711 F.3d 281
2d Cir.2013Background
- Stella D’oro Biscuit Co. (now SDBC Holdings, Inc.) challenged an NLRB ruling that it unfairly refused to let Local 50 obtain a copy of Stella D’oro’s 2007 Financial Statement during bargaining.
- Brynwood Partners acquired Stella D’oro in 2006; Brynwood funded improvements and was prepared to subsidize losses to reach profitability.
- A current CBA with Local 50 ran June 29, 2005–June 29, 2008; negotiations for renewal began May 30, 2008.
- At the May 30, 2008 meeting, Stella D’oro presented a May 2008 financial report showing losses and rising input costs.
- Jacoby, Hartong, and Brynwood executives discussed the need to reduce labor costs to maintain viability, with Brynwood willing to fund losses temporarily.
- Jacoby provided the Union with a 2007 Financial Statement for inspection but refused to give a copy to retain, citing confidentiality concerns.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the employer’s asserted inability to pay required substantiation. | Stella D’oro claimed it could not meet union demands without restructuring costs; evidence shows parent funding. | Board erred by treating lack of funds as inability to pay; evidence shows willingness and access to capital. | Insufficient evidence of inability to pay; no duty to substantiate beyond what was offered. |
| Whether the Board properly applied Nielsen/Stroehmann on information disclosure. | Stella D’oro complied by offering multiple inspection avenues and access at offices. | Board misapplied Stroehmann; parent funding context matters in ability to pay. | Board’s application was deficient; Stroehmann/Nielsen not properly distinguished. |
| Whether providing a photocopy was required to satisfy disclosure obligation. | Union needed copies to substantiate unprofitability claims. | Inspection and notes sufficed; confidentiality acceptable. | photocopy requirement not established; multiple inspection options were adequate. |
| Whether unilateral changes after impasse violated the NLRA. | Union’s inability-to-pay argument justified bargaining concessions; impasse never valid. | No unfair labor practice since bargaining failed and impasse arose. | No valid unfair labor practice; impasse existed after lawful bargaining. |
| Whether failure to reinstate strikers after unconditional return offers violated NLRA. | Union members offered unconditional return; employer had to reinstate. | Employer not required to reinstate when unfair labor practices absent and terms changed. | No NLRA violation; reinstatement not compelled under the circumstances. |
Key Cases Cited
- Nielsen Lithographing Co., 305 N.L.R.B. 697 (1991) (distinguishes inability-to-pay from mere economic hardship; employer must substantiate if unable to pay)
- Stroehmann Bakeries, Inc. v. NLRB, 95 F.3d 218 (2d Cir.1996) (necessity of reviewing parent funding context; limits on disclosure when not necessary)
- United Stockyards, 293 N.L.R.B. 1 (1989) (pre-Nielsen; ineffective to rely on it post-Nielsen for parent-subsidiary funding issues)
- Truitt Manufacturing Co., 351 U.S. 149 (U.S. 1956) (duty to substantiate inability-to-pay claims varies by case; honest claims required)
- NLRB v. Acme Indus. Co., 385 U.S. 432 (1967) (employer must provide information needed for bargaining; general obligation to inform)
- Abercrombie & Fitch Co., 206 N.L.R.B. 464 (1973) (reference for copying vs. reviewing materials curiosity)