The National Labor Relations Board seeks enforcement of its October 31, 1994 order finding Triple A Fire Protection, Inc. in violation of sections 8(a)(1) and (5) of the National Labor Relations Act for unilaterally ceasing to make payments to fringe benefit plans, unilaterally reducing wage rates of bargaining unit employees, and directly dealing with employees outside the formal bargaining process. 29 U.S.C. §§ 158(a)(1) and (5). The employer argues in its defense that the union never represented an uncoerced majority, that an impasse existed, that the union bargained in bad faith, and that an economic emergency justified their departure from the formal system of labor negotiations. We find substantial evidence to support the Board’s findings and enforce its order.
I. BACKGROUND
Triple A Fire Protection, Inc. (“Triple A”) was formed in 1983 by Alton Turner (“Turner”) and engages in the business of installing and maintaining sprinkler and fire protection systems in Mobile, Alabama. Turner holds a controlling interest in the company’s stock and his wife Lovina owns the remainder of the stock. Turner’s son Steve also works for the company as a supervisor.
Since its founding, Triple A’s employees have been represented by Road Sprinkler Fitters Union No. 669 (“Local 669”). Local 669 is headquartered in Landover, Maryland. Ronnie L. Phillips (“Phillips”) is Local 669’s regional representative and business agent in the southern district, which comprises Alabama, Mississippi, and Puerto Rico. Since 1983, Phillips has represented Local 669 in all dealings with Turner and Triple A.
In October 1983, Turner (who had himself been a long-time member of Local 669) signed an agreement to be bound by the 1982-85 national agreement between the union and the National Fire Sprinkler Association, a multi-employer collective bargaining unit. Similarly, on February 8,1984, Turner signed an “assent and interim agreement” binding Triple A to the 1985-88 section 8(f) prehire national agreement between the union and the national bargaining unit. 29 U.S.C. § 158(f). 1
In light of the uncertainty raised by Deklewa, Local 669’s business manager in Maryland mailed a letter with enclosures to Triple A. The letter stated that “[Deklewa] may throw into question the nature of the relationship between your organization and Local 669. The purpose of this letter is to solicit your, cooperation in minimizing, any possible disruption in our relationship that might otherwise be caused by the Deklewa decision.” The letter requested that Triple A sign and return a recognition form confirming the union’s status as the exclusive bargaining representative designated by a majority of Triple A’s employees pursuant to section 9(a) of the Act. The recognition form provided:
ACKNOWLEDGMENT OF THE REPRESENTATIVE STATUS OF ROAD SPRINKLER FITTERS LOCAL UNION NO. 669, U.A., AFL-CIO
The employer executing this document below has, on the basis of objective and reliable information, confirmed that a clear majority of the sprinkler fitters in its employ have designated, are members of, and are represented by, Road Sprinkler Fitters Union No. 669, U.S., AFL-CIO, for purposes of collective bargaining.
The employer therefore unconditionally acknowledges and confirms that Local 669 is the exclusive bargaining representative of its sprinkler fitter employees pursuant to Section 9(a) of the National Labor Relations Act.
Accompanying the letter, Local 669 included a copy of a recent fringe benefit report filed by Triple A with the National Automatic Sprinkler Industry Fringe Benefit Funds listing eight names, including Turner and his son Steve. Turner testified before the administrative law judge (“ALJ”) that the greatest number of workers employed in any given month was seven to eight. Alton Turner signed the recognition form on October 17,1987.
Thereafter, Turner signed an agreement to be bound by a third successive bargaining agreement running from April 1, 1988, to March 31, 1991. 5 Toward the end of this agreement, on December 14, 1990, Local 669’s business manager sent a letter to Tripie A indicating the union’s desire to negotiate another collective bargaining agreement effective April 1, 1991. The . letter warned that if a renewal contract were not reached before March 31, 1991, then “lawful economic action” could ensue on or after April 1, 1991. The letter enclosed two copies of an “Assent and Interim Agreement” which would prohibit the signatories from negotiating a separate agreement with the Union and mandating that they observe the terms of the expired agreement until the effective date of a successor agreement. Turner never signed this assent form.
