Does an employer violate nlra by making a unilateral chage

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Reference no: EM131281016

[In 2000, four subsidiaries of the Southern Company made modifications to the health care and life insurance benefits of their future retirees without negotiating with their employees' unions. The unions filed unfair labor practice charges against these subsidiaries, and the National Labor Relations Board determined that the subsidiaries violated Sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act bmaking the changes without bargaining collectively. The subsidiaries petitioned for review, and the Board cross-applied for enforcement of its order.] GRIFFITH, C. J.... The Companies ask us to set aside the Board's conclusion that they were required to bargain collectively before making the 2000 changes.

We first consider the Companies' argument that the NLRA left them free to make the changes unilaterally. Section 8(a)(5) of the NLRA makes it an unfair labor practice for an employer to "refuse to bargain collectively with the representatives of his employees." 29 U.S.C. § 158(a)(5). Section 8(d) requires employers to bargain collectively before introducing changes "with respect to wages, hours, and other terms and conditions of employment." Id. § 158(d).

An employer violates Section 8(a)(5) by making any unilateral changes to the mandatory bargaining subjects covered by Section 8(d), NLRB v. Katz, 369 U.S. 736, 743 (1962). The Companies argue that their unilateral changes to the OPRBs [Other Post-Retirement Benefits] were permissible because the future retirement benefits of current employees are not mandatory bargaining subjects under Section 8(d). We are not persuaded. The governing principle is found in Allied Chemical & Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass Co., 404 U.S. 157 (1971).

In that case, the Supreme Court held that retirement benefits for workers who have already retired are not mandatory bargaining subjects because retirees are not "employees" under the NLRA and are therefore not protected by the Act. See id. at 168 ("The ordinary meaning of ‘employee' does not include retired workers; retired employees have ceased to work for another for hire.") But the Court also made clear that retirement benefits for current employees are mandatory bargaining subjects: "To be sure, the future retirement benefits of active workers are part and parcel of their overall compensation and hence a well-established statutory subject of bargaining." Id. at 180. Because the 2000 modifications affected future retirement benefits of current employees, the Companies were required to bargain over them with the unions.

The Companies argue that the statement in Pittsburgh Plate Glass about future retirement benefits is a dictum and should not supply a rule of decision in this case. We have more faith than do the Companies in Supreme Court declarations that begin with "To be sure...." See United States v. Oakar, 111 F.3d 146, 153 (D.C. Cir. 1997) (stating that "carefully considered language of the Supreme Court, even if technically dictum, generally must be treated as authoritative") (quotation marks omitted).

But even if the question were an open one, the Companies' argument fails because "classifications of bargaining subjects as ‘terms [and] conditions' of employment is a matter concerning which the Board has special expertise." Local Union No. 189, Amalgamated Meat Cutters & Butcher Workmen of N. Am. v. Jewel Tea Co., 381 U.S. 676, 685-86 (1965); see also Ford Motor Co. v. NLRB, 441 U.S. 488, 497 (1979) ("Construing and applying the duty to bargain ... [lies] at the heart of the Board's function."). The Board has decided that future retirement benefits fit in Section 8(d)'s basket of mandatory bargaining subjects.

This decision, particularly in light of the Board's expertise, is rational and therefore lawful. See id. at 495 (noting that the Board's "judgment as to what is a mandatory bargaining subject is entitled to considerable deference"). No one could doubt that current employees are rightly concerned about the retirement benefits that they will receive in the future. Giving them the right to bargain collectively over those benefits is certainly sensible.... [The Board's order is enforced in relevant parts.]

Case Questions

1. Does an employer violate the NLRA by making a unilateral change in a "mandatory" subject of bargaining?

2. Did the employer's modification to the health care and life insurance benefits of future retirees without input from the unions constitute unilateral changes in mandatory subjects of bargaining?

3. Find an example of a "permissive" subject of bargaining in the Court's opinion.

Reference no: EM131281016

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