Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caDC-11-01280/USCOURTS-caDC-11-01280-0/pdf.json

Parties Involved:
International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, UAW
Intervenor for Respondent
KLB Industries, Inc.
Petitioner
National Labor Relations Board
Respondent

Document Text:

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 18, 2012 Decided December 4, 2012

No. 11-1280

KLB INDUSTRIES, INC., DOING BUSINESS AS NATIONAL 

EXTRUSION AND MANUFACTURING CO.,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE 

AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA,

UAW,

INTERVENOR

Consolidated with 11-1322

On Petition for Review and Cross-Application for 

Enforcement 

of an Order of the National Labor Relations Board

Kerry P. Hastings argued the cause and filed the briefs 

for petitioner.

David Seid, Attorney, National Labor Relations Board, 

argued the cause for respondent. With him on the brief were 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 1 of 36
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John H. Ferguson, Associate General Counsel, Linda 

Dreeben, Deputy Associate General Counsel, and Ruth E. 

Burdick, Supervisory Attorney.

James B. Coppess argued the cause for intervenor. With 

him on the brief were Michael Nicholson and William J. 

Karges. Blair K. Simmons entered an appearance.

Before: HENDERSON, ROGERS, and TATEL, Circuit 

Judges.

Opinion for the Court filed by Circuit Judge TATEL.

Dissenting opinion filed by Circuit Judge HENDERSON.

TATEL, Circuit Judge: Once again, we confront the issue

of how much information a company must provide to a union 

during collective bargaining. Here, the company sought

substantial wage concessions on the basis of competitive 

pressures it claimed to be facing. Seeking to verify this 

contention, the union requested information about the 

company’s prices and customers. The company denied the 

union’s request and then locked out the bargaining unit 

employees. Relying on a line of decisions endorsing a broad 

discovery standard, the National Labor Relations Board found 

that the union’s information request was relevant to its duties

as the employees’ bargaining representative and that the 

company’s information withholding and lockout were both

unlawful. For the reasons given below, we deny the 

company’s petition for review and grant the Board’s crossapplication for enforcement.

I.

Petitioner KLB Industries manufactures aluminum 

extrusions at its Bellefontaine, Ohio, facility. Since taking 

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over the plant in 1997, KLB has signed three collective 

bargaining agreements with its sixteen-member union. On 

September 20, 2007, ten days before the third agreement

expired, the parties began negotiating a fourth agreement.

From the outset, KLB and the union took dramatically 

different positions. The company’s position “centered around 

competitiveness.” KLB Industries, 357 NLRB No. 8, 4 n.9 

(July 26, 2011). Specifically, it claimed that it was facing 

increased competition from Asian manufacturers, rising

production costs, and decreased productivity. KLB also 

expressed concern about retaining customers. Based on these 

claims, the company initially demanded substantial wage 

concessions: a twenty percent reduction in the first year and 

no changes the following two years. By contrast, the union 

sought wage increases. Throughout late September, the 

negotiations focused on wages and health insurance, and the 

parties agreed to a day-to-day extension of the expiring

collective bargaining agreement.

On October 3, KLB notified the union that it would 

terminate the collective bargaining agreement on October 7. 

That same day the company made its last and final offer, 

which included an eight percent wage reduction the first year 

and two percent reductions in the second and third years. The 

union countered with moderate wage increases. Even though

the federal mediator remarked that an impasse had been 

reached, the parties continued negotiating.

The next day, on October 4, the union sent KLB a letter 

requesting the following information: (1) a list of all current

customers; (2) a copy of all price quotes that the company had 

provided over the past five years and an indication of which 

of those quotes had been awarded; (3) a list of all projects 

outsourced over the past five years that had been handled by 

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bargaining unit employees; (4) a list of all customers who had 

ceased purchasing from KLB during the last five years; (5) a 

complete list of prices for KLB’s products; (6) market studies

concerning the company’s products; and (7) a complete 

calculation of KLB’s projected savings from its concessionary

wage proposal, including an estimate of overtime. The union 

explained that it needed this information because, “[d]uring 

the course of the[] negotiations, [KLB] has continually 

asserted that they must improve the competitive position of 

the Bellefontaine, Ohio facility.” According to the letter, the 

union needed the requested information generally to verify

KLB’s competitiveness claim and the price information

specifically to “compare the prices of competitors.” Similarly, 

the union requested the list of lost customers to “test the 

Company’s assertion that they are not competitive.” 

Throughout early and mid-October, the parties continued 

negotiating and the wage issue remained a major sticking 

point.

On October 18, KLB responded to the information 

request, refusing to hand over information because its “desire 

to remain competitive in both global and domestic markets is 

no different from the desire of any business conducting 

operations similar to [this company].” KLB nonetheless 

disclosed estimated annual wage savings—one of the types of 

information the union had sought—without providing its

underlying calculations or a prediction of overtime hours. The 

next day, KLB informed the union that a lockout would begin 

on October 22. KLB also informed the employees that their

health insurance benefits would expire and that they would 

need to apply for COBRA benefits to continue receiving 

health insurance. Shortly thereafter, on October 21, the union 

responded to KLB’s information disclosure, stating that it was 

insufficient to address the company’s proposed wage cuts.

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As announced, KLB locked out unit employees on 

October 22 and subsequently hired replacement workers. Two 

incidents relevant to this case occurred during the lockout.

First, after KLB terminated the bargaining unit’s health 

insurance, it discovered that the cancellation of the entire plan 

meant that unit employees were ineligible for COBRA 

benefits. Second, several months into the lockout, the 

company called the police to report that union employees had 

trespassed on company property when they placed picket 

signs on a public right of way.

The union filed unfair labor charges against KLB and at a

hearing before an administrative law judge, the company

continued to press its competitive disadvantage argument. In

his opening statement, the company’s attorney explained that 

“KLB was faced, in the 2007 negotiations, with business 

conditions it had not faced in previous years. KLB faced 

increased competition from Asia.” The attorney also stated 

that the company “had suffered a customer setback that ended 

up costing it approximately a million dollars.” To support 

these claims, KLB introduced into evidence a “Top 20 

Customer Sales” chart detailing the past three years of sales.

The ALJ found that the reasons offered by KLB at the hearing 

mirrored those offered at the negotiating table.

The ALJ concluded that because KLB had invoked

competitive pressures as its key rationale in seeking wage 

concessions, the union was entitled to the requested 

information to verify those assertions. Rejecting the 

company’s alternative arguments that its wage information 

disclosure was sufficient and that the union had requested 

information in bad faith, the ALJ concluded that the 

company’s information withholding violated sections 8(a)(1) 

and (5) of the National Labor Relations Act. 29 U.S.C. 

