Court Opinion

ID: 9465084
Source: CourtListenerOpinion
Date Created: 2023-08-05 00:35:07.951282+00
Date Added: 2024-06-11T17:38:57.766795
License: Public Domain

ROSENN, Circuit Judge,
dissenting.
There is but a single narrow issue before us in this appeal. Is an employer’s decision to close one of its plants, without prior consultation with its union representatives, an unfair labor practice under the National Labor Relations Act (“NLRA”),1 if that decision is motivated solely by economic considerations? Because of its failure to confine itself to this limited question, the majority opinion departs from the principles of this court’s landmark decision in NLRB v. Royal Plating & Polishing Co., 350 F.2d 191 (3d Cir. 1965), and the views prevailing in a majority of federal appellate courts. Therefore, I must respectfully dissent.
I.
The facts of this case are brief and straightforward. Brockway Motor Trucks, Division of Mack Trucks, Inc., (“Brockway”) and Local 427 of the International Association of Machinists and Aerospace Workers (“the Union”) had been parties to collective bargaining agreements covering employees at the company’s Philadelphia facility2 —identified by the National Labor Relations Board (“the Board”) as “Garage, Factory Branch” engaged in “Sales and Services, New and Used Trucks.” On September 14, 1975, the last collective bargaining agreement between the company and the Union expired. The parties engaged in fruitless negotiations over a new contract for a period of about ten months, when the company unilaterally decided to discontinue operation of the Philadelphia facility. One day later, in writing, Brockway informed the Union of that decision.
On August 16, 1976, the Union filed a charge with the Board that Brockway had committed unfair labor practices under sections 8(a)(1) and 8(a)(5) of the NLRA3 by failure to negotiate over the closing of the plant. The Union asserted that the closing of the Philadelphia facility was a mandatory subject of bargaining and that therefore the company’s unilateral decision was an *742unfair labor practice under section 8(a)(5).4 On September 23, 1976, the Board filed a complaint against Brockway for its action in the closing of the Philadelphia facility.
Before rendering a decision on that complaint, the Board entered into an agreement with Brockway that the case would be decided on the basis of a stipulated record. The parties then agreed that Brockway had discontinued operations at the Philadelphia facility solely because of “economic considerations.” Brockway, in answer to the Board’s complaint, asserted that because of that stipulation, the case was governed by Royal Plating & Polishing Co., supra, and that even absent the stipulation, an employer’s decision to close a facility is never a mandatory subject of bargaining unless motivated by anti-union animus.
The Board rejected Brockway’s arguments. Instead, it decided that the company had committed an unfair labor practice by failing to bargain with the Union prior to deciding to close the Philadelphia facility. It took the position that an employer is generally obligated to bargain with its employees over a partial closing of the employer’s business,5 even if the decision to close is motivated solely by “economic considerations.”
Therefore, in the posture of this appeal, both Brockway and the Board assert broad positions calling for per se rules to deal with any decision of an employer to partially close his business. The majority take the position that neither the Board nor Brock-way is correct, and reject any per se rule. Maj. Op. at 734. Paradoxically, the majority adopt a perse rule of their own: that the decision to partially close a business is pre-, sumptively a mandatory subject of bargaining except in the very limited situation when that decision is the result of severe economic conditions. In reaching this unprecedented and unnecessary conclusion, the majority brush aside the teaching of Royal Plating, give inadequate consideration to the important interests of the employer partially to close its business, and create an untenable rule based on the degree of economic harm. Such a shaky foundation for so broad a construction of the duty to bargain compels me to dissent.
II.
Royal Plating & Polishing Co., supra, is the cornerstone of this court’s decisional law dealing with an employer’s duty to bargain over the partial closing of its business. In that case, the Board had found the company guilty of an unfair labor practice because it had closed one of its two plants, located within two blocks of the other, without undertaking negotiations with the union. On appeal, this court narrowly tapered the issue before it, “whether an employer’s unilateral decision to close part of his business solely for economic reasons” constitutes an unfair labor practice. 350 F.2d at 193 (emphasis supplied). We reasoned that under the facts of the case — the company had suffered severe losses and was facing a possible condemnation — the failure of the employer to bargain was not an unfair labor practice. Chief Judge Biggs concluded that “an employer faced with the economic necessity of either moving or consolidating the operations of a failing business has no duty to bargain with the union respecting its decision to shut down.” Id. at 196.6
