In the
United States Court of Appeals
For the Seventh Circuit

Nos. 00-1626, 00-2032

Duffy Tool & Stamping, L.L.C.,

Petitioner/Cross-Respondent,

v.

National Labor Relations Board,
Respondent/Cross-Petitioner,

and

International Union, United Automobile,
 Aerospace, and Agricultural Implement
 Workers of America, AFL-CIO,

Intervenor.

Petition to Review and Cross-Petition
to Enforce Order of the
National Labor Relations Board.

Argued October 23, 2000--Decided December 1, 2000



 Before Posner, Diane P. Wood, and Williams, Circuit
Judges.

 Posner, Circuit Judge. When a union wins an
election to be the exclusive bargaining
representative of a group of workers, the
employer becomes duty-bound to bargain in good
faith with the union. 29 U.S.C. sec. 158(a)(5).
The aim of the bargaining process is to negotiate
a collective bargaining agreement that will
define the terms and conditions of employment of
the represented workers during the term of the
agreement. There is no duty to agree, however,
and if the parties deadlock (reach "impasse," in
the jargon of labor law), the employer is free to
operate his business as he did before bargaining
began, and therefore he may alter the terms and
conditions of the workers’ employment. E.g.,
Litton Financial Printing Div. v. NLRB, 501 U.S.
190, 198 (1991); Lapham-Hickey Steel Corp., 904
F.2d 1180, 1185 (7th Cir. 1990). He can also do
this if the union takes steps to delay or avoid
bargaining or if the alteration is necessary to
avoid serious hardship to the employer. E.g.,
Vincent Industrial Plastics, Inc. v. NLRB, 209
F.3d 727, 734 (D.C. Cir. 2000); Visiting Nurse
Services of Western Mass., Inc. v. NLRB, 177 F.3d
52, 57-58 (1st Cir. 1999). But if there is no
deadlock, no foot-dragging by the union, and no
exigency requiring an immediate change in the
terms or conditions of employment to stave off
disaster, the employer may not make such a change
unilaterally. Litton Financial Printing Div. v.
NLRB, supra, 501 U.S. at 198. This is an
important rule. The overriding goal of federal
labor law is labor peace, and is promoted when
the parties to a labor dispute avoid a test of
strength involving a strike or a lockout by
negotiating a collective bargaining agreement,
which will standardly include a no-strike clause,
thus assuring labor peace during the term of the
agreement (usually three years) and setting the
stage for future renewals of the agreement.
Anything that interferes with the negotiation
process and makes reaching agreement less likely
interferes with this goal.

 It is against this policy background that we
consider the employer’s argument in this case,
which is that it is free to make unilateral
changes in the terms and conditions of its
workers’ employment as soon as the parties reach
deadlock on any issue in the negotiation. The
union won an election back in October of 1996.
During the course of the ensuing negotiations,
the company put forward a proposal to institute a
"no fault" attendance policy under which a tardy
worker would get a certain number of points for
every incident of tardiness, regardless of
whether he was at fault, and if he accumulated a
specified number of points could be fired. The
company’s existing attendance policy was more
lenient. The union opposed the proposal. The
employer declared an impasse and on January 1,
1998, put the new policy into effect and later
fired some workers who might not have been fired
under the old policy. The Board found that while
the parties may have been deadlocked over the "no
fault" policy by the beginning of 1998, they were
not yet deadlocked on all the mandatory issues
for collective bargaining; they had not reached
an "overall impasse." The employer disagrees that
it had not yet reached an overall impasse with
the union, but there is enough evidence to
support the Board’s conclusion, leaving the
employer to argue that piecemeal impasse, the
deadlock over the proposed new attendance policy,
was enough to free Duffy to implement the
proposal.

