Neilsen Lithographing Co.

National Labor Relations Board - Board Decisions

Nov 22, 1991

305 N.L.R.B. 697 (N.L.R.B. 1991)

697
305 NLRB No. 90
NIELSEN LITHOGRAPHING CO.
1 279 NLRB 877.
2 On November 20, 1987, the Board also issued an Order cor-
recting its earlier decision and modifying the previous make-whole
order.
3 The Respondent proposed an increase in the regular workweek;
reduction in health benefits for current employees; elimination of
health benefits for future retirees; reductions in Saturday overtime
compensation, layoff pay, severance pay, holiday pay, and shift pre-
mium rates; elimination of future cost-of-living increases; and elimi-
nation of any contractual reference to the Union’s geographic juris-
diction.
Our dissenting colleague characterizes the reductions proposed by
the Respondent as ‘‘huge.’’ The judge made no such finding, nor
any finding that the Respondent’s proposals evidenced surface bar-
gaining or were otherwise made in bad faith.
The Nielsen Lithographing Co. and Graphic Com-
munications International Union, Local 508 O–
K–I, AFL–CIO. Cases 9–CA–20474 and 9–CA–
21292
November 22, 1991
SUPPLEMENTAL DECISION AND ORDER
BY CHAIRMAN STEPHENS AND MEMBERS
DEVANEY, OVIATT, AND RAUDABAUGH
On May 8, 1986, the National Labor Relations
Board issued its Decision and Order1 in which it found
that the Respondent violated Section 8(a)(5) and (1) of
the Act by failing to provide to the Union requested
financial data and by unilaterally implementing
changes in employees’ terms and conditions of em-
ployment. The Board also found that the Respondent
violated Section 8(a)(3) and (1) by failing to reinstate
unfair labor practice strikers to their former positions
upon their unconditional offer to return to work.
On May 29, 1986, the Respondent filed a motion for
reconsideration. On November 20, 1987, the Board de-
nied the motion2 Thereafter, the Respondent filed a pe-
tition for review and the Board filed a cross-applica-
tion for enforcement with the Seventh Circuit. The
court granted the petition, set aside the Board’s Order,
and remanded to the Board for further proceedings
consistent with is decision. Nielsen Lithographing Co.
v. NLRB, 854 F.2d 1063 (7th Cir. 1988).
On January 18, 1989, the Board notified the parties
that it had accepted the remand and invited the parties
to submit statements of position. Thereafter, all parties
filed statements of position.
The Board has reconsidered this case in light of the
court’s opinion and the parties’ statements of position.
For the reasons set forth below, we reverse our pre-
vious decision and find that the Respondent has not
violated the Act.
The specific question before the Board under NLRB
v. Truitt Mfg. Co., 351 U.S. 149 (1956), and its prog-
eny is whether the Union needs certain information it
requested during bargaining in response to a claim of
competitive disadvantage if the Respondent maintained
existing employee benefits.
I.
The Union has represented a unit of the Respond-
ent’s lithographic employees for about 40 years. On
June 28, 1983, the parties began negotiating a new col-
lective-bargaining agreement for a 3-year term. At the
second negotiating session on July 5, the Company
proposed reductions in employee compensation and
benefits. Harold Freeman, the Respondent’s attorney
and chief negotiator, informed the Union that the Com-
pany was still ‘‘making a profit,’’ but stated that it
needed ‘‘these concessions to compete,’’ because in-
creasing ‘‘costs in the [expiring] contract’’ were result-
ing in significant losses of business to competitors. Ac-
cording to Freeman, ‘‘trends’’ indicated that ‘‘in the
future [the Respondent] was going to have a problem’’
with labor cost items and that this would force higher
prices.
In support of its proposal for concessions,3 the Re-
spondent furnished various charts and graphs compiled
from company records. These showed, inter alia, labor
costs increasing while sales and production decreased
during the term of the expiring collective-bargaining
agreement. Freeman referred to the Respondent’s erod-
ing technological advantage over its competitors, the
Respondent’s having once attracted business from its
pioneering use of the half-web press, now used by the
competition as well. The Union did not dispute this
claim, and acknowledged that it was ‘‘not any new in-
formation to [them].’’ The Respondent presented data
to support its assertions that it had been losing busi-
ness to competitors whose wages and benefits were
below the Respondent’s and that employees con-
sequently had lost work hours and jobs through lay-
offs.
At later bargaining sessions, Union Executive Vice
President and Chief Negotiator Theodore Murphy re-
quested that the Respondent open its books. Murphy
also asked the Respondent to allow a union expert to
examine its records. Freeman declined, stating that:
‘‘[w]e’re not pleading poverty. We’re making money,
but we’re not competitive.’’ Murphy testified as fol-
lows concerning the Union’s policy on requesting em-
ployers seeking concessions to open their books:
Q. Did I understand your testimony correctly,
that the Union’s policy is, whenever an employer
seeks concessions, that you get your auditor in-
volved?
A. [Murphy] What I said was, when an em-
ployer seeks concessions, that we ask him to open
his books, and that would involve, then, the audi-
tor.
698 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
4 NLRB v. Harvstone Mfg. Corp., 785 F.2d 570 (7th Cir. 1986).
Q. Is the Union’s policy to always ask an em-
ployer to open its books when it is seeking con-
cessions?
A. [Murphy] No, I—you know, I think there
are magnitudes—levels of magnitudes of conces-
sions. You know, in this particular case, we’re
looking at a lot. If it was one small concession,
where a reduction of manning, or something like
that, is asked for, we’ll negotiate that as long as—
and we’ve done that. Where we’ve had—when
the four color 38 came into being, the Employer
said that we can’t compete with the four color 38
with three people on it. We need to run it with
two like the nonunion employers.
We said, ‘‘Okay, we’ll take a look at that,’’
and we did . . . .
Q. Other than those limited—that limited exam-
ple that you described, is it the Union’s procedure
to request that the books be opened when the
company is asking for large concessions?
Murphy: Yes.
The Respondent continued to explain throughout the
negotiations that it was not pleading poverty or inabil-
ity to pay and that it continued to be profitable. On
August 31, the Union presented the Respondent with
a 14-item request for information, including the fol-
lowing data that the Union contended it needed to
evaluate the Respondent’s claim that it was losing its
ability to compete:
1. Documents by the Employer to banks for the
purpose of obtaining loans, including projected
balance sheets and income statements.
2. Financial statement for three years prior, as
well as tax returns and current financial state-
ments.
3. Analyses of working capital for the last three
years.
4. Charts of all supervisory employees and total
compensation.
5. Expense reports submitted by management per-
sonnel and owners.
6. List of automobiles leased or owned by the
company.
7. List of how many of the non-union employees
have been laid off and how long, please list.
Although Murphy stated in bargaining that he was
requesting this information in order to verify the Com-
pany’s claim that it was at a competitive disadvantage,
he also testified as follows concerning specific items:
Q. Let me go back up to Item 7 which is the
chart of all supervisory employees and total com-
pensation. Did you already cover the reason why
you wanted that information?
A. [Murphy] We—we had a feeling—again, the
people in the plant had told the committee, and
the committee was part of the workers that was
on the committee that there was too many chiefs
and not enough Indians. Again, if we were going
to have to be the one to give concessions, what
were some of these people wanting to do? Was
the company going to eliminate some of these,
what we felt was excessive supervisors, or what
were they going to do?
Q. . . . Item Number 13, a list of how many
nonunion employees have been on—have been
laid off and how long: Why did you want that in-
formation?
A. [Murphy] Like I said earlier, we have people
laid off periodically. Some of them were laid off
long periods of time, three to six months, maybe
longer in this contract. Again, if we were going
to have to give concessions because of the com-
pany’s claim to be noncompetitive, we felt that
there were other people in this plant that should
be taking lay-offs along with our people, and we
wanted to know who those nonunion people were,
and whether they had ever been laid off, or
whether they were standing around doing nothing.
