Petition by the National Labor Relations Board for enforcement of an order holding that respondent employer engaged in unfair labor practices in violation of sections 8(a)(5) and 8(a)(1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(5) and 158(a)(1). Petition granted.
Before Timbers and Kearse, Circuit Judges, and Lasker, District Judge.*fn*
This case presents the issue whether an employer has the duty to bargain with the union representing its employees as to a decision to close part of its operations.
The National Labor Relations Board (NLRB or the Board) seeks enforcement of its order of May 23, 1979*fn1 which, based on the findings of the Administrative Law Judge that First National Maintenance Corporation nM violated sections 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(5), 158(a)(1), by refusing to bargain with the union*fn2 representing certain of its employees, directs FNM to bargain with the union, to reinstate those employees, and to grant them back pay.
FNM is in the business of providing cleaning and maintenance services to commercial customers. During the spring of 1977, FNM serviced between two and four nursing homes. The approximately 35 employees who staffed its operation at the Greenpark Care Center (Greenpark) chose the union as their representative on March 31, 1977 and the NLRB certified the union on May 11th. On July 12th, the union wrote to FNM requesting a meeting to negotiate a collective bargaining agreement. There is no evidence that FNM responded to that letter.
During the spring and summer of 1977, FNM determined that it was losing money at Greenpark, and discontinued its services there as of August 1st. It did not notify the union before taking this action. On July 28th, FNM informed its Greenpark employees that they would be discharged on July 31st.
The same day, the union's vice president, Edward Wecker, telephoned FNM's secretary-treasurer and one-third shareholder, Leonard Marsh, requesting that FNM "stay on" at Greenpark. Marsh answered that FNM could not continue its operation there because of financial reasons. When Wecker asked whether they could meet to discuss the situation, Marsh said, " "We have nothing to discuss.' " The union and FNM had no further communications until the unfair labor practice charges were filed.
The NLRB found that FNM had violated Section 8(a)(5) and (1) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(5), 158(a)(1), and ordered FNM to bargain with the union upon request as to the decision to close its Greenpark operation; if the Greenpark services were resumed, to offer reinstatement to the discharged employees, and if no agreement to resume operations were reached, to bargain as to the effects of the closing and to establish preferential hiring for the terminated employees at its other operations. The order also awarded back pay to the discharged employees.
FNM does not dispute that it had a duty to respond to the July 12th letter sent by the union requesting a meeting to negotiate a collective bargaining agreement, and the parties have stipulated as to FNM's duty to bargain as to the effects of the Greenpark closing. Consequently, the only issue before us relates to FNM's duty to bargain as to its decision to terminate its Greenpark services.
Sections 8(a)(5) and 8(d) of the National Labor Relations Act, 29 U.S.C. §§ 158(a)(5), 158(d), together make it an unfair labor practice for an employer to refuse to bargain with the union "with respect to wages, hours and other terms and conditions of employment." See, e.g., Allied Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 164, 92 S. Ct. 383, 389, 30 L. Ed. 2d 341 (1971); Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 210, 85 S. Ct. 398, 402, 13 L. Ed. 2d 233 (1964). The present issue, then, is whether the decision to close the Greenpark operation affected the employees' "terms and conditions of employment" within the meaning of the statute.
The seminal case on the subject is Fibreboard Paper Products Corp. v. NLRB, supra, 379 U.S. 203, 85 S. Ct. 398, 13 L. Ed. 2d 233 (1964). There the Court held to be an unfair labor practice the employer's refusal to bargain as to the decision to contract out plant maintenance work formerly performed by its employees. Id. at 215, 85 S. Ct. at 405.
"The subject matter of the present dispute is well within the literal meaning of the phrase "terms and conditions of employment.' . . . A stipulation with respect to the contracting out of work performed by members of the bargaining unit might appropriately be called a "condition of employment.' The words even more plainly cover termination of employment which, as the facts of this case indicate, necessarily results from the contracting out of work performed by members of the established bargaining unit."
Id. at 210, 85 S. Ct. at 403 (citation omitted). The Court based its decision not only on the language of the statute but on the premise that requiring an employer to bargain in the circumstances would promote the purposes of the statute, that such a requirement was supported by industrial bargaining practices in the country, and that it "would not significantly abridge (the employer's) freedom to manage the business." Id. at 210-11, 213, 85 S. Ct. at 404.
Accordingly, the Court held
that the type of "contracting out' involved in this case the replacement of employees in the existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment is a statutory subject of collective bargaining under § 8(d). Our decision need not and does not encompass other forms of "contracting out' or "subcontracting' which arise daily in our complex economy."
Id. at 215, 85 S. Ct. at 405 (footnote omitted).
Although the decision in Fibreboard takes us part of the way, it does not fully determine the issue here: the obligation of an employer to bargain in the case of the closing of part of his facilities. Fibreboard was expressly limited to its facts, and they are distinguishable on the grounds that Fibreboard involved a less significant change in the employer's business. In Fibreboard, after the decision to contract out, the business continued to operate unchanged except for the use of the employees of the subcontractor for those of Fibreboard performing the same work under the same conditions. On the ...