During the early spring of 1991, Turner approached employees on a number of occasions to discuss both their employment with Triple A and general status with the union. In early March, Turner approached employee Jack Moiren and told him that he would receive certain benefits if the company “went nonunion.” 6 Later that month, Danny Carpenter, Cecil P. “Shorty” Davidson, and Moiren had a long conversation with Turner and his son Steve on the front porch of Triple A. 7 During the course of this discussion, Turner told Shorty that “no matter what happens you’ve got a job here for the same pay and you can pay half of your insurance.” Also that month, while visiting Carpenter’s home, Turner stated that he would not sign the union agreement, but would in any event raise Carpenter’s wage rate to the foreman level. 8
On March 18, 1991, Phillips telephoned Turner to ask him if they could get together
Also on March 21, Phillips wrote Turner expressing a need to “avert a work stoppage on April 1, 1991.” In reference to their contacts on March 18 and 19, Phillips accused Turner of refusing to. negotiate with the union. Although the union’s March 1991 newsletter indicated that some employers would be struck, Phillips instructed Triple A employees to report to work on April 1. On March 26, Turner wrote to Phillips that strike replacements would be hired according to the terms of Triple A’s proposed contract. On April 1, no strike occurred and union employees reported to work at Triple A.
On April 3, Phillips and Turner agreed to begin negotiations on April 9. 10 On April 9, the parties met to begin formal bargaining sessions at the Bradbury Inn in Mobile, Alabama. The union was represented by Clarence Radecker and Phillips. Triple A was represented by Turner and attorney Deborah H. Kehoe. At the meeting, Turner submitted a list of 23 jobs that it had bid on but lost in the past year when the bids were based on union wages and benefit cost levels. The notes of the meeting indicate that neither party really discussed these figures in much detail. The ALJ found that they did not talk long enough to indicate to the union that there was an economic emergency as the company asserts. The parties discussed Triple A’s proposed contract and tentatively approved a limited number of provisions. The union promised that it would submit counter-proposals as to several provisions during future bargaining. Although the meeting lasted much of the day, the parties accomplished little and a second meeting was scheduled for April 30,1991, the date suggested by Turner. Neither party mentioned any deadline for negotiation.
On April 12, 1991, Turner mailed a letter to the union accusing it of not “seriously address[ing]” the company’s March 21, 1991, proposal. The letter asserted that since the union had failed to submit a “meaningful proposal to Triple A,” they “[could] no longer tolerate [Local 669’s] inaction.” The company issued an ultimatum that would effectuate its proposed contract if no agreement was reached with the union prior to April 22, 1991. The letter indicated that Triple A was available to negotiate prior to this date, but firmly stated that changes would be implemented on April 22, 1991. Phillips received Triple A’s demand on April 16, 1991. Phillips wrote to Triple A on April 17 confirming the April 30 meeting.
11
As of April 22, 1997,
At the second meeting on April 30, 1991, the parties made little progress on reaching an agreement. The union, represented by Billy Littleton, objected to Triple A’s implementation of its proposal and informed the company that it actions constituted an unfair labor practice. Littleton told Turner and Kehoe that Local 669 and the company had a section 9(a) relationship which required Triple A to-bargain with Local 669 concerning the terms and conditions of the expired collective bargaining agreement until the parties reached an impasse or negotiated a new agreement. Although Triple A stated that they were willing to bargain until a new agreement could be worked out, Littleton told Triple A that he was not prepared to bargain the next day.
II. PROCEDURAL HISTORY
The Regional Director of Region 15 issued a complaint on September 27, 1991, alleging violations of sections 8(a)(1) and (5) of the National Labor Relations Act (the “Act”). 29 U.S.C. §§ 158(a)(1) and (5). On March 26, 1993, the ALJ issued a decision finding that the contract between Local 669 and Triple A was a section 8(f) prehire agreement and not a section 9(a) collective bargaining agreement.
