## Facts

- Fibreboard Paper Products Corporation operated a manufacturing plant in Emeryville, California, where a union had represented a unit of maintenance employees since 1937.
- A collective bargaining agreement covering the maintenance unit was set to expire July 31, 1959, with automatic renewal unless timely notice to modify or terminate was given.
- The union gave timely notice and proposed contract modifications, but the company delayed bargaining and met with the union on July 27, 1959.
- At the July 27 meeting, Fibreboard announced it had made a definite decision to contract out the plant’s maintenance work effective August 1, 1959, based on anticipated cost savings.
- On July 31, 1959, Fibreboard terminated all maintenance employees in the bargaining unit and hired an independent contractor to perform the same maintenance work at the same plant under similar working conditions.

## Issues

1. Whether Fibreboard’s decision to subcontract maintenance work by replacing bargaining-unit employees with an independent contractor’s employees was a mandatory subject of bargaining under NLRA §§ 8(a)(5) and 8(d).
2. Whether Fibreboard violated NLRA § 8(a)(5) by unilaterally implementing the subcontracting decision without bargaining in good faith with the union.
3. Whether the NLRB exceeded its remedial authority by ordering reinstatement with back pay and requiring bargaining.

## Decision

- The Supreme Court affirmed enforcement of the NLRB’s order.
- The Court held that this type of subcontracting—substituting contractor employees for unit employees to perform the same work under similar conditions—concerned “terms and conditions of employment” and required bargaining under § 8(d).
- Fibreboard’s unilateral implementation of the subcontracting decision without bargaining violated § 8(a)(5).
- The Court upheld the NLRB’s remedy of reinstatement with back pay and a bargaining order as within the Board’s authority to effectuate the policies of the NLRA.
- Concurring opinions emphasized the decision’s limited scope and cautioned that some basic business decisions may fall outside mandatory bargaining.

## Legal Principles

- An employer must bargain in good faith over decisions that directly replace bargaining-unit employees with contractor employees to perform the same work under substantially similar conditions at the same facility.
- Economic motivation does not, by itself, remove a decision from mandatory bargaining when the decision primarily alters who performs unit work rather than changing the nature or scope of the enterprise.
- The NLRA’s bargaining obligation can extend beyond wages and hours to decisions closely tied to job tenure and the employment relationship.
- The NLRB has broad remedial power to order reinstatement, back pay, and bargaining when an employer’s unilateral change violates § 8(a)(5), so long as the remedy is reasonably related to the Act’s policies.
- The holding is confined to the subcontracting arrangement presented and does not resolve whether broader entrepreneurial decisions (e.g., major reorganizations or shutdowns) are mandatory bargaining subjects.

## Conclusion

The Court held that Fibreboard’s replacement of union-represented maintenance employees with an independent contractor performing the same work under similar conditions was a mandatory subject of bargaining, and that the company’s unilateral action violated the NLRA; the NLRB’s reinstatement, back-pay, and bargaining remedies were upheld.


Fibreboard Paper Prods. Corp. v. NLRB, 379 U.S. 203 (1964)