Conagra, Inc. v. National Labor Relations Board

effectively Board’s conclusion that Molinos Berzon, Francisco, CA, Marsha S. San ar- pay” wages pro- claimed gued the cause amicus curiae American posed by Union, thereby triggering an Congress Federation of Labor Indus- obligation provide supporting financial in- Organizations, trial with whom Jonathan upon request, represented formation an un- Hiatt, Boston, MA, Coppess, and James B. acknowledged unexplained departure DC, Washington, were on the brief. from the Board’s decision in The Nielsen WALD, Before WILLIAMS and Lithographing Company, 305 N.L.R.B. 697 RANDOLPH, Judges. (1991). Circuit reject We also the Board’s conclu- engaged sion that Molinos unlawful “sur- Opinion for the Court filed Circuit bargaining,” face as unsupported by substan- Judge WALD. tial in the evidence record considered as a regard whole. With finding to the Board’s Separate concurring statement filed ConAgra that a executive violated the Act Judge Circuit WALD. seeking provision condition the of financial WALD, Judge: Circuit information to on the Union the Union’s In withdrawal of an Rico, practice” June of “unfair labor Molinos de Puerto (“Molinos”), charge, we wholly-owned remand the matter to the Inc. subsidiary for its consideration of ConAgra, finding whether this Inc. (“ConAgra”), began negoti- may despite rejection our stand other ating Congreso de Uniones Industr- . findings. (“the Union”) de iales Puerto Rico concern- ing the establishment aof new collective Background I. (“CBA”). bargaining agreement parties quickly respective proposals found that their began Molinos and the Union radically were different: The Union wanted for a new CBA on June 1993. Molinos’ explain its presentation writing and to relevance initially representatives made negotiations, stating: petitions are position impor- “[0]ur focused Molinos’ statement, the financial but more so gap on the be- based on ConAgra, and tance within competitiveness against on the of our costs under wages paid Molinos tween the we by market that have that which is much existing paid [sic] those Molinos’ and CBA ours,” and: “The that presenta- The lower than issue we competitors in Puerto Rico. Company’s ability bringing are is not the showing that Molinos a chart tion included pay, competitiveness more in so the our hourly while average wage paid $17.84 market, specifically in our labor costs.” Id. and competitors paid $5.64 between its representative at 1003-04. The Union’s ac- $13.76, profits showing that Molinos’ another knowledged that he understood Molinos’ as- in represented ConAgra’s profits 1.6% of you saying that the sertion: “What indicating that Molinos’ another and Company alleging is not does not have had volume in animal feed declined sales ability pay.” the Id. 1004. Subse- prior year. After the sharply during the quently, September on the sent Union pre- negotiator presentation, Molinos’ chief reiterating a its information Molinos letter proposal to with Molinos’ sented the Union request, adding request and a for the names the next wages from At $17.84 $11.11. cut all the past of Molinos’ clients for three session, representative accused the Union years; explanation no the letter included faith. bad Molinos’ Molinos of requests the for these or of their reasons pro- representative acknowledged that the process. bargaining relevance to the “radical,” adding that “we need posal was competitive,” the company want “[w]e be and through parties The to meet the continued (“D.A”) Appendix continue.” Deferred October, no end of but made substantial then and Molinos devoted 959.1 The Union progress wage on the issue —the Union stood to non- eight negotiating next sessions the by wages then- demand to increase above proposals. levels, economic existing while Molinos continued existing propose reducing below lev- parties wage proposals returned the for repeated request Union fi- els. The session, held on at their eleventh (midway one through information ne- nancial 14,1993. representative September Molinos’ session, gotiating representative the Union’s Moli- began by reintroducing graphs that “sales, Molinos’ requests added for records of pre- Manager used in his nos’ General had contracts,” every one and “what each and session, soliciting the first and sentation at administrators, managers, supervisors, response compo- individual the Union’s salespersons Company, and owner of the proposals, nents of Molinos’economic each earn,” 1034), while Molinos continued rejected. repre- The Union which the Union that was to assert it had never claimed then stated that the Union wanted sentative poor or was unable to financial condition proposal, called for an to use its own which by and to wages sought hourly wages from increase in $17.84 explain the ask that the Union relevance $20.00, negotiation. basis for Molinos’ as the the requested information. representative the Un- agreed consider representative Moli- On Molinos’ de- wage proposal, but October ion’s reiterated offer,” company’s and final costs in “last nos to reduce its overall labor livered needed parties along stating stay competitive. point, At this letter order impasse giving the Union turn requested that Molinos over its reached Union its facili- prior notice of Molinos’intention close certified financial statements out representative evening. ties locked years. asked Molinos five Molinos’ 1, citing the failure request employees November the Union to submit its information However, Spanish. presented quota- passages statements were made in 1. The here as direct directly by negotiation parties began tions are taken each session from record, necessarily session, verba- from the but are not previous ratifying the minutes from many were re- tim. In cases statements challenged accuracy party has neither minute-taker, , a ste- corded rather than appeal. in this of the recorded statements device, nographer recording many regarding a agreement Rivera-Vega new CBA. abuse of to reach discretion. v. ConA (1st Inc., Cir.1995). gra, the Union demanded that On November F.3d “profit margin for the Molinos disclose 13, 1995, On June one of the Board’s Ad- belong feed rest of the industries (“ALJs”) Judges ministrative Law issued a ConAgra group, operational how much is the finding decision Molinos had failed comparison item it with cost for each bargain good withholding faith informa- competitors geographical other within its obligated provide, tion it was purposely for within the state of the United States state creating bargaining “impasse,” making [sic], analyze where it is located changes unilateral in the terms and condi- competitiveness margin com- followed employment tions of of a the absence industry compared pany said feed with its Inc., genuine impasse. ConAgra, See 321 analogue in the Id. United States.” 944, (1996). 949-65 The Board af- letter, provided In December 29 Molinos 20, findings August firmed the ALJ’s regarding the Union with Moli- information 1996, 944-46, id. at with one member dissent- wages, competitors’ wages, pen- nos’ its its (Member ing. Cohen, Id. at 946-47 dissent- plan, temporary sion and the number of ing part). in appeal This followed. mills, employed workers at Molinos as- serted Union was “not to entitled” II. Discussion requested regarding information financial A reviewing court sets aside decisions statements, years’ an additional two worth of the Board when the Board has acted competitors, information on to sales or arbitrarily or applying otherwise in erred regarding ConAgra information companies facts, law established or when its Molinos; other than Molinos also claimed findings supported by of fact are “sub- that it no contracts its competitors had with stantial evidence” in the record considered as and did not understand the Union’s reference Corp. a whole. See Allegheny Ludlum v. “ConAgra to group.” Id. 839. The NLRB, (D.C.Cir.1997); 104 F.3d 1358 parties unsuccessfully met -with a mediator 160(e) (1994); § see also 29 U.S.C. Universal November, several times between 1993 and NLRB, Corp. Camera v. 340 U.S. 71 February, 1994. (1951). 456, 95 S.Ct. L.Ed. 456 With this mind, standard of review we turn to the In petitioned the Board a federal findings underlying Board’s the challenged injunction temporary pro- district court for a order. hibiting refusing bargain Molinos from to faith, good refusing supply relevant infor- A. Molinos’ to Provide All Refusal mation requested by unilaterally Requested by Financial Information changing employ- the terms and conditions Union

