254 F.3d 1105 (D.C. Cir. 2001)
TruServ Corporation, f/k/a Cotter & Company, Petitionerv.National Labor Relations Board, Respondent
Teamsters Local Union No. 293, Intervenor
No. 00-1356
United States Court of Appeals  FOR THE DISTRICT OF COLUMBIA CIRCUIT
Argued April 19, 2001Decided July 6, 2001Corrected August 17, 2001

[Copyrighted Material Omitted][Copyrighted Material Omitted]
On Petition for Review and Cross-Application for Enforcement of an Order of the  National Labor Relations Board
Frank W. Buck argued the cause for petitioner.  On the  briefs were Mark V. Webber and Kenneth D. Schwartz. Kathy B. Houlihan entered an appearance.
Usha Dheenan, Attorney, National Labor Relations Board,  argued the cause for respondent.  With her on the brief were  Leonard R. Page, Acting General Counsel, John H. Ferguson, Associate General Counsel, Aileen A. Armstrong, Deputy  Associate General Counsel, and Charles Donnelly, Supervisory Attorney.
Basil William Mangano and John M. Masters were on the  brief for intervenor Teamsters Local Union No. 293.
Before:  Edwards, Chief Judge, Rogers and Garland,  Circuit Judges.
Opinion for the Court filed by Circuit Judge Rogers.
Rogers, Circuit Judge:


1
TruServ Corporation (formerly  Cotter & Co.) petitions for review of a decision and order by  the National Labor Relations Board.  See Cotter & Co., 331  N.L.R.B. No. 94 (July 19, 2000).  TruServ challenges for lack  of substantial evidence the Board's findings that it violated   8(a)(5) and (1) of the National Labor Relations Act, 29  U.S.C.  158(a)(1), (5) (1998), when it implemented terms and  conditions of employment prior to reaching a genuine bargaining impasse, disciplined unit employees pursuant to unilaterally implemented work rules, and refused to process  employee grievances.  TruServ also seeks reversal or modification of the Board's remedial order, which it maintains  appears to be punitive because the order would provide a  windfall to the Union's health fund for healthcare claims paid  by the company.  We grant the petition on the issue of  impasse because the Board's findings on that issue are not  supported by substantial evidence;  hence we do not reach  TruServ's alternative contention that the Union had waived  the right to bargain on work rules.  We deny the petition's  challenge to the processing of grievances. Because, however, the Board did not address Truserv's argument that the remedial order should allow for a set-off for health insurance payments made by TruServ, we remand that issue to the Board.

I.

2
TruServ Corporation manufactures and distributes hardware to various True Value Hardware stores.  Teamsters  Local 293 is the bargaining representative for the warehouse  unit employees at the Company's Westlake facility.1  A collective bargaining agreement, effective September 1, 1991, was  due to expire on August 31, 1995.  On July 20, 1995, the  Company and the Union began negotiating for a successor  bargaining agreement.  At the outset, the Company expressed its concerns with the facility's efficiency and productivity, namely, that sales from the Westlake facility had  decreased at a higher rate than sales for the Company as a  whole, and that errors in filling orders at the Westlake facility  had increased significantly.2  After the Company's opening  statement, the Union submitted a complete contract proposal  on both economic and non-economic issues.  Consistent with  its past negotiations with the Union, the Company deferred  discussion of "economic" (wages) issues until the end of the  negotiations period, and on July 21, the parties agreed on a  three-year term for the new agreement and on language for  the employee grievance procedure.  During the eight days of  negotiations,3 the key issues discussed were (1) holidays, (2)  the workweek, workday schedule, (3) healthcare, and (4)  wages.


3
A. Holidays.  The Company initially proposed to convert  certain contractual holidays (especially the day after Thanksgiving) to "personal days," which the employees could use at  other times, so that the warehouse could remain open to  process the high volume of orders.  The Union initially  proposed to add two holidays to the ten existing contractual  holidays, and to limit overtime on the days before and after a  holiday.  The Union later reduced its demands to one additional declared holiday and proposed to abandon its overtime  proposal for working on holidays if the Company agreed to  make concessions on overtime.  The Company rejected the  Union's proposal, offering instead to convert four declared  holidays to personal days.  On August 29, the Company  further modified its proposal to require the conversion of only  one holiday--the day after Thanksgiving.  The Union conditioned acceptance on the Company's agreement to declare an  additional holiday (Martin Luther King Day) a personal day. The Company showed no willingness to accept this condition.