*743Although the facts in Royal Plating revealed severe economic problems with the company, nothing in Judge Biggs’ reasoning limited the rule enunciated ■ to such a narrow ease. Rather, the opinion dealt with the somewhat broader problem of the employer’s duty to bargain over changes in the economic direction of the company. Judge Biggs’ opinion, decided only one year after the Supreme Court’s seminal decision of the duty to bargain in Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 85 S.Ct. 398, 13 L.Ed.2d 233 (1964), (involving the somewhat analogous question of duty to bargain over contracting out), took great pains to distinguish the reasoning of the Supreme Court. He noted that in Fibreboard “there was no change in the economic direction of the company” and that the decision to contract out “involved no decision respecting commitment of [investment] capital.” 350 F.2d at 195. Moreover, Chief Judge Biggs did not stop with this basic distinction. He went on to discuss its meaning, noting that partial plant closings essentially involve major changes in the economic direction of a company, and hence lie at the center of management’s ability to manage, outside the scope of mandatory bargaining.
“Nothing the Court holds today should be understood as imposing a duty to bargain collectively regarding such managerial decisions, which lie at the core of entrepreneurial control. Decisions concerning the commitment of investment capital and the basic scope of the enterprise are not in themselves primarily about conditions of employment, though the effect of the decision may be necessarily to terminate employment.
* * * [T]hose management decisions which are fundamental to the basic direction of a corporate enterprise or which impinge only indirectly upon employment security should be excluded from that area [Section 8(d)].”
Royal Plating & Polishing Co., supra, 350 F.2d at 196, quoting with approval, Fibreboard Paper Products Corp. v. NLRB, supra, 379 U.S. at 223, 85 S.Ct. 398 (Stewart, J., concurring).
I believe that the stipulation in this case, that the closing of the Philadelphia facility was solely for economic reasons, puts this case within the four corners of Royal Plating. The majority, however, endeavor to distinguish the instant case from Royal Plating on the ground that the decision to close in the latter case came only after prolonged severe economic loss and a threatened condemnation of the land on which the plant was located. Maj. Op. at 727-728. In my view, this distinction cannot be drawn validly from the reasoning of Royal Plating.7
The majority indicate that the case stands for the extremely narrow proposition that bargaining is mandatory except when economic conditions are so severe that a move is a financial necessity and negotiation would serve no rational purpose. Maj. Op. at pp. 728, 732. While it is true that the company in Royal Plating was in such a condition, the opinion did not address the general question of severity of distress posed by the majority. Rather, the opinion’s reasoning indicates that the severe circumstances faced by the company, added up to no more than that the closing rested on bona-fide economic reasons8 and was not *744motivated by any anti-union animus. I fail to see any sound distinction between a closing for economic necessity and one for economic considerations; both are grounded on the principle that the closing is the consequence of compelling business considerations, not anti-union motivation.
The majority’s tenuous distinction which creates a bright line between closings for economic reasons and closings for severe economic reasons finds no support among other courts. In fact, the view prevailing across the federal judiciary is that bona-fide economic considerations for a partial closing remove a case from mandatory bargaining.9 Moreover, the majority distinction appears to be no than a post facto rationalization from the facts of certain cases to support a novel principle. The clear standard enunciated by the courts that have spoken on this issue is that “absent union animus, a company has no legal duty to bargain with a union over the decision to partially shut down its operation because of economic reasons.” Royal Typewriter Co. v. NLRB, 533 F.2d 1030, 1039 (8th Cir. 1976), (emphasis supplied). Although in some cases these “economic reasons” have been severe, see, e. g., NLRB v. Transmarine Navigation Corp., 380 F.2d 933 (9th Cir. 1967); NLRB v. Rapid Bindery, Inc., 293 F.2d 170 (2d Cir. 1961), no court has stated the rule as narrowly as advocated by the majority and the majority can cite no case in which , an employer was found to have bona fide economic reasons for a partial closing and yet was required to bargain mandatorily.10 Therefore, the gen*745erally accepted rule appears to be that any partial closing for bona fide economic reasons, not motivated by anti-union animus, is not a mandatory subject of bargaining.
