[00:00:02] Speaker 06: Case number 17, that's 1133 at L. Tremont Manufacturing, LLC. [00:00:16] Speaker 00: Morning your honors may it please the court my name is tony running the issue before the court this morning is whether the board's decision is contrary to the court's controlling precedent and therefore must be set aside The board's position is predicated upon its view that tremont's failure to provide notice and refusal to provide Refusal to bargain the effects of a matter within a contract requires a clear and convincing [00:00:39] Speaker 00: Excuse me a clear and unmistakable waiver the court's precedent in contrast consistently rejects that view Considering the contents of a collective bargaining agreement is the question of contract review Before that being said before the court in this case There is no dispute that the board has found and the board has since conceded that Tremont is a burn successor and [00:01:04] Speaker 00: that Tremont lawfully established the initial terms and conditions of employment, and three, that Tremont's decision to lay off 12 employees in this particular case was not a subject of bargaining, presumably because that was already included within the initial terms and conditions of employment. [00:01:26] Speaker 00: So consistent with this court's decision in Enloe Medical Center, it would be rather unusual to interpret a contract as granting an employer the unilateral right to make a particular decision, but as to reserving the union's rights to bargain over the effects of that decision. [00:01:45] Speaker 02: In this particular case, again... Is the handbook a contract? [00:01:49] Speaker 02: The handbook is a contract, Your Honor. [00:01:51] Speaker 02: I thought the handbook said it wasn't a contract. [00:01:54] Speaker 02: It certainly doesn't bind the employer. [00:01:55] Speaker 00: Well, this Court has decided in SF Market Street Healthcare, a similar case, a burn successor, where the employer distributed an employee handbook, that that handbook provision did constitute terms and conditions of an employment. [00:02:10] Speaker 02: Oh, yeah, no. [00:02:11] Speaker 00: And I understand... [00:02:14] Speaker 00: I understand where you're going with respect to the language of the handbook itself. [00:02:19] Speaker 00: The handbook itself is addressed to not only the bargaining unit, but it also addressed certain other non-bargaining unit employees. [00:02:25] Speaker 00: And the concern from that standpoint was to avoid altering the at-will employment relationship that govern those particular individuals. [00:02:34] Speaker 00: So that was the distinction in this particular case. [00:02:37] Speaker 00: But the handbook itself was conveyed or communicated to the union that it was the initial terms and conditions of employment, therefore constituting a contract. [00:02:46] Speaker 00: We advised the union what those terms were. [00:02:48] Speaker 02: They accepted... Is it a contract with the union? [00:02:51] Speaker 00: The... The... Handbook? [00:02:54] Speaker 02: Yes. [00:02:55] Speaker 02: It's a contract with the union. [00:02:56] Speaker 00: It's not a collectively bargaining contract, but it's a contract that governs the terms and conditions of the union employees. [00:03:04] Speaker 04: Well, isn't it a contract, if it's anything that's a contract with the employees who accepted continued work, it's not with the union, right? [00:03:12] Speaker 04: It's not a collective bargained agreement. [00:03:14] Speaker 00: Well, you're right, Your Honor. [00:03:15] Speaker 00: We didn't collectively bargain with the union. [00:03:17] Speaker 04: You cited Menlo. [00:03:20] Speaker 04: Are there any cases which [00:03:23] Speaker 04: that you know of which hold that an employer who, as here, reserves the right to lay off also, that that implies that they've reserved the right to deal with severance and other benefits. [00:03:38] Speaker 04: Is there any case that says that? [00:03:40] Speaker 00: Well, so it's the, with respect to layoff, specifically, that if the employer reserves the right to layoff. [00:03:49] Speaker 04: Yeah, like in this case. [00:03:51] Speaker 04: Right. [00:03:51] Speaker 04: Is there any case that says that that implies that the employer has also retained the right to unilaterally resolve the question of severance pay and other terms of layoffs? [00:04:03] Speaker 00: Yeah, I think that's consistent with this court's, maybe not with respect to the layoff question itself, but it's consistent with this court's precedent for 25-plus years, that if the contract specifically addresses a mandatory subject departing... But I was asking you whether there's a case in the context of layoffs. [00:04:20] Speaker 00: That's all I want you to... That's all I want to know. [00:04:26] Speaker 00: Off the top of my head, I can't cite one specifically with respect to layoff again. [00:04:30] Speaker 00: It's being a mandatory subject to bargaining and this court has recognized the fact that again when there is a mandatory subject to bargaining and it's addressed by the contract terms then under that scenario there's no obligation then to provide or to negotiate to provide notice and to negotiate the effects. [00:04:48] Speaker 01: Can I ask a question about that? [00:04:50] Speaker 01: 7.22 of the handbook, JA 151. [00:04:55] Speaker 01: Any severance pay offered is at company discretion. [00:05:03] Speaker 01: Doesn't that sound like that's already been, that that's one of the initial terms and conditions? [00:05:09] Speaker 01: I'm just sort of wondering why no one's pointed to that. [00:05:14] Speaker 00: I can't explain that, Your Honor, but yes, absolutely. [00:05:17] Speaker 00: And I think... [00:05:20] Speaker 00: Sometimes there's some secret reason why the particularly a party who it might help hasn't raised it is there yeah, I can't explain that your honor I don't know that there's a specific reason as to why it wasn't raised other than the fact that the employers kind of Basis for their arguments in this particular case is based upon the contract coverage burden and so here's covered so unlike So if you were responding to a contract coverage argument [00:05:50] Speaker 