*1 ELECTRIC CORPO WESTINGHOUSE Petitioner, RATION, LABOR RELATIONS

NATIONAL BOARD, Respondent.

No. 10545. Appeals

United Court of States Circuit. Fourth

Argued Oct.

Decided Nov. *2 Wayman, Pittsburgh, Pa., respect John G. to in food at Scheinholtz, (Leonard plants comprising L. Paul A. Manion cafeterias in the em- McClay, Reed, Smith, ployer’s Friendship & Pitts- Shaw Center Defense near burgh, Pa., brief), petitioner. eight Airport, on for about miles from center of Baltimore.1 The Board cross- Bendixsen, Atty., B. Glen N. L. R. M. petitions for of its enforcement order. Counsel, (Arnold Ordman, Dominick Gen. Manoli, Counsel, L. Marcel Associate Gen. response the announcement of Mallet-Prevost, Counsel, Asst. Gen. prices, Association, in increase food Sohn, Atty., N. on Michael N. L. R. bargaining representative exclusive brief), respondent. appropriate units within the Defense Roth, Benjamin Center, requested Werne and William in October 1964 a meet City, Au- Westinghouse New York for National brief to discuss cafe Merchandising Ass’n, as amicus meeting tomatic teria conditions. A was ar ranged curiae. office representative industrial relations SOBELOFF, Before BOREMAN Catering executives the Baltimore CRAVEN, Judges. Circuit Company, operator of the cafeterias Westinghouse.2 under contract from A Judge. CRAVEN, Circuit representative Westinghouse pres was Corporation Westinghouse Electric ent. He considered his status of an and set petitions this court to review observer. Re- Labor of the National aside an order directing Westinghouse adopted position lations Em- with the Salaried house ployees the Association would have to discuss prices exclusively the Baltimore caterer, Association of food with the Division, independent since Federation as an contractor it con- (herein- Independent prices. Hence, Westing- Salaried Unions trolled cafeteria Association) in obligation after to as the referred house maintained it had no Board are from the Catering (January 21, 1966). The decision Set out below .at for the use of in their vides ment terias “2. the event glassware, tory WESTINGHOUSE, “3. “7. WESTINGHOUSE above mentioned. shall at his own “6. CONTRACTOR TOR expense, tice sils ^[*] WESTINGHOUSE to the other capital equipment (E)ither party WESTINGHOUSE shall upon sixty (60) days * * the cafeterias. equipped Company time to terminate ^[*] reported entirety renewable maintain the use of the CONTRAC- silverware and *. and order of the Labor loss ^[*] are relevant CONTRACTOR, in a party. (CONTRACTOR): remain the at 61 L.R.R.M. expense replace, * * * in shall have the ^[*] one-year and the shall, manner good order, which it shall cooking ^[*] written this which shall at his own all provisions Baltimore premises property maintain satisfac- contract provide ^[*] dishes, agree- uten- cafe- pro- no- in vide ficient “8. meals thereof, quality the cafeterias HOUSE the times to the ileges TRACTOR TRACTOR shall mentioned. the discretion of INGHOUSE. shall be “9. The per year HOUSE on or times be reasonable. shall be furnished each “19. As records sales shall be submitted to WESTING- endar month.” each month ^[******] CONTRACTOR all meals daily deposit served, personnel hereinbefore in said in agreement compensation quality advance, thoughout covering shall WESTINGHOUSE sum approval quantity, A and food-stuffs of * * * before and hours of service cafeterias (Emphasis added.) monthly at the of one dollar pay maintain WESTINGHOUSE, slips periodical * shall furnish suf- properly operate granted, the 10th subject day premises and shall * preceding record shall at all WESTING- to WEST- accounting ®. CON- Manager duplicate the term audit at ($1.00) at all day CON- above privi- of all pro- cal- respect ing company making before determina- negotiate rep- concerning refused to the matter with tions their reasonableness. resentatives the Association. Board, January 1966, Labor Subsequently, January 1965, adopted findings, conclusions, posted caterer of an notice additional in- recommendations of the Trial Examiner price crease of five cents of hot with some modifications. Two of the five *3 food entrees and of one vigorous cent in the Board members filed a dissent. carry-out Westinghouse, coffee. agreed majority of Board The request negotiate of the Association to in disputed sub- matter was a regard increases, again to these refused ject Westinghouse and that for the stated reason that it had no con- 8(a) (1) (5) had committed unfair prices by trol over cafeteria set the cater- by refusing negotiate practices labor er, independent an contractor. by after the Association. The Westinghouse unwillingness found, however, The recommended order was bargain filing unfair of an accordingly resulted in the to be too broad and was re- by practice charge Association. permit Westinghouse labor vised to laterally to uni- issued, complaint A and after hear- was consult with the caterer concern- ing, ing proposed the Trial price changes a decision was rendered approve Westing- Examiner. He found that them without notice or discussion with including eating facilities, house prices so, the Association. Even the Labor served, majority of meals constitute condi- required Westing- Board meaning employment tion of specific request within house honor “a for bar- 9(a) gaining of the National Labor Section about made or to be Act;3 Relations re- made.” tains a substantial measure control question presented The prices; over the cafeteria and that its petition a narrow whether the one: bargain refusal to the Association in prices beverage of food in served respect in increase at the Defense cafeterias engaging prac- house is in unfair labor independent Center an caterer are the proscribed by 8(a) (1) tices Sections and subject mandatory bargaining. (5) of the Labor Act.4 inquiry initial for the court is whether or- The Trial Examiner’s recommended the cafeteria statutory phrase come within the der would have employ- “conditions of concerning consult with the Association Congress compelled ment” as to which proposed changes prices by the eater- bargaining. 