Court Opinion

ID: 6991055
Source: CourtListenerOpinion
Date Created: 2022-07-24 03:25:00.483064+00
Date Added: 2024-06-11T16:09:36.127642
License: Public Domain

NIEMEYER, Circuit Judge,
concurring in part and dissenting in part:
I concur- in Part IV of the majority’s opinion and dissent from the remainder.
On the principal question presented for review in this case — whether the parties to collective bargaining negotiations reached an impasse thereby entitling the company to implement its final contract offer made to the union — the majority opinion collapses the issues in negotiation without focusing on the two issues which were essential to agreement and on which no progress was made during negotiations. For legitimate business reasons, the company in this case determined (1) that it had to control the targeting of authorized wage reductions to meet nonunion competition without any union veto and (2) that the targeting had to be authorized by the collective bargaining agreement at a fixed, uniform rate. When the eye is kept on these issues during the negotiations, the conclusion follows, by a straight-forward application of governing law, that an impasse was reached in this case. I would for that reason grant the company’s petition for review and deny the union’s cross-petition for review.
I
Grinnell Fire Protection Systems Company (“Grinnell”), a subsidiary of Tyco International Ltd. (“Tyco”), designs, manufactures, and installs fire sprinkler systems throughout the United States and is the largest such business in the country. Grinnell’s employees have been represented by several locals of the United Association of Journeymen and Apprentices of the Plumbing and Pipefitting Industry of the United States and Canada (“the International Union”), and the largest of these is Local 669 (sometimes “the Union”), which represents approximately 1,200 Grinnell employees in 47 states. Until September 1993, Grinnell was represented in collective bargaining negotiations by the National Fire Sprinkler Association (“NFSA”), a multi-employer trade association consisting of about 150 companies. The last contract negotiated for Grinnell by the NFSA was effective from April 1, 1991, through March 31, 1994.
In September 1993, more than six months before the expiration of its contract with the Union, Grinnell gave the Union written notice by letter that it was revoking the NFSA’s authority to bargain on its behalf and wished to negotiate independently with the Union for a new contract. During the 1990s, Grinnell became concerned about its profits and declining market share and believed that NFSA was either “unwilling or unable” to do what was necessary to control costs and keep unionized contractors competitive. Indeed, to stem the loss of business to nonunion contractors, Local 669 had instituted *203a job “targeting” program which allowed Grinnell, as well as other signatories to the NFSA agreement, to negotiate concessionary wage rates with the Union on a project-by-project basis to meet nonunion competition. Under the program, however, the Union retained discretionary control over the decision to grant or deny an employer’s request to target a particular project with a concessionary wage rate. Grinnell had been the principal user of the targeting program until May 1993, when the Union added the requirement that a company wishing to participate in the targeting program had to commit to be bound by the next NFSA multi-employer collective bargaining agreement. When Grin-nell refused to agree to this condition, the Union denied the company participation in the targeting program. In July 1993, after Local 669 elected a new business manager, that manager reinstated Grinnell as a participant in the targeting program, but the Union again excluded Grinnell from the program after Grinnell withdrew from the NFSA authority to negotiate a collective bargaining agreement on Grinnell’s behalf.
In its September 22 letter to the Union, Grinnell expressed its wish to begin negotiations “immediately to reach an agreement that is competitive and provides in the future for full employment for our Company’s employees and your union members.” Less than two months later, on November 12, 1993, Grinnell’s representatives met informally with the Union and outlined the contours of Grinnell’s bargaining position in preparation for formal contract negotiations. Grinnell described a need to make changes to remain competitive in the face of changing local market conditions. It indicated that it would seek, among other things, to pay wages competitive with the local markets in which the company operated, to employ - on certain projects a higher ratio of unskilled workers to skilled journeymen, to pay lower contributions to the health and welfare plan, and to freeze the current pension plan and institute a 401(k) plan. Grinnell and the Union agreed to begin formal negotiations at a meeting they scheduled for January 18,1994.
Before the next meeting, however, controversy developed within Local 669, leading its president and secretary-treasurer to ask the International Union to place the local in trusteeship. The International Union appointed Tommy Preuett to serve as trustee of Local 669. Because of these internal difficulties, the Union canceled the scheduled January negotiating session with Grinnell. Grinnell, which had become aware of the Union’s internal problems, sent a written proposal to the Union in lieu of attempting at that time to schedule a bargaining session. This “1st Proposal for a New Collective Bargaining Agreement” was accompanied by a letter in which Grin-nell stated:
Although the unionized companies in our industry have had some good years, it is clear that we are headed for a steep, decline if we don’t make some changes now. The figures throughout the U.S. show that we are losing market share to our non-union competition. This is because our overall labor costs under the Local 669 contract are so much higher than what our competition is paying. Wages in some locations, health care costs and our inability to effectively use apprentices and helpers present major problems for Grinnell.
