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NLRB: Totality of circumstances suggests parties not at valid impasse when Dish Network implemented ‘final offer’

By Ronald Miller, J.D.

Though an administrative law judge failed to explicitly apply the analysis set forth in Taft Broadcasting Co. for determining whether an employer and a union had reached a valid impasse, a divided three-member panel of the NLRB concluded that the employer violated Section 8(a)(5) by implementing its “last, best, and final offer” and unilaterally changing unit employees’ terms and conditions of employment in the absence of a valid impasse. Under Taft Broadcasting, the Board will consider the totality of the circumstances, including “bargaining history, the good faith of the parties in negotiations, the length of the negotiations, the importance of the issue or issues as to which there is disagreement, [and] the contemporaneous understanding of the parties as to the state of negotiations.” Applying that analysis here, the Board affirmed the law judge’s conclusion. Member Emanuel filed a separate dissenting opinion (Dish Network Corp., June 28, 2018).

On July 8, 2010, the employer and union began bargaining on a first collective bargaining agreement. They held about 25 bargaining sessions until their final face-to-face meeting on November 18, 2014, at which time they had reached agreement on many issues, but the thorniest issue remaining was whether the employer would keep an incentive-based Quality Performance Competition (QPC) system. Initially, the union fought against QPC in favor of a straight hourly wage schedule, but the parties ultimately switched positions because the QPC formulas resulted in higher compensation than the employer intended.

Final proposal. At the November bargaining session, the employer made a “final proposal” that included wholly eliminating QPC. The union had to reschedule December 2014 bargaining dates because its chief negotiator experienced a death in her family. The employer then rejected all of the union’s alternative dates and conditioned any further meetings on written responses to its final offer. Additionally, it informed the union that failure to provide such responses would result in a declaration of impasse. The union reluctantly replied with counterproposals via email, and again requested that the parties meet. It also offered to eliminate QPC for all new hires.

Let’s keep talking. Rejecting the union’s counterproposal, the employer stood by the terms of its November 18 proposal and stressed the proposal was the “last, best, and final offer.” The union spurned the employer’s requirement that it take the offer to its membership, again requested that the parties meet and confer face-to-face over proposals, and sent six specific dates in January 2015 when it was available to meet. The employer’s counsel replied that his partner would take over negotiations, but the employer never got back with the union.

One year later … Over a year later, on January 8, 2016, the employer sent the union a letter asking if it was going to accept its November 18, 2014, final offer. In response, the union renewed its insistence that the parties meet and bargain. It rejected the employer’s claim that it had permitted negotiations to languish for over a year. The employer declared impasse for the first time in a February 2, 2016, email. The next day, the union again insisted on a face-to-face bargaining session, which the employer ignored, and on April 4, 2016, it announced that it would be implementing its final offer on April 23, 2016.

Good-faith negotiations. The Board has long defined impasse as a situation where “good-faith negotiations have exhausted the prospects of concluding an agreement.” The party claiming impasse bears the burden of demonstrating its existence. The Board found that the employer failed to carry this burden.

By December 2014, the parties had bargained in numerous sessions for more than four years over a first CBA, and QPC remained the most important issue of disagreement. Even if the parties may have been near a valid impasse then, the employer never asserted impasse at that point. From the events that followed, the employer “was not warranted in assuming that further bargaining would be futile.” On December 9, 2014, the union proposed to eliminate QPC for new hires, an appreciable change in its position on this issue, and this “white flag” offered a possible resolution on the negotiation’s thorniest issue.

However, rather than explore this real possibility of fruitful discussion, the employer rejected the union’s repeated requests for a face-to-face bargaining session. Board precedent is clear that only in-person, face-to-face meetings satisfy the NLRA’s obligation to meet and confer. The employer never claimed before February 2016 that the parties were at impasse, and it denied all of the union’s requests for in-person bargaining. Moreover, the union reasonably disagreed that the parties were at an impasse.

Test for valid impasse. Accordingly, under the rubric set forth in Taft Broadcasting, the Board found that the parties were not at a valid impasse when the employer implemented its “last, best, and final offer.” Specifically, the parties’ history showed that they were engaged in difficult bargaining for an initial contract; the employer failed to bargain in good faith over the most important outstanding issue; and the union consistently sought additional bargaining sessions, reflecting its understanding that the parties had not yet reached impasse. Taken together, these facts demonstrate that the parties were not at an impasse—even considering the year-long hiatus in bargaining.

Of particular significance that impasse had not been reached was the union’s substantial movement on the QPC issue and the employer’s refusal to meet and confer once the union made this counterproposal. Accordingly, the Board affirmed the ALJ’s finding that the employer acted unlawfully by unilaterally changing unit employees’ terms and conditions of employment.

Dish Network’s QPC program has a storied history; the Board issued a news release about the ALJ’s order in January 2017, the Northern District of Texas granted a preliminary injunction in ordering the employer to restore what it called a “a drastic cut” in wages, and last month the Fifth Circuit agreed exceptional circumstances were present to grant injunctive relief to an NLRB regional director against DISH Network’s unilateral implementation of its “final offer” after declaring an impasse in negotiations with a union in Kinard v. DISH Network Corp.

Dissent. Member Emanuel would find that, at least as of April 23, 2016, when the employer implemented its final offer, the parties were at a valid impasse. Emanuel emphasized that after December 2014, the union made no attempt to contact the employer for more than 12 months, when its new negotiator contacted the union. According to Emanuel, this delay severely undermined the union’s interest in further bargaining. Further, following an additional two-month gap in communications, the employer repeated its final offer, reiterated its belief that further bargaining would be futile and stated its intention to implement the final offer. Accordingly, the dissent would find that the parties were at an impasse and dismiss the charges that the employer’s actions violated Section 8(a)(5), and find that the employer lawfully implemented the terms of its final offer.