Peerless Publications, Inc. (Pottstown Mercury)

334 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Peerless Publications, Inc. (Pottstown Mercury) and Newspaper Guild of Greater Philadelphia, Local 10. Case 4-CA-6985 26 March 1987 SUPPLEMENTAL DECISION AND ORDER BY CHAIRMAN DOTSON AND MEMBERS JOHANSEN AND STEPHENS On 9 August 1977 the National Labor Relations Board issued its Decision and Order in this pro- ceeding.' The administrative law judge had found that the Respondent's Code of Ethics and General Office Rules, unilaterally promulgated with their constituent penalties, constituted- mandatory sub- jects of bargaining. On exceptions to that decision, the Board affirmed in part and reversed in part the administrative law judge's conclusions. Thus, the Board agreed that the Respondent was obligated to bargain over its General Office Rules, and that its refusal to do so was violative of Section 8(a)(5) and (1) of the Act. Consistent with the Board's decision in the Capital Times2 case, however, a panel ma- joirty concluded, contrary to the administrative law judge, that the Respondent's Code of Ethics, as a whole, did not affect terms and conditions of employment so as to constitute a mandatory sub- ject of bargaining, but that the Code's "penalty provision, in and of itself, directly affects employ- ment security and, therefore, is a mandatory sub- ject of bargaining." In the majority's view, certain portions of General Office Rule 11, like the sub- stantive provisions of Respondent's Code of Ethics, were "essentially based on ethical considerations designed to enhance the credibility of Respondent's newspaper." Thus the cited portions of General Office Rule 11 (231 NLRB at 245) were excepted from the Board's Order requiring the Respondent to bargain over the General Office Rules, but were treated together with the Code of Ethics in finding that the Respondent was obligated to bargain only to the extent of a penalty provision for violation of such rules. On a petition for review by the Guild, the Charging Party, and an application for enforcement of its Order by the Board, the United States Court of Appeals for the District of Columbia Circuit on 13 August 1980, issued its decision in the consoli- dated cases.3 The court agreed with the Board that 1 231 NLRB 244. a 223 NLRB 651 The Board issued its decision in Capital Times subse- quent to the administrative law ,fudge's decision in this case 8 Newspaper Guild Local 10 (Peerless Publications) v. NLRB, 636 F.2d 550 (D.C. Cit. 1980) "protection of the editorial integrity of a newspa- per lies at the core of publishing control" (636 F.2d at 560), and concluded that in order to preserve these qualities, a news publication may, subject to certain constraints, establish reasonable rules de- signed to prevent activity by employees which would "directly compromise their standing as re- sponsible journalists and that of the publication for which they work as a medium of,integrity." (Id. at 561.) However, the court deemed inadequate the rationale used by the Board majority to address the "problems presented by the tension between the employees' right to bargain collectively and the right of the owner of a-newspaper to safeguard the credibility of his publication from injury through improper conflicts of interest." (Ibid.) The court also found, contrary to the Board majority, that constituent penalties for violation of rules cannot reasonably "be separated for Labor Act purposes from the substantive provisions which they are de- signed to enforce." (Ibid.). Accordingly, the court remanded this proceeding to the Board for deter- minations on the issues in light of the principles enunciated by the court. On 19 November 1980 the Board, through its Executive Secretary, notified the parties that pursu- ant to the remand by the court of appeals, all par- ties might file statements of position with respect to the issues raised by the remand. Thereafter, the Re- spondent, the General Counsel, and the Newspaper Guild each filed a statement of position. The National Labor Relations Board has delegat- ed its authority in this proceeding to a three- member panel. On further examination of the issues presented in light of the entire record, including the court's opinion and the parties' statements of positions, the Board has decided to modify its earlier Decision and Order in this proceeding. First, our consideration of the issues leads us to conclude, in agreement with the court, that, as a general principle, rules and their constituent penal- ties should not be artificially severed from each other for purposes of collective bargaining under the Act. This is so because the attachment of ex- press or implied penalties for breach of the substan- tive content is what transforms rules or codes of conduct from mere expressions of opinion or aspi- ration into terms and conditions of employment. Also, we are convinced that the impracticality of requiring parties to attempt to bargain over frag- ments, rather than the issues as a whole-i.e., in a vacuum-is not conducive to promoting stability 283 NLRB No. 54 PEERLESS PUBLICATIONS or effectiveness in collective-bargaining relation- ships.4 We reaffirm the view that protection of the "edi- torial integrity of a newspaper lies at the core of