ment, locking or employees.2 out Union See Inc., ConAgra, Rivera-Vega v. F.Supp. 876 An employer commits an “unfair (D.P.R.1995). 8(a)(1) Finding 8(a)(5) practice” §§ there was labor under with, “reasonable cause” believe that by interfering Molinos the Act restraining, or Act, had violated the and that the coercing Board’s employees in the exercise of practice” likely “unfair labor charges were right organizations their to form labor merits, succeed on the bargain collectively, the district court see 29 U.S.C. granted requested preliminary injunc- 158(a)(1), § refusing bargain collec tion; injunction expire tively was to legitimate automati- with the representatives of cally upon disposition 158(a)(5). final employees. § See id. at The charges. duty at 1372. The First bargain Circuit collectively duty includes the grant injunction affirmed the later that good to meet and confer “in faith” with em year, holding ployee that the district court’s order representatives respect wages, hours, constituted neither “clear error” nor an and other terms and conditions of 10(j) 2. Section of the Act complaints authorizes alleging Board’s issuance of viola- request, grant, "appropriate and federal courts to (1994). § 160(j) tions of Act. See 29 U.S.C. temporary upon restraining relief or orderfs]” 158(d). decisions, duty trilogy Seventh Circuit §at employment. Id. “change obli includes the Board underwent a of heart.” Id. good faith also bargain with information the union gation First came NLRB v. Harvstone Manufac process to the collective relevant (7th turing Corporation, 785 F.2d Cir. See Detroit Edi circumstances. in certain 1986), rejected in which the Seventh Circuit 301, 303, NLRB, 99 S.Ct. 440 U.S. v. son Co. finding, see Harvstone the Board’s Manufac (1979). Although L.Ed.2d 333 (1984), turing Corporation, 272 N.L.R.B. 939 concerning information relevance of representative that the of several pre employment is and conditions of terms companies effectively fighting fixture sumed, Company, Power see Ohio pay” by warning claimed an (1975), presumption no such N.L.R.B. 987 negotiators for an electrical worker’s union regard employer’s information applies to an companies that if “don’t make a reason condition, structure and ing its financial profit they competi so can be a viable able any requested a union must demonstrate business, business, they stay won’t tive nego is relevant to financial information Harvstone, jobs.” one will have no require tiations order F.2d at 576. The court declared that such it over. International Woodwork turn truisms,” “nothing than (D.C.Cir. statements more NLRB, v. 263 F.2d ers employer operates “if an at com because a 1959). time, petitive enough for a disadvantage long Manufacturing Truitt Com In NLRB v. profit margin, pure a eco its as matter of pany, 351 76 S.Ct. 100 L.Ed. U.S. nomics, eventually forcing it out will decline (1956), Supreme spoke to Court the 577. The rea of business.” Id. at court employer’s of and how an question whether these, that, if to soned statements suffice during negotiations and conduct statements disclosures, require financial then asser employer’s financial informa can cause the acceding tion that to union’s demands the negotiations. to relevant to tion become perpetuate competitive dis would create that, negoti in the context of The Court held could as claim advantage be characterized CBA, employer’s over a new an “refus ations point “inability pay” to at in the of some attempt a claim of inabil al to to substantiate demanding is future what the union pay wages may support a ity to increased Therefore, present time. the court declared good to finding bargain of a failure faith.” period” against which that “the relevant time at 756. The Court em Id. at 76 S.Ct. such statements is not “indefi- assess saying phasized it was not that the union that future, only the term of the CBA nite[ ]” every supporting information is entitled to “quite negotiation, generally since is under inability raised in which economic is case employer pay could in- conceivable” that an increasing argument against wages; rath an CBA, wages during the of term one creased er, case “[e]ach the Court noted that must put wages would paying even if these upon particular inquiry facts. The turn its Id. competitive disadvantage. at a employer always or not under the must be whether Thus, employer court that an held when particular of the case stat circumstances by the wages asserts that demanded obligation bargain good faith has utory put competi- at a employer union would 153-54, 76 Id. at S.Ct. been met.” not disadvantage, employer does tive omitted). (footnote Prior the Board provide obligate supporting thereby itself oblige Truitt em construed the decision to information unless these statements financial with ployers supporting unions competitive disadvan- suggest also that this employ when the financial information even inability tage give to an would rise put tending finan its er’s statements wages during the union demanded in issue consisted of assertions cial condition negotiation. See id. term of the CBA under wage the union’s demands acceding not that the record did Because it concluded “competitive or exacerbate would create support find- evidence to include substantial Local disadvantage.” United Steelworkers (D.C.Cir. respondent employers NLRB, ings some of the v. 983 F.2d 1993). however, financial hard- such imminent response had claimed Subsequently, order, ably refused to enforce the ship, criticizing the court set aside the the Board regard employers. failing respond with to those order criteria laid id. at 581. down in its opinion.3 Harvstone (now court, with then-Judge Judge) Chief after the Two months Seventh Circuit’s writing, interpreted Posner an Truitt as at- decision, the Board a deci- Harvstone issued “bluff, tempt guess- to limit the amount Lithographing Company, in The sion Nielsen work, and sheer gambling” unions must (1986), affirming N.L.R.B. 877 ALJ’s engage negotiations. in during contract Ab- finding negotiator that the for the Nielsen employer-held sent access to information (“Nielsen”) Lithographing Company had ef- necessary employer’s to evaluate the claim of fectively pay” wages claimed inability observed, pay, the court that, stating the union demanded de- faces the holding “Hobson’s choice” either profitability, spite company’s current wage hope fast to its in the rejection company’s proposed demands union’s (the employer bluffing “Russian roulette” economic concessions would lead to loss of business, jobs option), or possible abandoning wage failure with demands that company the result that the “could not com- might fact have been able to pete.” support easily. See id. 877 n. 879. In afford Id. 1065. The court noted finding, had the ALJ referred to Niel- application that the ALJ’s of Truitt to Niel- losing sen’s assertions been busi- sen’s did not “an statements constitute irra- competitors, ness it needed to decisión, tional extension” because bring fringe benefits more in employer’s