Document: 379 U.S. 203 85 S.Ct. 398 13 L.Ed.2d 233 FIBREBOARD PAPER PRODUCTS CORPORATION, Petitioner,v.NATIONAL LABOR RELATIONS BOARD et al. No. 14. Argued Oct. 19, 1964. Decided Dec. 14, Marion B. Plant, San Francisco, Cal., for petitioner. Archibald Cox, Sol. Gen., and David E. Feller, Washington, D.C., respondents. Mr. Chief Justice WARREN delivered the opinion of Court. 1 This case involves obligation an employer representative his employees under §§ 8(a)(5), 8(d) 9(a) National Labor Relations Act to 'confer in good faith with respect wages, hours, other terms conditions employment.'1 The primary issue is whether 'contracting out' work being performed by bargaining unit a statutory subject collective those sections. 2 Petitioner, Fibreboard Paper Products Corporation (the Company), has manufacturing plant Emeryville, California. Since 1937 East Bay Union Machinists, Local 1304, United Steelworkers America, AFL-CIO Union) been exclusive Company's maintenance employees. In September 1958, Company entered latest series agreements which was expire on July 31, 1959. agreement provided automatic renewal another year unless one contracting parties gave 60 days' notice desire modify or terminate contract. On May 26, 1959, timely its contract sought arrange session representatives. June 2, acknowledged receipt Union's stated: 'We will contact you at later date regarding meeting this purpose.' As required contract, sent list proposed modifications 15. Efforts schedule met no success until 27, four days before expiration when notified meet. 3 Company, concerned high cost operation, had undertaken study possibility effecting savings engaging independent contractor do work. At meeting, informed that it determined substantial could be effected out upon various labor organizations representing representatives letter stated pertinent part: 4 'For some time we have seriously considering question letting our Emeryville contractor, now reached definite decision so effective August 1, 5 'In these circumstances, are sure realize negotiation new would pointless. However, if any questions, glad discuss them you.' 6 After discussion right enter third party then unit, concluded understanding meet again 30. 7 By 30, selected Fluor Maintenance, Inc., assured costs curtailed reducing force, decreasing fringe benefits overtime payments, preplanning scheduling services performed. would: 8 'furnish all labor, supervision office help performance * Owner as shall from assign Contractor during period contract; also furnish such tools, supplies equipment connection therewith order Contractor, understood however ordinarily own purchasing equipment.' 9 further pay operation plus fixed fee $2,250 per month. 10 30 representative, explaining work, remarked negotiations previous years endeavored point through use charts statistical information 'just how expensive costly creating quite terrific burden plant.' He unions 'had joined hands management effort bring about economical efficient operation,' but 'we not able attain discussions particular Local.' distributed stating 'since covered present Agreement, renewed Agreement appear us pointless.' employment represented terminated took over. That evening established picket line plant. 11 filed unfair practice charges against alleging violations 8(a)(1), 8(a)(3) 8(a)(5). hearings were held complaint issued Board's Regional Director, Trial Examiner Intermediate Report recommending dismissal complaint. Board accepted recommendation dismissed 130 N.L.R.B. 1558. 12 Petitions reconsideration, General Counsel Union, granted. Upon adhered Examiner's finding motive economic rather than antiunion found nonetheless 'failure negotiate concerning subcontract constituted violation Section 8(a)(5) Act.'2 ruling based doctrine Town & Country Mfg. Co., 136 1022, 1027, enforcement granted, 316 F.2d 846 (C.A.5th Cir. 1963), 'albeit reasons, matter within phrase 'other employment' mandatory meaning Act.' ordered reinstitute previously reinstate their former substantially equivalent positions back computed supplemental decision, fulfill bargain. 14 appeal, Court Appeals District Columbia Circuit granted petition enforcement. 116 U.S.App.D.C. 198, 322 411. Because importance issues because alleged conflict among courts appeals,3 certiorari limited consideration following questions: 15 '1. Was petitioner bargain union let legitimate business reasons certain operations engaged? 16 '3. Board, involving only refusal bargain, empowered resumption discontinued reinstatement individuals formerly employed therein?' 17 We agree that, facts case, members existing requires employers collectively. did exceed remedial powers directing resume operations, pay, Union. I. 18 provides 'to refuse collectively employees.' Collective defined § 19 'the mutual reasonable times confer employment.' 20 'Read together, provisions establish each 'wages, *.' duty subjects, area neither legally obligated yield. v. American (Nat.) Ins. 343 395, 72 824, 96 L.Ed. 1027. matters, however, free Wooster Div. Borg-Warner Corp., 356 342, 349, 78 718, 722, 823. grant certiorari, here allegedly refused bargain—contracting capable continuing perform—is 'terms 8(d). 