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Chemical Workers v. Pittsburgh Glass (full text) :: 404 U.S. 157 (1971) :: Justia U.S. Supreme Court Center Log In
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Chemical Workers v. Pittsburgh Glass 404 U.S. 157 (1971)
U.S. Supreme CourtChemical Workers v. Pittsburgh Glass, 404 U.S. 157 (1971)Allied Chemical & Alkali Workers of America, Local Union No. 1v. Pittsburgh Plate Glass Co., Chemical DivisionNo. 70-32Argued October 20, 1971Decided December 8, 1971*404 U.S. 157CERTIORARI TO THE UNITED STATES COURT OF APPEALS
1. Retirees' benefits are not, within the meaning of §§ 8(a)(5) and 8(d) of the NLRA, a mandatory subject of bargaining as "terms and conditions of employment" of the retirees. Pp. 404 U. S. 163-176. Page 404 U. S. 158
BRENNAN, J., delivered the opinion of the Court, in which BURGER, C.J., and STEWART, WHITE, MARSHALL, and BLACKMUN, JJ., joined. DOUGLAS, J., dissented. Page 404 U. S. 159
Under the National Labor Relations Act, as amended, mandatory subjects of collective bargaining include pension and insurance benefits for active employees, [Footnote 1] and an employer's mid-term unilateral modification of such benefits constitutes an unfair labor practice. [Footnote 2] This cause Page 404 U. S. 160 presents the question whether a mid-term unilateral modification that concerns, not the benefits of active employees, but the benefits of already retired employees, also constitutes an unfair labor practice. The National Labor Relations Board, one member dissenting, held that changes in retired employees' retirement benefits are embraced by the bargaining obligation, and that an employer's unilateral modification of them constitutes an unfair labor practice in violation of §§ 8(a)(5) and (1) of the Act. 177 N.L.R.B. 911 (1969). [Footnote 3] The Court of Appeals for the Sixth Circuit disagreed, and refused to enforce the Board's cease and desist order, 427 F.2d 936 (1970). We granted certiorari, 401 U.S. 907 (1971). We affirm the judgment of the Court of Appeals.
Since 1949, Local 1, Allied Chemical and Alkali Workers of America, has been the exclusive bargaining representative for the employees "working" on hourly rates of pay at the Barberton, Ohio, facilities of respondent Pittsburgh Plate Glass Co. [Footnote 4] In 1950, the Union and the Company negotiated an employee group health insurance plan in which, it was orally agreed, retired employees could participate by contributing the required Page 404 U. S. 161 premiums, to be deducted from their pension benefits. This program continued unchanged until 1962, except for an improvement unilaterally instituted by the Company in 1954 and another improvement negotiated in 1959.
In November, 1965, Medicare, a national health program, was enacted, 79 Stat. 291, 42 U.S.C. § 1395 et seq. The 1964 contract was still in effect, and the Union sought mid-term bargaining to renegotiate insurance benefits for retired employees. The Company responded in March, 1966, that, in its view, Medicare rendered the health insurance program useless because of a "non-duplication of benefits" provision in the Company's insurance policy, and stated, without negotiating any change, that it was planning to (a) reclaim the additional two-dollar monthly contribution as of the effective date of Medicare; (b) cancel the program for retirees; and (c) substitute the payment of the three-dollar monthly subscription fee for supplemental Medicare coverage for each retired employee. [Footnote 5] Page 404 U. S. 162
177 N.L.R.B. at 912. Moreover, "retirement status is a substantial connection to the bargaining unit, for it is the culmination and the product of years of employment." Id. at 914. Alternatively, the Board considered "bargaining about changes in retirement benefits for retired employees" as "within the contemplation of the statute because of the interest which active employees have in this subject. . . ." Id. at 912. Apparently in support of both theories, the Board noted that "[b]argaining on benefits for workers already retired is an established aspect of current labor-management relations." Id. at 916. The Board also held that the Page 404 U. S. 163 Company's "establishment of a fixed, additional option, in and of itself, changed the negotiated plan of benefits" contrary to §§ 8(d) and 8(a)(5) of the Act. Id. at 918. Accordingly, the Company was ordered to cease and desist from refusing to bargain collectively about retirement benefits and from making unilateral adjustments in health insurance plans for retired employees without first negotiating in good faith with the Union. The Company was also required to rescind, at the Union's request, any adjustment it had unilaterally instituted, and to mail and post appropriate notices. [Footnote 6]
