United States Court of Appeals
FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued September 8, 2023 Decided November 3, 2023
No. 22-1204
THRIFTY PAYLESS, INC., D/B/A RITE AID,
PETITIONER
v.
NATIONAL LABOR RELATIONS BOARD,
RESPONDENT
UNITED FOOD AND COMMERCIAL WORKERS LOCAL
8-GOLDEN STATE,
INTERVENOR
Consolidated with 22-1241
On Petition for Review and Cross-Application
for Enforcement of an Order
of the National Labor Relations Board
Stephen M. Silvestri argued the cause for petitioner. With
him on the briefs was Alana R. Glover.
Heather Beard, Attorney, National Labor Relations Board,
argued the cause for respondent. On the brief were Jennifer
2
Abruzzo, General Counsel, Ruth E. Burdick, Deputy Associate
General Counsel, David Habenstreit, Assistant General Counsel,
Milakshmi v. Rajapakse, Supervisory Attorney, and Jared D.
Cantor, Senior Attorney.
Richard Treadwell was on the brief for intervenor United
Food and Commercial Workers Local 8-Golden State in support
of respondent.
Before: WALKER and GARCIA, Circuit Judges, and
RANDOLPH, Senior Circuit Judge.
Opinion for the Court filed by Senior Circuit Judge
RANDOLPH.
RANDOLPH, Senior Circuit Judge: Thrifty Payless, Inc.,
doing business as Rite Aid, seeks judicial review of the National
Labor Relations Board’s decision that Rite Aid committed unfair
labor practices. The Board has cross-applied for enforcement of
its order.
There are three issues.
Did Rite Aid bargain to an impasse with the union regarding
employee health insurance?
Did an emergency justify Rite Aid’s transferring its
employees’ health insurance from the union-sponsored plan to
a company plan?
Was the Board’s remedy lawful and proper?
We are mindful that the first issue—did the negotiating
parties reach an “impasse”?—poses a question well suited to a
panel of social psychologists specializing in the strategy of
negotiations. Many studies deal with the common negotiating
refrain, “this is my final offer,” when the speaker knows quite
well it is not. “Lying,” or to put it mildly, “deception,” or even
more mildly, “bluffing,” is an inevitable part of negotiating,
whether at a rug bazaar in a Turkish market or in nuclear
3
disarmament talks in Geneva.
Over the years the National Labor Relations Board, in its
many iterations, has settled on a multi-factor “test”—which is by
no means a “test”—consisting of factors it considers in
determining whether the employer and the union have reached
an “impasse.” One key sign of an impasse may be when the
employer does a lockout while the union organizes a strike. See
NLRB v. Burns Int’l Sec. Servs., 406 U.S. 272, 287 (1972).
Beyond that is a vale of ambiguity.
I.
The first and second issues are fact-bound. A summary of
the evidence relating to those issues follows.
Rite Aid operates drug stores and pharmacies. The United
Food and Commercial Workers Local 8–Golden State has long
represented the company’s northern California employees.
These Rite Aid employees received their healthcare benefits
through the United Food and Commercial Workers Northern
California and Drug Employers Health and Welfare Trust Fund.
Rite Aid contributed to the Fund at rates set through collective
bargaining. In 2018, it was paying into the Fund $3.77 per
employee hour.
In early 2018, the Fund’s independent consultant, Segal
Consulting, reported that the Fund was financially unstable. The
Fund had suffered a loss of $6.4 million during the previous
eighteen months because of heightened claim activity, cutting its
reserves to $4.4 million. That amount, Segal Consulting
determined, left the Fund with reserves that were barely enough
to cover roughly two months of claims.
That May, Rite Aid and Local 8 met to discuss the Fund’s
condition. The union proposed that the company increase its
contributions to the Fund. Rite Aid responded that it wanted
cost-neutrality—if it were to consider raising its contributions to
the Fund, adjustments to other costs had to be factored in. Rite
4
Aid added that it wanted to achieve a long-term solution to the
Fund’s financial problems.
