United Food & Commercial Workers, Local 150-A v. National Labor Relations Board (Dubuque Packing Co.)
1 F.3d 24 (Cir.1993)
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Rule of Law:
An employer's decision to relocate bargaining unit work is a mandatory subject of bargaining under the National Labor Relations Act if it does not involve a fundamental change in the nature of the employer's operation, unless the employer can prove that labor costs were not a factor in the decision or that the union could not or would not have offered concessions that would have changed the decision.
Facts:
- Beginning around 1977, Dubuque Packing Company began losing money at its home plant in Dubuque, Iowa.
- In 1978 and 1980, the plant's union, the United Food and Commercial Workers International Union (UFCW), agreed to concessions to help the company financially.
- On March 30, 1981, Dubuque gave a six-month notice of its intent to close its hog kill and cut operations.
- On June 10, 1981, after the union rejected a wage freeze proposal, Dubuque announced it was considering relocating the hog kill and cut operations rather than closing them.
- The UFCW requested detailed financial information to evaluate the proposal, but Dubuque refused to provide it.
- On June 28, 1981, the workers voted to reject the wage freeze again, following their union's advice to do so until Dubuque opened its financial books.
- Three days later, on July 1, 1981, Dubuque informed the union that its decision to close the department was "irrevocable."
- On October 1, 1981, Dubuque opened a new hog kill and cut operation at a plant in Rochelle, Illinois, and two days later, eliminated approximately 530 jobs at the Dubuque plant.
Procedural Posture:
- The UFCW filed unfair labor practice complaints with the National Labor Relations Board (NLRB) in June and August of 1981.
- An Administrative Law Judge (ALJ) held that Dubuque was under no duty to negotiate over its decision to relocate.
- The NLRB summarily affirmed the ALJ's decision.
- On review, the D.C. Circuit Court of Appeals (in a prior case, UFCW I) found the Board's standard was inadequately explained and remanded the case to the Board for further proceedings.
- On remand, the NLRB adopted a new test, applied it to the facts, and found that Dubuque had committed an unfair labor practice by failing to bargain.
- Dubuque petitioned the D.C. Circuit Court of Appeals for review of the Board's new order.
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Issue:
Does an employer's decision to relocate bargaining unit work, when motivated by labor costs and not involving a fundamental change in the business's scope or direction, constitute a mandatory subject of bargaining under the National Labor Relations Act?
Opinions:
Majority - Buckley
Yes, an employer's decision to relocate bargaining unit work motivated by labor costs is a mandatory subject of bargaining if it does not represent a fundamental change in the enterprise. The National Labor Relations Board's new test reasonably balances the employer's need for unencumbered decision-making with the benefits of collective bargaining, consistent with Supreme Court precedent in Fibreboard and First National Maintenance. The test correctly exempts core entrepreneurial decisions (e.g., a change in the scope and direction of the business) from mandatory bargaining. However, where the relocation is merely a replacement of one group of workers with another to perform the same work, and the motivation is labor costs, the decision is amenable to resolution through bargaining. The test's futility defense, which excuses bargaining if the union could not or would not offer sufficient concessions, further protects management prerogatives. The Board's application of this test was supported by substantial evidence, as Dubuque's relocation was not a basic change in its operation and the union had shown a willingness to make concessions.
Analysis:
This decision establishes the landmark "Dubuque test," a burden-shifting framework that clarifies when an employer must bargain over a plant relocation. It provides a more predictable standard than the previously fractured approach from Otis Elevator, offering guidance to both employers and unions. The case is significant for drawing a clear line between decisions that are primarily about labor costs (and thus bargainable, like in Fibreboard) and those that are fundamental entrepreneurial choices (and thus not, like in First National Maintenance). This test became the standard for analyzing relocation decisions under the NLRA, impacting labor-management relations by defining the scope of mandatory bargaining for a major category of business decisions.