The proposal included a provision that would give Grinnell control over the wage rate, within a specified range, to pay journeymen in each state to meet nonunion competition. Grinnell’s choice of wage rates from within the specified range would be “a function of the local economic conditions.” This proposal differed most significantly from the previous “targeting” program that the Union had instituted by giving Grinnell, instead of the Union, the discretion to target projects with lower wage rates. Grinnell also proposed to create a new job category of unskilled “helpers,” who would be paid “as determined by Grinnell,” and the ratio of skilled fitters to *204unskilled workers could change from 2:1 to 1:1. Finally, in the area of pension and health benefits, Grinnell proposed to replace the existing National Automatic Sprinkler Industry (“NASI”) health and pension plans with Tyco’s health and 401(k) plans.
Three days after Grinnell sent the Union its first contract proposal, Grinnell’s lawyer and chief negotiator, Peter Chatilovicz, and Grinnell’s president, Jerry Boggess, met with the Union’s lawyer, William Osborne, to discuss Grinnell’s first proposal informally. Chatilovicz explained to Osborne that Grinnell was seeking “institu-tionalizefd] targeting,” which would allow Grinnell discretion unilaterally to reduce Union fitters’ wage rates to a “targeting rate” for projects on which the company faced nonunion competition. The wage-rate range within which Grinnell would be able to set a targeting rate would be specific to each state, and as set out in Grin-nell’s proposal, would have a floor fixed at 65% of the standard journeyman wage rate in each state.
Following these various informal meetings between Grinnell and the Union and Grinnell’s submission of its first proposal, which defined the main issues for negotiation, the parties conducted six formal negotiating sessions before Grinnell declared that the parties were at an impasse.
First formal negotiating session— March 17, 19%. As this was the first session, Grinnell’s president, Boggess, explained to the Union’s business manager, John Lundak, as well as Osborne and two other Union representatives, his views concerning the future of the industry, and Chatilovicz explained Grinnell’s reasons for withdrawing bargaining authority from the NFSA. Chatilovicz said that, in bargaining independently with Local 669, Grinnell was seeking an agreement that would resolve the key competition issues that it faced. He then presented Grinnell’s second proposal for agreement, which, in the area of targeting, provided for a fixed maximum wage-rate reduction to be implemented by Grinnell, in its discretion, for any project on which Grinnell faced nonunion competition. The fixed targeting rate would be no lower than 65% of the journeyman wage rate in each state. In explaining the key elements of the proposal, Chatilovicz stated that Grinnell “wanted control of targeting.” The parties did not engage in any significant negotiations concerning wages or health and pension benefits, but-they did agree to a three-year term for the next contract and discussed other issues such as inspection and subcontracting. The Union indicated that it needed time to study the proposals before discussing them further.
Second formal negotiation session— March 18, 199k: The parties again discussed Grinnell’s targeting proposal, which Grinnell then modified, increasing the minimum targeting rate from 65% to 75% of the journeyman wage rate. In response to a Union query, Grinnell indicated that, under its proposal, targeting decisions would not be subject to grievance procedures and would rest within the sole discretion of the company. But the company did allow that a Union-employer committee might be set up to review any allegations that Grinnell misused its targeting authority on particular projects. Grinnell asked for a response to its targeting proposal, and the Union responded that it did not yet have a full response. Before concluding the session, however, the Union presented a wage proposal calling for yearly increases in the hourly journeyman rate and an increase in the wage differential for foremen.
Third formal negotiating session— March 30, 199k. Before this session, the Union had rejected Grinnell’s request for a five-day renewable contract extension and had sent Grinnell a strike notice. In response, Grinnell had stated that in the event of a strike, it would hire permanent replacement workers. Also before this third session, the International Union had designated Preuett as trustee of Local 669, and he now appeared on behalf of the Union at this session. Because Preuett was a newcomer, Chatilovicz again outlined *205Grinnell’s reasons for withdrawing bargaining authority from the NFSA and the issues that were important to Grinnell, namely, the fixed minimum targeting wage rate institutionalized in the agreement at 75% of the regular journeyman rate, the 1:1 ratio of journeymen to unskilled workers, and the changes in the health and pension plans that Grinnell had proposed. Chatilovicz also expressed his concern that Preuett would reach an agreement with the NFSA that did not address Grinnell’s concerns and then would expect Grinnell to accept a similar agreement. Preuett indicated that he was at that time and in the same hotel conducting negotiations with the NFSA and that he would explore whether, based on Grinnell’s larger size, the Union could offer Grinnell some things it did not offer the NFSA contractors. On the issue of targeting, Preuett indicated that he was opposed to a uniform targeting rate because nonunion contractors could learn the rate and bid under it. When Preuett expressed concerns about the Tyco health plan, Chatilovicz responded that Grinnell was “not wedded” to it. Preuett said he had no problem with the change in the ratio of journeymen to ap-prenticemen. As they closed this session, Preuett asked for a 30-day extension of the existing contract, but Grinnell responded that it did not want negotiations to drag out for weeks and refused the request.
