§11.7 Basic Business Decisions
Library | Labor and Employment Law: Private Sector (OSBar) (2011 Ed.) |
Questions often arise whether fundamental management decisions affecting unit employees (such as decisions to sell or relocate facilities or decisions to transfer or subcontract bargaining-unit work) are mandatory subjects of bargaining requiring good-faith negotiations with the union. These issues are discussed in §§11.7-1 to 11.7-3.
§11.7-1 Change of Operations
An employer's change in operating practices or structure is a mandatory subject of bargaining if that change has a significant effect on unit employees, NLRB v. Columbia Tribune Pub. Co., 495 F2d 1384, 1390-1391 (8th Cir 1974) (automation eliminating 50% of unit jobs), but not if the effect of the change on union-represented employees is minor, Retail, Wholesale & Dep't Store Union v. NLRB, 466 F2d 380, 384-385 (DC Cir 1972) (the elimination of certain machines "had no significant effect on the job of any worker").
§11.7-2 Business Closures
An employer is free to terminate its entire business without good-faith bargaining with the union representing its employees, even if the motivation for doing so is to avoid dealing with the union. Textile Workers Union v. Darlington Mfg. Co., 380 US 263, 273-275, 85 S Ct 994, 13 L Ed2d 827 (1965). However, if the closing of a business is "motivated by a purpose to chill unionism in any of the remaining plants of the single employer," the closure is unlawful. Textile Workers Union, 380 US at 275-277.
An employer may unilaterally decide to close part of its business for economic reasons without bargaining with the union that represents employees at the affected operation if the employer is not motivated by hostility toward the union and has made its decision for purely economic reasons. In First Nat'l Maintenance Corp. v. NLRB, 452 US 666, 679, 101 S Ct 2573, 69 L Ed2d 318 (1981), the Court reasoned that, "in view of an employer's need for unencumbered decisionmaking, bargaining over management decisions that have a substantial impact on the continued availability of employment should be required only if the benefit, for labor-management relations and the collective-bargaining process, outweighs the burden placed on the conduct of the business."
The Court also stated that "in establishing what issues must be submitted to the process of bargaining, Congress had no expectation that the elected union representative would become an equal partner in the running of the business enterprise in which the union's members are employed." First Nat'l Maintenance Corp., 452 US at 676. The Court concluded that "the harm likely to be done to an employer's need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union's participation in making the decision." First Nat'l Maintenance Corp., 452 US at 686. Accordingly, the Court held that the employer's "decision itself is not part of §8(d)'s 'terms and conditions'. . . over which Congress has mandated bargaining." First Nat'l Maintenance Corp., 452 US at 686. See 29 USC §158(d) (NLRA §8(d)).
In a partial-closure situation, even though the employer may have no duty to bargain about the decision to close, the employer has a duty to bargain about the...
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