117 F.3d 1435 | D.C. Cir. | 1997
Lead Opinion
Opinion for the Court filed by Circuit Judge WALD.
Separate concurring statement filed by Circuit Judge WALD.
In June of 1993, Molinos de Puerto Rico, Inc. (“Molinos”), a wholly-owned subsidiary of ConAgra, Inc. (“ConAgra”), began negotiating with the Congreso de Uniones . Industr-iales de Puerto Rico (“the Union”) concerning the establishment of a new collective bargaining agreement (“CBA”). The parties quickly found that their respective proposals were radically different: The Union wanted to raise wages and benefits above existing levels, while Molinos desired to lower them substantially. The parties failed to reach an agreement by October 28, the existing agreement’s expiration date, and on November 1 Molinos locked out the employees. Between December, 1993, and March, 1994, the Union filed a series of charges with the National Labor Relations Board (“the Board”), alleging that Molinos’ conduct surrounding the failed negotiations and lockout violated the National Labor Relations Act, 29 U.S.C. § 151 et seq. (“the Act”). The Board found that Molinos and ConAgra violated the Act by refusing to provide financial information requested by the Union, intentionally creating a negotiating impasse, and unilaterally altering the terms and conditions of employment in the absence of a genuine impasse. The Board now asks this court to enforce in full its order requiring Molinos and ConAgra to cease committing these violations, and ConAgra requests that we decline to enforce any portion of the order.
We reject the Board’s finding that Molinos and ConAgra violated the. Act by failing to provide all of the financial information requested by the Union. In our view, the Board’s conclusion that Molinos effectively claimed an “inability to pay” the wages proposed by the Union, thereby triggering an obligation to provide supporting financial information upon request, represented an unacknowledged and unexplained departure from the Board’s decision in The Nielsen Lithographing Company, 305 N.L.R.B. 697 (1991). We also reject the Board’s conclusion that Molinos engaged in unlawful “surface bargaining,” as unsupported by substantial evidence in the record considered as a whole. With regard to the Board’s finding that a ConAgra executive violated the Act by seeking to condition the provision of financial information to the Union on the Union’s withdrawal of an “unfair labor practice” charge, we remand the matter to the Board for its consideration of whether this finding may stand despite our rejection of the other findings.
I. Background
Molinos and the Union began negotiations for a new CBA on June 17, 1993. Molinos’
The parties returned to the wage proposals at their eleventh bargaining session, held on September 14,1993. Molinos’ representative began by reintroducing the graphs that Moli-nos’ General Manager had used in his presentation at the first session, and soliciting the Union’s response to the individual components of Molinos’ economic proposals, each of which the Union rejected. The Union representative then stated that the Union wanted to use its own proposal, which called for an increase in hourly wages from $17.84 to $20.00, as the basis for negotiation. Molinos’ representative agreed to consider the Union’s wage proposal, but reiterated that Moli-nos needed to reduce its overall labor costs in order to stay competitive. At this point, the Union requested that Molinos turn over its certified financial statements for the prior five years. Molinos’ representative asked the Union to submit its information request in writing and to explain its relevance to the negotiations, stating: “[0]ur petitions are not based on the financial statement, but more so on the competitiveness of our costs against a market that we have that which [sic] is much lower than ours,” and: “The issue that we are bringing is not the Company’s ability to pay, but more so the competitiveness in our market, specifically in our labor costs.” Id. at 1003-04. The Union’s representative acknowledged that he understood Molinos’ assertion: “What you are saying is that the Company is not alleging that it does not have the ability to pay.” Id. at 1004. Subsequently, on September 20, the Union sent Molinos a letter reiterating its information request, and adding a request for the names of all of Molinos’ clients for the past three years; the letter included no explanation of the reasons for these requests or of their relevance to the bargaining process.
The parties continued to meet through the end of October, but made no substantial progress on the wage issue — the Union stood by its demand to increase wages above then-existing levels, while Molinos continued to propose reducing wages below existing levels. The Union repeated its request for financial information (midway through one negotiating session, the Union’s representative added requests for records of Molinos’ “sales, the contracts,” and “what each and every one of the supervisors, administrators, managers, salespersons and owner of the Company, earn,” id. at 1034), while Molinos continued to assert that it had never claimed that it was in poor financial condition or was unable to pay the wages sought by the Union, and to ask that the Union explain the relevance of the requested information.
On October 27, Molinos’ representative delivered the company’s “last and final offer,” along with a letter stating that the parties had reached an impasse and giving the Union notice of Molinos’ intention to close its facilities that evening. Molinos locked out the employees on November 1, citing the failure
In 1995, the Board petitioned a federal district court for a temporary injunction prohibiting Molinos from refusing to bargain in good faith, refusing to supply relevant information requested by the Union, unilaterally changing the terms and conditions of employment, or locking out Union employees.