01: where the argument is it talks about layoffs but not about severance pay. [00:05:54] Speaker 01: It seems like the logical thing would be to say, oh no, it talks about severance pay. [00:05:59] Speaker 00: Yeah, and I think between the two parties, the focus got to be on whether there was layoff language in place, and then with respect to the duty to provide notice and the duty to bargain the effects, that kind of maybe got lost in the shuffle, Your Honor. [00:06:13] Speaker 01: So is there any case [00:06:16] Speaker 01: involving initial terms and conditions where the NLRB has applied the waiver rule for the contract coverage rule. [00:06:33] Speaker 00: You mean initial terms and conditions as a burn successor? [00:06:36] Speaker 00: Yeah. [00:06:37] Speaker 00: Yeah, so Monterey newspaper. [00:06:39] Speaker 01: I don't see what rule at all they're applying in Monterey. [00:06:42] Speaker 01: I mean, I get the results of Monterey, but what rule were they applying? [00:06:46] Speaker 01: they use the words maybe i read it too fast yeah monterey and i think sf market wait wait sorry time on monterey okay did they use either the words waiver or the words contract coverage what did they say they were using [00:07:19] Speaker 00: Excuse me, Your Honor. [00:07:33] Speaker 01: It holds something along the lines that you'd like it to hold, that is... [00:07:37] Speaker 01: establishment of the pay bands means that they can establish the actual pay. [00:07:41] Speaker 01: Right. [00:07:41] Speaker 01: But I don't see what... Based upon the terms and conditions of that. [00:07:45] Speaker 01: Yeah, yeah. [00:07:46] Speaker 01: But I don't see any... It doesn't say we're applying a waiver rule or we're applying a contract coverage rule or applying any other kind of rule. [00:07:53] Speaker 00: Yeah, no, I would tend to agree with you, Your Honor, that it doesn't specifically state that, again, reaching the conclusion, though, based upon the initial terms and conditions, that in Monterey, they were able to establish the new pay system for initial hires. [00:08:08] Speaker 01: So our contract coverage rule is about a collectively bargained contract, right? [00:08:13] Speaker 01: We don't have any contract coverage rule. [00:08:15] Speaker 01: There's no case where it's an agreement between an individual employee and the employer, which is what this is, right? [00:08:24] Speaker 00: Well, I don't know that I'd necessarily characterize it as that. [00:08:28] Speaker 00: I understand where you're going with respect to that specific question. [00:08:32] Speaker 00: Again, this isn't from that perspective. [00:08:35] Speaker 00: It's a novel issue before the court to some extent. [00:08:40] Speaker 00: The trademark certainly cites case law that indicates that contract coverage applies in this particular case and applies to burn successors. [00:08:48] Speaker 00: The union cites situations where it's a new union and there aren't any terms and conditions of employment. [00:08:55] Speaker 00: But I guess what I leave the court with is if we don't [00:08:59] Speaker 00: You're correct. [00:09:00] Speaker 00: It's not a collectively bargain agreement in this particular case. [00:09:03] Speaker 00: The employer was free to set the initial terms and conditions of employment. [00:09:06] Speaker 01: But it wasn't even an agreement with the union. [00:09:08] Speaker 00: The union didn't agree to it, right? [00:09:10] Speaker 00: The union didn't agree to it, but the union was bound by the terms and conditions of the agreement, just as the employer was. [00:09:15] Speaker 04: But the theory behind the contract coverage idea is that the union had an opportunity to bargain about the issue, and if it isn't in there, then we assume it chose not to. [00:09:27] Speaker 04: And you can't apply that in a situation like this, where the union had nothing to do with the handbook, and it seems to me you can't even apply it. [00:09:37] Speaker 04: Even if you see this as a contract between the employer and the employees who chose to keep working, they didn't get to bargain over that at all. [00:09:46] Speaker 04: And true, they could have decided not to. [00:09:48] Speaker 04: to work there, but there was no collective bargaining from which you could assume that there was a decision by one of the parties to leave the issue up to the employer. [00:09:58] Speaker 00: Is that correct? [00:10:00] Speaker 00: Your Honor, you're correct, but I respectfully disagree that- Wait, I'm correct, but you disagree? [00:10:04] Speaker 00: Well, I disagree to the extent that there is no obligation to collectively bargain in this particular case. [00:10:10] Speaker 00: It's a burn successor, so they set a unique quota. [00:10:12] Speaker 04: I didn't say that. [00:10:13] Speaker 04: I didn't. [00:10:14] Speaker 04: That's not my point. [00:10:16] Speaker 04: The company is a burn successor and the board agrees with that. [00:10:20] Speaker 04: That wasn't my point. [00:10:22] Speaker 04: But my point was this handbook is not the LJ and the board said look this handbook is not a contract that implicates the contract coverage. [00:10:33] Speaker 04: If it's not a contract then your honor what is it there was a collective bargaining bargaining contract correct. [00:10:40] Speaker 04: Isn't that right? [00:10:42] Speaker 04: And aren't I right that the contract coverage theory turns on the fact that the contract was collectively bargained? [00:10:52] Speaker 00: No? [00:10:53] Speaker 00: Again, Your Honor, I think it turns on the theory that there's a contract in place. [00:10:56] Speaker 00: I mean, in this case, if you turn the tables, had the Tremont in this particular case [00:11:01] Speaker 00: unilaterally changed the terms and conditions of employment, whether that be vacation or health insurance benefits or whatever it was, the union or the board would have objected to that and said that the employer was bound by the initial terms and conditions that it established and therefore couldn't unilaterally change those terms and conditions. [00:11:22] Speaker 00: So in MLO, this is the case you rely on, right? [00:11:26] Speaker 01: Among others, I mean, Heartland. [00:11:28] Speaker 