NATIONAL LABOR RELATIONS BOARD

319 N.L.R.B. 1253; 1995 NLRB LEXIS 1229; 151 L.R.R.M. 1033; 1997 NLRB Dec. (CCH) 16326; 319 NLRB No. 150

December 18, 1995; As Corrected April 9, 1996

[*1]

DECISION AND ORDER

By William B. Gould IV, Chairman; Margaret A. Browning, Member; John C. Truesdale, Member

OPINION: On September 1, 1992, Administrative Law Judge Nancy M. Sherman issued the attached decision. The Respondent filed exceptions and a supporting brief, to which the General Counsel filed an answering brief. The General Counsel filed cross-exceptions and a supporting brief; the Charging Parties filed a cross-exception and a brief in support of its cross-exception, and in opposition to the Respondent's exceptions. The Respondent filed a consolidated answer and reply brief to the briefs and cross-exceptions of the General Counsel and the Charging Parties. The General Counsel and the Charging Parties filed reply briefs to the Respondent's consolidated answer and reply brief. The Industrial Union Department of the American Federation of Labor and Congress of Industrial Organizations filed a brief as amicus curiae in support of the General Counsel's cross-exception number [*3] one. The Respondent filed an answer brief in response to the amicus brief.

The National Labor Relations Board has delegated its authority in this proceeding to a three-member panel.

The Board has considered the decision and the record in light of the exceptions, cross-exceptions, and briefs and has decided to affirm the judge's rulings, findings, n1 and conclusions for the reasons explained below and to adopt the recommended Order as restated and set forth in full below.

n1 The Respondent has excepted to some of the judge's credibility findings. The Board's established policy is not to overrule an administrative law judge's credibility resolutions unless the clear preponderance of all the relevant evidence convinces us that they are incorrect. Standard Dry Wall Products, 91 NLRB 544 (1950), enfd. 188 F.2d 362 (3d Cir. 1951). We have carefully examined the record and find no basis for reversing the findings.

The Respondent additionally argues in its exceptions that the judge was biased against the Respondent's position in this case. We have carefully reviewed the record and find no basis for a finding of bias.

I. INTRODUCTION

This case presents an issue of first impression [*4] before the Board: May an employer that has lawfully locked out its bargaining unit employees and has lawfully subcontracted their work on a temporary basis take the further step of subcontracting their work on a permanent basis in order to bring economic pressure to bear in support of its bargaining position in contract negotiations? We find that such conduct is unlawful under Section 8(a)(3) of the National Labor Relations Act because it is inherently destructive of employees' Section 7 rights and because the asserted business justification does not outweigh the harm to those rights.

We additionally find that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally implementing its proposal to subcontract permanently bargaining unit work and by failing to supply to the Unions herein requested information relevant to the parties' collective-bargaining negotiations. We further find that a backpay remedy is appropriate for all the locked-out bargaining unit employees during the period that the Respondent permanently subcontracted bargaining unit work. n2

n2 The judge also found that by its conduct the Respondent violated Sec. 8(a)(5), (3), and (1) of the Act, and that a backpay remedy was appropriate for all the locked-out unit employees during the period that the Respondent permanently subcontracted bargaining unit work. While we make these findings as well, we do so only for the reasons stated below, and we adopt the judge's rationale only to the extent consistent with this Decision and Order. [*5]

As set forth in full below, after negotiations for a new collective-bargaining agreement proved unsuccessful, the Respondent locked out the bargaining unit production and maintenance employees and continued operations with temporary workers provided by a nonunion firm under a temporary subcontracting arrangement. Thereafter, the Respondent made a contract proposal under which it would be permitted to subcontract permanently bargaining unit maintenance work; the Unions requested information regarding that proposal. The Respondent subsequently unilaterally implemented its proposal and entered into a permanent subcontract for the performance of bargaining unit maintenance work. The permanent subcontract was effective for approximately nine months and was thereafter voluntarily rescinded by the Respondent. During the entire 9-month period during which the permanent subcontract was effective, the bargaining unit employees remained locked out and the parties unsuccessfully sought to negotiate a new collective-bargaining agreement. Following the rescission of the permanent subcontract, the parties continued to bargain and approximately 5 months later reached agreement on the terms of a [*6] new collective-bargaining agreement, at which time the lockout was ended and all bargaining unit employees returned to work.

Accordingly, the issues in this case addressed below are:

(1) Did the Respondent violate Section 8(a)(5) and (1) of the Act by failing to supply information requested by the Unions?

(2) Did the Respondent violate Section 8(a)(3) and (1) of the Act by permanently subcontracting bargaining unit maintenance work at a time when the bargaining unit production and maintenance employees were lawfully locked out by the Respondent? n3

n3 The lockout itself is not alleged to be unlawful in this proceeding.

(3) Did the Respondent violate Section 8(a)(5) and (1) of the Act by unilaterally implementing its proposal regarding the permanent subcontracting of bargaining unit work?

(4) Is a backpay remedy appropriate for the bargaining unit production and maintenance employees for the period during which the Respondent permanently subcontracted bargaining unit maintenance work?

II. FACTUAL BACKGROUND n4

n4 The labor dispute at issue in this proceeding lasted over 1-1/2 years. The factual background of this proceeding is accordingly voluminous and is set forth in full detail in the judge's decision. The relevant facts are set forth herein. [*7]

The Respondent, which is engaged in the manufacture, sale, and distribution of paper-related products, operates over 100 production facilities throughout the United States. The United Paperworkers International Union is party to approximately 80 collective-bargaining agreements with the Respondent, representing approximately 28,000 employees of the Respondent.

The labor dispute at issue in this case arose at the Respondent's primary paper mill in Mobile, Alabama. The production and maintenance employees at the Mobile mill have been jointly represented for over 40 years by the United Paperworkers International Union and its Locals 265, 337, 1940, 2650 (the Paperworkers) and the International Brotherhood of Electrical Workers and its Local Union 1315 (the IBEW). n5 The Unions and the Respondent were parties to successive collective-bargaining agreements at the Mobile mill, including an agreement that expired on January 31, 1987. That agreement provided for premium pay for Sunday work, and contained a provision that valued every hour worked on a Sunday as one and one-half hours for purposes of calculating weekly employee overtime pay.

n5 The Paperworkers and the IBEW, as joint representatives of the bargaining unit employees, will be collectively referred to as the "Unions," unless individually denominated. [*8]

Premium pay for Sunday work had been the longstanding norm in the U.S. paper industry. Beginning in the mid-1980's, the Respondent and other paper companies sought to eliminate premium pay for Sunday work at many of their locations. By January 1987, at which time negotiations commenced for a new collective-bargaining agreement at the Mobile mill, the Respondent had eliminated Sunday premium pay in 37 of its collective-bargaining agreements with the United Paperworkers International Union (UPIU).

A. The Respondent Proposes Elimination of Premium Pay for Sunday Work at the Mobile Mill

On January 19, 1987, the parties held their first negotiating session for a new collective-bargaining agreement at the Mobile mill to succeed the agreement set to expire on January 31, 1987. The Respondent's bargaining proposals included, inter alia, the elimination of premium pay for Sunday work and holiday work and no weighted valuation for Sunday or holiday work when calculating employee overtime. The parties met frequently but made little progress in reaching an agreement. On February 10, 1987, the Respondent notified the Unions that, pursuant to the provisions of the expiring collective-bargaining [*9] agreement, it was terminating that agreement effective February 21, 1987.

On February 11, 1987, the parties met and the Unions requested that the Respondent abandon its proposal to eliminate premium pay for Sunday work. The Respondent declined and asserted its need to reduce costs in order to remain competitive. At a negotiating session held shortly thereafter, the Respondent rejected the Unions' proposal to accept the elimination of premium pay for Sunday work in exchange for a seven and one-half percent employee wage increase.

On February 20, 1987, the Respondent gave the Unions its "best and final" offer. This offer included the Respondent's prior proposals to eliminate premium pay for Sunday and holiday work, and to give lower wage increases than those proposed by the Union. The Respondent additionally declared its intention to lock out bargaining unit employees if the Respondent's offer was not accepted. The Unions' membership rejected the Respondent's proposal.

The Respondent thereafter made a contract offer on March 2, 1987, which was substantially similar to its prior offer of February 20, 1987. The Respondent advised the Unions that it planned to implement its March 2, [*10] 1987 offer if the Unions rejected that offer. The Unions' membership rejected the proposal, and the Unions advised the Respondent that the contract was rejected because of the elimination of Sunday and holiday premium pay. On March 7, 1987, the Respondent unilaterally implemented its March 2, 1987, contract proposal. n6

n6 The implementation of the March 2, 1987 offer is not alleged to be unlawful.

B. The Respondent Locks Out Its Employees and Continues Operations with Temporary Workers

By letter dated March 12, 1987, the Respondent notified the Unions that it would "temporarily replace" the bargaining unit production and maintenance employees if a new contract was not reached by March 21, 1987. On March 21, 1987, the Respondent locked out the approximately 915 production employees and approximately 285 maintenance employees represented by the Unions. The Respondent's officials testified that they commenced the lockout in order to pressure the Unions to agree to a contract and to avoid a coordinated strike by the UPIU at several of the Respondent's locations.

Following the commencement of the lockout, the Respondent continued to operate the Mobile mill with workers supplied [*11] by BE&K Construction Company (BEK), a non-union firm. n7 The Respondent had previously entered into contracts with BEK to supply workers on a temporary basis during work stoppages at several of the Respondent's other production facilities. In October 1986, BEK submitted at the Respondent's request a proposal to provide such services on a temporary basis in the event of a work stoppage at the Mobile mill. In January or February 1987, the Respondent paid to BEK a $ 25,000 pre-mobilization fee set forth in the proposal. Approximately ten days prior to the commencement of the lockout, BEK personnel entered the Mobile facility and began preparations to assume the duties regularly performed by the bargaining unit production and maintenance employees. Following the commencement of the lockout, BEK personnel were required to live in a so-called "man-camp" which the Respondent set up on the premises of the Mobile mill, as it was required to do under the temporary subcontract. Sometime after March 21, 1987, the Respondent and BEK executed their subcontract for BEK to perform production and maintenance functions on a temporary basis during the course of the lockout. n8

n7 The Respondent also used, inter alia, supervisors, loaned personnel from the Respondent's other facilities, and employees of other contractors. One such contractor was Instrument Control Services, Inc. (ICS), which performed the maintenance of certain computer equipment in the Mobile mill. [*12]

n8 The Respondent's use of temporary subcontract personnel is not alleged to be unlawful.

C. The Respondent Proposes to Permanently Subcontract Bargaining Unit Maintenance Work

The first negotiating session following the lockout occurred on May 8, 1987. The Respondent stated that during the lockout it had observed from its use of BEK temporary subcontract personnel that it could operate the Mobile mill efficiently with an employee complement smaller than the bargaining unit. The Respondent accordingly informed the Unions that it had requested contractors to submit proposals to subcontract maintenance on a permanent basis.

At the parties' negotiating session on May 21, 1987, the Respondent stated that the prime issue between the parties was still premium pay and that the parties were deadlocked as to that issue. n9 The Unions remarked that they would not make concessions on premium pay or the subcontracting of jobs. The Respondent advised the Unions that its experience with contract maintenance with BEK was outstanding. The Respondent explained that it had favorably reviewed proposals to subcontract bargaining unit maintenance work on a permanent basis, and accordingly [*13] proposed the following contract language denominated as item 11:

Notwithstanding any provision of this labor agreement, "A Report To Our Employees," past practice, grievance answers, or any other consideration, the company may, at its option, contract out any or all mill maintenance work on a temporary or permanent basis.

n9 Throughout the duration of the labor dispute, the parties frequently expressed in public pronouncements and to each other that they would never compromise on the issue of premium pay. Thus, in April 1987, the Unions declared that they were at war with the Respondent over the issue of premium pay. The Unions expressed their opposition to concessionary bargaining in a multifaceted corporate campaign against the Respondent which included, inter alia, appeals to public officials, notification to Respondent's customers of the labor dispute, and various press conferences and press releases. The Respondent likewise frequently expressed its adamant position on eliminating premium pay and frequently stated its position in the labor dispute in newspaper advertisements and public pronouncements. The elimination of premium pay was also a central issue in bargaining negotiations between the Respondent and the UPIU at many of the Respondent's facilities nationwide. [*14]

The Respondent did not at this time incorporate item 11 into its bargaining proposals but merely introduced the proposal into negotiations.

Shortly following the Respondent's introduction of item 11, the Unions made the following request for information at the negotiating session:

The Union requests the company to provide it with the following information: Any and all documents, including without limitation, contracts, reports, schedules, studies, books, records, prints, charts, evaluations, ledgers, expense vouchers, checks, drafts, recommendations of any kind, measurements, graphs, time studies, papers, recordings, photographs or writings of any kind, relating to or concerning the Mobile Mill, and which supports, justifies or tends to provide the basis for company proposals 9, 10, and 11. n10

n10 At the May 8, 1987 negotiating session, the Respondent had proposed item 9, which called for the reduction of 34 unit production and maintenance jobs by, inter alia, eliminating the "beater room" and reducing the manning of the "extruder," and item 10, which called for permission to subcontract certain computer work previously performed by bargaining unit maintenance employees. There is no contention that the Respondent unlawfully failed to provide information with respect to item 9. Item 10 was eventually subsumed within item 11, the permanent subcontracting proposal. [*15]

On May 21, 1987, the Unions filed an unfair labor practice charge against the Respondent, alleging in essence that the Respondent's introduction into negotiations of its permanent subcontracting proposal--after it had implemented its best and final offer some 2 months earlier--was unlawful. This charge was dismissed by the Board's Regional Office on July 7, 1987, and the Unions' appeal of the dismissal was denied on September 30, 1987.

