National Labor Relations Board v. General Motors Corporation, 404

Decision Date03 June 1963
Docket NumberNo. 404,404
Citation373 U.S. 734,83 S.Ct. 1453,10 L.Ed.2d 670
PartiesNATIONAL LABOR RELATIONS BOARD, Petitioner, v. GENERAL MOTORS CORPORATION
CourtU.S. Supreme Court

Sol. Gen. Archibald Cox, for petitioner.

Harry S. Benjamin, Jr., Detroit, Mich., for respondent.

Mr. Justice WHITE delivered the opinion of the Court.

The issue here is whether an employer commits an unfair labor practice, National Labor Relations Act s 8(a)(5),1 when it refuses to bargain with a certified union over the union's proposal for the adoption of the 'agency shop.' More narrowly, since the employer is not obliged to bargain over a proposal that he commit an unfair labor practice, the question is whether the agency shop is an unfair labor practice under § 8(a)(3) of the Act or else is exempted from the prohibitions of that section by the proviso thereto.2 We have concluded that this type of arrangement does not constitute an unfair labor practice and that it is not prohibited by § 8.

Respondent's employees are represented by the United Automobile, Aerospace and Agricultural Implement Workers of America, UAW, in a single, multiplant company-wide unit. The 1958 agreement between union and company provides for maintenance of membership and the union shop.3 These provisions were not operative however, in such States as Indiana where state law prohibited making union membership a condition of employment.

In June 1959, the Indiana intermediate appellate court held that an agency shop arrangement would not violate the state right-to-work law. Meade Elec. Co. v. Hagberg, 129 Ind.App. 631, 159 N.E.2d 408. As defined in that opinion, the term 'agency shop' applies to an arrangement under which all employees are required as a condition of employment to pay dues to the union and pay the union's initiation fee, but they need not actually become union members. The union thereafter sent respondent a letter proposing the negotiation of a contractual provision covering Indiana plants 'generally similar to that set forth' in the Meade case. Continued employment in the Indiana plants would be conditioned upon the payment of sums equal to the initiation fee and regular monthly dues paid by the union members. The intent of the proposal, the National Labor Relations Board concluded, was not to require membership but to make membership available at the employees' option and on nondiscriminatory terms. Employees choosing not to join would make the required payments and, in accordance with union custom, would share in union expenditures for strike benefits, educational and retired member benefits, and union publications and promotional activities, but they would not be entitled to attend union meetings, vote upon ratification of agreements negotiated by the union, or have a voice in the internal affairs of the union.4 The respondent made no counterproposal, but replied to the union's letter that the proposed agreement would violate the National Labor Relations Act and that respondent must therefore 'respectfully decline to comply with your request for a meeting' to bargain over the proposal.

The union thereupon filed a complaint with the National Labor Relations Board against respondent for its alleged refusal to bargain in good faith. In the Board's view of the record, 'the Union was not seeking to bargain over a clause requiring nonmember employees to pay sums equal to dues and fees as a condition of employment while at the same time maintaining a closed-union policy with respect to applicants for membership,' since the proposal contemplated an arrangement in which 'all employees are given the option of becoming, or refraining from becoming, members of the Union.' Proceeding on this basis and putting aside the consequences of a closed-union policy upon the legality of the agency shop, the Board assessed the union's proposal as comporting fully with the congressional declaration of policy in favor of union-security contracts and therefore a mandatory subject as to which the Act obliged respondent to bargain in good faith. At the same time, it stated that it had 'no doubt that an agency-shop agreement is a permissible form of union-security within the meaning of Sections 7 and 8(a)(3) of the Act.' Accordingly, the Board ruled that respondent had committed an unfair labor practice by refusing to bargain in good faith with the certified bargaining representative of its employees,5 and it ordered respondent to bargain with the union over the proposed arrangement; no back-pay award is involved in this case. 133 N.L.R.B. 451, 456, 457.

