Court Opinion

ID: 8938880
Source: CourtListenerOpinion
Date Created: 2022-11-27 07:47:17.477381+00
Date Added: 2024-06-11T17:09:41.700822
License: Public Domain

SWYGERT, Senior Circuit Judge,
concurring in part and dissenting in part.
I concur with the enforcement of the Board’s order as it applies to the Duray Company. I must, however, dissent from the denial of enforcement against Harvstone Manufacturing Company, American, and House-O-Lite.
The issue before us, as the majority states, is whether there is substantial evidence in the record as a whole to support the Board’s findings. This case involves a difficult factual situation for the court to review. As Justice Burger, then Circuit Judge, said in Dallas General Drivers, W & H Local No. 745 v. NLRB, 355 F.2d 842, 844-45 (D.C.Cir.1966), in the whole complex of industrial relations there are few issues less suited to appellate judicial appraisal than evaluation of bargaining processes or better suited to the expert experience of a Board which deals constantly with such problems. In the instant case, the administrative law judge and the Board had to draw inferences from a variety of verbal statements and documentary assertions made in the context of bargaining. Although the facts make this a fairly close case, I believe that the judge and the Board drew reasonable inferences which should not be disturbed by an appellate court.
The distinction which the Board had to ' make was a fine one: Did the employers make a claim of financial inability to pay a proposed wage rate? (If so, the employers potentially triggered an obligation on their part to provide substantiating financial data to their employees’ bargaining representative. The disclosure is required to the extent necessary to permit a union to make a meaningful evaluation of the claim of financial inability. Teleprompter Corp. v. NLRB, 570 F.2d 4, 10 (1st Cir.1977).) Or, did the employers indicate that they “would not” as opposed to “could not” pay the employees’ proposed demands? (The Board recognized in United Fire Proof Warehouse Co. v. NLRB, 356 F.2d 494, 498 (7th Cir.1966), that such meeting-competition assertions are not necessarily the equivalent of inability-to-pay assertions and may not trigger an obligation to disclose. Empire Terminal Warehouse Co., 151 N.L.R.B. 1359, 1360 (1965), enf'd, 355 F.2d 842 (D.C.Cir.1966); Charles E. Honaker, 147 N.L.R.B. 1184, 1187-88 (1964).)
The facts are crucial in cases which turn upon the inability-to-pay/refusal-to-pay distinction. The inquiry must always be whether, under the circumstances of the particular case, the statutory obligation to bargain in good faith has been met. NLRB v. Truitt, 351 U.S. 149, 153-54, 76 S.Ct. 753, 756, 100 L.Ed. 1027 (1956). It is not necessary that the claim of inability-to-pay be expressed with any particular magic words. Atlanta Hilton & Tower, 271 N.L. R.B. No. 214, sl. op. at 7, 117 L.R.R.M. 1224, 1226 (1984). The statements must be judged within the context of the bargaining setting: if an employer’s refusal to meet a wage demand reasonably interpreted is the result of financial inability to meet the employees’ demands rather than simply unwillingness to do so, the exact formulation used by the employer in conveying this message is immaterial. Id.
Duray Company concededly raised a plea of “poverty” to support its claim of economic necessity for its demands to scale down the wages and benefits to its unit employees. Respondents’ “Answer to Consolidated Complaint, XII(c),” denying allegations “except that Respondent Duray pleaded inability to pay.” The facts are not as clear cut with respect to Harvstone, American, and House-O-Lite. Ray Schoonhoven, representing the employers, “skillfully avoided using the precise word ‘poverty,’ ” according to the administrative law judge. In fact, Schoonhoven explicitly as*583serted that the employers were “not pleading poverty.” Tr. 235. When asked whether the companies were claiming that they would be forced out of business if the unions would not forego reductions in labor costs, Schoonhoven replied: “No. They might or they might not.” Tr. 166, 267. Additionally, Schoonhoven referred to the “business judgment” of the companies to seek relief, Tr. 165, 235, and the need to be “more closely aligned” with competitors’ labor costs “to be competitive.” Tr. 166, 169, 235-36.
Schoonhoven, however, did not make only these “meeting competition” or “would not pay” assertions. He coupled those statements with operating-loss/going-out-of-business assertions that amounted to “could not pay.” The majority dismisses the Board’s compilation of these “smattering of words and phrases” as being “out of context,” and holds that the assertions never implied financial inability to meet the employees’ demands (see supra at 576). I believe that the effect of all the statements taken as a whole and within the entire bargaining context could lead the union rationally to conclude that the companies were claiming financial inability to meet the union’s demands.
