GAS SPRING CO., PETITIONER V. NATIONAL LABOR RELATIONS BOARD

   No. 90-797

   In The Supreme Court Of The United States

   October Term, 1990

   On Petition For A Writ Of Certiorari To The United States Court Of
Appeals For The Fourth Circuit

   Brief For The National Labor Relations Board In Opposition

            TABLE OF CONTENTS
   Question Presented
   Opinions below
   Jurisdiction
   Statement
   Argument
   Conclusion

                            OPINIONS BELOW

   The opinion of the court of appeals (Pet. App. 1a-9a) is
unreported.  The decision and order of the National Labor Relations
Board (Pet. App. 10a-78a) are reported at 296 N.L.R.B. No. 14.

                             JURISDICTION

   The judgment of the court of appeals was entered on July 16, 1990.
A petition for rehearing was denied on August 21, 1990.  Pet. App.
79a.  The petition for a writ of certiorari was filed on November 19,
1990.  The jurisdiction of this Court is invoked under 28 U.S.C.
1254(1).

                          QUESTION PRESENTED

   1. Whether substantial evidence supports the Board's finding that
petitioner, during negotiations, asserted financial difficulties as
the basis for its bargaining stance, making unlawful its refusal to
disclose financial information requested by the Union.

   2. Whether the Board properly found that petitioner's unlawful
refusal to produce the financial information requested by the Union
was a contributing cause of the strike, making it an unfair labor
practice strike.

                               STATEMENT

   1. On June 6, 1986, petitioner and the Union /1/ began collective
bargaining negotiations to replace their existing agreement, which was
due to expire on June 30, 1986.  At this first meeting, petitioner
submitted a proposal seeking a wage freeze and substantial reductions
in other employee compensation and benefits.  Pet. App. 16a-17a.  At
the second negotiating session, on June 13, petitioner's chief
negotiator denied that petitioner was claiming to be in "dire
financial straits," but added that petitioner's health was "not good,"
that 1985 had been "a bad year" for the company, and that 1986 had, so
far, "been worse." Id. at 17a.  In the next meeting on June 17,
petitioner argued against a wage increase proposed by the Union on the
ground that it "would not make sense" because of a sharp drop in
company sales.  Id. at 18a.  On June 20, petitioner's negotiators
asserted that petitioner "needed" and "required" concessions and could
not "commit" to increases.  Id. at 20a, 21a.

   On June 24, petitioner's negotiators became more insistent,
contending that concessions were "required and necessary," that
petitioner had lost money in 1985 and 1986, and that it was "heading
in(to) the red." Pet. App. 21a.  They insisted that petitioner "was
not in good shape," that 1985 had been a "bad year," and that 1986 was
proving even worse than 1985.  Id. at 22a.  They further pleaded that
"everyone (should) see the problem the company was in money wise," and
urged the Union's negotiators not to "delude" themselves because
"conditions (were) bad and getting worse." Ibid.; see id. at 23a.

   On June 25, a company representative told the Union that he did not
want company employees to end up losing their jobs like the employees
at other local companies, adding that this was the reason for
petitioner's overall bargaining stance.  Pet. App. 23a-24a.  He
accused the Union of "not paying attention to what was going on,"
citing other local companies which he alleged were going out of
business due to their inability to obtain union concessions.  Id. at
24a;  see id. at 24a-25a.

   On June 27, petitioner's vice president attributed petitioner's
hard bargaining tactics to its financial condition, explaining that
petitioner was losing money and would continue to do so, that "the
bottom line is red" and "would remain red," that petitioner's losses
were not "tolerable," and that petitioner was "determined" to take
action to reverse them.  Pet. App. 27a.  He also explained that
petitioner expected its losses to increase, and "could not consider
any wage increases as part of a three year contract" because
petitioner could not even "afford to give people raises in the first
year (of an) agreement." Id. at 33a, 35a (bracketed material in
original);  see id. at 25a-28a.

   In bargaining sessions on June 30, petitioner's vice president
repeated that petitioner was losing money and would continue to lose
money because of a downward trend in business.  Pet. App. 34a, 35a.
He further asserted that petitioner could not consider any wage
increase as part of a three-year contract because it did not expect
its financial situation to improve.  Id. at 35a;  see id. at 30a-36a.

   In response to petitioner's assertions regarding its financial
plight, the Union asked to examine petitioner's financial records.
The Union repeatedly advised petitioner that it would be willing to
bargain over concessions if petitioner could verify its claim of
economic hardship, but that it would first need to examine
petitioner's financial records.  Petitioner consistently refused the
Union's information requests.  Pet. App. 17a-18a, 20a-23a, 25a,
33a-35a.