4
B. Workweek, Workday Schedule.  The Company  sought to implement a workweek, workday schedule that  would shorten the turn-around time on receiving orders and  allow it to deliver merchandise to its members in one day. The expiring agreement provided for a Monday through  Friday schedule of five eight-hour days, and for time and onehalf on Saturdays and double time on Sundays.  The Company proposed either a four-day, ten-hour or a five-day, eighthour week, with Saturdays and Sundays included as part of  the regular work week (thus not requiring overtime).  See  Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 8.  The Union  rejected this proposal;  it opposed the idea of Saturdays and  Sundays as ordinary workdays.  On August 28, the Company  modified its proposal;  the new proposal called for a Sunday  to Saturday workweek with either four ten-hour workdays or  five eight-hour days;  overtime would accrue after four tenhour days at 1.5 times the base rate for the fifth and sixth  days, and double time on the seventh day.  The "four tens"  and "five eights" shifts would be filled first voluntarily and  then by shift in accordance with seniority and ability.  In  response to the Company's modifications, the Union offered  the following proposal:  For inbound work (i.e., receiving and  stocking merchandise), four ten-hour days or five eight-hour  days, with weekend work voluntary;  for outbound work, five  eight-hour days or four ten-hour days, with weekend work at  straight time.  The Company responded that it would pay  time and one-half beyond eight hours for the five eight-hour  days, and beyond ten hours for the four ten-hour days, but  refused to pay double time for the sixth day.


5
C. Health Care.  The Company proposed that the Union  abandon the Teamsters Fund and instead adopt the Company's health plan.  The Union proposed to maintain the Teamsters Fund exclusively, with the Company paying the entire  amount of cost increases to contributions to the Fund and  eliminating employee co-payments.  On August 28, the Company modified its offer, proposing inclusion of its plan as an  option for employees.  If employees chose the Company plan,  the Company would pay twenty-five percent of the cost;  if  employees opted to stay in the Teamsters Fund, the Company would pay a predetermined monthly contribution per  employee in the first year, and 75% of the cost of the  Company's health plan in the second year.  Although the  Company later increased this amount, the Union continued to  propose higher monthly contributions and elimination of employee copayments.


6
D. Wages. The Company had a two-tier, progressive  wage structure:  The bottom tier consisted of employees hired  after August 27, 1985;  the top tier was composed of employees hired before that date.  The Union initially proposed a  general increase of 75 cents per hour during each year of the  contract;  a merge of the two tiers by equalizing lower and  top tier wage levels over the 3 years of the contract;  and  inclusion of employees in the Company's 401(k) program. See Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 8.  On August 28, the Company proposed a continued two-tier system, with an increase in bottom tier rates of 20 cents in each  of the three years of the agreement, and an increase in top  tier rates of 20 cents, 10 cents, and 10 cents in each of the  three years, respectively.  The Union counterproposed a  merge of the two tiers over four years;  a general wage  increase of 65 cents in each year of the agreement;  and  deferred employee participation in the Company's 401(k)  program until the second year of the agreement.  The Union  also withdrew its earlier proposal for double-time payment for  overtime.  The Company counteroffered an increase in bottom tier rates of 25 cents, 25 cents, and 20 cents, and in top  tier rates of 25 cents, 15 cents, and 10 cents in each year of  the agreement.  On August 29, the parties again modified  their proposals.  The Union proposed a top tier wage increase of 60 cents in the first year and 55 cents in the second  and third years;  a merge of the two tiers over a five-year  period;  a reduction in shift premium;  and deferred employee  participation in the Company's 401(k) plan until the third year  of the agreement.  The Union also abandoned its earlier  proposal to limit mandatory overtime.  The Company counteroffered with wage increases of 30 cents, 30 cents, and 25  cents for the bottom tier, and 25 cents, 15 cents, and 10 cents  for the top tier for the three years of the agreement.  In  response, the Union proposed maintaining the two-tier system in exchange for wage increases of 60 cents, 70 cents, and  80 cents over three years for the lower tier and 50 cents for  each of the three years for the top tier.  The Union also  abandoned its request for employee participation in 401(k)  plans and reduced its shift premium demand to 30 cents per  hour, but its wage increase proposals remained over twice  what the Company proposed.


7
In retrospect, the parties present conflicting accounts of  the extent of progress in the negotiations, and of the degree  to which the parties had exhausted their willingness to make  further concessions.  The Union points to statements by its  spokesman that negotiations had advanced on a number of  issues, including holidays, and to a statement by the Union's  attorney at the outset of the August 28 session that no impasse existed because both parties had made concessions  and there were a "lot of points the Union was willing to move  on."  Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 8.  The  Company, on the other hand, points to statements indicating  impasse in the key areas of negotiation:  (1) a statement on  August 4 by a member of the Union's negotiating committee  affirming that there was an impasse at least as to holidays; (2) August 23 statements by both the Company and the Union  that the parties were at impasse on a number of "non-economic" issues, including the Company's workweek, workday proposal;  and (3) the Union's declaration upon receiving  the Final Offer that there was nothing in the Final Offer that  it could recommend to unit employees.


