# Respondents Brief — Litton Financial Printing Div., Litton Business Systems, Inc. v. NLRB > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0021%3A07 ## Record - **Collection:** Supreme Court brief - **Document type:** Respondents Brief - **Published:** January 1, 1991 - **Citation:** 501 U.S. 190 ## Text No. 90-285 $ # 0 Jn the Supreme Court of the United States OCTOBER TERM, 1990 LITTON FINANCIAL PRINTING DIVISION, A DIVISION OF LITTON BUSINESS SYSTEMS, INC., PETITIONER Vv. NATIONAL LABOR RELATIONS BOARD, ET AL. ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD AS RESPONDENT SUPPORTING PETITIONER JERRY M. HUNTER General Counsel D. RANDALL FRYE Acting Deputy General Counsel ROBERT E. ALLEN Associate General Counsel NORTON J. COME Deputy Associate General Counsel LINDA SHER Assisiant General Counsel DAVID A. FLEISCHER Atiorney Nauonal Labor Relations Board Washington, D.C. 20570 KENNETH W. STARR Solicitor General LAWRENCE G. WALLACE Deputy Solicitor General MICHAEL R. LAZERWITZ Assistant to the Solicitor General Department of Justice HW ashington, D.C. 20530 (202) 514-2217 Za QUESTION PRESENTED Whether the National Labor Relations Board reason- ably determined that the union’s post-contract expiration grievances about the employer’s layoff of employees were not arbitrable under the contract. (1) PARTIES TO THE PROCEEDING In addition to the parties named in the caption, Printing Specialties District Council No. 2, as successor to Printing Specialties District Council No. 1, was a petitioner/inter- venor in the court of appeals and is a respondent here. i met TABLE OF CONTENTS CUISNS GERI 006 000 60004606080i004 eee PUIG 6 0c ivtvededessiestceweteeeeeee Statutory provisions involved .................0.65. SONGS. oc ccvctccccsccsacenéendses eatin A. B. The development of the Board’s rule regarding arbitration of post-contract expiration CU, occu ccctecécdesdducntuaeeeenn The present COmtroversy ..........cceceeees SUNG GS GHEE 0. « 0.0 600 cdencesdd%esianntenes Argument: The National Labor Relations Board reasonably determined that the union’s post-contract expira- tion grievances about the employer’s layoff of employees were not arbitrable under the contract . . A. The Board’s interpretations of the Act and ex- ercise of remedial authority are entitled to substantial deference if they are rational and consistent with the statute ................. B. Under these principles, the Board’s rule re- garding arbitration of post-contract expiration grievances should be upheld ............... C. The union’s post-contract expiration griev- ances were not arbitrable since they did not “arise under” the CcOmtract .... 1. eee eee CORGIIGD . o006cdttecceeeediunénentdea eee TABLE OF AUTHORITIES Cases: Alliance Machine Co., 74 Lab. Arb. 1058 (1981) .. - American Sink Top & Cabinet Co., 242 N.L.R.B. GED GGSTED ce cccccvecdevenseéeenbeeeseeat i) 13 15 15 IV Cases — Continued: Page Auto Workers v. Young Radiator Co., 904 F.2d 9 i. eek ie eneeanebneeeese es 24 Bell Foundry Co., 73 Lab. Arb. 1162 (1979) ...... 23 Beth Israel Hosp. v. NLRB, 437 U.S. 483 (1978) .. 13, 15, 16-17 Bethlehem Steel Co., 136 N.L.R.B. 1500 (1962), enforced, 320 F.2d 615 (3d Cir. 1963), cert. de- nied, 375 U.S. 964 (1964) ....... cc cece ee eees 3,4 Cardinal Operating Co., 246 N.L.R.B. 279 (1979) . 7 Celotex Corp., 146 N.L.R.B. 48 (1964), enforced, 364 F.2d 552 (Sth Cir.), cert. denied, 385 U.S. SE 3 Central Rufina, 161 N.L.R.B. 696 (1966) ........ 5 Charles D. Bonanno Linen Service, Inc. v. NLRB, ED «oo cc ccncedetasecececaces 16 Chauffeurs Local Union 238 v. C.R.S.T., Inc., 795 F.2d 1400 (8th Cir.), cert. denied, 479 U.S. 1007 neck ec edesiueness ¢ nwo 21 County of Ottawa v. Jaklinski, 423 Mich. 1, 377 oe eae nen esssete 23 Digmor Equip. & Eng’g Co., 261 N.L.R.B. 1175 Ot AEE Pee err er Tre eT Tere 7 Fall River Dyeing & Finishing Corp. v. NLRB, 482 ree 13, 14, 16, 24 Federated Metals Corp. v. United Steelworkers, 648 F.2d 856 (3rd Cir. 1981), cert. denied, 454 EE ee ee cec eee bese eésee 20-21 First Nat'l Maintenance Corp. v. NLRB, 452 U.S. EERE eee ee 10 Ford Motor Co. v. NLRB, 441 U.S. 488 (1979) ... 16 GAF Corp., 265 N.L.R.B. 1361 (1982) .......... 4,5 Gateway Coal Co. v. Mine Workers, 414 U.S. 368 ENA SYR SEE 8 80 pol ile a a 4.18 Goya Foods, Inc., 238 N.L.R.B. 1465 (1978) ..... 25 H.K. Porter Co. v. NLRB, 397 U.S. 99 (1970) .... 18, 20 Hilton-Davis Chem. Co., 185 N.L.R.B. 241 (1970) = 4, :19 Howard Johnson Co. v. Hotc! Workers, 417 U.S. Teen ee eeeeseas 18 Cases — Continued: Page Independent Stave Co., 233 N.L.R.B. 1202 (1977), enforced, 591 F.2d 443 (8th Cir.), cert. denied, EE nn ned enced eeenaesaens 4, 18 Indiana & Michigan Elec. Co., 284 N.L.R.B. 53 i! Che tentséuneweekewws 3, 4-5, 7, 8, 11, 12, 14, 15, 19, 20, 21, 25 Litton Financial Printing Division, 256 N.L.R.B. SR a die eed ine ale oe ehh y Local Joint Executive Bd., Culinary Workers Union, Local 226 v. Royal Center, Inc., 796 F.2d 1159 (9th Cir. 1986), cert. denied, 479 U.S. 1033 ee eS EG a creme s 13, 20 Lucas County Farm Bureau Coop. Ass'n, 218 N.L.R.B. 1150 (1975), enforced, 557 F.2d 1227 i eile ad eerie ede keeeeedetes 3 NLRB vy. Curtin Matheson Scientific, Inc., 110 i ne ec edechenedeabesée 15, 16, 17, 24 NLRB vv. Erie Resistor Corp., 373 U.S. 221 (1963) . 15 NLRB vy. J. Weingarten, Inc., 420 U.S. 251 (1975) . 16 NLRB v. Katz, 369 U.S. 736 (1962) ............. 3, 19 NLRB vy. Strong Roofing Co., 393 U.S. 357 (1969) . 17 NLRB vy. Truck Drivers, 353 U.S. 87 (1957) .... 14, 15, 23 NLRB v. Wyman-Gordon Co., 394 U.S. 759 PETE De Se ee eee 27 Nedco Const. Co., 206 N.L.R.B. 150 (1973) ...... 17 Nolde Bros. v. Local No. 358, Bakery Workers, Ne ee nuke encebeuns 5, 19 Paramount Potato Chip Co., 252 N.L.R.B. 794 eee ee ie ee ee eas ok eS 4, 18 S & W Motor Lines, Inc., 236 N.L.R.B. 938 (1978), modified, 621 F.2d 598 (4th Cir. 1980) ......... 5 Sea Bay Manor Home for Adults, 253 N.L.R.B. 739 (1980), entorced, 658 F.2d 425 (2d Cir. ER eee 17 Shepard v. NLRB, 459 U.S. 344 (1983) .......... 17 Southwestern Steel & Supply, Inc. v. NLRB, 806 ft 4 Vi Cases — Continued: Page Steelworkers v. Fort Pitt Steel Casting Division — Conval-Penn, Inc., 635 F.2d 1071 (3d Cir. 1980), cert. denied, 451 U.S. 985 (1981) .............. 24 Steelworkers v. Warrior & Gulf Navigation Co., ee dene e 4,5 Teamsters Local 703 v. Kennicott Bros. Co., 771 ons cs ie cedébbewees 11, 24 The Brooklyn Eagle, 32 Lab. Arb. 156 (1959) ..... 23 United Chrome Prods., Inc., 288 N.L.R.B. 1176 bee Chee eee ee eri he Bes 12, 18, 26, 27 United Food Workers Union, Local 7 v. Gold Star Sausage Co., 897 F.2d 1022 (10th Cir. 1990) .... 21, 22 United Tel. Co., 112 N.L.R.B. 779 (1955) ........ 5 Uppco, Inc., 288 N.L.R.B. 937 (1988) ........ 12, 18, 26 Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533 EEA a pe eae 14, 17 Westwood Products, 77 Lab. Arb. 396 (1981) .... 23 Statutes: Labor-Management Relations Act of 1947, § 301, ea OL a ee 5, 13, 18 National Labor Relations Act, 29 U.S.C. 151 ef seq.: oe ee cee deens 2 § 8(a)(1), 29 U.S.C. 1S8(ayil) ..... 2.2.22... 2, 6, 7, 9, 10, 11, 18, 24 § Stas), 29 U.S.C. 1SGaMS) .. 