The Respondent agreed to furnish bargaining-unit-
related information that the Union had requested, but
declined to provide the above-listed data. According to
Union Negotiator Murphy,
[Freeman] just said we weren’t entitled to it; that
the company wasn’t pleading poverty; that, in
fact, they were making money, and the only thing
that they were saying is that they were not com-
petitive, and that we were not entitled to the in-
formation.
Bargaining continued through December, when the
Respondent’s president reiterated the Company’s posi-
tion at the bargaining table in a letter to the Union.
Thereafter, the Respondent implemented the terms of
its most recent contract proposal, and the Union struck.
The strike ended July 25, 1984, when the Union of-
fered to return to work.
In the previous decision, the Board found that by
not turning over all the requested information the Re-
spondent had violated Section 8(a)(5). Nielsen Litho-
graphic Co., 279 NLRB 877 (1986). In refusing to en-
force the Board’s Order, the Seventh Circuit observed
that shortly after the Board had found that Nielsen was
obligated to turn over the requested information, the
Seventh Circuit had decided Harvstone, a similar case4
Nielsen Lithographing Co. v. NLRB, 854 F.2d 1063,
1065 (7th Cir. 1988). In Harvstone, the court noted,
699NIELSEN LITHOGRAPHING CO.
5 See NLRB v. Acme Industrial Co., 385 U.S. 432, 436 (1967).
6 Our dissenting colleague implies that because in Truitt the em-
ployer claimed that a 2-1/2 cent increase would put it out of busi-
ness, something less than a specific claim of inability to pay can be
used to put an employer’s economic status in issue (Dissent, fn. 8).
In fact, the employer in Truitt also specifically claimed that it could
not afford to pay the requested increase. Truitt, supra at 150.
7 The administrative law judge in Harvstone found that the compa-
nies’ negotiator (1) ‘‘[I]nsisted that ‘business judgment’ . . . re-
quired them [the companies] to ‘more closely align’ their labor costs
to that of competitors in other regions of the Country ‘to be com-
petitive’’’; (2) ‘‘‘relief on labor costs,’ because of ‘poor competitive
positions,’ was essential in order for Respondents to ‘stay in busi-
ness [otherwise] no one will have jobs’’’; (3) ‘‘the Respondents
‘need[ed] economic relief’’’; (4) if the Union did not agree to the
Respondent’s proposed economic concessions, the ‘‘Respondents
‘could, but . . . not necessarily . . . would go out of business’’’;
(5) ‘‘one company was losing money and the rest might if they had
to pay the 35 cents [requested by the union]’’; (6) ‘‘One company
was losing money, and the others would if the 35 cents was put in’’;
(7) ‘‘[I]f the Union doesn’t agree with this concession [demanded by
Respondent Employers] . . . those companies [may] but not nec-
essarily so . . . be out of business’’ (brackets in original); (8) the
Respondents’ negotiator was giving the Union negotiator ‘‘the mes-
sage we were very serious about this labor cost relief we were seek-
ing’’; (9) the Respondents needed their ‘‘labor costs more in line
with . . . [their] competitors’’; (10) the Respondents ‘‘‘might or
might not’ [‘go out of business if we don’t get] the reductions in
labor costs that [we] asked for’’’ (brackets in original); (11) the
‘‘companies ‘may or may not’ [‘lose money if we don’t [get] these
reductions in labor costs that [we] asked for’]’’ (brackets in origi-
nal); (12) the Respondents’ negotiator said that he ‘‘had quite a long
discussions about competitiveness and if you don’t make a profit,
you can’t be in business.’’
The judge also found that Harvstone’s president conceded that the
Respondents were seeking economic relief from the Union ‘‘by at-
tempting to reduce employees’ pay and benefits to the least or low-
est common denominator found elsewhere in the Country.’’
Harvstone Mfg. Co., 272 NLRB 939, 943–944 (1984).
the Seventh Circuit, ‘‘[f]ollowing earlier circuit prece-
dent,’’ had declined to enforce a Board order directing
an employer to turn over similar information that re-
lated to a claim of competitive disadvantage. The Sev-
enth Circuit pointed out that in Nielsen the Board had
‘‘actually relied on the very [Board] decision
(Harvstone . . . .) that . . . [the Court] reversed.’’ Id.
at 1066.
II.
Unlike information concerning bargaining unit terms
and conditions of employment, which is presumed to
be relevant,5 the Union must prove that the requested
general financial information is relevant. In this con-
nection, NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956),
holds that ‘‘a refusal to attempt to substantiate a claim
of inability to pay increased wages may support a find-
ing of a failure to bargain in good faith.’’ 351 U.S. at
153.6 The Court cautioned:
We do not hold, however, that in every case in
which economic inability is raised as an argument
against increased wages it automatically follows
that the employees are entitled to substantiating
evidence. Each case must turn upon its particular
facts.
Thus, not every claim of inability to pay will result
in an obligation to supply substantiating information.
In the instant case, as shown below, the Respondent
was not even making a claim of inability to pay.
We find that the Respondent’s claim of competitive
disadvantage is not the same as a claim of financial in-
ability to pay. Thus, the claim does not raise any obli-
gation under Truitt to turn over the requested informa-
tion. We are guided to this conclusion by the Seventh
Circuit’s opinion in NLRB v. Harvstone Mfg. Corp.,
supra, 785 F.2d 570. In Harvstone, the Seventh Circuit
rejected the equation of a claim of competitive dis-
advantage with the assertion of a financial inability to
pay. There, four employers during joint bargaining had
requested concessions based on a schedule of compara-
tive labor costs within the relevant market that they
had furnished the union. The employers explained that
they were ‘‘operating at a competitive disadvantage.’’7
When the union sought the employers’ financial
records, claiming that the employers had put their eco-
nomic viability at issue, the employers refused, insist-
ing that they were not pleading inability to pay. The
Board adopted the administrative law judge’s decision
finding a violation of Section 8(a)(5) on the theory that
the employers had in essence pled poverty.
The Seventh Circuit disagreed. NLRB v. Harvstone
Mfg. Corp., supra. Citing its decision of 20 years ear-
lier in United Fire Proof Warehouse Co. v. NLRB, 356
F.2d 494, 498 (7th Cir. 1966), the court stated that the
test of whether an employer’s statement that ‘‘it is op-
erating at a competitive disadvantage’’ triggers an obli-
gation to disclose financial data is whether the em-
ployer said it ‘‘would not’’ as opposed to ‘‘could not’’
pay the employees’ proposed demands. 785 F.2d at
575–576. The court found that of the four employers
charged, only one had disclosed in negotiations that it
was losing money. The court held that the other three
employers had not claimed an inability to pay. They
had never said that they ‘‘were financially unable, as
opposed to unwilling, to meet the Union’s demands.’’
Id. at 576. The court construed the employers’ claim
of competitive disadvantage simply as an acknowl-
edgement of an economic fact of life: if companies
‘‘don’t make a reasonable profit so they can be a via-
ble competitive business, they won’t stay in business
and no one will have jobs.’’ Ibid. The court found that
the statements of the employers’ negotiator, quoted
above at footnote 7, were ‘‘nothing more than tru-
isms’’ and in context ‘‘did not constitute a plea of in-
ability to pay.’’ 785 F.2d at 576–577.
As noted, three of the employers in Harvstone did
not assert an inability to pay during the term of the
700 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
8 The court summarized Harvstone’s position as follows:
‘‘[A]lthough acknowledging in response to Union inquiries that they
could lose money and eventually go out of business if their competi-
tive position did not improve, [they] never communicated to the
Union that they were financially unable to pay the Union’s proposed
demands for the duration of the new agreements.’’ Id. at 577.
9 Other Board and court decisions are to the same effect. Empire
Terminal Warehouse Co., 151 NLRB 1359 (1965), enfd. sub nom.
