Advanced Life Systems, Inc.

ADVANCED LIFE SYSTEMS, INC. 1711 364 NLRB No. 117 Advanced Life Systems, Inc. and International Asso- ciation of EMT’s and Paramedics. Cases 19– CA–096464 and 19–CA–096899 August 27, 2016 DECISION AND ORDER BY CHAIRMAN PEARCE AND MEMBERS MISCIMARRA AND HIROZAWA On May 2, 2014, Administrative Law Judge Michael A. Rosas issued the attached decision. The General Counsel and the Respondent both filed exceptions. The Respondent also filed a supporting brief, the General Counsel filed an answering brief, and the Respondent filed a reply brief. The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the decision and the record in light of the exceptions and briefs and has decided to af- firm the judge’s rulings, findings,1 and conclusions in part2 and to adopt the recommended Order as modified and set forth in full below.3 1 The Respondent has excepted to some of the judge’s credibility findings. The Board’s established policy is not to overrule an adminis- trative law judge’s credibility resolutions unless the clear preponder- ance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings. 2 We reject the Respondent’s challenges to the authority of the Re- gional Director and the Acting General Counsel to act in this case. In doing so, we do not rely on Belgrove Post Acute Care Center, 359 NLRB 633 (2013), and Bloomingdale’s, Inc., 359 NLRB 1015 (2013), cited by the judge. Instead, we note that the Respondent is incorrect in asserting that Regional Director Ronald K. Hooks was appointed on January 6, 2012. Although Regional Director Hooks’s appointment was announced on January 6, 2012, the Board approved the appoint- ment on December 22, 2011, at which time it had a quorum. Regarding the Acting General Counsel’s authority, in its answer to the complaint, the Respondent raised as an affirmative defense that the Acting General Counsel was improperly “appointed.” For the reasons set forth below, we find no merit in that argument. At the outset, we note that under the Federal Vacancies Reform Act (FVRA), 5 U.S.C. §§ 3345 et seq., a person is not “appointed” to serve in an acting ca- pacity in a vacant office that otherwise would be filled by appointment by the President, by and with the advice and consent of the Sen- ate. Rather, either the first assistant to the vacant office performs the functions and duties of the office in an acting capacity by operation of law pursuant to 5 U.S.C. § 3345(a)(1), or the President directs another person to perform the functions and duties of the vacant office in an acting capacity pursuant to 5 U.S.C. § 3345(a)(2) or (3). On June 18, 2010, the President directed Lafe Solomon, then Direc- tor of the NLRB’s Office of Representation Appeals, to serve as Acting General Counsel pursuant to subsection (a)(3)–the senior agency em- ployee provision. Under that provision, Solomon was eligible to serve as Acting General Counsel at the time the President directed him to do so. See Hooks v. Kitsap Tenant Support Services, Inc., 816 F.3d 550, 556 (9th Cir. 2016); SW General, Inc. v. NLRB, 796 F.3d 67, 73 (D.C. Cir. 2015), cert. granted, 136 S. Ct. 2489 (2016). Thus, Solomon properly assumed the duties of Acting General Counsel and we find no Facts The issues in this case arose after the National Emer- gency Medical Services Association (Union) initiated an organizing campaign among the Respondent’s emergen- cy medical technicians (EMTs), paramedics, and dis- patchers in July 2012.4 The Respondent starts its new hires at a relatively low wage rate because of the exten- sive amount of company-specific training required. The credited evidence shows that, as a result, the Respondent informed employees upon their hire to expect periodic wage increases once every 6 months plus Christmas bo- nus payments. In fact, a substantial majority of employ- ees received wage increases of at least 25 cents an hour at least twice a year from August 2009 to January 2012. In addition, except for 1 year, the Respondent annually granted Christmas payments to employees ranging in value from $50 to $500. However, at some point after employees began organizing, but before the August 15- 16 election, the Respondent’s owner and president, Wil- liam Woodcock, told employee Matthew Schauer that “he wasn’t for us going with the Union” and that the Re- merit in the Respondent’s affirmative defense that the Acting General Counsel was improperly “appointed.” We acknowledge that the decisions in Kitsap and SW General also held that Solomon lost his authority as Acting General Counsel on January 5, 2011, when the President nominated him to be General Counsel. Kitsap, above, at 555; SW General, above, at 78. Although that question is still in litigation, we find that subsequent events have rendered moot any argument that Solomon’s alleged loss of authority after his nomination precludes further litigation in this matter. On September 25, 2015, General Counsel Richard F. Griffin, Jr., is- sued a Notice of Ratification in this case that states, in relevant part, I was confirmed as General Counsel on November 4, 2013. After ap- propriate review and consultation with my staff, I have decided that the issuance of the complaint in this case and its continued prosecution are a proper exercise of the General Counsel’s broad and unreviewa- ble discretion under section 3(d) of the Act. My action does not reflect an agreement with the appellate court rul- ing in SW General. Rather, my decision is a practical response aimed at facilitating the timely resolution of the charges that I have found to be meritorious while the issues raised by SW General are being re- solved. Congress provided the option of ratification by expressly ex- empting “the General Counsel of the National Labor Relations Board” from the FVRA provisions that would otherwise preclude the ratifica- tion of certain actions of other persons found to have served in viola- tion of the FVRA. (Citation omitted.) For the foregoing reasons, I hereby ratify the issuance and continued prosecution of the complaint. In view of the independent decision of General Counsel Griffin to continue prosecution of this matter, we reject as moot the Respondent’s affirmative defense challenging the circumstances of Solomon’s “ap- pointment” as Acting General Counsel. 3 We shall amend the remedy and modify the judge’s recommended Order to conform to his unfair labor practice findings and conclusions and to the Board’s standard remedial language. We shall substitute a new notice to conform to the Order as modified. 4 All dates hereinafter are in 2012 unless otherwise indicated. 1712 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD spondent “would not be able to give us raises if we brought a union in.” The Union won the election, and on August 24, the Board’s Regional Office certified it as the unit employ- ees’ exclusive collective-bargaining representative. Thereafter, the Respondent unilaterally discontinued granting unit employees wage increases of at least 25 cents an hour approximately every 6 months and Christ- mas payments yearly. In December, employee Lenny Ugaitaga asked Woodcock why he had not received his expected pay raise. Woodcock responded that his lawyer had advised him that he needed to freeze employees’ terms and conditions of employment, including pay rais- es, “because of the whole Union deal.” In January 2013, Schauer and fellow employee Cole Gravel questioned Woodstock about why the Respondent had stopped granting pay raises since employees unionized. The two employees explained that they understood it was to be business as usual until contract negotiations had con- cluded. Woodcock replied that the pay raises had been discretionary prior to the election, but the Respondent now had to negotiate them with the Union. Discussion I. 8(a)(1) and (3) ALLEGATIONS We agree with the judge that the Respondent violated Section 8(a)(1) by making coercive statements to unit employees before and after the representation election about discontinuing the periodic wage increases and Christmas payments.5 The judge found, and we agree, that the Respondent also violated Section 8(a)(3) and (1) by discontinuing the wage increases and Christmas pay- ments because of unit employees’ union activity. An employer violates Section 8(a)(3) and (1) if it withholds promised wage increases for discriminatory reasons re- gardless of whether it had an established practice of 5 We find, in agreement with the judge, that the Respondent violated Sec. 8(a)(1) by telling unit employee Schauer that the Respondent would be unable to give wage increases if unit employees voted for the Union. In doing so, however, we do not rely on the judge’s citation to Milum Textile Services Co., 357 NLRB 2047 (2011); no party ex- cepted to the relevant finding in that case and therefore the issue was not before the Board. Instead, we rely on Twin City Concrete, Inc., 317 NLRB 1313, 1318 (1995) (implied threat to withhold wage increases where employer told employees that it would have to negotiate over promised wage increases if the union won the election). For the same reason, although we agree with the judge that the Respondent unlawful- ly stated in December 2012 that the Respondent could not give a raise “because the Union was there” or “because of the whole Union deal,” we do not rely on the judge’s citation to First Student, Inc., 341 NLRB 136 (2004), and Illiana Transit Warehouse Corp., 323 NLRB 111 (1997). We find it unnecessary to pass on the judge’s finding that the Respondent violated Sec. 8(a)(1) in January 2013 by telling employees that he did not need to give wage increases during contract negotia- tions, because it does not affect the remedy. granting such wage increases in the past. See KAG-West, LLC, 362 NLRB 981, 983 & fn. 10 (2015); Arc Bridges, Inc., 362 NLRB 455, at 459 (2015) (employer violated Section 8(a)(3) and (1) by withholding wage increase from represented employees because they chose to un- ionize). In KAG-West, LLC, above, the Board explained the underlying principle: an employer may not punish employees for selecting union representation by denying them planned increases. See Aluminum Casting & Engi- neering Co., 328 NLRB 8, 16 (1999), enfd. in relevant part and remanded 230 F.3d 286 (7th Cir. 2000). The credited evidence shows that the Respondent as- sured employees, upon being hired, that they would re- ceive periodic wage increases and Christmas payments and, in fact, regularly granted them. However, after the Union won the election, the Respondent ceased provid- ing unit employees the periodic wage increases and Christmas payments. In determining whether the Re- spondent’s conduct violated Section 8(a)(3) and (1), we agree with the judge that the appropriate analytical framework is Wright Line, 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), approved in NLRB v. Transportation Manage- ment Corp., 462 U.S. 393 (1983). We further agree with the judge that the General Counsel satisfied his initial burden under Wright Line by showing union activity by the employees, employer knowledge of that activity, and union animus on the part of the employer. See Mesker Door, Inc., 357 NLRB 591, 592 & fn. 5 (2011).6 There is no dispute that the Respondent knew that employees had engaged in union activity. In finding that the Re- spondent demonstrated union animus, we rely on the Respondent’s contemporaneous 8(a)(1) violations. See Lucky Cab Co., 360 NLRB 271, 274 (2014). In addition to showing animus generally, these inaccurate statements directly linked discontinuance of the wage increases with employees’ unionization. Specifically, before the elec- tion, Woodcock told employees that the Respondent would be unable to give the periodic wage increases if employees voted for union representation. After the election, Woodcock again linked the employees’ deci- sion to unionize with the Respondent’s