§§ 158(a)(1) & (5). The ALJ also found that the lockout and 

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cancellation of health insurance violated sections 8(a)(1), (3), 

and (5). The ALJ, however, dismissed the union’s allegation 

that the company had engaged in so-called surface 

bargaining—that it had bargained in bad faith. Finally, the 

ALJ found that the company had committed an unfair labor 

practice by calling the police in retaliation for the union’s

legal picketing. The Board, with one member dissenting,

adopted the ALJ’s factual findings, legal reasoning, and 

proposed order. The dissenting member disagreed with the

Board’s disclosure ruling and its conclusion that the lockout 

was unlawful, but agreed that KLB’s cancellation of 

employees’ health insurance violated section 8(a)(5).

KLB now petitions for review, challenging the Board’s 

rulings on the disclosure issue, the lockout, and the health 

insurance cancellation. The Board moves for enforcement of 

its finding that KLB’s call to the police violated the Act. “We 

must uphold the Board’s decisions unless upon reviewing the 

record as a whole, we conclude that the Board’s findings are 

not supported by substantial evidence or that the Board acted 

arbitrarily or otherwise erred in applying established law to 

the facts of the case.” Pacific Micronesia Corp. v. NLRB, 219 

F.3d 661, 665 (D.C. Cir. 2000) (internal quotation marks 

omitted). We accord “due deference to the reasonable 

inferences that the Board draws from the evidence, regardless 

of whether the court might have reached a different 

conclusion de novo.” U.S. Testing Co. v. NLRB, 160 F.3d 14, 

19 (D.C. Cir. 1998) (internal citation omitted).

II.

The core dispute in this case is whether the company’s 

competitive disadvantage claim triggered an obligation to 

respond to the union’s targeted request for information about 

customers and products. Our starting point is the Supreme 

Court’s decision in NLRB v. Truitt Manufacturing Co., 351 

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U.S. 149 (1956), where an employer claimed that it could not 

afford to pay higher wages but refused the union’s request to 

supply information to verify that claim. The Court held that a 

“refusal to attempt to substantiate a claim of inability to pay 

increased wages may support a finding of a failure to bargain 

in good faith.” Id. at 153. If an “argument is important enough 

to present in the give and take of bargaining,” the Court 

reasoned, “it is important enough to require some sort of 

proof of its accuracy.” Id. at 152–53. In so ruling, however, 

the Court carefully acknowledged the limits of its decision: 

We do not hold . . . that in every case in which 

economic inability is raised as an argument against 

increased wages it automatically follows that the 

employees are entitled to substantiating evidence. 

Each case must turn upon its particular facts. The 

inquiry must always be whether or not under the 

circumstances of the particular case the statutory 

obligation to bargain in good faith has been met.

Id. at 153–54 (footnote omitted). Truitt thus stands for the 

proposition that failure to disclose relevant information can 

amount to an unfair labor practice under certain 

circumstances.

Following Truitt, the Board developed two lines of cases

that apply the Court’s fact-intensive standard. The parties 

disagree about which line of precedents controls this case. 

The first requires an employer to “open its books” to the 

union if it “pleads poverty” or raises an “inability to pay” 

defense during collective bargaining negotiations. Until 1991, 

the Board treated “a plea of competitive disadvantage [as] the 

functional equivalent of a statement of inability to pay.” 

United Steelworkers of America v. NLRB, 983 F.2d 240, 244 

(D.C. Cir. 1993). But prompted by a series of Seventh Circuit 

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decisions, the Board changed course. See, e.g., NLRB v. 

Harvstone Manufacturing Corp., 785 F.2d 570 (7th Cir. 

1986). In Nielsen Lithographing Co., 305 NLRB 697 (1991), 

the Board expressly rejected its prior approach of treating 

competitive disadvantage claims as automatically triggering a 

broad disclosure obligation. Under Nielsen, “an employer’s 

obligation to open its books does not arise unless the 

employer has predicated its bargaining stance on assertions 

about its inability to pay during the term of the bargaining 

agreement under negotiation.” Id. at 700. In other words, a 

company’s obligation to open its books is triggered when it 

claims an inability to pay, not when it is unwilling to pay. 

Furthermore, an employer’s disclosure obligation under

Nielsen is quite broad: a union is entitled to records sufficient 

to conduct a full financial audit. Employers that plead poverty 

must turn over “detailed financial information” such as 

“financial statements and tax returns for the past three years, 

the projected balance sheets and income statements . . . 

submitted to banks to obtain loans, and information 

concerning the salaries and perquisites of the company’s 

managerial employees.” Graphic Communications 

International Union v. NLRB, 977 F.2d 1168, 1169 (7th Cir. 

1992). 

We addressed the Board’s Nielsen standard in ConAgra, 

Inc. v. NLRB, 117 F.3d 1435 (D.C. Cir. 1997). There, the

employer conceded that it could afford to continue paying 

above-market wages, but insisted that competitive pressures 

required a wage reduction. Although the employer turned 

over information concerning its wages and pension plan, it 

refused to provide “financial statements, an additional two 

years’ worth of information on sales to competitors, or any 

information regarding [the parent company’s subsidiaries].” 

Id. at 1438. Ruling that the employer’s competitiveness claim 

constituted a “plea of poverty,” the Board found that the 

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company’s refusal to furnish the requested information 

amounted to an unfair labor practice. We disagreed, stating

that the Board’s decision “represented an unacknowledged 

and unexplained departure” from Nielsen. Id. at 1436. Given 

the Board’s previous change of position in Nielsen, we

signaled that we would henceforth carefully scrutinize a 

finding that a company had pled poverty.

Running parallel to the Nielsen line of cases, a series of 

“discovery” decisions also applies Truitt’s holding that 

information withholding can constitute an unfair labor 

practice. These cases start with the premise that collective 

bargaining “includes a duty to provide relevant information 

needed by a labor union for the proper performance of its 

duties as the employees’ bargaining representative.” Detroit 

Edison Co. v. NLRB, 440 U.S. 301, 303 (1979). This Court, 

moreover, has “long adhered to the view that the Board is to 

apply a liberal discovery-type standard, under which the 

requested information need only be relevant to the union in its 

negotiations.” U.S. Testing Co., 160 F.3d at 19. “Relevance is 

broadly construed, and in the absence of a countervailing 

interest, any requested information that has a bearing on the 

bargaining process must be disclosed.” Id. Relevance is 

presumed if the information concerns the bargaining unit. But 

“the burden is on the union to demonstrate the relevance of 

information about nonunion employees.” Id.

Significantly for the issue before us, the Board has 

applied its discovery line of cases to an employer’s

competitive disadvantage claim. For example, in Caldwell 

Manufacturing Co., 346 NLRB 1159 (2006), the Board found 

that a company committed an unfair labor practice when it 

refused to turn over requested information concerning 

“material costs, labor costs, manufacturing overhead, 

productivity calculations, competitor data, and data on 

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possible new production.” Id. at 1159 n.3. The Board 

observed that the union’s “requests were made directly in 

response to specific factual assertions made by the [company] 

in the course of bargaining.” Id. at 1160. Given this, the union 

was entitled to “request[] information to evaluate and verify 

the [company’s] assertions and develop its own bargaining 

positions.” Id. Distinguishing Nielsen and its progeny, the 

Board emphasized that the union did not seek “general access 

to the [company’s] financial records,” such as “the 

[company’s] profits, net income, tax returns, salary 

information, or administrative expenses.” Id. Rather, the

union’s information request in Caldwell Manufacturing was 

appropriate because it was tailored to the company’s factual 

assertions. See also A-1 Door and Building Solutions, 356 

NLRB No. 76, 4–5 (Jan. 11, 2011).

