Opinion ID: 363559
Heading Depth: 2
Heading Rank: 1

Heading: duty to bargain

Text: 27 The leading case on whether there is a duty to bargain over the subcontracting of work is Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964). Rather than renew a collective bargaining agreement, Fibreboard determined that it could make substantial savings by contracting out the maintenance work performed by bargaining unit employees. The company eliminated the entire bargaining unit without any negotiations with the union. The Supreme Court found that: 28 on the facts of this case, the contracting out of the work previously performed by members of an existing bargaining unit is a subject about which the National Labor Relations Act requires employers and the representatives of their employees to bargain collectively. 29 Id. at 209, 85 S.Ct. at 402. The court pointed out that the maintenance work would be performed in the plant and the company was merely replacing one group of employees with another group. The company would be reducing its cost by: 30 reducing the work force, decreasing fringe benefits, and eliminating overtime payments. These have long been regarded as matters peculiarly suitable for resolution within the collective bargaining framework . . . . 31 Id. at 213-14, 85 S.Ct. at 404. The language throughout the opinion confines the holding of Fibreboard to the particular facts of that case. The majority opinion states: 32 Because of the limited grant of certiorari, we are concerned here only with whether the subject upon which the employer allegedly refused to bargain contracting out of plant maintenance work previously performed by employees in the bargaining unit, which employees were capable of continuing to perform is covered by the phrase terms and conditions of employment within the meaning of § 8(d). 33 We are thus not expanding the scope of mandatory bargaining to hold, as we do now, that the type of contracting out involved in this case the replacement of employees in the existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment is a statutory subject of collective bargaining under § 8(d). Our decision need not and does not encompass other forms of contracting out or subcontracting which arise daily in our complex economy. 34 Id. at 210, 215, 85 S.Ct. at 402, 405. 35 AMCAR argues that its decision to subcontract (1) does not fall within the limited confines of Fibreboard, (2) was based on operational considerations, (3) was not detrimental to the bargaining unit, and (4) was not based on anti-union animus. 36 At the outset it should be noted that the Board's findings of fact are conclusive if they are supported by substantial evidence on the record as a whole. Universal Camera Corp. v. NLRB, 340 U.S. 474, 487-88, 71 S.Ct. 456, 464, 95 L.Ed. 456, 467 (1951); 29 U.S.C. § 160(e) and (f). We are also aware that the credibility of witnesses is primarily one for determination by the trier of facts. See Fruin-Colnon Corp. v. NLRB, 571 F.2d 1017, 1022 (8th Cir. 1978), although the rule is not to be mechanically applied. The Administrative Law Judge here did have to make credibility choices, and chose in large part to believe the union witnesses who testified on behalf of the Board. We believe the record as a whole supports these credibility findings. 37 There was no finding of anti-union animus in Fibreboard, but nevertheless the company was held to have a duty to bargain. Thus, that factor is not controlling here. AMCAR's other arguments must also fall although they are entitled to greater discussion. 38 This case involves the balancing of managerial prerogatives with the collective bargaining rights of employees. In Fibreboard, the court found that the requirement to bargain . . . would not significantly abridge (the employer's) freedom to manage the business where the subcontracting merely involved the substitution of one set of employees for another. Id. 379 U.S. at 213, 85 S.Ct. at 404. 39 Subsequent decisions have recognized there must be a substantial adverse effect on the bargaining unit in order for an unfair labor practice to occur. See NLRB v. King Radio Corp., 416 F.2d 569 (10th Cir. 1969), Cert. denied, 397 U.S. 1007, 90 S.Ct. 1234, 25 L.Ed.2d 420 (1970); District 50, United Mine Workers of America, Local 13942 v. NLRB, 358 F.2d 234 (4th Cir. 1966). See also Puerto Rico Telephone Co. v. NLRB, 359 F.2d 983 (1st Cir. 1966), which uses the term immediate adverse effect. Each of the above cases found there was no duty to bargain with the employees. 4 40 We believe that the subcontracting here did have a substantial adverse effect on the employees and does fall within the confines of Fibreboard for the reasons which follow. 