirely, and
the Respondent’s myriad, far-ranging changes, the Re-
spondent failed to show that its changes to the healthcare
Plan benefits were based on any cognizable fixed criteria
that established a past practice. As to the premiums, he
found that the percentages “changed on an ad hoc basis”
such that employees and the Union were unable to pre-
dict those changes, “and since there was no formula or
criteria for the changes they could not be explained by
the Union to the bargaining unit.” Similarly, the judge
found that the changes to specialist co-pays, emergency
room co-pays, and prescription costs were “completely
random.” He found that the contractual limitation in the
pass-through clause requiring that employees be offered
healthcare benefits “on the same basis as” offered to un-
represented employees imposed no discretionary limita-
tion on the Respondent to act unilaterally, noting that
“[t]ying bargaining unit employees’ benefits to those of
non-bargaining unit employees who are unrepresented . .
., in effect removes them from represented status and
undermines the Union.”68 Accordingly, consistent with
our precedent, he found that the Respondent violated
Section 8(a)(5) by unilaterally implementing the 2013
changes to the Plan healthcare benefits over the objection
of the Union.
3. The majority’s newly-fashioned standard is predicated
on a misreading of Katz and is incompatible with the past
practice doctrine
The wealth of precedent establishes that discretionary
unilateral changes to a mandatory subject of bargaining
that are not fixed as to timing and criteria do not estab-
lish a past practice that permits continued implementa-
tion of such changes postcontract expiration. Neverthe-
less, the majority states that we (and by extension, the
Board and courts) have been wrong for years in interpret-
ing Katz this way. The majority, which does not dispute
that the Respondent here exercised broad discretion over
the years when it implemented changes to health bene-
fits, asserts that this discretion is irrelevant in determin-
ing whether an employer has implemented an unlawful

67 The fact that premium changes were consistently made every year
does not establish a past practice. Daily News of Los Angeles v. NLRB,
73 F.3d 406, 412 fn.3 (D.C. Cir. 1996) (fixed timing alone does not
establish a past practice).
68 As noted in DuPont, because employers are free to change and
even entirely eliminate benefits to employees who are not represented
by a union, there are no fixed criteria limiting the employer’s discre-
tion.
unilateral change under Katz. Instead, it states “the only
relevant factual question is whether the employer’s ac-
tion is similar in kind and degree to what the employer
did in the past.” Slip op. at (13). This statement indi-
cates a basic misunderstanding of the issue in Katz.
By posing the issue this way, the majority, in effect,
reads Katz as finding that the unilateral merit increases
therein were unlawful because they were not “similar in
kind and degree to what the employer did in the past,”
but would have been lawful had the increases been simi-
lar in kind and degree to the past increases. This is simp-
ly incorrect, as the plain language of the Supreme
Court’s decision establishes. As discussed above, the
Supreme Court noted that the merit increases were “in
line with the company’s long-standing practice” or, as
the majority phrases it, “similar in kind and degree,” but
nevertheless found them unlawful because of their dis-
cretionary nature.69

69 This is not the first time the meaning of Katz has been clouded by
a misreading of its plain terms. Then-Member Miscimarra’s dissent in
DuPont, upon which the majority here relies in large part, was predi-
cated upon an incomplete quotation of the Supreme Court’s language in
Katz. The relevant passage, quoted in full, states that:
This action too must be viewed as tantamount to an outright refusal to
negotiate on that subject, and therefore as a violation of §8(a)(5), un-
less the fact that the January raises were in line with the company’s
long-standing practice of granting quarterly or semiannual merit re-
views – in effect, were a mere continuation of the status quo – differ-
entiates them from the wage increases and the changes in the sick-
leave plan. We do not think it does. Whatever might be the case as to
so-called ‘merit raises’ which are in fact simply automatic increases to
which the employer has already committed himself, the raises here in
question were in no sense automatic, but were informed by a large
measure of discretion. There simply is no way in such case for a un-
ion to know whether or not there has been a substantial departure from
past practice, and therefore the union may properly insist that the
company negotiate as to the procedures and criteria for determining
such increases.
369 U.S. at 746–747 (emphasis added). In then-Member Miscimarra’s
dissent in DuPont, and also in Advanced Life Systems, Inc., 364 NLRB No.
117, slip op. at 9 (2016), the dissent omitted three key words: “the fact
that,” which entirely altered the meaning of the above-quoted text. Compare
364 NLRB No. 113, slip op. at 19. The dissent then relied on the incom-
plete quote to argue that Katz supports a conclusion that was, in fact, contra-
ry to the decision. N. Elizabeth Reynolds, Katz Grabs Back: A Response to
the Dissent in E.I. du Pont de Nemours, 364 NLRB No. 113 (2016), ABA
Section of Labor and Employment Law, Committee on the Development of
the Law Under the NLRA, https://www.americanbar.org/groups/labor
law/committees/dllcom/dll archive/2017.html. Although today’s majority
has corrected this misquotation of Katz in its opinion, it continues to mis-
construe the Court’s decision as authorizing the Respondent’s action in this
case. To the contrary, Katz holds that a long-standing practice of unilateral
changes does not constitute a past practice where the changes “were in no
sense automatic, but were informed by a large measure of discretion.” That
is precisely the situation presented by the Respondent’s Raytheon Plan
changes from 2001–2012.
Member Pearce additionally notes that although the majority has
remedied this misquotation of Katz in its decision, its legal argument
RAYTHEON NETWORK CENTRIC SYSTEMS 29
Of course, Katz makes no mention of comparing the
“kind and degree” of an employer’s action to what it did
in the past. In fact, as we explain in more detail below,
the only appropriate comparison is to the terms and con-
ditions of employment that were in effect for employees
on the day the contract expired. But even taking the ma-
jority on its own terms for the moment, its reliance on the
District of Columbia Circuit’s decision in Daily News of
Los Angeles v. NLRB is misplaced. The Daily News
court explained, “The cases make it crystal clear that the
vice involved . . . is that the employer has changed the
existing conditions of employment.” 73 F.3d at 411. It
further explained that where the employer has a merit
increase program that is fixed as to timing and criteria,
“Katz demands that the Company continue to apply the
same criteria and use the same formula for awarding in-
creases during the bargaining period as it had previous-
ly.” Id. at 412. This is the fundamental point that the
majority misses: here, the Respondent’s practice with
respect to health benefits had no fixed criteria or formula;
rather, it was informed by a large measure of discretion.
Clearly, the majority’s interpretation of Katz—which
would permit an employer to make whatever changes it
desires, including the elimination of all health benefits,
simply because it has a past pattern of making changes to
benefits—cannot be right. As the Supreme Court ex-
plained in Katz, when changes made to employee terms
and conditions are informed by a large measure of discre-
tion, “[t]here is simply no way … for a union to know
whether or not there has been a substantial departure
from past practice.”70 As further explained by the Dis-
trict of Columbia Circuit in McClatchy, “[s]ince the un-
ion could not know what criteria, if any, [the employer]
was using to award salary increases, it could not bargain
against those standards; instead, it faced a discretionary
cloud.”71 Here, too, the Union faced a “discretionary
cloud,” not knowing which health benefits would be re-
duced or eliminated, or whether and to what extent em-
ployees would be burdened with increased costs for their
healthcare. Plainly, the statutory goal of encouraging
good faith collective bargaining is not advanced by the
majority’s interpretation of Katz; indeed, the majority’s
view that Katz permits an employer to make myriad, ad
hoc changes so long as the employer’s changes follow a
history of such changes, flies in the face of the Court’s
finding that a past practice of making changes involving

falls even more sharply now that its analysis is not predicated on those
omissions from the Katz decision.
70 369 U.S. at 746.
71 131 F. 3d 1026, 1032.
significant discretion “of necessity obstruct[s] bargain-
ing.” Katz.72
Thus, the majority is simply wrong when claiming that
the sole relevant question in Katz is whether an employ-
er’s alleged unlawful unilateral changes are “similar in
kind and degree to what the employer did in the past.” It
misses the whole point of Katz’s prohibition against uni-
lateral changes to employment terms informed by a large
measure of discretion, by erroneously relying on a prac-
tice whose only consistency was the exercise of untram-
meled discretion to make numerous and varying changes
to health care providers, coverage, eligibility, premiums,
deductibles, options, etc. In the words of the Eleventh
Circuit in City Cab, rejecting a view similar to the major-
ity’s, if the Respondent “had any practice at all, it was
simply one of constant change.”73
The majority is not saved by its reliance on cases like
Daily News of Los Angeles, Post-Tribune,74 Luther Man-
or Nursing Home,75 and A-V Corp.76 for the broad propo-
sition it advances that when employers have a history of
making unilateral changes, that history establishes the
status quo that they lawfully can continue. As discussed
previously, those cases make clear that the Board and
courts will assess whether the prior practice has involved
significant discretion when determining whether the em-
ployer can act unilaterally. And in all of those cases the
employers had a consistent, established practice of shar-
ing premium costs with employees based on a set ratio
each year. As Katz explains, to be lawful, the changes
must be both in line with the company’s long-standing
practice and not informed by a large measure of discre-
tion.77
In yet another effort to evade the principal holding in
Katz—that managerial discretion is determinative in de-
ciding whether a past practice of unilateral changes may
lawfully continue during contract negotiations—the ma-
jority characterizes this central tenet as a mere “factual
observation” not relevant to the Court’s legal analysis.
The extensive Board and court authority that we and the
judge have cited demonstrates the falsity of this claim.
Far from being a mere “factual observation,” the degree
of discretion exercised by an employer is the crucial
question under Katz in determining whether a past prac-
tice has been successfully established.

72 369 U.S. at 746–747.
73 787 F.2d at 1480.
74 337 NLRB at 1280.
75 270 NLRB at 959.
76 209 NLRB at 451.
77 369 U.S. at 746.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD30
Further, contrary to the majority, the wage increase
cases they cite do not establish that Katz privileges em-
ployers to act unilaterally despite “substantial employer
discretion.” The Arc Bridges, Inc.78 case presented the
question whether a newly organized employer was re-
quired to continue a past practice of giving annual wage
increases while negotiating an initial agreement with the
union, not whether the employer was free to unilaterally
give such increases following the expiration of an
agreement. But, in any event, that case actually contra-
dicts the majority’s interpretation of Katz as licensing
unilateral, discretionary action. Thus, in Arc Bridges, the
Board initially found that the employer was bound by a
past practice of giving annual wage increases, and so its
unilateral discontinuance of such increases for bargain-
ing-unit employees (and in particular while continuing
them for non-unit employees) was unlawful. The Dis-
trict of Columbia Circuit reversed the Board’s finding,
however, precisely because the court found that the em-
ployer’s past decisions regarding annual wage increases
were far too discretionary to constitute a cognizable past
practice. Specifically, the court found no practice of
fixed, non-discretionary annual wage increases, noting
that there were “no objective criteria” and it was “highly
discretionary” whether increases would be awarded, and,
if awarded, the amount of those increases. Plainly, then,
Arc Bridges shows that the presence of “substantial em-
ployer discretion” renders any supposed past practice
inoperative, whether viewed from the perspective of a
union seeking to hold an employer to the practice or from
the perspective of an employer seeking to unilaterally
continue the practice.
Nor does Central Maine Morning Sentinel79 support
the majority. In Central Maine, the Board expressly
considered the degree of employer discretion and deter-
mined that, based on the absence of substantial discre-
tion, the employer’s annual across-the-board wage in-
creases constituted a practice that the employer was law-
fully required to continue. Notwithstanding that the em-
ployer retained “some discretion” as to the amounts of
the increases, the wage increases were nevertheless an
established practice because it was based on a non-
discretionary “formula derived from uniform factors.” In
yet another misreading of precedent, the majority states
in its fn. 89 that Central Maine’s retention of discretion
as to the amount of the merit increase excused its obliga-
tion to bargain about the entire merit increase practice.

78 355 NLRB 1222 (2010), enf. denied 662 F.3d 1235 (D.C. Cir
2011).
79 295 NLRB 376 (1989).
The Board stated precisely the opposite,80 as did the
court in similar circumstances in Daily News of Los An-
geles.81 As the court explained, under Katz “[i]f an es-
tablished merit increase program is fixed as to timing and
criteria and discretionary only in amount, then the em-
ployer is obligated to keep the program in place and con-
tinue to apply the same criteria.”82 As to the discretion-
ary element regarding the amount, Board and court prec-
edent require the employer to bargain with the union and
prohibits the employer from continuing to unilaterally
exercise its discretion.83
The purported “Shell Oil line of cases,” relied on by
the majority, similarly provides no support for their posi-
tion. Those cases are all subcontracting cases where the
employers’ discretionary rights to subcontract were sub-
stantially restricted. In Shell Oil, which was explicitly
overruled in DuPont (having been previously overruled
sub silentio) and is reinstated by the majority today, the
Board found that the employer’s subcontracting of con-
struction and maintenance work during bargaining for a
successor contract was a lawful continuation of a past
practice because it did not “materially var[y] in kind or
degree from what had been customary in the past.”84
Aside from the fact that Katz was not cited in Shell Oil
and its “var[y] in kind or degree” language is nowhere
found in Katz, the employer’s right to subcontract in that
case was not discretionary but had been limited by objec-
tive criteria: the “conditions of the protective wage re-
quirement” in article 14 of past contracts and whether the
employer possessed or lacked the equipment, material,
expertise, or staff to perform the work.85 Similarly, in
Westinghouse Electric Corp.,86 we noted in fn. 30 of our
majority decision in Du Pont that the employer’s past
practice of subcontracting did not appear to lack fixed
criteria. In finding that the subcontracting in Westing-
house was a lawful continuation of a long-time practice,
the Board further noted that, as in past years, there was
no evidence that the “subcontracting . . . had any signifi-
cant impact on unit employees’ job interests” due to the

80 295 NLRB at 376.
81 73 F.3d at 416.
82 Id.
83 See NLRB v. Blevins Popcorn, supra, 659 F.2d at 1189, citing
cases, including Oneita Knitting, supra, 205 NLRB at 500 fn. 1 (Katz
requires maintenance of past practice program, “however the imple-
mentation of that program (to the extent that discretion has existed in
determining the amounts or timing of the amounts), becomes a matter
as to which the bargaining agent is entitled to be consulted”).
84 149 NLRB 283, 288 (1964).
85 Id. at 286, 290.
86 150 NLRB 1574 (1965).
RAYTHEON NETWORK CENTRIC SYSTEMS 31
elimination of jobs.87 Indeed, in the years following
Westinghouse and Shell Oil, the potential adverse impact
on employees’ job tenure was the determinative factor as
to whether an employer’s subcontracting decision was
lawful. Where the subcontracting decision was con-
sistent with a past practice and was based on limited
managerial discretion that had no demonstrable adverse
impact on unit employees’ work, the Board found no
violation. See, e.g., General Electric Company;88 Roch-
ester Telephone Corp.;89 and Allied Chemical Corp.90
By contrast, where the subcontracting decision had an
adverse impact on unit employees’ work, the Board
found a violation of Section 8(a)(5) and (1). See, e.g.,
Assonet Trucking Co.91; The Weston and Brooker Com-
pany.92
In sum, the majority’s assertion that “decades-long”
precedent and “numerous Board and court cases” support
its position is wholly unfounded. To the extent that any
precedent supports the majority’s past practice position,
it originated in the two Courier Journal cases, 342
NLRB 1093 (2004) (Courier I), and 342 NLRB 1148
(2004) (Courier II), neither of which cited Shell Oil or
Westinghouse. The Board majority in Courier I found
that unilateral changes made to employees’ healthcare
benefits during bargaining for a successor contract were
lawfully in accord with a past practice of making similar
unilateral changes authorized by a management-rights
clause during the term of an expired contract. The Board
overruled that case in DuPont because the changes were
entirely discretionary and thus contrary to the past prac-
tice doctrine developed in accord with Katz and uniform-
ly applied by the Board and courts in the 55 years since
Katz. The Board noted that Courier was a clear depar-
ture from this half-century of precedent and, despite its
revival by the majority today, remains so.
Finally, the majority claims that even if the Respond-
ent exercised discretion, its discretion was “significantly
constrained” by the requirement that the healthcare plan
it offered to bargaining unit employees would be “on the
same basis as” the plan offered to the Respondent’s un-
represented employees. In DuPont, we explained that
such a requirement provides no limitation at all on the
Respondent’s discretion because the Respondent is free
to make any changes it desires, including elimination of

87 150 NLRB at 1576.
88 264 NLRB 306, 308–309 (1982).
89 190 NLRB 161, 164 (1971).
90 151 NLRB 718, 720–721 (1965), review denied sub nom. District
50, United Mine Workers of Am., Local 13942, 358 F.2d 234 (4th Cir.
1966).
91 156 NLRB 350, 351–353, 365–367 & fn. 13 (1965).
92 154 NLRB 747, 749 (1965).
health benefits entirely. That the unbounded discretion
applied even-handedly does not make it any less un-
bounded. And the exercise of such unbounded discretion
effectively eliminates any ability for the union to negoti-
ate over health benefits for the employees it represents.
As explained by the administrative law judge,”[t]ying
bargaining unit employees’ benefits to those of non-
bargaining unit employees who are unrepresented . . . , in
effect removes them from represented status and under-
mines the Union.” That is why the Board consistently
has held that an employer’s history of providing the same
benefits to both union and nonunion employees does not
establish a past practice exempting the employer from its
bargaining obligation over uniformly applied changes to
those benefits. See e.g. Larry Geweke Ford, 344 NLRB
628, 632 (2005)(employer history of providing the same
health plan to all employees, company-wide, did not ex-
empt it from its bargaining obligation pertaining to repre-
sented employees); Mid Continent Concrete, 336 NLRB
258, 259, 268 (2001), and United Hosp. Med. Ctr., 317
NLRB 1279, 1282 (1995).
4. The majority’s standard undermines
collective bargaining
The Board’s statutory duty is to promote and preserve
collective bargaining and advancing this obligation was
at the core of the Board’s decision in DuPont. The ma-
jority here claims that our holding in DuPont would have
had the opposite effect by “disregard[ing] the . . . par-
ties[‘] . . . particular need for certainty and predictabil-
ity,” “produc[ing] significant labor relations instability,”
and “substantially undermin[ing] employers’ ability to
operate their businesses.” To rectify these purported ills,
the majority claims that industrial peace will be ensured
only by privileging employers’ continued, untrammeled,
discretionary unilateral changes to a mandatory bargain-
ing subject like healthcare benefits, while the parties are
engaged in negotiations on that very subject and before
impasse is reached. According to the majority, this ap-
proach will not undermine collective bargaining because
even after unilateral implementation, the employer will
still have a duty to bargain with the union, upon request.
This cynical view flies in the face of the precedent dis-
cussed here that makes clear that such unilateral changes
“of necessity obstruct bargaining” and “frustrate the ob-
jectives of §8(a)(5) much as does a flat refusal.” Katz.93
The only logical certainty that flows from the majority’s
position is that the parties will know that employers can
act wholly unchecked, while unions and the employees
they represent can do nothing about it. The majority’s
preeminent focus on protecting employer interests is in

93 369 U.S. at 743, 747.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD32
sharp contrast with the statutory mandate of fostering
collective bargaining.
To be sure, unions and employers face enormous chal-
lenges in contract negotiations. Among the most chal-
lenging issues parties face is the provision of health care
benefits which, due to their costs, often drive bargaining
and impact negotiations over other financial contract
terms such as wages. But the majority’s claim that the
Board’s holding in DuPont exacerbated those challenges
for employers is simply unfounded. Echoing the dissent
in DuPont, the majority claims that, under DuPont, an
employer would have to drill down into all the circum-
stances surrounding its prior changes—to health care
benefits or other terms and conditions of employment—
in order to determine whether a postexpiration alteration
in those terms and conditions could be made unilaterally
or would constitute a “change” subject to bargaining.
This claim could not withstand scrutiny then, and it fares
no better today.
As the DuPont Board emphasized, consistent with
Katz and Litton, the touchstone for identifying a
“change” subject to bargaining is discretion exercised
when making the change. Thus, DuPont held only that
upon contract expiration an employer must refrain from
continuing to make “discretionary, unilateral changes,
not fixed as to timing and criteria,” that it might have
been permitted to make under the agreement.94 Contrary
to the majority, there was no need to exhaustively review
the history of prior changes. Rather, the employer need-
ed only to fairly assess whether the course of action un-
der consideration involved the exercise of discretion (and
thus required bargaining) or was sufficiently fixed as to
timing and criteria as to essentially be automatic (no bar-
gaining required). Compare Garrett Flexible Products95
(discretionary allocation of increase in health insurance
premium between employer and employees required bar-
gaining) with Post Tribune96 (no bargaining required
where employer continued practice of allocating health
insurance premiums according to a fixed-percentage ra-
tio). See also American National Red Cross97 (differen-
tiating past practices involving significant management
discretion from narrowly circumscribed changes that
would be expected to continue in a nondiscretionary
manner). If the changes made pursuant to an established
past practice involved an exercise of significant discre-
tion, the employer could no longer continue to make such
unilateral changes post-expiration. Instead, the terms
and conditions that existed at the time of expiration con-