On June 13, 1995, one of the Board’s Administrative Law Judges (“ALJs”) issued a decision finding that Molinos had failed to bargain in good faith by withholding information it was obligated to provide, purposely creating a bargaining “impasse,” and making unilateral changes in the terms and conditions of employment in the absence of a genuine impasse. See ConAgra, Inc., 321 N.L.R.B. 944, 949-65 (1996). The Board affirmed the ALJ’s findings on August 20, 1996, id. at 944-46, with one member dissenting. Id. at 946-47 (Member Cohen, dissenting in part). This appeal followed.
II. Discussion
A reviewing court sets aside decisions of the Board only when the Board has acted arbitrarily or otherwise erred in applying established law to the facts, or when its findings of fact are not supported by “substantial evidence” in the record considered as a whole. See Allegheny Ludlum Corp. v. NLRB, 104 F.3d 1354, 1358 (D.C.Cir.1997); see also 29 U.S.C. § 160(e) (1994); Universal Camera Corp. v. NLRB, 340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951). With this standard of review in mind, we turn to the Board’s findings underlying the challenged order.
A. Molinos’ Refusal to Provide All of the Financial Information Requested by the Union
An employer commits an “unfair labor practice” under §§ 8(a)(1) and 8(a)(5) of the Act by interfering with, restraining, or coercing its employees in the exercise of their right to form labor organizations and to bargain collectively, see 29 U.S.C. § 158(a)(1), or by refusing to bargain collectively with the legitimate representatives of its employees. See id. at § 158(a)(5). The duty to bargain collectively includes the duty to meet and confer “in good faith” with employee representatives with respect to wages, hours, and other terms and conditions of
In NLRB v. Truitt Manufacturing Company, 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027 (1956), the Supreme Court spoke to the question of whether and how an employer’s statements and conduct during negotiations can cause the employer’s financial information to become relevant to the negotiations. The Court held that, in the context of negotiations over a new CBA, an employer’s “refusal to attempt to substantiate a claim of inability to pay increased wages may support a finding of a failure to bargain in good faith.” Id. at 153, 76 S.Ct. at 756. The Court emphasized that it was not saying that the union is entitled to supporting information in every case in which economic inability is raised as an argument against increasing wages; rather, the Court noted that “[e]ach case must turn upon its particular facts. The inquiry must always be whether or not under the circumstances of the particular case the statutory obligation to bargain in good faith has been met.” Id. at 153-54, 76 S.Ct. at 756 (footnote omitted). Prior to 1991, the Board construed the Truitt decision to oblige employers to provide unions with supporting financial information even when the employer’s only statements tending to put its financial condition in issue consisted of assertions that acceding to the union’s wage demands would create or exacerbate a “competitive disadvantage.” United Steelworkers Local 14534 v. NLRB, 983 F.2d 240, 244 (D.C.Cir.1993). Subsequently, however, in response to a trilogy of Seventh Circuit decisions, the Board underwent a “change of heart.” Id.
First came NLRB v. Harvstone Manufacturing Corporation, 785 F.2d 570 (7th Cir.1986), in which the Seventh Circuit rejected the Board’s finding, see Harvstone Manufacturing Corporation, 272 N.L.R.B. 939 (1984), that the negotiating representative of several fighting fixture companies had effectively claimed an “inability to pay” by warning the negotiators for an electrical worker’s union that if the companies “don’t make a reasonable profit so they can be a viable competitive business, they won’t stay in business, and no one will have jobs.” Harvstone, 785 F.2d at 576. The court declared that such statements are “nothing more than truisms,” because “if an employer operates at a competitive disadvantage for a long enough time, its profit margin, as a matter of pure economics, will decline eventually forcing it out of business.” Id. at 577. The court reasoned that, if these, statements suffice to require financial disclosures, then any assertion that acceding to the union’s demands would create or perpetuate a competitive disadvantage could be characterized as a claim of “inability to pay” at some point in the future what the union is demanding at the present time. Therefore, the court declared that “the relevant time period” against which to assess such statements is not the “indefinite[ ]” future, but only the term of the CBA under negotiation, since it is generally “quite conceivable” that an employer could pay increased wages during the term of one CBA, even if paying these wages would put the employer at a competitive disadvantage. Id. Thus, the court held that when an employer asserts that the wages demanded by the union would put the employer at a competitive disadvantage, the employer does not thereby obligate itself to provide supporting financial information unless these statements also suggest that this competitive disadvantage would give rise to an inability to pay the wages demanded by the union during the term of the CBA under negotiation. See id. Because it concluded that the record did not include substantial evidence to support findings that some of the respondent employers had claimed such imminent financial hard
Two months after the Seventh Circuit’s Harvstone decision, the Board issued a decision in The Nielsen Lithographing Company, 279 N.L.R.B. 877 (1986), affirming an ALJ’s finding that the negotiator for the Nielsen Lithographing Company (“Nielsen”) had effectively claimed an “inability to pay” wages demanded by the union by stating that, despite the company’s current profitability, the union’s rejection of the company’s proposed economic concessions would lead to a loss of jobs and possible failure of the business, with the result that the company “could not compete.” See id. at 877 n. 3, 879. In support of this finding, the ALJ had referred to Nielsen’s assertions that it had been losing business to competitors, and that it needed to bring its wages and fringe benefits more in line with those of its competitors in order to “compete,” to “protect the jobs of [its] employees,” and “[t]o survive.” Id. at 879. The ALJ also had cited the Board’s Harvstone decision, which the Seventh Circuit later criticized and refused to enforce in full. See id. at 879 n. 5. Although the Seventh Circuit rendered its Harvstone decision between the ALJ’s decision and the Board’s decision affirming the ALJ’s findings, the Board made no reference to the Seventh Circuit’s criticisms of the Board’s “inability to pay” analysis. See id. at 877. Nielsen asked the Board to reconsider its decision in light of Harvst-one, but the Board refused, claiming that Nielsen’s petition for reconsideration failed to assert any matter that it had not already considered. See Nielsen Lithographing Company v. N.L.R.B., 854 F.2d 1063, 1066 (7th Cir.1988) (“Nielsen I”).
