A transit authority in Washington, D.C., needed to close a company cafeteria, but unionized employees blocked the step. They believed the closing must be either bargained or arbitrated. An arbitrator agreed with the union, so the authority took the union to court, claiming that it had the power to close the eatery.

What happened. The Washington Metropolitan Area Transit Authority (WMATA) has a complex structure because it is governed by Virginia and Maryland as well as the District of Columbia. The three entities created a lengthy compact for WMATA, which in turn, negotiated a collective bargaining agreement with the local of the union to which employees belonged.

WMATA described closing the cafeteria as a management decision for business reasons, not a step that needed union agreement. Management said the closing was important to provide WMATA with more space for its legal staff, adding that many more restaurants were available in the immediate vicinity of the building than there had been when the cafeteria first opened. According to the compact, a "labor dispute" is defined as "any controversy concerning wages, salaries, hours, working conditions, or benefits," and must be resolved through collective bargaining. So the union interpreted both the compact and the bargaining agreement to mean that the closing must be negotiated.

It called on an arbitrator to solve the disagreement. He confirmed the union's position, but WMATA charged he had exceeded his authority and took the union to federal district court. The judge there also agreed with the union's position, and WMATA appealed to the 4th Circuit, which covers Maryland, North Carolina, South Carolina, Virginia, and West Virginia.

What the court said. Appellate judges reviewed a Supreme Court ruling in a 1979 case brought by Ford Motor Co. against the National Labor Relations Board (NLRB). It, too, concerned food service, but the issue was higher prices for the food rather than closing the cafeteria. The Supreme Court agreed with NLRB that food service is a condition of employment. And, since Ford was not in the food service business, raising prices was not in management's purview and had to be either bargained or arbitrated. So the union again won the argument. WMATA v. Office Professional Employees International Union, U.S. Court of Appeals for the 4th Circuit, No. 04-2274 (10/4/06).

Point to remember: For unionized companies, NLRB defines any employee benefit, such as paid time off or healthcare insurance, as a matter to be negotiated between management and organized labor.