Labor Law – Collective Bargaining – Duty of Employer to Substantiate Claim of Inability to Pay

A union had been recognized by an employer for three years. Pursuant to a reopening clause in the current contract the union asked for a IO-cent wage increase. The company maintained that it was paying above average wages and could not afford more than a 2½-cent hourly raise. When the union asked to be shown the company’s books as proof of this claim of inability to pay, the company refused on the ground that the union had no legal right to such information. The National Labor Relations Board found that the company had failed to bargain in good faith with respect to wages in violation of section 8 (a) (5) of the amended National Labor Relations Act. On appeal to the Supreme Court from denial of enforcement by the court of appeals, held, reversed, three justices dissenting in part. A refusal to attempt to substantiate a claim of inability to pay increased wages may support a finding of failure to bargain in good faith. National Labor Relations Board v. Truitt Manufacturing Co., 351 U.S. 149 (1956).