The company and the union commenced collective bargaining in April 2003. After four sessions, the company submitted, on June 15, a contract package for union ratification. Two days later, the union’s membership rejected the package. No strike ensued.

Following rejection, the union’s chief negotiator contacted the company and pointed out four stumbling blocks to ratification: union security, wages, overtime pay, and sickness and accident benefits. On July 7, the company resubmitted its original contract package unchanged. The union agreed to put it to a second ratification vote.

However, before the vote took place, the company’s president withdrew the package from the bargaining table. His reasoning was that the union’s failure to strike indicated that the company had earlier overestimated the union’s economic power. When in subsequent bargaining sessions the company proposed wages and benefits below those in the original package, the union charged it with bad-faith bargaining.

How should the NLRB have ruled on this complaint? See Pennex Aluminum Corp. [271 NLRB 1205 (1984)].