Fourth formal negotiating session— April 7, 199U- The Union presented Grin-nell with its first complete contract proposal. This proposal included the same wage increases that the Union had proposed at the third session and included a targeting proposal that did not grant Grinnell control over wage-rate targeting. Rather, the proposal provided that representatives of the parties would agree to a targeting wage rate, but not until after the new contract went into effect, and that Grinnell would not be guaranteed any particular rates. The Union’s proposal also called for Grinnell to continue its contributions to the NASI health and pension plans. Grinnell responded to the Union proposal, continuing to insist that any agreement include a fixed minimum targeting wage rate of 75% of the standard journey-man rate. It also proposed either the Tyco health and 401(k) plans or reduced contributions by Grinnell to the NASI plans. The parties continued to negotiate and discuss wage regimes and adjustments. While Grinnell insisted on a minimum targeting wage rate of 75% of the journeyman rate for the first year of the contract, it allowed for the possibility of rate adjustments after the first year. Grinnell, however, continued steadfastly to insist that any agreement confer on the company discretion to target wages at a fixed, uniform rate. The parties went back and forth with the proposals concerning employer contributions to the health, welfare, and pension plans: Preuett proposed successively lower employer contributions, and Grinnell proposed either the Tyco health plans or the NASI plans with further reductions in contributions. At the end of the session, Grinnell prepared a chart listing the issues the parties had yet to resolve.
Fifth formal negotiating session — April 8, 199i. The parties again discussed targeting, and Preuett proposed a regime under which Grinnell could lower wage rates on certain types of projects — commercial and residential. Chatilovicz insisted on an across-the-board targeting rate at a fixed 75% of the journeyman in wage rate, to be triggered unilaterally by Grinnell when it faced nonunion competition on a particular project. Chatilovicz explained to the Union, as recorded in notes taken at the session, “The hard news is that we are not giving [the] union control of this. We are not walking away from [the] table with [the] union in control.” Chatilovicz stated that the company’s proposal was its “final proposal” on the targeting issue. Preuett indicated that the Union was “open on ... economics,” but that it “want[ed] flexibility” and “needfed] some control of its destiny on targeting. The union sets the standard.” The parties also discussed other issues. Preuett said that his primary goal *206was that health and pension benefits be portable and uniform, if possible, among Grinnell and the other NFSA employers. Preuett asked about Tyco’s 401(k) plan and indicated he wanted to research it further. The parties agreed to meet again on April 12, 1994, and Chatilovicz asked Preuett for specific responses to Grinnell’s proposals concerning (1) health and pension benefits and (2) uniform, fixed minimum wage-rate targeting at the discretion of Grinnell for all projects with nonunion bidders.
Sixth formal negotiating session — April 12, 1991.. By this meeting the Union had reached agreement with the NFSA (on April 8), and Grinnell had become aware of the details of the agreement. Following exchanges on the issue of inspections and Chatilovicz’s charge that Preuett was “playing games,” Chatilovicz suggested that the parties employ a federal mediator to resolve the remaining issues. Preuett protested that he was not playing games, that he wanted uniformity in the industry, and that he had made proposals to accomplish this as well as concessions on several issues. Chatilovicz asked Preuett for the Union’s best proposal, expressing his understanding that Preuett was interested in uniformity and might not be able to offer Grinnell an agreement with terms different from the agreement that the Union had reached with the NFSA. Preuett brought a benefits expert to the meeting to discuss the Tyco plans and indicated that he was not prepared to discuss the plans until the expert had studied them further. On wages, Preuett stated that he wanted a wage-rate freeze with no fixed-percentage targeting reductions, again referring to the Union’s proposal, which had been incorporated in the NFSA agreement and under which commercial and residential wage rates would be lower than the standard industrial rates. After a lunch break, Chatilovicz presented Grinnell’s “fi- ■ nal proposal” on open issues. This proposal included a targeting rate fixed at 80% of the journeyman rate for any project with competing nonunion bidders; the Tyco health plan with no standard employee contribution for the first year; the Tyco 401(k) plan with a service credit; and rejection of the Union’s proposal for contributions by Grinnell to the supplemental pension fund. The Union made a counter-proposal, resubmitting its previous benefits proposals and offering reductions in wage rates for commercial projects amounting to $1.00 in 30 states and $1.50 in 17 states. Preuett later conceded that the wage rates offered to Grinnell were “close” to those incorporated in the NFSA agreement, and Chatilovicz testified that the difference between the proposal and the terms of the NFSA agreement amounted to $.50 in three states. Chatilo-vicz indicated that he would consider the Union’s last offer to be its final proposal and rejected it, saying that Grinnell was not interested in the NFSA agreement. He indicated that he would be in his office until that evening in case Preuett changed his mind. Preuett said that he had not yet made the Union’s final offer and that Cha-tilovicz was trying to push him into impasse but that he would not give up easily. The parties discussed the difference between Grinnell’s targeting wage-rate proposal and the Union’s wage-rate proposal in some of the states and then broke off the meeting.
Following the sixth formal negotiating session, during the evening of the same day — April 12 — Preuett called Chatilovicz and asked to meet again the following day. Chatilovicz inquired what the Union planned to propose, and Preuett responded that he hoped to get Grinnell to raise its proposed wage rates. Chatilovicz said that Grinnell’s proposal was its final offer and that it would not alter its proposed wage rates or benefit plans. When Preuett suggested that the parties bring in a federal mediator, Chatilovicz asked if Local 669 was willing to come down to Grinnell’s wage rates. Preuett responded that the Union would not agree to Grin-nell’s wage rates, and Chatilovicz said that, in that case, a mediator would not help *207them reach agreement. Chatilovicz stated that Grinnell’s position was carved in stone, to which Preuett responded that he hoped Grinnell would change its position and negotiations would resume later.