The parties maintained a dialogue regarding the Fund
during the next several months. In October, Local 8 proposed
that Rite Aid should increase its contributions to the Fund and
that there should be modifications to employee benefits. Local
8 followed up in early January 2019 to solicit the company’s
response. Rite Aid did not agree to Local 8’s proposal but
assured the union that it would negotiate a successor collective
bargaining agreement ahead of the existing contract’s July 2019
expiration date.
Those negotiations—the ones that generated the dispute
now before us—kicked off in June 2019. Local 8 presented a
proposal that included benefit modifications and an increase in
Rite Aid’s contributions to $5.72 per employee hour. In the
meantime, because the parties’ existing agreement was slated to
expire on July 13, Local 8 proposed extending that agreement
through the end of August, during which time Rite Aid would
pay the $5.72 contribution rate contained in the union’s
proposal. Rite Aid agreed to the extension on July 1.
In August, Rite Aid and Local 8 met to bargain two more
times. Rite Aid presented a list of suggested changes, but the
union rejected it, claiming that the changes shifted costs onto
employees without raising Rite Aid’s contributions or
accounting for rising healthcare costs. A few days later, Rite
Aid proposed an alternative to the Fund: switching to an
employer-sponsored healthcare plan. The parties agreed to
extend their existing agreement for another month, through
September 30, and to maintain Rite Aid’s contributions at the
increased level.
In the fall, tensions grew as the parties fleshed out their
positions. At a September meeting, Local 8 proposed extending
the existing agreement for one year, during which Rite Aid
would continue making Fund contributions at the $5.72 rate.
Rite Aid suggested instead transferring the employees’ health
5
insurance to a company-sponsored plan that it claimed would be
less expensive. When Local 8 later pressed Rite Aid on its
position regarding the union’s offer, Rite Aid wrote that a
further extension was a non-starter because of its “draconian”
cost but that Rite Aid remained “interested in continuing to
bargain.”
After the second extension agreement expired, Local 8
initiated boycott actions against Rite Aid. When the parties met
again in late October, the union blamed Rite Aid for allowing
the agreement to lapse and putting the union “in a position
where we’ve declared war.” Rite Aid expressed displeasure
regarding the boycotts.1 Local 8 reiterated its offer to roll over
the existing deal with Rite Aid continuing to make the increased
contributions.
Rite Aid revealed its economic proposal in a letter it sent a
few days after the meeting. Its plan would move employees
from the Fund to a Rite Aid-sponsored healthcare plan. It would
also provide for greater wage increases as a result of the savings
reaped from switching plans. Rite Aid stated that it would not
renew the extension agreement and that, because the union had
failed to show any movement in its position, “there is nothing to
talk about.” Even so, it offered to meet “if you [i.e., the union]
feel differently.”
At the next meeting in November, Local 8’s representative
announced that the union wanted to understand the two sides’
positions to enable it to draft an appropriate proposal. Rite
Aid’s representative replied that the company would need to
enroll employees in a Rite Aid-sponsored plan soon in order to
have a January 1 launch but insisted that Rite Aid “d[id]n’t care
whose name is on” the plan. The company’s representative then
1
We base our understanding of the bargaining sessions on the
meeting notes in the record. These are not verbatim transcripts but the
parties largely accept them as sufficiently accurate for our purposes
(with an exception we address, infra, in footnote 5).
6
declared that the parties were “at impasse.” Local 8’s
representative rejected that characterization and promised to
come up with a “comprehensive proposal” that would be the
“best we think we can do.” After the meeting, the union
received information from Rite Aid about the healthcare costs of
its proposal.
The parties last came together on December 5. They
first reviewed the details of Rite Aid’s October proposal. Local
8 then presented its counterproposal, which was meant to come
“close to what [the union] perceive[d] [Rite Aid’s] budget to
be.” The plan marked a $19.3 million decrease in costs from the
union’s June proposal, achieved through reduced Rite Aid
contributions as well as cuts to employee wage and healthcare
offerings.
After two weeks of silence following the meeting, Rite
Aid sent a letter on December 20 rejecting the union’s proposal
as “not a responsible or realistic” way to ensure the Fund’s long-
term stability. Because Local 8 refused to entertain having
employees leave the Fund, Rite Aid again declared that the
parties were “at impasse” and stated it would implement its final
offer from October on January 1, 2020. The union pushed back,
decrying the claim of impasse as “inaccurate” and maintaining
that its proposal “greatly enhances the viability” of the Fund.