9(a) 3. Section of the National Labor Re- 158(a) (1). Act. 29 U.S.C.A. These § provides pertinent part lations Act collectively bargain include the “to that: through representatives own “(a) Representatives designated * * choosing 29 § U.S.C.A. purposes selected for the of collective 8(a) (5) Section makes it an unfair labor bargaining by majority of the em- practice employer for an “to refuse to ployees appropriate in a unit for such collectively representa- with the purposes, repre- * * shall be the exclusive employees tives of his 29 employees in of all the 158(a) sentatives § U.S.C.A. gaining Collective bar- purposes unit for bar- of collective 8(d) defined Section gaining respect pay, performance to rates obliga- “the of the mutual wages, employment, hours of or other employer representa- tion of the and the * * employment conditions employees tive of the to meet at rea- added.) (Emphasis § 29 U.S.C.A. sonable times and confer faith respect hours, wages, and other 8(a) (1) 4. Section of the National Labor employment terms and conditions * * * provides Relations Act it shall be obligation but such does an unfair compel labor for an party agree pro- either to a with, restrain, posal “to require interfere or coerce making of a conces- rights in the exercise of the 158(d). (Empha- sion.” 29 U.S.C.A. § guaranteed” added.) them in Section 7 of sis year concurring Stewart, dollar a and that on at least oc- Justice one Mr. Corp. operat- Paper L. casion it underwrote Products N. the caterer’s v. Fibreboard strong B., parlance, loss is common indication that West- R. states that “[i]n inghouse employment person’s considers the of some cafeterias the conditions of a significance job obviously physical as a and as inducement are most the various maintaining working employee an aid to morale. dimensions his environment.” Corp. Paper Fibreboard N. L. Products distinguish seeks 203, 222, 398, 409, R. 379 U.S. S.Ct. Weyerhaeuser Co., L.N. Timber (Stewart J., (1964) 13 L.Ed.2d (1949), R. B. 672 the Labor where concurring). availability of food and statutory held that had a drink at reasonable seems to us duty price of meals about the obviously important part physical of one’s logging camps. It true served at its working What, including environment. logging camp cry that a far from is a breathes, air one could more metropolitan Baltimore. But the need “physical” Why company pro- *4 ? would a same, doing difficulty eat is the and so employees vide its a on its may be occasioned different factors premises, effectively subsidized,5 except being meaningful without there a dis- its concern and interest in their tinction the cases. physical working ? environment sought the belittle has on- that Insistence solely by viewing it case issue in this subject a are not conditions site cafeteria penny controversy of a an over increase a bargaining mandatory of collective coffee, cup price it in- of a on the especially in the without merit possibly “ma- have sists could that record shows circumstances. The employ- of terial on conditions effect” Westinghouse employees from are allowed argues held has that this circuit ment. It thirty forty-five minutes lunch whether that to determine order eating only independent inadequate that particular matter should be dis- exist a reasonable facilities within contem- within the of forty- forty plants.6 of the Some tance statute, plation a “ma- Westinghouse employees must have percent the five “wages, plant impact” significant who in the cafeterias. Those eat terial or dependent on em- want hot food are employ- hours, or other conditions may although ployer’s cafeterias, others ment,” citing Mine District United carry pails prefer from home. lunch (4th L. R. F.2d 234 Workers v. N. Lehigh 1966), N. L. B. Cir. R. Westinghouse provides fact Co., F.2d 821 Portland Cement capital space the caterer with the (4th 1953). equipment for rent one the nominal Cir. eating “off-the-premises Westinghouse, effect, when subsidizes because many capital equipment fraught space ns to with so obstacles it makes employees impossible for for nominal con- se- to the caterer make it available Moreover, the time record cure a meal and return within sideration. the shows * * * (T)he near- them. the caterer allotted to reimbursed during off-the-premises eating $1,800.00 est facilities extent considering away, is, period about a mile there when the cafeteria at one earlier employees began employ- large operations at these the number before location seating capacity peak. sites, the at insufficient had reached its ment ready places, there a lack of available places specifically commercial found to such Labor Board access

