American Ship Building Co. v. National Labor Relations Board

Background

A ship-repair company that runs four Great Lakes shipyards negotiated with eight unions over a contract that expired August 1, 1961. After months of talks and an acknowledged bargaining impasse, the company closed its Chicago yard and laid off workers on August 11, citing the unresolved labor dispute and a fear that a strike at a busy time would harm customers. The unions filed charges with the National Labor Relations Board arguing the shutdown was an unlawful lockout.

Reasoning

The Supreme Court addressed whether temporarily shutting down operations after a bargaining impasse to pressure a union violates the Act’s protections for collective bargaining and the right to strike. The Court distinguished lockouts meant to destroy unions or motivated by antiunion hostility from those used only to strengthen an employer’s bargaining position. Reading the statute and its history, the Court held that an employer does not violate §§8(a)(1) or (3) when it temporarily shuts down after impasse solely to apply economic pressure.

Real world impact

The ruling makes it lawful for employers, in some circumstances, to use temporary shutdowns after impasse to gain leverage in bargaining. It affects workers who may lose pay during such shutdowns and strengthens employers’ tactical options in labor talks. The Court left unresolved other questions, such as whether employers may hire permanent replacements or lock out before an impasse, so some disputes will continue to be decided case by case.

Dissents or concurrances

Two Justices wrote separate opinions. One Justice agreed with reversal but would have reversed on the narrower ground that the employer lacked work and so properly shut down; he warned against substituting the Court’s policy judgments for the Board’s fact-based balancing. Another Justice and the Chief Justice agreed the employer’s fear of a strike was reasonable and therefore the lockout was justified on the record.