49 Stat. 449, as amended, 29 U.S.C. § 151. To effectuate this policy, § 8(a)(5) provides that it is an unfair labor practice for an employer "to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section" 9(a). 49 Stat. 453, as amended, 29 U.S.C. § 158(a)(5). Section 8(d), in turn, defines "to bargain Page 404 U. S. 164 collectively" as
Together, these provisions establish the obligation of the employer to bargain collectively, "with respect to wages, hours, and other terms and conditions of employment," with "the representatives of his employees" designated or selected by the majority "in a unit appropriate for such purposes." This obligation extends only to the "terms and conditions of employment" of the employer's "employees" in the "unit appropriate for such purposes" that the union represents. See, e.g., Mine Workers v. Pennington, 381 U. S. 657, 381 U. S. 666 (1965); NLRB v. Borg-Warner Corp., 356 U. S. 342 (1958); Packard Co. v. NLRB, 330 U. S. 485 (1947); Phelps Dodge Corp. v. NLRB, 313 U. S. 177, 313 U. S. 192 (1941) (dictum); Pittsburgh Glass Co. v. NLRB, 313 U. S. 146 (1941). The Board found that benefits of already retired employees fell within these constraints on alternative theories. First, it held that pensioners are themselves "employees" and members of the bargaining unit, so that their benefits are a "term and condition" of their employment. [Footnote 7] Page 404 U. S. 165
427 F.2d at 942. The court reasoned, first,
49 Stat. 450, as amended, 29 U.S.C. § 152(3). Page 404 U. S. 166 We have repeatedly affirmed that the task of determining the contours of the term "employee" "has been assigned primarily to the agency created by Congress to administer the Act." NLRB v. Hearst Publications, 322 U. S. 111, 322 U. S. 130 (1944). See also Iron Workers v. Perko, 373 U. S. 701, 373 U. S. 706 (1963); NLRB v. Atkins & Co., 331 U. S. 398 (1947). But we have never immunized Board judgments from judicial review in this respect.
"the broad language of the Act's definitions, which in terms reject conventional limitations on such conceptions as 'employee,' . . . leaves no doubt that its applicability is to be determined broadly, in Page 404 U. S. 167 doubtful situations, by underlying economic facts rather than technically and exclusively by previously established legal classifications."
"An 'employee,' according to all standard dictionaries, according to the law as the courts have stated it, and according to the understanding of almost everyone, . . . means someone who works for another for hire. But in the case of National Labor Relations Board v. Hearst Publications, Inc., . . . the Board . . . held independent merchants who bought newspapers from the publisher and hired people to sell them to be 'employees.' The people the merchants hired to sell the papers were 'employees' of the merchants, but holding the merchants to be 'employees' of the publisher of the papers was most far-reaching. It must be presumed that, when Congress passed the Labor Act, it intended words it used to have the meanings that they had when Congress passed the act, not new meanings that, 9 years later, the Labor Board might think up. In the law, there always has been a difference, and a big difference, between 'employees' and 'independent contractors.' 'Employees' work for wages or salaries under direct supervision. . . . It is inconceivable that Congress, when it passed the act, authorized the Board to give to every word in the act whatever meaning it wished. On the contrary, Congress intended then, and it intends now, that the Board give to words not far-fetched meanings, but ordinary Page 404 U. S. 168 meanings."