6. The and, dining transportation, private “inadequate were auto- facilities were there (the used, the there would be a reasonable distance mobiles inescapable within getting Westinghouse) plants.” time factor The Board incident lots, company parking findings adopted Exam- from Trial the the of the finding public traversing highway which included iner by existing parking space parking “compelled” or near employees and then were premises eating place.” on to eat circumstances place great majority True, those of work than the District contain did very employ- employees,” words, spoken dif- of the in a conditions were despite sufficiently affected, had ment were ferent context. There only twenty-five percent into certain fact that entered subcontracts question occupied housing, was maintenance workers such work living quarters other whether it should be were available to every them. advance about decision to sub- We thus found a ef- “material” contract, although merely practices fect af- because the number of workers might substantially employees’ fected in the future affect was less than is in- opportunities. present dispute. volved in work It was shown that pre-existing subcontracting charged' An increase any employee had not resulted suffer- only facility avail offered in the layoff or loss of overtime. The unquestionably employees has. able to the agreed court that on such a record the impact on the workers. substantial Board was entitled to conclude that there price was no small amount the increases impact “substantial” adverse employer’s caused not the meas coffee hot dishes is subcontracting decisions. In the case at importance In. ure of issue. bar, however, dispute is not over man whether matter is a possibility the theoretical of a future datory subject bargaining, whether price increase, but a increase that financially much or little is involved is not. already been instituted and that af- *5 controlling test. forty forty-five fects percent some to touching man no issue here is employees. Involved While in 50 District we agerial core' lie at “the prerogatives which no found impact substantial on the em- control,” Fibreboard entrepreneurial ployees requiring employer to bar- B., Corp. 379 Paper L. v. N. R. gain, Products we impact observed that if even 409, 223, 398, 203, L.Ed. 13 U.S. 85 S.Ct. substantial, were might unduly it be bur- (Stewart, J., con 233, (1964) 246 2d impracticable densome and require to full- benefit, employee curring), encom but an scale every in advance of de- requirement to- passed in the Labor Act’s cision to put subcontract before it was discussing bargain collectively.7 “con In into keeping effect. sug- with this proper employment” are gestion, ditions of has, the Board case, in this limit- subjects bargaining, In court ed by its order express reservation 247,. B., L. R. 170 F.2d land Steel Co. N. that need not over 1948),. 251, (7th proposed Cir. price 12 A.L.R.2d advance, increases in feeding”' “in-plant named as illustrative need discuss employee as. as well as such benefits after unilaterally effectuated periods, facilities, health clinic vacation specific and of the union. pension plans. underlying phi The Similarly, Lehigh Cement, Portland losophy that of the Labor Act is discus supra, company-owned held we that hous- manage sion of issues between labor proper subject is a of collective bar- prophylactic ment serves as a valuable gaining “materially if it affects the con- removing grievances, fancied, and real or employment.” dispute ditions of The improve to tends and stabilize labor rela employer’s that case concerned the re- Experience major tions. teaches fusal unilaterally after he had interruptions may spring work from company-owned raised the rents on hous- seemingly trivial causes. ing. We found that where the rent had prevailing been rate, “coupled below the Westinghouse maintains even living with the convenience of price charged nearer should the food and 7. Neither the Association nor participate forming the Board or to the contract any right caterer, has claimed the Association participate selection caterer policies. from reserva-

