Twinbrook OpCo LLC

373 NLRB No. 6 NOTICE: This opinion is subject to formal revision before publication in the bound volumes of NLRB decisions. Readers are requested to notify the Ex- ecutive Secretary, National Labor Relations Board, Washington, D.C. 20570, of any typographical or other formal errors so that corrections can be included in the bound volumes. Twinbrook OpCo, LLC and SEIU Healthcare Pennsyl- vania, CTW, CLC. Case 06–CA–283709 December 28, 2023 DECISION AND ORDER BY CHAIRMAN MCFERRAN AND MEMBERS KAPLAN AND PROUTY Upon a charge filed on September 29, 2021, the General Counsel issued a complaint and notice of hearing on May 4, 2022, alleging that Twinbrook OpCo, LLC (the Re- spondent) violated Section 8(a)(5) and (1) when it ceased making shift differential payments without providing SEIU Healthcare Pennsylvania, CTW, CLC (the Union) with prior notice and an opportunity to bargain. On May 26, 2022, the Respondent filed an answer in which it de- nied the commission of any unfair labor practices and as- serted various affirmative defenses. On August 25, 2022, the Respondent, the Charging Party, and the General Counsel filed a joint motion to waive a hearing and decision by an administrative law judge and to transfer this proceeding to the National Labor Relations Board for a decision based on a stipulated rec- ord. On October 3, 2022, the Board granted the parties’ joint motion. Thereafter, the General Counsel, the Charg- ing Party, and the Respondent each filed briefs, and the General Counsel filed an answering brief. The Board has delegated its authority in this proceeding to a three-member panel. On the entire record and briefs, the Board makes the fol- lowing FINDINGS OF FACT I. JURISDICTION At all material times, the Respondent, a Pennsylvania limited liability company, with an office and place of busi- ness in Erie, Pennsylvania, has been engaged in operating a skilled nursing facility. During the 12-month period pre- ceding issuance of the complaint, the Respondent derived gross revenues in excess of $100,000 and purchased and received at its facility goods valued in excess of $5000 di- rectly from points outside the Commonwealth of Pennsyl- vania. At all material times, the Respondent has been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act, and a health care in- stitution within the meaning of Section 2(14) of the Act. At all material times, the Union has been a labor organi- zation within the meaning of Section 2(5) of the Act. 1 All subsequent dates are in 2021 unless otherwise noted. 2 The collective-bargaining agreement is effective July 29, 2021, through September 30, 2024. II. ALLEGED UNFAIR LABOR PRACTICES A. Stipulated Facts On April 15, 2021,1 the Respondent purchased Guard- ian Elder Care of Erie, IV, LLC and its wholly owned sub- sidiary Twinbrook Healthcare and Rehabilitation Center (collectively, “Guardian”), and has since continued to op- erate the facility as a skilled nursing provider without in- terruption. On April 16, the Respondent sent employees a letter, which notified them that the transfer of operations from Guardian to the Respondent would become effective on April 21 and offered them continued employment at their same rate of pay. After the April 21 transition, the Respondent continued Guardian’s practice of paying bar- gaining unit employees a shift differential of an additional $1 per hour for second shift and $0.50 per hour for third shift. Prior to the transfer of ownership, the Union became the exclusive collective-bargaining representative of the Guardian units, but Guardian and the Union had not yet reached agreement on an initial collective-bargaining agreement by the time of the transfer. Following the April 21 transition, the Respondent and the Union commenced bargaining for a collective-bargaining agreement, with bargaining sessions taking place from April through July. In May, without giving prior notice to the Union, the Re- spondent increased employees’ shift differential pay from $1 per hour to $2 per hour for second shift and from $0.50 per hour to $1 per hour for third shift; the Respondent also began paying employees working weekend shifts an addi- tional $2 per hour. The Respondent issued a memoran- dum to employees notifying them of these increases but did not notify the Union of the changes to the shift differ- ential amounts. The Respondent and the Union eventually reached a collective-bargaining agreement (“the Agreement”) in July.2 The topic of shift differential payments was never raised or discussed by the parties at any bargaining ses- sion, and the Agreement does not contain a provision ad- dressing shift differential payments. The Respondent con- tinued to pay employees the enhanced shift differential during the first pay period after the collective-bargaining agreement took effect, from August 1 through 14. Beginning in the pay period August 15 through 28, with a pay date of September 3, without giving the Union prior notice or an opportunity to bargain, the Respondent uni- laterally eliminated shift differential pay for licensed prac- tical nurse (LPN) and certified nursing assistant (CNA) bargaining unit employees.3 On September 9, the Union filed a grievance regarding the elimination of shift differ- ential payments. The Respondent denied the grievance, claiming to have no obligation to continue the payments, give notice, or bargain over this change. 3 CNAs are included in the service and maintenance bargaining units. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 2 B. The Parties’ Contentions The General Counsel alleges that the Respondent vio- lated Section 8(a)(5) and (1) by unilaterally terminating shift differential payments, a mandatory subject of bar- gaining and a material, substantial, and significant part of employees’ compensation, without affording the Union notice or an opportunity to bargain. The General Counsel argues that the Agreement was silent as to shift differential payments, and thus the Agreement did not terminate those payments, nor did the Union waive its right to bargain over them. The Respondent contends that it did not violate Section 8(a)(5) and (1). It argues that the Agreement’s silence about shift differential payments, coupled with article 30 of the Agreement, the Agreement's integration clause,4 ef- fectively terminated those payments. As a result, it takes the position that continuing to make the payments after the Agreement went into effect would have amounted to an unlawful modification of the contract. C. Discussion Although the Respondent does not argue that this case should be decided under the “contract coverage” standard articulated in MV Transportation, Inc., 368 NLRB No. 66 (2019), its defense to the General Counsel’s unilateral- change allegation under Section 8(a)(5) is effectively based on the argument that the collective-bargaining agreement authorized it to make the unilateral change at issue here, that is, the elimination of shift differential pay- ments. Thus, the Respondent invokes the agreement’s management rights clause (art. 19), wage provision (art. 25), and integration clause (art. 30). Accordingly, we find that MV Transportation provides the correct framework for analyzing the Respondent’s arguments.5 In MV Transportation, the Board explained that: Under contract coverage, the Board will examine the plain language of the collective-bargaining agreement to determine whether action taken by an employer was within the compass or scope of contractual language granting the employer the right to act unilaterally. . . . On the other hand, if the agreement does not cover the em- ployer's disputed act, and that act has materially, 4 The General Counsel refers to art. 30 as a “zipper” clause. The Respondent, in all but one instance, refers to it as an “integration” clause. We believe the Respondent’s terminology is more precise. Although sometimes used interchangeably, an integration clause such as art. 30, “exclud[es] from coverage any external agreements not made an explicit part of the parties’ collective bargaining agreement.” By contrast, zipper clauses state that the parties have had the opportunity to bargain over all mandatory subjects of bargaining and that they waive their right to bar- gain over such matters during the term of the agreement. Zipper clauses may coexist with integration clauses, although that is not the case here. R. Wayne Estes & Kirsten C. Love, The Ubiquitous Yet Illusive “Mer- ger” Clause in Labor Agreements: Semantics, Applications, and Effect on Past Practice, 87 Ky. L.J. 1, 47 (1999). We mean no criticism of the General Counsel, as our concurring colleague suggests, but merely point out that while this nomenclature is commonly used interchangeably by parties and in the resulting case law, the clause at issue here is more substantially and significantly changed a term or condi- tion of employment constituting a mandatory subject of bargaining, the employer will have violated Section 8(a)(5) and (1) unless it demonstrates that the union clearly and unmistakably waived its right to bargain over the change or that its unilateral action was privileged for some other reason. Id., slip op. at 2. For the reasons that follow, we conclude that neither prong of the MV Transportation test was satisfied here. First, the elimination of shift differentials was not “within the compass or scope” of any contractual provision authorizing unilateral action by the Respondent. Second, the Respondent has failed to demonstrate either that the Union clearly and unmistakably waived its right to bargain over the elimination of shift differentials, a term and condition of em- ployment constituting a mandatory subject of bargaining, or that some other reason privileged the Respondent’s unilateral action. 1. The collective-bargaining agreement does not author- ize the Respondent to unilaterally eliminate shift differ- ential payments Applying the first prong of the MV Transportation test, we find that the contract was silent as to the payment of shift differentials and the Respondent’s right to act unilat- erally with respect to that subject. Indeed, the Respondent disclaims any argument that a provision of the collective- bargaining agreement privileged it to act unilaterally. It concedes that the collective-bargaining agreement does not expressly address shift differential payments and that the parties did not discuss this term and condition of em- ployment during negotiations.6 In fact, the premise of the Respondent’s argument is that it was effectively fore- closed from paying the shift differentials because article 25 of the Agreement, which covers employees’ wages, does not expressly authorize such payments. We disagree. Article 25 speaks to minimum starting rates of pay, relative pay rates, increases in pay rates, the timing of wage payments, payroll errors, and unit mem- bers’ right to participate in the 401(k) plan on the same terms and conditions as nonunit hourly employees. None of these topics suggests that the parties intended to precisely referred to as an integration clause. As stated below, we find instructive the Board’s cases discussing zipper clauses in the context of contractual waiver, notwithstanding the Respondent’s references to the Agreement’s integration clause. 5 Chairman McFerran acknowledges that MV Transportation, above, is currently governing law, and joins her colleagues in applying that standard for institutional reasons but adheres to and reiterates her partial dissent in that case. Member Prouty also recognizes that MV Transportation is extant Board law and applies it here for insti- tutional reasons, but he would be open to reconsidering the MV Trans- portation standard in a future appropriate case. 6 Although the Respondent argues that all mandatory subjects of bar- gaining were discussed during bargaining, the Joint Stipulation of Facts states that “[t]he issue of shift differential pay was not raised or discussed at the bargaining sessions.” TWINBROOK OPCO, LLC foreclose the payment of shift differentials, specifically, or any other forms of compensation. Moreover, even if arti- cle 25’s silence as to shift differentials could somehow be interpreted in isolation as bringing the elimination of shift differential payments “within the compass or scope of contractual language granting the employer the right to act