WASHINGTON -- The Supreme Court agreed yesterday to spell out the rights of businesses to cut wages, or change other working conditions, when company management and the workers' labor union disagree over the issue.
The National Labor Relations Board has long taken the position that if a company has a legal duty to bargain over a working condition, such as wages, it cannot alter that condition until it and the union have bargained to the point of impasse.
A federal appeals court, however, ruled last summer that the management need only notify the union about what it is planning to do and give the union a chance to respond. There is no need for the two sides to talk about the issue until they are in ultimate disagreement, that court declared.
Taking the issue on to the Supreme Court, the NLRB
said that if the bargaining process is not taken as far as it can go, the incentive for settlement of labor disputes by "good-faith bargaining" will be taken away. The board contended that the appeals court ruling in this case conflicts with rulings by other appeals courts.
The case involves Nabors Trailers Inc., a now-defunct truck trailer manufacturer that had a plant in Mansfield, La. When the company's financial condition worsened and it suffered losses in three calendar quarters totaling $1.7 million, management proposed that workers take a 28 percent wage cut. It told the union, but the union resisted and asked for a 12 percent pay increase instead.
The two sides got together from time to time to talk about the issue, but then the company decided to put the wage cut into effect on its own after giving the union five days' notice. Later that year, 1987, the plant was closed down, and its assets were sold.
The union complained to the NLRB that the company had engaged in an unfair labor practice by refusing to bargain further over the wage cut. The board ruled in favor of the union, and ordered the company owning the truck company's assets to provide back pay. The appeals court, however, overturned that result.
A final ruling in the case of NLRB vs. Nabors Trailers (No. 90-1165) is expected sometime next year.