   On June 28 and again on July 1, the Union's leadership met with the
unit employees to inform them about the status of the negotiations.
The leadership told the employees that petitioner was claiming to be
losing money and was seeking concessions, that the Union had asked
petitioner to open its books to substantiate its claim, but that
petitioner had refused.  At the June 28 meeting, some employees
questioned petitioner's claim, waving copies of a newspaper article
indicating that petitioner was profitable.  At the July 1 meeting,
several employees, in the context of a general protest that
petitioner's plea of financial hardship was not credible, questioned
the Union leadership about petitioner's refusal to disclose its books
to the Union.  At both meetings, employees demanded to know why
petitioner would not open its books and accused petitioner of lying
about its financial status.  At the end of the July 1 meeting, the
leadership called for a strike vote.  The employees voted to strike by
a 235-12 vote, and commenced the strike that day.  Pet. App. 28a-30a,
36a-41a.

   On October 6, 1986, the Union made an unconditional offer to return
to work on behalf of all employees who had not already done so.
Petitioner responded that it considered the striking employees
economic strikers and refused to offer them immediate employment,
instead placing them on a preferential hiring list and hiring a few of
them as positions became available.  Pet. App. 41a-42a, 67a-68a.

   2. The Board, adopting the decision of the administrative law
judge, found that petitioner had violated Section 8(a)(1) and (5) of
the National Labor Relations Act (Act), 29 U.S.C. 158(a)(1) and (5),
by refusing to disclose its financial records to the Union.  Pet. App.
11a, 61a.  The Board noted that "even though (petitioner) contended
once that it was merely unwilling to pay and denied that it was in
'dire financial straits,' each discussion of the reasons that
(petitioner) would not pay led to factual allegations that it could
not pay as a result of its own compelling financial considerations."
Id. at 50a.  In addition, the Board found that petitioner's
representations regarding its financial condition were "all clear
indications that there was a financial basis that impelled and
dictated (petitioner's) decision into an intractability." Ibid.
Further, the Board found that "(a)ll these arguments were pleas that
(petitioner) could not pay increases and could not continue operating
under the terms of its expiring agreement, in the words of the Supreme
Court, 'without injury to (its) business.'" Id. at 51a (citing NLRB v.
Truitt Mfg. Co., 351 U.S. 149, 152 (1956)).  The Board therefore
concluded that the financial information requested by the Union was
relevant to the performance of its collective-bargaining
responsibilities, and that petitioner had violated the Act by refusing
the Union's information requests.  Pet. App. 11a-12a.

   The Board, agreeing with the administrative law judge, also found
that the strike was caused at least in part by petitioner's refusal to
furnish the Union with this financial information.  Pet. App. 11a,
65a.  The Board noted that the employees' "dissatisfaction stemmed
directly from the unfair labor practice found herein, (in) that they
could not understand why they were being asked to give back economic
gains they had made" to a company that appeared prosperous and refused
to offer any evidence to the contary.  Id. at 62a.  The Board further
noted that the employees might have believed petitioner had it
furnished evidence to substantiate its claims, and the employees might
therefore have acceded to some or all of petitioner's demands without
a strike, or with a shorter one.  Id. at 64a.  Petitioner's unlawful
rejection of the Union's information request thus fueled employee
cynicism regarding petitioner's bargaining stance, thereby prompting
an "even greater reaction to all the concessions which (petitioner)
proposed," ibid., and contributing to the cause of the strike.
Accordingly, the Board found that the strike constituted an unfair
labor practice strike and the striking employees were therefore
entitled to immediate reinstatement upon their unconditional offer to
return to work.  Id. at 12a, 67a.  Petitioner, by delaying the
reinstatement of some of the strikers and by refusing to reinstate
others, committed an independent violation of Section 8(a)(1) and (3)
of the Act, 29 U.S.C. 158(a)(1) and (3).

   The Board ordered petitioner to cease and desist from the unfair
labor practices found, to furnish the Union upon request with relevant
books and records regarding petitioner's finances, and to reinstate
the striking employees with backpay and make whole those strikers
whose reinstatement petitioner unduly delayed.  Pet. App. 12a,
71a-73a.

