National Labor Relations Board v. C. & C. Plywood Corp./Opinion of the Court

The respondent employer was brought before the National Labor Relations Board to answer a complaint that its inauguration of a premium pay plan during the term of a collective agreement, without prior consultation with the union representing its employees, violated the duties imposed by § 8(a)(5) and (1) of the National Labor Relations Act. The Board issued a cease-and-desist order, rejecting the claim that the respondent's action was authorized by the collective agreement. The Court of Appeals for the Ninth Circuit refused, however, to enforce the Board's order. It reasoned that a provision in the agreement between the union and the employer, which 'arguably' allowed the employer to institute the premium pay plan, divested the Board of jurisdiction to entertain the union's unfair labor practice charge. 351 F.2d 224. We granted certiorari to consider a substantial question of federal labor law. 384 U.S. 903, 86 S.Ct. 1337, 16 L.Ed.2d 357.

In August 1962, the Plywood, Lumber, and Saw Mill Workers Local No. 2405 was certified as the bargaining representative of the respondent's production and maintenance employees. The agreement which resulted from collective bargaining contained the following provision:

'Article XVII

'WAGES

'A. A classified wage scale has been agreed upon by the     Employer and Union, and has been signed by the parties and      thereby made a part of the written agreement. The Employer reserves the right to pay a     premium rate over and above the contractual classified wage      rate to reward any particular employee for some special      fitness, skill, aptitude or the like. The payment of such a     premium rate shall not be considered a permanent increase in      the rate of that position and may, at sole option of the      Employer, be reduced to the contractual rate *  *  * .'

The agreement also stipulated that wages should be 'closed' during the period it was effective and that neither party should be obligated to bargain collectively with respect to any matter not specifically referred to in the contract. Grievance machinery was established, but no ultimate arbitration of grievances or other disputes was provided.

Less than three weeks after this agreement was signed, the respondent posted a notice that all members of the 'glue spreader' crews would be paid $2.50 per hour if their crews met specified biweekly (and later weekly) production standards, although under the 'classified wage scale' referred to in the above quoted Art. XVII of the agreement, the members of these crews were to be paid hourly wages ranging from $2.15 to $2.29, depending upon their function within the crew. When the union learned of this premium pay plan through one of its members, it immediately asked for a conference with the respondent. During the meetings between the parties which followed this request, the employer indicated a willingness to discuss the terms of the plan, but refused to rescind it pending those discussions.

It was this refusal which prompted the union to charge the respondent with an unfair labor practice in violation of §§ 8(a)(5) and (1). The trial examiner found that the respondent had instituted the premium pay program in good-faith reliance upon the right reserved to it in the collective agreement. He, therefore, dismissed the complaint. The Board reversed. Giving consideration to the history of negotiations between the parties, as well as the express provisions of the collective agreement, the Board ruled the union had not ceded power to the employer unilaterally to change the wage system as it had. For while the agreement specified different hourly pay for different members of the glue spreader crews and allowed for merit increases for 'particular employee(s),' the employer had placed all the members of these crews on the same wage scale and had made it a function of the production output of the crew as a whole.

In refusing to enforce the Board's order, the Court of Appeals did not decide that the premium pay provision of the labor agreement had been misinterpreted by the Board. Instead, it held the Board did not have jurisdiction to find the respondent had violated § 8(a) of the Labor Act, because the 'existence * *  * of an unfair labor practice (did) not turn entirely upon the provisions of the Act, but arguably upon a good-faith dispute as to the correct meaning of the provisions of the collective-bargaining agreement *  *  * .' 351 F.2d, at 228.

The respondent does not question the proposition that an employer may not unilaterally institute merit increases during the term of a collective agreement unless some provision of the contract authorizes him to do so. See National Labor Relations Board v. J. H. Allison & Co., 165 F.2d 766, 3 A.L.R.2d 990 (C.A.6th Cir.), cert. denied, 335 U.S. 814, 69 S.Ct. 31, 93 L.Ed. 369. Cf. Beacon Piece Dyeing Co., 121 N.L.R.B. 953 (1958). The argument is, rather, that since the contract contained a provision which might have allowed the respondent to institute the wage plan in question, the Board was powerless to determine whether that provision did authorize the respondent's action, because the question was one for a state or federal court under § 301 of the Act.

In evaluating this contention, it is important first to point out that the collective bargaining agreement contained no arbitration clause. The contract did provide grievance procedures, but the end result of those procedures, if differences between the parties remained unresolved, was economic warfare, not 'the therapy of arbitration.' Carey v. Westinghouse Electric Corp., 375 U.S. 261, 272, 84 S.Ct. 401, 409, 11 L.Ed.2d 320. Thus, the Board's action in this case was in no way inconsistent with its previous recognition of arbitration as 'an instrument of national labor policy for composing contractual differences.' International Harvester Co., 138 N.L.R.B. 923, 926 (1962), aff'd sub nom. Ramsey v. National Labor Relations Board, 327 F.2d 784 (C.A.7th Cir.), cert. denied, 377 U.S. 1003, 84 S.Ct. 1938, 12 L.Ed.2d 1052.