prediction company’s that the fu- competitors line those in order to ture be if wage will bleak concessions “compete,” “protect jobs em- [its] claim,” is a made “serious and factual ployees,” “[t]o survive.” Id. at 879. The must, arguably one which the union in order ALJ also had cited the Board’s Harvstone engage to in bargaining,” per- be “[i]nformed decision, which the later Seventh Circuit crit- to using mitted evaluate employer’s fi- icized and refused to enforce in full. See id. nancial data. Id. It nevertheless concluded n. Although 5. the Seventh Circuit that the total failure to address the rendered its Harvstone decision between the Seventh Circuit’s Harvstone decision consti- ALJ’s decision and the Board’s decision af- evasive, “disingenuous, tuted and ... dishon- firming findings, the ALJ’s the Board made disregard est” judicial precedent, of relevant no reference to the Circuit’s Seventh criti- and that the Board’s order could not stand “inability cisms of pay” analy- the Board’s to attempt by without some the Board to deal sis. See id. at 877. Nielsen asked the Board with Harvstone. Id. at 1067. The court light to reconsider its in of decision Harvst- that, reminded the Board on reconsideration one, refused, but claiming the Board order, of its Nielsen it could hew its petition Nielsen’s for reconsideration failed original position acceptable it was an any already assert matter that it had not reject “extension” Truitt and the court’s considered. Lithographing Nielsen Harvstone, proffered guidance in or it could N.L.R.B., Company v. 854 F.2d 1066 accept Harvstone conclude that the facts (7th Cir.1988) I”). (“Nielsen in distinguishable Nielsen were from those in sought Nielsen review of the gravitational Board’s Harvstone and “within then field Circuit, predict- Truitt”; order the Seventh which beneficently it declared that it (decided 1986); Nielsen, apparently 3. The Seventh Circuit believed that it March 279 N.L.R.B. (decided had not issued its 1986). rate, Harvstone decision until May any at 877 At after the Board rendered its first Nielsen decision. thought inappropriate court it for the Board in (“[R]ight See id. at 1065-66 after [the Board] Nielsen offer no "reasoned discussion” ruled one].... favor of the we [Harvst- decided court’s Harvstone decision because the Board's gifted did not [W]e think the Board analysis "inability pay” plainly claims con- prevision with and therefore able to read analysis proffered flicted with the sion, deci- they evaluate our decisions before are ren- criticizing and this rationale for the Board’s dered.”). Actually, the court's Harvstone deci- ap- initial refusal to reconsider Nielsen remains issued sion two months the Board’s first before propriate. Id. Harvstone, Nielsen decision. 785 F.2d at 570 regarding if its current economic condition. happy to Harvstone” “be reexamine would (Chairman 700; id. at id. at criticisms of See compelling Board offered cf. dissenting).4 Stephens, But the bottom line was decision. Id. not Harvstone could coexist that Nielsen and petitioned The union the Seventh Circuit or ex- some further accommodation without deny enforcement of Board’s Nielsen planation by the Board. order, to overrule or asking court distin Nielsen, guish Graphic its the Board aban- Harvstone decision. See On remand of NLRB, Int’l Union v. decision and sub- Communications own Harvstone doned Cir.1992) (7th (“Nielsen IF). “guidfanee]” of the Seventh F.2d mitted (with Circuit, then-Judge releasing obligation The court Posner once Nielsen from the declined, provide again writing) union with financial informa- satisfied refusing Board was within discretion in Lithographing See The Nielsen Com- tion. (1991). that it “extenfd]” The Truitt the fashion pany, 305 N.L.R.B. previously permissible. would be agreed indicated it with the Seventh Cir- Board said I, Harvstone, Nielsen 854 F.2d 1065. Truitt analysis in temporal cuit’s decision, noted, proposition it stood for the announced that would thenceforth deal (of implied or “express that an threat bank pay” by employer claims of ruptcy)” obligation triggers employer distinguishing between statements information, supporting financial and because inability pay union asserting conduct was in the no such threat discernible com the term of proposals point during at some companies in by the relevant ments made negotiation, CBA under Nielsen, apply Harvstone or Truitt did in a suggesting, and conduct statements II, case. Nielsen its own force either fashion, general to union more that accession time, At same F.2d court difficulties demands would create “economic receptivity argument ad- signaled its layoffs.” prospect or or business losses vanced Chairman case, 700. In held Id. at Nielsen’s by stating that “fi]f Board’s Nielsen decision company’s negotiating statements employer] poverty, makes claims of [an clearly susceptible were not and conduct claim, other substantiatable factual “can’t the CBA inter- [within term]” substantiate the claims if the union so must obligation trigger pretation that would Nielsen, 1171; compare demands.” Id. represen- over turn financial data —Nielsen’s (“The 706 Truitt di- 305 N.L.R.B. at classic repeatedly it tative had stressed that contin- evolved, chotomy, ‘inability as it has between profit (although turn claimed to be ued to ‘unwillingness pay’ to is intended to and losing competitors), to disavowed business distinguish objective between an factual pay, merely inability claim of and said verification) (subject subjec- and claim difficulty meeting in it would face union- (not verification).”) subject claim tive proposed unspecified point “at an labor costs ” (Chairman Stephens, dissenting); id. 706- In so ‘in the future.’ Id. at 700-01. hold- I). (citing Nielsen Thus endeth the 07 rejected ing, Board Chair- colloquy. Circuit Board-Seventh argument employer that an should be man’s Meanwhile, petitioned our own supply supporting a union obligated to Pipe a claim that for review of the Board’s Concrete information whenever makes court decision, verifiable, 305 N.L.R.B. 152 objectively and that Nielsen had and Products (1991), Nielsen but very which was similar to obliged to turn over financial informa- itself In United by objectively was decided two months earlier.5 making tion verifiable claims “subjective, judgmental, and theoreti- Board wrote a brief concur- numerous 4. One other member Oviatt, (Member opinion, majority's ring agreeing hold- concur- with the cal factors.” Id. 702 (Chairman ing, ground Stephens, but somewhat different ring); on the 707 dissent- id. at cf. regarding the claims future effects of Nielsen's ing). acceding were not"suffi- union’s demands Pipe and Products deci- 5. The Board’s Concrete ciently provision verifiable” render the did cite Seventh Circuit’s Harvstone helpful sion not requested information decision, the Board later confirmed Con- process, projections of a business’ future because Pipe Products followed the Harvstone- and involve crete and financial condition are unreliable 1442