   3. In an unpublished per curiam decision, the court of appeals
upheld the Board's findings that petitioner unlawfully refused to turn
over to the Union the financial records it had requested and that the
unlawful conduct was a contributing cause of the strike.  Pet. App.
6a-9a.  The court rejected petitioner's argument that it had simply
refused to make bargaining concessions to the Union.  The court noted
that petitioner's position "is completely eroded by the prevalence in
the record of its refereces to its worsening financial condition, its
claims that it was 'heading into the red,' and its forecasts of the
loss of jobs." Id. at 6a-7a.  "There was certainly substantial
evidence on which the Board could have concluded that the employer's
bargaining position was a claim of financial inability to pay and not
an assertion of 'prudent financial considerations.'" Id. at 7a.

   The court also sustained the Board's finding that the strike was an
unfair labor practice strike, ruling that "the record contains
substantial evidence from which the Board could have properly found
that (petitioner's) refusal to produce its financial information was a
contributing cause of the strike." Pet. App. 9a.  The court concluded
that the evidence showed that on the date of the strike vote, union
leaders explained to employees that union negotiators had asked
petitioner to open its books to substantiate its claimed financial
difficulties, and that several employees "upon learning that the
company had refused to disclose any financial information, * * *
questioned the union leaders about the employer's refusal and
expressed their disbelief that the apparently profitable employer was
experiencing the financial difficulties it claimed." Id. at 8a-9a.

                               ARGUMENT

   1. An employer violates its statutory obligation to bargain in good
faith if, during the course of contract negotiations, it refuses to
produce information substantiating its claim that it is financially
unable to meet a union's bargaining demands.  NLRB v. Truitt Mfg. Co.,
351 U.S. 149, 152-153 (1956).  The reason is that if an argument "is
important enough to present in the give and take of bargaining, it is
important enough to require some sort of proof of its accuracy." Ibid.
 No "magic words" are necessary to trigger an employer's duty to
disclose financial information, so long as the employer's words and
conduct convey an inability to afford disputed labor costs.  Facet
Enterprises, Inc. v. NLRB, 907 F.2d 963, 980 (10th Cir. 1990);  NLRB
v. Harvstone Mfg. Corp., 785 F.2d 570, 575 (7th Cir.), cert. denied,
479 U.S. 821 (1986).  At the same time, an employer incurs no duty to
disclose financial information if it merely conveys its "simply
unwillingness to meet the employees' demands, rather than an inability
to do so." Atlanta Hilton & Tower, 271 N.L.R.B. 1600, 1602 (1984).  In
that situation, the policies underlying Truitt are not implicated
since the employer is making no claim susceptible of verification.

   Petitioner does not question those principles.  Instead, petitioner
denies that it claimed during the bargaining process that it was
financially unable to meet the Union's demands, and contends that it
merely conveyed to the Union an "unwilling(ness) to pay higher wages
in order to ensure long-term financial health and competitiveness."
Pet. 17.  But the court of appeals found that there was substantial
evidence to support the Board's contrary finding, and fact-bound
issues of this nature do not warrant review by this Court.  See
Universal Camera Corp. v. NLRB, 340 U.S. 474, 491 (1951).

   The decision below does not conflict with the cases cited by
petitioner.  Pet. 17-19.  In those cases, the court recognized that an
employer incurs no obligation to disclose its financial records to a
union based merely on its claims of competitive disadvantage;  an
obligation arises only if the employer claims that it is unable to
meet the union's demands.  See NLRB v. Harvstone Mfg. Corp., 785 F.2d
at 575-576;  Nielson Lithographing Co. v. NLRB, 854 F.2d 1063 (7th
Cir. 1988);  Washington Materials, Inc. v. NLRB, 803 F.2d 1333,
1338-1339 (4th Cir. 1986);  Facet Enterprises, Inc. v. NLRB, 907 F.2d
at 980;  Dallas General Drivers, Local Union No. 745 v. NLRB, 355 F.2d
842, 845 (D.C. Cir. 1966).  /2/ In Washington Materials, Inc. v. NLRB,
the Fourth Circuit adopted the rule that petitioner endorses.  In this
case, however, the Board and the Fourth Circuit found that
petitioner's assertions amounted to the claim that it was unable to
meet the Union's demands, not that it sought to maintain a competitive
position vis-a-vis other firms.  Accordingly, any difference between
the decision below and the cases cited by petitioner turns on a
difference in the facts, not in the governing legal principle.