Teamsters Local 745 v. NLRB 355 F.2d 842 (D.C. Cir. 1966); E. I.
du Pont & Co., 276 NLRB 335 (1985) (rejection of principle that
an employer’s bargaining reference to future market competitiveness
in job restructuring proposals gives rise to ‘‘virtually a presumption
of economic motive for which the Company should be required to
disclose the requested information’’); Advertisers Mfg. Co., 275
NLRB 100 (1985). Ameron Pipe Products, 305 NLRB 105 (1991);
Concrete Pipe & Products Corp., 305 NLRB 152 (1991); Georgia-
Pacific Corp., 305 NLRB 112 (1991).
The dissent’s cases, in which the Board found violations, are dis-
tinguishable. In Clemson Bros., 290 NLRB 944 (1988), where the
Employer claimed poor financial health, the Board specifically dis-
tinguished the case from one where, as here, the Respondent asserts
a claim of competitive disadvantage. Id at 944 fn. 3. In S-B Mfg.
Co., 270 NLRB 485, 491 (1984), the employer stated specifically
that it was ‘‘unable’’ to grant a wage increase. Again, no reference
was made to competitive disadvantage. In Unoco Apparel, Inc., 208
NLRB 601 (1974), the employer’s negotiator told the union, in re-
sponse to the union’s request for increased wages and fringe bene-
fits, that ‘‘the well is dry.’’ Id. at 610. And in Facet Enterprises,
290 NLRB 152 (1988), enfd. 907 F.2d 963 (10th Cir. 1990), the
company told the union that it was in ‘‘bad shape,’’ reminded the
union that one of its plants had ‘‘lost money,’’ linked ‘‘continuation
of operations’’ at another plant to economic concessions, and later
approved the contemplated closing of that plant. Id. at 162–163.
new contract.8 The court, however, addressed the ques-
tion whether the claim of competitive disadvantage
made by those three employers translated into a claim
of present inability to pay:
Clearly if an employer operates at a competitive
disadvantage for a long enough time, its profit
margin, as a matter of pure economics, will de-
cline eventually forcing it out of business. There
would then come a time when these three compa-
nies could be expected to plead inability to pay,
but that time has not yet arrived. . . . The rel-
evant time period we must concern ourselves with
is that of the term of the new collective bar-
gaining agreement. It is quite conceivable that an
employer, already operating at a competitive dis-
advantage with respect to employee compensation,
could afford to pay increased wages during the
course of a new agreement. While it is axiomatic
that this scenario cannot be played out indefi-
nitely, it does not preclude a finding that, at least
for the term of the new collective bargaining
agreement the employer operating at a competi-
tive disadvantage is financially able, although per-
haps unwilling, to pay increased wages. In such a
case, we think that the employer’s claim of com-
petitive disadvantage is not a plea of inability to
pay. [785 F.2d at 577. Emphasis added.]
We agree with the court’s observation in Harvstone
that an employer’s expressed view that its current eco-
nomic position vis-a-vis competitors would lead to an
eventual inability to pay beyond the intended contract
term is quite different from an employer’s insistence
that a union’s current bargaining demands are pre-
cluded by its condition at the present time or within
the intended contract term. 785 F.2d at 577 fn. 6.
Analogously, the Board in Buffalo Concrete, 276
NLRB 839 (1985), enfd. 803 F.2d 1333 (4th Cir.
1986), found no duty by the employers to disclose fi-
nancial information where their claim that they were
not competitive amounted to an unwillingness, rather
than an inability, to accept the union’s bargaining pro-
posals. The lesson of both Harvstone and Buffalo Con-
crete is that an employer’s obligation to open its books
does not arise unless the employer has predicated its
bargaining stance on assertions about its inability to
pay during the term of the bargaining agreement under
negotiation.9
The difference between the two types of claims is
critical. The employer who claims a present inability
to pay, or a prospective inability to pay during the life
of the contract being negotiated, is claiming essentially
that it cannot pay. By contrast, the employer who
claims only economic difficulties or business losses or
the prospect of layoffs is simply saying that it does not
want to pay.
We do not say that claims of economic hardship or
business losses or the prospect of layoffs can never
amount to a claim of inability to pay. Depending on
the facts and circumstances of a particular case, the
evidence may establish that the employer is asserting
that the economic problems have led to an inability to
pay or will do so during the life of the contract being
negotiated.
There is a well-established distinction between
claims of inability to pay and claims of something
short of that. The dissent, however, wishes to draw a
new distinction between claims that are objectively
verifiable and those that are not. It is true that a claim
of present inability to pay may be objectively
verifiable. But that does not mean that all objectively
verifiable claims are subject to the duty to supply in-
formation. (We would entertain the converse.) Rather,
it is the fact that it is a claim of ‘‘can’t pay,’’ rather
than a claim of ‘‘does not want to pay.’’ There is a
certain finality to a claim of ‘‘can’t pay.’’ If it is prov-
en, the union will be faced with the reality that the
‘‘well has run dry.’’ This is the essential meaning of
Truitt as we understand it. The distinction has always
been between claims of ‘‘can not’’ and ‘‘will not.’’
We would not abandon that distinction in favor of a
new distinction.
We find that the statements made by management in
this case are even less susceptible to a ‘‘can’t pay’’
finding than were the statements in Harvstone. The
Respondent’s negotiator repeatedly stated that the
701NIELSEN LITHOGRAPHING CO.
10 We disagree with the dissent’s conclusion that the thrust of the
Respondent’s statements raised the issue of the Respondent’s present
economic condition, unrelated to its claim that it was losing its com-
petitive edge and would continue to do so in the future. The Re-
spondent was not claiming that its current competitive position pre-
cluded paying wages and benefits at the existing levels for the next
contract. It was saying that if it did not take immediate measures
to reduce its labor costs it would at some future, unspecified point
be at a significant competitive disadvantage when that would be the
case. We do not view as a ‘‘threat’’ of imminent job loss the Re-
spondent’s statement that, if the Respondent continued to lose busi-
ness, jobs would be lost. See Harvstone at 576. Thus, we disagree
with our colleague’s contention that, in the face of repeated assur-
ances that the Respondent was making a profit, the employees would
nonetheless perceive the Respondent’s allusions to future job loss as
‘‘encompassing the immediate term of the contract under negotia-
tion.’’
Indeed, there is not a shred of record evidence that the Respondent
ever advised the Union that jobs would be lost during the term of
the contract under negotiation unless it obtained concessions. Al-
though it is true that in his letter the Respondent’s president,
Nielsen, stated at one point that ‘‘It is your job that is on the line’’
(emphasis in original) in context it is plain that this did not refer to
the present, but to an unspecified point in the future if and when
the Respondent would no longer be able to compete. Thus, in the
sentences immediately preceding the one quoted, Nielsen observed
that: ‘‘to survive we must be able to compete. Our business and our
employees’ jobs are at stake if we can’t.’’ (Emphasis added.) The
conditional phraseology and the general nature of the statement are
not consistent with a reference to imminent job loss. Nielsen’s com-
ment that jobs ‘‘will also be lost’’ is of no help to the dissent’s posi-
tion. In the immediately preceding two sentences, Nielsen noted that:
‘‘[W]e have to be able to compete people-wise also’’ and prognos-
ticated that ‘‘[I]f we don’t the recent trend of losing even greater
amounts of work to other companies will continue and the jobs our
employees now have will also be lost.’’ (Emphasis added.) Nielsen’s
statement, once again, was conditional, and referred to some unspec-
ified future point when the ‘‘trend’’ of losing work got worse.
11 If the Respondent had premised its proposal for concessions just
on the fact that its competitors were paying less in wages and bene-
fits, the dissent would not require disclosure of the information
sought here. That is an artificial line. For whether or not a company
actually uses the words ‘‘inability to compete and resulting loss of
jobs,’’ a reference to its competitors’ wages and benefits plainly sug-
gests that labor costs may make the firm noncompetitive to the point
where business and jobs will be lost.