2 ences 3,4 § 8(a)(5), 29 U.S.C. 158(ay(S) ......... aes Fs 9, 10, 11, 13, 14, 18, 19, 24 Ry AP ies GED ccc ccccccccccccece 2, 3, 20 ee on oo ea bean twa det 2 Jn the Supreme Court of the United States OcTOBER TERM, 1990 No. 90-285 LITTON FINANCIAL PRINTING DIVISION, A DIVISION OF LITTON BUSINESS SYSTEMS, INC., PETITIONER V. NATIONAL LABOR RELATIONS BOARD, ET Al ON WRIT OF CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE NINTH CIRCUIT BRIEF FOR THE NATIONAL LABOR RELATIONS BOARD As RESPONDENT SUPPORTING PF TLTEIONER OPINIONS BELOW The opinion of the court of appeals (Pet. App. Al-A22) is reported at 893 F.2d 1128. The decision and order of thes National Labor Relations Board (Pet. App. B1-B28) &re reported at 286 N.L.R.B. 817. JURISDICTION The judgment of the court of appeals was entered on January 16, 1990. A petition tor rehearing was denied on May 31, 1990. Pet. App. D1-D2. The petition for a writ of certiorari was tiled on August 14, 1990, and was granted on November 13, 1990.' The jurisdiction of this Court rests on 28 U.S.C. 1254(1). fhus Court granted the petition limited to the second question pre- sented. See J.A. 3. (1) STATUTORY PROVISIONS INVOLVED Section 8(a)(1) and (5) of the National Labor Relations Act, 29 U.S.C. 158(a)(1) and (5), provides: (a) It shall be an unfair labor practice for an em- ployer — (1) to interfere with, restrain, or coerce em- ployees in the exercise of the rights guaranteed in section 157 of this title; *. . = -_ -_ (5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions of section 159(a) of this title. Section 8(d) of the Act, 29 U.S.C. 158(d), provides in relevant part: For the purposes of this section, to bargain collec- lively is the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement, Or any question arising thereunder, and the execution of a written contract incorporating any agreement reached if requested by either party, but such obligation does not compel either party to agree tO a proposal or require the making of a concession *_* * Section 7 of the Act, 29 U.S.C. 157, provides: Employees shall have the right to self-organization, to torm, join, or assist labor organizations, to bar- gain collectively through representatives of their own choosing, and to engage in other concerted activities tor the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from any or all such activities except to the extent that such right may be affected by an agree- ment requiring membership in a labor organization as a condition of employment as authorized in section 158(a)(3) of this title. STATEMENT A. The Development Of The Board's Rule Regarding Arbitration OF Post-Contract Expiration Grievances 1. Under Sections 8(a)(5) and 8(d) of the National Labor Relations Act, 29 U.S.C. 158(a)(5) and 158(d), an employer must bargain “in good faith with respect to wages, hours, and other terms and conditions of employ- ment.” /bid. In order to promote industrial peace by fostering an atmosphere conducive to serious negotiations on anew contract, the Board has long recognized that the expiration of a collective bargaining agreement generally freezes the existing terms and conditions of employment. See NLRB vy. Katz, 369 U.S. 736, 743 (1962). Consequent- ly, the Board’s well-established rule provides that an em- ployer may not, without first bargaining to impasse, uni- laterally abrogate an existing contractual grievance pro- cedure, nor may it refuse LO process grievances under the procedure, even alter the contract has expired.’ As the Board has observed, such unilateral actions undermine a union’s status as exclusive bargaining representative of the See, ¢.e., Indiana & Michiean Elec. Co., 284 NLRB. 53, 54-55 (1987); Lucas County Farm Bureau Coop. Ass'n, 218 NLRB. LESO, 1151 (1975), entorced, $57 b.2d 1227, 1228 (6th Cir. 1977); Celotes (Sth Cir.), cert. demied, 385 U.S. 987 (1966); Betilehem Steel Co., 136 N.L.R.B. 1500, 1503 (1962), entoreed in relevant part, 320 F.2d 615, 620 (3d Cir. 1963), cert. demed, 375 U.S. 984 (1964). 4 employees. Hilton-Davis Chem. Co., 185 N.L.R.B. 241, 243 (1970). Union security and dues-checkoff clauses do not sur- vive, by operation of the Act, expiration of the collective bargaining agreement because “[t]he acquisition and maintenance of union membership cannot be made a con- dition of employment except under a contract which con- forms to the proviso to Section 8(a)(3).” Bethlehem Steel Co., 136 N.L.R.B. 1500, 1502 (1962); see Southwestern Steel & Supply, Inc. v. NLRB, 806 F.2d 1111, 1113 (D.C. Cir. 1986). The Board initially held that arbitration clauses in collective bargaining agreements likewise did not sur- vive expiration of the contract, on the ground that the duty to arbitrate is wholly contractual and cannot survive by operation of law. Hilton-Davis Chem. Co., 185 N.L.R.B. at 242.) The Board therefore concluded that an employer does not violate Section 8(a)(5) of the Act by re- fusing to arbitrate grievances arising between the expira- tion of one contract and agreement on another. /bid.+ As the Board there explained: ’ In Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960), this Court recognized that “a party cannot be required to submit to arbitration any dispute which he has not agreed so to sub- mit.” Accord Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 374 (1974); see also Indiana & Michigan Elec. Co., 284 N.L.R.B. at 57-58. *On the other hand, the Board has long held that a wholesale refusal to arbitrate grievances under a contract to arbitrate does violate Section 8(a) (5S), since that refusal amounts to a repudiation ot part of the bargain reached during negotiations. See, e.g., GAF Corp., 265 N.L.R.B. 1361, 1364 (1982); Paramount Potato Chip Co., 252 N.L.R.B. 794, 796-797 (1980); Independent Stave Co., 233 N.L.R.B. 1202, 1204 (1977), enforced in pertinent part, 591 F.2d 443, 446-448 (8th Cir.), cert. denied, 444 U.S. 829 (1979). However, a refusal to arbitrate a particular grievance or class of grievances, by itself, is not a violation of the Act, because a breach of contract does not automatically amount to a repudiation of the contract. See, e.e., Absent mutual consent, the parties revert to the statu- tory scheme ot “tree” collective bargaining wherein each party must attempt in good faith to reach agree- ment, but is under no statutory mandate to reach an agreement or to forfeit its rights to utilize its eco- nomic power if no agreement can be achieved. Ibid. The Board accordingly took the position that “{i]f the contract expires, the arbitration commitment expires.” S & W Motor Lines, Inc., 236 N.L.R.B. 938, 948 (1978), modified on other grounds, 621 F.2d 598 (4th Cir. 1980). 2. In Nolde Bros. y. Local No. 358, Bakery Workers, 430 U.S. 243, 250-251 (1977),* this Court reaffirmed “that the arbitration duty is a creature of the collective-bargain- ing agreement and that a party cannot be compelled to ar- - bitrate any matter in the absence of a contractual obliga- tion to do so.” See, e.g., Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582 (1960). Nonetheless, the Court held that “termination of a collective-bargaining agreement [does not} automatically extinguish[ ] a party’s duty to arbitrate grievances arising under the contract.” 430 U.S. at 251. The Court noted that “{wJhile the termination of the collective-bargaining agreement works an obvious change in the relationship between employer and union, it would have litthe impact on many of the considerations behind [the parties’) decision to resolve their contractual differ- ences through arbitration.” No/de, 440 U.S. at 254. The Indiana & Michigan klec. Co., 284 N.L.R.B. at 60.0.7; GAF Corp., 265 N.L.R.B. at 1364-1365; Central Rusfina, 161 NLRB. 696, 700 (1966); Cnuted Tel. Co., 112 N.L.R.B. 779, 781-782 & 0.4 (1955). Nolde involved @ union's action under Section 301 of the Labor Management Relations Act, 29 U.S.C. 185, to compel arbitration of a dispute over severance pay that arose atter the expiration of the collec live bargaining agreement. 