Justia Federal District Court Opinions

The Board held that the respondent union violated its duty to 'confer in good faith with respect to wages, hours, and other conditions of employment * * *' imposed by section 8(b)(3) and 8(d) of the National Labor Relations Act, 29 U.S.C. 158(b)(3) and (d) when it refused to enter into a collective bargaining agreement unless that agreement contained a provision requiring the employer to post a performance bond.

The respondent first contends that the evidence does not support the Board's finding that the respondent insisted upon the posting of a performance bond. We think that the record considered as a whole contains substantial evidence to support the Board's finding. See Universal Camera Corp. v. NLRB,340 U.S. 474, 71 S.Ct. 456, 95 L.Ed. 456 (1951).

The respondent next contends that the Board erred in concluding that bargaining for the performance bond clause did not constitute bargaining 'with respect to wages, hours, and other terms and conditions of employment' within the meaning of section 8(d). See NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 349, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958).

The Board has uniformly held that bargaining for a performance bond does not fall within the meaning of section 8(d), and that, therefore, the parties may not insist upon such a bond to impasse. These orders have uniformly been enforced, despite challenge. The cases are collected in NLRB v. American Compress Warehouse, 350 F.2d 365, 370 n.7 (5the Cir. 1965), and NLRB v. Davison, 318 F.2d 550, 555 n.14 (4th Cir. 1963). The basic reason for these rulings was expressed in Excello Dry Wall Co., 145 N.L.R.B. 663, 664 (1963): 'The statutory obligation to bargain is not limited and cannot be limited to financially responsible parties, whether employer or labor union.'

In the present case the Board did not hold all performance bond clauses to be nonmandatory subjects of bargaining. Respondent had argued to the trial examiner that the performance bond it has sought was different from those involved in the Board's earlier decisions because it was to be a cash bond (rather than a surety bond), and because it was to be conditioned solely upon payment by each employer of the wages and other benefits due its employees. The trial examiner expressly reserved the question of whether such a performance bond clause would have been a mandatory subject of bargaining. He pointed out that the clause involved in this case would have required the contracting employer to pay liquidated damages and to guarantee payment of wages and fringe benefits due the employees of subcontractors of the contracting employer. The trial examiner held: 'a contract which includes an obligation to pay wages of another employer's employees or to pay damages for nonperformance of an employer's obligation * * * would be a nonmandatory subject of bargaining.' International Hod Carriers, Local 1082, 150 N.L.R.B. 158, 178 (1964). The Board adopted this conclusion.

' Obviously, classification of bargaining subjects as 'terns or conditions of employment' is a matter concerning which the Board has special expertise.' Local Union No. 189, Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO v. Jewel Tea, 381 U.S. 676, 685-86, 85 S.Ct. 1596, 1600, 14 L.Ed.2d 640 (1965) (opinion of Justice White). We are not convinced that the Board erred in the exercise of that expertise here.

The order of the Board will be enforced.

ELY, Circuit Judge (dissenting);

I respectfully dissent. I expressed my views in a proposed opinion in which my Brothers, after very careful and conscientious consideration, refused to concur. It reads as follows:

The National Labor Relations Board petitions for enforcement of an order which directs the respondent union to cease and desist from engaging in conduct found to constitute an unfair labor practice and to take certain affirmative action. Our jurisdiction is supplied by section 10(e) of the National Labor Relations Act, 29 U.S.C. 160(e). The decision of the Board is reported at 150 N.L.R.B. 158 (1964).

For two years prior to May 31, 1962, E. L. Boggs, a plastering contractor, had been party to an agreement with one of the respondent's sister locals. When that agreement expired, Boggs joined the Progressive Plastering & Lathing Contractors' Association, an organization which was formed to provide collective bargaining representation for its members. In June, 1952, a representative of the respondent union appeared at Boggs' jobsite and delivered a copy of a proposed contract to Boggs' foreman. The foreman delivered the contract to Boggs, in compliance with the union representative's instructions, but Boggs refused to sign it. Shortly thereafter, the Association, acting for Boggs and its other members, entered into negotiations for a new contract with the Southern California District Council of Laborers, of which respondent was a member. No agreement was reached. The reason for the failure of these negotiations, and the reason for Boggs' unwillingness to sign the contract which had been offered to him earlier, was the union's insistence that it would not agree to a contract which did not contain a provision for a performance bond. During the period of the negotiations between the Association and the District Council, one Tarr, the respondent local's business representative, approached Boggs and, attempting to persuade him to sign a contract containing a performance bond clause,1 threatened a work stoppage. When Boggs persisted in his refusal, Tarr carried out the threat and set up a picket line around the jobsite. Boggs then agreed to sign the contract upon the understanding that he might give a certified check to satisfy the bond provision and that the check would be held, uncashed, pending an agreement between the Association and the District Council for a blanket bond covering all the Association's members. After Boggs signed the contract and delivered the check, the picket line was removed.