Company was still making a profit even though it was
losing business to competitors and specifically dis-
avowed any claim of inability to pay during the term
of the contract under negotiation. It is clear that the
Respondent asserted its anticipation that at an unspec-
ified point ‘‘in the future’’ it was going to have a
problem with labor costs. Nothing in the Respondent’s
statements to the Union, however, fairly suggests that
the Respondent would be unprofitable and thus unable
to pay during the term of the contract under negotia-
tion—only that it might not make as much of a profit
as it wished. But, as the Seventh Circuit observed in
Harvstone, although operating at a competitive dis-
advantage might ultimately force a company out of
business, such predictions do not trigger an obligation
to furnish financial information under Truitt. 785 F.2d
at 577.10 And, as the Seventh Circuit observed in this
case, a company can survive in the short run, and per-
haps even in the long run, despite paying higher wages
than its competitors. Nielsen Lithographing Co. v.
NLRB, supra at 1065.11 Efforts to maximize profits
and/or minimize costs or to reallocate expenses among
various categories of the production function do not, in
and of themselves, constitute a financial inability to
pay which then triggers a duty to prove.
We therefore conclude that an employer’s obligation
under Truitt to provide a union with information by
which it may fulfill its representative function in bar-
gaining does not extend to information concerning the
employer’s projections of its future ability to compete.
We consider that obligation to arise only when the em-
ployer has signified that it is at present unable to pay
proposed wages and benefits. We do not equate ‘‘in-
ability to compete,’’ whether or not linked to job loss,
with a present ‘‘inability to pay.’’ As the Respondent
has not made a claim that it is at present unable to
pay, we will dismiss the 8(a)(5) allegation. We shall
also, as a consequence, dismiss the allegation that the
Respondent violated Section 8(a)(3) by failing to rein-
state unfair labor practice strikers who had struck to
protest its failure to furnish information.
ORDER
The complaint is dismissed.
MEMBER OVIATT, concurring.
I agree with the majority’s analysis in this case. I
wish, however, to emphasize some additional practical
considerations underlying that analysis. Simply put, my
experience leads me to conclude that requiring the Re-
spondent to supply the information now in dispute
would not encourage the practice and procedure of col-
lective bargaining.
The Supreme Court in NLRB v. Truitt Mfg. Co., 351
U.S. 149 (1956), held that an employer’s claims during
bargaining that it is unable to pay a requested wage in-
crease may require it to offer ‘‘proof of . . . [the] ac-
curacy of the claim.’’ Truitt, supra, 351 U.S. at 152.
That implicitly assumes that the claimed inability to
pay is susceptible of accurate proof. The Court be-
lieved that furnishing financial information in that cir-
cumstance would aid collective bargaining generally.
To the extent that the Union wanted the information
here to test the Respondent’s claims, it was to verify
the Respondent’s claim that at some future point its
competitive disadvantage would have serious, adverse
consequences. I do not believe that the Respondent’s
predictions concerning its competitive stance are capa-
ble of sufficiently accurate verification to aid the bar-
gaining process. To the contrary, supplying the re-
quested information might well bog down bargaining
in a debate over management’s ability to chart the fu-
ture direction of the Company.
702 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
1 U.S. v. General Dynamics Corp., 415 U.S. 486, 501 (1974).
2 Areeda & Turner, IV Antitrust Law § 926 at 111 (1980).
3 Michigan Citizens for an Independent Press v. Attorney General,
695 F.Supp. 1216, 1220 (D.D.C. 1988).
4 Compare the analysis of the Supreme Court and the district court
of the company’s financial position in U.S. v. Greater Buffalo Press,
402 U.S. 549, 555 (1971). Also, see the difference of approach to
the same facts of the Government and of the Seventh Circuit in U.S.
v. International Harvester Co., 564 F.2d 769, 775 fn. 12, 776 fn.
13 (1977).
5 As an example, consider the dispute over the use of accounting
rates of return as opposed to economic rates of return on an invest-
ment as an indicia of market performance. See Fisher & McGowan,
On the Misuse of Accounting Rates of Return to Infer Monopoly
Profits, 73 Am. Econ. Rev. 82 (Mar. 1983); Fisher, The Misuse of
Accounting Rates of Return: A Reply, 74 Am. Econ. Rev. 509 (June
1984).
6 To understand the magnitude of the problem the dissent’s ap-
proach creates, one only need refer to some of the explanations of-
fered by Union Negotiator Murphy for the Union’s need for certain
information. Murphy testified on direct, for example, that the Union
informed the Respondent during bargaining that it needed the chart
of all supervisory employees because the employees and the union
bargaining committee ‘‘had a feeling’’ that there were ‘‘too many
chiefs and not enough Indians. . . . Was the company going to
eliminate some of these, what we felt was [sic] excessive super-
visors, or what were they going to do.’’ Murphy testified that the
Union wanted the list of ‘‘how many of the non-union [nonunit] em-
ployees have been laid off and how long’’ because if the Union was
going to have to make concessions ‘‘we felt that there were other
people in this plant that [sic] should be taking layoffs along with our
people, and we wanted to know who those nonunion people were,
and whether they had ever been laid off, or whether they were stand-
ing around doing nothing.’’ This has more the ring of an intent to
use the requested information to involve the Union in managerial de-
cision-making with respect to how the Company’s competitive posi-
tion could be improved, or as to the effects of the Respondent’s loss
of its competitive edge, than it does an attempt simply to verify that
loss of competitive advantage.
Assessing a projected future inability to compete re-
quires a sophisticated analysis not only of a company’s
present condition but also of the company’s condition
at a specified point in the future. This involves a care-
ful evaluation of the company’s projected fixed and
variable costs, of its projected capital expenditures (a
particularly important consideration where the com-
pany is affected by technological change), as well as
of its anticipated marketing and pricing strategies. Any
responsible analysis of a company’s future ability to
compete must also account for future conditions in the
company’s market which in turn may depend upon
projections of population trends, industrial growth, and
economic conditions in the geographic area in which
the company competes. Most importantly, any esti-
mation of the company’s future competitive position
must include a full evaluation of the company’s com-
petitors. Some data on competitors’ present financial
condition may be publicly available. Other informa-
tion, such as future capital investment, projected mar-
ket strategies, and future pricing of the product usually
is not in the public domain and to a large extent must
be based on assumptions and economic theory.
Even if the Union had all the information that I con-
sider to be necessary to do a future-competitiveness
analysis, the result of that analysis would not aid labor
and management in reaching a bargaining agreement.
Whether or not the Respondent will be a viable com-
petitor 2 or 3 years hence is not sufficiently verifiable
to provide the Union with any degree of assurance that
the Respondent’s claim is accurate or, indeed, inac-
curate.
The use of data showing that a firm has been a suc-
cessful competitor in the past may reveal very little
about that firm’s competitive prospects. ‘‘Evidence of
past production does not, as a matter of logic, nec-
essarily give a proper picture of a company’s future
ability to compete.’’1 As explained by two antitrust ex-
perts, ‘‘[T]he difficulties in proving probable exit from
a market [in the future] seem more severe than those
involved in establishing imminent insolvency or bank-
ruptcy.’’2 The analysis of future competitiveness is
thus ‘‘a matter of probabilities, not competitive cer-
tainties.’’3 It involves a high degree of speculation
about the company’s own projected expenditures and
revenues vis-a-vis the competition, whose economic
conditions may not be known. One person’s necessary
capital expenditure is another’s discretionary expendi-
ture.4 In sum, it is much easier to tell whether a com-
pany is financially sound now than it is to determine
whether it will be in the future.
I do not suggest that a firm’s future competitive
stance is never capable of proof. I do say that on the
same facts reasonable people can reach entirely dif-
ferent conclusions as to a firm’s future competitive po-
sition.5 There are critical subjective, judgmental, and
theoretical factors that enter into any estimate of a
company’s ability to compete 2 or 3 years down the
road. Thus, I anticipate that, far from encouraging col-
lective bargaining, supplying the requested information
to the Union could lead bargaining to degenerate into
bickering over judgment and theory and particularly
whose consultant’s or expert’s theoretical assumptions
are correct.