discontinuance of the wage increases, stating that it could not give raises “because the Union was there” or “because of the whole Union deal.” The Respondent made these statements aware that they could have an impact on employees’ support for the Union. This evidence amply supports the inference that the Respondent’s motivation for not 6 Contrary to the judge’s suggestion, however, it is not necessary for the General Counsel to also show as an element of the initial burden a connection, or nexus, between the employer’s union animus and the adverse employment actions. Ibid. ADVANCED LIFE SYSTEMS, INC. 1713 providing the promised periodic wage increases and the Christmas payments was employees’ union activity in selecting the Union as their bargaining representative. We also agree with the judge that the Respondent failed to meet its rebuttal burden under Wright Line. As found by the judge, the Respondent’s purported justifica- tions about increased competition and health insurance costs and decreased governmental reimbursement rates were clearly pretextual. These vague explanations were not supported by any corroborating testimony or docu- mentary evidence. Our dissenting colleague contends that the Respondent ceased granting the periodic wage increases and Christmas payments because Woodcock reasonably believed that the Respondent was required to bargain over them and had to discontinue granting them during negotiations. But even if Woodcock reasonably believed this was the case, the burden is on the Respond- ent to show that it would not have granted the wage in- creases and Christmas payments absent employees’ un- ion activity. See Chinese American Planning Council, Inc., 307 NLRB 410, 414 (1992) (employer violated Sec- tion 8(a)(3) by failing to grant periodic wage increases to employees despite its assertion that doing so would have violated its contract with a municipal agency), review denied mem. 990 F.2d 624 (2d Cir. 1993). However, instead of showing that the Respondent would have dis- continued the wage increases and Christmas payments absent employees’ union activity, the evidence shows the opposite. In multiple statements to employees, the Re- spondent admitted that, as a consequence of employees’ union activity, it was withholding future wage increases and Christmas payments from them. Moreover, even assuming that the dissent accurately characterizes Wood- cock’s belief, this does not excuse the Respondent’s withholding of the wage increases and Christmas pay- ments. The Respondent could have lawfully granted them without violating its duty to bargain if it had pro- posed doing so to the Union, and if the Union agreed. See Arc Bridges, 362 NLRB 455, at 459 & fn. 18.7 Ac- 7 That is exactly what transpired in December 2013. The Respond- ent informed the Union that it believed that it was appropriate to in- crease the wages of several employees. The Union responded that it would not oppose the wage increases but that it wanted to discuss them. Contrary to the dissent’s contention, we are not finding that the Re- spondent’s failure to grant the wage increases proves antiunion discrim- ination. As described above, the General Counsel demonstrated unlaw- ful motive by satisfying its initial burden under Wright Line. Instead of merely informing employees about its view of the Act’s prohibition on unilateral action, as suggested by the dissent, the Respondent told em- ployees prior to the election that a promised benefit would be withheld from them because of their union activity. The Respondent then reiter- ated, after employees voted for the Union, that it was withholding their promised benefit because of their union activity. Nonetheless, the cordingly, we agree with the judge that the Respondent violated Section 8(a)(3) and (1) by discontinuing the wage increases and Christmas payments because of em- ployees’ union activity.8 II. 8(A)(5) CHRISTMAS BONUS LLEGATION We agree with the judge that the Respondent had an established practice of granting annual Christmas pay- ments, and that the Respondent violated Section 8(a)(5) and (1) by unilaterally discontinuing this practice.9 For a number of years prior to the union election, the Respond- ent granted Christmas payments to unit employees. By discontinuing the Christmas payments after employees’ selected the Union as their bargaining representative, the Respondent unlawfully instituted a unilateral change to employees’ terms and conditions of employment without first bargaining to a valid impasse. See Covanta Energy Corp., 356 NLRB 706, 706 fn. 1 (2011). AMENDED REMEDY Having found that the Respondent engaged in certain unfair labor practices, we shall order the Respondent to cease and desist and to take certain affirmative action designed to effectuate the policies of the Act. Having found that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally changing unit employees’ terms and conditions of employment, specif- ically its practice of granting Christmas payments every year, without prior notice to the Union and without af- fording the Union an opportunity to bargain, we shall order the Respondent to rescind this action, and retroac- tively restore the status quo ante, until the Respondent negotiates in good faith with the Union to agreement or to impasse. Having found that the Respondent violated Section 8(a)(3) and (1) by discriminatorily denying employees periodic wage increases and Christmas payments every year, we shall also order the Respondent to make unit employees whole for any loss of earnings and other ben- Respondent had the opportunity to rebut the General Counsel’s show- ing but failed to do so. 8 Because it would not materially affect the remedy, we find it un- necessary to pass on the judge’s additional finding that the Respondent violated Sec. 8(a)(5) and (1) by unilaterally discontinuing an estab- lished practice of granting periodic wage increases to employees. Ac- cordingly, we see no need to address our dissenting colleague’s inter- pretation of NLRB v. Katz, 369 U.S. 736 (1962), or his application of it to the facts of this case. 9 In finding that the Christmas payments were wages, and therefore a mandatory subject of bargaining, we do not rely on the judge’s finding that the payments were given only to those employees who attended the Respondent’s Christmas party. In fact, the judge declined to credit the assertion by William Woodcock, the Respondent’s co-owner, that employees had to be present at the Christmas party to receive the Christmas payment. 1714 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD efits suffered as a result of the unlawful discrimination against them. Backpay shall be computed as in Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), plus interest as prescribed in New Horizons, 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River Medical Cen- ter, 356 NLRB 6 (2010). In addition, we shall order the Respondent to compensate unit employees for any ad- verse tax consequences of receiving a lump-sum backpay award and to file, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report with the Regional Director for Region 19 allo- cating the backpay awards to the appropriate calendar years for each employee. AdvoServ of New Jersey, Inc., 363 NLRB 1324 (2016).10 ORDER The National Labor Relations Board orders that the Respondent, Advanced Life Systems, Inc., Yakima, Washington, its officers, agents, successors, and assigns, shall 1. Cease and desist from (a) Telling employees that they will not get raises if they choose, or because they have chosen, to be repre- sented by a union. (b) Refusing to give unit employees wage increases because they chose to be represented by a union. (c) Refusing to give unit employees their traditional Christmas payments because they chose to be represent- ed by a union. (d) Unilaterally ceasing to grant established Christmas payments to unit employees. (e) Discontinuing its custom and practice of granting unit employees Christmas payments because unit em- ployees chose to be represented by a union. (f) In any like or related manner interfering with, re- straining or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act. 2. Take the following affirmative action necessary to effectuate the policies of the Act. (a) Before implementing any changes in wages, hours, or other terms and conditions of employment of unit em- ployees, notify and, on request, bargain with the Union as the exclusive collective-bargaining representative of employees in the following bargaining unit: 10 The judge recommended, without setting forth any supporting ra- tionale, that the Board impose a broad order requiring the Respondent to cease and desist from violating the Act “in any other manner.” We find that a broad cease-and-desist order is not warranted under the circumstances of this case, and substitute a narrow order requiring the Respondent to cease and desist from violating the Act “in any like or related manner.” See Hickmott Foods, 242 NLRB 1357 (1979). All full-time, regular part-time and per diem EMTs, paramedics and dispatchers employed by the Respond- ent out of its Yakima, Washington facilities, but ex- cluding all other employees, maintenance employees, and guards and supervisors as defined in the National Labor Relations Act. (b) On request of the Union, rescind the unilateral changes in terms and conditions of employment and re- store the status quo ante with regard to its established practice of granting Christmas payments every year, until such time as the Respondent and the Union reach an agreement for a new collective-bargaining agreement or a lawful impasse based on good-faith negotiations. (c) Make unit employees whole for any loss of earn- ings and other benefits suffered as a result of the unlaw- ful discrimination against them, in the manner set forth in the amended remedy section of this decision. (d) Make unit employees whole for any loss of earn- ings and other benefits suffered as a result of the unlaw- ful unilateral change, in the manner set forth in the amended remedy section of this decision. (e) Compensate affected employees for the adverse tax consequences, if any, of receiving a lump-sum backpay award, and file with the Regional Director for Region 19, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allo- cating the backpay awards to the appropriate calendar years for each employee. (f) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place desig- nated by the Board or its agents, all payroll records, so- cial security payment records, timecards, personnel rec- ords and reports, and all other records, including an elec- tronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order. (g) Within 14 days after service by the Region, post at its six facilities in Yakima, Washington, copies of the attached notice marked “Appendix.”11 Copies of the notice, on forms provided by the Regional Director for Region 19, after being signed by the Respondent’s au- thorized representative, shall be posted by the Respond- ent and maintained for 60 consecutive days in conspicu- ous places, including all places where notices to employ- ees are customarily posted. In addition to physical post- 11 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 Na- tional Labor Relations Board” shall read “Posted Pursuant to a Judg- ment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board.” ADVANCED LIFE SYSTEMS, INC. 1715 ing of paper notices, the notices shall be distributed elec- tronically, such as by email, posting on an intranet or an internet site, and/or other electronic means, if the Re- spondent customarily communicates with its employees by such means. Reasonable steps shall be taken by the Respondent to ensure that the notices are not altered, defaced, or covered by any other material. If the Re- spondent has gone out of business or closed the facility involved in these proceedings, the Respondent