Opinion ID: 196952
Heading Depth: 3
Heading Rank: 1

Heading: Relevance of the Planned Merger.

Text: relevancy objection to the compulsory sharing of merger-related information is painted with too broad a brush. Whatever generalities may pertain to proposed mergers in the abstract, the concrete (and somewhat unusual) factual circumstances surrounding this proposed merger afford substantial evidence adequate to support the Board's order. To be sure, certain management actions that ultimately may have a significant impact on the terms and conditions of employment within the bargaining unit are nonetheless beyond the purview of collective bargaining. In a much-quoted turn of phrase, Justice Stewart referred to these actions as comprising the core of entrepreneurial control. Fibreboard Paper Prods. Co. v. NLRB, 379 U.S. 203, 223 (1964) (Stewart, J., concurring). The thesis holds that important management decisions, such as choosing a marketing strategy or liquidating lines of business, are not concinnous subjects for mandatory collective bargaining because they are fundamental to the basic direction of [the] corporate enterprise. Id. The components forming this core of entrepreneurial control are often classified as comprising 11 matters that are akin to the decision whether to be in business at all. First National Maint. Corp. v. NLRB, 452 U.S. 666, 676 (1981). And while such matters are not primarily addressed to conditions of employment, they may have effects sometimes profound effects upon those conditions. Although the content of this core of entrepreneurial control eludes a precise description, see United Food & Commercial Workers, Etc., v. NLRB, 1 F.3d 24, 30-33 (D.C. Cir. 1993), it is plain that the decision to merge two unrelated corporate entities falls within it. See International Ass'n of Machinists & Aerospace Workers v. Northeast Airlines, Inc., 473 F.2d 549, 556-57 (1st Cir.), cert. denied, 409 U.S. 845 (1972).6 Thus, MNA had no right either to veto the decision to merge or to request information for the purpose of intruding into the negotiations between the merger partners (SPHS and HCAHR). Still, there is an important distinction between the right to bargain about a core entrepreneurial business decision (a right which a union does not possess) and the right to bargain about the effects of that decision on employees within a bargaining unit (a right which, depending upon the overall 6We think that mergers involving independent entities are to be distinguished from internal consolidations involving a combination or realignment of subsidiaries owned by a common parent. Such internal consolidations do not require the same degree of secrecy, flexibility and quickness that, according to Northeast Airlines, 473 F.2d at 557, renders arm's-length mergers not easily susceptible of collective bargaining. In any event, the Hospitals do not contend that the decision to consolidate internally, as opposed to the decision to merge with an external partner, comes within the core of entrepreneurial control, and, accordingly, we express no opinion on the topic. 12 circumstances, a union may possess). After all, subject to considerations such as relevancy and immediacy, unions generally enjoy the right to bargain over the effects of decisions which are not themselves mandatory subjects of collective bargaining. See First National Maint., 452 U.S. at 681; Northeast Airlines, 473 F.2d at 557. It follows that, even when a particular managerial decision is not itself a mandatory subject of bargaining, the decision's forecasted impact on salaries, employment levels, or other terms and conditions of employment may constitute a mandatory subject of collective bargaining. See, e.g., Holly Farms Corp. v. NLRB, 48 F.3d 1360, 1368 (4th Cir. 1995), aff'd, 116 S. Ct. 1396 (1996); New Eng. Newspapers, 856 F.2d at 413; Penntech Papers, Inc. v. NLRB, 706 F.2d 18, 26 (1st Cir.), cert. denied, 464 U.S. 892 (1983). Embracing this tenet, MNA contends that its requests for merger-related information were relevant to effects bargaining, and therefore should have been honored. In an effort to parry the union's thrust, the Hospitals offer two reasons why MNA could not properly predicate these information requests on a desire to engage in effects bargaining. They suggest that (1) such bargaining always must await the culmination of a pending merger (and here, the parties have not finalized the transaction and may never do so), and (2) even if a pending merger can sometimes be an appropriate subject of effects bargaining, the prospects of this particular merger are too dim and its outline too amorphous to warrant a finding of relevancy 13 (especially since restraint-of-trade laws may limit any detailed discussions of operating efficiencies until the merger is consummated). In our view, neither suggestion is convincing. The Hospitals' contention that effects bargaining (or, more accurately, the gathering of information preliminary to effects bargaining) always must await the consummation of a merger depends almost entirely on their reading of our decision in Northeast Airlines. That decision however, is incapable of carrying the cargo that the Hospitals load on it. For one thing, the question that we discussed in Northeast Airlines arose in a materially different legal posture. There we affirmed the district court's denial of an injunction sought by a union as a means of preventing the merger of the employer into an independent