[After receiving union proposals for contract revisions for the benefit of the maintenance workers at the company's Emeryville, California, plant, the company advised the union that negotiations for a new contract would be pointless because it had definitely decided to contract out the work performed by the employees covered by the agreement upon the expiration of the agreement. The company planned to replace these employees with an independent contractor's employees and expected that substantial savings would be effected by this contracting-out of the work.

The Board ordered the company to reinstate the maintenance operation with the union employees, reinstate the employees with back pay, and fulfill its statutory bargaining obligation. The court of appeals granted the Board's enforcement petition, and the Supreme Court agreed to hear the case.] WARREN, C. J.... I. Section 8(a)(5) of the National Labor Relations Act provides that it shall be an unfair labor practice for an employer "to refuse to bargain collectively with the representatives of his employees."

Collective bargaining is defined in Section 8(d) as the performance of the mutual obligation of the employer and the representative of the employees to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment. "Read together, these provisions establish the obligation of the employer and the representative of its employees to bargain with each other in good faith with respect to ‘wages, hours, and other terms and conditions of employment....' The duty is limited to those subjects, and within that area neither is legally obligated to yield. Labor Board v. American Ins. Co., 343 U.S. 395.

As to other matters, however, each party is free to bargain or not to bargain...." Labor Board v. Wooster Div. of Borg-Warner Corp., 356 U.S. 342, 349. Because of the limited grant of certiorari, we are concerned here only with whether the subject upon which the employer allegedly refused to bargain- contracting out of plant maintenance work previously performed by employees in the bargaining unit, which the employees were capable of continuing to perform-is covered by the phrase "terms and conditions of employment" within the meaning of Section 8(d). The subject matter of the present dispute is well within the literal meaning of the phrase "terms and conditions of employment."...

As the Court of Appeals pointed out, it is not necessary that it be likely or probable that the union will yield or supply a feasible solution but rather that the union be afforded an opportunity to meet management's legitimate complaints that its maintenance was unduly costly. We are thus not expanding the scope of mandatory bargaining to hold, as we do now, that the type of "contracting out" involved in this case-the replacement of employees in the existing bargaining unit with those of an independent contractor to do the same work under similar conditions of employment-is a statutory subject of collective bargaining under Section 8(d). Our decision need not and does not encompass other forms of "contracting out" or "subcontracting" which arise daily in our complex economy....

The judgment of the Court of Appeal

1. What company action caused this complaint?

2. What remedy did the Board order?

3. With this decision, did the Supreme Court expand the scope of mandatory bargaining to include all subcontracting situations?