Labor & Employment Law Daily Wrap Up, LABOR—BARGAINING—D.C. Cir.: NLRB failed to show parties did not reach ‘impasse’ and employer’s threat to withdraw from pension fund unlawful, (Jun 16, 2025)

By Ronald Miller, J.D.

This case differed from most “impasse” cases in that the employer did not implement its “last, best, and final” proposal to cease contributing to the pension fund and it continued to “bargain” with the union even after announcing that they were at “impasse.”

Substantial evidence did not support the NLRB’s decision that an employer bargained in bad faith by threatening to end its contributions to a union pension fund after the parties reached an impasse in negotiations, ruled the D.C. Circuit. The appeals court disagreed with the Board’s premise that the parties were not at an “impasse.” The bargaining history in this case strongly supported the employer’s judgment that the parties had reached a negotiating impasse by 2021. Accordingly, the appeals court granted the employer’s petition for review regarding the Board’s decision that it had committed unfair labor practices in violation of Sections 8(a)(5) and (1) of the NLRA when it threatened to cease contributions to the pension fund (Troy Grove v. NLRB, Nos. 23-1164, 23-1176, and 23-1343 (D.C. Cir. Jun. 13, 2025)).

The employer employed seven employees at two quarries. Together, these employees constituted a bargaining unit represented by the union. The NLRB ruled that the employer violated the NLRB in bargaining with the union about a pension fund and in its treatment of two quarry employees one afternoon. Both the employer and the union petitioned for review and the Board petitioned for enforcement of its order.

Withdrawal liability. The union and the employer entered into a collective bargaining agreement that ran from July 2014 to May 2016. The agreement required the employer to contribute to a union pension fund. After a bargaining session, the employer learned that its withdrawal liability to the pension fund for the seven employees in the bargaining unit had increased over a two-year period from approximately $964,000 to $1,353,000. The employer, concerned about mismanagement of the pension fund, decided that it had to withdraw from the fund to avoid incurring even greater potential liability.

For the next two years, as the parties negotiated a replacement contract, the employer offered, and the union refused to accept, a proposal to enter into a contract in which the employer would withdraw from the pension fund. At the end of these two years of negotiations, the employer presented its “last, best, and final offer” to discontinue contributing to the pension fund.

Employee strike. A majority of the seven quarry employees voted to strike. The strike began in March 2018 and continued through 2021. While the strike was underway, the employer hired replacement employees. No movement in the parties’ bargaining positions occurred during the years of the strike.

Impasse. The parties came to the bargaining table again on July 12, 2021. At that meeting, the union stated that it would not accept a contract that did not include contributions to the pension fund. The employer countered that it would not accept a contract that included continuing the contributions. Thereafter, the employer indicated that the parties were at an “impasse.”

On July 19, the employer reiterated its refusal to agree to a contract requiring it to continue making contributions to the pension plan. It again stated that the parties were at an impasse. In response, the union denied that the parties were at an impasse. At the July 21, 2021, bargaining session, neither party produced a new proposal.

Threat to cease contributions. The General Counsel alleged that the employer committed an unfair labor practice by threatening to cease making contributions to the pension fund, because the parties were not actually at an impasse. The Board ruled that the employer and the union were not at an impasse and held that the employer bargained in bad faith in violation of sections 8(a)(5) and (1).

At impasse employers have several options: “(1) maintain the status quo, (2) implement their last offer, (3) lock out their workers (and either shut down or hire temporary replacements), or (4) negotiate separate interim agreements with the union.” An employer, during an impasse is not required to bargain with the union.

This case differed from most impasse cases in that the employer did not implement its “last, best, and final” proposal to cease contributing to the pension fund and it continued to bargain with the union even after announcing that they were at impasse.

Bad faith. Despite these distinguishing features, the Board determined that the employer had not negotiated in good faith, and therefore had committed an unfair labor practice when it informed the union that it could and would implement its last best offer. Here, the D.C. Circuit disagreed with the Board’s premise that the parties were not at an impasse.

As to whether there was an impasse, the Board adopted the reasoning of the administrative law judge that “the bargaining history, the good faith of the parties in negotiations, the length of the negotiations, the importance of the issue or issues as to which there is disagreement, the contemporaneous understanding of the parties as to the state of negotiations are all relevant factors to be considered in deciding whether an impasse in bargaining existed.”

Bargaining history. The bargaining history in this case strongly supported the employer’s judgment that the parties had reached a negotiating impasse by 2021. The union and the employer met face-to-face at least 26 times over a five-year period beginning in 2016 without reaching an agreement. During the second year of their negotiations, the employer presented its last, best offer to withdraw from the pension fund. The union responded by calling a strike. The strike lasted for at least three more years, thus demonstrating “the importance of the issue” about which the parties disagreed.

The Board’s opinion gave no indication that this five-year bargaining history counted for anything. Thus, the Board in this case did not achieve even “minimal compliance” with its duty to draw the inferences demanded from the parties’ bargaining history. The Board’s explanation was not supported by substantial evidence. Moreover, the ALJ’s underlying legal theory, adopted by the Board, was irrational.

To conclude that the parties were not at an impasse because the union denied that the parties were at an impasse was irrational. It amounted to a proposition that the parties were not at an impasse because they were at an impasse about whether they were at an impasse. “A union official’s denial that an impasse exists, combined with a new negotiating proposal that does not meet the employer’s position, does not rebut an impasse.” An impasse enables the employer to implement its last offer. That means the union will always contend that talks must go on.

Information request. Moreover, the Board concluded that the parties had not reached an impasse because the union made an information request the employer had not yet satisfied in July 2021. But the appeals court determined that the union’s request for information—a request made for the first time after five years of negotiations—came too late to avert an impasse. The union sent its letter two days after a meeting between the parties, during which the employer indicated that the parties were at an impasse. The request was an obvious ploy, concluded the appeals court. A union’s “movement” after impasse has already been reached cannot avoid an impasse.

The cases are Nos. 23-1164, 23-1176 and 23-1343.

Judge: Randolph, A.

Attorneys: Arthur W. Eggers (Califf & Harper) for Troy Grove. Steven A. Davidson for International Union of Operating Engineers, Local 150, AFL-CIO. Barbara Sheehy for NLRB.

Companies: Troy Grove; Vermillion Quarry; International Union of Operating Engineers, Local 150, AFL-CIO

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