369 U.S. 736 (1962), 222, Labor Board v. Katz

Docket Nº:No. 222
Citation:369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230
Party Name:Labor Board v. Katz
Case Date:May 21, 1962
Court:United States Supreme Court

Page 736

369 U.S. 736 (1962)

82 S.Ct. 1107, 8 L.Ed.2d 230

Labor Board



No. 222

United States Supreme Court

May 21, 1962

Argued March 22, 1962




While bona fide contract negotiations with a union representing its employees were being carried on, the employer, unilaterally and without first consulting the union, put into effect a new system of automatic wage increases, changes in sick leave benefits, and numerous merit increases, although such matters were subjects of the pending contract negotiations.

Held: by so doing, the employer violated the duty "to bargain collectively" imposed by § 8(a)(5) of the National Labor Relations Act. Pp. 737-748.

(a) On the record in this case, the Labor Board was justified in finding that the employer's unilateral action was taken before the contract negotiations were discontinued, and before the existence of any possible impasse. Pp. 741-742.

(b) Even in the absence of a finding of over-all subjective bad faith, an employer's unilateral change in conditions of employment under negotiation violates § 8(a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) as much as would a flat refusal to negotiate. Pp. 742-743.

(c) The unilateral changes in sick leave benefits plainly frustrated the statutory objective of establishing working conditions through collective bargaining and violated § 8(a)(5). P. 744.

(d) The employer's grant of wage increases greater than any he had ever offered the union at the bargaining table was necessarily inconsistent with a sincere desire to conclude an agreement with the union, and it violated § 8(a)(5). Pp. 744-745.

(e) The employer's unilateral action in granting discretionary merit increases to 20 employees was tantamount to an outright refusal to negotiate on that subject, and it violated § 8(a)(5). Pp. 745-747.

(f) Labor Board v. Insurance Agents' Union, 361 U.S. 477, distinguished. Pp. 747-748.

289 F.2d 700, reversed.

Page 737

BRENNAN, J., lead opinion

MR. JUSTICE BRENNAN delivered the opinion of the Court.

It is a violation of the duty "to bargain collectively" imposed by § 8(a)(5) of the National Labor Relations Act1 for an employer, without first consulting a union with which it is carrying on bona fide contract negotiations, to institute changes regarding matters which are subjects of mandatory bargaining under § 8(d) and which are in fact under discussion?2 The Labor Board answered the question affirmatively in [82 S.Ct. 1109] this case, in a decision which expressly disclaimed any finding that the totality of the respondents' conduct manifested bad faith in the pending negotiations.3 126 N.L.R.B.

Page 738

288. A divided panel of the Court of Appeals for the Second Circuit denied enforcement of the Board's cease and desist order, finding in our decision in Labor Board v. Insurance Agents' Union, 361 U.S. 477, a broad rule that the statutory duty to bargain cannot be held to be violated, when bargaining is in fact being carried on, without a finding of the respondent's subjective bad faith in negotiating. 289 F.2d 700.4 The Court of Appeals said:

We are of the opinion that the unilateral acts here complained of, occurring as they did during the negotiating of a collective bargaining agreement, do not per se constitute a refusal to bargain collectively and per se are not violative of § 8(a)(5). While the subject is not generally free from doubt, it is our conclusion that, in the posture of this case, a necessary requisite of a Section 8(a)(5) violation is a finding that the employer failed to bargain in good faith.

289 F.2d at 702-703. We granted certiorari, 368 U.S. 811, in order to consider whether the Board's decision and order were contrary to Insurance Agents. We find nothing in the Board's decision inconsistent with Insurance Agents, and hold that

Page 739

the Court of Appeals erred in refusing to enforce the Board's order.

The respondents are partners engaged in steel fabricating under the firm name of Williamsburg Steel Products Company. Following a consent election in a unit consisting of all technical employees at the company's plant, the Board, on July 5, 1956, certified as their collective bargaining representative Local 66 of the Architectural and Engineering Guild, American Federation of Technical Engineers, AFL-CIO. The Board simultaneously certified the union as representative of similar units at five other companies which, with the respondent company, were members of the Hollow Metal Door & Buck Association. The certifications related to separate units at the several plants, and did not purport to establish a multi-employer bargaining unit.

On July 11, 1956, the union sent identical letters to each of the six companies, requesting collective bargaining. Negotiations were invited on either an individual or "association-wide"5 basis, with the reservation that wage rates and increases would have to be discussed with each employer separately. A follow-up letter of July 19, 1956, repeated the request for contract negotiations and enumerated proposed subjects for discussion. Included were merit increases, [82 S.Ct. 1110] general wage levels and increases, and a sick leave proposal.

The first meeting between the company and the union took place on August 30, 1956. On this occasion, as at the ten other conferences held between October 2, 1956, and May 13, 1957, all six companies were in attendance

Page 740

and represented by the same counsel.6 It is undisputed that the subject of merit increases was raised at the August 30, 1956, meeting although there is an unresolved conflict as to whether an agreement was reached on joint participation by the company and the union in merit reviews, or whether the subject was simply mentioned and put off for discussion at a later date. It is also clear that proposals concerning sick leave were made. Several meetings were held during October, and one in November, at which merit raises and sick leave were each discussed on at least two occasions. It appears, however, that little progress was made.

On December 5, a meeting was held at the New York State Mediation Board attended by a mediator of that agency, who was at that time mediating a contract negotiation between the union and Aetna Steel Products Corporation, a member of the Association bargaining separately from the others, and a decision was reached to recess the negotiations involved here pending the results of the Aetna negotiation. When the mediator called the next meeting on March 29, 1957, the completed Aetna contract was introduced into the discussion. At a resumption of bargaining on April 4, the company, along with the other employers, offered a three-year agreement with certain initial and prospective automatic wage increases. The offer was rejected. Further meetings with the mediator on April 11, May 1, and May 13, 1957, produced no agreement, and no further meetings were held.


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