Merck, Sharp & Dohme Corp.

National Labor Relations Board - Administrative Judge Opinions

Dec 20, 2016

06-CA-163815 (N.L.R.B. Dec. 20, 2016)

JD–118–16
Riverside, PA
UNITED STATES OF AMERICA
BEFORE THE NATIONAL LABOR RELATIONS BOARD
DIVISION OF JUDGES
MERCK, SHARP & DOHME CORP.,
and Case No. 06–CA–163815
UNITED STEEL, PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED INDUSTRIAL
AND SERVICE WORKERS INTERNATIONAL UNION,
LOCAL 10–580, AFL–CIO, CLC.
MERCK, SHARP & DOHME CORP.,
and Case No. 05–CA–168541
LOCAL 94C, INTERNATIONAL CHEMICAL WORKERS
COUNCIL OF THE UNITED FOOD AND COMMERCIAL
WORKERS INTERNATIONAL UNION, AFL–CIO.
MERCK, SHARP & DOHME CORP.,
and Case No. 22–CA–168483
UNITED STEEL, PAPER AND FORESTRY, RUBBER,
MANUFACTURING, ENERGY, ALLIED INDUSTRIAL
AND SERVICE WORKERS INTERNATIONAL UNION,
LOCAL 4–575, AFL–CIO, CLC.
DECISION and RECOMMENDED ORDER
DAVID I. GOLDMAN
Administrative Law Judge
Counsel:
David L. Shepley, Esq. (NLRB Region 06)
of Pittsburgh, Pennsylvania, for the General Counsel
Mark J. Foley, Esq. (Drinker, Biddle & Reath, LLP))
of Philadelphia, Pennsylvania for the Respondent
Jonathan Walters, Esq. (Markowitz & Richman)
of Philadelphia, Pennsylvania, for the Charging Parties
JD–118–16
i
Table of Contents
Page
Decision.......................................................................................................................... 1
Statement of the Case .................................................................................................... 1
Jurisdiction...................................................................................................................... 2
Unfair Labor Practices .................................................................................................... 2
Findings of Fact ........................................................................................................ 2
Introduction ................................................................................................... 2
The origins of appreciation day...................................................................... 3
The July 28 announcement of appreciation day............................................. 3
Employee and Merck responses to the announcement.................................. 5
Riverside Plant Manager Killen
learns why Merck excluded union-represented employees ........................... 5
The local union officials’ allegations............................................................... 6
Merck carries through with its plan to exclude
union-represented employees from appreciation day .................................... 8
Analysis ................................................................................................................ 8
I. Section 8(a)(3) ........................................................................................ 8
A. The Wright Line standard ........................................................................ 8
B. Application of Wright Line ....................................................................... 9
1. The General Counsel’s affirmative case ............................................ 9
a. The Respondent’s admitted motive was discriminatory ................ 9
JD–118–16
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Table of Contents (continued)
Page
b. The July 28 announcement effectively blames the employees’
union status for the exclusion from appreciation day .................. 13
c. The Respondent’s unilateral-action rationale is a pretext............ 13
2. The Respondent’s Wright Line rebuttal ............................................ 15
a. Bargaining strategy as a defense ............................................... 15
b. The 8(d) defense........................................................................ 16
C. The allegations relied upon to find the violation
are closely-related to the pleadings and fully litigated ............................ 19
II. Section 8(a)(1) ...................................................................................... 19
Conclusions of Law....................................................................................................... 20
Remedy ........................................................................................................................ 21
Order ............................................................................................................................ 22
Appendix
JD−118−16
1
DECISION
DAVID I. GOLDMAN, ADMINISTRATIVE LAW JUDGE. This case involves a
pharmaceutical manufacturer that employs approximately 67,000 people worldwide, with roughly
23,000 employed in the United States. Of these U.S. employees approximately 2700 are union-5
represented and covered by collectively-bargained agreements.
In late July 2015, at a “global town hall” video meeting for employees, the employer’s CEO
announced that in appreciation for their work and the company’s performance employees
worldwide would receive an “appreciation day”—a paid day off on September 4, 2015. The day 10
off was for employees worldwide, with one exception: the employer stated that the paid day off
“[d]oes not apply to those in U.S. who are covered by [a] collective bargaining agreement.”
The announcement was not well-received by U.S. union-represented employees. Local
union officials appealed to the employer to include the union employees in appreciation day. The 15
employer refused and on September 4 the paid day off was provided to most employees
worldwide except for U.S. union-represented employees (with an exception, as described below,
for one group of union employees who were deemed contractually entitled to any benefits given
to the nonunion employees at their plant).
20
The government alleges that the refusal to provide the union-represented employees the
appreciation day was unlawfully motivated and in violation of Section 8(a)(3) and (1) of the
National Labor Relations Act (Act). I agree, based on several factors, the chief one being the
admission, mooted at trial and attributed to the manager who recommended the union
employees’ exclusion, that the exclusion was in retaliation for the unions’ past refusal to entertain 25
midterm contractual changes sought by the employer. Contrary to the contentions of the
employer, I find that this motive represents straightforward punishment of union employees in
retaliation for past protected activity under the Act. I also find that a plant manager’s admitted
statement to one of the union presidents that this unlawful motive was the rationale for excluding
union employees constitutes unlawful coercion, an independent violation of Section 8(a)(1) of the 30
Act.
STATEMENT OF THE CASE
On November 9, 2015, Local 10-580 of the United Steel, Paper and Forestry, Rubber,35
Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO, CLC
(Local 10-580) filed an unfair labor practice charge alleging violations of the Act by Merck, Sharp
& Dohme Corp. (Merck). Region 6 of the National Labor Relations Board (Board) docketed this
charge as Case 06–CA–163815. Local 10-580 filed an amended charge in the case on
December 28, 2015, a second amended charge on January 29, 2016, and a third amended 40
charge on March 10, 2016.
On January 27, 2016, Local 94C, the International Chemical Workers Council of the
United Food and Commercial Workers International Union, AFL–CIO (Local 94C) filed an unfair
labor practice charge against Merck alleging violations of the Act, docketed by Region 5 of the 45
Board as Case 05–CA–168541. Local 94C filed an amended charge on February 9, 2016, and a
second amended charge on March 10, 2016.
50
JD–118–16
2
On January 25, 2016, Local 4-575 of the United Steel, Paper and Forestry, Rubber,
Manufacturing, Energy, Allied Industrial and Service Workers International Union, AFL–CIO, CLC
(Local 4-575) filed an unfair labor practice charge against Merck docketed by Region 22 of the
Board as Case 22–CA–168483. A first amended charge was filed in the case on February 22,
2016, and a second amended charge filed March 10, 2016.5
Based on an investigation into these unfair labor practice cases, on June 30, 2016, the
Board’s General Counsel, by the Regional Director for Region 6 of the Board, issued an order
consolidating these cases, and a consolidated complaint and notice of hearing alleging that
Merck had violated the Act. On July 27, 2016, Merck filed an answer denying all alleged 10
violations of the Act. The General Counsel issued an amendment to the consolidated complaint
on September 19, 2016, to which Merck filed an answer on September 30, 2016.
A trial in these cases was conducted on October 4 and 5, 2016, in Bloomsburg,
Pennsylvania. Counsel for the General Counsel, the Respondent, and the Charging Parties filed 15
post-trial briefs in support of their positions by December 2, 2016.
On the entire record, I make the following findings, conclusions of law, and
recommendations.
20
Jurisdiction
Merck is a corporation with offices and place of business in Riverside, Pennsylvania,
Elkton, Virginia, and Rahway, New Jersey. Its facilities at these locations have been engaged in
the manufacture and nonretail sale of pharmaceutical products. At all material times, Merck has 25
been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the
Act. At all material times, Local 10-580, Local 94C, and Local 4-575 have been labor
organizations within the meaning of Section 2(5) of the Act. Based on the foregoing, I find that
this dispute affects commerce and that the Board has jurisdiction of this case, pursuant to Section
10(a) of the Act.30
UNFAIR LABOR PRACTICES
Findings of Fact
35
Introduction
Merck manufactures and sells pharmaceuticals and employs approximately 67,000
worldwide. Approximately 23,000 are employed in the United States. Of those 23,000
employees, approximately 2700 are union-represented, whose terms and conditions of 40
employment are covered by collectively-bargained agreements.
Merck’s U.S. union-represented employees work in nine bargaining units, each with their
own labor agreement and local union. The record does not speak with any precision to the
definition of the bargaining units and it is immaterial for the purposes of these cases. There are 45
two units at the Rahway, New Jersey facility. One is represented by Charging Party Local 4-575,
the other by Local 68 of the International Union of Operating Engineers. Charging Party Local 2-
0580 represents employees at Merck’s Riverside, Pennsylvania plant (also called the Danville or
the Cherokee plant). The West Point, New Jersey facility employees are organized into three
bargaining units. One is represented by the International Brotherhood of Teamsters, Local 107, 50
one by Charging Party 10-0086, and one by the Office and Professional Employees International
JD–118–16
3
Union, Local 1937. There are two bargaining units at the Elkton, Virginia plant, one represented
by Charging Party Local 94, and the other by Workers United, Local 1398. District 15, Lodge 315
of the International Association of Machinists represents a bargaining unit at the Kenilworth, New
Jersey facility.
5
The origins of appreciation day
On September 4, 2015, Merck provided a paid “appreciation day” off for most of its
workforce both in the U.S. and worldwide. Union-represented U.S. employees did not receive
this extra day off. The exception was the Kenilworth, New Jersey facility unit employees because 10
Merck determined that Kenilworth’s bargaining agreement mandated that the unit employees
receive benefits received by nonunit employees at the plant.
The origins of the September 4 appreciation day were described in testimony provided by
Jeff Geller, Merck’s vice-president of global compensation and benefits. Geller testified that in 15
the spring of 2015, his manager, who was the chief HR officer for Merck, approached Geller and
asked him to think about some ideas for Merck to show appreciation to Merck employees “for the
strong business results that we were seeing so far that year in 2015.” After consultation with his
HR management team, and with colleagues outside the U.S., Geller determined that an extra
paid day off would be “the right signal to our employees.” Geller forwarded the proposal to his 20
manager and ultimately the decision to move forward was made by CEO Ken Frazier. According
to Geller, shortly after the July 4 holiday the decision was made by Merck to move forward with a
paid day off on September 4, 2015, the Friday before the Labor Day holiday in the United States.
The exclusion from appreciation day of the U.S. union-represented employees was 25
prompted by the advice and direction to Geller of (then) Executive Director of U.S. Labor
Relations Tony Zingales. Zeller testified that he “relied solely on [Zingales’] judgment as it relates
to employees covered under the collective-bargaining agreement.” According to Zeller, Zingales’
“take” was that “you can’t do this unilaterally” and ““it should not apply to those under collective
bargaining agreement.” Zeller testified that “Tony [Zingales] explained to me that employees in 30
the U.S. are covered by a collective bargaining agreement, and you can’t unilaterally provide an
automatic day.” Zeller testified that he and the rest of the company took Zingales’ guidance and
advice on this. Zingales did not tell Geller that the employees should not get the benefit because
of labor relations issues. He did not tell Geller that providing the appreciation day benefit to
union-represented employees would run counter to Zingales’ “bargaining strategy” or 35
“philosophy.”1
The July 28 announcement of appreciation day
Merck periodically conducts “global town hall” business briefings for its employees, during 40
which, through webcast or dial-up, or in person, the entire worldwide workforce is provided an
update on the company’s performance. The global town halls are led by Merck CEO Ken Frazier.
45

