In a May 17 memorandum, NLRB Acting General Counsel Lafe Solomon furnished guidelines to Regional Directors concerning parties’ obligation to provide information in collective bargaining negotiations.
GC Memorandum 11-13 traces the development of two different analytical frameworks for assessing a party’s obligation to provide requested information to its bargaining counterpart. The first applies to cases involving a union request for financial information in response to an employer’s general claim of inability to pay certain wages or benefits. The second applies to cases involving a party’s request for specific information related to more limited bargaining claims by its bargaining counterpart. The principal purpose of the memo is to stress the importance of distinguishing between these two types of cases and applying the proper analytical framework to each.
Basic principles governing both parties’ obligation to produce requested information in bargaining include the following.
The duty to bargain in good faith imposes on both parties a parallel obligation to provide relevant information upon request.
Information concerning employees’ terms and conditions of employment is presumptively relevant.
The party making the request bears the burden of demonstrating the relevance of the requested information.
The threshold for relevance is a liberal, discovery-type standard; the requested information must merely have some bearing on the issue between the parties, and the requesting party need show only potential or probable relevance.
In NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956), the U.S. Supreme Court held that an employer violated Section 8(a)(5) of the Act by refusing to provide the union with financial information relevant to the employer’s claim that it could not afford a wage increase sought by the union. In so ruling, the Court also emphasized more broadly that, when either party makes factual assertions in bargaining, it may be obligated to share information relevant to those specific factual assertions.
Analysis of Union Requests for General Financial Information
Truitt made clear that the assessment of whether an employer has exposed itself to a union request for financial information by claiming an inability to pay -- as opposed to an unwillingness to pay -- turns on the particular facts and context of each case. No “magic words” are required for an employer to be deemed to have claimed financial hardship. The obligation to provide general financial information arises whenever an employer’s statements and actions convey an inability to pay, and the Board and courts will evaluate an employer’s statements in the context of the particular case at hand. GC Memorandum 11-13 observes that such case-specific analysis has led to seemingly inconsistent results, but it also recognizes that there is no bright-line test to clarify the fact-intensive analysis mandated by Truitt.
Analysis of a Party’s Request for Specific Information Related to Bargaining Claims
At times, an employer may base a bargaining position on factors that are related to certain business conditions but do not constitute an inability to pay, e.g., a need to maintain competitive pricing. In such cases, the Acting General Counsel notes that the Board and the courts have not always been consistent in their analytical approach. These are the types of cases with which GC Memorandum 11-13 is most concerned, and the memo advises Regional Directors not to overlook the significance and relevance of information requested in response to bargaining claims that do not rise to the level of a claim of inability to pay. Such limited claims may well trigger a valid request for information specific to the particular claim at issue.
In this regard, the memo takes issue with the Board’s 2006 decision in North Star Steel Co., 347 NLRB 1369-70 (2006), in which the Board found that a union’s request for information regarding the employer’s competitors was not relevant because the employer had not claimed inability to pay. Instead, the employer claimed an inability to compete. In ruling that the employer had no obligation to produce a list of competitors, the Board restricted its analysis to whether or not the employer had claimed an inability to pay. The memo criticizes the Board for not considering the employer’s claim of competitive disadvantage, and instead, confining its analysis to whether the employer had claimed financial hardship.
The memo cautions Regional Directors not to evaluate all claims for requested information on the basis of whether an employer has claimed financial hardship. Rather, it advises the Regions to differentiate between requests for general financial information made in response to claims of an inability to pay from other more limited information requests made in response to bargaining claims that may be subject to specific evaluation.
The GC’s memo sensitizes Regional Directors to:
the importance of evaluating requests for information on the basis of a fact-specific analysis of the requested information’s relevance; and
the distinct analytical frameworks to be applied to cases involving an employer’s asserted inability to pay and those involving more limited justifications that do not rise to the level of financial hardship.
Employers confronted with union information requests must evaluate the specific relevance of the request to bargaining issues on the table or to bargaining positions that the employer has taken in the course of negotiations. The union bears the burden of demonstrating the relevance of any requests it makes, but in evaluating any such explanation, the employer should apply a liberal, discovery-like standard of relevance. If the employer does not do so, the Board will, and the employer will be exposed to the risk of an 8(a)(5) charge.