holding that a union’s information request was valid when it was tailored to the employer’s specific and repeated statements about its lack of competitiveness
How later courts described this case
- holding that a union’s information request was valid when it was tailored to the employer’s specific and repeated statements about its lack of competitiveness
- holding that “a union * * * does not have to accept the employer’s bald assertions or generalized figures at face value”
Written by the judges who cited it.
The opinion
United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 18, 2012 Decided December 4, 2012
No. 11-1280
KLB INDUSTRIES, INC., DOING BUSINESS AS NATIONAL
EXTRUSION AND MANUFACTURING CO.,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
INTERNATIONAL UNION, UNITED AUTOMOBILE, AEROSPACE
AND AGRICULTURAL IMPLEMENT WORKERS OF AMERICA,
UAW,
INTERVENOR
Consolidated with 11-1322
On Petition for Review and Cross-Application for
Enforcement
of an Order of the National Labor Relations Board
Kerry P. Hastings argued the cause and filed the briefs
for petitioner.
David Seid, Attorney, National Labor Relations Board,
argued the cause for respondent. With him on the brief were
2
John H. Ferguson, Associate General Counsel, Linda
Dreeben, Deputy Associate General Counsel, and Ruth E.
Burdick, Supervisory Attorney.
James B. Coppess argued the cause for intervenor. With
him on the brief were Michael Nicholson and William J.
Karges. Blair K. Simmons entered an appearance.
Before: HENDERSON, ROGERS, and TATEL, Circuit
Judges.
Opinion for the Court filed by Circuit Judge TATEL.
Dissenting opinion filed by Circuit Judge HENDERSON.
TATEL, Circuit Judge: Once again, we confront the issue
of how much information a company must provide to a union
during collective bargaining. Here, the company sought
substantial wage concessions on the basis of competitive
pressures it claimed to be facing. Seeking to verify this
contention, the union requested information about the
company’s prices and customers. The company denied the
union’s request and then locked out the bargaining unit
employees. Relying on a line of decisions endorsing a broad
discovery standard, the National Labor Relations Board found
that the union’s information request was relevant to its duties
as the employees’ bargaining representative and that the
company’s information withholding and lockout were both
unlawful. For the reasons given below, we deny the
company’s petition for review and grant the Board’s cross-
application for enforcement.
I.
Petitioner KLB Industries manufactures aluminum
extrusions at its Bellefontaine, Ohio, facility. Since taking
3
over the plant in 1997, KLB has signed three collective
bargaining agreements with its sixteen-member union. On
September 20, 2007, ten days before the third agreement
expired, the parties began negotiating a fourth agreement.
From the outset, KLB and the union took dramatically
different positions. The company’s position “centered around
competitiveness.” KLB Industries, 357 NLRB No. 8, 4 n.9
(July 26, 2011). Specifically, it claimed that it was facing
increased competition from Asian manufacturers, rising
production costs, and decreased productivity. KLB also
expressed concern about retaining customers. Based on these
claims, the company initially demanded substantial wage
concessions: a twenty percent reduction in the first year and
no changes the following two years. By contrast, the union
sought wage increases. Throughout late September, the
negotiations focused on wages and health insurance, and the
parties agreed to a day-to-day extension of the expiring
collective bargaining agreement.
On October 3, KLB notified the union that it would
terminate the collective bargaining agreement on October 7.
That same day the company made its last and final offer,
which included an eight percent wage reduction the first year
and two percent reductions in the second and third years. The
union countered with moderate wage increases. Even though
the federal mediator remarked that an impasse had been
reached, the parties continued negotiating.
The next day, on October 4, the union sent KLB a letter
requesting the following information: (1) a list of all current
customers; (2) a copy of all price quotes that the company had
provided over the past five years and an indication of which
of those quotes had been awarded; (3) a list of all projects
outsourced over the past five years that had been handled by
4
bargaining unit employees; (4) a list of all customers who had
ceased purchasing from KLB during the last five years; (5) a
complete list of prices for KLB’s products; (6) market studies
concerning the company’s products; and (7) a complete
calculation of KLB’s projected savings from its concessionary
wage proposal, including an estimate of overtime. The union
explained that it needed this information because, “[d]uring
the course of the[] negotiations, [KLB] has continually
asserted that they must improve the competitive position of
the Bellefontaine, Ohio facility.” According to the letter, the
union needed the requested information generally to verify
KLB’s competitiveness claim and the price information
specifically to “compare the prices of competitors.” Similarly,
the union requested the list of lost customers to “test the
Company’s assertion that they are not competitive.”
Throughout early and mid-October, the parties continued
negotiating and the wage issue remained a major sticking
point.
On October 18, KLB responded to the information
request, refusing to hand over information because its “desire
to remain competitive in both global and domestic markets is
no different from the desire of any business conducting
operations similar to [this company].” KLB nonetheless
disclosed estimated annual wage savings—one of the types of
information the union had sought—without providing its
underlying calculations or a prediction of overtime hours. The
next day, KLB informed the union that a lockout would begin
on October 22. KLB also informed the employees that their
health insurance benefits would expire and that they would
need to apply for COBRA benefits to continue receiving
health insurance. Shortly thereafter, on October 21, the union
responded to KLB’s information disclosure, stating that it was
insufficient to address the company’s proposed wage cuts.
5
As announced, KLB locked out unit employees on
October 22 and subsequently hired replacement workers. Two
incidents relevant to this case occurred during the lockout.
First, after KLB terminated the bargaining unit’s health
insurance, it discovered that the cancellation of the entire plan
meant that unit employees were ineligible for COBRA
benefits. Second, several months into the lockout, the
company called the police to report that union employees had
trespassed on company property when they placed picket
signs on a public right of way.
The union filed unfair labor charges against KLB and at a
hearing before an administrative law judge, the company
continued to press its competitive disadvantage argument. In
his opening statement, the company’s attorney explained that
“KLB was faced, in the 2007 negotiations, with business
conditions it had not faced in previous years. KLB faced
increased competition from Asia.” The attorney also stated
that the company “had suffered a customer setback that ended
up costing it approximately a million dollars.” To support
these claims, KLB introduced into evidence a “Top 20
Customer Sales” chart detailing the past three years of sales.
The ALJ found that the reasons offered by KLB at the hearing
mirrored those offered at the negotiating table.
The ALJ concluded that because KLB had invoked
competitive pressures as its key rationale in seeking wage
concessions, the union was entitled to the requested
information to verify those assertions. Rejecting the
company’s alternative arguments that its wage information
disclosure was sufficient and that the union had requested
information in bad faith, the ALJ concluded that the
company’s information withholding violated sections 8(a)(1)
and (5) of the National Labor Relations Act. 29 U.S.C.
