Law School Case Brief
NLRB v. Exch. Parts Co. - 375 U.S. 405, 84 S. Ct. 457 (1964)
The broad purpose of § 8(a)(1) of the National Labor Relations Act is to establish the right of employees to organize for mutual aid without employer interference. It prohibits not only intrusive threats and promises but also conduct immediately favorable to employees which is undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and is reasonably calculated to have that effect.
Shortly before a union representation election that had been ordered by the National Labor Relations Board ("NLRB"), respondent Exchange Parts Company ("Employer") conferred on its employees economic benefits consisting of increased vacation and overtime benefits. After the union lost the election, the NLRB found that the Employer's conferral of economic benefits was done with the intention of inducing the employees to vote against the union, which violated § 8(a)(1) of the National Labor Relations Act ("NLRA"), making it an unfair labor practice for an employer to interfere with his employees' rights relating to organizing or joining labor organizations. The United States Court of Appeals for the Fifth Circuit denied the Board's petition for enforcement of its order, holding that even though the Employer conferred the benefits for the purpose of inducing the employees to vote against the union, it was not an unfair labor practice under § 8(a)(1), since the benefits were put into effect unconditionally on a permanent basis, without threats. The NLRB was granted a writ of certiorari.
Did the Employer violate the NLRA when it offered economic benefits to its employees for the purpose of inducing them to vote against the union?
The Supreme Court of the United States reversed the appellate court's decision. The Court noted that the broad purpose of § 8(a)(1) was to establish the right of employees to organize for mutual aid without employer interference. Section 8(a)(1), the Court ruled, no doubt it prohibited not only intrusive threats and promises but also conduct immediately favorable to employees that was undertaken with the express purpose of impinging upon their freedom of choice for or against unionization and was reasonably calculated to have that effect. As stated by the Court in a prior decision, the action of employees with respect to the choice of their bargaining agents may be induced by favors bestowed by the employer as well as by his threats or domination. The danger inherent in well-timed increases in benefits was the suggestion of a fist inside the velvet glove. It was unlikely that employees would miss the inference that the source of benefits now conferred was also the source from which future benefits must flow and which might dry up if it was not obliged.
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