Further back-and-forth over email did not prove
productive, so on January 1 Rite Aid, as promised, implemented
its proposal to move employees to an employer-sponsored plan.
(The record does not reveal the Fund’s fate or its current
financial shape—if it still exists.) Later that month, Local 8
filed unfair labor practice charges with the Board.
An Administrative Law Judge concluded that Rite Aid had
committed unfair labor practices in violation of the National
Labor Relations Act when it unilaterally implemented its
proposal. The ALJ determined that Rite Aid violated its duty to
bargain in good faith because it took unilateral action even
though the parties had not yet reached an impasse. The ALJ
7
also found that the Fund’s financial situation did not give rise to
an economic exigency justifying an immediate response.
The Board in August 2022 affirmed the ALJ’s findings and
conclusions. Thrifty Payless, Inc. d/b/a Rite Aid, 371 N.L.R.B.
No. 124, 2022 WL 3356576 (Aug. 11, 2022). The Board
ordered Rite Aid to cease and desist its unilateral actions and
refusal to bargain; to resume bargaining upon the union’s
request; to rescind the unilateral changes it had made; and to
make current employees (and those who retired after January 1,
2020) whole for any loss of benefits suffered due to Rite Aid’s
actions. Like the ALJ, the Board also imposed a make-whole
remedy ordering Rite Aid to make all required payments to the
Fund that it had withheld and to reimburse employees for any
resulting expenses they incurred. The Board amended that
remedy in part by further obligating Rite Aid to cover all
employees who retired after Rite Aid switched out of the Fund
and pay back any personal contributions that employees made
to the Fund after Rite Aid’s action.
II.
The main issue here is whether Rite Aid was entitled to
implement its own proposal instead of continuing negotiations
with the union. Sections 8(a)(5) and (1) of the National Labor
Relations Act, 29 U.S.C. § 158(a)(5), (1), obligate an employer
to bargain in good faith with its employees’ union.2 Wayneview
Care Ctr. v. NLRB, 664 F.3d 341, 347 & n.1 (D.C. Cir. 2011).
2
Section 8(a)(5) makes it an unfair labor practice for an employer
“to refuse to bargain collectively with the representatives of his
employees,” while section 8(a)(1) prohibits “interfer[ing] with,
restrain[ing], or coerc[ing] employees in the exercise of the[ir] rights”
under the Act. 29 U.S.C. § 158(a)(5), (1). Violating the former
automatically results in a violation of the latter. Regal Cinemas, Inc.
v. NLRB, 317 F.3d 300, 309 n.5 (D.C. Cir. 2003).
8
As a result, an employer can change the conditions of
employment only if the parties reach an agreement or if the
negotiations break down and result in an impasse, subject to two
exceptions that we will take up in a moment. Id. at 347–48. In
reviewing the Board’s decision, we must accept its factual
findings so long as they are supported by substantial evidence.3
Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359,
366–68 (1998); see 29 U.S.C. § 160(e).
A.
Rite Aid’s primary theory is that the parties were at an
impasse when the company moved its employees out of the
Fund and into a Rite Aid-sponsored plan. An impasse occurs
only when both sides have exhausted the prospects of reaching
a deal and are “at the end of their rope,” Oak Harbor Freight
Lines, Inc. v. NLRB, 855 F.3d 436, 444 (D.C. Cir. 2017)
(citation omitted), leaving no “realistic prospect” that further
discussions will be fruitful, Teamsters Loc. Union No. 639 v.
NLRB, 924 F.2d 1078, 1083 (D.C. Cir. 1991) (citation omitted).
The Board determines the existence of an impasse by
considering, among other things, the parties’ bargaining history,
their good faith in negotiations, the length of the negotiations,
the importance of the points of contention, and the
“contemporaneous understanding of the parties as to the state of
negotiations.” Taft Broad. Co., 163 N.L.R.B. 475, 478 (1967),
review denied sub nom. Am. Fed’n of Television & Radio
Artists, AFL-CIO, Kan. City Loc. v. NLRB, 395 F.2d 622, 623
(D.C. Cir. 1968).