III.
In determining the scope of the employer’s duty to bargain, the majority assert that “the act of closing a plant appears to come within the literal language” of the NLRA because it concerns “terms and conditions of employment.” Maj. Op. at 735. From this assertion they conclude that “there is an initial presumption that a partial closing is a mandatory subject of bargaining.” Id. They then would focus on the facts of each case to determine the “applicability” of the duty to bargain and balance the interests of the employer and his employees to ascertain whether bargaining should be ordered. Id. at 737. This procedure, in my view, confuses the question of what is a mandatory subject of bargaining with the question of the proper remedy to order once it has been determined that an employer should have bargained. The focus should not be on the “applicability” of the duty to bargain, but should be on whether the duty exists at all. The question is one of line-drawing — does the employer’s action fall on the side of the line requiring bargaining or does it fall on the side of the line not requiring bargaining? Balancing is used in assessing the propriety of the employer’s action, not in determining if the employer is to be excused because of equitable considerations from bargaining.
Like the majority, I too begin with an analysis of the Fibreboard decision, for within that opinion is the philosophical guidepost that has led most courts to the conclusion that certain decisions in the running of a business may be made by the employer alone without prior consultation with its union representatives. In Fibreboard, the Court held that the contracting out of 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.” 379 U.S. at 209, 85 S.Ct. at 402. In reaching this conclusion, the court pointed out that the employer’s decision to subcontract the maintenance work did not alter the company’s basic operation, that the maintenance work still had to be performed at the plant, and that the company was merely replacing its employees with those of a contractor who would do the same work at the same plant under similar circumstances. From these facts, the Court concluded that contracting out was not so central to the management of a business that requiring “the employer to bargain about the matter would . . . significantly abridge his freedom to manage the business.” Id. at 213, 85 S.Ct. at 404, see id. at 223, 85 S.Ct. at 409 (Stewart, J., concurring) (“Decisions concerning the commitment of investment capital” are for the employer).11 Implicit in Fibreboard is that the NLRA does not require mandatory bar*746gaining on all subjects which might be of interest, and that it excepts those areas “at the core of entrepreneurial control” from such a constraint. Id. at 223, 85 S.Ct. at 409 (Stewart, J., concurring).
The majority read Fibreboard to stand for the proposition that employer actions that lead “to the termination of at least some employees” are subjects for bargaining. Maj. Op. at 735. However broad the language in Fibreboard quoted by the majority may be, the case does not support the expansive proposition for which it is cited. The Court did not hold that all actions of an employer leading to terminations are mandatory subjects of bargaining; it specifically held that not even all subcontracting actions are such subjects.
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 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.
Fibreboard Paper Products Corp. v. NLRB, supra, 379 U.S. at 215, 85 S.Ct. at 405 (emphasis supplied).
Justice Stewart’s concurring opinion makes it clear beyond doubt that Fibreboard does not hold “termination” actions per se to be mandatory subjects of bargaining. “The Court most assuredly does not decide that every management decision which necessarily terminates an individual’s employment is subject to the duty to bargain.” 379 U.S. at 218, 85 S.Ct. at 407. Justice Stewart emphasized that entrepreneurial decisions as to “what shall be produced, how capital shall be invested in fixed assets, or what the basic scope of the enterprise” should be, even if they result in termination of employees, are not subjects of bargaining. Id. at 225,12 85 S.Ct. at 410. Rather, he joined the majority opinion because the case involved
