Thrifty Payless, Inc. v. NLRB

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued September 8, 2023 Decided November 3, 2023

No. 22-1204

THRIFTY PAYLESS, INC., D/B/A RITE AID,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

UNITED FOOD AND COMMERCIAL WORKERS LOCAL

8-GOLDEN STATE,

INTERVENOR

Consolidated with 22-1241

On Petition for Review and Cross-Application

for Enforcement of an Order

of the National Labor Relations Board

Stephen M. Silvestri argued the cause for petitioner. With

him on the briefs was Alana R. Glover.

Heather Beard, Attorney, National Labor Relations Board,

argued the cause for respondent. On the brief were Jennifer

2

Abruzzo, General Counsel, Ruth E. Burdick, Deputy Associate

General Counsel, David Habenstreit, Assistant General Counsel,

Milakshmi v. Rajapakse, Supervisory Attorney, and Jared D.

Cantor, Senior Attorney.

Richard Treadwell was on the brief for intervenor United

Food and Commercial Workers Local 8-Golden State in support

of respondent.

Before: WALKER and GARCIA, Circuit Judges, and

RANDOLPH, Senior Circuit Judge.

Opinion for the Court filed by Senior Circuit Judge

RANDOLPH.

RANDOLPH, Senior Circuit Judge: Thrifty Payless, Inc.,

doing business as Rite Aid, seeks judicial review of the National

Labor Relations Board’s decision that Rite Aid committed unfair

labor practices. The Board has cross-applied for enforcement of

its order.

There are three issues.

Did Rite Aid bargain to an impasse with the union regarding

employee health insurance?

Did an emergency justify Rite Aid’s transferring its

employees’ health insurance from the union-sponsored plan to

a company plan?

Was the Board’s remedy lawful and proper?

We are mindful that the first issue—did the negotiating

parties reach an “impasse”?—poses a question well suited to a

panel of social psychologists specializing in the strategy of

negotiations. Many studies deal with the common negotiating

refrain, “this is my final offer,” when the speaker knows quite

well it is not. “Lying,” or to put it mildly, “deception,” or even

more mildly, “bluffing,” is an inevitable part of negotiating,

whether at a rug bazaar in a Turkish market or in nuclear

3

disarmament talks in Geneva.

Over the years the National Labor Relations Board, in its

many iterations, has settled on a multi-factor “test”—which is by

no means a “test”—consisting of factors it considers in

determining whether the employer and the union have reached

an “impasse.” One key sign of an impasse may be when the

employer does a lockout while the union organizes a strike. See

NLRB v. Burns Int’l Sec. Servs., 406 U.S. 272, 287 (1972).

Beyond that is a vale of ambiguity.

I.

The first and second issues are fact-bound. A summary of

the evidence relating to those issues follows.

Rite Aid operates drug stores and pharmacies. The United

Food and Commercial Workers Local 8–Golden State has long

represented the company’s northern California employees.

These Rite Aid employees received their healthcare benefits

through the United Food and Commercial Workers Northern

California and Drug Employers Health and Welfare Trust Fund.

Rite Aid contributed to the Fund at rates set through collective

bargaining. In 2018, it was paying into the Fund $3.77 per

employee hour.

In early 2018, the Fund’s independent consultant, Segal

Consulting, reported that the Fund was financially unstable. The

Fund had suffered a loss of $6.4 million during the previous

eighteen months because of heightened claim activity, cutting its

reserves to $4.4 million. That amount, Segal Consulting

determined, left the Fund with reserves that were barely enough

to cover roughly two months of claims.

That May, Rite Aid and Local 8 met to discuss the Fund’s

condition. The union proposed that the company increase its

contributions to the Fund. Rite Aid responded that it wanted

cost-neutrality—if it were to consider raising its contributions to

the Fund, adjustments to other costs had to be factored in. Rite

4

Aid added that it wanted to achieve a long-term solution to the

Fund’s financial problems.

The parties maintained a dialogue regarding the Fund

during the next several months. In October, Local 8 proposed

that Rite Aid should increase its contributions to the Fund and

that there should be modifications to employee benefits. Local

8 followed up in early January 2019 to solicit the company’s

response. Rite Aid did not agree to Local 8’s proposal but

assured the union that it would negotiate a successor collective

bargaining agreement ahead of the existing contract’s July 2019

expiration date.

