Kellogg Company v. NLRB, 15-2183

Background

Kellogg and Bakery, Confectionery, Tobacco Workers & Grain Millers Local 252‑G were governed by a multiplant Master Agreement (2012–2015) and a plant‑specific Memphis supplemental agreement (2010–2013). The Master Agreement covered only "matters specifically included" therein and mentioned casual/non‑regular employees only in the Wage Appendix (a $6/hour differential).
The Memphis Agreement defined a "casual program," limited casuals' scope (used after overtime offered to regulars, capped at 30% of regulars, not used during most layoffs) and set local rules for casuals.
In successor negotiations (Sept–Oct 2013), Kellogg proposed expanding the casual program to allow casuals to perform any bargaining‑unit work indefinitely, grant them seniority/grievance/bidding rights, and otherwise alter their status; the Union refused to negotiate these proposals and negotiations reached impasse.
Kellogg served a Last/Best Offer and locked out ~200 Memphis bargaining‑unit employees when the Union did not accept; the Union filed unfair‑labor‑practice charges.
An ALJ found Kellogg’s proposals pertained to the Memphis Agreement (a mandatory bargaining subject), concluded impasse was bona fide, and held the lockout lawful; the Board reversed, concluding Kellogg’s proposals "effectively" modified terms of the unexpired Master Agreement and thus the lockout violated Sections 8(a)(1), (3), and (5) of the NLRA.
The Sixth Circuit granted Kellogg’s petition for review, held the proposal did not modify any express term of the Master Agreement, and vacated the Board’s order because the Board failed to follow/explain departure from Milwaukee Spring.

Issues

Issue	Petitioner (Kellogg) Argument	Respondent (NLRB) / Union Argument	Held
Whether Kellogg’s proposal constituted an unlawful mid‑term modification of the unexpired Master Agreement	Proposal did not alter any express Master Agreement term; Master disclaims implied terms and only mentions casuals re wages	Proposal would "effectively" erase any distinction between regular and casual employees and alter wages/benefits for future hires	Court: No — proposal did not modify any express Master Agreement term; Board erred to rely on "effective modification" without identifying a modified contract term
Whether the Board may rely on an "effective modification" theory (implying a work‑preservation term) absent a specific contractual term	Milwaukee Spring prohibits implying a work‑preservation clause; Board must identify a specific contract term that was changed	Board claimed later precedent permitted effective‑modification findings and that the Master’s silence supported an ordinary meaning of "casual"	Court: Milwaukee Spring controls; Board must identify a specific term contained in the CBA; it cannot create an implied work‑preservation term here and failed to justify departing from precedent
Whether Kellogg lawfully locked out employees after impasse over the proposals	Because proposals were mandatory subjects under the Memphis Agreement (not mid‑term modifications), impasse was bona fide and lockout lawful	Lockout was coercive because it sought to force acceptance of a mid‑term modification of the Master Agreement	Court: Lockout lawful — impasse existed and the proposals were not unlawful mid‑term modifications of the Master Agreement
Standard for reviewing Board’s departure from precedent	Court should require Board to explain departures from established precedent; absent explanation, court cannot defer	Board argued its interpretation of NLRA is reasonably defensible and entitled to deference	Court: Board must explicitly and rationally justify departures; here it neither cited nor explained departure from Milwaukee Spring, so its decision was vacated

Key Cases Cited

NLRB v. Wooster Div. of Borg‑Warner Corp., 356 U.S. 342 (Sup. Ct.) (no duty to bargain over mid‑term modifications absent reopener)
Litton Fin. Printing Div. v. NLRB, 501 U.S. 190 (Sup. Ct.) (deference to Board unless interpretation unreasonable)
Milwaukee Spring, 268 N.L.R.B. 601 (NLRB 1984) (Board will not imply a work‑preservation clause or find a mid‑term modification absent a specific contractual term)
Horsehead Res. Dev. Co. v. NLRB, 154 F.3d 328 (6th Cir.) (lockout unlawful if motivated by hostility to collective‑bargaining process)