Opinion for the court filed by Circuit Judge J. SKELLY WRIGHT.
Opinion concurring in the result filed by Circuit Judge TAMM.
In this appeal the National Labor Relations Board (NLRB) seeks review of a determination by a Special Master that the Blevins Popcorn Company (the company) did not violate a contempt and purgation order issued by this court on September 16, 1977. In that order we stated that the company would face sanctions if it did not begin bargaining in good faith with the American Federation of Grain Millers, AFL-CIO (the union), which represented employees at the company’s Ridgway, Illinois facility.1 As we explain below, we conclude that the Special Master imposed an unduly heavy burden of proof on the NLRB. We also conclude that the Master may not have applied the proper legal principles in determining whether the company bargained in good faith. Thus we remand to the Master for new findings of fact and conclusions of law.
I. BACKGROUND
A. Enforcement Order and First Contempt Proceeding
On May 4,1977 this court entered a judgment enforcing in full a decision and order of the NLRB issued against the company on June 19,1975. See Blevins Popcorn Co., 218 NLRB 689 (1975). In its decision the NLRB found that the company had unjustifiably refused to bargain with the union over rates of pay, wages, hours, and other terms and conditions of employment. The order, as enforced, directed the company to:
1. Cease and desist from:
(a) Refusing to bargain collectively concerning rates of pay, wages, hours, and other terms and conditions of employment with American Federation of Grain Millers, AFL-CIO, as the exclusive bargaining representative of its employees in the following appropriate unit:
All production and maintenance employees, including truckdrivers employed at the Employer’s facility in Ridgeway [sic], Illinois, but excluding office clerical employees, professional employees, guards and supervisors as defined in the Act.
(b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them in Section 7 of the Act.
2. Take the following affirmative action which the Board finds will effectuate the policies of the Act:
(a) Upon request, bargain with the above-named labor organization as the exclusive representative of all employees in the aforesaid appropriate unit with respect to rates of pay, wages, hours, and other terms and conditions of employment, and, if an understanding is reached, embody such understanding in a signed agreement.
218 NLRB at 691.2
On September 16, 1977, upon motion of the NLRB, this court entered a second order summarily adjudging the company in civil contempt for willfully continuing to fail and refuse to comply with the court’s May 4 order.3 The September 16 order stated that the company could purge itself of civil contempt by:
(a) Fully complying with and obeying this court’s judgment of May 4, 1977 by, upon request, bargaining collectively in good faith with the union as the exclusive representative of [the company’s] employees in the appropriate unit, and, if an understanding is reached, embodying such understanding in a signed agreement, provided, however, that such agreement may be made subject to termination should the United States Supreme Court ultimately decide that [the company] was not obligated to recognize and bargain with the union.
*292(b) Proceeding with the officials of the union to set an initial meeting date, not to exceed ten days from entry of this order, and thereafter proceeding to bargain upon consecutive days during regular business hours until all contract proposals on mandatory and lawful subjects have been considered and actions taken in relation thereto.
The order further provided:
3. That in order to assure against further violations of this court’s judgment, this court assesses against [the company] a prospective fine in the amount of one hundred dollars ($100.00) per day if compliance with this order has not been commenced within seven (7) days of the date of this order.
On further motion by the Board the court will take such other and further action and grant such other relief as appears just, reasonable, and necessary at that time.
See Special Master’s Findings of Fact and Conclusions of Law, reprinted at Appendix (A) 1, 2.