Steelworkers, we reviewed the Board’s find- over all request- financial information ed representative pipe findings of a concrete and avers ing that underlying this manufacturing company had violated the Act order are not inconsistent with its second by refusing the union with re- Nielsen decision with Con- Products,6 Pipe disagree. crete and In quested financial information after the com- We view, upon our representative facts relied the Board pany’s had warned the union clearly case fall on the other today’s side negotiators that survive mar- “[t]o dividing basically the Nielsen line and competitive, got ket we have to be able to be akin to those in Pipe Nielsen and in Concrete competitive be rates and bene- wage and and Products. Steelworkers, As Nielsen and Concrete be fits must lowered.” United Products, Pipe employer and the employer 983 F.2d at 242. The had also longstanding relationship union had a span- for “large countered the union’s demand Nielsen, ning prior Products, several CBAs. increase,” wage Pipe Concrete (over N.L.R.B. at thirty years); United proposal 305 N.L.R.B. at with a to re- Steelworkers, (thirty years); 983 F.2d at 242 wages thirty percent duce below their (over ConAgra, twenty level, N.L.R.B. at 949 by fifty per- current reduce vacations years). cases, As in cent, the other two the trou- premiums by reduce medical insurance began ble when the commenced fifty percent, holidays by fifty- and reduce negotiations for a new Steelworkers, CBA proposing percent. five See United dramatically reduce and benefits be- Rejecting contrary 242. F.2d at the ALJ’s low prior the levels set CBA. See finding, the had- that no found obli- Nielsen, (employer pro- gation to disclose financial information arose posed overtime, severe facts, wages, reductions on these because the statements made benefits, pay during layoffs, health severance employer’s representative “pertain[ed] pay, premium rates, holiday pay, shift declining market conditions attribut- benefits);. job retraining Pipe competition businesses,” Concrete able to from other Products, 305 N.L.R.B. at Products, (employer 156-57 Pipe Concrete 305 N.L.R.B. at proposed “steep cuts in wages” and severe employer’s representa- and because the -holidays, vacations, reductions in overtime employer] tive “did assert [the was breaks, pay, coverage); and medical ConA losing money or business was at gra, 321 N.L.R.B. 950 (employer proposed of closing some imminent risk down.” Id. at $11.11). hourly wages to cut decision, from review the $17.84 On we cases, In each employers’ the three noted that the Board’s distinction between representatives informed the union that the pay” “competitive claims and companies profitable, were disadvantage” but claimed that claims constituted “more re- wage necessary concessions were in order to reading” strictive Truitt than the Board protect improve ability compete. their previously applied requests to union Nielsen, 879; information, N.L.R.B. at employer financial Concrete but we held Products, Pipe 152-53; and 305 shift adequately explained this was ConAgra, 321 decision, N.L.R.B. at In 950-51. the Board’s second Nielsen and that us, case before principle heavily the Board leaned on announced in the second Niel- precise by statements this “permissible sen decision was effect made reading representatives, ConAgra’s including: “If broad terms of we [the Act].” United Steel- workers, do not take immediate 983 measures there are F.2d at 244-45.