We distill these two lines of cases as follows. On the one 

hand, Nielsen stands for the proposition that a company 

pleading poverty must open its books for a full financial 

audit—a disclosure obligation that extends to a plethora of 

financial information. But as Nielsen also makes clear, a 

competitive disadvantage claim is insufficient, by itself, to 

obligate a company to open its books. On the other hand, the

Board’s discovery line of cases endorses a relevancy-based, 

pro-disclosure standard that allows a union to request specific 

information to verify a company’s stated position, including 

competitiveness claims.

With these principles in mind, we turn to the Board’s 

decision in this case. The Board found that KLB “repeatedly 

sought to justify its demands by stating that concessions were 

necessary to make its facility more competitive.” KLB 

Industries, 357 NLRB No. 8, at 1. Undertaking a thorough 

explanation of the relevant precedents concerning when an 

employer is required to disclose information to a union and

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analogizing this case to Caldwell Manufacturing, the Board 

evaluated the dispute under its discovery line of cases. The 

Board explained that by relying on competitive pressures as a 

justification for wage concessions, the company had made the

veracity of that claim relevant to the negotiations.

Accordingly, the union was entitled to the requested 

information to verify the company’s assertions. As the Board 

pointed out, the Top 20 Customer Sales chart could have 

proven useful to the union in its effort to evaluate the 

competitive pressures facing KLB. Addressing the Nielsen

line of cases, the Board concluded that “[t]his is not an 

inability-to-pay case,” id. at 3, meaning that KLB had no 

obligation to open its books for a full financial audit. 

Responding to the dissenting member’s argument that Nielsen

controls, the Board explained that nothing in Nielsen implies 

that “a union faced with something less than an inability-topay claim is not entitled to any information.” Id. Thus,

harmonizing the two lines of cases, the Board concluded that

“an information request . . . is not an all-or-nothing 

proposition.” Id.

Challenging the Board’s reasoning, KLB’s central claim 

is that a “generalized competitiveness claim is insufficient to 

make the information at issue . . . relevant.” Pet’r’s Br. 14.

According to KLB and our dissenting colleague, dissenting 

op. at 13–15, competitive disadvantage claims have a 

talismanic quality that requires the application of Nielsen’s 

framework. Given the Board’s concession that this is not an 

inability-to-pay case, the company’s argument goes, it has no

disclosure obligation.

KLB’s position ignores the Board’s careful approach to 

its own precedent. Unlike in ConAgra, the Board 

distinguished Nielsen and justified its decision under the 

discovery line of cases. As found by the ALJ and affirmed by 

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the Board, record evidence establishes that KLB relied

primarily on a competitiveness rationale in seeking substantial 

wage concessions. The union targeted its information request

to that competitiveness claim and did not ask the company to

open its books and provide generalized financial data 

concerning profits and management expenses. Thus, the 

union’s information request and the company’s concomitant 

disclosure obligation were narrow.

Nor does KLB offer a persuasive explanation for why a 

competitive disadvantage claim should be immunized from 

the Board’s “liberal discovery-type standard, under which the 

requested information need only be relevant to the union in its 

negotiations.” U.S. Testing Co., 160 F.3d at 19. It is true, as 

KLB emphasizes, that in a globalized economy the specter of 

competition haunts every company. But where, as here, an 

employer raises a competitiveness claim as its central 

justification for wage concessions, a union is entitled to 

information verifying that claim. Indeed, “a claim of pending 

competitive ruin generally requires some external verification 

before a union can reasonably rely upon it in deciding how to 

structure its negotiating strategy.” ConAgra, 117 F.3d at 1449 

(Wald, J., concurring). We therefore agree with the Board that 

Caldwell Manufacturing provides the appropriate framework 

for this case.

KLB alternatively argues that its competitiveness claim

lacked the requisite specificity to trigger a disclosure 

obligation. The company points to language in Caldwell 

Manufacturing indicating that the employer there took the 

position during negotiations that its other facilities were more 

competitive. But KLB’s competitiveness claim was also

specific. The Board found that the company had made “grave, 

specific, and recurring assertions of [its] lack of 

competitiveness.” KLB Industries, 357 NLRB No. 8, at 4. The

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Board highlighted KLB’s reliance on Asian competitors, 

rising production costs, and declining productivity. Although 

the company asserts, and the dissent agrees, dissenting op. at 

9–13, that it made these claims at the administrative hearing 

rather than at the bargaining table, its representative testified 

that these concerns were relayed to the union during 

negotiations. Indeed, the testimony the dissent cites supports 

the Board’s conclusion. KLB’s negotiator testified that the 

company informed the union during negotiations that it 

needed to “stay competitive” because it was “competing with 

the Asian firms” and because “costs per hour, per production 

hour had risen, and . . . production, itself, had actually 

dropped a little.” Thus, substantial record evidence supports

the ALJ’s finding that the issues raised at the administrative 

hearing were the same issues discussed at the bargaining 

table. See KLB Industries, 357 NLRB No. 8, at 4 n.9 (Board 

rejecting an identical argument and explaining that “the 

record makes clear that the [company] communicated these 

concerns not only at the hearing, but during negotiations as 

well”); id. at 50 (ALJ commenting that the company “defined 

or explained [its competitiveness claim] in a variety of ways” 

and finding that the reasons offered at the hearing mirrored 

those given at the bargaining table). See also Pacific 

Micronesia Corp., 219 F.3d at 665 (explaining that the Board 

must “present on the record such relevant evidence as a 

reasonable mind might accept as adequate to support [its]

conclusion” (internal quotation marks omitted)). 

Moreover, and contrary to the dissent, dissenting op. at 8,

the Board reasonably concluded that the company’s

competitive disadvantage claims could have been

substantiated by examining price quotes, lost customers, and 

marketing strategies. As noted by the Board and invoked by 

union counsel at oral argument, the Top 20 Customer Sales 

chart could have demonstrated that KLB acquired a new 

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customer worth $1 million in revenue in 2006 only to lose 

that customer in 2007. Similarly, a list of prices could have 

helped the union with accomplishing its stated goal of

“compar[ing] the prices of competitors.” Not only was this 

information relevant to whether KLB faced an increasingly

competitive business atmosphere, but the union’s 

contemporaneously proffered reason for needing the 

information—double-checking the company’s

competitiveness claim—satisfies the “minimum standard of 

relevance” established by our precedent. New York and 

Presbyterian Hospital v. NLRB, 649 F.3d 723, 729 (D.C. Cir. 

2011).