Those negotiations—the ones that generated the dispute

now before us—kicked off in June 2019. Local 8 presented a

proposal that included benefit modifications and an increase in

Rite Aid’s contributions to $5.72 per employee hour. In the

meantime, because the parties’ existing agreement was slated to

expire on July 13, Local 8 proposed extending that agreement

through the end of August, during which time Rite Aid would

pay the $5.72 contribution rate contained in the union’s

proposal. Rite Aid agreed to the extension on July 1.

In August, Rite Aid and Local 8 met to bargain two more

times. Rite Aid presented a list of suggested changes, but the

union rejected it, claiming that the changes shifted costs onto

employees without raising Rite Aid’s contributions or

accounting for rising healthcare costs. A few days later, Rite

Aid proposed an alternative to the Fund: switching to an

employer-sponsored healthcare plan. The parties agreed to

extend their existing agreement for another month, through

September 30, and to maintain Rite Aid’s contributions at the

increased level.

In the fall, tensions grew as the parties fleshed out their

positions. At a September meeting, Local 8 proposed extending

the existing agreement for one year, during which Rite Aid

would continue making Fund contributions at the $5.72 rate.

Rite Aid suggested instead transferring the employees’ health

5

insurance to a company-sponsored plan that it claimed would be

less expensive. When Local 8 later pressed Rite Aid on its

position regarding the union’s offer, Rite Aid wrote that a

further extension was a non-starter because of its “draconian”

cost but that Rite Aid remained “interested in continuing to

bargain.”

After the second extension agreement expired, Local 8

initiated boycott actions against Rite Aid. When the parties met

again in late October, the union blamed Rite Aid for allowing

the agreement to lapse and putting the union “in a position

where we’ve declared war.” Rite Aid expressed displeasure

regarding the boycotts.1 Local 8 reiterated its offer to roll over

the existing deal with Rite Aid continuing to make the increased

contributions.

Rite Aid revealed its economic proposal in a letter it sent a

few days after the meeting. Its plan would move employees

from the Fund to a Rite Aid-sponsored healthcare plan. It would

also provide for greater wage increases as a result of the savings

reaped from switching plans. Rite Aid stated that it would not

renew the extension agreement and that, because the union had

failed to show any movement in its position, “there is nothing to

talk about.” Even so, it offered to meet “if you [i.e., the union]

feel differently.”

At the next meeting in November, Local 8’s representative

announced that the union wanted to understand the two sides’

positions to enable it to draft an appropriate proposal. Rite

Aid’s representative replied that the company would need to

enroll employees in a Rite Aid-sponsored plan soon in order to

have a January 1 launch but insisted that Rite Aid “d[id]n’t care

whose name is on” the plan. The company’s representative then

1

We base our understanding of the bargaining sessions on the

meeting notes in the record. These are not verbatim transcripts but the

parties largely accept them as sufficiently accurate for our purposes

(with an exception we address, infra, in footnote 5).

6

declared that the parties were “at impasse.” Local 8’s

representative rejected that characterization and promised to

come up with a “comprehensive proposal” that would be the

“best we think we can do.” After the meeting, the union

received information from Rite Aid about the healthcare costs of

its proposal.

The parties last came together on December 5. They

first reviewed the details of Rite Aid’s October proposal. Local

8 then presented its counterproposal, which was meant to come

“close to what [the union] perceive[d] [Rite Aid’s] budget to

be.” The plan marked a $19.3 million decrease in costs from the

union’s June proposal, achieved through reduced Rite Aid

contributions as well as cuts to employee wage and healthcare

offerings.

After two weeks of silence following the meeting, Rite

Aid sent a letter on December 20 rejecting the union’s proposal

as “not a responsible or realistic” way to ensure the Fund’s long-

term stability. Because Local 8 refused to entertain having

employees leave the Fund, Rite Aid again declared that the

parties were “at impasse” and stated it would implement its final

offer from October on January 1, 2020. The union pushed back,

decrying the claim of impasse as “inaccurate” and maintaining

that its proposal “greatly enhances the viability” of the Fund.

