National Labor Relations Board v. General Motors Corp.
373 U.S. 734 (1963)
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Rule of Law:
An "agency shop" arrangement, which conditions employment on the payment of union initiation fees and dues without requiring formal union membership, is a lawful form of union security under the proviso to § 8(a)(3) of the National Labor Relations Act. Therefore, an employer's refusal to bargain over an agency shop proposal constitutes an unfair labor practice under § 8(a)(5).
Facts:
- The United Automobile, Aerospace and Agricultural Implement Workers of America (UAW) represented employees at General Motors Corp. (GM) in a multiplant bargaining unit.
- The existing collective bargaining agreement contained a union shop clause, which was not operative in Indiana due to state law.
- Following an Indiana court decision permitting agency shops, the UAW proposed a new contractual provision for GM's Indiana plants.
- The proposal required all employees, as a condition of continued employment, to pay the union amounts equal to the initiation fees and monthly dues paid by union members.
- The proposal did not require employees to formally join the union; non-members would not be entitled to attend union meetings or vote on union matters.
- GM refused to negotiate the proposal, asserting that an agency shop agreement would be an illegal unfair labor practice under the National Labor Relations Act.
Procedural Posture:
- The UAW filed an unfair labor practice charge against General Motors Corp. with the National Labor Relations Board (NLRB).
- The NLRB, a federal administrative agency, found that GM had committed an unfair labor practice by refusing to bargain over the agency shop proposal and issued an order compelling GM to bargain.
- GM petitioned the U.S. Court of Appeals for the Sixth Circuit for review of the NLRB's order, and the NLRB cross-petitioned for enforcement.
- The Court of Appeals (an intermediate federal appellate court) set aside the NLRB's order, holding that the proposed agency shop would violate the NLRA.
- The U.S. Supreme Court granted certiorari to resolve the issue.
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Issue:
Does an employer commit an unfair labor practice under § 8(a)(5) of the National Labor Relations Act by refusing to bargain over a proposed "agency shop" agreement, which conditions employment on the payment of union dues and fees but not on formal union membership?
Opinions:
Majority - Mr. Justice White
Yes. An employer's refusal to bargain over a proposed agency shop agreement constitutes an unfair labor practice because an agency shop is a permissible form of union security under the National Labor Relations Act. The Court reasoned that the Taft-Hartley amendments to § 8(a)(3) reduced the concept of 'membership,' as a condition of employment, to its 'financial core.' The only obligation enforceable by discharge under a lawful union-shop agreement is the payment of periodic dues and initiation fees. Since an agency shop compels only this financial support to prevent 'free riders,' it imposes no burdens beyond those permitted by a union shop and is the practical equivalent of the 'membership' allowed by the § 8(a)(3) proviso. Because the proposal is a lawful subject of bargaining, the employer has a duty to bargain over it in good faith.
Analysis:
This decision validates the agency shop as a permissible form of union security under federal law, clarifying that the term 'membership' in § 8(a)(3) of the NLRA is not to be read literally. The Court's interpretation focuses on Congress's intent to solve the 'free rider' problem by allowing unions to compel financial support, while simultaneously curbing more coercive forms of compulsory unionism. The ruling establishes that union security arrangements less restrictive than a full union shop are lawful, broadening the scope of mandatory subjects for collective bargaining and providing a key tool for unions in states where compulsory membership is restricted.