94 DuPont, above, 364 NLRB No. 113, slip op. at 12.
95 276 NLRB 704.
96 337 NLRB 1279.
97 364 NLRB No. 98, slip op. at 5 (2016).
stitute the status quo and the baseline from which the
parties bargain.98
By contrast, the majority’s misunderstanding of Katz,
Litton, and Dupont actually does threaten the collective-
bargaining process, especially for unions. Thus, particu-
larly in the context of health insurance, unions need cer-
tainty as to what benefits are being offered by an em-
ployer and what costs for those proposed benefits the
employer proposes that employees shoulder. If the em-
ployer, like the Respondent here, has complete discretion
to change any and all aspects of health benefits, includ-
ing the cost to employees, this unpredictability leaves the
union in the dark and its ability to bargain over all finan-

98 Member McFerran recognizes that after a collective-bargaining
agreement expires, employers may face circumstances requiring them
to take actions that cannot reasonably wait until the parties reach over-
all impasse or agreement on a successor contract. See generally Bottom
Line Enterprises, 302 NLRB 373, 374 (1991) (explaining the basic rule
that when the parties are engaged in bargaining, an employer’s “obliga-
tion to refrain from unilateral changes extends beyond the mere duty to
give notice and an opportunity to bargain; it encompasses a duty to
refrain from implementation at all, unless and until an overall impasse
has been reached on bargaining for the agreement as a whole.”). Par-
ticularly in the case of health insurance, for example, employers may
need to respond relatively quickly to third-party providers’ decisions to
alter or even terminate existing benefit plans in order to ensure that
employees do not lose significant portions or all of their coverage. But,
in Member McFerran’s view, none of those circumstances warrants
jettisoning collective-bargaining altogether. To the contrary, existing
Board precedent provides employers with multiple alternatives to unfet-
tered unilateral action. Most important, an employer may simply give
the union notice and an opportunity to negotiate an interim agreement
to resolve the matter until an overall agreement is in place. Moreover,
even if those negotiations are unsuccessful, an employer faced with a
true exigency still may take unilateral action before the parties reach an
overall agreement, assuming the existence of a lawful impasse. See
generally RBE Electronics of S.D., 320 NLRB 80, 81–82 (1995). Al-
ternatively, an employer in search of greater certainty may preemptive-
ly bargain for language in a collective-bargaining agreement that would
permit it to take unilateral action with respect to specific terms and
conditions of employment after the agreement expires. See, e.g., Cau-
thorne Trucking, 256 NLRB 721, 722 (1981), enfd. in part 691 F.2d
1023 (D.C. Cir. 1982) (finding that the parties’ agreed-upon language
in a pension trust agreement clearly and unmistakably gave the em-
ployer the right to unilaterally suspend pension contributions once the
parties’ collective-bargaining agreement expired). Relatedly, Member
McFerran notes that even for newly organized employers, existing
Board precedent (on which she expresses no view) allows such em-
ployers to act with respect to discrete, recurring events that happen to
arise before or during negotiations for an initial collective-bargaining
agreement, provided that the employer has given the union notice and
an opportunity to bargain over the event. See Stone Container Corp.,
313 NLRB 336, 336 (1993) (dismissing allegation that employer vio-
lated Sec. 8(a)(5) by unilaterally implementing the results of an annual
wage survey—which showed no wage increase was warranted—while
the parties were negotiating an initial contract). Significantly, all of
those options accommodate employers’ legitimate needs while paying
far greater respect than the majority’s decision does to the Act’s fun-
damental policy of “encouraging the practice and procedure of collec-
tive bargaining.” Sec. 1 of the Act.
RAYTHEON NETWORK CENTRIC SYSTEMS 33
cial aspects of the contract is greatly compromised. This
weakened bargaining position causes employee disaffec-
tion and destabilizes the entire bargaining process. As
stated in DuPont, it is “difficult to imagine anything
more disruptive to the collective-bargaining process than
an employer’s exercise of its broad discretion to unilater-
ally change . . . a major term and condition of employ-
ment, such as health insurance” during negotiations for a
successor bargaining agreement.99 In McClatchy, the
Board explained the extent of the disruption, when find-
ing that the respondent violated Section 8(a)(5) by im-
plementing a proposal to retain complete discretion over
merit increases:
The [Union] also would be unable to explain to its rep-
resented employees how any intervening changes in
wages were formulated, given the Respondent’s reten-
tion of discretion over all aspects of these increases.
Further, the Respondent’s implementation of this pro-
posal would not create any fixed, objective status quo
as to the level of wage rates, because the Respondent’s
proposal for a standardless practice of granting raises
would allow recurring, unpredictable alterations of
wage rates and would allow the Respondent to initially
set and repeatedly change the standards, criteria, and
timing of these increases.100
These same disruptive effects to the collective-
bargaining process are manifest here. Throughout nego-
tiations, the Respondent insisted on its complete discre-
tion over all aspects of Plan healthcare benefits, rejected
all Union proposals to remove that discretion, and then
unilaterally implemented changes to the benefits without
reaching a bargaining impasse with the Union. It acted
in contravention to the Supreme Court’s view that “it is
difficult to bargain if, during negotiations, an employer is
free to alter the very terms and conditions that are subject
to those negotiations.” Litton.101
D. Waiver
The judge correctly rejected the Respondent’s defense
that the Union waived its right to bargain over changes to
the health plan after contract expiration, by agreeing in
the 2009–2012 collective bargaining agreement to grant
the Respondent broad discretion to make changes to its
plan.102 The judge’s finding is consistent with longstand-

99 364 NLRB No. 113, slip op. at 12.
100 321 NLRB at 1391 (internal citations omitted).
101 501 U.S. at 198.
102 The judge noted that the Respondent, “like any other employer,
could have presented its precise proposed 2013 changes to the plan to
the Union, [and] negotiated about them in good faith. . . . Instead,
Respondent took the position that the Union had waived its right to
bargain, in essence in perpetuity.”
ing Board law, on which DuPont is based, where the
Board held that when a union agrees to a contractual
management-rights clause that permits an employer to
act unilaterally on a mandatory subject of bargaining, the
union thereby waives its statutory right to bargain about
that subject only for the term of the contract. As the
Board explained in Du Pont, because the source of the
employer’s authority to act unilaterally on that subject
exists solely by virtue of the union’s contractual waiver,
the waiver expired on the termination date of the collec-
tive-bargaining agreement.103 Thus, the Board found that
the respondent failed to establish a waiver defense when
it made postexpiration unilateral changes to health insur-
ance benefits that it had been permitted to make during
the term of the contract under a reservation of rights
clause (which we found to be a management-rights
clause).
Here, there is no dispute that the reservation of rights
clause set forth in the Plan documents and incorporated
in every contract since 2000 is a management-rights
clause. Pursuant to that clause, the Union agreed—for
the term of each contract—that the Respondent could
exercise broad discretion in unilaterally changing em-
ployees’ healthcare benefits set forth in the Plan without
first bargaining with the Union. By agreeing to this
clause and acquiescing to the Respondent’s changes to
the Plan during the term of each contract, the Union
waived its right to bargain over a mandatory subject of
bargaining. However, that waiver was effective only for
the term of the contracts that contained the management-
rights clause. Under well-established precedent, long
predating DuPont, the Board has held that a manage-
ment-rights clause containing a union’s statutory bar-
gaining waiver does not survive the contract that contains
it, absent evidence that the waiver was intended to out-
live the contract. See Holiday Inn of Victorville.104 No
such intent was shown here. Neither the language of the
management right clause nor any other relevant contract
provision specified that the clause was to remain in force
after the 2009–2012 contract expired. And as the judge
found, “[n]o evidence was presented that the parties ever
discussed what would happen concerning [the] benefit
plans when the collective-bargaining agreement expired,
or that the Union ever agreed that it was ceding its right
to bargain regarding health insurance when the agree-
ment expired.” Accordingly, the Respondent’s waiver
defense fails.

103 364 NLRB No. 113, slip op. at 4–5.
104 284 NLRB 916 (1987). See also, Buck Creek Coal, Inc., 310
NLRB 1240, 1240 fn. 1 (1993); Control Services, Inc., 303 NLRB 481,
484 (1991), enfd. 961 F.2d 1568 (3d Cir. 1992); Kendall College of Art,
288 NLRB 1205, 1212 (1988).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD34
Curiously, the majority asserts that it need not reach
the question whether the Union waived its right to bar-
gain over post-expiration changes to the Plan because,
the majority says, “the Respondent’s benefit changes did
not alter the status quo.” This statement confirms the
majority’s fundamental misunderstanding of basic “sta-
tus quo” principles, and highlights the error in the ma-
jority’s insistence that the appropriate way to identify a
bargainable post-expiration “change” in an employment
term is simply to ask whether the employer made compa-
rable pre-expiration alterations to that term. If yes, then
the majority says no bargaining required. But this plain-
ly is the wrong comparison.
As explained, where, as here, parties are engaged in
bargaining for a successor contract, the relevant “status
quo” consists of the terms and conditions of employment
that existed for employees at the time their last contract
expired.105 It is those terms and conditions that establish
the baseline for determining whether any subsequent
alterations constitute a bargainable “change.” Whether a
pre-expiration past practice may properly be deemed a
term and condition of employment depends on whether it
was fixed as to timing and criteria. If not—if the practice
was infused with significant employer discretion—then
the practice is not a term and condition of employment,
and it most certainly is not part of the “status quo.”106
Because it is undisputed that the Respondent exercised
wide-ranging discretion to make changes to the Plan dur-
ing the term of the contract, the Respondent’s practice of
altering the Plan never became a cognizable past practice
and part of the expiration-day “status quo.” Consequent-
ly, it is immaterial that the Respondent’s post-expiration
discretionary changes to the employee health benefits are
comparable to its pre-expiration discretionary changes,
unless of course the Union has somehow waived its right
to bargain.107 For reasons explained, there was no waiv-
er here, but the majority’s failure to recognize that waiv-
er was the only remaining potentially viable defense
speaks clearly to its basic misunderstanding of the prin-
ciples that should have resulted in an affirmance of the
judge’s unfair labor practice findings in this case.

105 See E.I. DuPont, slip op. at 5.
106 See Eugene Iovine, above, 328 NLRB at 294 (employer’s unilat-
eral reductions of employees’ hours was not excused by past practice
that was characterized by unlimited discretion).
107 See, e.g., Cauthorne Trucking, above, 256 NLRB at 722 (finding
that the parties’ agreed-upon language in a pension trust agreement
clearly and unmistakably gave the employer the right to unilaterally
suspend pension contributions once the parties’ collective-bargaining
agreement expired).
Conclusion
The majority then is simply wrong when it insists that
today’s decision will “do no harm.” It is clear, rather,
that permitting employers to unilaterally change—at their
whim and in their sole discretion—significant terms of
employment during negotiations over those very terms, is
inimical to the collective-bargaining process, for reasons
that the Supreme Court and other Federal courts have
explained. Rather than promoting collective bargaining,
the majority’s decision is the quintessential “blueprint for
how an employer might effectively undermine the bar-
gaining process while at the same time claiming that it
was not acting to circumvent its statutory bargaining ob-
ligation.” McClatchy.108 This result is flatly contrary to
the expressed policy of the National Labor Relations Act,
and it is based on a willful misreading of the Supreme
Court’s decision in Katz. The Board has no authority to
deviate from Supreme Court precedent and no authority
to adopt its own, flawed labor policy in place of that es-
tablished by Congress.
Accordingly, we dissent.
Dated, Washington, D.C. December 15, 2017
______________________________________
Mark Gaston Pearce, Member
______________________________________
Lauren McFerran, Member
NATIONAL LABOR RELATIONS BOARD
Frederic D. Roberson, Esq., for the General Counsel.
Kenneth B. Siepman, Esq. and Matthew J. Kelley, Esq., of Indi-
anapolis, Indiana, for the Respondent.
Daniel Kovalik, Esq., of Pittsburgh, Pennsylvania, for the
Charging Party.
DECISION
STATEMENT OF THE CASE
ERIC M. FINE, Administrative Law Judge. This case was
opened and closed on May 2, 2013, in Indianapolis, Indiana, to
allow the parties to place into evidence a stipulation of facts,
along with attached exhibits, whereupon all parties rested. The
charge was filed by United Steel, Paper & Forestry, Rubber,
Manufacturing, Energy, Allied-Industrial & Service Workers
International Union, AFL–CIO (the Union) on October 29,
2012, against Raytheon Network Centric Systems (Respond-

108 321 NLRB at 1391.
RAYTHEON NETWORK CENTRIC SYSTEMS 35
ent).1 The complaint, issued on February 28, 2013, alleges
Respondent violated Section 8(a)(1) and (5) by: announcing in
late September that it would be making changes to health insur-
ance plans of bargaining unit employees represented by the
Union and implementing those changes on January 1, 2013, and
that Respondent did so without affording the Union an oppor-
tunity to bargain concerning the implementation and the effects
of the implementation, and implemented those changes without
first bargaining with the Union to a good-faith impasse.
On the entire record, and after considering the briefs filed by
the General Counsel, the Charging Party, and Respondent, I
make the following:
FINDINGS OF FACT
I. JURISDICTION
Respondent, a corporation, has an office and place of busi-
ness in Fort Wayne, Indiana, where it is engaged in the design,
manufacture, testing, integration, and installation of electronic
systems, radars, missile systems, and other goods and services
for the U.S. Government and other customers. During the past
12 months, in conducting these business operations, Respond-
ent sold and shipped goods valued in excess of $50,000 directly
to points outside Indiana. Respondent admits and I find it is an
employer engaged in commerce under Section 2(2), (6), and (7)
of the Act and the Union is a labor organization under Section
2(5) of the Act.
II. ALLEGED UNFAIR LABOR PRACTICES
At the outset of the hearing, the parties entered into evidence
stipulated facts, with attachments, and thereafter rested, without
calling any witnesses to testify. The stipulation reads as fol-
lows:
STIPULATED FACTS
Respondent, Raytheon Network Centric Systems, Ft. Wayne
facility (Respondent or Raytheon), Counsel for the Acting Gen-
eral Counsel for the National Labor Relations Board, and the
United Steel, Paper and Forestry, Rubber, Manufacturing, En-
ergy, Allied Industrial and Service Workers International Union
(USW), formerly the Paper, Allied-Industrial, Chemical and
Energy Workers International Union (PACE), and its Local 7–
0254 (Local Union) (collectively Union) hereby stipulate to the
following undisputed facts. By submitting these stipulated
facts, all parties reserve the right to object to individual facts on
the grounds of relevance.
1. PACE, Local 6–0254 represented production and mainte-
nance employees at the Ft. Wayne facility for more than 20
years. In April 2005, PACE merged with the United Steel-
workers of America and became USW. At some time between
2005 and 2009 PACE Local 6–0254 became USW Local 7–
0254.

