Professional Documents
Culture Documents
NLRB Merck Decision 2019
NLRB Merck Decision 2019
bound volumes of NLRB decisions. Readers are requested to notify the Ex-
ecutive Secretary, National Labor Relations Board, Washington, D.C. that benefit (“covered employees”). The judge found
20570, of any typographical or other formal errors so that corrections can that Merck’s decision to exclude covered employees was
be included in the bound volumes.
motivated by the Unions’ prior refusal to agree to mid-
Merck, Sharp & Dohme Corp. and United Steel, Pa- term contract modifications sought by Merck, including
per and Forestry, Rubber, Manufacturing, En- proposed changes to the administration of payroll and
ergy, Allied Industrial and Service Workers In- 401(k) benefits and how year-end holidays are “complet-
ternational Union Local 10-580, AFL–CIO, ed.” The judge found that “this motive represents
CLC. straightforward punishment of union employees in retali-
ation for past protected activity under the Act” and that
Merck, Sharp & Dohme Corp. and Local 94c, Inter- Merck violated Section 8(a)(3) and (1) by withholding
national Chemical Workers Council of the Unit- Appreciation Day from most of its unionized employees.
ed Food and Commercial Workers International Merck excepts to the judge’s finding. We find merit in
Union, AFL–CIO. those exceptions.
Contrary to the judge, we find that the General Coun-
Merck, Sharp & Dohme Corp. and United Steel, Pa- sel failed to demonstrate that Merck’s refusal to offer
per and Forestry, Rubber, Manufacturing, En- Appreciation Day to covered employees was unlawfully
ergy, Allied Industrial and Service Workers In- motivated. We also find that the judge erred in finding
ternational Union, Local 4-575, AFL–CIO, CLC. that statements made by Riverside Plant Manager Brian
Cases 05–CA–168541, 06–CA–163815, and 22– Killen explaining Merck’s rationale for refusing to offer
CA–168483 the Appreciation Day independently violated Section
May 7, 2019 8(a)(1) of the Act.
DECISION AND ORDER I. BACKGROUND
Merck is an international pharmaceutical company,
BY CHAIRMAN RING AND MEMBERS MCFERRAN
employing 67,000 employees worldwide, 23,000 of
AND EMANUEL
whom work in the United States. Of the 23,000 U.S.
On December 20, 2016, Administrative Law Judge employees, 2700 are represented in 9 bargaining units,
David I. Goldman issued the attached decision. The Re- each with its own labor agreement and local union. The
spondent filed exceptions, a supporting brief, and a reply individually represented units include: two units in
brief.1 The General Counsel and the Charging Parties2 Rahway, New Jersey; one unit in Riverside, Pennsylva-
filed answering briefs. nia; three units in West Point, New Jersey; two units in
The National Labor Relations Board has delegated its Elkton, Virginia; and one unit in Kenilworth, New Jer-
authority in this proceeding to a three-member panel. sey. Each of the nine bargaining units separately negoti-
The Board has considered the decision and the record ated its collective-bargaining agreement with Merck, and
in light of the exceptions and briefs and has decided to the several agreements had different terms covering holi-
affirm the judge’s rulings, findings, and conclusions only days and varying expiration dates. In the spring of 2015,
to the extent consistent with this Decision and Order. Merck was not actively engaged in bargaining with any
This case arises out of Merck’s decision to offer a one- of the units. However, Merck had recently concluded
time paid holiday, referred to as “Appreciation Day,” on negotiations at the Rahway and Elkton facilities a few
September 4, 2015 (the Friday before Labor Day) to all months prior and was preparing to start collective bar-
its employees except for employees in the United States gaining at West Point before that contract expired in
April 2016.3
1 On February 17, 2017, the Respondent also filed a motion to reo-
pen the record to adduce additional evidence relevant to the Respond- 3 By late 2014, Merck’s Executive Director of U.S. Labor Relations
ent’s due process claim. In its motion, the Respondent asserts that the
Tony Zingales had discontinued the Respondent’s prior multi-facility
judge found a violation on a theory of animus that was neither pled in
bargaining practice, instead opting to negotiate with each of the nine
the complaint nor litigated at trial. In light of our decision to dismiss
bargaining units individually. Zingales explained that “master bargain-
the complaint, we deny the Respondent’s motion as moot.
2 The United Steel, Paper and Forestry, Rubber, Manufacturing, En- ing is not in the best interests of the company and not effective on a
location-by-location basis.” As a result of this individualized approach
ergy, Allied Industrial and Service Workers International Union, Locals
to bargaining, and because the contracts expired on a rolling basis, the
4–575 and 10–580, AFL–CIO, CLC and the International Chemical
Respondent was engaged in collective bargaining with one or another
Workers Council of the United Food and Commercial Workers Interna-
of the nine units nearly every year.
tional Union, AFL–CIO, Local 94C (hereinafter collectively referred to
as “the Unions”) jointly filed one brief.
In the spring of 2015,4 Merck reviewed its quarterly intended to negotiate with the unions about it. Based on
business results and found that its profits had exceeded Killen’s credited testimony at the hearing, the judge
expectations. As a result, CEO Kenneth C. Frazier asked summarized Zingales’ response to Killen as follows:
his human resource professionals to come up with a way Zingales told them that the benefit is not in the labor
to thank the company’s employees. After consulting contracts “and we can’t unilaterally give the day.”. . .
with several of his top global benefit executives, Frazier [In addition,] [t]he “feedback that we got was that . . .
decided to grant a one-time paid day off to show the Re- in the previous couple of years that the company had
spondent’s appreciation for the employees. made changes to the non-CBA employees. . . relatively
On July 28, in a town hall video meeting for the entire simple changes” such as “how they administer payroll
company, Frazier announced his intent to make Septem- and 401(k) and how they complete year end holidays.”
ber 4 a company-wide paid holiday known as Apprecia- Zingales explained to Killen and the managers that
tion Day. Frazier explained that this holiday was intend- these changes were made for nonunion employees but
ed to give special recognition for employees’ hard work when “they tried to discuss them with the union outside
and to celebrate great company performance. The slide of contract negotiations . . . the fee[dback] from the un-
show accompanying the presentation indicated that the ion was . . . wait until contract negotiations.” Killen
Appreciation Day did not apply to “those in US who are agreed that Zingales told him that the union’s refusal to
covered by [a] collective bargaining agreement.” cooperate in agreeing to these “minor changes” in re-
Immediately thereafter, union officials and some em- cent years was the reason that “Merck was not inclined
ployees began objecting to Merck’s exclusion of covered to approach the union in offering the appreciation day”
employees in a variety of ways. Union-represented em- or to “just give it to the unions.”5
ployees discussed whether they should decline to coop-
On August 21, several local union presidents wrote a
erate with an upcoming safety survey and cease partici-
joint letter to Merck’s CEO, referencing prior instances
pating in voluntary emergency service groups vital for
where the Respondent had included union-represented
plant operations. Several represented employees and
employees in company-wide holidays, and requesting
union officials commented on Merck’s intranet comment
that the unit employees receive the benefit.6 The Re-
board in protest of the exclusion. Additionally, West
spondent never directly responded to this request, except
Point local union president Daniel Bangert wrote an open
to reiterate that “constraints on implementing unilateral
letter to the Respondent’s leadership expressing the Un-
changes” prevented the Respondent from granting union-
ion’s objection to the decision to exclude covered em-
represented employees the day off.
ployees from receiving the Appreciation Day benefit.
On September 4, the Respondent granted Appreciation
On July 31, Frazier responded to Bangert by email,
Day to all employees, except those employees who were
stating that “there are constraints on implementing uni-
covered by a collective-bargaining agreement that did not
lateral changes—for better or for worse—for employees
contractually entitle them to the paid day off. The Re-
covered by a collective bargaining agreement.” Like-
spondent granted Appreciation Day to unionized em-
wise, Elizabeth Goggin, Merck’s head of Global Labor
ployees at its Kenilworth facility because the collective-
Relations, responded to comments from various employ-
bargaining agreement in place there entitled unit employ-
ees on an internal Company website. In her post, Goggin
ees to any benefit given to the nonunion employees at
recognized that the Respondent “could have been clearer
that location. Also, the collective-bargaining agreement
in acknowledging the constraints of collective-bargaining
covering employees represented by Service Workers
agreements in our initial communication about Apprecia-
International Union, Local 10-00086 at West Point in-
tion Day.” She went on to explain that “[c]hanges, for
cluded September 4 as a negotiated “floating” holiday.
better or worse, cannot be made by the Company unilat-
(Jt. Exh. 8.) As to all other unionized employees, the
erally unless there is a provision allowing for such
Respondent stood pat on the paid holidays it had negoti-
changes.”
At the request of Riverside Plant Manager Brian 5 The Respondent filed no exceptions to the judge’s finding that
Killen, on August 3, the Respondent conducted a tele- Killen’s testimony (and Zingales’ statements) constituted admissions
conference between several plant managers and Merck’s by agents acting within the scope of their employment, pursuant to
Executive Director for U.S. Labor Relations, Tony Zin- Federal Rules of Evidence 805 and 801(d)(2)(D). The judge also noted
that the Respondent made no hearsay objections to this testimony.
gales. Killen and other plant managers asked for a justi- 6 The judge noted three occasions where Merck had previously
fication for the exclusion and whether the Respondent granted represented employees a paid day off from work along with
unrepresented employees after consulting with the unions: January 2,
4 All dates hereafter refer to 2015, unless otherwise indicated. 1998, Martin Luther King Day in 2006, and January 2, 2009.
MERCK, SHARP & DOHME CORP. 3
ated with the Unions. That is, the Respondent did not benefit from its represented employees because they elected
offer to engage in midterm bargaining with the Unions a union to represent them. See, e.g., KAG-West, LLC, 362
over expansion of their negotiated holiday benefits. NLRB 981 (2015) (finding that employer unlawfully with-
Starting on November 8, several of the Unions filed a held wage increase from newly represented employees be-
series of unfair labor practice charges against the Re- cause they had recently elected a union).7
spondent. On June 30, 2016, the General Counsel issued In order to determine whether the Respondent’s deci-
an order consolidating these cases, a consolidated com- sion to deny represented employees Appreciation Day
plaint, and notice of hearing alleging that the Respondent was unlawful, the Board applies the Wright Line frame-
violated Section 8(a)(3) and (1) of the Act. The judge work.8 The burden is on the General Counsel to initially
found the violation, reasoning that the General Counsel establish that union or other protected concerted activity
proved that the Respondent withheld the benefit from was a substantial or motivating factor in the employer's
most of its unionized employees “because the unions decision to take adverse employment action against em-
failed to accede to the Respondent’s will and make mid- ployees. Specifically, the General Counsel bears an ini-
term changes to the contract requested in the past.” Ac- tial burden to show (1) union or protected concerted ac-
cording to the judge, “this motive represents straightfor- tivity, (2) employer knowledge of that activity, and (3)
ward punishment of union employees in retaliation for union animus on the part of the employer. Adams & As-
past protected activity under the Act.” For the reasons sociates, Inc., 363 NLRB No. 193, slip op. at 6 (2016),
explained below, we reverse the judge and dismiss the enfd. 871 F.3d 358 (5th Cir. 2017); Libertyville Toyota,
complaint. 360 NLRB 1298, 1301 (2014), enfd. 801 F.3d 767 (7th
II. ANALYSIS Cir. 2015). If the General Counsel meets his initial bur-
den, the employer can prevail by showing “it would have
Contrary to the judge, we find that the General Coun-
taken the same action in the absence of the unlawful mo-
sel has failed to show that the Respondent discriminated
tive.”9 Assuming that the General Counsel met the first
in violation of Section 8(a)(3) and (1) when it granted
two prongs of its initial burden under Wright Line, we
Appreciation Day to unrepresented employees, while
find that the General Counsel did not show that Merck’s
refusing to offer the benefit to most of its represented
decision to treat represented employees differently than
employees. The Board has long recognized that an em-
unrepresented ones was motivated by union animus.
ployer has a right to treat represented and unrepresented
The Respondent gave two reasons for not awarding
employees differently, so long as the different treatment
Appreciation Day to the represented employees: (1) it
is not discriminatorily motivated. Shell Oil Co., 77
was not inclined to approach the Unions to bargain over
NLRB 1306, 1310 (1948). In Shell Oil, the Board reject-
granting this additional benefit because the Unions had,
ed the General Counsel’s argument that three oil compa-
in the past, refused to agree to the Respondent’s request-
nies had unlawfully denied wage increases to represented
ed midterm contract changes, and (2) unilaterally grant-
employees while granting increases to unrepresented
ing the benefit would violate the Act. As stated above,
employees. The Board explained:
the judge found that the Respondent’s admitted reliance
Absent an unlawful motive, an employer is privileged to on the Unions’ past refusal to agree to midterm contrac-
give wage increases to his unorganized employees, at a tual changes was direct evidence of its retaliatory intent.
time when his other employees are seeking to bargain The judge further found that Zingales’ assertion that uni-
collectively through a statutory representative. Like- laterally giving represented employees Appreciation Day
wise, an employer is under no obligation under the Act would have violated the Act was pretextual—that is,
to make such wage increases applicable to union mem- false or not in fact relied upon—and evidence of animus
bers, in the face of collective bargaining negotiations because, in the judge’s view, the Respondent could have
on their behalf involving much higher stakes.