D. The Paperworkers Announce Their Pooled Voting Procedure

Additionally at the May 21, 1987 negotiating session, the Paperworkers announced to the Respondent their pooled voting procedure. This procedure had been formulated by the Paperworkers representing the bargaining unit at the Mobile mill along with the UPIU locals representing employees at the Respondent's locations in DePere, Wisconsin; Jay, Maine; and Lock Haven, Pennsylvania, which locations were also engaged in contract negotiations. UPIU officials testified that the pooled voting procedure operated as follows: each of the four locations would vote on contracts negotiated at their respective locations; the votes would be sent to UPIU headquarters and pooled; the votes would not [*16] be tallied until all four locations had voted; and if a majority of the pooled votes approved the contracts, the individual locals would then be free to ratify their contracts. This pooled voting procedure was agreed to, and advocated by, UPIU president Wayne Glenn, who stated in a UPIU publication that "by sticking together and coordinating our efforts, we can defeat [the Respondent's concessionary] demands." n11 The UPIU thereafter sent a letter to its various locals, including those at the Mobile mill, stating that Glenn would refuse to sign any contract with the Respondent "unless they resolved all the issues on givebacks."

n11 The IBEW was not a participant in the pooled voting procedure.

The Respondent repeatedly questioned the Unions regarding the operation of the pooled voting procedure at the May 21 and May 22, 1987, negotiating sessions. At the latter session, the Respondent also requested clarification as to the Unions' request for information.

E. The Respondent Seeks to Reduce Its Costs Under the Temporary Subcontract with BEK

Shortly after the commencement of the performance by BEK of the maintenance work at the Mobile mill under the temporary subcontract, [*17] the Respondent contacted BEK in an effort to decrease its costs under the contract. BEK agreed to reduce the "multiplier"--the contractual figure by which BEK's hourly costs were multiplied to determine the Respondent's payment to BEK--on May 18, 1987, and again on June 1, 1987. BEK responded to the Respondent's requests for additional cost reductions by stating that additional reductions could be obtained by executing a permanent subcontract for performance of the maintenance work at the Mobile mill.

Upon the Respondent's request, BEK forwarded to the Respondent on May 8, 1987, a proposed permanent subcontract. In May 1987, the Respondent assembled an in-house team to analyze BEK's proposal and they completed a cost analysis of the proposal. The judge found that the cost study was comprised of 11 pages and was completed by May 23, 1987. The cost study led the Respondent to the conclusion that it could achieve substantial savings by permanently subcontracting the bargaining unit maintenance work to BEK--due to reduced manning levels projected under the permanent subcontract--rather than by performing that maintenance work with the Respondent's bargaining unit employees.

F. The [*18] Bargaining Sessions Leading up to the Respondent's Implementation of Its Permanent Subcontracting Proposal on August 11, 1987 n12

n12 The Respondent contends that the Unions refused to bargain over the permanent subcontracting proposal at the negotiating sessions leading up to the Respondent's implementation of that proposal. The parties' conduct at these sessions is accordingly set forth in some detail in order to fully consider the Respondent's contention.

1. The May 27, 1987 bargaining session

At this bargaining session, the Respondent gave the Unions, in response to their information request, a copy of BEK's proposed permanent subcontract for the performance of the bargaining unit maintenance work, as well as pages 1 through 6 of the Respondent's cost study of that proposal. The Unions briefly reviewed these documents and stated that the Respondent had not satisfied the Unions' information request. The Respondent stated to the Unions, as it did repeatedly throughout the negotiations, that the Respondent had provided the Unions with all the documentation that it possessed. n13

n13 The complaint alleges that the Respondent unlawfully failed to provide to the Unions, pursuant to their information request, the following documents: (1) pages 7, 8, and 11 of the cost study; (2) the temporary subcontract between the Respondent and BEK; (3) a memorandum dated May 27, 1987, memorializing BEK's agreement to reduce the multiplier under the temporary subcontract; (4) a memorandum dated July 17, 1987, from BEK to the Respondent regarding manpower reductions requested by the Respondent during the temporary subcontract; and (5) documents relating to the subcontracting of computer maintenance work to ICS. [*19]

The Unions stated their belief that the Respondent did not have the right to change its bargaining position--after implementing its best and final offer on March 2, 1987--by introducing its proposal regarding permanent subcontracting. This was the position advanced by the Unions in their unfair labor practice charge filed on May 21, 1987. The Unions added, however, that "we won't be rude, you can say anything you want to say and we'll listen, provided you are willing to negotiate on [the elimination of premium pay.]"

The Respondent expressed its belief that it lawfully introduced the permanent subcontracting proposal. The Unions responded, "[We] don't agree that you can add items and we're not interested in anything you have to say[,]" and that they were still waiting for the Respondent to satisfy their request for information.

Both the Unions and the Respondent stated that they would bargain as to the issue of premium pay, and the Unions reiterated their earlier proposal suggesting a seven percent employee pay raise in exchange for the elimination of premium pay. The Respondent rejected this as too costly.

The Respondent queried whether the Unions were ready to discuss the permanent [*20] subcontracting proposal, to which the Unions responded by asking whether the Respondent was willing to change its position on premium pay. The following exchange then took place, as paraphrased by the judge: Respondent: [Are you] refusing to meet and bargain unless Respondent changed its position on items 1, 2, and 3 [premium pay] . . . .

Unions: [We are] not refusing to meet, and were prepared to bargain 'on all items'. . . . When Respondent was willing to change its position on items 1, 2, and 3, "we'll be ready to sit down and talk about the other items."

2. The June 11, 1987 Bargaining Session

The Respondent stated at this bargaining session that it was unwilling to change its position on premium pay and inquired of the Unions' position regarding the permanent subcontracting proposal. The Unions responded that because of their unfair labor practice charges pending before the Board, "we will listen to anything you have to say, but we will not agree to [the permanent subcontracting proposal]." The Unions added: "We are willing to listen to anything you have to say, but we have charges with the NLRB. We are here to bargain on your original eight items... and you have no [*21] changes on [premium pay]. We are demanding that you negotiate and change your position on [premium pay]." The Respondent asked whether the Unions' intention was not to meet until their unfair labor practice charges were ruled on. The Unions replied that they had not said that, and that "we are demanding" that Respondent change its position on premium pay. The Respondent again inquired as to the Unions' intention regarding the Respondent's subcontracting proposal, and the Unions responded, "[We] told you we'd listen, but we are not going to agree on [the permanent subcontracting proposal]."

3. The July 16, 1987 bargaining session

On July 7, 1987, the Board's Regional Office dismissed the Unions' charges that the Respondent had unlawfully introduced the permanent subcontracting proposal. The Respondent accordingly announced at the July 16, 1987 bargaining session that since those charges had been dismissed, the Respondent was making the permanent subcontracting proposal part of its voting package. The Respondent stated its intent to subcontract maintenance work, as well as its view that the Unions had been refusing to discuss the permanent subcontracting proposal on the ground that [*22] they were awaiting the disposition of the charges filed with the NLRB.

The Respondent stated that "it is our intent to contract maintenance. You need to believe that. We are as serious as a breath of air. We implore you to bargain about the impact and effect of item 11 [permanent subcontracting]." The Unions replied that it was "ridiculous" to think that the Unions were going to agree that the Respondent could contract maintenance, and added, "Do you think that we are going to give up 280 jobs? We want to stay alive. You're going to get us killed." The Respondent reiterated that its intent was to contract maintenance. The Unions stated that the question of whether the Unions were willing to agree to contract maintenance was the "silliest question a grown man could ask," and that "we wouldn't agree to give up our jobs." The Respondent replied by repeating its intent to contract out maintenance.

The following exchange also took place between the parties as paraphrased by the judge in sec. II, J, of her decision:

UPIU vice president Langham said that the Unions had appealed the dismissal of the charges, and that until that appeal had been disposed of, the Unions were taking the [*23] position that items 1, 2, and 3 were the major issues between the parties. [Respondent's negotiator] Vandillon said that Respondent was unwilling to wait on the appeals, that it had a right to bargain on item 11, that this issue was important to both parties, and that as to item 11 the parties were deadlocked if the Unions were not going to bargain about it that day. Langham said that the Unions felt that they still had the right to wait on the appeal of the dismissal of the NLRB charges; that until the decision on the appeal, the Unions took the position that items 1, 2, and 3 were the major items standing between the parties; that the Unions did not "agree unilaterally that [Respondent had] the right to add to [Respondent's] original proposal;" but that the Unions would "have to listen" to what Respondent had to say. Vandillon asked whether this meant that the Unions were not going to address the subcontracting issue. Langham denied saying that the Unions would not negotiate, and said that Vandillon was "putting words in [Langham's] mouth." He further said that he was not saying the parties were deadlocked on item 11, and that the NLRB had not ruled that Respondent had the legal [*24] right to put it on the table. [footnotes omitted]

By letter dated July 28, 1987, the Respondent notified the Unions that it intended on August 10, 1987, to sign a subcontract with BEK to perform bargaining unit maintenance work on a permanent basis. On August 11, 1987, the Respondent executed the permanent subcontract with BEK. The Respondent's officials testified that they executed the permanent subcontract to save money with respect to the performance of maintenance work during the lockout.

G. The Course of Negotiations from the Respondent's Execution of the Permanent Subcontract With BEK on August 11, 1987, Until the Respondent's Rescission of the Permanent Subcontract on May 3, 1988

The parties' next bargaining session occurred on August 24, 1987. The Unions repeatedly queried the Respondent as to the status of the bargaining unit maintenance employees in light of the permanent subcontract and whether the "maintenance jobs [had] been permanently replaced." In response to the Unions' question whether the maintenance employees would have a job if the parties' reached a settlement regarding the permanent subcontracting proposal, the Respondent replied, "No, not under the [*25] contract [with BEK]." The Unions continued to express concern about the fate of the maintenance employees. Local 2650 President Funk stated, "How in the hell do you ever expect to get an agreement out of this now?"

On August 28, 1987, the Respondent placed on its telephone information line to employees the message that because about 280 hourly employees were involved in maintenance work in the mill, about that number of jobs would be eliminated as a result of the Respondent's contract with BEK. The Respondent further advised employees that "under the terms of the expired labor agreement, maintenance employees could use their applicable seniority to bump-back into base-rate [production] jobs."

At the October 26, 1987, bargaining session, the Unions commenced the session by stating that they wanted to talk about the relocation of the extruder, how items 9 and 11 had been added, and the contracting of maintenance. The majority of the session, however, involved discussion of the Respondent's expressed concern whether an agreement could be reached since the Mobile mill was linked to the three other locations via the pooled voting arrangement. As discussed below, the Respondent frequently [*26] expressed this concern at the bargaining table, and stated that it needed some assurance that if an agreement was reached at the bargaining table at Mobile it would be executed by the Unions and not be held up awaiting the application of the pooled voting procedures. The Unions replied that they were there to negotiate regarding the Mobile mill, and that if an agreement was reached and the Mobile bargaining unit employees voted to accept it, they would petition UPIU president Glenn to sign the agreement notwithstanding the pooled voting procedure. The Unions typically responded to the Respondent's frequently expressed concern regarding the pooled voting procedure by stating that they would petition to have UPIU President Glenn execute any agreement that was reached at Mobile. n14 At the conclusion of the October 26, 1987 session, the Respondent reviewed several concerns expressed by the Unions, including "what happens to the maintenance people?" The Unions emphasized that that was one issue which needed to be resolved.

n14 At the December 4 and 17, 1987 bargaining sessions, the Unions' negotiators did state that they had full authority to settle an agreement, and that they were not going elsewhere for approval. As noted, however, the Unions usually stated that they would need to petition UPIU President Glenn to sign any agreement that was reached. [*27]

The parties' November 5, 1987 negotiating session involved continued discussion of the pooling issue. The Unions stated:

We have to start [negotiating] somewhere. We can start here in Mobile and it is as good a place as any to start. . . . We know less here of our status than we do at other places. We have to start somewhere before we ever get the pooled voting issue settled. . . . [We] don't know the status of the Mobile mill. And [we] don't know the status of the two hundred and eighty maintenance jobs.

The parties also discussed the possibility of a productivity bonus in lieu of premium pay.

At the December 4, 1987 bargaining session, the Respondent asked for a response regarding its proposal to remove the extruder, and noted that it had no intention of dropping item 11 (permanent subcontracting), but that it was willing to discuss cash payments at the end of the contract if certain productivity and quality goals were achieved. The Unions responded by asking whether they could reach an agreement on putting the bargaining unit maintenance employees back to work at the Mobile mill. The Unions additionally stated that they would change their position on premium pay if [*28] the Respondent would withdraw its permanent subcontracting proposal. The Respondent replied that if the Unions would agree to item 11, the Respondent was willing to discuss cash payments if productivity and quality goals were achieved. The Respondent again stated that it had no intention of dropping items 9 and 11, that it was totally satisfied with BEK's performance, and that it was too costly to perform the maintenance work "in-house."

1. The Respondent's proposed transition agreement

At the December 17, 1987 bargaining session, the Respondent distributed a proposed transition agreement to govern the operation of the Mobile mill immediately following the end of the lockout. The Respondent's negotiators testified that they introduced the transition agreement at that time, even though the labor dispute was not anticipated to be resolved quickly, because the Respondent was aware of how difficult the issue would be of returning unit employees working side by side with BEK employees under the permanent subcontract. The Unions stated that the parties needed a contract before they could reach a transition agreement, and that the Respondent's transition proposal put "the cart before the [*29] horse."

