Labor & Employment Law Daily Wrap Up, LABOR—UNFAIR LABOR PRACTICES—D.C. Cir.: Employer unlawfully implemented final offer prior to reaching impasse in bargaining, (Mar 10, 2025)

By Ronald Miller, J.D.

Unfair labor practices against the employer stemmed from the Board’s determination that it was not entitled to unilaterally implement its final offer.

Substantial evidence supported the NLRB’s finding that an employer violated the NLRA by unilaterally changing the employment terms of its unionized employees even though its negotiations with the employees’ union over a new collective bargaining agreement had not reached an impasse, ruled a divided panel of the D.C. Circuit. In rejecting that the employer was entitled to unilaterally implement its final offer because negotiations with the union had reached an impasse, the appeals court noted during their final bargaining session, both parties made significant concessions. Further, the employer failed to show that the union engaged in delay tactics by insisting on in-person negotiations. Judge Walker filed a separate dissenting opinion (Hood River Distillers, Inc. v. NLRB, No. 23-1235 (D.C. Cir. Mar. 7, 2025)).

The employer operates a liquor distillery in Oregon. The distillery employs approximately 25 unionized employees. In January 2019, the parties agreed to negotiate a new collective bargaining agreement.

Contract negotiations. Under the parties’ prior agreement, the employer paid in full for certain unionized employees to receive health insurance through a union trust fund. It also provided a 401(k) match and permitted union representatives to access the distillery to meet with employees.

During the first bargaining session, the parties agreed to a three-year contract term. The union wanted a 6 percent annual wage increase, a more generous 401(k) match, and to keep its members on their existing health plan. The employer, by contrast, sought significant cuts to the employees’ benefits. It proposed a three-year wage freeze and unlimited discretion to change the 401(k)-match program and move the union members to another health plan.

Final offer. The employer rejected the union’s offer, and after some back-and-forward, it presented the union with an offer labeled “final.” The offer proposed to move the union’s members to the company’s health plan; the employees would receive a 1 percent wage increase in the second and third contract years, and the existing 401(k)-match program would remain unchanged. The employer provided the union with information about its new health plan.

On November 1, the employer emailed the union that five weeks was “a reasonable amount of time” for the union to conduct the comparison of the health plans and that it wished to “finalize the contract as soon as possible.”

Impasse declared. On November 14, 2019, the employer declared an impasse and said that it would implement its final offer on January 1, 2020. The union denied that the parties were at an impasse.

Nonetheless, the parties continued to meet and offer proposals. In early April 2020, both parties communicated with the Federal Mediation and Conciliation Service, which was not conducting in-person mediation. On April 23, 2020, the employer told the union that its continued insistence on in-person mediation was an unlawful delay tactic, that the parties were at an impasse, and that it would unilaterally implement its March 30 offer on May 1.

Strike. On May 1, the employer unilaterally implemented final offer. Days later, the union’s members went on strike. The union claimed that the strike was in response to an unfair labor practice by the employer. For its part, the employer insisted that the strike was economic. In mid-May 2020, the employer began hiring replacement workers. In August 2020, the striking workers offered to return to work without conditions and demanded immediate reinstatement.

NLRB action. In December 2021, an administrative law judge found that the employer violated the NLRA, including by unilaterally implementing its final offer absent an impasse. In August 2023, the Board affirmed the ALJ’s decision. The Board also expanded the remedy fashioned by the ALJ to include certain make-whole damages.

The employer challenged four of the six unfair labor practice determinations made by the Board and objected to the Board’s expansion of the remedy. The challenged ULPs stem from the Board’s determination that the employer was not entitled to unilaterally implement its final offer.

Substantial evidence. The D.C. Circuit concluded that substantial evidence supported the NLRB’s conclusion that an employer acted unlawfully in unilaterally implementing its final offer. Therefore, the appeals court denied the employer’s petition for review and granted the Board’s cross-application for enforcement.

The appeals court disagreed with the employer’s contention that it was entitled to unilaterally implement its final offer because negotiations with the union had reached an impasse. During the final bargaining session on March 30, both parties made significant concessions. Thus, the Board reasonably determined that neither party was at the end of its rope.

Delay tactics. Next, the employer claimed it was entitled to unilaterally implement its final offer because the union engaged in unjustified delay tactics during the COVID-19 pandemic. Before the Board, the employer argued that “the Union’s insistence on in-person mediation from late March to mid-April 2020 at the beginning of the Covid-19 pandemic” was an unjustified delay tactic. However, the Board found that the employer failed to carry its burden. “While it is possible that” the union’s insistence on in-person mediation was a bad-faith delay tactic, “there is certainly no evidence in the record that would require the Board to reach such a conclusion.”

Even on appeal, concluded the appeal court, the employer has neither squarely presented nor fully developed the argument that the dilatory-tactics exception was satisfied based on pre-pandemic delay.

Dissent: In a dissenting opinion, Judge Walker argued that the overwhelming weight of evidence showed that the union failed to bargain in good faith. According to the dissent, from the start of negotiations, the union stalled. When the union completed a comparison of health plans, it did not reach out to the employer to propose negotiating dates. Thus, finding that the employer preserved its entire dilatory-tactics defense, and that the Board’s rejection of that defense lacked substantial evidence, Judge Walker dissented from the majority. Accordingly, the dissent would grant the employer’s petition for review and deny the Board’s cross-application for enforcement.

The case is No. 23-1235.

Judge: Pan, F.

Attorneys: Sasha A. Petrova Petrova (Tonkon Torp) for Hood River Distillers, Inc. Heather S. Beard for NLRB.

Companies: Hood River Distillers, Inc.

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