probabilities we will be here the fu ture,” The Board asks us to enforce its Company’s or “I have seen the decline requiring der ConAgra Molinos and during to turn last years four ... situation [T]he principles Union; view, quested by derived explicitly the Board in his the statements adopted in its second Nielsen not, decision. See Niel representatives made Molinos' could con- sen, 305 N.L.R.B. at 700 n. 9. decision, sistently with the Board's Nielsen be "inability pay.” treated as of an assertions 6. disagreed The Board’s member with (Member ConAgra, See 321 N.L.R.B. at 947 Co- majority’s conclusion that Molinos was obli- hen, dissenting part). gated to turn over the financial information re- suggested reason ... we are not Molinos never fragile [I]f serious and is shipping already- ConAgra considering ... must cannot survive We was competitive we survive,” and something to be able flour to Puerto Rico was belief milled do provision requiring that “[T]hings pay wages [the like Molinos would be unable soap] are what employees provided be demanded nor did Molinos’ competitive and make us can makes not be imply or representatives state even shop we because cannot us have close opera- Molinos’ feed loss of sales in animal ConAgra, 321 N.L.R.B. at compete.” ina- tions would lead such immediate principled distinc- We can discern no 955. requested wages. bility pay Nor does and those the between these statements tion company’s announcement of intention trigger a disclo- Board found insufficient lay forty employees expiration off after the Pipe obligation in and Concrete Nielsen sure amount to a claim that it existing CBA indeed, Products; employ- some and employees could not afford to those more in those cases seem ers’ statements by the Union. demanded counterparts case. than their this alarmist fit Despite we see a neat between what Nielsen, (“[W]e 279 N.L.R.B. at 879 sim- record in this ease the Nielsen deci- and _”; compete “To we ply cannot survive sion, this the Board concluded that ease more compete. Our business must be able to Company, closely resembled Shell if employees’ jobs are stake we can- our (1993), a post-Nielsen case N.L.R.B. 133 line.”); not!”; job your “It that is on the is obligation wherein the Board found that Products, Pipe 305 N.L.R.B. at Concrete over to turn financial information demand (“[T]here competition has been intense employer’s statements and was created producers ... pipe concrete from several ConAgra, 321 N.L.R.B. at conduct. See imperative that Consequently it is we consid- Setting question aside the whether ... erably lower labor To survive our costs impossible itself is to reconcile with Shell got to today’s market we have be able Nielsen, comparison we the Board’s find competitive, competitive, wage be be Shell, ConAgra baffling with Shell —in lowered.”). must be rates benefits distinguished explicitly Nielsen on upon also relied state- The Board here representa- that Nielsen’s ground representatives the ef- ments Molinos’ that it still “repeatedly stated was tive considering ConAgra bypassing was fect Shell, profit.” N.L.R.B. at 133. making a by shipping already-milled flour to Molinos similarly representatives re- stated Molinos’ Rico, portion the animal feed Puerto profit- company remained peatedly that operations losing money and was Molinos’ able, negotiation ses- beginning with first portion losing vol- that the flour was sales 954, 1120; sion, see D.A. at announcement, ume, upon is- Molinos’ (“[F]or been able to years, we have down, of its after the broke sued profits from enjoy good [Molinos] some employees. lay forty off intention today Company to earn continues even ConAgra, 955. These 321 N.L.R.B. at (“[A]t ”); present, .... id. at profits similarly separate fail ease statements money though making is we Molinos even Pipe meaningfully from Nielsen Concrete l[o]sing money in the business. Molinos feed Nielsen, 279 N.L.R.B. and Products. See money.”); id. at company making as a (“If competitive] we more [become don’t clearly representatives and the Union’s losing greater even the recent trend continued to be that Molinos understood companies to other will amounts work 265, 286, 103, profitable. continue_”); Pipe Prod- Concrete and Thus, “axiomatic that an (“Our because is ucts, business is 305 N.L.R.B. 152 adjudication be consis must either agency many suffering declining market due to the prior adjudications or offer a rea tent competitive products....”). None new departure prece from basis for its reasonably soned inter- statements can be these FERC, F.3d. 1482, dent,” 1489 Kelley v. 96 preted as that Molinos was unable assertions (D.C.Cir.1996), find and because Board’s by demanded the Union ConAgra Molinos and violated negotiation. ing CBA under over the term of the refusing heavily to turn over all of the byAct infor- She relied for this conclusion on the requested by the rests mation Union on an “Contingency contents of a Plan” ConA- (indeed an unexplained unacknowledged) de- gra prior beginning sent Molinos parture precedent from Niel- view, her negotiations; Contingen- decisions, other we will not enforce sen and cy prepared that [Molinos] Plan “reveal[ed] upon portions of the order that rest bargaining proposals knowing they [its] finding. unacceptable so rejec- would be as to ensure leading impasse tion an Molinos’Alleged Bargaining” B. “Surface by a Id. also followed strike.” She rested negotiations When labor have findings this conclusion on her that Molinos “deadlock,” “impasse” or an an em presented reached “predictably the Union with unac- changes ployer’s working unilateral condi ceptable” proposals, merely through “went Act, necessarily tions not violate the do bargaining, motions” withheld from they generally do in the absence of an im obligated Union information it was passe. See American Fed’n Television demand, upon the Act to turn over ar- NLRB, and Artists v. Radio 395 F.2d ranged improved security replace- for and (D.C.Cir.1968). Predictably, unscrupu anticipation strike, ment workers in aof and exploit employers lous can this rule sabo “hastily” impasse declared while the Un- taging negotiations manufacture compromises. ion continued to offer Id. at impasse making while a show of agreed 962. The Board with the ALJ’s faith; in good practice this is referred to as analysis adopted finding. her See id. at bargaining.” “surface See 48 Am.JuR.2d La 945.7 (1994). § bor Labor Relations Us ing authority “to order the cessation of think We the Board’s conclusion that which in negoti behavior is effect a refusal to engaged Molinos bargaining” “surface is ate, directly which or or obstructs inhibits supported by not substantial evidence in the discussion, process of the actual or which Contingency record. The is certainly Plan against reaching reflects a cast of mind that ConAgra thought evidence and Molinos Katz, agreement,” NLRB v. 369 U.S. it likely that the Union would resist 1107, 1114, 82 S.Ct. 8 L.Ed.2d 230 proposed vigorously, prepar concessions (1962), the Board treats bargaining” “surface ing possible negotiations for a breakdown of 8(a)(5) See, § as a violation of of the Act. quite intentionally is different causing from Co., e.g., Horsehead Resource Dev. read, Fairly one. the Contingency Plan is (1996). N.L.R.B. The touchstone subject ConAgra the inference that or determining genuine for “impasse” whether a impasse Molinos wanted to create an employ “deadlock” at the existed time Rather, force plan to strike. er changes instituted unilateral the ab simply ConAgra shows that judg made a sence of possibility realistic that continu ment likely steadfastly Union was negotiations ation of the have would been any attempt resist cut wages below their Co., fruitful. See Broadcasting Taft levels; existing ConAgra and Molinos were (1967); petition N.L.R.B. review act judgment entitled to on this preparing denied, American Fed’n Television and possibility for the that the Union’s resistance Artists, supra Radio persistent strong enough would be negotiations The ALJ in deadlock the the case at bar and cause strike. concluded that applies principle Molinos entered This same these with a Molinos’ secu “predetermined rity budge” improvements arrangements resolve not from for hir position, workers, ing replacement its initial engaged that Molinos which ALJ bargaining” “surface and manufactured an treated as “Additional Evidence of Bad- impasse. ConAgra, 321 Bargaining.” (emphasis 958. Faith Id. at 960 re rejected 7. The finding, gaining member where the record showed lawful arguing majority improperly (Member that the used its bargaining. "hard” Id. 946-47 Co subjective judgments regarding the hen, substance of part). in employer's proposals the to find bad-faith bar- moved). Union; wages sought by seeking the the no took these actions Molinos doubt id., strike, but it “anticipation” explanation of a does in an of the information’s relevance constitute evi- follow the actions Finally, not to the negotiations. the Board bring about that Molinos intended dence judgment agreed with the ALJ’s that Moli- strike. the “anticipated” “hastily” impasse nos had declared an even display as the Union continued sufficient “smoking a Contingency the Plan as With flexibility genu- negate the existence of a mix, from the evidence of gun” removed the impasse. ConAgra, ine 321 N.L.R.B. at alleged bargaining” “surface is im- Molinos’ But Molinos’ announcement that be- permissibly bargaining pro- weak. Molinos’ parties impasse lieved the had reached sell, posals predictably a hard but not were parties’ came after the irreconcilable predictably as have been so unreasonable differences become in incontrovertible unacceptable-, proposed to reduce Molinos numerous fruitless sessions: Molinos was de- below their wages significantly and benefits levels, wages the termined to lower and benefits below existing not below levels levels, competitors including existing of Molinos’ their while the was several Union — represented by the same competitors union. determined to increase them above their ex- categori- D.A. at 1137. Nor did Molinos isting See proposal levels. Nor did the made cally proposals its as the refuse alter the Union after Molinos’ declaration of an week negotiations continued: One after impasse on conclu- cast doubt Molinos’ pro- parties began discussing the economic fail to sion further would proposed wages Molinos posals, increased persistent gap parties’ close between the benefits; later, two im- weeks Molinos it, proposals Union continued —in proposed coverage. medical proved press for increases in and benefits. these modifications failed advance When D.A. at 826. suggested negotiations, Molinos finding Because the Board’s that Molinos mediation; parties turn to the Union refused engaged sup- not bargaining” “surface was do so. See at 1021. Board also record, ported by evidence in substantial Molinos’ refusal to some of counted deny portions of those we enforcement requested by financial information finding.8 Board’s order that rest this bad faith. as evidence Molinos’ We Union U.A., already explained, supra Part have see why turn over all Molinos’ refusal to by ConAgra Findings C. Uncontested not requested information did constitute “summary this court The Board asks for itself, holding the Act but this

