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Labor Board Vs Katz - Citation 100334 - Court Judgment | LegalCrystal
Labor Board Vs. Katz - Court Judgment
LegalCrystal Citation legalcrystal.com/100334
Decided On May-21-1962
Case Number 369 U.S. 736
Respondent Katz
labor board v. katz - 369 u.s. 736 (1962) u.s. supreme court labor board v. katz, 369 u.s. 736 (1962) labor board v. katz no. 222 argued march 22, 1962 decided may 21, 1962 369 u.s. 736 certiorari to the united states court of appeals for the second circuit syllabus while bona fide contract negotiations with a union representing its employees were being carried on, the employer, unilaterally and without first consulting the union, put into effect a new system of automatic wage increases, changes in sick leave benefits, and numerous merit increases, although such matters were subjects of the pending contract negotiations. held: by so doing, the employer violated the duty "to bargain collectively".....
Labor Board v. Katz - 369 U.S. 736 (1962)
U.S. Supreme Court Labor Board v. Katz, 369 U.S. 736 (1962)
Labor Board v. Katz
Held: by so doing, the employer violated the duty "to bargain collectively" imposed by § 8(a)(5) of the National Labor Relations Act. Pp. 369 U. S. 737 -748.
(a) On the record in this case, the Labor Board was justified in finding that the employer's unilateral action was taken before the contract negotiations were discontinued, and before the existence of any possible impasse. Pp. 369 U. S. 741 -742.
(b) Even in the absence of a finding of over-all subjective bad faith, an employer's unilateral change in conditions of employment under negotiation violates § 8(a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) as much as would a flat refusal to negotiate. Pp. 369 U. S. 742 -743.
(c) The unilateral changes in sick leave benefits plainly frustrated the statutory objective of establishing working conditions through collective bargaining and violated § 8(a)(5). P. 369 U. S. 744 .
(d) The employer's grant of wage increases greater than any he had ever offered the union at the bargaining table was necessarily inconsistent with a sincere desire to conclude an agreement with the union, and it violated § 8(a)(5). Pp. 369 U. S. 744 -745.
(e) The employer's unilateral action in granting discretionary merit increases to 20 employees was tantamount to an outright refusal to negotiate on that subject, and it violated § 8(a)(5). Pp. 369 U. S. 745 -747.
(f) Labor Board v. Insurance Agents' Union, 361 U. S. 477 , distinguished. Pp. 369 U. S. 747 -748.
289 F.2d 700, reversed.
Page 369 U. S. 737
It is a violation of the duty "to bargain collectively" imposed by § 8(a)(5) of the National Labor Relations Act [ Footnote 1 ] for an employer, without first consulting a union with which it is carrying on bona fide contract negotiations, to institute changes regarding matters which are subjects of mandatory bargaining under § 8(d) and which are in fact under discussion? [ Footnote 2 ] The Labor Board answered the question affirmatively in this case, in a decision which expressly disclaimed any finding that the totality of the respondents' conduct manifested bad faith in the pending negotiations. [ Footnote 3 ] 126 N.L.R.B.
Page 369 U. S. 738
288. A divided panel of the Court of Appeals for the Second Circuit denied enforcement of the Board's cease and desist order, finding in our decision in Labor Board v. Insurance Agents' Union, 361 U. S. 477 , a broad rule that the statutory duty to bargain cannot be held to be violated, when bargaining is in fact being carried on, without a finding of the respondent's subjective bad faith in negotiating. 289 F.2d 700. [ Footnote 4 ] The Court of Appeals said:
289 F.2d at 702-703. We granted certiorari, 368 U.S. 811, in order to consider whether the Board's decision and order were contrary to Insurance Agents. We find nothing in the Board's decision inconsistent with Insurance Agents, and hold that
Page 369 U. S. 739
On July 11, 1956, the union sent identical letters to each of the six companies, requesting collective bargaining. Negotiations were invited on either an individual or "association-wide" [ Footnote 5 ] basis, with the reservation that wage rates and increases would have to be discussed with each employer separately. A follow-up letter of July 19, 1956, repeated the request for contract negotiations and enumerated proposed subjects for discussion. Included were merit increases, general wage levels and increases, and a sick leave proposal.