Requiring management to furnish information to en-
able union negotiators to second-guess management
decisions with respect to the company’s economic fu-
ture thwarts the collective-bargaining process rather
than facilitating it. It sidetracks collective bargaining
into a discussion of ancillary issues related to the over-
all direction of the company and the wisdom of par-
ticular managerial decisions6 That would put us well
on the road to having the union ‘‘become an equal
partner in the running of the business enterprise,’’ a
state of affairs of which ‘‘Congress had no expectation
. . . .’’ First National Maintenance Corp. v. NLRB,
452 U.S. 666, 676 (1981). Codetermination as utilized
in other countries is not part of the fabric of collective
bargaining in the United States.
703NIELSEN LITHOGRAPHING CO.
1 If the Respondent’s statements were limited to the comparison of
its labor costs and its competitors’ costs, or the like, a disclosure ob-
ligation would still arise under NLRB v. Truitt Mfg. Co., 351 U.S.
149 (1956). However, because only comparative wage and market
information would be relevant to the claims asserted, financial infor-
mation, such as that at issue here, would not be subject to disclosure.
See International Telephone & Telegraph Corp., 159 NLRB 1757,
1790 (1966), enfd. 382 F.2d 366 (3d Cir. 1967).
This is not a case where a company is seeking con-
cessions because it is ‘‘in the red’’ or losing money
and in imminent danger of ‘‘going broke,’’ or because
the ‘‘well is dry.’’ Cf. Continental Winding Co., 305
NLRB 122 (1991). In fact, the Respondent’s nego-
tiators conveyed to the Union just the opposite: the
Company was still making a profit. Neither is this a
case where company negotiators informed the union
that the company simply could not meet the union’s
contractual demands. The record is devoid of any
statements by the Respondent’s negotiators of this sort.
Rather, this is a case where the Respondent is reluctant
to continue to pay wages and benefits at the level
sought by the Union because paying employees at that
level puts the Respondent at a disadvantage vis-a-vis
competitors who do not pay as much. That competitive
disadvantage, according to the Respondent’s nego-
tiators, would translate at some unspecified future
point into a loss.
Relying on just any employer statements concerning
its ‘‘economic condition’’ as the basis for opening a
company’s books would considerably enlarge a com-
pany’s obligation to supply information under Truitt.
Now when an employer bases a bargaining position on
a claim of present inability to pay, the employer must
upon request supply financial information to support
that claim. Truitt Mfg. Co., supra. Similarly, an em-
ployer’s bargaining claim that it will be unable to pay
during the life of the contract being negotiated must be
supported by financial information, upon request. See
NLRB v. Harvstone Mfg. Corp., 785 F.2d 570, 577
(7th Cir. 1986). See also Continental Winding Co.,
supra. But there is nothing in these cases that reason-
ably could be read to require the Respondent in this
case to open its books to union scrutiny simply be-
cause the Respondent has put at issue its ‘‘economic
condition’’ upon a claim of competitive disadvantage.
There are many statements related to the condition
of the employer, made in the course of bargaining, that
could be proven or disproven if subjected to a pains-
taking search for objective truth. The collective-bar-
gaining process is not a scientific or litigative search
for truth, however. It is a search for agreement. I
would not divert the parties from what they should be
doing—trying to reach agreement on a new contract—
to an uncertain and unrewarding fact-finding exercise
which in my view is not required by Truitt.
CHAIRMAN STEPHENS, dissenting.
If this were a case in which the Respondent’s claims
in bargaining were limited to general assertions of fu-
ture competitive disadvantage alone, as the majority
concludes, I would join them in dismissing the com-
plaint. The record shows, however, that although the
Respondent’s officials made the statements quoted by
the majority, they also made other statements that went
beyond a mere claim of possible competitive disadvan-
tage in the distant future. Thus, in conjunction with its
statements regarding future competitiveness, the Re-
spondent raised serious factual questions regarding its
present and immediate economic condition and the ef-
fect that condition would have on its business and on
employees’ jobs, not in the far distant future, but today
and tomorrow. It told the Union that it already was
losing business, that employees already were losing
jobs, that trends showed that it would have an even
worse problem in the future, and that if the Union did
not agree to the concessions that the Respondent pro-
posed, jobs that employees currently held would also
be lost.
By virtue of this bargaining posture, the Respondent
linked its need for concessions to its immediate eco-
nomic condition, as it characterized that condition to
the Union. The Respondent effectively took the posi-
tion that anything less than the Union’s agreement to
take deep concessions was precluded by the Respond-
ent’s unsatisfactory economic condition, i.e., one
marked by the loss of business and jobs and the pros-
pect of more of the same, or even worse. Because the
Respondent specifically relied on its unsatisfactory
economic condition as a justification for its need for
deep concessions, its economic condition became rel-
evant to the Union’s decision whether or not to grant
those concessions. Accordingly, economic information
pertinent to assessing the Respondent’s actual eco-
nomic condition was relevant to the bargaining process
and, in my view, the Respondent violated the Act
when it refused to disclose such information.1
I.
The record shows the following. In June 1983 the
Union and the Respondent commenced negotiations on
a successor collective-bargaining agreement. Beginning
with the second negotiating session, on July 5, 1983,
and continuing thereafter, the Respondent sought eco-
nomic concessions from the Union, including conces-
sions pertaining to the regular workweek and total
wage compensation, layoff pay, health benefits, over-
time pay, and other cost items. At the July 5 bar-
gaining session, the Respondent presented to the Union
data composed of graphs, charts, and other documents
pertinent to its productivity. The Respondent informed
the Union that there had been a substantial reduction
in work hours because it had lost business to other
companies, and that the Respondent had less work than
it previously had enjoyed.
704 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
2 The majority implies that the Union only sought the information
requested because of a general union policy seeking disclosure when
an employer seeks concessions. The Union’s chief negotiator, Theo-
dore Murphy, however, testified specifically that the Union requested
economic information to examine the Respondent’s economic trends
and to verify its claims, as well as to justify to its membership that
the Respondent needed relief.
3 The Respondent failed to furnish the following information that
the Union requested:
1. Documents by the Employer to banks for the purpose of
obtaining loans, including projected balance sheets and income
statements.
2. Financial statement for 3 years prior, as well as tax returns
and current financial statements.
3. Analyses of working capital for the last 3 years.
4. Chart of all supervisory employees and total compensation.
5. Expense reports submitted by management personnel and
owners.
6. List of automobiles leased or owned by the company.
7. List of how many of the nonunion employees have been
laid off and how long, please list.
The Respondent’s chief negotiator, Harold Freeman,
testified that he informed the Union at the July 5 ses-
sion that the charts reflected that the Company was
losing business and that ‘‘we had less volume, we had
reduced the number of people by layoff or attrition and
that overall we had less work and we had less hours
. . . that the work wasn’t there and they know it.’’
Freeman testified:
Q. Was it the Company’s position during nego-
tiations that you would continue to lose all this
business to other companies, unless you got con-
cessions from the Union?
A. Our position was, we wanted to reverse the
trend. If that’s the same thing as what you’re ask-
ing me then, the answer is yes. But I—the way
we were talking about it was we felt if we got the
adjustments that we were seeking or substantially
all the adjustments, that what we judge was the
reason for losing the work would be eliminated.
Q. I’m not sure whether or not that is an an-
swer to the question, I’m wondering if it was your
position that you wouldn’t retain the business that
you had and that you would in fact lose business
to other companies unless you got these conces-
sions from the Union, is that why you wanted the
concessions?
A. We wanted the concessions because we
wanted to get back the business we’d lost.
Q. Fine.
A. We wanted to be more profitable is what we
wanted to be but we felt like it would provide
more work for the employees in the process.
Q. And I think you indicated that the point of
this [the charts and other data] was that it rep-
resented to the Company that there had been a
substantial lose [sic] of work, the number of im-
pressions was down?
A. Well, we—yes. This—most of this—most of
the Joint Exhibit 21 was an attempt by us to have
some specific numbers that would back up what
we thought the Union committee already knew.
Namely, that the work level in Nielsen had
dropped dramatically during the three-year con-
tract period. But we wanted to have some specific
information so that we weren’t talking just gener-
alities.
