Operations In Fiscal Year 1988 - National Labor Relations Board

Unfair Labor Practices 85the future bargain collectively with the union regarding like decisionsentailing mandatory subjects of bargaining, and that italso make whole employees who were laid off between Februaryand July 1980 when the equipment was sold.In Collateral Control Corp.," the Board held that, in evaluatingthe mandatory bargaining status of an employer's decision tosubcontract unit work, the General Counsel need not sustain aburden of showing that the decision turned on labor costs when"all that is involved is the substitution of one group of workersfor another to perform the same task in the same plant under theultimate control of the same employer."68The respondent, a third-party guarantor operating a publicwarehouse to guard inventory at the premises of a bankrupt steelmill, laid off guard employees with whom it had signed a collective-bargainingagreement without giving the union notice or anopportunity to bargain. It then subcontracted the work to an independentguard service. The administrative law judge foundthat the respondent violated Section 8(a)(5) and (1) of the Act byfailing to bargain with the union over the decision to subcontractand its effects and that it failed to comply with the provisions ofSection 8(d) by repudiating the parties' contract midterm.The Board agreed with the judge's conclusion that the respondentviolated Section 8(a)(5), but did not base its agreementon the judge's conclusions regarding contract repudiation. Instead,it relied on the Supreme Court's decision in FibreboardCorp. V. NLRB," that an employer must give notice to and, onrequest, bargain with the exclusive bargaining representative ofits employees over a decision and the effects of a decision to subcontractunit work, a mandatory subject of bargaining.The respondent had contended that its decision to subcontractthe guard work was not subject to mandatory bargaining underthe Supreme Court's decision in First National Maintenance Corp.v. NLRB." Specifically, it argued that, with the elimination bysubcontracting of a "profit" it had previously derived from apayroll surcharge to the bankrupt company and its creditors,labor costs were not among the considerations that could haveinfluenced its decision to subcontract, and consequently the decisionwas unamenable to resolution through collective bargaining.The Board rejected this argument.The Board noted that three Fibreboard principles were reaffirmedin First National Maintenance, each applicable to this case:First, no alteration occurred in the company's "basic operation."Second, the basis for the company's decision was a matter "peculiarlysuitable for resolution within the collective bargaining67 288 NLRB No. 41 (Chairman Stephens and Members Johansen and Babson).08 Quoting Justice Stewart's concurring opinion in Fibreboard Corp. v. NLRB, 379 U.S. 203, 224(1964).e° Ibid.76 452 U.S. 666 (1981).