Source: https://supreme.justia.com/cases/federal/us/351/149/
Timestamp: 2019-04-22 20:01:14+00:00

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Justia › US Law › US Case Law › US Supreme Court › Volume 351 › Labor Board v. Truitt Mfg. Co.
Labor Board v. Truitt Mfg. Co.
In the circumstances of this case, where the employer claimed that it could not afford to pay higher wages but refused the union's request to produce financial data to substantiate this claim, the National Labor Relations Board was justified in finding that the employer had not bargained in good faith and, therefore, had violated § 8(a)(5) of the National Labor Relations Act. Pp. 351 U. S. 149-154.
The question presented by this case is whether the National Labor Relations Board may find that an employer has not bargained in good faith where the employer claims it cannot afford to pay higher wages but refuses requests to produce information substantiating its claim.
"[W]e were wanting anything relating to the Company's position, any records or what have you, books, accounting sheets, cost expenditures, what not, anything to back the Company's position that they were unable to give any more money."
this discussion, and the company declines to give you such information; you have no legal right to such."
On the basis of these facts, the National Labor Relations Board found that the company had "failed to bargain in good faith with respect to wages in violation of Section 8(a)(5) of the Act." 110 N.L.R.B. 856. The Board ordered the company to supply the union with such information as would "substantiate the Respondent's position of its economic inability to pay the requested wage increase." The Court of Appeals refused to enforce the Board's order, agreeing with respondent that it could not be held guilty of an unfair labor practice because of its refusal to furnish the information requested by the union. 224 F.2d 869. In Labor Board v. Jacobs Mfg. Co., 196 F.2d 680, the Second Circuit upheld a Board finding of bad faith bargaining based on an employer's refusal to supply financial information under circumstances similar to those here. Because of the conflict and the importance of the question, we granted certiorari. 350 U.S. 922.
"It is sufficient if the information is made available in a manner not so burdensome or time-consuming as to impede the process of bargaining. [Footnote 2]"
substantiation of the company's position requires no more than "reasonable proof."
"He did no more than take refuge in the assertion that the respondent's financial condition was poor; he refused either to prove his statement or to permit independent verification. This is not collective bargaining."
1 N.L.R.B. 837, 842-843. This was the position of the Board when the Taft-Hartley Act was passed in 1947, and has been its position ever since. [Footnote 6] We agree with the Board 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.
statutory obligation to bargain in good faith has been met. Since we conclude that there is support in the record for the conclusion of the Board here that respondent did not bargain in good faith, it was error for the Court of Appeals to set aside the Board's order and deny enforcement.
"SEC. 8. (a) It shall be an unfair labor practice for an employer --"
49 Stat. 452-453, as amended, 61 Stat. 140-142, 29 U.S.C. § § 158(a)(5).
Old Line Life Ins. Co., 96 N.L.R.B. 499, 503; Cincinnati Steel Castings Co., 86 N.L.R.B. 592, 593.
61 Stat. 154, 29 U.S.C. § 174(a)(1).
See Sherman, Employer's Obligation to Produce Data for Collective Bargaining, 35 Minn.L.Rev. 24; Dunlop, The Economics of Wage-Dispute Settlement, 12 Law & Contemp. Prob. 281, 290; What Kind of Information Do Labor Unions Want in Financial Statements?, 87 J. Accountancy 368; How Collective Bargaining Works (Twentieth Century Fund, 1942) 453.
Daily Labor Report No. 156: A4-A5 (Bureau of National Affairs, Aug. 12, 1954); 35 Lab.Rel.Rep. 106; Union Votes Wage Freeze to Aid Rice-Stix, St. Louis Globe-Democrat, Nov. 25, 1954, p. 1, col. 4; Studebaker Men Vote for Pay Cuts, N.Y. Times, Aug. 13, 1954, p. 1, col. 5.
See, e.g., Southern Saddlery Co., 90 N.L.R.B 1205, 1206-1207; McLean-Arkansas Lumber Co., 109 N.L.R.B. 1022, 1035-1038; Jacobs Manufacturing Co., 94 N.L.R.B. 1214, 1221-1222, enforced, 196 F.2d 680; and cases therein cited.
See Labor Board v. American Nat. Ins. Co., 343 U. S. 395, 343 U. S. 409-410.
