National Labor Relations Board v. Truitt Manufacturing Company
224 F.2d 869 (1955)
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Rule of Law:
An employer's refusal to furnish its financial records to a union to substantiate a claim of inability to pay a proposed wage increase is not, in itself, a per se failure to bargain in good faith in violation of the National Labor Relations Act.
Facts:
- Truitt Manufacturing Company (Truitt) had been bargaining with its employees' union for three years.
- During negotiations in 1953, the union demanded a 10 cents per hour wage increase.
- Truitt offered a 2.5 cents per hour increase, stating on multiple occasions that it could not afford the 10-cent increase.
- Truitt also claimed it was already paying higher wages than its competitors and had lost contracts to lower bidders as a result.
- In response, the union requested that a certified public accountant be allowed to examine Truitt's books, records, and financial data to substantiate the company's claim of inability to pay.
- Truitt refused to permit an examination of its confidential financial information, such as manufacturing costs and dividends, but did offer to produce records relating to bids and wages paid to employees.
Procedural Posture:
- The union filed an unfair labor practice charge against Truitt Manufacturing Company with the National Labor Relations Board (NLRB).
- An NLRB Trial Examiner found that Truitt committed an unfair labor practice by refusing to provide financial documentation for its claim.
- The full NLRB affirmed the finding of an unfair labor practice, holding that an employer claiming an economic basis for refusing a wage increase must, upon request, attempt to substantiate its position with reasonable proof.
- The NLRB petitioned the U.S. Court of Appeals for the Fourth Circuit for enforcement of its order against Truitt.
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Issue:
Does an employer's refusal to provide a union with full access to its confidential financial records to substantiate a claim of inability to pay a wage increase constitute a failure to bargain in good faith under the National Labor Relations Act?
Opinions:
Majority - Parker, Chief Judge
No. An employer's refusal to furnish its financial records to a union to substantiate its claim of inability to pay a wage increase is not, by itself, a failure to bargain in good faith. The National Labor Relations Act requires parties to meet and confer with a sincere desire to reach an agreement, but it does not compel either party to agree to a proposal or make a concession. Forcing an employer to open its confidential books, which contain sensitive information like manufacturing costs, would be a major concession that could be used as a 'club' to force agreement to an unjustified wage rate. The duty to bargain pertains to wages, hours, and conditions of employment, not to matters within the province of management, such as the company's general financial condition. Therefore, refusing to provide such proof does not automatically constitute bad faith.
Analysis:
This decision narrowly construes the employer's disclosure obligations during collective bargaining, creating a strong protection for confidential financial information. It draws a clear line between mandatory subjects of bargaining (like employee wage data) and what it considers to be core management prerogatives (overall financial health). By focusing on the subjective intent to reach an agreement rather than an objective duty to substantiate claims, the court makes it more difficult for the NLRB and unions to prove bad faith bargaining based solely on a refusal to 'open the books.' This ruling sets the stage for future litigation to clarify the extent to which an employer's claim of 'inability to pay' triggers a duty to disclose supporting evidence.
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