unilaterally,” to allow the unilateral termination of shift differential payments would be facially inconsistent with article 25’s mandate that “[n]o employee’s rate shall be lowered after hire.” Similarly, article 19 (Management Rights), which does not directly or indirectly cover any type of compensation, also did not terminate the shift dif- ferential payments or privilege the Respondent to act uni- laterally with regard to them. Even if article 19 could be interpreted to cover shift differential payments, it requires the Respondent to give the Union 10 days’ notice before making any changes. The Respondent admits that it did not give the Union any such notice. Accordingly, article 19 cannot be the basis for the Respondent’s unilateral ac- tion. We reject the Respondent’s arguments that these provisions excuse its obligation to bargain over the shift differential payments. In short, the Respondent’s elimination of shift differen- tial payments was not covered by the contract. We thus turn to the second prong of the MV Transportation test, which focuses on the issue of waiver. 2. The Union did not waive its right to bargain over the termination of shift differential payments As the Board has long held, “[t]he duty to bargain con- tinues during the term of a collective-bargaining agree- ment with respect to mandatory subjects of bargaining not covered by the agreement.” MV Transportation., above, slip op. at 3, citing Jacobs Mfg. Co., 94 NLRB 1214, 1217–1218 (1951), enfd. 196 F.2d 680 (2d Cir. 1952).7 The Respondent does not meaningfully dispute that the shift differential payments were a material term or condi- tion of employment and a mandatory subject of bargain- ing. See Royal Baking Co., 309 NLRB 155, 156 (1992). Accordingly, under MV Transportation, the Respondent was required to give the Union notice and an opportunity to bargain over the termination of shift differential pay- ments, a mandatory subject of bargaining, “unless it [can] demonstrate[] that the union clearly and unmistakably waived its right to bargain over the change or that [the Re- spondent]s] unilateral action was privileged for some other reason.” As MV Transportation explained: Waiver can be established through bargaining history and past practice as well as through the provisions of a collective-bargaining agreement. . . . And even where a contract does not cover the disputed change, contractual language still may be relevant to a waiver analysis to- gether with bargaining history and past practice. 7 Chairman McFerran’s partial dissent in MV Transportation, Inc., does not affect her agreement with this principle. MV Transportation, above, slip op. at 2 fn. 7 (citation omit- ted). “[I]t is the employer's burden to show that the contrac- tual waiver is explicitly stated, clear and unmistakable.” Lo- cal Joint Executive Board of Las Vegas v. NLRB, 540 F.3d 1072, 1079 (9th Cir. 2008) (internal quotations omitted). Despite the Respondent’s insistence that it is not mak- ing a waiver defense, waiver is necessarily the determina- tive issue here under the controlling legal framework for determining whether the Respondent had the authority to act unilaterally. In other words, the question is whether the Union clearly and unmistakably waived its right to bar- gain over shift differential payments by the absence of a reference to shift differential payments in articles 19 and 25 of the collective-bargaining agreement, and by agree- ing to the language in article 30, the integration clause, all in circumstances where the parties stipulate that the topic of shift differential payments was never raised or dis- cussed at any bargaining session. Regarding articles 19 and 25, in addition to rejecting the Respondent’s arguments as to these articles for the reasons stated above, we find that their silence as to shift differen- tial payments and the lack of discussion of shift differen- tials during negotiations—while those payments contin- ued to be made—cannot meet the “clear and unmistaka- ble” waiver standard that would allow the Respondent to terminate those payments without bargaining. Turning to article 30, entitled “Entire Agreement,” that provision states: This Agreement represents the entire understanding be- tween [the parties] and there are no agreements, condi- tions or understandings, either oral or written, other than as set forth herein. It is further agreed that no amend- ment, change, modification or addition to this Agree- ment shall be binding upon either party hereto, unless reduced to writing and signed by both of the parties. The Respondent relies on article 30 to argue that the collec- tive-bargaining agreement must be respected and that it was “only paying wages per the terms of that contract,” asserting that “the Board does not have the right . . . to remove the in- tegration clause that the parties agreed to include in Article 30.” The mere presence of article 30 is insufficient to clearly and unmistakably waive the Union’s right to bargain over the termination of an existing term or condition of employ- ment regarding a mandatory subject of bargaining. In an- alyzing the language of article 30, we find instructive the Board’s cases discussing zipper clauses in the context of contractual waiver. In Viejas Band of Kumeyaay Indians d/b/a Viejas Casino & Resort, 366 NLRB No. 113 (2018), the Board found that the employer violated Section 8(a)(5) by unilaterally ending its policy of paying unit and nonunit employees the same annual yearend bonus without giving DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 4 the union notice or an opportunity to bargain. In attempt- ing to justify its actions, the respondent argued that the zipper clause in its contract privileged the unilateral change. The zipper clause in that case provided: The Tribe and the Union, for the term of this Agreement, each voluntarily and unqualifiably [sic] waive the right to bargain, and each agrees that the other shall not be obligated to bargain collectively, with respect to any subject, matter or practice involving the terms and con- ditions of employment of the bargaining unit other than as specifically required by an express provision of this