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Opinion of the Court.
test of good faith bargaining prescribed in Section 8 (d) of the Act, a theory that respondent's bargaining for a management functions clause as a counterproposal to the Union's demand for unlimited arbitration was, “per se,” a violation of the Act.
Counsel for the Board do not contend that a management functions clause covering some conditions of employment is an illegal contract term.15 As a matter of fact, a review of typical contract clauses collected for convenience in drafting labor agreements shows that management functions clauses similar in essential detail to the clause proposed by respondent have been included in contracts negotiated by national unions with many employers." The National War Labor Board, empow
15 Thus we put aside such cases as Labor Board v. National Maritime Union, 175 F. 2d 686 (C. A. 2d Cir. 1949) (bargaining for discriminatory hiring hall clause), where a party bargained for a clause violative of an express provision of the Act.
16 H. R. Doc. No. 125, 81st Cong., 1st Sess. 3–10 (1949) (U. S. Dept. of Labor Bull. No. 908–12); Collective Bargaining Contracts (B. N. A. 1941), 363-368; Classified Provisions of Thirty-Seven Collective Bargaining Agreements for Wage Earners in the Iron and Steel Industry (American Iron & Steel Inst. 1948), 68-73; Tested Clauses for Union Contracts (Labor Relations Inst. 1945), 11-16; Welty, Labor Contract Clauses (1945), 76-82; Hoebreckx, Management Handbook for Collective Bargaining (1947), 177-182; Smith, Labor Law Cases and Materials (1950), 1008-1011; Industrial Relations Research Service Study No. 1, Management's Prerogatives (1945), App.; Pace, Management Prerogatives Defined in Union Contracts (Calif. Inst. Tech. 1945); Teller, Management Functions under Collective Bargaining (1947), 427-437 (23 out of 53 collective bargaining agreements examined by the author contained management functions clauses).
Writers advocating inclusion of detailed management functions clauses in collective bargaining agreements urge the desirability of defining the respective functions of management and labor in matters such as work scheduling consistent with the needs of the particular industry. See Cox and Dunlop, Regulation of Collective Bargaining
Opinion of the Court.
ered during the last war"[t]o decide the dispute, and provide by order the wages and hours and all other terms and conditions (customarily included in collective-bargaining agreements),” 17 ordered management functions clauses included in a number of agreements.18 Several such clauses ordered by the War Labor Board provided for arbitration in case of union dissatisfaction with the exercise of management functions, while others, as in the clause proposed by respondent in this case, provided that management decisions would be final.19 Without intimating any opinion as to the form of management func
by the National Labor Relations Board, 63 Harv. L. Rev. 389 (1950); Hill and Hook, Management at the Bargaining Table (1945), 56138; Teller, Management Functions under Collective Bargaining (1947), 114-116. Separate views on “Management's Right to Manage” were presented by the Labor and Management members of The President's National Labor-Management Conference, November 5– 30, 1945, U. S. Dept. of Labor Bull. No. 77 (1946), 56-62.
17 57 Stat. 163, 166 (1943).
18 United Aircraft Corp., 18 War Lab. Rep. 9 (1944); Mead Corp., 8 War Lab. Rep. 471 (1943); Hospital Supply Co., 7 War Lab. Rep. 526 (1943). See also McQuay-Norris Mfg. Co., 28 War Lab. Rep. 211 (1945); Teller, Management Functions under Collective Bargaining (1947), 29-49.
Disputes as to the content of management functions clauses have also been considered by the present Wage Stabilization Board, Basic Steel Industry, 18 Lab. Arb. Rep. 112 (1952) (recommendation that proposed changes in clause be rejected), and by a Presidential Emergency Board, Northwest Airlines, Inc., 5 Lab. Arb. Rep. 71 (1946) (recommendation that clause be incorporated in agreement).
19 Compare East Alton Mfg. Co., 5 War Lab. Rep. 47 (1942) (arbitration provision ordered), with Atlas Powder Co., 5 War Lab. Rep. 371 (1942) (arbitration provision denied).
Union objections to a management functions clause as covering matters subject to collective bargaining did not deter the War Labor Board from ordering such a clause where deemed appropriate in a particular case. Curtiss-Wright Corp., 25 War Lab. Rep. 83, 114-115 (1945).
Opinion of the Court.
tions clause proposed by respondent in this case or the desirability of including any such clause in a labor agreement, it is manifest that bargaining for management functions clauses is common collective bargaining practice.