1Zingales testified that he told Geller that one group of union employees should receive the
day off—the unit employees at the Kenilworth facility. Their collective-bargaining agreement
contained a “maintenance of standards provision” that, according to Zingales, “required us to
provide benefits to the bargaining unit employees that were provided to salary employees.”
JD–118–16
4
A global town hall briefing was conducted July 28, 2015. Toward the end, Frazier
announced that there would be a worldwide appreciation day on September 4, 2015, in which
operations would cease and employees would have the day as a paid day off. The slides for
Frazier’s presentation, which were shown in the meeting, stated because “[y]ou and your
colleagues give so much time and energy to our company . . . . [Merck] [w]anted to provide this 5
‘special’ recognition and ‘thank you’ for great performance we’re seeing at this mid point of 2015.”
(emphasis in original). Another slide highlighting the day off stated around the border of a picture
of a globe of the world: “You give so much of your time . . . We want to give some back.” (All
capitalized in original). Across the middle of the globe in large font it stated “Thank You.”
10
The slide indicated that Merck’s operations would be closed September 4, 2015.
However, the slide also indicated that this global shutdown “Does not apply those in US who are
covered by a collective bargaining agreement.”
An announcement “[f]ollowing up on Ken [Frazier’s] announcement” was sent out later 15
that day July 28. It stated “Enjoy an additional day off in 2015.” The announcement stated that
“the company is providing you with an additional day off in recognition of the company’s
performance through the midpoint of 2015.” The announcement explained:
Merck and MSD operations will close on Friday, Sept. 4. Please note the20
following:
• This applies globally where business operations and local practices/laws permit,
and, as required, subject to consultation with employee representatives or works
councils.25
• In countries or sites where Sept. 4 is already a day off or it is not otherwise
possible to close operations on that particular day, your local managing directors
or site leads will select another day and communicate this information to you soon.
30
• If you have already scheduled Sept. 4 as a vacation day or your site requires you
to work on that day to meet business needs, please use the additional day off at
another time and coordinate with your manager.
• This additional day off does not apply to those in the U.S. who are covered by a 35
collective bargaining agreement.
By all evidence, plant managers and employees were not made aware of the new benefit
until July 28, when it was announced during the global town hall. According to Geller, the matter
was kept “pretty hush within human resources and global communications” in an effort to keep it 40
a surprise for the July 28 briefing.
Employee and Merck responses to the announcement
The announced intention to exclude the union-represented employees from receipt of 45
appreciation day caused something of a furor in the unionized plants. There were intimations that
union employees would not cooperate with an upcoming safety survey and cease participating in
voluntary emergency service groups, which were important for plant operations. Merck’s intranet
comments board received many posts and commentaries from excluded employees and union
officials. The local union president for the West Point plant, Daniel Bangert, wrote an open letter 50
to CEO Frazier objecting to the exclusion of union employees.
JD–118–16
5
Frazier, and then Elisabeth Goggin, who is Merck’s global head of labor relations,
responded with email and an intranet posting, respectively, that stressed and asserted the
inability of Merck to unilaterally provide an extra day off to employees covered under a collective-
bargaining agreement. 5
On August 21, the local union presidents wrote a joint letter to CEO Frazier requesting
that unit employees be included in the benefit, expressing concern over the announcement,
referencing past instances where company-wide benefits had been offered to union-represented
employees, and disavowing any suggestion from Merck that the unions would file a grievance or 10
charge if the unit employees were given the appreciation day benefit.
Riverside Plant Manager Killen learns why
Merck excluded union-represented employees
15
The July 28 announcement prompted Riverside Plant Manager Brian Killen to request a
conference call with Zingales and the HR department. Killen testified that in a conference call
with the other excluded plant managers and Zingales and his HR group on August 3, Killen and
other managers asked why their plants were excluded and whether there was an intention to
negotiate with the unions about it. 20
Zingales told them that the benefit is not in the labor contracts “and we can’t unilaterally
give the day.” Killen knew that answer was inadequate. As he testified, “clearly I knew that
wouldn’t be a sufficient response for my own information and I needed more information to go
back to the site.” Killen asked whether Merck was going “to have some kind of bargaining or 25
what is our path forward.” When told no, that “there was no intent to bargain further,” Killen “and
other plant managers asked about the reason.” The “feedback that we got was that . . . in the
previous couple of years that the company had made changes to the non-CBA employees . . .,
relatively simple changes” such as “how they administer payroll and 401(k) and how they
complete year end holidays.” Zingales explained to Killen and the managers that these changes 30
were made for nonunion employees but when “they tried to discuss them with the union outside
of contract negotiations . . . the fee[dback] from the union was . . . wait until contract
negotiations.” Killen agreed that Zingales told him that the union’s refusal to cooperate in
agreeing to these “minor changes” in recent years was the reason that “Merck was not inclined to
approach the union in offering the appreciation day” or to “just give it to the unions.”35
I note that while Killen was, and was known to be, in disagreement with Merck’s decision
to exclude the union-represented employees—particularly those under his supervision—Killen
was and is an agent of and aligned with the Respondent. This only adds to the credibility of
Killen’s account of Zingales’ stated explanation for the motive for refusing to offer appreciation 40
day to the union-represented employees. Moreover, Killen’s account is indirectly corroborated by
Zingales, who, in his testimony about appreciation day, made the point—without directly adopting
it as a motive for excluding union employees—that there were “changes in benefits levels or
administrative cha[n]ges or practices that were applied to non-union employees or salary
employees that didn’t apply to the unionized groups with the exception of the Kenilworth unit.” He 45
referenced the issue in a manner suggestive of the belief that if the unions didn’t have to take the
bad they are not entitled to the good, a plausible, but, as discussed below, unacceptable
motivation under the circumstances.
50
JD–118–16
6
Thus, the motives for excluding union employees that Zingales shared with Killen and the
plant managers was (1) that it would be illegal to unilaterally provide these employees with
appreciation day and (2) that he was not going to offer it to them through the unions in retaliation
for the unions’ past unwillingness to make “minor changes” requested of them by Merck. As an 5
evidentiary matter, Killen’s account of Zingales’ comments is an admission and I credit it. Apart
from his status as a witness for and aligned with the Respondent, I found Killen to be a highly
credible witness, both in his demeanor and his forthright and plausible account of events, and I
credit his testimony for that reason as well.2
10
The local union officials’ allegations
In my view, Killen’s credibility extends to his account of his conversations with Riverside
union officials about appreciation day. Killen testified that he told Riverside local union president
Ed Vallo the substance of Zingales’ remarks as to the appreciation day: i.e., that Merck’s position 15
was that the benefit could not unilaterally be provided to union employees and that Merck did not
intend to discuss it because of the unions’ previous refusal to discuss payroll administration,
401(k) administration, and year end holiday changes that Merck had sought to change mid-
contract.
20
Moreover, Killen convincingly denied union president Vallo’s and union steward James
Little’s contention that in a meeting within “a few days after the announcement” Killen told them
that Merck refused to include the union plants in appreciation day because “there were serious
labor issues at other sites,” particularly safety issues, and that it was “despicable” what was going
on at the Rahway site—referring to unspecified labor issues—given that “they had just finished up 25
contract negotiations” and that “Merck was not “going to reward bad behavior.”3
Vallo and Little testified that this conversation occurred at the old plant manager’s office in
building 117, and that HR representative Janelle Patton was present. Patton denied attending a
meeting with Vallo and/or Little about issues around appreciation day until late September, weeks 30
after the early August discussion referenced by Little. While Vallo and Little both testified that