beverage company-operated is evident in a This established tions in contract8 of bar- be considered a Westinghouse practices the cater- gaining, ought negotiate something er. which it has no over Westinghouse insists, This, control. specifies meals The contract futility. would be mere exercise good quality, sub- foodstuffs are to be ject Westinghouse approval of the Westinghouse The contention quality manager, prices of and that over that it no control exercises are at all times to be reasonable. meals question of law but does not ac- Provision is made maintenance counting simply Trial Examiner one of fact. periodic records and audits decision, adopted specifically in his found Daily Westinghouse. discretion Board, the Labor monthly deposit slips sales records measure of “retains a substantial control company must be submitted charged the cafe over facilitate audit and determination finding of this teria.” Judicial review prices. of reasonableness of “sup limited ported whether it is Moreover, it has been the evidence on substantial the caterer to inform and in ad- discuss ** record as a whole considered price changes vance intended with West- 10(e) (f) Section National inghouse. necessary appear This would Act, Labor Relations 29 U.S.C.A. § against sixty- to insure invocation of the (e), (f), Corp. Camera L. Universal v. N. day clause, giving termination either R. 340 U.S. 71 S.Ct. 95 L.Ed party to end the after contract sixty days written notice to the other. persua- clause accords The record taken as a whole in leverage sive economic to influence cafe- controversy supports the conclusion policies. teria of the Trial Examiner. There abun Westinghouse acknowledges dant in a letter evidence that ex employees,9reproduced power ercises to its in the mar- extensive over cafeteria *6 provide provisions Pertinent AVe all facilities the service. tlie they responsible Catering Company for remainder. con- the are house-Baltimore supra. operations are us Their monitored tract are set out in note employes good get serv- sure that “WESTINGHOUSE ELECTRIC ice, quality prices and at as rea- food CORPORATION possible. sonable as Space “Defense Center periodically revieio “We our cafeteria *1* survey prices, and a recent shows 16, 1964 “October higher no than non-sub- are other Employee: “Dear Fellow prices in the industrial cafeteria sidized great “There deal mis- has been a In order the Baltimore area. to monitor given information out about our cafe- prices, toe costs audit the cafeteria for you I like tell what our teria. would incurred the Balti- and labor food more policy is. Company Catering toe can so eating to eliminate “We are anxious determining have a basis rea- the shop areas where cleanli- office prices. prices, sonable These important factor ness is such an in satis- course, consideration are set due Therefore, pro- fying our customers. we com- and labor costs and are the conveni- vide facilities As rendered. mensurate for the services you bring employes ence of our —whether this, prices example our visitors your purchase lunch it at the counter. or higher dining at set rate room are your and wo no This choice is own have additional service order care of take way one the other whether interest manage- provided for our customers bring you buy your lunch it. We ment. provide order take facilities serving always beverages food, serving “We have insisted we care of highest quality, at as Balti- into a contract entered food of possible. perform Catering Company reasonable AVe believe more Westinghouse suggests gin, operations are monitor- that cafeteria that the good requiring at order of negotiate ed it to insure service and food the Labor Board it to prices, it audits costs over cafeteria reasonable increases is ordering doing tantamount to order to have basis for it to cease caterer, prices. business with the reasonableness of The com- and amounts pany always assures has therefore to an unfair labor its it .10 highest serving 8(e) under Section “insisted on quality, food of the the Labor Act agree. pos- We do at not as reasonable as Association has asked, added.) (Emphasis not Westinghouse nor sible.” ordered agree to cease business Westinghouse urgently insists that the with the caterer. We cannot assume that impracticable Labor Board’s order is exchange bargaining ideas purposes will not effectuate produce table will no Nor alternatives. is National Labor Relations Act. We dis- employment to be assumed that of an agree. Westinghouse’s position is