Later that same evening, Preuett called a nationwide strike against Grinnell, and on the following day, Grinnell declared that the parties had reached an impasse and that Grinnell was therefore implementing its final contract offer. Grinnell sent a letter to its employees dated April 13, 1994, explaining the impasse, announcing the implementation of its last proposal, and indicating that it would hire permanent replacements for striking employees.
The next day, on April 14, 1994, Local 669 and the International Union filed unfair-labor-practice charges against Grin-nell, alleging, among other things, that Grinnell failed to bargain in .good faith, unlawfully unilaterally instituted its final offer before the parties reached a good-faith impasse in their negotiations, and unlawfully discharged Union members in its April 13 letter. Based on these charges, the Regional Director of the National Labor Relations Board (“Board”) issued a complaint alleging that Grinnell had committed violations of § 8(a)(1), (3), and (5) of the National Labor Relations Act (“NLRA”), 29 U.S.C. § 158(a)(1), (3), (5).
Following a 22-day hearing, the Administrative Law Judge (“ALJ”) concluded that Grinnell had bargained in good faith before declaring an impasse but that the parties had not reached a good-faith impasse in their negotiations. Accordingly, the ALJ found that Grinnell violated § 8(a)(5) of the NLRA by implementing its final offer and that the Union strike was an unfair-labor-practice strike. The ALJ also found that Grinnell violated § 8(a)(1) of the NLRA by implying to the striking workers in the April 13 letter that they could be permanently replaced, but he recommended the dismissal of the allegation that the company had in that letter unlawfully discharged the striking employees. The ALJ recommended the entry of an order that Grinnell cease and desist from its unlawful conduct and take specified affirmative action to remedy it.
By a 2-1 vote, the Board adopted the ALJ’s finding that the parties had not reached an impasse on April 12, 1994. See Grinnell Fire Protection Sys. Co., 328 N.L.R.B. No. 76, at 1, 1999 WL 357628 (May 28, 1999). As a result, the Board found that Grinnell committed unfair labor practices when it refused to bargain further with the Union, when it unilaterally changed the terms and conditions of employment by implementing its final contract offer, and when it indicated it would hire permanent replacements for the striking workers. The Board also adopted the ALJ’s findings that Grinnell had bargained in good faith and did not effectively discharge its employees in its April 13 letter, which informed them of its plan to implement its final offer because negotiations were at an impasse. Finally, the Board found additional unfair labor practices, which Grinnell has not contested before this court.
The Board’s decision on the impasse issue relied on Preuett’s numerous representations that the Union had not yet given Grinnell its final offer and remained flexible. The Board pointed to Preuett’s “continued willingness to bargain by raising the possibility of Federal mediation” during his evening phone call to Chatilo-vicz on April 12, 1994. Id. at 2. The Board also drew support from its precedent in which no impasse had been found, despite the fact that one party at the bargaining table had asserted that it had reached its final position and the other had not yet offered specific concessions. See, e.g., Richmond Recording Corp., 280 N.L.R.B. 615, 640, 1986 WL 54002 (1986), enforced, 836 F.2d 289 (7th Cir.1987).
The dissenting Board member concluded that the majority had “misapplied the law concerning bargaining impasse in a most deleterious way.” Grinnell Fire Protection, 328 N.L.R.B. No. 76, at 4 (Hurtgen, *208dissenting). This member pointed out that “[t]he Union was unwilling to give [Grin-nell] the unilateral right to lower wages on a particular job. In addition, the Union wanted uniformity among employers.” Id. at 6. He also observed that the targeting control issue was not only a key issue for both sides but also “a matter of principle,” on which “neither party was willing to yield.” Id.
From the Board’s decision, Grinnell petitioned for review, challenging the Board’s finding that an impasse had not been reached.
The issues on which I disagree with the majority are (1) whether Grinnell prematurely declared an impasse; and (2) whether Grinnell committed an unfair labor practice by sending its April 13 letter to striking employees informing them that the negotiations had reached an impasse, that it intended to implement its final contract offer, and that it would hire permanent replacements for striking employees. I address these in turn.
II
Section 8(a)(5) of the NLRA makes it an unfair labor practice for an employer “to refuse to bargain collectively with the representatives of his employees.” 29 U.S.C. § 158(a)(5). The obligation to bargain collectively imposes a duty on an employer to meet with the representatives of his employees at reasonable times and “confer in good faith with respect to wages, hours, and other terms and conditions of employment.” 29 U.S.C. § 158(d). The obligation, however, “does not compel either party to agree to a proposal or require the making of a concession.” Id.; see also NLRB v. American Nat’l Ins. Co., 343 U.S. 395, 402, 72 S.Ct. 824, 96 L.Ed. 1027 (1952) (“The Act does not compel any agreement whatsoever between employees and employers”).
