Labor Relations 74 Part One Legal Aspects of Collective Bargaining: National Labor Relations Board Cases Case 10 Claim of an Inability to Pay Wage Demands: What Is Bargaining in Good Faith? Employer American Polystyrene Corporation road in Union International Chemical Workers Union Council of the United Food and Commercial Workers International Union, Local 1C BACKGROUND An administrative law judge ruled that the respondent had failed to provide information necessary to discharge its obligation to bargain in good faith with the union. The respons dent company has appealed the judge's decision to the National Labor Relations Board. The respondent company in a negotiation session with the union claimed an inability to pay for the wage demands made by the union in bargaining. When the union requested proof of the financial inability to pay the wage demands, the company refused to pro- vide any such evidence on April 29, 2002. Negotiations continued and subsequently on April 30, management negotiators delivered to the union a note that stated: I am rejecting this request. While I have told you that we are a small company and times are tough, at no time have I ever told you we cannot afford your proposals. Rather, in these uncertain economic times, we believe that we need to take a more cautious approach than what you propose. Throughout subsequent negotiations the parties argued concerning whether the com- pany made the claim of an inability to pay, and the union reiterated demands to see the company's financial records in order to determine if an ability to pay exists. POSITION OF THE UNION It is the union's position that the employer clearly and unambiguously claimed that it had an inability to pay for the union's proposals concerning wages and retirement plans on April 29, 2002. During the April 29 negotiations, the company's owner responded to the union proposals by stating: "No, I can't. I'd go broke." Clearly, this was a denial of an ability to pay requiring proof of the financial deficiencies. The company simply changed the words it used to make its inability to pay claims more ambiguous when it delivered the note on April 30 alleging times are hard and the company must be more cautious than what the union proposes. It is the union's position that the administrative law judge was correct, and the company's position was it had no ability to pay. When a claim of an inability to pay is made, the company is obliged to provide evidence of that inability to pay. The Board has consistently ruled when such a claim is made, and the company then fails to provide proof of the claim, that conduct is a failure to bargain in good faith, in violation of Section 8(a) (5) and (1), Truitt Mfg. Co., 351 U.S. 153-54.Cases in Collective Bargaining and Industrial Relations: A Decisional Approach, 11th Edition Case 10 Claim of an Inability to Pay Wage Demands: What Is Bargaining in Good Faith? 75 It is the union's contention that the company has violated Section 8 (a) (5) and (1) by not providing the requested proof of their claimed inability to pay for the union's economic proposals in negotiations. POSITION OF THE EMPLOYER The employer contends that the administrative law judge made substantial errors in his findings of fact. The employer admits to the "I'd go broke" comment across the bar- gaining table. However, the record clearly shows that when the union requested proof of the claim the Company recanted and told the Union it could fund its requests, but rather thought it imprudent to do so. The handwritten note passed to the union across the bar- gaining table on April 30 clearly shows the change in position by the company. The company urges the Board may not find that there was a failure to bargain in good faith when the company almost immediately corrects the record and admits an ability to pay, but simply finds the union proposals financially imprudent. It is therefore the com- pany's position that there was no violation of the Act, and that the Board should dismiss the union's petition as being without merit. QUESTIONS 1. What proof is necessary to show an inability to pay an economic demand made across the bargaining table? Explain. 2. What is a claim of an inability to pay? Is "I'd go broke" a claim of an inability to pay? Did the April 30 note change the company's position on the matter of ability to pay? Explain. 3. If you were the Board would you affirm the administrative law judge's decision in this Show matter? Explain