The Board held that the respondent's insistence upon a performance bond clause, as evidenced by its position at the bargaining table and by its subsequent picketing to obtain such a clause, violated section 8(b)(3) of the National Labor Relations Act, 29 U.S.C. 158(b)(3) The order requires that the respondent cease and desist from its insistence upon the inclusion of a performance bond clause in its contract with Boggs or upon Boggs' compliance therewith and that it return to Boggs the certified check which he had delivered to Tarr. The order further requires that if the check has been cashed the respondent shall repay its face amount, together with interest from the date of cashing. Respondent contends that the determination that its conduct violated section 8(b)(3) was erroneous.2

Section 8(b)(3) of the act imposes upon a labor organization and its agents the duty to bargain collectively with the employer.3 Section 8(d), which defines that duty, requires that the employer and the representatives of the employees 'confer in good faith with respect to wages, hours, and other terms and conditions of employment * * *.' While collective bargaining need not be confined to the italicized subjects, called 'mandatory subjects,' the refusal to enter into an agreement on the ground that it does not include some proposal which is not one of the 'mandatory' subjects of bargaining constitutes a violation of the duty to bargain collectively. National Labor Relations Board v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 349, 78 S.Ct. 718, 2 L.Ed.2d 823 (1958). It was only by application of this rule that the Board determined that respondent had committed an unfair labor practice. The Board expressly rejected a finding by the Trial Examiner that the respondent had been guilty of a general refusal to bargain in good faith by adopting a 'take it or leave it' attitude. 150 N.L.R.B. at 161-163.

Respondent's main contention here is that the performance bond provision falls within the range of mandatory bargaining subjects and that, therefore, insistence therefor is not improper. It also urges that, even if the subject is nonmandatory, its insistence upon the clause was not of such a nature as to justify application of the rule of Wooster Division of Borg-Warner. Agreement was not prevented by its demand for a performance bond, respondent argues, but by the inability of the parties to agree on several proposals, some clearly within the area of mandatory bargaining. We have examined the record. It fully supports the Board's determination that the failure of negotiations resulted from respondent's insistence upon a contractual provision for a performance bond. Our decision must turn on whether respondent's particular performance bond proposal was a subject included within the language, 'wages, hours, and other terms and conditions of employment.' If not, the finding of unfair labor practice must be upheld.

Petitioner contends that the status of performance bonds as nonmandatory subjects is settled, and, indeed, the assertion has been made by the courts. See, e.g., N.L.R.B. v. Davison, 318 F.2d 550, 555 (4th Cir. 1963). We have discovered only one decision, however, in which such a broad statement of the proposition was necessary to the result which was reached. In Carpenters' District Council of Detroit, 145 N.L.R.B. 663 (1963), enforced, 58 L.R.R.M. 2064 (D.C. Cir. 1964), the Board held that 'insistence upon any performance bond * * * is per se an unlawful refusal to bargain.' 145 N.L.R.B. at 667. With the exception of that case, the decisions cited by petitioner in support of its position are distinguishable from the matter at bar. Jasper Blackburn Products Corporation, 21 N.L.R.B. 1240 (1940), the progenitor of the line of authority upon which petitioner relies, declared that the employer, by insisting upon a performance bond, had refused to bargain in good faith. In that case, however, the underlying reason for the decision was the determination that the purpose of the employer's insistence for the bond was to thwart agreement generally.4 Offering a proposal with such intention and purpose, regardless of the mandatory or non-mandatory nature of the subject matter of the proposal, constitutes an unfair labor practice. See N.L.R.B. v. Herman Sausage Co., 275 F.2d 229 (5th Cir. 1960). As to the performance bond itself in Jasper Blackburn, the only characteristic which the Board found objectionable was that the employer was enabled, as a condition to agreement, to require, in effect, that the union 'pay a tax to a surety company * * *.' 21 N.L.R.B. at 1254. That particular objection is inapposite in the instant case,5 as a cash bond was accepted. Jasper Blackburn did not hold that a per formance bond clause does not relate to 'wages, hours, and other terms and conditions of employment.'

The decisions in N.L.R.B. v. Davison, supra, and Local 164, Brotherhood of Painters v. N.L.R.B., 110 U.S.App.D.C. 294, 293 F.2d 133, cert. denied, 368 U.S. 824, 82 S.Ct. 42, 7 L.Ed.2d 28 (1961), which declared performance bonds to be non-mandatory subjects, appear to us to have derived from the scope of the particular bonds involved in those cases. The proposal in Davison was held non-mandatory because it 'related to security for the contracting party * * * rather than relating to a benefit or security for the employees.' 318 F.2d at 556. In Local 164 the union's proposed bond was payable 'to the union in the event * * * that said contractor has committed any substantial breach of this agreement or has failed to comply with any of the terms or conditions of employment specified thereunder.' This language, noted the court, indicated that the union itself, in drafting the particular bond provision, recognized that the coverage was to extend beyond 'terms and conditions of employment.' 293 F.2d at 135. Neither of the objections presented by the facts of these two cases can here be seen. Our examination of the foregoing authorities leads us to the conclusion that there must be case by case determination of whether a particular performance bond proposal is to be classified as mandatory or as non-mandatory.

Here there is no suggestion that the proposed provision is unlawful, or that, if agreed to by the employer, it would be unenforceable. As we have previously emphasized, the Board expressly overturned the Examiner's determination that the respondent had not bargained in good faith.

Resolution of the crucial issue, whether the subject of a performance bond falls sufficiently within the range of the relevant statutory language and is, therefore, a mandatory subject which may be disputed to impasse without engagement in unfair labor practice, should depend upon the nature and scope of the bond involved in a given case.6 The bond here demanded by the respondent union, chargeable only for the payment of wages and fringe benefits which are conceded to be within the range of the mandatory subjects,7 was clearly intended to insure that those payments would continue to flow without interruption. Its function binds it so closely to those payments that the bond can clearly and fairly be seen to relate, as do the payments themselves, to 'wages, hours, and other terms and conditions of employment.' Such a bond, not claimed to be unreasonably excessive,8 may be insisted upon, even to impasse, if the insistence is in good faith.

We hold that the record, devoid of determination that the respondent's demand was intended to prevent agreement, or was otherwise indicative of actual bad faith in bargaining, does not support the conclusion that an unfair labor practice was committed.