shall du- plicate and mail, at its own expense, a copy of the notice to all current employees and former employees employed by the Respondent at any time since July 2012. (h) Within 21 days after service by the Region, file with the Regional Director for Region 19 a sworn certifi- cation of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply. MEMBER MISCIMARRA, dissenting in part. My colleagues find that the Respondent engaged in an- tiunion discrimination when it froze wages on the advent of the Union as the Respondent’s employees’ bargaining representative, in violation of Section 8(a)(3) of the Na- tional Labor Relations Act (NLRA or Act). In fact, how- ever, the Respondent did precisely what the Act man- dates. The Respondent’s employees had chosen union representation, and the Respondent’s duty under Section 8(a)(5) of the Act was to refrain from making unilateral wage changes pending bargaining with the Union for an initial collective-bargaining agreement. The Respondent told its employees that it could not grant raises now that the Union had arrived on the scene. It phrased some of these statements inartfully, and I agree with my col- leagues that these statements violated Section 8(a)(1) of the Act. But given that the Respondent’s duty under Section 8(a)(5) was to freeze wages and given that its statements to employees were meant to convey that it was complying with that duty, I do not believe those statements constitute evidence of antiunion discrimina- tion. Accordingly, I respectfully dissent from my col- leagues’ finding that the Respondent violated Section 8(a)(3) by freezing wages pending bargaining with the Union.1 1 For the reasons explained below, although I agree with my col- leagues that the Respondent violated Sec. 8(a)(5) of the Act when it discontinued its established practice of granting its employees an annu- al Christmas bonus, I disagree that the discontinuation of the annual bonus also violated Sec. 8(a)(3). Facts The Respondent provides emergency medical transpor- tation services out of six stations throughout Yakima, Washington. It employs about 55 employees. During the hiring process, the Respondent’s CEO and president, William Woodcock, or another manager typically told employees to expect periodic wage increases. Employ- ees were not told to expect a particular amount or that wage increases would be given on particular dates. The Respondent has no formal process for evaluating em- ployee performance and no written policy regarding wage increases. Figure 1 below lists the employees who received wage increases over a 10-year period spanning March 1, 2003, to February 2013. For each employee listed, a multicol- ored bar shows when the employee received wage in- creases and the intervals (in months) between those in- creases. The starting point of each bar—at its left edge— is either the date the employee was hired or, for employ- ees hired before March 1, 2003, the date of the first wage increase documented in the record.2 2 Figure 1 reflects the information set forth in Jt. Exh. 1, contained in the record, which shows the precise dates and amounts of raises re- ceived by each bargaining-unit employee (employed by the Respondent on February 20, 2013) from March 1, 2003, to February 20, 2013. (Jt. Exh. 1 also shows wage increases received by one nonunit employee, Jameson McDougall.) Figure 1 shows the intervals in months between wage increases given to each bargaining-unit employee, with each interval rounded to the nearest half-month. For purposes of rounding to the nearest half-month, increases received on days 1–7 are deemed to have occurred on the 1st of the month, increases received on days 8–22 are deemed to have occurred on the 15th of the month, and increases received on days 23–30 or 23–31 are deemed to have occurred on the 1st of the next month. (For the shorter month of February, increases received on days 1–7 are deemed to have occurred on the 1st of the month; on days 8–20, on the 14th of the month; and on days 21–28 or 21–29, on the 1st of March.) Figure 1 excludes employees hired after or shortly before the Union began its organizing campaign in July 2012 and employees for whom no wage increase is reflected in Jt. Exh. 1. In other words, Figure 1 makes the irregular wage increases implemented by Respondent during the 2003–2013 time period appear more regular than they really were, since the actual increases occurred on a wider range of dates, and Figure 1 does not list employees who received no increases. 1716 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Figure 1 Notes: (1) Some intervals between wage increases were too brief to be legibly numbered. Unnumbered intervals are either one-half month, one month, or one-and-a-half months. (2) 22-month interval includes period of time during which Ireton’s employment was interrupted. ADVANCED LIFE SYSTEMS, INC. 1717 The above chart plainly demonstrates that the Re- spondent’s history of wage increases during the 10-year period between 2003 and 2013 was irregular as to timing and unpredictable as to which employees received in- creases and which employees did not at any given time. At no time during the 2003–2013 period did the Re- spondent give a wage increase to all its employees at the same time, and the Respondent never gave wage increas- es at the same fixed interval for all employees. In addi- tion to the irregular timing of the wage increases received by different employees, the amounts of the wage increas- es varied significantly, ranging from $0.25 to $2.50 an hour. President and CEO Woodcock testified that he made discretionary decisions regarding the timing of the wage increases received by various employees, and he stated the amount of each increase was based on “how I viewed they were performing.” In July 2012,3 the Union began organizing the Re- spondent’s employees. In July or August, Woodcock told employee Schauer that “he would not be able to give us raises if we brought a union in,” After a representa- tion election held on August 15 and 16, the Board certi- 3 All remaining dates are in 2012 unless otherwise noted. Figure 1 (cont.) Notes: (3) 31.5-month interval includes period of time during which Molina’s employment was interrupted. (4) 13.5-month interval includes period of time during which Rosenkranz’s employment was interrupted. 1718 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD fied the Union as the collective-bargaining representative of the Respondent’s EMTs, paramedics, and dispatchers on August 24. After the Union’s certification, the Re- spondent stopped giving wage increases, apart from a few exceptions (none of which are alleged to violate the Act).4 In December, Woodcock told employees Schauer and Ugaitafa that he could not give Ugaitafa a raise “be- cause the Union was there” or “because of the whole Union deal.” In January 2013, Woodcock told two em- ployees that wage increases had previously been discre- tionary but now had to be negotiated with the Union. Over the course of a number of years, the Respondent gave each of its employees a Christmas bonus. It did so every year but one. That year, the employees voluntarily agreed to forego their bonuses so that Woodcock could give $10,000 to an employee whose house had burned down. After employees selected the Union to represent them, the Respondent discontinued its past practice of giving Christmas bonuses. Discussion A. Under Section 8(a)(5), the Respondent Was Required to Freeze Wages after Its Employees Chose Union Rep- resentation, But It Violated Section 8(a)(5) When It Discontinued Christmas Bonuses. Section 8(a)(5) of the Act requires employers to bar- gain over “mandatory” bargaining subjects—wages, hours, or other terms and conditions of employment5— whenever a union becomes the representative of employ- ees in an appropriate bargaining unit. An employer vio- lates Section 8(a)(5) of the Act if it unilaterally changes mandatory bargaining subjects without bargaining to an agreement or impasse. NLRB v. Katz, 369 U.S. 736 (1962); NLRB v. Borg-Warner Corp., 356 U.S. 342 (1958); Bottom Line Enterprises, 302 NLRB 373 (1991), enfd. mem. sub nom. Master Window Cleaning, Inc. v. NLRB, 15 F.3d 1087 (9th Cir. 1994).6 Until bargaining is 4 Eight employees received wage increases on October 6, and three employees received wage increases after that date. 5 Sec. 8(d) of the Act defines the obligation to bargain collectively as “the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and condi- tions of employment, or the negotiation of an agreement or any ques- tion arising thereunder, and the execution of a written contract incorpo- rating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession . . . .” 6 There are several exceptions to the rule that an employer must re- frain from unilaterally changing mandatory bargaining subjects. Courts have held that whenever bargaining has already taken place over a particular subject, as reflected in collective-bargaining agreement lan- guage that covers the subject, the employer is not required to engage in additional bargaining. Department of Navy v. FLRA, 962 F.2d 48, 57 (D.C. Cir. 1992); Chicago Tribune Co. v. NLRB, 974 F.2d 933, 936– completed, the employer must preserve the status quo, which means refraining from making changes in manda- tory bargaining subjects. Therefore, once employees have chosen to be represented by a union, the employer violates the Act if it unilaterally changes “wages,” which Congress repeatedly placed first when enumerating bar- gaining subjects.7 Under a narrow exception recognized by the Supreme Court in Katz, unilateral wage changes are permitted if they are supported by a “long-standing practice” of giv- ing the same “automatic increases” at fixed intervals in the past.8 But the possibility of permitting these types of unilateral wage changes was stated as an exception to the rule in Katz, and the employer in that case was found not to have acted within that exception but to have violated the Act by unilaterally changing wages. Specifically, the employer had implemented selective “merit increases” that had been discussed in three bargaining sessions, even though “no final understanding had been reached.”9 937 (7th Cir. 1992). The Board has resisted adopting this “contract coverage” standard, and I express no opinion here regarding this issue. The Board has held that bargaining is not necessary when there has been a “clear and unmistakable waiver” of bargaining concerning the particular matter at issue. Provena St. Joseph Medical Center, 350 NLRB 808, 811 (2007); American Diamond Tool, Inc., 306 NLRB 570, 570 (1992). Other exceptions to normal bargaining requirements arise “‘[w]hen a union, in response to an employer’s diligent and earnest efforts to en- gage in bargaining, insists on continually avoiding or delaying bargain- ing,’” Bottom Line Enterprises, 302 NLRB at 374 (quoting M & M Contractors, 262 NLRB 1472 (1982)), or “when economic exigencies compel prompt action,” id. In addition, when an economic exigency compels prompt action but is not so urgent as to altogether relieve the employer of its duty to bargain, the employer may act unilaterally if it gives the union notice and opportunity to bargain over the discrete matter and “either the union waives its right to bargain or the parties reach impasse on the matter proposed for change.” RBE Electronics of S.D., 320 NLRB 80, 81–82 (1995). Similarly, where a discrete, recur- ring event—such as an annual wage adjustment—is scheduled to occur during bargaining for an initial labor contract, the employer may im- plement changes in that employment term provided it gives the union timely notice and an opportunity to bargain about that matter. E.g., Stone Container Corp., 313 NLRB 336 (1993). Although I recognize that Bottom Line Enterprises and RBE Electronics are extant precedent, I do not pass on the soundness of these decisions. 