the substitution of one group of workers for another to perform the same task at the same plant under the ultimate control of the same employer. The question whether the employer may discharge one group of workers and substitute another for them is closely analogous to many other decisions within the traditional framework of collective bargaining.
Fibreboard Paper Products Corp. v. NLRB, supra, 379 U.S. at 225, 85 S.Ct. at 410 (Stewart, J. concurring).
This limited holding, balancing the right of an employer to substitute new and cheaper labor for his present employees against their rights, is of little relevance to a case such as this, where the employer is severing his relationship with all employees at a plant and not seeking any replacements.
Textile Workers Union v. Darlington Manuf. Co., 380 U.S. 263, 85 S.Ct. 994, 13 L.Ed.2d 827 (1965), reinforces this conclusion. Darlington, after unsuccessfully resisting a union organizing campaign, promptly liquidated and sold its plant and *747equipment without prior consultation with the union. The Board found that the closing was due to the company president’s anti-union animus, and concluded that the company had violated section 8(a)(3) of the NLRA.13 Even in face of this acknowledged anti-union basis for the plant closing, the Supreme Court held that liquidation of an entire business, whether “motivated by vindictiveness toward the union,” or not is not an unfair labor practice. 380 U.S. at 274, 85 S.Ct. at 1001. The predicate for the Court’s decision was that the force of a closing is completely spent as to that business when it terminates the enterprise. 14
The majority recognize that a decision to close an entire business is not a mandatory subject of bargaining, but nonetheless attempt to place this case, involving a partial closing, into a separate analytic category. They equate this case with a plant relocation and see “no justification for drawing any bright line between a partial closing situation . . . and the subcontracting issue of Fibreboard.” Maj. Op. at 724, n. 10; 735. I believe that by placing the closing of an entire business on one side of the bargaining line and partial closings, plant relocations, and subcontracting on the other side, the majority fail to recognize a crucial distinction — relocation and subcontracting generally result in replacement of employees, closings do not.
As much as a partial closing results in termination of employment, so does a closing of an entire business. There is no logical way, in terms of the presumption established by the majority, to create a bright line between the closing of an entire business and any of the situations listed above. The only consistent factor I can discern is that both plant relocations and contracting out usually result in the replacement of present employees with others, and partial and entire closings do not. In my view, the line for mandatory bargaining purposes falls between subcontracting and relocation on the one hand and plant closings on the other, except when anti-union animus is present.15
Taking our decision in Royal Plating and those of the Eight Circuit, see n. 9 & 11, supra, in light of Fibreboard and Darling-*748ton one is led to the inescapable conclusion that when an employer’s partial closing involves a reallocation of fixed investment capital, causes a basic change in the direction of the business, does not involve replacement of present employees with others, and does not carry an anti-union animus, the employer is under no duty to bargain. This conclusion is soundly based, not only in law, but in the realities of economics and industrial relations.
IV.
I respect the majority’s solicitude for those who may suffer from the closing of plant operations. I too am concerned with the potentially harsh and demoralizing impact upon the lives and fortunes of employees and their families dislocated by the permanent closing of a plant, a problem which has engaged the constructive concern of the Congress, state legislatures, employers, and organized labor and which has led to the enactment of unemployment compensation laws, supplemental unemployment compensation plans, severance pay, and other forms of remedial relief. That concern, however, does not blind me to the countervailing interests of a freely operating economic system. I believe that, at least as to a plant closing for economic reasons, an employer has the right to unilaterally close his operations.