 Decisions of the Fifth Circuit support this
position. NLRB v. Pinkston-Hollar Construction
Services, Inc., 954 F.3d 306, 311-12 (5th Cir.
1992); Nabors Trailers Inc. v. NLRB, 910 F.2d
268, 273 (5th Cir. 1990); Winn-Dixie Stores, Inc.
v. NLRB, 567 F.2d 1343, 1349-50 (5th Cir. 1978);
NLRB v. J.P. Stevens & Co., 538 F.2d 1152, 1162
(5th Cir. 1976); A.H. Belo Corp. v. NLRB, 411
F.2d 959, 971 (5th Cir. 1969); NLRB v. Tex-Tan,
Inc., 318 F.2d 472, 480-81 (5th Cir. 1963).
Though only Winn-Dixie and Belo involved neither
foot-dragging by the union nor financial
exigencies compelling the employer to make the
change immediately, cf. Visiting Nurse Services
of Western Mass., Inc. v. NLRB, supra, 177 F.3d
at 59; NLRB v. Triple A Fire Protection, Inc.,
136 F.3d 727, 738-39 (11th Cir. 1998), all the
cases make clear the Fifth Circuit’s belief that
an employer is free to make a unilateral change
upon sufficient notice to enable the union to
discuss its objections with the employer, even if
the parties are in the midst of bargaining. The
Board, however, has repeatedly rejected the Fifth
Circuit’s doctrine, RBE Electronics of S.D. Inc.,
320 N.L.R.B. 80, 81-82 (1995); Intermountain
Rural Electric Ass’n, 305 N.L.R.B. 783, 786
(1991), enforced, 984 F.2d 1562 (10th Cir. 1993);
Master Window Cleaning, Inc., 302 N.L.R.B. 373,
379 (1991), enforced, 15 F.3d 1087 (1994); Winn-
Dixie Stores, Inc., 243 N.L.R.B. 972, 974 (1979),
and other circuits have sided with the Board,
Vincent Industrial Plastics, Inc. v. NLRB, supra,
209 F.3d at 735; Visiting Nurses Services of
Western Mass., Inc. v. NLRB, 177 F.3d at 58; NLRB
v. Central Plumbing Co., 492 F.2d 1252, 1254 (6th
Cir. 1974), rightly in our view.

 The employer’s position would empty the duty to
bargain of meaning, and this in two respects: (1)
by removing issues from the bargaining agenda
early in the bargaining process, it would make it
less likely for the parties to find common
ground; (2) by enabling the employer to paint the
union as impotent, it would embolden him to hold
out for a deal so unfavorable to the union as to
preclude agreement.

 (1) A negotiation is more likely to be
successful when there are several issues to be
resolved ("integrative bargaining") rather than
just one, because it is easier in the former case
to strike a deal that will make both parties feel
they are getting more from peace than from war.
Howard Raiffa, The Art and Science of Negotiation
97-103, 131-32 (1982). If the only thing at issue
in a labor negotiation is wages, that is, money,
the parties are playing a zero-sum game: a dollar
more in wages is a dollar gained by the union but
a dollar lost by the employer. But suppose a dues
checkoff is also at issue. Since it probably is
worth more to the union not to have to dun the
workers for their union dues than it costs the
employer to deduct the dues from the worker’s
paycheck and remit them to the union, the union
may be willing to give a little in bargaining
over wages in order to get the dues checkoff.
Similarly, the employer may be willing to "pay"
for a no-strike clause by agreeing to a grievance
procedure jointly administered by the union and
the employer, and that may be a concession that
the union very much wants in order to give the
workers a sense that the union is protecting them
from arbitrary discipline by the employer. With
both parties eager for this trade, it may be
easier for them to compromise on other issues.
The particular trade creates value that can be
used to fund, as it were, other concessions by
both sides, bringing the parties nearer to the
state in which both feel better off with an
agreement than with a strike.

 The employer points out that the implementation
of a proposal need not remove it from the
negotiation, since it can always be rescinded.
The point is literally but not practically
correct. The employer may be able to make
implementation irrevocable as a practical matter
by sinking heavy costs in the implementation and
thus committing himself to stay the course, for
example by laying off a number of workers
pursuant to the adopted proposal and hiring
permanent replacements under contracts providing
for generous severance benefits. In addition, the
employer will be reluctant to lose face with the
workers by abandoning a measure that it put into
effect during the negotiation to show (see next
paragraph) that the union could do nothing for
them, and he may also fear that if he
renegotiates after declaring a deadlock it will
strengthen the union’s contention in the ensuing
proceedings before the Labor Board that the
parties had not in fact deadlocked.

