The grant of back pay based on pay rates in the predecessor's collective bargaining agreement may be inappropriate, however, when the successor employer shows that it lawfully would not have agreed to the wage scale provided by the predecessor's labor agreement, and the resulting impasse would have resulted in reduced wages. Kallmann, 640 F.2d at 1103; NLRB v. Dent, 534 F.2d 844, 847 (9th Cir. 1976). The instant case presents a question of first impression: whether a successor employer who initially refuses to recognize and bargain with a union is required to pay back wages at union-scale rates when the successor employer fails to present evidence that it lawfully would have reduced these rates.

Every court that had addressed the subject has held that this passage in Burns refers to negotiation and does not establish a substantive obligation to open one's doors offering the predecessor's terms. Saks Co. v. NLRB, 634 F.2d 681, 687-88 (2d Cir. 1977); Nazareth Regional High School v. NLRB, 549 F.2d 873, 881-82 (2d Cir. 1977); Kallmann v. NLRB, 640 F.2d 1094, 1102-03 (9th Cir. 1981); NLRB v. Dent, 534 F.2d 844 (9th Cir. 1976); Machinists v. NLRB, 595 F.2d 664, 672-76 (D.C. Cir. 1978). We sidestepped this question in U.S. Marine, see 944 F.2d at 1321-22 n. 22, and need not essay its resolution here, because the Board was entitled to find that U.S. Can did not avail itself of the privilege to set its own terms.

Tom-A-Hawk Transit, Inc. v. NLRB, 7 Cir., 1969, 419 F.2d 1025, 1026-1027. Accord: NLRB v. Burns International Security Services, Inc., 1973, 406 U.S. 272, 279, 92 S.Ct. 1571, 1577, 32 L.Ed.2d 61; NLRB v. Dent, 9 Cir., 1976, 534 F.2d 844, 846. If a majority of the employees in the unit after the purchase were in the unit before the purchase, there is a duty to bargain, it being assumed that the holdover majority continues to desire representation by the Union. Pacific Hide Fur Depot, Inc. v. NLRB, 9 Cir., 1977, 553 F.2d 609, 611.

Thus, courts have refused enforcement of Board orders when they have been considered penal or confiscatory, rather than remedial. Townhouse TV, supra; Frito-Lay, supra; NLRB v. Dent, 534 F.2d 844 (9th Cir. 1976). In effectuating the policies of the Act, the Board is given broad discretion.

The district court in Fort Independence declined to adopt the principle enunciated in the Ninth Circuit NRLA decisions: determining "good faith" by inquiring into the parties' state of mind and all of the facts and circumstances in addition to the record of negotiations between the parties. The court then explained that in Coyote Valley II as in two NRLA decisions that hold that the good faith requirement is a fact-specific inquiry, NLRB v. Dent, 534 F.2d 844, 846 (9th Cir. 1976) and NLRB v. Stanislaus Implement Hardware Co., 226 F.2d 377, 381 (9th Cir. 1955), the circuit actually discussed "objective facts relating to the record of negotiations." Id. The Fort Independence court, therefore, was not persuaded by the language in those cases describing the bad faith inquiry as a factual one.

is a matter for the Board's expertise and will not be upset unless unsupported by substantial evidence." NLRB v. Dent, 534 F.2d 844, 846 (9th Cir. 1976).

Other courts, however, have taken an approach similar to ours. See Armco, Inc. v. NLRB, 832 F.2d 357, 365 (6th Cir. 1987); Kallmann v. NLRB, 640 F.2d 1094, 1103 (9th Cir. 1981); NLRB v. Dent, 534 F.2d 844, 846-47 (9th Cir. 1976); see also New Breed Leasing, 111 F.3d at 1469-72 (O'Scannlain, J., dissenting); U.S. Marine, 944 F.2d at 132731 (Easterbrook, J., dissenting). As we see it, the alternative adopted by the Board conflicts with two cardinal principles of labor law: (1) an employer cannot be required to accept contractual terms to which it did not agree, and (2) the Board's remedial order must be just that — remedial — and not punitive.

In view of that continuity, the employees would "understandably view their job situations as essentially unaltered," and could reasonably be expected to continue their support for the Union. Fall River, 482 U.S. at 43, 107 S.Ct. at 2236; accord General Wood Preserving Co., 905 F.2d at 819; Nephi Rubber Prods. Corp. v. NLRB, 976 F.2d 1361, 1364-66 (10th Cir. 1992); cf. NLRB v. Dent, 534 F.2d 844, 846 n. 2 (9th Cir. 1976) (because the successor had preserved the predecessor's wage rates for just two weeks following a takeover, the successor could not thereafter alter those rates unilaterally). Additionally, the employees at issue here were frustrated in their attempts to negotiate with their employer by the fact that Tyson did not negotiate with their Union.

The Second, Fourth, Ninth, and District of Columbia Circuits have held that successors may set their own terms and conditions whether or not the firm expects its predecessor's employees to cross over en masse. Saks Co. v. NLRB, 634 F.2d 681, 687-88 (2d Cir. 1980); Nazareth Regional High School v. NLRB, 549 F.2d 873, 881-82 (2d Cir. 1977); NLRB v. Spruce Up Corp., 529 F.2d 516 (4th Cir. 1975), enforcing 209 N.L.R.B. 194 (1974); Kallmann v. NLRB, 640 F.2d 1094, 1102-03 (9th Cir. 1981); NLRB v. Dent, 534 F.2d 844, 847 (9th Cir. 1976); International Association of Machinists v. NLRB, 595 F.2d 664, 672-76 (D.C. Cir. 1978). These courts conclude that the remark in Burns, 406 U.S. at 294-95, 92 S.Ct. at 1585-86, that "there will be instances in which it is perfectly clear that the new employer plans to retain all of the employees in the unit and in which it will be appropriate to have him initially consult with the employees' bargaining representative before he fixes terms" does not prevent the successor from setting initial terms.

Whether a party has fulfilled its obligation of bargaining in good faith is a matter particularly within the Board's expertise, and findings of the Board will not be upset if supported by substantial evidence. NLRB v. Dent, 534 F.2d 844, 846 (9th Cir. 1976). See Universal Camera Corp. v. NLRB, 340 U.S. 474, 488, 71 S.Ct. 456, 464, 95 L.Ed. 456 (1951); NLRB v. Big Three Industries, Inc., 497 F.2d 43, 46-47 (5th Cir. 1974).