## Facts

- Nielsen Lithographing Company and a union bargained over wages and benefits at Nielsen’s Ohio plant.
- Nielsen asserted it needed to reduce wages and benefits to remain competitive and suggested its long-term viability could be affected.
- The union requested extensive financial information and access for its accountants, including financial statements, tax returns, compensation records for managers and supervisors, and other company records.
- Nielsen refused to provide the requested financial access.
- The union struck and filed unfair labor practice charges with the NLRB.
- The NLRB found Nielsen violated the NLRA by refusing to furnish requested financial information and ordered remedial relief, including reinstatement of discharged strikers.
- While the matter was pending, the Seventh Circuit decided *NLRB v. Harvstone Manufacturing Corp.*, addressing when an employer must disclose financial information in bargaining.
- Nielsen moved the NLRB to reconsider in light of *Harvstone*; the Board denied reconsideration without a substantive discussion of *Harvstone*’s applicability.
- Nielsen petitioned for review, and the NLRB cross-applied for enforcement.

## Issues

1. Whether an employer that argues wage and benefit reductions are needed for competitiveness and future business success, rather than claiming present inability to pay, must disclose financial records under the NLRA.
2. Whether the NLRB acted improperly by issuing and maintaining an order inconsistent with controlling Seventh Circuit precedent, particularly after denying reconsideration without addressing intervening circuit authority.

## Decision

- The Seventh Circuit denied enforcement of the NLRB’s order to the extent it was premised on a duty to open the employer’s books based on Nielsen’s bargaining statements.
- The court characterized Nielsen’s position as a forecast and business judgment about competitiveness (“can pay but will not”), not a factual claim of present inability to pay.
- Because Nielsen did not claim present inability to pay, *Truitt* did not require disclosure of confidential financial records, and the Board’s contrary approach could not be enforced.
- The court criticized the Board’s failure to engage with *Harvstone* when Nielsen sought reconsideration and emphasized that agency action must be consistent with binding circuit precedent.
- The court noted that, even when financial disclosure is potentially required, the scope of a union’s request must be reasonable and balanced against production burdens.

## Legal Principles

- An employer’s duty to furnish financial information in bargaining is triggered when the employer claims a present inability to pay the union’s wage or benefit demand; refusal to substantiate such a claim can constitute an unfair labor practice.
- Statements framed as competitive concerns, predictions, or strategic choices about future business conditions (“can pay but will not”) do not, by themselves, create an automatic obligation to open the employer’s books.
- Information requests in collective bargaining must be reasonably tailored; decisionmakers should balance the relevance of the information sought against the burden and sensitivity of compelled production.
- Judicial deference to the NLRB does not permit enforcement of Board action that conflicts with controlling circuit precedent; the Board must either conform to that precedent or provide a reasoned explanation addressing it.

## Conclusion

The Seventh Circuit refused to enforce an NLRB order requiring financial disclosure where the employer argued competitive necessity and future risk rather than present inability to pay, and it faulted the Board for not addressing intervening circuit precedent limiting compelled disclosure in such circumstances.


Nielsen Lithographing Co. v. National Labor Relations Board, 854 F.2d 1063 (7th Cir. 1988)