First Nat'l Maint. Corp. v. NLRB - 452 U.S. 666, 101 S. Ct. 2573 (1981)

Rule:

Although parties are free to bargain about any legal subject, Congress has limited the mandate or duty to bargain to matters of wages, hours, and other terms and conditions of employment pursuant to § 8(d) of the National Labor Relations Act, 29 U.S.C.S. § 158(d). A unilateral change as to a subject within this category violates the statutory duty to bargain and is subject to the National Labor Relations Board's remedial order. Conversely, both employer and union may bargain to impasse over these matters and use the economic weapons at their disposal to attempt to secure their respective aims. 

Facts:

Petitioner, First National Maintenance Corporation (FNM), a company engaged in the business of providing housekeeping, cleaning, maintenance, and related services for commercial customers, had a contract to do maintenance work for a nursing home. As a result of a dispute with the home over the size of the management fee, FNM terminated the contract, and FNM’s employees who worked at the nursing home were discharged. While the contract was still in effect, a labor union was certified as the bargaining representative for FNM’s employees at the nursing home. The union, upon learning of FNM’s intention to discharge these employees, requested a delay from FNM for the purpose of bargaining but FNM refused to bargain. The union then filed an unfair labor practice charge against FNM, alleging violation of its duty to bargain in good faith "with respect to wages, hours, and other terms and conditions of employment" under §§ 8(d) and 8(a)(5) of the National Labor Relations Act (Act). The National Labor Relations Board upheld the charge and ordered FNM, if it agreed to resume the nursing home operations, to reinstate the discharged employees or, if agreement was not reached, to offer the employees equivalent jobs at its other operations. The Court of Appeals enforced the Board's order, holding that while no per se rule could be formulated to govern an employer's decision to close part of its business, § 8(d) creates a presumption in favor of mandatory bargaining over such a decision, which presumption is rebuttable by showing that the purposes of the NLRA would not be furthered by imposing a duty to bargain.

Issue:

Must an employer, under its duty to bargain in good faith "with respect to wages, hours, and other terms and conditions of employment," §§ 8(d) and 8(a)(5) of the Act negotiate with the certified representative of its employees over its decision to close a part of its business?

Answer:

No.

Conclusion:

The Court rejected the presumption analysis and held the harm likely to be done to FNM’s need to operate freely in deciding whether to shut down part of its business purely for economic reasons outweighed the incremental benefit that would be gained through the union's participation in making the decision. Therefore, the decision was not one over which Congress mandated bargaining pursuant to § 8(d). The court reversed the judgment.