7 See NLRA Sec. 1 (describing the Act’s policy of minimizing in- dustrial strife “arising out of differences as to wages, hours, or other working conditions”); Sec. 8(d) (defining bargaining in part as confer- ring in good faith “with respect to wages, hours, and other terms and conditions of employment”); Sec. 9(a) (designated or selected union representatives, if supported by an employee majority, are the exclusive representatives “in respect to rates of pay, wages, hours of employment, or other conditions of employment”). Cf. NLRB v. Katz, supra, 369 U.S. at 745 (“[E]ven after an impasse is reached [an employer] has no license to grant wage increases greater than any he has ever offered the union at the bargaining table, for such action is necessarily inconsistent with a sincere desire to conclude an agreement with the union.”). 8 Katz, 369 U.S. at 746–747. 9 Id. at 746. ADVANCED LIFE SYSTEMS, INC. 1719 The Supreme Court concluded that unilaterally changing wages constituted an unlawful refusal to bargain in viola- tion of Section 8(a)(5): The respondents’ . . . unilateral action related to merit increases . . . . must be viewed as tantamount to an out- right refusal to negotiate on that subject, and therefore as a violation of § 8(a)(5), unless . . . the January raises were in line with the company’s long-standing practice of granting quarterly or semiannual merit reviews—in effect, were a mere continuation of the status quo . . . . Whatever might be the case as to so-called “merit rais- es” which are in fact simply automatic increases to which the employer has already committed himself, the raises here in question were in no sense automatic, but were informed by a large measure of discretion. There simply is no way in such case for a union to know whether or not there has been a substantial departure from past practice, and therefore the union may proper- ly insist that the company negotiate as to the proce- dures and criteria for determining such increases.10 The rule in Katz is that employers cannot deviate from the status quo by making unilateral changes in wages and other mandatory bargaining subjects. The Katz excep- tion—often referred to as the “dynamic status quo”— permits unilateral wage increases that are supported by a “long-standing practice” of giving “automatic increas- es.”11 As the above chart graphically demonstrates, the rule of Katz applies here, not the exception. The judge found otherwise. Although he acknowl- edged that “the intervals between wage increases . . . varied somewhat”—a stunning understatement—he found that the Respondent violated Section 8(a)(5) when it discontinued granting wage increases after the Union was certified12 on the basis that the intervals between wage increases “were not random, as employees typical- ly received wage increases every 6 months or sooner” 10 Id. at 745–747 (emphasis added; footnote omitted). 11 Id. at 746. As described by Professors Gorman and Finkin in the most recent edition of their well-known treatise: [T]he case law (including the Katz decision itself) makes clear that conditions of employment are to be viewed dynamically and that the status quo against which the employer’s “change” is considered must take account of any regular and consistent past pattern of change. An employer modification consistent with such a pattern is not a “change” in working conditions at all. Robert A. Gorman, Matthew W. Finkin, LABOR LAW ANALYSIS AND ADVOCACY, at 720 (Juris 2013) (hereinafter “Gorman & Finkin”) (em- phasis added). See also Westinghouse Electric Corp. (Mansfield Plant), 150 NLRB 1574, 1577 (1965) (referring to whether unilateral subcontracting decisions “vary significantly in kind or degree from what had been customary under past established practice”). 12 My colleagues do not pass on this finding. (emphasis added). Thus, according to the judge, a “pat- tern” of regularly timed wage increases has been proven here, even though the purported “pattern” includes inter- vals between pay raises of 1/2 month,13 1 month,14 1 1/2 months,15 2 months,16 2 1/2 months,17 3 months,18 3 1/2 months,19 4 months,20 4 1/2 months,21 5 months,22 5 1/2 months,23 and 6 months. Using this mode of analysis— which simply disregards the irregularity of wage increas- es by defining the pattern as “every 6 months or soon- er”—evidence that wage increases were given at irregu- lar intervals will “prove” that the increases were regular- ly timed. Such after-the-fact “pattern” analysis bears no resemblance to the Supreme Court’s reference, in Katz, to a “long-standing pattern” of “automatic” increases that were given quarterly or semiannually.24 There is no reasonable way that one can extract a for- ward-looking statutory obligation to provide future wage increases from the patchwork of past wage adjustments that the Respondent provided at different times in vary- ing amounts to some employees and not others.25 The 13 See Figure 1 (employees Lambert-Smith, Neumann, Sharp). 14 Id. (employees Ackley, Micheles, Pirolo, Rhodes, Sharp, Ugaitafa). 15 Id. (employees Fandrich Jr., Hallmark, Pirolo, Wakeman). 16 Id. (employees Davie, Flodin, Gomez, Hallmark, Longie, Nokes, M. O’Dell, Petersen, Ugaitafa, Wakeman, Weigley, Yeager). 17 Id. (employees Micheles, Gorman, Judkins, M. O’Dell, Wake- man). 18 Id. (employees Brisky, Micheles, Derby, Gomez, Harpel, Judkins, Matson, Mickelson, Petersen, Rhodes, Rosenkranz, Wakeman, Walker, Weigley). 19 Id. (employees Adams, Gravel, Harpel, Nokes, M. O’Dell, Pirolo, Rosenkranz, Schauer, Sharp, Wakeman). 20 Id. (employees Davie, Flodin, Judkins, Longie, Nokes, Schauer, Ugaitafa, Walker). 21 Id. (employees Adams, Micheles, Davie, Fandrich Jr., Gomez, Gravel, Holman, Ireton, Judkins, Madden Jr., McCabe, Mickelson, M. O’Dell, Rhodes, Schauer, Walker, Weigley, Yeager). 22 Id. (employees Bardwell, Derby, Fandrich Jr., Gorman, Ireton, Mickelson, C. O’Dell, Schauer, Sharp, Wakeman). 23 Id. (employees Ackley, Adams, Brisky, Davie, Derby, Fandrich Jr., Flodin, Gomez, Gravel, Green, Hallmark, Holman, Ireton, Judkins, Longie, Madden Jr., McCabe, Mickelson, Molina, Nokes, C. O’Dell, M. O’Dell, Petersen, Rhodes, Rosenkranz, Schauer, Sharp, Wakeman, Yeager). 24 Katz, 369 U.S. at 746. 25 The obligation to provide wage increases based on a “long- standing practice” of giving “automatic increases,” Katz, 369 U.S. at 746, represents what might be called the reverse version of the Katz exception. As noted in the text, the Katz exception recognizes that if an employer implements unilateral wage changes, it can successfully defend against an allegation that it violated Sec. 8(a)(5) by showing that the changes were consistent with a “long-standing practice” of giving the same “automatic increases” in the past. Id. In some cases, in which a reverse version of the Katz exception was applied, the Board and the courts have found that the Act required employers to make unilateral wage changes—even though bargaining has not taken place regarding such changes—when the status quo encompasses a consistent practice of giving the same wage increases at fixed intervals. See, e.g., Daily 1720 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Respondent had no formal merit review program. There is no evidence establishing when the Respondent evalu- ated its employees’ performance or what criteria it ap- plied in doing so. It is uncontroverted that CEO and President Woodcock decided when to increase an em- ployee’s wages based on his own discretion, and he de- cided how much to increase an employee’s wages based on “how I viewed they were performing.” In addition, Respondent’s wage increases were given to particular employees at highly irregular intervals, ranging from half a month to more than 20 months. The Respondent’s practice of increasing wages was not fixed in amount or timing. Thus, just like the increases in Katz—which the Supreme Court stated could not be unilaterally imple- mented without bargaining—the wage increases at issue here “were in no sense automatic, but were informed by a large measure of discretion.” Katz, 369 U.S. at 746. Indeed, if the Respondent had implemented unilateral wage changes, it would have clearly violated Section 8(a)(5). In contrast, the Respondent did have a longstanding, established practice of giving its employees an annual Christmas bonus. As stated above, the record reveals that the Respondent had given employees a bonus every year except one—and that year, the employees voluntari- ly agreed to forego their bonuses so that Woodcock could give $10,000 to an employee whose house had burned down. Given that the only exception to the Re- spondent’s past practice of giving out Christmas bonuses was consented to by the employees themselves, I agree that the bonuses were an established condition of em- ployment, and the Respondent violated Section 8(a)(5) of the Act by discontinuing them after employees selected the Union. B. Some of the Respondent’s Statements Concerning Wage Increases Violated Section 8(a)(1), But Wood- cock’s January 2013 Statement Was Lawful. I agree with my colleagues that some statements made by Woodcock violated Section 8(a)(1). According to the credited testimony of employee Matthew Schauer, in News of Los Angeles, 315 NLRB 1236 (1994) (“Daily News II”), enfd. 73 F.3d 406 (D.C. Cir. 1996). The Board has gone so far as to require the employer to continue granting wage increases even though past increases have varied in amount based on the employer’s exercise of discretion. E.g., Mission Foods, 350 NLRB 336, 337 (2007). In my view, the Board must exercise considerable care when inter- preting Katz—where the Supreme Court described a defense against an allegation that an employer’s unilateral changes violated Sec. 8(a)(5)— to mean that Sec. 8(a)(5) imposes an obligation on employers to make unilateral changes in wages, particularly since the Act explicitly states that the duty to bargain “does not compel either party to agree to a proposal or require the making of a concession.” Sec. 8(d); see also H. K. Porter Co. v. NLRB, 397 U.S. 99, 102 (1970). July or August 2012 Woodcock told Schauer that “he would not be able to give us raises if we brought a union in.” And according to the credited testimony of employ- ees Schauer and Lenny Ugaitafa, in December 2012 Woodcock told Ugaitafa that he could not give Ugaitafa a raise “because the Union was there” or “because of the whole Union deal.” Although these statements might conceivably be interpreted to reflect a lawful sentiment— i.e., electing the Union precludes raises because Wood- cock’s duty is to maintain the status quo pending collec- tive bargaining—they would more likely be understood by employees to mean, first, that Woodcock would with- hold raises if employees selected a union, and second, that Woodcock was withholding raises because employ- ees selected the Union. In other words, employees would reasonably hear the message that raises would be withheld or are being withheld in retaliation for selecting the Union, which would unlawfully interfere with, re- strain, or coerce employees in the exercise of their Sec- tion 7 rights regardless of whether that was the message Woodcock meant to convey. My colleagues do not pass on whether the Respondent violated Section 8(a)(1) when Woodcock told two em- ployees, in January 2013, that wage increases had previ- ously been discretionary but now had to be negotiated with the Union. I would find that the Respondent did not violate the Act when Woodcock made this statement. In my view, this was a clear, correct and lawful statement of the Respondent’s obligations under the Act. C. The Respondent Did Not Engage in Antiunion Dis- crimination in Violation Section 8(a)(3) by Refraining from Giving Unilateral Wage Increases and Christmas Bonuses. For the reasons stated above, I believe that Section 8(a)(5) clearly did not permit the Respondent to