8
On August 29, the Company issued what it termed its "last,  best, and final offer."  For outbound work, the Company  offered a workweek, workday schedule of four ten-hour or  five eight-hour days, Monday through Friday, staffed first on  a voluntary basis and then on a mandatory basis according to  seniority and ability.  Overtime in a four-day week would be  paid at time and a half on the fifth and sixth days, and double  time on the seventh day;  overtime for the five-day workweek  would be the same as under the expiring agreement.  For  inbound work, the Final Offer required four ten-hour or five  eight-hour days Sunday through Saturday.  Overtime for the  five-day schedule would be time and one-half for the sixth day  and double time on the seventh day.  For the four-day week,  overtime would be the same as for outbound work.  As to  health care, the Final Offer included the Company's health  plan as an option for unit employees, with monthly contributions by the Company of $252, $260, and $270 over the three  years of the agreement.  As to wages, the Company presented its "bottom line" proposal:  an increase of 30 cents, 30  cents, and 30 cents for the bottom tier, and 25 cents, 15 cents,  and 15 cents for the top tier.  Prior proposals (other than  wages and health care payments) remained unchanged.  The  Final Offer thus remained substantially similar to the Company's earlier proposals and its third wage proposal of August  29.  The Final Offer provided that if the employees ratified  the contract by August 31, they would receive an extra 5 cents in their wages for the third year.  The Company stated  that it intended to implement its Final Offer if it was not  approved by August 31.


9
The Union objected to the Company's conclusion of impasse, stating through its attorney upon receipt of the Company's Final Offer that "no impasses existed and that [the  Company] would violate the Act if it implemented the offer." Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 9.  The Union  further stated that the Company's Final Offer contained  nothing that the Union could recommend to the employees. See id. at 1-2.  On August 30, the unit employees unanimously voted not to vote on the Final Offer and to strike;  however, a strike never took place.  On August 31, the Union  informed the Company that its Final Offer was "not even  dignified with a vote," and requested further meetings to  continue bargaining.4  The Company declined further meetings, stating that the Union had the Company's final offer,  and the Union filed an unfair labor practice charge.5


10
On September 6, 1995 the Company implemented its Final  Offer, terminating the contractual grievance and arbitration  procedure and the automatic deduction of union dues and  initiation fees.  On September 10, the Union sought to resume negotiations.  On September 22, the Company implemented new work rules, and thereafter took disciplinary  action against four employees based, in part, on the new work  rules.6


11
Following a hearing, an Administrative Law Judge ("ALJ")  found that the Company "did not demonstrate that an impasse existed at the time it stopped bargaining on August 29"  because the parties' bargaining sessions "[did] not constitute  the type of exhaustive negotiations which might prompt a  finding of impasse."  Cotter & Co., 331 N.L.R.B. No. 94, slip  op. at 10.  The ALJ further found that the Company had  unlawfully disciplined and discharged employees pursuant to  unlawfully implemented work rules, bypassed the Union in  dealing directly with an employee, and refused to process  employee grievances. See id. at 9-12.  The Board affirmed  the ALJ's findings that the Company violated  8(a)(5) and  (1) "by refusing to meet and bargain with the Union, by  implementing its last offer, including new work rules, in the  absence of a valid bargaining impasse, by bypassing the  Union and dealing directly with a unit employee, and by  refusing to process employees' grievances."  Id. at 1.7

II.

12
Section 8(a)(5) of the Act makes it an unfair labor practice  for an employer "to refuse to bargain collectively with the  representatives of his employees."  29 U.S.C.  158(a)(5). Mandatory areas of collective bargaining include "wages,  hours, and other terms and conditions of employment."  29  U.S.C.  158(d);  see also Litton Fin. Printing Div. v. NLRB,  501 U.S. 190, 198 (1991);  NLRB v. Katz, 369 U.S. 736, 742-43  (1962).  An employer violates this duty to bargain if, absent a  final agreement or a bargaining impasse, he unilaterally  imposes changes in the terms and conditions of employment. See 29 U.S.C.  158(d);  Katz, 369 U.S. at 742-43;  Taft  Broad. Co., 163 N.L.R.B. 475, 478 (1967), petition for review  denied sub nom. American Fed'n of Television & Radio Artists v. NLRB, 395 F.2d 622, 624 (D.C. Cir. 1968).