 (2) If by deadlocking on a particular issue the
employer is free to implement his proposal with
regard to that issue, he signals to the workers
that the union is a paper tiger. Vincent
Industrial Plastics, Inc. v. NLRB, supra, 209
F.3d at 735; Visiting Nurses Services of Western
Mass., Inc. v. NLRB, supra, 177 F.3d at 59. This
is especially true when as in this case the
proposal reduces the workers’ job security
compared to what it was before the election. It
makes it look as if the workers are actually
worse off as the result of the election--which of
course is what the employer, looking forward to a
possible strike vote and to the eventual
decertification of the union, wants them to
think. By undermining support for the union, the
employer positions himself to stiffen his demands
in what remains of the bargaining process,
knowing that if the process breaks down the union
may be unable to muster enough votes to call a
strike. This stiffening of terms is likely to
cause the process to break down, since the union
cannot afford, by moderating its own demands, to
acknowledge that it is indeed a paper tiger.
 There is a further and we think conclusive
objection to the employer’s position. There
really is no such animal as a deadlock on a
single issue in a multifaceted negotiation; or if
there is it is vanishingly rare, a truly
endangered species. Nothing is more common during
a negotiation than for one or both parties to
make nonnegotiable demands. Usually this is
bluffing, since if the negotiation is truly
multifaceted, there is generally a price at which
the parties will surrender these demands. Anyone
who has been involved in a negotiation knows
this. Suppose you’re negotiating with a builder
over the terms for the construction of a house.
You are very concerned about delay and ask that
he agree to include a liquidated-damages clause
that will obligate him to reduce the contract
price by $100 for every day that completion is
delayed beyond six months from the signing of the
contract. He refuses indignantly, saying that he
never agrees to a damages-for-delay clause, that
the risk is too great given the uncontrollable
contingencies of construction, that you should
find someone else to build your house. You would
be foolish to take this emphatic refusal at face
value, as creating an impasse that placed the
issue beyond negotiation. Raiffa, supra, at 142-
45. You would probably come back to him with an
offer to extend the deadline for completion, or
to accept a somewhat higher purchase price to
compensate him for assuming the risk of delay, or
to reduce the amount of per diem damages.

 That is doubtless the case here as well. It is
inconceivable that the employer is so wedded to a
"no fault" attendance policy--an idea that first
occurred to it during the negotiation--that it
would not abandon the policy in exchange for a
suitable concession in some other term of the
collective bargaining agreement. Not that an
employer has no legitimate concern with
absenteeism; of course it does; but until the
union came on the scene the employer had not
thought a "no fault" policy the right way to deal
with the problem. Suppose the workers care above
all about their job security and are therefore
desperate to have any discharges for absenteeism
governed by a "for cause" rather than a "no
fault" standard. Then the employer might be able
to extract generous concessions in exchange for
backing down from his demand. An unreasonable
refusal to even consider backing down from a
demand plainly not central to the employer’s
business or labor relations would itself be a
sign of bad faith. See NLRB v. Wright Motors,
Inc., 603 F.2d 604, 608-10 and n. 5 (7th Cir.
1979); NLRB v. A-1 King Size Sandwiches Inc., 732
F.2d 872, 877-78 (11th Cir. 1984); NLRB v. Patent
Trader, Inc., 415 F.2d 190, 198 (2d Cir. 1969),
modified on other grounds, 426 F.2d 791 (2d Cir.
1970) (en banc); NLRB v. Reed & Prince Mfg. Co.,
205 F.2d 131, 139 (1st Cir. 1953); see also
Federal Mogul Corp., 212 N.L.R.B. 950, 951
(1974), enforced, 524 F.2d 37 (6th Cir. 1975).

 For all these reasons, we think the Board is on
sound ground in insisting that the employer
bargain until it is plain that the parties are
deadlocked in the negotiation as a whole, a point
not reached here. As for the employer’s complaint
that the provision of the Board’s remedy that
seeks to restore the status quo by rescinding the
"no fault" attendance policy and reinstating the
workers fired under it will require the
reinstatement of the workers that the company
would have fired even under the previous, more
lenient policy, we do not read the order so. The
order directs the company to reinstate with
backpay employees "discharged, suspended, or
otherwise denied work opportunities as a result
of the work rules" (emphasis added). The order is
not intended to make any worker better off than
he would have been had the company not violated
the law by instituting the new attendance policy
before it had bargained to impasse.

 The petition for review is denied, and the
cross-petition to enforce the Board’s order is
granted.