There are valid reasons why a requirement that an employer bargain over a decision partially to close its business could be harmful to the employer, to the economy, and to the prospects for further jobs. If an employer must bargain before he can reach a decision to close a plant, how long must he continue to operate under possibly adverse, costly, and unprofitable conditions while the bargaining process goes on? How long must bargaining continue and who shall decide and by what criteria shall it be determined whether the bargaining has been sufficient? When the employer ceases bargaining, is he susceptible to a charge of bad faith or coercion? Must he engage in protracted litigation over a significant business judgment which may have to be implemented promptly, if it is to be made at all? These questions are unanswered by the majority and are treated as subsidiary to the ultimate question of whether there is a duty to bargain.16
That ultimate question — the duty to bargain — is, in my view, inextricably bound in considerations such as those raised above. As we stated in Royal Plating & Polishing Co., supra, in each case, the interests of the employees and the purpose of the NLRA in securing industrial tranquillity “must be carefully balanced against the right of the employer to run his business.” 350 F.2d at 196. The majority have barely explored that right.
The balance to me in the case of a partial closing for economic reasons seems to rest with the employer. On the one hand, when the employer in the exercise of his knowledge, experience, and judgment concludes that it is no longer economically feasible to continue operation of one of its several plants, a timely termination of the investment in that plant and a reinvestment elsewhere makes a genuine contribution to the economy — possibly preserving the jobs of the employees at the employer’s other plants or creating new jobs with the reinvested funds. On the other hand, notice in advance to the union of an expected decision to close and forced bargaining of the issue will allow the union to discuss the question and make suggestions for preservation of the business. However, that interest must be balanced against the effects of the bargaining decision which not only could place the company at a disadvantage in dealing with its suppliers and customers, but could also cause the loss of the business of those seeking new supply sources in the face of the impending closing. Moreover, *749news of the closing, once publicly revealed in the bargaining context, may generate additional losses, adversely affect plant morale, and impair productivity. Opportunities to liquidate assets, sell or lease property, or disengage from burdensome contracts may be lost, especially if the Board were to exercise its injunctive powers to maintain the status quo pending resolution of the bargaining dispute. Overall, the balance must favor the employer in this admittedly non-discriminatory context.
A private free enterprise system requires and our national labor policy is flexible enough to reflect, that private ownership must have necessary prerogatives to independently decide whether it can remain in business, whether it must close one of its several plants, or whether it must restructure its business through merger or some other form of association.17 Such a decision, although it will no doubt have an effect upon the employees18 is not a mandatory subject of bargaining if it is free from anti-union overtones and is based on bona fide economic considerations.
V.
The majority recognize the important interest that the employer has in the ability to make an unfettered decision to terminate a business suffering from severe economic distress, but do not extend their reasoning to a case of “economic considerations.” Although the degree of economic harm which influenced Brockway’s decision to close is not known, certain inferences may be made and certain facts are evident:
(1) No evidence of anti-union animus or vindictiveness was involved in Brockway’s decision to close. See Royal Plating & Polishing Co., supra, 350 F.2d at 196 n. 4.
(2) No evidence exists that Brockway closed its plant to avoid contractual obligations with the Union. See International Ladies’ Garment Workers Union v. NLRB, 150 U.S.App.D.C. 71, 463 F.2d 907 (D.C.Cir. 1972) (“runaway plant” situation).
(3) No evidence exists that Brockway closed part of a plant and substituted non-unit workers for those it displaced. See Fibreboard Paper Products Corp. v. NLRB, supra.
(4) One can reasonably infer that in the absence of anti-union animus, a profit-maximizing company, stipulated to be acting solely for economic reasons, will not close its facility in a major metropolitan area of the nation unless, in its judgment the economic reasons are so severe as to mandate such action.
Given these considerations, and those raised in parts III and IV, supra, there is no justification for ordering bargaining here.19 *750A further hearing by the Board would be merely an irrelevant inquiry into the degree and circumstances of the economic considerations which impelled the closing. I therefore cannot join with the majority and would deny herewith enforcement of the Board’s order.20

