Crane Sheet Metal, Inc.

CRANE SHEET METAL, INC. 75 Crane Sheet Metal, Inc. and Sheet Metal Workers Local Union No. 2 Hartley Sheet Metal Company, Incorporated' and Sheet Metal Workers Local Union No. 2. Cases 17-CA-7902 and 17-CA-7903 March 3, 1980 DECISION AND ORDER BY CHAIRMAN FANNING AND MEMBERS JENKINS AND PENELLO On November 7, 1979, Administrative Law Judge Ivar H. Peterson issued the attached Deci- sion in this proceeding. Thereafter, the General Counsel filed exceptions and a supporting brief, and Respondents filed answering briefs, cross-ex- ceptions, and briefs in support of their cross-excep- tions. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the Na- tional Labor Relations Board has delegated its au- thority in this proceeding to a three-member panel. The Board has considered the record and the at- tached Decision in light of the exceptions and briefs and has decided to affirm the rulings, find- ings, and conclusions of the Administrative Law Judge only to the extent not inconsistent herewith. The issue presented here is whether Respondents violated Section 8(a)(5) of the Act by disavowing a contract negotiated by an employer association of which they were members. The General Counsel alleges and Respondents deny that the Association was authorized to negotiate a binding agreement for them. Respondents are sheet metal contractors located near Pittsburg, in southeast Kansas. Prior to 1975, Respondents had bargained collectively with Local 475 of the Sheet Metal Workers International Union. In 1975 Local 475 merged with Sheet Metal Workers Local Union No. 2 (the Union herein). The Union's geographical jurisdiction had been generally coextensive with that of Sheet Metal and Air Conditioning Contractors National Association, Inc., Kansas City Chapter (SMACNA-KC or the Association), with which it bargained in a multiem- ployer unit consisting of the Association's employ- er-members. SMACNA-KC's bylaws authorize it to negotiate for its members and to bind them to the labor agreements it executes. Upon the Union's accession to Local 475's former territory, SMACNA-KC, at the Union's suggestion, extended its geographical limits to remain coextensive with the Union's. SMACNA- ' The Administrative Law Judge corrected the company name pursu- ant to a motion made at the hearing. However, the company name was further corrected at the hearing to that appearing in the present caption. 248 NLRB No. 15 KC approached southeast Kansas contractors, in- cluding Respondents, about becoming members. Respondents agreed.to allow SMACNA-KC to ne- gotiate with the Union for them in 1975, on a trial basis, with the reservation, known to the Union, that any agreement negotiated would be subject to their approval. SMACNA-KC negotiated an agreement, running until June 30, 1977, and Re- spondents approved it. Later in 1975 Respondents each sent the Association $250 as a membership fee. SMACNA-KC did not send Respondents copies of its bylaws. Its executive director, Robert Baker, told Respondents that they need not pay pe- riodic association dues because they were not lo- cated in its immediate service area. He also in- formed them that the next contract would be one document covering both the Kansas City area and the southeastern area. In early 1977 SMACNA-KC sent the Union a list of its members for which it would be bargain- ing in the upcoming contract negotiations. Not having added Respondents' names to the list, Ex- ecutive Director Baker had a secretary type at the bottom of the list the addition, "All South Area Contractors." SMACNA-KC and the Union began bargaining over the terms and conditions to govern both the Kansas City area and the southern area, also known as the southeastern, or Pittsburg, area. On June 22, 1977,2 Baker met with Respondents and asked them if they wanted him to negotiate for them. They told him that they did, but again limit- ed his authority to negotiating an agreement sub- ject to their approval. This time, however, the Union was not informed of such a limitation. A few days later, SMACNA-KC and the Union reached an agreement ratified by the SMACNA- KC membership on June 25, covering both the Kansas City and the southeastern areas. Respon- dents were not notified of the ratification meeting. 