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Case number 20-1009 Ed Al, American Security Programs, Inc.

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Petitioner versus National Labor Relations Board.

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Mr. Dowd for the petitioner, Mr. Hickson for the respondent.

[00:00:13] Speaker 01:
Mr. Dowd, good morning.

[00:00:15] Speaker 01:
Please proceed.

[00:00:16] Speaker 04:
Good morning.

[00:00:17] Speaker 04:
May it please the court.

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My name is Tom Dowd, and I represent Petitioner American Security Programs, Inc., who I'm going to refer to hereafter as ASP.

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ASP has petitioned this court to review a decision and an order

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was issued by the National Labor Relations Board.

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The board's decision held that ASP violated the National Labor Relations Act by implementing its final offer in the absence of a valid impasse in bargaining.

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ASP contends that this finding is not supported by substantial evidence on the record.

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ASP also contends that the board has failed to act in a manner that is consistent with its own precedent decisions on certain important points of law, particularly regarding lawful bargaining tactics.

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ASP is a federal contractor and that status as a federal contractor is what really distinguishes the present case from the many refusal to bargain cases that I know this court routinely sees and reviews.

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Those cases generally involve situations where an employer has been accused of trying to avoid reaching an agreement or where the employer is trying to keep the wage rates as low as he can in order to generate greater profit for operating its business.

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As a federal contractor,

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ASP wants to get collective bargaining agreements in place and all the steps that it was taking in connection with this case were lawful steps designed to put pressure on the union to reach a contract, not to either avoid a contract or keep the cost of the contract down.

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Because whatever wage rates are agreed to, as long as they are approved by the federal government, ASP passes them through.

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The challenge for ASP is trying to keep those rates at ones that will be approved, because if they're not approved, ASP is contractually obligated to pay the rates, even if it doesn't get approval from the government to reimburse those rates.

[00:02:08] Speaker 02:
Council, I understand all of that, but my understanding of the record is that that point was really not a matter of any significant discussion during negotiations.

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Indeed, you hid some information and I'm not questioning your integrity or your client's integrity.

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I'm not doubting or suggesting they should have done otherwise one way or the other, but you hid some information with regard to renewal of the contract.

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You certainly didn't make the union aware of it.

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So the point you're making now was really not in play.

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You were not saying, look, here's the posture you're in as a federal contractor and there's some urgency because of that.

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Quite the contrary.

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Well, I would disagree that they didn't, I was not involved in negotiations.

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I'm not, I'm not blaming anybody.

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I'm just my point.

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I appreciate that.

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But I would disagree with, with two characterizations.

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Number one, they absolutely made it clear throughout the negotiation process, according to the record that there were these dates that are going to be coming up and they needed to have contracts in place by those dates.

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Because if a date runs by like a here, we had a date of, um,

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December 1, where a contract was going into place.

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And the Federal Protective Service needs 10 days in advance of that date to get the contract.

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Because if you miss the date and you enter into a contract a week, two weeks, one month, two months after

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It that you're fine.

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You've got your contract.

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You know, reimburse under it until the end of that year.

[00:03:45] Speaker 02:
I totally understand that.

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But I must say it was certainly not a highlighted point.

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And if all of this was so important, why did they hide the information about about the renewal when it happened?

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Well, two things is I think you'll find that their communications did consistently keep telling the union, look, these dates are coming up.

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And we are going to go down if we don't know what you're talking about.

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And we may be reading the record a little bit differently, but still why hide the information?

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If this is also terribly important, why did they hide that information?

[00:04:15] Speaker 04:
I think the only information that they can actually be characterized as hiding is the fact that they're not revealing the extension agreement extension agreement, which I, if you hide something, it's as if you have an obligation to agreement.

[00:04:30] Speaker 02:
No, I'm not.

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That's why I don't want you to go down that path.

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I'm not accusing you and saying whether you were obliged or not obliged.

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I did lots of labor negotiations.

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I'm not suggesting you were obliged as a matter of law, but it is curious that you would make your opening argument when you're sitting on a record in which your client did not reveal information about the point you start out with.

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That is the posture of the relationship between your client and the federal government.

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It was hidden.

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It was hidden.

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I'm not saying someone intentionally meant it was hidden.

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I don't dispute that they did not proactively disclose, right?

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This information.

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All right.

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So I don't understand what's important as an important point just isn't weighty to me then given that, given that point.

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And then I'll tell you the other thing, just so you understand, you got to understand this is a case in which the board is owed great deference.

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So you got that one problem.

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that I look at.