§§ 158(a)(1) & (5). The ALJ also found that the lockout and
6
cancellation of health insurance violated sections 8(a)(1), (3),
and (5). The ALJ, however, dismissed the union’s allegation
that the company had engaged in so-called surface
bargaining—that it had bargained in bad faith. Finally, the
ALJ found that the company had committed an unfair labor
practice by calling the police in retaliation for the union’s
legal picketing. The Board, with one member dissenting,
adopted the ALJ’s factual findings, legal reasoning, and
proposed order. The dissenting member disagreed with the
Board’s disclosure ruling and its conclusion that the lockout
was unlawful, but agreed that KLB’s cancellation of
employees’ health insurance violated section 8(a)(5).
KLB now petitions for review, challenging the Board’s
rulings on the disclosure issue, the lockout, and the health
insurance cancellation. The Board moves for enforcement of
its finding that KLB’s call to the police violated the Act. “We
must uphold the Board’s decisions unless upon reviewing the
record as a whole, we conclude that the Board’s findings are
not supported by substantial evidence or that the Board acted
arbitrarily or otherwise erred in applying established law to
the facts of the case.” Pacific Micronesia Corp. v. NLRB, 219
F.3d 661, 665 (D.C. Cir. 2000) (internal quotation marks
omitted). We accord “due deference to the reasonable
inferences that the Board draws from the evidence, regardless
of whether the court might have reached a different
conclusion de novo.” U.S. Testing Co. v. NLRB, 160 F.3d 14,
19 (D.C. Cir. 1998) (internal citation omitted).
II.
The core dispute in this case is whether the company’s
competitive disadvantage claim triggered an obligation to
respond to the union’s targeted request for information about
customers and products. Our starting point is the Supreme
Court’s decision in NLRB v. Truitt Manufacturing Co., 351
7
U.S. 149 (1956), where an employer claimed that it could not
afford to pay higher wages but refused the union’s request to
supply information to verify that claim. The Court held that a
“refusal to attempt to substantiate a claim of inability to pay
increased wages may support a finding of a failure to bargain
in good faith.” Id. at 153. If an “argument is important enough
to present in the give and take of bargaining,” the Court
reasoned, “it is important enough to require some sort of
proof of its accuracy.” Id. at 152–53. In so ruling, however,
the Court carefully acknowledged the limits of its decision:
We do not hold . . . 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. The
inquiry must always be whether or not under the
circumstances of the particular case the statutory
obligation to bargain in good faith has been met.
Id. at 153–54 (footnote omitted). Truitt thus stands for the
proposition that failure to disclose relevant information can
amount to an unfair labor practice under certain
circumstances.
Following Truitt, the Board developed two lines of cases
that apply the Court’s fact-intensive standard. The parties
disagree about which line of precedents controls this case.
The first requires an employer to “open its books” to the
union if it “pleads poverty” or raises an “inability to pay”
defense during collective bargaining negotiations. Until 1991,
the Board treated “a plea of competitive disadvantage [as] the
functional equivalent of a statement of inability to pay.”
United Steelworkers of America v. NLRB, 983 F.2d 240, 244
(D.C. Cir. 1993). But prompted by a series of Seventh Circuit
8
decisions, the Board changed course. See, e.g., NLRB v.
Harvstone Manufacturing Corp., 785 F.2d 570 (7th Cir.
1986). In Nielsen Lithographing Co., 305 NLRB 697 (1991),
the Board expressly rejected its prior approach of treating
competitive disadvantage claims as automatically triggering a
broad disclosure obligation. Under Nielsen, “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.” Id. at 700. In other words, a
company’s obligation to open its books is triggered when it
claims an inability to pay, not when it is unwilling to pay.
Furthermore, an employer’s disclosure obligation under
Nielsen is quite broad: a union is entitled to records sufficient
to conduct a full financial audit. Employers that plead poverty
must turn over “detailed financial information” such as
“financial statements and tax returns for the past three years,
the projected balance sheets and income statements . . .
submitted to banks to obtain loans, and information
concerning the salaries and perquisites of the company’s
managerial employees.” Graphic Communications
International Union v. NLRB, 977 F.2d 1168, 1169 (7th Cir.
1992).
We addressed the Board’s Nielsen standard in ConAgra,
Inc. v. NLRB, 117 F.3d 1435 (D.C. Cir. 1997). There, the
employer conceded that it could afford to continue paying
above-market wages, but insisted that competitive pressures
required a wage reduction. Although the employer turned
over information concerning its wages and pension plan, it
refused to provide “financial statements, an additional two
years’ worth of information on sales to competitors, or any
information regarding [the parent company’s subsidiaries].”
Id. at 1438. Ruling that the employer’s competitiveness claim
constituted a “plea of poverty,” the Board found that the
9
company’s refusal to furnish the requested information
amounted to an unfair labor practice. We disagreed, stating
that the Board’s decision “represented an unacknowledged
and unexplained departure” from Nielsen. Id. at 1436. Given
the Board’s previous change of position in Nielsen, we
signaled that we would henceforth carefully scrutinize a
finding that a company had pled poverty.
Running parallel to the Nielsen line of cases, a series of
“discovery” decisions also applies Truitt’s holding that
information withholding can constitute an unfair labor
practice. These cases start with the premise that collective
bargaining “includes a duty to provide relevant information
needed by a labor union for the proper performance of its
duties as the employees’ bargaining representative.” Detroit
Edison Co. v. NLRB, 440 U.S. 301, 303 (1979). This Court,
moreover, has “long adhered to the view that the Board is to
apply a liberal discovery-type standard, under which the
requested information need only be relevant to the union in its
negotiations.” U.S. Testing Co., 160 F.3d at 19. “Relevance is
broadly construed, and in the absence of a countervailing
interest, any requested information that has a bearing on the
bargaining process must be disclosed.” Id. Relevance is
presumed if the information concerns the bargaining unit. But
“the burden is on the union to demonstrate the relevance of
information about nonunion employees.” Id.