01: Yes, and they describe, they explain [00:11:31] Speaker 01: the underlying basis of our contract coverage doctrine, right? [00:11:34] Speaker 01: And that is that because under Section 301 of the LMRA, parties to a collective bargaining agreement are entitled to bring a dispute as to the interpretation of the contract directly to federal court, we don't defer at all. [00:11:48] Speaker 01: We don't have our normal deference, right? [00:11:50] Speaker 01: Right. [00:11:50] Speaker 01: And so we're going to interpret it, and we interpret [00:11:57] Speaker 01: you know, the basic agreement is covering effects. [00:11:59] Speaker 01: That's our interpretation. [00:12:02] Speaker 01: When it's not under contract cover, when it's not subject to an independent action under the LMRA, then we have to defer to the board's reading of the National Labor Relations Act. [00:12:20] Speaker 01: We're in agreement on that. [00:12:21] Speaker 01: That's the basis of our claim. [00:12:23] Speaker 01: This individual handbook, [00:12:26] Speaker 01: Could could employees come in and bring us up section 301 case. [00:12:32] Speaker 01: No, no, but the union could the union bring bring a section for interpretation of the of the contract. [00:12:42] Speaker ?: I. [00:12:43] Speaker 00: I think if, again, back to my example, had the employer made a unilateral change to other location benefits or whatever, the union could have come in and made it LMRA. [00:12:54] Speaker 01: LMRA are just an unfair labor practice case. [00:12:59] Speaker 01: I've never heard of it. [00:13:01] Speaker 01: I don't in any way suggest I'm a great expert on this, but I've never heard of being able to come under the LMRA to bring a handbook claim, and not collectively bargain handbooks. [00:13:11] Speaker 00: But it's a contract. [00:13:12] Speaker 00: It's the existing initial terms. [00:13:13] Speaker 00: It's the terms and conditions of employment that the parties are bound by. [00:13:19] Speaker 01: There's no trick answer to this because I don't know the answer. [00:13:23] Speaker 01: Does the Labor Management Relations Act permit an individual employee to make a claim that the initial conditions were violated? [00:13:36] Speaker 01: I can't answer that. [00:13:41] Speaker 02: How long can initial conditions continue? [00:13:46] Speaker 00: So the employer gets to set the initial terms and conditions, and then the parties from there are obligated to bargain those initial terms and conditions. [00:13:54] Speaker 00: They can settle on those terms, or they can come to new terms and conditions on a successor contract, if you will. [00:14:00] Speaker 02: The collective bargaining can take years. [00:14:02] Speaker 02: So essentially, this is what governs until a new collective bargaining comes into place, or there is a charge of failure to bargain in good faith. [00:14:10] Speaker 00: Correct. [00:14:13] Speaker 01: OK. [00:14:13] Speaker 01: We'll hear from the NLRB. [00:14:15] Speaker 05: Thank you. [00:14:25] Speaker 01: Just wondering whether you know the answer to the question I was asking your colleague, because I don't know the answer, so I'm not pretending I do. [00:14:33] Speaker 03: Your Honor, I hate to start out an argument of, first of all, David's side to the Labor Board. [00:14:37] Speaker 03: That stumps me too, but I've never been aware in a situation like this that an individual employer could bring a 301 suit under the LMRA for an employee handbook. [00:14:50] Speaker 01: So that's why you think waivers should be the analysis, right? [00:14:54] Speaker 03: Well, Your Honor, the company's argument here was that this is a contract coverage case. [00:15:01] Speaker 03: There is no claim before the board that, absent contract coverage, there was any error in applying clear and mistaken waiver or that on the facts of this case, there was not or that there was any clear and mistaken waiver. [00:15:16] Speaker 03: So what was the test? [00:15:19] Speaker 01: The board applied the waiver test. [00:15:22] Speaker 01: The board looked at both. [00:15:23] Speaker 01: The board looked at... Assume we think that the board is wrong in its application of a contract coverage claim, which the board didn't really want to address anyway, right? [00:15:32] Speaker 01: They only did it for our benefit. [00:15:34] Speaker 01: Fair enough? [00:15:34] Speaker 01: Is that right? [00:15:35] Speaker 01: The board obviously is aware of the differences. [00:15:38] Speaker 01: But its own preferred view is waiver. [00:15:40] Speaker 01: So your argument is that the other side never suggested that waiver was not the appropriate [00:15:48] Speaker 01: We'll get to the merits of that argument in a minute. [00:15:50] Speaker 01: But your suggestion is they never suggested that the waiver was inappropriate? [00:15:57] Speaker 03: Absent to contract coverage. [00:15:59] Speaker 03: That if contract coverage was not the proper standard, that the board erred by thereafter looking at a clear and unmistakable waiver test. [00:16:09] Speaker 02: When you say waiver, do you mean waiver by the union or just imagine the handbook was clear and explicit? [00:16:17] Speaker 02: It's exactly to every effect that would happen from a layoff. [00:16:21] Speaker 03: Correct. [00:16:21] Speaker 03: Well, looking at a clear and unmistakable waiver in the context of the language of the handbook. [00:16:25] Speaker 01: Why would waiver apply here? [00:16:26] Speaker 01: What are they waiving? [00:16:27] Speaker 01: What right is the union either waiving or not waiving? [00:16:31] Speaker 03: Your Honor, the union isn't necessarily waiving any specific right. [00:16:35] Speaker 03: And the board, again, in adopting the central focus of the board's decision is based on the company's argument that this is contract coverage, contract coverage, contract coverage. [00:16:45] Speaker 01: So in other words, you're saying the board has no reason for its decision other than to reject the reason raised by the employer? [00:16:52] Speaker 03: Your Honor, the board's decision is rejecting the contract coverage standard as it applies to this case, because there is no collective bargaining agreement. [00:16:59] Speaker 