First of all, it is undisputed that at the August 31, 1982 session, Schoonhoven stated that Duray Company was “losing money and had lost $92,000 during the past six months.” Tr. 233, Schoonhoven; Tr. 320, Solomon, American Company; Tr. 326, Mayer, Duray Company. On this basis, the majority enforces the Board’s order against Duray Company. But the majority does not believe that this clear assertion of a plea of poverty with respect to one employer is relevant to the position taken by the other three. Instead, it argues that Duray Company’s financial condition is not attributable to the other three companies because there was “never any confusion among the parties as to which company was losing money.” Although negotiations were conducted jointly, the majority states, the parties understood that each company was ultimately an independent entity seeking its own contract with the union. Therefore, under this view, Duray Company’s disclosure of its financial posture is irrelevant to the status of the other three.
I cannot agree that the plea of poverty by Duray Company is irrelevant to the position of the remaining companies. The companies had traditionally bargained separately with the union, but signed essentially identical contracts. During the negotiations for a contract to replace the one expiring in August 1982, the four employers were represented by the same attorney. Although each bargaining session was theoretically limited to a particular employer, the four employers and the union all treated the discussions at each bargaining session as relating to all four companies.
There was no attempt by Schoonhoven to separate the effect of the announcement that one company was losing money from the message he was conveying regarding the other three companies. Schoonhoven testified that he followed his reference to Duray Company’s $92,000 loss with a “long discussion about competitiveness and if you don’t make a profit, you can’t be in business.” Tr. 279. Schoonhoven explicitly stated that “one company was losing money and the rest might.” Tr. 160, Moreland.
The majority characterizes these statements by Schoonhoven as mere “truisms.” It states that the plea of poverty by Duray Company was irrelevant with respect to the other three employers represented at the August 31, 1982 bargaining session. Instead, I believe that Schoonhoven effectively coupled his “can’t pay” assertion with other “won’t pay” assertions to create a reasonable concern by the union that the employers as a group were raising financial inability to meet bargaining demands.
This same message was effectively conveyed to the union at other bargaining sessions. For example, Schoonhoven later asserted that “relief on labor costs” because of “poor competitive positions” was essential for the companies to “stay in business, [otherwise] no one will have jobs.” Stipulation signed June 28, 1983, p. 13. He also stated that the companies *584“need economic relief,” Tr. 98, Lane, and that if economic concessions demanded by the companies were not met by the union, the companies “could, but ... not necessarily would ... go out of business.” Tr. 101, Lane, December 21, 1982 bargaining session.
Immediately before negotiations commenced, two employers sent letters directly to their employees asserting that the wages paid them were higher than those of their competitors, and warning that “if we are going to continue in the Chicago area as a strong competing employer ... we must have a relief from this intolerable situation.” The letters, drafted by Schoonhoven, also stated that “your future as well as the Company’s will be vitally affected by these negotiations.” Tr. 194, Joint Exhibits 18(a) and 18(b).*
Based on this documentary evidence, stipulations, and testimony, the Board concluded that although Schoonhoven had skillfully avoided using the “talismanic” word “poverty,” he had triggered the requirement of fair substantiation during the collective bargaining sessions with respect to all the employers. I do believe that the Board’s conclusion is supported by substantial evidence. The statements must be judged in the context of the bargaining setting, taken as a whole. Moreover, we should give weight to the administrative law judge’s appraisal of the testimony he heard and appreciate his superior vantage point in gauging the demeanor of the witnesses.
I further believe that today’s holding frustrates the statutory policy requiring substantiation of bargaining positions where necessary to allow peaceful, successful, collective bargaining. We condone the stratagem of maintaining a position during the bargaining and then denying such a position is in fact being taken when the opposing party demands substantiation. Such “gamesmanship” is, in my view, encouraged by the majority’s opinion. I respectfully dissent.

 During the November 24, 1982 bargaining session, the respondent employers for the first time proposed a change in the management rights clause, Article III, to the effect that the employers retained "the right to shut down or relocate the plant in whole or part and to select the site of any such relocation." Joint Exhibits 15(a)-(d). On the heels of the letters and the bargaining statements, this proposed change in language also could have rationally fueled union fears that the employers as a group were losing money and pleading inability to pay.