Q. And did this chart represent to the Company
that there had in fact—and show the company that
there had in fact been a lose [sic] of work?
A. Yes.
Q. Number of impressions was down?
A. Yes.
Q. Was it the Company’s position, during ne-
gotiations, that this lose [sic] of work was due to
the higher labor costs that your company was pay-
ing as against other companies?
A. That’s essentially correct. That’s what I’ve
said several times today.
Freeman testified further that the Respondent informed
the Union that its labor costs were not competitive
with other businesses. Freemen indicated to the Union
that ‘‘We need these changes to compete,’’ ‘‘that there
[is] a problem with competition now that [we haven’t]
had in the past,’’ and that the ‘‘trends showed’’ it
‘‘would have a worse problem in the future.’’
Following the Respondent’s initial bargaining de-
mands, the Union requested that the Company ‘‘open
its books’’ so as to permit an auditor to examine the
Company’s records. The Respondent declined. On Au-
gust 31, 1983, the Union made a written request for
information in order to verify the Respondent’s claims
and ‘‘to get our people to understand what the com-
pany is saying.’’2 The Respondent declined to provide
requested economic information pertaining to nonlabor
cost data, including financial statements, analysis of
working capital, management expense reports, pro-
jected balance sheets and income statements, and su-
pervisory compensation.3 The Respondent provided
certain other information pursuant to the Union’s re-
quest pertaining to employee layoffs and overtime,
subcontracting, sick leave absences, listing of super-
visory employees, and profit sharing.
At a bargaining session on December 9, 1983, Free-
man presented to the Union a letter from the Respond-
ent’s president, Simon C. Nielsen, outlining the Re-
spondent’s position. In that letter, Nielsen made the
following statements:
It’s as simple as this—to protect the jobs of our
employees we must protect our ability to compete
. . . to survive we must be able to compete. Our
business and our employees’ jobs are at stake if
we cannot! The loss of sales and work volume is
the problem we are seeking to solve. Without
solving it we will continue to lose work and thus
705NIELSEN LITHOGRAPHING CO.
4 It is also clear that Freeman did not rely merely on a general
turndown in the economy. Thus, in describing the various charts and
graphs presented to the Union at the July 5 bargaining session, he
indicated that ‘‘we understand the economy, generally, is [sic] gone
down, but, in our case, it has gone down. What we’re looking at is
our situation. And we have lost work, and we think we have lost
work to competitors.’’ (Emphasis added.)
5 The majority contends that ‘‘there is not a shred of record evi-
dence’’ that the Respondent took the position at bargaining that jobs
would be lost during the term of contract under negotiation in the
absence of concessions from the Union. That assertion is belied by
uncontradicted record evidence showing that the Respondent repeat-
edly emphasized to the Union that jobs already had been lost and,
as President Nielsen pointedly told the Union, ‘‘we will continue to
lose work and thus the jobs will disappear.’’ Nielsen also stated that
‘‘the recent trend of losing even greater amounts of work to other
companies will continue and the jobs our employees now have will
also be lost’’ in the absence of concessions (emphasis added). This
is clearly more than a reference to job loss only at ‘‘some unspec-
ified future point’’ beyond the term of the contract. According to the
majority, when the Respondent used the term ‘‘will continue’’ to de-
scribe the continuum of job loss into the future from the present, it
actually meant that job loss, which was ongoing, would be sus-
pended for a period of time that happened to coincide with the term
of the contract under negotiation, perhaps only to resume at a ‘‘fu-
ture point’’ some years later. This strikes me as a rather unorthodox
construction of the term ‘‘will continue.’’
6 See Metlox Mfg. Co., 153 NLRB 1388, 1395 (1965), enfd. 378
F.2d 728 (9th Cir. 1967), cert. denied 389 U.S. 1037 (1967). Thus,
details as to who used a company car and how much someone spent
Continued
the jobs will disappear. . . . It is your job that is
on the line . . . . [W]e have to be able to com-
pete . . . . [I]f we don’t the recent trend of losing
even greater amounts of work to other companies
will continue and the jobs our employees now
have will also be lost.
On December 19, 1983, the Respondent unilaterally
implemented terms contained in its most recent con-
tract proposal. Thereafter, on January 28, 1984, the
Union commenced a strike, which terminated on July
25, 1984, upon the Union’s tender of an unconditional
offer to return to work on behalf of the strikers. The
Respondent notified the Union that permanent replace-
ments had been hired in the interim and that no posi-
tions were available at that time.
II.
As indicated at the outset, I would find that the rep-
resentations of Chief Negotiator Freeman and President
Nielsen linked the Respondent’s need for concessions
to its unsatisfactory economic condition which, as they
repeatedly told the Union, threatened further loss of
jobs. Freeman steadfastly adhered to the position that
the Union should accept concessions because the Re-
spondent was losing business and employees were los-
ing jobs and work hours4 In his letter to the Union’s
bargaining committee, presented on December 9,
Nielsen repeatedly emphasized the economic reality
faced by the Respondent—the loss of ‘‘even greater
amounts of work’’ and the loss of ‘‘the jobs our em-
ployees now have.’’
Thus, the record reveals a bargaining posture that
firmly links the need for union concessions with the
Respondent’s portrayal of its economic condition,
marked by job losses, business losses, and the prospect
of worse to come. In seeking broad economic conces-
sions, the Respondent expressed not only a desire to
remain competitive, but invoked its recent loss of em-
ployee positions through layoff and attrition, its actual
loss of business coupled with its objective assessment
that these unsatisfactory trends likely would be worse
in the future, and its assessment that the jobs of cur-
rent employees were ‘‘on the line’’ and ‘‘will also be
lost’’ if economic trends continue without economic
concessions. The Respondent’s overall words and con-
duct during bargaining belie the notion that it was sim-
ply expressing a subjective unwillingness to consider
more favorable economic terms divorced from objec-
tive, verifiable claims that its economic condition re-
quired that employees choose between their jobs and
their current level of pay and benefits. Indeed, the
threats of job loss came on the heels of already imple-
mented reductions in the employee complement.5
In these circumstances, most of the requested infor-
mation was relevant to the core claim asserted at bar-
gaining—that the Respondent’s economic condition,
characterized as one of job loss past, present, and fu-
ture, could be alleviated only by the Union’s granting
of the concessions demanded by the Respondent. The
financial information requested by the Union could ei-
ther substantiate or tend to disprove the Respondent’s
contention that the employees’ wages and benefits
were responsible for the continuing loss of their jobs.
This, in turn, might give the Union a basis for reas-
sessing, and possibly altering, its own bargaining pos-
ture. It would know whether there was a source of
funds for continued payment of the wages and benefits
of current employees. Cf. Mary Thompson Hospital v.
NLRB, 943 F.2d 741 (7th Cir. 1991) (requested docu-
ment might reveal source of funds for employees’ sev-
erance pay and accrued benefit claims). The Union
would also therefore have a basis for recommending a
bargaining position to the unit employees—who doubt-
less would be concerned about both the Respondent’s
predictions of continuing job loss and the prospect of
smaller paychecks and reduced fringe benefits if the
Respondent’s demands were agreed to.
In finding that the Union is entitled to substantiating
information, however, I do not conclude that the Union
is automatically entitled to every item on its request
list. Thus, on the present record I would not find that
the information about leased automobiles and manage-
ment expense reports is relevant. In short, I do not
view it as a proper purpose of the Union to critique
individual expense vouchers or use of company cars6
706 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
for a business lunch are unlikely to shed much light on a claim that
employees can save their jobs only if they accept cuts in their wages
and benefits. Major items such as costs of nonbargaining unit labor,
however, are clearly relevant to this claim. Even information on car
leasing and management expense reports could become relevant if
other records indicate that totals of those items are an unusually
large part of the Respondent’s recent expenditures. The Union might
reasonably seek to examine the Respondent’s records to discover, for
example, if these were costs incurred in connection with a one-time
project or were likely to be recurring expenditures. This, of course,
is the same sort of inquiry that might be made if the Respondent
claimed that its current financial state was so poor that it faced im-
minent bankruptcy—a classic Truitt claim.