430 U.S. at 244-248. 6 Couit further observed that “the parties drafted their broad arbitration clause against a backdrop of well-estab- lished federal labor policy favoring arbitration as the means of resolving disputes over the meaning and effect of collective-bargaining agreements,” and the “established * * * strong presumption favoring arbitrability” in order to effectuate that policy. /bid. The Court therefore con- cluded that [t]he parties must be deemed to have been con- scious of this policy when they agree[d] to resolve their contractual differences through arbitration. Consequently, the parties’ failure to exclude from ar- bitrability contract disputes arising after termination, far from manifesting an intent to have arbitration obligations cease with the agreement, affords a basis for concluding that they intended to arbitrate all grievances arising out of the contractual relationship. In short, where the dispute is over a provision of the expired agreement, the presumption favoring arbitra- bility must be negated expressly or by clear impli- cation. Id. at 255. In light of No/de, the Board reconsidered the rule an- nounced in Hilton-Davis that the duty to arbitrate expires with the contract. In American Sink Top & Cabinet Co., 242 N.L.R.B. 408 (1979), the Board held that the em- ployer had violated Section 8(a)(5) and (1) of the Act by refusing to process—and arbitrate, if appropriate—a grievance over a discharge occurring nearly three months after the contract expired. On the basis of the presumption adopted in No/lde, the Board explained that “[t}he griev- ance’s basis is ‘arguably’ —at least —the contract, and there is no reason to conclude that the parties had intended the arbitration provisions to end with the contract’s term.” 242 N.L.R.B. at 408. In the wake ot American Sink Top, the Board had difti- culties applying its decisions regarding the post-expiration duty to arbitrate grievances. Compare Cardinal Operating Co., 246 N.L.R.B. 279, 284, 287-288 (1979) (applying Hilton-Davis without citing American Sink Top or Nolde) with Digmor Equip. & Eng’g Co., 261 N.L.R.B. 1175, 1175-1176 (1982) (applying American Sink Top where em- ployer refused io arbitrate post-expiration discharge based in part On pre-expiration conduct). 3. This uncertainty led the Board, in /ndiana & Michi- gan Elec. Co., 284 N.L.R.B. 53 (1987), to clarify its rule regarding the post-expiration duty to arbitrate grievances. The Board noted No/de’s strong presumption that the con- tractual obligation to arbitrate grievances arising under the contract extends io post-expiration disputes,® and con- cluded that a blanket refusal to arbitrate post-expiration grievances would violate Section 8(a)(5) and (1) of the Act, absent strong evidence that the parties intended to exclude all such disputes trom arbitration. 284 N.L.R.B. at 59-60. But the Board read No/de as requiring an employer to ar- bitrate only those post-expiration grievances “arising under” the expired contract, /.e., disputes concerning “contract rights capable of accruing or vesting to some degree during the lite of the contract and ripenimg or re- maining enforceable atter the contract expires.” /d. at 60. Accordingly, to the extent American Sink Top suggested that a@// post-expiration grievances based on terms of the expired contract are arbitrable, the Board declined to follow that decision. /d. at 60 n.9.- ‘In this regard, the Board determined that Nolde did not unde: mine that aspect of Afifton-Daviy holding that the Act does “not in pose a duty to adhere to the arbitration procedure independent of any contractual commitment to do so.” 284 NOE ROB. at 3S. In /ndiana & Michigan Elec. Co., the Boatd concluded that the employer had violated the Act by refusing to arbitrate any post B. The Present Controversy 1. Petitioner prints bank checks at six plants. For a number of years, petitioner and Printing Specialties Dis- trict Council No. 2 (union) were parties to collective bar- gaining agreements.* During the period relevant to this proceeding, the union represented production and main- tenance employees at petitioner’s Santa Clara facility. The last contract between petitioner and the union expired on October 5, 1979. Pet. App. A4. That contract, which generally provided that “the stipu- lations set forth shall be in effect for the time hereinafter specified,” J.A. 22, contained a grievance-arbitration pro- cedure for resolving “[d]ifferences that may arise between the parties * * * regarding this Agreement and any alleged violations of the Agreement, [and] the construction to be placed on any clause or clauses of the Agreement,” J.A. 34.° With respect to layoffs, the contract provided that expiration grievances. 284 N.L.R.B. at 61. The Board determined, however, that the grievances at issue did not “arise under” the expired contract and thus declined to order the employer to arbitrate them. The Board pointed to the fact that the grievances were triggered by events or conduct that occurred after the expiration of the contracts. None of the rights invoked were worked for or accumulated over time, and there is no other in- dication that the parties contemplated that such rights could ripen or remain enforceable after the contracts expired. Ibid. * The union was the successor to Printing Specialties District Coun- cil No. 1. Pet. App. A4. * The contract calls for the employee first to submit the grievance to his immediate supervisor (or the Shop Steward), and then to submit it in writing to a panel consisting of the Plant Manager, the Shop Steward, and a union representative. If the grievance remains unresolved, the parties may then proceed to binding arbitration. J.A. 34-35. The contract provides that “[s}hould an employee have a grievance as to the interpretation or application of the terms of this Agreement, Y {[wjhenever [petitioner] intends to lay off all or part of {its} employees, [it] shall give notice of such intention not later than quitting time of the previous working day. It is also understood that in case of layofts, lengths of continuous service will be the determining factor if other things such as aptitude and ability are equal. J.A. 30. Petitioner used two types of printing processes to print bank checks at the Santa Clara tacility—the “cold-type” process and the “hot-type” process. In July 1980, peti- tioner decided for economic reasons to convert the facility entirely to the “hot-type” process and, as a result, laid off ten employees and gave them severance pay. Petitioner did not notify the union about the layoffs or give it an oppor- tunity to bargain.'