The record contains enough evidence to support the Board’s
finding that the parties were not at an impasse. An impasse
arises when neither side is open to compromise. Grinnell Fire
3
Because the Board affirmed the ALJ’s findings, we refer to
those findings as made by the Board.
9
Prot. Sys. Co., 328 N.L.R.B. 585, 586 (1999), enforced, 236
F.3d 187 (4th Cir. 2000). So each party’s understanding of the
state of the negotiations takes on “central importance” in the
impasse analysis.4 Teamsters Loc. Union No. 639, 924 F.2d at
1084.
The Board found that Local 8’s representative stated in
September 2019 that the union would “listen to whatever
thoughts” Rite Aid had; that the union proposed further
bargaining dates in October even though Rite Aid’s
representative suggested that there was “nothing to talk about”;
and that the union rejected Rite Aid’s first declaration of
impasse in November by promising to “come back with the best
we think we can do.” To the Board, those were signals that
Local 8 was still amenable to making a deal and did not view the
negotiations as having run out of steam.
The union followed up on its assurances in December by
making a proposal that marked, as one Board Member put it,
“significant movement” toward Rite Aid’s position. Rite Aid’s
main objectives in the negotiations were two-fold: reducing
costs and improving the long-term viability of the Fund. Local
8’s proposal—developed with input from the Fund’s consultant,
Segal Consulting—reflected progress on the first objective. It
reduced costs by more than $19.3 million compared to the
union’s previous proposal. The proposal did so by increasing
Rite Aid’s contributions to the Fund (though to a lesser extent
than previous proposals)—and also by making concessions on
4
Of course, it is hard to conceive of a scenario—and the caselaw
does not suggest one—in which a union will ever declare an impasse.
After all, an impasse enables the employer to implement its last offer.
That means the union will always contend that talks must go on. So
a union’s “professions” to that effect must be considered alongside
“objective evidence” of the movement in its bargaining position over
the course of the negotiations. Atrium of Princeton, LLC v. NLRB,
684 F.3d 1310, 1312–13 (D.C. Cir. 2012).
10
the employee side, such as foregoing a wage increase for one
year, eliminating automatic healthcare enrollment for new hires,
and introducing a more cost-effective healthcare partnership tier.
Those hard numbers and proposed changes to benefits tend
to show that Local 8 was attempting to find a middle ground
with Rite Aid.5 The union’s concessions on costs support the
Board’s view that there was “reason to believe that further
bargaining might [have] produce[d] additional movement.”
Hayward Dodge, Inc., 292 N.L.R.B. 434, 468 (1989) (citation
omitted).
Rite Aid claims that the union’s proposal was nonetheless
inadequate because the union did not acknowledge Rite Aid’s
desire to address the Fund’s long-term stability. In support, Rite
Aid emphasizes a statement from Local 8’s representative at the
December 2019 meeting that the union was “giv[ing] up on”
“building up the reserves.” A fuller recounting of the statement
indicates that the union’s representative said the union was
giving up on building up reserves “for now” “because [the Fund]
was so underfunded”—and then said that if things went well,
“we can start to build back up the reserves.” In response, Rite
Aid’s representative summed up Local 8’s position as “help[ing]
[Rite Aid] build reserves in a different way,” and the union
representative agreed.
As to Local 8’s supposed failure to account for long-term
viability of the Fund, it is true that the union presented its
proposal orally at the meeting and did not provide a work-up of
the Fund’s estimated financial future. But Rite Aid never tried
5
Rite Aid attacks the Board’s finding that Rite Aid’s
representative, despite her later denial, said in the December meeting
that the union’s proposal showed significant movement. This
amounted to a credibility determination and only “the starkest error”
could justify setting it aside. Constellium Rolled Prods. Ravenswood,
LLC v. NLRB, 45 F.4th 234, 243 (D.C. Cir. 2022) (citation omitted).
In any event the union’s proposal speaks for itself.