Significantly for the issue before us, the Board has
applied its discovery line of cases to an employer’s
competitive disadvantage claim. For example, in Caldwell
Manufacturing Co., 346 NLRB 1159 (2006), the Board found
that a company committed an unfair labor practice when it
refused to turn over requested information concerning
“material costs, labor costs, manufacturing overhead,
productivity calculations, competitor data, and data on
10
possible new production.” Id. at 1159 n.3. The Board
observed that the union’s “requests were made directly in
response to specific factual assertions made by the [company]
in the course of bargaining.” Id. at 1160. Given this, the union
was entitled to “request[] information to evaluate and verify
the [company’s] assertions and develop its own bargaining
positions.” Id. Distinguishing Nielsen and its progeny, the
Board emphasized that the union did not seek “general access
to the [company’s] financial records,” such as “the
[company’s] profits, net income, tax returns, salary
information, or administrative expenses.” Id. Rather, the
union’s information request in Caldwell Manufacturing was
appropriate because it was tailored to the company’s factual
assertions. See also A-1 Door and Building Solutions, 356
NLRB No. 76, 4–5 (Jan. 11, 2011).
We distill these two lines of cases as follows. On the one
hand, Nielsen stands for the proposition that a company
pleading poverty must open its books for a full financial
audit—a disclosure obligation that extends to a plethora of
financial information. But as Nielsen also makes clear, a
competitive disadvantage claim is insufficient, by itself, to
obligate a company to open its books. On the other hand, the
Board’s discovery line of cases endorses a relevancy-based,
pro-disclosure standard that allows a union to request specific
information to verify a company’s stated position, including
competitiveness claims.
With these principles in mind, we turn to the Board’s
decision in this case. The Board found that KLB “repeatedly
sought to justify its demands by stating that concessions were
necessary to make its facility more competitive.” KLB
Industries, 357 NLRB No. 8, at 1. Undertaking a thorough
explanation of the relevant precedents concerning when an
employer is required to disclose information to a union and
11
analogizing this case to Caldwell Manufacturing, the Board
evaluated the dispute under its discovery line of cases. The
Board explained that by relying on competitive pressures as a
justification for wage concessions, the company had made the
veracity of that claim relevant to the negotiations.
Accordingly, the union was entitled to the requested
information to verify the company’s assertions. As the Board
pointed out, the Top 20 Customer Sales chart could have
proven useful to the union in its effort to evaluate the
competitive pressures facing KLB. Addressing the Nielsen
line of cases, the Board concluded that “[t]his is not an
inability-to-pay case,” id. at 3, meaning that KLB had no
obligation to open its books for a full financial audit.
Responding to the dissenting member’s argument that Nielsen
controls, the Board explained that nothing in Nielsen implies
that “a union faced with something less than an inability-to-
pay claim is not entitled to any information.” Id. Thus,
harmonizing the two lines of cases, the Board concluded that
“an information request . . . is not an all-or-nothing
proposition.” Id.
Challenging the Board’s reasoning, KLB’s central claim
is that a “generalized competitiveness claim is insufficient to
make the information at issue . . . relevant.” Pet’r’s Br. 14.
According to KLB and our dissenting colleague, dissenting
op. at 13–15, competitive disadvantage claims have a
talismanic quality that requires the application of Nielsen’s
framework. Given the Board’s concession that this is not an
inability-to-pay case, the company’s argument goes, it has no
disclosure obligation.
KLB’s position ignores the Board’s careful approach to
its own precedent. Unlike in ConAgra, the Board
distinguished Nielsen and justified its decision under the
discovery line of cases. As found by the ALJ and affirmed by
12
the Board, record evidence establishes that KLB relied
primarily on a competitiveness rationale in seeking substantial
wage concessions. The union targeted its information request
to that competitiveness claim and did not ask the company to
open its books and provide generalized financial data
concerning profits and management expenses. Thus, the
union’s information request and the company’s concomitant
disclosure obligation were narrow.
Nor does KLB offer a persuasive explanation for why a
competitive disadvantage claim should be immunized from
the Board’s “liberal discovery-type standard, under which the
requested information need only be relevant to the union in its
negotiations.” U.S. Testing Co., 160 F.3d at 19. It is true, as
KLB emphasizes, that in a globalized economy the specter of
competition haunts every company. But where, as here, an
employer raises a competitiveness claim as its central
justification for wage concessions, a union is entitled to
information verifying that claim. Indeed, “a claim of pending
competitive ruin generally requires some external verification
before a union can reasonably rely upon it in deciding how to
structure its negotiating strategy.” ConAgra, 117 F.3d at 1449
(Wald, J., concurring). We therefore agree with the Board that
Caldwell Manufacturing provides the appropriate framework
for this case.
KLB alternatively argues that its competitiveness claim
lacked the requisite specificity to trigger a disclosure
obligation. The company points to language in Caldwell
Manufacturing indicating that the employer there took the
position during negotiations that its other facilities were more
competitive. But KLB’s competitiveness claim was also
specific. The Board found that the company had made “grave,
specific, and recurring assertions of [its] lack of
competitiveness.” KLB Industries, 357 NLRB No. 8, at 4. The
13
Board highlighted KLB’s reliance on Asian competitors,
rising production costs, and declining productivity. Although
the company asserts, and the dissent agrees, dissenting op. at
9–13, that it made these claims at the administrative hearing
rather than at the bargaining table, its representative testified
that these concerns were relayed to the union during
negotiations. Indeed, the testimony the dissent cites supports
the Board’s conclusion. KLB’s negotiator testified that the
company informed the union during negotiations that it
needed to “stay competitive” because it was “competing with
the Asian firms” and because “costs per hour, per production
hour had risen, and . . . production, itself, had actually
dropped a little.” Thus, substantial record evidence supports
the ALJ’s finding that the issues raised at the administrative
hearing were the same issues discussed at the bargaining
table. See KLB Industries, 357 NLRB No. 8, at 4 n.9 (Board
rejecting an identical argument and explaining that “the
record makes clear that the [company] communicated these
concerns not only at the hearing, but during negotiations as
well”); id. at 50 (ALJ commenting that the company “defined
or explained [its competitiveness claim] in a variety of ways”
and finding that the reasons offered at the hearing mirrored
those given at the bargaining table). See also Pacific
Micronesia Corp., 219 F.3d at 665 (explaining that the Board
must “present on the record such relevant evidence as a
reasonable mind might accept as adequate to support [its]
conclusion” (internal quotation marks omitted)).
Moreover, and contrary to the dissent, dissenting op. at 8,
the Board reasonably concluded that the company’s
competitive disadvantage claims could have been
substantiated by examining price quotes, lost customers, and
marketing strategies. As noted by the Board and invoked by
union counsel at oral argument, the Top 20 Customer Sales
chart could have demonstrated that KLB acquired a new
14
customer worth $1 million in revenue in 2006 only to lose
that customer in 2007. Similarly, a list of prices could have
helped the union with accomplishing its stated goal of
“compar[ing] the prices of competitors.” Not only was this
information relevant to whether KLB faced an increasingly
competitive business atmosphere, but the union’s
contemporaneously proffered reason for needing the
information—double-checking the company’s
competitiveness claim—satisfies the “minimum standard of
relevance” established by our precedent. New York and
Presbyterian Hospital v. NLRB, 649 F.3d 723, 729 (D.C. Cir.