   2. a. A strike is an unfair labor practice strike "if an
(employer's) unfair labor practices had anything to do with causing
it." NLRB v. Crystal Springs Shirt Corp., 637 F.2d 399, 404 (5th Cir.
1981).  Accord Queen Mary Restaurants Corp. v. NLRB, 560 F.2d 403, 412
(9th Cir. 1977);  NLRB v. Cast Optics Corp., 458 F.2d 398, 407 (3d
Cir.), cert. denied, 409 U.S. 850 (1972).  Unfair labor practice
stikers are entitled to reinstatement to their former or substantially
equivalent jobs immediately upon their unconditional offer to return
to work, even if replacements for them have been hired.  The
employer's outright refusal to reinstate, or delay in reinstating,
unfair labor practice strikers on the ground that they have been
"permanently replaced" constitutes an independent violation of Section
8(a)(1) and (3) of the Act, 29 U.S.C. 158(a)(1) and (3).  Mastro
Plastics Corp. v. NLRB, 350 U.S. 270, 278 (1956);  NLRB v. Cast Optics
Corp., 458 F.2d at 407.  A strike may be an unfair labor practice
strike even if it also may have economic objectives, an unfair labor
practice strikers must be reinstated even though there are other
causes of the strike.  Northern Wire Corp. v. NLRB, 887 F.2d 1313,
1319-1321 (7th Cir. 1989);  NLRB v. Heads & Threads Co., a Div. of
MSL, 724 F.2d 282, 288-289 (2d Cir. 1983);  NLRB v. Cast Optics Corp.,
458 F.2d at 407.  /3/

   In this case, the Board and the court below properly concluded that
petitioner's unlawful refusal to furnish relevant financial data to
the Union was a contributing factor in precipitating the strike,
making the unreinstated employees unfair labor practice strikers.  As
shown above, on the date of the strike vote the Union's leaders
explained to the employees that petitioner had rejected the Union's
request that petitioner open its books to substantiate its claimed
financial difficulties.  Several employees, upon learning of
petitioner's refusal, questioned the union leaders about petitioner's
refusal and expressed their disbelief that the apparently profitable
employer was experiencing the financial difficulties that it claimed.
As the Board found, the employees' "dissatisfaction stemmed directly
from the unfair labor practice found herein, (in) that they could not
understand why they were being asked to give back economic gains they
had made" to a company that appeared prosperous and refused to offer
any evidence to the contrary.  Pet. App. 62a.  Moreover, as the Board
noted, the employees "might have believed" petitioner had it funished
evidence to substantiate its claims, and the employees might therefore
have acceded to some or all of petitioner's demands, without a strike,
or with a shorter one.  Id. at 64a.  Petitioner's unlawful refusal to
supply the Union with financial information had the effect of
prompting an "even greater reaction to all the concessions" that
petitioner proposed, ibid., thereby contributing to the cause or
prolongation of the strike.

   b. Petitioner maintains that the court of appeals erred by not
applying the "mixed motive analysis" of Price Waterhouse v. Hopkins,
109 S. Ct. 1775 (1989), to determine whether the strike would have
occurred absent petitioner's unlawful refusal to furnish the
information requested by the Union.  Pet. 12.  That claim does not
warrant review by this Court, for two reasons.

   First, a "mixed motive analysis" would not aid petitioner, even if
such an analysis were appropriate.  The administrative law judge,
whose findings were adopted by the Board, found that there was "no
sufficient proof that the Union would have conducted a strike had
there been no unfair labor practice." Pet. App. 67a.  The
administrative law judge noted that the Union had promised to bargain
about concessions if petitioner substantiated its claims of financial
distress, and "it cannot be predicted that bargaining would have
failed" if petitioner had complied with the Union's request.  Ibid.
In other words, petitioner's demand for concessions and its unlawful
refusal to substantiate its claimed need for them were inextricably
intertwined as causal factors of the strike.  NLRB v. Jarm
Enterprises, Inc., 785 F.2d 195, 204 (7th Cir. 1986) (record supported
finding that strike was an unfair labor practice strike where
employer's refusal to furnish financial information "precluded the
Union from evaluating the employer's position, as well as its own, and
thus precluded meaningful bargaining");  Brooks, Inc., 228 N.L.R.B.
1365, 1367 & n.12 (1977) (same).  See Nielson Lithographing Co. v.
NLRB, 854 F.2d 1063, 1065 (7th Cir. 1988) (employer's refusal to
substantiate claims of financial hardship forces union "to play
Russian roulett" by putting union "to the Hobson's choice of acceding
to a quite possibly exaggerated claim of poverty or risking its
members' jobs").