Triple A Fire Protection,
In the supplemental decision of January 19, 1994, the ALJ found that Triple A violated sections 8(a)(1) and (5) of the Act by bypassing the proper bargaining channels and dealing directly with employees, by unilaterally reducing wage rates for bargaining unit employees, and by unilaterally ceasing to make required fringe-benefit payments to established benefit plans.
Triple A Fire Protection,
III. DISCUSSION
In reviewing a factual determination of the National Labor Relations Board, we analyze the totality of the record to determine whether the conclusion is supported by substantial evidence.
Northport Health Serv., Inc. v. NLRB,
A. CONVERSION OF THE SECTION 8(f) AGREEMENT INTO SECTION 9(a) STATUS
The Board found that the relationship between Local 669 and Triple A had been
Indeed, Triple A does not in its brief on appeal challenge the Board’s finding that the conversion to full section 9(a) status was achieved. Moreover, on these facts the NLRB has satisfied the
Deklewa
standard that a “voluntary recognition ... [be] based on a clear showing of majority support.”
Deklewa,
B. TRIPLE A’s VIOLATIONS OF SECTIONS 8(a)(1) and (5)
1. Direct Dealing
Section 8(a)(5) creates an obligation on the part of the employer to bargain with the incumbent union as the exclusive bargaining representative of its employees. “[T]he employer’s statutory obligation is to deal with the employees through the union, and not with the union through the employees.”
General Electric Company,
2. Unilateral Changes
The Board has taken the position that allowing employers to make unilateral changes in the terms and conditions of employment which are subject to negotiation would decrease the ability of parties to bargain effectively.
Litton Financial Printing, Div. v. NLRB,
In this case, the Board adopted the ALJ’s findings that Triple A violated sections 8(a)(5) and (1) of the Act by ceasing to make contributions to the pension and benefit funds. The record supports this finding. On April 9, Local 669 and Triple A met for the first formal bargaining session following the expiration of the collective bargaining agreement. The parties read over Triple A’s proposed contract and Local 669 submitted its own minor suggestions. At this meeting, Triple A submitted to Local 669 a list of 23 jobs that it had bid for in the last year and not received, allegedly due to the union wage and benefit levels. Although the parties met for much of the day, excluding breaks and lunch, they made little progress, but agreed to meet again in about three weeks, on April 30.
Three days later, the employer sent the union a letter indicating that it would stop making payments to the employee pension and health funds on April 22. The union representative received the letter on April 16 and responded merely by affirming the April 30, 1991, meeting. On April 22, 1991, the employer ceased funding the plans. Similarly, the employer admitted in its answer that following April 21, 1991, employees were hired at wage rates not specified in the expired collective bargaining agreement. At the meeting on April 30, 1991, the union representative objected to the employer’s unilateral implementation of its own plan. Wé find that this evidence substantially supports the findings reached in the Board’s order.
C. TRIPLE A’S DEFENSE: THE MA- ’ JORITY WAS COERCED.
Triple A’s .first defense is that Local 669 never represented an uncoerced majority of its employees because the 1988-91 National Agreement discriminated in favor of union members, and thus was coercive. The gist of Triple A’s argument is that various provisions in the collective bargaining agreements which the parties have signed over the years (and in the union constitution) discriminate in favor of union membership, and thus the union majority which existed at the time of the October 1987 voluntary recognition was a coerced majority. The Board did not address the merits of this challenge to Local 669’s majority status, because it found that section 10(b) and the Board’s Deklewa decision foreclosed this defense. 29 U.S.C. § 160(b).
It has long been recognized that section 10(b) prohibits employers from waiting more than six months to attack the majority status of union representation at the time of recognition.
