National Labor Relations Board v. Katz, 222

• Decision Date: 21 May 1962
• Docket Number: No. 222,222
• Citation: 82 S.Ct. 1107,369 U.S. 736,8 L.Ed.2d 230
• Parties: NATIONAL LABOR RELATIONS BOARD, Petitioners, v. Benne KATZ et al
• Court: U.S. Supreme Court

369 U.S. 736

82 S.Ct. 1107

8 L.Ed.2d 230

NATIONAL LABOR RELATIONS BOARD, Petitioners,

v Benne KATZ et al.

No. 222.

Argued March 22, 1962.

Decided May 21, 1962.

Solicitor General Archibald Cox, for petitioner.

Sidney O. Raphael, New York City, for respondents.

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 National Labor Relations Board answered the question affirmatively in 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 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 National Labor Relations Board v. Insurance Agents' Union, 361 U.S. 477, 80 S.Ct. 419, 4 L.Ed.2d 454, 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. 2 Cir., 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.' 2 Cir., 289 F.2d, at 702—703.

We granted certiorari, 368 U.S. 811, 82 S.Ct. 53, 7 L.Ed.2d 20, 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 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, geneal 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 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.

Meanwhile, on April 16, 1957, the union had filed the charge upon which the General Counsel's complaint later issued. As amended and amplified at the hearing and construed by the Board, the complaint's charge of unfair labor practices particularly referred to three acts by the company: unilaterally granting numerous merit increases in October 1956 and January 1957; unilaterally announcing a change in sick-leave policy in March 1957; and unilaterally instituting a new system of automatic wage increases during April 1957. As the ensuing litigation has developed, the company has defended against the charges along two fronts: First, it asserts that the unilateral changes occurred after a bargaining impasse had developed through the union's fault in adopting obstructive tactics.⁷ According to the Board, however, 'the evidence is clear that the Respondent undertook its unilat- eral actions before negotiations were discontinued in May 1957, or before, as we find on the record, the existence of any possible impasse.' 126 N.L.R.B., at 289—290. There is ample support in the record considered as a whole for this finding of fact, which is consistent with the Examiner's Intermediate Report, 126 N.L.R.B., at 295—296, and which the Court of Appeals did not question. ⁸

The second line of defense was that the Board could not hinge a conclusion that § 8(a)(5) had been violated on unilateral actions alone, without making a finding of the employer's subjective bad faith at the bargaining table; and that the unilateral actions were merely evidence relevant to the issue of subjective good faith. This argument prevailed in the Court of Appeals which remanded the cases to the Board saying:

'Although we might * * * be justified in denying enforcement without remand, * * * since the Board's finding of an unfair labor practice impliedly proceeds from an erroneous view that specific unilateral acts, regardless of bad faith, may constitute violations of § 8(a)(5), the case should be remanded to the Board in order that it may have an opportunity to take additional evidence, and make such findings as may be warranted by the record.' 2 Cir., 289 F.2d, at 709.⁹

The duty 'to bargain collectively' enjoined by § 8(a)(5) is defined by § 8(d) as the duty to 'meet * * * and confer in good faith with respect to wages, hours, and other terms and conditions of employment.' Clearly, the duty thus defined may be violated without a general failure of subjective good faith; for there is no occasion to consider the issue of good faith if a party has refused even to negotiate in fact—'to meet * * * and confer'—about any of the mandatory subjects.¹⁰ A refusal to negotiate in fact as to any subject which is within § 8(d), and about which the union seeks to negotiate, violates § 8(a)(5) though the employer has every desire to reach agreement with the union upon an over-all collective agreement and earnestly and in all good faith bargains to that end. We hold that an employer's unilateral change in conditions of employment under negotiation is similarly a violation of § 8(a) (5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does a flat refusal.¹¹

The unilateral actions of the respondent illustrate the policy and practical considerations which support our conclusion.

We consider first the matter of sick leave. A sick-leave plan had been in effect since May 1956, under which employees were allowed ten paid sick-leave days annually and could accumulate half the unused days, or up to five days each year. Changes in the plan were sought and proposals and counterproposals had come up at three bargaining conferences. In March 1957, the company, without first notifying or consulting the union, announced changes in the plan, which reduced from ten to five the number of paid sick-leave days per year, but allowed accumulation of twice the unused days, thus increasing to ten the number of days which might be carried over. This action plainly frustrated the statutory objective of establishing working conditions through bargaining. Some employees might view the change to be a diminution of benefits. Others, more interested in accumulating sick-leave days, might regard the change as an improvement. If one view or the other clearly prevailed among the employees, the unilateral action might well mean that the employer had either uselessly dissipated trading material or aggravated the sick-leave issue. On the other hand, if the employees were more evenly divided on the merits of the company's changes, the union negotiators, beset by conflicting factions, might be led to adopt a protective vagueness on the issue of sick leave, which also would inhibit the...