The Respondent stated that under its transition proposal some locked-out maintenance employees with seniority could return to work by bumping into production jobs of less senior employees, that the more junior production employees would be laid-off, and that the failure to recall employees would be a non-grievable matter. n15 The Unions queried whether the BEK employees would remain following the end of the lockout and the Respondent replied affirmatively. The Unions asked how many of the unit employees would be laid off if the contractors stayed in the plant. The Respondent replied that it did not know, but assumed that some of the maintenance employees would come back under the bump-back provisions. The Unions stated that "our position is and always has been that all of them [the bargaining unit employees] will have to come back before item 11 is removed." The Respondent stated that it had no intention of dropping item 11, and if the parties did not reach a transition agreement, then in effect all the maintenance employees would be laid-off. The Unions stated that until item 11 was resolved and dropped, there would never be any harmony at the mill.

n15 The proposed transition agreement also called for, inter alia, a 3-month "no jurisdiction" period in which the Respondent could assign work to employees or contractors as it wished on a nonprecedent setting basis. [*30]

The next bargaining sessions held on December 21, 1987, and January 4 and 29, 1988, principally concerned the Respondent's proposed transition agreement. At the December 21 session, the Unions presented a counterproposal on transition which provided, inter alia, that "all employees who desire to do so will be scheduled to return to work . . . ." The Respondent asked whether it could use contractors under that counterproposal. The Unions replied, "If all the Unions' represented people came back, Respondent could have all the contractors it wanted."

At the January 29, 1988 bargaining session, the Respondent introduced a proposed revised transition agreement which provided, inter alia, for a 75-day transition period in which the Respondent could assign work on non-precedent-setting basis, and again provided that some maintenance employees might not be recalled. The Unions stated that that proposal was acceptable if the transition period was reduced to 14 days and "our folks" were back to work.

At the February 18, 1988 bargaining session, the Respondent replied to written questions the Unions had previously submitted regarding the permanent subcontract with BEK. The first question [*31] was "whether company items 9 and 11 were still a company proposal or was the permanent replacement of unit employees final . . . ." The Respondent replied that items 9 and 11 remain company proposals; that it had not permanently replaced anybody; that it had subcontracted the maintenance work to BEK; and that "it is not our intention to rescind that contract." The Unions nevertheless continued to press whether the maintenance employees had been replaced by BEK employees. The Respondent replied to the Unions' query regarding maintenance employees and severance pay by stating that most maintenance employees had sufficient seniority to remain by bumping into the jobs of less senior employees who "would be subject to layoff or reassignment" and that any maintenance employees who were laid off would have to exercise their severance pay rights and would be terminated. n16

n16 The Unions also asked inter alia, "What has been the cost to the Company to replace the represented employees?"

At the conclusion of the February 18, 1988 session, the Unions stated that they would be agreeable to submitting for a vote the Respondent's offer of March 10, 1987--which did not include the permanent [*32] subcontracting proposal--provided that holiday premium pay remained intact and a profit sharing plan was implemented in lieu of Sunday premium pay. At the March 11, 1988 bargaining session, the Respondent rejected the Unions' proposal because, inter alia, it maintained holiday pay, and did not address elimination of the extruder or the Respondent's "high maintenance costs." In regard to the Unions' suggestion of a profit-sharing plan in return for the elimination of premium pay, the Respondent stated that it had not made such a trade off when it eliminated premium pay at certain other locations.

2. The Respondent's Louisville proposal

Between March 28 and April 15, 1988, representatives of the Respondent and union negotiators representing the Mobile, DePere, Jay, and Lock Haven locations met in Louisville, Kentucky, to formulate a framework for the settlement of the disputes at each of the four locations. n17 The Respondent made a contract proposal for the Mobile mill which provided for, inter alia: (1) the elimination of Sunday and holiday premium pay; (2) senior maintenance employees to apply for early retirement benefits; (3) extra severance pay for those maintenance employees [*33] who resigned by the end of June 1988; and (4) a so-called "total flexibility" proposal allowing up to 200 bargaining unit maintenance employees to return to work but without a commitment to maintain any level of unit maintenance employees in the future and putting no restrictions on the Respondent's use of outside contractors. n18 The Respondent also made contract proposals for the other three locations.

n17 The IPIU had gone on strike at the DePere, Jay, and Lock Haven locations in June 1987. The Respondent permanently replaced the employees at these locations.

n18 The "total flexibility" proposal provided, in pertinent part:

The parties agree that the need to reduce mill maintenance costs is a primary concern . . . . It is not the Company's intent to eliminate mill maintenance crews . . . . [Unit maintenance] employees who elect to remain at the Mobile Mill will return to work . . . up to a maximum of 140 General Mechanics and 60 Instrument-Electricians. If more . . . desire to return to work, junior employees within each group will bump into non-maintenance jobs in accordance with the seniority provisions of the Labor Agreement. It is understood and agreed that these initial staffing levels in no way constitute a commitment of any maintenance manning for the future. It is further understood and agreed that there will be no work jurisdictional restrictions between any classifications in the Mobile Mill . . . . Any employee may be assigned to perform any work which he or she is qualified to safely perform. It is further understood and agreed that there will be no restrictions on the kinds and amounts of work that may be assigned to outside contractors, except that no mill employees will be laid off as a result. Any further reductions in the mill maintenance work force, beyond the initial staffing level, attributable to the provisions contained herein will be handled through normal attrition. [*34]

The Respondent pressed UPIU president Glenn to allow individual votes at each of the four locations; Glenn responded that he would adhere to the pooled voting arrangement. A ratification vote was held at each of the four locations. The votes were thereafter tallied at each location and forwarded to UPIU headquarters, where the votes were pooled and the proposed contracts overwhelmingly rejected.

H. The Respondent Terminates the Permanent Subcontract with BEK and Withdraws Its Permanent Subcontracting Proposal

On May 3, 1988, the Respondent terminated its permanent subcontract with BEK. The judge found that the Respondent did so as a result of being informed that the instant complaint would issue alleging the permanent subcontract to be unlawful. Consequently, the Respondent and BEK entered into a temporary subcontract to perform the maintenance work. The terms of the May 1988 temporary subcontract--including the costs to the Respondent--were essentially identical to those of the preceding permanent subcontract save for the duration of the agreement.

By letter dated May 3, 1988, the Respondent advised the Unions that it had cancelled its permanent subcontract with BEK and was [*35] withdrawing item 11 from the bargaining table. The Respondent further advised the Unions that it was making a contract proposal which provided for, inter alia: (1) the return to work of all bargaining unit maintenance employees; (2) elimination of premium pay for Sunday and holiday work; (3) the "total flexibility" proposal regarding subcontracting contained in the Respondent's Louisville proposal; (4) a 60-day transition period at the end of the lockout; and (5) a 2 percent wage increase for maintenance employees in the third year of the contract.

At the next bargaining session held on May 13, 1988, the Respondent requested that the Unions put its May 3, 1988 proposal to a vote. The Unions declined and observed that the May 3 proposal was a starting point, expressing dissatisfaction with the total flexibility proposal, n19 the length of the transition period, and the elimination of premium pay. The Unions in addition requested backpay for the period of the permanent subcontract for all the locked-out employees, which the Respondent characterized as "ridiculous." The Respondent asked whether Mobile was still part of the voting pool, and the Unions replied, "That's a fair statement." [*36]

n19 The Unions observed that the total flexibility proposal, which had no restriction on the use of contractors, could completely erode the bargaining unit.

I. The Course of Negotiations Until October 1988 When the Lockout Is Ended and a New Contract Is Reached

At the June 24, 1988 bargaining session, the Unions stated that a vote had not been held on the Respondent's May 3, 1988 proposal because it was less advantageous to employees than the Respondent's Louisville proposal of April 13, 1988. The Respondent replied that it had moved with respect to its proposal that no maintenance employees come back. The Unions also stated that "we are a part of the pool and we chose to be part of it, but that does not preclude an agreement here in Mobile." The Unions asked the Respondent--as they did periodically throughout the negotiations--to end the lockout, allow the membership to return to work, and to continue negotiations.

At the July 15, 1988 bargaining session, the parties primarily disputed the length of the transition period, with the Respondent seeking up to 60 days and the Unions proposing 14 days. The Unions further suggested that they were willing to discuss the elimination [*37] of premium pay in exchange for a 401(k) plan, which the Respondent rejected. The Respondent queried whether "the best your side can do is petition Wayne Glenn if we reach a settlement." The Unions replied:

Yes, but it should not be an impediment to reaching an agreement. . . . We need to work out an agreement and then see what we can do about getting a signature. First let's get that worked out, but don't use the pool as a crutch.

The Unions again asked for backpay for the period of the permanent subcontract. The Respondent rejected this, but agreed with the Unions that this could be disposed of by the NLRB and should not impede a settlement. The Unions asked the Respondent to end the lockout, to which the Respondent replied, "As we have said all along, the way for the lockout to end is to ratify the contract and have the International Union execute it."

1. The negotiations regarding the Respondent's mill in Vicksburg, Mississippi

About September 20, 1988, representatives of the Respondent and the UPIU met in negotiations concerning the Respondent's mill in Vicksburg, Mississippi, to address the issue of the elimination of premium pay. The parties agreed that any agreement [*38] as to the issue of premium pay at the Vicksburg location would serve as a pattern for settlements at other locations. The parties at Vicksburg agreed that in at least partial exchange for the elimination of Sunday premium pay, the Respondent would contribute to a 401(k) plan and increase employees' shift differential pay.

UPIU president Glenn asked that the Respondent end the lockout at Mobile and let the unit employees return to work while negotiations continued. The Respondent replied that it was not willing to end the lockout unless the parties had a ratified, executed contract at the Mobile mill. Glenn replied that he was not in a position to authorize the signing of a contract at Mobile as long as strikes at other locations were in progress, and continued his efforts to induce the Respondent to take back permanently replaced strikers at the DePere, Jay, and Lock Haven locations. n20 The Respondent also inquired as to the Unions' position on the Respondent's "total flexibility" subcontracting proposal, and the union representatives responded that the language was too open-ended and would allow the Respondent to eliminate the entire maintenance department over time through attrition. [*39]

n20 As noted above, the UPIU had been on strike at the Depere, Jay, and Lock Haven locations since June 1987.

By the conclusion of this bargaining session regarding the Vicksburg mill, the judge found that the parties "felt reasonably comfortable that they could achieve a contract at Mobile on the basis of the Vicksburg agreement or some variation of it." The Respondent further stated, however, that it would not introduce the Vicksburg compromise at Mobile until it had assurance that if an agreement was reached at Mobile, the contract would be executed by UPIU president Glenn. The Unions referred to their earlier statement that they were not in a position to authorize contract execution at "this point in time." The Respondent thus replied that "there is no point in us going back to the bargaining table at this point."

On October 8 and 9, 1988, negotiations were again held with respect to the Vicksburg mill. The Respondent at this time made proposals that the UPIU viewed as an effective trade off for the elimination of Sunday premium pay. UPIU president Glenn accordingly announced that he was releasing union representatives from the restriction against signing contracts without [*40] his approval. Also on October 8, 1988, the UPIU informed the Respondent that it was terminating the strikes at the DePere, Jay, and Lock Haven locations, and offered to return to work unconditionally at these facilities. Immediately after the decision was made to end the strikes, the Unions arranged for negotiations at the Mobile mill.

2. The parties reach agreement at Mobile

The Unions and the Respondent met on October 19, 1988, in an attempt to settle the Mobile dispute. At this bargaining session, the parties identified the major issues between them as the elimination of Sunday and holiday premium pay; elimination of jobs in the beater room; the removal of the extruder; the transition agreement; and, according to the Respondent, the Unions' "inability to deliver a signed labor agreement." The parties then discussed the Respondent's "total flexibility" subcontracting proposal. The Unions questioned the Respondent's asserted need for additional flexibility in the assignment of maintenance work, and stated that it would destroy seniority in the bargaining unit. With respect to the conduct of maintenance work after the end of the lockout, the Unions stated, "How do you expect [us] [*41] to work alongside BE&K while there is so much animosity between us?" The parties continued to argue over the transition agreement and the total flexibility proposal.

The parties met again on October 20 and 21, 1988. At the latter session, the Respondent proposed a package which included, inter alia, the elimination of Sunday and holiday premium pay; a 401(k) plan similar to the Vicksburg plan; a transition period of 30 days; increases in the shift differentials to employees who worked every fourth Sunday; a 2 percent increase for all bargaining unit employees on the payroll on particular dates; and a compromise provision as to subcontracting based on the agreement reached at the Respondent's Natchez, Mississippi location. The Natchez language permitted the Respondent to use outside contractors but also committed the Respondent to maintain a sufficient maintenance crew of unit employees in each department to perform the maintenance duties.

On October 28, 1988, the Mobile bargaining unit employees voted to accept the Respondent's October 21, 1988 proposal. UPIU president Glenn was apprised of the vote and approved the agreement. There was no pooling of votes. The Mobile agreement [*42] was executed by the Unions on October 29, 1988. Following the execution of the contract, the Respondent terminated the lockout and permitted all the bargaining unit employees to return to work.

III. THE JUDGE'S DECISION

The judge found that the Respondent violated Section 8(a)(5) and (1) of the Act by failing to provide the Unions with information, pursuant to their request of May 21, 1987, relevant to the parties' contract negotiations. The judge found, as alleged in the complaint, that the Respondent unlawfully failed to provide the Unions with: (1) pages 7, 8, and 11 of the Respondent's cost analysis of BEK's proposed permanent subcontract; (2) the temporary subcontract under which BEK performed the maintenance work from March 21, 1987, until August 11, 1987; (3) a memorandum dated May 27, 1987, from BEK to the Respondent memorializing a change in billing rates under the temporary subcontract; (4) a memorandum dated July 13, 1987, from BEK to the Respondent regarding manning reductions requested by the Respondent during the performance of the temporary contract; and (5) documents relating to the contract proposal by ICS to perform certain computer maintenance work for the Respondent. [*43]

The judge reasoned, in essence, that had these documents been forwarded to the Unions, they would have been apprised that the Respondent's motive for introducing the permanent subcontracting proposal was at least in part to reduce its costs during the lockout. The judge further reasoned that based on the information contained in these documents, the Unions would have been better able to dissuade the Respondent from adhering to the proposal by demonstrating that the Respondent would not in fact achieve significant cost reductions -- as the Respondent asserted throughout negotiations -- by entering into the permanent subcontract with BEK. The judge accordingly found these documents to be relevant to the parties' bargaining negotiations and to have been unlawfully withheld from the Unions.

