NLRB v. Bildisco & Bildisco

NLRB v. Bildisco & Bildisco

Opinion

 [*516]   [***489]   [**1191]  JUSTICE REHNQUIST delivered the opinion of the Court.

 Two important and related questions are presented by these petitions for certiorari: (1) under what conditions can a Bankruptcy Court permit a debtor-in-possession to reject a collective-bargaining agreement; (2) may the National Labor Relations Board find a debtor-in-possession guilty of an unfair labor practice for unilaterally terminating or modifying a collective-bargaining agreement before rejection of that agreement has been approved by the Bankruptcy Court. We decide that ] the language "executory contract" in § 365(a) of the Bankruptcy Code, 11 U. S. C. § 365 [****9]  (a) (1982 ed.), includes within it collective-bargaining agreements subject to the National Labor Relations Act, and that the Bankruptcy Court may approve rejection of such contracts by the debtor-in-possession upon an appropriate showing. We also decide that ] a debtor-in-possession does not commit an unfair labor practice when, after the filing of a bankruptcy petition but before court-approved rejection of the collective-bargaining  [*517]  agreement, it unilaterally modifies or terminates one or more provisions of the agreement. We therefore affirm the judgment of  [***490]  the Court of Appeals for the Third Circuit in these cases.

 On April 14, 1980, respondent Bildisco and Bildisco (Bildisco), a New Jersey general partnership in the business of distributing building supplies, filed a voluntary petition in bankruptcy for reorganization under Chapter 11 of the Bankruptcy Code, 11 U. S. C. § 1101 et seq. (1982 ed.). ³ Bildisco was subsequently authorized by the Bankruptcy Court to operate the business as  [**1192]  debtor-in-possession under 11 U. S. C. § 1107 [****10]  (1982 ed.). ⁴

 [****11]  At the time of the filing of the petition in bankruptcy, approximately 40 to 45 percent of Bildisco's labor force was represented by Local 408 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America  [*518]  (Union). Bildisco had negotiated a 3-year collective-bargaining agreement with the Union that was to expire on April 30, 1982, and which expressly provided that it was binding on the parties and their successors even though bankruptcy should supervene. Beginning in January 1980, Bildisco failed to meet some of its obligations under the collective-bargaining agreement, including the payment of health and pension benefits and the remittance to the Union of dues collected under the agreement. In May 1980, Bildisco refused to pay wage increases called for in the collective-bargaining agreement.

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