2I note that there was no objection to this testimony. To the contrary, the Respondent adopts
it on brief. See. R. Br. at 13-14. In any event, pursuant to Federal Rules of Evidence 805 and
801(d)(2)(D), neither Zingales’ statement to Killen nor Killen’s’ recounting of it to Vallo (or on the
witness stand, for that matter) constitutes hearsay. Both Zingales and Killen were admitted
agents of the Respondent and acting in the scope of their employment when the statements were
made. See, United States v. Gibson, 409 F.3d 325, 337 (6th Cir. 2005).
3Contrary to the arguments of the counsel for the General Counsel, I found Killen convincing
in both demeanor and with regard to his recollection. Contrary to counsel for the General
Counsel, I found the instances where Killen could not recall something, for instance, a location of
a meeting or whether HR representative Patten was present at a particular meeting, to be honest
attempts to answer. By all evidence, there were many meetings, formal and informal, attended
by some combination of Patten, Killen, Vallo, and Little. I note that contrary to the claim of the
counsel for the General Counsel on brief, Killen was not unsure and did not profess lack of
recollection as to whether he told Vallo and/or Little that labor issues at other sites, regarding
safety, and particularly at Rahway, motivated Merck to exclude union employees from
appreciation day. Rather, he (convincingly, to my mind) denied this.
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7
Patton’s usual practice was to take notes at the meetings she attended with them and Killen, no
notes of this meeting were produced.4
This is not a particularly easy credibility resolution, as Vallo and Little appeared to me to
be testifying honestly. I believe that in their many “free flowing” (as Little and Killen both 5
described their) conversations in the days and months after the appreciation day announcement,
there was discussion of many issues, including problems at other plants. However, Vallo and
Little were vague and uncertain on many details, and on the time frame of the meeting in which
the statement was allegedly made that Rahway and West Point’s issues were the reasons for
exclusion of all union-represented employees from appreciation day.5 There was also confusion 10
about the dates and timeline for Vallo/Little’s discussions with Killen about a proposal for seven
hours of leave that appears to have been conducted in September or even October, not in August
as suggested by Vallo. In the face of the convincing denials by Killen and Patten, I do not credit
Vallo and Little’s claim that Killen told them that these issues were the reason that all union-
represented employees were excluded from the appreciation day.615

4Contrary to counsel for the General Counsel, I did not find Patton’s testimony suspect. She
testified that, as an HR representative, she would prefer to be involved with all discussions with
the union representatives, but that Killen, as plant manager, did not involve her in every meeting
he had with Vallo. In particular, while she almost always attended the recurring weekly meetings
Killen conducted with Vallo, she was seldom part of the frequent “ad hoc” meetings that Killen
held with Vallo. In my view, this appeared to be part of the normal push/pull between HR and
plant operations—not an effort to hide her presence at meetings from the tribunal.
5Vallo testified that at Rahway there were “ongoing” “labor issues that came up after
negotiations that were impacting the site,” but asked if he had any specifics he said “not really.”
6I note further the lack of support for the truth of the claim Vallo and Little attributed to Killen.
It weighs against the conclusion that it was said. There was extensive testimony about recent
contract negotiations at Rahway, conflicting views of the application of a new overtime provision,
grievance filing activity, and the union’s concern over the steady erosion of the bargaining unit
over many years. All of these are serious issues, but none that seems obvious as a basis for
retaliation by Merck against the unions generally. Moreover, the contention that Killen attributed
Merck’s decision to any of these issues, or safety concerns, or ongoing “bad behavior” at Rahway
and West Point, is undermined by the lack of evidence that Killen had direct knowledge of any of
this. Based on his testimony, the bulk of his information about other plants’ relationships with
Merck came from Vallo, not from Merck. There is just no evidence, other than the alleged
comments attributed to Killen, that these were the source of the appreciation day exclusion, much
less that Merck officials told Killen this. As to Killen’s version of what he testified that he told
Vallo—that union-represented employees were not going to be offered appreciation day because
of past union refusals to entertain midterm contract changes—this was alluded to by Zingales in
his testimony, thus, providing corroboration. Moreover, as noted earlier, Killen’s testimony of
what Zingales told him constitutes an admission from Zingales. Thus, Killen’s testimony provides
direct evidence of what he was told by Merck about why union employees were denied the
appreciation day off. I believe he was told that and this makes it plausible that he would convey
what he was told and not something there is no evidence that he knew.
JD–118–16
8
Merck carries through with its plan to exclude
union-represented employees from appreciation day
Between August 3 and August 20, Killen spoke with Vallo and Little and they discussed
whether some kind of recognition of plant employees could be made in lieu of appreciation day. 5
During this period, Killen testified that while Zingales and his office had ruled out agreeing to give
the union employees the appreciation day holiday, they had not ruled out specific site-by-site
adjustments that could be made at plant managers’ request. Discussions with Vallo, often
accompanied by Little, were undertaken by Killen at his (and Vallo and Little’s) initiative in this
regard, but nothing was agreed to by upper management. By August 20, Killen was informed by 10
his immediate boss, Dan Hoey, that senior level Merck management had determined that “there
would be no further discussions on appreciation day in terms of potential to bargain for it locally or
change directions.” This was confirmed to Killen the next day in a conference call with plant
managers and Zingales and with Zingales’ immediate boss Elisabeth Goggin. On this call it was
stated that the issue was closed, “[t]here’s no intent to bargain further.” However, Killen was 15
reminded during this call, by Goggin, that as plant managers, Merck provided them with “authority
to recognize people for a job well done at our own sites.” With this authority, Killen continued to
pursue discussions with Vallo about some kind of recognition for Riverside employees, but those
discussions were not successful and abandoned in early October.
20
Appreciation day occurred as scheduled, on September 4, 2015. In the U.S., the federal
holiday of Labor Day was celebrated September 7, creating a four day weekend for Merck
employees receiving the appreciation day off. Merck’s union-represented employees did not
receive appreciation day off, with the exception of the employees in the Kenilworth bargaining
unit. 25
Analysis
The General Counsel contends that Merck’s failure to provide appreciation day to the
union-represented employees was unlawfully motivated in violation of Section 8(a)(3) and (1) of 30
the Act.7 He also contends that Killen’s explanation of the motive to Vallo independently violated
Section 8(a)(1) of the Act.
I. Section 8(a)(3)
35
A. The Wright Line standard
The Respondent and the General Counsel agree that Wright Line, 251 NLRB 1083
(1980), enfd. 662 F.2d 899 (1st Cir. 1981), cert. denied 455 U.S. 989 (1982), provides the
appropriate analytical standard for assessing the alleged 8(a)(3) violation.840

7Any conduct found to be a violation of Sec. 8(a)(3) would also discourage employees' Sec. 7
rights, and thus, is also a derivative violation of Sec. 8(a)(1) of the Act. Chinese Daily News, 346
NLRB 906, 934 (2006), enfd. 224 Fed. Appx. 6 (2007).