MR. JUSTICE FRANKFURTER, whom MR. JUSTICE CLARK and MR. JUSTICE HARLAN join, concurring in part and dissenting in part.
"to bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree to a proposal or require the making of a concession. . . ."
61 Stat. 142, 29 U.S.C. § 158(d).
incompatible with stubbornness, or even with what, to an outsider, may seem unreasonableness. A determination of good faith or of want of good faith normally can rest only on an inference based upon more or less persuasive manifestations of another's state of mind. The previous relations of the parties, antecedent events explaining behavior at the bargaining table, and the course of negotiations constitute the raw facts for reaching such a determination. The appropriate inferences to be drawn from what is often confused and tangled testimony about all this makes a finding of absence of good faith one for the judgment of the Labor Board, unless the record as a whole leaves such judgment without reasonable foundation. See Universal Camera Corp. v. Labor Board, 340 U. S. 474.
An examination of the Board's opinion and the position taken by its counsel here disclose that the Board did not so conceive the issue of goof faith bargaining in this case. The totality of the conduct of the negotiation was apparently deemed irrelevant to the question; one fact alone disposed of the case.
"[I]t is settled law [the Board concluded] that, when an employer seeks to justify the refusal of a wage increase upon an economic basis, as did the Respondent herein, good faith bargaining under the Act requires that, upon request, the employer attempt to substantiate its economic position by reasonable proof."
"will be met if the respondent produces whatever relevant information it has to indicate whether it can or cannot afford to comply with the Union's demands."
196 F.2d 680, 684. This is a very far cry indeed from a ruling of law that failure to open a company's books establishes lack of good faith. Once good faith is found wanting, the scope of relief to be given by the Board is largely a question of administrative discretion. Neither Jacobs nor any other court of appeals' decision which has been called to our attention supports the rule of law which the Board has fashioned out of one thread drawn from the whole fabric of the evidence in this case.
had been violated. But how differently the Board there considered its function.
"Bargaining in good faith is a duty on both sides to enter into discussions with an open and fair mind and a sincere purpose to find a basis for agreement touching wages and hours and conditions of labor. In applying this definition of good faith bargaining to any situation, the Board examines the Respondent's conduct as a whole for a clear indication as to whether the latter has refused to bargain in good faith, and the Board usually does not rely upon any one factor as conclusive evidence that the Respondent did not genuinely try to reach an agreement."
The Board found other factors in the Southern Saddlery case. The employer had made no counterproposals or efforts to "compromise the controversy." Compare, McLean-Arkansas Lumber Co., Inc., 109 N.L.R.B. 1022. Such specific evidence is not indispensable, for a study of all the evidence in a record may disclose a mood indicative of a determination not to bargain. That is for the Board to decide. It is a process of inference-drawing, however, very different from the ultra vires lawmaking of the Board in this case.
Since the Board applied the wrong standard here, by ruling that Truitt's failure to supply financial information to the union constituted per se a refusal to bargain in good faith, the case should be returned to the Board. There is substantial evidence in the record which indicates that Truitt tried to reach an agreement. It offered a 2 1/2-cent wage increase, it expressed willingness to discuss with the union "at any time the problem of how our wages compare with those of our competition," and it continued throughout to meet and discuss the controversy with the union.
Because the record is not conclusive as a matter of law, one way or the other, I cannot join in the Court's disposition of the case. To reverse the Court of Appeals without remanding the case to the Board for further proceedings implies that the Board would have reached the same conclusion in applying the right rule of law that it did in applying a wrong one. I cannot make such a forecast. I would return the case to the Board so that it may apply the relevant standard for determining "good faith."
"The respondent contends that it was under no statutory duty to confer with the union after the second meeting, since all of the issues had been fully explored and the position of both parties expressed. Whether this was true, however, was a question of fact which the Board found adversely to the respondent. Since, at both the meetings, the respondent took the position that discussion of wage increases would be futile because it was financially unable to make them, and since it refused to discuss the other subjects at all, the Board was justified in concluding that the respondent had refused to bargain in good faith, as the Act requires. Collective bargaining in compliance with the statute requires more than virtual insistence upon a prejudgment that no agreement could be reached by means of a discussion."
Labor Board v. Jacobs Mfg. Co., 196 F.2d 680 at 683.

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