violation of findings of two of its enforcement” Molinos’ automatically not render con- does directly ConAgra not has addressed regard to request the information duct First, appeal. Brief for the NLRB at 20. alleged irrelevant to Molinos’ “surface bar- correctly ConAgra asserts the Board However, record gaining.” indicates separately not contest the Board’s find- does attempt not use the Molinos did issue ing ConAgra that a executive violated request the information to deadlock the ne- seeking Act to make Union’s with- contrary, sought Molinos gotations; practice charge unfair labor by repeatedly drawal pointing the issue out defuse in- quid pro quo ConAgra’s provision for claiming pay” it was not parties indefinitely long extend as had reached bona im- that would 8. Since fide employees passe, agreement. the Union parties Molinos’ lockout of were new employees’ bargain- did violate the collective ConAgra, nego- at 962-63. But the 321 N.L.R.B. NLRB, Bldg. ing rights. Ship Co. v. American tiations between Molinos and the includ- 300, 318, 955, 961, 13 380 U.S. 85 S.Ct. L.Ed.2d ing proposals exchanged parties’ both written (1965). The ALJ found that Molinos’ refusal during clearly negotiations, these satisfies subsequent the CBA to abide terms of modify requirement regarding a written intent unlawful, was both be- its scheduled termination parties agreement, and the fact that impasse genuine was no and because cause there agree- impasse negotiating a reached an new provided extend the CBA that it would for an prevented clause ment the automatic extension party year either indicated in additional unless taking agreement from effect. modify agreement, writing its desire by requested the Union. Final Brief formation of Petitioners 43. Unlike its 946, 957; Brief ConAgra, quid pro quo failure finding, to counter the However, ConAgra for at 20. the NLRB we cannot write off this failure to contest may assumption under the operated have possibility finding ConAgra Board that that, finding by knocking down Board’s finding dependent was upon assumed the by obliged that the Act to it was findings other which did contest: The requested by the financial information Un “joint employer” finding quite clearly rests ion, automatically bring it would down the authority on facts relating to that ConA- finding Perhaps as well. quid pro quo Molinos, gra any exercises over not that there is no such can demonstrate Board separate practice finding. unfair labor interdependence findings, these two between ConAgra, 321 N.L.R.B. 964. Further- attempt example because “bribe” more, the several Board offered citations and withdrawing an unfair union into labor explanations supporting finding, this which practice charge violates the Act even if the gave ConAgra finding notice that this was something incentive to which the offered is dependent upon not findings Board that under is not entitled the Act. We Thus, ConAgra did See id. contest. al- so, however, this cannot tell whether be though grant we cannot enforcement of accompany cause the Board failed to “joint employer” finding any detached from finding quid pro regarding quo offer separate practice, unfair we labor deem Con- explanation with or other citations of Agra any argument to have waived how this the Act. action violated See ConA “joint employers.” and Molinos are not (“Without doubt, gra, 321 N.L.R.B. at 957 ConAgra delivery made the [the executive] Accordingly, we remand the matter to the pro quo of quid information the for the Un Board for its of quid pro reconsideration withdrawing practice ion’s its unfair labor quo finding, light disagreement of our charge. Little more needs to be said to finding Board’s that the Union was enti- support [ConAgra conclusion there- by tled the Act receive the information 8(a)(1) 8(a)(5) by §§ violated of the quid part pro quo. offered as of the Act].”). offers The Board one of its own support of finding decisions this in its