21 dispute well literal See Order Railroad Telegraphers Chicago N.W.R. 362 330, 80 761, 774. A stipulation might appropriately called 'condition words even more plainly cover termination which, indicate, necessarily results unit. 22 inclusion scope seems designed effectuate purposes Act. One promote peaceful settlement industrial disputes subjecting labor-management controversies mediatory influence negotiation.4 framed awarencess refusals most prolific causes strife. Jones Laughlin Steel 301 42—43, 57 615, 626—627, 81 893. To hold, done, fundamental purpose bringing problem vital concern framework Congress conducive peace. 23 conclusion reinforced practices country. While determinative, appropriate look appraising propriety including bargaining.5 Nat. 408, 831, Industrial experience reflective interests indicative amenability subjects process. Experience illustrates form brought, widely successfully, framework.6 Provisions relating exist numerous agreements,7 '(c)ontracting basis many grievances; type claim grist mills arbitrators.' etc. Warrior Gulf Nav. 363 574, 584, 1347, 1354, 1409. 24 situation unlike presented 24, Intern. Broth. Teamsters, Oliver, 358 283, 79 297, 312, where imposed prevent possible curtailment jobs undermining bargaining. state antitrust laws applied provision minimum rental paid motor carrier who leased vehicles driven owners carrier's federal law directed hence effectuation agreement. pointed 25 'direct frontal attack thought threaten basic wage structure inadequacy means owner makes up excess driver's wages clearly bears close relation labor's efforts improve working fact drivers; inadequate mean progressive withdrawal carrierowned service.' Id., 294, 304. 26 Thus, 294—295, 303—304. difference between hand piecemeal whereas entire contracted out. reaching Oliver bargaining, cited approval Timken Roller Bearing 70 500, 518, denied grounds, 161 949 (C.A.6th 1947), factually similar 27 illustrate submitting negotiation. alter operation. still No capital investment contemplated; merely replaced same employment. Therefore, require significantly abridge freedom manage business. 28 It induced assurances contractors economies derived benefits, eliminating payments. These long regarded matters peculiarly suitable resolution framework, demonstrates highly successful achieving accommodation conflicting interests. Yet, contended can effect respects out, there need attempt achieve provide opportunity mutually acceptable alternative. short answer although say satisfactory solution reached, national policy founded congressional determination chances enough warrant process 29 appropriateness resolving apparently recognized Company. Accordingly, past union, unilaterally does encourage engage fruitless marathon expense frank statement support position.' 404, 829, least demands submitted negotiations. '(i)t necessary likely probable yield supply feasible afforded management's complaints unduly costly.' thus expanding now, involved case—the replacement employment—is Our encompass forms 'subcontracting' arise daily complex economy.8 II. remaining whether, pay. believe empowered. 31 10(c) committed, 32 'shall requiring person cease desist practice, take affirmative action without policies *.'9 33 section 'charges task devising remedies Seven-Up Bottling 344 344, 346, 73 287, 289, 97 377. power broad discretionary one, judicial review. Ibid. '(T)he remedy administrative competence Phelps Dodge Corp. 313 177, 194, 61 845, 852, 1271. fashioning undo effects Act, must draw enlightenment gained experience.' 289. disturbed 'unless shown patent ends fairly said Virginia Elec. Power Co. 319 533, 540, 63 1214, 1218, 87 1568. Such showing made case. 34 There restoring status quo ante insure meaningful Nor evidence justify disturbing impose undue Company.10 35 argued, nonetheless, award exceeds infringes '(n)o individual employee suspended discharged, payment him discharged cause. *' legislative history indicates preclude reinstating misconduct.11 indication, curtail loss stems directly hand. 36 judgment affirmed. 37 Affirmed. 38 GOLDBERG part 39 STEWART, whom DOUGLAS HARLAN join, concurring. 40 Viewed broadly, stirs large issues. purports limit case.' But Court's rediates implications breadth I am persuaded file separate my views. 41 amended, 'refuse as: 42 43 posed decides.1 assuredly decide every managerial terminates individual's subcontracting decisions general duty. holds employer's employment,' Within narrow limitations implicit specific decision. 44 employees, local Steelworkers. Estimating $225,000 saved annually dispensing internal maintenance, company informing negotiating since Fluor. Maintenance continued plant, ultimately supervised company's officials 'functioning integral part' company. monthly. anticipated arrangement largely elimination adjustments scheduling, stricter quotas, personnel. Under cost-plus arrangement, remained responsible whatever actually incurred. facts, staff contractor. 45 failed deciding goes absence agreement.2 true, points may useful determining proper data contracts refer grievances frequently referred arbitrators agreements, while wholly irrelevant, much real bearing, indicate often considered advantageous over permissive basis. event, ultimate language. 