Employer Opens Can of Worms for Union

By John Alan Doran

When must an employer turn over its highly confidential pricing and customer data to a union?  When it opens its big trap during collective bargaining!  A recent case provides an excellent example.  During bargaining, the employer repeatedly asserted that it needed wage concessions from the union due to increased pressures from Asian competitors, increased production costs, and decreased productivity.  In response, the union demanded seven broad categories of data to test the employer’s “competitiveness” rationale for its proposed wage concessions.  The company refused to provide anything more than its projected wage savings from the proposed concessions.  The union complained to the NLRB; the NLRB found that the employer’s refusal to produce the information was an unfair labor practice; and the employer appealed to a federal appeals court, where the employer resoundingly lost.  Case Link

The D.C. Circuit Court of Appeals concluded that the employer’s broad and oft-repeated “competitiveness” rationale opened the door for the union to demand information related to that rationale.  Because the “competitiveness” rationale was the employer’s primary justification for the concession demand, and because the union’s information requests were at least reasonably related to the employer’s competitiveness rationale, the employer was obligated to provide the data.

This case is a reminder to all who sit at the bargaining table to watch what they say.  When an employer makes an assertion of fact as a rationale for a proposal, in many instances it will enable the union to demand proof, which may include confidential employer business data.  (KLB Industries, Inc. v. NLRB, No. 11-1280 (D.C. Cir., December 4, 2012)

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