brief, see Brief for the NLRB at 20 (citing III. Conclusion Co., (1982)), Winges 263 N.L.R.B. We decline to enforce the Board’s order but this not ques- decision does address the finding because the Board’s that Molinos vio- quid pro tion quo of whether a offer is 8(a)(1) 8(a)(5) §§ lated of by the Act illegal legally when the offeree is not enti- failing to turn of over all the financial infor- tled to the information would be turned mation requested by the Union constituted over Winges, under the deal. See unexplained departure from the Board’s (respondent “obligated N.L.R.B. at 155 was precedent, and because the finding Board’s to furnish information part [the offered as 8(a)(5) 8(a)(1) law.”). §§ that Molinos quid pro violated quo] under the There- fore, the Act grant engaging bargaining,” we decline to “surface enforcement of the portion 8(a)(1), §§ upon 8(a)(3), the order based this and that Molinos finding, violated 8(a)(5) and we remand the matter so locking employ- of the Act out may whether finding consider represented by ees the Union and otherwise illegality may despite rejection stand our of unilaterally altering the terms and conditions finding Union was entitled employment, supported not were sub- requested the Act to receive the financial in- stantial evidence in the record. We remand formation. the matter to the Board for its reconsidera- tion finding ConAgra unlawfully

Second, full ConAgra’s argument contest- sought provision ing condition the of informa- finding it and Molinos “joint tion to employers,” were the Union on the ConAgra, see Union’s withdrawal 945, 964, charge against N.L.R.B. at of a brought ConAgra reads as follows: “Moli- under nos ConAgra joint Act, employers.” rejection our light

1447 concession....”). making of The Board’s required Act finding the ConA- that daunting governing is to formulate rules task information. to turn over this gra are bargaining process enough that clear the ordered. So fulfilling guide participants the their obligations, enough but which retain legal WALD, concurring: Judge, Circuit flexibility Board ferret to enable the out today to enforce a panel declines The practiced when bargaining bad-faith even requiring financial disclosures Board order al, ways.' supra, et at subtle See Gross it ground the that employer, from an on undertaking it precarious As an as 1010-11. departure from represented unexplained an be, overseeing of may good the faith labor precedent in The Nielsen own the Board’s of goals is essential to the the N.L.R.B. 697 Lithographing Company, 305 Act, destroy employer an can the because (1991). disposi- supra part II.A. This “by going of a union bargaining status agen- the “axiom[ ]” tion is mandated negotiating as through motions of almost the precedent their own cies must either follow by bluntly recognition.” easily withholding as why they depart Kelley it. v. explain from or Cox, Duty Bargain The in Good Archibald (D.C.Cir.1996). FERC, 1482, I 96 F.3d 1489 (1958). 1401, Faith, 71 Harv. L.Rev. 1413 separately my that there voice belief write duty supply employer’s the with The sufficiently prac- serious theoretical employer’s relevant to the information bar reasoning itself fissures in the Nielsen tical “epitomizes gaining positions the basic issue eye revisit it with an that the Board should faith,” concerning good at meaning the of id. consistency purposes the of to its with understandably preoccupied and has Act, 29 National Labor Relations U.S.C. beginnings. the Act’s from (“the Act”). § 151 et seq. Co., 1 Button N.L.R.B. 837 Pioneer Pearl in NLRB v. Supreme The Court’s decision Co., (1936); The Sherwin-Williams Manufacturing Company, 351 U.S. Truitt (1941). N.L.R.B. 651 (1956), 100 L.Ed. S.Ct. original attempts to distill The Board’s affirming finding a Board that it is unfair insight into the na Truitt an essential from practice employer to for an refuse labor inquiry good-faith of for financial ture un- a claim that cannot meet substantiate commendable; my concern is disclosure were poor demands because of its ion which, I Nielsen rule with Board’s later circumstances, of dealt “[o]ne economic think, applies periphera of extracts policy”— our most tasks of labor delicate Truitt, I meaning. con than its core rather ensuring employers and unions dis- principle of Truitt to be the ceive essence duty bargain in charge statutory their good faith employer displays a lack of al, A. et good faith. James Gross Good making purportedly a claim based Tests Negotiations: in Labor Faith in the of bar objective economic data course Remedies, 53 Cornell L.Rev. gaining why not or cannot meet will (1968). Among complicating the factors demands, refusing to union’s and then “difficulty policing subjec- are the of task requests union’s reasonable accede to the mind,” id., state and the tension be- tive necessary to information establish objectives government’s twin tween the Truitt, 351 “honestfly],” is U.S. claim made ensuring bargaining and effective collective “accura[te],” 755-56, and at is at S.Ct. refraining unduly restricting par- from i.e., 76 S.Ct. 756 — negotiating requiring or that ne- ties’ tactics up out employer has not made claim particular gotiations result outcomes. See accidentally or inten cloth or out whole 158(d) (“[T]o id.; § see also U.S.C. bar- tionally self-serving rele misconstruction collectively performance gain possession. vant information obligation and the mutual type trou- employees of bad-faith representative of the to meet easily the Truitt Court would be discer- good confer in faith ... bled reasonable times and analogous situations outside obligation compel nible such does not either example, For require bargaining context. agree proposal collective party 754-55, employer’s buyer of a house prospective if a assures bad faith seems his bid is much more evident. house’s owner might appear than it because attractive rule, however, per- The Board’s Nielsen survey shows that geological recent employers mits to withhold financial informa- fault, earthquake buyer’s house sits on an evaluating tion that would assist the union in survey upon the request refusal turn over accuracy employer’s the negotiating the faith, good doubt on intuitively would east his all, at claims for no reason even the when strong suspicion and introduce a that his accuracy of claims is the these crucial to dishonestly buyer claim was made. The negotiating strategy union’s choice of survey needs the in knows that the owner sup- cannot be without access established appraise order to a crucial factual claim that porting financial information. The Board’s negotia- he himself has introduced into the dissenting in pointed Chairman Nielsen out over, If to turn it tions. he refuses he forces sought explain that Nielsen had need the the owner to make a “Hobson’s choice” of the by making for concessions from the union (now type by then-Judge described Chief present factual claims about economic Judge) Nielsen Lithographing Posner condition, and concluded that under the N.L.R.B., (7th Company 854 v. F.2d 1063 principle Truitt refusal turn Nielsen’s over Cir.1988), hope indulging in the that the own- the information constituted bad faith. See play er will be too risk-averse to “Russian (Chairman Nielsen, at 305 N.L.R.B. 706-07 (as are), roulette” us simply most of and will dissenting). Stephens, Chair- buyer’s representations assume the are encompassing man’s construction of Truitt as accept accurate and offer. See id. at a obligation disclosure whenever employ- course, employer’s 1065.9 Of an refusal to er accuracy makes factual claims the possession turn in its might over information which using could be evaluated information even constitute bad faith when the infor- possession employer’s is consistent mation union in assessing could assist the with the Circuit’s opinion, Seventh Nielsen accuracy employer’s bargaining posi- Nielsen), (citing see id. in my view tions, if employer good-faith has reason strayed meaning” from the “essential for refusing Supreme to turn it over. The declining Truitt extend it at least Court recognized and the Board have Nielsen, that far. 305 N.L.R.B. at 700. duty to turn over relevant information employers Placing upon obligation absolute, upon request is not see Detroit union, supply upon request, NLRB, 301, financial Company