03: There's no contract. [00:17:01] Speaker 03: The handbook itself, even putting aside a collective bargaining agreement, the handbook itself says it's not a contract. [00:17:08] Speaker 03: And then the board then also, in the context of the administrative law judge's decision, did recognize, looking under clear and unmistakable waiver, that there is no clear and unmistakable waiver. [00:17:18] Speaker 01: Right, but does that make any sense in a circumstance in which the union has no rights to begin with? [00:17:23] Speaker 03: Your Honor, the board is looking at the language of the handbook and looking at the handbook language. [00:17:29] Speaker 01: The waiver doctrine, according to Prevena and all the other cases say that the clear, non-mistakable waiver doctrine [00:17:43] Speaker 01: This case presents us with the opportunity to explain and reaffirm our adherence to one of the oldest and most familiar aboard doctrines, the clear and unspeakable waiver standard in determining whether an employer has the right to make unilateral changes in terms and conditions during the life of a collective bargaining group. [00:18:01] Speaker 01: Collective bargaining agreement here. [00:18:03] Speaker 01: Everybody agrees on that. [00:18:04] Speaker 01: Right. [00:18:05] Speaker 01: Correct. [00:18:05] Speaker 01: And so there was nothing for the union to waive or not wait. [00:18:08] Speaker 01: It's stuck with the initial whatever the initial conditions are. [00:18:12] Speaker 01: That's correct. [00:18:13] Speaker 01: So the notion of calling this waiver. [00:18:17] Speaker 01: It doesn't make any sense to me. [00:18:20] Speaker 03: I understand it is it is something that the administrative logic had looked at and in the context of the exceptions began the exceptions were focused simply that this is a contract coverage case. [00:18:32] Speaker 03: And so the board did not go after. [00:18:35] Speaker 03: reasonably explaining why it did not believe the contract coverage standards should apply here, then did it call the judge and whether the board could have commented more about the application? [00:18:46] Speaker 02: I guess I'm somewhat clear what the board was doing. [00:18:51] Speaker 02: If this handbook was explicit [00:18:55] Speaker 02: About every effect, both about layoffs and every effect. [00:19:00] Speaker 02: It was explicit, laid out right there on the face of it. [00:19:04] Speaker 02: So it would meet clear and explicit language tests. [00:19:10] Speaker 02: but there wouldn't be any waiver by the union. [00:19:14] Speaker 02: So would, is the board saying in that case, our clear and explicit waiver test would be met or that it still wouldn't be met because while it is clear and explicit, it's not a waiver? [00:19:27] Speaker 03: I think in that particular situation, the board would be looking at the language and whether the language was sufficient enough to cover effects bargaining. [00:19:36] Speaker 03: There's a statutory obligation to engage in effective bargaining. [00:19:40] Speaker 03: And if an employer in the initial terms and conditions of employment had stated, these are layoff procedures, there will be no [00:19:50] Speaker 03: There will be no impact of effects. [00:19:55] Speaker 03: There will not be any severance pay. [00:19:56] Speaker 03: There will not be any recall rates. [00:19:59] Speaker 03: Well, that's essentially writing effects bargaining out of the initial terms and conditions of employment. [00:20:06] Speaker 03: And that would be... Oh, wait. [00:20:08] Speaker 02: So is this a sort of a new addendum to the Burns case? [00:20:11] Speaker 02: And so, yes, you employer, you can set it. [00:20:14] Speaker 02: but you have to be clear and explicit about every term you're signing and anything that's not clear and explicit, then you have to negotiate over it. [00:20:26] Speaker 03: Your Honor, there are potential lines to be drawn in this case, but this is not such a case. [00:20:33] Speaker 03: And first of all, if I could also back up for a minute, to the extent that [00:20:36] Speaker 03: Tremont is making this into a successor case or suggesting that this is essentially reaching new grounds. [00:20:45] Speaker 03: The argument about successorship from Tremont has kind of morphed over time. [00:20:51] Speaker 03: Initially before the board, and again I don't mean to be repetitive, it was contract coverage, contract coverage, contract coverage. [00:20:57] Speaker 03: although noting that it was a successor. [00:21:00] Speaker 03: In its opening brief, Tremont noted that, as a successor, it gets to set the initial terms and conditions, which, of course, the Board doesn't dispute. [00:21:08] Speaker 03: And it's really only in the reply brief that it seems to be fleshing out this concept that there's somehow a difference between a successor situation getting to set the initial terms and conditions and a newly certified... Well, I'm just responding to the Board's decision, which applied this thing called clear and explicit waiver. [00:21:25] Speaker 02: both clearing explicit and waiver and then but never explained who was doing the waving or who had to do the waving and if I thought your answer to me was well what they really meant was just [00:21:41] Speaker 02: burn successors have to be clear and explicit in their initial terms, and if they are, they'll be fine. [00:21:48] Speaker 02: Won't have to bargain. [00:21:49] Speaker 02: So I don't know if you can put this off on them. [00:21:51] Speaker 02: I'm trying to understand what the point is. [00:21:52] Speaker 03: In essence, it's correct. [00:21:54] Speaker 03: In looking at the handbook here, the initial terms, the board, just as it's looking at any other handbook or policy manual, is looking at the language of [00:22:05] Speaker 01: Aren't you saying that this is not collectively bargained and therefore contract coverage doesn't apply? [00:22:14] Speaker 01: We're outside the range of a contract. [00:22:16] Speaker 01: So all what you're doing, just to pick up on what Judge Millett's saying, I think, is that you're interpreting the National Labor Relations Act. [00:22:24] Speaker 01: And here we do have to defer, unlike in the contract