First National Maintenance Corporation v. National Labor Relations Board

PETITIONER: First National Maintenance Corporation
RESPONDENT: National Labor Relations Board
LOCATION: Railroad tracks

DOCKET NO.: 80-544
DECIDED BY: Burger Court (1975-1981)
LOWER COURT: United States Court of Appeals for the Second Circuit

CITATION: 452 US 666 (1981)
ARGUED: Apr 21, 1981
DECIDED: Jun 22, 1981

ADVOCATES:
Norton J. Come - on behalf of the Respondent
Sanford E. Pollack - on behalf of the Petitioner

Facts of the case

Question

Media for First National Maintenance Corporation v. National Labor Relations Board

Audio Transcription for Oral Argument - April 21, 1981 in First National Maintenance Corporation v. National Labor Relations Board

Warren E. Burger:

We will hear arguments next in First National Maintenance Corporation v. the Labor Board.

Mr. Pollack, I think you may proceed whenever you're ready.

Sanford E. Pollack:

Thank you, Your Honor.

May it please the Court:

I have the privilege of representing First National Maintenance Corporation in an appeal which comes to you from the second circuit court.

The question presented for your determination is whether an employer's unilateral decision to terminate a losing portion of its operation solely for legitimate business reasons breaches the duty to bargain under Section 8(a)(5) of the National Labor Relations Act.

In this case, Your Honors, we are not dealing with anti-union motivation.

No animus is present.

Nor are we dealing with what has been stipulated and accepted as the mandatory nature of effects bargaining.

Nor are we dealing--

Potter Stewart:

Mandatory nature of what?

Sanford E. Pollack:

--Effects bargaining, Your Honor.

Nor are we dealing with subjects which may be unlawful under the Borg-Warner concept.

Stated another way, therefore, Your Honor, we are here to determine whether or not terminating a losing portion of its business for a legitimate business reason is either a mandatory subject of bargaining within the National Labor Relations Act or a permissive subject of bargaining within the National Labor Relations Act.

Harry A. Blackmun:

Mr. Pollack, was this a fairly large operation in New York?

Sanford E. Pollack:

No, Your Honor.

As the record indicates depending upon the time that you look at it, during the critical period the petitioner operated either two or four facilities.

We had some 17 months covered by the entire period of operation in the particular facility which is affected.

Thirty-five employees were employed in the Greenpark facility which is the particular facility in which operations were terminated.

Harry A. Blackmun:

Does the record show whether there is much turnover in this business as far as servicing customers is concerned?

Sanford E. Pollack:

No, Your Honor, the record does not show that.

The record does, however, show that there was no interchange between the various facilities serviced by First National.

First National, as Your Honors, I'm sure, are aware, was a service corporation which did cleaning and maintenance work in nursing homes and old age homes within the City of New York.

We have been fortunate in that we have had the benefit of two Supreme Court decisions in this area, one entitled Fibreboard, wherein the Supreme Court had the opportunity of affirming a decision of Mr. Chief Justice Burger who was then sitting in the circuit court, and in which Mr. Justice Stevens wrote a concurring opinion.

Thereafter, about one year later, this Court had an opportunity to examine the case in Darlington.

Darlington concerned a partial secession of operations and it arose under Section 3 of the National Labor Relations Act and not under Section 12.

I think it can be fairly stated that as we view the decisions of this Court in Fibreboard through its rationale in Darlington as interpreted by the majority of the circuits, and even, I might suggest, by the two circuits who came to different conclusions and by the National Labor Relations Board, which comes to a different conclusion at face, what seems to me to be apparent, that there evolves a concept of law which is really what I would suggest is the status of the law today.

And that is to require an employer to bargain about the matter which is within his entrepreneurial control would be in the permissive area as opposed to mandatory.

When there are replacements performing the affected work as part of an integrated work process who are still controlled by the original employer, then a change in that original work is a mandatory subject of bargaining.

I believe that when Fibreboard talked about subcontracting and subcontracting in terms of the employer still exercising control, and all that the employer did in Fibreboard was to replace one group of employees with another group of employees, that's what was meant: an employer replacing employees performing the affected work as part of the integrated work process, who are still controlled by the employer.