other necessarily caterer would result in premised upon notion, dealt with here- prices. any event, lower inabove, that it has no control over the negotiate respect to a condition of em caterer and that about ployment may solely not be denied be would be futile for the reason that no possibility cause of the remote that the agreement possibly could be reached. employer may to alter his Fibreboard, relationships “[t]he said in business As was with other em ployers. that, although it is short answer satisfactory say possible whether inapposite 8(e) Section reached, labor national could be solution proscribes case since it “hot congressional policy founded cargo” arrangements and other intended that the chances determination enough policies to affect the labor relation subjecting is- to warrant employer. See, g., some other e. Meat and negotia- process of sues to the collective Highway Drivers Union etc. v. N. L. R. Corp. Paper tion.” Fibreboard Products B., U.S.App.D.C. 287, 335 F.2d 709 203, 214, 85 S.Ct. v. N. L. R. U.S. (1964); Cox, Law and the National (1964). 398, 404, 233, 240 13 L.Ed.2d Policy (1960); Labor Notes and Com ments, 38 N.Y.U.L.Rev. 97 ar- did offer to agreement sought here is intended range meetings the Associa- improve working conditions of however, This, falls tion and the caterer. Westinghouse employees. employer’s duty short of under Westinghouse employees Labor Act. We believe the order the Labor statutory have no relation to caterer extremely practical one, Board an well *7 bargain require which would it to with designed purposes to effectuate the of the representatives. employer their It is the Act. It is consistent our with view that who is to the Act and the Associa- “statutory bargaining requirements Westinghouse. tion’s recourse is to flexibly should be administered meet employer permitted disperse cannot be particular the needs of the case.” Dis responsibility by interpos- device of the 50, trict United Mine Workers v. N. L. R. ego. an alter B., supra, Bargaining 358 F.2d at 238. our cafeteria will stand a employer test of com- any to enter into contract or parison any agreement, express with industrial cafeteria implied, whereby or the area. such ceases or refrains or * * * “Sincerely, agrees doing to cease business Brown, “Buford M. any person, any with other contract Vice President” agreement or entered into heretofore or (Emphasis added.) containing agreement hereafter such an “(e) prac shall be to such It extent shall be an unfair labor unenforcible * * organization any tice for labor void 158(e). 29 U.S.C.A. § though required, use, cafeterias, is still limited of left the respond bargaining permit free to quickly caterer to the over the on each of on the to fluctuation the cost item menus each the three ingredients potential unions has and the vicissitudes for extensive preemption management restaurant business. and em- ** * ployee time. matters may begins, prove Bargaining, once wages, hours, working conditions, job practical. equally Since security, deserving and the like are left free are house the caterer the status of gaining collective bar- may change initially think as ; penny-a-cup increases necessary, to be no oc- seem there would carryout coffee are better left to the full-scale collective casion for voluntary mercies of the action of the nature, which of a formal and extensive marketplace. register When cash being sometimes bur- was envisioned as stops ringing, of coffee will Judge in District densome supra, Sobeloff begin descending.” F.2d at 238. As Labor “(t)he particular said, Board amount of itself whether satisfy subject of time and discussion matter should be deemed statutory obligation mandatory bargaining meet at rea- there should be ‘to legal recognition confer in faith’ distinction be- sonable times and may * * Co., vary subjects Shell 149 tween those which have a ma- Oil terial, significant impact L. R. B. or substantial N, upon wages, hours or other conditions of The Board’s order will be enforced. employment those which are indirectly, incidentally remotely re- (dissent- Judge BOREMAN, Circuit employment lated to conditions. The dis- ing) : senting pointed members of disagree- my respectfully I state out, Most effect, equating the trifles enforcing majority decision subjects ment here involved with wages, hours, working Board’s order. conditions, job security, pensions, insurance, choice B.R. ex- N. L. members of Two bargaining representatives or other sub- of dissent a note pressed their