Of course, the specific information necessary to verify a 

competitiveness claim will vary depending on the 

circumstances of the case. By adopting a contextualized

approach, Caldwell Manufacturing and its progeny are 

faithful to Truitt’s mandate that “[e]ach case must turn upon 

its particular facts.” Truitt, 351 U.S. at 153. To the extent 

KLB now contends the dividing line between Nielsen’s “open 

your books” disclosure obligation and the instant information 

request is arbitrary and capricious, that argument is waived 

because it first appeared in the company’s reply brief. See 

Lake Carriers’ Association v. EPA, 652 F.3d 1, 10 n.9 (D.C. 

Cir. 2011) (noting that “arguments not raised until the reply 

brief are waived”).

To be clear, we are sensitive to the risk that the Caldwell 

Manufacturing line of cases could become an end-run around 

Nielsen. But this case does not implicate that concern. Before 

this Court, KLB has pursued an all-or-nothing litigation 

strategy to disclosure. Relying on Nielsen, it argues that it had 

no disclosure obligation because it never pleaded poverty, and 

relying on Caldwell Manufacturing, it argues that its 

competitiveness claim was insufficiently specific to trigger a 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 14 of 36
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disclosure obligation. As explained above, neither argument

has merit. And critically for our purposes, the company does 

not argue here that even if it had a disclosure obligation, the

union’s information request was irrelevant. Given this, we 

have no need to demarcate the outer limits of the Board’s 

discovery line of cases.

KLB makes two subsidiary arguments. First, it claims 

that it provided an adequate cost savings report for its wage 

concessionary plan. Recall that the union requested that KLB 

provide an estimate—with underlying calculations and 

overtime hours—of how much money its wage concessionary 

plan would save. Although the company provided annualized 

savings estimates, it failed to include the underlying 

calculations and the predicted overtime. Because a union is 

“entitled to inspect the data relied on by an employer and does 

not have to accept the employer’s bald assertions or 

generalized figures at face value,” E.I. Du Pont de Nemours 

& Co. v. NLRB, 489 F.3d 1310, 1316 (D.C. Cir. 2007), KLB’s 

argument is meritless.

Second, the company argues that the union made its 

information request in bad faith. According to KLB, the 

timing of the union’s request—the day after the federal 

mediator’s offhand remark about an impasse—reveals its

pretextual nature. KLB further complains that the union made 

no mention of the information request until after the 

announcement of the lockout. But the federal mediator—not

the company’s representative—made the impasse remark, and 

the parties continued negotiating after that remark and after

the union’s information request. Moreover, the company only 

responded to the information request the day before the 

lockout announcement, which explains why the union 

remained silent for so long. Given this chronology and the 

importance of the wage issue to the negotiations, the Board 

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properly found that KLB failed to rebut the presumption of

good faith bargaining. See DaimlerChrysler Corp. v. NLRB, 

288 F.3d 434, 443 (D.C. Cir. 2002) (“The Board presumes 

that requests for presumptively relevant information are made 

in good faith, until the company demonstrates otherwise.”).

III.

Having resolved the information withholding issue, we 

can quickly dispose of KLB’s remaining arguments.

The company makes several interrelated contentions

concerning the lawfulness of the lockout. We reject its first 

claim—that the information withholding was lawful and 

therefore the lockout was lawful—for the reasons stated

above. KLB next asserts that the lockout was lawful because 

the Board dismissed the surface bargaining allegation. The 

company misinterprets the Board’s reasoning. The 

information withholding made the lockout unlawful 

notwithstanding KLB’s otherwise good faith bargaining.

Thus, the Board’s dismissal of the surface bargaining 

allegation is irrelevant. KLB claims that the Board failed to 

expressly find that the information withholding—and not 

another issue, like the health insurance dispute—materially 

affected the progress of the negotiations. The Board, however, 

adequately explained the nexus between the wage dispute and 

the information request:

[The] proposed concessions were the central point of 

disagreement during negotiations . . . . The Union’s

information request was designed to enable the 

Union to evaluate and respond to that proposal. 

Absent the Union’s willingness to buy “a pig in a 

poke,” that information was therefore critical to the 

bargaining and the possibility of the parties’ reaching 

an agreement . . . .

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 16 of 36
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KLB Industries, 357 NLRB No. 8, at 6. Thus, contrary to the 

dissent, dissenting op. at 17–18, the Board did address

whether the unlawful information withholding had a material 

effect on the progress of the negotiations.

Finally, given our conclusion that the lockout was 

unlawful, we have no need to discuss KLB’s contention 

regarding the health insurance cancellation.

IV.

The Board seeks enforcement of its finding that KLB 

unlawfully responded to the union’s picketing by calling the 

police. Because the company failed to file exceptions to this 

finding, it is jurisdictionally barred from obtaining review in 

this Court. See 29 U.S.C. § 160(e) (“No objection that has not 

been urged before the Board, its member, agent, or agency, 

shall be considered by the court, unless the failure or neglect 

to urge such objection shall be excused because of 

extraordinary circumstances.”).

We deny KLB’s petition for review and grant the Board’s 

cross-application for enforcement of its Order.

So ordered.

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 17 of 36
 KAREN LECRAFT HENDERSON, Circuit Judge, dissenting 

in part: 

I respectfully dissent from Parts II and III of the majority 

opinion because, in my view, KLB Industries’ (KLB) 

generalized statements regarding competitiveness did not give 

rise to a duty of further disclosure to the International Union, 

United Automobile, Aerospace and Agricultural Implement 

Workers of America, UAW (Union), nor did KLB unlawfully 

impose the subsequent lock out of its bargaining unit 

employees. 

I. 

KLB produces aluminum extrusions at its Bellefontaine, 

Ohio facility. KLB began negotiating with the Union for a 

new collective bargaining agreement (CBA) in September 

2007.1

 KLB sought wage cuts and other concessions in order 

to improve its competitive position. On October 3, the parties 

met with a federal mediator. After KLB told the mediator that 

its current offer was its “last, best and final offer,” the 

mediator stated “I guess we’re at impasse then,” to which the 

Union’s representative demurred. KLB Indus., Inc., 357 

N.L.R.B. No. 8, at 24 (July 26, 2011). The next day, the 

Union sent KLB a letter requesting, among other things, 

information on KLB’s proposal for “wage reductions.” The 

Union wrote: 

During the course of these negotiations, the 

Company has continually asserted that they [sic] 

must improve the competitive position of the 

 

1

 All dates are in 2007 unless otherwise noted. 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 18 of 36
2 

Bellefontaine, Ohio facility. Based on this assertion, 

the Company has made numerous contract proposals 

that reduce the wages and benefits. In order for the 

Union to determine the veracity of these claims, 

please provide the following information: 

1. A list of all current customers so that 

the Union may contact the customers to 

determine if any of them is 

contemplating purchasing products 

from other sources. 

2. A copy of any and all quotes that the 

Company has provided, and whom 

these quotes have been issued to. Also, 

how many quotes have been awarded 

(or not awarded) in the past five (5) 

years. 