B. Events From September 1977 to June 1978
Upon issuance of the court’s contempt and purgation order, the company’s attorney, Richard Brackhahn, sought to arrange a bargaining session with the union within ten days.4 Because the union was unable to meet within that time, the parties agreed to begin negotiations on September 30, 1977. The parties later agreed that, at least initially, they would not meet on consecutive days as provided by the order.5
At the September 30 meeting the union presented a six-page contract proposal covering a variety of economic and noneconomic matters. Several of these matters were discussed. The parties first considered the union’s proposal that departmental seniority based upon an employee’s continuous length of service govern layoffs and recalls, *293and that plantwide seniority based upon length of service determine “bumping rights.”6 The company stated that it would prefer a seniority system based upon the ability of the employees. The parties also discussed the union’s proposal that the contract include a grievance procedure culminating in binding arbitration, and that it contain a no strike/no lockout clause. The company stated that it had no objection to the principle of binding arbitration. Finally, although the union’s proposal was silent on this issue, the parties discussed the length of the contract. The company proposed a three-year term; the union did not object.7
Further negotiating sessions were held on October 10 and 11,1977. The union made a wage proposal, asking for across-the-board increases for all employees of 35 cents per hour in the first and second years, and 30 cents in the third year. The company rejected this proposal, claiming that it would place the company in a noncompetitive situation and might lead to a cutback in operations at the Ridgway facility. At the close of the negotiating session the company requested a break of four to five weeks so that it could prepare a counterproposal. The union agreed to the delay.8 There is some evidence suggesting that the company had already prepared a proposal, and that its request for a postponement was not made in good faith.9
The next negotiating session was held on November 17, 1977. The company presented a full counterproposal, the terms of which were quite disadvantageous to the union. The proposal included (1) a management rights clause reserving to the company all “inherent rights” except those specifically contracted away10; (2) three-year wage increases for current workers by name rather than job classification 11; (3) a clause giving the company the right unilaterally to grant pay at higher rates to current or newly-hired employees; (4) a clause reserving to the company the right to set wage rates for new or changed jobs; (5) 54 rules by which employees could be disciplined; (6) a no strike/no lockout clause with individual union officer liability in the event of illegal union activities; and (7) a clause stating that for purposes of layoff and recall seniority would be determined by the company on the basis of an employee’s physical and mental fitness, ability to do the job, and experience and continued length of service. Despite the company’s earlier statement that it had no objection to the principle of binding arbitration, its proposal also called for a grievance procedure culminating only in nonbinding arbitration.12
After receiving the company’s counter-proposal, the union drew up a second proposal that bridged some of the gaps between the company and union positions. This proposal adopted much of the language *294of the counterproposal, and made significant concessions. In particular, on the question of seniority the union proposed that plantwide seniority based on length of service be used for layoffs and recalls, but that employees retained or recalled must also have the qualifications necessary to perform the work in question.13 The union further stated that it would agree to allow the company to use temporary employees for as long as 90 days without the accrual of any seniority rights.14
The union’s second proposal and the company’s counterproposal were discussed at meetings held on November 29 and 30,1977. Although seniority, grievance procedures, union security, management rights, use of temporary employees, and distribution of overtime were discussed at length, no agreement was reached on these matters. Agreement was reached on several minor issues, such as posting of seniority lists.15 At the November 30 meeting company attorney Brackhahn stated that he would like to postpone further negotiations until January because of illness in his family. The union stated that it would accept this delay.16
Although no meetings were held during December, several significant events occurred. First, the company decided to withhold an annual pay increase that it had given to its Ridgway employees during previous Decembers. The company justified this action on the ground that pay raises were barred while negotiations were in progress. When employees asked the plant manager, Charles McGuire, why they had not received raises, he told them that wages were “frozen” as a result of the union negotiations.17 He further stated that “if the Union was not here [at the Ridgway plant] there would be a raise as normal, as the Company has always given them.” 18