An employer’s duty to bargain in good faith obliges it “to honor the terms and conditions of an expired collective bargaining agreement pending negotiations on a new agreement.” Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539, 544 n. 6, 108 S.Ct. 830, 98 L.Ed.2d 936 (1988) (citing NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962)); see also Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 199, 111 S.Ct. 2215, 115 L.Ed.2d 177 (1991) (referring to this duty as the “unilateral change doctrine”). If parties reach an impasse in their negotiations, however, “the employer’s statutory duty to maintain the status quo during post-contract negotiations ... end[s].” Laborers Health & Welfare Trust Fund, 484 U.S. at 543 n. 5, 108 S.Ct. 830 (citing American Ship Bldg. Co. v. NLRB, 380 U.S. 300, 318, 85 S.Ct. 955, 13 L.Ed.2d 855 (1965)). An impasse occurs, and an employer’s duty to negotiate is satisfied, “when the parties in good faith reach a point in their discussions where further meetings and discussions objectively appear to be futile.” AMF Bowling Co. v. NLRB, 63 F.3d 1293, 1301 (4th Cir.1995).
On the issue of impasse in this case, we are not presented with differing factual accounts material to the question of whether an impasse occurred. Of course, when the record contains differing factual accounts, we are bound to defer to the Board’s findings of fact. See 29 U.S.C. § 160(e); Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 95 L.Ed. 456 (1951); AMF Bowling Co., 63 F.3d at 1301. But here, we have a set of historical circumstances that are essentially uncontroverted by the parties. One side, emphasizing particular facts, contends that an impasse was properly declared; the other side emphasizing other facts, contends that an impasse was not properly declared. The resolution of this issue — which amounts essentially to a determination of what facts are necessary to establish the existence of impasse — is a matter of law, on which we sustain the Board’s determination only if it is reasonable and consistent with the NLRA. See NLRB v. Yeshiva Univ., 444 U.S. 672, 691, *209100 S.Ct. 856, 63 L.Ed.2d 115 (1980); NLRB v. Peninsula Gen. Hosp. Med. Ctr., 36 F.3d 1262, 1269 (4th Cir.1994).
On the record before us, Grinnell points to facts that, it argues, demonstrate the futility of further negotiations with the Union, based on (1) the history of the parties’ negotiations, (2) Grinnell’s good-faith bargaining before declaring the impasse, (3) the lack of movement by either party on issues key to Grinnell, and (4) the indications that the Union was unwilling to offer concessions to Grinnell significantly different from those to which it had committed in its new contract with the NFSA. Grinnell disputes the Board’s conclusion that the incremental wage concessions offered by the Union on April 12, 1994, demonstrated flexibility in the Union’s bargaining position. Grinnell points out first that it did not ask for such concessions, and second that such concessions only highlight the correctness of its belief that it could expect no movement from the Union on its demand for company-controlled targeting at a uniform, fixed rate. Grinnell argues that the Union’s conduct, and the predicament it faced in bargaining with Grinnell and the NFSA separately, forecast to the company that the parties would remain unable to reach agreement on the key issues, despite the Union’s declaration of flexibility.
The Union disputes Grinnell’s assertion that the company could reasonably have believed that the Union was unwilling to offer significant concessions beyond those contained in the NFSA agreement. The Union points to the uncontroverted facts that it never offered the NFSA contract to Grinnell; that it in fact offered better wage terms to Grinnell than to the NFSA; and that it refused to grant the NFSA a “most-favored-nation” clause in its contract. The Union also argues that any delay in conducting negotiations and in the Union’s presentation of counterproposals was attributable to the internal turmoil within Local 669 and that these circumstances heightened the need for further negotiations before declaring an impasse. The Union additionally points out that the parties had made progress in their negotiations before Grinnell declared an impasse. As of April 12, 1994, the parties had resolved the majority of issues in contention and had made progress on the remaining open issues. As evidence of progress in the area of wages, the Union highlights its offer of wage concessions and its offer to “lock in” the targeting rate on an annual basis. Further, it points out that Grin-nell’s position on targeting proved to be flexible, as evidenced by changes in its proposals for a minimum targeting wage rate, from 65% to 75%, and then to 80%, of the journeyman wage rate. Finally, the Union argues that the parties’ disagreement over whether Grinnell would have contractually conferred discretion to target wages at a uniform, fixed rate was not a disagreement of fundamental principle but rather one of “simply dollars and cents,” on which movement by both sides had occurred up until the final day of negotiations.
Resolution of this case turns on whether an impasse can be based on a single issue or two and whether the objectively established facts justified Grinnell’s declaration of an impasse in this case. Even though the determination of whether an impasse was properly declared is an objective one, we nevertheless take the circumstances “from the vantage point of the parties at the time they believed an impasse was reached.” AMF Bending, 63 F.3d at 1301.