Edison v. 440 U.S. necessary information 1132-33, substantiate 99 S.Ct. 59 L.Ed.2d 333 employers’ objectively (1979), negotiating verifiable employer may and that an legally claims would introduce valuable measure refuse to request accede to information reasons, self-regulation into the legitimate bargaining such collective keep as a need to process. rule give Such a would information out of the hands of unions its com- honest, petitors leverage keep employers protect privacy mitigat or to of its em- ployees. See, ing police e.g., Mining employers’ Minnesota Board’s need & (1982). Co., al., Mfg. if, subjective 261 27 mind. But as state of See Gross et Truitt, 1009; Truitt, supra, request denies the at 351 76 U.S. at cf. (“Good-faith illegitimate based reason or S.Ct. at bargaining no reason 755-56 nec all, Truitt, 150-51, essarily see U.S. at requires claims S.Ct. made either another, 9. The opposed dealing "Russian roulette” situation does not one exist as with other market, Thus, wellfunctioning pres- parties.” although in a type because the of bad-faith buyers represented ence of bargaining house-selling alternative enables the seller to in the reject prospective buyer's hypothetical present an offer tainted is the same as that in the apparent bargaining. bargaining bad-faith But party as the Su- collective context re- when information, preme Court in United consequences observed Steelworkers v. fuses to turn over Navigation Company, Warrior 574, 580, bargaining & 363 U.S. of that bad-faith contexts; differ in the two Gulf 1347, 1351-52, purchaser prospective S.Ct. 4 L.Ed.2d of a house (1960), option generally legal obligation no such exists in would not be under to turn context, bargaining the collective wherein over information relevant to his parties "compulsion are under a to deal with claims. claims.”). hardship competitive disadvantage. Un It also be honest bargainer should put job top frequently security unions to correct assertions at the enable ions would offered, see, but in honestly employers agendas, e.g., Michael their Truitt, Cimini, 351 U.S. Labor-management accurate. bargaining in H. Cf. (“If inability to Monthly asserted [an S.Ct. Rev., Jan./Feb.l996 Lab. enough is wages] important an increase may seek to this interest further bargaining, it give in the and take of present buy lowering wage their in order to demands enough require some sort important employer’s long-term in the abili an increase accuracy”). rule The Nielsen proof of its jobs. A ty might also seek ends, limited these but in too accomplishes linkages employee com increased between far as the line arena —it extends pensation compa profitability and the “competitive claims of disadvan separating wage reducing hourly in return for ny pay"’during from claims of tage” (“[S]everal id. at 38 airlines demands. See rationale for this term of the CBA. The wage to agree their unions and asked deci set forth the Seventh Circuit’s line ... unions wanted benefit concessions The Manufacturing v. in NLRB Harvstone sion in return for concessions— something those (7th 570, F.2d Cir. Corporation, 785 carriers, greater in how stock voice in its Niel 1986), accepted and run, improved job securi the airlines are decision, employer op was even an sen (“Delta ty.”); union pilots id. at 39 asked the competitive disadvantage would erating at a productivity wage ... to make conces conceivabl[y]” increased pay be able to “quite agree said sions. The union it would But during the one CBA. course of gave if it in return— terms Delta concessions shaky if term of rationale becomes on the of representative airline’s board negotiation relatively under is the CBA directors, options, sharing profit stock when be long it was —as ....”); Compensation see also is Increas parties began. this case tween Corporate Profits, ingly Linked to NAM Appendix (proposed CBA Deferred (BNA), Daily Apr. Says, Rep. Lab. President years). five for a term of (“Corporations at A-9 increas are theory Adopting the compensation profits ingly tying to business correct an Nielsen would also Chairman fora hourly wages increasingly account assumption Nielsen made inaccurate compensation-”); Ed- smaller share of majority. majority’s Nielsen central wajrd Cynthia E. BuR- Cohen-Rosenthal & of eco premise employer’s is that an claim ton, A Union- Mutual Gains: Guide disadvantage competitive or nomic difficulties (2d Management 253-60 COOPERATION is, practical purposes, for all identical ed.1993); Local Tentative IBEW Reaches pay union refusal what unadorned Department with L.A. Water Agreement of Nielsen, at 700 proposes. See Power, (BNA), Daily Rep. Lab. June (“[T]he employer who economic claims 1996, A-9. But absent the information prospect or business losses or the difficulties employ necessary to ascertain whether the simply layoffs saying is does competi hardship of financial er’s claims fact, types pay.”). In these two want to accurate, disadvantage are tive different, and the fundamentally claims truly guess at whether such a course must pro crucial to is difference constitu represents the best interests of its pure unwill employer’s cess. Whereas “Hob- In this sense faces the same ents. simply by the em ingness verified choice” that obtains when the son’s effect, a claim of ployer’s statement “plea unsupported poverty.” makes competitive generally requires ruin pending rule has I Board’s Nielsen believe a union can external verification before some “gravitational of Truitt” field weakened reasonably rely upon deciding it in how to opinion severely to retain its strategy. Experi too structure Nielsen, hope vitality, F.2d may that unions well de ence demonstrates see the Board will fit to reexamine modify proposals their in the face of cide future, adopt an in the near employer’s verified of economic Nielsen rule claims spirit consistent with the more alternative purposes of the Act.

Truitt America, Appellee,

UNITED STATES

v. BECRAFT, Appellant.

Donna 96-3098.

No. Appeals, Court of

United States Circuit.

District Columbia

Argued March 1997. July

Decided

Rhearing Suggestion Rehearing Sept.

In Banc Denied Norwinski,

Evelina J. Assistant Federal Defender, DC, Washington, Public argued Kramer, appellant. the cause for the A.J. Defender, Seidman, Amy Federal Public Assistant Federal Public Defender were on brief. Sheehan,

Eileen F. Assistant United DC, Washington, Attorney, argued States

Case Details

Case Name: Conagra, Inc. v. National Labor Relations Board

Court Name: Court of Appeals for the D.C. Circuit

Date Published: Jul 8, 1997

Citation: 117 F.3d 1435

Docket Number: 96-1367

Court Abbreviation: D.C. Cir.