views jects directly materially affecting most rea- approach to be I their and find employment” “conditions of non- sheer fully justified the circum- sonable sense. stated, in here. The dissenters stances part, groups employees Here, as follows: different « represented * * -x- Electric are Thg requires that statute separate un- unions are three while some hours, wages, over an unions, represented. three One Here, employment. and conditions relatively representing only per- small voluntarily provided employer has centage employees, undertakes employees. An in- for his cafeterias dependent complain it. the failure to furnishes contractor We told Employees prices. food may sets the Catering Company of Baltimore were bring lunches eat also their granted wage negotiated increases is no the cafeterias. There them in complusion bargaining representative, one of lunches; bring buy *8 uncomplaining here, the two unions indeed, percent of work 40-45 prices that in the increases were nec- In makes use of the cafeterias. force essary by operating of reason increased case, union, this one of three costs. plants, proposes prices, includ- penny- require Westinghouse of a the most recent increase The Board would carryout specific a-cup on coffee and 5 cents to the union at its items, subject mandatory respecting of hot be of reasonableness bargaining. joint, prices is in “made or be Since there al- course, should them, provided, of may tween happen in the made.” Just what pay, respect of rates of ‘in be a matter position in of event the wages, employment, other con- unaccept- bargaining negotiations hours is ” * * * employment.’ clearly See apparent. ditions able to the union is not Company, Weyerhaeuser L.N. Timber complaining force West- If union can this theory may 672, (1949). A bargaining R. B. inghouse engage in such applicable proper efforts to logically context denied the same cannot be apply clearly inappropriate it to situa- they should de- to the other unions two discouraged tions should be where re- Voluntary mand and unsolicited ef- it. are, charged petitioner, sults provide as facilities forts absurd Balanced and and mischievous. primarily services the conveni- effective should be collective ence and accommodation statutory pur- objective. the ultimate up plague rise which pose may by formulating, best be attempt served cannot control can adopting, applying a reasonable con- only by exercise such control resort to the cept employment” of “conditions of cancellation of the caterer’s contract aft- determining subjects mandatory giving Being bar- er notice. gaining. placed in such an unfair unenviable position as ordered Board would Undoubtedly is the caterer interested in hardly seem to suitable reward for be a sales, maintaining profitable volume Conceivably, such efforts. enforcement Westinghouse employees and the who disagreement, of the order could lead avail themselves offered services dissatisfaction, strife turmoil. clearly position are pressures apply economic- seeking to hold my view, not the intent it was power reasonable recog- levels. This Congress enacting National Labor dissenting nized members of the every by every sweep act Relations Act to Board when voluntary refer to “the within the ambit “conditions action of marketplace.” To borrow a employment.” of petitioner are reminded We portion concluding their thrust— and conditions of situations “when register stops the cash ringing” may indirectly affect the interests the silence is ominous. employees. Bargaining representa- may argue company tives salaries of high officials are so to leave too little as company employees, income for company pro-

increases in

ducts will result in curtailed sales and less employees, company

work for that the spending too too much or little on re- development thereby search and and is In the FALLICK, Matter of Lowell S. jeopardizing opportunities future work Bankrupt-Appellant, employee income, or, company that the manufacturing products to be used in a Harry KEHR, Appellee. shipped war or to nation of which the 157, No. Docket 30549. disapproves. my union knowledge To yet recognized these matters are not as Appeals United States Court of mandatory subjects bargaining. Second Circuit. Argued Nov. appears The Board in case to fol- articulated, theory, low its earlier Decided Dec. by Congress duty imposed there is a bargain collectively employers “to employees’representatives with re-

spect might matter which *9 emerge as a bone contention be-

future