2011).
Of course, the specific information necessary to verify a
competitiveness claim will vary depending on the
circumstances of the case. By adopting a contextualized
approach, Caldwell Manufacturing and its progeny are
faithful to Truitt’s mandate that “[e]ach case must turn upon
its particular facts.” Truitt, 351 U.S. at 153. To the extent
KLB now contends the dividing line between Nielsen’s “open
your books” disclosure obligation and the instant information
request is arbitrary and capricious, that argument is waived
because it first appeared in the company’s reply brief. See
Lake Carriers’ Association v. EPA, 652 F.3d 1, 10 n.9 (D.C.
Cir. 2011) (noting that “arguments not raised until the reply
brief are waived”).
To be clear, we are sensitive to the risk that the Caldwell
Manufacturing line of cases could become an end-run around
Nielsen. But this case does not implicate that concern. Before
this Court, KLB has pursued an all-or-nothing litigation
strategy to disclosure. Relying on Nielsen, it argues that it had
no disclosure obligation because it never pleaded poverty, and
relying on Caldwell Manufacturing, it argues that its
competitiveness claim was insufficiently specific to trigger a
15
disclosure obligation. As explained above, neither argument
has merit. And critically for our purposes, the company does
not argue here that even if it had a disclosure obligation, the
union’s information request was irrelevant. Given this, we
have no need to demarcate the outer limits of the Board’s
discovery line of cases.
KLB makes two subsidiary arguments. First, it claims
that it provided an adequate cost savings report for its wage
concessionary plan. Recall that the union requested that KLB
provide an estimate—with underlying calculations and
overtime hours—of how much money its wage concessionary
plan would save. Although the company provided annualized
savings estimates, it failed to include the underlying
calculations and the predicted overtime. Because a union is
“entitled to inspect the data relied on by an employer and does
not have to accept the employer’s bald assertions or
generalized figures at face value,” E.I. Du Pont de Nemours
& Co. v. NLRB, 489 F.3d 1310, 1316 (D.C. Cir. 2007), KLB’s
argument is meritless.
Second, the company argues that the union made its
information request in bad faith. According to KLB, the
timing of the union’s request—the day after the federal
mediator’s offhand remark about an impasse—reveals its
pretextual nature. KLB further complains that the union made
no mention of the information request until after the
announcement of the lockout. But the federal mediator—not
the company’s representative—made the impasse remark, and
the parties continued negotiating after that remark and after
the union’s information request. Moreover, the company only
responded to the information request the day before the
lockout announcement, which explains why the union
remained silent for so long. Given this chronology and the
importance of the wage issue to the negotiations, the Board
16
properly found that KLB failed to rebut the presumption of
good faith bargaining. See DaimlerChrysler Corp. v. NLRB,
288 F.3d 434, 443 (D.C. Cir. 2002) (“The Board presumes
that requests for presumptively relevant information are made
in good faith, until the company demonstrates otherwise.”).
III.
Having resolved the information withholding issue, we
can quickly dispose of KLB’s remaining arguments.
The company makes several interrelated contentions
concerning the lawfulness of the lockout. We reject its first
claim—that the information withholding was lawful and
therefore the lockout was lawful—for the reasons stated
above. KLB next asserts that the lockout was lawful because
the Board dismissed the surface bargaining allegation. The
company misinterprets the Board’s reasoning. The
information withholding made the lockout unlawful
notwithstanding KLB’s otherwise good faith bargaining.
Thus, the Board’s dismissal of the surface bargaining
allegation is irrelevant. KLB claims that the Board failed to
expressly find that the information withholding—and not
another issue, like the health insurance dispute—materially
affected the progress of the negotiations. The Board, however,
adequately explained the nexus between the wage dispute and
the information request:
[The] proposed concessions were the central point of
disagreement during negotiations . . . . The Union’s
information request was designed to enable the
Union to evaluate and respond to that proposal.
Absent the Union’s willingness to buy “a pig in a
poke,” that information was therefore critical to the
bargaining and the possibility of the parties’ reaching
an agreement . . . .
17
KLB Industries, 357 NLRB No. 8, at 6. Thus, contrary to the
dissent, dissenting op. at 17–18, the Board did address
whether the unlawful information withholding had a material
effect on the progress of the negotiations.
Finally, given our conclusion that the lockout was
unlawful, we have no need to discuss KLB’s contention
regarding the health insurance cancellation.
IV.
The Board seeks enforcement of its finding that KLB
unlawfully responded to the union’s picketing by calling the
police. Because the company failed to file exceptions to this
finding, it is jurisdictionally barred from obtaining review in
this Court. See 29 U.S.C. § 160(e) (“No objection that has not
been urged before the Board, its member, agent, or agency,
shall be considered by the court, unless the failure or neglect
to urge such objection shall be excused because of
extraordinary circumstances.”).
We deny KLB’s petition for review and grant the Board’s
cross-application for enforcement of its Order.
So ordered.
KAREN LECRAFT HENDERSON, Circuit Judge, dissenting
in part:
I respectfully dissent from Parts II and III of the majority
opinion because, in my view, KLB Industries’ (KLB)
generalized statements regarding competitiveness did not give
rise to a duty of further disclosure to the International Union,
United Automobile, Aerospace and Agricultural Implement
Workers of America, UAW (Union), nor did KLB unlawfully
impose the subsequent lock out of its bargaining unit
employees.
I.
KLB produces aluminum extrusions at its Bellefontaine,
Ohio facility. KLB began negotiating with the Union for a
new collective bargaining agreement (CBA) in September
2007.1 KLB sought wage cuts and other concessions in order
to improve its competitive position. On October 3, the parties
met with a federal mediator. After KLB told the mediator that
its current offer was its “last, best and final offer,” the
mediator stated “I guess we’re at impasse then,” to which the
Union’s representative demurred. KLB Indus., Inc., 357
N.L.R.B. No. 8, at 24 (July 26, 2011). The next day, the
Union sent KLB a letter requesting, among other things,
information on KLB’s proposal for “wage reductions.” The
Union wrote:
During the course of these negotiations, the
Company has continually asserted that they [sic]
must improve the competitive position of the
1
All dates are in 2007 unless otherwise noted.