13
A bargaining impasse--which justifies an employer's unilateral implementation of new terms and conditions of employment--occurs when "good faith negotiations have exhausted  the prospects of concluding an agreement," Taft, 163  N.L.R.B. at 478, leading both parties to believe that they are  "at the end of their rope."  PRC Recording Co., 280 N.L.R.B.  at 635;  see also Teamsters Local 639 v. NLRB, 924 F.2d  1078, 1084 (D.C. Cir. 1991);  American Fed'n of Television  and Radio Artists, 395 F.2d at 628.  For an impasse to be  found, the parties must "have reached 'that point of time in  negotiations when [they] are warranted in assuming that  further bargaining would be futile.' "  Wycoff Steel, Inc., 303  N.L.R.B. 517, 523 (1991) (quoting Patrick & Co., 248  N.L.R.B. 390, 393 (1980)).  Whether the parties have reached  this point is a case-specific inquiry;  "[t]here is no fixed  definition of an impasse or deadlock which can be applied  mechanically to all factual situations."  Dallas Gen. Drivers,  Warehousemen and Helpers, Local 745 v. NLRB, 355 F.2d 842, 845 (D.C. Cir. 1966).  Among the factors that the Board  considers in evaluating the existence of an impasse are "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, [and] the  contemporaneous understanding of the parties as to the state  of negotiations."  Taft, 163 N.L.R.B. at 478.  After weighing  these factors, the Board will find an impasse if there is "no  realistic possibility that continuation of discussions ... would  have been fruitful."8  American Fed'n of Television and  Radio Artists, 395 F.2d at 628.


14
The Board concluded that "the parties had not bargained to  impasse before the [Company] unilaterally implemented  changes in the unit employees' terms and conditions of employment."  Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 1. In so finding, the Board "emphasize[d] that, until the [Company] abruptly claimed that its 'last, best and final offer' was  on the table and would be implemented unilaterally if not  accepted, both the [Company] and the Union had demonstrated considerable flexibility and willingness to compromise their  positions."  Id.  This, the Board observed, was evidenced by  the parties' concessions in the immediately preceding bargaining sessions;  the Union's statement, upon receiving the  Company's final proposal, that the parties were not at impasse;  and the Union's subsequent request for additional  meetings.9  See id. at 1-2.  In the Board's view, these circumstances cast doubt on the Company's characterization of its  August 29 proposal as a "final offer" and indicated that "the  parties did not have a contemporaneous understanding that  they were at impasse."  Id. at 2.  The Board declined to  consider the Union's conduct upon receiving the Company's  August 29 proposal--specifically, the Union's statement that  the Company was not offering anything that the Union could  recommend to its employees--as indicative of the Union's  final bargaining position.  Rather, the Board characterized  the Union's statement as "an understandable expression of  dissatisfaction" with the Company's "abrupt declaration that  its most recent offer was 'final' and would be implemented  unilaterally if rejected."  Id.


15
The Company contends on appeal that the Board (and the  ALJ) erred in interpreting the Company's good-faith bargaining10 and consequent concessions immediately preceding its  Final Offer as an indication that the Final Offer was not truly  final.  The Company maintains that the Board ignored the  record as a whole, which, in the Company's view, "would tell  any experienced negotiator that the parties were at impasse." Br. for Petitioner at 32.  The Board, on the other hand,  contends that "the parties had made significant progress and  demonstrated considerable flexibility on [key issues]," and  that "no contemporaneous understanding of impasse by both  sides existed, because the Union explicitly denied the existence of impasse and repeatedly requested the continuance of  bargaining, which the Company refused."  Br. for Respondent at 16.


16
The court has long recognized that "[i]n the whole complex  of industrial relations few issues are less suited to appellate judicial appraisal than evaluation of bargaining processes or  better suited to the expert experience of a board which deals  constantly with such problems."  American Fed'n of Television and Radio Artists, 395 F.2d at 627 (quoting Dallas Gen.  Drivers, 355 F.2d at 844-45).  Thus, the court ordinarily  defers to the Board's fact-finding as to the existence of a  bargaining impasse. See Teamsters Local 639, 924 F.2d at  1083;  Dallas Gen. Drivers, 355 F.2d at 844-45.  To do so,  however, the court must be satisfied that the Board's findings  are supported by substantial evidence on the record considered as a whole.  See 29 U.S.C.  160(e) (1998);  Universal  Camera Corp. v. NLRB, 340 U.S. 474, 477 (1951);  Serramonte Oldsmobile, Inc. v. NLRB, 86 F.3d 227, 233 (D.C. Cir.  1996);  Teamsters Local 175 v. NLRB, 788 F.2d 27, 30 (D.C.  Cir. 1986);  American Fed'n of Television and Radio Artists,  395 F.2d at 627.  We hold that the Board's conclusion of no  impasse fails to satisfy this standard because the Board's  findings that the Company's Final Offer was not truly "final"  and that neither party was at the end of its bargaining rope  are not supported by substantial evidence.