The first meeting between the company and the union took place on August 30, 1956. On this occasion, as at the ten other conferences held between October 2, 1956, and May 13, 1957, all six companies were in attendance
Page 369 U. S. 740
and represented by the same counsel. [ Footnote 6 ] It is undisputed that the subject of merit increases was raised at the August 30, 1956, meeting although there is an unresolved conflict as to whether an agreement was reached on joint participation by the company and the union in merit reviews, or whether the subject was simply mentioned and put off for discussion at a later date. It is also clear that proposals concerning sick leave were made. Several meetings were held during October, and one in November, at which merit raises and sick leave were each discussed on at least two occasions. It appears, however, that little progress was made.
Meanwhile, on April 16, 1957, the union had filed the charge upon which the General Counsel's complaint later issued. As amended and amplified at the hearing and construed by the Board, the complaint's charge of unfair
Page 369 U. S. 741
labor practices particularly referred to three acts by the company: unilaterally granting numerous merit increases in October, 1956, and January, 1957; unilaterally announcing a change in sick leave policy in March, 1957; and unilaterally instituting a new system of automatic wage increases during April, 1957. As the ensuing litigation has developed, the company has defended against the charges along two fronts: first, it asserts that the unilateral changes occurred after a bargaining impasse had developed through the union's fault in adopting obstructive tactics. [ Footnote 7 ] According to the Board, however,
"the evidence is clear that the Respondent undertook its unilateral
Page 369 U. S. 742
actions before negotiations were discontinued in May, 1957, or before, as we find on the record, the existence of any possible impasse."
126 N.L.R.B. at 289-290. There is ample support in the record considered as a whole for this finding of fact, which is consistent with the Examiner's Intermediate Report, 126 N.L.R.B. at 295-296, and which the Court of Appeals did not question. [ Footnote 8 ]
289 F.2d at 709. [ Footnote 9 ]
The duty "to bargain collectively" enjoined by § 8(a)(5) is defined by § 8(d) as the duty to "meet . . . and confer in good faith with respect to wages, hours, and other terms
Page 369 U. S. 743
and conditions of employment." Clearly, the duty thus defined may be violated without a general failure of subjective good faith, for there is no occasion to consider the issue of good faith if a party has refused even to negotiate in fact -- "to meet . . . and confer" -- about any of the mandatory subjects. [ Footnote 10 ] A refusal to negotiate in fact as to any subject which is within § 8(d), and about which the union seeks to negotiate, violates § 8(a)(5) though the employer has every desire to reach agreement with the union upon an over-all collective agreement, and earnestly and in all good faith bargains to that end. We hold that an employer's unilateral change in conditions of employment under negotiation is similarly a violation of § 8(a)(5), for it is a circumvention of the duty to negotiate which frustrates the objectives of § 8(a)(5) much as does a flat refusal. [ Footnote 11 ]
Page 369 U. S. 744
Other considerations appear from consideration of the respondents' unilateral action in increasing wages. At the April 4, 1957, meeting, the employers offered, and the union rejected, a three-year contract with an immediate
Page 369 U. S. 745
across-the-board increase of $7.50 per week, to be followed at the end of the first year and again at the end of the second by further increases of $5 for employees earning less than $90 at those times. Shortly thereafter, without having advised or consulted with the union, the company announced a new system of automatic wage increases whereby there would be an increase of $5 every three months up to $74.99 per week; an increase of $5 every six months between $75 and $90 per week; and a merit review every six months for employees earning over $90 per week. It is clear at a glance that the automatic wage increase system which was instituted unilaterally was considerably more generous than that which had shortly theretofore been offered to and rejected by the union. Such action conclusively manifested bad faith in the negotiations. Labor Board v. Crompton-Highland Mills, 337 U. S. 217 , and so would have violated § 8(a)(5) even on the Court of Appeals' interpretation, though no additional evidence of bad faith appeared. An employer is not required to lead with his best offer; he is free to bargain. But, even after an impasse is reached, he has no license to grant wage increases greater than any he has ever offered the union at the bargaining table, for such action is necessarily inconsistent with a sincere desire to conclude an agreement with the union. [ Footnote 12 ]