11
to determine whether the union’s proposal would improve the
Fund’s fiscal health. Rite Aid did not take the proposal back to
its own experts for analysis, it did not confer with the union’s
experts to understand how they had developed the plan, and it
did not seek input from Segal Consulting.6 If it had done so,
Rite Aid would have discovered that the plan at least arguably
would have increased reserves (as shown by the later testimony
of a consultant for Segal Consulting), triggering Rite Aid’s duty
to continue negotiating. Particularly given the union’s
significant movement on costs, Rite Aid’s ipse dixit that the
proposal was inadequate lends little support to its disregard of
the offer.
Rite Aid accuses Local 8 of refusing to consider the
company’s proposals and needs. Yet Rite Aid elsewhere resists
the notion that it was wedded to switching to a Rite Aid-
sponsored plan rather than adjusting the Fund. And there are
some indications that the union’s disinterest in that option did
not necessarily reflect an overall rejection of Rite Aid’s position.
For instance, when Rite Aid expressed displeasure at the
proposed increases to its Fund contributions, Local 8 made cuts
between $0.20 and $0.70 per employee hour to the contribution
level it proposed for each year of its plan. The union also
eliminated automatic healthcare enrollment in its December
proposal after Rite Aid first proposed that idea in August.
True, we have held that an impasse occurs when an
employer issues an ultimatum on a certain topic and the union
comes up short of fully agreeing with that demand. Mike-Sell’s
Potato Chip Co. v. NLRB, 807 F.3d 318, 323 (D.C. Cir. 2015).
6
Rite Aid’s letter declaring impasse asserted that its actuaries
“agree[d]” that the Union’s proposal failed to address viability, but
neither that letter nor anything else Rite Aid cites demonstrates any
substantive analysis of the union’s proposal. And Rite Aid does not
dispute the Board’s express finding that it failed to have its benefit
experts analyze the plan.
12
On the face of it, Local 8’s proposal did not fail to satisfy any
hard line or last offer laid down by Rite Aid. As a result, Rite
Aid could be expected to give the offer a fair shake, not
“abruptly” declare impasse after two weeks of inaction. See id.
at 324–25. At least the Board was warranted in so finding.
The brief duration of the negotiations over Local 8’s
proposal in December 2019 also tends to support the Board’s
finding. See Taft, 163 N.L.R.B. at 478. At the parties’
December meeting, they spent the morning on Rite Aid’s most
recent proposal, and then took forty-four minutes in the
afternoon to discuss the union’s proposal. After that, Rite Aid
did not engage with the union or Segal Consulting until
declaring an impasse two weeks later.
Given the complexity of the issues and their undisputed
“importance” to the parties, see id., the Board reasonably
concluded that Rite Aid was unjustified in walking away from
the bargaining process after less than an hour of negotiations.
As one Board Member noted, Local 8’s efforts to achieve
compromise “warranted a more thorough review and response”
from Rite Aid before ending the talks.
Even though Rite Aid and Local 8 met throughout 2018 and
2019, they did not begin negotiating a successor collective
bargaining agreement until mid-2019. The union did not receive
Rite Aid’s economic proposal until October 2019, and only got
the cost information in December. So the actual dialogue on the
issues that led to the claimed impasse only took place across a
handful of sessions, during which the parties came in with new
ideas and made changes from their prior proposals. Those
interactions culminated in a brief back-and-forth over the latest
proposal from each side at the December meeting.
None of that resembles the prolonged dialogue without
signs of movement in the cases that Rite Aid cites. Instead, the
records show two sides engaging in a cyclical process of offer,
discussion, evaluation, and counteroffer. The Board concluded
that the process had not yet been exhausted. Because substantial
13
evidence shows that Rite Aid and Local 8 were not at an
impasse, we uphold the Board’s determination.7
B.
In the alternative, Rite Aid claims it properly implemented
its proposal unilaterally even if the parties had not yet reached
impasse. An employer’s duty to bargain in good faith to
agreement or impasse has two exceptions: when the union
engages in dilatory tactics to delay bargaining, or when the
employer is compelled to act to address an economic exigency.
Vincent Indus. Plastics, Inc. v. NLRB, 209 F.3d 727, 734 (D.C.
Cir. 2000).
Rite Aid invokes both exceptions. But under the National
Labor Relations Act, “[n]o objection that has not been urged
before the Board, its member, agent, or agency, shall be
considered by the court” absent “extraordinary circumstances.”