7 Neither the judge nor the dissent cites a case in which an employer
Id. at 1310. Thus, it has long been established that “the
was found to have violated the Act by granting a benefit to its unrepre-
mere fact that different offers are made or that different ben- sented employees but not its unionized employees because the latter
efits are provided does not, standing alone, demonstrate group’s union had previously denied the employer’s requests to bargain
unlawful motive.” Sun Transport, Inc., 340 NLRB 70, 72 over mid-term modifications. We are aware of no such precedent.
8 251 NLRB 1083 (1980), enfd. 662 F.2d 889 (1st Cir. 1981), cert.
(2003); see also Empire Pacific Industries, 257 NLRB
denied 455 U.S. 989 (1982), approved in NLRB v. Transportation
1425, 1426 (1981); B.F. Goodrich Co., 195 NLRB 914, Management Corp., 462 U.S. 393 (1983).
914-915 (1972). The quintessential case of unlawful dis- 9 Flamingo Las Vegas Operating Co., 360 NLRB 243, 244 (2014)
crimination in this context involves an employer that grants (internal citations omitted).
a benefit to its unrepresented employees but withholds that
4 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
and should have requested midterm bargaining from each did not reach agreement and the unionized employees
individual Union. We disagree on both counts. received no severance benefit.
We find that the Respondent’s first justification for the The judge in Sun Transport found the letter’s explana-
denial of Appreciation Day to unit employees is devoid tion to be an admission that the employer had retaliated
of animus. The judge’s conclusion that the Respondent against the union for bargaining positions taken in the
engaged in “straightforward punishment” when it con- past and that the disparate treatment was therefore un-
sidered the Unions’ prior refusal to entertain proposed lawful. The Board disagreed and dismissed the com-
midterm modifications simply fails to take into consider- plaint. The Board found that the employer’s letter did
ation the everyday realities of the bargaining process. not demonstrate antiunion animus. Id. at 72. According
“Collective bargaining by its very nature is an ‘annealing to the Board, it was not clear that the union’s past bar-
process hammered out under the most severe and com- gaining position was the basis of the lower severance pay
peting forces and counteracting pressures.’” Chevron Oil offer (as opposed to the high costs resulting from that
Co. v. NLRB, 442 F.2d 1067, 1074 (5th Cir. 1971) (quot- bargaining position). Importantly, however, the Board
ing NLRB v. Dalton Brick & Tile Corp., 301 F.2d 886, also held that “[e]ven if the severance pay offer was
895 (5th Cir. 1962)). The process, by its nature, may based on the [u]nion’s bargaining position during the
involve hard negotiation, posturing, brinkmanship, and negotiations for a successor contract, we would still find
horse trading over a long period of time. Given this no violation of the Act.” Id. (emphasis added). The
backdrop and the Board’s historical tolerance for such an Board noted that the issue of severance pay arose during
“annealing process” (so long as it does not cross the line comprehensive bargaining over a successor contract and
into unlawful threats or bad faith), Zingales’ articulation that the employer sought to use the severance pay issue
of the Respondent’s rationale was not an admission of to force concessions in other areas. As such, the sever-
unlawful retaliation. Consideration of prior bargaining ance offer was “but one element of the ‘competing forces
positions and extant contractual benefits is not unusual in and counteracting pressures’ inherent in the collective
the course of a collective-bargaining relationship, nor is bargaining process,” rather than evidence of bad-faith
it evidence of an employer’s antiunion animus. bargaining. Id. (internal citations omitted). Consequent-
We find support for our decision in Sun Transport, 340 ly, the Board concluded that the employer’s considera-
NLRB 70 (2003). In Sun Transport, the Board found tion of the union’s bargaining position did not demon-
that an employer did not violate the Act when it offered strate antiunion animus.
represented employees a less generous severance pack- Similarly here, we find that the Respondent’s reliance
age than it offered to unrepresented employees even ac- on the Unions’ prior bargaining position—their refusal to
cepting that the different treatment was motivated by the accept the Respondent’s proposed midterm modifications
union’s prior bargaining positions. Id. at 72. In Sun to year-end holidays and other matters—does not
Transport, the parties had been bargaining over a succes- demonstrate antiunion animus. Rather, it was, in the
sor collective-bargaining agreement for several months parlance of Sun Transport, part of the competing forces
when the employer decided to divest itself of the part of and counteracting pressures inherent in the bargaining
its business in which both groups of employees— process. The message sent by the Respondent’s action
represented and unrepresented—worked. Bargaining was clear: if the Unions were unwilling to entertain pro-
continued and included the issue of severance pay. The posed midterm modifications and insisted on adhering to
employer offered its unionized employees 1 week of sev- the terms of the contracts, the Respondent, too, would
erance pay for each year of service up to 20 years. At the stand firm, and the Unions were going to have to live
same time, the employer separately offered to its nonun- with the limitations of their contractual benefits along
ion workers 2 weeks of severance pay for each year of with their advantages. 10
service up to 20 years. When the union asked the em-
ployer to explain its different treatment, the employer 10 Our dissenting colleague asserts that the Respondent’s failure to
The judge distinguished Sun Transport on two Additionally, we find neither animus nor pretext in the
grounds, neither of which we find persuasive. First, the Respondent’s assertion that granting the Appreciation
judge asserted that here, unlike there, the Respondent’s Day unilaterally to unit employees would violate the Act.
different treatment of union and nonunion employees The parties’ collective-bargaining agreements contained
was not shown to be based on “costs” or “uncompeti- provisions regarding paid holidays, so it was not un-
tiveness” resulting from the Unions’ prior bargaining founded for the Respondent to consider that granting an
position (i.e., their adherence to the existing contracts in additional paid day off to unit employees without notice
the face of a request by the Respondent for midterm or an opportunity to bargain may have violated the Act.
changes). However, in Sun Transport the Board found See B.F. Goodrich Co., 195 NLRB at 915 (finding that
that the employer merely expressed its belief that the “efforts by an employer to extend new benefits to repre-
union’s bargaining position had led to higher costs, sented employees would usually be in derogation of the
which in turn were “a factor” contributing to the employ- contractually established benefits package. Such unilat-
er’s disparate severance offers. The Board ultimately eral action may, indeed, constitute an unlawful refusal to
found that it could not say whether the Union’s bargain- bargain.”). Although the Respondent could have offered
ing position was the basis for the disparate offers. Im- to bargain, nothing in Section 8(d) suggests that a party
portantly, however, the Board then found that, even as- must bargain over or accept midterm contract changes.12
suming the disparate offers were “based upon the See Boeing Co., 337 NLRB 758, 762 (2002) (“[I]n the
[u]nion’s bargaining position,” the Board would still find absence of reopener language, we find Section 8(d) pro-
no violation. Id at 72. tects every party to a collective-bargaining agreement
Second, the judge and our dissenting colleague distin- from involuntarily incurring any additional bargaining
guish Sun Transport on the ground that here, unlike obligations for the duration of the agreement.”). Thus,
there, the parties were not engaged in bargaining over a we find that the Respondent’s assertion of its concern
successor collective-bargaining agreement when the Re- regarding unilateral midterm changes was not evidence
spondent treated union and nonunion employees differ- of animus or pretext.
ently. The judge and the dissent conclude that absent Finally, we find that the District of Columbia Circuit
such ongoing negotiations, the Respondent’s actions Court’s rejection of the majority position in Arc Bridges,
were not taken to force concessions in other areas but 362 NLRB 455 (2015), enf. denied 861 F.3d 193 (D.C.
rather simply to engage in “pure retaliation” for the Un- Cir. 2017), further supports dismissal of the complaint.
ions’ prior bargaining positions. We disagree. In that case, the Board had found that the employer vio-
We find that the absence of ongoing bargaining is not lated Section 8(a)(3) and (1) by withholding a pay in-
outcome determinative. The parties’ bargaining relation- crease from represented employees, while granting in-
ship is a continuing affair; it does not cease during the creased pay to unrepresented employees, in the course of
term of an agreement. We also disagree with the dis- collective bargaining. 362 NLRB 455, 456–458.
sent’s assertion that the lack of active bargaining proves Among other reasons for finding animus, the Board re-
that the Respondent did not intend to use the issue as a jected the employer’s legitimate business reason for the
bargaining chip in future negotiations. Indeed, it would
be reasonable for the Respondent to conclude that its view of this case is perhaps best illustrated by our different characteri-
zations of the effect of Killen’s statement on Vallo. We agree with our
decision here might well prompt the Unions to be more colleague that Killen’s statement would tend to influence Vallo’s “deci-
openminded to proposed concessionary midterm modifi- sion-making in his representative capacity when next approached by
cations in the future than it had been in the past.11 management seeking midterm concessions.” For our colleague, this
represents a tendency “to interfere with Vallo’s protected activity.” For
ing strategy. Thus, this was not a new justification offered for the first us, it constitutes the lawful application of leverage within an ongoing
time at the hearing. bargaining relationship. Hence, we reverse the judge’s finding of a
violation.
12 The dissent asserts that the Respondent’s decision to grant paid
11 We also reject the judge’s finding that the Respondent violated
Sec. 8(a)(1) when Plant Manager Killen told employee Ed Vallo, the holidays on three prior occasions—after first seeking the Union’s con-
local union president at Riverside, that the reason for the denial of the sent—undermines the Respondent’s argument that unilaterally granting
Appreciation Day was the Union’s prior refusal to entertain midterm the mid-term benefit would violate the Act. The fact that the Respond-
contract modifications. A statement violates the Act if it has “a reason- ent has awarded a holiday to employees three times in the past 20 years
able tendency to coerce employees in their choice whether to engage in does not mean that it was obligated to do so here. Nor does the Re-
union activity.” Real Foods Co., 350 NLRB 309, 309 fn. 4 (2007). spondent’s prior award of benefits undercut its statement that such
Contrary to our dissenting colleague, we find that Killen’s statement unilateral action violates the Act. Although the unions wrote a letter
was a lawful explanation of the Respondent’s reasons for the denial of consenting to such an award as a collective group, the Respondent
the benefit and would not have a reasonable tendency to coerce em- exercised its right to address any increased benefits individually at
ployees in their Sec. 7 activity. Our disagreement with our colleague’s future bargaining.