1 At the hearing, counsel for the General Counsel moved, without
objection, to amend the complaint to change the name of Respondent
from Raytheon Company to Raytheon Network Centric Systems. The
motion was granted. However, I have kept the case heading as Raythe-
on Company because that is how the parties continue to refer to the
matter in their stipulated record and in their posthearing briefs. All
dates are in 2012 unless otherwise indicated.
2. Prior to December 1997, the Ft. Wayne facility was oper-
ated by Hughes Aircraft. Raytheon finalized its merger with
Hughes Aircraft in December 1997. Respondent recognized
the Ft. Wayne bargaining unit and the contract in place at the
time of the purchase.
3. There is one bargaining unit at the Ft. Wayne facility. The
Ft. Wayne bargaining unit currently consists of 35 individuals
across various job classifications.
4. Respondent and the Local Union were parties to collective
bargaining agreements (CBA), covering the Ft. Wayne bargain-
ing unit employees, which continued year to year unless re-
opened by one of the parties 60 days prior to the expiration date
of the contract. The parties’ most recent CBA covering the Ft.
Wayne bargaining unit employees ran from May 3, 2009, to
April 29, 2012.
5. Following the merger with Hughes Aircraft, Raytheon de-
cided to create a uniform benefits program for its employees,
nationwide. The plan was devised in 1998 and implemented on
January 1, 1999, as the Raytheon Unified Benefits Program (the
Raytheon Plan). It consisted of regional plans and pricing with
four levels of coverage with Health Maintenance Organization
(HMO) and Point of Service (POS) plan options. The Raythe-
on Plan included two options for dental insurance, vision insur-
ance, short-term and long-term disability (STD and LTD) cov-
erage, Paid Time Off (PTO) benefits, life insurance, Accidental
Death & Dismemberment (AD& D) insurance, Employee As-
sistance (EAP) program, Business Travel Accident (BTA) in-
surance and participation in the Raytheon Savings and Invest-
ment Plan (RAYSIP).
6. On January 1, 1999, salaried and hourly non-union em-
ployees at the Ft. Wayne facility were covered by the new Ray-
theon Plan. The Raytheon Plan documents are attached as Ex-
hibit 1. The terms of the Raytheon Plan allowed Respondent to
alter costs for covered employees and/or levels of benefits for
covered employees under the Raytheon Plan. Until January 1,
2001, the Ft. Wayne bargaining unit employees were not cov-
ered by the Raytheon Plan.
1999 Plan
 Regional plans and pricing with four levels of cover-
age
 Included POS and HMO options
 Two dental options, a “low” option with no employee
contribution and a “high” option with an employee
contribution
 Vision plan with a $10 copay on exams, frames and
lenses
7. During negotiations for the 2000 CBA, the parties agreed
to a proposal to have employees covered by the Raytheon Plan,
including the various medical options (Raytheon Medical),
beginning on January 1, 2001. Attached as Exhibit 2 is the
2000–2005 CBA that includes the language.
8. In addition, the parties agreed that contributions for the
Medical/Vision Plan would not exceed the rates paid by sala-
ried employees at the Ft. Wayne facility. Upon implementation
of the Raytheon Plan, Respondent would pay the majority of
the projected annual plan cost for Raytheon Medical and em-
ployees were responsible for the balance of the projected annu-
al plan cost for Raytheon Medical. The premium payment was
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD36
split 85–15 percent between Raytheon and participating em-
ployees.
9. On April 28, 2000, PACE and Raytheon entered into a
CBA citing the Raytheon Plan. Ft. Wayne bargaining unit
employees participated in open enrollment from September
27—October 13, 2000. The Raytheon Plan, including Raythe-
on Medical, went into effect for the Ft. Wayne bargaining unit
employees on January 1, 2001. See 2000–2005 CBA attached
as Exhibit 2.
10. Prior to the 2000 CBA, employees at the Ft. Wayne facil-
ity were provided with medical coverage, for which Respond-
ent paid most, if not all, of the premiums.
11. The Raytheon Plan is U.S. Region-wide, cafeteria style
benefits plan, which includes a variety of benefit options in
addition to health care coverage, such as dental coverage, vi-
sion coverage, and life insurance. Employees are provided with
annual enrollment periods each fall, at which point the employ-
ee elects the level of health care coverage desired, and elects
other benefit options. Raytheon Medical is a self-insured med-
ical care option encompassed within the Raytheon Plan. All
Raytheon sites in the United States participate in the Raytheon
Plan. The Raytheon Plan is available to approximately 65,000
domestic employees, including approximately 5,000 union
employees across 19 bargaining units. The USW does not rep-
resent any Raytheon employees other than those in the Ft.
Wayne bargaining unit. Attached as Exhibit 3 is the current
summary plan description for the Raytheon Plan.
12. Every year since 2001, Ft. Wayne employees, including
bargaining unit employees in the Ft. Wayne facility, have par-
ticipated in the open enrollment period as have all U.S. based
Raytheon employees. The Ft. Wayne employees have selected
from a variety of plan options, the medical and benefit plan
most appropriate for themselves each year. At no time since
2001 has there been any hiatus period between CBAs overlap-
ping with the open enrollment period.
13. Every year since 2001, and pursuant to the applicable
CBA and health plan documents referenced therein, the Com-
pany has retained and exercised significant discretion to modify
and/or terminate aspects of the Raytheon Plan. Throughout the
year, a dedicated staff of benefits professionals, employed by
Raytheon, surveys available options, costing structures, and
other information, and the Company decides what
plans/benefits to offer to its workforce. The Company then
communicates the changes to its employees prior to the open
enrollment period for the upcoming year.
14. In fall, 2001, Respondent mailed a document, entitled
“Raytheon Benefits” to all U.S. Region Raytheon employees,
including Ft. Wayne employees represented by PACE. The
“Raytheon Benefits” was a publication used and distributed by
Respondent each fall to communicate changes to the Raytheon
Plan, including any changes or premium increases to Raytheon
Medical, to all participants in the Raytheon Plan for the upcom-
ing calendar year. In addition to the “Raytheon Benefits” pub-
lication, each employee received, or was provided electronic
access to, a “Your Benefits Handbook” outlining all of the ben-
efits available to Raytheon employees in their personalized
enrollment kit, each year prior to open enrollment. A true and
correct copy of the 2001 “Raytheon Benefits” is attached as
Exhibit 4. Open enrollment occurred from October 10 – Octo-
ber 31, 2001.
15. On January 1, 2002, Respondent, pursuant to Article
XXII and Exhibit E of the 2000—2005 CBA and the referenced
Raytheon Benefits Handbook, implemented the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2002 Changes
 Healthcare premiums increased
 Preferred Provider Organization (“PPO”) option in-
troduced
 M-Plan HMO introduced for Indiana
 Benefits coverage extended to same-sex partners
 GlobalFit Health Club benefit introduced
16. These changes were summarized in the 2001 “Raytheon
Benefits” document. Exhibit 4. The CBA between Respondent
and PACE was in effect at the time. PACE did not file any
grievances or unfair labor practice charges contesting these
changes.
17. In fall, 2002, Respondent mailed a document, entitled
“Raytheon Benefits” to all U.S. Region Raytheon employees,
including Ft. Wayne employees represented by PACE. There
were two versions of this document, one for Raytheon employ-
ees in California and one for all other U.S. Raytheon employ-
ees. In addition to the “Raytheon Benefits” publication, each
employee received, or was provided electronic access to, a
“Your Benefits Handbook” outlining all of the benefits availa-
ble to Raytheon employees in their personalized enrollment kit,
each year prior to open enrollment. A true and correct copy of
the 2002 “Raytheon Benefits” is attached as Exhibit 5. Open
enrollment occurred from October 16 – November 3, 2002.
18. On January 1, 2003, Respondent, pursuant to Article
XXII and Exhibit E of the 2000—2005 CBA and the referenced
Raytheon Benefits Handbook, implemented the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2003 Changes
 Healthcare premiums increased
 Definity Health Care Options added everywhere ex-
cept California. Three levels of coverage are availa-
ble (Definity Gold, Silver and Bronze)
 TRICARE Supplemental Medical Plan available to
eligible employees
 Nationwide prescription services administered by
Medco Health offered to eligible employees
19. These changes were summarized in the 2002 “Raytheon
Benefits” document. Exhibit 5. The CBA between Respondent
and PACE was in effect at the time. PACE did not file any
grievances or unfair labor practice charges contesting these
RAYTHEON NETWORK CENTRIC SYSTEMS 37
changes.
20. In fall, 2003, Respondent mailed a document, entitled
“For Raytheon Employees—Benefits” to all U.S. Region Ray-
theon employees, including Ft. Wayne employees represented
by PACE. The “For Raytheon Employees—Benefits” was a
publication used and distributed by Respondent each fall to
communicate changes to the Raytheon Plan, including any
changes or premium increases to Raytheon Medical, to all par-
ticipants in the Raytheon Plan for the upcoming calendar year.
In addition to the “For Raytheon Employees—Benefits” publi-
cation, each employee received, or was provided electronic
access to, a “Your Benefits Handbook” outlining all of the ben-
efits available to Raytheon employees, in their personalized
enrollment kit each year prior to open enrollment. A true and
correct copy of the 2003 “For Raytheon Employees—Benefits”
is attached as Exhibit 6. Open enrollment occurred from Octo-
ber 15—November 2, 2003.
21. On January 1, 2004, Respondent, pursuant to Article
XXII and Exhibit E of the 2000—2005 CBA and the referenced
Raytheon Benefits Handbook, implemented the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2004 Changes
 Healthcare premiums increased
 United Health Care replaced Partners Health Plan as
provider of POS and HMO services. Coverage auto-
matically converted to the same type and level of
coverage available under Partners, unless the em-
ployee elected otherwise
22. These changes were summarized in the 2003 “For Ray-
theon Employees—Benefits” document. Exhibit 6. The CBA
between Respondent and PACE was in effect at the time.
PACE did not file any grievances or unfair labor practice
charges contesting these changes.
23. In fall, 2004, Respondent mailed a document, entitled
“For Raytheon Employees—Benefits” to all U.S. Region Ray-
theon employees, including Ft. Wayne employees represented
by PACE. In addition to the “For Raytheon Employees—
Benefits” publication, each employee received, or was provided
electronic access to, a “Your Benefits Handbook” outlining all
of the benefits available to Raytheon employees, in their per-
sonalized enrollment kit each year prior to open enrollment. A
true and correct copy of the 2004 “For Raytheon Employees—
Benefits” is attached as Exhibit 7. Open enrollment occurred
from October 13–29, 2004.
24. On January 1, 2005, Respondent, pursuant to Article
XXII and Exhibit E of the 2000–2005 CBA and the referenced
Raytheon Benefits Handbook, implemented the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2005 Changes
 Healthcare premiums increased
 Introduction of three year plan to increase premium
percentage from 85% - 15% to 80% - 20% with final
implementation in 2007
25. These changes were summarized in the 2004 “For Ray-
theon Employees—Benefits” document. Exhibit 7. The CBA
between Respondent and PACE was in effect at the time.
PACE did not file any grievances or unfair labor practice
charges contesting these changes.
26. On February 2, 2005, Union bargaining representatives
for the Ft. Wayne bargaining unit provided notice to Respond-
ent to open negotiations on the CBA with Respondent.
27. On June 29, 2005, the Union and Raytheon finalized a
new CBA for the Raytheon bargaining unit with language, in
Article XXII and Exhibit E and the referenced Employee Bene-
fits Handbook, confirming employees election of health bene-
fits in accordance with the Raytheon Plan being offered to non-
represented employees at the Ft. Wayne facility from year-to-
year. Attached as Exhibit 8 is the 2005–2009 CBA that in-
cludes this language.
28. In fall, 2005, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by PACE.
The “Your Raytheon Benefits” was a publication used and
distributed by Respondent each fall to communicate changes to
the Raytheon Plan, including any changes or premium increases
to Raytheon Medical, to all participants in the Raytheon Plan
for the upcoming calendar year. In addition to the “Your Ray-
theon Benefits” publication, each employee received, or was
provided electronic access to, a “Your Benefits Handbook”
outlining all of the benefits available to Raytheon employees, in
their personalized enrollment kit each year prior to open en-
rollment. A true and correct copy of the 2005 “Your Raytheon
Benefits” is attached as Exhibit 9. Open enrollment occurred
from October 12–28, 2005.
29. On January 1, 2006, Respondent, pursuant to Article
XXII and Exhibit E of the 2005—2009 collective-bargaining
agreement and the referenced Raytheon Benefits Handbook,
implemented the changes to the Raytheon Plan listed below.
The terms of the Raytheon Plan allowed Respondent to alter
costs incurred by unit members and/or levels of benefits re-
ceived by unit members under the Raytheon Plan. Respondent
did not offer to negotiate over these changes, nor did the Union
seek to bargain over these changes.
2006 Changes
 Healthcare premiums increased
 Introduction of a High Deductible Health Plan with
Health Savings Account
 Expansion of TRICARE program to include military
reservists
 Definity Health Gold and Silver plans increase in
prescription medication copays
 Definity Health Bronze plan discontinued
30. These changes were summarized in the 2005 “For Ray-
theon Employees—Benefits” document. Exhibit 9. The CBA
between Respondent and the USW was in effect at the time.
The Union did not file any grievances or unfair labor practice
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD38
charges contesting these changes.
31. In fall, 2006, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by the
Union. In addition to the “Your Raytheon Benefits” publica-
tion, each employee received, or was provided electronic access
to, a “Your Benefits Handbook” outlining all of the benefits
available to Raytheon employees, in their personalized enroll-
ment kit each year prior to open enrollment. A true and correct
copy of the 2006 “Your Raytheon Benefits” is attached as Ex-
hibit 10. Open enrollment occurred from October 11–27, 2006.
32. On January 1, 2007, Respondent, pursuant to Article
XXII and Exhibit E of the 2005–2009 CBA and the referenced
Raytheon Benefits Handbook, implemented the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2007 Changes
 Healthcare premiums increased
 Definity Plans undergo name change to Unified
Healthcare
 Option of purchasing 90-day supplies of prescription
medication through Medco at discount rate
33. These changes were summarized in the 2006 “Your Ray-
theon Benefits” document. Exhibit 10. The CBA between Re-
spondent and the Union was in effect at the time. The Union
did not file any grievances or unfair labor practice charges con-
testing these changes.
34. In fall, 2007, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by the
Union. In addition to the “Your Raytheon Benefits” publica-
tion, each employee received, or was provided electronic access
to, a “Your Benefits Handbook” outlining all of the benefits
available to Raytheon employees, in their personalized enroll-
ment kit each year prior to open enrollment. A true and correct
copy of the 2007 “Your Raytheon Benefits” is attached as Ex-
hibit 11. Open enrollment occurred from October 17—
November 2, 2007.
35. On January 1, 2008, Respondent implemented, pursuant
to Article XXII and Exhibit E of the 2005–2009 CBA and the
referenced Raytheon Benefits Handbook, the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2008 Changes
 Healthcare premiums increased
 Fully subsidized preventative office visits and screen-
ings for HMO, PPO and in-network POS providers
 Coverage of out-of-network preventative care – after
deductible at 70% for POS providers
 Discontinued M-Plan HMO in Ft. Wayne and moved
employees to United Healthcare Choice EPO, absent
election to different plan
 Discontinued TRICARE and Definity Silver
 Increases in specialist copays to $30 for HMO and in-
network POS increase specialist copays to $30 for
PPO providers
 Increase outpatient surgery copay to $100 for HMO
and in-network POS
 Additional nutritional counseling benefit offered
 Changes to prescription drug plans, instituting coin-
surance payments with caps
 Changes to the High Option Dental plan to cover
bridges and dentures every 8 years rather than every 5
years and to include coverage for dental implants
36. These changes were summarized in the 2007 “Your Ray-
theon Benefits” document. Exhibit 11. The CBA between
Respondent and the Union was in effect at the time. The Union
did not file any grievances or unfair labor practice charges con-
testing these changes.
37. In fall, 2008, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by the
Union. In addition to the “Your Raytheon Benefits” publica-
tion, each employee received, or was provided electronic access
to, a “Your Benefits Handbook” outlining all of the benefits
available to Raytheon employees, in their personalized enroll-
ment kit each year prior to open enrollment. Raytheon also
provided a “Summary of Benefit Changes” Document in fall,
2008. A true and correct copy of the 2008 “Your Raytheon
Benefits” and “Summary of Benefit Changes” is attached as
Exhibit 12. Open enrollment occurred from October 17–
November 5, 2008.
38. On January 1, 2009, Respondent, pursuant to Article
XXII and Exhibit E of the 2005—2009 CBA and the referenced
Raytheon Benefits Handbook for Employees in Indiana, im-
plemented the changes to the Raytheon Plan listed below. The
terms of the Raytheon Plan allowed Respondent to alter costs
incurred by unit members and/or levels of benefits received by
unit members under the Raytheon Plan. Respondent did not
offer to negotiate over these changes, nor did the Union seek to
bargain over these changes.
2009 Changes
 Healthcare premiums increased
 Additional vision plan option introduced – “Vision
Plan Plus”
 Increase in contributions to HSAs under United
Healthcare Definity High Deductible Health Plan al-
lowed
 United Healthcare adds Cancer Support Program
39. These changes were summarized in the 2008 “Your Ray-
theon Benefits” and “Summary of Benefit Changes” docu-
ments. Exhibit 12. The CBA between Respondent and the
Union was in effect at the time. The Union did not file any
grievances or unfair labor practice charges contesting these
changes.
40. On February 26, 2009, Union bargaining representatives
for the Ft. Wayne bargaining unit provided notice to Respond-
RAYTHEON NETWORK CENTRIC SYSTEMS 39
ent to open negotiations on the CBA with Respondent. No
proposals to amend or eliminate the “pass through” language
found in the expiring contract were made by either party during
those negotiations.
41. On May 28, 2009, the Union and Raytheon finalized a
new CBA for the Raytheon Ft. Wayne bargaining unit. The
agreed-to language concerning year-to-year changes to Raythe-
on’s Medical Plan remained unchanged in the 2009 CBA from
the 2005 CBA. Attached as Exhibit 13 is the 2009–2012 CBA
that includes the language.
42. In fall, 2009, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by the
Union. In addition to the “Your Raytheon Benefits” publica-
tion, each employee received, or was provided electronic access
to, a “Your Benefits Handbook” outlining all of the benefits
available to Raytheon employees, in their personalized enroll-
ment kit each year prior to open enrollment. A true and correct
copy of the 2009 “Your Raytheon Benefits” is attached as Ex-
hibit 14. Open enrollment occurred from October 16, 2009–
November 4, 2009.
43. On January 1, 2010, Respondent, pursuant to Article
XXII and Exhibit C of the 2009—2012 CBA and the refer-
enced Raytheon Benefits Handbook, implemented the changes
to the Raytheon Plan listed below. The terms of the Raytheon
Plan allowed Respondent to alter costs incurred by unit mem-
bers and/or levels of benefits received by unit members under
the Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2010 Changes
 Healthcare premiums increased
 Implemented two-year plan to change cost share from
80% - 20% to 75% - 25%. 2010 cost share at 77.5% -
22.5%
 Emergency Room copay increased to $150 for HMO,
POS and PPO plans
 HMO outpatient diagnostic labs and X-rays covered
at 80% and the 20% coinsurance applied towards
employees “out of pocket” maximum
 HMO inpatient copay increased to $300, plan covers
90% of cost of inpatient hospitalizations after copay
 HMO out of pocket maximums increased to $1,500
for individuals and $3,000 for families
 Decreases to Company contribution to HRA through
United Healthcare Definity Gold program with in-
creased deductibles for in-network and separate de-
ductibles for out-of-network
 CVS/Caremark replaces Medco as the administrator
for prescription drug program
44. These changes were summarized in the 2009 “Your Ray-
theon Benefits” document. Exhibit 14. The CBA between Re-
spondent and the Union was in effect at the time. The Union
did not file any grievances or unfair labor practice charges con-
testing these changes.
45. In fall, 2010, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by the
Union. In addition to the “Your Raytheon Benefits” publica-
tion, each employee received, or was provided electronic access
to, a “Your Benefits Handbook” outlining all of the benefits
available to Raytheon employees, in their personalized enroll-
ment kit each year prior to open enrollment. A true and correct
copy of the 2010 “Your Raytheon Benefits” is attached as Ex-
hibit 15. Open enrollment occurred from October 15–
November 3, 2010.
46. On January 1, 2011, Respondent, pursuant to Article
XXII and Exhibit C of the 2009–2012 CBA and the referenced
Raytheon Benefits Handbook, implemented the changes to the
Raytheon Plan listed below. The terms of the Raytheon Plan
allowed Respondent to alter costs incurred by unit members
and/or levels of benefits received by unit members under the
Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2011 Changes
 Healthcare premiums increased
 Completed two-year plan to change cost share from
80% - 20% to 75% - 25%
 TRICARE Supplement returns but not as a Raytheon-
sponsored program
 Medical insurance to cover dependents up to age 26
for medical, dental, and vision, pursuant to the Af-
fordable Care Act
 Over-the-counter medications no longer considered
eligible expenses for health care FSAs, HSAs or
HRAs, pursuant to the Affordable Care Act
 Removal of lifetime maximums from medical plans,
pursuant to the Affordable Care Act
 Change in-network outpatient copay to $20
 Delta Dental PPO Plus Premier administering the
high/low dental care options (change from Metlife).
Institution of a roll over maximum for the high op-
tion
47. These changes were summarized in the 2010 “Your Ray-
theon Benefits” document. Exhibit 15. The CBA between Re-
spondent and the Union was in effect at the time. The Union
did not file any grievances or unfair labor practice charges con-
testing these changes.
48. In fall, 2011, Respondent mailed a document, entitled
“Your Raytheon Benefits” to all U.S. Region Raytheon em-
ployees, including Ft. Wayne employees represented by the
Union. In 2011, Raytheon also provided its employees with a
“Highlights of Benefit Changes for 2012” document. In addi-
tion to the “Your Raytheon Benefits” publication, each em-
ployee received, or was provided electronic access to, a “Your
Benefits Handbook” outlining all of the benefits available to
Raytheon employees, in their personalized enrollment kit each
year prior to open enrollment. A true and correct copy of the
2011 “Your Raytheon Benefits” and “Highlights of Benefit
Changes for 2012” is attached as Exhibit 16.
49. On January 1, 2012, Respondent, pursuant to Article
XXII and Exhibit C of the 2009—2012 CBA and the refer-
enced Raytheon Benefits Handbook, implemented the changes
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD40
to the Raytheon Plan listed below. The terms of the Raytheon
Plan allowed Respondent to alter costs incurred by unit mem-
bers and/or levels of benefits received by unit members under
the Raytheon Plan. Respondent did not offer to negotiate over
these changes, nor did the Union seek to bargain over these
changes.
2012 Changes
 Healthcare premiums increased
 United Healthcare Choice PPO and United
Healthcare Choice POS consolidated into the United
Healthcare Choice Plus Plan
 Waiver credit of $1,000 for waiving of Raytheon-
sponsored medical coverage no longer offered
 All United Healthcare plans as well as Geisinger and
Optima plans will have consistent coverage for infer-
tility-related care with a $15,000 lifetime maximum
 Wellness Reward introduced
 Health care reform issues continue. All plans other
than United, dependent eligibility up to age 26, pur-
suant to the Affordable Care Act
 Introduced Pharmacy Advisor Program for diabetes
 Generic step-therapy for certain high blood pressure
medications
 Delta Dental program pays for space maintainers to
age 14 rather than age 20. Replacement bridgework
and dentures reverts to once every five years instead
of every eight years
50. These changes were summarized in the 2011 “Your Ray-
theon Benefits” document. Exhibit 17. The CBA between Re-
spondent and the Union was in effect at the time. The Union
did not file any grievances or unfair labor practice charges con-
testing these changes.
51. On February 24, 2012, the Union informed Raytheon that
it wanted to schedule bargaining sessions and open negotiations
for a successor CBA to the current CBA, set to expire on April
29, 2012 at 12:01 a.m. The Union also provided Raytheon with
written information requests. Exhibit 18.
52. On March 30, 2012, Raytheon provided a memorandum
to the Union regarding the information requests made by the
Union, along with the requested information. Exhibit 19.
53. The parties met for the first time to bargain over the
terms of the next CBA on April 24, 2012. Over the course of
the next five months, the parties would meet ten times in an
attempt to reach a complete agreement (4/24, 4/25, 4/26, 4/27,
4/28. 5/17, 6/7, 7/25, 7/26, and 9/26). Raytheon’s negotiating
team consisted of Nickole Tushan, Bruce Menshy, Sara Spin-
ney and Christen Shiman. The Union’s negotiating team con-
sisted of Chris Lovitt, Joan Fleming, Jack Gross, Becky
Kumfer and Jeff Mitchell. USW Sub-District Director Mike
O’Brien also participated in one negotiating session.
54. On April 24, 2012, the Union presented Raytheon with
its non-economic contract proposals.2 During the session, the

2 Throughout the course of the 2012 bargaining, the Union provided
its proposals as “Union Non-Economic” proposal # and “Union Eco-
nomic” proposal #, and the bargaining notes reflect these proposals as
UNE and UE. By the same token, the Company provided its proposals
as Company Non-Economic and Company Economic or CNE and CE.
Union presented Raytheon with UNE 6, 7, and 9. Exhibit 20.
These proposals sought to strike the “pass through” language
contained in Article X, Article XVI, and Exhibit C of the CBA.
The “pass through” language contained in the expiring CBA
highlighted that the same disability/leave of absence, paid time
off and Raytheon Plan offered to all of the approximately
65,000 domestic Raytheon employees, would be offered to the
Ft. Wayne bargaining unit employees on a year to year basis.
The Union’s proposals sought to designate that the disabil-
ity/leave of absence, paid time off and Raytheon Plan benefits
offered to the Ft. Wayne bargaining unit employees would
remain the same for the life of the CBA.
55. Raytheon presented its non-economic proposals during
the afternoon on April 24, 2012. On April 25, 2012, Raytheon
responded to UNE 6, 7, and 9 and explained to the Union nego-
tiating team that the “pass through” language had been in place
for at least the previous three contracts. Raytheon stated that
all 19 bargaining units across the country, comprising 5210
employees, were on the same benefit plan with the same year to
year pass through language. The Union responded that it was
no longer willing to waive its right to bargain over a mandatory
subject of bargaining such as health benefits. Raytheon reject-
ed the Union’s proposals to modify the contract language and
requested alternative proposals from the Union.
56. During bargaining on April 25, 2012, the Union pro-
posed the “pass through” language be revised to state that
changes may be made “by mutual agreement.” The Union
proposed this language in UNE 6(a) and intended that the pro-
posal applied to the same language in UNE 7 and UNE 9. Ex-
hibit 21.
57. On April 26, 2012, Raytheon presented a counter-
proposal. Raytheon’s proposal included language in each of
the relevant provisions that “in the event that a change to this
benefit is planned, the Company will provide the Union with
advanced notice of those changes, to the extent possible and
clarify any questions regarding them, prior to implementation.”
Exhibit 22. The Union rejected this counter-proposal.
58. On April 27, 2012, the Union stated that its medical in-
surance proposal (UNE 9) had not changed.
59. Raytheon presented the Union with its last, best and final
offer on April 28, 2012. During bargaining that same day, the
Union informed Raytheon that after a meeting with the mem-
bership, no vote had been taken on Raytheon’s last, best and
final offer. According to the Union, the two biggest issues for
the membership were proposed changes in the PTO policy and
in continuing to agree to the “pass through” language. Bargain-
ing continued on April 28, 2012, concerning the PTO policy,
wages and the “pass through” language with no resolution. The
CBA expired on April 29, 2012, at 12:01 a.m. The Ft. Wayne
bargaining unit employees continued to work under the status
quo.
60. Union and Raytheon representatives met on May 17,
2012, to discuss outstanding bargaining issues. Raytheon and
the Union discussed options to the “pass through” language.