. 29 U.S.C. §§ 151-68 (1970).

. The Philadelphia facility was only one part of Brockway’s entire operation.

. Section 8(a) of the Act provides in pertinent part:
(a) It shall be an unfair labor practice for an employer—
(1) to interfere with, restrain, or coerce employees in the exercise of [their rights]; * * * * * *
(5) to refuse to bargain collectively with the representatives of his employees . . .
29 U.S.C. § 158(a)(1) & (5) (1970).

. Section 8(a)(5) requires only that an employer bargain over mandatory subjects of bargaining as defined in section 8(d) of the Act, which provides in pertinent part, that collective bargaining is a joint responsibility of the employer and the union “with respect to wages, hours, and other terms and conditions of employment.” 29 U.S.C. § 158(d) (1970).

. The Board treats a closing by a company of one of its several plants as a partial closing even if the company’s plants are in distinct communities and are not part of the same bargaining unit. In the instant case, Brockway’s Philadelphia bargaining unit apparently was separate from those at its other plants.

. The court, however, specifically noted that even under such circumstances, if there is a discriminatory motive for such a closing, bargaining would be required. NLRB v. Royal Plating & Polishing Co., 350 F.2d 191, 196 n. 4 (3d Cir. 1965). The court also noted that an employer must notify the union of its intention to close in order to permit the affected employees to bargain over the effects of the closing. *743id. at 196-97. In the instant case, we are concerned neither with discriminatory motive nor failure to bargain over effects.

. The majority stress that the record on appeal contains no specific catalogue of the economic harm suffered by Brockway. See Maj. Op. at pp. 723-724, 738-739. They therefore would require the Board to undertake further factual findings to determine the precise cause of the closing. The record, however, does include a stipulation by the parties that “economic considerations” led to the closing of the Philadelphia facility. This term obviously had meaning to them and it seems to me that it provides sufficient substance for us to determine the narrow question presented here.

. The term “economic” in this context has been considered synonymous with “maximization of profits.” Comment, “Partial Terminations”— A Choice Between Bargaining Equality and Economic Efficiency, 14 U.C.L.A.L.Rev. 1089, 1090 (1967) (“Comment, ‘Partial Terminations ’ ”). No doubt, the term also may be used to refer to a decision to minimize *744losses. At any rate, an economic decision is rationally based on an attempt to seek the highest return on investment capital.

. See Royal Typewriter Co. v. NLRB, 533 F.2d 1030, 1039 (8th Cir. 1976) (dicta) (no duty to bargain over partial closing for “economic reasons” absent union discrimination), citing with approval, Morrison Cafeterias Consolidated, Inc. v. NLRB, 431 F.2d 254, 257 (8th Cir. 1970), NLRB v. Drapery Manuf. Co., 425 F.2d 1026 1027-28 (8th Cir. 1970), and NLRB v. Adams Dairy, Inc., 350 F.2d 108, 110-13 (8th Cir. 1965), cert. denied, 382 U.S. 1011, 86 S.Ct. 619, 15 L.Ed.2d 526 (1966); International Union, United Automobile Aerospace & Agricultural Workers v. NLRB, 152 U.S.App.D.C. 274, 470 F.2d 422 (1972) (Justice Clark, sitting by designation) (change from manufacturer owned to independent franchise, at the core of entrepreneurial control, no duty to bargain in absence of anti-union animus); NLRB v. Thompson Transport Co., 406 F.2d 698, 703 (10th Cir. 1969) (company “solely motivated by a sound economic” reason had no duty to bargain over decision to partially close in the absence of anti-union animus); NLRB v. Transmarine Navigation Corp.. 380 F.2d 933, 939 (9th Cir. 1967) (company decision based solely on greatly changed economic conditions not mandatory). See also NLRB v. North Carolina Coastal Motor Lines, Inc., 542 F.2d 637, 638 (4th Cir. 1976) (per curiam) (dicta); International Ass’n of Machinists v. Northeast Airlines, Inc., 473 F.2d 549, 556-57 (1st Cir. 1972) (no mandatory bargaining over a merger which is at the core of “entrepreneurial control”); NLRB v. Dixie Ohio Express Co., 409 F.2d 10, 11 (6th Cir. 1969) (per curiam) (streamlining of operation entailing partial termination of plant operations, held non-mandatory); NLRB v. Rapid Bindery, Inc., 293 F.2d 170, 175 (2d Cir. 1961) (movement of plant for “business necessity” and “valid economic reasons” not mandatory bargaining subject).