17
First, nothing in the record negates the Company's classification of its August 29 proposal as its "last, best, and final  offer."  Indeed, the record demonstrates that the Company,  which was facing economic exigencies, bargained in good  faith, made substantial concessions, and ultimately reached a  point when it was simply unwilling to compromise further. Although merely labeling an offer as "final" is not dispositive,  see Teamsters Local 175, 788 F.2d at 31;  Chicago Typographical Union v. Chicago Sun-Times, 935 F.2d 1501, 1508 (7th  Cir. 1991), the circumstances here are telling.  On August 4,  the Company advised the Union that when it had reached the  limits of its bargaining, it would call its final proposal its "last,  best, and final" offer.  Thus, unlike Teamsters Local 175 and  Chicago Typographical Union, where the employer set forth  a number of offers, all of which it termed "final," the Company signaled to the Union that it would use this particular  language only when it had reached its bargaining limit. Moreover, the Company's demonstrated good faith in bargaining--a Taft factor that the Board and the ALJ neglected to apply--leaves no grounds for rejecting the Company's  characterization of its August 29 proposal as its Final Offer. The record evidence thus demonstrates that in the face of  eight days of what were uniformly perceived as difficult  negotiations, the Company engaged in the kind of good-faith,  hard bargaining that characterizes impasse.  See GeorgiaPacific Corp., 305 N.L.R.B. 112, 121 (1991);  Salinas Valley  Ford Sales, 279 N.L.R.B. 679, 690 (1986);  Seattle-First Nat'l  Bank, 267 N.L.R.B. 897, 898-99 (1983), rev'd in part on other  grounds, Seattle-First Nat'l Bank, 270 N.L.R.B. 389 (1984).


18
The Board's refusal to accept the Company's Final Offer as  truly "final" was not based on the record evidence;  rather,  the Board relied on its intuitive belief that, upon further  bargaining, each side would have made additional concessions. The Board stated that "there had been movement on both  sides concerning important subjects such as wages, benefits,  and holidays, and the parties continued making concessions  until the [Company 'abruptly'] cut off that process."  Cotter &  Co., 331 N.L.R.B. No. 94, slip op. at 1.  This approach,  however, is impermissible, for it amounts to an intervention  by the Board in the parties' substantive negotiations.  In  NLRB v. American National Insurance Co., 343 U.S. 395,  404 (1952), the Supreme Court observed that the Act's requirement of good faith bargaining "does not compel either  party to agree to a proposal or require the making of a  concession."  Therefore, the Court held, "the Board may not,  either directly or indirectly, compel concessions or otherwise  sit in judgment upon the substantive terms of collective  bargaining agreements."  Id.;  see also H.K. Porter Co. v.  NLRB, 397 U.S. 99, 103 (1970).  In short, the parties remain  in control of their negotiations, and each party, not the Board,  determines at what point it ceases to be willing to compromise.  See H.K. Porter Co., 397 U.S. at 103-04;  NLRB v.  McClatchy Newspapers, 964 F.2d 1153, 1163 (D.C. Cir. 1992). This is especially appropriate where, as here, the negotiations  were conducted by experienced participants who were intimately familiar with the intricacies of the bargaining process  and whose relationship spanned more than a decade.


19
Second, the record does not support the Board's conclusion  that "the parties did not have a contemporaneous understanding that they were at impasse."  Cotter & Co., 331 N.L.R.B.  No. 94, slip op. at 2.  Taft identifies "the contemporaneous  understanding of the parties as to the state of the negotiations" as a "factor[ ] to be considered in deciding whether an  impasse in bargaining existed."  Taft Broad. Co., 163  N.L.R.B. at 478.  "If either negotiating party remains willing  to move further toward an agreement, an impasse cannot  exist:  the parties' perception regarding the progress of the  negotiations is of central importance to the Board's impasse  inquiry."  Teamsters Local 639, 924 F.2d at 1084.  A "contemporaneous understanding" as to impasse does not, however, require the parties to reach mutual agreement "as to the  state of the negotiations";  rather, each party must independently, and in good faith, believe that it is "at the end of rope."  PRC Recording Co., 280 N.L.R.B. at 635.  An application of this Taft criterion, which the Board emphasized,  reinforces, rather than negates, the existence of an impasse,  because nothing in the record indicates that the Company had  not bargained to its fullest capacity.  Furthermore, the Union's "conduct" on which the Board relies--the Union's selfserving statement on August 29 that the parties were not at  impasse and the Union's vacuous request on August 31 for  additional meetings--is insufficient to demonstrate the Union's desire to pursue further negotiations.