In the negotiation of a collective bargaining agreement, during which many substantial areas important to a contract between a company and a union must be resolved, movement toward agreement — or even full agreement — on most of the issues does not necessarily forecast that an agreement can be reached if there is no movement by the parties in an area of great importance to one side. Stated otherwise, if in good faith one party insists on an important point that it reasonably believes is essential to the overall agreement *210and the other party indicates an unwillingness to compromise on that point, then movement or agreement on other points essential to the agreement and one party’s expressions of a willingness to keep trying will not prevent an impasse. See AMF Bowling, 63 F.3d at 1301-02.
In this case, it was important — indeed essential — to Grinnell that it control the targeting of wages to meet nonunion competition without any Union veto and that the targeting be authorized by the collective bargaining agreement at a fixed, uniform rate. The record reveals without any doubt that this issue was of paramount importance to Grinnell from the beginning. Indeed, it was a driving factor in Grinnell’s break from the NFSA for bargaining purposes. While there was movement and flexibility from the Union in most other areas of negotiation, on this point the Union never exhibited any flexibility or presented any counterproposal that did not include a Union veto over targeting decisions. If the position adopted and insisted upon by Grinnell was important and maintained in good faith, then we must conclude that based on the circumstances an impasse was reached, because regardless of whether agreement could be reached on all other issues, if this one point could not be resolved, no overall agreement could be anticipated. Because the Union has not denied that Grinnell’s position was important to it and maintained in good faith, I readily conclude that Grinnell was entitled in the circumstances to declare impasse because there was no prospect of movement on the important point of targeting. I reach this conclusion from the following six factors contained in the record:
First, the context of the negotiations served to identify early on the issues and their importance. The basic reason why Grinnell broke from the NFSA to negotiate its own collective bargaining agreement with the Union was to obtain targeting control so as to have the ability to meet competition. Grinnell recognized that it was losing market share to nonunion competition and believed that it was headed for a steep decline if it could not change its basic method of conducting business. For that reason, some six months before the March 1994 end of the collective bargaining agreement, Grinnell notified the national trade association of which it was a member that it was withdrawing for collective bargaining purposes, and it likewise notified the Union of its decision, explaining why. This backdrop confirms objectively the legitimacy and importance of positions later taken by Grin-nell during negotiations with the Union.
Second, and most important, throughout the negotiations with the Union, Grinnell bargained in good faith, a fact found by the Board. As we noted in AMF Bowling, 63 F.3d at 1299, it “[b]ear[s] significantly on our analysis” that Grinnell bargained in good faith up to the point at which it declared the parties were hopelessly deadlocked. This finding is significant because only a genuine impasse, not a deadlock caused by the failure of an employer to bargain in good faith, permits the employer to take unilateral action on issues that are the mandatory subject of collective bargaining under the NLRA. See id.; see also Newspaper Printing Corp. v. NLRB, 625 F.2d 956, 966 (10th Cir.1980); United Fire Proof Warehouse Co. v. NLRB, 356 F.2d 494, 497 (7th Cir.1966). The Board’s finding of good faith additionally serves as a “powerful fact” in favor of Grinnell because it permits an inference that Grinnell “made a bona fide offer to reach agreement[,] ... that it was honest in its negotiating positions, and that it did not act out of any motive contrary to its stated desire to negotiate a new contract.” AMF Bowling, 63 F.3d at 1299.
Third, my conclusion that Grinnell’s declaration of impasse was justified is supported by the length of the bargaining history, which included several informal meetings and communications and six formal negotiating sessions. Despite this bargaining history, neither party was able to persuade the other to move from *211its position on the issue of whether Grin-nell would control targeting and whether targeting would be authorized in the collective bargaining agreement at a fixed, uniform rate. The lack of significant movement on a central issue through the many negotiating sessions and informal meetings tends to demonstrate that parties are deadlocked on the issue. See Taft Broad. Co., 163 N.L.R.B. 475, 478, 1967 WL 18808 (1967) (listing “the length of the negotiations” as a relevant factor in the inquiry into whether parties reached a bargaining impasse). The Union argues that the number of sessions ■was insufficient to demonstrate an impasse due to the controversy within the Union that resulted in the replacement of its chief negotiator after the second formal negotiating session. But this fact is not significant to whether Grinnell reasonably concluded that the parties were deadlocked on the targeting issue because the substance of the Union’s negotiating position on the targeting issue did not change with the imposition of the trusteeship in March 1994 and the change of Union leadership.
Fourth, neither party showed movement throughout the negotiations on the essential aspects of the targeting issue-whether Grinnell would enjoy contractual authority unilaterally to implement targeting through a nationwide, fixed targeting rate. While the Board and the Union both rely on wage-rate movement by the parties through the last formal negotiating session as evidence that further negotiations could have led to agreement on the wage issues, this reliance is misplaced because it fails to take into account the parties’ strikingly divergent positions on targeting. While the Union perhaps believed that it could convert the targeting issue to a wage issue, this fails to account for Grinnell’s position that control over targeting was both basic and essential — an issue of “extreme importance” to Grinnell. A recounting of the record reveals this.