The second event involved a letter sent by company attorney Brackhahn to plant manager McGuire, informing him of the status of the negotiations.19 In this letter Brackhahn indicated that the company had adopted a rigid negotiating position. He stated that “no agreement has been reached on employees’ wages” or on “employee insurance or hospitalization protection,” because the union’s position “remained economically unsound” and the company negotiators were “not about to agree to [the union’s] position on these and many other issues discussed.”20 The letter further stated that the union’s request for two 15-min-ute break periods was “ridiculous,” that union membership would never be a condition of employment at the plant, and that the company would insist that all 54 work rules contained in its counterproposal be included in any contract.21 McGuire passed the letter on to his supervisors, some of whom permitted the employees to read the letter. In addition, a handwritten version of the letter, copied by one of the employees, was circulated.22
A dispute later arose regarding the contents of this letter. Attorney Brackhahn *295submitted to the NLRB a copy of the letter which differed in several material respects from the handwritten version. Brackhahn’s copy suggested that the company’s opposition to union demands was not rigid, and in general cast the company’s bargaining position in a more favorable light.23 It now appears that the copy submitted to the NLRB by Brackhahn was a fabrication and that the handwritten version is accurate.24
Two more bargaining sessions were held in early January 1978, but little progress was made. At those meetings the company said that it would be unable to meet during February because one of its negotiators would be away on a business trip.25 Additional sessions were scheduled for January 16,17, 23, and 24. Because of a snowstorm, however, the first two meetings were can-celled. At the sessions on January 23 and 24 the union continued its efforts to find common ground. It offered a third contract proposal which incorporated the minor agreements that had been reached at prior meetings, and which made significant concessions in the area of management rights, wages, holidays, and paid vacations. With respect to wages, the union sought a first-year increase that would equalize wages for employees in five job classifications, and across-the-board increases of 20 and 25 cents per hour in the second and third years of the contract.26 The company rejected this proposal, stating that the wage increase was still too high. The company further stated that it was dissatisfied with the union’s proposed grievance procedure. The company did agree to several minor proposals, such as a clause setting the time for distribution of paychecks.27 No other significant agreement was reached, however. The company continued to insist that the union accept the major provisions of its November 1977 counterproposal.28
At both the January 23rd and January 24th meetings the union stated that it would like to meet throughout the week. The union also suggested that the company find a substitute for the representative who would be away during February, so that negotiations could continue through that month. The company rejected both suggestions and stated that it would not meet again until March. The union felt that the company was taking advantage of its acquiescence in previous delays, and threatened to complain to the NLRB and to terminate negotiations. Although negotiations were not terminated, the union did subsequently complain to the NLRB.29
On March 10, before the next negotiating session was held, a few employees who were *296disaffected with the union asked plant manager McGuire if they could call a plantwide meeting to discuss withdrawing support from the union.30 McGuire allowed a meeting to take place on paid company time, even though this was in contravention of past practice and in violation of the work rules contained in the company’s 1977 counterproposal.31 The meeting, which lasted about 30 minutes, failed to produce a vote to oust the union.32
Bargaining sessions were held on March 16th and 17th. The company stated that its Ridgway facility was in “bad shape” economically.33 Seniority, wages, holidays, and paid vacations were discussed, but no progress was made. The union asked for consecutive-day bargaining, but the company refused, claiming that such meetings were unnecessary. It stated that it would meet again on April 5, 6, and 7, at which time it would present a final proposal to the union. The union agreed.34
At the April 5th meeting the union and the company agreed on the number of holidays, on insurance and hospitalization plans, and on a pension plan. At the April 6th meeting the company presented a proposed seniority list, which ranked all current employees according to ability, experience, and length of service. This seniority proposal was tied to a new wage proposal, which was slightly better than the company’s first offer of November 1977.35 The union responded on April 7th by presenting a new wage proposal of its own. This proposal, which demanded less than the January proposal, called for increases on the basis of employee job classifications in the first year; small across-the-board increases would be made in the second and third years.36 The company conceded that the union had “come a long way,” but rejected the proposal.37 It further stated that if agreement could not be reached on wages, it would not discuss any other union proposals. After a long discussion, the company claimed that it had nothing further to offer and wanted to adjourn for two weeks. The union demanded that the company make a final offer on wages at that time.38