20
Absent conduct demonstrating a willingness to compromise  further, a bald statement of disagreement by one party to the  negotiations is insufficient to defeat an impasse.  A contrary  result would render the "contemporaneous understanding"  Taft factor meaningless.  Similarly, a vague request by one  party for additional meetings, if unaccompanied by an indication of the areas in which that party foresees future concessions, is equally insufficient to defeat an impasse where the  other party has clearly announced that its position is final. Indeed, as the court noted in addressing the breaking of an  impasse, "[t]he Board itself has indicated that a party's 'bare  assertions of flexibility on open issues and its generalized  promises of new proposals [do not clearly establish] any  change, much less a substantial change' in that party's negotiation position."  Serramonte, 86 F.3d at 233 (quoting Civic  Motor Inns, 300 N.L.R.B. 774, 776 (1990)).  Even if in the  pre-impasse context the Union does not have to offer "a  substantial change" in its position, the Union's immediate and  definitive rejection of the Company's Final Offer suggests  circumstances not unlike those relied upon by the Board in  Seattle-First National Bank in concluding that the contemporaneous understanding of the parties supported a finding of  impasse.  See Seattle-First Nat'l Bank, 267 N.L.R.B. at 89899.  In addition, the Union declined to submit the Final Offer  to a vote of the unit employees.  See Cotter & Co., 331  N.L.R.B. No. 94, slip op. at 9.  Furthermore, although on  notice as a result of the Company's earlier signal about the  language it would use to identify its final offer, the Union at  no time indicated that it was ready to move on any issue that  the parties had discussed.  Rather, the parties remained far  apart on the issues of exceptional importance--wages, healthcare, holidays, and work week.  See Taft Broad. Co., 163  N.L.R.B. at 478. Under the circumstances, the record evidence points to no conduct indicating the Union's belief that  further negotiations would be fruitful.  Cf. Serramonte, 86  F.3d at 233.


21
The Board distinguished NLRB v. H & H Pretzel Co., 831  F.2d 650 (6th Cir. 1987), on the ground that both the Company and the Union had indicated flexibility in the last two days  of negotiations and thus were not "similarly committed to  maintaining plainly irreconcilable positions."  Cotter & Co.  331 N.L.R.B. No. 94, slip op. at 2.  In H & H Pretzel, the  employer had made clear to the union that it had to achieve  substantial labor cost savings in order to survive.  After three  bargaining sessions, however, the union continued to insist on  wage increases.  See 831 F.2d at 652, 656.  Notwithstanding the brief period of negotiations, the Sixth Circuit affirmed the  Board's finding that "the union's expressed willingness to  continue talks was a mere token offer" made simply to delay  the inevitable imposition of wage reductions.  Id. at 656-57. This characterization of the union's efforts was reinforced by  the fact that "the union was on notice, prior to the last  negotiation session, of the company's commitment to cutting  labor costs [to address its financial concerns]."  Id.


22
In distinguishing H&H Pretzel, the Board ignored two  marked similarities between the two cases.  First, as in H&H  Pretzel, the Company from the outset put the Union on notice  that it sought to address significant concerns about competitiveness and productivity by substantially modifying the parties' bargaining agreement.  See supra note 2.  To this end,  the negotiations period was lengthier than usual.  As in H&H  Pretzel, although the parties demonstrated flexibility in bargaining, they remained far apart on significant issues.  See  H&H Pretzel, 831 F.2d at 656-57.  Second, as in H&H  Pretzel, "while the [U]nion sought to continue talks, it did not  offer a new proposal or indicate a willingness to compromise  further on any specific issue."  Id. at 656.  Although bargaining proposals were exchanged, the Union resisted movement  in the Company's direction.  On the eighth day of negotiations, for example, the Union was continuing to ask for twice  the wage increases that the Company was offering, despite  the Company's position that employee inefficiencies did not  warrant such increases.  See supra note 2.  Unlike H&H  Pretzel, the Union refused even to submit the Company's  Final Offer to the unit employees for a vote.  See 831 F.2d at  652.


23
In view of this record evidence, the Board's focus on the  abruptness of the Company's Final Offer, on the Union's  surprise upon receiving it, and on possible future concessions  by both parties misses the mark.  See Cotter & Co., 331  N.L.R.B. No. 94, slip op. at 1-2;  see also Serramonte, 86 F.3d  at 233.  The bargaining positions of the parties, as expressed  by their experienced negotiators, indicate that the parties  were at impasse.11

III.