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The other problem is when you're wondering whether or not an impasse is reached late in the ball game, at a point you're now saying, we're getting really too close, the employer changed the offer that was on the table.

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Well, let me address both points because I don't want to walk away from the first one because I do think it's important as to whether they declined to provide this information.

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No, they just didn't.

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don't know.

[00:06:00] Speaker 02:
Okay, they just did not.

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Okay.

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But my point is, they don't have a legal obligation.

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Totally agree.

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And it is extremely important that they don't have that legal obligation.

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It was what they determined and right, right or wrong.

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They determined that they believe they could better get an agreement by not

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disclosing to the union that there was another six months or four months after the December 1st date.

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I totally get it.

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And the problem is I don't understand your opening argument.

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You put it right in that category.

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But in any event, we're going past each other now.

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Your opening argument raised something that caused me to think about what had been withheld.

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So your opening argument made no sense to me.

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The other thing is late in the ball game,

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As you're getting to a point where the employer would want to claim an impasse, the employer switches the bargain or the offered bargain.

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Importantly.

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Yeah, I think what's important there with respect to that separate issue is that there's a distinction between the manner in which a proposal is implemented and the more preliminary question of whether an impasse has existed at the time of this

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offer being implemented.

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So I think we've met our burden of proof with respect to the fact that there was an actual impasse.

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I mean, the union made a series of wage proposals that always went up and ended at a proposal that was 58% above the over three-year contract over an amount that the FPS was not going to approve.

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And so you have to make sure you get, get to these things.

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And so he's trying to press.

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They were consistently asking for mediation, but all right.

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So I have that whole picture in my head.

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All right, go ahead.

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And now what's the next point?

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I'm not sure how you're having established that there's the impasse.

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There is a question.

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Oh, no, I'm not buying that.

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There isn't, there's a question as to whether there's an impasse.

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Of course you can't say there's an impasse.

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The parties were still negotiating and then the employer switched the bargain or proposed bargain very late in the game.

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But the parties had definitely reached an impasse on the evidence in the record that on wages that they weren't going, the union was not going to drop down unless the party company agreed to mediate and it had no legal obligation to mediate.

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That I don't think there's any dispute about as a matter of law.

[00:08:28] Speaker 02:
No, no, there's no legal.

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That's absolutely true.

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But what we're trying to figure out is what were the parties thinking as they were doing all of these things?

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The union was not suggesting we're done.

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if they are saying, we'd like to have a third party come in and assist us in these negotiations.

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The company doesn't appear to be saying it's done.

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If very late in the ball game, they're coming in and saying, oh, incidentally, you know, what we have been proposing is change.

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We want to take some things off the table.

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That would be for me clear evidence.

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There is no impasse because now the union has to think about that.

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But I would respectfully.

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I would respectfully disagree with the idea that the union was saying that they had flexibility and room to move.

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The only way they were going to move was if we agreed to mediate.

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And since there was no legal obligation to mediate, they weren't going to move.

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They characterized it as a stalemate.

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They characterized it as an impasse.

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And I realize that doesn't necessarily mean that they legally are saying it is, that they have the knowledge of it.

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But it certainly shows how they thought and what they believed.

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They were not going to make any additional move.

[00:09:34] Speaker 02:
Well, you're not, you're not, I hear your answers, but you're avoiding the question that I'm raising.

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I don't know how you can say the employer thought he was at impasse.

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The employer came in with a new bargain.

[00:09:45] Speaker 04:
Well, all that happened.

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I hear what you're saying.

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The, the, but ASP, obviously the, the template that they used to give the union, the final offer was wrong.

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And they have said, so there's no issue about that.

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But it is not a case that ASP went up to the union and say, hey, listen, we plan to roll back all the things we've already agreed to, and we want to have a whole new set of things.

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They simply made a mistake in the manner in which it was being put forward.

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They never stated that they intended to roll it back.

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The union never raised any concerns contemporaneously about the alleged omissions of these non-economic items.

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The union said specifically, we're upset that you haven't agreed to our proposal on wages.

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There's no substantial evidence that they actually changed the terms and didn't put into effect the non-economic items.

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The board's decision doesn't spend a whole lot of substantial time discussing that issue because it has to do more with how you implement.

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I suppose that the board's order could be adjusted to say that, yes, you lawfully implemented the wage portions, but there were certain aspects of the non-economic proposals that you failed to put in properly.

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because the way you did it and you were I think what the boards as I'm reading the board's decision they're simply looking to try and understand the party's positions at the moment the employer said you all read impasse one of the facts they point to is the employer came in first of all there weren't that many sessions they say and then they also said and the employer very late in the game came in and changed the proposed bargain both that's all information the board is weighing with respect to substantial evidence question

[00:11:27] Speaker 02:
So that's, okay, I hear you.