Further back-and-forth over email did not prove

productive, so on January 1 Rite Aid, as promised, implemented

its proposal to move employees to an employer-sponsored plan.

(The record does not reveal the Fund’s fate or its current

financial shape—if it still exists.) Later that month, Local 8

filed unfair labor practice charges with the Board.

An Administrative Law Judge concluded that Rite Aid had

committed unfair labor practices in violation of the National

Labor Relations Act when it unilaterally implemented its

proposal. The ALJ determined that Rite Aid violated its duty to

bargain in good faith because it took unilateral action even

though the parties had not yet reached an impasse. The ALJ

7

also found that the Fund’s financial situation did not give rise to

an economic exigency justifying an immediate response.

The Board in August 2022 affirmed the ALJ’s findings and

conclusions. Thrifty Payless, Inc. d/b/a Rite Aid, 371 N.L.R.B.

No. 124, 2022 WL 3356576 (Aug. 11, 2022). The Board

ordered Rite Aid to cease and desist its unilateral actions and

refusal to bargain; to resume bargaining upon the union’s

request; to rescind the unilateral changes it had made; and to

make current employees (and those who retired after January 1,

2020) whole for any loss of benefits suffered due to Rite Aid’s

actions. Like the ALJ, the Board also imposed a make-whole

remedy ordering Rite Aid to make all required payments to the

Fund that it had withheld and to reimburse employees for any

resulting expenses they incurred. The Board amended that

remedy in part by further obligating Rite Aid to cover all

employees who retired after Rite Aid switched out of the Fund

and pay back any personal contributions that employees made

to the Fund after Rite Aid’s action.

II.

The main issue here is whether Rite Aid was entitled to

implement its own proposal instead of continuing negotiations

with the union. Sections 8(a)(5) and (1) of the National Labor

Relations Act, 29 U.S.C. § 158(a)(5), (1), obligate an employer

to bargain in good faith with its employees’ union.2 Wayneview

Care Ctr. v. NLRB, 664 F.3d 341, 347 & n.1 (D.C. Cir. 2011).

2

Section 8(a)(5) makes it an unfair labor practice for an employer

“to refuse to bargain collectively with the representatives of his

employees,” while section 8(a)(1) prohibits “interfer[ing] with,

restrain[ing], or coerc[ing] employees in the exercise of the[ir] rights”

under the Act. 29 U.S.C. § 158(a)(5), (1). Violating the former

automatically results in a violation of the latter. Regal Cinemas, Inc.

v. NLRB, 317 F.3d 300, 309 n.5 (D.C. Cir. 2003).

8

As a result, an employer can change the conditions of

employment only if the parties reach an agreement or if the

negotiations break down and result in an impasse, subject to two

exceptions that we will take up in a moment. Id. at 347–48. In

reviewing the Board’s decision, we must accept its factual

findings so long as they are supported by substantial evidence.3

Allentown Mack Sales & Serv., Inc. v. NLRB, 522 U.S. 359,

366–68 (1998); see 29 U.S.C. § 160(e).

A.

Rite Aid’s primary theory is that the parties were at an

impasse when the company moved its employees out of the

Fund and into a Rite Aid-sponsored plan. An impasse occurs

only when both sides have exhausted the prospects of reaching

a deal and are “at the end of their rope,” Oak Harbor Freight

Lines, Inc. v. NLRB, 855 F.3d 436, 444 (D.C. Cir. 2017)

(citation omitted), leaving no “realistic prospect” that further

discussions will be fruitful, Teamsters Loc. Union No. 639 v.

NLRB, 924 F.2d 1078, 1083 (D.C. Cir. 1991) (citation omitted).

The Board determines the existence of an impasse by

considering, among other things, the parties’ bargaining history,

their good faith in negotiations, the length of the negotiations,

the importance of the points of contention, and the

“contemporaneous understanding of the parties as to the state of

negotiations.” Taft Broad. Co., 163 N.L.R.B. 475, 478 (1967),

review denied sub nom. Am. Fed’n of Television & Radio

Artists, AFL-CIO, Kan. City Loc. v. NLRB, 395 F.2d 622, 623

(D.C. Cir. 1968).

