Opinion ID: 512568
Heading Depth: 2
Heading Rank: 2

Heading: The Business Justification

Text: 56 We accept the NLRB's position that, although not inherently destructive, the Company's conduct in this case could have adversely affected employee rights to some extent, Great Dane, 388 U.S. at 34, 87 S.Ct. at 1798, and that it should therefore be treated as having a comparatively slight impact on employee rights. Accordingly, our task is not yet over; in view of American Ship Building, however, what remains is quite simple. 57 In order to avoid liability under sections 8(a)(1) and (3), an employer whose conduct has a comparatively slight adverse effect on the rights of its employees must still come forward with a legitimate and substantial business justification[ ] for its actions. Id. In this case, the Board found, and the Union does not dispute, that the Company's sole purpose in locking out its employees and continuing to operate was to secure a new collective bargaining agreement on favorable terms. As the Board found in Harter, because the employer's ability to maintain a lockout is enhanced when it continues to operate, the use of replacement workers serves precisely the same purpose served by the lockout, i.e., bringing economic pressure to bear in support of a legitimate bargaining position. 280 N.L.R.B. No. 71 at 8. 58 This purpose, this business justification, is, as the Board correctly noted, unassailable in light of American Ship Building. In that case, the Court expressly stated that, if the employer's conduct is not inher ently destructive of employee rights, and if it is not motivated by antiunion animus, then there is no violation of the Labor Act when the employer's purpose is merely to bring about a settlement of a labor dispute on favorable terms. 380 U.S. at 313, 85 S.Ct. at 965. At the conclusion of that opinion, the Court again indicated that bringing economic pressure to bear in support of [a] legitimate bargaining position is a business justification sufficient to support an employer action that does not have an inherently destructive impact on employee rights. Id. at 318, 85 S.Ct. at 967. 59 To be sure, the employer in American Ship Building did not choose to continue its operations during the lock-out. But as the Board argues to us, [t]hat an employer chooses to apply additional pressure by continuing to operate its business ... does not render invalid or insubstantial its otherwise substantial and legitimate business justification. Therefore, we find that the Company's conduct in this case was supported by a legitimate and substantial business justification within the meaning of Great Dane. 60 This conclusion, we believe, is buttressed by the Court's decision in Brown. In that case, as we mentioned above, the stated justification was to preserve the integrity of the multiemployer bargaining group. But as NLRB Chairman Miller cogently observed in Inter-Collegiate Press, 199 N.L.R.B. 177, 179 (1972) (concurring opinion), the employers' defensive business justification in Brown was really no different from the employer's offensive business justification in American Ship Building: [T]he legitimate interest of the employer in [Brown ] was not the preservation of some ultimate social good, but purely and simply was the interest in maintaining, along with other relatively small employers, the added economic muscle supplied by their joint action. Thus, in entering into a multiemployer group, the employers' motive was simply to strengthen their bargaining position; certainly, then, their sole purpose in trying to preserve the integrity of that group was, at bottom, to bring greater economic pressure to bear in support of their bargaining position. 61 In fact, we believe that, upon examination, the distinction between offensive and defensive tactics is ultimately unavailing. The Supreme Court has never adopted it, even when it reviewed Board decisions couched in those terms. See, e.g., The American Ship Building Co., 142 N.L.R.B. 1362, 1364 (1963), rev'd, 380 U.S. 300, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965). As Professor Meltzer has observed, moreover, whatever the label affixed to a particular case, the fact remains that the defensive [tactic] has its primary significance as an attempt to improve the employer's bargain. Meltzer, Lockouts Under the LMRA: New Shadows on an Old Terrain, 28 U.Chi.L.Rev. 614, 621 (1961). It is also difficult, if not impossible, as an administrative matter to discern whether an employer acts offensively to exercise bargaining power, or defensively to deflect the exercise of bargaining power against it. See Meltzer, The Lockout Cases, 1965 Sup.Ct.Rev. 87, 101. The particular objectives are but branches of the same tree, united by the employer's single root purpose of securing for itself the best possible bargain. Given the inherent artificiality of trying to separate these objectives, it would be unfortunate to make substantial consequences, such as liability under the Labor Act, turn on the labels offensive and defensive. 62 Finally, in concluding that the use of temporary replacements during an otherwise lawful lockout is not a violation of the Labor Act, we are not unmindful of the principle of NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333, 58 S.Ct. 904, 82 L.Ed. 1381 (1938). In that case, the court stated for the first time that it is not an unfair labor practice for an employer to replace striking workers with permanent replacements in order to continue its business operations. As a practical matter, it seems generally desirable to attach the same legal consequences to the use of replacements after an impasse in bargaining, regardless of whether it follows a lawful lockout or an economic strike. If the ability to use replacements depends upon whether there has been a strike or a lockout, then 63 an employer convinced of the inevitability of a test of strength may seek to provoke a strike in order to preserve his option legally to employ replacements. Such tactics might poison the atmosphere more than a candid resort to a lockout and might also create bargaining gaps that might otherwise be avoided in the bargaining process. 64 Meltzer, The Lockout Cases, supra p. 767, at 104-105. Of course, by proscribing bad faith bargaining, the Labor Act limits the lengths to which an employer may go in order to provoke a strike; but there is no reason to create an incentive for an employer artfully to precipitate a strike in order to achieve what it cannot achieve with a lockout. 65 We do not mean to suggest that a lockout followed by permanent replacements would necessarily be a lawful tactic under the Labor Act; we express no opinion on that question, as it is not before us today, except to note that it raises somewhat different concerns than those suggested by a strike with permanent replacements. Although it may be possible for an employer to provoke a strike in a particular case, it is still the employees who must decide whether to resort to that tactic. If the labor market is such that an employer might be able to find permanent replacements, then employees may choose not to strike, no matter what the provocation. The decision to lock out, on the other hand, is entirely in the hands of the employer. Therefore, as Professor Meltzer has noted, a lockout, followed by permanent replacements, might too easily become a device for union busting, successfully disguised as an effort to protect the employer's bargaining position and his legitimate interest in maintaining operations. Meltzer, The Lockout Cases, supra p. 767, at 104.