N.L.R.B. v. Ladish Co.

Decision Date27 July 1976
Docket NumberNo. 75-1865,75-1865
Citation538 F.2d 1267
Parties92 L.R.R.M. (BNA) 3577, 79 Lab.Cas. P 11,540 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. LADISH CO., Respondent.
CourtU.S. Court of Appeals — Seventh Circuit

Elliott Moore, Deputy Assoc. Gen. Counsel, Andrew F. Tranovich, Robert A. Giannasi, N.L.R.B., Washington, D. C., for petitioner.

Benjamin Werne, New York City, amicus curiae.

Fred G. Groiss, Elwin J. Zarwell, Milwaukee, Wis., for respondent.

Before PELL and BAUER, Circuit Judges, and PERRY, Senior District Judge. *

PELL, Circuit Judge.

This case comes before the court on a National Labor Relations Board's petition for enforcement of an order directed against the Ladish Co. The case was heard by the Board on stipulated facts, 1 and the Board found that the Company violated sections 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. § 151 et seq., by refusing to honor a union's request to bargain on the formulation and implementation of vending machine prices in the Company's plant. In issue is whether the price of food sold from vending machines in the circumstances here involved is a mandatory subject of bargaining under section 8(d) of the Act, 29 U.S.C. § 158(d). 2

The Company and the charging Union 3 are parties to a collective bargaining agreement. The Union represents approximately 1800 of the Company's 4800 employees. The Company has bargaining relationships with six other unions representing eight other bargaining units.

The Company has approximately twenty-nine "vendette" areas located throughout its plant and office facilities. A vendette is a room which contains vending machines, tables, and chairs. The principal items sold are beverages, hot foods, sandwiches, candy pastry, and cigarettes. No other eating facilities exist at the plant other than some scattered vending machines located outside the vendette areas. The vending machines are owned and maintained by outside contractors, but the Company makes available and maintains the space in which the machines are located. Access for electricity and water needed to operate the machines is provided. Ladish receives a commission for the items sold from the machines as reimbursement for providing these services. The prices for the items sold in the machines are established by the companies owning and maintaining them. The Company's control over prices is limited to persuasion and its ability to replace completely a vendor.

The majority of the Company's employees, including all the employees in the charging Union, receives a fifteen minute paid lunch period. During the paid lunch period, the employees are not permitted to leave the plant. Approximately seventy percent of the employees in the charging Union purchase their lunches from the vending machines; the remaining thirty percent bring their lunches to work. Ninety percent of the employees in the charging Union utilize the vending machines for their beverages. 4 The employees who bring their lunches are permitted to use the vendette tables and chairs for the purpose of eating their lunches.

In 1970 the Company notified the Union that price increases might be necessary. The Union filed a grievance objecting to any increased prices. The grievance was held in abeyance because the prices were not increased. In 1972 the Company informed the Union that vending machine prices were going to be increased. The Union notified the Company that it was taking its grievance out of abeyance and that it was protesting the announced unilateral price increases. Prices were increased, and the Company indicated in response to the grievance that it was not responsible for the increased prices and that the matter was not considered a bargainable item between the Company and the Union.

In 1974 prices were again increased without negotiations with the Union. The Union reinstated its 1972 grievance and asked the Company to negotiate over the price increases. The Company replied that it did not believe that the increase in vending machine prices was a mandatory subject of collective bargaining and that it would not negotiate regarding the subject. A charge was then filed with the National Labor Relations Board.

The Board held that the vending machine prices were a significant condition of employment and therefore concluded that the Company violated the Act by refusing to bargain. The Board recognized that it would not be practical to require the Company to consult with the Union before changing the price of any particular food item. It nevertheless ordered that the Company would be required to bargain after increases were effectuated unilaterally if the Union requested such bargaining. 5 The Board now seeks enforcement of its order.