. The majority outline a “range of subjects that courts have held to be mandatory subjects of bargaining,” including partial closings of one plant of an employer’s business. Maj. Op. at pp. 726-727. Yet, no case is cited in which a partial closing was held to be a subject of bargaining; no case is cited in which a closing for economic considerations was held to be a subject of bargaining; and no case is cited making any distinction between closings for economic reasons and closings for severe economic reasons. In fact, the majority’s main support is that of tenuous decisions of the Board, e. g., Ozark Trailers, Inc., 161 NLRB 561 (1966), disapproved by, Royal Typewriter Co. v. NLRB, supra, 533 F.2d at 1039, and that of inapposite cases decided by other courts, e. g., NLRB v. Amoco Chemicals Corp., 529 F.2d 427 (5th Cir. 1976) (case involves failure to negotiate over reduction in hours); Weltronic Co. v. NLRB, 419 F.2d 1120 (6th Cir. 1969), cert. denied, 398 U.S. 938, 90 S.Ct. 1841, 26 L.Ed.2d 270 (1970) (case involves a plant relocation); NLRB v. Winn-Dixie Stores, Inc., 361 F.2d 512 (5th Cir.), cert. denied, 385 U.S. 935, 87 S.Ct. 295, 17 L.Ed.2d 215 (1966) (case involves closing only a part of the operations at one of the employer’s warehouses); NLRB v. American Manuf. Co. of Texas, 351 F.2d 74 (5th Cir. 1965) (case involves contracting out).
Citation to these cases demonstrates an inherent failing in the majority opinion — economic partial closings are closely analogized to contracting out and plant relocation. See Maj. Op. at p. 724, n. 10; p. 730; pp. 735-736. In my view, such cases are entirely different than cases involving a decision to close one’s business. *745Plant relocations, contracting out, and the closing of an operation within a plant, involve decisions by management which of necessity call for the replacement of existing employees with others. This feature is what mandates discussion by the employer with the employees and it is this feature which is conspicuously lacking in the instant case.

. Judge Biggs, in distinguishing Fibreboard in Royal Plating, found that the critical difference between contracting out and an economic partial closing is that in the latter case the decision is one which involves a major change in the economic direction of a company. Royal Plating & Polish Co., supra, 350 F.2d at 196. His apparent belief was that to require bargaining over such a decision would significantly abridge the employer’s freedom to manage his business. Of like effect are the decisions of the Eighth Circuit.
In NLRB v. Adams Dairy, Inc., supra the Eighth Circuit almost simultaneously with the decision in Royal Plating came to the conclusion that the dairy’s decision to liquidate the part of its business handling distribution of milk products, without consultation with the union, was not a subject of mandatory bargaining because it was outside of the limited scope of Fibreboard, 350 F.2d at 110-13. See Royal Typewriter Co. v. NLRB, supra, 533 F.2d at 1039 (rejecting the Board’s narrow reading of Fibreboard in Ozark Trailers, Inc., 161 NLRB 561, 564-70 (1966) that an employer operating two or more plants is obligated to bargain with respect to the closing of one of them); NLRB v. Drapery Manuf. Co., supra, 425 F.2d at 1027-*74628 (Blackmun, J., now Associate Justice, sitting on panel) (distinguishing Fibreboard and Ozark Trailers, the court holds that the decision of a parent company to close its subsidiary involved a major shift in investment capital, hence the decision to close not a mandatory bargaining subject under Fibreboard).

. Because the majority require mandatory bargaining, they endeavor to take this case out of the type outlined by Justice Stewart as non-mandatory bargaining subjects. Maj. Op. at 733, n. 79. The attempted distinction does not succeed, for although it is true that the decision to close partially is not a decision to allocate finances for advertising, to utilize labor-saving machinery, or to go out of business entirely, Justice Stewart did not limit his remarks to such specific events. Rather, he spoke generally of decisions like those above, which involve “commitment of investment capital and the basic scope of the enterprise” which are “not in themselves primarily about conditions of employment.” Fibreboard Paper Products Corp. v. NLRB, supra, 379 U.S. at 223, 85 S.Ct. at 409 (Stewart, J., concurring). The decision partially to close a business is primarily a decision of how to commit capital and involves the basic scope of the enterprise.

. Section 8(a)(3) makes it an unfair labor practice for an employer “by discrimination in regard to hiring or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization . . . 29 U.S.C. § 158(a)(3) (1970) .