® Moreover, petitioner did not lay off those employees on the basis of seniority. Instead, peti- tioner laid off employees who worked exclusively or pri- marily on the “cold-type” equipment. Pet. App. A4-AS5. The union filed separate but identical grievances tor each laid-ott employee, alleging “unjust layott... out of seniority.” Pet. App. A6. The union asked petitioner tor a meeting to discuss the layott decision and its impact on the employees, and “requestfed] that pending resolution ot this matter that each and all of them be reinstated to their employment.” J.A. 61. Petitioner, noting that the contract there shall be no suspension of interruption of work on account ol such matter * * *." J.A. 34-35. The contract also contamis a general “no-strike” clause limited to the “term of [the] Agreemem.” J.A. 34. " At the time of the layoltls, petitioner Was relusing to bargain will the union, relying on tts objections to the 1979 decertitication election that the union had won. In a separate pro veeding, the Board tound that petitioner's general ietusal to bargain violated Section 8(a)(5) and (1) ot the Act, 29 U.S.C. 15845) and (1). Litton Financial Printing Division, 256 NLRB. S16 (1981). 10 had expired, refused to process the grievances under the contractual grievance and arbitration procedure. It also refused to bargain over the decision to lay off the em- ployees, but offered to discuss the “effects” of the layoff on employees. Pet. App. A6; J.A. 65. 2. In response to unfair labor practice charges initi- ated by the union, see J.A. 7-9, the National ‘Labor Rela- tions Board concluded that petitioner had violated Section 8(a)(5) and (1) of the Act, 29 U.S.C. 158(a)(5) and (1), by refusing to bargain about the layoff decision, by refusing to accept and process the layoff grievances, and by unilatera'ly repudiating the contractual arbitration pro- cedure. Pet. App. B1-B20.'' The Board noted that, under First Nat'l Maintenance Corp. v. NLRB, 452 U.S. 666 (1981), “employers are obligated to bargain over the ef- fects on unit employees of management decisions” even where those decisions “are not themselves subject to the obligation to bargain.” Pet. App. B9. “[U]nder the facts of this case,” the Board determined, petitioner’s “decision to lay off employees [was] not so inextricably intertwined with the conversion decision as to render impossible bar- ‘' The Board also concluded that petitioner had violated Section 8(a)(5) and (1) by dealing directly with employees without first notify- ing the union. Pet. App. B2 n.4. Since petitioner did not challenge that conclusion, the court of appeals summarily enforced that aspect of the Board’s order. /d. at AS n.2. That issue is not before this Court. Chairman Dotson filed a dissenting opinion. Pet. App. B21-B28. In his view, there was insufficient evidence “to establish [petitioner's] ‘wholesale repudiation’ of the arbitration procedure.” /d. at B23. With respect to the employees’ grievances, he concluded that since they “did not ‘arise under’ the contract, * * * [petitioner] had no obligation *** to process them.” /d. at B24. Moreover, Chairman Dotson determined that, “under all the circumstances presented * * *, the layott may not properly be classified as an effect of [petitioner's] con- version decision.” /bid. ’ gaining over the layott decision.” /bid.'? Following its recent decision in /ndiana & Michigan Elec. Co., 284 N.L.R.B. 53 (1987), the Board also con- cluded that petitioner had violated Section 8(a)(5) and (1) by refusing to accept and process the layoff grievances and by unilaterally repudiating the contractual arbitration pro- cedure. Pet. App. BS-B9. In light of /ndiana & Michigan Elec. Co., the Board here rejected petitioner’s contention that there was no obligation to process the grievances through the grievance procedure because the contract had expired. Moreover, the Board concluded that petitioner could not repudiate the arbitration provisions of its ex- pired contract merely because the contract specified that the “stipulations set forth shall be in effect for the time hereinafter specified.” Pet. App. B3; see id. at BS-B6. The Board pointed out that such language “is not sufficient to rebut the Nol/de presumption of arbitrability because it does not reveal the parties’ intentions ‘as to the pertinent issue, which is, whether the arbitration clause survives ex- piration and, if so, which post-contract grievances are ar- bitrable.’ ” /d. at B6 (quoting Teamsters Local 703 v. Ken- nicott Bros. Co., 771 F.2d 300, 303 (7th Cir. 1985) (em- phasis in original)). Turning to the appropriate remedy, the Board, among other things, ordered petitioner (upon request) to bargain about the layofts and to process the layott grievances through the contractual grievance procedure. Pet. App. B15-B17, B18-B19. But the Board refused to order peti- ‘? The Board tound that once petitioner decided to convert to the hot-type process, « had a number of alternatives — other than lay- olfs—tor mplementing that decision: petitioner could have retained cold-type employees io Work on hot-type equipment, transterred those employees to its other plants or to other positions within the same plant, reduced the workweek tor all employees, or adopted a system of rotating layotts. Pet. App. BLO. 12 tioner to arbitrate the layoff grievances, rejecting the union’s contention that those grievances “arose under” the expired contract. The Board found that the layoffs that triggered the grievances occurred after the expiration of the contract, that the asserted contractual right —the right to layoff by seniority if other factors were equal — was not a “right worked for or accumulated over time,” and that there was no evidence that “the parties contemplated that such rights could ripen or remain enforceable even after the contract expired.” /d. at B16 (quoting /ndiana & Michigan Elec. Co., 284 N.L.R.B. at 60). 3. The court of appeals enforced the Board’s order, but reversed and remanded for further proceedings that aspect of the Board’s decision concluding that the layoff grievances were not arbitrable. Pet. App. Al-A22.'> Re- viewing the Board’s conclusion that the layoff grievances Jid not “arise under” the expired contract, the court of ap- peals determined that the Board had erroneously focused on “the event (the layoff) that sparked the dispute, and not [on] the substantive contract-based rights (seniority pro- tection against layoff) that were allegedly violated.” /d. at A19. The court pointed out that, in two later decisions, '* the Board had found post-expiration disputes involving application of coniractual seniority clauses arbitrable; the court viewed those decisions as inconsistent with the Board’s holding here. /d. at A19-A20. Moreover, the court concluded that the Board’s /ndiana & Michigan rule, by ‘' The court of appeals upheld the Board’s determination that peti- tioner’s layott decision was a mandatory subject of bargaining, and thus enforced that part of the Board’s order. Pet. App. All-A12. That aspect of the court of appeals’ judgment is not betore the Court as a result of the limited grant of certiorari. See J.A. 3; note 1, supra. ‘* United Chrome Prods., Inc., 288 N.L.R.B. 1176 (1988); Uppeo, Inc., 288 N.L.R.B. 937 (1988). 13 focusing on whether the grievance was based on rights ac- cruing under the contract before termination, was incon- sistent with No/de as well as with Ninth Circuit decisions construing Section 301 of the Labor-Management Rela- tions Act of 1947, 29 U.S.C. 185. Pet. App. A20-A2]1 (citing, e.g., Local Joint Executive Bd., Culinary Workers Union, Local 226 v. Royal Center, Inc., 796 F.2d 1159 (9th Cir. 1986), cert. denied, 479 UJ.S. 1033 (1987)).'> SUMMARY OF ARGUMENT A. This Court has repeatedly held that “[i]t the Board adopts a rule that is rational and consistent with the Act *** then the rule is entitled to deference trom the courts.” Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42 (1987). Deterence is appropriate where the Board’s decision is based on a policy judgment designed to implement the broad purposes of the statute. “It is the Board,” not the courts, “on which Congress conterred the authority to develop and apply fundamental national labor policy.” Beth Israel Hosp. v. NLRB, 437 U.S. 483, S500 (1978). If the Board is to accomplish that task, i “necessarily must have authority to formulate rules to fill the interstices of the broad statutory provisions.” /d. at 501. Deterence is particularly due the Board’s remedial order, which “should stand unless it can be shown that the order 1s a patent attempt to achieve ends other than those Since ut concluded that the Board “erred” m tindimg that “the layotl grievances in this case Were not arbitrable, on the ground that they did not ‘arise under’ the expired [contract},” the court of appeals “assume[d) without decid Ay fiat the Board’s Indiana & Michigan decision [insotar as it relies QR saztion 301 precedent such as Nolde} is a reasonably detensible construction of the sechhon 8(anS) duty to barvain.” Pet. App. AIS. As the court of appeals pomiecd out, pet inomer did “not challenve the veneral principles of J/ndiana aA Vichiwan.” Id. at Alo a8 14 which can fairly be said to effectuate the policies of the Act.” Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540 (1943). B. The Board’s rule set forth in Jndiana & Michigan Elec. Co. regarding arbitration of post-contract expiration grievances is plainly “rational and consistent with the Act.” Fall River Dyeing, 482 U.S. at 42. In view of this Court’s recognition in Nolde of the strong presumption that the contractual obligation to arbitrate grievances aris- ing under the contract extends to post-expiration disputes, the Board has properly determined that a blanket refusal io arbitrate post-expiration grievances would violate the Act, absent strong evidence that the parties intended to ex- clude such disputes from arbitration. That aspect of the Board’s rule is unexceptionable, especially in view of the scope of the duty to bargain under Section 8(a)(5) of the Act. The Board has appropriately determined that only those post-expiration grievances concerning “contract rights capable of accruing or vesting to some degree during the life of the contract and ripening or remaining enforceable after the contract expires” must be arbitrated under the contract. Indiana & Michigan Elec. Co., 284 N.L.R.B. at 60. That limitation reflects the Board’s “striking [a] balance to effectuate national labor policy.” NLRB v. Truck Drivers, 353 U.S. 87, 96 (1957). The Board’s rule furthers the use of arbitration as a means of resolving labor-management disputes, but at the same time recog- nizes that resort to arbitration over particular disputes ultimately depends on the partie<’ mutual consent, as re- flected in the collective bargaining agreement. According- ly, to the extent the court of appeals concluded that the Board’s rule is an impermissible construction of the Act, the decision below is wrong. 15 C. Under the /ndiana & Michigan rule, the Board here reasonably determined that, although petitioner’s blanket refusal to arbitrate the union’s post-contract expiration grievances violated the Act, petitioner was not obligated to arbitrate the particular layoff grievances at issue since they did not “arise under” the contract. The record adequately supports the Board’s determination, and contrary to the court of appeals’ conclusion, the Board’s decision in this case is consistent with its other recent decisions applying the Indiana & Michigan rule. The court of appeals there- fore erred in refusing to uphold that aspect of the Board’s order declining to direct arbitration of the layoff griev- ances. ARGUMENT THE NATIONAL LABOR RELATIONS BOARD REASON AB- LY DETERMINED THAT THE UNION’S POST-CONTRACI EXPIRATION GRIEVANCES ABOUT THE EMPLOYER'S LAYOFF OF EMPLOYEES WERE NOT ARBITRABLE UNDER THE CONTRACT A. The Board's Interpretations Of The Act And Exercise Ot Remedial Authority Are Entitled Lo Substantial Deference I They Are Rational And Consistent With The Statute “The function of striking [the] balance to effectuate na- tional labor policy is often a difficult and delicate respon- sibility, which Congress committed primarily to the Na- tional Labor Relations Board, subject to limited judicial review.” NLRB vy. Truck Drivers, 353 U.S. 87, 96 (1957); see NLRB v. Curtin Matheson Scientific, Inc., 110 8. Ct. 1542, 1549 (1990); Beth Israel Hosp. v. NLRB, 437 U.S. 483, 501 (1978). Accordingly, the Board’s judgment, when “applying the general provisions of the Act to the com- plexities of industrial lite,” NLRB v. Erie Resistor Corp., 373 U.S. 221, 236 (1963), is entitled to “considerable deference,” Curtin Matheson, 110 S. Ct. at 1549. As this 16 Court has repeatedly held, “[i]f the Board adopts a rule that is rational and consistent with the Act * * * then the rule is entitled to deference from the courts.” Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42 (1987); accord Curtin Matheson, 110 S. Ct. at 1549; Charles D. Bonanno Linen Service, Inc. v. NLRB, 454 U.S. 404, 413 (1982); Ford Motor Co. v. NLRB, 441 U.S. 488, 495, 497 (1979); Beth Israel Hosp., 437 U.S. at 500-501 .'° As this Court has stressed, deference is required when the Board’s decisions are based on policy judgments de- signed to effectuate the broad purposes of the statute. See, e.g., Curtin Matheson, 110 5. Ct. at 1542. “It is the Board on which Congress conferred the authority to develop and apply fundamental national labor policy,” and if the Board is to accomplish that task it “necessarily must have authority to formulate rules to fill the interstices of the broad statutory provisions.” Beth Israel Hosp., 437 U.S. at 500-501. Particularly where the Board’s policy judg- ment reflects the agency’s “ ‘difficult and delicate respon- sibility’ of reconciling conflicting interests of labor and management,” that judgment “is ‘subject to limited judicial review.’ ” NLRB vy. J. Weingarten, Inc., 420 U.S. 251, 267 (1975). “The rule which the Board adopts is judicially reviewable for consistency with the Act, and for rationality, but if it satisfies those criteria, the Board’s ap- plication of the rule, if supported by substantial evidence on the record as a whole, must be enforced.” Beth Israel ‘*Deterence is owed to decisions of the Board even where the Board’s position represents a change trom prior policy. NLRB \. J. Weingarien, Inc., 420 U.S. 251, 265-266 (1975) (“To hold that the Board’s earlier decisions troze the development of this important aspect of national labor law would misconceive the nature of ad- ministrative decisionmaking”), quoted with approval im Curtin Matheson, 1108. Ct. at 1549. 17 Hosp., 437 U.S. at 501; accord Curtin Matheson, 110 S. Ct. at 1549. Moreover, deference is particularly due the Board's remedial orders. This Court has long recognized that such an order “should stand unless it can be shown that the order is a patent attempt to achieve ends other than those which can fairly be said to effectuate the policies of the Act.” Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540 (1943). However, the “Board’s ‘power to order at- firmative relief * * * is merely incidental to the primary purpose of Congress to stop and to prevent untair labor practices’” and “nothing in the language or structure o! the [Act] * * * requires the Board to reflexively order that which a complaining party may regard as ‘complete relic!’ for every unfair labor practice.” Shepard v. NLRB, 459 U.S. 344, 352 (1983). B. Under These Principles, The Board's Kule Regarding Arbiira- tion Of Post-Contract’ Expiration Grievances Should Be Upheld 1. This Court has long recognized that the Nationa! Labor Relations Act, although net giving the Board au- thority to remedy all breaches of contract, does vest the Board with power to remedy those breaches that also con- Stitute umfai labor practices. NLRB v. Strong Roofing Co., 393 U.S. 357, 360-361 (1969). A breach of contract that repudiates the collective bargaining agreement, in whole or in part, violates Section 8(a)(5) of the Act, where the “renunciation” of the contractual obligation undercuts “the most basic of collective-bargaining principles, the ac- ceptance and implementation of the bargain reached dur- ing negotiations.” Nedco Const. Co., 206 N.L.R.B. 150, 151 (1973); accord Sea Buy Manor Home for Adults, 25° N.L.R.B, 739, 741 (1980), enforced, 685 F.2d 425 (2d Cy 1982). For that reason, the wholesale repudiation of a con- 18 tractual agreement to arbitrate grievances constitutes a violation of Section 8(a)(5). See, e.g., Paramount Potato Chip Co., 252 N.L.R.B. 794, 796-797 (1980); Independent Stave Co., 233 N.L.R.B. 1202, 1204 (1977), enforced in pertinent part, 591 F.2d 443, 446-448 (8th Cir.), cert. denied, 444 U.S. 829 (1979); see also note 4, supra. In Nolde, this Court held that “termination of a collec- tive-bargaining agreement [does not] automatically extin- guish[ } a party’s duty to arbitrate grievances arising under the contract,” 430 U.S. at 251, and thus concluded that “where the dispute is over a provision of the expired agree- ment, the presumptions favoring arbitrability must be negated expressly or by clear implication,” id. at 255. As the Board explained in Jndiana & Michigan Elec. Co., 284 N.L.R.B. at 59-60, in view of No/de’s strong presumption that the contractual obligation to arbitrate grievances aris- ing under the contract extends to post-expiration dis- putes,'? a blanket refusal to arbitrate post-expiration grievances would violate Section 8(a)(5) and (1) of the Act, absent strong evidence that the parties intended to exclude such disputes from arbitration. Accord United Chrome Prods., Inc., 288 N.L.R.B. 1176 (1988); Uppco, Inc., 288 N.L.R.B. 937 (1988). '? Although Nolde involved an action arising under Section 301 of the Labor Management Relations Act, 29 U.S.C. 185, the Board has properly looked to that decision for guidance in applying the analo- gous principles governing collective bargaining under the National Labor Relations Act. Compare Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 374 (1974) (“No obligation to arbitrate a labor dispute arises solely by operation of the [LMRA)]. The law compels a party to submit his grievance to arbitration only if he has contracted to do so.”) with H.K. Porter Co. v. NLRB, 397 U.S. 99, 107-109 (1970) (under the NLRA, the Board may not compe: agreement on any con- tract term, even as a remedy for a proven violation of the Act); ct. Howard Johnson Co. v. Hotel Employees, 417 U.S. 249, 256 (1974). 19 That aspect of the Board’s rule regarding the duty to ar- bitrate post-contract expiration grievances is unexception- able. As the Board held in Hilton-Davis Chem. Co., 185 N.L.R.B. at 242, and reaffirmed in /ndiana & Michigan Elec. Co., “the Act does not impose a duty to adhere to the arbitration procedure independent of any contractual commitment to do so,” 284 N.L.R.B. at 58.'* On the other hand, it is appropriate for the Board to foster the “strong presumption favoring arbitrability” in order to effectuate the federal labor policy favoring arbitration, and the Board is well aware that employers and unions “draft{ | * * * arbitration clause[s] against a backdrop of [that] well-established * * * policy favoring arbitration as the means of resolving disputes over the meaning and effect of collective-bargaining agreements.” No/de, 430 U.S. at 254. The Board therefore has properly embraced the No/de pre- sumption in the context of construing the Section 8(a)(5) duty to bargain. At che same time, the Board has also en- sured that such a duty —as applied to arbitration of post- contract expiration grievances -- remains grounded on the parties’ intentions; the Board has therefore provided that a party may rebut the presumption by an adequate showing that the parties intended to exclude post-contract expira- tion grievances from arbitration. 2. Similar considerations account for the limited reach of the Board’s rule regarding the duty to arbitrate particu- lar post-contract expiration grievances. Under the express terms of the Act, the duty to bargain “does not compel * For that reason, the doctrine set torthin NLRB vv. Aaiz, 369 U.S 736, 743 (1962)—that an employer must mainiain the status quo with respect to mandatory subjects of bargaming and retrain trom um- lateral changes until bargaiming to impasse — does not render an em ployer’s tailure to arbitrate post-expiration contractual disputes a vivlation of Section 8(4a)(5). See pp. 3-4, supra 20 either party to agree to a proposal or require the making of a concession.” 29 U.S.C. 158(d). And this Court has long recognized that the Board may not compel agreement on any contract term, even as a remedy for a proven violation of the Act. H.K. Porter Co. v. NLRB, 397 U.S. 99, 107-109 (1970). It follows that the Board, in fashioning the scope of the post-expiration duty to arbitrate grievances, must use as a touchstone the collective bargaining agree- ment itself. In other words, the Board’s authority to order arbitration is limited to those grievances that arise under the expired contract, so that the parties may properly be presumed to have agreed to arbitrate them. In Nolde, the Court observed that “the parties’ failure to exclude from arbitrability contract disputes arising after termination * * * affords a basis for concluding that they intended to arbitrate all grievances arising out of the con- tractual relationship.” 430 U.S. at 255. However, in order to anchor the implementation of No/de in the source of the duty to arbitrate—the collective bargaining agreement — the Board has rejected the proposition that “the mere in- vocation of any term of the expired contract triggers the postexpiration duty to arbitrate.” /ndiana & Michigan Elec. Co., 284 N.L.R.B. at 60 n.9. The Board, according- ly, has refused to presume—in the absence of contrary evidence —that the parties intend to arbitrate every post- expiration dispute, regardless of subject matter. '’ '* Accordingly, the Board has distanced itsell trom those courts of appeals —like the court below, see Pet. App. A20-A22— that have construed Nolde as holding that any post-contract expiration dispute based on the contract is arbitrable, as long as the coniract’s broad ar- bitration clause does not explicitly exclude such disputes. See, e.g., Local Joint Executive Bd., Culinary Workers Union, Local 226 \ Royal Center, Inc., 796 F.2d 1159, 1162-1164 (9th Cir. 1986), cert. denied, 479 U.S. 1033 (1987); Federated Metals Corp. \. United 21 Rather, the Board has determined that only those post- expiration grievances concerning “contract rights capable ot accruing or vesting to some