give unilateral wage increases after the Union’s certification, when wage increases had not been agreed upon and when the parties had not even commenced collective bargain- ing. Because the Respondent would have violated Sec- tion 8(a)(5) by giving unilateral wage increases in these circumstances, the Board cannot reasonably find that Respondent’s failure to implement such increases consti- tuted antiunion discrimination in violation of Section 8(a)(3). I addressed a similar scenario in Arc Bridges, Inc., 362 NLRB 455 (2015). There, after the D.C. Circuit rejected the Board’s finding that annual wage increases were an established condition of employment, the issue before the Board on remand was whether the employer, which had given a wage increase to its unrepresented employees, was motivated by antiunion animus and violated Section 8(a)(3) when it decided not to give a wage increase to its ADVANCED LIFE SYSTEMS, INC. 1721 represented employees while it was engaged in negotia- tions with their bargaining representative, even though such an increase would have violated Section 8(a)(5) if given. I wrote: [T]he Respondent’s legal duty was to maintain the sta- tus quo unchanged while it bargained in good faith with the Union to agreement or impasse. Annual wage in- creases were not the status quo, as the D.C. Circuit has made clear. Thus, refraining from giving unit employ- ees a wage increase in October 2007, while bargaining was ongoing, was what the Respondent was supposed to do. Otherwise, the Respondent would have violated Section 8(a)(5). Especially in this context, before de- ciding that the withholding of a wage increase violates Section 8(a)(3), the Board must require strong and con- vincing evidence sufficient to prove unlawful motiva- tion. Otherwise, parties would run the risk of violating the Act whenever they exercise their legal right—and their legal obligation—to refrain from automatically giving represented employees whatever increases are granted to other employees. Arc Bridges, 362 NLRB 455, at 466 (Member Miscimarra, dissenting). Here, as discussed above, the Respondent faced the same situation: it would have violated Section 8(a)(5) if it gave the wage increases at issue. This precludes a rea- sonable finding that the Respondent, by exercising the restraint required by Section 8(a)(5), engaged in prohib- ited discrimination in violation of Section 8(a)(3), which makes it unlawful for an employer to engage in “discrim- ination . . . to . . . discourage membership in any labor organization.” As a result, I disagree with my col- leagues’ finding that the General Counsel sustained his initial burden under Wright Line26 of showing that the Respondent bore animus towards the Union. Nor do I believe the Board can reasonably find that the Respondent’s violations of Section 8(a)(1) support a finding that the Respondent’s treatment of wages was unlawfully motivated by antiunion considerations. I agree that the Respondent violated Section 8(a)(1) when, as described by employee Schauer, Respondent’s CEO and President Woodcock (i) stated that “he would not be able to give . . . raises if we brought a union in,” and (ii) told employees Schauer and Ugaitafa that he could not give Ugaitafa a raise “because the Union was there” or “because of the whole Union deal.” I believe these statements violated Section 8(a)(1) because Wood- cock’s imprecise wording would reasonably be interpret- 26 251 NLRB 1083 (1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982). ed by employees as an expression of retaliation for sup- porting the Union, but I do not believe these statements prove that Woodcock was motivated by an actual desire to discriminate against employees. Section 8(a)(1) legal- ity turns on what employees would have reasonably un- derstood, but an 8(a)(3) violation requires proof that the employer actually engaged in discrimination motivated by a desire to “discourage” union membership. Espe- cially in light of Woodcock’s lawful statement that wage increases had previously been discretionary but now had to be negotiated with the Union, I believe the record sup- ports a finding that Woodcock reasonably—indeed, cor- rectly—believed that the Respondent was required to bargain over wages and could not increase wages until an agreement (or impasse) was reached.27 For similar reasons, I disagree that the Respondent’s treatment of Christmas bonuses constituted unlawful discrimination in violation of Section 8(a)(3). Although I agree the Respondent violated Section 8(a)(5) when it discontinued the Christmas bonuses, I believe the record does not preclude the possibility that the Respondent, in good faith, mistakenly believed that it had to refrain from continuing to pay bonuses pending negotiations with the Union. Under the circumstances presented here, I do not believe the record establishes that antiunion animus mo- tivated the Respondent’s decision not to provide Christ- mas bonuses following the Union’s certification, particu- larly given that the Respondent was not mistaken in be- lieving that Section 8(a)(5) required it to suspend wage increases pending bargaining with the Union. Accordingly, I would find that the General Counsel has not met his burden of proving that the Respondent bore animus toward the Union, and I would dismiss the Section 8(a)(3) allegations. 27 I disagree with my colleagues’ contention that antiunion discrimi- nation is proven by Woodcock’s statements because the Respondent “could have lawfully granted” the increases if the Respondent had proposed them and “if the Union agreed.” I believe this contention is plainly without merit. If this argument were accepted, it would mean that whenever an employer described the Act’s prohibition against unilateral action (preventing immediate wage increases), the Board could find that the employer engaged in antiunion discrimination based on the employer’s failure to propose the increases at issue and to as- sume the union would accept them. I believe this is plainly insufficient to prove unlawful antiunion motivation, given that the Respondent reasonably understood (as explained in the text) that the duty to bargain prevented it from unilaterally implementing discretionary wage in- creases. Indeed, in another decision issued today, the Board in DuPont has squarely held that discretionary employer actions can never be taken unilaterally based on past practice, even though the employer may have always taken precisely the same actions previously. See 364 NLRB 1648 (2016). The Board cannot reasonably find that the Re- spondent here engaged in unlawful antiunion discrimination based on statements that, in fact, were consistent with the Board’s own holding in DuPont. 1722 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD CONCLUSION To the extent and for the reasons stated above, I re- spectfully dissent. 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 Federal labor law and has ordered us to post and obey this notice. FEDERAL LAW GIVES YOU THE RIGHT TO Form, join, or assist a union Choose representatives to bargain with us on your behalf Act together with other employees for your bene- fit and protection Choose not to engage in any of these protected activi- ties. WE WILL NOT tell you that you will not get raises if you choose, or because you have chosen, to be represent- ed by a union. WE WILL NOT refuse to give you wage increases be- cause you chose to be represented by a union. WE WILL NOT refuse to give you your traditional Christmas payments because you chose to be represented by a union. WE WILL NOT unilaterally cease to grant established Christmas payments to you. WE WILL NOT discontinue our custom and practice of granting you Christmas payments because you chose to be represented by a union. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of the rights listed above. WE WILL, before implementing any changes in wages, hours, or other terms and conditions of employment of unit employees, notify and, on request, bargain with the Union as the exclusive collective-bargaining representa- tive of employees in the following bargaining unit: All full-time, regular part-time and per diem EMTs, paramedics and dispatchers employed by the Respond- ent out of its Yakima, Washington facilities, but ex- cluding all other employees, maintenance employees, and guards and supervisors as defined in the National Labor Relations Act. WE WILL, on request of the Union, rescind the unilat- eral changes in terms and conditions of employment and restore the status quo ante with regard to our established practice of granting Christmas payments every year, until such time as we reach an agreement with the Union for a new collective-bargaining agreement or a lawful impasse based on good-faith negotiations. WE WILL make unit employees whole for any loss of earnings and other benefits suffered as a result of the unlawful discrimination against them, plus interest. WE WILL make unit employees whole for any loss of earnings and other benefits suffered as a result of the unlawful unilateral change, plus interest. WE WILL compensate affected employees for the ad- verse tax consequences, if any, of receiving a lump-sum backpay award, and WE WILL file with the Regional Di- rector for Region 19, within 21 days of the date the amount of backpay is fixed, either by agreement or Board order, a report allocating the backpay awards to the appropriate calendar years for each employee. ADVANCED LIFE SYSTEMS, INC. The Board’s decision can be found at www.nlrb.gov/case/19-CA-096464 or by using the QR code below. Alternatively, you can obtain a copy of the decision from the Executive Secretary, National Labor Relations Board, 1015 Half Street, S.E., Washington, D.C. 20570, or by calling (202) 273–1940. Ryan Connelly, Esq., for the General Counsel. Gary E. Lofland, Esq. (Halverson Northwest Law Group), of Yakima, Washington, for the Respondent. DECISION STATEMENT OF THE CASE MICHAEL A. ROSAS, Administrative Law Judge. This case was tried in Yakima, Washington, on February 25, 2014. Inter- national Association of EMTs and Paramedics (IAEP) filed charges against Advanced Life Systems, Inc. (the Company) in Case 19–CA–096464 on January 15, 2013, and Case 19–CA– 096899 on January 22, 2013. IAEP, an affiliated labor organi- zation, filed the charges on behalf of the National Emergency Medical Services Association (the Union).1 An order to con- 1 From May or April 2012 to April 2013, IAEP had an affiliation and service agreement with the Union, in which IAEP provided the Union ADVANCED LIFE SYSTEMS, INC. 1723 solidate both cases and complaints issued on April 29, 2013. An amended order consolidating cases and complaints issued on September 13, 2013. The amended complaint alleges that the Company violated Section 8(a)(5) and (1) of the National Labor Relations Act2 (the Act) by: (1) withholding regularly scheduled biannual wage increases; (2) failing to provide em- ployees with Christmas bonuses; and (3) telling employees that wage increases were withheld because of their union activity. The complaint also alleges that the Company violated Section 8(a)(3) and (1) for discriminating in regard to the hiring, tenure or terms and conditions of employment of its employees. The complaint alleges that the Company engaged in this conduct because a majority of the Company’s employees voted for the Union in the August 2012 election and engaged in concerted activities, and to discourage employees from engaging in these or other union and/or protected, concerted activities. In its timely-filed answer, the Company essentially denies the material allegations and asserts as an affirmative defense that the General Counsel lacks standing to issue and bring this complaint because he was improperly appointed. On the entire record, including my observation of the de- meanor of the witnesses, and after considering the briefs filed by the General Counsel and the Company, I make the following FINDINGS OF FACT I. JURISDICTION The Company, a Washington State corporation with an of- fice and place of business in Yakima, Washington (the facility), is engaged in the business of providing emergency medical transportation services. In conducting its operations during the last 12 months, the Company derived gross revenues in excess of $5000, and purchased and received goods at the facility val- ued in excess of $50,000 directly from suppliers located outside the State of Washington. The Company admits and I find that it is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act and that the Union is a labor organization within the meaning of Section 2(5) of the Act. II. ALLEGED UNFAIR LABOR PRACTICES A. The Parties The Company is a family-held S corporation formed in April 1996. William Woodcock (Woodcock) is the Company’s presi- dent, chief executive officer (CEO), majority shareholder and oversees day-to-day operations. Billie Woodcock, Woodcock’s spouse, is the other majority shareholder, but is not actively involved in the operation of the business. Woodcock’s two daughters are minority, nonvoting shareholders and are not actively involved in the business. Peter South is the Company’s with representation services, contract negotiations, handling of arbitra- tions, organizing, and servicing the members. (GC Exh. 1(a); Tr. 18– 19.) 