2
Bellefontaine, Ohio facility. Based on this assertion,
the Company has made numerous contract proposals
that reduce the wages and benefits. In order for the
Union to determine the veracity of these claims,
please provide the following information:
1. A list of all current customers so that
the Union may contact the customers to
determine if any of them is
contemplating purchasing products
from other sources.
2. A copy of any and all quotes that the
Company has provided, and whom
these quotes have been issued to. Also,
how many quotes have been awarded
(or not awarded) in the past five (5)
years.
3. Identify any and all outsourced work
(in the past 5 years) that had previously
been done at this facility by the
bargaining unit employees.2
4. A list of all customers who have ceased
buying from this facility during the last
2
The 16-member bargaining unit was composed of “[a]ll
hourly-paid production and maintenance employees in [KLB’s]
Bellefontaine, Ohio, plant but excluding all office and clerical
employees, guards, professional employees and all supervisors.”
KLB Indus., 357 N.L.R.B. No. 8, at 13 n.2.
3
5 years. The union needs this
information to test the Company’s
assertion that they [sic] are not
competitive. The union intends on
contacting the former customers to
learn the reasons why they stopped
purchasing.
5. A complete list of prices for products
so that the union can compare the
prices of competitors.
6. In order for the Union to determine
whether the company’s assertion of
uncompetitivness [sic] is based on price
or other factors. Please provide market
studies and/or marketing plans that
would impact sales of products
produced at of [sic] the KLB Industries,
Bellefontaine, Ohio facility.
Deferred Appendix (DA) 357-58 (hereinafter referred to as
“Competitive Information”). The Union also requested “a
complete calculation of the projected company savings over
the next three years, including any projected overtime”
resulting from KLB’s wage proposal. DA 358. The parties
continued to negotiate but KLB did not provide the
Competitive Information to the Union. On October 18, KLB
wrote to the Union, explaining that the Competitive
Information was irrelevant:
The Company disagrees that information you
requested about its current customers is necessary
and relevant . . . . The Company’s desire to remain
competitive in both global and domestic markets is
no different from the desire of any business
4
conducting operations similar to those of KLB. . . .
[T]he UAW’s bare assertion that it needs to test the
veracity of KLB’s “claim” of competitiveness is
insufficient to make customer information necessary
and relevant to the Union’s role as the exclusive
representative of the bargaining unit.
The Company also disagrees that information about
outsourced work is necessary and relevant to the
UAW’s representation of the bargaining unit. The
UAW is well aware that KLB has, and continues to,
outsource work. To KLB’s knowledge, the Union
has never complained about or grieved outsourcing.
Further, the Company and the Union have not had
any bargaining discussions related to outsourcing.
The Company fails to understand how its broad
statement of remaining competitive in global and
domestic markets triggers the necessity and
relevancy of outsourcing information.
The Company, however, agrees that the wage cost
saving is necessary and relevant. The first year
saving[s] is $36,177.00. The second year savings is
$44,498.00. The third year savings $62,652.00 [sic].
And the overall cost savings of the proposed wage
decrease is $133,327.00.
DA 387. Three days later, the Union responded. Rather than
explaining the relevance of its request for the Competitive
Information, it simply repeated:
The Union maintains that it is entitled to all
documents and information called for in our October
4, 2007 letter and, again, the Company has failed
miserable [sic] to supply essential information
5
regarding the Company’s proposals to [sic] wage
reductions to the Union.
DA 393. The Union also complained that the wage cost
savings information did not include “complete calculations.”
DA 393. On October 19, KLB told the Union representative
that a lockout would commence on October 22. KLB also sent
letters to bargaining unit employees stating that insurance
benefits would terminate on October 23 and that they should
apply for continuation coverage, if desired, under the
Consolidated Omnibus Budget Reconciliation Act of 1985, 29
U.S.C. §§ 1161 et seq. (COBRA). On October 22, KLB
locked out the bargaining unit employees and began hiring
temporary replacements. On October 24, KLB notified United
Healthcare, its insurance provider, to cancel its group
insurance policy. Unbeknownst to KLB, the cancellation
meant that bargaining unit employees were not eligible for the
COBRA continuation coverage. While the parties met
thereafter on three other occasions, they did not come to an
agreement on a new CBA.
Ultimately, the Union filed unfair labor practice charges3
against KLB. After a hearing before an administrative law
judge (ALJ), the ALJ found that KLB had violated the NLRA
by (1) failing to provide relevant information to the Union;
3
The unfair labor practices involved “bargaining violations, an
unlawful lockout, . . . a unilateral change in terms and conditions
related to the cessation of health benefits after the lockout
commenced . . . [and] an allegation that the employer ‘restrained
and coerced’ employees in the exercise of their Section 7 rights.”
KLB Indus., Inc., 357 N.L.R.B. No. 8, at 60.
6
and (2) locking out employees, hiring temporary replacements
and cancelling health insurance.4 On July 26, 2011, the Board
affirmed the ALJ’s decision and reasoning in full, with
Member Hayes dissenting on the grounds that KLB was under
no obligation to provide the Competitive Information to the
Union and that the lockout/hiring of temporary replacements
was lawful. The Board found, inter alia, that KLB had
violated section 8(a)(5) and (1) of the Act by failing to
provide the Union relevant information and section 8(a)(5),
(3) and (1) by locking out employees, hiring temporary
replacements and cancelling its employees’ health insurance
coverage.
II.
Applying clear precedent, I believe the Board incorrectly
concluded that KLB violated section 8(a)(1) and (5) of the
National Labor Relations Act, 29 U.S.C. § 158(a)(1) & (5)
(NLRA or Act), by declining to produce the Competitive
Information. Under section 8(a)(5), the employer has a “duty
to bargain collectively,” Detroit Edison Co. v. NLRB, 440
U.S. 301, 303 (1979), which requires it to provide relevant
information to the union when requested. See N.Y. &
Presbyterian Hosp. v. NLRB, 649 F.3d 723, 729 (D.C. Cir.
2011). Information about bargaining unit terms and conditions
of employment is presumptively relevant. See id. at 730. But
where, as here, the union requests information regarding a
different matter, it has the burden to “explain to the employer
4
The ALJ found, and KLB did not contest, the unfair labor
practice resulting from its summoning the police to retaliate for the
Union’s picketing.
7
why the information is relevant.” Id. The “threshold for
relevance” is a “discovery-type standard,” meaning “‘[t]he
fact that the information is of probable or potential relevance
is sufficient to give rise to an obligation . . . to provide it.’”
Id. (quoting Oil, Chem. & Atomic Workers Local Union No.