The judge further concluded that the Respondent's unlawful failure to provide the Unions with relevant information precluded the existence of a legally cognizable impasse as to the Respondent's implementation of its permanent subcontracting proposal. The judge reasoned that the Unions were unable to fully evaluate and respond to the Respondent's permanent subcontracting proposal, in the absence of [*44] the information unlawfully withheld by the Respondent, and therefore no legally cognizable impasse could be reached as to that proposal. The judge accordingly found that the Respondent violated Section 8(a)(5) and (1) of the Act on August 11, 1987, by unilaterally implementing its subcontracting proposal in the absence of a legally cognizable impasse, and that this unfair labor practice continued until the permanent subcontract with BEK was rescinded on May 3, 1988.

The judge further reasoned that, in light of her finding that the Respondent had unlawfully implemented the permanent subcontracting proposal, the Respondent could not demonstrate that it was motivated to execute the permanent subcontract based on legitimate and substantial business justifications. The judge accordingly found that the Respondent's execution of the permanent subcontract for the performance of maintenance work constituted a violation of Section 8(a)(3) and (1) of the Act. The judge explained that, in view of her finding that the Respondent's unilateral implementation of the permanent subcontracting proposal was unlawful, it was unnecessary for her to pass on the complaint allegation that by executing the [*45] permanent subcontract the Respondent engaged in conduct inherently destructive of employee rights under Section 7 of the Act.

The judge finally concluded that a backpay remedy was appropriate for all the locked-out production and maintenance bargaining unit employees for the period during which the permanent subcontract was effective, August 11, 1987 to May 3, 1988. The Respondent argued that the unit employees would have remained locked out during this period even if the Respondent had not entered into the permanent subcontract, and accordingly that no backpay was appropriate. The judge rejected this argument and found that the record established that the Respondent would have terminated the lockout during the effective period of the unlawful permanent subcontract if the Respondent had not unlawfully executed that subcontract. The judge reasoned that any ambiguity as to what might have occurred must be resolved against the Respondent, in light of its unlawful conduct, and that accordingly a backpay award was appropriate.

IV. CONTENTIONS OF THE PARTIES

A. The Respondent's Exceptions

The Respondent contends that the judge erred in finding that it violated Section 8(a)(5) and [*46] (1) of the Act by failing to provide the Unions with requested information. The Respondent asserts that it was not required to furnish the Unions with information because the request was not made in good faith, and because the Unions refused to bargain over the Respondent's permanent subcontracting proposal pending disposition of their unfair labor practice charge. The Respondent argues that by this conduct the Unions waived their right to receive information from the Respondent. The Respondent additionally asserts that the Unions did not specifically request most of the documents found by the judge to have been unlawfully withheld, and that accordingly the information request was not sufficiently specific to put the Respondent on notice of the information sought.

The Respondent further contends that the implementation of its permanent subcontracting proposal did not violate Section 8(a)(5) and (1) of the Act, even in the absence of a lawful impasse, because the Unions engaged in unlawful conduct during the bargaining negotiations. The Respondent asserts that the Unions unlawfully conditioned bargaining on their pooled voting strategy, as well as refused to bargain with respect to [*47] the permanent subcontracting proposal. The Respondent submits that it was privileged to unilaterally implement its permanent subcontracting proposal due to the Unions' unlawful conduct. n21

n21 The Respondent notes that its permanent subcontracting proposal was deemed a mandatory subject of bargaining by the Board's Office of Appeals in denying the Unions' appeal of the dismissal of their unfair labor practice charge.

The Respondent further contends that the judge's finding that it violated Section 8(a)(3) and (1) of the Act is derivative of the judge's finding that the Respondent unlawfully unilaterally implemented its permanent subcontracting proposal. The Respondent asserts that since the latter finding is erroneous, the derivative 8(a)(3) and (1) finding must be reversed.

The Respondent additionally submits that the permanent subcontracting here during a lawful lockout is not inherently destructive of employee rights, because of the Respondent's business goal of reducing its maintenance costs both during the lockout and in the long term. The Respondent argues further that it is unnecessary for the Board to reach the issue of whether the Respondent's conduct is inherently [*48] destructive of employee rights because no backpay remedy is appropriate in this case.

The Respondent argues that a backpay remedy is inappropriate because the lockout continued for over five months after the permanent subcontract was rescinded, based on the parties' continuing inability to resolve the premium pay issue. The Respondent observes that the lockout did not in fact end until resolution of the premium pay issue based on the compromise reached in October 1988 at the negotiations concerning the Respondent's Vicksburg, Mississippi facility. The Respondent further observes that the Mobile dispute could not have ended until the conclusion of the strikes at the other pooled locations of DePere, Jay, and Lock Haven, which did not occur until October 1988. The Respondent accordingly asserts that any backpay award for the period in which the permanent subcontract was in place is inappropriate because the bargaining unit employees would have remained locked out until the resolution of these issues some five months after the rescission of the permanent subcontract.

B. The Position of the General Counsel and the Charging Parties

The General Counsel and the Charging Party Unions [*49] have cross-excepted to the judge's decision not to pass on the complaint allegations that the Respondent violated Section 8(a)(3) and (1) of the Act by, during the lockout, entering into the permanent subcontract with BEK to perform maintenance work previously performed by bargaining unit employees. The complaint alleges that by that conduct, the Respondent permanently replaced its locked-out maintenance employees, and thereby engaged in conduct which is inherently destructive of employee rights under Section 7 of the Act, and that such conduct was undertaken without any legitimate and substantial business justification. Both the General Counsel and the Unions argue that the Board should pass on these complaint allegations and find that the Respondent violated Section 8(a)(3) and (1) of the Act.

The General Counsel and the Unions contend that Board precedent establishes that it is unlawful for an employer to permanently replace locked-out employees, and that such conduct has been deemed inherently destructive of employee rights. They argue that it accordingly follows that permanent subcontracting of bargaining unit work previously performed by locked-out employees should likewise [*50] be found to be inherently destructive conduct because the effect of permanent subcontracting on employee interests is at least as severe as that of the permanent replacement of employees. The General Counsel and the Unions further contend that the Respondent's action constitutes inherently destructive conduct because it (1) obstructs the parties' collective-bargaining process; (2) discourages employees from exercising their statutory rights; and (3) diminishes the Unions' capacity to effectively represent the employees in the bargaining unit.

The General Counsel and the Unions additionally contend that the Respondent failed to argue before the judge its contention, now raised in its exceptions, that the Unions' pooled voting arrangement was unlawful and thereby privileged the Respondent to unilaterally implement its permanent subcontracting proposal. They argue that a contention raised for the first time in exceptions to the Board is ordinarily considered untimely raised and should thus be deemed by the Board to have been waived. The Respondent counters that it argued before the judge that the Unions engaged in unlawful conduct and that this argument is accordingly properly before [*51] the Board on exceptions.

The General Counsel and the Unions further dispute the Respondent's assertion that the Unions refused to bargain regarding the permanent subcontracting proposal. They contend that the Unions' position was one of firm opposition to the Respondent's proposal rather than a refusal to bargain. They additionally argue that the Unions' bargaining posture was caused by the Respondent's unlawful withholding of information relevant to the parties' negotiations.

The General Counsel and the Unions additionally contend that the appropriate remedy in this case is backpay for all locked-out production and maintenance employees during the period of the permanent subcontract. They argue that implementation of the permanent subcontract interfered with the parties' ability to reach an agreement as to the premium pay issue and therefore prolonged the lockout. They further argue that any uncertainty as to the effect of the Respondent's unlawful conduct on the duration of the lockout must be resolved against the Respondent, whose unlawful conduct rendered certainty impossible.

V. DISCUSSION

A. The 8(a)(5) Information Allegations

We agree with the judge, for the reasons [*52] set forth below, that the Respondent violated Section 8(a)(5) and (1) of the Act by failing to provide the Unions, pursuant to their information request, with pages 7 and 8 of the Respondent's cost study of BEK's proposed permanent subcontract. Unlike the judge, however, we find it unnecessary to pass on the complaint allegations that the Respondent unlawfully failed to provide the Unions with the additional documents requested. We note that all the documents alleged to have been unlawfully withheld were in fact obtained by the Unions pursuant to subpoena during the course of these proceedings. There is thus no need in this case for an affirmative order directing the Respondent to furnish the Unions with the requested information. Accordingly, any finding that the Respondent unlawfully withheld the additional documents would be merely cumulative of our finding that the Respondent unlawfully failed to provide the Respondent with pages 7 and 8 of the cost study, and such an additional finding would not affect the Order in this case.

It is axiomatic that an employer has an obligation to furnish to a union, upon request, information relevant to the parties' contract negotiations. NLRB [*53] v. Truitt Mfg. Co., 351 U.S. 149 (1956). There can be no serious dispute regarding the relevance of pages 7 and 8 of the cost study to the parties' negotiations regarding the Respondent's permanent subcontracting proposal, as the Respondent plainly acknowledges that it relied on the cost study in deciding to introduce that proposal into contract negotiations. Indeed, the Respondent essentially conceded in its briefs to the judge the relevance of pages 7 and 8 to the Unions' evaluation of the Respondent's permanent subcontracting proposal. n22

The Respondent thus does not dispute the relevance of pages 7 and 8, but rather argues in its exceptions that it was not required to furnish the Unions with those pages based on its defenses, also advanced before the judge, that the Unions refused to bargain over the permanent subcontracting proposal and that the information was not requested in good faith. The judge found, and we agree, that these defenses are without merit. We shall examine each defense in turn.

n22 The Respondent stated in its reply brief to the judge: "In our initial brief [to the judge], we agreed that those pages [7 and 8] would have been subject to production under the [Unions'] May 21 data request if the Unions had been bargaining over subcontracting." [*54]

1. The refusal-to-bargain defense

It is settled that the pendency of unfair labor practice charges or other collateral litigation does not suspend the obligation to bargain. Wells Fargo Armored Service Corp., 300 NLRB 1104, 1109 (1990). We have carefully reviewed the Unions' conduct with respect to the subcontracting proposal, and we cannot conclude that the Unions refused to bargain over that proposal. We find that the Unions never refused to meet and confer with the Respondent, but rather regularly met in negotiations and expressed their adamant opposition to the Respondent's proposal as well as their justification for taking such a bargaining posture. Adamant insistence on a bargaining position fairly maintained is not in itself a refusal to bargain in good faith. Chevron Oil Co. v. NLRB, 442 F.2d 1067, 1072 (5th Cir. 1971); Commercial Candy Vending Division, 294 NLRB 908 (1989).

There is no dispute that the Unions met regularly with the Respondent in bargaining sessions following the Respondent's introduction of its permanent subcontracting proposal on May 21, 1987. On that date, the Unions filed their unfair labor practice charges challenging the Respondent's introduction [*55] of that proposal. The Unions never refused to meet and confer with the Respondent, however, and the parties thereafter conducted bargaining sessions on May 22, May 27, June 11, and July 16, 1987, prior to the Respondent's implementation of its proposal on August 11, 1987. The Respondent does not contend that it wished to meet more frequently but that the Unions refused to do so. There accordingly can be no contention that the Unions refused to meet and engage in bargaining sessions with the Respondent pending disposition of the unfair labor practice charge.

Nor did the Unions preclude the Respondent from raising the issue of permanent subcontracting or refuse to discuss the issue at the bargaining table. Rather, the Unions conceded that they would "have to listen" to the Respondent's proposal despite their oft-mentioned belief that the proposal was unlawful. Thus, the Unions stated at the May 27, 1987 session their belief that the Respondent had unlawfully introduced the permanent subcontracting proposal, but added that "we won't be rude, you can say anything you want to say and we'll listen, provided you are willing to negotiate on [the elimination of premium pay.]" The Unions [*56] similarly stated at the June 11, 1987 session that "we will listen to anything you have to say, but we will not agree to [the permanent subcontracting proposal.]" Indeed, the Unions stated at the July 16 session that they did not "agree unilaterally that [the Respondent had] the right to add to [the Respondent's] original proposal[]" but that the Unions would "have to listen" to what the Respondent had to say. We find that these statements establish the Unions' recognition, albeit with reluctance, that they were obligated to bargain over the permanent subcontracting proposal despite their belief that the introduction of the proposal was unlawful.