agreement. Id., slip op. at 1 fn. 1. Rejecting this argument, the Board observed that “generally worded zipper clauses such as this one do not amount to clear and unmistakable waiver absent special facts not present here, such as the parties having ac- tively bargained over the zipper clause or discussed the clause’s effect” on material terms or conditions of employ- ment. Id. (Emphasis added.) Similarly, in Ohio Power Co., the parties’ agreement provided that: The parties agree that this contract incorporates their full and complete understanding and that any prior written or oral agreements or practices are superseded by the terms of this Agreement. The parties further agree that no such written or oral understandings or practices will be recognized in the future unless committed to writing and signed by the parties as a Supplement to this Agree- ment. This Agreement shall govern the parties’ entire relation- ship and shall be the sole source of any and all rights or claims which may be asserted in arbitration hereunder or otherwise. The parties for the life of this Agreement hereby waive any rights to request to negotiate, or to negotiate or to bargain with respect to any matters contained in this Agreement except as specifically noted otherwise herein. 317 NLRB 135, 135 (1995). In assessing the above provi- sion, the Board explained that generally worded zipper clauses will not be construed as waivers of statutory bargain- ing rights unless the parties’ bargaining history established that “the matter at issue has been fully discussed and con- sciously explored during negotiations and the union has con- sciously yielded or clearly and unmistakably waived its inter- est in the matter.” Id. at 136. On the facts of the case, and 8 In Pepsi-Cola Distributing Co., 241 NLRB 869, 869–870 (1979), enfd. 646 F.2d 1173 (6th Cir. 1981), a successor employer honored its predecessor’s collective-bargaining agreement but was unaware of the extracontractual practice of paying a yearend bonus until 6 months be- fore it was due and terminated it without consulting with the union. Based on the predecessor’s past practice, employee expectations, and the despite the detailed language regarding prior agreements and waiver, the Board concluded that the parties did not mutually intend the zipper clause to abolish the practice in question, which was not addressed in the contract, and which had ex- isted over the course of several collective-bargaining agree- ments containing the same zipper clause.8 Notwithstanding the above precedent, the Respondent points to Electrical Workers Local 1466 v. NLRB, 795 F.2d 150 (D.C. Cir. 1986), enfg. Columbus & Southern Ohio Electric Co., 270 NLRB 686 (1984), to argue that article 30 removes the Union’s right to bargain over shift differential payments during the term of the contract. In that case, the court affirmed the Board’s finding of waiver, and dismissal of the complaint, because the union had agreed to an integration clause after the company had re- fused to respond to the union’s request for a list of prior agreements and understandings that the integration clause would eliminate, explaining that “‘[a]ll’ means just that – all. What we have [proposed] . . . was to wipe the slate clean before the new contract goes into effect.” 795 F.2d at 154. By contrast, however, in IMI South, LLC, 364 NLRB 1373, 1375 (2016), there was no such explicit dis- cussion of the meaning of the zipper clause in negotiations or in the clause itself. In that case, the Board distinguished Electrical Workers Local 1466 as supporting a finding of waiver from the parties’ expansion of prior versions of the zipper clause while negotiating for a successor collective- bargaining agreement, making it evident from the bargain- ing history that the union understood the consequences of the expanded language and its effect on the status quo. IMI South, above at 1374–1377. Applying the “clear and unmistakable waiver” standard to the facts in IMI South, the Board also found no waiver of the union’s right to bargain over the transfer of unit work because the gen- erally worded zipper clause “does not mention, or in any way refer to, the transfer of unit work.” Id. at 1375. Here, similar to IMI South, LLC, article 30 makes no reference to shift differential payments. In addition, there is no evidence of bargaining history relating to article 30, and since the issue of shift differential payments was not raised or discussed at the bargaining sessions, it could not have been discussed in relation to article 30 or any other contract provision. Joint Stipulation of Facts ¶¶ 27, 28, 38. Moreover, the Respondent gave employees every ex- pectation that the shift differentials would continue, from its offer of hire “at your current rate of pay,” to the inclu- sion of those payments in each paycheck from the time it purchased the facility until negotiations concluded and continuing through the first pay period after the Agree- ment went into effect,9 after having increased the amount employer’s representation to employees that it would not change the pay structure, the Board found that there was no clear and unmistakable waiver by the union, notwithstanding the existence of a zipper clause. 9 The Respondent unilaterally increased employees’ shift differential rates in May while bargaining was still ongoing, rather than maintaining the same policy throughout bargaining. This increase further enhanced TWINBROOK OPCO, LLC of the payments during negotiations. Like the union in Pepsi-Cola Distributing Company, above at 870, the Un- ion here had no reason to request that the shift differential payments be expressly provided for in the collective-bar- gaining agreement, given the Respondent’s consistent payment of shift differentials. As in the cases described above and in contrast to Elec- trical Workers Local 1466, the parties here entered into a generic integration clause without any discussion of its ef- fect either on shift differential payments specifically or on article 25, which affirmatively prohibited the lowering of employees’ wages after hire. Accordingly, the integration clause at issue did not serve to clearly and unmistakably