The respondents' third unilateral action related to merit increases, which are also a subject of mandatory bargaining. Labor Board v. J. H. Allison & Co., 165 F.2d 766. The matter of merit increases had been raised at three of the
Page 369 U. S. 746
conferences during 1956, but no final understanding had been reached. In January, 1957, the company, without notice to the union, granted merit increases to 20 employees out of the approximately 50 in the unit, the increases ranging between $2 and $10. [ Footnote 13 ] This action too must be viewed as tantamount to an outright refusal to negotiate on that subject, and therefore as a violation of § 8(a)(5), unless the fact that the January raises were in line with the company's longstanding practice of granting quarterly or semiannual merit reviews -- in effect, were a mere continuation of the status quo -- differentiates them from the wage increases and the changes in the sick leave plan. We do not think it does. Whatever might be the case as to so-called "merit raises" which are, in fact, simply automatic increases to which the employer has already committed himself, the raises here in question were in no sense automatic, but were informed by a large measure of discretion. There simply is no way in such case for a union to know whether or not there has been a substantial departure from past practice, and therefore the union may properly insist that the company
Page 369 U. S. 747
negotiate as to the procedures and criteria for determining such increases. [ Footnote 14 ]
It is apparent from what we have said why we see nothing in Insurance Agents contrary to the Board's decision. The union in that case had not in any way whatever foreclosed discussion of any issue, by unilateral actions or otherwise. [ Footnote 15 ] The conduct complained of consisted of partial strike tactics designed to put pressure on the employer to come to terms with the union negotiators. We held that Congress had not, in § 8(b)(3), the counterpart of § 8(a)(5), empowered the Board to pass judgment on the legitimacy of any particular economic weapon used in support of genuine negotiations. But the Board is authorized to order the cessation of behavior which is, in effect, a refusal to negotiate, or which directly obstructs or inhibits the actual process of discussion, or which reflects a cast of mind against reaching agreement. Unilateral action by an employer without prior discussion with the union does amount to a refusal to negotiate about the affected conditions of employment under negotiation, and must, of necessity, obstruct bargaining, contrary to the congressional policy. It will often disclose an unwillingness to agree with the union. It will rarely be justified by any reason of substance. It follows that the Board may hold such unilateral action to be an unfair labor practice in violation of § 8(a)(5) without also finding the employer guilty of over-all subjective bad faith. While
Page 369 U. S. 748
we do not foreclose the possibility that there might be circumstances which the Board could or should accept as excusing or justifying unilateral action, no such case is presented here. [ Footnote 16 ]
See Labor Board v. Wooster Borg-Warner Corp., 356 U. S. 342 , 356 U. S. 348 -349.
The Examiner rejected the company's offer to prove union-instigated slowdowns. But such proof would not have justified the company's refusal to bargain. Since, as we held in Labor Board v. Insurance Agents' Union, 361 U. S. 477 , the Board may not brand partial strike activity as illegitimate and forbid its use in support of bargaining, an employer cannot be free to refuse to negotiate when the union resorts to such tactics. Engaging in partial strikes is not inherently inconsistent with a continued willingness to negotiate; and, as long as there is such willingness and no impasse has developed, the employer's obligation continues.
See Universal Camera Corp. v. Labor Board, 340 U. S. 474 .
Compare Medo Photo Supply Corp. v. Labor Board, 321 U. S. 678 ; May Department Stores v. Labor Board, 326 U. S. 376 ; Labor Board v. Crompton-Highland Mills, 337 U. S. 217 .
The Court expressly left open the question which would be raised by a union's attempt to impose new working conditions unilaterally. 361 U.S. at 361 U. S. 496 -497, n. 28.
The company urges that, because of the lapse of time between the occurrence of the unfair labor practices and the Board's final decision and order, and because the union was repudiated by the employees subsequently to the events recounted in this opinion, enforcement should be either denied altogether or conditioned on the holding of a new election to determine whether the union is still the employees' choice as a bargaining representative. The argument has no merit. Franks Bros. Co. v. Labor Board, 321 U. S. 702 ; Labor Board v. P. Lorillard Co., 314 U. S. 512 ; Labor Board v. Mexia Textile Mills, Inc., 339 U. S. 563 , 339 U. S. 568 . Inordinate delay in any case is regrettable, but Congress has introduced no time limitation into the Act except that in § 10(b).