RESPONDENT: Truitt Mfg. Company
DOCKET NO.: 486
DECIDED BY: Warren Court (1955-1956)
LOWER COURT: United States Court of Appeals for the Fourth Circuit
ARGUED: Mar 29, 1956
DECIDED: May 07, 1956
Facts of the case
Media for National Labor Relations Board v. Truitt Mfg. Company
Audio Transcription for Oral Argument - March 29, 1956 in National Labor Relations Board v. Truitt Mfg. Company
Number 486, National Labor Relations Board versus Truitt Manufacturing Company.
David P. Findling:
May it please the Court.
This case which the Labor Board has brought here on certiorari to the Court of Appeals for the Fourth Circuit, presents the question whether the obligation to bargain collectively in good faith under Section 8 (a) (5) and 8 (d) of the National Labor Relations Act requires an employer who claims during bargaining negotiation that he can't afford to pay a wage increase asked by a union to furnish the union on request with pertinent information to support its claim of inability to pay.
The facts are virtually undisputed and the case arose in this context.
During wage negotiations starting in August 1953 pursuant to a wage reopening clause of the contract between Local 729 of the Ironworkers Union and the company.
The union asked for a wage increase of 10 cents (Inaudible)
The company rejected the request and offered two and a half cents, claiming in effect that it couldn't afford to pay more.
In that connection, the company's representatives express principally that they are already paying higher wage rates than most of their competitors in the area and that the company was already being underbid on certain jobs by some of its competitors, but the company also said that it was under capitalized, that it was operating under a financial strain, that its margin of profits in relation to cost in sales was low that it never paid any dividends, that it is just negotiated the bank loan for a new equipment and a new lot and that at least suggested that overhead was too high because of inefficient office and perhaps plant procedures.
After engaging in an unsuccessful strike for about a week in support of its wage demands and after the company had put into effect the two and a half cent increase that it has offered to the union, the union asked the company to furnish it with information as to the company's financial situation in support of its claim that it couldn't afford to pay more than two and a half cents.
While that request was put in different language from time to time, I think it's fair to sum it up as the union negotiator, summed it up with the Labor Board hearing when he said -- and I'm quoting now from pages 15 and 16 of the record, he said that, "The union wanted anything relating to the company's position, any records or what have you, books, accounting sheets, cost, expenditures, whatnot, anything to back the company's position that they're unable to give any more money."
The company offered to show that the wage rates that some of its competitors were paying and it also submitted some bid sheets, showing contracts that it had lost but otherwise it refused the union's request.
It didn't say that disclosure would be damaging to some legitimate business interest.
It didn't claim that the union's request was too broad or irrelevant to its claim of inability to pay nor did it suggest that the union's request was unreasonable in any other way.
And as a matter of fact the record we suggest that some of the data was readily available.
The company simply took the position in substance and again I'm quoting from its statement of position, “That final information concerning its affairs was confidential and not pertinent to the discussion, that such information was not a subject of -- a subject matter of bargaining or discussing with the union and that the union had no legal right to it."
The union pointed out that it wasn't claiming any legal right to bargain about the company's financial affairs, but said the information was necessary so that the men could decide whether they were to press their demand for the 10 cent increase.
And the union also said that the company's failure to supply the information created an insurmountable barrier to a successful conclusion of the bargaining.
The union representatives also said in substance that the men believed the company was making money and could afford to pay the 10 cents.
That it was hard for the men to see or understand the overhead and all that stuff as they put it.
That the union believed the company competed with other companies outside the immediate geographic area who were paying higher wage rates than the company, and who were nevertheless operating profitably.
And they said that if the company really wasn't making money, the men wanted to be shown some proof of it and that they simply couldn't take Mr. Truitt's word for it.
The company continued at its refusal to furnish the information, however, insisting as I say that the information was none of the union's business.
And so, there was -- there was no discussion of how much information, what kind of information or what form the information should take nor was there any discussion whether it would be satisfactory for the company to go through its records and submit the data to the union or to an accountant or whether the union was insisting that an accountant can come in and go over to the company's books and select the data that he thought was pertinent.
And so, instead of supplying the data, the company went ahead that Christmas and paid the men a bonus, a larger bonus than it had paid in several years.
And a little later on, on January 13th, it offered the union two and half cents more, conditional for 90 days.
An offer which it subsequently withdrew for which one of the union committeemen pointed out, emphasized the need for the information because if the company withdrew the -- the raise after 90 days, the men naturally would want to know why.
Now on these facts, the Board found that the company had failed to satisfy the collective bargaining requirements of the Act, reaffirming the position that it has consistently taken on this matter since it had first occasioned to discuss it.
Back in 1936, in Volume 1 of the N.L.R.B. reports, the Board held that the collective bargaining obligation to deal with the union in a good faith effort to compose differences and to reach a contract if possible, required the company -- required the company having faced its refusal of a wage increase on its inability to pay it, attempt on request by the union to substantiate its economic position by reasonable proof.
The Board, therefore, ordered the company to bargain collectively and on request to furnish the union and I'm quoting from this decision, "With such statistical and other information that would substantiate the company's position of inability to pay and would enable the union to discharge its functions as the statutory representative of the employees in the appropriate unit."