publishing control,"5 and that in order to preserve such, a news publication is free to establish reason- able rules designed to prevent its employees from engaging in activity which would "directly com- promise their standing as responsible journalists and that of the publication for which they work as a medium of integrity," without necessarily being re- quired to bargain initially. It follows from this privilege-which is directly incident to a newspa- per's integrity-that the newspaper will be similar- ly exempt from mandatory bargaining about disci- plinary action for employee breach of the basic rule.6 It must be emphasized, however, that "[t]he degree of, control which may be exercised by a publication in this regard is not open-ended, but must be narrowly tailored to the protection of the core purposes of the enterprise." (Id. fn. 36.) In light of the above, and keeping in mind the lan- guage of the court, we deem it appropriate at this point to indicate the general standards under which such unilateral action is to be considered. The concept of "terms and conditions of employ- ment" is itself a broad one-and deliberately so, for Congress intended it to be broad.? Thus, rules or codes of conduct governing employee behavior with constituent penalty provisions for breach nec- essarily fall well within the definitional boundaries of "terms and conditions" of employment. In deter- mining whether an employer may nevertheless impose such a term and condition of employment without prior bargaining, we begin with the princi- ple that "labor law presumes that a matter which affects the terms and conditions of employment will be a subject of mandatory bargaining."" In order to overcome this presumption, therefore, it is clear initially that the subject matter sought to be addressed by the employer must go to the "protec- tion of the core purposes of the enterprise." When that is the case, the rule must on its face be (1) nar- rowly tailored in terms of substance, to meet with particularity only the employer' s legitimate and necessary objectives, without being overly broad, ' Accordingly, our earlier decision in this case and the decision in Cap- ital Times, supra, are overruled to the extent that they are inconsistent with our holding here. 5 Although there may be exceptions to this general proposition (see, e.g., the court's opinion at fn. 33), we see no indication that such are in- volved here. s As noted by Judge MacKinnon, there may be exceptional cases where in excessive penalty renders a rule mandatordy bargainable. s See discussion at sec. VI of the court's opinion, and accompanying fn. 39-41 8 Id at sec. VI; see Chemical Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157 at 178-179 (1971) 335 vague, or ambiguous; and (2) appropriately limited in its -applicability to affected employees to accom- plish the necessarily limited objectives. Turning to the provisions at issue in this case, we have reexamined the. Respondent's General Office Rules and Code of Ethics under these criteria and in light of the court's opinion, and we find that the Ethics Code as a whole, as well as the General Office Rules promulgated by the Respondent, do not withstand such scrutiny and must be rescinded in their entirety. First, in affirming our holding as to the Office Rules (other than those portions of Rule 11 treated with the Code of Ethics)' we reiter- ate our fording that they directly affect terms and conditions of employment, and the conclusion that nothing contained therein is "properly excludable from bargaining as being inherently in the , exclu- sive" prerogative of management such as would exempt it from the normal requirements of manda- tory bargaining. (See id. at fn. 38.) With respect to the Code of Ethics, we note that the court deemed it necessary to distinguish be- tween those provisions of the Code which, while central to the Mercury's interest in the preser- vation of its legitimate managerial preroga- tives, affect the employees only minimally, and those which, although not essential to the pub- lication's freedom ' to conduct its business, do have a significant impact on the employees. [Id. at 561.] Moreover, when there is a conflict between an employer's freedom to manage his business in areas involving the basic direction of the en- terprise and the right of the employees to bar- gain on subjects which affect the terms and conditions of their employment, a balance must be struck, if possible, which will take [into] account [the] relative importance of the proposed actions to the two parties."' [Id. at 562, citing Machinists Local 1304 (Fibreboard Corp.) v. NLRB, 379 U.S. 203 at 223 (1964), and Chemical Workers v. Pittsburgh Plate Glass Co., 404 U.S. at 119.]9 9 With respect to the former statement, it is clear there are multiple permutations depending on the number and complexity of the variables used. Thus, a simple matrix using dust the two suggested by the court, i.e., placing the essentiality or nonessentialtty to preservation of the em- ployer's interest on one axis, and the resultant minimal or significant impact of the rule on employees on the other, would generate four com- binations which can be summarized as follows: (1) nonessential to em- ployer: minimal impact on employee, (2) nonessential to employer : signif- icant impact on employees; (3) essential to employer: minimal impact on employees; (4) essential to employer: significant impact on employees. Where, 'as here, the penalty for breach of a rule consists of discipline in- cluding discharge (either discretionary or automatic) it is clear that the Continued 336 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Assessing the Respondent's Code of Ethics under the framework discussed above, we find it-unneces- sary at this time to decide specifically which, if any, of the ethics code provisions may be deemed restricted to subject matter necessary to the "pro- tection of the core purposes of the enterprise" so as to overcome the initial presumption of mandatory bargainability. For assuming arguendo that they would overcome the presumption, we conclude that -the Code as actually promulgated by the Re- spondent must fall in any event because it is defi- cient in other respects. Thus, the entire Code, to- gether with the office rules of which the Code was deemed a part, applies on its face to "all employ- ees," without appropriate limitation to designated categories of employees (e.g., reporters and editori- al personnel as well as maintenance and circulation employees) as to which requirements differ. More- over, each employee, with no prior requirement or opportunity for bargaining by the employees' rep- resentatives, is required by the Code's "Pledge" section to "make himself known now and state his reasons," in the event the employee does not "wholly and fully subscribe" to the tenets of the Code, in effect requiring the employee to bypass the collective-bargaining representative and bargain directly with the Employer. In addition the code provisions are in our view substantially overly broad as promulgated rather than narrowly tailored in terms of their content to meet with particularity what may be legitimate objectives of the Respond- ent. Also, like the court, we perceive significant differences between a gift from a news source which is designed to influence news coverage on the one hand, and a "freebie"' given relatively in- discriminately-particularly so when as frequently occurred at the Respondent, such freebies or tick- ets were actually distributed by the editor. Similar- ly, where an employer wishes to address the sub- ject matter of an employee's secondary employ- ment, we deem it incumbent on the employer to distinguish between employment which would con- stitute a clear and improper conflict of interest, and that which does not. We find no such distinction made here by the Respondent. With respect to the Respondent's attempts to curtail other outside activities of its employees, i.e., "political involvement, holding public office, serv- ice ' in community organizations," or failure to matter affects the "terms and conditions " of employees, and also that the impact 'is "significant"' Hence none of the code provisions involved here fall in the third category Combinations one and two would also appear eliminated because matters not essential to the Employer's direction of the enterprise would not in any event overcome the initial presumption of mandatory bargainability. Thus, it would seem that the court was con- templating only the fourth combination above in its statement concerning "balancing." "conduct their personal lives," outside the office hours so as not to reflect adversely on the Re- spondent or cause "loss of business or patronage," we concur in the court's pointed comment that such regulation "interferes substantially with the civil and economic rights of the employees (and indeed their private lives)." (Id. at 563.)10 The preservation of editorial integrity does not neces- sarily dictate a requirement of employee abstention from political participation or service in communi- ty organizations. Nor is there evident a need for a general directive aimed at regulating the employ- ees' conduct of their personal lives, with its inher- ent potential for "misuse against those with whose political, social, religious, or union beliefs a pub- lisher may disagree," (ibid. at fn. 50), or a prohibi- tion of activities such as an "iffy" ban that hangs like a sword and squarely presents "inescapable" constitutional problems.1' In the instant case, we find that Respondent has not demonstrated on the record that its regulation of such areas was sup- ported by "clearly defined, directly necessary com- pensating benefits in terms of the employer's legiti- mate concerns." Id. These deficiencies of overbreadth are in our view further compounded by the open-ended nature of the Rules and Code as written by the Re- spondent. The General Office Rules (of which the Code became a part) stated: These rules include, but are not limited to, all of the office rules for your department. Your department head may add to these rules more specific rules which apply to your de- partment. Violation of office rules may be deemed cause for discharge except in the case of those rules where discharge is automatic. Thus, in addition to the other infirmities dis- cussed above, the Respondent in its rules purported to invest itself ' with the sole discretion to later impose additional rules subjecting employees to dis- cipline, including discharge, without regard to their content or