The Unions further responded to the Respondent's proposal by expressing their adamant opposition to permanent subcontracting and conveyed to the Respondent that they would not agree to such a proposal because of the consequent loss of bargaining unit jobs. The Unions' firm opposition to the permanent subcontracting proposal--and the Respondent's equally adamant adherence to that proposal--is well illustrated by the parties' negotiating session on July 16, 1987. At that session, the Respondent stated that "it is our intent to contract maintenance. [*57] You need to believe that. We are as serious as a breath of air. We implore you to bargain about the impact and effect of item 11." The Unions replied that it was "ridiculous" to think that the Unions were going to agree that the Respondent could contract maintenance, and added, "Do you think that we are going to give up 280 jobs? We want to stay alive. You're going to get us killed." The Respondent reiterated that its intent was to contract maintenance. The Unions stated that whether the Unions were willing to agree to contract maintenance was the "silliest question a grown man could ask," and that "we wouldn't agree to give up our jobs." The Respondent replied by repeating its intent to contract out maintenance. We find that this exchange demonstrates that the parties were engaged in lawful hard bargaining with respect to the permanent subcontracting proposal. See Chevron Chemical Co., 261 NLRB 44, 46 (1982). n23

n23 Indeed, the Unions had expressed their concern regarding job loss soon after the Respondent's introduction of the permanent subcontracting proposal. Thus, in late May 1987, union negotiator Dunaway telephoned Respondent's negotiator Gilliland to inquire whether the Respondent was serious about its permanent subcontracting proposal. Gilliland replied affirmatively and Dunaway asked "how [the] Respondent could expect the Unions to agree to give up 285 jobs." Similarly, UPIU Local 2650 President Funk, who was a union negotiator, stated in a letter dated July 8, 1987, to mill manager Perkins, "We still do not understand your statement about contracting out maintenance. How can you make an offer to take away our jobs? If that is part of the offer, we reject that part now! " [*58]

It is fundamental that the obligation to bargain pursuant to Section 8(d) of the Act does not "compel either party to agree to a proposal or require the making of a concession." NLRB v. American National Insurance Co., 343 U.S. 395, 404 (1952); Barry-Wehmiller Co., 271 NLRB 471, 472 (1984). The Unions here were indeed unwilling to agree to the Respondent's permanent subcontracting proposal. They nevertheless regularly met in negotiations with the Respondent, listened to the Respondent's position with regard to permanent subcontracting, and explained--in visceral terms--the justification for their firm opposition to the proposal. A "refusal to bargain cannot be equated with 'refusal to recede from an announced position" advanced and maintained in good faith." Church Point Wholesale Grocery Co., 215 NLRB 500, 502 (1974) (citation omitted), affd. sub nom. Atomic Workers International Union, AFL-CIO v. NLRB, 538 F.2d 1199 (5th Cir. 1976). In these circumstances, we cannot conclude that the Unions refused to bargain over the permanent subcontracting proposal pending the disposition of their unfair labor practice charge. n24

n24 In so concluding, we have carefully considered certain statements made by the Unions which the Respondent contends establish a refusal to bargain. At the May 27, 1987 session, the Unions stated that they "don't agree that you can add items and we're not interested in anything you have to say." The Respondent also points to the judge's finding that the bargaining notes of union negotiator McDonald indicated that during the latter part of the June 11, 1987 bargaining session, the Unions said that until the NLRB had ruled on the legality of Respondent's adding items 9 and 11, the Unions had no need to recognize them as negotiable items and no need for a tour of the mill. "In determining whether a party has negotiated in good faith it is necessary to scrutinize the totality of its conduct." Eltec Corp., 286 NLRB 890, 893 (1987), enfd. 870 F.2d 1112 (6th Cir. 1989). These statements thus must be considered in the context of the Unions' attendance at regular negotiating sessions, discussion of the Respondent's position, and explanation of their adamant opposition to the Respondent's proposal. In these circumstances, we find that the totality of the Unions' conduct establishes that the Unions satisfied their bargaining obligation with respect to the Respondent's permanent subcontracting proposal. [*59]

2. The bad-faith defense

We additionally find without merit the Respondent's assertion that the Unions' information request was made in bad faith. This argument is premised primarily on the Respondent's contention that the Unions refused to further clarify their information request despite the Respondent's entreaties that they do so. It is clear that no clarification of the Unions' request was required, however, to apprise the Respondent that pages 7 and 8 of the cost study were reasonably comprehended within the Unions' request for "all documents[] including . . . studies . . . which support[], justify or tend[] to provide the basis for [the] company proposals" of permanent subcontracting. As noted above, the Respondent concedes that the cost study provided the basis for introducing the permanent subcontracting proposal. The Respondent acknowledges that it introduced the permanent subcontracting proposal based specifically on the conclusion of the cost study that manning levels for performing the maintenance function would be reduced under a permanent subcontract, with concomitant cost savings.

The manning levels under the permanent subcontract were thus integral to the Respondent's [*60] decision to introduce its permanent subcontracting proposal. The Respondent accordingly did provide the Unions with pages 1 to 6 of the cost study, which pages detail the total number of maintenance employees projected to be used in each of the 3 years of the permanent subcontract and the resulting cost savings. The Respondent did not provide, however, pages 7 and 8 of the cost study, which detail the specific breakdown of the number of maintenance employees, and their classification, anticipated to be employed in each maintenance area in the Mobile mill during the first year of the permanent subcontract with BEK. The Respondent accordingly provided the Unions with general information regarding projected manning levels, but failed to provide the specific manning information contained in pages 7 and 8. We conclude that the Unions' information request, which undisputedly encompassed the general manning information, reasonably comprehended in addition the detailed manning information contained in pages 7 and 8 of the cost study, and the Unions had no obligation to provide further clarification in order to demonstrate that at least those additional pages were reasonably comprehended within [*61] the Unions' request.

The Respondent further contends that the Unions' bad faith in requesting information is evidenced by the Unions' cursory review at the bargaining table of the documents the Respondent did provide, the Unions' failure to ask specific questions relating to those documents, and the Unions' failure to conduct a plant tour of the Mobile mill as they initially requested. These assertions, even if entirely accurate, are insufficient to establish that the information request was made in bad faith. The requirement that an information request be made in good faith "is met if at least one reason for the demand can be justified." Hawkins Construction Co., 285 NLRB 1313, 1314 (1987), enf. denied on other grounds 857 F.2d 1224 (8th Cir. 1988). The Unions have clearly satisfied this standard by seeking information which supported the Respondent's permanent subcontracting proposal under which, the Respondent repeatedly asserted, it could operate its maintenance function for less cost than by using unit employees. "The presumption is that the union acts in good faith when it requests information from an employer until the contrary is shown." Id. The Respondent has failed [*62] to show that the Unions engaged in conduct which rebuts the presumption of good faith. The Unions' brief review at the bargaining table--or few queries--regarding the information they did receive does not establish bad faith in requesting information relevant to the permanent subcontracting proposal. Rather, the record establishes that the Unions chose to oppose the permanent subcontracting proposal altogether, based on the information they did receive, rather than attempt to convince the Respondent that its estimate of cost savings and manning reductions was in error. n25 We conclude that the Respondent has failed to establish that the Unions' information request was made in bad faith.

n25 We note that the Unions stated at the bargaining table that they would tour the Mobile mill at such time when the Respondent supplied the Unions with the requested information, in order to make such a tour useful. In light of our finding that the Respondent unlawfully withheld pages 7 and 8 of the cost study, the Unions' position was not unreasonable.

We accordingly find that the Respondent violated Section 8(a)(5) and (1) by failing to provide the Unions with information relevant to the parties' [*63] collective-bargaining negotiations. n26

n26 In so finding, we do not adopt the judge's statement that the "Respondent has displayed a niggardly and dissembling approach to the Unions' request for documentation . . . ."

B. The 8(a)(3) Permanent Subcontracting Allegations

As noted above, the principal issue presented in this case is whether the Respondent, after lawfully locking out its bargaining unit employees and lawfully subcontracting their work on a temporary basis, may take the further step of subcontracting their work on a permanent basis in order to bring economic pressure to bear in support of its bargaining position in contract negotiations. n27 The judge found it unnecessary to pass on this issue. We have carefully considered this issue and find that such conduct is unlawful under Section 8(a)(3) of the National Labor Relations Act because it is inherently destructive of employees' Section 7 rights and because the Respondent's asserted business justification for its conduct does not outweigh the harm to those important employee rights.

n27 As we noted supra, the Respondent's use of temporary subcontract personnel is not alleged to be unlawful.

1. Analytic [*64] framework

a. Supreme Court and Board precedent

The Supreme Court has not had occasion to address the precise issue presented in this case, although several cases provide a framework for resolving this issue. The Court has explained that some employer conduct is so inherently destructive of employee interests that it may be deemed proscribed by Section 8(a)(3) of the Act without need for proof of an underlying improper motive. NLRB v. Great Dane Trailers, 388 U.S. 26, 33 (1967); NLRB v. Erie Resistor Corp., 373 U.S. 221, 227-228 (1963). "There are some practices which are inherently so prejudicial to union interests and so devoid of significant economic justification that no specific evidence of intent to discourage union membership or other antiunion animus is required. In some cases, it may be that the employer's conduct carries with it an inference of unlawful intention so compelling that it is justifiable to disbelieve the employer's protestations of innocent purpose." American Ship Building Co. v. NLRB, 380 U.S. 300, 311-312 (1965). "Thus an employer's protestation that he did not intend to encourage or discourage must be unavailing where a natural consequence [*65] of his action was such encouragement or discouragement. Concluding that encouragement or discouragement will result, it is presumed that he intended such consequence." Radio Officers' Union v. NLRB, 347 U.S. 17, 45 (1954).

The Supreme Court accordingly has articulated the following guidelines for assessing employer motivation in the context of asserted 8(a)(3) violations:

First, if it can reasonably be concluded that the employer's discriminatory conduct was "inherently destructive" of important employee rights, no proof of an antiunion motivation is needed and the Board can find an unfair labor practice even if the employer introduces evidence that the conduct was motivated by business considerations. Second, if the adverse effect of the discriminatory conduct on employee rights is "comparatively slight," an antiunion motivation must be proved to sustain the charge if the employer has come forward with evidence of legitimate and substantial business justifications for the conduct.

Great Dane Trailers, 388 U.S. at 34 (emphasis in original). A finding that an employer's conduct is inherently destructive does not conclude the inquiry, however. Rather, the Board must [*66] additionally weigh in each case the asserted business justification against the invasion of employee rights in order to determine whether the employer has committed an unfair labor practice. The Board's task is to "weigh[] the interests of employees in concerted activity against the interest of the employer in operating his business in a particular manner and [to] balance in the light of the Act and its policy the intended consequences upon employee rights against the business ends to be served by the employer's conduct." Erie Resistor Corp., 373 U.S. at 229 (footnote omitted). See Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 703 (1983).

The Supreme Court has on several occasions assessed whether employer conduct is inherently destructive of employee rights. In Erie Resistor Corp., the Court found inherently destructive the employer's grant, during an economic strike, of 20 years' superseniority to all strike replacements and to those employees who abandoned the strike and returned to work. The Court noted that "super-seniority by its very terms operated to discriminate between strikers and nonstrikers, both during and after a strike, and its destructive impact upon [*67] the strike and union activity [could] not be doubted." 373 U.S. at 231. The Court agreed with the Board's finding that:

Super-seniority renders future bargaining difficult, if not impossible, for the collective bargaining representative. Unlike the [right of an employer to hire permanent replacements for striking workers under NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1938),] which ceases to be an issue once the strike is over, the plan here creates a cleavage in the plant continuing long after the strike is ended. Employees are henceforth divided into two camps: those who stayed with the union and those who returned before the end of the strike and thereby gained extra seniority. This breach is re-emphasized with each subsequent layoff and stands as an ever-present reminder of the dangers connected with striking and with union activities in general.

Id. The Court thus concluded that the Board could properly find that the employer's business purpose of keeping its plant in operation during the strike did not justify a means so damaging to the employees' right to engage in concerted activities. Id., 373 U.S. at 231-232.

In American Ship Building, supra [*68] and NLRB v. Brown Food Store, 380 U.S. 278 (1965), the Court addressed the concept of inherently destructive conduct in the context of a lockout. In each case the Court assessed the impact of the employer conduct on three employee rights protected by Section 7 of the Act: the right to bargain collectively, the right to strike, and the right to engage in union activities. The Court found in each instance that the impact of the employer conduct on these important employee rights was comparatively slight rather than inherently destructive, and that sufficient business justification for the employer conduct had been demonstrated.

In American Ship Building, supra, the Court held that the employer did not violate Section 8(a)(1) or (3) of the Act and did not engage in conduct inherently destructive of employee rights by locking out employees, following a bargaining impasse, for the sole purpose of bringing economic pressure to bear in support of a legitimate bargaining position. The Court emphasized that the employer's lockout reasonably served the legitimate business end of pressing good-faith bargaining demands. The Court then explained that the lockout was not in any way inconsistent [*69] with the employees' right to bargain collectively:

The lockout may well dissuade employees from adhering to the position which they initially adopted in the bargaining, but the right to bargain collectively does not entail any "right" to insist on one's position free from economic disadvantage. Proper analysis of the problem demands that the simple intention to support the employer's bargaining position as to compensation and the like be distinguished from a hostility to the process of collective bargaining which could suffice to render a lockout unlawful.

380 U.S. at 309 (emphasis supplied). The Court further observed that the lockout in support of the employer's legitimate bargaining position was not inconsistent with the employees' right to strike because "there is nothing in the statute which would imply that the right to strike 'carries with it' the right exclusively to determine the timing and duration of all work stoppages." 380 U.S. at 310. The Court in addition held that the lockout did not carry with it any necessary implication that the employer acted to discourage union membership. The Court noted that the lockout did not target only union members. Although [*70] employees might suffer economic disadvantage because of their union's bargaining position, "this is also true of many steps which an employer may take during a bargaining conflict, and the existence of an arguable possibility that someone may feel himself discouraged in his union membership or discriminated against by reason of that membership cannot suffice to label them violations of § 8(a)(3) absent some unlawful intention." 380 U.S. at 312-313.

In Brown Food Store, issued the same day as American Ship Building, the Court held that nonstruck employers in a multiemployer bargaining association did not engage in inherently destructive conduct and did not violate Section 8(a)(1) or (3) of the Act by continuing operations with temporary replacements after lawfully locking out unit employees in response to a whipsaw strike against one association member. The Court again assessed the impact of the employers' conduct on employees' Section 7 rights. The Court observed that the use of temporary replacement personnel added only slightly to the impact of the lawful lockout on the employees' right to union membership in view of the temporary nature of the replacements. The Court explained [*71] that the "replacements were expressly used for the duration of the labor dispute only; thus, the displaced employees could not have looked upon the replacements as threatening their jobs." n28 The Court emphasized that the union membership could end the dispute and terminate the lockout at any time simply by agreeing to the employers' terms, resulting in their return to work on a regular basis and the departure of the temporary replacements. "At most the union would be forced to capitulate and return its members to work on [the employers'] terms. . . ." n29 The Court additionally held that the use of temporary replacements was not inherently destructive of the right to strike even if it doomed the whipsaw strike to failure. The Court accordingly concluded that the impact on employee rights resulting from the employers' use of temporary replacements during the lockout was comparatively slight and was a measure reasonably adapted to the achievement of the legitimate goal of remaining open for business and preserving the integrity of the multiemployer bargaining unit in the face of the whipsaw strike. n30

n28 Brown Food Store, 380 U.S. at 288.

n29 Brown Food Store, 380 U.S. at 288. [*72]

n30 The Court expressly declined to pass on the issue of whether an employer engages in inherently destructive conduct by hiring permanent replacements for locked-out employees. Brown Food Store, 380 U.S. at 292 fn. 6.