24
The Company also challenges the Board's findings on employee discipline and the processing of grievances, and the  Board's remedial order.  Regarding the implementation of  new work rules, the Company contends that the Union waived  its right to bargain on work rules when it conceded that, in  accord with the expired Agreement, the Company had the  authority to implement new rules, and that the Union's sole  remedy was to initiate grievance proceedings.12  See NLRB v.  United States Postal Service, 8 F.3d 832, 836-37 (D.C. Cir.  1993);  Haddon Craftsman, 300 N.L.R.B. 789, 790-91 (1990); Jim Walter Res., Inc., 289 N.L.R.B. 1441, 1442 (1988).  Thus,  the Company contends, because the work rules allowed it to  determine the appropriate disciplinary measures for any violation, it lawfully disciplined employees Gonzalez, Martin, and  Csongedi.  Although both parties raised before the Board the  issue of waiver concerning the implementation of new work  rules, the Board failed to address this argument in its decision.  Instead, the Board focused on its finding of no impasse  and summarily concluded that the absence of an impasse  rendered unlawful the Company's modification of work rules  and any consequent employee disciplinary action.  See Cotter  & Co., 331 N.L.R.B. No. 94, slip op. at 2-4.  It follows from  our holding on impasse that the Company lawfully implemented its Final Offer, including the amended work rules  that led to the discipline of the employees. See Katz, 369  U.S. at 742-43;  Taft Broad. Co., 163 N.L.R.B. at 478.  Therefore, we grant the petition as to the work rules and subsequent disciplinary actions.


25
Regarding the grievance procedure, the Company concedes  that it abandoned the formal procedure established by the  Agreement, but maintains that its obligation to process grievances, see Hilton's Envt'l, Inc., 320 N.L.R.B. 437, 454 (1995),  was adequately satisfied by "the Company's willingness to  discuss grievances at the highest levels rather than rote  processing at each lower grievance step."  Further, the Company maintains that a grievance form signed by the Union is  evidence that the Company did not bypass the Union in  settling a grievance with one employee.  These contentions  are meritless.  The Board's finding that the Company acted  unlawfully in refusing to process grievances is supported by  substantial evidence.  Despite the Company's position that its  new approach was superior, the Company was not free to  replace unilaterally the contractual grievance procedure.  See  NLRB v. United Nuclear Corp., 381 F.2d 972, 977-78 (10th  Cir. 1967);  Hilton's Envt'l, Inc., 320 N.L.R.B. at 454.  Furthermore, substantial evidence supports the Board's finding  that the Company's direct dealings with an employee violated   8(a)(1) and (5) of the Act.  See Medo Photo Supply Corp. v.  NLRB, 321 U.S. 678, 684 (1944);  Toledo Typographical Union No. 63 v. NLRB, 907 F.2d 1220, 1222 (D.C. Cir. 1990). That the Union signed the grievance form in question indicates the Union's involvement in the filing of the grievance,  not the Union's participation in the resolution of the grievance.  The Company's alternative contention for upholding its  unilaterally imposed grievance procedure, "no harm, no foul,"  was not presented to the Board, and hence is not properly  before the court.  See 29 U.S.C.  160(e);  Woelke & Romero  Framing, Inc. v. NLRB, 456 U.S. 645, 665-66 (1982);  Alwin  Mfg. Co., Inc. v. NLRB, 192 F.3d 133, 143 (D.C. Cir. 1999).


26
Finally, the Company maintains that the Board's remedial order appears to be "penal" or "Confiscatory" because by requiring a return to the status quo ante it would require the Company to make contributions on behalf of all employees to the Teamsters Fund, despite the Final Offer's inclusion of the Company's health plan as an option for employees.12 See Carpenter Sprinkler Corp. V. NLRB, 605 F.2d 60, 67 (2d Cir.1979). Because a number of employees have selected the Company's health plan, the Company Contends that a mandatory contribution to the Teamsters Fund "would not serve the remedial purposes of the Act, would be a windfall for the Fund, and would be a penalty on the Company which has already paid any health care claims for these individuals." Consequently, the Company seeks modification of the Board's order either to eliminate the requirement for payment of contributions to the Teamsters Fund for employees who have disclaimed interest in that Fund or at least to allow for a proper set-off. We remand this issue for consideration by theBoard. See Grondorf, Field, Black & Co. v. NLRB, 107 F.3d 882, 888 (D.C. Cir. 1997); Manhattan Eye, Ear & Throat Hospital v. NLRB, 942 F.2d 151, 160 (2d Cir. 1991).


27
Accordingly, we grant the petition in part, deny the petition in part and remand in part.



Notes:


1
  The warehouse unit includes order fillers, stock employees,  shippers, receivers, certain maintenance positions, and a janitor.


2
  According to testimony before the Administrative Law Judge,  the Company anticipated that negotiations would be particularly  difficult because the Company sought significant changes to address  its concerns with efficiency and productivity;  consequently, the  Company asked to commence negotiations earlier than usual.  The  Company believed that it needed to expand the work week (thereby  minimizing overtime) and to change the holiday schedule in order to  respond to its members' demands for faster turnaround on orders. This was necessary because the Company's members, if dissatisfied,  could buy products from another supplier.  The Company also  expressed concern about rising health care costs and sought to  make its own health care program available.  Prior to the commencement of negotiations, the Company set a "bottom line" for  wage increases, opposing a large pay increase in part because of  employees' sub-standard performance.


