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FORD MOTOR CO. (CHICAGO STAMPING PLANT) v. NATIONAL LABOR RELATIONS BOARD ET AL.

SUPREME COURT OF THE UNITED STATES


decided: May 14, 1979.

FORD MOTOR CO. (CHICAGO STAMPING PLANT
v.
NATIONAL LABOR RELATIONS BOARD ET AL.

CERTIORARI TO THE UNITED STATES COURT OF APPEALS FOR THE SEVENTH CIRCUIT.

White, J., delivered the opinion of the Court, in which Burger, C. J., and Brennan, Stewart, Marshall, Powell, Rehnquist, and Stevens, JJ., joined. Powell, J., filed a concurring opinion, post, p. 503. Blackmun, J., filed an opinion concurring in the result, post, p. 504.

Author: White

[ 441 U.S. Page 490]

 MR. JUSTICE WHITE delivered the opinion of the Court.

The principal question*fn1 in this case is whether prices for in-plant cafeteria and vending machine food and beverages are "terms and conditions of employment" subject to mandatory collective bargaining under §§ 8 (a)(5) and 8 (d) of the National Labor Relations Act. 49 Stat. 452, as amended, 29 U. S. C. §§ 158 (a)(5) and 158 (d).*fn2

[ 441 U.S. Page 491]

     I

Petitioner, Ford Motor Co., operates an automotive parts stamping plant in Chicago Heights, Ill., employing 3,600 hourly rated production employees. These employees are represented in collective bargaining with Ford by the International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, and by its administrative component, Local 588, a respondent here.

For many years, Ford has undertaken to provide in-plant food services to its Chicago Heights employees.*fn3 These services, which include both cafeterias and vending machines, are managed by an independent caterer, ARA Services, Inc.

[ 441 U.S. Page 492]

     Under its contract with Ford, ARA furnishes the food, management, machines, and personnel in exchange for reimbursement of all direct costs and a 9% surcharge on net receipts.*fn4 Ford has the right to review and approve the quality, quantity, and price of the food served.

Over the years, Ford and the Union have negotiated about food services. The National Labor Relations Board (Board) found:

"Since 1967, the local contract has included provisions dealing with vending and cafeteria services. The contracts have covered the staffing of service lines, adequate cafeteria supervision, restocking and repairing vending machines, and menu variety. The 1974 local agreement also states, 'the Company recognized its continuing responsibility for the satisfactory performance of the caterer and for the expeditious handling of complaints concerned with such performance.' " Ford Motor Co. (Chicago Stamping Plant), 230 N.L.R.B. 716 (1977), enf'd, 571 F.2d 993 (CA7 1978).

Ford, however, has always refused to bargain about the prices of food and beverages served in its in-plant facilities.

On February 6, 1976, Ford notified the Union that cafeteria and vending machine prices would be increased shortly by unspecified amounts. The Union requested bargaining over both price and services and also asked for information relevant to Ford's involvement in food services in order to assist bargaining. These requests were refused by Ford, which took the position that food prices and services are not terms or conditions of employment subject to mandatory bargaining.

[ 441 U.S. Page 493]

     The Union then filed an unfair labor practice charge with the Board, alleging a refusal to bargain contrary to § 8 (a)(5).*fn5 The Board sustained the charge, ordering Ford to bargain on both food prices and services and to supply the Union with the relevant information requested. Ford Motor Co. (Chicago Stamping Plant), supra. In doing so, the Board reaffirmed its position, expressed in several prior cases, that prices of in-plant-supplied food and beverages are generally mandatory bargaining subjects, a position that had not been accepted by reviewing courts.*fn6 The Board also noted that the circumstances of this case made it a particularly strong one for invoking the duty to bargain.*fn7

[ 441 U.S. Page 494]

     The case came before the Court of Appeals for the Seventh Circuit on Ford's petition for review and the Board's cross-petition for enforcement. That court, while adhering to its prior decision in NLRB v. Ladish Co., 538 F.2d 1267 (1976), which had refused enforcement of a Board order to bargain about in-plant food prices, enforced the Board's order here because, "under the facts and circumstances of this case, in-plant cafeteria and vending machine food prices and services materially and significantly affect and have an impact upon terms and conditions of employment and therefore are mandatory subjects of bargaining." 571 F.2d, at 1000. The court was particularly influenced by the lack of reasonable eating alternatives for employees, declaring that "[the] food one must pay for and eat as a captive customer within the employer's plant can be viewed as a physical dimension of one's working environment." Ibid.