company. See Northeast Airlines, 473 F.2d at 558. We hung our decision on the district court's balancing of the equities standard fare in cases seeking injunctive relief. For another thing, the union's goal in the Northeast Airlines case was to require the employer to incorporate the union's views into the framework of the contemplated merger. See id. Here, however, the union sought neither to halt the merger nor to meddle in the negotiations between the merging entities.7 7Another difference but one to which we attach little weight is that Northeast Airlines involved the Railway Labor Act (RLA), 45 U.S.C. 151-188. We deem it settled that cases brought under the RLA can inform the decisional process under the NLRA. See, e.g., Trans World Airlines v. Independent Fed. of Flight Attendants, 489 U.S. 426, 426-27 (1989); Lebow v. American Trans Air, Inc., 86 F.3d 661, 665-66 (7th Cir. 1996); Brotherhood of Locomotive Engineers v. Kansas City So. Ry. Co., 26 F.3d 787, 795 (8th Cir.), cert. denied, 115 S. Ct. 320 (1994). 14 Because considerations not present here informed the Northeast Airlines court's discussion of the core of entrepreneurial control, we think that Northeast Airlines can be reconciled easily with authority (to which we subscribe) holding that, as long as a pending merger is sufficiently advanced, a union is entitled to request information shown by the totality of the circumstances to be relevant in order to prepare for effects bargaining. See Holly Farms, 48 F.3d at 1360 (upholding Board's finding that employer's failure to produce merger agreement when requested pre-merger constituted an unfair labor practice) (enforcing 311 N.L.R.B. 273, 350 (1993)); Children's Hosp. of San Francisco, 312 N.L.R.B. 920, 923 (1993) (ordering disclosure of merger agreement because its contents, even before the merger was consummated, clearly would have influenced [the union] as to negotiating tactics, positions, and demands). This brings us to the Hospitals' second argument. It is common ground that a union cannot demand bargaining over effects that are purely speculative, ephemeral, or too far removed from the underlying activity. See Detroit Edison, 440 U.S. at 314-15; Northeast Airlines, 473 F.2d at 558. But in this instance, the Hospitals themselves presented the planned merger to their employees and to the media as a fait accompli. Their press release spoke in categorical terms, and a subsequent memorandum sent by McCorkle to the employees crowed that the governing boards of both merger partners have given final approval to the proposed [transaction], subject only to 15 regulatory clearances (which, we note, were subsequently procured). The same communique mentioned some specifics about the system that would result from the merger, including (1) the partners' plans to combin[e] some acute care, non-acute care, and administrative services across facilities, and (2) McCorkle's prediction that most jobs will be saved and moved within the new System. A newsletter distributed by the Hospitals in the same time frame suggested that the merger would be completed in three to six months. It informed the work force that, although right now, [SPHS and HCAHR] have no game plan for layoffs, the workers should expect a significant reallocation of jobs within the new System at some point. A union is entitled to plan in advance for likely contingencies. Under the totality of the circumstances that existed here especially the employer's expressed confidence that the merger would take place soon and the emphasis in its handouts on the reallocation of personnel we believe it was within the Board's authority to find that the union's professed need for specifics about the merger's probable impact on the bargaining unit was reasonable. See Union Builders, Inc. v. NLRB, 68 F.3d 520, 523 (1st Cir. 1995) (explaining that employers must divulge information of even merely potential relevance). In other words, given management's professed near-certainty that the merger would eventuate and its broad hints that it already had formulated some ideas relative to future staffing of the new system, the Board reasonably could find as it did that MNA 16 needed information both about the proposed merger (for the purpose of bargaining over its effects, if and when necessary) and the structural attributes of the new system (to determine whether the collective bargaining agreements would survive the realignment). Thus, substantial evidence supported the Board's endorsement of the union's requests for merger-related information. We add an eschotocol of sorts. The Hospitals claim that the ultimate failure of the merger8 takes two bites out of the Board's case, serving not only to moot the information requests but also to underscore their prematurity. We are not persuaded. The relevance of requested information must be determined by the circumstances that exist at the time the union makes the request, not by the circumstances that obtain at the time an agency or a court finally vindicates the union's right to divulgement. See NLRB v. Arkansas Rice Growers Coop. Ass'n, 400 F.2d 565, 567 (8th Cir. 1968); Mary Thompson Hosp., 296 N.L.R.B. 1245, 1250 (1989), enforced, 943 F.2d 741 (7th Cir. 1991). Were the law otherwise, an employer would have a perverse incentive to drag its feet, and a union could lose deserved rights through the ticking of the clock and the delay inherent in the adjudicatory process. 2. Confidentiality. The Hospitals' second line of