Merit Pay Scheme Rejected by U.S. Supreme Court

Employers may not impose a so-called merit pay plan on employees after bargaining has come to an impasse, the U.S. Supreme Court held in refusing to review a lower court ruling involving two California newspapers.

TNG-CWA President Linda Foley called the action "a huge victory for millions of workers" and noted that by refusing to hear the case, the Supreme Court fully sustained the position of the National Labor Relations Board and TNG-CWA.

"For nearly a decade some publishers have been trying to make an end run around the collective bargaining process by implementing these one-sided merit pay plans. This strikes directly at the heart of the collective bargaining process, and was rightly rejected not only by the Supreme Court but appellate courts as well," she said.

Newspaper publishers aren't alone in trying to move to merit-only pay systems; employees in broadcasting, teachers and other workers also are facing these one-sided pay proposals.

While in some circumstances, employers can impose contract changes when the parties have reached an impasse in bargaining, the NLRB in 1990 found that "an employer who proposes unlimited management discretion over wages is really proposing that the union waive its statutory right to be consulted about wage changes." In this case, Northern California Newspaper Guild Local 52 strongly opposed the McClatchy chain's plan for an entirely merit-based pay system, and McClatchy's action was considered by the NLRB to be an unfair labor practice.

McClatchy appealed that decision, and the U.S. Court of Appeals for the District of Columbia Circuit eventually remanded the case to the NLRB, which previously had determined that the newspaper chain's action was an unfair labor practice. The Supreme Court then refused to hear McClatchy's petition.