6 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
raise (i.e., the employer’s attempt to avoid a strike and For the above reasons, we shall order that the com-
prevent further employee attrition). Id. at 458–459. The plaint be dismissed in its entirety.
court disagreed with the Board’s finding of animus, not- ORDER
ing that “[t]he Board failed adequately to explain why
The complaint is dismissed.
these two justifications, which are respectively a facially
reasonable bargaining strategy and a rational business
decision, are indicative of antiunion animus.” 861 F.3d
at 197–198. So also here. For the reasons explained
Dated, Washington, D.C. May 7, 2019
above, the Respondent’s decision to withhold the Appre-
ciation Day benefit from most of its represented employ-
______________________________________
ees was a rational business decision and a reasonable
John F. Ring, Chairman
strategy to apply leverage within the context of its ongo-
ing bargaining relationships with the several Unions. In
addition, the record establishes that, with the advent of
________________________________________
Zingales as its executive director of labor relations, the
William J. Emanuel Member
Respondent had adopted a policy and practice of bargain-
ing with each unit separately and, consistently, of not
granting midterm contract benefits globally to multiple
(SEAL) NATIONAL LABOR RELATIONS BOARD
bargaining units. This, too, was a facially reasonable
bargaining strategy and further supports our finding that
MEMBER MCFERRAN, dissenting.
the challenged decision was not motivated by antiunion
This is a straightforward case of employer discrimina-
animus.13
tion against union-represented employees because of
In sum, we find that the Respondent’s decision not to
what their unions had legitimately refused to do: modify
grant represented employees the paid holiday was simply
existing collective-bargaining agreements at the employ-
a reflection of the “competing forces and counteracting
er’s request. The Respondent had recently enjoyed ex-
pressures” that were a part of the historical collective-
ceptional profits and decided to thank its workforce by
bargaining relationship. Sun Transport, 340 NLRB at
granting an extra paid day off from work—an “apprecia-
72. In these circumstances, and in the absence of evi-
tion day.” The Respondent decided not to grant the “ap-
dence of any bad faith on the Respondent’s part, we find
preciation day” to all its employees, however. It denied
that the General Counsel failed to meet its initial burden
this benefit to most of its union-represented employees,
under Wright Line, and thus he did not meet his burden
specifically because their unions had not acquiesced in
to establish that the Respondent violated the Act.
the Respondent’s past requests for mid-term collective-
13 We disagree with the dissent’s attempt to distinguish the court’s bargaining agreement modifications. This reason was
reversal of Arc Bridges on the grounds that (1) the relevant events in conveyed by one of the Respondent’s plant managers to
that case occurred during ongoing bargaining; and (2) the court accept- a local union president. The judge here correctly found:
ed that the employer’s denial of the wage increase was based on in- (1) that the Respondent’s denial of the “appreciation
creased employer costs as a result of bargaining difficulties, rather than
antiunion animus. While it is true that the parties were engaged in day” to its union-represented employees “represents
active negotiations in Arc Bridges, for the reasons stated above, we do straightforward punishment of union[-represented] em-
not find the absence of ongoing negotiations here outcome determina- ployees in retaliation for past protected activity under the
tive. Moreover, similar to the court’s holding in Arc Bridges, we find [National Labor Relations] Act”; and (2) that the plant
that the Respondent’s statement linking the Union’s prior refusal to
consider midterm contract modifications to the Union’s refusal to grant manager’s statement revealing the Respondent’s ra-
the paid holiday was merely an “accurate statement” reflecting the tionale for its decision independently violated the Act.
Respondent’s bargaining strategy and not evidence of animus. See id. The Board should affirm these well-supported findings.
at 197 (employer’s representation that it would keep giving pay raises
“until the Union was voted in” was lawful as an “accurate statement” of I.
bargaining strategy). See also Orval Kent Food Co., 278 NLRB 402, The undisputed facts are as follows. On July 28,
403 (1986) (declining to infer an unlawful motivation from a manager’s
remark attributing a decision not to give wage increases to the union’s
2015,1 in a town hall video meeting for the entire compa-
certification because such “remarks were merely a realistic statement of ny, the Respondent’s CEO Ken Frazier announced the
the effects of the bargaining obligation which the [Employer] incurred company’s decision to grant the “appreciation day” to its
when the Union was certified to represent the ... employees”). employees. The slide show accompanying the an-
1 All dates are in 2015.
MERCK, SHARP & DOHME CORP. 7
the Unions had rebuffed its proposed mid-term contract 2023, so that bargaining for Rahway was almost 8 years
modifications. away from the time of the announcement. Similarly, at
B. the Elkton, Virginia plant, the parties had concluded an
agreement in 2014 that was effective through April 30,
The majority’s reasons for finding that the General
2018, almost 3 years after the “appreciation day.” And
Counsel failed to demonstrate that the Respondent’s de-
the contract covering unit employees at the West Point,
cision was unlawfully motivated cannot withstand scruti-
New Jersey facility was not set to expire until the end of
ny. The majority first posits that the Respondent’s reli-
April 2016, giving the parties almost a year before bar-
ance on the Unions’ past resistance to mid-term contract
gaining began. Thus, as the judge found, the Respondent
changes merely reflected the “competing forces and
“in a very real sense. . . consciously refused to use appre-
counteracting pressures inherent in the collective bar-
ciation day as a bargaining chip with the unions.” (em-
gaining process.” Second, the majority finds merit in the
phasis in original). It neither sought nor gained any lev-
Respondent’s further rationale that its decision not to
erage from its refusal to provide the “appreciation day”
grant the benefit was borne out of fear of committing an
benefit to union-represented employees, but rather acted
unlawful unilateral change. There is no merit to either
in “pure retaliation” for the Unions’ prior protected con-
rationale.
duct.
1. In Arc Bridges the Board found that the employer had
The majority draws its “collective bargaining process” violated Section 8(a)(3) by failing to give the same wage
rationale from Sun Transport, supra and the District of increase to union-represented employees that it gave to
Columbia Circuit’s decision in Arc Bridges.5 As ex- unrepresented employees. The District of Columbia Cir-
plained by the judge, Sun Transport and Arc Bridges cuit disagreed, but, as in Sun Transport, based on cir-
presented materially different circumstances. cumstances not present here. The court found that the
In Sun Transport, the Board declined to find a Section employer’s refusal to grant the same wage increase to
8(a)(3) violation where the respondent denied union- union-represented employees occurred in the context of
represented employees the same severance pay it granted ongoing negotiations, in which the union had requested
to unrepresented employees—amid active bargaining for substantially more than the employer was willing to give
a new contract. 340 NLRB at 72—73. The majority to unrepresented employees. In addition, the court ac-
necessarily concedes that “in the spring of 2015 [when cepted that the employer’s reason for not giving the wage
the announcement was made], Merck was not actively increase to union-represented employees was “increased
engaged in bargaining with any of the units.”6 In con- costs,” not the employees’ Section 7 activity. Arc Bridg-
trast to the Sun Transport situation, then, the Respond- es, above, 861 F.3d at 197.
ent’s exclusion of union-represented employees from the Again, the parties in the present case were not engaged
company-wide “appreciation day” was not “intertwined” in active negotiations, and, as stated, the Respondent
with ongoing bargaining where the Respondent was at- itself never articulated a “bargaining strategy” rationale.
tempting to “force concessions in other areas.” Id. at 72. Instead, as the judge found, the Respondent’s stated rea-
To the contrary, the record shows that the Respondent sons were either pretextual or evidenced direct retaliation
had just negotiated a new collective-bargaining agree- for protected activity.7
ment with the local union at its Rahway, New Jersey
7 The majority’s attempt to rehabilitate Zingales’ August 3 state-
facility, which was effective May 1, 2015, through April
ments that “Merck was not inclined to approach the union in offering
5 Arc Bridges, Inc. v. NLRB, 861 F.3d 193 (D.C. Cir. 2017), denying
the appreciation day” or to “just give it to the unions” as “evidence of a
contemporaneous reference to its bargaining strategy” is wholly unper-
enforcement to 362 NLRB 455 (2015).
6 At the hearing, the Respondent’s labor relations official Zingales
suasive. Those statements immediately followed Zingales’ complaint
to Killen that the Union had refused to acquiesce in the Respondent’s
asserted for the first time that the decision was part of a supposed “bar-
past attempts to modify the collective-bargaining agreement, directly
gaining strategy” at Rahway, Elkton, and West Point—despite conced-
confirming the Respondent’s retaliatory intent.
ing that he did not mention “bargaining strategy” when recommending
Nor is there any merit to the majority’s reliance on the notion that
the exclusion to the Respondent’s top managers and despite plant man-
the parties have an “ongoing bargaining relationship” and thus are
ager Killen’s uncontroverted testimony that Zingales did not mention
essentially always in a state of active negotiations. Accepting this
“bargaining strategy” when explaining the exclusion to plant managers.
premise would open the door to employers asserting a similar “bargain-
The Board generally finds, such “post-hoc” justifications pretextual, as
ing strategy” rationale whenever they wished to shield otherwise retali-
the judge properly did here. See, e.g., Approved Electric Corp., 356
atory action.
NLRB 238, 239 (2010) (“[t]he Board commonly recognizes such shift-
ing rationales as evidence that an employer’s proffered reasons for
discharging an employee are pretextual.”) (citing City Stationery, Inc.,
340 NLRB 523, 526 (2003).
MERCK, SHARP & DOHME CORP. 9
propose the “appreciation day” to the Unions, and I do not claim oth- this case is perhaps best illustrated by our different characterizations of
erwise. But the question presented is why the Respondent chose not to. the effect of Killen’s statement on Vallo.” Although they agree that
The pretextual reasons it asserts speaks to its unlawful motivation. Killen’s statement would tend to influence Vallo’s decision-making in
9 See Approved Electric Corp., 356 NLRB at 240 (“evidence that his representative capacity, they reject the judge’s common-sense con-
[an] employer’s purported reasons for [an] action were pretextual—that clusion that this impermissibly interfered with Vallo’s protected activi-
is, either false or not in fact relied upon”–supports a finding that the ty. My colleagues instead dismiss Killen’s statement as conveying no
action at issue was discriminatorily motivated). The judge correctly more than “the lawful application of leverage within an ongoing bar-
found that the General Counsel carried his initial Wright Line burden, gaining relationship.” But for reasons explained, this spin on the “bar-
and was also correct, for the reasons stated in his decision, that the gaining strategy” rationale must fail because the parties were not en-
Respondent did not meet its rebuttal burden under Wright Line. gaged in negotiations at the time.
10 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
bargained agreements. took Zingales’ guidance and advice on this. Zingales did not
Merck’s U.S. union-represented employees work in nine tell Zeller that the employees should not get the benefit because
bargaining units, each with their own labor agreement and local of labor relations issues. He did not tell Zeller that providing
union. The record does not speak with any precision to the the appreciation day benefit to union-represented employees
definition of the bargaining units and it is immaterial for the would run counter to Zingales’ “bargaining strategy” or “phi-
purposes of these cases. There are two units at the Rahway, losophy.”1
New Jersey facility. One is represented by Charging Party The July 28 announcement of appreciation day
Local 4-575, the other by Local 68 of the International Union
of Operating Engineers. Charging Party Local 2-0580 repre- Merck periodically conducts “global town hall” business
sents employees at Merck’s Riverside, Pennsylvania plant (also briefings for its employees, during which, through webcast or
called the Danville or the Cherokee plant). The West Point, dial-up, or in person, the entire worldwide workforce is provid-
New Jersey facility employees are organized into three bargain- ed an update on the company’s performance. The global town
ing units. One is represented by the International Brotherhood halls are led by Merck CEO Ken Frazier.
