## Facts

- American Ship Building Company operated four shipyards and bargained with unions representing its employees for a replacement collective bargaining agreement.
- Negotiations reached an impasse.
- After impasse, the company temporarily closed one yard and laid off employees at the others to apply economic pressure to obtain a favorable settlement.
- The NLRB found the employer could not reasonably have anticipated a strike and that the sole purpose of the layoffs was to pressure settlement; it treated the shutdown and layoffs as a lockout.
- The NLRB concluded the lockout violated NLRA §§ 8(a)(1) and 8(a)(3).
- The D.C. Circuit enforced the Board’s order, and the employer sought Supreme Court review.

## Issues

1. Whether an employer violates NLRA § 8(a)(1) by imposing a post-impasse lockout solely to apply economic pressure in support of legitimate bargaining demands.
2. Whether such a lockout constitutes discrimination discouraging union membership in violation of NLRA § 8(a)(3).
3. Whether the NLRB may treat a post-impasse lockout as unlawful absent evidence of antiunion motive or coercion directed at employees’ protected activity.

## Decision

- The Supreme Court reversed the D.C. Circuit and denied enforcement of the NLRB’s order.
- The Court held that an employer does not commit an unfair labor practice under § 8(a)(1) or § 8(a)(3) when, after bargaining impasse, it temporarily shuts down and lays off employees solely to apply economic pressure in support of its legitimate bargaining position.
- The Court concluded the record did not show discrimination to discourage union membership or interference with protected rights beyond the ordinary economic pressure inherent in collective bargaining.
- Justice Stewart authored the Court’s opinion; the judgment was unanimous, with separate concurrences in the judgment by Justices White and Goldberg.

## Legal Principles

- The NLRA permits both unions and employers to use economic weapons in bargaining; the Act does not make the NLRB the arbiter of which economic weapons parties may use to press bargaining demands.
- A post-impasse lockout used solely to apply economic pressure in support of legitimate bargaining demands is not, by itself, interference, restraint, or coercion under § 8(a)(1).
- To establish a § 8(a)(3) violation, the challenged conduct must involve discrimination undertaken to encourage or discourage union membership; economic pressure aimed at supporting a bargaining position, without antiunion motive, is insufficient.
- Economic harm to employees resulting from a lawful bargaining tactic does not alone establish an unfair labor practice; additional evidence of coercive or discriminatory purpose directed at protected activity is required.

## Conclusion

The Court held that a temporary, post-impasse lockout imposed solely to apply economic pressure in support of an employer’s legitimate bargaining position is a lawful bargaining tactic and is not an unfair labor practice under NLRA §§ 8(a)(1) or 8(a)(3) absent proof of coercive interference with protected rights or discriminatory antiunion motive.


Am. Ship Bldg. Co. v. NLRB, 380 U.S. 300 (1965)