The inherently destructive doctrine has most recently been applied by the Supreme Court in Metropolitan Edison Co. v. NLRB, supra, 460 U.S. 693 (1983). The Court there held that an employer engaged in conduct inherently destructive of employee rights by disciplining union officials more severely than other employees for participating in an unlawful work stoppage. The Court found that the employer's conduct directly penalized the protected Section 7 right to hold union office, and that the imposition of such discipline on union officials inhibited qualified employees from holding union office. 460 U.S. at 702-703. The Court concluded that the harmful effect of the discrimination inherent in singling out union officers for discipline was not outweighed by the employer's legitimate interest in ensuring compliance with its contractual no-strike clause. Id. at 703-705.

In 1986 the Board considered whether an employer's use of temporary replacements during [*73] an otherwise lawful lockout was inherently destructive of employee rights within the meaning of Supreme Court precedent. Harter Equipment, 280 NLRB 597 (1986) (Harter I), affd. sub nom. Operating Engineers Local 825 v. NLRB, 829 F.2d 458 (3d Cir. 1987). The Harter Board followed the Court's rationale in Brown Food Store and held that a single employer does not engage in inherently destructive conduct and does not violate Section 8(a)(3) or (1) of the Act absent specific proof of antiunion motivation, by hiring temporary replacements to engage in business operations during an otherwise lawful lockout of its employees. The Board explained that the use of temporary replacement employees had only a comparatively slight effect on employee rights:

Any adverse effect of the use of temporary employees on the right to belong to a union . . . represents, as in Brown Food Store, at most only a slight addition to the impact of the lockout itself. In every instance, the use of "temporary" employees means no threat to the permanent employee status of locked out employees. The Union or its individual members have the ability to relieve their adversity by accepting the [*74] employer's less favorable bargaining terms and returning to work.

Harter I, 280 NLRB at 600. The Board further observed that the use of temporary replacements had no greater adverse effect on the right to bargain collectively than did the lawful lockout itself--which had the impact on employees by removing them from the ranks of wage earners--and that the bargaining relationship continued while the parties could negotiate their good-faith demands. The Board concluded that the use of temporary replacement employees to remain in operation during the lockout was a measure reasonably adapted to the employer's fundamental interest in continuing its business operations. n31

n31 Harter I, 280 NLRB at 600. The majority of circuit courts which have examined the issue have agreed with the Board that a single employer's use of temporary replacements during a lawful lockout does not violate the Act. See Operating Engineers Local 825, 829 F.2d at 458; Boilermakers Local 88, 858 F.2d 756 (D.C. Cir. 1988); Inter-Collegiate Press, 486 F.2d 837 (8th Cir. 1973). But see Inland Trucking Co. v. NLRB, 440 F.2d 562 (7th Cir. 1971), cert. denied 404 U.S. 858 (1971).

Member Browning expresses no view on the issue that divided the Board in Harter. In the instant case, the Respondent's use of temporary personnel during the lockout is not alleged to be unlawful. See fn. 8, supra. [*75]

b. Guiding principles for determining Whether inherently destructive conduct has occurred

The Supreme Court's development and application of the doctrine of employer conduct inherently destructive of employee rights may be distilled into several fundamental guiding principles. The Court has specifically directed that the severity of the harm to employees' Section 7 rights caused by the employer conduct must be determined. As one commentator has observed, this includes the severity of the harm suffered by the employees for exercising their rights as well as the severity of the impact on the statutory right being exercised. n32 Thus, as in Erie Resistor Corp., an employer's policy of directly attaching penalties to participation in protected union activities is inherently destructive of the employees' statutory right to engage in those activities. See Kansas City Power & Light Co. v. NLRB, 641 F.2d 553, 557-560 (8th Cir. 1981); Kaiser Engineers v. NLRB, 538 F.2d 1379, 1386 (9th Cir. 1976). As the Fifth Circuit has stated, "conduct inherently destructive of important employee rights is that which directly and unambiguously penalizes or deters protected activity." [*76] NLRB v. Haberman Construction Co., 641 F.2d 351, 359 (5th Cir. 1981) (en banc). n32

n32 See Fick, Inherently Discriminatory Conduct Revisited: Do We Know It When We See It?, 8 Hofstra Labor L.J. 275, 308 (1991).

A second consideration in determining whether inherently destructive conduct has occurred is the temporal impact of the employer's conduct. The Court in Erie Resistor Corp. emphasized the effect of the employer conduct upon future collective bargaining and union activity. "Whether employer conduct is inherently destructive hinges on the 'distinction between conduct which merely influences the outcome of a particular dispute and that which is potentially disruptive of the opportunity for future employee organization and concerted activity.'" n33 Thus, conduct of a temporary duration which seeks to put pressure on union members to accept a particular management proposal is distinguished from conduct that has "far reaching effects which would hinder future bargaining" n34 and conduct that "creates visible and continuing obstacles to the future exercise of employee rights." n35

n33 Boilermakers Local 88 v. NLRB, supra at 756, 763, quoting Note, Lockouts-Employer's Lockout with Temporary Replacements is an Unfair Labor Practice, 85 Harv.L.Rev. 680, 686 (1972). [*77]

n34 Portland Willamette Co. v. NLRB, 534 F.2d 1331, 1334 (9th Cir. 1976).

n35 Inter-Collegiate Press v. NLRB, supra at 845, cert. denied sub nom. Bookbinders Local 60 v. NLRB, 416 U.S. 938 (1974).

Third, we note that the Court specifically directed in American Ship Building that a distinction must be drawn between an employer's "hostility to the process of collective bargaining" and its simple intention to support its bargaining position as to compensation and other matters. 380 U.S. at 309. As the District of Columbia Court of Appeals has explained:

Essential to understanding the Supreme Court's analysis . . . is its distinction between substance and process in collective bargaining. The Labor Act is process-oriented. It establishes and protects the employees' right to bargain, not their right to a bargain. Thus, the employer must negotiate but it need not agree. Employer "hostility to the process of collective bargaining" is intolerable in this regime, and constitutes a rejection of all that the law requires an employer to accept.

Boilermakers Local 88 v. NLRB, 858 F.2d at 763 (emphasis in original). The Seventh Circuit has accordingly [*78] observed that "the label 'inherently destructive' may be applied only to conduct which exhibits hostility to the process of collective bargaining itself; actions which merely further an employer's substantive bargaining position in a particular contract negotiation are not 'inherently destructive' as long as the employer respects the employees' right to engage in concerted activity." Esmark, Inc. v. NLPB, 887 F.2d 739, 748 (7th Cir. 1989) (emphasis in original). This solicitude for the collective-bargaining process reflects a recognition that that process and the promotion of an autonomous relationship between the parties is the fundamental construct of the National Labor Relations Act. n36 As the Court declared in First National Maintenance Corp. v. NLRB, 452 U.S. 666, 674 (1981), "Central to achievement of the purpose [of the National Labor Relations Act] is the promotion of collective bargaining as a method of defusing and channeling conflict between labor and management."

n36 Sec. 1 of the Act establishes, inter alia, that:

It is hereby declared to be the policy of the United States to eliminate the causes of certain substantial obstructions to the free flow of commerce and to mitigate and eliminate these obstructions when they have occurred by encouraging the practice and procedure of collective bargaining .... [*79]

Fourth, conduct may be inherently destructive of employee rights if it "discourages collective bargaining in the sense of making it seem a futile exercise in the eyes of employees." Esmark, Inc. v. NLRB, 887 F.2d at 749 (quoting Boilermakers Local 88 v. NLPB, supra, 858 F.2d at 764). An example of conduct falling within this category is a "calculated repudiation of a collective bargaining agreement and prompt institution of less favorable terms" because an employer thereby "sends a signal to employees that despite their diligent efforts to organize and bargain collectively, their contract may be disregarded." Id.

We now turn to a consideration of the Respondent's conduct at issue in this case in the light of these principles. n37

n37 While the reasoning of the Board and court decisions may be distilled into the aforementioned four guiding principles for determining whether inherently destructive conduct has occurred, there is of course no requirement that conduct exhibit all four characteristics in order to be considered inherently destructive.

2. The inherently destructive issue presented here

We find that the Respondent's permanent subcontracting of bargaining unit [*80] work during the lockout in this case produced the harms to employees and their exercise of Section 7 rights that were avoided in Brown Food Store and Harter I because of the temporary nature of the replacements utilized by the employers during the lockouts in those cases.

First, it is undisputed in this case that the unit maintenance employees whose work was permanently subcontracted lost their jobs and would not have returned to perform maintenance work at the conclusion of the labor dispute. n38 The Respondent's conduct therefore imposed the most severe penalty unit maintenance employees could have suffered: permanent loss of employment and employee status. In contrast, "the use of 'temporary' employees [in Harter meant] no threat to the permanent employee status of locked out employees." Harter I, supra, 28O NLRB at 600.

n38 The Respondent plainly conceded this fact at the August 24, 1987 bargaining session. The Respondent introduced at subsequent bargaining sessions its proposals that some unit employees could return to work by bumping into the jobs of less senior production employees, who in turn would be permanently laid off.

The Respondent's conduct here [*81] subjected unit production employees as well to the severe harm of loss of employment. Under the terms of the Respondent's transition proposals, more senior maintenance employees facing job loss as a result of the Respondent's permanent subcontracting could bump into the jobs of less senior production employees, resulting in the permanent layoff of those production employees. Accordingly, the harm suffered by both the unit maintenance and production employees as a result of the Respondent's conduct was most severe. The unit employees here could not end the dispute simply by agreeing to the Respondent's terms and then, as with the locked-out employees in Brown Food Store, "return[] to work on a regular basis." n39

n39 Brown Food Store, 380 U.S. at 289.

The impact of the Respondent's conduct was correspondingly severe on the unit employees' exercise of their Section 7 rights. By resisting the Respondent's bargaining proposals and adhering to the Unions' negotiating positions, the unit employees were exercising their fundamental statutory rights under Section 7 of the Act to assist the Unions and to bargain collectively through the Unions as their representative. The Respondent's [*82] permanent subcontracting rendered nugatory the exercise of these statutory rights by those unit employees faced with permanent loss of employment and employee status. There can, of course, be no greater obstacle to the exercise of employee rights than permanent loss of employment and employee status.

Second, the Respondent's conduct would also significantly adversely impact the exercise of Section 7 rights by those unit employees whose jobs were not lost as a result of the Respondent's conduct. Those employees who did return to work at the resolution of the labor dispute would perform their duties side-by-side with the BEK contract employees who were performing on a permanent basis the work of former unit members. Furthermore, the altered composition of the bargaining unit, caused by the loss of unit work and resulting bumping of employees into different unit positions, would be a new and continuing feature of the Respondent's workplace. Thus, the remaining bargaining unit employees need merely look at those working alongside them to be visibly reminded on a day-to-day basis of the most severe and feared consequence of engaging in collective bargaining and union activities: permanent [*83] job loss. These remaining employees would be on notice that exercising their Section 7 rights to assist the Unions by merely adhering to their Unions' collective-bargaining positions might be met not only with temporary deprivation of work, but also with the permanent loss of employment.

The severe impact on employees and the exercise of their Section 7 rights resulting from the permanent loss of bargaining unit maintenance work via permanent subcontracting thus clearly would not end at the conclusion of the instant labor dispute, in contrast to the limited impact of temporary replacement employees used for the duration of a labor dispute only. The Court emphasized in Brown Food Store that the impact on employees' rights due to the use of temporary replacements during a lawful lockout was comparatively slight because the union at most would be forced to capitulate and return its members to work on less favorable terms than sought. The use of permanent subcontracting here would do more than merely influence the outcome of the substantive terms of the instant labor dispute. The Respondent's conduct rather would result in permanent job loss, as well as additional employee dislocation, [*84] serving to chill the future exercise of employee rights by remaining unit members. The Respondent's conduct would accordingly have a continuing effect on the future exercise of employee rights--on both employees who returned to work and those who did not--well beyond the settlement of the instant dispute that "stands as an ever-present reminder of the dangers connected with . . . union activities." Erie Resistor Corp., 373 U.S. at 231. We cannot conclude, therefore, that the effect of the Respondent's permanent subcontracting on unit employees and the exercise of their statutory rights is at most only a slight addition to the impact of the lawful lockout, as the Supreme Court emphasized is the case with the use of temporary replacements. Brown Food Store, 380 U.S. at 288-289. n40 Rather, the Respondent's actions fall within that category of inherently destructive conduct that adversely affects the future exercise of protected employee rights. Haberman Construction Co., supra, 641 F.2d at 359.

n40 See Boilermakers Local 88 v. NLRB, 858 F.2d at 765 ("The use of temporary replacements, unlike the initial lockout, does not itself deprive employees of work or otherwise impose a cost upon them"). [*85]

Third, we further find that the Respondent's implementation of its permanent subcontracting proposal had far reaching pernicious effects which impaired the parties' process of collective bargaining and therefore may be labeled "inherently destructive" for that reason as well. We have carefully reviewed the record evidence of the course of the parties' contract negotiations and find that the Respondent's conduct of implementing the permanent subcontracting proposal diverted the bargaining process away from negotiations regarding the basic issues separating the parties--Sunday pay, holiday pay, and even the lawful proposal itself of more permissive use of subcontracting--to a narrow focus on the consequence of the Respondent's implementation of the permanent subcontract: whether the unit maintenance workers would return to work at the end of the lockout.