8I note that there is no allegation that the Respondent’s refusal to provide union-represented
employees appreciation day was “inherently destructive of Section 7 rights.” See NLRB v. Great
Dane Trailers, Inc., 388 U.S. 26, 33 (1967). Accordingly, I do not consider the issue.
JD–118–16
9
Wright Line is the Supreme Court-approved analysis in 8(a)(1) and (3) cases turning on
employer motivation. See NLRB v. Transportation Management Corp., 462 U.S. 393, 395 (1983)
(approving Wright Line analysis). In Wright Line, the Board determined that the General Counsel
carries his burden by persuading by a preponderance of the evidence that union or other
protected conduct was a motivating factor (in whole or in part) for the employer’s adverse 5
employment action. Proof of such unlawful motivation can be based on direct evidence or can be
inferred from circumstantial evidence based on the record as a whole. Robert Orr/Sysco Food
Services, 343 NLRB 1183, 1184 (2004), enfd. 184 Fed. Appx. 476 (6th Cir. 2006); Embassy
Vacation Resorts, 340 NLRB 846, 848 (2003).
10
Under the Wright Line framework, as subsequently developed by the Board, the elements
required in order for the General Counsel to satisfy his burden to show that protected activity was
a motivating factor in an employer’s adverse action are union or protected activity, employer
knowledge of that activity, and union animus on the part of the employer. Adams & Associates,
Inc., 363 NLRB No. 193, slip op. at 6 (2016); Libertyville Toyota, 360 NLRB No. 141, slip op. at 4 15
(2014); enfd. 801 F.3d 767 (7th Cir. 2015).
Such showing proves a violation of the Act subject to the following affirmative defense: the
employer, even if it fails to meet or neutralize the General Counsel's showing, can avoid the
finding that it violated the Act by “demonstrat[ing] that the same action would have taken place in 20
the absence of the protected conduct.” Wright Line, supra at 1089.
B. Application of Wright Line
1. The General Counsel’s affirmative case25
a. The Respondent’s admitted motive was discriminatory
In the complaint, and at trial, the General Counsel contended that the Respondent’s
motive for refusing to provide appreciation day for union-represented employees, and Killen’s 30
explanation for Merck’s motive for this, revolved around “labor troubles.” Specifically, it was
alleged that Killen told the union representatives that Merck’s decision was based on safety
problems and labor-related activities at Rahway and West Point.
I have found that, contrary to the General Counsel’s claim, Killen did not tell union 35
representatives Vallo or Little that labor problems at Rahway or West Point, or safety problems,
were the reason that union-represented employees were excluded from the appreciation day.
And I do not find that there is evidence to support the claim that it was the reason.
Rather, I have found that Zingales, the individual who effectively recommended the 40
exclusion of the union-represented employees from appreciation day, admitted that Merck’s
motive was that it could not provide the benefit unilaterally and that it would not offer the unions
the benefit because in recent years the unions had refused to accommodate Merck’s mid-contract
requests for “minor changes” in payroll and 401(k) administration and holiday issues. Killen also
testified that he told Vallo this.945

9I note that the Respondent admits that Zingales told Killen this was the rationale for not
offering the benefit to employees, and admits that Killen told this to Vallo. See R. Br. at 13–14.
JD–118–16
10
This latter admitted motive proves a violation under Wright Line. Clearly the unions’
refusal to accede to the employer’s request for midterm changes was protected activity. R.E.C.
Corp., 296 NLRB 1293, 1293 (1989) (“The employees’ conduct in refusing to reopen the contract
was clearly protected”; finding employer violated Act by “laying off employees because they
refused to reopen the parties’ collective-bargaining agreement and agree to midterm 5
modification”). The Respondent obviously knew about it, as Zingales raised it. The credited
evidence shows that Merck refused to offer union employees the day off because of and in
retaliation for the unions’ protected activity of refusing to bargain midterm contractual changes
desired by the Respondent. And, as discussed below, Zingales’ explanation that appreciation
day could not be offered unilaterally is not a convincing or accurate explanation for not offering 10
the benefit.
To be clear, absent an unlawful motivation, there is no requirement that an employer
provide represented and unrepresented employees with the same benefits. At the same time,
offering or providing of differing benefits may be a violation of Section 8(a)(3) and (1) of the Act, if15
such conduct is motivated by antiunion considerations.
Under Shell Oil Co., 77 NLRB 1306, 1310 (1948) and its progeny, “an employer may,
during the course of collective-bargaining negotiations, treat represented and unrepresented
employees differently when providing new benefits, so long as the disparate treatment is not 20
unlawfully motivated.” Arc Bridges, Inc., 362 NLRB No. 56, slip op. at 2 (2015). For instance, in
Sun Transport Inc., 340 NLRB 70, 72 & fn. 12 (2003), the Board dismissed an 8(a)(3) allegation
based on an employer offering less severance pay to union-represented employees during
collective bargaining than it was offering to unrepresented employees. The Board explained that
25
the mere fact that different offers are made or that different benefits are provided
does not, standing alone, demonstrate unlawful motive. Although an employer is
not free to discriminatorily afford represented employees less benefits than
unrepresented employees, i.e., in order to discourage support for the union, the
record does not establish that the Respondent engaged in such conduct here. . . . 30
Rather, the Respondent's offer was made in an effort to induce concessions as
part of the give-and-take during negotiations over a comprehensive successor
agreement.
See also, B.F. Goodrich Co., 195 NLRB 914, 915 (1972) (“Thus, in the absence of discriminatory 35
motives in withholding a benefit from these employees in order to encourage or discourage their
membership in or representation by a union, we find no merit in the General Counsel's contention
that Respondent violated Section 8(a)(3) by granting the profit-sharing benefit only to
unrepresented employees”).
40
The issue then, is whether the Respondent's decision not to provide the day off to its
represented employees (except to those it felt it contractually required to provide it to) was
unlawfully motivated. In other words, was the decision not to provide appreciation day because
of the unions’ past refusal to accommodate the employer’s midterm demands for changes
retaliation for union activity? 45
The Respondent, while admitting (R. Br. at 13–14) this as a “rationale,” calls it part of a
“bargaining strategy,” of the kind permitted by the Board in Sun Transport, supra, and points to
Zingales’ testimony that he did not think it “a good bargaining strategy to give away [a] holiday.”
But the Respondent’s decision and actions manifestly were not a bargaining strategy, at least not 50
one that the Board legitimates. Indeed, appreciation day, and the decision not to provide the
JD–118–16
11
appreciation day off to the represented employees, was not made during or as part of collective
bargaining. It was not refused as part of an ongoing effort “to force concessions in other areas.”
Sun Transport, supra at 72. To the contrary, the decision was made in direct and admitted
retaliation for the union’s past lawful refusal to bargain midterm changes to the collective-
bargaining agreement. In other words, the evidence shows that the employer, by its own 5
admission, decided to maintain its position of withholding a new benefit that it was providing
worldwide to all nonrepresented employees (and even represented employees outside of the
U.S.) in direct response to the unions’ past collective-bargaining strategy of refusing to entertain
midterm contractual changes. (There is, of course, no claim by Merck that union employees were
less deserving of appreciation than other employees in terms of the work performed or job done 10
at Merck.)
To call this a “bargaining strategy” does not avoid the fact that its motivation is
discrimination against the union-represented employees for the purpose of penalizing them
because of the union’s (lawful) refusal to accept previous and unrelated employer-offered terms 15
and conditions of employment. Calling it a “bargaining strategy” insulates the conduct from the
proscriptions of the Act no more than would the layoff of a group of employees in retaliation for
their refusal to entertain midterm contractual changes. R.E.C. Corp., 296 NLRB at 1293.
The difference between the Respondent’s motives here, and the situation where an 20
employer is motivated by a lawful “bargaining strategy,” is plainly demonstrated by comparing the
instant situation to that in Sun Transport, supra—a case relied upon by the Respondent.
In Sun Transport, in late 1996, the employer began successor negotiations with its
employees’ union for a new labor agreement. In March 1997, the employer decided to divest 25
itself of the business and thereafter the successor agreement negotiations also encompassed the
issue of a severance package. At the same time, the employer offered to its unrepresented
employees a severance package more lucrative than what it was offering at the bargaining table
to the union for the unionized employees. In April or May 1997, a tentative agreement was
reached on the severance and the successor contract, both of which were voted down by the 30
union’s membership. Subsequent negotiations focused mostly on severance, as the sale was
underway. The employer refused the union’s offer that the same severance provided the
unrepresented employees be provided. The unit employees again rejected a tentative severance
package that was inferior to that provided the unrepresented employees, and ultimately the
union-represented employees received no severance for their jobs. In a November 1997 letter to 35
the union, the employer’s vice-president Fretz explained that in formulating its severance
proposal the employer “had considered how responsive the ‘represented group’ had been to the
Respondent’s efforts to contain costs and improve its competitive position,” noting that in the
recent negotiations “the parties had failed to reach agreement on some of the Respondent’s
proposals, and this resulted in continued high, uncompetitive costs” which was a factor “when we 40
determine whether we are willing to offer severance packages to a given group of employees, as
well as having some impact on our evaluation of the total additional costs we are willing to
sustain.” Sun Transport, supra at 71.
The administrative law judge in Sun Transport found that the employer’s position 45
constituted an admission that the Respondent retaliated against the Union for its bargaining
positions. The Board reversed, but did so with reasoning that makes clear that Merck’s motives
here are unlawful.
In Sun Transport, the Board rejected the judge’s conclusion that the employer had offered 50
less severance pay to represented employees in retaliation for the union’s bargaining positions,
JD–118–16
12
because the Board found that the employer’s motive for offering less to the union employees was
the cost of bargaining positions taken by the union in negotiations. Specifically, the Board in Sun
Transport rested its conclusion on its finding that the employer attributed its “high, uncompetitive
costs” and “uncompetitive situation” to the union bargaining positions, and
5
those high costs, in turn, were a factor considered by the Respondent in
formulating its severance proposal. Thus, we cannot say that the [union’s]
bargaining position itself was the basis for the severance pay offer.
Further, even if the severance pay offer was based upon the Union's bargaining 10
position during the negotiations for a successor contract, we would still find no
violation of the Act. With respect to this Union, the matter of severance pay arose
during comprehensive bargaining for a new contract. The Respondent sought
concessions in late 1996 and continued to seek them in 1997. And, in 1997, this
bargaining was intertwined with the bargaining over severance pay. The 15
Respondent sought to use the severance pay issue to force concessions in other
areas. More particularly, the Respondent, as it explained in the November 17
Fretz letter, was tying its position on severance to the Union's refusal "during the
entire period" (i.e., during the negotiations in 1996 and 1997 for a successor
collective-bargaining agreement) to make concessions in other areas.20
. . . . The Respondent's severance offer was but one element of the "competing
forces and counteracting pressures" inherent in the collective-bargaining process.
Consequently, the Respondent's consideration of the Union's bargaining positions
does not demonstrate antiunion animus. [citations omitted.]25
Merck’s motive for refusing to provide the appreciation day off to represented employees
does not square with the rationale that saved the employer in Sun Transport. Unlike in Sun
Transport, here there is no evidence that Merck’s position was based on “costs” or
“uncompetitiveness” that resulted from the unions’ refusal to grant what Killen described as 30
“minor changes” during the contract term. Thus, directly contrary to the distinction drawn by the
Board in Sun Transport, here, the unions’ position on the midterm changes—not the costs that
Merck incurred because of them—was the basis for failing to give the appreciation day off.
“Thus,” unlike in Sun Transport, here “we [can] say that the [union’s] bargaining position itself was
the basis for the [employer’s] offer.”35
Moreover, the Board’s second rationale in Sun Transport for finding no violation is also
inapposite here. Unlike in Sun Transport, the failure to include the union-represented employees
in appreciation day was not “intertwined” with ongoing bargaining. Unlike in Sun Transport,
Merck was not using the appreciation day “issue to force concessions in other areas.” To the 40
contrary, Merck sought and gained nothing from its position of not providing appreciation day off
to the union-represented employees. In a very real sense, it consciously refused to use
appreciation day as a bargaining chip with the unions. Merck’s position on appreciation day was
not “but one element of the ‘competing forces and counteracting pressures’ inherent in the
collective-bargaining process.” Rather, this was pure retaliation for the unions’ positions taken in 45
the recent past, and bargaining was neither sought nor granted by Merck over appreciation day.
In short, in this case Merck’s motivations bear none of the indicia relied upon by the Board
in Sun Transport to find the discrimination between represented and nonrepresented employees
to be merely a part of a lawful bargaining strategy. Merck’s admitted and credited motive for not 50
JD–118–16
13
providing union-represented employees the appreciation day benefit constitutes straightforward
evidence of discriminatory motive under the Act.
b. The July 28 announcement effectively blames the
employees’ union status for the exclusion from appreciation day5
There is, however, more. The July 28 announcement to employees, by itself, adds to the
weight of the discriminatory inference. While announcing that appreciation day “applies globally
where” permitted “and, as required, subject to consultation with employee representatives,” the
announcement adds the condition that “[t]his additional day off does not apply to those in the U.S. 10
who are covered by a collective bargaining agreement.”
Thus, while appreciation day covers employees, even when it requires “consultation with
employee representatives,” the only employees who are excluded from receiving the benefit are
(U.S.) employees who are union-represented and covered by a collective-bargaining agreement. 15
This explanation “essentially encouraged employees to blame” the union and their union status
for the failure to receive the benefit and is an independent indicia of discriminatory motive. Arc
Bridges, 362 NLRB No. 56, slip op. at 3 (finding this to be an indicia of discriminatory motive).10
c. The Respondent’s unilateral-action rationale is a pretext20
The strength of the General Counsel’s Wright Line case is also increased by the
transparently pretextual nature of the Respondent’s claim that it did not provide the paid day off to
union employees because it would violate the law to do so unilaterally without consulting with the
employees’ union. 25
Zingales testified that it was his belief that it would be a violation of the law to unilaterally
provide appreciation day to employees with a collective-bargaining agreement. He told Geller
this was the grounds for excluding union-represented employees from appreciation day. Merck
executives Goggin and Frazier reiterated this after July 28, when they issued statements trying to 30
calm the anger over the union employees’ exclusion, but reiterating the exclusion of union
employees from the benefit.
However, I reject as meritless, and untrue, the Respondent’s contention that a motive for
failing to provide the appreciation day to union-represented employees was the belief that it would 35
violate the Act to do so unilaterally. If that were its motivation for not providing the benefit, it
would have offered it to the unions as a proposal for the unions to consider, and—as the local
union presidents indicated they would—accept. Indeed, remarkably, in view of Merck’s
argument, its July 28 announcement of appreciation day stated that the benefit “applies globally
where business operations and local practices/laws permit, and, as required, subject to 40
consultation with employee representatives or works councils.” (Emphasis added.) Thus, as
Merck itself recognized, any concern with granting the benefit unilaterally to union-represented
employee would (and easily could) be overcome by “consultation with employee representatives.”
As the Board has explained it:

10I note that although unalleged in this case, “it is settled that it is a violation of Section 8(a)(1)
for an employer to tell employees that they will be losing a benefit because their status as union
represented makes them ineligible for the benefit.” Covanta Energy Corp., 356 NLRB 706, 714
(2011); Niagara Wires, Inc., 240 NLRB 1326, 1327 (1979) (it is a per se violation of Section
8(a)(1) for employer to maintain a pension plan that by its terms excludes from coverage
employees who are ‘subject to the terms of a collective bargaining agreement.”
JD–118–16
14
To the extent that the Respondent is arguing that it had to withhold the increase to
avoid violating Sec. 8(a)(5), there is no merit in that position either. Had the
Respondent wanted to give its represented employees the same 3-percent
increase that it gave the unrepresented employees, it could have simply asked the
Union for permission. If the Union consented, the Respondent could have granted 5
the increase without violating Sec. 8(a)(5).
Arc Bridges, 362 NLRB No. 56, slip op. at 5 fn. 18 (Board’s emphasis.)
Merck’s argument that the benefit could not be provided unilaterally is a flimsy,10
unbelievable, and nonresponsive excuse for its unwillingness to offer the benefit. It is a purported
rationale contradicted by its own notice explaining how it will provide appreciation day in
instances where “local practices/laws” require consultation with a union. Thus, Merck’s “unilateral
action” defense does nothing to explain why it maintained that the benefit would not “apply to
those in the U.S. who are covered by a collective bargaining agreement.”15
The truth is, its July 28 announcement notwithstanding, Merck never intended to consult
with its U.S. “employee representatives” so that the benefit could be provided to U.S. union-
represented employees. Killen was told this directly by Zingales on August 3, just days after the
announcement, and he was told why: the unions’ past bargaining position. And on August 21, 20
Merck conclusively informed its plant managers that there would be no bargaining over the
matter. The purported restriction on the unilateral grant of benefits was not the reason for the
decision not to offer union-represented employees appreciation day. For all these reasons,
Zingales’ testimony that it was the reason is not credible. Notably, as Killen testified, upon
hearing this “unilateral action” rationale on August 3, he immediately recognized that “clearly I 25
knew that wouldn’t be a sufficient response” . . . to go [take] back to the site.” He knew that dog
wouldn’t hunt. And I agree. It begs the question, which is to say it is an obvious pretext.
While I do not reach or adopt the General Counsel’s argument that Merck had what
amounted to a past practice of passing on to union-represented employees benefits given to 30
nonrepresented employees, the past instances in the record of offering new benefits to union
employees demonstrate that Merck knew how to provide union employees a new benefit when it
wanted to do so.11
Merck’s refusal to offer appreciation day to union-represented employees had nothing at 35
all to do with and was not hindered by any alleged belief that it would be unlawful to provide the
benefit unilaterally. The pretextual nature of this claim, repeated by Zingales, Goggin, and
Frazier, adds to the strength of the General Counsel’s prima facie case of discrimination. El Paso