A global town hall briefing was conducted July 28, 2015.
of Teamsters, Local 107, one by Charging Party 10-0086, and
one by the Office and Professional Employees International Toward the end, Frazier announced that there would be a
Union, Local 1937. There are two bargaining units at the worldwide appreciation day on September 4, 2015, in which
Elkton, Virginia plant, one represented by Charging Party Lo- operations would cease and employees would have the day as a
cal 94, and the other by Workers United, Local 1398. District paid day off. The slides for Frazier’s presentation, which were
15, Lodge 315 of the International Association of Machinists shown in the meeting, stated because “[y]ou and your col-
represents a bargaining unit at the Kenilworth, New Jersey leagues give so much time and energy to our company . . . .
facility. [Merck] [w]anted to provide this ‘special’ recognition and
‘thank you’ for great performance we’re seeing at this mid
The origins of appreciation day point of 2015.” (emphasis in original). Another slide highlight-
On September 4, 2015, Merck provided a paid “appreciation ing the day off stated around the border of a picture of a globe
day” off for most of its workforce both in the U.S. and world- of the world: “You give so much of your time . . . We want to
wide. Union-represented U.S. employees did not receive this give some back.” (All capitalized in original). Across the mid-
extra day off. The exception was the Kenilworth, New Jersey dle of the globe in large font it stated, “Thank You.”
facility unit employees because Merck determined that Kenil- The slide indicated that Merck’s operations would be closed
worth’s bargaining agreement mandated that the unit employ- September 4, 2015. However, the slide also indicated that this
ees receive benefits received by nonunit employees at the plant. global shutdown “Does not apply those in US who are covered
The origins of the September 4 appreciation day were de- by a collective bargaining agreement.”
scribed in testimony provided by Jeff Zeller, Merck’s vice- An announcement “[f]ollowing up on Ken [Frazier’s] an-
president of global compensation and benefits. Zeller testified nouncement” was sent out later that day July 28. It stated, “En-
that in the spring of 2015, his manager, who was the chief HR joy an additional day off in 2015.” The announcement stated
officer for Merck, approached Zeller and asked him to think that “the company is providing you with an additional day off
about some ideas for Merck to show appreciation to Merck in recognition of the company’s performance through the mid-
employees “for the strong business results that we were seeing point of 2015.” The announcement explained:
so far that year in 2015.” After consultation with his HR man-
agement team, and with colleagues outside the U.S., Zeller Merck and MSD operations will close on Friday, Sept. 4.
determined that an extra paid day off would be “the right signal Please note the following:
to our employees.” Zeller forwarded the proposal to his man-
ager and ultimately the decision to move forward was made by • This applies globally where business operations and local
CEO Ken Frazier. According to Zeller, shortly after the July 4 practices/laws permit, and, as required, subject to consultation
holiday the decision was made by Merck to move forward with with employee representatives or works councils.
a paid day off on September 4, 2015, the Friday before the
Labor Day holiday in the United States. • In countries or sites where Sept. 4 is already a day off or it is
The exclusion from appreciation day of the U.S. union- not otherwise possible to close operations on that particular
represented employees was prompted by the advice and direc- day, your local managing directors or site leads will select an-
tion to Zeller of (then) Executive Director of U.S. Labor Rela- other day and communicate this information to you soon.
tions Tony Zingales. Zeller testified that he “relied solely on
[Zingales’] judgment as it relates to employees covered under • If you have already scheduled Sept. 4 as a vacation day or
the collective-bargaining agreement.” According to Zeller, your site requires you to work on that day to meet business
Zingales’ “take” was that “you can’t do this unilaterally” and
““it should not apply to those under collective bargaining 1 Zingales testified that he told Zeller that one group of union em-
agreement.” Zeller testified that “Tony [Zingales] explained to ployees should receive the day off—the unit employees at the Kenil-
me that employees in the U.S. are covered by a collective bar- worth facility. Their collective-bargaining agreement contained a
gaining agreement, and you can’t unilaterally provide an auto- “maintenance of standards provision” that, according to Zingales, “re-
quired us to provide benefits to the bargaining unit employees that were
matic day.” Zeller testified that he and the rest of the company
provided to salary employees.”
12 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
needs, please use the additional day off at another time and changes” such as “how they administer payroll and 401(k) and
coordinate with your manager. how they complete year end holidays.” Zingales explained to
Killen and the managers that these changes were made for non-
• This additional day off does not apply to those in the U.S. union employees but when “they tried to discuss them with the
who are covered by a collective bargaining agreement. union outside of contract negotiations . . . the fee[dback] from
the union was . . . wait until contract negotiations.” Killen
By all evidence, plant managers and employees were not agreed that Zingales told him that the union’s refusal to cooper-
made aware of the new benefit until July 28, when it was an- ate in agreeing to these “minor changes” in recent years was the
nounced during the global town hall. According to Zeller, the reason that “Merck was not inclined to approach the union in
matter was kept “pretty hush within human resources and glob- offering the appreciation day” or to “just give it to the unions.”
al communications” in an effort to keep it a surprise for the July I note that while Killen was, and was known to be, in disa-
28 briefing. greement with Merck’s decision to exclude the union-
Employee and Merck responses to the announcement represented employees—particularly those under his supervi-
sion—Killen was and is an agent of and aligned with the Re-
The announced intention to exclude the union-represented spondent. This only adds to the credibility of Killen’s account
employees from receipt of appreciation day caused something of Zingales’ stated explanation for the motive for refusing to
of a furor in the unionized plants. There were intimations that offer appreciation day to the union-represented employees.
union employees would not cooperate with an upcoming safety Moreover, Killen’s account is indirectly corroborated by Zin-
survey and cease participating in voluntary emergency service gales, who, in his testimony about appreciation day, made the
groups, which were important for plant operations. Merck’s point—without directly adopting it as a motive for excluding
intranet comments board received many posts and commen- union employees—that there were “changes in benefits levels
taries from excluded employees and union officials. The local or administrative cha[n]ges or practices that were applied to
union president for the West Point plant, Daniel Bangert, wrote non-union employees or salary employees that didn’t apply to
an open letter to CEO Frazier objecting to the exclusion of the unionized groups with the exception of the Kenilworth
union employees. unit.” He referenced the issue in a manner suggestive of the
Frazier, and then Elisabeth Goggin, who is Merck’s global belief that if the unions didn’t have to take the bad they are not
head of labor relations, responded with email and an intranet entitled to the good, a plausible, but, as discussed below, unac-
posting, respectively, that stressed and asserted the inability of ceptable motivation under the circumstances.
Merck to unilaterally provide an extra day off to employees Thus, the motives for excluding union employees that Zin-
covered under a collective-bargaining agreement. gales shared with Killen and the plant managers was (1) that it
On August 21, the local union presidents wrote a joint letter would be illegal to unilaterally provide these employees with
to CEO Frazier requesting that unit employees be included in appreciation day and (2) that he was not going to offer it to
the benefit, expressing concern over the announcement, refer- them through the unions in retaliation for the unions’ past un-
encing past instances where company-wide benefits had been willingness to make “minor changes” requested of them by
offered to union-represented employees, and disavowing any Merck. As an evidentiary matter, Killen’s account of Zingales’
suggestion from Merck that the unions would file a grievance comments is an admission and I credit it. Apart from his status
or charge if the unit employees were given the appreciation day as a witness for and aligned with the Respondent, I found
benefit. Killen to be a highly credible witness, both in his demeanor and
Riverside Plant Manager Killen learns why Merck excluded his forthright and plausible account of events, and I credit his
union-represented employees testimony for that reason as well.2
The July 28 announcement prompted Riverside Plant Man- The local union officials’ allegations
ager Brian Killen to request a conference call with Zingales and In my view, Killen’s credibility extends to his account of his
the HR department. Killen testified that in a conference call conversations with Riverside union officials about appreciation
with the other excluded plant managers and Zingales and his day. Killen testified that he told Riverside local union president
HR group on August 3, Killen and other managers asked why Ed Vallo the substance of Zingales’ remarks as to the apprecia-
their plants were excluded and whether there was an intention tion day: i.e., that Merck’s position was that the benefit could
to negotiate with the unions about it. not unilaterally be provided to union employees and that Merck
Zingales told them that the benefit is not in the labor con- did not intend to discuss it because of the unions’ previous
tracts “and we can’t unilaterally give the day.” Killen knew refusal to discuss payroll administration, 401(k) administration,
that answer was inadequate. As he testified, “clearly I knew
that wouldn’t be a sufficient response for my own information 2 I note that there was no objection to this testimony. To the contra-
and I needed more information to go back to the site.” Killen ry, the Respondent adopts it on brief. See. R. Br. at 13-14. In any
asked whether Merck was going “to have some kind of bargain- event, pursuant to Federal Rules of Evidence 805 and 801(d)(2)(D),
ing or what is our path forward.” When told no, that “there was neither Zingales’ statement to Killen nor Killen’s’ recounting of it to
no intent to bargain further,” Killen “and other plant managers Vallo (or on the witness stand, for that matter) constitutes hearsay.
asked about the reason.” The “feedback that we got was that . . Both Zingales and Killen were admitted agents of the Respondent and
. in the previous couple of years that the company had made acting in the scope of their employment when the statements were
made. See, United States v. Gibson, 409 F.3d 325, 337 (6th Cir. 2005).
changes to the non-CBA employees . . ., relatively simple
MERCK, SHARP & DOHME CORP. 13
and year-end holiday changes that Merck had sought to change en hours of leave that appears to have been conducted in Sep-
mid-contract. tember or even October, not in August as suggested by Vallo.
Moreover, Killen convincingly denied union president Val- In the face of the convincing denials by Killen and Patten, I do
lo’s and Union Steward James Little’s contention that in a not credit Vallo and Little’s claim that Killen told them that
meeting within “a few days after the announcement” Killen told these issues were the reason that all union-represented employ-
them that Merck refused to include the union plants in appre- ees were excluded from the appreciation day.6
ciation day because “there were serious labor issues at other Merck carries through with its plan to exclude union-
sites,” particularly safety issues, and that it was “despicable” represented employees from appreciation day
what was going on at the Rahway site—referring to unspecified
labor issues—given that “they had just finished up contract Between August 3 and 20, Killen spoke with Vallo and Little
negotiations” and that “Merck was not “going to reward bad and they discussed whether some kind of recognition of plant
behavior.”3 employees could be made in lieu of appreciation day. During
Vallo and Little testified that this conversation occurred at this period, Killen testified that while Zingales and his office
had ruled out agreeing to give the union employees the appreci-
the old plant manager’s office in building 117, and that HR
representative Janelle Patton was present. Patton denied attend- ation day holiday, they had not ruled out specific site-by-site
ing a meeting with Vallo and/or Little about issues around ap- adjustments that could be made at plant managers’ request.
preciation day until late September, weeks after the early Au- Discussions with Vallo, often accompanied by Little, were
gust discussion referenced by Little. While Vallo and Little undertaken by Killen at his (and Vallo and Little’s) initiative in
both testified that Patton’s usual practice was to take notes at this regard, but nothing was agreed to by upper management.
the meetings she attended with them and Killen, no notes of By August 20, Killen was informed by his immediate boss, Dan
this meeting were produced.4 Hoey, that senior level Merck management had determined that
“there would be no further discussions on appreciation day in
This is not a particularly easy credibility resolution, as Vallo
and Little appeared to me to be testifying honestly. I believe terms of potential to bargain for it locally or change directions.”
that in their many “free flowing” (as Little and Killen both This was confirmed to Killen the next day in a conference call
described their) conversations in the days and months after the with plant managers and Zingales and with Zingales’ immedi-
appreciation day announcement, there was discussion of many ate boss Elisabeth Goggin. On this call it was stated that the
issues, including problems at other plants. However, Vallo and issue was closed, “[t]here’s no intent to bargain further.” How-
Little were vague and uncertain on many details, and on the ever, Killen was reminded during this call, by Goggin, that as
time frame of the meeting in which the statement was allegedly plant managers, Merck provided them with “authority to recog-
nize people for a job well done at our own sites.” With this
made that Rahway and West Point’s issues were the reasons for
exclusion of all union-represented employees from appreciation authority, Killen continued to pursue discussions with Vallo
day.5 There was also confusion about the dates and timeline for about some kind of recognition for Riverside employees, but
Vallo/Little’s discussions with Killen about a proposal for sev- 6 I note further the lack of support for the truth of the claim Vallo
those discussions were not successful and abandoned in early meet or neutralize the General Counsel's showing, can avoid
October. the finding that it violated the Act by “demonstrat[ing] that the
Appreciation day occurred as scheduled, on September 4, same action would have taken place in the absence of the pro-
2015. In the U.S., the federal holiday of Labor Day was cele- tected conduct.” Wright Line, supra at 1089.
brated September 7, creating a 4-day weekend for Merck em- B. Application of Wright Line
ployees receiving the appreciation day off. Merck’s union-
represented employees did not receive appreciation day off, 1. The General Counsel’s affirmative case
with the exception of the employees in the Kenilworth bargain-
ing unit. a. The Respondent’s admitted motive was discriminatory
ANALYSIS In the complaint, and at trial, the General Counsel contended
that the Respondent’s motive for refusing to provide apprecia-
The General Counsel contends that Merck’s failure to pro- tion day for union-represented employees, and Killen’s expla-
vide appreciation day to the union-represented employees was nation for Merck’s motive for this, revolved around “labor
unlawfully motivated in violation of Section 8(a)(3) and (1) of troubles.” Specifically, it was alleged that Killen told the union
the Act.7 He also contends that Killen’s explanation of the representatives that Merck’s decision was based on safety prob-
motive to Vallo independently violated Section 8(a)(1) of the lems and labor-related activities at Rahway and West Point.