The next meetings were held on April 19th and 20th. A Federal Mediator attended at the union’s request. At the April 20th meeting the union suggested a system of “classification” seniority. Under this sys*297tem layoff and recall would be determined on the basis of tenure within a designated job classification. Bumping rights would be based on plantwide hire dates and ability to perform the work. No agreement was reached.39
Because the Mediator was unavailable, no sessions were held during May.40 The parties met again with the Mediator on June 19th, 20th, 21st, and 22nd. The company offered a slight change in its position on seniority. It drew up a new seniority list which grouped all present employees into separate departments and provided for department layoff and recall in accordance with the previous managerial ranking of employees. The union stated that it would accept this system if the company would agree to base bumping rights upon the employees’ hire dates and ability to perform the work.41 The company refused, stating that it would not accept any seniority system that did not allow for unilateral ranking of the employees by management.42 After several days of discussion devoted almost solely to the seniority issue, the Mediator declared an impasse.43 The union wished to continue meeting, but the company withdrew, claiming that seniority was the key to resolution of all other major issues.44
C. Events From June 1978 to December 1978
The union continued to request further meetings, but the company stated that it would not meet again unless the union would agree to its position on seniority.45 In late September 1978 the company withdrew recognition from the union on the ground that it had a good faith doubt as to the union’s majority status. This claim was based upon a petition signed by a majority of the Ridgway employees to the effect that they no longer wanted the union to represent them.46
In early October 1978 the company granted a wage increase averaging 20 cents per hour to the employees of the Ridgway facility. This wage adjustment was intended in part to compensate employees for the company’s failure to grant a wage increase in December 1977. The average raise exceeded the highest amount offered by the company47 to the union during negotiations. Two of the employees who were responsible for circulating the anti-union petition were given the largest wage increases.48 Additional raises ranging from five to six percent were granted in December 1978 in accordance with the company’s established practice.49
D. Second Contempt Proceeding
On September 22, 1978, two days before it withdrew recognition from the union, the company asked this court to dissolve the September 16, 1977 contempt and purgation order on the ground that negotiations had *298reached a bona fide impasse.50 The NLRB responded to this motion by filing an opposition statement and by moving for another civil contempt adjudication. In its motion the NLRB claimed that the company had violated the September 16, 1977 contempt and purgation order by failing to bargain with the union in good faith and by failing to meet with the union at reasonable intervals during the period September 30, 1977 through June 22, 1978. It further alleged that the company had violated the court’s order by refusing to meet with the union after June 22, 1978 and by withdrawing recognition from the union. It asked this court to assess fines and to increase prospective fines.51
In March 1979 this court appointed a Special Master to hear evidence and make recommended findings of fact and conclusions of law with respect to the company and NLRB motions. The Master conducted several hearings in September 1979.52 He issued his report on December 16, 1980.53 The Master found that the company had bargained in good faith throughout the period September 16, 1977 to June 22, 1978. He rejected the NLRB’s claim that the company had attempted to undermine the union by (1) repeatedly delaying negotiations; (2) withholding the annual wage increase; (3) allowing employees to read the letter from Brackhahn to McGuire; and (4) permitting the anti-union meeting to be held on paid company time.54 The Master also found that a bona fide impasse existed as of June 22, 1978, and that the company therefore properly refused to continue bargaining with the union.55 Finally, he found that upon receiving the anti-union petition the company had reasonable grounds to doubt the union’s majority status and properly withdrew recognition.56 *299The Master concluded by recommending that the NLRB’s motion for a further contempt order be denied and that the company’s motion to dissolve the prior contempt order be granted.57 The NLRB filed exceptions.
II. DISCUSSION
A. The NLRB’s Burden of Proof
At the outset of the legal discussion contained in his report the Special Master stated that, to meet its burden of proof, the NLRB is “required to produce clear and convincing evidence in support of its allegations of contemptuous conduct * * *.”58 Despite this reference to the clear and convincing evidence standard, it appears that the Special Master actually imposed a far heavier burden of proof on the NLRB. Later in his report he suggested that the Board must prove its case beyond a reasonable doubt: he stated that, “if there is ground to doubt the wrongfulness of the conduct, the Company should not be held in contempt.” 59 The Master also stated that “the proof must demonstrate that there existed a wilful and deliberate disregard of a court decree.”60 As we explain below, the Master applied the wrong standard of proof; the NLRB should not have been required to do more than produce clear and convincing evidence in support of its allegations.