3 On July 1, SMACNA-KC sent Respondents copies of the wage scale negotiated for their area. Respon- dents informed SMACNA-KC that they did not approve the contract. At a further meeting held on July 19, Respondents, SMACNA-KC, and the Union attempted unsuccessfully to reach a separate agreement to accommodate Respondents' difficul- ties with the negotiated agreement.4 a All further dates are in 1977. ' It is not clear from the record whether ratification was understood to be a prerequisite to execution of the contract and, if so, what kind of vote was required for ratification. It is clear from the bylaws, however, that approval did not have to be unanimous. 4 According to SMACNA-KC Executive Director Baker, another sep- arate agreement covering wage rates for light commercial and residential jobs was still to be negotiated. This does not affect the legal status of the negotiated agreement. Joseph McDaniel, an Individual Proprietorship d/b/a Custom Colors Contractors, 226 NLRB 851, 854 (1976). CRANE SHEET METAL, INC 75 76 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The Administrative Law Judge concluded that Respondents never manifested an unequivocal in- tention to be bound by the Association's negotia- tions with the Union. He found that, not having re- ceived copies of the bylaws, Respondents were un- aware of the fact that SMACNA-KC membership carried with it complete delegation of bargaining authority and they never assented to such a delega- tion. Therefore, he reasoned, Respondents can be held only to the limited authority they gave to the Association. In the Administrative Law Judge's view, Respondents' failure to communicate such a limitation of authority to the Union was irrelevant because Respondents did not, by their own con- duct, clothe the Association with full authority. We view the situation differently. There is no question of the lack of timely communication to the Union of a withdrawal of authority from the Association. The sole issue, we agree with the Ad- ministrative Law Judge, is whether the Association was clothed with authority to bind Respondents in the first place. The Association had negotiated for Respondents in the past, albeit on a trial basis and with limited authority. When, in 1977, the Associ- ation truthfully informed the Union that the "south area contractors" (including Respondents) had become SMACNA-KC members, the Union was justified in concluding that the trial status of the Association's authority during the prior negotia- tions had been converted into a grant of the full authority which was normally associated with membership and which the bylaws expressly pro- vided. Such apparent authority is sufficient to bind Respondents to an agreement reached by the Asso- ciation absent timely withdrawal. See Lutheran Homes and Hospitals, Inc. d/b/a Fairlawn Care Center, 233 NLRB 1025 (1977); Homer Gale and Howard Gale, Co-Partners, d/b/a American Sign & Neon Company, 176 NLRB 1049, 1052 (1969); Ray Hopman d/b/a Ray Hopman Plumbing & Heating, 174 NLRB 403, 406 (1969).5 Thus, where no limi- tation on that authority is communicated to the other party until negotiations have concluded and the other party reasonably thinks it has a binding contract, a belated disavowal of authority to bind a party having a duty to bargain cannot relieve such a party of its obligation to honor the contract, whether the authority relied on is actual or only apparent. See University of Bridgeport, 229 NLRB 1074 (1977); The Anaconda Company, 224 NLRB 1041, 1049, 1051 (1976); Welsh Aircraft, Inc., d/b/a I The Administrative Law Judge concluded that Respondents were not bound by the Association's bylaws because they were not aware of them. Whatever effect Respondents' ignorance of the bylaws might have on Respondents' rights as against the Association, however, such a de- fense is not persuasive as against a third party who reasonably could rely on their presumptive validity. Welsh Plastics, Ltd., a wholly-owned subsidiary of Standard Industries, Inc., 219 NLRB 93, 96, fn. 5 (1975). That the Association, by going to Respon- dents after negotiations began and requesting au- thority to negotiate for them, exhibited some doubt as to the authority it then possessed does not change the result. It is not the agent's subjective belief as to the extent of his authority, but the ap- parent authority he exhibits to third parties, that controls the principal's responsibility. See Sunshine Hotels Limited d/b/a Outrigger-Maui, 226 NLRB 31, 32 (1976). In short, the actions of an agent who is clothed with authority, even when he misrepre- sents to third parties crucial facts pertinent to the basis or extent of his authority, may still bind the party having the duty to bargain. See American Sign & Neon Company, 176 NLRB at 1052. Noth- ing in the instant case justifies relieving Respon- dents of the responsibility to honor the agreement negotiated in their behalf by their agent. Therefore, we find that Respondents violated Section 8(a)(5) of the Act by their refusal to honor and abide by the collective-bargaining agreement entered into between SMACNA-KC and the Union. 