## Facts

- First National Maintenance Corp. (FNM) provided maintenance services under a contract with Greenpark Care Center.
- After a dispute over FNM’s management fee, Greenpark refused to pay the full amount, and FNM decided to terminate the contract for economic reasons.
- While the contract remained in effect, a union was certified as the exclusive bargaining representative for FNM employees working at the Greenpark site.
- The union asked FNM to delay termination so the parties could bargain; FNM refused and ended the Greenpark operation, discharging the affected employees.
- The union filed an unfair labor practice charge alleging FNM failed to bargain in good faith as required by NLRA §§ 8(a)(5) and 8(d).
- The NLRB found a violation for failing to bargain over the closure decision and ordered make-whole relief; the Second Circuit enforced the order.
- The Supreme Court reviewed whether the NLRA required bargaining over the decision to terminate the Greenpark operation.

## Issues

1. Whether NLRA §§ 8(a)(5) and 8(d) require an employer to bargain over an economically motivated decision to shut down part of its business (termination of a service contract and resulting layoffs), as distinct from bargaining over the effects of that decision.

## Decision

- The Court reversed the Second Circuit and held FNM had no duty to bargain over the decision to terminate the Greenpark contract and close that operation for purely economic reasons.
- The Court reaffirmed that an employer must bargain over the effects of such a decision on unit employees (e.g., severance, transfers, timing, and related matters).

## Legal Principles

- Mandatory bargaining under NLRA § 8(d) extends to “wages, hours, and other terms and conditions of employment,” but not to all decisions that affect employment.
- A management decision that substantially affects employment is a mandatory bargaining subject only when the benefit to labor-management relations and collective bargaining outweighs the burden on business operations.
- Economically motivated partial closures lie within core managerial control and are not mandatory bargaining subjects, even though they foreseeably cause job loss.
- An employer that lawfully decides to partially close must still bargain in good faith over the decision’s foreseeable effects on employees.

## Conclusion

The Court held that an employer’s economically motivated decision to terminate a discrete operation is not a mandatory subject of bargaining under the NLRA, while confirming a continuing duty to bargain over the resulting effects on employees.


First Nat'l Maint. Corp. v. NLRB, 452 U.S. 666 (1981)