As a general rule, the “reasonable doubt” standard of proof and the “willfulness” requirement are applicable only in criminal contempt proceedings.61 In civil contempt proceedings the clear and convincing evidence standard applies62 and the failure to comply with the court decree need not be intentional.63 The explanation *300for this distinction lies in the different purposes of criminal and civil contempt. Criminal contempt is used to punish intentional misconduct.64 Thus the procedural safeguards that attend any criminal proceeding, including the reasonable doubt standard of proof, come into play. In addition, the recalcitrant party’s state of mind is a central issue. Civil contempt, on the other hand, is a remedial sanction used to obtain compliance with a court order or to compensate for damage sustained as a result of noncompliance.65 Thus criminal procedure safeguards are not applicable.66 Moreover, the intent of the recalcitrant party is irrelevant.67
The Master never disputed these general principles. He noted, however, that this is the third stage of a three-stage civil contempt proceeding.68 Such proceedings involve (1) issuance of an order; (2) following disobedience of that order, issuance of a conditional order finding the recalcitrant party in contempt and threatening to impose a specified penalty unless the recalcitrant party purges itself of contempt by complying with prescribed purgation conditions; and (3) exaction of the threatened penalty if the purgation conditions are not fulfilled.69 The Master apparently conceded that the clear and convincing evidence standard should be applied at the second stage, and that no showing of willfulness would be necessary. He suggests, however, that the third stage is punitive in nature since a fine may be assessed.70 Thus the wrongfulness of the recalcitrant party’s conduct must be shown not just by clear and convincing evidence, but beyond any ground for doubt.71 Moreover, the party’s state of mind is crucial.72
*301These conclusions as to burden of proof are erroneous. The third stage of three-stage contempt proceedings does not lose its civil character simply because a penalty may be imposed. The third-stage proceeding is part of the process by which the court obtains compliance with its decrees; it supports the second-stage contempt and purgation order. At the second stage the recalcitrant party is put on notice that unless it obeys the court’s decree and purges itself of contempt it will be fined or face other sanctions. At the third stage the court determines whether the party has fulfilled the purgation conditions. If it has, it escapes the threatened penalty; if it has not, the penalty is imposed.73 To hold that the third-stage proceeding is punitive or criminal would be to hold that a court may never bring about compliance with its orders by imposing prospective penalties in civil proceedings 74
In fact, we have already rejected the claim that the third stage of three-stage contempt is criminal in nature. Brhd of Locomotive Firemen & Enginemen v. Bangor & Aroostook R. Co., 380 F.2d 570 (D.C.Cir.), cert. denied, 389 U.S. 327, 88 S.Ct. 437, 19 L.Ed.2d 560 (1967)75 Our reasoning in that decision turned on the relationship between the second- and third-stage proceedings:
[T]he fine-imposing [i.e., second-stage] proceeding, to coerce compliance, set a future performance date. A later assessment of the fines so imposed, upon a showing of non-compliance, is not sufficient to require the classification of such an assessment as separately punitive. * * Because a question of fact must be determined at this assessment [i.e., third-stage] proceeding (that of non-compliance by the specified performance date), the proceeding does not necessarily become a punitive, criminal action wherein the recalcitrant party must be afforded *302the procedural safeguards of a criminal contempt charge.
380 F.2d at 578-579 (emphasis in original; footnote omitted).76 We indicated that the third-stage proceeding is neither criminal nor punitive in nature. Accord, Hoffman v. Beer Drivers & Salesmen's Union Local No. 888, 536 F.2d 1268, 1273 (9th Cir. 1976). See also United States v. Work Wear Corp., 602 F.2d 110 (6th Cir. 1979); United States v. Spectro Food Corp., 544 F.2d 1175, 1183 (3d Cir. 1976).77
Because third-stage proceedings remain civil in character, neither the reasonable doubt standard nor the willfulness requirement are applicable; only the clear and convincing evidence standard should be employed. The Master’s decision to impose a more rigorous burden of proof in this case may have had a substantial impact on his findings of fact and conclusions of law. It is quite possible that his decision would not have been in favor of the company if he had not required the NLRB to show that the company had acted in “wilful and deliberate disregard” of the contempt and purgation order and that the company’s conduct was wrongful beyond any ground for doubt.78
For example, as we stated in Part I-D supra, the Master found that the NLRB had failed to substantiate its claim that the company had attempted to undermine the union during the period September 1977 to June 1978.79 If a less rigorous standard of proof had been applied, his conclusion might have changed. The NLRB was able to point to a substantial body of evidence in support of its position. First, the company withheld the annual wage increase in December 1977; moreover, the plant manager told employees that they would have received the increase if it were not for the union’s presence. We suggest below that the company may not have been free to withhold the increase. See Part II -B infra. If it was not, then its action and the plant manager’s explanation are *303strongly indicative of bad faith.80 Second, the company repeatedly delayed negotiations, despite the union’s objections; its justifications for these delays were often quite flimsy.81 The company’s refusal to accede to union requests for more meetings is not consistent with the spirit of the September 16, 1977 contempt order.82 Third, the company permitted and may even have encouraged disaffected employees to hold an anti-union meeting on paid company time, even though such meetings were contrary to company policy.83 Fourth, employees were shown the letter from Brackhahn to McGuire stating that the company would not give in to the union on several key issues. Management may have hoped that the letter would convince employees that further support of the union was futile. Finally, the company attempted to submit a fabricated, less damaging, version of the letter to the NLRB and the Master84; certainly, this action is probative on the question of bad faith.