circumstance. [00:22:28] Speaker 01: And the board is saying that we are going to, because we think it will enhance labor peace, enhance collective bargaining, we are going to have a clear and explicit requirement with respect to initial terms and conditions. [00:22:42] Speaker 01: And if you want to cover effects, you have to say so. [00:22:45] Speaker 01: Is that correct? [00:22:45] Speaker 01: That would be correct, Your Honor. [00:22:47] Speaker 01: Why don't they say that? [00:22:48] Speaker 01: I mean, I think that would be an argument we would have before us [00:22:52] Speaker 01: Both sides would have a chance to argue it, but that is not what they said. [00:22:55] Speaker 01: What they said was waiver, which I can't fit neither of us. [00:22:59] Speaker 01: None of us can figure out what waiver is. [00:23:00] Speaker 03: I understand, Your Honor, and again, a lot of this, if one goes back to the exceptions before the Board and the argument made before the Board by Tremont, [00:23:07] Speaker 04: It was trying to place is solely in the context of a contract That's what you said when you first stood up you said petitioner Challenges the contract coverage. [00:23:20] Speaker 04: That's it. [00:23:21] Speaker 04: And so if we agree, let's assume we agree with you With the board that this is not a contract coverage case because there's no contract then and let's assume all three of us are [00:23:35] Speaker 04: have doubts about the waiver analysis, how can we deny the petition if we think the waiver analysis was part of the board's reasoning here? [00:23:46] Speaker 04: Well, Your Honor, again, to the extent that... In other words, if we agree with you that the contract coverage standard doesn't apply, how does that get us to denying the petition without more? [00:24:01] Speaker 04: How do we do that? [00:24:03] Speaker 03: Well, two points, Your Honor. [00:24:05] Speaker 03: First, the finding from the administrative law judge, appellate by the board, was that there was no notice and opportunity to bargain, that at the time the union was essentially presented with a fait accompli, and there's no serious dispute. [00:24:16] Speaker 03: So the only exception to that is whether the [00:24:22] Speaker 03: terms that were set forth in the employee handbook allows the employer to essentially avoid any obligation of working over the effects. [00:24:30] Speaker 04: But the board's reasoning in its decision is that, well, there's no clear, there's no waiver. [00:24:36] Speaker 04: That's what the board said. [00:24:37] Speaker 03: And it was in response to the argument, you know, the response that the employer made to the obligation that it essentially presented a fait accompli or gave timely notice was essentially we didn't have to give timely notice because this handbook is a contract and it falls into contract coverage, period. [00:24:58] Speaker 01: That's not, so I'm reading the motion of the National Labor Relations Board requesting remand of the case to the board, which is a J369, and it says, [00:25:08] Speaker 01: The board expressly did not decide the issue. [00:25:12] Speaker 01: In finding that there had been no challenge to the standard, the board overlooked that the company argued to the board that the question of waiver normally does not come into play with respect to subjects already addressed by terms and conditions governing employment. [00:25:26] Speaker 01: Instead, the proper inquiry is whether it's covered. [00:25:30] Speaker 01: But if you say the proper inquiry isn't whether it's covered, [00:25:34] Speaker 01: It doesn't resolve the question of the fact that waiver normally doesn't come into play with respect to subjects already addressed in terms of conditions. [00:25:42] Speaker 01: It seems you still have to give a reason. [00:25:44] Speaker 01: They're arguing you have to have a reason why waiver applies. [00:25:47] Speaker 01: They propose contract coverage, but you don't give a reason. [00:25:51] Speaker 01: You explain why that doesn't apply, but you don't explain the reason for why waiver applies. [00:25:59] Speaker 01: Your honor, I understand the court's concern, but... If he wanted to remand, how would he reward a remand on this subject for an explanation? [00:26:16] Speaker 03: The... [00:26:19] Speaker 03: For the remand, as far as explaining that there's factual waiver taking place by the union, I think that there's so- Or to come up with some other theory, like the Interpretation of Natural Labor Relations Act theory, yeah. [00:26:34] Speaker 03: But the board is acting consistently with successorship principles here and the very basic principles that there's an obligation to have effects bargaining, which is something that was discussed in the Administrative Law Judge's decision to the best of my knowledge. [00:26:49] Speaker 03: And there's no inconsistency with that here that an employer has an obligation to bargain over the effects. [00:26:55] Speaker 03: Again, there can be a lot of lines drawn. [00:26:57] Speaker 01: Not if effects is included within the initial terms, right? [00:27:00] Speaker 03: Correct. [00:27:01] Speaker 03: But this is not the situation, and I see that my time is up if I can. [00:27:05] Speaker 03: There are a lot of lines, and I understand that there are a lot of hypotheticals that could be passed in a type of case like this. [00:27:12] Speaker 03: If this was a case like Monterey where, for example, the employer said that there will be from one to three weeks of severance pay depending on some particular factors, and it ended up giving two weeks severance pay, then there would be an issue of, well, did this fall within the general range of what the employer could do in setting the initial terms and conditions of employment? [00:27:32] Speaker 03: This is a situation where the employer did not include any effects of its layoffs. [00:27:41] Speaker 03: Its tantamount to simply writing effects bargaining out of the statute. [00:27:45] Speaker 01: Let me ask you about those two things. [00:27:47] Speaker 01: One thing I raised with the other side. [00:27:50] Speaker 01: pay is the effect you mentioned in your brief. [00:27:54] Speaker 01: Why doesn't this cover