That nomenclature is used herein, for consistency. Whenever a pro-
posal was modified by the party that introduced the proposal, a letter
was introduced noting the updated proposal (i.e. UNE 6(a), etc.).
RAYTHEON NETWORK CENTRIC SYSTEMS 41
Union Negotiator Mike O’Brien made several suggestions con-
cerning potential solutions to the “pass through” language is-
sue, including proposing to explore whether employees could
be insured through the Steelworkers Health & Welfare Fund.
No formal proposals were exchanged by either side. The par-
ties continued to negotiate on wages, union security clause
language and proposed changes to the PTO policy.
61. Union and Raytheon representatives met again on June 7,
2012. The parties continued to make no headway on the “pass
through” language and no proposals were exchanged on that
issue. The parties requested the intervention of an FMCS me-
diator for the next bargaining session.
62. The parties met on July 25–26, 2012, with FMCS Media-
tor Tim Bower. The mediator identified four outstanding is-
sues: (1) pass through; (2) Right-to-Work law issues; (3) the
attendance policy/PTO language; and (4) wages. During bar-
gaining on July 26, 2012, Raytheon presented the Union with
another last, best and final offer. The offer did not include any
modifications to the “pass through” language from the expired
CBA. The bargaining unit did not vote on Raytheon’s last, best
and final offer.
63. On September 26, 2012, the parties met to continue bar-
gaining over outstanding issues, including wages, timing of
implementation of wage increases and the “pass through” lan-
guage. The parties were close to agreement on holidays, the
attendance policy and right-to-work language. Raytheon main-
tained its position on the “pass through” issue, but said it would
entertain any options the Union wanted to put on the table. The
Union again stated it would not waive its right to bargain over a
mandatory subject of bargaining. Raytheon explained that
without a new proposal from the Union on the “pass through”
issue, it believed the parties were at impasse. The Union, for its
part, stated its belief that the parties were not in fact at an im-
passe. Neither party exchanged any proposals on “pass
through.”
64. Raytheon and the Union had no bargaining sessions after
September 26, 2012. During the 2012 bargaining, Raytheon
and the Union did not reach impasse.
65. During the negotiations on September 26, 2012, the Un-
ion solicited Raytheon’s position on whether the Ft. Wayne
bargaining unit employees would be asked to participate in the
upcoming open enrollment period for the Raytheon Plan. Ray-
theon informed the Union that open enrollment for the 2013
benefits period was about to commence and that it would pro-
ceed as planned for all Raytheon employees, based upon Ray-
theon’s belief this was required by the terms of the expired
CBA. The Union asked Raytheon to exclude the Ft. Wayne
bargaining unit employees from the upcoming open enrollment
period.
66. Raytheon instituted changes to its 2013 benefit package
for all domestic employees and subsequently mailed a docu-
ment, entitled “Your Raytheon Benefits” to all U.S. Region
Raytheon employees, including Ft. Wayne employees repre-
sented by the Union. In addition to the “Your Raytheon Bene-
fits” publication, each employee received, or was provided
electronic access to, a “Your Benefits Handbook” outlining all
of the benefits available to Raytheon employees, in their per-
sonalized enrollment kit each year prior to open enrollment. A
true and correct copy of the 2012 “Your Raytheon Benefits” is
attached as Exhibit 23. Open enrollment commenced on Octo-
ber 12, 2012, and closed on October 31, 2012.
67. On January 1, 2013, Respondent implemented the chang-
es to the Raytheon Plan listed below. The terms of the Raythe-
on Plan referenced in the CBA allowed Respondent to alter
costs incurred by plan participants and/or levels of benefits
received by plan participants under the Plan.
2013 Changes
 Healthcare premiums increased
 Conversion of the United Healthcare Gold plan to
HSA 2
 Higher in-network deductible for employee and em-
ployee children ($2,500) than under the Gold plan
 Expanded list of women’s health services covered at
100% with no deductible as preventative care, pursu-
ant to the Affordable Care Act
 Generic use requirement for employees to receive
100% coverage for preventative care prescriptions,
pursuant to the Affordable Care Act
 United Healthcare HSA covers various preventative
drugs as outlined on the Treasury Guidance List
without first meeting deductibles
 Expansion of Wellness Reward to $250
 Increase in out-of-pocket costs if employees purchase
brand name prescription when a generic equivalent is
available. Employee pays the cost difference, plus
the copayment
 Flexible Spending Account lowered to $2,500 on
medical, dental and vision, pursuant to the Affordable
Care Act
68. These changes were summarized in the 2012 “Your Ray-
theon Benefits” Document. Exhibit 23. The CBA between
Respondent and the Union was expired at the time these chang-
es were implemented.
69. To the extent the health insurance plan change summar-
ies contained herein are inconsistent with the attached exhibits,
the exhibits are controlling.3
In addition to the written stipulated facts some of the at-
tached exhibits reveal the following:
As reflected in exhibit 1, entitled “Raytheon Health Benefits
Plan” “Plan Document” effective January 1, 1999, at article
1.3: “The Benefit Programs and the Benefit Program Docu-
ments, in their entirety, as amended from time to time, are
hereby incorporated by reference and made a part of this Plan.”
Article 5.2(a) provides that “Participant contributions, if any,
shall be determined by Company.” It also provides, “Partici-
pants contributions shall be subject to change by and in the sole
discretion of the Company, and each Participant shall be ad-

3 Some of the exhibits presented by way of the stipulation were
numbered incorrectly. In this regard, it is stated in the General Coun-
sel’s brief that the official record identifies Exh. 17 as to what is labeled
Exh. 18 in the stipulated facts, and that similarly: Exh. 19 is what is
identified as Exh. 20 in the stipulation; Exh. 20 is what is identified as
exhibit 21 in the stipulation; Exh. 21 is what is indentified as Exh. 22 in
the stipulation; and Exh. 22 is what is identified as Exh. 23 in the stipu-
lated record.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD42
vised in writing of any such change in the amount of such con-
tributions prior to the effective date of such change.” Article
8.1, states: “Right to Amend. Notwithstanding any provisions
of any other communication, either oral or written, made by the
Employer, an Administrative Services Provider, or any other
individual or entity to Employees, any service provider, or any
other individual or entity, the Company reserves the absolute
right to amend the plan and any or all Benefit Programs incor-
porated herein from time to time, including, but not limited to,
the right to reduce or eliminate benefits provided pursuant to
the provisions of the Plan or any Benefit Program as such pro-
visions currently exists, or may hereinafter exist.” Article 8.2
states, “the Company reserves the absolute and unconditional
right to terminate the Plan and any and all Benefit Programs, in
whole or in part, with respect to some or all of the Employees.”
The language for the 2000 to 2005 collective-bargaining
agreement pertaining to medical benefits is included in Exhibit
E attached to that agreement. The relevant language reads as
follows:
SECTION 1. MEDICAL/VISION PLAN.
A detailed description of the Medical/Vision Plan is available
in the Raytheon Benefits Handbook for Employees in Indi-
ana. This plan provides employees and eligible covered in-
come dependents with group hospital, medical, and surgical
coverage, behavioral healthcare for mental health and sub-
stance abuse, prescription drugs and vision care. Employee
contributions for the Medical/Vision Plan will not exceed the
rates paid by salaried employees at our Ft. Wayne facilities.
The language in the parties’ 2005 to 2009 collective-bargaining
agreement contained the following change pertaining to medi-
cal benefits. It stated:
The Raytheon United Benefit Plans will be available for all
employees, offered on the same basis as is offered to salaried
employees at the Ft. Wayne, Indiana, location from year-to-
year. All benefit coverages for new hires, except the pension
plan, will begin upon the hire date.
The remaining language was the same as in the 2000 to 2005
collective-bargaining agreement set forth above. The language
pertaining to medical benefits remained the same in the 2009 to
2012 collective-bargaining agreement as it was in the 2005 to
2009 agreement.
The fall 2003 distribution to employees states the replace-
ment of Partners Health Plan by United Health Care was lim-
ited to Fort Wayne employees. The record contains a benefit
summary distribution to employees entitled, “Your 2013 Bene-
fits Handbook” and it issued in January 2013. It states on the
first page that, “Raytheon reserves the right to amend or termi-
nate any of the plans at any time. Such amendments or modifi-
cations may be retroactive, if necessary, to meet statutory re-
quirements or for any other appropriate reason. Benefits for
employees represented by a bargaining unit will be in accord-
ance with their collective-bargaining agreement."
A. Analysis
In NLRB v. Katz, 369 US 736, 743, 745–747 (1962), follow-
ing a union’s recent certification by the Board as collective
bargaining representative the parties began contract negotia-
tions. While no impasse in negotiations was reached the re-
spondent employer made three unilateral changes concerning
mandatory subjects of bargaining, one pertaining to merit in-
creases, one to sick leave, and a new system of automatic wage
increases. Court stated:
We hold that an employer's unilateral change in condi-
tions of employment under negotiation is similarly a viola-
tion of s 8(a) (5), for it is a circumvention of the duty to
negotiate which frustrates the objectives of s 8(a)(5) much
as does a flat refusal.FN11
* * *
The respondents' third unilateral action related to merit
increases, which are also a subject of mandatory bargain-
ing. National Labor Relations Board v. J. H. Allison &
Co., 6 Cir., 165 F.2d 766. The matter of merit increases
had been raised at three of the conferences during 1956
but no final understanding had been reached. In January
1957, the company, without notice to the union, granted
merit increases to 20 employees out of the approximately
50 in the unit, the increases ranging between $2 and $10.
FN13 This action too must be viewed as tantamount to an
outright refusal to negotiate on that subject, and therefore
as a violation of s 8(a)(5), unless the fact that the January
raises were in line with the company's long-standing prac-
tice of granting quarterly or semiannual merit reviews-in
effect, were a mere continuation of the status quo-
differentiates them from the wage increases and the
changes in the sick-leave plan. We do not think it does.
Whatever might be the case as to so-called ‘merit raises'
which are in fact simply automatic increases to which the
employer has already committed himself, the raises here in
question were in no sense automatic, but were informed by
a large measure of discretion. There simply is no way in
such case for a union to know whether or not there has
been a substantial departure from past practice, and there-
fore the union may properly insist that the company nego-
tiate as to the procedures and criteria for determining such
increases.FN14
In E.I. DuPont de Nemours, 355 NLRB 1084 (2010), enf.
denied 682 F.3d 65 (D.C. Cir. 2012),4 the respondent's Bene-
flex Plan, under which it provided health care and a range of
other benefits to many of its employees nationwide was incor-
porated into the parties 1994 and 1997 collective-bargaining
agreements. The Beneflex Plan included a reservation of rights
provision granting the Respondent authority to modify benefits
under the plan on an annual basis. During the term of those
collective-bargaining agreements, the respondent made unilat-
eral changes to the Beneflex Plan annually under the reserva-
tion of rights provision without objection by the union. The
issue in DuPont before the Board was when the union filed
charges over DuPont’s continuing to make such changes during
a contractual hiatus period. The Board majority in finding
DuPont violated the Act set forth following principles at 1084–

4 The court remanded the matter to the Board. The Board accepted
the remand, but has not as yet issued a decision.
RAYTHEON NETWORK CENTRIC SYSTEMS 43
1085:
It is settled law that when parties are engaged in nego-
tiations for a collective-bargaining agreement an employer
is obliged to refrain from making unilateral changes, ab-
sent an impasse in bargaining for the agreement as a
whole. See, e.g., Register-Guard, 339 NLRB 353, 354
(2003); RBE Electronics of S.D., 320 NLRB 80, 81
(1995). As the Supreme Court has recognized, “[I]t is dif-
ficult to bargain if, during negotiations, an employer is
free to alter the very terms and conditions that are the sub-
ject of those negotiations.” Litton Financial Printing Divi-
sion v. NLRB, 501 U.S. 190, 198 (1991).
It is undisputed that, at the time that the Respondent
unilaterally implemented changes in the Beneflex Plan, the
parties were engaged in bargaining and were not at im-
passe. But relying on the Board's Courier-Journal deci-
sions, the Respondent asserts that its unilateral actions
were lawful because they were consistent with the parties'
past practice. The Respondent bears the burden of estab-
lishing this affirmative defense. Beverly Health & Reha-
bilitation Services, 335 NLRB 635, 636 (2001), enfd. 317
F.3d 316 (D.C. Cir. 2003).
We find that the Respondent has not carried that bur-
den. In the Courier-Journal cases, a Board majority found
that the employer's unilateral changes to employees' health
care premiums during a hiatus period between contracts
were lawful because the employer had established a past
practice of making such changes both during periods when
a contract was in effect and during hiatus periods. The Re-
spondent's asserted past practice in this case, in contrast,
was limited to changes that had been made when a con-
tract, which included the reservation of rights language,
was in effect. It is apparent that a union's acquiescence to
unilateral changes made under the authority of a control-
ling management-rights clause has no bearing on whether
the union would acquiesce to additional changes made af-
ter that management-rights clause expired. The Respond-
ent has simply not carried its burden of showing relevant
past practice under the Courier-Journal cases—annual uni-
lateral changes during hiatus periods. As a result, the Re-
spondent's prior unilateral changes do not establish a past
practice justifying the Respondent's unilateral actions dur-
ing a hiatus between contracts. The Courier-Journal deci-
sions are plainly distinguishable on this basis, as the judge
explained in a decision we adopt today in E.I. DuPont, 355
NLRB 1096 (2010), presenting a similar bargaining issue
but at a different facility of the Respondent.
This factual distinction is key because it implicates
important collective-bargaining principles. Extending the
Courier-Journal decisions to the situation presented here
would conflict with settled law that a management-rights
clause does not survive the expiration of the contract em-
bodying it, absent a clear and unmistakable expression of
the parties' intent to the contrary,[FN1] and does not consti-
tute a term and condition of employment that the employer
must continue following contract expiration.[FN2] Those
principles apply to a broad management-rights clause as
well as to more narrow contractual reservations of mana-
gerial discretion addressing, as here, a specific subject of
bargaining[FN3] and embodied in a plan document that has
been incorporated in a collective-bargaining agree-
ment.[FN4] Moreover, extending Courier-Journal to cir-
cumstances such as those presented here would render the
expiration of the management-rights clause meaningless
wherever the employer had acted under its authority to
make changes during the contract period. This, in turn,
“would vitiate an employer's bargaining obligation when-
ever a contract containing a broad management-rights
clause expired.” Beverly Health & Rehabilitation Services,
335 NLRB at 637. Such an outcome would discourage, ra-
ther than promote, collective bargaining, in particular,
making unions wary of granting any discretion to man-
agement during the contract's term.[FN5]
In E.I. DuPont, supra at 1085 fns. 1 and 2, the Board majori-
ty cited the following cases for the principle that a management
rights clause does not survive the expiration of a contract, ab-
sent a clear and unmistakable expression of the parties’ intent
to the contrary:
FN1. See, e.g., Beverly Health & Rehabilitation Services, supra,
335 NLRB at 636 fn. 6 (collecting cases), enfd. 317 F.3d 316
(D.C. Cir. 2003). “The law is quite clear that, when a collec-
tive agreement expires, any management-rights … clause it
contains expires with it.” Robert A. Gorman & Matthew W.
Finkin, Basic Text on Labor Law § 20.16 at 638 (2d ed. 2004)
(footnote omitted).
FN2. Control Services, 303 NLRB 481, 484 (1991) (manage-
ment-rights clause “is not, in itself, a term or condition of em-
ployment that outlives the contract that contains it, absent
some evidence of the parties' intention to the contrary”), enfd.
mem. 975 F.2d 1551 (3d Cir. 1992); accord: Furniture
Renters of America, 311 NLRB 749, 751 (1993) (quoting
Control Services, supra), enfd. in rel. part 36 F.3d 1240, 1245
(3d Cir. 1994); Holiday Inn of Victorville, 284 NLRB 916
(1987).
Along these lines, in WKYC-TV, Inc., 359 NLRB 286, 288
(2012), the Board majority stated:
It is certainly true that a select group of contractually
established terms and conditions of employment—
arbitration provisions, no-strike clauses, and management-
rights clauses—do not survive contract expiration, even
though they are mandatory subjects of bargaining. In
agreeing to each of these arrangements, however, parties
have waived rights that they otherwise would enjoy in the
interest of concluding an agreement, and such waivers are
presumed not to survive the contract. The Board has also
held that a management-rights clause normally does not
survive contract expiration, because “the essence of [a]
management-rights clause is the union's waiver of its right
to bargain. Once the clause expires, the waiver expires,
and the overriding statutory obligation to bargain con-
trols.” Beverly Health & Rehabilitation Services, 335
NLRB 635, 636 (2001), enfd. in relevant part 317 F.3d
316 (D.C. Cir. 2003).[FN9
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD44
For other cases finding the expiration of a managements rights
clause at a contracts end see Guard Publishing, 339 NLRB 353,
355 (2003); Paul Mueller Co., 332 NLRB 312, 313 (2000);
Presbyterian University Hospital, 325 NLRB 443, 443 fn. 2,
enfd. 182 F.3d 904 (3d Cir. 1999); Ironton Publications, 321
NLRB 1048 (1996); Blue Circle Cement Co., 319 NLRB 954
(1995), enf. granted in part, denied in part on other grounds 106
F.3d 413 (10th Cir. 1997); Buck Creek Coal, 310 NLRB 1240
fn. 1 (1993); Control Services, 303 NLRB 481, 484 (1991),
enfd. 961 F.2d 1568 (3d Cir. 1992); and U.S. Can Co., 305
NLRB 1127 (1992), enfd. 984 F.2d 864 (7th Cir. 1993).5
The Board majority also stated in E. I DuPont, supra at 1085
fn 5 that:
FN5. We further observe that the Courier-Journal decisions
are in tension with previously settled principles. First, it is
well established that silence in the face of past unilateral