degree during the life of the contract and ripening or remaining enforceable after the contract expires” must be arbitrated under the expired contract. Indiana & Michigan Elec. Co., 284 N.L.R.B. at 60; see United Food Workers Union, Local 7 vy. Gold Star Sausage Co., 897 F.2d 1022, 1024-1026 (10th Cir. 1990); Chauffeurs Local Union 238 v. C.R.S.T., Inc., 795 F.2d 1400, 1403 (8th Cir.) (en banc), cert. denied, 479 U.S. 1007 (1986). That limitation stems from the Board’s striking the balance between two fundamental principles identified in Nolde: (1) the principle that “the arbitration duty is a creature of the collective bargaining agreement and [thus] a party cannot be compelled to arbitrate any matter in the absence of a contractual obligation to do so,” 430 U.S. at 250-251; and (2) the “well-established federal labor policy favoring arbitration as the means of resolving disputes over the meaning and effect of collective bargaining agree- ments,” id. at 254. The Board’s rule, “[b]y requiring the dispute to relate back, in some meaningtul sense, to the time during which the collective bargaining agreement was in torce betore Steelworkers, 648 F.2d 856. 861 (3d Cir. IYST), Cort. denied, 454005 1O31 (1981). Nonetheless, in citing those decisions, see Indiana & Michivan Lle« Cu., 284 N.L.R.B. at 60, the Board implicitly recognized that each in volved @ grievance which the Board would likely tind arbitrable under the more restrictive approach it tollows. In Roval Center, the dispute mvolved alleged violations of a “successorship” clause which, by its nature, Could come inte play only alter the business had been sold and the contract terminated. 796 b.2d at 1163. In Federated Metals, vic dispute involved? cheibility tor pension benetits, and turned on whether contractual scnioris fivhis survived expiration of the con lpact. 648 b 2d alt SSS, SOO 22 deeming it to arise under that agreement,” Gold Star Sausage, 897 F.2d at 1026, ensures that the contractual roots of the duty to arbitrate are not abandoned. At the same time, the rule recognizes that the presumption favor- ing arbitrability appropriately applies only to those dis- putes covered by the terms of the agreement.?° Indeed, the Board’s approach is a reasonable means of effectuating the parties’ original intent—the source of the duty to ar- bitrate. As one court has explained: Usually parties have agreed that certain rights, such as pension, disability, seniority and vacation benefits, can accrue or vest during the life of the contract. The realization of some of these rights may be contingent upon a well-defined future event. An employee should not be deprived of already accrued or vested rights on the fortuity that they became ripe for enjoy- ment following the expiration of the agreement. Such an employee remains entitled to such rights and to the dispute resolution process the parties agreed to use to enforce them. While the substantive right to continue to accrue benefits terminates with the contract, the right to arbitrate disputes regarding benefits which may have already accrued or vested survives. 20 The broader rule —that any post-contract expiration dispute bas- ed on the contract is arbitrable, as long as the contract's broad arbitra- tion clause does not explicitly exclude such disputes —has not been deemed by the Board to strike an appropriate balance between the labor principles at stake. As the Tenth Circuit has aptly pointed out, that rule stresses the policy favoring arbitration at the expense of the policy against forcing arbitration on a party who has not agreed 10 it. Essentially, it * * * give[s} [a party] an important part of the benefits of a collective bargaining agreement with none of the al- tendant responsibilities by, in effect, adding an unbargained-tor provision to the parties’ expired contract. Gold Star Sausage, 897 F.2d at 1026. 23 County of Ottawa v. Jaklinski, 423 Mich. 1, 23, 377 N.W.2d 668, 677 (1985). The /ndiana & Michigan rule retlects the Board’s rea- sonable determination that where a substantive right ac- crues Or vests during the term of the contract, the parties intend that right to survive the expiration of the contract. It is therefore appropriate to presume that the duty to ar- bitrate a claimed violation of such an accrued right also survives.*' To hold otherwise would require the Board to assume that the parties intend to preserve the right, yet at the same time eliminate the contractually designated means of enforcing it. On the other hand, where the Board can discern no basis for finding that the parties intend the substantive right at issue to survive the contract’s expira- tion, the Board may reasonably decline to presume that the parties intend to arbitrate that sort of grievance. Given the contractual nature of the duty to arbitrate, the Board certainly need not presume that any party who ever ac- cepts a broad arbitration clause thereby shows an intent to commit itself to arbitration of all disputes “for all time.” Bell Foundry Co., 73 Lab. Arb. 1162, 1166 (1979) (Roberts, Arb.). In sum, the /ndiana & Michigan rule retlects the Board’s “striking [a] balance to effectuate national labor policy.” NLRB vy. Truck Drivers, 353 U.S. at 96. The Board’s rule Arbitrators have long used a similar approach in determining at- burability of grievances arising alter the expiration of a collective bargaining agreement. See, e.g., Westwood Products, 77 Lab. Arb 396, 397 (1981) (Peterschmidt, Arb.) (post-expiration discharges do not involve accrued rights and theretore are not arbitrable), Adarice Machine Co., 74 Lab. Arb. 1088, 1060-1061 (1981) (Feldman, Arb.) (holiday pay is not accrued, but vacation would be accrued); Jhe Brooklyn Eaele, 32 Lab. Arb. 156, 161-163 (1959) (Wirtz. Arbo) Go survive expiration and be arbitrable, rights must be “earned” during the contract's term) 24 furthers the use of arbitration as a means of resolving labor-management disputes, but at the same time seeks to ensure that resort to arbitration over particular disputes ultimately depends on the parties’ mutual consent, as re- flected in the collective bargaining agreement. In view of the fact that the National Labor Relations Act itself calls for such an accommodation of often competing prin- ciples, the Board’s rule is plainly “rational and consistent with the Act.” Curtin Matheson, 1108S. Ct. at 1549 (citing Fall River Dyeing, 482 U.S. at 42). C. The Union's Post-Contract Expiration Grievances Were Not Arbitrable Since They Did Not “Arise Under” The Contract Under the Board’s established doctrine, see pp. 3-4, supra, petitioner’s blanket refusal here to arbitrate the union’s post-contract expiration grievances violated Sec- tion 8(a)(5) and (1) of the Act.?? But that violation, as the 22 Although the Board had no occasion to address the issue, see Pet. App. B9 n.6, the court of appeals correctly concluded that the fact that the layoffs occurred almost one yeat afier the contract expired did not, in itself, relieve petitioner of any contractual duty to ar- bitrate. /d. at Al6n.8. Nolde established no specific time limit beyond which post-expiration grievances are no longer presumed arbitrable. Indeed, imposition of such a limitation here would enable a party in petitioner’s position to profit from its own wrongdoing, Since the record here shows that petitioner’s unlawful refusal to bargain with the union accounted for the lack of a