2 29 U.S.C. §§ 151–169. operations manager. Jameson McDougall is a paramedic with supervisory responsibilities.3 The Company employs approximately 55 workers, consist- ing of full-time and part-time employees, operating out of six stations throughout Yakima. Employee categories include Emergency Medical Technician (EMT) basics, advanced EMTs, paramedics, dispatchers, billing staff, and an operations manager.4 These employees include Matthew Schuaer, an ad- vanced EMT, and paramedics Lenny Ugaitafa and Cole Gravel. B. The Parties’ Collective-Bargaining Relationship In July 2012, the Union began organizing Company employ- ees. On August 15 and 16, 2012, a representation election was held, and on August 24, 2012, the Board certified the Union as the unit’s exclusive collective bargaining representative. The bargaining unit (the unit) includes all full-time, regular part- time and per diem EMT’s, paramedics, and dispatchers em- ployed by the Company out of its six Yakima facilities, but excludes all other employees, maintenance employees, and guards and supervisors as defined in the Act.5 As of February 25, 2014, however, the Company and the Union had not yet met for any negotiations.6 C. Wage Raises The Company has no written policy regarding wage sched- ules or increases in its policy manual or standard operating procedures.7 Nor does it have a formal procedure of evaluating unit employees’ performance.8 However, during the hiring process, Woodcock or the General Manager usually informs new employees to expect periodic wage increases. Thereafter, increases are determined by Woodcock based on tenure and performance.9 Prior to July-August 2012, the intervals between wage in- creases and wage increase amounts varied somewhat, but were not random,10 as employees typically received wage increases every 6 months or sooner.11 The increases ranged from 25 3 The Company admitted that Woodcock, McDougall, and South were supervisors and/or agents within the meaning of Sec. 2(11) and (13) of the Act. (GC Exh. 1(R).) 4 Woodcock estimated that the 55 employees, including an undeter- mined amount of part-time employees, actually add up to the equivalent of 45 to 50 full-time employees. (Tr. 70–72.) 5 GC Exh. 1(P) at 3–4, 1(R) at 1. 6 No explanation was provided by either party as to why they had not yet met to engage in collective bargaining. (Tr. 76.) 7 R. Exh. 1–2. 8 There was no testimony to refute Woodcock’s credible testimony that he had exclusive authority in determining wage increases. (Tr. 82.) 9 Schauer, Gravel, and Ugaitafa credibly testified that, upon being hired, they were told by South, Woodcock, or other managers to expect periodic wage increases once every 6 months. Starting out, employees typically received $1-per-hour raises and then the raises decreased in 25- or 50-cent increments. (Tr. 23-24, 51–52, 63, 67.) 10 Jt. Exh. 1. 11 Prior to December 2012, Schauer received the following consecu- tive wage increases over the corresponding periods of time: 50 cents (4 months); $1 (4 months); 50 cents (4 months); 25 cents (5 months); 25 cents (6 months); 25 cents (6 months); and 25 cents (6 months). Gravel received the following consecutive wage increases during the following periods of time: $1 (3 months); 50 cents (5 months); 50 cents (5 1724 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD cents to 2 dollars and 50 cents.12 Woodcock started new em- ployees at relatively low wage rates, but increased their wages as they progressed.13 At some point after the organizing campaign began in July and before the representation election in August 2012, Wood- cock spoke with Schauer at station 4 about the implications of unionization. McDougall, Schauer’s supervisor, was present. One implication of union certification, Woodcock told Schauer, would be the need to negotiate wage increases before the Com- pany could give raises.14 In December 2012, after the Union prevailed in the election and was certified, Ugaitafa approached Woodcock about his overdue raise. Schauer was standing nearby and overheard the conversation. Woodcock explained that, because the Union was now involved, he had been advised by counsel to freeze all terms and conditions of employment, including pay raises.15 In January 2013, Schauer and Gravel approached Woodcock about the lack of pay raises since the Union was certified. They told him that it was supposed to be business as usual until con- tract negotiations were complete. Woodcock, however, insisted that pay raises had been discretionary and now needed to be negotiated.16 Since July-August 2012, a majority of the unit has not re- ceived any wage increases from the Company.17 Nor did the Company notify the Union, at any time since it was certified in August 2012 as the bargaining unit’s labor representative and prior to December 19, 2013, that it would cease giving wage months); 50 cents (5 months); $1 and 50 cents (6 months); 50 cents (6 months); 50 cents (6 months); 25 cents (6 months). Ugaitafa received the following consecutive wage increases during the following periods of time: 50 cents (2 months); 50 cents (4 months); $1 (1 month). (Jt. Exh. 1.) 12 Among the employees who testified, the largest wage increase was $1.50 per hour. (Jt. Exh. 1.) 13 Woodcock provided credible testimony that he also considers oth- er factors, including the availability of employees, the economy, com- pany expenses, call volumes, and reimbursement rates. (Tr. 79–81, 92.) 14 There is no testimony as to the month or day that the conversation took place. However, the conversation between Schauer, McDougall, and Woodcock occurred at station 4 prior to the union certification. Neither Schauer nor Woodcock recalled everything that was said dur- ing the discussion. I credit Schauer’s version, however, because he specifically recalled hearing Woodcock say that he would be unable to give raises if employees voted in favor of the Union. (Tr. 25–27.) Woodcock, on the other hand, conceded that the conversation took place, but simply denied stating what was alleged in the complaint. (Tr. 74–75.) 15 Ugaitafa and Schauer provided credible testimony about this con- versation. (Tr. 27–29, 64–65.) Woodcock, on the other hand, issued a vague denial to the complaint allegation (“not exactly like that”) and conceded that he told the employees that he could not undertake unilat- eral action without first bargaining with the Union. (Tr. 75.) 16 Schauer and Gravel provided inconsistent testimony as to what Woodcock told them on this occasion. Gravel simply recalled Wood- cock responding that he would consult with his attorney (Tr. 30–31.), while Schauer recalled Woodcock saying that he was not allowed to give employee raises because they were now represented by the Union. (Tr. 53–55.) Nevertheless, Schauer’s recollection of the conversation was close to Woodcock’s version that everything had been discretion- ary in the past and now had to be negotiated. (Tr. 76.) 17 Jt. Exh. 1. increases. On December 19, 2013, however, approximately 2 months prior to this hearing, the Company notified the Union that it intended to provide employees with hourly wage increas- es in January 2014. Only certain employees, however, have received wage increases since that time.18 D. Christmas Bonus The Company also has no formal written employee policy regarding bonuses.19 However, prior to December 2012, unit employees regularly received Christmas payments in different forms and amounts. In fact, this practice evolved to the point where unit employees, upon being hired by the Company, were notified to expect such future payments.20 Woodock generally gave unit members payments ranging in amounts from $50 to 500 each (totaling around $10,000-15,000) in the form of cash, check, tangible raffle chances, gifts, or trip prizes at the annual Christmas party hosted by the Company. Since the Company’s inception in 1996, the payments were usually distributed at the annual Christmas party and the gifts increased in value as the business prospered.21 More recently, unit employees received some form of Christmas payments in 2008 and 2009.22 In 2010, after an em- ployee’s home was destroyed in a mud slide, Woodcock asked unit employees if they would agree to forego their Christmas payments in return for a $10,000 contribution by Woodcock to the affected employee. Unit employees agreed, the affected employee was given a $10,000 check, and there were no Christmas bonuses. Some employees, however, randomly re- ceived gifts through a raffle.23 In 2011, most employees re- ceived Christmas payments in the form of checks. New em- ployees, however, were allowed to take part in a raffle for gift cards and other products.24 In 2012 and 2013, Woodcock did not give Christmas payments to unit employees. Nor did he 18 Gravel and Ugaitafa received a wage increase in January 2014. (Tr. 52, 62, 90; R. Exh. 3.) The Company allegedly awarded wage raises to certain employees in an effort to retain them. (Tr. 90.) 19 R. Exhs. 1, 2. 20 Schauer and Gravel credibly testified that they were told by Gen- eral Manager Ann McCarter that EMTs receive bonuses around Christmastime, and that EMTs receive $50 for every year up to $500, and paramedics receive $100 for every year up to $500. (Tr. 32, 55– 56.) 21 Woodcock credibly testified that his family personally gave em- ployees Christmas gifts and that records were not kept. However, I do not credit his assertion that employees had to be present at the Christ- mas party to receive the gift (Tr. 82–85, 94–95.), as Gravel’s credible and unrefuted testimony revealed that, in some instances, the payments were distributed by the dispatch office prior to the Christmas party. (Tr. 56.) Moreover, he failed to refute the credible testimony of Schauer and Gravel that bonuses ranged from $50-$500. 22 Schauer testified to receiving a bonus in 2009 (Tr. 32.), but was impeached by a sworn affidavit in which he stated the contrary. (Tr. 39.) Gravel, however, provided credible and unrefuted testimony that he received one that year. (Tr. 55–56.) 23 Woodcock’s testimony was credible and corroborated by Gravel on this point. (Tr. 57, 85–86.) 