The respondent's argument rests primarily upon the legislative history of the 1947 amendments to the National Labor Relations Act. It is said that the rejection by Congress of a bill which would have given the Board unfair labor practice jurisdiction over all breaches of collective bargaining agreements shows that the Board is without power to decide any case involving the interpretation of a labor contract. We do not draw that inference from this legislative history.

When Congress determined that the Board should not have general jurisdiction over all alleged violations of collective bargaining agreements and that such matters should be placed within the jurisdiction of the courts, it was acting upon a principle which this Court had already recognized:

'The Railway Labor Act, like the National Labor Relations     Act, does not undertake governmental regulation of wages,      hours, or working conditions. Instead it seeks to provide a     means by which agreement may be reached with respect to      them.'

Terminal Railroad Ass'n v. Brotherhood of Railroad Trainmen, 318 U.S. 1, 6, 63 S.Ct. 420, 423, 87 L.Ed. 571. To have conferred upon the National Labor Relations Board generalized power to determine the rights of parties under all collective agreements would have been a step toward governmental regulation of the terms of those agreements. We view Congress' decision not to give the Board that broad power as a refusal to take this step.

But in this case the Board has not construed a labor agreement to determine the extent of the contractual rights which were given the union by the employer. It has not imposed its own view of what the terms and conditions of the labor agreement should be. It has done no more than merely enforce a statutory right which Congress considered necessary to allow labor and management to get on with the process of reaching fair terms and conditions of emplonment-'to provide a means by which agreement may be reached.' The Board's interpretation went only so far as was necessary to determine that the union did not agree to give up these statutory safeguards. Thus, the Board, in necessarily construing a labor agreement to decide this unfair labor practice case, has not exceeded the jurisdiction laid out for it by Congress.

This conclusion is reinforced by previous judicial recognition that a contractual defense does not divest the Labor Board of jurisdiction. For example, in Mastro Plastics Corp. v. National Labor Relations Board, 350 U.S. 270, 76 S.Ct. 349, 100 L.Ed. 309, the legality of an employer's refusal to reinstate strikers was based upon the Board's construction of a 'no strike' clause in the labor agreement, which the employer contended allowed it to refuse to take back workers who had walked out in protest over its unfair labor practice. The strikers applied to the Board for reinstatement and back pay. In giving the requested relief, the Board was forced to construe the scope of the 'no strike' clause. This Court, in affirming, stressed that the whole case turned 'upon the proper interpretation of the particular contract * *  * .' 350 U.S., at 279, 76 S.Ct., at 356. Thus, Mastro Plastics stands squarely against the respondent's theory as to the Board's lack of power in the present case.

If the Board in a case like this had no jurisdiction to consider a collective agreement prior to an authoritative construction by the courts, labor organizations would face inordinate delays in obtaining vindication of their statutory rights. Where, as here, the parties have not provided for arbitration, the union would have to institute a court action to determine the applicability of the premium pay provision of the collective bargaining agreement. If it succeeded in court, the union would then have to go back to the Labor Board to begin an unfair labor practice proceeding. It is not unlikely that this would add years to the already lengthy period required to gain relief from the Board. Congress cannot have intended to place such obstacles in the way of the Board's effective enforcement of statutory duties. For in the labor field, as in few others, time is crucially important in obtaining relief. Amalgamated Clothing Workers of America v. Richman Bros. Co., 348 U.S. 511, 526, 75 S.Ct. 452, 460, 99 L.Ed. 600 (dissenting opinion).

The legislative history of the Labor Act, the precedents interparting it, and the interest of its efficient administration thus all lead to the conclusion that the Board had jurisdiction to deal with the unfair labor practice charge in this case. We hold that the Court of Appeals was in error in deciding to the contrary.

The remaining question, not reached by the Court of Appeals, is whether the Board was wrong in concluding that the contested provision in the collective agreement gave the respondent no unilateral right to institute its premium pay plan. In reaching this conclusion, the Board relied upon its experience with labor relations and the Act's clear emphasis upon the protection of free of collective bargaining. We cannot disapprove of the Board's approach. For the law of labor agreements cannot be based upon abstract definitions unrelated to the context in which the parties bargained and the basic regulatory scheme underlying the context. See Cox, The Legal Nature of Collective Bargaining Agreements, 57 Mich.L.Rev. 1 (1958). Nor can we say that the Board was wrong in holding that the union had not forgone its statutory right to bargain about the pay plan inaugurated by the respondent. For the disputed contract provision referred to increases for 'particular employee(s),' not groups of workers. And there was nothing in it to suggest that the carefully worked out wage differentials for various members of the glue spreader crew could be invalidated by the respondent's decision to pay all members of the crew the same wage.

The judgment is accordingly reversed and the case is remanded to the Court of Appeals with directions to enforce the Board's order.

Reversed and remanded.