46 important note statute limitation. bound either them; specification defines category compulsory limiting statute's language clear originally passed, Wagner contained definition collectively.3 1947 revision House bill detailed excluding others.4 conference substituted House's specification. incorporated legislation enacted stringent bill, adopts approach seeking define class bargainable issues.5 47 'conditions doubt susceptible diverse interpretations. extreme, construed apply insisted prerequisite interpretation, place compulsion behind demands, contrary intent Congress, reflected history. Yet passages today suggest just expansive imply reasonably divide bargaining.6 48 Only narrower concept serve delineating Seeking purpose, seven circuits interpreted exclude kinds bargain.7 common parlance, person's obviously physical dimensions environment. What one's hours be, what amount expected periods relief available, safety observed, seem less tangible characteristics deemed 'conditions'—most prominently characteristic security view matter, argued job condition employment; imposing employment, all. occasions discharge mandatorily bargainable. discriminatory discharge,8 seniority rights,9 imposition retirement age,10 very existence itself. 49 properly circumstances surely follow affect Many Decisions volume kind advertising expenditures, product design, manner financing, sales, bear workers' jobs. hardly conceivable involve they negotiated employees' representative. 50 areas impact extremely indirect uncertain, alone sufficient reason conclude 'with imperil security, indeed entirely. An enterprise invest labor-saving machinery. Another resolve liquidate assets go Nothing should decisions, lie core entrepreneurial control. commitment themselves primarily though If, think clear, describe direction corporate impinge indirectly excluded area. 51 Applying concepts hand, subconstracting are, expansive, conditions—tangible intangible—of employment.11 remains comes join judgment, substitution group workers perform control employer. substitute closely analogous situations traditional Compulsory retirement, layoffs according seniority, assignment potentially eligible groups plant—all questions assignment, bargaining.12 52 Analytically, far willing discriminated affiliation, equally regard unilateral act frustrating underlying remuneration, evasion concededly bargaining.13 Similarly, chosen subcontract, inevitably turned cost, prompted subcontracting. Insofar frustrated violated 53 falls larger produced, invested assets, be. view, nothing aspects law. 54 fully aware era automation onrushing technological change, problems domestic economy greater stability. cruel lives fortunes men women Nation, understandably engaged solicitous attention government, private business, particularly organized labor. eventually give government heavier controlling prerogatives management. path mark sharp departure principles economy. Whether is, constitutional limitations, choose. certainly choose Taft-Hartley relevant are: 'SEC. 8(a). employer— '(5) 9(a). '(d) For section, agreement, arising thereunder, execution written incorporating requested party, compel proposal making concession *. Representatives designated majority purposes, rates disturb original holding 8(a)(1) 8(a)(3), satisfied Adams Dairy, 553 (C.A.8th 644, 613, 550. declaration set forth 101 Labor-Management 1947, Stat. 136, U.S.C. 141, 151 (1958 ed.). Cox Dunlop, Regulation Bargaining Harv.L.Rev. 389, 405—406 (1950). Lunden, Subcontracting Clauses Major Contracts, Pts. 84 Monthly Lab.Rev. 579, 715 (1961). Department analyzed 1,687 approximately 7,500,000 (about one-half estimated force agreements). Among studied, one-fourth (378) limitation supra, 581. Solicitor precise meaning. They used variety arrangements altogether different types arrangements, see Brief Respondent, pp. 17; Electronic Industries Association amicus curiae, 5—10. 'If preponderance testimony taken named findings cause served requirement (restoring ante) imposes Respondent. record shows prior arrangement. Respondent employees; Respondent's terminable notice.' 138 N.L.R.B., 555, n. 19. states 'intended put end belief, justified activities carries license loaf, wander plants, waste time, break rules, incivilities disorders misconduct.' H.R.Rep.No. 245, 80th Cong., 1st Sess., (1947). Conference notes 'employees interfering transact activities, shop Communist (interfering war production) entitled reinstatement.' H.R.Conf.Rep.No.510, 55 (1947), U.S.Code Congressional Service p. 1161. Except discussed Part II opinion. determine bargain—a expressed Senator Walsh he public room door. Cong.Rec. 7659 (1935). 389. too built assumption longer prevail, nor doing so. recognize 'for H.R. 3020, (11)(B)(vi) Legislative History Management 166—167 (1948). (Hereinafter LMRA.) report accompanying 'did prescribe purely objective test (it) extent LMRA 538. Though refers context focus procedures scope. assume alternative unremitting warfare. ambit And permissively 1963); New England Web, 309 696 (C.A.1st 1962); Rapid Bindery, 293 170 (C.A.2d 1961); Jays Foods 292 317 (C.A.7th Lassing, 284 781 1960); Mount Hope Finishing 211 365 (C.A.4th 1954); Houston Chronicle, 848 1954). Bachelder, 120 574 1941). Licorice 350, 569, 799. Westinghouse Air Brake 1004 (C.A.3d Inland 247, A.L.R.2d 240 1948). 7, 8, 9, supra. States Conditioning 302 280 Tak Trak, 270 (C.A.9th 1961). Cf. Katz, 369 736, 82 1107, 230.

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