severance pay? [00:27:56] Speaker 01: It says any severance pay is at company discretion. [00:28:00] Speaker 03: Your Honor, and again, the company did not rely on that in its brief to this Court, because it's one thing to affirmatively set forth an initial term and condition. [00:28:11] Speaker 03: It's another thing to essentially take something that there's a statutory obligation to bargain over and essentially you write that out of the initial terms. [00:28:20] Speaker 01: Imagine it said, and we will not bargain with you about effects because we're not going to give any benefits to effects. [00:28:28] Speaker 01: Do you think that would be unlawful? [00:28:30] Speaker 01: Yes, Your Honor. [00:28:30] Speaker 01: What if it said effects? [00:28:33] Speaker 01: the employee will not be entitled to any effects as a consequence of the layoff. [00:28:40] Speaker 01: Could they not set that as an initial term? [00:28:42] Speaker 03: And at the time these were being set, the union is not in the picture yet. [00:28:49] Speaker 03: And whether it's a newly certified union or a successor situation, you're into that. [00:28:53] Speaker 03: But once a union comes and a successor, once the employer hires a representative compliment and the union comes into play, [00:29:01] Speaker 03: It's true. [00:29:03] Speaker 03: An employer may not be actually changing its terms and conditions, but I would suggest that an employer, as part of those initial terms and conditions, once the union comes into play, can't claim, well, we're not going to bargain over effects because we said so. [00:29:18] Speaker 01: No, of course not bargain in the context of a collective bargaining agreement. [00:29:22] Speaker 01: But short of that, until such an agreement is resolved and we have a new set of terms and conditions, [00:29:27] Speaker 01: If they say we will not give you anything for the effects, doesn't that hold? [00:29:32] Speaker 01: Isn't that like saying we're going to lay you off and we're not going to bargain and therefore we don't have to bargain about whether we're going to lay you off? [00:29:41] Speaker 03: It's not the same, Your Honor, because there's a statutory requirement to bargain over the effects of the decision. [00:29:49] Speaker 01: There's a statutory requirement to bargain over terms and conditions. [00:29:53] Speaker 03: And in that situation, if an employer is setting forth those actual initial terms and setting forth the layoff procedure and setting forth enough specificity that there's no violation over an obligation to bargain, [00:30:10] Speaker 03: That's one thing, but it's another something wholly separate to assert or for an employer to assert that it's not going to bargain over effects because we say so. [00:30:21] Speaker 01: That bargain, let me be clear again. [00:30:23] Speaker 01: You agree and the board held [00:30:26] Speaker 01: that they can do layoffs without any bargaining, right? [00:30:30] Speaker 03: Well, it wasn't the board. [00:30:31] Speaker 03: It was a decision made by the board's general counsel. [00:30:33] Speaker 01: We don't dispute that. [00:30:34] Speaker 01: And the board didn't dispute that. [00:30:36] Speaker 01: The only thing the board came up with was on the effect side, correct? [00:30:39] Speaker 03: Correct. [00:30:39] Speaker 03: Well, the board, once the case, once the complaint gets dismissed, the issue isn't before the board. [00:30:45] Speaker 03: Let me just ask you as a matter of labor law then. [00:30:46] Speaker 01: Yes. [00:30:47] Speaker 01: The initial terms and conditions include we can lay you off for any reason at any time, OK? [00:30:56] Speaker 01: Can they lay off for any reason at any time, or do they have to bargain about that? [00:31:01] Speaker 03: Your Honor, for the initial terms and conditions, if something is so broad that is essentially giving the employer complete leeway to do anything it wants, and there's a union on the scene, I would suggest that no, an employer that the board would very likely have an issue with that. [00:31:18] Speaker 03: Well, then why didn't the board have an issue with that? [00:31:20] Speaker 01: Why wasn't the layoffs also a problem? [00:31:24] Speaker 03: And I can't speak for the board's general counsel when it was investigating the complaint, but it did view that the layoff procedures were setting forth enough specificity and that there might have been a little bit of leeway that Tremont had within that layoff procedure, but there was a very specific layoff procedure that was set forth in the handbook and the board's general counsel did find that Tremont followed that procedure. [00:31:48] Speaker 01: I have to say now you're arguing something that [00:31:52] Speaker 01: If this is the board's real intention, then we really have to remand it and hear this because I was under the impression that the board agreed that things that were in the initial terms and conditions, as a result of burns, the employer could do until there was another collective bargaining agreement that set new ones. [00:32:14] Speaker 01: You are telling me something different. [00:32:16] Speaker 01: And if that's the board's view, I don't read that in the board's opinion. [00:32:21] Speaker 01: So if the board really thinks that, then that's an argument. [00:32:26] Speaker 01: It's a new argument. [00:32:28] Speaker 01: It's not one I've ever heard before. [00:32:31] Speaker 01: But the board's certainly entitled to present it. [00:32:35] Speaker 01: So in Pravina. [00:32:36] Speaker 01: The board says that when they had initial terms that set pay bands, the employer could set the actual pay, right? [00:32:46] Speaker 03: In the Monterey case, that's correct, Your Honor. [00:32:48] Speaker 01: Was it Monterey? [00:32:49] Speaker 01: Yeah. [00:32:51] Speaker 01: Yeah, Monterey, I'm sorry. [00:32:52] Speaker 01: And that was initial terms and conditions, right? [00:32:54] Speaker 01: Correct. [00:32:54] Speaker 01: And that was in a successor situation. [00:32:56] Speaker 01: That's right. [00:32:56] Speaker 01: And so you wouldn't say they couldn't do that without bargaining over that, even though pay is obviously a mandatory subject of bargaining. [00:33:04] Speaker 