waive the Union’s right to bargain over the shift differen- tial payments which the Respondent had voluntarily adopted and continued to pay through the first pay period after the collective-bargaining agreement went into effect. This finding is consistent with the Board’s long-held view that “the normal function of [zipper] clauses is to maintain the status quo, not to facilitate unilateral changes.” Mur- phy Oil USA, Inc., 286 NLRB 1039, 1039 (1987) (citations omitted); see also IMI South, LLC, above at 1375. For the reasons above, we find that the Respondent’s unilateral cessation of shift differential payments, made without providing the Union notice and an opportunity to bargain, violated Section 8(a)(5) and (1).10 CONCLUSIONS OF LAW 1. Twinbrook OpCo, LLC (the Respondent) is an em- ployer engaged in commerce within the meaning of Sec- tion 2(2), (6), and (7) of the Act. 2. SEIU Healthcare Pennsylvania, CTW, CLC (the Un- ion) is a labor organization within the meaning of Section 2(5) of the Act. 3. The Respondent violated Section 8(a)(5) and (1) of the Act by failing to give the Union notice or an oppor- tunity to bargain before it terminated shift differential pay- ments beginning in the pay period August 15–28, 2021, with a pay date of September 3, 2021. 4. The above unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. REMEDY Having found that the Respondent engaged in certain unfair labor practices, we shall order it to cease and desist employees’ expectation of receiving the shift differential. We note that the General Counsel did not allege that the Respondent’s unilateral in- creases in May violated Sec. 8(a)(5) and (1). 10 We note that the Respondent repeatedly observes that the Act re- quired it to continue paying shift differential payments when it purchased the facility but asserts that this obligation ended once the Agreement was finalized. The Respondent misunderstands the applicable background law. When the Respondent assumed operations on April 21 it continued paying employees the shift differentials and even increased them unilat- erally in May. The shift differential payments, then, were an established part of the terms and conditions of employment during the Respondent’s initial operation of the facility. Thereafter, while bargaining for a col- lective-bargaining agreement, the Respondent was prohibited from and to take certain affirmative action designed to effectu- ate the policies of the Act. Specifically, having found that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally terminating shift differential payments without affording the Union notice and an opportunity to bargain, we shall order the Respondent to rescind the un- lawful unilateral change and to make unit employees whole for any loss of earnings and other benefits attribut- able to its unlawful conduct.11 Backpay shall be computed in accordance with Ogle Protection Service, 183 NLRB 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with inter- est at the rate prescribed in New Horizons, 283 NLRB 1173 (1987), compounded daily as prescribed in Kentucky River Medical Center, 356 NLRB 6 (2010). In accordance with our decision in Thryv, Inc., 372 NLRB No. 22 (2022), the Respondent shall also compensate these employees for any other direct or foreseeable pecuniary harms incurred as a result of the unlawful termination of shift differential payments. Compensation for these harms shall be calcu- lated separately from taxable net backpay, with interest at the rate prescribed in New Horizons, supra, compounded daily as prescribed in Kentucky River Medical Center, su- pra. We shall also order the Respondent to compensate unit employees for any adverse 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 agree- ment or Board order, a report with the Regional Director for Region 6 allocating the backpay awards to the appro- priate calendar years for each employee. See AdvoServ of New Jersey, Inc., 363 NLRB 1324 (2016). In addition to the backpay allocation report, we shall order the Respond- ent to file, within 21 days of the date the amount of back- pay is fixed, either by agreement or Board order or such additional time as the Regional Director may allow for good cause shown, with the Regional Director for Region 6 a copy of each backpay recipient’s corresponding W-2 form(s) reflecting the backpay award. Cascades Contain- erboard Packaging—Niagara, 370 NLRB No. 76 (2021), as modified in 371 NLRB No. 25 (2021). ORDER The National Labor Relations Board orders that the Re- spondent, Twinbrook OpCo, LLC, Erie, Pennsylvania, its officers, agents, successors, and assigns, shall unilaterally changing any terms and conditions of employment by virtue of Sec. 8(a)(5) of the Act, absent an overall impasse or contractual agree- ment by the parties to make the change. As demonstrated above, con- trary to the misconception of the Respondent, its subsequent contractual agreement with the Union—which was not negotiated with reference to and did not cover the existing shift differentials—was not an agreement that served to end the statutory duty to maintain the status quo of shift differential payments. 11 The Respondent, without any support or explanation, opposes a make-whole remedy. However, a make-whole remedy providing back- pay for lost wages is standard where an employer unilaterally withheld shift differential payments, and we order it here. See, e.g., Madelaine Chocolate Novelties, Inc., 370 NLRB No. 24, slip op. at 1 (2020). DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 6 1. Cease and desist from (a) Unilaterally changing the terms and conditions of employment of its unit employees without first notifying the Union and giving it an opportunity to bargain. (b) 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 em- ployees in the following bargaining units: LPN UNIT: All full-time and regular part-time Licensed Practical Nurses (LPN’s) employed by Respondent at its facility located at 3805 Field Street, Erie, PA; but excluding all Registered Nurses, Service and Maintenance, Office Clerical employees, Managerial employees, confidential employees, and guards, and professional employees and Supervisors as