The record contains enough evidence to support the Board’s

finding that the parties were not at an impasse. An impasse

arises when neither side is open to compromise. Grinnell Fire

3

Because the Board affirmed the ALJ’s findings, we refer to

those findings as made by the Board.

9

Prot. Sys. Co., 328 N.L.R.B. 585, 586 (1999), enforced, 236

F.3d 187 (4th Cir. 2000). So each party’s understanding of the

state of the negotiations takes on “central importance” in the

impasse analysis.4 Teamsters Loc. Union No. 639, 924 F.2d at

1084.

The Board found that Local 8’s representative stated in

September 2019 that the union would “listen to whatever

thoughts” Rite Aid had; that the union proposed further

bargaining dates in October even though Rite Aid’s

representative suggested that there was “nothing to talk about”;

and that the union rejected Rite Aid’s first declaration of

impasse in November by promising to “come back with the best

we think we can do.” To the Board, those were signals that

Local 8 was still amenable to making a deal and did not view the

negotiations as having run out of steam.

The union followed up on its assurances in December by

making a proposal that marked, as one Board Member put it,

“significant movement” toward Rite Aid’s position. Rite Aid’s

main objectives in the negotiations were two-fold: reducing

costs and improving the long-term viability of the Fund. Local

8’s proposal—developed with input from the Fund’s consultant,

Segal Consulting—reflected progress on the first objective. It

reduced costs by more than $19.3 million compared to the

union’s previous proposal. The proposal did so by increasing

Rite Aid’s contributions to the Fund (though to a lesser extent

than previous proposals)—and also by making concessions on

4

Of course, it is hard to conceive of a scenario—and the caselaw

does not suggest one—in which a union will ever declare an impasse.

After all, an impasse enables the employer to implement its last offer.

That means the union will always contend that talks must go on. So

a union’s “professions” to that effect must be considered alongside

“objective evidence” of the movement in its bargaining position over

the course of the negotiations. Atrium of Princeton, LLC v. NLRB,

684 F.3d 1310, 1312–13 (D.C. Cir. 2012).

10

the employee side, such as foregoing a wage increase for one

year, eliminating automatic healthcare enrollment for new hires,

and introducing a more cost-effective healthcare partnership tier.

Those hard numbers and proposed changes to benefits tend

to show that Local 8 was attempting to find a middle ground

with Rite Aid.5 The union’s concessions on costs support the

Board’s view that there was “reason to believe that further

bargaining might [have] produce[d] additional movement.”

Hayward Dodge, Inc., 292 N.L.R.B. 434, 468 (1989) (citation

omitted).

Rite Aid claims that the union’s proposal was nonetheless

inadequate because the union did not acknowledge Rite Aid’s

desire to address the Fund’s long-term stability. In support, Rite

Aid emphasizes a statement from Local 8’s representative at the

December 2019 meeting that the union was “giv[ing] up on”

“building up the reserves.” A fuller recounting of the statement

indicates that the union’s representative said the union was

giving up on building up reserves “for now” “because [the Fund]

was so underfunded”—and then said that if things went well,

“we can start to build back up the reserves.” In response, Rite

Aid’s representative summed up Local 8’s position as “help[ing]

[Rite Aid] build reserves in a different way,” and the union

representative agreed.

As to Local 8’s supposed failure to account for long-term

viability of the Fund, it is true that the union presented its

proposal orally at the meeting and did not provide a work-up of

the Fund’s estimated financial future. But Rite Aid never tried

5

Rite Aid attacks the Board’s finding that Rite Aid’s

representative, despite her later denial, said in the December meeting

that the union’s proposal showed significant movement. This

amounted to a credibility determination and only “the starkest error”

could justify setting it aside. Constellium Rolled Prods. Ravenswood,

LLC v. NLRB, 45 F.4th 234, 243 (D.C. Cir. 2022) (citation omitted).

In any event the union’s proposal speaks for itself.