03: Correct. [00:33:04] Speaker 03: Because the board found that there was a sufficient initial term and condition. [00:33:11] Speaker 03: There might have been a little flexibility as to the particular pay. [00:33:14] Speaker 01: So imagine the initial terms and condition says, we will set the pay, period. [00:33:19] Speaker 01: then that would definitely be okay, right? [00:33:21] Speaker 01: And no bargaining about that. [00:33:24] Speaker 03: No, Your Honor, when a successor, when a successor, as a successor employer, if the employer wants to change the terms and conditions from the predecessor, from the predecessor, the employer has to announce the intent that it's going to change terms and conditions, [00:33:43] Speaker 03: And it has to inform the employees of what those new terms and conditions are going to be. [00:33:50] Speaker 03: And there can sometimes be issues that have to be done before hiring. [00:33:55] Speaker 03: I'm assuming it's before hiring. [00:33:58] Speaker 03: Generally before, there can be a few. [00:34:00] Speaker 01: So in Monterey, it was okay for them to say, we're going to set the pay band, right? [00:34:06] Speaker 01: And there and we're going to set the pay. [00:34:09] Speaker 03: Correct, but it was within a very defined pay band for new employees. [00:34:14] Speaker 03: And so the board did find that that was okay. [00:34:17] Speaker 03: That's very, that's different than simply, I'm sorry, I don't. [00:34:21] Speaker 01: So I am confused. [00:34:23] Speaker 01: So imagine in this case, they said, for new employees, we can lay you off for any reason. [00:34:34] Speaker 01: and we will not give you any benefits as a consequence of laying off. [00:34:38] Speaker 01: That's what the handbook says, those words. [00:34:41] Speaker 01: Is that not enough to allow them to do that without having to bargain over it? [00:34:46] Speaker 01: They can bargain over it for another collective bargaining agreement, but until there is another collective bargaining agreement, can't they do that? [00:34:52] Speaker 03: Because, Your Honor, once the union comes onto the scene, there are certain statutory bargaining requirements, and to simply have an outright refusal [00:35:03] Speaker 03: that the employer isn't going to do something is very different than saying affirmatively, here's what our terms and conditions, here are our actual policies, here's what we're going to. [00:35:12] Speaker 04: How can the board, I'm just repeating what Judge Garland said, how can the board, how can the company then have adopted the language in the handbook? [00:35:21] Speaker 04: It's there now. [00:35:22] Speaker 04: I just, I'm as bewildered as Chief Judge Garland. [00:35:27] Speaker 04: I didn't understand that this was your position. [00:35:30] Speaker 04: I'm sorry, Your Honor, I'm not... Sorry, I mean, based on what you said, I don't understand how the provision in the handbook about layoffs is lawful. [00:35:40] Speaker 03: With respect to layoffs, Your Honor? [00:35:41] Speaker 04: Yeah. [00:35:43] Speaker 04: It reserves the right to layoff employees. [00:35:45] Speaker 03: It's reserving the right and setting forth a very specific procedure as to how those layoffs will take place. [00:35:53] Speaker 04: Yeah. [00:35:54] Speaker 03: And that's the term and condition that the board's general counsel in investigating the case. [00:35:59] Speaker 04: But that wasn't bargained with the union. [00:36:00] Speaker 04: They just announced it in their handbook. [00:36:04] Speaker 03: Correct. [00:36:04] Speaker 03: Because as a successor, it has the right to set initial terms and conditions. [00:36:11] Speaker 01: And the union wasn't allowed to bargain over those layoffs, right? [00:36:15] Speaker 01: The union couldn't say the refusal to bargain over those layoffs. [00:36:19] Speaker 01: is not for labor practice. [00:36:21] Speaker 03: The board's general counsel investigated the charge over the refusal to bargain over the layoffs and found no merit to it. [00:36:27] Speaker 03: The board obviously did not address the issue. [00:36:30] Speaker 01: Do you think the law, they were wrong then? [00:36:31] Speaker 01: Do you think the general counsel was wrong on the law? [00:36:33] Speaker 01: Is that what you're saying? [00:36:34] Speaker 03: No, Your Honor, I can't answer the general counsel. [00:36:35] Speaker 03: I'm just saying that it doesn't represent the board's position. [00:36:39] Speaker 03: It's just simply not. [00:36:39] Speaker 01: Now you're taking a position that the board did not state. [00:36:44] Speaker 03: I'm not suggesting that the board would have found a violation to have the case eventually gone to the board. [00:36:48] Speaker 03: I'm just suggesting that there is a difference between externally setting forth a layoff procedure versus with effects bargaining, an employer simply stating it's not going to engage in effects bargaining. [00:37:02] Speaker 03: There's a statutory... Not engage in effects bargaining. [00:37:04] Speaker 01: We're not going to give you any effects. [00:37:07] Speaker ?: Right. [00:37:07] Speaker 01: You're on your own. [00:37:09] Speaker 01: You're on your own. [00:37:11] Speaker 01: If we want to lay you off, we will. [00:37:13] Speaker 01: I'm not saying this is good practice, and we're not going to give you any benefits during the time. [00:37:18] Speaker 01: We're not going to give you severance, which is what they said, and we're not going to give you anything else. [00:37:23] Speaker 01: You're saying they can't do that. [00:37:25] Speaker 03: Your Honor, I would only suggest that there could very well be a difference between affirmatively setting forth a specific policy or procedure and essentially writing affects bargaining out of any obligation that it might have with the union once the union comes onto the scene. [00:37:47] Speaker 02: What you're saying, I think, sounds like what's required to qualify as an initial term and effect under burns, and that is that it has to have some detail and structure to ensure it's not completely [00:38:07] Speaker 02: arbitrarily done by an employer? [00:38:10] Speaker 02: Is that what we're talking about here? [00:38:12] Speaker 