3. Identify any and all outsourced work 

(in the past 5 years) that had previously 

been done at this facility by the 

bargaining unit employees.2

4. A list of all customers who have ceased 

buying from this facility during the last 

 

2

 The 16-member bargaining unit was composed of “[a]ll 

hourly-paid production and maintenance employees in [KLB’s] 

Bellefontaine, Ohio, plant but excluding all office and clerical 

employees, guards, professional employees and all supervisors.” 

KLB Indus., 357 N.L.R.B. No. 8, at 13 n.2. 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 19 of 36
3 

5 years. The union needs this 

information to test the Company’s 

assertion that they [sic] are not 

competitive. The union intends on 

contacting the former customers to 

learn the reasons why they stopped 

purchasing. 

5. A complete list of prices for products 

so that the union can compare the 

prices of competitors. 

6. In order for the Union to determine 

whether the company’s assertion of 

uncompetitivness [sic] is based on price 

or other factors. Please provide market 

studies and/or marketing plans that 

would impact sales of products 

produced at of [sic] the KLB Industries, 

Bellefontaine, Ohio facility. 

Deferred Appendix (DA) 357-58 (hereinafter referred to as 

“Competitive Information”). The Union also requested “a 

complete calculation of the projected company savings over 

the next three years, including any projected overtime” 

resulting from KLB’s wage proposal. DA 358. The parties 

continued to negotiate but KLB did not provide the 

Competitive Information to the Union. On October 18, KLB 

wrote to the Union, explaining that the Competitive 

Information was irrelevant: 

The Company disagrees that information you 

requested about its current customers is necessary 

and relevant . . . . The Company’s desire to remain 

competitive in both global and domestic markets is 

no different from the desire of any business 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 20 of 36
4 

conducting operations similar to those of KLB. . . . 

[T]he UAW’s bare assertion that it needs to test the 

veracity of KLB’s “claim” of competitiveness is 

insufficient to make customer information necessary 

and relevant to the Union’s role as the exclusive 

representative of the bargaining unit. 

The Company also disagrees that information about 

outsourced work is necessary and relevant to the 

UAW’s representation of the bargaining unit. The 

UAW is well aware that KLB has, and continues to, 

outsource work. To KLB’s knowledge, the Union 

has never complained about or grieved outsourcing. 

Further, the Company and the Union have not had 

any bargaining discussions related to outsourcing. 

The Company fails to understand how its broad 

statement of remaining competitive in global and 

domestic markets triggers the necessity and 

relevancy of outsourcing information. 

The Company, however, agrees that the wage cost 

saving is necessary and relevant. The first year 

saving[s] is $36,177.00. The second year savings is 

$44,498.00. The third year savings $62,652.00 [sic]. 

And the overall cost savings of the proposed wage 

decrease is $133,327.00. 

DA 387. Three days later, the Union responded. Rather than 

explaining the relevance of its request for the Competitive 

Information, it simply repeated: 

The Union maintains that it is entitled to all 

documents and information called for in our October 

4, 2007 letter and, again, the Company has failed 

miserable [sic] to supply essential information 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 21 of 36
5 

regarding the Company’s proposals to [sic] wage 

reductions to the Union. 

DA 393. The Union also complained that the wage cost 

savings information did not include “complete calculations.” 

DA 393. On October 19, KLB told the Union representative 

that a lockout would commence on October 22. KLB also sent 

letters to bargaining unit employees stating that insurance 

benefits would terminate on October 23 and that they should 

apply for continuation coverage, if desired, under the 

Consolidated Omnibus Budget Reconciliation Act of 1985, 29 

U.S.C. §§ 1161 et seq. (COBRA). On October 22, KLB 

locked out the bargaining unit employees and began hiring 

temporary replacements. On October 24, KLB notified United 

Healthcare, its insurance provider, to cancel its group 

insurance policy. Unbeknownst to KLB, the cancellation 

meant that bargaining unit employees were not eligible for the 

COBRA continuation coverage. While the parties met 

thereafter on three other occasions, they did not come to an 

agreement on a new CBA. 

 Ultimately, the Union filed unfair labor practice charges3

against KLB. After a hearing before an administrative law 

judge (ALJ), the ALJ found that KLB had violated the NLRA 

by (1) failing to provide relevant information to the Union; 

 

3

 The unfair labor practices involved “bargaining violations, an 

unlawful lockout, . . . a unilateral change in terms and conditions 

related to the cessation of health benefits after the lockout 

commenced . . . [and] an allegation that the employer ‘restrained 

and coerced’ employees in the exercise of their Section 7 rights.” 

KLB Indus., Inc., 357 N.L.R.B. No. 8, at 60.

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 22 of 36
6 

and (2) locking out employees, hiring temporary replacements 

and cancelling health insurance.4

 On July 26, 2011, the Board 

affirmed the ALJ’s decision and reasoning in full, with 

Member Hayes dissenting on the grounds that KLB was under 

no obligation to provide the Competitive Information to the 

Union and that the lockout/hiring of temporary replacements 

was lawful. The Board found, inter alia, that KLB had 

violated section 8(a)(5) and (1) of the Act by failing to 

provide the Union relevant information and section 8(a)(5), 

(3) and (1) by locking out employees, hiring temporary 

replacements and cancelling its employees’ health insurance 

coverage. 

II. 

 Applying clear precedent, I believe the Board incorrectly 

concluded that KLB violated section 8(a)(1) and (5) of the 

National Labor Relations Act, 29 U.S.C. § 158(a)(1) & (5) 

(NLRA or Act), by declining to produce the Competitive 

Information. Under section 8(a)(5), the employer has a “duty 

to bargain collectively,” Detroit Edison Co. v. NLRB, 440 

U.S. 301, 303 (1979), which requires it to provide relevant 

information to the union when requested. See N.Y. & 

Presbyterian Hosp. v. NLRB, 649 F.3d 723, 729 (D.C. Cir. 

2011). Information about bargaining unit terms and conditions 

of employment is presumptively relevant. See id. at 730. But 

where, as here, the union requests information regarding a 

different matter, it has the burden to “explain to the employer 

 

4

 The ALJ found, and KLB did not contest, the unfair labor 

practice resulting from its summoning the police to retaliate for the 

Union’s picketing. 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 23 of 36
7 

why the information is relevant.” Id. The “threshold for 

relevance” is a “discovery-type standard,” meaning “‘[t]he 

fact that the information is of probable or potential relevance 

is sufficient to give rise to an obligation . . . to provide it.’” 

Id. (quoting Oil, Chem. & Atomic Workers Local Union No. 

6-418 v. NLRB, 711 F.2d 348, 359 (D.C. Cir. 1983)) (internal 

quotation mark omitted and alterations in original). In 

determining whether the union has satisfied its burden to 

show relevance, we have held that “‘context is everything,’” 

and, most important here, “we consider the reasons [for 

relevance] proffered by the union at the time of its request.” 