3
  The negotiations took place over a six week period, on July 20  and 21 and August 2, 3, 4, 23, 28, and 29.


4
  The record does not indicate that the Union representative  notified the Company of the areas in which the Union was willing to  grant further concessions.


5
  The Union filed a second unfair labor practice charge on  March 21, 1996.  After the Board consolidated the Union's unfair  labor practice charges, the Union filed an amended charge on April  3, 1996.  A consolidated complaint was filed on May 30, 1996.


6
  The four employees were Matthew Dillon, Alejandro Gonzalez, Richard Martin, and Adam Csongedi.  Dillon received a verbal  warning on October 3, 1995, a written warning on November 2,  1995, and a one-week suspension on November 7, 1995, for refusing  to work scheduled overtime pursuant to amended Work Rule 5. See infra note 11.  After he filed a grievance over the suspension,  the Company informed Dillon, without the participation of the  Union, that the suspension was a mistake and paid him for the time  that he had lost.  Dillon was subsquently fired for violating the  Company's no-fault attendance policy;  the ALJ found that this  discharge was not improper.  See Cotter & Co., 331 N.L.R.B. No.  94, slip op. at 11.  Gonzalez, who was found to have violated  amended Work Rule 5, received a verbal warning on October 10,  1995, a third-step suspension on January 2, 1996, and was discharged for subsequent work rule violations on January 12, 1996. Martin received a verbal warning in September 1995, and a written  warning in November 1995, for failing to work scheduled overtime  in violation of amended Work Rule 5.  In December 1995, Martin  was suspended for being out of his work area pursuant to a preimpasse portion of Work Rule 5, and was discharged on February  20, 1996, for again being out of his work area.  Csongedi was  suspended on March 29, 1996, for violating a quality standard under  the expiring agreement;  the prior verbal and written warnings that  formed the basis of the suspension, however, were issued pursuant  to post-impasse quality standards.


7
  The Board also affirmed the ALJ's finding that the Company's discipline of two employees (Gonzalez and Csongedi) was  unlawful because "the [Company's] unlawfully imposed [work] rules  were a factor" in those disciplinary actions.  Cotter & Co., 331  N.L.R.B. No. 94, slip op. at 3.  The Board reversed the ALJ's  conclusion that the Company violated  8(a)(5) and (1) by refusing  to deduct Union dues after expiration of the existing bargaining  agreement.  See id., at 4.


8
  An impasse does not "permanently relieve[ ] [the parties] of  the duty to deal with each other."  NLRB v. McClatchy Newspapers, 964 F.2d 1153, 1164 (D.C. Cir. 1992).  As the court observed in  McClatchy Newspapers, an "impasse is only a temporary deadlock  or hiatus in negotiations, 'which in almost all cases is eventually  broken, through either a change of mind or the application of  economic force.' "  Id. at 1165 (quoting Charles D. Bonanno Linen  Serv., Inc. v. NLRB, 454 U.S. 404 (1982) (internal citation omitted)); see also Serramonte Oldsmobile, Inc. v. NLRB, 86 F.3d 227, 232  (D.C. Cir. 1996).


9
  On appeal, the Board does not rely on the ALJ's findings,  which the Company challenges, that the Company (1) rejected "outof-hand" "virtually all of the Union's proposals" during the first six  days of bargaining, (2) proposed language changes that were "radical departures" from the expiring agreement, (3) did not make an  economic proposal until the penultimate bargaining session, and (4)  did not give the Union information about its work week proposal  until later in negotiations.  See id. at 10.


10
  Neither the Board nor the ALJ found that the Company  negotiated in bad faith.  See Cotter & Co., 331 N.L.R.B. No. 94, slip  op. at 1-2, 7-9.


11
  Under the expiring agreement, the Company had the right to  implement work rules and quality and productivity standards unilaterally;  the Union, in turn, had the right to grieve the reasonableness of the rules through an established grievance and arbitration  procedure.  On September 22 (after implementing its Final Offer),  the Company amended its Work Rule 5 to classify a failure to work  overtime as a work rule violation, subject to immediate discipline  under the Company's progressive disciplinary system.


12
  The Board's remedial order required the Company, in relevant part, to (1) cease and desist from specified unfair labor practices; (2) bargain in good faith with the Union; (3) rescind all unilaterally implemented terms and conditions of employment upon the Union's request; (4) cancel and rescind discipline issued pursuant to the new rules; and (5) make whole those employees who lost wages as a result of the unlawful discipline, and offer reinstatement to unlawfully discharged employees. See Cotter & Co., 331 N.L.R.B. No. 94, slip op. at 5, 19-20; see also 29 U.S.C.  160(c).