Because of the importance of the issue and the apparent conflict between the decision below and decisions of other Circuits, see n. 6, supra, we granted certiorari. 439 U.S. 891 (1978). We affirm the judgment of the Court of Appeals for the Seventh Circuit enforcing the Board's order to bargain.

II

The Board has consistently held that in-plant food prices are among those terms and conditions of employment defined

[ 441 U.S. Page 495]

     in § 8 (d) and about which the employer and union must bargain under §§ 8 (a)(5) and 8 (b)(3). See n. 6, supra. Because it is evident that Congress assigned to the Board the primary task of construing these provisions in the course of adjudicating charges of unfair refusals to bargain and because the "classification of bargaining subjects as 'terms or conditions of employment' is a matter concerning which the Board has special expertise," Meat Cutters v. Jewel Tea Co., 381 U.S. 676, 685-686 (1965), its judgment as to what is a mandatory bargaining subject is entitled to considerable deference.

Section 8 (a)(5) of the National Labor Relations Act, as originally enacted, declared it an unfair practice for the employer to refuse to bargain collectively. Act of July 5, 1935, 49 Stat. 453. Although the Act did not purport to define the subjects of collective bargaining, § 9 (a) made the union selected by a majority in a bargaining unit the exclusive representative of the employees for bargaining about "rates of pay, wages, hours of employment, or other conditions of employment." Under these provisions, the Board was left with the task of identifying on a case-by-case basis those "other conditions of employment" over which management was required to bargain.

In 1947, the Taft-Hartley Act amended the National Labor Relations Act to obligate unions as well as management to bargain; and § 8 (d) explicitly defined the duty of both sides to bargain as the obligation to "meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment . . . ." 61 Stat. 142, now codified at 29 U. S. C. § 158 (d). The original House bill had contained a specific listing of the issues subject to mandatory bargaining, H. R. 3020, 80th Cong., 1st Sess., § 2 (11) (1947); H. R. Rep. No. 245, 80th Cong., 1st Sess., 22-23, 49 (1947), but this attempt to "[strait-jacket]" and to "limit narrowly the subject matters appropriate for collective bargaining,"

[ 441 U.S. Page 496]

     Of course, the judgment of the Board is subject to judicial review; but if its construction of the statute is reasonably defensible, it should not be rejected merely because the courts might prefer another view of the statute. NLRB v. Iron Workers, 434 U.S. 335, 350 (1978). In the past we have refused enforcement of Board orders where they had "no reasonable basis in law," either because the proper legal standard was not applied or because the Board applied the correct standard but failed to give the plain language of the standard its ordinary meaning. Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 166 (1971). We have also parted company with the Board's interpretation where it was "fundamentally inconsistent with the structure of the Act" and an attempt to usurp "major policy decisions properly made by Congress." American Ship Building Co. v. NLRB, 380 U.S. 300, 318 (1965). Similarly, in NLRB v. Insurance Agents, supra, at 499, we could not accept the Board's application of the Act where we were convinced that the Board was moving "into a new area of regulation which Congress had not committed to it."

The Board is vulnerable on none of these grounds in this case. Construing and applying the duty to bargain and the language of § 8 (d), "other terms and conditions of employment," are tasks lying at the heart of the Board's function. With all due respect to the Courts of Appeals that have held otherwise, we conclude that the Board's consistent view that in-plant food prices and services are mandatory bargaining subjects is not an unreasonable or unprincipled construction of the statute and that it should be accepted and enforced.

[ 441 U.S. Page 498]

     It is not suggested by petitioner that an employee should work a full 8-hour shift without stopping to eat. It reasonably follows that the availability of food during working hours and the conditions under which it is to be consumed are matters of deep concern to workers, and one need not strain to consider them to be among those "conditions" of employment that should be subject to the mutual duty to bargain. By the same token, where the employer has chosen, apparently in his own interest, to make available a system of in-plant feeding facilities for his employees, the prices at which food is offered and other aspects of this service may reasonably be considered among those subjects about which management and union must bargain.*fn10 The terms and conditions under which food is available on the job are plainly germane to the "working environment," Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 222 (1964) (STEWART, J., concurring). Furthermore, the company is not in the business of selling food to its employees, and the establishment of in-plant food prices is not among those "managerial decisions, which lie at the core of entrepreneurial control." Id., at 223 (STEWART, J., concurring). The Board is in no sense attempting to permit the Union to usurp managerial decisionmaking; nor is it seeking to regulate an area from which Congress intended to exclude it.

