Westinghouse Electric Corporation v. NLRB, 10545.

• Decision Date: 06 November 1967
• Docket Number: No. 10545.,10545.
• Citation: 387 F.2d 542
• Parties: WESTINGHOUSE ELECTRIC CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.
• Court: U.S. Court of Appeals — Fourth Circuit

387 F.2d 542 (1967)

WESTINGHOUSE ELECTRIC CORPORATION, Petitioner, v. NATIONAL LABOR RELATIONS BOARD, Respondent.

No. 10545.

United States Court of Appeals Fourth Circuit.

Reheard April 4, 1967.

Decided November 6, 1967.

John G. Wayman, Pittsburgh, Pa. (Leonard L. Scheinholtz, Paul A. Manion, and Reed, Smith, Shaw & McClay, Pittsburgh, Pa., on brief), for petitioner.

Glen M. Bendixsen, Attorney, N. L. R. B. (Arnold Ordman, General Counsel, Dominick L. Manoli, Associate General Counsel, Marcel Mallet-Prevost, Asst. General Counsel, and Michael N. Sohn, Attorney, N. L. R. B., on brief), for respondent.

Benjamin Werne and William Roth, New York City, on brief for National Automatic Merchandising Ass'n, amicus curiae.

Before HAYNSWORTH, Chief Judge, and SOBELOFF, BOREMAN, BRYAN, WINTER and CRAVEN, Circuit Judges, sitting en banc.

BOREMAN, Circuit Judge:

The principal question here involved may be stated as follows: Upon the record considered as a whole, were increases in food prices (a penny for carry-out coffee and five cents for hot food entrees) established by an independent contractor operating cafeterias in Westinghouse plants a mandatory subject for collective bargaining between Westinghouse Electric Corporation and Salaried Employees Association, a union representing some of the Westinghouse employees?

A striking feature of this litigation is the sharp division of opinion at every stage. The marked differences of opinion suggest that the question here is both novel and troublesome.

Reviewing the history of this case, we find that it was initiated by an unfair labor practice charge filed in January 1965 by the Salaried Employees Association (hereafter S.E.A. or union) with the Regional Director of the National Labor Relations Board, Region 5, Baltimore, Maryland. On February 17, 1965, the Regional Director refused to issue a complaint, reporting that his investigation failed to indicate a violation. S.E.A. appealed to the General Counsel who ordered the Regional Director to issue a complaint.

After a hearing, the Trial Examiner found that Westinghouse had violated sections 8(a) (1) and (5) of the National Labor Relations Act and recommended that Westinghouse be required to bargain with the union with respect to any changes in cafeteria food prices.

The Board disagreed with the Trial Examiner's recommendation and the five members of the Board divided among themselves. Three of the members said the Examiner's recommended order was impracticable and that bargaining about every change in food prices before putting such a change into effect could not be approved. Nevertheless, they issued an order requiring bargaining in response to a "specific union request for bargaining about changes made or to be made." The other two Board members filed a vigorous dissent.

Westinghouse filed a petition for review and the matter was heard by a panel of three judges of this court. Two judges determined that the Board's order should be enforced while the third filed a dissenting opinion favoring denial of enforcement. Westinghouse filed a petition for rehearing and a rehearing before the court en banc was ordered. The view of a majority of the participating judges of this court on this rehearing is that enforcement of the Board's order should be denied.

The facts which will be merely highlighted here are set out in the majority and dissenting opinions of this court's three-judge panel.¹

Westinghouse operates a complex of plants, known as the Defense Center, and involved herein are cafeterias housed at the company's Friendship, Lansdowne and Parker Road sites, several miles from downtown Baltimore. Cafeteria facilities servicing these plants are operated by the Baltimore Catering Company (hereafter the caterer) under contract with Westinghouse. Pursuant to the contract, the caterer pays Westinghouse a rental of One Dollar per year and Westinghouse provides the capital equipment necessary to operate the facilities. Either party to the contract has the absolute right, at any time, to terminate the contract upon sixty-days' written notice. The contract provides: "9. The quality and prices of the meals served, and the hours of service thereof, in said cafeterias shall at all times be reasonable." Westinghouse has the right to conduct periodic audits of the cafeteria accounts and to have submitted to it daily deposit slips and a monthly record of sales.