11Thus, on January 2, 1998, Merck gave represented and unrepresented employees the day
off in addition to the scheduled holidays off. In 2009, Merck again decided to make January 2, a
company holiday and it reached an agreement with Local 4-575 to include the union-represented
employees. R. Exh. 6. In 2006, after contract negotiations had concluded with a multi-union
council that bargained as a group with Merck at that time, Merck decided to make Martin Luther
King Jr.’s birthday a company holiday. The then-director of labor relations, Glen Guior, called
Vallo and said, “Ed, I want you to officially ask me as the Merck Inter-union council to have a
Martin Luther King’s birthday as an additional holiday for all the sites represented by the council.”
Vallo at first thought that Merck was not being serious, but, assured he was, Vallo asked and
Guior agreed, and the union employees thereafter received the holiday along with Merck
unrepresented employees. I cite these examples, not as evidence of an official past practice, but
as evidence that if Merck wanted to provide a benefit to union employees, it knew how to do so.
JD–118–16
15
Electric Co., 355 NLRB 428, 428 fn. 3 (2010) (finding of pretext raises an inference of
discriminatory motive and negates rebuttal argument that it would have taken the same action in
the absence of protected activities); All Pro Vending, Inc., 350 NLRB 503, 508 (2007); Rood
Trucking Co., 342 NLRB 895, 897-898 (2004), citing Laro Maintenance Corp. v. NLRB, 56 F.3d
224, 230 (D.C. Cir. 1995) ("When the employer presents a legitimate basis for its actions which 5
the factfinder concludes is pretextual . . . . the factfinder may not only properly infer that there is
some other motive, but that the motive is one that the employer desires to conceal—an unlawful
motive . . . .") (internal quotation omitted).
Accordingly, I find that the General Counsel has more than met his prima facie case and 10
proven that discriminatory animus motivated the Respondent’s decision not to provide
appreciation day for the union-represented employees.
2. The Respondent’s Wright Line rebuttal
15
The remaining issue under Wright Line is whether the Respondent has demonstrated that
it would have denied union-represented employees appreciation day even in the absence of the
protected union conduct that motivated its actions. Under the circumstances, it is not a serious
claim. I have already concluded, for the reasons discussed above, that the Respondent’s claim
that it could not unilaterally provide the benefit was a pretext. Notably where “the evidence 20
establishes that the proffered reasons for the employer’s action are pretextual—i.e., either false
or not actually relied upon—the employer fails by definition to show that it would have taken the
same action for those reasons, regardless of the protected conduct.” David Saxe Productions,
364 NLRB No. 100, slip op. at 4 (2016); Rood Trucking, 342 NLRB at 898, quoting Golden State
Foods Corp., 340 NLRB 382, 385 (2003). However, the Respondent raises some additional 25
arguments that I address below.
a. Bargaining strategy as a defense
Zingales testified that, “in addition” to the unilateral-action issue, he believed that it was 30
“not consistent with bargaining strategy” to provide the union-represented employees additional
benefits that were not in their labor agreement. Zingales had a preference for dealing with the
unions at the different Merck locations individually, and felt that “master bargaining is not in the
best interest of the company and not effective on a location-by-location basis.” In 2014, under
Zingales’ leadership, Merck ended the remnants of multi-union bargaining “master” bargaining—35
already by that time reduced to two locations from five or six—and Zingales was resistant to any
type of group bargaining with the unions. Moreover, Zingales explained, “I don’t think that coming
off a significant labor negotiations in Elkton and then Rahway”—negotiations he described as
“long drawn out” and “difficult,”—and with the West Point contract expiring in nine months on April
30, “that it was a good bargaining strategy to give away [a] holiday.” 40
The Respondent suggests that, even absent its unlawful motive, it would not have offered
the union employees the day off because it might smack of the multiunion coordinated bargaining
that Zingales opposed and that Merck had moved away from. This is unconvincing. Merck did
not need to engage in multiunion bargaining in order to offer the unions the day off. An email or 45
phone call to each union would have sufficed if Merck was worried that offering the day off en
masse would be misinterpreted as a revival of multiunion bargaining—a concern that, frankly,
seems contrived. Appreciation day was to show appreciation to the employees by providing an
unplanned paid day off. Union-represented employees were left out of this—not because Merck
says they were unappreciated. But rather, to “pay back” the unions for a lack of cooperation in 50
recent years. It is highly implausible, and entirely unproven, that union-represented employees
JD–118–16
16
were left out of appreciation day so that Merck could avoid any implication that it was violating its
principles against multi-union bargaining.
Similarly, I reject as untrue the general suggestion of Zingales that his “philosophy” or
“bargaining strategy” precluded any changes for union employees during the term of a contract. 5
Indeed, we know that Zingales had requested midcontractual changes from the unions and was
unhappy that the unions refused. Thus, it appears that this asserted live-and-die-by-the-contract
“strategy” emerged only in response to and in retaliation for the unions’ previous rebuff of Merck’s
entreaties. That would taint it, were it true. However, I do not believe it. Notably, Zingales did
not offer this as a contemporary explanation for Merck’s actions to Killen, to Geller, or to anyone 10
else, as far as the record shows. The first time the explanation was offered was at the hearing in
a description by Zingales of his internal thinking on the matter. This type of unverifiable assertion
is not the most compelling evidence. All the less so because it appears to be a transparent effort
to track cases in which the Board permits the employer leeway to grant or deny new benefits as
part of a “bargaining strategy.” I do not believe it. 15
The Respondent’s motivation for not providing, for not offering—for not permitting—union-
represented employees to have appreciation day off was because the unions failed to accede to
the Respondent’s will and make midterm changes to the contract requested in the past. The
Respondent has failed to demonstrate that it would have taken this action in the absence of the 20
past protected activities of the unions.
b. The 8(d) defense
The Respondent also argues that it cannot be found to have discriminated for not giving 25
union-represented employees the day off because the benefit is not in the collectively-bargained
agreements. Obviously, the contracts do not provide for appreciation day, it not having been
contemplated at the time the contracts were negotiated. The Respondent contends (R. Br. at 24)
that it may
30
rest on its rights under Section 8(d) [of the Act] not to be required “to discuss or
agree to any modification of the terms and conditions contained in a contract for a
fixed period . . .” See 20 U.S.C. 158(d). Similar to the strategy of Merck’s unions
not to consider negative adjustments to their contractual terms and conditions of
employment until negotiations for new agreements were underway, the Company’s 35
strategy was to wait until negotiations to consider proposing additional days off.
Doubling down on this view, the Respondent devotes an entire subsection of its brief (R.
Br. at 29–30) to the argument that Section 8(d) provides “a statutory right” not to bargain over the
appreciation day benefit and that 40
to find a Section 8(a)(3) violation based on an employer’s refusal to discuss a mid-
term modification would essentially read Section 8(d) out of the Act. An employer
either has a right under Section 8(d) to rest on its contractual rights or it does not.
45
The Respondent’s contention is wrong. Section 8(d) of the Act, by its terms, defines what
it means to “bargain collectively,” the refusal to do so being an unfair labor practice pursuant to
Section 8(a)(5) of the Act. But nothing in Section 8(d) or Section 8(a)(5) speaks to whether an
employer’s actions violate Section 8(a)(3)—which is what is at issue here—or whether the
employer is acting “by discrimination in regard to . . . any term or condition of employment to 50
encourage or discourage membership in any labor organization.” The Respondent’s contention
JD–118–16
17
that Section 8(d) immunizes it from discrimination claims is without support in law or logic.
Employees working under a collective-bargaining agreement can be discriminated against without
regard to whether an employer’s actions also violate a bargaining obligation, or, for that matter,
contractual obligations. The statutory duty to bargain and the statutory duty not to discriminate
are distinct and independent obligations under the Act.125
I note that under the Respondent’s theory of 8(a)(5) and 8(d) immunity for discriminatory
conduct, an employer would be free to announce to employees that, for the express purpose of
encouraging union-represented employees to decertify their unions, it will provide $1000 to each
of its unorganized employees, and not to any of its union-represented employees working under a 10
collective-bargaining agreement. The difference between this hypothetical case and Merck’s
actions is one of degree not kind. Both cases turn on an assessment of the motives for not
providing the benefit to union-represented employees. In both cases a violation of 8(a)(3) is the
correct conclusion if the employers’ actions were unlawfully motivated. The existence of a
contract does not shield the employer from liability for antiunion discrimination.15
Critical to its error is Merck’s assumption of equivalence between the unions’ past refusal
to accede to requests for mid-contract changes, and Merck’s refusal to offer the appreciation day.
The comparison is specious, and goes to the heart of Merck’s misreading of its obligations under
the Act. Respondent’s suggestion of “tit-for-tat” does not permit it to discriminate. What we have 20
here is a decision to exclude union-represented employees from a day off offered to all other
employees because of their unions’ previous lawful bargaining conduct. Section 8(a)(3)
proscribes an employer from making discriminatory decisions about employee terms and
conditions that are motivated by employees’ union affiliation. By contrast, the union conduct for