Respondent petitioned for review in the Court of Appeals, and the Board cross-petitioned for enforcement. The Court of Appeals set the order aside on the grounds that the Act tolerates only 'an agreement requiring membership in a labor organization as a condition of employment' when such agreements do not violate state right-to-work laws, and that the Act does not authorize agreements requiring payment of membership dues to a union, in lieu of membership, as a condition of employment. It held that the proposed agency shop agreement would violate §§ 7, 8(a)(1), and 8(a)(3) of the Act and that the employer was therefore not obliged to bargain over it. 303 F.2d 428 (C.A.6th Cir.). We granted certiorari, 371 U.S. 908, 83 S.Ct. 253, 9 L.Ed.2d 168, and now reverse the decision of the Court of Appeals.

Section 8(3) under the Wagner Act was the predecessor to § 8(a)(3) of the present law. Like § 8(a)(3), § 8(3) forbade employers to discriminate against employees to compel them to join a union. Because it was feared that § 8(3) and § 7, if nothing were added to qualify them, might be held to outlaw union-security arrangements such as the closed shop, see 79 Cong.Rec 7570 (statement of Senator Wagner), 7674 (statement of Senator Walsh); H.R.Rep. No. 972, 74th Cong., 1st Sess. 17; H.R.Rep. No. 1147, 74th Cong., 1st Sess. 19, the proviso to § 8(3) was added expressly declaring:

'Provided, That nothing in this Act * * * or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization * * * to require as a condition of employment membership therein, if such labor organization is the representative of the employees as provided in section 9(a) * * *.'

The prevailing administrative and judicial view under the Wagner Act was or came to be that the proviso to § 8(3) covered both the closed and union shop, as well as less onerous union-security arrangements, if they were otherwise legal. The National Labor Relations Board construed the proviso as shielding from an unfair labor practice charge less severe forms of union-security arrangements than the closed or the union shop,6 including an arrangement in Public Service Co. of Colorado, 89 N.L.R.B. 418,7 requiring nonunion members to pay to the union $2 a month 'for the support of the bargaining unit.' And in Algona Plywood Co. v. Wisconsin Board, 336 U.S. 301, 307, 69 S.Ct. 584, 93 L.Ed. 691, which involed a maintenance of membership agreement, the Court, in commenting on petitioner's contention that the proviso of § 8(3) affirmatively protected arrangements within its scope, cf. Garner v. Teamsters Union, 346 U.S. 485, 74 S.Ct. 161, 98 L.Ed. 228, said of its purpose: 'The short answer is that § 8(3) merely disclaims a national policy hostile to the closed shop or other forms of union-security agreement.' (Emphasis added.)

When Congress enacted the Taft-Hartley Act, it added the following to the language of the original proviso to § 8(3):

'on or after the thirtieth day following the beginning of such employment or the effective date of such agreement, whichever is the later * * *. Provided further, That no employer shall justify any discrimination against an employee for non-membership in a labor organization (A) if he has reasonable grounds for believing that such membership was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership.' 29 U.S.C. § 158(a)(3).

These additions were intended to accomplish twin purposes. On the one hand, the most serious abuses of compulsory unionism were eliminated by abolishing the closed shop. On the other hand, Congress recognized that in the absence of a union-security provision 'many employees sharing the benefits of what unions are able to accomplish by collective bargaining will refuse to pay their share of the cost.' S.Rep.No.105, 80th Cong., 1st Sess., p. 6, 1 Leg.Hist.L.M.R.A. 412. Consequently, under the new law 'employers would still be permitted to enter into agreements requiring all the employees in a given bargaining unit to become members 30 days after being hired,' but 'expulsion from a union cannot be a ground of compulsory discharge if the worker is not delinquent in paying his initiation fee or dues.' S.Rep.No.105, p. 7, 1 Leg.Hist.L.M.R.A. 413. The amendments were intended only to 'remedy the most serious abuses of compulsory union membership and yet give employers and unions who feel that such agreements promoted stability by eliminating 'free riders' the right to continue such arrangements.' Ibid. As far as the federal law was concerned, all employees could be required to pay their way. The bill 'abolishes the closed shop but permits voluntary agreements for requiring such forms of compulsory membership as the union shop or maintenance of membership * * *.' S.Rep.No.105, p. 3, 1 Leg.Hist.L.M.R.A. 409.

We find nothing in the legislative history of the Act indicating that Congress intended the amended proviso to § 8(a)(3) to validate only the union shop and simultaneously to abolish, in addition to the closed shop, all other union-security arrangements permissible...

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