6-418 v. NLRB, 711 F.2d 348, 359 (D.C. Cir. 1983)) (internal
quotation mark omitted and alterations in original). In
determining whether the union has satisfied its burden to
show relevance, we have held that “‘context is everything,’”
and, most important here, “we consider the reasons [for
relevance] proffered by the union at the time of its request.”
Id. at 731 (quoting U.S. Testing Co. v. NLRB, 160 F.3d 14, 19
(D.C. Cir. 1998)).
While the “threshold for relevance” is low, it is not zero.
“‘A union’s bare assertion that it needs information . . . does
not automatically oblige the employer to supply all the
information in the manner requested.’” Id. at 730 (quoting
Detroit Edison, 440 U.S. at 314)) (ellipses in original). An
employer must supply information to substantiate specific
assertions on which it premises its bargaining positions
because the information is necessary to the Union to “evaluate
and verify the [employer’s] assertions and develop its own
bargaining positions.” Caldwell Mfg. Co., 346 N.L.R.B. 1159,
1160 (2006); see also Lakeland Bus Lines v. NLRB, 347 F.3d
955, 960 (D.C. Cir. 2003) (“Th[e] obligation to bargain in
good faith requires that employers and unions exchange
relevant information when necessary to substantiate
assertions made during collective bargaining.”) (emphases
added). At the same time, the employer has no obligation to
disclose information merely because it makes a generalized
statement during negotiations. See F.A. Bartlett Tree Expert
Co., 316 N.L.R.B. 1312, 1313 (1995) (employer’s reference
to fact that customer contracts varied did not obligate
employer to furnish contracts to union for examination).
8
An employer must provide general financial information
to a union if the employer predicates its bargaining position
on an “inability to pay.” See NLRB v. Truitt Mfg. Co., 351
U.S. 149, 152-53 (1956). For a time, the Board also applied
this formulation to an employer that asserted competitive
disadvantage, treating the assertion as the equivalent of an
inability to pay claim. ConAgra, Inc. v. NLRB, 117 F.3d 1435,
1439 (D.C. Cir. 1997). As discussed in ConAgra, however,
the Seventh Circuit first registered its disagreement with the
Board’s formulation in 1986. In NLRB v. Harvstone Mfg.
Corp., 785 F.2d 570 (7th Cir. 1986), that Circuit declared that
claims of competitive disadvantage are “nothing more than
truisms” and do not equate to an inability to pay. Id. at 576-
77. Instead, a competitive disadvantage claim manifests only
that the employer is not willing to pay—which, unlike an
inability-to-pay claim, is not a verifiable assertion—and
consequently does not require substantiation. See id. at 577
(“[T]he employer operating at a competitive disadvantage is
financially able, although perhaps unwilling, to pay increased
wages.”); see also Lakeland Bus Lines, 347 F.3d at 961 (“a
mere unwillingness to pay . . . does not [trigger a duty to
disclose]”); United Steelworkers of Am., Local Union 14534
v. NLRB, 983 F.2d 240, 244 (D.C. Cir. 1993) (“A company is
obliged to provide financial information only when it asserts
an inability to pay, because this assertion is legitimately
subject to verification.”). The Board eventually agreed,
concluding in Nielsen Lithographing Co. that a “claim of
competitive disadvantage is not the same as a claim of
financial inability to pay” and therefore does “not trigger an
obligation to furnish financial information under Truitt.” 305
N.L.R.B. 697, 699, 701 (1991).
“We review the Board’s factual conclusions for
substantial evidence” and “uphold the Board’s application of
law to facts unless arbitrary or otherwise erroneous.” N.Y. &
9
Presbyterian Hosp., 649 F.3d at 729 (quoting Guard Publ’g
Co. v. NLRB, 571 F.3d 53, 58 (D.C. Cir. 2009)) (internal
quotation marks omitted). Here, however, the Board wholly
failed the substantial evidence test. It concluded that KLB
made “grave, specific, and recurring” representations about
competitiveness, which “encompassed not only the source of
competitive difficulties (rising production costs and falling
production), but the day-to-day impact of those constraints on
the company’s business, including its difficulty in retaining
customers and in paying employees in line with previous
contracts.” KLB Indus., Inc., 357 N.L.R.B. No. 8, at 4. The
Board also declared that KLB had “explicit concerns about
retaining customers and keeping pace with Asian
competitors” and that KLB’s concerns were communicated
“not only at the hearing, but during negotiations as well.” Id.
n.9 (emphasis added). Unless I have read a different version
of the Board decision, the Board nowhere pointed to any
evidence that matches its overblown description of KLB’s
negotiating posture.5
Simply put, the record does not support the Board’s
characterization of the parties’ bargaining. As Member Hayes
explained in dissent, the only record evidence regarding
KLB’s “elaboration” of its competitive disadvantage assertion
is as follows:
5
KLB’s post-bargaining testimony at the hearing before the ALJ
does not bear on the relevance determination; relevance must be
demonstrated by the Union at the time it makes its request. N.Y. &
Presbyterian Hosp., 649 F.3d at 731.
10
Q. (on direct examination) Did KLB say anything to
the Union regarding why it wanted to achieve cost
savings in this Collective Bargaining Agreement in
2007?
A. We indicated to them that we, you know, wanted
to be—stay competitive and we were competing with
the Asian firms.
And also that our costs per hour, per production
hour had risen and our—our production, itself, had
actually dropped a little.
Q. Okay. And did KLB, during the 2007
negotiations, did KLB tell the Union about the—the
top 20 information [about customers] that we just
discussed with the Court?
A. No, we did not.
DA 167:10-23 (Testimony of KLB Negotiator Bryan
Hastings) (emphasis added).
Q. (on direct examination) Do—do you—did the
Employer offer any explanation at this point as to
why they needed all of these wage cuts?
A. They always only referred to competitiveness.
Q. Okay. And—and who is that, that you say that's
speaking?
A. I would say Brian [sic].
Q. So when you say referred to competitiveness so
that the Employer could be competitive?
11
A. Yes.
DA 47:4-8 (Testimony of Union Negotiator Konrad
Young) (emphasis added).
Q. (on cross-examination) With respect to explaining
why the Company wanted concessions, isn’t it true
that Mr. Hastings said more that [sic] just they
needed to be competitive?
A. I don’t recollect anything other than competition
with other Companies without them naming the
Companies and it all centered around
competitiveness.
Q. Okay. Did Mr., Mr. Wakefield told [sic] you that
the Company’s production cost was decreasing, isn’t
that true?
A. Competitive, yes, that’s competitiveness.
Q. All right. And Mr. Wakefield also told you that
the productivity of the Company’s employees was
decreasing, isn’t that correct?