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to determine whether the union’s proposal would improve the

Fund’s fiscal health. Rite Aid did not take the proposal back to

its own experts for analysis, it did not confer with the union’s

experts to understand how they had developed the plan, and it

did not seek input from Segal Consulting.6 If it had done so,

Rite Aid would have discovered that the plan at least arguably

would have increased reserves (as shown by the later testimony

of a consultant for Segal Consulting), triggering Rite Aid’s duty

to continue negotiating. Particularly given the union’s

significant movement on costs, Rite Aid’s ipse dixit that the

proposal was inadequate lends little support to its disregard of

the offer.

Rite Aid accuses Local 8 of refusing to consider the

company’s proposals and needs. Yet Rite Aid elsewhere resists

the notion that it was wedded to switching to a Rite Aid-

sponsored plan rather than adjusting the Fund. And there are

some indications that the union’s disinterest in that option did

not necessarily reflect an overall rejection of Rite Aid’s position.

For instance, when Rite Aid expressed displeasure at the

proposed increases to its Fund contributions, Local 8 made cuts

between $0.20 and $0.70 per employee hour to the contribution

level it proposed for each year of its plan. The union also

eliminated automatic healthcare enrollment in its December

proposal after Rite Aid first proposed that idea in August.

True, we have held that an impasse occurs when an

employer issues an ultimatum on a certain topic and the union

comes up short of fully agreeing with that demand. Mike-Sell’s

Potato Chip Co. v. NLRB, 807 F.3d 318, 323 (D.C. Cir. 2015).

6

Rite Aid’s letter declaring impasse asserted that its actuaries

“agree[d]” that the Union’s proposal failed to address viability, but

neither that letter nor anything else Rite Aid cites demonstrates any

substantive analysis of the union’s proposal. And Rite Aid does not

dispute the Board’s express finding that it failed to have its benefit

experts analyze the plan.

12

On the face of it, Local 8’s proposal did not fail to satisfy any

hard line or last offer laid down by Rite Aid. As a result, Rite

Aid could be expected to give the offer a fair shake, not

“abruptly” declare impasse after two weeks of inaction. See id.

at 324–25. At least the Board was warranted in so finding.

The brief duration of the negotiations over Local 8’s

proposal in December 2019 also tends to support the Board’s

finding. See Taft, 163 N.L.R.B. at 478. At the parties’

December meeting, they spent the morning on Rite Aid’s most

recent proposal, and then took forty-four minutes in the

afternoon to discuss the union’s proposal. After that, Rite Aid

did not engage with the union or Segal Consulting until

declaring an impasse two weeks later.

Given the complexity of the issues and their undisputed

“importance” to the parties, see id., the Board reasonably

concluded that Rite Aid was unjustified in walking away from

the bargaining process after less than an hour of negotiations.

As one Board Member noted, Local 8’s efforts to achieve

compromise “warranted a more thorough review and response”

from Rite Aid before ending the talks.

Even though Rite Aid and Local 8 met throughout 2018 and

2019, they did not begin negotiating a successor collective

bargaining agreement until mid-2019. The union did not receive

Rite Aid’s economic proposal until October 2019, and only got

the cost information in December. So the actual dialogue on the

issues that led to the claimed impasse only took place across a

handful of sessions, during which the parties came in with new

ideas and made changes from their prior proposals. Those

interactions culminated in a brief back-and-forth over the latest

proposal from each side at the December meeting.

None of that resembles the prolonged dialogue without

signs of movement in the cases that Rite Aid cites. Instead, the

records show two sides engaging in a cyclical process of offer,

discussion, evaluation, and counteroffer. The Board concluded

that the process had not yet been exhausted. Because substantial

13

evidence shows that Rite Aid and Local 8 were not at an

impasse, we uphold the Board’s determination.7

B.

In the alternative, Rite Aid claims it properly implemented

its proposal unilaterally even if the parties had not yet reached

impasse. An employer’s duty to bargain in good faith to

agreement or impasse has two exceptions: when the union

engages in dilatory tactics to delay bargaining, or when the

employer is compelled to act to address an economic exigency.

Vincent Indus. Plastics, Inc. v. NLRB, 209 F.3d 727, 734 (D.C.

Cir. 2000).

Rite Aid invokes both exceptions. But under the National

Labor Relations Act, “[n]o objection that has not been urged

before the Board, its member, agent, or agency, shall be

considered by the court” absent “extraordinary circumstances.”

