Textile Workers Union v. Darlington Manufacturing Co.
13 L. Ed. 2d 827, 1965 U.S. LEXIS 2305, 380 U.S. 263 (1965)
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Rule of Law:
An employer has an absolute right under the National Labor Relations Act to terminate its entire business for any reason, including anti-union animus. However, an employer commits an unfair labor practice if it closes part of its business with the purpose and foreseeable effect of chilling unionism in the remaining parts of its enterprise.
Facts:
- Darlington Manufacturing Company, a textile mill in South Carolina, was majority-owned by Deering Milliken, which was controlled by Roger Milliken and his family.
- The Milliken family, through Deering Milliken, operated a large, integrated enterprise of 17 textile manufacturers and 27 mills.
- In March 1956, the Textile Workers Union began an organizational campaign at the Darlington mill.
- Darlington management resisted the campaign, including threatening to close the mill if the union won.
- On September 6, 1956, the union won the representation election by a narrow margin.
- Upon learning of the union victory, Roger Milliken called a board meeting to consider closing the mill, stating the union's election diminished hope of achieving competitive costs.
- On September 12, 1956, Darlington's board of directors voted to liquidate the corporation.
- The plant ceased operations in November 1956, and all its machinery was sold at auction in December.
Procedural Posture:
- The Textile Workers Union filed unfair labor practice charges against Darlington Manufacturing Co. with the National Labor Relations Board (NLRB).
- The NLRB, a federal administrative agency, found that Darlington was part of a single integrated employer group and that closing the plant due to anti-union animus violated the National Labor Relations Act.
- The NLRB ordered back pay for all Darlington employees and required Deering Milliken to bargain with the union.
- Darlington and Deering Milliken sought review in the U.S. Court of Appeals for the Fourth Circuit.
- The Court of Appeals, sitting en banc, set aside the NLRB's order, holding that a company has an absolute right to close part or all of its business regardless of anti-union motives.
- The Textile Workers Union and the NLRB were granted a writ of certiorari by the U.S. Supreme Court.
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Issue:
Does an employer commit an unfair labor practice in violation of § 8(a)(3) of the National Labor Relations Act by permanently closing part or all of its business due to anti-union animus following a union's successful representation election?
Opinions:
Majority - Mr. Justice Harlan
No, regarding a complete business closure, but Yes, regarding a partial business closure under certain conditions. An employer does not commit an unfair labor practice by terminating its entire business for any reason, even if motivated by anti-union animus, because such an action yields no future economic benefit for the employer and is a final cessation of the employment relationship. However, a partial closing constitutes an unfair labor practice if it is motivated by a purpose to chill unionism in the remaining plants of a single employer and if the employer could have reasonably foreseen that the closing would have that effect. A complete liquidation is different from a 'runaway shop' or discriminatory lockout, which are coercive tools used to gain future benefits. A partial closing, however, can serve as a powerful tool of intimidation against employees in the employer's other facilities, giving the employer leverage to discourage the exercise of § 7 rights. Because the National Labor Relations Board made findings only as to the purpose and effect on Darlington's employees, and not on the employees of the other Deering Milliken mills, the case must be remanded for further findings on this crucial issue.
Analysis:
This decision establishes a critical distinction between an employer's absolute right to go out of business entirely and its limited right to close only a portion of its operations. It created a new, specific framework for analyzing partial closings, requiring proof of the employer's subjective motive to 'chill' unionism elsewhere in its enterprise. This raises the evidentiary bar for unions in such cases, as they must now prove not only that the closing was discriminatory, but that it was intended as a warning to employees at the employer's other facilities. The ruling significantly impacts labor law for multi-facility employers, shaping their legal risks when considering the closure of unionized plants within a larger non-union enterprise.
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