A. I don’t recall that.
DA 76 at Tr. 369:24-370:13 (Testimony of Union Negotiator
Konrad Young) (emphasis added). The record shows, at best,
two substantiatable “competitiveness” statements: Hastings’s
statement about a rise in “production cost[s]” and Hastings’s
statement about decreased productivity. But the Union did not
specify any “production costs” or “productivity” information
in the lengthy list of Competitive Information it did seek.
Additionally, KLB’s statement regarding competition from
“Asian firms” was generic. Hastings did not name specific
12
competitors—he simply mentioned “Asian firms,” common
competitors of nearly all American manufacturers.
Additionally, the generality of the Union’s Competitive
Information request manifests that KLB in fact made only a
generic competitive disadvantage claim in that both the
Union’s initial request of October 4 as well as its October 21
follow-up letter failed to refer to even a single
“competitiveness” claim made by KLB during negotiations.
Despite having the burden to explain the relevance of the
Competitive Information it sought at the time it sought that
information, see N.Y. & Presbyterian Hosp., 649 F.3d at 731,
the Union merely stated that it wanted the Competitive
Information to establish the “veracity” of KLB’s competitive
disadvantage claim. This is plainly insufficient to establish
relevance. Cf. F.A. Bartlett Tree Expert Co., 316 N.L.R.B. at
1313 (“The basis for the request, i.e., that the information
contained in the [customer] contracts is necessary to make a
reasonable wage proposal is nothing more than another way
of saying that it is needed ‘to bargain intelligently’ and this
general claim is simply insufficient to establish relevance.”).
Moreover, after KLB replied that the Competitive Information
was irrelevant, see DA 387, the Union reasserted with no
elaboration that it was entitled to the Competitive Information
and chastised KLB for failing “miserabl[y] to supply” the
information. DA 393.
The majority gives several reasons why it believes
“substantial record evidence supports the ALJ’s finding that
the issues raised at the administrative hearing were the same
issues discussed at the bargaining table.” Maj. Op. 13. But the
only record evidence it cites is Hastings’s admission that he
made a generic competitive disadvantage claim during
bargaining. I do not see how it follows from this that KLB
made the required specific claims during bargaining. The
13
majority also cites the Board’s statement that KLB
“‘communicated [its] concerns not only at the hearing, but
during negotiations as well’” and that the ALJ stated that
KLB explained its competitive disadvantage claim “‘in a
variety of ways’” and that KLB’s rationale for wage cuts
“‘centered around competitiveness.’” Maj. Op. 3, 13 (quoting
KLB Indus., Inc., 357 N.L.R.B. No. 8, at 4 n.9, 50). But these
statements are not supported by any record evidence.6 The
majority fails to address the key weakness of the Board’s
order: that it is not supported by substantial evidence.
The majority compares the specificity of KLB’s
competitiveness claim to that of the employer in Caldwell.
But in Caldwell, the employer specified that: (1) its Rochester
plant was less competitive than its other plants; (2) that plant
had already experienced significant reductions in force; (3) its
production costs were lower elsewhere; and (4) without
bargaining concessions, the Rochester plant would not be “a
viable option when it came time to locate contemplated new
product lines.” 346 N.L.R.B. at 1160 & n.6. And, in response
to the employer’s detailed assertions, the union “requested
specific information to evaluate the accuracy of the
[employer’s] specific claims.” Id. at 1160 (emphases added);
6
The majority also claims the ALJ found that KLB’s “reasons
offered at the hearing mirrored those given at the bargaining table.”
Maj. Op. 13. I do not read the ALJ to have made that finding;
rather, the ALJ did not distinguish between KLB’s reasons given at
the hearing and those given during negotiations. See KLB Indus.,
Inc., 357 N.L.R.B. No. 8, at 50 (after stating KLB explained its
competitive disadvantage claim “in a variety of ways,” ALJ
referred to explanations given only “[a]t the hearing”).
14
see also id. at 1159 & n.3, 1160 n.6. KLB’s bargaining
position—which generically referred to production costs,
productivity and “competing with the Asian firms”—is a far
cry from the employer’s position in Caldwell—even more so
because the Union failed to request any information regarding
production costs and productivity.
The majority divides the duty to disclose non-
presumptively-relevant information (i.e., information that
does not relate to bargaining unit terms and conditions of
employment) into two distinct “lines of cases.” Maj. Op. 7.
The “discovery” line of cases stands for the proposition that
the employer must turn over all requested information that is
relevant to the union, with relevance being “‘broadly
construed.’” Maj. Op. 9 (quoting U.S. Testing Co., 160 F.3d at
19); see also supra pp. 6-7 (discussing N.Y. & Presbyterian
Hosp., 649 F.3d at 730, as requiring information to be only
“of probable or potential relevance”). On the other hand, the
“Nielsen” line is more specific—it requires the employer to
“‘open its books’ to the union if it ‘pleads poverty’ or raises
an ‘inability to pay’ defense during . . . negotiations,” Maj.
Op. 7-8, but not if the employer claims competitive
disadvantage. See Lakeland Bus Lines, 347 F.3d at 961. The
majority contends that this case belongs in the broad
discovery line. I disagree.
The Nielsen line of cases is not wholly analytically
distinct from the discovery line; rather, the Nielsen line is a
specific line of authority that branches from the discovery
precedent. Under Nielsen, the reason the employer’s books
become relevant when it pleads poverty is that an examination
of the books can verify if the employer’s assertion is true.
United Steelworkers, 983 F.2d at 244 (emphasis added) (“A
company is obliged to provide financial information only
when it asserts an inability to pay, because this assertion is
15
legitimately subject to verification.”) (emphasis added). But
the Nielsen line also explains that the employer’s assertion of
competitive disadvantage (as opposed to a poverty plea) does
not create a broad disclosure obligation because the assertion
is not “legitimately subject to verification.” See id.; Lakeland
Bus Lines, 347 F.3d at 961. Just as in the analogous area of
statutory construction, where the specific controls the general,
Gozlon-Peretz v. United States, 498 U.S. 395, 407 (1991) (“A
specific provision controls over one of more general
application”), the employer asserting competitive
disadvantage represents a “carve out” from the otherwise
applicable broad discovery cases.
