Operations In Fiscal Year 1988 - National Labor Relations Board

14 Fifty-Third Annual Report of the National Labor Relations Boardclosure of the information would not prevent the Postal Servicefrom selecting or rejecting supervisory candidates as it pleased.24The duty to furnish information was the subject of anothercase of interest this year. In that case, the Seventh Circuit rejectedthe Board's fmding that an employer had, in effect, claimedan inability to afford existing labor costs, giving rise to an obligationto furnish supporting data to the union bargaining representativeon request." A leading case in this area of the law isNLRB v. Truitt Mfg. Co." The Supreme Court there held that itis an unfair labor practice for an employer who claims to be financiallyincapable of paying a wage increase requested by aunion to refuse to let the union see the employer's books for purposesof verifying its claim. Emphasizing the statutory policy ofensuring that parties in collective bargaining confine themselvesto good-faith dealing and "honest claims," the Court stated: "If. . . an argument is important enough to present in the give andtake of bargaining, it is important enough to require some sort ofproof of its accuracy."27Turning to the facts of this case, the Seventh Circuit foundthat, although the company had never claimed that it was unableto pay existing wages and benefits, it had done more than merelyexpress a desire for lower costs and higher profits. Thus, thecompany had claimed that wage cuts were necessary if the companywas to remain competitive and reverse a trend of losingbusiness to lower cost competitors, threatening that its survivaland employees' jobs were at stake. Initially, the court observedthat it was "not an irrational extension of Truitt" for the Boardto hold that the company's statements were sufficient to create aduty of substantiation to the union. But, the court added, "[t]heproblem is that right after [the Board] ruled in favor of the unionwe decided NLRB v. Harvstone Mfg. Corp. . . . a case similar tothe present one, against the Board." 22 The court characterizedits decision in Harvstone as holding that "predictions that a businesswill falter—even that it will close—are 'nothing more thantruisms' . . . and do not trigger the duty of disclosure underTruitt, a duty that we deemed limited to inability to pay during'the term [ordinarily 3 years] of the new collective bargainingagreement' being negotiated." 22 Although the Board had citedits own decision in Harvstone in this case and the company hadthereafter moved for reconsideration, citing the Seventh Circuit'sreversal of the Board in Harvstone, the Board had summarilydenied the motion.24 Id. at 146.25 Nielsen Lithographing Co. v. NLRB, 854 F.2d 1063.26 351 U.S. 149 (1956). See also Atlanta Hilton & Tower, 271 NLRB 1600,1602-1603 (1984).27 351 U.S. at 152-153.28 854 F 2d at 1065 (citing Harvstone, 785 F.2d 570 (7th Cir. 1986)).29 854 F.2d at 1065-1066 (quoting Harvstone, 785 F.2d at 577).