Id. at 731 (quoting U.S. Testing Co. v. NLRB, 160 F.3d 14, 19 

(D.C. Cir. 1998)). 

While the “threshold for relevance” is low, it is not zero. 

“‘A union’s bare assertion that it needs information . . . does 

not automatically oblige the employer to supply all the 

information in the manner requested.’” Id. at 730 (quoting 

Detroit Edison, 440 U.S. at 314)) (ellipses in original). An 

employer must supply information to substantiate specific

assertions on which it premises its bargaining positions 

because the information is necessary to the Union to “evaluate 

and verify the [employer’s] assertions and develop its own 

bargaining positions.” Caldwell Mfg. Co., 346 N.L.R.B. 1159, 

1160 (2006); see also Lakeland Bus Lines v. NLRB, 347 F.3d 

955, 960 (D.C. Cir. 2003) (“Th[e] obligation to bargain in 

good faith requires that employers and unions exchange 

relevant information when necessary to substantiate

assertions made during collective bargaining.”) (emphases 

added). At the same time, the employer has no obligation to 

disclose information merely because it makes a generalized 

statement during negotiations. See F.A. Bartlett Tree Expert 

Co., 316 N.L.R.B. 1312, 1313 (1995) (employer’s reference 

to fact that customer contracts varied did not obligate 

employer to furnish contracts to union for examination). 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 24 of 36
8 

An employer must provide general financial information 

to a union if the employer predicates its bargaining position 

on an “inability to pay.” See NLRB v. Truitt Mfg. Co., 351 

U.S. 149, 152-53 (1956). For a time, the Board also applied 

this formulation to an employer that asserted competitive 

disadvantage, treating the assertion as the equivalent of an 

inability to pay claim. ConAgra, Inc. v. NLRB, 117 F.3d 1435, 

1439 (D.C. Cir. 1997). As discussed in ConAgra, however, 

the Seventh Circuit first registered its disagreement with the 

Board’s formulation in 1986. In NLRB v. Harvstone Mfg. 

Corp., 785 F.2d 570 (7th Cir. 1986), that Circuit declared that 

claims of competitive disadvantage are “nothing more than 

truisms” and do not equate to an inability to pay. Id. at 576-

77. Instead, a competitive disadvantage claim manifests only 

that the employer is not willing to pay—which, unlike an 

inability-to-pay claim, is not a verifiable assertion—and 

consequently does not require substantiation. See id. at 577 

(“[T]he employer operating at a competitive disadvantage is 

financially able, although perhaps unwilling, to pay increased 

wages.”); see also Lakeland Bus Lines, 347 F.3d at 961 (“a 

mere unwillingness to pay . . . does not [trigger a duty to 

disclose]”); United Steelworkers of Am., Local Union 14534 

v. NLRB, 983 F.2d 240, 244 (D.C. Cir. 1993) (“A company is 

obliged to provide financial information only when it asserts 

an inability to pay, because this assertion is legitimately 

subject to verification.”). The Board eventually agreed, 

concluding in Nielsen Lithographing Co. that a “claim of 

competitive disadvantage is not the same as a claim of 

financial inability to pay” and therefore does “not trigger an 

obligation to furnish financial information under Truitt.” 305 

N.L.R.B. 697, 699, 701 (1991). 

 “We review the Board’s factual conclusions for 

substantial evidence” and “uphold the Board’s application of 

law to facts unless arbitrary or otherwise erroneous.” N.Y. & 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 25 of 36
9 

Presbyterian Hosp., 649 F.3d at 729 (quoting Guard Publ’g 

Co. v. NLRB, 571 F.3d 53, 58 (D.C. Cir. 2009)) (internal 

quotation marks omitted). Here, however, the Board wholly 

failed the substantial evidence test. It concluded that KLB 

made “grave, specific, and recurring” representations about 

competitiveness, which “encompassed not only the source of 

competitive difficulties (rising production costs and falling 

production), but the day-to-day impact of those constraints on 

the company’s business, including its difficulty in retaining 

customers and in paying employees in line with previous 

contracts.” KLB Indus., Inc., 357 N.L.R.B. No. 8, at 4. The 

Board also declared that KLB had “explicit concerns about 

retaining customers and keeping pace with Asian 

competitors” and that KLB’s concerns were communicated 

“not only at the hearing, but during negotiations as well.” Id. 

n.9 (emphasis added). Unless I have read a different version 

of the Board decision, the Board nowhere pointed to any

evidence that matches its overblown description of KLB’s 

negotiating posture.5

 

 Simply put, the record does not support the Board’s 

characterization of the parties’ bargaining. As Member Hayes 

explained in dissent, the only record evidence regarding 

KLB’s “elaboration” of its competitive disadvantage assertion 

is as follows: 

 

5

 KLB’s post-bargaining testimony at the hearing before the ALJ 

does not bear on the relevance determination; relevance must be 

demonstrated by the Union at the time it makes its request. N.Y. & 

Presbyterian Hosp., 649 F.3d at 731. 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 26 of 36
10 

Q. (on direct examination) Did KLB say anything to 

the Union regarding why it wanted to achieve cost 

savings in this Collective Bargaining Agreement in 

2007? 

A. We indicated to them that we, you know, wanted 

to be—stay competitive and we were competing with 

the Asian firms. 

And also that our costs per hour, per production 

hour had risen and our—our production, itself, had 

actually dropped a little. 

Q. Okay. And did KLB, during the 2007 

negotiations, did KLB tell the Union about the—the 

top 20 information [about customers] that we just 

discussed with the Court? 

A. No, we did not. 

DA 167:10-23 (Testimony of KLB Negotiator Bryan 

Hastings) (emphasis added). 

Q. (on direct examination) Do—do you—did the 

Employer offer any explanation at this point as to 

why they needed all of these wage cuts? 

A. They always only referred to competitiveness. 

Q. Okay. And—and who is that, that you say that's 

speaking? 

A. I would say Brian [sic]. 

Q. So when you say referred to competitiveness so 

that the Employer could be competitive? 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 27 of 36
11 

A. Yes. 

DA 47:4-8 (Testimony of Union Negotiator Konrad 

Young) (emphasis added). 

Q. (on cross-examination) With respect to explaining 

why the Company wanted concessions, isn’t it true 

that Mr. Hastings said more that [sic] just they 

needed to be competitive? 

A. I don’t recollect anything other than competition 

with other Companies without them naming the 

Companies and it all centered around 

competitiveness. 

Q. Okay. Did Mr., Mr. Wakefield told [sic] you that 

the Company’s production cost was decreasing, isn’t 

that true? 

A. Competitive, yes, that’s competitiveness. 

Q. All right. And Mr. Wakefield also told you that 

the productivity of the Company’s employees was 

decreasing, isn’t that correct? 

A. I don’t recall that. 

DA 76 at Tr. 369:24-370:13 (Testimony of Union Negotiator 

Konrad Young) (emphasis added). The record shows, at best, 

two substantiatable “competitiveness” statements: Hastings’s 

statement about a rise in “production cost[s]” and Hastings’s 

statement about decreased productivity. But the Union did not 

specify any “production costs” or “productivity” information 

in the lengthy list of Competitive Information it did seek. 