41 Factually this case is similar to Fibreboard in that the company did in some instances provide the subcontractors with company equipment, i. e., jigs used to assemble the hitch parts during production. The work did not differ in any respect from bargaining unit work which had been or was being performed on a daily basis at the plant. The Administrative Law Judge noted that the subcontracting did not appear to be economically motivated. Yet the Administrative Law Judge found that even at the peak of Model 5 production in May of 1974 the company eliminated Saturday overtime, used only two shifts in hitch assembly, did not always use three shifts in fabrication and when it did it was a skeleton crew of eight employees at the most. Eliminating overtime payments was one of the matters which the Fibreboard court found has long been regarded as . . . peculiarly suitable for resolution within the collective bargaining framework . . . . Id. 379 U.S. at 213-14, 85 S.Ct. at 404. As was noted in the fact section, the bulk of the subcontracting started two months after AMCAR eliminated the Saturday work. 42 AMCAR's argument that it was forced to subcontract out the hitch work because of limitations of space, equipment, air and electric power loses a great deal of its weight in light of the fact that it continued to subcontract out work after the end of October when layoffs allegedly due to cancellations of orders for the Model 5 hitch occurred. It is true that a substantial portion of the subcontracts were let in the early part of October and before the cancellation of orders for Model 5 hitches. However, the company has produced no valid explanation for the fact that during the three month period between November, 1974 and January, 1975, the company let seven subcontracts involving almost 5900 hours of work while union records which allegedly were incomplete showed at least 30 employees laid off or transferred during the period and there was testimony from the union agent that in December alone 40 hitch welders left the department. Joint appendix at 148. The subcontracting of this work obviously had a substantial adverse effect on the bargaining unit. Although the evidence was conflicting, there was testimony that space and equipment were available in another building owned by the company known as the St. Louis Car Plant, and that space in the hitch area could have been rearranged or production schedules changed so as to provide room for the subcontracted work. 43 AMCAR also argues that it had no duty to bargain regarding subcontracting because the contract in effect at the time 5 contained no reference to subcontracting, but did contain a strong management rights clause and clauses which provided that this contract superseded all previous agreements and covered all the terms and conditions of employment. The Administrative Law Judge admitted testimony showing that the 1969-72 contract had contained a side letter requiring the company to notify the union of and bargain with it concerning subcontracting. This side letter was not present in the 1972-75 contract. However, the uncontradicted testimony showed that the omission was due to a statement by the company's negotiation chairman that the side letter was unnecessary because the company was under a statutory obligation to bargain about subcontracting. There was testimony also that the company had never before subcontracted production work. It had subcontracted maintenance work. The union agent testified that prior to subcontracting maintenance work the company had always notified him and provided an opportunity for discussion. In some cases, the company had decided after discussion with the union that the subcontracting was unnecessary. 44 We have no difficulty in finding that this testimony concerning prior bargaining over subcontracting was admissible. It is well established that collective bargaining agreements are not governed by ordinary contract law. See Transportation-Communication Employees Union v. Union Pacific RR Co.,385 U.S. 157, 160-61, 87 S.Ct. 369, 17 L.Ed.2d 264 (1966). For example, Darnel v. East, 573 F.2d 534, 537 (8th Cir. 1978), held that there need be no consideration for a stipulation that the parties agree to abide by a collective bargaining agreement. The failure to mention a right in a bargaining agreement does not constitute a waiver of it even though there is a clause stating that the contract represents the entire agreement between the parties. See Little Rock Airmotive, Inc. v. NLRB, 455 F.2d 163, 168 n.9 (8th Cir. 1972); Office and Professional Employees International Union, Local 425 v. NLRB, 419 F.2d 314, 321 (10th Cir. 1969). There is even more reason why the contract's silence on the subject of subcontracting is not controlling where the company by its behavior had induced such silence. 45 Considering all of the above factors, we enforce the Labor Board's finding in this case that prior to subcontracting the unit work there was a duty to bargain. We are not saying that AMCAR would be required to use three shifts or work overtime or rearrange its hitch assembly area or production schedules. We are saying only that AMCAR must notify the union and bargain with it prior to subcontracting unit work.