7 As the reviewing court noted in this proceeding, requests for eco-
nomic information must be reasonable and not burdensome in scope.
I note Dr. Kiefer’s testimony regarding the mechanics of disclosure
and the attempts customarily undertaken to avoid undue inconven-
ience to the employer. Nielsen Lithographing Co., 279 NLRB 877,
880–881 (1986). I also note that the Respondent has not contested
the information request on the grounds of burdensomeness.
8 In Truitt, the employer stated, inter alia, that an increase of 2-
1/2 cents would ‘‘put it out of business.’’ However, an employer
may put its economic status into issue through a variety of state-
ments along the economic spectrum. It may rely on business losses
incurred in recent years. Clemson Bros., 290 NLRB 944 (1988). It
may state that it is in ‘‘bad shape’’ and refer to business lossses and
questionable prospects in the future. Facet Enterprises, 290 NLRB
152, 153 (1988), enfd. 907 F.2d 963 (10th Cir. 1990). It may refer
to its decreasing sales, increasing inventory and costs, and loss of
employee work hours, S-B Mfg. Co., 270 NLRB 485 (1984), or de-
scriptively indicate that ‘‘the well is dry.’’ Unoco Apparel, 208
NLRB 601, 608 (1974).
The majority’s attempt to fit these cases within their overly narrow
reading of Truitt is unpersuasive. In Clemson Bros., the Board ex-
pressly held that it does not require an express plea of poverty to
invoke the application of Truitt and that it is sufficient if the em-
ployer’s words and conduct ‘‘specifically link its bargaining position
to economic hardship.’’ 290 NLRB at 944 (footnote omitted). In S-
B Mfg. Co., the Board found a disclosure obligation because the em-
ployer relied on its ‘‘financial condition,’’ which amounted to a plea
of financial ability to pay ‘‘or its equivalent.’’ 270 NLRB at 491–
492. In Facet Enterprises, the Board specifically rejected the employ-
er’s contention that it had merely claimed competitive disadvantage
and found that a disclosure obligation was triggered by the employ-
er’s description to the union of its unsatisfactory economic condition.
In Unoco Apparel, the Board stated that disclosure of relevant eco-
nomic information is required when an employer asserts an inability
to pay ‘‘or a related type reason.’’ 208 NLRB at 610.
9 Because relevancy turns on the factual circumstances of each
case, the court found that the duty to disclose must turn in each case
upon its particular facts, even in inability to pay cases.
But, in my view, the Union’s auditor, Dr. Dale Kiefer,
adequately explained in his testimony at the hearing in
this case the need for the rest of the information to as-
sess the factual basis for the Respondent’s claims.7
III.
I recognize that although repeatedly asserting the
loss of jobs and business, the Respondent also stated
that it was profitable and that it was not pleading
‘‘poverty.’’ It did not assert specifically that it lacked
either the means to pay or that it specifically was ‘‘un-
able’’ to pay. To my colleagues in the majority, these
disclaimers coupled with references to noncompetitive-
ness are dispositive. Under their view, an employer
who claims profitability but who, at the same time, re-
lies on specific evidence of present and immediate fi-
nancial setbacks (loss of jobs, business, etc.) to justify
its bargaining demands does not trigger a duty to dis-
close economic information. Given the record in this
case, the majority is necessarily finding that by making
general statements that it is profitable and is not plead-
ing poverty or inability to pay, an employer may es-
cape the necessity of providing requested substan-
tiating financial records regardless of the specificity
and concreteness of its claims about a linkage between
continuing financial difficulties and the unit employ-
ees’ wages and benefits. In my view, this represents a
cramped reading of NLRB v. Truitt Mfg. Co., 351 U.S.
149 (1956), and cases relying on it that my colleagues
do not purport to overrule.
The classic Truitt dichotomy, as it has evolved, be-
tween ‘‘inability to pay’’ and ‘‘unwillingness to pay’’
is intended to distinguish between an objective factual
claim (subject to verification) and a subjective claim
(not subject to verification). Hence, it is not critical
whether the claim asserts an imminent collapse of the
business, i.e., a duty may arise without the employer’s
saying ‘‘we will go out of business and into bank-
ruptcy tomorrow if we pay.’’8 What is critical is the
linkage between the employer’s bargaining posture and
its stated unsatisfactory economic status, i.e., reliance
on factual, objective conditions of distress necessitating
that employees choose between their jobs and their
current pay and benefit levels. Truitt essentially is a
standard for determining relevance: has the employer’s
claim placed at issue in bargaining a matter that is sub-
ject to verification of accuracy? A claim of inability to
pay raises a matter that is subject to verification and
therefore subject to disclosure as a concomitant of
good-faith bargaining. As the Court explained in
Truitt:
Good-faith bargaining necessarily requires that
claims made by either bargainer should be honest
claims. This is true about an asserted inability to
pay an increase in wages. If such an argument is
important enough to present in the give and take
of bargaining, it is important enough to require
some sort of proof of its accuracy. [351 U.S. at
152–153.]9
In remanding this case to the Board, the court of ap-
peals recognized the critical distinction between an as-
sertion that is subject to verification and one that is
not. I fully agree with the court’s observation that an
employer has no duty to provide requested economic
information if its bargaining posture is limited to the
claim that ‘‘its costs are higher than its competitors’
and it wants to reduce them.’’ As the court reasoned
persuasively:
707NIELSEN LITHOGRAPHING CO.
10 In any event, complexity might also be raised as an argument
against disclosure in classic Truitt cases. It might not always be in-
disputable from a reading of a balance sheet that an employer would
be ‘‘unable to pay’’ wages and benefits at a given level in order to
stay in business during the term of a contract. The balance sheet
might, for example, reveal other large expenses that either could or,
likely would, be eliminated during that same period. See fn. 6, supra.
Member Oviatt’s reasoning reflects an implicit rejection of Truitt
itself.
11 As the Court noted in Truitt (351 U.S. at 152):
12 As the majority found in Concrete Pipe & Products, 305 NLRB
No. 21 (1991), the employer there ‘‘did not assert that it was losing
money or that its business was at some imminent risk of closing
down.’’ Slip op. at 3.
13 See e.g., Concrete Pipe & Products Corp., supra, in which I re-
cently concurred in finding that an employer had no duty to furnish
economic information when its statements regarding ‘‘survival’’
were vague and general and, in contrast to the instant case, unac-
companied by assertions pertaining to the employer’s present or im-
mediate financial condition.
A need is objective; it can be substantiated. But
how do you substantiate a want? If a company
says it wants to make higher profits by reducing
its labor costs, what data would falsify its state-
ment? [854 F.2d at 1065.]
In the instant case, the Respondent did not merely
assert an unverifiable ‘‘want.’’ The Respondent in-
formed the Union that it needed concessions in order
to reverse the recent trend of losing jobs and losing
work because of its labor costs. As president Nielsen
stated:
[I]f we don’t the recent trend of losing even great-
er amounts of work to other companies will con-
tinue and the jobs our employees now have will
also be lost.
In my view, the Respondent’s statements are not
simply the expression of a ‘‘subjective desire’’ to re-
duce costs. Nor can it be said either that the Respond-
ent’s assertion of a linkage between a failure to grant
wage and benefit concessions and a continued loss of
jobs was a matter inherently incapable of verification
or, as Member Oviatt argues, not ‘‘capable of suffi-
ciently accurate verification to aid the bargaining proc-
ess.’’ The Respondent purported to be stating a matter
of fact concerning its current and evolving financial
condition, and it therefore could reasonably be under-
stood as asserting that this condition was ascertainable
on the basis of financial information known to it. It did
not argue that these matters were so complex that it
could not discern whether concessions were necessary
to forestall employees’ loss of their jobs and that the
uncertainty alone justified its proposals.10 Because the
bargaining process stalled over the Respondent’s de-
mands that the Union agree to huge reductions in pay
and benefits, it would appear to me that the process
would be aided by the Respondent’s disclosure to the
Union of the requested information. As Theodore Mur-
phy, the Union’s chief negotiator, testified, if the Re-
spondent’s records ‘‘proved that the [Respondent] did
need relief . . . we would be able to . . . justify to
[the unit employees] that we ought to consider some-
thing.’’11 In short, I do not agree that the Union was
required to accept at face value the Respondent’s claim
that employee job loss could be avoided only by sub-
stantial wage and benefit concessions.