[00:11:29] Speaker 04:
I see my time on direct is expired.

[00:11:32] Speaker 01:
Mike Katz has a question.

[00:11:34] Speaker 03:
Yeah, let me ask you a couple of questions.

[00:11:35] Speaker 03:
I think you have a lot of facts in your favor, and I'm not terribly moved by the rationale about emailing and decelerating, but let me focus on what I think are some tough facts for you.

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So one is,

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Judge Edwards talked about the deadlines.

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As I read the record, it's actually a little bit worse for you to the extent that at one point your client seemed to affirmatively misstate to the union the situation about the deadlines by saying that the government

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would require wages to go down to prevailing level as of December 1st, unless you had a new collective bargaining agreement in place.

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And that's false in two respects.

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One, this wasn't coming from the government and two, in any event, they had the extension at least through March.

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Why isn't that?

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at least a pretty significant fact tending to show some degree of bad faith.

[00:12:55] Speaker 04:
Two reasons.

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I mean, one, I think it's an inartful statement to say FPS has reiterated the need for, because I think it's accurate to FPS had not reiterated.

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It was really the company that was reiterating it.

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But the real point is that if you're right, that that statement was factually incorrect.

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That is no different than what happens routinely in the bargaining process.

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If a company says, look, we're not willing to include a signing bonus to ensure ratification of this agreement.

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And then the company ultimately does agree to that signing bonus.

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They may have made the statement they weren't willing to at a time when they were in fact willing to.

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And it's not true.

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Similarly, a company could say, we are offering you better wages than what our competitors pay.

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And if you say that at the bargaining table,

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It may be wrong, but the union has the obligation to show that that's a wrong statement.

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I understand the general point if you say, this is my last best offer, and it turns out, guess what, it really wasn't.

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But when you say, here is a constraint imposed on us by the government, and it really wasn't imposed by the government, that seems a little bit different.

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We're talking about a process rule here where there's an obligation of good faith and you don't have to reach a result, but you do have to be fair to the other side in the process.

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Well, remember that the constraint that you're talking about is really the contract starting December 1st and the opportunity that ASP had

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to pay for a few more months at the higher rates.

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But even if in February or January, before that extension expired, we had agreed to a contract with the union for particular rates.

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As soon as it got to be March 30th, everything was dropping to wage determination period.

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So I don't know if it was really that inaccurate.

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It just was inartful.

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I really do believe that.

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But thank you.

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I will stop right now.

[00:15:11] Speaker 03:
Another idea that runs through the concept of good faith is you don't necessarily have to take a particular position, but you have to have reasons for the positions that you take and you have to communicate those to the other side.

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Mediation,

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you're not legally obligated to mediate, but you never even responded to four approaches on that score.

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And with regard to the off the core economic bargaining, it seems like the union had some decent rationales for their positions.

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They said we hadn't gotten a raise for a long time in the past.

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And we're just asking for what people in other buildings are getting.

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And there's really not much evidence that the company had a reasoned response to those points.

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I think the comparison is when you say that the union had made these requests, there was a, if you were a company and you have a contract with the union and mid contract, your union comes in and says, we want to pay you a dollar more.

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We want you to pay us a dollar more.

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And the company ignores it.

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Now, a good company should say, we don't have an obligation to, and so we're not going to.

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But the company instead just ignores it.

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It's not an unfair labor practice for the company not to respond to that.

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Everything that we're talking about here are law.

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I don't dispute these are hard bargaining tactics, but they're lawful.

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They really are lawful under national law.

[00:17:03] Speaker 02:
Wait a minute, the hypothetical you just gave was middle, you're in the middle of a contract.

[00:17:07] Speaker 02:
That's the hypothetical you're using, not the bargaining for a new contract.

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That's entirely different.

[00:17:12] Speaker 02:
Of course an employer who's in the middle of a contract with, and there's no bargaining to get a new agreement because the time has arrived.

[00:17:22] Speaker 02:
Of course an employer would tell the union to go fly a kite if they came in and said, oh, you know, it would be nice to have a raise, even though the contract doesn't, that's not a good example.

[00:17:31] Speaker 04:
Well, the point I'm trying to make is that you can ignore when you don't have a legal obligation to respond.

[00:17:39] Speaker 02:
Well, you do when you're in the middle of collective bargaining.

[00:17:43] Speaker 02:
That's different as opposed to being in the middle of a contract where there is no duty to bargain.