14
In 1960, the Supreme Court so held in
Local Lodge No. 1424 (Bryan Mfg. Co.) v. NLRB,
In this case, the Board held that its decision in
Deklewa
had established that unions in the construction industry which had achieved full section 9(a) recognition should not have less favored status than unions outside the construction industry. Thus, the Board held that the six-month limitations period of section 10(b) was applicable and that a challenge to a union’s majority status would not be entertained after a lapse of more than six months. We hold that the Board’s interpretation is reasonable. As discussed above, the relationship between Local 669 and Triple A in this case was converted to full section 9(a) status by the October 1987, voluntary recognition. Under
Deklewa,
Local 669 thus enjoyed section 9(a) status, just as any other union outside the construction industry.
Deklewa,
Applying section 10(b) to the facts of the instant case, the Board declined to entertain the merits of Triple A’s challenge to Local 669’s majority status because Triple A waited almost four years after the October 1987 voluntary recognition to object. We find no error in the Board’s application of the section 10(b) bar to the facts of this case.
15
Accord MFP Fire Protection, supra,
at 1343;
see álso NLRB v. Viola Industries-Elevator Div., Inc.,
After applying section 10(b) pursuant to the
Deklewa
mandate that unions in the construction industry which had achieved full section 9(a) status should not have less favored status than unions outside the construction industry, the Board in the instant case cited
Casale Industries,
D. TRIPLE A’s OTHER DEFENSES
As the administrative law judge noted, an employer may rebut a showing that
Triple A argues in its defense that the negotiations had reached an impasse at the time it made its unilateral changes. As this court has stated, an “[i]mpasse is a deadlock in negotiations and presupposes [good faith] negotiations.”
Electric Machinery Co. v. NLRB,
At the point Triple A decided to institute its unilateral changes, there had been only one formal session to discuss the respective positions of the parties. The negotiations were still in a stage of exploration, as both sides were still reading and considering the positions of the other party. Triple A did not even have possession of a full union proposal for its consideration. Although Triple A argues that the union’s failure to submit a full-length proposal at this early point in the bargaining process indicated their bad faith, and a “take-it-or-leave-it” approach, the union had submitted counter-proposals at the April 9 meeting and had specifically agreed te» continue negotiations in the future. When Triple A mailed the letter to the union on April 12 indicating that it was going to make unilateral changes, and when it actually made such changes on April 22, the parties had already agreed to a bargaining session later in the month. We readily conclude that there is substantial evidence in the record as a whole to support the finding that the parties had not reached an impasse in bargaining. 18
Triple A argues that, in the event that this court finds that an impasse did not exist at the time unilateral changes were made, an exception to the rule of impasse applies in this case. Triple A asserts that when, upon expiration of a collective bargaining agreement, the union unreasonably delays or stalls the bargaining process, the employer may make unilateral changes without bargaining to impasse if it first notifies the union of its intent to make these changes.
See NLRB v. Pinkston-HoUar Construction Services, Inc.,
Triple A contends that
Pinkstonr-Hollar
supports its argument that a waiver of rights occurred. However, the facts of
Pinkston-Hollar
are very different from those of the instant ease. In
Pinkston-Hollar,
the employer and the union had conducted months of formal bargaining sessions. Finally, after informing the union of its interest in considering a new benefits package, and after several unsuccessful attempts to get a copy of
Here, the negotiations had barely begun. Local 669 was not found guilty of delay, and in- fact there was only minimal delay before Triple A instituted unilateral changes. Moreover, Triple A’s April 12, 1991, ultimatum was not comparable to the Pinkston-Hollar notice. Triple A’s letter gave only ten day’s advance notice, and only six days from Local 669’s receipt. Moreover, the April 30 negotiation session had already been scheduled before the unilateral changes were announced.
We return next to Triple A’s waiver argument. In concluding that the union did not waive its statutory right to bargain over any terms and conditions of employment, the administrative law judge relied on the Board’s decision in
Bottom Line Enterprises,
Finally, we find no merit to Triple A’s contention that its economic situation justified the unfair labor practices. A situation of economic necessity requires either a showing of “extenuating circumstances” or a “compelling business justification” that is not present here.