Including within § 8 (d) the prices of in-plant-supplied food and beverages would also serve the ends of the National Labor Relations Act. "The object of this Act was not to allow governmental regulation of the terms and conditions of employment, but rather to insure that employers and their employees could work together to establish mutually satisfactory conditions. The basic theme of the Act was that through collective bargaining the passions, arguments, and struggles of prior years would be channeled into constructive,

[ 441 U.S. Page 499]

     open discussions leading, it was hoped, to mutual agreement." H. K. Porter Co. v. NLRB, 397 U.S. 99, 103 (1970). As illustrated by the facts of this case, substantial disputes can arise over the pricing of in-plant-supplied food and beverages. National labor policy contemplates that areas of common dispute between employers and employees be funneled into collective bargaining. The assumption is that this is preferable to allowing recurring disputes to fester outside the negotiation process until strikes or other forms of economic warfare occur.

The trend of industrial practice supports this conclusion. In response to increasing employee concern over the issue, many contracts are now being negotiated that contain provisions concerning in-plant food services.*fn11 In this case, as

[ 441 U.S. Page 500]

     already noted, local agreements between Ford and the Union have contained detailed provisions about non-price aspects of in-plant food services for several years. Although not conclusive, current industrial practice is highly relevant in construing the phrase "terms and conditions of employment."*fn12

III

Ford nevertheless argues against classifying food prices and services as mandatory bargaining subjects because they do not "vitally affect" the terms and conditions of employment within

[ 441 U.S. Page 501]

     the meaning of the standard assertedly established by Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S., at 176, and because they are trivial matters over which neither party should be required to bargain.

There is no merit to either of these arguments. First, Ford has misconstrued Pittsburgh Plate Glass . That case made it clear that while § 8 (d) normally reaches "only issues that settle an aspect of the relationship between the employer and employees[,] matters involving individuals outside the employment relationship . . . are not wholly excluded." 404 U.S., at 178. In such instances, as in Teamsters v. Oliver, 358 U.S. 283 (1959), and Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203 (1964), the test is not whether the "third-party concern is antagonistic to or compatible with the interests of bargaining-unit employees, but whether it vitally affects the 'terms and conditions' of their employment." 404 U.S., at 179. Here, however, the matter of in-plant food prices and services is an aspect of the relationship between Ford and its own employees. No third-party interest is directly implicated, and the standard of Pittsburgh Plate Glass has no application.

As for the argument that in-plant food prices and service are too trivial to qualify as mandatory subjects, the Board has a contrary view, and we have no basis for rejecting it. It is also clear that the bargaining-unit employees in this case considered the matter far from trivial since they pressed an unsuccessful boycott to secure a voice in setting food prices. They evidently felt, and common sense also tells us, that even minor increases in the cost of meals can amount to a substantial sum of money over time. In any event, we accept the Board's view that in-plant food prices and service are conditions of employment and are subject to the duty to bargain.

Ford also argues that the Board's position will result in unnecessary disruption because any small change in price or service will trigger the obligation to bargain. The problem, it

[ 441 U.S. Page 502]

     is said, will be particularly acute in situations where several unions are involved,*fn13 possibly requiring endless rounds of negotiations over issues as minor as the price of a cup of coffee or a soft drink.

These concerns have been thought exaggerated by the Board. Its position in this case, as in all past cases involving the same issue, is that it is sufficient compliance with the statutory mandate if management honors a specific union request for bargaining about changes that have been made or are to be made. Ford Motor Co. (Chicago Stamping Plant), 230 N. L. R. B., at 718; Westinghouse Electric Corp., 156 N. L. R. B. 1080, 1081, enf'd, 369 F.2d 891 (CA4 1966), rev'd en banc, 387 F.2d 542 (1967). The Board apparently assumes that, as a practical matter, requests to bargain will not be lightly made. Moreover, problems created by constantly shifting food prices can be anticipated and provided for in the collective-bargaining agreement. Furthermore, if it is true that disputes over food prices are likely to be frequent and intense, it follows that more, not less, collective bargaining is the remedy. This is the assumption of national labor policy, and it is soundly supported by both reason and experience.*fn14

[ 441 U.S. Page 503]

     Finally, Ford asserts that to require it to engage in bargaining over in-plant food service prices would be futile because those prices are set by a third-party supplier, ARA. It is true that ARA sets vending machine and cafeteria prices, but under Ford's contract with ARA, Ford retains the right to review and control food services and prices. In any event, an employer can always affect prices by initiating or altering a subsidy to the third-party supplier such as that provided by Ford in this case, and will typically have the right to change suppliers at some point in the future. To this extent the employer holds future, if not present, leverage over in-plant food services and prices.*fn15

We affirm, therefore, the Court of Appeals' judgment upholding the Board's determination in this case that in-plant food services and prices are "terms and conditions of employment" subject to mandatory bargaining under §§ 8 (a)(5) and 8 (d) of the National Labor Relations Act.

