Metlox Manufacturing Company v. National Labor Relations Board

378 F.2d 728

• Court: Court of Appeals for the Ninth Circuit
• Decided: May 5, 1967
• Docket: 20299_1
• Status: Published

Opinions

WASHINGTON, Senior Circuit Judge:

The Company in this case claimed that it could not give a wage increase or grant other economic benefits to its employees because of financial inability on its part. The Union suggested that the inability to pay might be due to inefficient management, to excessive executive salaries, or to a bleeding of the assets by controlling stockholders. The Company’s reply offered to allow the Union to choose a Certified Public Accountant, subject to the Company’s approval, and to permit him to make an unlimited examination of the Company’s books. The examination was to be made in the Company’s office, with the cost borne by the Union. However, the details of the Company’s financial records were — said the Company — not to be disclosed to the Union or to any third parties. The C.P.A. could only advise the Union whether or not the Company’s profit and loss statements “were true” and perhaps, although the offer was found by the Board not to be clear on this point, whether or not the statements constituted fair representations of the Company’s actual financial position.

The Union was dissatisfied with the amount of disclosure permitted by this offer, and ultimately called a strike. The Board, after holding a hearing, concluded that the Company had refused to bargain in good faith with the Union, in violation of Section 8(a) (5) and (1) of the National Labor Relations Act, in that it had unduly restricted the Union’s access to details of its financial and other records. It said:

“ * * * A union is not entitled to review the records of Respondent” [the Company] for the purpose of enabling “the Union to suggest or urge efficiency or other changes which could make more funds available for wages. * * * But, good faith bargaining, in requiring an employer to substantiate his inability-to-pay plea, requires the employer to show that the figures of profit and loss are not only accurate but that they do or do not constitute fair representations of the company’s financial condition.”

* * * * * *

We “find that Respondent in limiting the accountant to a ‘yes or no’ report is not substantiating or permitting substantiation of its inability-to-pay plea, and by this conduct it has not bargained in good faith.” [Footnote citations omitted.] We “cannot with preciseness indicate here the scope that the accountant’s report should take. Elaboration or explanation of his conclusions should be permitted; on the other hand, the report need not be an efficiency survey and critique.”

**

The Board found that the strike was caused by the Company’s refusal to bargain in good faith.

The Board’s order directed the Company to cease and desist from refusing to bargain in good faith with the Union, and from interfering in any manner with the efforts of the Union to bargain collectively. The Company was ordered affirmatively to bargain collectively with the Union upon request; to reinstate the striking employees upon application; to make them whole for any loss of earnings resulting from a failure to reinstate; and to post appropriate notices.

Whatever else may be said about the claims advanced on either side, it seems clear that the Board could properly conclude that it was inconsistent with good faith bargaining for the Company to insist upon limiting disclosure by the accountant to the Union to a naked “yes or no” answer as to whether the profit and loss statements furnished by the Company fairly reflected the Company’s financial condition. A reasonable amount of explanation and elaboration seems not only to be relevant but also ■“reasonably' necessary” to enable the Union, in its role as bargaining agent, to form a fair judgment as to the Company’s claimed inability to meet any of the Union’s demands. Curtiss-Wright Corp., Wright Aeronautical Div. v. NLRB, 347 F.2d 61, 68 (3d Cir. 1965).

The Board properly refrained from specifying in advance precisely what details must be furnished to render the accountant’s report meaningful to the Union. That determination must necessarily await the event.

The petition for review will be denied, and the Board’s order will be enforced.

And see the Full Board’s summary of its holding in this case in White Furniture Co., 161 N.L.R.B. No. 23, 63 N.R.R.M. 1227 (1966), where it said in part:

“The Board has also declined to require an employer to give a union such sensitive information as executive sal-

aries and detailed breakdowns of operating expenses.io

10. Metlox Manufacturing Company, supra, footnote 7, at 1394r-95. The Board there approved a check of the employer’s books by a union accountant, limited to the purposes of verifying profit and loss figures offered by the employer and determining whether there were any factors that would make the employer’s figures misleading.”