Winn-Dixie Stores,
IV. CONCLUSION
In the instant ease we find substantial evidence to support the Board’s conclusion that Triple A violated sections 8(a)(1) and (5) of the Act by directly dealing with employees outside the bargaining process, by unilaterally ceasing to make payments to the fringe benefit plans, and by unilaterally reducing the wage rates for bargaining unit employees. We find no error in the Board’s decision applying section 10(b) and declining to address the merits of Triple A’s coerced majority defense. We also find no merit to the employer’s defenses regarding impasse, bad faith, or economic necessity.
The Board’s order is ENFORCED.
Notes
. Section 8(f) authorizes prehire contracts between employees and unions in the building and construction industries. Under section 8(0, an employer may enter into a prehire agreement with a union before a majority of employees has approved the union as its bargaining representative. This sanctioning of prehire agreements is an exception to the general rule of the National Labor Relations Act that guarantees employees the right to select their own bargaining representatives. Normally, in industries other than the construction industry, a union must be elected by a majority of the employees within a bargaining unit before that union can have ■ the right to represent employees in the formal bargaining process pursuant to section 9(a). 29 U.S.C. § 159(a).
Section 8(f) was created to deal with problems unique to the building and construction industries. Prior to the creation of section 8(0, the National Labor Relations Act prohibited employers from bargaining with an uncertified union and, under the Act, a union could not be certified as a bargaining representative until after employees were hired. Since the nature of the con
. The
pre-Deklewa
cases permitted conversion to full section 9(a) status merely by showing that the union enjoyed' majority support among the relevant employees at virtually any time after signing a section 8(f) agreement.
Deklewa,
. The Board wrote that "[i]n light of the legislative history and the traditional prevailing practice in the construction industry, we will require the party asserting the existence of a 9(a) relationship to prove it."
Deklewa,
We do not mean to suggest that the normal presumptions would not flow from voluntary recognition accorded to a union by the employer of a stable work force where that recognition is based on a clear showing of majority support among the unit employees, e.g., a valid card majority. That is, nothing in this opinion is meant to suggest that unions have less favored status with respect to construction industry employers than they possess with respect to those outside the construction industry.
Id. at 1387 n. 53 (citation omitted).
. It should be noted that this circuit has previously declined to specifically address
Deklewa. See Local Union 48 Sheet Metal Workers v. S.L. Pappas & Co., Inc.
. The 1988-91 collective bargaining agreement contained a recognition clause which stated:
Recognition: The National Fire Sprinkler Association, Inc. for and on behalf of its contractor members that have given written authorization and all other employing contractors becoming signatory hereto, recognize the Union as the sole and exclusive bargaining representative of all Journeyman Sprinkler Fitters and Apprentices in the employ of said Employers, who are engaged in all work as set forth in Article 18 of this Agreement with respect to wages, hours and other conditions of employment pursuant to Section 9(a) of -the National Labor Relations Act.
. Specifically, Moiren testified before the administrative law judge that Turner promised him the equivalent of union wages, raises at the same time as union employees, and continued use of the company truck with gas paid.
. Danny Carpenter testified that he would occasionally drink beer with Turner. He also testified that, on one occasion in late February or early March, Turner approached him, Moiren, and Philip Alan Thames while they stood on the front porch of Triple A and told them that, in the event that he did not sign the National Agreement, he would guarantee them a foreman’s job, paid insurance, and a truck.
. In March, 1991, Alton Turner’s son Steve Turner approached Thames and promised him continued employment at $14.00 per hour with paid insurance if the company "did not sign the contract.” In addition, Steve Turner alluded to the creation of a retirement or profit-sharing plan for the benefit of employees.