the presumptive requirements of manda- tory bargaining. This caveat-itself unilaterally promulgated without bargaining, which we have previously ordered rescinded-cannot in our view serve to justify a subsequent avoidance of the pre- sumptive requirements of bargaining about terms and conditions of employment, including the deli- cate and sensitive matters encompassed within the Code's provisions. We also note that the Code of Ethics provisions here contain some vagueness and certain ambigu- 10 See also Peerless Publications, supra, 231 NLRB at 248-249. i r See id at 248 fns 10 and 14, and related text. PEERLESS PUBLICATIONS 337 ities, as well as possibly conflicting requirements. For example, paragraph 4 of the "ETHICS" sec- tion provides in part that "Newspaper people will seek news that serves the public interest, despite the obstacles." Section 2 under "FAIR PLAY," on the other hand, -provides that "The news media must guard against invading a person's right to pri- vacy." Without intruding into a debate concerning what constitutes "the public interest" in this con- text (a term which we note is not defined in the Code), or seeking to define what best "serves" that end, we find it unclear from the Code itself wheth- er the "obstacles" which must be overcome under the "ETHICS" section exclude or encompass, the "right to privacy" which must be guarded under section 2 of "FAIR PLAY." Nor is it clear wheth- er either or both of the above is intended to be sub- ordinate to paragraph 1 of "ACCURACY AND OBJECTIVITY" which provides: "Truth in all things is our ultimate goal." Paragraph 3 of the latter section asserts: "There is no excuse for inac- curacies or lack of thoroughness," while "FAIR PLAY," section 4, states that "It is the duty of news media to make prompt and complete correc- tion of their errors"; thereby potentially presenting employees with a "Hobson's" choice: i.e., promptly correct an error and be subject to discharge, since there is "no excuse for inaccuracies," or not do so and be likewise subject to discharge for failing to make a "prompt and complete correction" of the error. We find it likewise unclear whether the "public's right to know of events of public impor- tance and interest" as the "overriding mission" of the Respondent's publication, is intended to include an obligation to report stolen documents, or wheth- er there is any limitation on the assertion in the "ETHICS" section that newspaper people must be free of obligation "to any interest other than the public's right to know," or to what extent employ- ees must acknowledge the ethic of protecting con- fidential sources of information. We note also that what may be deemed to have "news value" by one publisher may be considered "insignificant" or pan- dering to "morbid curiosity" by another. Infirmities such as these may be deemed tolera- ble where an employer wishes merely to announce its own goals as an adjunct to attempting to im- prove the quality of its publication or enhancing its credibility. But they are not acceptable where, as here, an employer seeks unilaterally to impose such imprecision on, employees in the form of rules which affect their terms and conditions of employ- ment, and for breach of which the employees may be subject to discharge. In the latter situation, where the impact on employees is self-evident and significant, the necessary remedy is rescission. Ac- cordingly, we .shall revise our prior Order in this proceeding, as set out in full below, to require that the provisions of the Code of Ethics, as well as the General Offices Rules, be rescinded in their entire- ty. We wish to make it clear that our decision does not preclude the Respondent from establishing completely new ethics code and rules provisions subject to the standards set forth above, where the content of such rules is necessary to the credibility of the institution and/or the quality of its product, and the rules themselves are narrowly tailored, un- ambiguous, and designate the category of employ- ees to whom applicable; provided, however, that such statements of ethics and rules requirements do not improperly impinge on the relevant rights of the affected employees. ORDER The National Labor Relations Board orders that the Respondent, Peerless Publications, Inc. (Potts- town Mercury), Pottstown, Pennsylvania, its offi- cers, agents, successors, and assigns, shall 1. Cease and desist from (a) Refusing to bargain collectively with the Newspaper Guild of Greater Philadelphia;, Local 10, on request, about terms and conditions of em- ployment embodied in the Respondent's General Office Rules and Code of Ethics, including their penalty provisions. (b) Unilaterally promulgating or changing rules or codes of conduct, including any penalty provi- sions, which affect wages or terms and conditions of employment, or enforcing, such unilaterally pro- mulgated rules or penalty provisions, without giving the Union notice and the opportunity to bar- gain. (c) Unilaterally implementing the penalty provi- sions of the present Code of Ethics by warning let- ters. (d) In any like or related manner interfering with, restraining, or coercing employees in the ex- ercise of the rights guaranteed them by Section 7 of the Act, or interfering with the Union's efforts to bargain collectively with it with respect to the following appropriate unit: -1 All employees in the Editorial, Circulation, Maintenance, Telephone Operator and Adver- tising Departments, but excluding the manag- ing editor, city editor, circulation manager, confidential secretary to the Publisher, county string correspondents, commission advertising salesmen, and the national, display and classi- fied advertising managers. 