defined in the Act. SERVICE AND MAINTENANCE UNIT: All full-time and regular part-time Service and Mainte- nance employees employed by Respondent at its facility located at 3805 Field Street, Erie, PA; but excluding all Registered Nurses, Licensed Practical Nurses, Office Clerical employees, Managerial employees, confidential employees, and guards, and professional employees and Supervisors as defined in the Act. (b) Reinstate the shift differential payment policy that was unilaterally terminated beginning in the pay period August 15–28, 2021, with a pay date of September 3, 2021. (c) Make the affected employees whole for any loss of earnings and other benefits, and for any other direct or foreseeable pecuniary harms suffered as a result of termi- nating the shift differential payments, in the manner set forth in the remedy section of this decision. (d) Compensate affected employees for the adverse tax consequences, if any, of receiving lump-sum backpay awards, and file with the Regional Director for Region 6, within 21 days of the date the amount of backpay is fixed, 12 If the facility involved in these proceedings is open and staffed by a substantial complement of employees, the notice must be posted within 14 days after service by the Region. If the facility involved in these pro- ceedings is closed or not staffed by a substantial complement of employ- ees due to the Coronavirus Disease 2019 (COVID-19) pandemic, the no- tice must be posted within 14 days after the facility reopens and a sub- stantial complement of employees have returned to work. If, while closed or not staffed by a substantial complement of employees due to the pandemic, the Respondent is communicating with its employees by electronic means, the notice must also be posted by such electronic either by agreement or Board order, a report allocating the backpay awards to the appropriate calendar year(s) for each employee. (e) File with the Regional Director for Region 6, within 21 days of the date the amount of backpay is fixed by agreement or Board order or such additional time as the Regional Director may allow for good cause shown, a copy of each backpay recipient’s corresponding W-2 form(s) reflecting the backpay award. (f) Preserve and, within 14 days of a request, or such additional time as the Regional Director for Region 6 may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social 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) Post at its facility in Erie, Pennsylvania, copies of the attached notice marked “Appendix.”12 Copies of the notice, on forms provided by the Regional Director for Re- gion 6, after being signed by the Respondent’s authorized representative, shall be posted by the Respondent and maintained for 60 consecutive days in conspicuous places, including all places where notices to employees are cus- tomarily posted. In addition to physical posting of paper notices, notices shall be distributed electronically, such as by email, posting on an intranet or an internet site, and/or other electronic means, if the Respondent customarily communicates with its employees by such means. The Respondent shall take reasonable steps to ensure that the notices are not altered, defaced, or covered by any other material. If the Respondent has gone out of business or closed the facility involved in these proceedings, the Re- spondent shall duplicate and mail, at its own expense, a copy of the notice to all current employees and former em- ployees employed by the Respondent at any time since August 15, 2021. (h) Within 21 days after service by the Region, file with the Regional Director for Region 6 a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to com- ply. Dated, Washington, D.C. December 28, 2023 means within 14 days after service by the Region. If the notice to be physically posted was posted electronically more than 60 days before physical posting of the notice, the notice shall state at the bottom that “This notice is the same notice previously [sent or posted] electronically on [date].” 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 National 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.” TWINBROOK OPCO, LLC ______________________________________ Lauren McFerran, Chairman _____________________________________ David M. Prouty, Member (SEAL) NATIONAL LABOR RELATIONS BOARD MEMBER KAPLAN, concurring. For the following reasons, I concur in my colleagues’ conclusion that the Respondent’s admitted elimination of employees’ shift differential payments (“shift differen- tials”) violated Section 8(a)(5) and (1), as alleged by the General Counsel.1 Discussion The determination whether the Respondent’s admitted elimination of employees’ shift differentials violated Sec- tion 8(a)(5) and (1), as alleged by the General Counsel, ultimately turns on whether the Agreement altered the Re- spondent’s obligation to make the payments. The Re- spondent does not meaningfully dispute that the shift dif- ferentials were a material term or condition of employ- ment and a mandatory subject of bargaining.2 See Royal Baking Co., 309 NLRB 155, 156 (1992). In fact, the Re- spondent gave employees every expectation that the shift differentials would continue by including the payments in each paycheck from the time it purchased the facility until negotiations concluded and the Agreement went into 1 I acknowledge and apply Paragon Systems, Inc., 371 NLRB No. 104 (2022), as Board precedent regarding modifications to the Board’s electronic notice-posting requirements, although I expressed disagree- ment there with the Board’s approach and would have adhered to the position the Board adopted in Danbury Ambulance Service, Inc., 369 NLRB No. 68 (2020). Further, I would require the Respondent to compensate the affected employees for other pecuniary harms only insofar as the losses were di- rectly caused by the unlawful termination of the shift differential pay- ments, or indirectly caused by the unlawful action where the causal link between the loss and the unfair labor practice is sufficiently clear, con- sistent with my partial dissent in Thryv, Inc., 372 NLRB No. 22 (2022). 2 The Respondent repeatedly observes that the Act required it to con- tinue the shift differentials when it purchased the facility but that this obligation ended once the Agreement was finalized. The Respondent misunderstands the applicable law. The Respondent, which does not contend that it was a perfectly clear successor, had the right to “reset the status quo” and implement different initial terms and conditions of em- ployment—including eliminating the shift differentials—upon taking over operations of the facility. Only at that point would the Respondent’s bargaining obligation attach. See Tramont Manufacturing, LLC, 369 NLRB No. 136, slip op. at 4 (2020) (stating that Burns successors are “free to make one-time initial unilateral changes in the status-quo terms and conditions of employment for bargaining unit employees” and “ef- fect[ively] reset the status quo at the commencement of a bargaining re- lationship,” but as soon as they “‘set initial terms and conditions of em- ployment . . . a bargaining obligation attache[s] with respect to any sub- sequent changes to terms and conditions of employment’” (quoting Paragon Systems, Inc., 362 NLRB 1385, 1386 (2015))). However, the Respondent did not avail itself of this right and voluntarily decided to continue the shift differentials. effect. Therefore, if no provision of the Agreement termi- nated the shift differentials or privileged the Respondent to act unilaterally with respect to those payments, the Re- spondent violated the Act when it abruptly ended the shift differentials without affording the Union notice or an op- portunity to bargain.3 The Respondent argues that it was effectively fore- closed from continuing the shift differentials because arti- cle 25 of the Agreement, which covers employees’ wages, does not expressly authorize such payments. I reject this argument. As the Board has long held, “[t]he duty to bar- gain continues during the term of a collective-bargaining agreement with respect to mandatory subjects of bargain- ing not covered by the agreement.” MV Transportation, 368 NLRB No. 66, slip op. at 3 (2019), citing Jacobs Mfg Co., 94 NLRB 1214, 1217 (1951), enfd. 196 F.2d 680 (2d Cir. 1952). The Respondent concedes that the Agreement does not expressly speak to this term of employment and that the parties did not discuss this term of employment during the negotiations that led to the Agreement. As a result, the record is devoid of evidence that there was a meeting of the minds to end or alter the shift differentials, let alone that the Agreement “covered” that term or con- dition of employment.4 The Respondent’s reliance on article 30, the Agree- ment’s zipper clause, is similarly unpersuasive.5 The zip- per clause states, in relevant part, that “[t]his Agreement represents the entire understanding between [the parties] and there are no agreements, conditions or understand- ings, either oral or written, other than as set forth herein.” I also note that, rather than maintain the same shift differential policy throughout bargaining for the Agreement, the Respondent unilaterally increased employees’ shift differential rates in May while bargaining was still ongoing. The Respondent demonstrated, contrary to its position be- fore the Board, that it had the authority to implement and adjust the shift differential policy of its own accord. I note that the General Counsel did not allege that the Respondent’s unilateral increase in May violated Sec. 8(a)(5) and (1). 3 The Union’s acquiescence to the Respondent’s unilateral increase in shift differentials while negotiations were ongoing did not mean that the Union automatically waived its right to bargain over any future uni- lateral changes to shift differentials. See Owens-Corning Fiberglas, 282 NLRB 609, 613 (1987). 4 I also reject the Respondent’s suggestion that art. 25 fully covers the general topic of employee compensation and, accordingly, precludes the payment of any form of compensation not specifically listed, includ- ing shift differentials. Art. 25 speaks to minimum starting rates of pay, relative pay rates, increases in pay rates, the timing of wage payments, payroll errors, and unit members’ right to participate in the 401(k) plan on the same terms and conditions as nonunit hourly employees. None of these topics suggests that the parties intended to foreclose the payment of shift differentials, specifically, or any other forms of compensation. 5 My colleagues implicitly criticize the General Counsel’s character- ization of art. 30 as a “zipper clause,” yet they fail to explain why that characterization of the clause has any material effect on this case. In fact, after opining on why the General Counsel’s terminology is imprecise, they proceed to analyze this case based on zipper clause cases. I, for one, would not criticize the General Counsel for failing to adhere to the view of “zipper clauses” proffered in a law review article. DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 8 But the mere presence of this generic zipper clause is in- sufficient to terminate an existing term or condition of em- ployment regarding a mandatory subject of bargaining. I find the Board’s waiver cases instructive here.6 In Viejas Band of Kumeyaay Indians d/b/a Viejas Casino & Resort, 366 NLRB No. 113 (2018), the Board found that the re- spondent violated Section 8(a)(5) by unilaterally ending its policy of paying unit and nonunit employees the same annual yearend bonus without giving the union notice or an opportunity to bargain. In attempting to justify its ac- tions, the respondent argued that the zipper clause in its contract privileged the unilateral change. The zipper clause in that case provided: The Tribe and the Union, for the term of this Agreement, each voluntarily and unqualifiably [sic] waive the right to bargain, and each agrees that the other shall not be obligated to bargain collectively, with respect to any subject, matter or practice involving the terms and con- ditions of employment of the bargaining unit other than as specifically required by an express provision of this agreement. Id., slip op. at 1 fn. 1. Rejecting this argument, the Board observed that “generally worded zipper clauses such as this one do not amount