Nielsen then sought review of the Board’s order in the Seventh Circuit, which predictably set aside the order, criticizing the Board for failing to respond to the criteria laid down in its Harvstone opinion.
On remand of Nielsen, the Board abandoned its own Harvstone decision and submitted to the “guidfanee]” of the Seventh Circuit, releasing Nielsen from the obligation to provide the union with financial information. See The Nielsen Lithographing Company, 305 N.L.R.B. 697, 699 (1991). The Board said it agreed with the Seventh Circuit’s temporal analysis in Harvstone, and announced that it would thenceforth deal with employer claims of “inability to pay” by distinguishing between employer statements and conduct asserting inability to pay union proposals at some point during the term of the CBA under negotiation, and employer statements and conduct suggesting, in a more general fashion, that accession to union demands would create “economic difficulties or business losses or the prospect of layoffs.” Id. at 700. In Nielsen’s case, the Board held that the company’s negotiating statements and conduct clearly were not susceptible to the “can’t pay [within the CBA term]” interpretation that would trigger an obligation to turn over financial data — Nielsen’s representative had repeatedly stressed that it continued to turn a profit (although it claimed to be losing business to competitors), disavowed any claim of inability to pay, and said merely that it would face difficulty in meeting union-proposed labor costs “at an unspecified point ‘in the future.’ ” Id. at 700-01. In so holding, the Board rejected the dissenting Chairman’s argument that an employer should be obligated to supply the union with supporting information whenever it makes a claim that is objectively verifiable, and that Nielsen had obliged itself to turn over financial information by making objectively verifiable claims regarding its current economic condition. See id. at 700; cf. id. at 706 (Chairman Stephens, dissenting).
The union petitioned the Seventh Circuit to deny enforcement of the Board’s Nielsen order, asking the court to overrule or distinguish its Harvstone decision. See Graphic Communications Int’l Union v. NLRB, 977 F.2d 1168, 1169 (7th Cir.1992) (“Nielsen IF). The court (with then-Judge Posner once again writing) declined, satisfied that the Board was within its discretion in refusing to “extenfd]” Truitt in the fashion that it had previously indicated would be permissible. Nielsen I, 854 F.2d at 1065. The Truitt decision, it noted, stood for the proposition that an “express or implied threat (of bankruptcy)” triggers an obligation to provide supporting financial information, and because no such threat was discernible in the comments made by the relevant companies in Harvstone or Nielsen, Truitt did not apply of its own force to either case. Nielsen II, 977 F.2d at 1170. At the same time, the court signaled its receptivity to the argument advanced by the dissenting Chairman in the Board’s Nielsen decision by stating that “fi]f [an employer] makes claims of poverty, or any other substantiatable factual claim, it must substantiate the claims if the union so demands.” Id. at 1171; compare Nielsen, 305 N.L.R.B. at 706 (“The classic Truitt dichotomy, as it has evolved, between ‘inability to pay and ‘unwillingness to pay’ is intended to distinguish between an objective factual claim (subject to verification) and a subjective claim (not subject to verification).”) (Chairman Stephens, dissenting); id. at 706-07 (citing Nielsen I). Thus endeth the Board-Seventh Circuit colloquy.
Meanwhile, a union petitioned our own court for review of the Board’s Concrete Pipe and Products decision, 305 N.L.R.B. 152 (1991), which was very similar to Nielsen but was decided two months earlier.