[00:17:48] Speaker 02:
You are bargaining for a new contract.

[00:17:50] Speaker 02:
You have legal obligations.

[00:17:52] Speaker 02:
It's completely different from when there is no legal obligation to bargain.

[00:17:57] Speaker 04:
I don't think there's any board precedent that asserts that the board precedent instead says that it's a permissive subject to bargaining, not a mandatory subject to bargaining.

[00:18:05] Speaker 04:
And I think that's the difference.

[00:18:07] Speaker 02:
What is a permissive subject of bargaining?

[00:18:10] Speaker 04:
Mediation is a completely permissive subject.

[00:18:13] Speaker 02:
You're misunderstanding our question.

[00:18:15] Speaker 02:
Okay.

[00:18:15] Speaker 02:
I'm not going to pursue it.

[00:18:17] Speaker 02:
You're completely, of course, mediation is not mandatory.

[00:18:21] Speaker 02:
What we're looking for here is, if you look at the board cases, and that's why we give them deference, the board is trying to find out on the record whether there's information indicating that both sides were at an end.

[00:18:35] Speaker 02:
And what the board did here was say, taking the evidence as a whole, we can't reach that conclusion that they had reached an end.

[00:18:43] Speaker 02:
And there was still more to be done.

[00:18:45] Speaker 02:
And my colleague and I have been posing questions that cause us to wonder

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whether the board's right or wrong on that legal inquiry, given certain circumstances here, given you withheld information, given there weren't very many sessions, given that you changed the bargain.

[00:19:06] Speaker 02:
I mean, those are all things the board looks at and says, no, we're not prepared to conclude that more bargaining wasn't necessary before someone could say, we've done, we've done all we can do, and that's it.

[00:19:17] Speaker 02:
And at that point, the employer can say, we're done.

[00:19:21] Speaker 02:
The board said not yet.

[00:19:22] Speaker 04:
My point, and I think this is the last thing I'll say, is that there was unquestionably an impasse on the wages.

[00:19:31] Speaker 04:
There was no break that was going to happen until the company agreed to mediation, which it didn't have an obligation to do.

[00:19:36] Speaker 04:
And what the company was trying to do, as every employer tries to do in these cases when it wants to get a contract, is the company tried to break that impasse.

[00:19:45] Speaker 04:
and the steps that it took to break that impasse, we believe, were lawful steps.

[00:19:51] Speaker 02:
The thing that you politely or interestingly character, I was really curious to how you were going to characterize having done many of these bargains.

[00:20:00] Speaker 02:
The late change in the proposal is huge.

[00:20:03] Speaker 02:
That, for me, ended it when I ran this record.

[00:20:05] Speaker 02:
There could not be an impasse.

[00:20:07] Speaker 02:
If you make a late change in the bargain,

[00:20:11] Speaker 02:
The other side now has reason to believe there's more to talk about.

[00:20:15] Speaker 02:
If you've done it as much as I did it, that is a clear signal to the other side.

[00:20:22] Speaker 02:
I'm coming in with a changed proposal.

[00:20:24] Speaker 02:
That means there are more things to talk about.

[00:20:27] Speaker 02:
You're not close to an impasse at that point.

[00:20:29] Speaker 02:
Now, you characterize it as a mistake and this and that.

[00:20:32] Speaker 02:
I found that very amusing, given my experience.

[00:20:35] Speaker 02:
It's not a mistake.

[00:20:36] Speaker 02:
It's evidence of no impasse.

[00:20:37] Speaker 02:
And that's what the board was looking at.

[00:20:39] Speaker 02:
You changed the proposed deal and you tried to brush it off and you were trying not to smile.

[00:20:45] Speaker 02:
It's a horrible mistake if you're trying to argue for impasse.

[00:20:48] Speaker 02:
You cannot say you're at impasse if you are coming in that late in the game hiding information with respect to what's going on with the feds, whether you have to tell them or not, and you changed the proposal.

[00:21:00] Speaker 02:
You're not at impasse.

[00:21:03] Speaker 04:
My time, my time has expired and I think I have made an effort to address that argument.

[00:21:07] Speaker 04:
I'm prepared to readdress it.

[00:21:10] Speaker 03:
I don't want to take that.

[00:21:11] Speaker 03:
So just one last question on that, that last best and final offer, which changed a bunch of terms.

[00:21:19] Speaker 03:
Were any of those, I thought all of the changes made the offer more favorable to the employer.

[00:21:29] Speaker 02:
They did.

