CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE DISTRICT OF COLUMBIA CIRCUIT.
Warren, Black, Frankfurter, Douglas, Clark, Harlan, Brennan, Whittaker, Stewart
MR. JUSTICE BRENNAN delivered the opinion of the Court.
This case presents an important issue of the scope of the National Labor Relations Board's authority under § 8 (b)(3) of the National Labor Relations Act,*fn1 which
provides that "It shall be an unfair labor practice for a labor organization or its agents . . . to refuse to bargain collectively with an employer, provided it is the representative of his employees . . . ." The precise question is whether the Board may find that a union, which confers with an employer with the desire of reaching agreement on contract terms, has nevertheless refused to bargain collectively, thus violating that provision, solely and simply because during the negotiations it seeks to put economic pressure on the employer to yield to its bargaining demands by sponsoring on-the-job conduct designed to interfere with the carrying on of the employer's business.
Since 1949 the respondent Insurance Agents' International Union and the Prudential Insurance Company of America have negotiated collective bargaining agreements covering district agents employed by Prudential in 35 States and the District of Columbia. The principal duties of a Prudential district agent are to collect premiums and to solicit new business in an assigned locality known in the trade as his "debit." He has no fixed or regular working hours except that he must report at his district office two mornings a week and remain for two or three hours to deposit his collections, prepare and submit reports, and attend meetings to receive sales and other instructions. He is paid commissions on collections made and on new policies written; his only fixed compensation is a weekly payment of $4.50 intended primarily to cover his expenses.
In January 1956 Prudential and the union began the negotiation of a new contract to replace an agreement expiring in the following March. Bargaining was carried on continuously for six months before the terms of the new contract were agreed upon on July 17, 1956.*fn2 It is
not questioned that, if it stood alone, the record of negotiations would establish that the union conferred in good faith for the purpose and with the desire of reaching agreement with Prudential on a contract.
However, in April 1956, Prudential filed a § 8 (b)(3) charge of refusal to bargain collectively against the union. The charge was based upon actions of the union and its members outside the conference room, occurring after the old contract expired in March. The union had announced in February that if agreement on the terms of the new contract was not reached when the old contract expired, the union members would then participate in a "Work Without a Contract" program -- which meant that they would engage in certain planned, concerted on-the-job activities designed to harass the company.
A complaint of violation of § 8 (b)(3) issued on the charge and hearings began before the bargaining was concluded.*fn3 It was developed in the evidence that the union's harassing tactics involved activities by the member agents such as these: refusal for a time to solicit new business, and refusal (after the writing of new business was resumed) to comply with the company's reporting procedures; refusal to participate in the company's "May Policyholders' Month Campaign"; reporting late at district offices the days the agents were scheduled to attend them, and refusing to perform customary duties at the offices, instead engaging there in "sit-in-mornings," "doing what comes naturally" and leaving at noon as a group; absenting themselves from special business conferences arranged by the company; picketing and distributing leaflets outside the various offices of the company on specified days and hours as
directed by the union; distributing leaflets each day to policyholders and others and soliciting policyholders' signatures on petitions directed to the company; and presenting the signed policyholders' petitions to the company at its home office while simultaneously engaging in mass demonstrations there.
The hearing examiner filed a report recommending that the complaint be dismissed. The examiner noted that the Board in the so-called Personal Products case, Textile Workers Union, 108 N. L. R. B. 743, had declared similar union activities to constitute a prohibited refusal to bargain; but since the Board's order in that case was set aside by the Court of Appeals for the District of Columbia Circuit, 97 U. S. App. D.C. 35, 227 F.2d 409, he did not consider that he was bound to follow it.
However, the Board on review adhered to its ruling in the Personal Products case, rejected the trial examiner's recommendation, and entered a cease-and-desist order, 119 N. L. R. B. 768. The Court of Appeals for the District of Columbia Circuit also adhered to its decision in the Personal Products case, and, as in that case, set aside the Board's order. 104 U. S. App. D.C. 218, 260 F.2d 736. We granted the Board's petition for certiorari to review the important question presented. 358 U.S. 944.
The hearing examiner found that there was nothing in the record, apart from the mentioned activities of the union during the negotiations, that could be relied upon to support an inference that the union had not fulfilled its statutory duty; in fact nothing else was relied upon by the Board's General Counsel in prosecuting the complaint.*fn4 The hearing examiner's analysis of the congressional
design in enacting the statutory duty to bargain led him to conclude that the Board was not authorized to find that such economically harassing activities constituted a § 8 (b)(3) violation. The Board's opinion answers flatly "We do not agree" and proceeds to say ". . . the Respondent's reliance upon harassing tactics during the course of negotiations for the avowed purpose of compelling the Company to capitulate to its terms is the antithesis of reasoned discussion it was duty-bound to follow. Indeed, it clearly revealed an unwillingness to submit its demands to the consideration of the bargaining table where argument, persuasion, and the free interchange of views could take place. In such circumstances, the fact that the Respondent continued to confer with the Company and was desirous of concluding an agreement does not alone establish that it fulfilled its obligation to bargain in good faith . . . ." 119 N. L. R. B., at 769, 770-771. Thus the Board's view is that irrespective of the union's good faith in conferring with the employer at the bargaining table for the purpose and with the desire of reaching agreement on contract terms, its tactics during the course of the negotiations constituted per se a violation of § 8 (b)(3).*fn5 Accordingly, as is said in the Board's brief,
"The issue here . . . comes down to whether the Board is authorized under the Act to hold that such tactics, which the Act does not specifically forbid but Section 7 does not protect,*fn6 support a finding of a failure to bargain in good faith as required by Section 8 (b)(3)."