If the Board is correct, an employer violates the Act by bargaining for a management functions clause touching any condition of employment without regard to the traditions of bargaining in the particular industry or such other evidence of good faith as the fact in this case that respondent's clause was offered as a counterproposal to the n's demand for unlimited arbitration. The Board's argument is a technical one for it is conceded that respondent would not be guilty of an unfair labor practice if, instead of proposing a clause that removed some matters from arbitration, it simply refused in good faith to agree to the Union proposal for unlimited arbitration. The argument starts with a finding, not challenged by the court below or by respondent, that at least some of the matters covered by the management functions clause proposed by respondent are "conditions of employment” which are appropriate subjects of collective bargaining under Sections 8 (a)(5), 8 (d) and 9 (a) of the Act.21 The Board considers that employer bargaining for a clause under which management retains initial responsibility for work scheduling, a "condition of employment," for the duration of the contract is an unfair labor practice because it is “in derogation of” employees' statu
20 This is not the case of an employer refusing to bargain over an issue on the erroneous theory that, as a matter of law, such an issue did not involve a "condition of employment” within the meaning of the Act. Compare Inland Steel Co. v. Labor Board, 170 F. 2d 247 (C. A. 7th Cir. 1948) (pensions); Labor Board v. J. H. Allison & Co., 165 F. 2d 766 (C. A. 6th Cir. 1948) (merit wage increases).
21 Note 3, supra. See Bus Employees v. Wisconsin Board, 340 U. S. 383, 399 (1951).
Opinion of the Court.
tory rights to bargain collectively as to conditions of employment.22
Conceding that there is nothing unlawful in including a management functions clause in a labor agreement, the Board would permit an employer to “propose” such a clause. But the Board would forbid bargaining for any such clause when the Union declines to accept the proposal, even where the clause is offered as a counterproposal to a Union demand for unlimited arbitration. Ignoring the nature of the Union's demand in this case, the Board takes the position that employers subject to the Act must agree to include in any labor agreement provisions establishing fixed standards for work schedules or any other condition of employment. An employer would be permitted to bargain as to the content of the standard so long as he agrees to freeze a standard into a contract. Bargaining for more flexible treatment of such matters would be denied employers even though the result may be contrary to common collective bargaining practice in the industry. The Board was not empowered so to disrupt collective bargaining practices. On the contrary, the term “bargain collectively” as used in the Act “has been considered to absorb and give statutory approval to the philosophy of bargaining as worked out in the labor movement in the United States.” Telegraphers v. Railway Express Agency, 321 U. S. 342, 346 (1944).
Congress provided expressly that the Board should not pass upon the desirability of the substantive terms of
22 The Board's argument would seem to prevent an employer from bargaining for a "no-strike" clause, commonly found in labor agreements, requiring a union to forego for the duration of the contract the right to strike expressly granted by Section 7 of the Act. However, the Board has permitted an employer to bargain in good faith for such a clause. Shell Oil Co., 77 N. L. R. B. 1306 (1948). This result is explained by referring to the "salutary objective" of such a clause. Bethlehem Steel Co., 89 N. L. R. B. 341, 345 (1950).
Opinion of the Court.
labor agreements. Whether a contract should contain a clause fixing standards for such matters as work scheduling or should provide for more flexible treatment of such matters is an issue for determination across the bargaining table, not by the Board. If the latter approach is agreed upon, the extent of union and management participation in the administration of such matters is itself a condition of employment to be settled by bargaining.
Accordingly, we reject the Board's holding that bargaining for the management functions clause proposed by respondent was, per se, an unfair labor practice. Any fears the Board may entertain that use of management functions clauses will lead to evasion of an employer's duty to bargain collectively as to “rates of pay, wages, hours and conditions of employment” do not justify condemning all bargaining for management functions clauses covering any "condition of employment” as per se violations of the Act. The duty to bargain collectively is to be enforced by application of the good faith bargaining standards of Section 8 (d) to the facts of each case rather than by prohibiting all employers in every industry from bargaining for management functions clauses altogether.
Third. The court below correctly applied the statutory standard of good faith bargaining to the facts of this
It held that the evidence, viewed as a whole, does not show that respondent refused to bargain in good faith by reason of its bargaining for a management functions clause as a counterproposal to the Union's demand for unlimited arbitration. Respondent's unilateral action in changing working conditions during bargaining, now admitted to be a departure from good faith bargaining, is the subject of an enforcement order issued by the court below and not challenged in this Court.
Last term we made it plain that Congress charged the Courts of Appeals, not this Court, with the normal and primary responsibility for reviewing the conclusions of