Between forty and forty-five percent of the Westinghouse employees ate lunches at the cafeterias during the period in question. However, the majority of employees carried their own lunches, supplementing them with beverages obtained from vending machines.² Few, if any, employees left the company's premises for lunch since the shortness of the lunch periods would not permit employees to travel to off-the-premises eating places, obtain service and return.

In October 1964 the caterer announced that it intended to increase cafeteria food prices. Thereafter S.E.A., one of three unions representing Westinghouse employees, sought to meet with the company to discuss these price increases. Westinghouse arranged for meetings of the S.E.A. with the caterer in the office of the company's Industrial Relations Representative, but Westinghouse adopted the position, which it has maintained throughout this litigation, that it could not discuss these matters or bargain concerning them with the union because it had no power to fix or control the prices of food items served in the cafeterias by the independent contractor, the caterer. Although a Westinghouse representative was present on occasions he did not participate in any of the discussions.

In January 1965 the caterer posted notices of an increase of five cents in the price of hot food entrees and an increase of one cent in the price of carry-out coffee. According to the caterer, this increase was necessitated by rising operating costs attributable to wage increases granted by it to its own union employees as a result of collective bargaining. Again the S.E.A. sought to negotiate with Westinghouse concerning these price increases and again Westinghouse refused. It was then that the union initiated this litigation.

The three majority members of the Board appeared to base their decision on the fact that Westinghouse supplied the cafeteria in order to attract employees who otherwise would not accept employment there if eating facilities were not provided. The majority of the panel of this court which upheld the Board's order accepted the Board's reasoning but stressed the fact that Westinghouse, by contract, retained and exercised "extensive power over cafeteria policies." 369 F.2d at 896. The court majority relied in large measure upon the portion of the contract which stated that the food quality and prices must be reasonable and that Westinghouse could terminate the contract upon sixty-days' notice. The majority of the Board and the majority of the three-judge panel of this court held that the cafeteria prices were, under the circumstances of this case, "conditions of employment" within the statutory meaning of these words as used in the Act,³ and a mandatory subject of bargaining between the plant owner and one of the plant unions.

The statutory phrase — "terms and conditions of employment" — according to the Board, is intended by Congress to be used in its "broadest sense" and encompasses virtually everything which bears on the employment relationship and to which workers seek management's agreement. However, the legislative history does not support the Board's view of congressional intent and design. At best, the history merely shows that Congress did not desire to enumerate specific bargaining subjects; it does not show that the phrase was meant to embrace every issue that might be of interest to unions or employers. To the contrary, as Mr. Justice Stewart stressed, in his concurring opinion in Fibreboard Paper Products Corp. v. N. L. R. B., 379 U.S. 203, 220-221, 223-224, 85 S.Ct. 398, 408-410, 13 L.Ed.2d 233 (1964):

"It is important to note that the words of the statute are words of limitation. The National Labor Relations Act does not say that the employer and employees are bound to confer upon any subject which interests either of them; the specification of wages, hours, and other terms and conditions of employment defines a limited category of issues subject to compulsory bargaining. The limiting purpose of the statute\'s language is made clear by the legislative history of the present Act. As originally passed, the Wagner Act contained no definition of the duty to bargain collectively. In the 1947 revision of the Act, the House bill contained a detailed but limited list of subjects of the duty to bargain, excluding all others. In conference the present language was substituted for the House\'s detailed specification. While the language thus incorporated in the 1947 legislation as enacted is not so stringent as that contained in the House bill, it nonetheless adopts the same basic approach in seeking to define a limited class of bargainable issues.

"The phrase `conditions of employment\' is no doubt susceptible of diverse interpretations. At the extreme, the phrase could be construed to apply to any subject which is insisted upon as a prerequisite for continued employment. Such an interpretation, which would in effect place the compulsion of the Board behind any and all bargaining demands, would be contrary to the intent of Congress, as reflected in this legislative history.

* * * * *

If, as I think clear, the purpose of § 8 (d) is to describe a limited area subject to the duty of collective bargaining, those management decisions which are fundamental to the basic direction of a corporate enterprise or which impinge only indirectly upon employment security should be excluded from that area.

"Applying these concepts to the case at hand, I do not believe that an employer\'s subcontracting practices are, as a general

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