We remand so that the Master may reconsider his decision in light of the proper standard of proof. He need not conduct a new hearing; the correct standard may be applied to the existing record.
B. Legal Principles to be Applied in Determining Whether Bargaining was in Good Faith
In addition to our conclusion that the Master imposed an unduly heavy standard of proof on the NLRB, we find that he may not have applied the proper legal principles in determining whether the company bargained in good faith.
1. Relevance of terms of company's counter-proposals
Before examining the facts to determine whether the company had bargained in good faith, the Master stated that the evidence must be viewed as a whole, and that the company’s intent must be determined from the “totality of circumstances.” 85 He also observed that “[i]n general, the obligation to meet and confer in good faith does not compel the parties to agree on a proposal or yield concessions and ‘[a]damant insistence on a bargaining position ... is not in itself a refusal to bargain in good faith.’ ”86 And he stated that “[t]he right to Union representation . . . does not imply the right to a better deal.” 87
The Master has not misstated the law: the company was not required to make concessions or to yield any position fairly maintained. However, it was under an obligation to make a sincere, serious effort to adjust differences and to reach an acceptable common ground. See NLRB v. Insurance Agents’ Union, 361 U.S. 477, 485, 80 S.Ct. 419, 425, 4 L.Ed.2d 454 (1960); NLRB v. Truitt Manufacturing Co., 351 U.S. 149, 76 S.Ct. 753, 100 L.Ed. 1027 (1956); Sign & Pictorial Union Local 1175 v. NLRB, 419 F.2d 726 (D.C.Cir.1969); A. H. Belo Corp. v. NLRB, 411 F.2d 959, 969 (5th Cir. 1969), cert. denied, 396 U.S. 1007, 90 S.Ct. 561, 24 *304L.Ed.2d 498 (1970). In determining whether the company fulfilled this obligation, the terms of its bargaining proposals may be examined. Rigid adherence to disadvantageous proposals may provide a basis for inferring bad faith. If a company insists on terms that “no ‘self-respecting union’ could brook,” Vanderbilt Products, Inc. v. NLRB, 297 F.2d 833 (2d Cir. 1961), it may not be fulfilling its obligation to bargain. See United Steelworkers of America v. NLRB, 441 F.2d 1005, 1010 (D.C.Cir.1970), cert. denied sub nom. Florida Machine & Foundry Co. v. NLRB, 409 U.S. 846, 93 S.Ct. 50, 34 L.Ed.2d 87 (1971) (insistence upon “a particularly disadvantageous proposal” may be basis for inferring “some degree of bad faith”); NLRB v. Strauss & Son, Inc., 536 F.2d 60, 64 (5th Cir. 1976); NLRB v. Reed & Prince Manufacturing Co., 205 F.2d 131, 134 (1st Cir. 1953).88
The Master nowhere explicitly recognized that adherence to a disadvantageous proposal may constitute evidence of bad faith. This principle would seem to be of particular relevance here. As the Master’s own findings of fact reveal, the company’s contract proposals were quite harsh. The initial proposal would have given the company virtually unilateral control over hiring and discipline of employees, their layoff and recall, and the amount of their compensation. The company also insisted on a no strike/no lockout clause, without the normal quid pro quo of binding arbitration.89 During the course of negotiations the company’s position changed only slightly. It did make relatively insignificant concessions on a number of issues. For example, its final wage proposal was somewhat better than the first. However, all wage offers were limited to named, current employees; the company refused to make an offer keyed to job classifications.90 Moreover, the company never budged from its position that a seniority system would be unacceptable unless it was based on management’s ranking of employees.91
We do not mean to hold that the company’s proposals could not be justified. The Master does state that the company was in poor financial health and “could afford only a modest wage agreement.” 92 He also suggests that the company insisted on a seniority system based on the ability of the worker because it wished to ensure that capable workers would not be laid off during non-peak periods.93 But these explanations are not fully satisfactory. The fact that the company could afford only a modest wage agreement does not explain why it could not key its wage offer to job classifications.94 Moreover, the union’s final seniority proposal explicitly recognizes management’s desire to retain capable workers.95 The record as it now stands suggests that the Master may not have recognized that unjustified adherence to an unfavorable proposal may constitute evidence of bad faith. Thus, on remand, the Master should give express attention to this possibility in reviewing his conclusions.