177 N.L.R.B. at 913 (citations omitted). Yet all of these cases involved people who, unlike the pensioners here, were members of the active workforce available for hire, and, at least in that sense, could be identified as "employees." No decision under the Act is cited, and none to our knowledge exists, in which an individual who has ceased work without expectation of further employment has been held to be an "employee." Page 404 U. S. 169
Yet the rationale of Blassie is not at all in point. The question there was simply whether, under § 302(c)(5), retirees remain eligible for benefits of trust funds established Page 404 U. S. 170 during their active employment. The conclusion that they do was compelled by the fact that the contrary reading of the statute would have made illegal contributions to pension plans, which the statute expressly contemplates in subsections (A) and (C). [Footnote 10] No comparable situation exists in this case. Furthermore, there is no anomaly in the conclusion that retired workers are "employees" within § 302(c)(5) entitled to the benefits negotiated while they were active employees, but are not "employees" whose ongoing benefits are embraced by the bargaining obligation of § 8(a)(5). Contrary to the Board's assertion, the union's role in the administration of the fund is of a far different order from its duties as collective bargaining agent. To accept the Board's reasoning that the union's § 302(c)(5) responsibilities dictate the scope of the § 8(a)(5) collective Page 404 U. S. 171 bargaining obligation would be to allow the tail to wag the dog. [Footnote 11]
49 Stat. 453, as amended, 29 U.S.C. § 159(b). We have always recognized that, in making these determinations, the Board is accorded broad discretion. See NLRB v. Hearst Publications, 322 U.S. at 322 U. S. 132-135; Pittsburgh Glass Co. v. NLRB, 313 U. S. 146 (1941). Moreover, the Board's findings of fact, if supported by substantial evidence, are conclusive. National Labor Relations Act, § 10(e), 49 Stat. 454, as amended, 29 U.S.C. § 160(e). But the Board's powers in respect of unit determinations are not without limits, and if its Page 404 U. S. 172 decision "oversteps the law," Packard Co. v. NLRB, 330 U.S. at 330 U. S. 491, it must be reversed.
Pittsburgh Glass Co. v. NLRB, supra, at 313 U. S. 165. The Board must also exercise care that the rights of employees under § 7 of the Act "to self-organization . . . [and] to bargain collectively through representatives of their own choosing" are duly respected. In line with these standards, the Board regards as its primary concern in resolving unit issues "to group together only employees who have substantial mutual interests in wages, hours, and other conditions of employment." 15 NLRB Ann.Rep. 39 (1950). Such a mutuality of interest serves to assure the coherence among employees necessary for efficient collective bargaining and at the same time to prevent a functionally Page 404 U. S. 173 distinct minority group of employees from being submerged in an overly large unit. See Kalamazoo Paper Box Corp., 136 N.L.R.B. 134, 137 (1962).
But we need not rely on our own assessment of the probable consequences of including retirees in the bargaining unit to conclude that the resulting unit would Page 404 U. S. 174 be inappropriate. The Board itself has previously recognized that retirees do not have a sufficient interest to warrant participation in the election of a collective bargaining agent. In Public Service Corp. of New Jersey, 72 N.L.R.B. 224, 229-230 (1947), for example, the Board stated:
The Board argues, however, that the pensioners' ineligibility to vote is not dispositive of their right to membership in the bargaining unit, since the franchise and the right to membership depend upon different levels of interest in the unit. [Footnote 14] Yet in W. D. Byron & Sons of Maryland, Inc., 55 N.L.R.B. 172, 174-175 (1944), which the Board found controlling in Public Service Corp. of New Jersey, see 72 N.L.R.B. at 230 n. 10, the Board not merely held ineligible to vote, but expressly Page 404 U. S. 175 excluded from the bargaining unit pensioners who had little expectation of further employment. In any event, it would be clearly inconsistent with the majority rule principle of the Act to deny a member of the unit at the time of an election a voice in the selection of his bargaining representative. [Footnote 15] The Board's own holdings thus compel the conclusion that a unit composed of active and retired workers would be inappropriate.
Third. The Board found that bargaining over pensioners' rights has become an established industrial practice. Page 404 U. S. 176 But industrial practice cannot alter the conclusions that retirees are neither "employees" nor bargaining unit members. The parties dispute whether a practice of bargaining over pensioners' benefits exists and, if so, whether it reflects the views of labor and management that the subject is not merely a convenient but a mandatory topic of negotiation. [Footnote 16] But even if industry commonly regards retirees' benefits as a statutory subject of bargaining, that would at most, as we suggested in Fibreboard Corp. v. NLRB, 379 U. S. 203, 379 U. S. 211 (1964), reflect the interests of employers and employees in the subject matter as well as its amenability to the collective bargaining process; it would not be determinative. Common practice cannot change the law and make into bargaining unit "employees" those who are not
Even if pensioners are not bargaining unit "employees," are their benefits, nonetheless, a mandatory subject of collective bargaining as "terms and conditions of employment" of the active employees who remain in the unit? The Board held, alternatively, that they are, on the ground that they "vitally" affect the "terms and conditions of employment" of active employees principally by influencing the value of both their current and future benefits. 177 N.L.R.B. at 915. [Footnote 17] The Board explained: Page 404 U. S. 177
Ibid. Furthermore, the actual value of future benefits depends upon contingencies, such as inflation and changes in public law, which the parties cannot adequately anticipate and over which they have little or no control. By establishing a practice of representing Page 404 U. S. 178 retired employees in resolving those contingencies as they arise, active workers can insure that their own retirement benefits will survive the passage of time. This, in turn, the Board contends, facilitates the peaceful settlement of disputes over active employees' pension plans. The Board's arguments are not insubstantial, but they do not withstand careful scrutiny.
