Sentence First, Verdict Later!

NLRB Orders Employer To Grant Undetermined Wage Increase

These days, the National Labor Relations Board (NLRB or Board) just gets curiouser and curiouser.

In one of its latest adventures on the other side of the looking glass, the Board held that a hospitality employer violated the law by failing to provide a wage increase to employees who had recently unionized. The employer and the union had started negotiations on an initial labor agreement but had not agreed on an economic package. In the meantime, the employer granted wage increases to nonunion employees, but not to the employees whose wages were subject to negotiation with the union. While it may seem obvious (at least to those who didn’t write the Board’s majority decision), it’s a little weird to grant increases to employees when those increases are in the process of, you know, being negotiated. Just saying.

Refusing to be troubled by such details, the Board held that the employer should have granted a wage increase to the unionized employees during bargaining because the company had an “established past practice” of granting wage increases on an annual basis. But here’s the really odd part – the Board couldn’t tell how much of a wage increase the unionized employees should have received.

It turns out that the employer’s purportedly “established past practice” of granting wage increases varied from year to year in terms of the amount of the increase, the calculation of the increase (i.e., a percentage vs. a uniform amount) and the factors considered in determining the increase amount. So there was no way for the Board to determine the amount of the increase that was (in the Board’s view) unlawfully withheld. Undaunted, the Board ordered the employer to grant a wage increase and said it’ll figure out the amount at a later stage of the case.

Yes, you read that correctly.

Takeaways: The Board continues to move in a decidedly anti-employer direction. Employers therefore must be thoughtful and strategic in their approach to negotiations and other labor relations issues.