The Board asks us to enforce its order requiring Molinos and ConAgra to turn over all of the financial information requested by the Union, and avers that its findings underlying this order are not inconsistent with its second Nielsen decision or with Concrete Pipe and Products,
The Board here also relied upon statements by Molinos’ representatives to the effect that ConAgra was considering bypassing Molinos by shipping already-milled flour to Puerto Rico, that the animal feed portion of Molinos’ operations was losing money and that the flour portion was losing sales volume, and upon Molinos’ announcement, issued after the negotiations broke down, of its intention to lay off forty employees. See ConAgra, 321 N.L.R.B. at 944, 955. These statements similarly fail to separate this ease meaningfully from Nielsen or Concrete Pipe and Products. See Nielsen, 279 N.L.R.B. at 879 (“If we don’t [become more competitive] the recent trend of losing even greater amounts of work to other companies will continue_”); Concrete Pipe and Products, 305 N.L.R.B. at 152 (“Our business is suffering a declining market due to the many new competitive products....”). None of these statements can reasonably be interpreted as assertions that Molinos was unable to pay the wages demanded by the Union over the term of the CBA under negotiation. Molinos never suggested that the reason ConAgra was considering shipping already-milled flour to Puerto Rico was its belief that Molinos would be unable to pay the wages demanded by the Union, nor did Molinos’ representatives state or even imply that the loss of sales in Molinos’ animal feed operations would lead to any such immediate inability to pay the requested wages. Nor does the company’s announcement of an intention to lay off forty employees after the expiration of the existing CBA amount to a claim that it could not afford to pay those employees the wages demanded by the Union.
Despite what we see as a neat fit between the record in this ease and the Nielsen decision, the Board concluded that this ease more closely resembled The Shell Company, 313 N.L.R.B. 133 (1993), a post-Nielsen case wherein the Board found that an obligation to turn over financial information on demand was created by an employer’s statements and conduct. See ConAgra, 321 N.L.R.B. at 944, 955. Setting aside the question of whether Shell itself is impossible to reconcile with Nielsen, we find the Board’s comparison of ConAgra with Shell baffling — in Shell, the Board explicitly distinguished Nielsen on the ground that Nielsen’s bargaining representative had “repeatedly stated that it was still making a profit.” Shell, 313 N.L.R.B. at 133. Molinos’ representatives similarly stated repeatedly that the company remained profitable, beginning with the first negotiation session, see D.A. at 103, 286, 954, 1120; id. at 1037 (“[F]or years, we have been able to enjoy some good profits from [Molinos] and even today the Company continues to earn profits .... ”); id. at 1038 (“[A]t present, Molinos is making money even though we are l[o]sing money in the feed business. Molinos as a company is making money.”); id. at 1039, and the Union’s representatives clearly understood that Molinos continued to be profitable. See id. at 103, 265, 286, 1001.
Thus, because it is “axiomatic that an agency adjudication must either be consistent with prior adjudications or offer a reasoned basis for its departure from precedent,” Kelley v. FERC, 96 F.3d. 1482, 1489 (D.C.Cir.1996), and because the Board’s finding that Molinos and ConAgra violated the
B. Molinos’Alleged “Surface Bargaining”
When labor negotiations have reached an “impasse” or “deadlock,” an employer’s unilateral changes in working conditions do not necessarily violate the Act, as they generally do in the absence of an impasse. See American Fed’n of Television and Radio Artists v. NLRB, 395 F.2d 622, 624 (D.C.Cir.1968). Predictably, unscrupulous employers can exploit this rule by sabotaging the negotiations to manufacture an impasse while making a show of negotiating in good faith; this practice is referred to as “surface bargaining.” See 48 Am. JuR.2d Labor and Labor Relations § 2358 (1994). Using its authority “to order the cessation of behavior which is in effect a refusal to negotiate, or which directly obstructs or inhibits the actual process of discussion, or which reflects a cast of mind against reaching an agreement,” NLRB v. Katz, 369 U.S. 736, 747, 82 S.Ct. 1107, 1114, 8 L.Ed.2d 230 (1962), the Board treats “surface bargaining” as a violation of § 8(a)(5) of the Act. See, e.g., Horsehead Resource Dev. Co., 321 N.L.R.B. 1404, 1407 (1996). The touchstone for determining whether a genuine “impasse” or “deadlock” existed at the time the employer instituted unilateral changes is the absence of any realistic possibility that continuation of the negotiations would have been fruitful. See Taft Broadcasting Co., 163 N.L.R.B. 475, 478 (1967); petition for review denied, American Fed’n of Television and Radio Artists, supra
The ALJ in the case at bar concluded that Molinos entered these negotiations with a “predetermined resolve not to budge” from its initial position, and that Molinos engaged in “surface bargaining” and manufactured an impasse. ConAgra, 321 N.L.R.B. at 958. She relied heavily for this conclusion on the contents of a “Contingency Plan” that ConA-gra sent to Molinos prior to the beginning of the negotiations; in her view, the Contingency Plan “reveal[ed] that [Molinos] prepared [its] bargaining proposals knowing they would be so unacceptable as to ensure rejection by the Union, leading to an impasse followed by a strike.” Id. She also rested this conclusion on her findings that Molinos presented the Union with “predictably unacceptable” proposals, merely “went through the motions” of bargaining, withheld from the Union information that it was obligated by the Act to turn over upon demand, arranged for improved security and replacement workers in anticipation of a strike, and “hastily” declared an impasse while the Union continued to offer compromises. Id. at 960, 962. The Board agreed with the ALJ’s analysis and adopted her finding. See id. at 945.