5 In terms of waiver of a statutory right, in Metropolitan Edison Co.
v. NLRB, 460 U.S. 693, 708 (1983) the Court stated:
Thus, we will not infer from a general contractual provision that the
parties intended to waive a statutorily protected right unless the under-
taking is “explicitly stated.” More succinctly, the waiver must be clear
and unmistakable.FN12
FN12. The Courts of Appeals have agreed that the waiver of a protected
right must be expressed clearly and unmistakably. See, e.g., Chesa-
peake & Potomac Telephone Co. v. NLRB, 687 F.2d 633, 636 (2nd
Cir. 1982); NLRB v. Southern California Edison Co., 646 F.2d 1352,
1364 (9th Cir. 1981); Communication Workers of America, Local
1051 v. NLRB, 644 F.2d 923, 927 (1st Cir. 1981).
In Provena St. Joseph Medical Center, 350 NLRB 808, 810-811,
816 (2007), the Board majority set forth a detailed description of the
lengthy history of the Board’s application of waiver analysis in terms of
a union’s statutory right to bargain. There the Board stated:
This case presents us with the opportunity to explain and reaf-
firm our adherence to one of the oldest and most familiar of
Board doctrines, the clear and unmistakable waiver standard, in
determining whether an employer has the right to make unilateral
changes in unit employees' terms and conditions of employment
during the life of a collective-bargaining agreement. The clear
and unmistakable waiver standard is firmly grounded in the policy
of the National Labor Relations Act promoting collective bargain-
ing. It has been applied consistently by the Board for more than
50 years, and it has been approved by the Supreme Court. NLRB
v. C & C Plywood, 385 U.S. 421 (1967). By contrast, the contract
coverage approach, urged by the Respondent and endorsed by the
dissent, is a relatively recent judicial innovation, adopted by two
appellate courts.[FN14] In the framework established by Congress,
however, it is the function of the Board, not the courts, to develop
Federal labor policy. See, e.g., NLRB v. J. Weingarten, Inc., 420
U.S. 251, 266 (1975).[FN15]
FN15. Our colleague states that the Board, in developing federal labor
policy, should “pay close attention to what the courts are saying.” We
have done so. First, the Supreme Court and a majority of the appellate
courts have approved the waiver standard. Second, our decision here
thoroughly explains our reasons for adhering to the waiver standard
and therefore fully responds to the minority of courts that have held
otherwise.
For a more detailed discussion of the history concerning the Board’s
waiver analysis see the complete Provena St. Joseph decision. See
also, Verizon New York, Inc., v. NLRB, 360 F.3d 206, 208 (D.C. Cir.
2004), quoting Metropolitan Edison Co. and stating that “Waiver of a
right protected by the National Labor Relations Act must be ‘clear and
unmistakable.’”
changes does not constitute waiver of the right to bargain. See
Owens-Corning Fiberglass, 282 NLRB 609 (1987); Exxon
Research & Engineering Co., 317 NLRB 675, 685–686
(1995).
In this regard in Verizon New York, Inc. v. NLRB, 360 F.3d 206,
209 (D.C. Cir. 2004), the court stated:
(a) “union's acquiescence in previous unilateral changes does
not operate as a waiver of its right to bargain over such
changes for all time,” Owens-Corning Fiberglas Corp., 282
N.L.R.B. 609, 1987 WL 90160 (1987). See Ciba-Geigy
Pharmaceuticals Div. v. NLRB, 722 F.2d 1120, 1127 (3d
Cir.1983).
Similarly, in NLRB v. Miller Brewing Co., 408 F.2d 12, 15 (9th
Cir.1969), the court stated:
Respondent next contends that because Union failed to
object to the previous unilateral issuance of plant rules by
other employers and because of the clause in the collective
bargaining agreement allowing discharge for ‘cause,’ it
has waived any right to now request negotiations. The first
part of this argument is unconvincing because it is not true
that a right once waived under the Act is lost forever. Pa-
cific Coast Ass'n of Pulp & Paper Mfrs. v. NLRB, 304 F.2d
760 (9th Cir. 1962). Each time the bargainable incident
occurs- each time new rules are issued- Union has the
election of requesting negotiations or not. An opportunity
once rejected does not result in a permanent ‘close-out;’ as
in contract law, an offer once declined but then remade
can be subsequently accepted. Cf. Leeds & Northrup Co.
v. NLRB, 391 F.2d 874 (3d Cir. 1968); General Tel. Co. v.
NLRB, 337 F.2d 452 (5th Cir. 1964).
In the instant case, Respondent, in its brief, cites Courier-
Journal, 242 NLRB 1093 (2004). In Courier-Journal, the par-
ties’ collective bargaining agreements expired on August 7,
2000. The most recent agreements for the engraving and press-
room departments contained language that bargaining unit
health insurance plans were to be “on the same terms as are in
effect for employees not represented by a labor organization.
Any changes (benefits and Premiums) in such plans shall be on
the same basis as for non-represented employees.” The press-
room contract also contained language that “the company re-
serves the right to modify or terminate any (or all) benefits in
this Article, at any time.” Earlier contracts contained those
provisions. The respondent employer made changes in the
costs or benefits of employee’s health insurance each year since
July 1991 for represented and non-represented employees with-
out bargaining with the union. The Board specifically noted
some changes were made during the open period or hiatus be-
tween contracts. Until the fall of 2001, the Union never object-
ed that the unilateral changes were unlawful. As it had done in
July 1992, and each year through 2000, on July 1, 2001, the
respondent increased employee contributions towards
healthcare insurance premiums for represented and non-
represented employees. On September 24, 2001, the respond-
ent issued a memo to employees announcing another increase
in employees’ contributions to healthcare premiums and a
number of more far reaching changes in health care insurance
RAYTHEON NETWORK CENTRIC SYSTEMS 45
benefits of unit employees that would go into effect on January
1, 2002. At a bargaining session on October 3, 2001, the re-
spondent informed the union about these latter changes, to
which the union objected and wanted to negotiate. The re-
spondent responded that it had the right to make the changes
without bargaining as long as it kept the benefits for unit em-
ployees the same as those for nonrepresented employees.
In Courier-Journal at 1094, the Board majority stated, “a
unilateral change made pursuant to a longstanding practice is
essentially a continuation of the status quo−not a violation of
Section 8(a)(5).” The Board majority found the respondent’s
January 2002 changes in unit employees health care premiums
of benefits did not violate Section 8(a)(5) as the changes were
implemented pursuant to a well-established past practice. The
Board majority specifically stated, “For some 10 years, the
Respondent had regularly made unilateral changes in the costs
and benefits of the employees’ health care program, both under
the parties’ successive contracts and during hiatus periods be-
tween contracts.” The union did not oppose those changes and
like the prior changes the January 2002 changes for unit em-
ployees were identical to those for unrepresented employees,
consistent with the ‘same basis as’ clause of the parties succes-
sive contracts. The Board majority stated, “The significant
aspect of this case is that the Union acquiesced in a past prac-
tice under which premiums and benefits for unit employees
were tied to those of nonunit employees.” The Board majority
stated they did not pass on the issue of whether a contractual
wavier of the right to bargain survives the expiration of the
contract, stating their decision was not grounded in waiver but
on past practice and the continuation thereof. The Board ma-
jority found inapposite cases which hold that the union acquies-
cence in prior unilateral changes does not operate as a waiver of
its right to bargain over such conduct for all time. The Board
majority went on to state at 1095:
Our colleague fears that the Union’s acquiescence in past uni-
lateral action on a matter means that the Union can never re-
gain bargaining rights as to the matter. In our view, the fear is
groundless. The Union, in bargaining, can seek to take away
that discretion, and can seek definite terms. Of course, the
Employer can oppose and seek to retain its discretion. If im-
passe is reached, consistent with current Board law, the em-
ployer cannot implement its proposal, because it vests com-
plete discretion in the Employer.7
7 McClatchy Newspapers, 321 NLRB 1386 (1996),
enfd. 131 F.3d 1026 (D.C. Cir. 1997).
McClatchy Newspapers, supra, cited by the Board majority
in Courier-Journal, involved the Board’s finding a 8(a)(5) vio-
lation over the respondent employer’s implementation after
impasse of a proposal for unilateral discretion over future merit
increases. The Board stated at 1390–1391 that:
As explained below, we find that if the Respondent was
granted carte blanche authority over wage increases (without
limitation as to time, standards, criteria, or the Guild’s agree-
ment), it would be so inherently destructive of the fundamen-
tal principles of collective bargaining that it could not be sanc-
tioned as part of a doctrine created to break impasses and re-
store active collective bargaining.
Were we to allow the Respondent here to implement
its merit wage increase proposal and thereafter expect the
parties to resume negotiations for a new collective-
bargaining agreement, it is apparent that during the subse-
quent negotiations the Guild would be unable to bargain
knowledgeably and thus have any impact on the present
determination of unit employee wage rates. The Guild also
would be unable to explain to its represented employees
how any intervening changes in wages were formulated,
given the Respondent's retention of discretion over all as-
pects of these increases. Further, the Respondent's imple-
mentation of this proposal would not create any fixed, ob-
jective status quo as to the level of wage rates, because the
Respondent's proposal for a standardless practice of grant-
ing raises would allow recurring, unpredictable alterations
of wages rates and would allow the Respondent to initially
set and repeatedly change the standards, criteria, and tim-
ing of these increases. The frequency, extent, and basis for
these wage changes would be governed only by the Re-
spondent's exercise of its discretion. [FN21] The Respond-
ent's ongoing ability to exercise its economic force in set-
ting wage increases and the Guild's ongoing exclusion
from negotiating them would not only directly impact on a
key term and condition of employment and a primary basis
for negotiations, [FN22] but it would simultaneously dis-
parage the Guild by showing, despite its resistance to this
proposal, its incapacity to act as the employees' repre-
sentative in setting terms and conditions of employment.
Thus, by its reference to McClatchy Newspapers in Courier-
Journal, the Board majority concluded that declaring impasse
and implementing a proposal giving a respondent employer
unlimited discretion over health insurance, like that in the case
of merit raises, was inimical to the bargaining process and pro-
hibited by Section 8(a)(1) and (5) of the Act.6

6 The General Counsel contends that cases such as Courier-Journal,
supra and Capitol Ford, 343 NLRB 1058 (2004), are irreconcilable
with the Court’s decision in NLRB v. Katz, 369 U.S. 736 (1961), and
should be overruled by the Board. I concur with the recommendation
to the Board that the rationale in Courier and like cases be overturned.
In NLRB v. Katz, the Court specifically held the unilateral implementa-
tion during negotiations of an alleged past practice pertaining to merit
increases violated Section 8(a)(1) and (5) of the Act because “the raises
here in question were in no sense automatic, but were informed by a
large measure of discretion. There simply is no way in such case for a
union to know whether or not there has been a substantial departure
from past practice, and therefore the union may properly insist that the
company negotiate as to the procedures and criteria for determining
such increases.” In Courier-Journal, the Board specifically held that
the health changes were informed by discretion therefore concluded
that the respondent employer could not insist to impasse and implemen-
tation of the health care changes for to do so would violate Section
8(a)(1) and (5) of the Act. Yet, contrary to the teachings of the Court in
Katz, the Board majority in Courier allowed the Respondent to imple-
ment those changes post contract expiration without reaching an im-
passe. The Court in Katz, in a pre-impasse situation, found that the
unilateral implementation of a proposal, allegedly derived from a past
practice, during negotiations, which allowed an employer unlimited
discretion violated Section 8(a)(5) of the Act. Thus, the Board’s inter-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD46
In McClatchy Newspapers, Inc. v. NLRB, 131 F.3d 1026,
1032–1033, 1035 (D.C. Cir. 1997), in enforcing the Board’s
decision the court held:
Here, as in Bonanno Linen, the Board has denied the employ-
er a particular economic tactic for the sake of preserving the
stability of the collective bargaining process.
The post-impasse rule itself regulates process through
power. The Board has told us that its rationale for permit-
ting an employer to unilaterally implement its final offer
after impasse is that such an action breaks the impasse and
therefore encourages future collective bargaining.FN4 The
theory might well be thought somewhat strained, for it
does not explain why the Board decided to handle impasse
with this rule instead of another. The Board could have
adopted, for example, a rule requiring the status quo to
remain in effect until either the union or the employer was
willing to resume negotiations. Stagnancy might pressure
both the employer and the union to bend. But the rule it
did choose-allowing the employer to implement its final
offer-moves the process forward by giving one party, the
employer, economic leverage. And in this case, where the
employer has advanced no substantive criteria for its merit
pay proposal, the Board has decided that the economic
power it has granted would go too far. Rather than merely
pressuring the union, implementation might well irrepara-
bly undermine its ability to bargain. Since the union could
not know what criteria, if any, petitioner was using to
award individual salary increases, it could not bargain
against those standards; instead, it faced a discretionary
cloud. As the Board put it, “the present case represents a
blueprint for how an employer might effectively under-
mine the bargaining process while at the same time claim-
ing that it was not acting to circumvent its statutory bar-
gaining obligation.” McClatchy II at 6. We think that it is
within the Board's authority to prevent this development:
* * *
[T]he Board, employing its expertise in the light of ex-
perience, has sought to balance the ‘conflicting legitimate

