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NLRB v. A-1 King Size Sandwich

Court of Appeals for the Eleventh Circuit
732 F.2d 872 (1984)
ELI5:

Rule of Law:

An employer engages in unlawful surface bargaining in violation of the National Labor Relations Act when it insists on a combination of contract proposals that are so harsh, unreasonable, and predictably unacceptable that they indicate the employer has no genuine intention of reaching an agreement.


Facts:

  • The Hotel, Motel, Restaurant Employees & Bartenders Union, Local No. 737 was certified as the exclusive bargaining representative for employees at A-1 King Size Sandwiches, Inc. (Company).
  • Over an eleven-month period, the Company and the Union held eighteen bargaining sessions to negotiate an initial collective bargaining agreement.
  • The Company proposed retaining sole control over wages through a merit-based system where its decisions were final and not subject to grievance or arbitration.
  • The Company insisted on an expansive Management Rights clause giving it exclusive and unilateral authority over nearly all conditions of employment, including discipline, discharge, layoffs, subcontracting, and abolishing jobs.
  • The Company's proposals included an extremely broad no-strike clause prohibiting strikes for any reason, including unfair labor practices, and a zipper clause waiving the right to bargain over any subject during the contract's term.
  • The Company refused to include a standard clause requiring 'just cause' for discipline and discharge and rejected the Union's proposal for seniority to be a factor in layoffs and recalls.
  • The Company also rejected the Union's proposals for dues check-off and a non-discrimination clause, providing reasons the court later found to be pretextual.
  • The Union offered to accept the Company's management rights, no-strike, and zipper clauses in exchange for a 'just cause' provision and seniority rights, but the Company refused this compromise.

Procedural Posture:

  • The Hotel, Motel, Restaurant Employees & Bartenders Union, Local No. 737 filed an unfair labor practice charge against A-l King Size Sandwiches, Inc. (the Company) with the National Labor Relations Board (NLRB).
  • An Administrative Law Judge (ALJ) found that the Company had violated Section 8(a)(1) and (5) of the National Labor Relations Act by engaging in surface bargaining with no intention of entering into an agreement.
  • The Company appealed the ALJ's decision to the full NLRB.
  • The NLRB affirmed the ALJ’s rulings, findings, and conclusions, and issued an order against the Company.
  • The NLRB applied to the U.S. Court of Appeals for enforcement of its order.

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Issue:

Does an employer engage in surface bargaining in violation of Section 8(a)(5) of the National Labor Relations Act by insisting on a combination of contract proposals that grant it unilateral control over virtually all significant terms and conditions of employment, thereby stripping the union of its representative function?


Opinions:

Majority - Dyer, Senior Circuit Judge

Yes, an employer engages in surface bargaining by insisting on such proposals. While the National Labor Relations Act does not compel agreement or force concessions, the duty to bargain requires more than merely entering into a sterile discussion. The National Labor Relations Board (NLRB) and reviewing courts may examine the substance of bargaining proposals to determine if a party is negotiating in good faith. Here, the totality of the Company’s proposals demonstrates a lack of good faith because they insisted on unilateral control over virtually all significant terms and conditions of employment, such as wages, discipline, layoffs, and subcontracting. The Company's proposals on management rights, no-strike, and zipper clauses, combined with its rejection of standard provisions like 'just cause' and seniority, would have left the Union and employees with fewer rights and protections than they had with union certification alone. By insisting on proposals that were predictably unworkable and offered no real incentive for the Union to surrender statutory rights, the Company revealed it had no intention of reaching a collective bargaining agreement.



Analysis:

This case clarifies the distinction between lawful 'hard bargaining' and unlawful 'surface bargaining.' It affirms that the substance of a party's proposals, standing alone, can be sufficient evidence of bad faith, even without external evidence of anti-union animus. The decision establishes that an employer cannot lawfully insist on a combination of proposals that would effectively nullify the union's role and require employees to waive their statutory rights without any meaningful concessions in return. This precedent gives the NLRB and courts a basis to find an unfair labor practice when an employer's bargaining position makes a meaningful agreement functionally impossible, thereby protecting the integrity of the collective bargaining process.

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