We think the Board’s conclusion that Molinos engaged in “surface bargaining” is not supported by substantial evidence in the record. The Contingency Plan is certainly evidence that ConAgra and Molinos thought it likely that the Union would resist the proposed concessions vigorously, but preparing for a possible breakdown of negotiations is quite different from intentionally causing one. Fairly read, the Contingency Plan is not subject to the inference that ConAgra or Molinos wanted to create an impasse and force the union to strike. Rather, the plan simply shows that ConAgra made a judgment that the Union was likely steadfastly to resist any attempt to cut wages below their existing levels; ConAgra and Molinos were entitled to act on this judgment by preparing for the possibility that the Union’s resistance would be strong and persistent enough to deadlock the negotiations and cause a strike. This same principle applies to Molinos’ security improvements and arrangements for hiring replacement workers, which the ALJ treated as “Additional Evidence of Bad-Faith Bargaining.” Id. at 960 (emphasis re
With the Contingency Plan as a “smoking gun” removed from the mix, the evidence of Molinos’ alleged “surface bargaining” is im-permissibly weak. Molinos’ bargaining proposals were predictably a hard sell, but not so unreasonable as to have been predictably unacceptable-, Molinos proposed to reduce wages and benefits significantly below their existing levels, but not below the levels at several of Molinos’ competitors — including competitors represented by the same union. See D.A. at 1137. Nor did Molinos categorically refuse to alter its proposals as the negotiations continued: One week after the parties began discussing the economic proposals, Molinos increased its proposed wages and benefits; two weeks later, Molinos improved its proposed medical coverage. When these modifications failed to advance the negotiations, Molinos suggested that the parties turn to mediation; the Union refused to do so. See id. at 1021. The Board also counted Molinos’ refusal to provide some of the financial information requested by the Union as evidence of Molinos’ bad faith. We have already explained, see supra Part U.A., why Molinos’ refusal to turn over all of the requested information did not constitute a violation of the Act in itself, but this holding does not automatically render Molinos’ conduct in regard to the information request irrelevant to Molinos’ alleged “surface bargaining.” However, the record indicates that Molinos did not attempt to use the issue of the information request to deadlock the ne-gotations; to the contrary, Molinos sought to defuse the issue by repeatedly pointing out that it was not claiming an “inability to pay” the wages sought by the Union; and seeking an explanation of the information’s relevance to the negotiations. Finally, the Board agreed with the ALJ’s judgment that Moli-nos had “hastily” declared an impasse even as the Union continued to display sufficient flexibility to negate the existence of a genuine impasse. ConAgra, 321 N.L.R.B. at 945, 962. But Molinos’ announcement that it believed the parties had reached an impasse came only after the parties’ irreconcilable differences had become incontrovertible in numerous fruitless sessions: Molinos was determined to lower wages and benefits below their existing levels, while the Union was determined to increase them above their existing levels. Nor did the proposal made by the Union after Molinos’ declaration of an impasse cast any doubt on Molinos’ conclusion that further negotiations would fail to close the persistent gap between the parties’ proposals — in it, the Union continued to press for increases in wages and benefits. See D.A. at 826.
Because the Board’s finding that Molinos engaged in “surface bargaining” was not supported by substantial evidence in the record, we deny enforcement of those portions of the Board’s order that rest on this finding.