29 U.S.C. § 160(e). Rite Aid never raised a dilatory-tactics
defense in its exceptions to the ALJ’s decision or in its brief
before the Board, and there are no extraordinary circumstances
that excuse its neglect. We therefore do not consider that
argument.
Rite Aid did make an exigency argument before the Board,
so it is properly before us. An employer is entitled to take
unilateral action to stave off “a dire financial emergency”—one
“in which time is of the essence and which demand[s] prompt
action.” Cibao Meat Prods., Inc. v. NLRB, 547 F.3d 336, 340
(2d Cir. 2008); RBE Elecs. of S.D., Inc., 320 N.L.R.B. 80, 82
(1995). The employer bears the burden of showing that there
was an economic exigency that “was caused by external events,
was beyond the employer’s control, or was not reasonably
7
The Board also relied on the parties’ lengthy bargaining history
and its finding that Rite Aid negotiated in bad faith. We uphold the
Board’s finding without relying on those factors.
14
foreseeable.” Vincent Indus. Plastics, 209 F.3d at 734 (quoting
RBE Elecs., 320 N.L.R.B. at 82).
Clearly, the Fund experienced significant financial hardship
in 2018 and 2019. Its reserves fell to $4.4 million in early 2018;
the previous time they dropped to that level, in 2014, had been
unprecedented. From there, the reserves kept dwindling, down
to $1.2 million in November 2019. Even though the Board
found that the Fund “was able to function through the various
fluctuations of claims” for 35 years, the Fund’s position in late
2019 was markedly lower than it had been since at least
2014—if not ever.
By December 23, 2019, however, the reserves had risen to
more than $1.6 million—a $400,000 increase in the span of a
month. That increase notably took place even though months
had elapsed since Rite Aid last made the increased contributions
to the Fund required under the two extension agreements.
Those circumstances support the Board’s determination that
time was not of the essence and that prompt action was not
necessary. The parties do not explain, and the record does not
reveal, why the Fund suddenly experienced a net gain in
reserves in December 2019. Even more puzzling, Rite Aid had
stopped making heightened contributions under the extension
agreements in September, so by December its contributions had
returned to their original level. Regardless of what caused the
growth in reserves, though, the Board rightly pointed out that the
growth calls into question whether Rite Aid really had no choice
but to implement its own plan. And a consultant for Segal
Consulting testified that the union’s plan would have continued
to increase reserves, further undermining Rite Aid’s claim.
Any reasonable consideration of exigency must consider
“an employer’s need to run its business” and the inherently
uncertain task of making corporate decisions in the face of a
potential crisis. RBE Elecs., 320 N.L.R.B. at 82. Management
does not have a crystal ball to help it assess the likelihood of
adverse outcomes of various courses of action (or inaction).
15
Here, the Board acknowledged that it was “impossible” for Rite
Aid “to predict what claims might come in and how that would
impact the reserves.” And Rite Aid asserts without contest that
the reserves as of November 2019—which apparently were at an
historic low—could only cover a few weeks’ worth of
healthcare coverage for Rite Aid employees. So Rite Aid’s
concern that inaction could have had damaging consequences is
understandable.
Although Rite Aid had some latitude, the Board reasonably
found that Rite Aid was not “compelled” to take unilateral
action at that time. Rite Aid had known that the Fund was in
decline since early 2018, yet allowed more than a year and a half
to pass before implementing its plan—and, as explained, Rite
Aid decided to implement its plan not in November 2019 but a
month later, when reserves were on the rise. See Quality Health
Servs. of P.R., Inc. v. NLRB, 873 F.3d 375, 388 (1st Cir. 2017).
Even then, Rite Aid only acted after walking away from a
proposal from Local 8 that might have increased those reserves.
And Rite Aid does not explain why it thought it had no
alternative.
Absent an exigency, then, Rite Aid had no right to
implement its healthcare plan without reaching an agreement or
an impasse with Local 8. Because Rite Aid jumped the gun, the
Board properly concluded that Rite Aid committed unfair labor
practices in violation of Sections 8(a)(1) and (5).
III.