In their effort to reach an agreement here both the
union and the company treated the company’s
ability to pay increased wages as highly relevant.
The ability of an employer to increase wages
without injury to his business is a commonly con-
sidered factor in wage negotiations. Claims for in-
creased wages have sometimes been abandoned
because of an employer’s unsatisfactory business
condition; employees have even voted to accept
wage decreases because of such conditions.
My disagreement with the majority therefore does
not concern whether a duty to disclose economic infor-
mation is triggered by a claim limited to future inabil-
ity to compete. We all agree that it is not. It appears
to me that our disagreement concerns the extent to
which the concept of ‘‘relevance’’ under Truitt applies
to claims of economic hardship. In their view, only a
claim of abject poverty, i.e., that the employer is in
imminent danger of going out of business, can trigger
a duty to disclose economic information under the rel-
evance standard of Truitt.12 In my view, a Truitt obli-
gation is triggered when an employer, as here, effec-
tively claims hardship that will result in employees’
continuing to lose their jobs unless the union acqui-
esces to the employer’s demands as to pay and bene-
fits. In both instances, the employer’s assertions render
its economic condition relevant to bargaining. In both
the employer is not merely stating an economic truism
concerning something that has yet to materialize or a
subjective desire to operate more profitably, but is as-
serting that its economic condition is such that it can-
not continue to employ all of the unit employees un-
less the union accepts its bargaining proposals for cuts
in pay and benefits.
Although I would find that the Respondent was obli-
gated to furnish relevant financial information, I ac-
knowledge that there are circumstances in which asser-
tions concerning an employer’s economic status are
simply too vague to trigger a requirement to disclose
any economic information.13 An employer may be
under no disclosure obligation when it merely claims
to be operating at a competitive disadvantage and
makes vague and ambiguous statements regarding its
business. In such circumstances, an employer’s claims
simply are not subject to verification by reference to
economic information. Thus, in Atlanta Hilton &
Tower, 271 NLRB 1600 (1984), the Board found no
708 DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD
14 Craig & Hamilton Meat Co., 271 NLRB 853 (1984), relied on
by the majority, is distinguishable from the instant case for a some-
what different reason. In that case, an employer stated that competi-
tive market forces required it to redirect its resources from meat
processing to jobbing. The Board adopted the judge’s finding that
the only matter placed at issue was the Respondent’s changing role
from processor to jobber and that the economic information sought
by the Union did not pertain to that claim. By the same token, a
claim limited solely to competitive disadvantage only places at issue
the employer’s position vis-a-vis other competitors. However, when
an employer, as in the instant case, describes in detail its ongoing
loss of business, ongoing loss of employees’ jobs, and continuing
prospects of worse to come, it is putting at issue its economic health,
in sharp contrast to the scenario in Craig & Hamilton.
15 The court found that an additional employer pleaded inability to
pay and had a disclosure requirement.
16 I find it unnecessary to the decision of this case to decide
whether Harvstone itself should be overruled. I note, however, that
the statements made in Harvstone regarding the future were unac-
companied by the kind of statements present in the instant case con-
cerning past and immediate job losses and the continuation of
present unfavorable economic trends. I would, however, overrule the
Board’s decision in Buffalo Concrete, 276 NLRB 839 (1985), enfd.
803 F.2d 1333 (4th Cir. 1986). I would do so not because I disagree
with the Board’s general observations in that case about the applica-
ble legal test but because I disagree that the Board correctly charac-
terized the employers’ statements about employee job losses as refer-
ring merely to ‘‘a general loss of jobs in the unionized sector of the
industry.’’ 276 NLRB at 841. In my view, the employers directly
linked the continued existence of the jobs of the employees rep-
resented by the union there to the union’s acceptance of the employ-
ers’ ‘‘take-aways.’’ Id. at 853.
duty to disclose where the employer, in seeking a 1-
year contract extension rather than negotiating a suc-
cessor agreement, made reference to general conditions
in the economy coupled with highly ambiguous ref-
erences to its business and indicated simply that the fu-
ture was ‘‘so uncertain.’’ Likewise, in Advertisers Mfg.
Co., 275 NLRB 100 (1985), the Board found that an
employer’s general reference to its ‘‘level of busi-
ness,’’ as well as other expressions of a subjective
managerial unwillingness to pay employees a bonus,
did not create an obligation to provide economic infor-
mation.14
In sum, in defining the test for the relevance of in-
formation about an employer’s financial condition, I
would adhere to the following statement of the law
adopted by the Board in Gas Spring Co., 296 NLRB
84 (1989), enfd. mem. 908 F.2d 966 (4th Cir. 1990),
cert. denied Sup. Ct. No. 90–797 (Feb. 19, 1991):
An analysis of the relevant decisions . . . dem-
onstrates that no matter what particular words
have been said, when an employer has steadfastly
relied upon its own poor financial condition and
projected injury to its business, it has been re-
quired to produce information to support its claim.
To the contrary, where the employer has made no
statements about its own finances, and merely
talked about the general economy or its relation-
ship with its competitors, no unfair labor practice
has been found [296 NLRB at 97].
IV.
In its decision remanding this case to the Board, the
court of appeals was justifiably disturbed by our initial
failure in this case to consider the court’s opinion in
NLRB v. Harvstone Mfg. Corp., 785 F.2d 570 (7th Cir.
1986), in which the court found that three employers
had no disclosure obligation.15 The employers’ asser-
tions in Harvstone included statements that if they did
not make a reasonable profit and remain a viable com-
petitive business, ‘‘they won’t stay in business, and no
one will have jobs,’’ that the employers ‘‘need eco-
nomic relief,’’ and that if concessions were not grant-
ed, the employers ‘‘could, but . . . not necessarily
. . . would go out of business.’’ 785 F.2d at 576 and
272 NLRB at 943–944. (Emphasis added.) The
Harvstone court found that these statements of future
dire economic circumstances were ‘‘nothing more than
truisms,’’ because they were not sufficiently tied to the
present or to the immediate future, i.e., to the term of
the new collective bargaining agreement. As the court
explained (785 F.2d at 577):
Clearly, if an employer operates at a competitive
disadvantage for a long enough time, its profit
margin, as a matter of pure economics, will de-
cline eventually forcing it out of business. There
would then come a time when [the employers]
could be expected to plead inability to pay, but
that time has not yet arrived. In context [the em-
ployers’] statements did not constitute a plea of
inability to pay. The relevant time period we must
concern ourselves with is that of the term of the
new collective bargaining agreement. [785 F.2d at
577.]
In its decision remanding this case, the Nielsen court
indicated that the facts of the instant case possibly
might ‘‘place it halfway between Truitt and
Harvstone’’ if the Respondent’s statements were con-
strued as threatening layoffs in the near term, thereby
‘‘perhaps bringing the case within the gravitational
field of Truitt.’’ For the reasons stated above, I find
it within that ‘‘gravitational field.’’ I therefore disagree
with the majority’s view that the Respondent’s state-
ments are even less susceptible to a disclosure require-
ment under Truitt then were the employers’ statements
in Harvstone.16
In sum, the Respondent directly placed its economic
condition at issue by its repeated references to the spe-
cific loss of jobs and business that already had oc-
curred, and by its statements that additional losses
would continue to occur in the absence of union con-
cessions. I would find that the Respondent was obli-
gated to supply requested information that would allow
the Union to assess the accuracy of those claims. I
would accordingly find that the Respondent violated
709NIELSEN LITHOGRAPHING CO.
Section 8(a)(5) and (1) of the Act by its refusal to sup-
ply such requested information.