Additionally, KLB’s statement regarding competition from 

“Asian firms” was generic. Hastings did not name specific 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 28 of 36
12 

competitors—he simply mentioned “Asian firms,” common 

competitors of nearly all American manufacturers. 

Additionally, the generality of the Union’s Competitive 

Information request manifests that KLB in fact made only a 

generic competitive disadvantage claim in that both the 

Union’s initial request of October 4 as well as its October 21 

follow-up letter failed to refer to even a single 

“competitiveness” claim made by KLB during negotiations. 

Despite having the burden to explain the relevance of the 

Competitive Information it sought at the time it sought that 

information, see N.Y. & Presbyterian Hosp., 649 F.3d at 731, 

the Union merely stated that it wanted the Competitive 

Information to establish the “veracity” of KLB’s competitive 

disadvantage claim. This is plainly insufficient to establish 

relevance. Cf. F.A. Bartlett Tree Expert Co., 316 N.L.R.B. at 

1313 (“The basis for the request, i.e., that the information 

contained in the [customer] contracts is necessary to make a 

reasonable wage proposal is nothing more than another way 

of saying that it is needed ‘to bargain intelligently’ and this 

general claim is simply insufficient to establish relevance.”). 

Moreover, after KLB replied that the Competitive Information 

was irrelevant, see DA 387, the Union reasserted with no 

elaboration that it was entitled to the Competitive Information 

and chastised KLB for failing “miserabl[y] to supply” the 

information. DA 393. 

 The majority gives several reasons why it believes 

“substantial record evidence supports the ALJ’s finding that 

the issues raised at the administrative hearing were the same 

issues discussed at the bargaining table.” Maj. Op. 13. But the 

only record evidence it cites is Hastings’s admission that he 

made a generic competitive disadvantage claim during 

bargaining. I do not see how it follows from this that KLB 

made the required specific claims during bargaining. The 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 29 of 36
13 

majority also cites the Board’s statement that KLB 

“‘communicated [its] concerns not only at the hearing, but 

during negotiations as well’” and that the ALJ stated that 

KLB explained its competitive disadvantage claim “‘in a 

variety of ways’” and that KLB’s rationale for wage cuts 

“‘centered around competitiveness.’” Maj. Op. 3, 13 (quoting 

KLB Indus., Inc., 357 N.L.R.B. No. 8, at 4 n.9, 50). But these 

statements are not supported by any record evidence.6

 The 

majority fails to address the key weakness of the Board’s 

order: that it is not supported by substantial evidence. 

The majority compares the specificity of KLB’s 

competitiveness claim to that of the employer in Caldwell. 

But in Caldwell, the employer specified that: (1) its Rochester 

plant was less competitive than its other plants; (2) that plant 

had already experienced significant reductions in force; (3) its 

production costs were lower elsewhere; and (4) without 

bargaining concessions, the Rochester plant would not be “a 

viable option when it came time to locate contemplated new 

product lines.” 346 N.L.R.B. at 1160 & n.6. And, in response 

to the employer’s detailed assertions, the union “requested 

specific information to evaluate the accuracy of the 

[employer’s] specific claims.” Id. at 1160 (emphases added); 

 

6

 The majority also claims the ALJ found that KLB’s “reasons 

offered at the hearing mirrored those given at the bargaining table.” 

Maj. Op. 13. I do not read the ALJ to have made that finding; 

rather, the ALJ did not distinguish between KLB’s reasons given at 

the hearing and those given during negotiations. See KLB Indus., 

Inc., 357 N.L.R.B. No. 8, at 50 (after stating KLB explained its 

competitive disadvantage claim “in a variety of ways,” ALJ 

referred to explanations given only “[a]t the hearing”). 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 30 of 36
14 

see also id. at 1159 & n.3, 1160 n.6. KLB’s bargaining 

position—which generically referred to production costs, 

productivity and “competing with the Asian firms”—is a far 

cry from the employer’s position in Caldwell—even more so 

because the Union failed to request any information regarding 

production costs and productivity. 

The majority divides the duty to disclose nonpresumptively-relevant information (i.e., information that 

does not relate to bargaining unit terms and conditions of 

employment) into two distinct “lines of cases.” Maj. Op. 7. 

The “discovery” line of cases stands for the proposition that 

the employer must turn over all requested information that is 

relevant to the union, with relevance being “‘broadly 

construed.’” Maj. Op. 9 (quoting U.S. Testing Co., 160 F.3d at 

19); see also supra pp. 6-7 (discussing N.Y. & Presbyterian 

Hosp., 649 F.3d at 730, as requiring information to be only 

“of probable or potential relevance”). On the other hand, the 

“Nielsen” line is more specific—it requires the employer to 

“‘open its books’ to the union if it ‘pleads poverty’ or raises 

an ‘inability to pay’ defense during . . . negotiations,” Maj. 

Op. 7-8, but not if the employer claims competitive 

disadvantage. See Lakeland Bus Lines, 347 F.3d at 961. The 

majority contends that this case belongs in the broad 

discovery line. I disagree. 

The Nielsen line of cases is not wholly analytically 

distinct from the discovery line; rather, the Nielsen line is a 

specific line of authority that branches from the discovery 

precedent. Under Nielsen, the reason the employer’s books 

become relevant when it pleads poverty is that an examination 

of the books can verify if the employer’s assertion is true. 

United Steelworkers, 983 F.2d at 244 (emphasis added) (“A 

company is obliged to provide financial information only 

when it asserts an inability to pay, because this assertion is 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 31 of 36
15 

legitimately subject to verification.”) (emphasis added). But 

the Nielsen line also explains that the employer’s assertion of 

competitive disadvantage (as opposed to a poverty plea) does 

not create a broad disclosure obligation because the assertion 

is not “legitimately subject to verification.” See id.; Lakeland 

Bus Lines, 347 F.3d at 961. Just as in the analogous area of 

statutory construction, where the specific controls the general, 

Gozlon-Peretz v. United States, 498 U.S. 395, 407 (1991) (“A 

specific provision controls over one of more general 

application”), the employer asserting competitive 

disadvantage represents a “carve out” from the otherwise 

applicable broad discovery cases. 

