NLRB v. C&C Plywood Corp.

C&C Plywood Corporation (C&C) (defendant) employed workers who were represented by a union (plaintiff). The collective-bargaining agreement (CBA) between C&C and the union specified an agreed-upon classified wage scale but stated that C&C reserved the right to pay higher premium rates to reward particular employees for special skills. The CBA did not provide for arbitration of disputes. Under the CBA’s wage scale, glue spreaders were to be paid between $2.15 and $2.29 hourly. However, a few weeks after signing the CBA, C&C posted a notice that glue spreaders would be paid $2.50 hourly if their crews met specified production standards. The union brought an unfair-labor-practice charge against C&C with the National Labor Relations Board (NLRB), asserting that C&C had violated the National Labor Relations Act by instituting the premium-pay plan without consulting the union. The NLRB found that during CBA negotiations, C&C representatives had proposed instituting an incentive-based bonus system for the glue spreaders’ department, but the union had not agreed. The NLRB concluded based on that history and the CBA’s language that the union had not intended to allow C&C to unilaterally institute the premium-pay plan. The NLRB noted that the CBA gave C&C the right to pay premiums to particular employees, not to establish a premium-pay scale based on an entire crew’s production output. The NLRB ordered C&C to rescind the premium-pay plan. However, a federal appellate court refused to enforce the order, concluding that the NLRB did not have jurisdiction to hear the union’s unfair-labor-practice charge because the CBA’s wage provisions arguably allowed C&C to institute the premium-pay plan. The court held that the existence of an unfair labor practice turned on a good-faith dispute about how to interpret the CBA’s provisions, which was a matter for a state or federal court to decide under § 301 of the act. The United States Supreme Court granted certiorari.