05/13/2026: Employer Unilaterally Implemented Health Plan Without Bargaining to Impasse
Four days of bargaining is not enough.
Westrock Services, LLC, JD(SF)-11-26, 32-CA-330282 (ALJ Decision)
An ALJ found that WestRock Services violated Section 8(a)(5) and (1) of the NLRA by unilaterally implementing a new employee health insurance plan without bargaining to a valid impasse.
The case arose after Teamsters Local 856 won a representation election at WestRock’s Salinas, California, box plant in October 2023, replacing District Council 2. Shortly after the election, DC 2 notified WestRock that the union-run health plan was being cancelled immediately, with no COBRA continuation available. WestRock responded by proposing to move employees into its own company plan — the Consumer Choice Plan — which shifted significantly more premium costs onto employees compared to the 80/20 employer-employee split required under the expired DC 2 contract. The Union countered with several alternatives, including a comparable Teamsters health and welfare plan at no additional cost to WestRock and modified versions of the Consumer Choice Plan that would have preserved the 80/20 split. WestRock rejected all of them. After fewer than four days of exchanges, the company declared impasse and implemented the Consumer Choice Plan on November 13.
The ALJ found no valid impasse under the five-factor test from Taft Broadcasting Co. Good faith — the central factor — weighed heavily against WestRock. The company’s only proposal throughout bargaining was one that required the Union to effectively waive the status quo obligation on premium sharing, which the ALJ characterized as bad faith under Altorfer Machinery Co. WestRock also withheld key information — employee insurance tier demographics — until after it had already declared impasse, on a federal holiday, leaving the Union no meaningful opportunity to formulate a response before implementation. The short duration of negotiations, the Union’s unretracted counterproposals, and the absence of any mutual understanding of impasse all pointed the same direction.
The ALJ also rejected WestRock’s argument that the sudden insurance cancellation constituted an exigency excusing bargaining, finding it unnecessary to resolve the question since bad faith independently precluded a lawful impasse. Discharge allegations against two employees — union steward Frank Pulido and organizer Jesus Felix — were resolved through a non-Board settlement approved at the hearing under Independent Stave.
The remedy includes rescission of the Consumer Choice Plan on request, make-whole relief including pecuniary losses under Thryv Inc., and a one-year extension of the certification period under Mar-Jac Poultry Co. to protect the Union’s bargaining position.
Significant Cases Cited
Taft Broadcasting Co., 163 NLRB 475 (1967): Established the five-factor test for determining whether parties have reached a genuine bargaining impasse.
More Truck Lines, Inc., 336 NLRB 772 (2001): Held that when a new union is certified, the employer must maintain the terms of the prior contract as the status quo until a new agreement is reached or a lawful impasse occurs.
Bottom Line Enterprises, 302 NLRB 373 (1991): Established that an employer may implement proposals on individual bargaining subjects absent overall impasse only when genuine economic exigencies compel prompt action.
Altorfer Machinery Co., 332 NLRB 130 (2000): Held that proposing terms that require the union to waive the employer’s statutory obligation to maintain the status quo constitutes bad faith bargaining.
Thryv Inc., 372 NLRB No. 22 (2022): Expanded the Board’s make-whole remedy to include direct or foreseeable pecuniary harms beyond lost wages resulting from unfair labor practices.