So ordered.

Disposition

571 F.2d 993, affirmed.

MR. JUSTICE POWELL, concurring.

The Court today holds that prices for in-plant cafeteria and vending machine food and beverages are "terms and conditions of employment" subject to mandatory collective bargaining under the National Labor Relations Act. Although this view of the Act has been taken consistently by the National Labor Relations Board, none of the courts of appeals

[ 441 U.S. Page 504]

     has agreed with the absolute approach of the Board. Rather, these courts in general have taken the position that whether bargaining with respect to in-plant food service was required depends upon the facts and circumstances of each case. Although the Court of Appeals for the Seventh Circuit enforced the Board's order in this case, it did so on a "facts and circumstances" basis.

I had thought that the case-by-case approach was more likely to be fair to both employer and union than is the mandatory bargaining rule adopted today. The conditions and circumstances under which in-plant food service is provided can and do vary widely among the thousands of enterprises subject to the Act. Yet, curiously enough, neither petitioner nor respondent union in this case supports the "facts and circumstances" approach of the Court of Appeals. On balance, I suppose there is merit in having a "bright line" with respect to this issue. This does put the parties to all collective bargaining on prior notice, with a reasonable expectation that the issue usually will be resolved in advance at the bargaining table. I am, therefore, persuaded to join the Court's opinion.

MR. JUSTICE BLACKMUN, concurring in the result.

I am in accord with much -- indeed with most -- of what the Court pronounces in its opinion, and I join its judgment.

My concern is with the last two sentences of the penultimate paragraph of the Court's opinion. Ante, at 503. The Court there says that "[in] any event" an employer, by initiating or altering a subsidy to a third-party supplier, "can always affect prices" and "will typically have the right to change suppliers at some point in the future." Thus, to this extent, "the employer holds future, if not present, leverage over in-plant food services and prices." To me, this language seems to say that Ford's control over prices under the facts of this case is really irrelevant to the "mandatory subject" inquiry, and seems to imply that an employer must bargain about prices even if he has no actual control over them at all.

[ 441 U.S. Page 505]

     Any employer, of course, could achieve some measure of future control over prices, by initiating a subsidy or by changing suppliers. That future possibility, however, should not be enough.

If the employer has no control over prices, bargaining about them is futile. If the employer rents space in a corner of the plant to a restaurateur, and thereafter maintains a "hands off" attitude and has no input into the food operation, it is difficult for me to see how bargaining about food prices makes any sense. The employer has no more control over prices by virtue of its landlord status than it has over prices charged at the hamburger shop across the street. If the employer really has no control over prices, moreover, it is not obvious that the prices charged "settle an aspect of the relationship between the employer and employees," Chemical & Alkali Workers v. Pittsburgh Plate Glass Co., 404 U.S. 157, 178 (1971), a precondition for mandatory bargaining status. The pertinent relationship is then between the restaurateur and the employees. If the employer has no control over prices and services whatsoever, and if he nevertheless is required to bargain about them because in the future he might be able to exercise some control over them, the employer's "managerial decision making" may well be usurped, and we are close to the basic concern of the concurrence in Fibreboard Paper Products Corp. v. NLRB, 379 U.S. 203, 222 (1964).

I think it is unwise to go out of our way to hold -- if the Court does so here -- that an employer with no present actual influence or control over food prices should be forced to bargain about them because of the mere possibility that he might have "future leverage." That situation is not presented in this case, and I see no need for the Court to decide it. For now, I prefer only a general rule that food prices are mandatorily bargainable so long as the employer, as here, has some measure of actual influence over the prices charged.

I thus join the Court in the result it reaches in this case. I would reserve other situations for another day.

Counsel FOOTNOTES

* P. Kevin Connelly filed a brief for the National Automatic Merchandising Assn. as amicus curiae urging reversal.

J. Albert Woll, Robert Mayer, and Laurence Gold filed a brief for the American Federation of Labor and Congress of Industrial Organizations as amicus curiae urging affirmance.


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