In Seattle First National Bank v. NLRB, 444 F.2d 30, 32-33 (9th Cir. 1971), the Ninth Circuit summarized the standards to be applied in determining whether bargaining is required under the Act:

Only as to those matters enumerated in Section 8(d) of the Act is there a mandatory obligation to bargain under Section 8(a)(5). Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 210, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964); NLRB v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 349, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958). And, as to those matters specified in Section 8(d), the phrase "terms and conditions of employment" is to be interpreted in a limited sense which does not include every issue that might be of interest to unions or employers. Fibreboard Paper Products Corp. v. NLRB, supra, 379 U.S. at 220, 85 S.Ct. 398 (Stewart, J., concurring); Westinghouse Electric Corp. v. NLRB, 387 F.2d 542, 545 (4th Cir. 1967) (en banc). A mere remote, indirect or incidental impact is not sufficient. In order for a matter to be subject to mandatory collective bargaining it must materially or significantly affect the terms or conditions of employment. American Smelting & Refining Co. v. NLRB, 406 F.2d 552, 554 (9th Cir.), cert. denied, 395 U.S. 935, 89 S.Ct. 1998, 23 L.Ed.2d 450 (1969); Westinghouse Electric Corp. v. NLRB, supra, 387 F.2d at 547; NLRB v. Lehigh Portland Cement Co., 205 F.2d 821 (4th Cir. 1953). (Emphasis in original; footnote omitted.)

The General Counsel appears to argue that the statute mandates bargaining about any benefits accruing to employees out of their relationship with their employer. The General Counsel places primary reliance for this proposition on language found in NLRB v. Detroit Resilient Floor Decorators, 317 F.2d 269 (6th Cir. 1963). In Detroit Floor a union sought to compel an employer to bargain over contributions to an industry promotion fund. The Board held that the employer was not required to bargain about these contributions because they were neither "wages, hours nor a term or condition of employment." The Sixth Circuit enforced the order of the Board. In its opinion the court noted that the Board had held that the statutory "wages, hours, and other terms and conditions of employment," includes "all emoluments of value or other benefits accruing to employees out of their relationship with their employer." 317 F.2d at 270. It then cited as examples: pension plans, vacations, seniority, reimbursement for expenses away from headquarters, sick leave, stock purchase plans, group insurance and bonuses. We do not read the Sixth Circuit's opinion as indicating that an employer must bargain over any "benefit," regardless of whether that benefit was material or significant. The examples the Sixth Circuit used are consistent with this interpretation. This conclusion in no way conflicts with NLRB v. Central Illinois Public Service Co., 324 F.2d 916 (7th Cir. 1963), in which this court held that it was an unfair labor practice for a gas company unilaterally to terminate a thirty-three percent discount on gas sold to employees which the company had encouraged the employees to consider when comparing their wages with other employees' wages or with Inland Steel v. NLRB, 170 F.2d 247 (7th Cir. 1948), cert. denied on relevant issue, 336 U.S. 960, 69 S.Ct. 887, 93 L.Ed. 1112 (1949), aff'd on other grounds sub nom. American Communications Association v. Douds, 339 U.S. 382, 70 S.Ct. 674, 94 L.Ed. 925 (1950), in which this court held that an employer must bargain about retirement and pension benefits.

In Weyerhaeuser Timber Co., 87 NLRB 672 (1949), the Board ordered bargaining on the cost of meals furnished by an employer. Four operations were involved in the case a sawmill, which was five miles from the nearest town, and three logging camps, which were each approximately twenty miles from the nearest town. There was no public transportation to the towns, and the employer provided none. The meals were served below cost. The Board held that although the isolation of the camps and the mill differed in degree, both were sufficiently isolated that the cost of meals had to be considered a condition of employment.

The Board in its brief in the case before us stresses the fact that only five percent of the sawmill employees used the company eating facilities. We find little significance in this because the three logging camps were much more remote from the nearest town, and most of the company employees depended on company kitchens for all of their meals. We also note the distinction between Weyerhaeuser as well as other analogous cases cited by the Board, e. g., Central Illinois Public Service, and the present case in that the Board cases frequently involve a direct relationship or control over the expenditure or cost involved as opposed to the indirect situation here involved.

More recently the First and Fourth Circuits have rejected similar arguments in cases more similar to the one at bar. In Westinghouse Electric Corp. v. NLRB, 387 F.2d 542 (4th Cir. 1967) (en banc), the court held that a company was not required to bargain concerning the prices charged in cafeterias...

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