Section 8(d) of the Act, of course, does not immutably fix a list of subjects for mandatory bargaining. See, e.g., Fibreboard Corp. v. NLRB, supra, at 379 U. S. 220-221 (STEWART, J., concurring); Richfield Oil Corp. v. NLRB, 97 U.S.App.D.C. 383, 389-390, 231 F.2d 717, 723-724 (1956). But it does establish a limitation against which proposed topics must be measured. In general terms, the limitation includes only issues that settle an aspect of the relationship between the employer and employees. See, e.g., NLRB v. Borg-Warner Corp., 356 U. S. 342 (1958). Although normally matters involving individuals outside the employment relationship do not fall within that category, they are not wholly excluded. In Teamsters Union v. Oliver, 358 U. S. 283 (1959), for example, an agreement had been negotiated in the trucking industry, establishing a minimum rental that carriers would pay to truck owners who drove their own vehicles in the carriers' service in place of the latter's employees. Without determining whether the owner-drivers were themselves "employees," we held that the minimum rental was a mandatory subject of bargaining, and hence immune from state antitrust laws, because the term "was integral to the establishment of a stable wage structure for clearly covered employee-drivers." United States v. Drum, 368 U. S. 370, 368 U. S. 382-383, n. 26 (1962). [Footnote 18] Similarly, Page 404 U. S. 179 in Fibreboard Corp. v. NLRB, supra, at 379 U. S. 215, we held that
The Board urges that Oliver and Fibreboard provide the principle governing this cause. The Company, on the other hand, would distinguish those decisions on the ground that the unions there sought to protect employees from outside threats, not to represent the interests of third parties. We agree with the Board that the principle of Oliver and Fibreboard is relevant here; in each case, the question is not whether the third-party concern is antagonistic to or compatible with the interests of bargaining unit employees, but whether it vitally affects the "terms and conditions" of their employment. [Footnote 19] But we disagree with the Board's assessment of the significance of a change in retirees' benefits to the "terms and conditions of employment" of active employees. Page 404 U. S. 180
The mitigation of future uncertainty and the facilitation of agreement on active employees' retirement plans, that the Board said would follow from the union's representation of pensioners, are equally problematical. To be sure, the future retirement benefits of active workers are part and parcel of their overall compensation, and hence a well established statutory subject of bargaining. Moreover, provisions of those plans to guard against future contingencies are equally subsumed under the collective bargaining obligation. Under the Board's Page 404 U. S. 181 theory, active employees undertake to represent pensioners in order to protect their own retirement benefits, just as if they were bargaining for, say, a cost of living escalation clause. But there is a crucial difference. Having once found it advantageous to bargain for improvements in pensioners' benefits, active workers are not forever thereafter bound to that view or obliged to negotiate in behalf of retirees again. [Footnote 20] To the contrary, they are free to decide, for example, that current income is preferable to greater certainty in their own retirement benefits or, indeed, to their retirement benefits altogether. By advancing pensioners' interests now, active employees, therefore, have no assurance that they will be the beneficiaries of similar representation when they retire. The insurance against future contingencies Page 404 U. S. 182 that they may buy in negotiating benefits for retirees is thus a hazardous and, therefore, improbable investment, far different from a cost of living escalation clause that they could contractually enforce in court. See n 20, supra. We find, accordingly, that the effect that the Board asserts bargaining in behalf of pensioners would have on the negotiation of active employees' retirement plans is too speculative a foundation on which to base an obligation to bargain.
