452 U.S. 666 (U.S. Supreme Court 1981)
First National Maintenance Corp. v.
Is an employer's decision to shut down part of its business purely for economic reasons a mandatory subject of collective bargaining under § 8(d) of the NLRA, requiring bargaining with the union over the decision itself (as distinct from bargaining over the effects of that decision on employees)?
Under § 8(d) of the NLRA, an employer must bargain in good faith over "wages, hours, and other terms and conditions of employment." Management decisions fall into three categories: (1) those with only an indirect and attenuated impact on employment (not mandatory subjects); (2) those that are the core of the employment relationship (e.g., wages, hours, layoffs) (mandatory subjects); and (3) those directly affecting employment but also involving a change in the scope and direction of the enterprise. For this third category, the duty to bargain is determined by a balancing of the benefits of bargaining for labor-management relations and the collective-bargaining process against the burden bargaining would place on the employer's conduct of the business. Applying this balance, an employer's decision to partially close operations solely for economic reasons is not a mandatory subject of bargaining, though the employer must bargain over the effects of that decision on employees.
No. An employer's decision to shut down part of its business purely for economic reasons is not a mandatory subject of collective bargaining under § 8(d). However, the employer has a duty to bargain over the effects of that decision on the employees.
First National Maintenance is the leading case defining when managerial decisions are mandatory subjects of bargaining. It supplies the three-category framework and the balancing test for decisions that both affect employees and implicate the enterprise's direction. The case limits the duty to bargain over entrepreneurial decisions like partial closures undertaken for purely economic reasons, while preserving a robust obligation to bargain over effects. It also clarifies Fibreboard's reach and frames later doctrine addressing relocations and reconfigurations of work (e.g., the NLRB's post–First National relocation analyses). For law students, the case is essential for exam and practice analysis of § 8(d), management-rights clauses, effects bargaining, and remedies for refusal-to-bargain violations.