Sí. Without Phillip's knowledge, Turner tape recorded this conversation. The administrative law judge excluded a transcript of this and another conversation from evidence. The appellant argues that these transcripts should not be excluded from evidence. We have reviewed the excluded transcripts and cannot conclude that the exclusion affected any substantial rights of Triple A. The company apparently complains about the denial of some impeaching evidence which we do not find significant. Thus, we need not address the legal issue raised by Triple A.
The other evidentiary issues raised by Triple A are without merit and warrant no discussion.
. On April 4, Turner wrote Phillips to confirm the meeting of April 9. This letter indicated that Turner had not received Local "669’s counterpro-posal to Triple A’s complete contract submitted in late March. Turner expressed an interest in having the union’s counter-proposal sent to him by express mail so that he could review it before the April 9 meeting. On April 5, Phillips sent his own confirmation letter to Turner (apparently crossing Turner’s letter in the mail). Phillips stated in this letter that he had some questions about Triple A’s proposal and that he had some of his own contract proposals to add to negotiations on April 9.
. Before the administrative law judge, Phillips testified that he "didn’t see any reason to change th[e] date” that the parties had formerly agreed upon to sit down and negotiate a new agreement. He didn’t specifically respond to the letter sent by Triple A, because he thought Triple A was trying to "set me up for something that I didn’t understand.”
. Some of the Board's decisions following
Dek-lewa
seem to suggest that the Board might be applying a kind of estoppel doctrine, so that an employer that voluntarily recognizes a union based solely on the union’s assertion of majority status is thereafter limited in its freedom to repudiate same, even though the employer did not actually verify the majority status at the time.
See Hayman Electric,
. Consistent with Triple A's failure to argue that there was no conversion to full section 9(a) status, Triple A does not argue that there was merely a section 8(f) relationship, and thus upon expiration of the agreement, Triple A had no duty to bargain or other obligations to Local 669.
.
See NLRB v. Viola Industries-Elevator Div.,
. Section 10(b) bars Triple A’s challenge to the majority status of Local 669 as of October 1987. We note, however, that section 10(b) does not léave a company without other remedies if a union no longer enjoys majority status. For example, one treatise states:
An employer may withdraw recognition from an incumbant union at any time when such withdrawal is not precluded by law, if it can affirmatively establish either (1) that the union no longer enjoyed majority status when recognition was withdrawn, or (2) that the withdrawal was predicated on a reasonably grounded doubt as to the union’s continued majority status, which doubt was asserted in good faith, based upon objective considerations, and raised in a context free of employer unfair labor practices.
1 The Developing Labor Law 571 (Patrick Hardin et al. eds., 3rd ed.1992) (footnote omitted). In the instant case, Triple A makes no such argument.
. Deklewa was decided on February 20, 1987, before the relevant events in this case. Thus, Triple A’s discussion of cases questioning the retroactivity of Deklewa is not relevant to this case.
. In
Bonner v. City of Prichard,
. Triple A also argues in defense of the unfair labor charges that Local 669’s bad faith justified its unilateral changes. The company asserts that, from the beginning of negotiations, the union had absolutely no intention of entering into an agreement separate from the National Agreement negotiated with the multi-employer collective bargaining unit. The union simply expected Triple A to sign onto the National Agreement as it had on three previous occasions. In support of its allegation of bad faith, Triple A produced evidence of Phillips’s behavior at the April 9 meeting, the union’s failure to bring a cómpre-hensive counter-proposal to the first meeting, and the union's history of relying upon the National Agreement. The company also argues that the union representatives simply read aloud the company proposal at the April 9 negotiating session.
At the initial April 9 meeting, the union examined the employer's proposal and displayed a willingness to extract all references from its own counter-proposals to the multi-employer bargaining unit. Furthermore, while Phillips himself had never negotiated an agreement separate from the National Agreement, he testified that Local 669 had negotiated agreements separate from the National Agreement. While the record contains conflicting evidence (with inferences of bad faith on the part of both parties), we cannot conclude that the ALJ's finding is without substantial support in the record. Accordingly, we reject Triple A’s bad faith defense.