My colleagues conclude that “KLB has pursued an all-ornothing litigation strategy to disclosure” and “critically for 

our purposes, the company does not argue here that even if it 

had a disclosure obligation, the union’s information request 

was irrelevant.” Maj. Op. 14-15. I disagree; KLB did not 

pursue an all-or-nothing disclosure strategy, either during 

bargaining or litigation. In response to the Union’s October 4 

Competitive Information request, KLB in fact provided 

information it agreed was relevant. See DA 387 (providing 

bonus proposal information and wage cost savings 

information). Presumably KLB would have provided further 

information had the Union fulfilled its burden to explain the 

information’s relevance. N.Y. & Presbyterian Hosp., 649 F.3d 

at 731.7

 Nor does KLB take the position today that it had no 

 

7

 I note that KLB’s hesitation in turning over Items 1, 4 and 5 of 

the Competitive Information was undoubtedly reasonable. The 

Union requested KLB’s current customer list “so that the Union 

may contact the customers to determine if any of them is 

contemplating purchasing products from other sources,” KLB’s 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 32 of 36
16 

obligation to disclose any information contained in the 

October 4 request only because it did not make a plea of 

poverty; rather, KLB also asserts that it did not have an 

obligation to disclose irrelevant information. 

Although broad, the relevance standard is not 

meaningless. Nothing in the record of the parties’ negotiations 

demonstrates that KLB made anything other than a generic 

competitive disadvantage claim; a mere “truism” indicating 

an unwillingness to pay. Likewise, nothing manifests that the 

Union met its burden by demonstrating the relevance of the 

Competitive Information at the time it sought that 

information.8

 

 

former customer list because it “intends on contacting the former 

customers to learn the reasons why they stopped purchasing” and 

KLB’s “complete list of prices for [its aluminum extrusion] 

products so that the [U]nion can compare the prices of 

competitors.” DA 357-58. Even were the Union simply to approach 

KLB’s current and former customers about their purchasing 

practices, that could well disrupt KLB’s business relationship, 

including goodwill, with them. Nor would customers be likely to 

appreciate KLB’s decision to divulge their contact information as a 

bargaining chip. KLB simply exercised good business sense in 

insisting on knowing the relevance of the requests before revealing 

sensitive information. 

8

 I do agree with my colleagues, however, that KLB failed to 

provide the Union with an adequate cost savings report for its wage 

plan. See infra p. 18.

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 33 of 36
17 

III. 

 I also believe that KLB’s lockout, hiring of temporary 

replacements and cancellation of health insurance did not 

violate sections 8(a)(5), (3) and (1) of the Act. 

A bargaining lockout is lawful if it is initiated for the 

“sole purpose of bringing economic pressure to bear in 

support of [an employer’s] legitimate bargaining position.” 

Am. Ship Bldg. Co. v. NLRB, 380 U.S. 300, 318 (1965). On 

the other hand, an employer may not lock out employees “for 

the purpose of evading its duty to negotiate with the 

employees’ bargaining representative.” Teamsters Local 

Union No. 639 v. NLRB, 924 F.2d 1078, 1085 (D.C. Cir. 

1991). But “the mere fact of an unremedied Section 8(a)(5) 

failure to furnish information does not necessarily compel a 

finding that a subsequent lockout was unlawful.” PACCAR, 

Inc. d/b/a Peterbilt Motors Co., 357 N.L.R.B. No. 13, at 4 

(2011) (emphasis in original). Rather, “[a]lthough nowhere 

expressly stated, the standard consistently, if implicitly, 

applied by the Board is that where the unlawful withholding 

of the information did not materially affect the progress of 

negotiations, the . . . lockout is lawful notwithstanding the 

unremedied violation.” Id. (emphasis added). While Peterbilt 

Motors involved a post-lockout refusal to furnish requested 

information, the Board there noted that the standard applies 

whether the refusal is pre- or post-lockout. Id.

Here, the Board found the lockout unlawful because KLB 

failed to provide the Competitive Information and additional 

calculations in support of its projected wage cost savings. The 

Board conducted no analysis either of the purpose of the 

lockout or of the material effect—if any—of KLB’s failure to 

disclose on the progress of negotiations. Instead, the Board 

found the lockout was “tainted” because the issue of wages 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 34 of 36
18 

was “critical to the bargaining” and the information KLB 

failed to turn over was related to the proposed wage cuts and 

the reasons therefor. DA 425-26. But the Board failed to 

address the fact that the parties were nearly at impasse before 

the Union’s information request or the fact that negotiations 

continued after KLB declined the information request. Nor 

does the Board conclude that disclosure would have made a 

material difference to the progress of negotiations. 

The Board’s finding that the lockout was unlawful is 

particularly problematic because, given the fact that KLB had 

no duty to disclose the Competitive Information, the only 

relevant information that KLB failed to provide were 

calculations supporting KLB’s wage cost savings information. 

The record, however, does not support the notion that the 

failure to provide the calculations materially affected the 

progress of bargaining or manifested that KLB was 

attempting to evade its bargaining duty. Accordingly, I find 

KLB’s lockout lawful. Additionally, because it is undisputed 

that KLB could lawfully hire temporary replacements if the 

lockout was lawful, I find its decision to do so lawful as well.9

 

9

 Because I believe the lockout was lawful, I would also reach 

the issue of the cancelled health insurance. The Board found that 

KLB’s cancellation of its group health insurance plan was unlawful 

because it was a unilateral change in the terms and conditions of 

employment. TruServ Corp. v. NLRB, 254 F.3d 1105, 1113 (D.C. 

Cir. 2001) (“An employer violates th[e] duty to bargain if, absent a 

final agreement or a bargaining impasse, he unilaterally imposes 

changes in the terms and conditions of employment.”). 

The relevant CBA provision states that health insurance benefits 

may be terminated “no later than the end of the month following 

the month in which an employee is laid off or is off work for any 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 35 of 36
19 

 For the foregoing reasons, I respectfully dissent. I would 

grant KLB’s petition for review in large part, concluding that 

KLB lawfully declined to provide the Competitive 

Information (with the exception of the supporting wage cost 

savings calculations), lawfully locked out employees and 

hired temporary replacements and lawfully discontinued 

health insurance for its locked-out employees. I would deny 

the Board’s cross application for enforcement except as 

otherwise hereinabove noted. See supra pp. 6 n.4, 15-16 n.7, 

18.

 

reason other than circumstances which expressly give rise to 

insurance benefits hereunder.” DA 462 (emphasis added). In other 

words, health insurance benefits last no later than “the end of the 

month following the month” after an employee is “off work for any 

reason” (e.g., locked out). Without explanation, the Board found 

that this language guaranteed KLB employees coverage until “the 

end of the month following the month” after being locked out. But 

the CBA provides “no later than,” not “no earlier than.” The Board 

failed to point to any other CBA provision to the contrary. See also 

Sherwin-Williams Co., 269 N.L.R.B. 678, 678 (1984) (employer 

lawfully declined to pay health insurance premiums for striking 

employees under CBA provision that required employer to pay 

monthly health insurance premiums only for employees “in active 

service”). 

Nor do COBRA rights change the analysis. While KLB’s 

decision to terminate its plan deprived employees of potential 

health insurance continuation coverage under COBRA, COBRA 

provides that continuation coverage is not required for a plan that 

normally employs “fewer than 20 employees on a typical business 

day.” 29 U.S.C. § 1161(b). KLB’s health plan covered only sixteen 

employees. 

USCA Case #11-1280 Document #1408112 Filed: 12/04/2012 Page 36 of 36