A metal processing company and the United Steel Workers (USW) were engaged in protracted negotiations in an attempt to obtain their first contract. During bargaining, the Company stated that it had to retain a specific level of production to be profitable and to improve the employees’ wages and benefits. The Union then pressed management on whether the Company was profitable and whether it could afford a wage increase for employees. The Union followed up with a written request for financial statements, sales records, and tax returns, which the Company rejected.

The administrative law judge (ALJ) concluded that the Company’s specific claims and the positions they took in bargaining made the information requested by the Union relevant. The Company had a statutory obligation to produce the information based on its references to poor business conditions, lost business to competitors, and increased taxes.

Companies that attempt to bargain based on their specific economic conditions may find themselves in a similarly undesirable position. Even though the Company did not specifically claim an inability to pay (or “plead poverty”), it still had a duty to release the financial records that were relevant to the specific factual claims and counterproposals made during bargaining. Companies must be careful to avoid making specific claims regarding their financial situation or else risk having to release their financial records to a union that represents its employees.