## Facts

- General Motors Corporation (GM) bargained company-wide with the United Automobile, Aerospace and Agricultural Implement Workers of America (UAW).
- The parties’ collective-bargaining agreement included union-security provisions, but they were inoperative in states with right-to-work restrictions.
- After an Indiana court upheld the legality of an “agency shop” under state law, the UAW proposed an agency-shop clause for GM’s Indiana plants.
- The proposed clause would condition continued employment on payment to the union of sums equal to initiation fees and periodic dues, while leaving formal union membership optional.
- GM refused to bargain over the proposal, asserting the clause would be unlawful under NLRA §§ 7, 8(a)(1), and 8(a)(3).
- The NLRB found the proposal lawful and ordered GM to bargain, concluding GM’s refusal violated NLRA § 8(a)(5).
- The Sixth Circuit set aside the Board’s order, reasoning that an agency shop was not authorized by the § 8(a)(3) proviso.
- The Supreme Court granted certiorari.

## Issues

1. Whether an agency-shop arrangement that requires nonmembers to pay amounts equivalent to initiation fees and dues, while leaving membership optional, is prohibited by NLRA §§ 7 and 8(a)(3).
2. Whether, in a state that does not prohibit such arrangements, an employer violates NLRA § 8(a)(5) by unconditionally refusing to bargain over a union’s agency-shop proposal.

## Decision

- The Supreme Court reversed the Sixth Circuit and reinstated the NLRB’s order.
- The Court held that an agency shop, as proposed, does not itself constitute an unfair labor practice under § 8(a)(3) and is not prohibited by §§ 7 or 8.
- Because the proposal was lawful where not barred by state law, GM’s unconditional refusal to bargain over it violated § 8(a)(5).

## Legal Principles

- For NLRA § 8(a)(3) purposes, the “membership” that may be required as a condition of employment under the union-security proviso is limited to its financial obligations (initiation fees and periodic dues), not full participation in union affairs.
- An agency-shop clause that leaves union membership optional but requires payment of amounts equivalent to fees and dues is substantively within the authorization of the § 8(a)(3) proviso, absent a state-law prohibition.
- An employer has no duty to bargain over a proposal that would require committing an unfair labor practice; conversely, when a union-security proposal is lawful, bargaining over it is required, and an unconditional refusal to bargain violates § 8(a)(5).
- The NLRA permits state right-to-work limitations on union-security arrangements; the federal duty to bargain over an agency shop applies only where state law does not forbid it.

## Conclusion

The Court held that an agency-shop arrangement requiring nonmembers to pay fees and dues equivalents, while keeping membership optional, is lawful under the NLRA where not prohibited by state law, and an employer’s unconditional refusal to bargain over such a proposal constitutes an unfair labor practice under § 8(a)(5).


NLRB v. Gen. Motors Corp., 373 U.S. 734 (1963)