to clear and unmistakable waiver absent special facts not present here, such as the parties having ac- tively bargained over the zipper clause or discussed the clause’s effect” on material terms or conditions of employ- ment. Id. (Emphasis added.) In TCI of New York, 301 NLRB 822 (1991), the em- ployer likewise maintained a yearly bonus program for unit and nonunit employees, even though the parties’ col- lective-bargaining agreement did not mention the bonus plan. The respondent discontinued its program without notice to the union. During the previous round of contract negotiations, however, it had proposed amending the ge- neric zipper clause to “provide[] that the agreement’s terms would supersede ‘all prior agreements, understand- ings and past practices, oral or written, express or im- plied.’” Id. at 825. After initially resisting this amend- ment, the union ultimately acquiesced. Because of the parties’ specific negotiations over the wording and effect of the zipper clause, the Board concluded that the union “understood that [the amended zipper clause] would have an impact on the . . . parties’ obligations” with respect to the bonus program and had thus waived its right to bargain 6 The Respondent emphatically argues that it is not arresting a waiver defense. Nonetheless, I find the Board’s discussion of zipper clauses in that context helpful in evaluating the scope and effect of the zipper clause here. 7 I note that after these cases applying the clear-and-unmistakable waiver standard, the Board adopted the contract-coverage standard in MV Transportation. 368 NLRB No. 66 (2019). In the words of MV Transportation, however, this generic zipper clause “does not cover the [Respondent’s] disputed act.” Id., slip op. at 2. Therefore, the subse- quent adoption of the contract coverage standard in MV Transportation does not negate the instructive value of these cases. over the employer’s decision to terminate that material term or condition of employment. Id. at 824. But in doing so, the Board still stressed that “the presence of a zipper clause . . . will not, by itself” terminate existing material terms and conditions of employment. Id.7 As in Viejas and unlike in TCI, the parties here entered into a generic zipper clause without any discussion of its effect on shift differentials specifically or on the terms and conditions of employment that the Respondent had volun- tarily adopted from its predecessor more generally. Ac- cordingly, the zipper clause at issue did not serve to termi- nate the voluntarily adopted shift differential. This find- ing is consistent with the Board’s long-held view that “the normal function of [zipper] clauses is to maintain the sta- tus quo, not to facilitate unilateral changes.” Murphy Oil USA, Inc., 286 NLRB 1039, 1039 (1987).8 For the reasons above, I find that the Respondent’s uni- lateral cessation of the shift differentials, made without providing the Union with notice and an opportunity to bar- gain, violated Section 8(a)(5) and (1). Dated, Washington, D.C. December 28, 2023 _____________________________________ Marvin E. Kaplan, Member NATIONAL LABOR RELATIONS BOARD APPENDIX NOTICE TO EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government The National Labor Relations Board has found that we vio- lated 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 ac- tivities. 8 Art. 19 (Management Rights) did not terminate the shift differential payments or privilege the Respondent to act unilaterally with regard to those payments. The Respondent expressly denies arguing that the man- agement-rights clause privileged it to eliminate shift differentials unilat- erally, but some language in its brief seems to contradict that disclaimer. Even if art. 19 were interpreted to cover shift differentials, it requires the Respondent to give the Union 10 days’ notice before making any changes. The Respondent admits that it did not give the Union any such notice. TWINBROOK OPCO, LLC WE WILL NOT change your terms and conditions of em- ployment without first notifying SEIU Healthcare Penn- sylvania, CTW, CLC (the Union) and giving it an oppor- tunity to bargain. 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 units: LPN UNIT: All full-time and regular part-time Licensed Practical Nurses (LPN’s) employed by Respondent at its facility located at 3805 Field Street, Erie, PA; but excluding all Registered Nurses, Service and Maintenance, Office Clerical employees, Managerial employees, confidential employees, and guards, and professional employees and Supervisors as defined in the Act. SERVICE AND MAINTENANCE UNIT: All full-time and regular part-time Service and Mainte- nance employees employed by Respondent at its facility located at 3805 Field Street, Erie, PA; but excluding all Registered Nurses, Licensed Practical Nurses, Office Clerical employees, Managerial employees, confidential employees, and guards, and professional employees and Supervisors as defined in the Act. WE WILL reinstate the shift differential payment policy that was unilaterally terminated beginning in the pay pe- riod August 15–28, 2021, with a pay date of September 3, 2021. WE WILL make affected employees whole for any loss of earnings and other benefits suffered as a result of our unlawful termination of shift differential payments, plus interest, and WE WILL also make them whole for any other direct or foreseeable pecuniary harms suffered as a result of the unlawful changes, plus interest. WE WILL compensate affected employees for the ad- verse tax consequences, if any, of receiving lump-sum backpay awards, and WE WILL file with the Regional Di- rector for Region 6, 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 year(s) for each employee. WE WILL file with the Regional Director for Region 6, within 21 days of the date the amount of backpay is fixed by agreement or Board order or such additional time as the Regional Director may allow for good cause shown, a copy of each backpay recipient’s corresponding W-2 form(s) reflecting the backpay award. TWINBROOK OPCO, LLC The Board’s decision can be found at https://www.nlrb.gov/case/06-CA-283709 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.