According to the parties’ practice from November 1991 until May 1993, Grinnell would request targeting on a project-by-project basis from the Union, which had the final say both on whether targeting would occur and on the targeting wage rate. Grinnell was excluded from this program when it refused to agree to negotiate its next contract through the NFSA. In January 1994, in its first contract proposal and in a subsequent informal meeting, Grinnell conveyed to the Union its desire to have control of targeting because it was losing business to nonunion competitors. Throughout the negotiations, Grinnell did not waiver from this position. Grinnell also consistently insisted on a uniform, contractually fixed targeting rate while exhibiting flexibility on the rate amount, moving from 65% to 75%, and finally to 80%, of the standard journeyman wage rate.
In response to Grinnell’s request for control over targeting and for a nationwide, fixed targeting rate, the Union never offered a counter-proposal. At the first formal negotiating session on March 17, 1994, it requested time to study the issue. At the second session, the Union offered a wage proposal calling for yearly increases in journeymen’s wages and an increase in the wage differential for foremen, but it offered no provision for wage targeting. At the third session, the Union again made no counterproposal. When Chatilovicz informed Preuett that Grinnell considered targeting control, institutionalized in the agreement at a fixed rate of the regular journeyman rate, to be one of the important issues at stake in the negotiations, Preuett responded that he was opposed to a uniform targeting rate because nonunion contractors would be aware of the rate and could undercut it. At the fourth session, the Union proposed the same wage increases it had proposed at the second meeting and added a targeting proposal under which, after the parties formed a new collective bargaining agreement, Grin-nell and Union representatives in each district would set targeting wage rates for *212that district to become effective for the following year. But this agreement was essentially the status quo ante; it did not give Grinnell unilateral control over targeting and Grinnell would not be guaranteed a fixed, uniform targeting rate for the duration of the collective bargaining agreement. At the fifth negotiating session, while Grinnell continued to insist on a fixed, across-the-board targeting rate, the Union discussed its proposal to lower wage rates on commercial and residential, as distinct from industrial, projects. Finally, at the sixth session, the Union proposed a wage-rate freeze with no fixed targeting wage-rate reduction. While Grinnell changed its proposed fixed targeting rate again, from 75% to 80%, it continued to reject any arrangement under which the Union would be able to withhold targeting. Throughout the negotiations, the Union showed a determination to focus on wage rates and deny Grinnell the contractual authority to unilaterally implement a fixed, uniform targeting wage reduction. The lack of movement by either side during the six sessions on this targeting issue is an objective factor supporting Grinnell’s conclusion that the parties were unlikely to reach agreement on that essential issue.
Fifth, the question of whether Grinnell would enjoy contractual discretion to target wages with a fixed, uniform percentage reduction was consistently highlighted by the company as an issue of great importance. See Taft Broad. Co., 163 N.L.R.B. at 478 (identifying “the importance of the issue or issues as to which there is disagreement” as a factor relevant to the consideration of whether bargaining impasse existed). Grinnell’s emphasis of the issue during negotiations, coupled with the lack of movement over six formal negotiating sessions, persuasively demonstrates that the parties were unlikely to reach agreement and that further negotiations would be futile. See AMF Bowling, 63 F.3d at 1301-02.
Sixth, the contextual facts available to Grinnell at the time it declared an impasse in the negotiations reasonably forecast to the company that the Union was unwilling to make a proposal that differed significantly from the agreement it had formed with the NFSA. See AMF Bowling, 63 F.3d at 1299 (“If the party declaring an impasse does so in good faith and its conclusion is justified by objectively established facts, then the duty to bargain is satisfied”); Taft Broad. Co., 163 N.L.R.B. at 478 (identifying “the contemporaneous understanding of the parties as to the state of negotiations” as a factor relevant to the consideration of whether bargaining impasse existed). Because the NFSA contract did not confer control over targeting on employers and did not establish uniform or fixed wage rates to apply when an employer faced nonunion competition on a project, a conclusion reasonably available to Grinnell was that the Union would not agree to such terms in its contract with Grinnell. On several occasions, Preuett, on behalf of the Union, emphasized to Grinnell’s representatives the importance of uniformity within the industry. The concessions that the Union made in the area of wages did not significantly differ from concessions the Union made to the NFSA. The Union proposed to Grinnell the same wage structure to which it and the NFSA agreed, with wage concessions on commercial projects of $1.00 in 30 states and $1.50 in 17 states. The most the Union departed from the terms it offered to the NFSA in its contract negotiations with Grinnell, according to Chatilovicz, amounted to the additional wage concession of $.50 in three states, and Preuett conceded that the wage rates offered to Grinnell were “close” to those in the NFSA agreement. Preuett’s adherence to the terms of the NFSA agreement when making contract proposals to Grinnell, coupled with the Union’s repeated statements that it was most interested in industry uniformity, provided additional objective evidence from which Grinnell could forecast that further nego*213tiations on the targeting issue would be futile.*
In short, I conclude that the deadlock on an important issue essential to Grinnell’s assent to an agreement justified its declaration of an impasse on the entire agreement despite the fact that there was movement on other issues on which agreement could reasonably have been anticipated.