6 CONCLUSIONS OF LAW 1. Respondents are employers engaged in com- merce within the meaning of Section 2(6) and (7) of the Act. 2. The Union is a labor organization within the meaning of Section 2(5) of the Act. 3. The following employees constitute a unit ap- propriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act: All employees of the employer-members of SMACNA-KC, including Respondents' em- ployees, engaged in, but not limited to, the manufacture, fabrication, assembling, handling, erection, installation, dismantling, conditioning, adjustment, alteration, repairing and servicing of all ferrous or nonferrous metal work of U.S. #10 gauge or its equivalent or lighter gauge and all other materials used in lieu thereof and of all air-veyor systems and air handling sys- tems regardless of materials used including the setting of all equipment and all reinforcements in connection therewith; all lagging over insu- lation and all duct lining; adjusting of all air- handling equipment and ductwork in connec- tion with testing and balancing; the prepara- tion of all shop and field sketches used in fab- rication and erection, including those taken The Union's willingness to attempt an accommodation of Respon- dents' difficulties with the negotiated agreement after it became effective does not, in the circumstances presented here, constitute a waiver of its right to enforce the agreement. CRANE SHEET METAL, INC. 77 from original and engineering drawings or sketches; and all other work included in the jurisdictional claims of Sheet Metal Workers' International Association. 4. At all times material herein, the Union has been, and is, the exclusive representative of all em- ployees in the above-described unit for the pur- poses of collective bargaining. 5. By their failure to honor and abide by the col- lective-bargaining agreement entered into between SMACNA-KC, as their agent, and the Union, ef- fective July 1, 1977, Respondents have engaged in and are engaging in unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices affect commerce within the meaning of Section 2(6) and (7) of the Act. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Re- lations Board adopts as its Order the recommended Order of the Administrative Law Judge and hereby orders that the Respondents, Crane Sheet Metal, Inc., Parsons, Kansas, and Hartley Sheet Metal Company, Incorporated, Coffeyville, Kansas, 7 their officers, agents, successors, and as- signs, shall: 1. Cease and desist from: (a) Failing and refusing to honor and abide by the collective-bargaining agreement effective from July 1, 1977, to June 30, 1980, between Sheet Metal and Air Conditioning Contractors National Association, Inc., Kansas City Chapter, and Local Union No. 2, Sheet Metal Workers International Association, Kansas City, Missouri. (b) In any like or related manner interfering with, restraining, or coercing their employees in the exercise of the rights guaranteed by Section 7 of the Act. 2. Take the following affirmative action: (a) Forthwith honor and abide by the agreement described above in paragraph l(a). (b) Give retroactive effect to the provisions of that agreement to July 1, 1977, and make whole all of their employees in the above-described bargain- ing unit for any loss of wages and other benefits which are provided for in that agreement, due to the Respondents' failure to give effect to its terms, with interest as set forth in Florida Steel Corpora- tion, 231 NLRB 651 (1977). (See, generally, Isis Plumbling & Heating Co., 138 NLRB 716 (1962).) (c) Preserve and, upon request, make available to the Board or its agents, for examination and copy- ' The Administrative Law Judge inadvertently reversed the locations of the two Rspoplldents ing, all payroll records, social security payment re- cords, timecards, personnel records and reports, and all other records necessary to analyze the amount of backpay and benefits due under the terms of this Order. (d) Post at their respective places of business copies of the attached notice marked "Appendix A" 8 for Respondent Crane Sheet Metal, Inc., or the attached notice marked "Appendix B" for Re- spondent Hartley Sheet Metal Company, Incorpo- rated. Copies of said notice, on forms provided by the Regional Director for Region 17, after being duly signed by that Respondent's authorized repre- sentative, shall be posted by each Respondent