12While uncommon, instances of a discriminatory application of benefits by an employer
during a collective-bargaining agreement that do not violate the Section 8(a)(5) bargaining
obligation do arise. See, e.g., Reebie Storage and Moving Co., 313 NLRB 510 (1993) (employer
did not violate 8(a)(5) by failing to apply contract to all eligible unit members but only to union
members, but “identical” conduct violated Section 8(a)(3) based on unlawful discrimination of
providing greater remuneration and superior benefits to union employees than to nonunion
employees); enft. denied on other grounds 44 F.3d 605 (7th Cir. 1995); Esmark, Inc., 315 NLRB
763 (1994) (Board does not find factual basis to pierce veil and hold parent of employer liable for
8(a)(5) bargaining violation for abrogation of contract but finds parent liable under 8(a)(3) for
same sham closing and reopening of facility). More commonly, but also illustrative of the point,
are cases in which both an 8(a)(5) and an 8(a)(3) violation is found based on the same or similar
conduct, but the violations are separately analyzed and independent of one another. See, e.g.,
Covanta Energy Corp., 356 NLRB 706 (2011) (elimination of corporate bonus and recommended
annual wage increase separately analyzed and independently found to be violation of 8(a)(3) and
8(a)(5)); Phelps Dodge Mining Co., 308 NLRB 985 (1992) (separate analysis of 8(a)(3) and
8(a)(5)), enft. denied 22 F.3d 1493 (10th Cir. 1994). Alternatively, sometimes the Board finds it
unnecessary to reach an 8(a)(3) allegation because, having found the same conduct to have
been an 8(a)(5) violation, an additional violation would not materially affect the remedy. See,
e.g., Alamo Rent-A-Car, 362 NLRB No. 135, slip op. at 3 fn. 8 (2015), 831 F.3d 534 (D.C. Cir.
2016); Bryant & Stratton Business Institute, 321 NLRB 1007, 1007 fn. 4 (1996). And vice-versa.
See, e.g., Advanced Life Systems, 364 NLRB No. 117, slip op. at 3 fn. 8 (2016) (Board does not
reach 8(a)(5), because, having found the same conduct to have been an 8(a)(3), additional
violation would not materially affect the remedy. Sutter Roseville Medical Center, 348 NLRB 637,
637 fn. 7 (2006) (same). But in no case does the Board hold that the lack of finding of an 8(a)(5)
violation precludes the finding of an 8(a)(3) violation.
JD–118–16
18
which Merck is retaliating is free of any suggestion of discrimination, or even any statutory basis
for condemning such discrimination against an employer were it proved.
Whether or not the General Counsel should have or could have mounted an 8(a)(5) case
against Merck does not implicate the issue of whether the Respondent engaged in unlawfully 5
motivated discrimination by refusing to provide the day to employees. Indeed, the Respondent
concedes as much by agreeing (R. Br. at 18; R. Exh. 1 at 3), correctly, that Wright Line and its
assessment of the Respondent’s motivation is the appropriate basis for deciding this case.
In short, employers are not required to engage in mid-contract bargaining (over matters 10
waived in a collectively-bargained agreements). But an employer cannot refuse to do so for
unlawful reasons, in this case, in admitted retaliation for a union’s previous bargaining conduct. 13

13Respondent’s position is meritless without regard to its premise that it had no duty to
bargain about appreciation day and did not violate the Act by refusing to bargain about this new
appreciation day. However, I note that even this premise is in question and unproven. No
bargaining violation is alleged, but Merck’s assumption that it could not have been is far from
certain. It rests on the untested and nonevident claim that because the unions’ contracts with
Merck contain other holidays, the unions have clearly and unmistakably waived the right to
bargain about appreciation day (which is not a holiday in the contract). However, waiver is not
lightly inferred and must be "clear and unmistakable." See Metropolitan Edison v. NLRB, 460 U.S.
693, 708 (1983). The party asserting waiver must establish that the parties "unequivocally and
specifically express[ed] their mutual intention to permit unilateral employer action with respect to
a particular employment term, notwithstanding the statutory duty to bargain that would otherwise
apply." Provena St. Joseph Medical Center, 350 NLRB 808, 811 (2007). As the Board explained
in Empire Pacific Industries, 257 NLRB 1425, 1425 (1981):
As further set forth in B. F. Goodrich, an employer is under a duty to bargain
during the existence of a collective-bargaining agreement concerning any
mandatory subject of bargaining which has not been specifically covered in the
contract and which the union has not clearly and unmistakably waived. [Footnote
omitted.] Thus, where an employer grants a benefit to a group of unrepresented
employees, if the benefit is a mandatory subject of bargaining which is not
specifically covered by the represented employees' collective-bargaining
agreement and has not been clearly and unmistakably waived by the union, the
employer is obligated to bargain with the union concerning the implementation of
this benefit for the represented employees. In such a situation, the failure to
bargain in good faith with the union over the benefit granted constitutes a violation
of Section 8(a)(5) and (1) of the Act. L.M. Berry and Company, 254 NLRB 42
(1981) and B. F. Goodrich, supra. Furthermore, implementing such a benefit for
unrepresented employees while refusing to bargain with the union over the benefit
is also a violation of Section 8(a)(1).
See also B.F. Goodrich, 195 NLRB at 915 (“As found by the Trial Examiner, the Union did not
waive its right to be consulted about the institution of this type of benefit during the parties'
negotiation of the existing collective-bargaining agreement. By thereafter instituting the plan for
its unorganized employees while unlawfully refusing to bargain with the Union as the statutory
representative of its warehouse employees, Respondent deprived the latter employees of their
right to bargain collectively with respect to obtaining this additional benefit. As such conduct
interferes with, restrains, and coerces the unit employees in the exercise of their right to bargain
collectively through representatives of their own choosing, we conclude that Respondent thereby
further violated Section 8(a)(1)”).
JD–118–16
19
C. The allegations relied upon to find the violation are
closely-related to the pleadings and fully litigated
While the General Counsel argues on brief (as I have found) “that even Killen’s own
version of his conversation with [union] officials demonstrates that Merck’s decision to exclude 5
was unlawfully motivated” (GC Br. at 23 fn. 12) (citation omitted), I recognize that the General
Counsel chiefly argued that the “labor troubles” at Rahway and West Point were the motivation
for the Respondent’s unlawful conduct. This was based on the alleged comments of Killen to
Vallo and Little that I have not credited. More formally, the complaint (GC Exh. 1(u) at para. 9)
attributed Merck’s actions generally to “concerted activities” of employees represented by the 10
charging party unions, an allegation that covers Zingales’ credited admission of Merck’s
motivation for excluding union employees from appreciation day, which Killen then conveyed to
Vallo. While the credited motivation is different from that primarily advanced by the General
Counsel at trial, it is within the scope of the pled allegation. (See GC Exh. 1(u) at para. 9). Thus,
there is no due process issue, as the complaint alleged, and, indeed, the trial focused on whether 15
the Respondent’s motivation for its failure to provide union-represented employees with the
appreciation day violated Section 8(a)(3) of the Act. That is to say, the finding of unlawful
motivation “is closely connected to the subject matter of the complaint and has been fully
litigated." Pergament United Sales, Inc., 296 NLRB 333, 334 (1989), enfd. 920 F.2d 130 (2d Cir.
1990); Casino Ready Mix, Inc., 335 NLRB 463, 464 (2001), enfd. 321 F.3d 1190 (D.C. Cir. 20
2003). And that is particularly so here, where “the finding of a violation is established by
testimonial admissions of the Respondent’s own witnesses.” Id. The Respondent, on direct
examination of its own witness, supplied the answer to the question of the motive for its actions
and proved the unlawful motivation. There was no objection to the relevant evidence; indeed, it
was repeated and reaffirmed on cross-examination (Tr. 265) and reasserted in the Respondent’s 25
brief. See R. Br. at 13-14. It is no defense to an allegation of unlawfully motivated conduct to
admit to a (slightly) different unlawful motive for the conduct.
I find that the Respondent violated Section 8(a)(3) and (1) of the Act by discriminatorily failing
to provide appreciation day to union-represented employees.30
II. Section 8(a)(1)
The Board will find a supervisory statement to violate Section 8(a)(1) of the Act where it 35
"would reasonably tend to interfere with, threaten, or coerce employees in the exercise of their
rights under Section 7 of the Act." Waste Stream Management, 315 NLRB 1099, 1100 (1994).
It is well-settled that in evaluating the remarks, the Board does not consider either the
motivation behind the remarks or their actual effect. Miller Electric Pump & Plumbing, 334 NLRB 40
824, 825 (2001); Joy Recovery Technology Corp., 320 NLRB 356, 365 (1995), enfd. 134 F.3d
1307 (7th Cir. 1998). Rather, "the basic test for evaluating whether there has been a violation of
Section 8(a)(1) is an objective test, i.e., whether the conduct in question would reasonably have a
tendency to interfere with, restrain, or coerce employees in the exercise of their Section 7 rights,
and not a subjective test having to do with whether the employee in question was actually 45
intimidated." Multi-Ad Services, 331 NLRB 1226, 1227–1228 (2000) (Board's emphasis), enfd.
255 F.3d 363 (7th Cir. 2001).
Killen’s explanation to Vallo about why Merck refused to provide the union employees with
appreciation day was, by all evidence, offered in good faith, without his endorsement, and in an 50
effort to answer Vallo’s questions about Merck’s motives for a decision with which Killen
JD–118–16
20
disagreed. It might seem counterintuitive to condemn as a separate violation of the Act a
manager’s frank discussion with a union representative about an employer’s motives for an
adverse decision, all the more so when it reveals an otherwise hidden and unlawful motive. Yet,
Killen’s intentions aside, as they must be put, the message would have reasonable tendency to
interfere with Vallo’s protected activity. Specifically, his decisionmaking in his representative 5
capacity when next approached by management seeking midterm concessions. His participation
as local union president is core Section 7 activity, and there is a reasonable tendency that
informing an employee that these decisions have led to retaliation against bargaining unit
members will interfere, threaten, and coerce. I recognize that it does not appear that Vallo (or
Little) recalls Killen saying this—they testified to a different allegedly unlawful explanation by 10
Killen—but under the objective test employed by the Board, that is not the relevant inquiry. I
believe Killen. I believe he said it and accurately reported what he was told by Zingales. In doing
so, he violated the Act. Alamo Rent-A-Car, 362 NLRB No. 135, slip op. at 2 fn. 3 (managers’
statements to unit employees that they were losing STD benefits “because of their union contract”
but that nonunion employees would retain a form of the benefit violates 8(a)(1)); Goya Foods of 15
Florida, 347 NLRB 1118, 1131 (2006) (comment that employees would be unable to participate
in the company’s pension plan if they were union members violates 8(a)(1)).14
CONCLUSIONS OF LAW20
1. The Respondent, Merck, Sharp & Dohme Corp., is an employer within the meaning of Section
2(2), (6), and (7) of the Act.
2. The Respondent violated Section 8(a)(3) and (1) of the Act by discriminatorily denying union-25
represented employees a paid day off in retaliation for union activity protected by the Act.
3. The Respondent violated Section 8(a)(1) of the Act by informing employees that the
Respondent was denying union-represented employees a paid day off in retaliation for union
activity protected by the Act. 30
4. The unfair labor practices committed by the Respondent affect commerce within the meaning
of Section 2(6) and (7) of the Act.
35
40