338 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2. Take the following affirmative action neces- sary to effectuate the policies of the Act. (a) Rescind in writing the General Office Rules and the Code of Ethics, including the penalty pro- visions. (b) On request, bargain with the Union concern- ing terms and conditions of employment to be con- tained in any revised General Office Rules or Code of Ethics, including any penalty provisions, and, if an agreement is reached, embody it in a signed agreement. (c) Rescind and withdraw from personnel or other files maintained by the Respondent copies of or references to the warning letters issued to em- ployees Dougherty and Smith dated 16 May 1974, and rescind any other disciplinary actions which resulted from enforcement of this penalty' provi- sion, notify the employees in writing that this has been done and that the discipline will not be used against them in any way, and make employees whole for any losses' they may have suffered by reason, of the enforcement of these penalty provi- sions in the manner set forth in the remedy section of the Board's decision in this proceeding, reported at 231 NLRB 244 (1977). (d) Preserve and, on request, make available to the Board or its agents for examination and copy- ing, all payroll records, social security payment records, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay due under the terms of this Order. (e) Post at its place of business in Pottstown, Pennsylvania, copies of the-attached notice marked "Appendix." 12 Copies of the notice, on forms pro- vided by the Regional Director for Region 4, after being signed by the Respondent's authorized repre- sentative, shall be posted by the- Respondent imme- diately upon receipt and maintained for 60 consec- utive days in conspicuous places including all places where notices to employees are customarily posted. Reasonable steps shall be taken by the Re- spondent to ensure that the notices are not altered, defaced, or covered by any other material. (f) Notify the Regional Director in writing within 20 days from the date of this Order what steps the Respondent has-taken to,comply. MEMBER STEPHENS, concurring. I concur in the result. is If this Order is enforced by a judgment of a United States court of appeals, the words in the notice reading "Posted by Order of the Nation- al Labor Relations Board" shall read "Posted Pursuant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX NOTICE To EMPLOYEES POSTED BY ORDER OF-THE NATIONAL LABOR RELATIONS BOARD, An Agency of the United States Government The National Labor Relations Board has found that we violated the National Labor Relations Act and has ordered us to post and abide by this notice. WE WILL NOT refuse to bargain collectively with the Newspaper Guild of Greater Philadelphia, Local 10, on request, about terms and conditions of employment embodied in the General Office Rules and Code of Ethics. WE WILL NOT unilaterally promulgate rules or codes of conduct or penalty provisions affecting' wages or terms and conditions of employment, or enforce such unilaterally promulgated rules or pen- alty provisions, without giving the Union notice and the opportunity to bargain. WE WILL NOT unilaterally implement the penalty provisions of the Code of Ethics by warning let- ters. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exer- cise of the rights guaranteed you by Section 7 of the Act, or interfere with the Union's efforts to bargain collectively with us with respect to the fol- lowing appropriate unit: All employees in the Editorial, Circulation, Maintenance, Telephone Operator and Adver- tising Departments, but excluding the manag- ing editor, city editor, circulation manager, confidential secretary to the Publisher, county string correspondents, commission advertising salesmen, and, the national, display and classi- fied advertising managers. WE WILL rescind in writing the General 'Office Rules and the Code of Ethics, including penalty provisions. WE WILL, on request, bargain with the ,Union concerning terms and conditions of employment to be contained in any new General Office Rules and Code of Ethics, including any applicable penalty provisions, and, if agreement is reached, embody it in a signed agreement. WE WILL rescind and withdraw from per'son'nel or other files copies of, or references to, the warn- ing letters issued to employees Dougherty and Smith, dated 16 May 1974 and any other discipli- nary actions which resulted from our enforcement of these penalty provisions and notify the employ- ees in writing that this has been done and that the discipline will not be used against them in any way. PEERLESS PUBLICATIONS 339 WE WILL make the employees whole -for any losses they may have suffered by reason of any en- forcement of such penalty provisions, with interest. PEERLESS PUBLICATIONS, INC. (POTTSTOWN MERCURY)