[00:21:32] Speaker 04:
No, I think it was a variety of different provisions, some better, some worse.

[00:21:36] Speaker 04:
It simply was the wrong template to use.

[00:21:38] Speaker 04:
It wasn't the one that the parties have been having.

[00:21:40] Speaker 04:
It was the wrong one to bring forward.

[00:21:43] Speaker 04:
It wasn't an effort.

[00:21:44] Speaker 04:
There was no discussion with the union of, hey, we're putting a whole bunch of new issues out here.

[00:21:49] Speaker 04:
The company obviously thought the only thing they were doing was putting into place wages that were different.

[00:21:54] Speaker 03:
If it's a some better, some worse proposal, I'm with Judge Edwards.

[00:21:59] Speaker 03:
I had thought it was just completely better for the company proposal, which is to me, if that's what it was, then to me, it would be not a sign that the impasse might be thawing, but that you're clearly at impasse and you're starting to play hardball on implementing a post-impasse offer.

[00:22:22] Speaker 01:
That's the way I see the regressive offer that the company made.

[00:22:30] Speaker 04:
I don't think the record indicates that it was an effort to change all those items.

[00:22:36] Speaker 04:
The only thing it was trying to change was the position on wages.

[00:22:39] Speaker 04:
But I understand the point you're making.

[00:22:44] Speaker 01:
All right, if there are no more questions, we'll give you a couple of minutes and reply.

[00:22:47] Speaker 01:
Mr. Hickson.

[00:22:52] Speaker 00:
Good morning, may it please the court, Michael Hickson for the NLRB seeking full enforcement of the board's order.

[00:22:57] Speaker 00:
This court has consistently recognized that the existence of a valid bargaining impasse is an affirmative defense and that the board deserves special deference in determining whether a party has carried its burden of proving that defense.

[00:23:11] Speaker 00:
Here, ample evidence in the record supports the board's determination that the company

[00:23:16] Speaker 00:
simply failed to carry its burden of proving that there was a valid impasse on November 28, 2017.

[00:23:22] Speaker 01:
Mr. Hickson, if I can ask you to follow up on the questions that I think all three of us were asking at the end, and that is this last offer by the company to go back to the even lower wages, why wouldn't that cause the union to say,

[00:23:45] Speaker 01:
If we weren't at impasse before, we sure as heck are now.

[00:23:51] Speaker 00:
Your honor, I think that the board case law is that when a company, when a party makes a last minute dramatic change in its bargaining proposals, that the bargaining process requires more time for the parties to fully explore whether there is a path to an agreement and the company here

[00:24:13] Speaker 00:
at the 11th hour replaced its previously proposed increases to wage and benefits with wage and benefit cuts.

[00:24:21] Speaker 00:
But then on top of that, it introduced a raft of brand new non-economic proposals into the negotiations at the 11th hour.

[00:24:30] Speaker 03:
All of which were better for the company.

[00:24:33] Speaker 00:
I'm, Your Honor, frankly, I'm not positive about that, Your Honor.

[00:24:37] Speaker 00:
I know there are a number of non-economic proposals, you know, gear up and gear down time, paid breaks, temporary employees, full-time employee status, a number of others.

[00:24:49] Speaker 00:
I know that some of them were worse for the union.

[00:24:51] Speaker 00:
I'm frankly not sure, but the point I think, Your Honor, is even if they were all worse for the employees and better for the company,

[00:24:59] Speaker 02:
that that would only underscore the need for further bargaining because yeah they were seeing it just understand the three of issues hearing slightly uh expression of slightly different instincts my instinct as someone who used to do this is if you came in with everything now being reduced i would see a possibility of maybe i can get the wages up now because they're suggesting

[00:25:23] Speaker 02:
if I agree to take away some of those non-economic things, which they've now proposed to take away, I may have a way now to get the wages up.

[00:25:32] Speaker 02:
That's why it's inconceivable to me that there's an impasse.

[00:25:35] Speaker 02:
So I don't see everything bad as being evidence that it must be impasse.

[00:25:43] Speaker 02:
I'm not sure what the board said about this, but I would see that as an opportunity for the union to say, aha, they're giving us an opening

[00:25:51] Speaker 02:
to give back these non-economic matters and maybe we can bump the wages up now.

[00:25:56] Speaker 02:
That's the bargain that we've got to work on now.

[00:25:59] Speaker 00:
Right.

[00:26:00] Speaker 00:
Absolutely.

[00:26:00] Speaker 00:
Judge Edwards, I agree with that perspective.