29 U.S.C. § 160(e). Rite Aid never raised a dilatory-tactics

defense in its exceptions to the ALJ’s decision or in its brief

before the Board, and there are no extraordinary circumstances

that excuse its neglect. We therefore do not consider that

argument.

Rite Aid did make an exigency argument before the Board,

so it is properly before us. An employer is entitled to take

unilateral action to stave off “a dire financial emergency”—one

“in which time is of the essence and which demand[s] prompt

action.” Cibao Meat Prods., Inc. v. NLRB, 547 F.3d 336, 340

(2d Cir. 2008); RBE Elecs. of S.D., Inc., 320 N.L.R.B. 80, 82

(1995). The employer bears the burden of showing that there

was an economic exigency that “was caused by external events,

was beyond the employer’s control, or was not reasonably

7

The Board also relied on the parties’ lengthy bargaining history

and its finding that Rite Aid negotiated in bad faith. We uphold the

Board’s finding without relying on those factors.

14

foreseeable.” Vincent Indus. Plastics, 209 F.3d at 734 (quoting

RBE Elecs., 320 N.L.R.B. at 82).

Clearly, the Fund experienced significant financial hardship

in 2018 and 2019. Its reserves fell to $4.4 million in early 2018;

the previous time they dropped to that level, in 2014, had been

unprecedented. From there, the reserves kept dwindling, down

to $1.2 million in November 2019. Even though the Board

found that the Fund “was able to function through the various

fluctuations of claims” for 35 years, the Fund’s position in late

2019 was markedly lower than it had been since at least

2014—if not ever.

By December 23, 2019, however, the reserves had risen to

more than $1.6 million—a $400,000 increase in the span of a

month. That increase notably took place even though months

had elapsed since Rite Aid last made the increased contributions

to the Fund required under the two extension agreements.

Those circumstances support the Board’s determination that

time was not of the essence and that prompt action was not

necessary. The parties do not explain, and the record does not

reveal, why the Fund suddenly experienced a net gain in

reserves in December 2019. Even more puzzling, Rite Aid had

stopped making heightened contributions under the extension

agreements in September, so by December its contributions had

returned to their original level. Regardless of what caused the

growth in reserves, though, the Board rightly pointed out that the

growth calls into question whether Rite Aid really had no choice

but to implement its own plan. And a consultant for Segal

Consulting testified that the union’s plan would have continued

to increase reserves, further undermining Rite Aid’s claim.

Any reasonable consideration of exigency must consider

“an employer’s need to run its business” and the inherently

uncertain task of making corporate decisions in the face of a

potential crisis. RBE Elecs., 320 N.L.R.B. at 82. Management

does not have a crystal ball to help it assess the likelihood of

adverse outcomes of various courses of action (or inaction).

15

Here, the Board acknowledged that it was “impossible” for Rite

Aid “to predict what claims might come in and how that would

impact the reserves.” And Rite Aid asserts without contest that

the reserves as of November 2019—which apparently were at an

historic low—could only cover a few weeks’ worth of

healthcare coverage for Rite Aid employees. So Rite Aid’s

concern that inaction could have had damaging consequences is

understandable.

Although Rite Aid had some latitude, the Board reasonably

found that Rite Aid was not “compelled” to take unilateral

action at that time. Rite Aid had known that the Fund was in

decline since early 2018, yet allowed more than a year and a half

to pass before implementing its plan—and, as explained, Rite

Aid decided to implement its plan not in November 2019 but a

month later, when reserves were on the rise. See Quality Health

Servs. of P.R., Inc. v. NLRB, 873 F.3d 375, 388 (1st Cir. 2017).

Even then, Rite Aid only acted after walking away from a

proposal from Local 8 that might have increased those reserves.

And Rite Aid does not explain why it thought it had no

alternative.

Absent an exigency, then, Rite Aid had no right to

implement its healthcare plan without reaching an agreement or

an impasse with Local 8. Because Rite Aid jumped the gun, the

Board properly concluded that Rite Aid committed unfair labor

practices in violation of Sections 8(a)(1) and (5).

III.