24 This finding is based on the credible and unrefuted testimony of Schauer (Tr. 36), Gravel (Tr. 57), and Ugaitafa (Tr. 66). ADVANCED LIFE SYSTEMS, INC. 1725 notify the Union that he would cease giving the customary Christmas bonuses or gifts.25 Monetary payments given to employees at Christmas time were always issued in the form of personal checks or cash from Woodcock and his wife. There were no records kept of such payments and neither Woodcock nor the Company claimed them as employee compensation or business expenses on their respective income tax returns.26 Nor did employees report such payments as income on their income tax returns.27 Legal Analysis I. THE 8(A)(5) VIOLATIONS The complaint alleges that the Company stopped giving unit employees annual pay increases and Christmas bonuses without prior notice to the Union and without affording the Union an opportunity to bargain with respect to the changes, and without first bargaining with the Union to a good-faith bargaining im- passe. The Company admits that employees have not received wage increases since 2012 but denies that it was required to do so. Similarly, the Company admits that it has not given any Christmas payments to employees since 2011, but denies that it has ever given employee bonuses or is required to do so. Section 8(a)(5) of the Act provides that “[i]t shall be an un- fair labor practice for an employer . . . to refuse to bargain col- lectively with the representatives of his employees,” 29 U.S.C. § 158(a)(5); and Section 8(d) identifies the subject matters of such bargaining as including “wages, hours, and other terms and conditions of employment.” Id. § 8(d). An employer vio- lates the Act when it unilaterally alters wages, hours, or other terms or conditions of employment without first negotiating to a valid impasse with the union representing the employees. Covanta Energy Corp., 356 NLRB 706, 727 (2011), citing NLRB v. Katz, 369 U.S. 736, 742–743 (1962) (“Unilateral ac- tion by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected condi- tions of employment under negotiation, and must of necessity obstruct bargaining, contrary to the congressional policy.”) An employer and the representative of its employees are ob- ligated to bargain with each other in good faith regarding wag- es, hours, and other terms and conditions of employment. NLRB v. Borg-Warner Corp., 356 U.S. 342, 349 (1958). The duty to bargain is limited to those subjects; as to all other mat- ters, each party is free to bargain or not to bargain. Id. Among those other matters not requiring bargaining are gifts given to employees by their employers. North American Pipe Corp., 347 NLRB 836, 837 (2006); See, e.g., Benchmark Industries, 270 NLRB 22 (1984), affd. Amalgamated Clothing v. NLRB, 760 F.2d 267 (5th Cir. 1985). 25 Woodcock conceded that he stopped the practice in 2012 and 2013 and, in response to leading questions, attributed it to several factors: helping a family member experiencing financial difficulties, increasing business competition from American Medical Response, and decreas- ing margins in the reimbursement system from Medicare and Medicaid. (Tr. 36, 57–58, 66, 86–89, 93–94.) 26 Woodcock’s testimony as to the personal forms of cash and check payments to employees was not refuted by any company employees. (Tr. 85, 96.) 27 This finding is based on Gravel’s credible testimony. (Tr. 60.) A. Wage Raises The wage increases fall within the ambit of section 8(a)(5) “if they are of such a fixed nature and have been paid over a sufficient length of time to have become a reasonable expecta- tion of the employees and, therefore, part of their anticipated remuneration.” Phelps Dodge Mining Co. v. NLRB, 22 F.3d 1493, 1496 (10th Cir.1994) (quoting NLRB v. Nello Pistoresi & Son, Inc., 500 F.2d 399, 400 (9th Cir.1974)). Periodic wage increases become conditions of employment if they are “an established practice . . . regularly expected by the employees.” Daily News of Los Angeles, 315 NLRB 1236 (1994), enfd. 73 F.3d 406 (D.C. Cir. 1996). On the other hand, if an employer “retain[s] total discretion to grant [wage] increases based on any factors it chooses,” it is doubtful that discontinuing the policy would violate Section 8(a)(5).” Daily News of Los Angeles v. NLRB, 73 F.3d 406, 412 fn. 3 (D.C. Cir. 1996). Indeed, wage increases that “are fixed as to timing but discretionary in amount do not become part of the employees’ reasonable expectations and thus are not considered ‘terms and conditions’ of employment.” Acme Die Casting, 93 F.3d 854, 857 (D.C. Cir. 1996), citing Phelps Dodge, 22 F.3d at 1496 (holding that payments to employees were not a condition of employment where the payments varied in time, recipients, amounts and manner in which calculated). See also Daily News, 73 F.3d at 412 fn. 3 (“fixed timing alone would be suffi- cient to bring the program under Katz”). Further, the compa- ny’s periodic wage increase must establish a discernable pattern or practice in regard to timing, amount and selection of em- ployees to receive the increases. Phelps Dodge, 22 F.3d at 1497, citing Ithaca Journal-News, Inc., 259 NLRB 394, 395 (1981); UARCO, Inc., 283 NLRB 298, 300 (1987) (employer unlawfully discontinued an established 17-year annual wage increase to newly represented employees); Southeastern Michi- gan Gas Co., 198 NLRB 1221, 1222–1223 (1972) (employer violated § 8(a)(5) by discontinuing established 20-year practice of biannual wage increases). Prior to the Union’s representation of unit employees, the Company had a longstanding practice of granting hourly wage increases mainly between 25 to 50 cents once every 6 months or sooner, depending on tenure and performance. Its cessation of such a practice since that time, without notice to the Union, amounts to a unilaterally discontinuation of an expected term of employment. Jensen Enterprises, 339 NLRB 877, 877 (2003) (by withholding customary increases during a potentially long period of negotiations for an agreement covering overall terms and conditions of employment, employer unlawfully changes existing terms and conditions without bargaining to agreement or impasse). Moreover, the unilaterally imposed change was “material, substantial, and significant,” thus impacting the em- ployees or their working conditions in violation of Section 8(a)(5). Toledo Blade Co., 343 NLRB 385 (2004). B. Christmas Payments The inquiry here is whether the Christmas payments were gifts or “wages” in the form of bonuses. See Acme Die Casting, v. NLRB., 93 F.3d 854, 857 (D.C. Cir. 1996); Phelps Dodge Mining Co., Tyrone Branch v. NLRB, 22 F.3d 1493, 1496 (10th Cir. 1994). The Board has construed the term “wages” to in- 1726 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD clude “emoluments of value . . . which may accrue to employ- ees out of their employment relationship.” N. Am. Pipe Corp. & Unite Here, 347 NLRB 836, 837 (2006); See generally Inland Steel Co., 77 NLRB 1, 4 (1948), enfd. 170 F.2d 247 (7th Cir. 1948), cert. denied 336 U.S. 960 (1949). On the other hand, it is recognized that gifts do not become wages or terms and condi- tions of employment simply because they are made in the con- text of an employment relationship. N. Am. Pipe Corp. & Unite Here, 347 NLRB at 837. An employer can make such pay- ments as it pleases. Id. citing NLRB v. Wonder State Mfg. Co., 344 F.2d 210, 213 (8th Cir. 1965), denying enf. in pertinent part at 147 NLRB 179 (1964). The Board has found that an employer cannot unilaterally discontinue a bonus if it is of a fixed nature and has been paid over a sufficient length of time or with an explicit promise of future payments, thereby creating a reasonable expectation among employees that the payment will be received as part of their remuneration from employment. North American Pipe Corp., 347 NLRB at 838. Thus, a holiday bonus is a mandatory bargaining subject if the employer’s conduct raises the employ- ees’ reasonable expectation that the bonus will be paid. Waxie Sanitary Supply, 337 NLRB 303, 304 (2001) (unlawful discon- tinuance of a holiday bonus where the employer based the amount in part on individual performance and company profits, and posted the monthly gross profits in the employee lunch- room so that employees could monitor the size of their antici- pated bonus for the prior 3 consecutive years). See, e.g., E.C. Waste, Inc., 348 NLRB 565 (2006) (unlawful discontinuance of a supplemental bonus, given on top of statutorily mandated bonus, which was given at Christmas, every year until Union was elected, and in a significant amount, $900, per employee); Sykel Enterprises., 324 NLRB 1123, 1124–1125 (1997) (un- lawful discontinuance of a Christmas bonus where it was given to different employees in different amounts, determined solely by the employer, and based in part on “how the Company oper- ated that year” for the prior four consecutive years). Woodcock began hosting Christmas parties for Company employees the mid-1990s. They began as pot-luck dinners, but graduated to catered events in which the monetary value of payments and things given to employees increased over the years as the Company expanded its operations. At each Christ- mas party hosted by Woodcock at the Company facility from December 2008 through December 2011, he gave a total of between $5000 and $15,000 to unit employees through cash, checks, gift cards, TVs, clothing, raffle tickets for prizes, in- cluding cruises and other trips. On at least one occasion, pay- ments were also distributed by the dispatch office prior to the Christmas party. The monetary value of each payment or thing given to each employee ranged in value from $50 to $500. Here, the critical issue is whether the distribution chain of some form of Christmas compensation was broken in instances when employees were given raffle tickets and a chance to win valuable prizes. In Benchmark Industries, the Board found an employer had not violated Section 8(a)(5) when it unilaterally ended its practice (in existence for at least 3 years) of giving employees hams and holiday lunches or dinners as a Christmas bonus. Benchmark Industries, 270 NLRB 22 (1984). The Board concluded these were token items which could not be fairly characterized as compensation or as terms and conditions of employment. Id. Additionally, in Harvstone, the Board held that unilaterally discontinued Christmas bonuses, prizes and parties were in the nature of gifts rather than terms and condi- tions of employment. Harvstone Mfg. Corp., 272 NLRB 939 (1984). However, in Benchmark, the Board plurality noted that the facts did not involve discontinuance of Christmas cash bo- nuses. Also, the Board acknowledged that “[i]n our view there are circumstances where Christmas bonuses may become part of the employees’ remuneration and, therefore, a subject over which an employer must bargain with a union prior to discon- tinuing such payments.” Freedom Wlne-TV, 278 NLRB 1293, 1296 (1986), citing Benchmark, supra at fn. 5. The present circumstances are those in which the Christmas payments con- stituted bonuses and a mandatory subject of bargaining. These Christmas payments were given in the context of the employment relationship. The Company insists that these pay- ments were “gifts” made on behalf of Woodcock family’s per- sonal funds and are, therefore, not attributable to the Company. Its claim is bolstered by the absence of any documentary evi- dence to refute Woodcock’s credible testimony that the cash and checks given, and gift cards and prizes procured came from personal funds. However, the remaining circumstantial evi- dence strongly supports the charge that the Christmas payments were distributed on behalf of the Company. See H.S.M. Ma- chine Works, Inc., 284 NLRB 1482, 1494 (1987) (cash pay- ments and personal gifts given by owner of 95 percent of com- pany deemed given by the company), citing NLRB v. Rubatex Corp., 601 F.2d 147, 150 (4th Cir. 1979). First, Woodcock and his wife were majority owners of the Company. Secondly, the payments were given at the Christmas party, which was held at the Company’s facility (since an employee always had to be on shift) or by the dispatch office. Employees only received a payment if they attended the party. Lastly, while Woodcock denied that the