## Facts

- A union was certified in 1962 as bargaining representative for C & C Plywood Corporation’s production and maintenance employees.
- The parties executed a collective bargaining agreement (CBA) that included a classified wage scale and a clause permitting the employer to pay above-scale “premium” rates to reward “any particular employee” for special qualities, with discretion to later reduce such premiums.
- The CBA “closed” wages for the contract term and stated neither side had a duty to bargain during the term over matters not specifically covered; the grievance process did not include arbitration.
- Within weeks of signing the CBA, the employer unilaterally implemented a production-based plan paying glue spreader crews $2.50 per hour if they met specified output standards, exceeding the CBA’s glue spreader rates.
- During negotiations, the employer had proposed an incentive bonus system for the glue spreader department, but the union refused to agree.
- The union filed an unfair labor practice charge alleging unilateral implementation violated NLRA §§ 8(a)(5) and 8(a)(1).
- The NLRB found the premium clause addressed individualized premiums, not a crew-wide production incentive plan, and concluded the union had not waived bargaining rights over the plan.
- The NLRB ordered the employer to rescind the plan and cease and desist from similar unilateral changes; the court of appeals refused enforcement on the ground that the dispute was “arguably” contractual and thus for courts under § 301.

## Issues

1. Whether the NLRB lacks jurisdiction over an unfair labor practice charge when resolving it requires interpreting a CBA that arguably supports the employer’s conduct.
2. Whether the CBA authorized the employer to implement the production-based premium pay plan unilaterally, thereby waiving the union’s statutory right to bargain over it.

## Decision

- The Supreme Court reversed the court of appeals and directed enforcement of the NLRB’s order.
- The NLRB is not divested of jurisdiction merely because deciding an unfair labor practice charge requires interpreting a CBA raised as a defense.
- The NLRB did not err in concluding the CBA did not grant unilateral authority to implement the crew-wide incentive plan and that the union had not waived bargaining rights.
- The employer’s unilateral implementation of the plan violated § 8(a)(5) and, derivatively, § 8(a)(1).

## Legal Principles

- The NLRB may interpret and apply a CBA to the extent necessary to decide a statutory unfair labor practice issue, even if the contract provides an arguable defense.
- Unfair labor practice proceedings before the NLRB and contract actions under § 301 are not mutually exclusive; the availability of a § 301 suit does not bar Board jurisdiction.
- A union’s waiver of the statutory right to bargain must be clear; a clause permitting individualized premium pay does not necessarily authorize a group-based production incentive system that materially changes wages.
- A unilateral change to a mandatory subject of bargaining, absent bargaining or a valid waiver, breaches the duty to bargain in good faith under § 8(a)(5) and interferes with protected rights under § 8(a)(1).

## Conclusion

The Court held that the NLRB may adjudicate unfair labor practice charges even when contract interpretation is required and upheld the Board’s determination that a crew-wide incentive pay plan was not authorized by the CBA and could not be imposed unilaterally without bargaining.


NLRB v. C & C Plywood Corp., 385 U.S. 421 (1967)