im- mediately upon receipt thereof, and be maintained by it for 60 consecutive days thereafter, in con- spicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondents to insure that said notices are not altered, defaced, or covered by any other material. (e) Notify the Regional Director for Region 17, in writing, within 20 days from the date of this Order, what steps have been taken to comply here- with. 8 In the event that this Order is enforced by a Judgment of a United States Court of Appeals, the words in the notice reading "Posted by Order of the National Labor Relations Board" shall read "Posted Pursu- ant to a Judgment of the United States Court of Appeals Enforcing an Order of the National Labor Relations Board." APPENDIX A NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all the parties participat- ed, the National Labor Relations Board has found that we have violated the National Labor Relations Act. We have been ordered to post this notice and to abide by its terms. WE WILL NOT refuse to honor and abide by the collective-bargaining agreement effective from July 1, 1977, to June 30, 1980, between Sheet Metal and Air Conditioning Contractors National Association, Inc., Kansas City Chap- ter, and Local Union No. 2, Sheet Metal Workers International Association, Kansas City, Missouri. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of your rights under the National Labor Relations Act, as amended. WlX will. forthwith honor and abide by the above-described agreement. CRANE SHEET METAL, INC~~~~~. 78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD WE WILL give retroactive effect to the provisions of that agreement back to July , 1977, and make whole all employees for any loss of wages and other benefits they lost because we failed to give effect to the agreement, with interest. CRANE SHEET METAL, INC. APPENDIX B NOTICE To EMPLOYEES POSTED BY ORDER OF THE NATIONAL LABOR RELATIONS BOARD An Agency of the United States Government After a hearing at which all the parties participat- ed, the National Labor Relations Board has found that we have violated the National Labor Relations Act. We have been ordered to post this notice and to abide by its terms. WE WILL NOT refuse to honor and abide by the collective-bargaining agreement effective from July 1, 1977, to June 30, 1980, between Sheet Metal and Air Conditioning Contractors National Association, Inc., Kansas City Chap- ter, and Local Union No. 2, Sheet Metal Workers International Association, Kansas City, Missouri. WE WILL NOT in any like or related manner interfere with, restrain, or coerce you in the exercise of your rights under the National Labor Relations Act, as amended. WE WILL forthwith honor and abide by the above-described agreement. WE WILL give retroactive effect to the provi- sions of that agreement back to July 1, 1977, and make whole all employees for any loss of wages and other benefits they lost because we failed to give effect to the agreement, with in- terest. HARTLEY SHEET METAL COMPANY, INCORPORATED DECISION STATEMENT OF THE CASE IVAR H. PETERSON, Administrative Law Judge: On October 3, 1977, Sheet Metal Workers Local Union No. 2, herein called the Union, filed an unfair labor practice charge against Crane Sheet Metal, Inc., herein called Re- spondent Crane, in Case 17-CA-7902, alleging that Re- spondent Crane had committed unfair labor practices within the meaning of the National Labor Relations Act, as amended. On October 4, 1977, the Union filed a simi- lar charge against Hartley Sheet Metal, Incorporated,' herein called Respondent Hartley, in Case 17-CA-7903. I The name of this Respondent appears as corrected at the hearing. On December 21, 1977, the Regional Director for Region 17 of the Board issued separate complaints in each case against the involved Respondent. Under date of December 28, 1977, both Respondents filed separate answers denying the allegations of the particular com- plaint. Upon due notice, a hearing was commenced against Respondent Crane on April 6, 1978, in Case 17-CA- 7902, in Parsons, Kansas. Both Respondents appeared and were represented by counsel. At the opening of the hearing, upon motion of counsel for Respondent Hartley, and with the consent of Respondent Crane, without ob- jection from the General Counsel, and over objections by counsel for the Union, Case 17-CA-7903 was consoli- dated with Case 17-CA-7902. The hearing in the con- solidated case was held on April 6 and 20, 1978. All par- ties were represented by counsel and were afforded full opportunity to be heard, to participate, to introduce and to meet material