[00:26:03] Speaker 00:
I mean, the company injects these non-economic, non-economic proposals into the negotiations at the last minute, and then they proceed to unilateral implementation without any meeting with the union, without so much as discussing with the union, these brand new non-economic proposals.

[00:26:21] Speaker 02:
And now if I remember, remind me if I'm right, I think the board was essentially saying that now everything's on the table.

[00:26:28] Speaker 02:
which militates against an impasse finding.

[00:26:31] Speaker 00:
That's absolutely right, Your Honor.

[00:26:32] Speaker 00:
For example, there's one point in the board decision where the judge says that if anything, the piling on of a host of non-economic topics into the negotiations at the last minute presented the party with a brand new platter of options.

[00:26:48] Speaker 00:
Go ahead.

[00:26:50] Speaker 00:
So the union with these brand new proposals presented to it

[00:26:54] Speaker 00:
If the parties then, it was necessary to exhaust the collective bargaining process for the parties to explore avenues of agreeing on those proposals, because there had been no discussion of them.

[00:27:06] Speaker 00:
And they could have made avenues to agreement amongst the non-economic proposals themselves.

[00:27:13] Speaker 00:
And they also could have discussed trade-offs between the non-economic proposals and the economic proposals.

[00:27:19] Speaker 00:
And I would add, for example, when we cite cases in our brief that say that this is a commonplace, very common method of compromise in collective bargaining is trade-offs and deals between economic and non-economic.

[00:27:35] Speaker 00:
And I'd like to address the point.

[00:27:37] Speaker 03:
Oh, sorry.

[00:27:37] Speaker 03:
So let's just help me think about this, because I have less experience than Judge Edwards in this area, but a somewhat different instinct.

[00:27:48] Speaker 03:
So let's assume just to simplify this that they're bargaining over three different issues and they're sort of, the employer is roughly at $26 on wages, $6 on health contribution and an hour a day on break time.

[00:28:14] Speaker 03:
And then at the last minute, they come in with a dramatically new offer, which says $20 on wages, $4 on health and 10 minutes on break time.

[00:28:30] Speaker 03:
You think that could tend to break an impasse because the union will say,

[00:28:40] Speaker 03:
Oh, this signals flexibility because maybe we can trade X for Y or you think they're more likely to say, this is crazy.

[00:28:51] Speaker 03:
This is much worse.

[00:28:52] Speaker 03:
They're moving backwards.

[00:28:53] Speaker 03:
So if we weren't done before, we must be done now.

[00:28:58] Speaker 00:
Your honor, if I could, I'd try to make a couple of points to respond.

[00:29:01] Speaker 00:
The first is that, well,

[00:29:05] Speaker 00:
I guess the first is that it's really not a question of whether an impasse was broken.

[00:29:11] Speaker 00:
Exactly.

[00:29:13] Speaker 02:
That's your answer.

[00:29:14] Speaker 02:
The assumption that my colleague is making is that does this break an impasse?

[00:29:19] Speaker 02:
It wasn't an impasse.

[00:29:20] Speaker 02:
It's proving that there is no impasse.

[00:29:22] Speaker 00:
That's right, Your Honor.

[00:29:23] Speaker 00:
And not only that, as we point out in our brief, the company before the board expressly conceded that if there had been an impasse in September, which it had contended,

[00:29:34] Speaker 00:
The company expressly conceded, as we point out in our brief to the court, that if there was an impasse in September, that that impasse was broken well in advance of the events of November.

[00:29:45] Speaker 00:
But on top of that, I would also respond that, yes, I think that

[00:29:51] Speaker 00:
Again, the case law in cases like Herman Brothers, Sentinel Hospital, EIS Breakpart, board cases that we cite in our brief, the board's decision here is consistent with those precedents that when a party is suddenly introducing new proposals that had not previously been raised and or that are inconsistent with a radical divergence from its prior bargaining positions at the last minute that the

[00:30:21] Speaker 00:
Further bargaining is required between the parties to see if those changed proposals allow the parties an avenue to reach an agreement and they need to fully exhaust all avenues.

[00:30:33] Speaker 00:
And I think it's important here

[00:30:36] Speaker 00:
In your hypothetical, I know that you, Judge Katz, had spoke about kind of a change in economic issues, but I do think it's really important here that the change at the last minute was both on the economic issues and on a raft of non-economic proposals.

[00:30:53] Speaker 00:
And I need to respond to the point that Mr. Dowd made, the contention the company has raised.

[00:30:59] Speaker 00:
that this was somehow inadvertent or a mistake.

[00:31:03] Speaker 00:
There is no evidence in the record and I have to stress that the company had the evidentiary burden in this case to prove an impasse.