14While Killen’s statement differed from the one alleged by the General Counsel, it occurred in
the same time frame, concerned the same subject (i.e., the Respondent’s motive for excluding
union-represented employees from appreciation day), was made by the same supervisor to the
same union representative, and came into evidence during Killen’s direct testimony through his
admission. The matter “is closely connected to the subject matter of the complaint and has been
fully litigated." Pergament United Sales, Inc., 296 NLRB at 334; Casino Ready Mix, Inc., 335
NLRB at 464.
JD–118–16
21
REMEDY
Having found that the Respondent has engaged in certain unfair labor practices, I find that 5
it must be ordered to cease and desist therefrom and to take certain affirmative action designed
to effectuate the policies of the Act.
The Respondent shall make whole the union-represented employees for any losses of
earnings and other benefits they suffered as a result of its discriminatory denial to them of the 10
paid day off known as appreciation day.
The make-whole remedy shall be computed in accordance with Ogle Protective Service,
183 682 (1970), enfd. 444 F.2d 502 (6th Cir. 1971), with interest as prescribed in New Horizons,
283 NLRB 1173 (1987), and compounded daily as prescribed in Kentucky River Medical Center,15
356 NLRB 6 (2010). In accordance with Don Chavas, LLC d/b/a Tortillas Don Chavas, 361 NLRB
No. 10 (2014), the Respondent shall compensate any employees adversely affected by the
unlawful conduct for the adverse tax consequences, if any, of receiving lump sum backpay
awards, and in accordance with AdvoServ of New Jersey, Inc., 363 NLRB No. 143 (2016), the
Respondent shall, within 21 days of the date the amount of backpay is fixed, either by agreement 20
or Board order, file with the Regional Director for Region 6 a report allocating backpay to the
appropriate calendar year for each employee. The Regional Director will then assume
responsibility for transmission of the report to the Social Security Administration at the appropriate
time and in the appropriate manner.
The Respondent shall post an appropriate informational notice, as described in the 25
attached appendix. This notice shall be posted at all of the Respondent's facilities employing
union-represented employees who were denied appreciation day, and at such facilities shall be
posted wherever the notices to employees are regularly posted for 60 days without anything
covering it up or defacing its contents. 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, 30
and/or other electronic means, if the Respondent customarily communicates with its employees
by such means. In the event that, during the pendency of these proceedings the Respondent has
gone out of business or closed a facility involved in these proceedings, the Respondent shall
duplicate 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 September 4, 2015. When the notice 35
is issued to the Respondent, it shall sign it or otherwise notify Region 6 of the Board what action it
will take with respect to this decision.
On these findings of fact and conclusions of law and on the entire record, I issue the
following recommended1540

15If no exceptions are filed as provided by Sec. 102.46 of the Board’s Rules and Regulations,
the findings, conclusions, and recommended Order shall, as provided in Sec. 102.48 of the
Rules, be adopted by the Board and all objections to them shall be deemed waived for all
purposes.
JD–118–16
22
ORDER
The Respondent Merck, Sharp & Dohme Corp., Kenilworth, New Jersey, its officers,
agents, successors, and assigns, shall
5
1. Cease and desist from:
(a) Informing employees that it is denying union-represented employees a paid
day off in retaliation for union activity protected by the Act.
10
(b) Discriminatorily denying union-represented employees a paid day off in
retaliation for union activity protected by the Act.
(c) In any like or related manner interfering with, restraining, or coercing
employees in the exercise of the rights guaranteed them by Section 7 of the 15
Act.
2. Take the following affirmative action necessary to effectuate the policies of the Act:
(a) Make union-represented employees who were denied the paid day off known 20
as appreciation day whole for any losses of earnings and other benefits
suffered as a result of the discrimination against them, in the manner set forth
in the remedy section of the decision in these cases.
(b) Preserve and, within 14 days of a request, or such additional time as the 25
Regional Director 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 records and reports, and all other
records, including an electronic copy of such records if stored in electronic
form, necessary to analyze the amount of backpay due under the terms of this 30
Order.
(c) Within 14 days after service by the Region, post at its facilities where any
union-represented employee was denied the paid day off known as
appreciation day copies of the attached notice marked "Appendix." 16 Copies 35
of the notice, on forms provided by the Regional Director for Region 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 customarily
posted. In addition to physical posting of paper notices, notices shall be 40
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. Reasonable steps shall be
taken by the Respondent to ensure that the notices are not altered, defaced,
or covered by any other material. In the event that, during the pendency of 45

16If 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 Judgment of the United States Court of Appeals Enforcing an Order of the National
Labor Relations Board."
JD–118–16
23
these proceedings, the Respondent has gone out of business or closed any
facility involved in these proceedings, the Respondent shall duplicate 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 September
4, 2015. 5
(d) 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 comply.
10
Dated, Washington, D.C. December 20, 2016
___________________15
David I. Goldman
U.S. Administrative Law Judge
Ca,
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 benefit and protection
Choose not to engage in any of these protected activities.
WE WILL NOT tell you that we are denying union-represented employees a paid day off in
retaliation for union activity protected by the Act.
WE WILL NOT discriminatorily deny union-represented employees a paid day off in retaliation for
union activity protected by the Act.
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 make union-represented employees to whom we discriminatorily denied the paid day
off known as appreciation day whole, with interest, for any loss of earnings or other benefits
suffered as a result of our discrimination against them.
MERCK, SHARP & DOHME CORP.
(Employer)
Dated By
The National Labor Relations Board is an independent Federal agency created in 1935 to enforce the National Labor
Relations Act. It conducts secret-ballot elections to determine whether employees want union representation and it
investigates and remedies unfair labor practices by employers and unions. To find out more about your rights under the
Act and how to file a charge or election petition, you may speak confidentially to any agent with the Board’s Regional
Office set forth below. You may also obtain information from the Board’s website: www.nlrb.gov.
William S. Moorhead Federal Building, Room 904, Pittsburgh, PA 15222-4111
(412) 395-4400, Hours: 8:30 a.m. to 5 p.m
The Administrative Law Judge’s decision can be found at www.nlrb.gov/case/06-CA-16315 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.
THIS IS AN OFFICIAL NOTICE AND MUST NOT BE DEFACED BY ANYONE
THIS NOTICE MUST REMAIN POSTED FOR 60 CONSECUTIVE DAYS FROM THE DATE OF POSTING AND MUST NOT BE
ALTERED, DEFACED, OR COVERED BY ANY OTHER MATERIAL. ANY QUESTIONS CONCERNING THIS NOTICE OR
COMPLIANCE WITH ITS PROVISIONS MAY BE DIRECTED TO THE ABOVE REGIONAL
OFFICE’S COMPLIANCE OFFICER, (612) 802-1770.