First. The bill which became the Wagner Act included no provision specifically imposing a duty on either party to bargain collectively. Senator Wagner thought that the bill required bargaining in good faith without such a provision.*fn7 However, the Senate Committee in charge of the bill concluded that it was desirable to include a provision making it an unfair labor practice for an employer to refuse to bargain collectively in order to assure that the Act would achieve its primary objective of requiring an employer to recognize a union selected by his employees as their representative. It was believed that other rights guaranteed by the Act would not be meaningful if the employer was not under obligation to confer with the union in an effort to arrive at the terms of an agreement. It was said in the Senate Report:
"But, after deliberation, the committee has concluded that this fifth unfair labor practice should be inserted in the bill. It seems clear that a guarantee of the right of employees to bargain collectively
through representatives of their own choosing is a mere delusion if it is not accompanied by the correlative duty on the part of the other party to recognize such representatives . . . and to negotiate with them in a bona fide effort to arrive at a collective bargaining agreement. Furthermore, the procedure of holding governmentally supervised elections to determine the choice of representatives of employees becomes of little worth if after the election its results are for all practical purposes ignored. Experience has proved that neither obedience to law nor respect for law is encouraged by holding forth a right unaccompanied by fulfillment. Such a course provokes constant strife, not peace." S. Rep. No. 573, 74th Cong., 1st Sess., p. 12.
However, the nature of the duty to bargain in good faith thus imposed upon employers by § 8 (5) of the original Act*fn8 was not sweepingly conceived. The Chairman of the Senate Committee declared: "When the employees have chosen their organization, when they have selected their representatives, all the bill proposes to do is to escort them to the door of their employer and say, 'Here they are, the legal representatives of your employees.' What happens behind those doors is not inquired into, and the bill does not seek to inquire into it."*fn9
The limitation implied by the last sentence has not been in practice maintained -- practically, it could hardly have been -- but the underlying purpose of the remark has remained the most basic purpose of the statutory provision. That purpose is the making effective of the duty of management to extend recognition to the union; the duty of management to bargain in good faith is essentially
a corollary of its duty to recognize the union. Decisions under this provision reflect this. For example, an employer's unilateral wage increase during the bargaining processes tends to subvert the union's position as the representative of the employees in matters of this nature, and hence has been condemned as a practice violative of this statutory provision. See Labor Board v. Crompton-Highland Mills, Inc., 337 U.S. 217. And as suggested, the requirement of collective bargaining, although so premised, necessarily led beyond the door of, and into, the conference room. The first annual report of the Board declared: "Collective bargaining is something more than the mere meeting of an employer with the representatives of his employees; the essential thing is rather the serious intent to adjust differences and to reach an acceptable common ground. . . . The Board has repeatedly asserted that good faith on the part of the employer is an essential ingredient of collective bargaining."*fn10 This standard had early judicial approval, e. g., Labor Board v. Griswold Mfg. Co., 106 F.2d 713. Collective bargaining, then, is not simply an occasion for purely formal meetings between management and labor, while each maintains an attitude of "take it or leave it"; it presupposes a desire to reach ultimate agreement, to enter into a collective bargaining contract. See Heinz Co. v. Labor Board, 311 U.S. 514. This was the sort of recognition that Congress, in the Wagner Act, wanted extended to labor unions; recognition as the bargaining agent of the employees in a process that looked to the ordering of the parties' industrial relationship through the formation of a contract. See Teamsters Union v. Oliver, 358 U.S. 283, 295.
But at the same time, Congress was generally not concerned with the substantive terms on which the parties
contracted. Cf. Terminal Railroad Assn. v. Brotherhood of Railroad Trainmen, 318 U.S. 1, 6. Obviously there is tension between the principle that the parties need not contract on any specific terms and a practical enforcement of the principle that they are bound to deal with each other in a serious attempt to resolve differences and reach a common ground. And in fact criticism of the Board's application of the "good-faith" test arose from the belief that it was forcing employers to yield to union demands if they were to avoid a successful charge of unfair labor practice.*fn11 Thus, in 1947 in Congress the fear was expressed that the Board had "gone very far, in the guise of determining whether or not employers had bargained in good faith, in setting itself up as the judge of what concessions an employer must make and of the proposals and counterproposals that he may or may not make." H. R. Rep. No. 245, 80th Cong., 1st Sess., p. 19. Since the Board was not viewed by Congress as an agency which should exercise its powers to arbitrate the parties' substantive solutions of the issues in their bargaining, a check on this apprehended trend was provided by writing the good-faith test of bargaining into § 8 (d) of the Act. That section defines collective bargaining as follows:
"For the purposes of this section, to bargain collectively 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 . . . ."*fn12
The same problems as to whether positions taken at the bargaining table violate the good-faith test continue to arise under the Act as amended. See Labor Board v. Truitt Mfg. Co., 351 U.S. 149; Labor Board v. Borg-Warner Corp., 356 U.S. 342, 349. But it remains clear that § 8 (d) was an attempt by Congress to prevent the Board from controlling the settling of the terms of collective bargaining agreements. Labor Board v. American National Ins. Co., 343 U.S. 395, 404.
Second. At the same time as it was statutorily defining the duty to bargain collectively, Congress, by adding § 8 (b)(3) of the Act through the Taft-Hartley amendments, imposed that duty on labor organizations. Unions obviously are formed for the very purpose of bargaining collectively; but the legislative history makes it plain that Congress was wary of the position of some unions, and wanted to ensure that they would approach the bargaining table with the same attitude of willingness to reach an agreement as had been enjoined on management earlier. It intended to prevent employee ...