2. Significance of decision to withhold annual wage increase
The Master rejected the NLRB’s claim that the company’s decision to withhold the annual wage increase was an act indicative of bad faith. Relying on the Supreme Court’s decision in NLRB v. Katz, 369 U.S. 736, 746-747, 82 S.Ct. 1107, 1113, 8 L.Ed.2d *305230 (1962), he stated that an employer could not unilaterally continue preexisting discretionary wage increases during the course of negotiations. Here, although the wage increases were customarily granted in December, they were based on discretionary merit criteria. Thus he reasoned that the company’s decision to withhold the increases until after bargaining had concluded was justified.96 We are not convinced that the Master correctly applied the principles set forth in Katz.
In Katz the Supreme Court held that an employer cannot unilaterally change conditions of employment during the course of negotiations with a union; if the company decides to alter a preexisting practice, it must give the union an opportunity to bargain over the change. The Court applied this principle to distinguish between automatic wage increases to which the employer has already committed itself and wage increases that are “in no sense automatic, but [are] informed by a large measure of discretion.” 369 U.S. at 746, 82 S.Ct. at 1113. The employer would be required to grant the automatic wage increase unless it notified the union that it wished to make a change in the existing conditions of employment and gave the union an opportunity to bargain over the change. However, the employer could not unilaterally grant a nonautomatic, discretionary wage increase since “[t]here simply is no way in such a case for a union to know whether or not there has been a substantial departure from past practice * * Id. Thus the union could “insist that the company negotiate as to the procedures and criteria for determining such increases.” Id. at 746-747, 82 S.Ct. at 1113.
As the Master stated in his report, the wage increases in question here contained both automatic and discretionary elements. The record strongly suggests that the practice of granting raises every December was an established benefit expected by the employees. However, the increase was not entirely automatic; the amount of the increase apparently depended on an employee’s job classification.97 Under the circumstances, if the company wished to discontinue entirely the practice of granting annual wage increases, it was required to bargain with the union first; Katz requires an employer to consult wkith the union before changing an existing condition of employment. But even if it did not wish to- discontinue the practice of granting annual wage increases, it was required to consult with the union. The company could not unilaterally determine the size of the increase that each employee would receive; it would be required to bargain over this discretionary element.98
*306On the basis of the record as it now stands, we cannot determine whether the company fulfilled its obligations under Katz. The Master notes in his report that the company informed the union by letter that it would withhold the December wage increases.99 In fact, the letter stated that the company would not make any wage increases during the bargaining process “that the law prohibits.”100 We do not believe that by making this vague statement the company satisfied its duty to consult with the union. Indeed, the letter is misleading. The law does not prohibit wage increases during bargaining. It simply requires consultation with the union.101 On remand the Master should reconsider his conclusion that the employer’s action was justified. If it was not, then the company’s action may be evidence of an attempt to undermine the union, and indicative of bad faith.102 The Master should direct his attention to the precise nature of the annual wage increase. He should also consider whether the company took any action other than sending the letter that might have fulfilled its obligation to bargain.
III. CONCLUSION
We remand this case so that the Special Master may apply the proper standard of proof in determining whether the company violated the September 16, 1977 contempt and purgation order. The Special Master should also give special attention to the question whether the company’s adherence to disadvantageous proposals supports an inference of bad faith. Finally, he should reconsider his finding that the company properly withheld the December 1977 wage increase. If the Master concludes that his initial determination was incorrect and decides in favor of the NLRB, he should make recommendations as to appropriate sanctions.
Remanded to the Special Master with instructions.