Act. I have found that, contrary to the General Counsel’s claim,
I. SECTION 8(A)(3) Killen did not tell union representatives Vallo or Little that
labor problems at Rahway or West Point, or safety problems,
A. The Wright Line standard were the reason that union-represented employees were exclud-
The Respondent and the General Counsel agree that Wright ed from the appreciation day. And I do not find that there is
Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. evidence to support the claim that it was the reason.
1981), cert. denied 455 U.S. 989 (1982), provides the appropri- Rather, I have found that Zingales, the individual who effec-
ate analytical standard for assessing the alleged 8(a)(3) viola- tively recommended the exclusion of the union-represented
tion.8 employees from appreciation day, admitted that Merck’s mo-
Wright Line is the Supreme Court-approved analysis in tive was that it could not provide the benefit unilaterally and
8(a)(1) and (3) cases turning on employer motivation. See that it would not offer the unions the benefit because in recent
NLRB v. Transportation Management Corp., 462 U.S. 393, 395 years the unions had refused to accommodate Merck’s mid-
(1983) (approving Wright Line analysis). In Wright Line, the contract requests for “minor changes” in payroll and 401(k)
Board determined that the General Counsel carries his burden administration and holiday issues. Killen also testified that he
by persuading by a preponderance of the evidence that union or told Vallo this.9
other protected conduct was a motivating factor (in whole or in This latter admitted motive proves a violation under Wright
part) for the employer’s adverse employment action. Proof of Line. Clearly the unions’ refusal to accede to the employer’s
such unlawful motivation can be based on direct evidence or request for midterm changes was protected activity. R.E.C.
can be inferred from circumstantial evidence based on the rec- Corp., 296 NLRB 1293, 1293 (1989) (“The employees’ con-
ord as a whole. Robert Orr/Sysco Food Services, 343 NLRB duct in refusing to reopen the contract was clearly protected”;
1183, 1184 (2004), enfd. 184 Fed. Appx. 476 (6th Cir. 2006); finding employer violated Act by “laying off employees be-
Embassy Vacation Resorts, 340 NLRB 846, 848 (2003). cause they refused to reopen the parties’ collective-bargaining
Under the Wright Line framework, as subsequently devel- agreement and agree to midterm modification”). The Respond-
oped by the Board, the elements required in order for the Gen- ent obviously knew about it, as Zingales raised it. The credited
eral Counsel to satisfy his burden to show that protected activi- evidence shows that Merck refused to offer union employees
ty was a motivating factor in an employer’s adverse action are the day off because of and in retaliation for the unions’ protect-
union or protected activity, employer knowledge of that activi- ed activity of refusing to bargain midterm contractual changes
ty, and union animus on the part of the employer. Adams & desired by the Respondent. And, as discussed below, Zingales’
Associates, Inc., 363 NLRB No. 193, slip op. at 6 (2016); Lib- explanation that appreciation day could not be offered unilater-
ertyville Toyota, 360 NLRB 1298, 1301 (2014); enfd. 801 F.3d ally is not a convincing or accurate explanation for not offering
767 (7th Cir. 2015). the benefit.
Such showing proves a violation of the Act subject to the fol- To be clear, absent an unlawful motivation, there is no re-
lowing affirmative defense: the employer, even if it fails to quirement that an employer provide represented and unrepre-
sented employees with the same benefits. At the same time,
7 Any conduct found to be a violation of Sec. 8(a)(3) would also offering or providing of differing benefits may be a violation of
discourage employees' Sec. 7 rights, and thus, is also a derivative viola- Section 8(a)(3) and (1) of the Act, if such conduct is motivated
tion of Sec. 8(a)(1) of the Act. Chinese Daily News, 346 NLRB 906, by antiunion considerations.
934 (2006), enfd. 224 Fed. Appx. 6 (2007).
8 I note that there is no allegation that the Respondent’s refusal to
9 I note that the Respondent admits that Zingales told Killen this
provide union-represented employees appreciation day was “inherently was the rationale for not offering the benefit to employees, and admits
destructive of Section 7 rights.” See NLRB v. Great Dane Trailers, that Killen told this to Vallo. See R. Br. at 13–14.
Inc., 388 U.S. 26, 33 (1967). Accordingly, I do not consider the issue.
MERCK, SHARP & DOHME CORP. 15
Under Shell Oil Co., 77 NLRB 1306, 1310 (1948), and its ployees in terms of the work performed or job done at Merck.)
progeny, “an employer may, during the course of collective- To call this a “bargaining strategy” does not avoid the fact
bargaining negotiations, treat represented and unrepresented that its motivation is discrimination against the union-
employees differently when providing new benefits, so long as represented employees for the purpose of penalizing them be-
the disparate treatment is not unlawfully motivated.” Arc cause of the union’s (lawful) refusal to accept previous and
Bridges, Inc., 362 NLRB 455, 456 (2015). For instance, in Sun unrelated employer-offered terms and conditions of employ-
Transport Inc., 340 NLRB 70, 72 & fn. 12 (2003), the Board ment. Calling it a “bargaining strategy” insulates the conduct
dismissed an 8(a)(3) allegation based on an employer offering from the proscriptions of the Act no more than would the layoff
less severance pay to union-represented employees during col- of a group of employees in retaliation for their refusal to enter-
lective bargaining than it was offering to unrepresented em- tain midterm contractual changes. R.E.C. Corp., 296 NLRB at
ployees. The Board explained that 1293.
The difference between the Respondent’s motives here, and
the mere fact that different offers are made or that different the situation where an employer is motivated by a lawful “bar-
benefits are provided does not, standing alone, demonstrate gaining strategy,” is plainly demonstrated by comparing the
unlawful motive. Although an employer is not free to dis- instant situation to that in Sun Transport, supra—a case relied
criminatorily afford represented employees less benefits than upon by the Respondent.
unrepresented employees, i.e., in order to discourage support In Sun Transport, in late 1996, the employer began successor
for the union, the record does not establish that the Respond- negotiations with its employees’ union for a new labor agree-
ent engaged in such conduct here. . . . Rather, the Respond- ment. In March 1997, the employer decided to divest itself of
ent's offer was made in an effort to induce concessions as part the business and thereafter the successor agreement negotia-
of the give-and-take during negotiations over a comprehen- tions also encompassed the issue of a severance package. At
sive successor agreement. the same time, the employer offered to its unrepresented em-
See also, B.F. Goodrich Co., 195 NLRB 914, 915 (1972) ployees a severance package more lucrative than what it was
(“Thus, in the absence of discriminatory motives in withholding offering at the bargaining table to the union for the unionized
a benefit from these employees in order to encourage or dis- employees. In April or May 1997, a tentative agreement was
courage their membership in or representation by a union, we reached on the severance and the successor contract, both of
find no merit in the General Counsel's contention that Re- which were voted down by the union’s membership. Subse-
spondent violated Section 8(a)(3) by granting the profit-sharing quent negotiations focused mostly on severance, as the sale was
benefit only to unrepresented employees”). underway. The employer refused the union’s offer that the
The issue then, is whether the Respondent's decision not to same severance provided the unrepresented employees be pro-
provide the day off to its represented employees (except to vided. The unit employees again rejected a tentative severance
those it felt it contractually required to provide it to) was un- package that was inferior to that provided the unrepresented
lawfully motivated. In other words, was the decision not to employees, and ultimately the union-represented employees
provide appreciation day because of the unions’ past refusal to received no severance for their jobs. In a November 1997 letter
accommodate the employer’s midterm demands for changes to the union, the employer’s vice-president Fretz explained that
retaliation for union activity? in formulating its severance proposal the employer “had con-
The Respondent, while admitting (R. Br. at 13–14) this as a sidered how responsive the ‘represented group’ had been to the
“rationale,” calls it part of a “bargaining strategy,” of the kind Respondent’s efforts to contain costs and improve its competi-
permitted by the Board in Sun Transport, supra, and points to tive position,” noting that in the recent negotiations “the parties
Zingales’ testimony that he did not think it “a good bargaining had failed to reach agreement on some of the Respondent’s
strategy to give away [a] holiday.” But the Respondent’s deci- proposals, and this resulted in continued high, uncompetitive
sion and actions manifestly were not a bargaining strategy, at costs” which was a factor “when we determine whether we are
least not one that the Board legitimates. Indeed, appreciation willing to offer severance packages to a given group of em-
day, and the decision not to provide the appreciation day off to ployees, as well as having some impact on our evaluation of the
the represented employees, was not made during or as part of total additional costs we are willing to sustain.” Sun Transport,
collective bargaining. It was not refused as part of an ongoing supra at 71.
effort “to force concessions in other areas.” Sun Transport, The administrative law judge in Sun Transport found that the
supra at 72. To the contrary, the decision was made in direct employer’s position constituted an admission that the Respond-
and admitted retaliation for the union’s past lawful refusal to ent retaliated against the Union for its bargaining positions.
bargain midterm changes to the collective-bargaining agree- The Board reversed, but did so with reasoning that makes clear
ment. In other words, the evidence shows that the employer, by that Merck’s motives here are unlawful.
its own admission, decided to maintain its position of withhold- In Sun Transport, the Board rejected the judge’s conclusion
ing a new benefit that it was providing worldwide to all nonrep- that the employer had offered less severance pay to represented
resented employees (and even represented employees outside of employees in retaliation for the union’s bargaining positions,
the U.S.) in direct response to the unions’ past collective- because the Board found that the employer’s motive for offer-
bargaining strategy of refusing to entertain midterm contractual ing less to the union employees was the cost of bargaining posi-
changes. (There is, of course, no claim by Merck that union tions taken by the union in negotiations. Specifically, the
employees were less deserving of appreciation than other em- Board in Sun Transport rested its conclusion on its finding that
16 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
the employer attributed its “high, uncompetitive costs” and ciation day.
“uncompetitive situation” to the union bargaining positions, In short, in this case Merck’s motivations bear none of the
and indicia relied upon by the Board in Sun Transport to find the
discrimination between represented and nonrepresented em-
those high costs, in turn, were a factor considered by the Re-
ployees to be merely a part of a lawful bargaining strategy.
spondent in formulating its severance proposal. Thus, we
cannot say that the [union’s] bargaining position itself was the Merck’s admitted and credited motive for not providing union-
basis for the severance pay offer. represented employees the appreciation day benefit constitutes
straightforward evidence of discriminatory motive under the
Further, even if the severance pay offer was based upon the Act.