nal findings and conclusions in Courier-Journal are inconsistent with
the Court’s conclusions in Katz.
Moreover, the Board’s conclusions in Courier-Journal appear to
contradict basic concepts of impasse, leaving the parties as to we have
here in labor limbo. Under Board law, once the parties reach a lawful
impasse in bargaining an employer may implement its last offer to a
union. NLRB v. Katz, 369 U.S. 736 (1961); E. I. du Pont de Nemours
& Co., 346 NLRB 553 (2006); Gloversville Embossing, 314 NLRB
1258 (1994); Taft Broadcasting Co., 163 NLRB 475, 478 (1967), rev.
denied 395 F.2d 622 (D.C. Cir. 1968), Yet, in Courier-Journal the
Board majority found that the Respondent could unilaterally implement
terms and conditions pertaining to health insurance during ongoing
negotiations, although it could not lawfully insist to the same proposal
to impasse. That has brought about the unusual circumstance in the
instant case in which no party is claiming impasse has been reached
despite the Respondent’s implementation of its health care changes. In
short, there is an underlying inconsistency, at least to the undersigned,
in allowing an employer to unilaterally implement changes to terms and
conditions of employment during negotiations, but at the same time
state that the employer cannot lawfully insist to bargaining to impasse
and implement that same proposal.
interests' in pursuit of the ‘national policy of promoting
labor peace through strengthened collective bargaining.’
The Board might have struck a different balance from the
one it has, and it may be that some or all of us would pre-
fer that it had done so. But assessing the significance of
impasse and the dynamics of collective bargaining is pre-
cisely the kind of judgment that Buffalo Linen ruled should
be left to the Board.
* * *
Not only does an employer's implementation of a pro-
posal such as petitioner's deprive the union of “purchase”
in pursuing future negotiations, the Board also concluded
that by excluding the union from the process by which in-
dividual rates of pay are set petitioner “simultaneously
disparag[ed] the Guild by showing ... its incapacity to act
as the employees' representative in setting terms and con-
ditions of employment.” McClatchy II at 6. It knew no
specifics about the merit raises, therefore it had no infor-
mation to relay. In that regard, the Board echoed concerns
expressed in Chief Judge Edwards' prior concurring opin-
ion that petitioner's implementation of its proposal could
be seen as seeking de-collectivization of bargaining.FN5
The Board concluded that petitioner's action was “so in-
herently destructive of the fundamental principles of col-
lective bargaining that it could not be sanctioned as part of
a doctrine created to break impasse and restore active col-
lective bargaining.” McClatchy II at 6 (citations omitted).
Petitioner particularly objects to this passage, arguing that
the phrase “inherently destructive”-which, as the Board
acknowledges, comes from NLRB v. Great Dane Trailers,
388 U.S. 26, 87 S.Ct. 1792, 18 L.Ed.2d 1027 (1967)-
applies only to employer behavior that is claimed to vio-
late § 8(a)(3), the anti-discrimination provision of the Act.
But the Board explained that it was using the term only to
show that, as in Great Dane, the employer's action will
have “foreseeable consequences” notwithstanding its mo-
tive. We do not see why that observation is independently
objectionable.
* * *
We think the Board is free to draw on its expertise to deter-
mine that wages are typically of paramount importance in col-
lective bargaining and to suggest that wages, unlike schedul-
ing or a host of other decisions generally thought closely tied
to management operations, are expected to be set bilaterally in
a collective bargaining relationship.FN8
In E.I. Du Pont De Nemours and Co. v. NLRB, 682 F.3d 65,
68–70 (D.C. Cir. 2012) the court stated:
We hold Du Pont, by making unilateral changes to
Beneflex after the expiration of the CBAs, maintained the
status quo expressed in the Company's past practice; those
changes were therefore lawful under Courier–Journal.
While the CBAs were in effect, Du Pont annually made
unilateral changes to the package of benefits offered under
Beneflex, including changes to the premiums the employ-
ees paid and to the benefits they received. Du Pont made
the unilateral changes in dispute here after the CBAs had
expired, but those changes were similar in scope to those it
RAYTHEON NETWORK CENTRIC SYSTEMS 47
had made in prior years. Du Pont's discretion in making
those changes was limited by the terms of the reservation
of rights clause in the Beneflex plan documents, which
permitted changes during—and only during—the annual
enrollment period. Moreover, here as in Courier–Journal,
the employer was obligated under its past practice to “treat
the [union] employees exactly the same as [the non-union]
employees,” and so the employer's “discretion was lim-
ited” because it “did not have the freedom to grant [non-
union] employees a benefit and deny same to [union] em-
ployees.” 342 N.L.R.B. at 1094. Under the Board's prece-
dent, therefore, Du Pont's making annual changes to Bene-
flex became a term and condition of employment the com-
pany could lawfully continue during the annual enrollment
period, irrespective of whether negotiations for successor
contracts were then on-going.
The Board concluded Du Pont violated the Act be-
cause it failed to show “relevant past practice under the
Courier–Journal cases-annual unilateral changes during
hiatus periods.” E.I. Du Pont De Nemours, Louisville
Works, 355 N.L.R.B. No. 176, 2010 WL 3452312 at 2
(Aug. 27, 2010). The Board distinguished Courier–
Journal on the ground that the employer there had “estab-
lished a past practice of making [health care premium]
changes both during periods when the contract was in ef-
fect and during hiatus periods” whereas Du Pont has made
uncontested unilateral changes to Beneflex only while
CBAs were in effect. Id. The Board emphasized the im-
portance of this “factual distinction” as follows:
Extending the Courier–Journal decisions to the situation
presented here would conflict with settled law that a man-
agement-rights clause does not survive the expiration of
the contract ... and does not constitute a term and condition
of employment that the employer must continue following
contract expiration. Id.
Be that as it may, whether a management-rights clause sur-
vives the expiration of the contract is beside the point Du Pont
is making. The Board has previously recognized that the law-
fulness of a change in working conditions made after the CBA
has expired depends not upon “whether a contractual waiver of
the right to bargain survives the expiration of the contract” but
rather upon whether the change “is grounded in past practice,
and the continuance thereof.” Courier–Journal, 342 NLRB at
1095. The Sixth Circuit captured the point precisely in Beverly
Health and Rehabilitation Services, Inc. v. NLRB, 297 F.3d
468, 481 (2002): “[I]t is the actual past practice of unilateral
activity under the management-rights clause of the CBA, and
not the existence of the management-rights clause itself, that
allows the employer's past practice of unilateral change to sur-
vive the termination of the contract.” A subsequent Board deci-
sion unambiguously incorporates that teaching: “[T]he mere
fact that the past practice was developed under a now-expired
contract does not gainsay the existence of the past practice.”
Capitol Ford, 343 NLRB 1058, 1058 fn. 3 (2004). Therefore,
although the employer “cannot rely upon the management
rights clause of that contract to justify unilateral action,” the
“past practice is not dependent on the continued existence of
the [expired] collective-bargaining agreement.” Id.
Because an employer may make unilateral changes insofar as
doing so is but a continuation of its past practice, we see no
reason it should matter whether that past practice first arose
under a CBA that has since expired. Nor did the Board in Capi-
tol Ford, where it upheld as lawful the employer's unilateral
changes to employee compensation and paid holidays on the
basis of an established practice even though the employer (and
its predecessor) had never before made such changes when a
CBA was not in force. 343 NLRB at 1058. The Board has not
offered any reason whatsoever for thinking a unilateral action
being taken during a hiatus period, although expressly deemed
immaterial in Capitol Ford, should be dispositive in this case.
Indeed, the Board did not so much as cite Capitol Ford or Bev-
erly Health & Rehabilitation Services, Inc., 346 NLRB 1319
(2006), where the Board again said that “without regard to
whether the management-rights clause survived, the [employer]
would be privileged to have made the unilateral changes at
issue if [its] conduct was consistent with a pattern of frequent
exercise of its right to make unilateral changes during the term
of the contract,” id. at 1333 fn. 5. Although the Board had in
several earlier cases held unilateral changes made pursuant to a
past practice developed under an expired management-rights
clause were unlawful, see Beverly Health & Rehab. Servs., 335
NLRB 635, 636–637 (2001); Register-Guard, 339 NLRB 353,
355–356 (2003), the Board clearly took a different position in
its more recent decisions.
Accordingly, we hold the Board failed to give a reasoned
justification for departing from its precedent. On remand, the
Board must either conform to its precedent in Capitol Ford and
in the 2006 iteration of Beverly Health Services or explain its
return to the rule it followed in its earlier decisions. See Man-
hattan Ctr. Studios, Inc. v. NLRB, 452 F.3d 813, 816 (D.C.Cir.
2006) (“If we conclude that the Board misapplied or deviated
from its precedent, we often remand with instructions to reme-
dy the misapplication [or] deviation”).FN*
Thus, in Du Pont, the court, citing Courier-Journal conclud-
ed that the respondent employer would be free to make changes
in health care benefits for bargaining unit employees because it
had done so as part of a past practice, and because its discretion
was circumscribed by the fact that changes were limited to the
annual enrollment period, and by past practice required to be
the same as those implemented for non-bargaining unit em-
ployees. Yet, the court did not address the fact that the Board
in Courier-Journal also found those types of limitations are in
fact no limitations at all in that they provided an employer with
unlimited discretion and therefore the employer could not insist
to impasse and then implement a proposal giving it the right to
unilaterally change healthcare benefits based on what it provid-
ed to nonbargaining unit employees. See, Courier-Journal,
supra at 1095.
In the instant case the Ft. Wayne bargaining unit consists of
35 employees. As of January 1, 1999, salaried and hourly non-
union employees at the Ft. Wayne facility were covered by the
new Raytheon Plan. Raytheon Medical is a self-insured medi-
cal care option encompassed within the Raytheon Plan. All
Raytheon sites in the United States participate in the Raytheon
Plan. The Raytheon Plan is available to approximately 65,000
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD48
domestic employees, including approximately 5000 union em-
ployees across 19 bargaining units. The Union does not repre-
sent any Raytheon employees other than those in the Ft. Wayne
bargaining unit.
On January 1, 2001, the Ft. Wayne bargaining unit employ-
ees, pursuant to their recent collective-bargaining agreement
became covered by the Raytheon Plan. Plan documents pro-
vided that “the Company reserves the absolute right to amend
the plan and any or all Benefit Programs incorporated herein
from time to time, including, but not limited to, the right to
reduce or eliminate benefits . . .” They also provided that, “the
Company reserves the absolute and unconditional right to ter-
minate the Plan and any and all Benefit Programs, in whole or
in part, with respect to some or all of the Employees.” In the
parties 2000–2005 collective-bargaining agreement the parties
agreed that contributions for the Medical/Vision Plan would not
exceed the rates paid by salaried employees at the Ft. Wayne
facility. As reflected in the stipulated record, it was agreed
upon implementation of the Raytheon Plan, Respondent would
pay the majority of the projected annual plan cost for Raytheon
Medical and employees were responsible for the balance of the
projected annual plan cost. The premium payment was split
85–15 percent between Raytheon and participating employees.
Prior to the 2000 collective-bargaining agreement, bargaining
unit employees at the Ft. Wayne facility were provided with
medical coverage, for which Respondent paid most, if not all,
of the premiums. The language in the parties’ 2005 to 2009
collective-bargaining agreement changed pertaining to medical
benefits stating “The Raytheon United Benefit Plans will be
available for all employees, offered on the same basis as is
offered to salaried employees at the Ft. Wayne, Indiana, loca-
tion from year-to-year.” The language pertaining to medical
benefits remained the same in the 2009 to 2012 collective bar-
gaining agreement as it was in the 2005 to 2009 agreement.
The parties stipulated that every year since 2001, the Com-
pany has retained and exercised significant discretion to modify
and/or terminate aspects of the Raytheon Plan. It was stipulat-
ed that throughout the year, a dedicated staff of benefits profes-
sionals, employed by Raytheon, surveys available options,
costing structures, and other information, and the Company
decides what plans/benefits to offer to its workforce. The
Company then communicates the changes to its employees
prior to the open enrollment period for the upcoming year. The
changes each year as reflected in the parties’ stipulation were as
follows:
2002 Changes
 Healthcare premiums increased
 Preferred Provider Organization (“PPO”) option in-
troduced
 M-Plan HMO introduced for Indiana
 Benefits coverage extended to same-sex partners
 GlobalFit Health Club benefit introduced
2003 Changes
 Healthcare premiums increased
 Definity Health Care Options added everywhere ex-
cept California. Three levels of coverage are availa-
ble (Definity Gold, Silver and Bronze)
 TRICARE Supplemental Medical Plan available to
eligible employees
 Nationwide prescription services administered by
Medco Health offered to eligible employees
2004 Changes
 Healthcare premiums increased
 United Health Care replaced Partners Health Plan as
provider of POS and HMO services. Coverage auto-
matically converted to the same type and level of
coverage available under Partners, unless the em-
ployee elected otherwise
2005 Changes
 Healthcare premiums increased
 Introduction of three year plan to increase premium
percentage from 85% - 15% to 80% - 20% with final
implementation in 2007
2006 Changes
 Healthcare premiums increased
 Introduction of a High Deductible Health Plan with
Health Savings Account
 Expansion of TRICARE program to include military
reservists
 Definity Health Gold and Silver plans increase in
prescription medication copays
 Definity Health Bronze plan discontinued
2007 Changes
 Healthcare premiums increased
 Definity Plans undergo name change to Unified
Healthcare
 Option of purchasing 90-day supplies of prescription
medication through Medco at discount rate
2008 Changes
 Healthcare premiums increased
 Fully subsidized preventative office visits and screen-
ings for HMO, PPO and in-network POS providers
 Coverage of out-of-network preventative care – after
deductible at 70% for POS providers
 Discontinued M-Plan HMO in Ft. Wayne and moved
employees to United Healthcare Choice EPO, absent
election to different plan
 Discontinued TRICARE and Definity Silver
 Increases in specialist copays to $30 for HMO and in-
network POS increase specialist copays to $30 for
PPO providers
 Increase outpatient surgery copay to $100 for HMO
and in-network POS
 Additional nutritional counseling benefit offered
 Changes to prescription drug plans, instituting coin-
surance payments with caps
 Changes to the High Option Dental plan to cover
bridges and dentures every 8 years rather than every 5
years and to include coverage for dental implants
2009 Changes
 Healthcare premiums increased
 Additional vision plan option introduced – “Vision
Plan Plus”
RAYTHEON NETWORK CENTRIC SYSTEMS 49
 Increase in contributions to HSAs under United
Healthcare Definity High Deductible Health Plan al-
lowed
 United Healthcare adds Cancer Support Program
2010 Changes
 Healthcare premiums increased
 Implemented two-year plan to change cost share from
80% - 20% to 75% - 25%. 2010 cost share at 77.5% -
22.5%
 Emergency Room copay increased to $150 for HMO,
POS and PPO plans
 HMO outpatient diagnostic labs and X-rays covered
at 80% and the 20% coinsurance applied towards
employees “out of pocket” maximum
 HMO inpatient copay increased to $300, plan covers
90% of cost of inpatient hospitalizations after copay
 HMO out of pocket maximums increased to $1,500
for individuals and $3,000 for families
 Decreases to Company contribution to HRA through
United Healthcare Definity Gold program with in-
creased deductibles for in-network and separate de-
ductibles for out-of-network
 CVS/Caremark replaces Medco as the administrator
for prescription drug program
2011 Changes
 Healthcare premiums increased
 Completed two-year plan to change cost share from
80% - 20% to 75% - 25%
 TRICARE Supplement returns but not as a Raytheon-
sponsored program
 Medical insurance to cover dependents up to age 26
for medical, dental, and vision, pursuant to the Af-
fordable Care Act
 Over-the-counter medications no longer considered
eligible expenses for health care FSAs, HSAs or
HRAs, pursuant to the Affordable Care Act
 Removal of lifetime maximums from medical plans,
pursuant to the Affordable Care Act
 Change in-network outpatient copay to $20
 Delta Dental PPO Plus Premier administering the
high/low dental care options (change from Metlife).
Institution of a roll over maximum for the high op-
tion
2012 Changes
 Healthcare premiums increased
 United Healthcare Choice PPO and United
Healthcare Choice POS consolidated into the United
Healthcare Choice Plus Plan
 Waiver credit of $1,000 for waiving of Raytheon-
sponsored medical coverage no longer offered
 All United Healthcare plans as well as Geisinger and
Optima plans will have consistent coverage for infer-
tility-related care with a $15,000 lifetime maximum
 Wellness Reward introduced
 Health care reform issues continue. All plans other
than United, dependent eligibility up to age 26, pur-
suant to the Affordable Care Act
 Introduced Pharmacy Advisor Program for diabetes
 Generic step-therapy for certain high blood pressure
medications
 Delta Dental program pays for space maintainers to
age 14 rather than age 20. Replacement bridgework
and dentures reverts to once every five years instead
of every eight years
On February 24, 2012, the Union informed Respondent that
it wanted to schedule bargaining sessions for a successor col-
lective-bargaining agreement for the one set expire on April 29.
The parties met for the first time to bargain on April 24. Over
the course of the next five months, the parties met ten times in
an attempt to reach a complete agreement. On April 24, in its
proposals the Union sought to strike the “pass through” lan-
guage contained in Article X, Article XVI, and Exhibit C of the
collective-bargaining agreement. The “pass through” language
contained in the expiring agreement which the Union sought to
strike were the same in provisions concerning disability/leave
of absence, paid time off, and the Raytheon Plan offered to all
of the approximately 65,000 domestic Raytheon employees,
that these same benefits would be offered to the Ft. Wayne
bargaining unit employees on a year to year basis. The Union’s
proposals sought to designate that the disability/leave of ab-
sence, paid time off and Raytheon Plan benefits offered to the
Ft. Wayne bargaining unit employees would remain the same
for the life of the collective-bargaining agreement. On April
25, Respondent responded that the “pass through” language had
been in place for at least the previous three contracts. Raytheon
stated that all 19 bargaining units across the country, compris-
ing 5210 employees, were on the same benefit plan with the
same year to year pass through language. The Union responded
it was no longer willing to waive its right to bargain over a
mandatory subject of bargaining such as health benefits. Ray-
theon rejected the Union’s proposals to modify the contract
language and requested alternative proposals from the Union.
During bargaining on April 25, the Union proposed the “pass
through” language be revised to state that changes may be
made “by mutual agreement.” The Union proposed this lan-
guage in UNE 6(a) relating to funeral leave and jury duty, but
intended that the proposal applied to the same language to paid
time off, group insurance and pension plan, the medical and
vision plan, dental insurance, life insurance, short and long
term disability, reimbursement accounts, and the Raytheon
Savings and Investment Plan. On April 26, Respondent pre-
sented a counter-proposal including language in each of the
relevant provisions that “in the event that a change to this bene-
fit is planned, the Company will provide the Union with ad-
vanced notice of those changes, to the extent possible and clari-
fy any questions regarding them, prior to implementation.” The
Union rejected this counter-proposal. On April 27, the Union
stated that its medical insurance proposal had not changed.
Respondent presented the Union with its last, best and final
offer on April 28. During bargaining on April 28, the Union
informed Respondent that after a meeting with the membership,
no vote had been taken on Raytheon’s last, best and final offer.
According to the Union, the two biggest issues for the member-
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD50
ship were proposed changes in the PTO policy and in continu-
ing to agree to the “pass through” language.
During a bargaining session on May 17, the parties discussed
options to the “pass through” language. The Union made sev-
eral suggestions concerning potential solutions to the “pass
through” language issue, including proposing to explore wheth-
er employees could be insured through the Steelworkers Health
& Welfare Fund. No formal proposals were exchanged by
either side. During bargaining on July 26, Respondent present-
ed the Union with another last, best and final offer. The offer
did not include any modifications to the “pass through” lan-
guage from the expired collective-bargaining agreement. The
bargaining unit did not vote on the offer.
During the September 26, bargaining session, Respondent
maintained its position on the “pass through” issue, but said it
would entertain any options the Union wanted to put on the
table. The Union again stated it would not waive its right to
bargain over a mandatory subject of bargaining. Respondent
explained that without a new proposal from the Union on the
“pass through” issue, it believed the parties were at impasse.
The Union stated its belief that the parties were not in fact at an
impasse. Neither party exchanged any proposals on “pass
through.” There were no bargaining sessions after September
26, although the parties stipulated that during 2012 bargaining,
Respondent and the Union did not reach impasse. On Septem-
ber 26, the Union asked Respondent’s position on whether the
Ft. Wayne bargaining unit employees would be asked to partic-
ipate in the upcoming open enrollment period for the Raytheon
Plan. Raytheon informed the Union that open enrollment for
the 2013 benefits period was about to commence and it would
proceed as planned for all Raytheon employees, based upon
Respondent’s belief this was required by the terms of the ex-
pired collective-bargaining agreement. The Union asked Ray-
theon to exclude the Ft. Wayne bargaining unit employees from
the upcoming open enrollment period.
Respondent instituted changes to its 2013 benefit package
for all domestic employees and subsequently mailed a docu-
ment, entitled “Your Raytheon Benefits” to all U.S. Region
Raytheon employees, including Ft. Wayne employees repre-
sented by the Union. In addition to the “Your Raytheon Bene-
fits” publication, each employee received, or was provided
electronic access to, a “Your Benefits Handbook” outlining all
of the benefits available to Raytheon employees, in their per-
sonalized enrollment kit each year prior to open enrollment.
Open enrollment commenced on October 12, and closed on
October 31. On January 1, 2013, Respondent implemented the
changes to the Raytheon Plan listed below, which applied to the
Ft. Wayne bargaining unit employees:
2013 Changes
 Healthcare premiums increased
 Conversion of the United Healthcare Gold plan to
HSA 2
 Higher in-network deductible for employee and em-
ployee children ($2,500) than under the Gold plan
 Expanded list of women’s health services covered at
100% with no deductible as preventative care, pursu-
ant to the Affordable Care Act
 Generic use requirement for employees to receive
100% coverage for preventative care prescriptions,
pursuant to the Affordable Care Act
 United Healthcare HSA covers various preventative
drugs as outlined on the Treasury Guidance List
without first meeting deductibles
 Expansion of Wellness Reward to $250
 Increase in out-of-pocket costs if employees purchase
brand name prescription when a generic equivalent is
available. Employee pays the cost difference, plus
the copayment
 Flexible Spending Account lowered to $2,500 on
medical, dental and vision, pursuant to the Affordable
Care Act
I find Respondent violated Section 8(a)(1) and (5) of the Act
by unilaterally instituting changes to the bargaining unit health
care coverage following the expiration of the collective-
bargaining agreement. First, it is Board law, with which I
agree, that the management rights clause, which includes lan-
guage in the benefit plan, absent evidence of an agreement to
the contrary, expires with the termination of the collective-
bargaining agreement. See, WKYC-TV, Inc, 359 NLRB 286
(2012); Omaha World-Herald, 357 NLRB 1870 (2011) (regard-
ing the 401(k) plan discussed there.); E.I. DuPont de Nemours,
355 NLRB 1084 (2010), enf. denied, 682 F.3d 65 (D.C. Cir.
2012); Guard Publishing, 339 NLRB 353, 355 (2003); Beverly
Health & Rehabilitation Services, 335 NLRB 635, 636 fn. 6,
enfd. 317 F.3d 316 (D.C. Cir. 2003); Paul Mueller Co., 332
NLRB 312, 313 (2000); Presbyterian University Hospital, 325
NLRB 443, 443 fn. 2, enfd. 182 F.3d 904 (3d Cir. 1999); Iron-
ton Publications, 321 NLRB 1048 (1996); Blue Circle Cement
Co., 319 NLRB 954 (1995), enf. granted in part, denied in part
on other grounds 106 F.3d 413 (10th Cir. 1997); Buck Creek
Coal, 310 NLRB 1240 fn 1 (1993); Control Services, 303
NLRB 481, 484 (1991), enfd. mem. 975 F.2d 1551 (3rd Cir.
1992); Furniture Rentors of America, 311 NLRB 749, 751
(1993) enfd. in rel. part 36 F.3d 1240, 1245 (3d Cir. 1994); U.S.
Can Co., 305 NLRB 1127 (1992), enfd. 984 F.2d 864 (7th Cir.
1993); and Holiday Inn of Victorville, 284 NLRB 916 (1987).
Here, I view the Respondent’s right to make changes during the
term of the existing collective-bargaining agreements to be
nothing more than a creature of those agreements. No evidence
was presented that the parties ever discussed what would hap-
pen concerning Respondent’s benefit plans when the collective-
bargaining agreement expired, or that the Union ever agreed
that it was ceding its right to bargain regarding health insurance
when the agreement expired. Nor, in my view does it make
sense to find that the Union acquiesced in Respondent’s right to
make unlimited changes in health insurance once the agreement
expired because Respondent was allowed to do so during the
agreement. In this regard, since the Union had agreed to Re-
spondent’s contractual right to make those changes during the
term of the agreement, it had no basis to protest those changes
during the agreement when they were made. This should not
establish a practice to make unlimited unilateral changes be-
yond the four corners of the contract which survives the con-
tract, particularly on such an important term and condition of
RAYTHEON NETWORK CENTRIC SYSTEMS 51
employment such as health insurance. To hold otherwise,
would clearly undermine the Union in front of bargaining unit
members, and is inherently destructive of the right to collec-
tively bargain.
The expiration of these management rights provisions at a
contract’s end is grounded in well-established principles pro-
tecting the statutory right of collective-bargaining. That is that
a waiver of a statutory right must be clear and unmistakable.
See for example, Metropolitan Edison Co. v. NLRB, 460 U.S.
693, 708 (1983); Verizon New York, Inc., v. NLRB, 360 F.3d
206, 208 (D.C. Cir. 2004); Chesapeake & Potomac Telephone
Co. v. NLRB, 687 F.2d 633, 636 (2d Cir. 1982); NLRB v.
Southern California Edison Co., 646 F.2d 1352, 1364 (9th Cir.
1981); Communication Workers of America, Local 1051 v.
NLRB, 644 F.2d 923, 927 (1st Cir. 1981); NLRB v. C & C Ply-
wood, 385 U.S. 421 (1967); Heartland Plymouth Court, 359
NLRB No. 155, fn. 1, and Provena St. Joseph Medical Center,
350 NLRB 808, 810–811, 816 (2007). There is no evidence
here that prior to entering the most recent collective-bargaining
agreement, or any of the prior agreements, that the Union was
apprised or agreed that the language concerning Respondent’s
right to modify healthcare benefits was a right that extended
past the agreement. There is no evidence that Respondent ever
made such amendments when no agreement was in effect.
Thus, I cannot conclude it was in the contemplation of the par-
ties or the Union when it entered the agreement that the lan-
guage would go beyond the collective-bargaining agreement’s
expiration. In this regard, following the most recent contract’s
expiration the Union objected to any future unilateral changes
by Respondent. Moreover, the fact that the Union abided by
the terms of the management rights clause while the agreement
was in effect merely confirms they were abiding by what they
agreed to. It does not establish a past practice beyond the literal
meaning of the management right’s clause itself which was
only in effect during the term of the contract.
Moreover, I do not find that Respondent’s unilateral amend-
ments of health benefits here was a mere preservation of the
status quo, or a practice which independently survived the col-
lective-bargaining agreement. In NLRB v. Katz, 369 US 736,
743, 745–747 (1962), the Court found the respondent’s unilat-
eral institution of merit increases where there was a newly cer-
tified union to be violative of Section 8(a)(1) and (5) of the Act.
The Court held “This action too must be viewed as tantamount
to an outright refusal to negotiate on that subject, and therefore
as a violation of s 8(a)(5), unless the fact that the January raises
were in line with the company's long-standing practice of grant-
ing quarterly or semiannual merit reviews-in effect, were a
mere continuation of the status quo…”. The Court went on,
“We do not think it does. Whatever might be the case as to so-
called ‘merit raises' which are in fact simply automatic increas-
es to which the employer has already committed himself, the
raises here in question were in no sense automatic, but were
informed by a large measure of discretion. There simply is no
way in such case for a union to know whether or not there has
been a substantial departure from past practice, and therefore
the union may properly insist that the company negotiate as to
the procedures and criteria for determining such increases.”
Similarly, in McClatchy Newspapers, 321 NLRB 1386, 1390-
1391 (1996), enfd. 131 F.3d 1026 (D.C. Cir. 1987), a case in-
volving a long standing collective-bargaining relationship, the
Board stated at 1390-1391 that, “if the Respondent was granted
carte blanche authority over wage increases (without limitation
as to time, standards, criteria, or the Guild’s agreement), it
would be so inherently destructive of the fundamental princi-
ples of collective bargaining that it could not be sanctioned as
part of a doctrine created to break impasses and restore active
collective bargaining. Were we to allow the Respondent here
to implement its merit wage increase proposal and thereafter
expect the parties to resume negotiations for a new collective-
bargaining agreement, it is apparent that during the subsequent
negotiations the Guild would be unable to bargain knowledgea-
bly and thus have any impact on the present determination of
unit employee wage rates.” The Board stated, “Further, the
Respondent's implementation of this proposal would not create
any fixed, objective status quo as to the level of wage rates,
because the Respondent's proposal for a standardless practice of
granting raises would allow recurring, unpredictable alterations
of wages rates and would allow the Respondent to initially set
and repeatedly change the standards, criteria, and timing of
these increases.” The Board held the respondent’s ongoing
ability to unilaterally set wage increases, excluding the Guild,
would not only directly impact a key term and condition of
employment but would simultaneously disparage the Guild to
bargaining unit employees.7
In Eugene Lovine, Inc., 328 NLRB 294, 294 (1999), enfd. 1

