Court Opinion

ID: 9452794
Source: CourtListenerOpinion
Date Created: 2023-08-04 17:52:22.994879+00
Date Added: 2024-06-11T17:33:21.764941
License: Public Domain

BARNES, Circuit Judge,
(concurring in part and dissenting in part):
I concur in the majority’s conclusion that the petitioner Metlox did not bargain in good faith when it restricted the Union auditor to a “yes or no” conclusion as to whether the previously submitted profit and loss statements were “true”. I dissent from the enforcement of the Board’s order in its present form.
The parties here are in substantial accord as to the applicable law. NLRB v. Truitt Mfg. Co., 4 Cir., 224 F.2d 869, stands for the proposition that where an employer claims inability to pay, he may be required to substantiate that claim. The Court in Truitt indicated that whether substantiation was to be required should turn upon the particular facts of each case. The employer here does not resist substantiation here, so we are not faced with determining whether the fact situation would require it absent the employer’s agreement.
The issue is whether the employer may limit the scope of disclosure of the audit consistent with its obligation of good faith in bargaining. I think that it may, and the Board apparently agrees. See White Furniture Co., 161 N.L.R.B. No. 23, 63 L.R.R.M. 1227 (1966). The question then becomes — does the limitation proclaimed by the employer here go so far as to constitute a lack of good faith ?
The only concern we have here for substantiation of the employer's financial statements derives from its claim of inability to pay the requested increases in wages. Cf., United Fire Proof Warehouse Co. v. NLRB, 356 F.2d 494 (7th Cir. 1966). The purpose in presenting the financial statements to the Union was to sustain the employer’s claim of financial disability to pay higher wages. If those statements are fair and accurate, it would seem that the employer has gone far enough to meet the burden upon it “to furnish to the Union relevant data to enable the representative effectually to bargain for the workers.” Sinclair Refining Co. v. NLRB, 306 F.2d 569, 571 (5th Cir. 1962). Inability to pay‘is logically based upon operations which are conducted at a negligible profit or *731at a loss. Statements which fairly reflect a negligible profit or a loss a fortiori are enough to sustain a good faith claim of inability to pay. The details of accurate financial statements may or may not be irrelevant to the question of whether the employer’s claim of inability was made in good faith.1 Cf., NLRB v. Movie Star, Inc., 361 F.2d 346, 349 (5th Cir. 1966). Of course, if the statements are false or substantially inaccurate they would not be substantiation of a good faith claim under NLRB v. Truitt Mfg. Co., supra.
To show that the statements are fair reflections of what they purport to represent means more than demonstrating clerical precision or accuracy, as the Board’s analysis here suggests. See C.T. p. 46, 11. 35-42. Abnormal items or unusual treatment can make clerically accurate statements misleading. The liquidation of inventories valued on the last-in, first-out basis could significantly distort figures reflecting operations, as could accelerated depreciation or changes in accounting methods. If any such distorting factors exist, the accountant should be free to disclose the existence of such factors and their net effect upon the financial statements. Yet such disclosure would not require the employer to sacrifice the confidentiality of its records by allowing indiscriminate revelation of any details which the accountant might choose to disclose.
The Board’s order, which the process of this court will enforce, does not tell Metlox what it must do. Metlox has at all times been willing to substantiate its claim of inability to pay the requested wage increases. The Board’s order, without elaboration, merely tells Metlox that it must substantiate its claim, and it must now do so on pain of contempt. The vague generalities of the majority2 and the Board’s order offer no indication of what Metlox must do to comply with the law. Such an approach, in my opinion, negates the suggestion that the employer may, within a certain range, retain the confidentiality of its records.
I would enforce the Board’s order modified to provide that in substantiating its claim the employer can limit the accountant to (1) a “yes or no” answer to whether the financial statements are, within a reasonable degree, clerically accurate, and (2) the disclosure of the existence of any items which, in the judgment of the accountant, might have significantly distorted the figures reflecting operations and the net effect of such distortion, if any.

. The Union requested details of seven items on the profit and loss statements:
Net Sales (total sales less sales discounts)
Factory and Shipping Wages
Other Salaries and Wages
Materials, Supplies, Expenses
Advertising and Commissions
Financial Expenses, Interest, Factoring
Depreciation
We point out that details of the second item, Factory and Shipping Wages, would be relevant in bargaining on wages, hours and work standards, and those details must be given to the Union in context with such bargaining. We perceive that the employer does not object to presenting such information. See Petitioner’s Opening Brief, pp. 3-4.
But the inquiry in this case concerns the employer’s ability to pay. If the statements as a whole are correct and fair the details are not germane to the issue. Even the details of Factory and Shipping Wages would be irrelevant on this question. An item may be relevant in one context and irrelevant in another. Sylvania Elec. Prod., Inc. v. NLRB, 358 F.2d 591 (1st Cir. 1966).

. “A reasonable amount of explanation * *
“ * * * details [which] must be furnished to render the accountant’s report meaningful to the Union.”