[00:31:11] Speaker 00:
when Mr. Cropper on behalf of the union testified, he went through point by point and he pointed out all the changes.

[00:31:19] Speaker 00:
Well, I don't know about all the changes.

[00:31:20] Speaker 00:
He pointed out several changes in the non-economic proposals between the final offer that was ultimately implemented and the company's earlier tentative agreements on those very same non-economic topics.

[00:31:33] Speaker 00:
Then it's the company's turn to put on its evidence and it put on zero, zero evidence as to why it suddenly introduced these brand new non economic proposals into the negotiations at the 11th hour.

[00:31:48] Speaker 00:
So there is no support for the notion that this was a mistake or inadvertent and

[00:31:53] Speaker 00:
It's also simply incorrect to suggest, as the company has, that there's no evidence that the company implemented.

[00:32:01] Speaker 00:
I mean, first of all, it would be the company's burden to prove that it withdrew the proposals and that they were a mistake.

[00:32:07] Speaker 00:
It never did that.

[00:32:08] Speaker 00:
But on top of that, it stipulated, as we point out in our brief, at appendix page 485, the company stipulated before the board that it implemented all of the terms of its offer, which included both the economic and the non-economic,

[00:32:21] Speaker 00:
and that those terms then went into effect on December 1, 2017.

[00:32:26] Speaker 00:
I don't have much time left, Your Honors, but if I could quickly address just two more points.

[00:32:31] Speaker 00:
The company here did more than just fail to share with the union certain information that it had.

[00:32:38] Speaker 00:
It made repeated affirmative misrepresentations to the union during the bargaining regarding purported FPS deadlines and allegedly impending FPS reductions to reimbursement rates.

[00:32:51] Speaker 00:
It presented October 31 and November 17 as hard deadlines externally imposed by the FPS when the record shows that that was untrue and when the company knew that that was not true.

[00:33:04] Speaker 00:
And then on top of that, it

[00:33:06] Speaker 00:
specifically tied the last three alleged deadlines that it asserted, the October 31 deadline, the November 17 deadline, and the November 20 deadline, it tied all of those to the false claim that if those deadlines weren't met, that the FPS would cut the reimbursement rates on December 1, 2017 when the company well knew that the FPS had already committed to continuing the status quo reimbursements through March 31, 2018.

[00:33:35] Speaker 00:
And the other point I'd like to make, if I can very briefly,

[00:33:39] Speaker 00:
just in connection with the discussion we were having about the last minute introduction of proposals.

[00:33:44] Speaker 00:
I think it's also important to remember that prior to November 17, the company had repeatedly claimed other supposedly final offers and other supposedly hard deadlines.

[00:33:57] Speaker 00:
And the parties, of course, continued to bargain and exchange proposals even after those supposedly final offers and deadlines had come and gone.

[00:34:06] Speaker 00:
So the union had no reason to understand that the company's latest claim of a November 17th final offer was any different than those prior claims.

[00:34:16] Speaker 00:
Your honors, I'm over my time, but I would welcome the opportunity to answer any additional questions that the court may have.

[00:34:24] Speaker 01:
I have a question about the remedy, the part of the remedy that orders the company.

[00:34:31] Speaker 01:
I don't have it in front of me.

[00:34:45] Speaker 01:
I think I may have confused this NLRB case with one I'm hearing tomorrow.

[00:34:55] Speaker 02:
I will withdraw the question.

[00:34:58] Speaker 02:
I started to say that, but I wasn't sure.

[00:35:02] Speaker 01:
Judge Edwards, you and I are sitting again tomorrow.

[00:35:04] Speaker 01:
So you know what I'm talking about.

[00:35:06] Speaker 01:
All right, Judge Kansas, do you have another question?

[00:35:08] Speaker 03:
No, I'm set.

[00:35:09] Speaker 03:
Thank you.

[00:35:10] Speaker 01:
All right.

[00:35:11] Speaker 01:
Then thank you, Mr. Hickson, Mr. Dowd.

[00:35:14] Speaker 01:
Why don't you take two minutes?

[00:35:16] Speaker 04:
Thank you very much.

[00:35:17] Speaker 04:
And I'll try to take less than that.

[00:35:19] Speaker 04:
I think that the point that Mr. Hickson was making about misrepresentations is dealt with in our brief.

[00:35:26] Speaker 04:
And I don't think I need to reiterate that point.

[00:35:29] Speaker 04:
The one thing that I do want to focus on is that the court obviously has issues about what it perceives to be changes in proposals and the like that were done and what the court has talked about being poorly timed.