Rite Aid also challenges the Board’s remedy requiring the
company to make all delinquent payments to the Fund. The
Board’s initial response is that Rite Aid did not preserve its
objection to the remedy, and so we must ignore the company’s
objection. See 29 U.S.C. § 160(e).
“[T]he critical inquiry” is whether the arguments in front of
the Board were sufficient to put the Board “on notice that the
16
issue might be pursued on appeal.” United Food & Com.
Workers Union, Loc. 400 v. NLRB, 989 F.3d 1034, 1037 (D.C.
Cir. 2021) (citation omitted). Rite Aid excepted to the ALJ’s
“recommended remedy of making all contractually-required
contributions to the [Fund]” because “employees have been
covered by a substantially similar health plan since Rite Aid’s
implementation [of its own proposal] after impasse.” Now, Rite
Aid says that “the remedy should be adjusted” to account for the
fact that employees “have received coverage under the Rite Aid
health care.” That is largely the same point, so the Board had
notice of it.
Rite Aid also faults the Board for “actively and substantially
alter[ing]” the ALJ’s remedy. The Board kept intact the
mandate that Rite Aid make all withheld payments to the Fund
but also ordered Rite Aid to cover retired employees and
reimburse any personal contributions employees had made to the
Fund.
To the extent Rite Aid objects to the Board’s changes, we
cannot consider that argument. A party can challenge the
Board’s sua sponte amendment to a remedy by moving for
reconsideration of the Board’s decision. See 29 C.F.R. §
102.48(c). Because there is a mechanism for the Board to
consider challenges to its own sua sponte actions, a party must
give the Board the first go at resolving such arguments. See
Spectrum Health-Kent Cmty. Campus v. NLRB, 647 F.3d 341,
349 (D.C. Cir. 2011). Otherwise, there is the bar of § 160(e).
See Teamsters Loc. 115 v. NLRB, 640 F.2d 392, 398 (D.C. Cir.
1981).
The bulk of Rite Aid’s argument concerns the same issue it
did present to the Board: whether Rite Aid was entitled to set
off the remedy by the amount it had contributed to employees’
healthcare coverage under its own plan. Both the original and
the amended remedy contained the same core requirement that
Rite Aid make all delinquent payments to the Fund, so Rite
Aid’s setoff argument before the Board sufficed to preserve it
17
for judicial review. See United Food & Com. Workers Union,
989 F.3d at 1037.
Rite Aid relies on our decision in Grondorf, Field, Black &
Co. v. NLRB, where we explained that although the Board
enjoys “broad discretion” in fashioning remedies, “its orders
must be remedial, not punitive.” 107 F.3d 882, 888 (D.C. Cir.
1997). Like Rite Aid, the companies in Grondorf challenged a
Board order requiring them to make all delinquent payments to
the union pension and health and welfare funds. Id. We
recognized that when “an employer unlawfully ceases
contributions to a union benefit fund, the Board, with court
approval, generally requires the employer to make up the
contributions” in order to make employees whole and restore the
fund’s viability. Id. But when the employer has provided
alternative benefits, compelling reimbursement is unwarranted
“to the extent that it . . . ‘results in a windfall for the union
funds.’” Id. (citation omitted). As a result, our court in
Grondorf remanded the order to the Board so the companies
could demonstrate the extent to which their remedial obligations
should be reduced to account for the benefits they had provided
in the employer-sponsored plans. Id.
We follow the same approach here. The Board does not
dispute that Grondorf is on all fours with this case. We
therefore will remand the Board’s order to allow Rite Aid to
demonstrate whether its “contributions to the [Fund] must be
reduced” based on the benefits it provided through its employer-
sponsored plan, to “avoid an improper windfall” for the Fund.
Id. As the Board notes, however, any disputes over the “specific
calculations as to the amounts . . . due” should be resolved in a
future compliance proceeding. Sure-Tan, Inc. v. NLRB, 467
U.S. 883, 902 (1984); see 29 C.F.R. § 102.54(a).
***
18
The Board’s determination that Rite Aid was not entitled to
implement its own proposal was supported by substantial
evidence. To that extent we deny Rite Aid’s petition for review.
We deny the Board’s cross-application for enforcement and
remand the order for further proceedings consistent with this
opinion.
So ordered.