## Facts

- Jacobs Manufacturing Company and the union executed a two-year collective-bargaining agreement effective July 15, 1948.
- The agreement contained a midterm reopening clause allowing either party, after one year and on notice, to request a meeting “to discuss wage rates.”
- During negotiation of the 1948 agreement, the parties discussed changes to an existing group insurance program but did not include insurance terms in the final agreement; pensions were not discussed.
- On July 15, 1949, the union invoked the reopening clause and demanded (1) a general wage increase, (2) changes to insurance, and (3) adoption of a pension plan.
- Jacobs asserted it was financially unable to grant wage increases and refused to bargain at all over insurance changes or a pension plan, claiming those topics were outside the reopening clause.
- The union requested access to financial records to test Jacobs’s inability-to-pay claim; Jacobs refused to provide any information.
- After an initial and a follow-up meeting with no change in positions, Jacobs declined further in-person bargaining sessions and told the union to submit new arguments in writing for a written response.
- The union filed unfair labor practice charges alleging refusal to bargain in good faith in violation of NLRA § 8(a)(5) and § 8(a)(1).

## Issues

1. Whether an employer must bargain midterm over mandatory subjects not covered by the contract when the union has not clearly waived bargaining rights.
2. Whether a wage-only midterm reopening clause relieves an employer of any duty to bargain midterm over other mandatory subjects such as pensions.
3. Whether refusing to provide financial information supporting an inability-to-pay claim and refusing to continue meeting with the union constitute bad-faith bargaining under § 8(a)(5).

## Decision

- The NLRB found Jacobs violated § 8(a)(5) and § 8(a)(1) by refusing to bargain in good faith.
- The Board concluded Jacobs had a duty to bargain midterm over a pension plan because pensions were a mandatory subject not covered by the agreement and not waived by the union.
- The Board treated the insurance issue differently, finding no bargaining violation as to insurance changes because insurance had been discussed during prior negotiations and omitted from the contract, supporting a finding of exclusion/waiver as to that subject.
- The Board found bad-faith bargaining based on Jacobs’s categorical refusal to bargain over pensions, its refusal to furnish requested financial data after asserting inability to pay, and its refusal to continue meeting and conferring.
- The Board ordered Jacobs to cease and desist and to bargain in good faith consistent with its statutory obligations.

## Legal Principles

- An employer’s statutory duty to bargain continues during the term of a collective-bargaining agreement over mandatory subjects not covered by the agreement, absent a clear and unmistakable waiver by the union.
- A contract clause permitting midterm reopening on wages does not, by itself, waive or extinguish bargaining rights on other mandatory subjects.
- Prior negotiation history matters to waiver: a subject discussed and then omitted from the agreement may support a finding that the union relinquished midterm bargaining over that subject, while silence on an undiscussed subject does not establish waiver.
- An employer that claims inability to pay wages may be required, as part of good-faith bargaining, to provide relevant supporting financial information upon request.
- Refusing to meet and confer and substituting unilateral written exchanges can evidence a refusal to bargain in good faith when it forecloses meaningful negotiation.

## Conclusion

The Board held that Jacobs unlawfully refused to bargain in good faith by rejecting midterm bargaining over pensions notwithstanding a wage-only reopening clause, by withholding financial information after asserting inability to pay, and by cutting off bargaining meetings; the union’s failure to raise pensions in prior negotiations did not waive its statutory right to bargain over that mandatory subject.


Jacobs Mfg. Co., 94 N.L.R.B. 1214 (1951)