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In May 2020, with the world fearful of what devastation would come from the COVID-19 pandemic, NBCUniversal CEO Jeff Shell sent out an email to employees. The first quarter was “quite strong,” he told them, but given how the virus was forcing the company to close theme parks and suspend movie productions, across-the-board reductions were necessary. In particular, Shell pointed to recent merit salary increases, and stated the bumps for employees making more than $100,000 would be canceled.
That decision to rescind wage increases was flagged by an administrative law judge at the National Labor Relations Board this past February. Without any hype whatsoever, ALJ Kenneth Chu concluded that NBCUniversal had violated labor law by unilaterally making pay changes without giving the NewsGuild an opportunity to bargain. On July 15, the full NLRB accepted that decision and ordered the restoration of merit wage increases for editors, reporters, producers, writers, production assistants and others at NBC News Digital, including those working on the web side at Today and MSNBC.
But NBCU isn’t letting it go without further challenge. On Thursday, the media company filed an appeal at the DC Circuit Court of Appeals.
NBC is hardly the only company to make hard pay decisions in light of the pandemic. But in many respects, this type of fight is new for the company — and not just because it is contending with a federal labor agency which has swung to the pro-union side with Joe Biden in office. That’s because until recently, many at NBC News weren’t represented at all by any union. That changed in 2019 when a group of editorial employees on the company’s digital side won certification for a union after a 90-to-40 vote. The NewsGuild of New York became the bargaining unit.
“This case is really simple. As a direct result of our successful organizing in 2019, workers now have a seat at the table, and NBC no longer has the power to unilaterally reduce wages without bargaining,” said Tate James, a video editor at NBC News and unit chair at NBC Digital NewsGuild. “We were ready and willing to discuss the need for reductions — and requested to bargain over this issue multiple times — but management refused. NBC has now hired a union-busting law firm to take another shot at an appeal, possibly spending more on legal fees than they would in back pay owed. The company has an obligation to bargain, and we will continue to hold them to it.”
In a brief to the NLRB, NBC argued that the decision to cancel wage increases for those making six figures impacted a “fraction” of its workforce and wasn’t designed to “unfairly or unlawfully target union members or to subvert Charging Party’s status as collective bargaining representative.”
NBC’s lawyers added, “Instead, that decision was part of a much larger, companywide initiative – which impacted thousands of employees – to cut costs in the face of an unprecedented worldwide pandemic that has had a dramatic negative economic impact on large swaths of the global economy and Respondent’s overall business. Based on existing Board caselaw, Respondent and its News Digital subunit was not required to bargain to impasse over this decision; indeed Charging Party’s demand for preferential treatment on this topic in the face of the thousands of other employees whose salary increases were also rolled back fails as a matter of fact and as a matter of law.”
After examining how the company had annually increased wages by 3 percent and heeding some precedent (Raytheon Network Centric Systems), Wu narrowed the focus to past practices by the employer that could constitute a term and condition of employment. Were annual pay increases truly discretionary? “The issue here is whether the employer’s action amounted to a material change or the mere continuation of the status quo,” he wrote.
Answering, he continued, “I find that [NBCU] has failed to show that the merit pay rollback in May 2020 was consistent with a longstanding past practice. I agree that the annual merit planning process was a long-standing past practice (at least for the previous 5 consecutive years). However, I find that the merit pay rollback in June 2020 was a meaningful departure and varied significantly and materially from this past practice.”
Having been formally ordered last month to cease and desist from changing the conditions of employment at the company, and making the impacted employees whole for loss of earnings during the wage rollback, NBCU is petitioning for appellate review. (See here.)
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