purpose of the party and payments were em- ployee retention-based, it was no doubt aimed at boosting em- ployee morale, since employees had to be present to receive a gift and the event made them interact. Additionally, it appears that all unit employees who attended the party received a Christmas payment in some form or anoth- er. Only employees who recently started working for the Com- pany were ineligible for cash payments. For example, Ugaitafa only received a $50 coffee gift card instead of being entered into the drawing, since he had only worked for the Company for one month as of December 2011. Regardless of the payment form, Woodcock distributed significant payments to unit em- ployees, ranging from $50 to $500. In 2011, prior to the Un- ion’s arrival, Woodcock sought the employees’ approval to forgo Christmas payments and, instead, give the total funds to an employee who lost his house in a mudslide. This series of events demonstrates that the Company knew that unit employ- ees expected to receive Christmas payments in some form or another. Considering that most unit employees received pay- ments, the significance of the amount, and the consistency of the payments, Woodcock’s practice created a reasonable expec- tation among unit employees that the Christmas party payment would be received as part of their remuneration from employ- ment. See Laredo Coca-Cola Bottling Co., 241 NLRB 167, ADVANCED LIFE SYSTEMS, INC. 1727 173–174 (1979), enfd. 613 F.2d 1342–1343 (5th Cir. 1980), cert. denied 449 U.S. 889 (1980) (unlawful discontinuance of a Christmas bonus where it was given the previous 3 years and employees received payments in the form of cash, beer, soda, hams, or fruitcakes based on employee earnings and subjective evaluation of employee’s performance and attitude). Finally, Woodcock discontinued the payments in 2012 and 2013, both subsequent to the union certification. Woodcock attributed this to a myriad of factors, including the need to help a family member with financial difficulties, increased business competition from a competitor, American Medical Response, and decreased margins in the Company’s reimbursement sys- tem from Medicare and Medicaid. Specifically, he claims that profits were down and he could not afford to distribute pay- ments as he had in the past. The Company also notes that it did not deduct the payments as business expenses. In relying on such economic arguments, however, Woodcock essentially conceded that past Christmas payments were bonus- es because they were tied to production and the financial health of the Company. See North American Pipe Corp., 347 NLRB at 837; Sykel Enterprises, 324 NLRB at 1124–1125. Moreover, the Company’s failure to report the payments as business ex- penses is inconsequential, as unreported tax withholdings alone are insufficient to prove that payments are gifts, and not bonus- es or wages. See North American Pipe Corp., 347 NLRB at 840. Under the circumstances, the Company’s discontinuation of payments at its annual Christmas party violated Section 8(a)(5) and (1) of the Act. II. THE 8(A)(1) VIOLATIONS The complaint also alleges that Woodcock made several co- ercive statements to employees relating to the Union: (1) that he would not be able to give them raises if they voted for the Union; (2) subsequently, after the Union was certified as labor representative, that he could not give them their raises because the Union was there; and (3) that he did not need to give wage increases during contract negotiations. The Company denies the allegations. Section 8(a)(1) of the Act makes it an unfair labor practice for an employer “to interfere with, restrain, or coerce employ- ees in the exercise of the rights guaranteed in section [7 of the Act].” 29 U.S.C. § 158(a)(1). Section 7 rights include the right “to self-organization, to form, join, or assist labor organizations [and] to bargain collectively through representatives of their own choosing.” 29 U.S.C. § 157. Statements that the Company would not be able to give em- ployees raises if they voted for the Union and, subsequently, if a union represented them, would certainly run afoul of the Act. Such statements would be unlawful because they constitute threats of reprisal. Winkle Bus Co., 347 NLRB 1203, 1205 fn. 12 (2006). In this case, Woodcock told Schauer, prior to the representation election, that he would be unable to give raises if employees voted in favor of the union. That statement effec- tively restrained protected Section 7 activity. See Milum Tex- tile Services Co., 357 NLRB 2047, 2058 (2011) (implicitly threatening to reduce wages if employees selected union). Simi- larly, Woodcock’s statement that he would freeze pay raises because employees were now represented by a union, constitut- ed a threat of reprisal. Teksid Aluminum Foundry, 311 NLRB 711, 712–713 (1993) (explicit threat of wage freeze). Similarly, Woodcock told employees unit employees that pay raises had always been discretionary and, since they select- ed a union to represent them, now needed to be negotiated. Jensen Enterprises, 339 NLRB 877, 877 (2003) (employer’s statement that wages would be frozen until a collective- bargaining agreement is unlawful if employer has a past prac- tice of granting periodic wage increases). First Student, Inc., 341 NLRB 136, 141 (2004) (employer's announcement to em- ployees that there would be no wage increase during negotia- tions, notwithstanding history of providing annual wage in- creases, violated Sec. 8(a)(1)); Illiana Transit Warehouse Corp., 323 NLRB 111, 113–114 (1997); 299 Lincoln Street, Inc., 292 NLRB 172, 174 (1988); More Truck Lines, 336 NLRB 772, 773–775 (2001), enfd. 324 F.3d 735 (D.C. Cir. 2003). Such an announcement suggested to employees that the employer intends to unilaterally take away benefits and require the union to negotiate to get them back. See also Covanta En- ergy Corp., 356 NLRB 706, 717 (2011). Under the circum- stances, the Company violated Section 8(a)(1) of the Act. III. THE 8(A)(3) VIOLATION The complaint alleges that the Company also violated Sec- tion 8(a)(3) of the Act by eliminating its customary biannual wage increases raises for a majority of its employees since July/August 2012 and Christmas bonuses after December 2011 because a majority of its employees voted in favor of the Union to served as their labor representative and engaged in concerted activities, and to discourage these or other protected concerted activities. The Company denies the allegations. An employer violates Section 8(a)(3) by taking adverse ac- tion against an employee because the employee engages in, or is suspected of engaging in, union activities. Mays Electric Co., 343 NLRB 121, 134 (2004). Under Wright Line, 251 NLRB 1083 (1980), enfd. 602 F.2d 899 (1st Cir. 1981, cert. denied 455 U.S. 989 (1982), the General Counsel has the burden of establishing that union activity was a motivating factor in the Respondent's action alleged to constitute discrimination in vio- lation of Section 8(a)(3) of the Act. The elements required to support such prima facie violations of Section 8(a)(3) are union or other protected concerted activity by employees, employer knowledge of the activity, and a connection between union animus by the employer and adverse employment action. See, e.g., Consolidated Bus Transit, 350 NLRB 1064, 1065 (2007); Desert Springs Hospital Medical Center, 352 NLRB 112 (2008); American Gardens Management Co., 338 NLRB 644, 645 (2002). Once the General Counsel has established a prima facie case, the burden shifts to the Respondent to show it would have, and not merely could have, terminated an employee even in the absence of protected activity. Chadbury Beverages, Inc. v. NLRB, 160 F.3d 24, 31 (D.C. Cir. 1998). There is no dispute that the Company knew that employees voted in favor of union representation and, after the Union was certified, proceeded to discontinue its past practice of granting periodic wage increases and Christmas payments. Considering his prior consistent practice of paying Christmas bonuses, 1728 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD Woodcock was clearly making a statement that the injection of the Union into the employer-employee relationship would have repercussions; his discontinuance of the wage increases, and Christmas bonuses evidenced animus toward the Union. Moreover, the aforementioned 8(a)(1) violations of threats to freeze wages before the Union was certified and then freezing wages after the Union came in, shed additional evidence of Woodcock’s animus and unlawful motivation. See Ridgeview Industries, 353 NLRB 1096, 1097 fn. 3 (2009) (evidence of numerous 8(a)(1) violations is sufficient to demonstrate unlaw- ful motive with respect to an 8(a)(3) violation). The burden thus shifts to the Company to demonstrate that it would have, even in the absence of union certification, frozen wages and Christmas payments. Woodcock attributed the wage freeze to increased competition and health insurance costs and decreased governmental reimbursement rates. However, his vague explanation was insufficient to overcome the clearly pretextual nature of his actions and fell short of meeting the Company’s rebuttal burden. See Stevens Creek Chrysler Jeep Dodge, 357 NLRB 633, 637 (2011), enfd. sub nom. Mathew Enterprises. v. NLRB, 498 Fed.Appx. 45 (D.C. Cir. 2012) (find- ing of pretext defeats an employer's attempt to meet its rebuttal burden). Under the circumstances, the Company violated Section 8(a)(3) and (1) of the Act. An argument can be made that the finding and conclusion that the wage freeze violated Section 8(a)(5) makes it unnecessary to sustain an 8(a)(3) violation. See Bryant & Stratton Business Institute, 321 NLRB 1007 fn. 4 (1996) (unnecessary to pass on alternative finding that wage freeze also violated Section 8(a)(3) in light of finding that the wage freeze violated Section 8(a)(5) and that finding would not materially affect the remedy). Such a decision, however, is one best left to the Board upon review of any exceptions to my findings and conclusions. IV. STANDING TO ISSUE COMPLAINT Finally, the Company asserts as an affirmative defense that the Regional Director of Region 19 and then-Acting General Counsel were improperly appointed based, in part, on a lack of quorum and, thus, lacked standing to issue this complaint, un- der Noel Canning v. NLRB, 705 F.3d 490 (D.C. Cir. 2013), pet. for cert. pending, No. 12–1281 (filed Apr. 25, 2013). The Board rejected that argument in Belgove Post Acute Care Cen- ter, 359 NLRB 633 (2013), and Bloomingdale's, Inc., 359 NLRB 1015 (2013). CONCLUSIONS OF LAW 1. By telling unit employees that they will not get raises if they choose, or have chosen, to be represented by a union, the Company violated Section 8(a)(1) of the Act. 2. By refusing to give unit employees wage increases be- cause they chose to be represented by a union, the Company violated Section 8(a)(1) of the Act. 3. By refusing to give employees their traditional Christmas payments because they chose to be represented by a union, the Company violated Section 8(a)(1) of the Act. 4. By unilaterally ceasing to grant established wage increases to unit employees, the Company violated Section 8(a)(5) and (1) of the Act. 5. By unilaterally ceasing to grant Christmas payments to unit employees, the Company violated Section 8(a)(5) and (1) of the Act. 6. By discontinuing its custom and practice of granting unit employees periodic wage increases and Christmas payments because the employees chose to be represented by a union, the Company violated Section 8(a)(3) and (1) of the Act. 7. The aforementioned unfair labor practices affected com- merce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Company has engaged in certain un- fair labor practices, I shall order it to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. [Recommended Order omitted from publication.]