Rite Aid also challenges the Board’s remedy requiring the

company to make all delinquent payments to the Fund. The

Board’s initial response is that Rite Aid did not preserve its

objection to the remedy, and so we must ignore the company’s

objection. See 29 U.S.C. § 160(e).

“[T]he critical inquiry” is whether the arguments in front of

the Board were sufficient to put the Board “on notice that the

16

issue might be pursued on appeal.” United Food & Com.

Workers Union, Loc. 400 v. NLRB, 989 F.3d 1034, 1037 (D.C.

Cir. 2021) (citation omitted). Rite Aid excepted to the ALJ’s

“recommended remedy of making all contractually-required

contributions to the [Fund]” because “employees have been

covered by a substantially similar health plan since Rite Aid’s

implementation [of its own proposal] after impasse.” Now, Rite

Aid says that “the remedy should be adjusted” to account for the

fact that employees “have received coverage under the Rite Aid

health care.” That is largely the same point, so the Board had

notice of it.

Rite Aid also faults the Board for “actively and substantially

alter[ing]” the ALJ’s remedy. The Board kept intact the

mandate that Rite Aid make all withheld payments to the Fund

but also ordered Rite Aid to cover retired employees and

reimburse any personal contributions employees had made to the

Fund.

To the extent Rite Aid objects to the Board’s changes, we

cannot consider that argument. A party can challenge the

Board’s sua sponte amendment to a remedy by moving for

reconsideration of the Board’s decision. See 29 C.F.R. §

102.48(c). Because there is a mechanism for the Board to

consider challenges to its own sua sponte actions, a party must

give the Board the first go at resolving such arguments. See

Spectrum Health-Kent Cmty. Campus v. NLRB, 647 F.3d 341,

349 (D.C. Cir. 2011). Otherwise, there is the bar of § 160(e).

See Teamsters Loc. 115 v. NLRB, 640 F.2d 392, 398 (D.C. Cir.

1981).

The bulk of Rite Aid’s argument concerns the same issue it

did present to the Board: whether Rite Aid was entitled to set

off the remedy by the amount it had contributed to employees’

healthcare coverage under its own plan. Both the original and

the amended remedy contained the same core requirement that

Rite Aid make all delinquent payments to the Fund, so Rite

Aid’s setoff argument before the Board sufficed to preserve it

17

for judicial review. See United Food & Com. Workers Union,

989 F.3d at 1037.

Rite Aid relies on our decision in Grondorf, Field, Black &

Co. v. NLRB, where we explained that although the Board

enjoys “broad discretion” in fashioning remedies, “its orders

must be remedial, not punitive.” 107 F.3d 882, 888 (D.C. Cir.

1997). Like Rite Aid, the companies in Grondorf challenged a

Board order requiring them to make all delinquent payments to

the union pension and health and welfare funds. Id. We

recognized that when “an employer unlawfully ceases

contributions to a union benefit fund, the Board, with court

approval, generally requires the employer to make up the

contributions” in order to make employees whole and restore the

fund’s viability. Id. But when the employer has provided

alternative benefits, compelling reimbursement is unwarranted

“to the extent that it . . . ‘results in a windfall for the union

funds.’” Id. (citation omitted). As a result, our court in

Grondorf remanded the order to the Board so the companies

could demonstrate the extent to which their remedial obligations

should be reduced to account for the benefits they had provided

in the employer-sponsored plans. Id.

We follow the same approach here. The Board does not

dispute that Grondorf is on all fours with this case. We

therefore will remand the Board’s order to allow Rite Aid to

demonstrate whether its “contributions to the [Fund] must be

reduced” based on the benefits it provided through its employer-

sponsored plan, to “avoid an improper windfall” for the Fund.

Id. As the Board notes, however, any disputes over the “specific

calculations as to the amounts . . . due” should be resolved in a

future compliance proceeding. Sure-Tan, Inc. v. NLRB, 467

U.S. 883, 902 (1984); see 29 C.F.R. § 102.54(a).

***

18

The Board’s determination that Rite Aid was not entitled to

implement its own proposal was supported by substantial

evidence. To that extent we deny Rite Aid’s petition for review.

We deny the Board’s cross-application for enforcement and

remand the order for further proceedings consistent with this

opinion.

So ordered.