The Times Union newspaper of Colonie, New York reached a settlement in a National Labor Relations Board (“NLRB”) case brought by the Newspaper Guild of Albany (the “Guild”). The settlement requires the Times Union to reinstate three former employees and to pay more than $800,000 in back pay to 11 former employees who the newspaper company laid off in September 2009.

In June 2008, the Times Union and the Guild began negotiating a new collective bargaining agreement. Pursuant to Article 3 of the 2004-2008 collective bargaining agreement, if the Times Union planned to implement layoffs, it would “give sole consideration to seniority” and institute layoffs in reverse seniority order, with the last person hired being the first person dismissed. In connection with the 2008 contract negotiations, the Times Union proposed modifying the layoff provision in Article 3 so that seniority would be one of many factors considered when implementing a layoff. The Times Union insisted that it wanted discretion to reduce its staff size, without regard to seniority, in response to the economic recession and decline of the newspaper business.

In February 2009, as the negotiations for a new collective bargaining agreement continued, the Times Union unilaterally developed criteria for evaluating which employees to select for layoff. In March 2009, the Guild presented a proposal for a 5% across-the-board salary reduction and other economic concessions to avoid the anticipated layoffs. The Times Union stressed that it needed to reduce headcount to cut its operating costs. In April 2009, the Times Union terminated the collective bargaining agreement and sent the Guild a “final and best” offer that included a provision stating that the Company would provide the Guild with 45 days notice prior to any layoff and would count seniority as one, but not the only, basis for selecting employees for layoff. In a June vote, the Guild’s members rejected the Times Union’s final offer. On June 24, 2009, the Times Union declared that the parties were at an impasse and that the newspaper would move forward with its planned layoffs.

In July 2009, the Times Union notified the Guild that it placed 11 employees on paid leave pending their layoff. The parties continued to negotiate in July and August. The Guild requested, and the Times Union provided, information about how the newspaper selected the employees for layoff. The Guild continued to issue counter-proposals to limit the scope of the proposed layoffs. On September 11, 2009, the Times Union informed the Guild that the parties were at an impasse, and it informed the 11 employees that their positions were being eliminated.

The Guild filed an unfair labor practice charge claiming that the Times Union violated the National Labor Relations Act (“NLRA”) by taking unilateral action in laying off employees without reaching an impasse in negotiations. In May 2011, The Board ruled that the Times Union violated Section 8(a)(5) and (1) of the NLRA by: (1) unilaterally selecting 11 employees for layoff and placing them on paid leave in July 2009, and (2) implementing the layoff of the same 11 employees in September. The Board reasoned that by placing employees on paid leave and thereby selecting them for layoff, the Times Union unfairly disadvantaged the Guild by forcing it to negotiate the status of employees who were no longer actively working for the newspaper. Additionally, the Board concluded that the parties did not reach an impasse on September 11, 2009; therefore, the Times Union acted unlawfully when it unilaterally laid off the 11 employees.

The Board ordered the Times Union to reinstate these 11 employees and provide back pay. In December 2011, the Board filed an application with the United States Court of Appeals for the Second Circuit to enforce its decision.

On June 25, 2012, the parties reached a settlement agreement whereby the Times Union offered reinstatement and back pay to the 11 former employees. Eight of the former employees waived reinstatement, but accepted full back pay plus compounded interest and were compensated for loss of pension and medical benefits. Three employees accepted reinstatement and received back pay, interest, and benefits restoration.

Generally, when the parties involved in collective bargaining negotiations reach an impasse, the employer has the right to take unilateral action consistent with its proposals during the contract negotiations. Because there are nuances to this general rule, determining when an impasse is reached is often not obvious, as this case illustrates. Employers should exercise care and seek legal counsel, before declaring an impasse and taking unilateral action during contract negotiations.