Union's bargaining position during the negotiations for a suc-
b. The July 28 announcement effectively blames the employees’
cessor contract, we would still find no violation of the Act.
union status for the exclusion from appreciation day
With respect to this Union, the matter of severance pay arose
during comprehensive bargaining for a new contract. The There is, however, more. The July 28 announcement to em-
Respondent sought concessions in late 1996 and continued to ployees, by itself, adds to the weight of the discriminatory in-
seek them in 1997. And, in 1997, this bargaining was inter- ference. While announcing that appreciation day “applies
twined with the bargaining over severance pay. The Re- globally where” permitted “and, as required, subject to consul-
spondent sought to use the severance pay issue to force con- tation with employee representatives,” the announcement adds
cessions in other areas. More particularly, the Respondent, as the condition that “[t]his additional day off does not apply to
it explained in the November 17 Fretz letter, was tying its po- those in the U.S. who are covered by a collective bargaining
sition on severance to the Union's refusal "during the entire agreement.”
period" (i.e., during the negotiations in 1996 and 1997 for a Thus, while appreciation day covers employees, even when
successor collective-bargaining agreement) to make conces- it requires “consultation with employee representatives,” the
sions in other areas. only employees who are excluded from receiving the benefit
are (U.S.) employees who are union-represented and covered
. . . . The Respondent's severance offer was but one element
by a collective-bargaining agreement. This explanation “essen-
of the "competing forces and counteracting pressures" inher-
tially encouraged employees to blame” the union and their un-
ent in the collective-bargaining process. Consequently, the ion status for the failure to receive the benefit and is an inde-
Respondent's consideration of the Union's bargaining posi- pendent indicia of discriminatory motive. Arc Bridges, 362
tions does not demonstrate antiunion animus. [citations omit-
NLRB 455, 457 (finding this to be an indicia of discriminatory
ted.] motive).10
Merck’s motive for refusing to provide the appreciation day c. The Respondent’s unilateral-action rationale is a pretext
off to represented employees does not square with the rationale
that saved the employer in Sun Transport. Unlike in Sun The strength of the General Counsel’s Wright Line case is al-
Transport, here there is no evidence that Merck’s position was so increased by the transparently pretextual nature of the Re-
based on “costs” or “uncompetitiveness” that resulted from the spondent’s claim that it did not provide the paid day off to un-
unions’ refusal to grant what Killen described as “minor chang- ion employees because it would violate the law to do so unilat-
es” during the contract term. Thus, directly contrary to the erally without consulting with the employees’ union.
distinction drawn by the Board in Sun Transport, here, the un- Zingales testified that it was his belief that it would be a vio-
ions’ position on the midterm changes—not the costs that lation of the law to unilaterally provide appreciation day to
Merck incurred because of them—was the basis for failing to employees with a collective-bargaining agreement. He told
give the appreciation day off. “Thus,” unlike in Sun Transport, Zeller this was the grounds for excluding union-represented
here “we [can] say that the [union’s] bargaining position itself employees from appreciation day. Merck executives Goggin
was the basis for the [employer’s] offer.” and Frazier reiterated this after July 28, when they issued
Moreover, the Board’s second rationale in Sun Transport for statements trying to calm the anger over the union employees’
finding no violation is also inapposite here. Unlike in Sun exclusion, but reiterating the exclusion of union employees
Transport, the failure to include the union-represented employ- from the benefit.
ees in appreciation day was not “intertwined” with ongoing However, I reject as meritless, and untrue, the Respondent’s
bargaining. Unlike in Sun Transport, Merck was not using the contention that a motive for failing to provide the appreciation
appreciation day “issue to force concessions in other areas.” To day to union-represented employees was the belief that it would
the contrary, Merck sought and gained nothing from its position violate the Act to do so unilaterally. If that were its motivation
of not providing appreciation day off to the union-represented
10 I note that although unalleged in this case, “it is settled that it is a
employees. In a very real sense, it consciously refused to use
appreciation day as a bargaining chip with the unions. Merck’s violation of Sec. 8(a)(1) for an employer to tell employees that they
will be losing a benefit because their status as union represented makes
position on appreciation day was not “but one element of the them ineligible for the benefit.” Covanta Energy Corp., 356 NLRB
‘competing forces and counteracting pressures’ inherent in the 706, 714 (2011); Niagara Wires, Inc., 240 NLRB 1326, 1327 (1979) (it
collective-bargaining process.” Rather, this was pure retalia- is a per se violation of Sec. 8(a)(1) for employer to maintain a pension
tion for the unions’ positions taken in the recent past, and bar- plan that by its terms excludes from coverage employees who are ‘sub-
gaining was neither sought nor granted by Merck over appre- ject to the terms of a collective bargaining agreement.”
MERCK, SHARP & DOHME CORP. 17
for not providing the benefit, it would have offered it to the Merck’s refusal to offer appreciation day to union-
unions as a proposal for the unions to consider, and—as the represented employees had nothing at all to do with and was
local union presidents indicated they would—accept. Indeed, not hindered by any alleged belief that it would be unlawful to
remarkably, in view of Merck’s argument, its July 28 an- provide the benefit unilaterally. The pretextual nature of this
nouncement of appreciation day stated that the benefit “applies claim, repeated by Zingales, Goggin, and Frazier, adds to the
globally where business operations and local practices/laws strength of the General Counsel’s prima facie case of discrimi-
permit, and, as required, subject to consultation with employee nation. El Paso Electric Co., 355 NLRB 428, 428 fn. 3 (2010)
representatives or works councils.” (Emphasis added.) Thus, (finding of pretext raises an inference of discriminatory motive
as Merck itself recognized, any concern with granting the bene- and negates rebuttal argument that it would have taken the
fit unilaterally to union-represented employee would (and easi- same action in the absence of protected activities); All Pro
ly could) be overcome by “consultation with employee repre- Vending, Inc., 350 NLRB 503, 508 (2007); Rood Trucking Co.,
sentatives.” As the Board has explained it: 342 NLRB 895, 897–898 (2004), citing Laro Maintenance
To the extent that the Respondent is arguing that it had to Corp. v. NLRB, 56 F.3d 224, 230 (D.C. Cir. 1995) (“When the
withhold the increase to avoid violating Sec. 8(a)(5), there is employer presents a legitimate basis for its actions which the
no merit in that position either. Had the Respondent wanted factfinder concludes is pretextual . . . . the factfinder may not
to give its represented employees the same 3-percent increase only properly infer that there is some other motive, but that the
that it gave the unrepresented employees, it could have simply motive is one that the employer desires to conceal—an unlaw-
asked the Union for permission. If the Union consented, the ful motive . . . .”) (internal quotation omitted).
Respondent could have granted the increase without violating Accordingly, I find that the General Counsel has more than
Sec. 8(a)(5). met his prima facie case and proven that discriminatory animus
Arc Bridges, 362 NLRB 455, 459 fn. 18 (Board’s emphasis.) motivated the Respondent’s decision not to provide apprecia-
Merck’s argument that the benefit could not be provided uni- tion day for the union-represented employees.
laterally is a flimsy, unbelievable, and nonresponsive excuse 2. The Respondent’s Wright Line rebuttal
for its unwillingness to offer the benefit. It is a purported ra-
tionale contradicted by its own notice explaining how it will The remaining issue under Wright Line is whether the Re-
provide appreciation day in instances where “local practic- spondent has demonstrated that it would have denied union-
es/laws” require consultation with a union. Thus, Merck’s represented employees appreciation day even in the absence of
“unilateral action” defense does nothing to explain why it main- the protected union conduct that motivated its actions. Under
tained that the benefit would not “apply to those in the U.S. the circumstances, it is not a serious claim. I have already con-
cluded, for the reasons discussed above, that the Respondent’s
who are covered by a collective bargaining agreement.”
The truth is, its July 28 announcement notwithstanding, claim that it could not unilaterally provide the benefit was a
Merck never intended to consult with its U.S. “employee repre- pretext. Notably where “the evidence establishes that the prof-
sentatives” so that the benefit could be provided to U.S. union- fered reasons for the employer’s action are pretextual—i.e.,
represented employees. Killen was told this directly by Zin- either false or not actually relied upon—the employer fails by
gales on August 3, just days after the announcement, and he definition to show that it would have taken the same action for
was told why: the unions’ past bargaining position. And on those reasons, regardless of the protected conduct.” David Saxe
August 21, Merck conclusively informed its plant managers Productions, 364 NLRB No. 100, slip op. at 4 (2016); Rood
that there would be no bargaining over the matter. The pur- Trucking, 342 NLRB at 898, quoting Golden State Foods
ported restriction on the unilateral grant of benefits was not the Corp., 340 NLRB 382, 385 (2003). However, the Respondent
reason for the decision not to offer union-represented employ- raises some additional arguments that I address below.
ees appreciation day. For all these reasons, Zingales’ testimony a. Bargaining strategy as a defense
that it was the reason is not credible. Notably, as Killen testi- Zingales testified that, “in addition” to the unilateral-action
fied, upon hearing this “unilateral action” rationale on August issue, he believed that it was “not consistent with bargaining
3, he immediately recognized that “clearly I knew that wouldn’t strategy” to provide the union-represented employees addition-
be a sufficient response” . . . to go [take] back to the site.” He
knew that dog wouldn’t hunt. And I agree. It begs the ques- and it reached an agreement with Local 4–575 to include the union-
tion, which is to say it is an obvious pretext. represented employees. R. Exh. 6. In 2006, after contract negotiations
While I do not reach or adopt the General Counsel’s argu- had concluded with a multi-union council that bargained as a group
ment that Merck had what amounted to a past practice of pass- with Merck at that time, Merck decided to make Martin Luther King
ing on to union-represented employees benefits given to non- Jr.’s birthday a company holiday. The then-director of labor relations,
represented employees, the past instances in the record of offer- Glen Guior, called Vallo and said, “Ed, I want you to officially ask me
ing new benefits to union employees demonstrate that Merck as the Merck Inter-union council to have a Martin Luther King’s birth-
day as an additional holiday for all the sites represented by the coun-
knew how to provide union employees a new benefit when it
cil.” Vallo at first thought that Merck was not being serious, but, as-
wanted to do so.11 sured he was, Vallo asked and Guior agreed, and the union employees
thereafter received the holiday along with Merck unrepresented em-
11 Thus, on January 2, 1998, Merck gave represented and unrepre-
ployees. I cite these examples, not as evidence of an official past prac-
sented employees the day off in addition to the scheduled holidays off. tice, but as evidence that if Merck wanted to provide a benefit to union
In 2009, Merck again decided to make January 2, a company holiday employees, it knew how to do so.
18 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
al benefits that were not in their labor agreement. Zingales had b. The 8(d) defense
a preference for dealing with the unions at the different Merck The Respondent also argues that it cannot be found to have
locations individually, and felt that “master bargaining is not in discriminated for not giving union-represented employees the
the best interest of the company and not effective on a location- day off because the benefit is not in the collectively-bargained
by-location basis.” In 2014, under Zingales’ leadership, Merck agreements. Obviously, the contracts do not provide for appre-
ended the remnants of multi-union bargaining “master” bar- ciation day, it not having been contemplated at the time the
gaining—already by that time reduced to two locations from contracts were negotiated. The Respondent contends (R. Br. at
five or six—and Zingales was resistant to any type of group 24) that it may
bargaining with the unions. Moreover, Zingales explained, “I
don’t think that coming off a significant labor negotiations in
rest on its rights under Section 8(d) [of the Act] not to be re-
Elkton and then Rahway”—negotiations he described as “long
quired “to discuss or agree to any modification of the terms
drawn out” and “difficult,”—and with the West Point contract
and conditions contained in a contract for a fixed period . . .”
expiring in nine months on April 30, “that it was a good bar-
See 20 U.S.C. 158(d). Similar to the strategy of Merck’s un-
gaining strategy to give away [a] holiday.”
ions not to consider negative adjustments to their contractual
The Respondent suggests that, even absent its unlawful mo-
terms and conditions of employment until negotiations for
tive, it would not have offered the union employees the day off
new agreements were underway, the Company’s strategy was
because it might smack of the multiunion coordinated bargain-
to wait until negotiations to consider proposing additional
ing that Zingales opposed and that Merck had moved away
days off.
from. This is unconvincing. Merck did not need to engage in
multiunion bargaining in order to offer the unions the day off.