C. Findings Uncontested by ConAgra
The Board asks this court for “summary enforcement” of two of its findings that ConAgra has not directly addressed in this appeal. Brief for the NLRB at 20. First, the Board correctly asserts that ConAgra does not separately contest the Board’s finding that a ConAgra executive violated the Act by seeking to make the Union’s withdrawal of an unfair labor practice charge a quid pro quo for ConAgra’s provision of in
Second, ConAgra’s full argument contesting the Board’s finding that it and Molinos were “joint employers,” see ConAgra, 321 N.L.R.B. at 945, 964, reads as follows: “Moli-nos and ConAgra are not joint employers.” Final Brief of Petitioners at 43. Unlike its failure to counter the quid pro quo finding, we cannot write off this failure to contest a Board finding to the possibility that ConAgra assumed the finding was dependent upon other findings which it did contest: The “joint employer” finding quite clearly rests on facts relating to the authority that ConA-gra exercises over Molinos, and not to any separate unfair labor practice finding. See ConAgra, 321 N.L.R.B. at 964. Furthermore, the Board offered several citations and explanations supporting this finding, which gave ConAgra notice that this finding was not dependent upon the Board findings that ConAgra did contest. See id. Thus, although we cannot grant enforcement of a “joint employer” finding detached from any separate unfair labor practice, we deem Con-Agra to have waived any argument that it and Molinos are not “joint employers.”
Accordingly, we remand the matter to the Board for its reconsideration of the quid pro quo finding, in light of our disagreement with the Board’s finding that the Union was entitled by the Act to receive the information offered as part of the quid pro quo.
III. Conclusion
We decline to enforce the Board’s order because the Board’s finding that Molinos violated §§ 8(a)(5) and 8(a)(1) of the Act by failing to turn over all of the financial information requested by the Union constituted an unexplained departure from the Board’s precedent, and because the Board’s finding that Molinos violated §§ 8(a)(5) and 8(a)(1) of the Act by engaging in “surface bargaining,” and that Molinos violated §§ 8(a)(1), 8(a)(3), and 8(a)(5) of the Act by locking out employees represented by the Union and otherwise unilaterally altering the terms and conditions of employment, were not supported by substantial evidence in the record. We remand the matter to the Board for its reconsideration of the finding that ConAgra unlawfully sought to condition the provision of information to the Union on the Union’s withdrawal of a charge brought against ConAgra under the Act, in light of our rejection of the
So ordered.
. The passages presented here as direct quotations from the negotiations are taken directly from the record, but are not necessarily verbatim. In many cases the statements were recorded by a minute-taker, rather than by a stenographer or recording device, and many of the statements were made in Spanish. However, the parties began each negotiation session by ratifying the minutes from the previous session, and neither party has challenged the accuracy of the recorded statements in this appeal. ,
. Section 10(j) of the Act authorizes the Board to request, and federal courts to grant, "appropriate temporary relief or restraining orderfs]” upon the Board’s issuance of complaints alleging violations of the Act. See 29 U.S.C. § 160(j) (1994).
. The Seventh Circuit apparently believed that it had not issued its Harvstone decision until after the Board rendered its first Nielsen decision. See id. at 1065-66 (“[R]ight after [the Board] ruled in favor of the union we decided [Harvst-one].... [W]e did not think the Board gifted with prevision and therefore able to read and evaluate our decisions before they are rendered.”). Actually, the court's Harvstone decision issued two months before the Board’s first Nielsen decision. See Harvstone, 785 F.2d at 570 (decided March 6, 1986); Nielsen, 279 N.L.R.B. at 877 (decided May 8, 1986). At any rate, the court thought it inappropriate for the Board in Nielsen to offer no "reasoned discussion” of the court’s Harvstone decision because the Board's analysis of "inability to pay” claims plainly conflicted with the analysis proffered in that decision, and this rationale for criticizing the Board’s initial refusal to reconsider Nielsen remains appropriate. Id.
. One other Board member wrote a brief concurring opinion, agreeing with the majority's holding, but on the somewhat different ground that Nielsen's claims regarding the future effects of acceding to the union’s demands were not"sufficiently verifiable” to render the provision of the requested information helpful to the bargaining process, because projections of a business’ future financial condition are unreliable and involve numerous “subjective, judgmental, and theoretical factors.” Id. at 702 (Member Oviatt, concurring); cf. id. at 707 (Chairman Stephens, dissenting).
. The Board’s Concrete Pipe and Products decision did not cite the Seventh Circuit’s Harvstone decision, but the Board later confirmed that Concrete Pipe and Products followed the Harvstone-
. The Board’s dissenting member disagreed with the majority’s conclusion that Molinos was obligated to turn over the financial information requested by the Union; in his view, the statements made by Molinos' representatives could not, consistently with the Board's Nielsen decision, be treated as assertions of an "inability to pay.” See ConAgra, 321 N.L.R.B. at 947 (Member Cohen, dissenting in part).
. The dissenting member rejected this finding, arguing that the majority had improperly used its subjective judgments regarding the substance of the employer's proposals to find bad-faith bargaining where the record showed only lawful "hard” bargaining. Id. at 946-47 (Member Cohen, dissenting in part).