My colleagues conclude that “KLB has pursued an all-or-
nothing litigation strategy to disclosure” and “critically for
our purposes, the company does not argue here that even if it
had a disclosure obligation, the union’s information request
was irrelevant.” Maj. Op. 14-15. I disagree; KLB did not
pursue an all-or-nothing disclosure strategy, either during
bargaining or litigation. In response to the Union’s October 4
Competitive Information request, KLB in fact provided
information it agreed was relevant. See DA 387 (providing
bonus proposal information and wage cost savings
information). Presumably KLB would have provided further
information had the Union fulfilled its burden to explain the
information’s relevance. N.Y. & Presbyterian Hosp., 649 F.3d
at 731.7 Nor does KLB take the position today that it had no
7
I note that KLB’s hesitation in turning over Items 1, 4 and 5 of
the Competitive Information was undoubtedly reasonable. The
Union requested KLB’s current customer list “so that the Union
may contact the customers to determine if any of them is
contemplating purchasing products from other sources,” KLB’s
16
obligation to disclose any information contained in the
October 4 request only because it did not make a plea of
poverty; rather, KLB also asserts that it did not have an
obligation to disclose irrelevant information.
Although broad, the relevance standard is not
meaningless. Nothing in the record of the parties’ negotiations
demonstrates that KLB made anything other than a generic
competitive disadvantage claim; a mere “truism” indicating
an unwillingness to pay. Likewise, nothing manifests that the
Union met its burden by demonstrating the relevance of the
Competitive Information at the time it sought that
information.8
former customer list because it “intends on contacting the former
customers to learn the reasons why they stopped purchasing” and
KLB’s “complete list of prices for [its aluminum extrusion]
products so that the [U]nion can compare the prices of
competitors.” DA 357-58. Even were the Union simply to approach
KLB’s current and former customers about their purchasing
practices, that could well disrupt KLB’s business relationship,
including goodwill, with them. Nor would customers be likely to
appreciate KLB’s decision to divulge their contact information as a
bargaining chip. KLB simply exercised good business sense in
insisting on knowing the relevance of the requests before revealing
sensitive information.
8
I do agree with my colleagues, however, that KLB failed to
provide the Union with an adequate cost savings report for its wage
plan. See infra p. 18.
17
III.
I also believe that KLB’s lockout, hiring of temporary
replacements and cancellation of health insurance did not
violate sections 8(a)(5), (3) and (1) of the Act.
A bargaining lockout is lawful if it is initiated for the
“sole purpose of bringing economic pressure to bear in
support of [an employer’s] legitimate bargaining position.”
Am. Ship Bldg. Co. v. NLRB, 380 U.S. 300, 318 (1965). On
the other hand, an employer may not lock out employees “for
the purpose of evading its duty to negotiate with the
employees’ bargaining representative.” Teamsters Local
Union No. 639 v. NLRB, 924 F.2d 1078, 1085 (D.C. Cir.
1991). But “the mere fact of an unremedied Section 8(a)(5)
failure to furnish information does not necessarily compel a
finding that a subsequent lockout was unlawful.” PACCAR,
Inc. d/b/a Peterbilt Motors Co., 357 N.L.R.B. No. 13, at 4
(2011) (emphasis in original). Rather, “[a]lthough nowhere
expressly stated, the standard consistently, if implicitly,
applied by the Board is that where the unlawful withholding
of the information did not materially affect the progress of
negotiations, the . . . lockout is lawful notwithstanding the
unremedied violation.” Id. (emphasis added). While Peterbilt
Motors involved a post-lockout refusal to furnish requested
information, the Board there noted that the standard applies
whether the refusal is pre- or post-lockout. Id.
Here, the Board found the lockout unlawful because KLB
failed to provide the Competitive Information and additional
calculations in support of its projected wage cost savings. The
Board conducted no analysis either of the purpose of the
lockout or of the material effect—if any—of KLB’s failure to
disclose on the progress of negotiations. Instead, the Board
found the lockout was “tainted” because the issue of wages
18
was “critical to the bargaining” and the information KLB
failed to turn over was related to the proposed wage cuts and
the reasons therefor. DA 425-26. But the Board failed to
address the fact that the parties were nearly at impasse before
the Union’s information request or the fact that negotiations
continued after KLB declined the information request. Nor
does the Board conclude that disclosure would have made a
material difference to the progress of negotiations.
The Board’s finding that the lockout was unlawful is
particularly problematic because, given the fact that KLB had
no duty to disclose the Competitive Information, the only
relevant information that KLB failed to provide were
calculations supporting KLB’s wage cost savings information.
The record, however, does not support the notion that the
failure to provide the calculations materially affected the
progress of bargaining or manifested that KLB was
attempting to evade its bargaining duty. Accordingly, I find
KLB’s lockout lawful. Additionally, because it is undisputed
that KLB could lawfully hire temporary replacements if the
lockout was lawful, I find its decision to do so lawful as well.9
9
Because I believe the lockout was lawful, I would also reach
the issue of the cancelled health insurance. The Board found that
KLB’s cancellation of its group health insurance plan was unlawful
because it was a unilateral change in the terms and conditions of
employment. TruServ Corp. v. NLRB, 254 F.3d 1105, 1113 (D.C.
Cir. 2001) (“An employer violates th[e] duty to bargain if, absent a
final agreement or a bargaining impasse, he unilaterally imposes
changes in the terms and conditions of employment.”).
The relevant CBA provision states that health insurance benefits
may be terminated “no later than the end of the month following
the month in which an employee is laid off or is off work for any
19
For the foregoing reasons, I respectfully dissent. I would
grant KLB’s petition for review in large part, concluding that
KLB lawfully declined to provide the Competitive
Information (with the exception of the supporting wage cost
savings calculations), lawfully locked out employees and
hired temporary replacements and lawfully discontinued
health insurance for its locked-out employees. I would deny
the Board’s cross application for enforcement except as
otherwise hereinabove noted. See supra pp. 6 n.4, 15-16 n.7,
18.
reason other than circumstances which expressly give rise to
insurance benefits hereunder.” DA 462 (emphasis added). In other
words, health insurance benefits last no later than “the end of the
month following the month” after an employee is “off work for any
reason” (e.g., locked out). Without explanation, the Board found
that this language guaranteed KLB employees coverage until “the
end of the month following the month” after being locked out. But
the CBA provides “no later than,” not “no earlier than.” The Board
failed to point to any other CBA provision to the contrary. See also
Sherwin-Williams Co., 269 N.L.R.B. 678, 678 (1984) (employer
lawfully declined to pay health insurance premiums for striking
employees under CBA provision that required employer to pay
monthly health insurance premiums only for employees “in active
service”).
Nor do COBRA rights change the analysis. While KLB’s
decision to terminate its plan deprived employees of potential
health insurance continuation coverage under COBRA, COBRA
provides that continuation coverage is not required for a plan that
normally employs “fewer than 20 employees on a typical business
day.” 29 U.S.C. § 1161(b). KLB’s health plan covered only sixteen
employees.