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AMF Bowling Co. v. National Labor Relations Board
Citation: 63 F.3d 1293Docket: Nos. 94-2150, 94-2256
Court: Court of Appeals for the Fourth Circuit; August 29, 1995; Federal Appellate Court
The petition for review by AMF Bowling Company, Incorporated is granted, while the National Labor Relations Board's (NLRB) cross-petition for enforcement is denied. The opinion, written by Judge Niemeyer with Judge Hamilton joining, overturns the NLRB's finding that AMF's declaration of an impasse in negotiations was premature. The NLRB had concluded that AMF's unilateral implementation of its last wage offer violated sections 8(a)(5) and (1) of the National Labor Relations Act, despite finding AMF had bargained in good faith. The court determined that the parties had indeed reached a valid impasse. Background details include AMF's acquisition in 1986 and subsequent efforts to recover from financial losses by reducing labor costs at its Lowville, New York plant. The new owners aimed to lower wages from $9.00 per hour to between $7.50 and $8.00, following a precedent set at their Shelby, Ohio plant, where significant wage and benefit cuts had been negotiated. The existing collective bargaining agreement was due to expire on December 8, 1986, and the Union had requested bargaining for a new agreement. After several negotiation sessions, AMF declared an impasse on January 16, 1987, stating that unless the Union agreed to its final wage proposal by January 20, it would implement the proposal. On January 20, the employees rejected AMF's final offer, and AMF proceeded to implement it the following day. The impasse was characterized by the parties' failure to reach an agreement on wage concessions. Negotiations between the Union and AMF revealed a fundamental disagreement regarding wages and benefits. Initially, the Union proposed a two-year agreement with 8% wage increases, while AMF sought wage and benefit cuts to enhance competitiveness, asserting that current wages were too high. The Union insisted on reviewing AMF’s financials if wage reductions were pursued, as AMF did not claim an inability to pay. During the first session on December 3, 1986, the parties extended the existing contract for a month. In subsequent sessions, AMF proposed significant wage and benefit reductions, citing necessary cuts made at other locations, which the Union rejected, emphasizing a need for a wage freeze in the first year and a minimal increase thereafter. Despite AMF's attempts to negotiate, including a final offer of a weighted wage of $7.34 per hour, the Union maintained its position of not accepting any wage cuts and reiterated its demand for a wage freeze for the first year, leading to a unanimous rejection of AMF’s proposals. The Union expressed its unwillingness to engage in concessionary bargaining without access to the company's financial records. After AMF denied the request for an extension of the current agreement, negotiations resumed on January 14, 1987, with the Union remaining firm on its terms for wages. On January 15, 1987, the final bargaining session before AMF declared an impasse took place, during which AMF attempted to negotiate a wage cut by seeking non-economic concessions from the Union, but no agreement was reached. Following this, on January 16, AMF warned the Union via telegram that it would implement its last offer unless the impasse was broken by January 20. The Union accused AMF of refusing to provide access to financial records and declared that a genuine impasse did not exist, expressing readiness to meet. On January 20, the Union rejected AMF's proposal unanimously, and the next day, AMF implemented it. Subsequently, the parties met twice to resume negotiations but failed to reach an agreement. On May 28, 1987, a petition signed by about 70% of the bargaining unit employees requested the removal of the United Steelworkers of America as their representative, leading AMF to withdraw recognition of the Union. On January 22, 1987, the Union filed an unfair labor practice charge against AMF with the National Labor Relations Board (NLRB), alleging various unfair practices including refusal to allow the Union to examine financial records and unilateral changes to wages without a good faith impasse. The Regional Director filed a complaint based on these charges in September 1987. An additional charge was filed later that month, asserting AMF's unlawful withdrawal of recognition and refusal to bargain. A lengthy trial followed, culminating in the Administrative Law Judge (ALJ) concluding that AMF's actions demonstrated a clear intent to eliminate the Union, having engaged in bad faith bargaining practices, including a premature declaration of impasse and failure to provide necessary wage information. The NLRB supported the ALJ's findings, determining that the impasse regarding the economic package was invalid due to AMF's refusal to provide a wage chart to justify its demands. The Board determined that AMF's refusal to provide a wage chart constituted bad faith bargaining under 8(a)(5), leading to a subsequent impasse deemed not in good faith. However, on appeal, the court found that this refusal could not be classified as bad faith since the wage chart had not been specifically requested. The court also noted a lack of evidence suggesting the Union disbelieved AMF's claims regarding wages or recent negotiations. Consequently, the court reversed the Board's decision and remanded for further evaluation of AMF's overall negotiation conduct and the timing of the impasse declaration. Upon remand, the Board thoroughly reviewed AMF's actions and concluded that the Union failed to prove any bad faith on AMF's part. It highlighted AMF's prompt responses and reasonable engagement in negotiations, dismissing claims of unprofessional conduct or intent to undermine the Union. The Board refuted the administrative law judge's findings of intransigence and determined that the Union's demands did not create unyielding barriers to agreement. Furthermore, the Board noted that the Union had shown flexibility on benefit issues, and it cited comments from a federal mediator indicating the Union had the authority to accept a wage cut. Based on these assessments, the