. The Court did note, however, that “a discriminatory partial closing may have repercussions on what remains of the business, affording employer leverage for discouraging the free exercise of [employee] rights . . . .” Textile Workers Union v. Darlington Manuf. Co., 380 U.S. 263, 274-75, 85 S.Ct. 994, 1002, 13 L.Ed.2d 827 (1965) (emphasis supplied). See Royal Plating & Polishing Co., supra, 350 F.2d at 196 n. 4; Rabin, Fibreboard and the Termination of Bargaining Unit Work: The Search for Standards in Defining the Scope of the Duty to Bargain, 71 Colum.L.Rev. 803, 816-21 (1971) .
The Board has interpreted Darlington’s holding that a partial closing for discriminatory reasons violates section 8(a)(3) as support for finding a section 8(a)(5) violation in an economic closing. See Comment, “Partial Terminations,” supra, 14 U.C.L.A.L.Rev. 1098-99. Darlington, however, cannot be read so broadly:
Section 8(a)(3) is intended to prevent the employer from using discrimination to destroy the bargaining strength of the union. Different considerations are involved when scrutinizing an act allegedly violating section 8(a)(5). Under section 8(a)(5), the effect on labor’s bargaining position of insulating “partial termination” decisions must be considered, but also to be considered are the consequences of allowing labor to participate in capital reallocation decisions. . . . Since the question of whether the employer must bargain was not an issue in Darlington, the Court did not have to consider the effect of its ruling on the free allocation of capital. Hence, the NLRB’s reliance on Darlington is misplaced when analyzing section 8(a)(5) cases involving free allocation of capital.
Comment, “Partial Terminations,” supra, 14 U.C.L.A.L.Rev. 1099 (footnotes omitted).

. See Schwarz, Plant Relocation or Partial Termination — The Duty to Decision-Bargain, 39 Fordham L.Rev. 81, 100 (1970) (“Decision-bargaining should be required in all cases where the employer plans to substitute non-unit workers for unit workers.”).

. The majority do suggest that nothing compels agreement by the employer with the union’s request to stay in business. Although it is true that collective bargaining under section 8(d) “does not compel either party to agree to a proposal or require the making of a concession,” 29 U.S.C. § 158(d) (1970), this alone is not enough to outweigh the many problems which may arise during the pendency of the negotiations. See infra.

. If the economy is to function effectively, capital must be free to flow from one use to another, from a sterile area of the country to one alive and productive. Such free flow of capital is essential to the efficiency, growth, and well being of a dynamic economy. See Comment, "Partial Terminations,” supra, 14 U.C.L.A.L.Rev. 1091 (the courts have “an obligation to consider the effect on the economy of labor participation in capital reallocation decisions”).

. The free flow of capital is not only essential to a Strong and vibrant economy, it is also in the sound interest of labor. “The achievement of labor’s goals is also linked to the performance of the economy, and the performance of the economy is linked to the ability of entrepreneurs to make rational economic decisions concerning the manner in which their capital is invested.” Comment, “Partial Terminations,” supra, 14 U.C.L.A.L.Rev., supra, 1094 — 95.

. It is unclear to me whether the majority have remanded this case to the Board for additional proceedings or whether they have denied enforcement without prejudice. I can agree with neither result, as I believe that no additional action is necessary and that enforcement on the present record must be denied with prejudice.

. The majority suggest that to the extent that Brockway’s decision to close is due to the high cost of production, negotiations could be fruitful. The facts of this case, as well as ordinary experience in industrial relations, suggest the contrary. When, as here, a union and employer have unsuccessfully negotiated over terms of a collective bargaining agreement for many months, it is hardly conceivable that the union will consent to a decision which will terminate the employment of its members and possibly the union local itself, or that the employer can be persuaded to operate uneconomically. The duty on the employer to discuss and negotiate the “effects” of the closing, see Royal Plating & Polishing Co., supra 350 F.2d at 196-97; n. 6, supra, will provide ample opportunity for the employer to reconsider the closing if it has imprudently failed to give proper weight to all considerations prior to its decision. The intrusion into employer prerogatives advocated by the majority may well lead to mischief in the national economy.