Ill
Against the background that the strike was begun over economic issues after an impasse was reached, I next consider the issue of the April 13, 1994 letter’s legality. On the day after the Union called its nationwide strike against Grinnell, Grinnell wrote its April 13 letter of explanation to its employees, a letter that the Board found violated § 8(a)(1) of the NLRA, 29 U.S.C. § 158(a)(1), because, contrary to Grinnell’s belief, the Board considered the strike to be an unfair-labor-practice strike, rather than an economic strike. It concluded that Grinnell’s statement in the letter that it would hire permanent replacements unlawfully threatened employees because, in an unfair-labor-practice strike, striking employees cannot be permanently replaced. Grinnell petitions for review of this ruling, arguing principally that the strike was not an unfair-labor-practice strike but an economic one and that its statement about hiring permanent replacements was an accurate statement of the law.
The Union also seeks review of the Board’s findings with respect to the April 13 letter because the Board rejected its arguments that the letter effectively terminated striking employees in violation of § 8(a)(1) and (a)(3) of the NLRA, 29 U.S.C. § 158(a)(1), (3). The Board adopted the ALJ’s conclusion that the letter did not effectively terminate striking employees because “there was no mention of a deadline and nothing to indicate that replacements had already been hired or that the process of hiring replacements had begun.” Cf. Noel Foods Div., 315 N.L.R.B. 905, 907-08, 1994 WL 706201 (1994), enforcement denied in relevant part, 82 F.3d 1113 (D.C.Cir.1996); American Linen Supply Co., 297 N.L.R.B. 137, 137, 1989 WL 224441 (1989), enforced, 945 F.2d 1428 (8th Cir.1991). The Union now argues that the letter “constructively” discharged striking employees.
The letter, dated April 13, 1994, which was sent to all of Grinnell’s employees, states in pertinent part:
Over the past month, we have tried to keep you informed about our negotiations with Local 669. Although we met with the Union on April 7, 8, and 12, the parties were unable to reach an agreement and are now at impasse.
Because we have reached impasse in our negotiations and feel so strongly about the changes we have proposed, we are putting into effect the terms of our final offer, effective Thursday, April 14, 1994.
We just learned that the Union has called a strike against Grinnell. Although the Union has the right to strike, Grinnell has the right to run its business. Grinnell must do so in order to meet its commitments to its customers and to keep these customers from going elsewhere. We also have an obligation to those employees who want to work.
Each of our employees has the right to work and may do so even though a strike has been called.
‡ $ ‡ ‡ ‡ ‡

*214
If some of our employees strike, we will hire permanent replacements to perform our work. Permanent replacements have the right to work even if a strike ends.

(Emphasis added).
Because I would have concluded that the parties did reach an impasse and that the strike was an economic one, I would reverse the findings of unfair labor practices stemming from the Board’s conclusions that the parties were not at an impasse, including the Board’s finding that the April 13 letter violated § 8(a)(1) of the NLRA. I would also reject the Union’s position that the letter constructively discharged the employees in violation of § 8(a)(3). See 29 U.S.C. § 158(a)(3) (prohibiting “discrimination in regard to hire or tenure of employment ... to encourage or discourage membership in any labor organization”).
We have recognized constructive discharge in violation of § 8(a)(3) of the NLRA “[wjhere an employer deliberately makes an employee’s working conditions intolerable and therefore forces him to quit his job because of union activities or union membership.” NLRB v. CWI of Maryland, Inc., 127 F.3d 319, 328 (4th Cir.1997) (quoting J.P. Stevens & Co. v. NLRB, 461 F.2d 490, 494 (4th Cir.1972)). Accordingly, Grinnell’s letter would violate § 8(a)(3) only if (1) Grinnell knew that its implementation of its final contract offer would amount to intolerable changes in working conditions and (2) it implemented the changes and sent the letter to discourage its employees’ union activities.
I agree with the Board that the first element is lacking in this case. There is simply no evidence that Grinnell’s implementation of its final contract offer was intended to force its employees to quit or that it created such intolerable working conditions as to make it foreseeable that the employees would quit. The final contract proposal did reduce the employees’ wages and change their benefits, but, as the ALJ found, the resulting package was similar to that of Grinnell’s nonunion workers. As such, I could not conclude that the implementation of the final contract proposal created intolerable working conditions.
IV
Because I would conclude that the Board erred in finding that the negotiations between Grinnell and the Union had not reached an impasse on April 12,1994,1 would grant Grinnell’s petition for review and deny the Board’s cross-application for enforcement on the impasse issue and on the unfair labor practices stemming from the allegation that the parties had not reached an impasse. I would also deny the Union’s cross-petition for review of the Board’s finding that the April 13 letter did not amount to an effective discharge of employees. We grant the Board’s cross-application to enforce its order insofar as it finds that Grinnell bargained in good faith up to the point at which it declared an impasse and that Grinnell did not constructively discharge its employees.
To this extent, and for the reasons given, I respectfully dissent.

 While not evidence of whether, at the time, an impasse was properly declared, it is nevertheless worth noting that Grinnell attempted to present evidence before the ALJ that the parties continued to meet on three further occasions, after impasse was declared, to overcome the obstacle of targeting control and were unable to do so, notwithstanding the increased pressure exerted by the Union's strike.