[00:35:44] Speaker 04:
But I urge the court to look at the cases that we've cited at page 32 of our brief, which talks about existing National Labor Relations Board decisions and law and precedent that say that there are three exceptions to the rule that there must be an overall impasse before an employer may implement its last, best, and final offer.

[00:36:06] Speaker 04:
I want to reiterate that these are by law three exceptions where you don't have to have an overall impasse.

[00:36:13] Speaker 04:
One is when the union engages in conduct that's calculated to frustrate agreement or to frustrate impasse.

[00:36:19] Speaker 04:
That occurred here because the union insisted on mediation as a way of moving forward and the company doesn't have an obligation to do it.

[00:36:27] Speaker 04:
So that was an action by the union of frustrated agreement.

[00:36:30] Speaker 02:
The union did not insist on that as a condition of continued bargaining.

[00:36:35] Speaker 02:
It insisted on it.

[00:36:36] Speaker 02:
They just proposed.

[00:36:38] Speaker 02:
They said, we really think that would be a good thing to have.

[00:36:41] Speaker 02:
They did not say we will not negotiate unless you agree to mediation.

[00:36:47] Speaker 04:
I don't think that's accurate.

[00:36:48] Speaker 04:
I think that the actual communications by the union, if you look at our citations in our brief, were that they did not intend to change their wage offer.

[00:36:59] Speaker 04:
But they said, we've gone as far as we can with our wage offer.

[00:37:03] Speaker 04:
unless you want to participate in mediation, then we'll talk more.

[00:37:07] Speaker 04:
So I do think they conditioned any movement on that by, they conditioned any movement on wages by the company having to agree to mediation.

[00:37:18] Speaker 04:
But more importantly, it's the second point.

[00:37:20] Speaker 04:
It says when an employer can demonstrate that an impasse on one critical issue precluded agreement, then it was okay to go forward and try to break that impasse through

[00:37:32] Speaker 04:
implementation of a last and final proposal.

[00:37:35] Speaker 04:
I think that is the key finding here.

[00:37:37] Speaker 02:
Yeah, I mean, you do have those three exceptions.

[00:37:40] Speaker 02:
And the only one that that might work is the second one that you're talking about.

[00:37:43] Speaker 02:
The problem you have is you change proposal, you can't get around it.

[00:37:47] Speaker 02:
And you described it as bad timing and mistake, etc.

[00:37:51] Speaker 02:
But the board, the board took it for what it was, and they made findings adverse to you, we're supposed to defer to those findings, you reopened

[00:38:00] Speaker 02:
the you open to put everything back on the table again.

[00:38:03] Speaker 02:
And that's exactly what the board said.

[00:38:05] Speaker 02:
And the case law supports that you have no exception around that the case law supports it.

[00:38:10] Speaker 02:
And the board made an adverse finding against you on that.

[00:38:15] Speaker 04:
Okay, right.

[00:38:15] Speaker 04:
I understand your position on that.

[00:38:18] Speaker 02:
Okay, thank you.

[00:38:21] Speaker 04:
Thank you very much.

[00:38:23] Speaker 01:
Okay, wait, Judge Kansas has a question.

[00:38:26] Speaker 01:
Back to

[00:38:29] Speaker 03:
Back to that last best offer.

[00:38:31] Speaker 03:
I wanna make sure I understand your characterization of it.

[00:38:37] Speaker 03:
Do you think it is a new and different offer, which just opens up new issues, or do you think it's better characterized as, I'll just call it for shorthand, purely retrogressive?

[00:38:57] Speaker 03:
just takes what was offered before and makes all the terms worse for the union.

[00:39:02] Speaker 04:
I would have to look at it.

[00:39:04] Speaker 04:
I'm sorry.

[00:39:05] Speaker 04:
I did not mean to interrupt you.

[00:39:06] Speaker 04:
Go ahead.

[00:39:07] Speaker 03:
What's the better characterization?

[00:39:09] Speaker 03:
I understand that might be important to me.

[00:39:14] Speaker 04:
All right.

[00:39:14] Speaker 04:
Like Mr. Hickson, I'd have to say I honestly don't know without looking at the documents and comparing them, which are in the record.

[00:39:20] Speaker 04:
I'd have to look at it.

[00:39:21] Speaker 04:
I'm sorry.

[00:39:23] Speaker 03:
It is your burden.

[00:39:24] Speaker 03:
But OK.

[00:39:27] Speaker 01:
All right, if there are no more questions, then thank you, gentlemen, and your case is submitted.