   In any event, the court of appeals did not err in adhering to the
longstanding rule that the mixed-motive causation test applicable to
discrimination cases is not the proper standard for assessing strike
causation.  Pet. App. 8a.  Instead, "the dispositive question is
whether the employees, in deciding to go on strike, were motivated in
part by the unfair labor practices committed by their employer, not
whether, without that motivation, the employees might have struck for
some other reason." Northern Wire Corp. v. NLRB, 887 F.2d at
1319-1320.  Accord Teamsters Local Union No. 515 v. NLRB, 906 F.2d
719, 723 (D.C. Cir. 1990), cert. denied, No. 90-609 (Jan. 14, 1991).
In urging a mixed-motive analysis, petitioner fails to take account of
the particular nature of an unfair labor practice strike.  Even if a
strike would have occurred despite an employer's unfair labor
practices, the strike would still be encumbered with, and not
practicably disentangled from, the aggravating factors caused by those
unfair labor practices, which tend to prolong a strike.  In addition,
the mixed-motive analysis applied in the case of discriminatory
discharges addresses concerns not involved here.  Specifically, it
provides a means of reconciling an employer's statutorily recognized
interest in discharging employees for cause with the Act's prohibition
against discharging employees for engaging in union or other protected
activity.  29 U.S.C. 160(c).  See Price Waterhouse v. Hopkins, 109 S.
Ct. at 1789-1790.  No such need to sort out conflicting employer
motives is involved here because it is the employees' motive, not the
employer's, that is at issue.  /4/

   The cases cited by petitioner, Pet. 14-15, do not require a
different result.  /5/ The court in each case noted that the employer
had failed to show that a strike would have occurred even absent the
employer's unfair labor practices.  But here, too, petitioner failed
to make such a showing.  In addition, in none of those cases did the
outcome turn on a "but for" analysis;  in each case, the court found
that the employer's unlawful conduct was a contributing cause of the
strike.  Accordingly, in each case the court's discussion of this
issue was dicta.

                              CONCLUSION

   The petition for a writ of certiorari should be denied.

   Respectfully submitted.

   KENNETH W. STARR

      Solicitor General

   JERRY M. HUNTER

      General Counsel

   D. RANDALL FRYE

      Acting Deputy General Counsel

   NORTON J. COME

      Deputy Associate General Counsel

   LINDA SHER

      Assistant General Counsel

   WILLIAM A. BAUDLER

      Attorney National Labor Relations Board

   JANUARY 1991

   /1/ Local Union No. 1612, International Union of United Automobile,
Aerospace and Agricultural Implement Workers of America (UAW).

   /2/ Petitioner also cites American Model & Pattern Inc. v. NLRB,
No. 816 F.2d 678 (6th Cir. 1987) (Table), but that decision is
unpublished and therefore has, at best, limited precedential value.
See 6th Cir. R. 24(c).

   /3/ Petitioner asserts that the lower courts have varied in
defining unfair labor practice strikes.  Pet. 12-13.  As the cases
cited by petitioner make clear, however, each of those courts will
find an unfair labor practice strike upon a showing that an unfair
labor practice was a contributing cause, or, put another way, had
anything to do with causing the strike.

   /4/ In contending that a mixed-motive analysis should be applied
here, petitioner suggests that its right to hire permanent
replacements for economic strikers is analogous to an employer's right
to discharge employees for cause and warrants similar deference.  Pet.
10-11.  The analogy is inapt.  While a claim of discriminatory
discharge implicates an employer's right to fire an employee for
cause, no such mix of unlawful and unlawful employer conduct need be
unraveled in determining a strike's causation.  It is the employees'
motivation that is at issue, and giving employees the right to
reinstatement if the employer's unfair labor practices caused a
strike, in part, protects the right to strike guaranteed in Section 13
of the Act, 29 U.S.C. 163.  Similarly unavailing is petitioner's
comparison, Pet. 11-12, of the situation here to that involved in
determining whether a strike called by a union for both a lawful
primary objective and an unlawful secondary objective can serve as the
basis for a suit for damages under Section 303(b) of the
Labor-Management Relations Act, 29 U.S.C. 187(b).  In the latter
situation, it is necessary to import the requirement that the unlawful
secondary objective be a "substantial factor" in causing the strike in
order to "protect the union's right to strike for primary objectives
where such objectives, standing alone, would have caused the strike."
Mead v. Retail Clerks, Int'l Assn, Local Union No. 839, 523 F.2d 1371,
1379 (9th Cir. 1975).

   /5/ Larand Leisurelies, Inc. v. NLRB, 523 F.2d 814, 820 (6th Cir.
1975);  NLRB v. Stackpole Carbon Co., 105 F.2d 167, 175-176 (3rd
Cir.), cert. denied, 308 U.S. 605 (1939);  and NLRB v. Remington Rand,
Inc., 94 F.2d 862, 872 (2d Cir.), cert. denied, 304 U.S. 576 (1938).