Doubling down on this view, the Respondent devotes an en-
An email or phone call to each union would have sufficed if
tire subsection of its brief (R. Br. at 29–30) to the argument that
Merck was worried that offering the day off en masse would be
Section 8(d) provides “a statutory right” not to bargain over the
misinterpreted as a revival of multiunion bargaining—a con-
appreciation day benefit and that
cern that, frankly, seems contrived. Appreciation day was to
show appreciation to the employees by providing an unplanned
paid day off. Union-represented employees were left out of to find a Section 8(a)(3) violation based on an employer’s re-
this—not because Merck says they were unappreciated. But fusal to discuss a mid-term modification would essentially
rather, to “pay back” the unions for a lack of cooperation in read Section 8(d) out of the Act. An employer either has a
recent years. It is highly implausible, and entirely unproven, right under Section 8(d) to rest on its contractual rights or it
that union-represented employees were left out of appreciation does not.
day so that Merck could avoid any implication that it was vio-
lating its principles against multi-union bargaining. The Respondent’s contention is wrong. Section 8(d) of the
Similarly, I reject as untrue the general suggestion of Zin- Act, by its terms, defines what it means to “bargain collective-
gales that his “philosophy” or “bargaining strategy” precluded ly,” the refusal to do so being an unfair labor practice pursuant
any changes for union employees during the term of a contract. to Section 8(a)(5) of the Act. But nothing in Section 8(d) or
Indeed, we know that Zingales had requested midcontractual Section 8(a)(5) speaks to whether an employer’s actions violate
changes from the unions and was unhappy that the unions re- Section 8(a)(3)—which is what is at issue here—or whether the
fused. Thus, it appears that this asserted live-and-die-by-the- employer is acting “by discrimination in regard to . . . any term
contract “strategy” emerged only in response to and in retalia- or condition of employment to encourage or discourage mem-
tion for the unions’ previous rebuff of Merck’s entreaties. That bership in any labor organization.” The Respondent’s conten-
would taint it, were it true. However, I do not believe it. Nota- tion that Section 8(d) immunizes it from discrimination claims
bly, Zingales did not offer this as a contemporary explanation is without support in law or logic. Employees working under a
for Merck’s actions to Killen, to Zeller, or to anyone else, as far collective-bargaining agreement can be discriminated against
as the record shows. The first time the explanation was offered without regard to whether an employer’s actions also violate a
was at the hearing in a description by Zingales of his internal bargaining obligation, or, for that matter, contractual obliga-
thinking on the matter. This type of unverifiable assertion is tions. The statutory duty to bargain and the statutory duty not
not the most compelling evidence. All the less so because it to discriminate are distinct and independent obligations under
appears to be a transparent effort to track cases in which the the Act.12
Board permits the employer leeway to grant or deny new bene-
12 While uncommon, instances of a discriminatory application of
fits as part of a “bargaining strategy.” I do not believe it.
The Respondent’s motivation for not providing, for not of- benefits by an employer during a collective-bargaining agreement that
do not violate the Sec. 8(a)(5) bargaining obligation do arise. See, e.g.,
fering—for not permitting—union-represented employees to Reebie Storage and Moving Co., 313 NLRB 510 (1993) (employer did
have appreciation day off was because the unions failed to ac- not violate Sec. 8(a)(5) by failing to apply contract to all eligible unit
cede to the Respondent’s will and make midterm changes to the members but only to union members, but “identical” conduct violated
contract requested in the past. The Respondent has failed to Section 8(a)(3) based on unlawful discrimination of providing greater
demonstrate that it would have taken this action in the absence remuneration and superior benefits to union employees than to nonun-
of the past protected activities of the unions. ion employees); enft. denied on other grounds 44 F.3d 605 (7th Cir.
1995); Esmark, Inc., 315 NLRB 763 (1994) (Board does not find factu-
MERCK, SHARP & DOHME CORP. 19
I note that under the Respondent’s theory of 8(a)(5) and 8(d) (R. Br. at 18; R. Exh. 1 at 3), correctly, that Wright Line and its
immunity for discriminatory conduct, an employer would be assessment of the Respondent’s motivation is the appropriate
free to announce to employees that, for the express purpose of basis for deciding this case.
encouraging union-represented employees to decertify their In short, employers are not required to engage in mid-
unions, it will provide $1000 to each of its unorganized em- contract bargaining (over matters waived in a collectively-
ployees, and not to any of its union-represented employees bargained agreements). But an employer cannot refuse to do so
working under a collective-bargaining agreement. The differ- for unlawful reasons, in this case, in admitted retaliation for a
ence between this hypothetical case and Merck’s actions is one union’s previous bargaining conduct. 13
of degree not kind. Both cases turn on an assessment of the C. The allegations relied upon to find the violation are closely-
motives for not providing the benefit to union-represented em- related to the pleadings and fully litigated
ployees. In both cases a violation of 8(a)(3) is the correct con-
clusion if the employers’ actions were unlawfully motivated. While the General Counsel argues on brief (as I have found)
The existence of a contract does not shield the employer from “that even Killen’s own version of his conversation with [un-
liability for antiunion discrimination. ion] officials demonstrates that Merck’s decision to exclude
Critical to its error is Merck’s assumption of equivalence be- was unlawfully motivated” (GC Br. at 23 fn. 12) (citation omit-
tween the unions’ past refusal to accede to requests for mid-
13 Respondent’s position is meritless without regard to its premise
contract changes, and Merck’s refusal to offer the appreciation
day. The comparison is specious, and goes to the heart of that it had no duty to bargain about appreciation day and did not violate
the Act by refusing to bargain about this new appreciation day. How-
Merck’s misreading of its obligations under the Act. Respond-
ever, I note that even this premise is in question and unproven. No
ent’s suggestion of “tit-for-tat” does not permit it to discrimi- bargaining violation is alleged, but Merck’s assumption that it could
nate. What we have here is a decision to exclude union- not have been is far from certain. It rests on the untested and nonevi-
represented employees from a day off offered to all other em- dent claim that because the unions’ contracts with Merck contain other
ployees because of their unions’ previous lawful bargaining holidays, the unions have clearly and unmistakably waived the right to
conduct. Section 8(a)(3) proscribes an employer from making bargain about appreciation day (which is not a holiday in the contract).
discriminatory decisions about employee terms and conditions However, waiver is not lightly inferred and must be “clear and unmis-
that are motivated by employees’ union affiliation. By contrast, takable.” See Metropolitan Edison v. NLRB, 460 U.S. 693, 708 (1983).
The party asserting waiver must establish that the parties “unequivocal-
the union conduct for which Merck is retaliating is free of any
ly and specifically express[ed] their mutual intention to permit unilat-
suggestion of discrimination, or even any statutory basis for eral employer action with respect to a particular employment term,
condemning such discrimination against an employer were it notwithstanding the statutory duty to bargain that would otherwise
proved. apply.” Provena St. Joseph Medical Center, 350 NLRB 808, 811
Whether or not the General Counsel should have or could (2007). As the Board explained in Empire Pacific Industries, 257
have mounted an 8(a)(5) case against Merck does not implicate NLRB 1425, 1425 (1981):
the issue of whether the Respondent engaged in unlawfully As further set forth in B. F. Goodrich, an employer is under a duty to
motivated discrimination by refusing to provide the day to em- bargain during the existence of a collective-bargaining agreement con-
cerning any mandatory subject of bargaining which has not been specif-
ployees. Indeed, the Respondent concedes as much by agreeing
ically covered in the contract and which the union has not clearly and
unmistakably waived. [Footnote omitted.] Thus, where an employer
al basis to pierce veil and hold parent of employer liable for 8(a)(5) grants a benefit to a group of unrepresented employees, if the benefit is
bargaining violation for abrogation of contract but finds parent liable a mandatory subject of bargaining which is not specifically covered by
under Sec. 8(a)(3) for same sham closing and reopening of facility). the represented employees’ collective-bargaining agreement and has
More commonly, but also illustrative of the point, are cases in which not been clearly and unmistakably waived by the union, the employer is
both an 8(a)(5) and an 8(a)(3) violation is found based on the same or obligated to bargain with the union concerning the implementation of
similar conduct, but the violations are separately analyzed and inde- this benefit for the represented employees. In such a situation, the
pendent of one another. See, e.g., Covanta Energy Corp., 356 NLRB failure to bargain in good faith with the union over the benefit granted
706 (2011) (elimination of corporate bonus and recommended annual constitutes a violation of Section 8(a)(5) and (1) of the Act. L.M. Berry
wage increase separately analyzed and independently found to be viola- and Company, 254 NLRB 42 (1981) and B. F. Goodrich, supra. Fur-
tion of Sec. 8(a)(3) and 8(a)(5)); Phelps Dodge Mining Co., 308 NLRB thermore, implementing such a benefit for unrepresented employees
985 (1992) (separate analysis of 8(a)(3) and 8(a)(5)), enft. denied 22 while refusing to bargain with the union over the benefit is also a viola-
F.3d 1493 (10th Cir. 1994). Alternatively, sometimes the Board finds it tion of Section 8(a)(1).
unnecessary to reach an 8(a)(3) allegation because, having found the See also B.F. Goodrich, 195 NLRB at 915 (“As found by the Trial
same conduct to have been an 8(a)(5) violation, an additional violation Examiner, the Union did not waive its right to be consulted about the
would not materially affect the remedy. See, e.g., Alamo Rent-A-Car, institution of this type of benefit during the parties' negotiation of the
362 NLRB 1091, 1093 fn. 8 (2015), 831 F.3d 534 (D.C. Cir. 2016); existing collective-bargaining agreement. By thereafter instituting the
Bryant & Stratton Business Institute, 321 NLRB 1007, 1007 fn. 4 plan for its unorganized employees while unlawfully refusing to bar-
(1996). And vice-versa. See, e.g., Advanced Life Systems, 364 NLRB gain with the Union as the statutory representative of its warehouse
No. 117, slip op. at 3 fn. 8 (2016) (Board does not reach 8(a)(5), be- employees, Respondent deprived the latter employees of their right to
cause, having found the same conduct to have been an 8(a)(3), addi- bargain collectively with respect to obtaining this additional benefit.
tional violation would not materially affect the remedy. Sutter Rose- As such conduct interferes with, restrains, and coerces the unit employ-
ville Medical Center, 348 NLRB 637, 637 fn. 7 (2006) (same). But in ees in the exercise of their right to bargain collectively through repre-
no case does the Board hold that the lack of finding of an 8(a)(5) viola- sentatives of their own choosing, we conclude that Respondent thereby
tion precludes the finding of an 8(a)(3) violation. further violated Section 8(a)(1)”).