03: Arguably, but again, I don't mean to get awry here that this is not something that the court does need to reach, but the violation here is whether there is, that there is no proper notice given to the union and there's no serious dispute that this was essentially a fait accompli [00:38:27] Speaker 03: with the union only receiving specific details several weeks later and the employer trying to defend its action. [00:38:34] Speaker 02: We all get to that question about notice by first having to decide whether effects are already addressed in this document and that's where I think we're getting [00:38:43] Speaker 02: confused because of this handbook already addresses effects. [00:38:47] Speaker 02: It only talks about severance. [00:38:48] Speaker 02: It talks about unemployment compensation. [00:38:50] Speaker 02: It talks about letters of recommendation. [00:38:52] Speaker 02: It talks about you're not entitled to notice. [00:38:55] Speaker 02: Is that real employment? [00:38:56] Speaker 02: You have no guarantee you'll be working tomorrow. [00:38:58] Speaker 02: All those things are in there and sound at least at some level like some effects being addressed but maybe not recall and other things. [00:39:06] Speaker 02: And so what we're trying to figure out, I think, is what [00:39:11] Speaker 03: I understand the court's concern and I can only reiterate that the argument that the company raised before the board was that contract coverage should apply and that applying contract coverage, the mere fact that it set forth a layoff procedure means that it doesn't have to bargain over the facts. [00:39:36] Speaker 03: And once the board very reasonably found that contract coverage does not excuse the trademark obligation to bargain and that just because there's a layoff procedure doesn't mean you don't have to bargain over effects under contract coverage. [00:39:54] Speaker 03: that that is sufficient to have the board's decision enforced in light of what Tremont actually argued to the board. [00:40:00] Speaker 03: It is never disputed that if a waiver analysis is applied that there was, that the board erred by finding that there was no waiver here. [00:40:10] Speaker ?: Okay. [00:40:10] Speaker 01: Questions? [00:40:11] Speaker 01: Okay. [00:40:11] Speaker 01: Thank you. [00:40:11] Speaker 01: Thank you, Your Honor. [00:40:12] Speaker 01: Any time left? [00:40:14] Speaker 01: We'll give you another two minutes. [00:40:17] Speaker 01: If you want it, you don't have to. [00:40:19] Speaker 00: I guess I just want to address one one issue and that's a confusion I guess I have been listening to the the board's argument here in that there's some there seems to be some sort of distinction between what the board decided in this case and what the board is arguing before this court and want to direct your honors attention to pages 16 and 17 of the the board's brief in this case says before this court there is no dispute as the board found [00:40:48] Speaker 00: that Tremont is a burned successor, that it lawfully, unilaterally established the initial terms and conditions of employment, [00:40:55] Speaker 00: and that its decision to lay off the 12-unit employees was not subject to bargaining. [00:41:02] Speaker 00: So I don't understand the distinction that's trying to be made here. [00:41:06] Speaker 00: I think the Board in its brief is basically affirming what the Board's decision was in this particular case. [00:41:15] Speaker 00: With respect to that, the language itself, and there's been some dispute about the specificity that's necessary for the contract language, [00:41:24] Speaker 00: to determine whether or not there's an obligation to bargain over the decision. [00:41:28] Speaker 00: And in this case, I don't think that there could be any clearer language with respect to the decision. [00:41:35] Speaker 00: It says, from time to time, management may decide to implement a reduction in force. [00:41:40] Speaker 00: Again, this is taken from the case that the word implement is utilized in a case that appeared before this circuit, SNF market street health care. [00:41:51] Speaker 01: There's an argument you made in the brief. [00:41:52] Speaker 01: Let me just ask, why didn't you reference the at-will provision that Judge Mullatt mentioned? [00:41:58] Speaker 01: Why? [00:41:59] Speaker 01: It says you can get rid of anybody at any time for any reason without notice. [00:42:05] Speaker 01: That seems a little bit even stronger than the layoff argument. [00:42:09] Speaker 01: Yeah. [00:42:10] Speaker 01: Why is that not part of your claim that this is pretty specific? [00:42:14] Speaker 00: Because, again, I think there was a distinction. [00:42:16] Speaker 00: The employee handbook was to address the employees that were party to the bargaining unit as well as the employees that were non-bargaining unit employees as well. [00:42:27] Speaker 00: And the concern with respect to that was that we wanted to address the at-will status of the non-bargaining unit employees, recognizing that, again, we set the initial terms and conditions. [00:42:38] Speaker 00: And the employees who were part of the bargaining unit had a different standard. [00:42:43] Speaker 01: So before you have a collective bargaining agreement, you would agree that you didn't have the right to drop people at will, even before there is a collective bargaining agreement? [00:42:53] Speaker 00: No, if there's no collective bargaining agreement, they would be employed out well. [00:42:58] Speaker 01: But that part of the handbook, is that part of the handbook only aimed at, does it say? [00:43:03] Speaker 01: This is what I didn't understand. [00:43:05] Speaker 00: No. [00:43:05] Speaker 00: Is it only aimed at people who want it? [00:43:06] Speaker 00: No, it doesn't make that distinction, Your Honor. [00:43:08] Speaker 01: That's what it meant. [00:43:09] Speaker 01: I got it. [00:43:09] Speaker 01: No, that explains that. [00:43:12] Speaker 01: Are there questions? [00:43:13] Speaker 01: No. [00:43:13] Speaker 01: All right. [00:43:13] Speaker 01: Thank you. [00:43:14] Speaker 01: We'll take the matter under submission. [00:43:15] Speaker 00: Thank you, Your Honor.