The parties' first bargaining session, on August 24, 1987, following the implementation of the permanent subcontract was thus limited to the issue of the status of the maintenance workers in light of the permanent subcontract. The Unions repeatedly queried as to the fate of the unit maintenance employees, and the Respondent replied [*86] that the unit maintenance employees would not return to work under the contract with BEK. Local 2650 President Funk asked, "How in the hell do you ever expect to get an agreement out of this now?"

The Unions opened the October 26, 1987, bargaining session by stating that they wanted to talk about the relocation of the extruder, how items 9 and 11 had been added, and about the subcontracting of maintenance. The parties then engaged in lengthy discussion of the pooling issue. The negotiations returned at their conclusion, however, to the issue of the status of the maintenance employees. The Respondent recognized the Unions' concern regarding what would happen to the maintenance people, and the Unions emphasized that that was one issue which needed to be resolved.

The parties' November 5, 1987 negotiating session involved the pooling issue and discussion of a productivity bonus in lieu of premium pay. The Unions continued to underscore their paramount concern regarding the fate of the maintenance workers, however, and accordingly stated: "We know less here of our status than we do at other places. We have to start somewhere before we ever get the pooled voting issue settled.... [We] [*87] don't know the status of the Mobile mill. And [we] don't know the status of the two hundred and eighty maintenance jobs."

The events at the next negotiating session on December 4, 1987, illustrate that the bargaining process had become entangled with the fate of the maintenance employees. Thus, when the Respondent asked for a response on the extruder issue and noted that it was willing to discuss productivity bonuses but that it had no intention of dropping permanent subcontracting, the Unions simply responded by asking whether the parties could reach an agreement on putting the maintenance people back to work at the Mobile mill. The Unions also stated that they would change their position on premium pay--the critical issue in negotiations--if the Respondent would withdraw the permanent subcontracting proposal. The Respondent replied that it would discuss productivity bonuses if the Unions would agree to items 9 and 11 (permanent subcontracting). Thus, both parties indicated a willingness to move on the critical premium pay issue, but each party conditioned such movement on the issue of permanent subcontracting.

The Respondent's implementation of the permanent subcontracting [*88] proposal further entangled the bargaining process when the Respondent introduced, at the December 17, 1987 session, its transition proposal to cover the operation of the mill at such time when the Respondent ended the lockout. As noted above, the Respondent's transition proposal provided for the return of some senior maintenance employees by bumping into the jobs of more junior production employees, but that other maintenance employees and some production employees would be permanently laid off. The Respondent's negotiators testified that they introduced the transition agreement at this session, even though final resolution of the Mobile dispute was not anticipated at any time in the near future, because they were aware of how difficult the issue would be of returning unit employees working side-by-side with subcontract employees. The Respondent's implementation of its permanent subcontracting proposal during the lockout thus concededly complicated the transition issue and prompted the Respondent to raise the issue well prior to the resolution of the substantive issues separating the parties, due to the Respondent's own concern about the impact on negotiations of its implementation [*89] of the permanent subcontract.

The Respondent's concern was well founded because the parties' December 17, 1987 bargaining session, as well as the next sessions held on December 21, 1987, and January 4 and 29, 1988, principally focused on the transition agreement. At the December 17 session, the Unions inquired whether the BEK employees were going to remain in the plant under the transition agreement and whether item 11 stayed intact. The Respondent replied affirmatively, but explained that some maintenance employees would return under the bump-back proposal. The Unions replied that "our position is and always has been that all of them [the bargaining unit employees] will have to come back before item 11 is removed." The Respondent stated that it had no intention of dropping item 11, and if the parties "had not talked about what to do with the maintenance people, then in effect the number that would be laid off would be the size of the maintenance department." Negotiations regarding permanent subcontracting--and the bargaining process in general--had thus devolved to simply the question whether the maintenance employees would return to work.

At the parties' December 21 session, the [*90] Unions made a counterproposal as to transition which provided, inter alia, that all employees who desired to return to work could do so and that the Respondent could assign work on a nonprecedent setting basis for a 14-day period. The Respondent asked whether the counterproposal prohibited the use of contractors, and the Unions replied that "if all the Unions' represented people came back, Respondent could have all the contractors it wanted." The January 4 and 29, 1988 sessions were also primarily concerned with the transition issue. At the latter session, the Unions stated that "the Respondent's January 29 proposed transition agreement was all right so long as the transition agreement was reduced to 14 days and 'our folks' were back to work." The parties' collective-bargaining process at this time had been thus diverted from a substantive discussion of the issues separating them to a concededly premature focus on the transition issue, which in turn primarily concerned whether the maintenance employees would return to work. This diversion of the bargaining process was a direct result of the Respondent's implementation of the permanent subcontract.

The parties' next negotiating session [*91] on February 18, 1988, again focused primarily on the status of the maintenance employees. The Respondent at this session replied to written questions the Unions had previously submitted regarding the permanent subcontract with BEK. The first question was "whether company items 9 and 11 were still a company proposal or was the permanent replacement of unit employees final ...." The Respondent replied, inter alia, that "it is not our intention to rescind that contract." The Unions continued to press the question of whether the maintenance employees had been replaced by BEK employees. In addition, the Respondent replied to the Unions' question regarding severance pay by stating that most if not all of the maintenance employees would have sufficient seniority to bump into production jobs, and that any maintenance employees who were laid off would have to exercise their severance pay rights and would be terminated. n41

n41 The Unions also posed the following two questions to the Respondent: (1) what savings has the company realized in the months since signing the permanent subcontract with BEK; and (2) what has been the cost to the company to replace the represented employees. These lines of inquiry indicate the focus of negotiations on the implementation of the permanent subcontract and its impact on unit employees. [*92]

At the final bargaining sessions prior to the rescission of the permanent subcontract, the Unions proposed a vote on the Respondent's March 10, 1987 offer, including, in addition, a profit-sharing plan in lieu of premium pay and excluding the permanent subcontracting proposal. The Respondent rejected that proposal because it did not address its concern regarding maintenance costs, and because it was unwilling to implement a profit sharing plan. The final bargaining sessions before rescission of the permanent subcontract concerned the Respondent's so-called Louisville proposal.

Thus, during the 9-month period of the permanent subcontract, negotiations focused to a significant extent on the return to work of the maintenance employees rather than on the substantive issues between the parties. The use of permanent subcontract employees accordingly had more than a slight impact on the labor dispute, unlike the use of temporary replacements, which does not threaten the jobs of locked-out employees, and thereby impede resolution of the dispute. Here, the tenure of the replacement employees and the resulting fate of the unit maintenance employees became inextricably entangled with the substantive [*93] issues separating the parties. n42 Indeed, the Respondent emphasized that it would not move on the issue of permanent subcontracting which it had already implemented. Resolution of the labor dispute thus became dependent on the Hobson's choice facing the union membership between resisting the permanent subcontracting demands and remaining entirely locked out or accepting the demands and returning to work absent nearly a quarter of the former membership. The parties' bargaining relationship thus did not continue without interruption during the lockout, as the Board emphasized in Harter I is the case with the use of temporary employees. Rather, the Respondent's implementation of its permanent subcontracting proposal placed diminution of the bargaining unit at the forefront of the bargaining process, operating as a virtual condition precedent to the settlement of the labor dispute.

n42 We are mindful to distinguish between the impact on the bargaining process of the Respondent's introduction into negotiations of its permanent subcontracting proposal--which is not alleged to be unlawful--and the impact of the Respondent's implementation of that proposal. While the introduction of the proposal was indeed a contentious issue between the parties, it was the implementation of the proposal which caused the return to work of the maintenance employees to become a focal point in resolving the labor dispute. [*94]

Finally, as noted above, the Respondent's conduct was destructive not only of the ongoing bargaining process but also was likely to hinder the parties' future collective bargaining. The altered composition of the bargaining unit would come into play regarding future layoffs and other employer action implicating employee seniority; and any future contract negotiations would be overshadowed by the specter of the possible loss of more unit jobs as a result of lockouts and permanent subcontracting.

3. The business justification issue

We now turn to the Respondent's asserted business justification for its inherently destructive conduct, because the Supreme Court has directed the Board "to strike the proper balance between the asserted business justifications and the invasion of employee rights" in determining whether an employer's conduct is so inherently destructive of those rights as to warrant finding a violation of Section 8(a)(3) and (1) in the absence of direct proof of discriminatory motivation. NLRB v. Great Dane Trailers, 388 U.S. at 33-34. See also NLRB v. Truck Drivers Union, 388 U.S. 87, 96 (1957) (in determining lawfulness of temporary lockout, the "ultimate problem [*95] is the balancing of the conflicting legitimate interests.").

According to the Respondent's principal witness on the business justification issue--its mill manager, Perkins--it implemented the permanent subcontract during the lockout "to reduce the cost, specifically the maintenance cost, during the lockout. n43 The Respondent introduced no evidence, however, that such a cost reduction--even assuming that it represented a significant reduction of costs below those incurred under the temporary subcontract with BEK--was essential to continuing its operations during the lockout. It is undisputed that the Respondent was able to secure the services of BEK under a temporary subcontract both to undertake preparatory operations before the lockout and to carry on operations without interruption thereafter.

n43 Perkins' testimony in this regard was echoed by the Respondent's counsel at the hearing, who explained: "[The permanent subcontracting proposal] was implemented to save costs during the lockout and to reduce the multiplier and to bring down overtime and all these other factors. And that is the only business justification in this case."

We note the Respondent's contention in its exceptions that, contrary to the judge's finding that it implemented the permanent subcontract to reduce the maintenance cost during the lockout, the permanent subcontract was implemented to achieve long-term savings by performing the maintenance function less expensively with subcontract personnel as compared with unit employees. The judge specifically found, however, that the record evidence established that achievement of this latter goal was not the reason the Respondent entered into the permanent subcontract. [*96]

The Respondent also boasted to the Union at a May 21, 1987 bargaining session and in subsequent letters to the locked-out employees that the performance of the maintenance work by the BEK employees operating under the temporary subcontract more than met the Respondent's expectations. The Respondent showed nothing even approaching exigent circumstances for entering into the permanent subcontract with BEK.

The absence of any evidence showing that converting the temporary maintenance subcontract to a permanent one was essential to the Respondent's maintaining operations during the lockout is a critical flaw in its business justification defense. Thus, "continuation of [an employer's] business operations" during a labor dispute was recognized by the Board in Harter I, 280 NLRB at 599, as a business justification for locking out employees and hiring temporary replacement; but there is no authority for the proposition that an employer's ability to achieve some cost savings is, by itself, such an important interest as to justify a severe incursion on the rights of employees to maintain their collective-bargaining positions during a labor dispute. Accrual of additional cost savings [*97] is, in short, insufficient to constitute "an overriding business purpose justifying the invation of union rights" that flow from the Respondent's conduct. Erie Resistor Corp., 373 U.S. at 231.

The Respondent advances several additional arguments purporting to justify its conduct of permanently subcontracting unit work during the lawful lockout. The Respondent contends that its conduct cannot be deemed inherently destructive of employee rights because in permanently subcontracting unit work it did not distinguish between employees who engaged in union activity and those who did not. In the "inherently destructive" conduct case, however, the making of distinctions on the basis of union activity is only one element among several relevant factors to be considered in evaluating whether employer conduct is inherently destructive. The absence of this one element cannot ameliorate or otherwise justify the destructive impact on the collective-bargaining process and the exercise of employee rights by all the unit employees caused by the Respondent's conduct, as set forth in full above. We cannot agree with the Respondent's contention that an employer can never be found to have engaged [*98] in inherently destructive conduct so long as it was careful to treat all employees alike, no matter how destructive of employee rights its conduct may be.

We additionally find without merit the Respondent's characterization of its implementation of the permanent subcontract as a fundamental change in its business operations that need not have been postponed during the lockout. The record plainly shows that the Respondent did not in fact enter into the permanent subcontract to effect an operational change but rather, as mill manager Perkins testified, to reduce its maintenance cost during the period of the lockout.

The Respondent further asserts in defense of its conduct that it did not take the extreme step of permanently replacing unit employees during the lockout in this case but rather merely permanently subcontracted unit work. We note that strong doubts have been expressed as to the lawfulness of the use of permanent replacements during a lockout, n44 although the Supreme Court has expressly declined to pass on this issue n45 and it is not before us today. We can discern no basis, however, for concluding, as the Respondent suggests, that the destructive impact on employee rights [*99] in this case was appreciably diminished by the fact that the Respondent opted to deprive the locked-out employees of their jobs by permanently subcontracting their work rather than by permanently replacing them with other employees working directly for the Respondent.

n44 See Brown Food Store, supra, 380 U.S. at 293 (Goldberg, J., concurring) ("There would be grave doubts as to whether the act of locking out employees and hiring permanent replacements is justified by any legitimate interest of the nonstruck employers . . . ."); Harter Equipment, Inc., 293 NLRB 647, 648 (1989) (Harter II) ("The Employer in [Harter I] locked out the bargaining unit in support of its bargaining demands and they were not, and could not lawfully be, permanently replaced."). See also Oberer, Lockouts and the Law: The Impact of American Ship Building and Brown Food, 51 Cornell L.Q. 193, 224-225 (1966).

n45 See American Ship Building, supra, 380 U.S. at 308 fn. 8; Brown Food Store, supra, 380 U.S. at 292 fn. 6.