Meat Cutters v. Jewel Tea, 381 U. S. 676, 381 U. S. 685-686 (1965). The Board's holding in this cause, however, depends on the application of law to facts, and the legal standard to be applied is ultimately for the courts to decide and enforce. We think that, in holding the "terms and conditions of employment" of active employees to be vitally affected by pensioners' benefits, the Board here simply neglected to give the adverb its ordinary meaning. Cf. NLRB v. Brown, 380 U. S. 278, 380 U. S. 292 (1965). Page 404 U. S. 183
except upon (1) timely notice to the other party, (2) an offer to meet and confer "for the purpose of negotiating a new contract or a contract containing the proposed modifications," (3) timely notice to the Federal Mediation and Conciliation Service and comparable state or territorial agencies of the existence of a "dispute," and (4) continuation "in full force and effect [of] . . . all the terms and conditions of the existing contract . . . until [its] expiration date. . . ." [Footnote 21] Page 404 U. S. 184 The Board's trial examiner ruled that the Company's action in offering retirees a change in their health plan did not amount to a "modification" of the collective bargaining agreement in violation of § 8(d), since the pensioners had merely been given an additional option that they were free to accept or decline a they saw fit. Page 404 U. S. 185 The Board rejected that conclusion on the ground that there were several possible ways of adjusting the negotiated plan to the Medicare provisions and the Company "modified" the contract by unilaterally choosing one of them. The Company now urges, in effect, that we adopt the views of the trial examiner. We need not resolve, however, whether there was a "modification" within the meaning of § 8(d), because we hold that, even if there was, a "modification" is a prohibited unfair labor practice only when it changes a term that is a mandatory, rather than a permissive, subject of bargaining.
Mastro Plastics Corp. v. NLRB, 350 U. S. 270, 350 U. S. 285 (1956) (quoting United States v. Boisdore's Heirs, 8 How. 113, 49 U. S. 122). See also NLRB v. Lion Oil Co., 352 U. S. 282, 352 U. S. 288 (1957). Seen in that light, § 8(d) embraces only mandatory topics of bargaining. The provision begins by defining "to bargain collectively" as meeting and conferring "with respect to wages, hours, and other terms and conditions of employment." It then goes on to state that "the duty to bargain collectively shall also mean" that mid-term unilateral modifications and terminations are prohibited. Although this part of the section is introduced by a "proviso" clause, see n 21, supra, it quite plainly is to be construed in pari materia with the preceding definition. Accordingly, just as § 8(d) defines the obligation to bar Page 404 U. S. 186 gain to be with respect to mandatory terms alone, so it prescribes the duty to maintain only mandatory terms without unilateral modification for the duration of the collective bargaining agreement. [Footnote 22]
The relevant purpose of § 8(d) that emerges from the legislative history of the Act together with the text of the provision confirms this understanding. The section stems from the 1947 revision of the Act, an important theme of which was to stabilize collective bargaining agreements. The Senate bill, in particular, contained provisions in §§ 8(d) and 301(a) to prohibit unilateral mid-term modifications and terminations and to confer federal jurisdiction over suits for contract violations. See S. 1126, 80th Cong., 1st Sess., §§ 8(d), 301(a). The bill also included provisions to make it an unfair labor practice for an employer or labor organization "to violate the terms of a collective bargaining agreement." Id. §§ 8(a)(6), 8(b)(5). In conference the Senate's proposed §§ 8(d) and 301(a) were adopted with relatively few changes. See H.R.Conf.Rep. No. 510, supra, at 34-35, 65-66. The provisions to make contract violations an unfair labor practice, on the other hand, were rejected with the explanation that "[o]nce parties have made a collective bargaining contract the Page 404 U. S. 187 enforcement of that contract should be left to the usual processes of the law and not to the National Labor Relations Board." Id. at 42. The purpose of the proscription of unilateral mid-term modifications and terminations in § 8(d) cannot be, therefore, simply to assure adherence to contract terms. As far as unfair labor practice remedies are concerned, that goal was to be achieved through other unfair labor practice provisions that were rejected in favor of customary judicial procedures. See Dowd Box Co. v. Courtney, 368 U. S. 502, 368 U. S. 510-513 (1962).
If that is correct, the distinction that we draw between mandatory and permissive terms of bargaining fits the statutory purpose. By once bargaining and agreeing on a permissive subject, the parties, naturally, do not make the subject a mandatory topic of future bargaining. When a proposed modification is to a permissive term, therefore, the purpose of facilitating accord on the proposal is not at all in point, since the parties are not Page 404 U. S. 188 required under the statute to bargain with respect to it. The irrelevance of the purpose is demonstrated by the irrelevance of the procedures themselves of § 8(d). Paragraph (2), for example, requires an offer
The Court of Appeals below seems to have read the Board's decision as holding that retirees might be considered "employees" under the Act, but not as finding that the retirees in this case were. See 427 F.2d at 944 n. 14. We do not read the Board's decision that way. The Board said: