Allied Chemical & Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass Company, Chemical Division

PETITIONER:Allied Chemical & Alkali Workers of America, Local Union No. 1
RESPONDENT:Pittsburgh Plate Glass Company, Chemical Division
LOCATION:Christian County, Kentucky

DOCKET NO.: 70-32
DECIDED BY: Burger Court (1971-1972)
LOWER COURT: United States Court of Appeals for the Sixth Circuit

CITATION: 404 US 157 (1971)
ARGUED: Oct 20, 1971
DECIDED: Dec 08, 1971

ADVOCATES:
Guy Farmer – for respondents
Mortimer Riemer – for petitioner Allied Chemical & Alkali Workers of America, Local Union No. 1
Norton J. Come – for petitioner National Labor Relations Board

Facts of the case

Question

Audio Transcription for Oral Argument – October 20, 1971 in Allied Chemical & Alkali Workers of America, Local Union No. 1 v. Pittsburgh Plate Glass Company, Chemical Division

Warren E. Burger:

We’ll hear arguments next in number 32 and 39, Allied Chemical Workers versus Pittsburgh Plate Glass and the Labor Board against Pittsburgh Plate Glass.

Mr. Come you may proceed whenever you are ready.

Norton J. Come:

Mr. Chief Justice and may it please the Court.

This case is here on certiorari to the United States Court of Appeals for the Sixth Circuit which denied enforcement of the board’s bargaining order.

The question presented is whether an employer violates his bargaining obligation under the National Labor Relations Act by refusing to bargain with the Union representative of his employees about the changes in health benefits which the employer proposes to negotiate with employees who have already retired.

Now the basic facts are these.

Since 1949, local one of the Allied Chemical Workers of America has been the bargaining representative for all hourly employees at the Barberton, Ohio plant of the Pittsburgh Plate Glass Company.

In 1950, the Union and the company negotiated a contract which for the first time included provisions for pension and hospitalization and surgical insurance plan.

At the same time the parties orally agreed that the employees who retired could participate in the medical plan by contributing the entire cost of the insurance premium which would be deducted from their pensions.

In 1959, retiree benefits under the plan were improved and as a result of contract negotiations 1962, the medical insurance plan became contributory for the first time.

The company agreeing to two dollars towards the cost of insurance premiums for employees who retired in future.

This was available to both the retiree and spouse.

At the same time a change was made in the pension plan to make 65 the mandatory retirement age.

A new contract was negotiated in 1964 and that forms the basis for this case.

At that time the company agreed to increase its monthly contribution of medical insurance from two dollars to four dollars.

The increase was made available not only to employees who retired after the effective date of the contract, but also to each participating employer or employee in the health plan, who had retired on or after the effective date of the 1962 contract, in other words it went back indefinitely to reach employees who had already retired.

In anticipation of the enactment of Medicare, however, the agreement further provided that the company could rescind the two-dollar increase in its contribution, if a government health program were enacted.

Now, Congress enacted Medicare on July 30, 1965.

This contract as I said was negotiated in 1964 and by its terms it had until October of 1967, before it would terminate.

In November of 1965, the Union asked the company to engaged in bargaining for the purpose of negotiating insurance benefits not covered by Medicare.

The company responded several months later by stating that the because of enactment of Medicare it intended to rescind the two-dollar extra contribution that it was making to the health insurance plan and it intended as a matter of fact to cancel the medical insurance plan for retirees entirely because the enactment of Medicare would render the company insurance plan useless.

Instead the company said that it would pay the three-dollars per month subscription cost of supplemental Medicare for each retired employee who elected that and decided to leave the company plan.

The Union conceded that under the contract, the Company by virtue of its reservation had the right to reduce its contribution to the health and welfare plan from four dollars to two dollars.

However, the Union vigorously protested the company’s further action in canceling the company plan all together.

And the Union further inquired what provision did the company intend to make for those pensioners and their wives who are under 65 and not eligible for Medicare at all.

The company challenged the Union’s right to bargain about retirees and acknowledged that there was a problem about the pensioner who would not — or were not eligible for 65 and said that they have to think about that.

Several days later, the company informed the Union that it would not cancel the medical plan for retired employees.

Instead it would write each retiree notifying of the pendency of Medicare and indicating that it would give it the option for either remaining under the company plan with reduced contribution of two-dollars on the part of the company or getting out of the company plan in which case the company would pay the three-dollars supplemental Medicare subscriptions.

The Union objected on the ground that such change should be the matter of negotiations and could not be done unilaterally by the company.

The company took the position, the reiterated position and said we will not apply the matter and went ahead and bid to contact the retirees individually about the offer.

Norton J. Come:

As a result out of 15 out of the 190 retirees availed itself of the company’s option, the remainder remained under the old plan with the reduced employee contribution.

The Union thereupon filed charges with the board alleging that the company’s refusal to bargain about the changes in the health plan for the retirees violated the company’s bargaining obligation under the National Labor Relations Act.

The Board sustained the complaint which is an issued by the Board’s general counsel, agreeing with the Union’s contention that company had violated its bargaining obligation.

There were two basis for the Board’s decision.

First of all that retirees remained employees under the act for purposes of their retirement benefits and secondly that even if they were not employees, there was the duty to bargain about this matter because changes in retirement benefits had a direct and vital impact on the terms and conditions of the employment of the active employees as to whom there was clearly a bargaining obligation.

The Board entered an appropriate order.

The Six Circuit denied enforcement of the Board’s order and we are here.

Now we submit that the Six Circuit erred for two basic reasons which I will try to develop.

Section 8 (a) (5) and 8 (d) of the National Labor Relations Act imposes on the employer and the representative of his employees the obligation to bargain with each other in good faith with respect to wages, hours and other terms and conditions of employment.

By now it is well established that employers are obligated to bargain with Union representative about pensions and insurance benefits to be enjoyed by active employees upon their retirement and indeed a large percentage of Union represented employees are currently working under negotiated pensions and retirement plans.

However, experience and the facts of this case show that retirement benefits once negotiated do not remain static, but they are subject to unanticipated events even after the employee has retired.

Monetary inflation is one obvious unanticipated event.

The other one, a change in public law, in this case illustrates that because at the time that the parties originally hammered out a health insurance plan nobody contemplated what effect Medicare would have on it.

So the question presented here is whether when these changes are to be made in the benefits of employees that have retired, the employer must bargain with the Union on behalf of the employees, of the retired employees about those changes just as it did with the Union when they were originally negotiated or whether it is one of the three and act unilateral.

Now this Court in the Fiber Board case indicated that industrial practice in this country is a very important consideration in determining whether a matter is a mandatory subject of collective bargaining and further the amenability of the subject to the collective bargaining processes of the Act.

This experience we submit, supports the Board’s conclusion, the changes in retiree benefits are a mandatory subject of collective bargaining because as shown in the amicus brief that has been filed by the AFL and CIO and by the Senior Citizen’s Committee.

Employers and unions have for many years regularly and consistently bargained not only about the pension and retirement benefits for active employees to be enjoyed upon their retirement, but also upon improvements in the benefits for employees who have already retired.

(Inaudible) the employer contributions that occurred —

Norton J. Come:

Yes You Honor I think that that is basic to the Board’s argument.

That was certainly the basis on which the pension and retirement benefits were held for active employee to be enjoyed upon retirement was found to be within wages, hours and terms and conditions and to carry that to retirees is just a what we submit as a natural progression, it is a part of the wage.

Now both the company and the Union however arrived at a contrary conclusion, principally in this fashion.

They say Section 8 (a) (5) of the Act requires the employer to bargain with the representative of his employees, subject to the provisions of Section 9 (a) which in turn makes the representative selected by a majority of the employees in an appropriate unit, the exclusive representative of all the employees in the Section.

Now since retirees are no longer on the payroll of the employer and the Board does not permit them to vote in a representation election, the argument runs they cannot be regarded as his employees or employees in such units within the meaning of Section 8 (a) (5) and Section 9 (a).

We submit that there is not warrant for such a restrictive interpretation of the terms employee and unit.

However, if we prevail on our first argument, namely that there is a duty to bargain about the benefits paid to retirees because of the direct impact that it has on the benefits of the active employees, we do not even have to reach the, what is the principle thrust of the opinion of the Court of Appeals and of the company here.

That comes in only on the second prong to the Board’s argument, namely that in any event a retiree still remains employee for purposes of the retirement benefit.

Byron R. White:

Mr. Come, were the benefits that the employer had been paying before the change or before they offer, were they required by an effective bargaining contract, were they part of the terms of the collective bargaining contract?

Norton J. Come:

They were required by an agreement.

What the company did was they negotiated the collective bargaining agreement and then they at the same time executed a side agreement covering —

Byron R. White:

With the Union —

Norton J. Come:

— with the Union.

Byron R. White:

So that anyway it’s a contractual matter —

Norton J. Come:

That is, that is correct, Your Honor.

Byron R. White:

Now what if the employer had just instead of changing the payments, he just cancels, I suppose the individual retired employees would have had a cause of action against him?

Norton J. Come:

That is a correct —

Byron R. White:

Wouldn’t the Union too?

Norton J. Come:

For breach of the collective bargaining agreement, perhaps under — probably under 301.

Byron R. White:

Is there some doubt about it?

Norton J. Come:

No, I do not think that there is any doubt.

William J. Brennan, Jr.:

Reach the question of bargaining, reach the side agreement —

Norton J. Come:

Yeah, breach of the —

William J. Brennan, Jr.:

Breaches of anything —

Norton J. Come:

That is correct.

Byron R. White:

Now is it your position also that the proposition that the Union could negotiate a modification of the side agreement on the retirement benefits, reducing them and bind the retired employees?

Here is an agreement that has been made that promises to pay X and there are employees who retire, the Union and the employer get together and they all agree that there is (Inaudible) or something or that there is this desirable of low retirement benefits generally and they lower them.

Is the Union the representative of those retired employees for that purpose?

Norton J. Come:

I think that the logic of my argument would cover that as well.

Byron R. White:

(Voice Overlap)

Norton J. Come:

If (Voice Overlap) however —

Byron R. White:

And how does that workout when the employee, when that retired employee has absolutely no voice?

Norton J. Come:

Well, I think (Voice Overlap) I think you then get into problems of breach of the duty of their representation.

Question as to whether or not if the thing is invested any such agreement is going to be one of the in person.

However, when the employer is free to act unilaterally, you got the same problem.

The only question is whether you reach it as a result of the employer’s unilateral action or as a result of collective bargaining.

I think that —

Byron R. White:

Yes but if there are always contractual remedies against them.

If he lowers the — if he does not live up to his agreement, the retired employees can have an action against them?

Norton J. Come:

Well, I think that they —

Byron R. White:

And your objection is that he is raising the benefit?

Norton J. Come:

Well, they could also have an action against the Union for breach of the duty of their representation.

Norton J. Come:

However, we do not have anything like that in this case, Your Honor.

Warren E. Burger:

Going back to the hypothetical that Mr. Justice White suggested to you about the Union exercising this power to negotiate a reduction in benefits previously pre defined.

It seems to me I recall some Court of Appeals cases that have referred to this in terms of the possible breach of fiduciary duty of the Union towards its members?

Norton J. Come:

Yes, Your Honor.

I think that the Union would bring itself afoul of that line of the decisions.

Warren E. Burger:

Should the Board have jurisdiction of that or that be a suit under 301 or where will it be?

Norton J. Come:

I think it would be a suit in the courts as an independent suit under the National Labor Relations Act along the line Tungsten Steel cases.

It might be under Launder and Griffin.

The Board could also have jurisdiction under that under its Miranda line of decisions which has held that breach of the duty of fair representation on the part of the Union is a violation of Section 8 (b) (1) (a) of the National Labor Relations Act.

I think there are a whole host of remedies for the situation of a Union that would be so unwise as to negotiate a reduction of retiree benefits.

The experience that is shown as to the way the bargaining has taken place in this area which I refer the Court to amicus briefs for it shows that invariably negotiations have resulted in an increase in retirement benefits.

There have been no instance that I have been able to find where there has been such a —

Byron R. White:

Does the Union claim or does the Board claim that the employer would process or just reach the collective or side agreement, aside of what he has done (Inaudible)

Norton J. Come:

We do not — that is the Board does not get into the question as to whether in act there has been a breach of the collective bargaining agreement —

Byron R. White:

And there would been a remedy for it.

Norton J. Come:

There would have been a remedy, but there could it be concurrent remedy.

There are some reaches of the collective bargaining agreement, they also be a breach of the duty to bargain collectively under 8 (a) (5) of the National Labor Relation Act and that is what we submit we have here.

Now I would like to develop for a moment our first line of argument here that without regard to the question of whether the retiree remains an employee or not, the active employees are clearly the company’s employees and they are included in the unit which the Union represents.

The company, there is no question is required to bargain with the Union, respecting their wages, hours and other terms and conditions of employment.

Now this obligation includes the employment conditions of persons outside the unit where they have a direct impact on the conditions of the employees within the Union unit, and therefore, the company I submit, is wholly accurate in saying that the bargaining unit finds the boundaries of the bargaining obligation and concludes the scope of the bargain.

This Court’s decision in the Oliver case, we submit, establishes the proposition — the contrary proposition because in Oliver as the Court will recall, it held that a bargaining unit, including an overwhelming majority of concededly employed drivers of carry your own equipment was entitled under Section 8 (b) of the National Labor Relation Act.

The bargain to impasse concerning the minimum rentals to be received by owner-drivers when they became leasees of the carrier and as the Court explained in the Drum case, it is holding in Oliver, said “it was not necessary to determine whether the owner-drivers were employees protected by the Act since the establishment of the minimal rental to them was integral to the establishment of a stable wage structure were clearly covered employee drivers.

Now we submit here that so here the benefits paid to retirees are integral to the establishment of the terms and conditions of employment are clearly covered active employees.

And if we are right on this point, we think that that is enough to sustain the Board’s as position without more.

William J. Brennan, Jr.:

You never get then to the question whether the retirees were their employees?

Norton J. Come:

That is correct, Your Honor.

Now —

Potter Stewart:

That is getting a an awful lot of millage out of the Oliver case, isn’t it?

Norton J. Come:

Well we submit, no Your Honor for this reason.

There is a very close relationship here between the benefits paid to the actives and adjustments in retiree benefits.

Norton J. Come:

It is true that it does not involve a loss of —

Potter Stewart:

Lost jobs —

Norton J. Come:

Loss of jobs —

Potter Stewart:

Or an immediate threat to wages —

Norton J. Come:

Well —

Potter Stewart:

Or working conditions of existing employees?

Norton J. Come:

Well when we say immediate threat to wages I think that is where we would differ with the company here because the adjustments that are made in the benefits for retired employees directly affect the bargain that is going to be made for the active employees.

If the adjustments made for retirees are too liberal, as obviously it is going to be less in the path where the active employees because the employers generally allocate a certain amount for their total labor cost fixed beyond that.

The active employee being aware of these unanticipated changes is going to look to what the retiree is getting.

If there is a history in this plan of negotiation to improve the retirement benefits, the active employees will might well be willing to settle for a fixed retirement plan and a mandatory retirement age, living the negotiations, the ironing out of the unanticipated events develop in the future.

If there is not this history of bargaining or this possibility of bargaining, the chances are that the active employees are going to insist upon some kind of a flexible retirement plan where the cost of living escalates across.

This is going to make it much harder to get a bargain for the active employees so that there is a very close relationship here between the bargaining for the active employees and the adjustment in retiree benefits.

I should like to save the balance of my time for the rebuttal and leave the briefs secondly to the my arguments.

Warren E. Burger:

Very well, Mr. Come.

Mr. Riemer?

Mortimer Riemer:

Mr. Chief Justice and may it please the Court.

In 1950, the Union began to put together a comprehensive program of retirement benefits for the employees of the company at its Barberton, Ohio plant.

The first insurance program, one of hospitalization and surgical benefits was in oral agreement.

By 1960, this became a written document, supplementing the collective bargaining agreement.

The 1960 written agreement provided for hospitalization and surgical program was non contributory and in 1962, the first contributory program was executed by the parties under which the company agreed to contribute two-dollars per month per employee, per retiree.

The cost was otherwise borne by deductions from the pension check of the retiree.

William J. Brennan, Jr.:

May I ask (Inaudible)

Mortimer Riemer:

Yes sir.

William J. Brennan, Jr.:

The retirees remained Union members?

Mortimer Riemer:

They remained Your Honor, Mr. Justice Brennan, they remained honorary members.

They have no other obligation to the Union.

William J. Brennan, Jr.:

No dues to pay?

Mortimer Riemer:

They pay no dues.

They are considered honorary members without the payment to dues.

They have the right to visit meetings, attend meetings.

William J. Brennan, Jr.:

But not participate, not to vote?

Mortimer Riemer:

But not to vote.

Warren E. Burger:

If the Union has something in the nature of club facilities as some of them do, are they permitted to use all those facilities generally?

Mortimer Riemer:

Well, Your Honor, some years ago the Union was going to start such a program, but it was abandoned because of cost.

Now what they do, the retirees do use the Union meeting hall as congregating place.

It is very ample for that purpose, but there is no recreational program as such.

Byron R. White:

Was the plan A funded by the insurance?

Mortimer Riemer:

Yes, the insurance program?

Yes sir, equitable life insurance society, Mosley Carriers.

William J. Brennan, Jr.:

Of course some unions do have a rather extensive recreational facilities and problems for retirees, do they not?

Mortimer Riemer:

Yes indeed, they do, Your Honor.

I could mention many that do and it is a definite program of many Unions.

This small independent Union had never been able to bear the financial cost of such a program.

What I want to say Mr. Chief Justice and to the members of the Court is that from 1950 down to 1964, this insurance program was a negotiated program and it usually reached at or about the time collective bargain negotiations were entered into and adjustments were made to the pension agreement.

So it was not a loose and formal arrangement, but it was a firmly bargained arrangement, particularly the 1962 and the 1964 agreement.

Now in 1962 and I think this the most significant, when the collective bargaining agreement was negotiated, when changes were made and the pension agreement, the company exacted from the Union a promise as part of the collective bargaining agreement that retirement would become mandatory at the age 65, effective in 1964 and at that point it seems to me the Union members must look to the Union, the retiree must look to the Union.

For some quid pro if I am going to be forced to retire when I reach the age of 65 then at least I must look to the Union to be sure the bargain for program on surgical benefits, on hospitalizations benefits is going to be carried out and if there are going to be any changes in what the Union bargained for me, since I must retire at the age of 65 then I must rely upon the Union to accomplish those changes.

But what happened in between 1950 and 1964 as I related was consistent with what was happening throughout the entire industrial movement and this brings me to one point that I should like to make, and that is to deprive what I think is a misleading effort on the part of the company to challenge the statistics and studies which have been included in the briefs of the Board and the brief the Union and then the amici briefs.

We think we had the right, we think we had the right to call to this Court’s attention of luminous studies of the Department of Labor, other authentic information, showing the growth of the industrial practice of bargaining about hospitalization and surgical benefits for retirees.

And under to this Court’s decision in Vaca against Sipes and in Fiberboard I think there is ample authority to sustain what was done.

The 1964 agreement, Your Honor, was a firmly bargained agreement.

It had three years to go, expiring in 1967 and supplementing that collective bargaining agreement was the insurance agreement in the appendix was co-terminus, this too had three years to run, subject only to a deficiency if you want to call it that, that effective with Medicare, the company would reclaim the two-dollar additional contribution which it had agreed to 1964 and so it is understandable with the approaching effective date of Medicare and its impact upon the active employees now retiring.

The Union was in a position to inquire and asked did the company proposed to do, come July 1966 when Medicare became effective?

The Union had bargained for these benefits for these people when they were active.

The benefits were being enjoyed now that they were retired and they have assumed a continuing responsibility to these retired employees which could not be awaited.

And so in November 1965.

This was an entirely plausible and understandable and I think correct from the Trade Union point of view, inquiry to make of a company, what you propose to do in 1966 when Medicare becomes effective.

The company replied, we are going to cancel because Medicare has made this program useless.

We are going to take back the two dollars and we are going to contribute three dollars to Medicare.

This was challenged sharply by the Union and had it not been at that point, had it not been for the challenge of the Union, the entire company program in Barberton would have been canceled.

Mortimer Riemer:

Not only retirees eligible for social security would have lost the advantage of their insurance, but retirees who are not eligible for social security or Medicare because they were below the age of 65 and their spouses too would have lost their insurance.

But for the intervening and necessary act of the Union this was prevented and two days later the company came in with a new program of no cancellation, but refusing to consider or discuss with the Union any modification of the insurance program effective on Medicare became — went into effect in July of 1966.

Byron R. White:

But you had a contractual right to keep the employer from canceling, from terminating unilaterally some contracts?

Mortimer Riemer:

Yes.

I think a suit for breach of contract might have been brought Your Honor.

I think the individuals might have brought a 301 action.

If I may suggest —

Byron R. White:

Was there any kind of a grievance arbitration provision in the said agreement?

Mortimer Riemer:

Yes in the side agreement —

Byron R. White:

If there were disagreements that they would arbitrate or something?

Mortimer Riemer:

There was a never any attempt to arbitrate.

The Union filed no grievance.

The collective bargaining agreement does contain a very comprehensive grievance and arbitration procedure.

Byron R. White:

Is it normally an 8 (a) (5) type or 8 (a) (5) type violation if an employer refuses to follow the grievance procedure in a collective bargaining contract normally, isn’t it?

Mortimer Riemer:

I should think it would be, but I do not think it is normally right.

I think it said Your Honor on the part of the employer to — well, to refuse to arbitrate, to refuse to file the grievance procedure I think is an 8 (a) (5), and normally this does not occur, at least in my experience.

William J. Brennan, Jr.:

(Inaudible) what interest of the active employee were affected by the post company provisions?

Mortimer Riemer:

Well, the interest to the act of the employees, Your Honor, Mr. Justice Brennan effected by this, it seems to me somewhat of manciple view.

The Union rode into the collective bargaining agreement, a mandatory retirement provision.

The active employees had the right to look to the future or a program of benefits that would be rewarded and perhaps above the mere poverty level.

The dollar value of this hospitalization and surgical program together with a reduced life insurance program is of some monetary value.

The active employees know that this cost is something that they have been given up in order that they may in the future recoup in a sort of deferred way what they have given up while active employees.

I think this is all inscrutably intertwined —

William J. Brennan, Jr.:

Was this —

Mortimer Riemer:

— one generates another.

William J. Brennan, Jr.:

Is this to suggest that when they arrive at age 65, the active employees were mandatorily retired and that these provisions would be applicable to them as retirees and that they may be less advantages, then were they able now to negotiate as they were bale to negotiate for their own condition after age 65?

Mortimer Riemer:

I believe that is true, Your Honor.

The more advantages provisions that can be made for the retiree, the more the active employee anticipates that upon reaching the age of 65, he will enjoy no less than the retiree —

William J. Brennan, Jr.:

Yes, and hopefully more?

Warren E. Burger:

Do you think this means the suggestion that the active membership of the Union might sell the retirees down the river sometime?

Mortimer Riemer:

Mr. Chief Justice, absolutely not.

Warren E. Burger:

I see you think it meets the suggestion and answers that there is no likelihood that the actives are going to sell all the retirees down the river?

Mortimer Riemer:

Mr. Chief Justice, I have complete confidence that the Union would not permit active employees to sell retired employees down river.

I do not think any Union itself would dare to take that position.

Warren E. Burger:

And if they did —

Mortimer Riemer:

And if they did —

Warren E. Burger:

— there is some possibility if they did, at least if not a 301 action that would be an accountability as fiduciary, would it not?

Mortimer Riemer:

There would be an accountability, legally and politically.

Warren E. Burger:

Mr. Farmer?

Guy Farmer:

Mr. Chief Justice and may it please Court.

We say the case of course quite differently from brother Mr. Come and the Union counsel, Mr. Riemer.

We see the case as being like issue not of subject matter of bargaining, but a fundamental issue as to the representation rights of the Union and a parallel bargaining obligation of the employer.

Now we see these two things as parallel of as the Union’s exclusive representation rights under the statue are the same or cover the same group or the Union as the Act speaks off, as a group which the employer must bargain for.

Now we are not dealing here with the question of whether it would be permissible on a voluntary basis for this Union and this company to make some arrangements to improve benefits for people who are already retired.

There is no issue with that.

It is agreed.

The Court below held that on a voluntary basis this could be done under the Act.

We are dealing here with the question of whether it is mandatory, obligatory on the part of the Union and on the part of the employer to bargain for these people who have already retired.

Potter Stewart:

I suppose also it is common now, is it not Mr. Farmer that retirement benefits for the present employees are a mandatory subject matter?

Guy Farmer:

No question in that.

It’s been decided for many, many years under Inland Steel and subsequent cases that the benefits with which the employees retire are a mandatory subject to bargaining, but this Court held in the Borg-Warner case several years ago after a different gradations of bargaining that it’s permissive and that it’s mandatory and that it’s unlawful.

I think you cannot bargain about it at all.

I think you must bargain about and there are things you may bargain about.

We say that the —

Warren E. Burger:

Mr. Framer as a practical matter when you are dealing with a large number of retired employees, this was fairly large number, 190 —

Guy Farmer:

190.

Warren E. Burger:

190.

If they have no access to bargaining to their Union of which they are honorary members, does that mean they must bring a class action or must, if they want to negotiate they must band together in some sort of an organization.

Guy Farmer:

Well, Your Honor —

Warren E. Burger:

And if they did, could they require the employer to negotiate with?

Guy Farmer:

Not in my opinion, Your Honor.

In my opinion, once the employer employee relationship is terminated and they will no longer working or performing services, that they no longer have a right to band together to say force concessions through circulative action out of their former employer.

It is my position and it was the position of the court below that the proper time for employees to negotiate their retirement benefits is when they are working and performing the services for which they are being compensated and which they are negotiating about.

Byron R. White:

Mr. Farmer, suppose the Union during negotiation can make a demand upon the company for a provision in the collective bargaining agreement that no changes should be made after retirement and the retirement benefits except in collective bargaining with the Union, would that demand be a mandatory subject to bargaining?

Guy Farmer:

I do not believe so.

Byron R. White:

Why not?

Guy Farmer:

Because they have these —

Byron R. White:

They are bargaining now for the active employee?

Guy Farmer:

They could bargain for the active employee that there would be no change made in their benefits after retirement —

Byron R. White:

Without collective bargaining with Union —

Guy Farmer:

Now that without collective bargain with the Union I think then an attempt to project the bargaining obligation into the retirement situation, I think they could even bargain that if the cost of living went up, the benefits would automatically escalate.

Warren E. Burger:

And some of them have done that?

Guy Farmer:

Yes and that again is perfectly valid bargaining, but the point is that once a bargain is made while the employees working as to what his benefits would be, now this is the part of this total compensation.

This was based on a combined agreement and judgment by the Union and the employer as to value of the services which he is rendering and this comes out in wages and benefits, some of which are to be the deferred until he retires and when he retires he has the right to bargain the best those benefits so they cannot be taken away or reduced by the company or anyone else and all this is valid.

But once this employee retires, it seems to me that it’s contrary to purpose to the Act and it is unfair to the employer to say that he must continue to renegotiate after retirement the value of this person’s services.

Now, he cannot as the court below pointed out, go back and adjust his basis to compensate for what he is going to bill on the benefits of these people who have already retired and so he is going to be subjected under the Board’s view here to continued repetition, repetitive re-evaluation of services that have long since been rendered for people who are no longer rendering any services at all.

Now we say that this is contrary to the whole principle of collective bargaining as that in the statute.

It arises from the statute and it should be controlled by the statute.

We say the issue here is who this Union represents, and who does the employer have to bargain for and we say as the court below did that this is determined by the statutory provision except the bargaining process.

One of these is Section 8 (a) (5) which says that the employer must bargain with the representative of — I mean, his employees are subject to the provisions of Section 9, that is what 8 (a) (5) —

Thurgood Marshall:

My Brennan (Inaudible) the provision in the contract that the retirement benefits shall not be changed under any circumstance.

Guy Farmer:

Yes.

Thurgood Marshall:

And it is changed, why does the Union have a right to negotiate about that change because that change effects the present employees too.

Guy Farmer:

I do not think the — if the contract —

Thurgood Marshall:

Don’t you agree that it effects the present employees?

Guy Farmer:

Change in the benefits of retired — people already retired?

Thurgood Marshall:

Yes.

Guy Farmer:

I do not quite see — on that.

Thurgood Marshall:

Well, if change is from two to three-dollars?

Guy Farmer:

Yes.

Thurgood Marshall:

And I am about to retire next week, I got an interest in that, haven’t I?

Guy Farmer:

It depends on whether that change is to be applied to you or to someone who has already retired.

That would depend on the agreement that was made.

Now there are many people who retired from companies who have different levels of retirement benefits —

Thurgood Marshall:

(Inaudible)

Guy Farmer:

On time in which they have retired and if I as the company and the Union agree to go back to the 1960 retirees and give them an extra three dollars a month that would not automatically apply to you as an active employee unless the agreement so provides.

Thurgood Marshall:

But the Union has negotiated a binding contract, and something has broken it, right?

Guy Farmer:

I am sorry I did not quite get the valid point.

Thurgood Marshall:

Is it true that where the Union negotiates a binding contract concerning retirement benefits and the employer breaks it, the Union has nothing that it can do?

Guy Farmer:

No that is not true Mr. Justice Marshall.

Thurgood Marshall:

What can the Union do?

Guy Farmer:

It can sue for breach of the agreement under Section 301.

Thurgood Marshall:

Contract Act?

Guy Farmer:

Yes.

Thurgood Marshall:

And I assume you say that the retiree can also?

Guy Farmer:

Yes.

Thurgood Marshall:

Go on contract?

Guy Farmer:

Yes, Your Honor.

Thurgood Marshall:

But not now?

Guy Farmer:

Nothing else except possible arbitration that is provided for which could be provided and is provided in some cases.

Now if it pleases the Court, we think that this is a new issue before the Court, but that it is levered by very clearly established principles.

Now up to this time and I would challenge the Board to produce a case in which the Board has ever held that a Union can force bargaining for any person who is not a member of the bargaining unit under Section 9.

Byron R. White:

But you would contend that the employer has the right either to increase or decrease the —

Guy Farmer:

Oh I do not —

Byron R. White:

— the benefits to a retired employees?

Guy Farmer:

— oh I do not — I think he has the right to increase and if they accept the — if they want to accept the benefits —

Byron R. White:

But what if they have (Inaudible) — your premise is the Union in this side agreement?

Guy Farmer:

You are talking about this particular —

Byron R. White:

No, I mean the parties to the contract, to the Union and the company?

Guy Farmer:

Normally agree to pay four dollars a month as a contribution towards this medical insurance.

Byron R. White:

Alright.

Guy Farmer:

And with the right to reduce it to two dollars.

Byron R. White:

Alright.

Guy Farmer:

The company did not — the company started to or acted as ever talked as if they were going to change that agreement, but they did not.

Byron R. White:

Oh let’s assume that the company comes along and just unilaterally increases its contributions for retired employees to five-dollars?

Guy Farmer:

Well, I think it definitely can do that.

Byron R. White:

Or the Union says that (Voice overlap)

Guy Farmer:

Not if it hurt the Union.

Byron R. White:

Well, that’s taking — there is less money available for active employees?

Guy Farmer:

Well, that’s a separate interest. Bargaining opens up a Pandora’s box, that I can’t see the into —

Byron R. White:

I am not talking about the bargaining part.

I am just asking you whether there is an existing remedy that the Union already has with respect to either increases or decreases?

Guy Farmer:

Well if the increase is a violation of that agreement, certainly they have a remedy.

The question in my own mind whether that would be a violation if I agree to pay you two-dollars and I voluntarily pay you four out of —

Byron R. White:

But if Union — but if the Union is right that it has a substantial interest in presenting increases of which to retired employees which would take money away from actives, then it is a breach of a contract?

Guy Farmer:

I agree, but I do not agree that the company had — that the Union has much of an interest in controlling what happens to people that is doesn’t represent.

The company might want to set up and would set up a retirement plan for supervisors who are represented by the Union and the Union might say well that money you should not do that because that money is money you could spend in retirement benefits for us, but certainly they have no right to require the company, thus negotiate with them about what they are going to do for the supervisors.

And perhaps I have not got your point, but I do not agree with the interest merely that the Union can represent and speak for exclusively people who were not, whom it does not represents or not in the bargaining unit because the company might in someway do something for those people that would take some money away from the Union that might otherwise go to Union.

That kind of an argument I think opens up a completely chaotic situation under which a Union could demand bargaining about anything and anybody at anytime.

Warren E. Burger:

If you read the Union’s claim here on the Board’s position as permitting the Union to have a strike issue if the Union made a demand for an increase in pensions of retired employees and that is refuses.

Guy Farmer:

No questions.

Warren E. Burger:

They can implement —

Guy Farmer:

If the Board decision is right, they could strike the force more benefits for retirees and even if they had no benefits, the people who retire without benefits of any kind presumably under this decisions of the Board the Union could demand that at the program of benefits be instituted for people who have retired since 1950 or whatever date and the company would have to negotiate that the Union did not like what the company did was willing to do they strike in all plants.

Byron R. White:

Mr. Farmer does this issue really go that far.

I thought it was limited to the question whether they are being an existing agreement, the Union has any right to insist on bargaining changes in an existing agreement?

Guy Farmer:

I do not believe if that is the Board’s position and I would say that if that were the position that the it would be pretty close to being correct.

In other words, if the company here did violate that agreement then it was under Board decisions that unilateral modifications of an agreement under Section 8 (b) of the Act, and therefore, it would be an unfair labor practice.

If — but that is not I understand the Board’s position.

The Board’s position is that regardless to that agreement that as a general universal rule, persons on retirement are covered by the mandatory bargaining obligation and the Union that happens to be representing the active employees which incidentally may never have represented these people, though you can have a change in representatives.

You may never — that Union has the right to demand mandatory bargaining for a people who have left the employ of the company and some there are some loose arrangements (Inaudible) time.

Warren E. Burger:

I did not read it as that type of claim, but I will ask counsel in rebuttal to clarify that.

My impression was that their claim was rather narrow that the company, the employer cannot unilaterally make any changes without negotiating, but we will see whether the claim that they on the Union side could initiate the claim for increased benefits and go on strike if they were denied?

Guy Farmer:

Yes, Your Honor —

Warren E. Burger:

That’d be a very important distinction, wouldn’t it?

Guy Farmer:

Yes and I would like to hear the answer too because as I understand it if claim is brought on that, that the Union represents these people, just as it does the active employees and they can initiate negotiations for retirees same as — and the active employees don’t have to wait until the company does something or initiate something, that this becomes a part of the Union’s representation rights and a part of the employer’s mandatory bargaining obligation.

This is the way they presented below and this is the basis on which the court below decided it and incidentally we could add I think very little to the analysis of the court below simply here repeating I think arguments that have already been made by the court below.

We think it covers the case in the most excellent fashion and there is very little that I can say.

Now, let me just say about the Oliver case.

Well, certainly they do try to get a lot of millage out of Oliver.

They are saying that — and Oliver of course was a case where the Union had a legitimate interest as this Court found in saying that it’s job — that their jobs as drivers were not eroded by phony arrangements made with driver-owners, and therefore the Union and the company made an agreement that the amounts paid to these owner-drivers would not be below a certain minimum, that was just to project the erosion of the jobs in that bargaining unit.

Those owner-drivers presented a direct threat to the jobs of these employee drivers and this Court so hell in that case.

Now to say that to these retirees who have no bargaining strings whatsoever who are not competing for jobs, they are not competing for wages that they present such as threat to these active employees who have the power to shut down this operation anytime to get their demands and say that these retirees threat them so much that the actives have to have control over their benefits, I think becomes almost absurd argument and I do not think that Oliver, it was intended to go that far at all.

In no case prior to this has a Board ever come to this Court or any other court, had made the argument that a Union has the exclusive right to represent people who are not in the bargaining unit and the Board it made sure that retirees are not in the bargaining unit.

In fact the Board has uniformly excluded them for all bargain units saying they do not have a community interest with the active employees and probably they are not employees at all.

They have excluded them.

They have excluded them here.

They have set up the Union of only active employees.

They do not include these people.

It seems to me that the one aspect to the Act, that is the Investor democracy aspect which I would like to discuss next.

Thank you.

Warren E. Burger:

Mr. Farmer you may continue.

Guy Farmer:

Thank you and may it please the Court.

No I think I will need all that time – 10 minutes of what would say.

I think that court as I said the court’s decision below in my opinion is sound and the sets forth the rationale which supports the decisions of the court below.

I would like to make just one or two points that I have not touched on.

The Board is arguing here today and I believe for the first time that bargaining unit does not control the scope of the bargaining.

It does not necessary control the scope of the bargaining.

This I think it is basic to this case and this is a change of position on the part of Board, the position it took in the court below.

In the Court below the Board conceded that the obligation to bargain is limited to bargaining unit and that position is supported by a long line, unbroken line of decisions by the Board itself and by the courts and is supported by the statute.

I did not cite Section 8 (b) (3) in the appendix to read.

Guy Farmer:

I didn’t cite 8 (a) (5) which says that the employer’s bargaining obligation is to bargain with the representative of his employees subject to Section 9 (a).

Section 8 (b) (3) says same thing with respect to Unions.

It says that a Union bargains subject to Section 9.

That as the Court said, the Second Circuit said in the one of the two ILA cases where the ILA tried to force a company or the shipping companies in New York to bargain for Longshoremen in Florida and other places which were not in the same bargaining unit a.

The Board went into court in that case and got an injunction against that strike and later held that it was a violation of the Act to try to force bargaining outside the bargain unit.

And in that case, I believe it judge friendly who said, Section 9 fixes the framework within which labor and management are required to bargain and the Court of Appeals here in the second ILA case under similar circumstances held the same thing.

It said that the extent of the bargaining obligation is determined by certification of the bargaining unit.

That is precisely what the Act itself says in Section 9.

Now, the Board would have to concede here that people who have retired permanently and no longer are employed or employment services are not in the bargaining unit.

The Board does not pay as I understand, in fact these people are in the bargaining unit, that they project here an entirely new argument that a Union can under certain circumstances not clearly defined demand bargaining for people who are not in the bargaining unit.

Warren E. Burger:

Mr. Farmer in your view would a Union honor a picket line consisting exclusively of the retired employees who were picketing for an increase in pensions?

Guy Farmer:

I think they very well might.

I know one Union at least that would and has consistently honored such — well a picket line by retired persons have been honored traditionally in the coal industry and I can’t ask elsewhere, but I know that to be a fact as far coal miners are concerned.

Now, it seems to me whether Congress designed the Act, designed it around the theory of industrial democracy and the employees in groupings that the Board would determine which are called bargaining units that they would select by a majority vote their representative and that representative would then represent all of them exclusively in that unit.

But by like token that representative was not intended to have any authority to represent anyone who was not in that unit for which it had been selected.

Now in this particular case the Board has certified the unit back in 1949 in which it excluded which it limited the unit to active working employees and not include those pensioners and then allowed them to vote.

But that is in accordance with the Board’s uniform policy which they followed in every case in which this issue has ever come up and they are saying today in their brief that they still would not allow retired people to vote or be a part of a bargaining unit.

They say that they do not have a community of interest with these active people sufficient to allow them to be in the same bargaining unit.

And yet inconsistently it seems to me they are still arguing that the bargaining unit representative is their exclusive representative so this is representation without any voice in the selection of the Union or provisions in the Act whereby a Union can be changed.

They have no voice in that.

They have no voice in this particular Union in ratifying agreements that are made.

Now, it may well be that Unions would not as a matter of fact just want to try to injure retirees.

I am not saying that they would but I am saying uncertainty the possibility exists.

We kind of expect that It could not happen that the active people say we want all his money in wages now and we do not want you giving any money to these people who have retired and they would have the right to strike to force that demand and an employer, a weak employer might very well give into it.

I think regardless of arguments about the right to fair representation and arguments that the unions are altruistic and all those things which they are, nevertheless the opportunity would still exist and we could not say and I do not believe anyone could say that it would not happen that a Union might under certain circumstances act to the determent of these people who have no economic strength of their own because they scattered all over, those 190 people in several different states and some are even in Yugoslavia today where they are obviously would not have any economic strength in this picture as the court below pointed out.

Warren E. Burger:

Is the federal (Inaudible) consideration for their having a bargaining representative of some kind?

Guy Farmer:

Well I think if they ever have one that it ought to be one they select themselves and of course the Board hasn’t answered that question, if they are a part of some bargaining set up.

Do they — must they only be represented by this Union that represents the actives?

Should they not be permitted to have their own Union to represent their own interest as the Board says they are not in common with the interest of the active employees.

These are questions that we have raised concerning the scope of this ruling and we have had no answer to those questions and I cannot say, but it would say to me logically that they should not be entitled, if they are going to be represented, they should be entitled to select their representative.

Guy Farmer:

I like to move now to the pint made by my brother Come that there is a, and by Union counsel that everybody is doing this.

Now that is not true because we have in this case amicus briefs filed by employer groups who say they are not doing it and they know others who are not doing it too.

I mean, bargaining for benefits for people after they retire, but they are saying, the argument is that because it’s asserted that a lot of people are permissively or voluntarily making arrangements for retirees that the Court should then say well this now becomes a mandatory obligation for everyone and the logic of that argument I must say escapes me and would certainly inhibit employers and unions from experimenting with new subjects of bargaining in new areas if then turned out to be a practice that was turned to practice and becomes the law.

Now, I would also like to point out that in this case which the Board sat on for two years before deciding what to do with it, there is not one iota of evidence as to what industry practice is in the record this case and all this is derived from self serving statements made by, amicus briefs on both sides.

Warren E. Burger:

Suppose Mr. Farmer that these 190 employees had managed in some way to get together and engage a lawyer and designate him as their bargaining representative as does the group for an active union, the effective Union.

Isn’t the real question whether there is an obligation of the employer to engage in bargaining on the — (Voice Overlap)

Guy Farmer:

Yes I say it is not because they are not employees.

They are not in any and in order to be whether it’s be a bargaining obligation, it runs between the employer and his employees and once they have retired permanently with no expectations of re-employment, requiring no services, receiving no salary which simply enjoying the fruits of what they negotiated while they were working that the bargaining obligation no longer exists.

Of course that is our position and that is what the court below held that there is no place in this structure for organizations of retirees who can force mandatory bargaining on the employer, who could come and picket his plant and shut it down even though the employees working there might have perfectly satisfactory arrangement as far as their concerned, but the retiree wants more, he wants more for himself so he bands together and forms a Union to come in and negotiate, but he does not have any understanding under the Act because under the Act as it is structured as the court below held that the bargain relationship exists in between the employer and his current employees.

Warren E. Burger:

If the employer arbitrarily cut the pension in half as the case, what in your view would be remedy if the employees would be limited to sue as third party beneficiaries of the contract previously made?

Guy Farmer:

I would say it would be limited to a suit for violation of the agreement which could be a class action or what we have here under Section 301.

Now they can when they are in active status they can negotiate these benefits, they can provide for their investing as here the pensions are invested in this company after 15 years.

Nobody can take those away from the ones they have invested and they have served the 15 years and then retired and if they were taken away or reduced they would have their remedy in court to protect their beneficial interests and there are many cases which so hold, but to say that they can come to the employer they have let’s say retired with $250 a month pension based on the pension plan in effect they come to him five years later and say we think this ought to be five hundred and we banded together and now we are going to picket you until you agree to pay.

I think this is outside the contemplation of the statute which is supposed to resolve of all ongoing issues between, in our industrial society, between employers and their current work force of employees.

And I think that every word in the Act and every decision up to now has been consistent with that interpretation of it and inconsistent with the view that a Union representing active employees can not only negotiate their benefits to take effect when they retire, but can reach out and renegotiate without limitation, not just once but any number of times the benefits that the employee retired with.

As I said earlier I do not think — I think that this creates a an unfair burden on employers to expose him to this risk indefinitely when he cannot got back and say alright I will have to adjust my price levels in order to pay those things retroactively.

Now the industrial practice is very spotty as I read the various amicus briefs.

There are some companies do negotiate these things with their Unions, some do not, some discuss them with them and work them out on an amicable basis but to say that the Act will be in effect amended by some kind of industrial practice I think is contrary to normal rules of the statutory interpretations.

Thank you.

Warren E. Burger:

Thank you Mr. Farmer.

Mr. Come, some points with questions I asked before lunch, but you do it your own time.

Norton J. Come:

Yes Your Honor, I think might as well start with that precise holding of the Board in this case that at pages 46 and 47 of the appendix and the Board reading down toward the middle there says “accordingly we find that by unilaterally modifying its medical insurance plan for retired employees respondent violated Section 8 (a) (5) and one of the Act.

Warren E. Burger:

Excuse me Mr. Come I do not find the page 46 —

Norton J. Come:

46, the last sentence of the first paragraph accordingly and then at the bottom of the next paragraph the Board says we hold only on the record this case that the respondent violated statute by making unilateral changes and then finding three on page 47 by instituting unilateral adjustments in the health insurance plan for its retired employees.

Now I think that is the factual setting of this case and a precise holding of the Board.

I think however that candor requires me to point out that although that is not this case that the logic of upholding that this is a mandatory subject of bargaining would mean that in a case where you did not have employer making a unilateral adjustment, but the Union proposes a change in the retiree benefits.

There would be —

William J. Brennan, Jr.:

In other words, you mean everything is going along fine but suddenly the Union comes in and the employer says we would like now to bargain and reopen the matter of pensions.

Of course the living is going up just be in place in this (Inaudible)

Norton J. Come:

Assuming —

William J. Brennan, Jr.:

The provision is that even in that case it’d be mandatory upon the company to sit down and bargain –?

Norton J. Come:

I think that is the logic of the Board’s holding here.

I do not think that is what it held on the facts of this case.

All that I say however pre supposes that under the contract will not preclude a reopening.

I mean, obviously if there is a contract in an effect that the —

William J. Brennan, Jr.:

What does this mean?

just ahead of what you referred us to at page 46 is a sentence, the general counsel does not contend nor do we find that was respondent was obligated to engage in midterm bargaining with the Union or with a proposal to negotiate amendments in the health insurance plan —

Norton J. Come:

I think what does means is, Your Honor is that as I pointed out in my facts, the contract here had two years I believe to go.

Byron R. White:

You mean the collective bargaining?

Norton J. Come:

The collective bargaining agreement.

Now under 8 (b) neither party is obliged to discuss reopening of the terms fixed, however, since the company agreed to reconsider the effects of Medicare, the matter, it did not effect waived its right to say no we are not going to talk about this while the contract is still on effect and at that point it became a bargainable matter.

Potter Stewart:

But the emphasis in that sentence should be on the phrase trade mid-term?

Norton J. Come:

That is correct.

Potter Stewart:

As you rightly say I think in answer to the basic question when the Board said that this is a violation of 8 (a) (5), it necessarily said that this is a subject of a mandatory collective bargaining.

Norton J. Come:

That is correct and of course the way the.

Potter Stewart:

(Voice Overlap) have been any unilateral change?

Norton J. Come:

That is correct but of course the way that the problem is most likely to arise is judged by the experience in the area is going to be in the context of your having negotiated a health and welfare or pension plan that is going to cover active employees and retirees.

And then as a result of unforeseen changes either the employer or the Union is going to bring up the question whether it’d be at the time that you negotiate a new contract or whether in the course of an old one that can be reopened, the question of adjusting to these unexpected, unforeseen changes and the questions and these adjustments are made today so that the question is should the employer although up to now as our data shows, he has been willing to bargain about it, should he be permitted to say that from here on I am going to do it unilaterally, that is what this case boils down to.

Now we are not seeking to —

Potter Stewart:

The legal principle here does not boils down that.

He can’t make any change unilaterally in a collective agreement that he has made without being sued for breach of the contract, for breach of that agreement.

It does not involve his right to make unilateral changes in an existing employee retired existing system of benefits retirees?

He obviously does not have that right without violating a contract.

Norton J. Come:

But there is nothing to prevent him however from improving those adjustments and those provisions and the question is, is it healthier for collective bargaining relationship plus the impact, including the impact on the active employees for these improvements to be negotiated as a result of the same kind of bilateral negotiations that went into formulating them to begin with or to permit the employer to make these changes unilaterally.

Potter Stewart:

Now I do not like (Inaudible) your submission of the question, but I do not think it is a matter of policy decision about whether or not it’s healthy or not and I do not think you really think so either, it’s a matter that law provides.

Norton J. Come:

That is correct, Your Honor.

Warren E. Burger:

Mr. Come —

Norton J. Come:

(Inaudible) Your Honor I just want to say without being overly argumentative that part of the reason in that governs whether you conclude that a subject is a mandatory subject of collective bargaining or not is whether or not it is likely to be a bone of contention between labor and management and that it makes for industrial peace rather than strike subjective to the collective bargaining processes of the Act and that is all that I meant by health Your Honor.

Warren E. Burger:

Let me see if I can explore how far this logical extension I think is what you can call it, the logic of the Board’s present position.

Assume a case where you have a hundred employees who have a vested interest in a pension of $200.00 a month by a contract negotiated when they were active employees and no provisions in the contract for cost of living or escalation or reopening increase.

Warren E. Burger:

The Union at the urging of the retirees demands a 25% increase in the pension or whatever arguments they want and the Union, either bargaining is refused or no agreement has reached call a valid strike on that issue?

Norton J. Come:

In the Board’s view Your Honor as I understand it, it could.

Whether it would or not of course —

Warren E. Burger:

(Inaudible) the only concern with whether —

Norton J. Come:

Yes.

Warren E. Burger:

Whether they can at certain they opens up a whole new area of industrial strike, doesn’t it?

Norton J. Come:

Well, I think that the same argument could have been made and was made by the employers in 1947 when they were protesting the extension of the ex-bargaining requirements, the bargaining over pensions and health and welfare benefits.

There is a whole history of what is a mandatory subject of bargaining has been an evolving one.

And things that today are routinely accepted as bargainable in 1935 or even in 1947 were looked at as being unheard of extension, but the concept does grow and we submit that this a reasonable extension of the holding in Inland Steel in 1947 that the whole matter of pensions and health and welfare matters are part of matter.

Byron R. White:

Mr. Come if the employer during the term of collective bargaining contract unilaterally lowers wages contrary to contract without bargaining, that certainly is a breach of contract, isn’t it, an unfair labor practice?

Norton J. Come:

Yes the Board would find that, that is a violation of 8 (d).

The.

Byron R. White:

8 (d)–?

Norton J. Come:

8 (d) says that you cannot make a modification.

Byron R. White:

Alright, but it is not an 8 (a) (5)?

Norton J. Come:

Well an 8 (a) (5) via 8 (d).

Byron R. White:

But now no other reason?

Norton J. Come:

No other reason.

Byron R. White:

And that is the remedy to restore it, isn’t it?

Norton J. Come:

Yes and —

Byron R. White:

That is the only remedy plus do not do it again?

Norton J. Come:

I believe that is right on that aspect oft the issue, thank you.

Warren E. Burger:

Thank You Mr. Come.

Thank you gentlemen.

The case is submitted.