. Since the parties had reached a bona fide impasse, Molinos’ lockout of the Union employees did not violate the employees’ collective bargaining rights. See American Ship Bldg. Co. v. NLRB, 380 U.S. 300, 318, 85 S.Ct. 955, 961, 13 L.Ed.2d 855 (1965). The ALJ found that Molinos’ refusal to abide by the terms of the CBA subsequent to its scheduled termination was unlawful, both because there was no genuine impasse and because the CBA provided that it would extend for an additional year unless either party indicated in writing its desire to modify the agreement, and that it would extend indefinitely for as long as the parties were negotiating a new agreement. ConAgra, 321 N.L.R.B. at 962-63. But the negotiations between Molinos and the Union, including both parties’ written proposals exchanged during these negotiations, clearly satisfies the requirement regarding a written intent to modify the agreement, and the fact that the parties reached an impasse in negotiating a new agreement prevented the automatic extension clause of the agreement from taking effect.
Concurrence Opinion
concurring:
The panel today declines to enforce a Board order requiring financial disclosures from an employer, on the ground that it represented an unexplained departure from the Board’s own precedent in The Nielsen Lithographing Company, 305 N.L.R.B. 697 (1991). See supra part II.A. This disposition is mandated by the “axiom[ ]” that agencies must either follow their own precedent or explain why they depart from it. Kelley v. FERC, 96 F.3d 1482, 1489 (D.C.Cir.1996). I write separately to voice my belief that there are sufficiently serious theoretical and practical fissures in the Nielsen reasoning itself that the Board should revisit it with an eye to its consistency with the purposes of the National Labor Relations Act, 29 U.S.C. § 151 et seq. (“the Act”).
The Supreme Court’s decision in NLRB v. Truitt Manufacturing Company, 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027 (1956), affirming a Board finding that it is an unfair labor practice for an employer to refuse to substantiate a claim that it cannot meet union bargaining demands because of its poor economic circumstances, dealt with “[o]ne of the most delicate tasks of our labor policy”— ensuring that employers and unions discharge their statutory duty to bargain in good faith. James A. Gross et al, Good Faith in Labor Negotiations: Tests and Remedies, 53 Cornell L.Rev. 1009, 1009 (1968). Among the factors complicating this task are the “difficulty of policing a subjective state of mind,” id., and the tension between the government’s twin objectives of ensuring effective collective bargaining and refraining from unduly restricting the parties’ negotiating tactics or requiring that negotiations result in particular outcomes. See id.; see also 29 U.S.C. § 158(d) (“[T]o bargain collectively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith ... but such obligation does not compel either party to agree to a proposal or require the making of a concession....”). The Board’s daunting task is to formulate rules governing the bargaining process that are clear enough to guide the participants in fulfilling their legal obligations, but which retain enough flexibility to enable the Board to ferret out bad-faith bargaining even when practiced in subtle ways.' See Gross et al, supra, at 1010-11. As precarious an undertaking as it may be, overseeing the good faith of labor negotiations is essential to the goals of the Act, because an employer can destroy the bargaining status of a union “by going through the motions of negotiating almost as easily as by bluntly withholding recognition.” Archibald Cox, The Duty to Bargain in Good Faith, 71 Harv. L.Rev. 1401, 1413 (1958). The employer’s duty to supply the union with information relevant to the employer’s bargaining positions “epitomizes the basic issue concerning the meaning of good faith,” id. at 1425, and has understandably preoccupied the Board from the Act’s beginnings. See Pioneer Pearl Button Co., 1 N.L.R.B. 837 (1936); The Sherwin-Williams Co., 34 N.L.R.B. 651 (1941).
The Board’s original attempts to distill from Truitt an essential insight into the nature of the good-faith inquiry for financial disclosure were commendable; my concern is with the Board’s later Nielsen rule which, I think, extracts and applies the periphera of Truitt, rather than its core meaning. I conceive the essence of Truitt to be the principle that an employer displays a lack of good faith by making a claim purportedly based on objective economic data in the course of bargaining as to why it will not or cannot meet the union’s demands, and then refusing to accede to the union’s reasonable requests for information necessary to establish that the claim is made “honestfly],” Truitt, 351 U.S. at 152, 76 S.Ct. at 755-56, and is “accura[te],” id. at 153, 76 S.Ct. at 756—i.e., that the employer has not made the claim up out of whole cloth or out of an accidentally or intentionally self-serving misconstruction of relevant information in its possession.
