The Supreme Court ruled yesterday that an employer seeking to end an unprofitable operation doesn't have to bargain with the union whose workers subsequently lose their jobs.
The court said in a 7-to-2 decision that a firm must bargain with the union concerning the effects of closing a particular operation, such as severance pay or time of closing, but it doesn't have to bargain with the union on whether the unprofitable operations can close.
The court added in a footnote that other management decisions, such as "plant relocations, sales, other kinds of subcontracting, automation, etc.," would have to be "considered on their particular facts" and are not included in this decision.
A spokesman for the National Labor Relations Board said the case was significant and that there are "a fair number" of other such cases. He stressed that the court "recognized the duty of management to bargain about the impact of closing." The NLRB had ordered First National Maintenance Corp. of New York to give its discharged employes back pay for failing to bargain with the union.
The case arose when First National, a housekeeping and maintenance firm, decided that it would be unprofitable to continue working for the Greenpark Care Center in Brooklyn, necessitating the discharge of 35 workers. The union had asked to bargain with the firm, but First National refused.
The company said the decision to close operations rests exculsively with management. The firm added that the closing was unrelated to labor costs. The NLRB held that if the union had been allowed to bargain, it may have been willing to make concessions to keep the operations alive.
"We conclude that the harm likely to be done to an employer's need to operate freely indeciding whether to shut down part of its business purely for economic reasons outweighs the incremental benefit that might be gained through the union's participation in making the decision . . . " the court held.
The justices said First National's sole purpose in terminating its Greenpark contract was to "reduce its economic loss, and the union made no claim of antiunion animus." First National's situation was compared to a firm going out of business rather than just closing one operation, a situation not requiring any union bargaining.
In addition, First National's dispute with Greenpark was solely over the size of the management fee Greenpark would pay, a factor over which the union had no control.
"The most that the union could have offered would have been advice and concessions that Greenpark . . . had no duty even to consider," the justices said.
The case was reversed and remanded to the 2nd U.S. Court of Appeals. Justices William J. Brennan and Thurgood Marshall dissented.
In other business-related actions, the court:
Ruled 6 to 3 that lawsuits between a local union and its parent organization alleging violation by the parent of its constitution be decided in federal court. The court said the Taft-Hartley Act of 1947 establishes federal court jurisdiction for lawsuits for violations of contracts between any labor organizations and that a union constitution is such a contract.
The case arose when the United Association of Journeymen & Apprentices of the Plumbing and Pipefitting Industry forced its locals in Morris County, N.J., to consolidate in a manner opposed by one of the locals.
Let stand a directed verdict for International Business Machines Corp. in a $1 billion antitrust suit filed against it by Memorex Corp.
Memorex had accused IBM of attempting to monopolize the manufacture and sale of equipment used with IBM computers. But a federal judge, in a case that resulted in a hung jury, granted an IBM motion for a directed verdict against Memorex, saying the case was too complex for a jury to decide rationally.
Declined to review an appeal by Standard Oil Co. of California's Chevron Chemical Co. division challenging the government's use of its pesticide research information in approving sales of competing pesticides.
District and appeals court rulings had allowed the Environmental Protection Agency to use Chevron's data on the pesticide Naled and the fungicide Paraquat