20 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
ted), I recognize that the General Counsel chiefly argued that evidence, offered in good faith, without his endorsement, and in
the “labor troubles” at Rahway and West Point were the moti- an effort to answer Vallo’s questions about Merck’s motives for
vation for the Respondent’s unlawful conduct. This was based a decision with which Killen disagreed. It might seem counter-
on the alleged comments of Killen to Vallo and Little that I intuitive to condemn as a separate violation of the Act a man-
have not credited. More formally, the complaint (GC Exh. 1(u) ager’s frank discussion with a union representative about an
at para. 9) attributed Merck’s actions generally to “concerted employer’s motives for an adverse decision, all the more so
activities” of employees represented by the charging party un- when it reveals an otherwise hidden and unlawful motive. Yet,
ions, an allegation that covers Zingales’ credited admission of Killen’s intentions aside, as they must be put, the message
Merck’s motivation for excluding union employees from ap- would have reasonable tendency to interfere with Vallo’s pro-
preciation day, which Killen then conveyed to Vallo. While the tected activity. Specifically, his decisionmaking in his repre-
credited motivation is different from that primarily advanced by sentative capacity when next approached by management seek-
the General Counsel at trial, it is within the scope of the pled ing midterm concessions. His participation as local union pres-
allegation. (See GC Exh. 1(u) at para. 9). Thus, there is no due ident is core Section 7 activity, and there is a reasonable ten-
process issue, as the complaint alleged, and, indeed, the trial dency that informing an employee that these decisions have led
focused on whether the Respondent’s motivation for its failure to retaliation against bargaining unit members will interfere,
to provide union-represented employees with the appreciation threaten, and coerce. I recognize that it does not appear that
day violated Section 8(a)(3) of the Act. That is to say, the find- Vallo (or Little) recalls Killen saying this—they testified to a
ing of unlawful motivation “is closely connected to the subject different allegedly unlawful explanation by Killen—but under
matter of the complaint and has been fully litigated.” Per- the objective test employed by the Board, that is not the rele-
gament United Sales, Inc., 296 NLRB 333, 334 (1989), enfd. vant inquiry. I believe Killen. I believe he said it and accurate-
920 F.2d 130 (2d Cir. 1990); Casino Ready Mix, Inc., 335 ly reported what he was told by Zingales. In doing so, he vio-
NLRB 463, 464 (2001), enfd. 321 F.3d 1190 (D.C. Cir. 2003). lated the Act. Alamo Rent-A-Car, 362 NLRB 1091, 1092 fn. 3
And that is particularly so here, where “the finding of a viola- (managers’ statements to unit employees that they were losing
tion is established by testimonial admissions of the Respond- STD benefits “because of their union contract” but that nonun-
ent’s own witnesses.” Id. The Respondent, on direct examina- ion employees would retain a form of the benefit violates
tion of its own witness, supplied the answer to the question of 8(a)(1)); Goya Foods of Florida, 347 NLRB 1118, 1131 (2006)
the motive for its actions and proved the unlawful motivation. (comment that employees would be unable to participate in the
There was no objection to the relevant evidence; indeed, it was company’s pension plan if they were union members violates
repeated and reaffirmed on cross-examination (Tr. 265) and 8(a)(1)).14
reasserted in the Respondent’s brief. (See R. Br. at 13−14.) It CONCLUSIONS OF LAW
is no defense to an allegation of unlawfully motivated conduct
to admit to a (slightly) different unlawful motive for the con- 1. The Respondent, Merck, Sharp & Dohme Corp., is an
duct. employer within the meaning of Section 2(2), (6), and (7) of the
I find that the Respondent violated Section 8(a)(3) and (1) of Act.
the Act by discriminatorily failing to provide appreciation day 2. The Respondent violated Section 8(a)(3) and (1) of the
to union-represented employees. Act by discriminatorily denying union-represented employees a
paid day off in retaliation for union activity protected by the
II. SECTION 8(A)(1)
Act.
The Board will find a supervisory statement to violate Sec- 3. The Respondent violated Section 8(a)(1) of the Act by in-
tion 8(a)(1) of the Act where it “would reasonably tend to inter- forming employees that the Respondent was denying union-
fere with, threaten, or coerce employees in the exercise of their represented employees a paid day off in retaliation for union
rights under Section 7 of the Act.” Waste Stream Management, activity protected by the Act.
315 NLRB 1099, 1100 (1994). 4. The unfair labor practices committed by the Respondent
It is well-settled that in evaluating the remarks, the Board affect commerce within the meaning of Section 2(6) and (7) of
does not consider either the motivation behind the remarks or the Act.
their actual effect. Miller Electric Pump & Plumbing, 334 REMEDY
NLRB 824, 825 (2001); Joy Recovery Technology Corp., 320
NLRB 356, 365 (1995), enfd. 134 F.3d 1307 (7th Cir. 1998). Having found that the Respondent has engaged in certain un-
Rather, “the basic test for evaluating whether there has been a fair labor practices, I find that it must be ordered to cease and
violation of Section 8(a)(1) is an objective test, i.e., whether the
14 While Killen’s statement differed from the one alleged by the
conduct in question would reasonably have a tendency to inter-
fere with, restrain, or coerce employees in the exercise of their General Counsel, it occurred in the same time frame, concerned the
same subject (i.e., the Respondent’s motive for excluding union-
Section 7 rights, and not a subjective test having to do with
represented employees from appreciation day), was made by the same
whether the employee in question was actually intimidated.” supervisor to the same union representative, and came into evidence
Multi-Ad Services, 331 NLRB 1226, 1227–1228 (2000) during Killen’s direct testimony through his admission. The matter “is
(Board's emphasis), enfd. 255 F.3d 363 (7th Cir. 2001). closely connected to the subject matter of the complaint and has been
Killen’s explanation to Vallo about why Merck refused to fully litigated.” Pergament United Sales, Inc., 296 NLRB at 334; Ca-
provide the union employees with appreciation day was, by all sino Ready Mix, Inc., 335 NLRB at 464.
MERCK, SHARP & DOHME CORP. 21
desist therefrom and to take certain affirmative action designed (b) Discriminatorily denying union-represented employees a
to effectuate the policies of the Act. paid day off in retaliation for union activity protected by the
The Respondent shall make whole the union-represented Act.
employees for any losses of earnings and other benefits they (c) In any like or related manner interfering with, restrain-
suffered as a result of its discriminatory denial to them of the ing, or coercing employees in the exercise of the rights guaran-
paid day off known as appreciation day. teed them by Section 7 of the Act.
The make-whole remedy shall be computed in accordance 2. Take the following affirmative action necessary to effec-
with Ogle Protective Service, 183 682 (1970), enfd. 444 F.2d tuate the policies of the Act.
502 (6th Cir. 1971), with interest as prescribed in New Hori- (a) Make union-represented employees who were denied the
zons, 283 NLRB 1173 (1987), and compounded daily as pre- paid day off known as appreciation day whole for any losses of
scribed in Kentucky River Medical Center, 356 NLRB 6 (2010). earnings and other benefits suffered as a result of the discrimi-
In accordance with Don Chavas, LLC d/b/a Tortillas Don Cha- nation against them, in the manner set forth in the remedy sec-
vas, 361 NLRB 101 (2014), the Respondent shall compensate tion of the decision in these cases.
any employees adversely affected by the unlawful conduct for (b) Preserve and, within 14 days of a request, or such addi-
the adverse tax consequences, if any, of receiving lump sum tional time as the Regional Director may allow for good cause
backpay awards, and in accordance with AdvoServ of New Jer- shown, provide at a reasonable place designated by the Board
sey, Inc., 363 NLRB No. 143 (2016), the Respondent shall, or its agents, all payroll records, social security payment rec-
within 21 days of the date the amount of backpay is fixed, ei- ords, timecards, personnel records and reports, and all other
ther by agreement or Board order, file with the Regional Direc- records, including an electronic copy of such records if stored
tor for Region 6 a report allocating backpay to the appropriate in electronic form, necessary to analyze the amount of backpay
calendar year for each employee. The Regional Director will due under the terms of this Order.
then assume responsibility for transmission of the report to the (c) Within 14 days after service by the Region, post at its fa-
Social Security Administration at the appropriate time and in cilities where any union-represented employee was denied the
the appropriate manner. paid day off known as appreciation day copies of the attached
The Respondent shall post an appropriate informational no- notice marked “Appendix.”16 Copies of the notice, on forms
tice, as described in the attached appendix. This notice shall be provided by the Regional Director for Region 6, after being
posted at all of the Respondent’s facilities employing union- signed by the Respondent's authorized representative, shall be
represented employees who were denied appreciation day, and posted by the Respondent and maintained for 60 consecutive
at such facilities shall be posted wherever the notices to em- days in conspicuous places, including all places where notices
ployees are regularly posted for 60 days without anything cov- to employees are customarily posted. In addition to physical
ering it up or defacing its contents. In addition to physical post- posting of paper notices, notices shall be distributed electroni-
ing of paper notices, notices shall be distributed electronically, cally, such as by email, posting on an intranet or an internet
such as by email, posting on an intranet or an internet site, site, and/or other electronic means, if the Respondent customar-
and/or other electronic means, if the Respondent customarily ily communicates with its employees by such means. Reasona-
communicates with its employees by such means. In the event ble steps shall be taken by the Respondent to ensure that the
that, during the pendency of these proceedings the Respondent notices are not altered, defaced, or covered by any other mate-
has gone out of business or closed a facility involved in these rial. In the event that, during the pendency of these proceed-
proceedings, the Respondent shall duplicate and mail, at its ings, the Respondent has gone out of business or closed any
own expense, a copy of the notice to all current employees and facility involved in these proceedings, the Respondent shall
former employees employed by the Respondent at any time duplicate and mail, at its own expense, a copy of the notice to
since September 4, 2015. When the notice is issued to the Re- all current employees and former employees employed by the
spondent, it shall sign it or otherwise notify Region 6 of the Respondent at any time since September 4, 2015.
Board what action it will take with respect to this decision. (d) Within 21 days after service by the Region, file with the
On these findings of fact and conclusions of law and on the Regional Director for Region 6 a sworn certification of a re-
entire record, I issue the following recommended15 sponsible official on a form provided by the Region attesting to
ORDER the steps that the Respondent has taken to comply.
Dated, Washington, D.C. December 20, 2016
The Respondent Merck, Sharp & Dohme Corp., Kenilworth,
New Jersey, its officers, agents, successors, and assigns, shall APPENDIX
1. Cease and desist from NOTICE TO EMPLOYEES
(a) Informing employees that it is denying union- POSTED BY ORDER OF THE
represented employees a paid day off in retaliation for union NATIONAL LABOR RELATIONS BOARD
activity protected by the Act.
16 If this Order is enforced by a judgment of a United States court of
15 If no exceptions are filed as provided by Sec. 102.46 of the appeals, the words in the notice reading "Posted by Order of the Na-
Board’s Rules and Regulations, the findings, conclusions, and recom- tional Labor Relations Board" shall read "Posted Pursuant to a Judg-
mended Order shall, as provided in Sec. 102.48 of the Rules, be adopt- ment of the United States Court of Appeals Enforcing an Order of the
ed by the Board and all objections to them shall be deemed waived for National Labor Relations Board."
all purposes.
22 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government WE WILL make union-represented employees to whom we
discriminatorily denied the paid day off known as appreciation
The National Labor Relations Board has found that we violated day whole, with interest, for any loss of earnings or other bene-
Federal labor law and has ordered us to post and obey this no- fits suffered as a result of our discrimination against them.
tice. MERCK, SHARP & DOME CORP.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union The Administrative Law Judge’s decision can be found at
Choose representatives to bargain with us on your be- www.nlrb.gov/case/06-CA-16315 or by using the QR code
half below. Alternatively, you can obtain a copy of the decision
Act together with other employees for your benefit and from the Executive Secretary, National Labor Relations Board,
protection 1015 Half Street, S.E., Washington, D.C. 20570, or by calling
Choose not to engage in any of these protected activi- (202) 273-1940.
ties.
WE WILL NOT tell you that we are denying union-represented
employees a paid day off in retaliation for union activity pro-
tected by the Act.
WE WILL NOT discriminatorily deny union-represented em-
ployees a paid day off in retaliation for union activity protected
by the Act.
WE WILL NOT, in any like or related manner interfere with,
restrain, or coerce you in the exercise of the rights listed above.