Indeed, in certain respects the permanent subcontracting of the unit maintenance work was more harmful to employee rights and the collective-bargaining process [*100] than permanent replacement of union maintenance employees would be. A permanently replaced worker retains his status as an employee and is subject to recall in the event of a vacancy. Laidlaw Corp., 171 NLRB 1366, 1369-1370 (1968), enfd. 414 F.2d 99 (7th Cir. 1969), cert. denied 397 U.S. 920 (1970). The replaced employee further may vote in any representation election conducted within 12 months after commencement of a strike. Wahl Clipper Corp., 195 NLRB 634 (1972). In contrast, an employee displaced by the permanent subcontracting of unit work has no recall or voting rights. In addition, a permanent subcontract diminishes the bargaining unit by the scope of the subcontract. See Alexander Linn Hospital Assn., 244 NLRB 387, 390 (1979), enfd. mem. 624 F.2d 1090 (3d Cir. 1980). The Respondent's distinction that it permanently subcontracted unit work rather than permanently replaced locked-out employees accordingly does not alter our calculus of the harmful impact on employee rights flowing from the Respondent's conduct.

The Respondent suggests, moreover, that it would be anomalous for the Board to hold that it is unlawful for it to have permanently subcontracted unit work [*101] during the course of the lockout while under the rule in Mackay Radio & Telegraph Co., 304 U.S. at 333, the Respondent may take the step of permanently replacing striking employees. The Respondent's attempt to justify its conduct within the parameters of Mackay is unavailing, however. The rationale underlying Mackay of protecting the "right [of the employer] to protect and continue his business by supplying places left vacant by strikers" n46 is entirely inapplicable to the Respondent here, whose interest in protecting and continuing its business was fully protected by the lawful use of temporary subcontracting. Furthermore, the equation of a locking-out employer with a struck employer neglects important distinctions between the two situations. n47 Thus, although it may be possible for an employer to provoke a strike in a particular case, it is still the employees who must decide whether to choose to strike and risk permanent replacement. In contrast, the decision to lock out rests entirely with the employer, albeit in response to either actual or potential union conduct. The District of Columbia Court of Appeals has thus questioned the application of the Mackay rule [*102] in the context of a lockout because "a lockout, followed by permanent replacements, might too easily become a device for union busting, successfully disguised as an effort to protect the employer's bargaining position and his legitimate interest in maintaining operations." Boilermakers Local 88 v. NLRB, 858 F.2d at 769 (quoting Meltzer, The Lockout Cases, 1965 Sup.Ct.Rev. 87, 104). We are additionally mindful that Mackay did not deal with the issues raised here of permanent subcontracting in the context of a lockout, or with the consequent effect on the Section 7 rights of all the unit employees and the collective-bargaining process. Accordingly, as the Supreme Court stated in Erie Resistor Corp. in rejecting the employer's reliance on Mackay, "we have no intention of questioning the vitality of the Mackay rule, but we are not prepared to extend it to the situation we have here." 373 U.S. at 232.

n46 304 U.S at 345.

n47 See Oberer, Lockouts and the Law: The Impact of American Ship Building and Brown Food, 51 Cornell L.Q. at 221-222.

Accordingly, for all these reasons, we conclude that the Respondent engaged in conduct inherently destructive of [*103] employee rights and violated Section 8(a)(3) and (1) of the Act by subcontracting bargaining unit work on a permanent basis in order to bring additional economic pressure to bear in support of its bargaining proposals after it had lawfully locked out the bargaining unit employees and subcontracted their work on a temporary basis. n48

n48 In so concluding, we are mindful that the Board's role is not to function as an "arbiter of the sort of economic weapons the parties can use in seeking to gain acceptance of their bargaining demands." NLRB v. Insurance Agents, 361 U.S. 477, 497 (1960). Rather, we have addressed the "ultimate problem" of balancing conflicting legal interests and concluded that the incremental business benefit sought by the Respondent here does not outweigh the significant harm caused to employee rights.

Nor can our holding today be construed as circumscribing the Respondent's legitimate employer prerogatives in any meaningful way. The Respondent may--as in this case--lawfully lock out its employees and press its bargaining demands by continuing to operate effectively its business via the use of temporary replacements or temporary subcontract. The Respondent, in addition, may lawfully subcontract bargaining unit work, after satisfying its bargaining obligations, following the resolution of the lockout. Fibreboard Paper Products v. NLRB, 379 U.S. 203 (1964). [*104]

C. The 8(a)(5) Implementation Allegations

The judge found that the Respondent violated Section 8(a)(5) and (1) of the Act by unilaterally implementing its permanent subcontracting proposal, reasoning that the Respondent's unlawful failure to furnish the Unions with requested information precluded the existence of a legally cognizable impasse. In its exceptions, the Respondent argues, inter alia, that any violation it may have committed with respect to its withholding of information did not taint the negotiations over subcontracting prior to the implementation of its proposal. Referring to the complaint allegation (admitted in its answer) that its permanent subcontracting proposal was a mandatory subject of bargaining, the Respondent contends that after bargaining to impasse it was privileged to implement the proposal. We affirm the judge's unfair labor practice finding, but we find it unnecessary to rely on her rationale.

It is of course true, as the Respondent argues, that as a general rule an employer, after bargaining to a good-faith impasse, may unilaterally institute changes in terms and conditions of employment that are reasonably comprehended within its pre-impasse proposals. [*105] E.g., Taft Broadcasting Co., 163 NLRB 475, 478 (1967), ptn. for review denied sub nom. Television Artists AFTRA v. NLRB, 395 F.2d 622 (D.C. Cir. 1968). Because the Act only compels bargaining, not agreement, the impasse rule frees an employer to make changes necessary to the running of the business enterprise once negotiations have reached a deadlock. However, as discussed in the preceding section, the change the Respondent implemented in the instant case violated Section 8(a)(3) and (1) of the Act because it was inherently destructive of employee statutory rights and was not justified by business considerations.

Although the Board has frequently held that an employer is not exempt from bargaining over an employment-related decision that violates Section 8(a)(3) and (1) of the Act, e.g., Hydro Logistics, 287 NLRB 602 (1987), enfd. sub nom. NLRB v. Wizard Method, Inc., 897 F.2d 1233 (2d Cir. 1990); Strawsine Mfg. Co., 280 NLRB 553 (1986), the Board does not appear to have addressed the question of whether after engaging in such bargaining an employer may unilaterally implement its decision without violating Section 8(a)(5). Having been squarely presented with the [*106] issue here, we have little difficulty in concluding that the Respondent was not free to implement unilaterally its permanent subcontracting proposal under the impasse rule, because the implementation was not a legitimate change in employee terms and conditions of employment but rather an independent violation of the Act. Conduct violative of Section 8(a)(3) of the Act cannot be equated with a lawful business decision. n49

n49 Cf. Central Transport, 306 NLRB 166, 167 (1992) ("Discrimination on the basis of antiunion animus cannot serve as a lawful entrepreneurial decision."), enf. denied on other grounds 997 F.2d 1180 (7th Cir. 1993).

Further support for our finding of an 8(a)(5) implementation violation is provided by Supreme Court precedent explaining that in cases of unilateral action "the real injury . . . is to the union's status as bargaining representative." NLRB v. C & C Plywood Corp., 385 U.S. 421, 429 fn. 15 (1967). Here, the nature of that injury has been extensively examined in the preceding section. In sum, because we have already found that the implementation of the permanent subcontracting proposal violated Section 8(a)(3) on the ground that it was inherently [*107] destructive of employees' statutory right "to bargain collectively through representatives of their own choosing," it logically follows that the Respondent's unilateral action derivatively violated Section 8(a)(5) for the same reason.

We have carefully considered the Respondent's contention that it was nevertheless privileged to implement the permanent subcontracting proposal because the Unions unlawfully conditioned bargaining on their pooled voting strategy, citing in support the Board and court decisions in Louisiana Dock Co., 293 NLRB 233 (1989), affd. in relevant part 909 F.2d 281 (7th Cir. 1990). n50 The Board held in Louisiana Dock that the union unlawfully conditioned bargaining on recognition of a single, multisite bargaining unit, where the parties' collective-bargaining agreement and bargaining history established that the union had rather been recognized as the representative in multiple, distinct units at several different facilities. The Board held that since the union conditioned bargaining on recognition of a unit other than the recognized unit, the employers had no duty to comply with this demand, and the Respondent's unilateral implementation of previously [*108] proposed changes in job classifications, wage rates, and other matters did not violate Section 8(a)(5) and (1) of the Act. The Seventh Circuit denied the union's petition for review and affirmed the Board's finding that the union had unlawfully conditioned bargaining.

n50 For the reasons set forth supra, we find without merit the Respondent's contention that it was privileged to implement the proposal because the Unions assertedly refused to bargain over the permanent subcontracting proposal.

The Respondent contends here that the Paperworkers' pooled voting strategy was unlawful, citing in support a Board decision finding unlawful a pooled voting arrangement employed by the UPIU against the Respondent at facilities not involved in the instant case. See Paperworkers Local 620 (International Paper Co.), 309 NLRB 44 (1992). n51 The Respondent submits that the voting pool in the instant case is virtually identical to the one found to be unlawful, and that the Unions' insistence on the pooled voting arrangement as a condition of bargaining excused the Respondent from any obligation to bargain and privileged it to implement the permanent subcontracting proposal. We need not decide [*109] this issue, because we find that it was untimely raised.

n51 See also Paperworkers Locals 1009, 1973 and 98 (Jefferson Smurfit Corp.), 311 NLRB 41 (1993).

The Respondent failed to raise before the judge its contention that the voting pool was unlawful. Our review of the proceeding before the administrative law judge, including the Respondent's 167-page opening brief and its 221-page reply brief, establishes that the Respondent did not argue that it was privileged to implement the permanent subcontracting proposal because the Unions unlawfully conditioned bargaining on the pooled voting arrangement. Nor did the Respondent even cite Louisiana Dock, upon which it so heavily relies on on its exceptions. Rather, the Respondent argued at length below that the pooled voting arrangement as a practical matter precluded execution of an agreement at Mobile pending resolution of the disputes at the other pooled locations. The crux of the Respondent's argument below was accordingly that the pooled voting procedure obstructed resolution of the Mobile dispute regardless of the effect of the permanent subcontract, rendering a backpay award inappropriate in this case. This contention [*110] was fully argued by the Respondent, opposed by the General Counsel and the Charging Parties, and considered and rejected by the judge. n52

n52 We note that, in the amended remedy section of this decision, we, too, fully consider the Respondent's central argument that the pooled voting stratagem prolonged the lockout and precluded a settlement until October 1988, thereby rendering a backpay award inappropriate.

Thus, while the Respondent correctly argues that it has consistently objected to the assertedly obstructive effects of the voting pool, it did not argue that the pool was unlawful and privileged its implementation of the permanent subcontracting proposal. n53 This defense was accordingly not considered by the administrative law judge, and it is inappropriate to be considered for the first time upon exceptions to the Board. See Auto Workers Local 594 v. NLRB, 776 F.2d 1310, 1314 (6th Cir. 1985) ("Since the Union failed to raise this issue in a timely fashion before the ALJ, we hold that it waived this defense."), enfg. 272 NLRB 705 (1984); Operating Engineers Local 520 (Mautz & Oren), 298 NLRB 768 fn. 3 (1990); Yorkaire, Inc., 297 NLRB 401 (1989) ("A contention [*111] raised for the first time in exceptions to the Board is ordinarily untimely raised and, thus, deemed waived."), enfd. 922 F.2d 832 (3d Cir. 1990); Camay Drilling Co., 254 NLRB 239, 240 fn. 9 (1981)("To determine an issue of this magnitude when it is raised for the first time [by the General Counsel] as a post-hearing theory would place an undue burden on Respondent and deprive it of an opportunity to present an adequate defense."), enfd. sub nom. Operating Engineers Pension Trust v. NLRB, 676 F.2d 712 (9th Cir. 1982).

n53 The Respondent cites only one reference--in a footnote--in its voluminous briefs below to demonstrate that it argued that the pool was unlawful. We note that even this single reference does not explicitly mention the pooled voting arrangement, but rather provides that "by refusing to sign a contract at Mobile until strikes terminated in other bargaining units, the UPIU was committing a blatant unfair labor practice." (emphasis in original.)

The Respondent argues, however, that the decision in Paper Workers Local 620 (International Paper Co.), holding a pooled voting arrangement to be unlawful, did not issue until after the judge's decision in [*112] the instant case, somehow disabling the Respondent from raising before the judge the contention that the instant voting pool was unlawful. This argument is disingenuous, because the Respondent itself filed unfair labor practice charges challenging pooled voting in Paper Workers Local 620 (International Paper Co.) before the hearing closed in this case. Yet, the Respondent never raised this contention to the judge either before or after the hearing's close. n54 Thus, in light of the Respondent's failure to timely raise the issue, we need not decide whether the pooled voting arrangement was unlawful, and, if so, whether it would privilege the Respondent to unilaterally implement changes in employee terms and conditions of employment that violate Section 8(a)(3) and (1) of the Act.

n54 The Respondent further contends that, even assuming that it failed to timely raise its contention that the pool was unlawful, the operative facts underlying its theory were litigated before the judge. Although, as noted above, the facts concerning the operation of the pool were indeed litigated before the judge, the affirmative defense that the pool was unlawful was never raised by the Respondent or addressed by any of the parties or by the judge. The Respondent's tardy raising of this defense deprived the General Counsel and the Charging Parties of the opportunity to present evidence as to (1) whether the voting pool procedure was unlawful; and (2) whether an adequate nexus existed between the allegedly unlawful conduct of the Unions and the unilateral changes imposed by the Respondent. We cannot conclude in these circumstances that the Respondent's theory that the voting pool was unlawful was sufficiently litigated below to warrant consideration upon exceptions. [*113]

VI. CONCLUSION

We accordingly find, for all the foregoing reasons, that the Respondent, by its conduct at issue in this case, violated Section 8(a)(1), (3), and (5) of the Act.