7 Noting that McClatchy Newspapers involved an established bar-
gaining relationship, I do not find Respondent’s argument that it should
be able to engage in its conduct here because such conduct more ad-
versely impacts a union in a new bargaining relationship than a
longstanding one such as the one in the present case. First, to make
such an argument is a tacit admission that the conduct serves to dispar-
age the Union to the bargaining unit, but should nevertheless be tolerat-
ed. However, I do not find the conduct any less damaging to a union in
an established relationship. Either way it sends a clear signal to em-
ployees that the union is powerless to negotiate about, or even explain
changes in key terms of employment. Such conduct leads to instability
and can only encourage the decertification of a union that is powerless
to bargain in the hopes of finding a new one that can, or the conclusion
that the employees are better off with no union at all. See, Litton Busi-
ness Systems, Inc. v. NLRB, 501 U.S. 190, 198, (1991), where the Court
stated:
Sections 8(a)(5) and 8(d) of the NLRA, 29 U.S.C. §§
158(a)(5) and (d), require an employer to bargain “in good faith
with respect to wages, hours, and other terms and conditions of
employment.” The Board has taken the position that it is difficult
to bargain if, during negotiations, an employer is free to alter the
very terms and conditions that are the subject of those negotia-
tions. The Board has determined, with our acceptance, that an
employer commits an unfair labor practice if, without bargaining
to impasse, it effects a unilateral change of an existing term or
condition of employment. See NLRB v. Katz, 369 U.S. 736, 82
S.Ct. 1107, 8 L.Ed.2d 230 (1962). In Katz the union was newly
certified and the parties had yet to reach an initial agreement. The
Katz doctrine has been extended as well to cases where, as here,
an existing agreement has expired and negotiations on a new one
have yet to be completed. See, e.g., Laborers Health and Welfare
Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539,
544, n. 6, 108 S.Ct. 830, 833, n. 6, 98 L.Ed.2d 936 (1988).
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD52
Fed. Appx. 8 (2d Cir. 2001), the Board majority, in finding a
respondent employer’s unilateral change pertaining to work
schedules violative of the Act, stated:
As the judge found, under Bellantoni's explanation,
there was no “reasonable certainty” as to the timing and
criteria for a reduction in employee hours; rather, the em-
ployer's discretion to decide whether to reduce employee
hours “appears to be unlimited.”
The Board and the courts have consistently held that
such discretionary acts are, as stated by the judge, “pre-
cisely the type of action over which an employer must
bargain with a newly-certified Union.” See NLRB v. Katz,
369 U.S. 736, 746 (1962) (employer must bargain with un-
ion over merit increases which were “in no sense automat-
ic, but were informed by a large measure of discretion”);
Garment Workers Local 512 v. NLRB (Felbro, Inc.), 795
F.2d 705, 711 (9th Cir. 1986) (employer must bargain with
the union over economic layoff, which is “inherently dis-
cretionary, involving subjective judgments of timing, fu-
ture business, productivity and reallocation of work”);
NLRB v. Allis-Chalmers Corp., 601 F.2d 870, 875-876
(5th Cir. 1979) (employer must bargain over wage in-
crease which did not result from “purely automatic” policy
and was not pursuant to “definite guidelines”); Adair
Standish Corp., 292 NLRB 890 fn. 1 (1989), enfd. in rele-
vant part 912 F.2d 854 (6th Cir. 1990) (despite past prac-
tice of instituting economic layoffs, employer, because of
newly certified union, could no longer continue unilateral-
ly to exercise its discretion with respect to layoffs). Ac-
cordingly, we find that the Respondent violated Section
8(a)(5) and (1) by unilaterally reducing employee hours.
In Dynatron/Bondo Corp. 323 NLRB 1263, 1265 (1997),
enfd. 176 F.3d 1310 (11th Cir. 1999), in finding that an em-
ployer’s unilateral change pertaining to health insurance premi-
ums was informed by its total discretion and therefore violative
of the Act it was stated:
In the instant case, from 1988 through 1990 when the Re-
spondent claims it followed a settled practice, the employee
contribution percentage changed annually. Thus, rather than
following a settled practice of allocating costs, the Respond-
ent exercised substantial discretion in allocating premium
costs between it and employees. Accordingly, in the absence
of a past practice and in light of the Respondent's substantial
discretion, we find that the Respondent violated Section
8(a)(5) when it did not bargain with the Union about increas-
ing employees' contributions to their health insurance pro-
gram. Garrett Flexible Products, 276 NLRB 704, 706 fn. 4
(1985).
Similarly, in Garrett Flexible Products, 276 NLRB 704, 704 fn
1 (1985) pertaining to a unilateral change in health insurance
the Board stated:
FN1. Contrary to our dissenting colleague, we adopt the
judge's finding that the Respondent violated Sec. 8(a)(5) by
unilaterally increasing the health insurance premium paid by
bargaining unit employees without bargaining with the Union.
As found by the judge, the Respondent did not have an estab-
lished past practice regarding the payment of premium in-
creases. Rather, it exercised substantial discretion in allocating
the increases between the Company and the employees. Thus,
we agree with the judge that the Respondent was obligated to
notify and bargain with the Union before passing on the entire
premium increase to the employees in July 1984. See Oneita
Knitting Mills, 205 NLRB 500 fn. 1 (1973).
A respondent employer has the burden of proof in establish-
ing an affirmative defense that a unilateral postexpiration
change was consistent with past practice. See, Beverly Health
and Rehabilitation Services, Inc., 335 NLRB 635, 636 (2001);
and Eugene Lovine, Inc., 328 NLRB 294 fn. 2 (1999), enfd.
mem. 242 F.3d 366 (2d Cir. 2001). I do not find Respondent
has proven a past practice here which establishes reasonable
certainty as to timing or criteria concerning the changing of
medical benefits. First the stipulated records provides that:
Every year since 2001, and pursuant to the applicable CBA
and health plan documents referenced therein, the Company
has retained and exercised significant discretion to modify
and/or terminate aspects of the Raytheon Plan. Throughout
the year, a dedicated staff of benefits professionals, employed
by Raytheon, surveys available options, costing structures,
and other information, and the Company decides what
plans/benefits to offer to its workforce. The Company then
communicates the changes to its employees prior to the open
enrollment period for the upcoming year.
Thus, the terms of the stipulated record itself provide Re-
spondent exercises “significant discretion” in the modification
of and termination of health care benefits.” The stipulation
provides that in house benefits professionals are in essence
given free rein to come up with whatever benefits they think is
best, and these annual changes are then directly communicated
to employees. In the collective-bargaining agreements them-
selves, the only requirement concerning the unilateral changes
in benefits in the 2000 to 2005 agreement was that “Employee
contributions for the Medical/Vision Plan will not exceed the
rates paid by salaried employees at our Ft. Wayne facilities.”
This language was replaced in the 2005 to 2009, and 2009 to
2012 agreements with the requirement that the Raytheon bene-
fit plans “will be available for all employees, offered on the
same basis as is offered to salaried employees at the Ft. Wayne,
Indiana, location from year-to-year.” In Courier-Journal, 242
NLRB 1093, 1094 (2004), the Board majority noted that “For
some 10 years, the Respondent had regularly made unilateral
changes in the costs and benefits of the employees’ health care
program, both under the parties’ successive contracts and dur-
ing hiatus periods between contracts.” The Board majority
stated, “The significant aspect of this case is that the Union
acquiesced in a past practice under which premiums and bene-
fits for unit employees were tied to those of nonunit employ-
ees.” The Board majority went on to state at 1095, citing
McClatchy Newspapers, 321 NLRB 1386 (1996), enfd. 131
F.3d 1026 (D.C. Cir. 1987), that if an impasse was reached in
bargaining for a new contract that, “Of course, the Employer
can oppose and seek to retain its discretion. If impasse is
reached, consistent with current Board law, the employer can-
RAYTHEON NETWORK CENTRIC SYSTEMS 53
not implement its proposal, because it vests complete discretion
in the Employer.” Thus, the Board found that a proposal based
merely on keeping health benefit levels the same as for non-
bargaining unit employees in fact was a proposal to keep total
control of health care within the province of the respondent
employer and was not implementable upon impasse. I have
concluded, as set forth above, this confirms that Respondent’s
proposal here has no definable criteria concerning a past prac-
tice that survives the ending of the collective-bargaining
agreement, and therefore it should not be allowed to be imple-
mented by Respondent during negotiations in a pre or post
impasse posture. See, NLRB v. Katz, 369 US 736, 743, 745–747
(1962); McClatchy Newspapers, 321 NLRB 1386, 1390-1391
(1996), enfd. 131 F.3d 1026 (D.C. Cir. 1987); Eugene Lovine,
Inc., 328 NLRB 294, 294 (1999), enfd. 1 Fed. Appx. 8 (2nd
Cir. 2001); Dynatron/Bondo Corp., 323 NLRB 1263, 1265
(1997), enfd. 176 F.3d 1310 (11th Cir. 1999); and Garrett Flex-
ible Products, 276 NLRB 704, 704 fn 1 (1985), and the cases
cited within those decisions.
This lack of a definable criteria is evident by the history of
benefit changes since the parties began using the Raytheon Plan
for bargaining unit employees. On January 1, 2001, the Ft.
Wayne bargaining unit employees, pursuant to their recent
collective-bargaining agreement became covered by the Ray-
theon Plan. Plan documents which the parties rely on here in
formulating their stipulation state that “the Company reserves
the absolute right to amend the plan and any or all Benefit Pro-
grams incorporated herein from time to time, including, but not
limited to, the right to reduce or eliminate benefits” They also
provided that, “the Company reserves the absolute and uncon-
ditional right to terminate the Plan and any and all Benefit Pro-
grams, in whole or in part, with respect to some or all of the
Employees.” Thus, while the history of changes following the
implementation of the plan for bargaining unit employees show
they have been theretofore limited to the annual fall enrollment
period, the plan document itself provides no such limitation as
to the timing of changes, nor did Respondent propose any limi-
tation as to timing when it implemented the current plan chang-
es in dispute. Moreover, when the plan was implemented for
bargaining unit employees, the premium payment was an 85–15
percent split between Respondent and participating employees.
Healthcare premiums increased annually in 2002, 2003, and
2004 based on that split. However, in 2005, Respondent intro-
duced a three year plan to increase premium percentage paid by
employees from 85–15 percent split to a 80–20 percent with
final implementation in 2007. Thus, over the course of that
period by 2007, the split in premiums changed on an annual
basis until it was an 80–20 percent, with Respondent paying
80% and employees 20 percent. From 2007 to 2009, premiums
remained at an 80 to 20 percent split. However, in 2010 Re-
spondent introduced a two year plan to change the premium
split to 75–25 percent, with a 2010 cost share at 77.5–2.5 per-
cent in 2010 and a 75–25 percent in 2011. The 75–25 percent
remained in effect for 2012 and 2013. Thus, while premiums
increased annually, the divisions of premium percentages
changed on a ad hoc basis, and the neither the bargaining unit
employees nor the Union could predict those changes, and
since there was no formula or criteria for the changes they
could not be explained by the Union to the bargaining unit.
Such changes in premium percentage allocations have been
held to be too discretionary to establish a past practice status
quo. See, Dynatron/Bondo Corp. 323 NLRB 1263, 1265
(1997), enfd. 176 F.3d 1310 (11th Cir. 1999), and Garrett Flex-
ible Products, 276 NLRB 704, 706 fns 1and 4 (1985). Moreo-
ver, other changes to the plan over the years were completely
random. For instance in 2008 specialist co-pays increased as
did certain outpatient surgery copays. In 2010 emergency room
copays increased, and in 2011 there was a change in-network
outpatient copay to $20. In 2013, there was an increase in out-
of-pocket costs if employees purchased brand name prescrip-
tion when a generic equivalent is available. The employee pays
the cost difference, plus the copayment. Thus, not only were
premiums and premium percentages increasing on an ad hoc
basis, co-pay were randomly changing some years and other
years none. There was no basis for the Union to explain these
increases to employees, and no way for either the Union or the
employees to predict when they would take place. Locking the
Union out from bargaining over these changes, over its protest,
could only serve to disparage the Union to employees.
Thus, I do not find the bargaining unit’s participation in Re-
spondent’s company-wide health plan constitutes an ongoing
status quo when the collective-bargaining agreement ended.
See, Larry Geweke Ford, 344 NLRB 628, 630 fn. 2 (2005),
where in finding a violation concerning the unilateral changes
pertaining to a company-wide health plan for a newly certified
union to be violative of Section 8(a)(1) and (5), the judge, as
affirmed by the Board, stated, “The Respondent has not estab-
lished that it had a past practice of paying a fixed percentage of
its employees' monthly health care premiums; rather, it appears
that the Respondent determines the amount of its contribution
on an ad hoc basis at each annual renewal of the contract and/or
change of insurance carriers. Thus, there is no established status
quo in this regard.” Similarly in Mid-Continent Concrete, 336
NLRB 258, 259 (2001), it was stated:
We agree with the judge's finding that the Respondent violat-
ed Section 8(a)(5) by unilaterally changing bargaining unit
employees' health insurance benefits. An employer's unilateral
change in a mandatory subject of bargaining during collec-
tive-bargaining negotiations violates Section 8(a)(5) of the
Act. NLRB v. Katz, 369 U.S. 736 (1961). Bottom Line Enter-
prises, 302 NLRB 373 (1991). Contrary to the Respondent's
assertions, it is immaterial that its changes to the plan, a man-
datory subject of bargaining, were companywide and as such
involved both unit and nonunit employees. See CompuNet
Communications, 315 NLRB 216, 222 (1994); and United
Hospital Medical Center, 317 NLRB 1279, 1281-1283
(1995).
In the current case, Respondent raised premiums for 12
straight years for health insurance and also altered premium
ratios to the disadvantage of employees on an adhoc basis dur-
ing this period. It also increased certain copays and raised de-
ductibles. This reached a point upon the expiration of the 2012
collective-bargaining agreement that, after meeting with bar-
gaining unit employees, the Union would no longer agree with
the “pass through” language, but wanted to bargain about
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD54
health insurance, as well as certain other benefits that thereto-
fore were covered by the contractual pass through language. I
do not find, as set forth above, that the contractual limitation
that the bargaining unit employees be offered health care and
these other benefits “on the same basis as is offered to salaried
employees at the Ft. Wayne, Indiana, location from year-to-
year” constitutes a discernible status quo which survives the
collective-bargaining agreement.” For it in essence allows
Respondent to do anything it wants in terms of these benefits.
Moreover, it is likely that salaried employees are earning more
than bargaining unit employees and therefore can more easily
absorb increases in healthcare costs. Even assuming that is not
the case for some or all of them, the salaried employees inter-
ests are by definition are not in line with the employees of the
bargaining unit, which in most instances are discrete groups of
individuals whose jobs are sufficiently related to be included in
a defined group of employees who are represented by the Un-
ion. Tying bargaining unit employees benefits to those of non-
bargaining unit employees who are unrepresented, over the
objections of the Union, in effect removes them from repre-
sented status and undermines the Union. Thus, as was urged by
counsel for the General Counsel, I also recommend that the
Board reconsider its holding in Courier-Journal. First, as set
forth above, because there is a basic inconsistency, in finding
that an employer can change benefits such as health insurance
during the midst of negotiations for a new contract based on a
proposal that the employer retain unlimited discretion in chang-
ing those benefits, but at the same time finding that the same
employer would violate the Act by insisting to that proposal to
impasse and then implementing it because it gives the employer
unlimited discretion. Either way, the unilateral implementation
of such a proposal pre or post impasse disparages the Union,
undermines its status and is inherently destructive of its right to
bargain and therefore the employees’ right to union representa-
tion. Such a policy will inevitably lead to industrial instability
by the necessity of unions being replaced by other labor organi-
zations which had not been previously party to collective-
bargaining agreements containing such pass through language.
Moreover, the fact in the past that a union may not have ob-
jected to an employer’s changes in benefit plans during a con-
tract hiatus, to which the Board relied on as distinction in Cou-
rier-Journal, should not be used as a vehicle to have the union
waive its bargaining right in those matters in perpetuity at a
contracts end. In this regard, circumstances change, such as
here when benefit costs rose to a point that they could no longer
be tolerated by bargaining unit members without collectively
bargained safeguards. Rather, a union’s acquiescence to
changes during a contractual hiatus period means nothing more
than the fact that the union found those changes acceptable at
the time. It does not mean that the union has ceded its right to
object and want to bargain about changes in the future when
circumstances change, nor does it signal that union agrees that
an employer has total control over a term and condition of em-
ployment when the Union in representing bargaining unit em-
ployees finds it necessary in representing those employees to
bargain about the matter. Thus, the Board majority in
in E. I DuPont, supra at 1085 fn 5 stated, “We further ob-
serve that the Courier-Journal decisions are in tension with
previously settled principles. First, it is well established that
silence in the face of past unilateral changes does not constitute
waiver of the right to bargain.” See also Owens-Corning Fi-
berglass, 282 NLRB 609 (1987); Exxon Research & Engineer-
ing Co., 317 NLRB 675, 685-686 (1995); Rockwell Interna-
tional Corp., 260 NLRB 1346, 1347 (1982); Ironton Publica-
tions, 321 NLRB 1048 (1996); Verizon New York, Inc. v.
NLRB, 360 F.3d 206, 209 (D.C. Cir. 2004); Ciba-Geigy Phar-
maceuticals Div. v. NLRB, 722 F.2d 1120, 1127 (3d Cir.1983);
NLRB v. Miller Brewing Co., 408 F.2d 12, 15 (9th Cir.,1969);
Pacific Coast Assn. of Pulp & Paper Mfrs. v. NLRB, 304 F.2d
760 (9th Cir. 1962); and Cf. Leeds & Northrup Co. v. NLRB,
391 F.2d 874 (3d Cir. 1968); General Tel. Co. v. NLRB, 337
F.2d 452 (5th Cir. 1964). Thus, I join in the General Counsel’s
view that the Board’s decisions in Courier-Journal and its
progeny should be revisited.8
However, regardless of whether Courier-Journal decisions
are revisited, I find that Respondent violated Section 8(1) and
(5) of the Act by notifying the bargaining unit employees of
changes to their health care benefits in September 2012, and
unilaterally implementing those changes on January 1, 2013,
over the objections of the Union. I find based on the cases
cited that the contractual provisions authorizing such changes
during the duration of the collective-bargaining agreement did
not survive the expiration of the agreement, and that changes
during the term of the collective-bargaining agreement and its
predecessor agreements were made on an ad hoc and unpredict-
able basis, and therefore did not create a status quo or past prac-
tice separate and apart from the agreement.
Concerning cases cited by Respondent, in Beverly Health 7
Rehabilitation Systems v. NLRB, 297 F.3d 468 (6th Cir. 2002),
the court affirmed the Board’s finding that a waiver of a bar-
gaining right in a management’s rights clause did not survive
the term of the collective-bargaining agreement. The court also
found, as I found here, that the respondent there had not estab-
lished evidence of a past practice that independently survived
the expiration of the collective-bargaining agreement and the
court affirmed the Board’s finding that the respondent’s unilat-
eral changes violated Section 8(a)(1) and (5) of the Act. In
Shell Oil Co., 149 NLRB 283, 289–290 (1964), cited by Re-
spondent, the Board was careful to state, “we wish to make it
clear that our present holding is limited to the particular cir-
cumstances of this case and that we do not pass upon whether
or not Respondent may, in the future, lawfully expand its sub-
contracting practice without prior notice and consultation with
the Union.” I have found in the present case that Respondent’s
changes it made to the employees medical benefits on January
1, 2013, were made on an ad hoc basis, and were therefore not
the type of past practice that survived the extant collective-
bargaining agreement. Uforma/Shelby Business Forms v.
NLRB, 111 F.3d 1284 (6th Cir. 1997) and Litton Microwave
Cooking Prods. Div. v. NLRB, 868 F.2d 854 (6th Cir. 1989)
cited by Respondent, are inapposite to the issues presented here
because they involved waiver issues concerning management