Board maintained that AMF's declaration of impasse was premature and that actions taken by AMF following this declaration violated 8(a)(5) and (1) of the Act. AMF challenged the Board's conclusion regarding the premature declaration, asserting it was unsupported by the record, while the Board sought to enforce its order, prompting a review of whether the record substantiates the Board's findings. Section 8(a)(5) of the National Labor Relations Act prohibits employers from refusing to bargain collectively with employee representatives. This obligation requires employers and employees to meet reasonably and negotiate in good faith regarding wages, hours, and other employment terms, although it does not mandate agreement or concessions from either party. If at any point a party believes that further negotiations will not yield an agreement, it may declare an impasse, provided this declaration is made in good faith and supported by objective facts. In such instances, the employer can unilaterally impose terms and conditions of employment. However, if an employer prematurely or insincerely declares an impasse, it may violate the duty to bargain, leading to accusations of unfair labor practices. In the case of AMF's declaration of impasse on January 16, 1987, the Board found that AMF had bargained in good faith prior to this declaration, which supports the legitimacy of AMF's actions. AMF's negotiations focused on the need for wage concessions to remain competitive, while the Union's refusal to discuss wage reductions—contingent upon reviewing company financials—posed a significant barrier to reaching an agreement. The Union's demand for financial transparency, later deemed improper, was the basis for its refusal to negotiate wage concessions, which it never formally considered. This set the stage for the impasse and subsequent unilateral implementation of AMF's last offer. The Union argued that it was still negotiating on non-wage issues and wage increases, suggesting that an impasse had not been reached. However, an examination of the parties' positions reveals that they were deadlocked on the critical issue of wage concessions by January 15, 1987. AMF's initial request on December 3, 1986, sought a 24% wage concession, which the Union rejected. Throughout the bargaining process, AMF made several wage offers, increasing from $6.72 to $7.34 per hour by January 14, 1987, all of which the Union rejected without any counterproposal indicating a willingness to discuss wage concessions. The Union shifted its demand from an 8% increase to a 6% increase but remained steadfast against any wage reduction, only willing to consider a wage freeze. The Union insisted on reviewing AMF's financial records before discussing wage cuts, which led to an unfair labor practice charge when AMF did not comply. After AMF's final offer was rejected by the Union on January 20, it declared an impasse and unilaterally implemented its last offer the following day. The Union's consistent refusal to negotiate wage concessions and its demand to review AMF's books validated AMF's declaration of an impasse, supported further by the dismissal of the Union's unfair labor charge concerning the financial records. The Union claimed that AMF unlawfully withheld a market wage data chart, asserting that AMF's refusal demonstrated bad faith. However, in AMF I, this claim was rejected, and the case was remanded to explore other potential justifications for a finding of bad faith or the validity of the impasse. The conclusion was that AMF acted appropriately by declaring an impasse based on three key factors: the Board's finding of AMF's good faith bargaining, the Union's unjustified refusal to discuss wage concessions, and AMF's repeated proposals for wage cuts that the Union did not counter. The Board misunderstood the requirements for determining a premature impasse, which is defined as a point in negotiations where both parties, acting in good faith, can reasonably conclude that further bargaining would be futile. This assessment should consider the parties' perspectives at the time of the perceived impasse, rather than merely reflecting one party's dissatisfaction with concessions. The National Labor Relations Act promotes negotiation but does not mandate it when the potential for agreement is objectively negligible. A failure to agree or yield does not inherently demonstrate bad faith. The Act's obligation to bargain is satisfied when parties genuinely reach a point where further discussions appear futile. In this case, the facts are undisputed, and the Board found that AMF's negotiation conduct was in good faith. Although the Board cited movement in negotiations, it overlooked the critical issue of wage concessions, which remained the main point of contention. AMF attempted to clarify negotiations by conceding other issues to focus solely on the wage concession dispute, underscoring the Union's resistance to any concessions. The record indicates that the Union did not provide AMF with any expectation of overcoming wage cut barriers through further negotiations. AMF increased its wage offers from $6.72 to $7.34 per hour without any counterproposal from the Union for wage reductions. The Union communicated that its negotiating committee lacked the authority to negotiate wage concessions and did not express any willingness to move on the issue. AMF's declaration of an impasse is supported not only by the Union's lack of movement but also by the Union's improper rationale for refusing to discuss wage cuts, which was contingent on AMF opening its financial records. AMF did not claim financial hardship but argued that its current wage rates exceeded the market rates and that labor costs needed reduction to maintain competitiveness. The Board's decision in Concrete Pipe and Products Corp. supports the notion that a union's insistence on economic data, when not warranted, can lead to a reasonable declaration of impasse. The circumstances of Concrete Pipe are analogous to AMF's situation, where the Union's refusal to negotiate was a key factor. Consequently, the Board failed to recognize that AMF's declaration of an impasse was justified, leading to the granting of AMF’s petition for review and denial of the Board’s enforcement order.