The issue here is whether, in the absence of proof of an antiunion motivation, an employer may be held to have violated Sections 8(a)(3) and (1) of the National Labor Relations Act when it refused to pay striking employees vacation benefits accrued under a terminated collective bargaining agreement while it announced an intention to pay such benefits to striker replacements, returning strikers, and nonstrikers who had been at work on a certain date during the strike. The respondent company and the union entered into a collective bargaining agreement which was effective by its terms until March 31, 1963....

In essence, the company agreed to pay specified vacation benefits to employees who, during the preceding year, had worked at least 1,525 hours. It was also provided that, in the case of a "lay-off, termination or quitting," employees who had served more than 60 days during the year would be entitled to pro rata shares of their vacation benefits. Benefits were to be paid on the Friday nearest July 1 of each year. The agreement was temporarily extended beyond its termination date, but on April 30, 1963, the union gave the required 15 days' notice of intention to strike over issues which remained unsettled at the bargaining table.

Accordingly, on May 16, 1963, approximately 350 of the company's 400 employees commenced a strike which lasted until December 26, 1963. The company continued to operate during the strike, using nonstrikers, persons hired as replacements for strikers, and some original strikers who had later abandoned the strike and returned to work. On July 12, 1963, a number of the strikers demanded their accrued vacation pay from the company. The company rejected this demand, basing its response on the assertion that all contractual obligations had been terminated by the strike and, therefore, none of the company's employees had a right to vacation pay. Shortly thereafter, however, the company announced that it would grant vacation pay-in the amounts and subject to the conditions set out in the expired agreement-to all employees who had reported for work on July 1, 1963.

The company denied that these payments were founded on the agreement and stated that they merely reflected a new "policy" which had been unilaterally adopted. The refusal to pay vacation benefits to strikers, coupled with the payments to nonstrikers, formed the basis of an unfair labor practice complaint filed with the Board while the strike was still in progress.... [The Board held that the company had violated Sections 8(a)(3) and 8(a)(1) of the NLRA, and the Fifth Circuit Court of Appeals denied enforcement of the Board's order.] But inquiry under Section 8(a)(3) does not usually stop at this point. The statutory language "discrimination ... to ... discourage" means that the finding of a violation normally turns on whether the discriminatory conduct was motivated by an antiunion purpose. American Ship Building Co. v. Labor Board, 380 U.S. 300 (1965).

It was upon the motivation element that the Court of Appeals based its decision not to grant enforcement, and it is to that element which we now turn. In three recent opinions we considered employer motivation in the context of asserted Section 8(a)(3) violations. American Ship Building Co. v. Labor Board, supra; Labor Board v. Brown, 380 U.S. 278 (1965); and Labor Board v. Erie Resistor Corp., supra.... From this review of our recent decisions, several principles of controlling importance here can be distilled.

First, if it can reasonably be concluded that the employer's discriminatory conduct was "inherently destructive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations.

Second, if the adverse effect of the discriminatory conduct on employee rights is "comparatively slight," an anti-union motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct. Thus, in either situation, once it has been proved that the employer engaged in discriminatory conduct which could have adversely affected employee rights to some extent, the burden is upon the employer to establish that he was motivated by legitimate objectives since proof of motivation is most accessible to him. Applying the principles to this case then, it is not necessary for us to decide the degree to which the challenged conduct might have affected employee rights.

As the Court of Appeals correctly noted, the company came forward with no evidence of legitimate motives for its discriminatory conduct. 363 F.2d at 134. The company simply did not meet the burden of proof, and the Court of Appeals misconstrued the function of judicial review when it proceeded nonetheless to speculate upon what might have motivated the company.

Since discriminatory conduct carrying a potential for adverse effect upon employee rights was proved andno evidence of a proper motivation appeared in the record, the Board's conclusions were supported by substantial evidence, Universal Camera Corp. v. Labor Board, 340 U.S. 474 (1951), and should have been sustained. The judgment of the Court of Appeals is reversed and the case is remanded with directions to enforce the Board's order. It is so ordered

Case Questions
1. What issue was the Supreme Court called upon to resolve?

2. What are the controlling principles set forth by the Supreme Court concerning the significance of employer motivation in the context of an alleged Section 8(a)(3) violation?

3. What was the holding of the case?