new collective bargaining agree- ment. See note 10, supra. See, e.g., Auto Workers v. Young Radiator Co., 904 F.2d 9, 10 (7th Cir. 1990); Steelworkers v. Fort Put Sreel Casting Division —Conval-Penn, Inc., 635 &.2d 1071, 1078 (3d Cir. 1980), cert. denied, 451 U.S. 985 (1981); but see Teamsters Local 703 \. Kennicott Bros. Co., 771 F.2d 300, 303 (7th Cir. 1985). Moreover, petitioner was not relieved of its ‘contractual duty to ar- bitrate any post-expiration grievances by virtue of the tact that the contract’s general no-strike clause was limited to the “term of ithe] Agreement.” J.A. 34. First, the relevance here of that general clause ty 25 Board determined, did not warrant relief in the form of compulsory arbitration. Under the governing rule set forth in Indiana & Michigan Elec. Co., 284 N.L.R.B. at 60, those layoff grievances were not arbitrable since they did not “arise under” the contract. The court of appeals there- fore erred in declining to uphold that aspect of the Board’s remedial order. First, as the Board found, petitioner decided to convert to “hot-type” operations —the decision that triggered the layotts —in July 1980, some nine months after the contract expired. Pet. App. B3, B16. Moreover, a substantial fac- tor in that decision was petitioner's loss of 30 percent of a major customer's business, an event that also took place al that time. See J.A. 108-109. The layoffs thus not only oc- curred after the contract expired, but also were based en- tirely On events Occurring after that expiration. Second, as the Board determined, the contractual right asserted by the union in the layoff grievances is not “ ‘a right worked for or accumulated over time.’ ” Pet. App. B16 (quoting /ndiana & Michigan Elec. Co., 284 N.L.R.B. at 60). Nor did the Board find any evidence that “the par- ties contemplated that such [a] right[{ ] could ripen or re- main enforceable even after the contract expired.” Pet. App. B16 (quoting /ndiana & Michigan Elec. Co., 284 N.L.R.B. at 60). The contract entitled employees to be laid off on the basis of seniority only “if other things such as aptitude and ability are equal.” J.A. 30. Accordingly, undermined by the contract’s separate clause forbidding strikes over arbitrable grievances. See id. at 34-35. Second, even absent that specilic provision, the Board has held that the no-strike obligation tracks the duty to arbitrate, and therefore continues with respect to those post-expiration disputes that remain arbitrable under Nolde. See Goya Foods, Inc., 238 NAR B. 1465, 1467 (1978). Third. a somilar contention appears to have been mnplhicitly reyected by this Court in Nolde. See 430 U.S. at 257 (Stewart, J., dissenting) 26 any arbitration proceeding would necessarily entail a com- parison between the abilities of laid-off employees and other employees as of the date of the layoffs, i.e., after the contract expired, rather than consideration of events oc- curring, or conditions existing, during the term of the con- tract. In these circumstances, the Board correctly deter- mined that the layoff grievances at issue did not involve vested or accrued rights and thus did not “arise under” the expired contract. , Despite the Board’s straightforward application in this case of the rule adopted in /ndiana & Michigan Elec. Co., the court of appeals declined to uphold the Board’s order, since it construed the Board’s decision as inconsistent with Uppco, Inc., 288 N.L.R.B. $37 (1988), and United Chrome Prods., Inc., 288 N.L.R.B. 1176 (1988). Pet. App. Al9-A20 & n.9. The court of appeals was mistaken. In Uppco, the Board found arbitrable a post-expiration grievance over the failure to recall striking employees on the basis of plantwide seniority. Because the contract re- quired all recalls to be based on seniority —defined as length of service with the employer — and specified five cir- cumstances, not including expiration of the contract, under which seniority would be lost, the Board concluded that seniority rights accrued during the term of the con- tract and that the parties intended that such rights remain enforceable after the contract expired. 288 N.L.R.B. at 940. In United Chrome Prods., the contract again re- quired recalls to be based solely on seniority and detined seniority in terms similar to those involved in Uppco. The Board found that the employees’ seniority rights “were worked for and accumulated over time, and * * * thus arguably remained enforceable after the contract expired.” 288 N.L.R.B. at 1177. The Board also noted that, after the contract had expired, the employer had locked out its em- ployees and then rehired them as new probationary em- 27 ployees — conduct which the Board found was an unlawful attempt to deprive them of seniority rights. /d. at 1176 n.2. The Board viewed this conduct as a tacit admission that the seniority rights survived the contract’s expiration. Id. at 1177. This case is not comparable to Uppco and United Chrome Prods. Here, the contract by its terms makes aptitude and ability the principal criteria for determining an employee's eligibility for layott, and requires resort to seniority only “if oiher things such as aptitude and ability are equal.” J.A. 30. As the Board pointed out in United Chrome Prods., ap- titude and ability are “subjective factors * * * that remain within the control of an employer.” 288 N.L.R.B. at 1177. These are also factors that change constantly. Even if the ap- titude and ability of two employees remain equal during the contract term, such levels of skill may sharply diverge at the later date, and in the changed circumstances, when the employer makes its layoff decision. Because of this potential tor change, the Board has therefore taken the consistent position that the right to have layoff decisions made prin- cipally on the basis of aptitude and ability does not vest or accrue during the term of the contract.? Phe court of appeals reyected this harmonizing of the Board’s deci- sions, stating that “[t}his is not a distinction made by the Board, and we do not Know whether the Board would impose such a distinction.” Pet. App. A20 n.9. In United Chrome Prods., however, the Board explicitly distinguished this case on the ground explained above: Unhke the expired contract in Liston, * * * the expired comtract here provides tor recall solely in terms of semority and does not mclude more subjective factors such ay “aptitude” and “ability” that remain within the control of an employer 288 N.L.R.B. at 1177. The court of appeals’ order remanding the case to the Board tor turther explanainon was therelore unwarranted. Sec NLRB. WU vman-Gordon Co., 94S. 789, 766 0.6 (1969) (plurality opinion). 28 CONCLUSION The judgment of the court of appeals concerning the Board’s order deciining to direct arbitration of the griev- ances should be reversed. Respectfully submitted. KENNETH W. STARR Solicitor General LAWRENCE G. WALLACE Deputy Solicitor General MICHAEL R. LAZERWITZ Assistant to the Solicitor General JERRY M. HUNTER General Counsel D. RANDALL FRYE Acting Deputy General Counsel ROBERT E. ALLEN Associate General Counsel NORTON J. COME Deputy Associate General Counsel - LINDA SHER Assisiant General Counsel DAVID A. FLEISCHER Attorney Natuonal Labor Relations Board dec EMBER 1990 Wi S CAVERNMENT PRINTING, CHEICE bee. Jal oe lel --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385013_0021%3A07. Public record. Not legal advice.