Article by Robert B. Mitchell
The Illinois Coil Spring Company's Milwaukee Spring Division and Local 547 of the United Auto Workers Union were parties to a collective bargaining agreement scheduled to expire March 31, 1983. In January 1982, the employer requested that the union agree to modify that contract by agreeing to a number of concessions including the elimination of a wage increase due April 1 of that year. When the union refused, the employer, on March 12, proposed relocating its assembly operations to another, nonunion, facility that it owned in McHenry, Illinois in order to avail itself of comparatively lower labor costs at that plant. When the union membership rejected any contract concessions, the company announced the transfer of its assembly operations to the McHenry plant. The work relocation was made despite union objections. The parties stipulated before the National Labor Relations Board (NLRB) that the assembly operations were relocated soley because of higher labor costs at the employer's Milwaukee facility, that it was economically motivated, and that it was not a result of anti-union animus. The parties also specified that the employer had bargained in good faith with the union about the relocation decision and that it was willing to bargain over the effects of the transfer.
The union filed an unfair labor practice charge alleging that the employer's unilateral decision to relocate unit work from the union to the nonunion plant (and its decision to lay off unit employees as a consequence) during the effective term of the contract in order to reduce its labor costs violated sections 8(a)(1), 8(a)(5), and 8(d) of the National Labor Relations Act and that the resultant employee layoff violated sections 8(a)(1) and 8(a)(3) of that statute. The Board's General Counsel issued a complaint, and the matter was presented to the Board for decision.
On October 22, 1982, the Board ruled that the company acted in violation of the Act, as had been alleged, and ordered it to rescind the work relocation decision and to return to the Milwaukee plant any work that had already been moved. The employer filed a petition for review of the Board's decision and order with the United States Court of Appeals for the Seventh Circuit. The Board filed a cross-application for enforcement of its order.
The Board's ruling caused a fury of controversy. Management representatives argued that the decision was legally flawed and economically ruinous. They contended that it unfairly infringed upon their right to manage their businesses. Employers also contended that it represented a radical departure from established Board precedent. Labor, on the other hand, applauded the decision as a judicious reaffirmation of the sanctity of their contracts.
On August 4, 1983, the Seventh Circuit granted the Board's motion that the case be remanded to the Board for additional consideration. After hearing oral argument, a rarity in Board procedure, the Board issued its decision reversing its original ruling. Since this second opinion, Milwaukee Spring II, the debate over the propriety of mid-term contract modifications has grown in intensity.
About the Author
Robert B. Mitchell. J.D. 1978, Tulane University School of Law; Member of the Bar, Louisiana and New York; Director, McGlinchey, Stafford, Mintz, Cellini & Lang.
Citation
58 Tul. L. Rev. 1441 (1984)