8 There were in fact two Courier-Journal cases, 342 NLRB 1093
(2004), and 342 NLRB 1148 (2004).
RAYTHEON NETWORK CENTRIC SYSTEMS 55
rights clause for events that took place when the collective-
bargaining agreement was in effect.
Brannan Sand and Gravel, 314 NLRB 282 (1994), cited by
Respondent, involved a newly certified union. The Board
found, in the circumstances there, that the respondent was not
obligated to refrain from implementing its proposed changes to
health care until an impasse was reached on collective bargain-
ing negotiations as a whole. Nevertheless, the respondent was
found to have violated Section 8(a)(1) and (5) of the Act by
failing to provide the union with timely notice and a meaning-
ful opportunity to bargain over the changes it implemented
because it presented the changes in health care to the union as a
fait accompli. In this regard, by the time the union was ap-
prised of the contemplated changes, the respondent had already
announced them to employees. In the instant case, the Union
opposed the continuation of pass through language in the prior
collective-bargaining agreement concerning health care and
other benefit plans during negotiations and requested to bargain
over health care over which bargaining ensued. Aware of that
opposition, Respondent announced the 2013 changes to health
insurance to employees as part of its annual enrollment, without
first providing the specifics of those changes to the Union or
the ability for the Union to negotiate about them. The an-
nouncement, as part of the enrollment process, was more than a
benign announcement as it was a time limited announcement
for employees to select between various benefit options for
themselves and their families. Respondent’s conduct presented
the Union with a fait accompli as to the specific changes. I
have concluded Respondent’s announcement of nationally for-
mulated changes directly to bargaining unit employees, along
with its adamant stance in negotiations concerning the preser-
vation of the pass through language, evidences a fixed intent to
implement those changes regardless of any position taken by
the Union. See, Times Union, Capital Newspapers, 356 NLRB
No. 169 (2011); Ciba-Geigy Pharmaceuticals Division, 264
NLRB 1013, 1017 (1982), enfd. 722 F.2d 1324 (7th Cir. 1983);
AT&T Corp., 325 NLRB 150 (1997); and Roll & Hold Ware-
house & Distribution Corp., 325 NLRB 41 (1997), enfd. 162
F.3d 513 (7th Cir. 1998). Moreover, Respondent’s presenting
its changes in distributions directly to employees served to
undermine the Union. See Inland Tugs v. NLRB, 918 F.2d 1299
(7th Cir. 1990); and Friederich Truck Service, 259 NLRB
1294, 1299 (1982). The fact that local union officials may have
obtained copies of Respondent’s distributions with overall em-
ployee population does not alter the nature of Respondent’s
actions which were to clearly served employees with a fait
accompli while by passing the Union negotiators. Roll and
Hold Warehouse and Distribution Corp., supra at 42.9 I do not

9 I do not find Nabors Alaska Drilling, Inc., 341 NLRB 610 (2004),
cited by Respondent persuasive here. In Nabors, no violation was
found where the respondent employer notified the union in advance of
specific changes to be made in health care before notifying the employ-
ees, and the union failed to raise a timely objection. A-V Corporation,
209 NLRB 451 (1974), cited by Respondent, is distinguishable from
the present case in that it involved the passing on a pro-rata share of
insurance costs to employees based on a premium increase by an out-
side insurance company. The pro-rata share was defined by the past
practice. I find this different than the wholesale changes made here,
find Respondent’s argument that the Union failed to specifical-
ly request to bargain about the 2013 benefit changes to be per-
suasive. The Union asked to bargain about health insurance,
the parties bargained about health insurance in general and
proposals were made concerning health insurance provisions.
The Union objected to Respondent’s making a unilateral im-
plementation of the 2013 changes, and it was incumbent upon
Respondent to inform the Union of the specifics of those
planned changes and offer to bargain about them with the Un-
ion prior to distributing them to employees as Respondent
would be obligated with any other bargaining proposal.
In addition to my finding that Respondent gave the Union no
opportunity to bargain about the specific changes announced to
employees and then implemented on January 1, 2013, I find
that the type of changes implemented here do not come within
the Stone Container Corp., 313 NLRB 336 (1993), exception to
allow their implementation prior to an overall impasse. The
changes announced here were ad hoc in nature and not part of a
discrete repetitive event. Moreover, they involved changes to
health benefits to 35 bargaining unit employees in a health plan
covering 65,000 employees. The terms of the plan, were admit-
tedly controlled by Respondent, and I do not find any business
urgency allowing for implementation prior to an overall im-
passe in bargaining. In Stone Container, the employer notified
the union in March during negotiations for a collective-
bargaining agreement that it could not afford to give employees
an annual April wage increase. The Board found the employer
made its proposal in time to allow for bargaining over the mat-
ter, but the union made no counterproposal concerning the
April wage increase and did not raise the issue again during
negotiations. The Board concluded that the employer satisfied
its bargaining obligation regarding the April wage increase and
was not required to refrain from implementing the change until
an overall impasse had been reached on bargaining for a collec-
tive-bargaining agreement as a whole. The Board reasoned that
the annual April wage review was a discrete event that just
simply happened to occur while contract negotiations were in
progress. The annual wage increase ranged from 3 to 6 percent
for hourly employees. However, in E.I. DuPont De Nemours

along with Respondent’s ongoing demand to be able to unilaterally
alter health benefits at its will. Finley Hospital, 359 NLRB 156 (2012),
is also distinguishable from the present case in that it involved a dis-
crete and clearly defined wage increase, the timing of which was speci-
fied in the collective-bargaining agreement, which the Board majority
concluded the implementation of which survived the contract as a term
of employment. There was no objection by the union there to the con-
tinuation of the increase.
Here, Respondent was seeking post contract total control of health
care benefits, the Union objected, and Respondent unilaterally imple-
mented multiple changes to the benefit plan despite the Union’s objec-
tion. Finally, Mt. Clemens General Hospital, 344 NLRB 450 (2005),
involved changes to a TSA plan during the term of collective-
bargaining agreement in which the judge read the contractual language
along with the bargaining history as the union there having consciously
waived the right to bargain over those issues. That presents a different
situation from that here, where the contract is expired, and Respondent
seeks to continue its contractual ability to make unlimited changes to
healthcare benefits in perpetuity and thereby eviscerating the Union’s
bargaining rights over a key term and condition of employment.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD56
and Company, 355 NLRB 1096, 1106–1107 (2010), the Board
approved the judge’s findings that the respondent’s changes to
its benefit plans in 2005 did not fall under the permissible ex-
ception under Stone Container of an annual adjustment to a
discrete subject. It was stated in DuPont that the respondent’s
changes there were not confined to an adjustment to a single
plan, but included the initiation of a new healthcare savings
account plan, the creation of penalties for employees who do
not use a designated mail-order pharmacy for certain prescrip-
tions, and wide-ranging changes to employee costs and/or cov-
erages for financial planning, medical care, dental care, and
vision care. It was concluded that the collection of changes
bore no meaningful resemblance to the “discrete” events that
were at issue in Stone Container and the cases applying it. It
was stated the respondent’s changes included a number of ad
hoc actions that were not annually occurring events, and about
which the Respondent was not required to take some action
such as the new healthcare savings plan, the new prescription
drug penalty, and the change in financial planning premiums.
It was stated, “Acceptance of the Respondent's argument that
changes to a wide range of benefits, and even the addition
wholly new benefit plans, should all be considered part of one
discrete, recurring, event would deprive that limitation of much
of its meaning and would transform the Stone Container stand-
ard into what the Board indicated it should not be—i.e., an
exception of “broad application” and “disruptive potential.” id.
at 1107. In the instant case, Respondent’s 2013 changes to
health care included, increased premiums, the conversion of the
United Healthcare Gold plan to HSA 2, higher in-network de-
ductible for employee and employee children ($2500) than
under the Gold plan, expansion of wellness reward to $250,
increase in out-of-pocket costs if employees purchase brand
name prescription when a generic equivalent is available, all of
which were not regularly occurring changes. Moreover, Re-
spondent’s conduct concerning health insurance must be
viewed in the context that it was insisting on maintaining the
“pass through” language on a multitude of benefits, such as
paid time off, group insurance and pension plan, the vision
plan, dental insurance, life insurance, short and long term disa-
bility, reimbursement accounts, and the Raytheon Savings and
Investment Plan.
Respondent contends that it never agreed to provide benefits
under its plan uncoupled from a unilateral right to make chang-
es therein. However, there is no showing that the Union by
agreeing to plan participation agreed to abandon its right to
bargain over health insurance in perpetuity or for that matter
beyond the confines of the contract, or any basis for Respond-
ent to presume such. Here, Respondent, like any other employ-
er, could have presented its precise proposed 2013 changes to
the plan to the Union, negotiated about them in good faith, or if
a lawful impasse was reached implemented them as offered.
Instead, Respondent took the position that the Union had
waived its right to bargain, in essence in perpetuity, insisted
that such a waiver be incorporated in the next collective-
bargaining agreement, and implemented plan changes on an ad
hoc basis with no prior notice of those changes to the Union,
and instead with direct communication with employees. I find
Respondent’s insistence on absenting the Union from the bar-
gaining process, combined with its unilateral change concern-
ing health care constitutes conduct inimical to the bargaining
process.
Respondent argues that public policy requires dismissal of
the complaint by quoting from the dissent in the Board’s
DuPont decision, supra, 355 NLRB at 1090, where it as assert-
ed that the sky rocketing costs of health care and the questiona-
ble financial status of many multiemployer pension and health
and welfare plans company-wide programs are frequently the
only viable option. Respondent, citing the improvements it has
made in its health plan, states Respondent never abused its
privileges, and both parties benefited from their bargain.
Agreeably, there are arguments in favor a large scale plans, but
of course evaluating Respondent’s self-described benevolence
omits one detail, there is also a public policy in favor of collec-
tive-bargaining. Moreover, as demonstrated here, the Union
went along with Respondent’s changes to health insurance for a
number of years, until it concluded, after meeting with bargain-
ing unit employees, that it was no longer in their interest to do
so. While large national plans have their place, they may be
more advantageous to certain participants than others in that the
cost of living in different parts of the country varies, thus the
cost of healthcare and outside insurance in those areas may
vary too, so while the plan based on a national average of costs
may serve employees with high salaries or living in higher cost
of living areas well, it may serve to the detriment of other
groups of lower paid employees and perhaps for those groups
of employees when they are represented by a union there is the
necessary inconvenience of collective bargaining. This does
not necessarily require those employees to be removed from the
plan, because bargaining in good faith may result in a mutual
agreement to leave them in.
Respondent also cites cases relating to benefit plan distribu-
tion and/or coverage arguing ERISA promotes uniformity of
rules pertaining to national benefit plans. See, e.g., Kennedy v.
Plan Adm’r for Raytheon Say. & Inv. Plan, 129 S.Ct. 865
(209). I do not find Respondent’s argument to be persuasive
here for the remedy sought is not to alter the plans benefits, but
to determine if the plan changes were unlawfully implemented
on January 1, 2013. The decisions Respondent cites do not
relate to the remedial rights under the NLRA pertaining to
ERISA based plans. See, Décor Group, Inc., 356 NLRB 1391,
1391 fn. 2 (2011); and Laborers Health & Welfare Trust Fund
v. Advanced Lightweight Concrete Co., 484 U.S. 539, 552–553
(1988). Moreover, Respondent stipulated that the Raytheon
plan was not monolithic in that it consisted of regional plans.
In the initial collective-bargaining agreement entered into be-
tween Respondent and the Union it provided that, “that contri-
butions for the Medical/Vision Plan would not exceed the rates
paid by salaried employees at the Ft. Wayne facility.” This
language implies at the time, the plan administrators were al-
lowed to charge the bargaining unit employees lesser rates than
salaried employees. In 2003, Definity Health Care Options
were added to the plan everywhere except California. In 2008,
it was noted in the annual changes that Respondent “Discontin-
ued M-Plan HMO in Ft. Wayne and moved employees to Unit-
ed Healthcare Choice EPO, absent election to different plan.”
Thus, Respondent has made changes to the plan based on area
RAYTHEON NETWORK CENTRIC SYSTEMS 57
requirements. Moreover, I do not find the General Counsel
seeks Respondent to modify the plan, for there are various op-
tions available to the parties through bargaining, including bar-
gaining to a good-faith impasse over Respondent’s proposed
annual changes to the plan which was not done here, and there-
after implementing them, or bargaining to provide employees
with an alternate plan, or increased compensation to help defray
the costs of the plan, to state a few. Respondent has acknowl-
edged this concept in its January 2013 distribution to employ-
ees concerning amendments to plan benefits wherein in it stat-
ed, “Benefits for employees represented by a bargaining unit
will be in accordance with their collective-bargaining agree-
ment." In sum, I do not find Respondent has raised any valid
defense to its statutory duty to bargain and for the reasons stat-
ed I find it has violated Section 8(a)(1) and (5) of the Act.
CONCLUSIONS OF LAW
1. Raytheon Network Centric Systems (Respondent) admits
that it is an employer engaged in commerce within the meaning
of Section 2(6) and (7) of the Act; and that the United Steel,
Paper & Forestry, Rubber, Manufacturing, Energy, Allied-
Industrial & Service Workers International Union, AFL–CIO
(the Union) is a labor organization within the meaning of Sec-
tion 2(5) of the Act.
2. The Union represents Respondent’s employees in the fol-
lowing unit (the Unit) appropriate for collective bargaining
within the meaning of Section 9(b) of the Act:
All hourly rated employees in the production, material han-
dling, maintenance, and engineering assembly shop operators,
test equipment and condenser engineering departments, em-
ployed at any plant, warehouse, and branch in Allen County,
Indiana; excluding all foremen, supervisors, office help, la-
boratory technicians, guards, over-the-road truck drivers,
Toolroom employees (Toolmakers, Tool Grinders, Machin-
ists, Tool and Gauge Inspectors, Tool crib attendants and Ap-
prentices as certified in NLRB Case No. 13-RC-6126 and
limited exclusively to such certification) and all engineering
departments except that listed above.
3. In September or October 2012, Respondent announced
changes to its health insurance to employees in the Unit, and on
January 1, 2013, Respondent implemented those announced
changes for Unit employees, without affording the Union an
opportunity to bargain with Respondent about those changes,
and without bargaining with the Union to a good-faith impasse
concerning those changes, and by such conduct Respondent has
violated Section 8(a)(1) and (5) of the Act.
4. The above unfair labor practices affect commerce within
the meaning of Section 2(6) and (7) of the Act.
THE REMEDY
Having found that Respondent has engaged in certain unfair
labor practices, I shall recommend it be ordered to cease and
desist and take certain affirmative action designed to effectuate
the policies of the Act. With respect to the Respondents Janu-
ary 1, 2013 changes to bargaining unit employees health and
medical insurance, I shall recommend that Respondent be re-
quired to make available to the unit employees the health insur-
ance and medical coverage available prior to those changes at
the pre-change rates and costs. In addition, the Respondent
shall reimburse past, present, and future unit employees for any
expenses and premium costs ensuing from the January 1, 2013,
unilateral changes. See, Larry Geweke Ford, 344 NLRB 628
(2005). The reimbursement to employees shall be computed in
accordance with Ogle Protection Service, 183 NLRB 682
(1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest at the
rate prescribed in New Horizons, 283 NLRB 1173 (1987),
compounded daily as prescribed in Kentucky River Medical
Center, 356 NLRB 6 (2010). In addition, the decision in Latino
Express, Inc., 359 NLRB 518 (2012), shall be applied by Re-
spondent in compensating affected employees for the adverse
tax consequences, if any, of receiving lump-sum backpay
awards, and the filing of a report with the Social Security Ad-
ministration allocating the backpay awards to the appropriate
calendar quarters for each employee
On these findings of fact and conclusions of law and on the
entire record, I issue the following recommended.10
ORDER
Pursuant to Section 10(c) of the National Labor Relations
Act, it is hereby ordered that Respondent Raytheon Network
Centric Systems its officers, agents, successors, and assigns,
shall
1. Cease and desist from
(a) announcing changes to health insurance to bargaining
unit employees represented by the United Steel, Paper & For-
estry, Rubber, Manufacturing, Energy, Allied-Industrial &
Service Workers International Union, AFL–CIO (the Union),
and implementing changes to health insurance for those em-
ployees without affording the Union an opportunity to bargain
about those changes, and without bargaining with the Union to
a good-faith impasse concerning those changes.
(b) In any like or related manner interfering with, restraining,
or coercing employees in the exercise of the rights guaranteed
them by Section 7 of the Act.
2. Take the following affirmative action necessary to effec-
tuate the policies of the Act.
(a) Restore, upon the Union’s request, health insurance for
bargaining unit employees represented by the Union to that in
effect immediately prior to January 1, 2013, and continue it in
effect until an agreement is reached with the Union to replace
it, or until a good-faith impasse in bargaining allows Respond-
ent to replace it.
(b) Make whole, with interest, bargaining unit employees by
reimbursing them for any expenses and premium costs ensuing
from the January 1, 2013 unilateral changes in health insurance
in the manner set forth in the remedy section of the this deci-
sion.
(c) Preserve and, within 14 days of a request, or such addi-
tional time as the Regional Director may allow for good cause
shown, provide at a reasonable place designated by the Board
or its agents, all payroll records, social security payment rec-

10 If no exceptions are filed as provided by Sec. 102.46 of the
Board’s Rules and Regulations, the findings, conclusions, and recom-
mended Order shall, as provided in Sec. 102.48 of the Rules, be adopt-
ed by the Board and all objections to them shall be deemed waived for
all purposes.
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD58
ords, timecards, personnel records and reports, and all other
records, including an electronic copy of such records if stored
in electronic form, necessary to analyze the amount of backpay
and/or other compensation due under the terms of this Order.
(d) Within 14 days after service by the Region, post at its fa-
cilities in Fort Wayne Indiana, or any other facilities where
bargaining unit employees work copies of the attached notice
marked Appendix.11 Copies of the notice, on forms provided by
the Regional Director for Region 25, after being signed by the
Respondent’s authorized representative, shall be posted and
maintained for 60 consecutive days in conspicuous places in-
cluding all places where notices to employees are customarily
posted. In addition to physical posting of paper notices, notices
shall be distributed electronically, such as by email, posting on
an intranet or an internet site, and/or other electronic means, if
the Respondent customarily communicates with its employees
by such means. Reasonable steps shall be taken by the Re-
spondent to ensure that the notices are not altered, defaced, or
covered by any other material. If the Respondent has gone out
of business or closed the facility involved in this proceeding,
Respondent shall duplicate and mail, at its own expense, a copy
of the notice to all current or former bargaining unit employees
employed by Respondent at any time since September 26,
2012.
(e) Within 21 days after service by the Region, file with the
Regional Director a sworn certification of a responsible official
on a form provided by the Region attesting to the steps that
Respondents have taken to comply.
Dated, Washington, D.C. November 19, 2013.
APPENDIX
NOTICE TO EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government

11 If this Order is enforced by a Judgment of the United States Court
of Appeals, the words in the notice reading “Posted by Order of the
National Labor Relations Board” shall read “Posted Pursuant to a
Judgment of the United States Court of Appeals Enforcing an Order of
the National Labor Relations Board.”
The National Labor Relations Board has found that we violated
Federal labor law and has ordered us to post and obey this no-
tice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your be-
half
Act together with other employees for your benefit and
protection
Choose not to engage in any of these protected activi-
ties.
WE WILL NOT announce changes to health insurance to bar-
gaining unit employees represented by the United Steel, Paper
& Forestry, Rubber, Manufacturing, Energy, Allied-Industrial
& Service Workers International Union, AFL–CIO (the Union),
and implement changes to health insurance for those employees
without affording the Union an opportunity to bargain about
those changes, and without bargaining with the Union to an
agreement and/or a good-faith impasse concerning those
changes.
WE WILL NOT in any like or related manner interfere with, re-
strain, or coerce employees in the exercise of the rights guaran-
teed them by Section 7 of the Act.
WE WILL, on request of the Union, restore health insurance
for bargaining unit employees represented by the Union to that
in effect immediately prior to January 1, 2013, and continue it
in effect until an agreement is reached with the Union to re-
place it, or until a good-faith impasse in bargaining with the
Union allows us to replace it.
WE WILL make whole, with interest, United Steel, Paper &
Forestry, Rubber, Manufacturing, Energy, Allied-Industrial &
Service Workers International Union, AFL–CIO bargaining
unit employees for any expenses and premium costs ensuing
from the January 1, 2013, unilateral changes in health insurance
in the manner described in the Board’s decision.
RAYTHEON NETWORK CENTRIC SYSTEMS