The type of bad-faith negotiating that troubled the Truitt Court would be easily discernible in analogous situations outside of the collective bargaining context. For example,
The Board’s Nielsen rule, however, permits employers to withhold financial information that would assist the union in evaluating the accuracy of the employer’s negotiating claims for no reason at all, even when the accuracy of these claims is crucial to the union’s choice of negotiating strategy and cannot be established without access to supporting financial information. The Board’s dissenting Chairman in Nielsen pointed out that Nielsen had sought to explain the need for concessions from the union by making factual claims about its present economic condition, and concluded that under the Truitt principle Nielsen’s refusal to turn over the information constituted bad faith. See Nielsen, 305 N.L.R.B. at 706-07 (Chairman Stephens, dissenting). The dissenting Chairman’s construction of Truitt as encompassing a disclosure obligation whenever the employer makes factual claims the accuracy of which could be evaluated using information in the employer’s possession is consistent with the Seventh Circuit’s Nielsen opinion, see id. (citing Nielsen), and in my view the Board strayed from the “essential meaning” of Truitt in declining to extend it at least that far. Nielsen, 305 N.L.R.B. at 700.
Placing upon employers the obligation to supply the union, upon request, with financial information necessary to substantiate the employers’ objectively verifiable negotiating claims would introduce a valuable measure of self-regulation into the collective bargaining process. Such a rule would give unions leverage to keep employers honest, mitigating the Board’s need to police the employers’ subjective state of mind. See Gross et al., supra, at 1009; cf. Truitt, 351 U.S. at 152, 76 S.Ct. at 755-56 (“Good-faith bargaining necessarily requires that claims made by either
Adopting the theory of the dissenting Chairman in Nielsen would also correct an inaccurate assumption made by the Nielsen majority. The Nielsen majority’s central premise is that an employer’s claim of economic difficulties or competitive disadvantage is, for all practical purposes, identical to an unadorned refusal to pay what the union proposes. See Nielsen, 305 N.L.R.B. at 700 (“[T]he employer who claims only economic difficulties or business losses or the prospect of layoffs is simply saying that it does not want to pay.”). In fact, these two types of claims are fundamentally different, and the difference is crucial to the bargaining process. Whereas an employer’s pure unwillingness to pay is verified simply by the employer’s statement to that effect, a claim of pending competitive ruin generally requires some external verification before a union can reasonably rely upon it in deciding how to structure its negotiating strategy. Experience demonstrates that unions may well decide to modify their proposals in the face of the employer’s verified claims of economic hardship or competitive disadvantage. Unions frequently put job security at the top of their negotiating agendas, see, e.g., Michael H. Cimini, Labor-management bargaining in 1995, Monthly Lab. Rev., Jan./Feb.l996 at 32, and may seek to further this interest by lowering their wage demands in order to buy an increase in the employer’s long-term ability to provide jobs. A union might also seek increased linkages between employee compensation and the profitability of the company in return for reducing its hourly wage demands. See id. at 38 (“[S]everal airlines asked their unions to agree to wage and benefit concessions ... The unions wanted something in return for those concessions— stock in the carriers, a greater voice in how the airlines are run, and improved job security.”); id. at 39 (“Delta asked the pilots union ... to make wage and productivity concessions. The union said it would agree to terms if Delta gave it concessions in return— a representative on the airline’s board of directors, stock options, profit sharing ....”); see also Compensation is Increasingly Linked to Corporate Profits, NAM President Says, Daily Lab. Rep. (BNA), Apr. 18, 1997, at A-9 (“Corporations are increasingly tying compensation to business profits as hourly wages increasingly account fora smaller share of compensation-”); Ed-wajrd Cohen-Rosenthal & Cynthia E. BuR-ton, Mutual Gains: A Guide to Union-Management COOPERATION 253-60 (2d ed.1993); IBEW Local Reaches Tentative Agreement with L.A. Department of Water and Power, Daily Lab. Rep. (BNA), June 19, 1996, at A-9. But absent the information necessary to ascertain whether the employer’s claims of financial hardship or competitive disadvantage are accurate, the union must guess at whether such a course truly represents the best interests of its constituents. In this sense it faces the same “Hob-son’s choice” that obtains when the employer makes an unsupported “plea of poverty.”
I believe that the Board’s Nielsen rule has weakened the “gravitational field of Truitt” too severely for that opinion to retain its vitality, Nielsen, 854 F.2d at 1067, and hope that the Board will see fit to reexamine its Nielsen rule in the near future, and adopt an
. The "Russian roulette” situation does not exist in a wellfunctioning market, because the presence of alternative buyers enables the seller to reject an offer tainted by a prospective buyer's apparent bad-faith bargaining. But as the Supreme Court observed in United Steelworkers v. Warrior & Gulf Navigation Company, 363 U.S. 574, 580, 80 S.Ct. 1347, 1351-52, 4 L.Ed.2d 1409 (1960), no such option generally exists in the collective bargaining context, wherein the parties are under a "compulsion to deal with one another, as opposed to dealing with other parties.” Thus, although the type of bad-faith bargaining represented in the house-selling hypothetical is the same as that present in the collective bargaining context when a party refuses to turn over information, the consequences of that bad-faith bargaining differ in the two contexts; the prospective purchaser of a house would not be under any legal obligation to turn over information relevant to his bargaining claims.