evidence, and to present argument and briefs. Following the close of the hearing, the General Counsel and both Respondent have filed briefs.2 On the entire record in the case, the briefs, and my ob- servation of the witnesses, I make the following: FINDINGS OF FACT I. JURISDICTION Crane Sheet Metal, Inc., a State of Kansas corpora- tion, is engaged in heating, air-conditioning, and sheet metal contracting business at its facility located at Par- sons, Kansas. Respondent Crane, in the course and con- duct of its business operations within the State of Kansas, annually purchases goods and materials valued in excess of $50,000 directly from sources located outside the State of Kansas. Respondent Crane is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. Hartley Sheet Metal, Incorporated, a State of Kansas corporation, is engaged in heating, air-conditioning, and sheet metal contracting business at its facility located at Coffeyville, Kansas. Respondent Hartley, in the course and conduct of its business operations within the State of Kansas, annually purchases goods and materials valued in excess of $50,000 from sources located within the State of Kansas, which sources, in turn, purchased such goods and materials directly from sources located outside the State of Kansas. Respondent Hartley is an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act. 1. THE LABOR ORGANIZATION Sheet Metal Workers Local Union No. 2 is now, and at all times material herein has been, a labor organization within the meaning of Section 2(5) of the Act. I Along with their briefs, counsel for the General Counsel and for Hartley filed motions to correct the transcript in specified particulars. No objection having been received, and all other proposed corrections ap- pearing appropriate, the motion is granted except as to that requested for p. 122. which appears to be incorrect. CRANE SHEET METAL, INC. 79 III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Issue The issue is whether the Respondents, in joining an employer association, delegated unconditional authority to the association to negotiate collective-bargaining con- tracts binding on the Respondents without their subse- quent approval. I. SMACNA-KC Sheet Metal and Air Conditioning Contractors Nation- al Association, Inc., Kansas City Chapter (SMACNA- KC, or the Association), is an association of sheet metal contracting employers organized to promote the interests of the industry and the public. In 1975, and for some years prior thereto, SMACNA-KC was the collective- bargaining representative of its members in the Kansas City, Missouri, area, in a multiple-employer bargaining unit. As such representative, the Association negotiated and executed collective-bargaining contracts with Local 2 binding upon the members of the Association. At all material times Robert Baker was executive di- rector of SMACNA-KC and as such its agent and prin- cipal executive officer. 2. The southeast Kansas, or Pittsburg, area Coffeyville, Parsons, Chanute, and Pittsburg, Kansas, are towns in southeast Kansas, in a region referred to in the transcript as the Pittsburg, or southeast Kansas, area. All those towns are situated within a radius of about 30 miles, some 100 or more miles south of Kansas City. Re- spondent Crane is located in Coffeyville and Respondent Hartley in Parsons. Oren Crane is president of Crane; Emory Wise is president of Hartley. 3. Pre-1975 Pittsburg bargaining history Prior to 1975 the Pittsburg area was in the jurisdiction of Local 475 of Sheet Metal Workers International Union, which is the parent International of both Local 2 and Local 475. In the spring of 1975, and for 10 or more years prior thereto, there were three contractors in the Pittsburg area who regularly contracted with Local 475. These were the two Respondents, and Heating and Air Conditioning, Inc., of Chanute, Kansas (later known as Huxtable & Associates). The three contractors negotiated with Local 475 as a group, or jointly, with the negotiat- ing position of any two of them generally being adopted as the position of the entire group. However, each con- tractor retained final authority to approve or disapprove any contract negotiated. Crane was normally their spokesman. The resulting contract was a single docu- ment, signed by each contractor individually. The last such contract with Local 475, executed June 29, 1973, was for the period July 15, 1973, to July 15, 1975. The contract describes the "Employer" therein as "Sheet Metal Contractors of Pittsburg, Parsons, Chanute, Cof- feyville, Kansas, and Nevada, Missouri." The employer signatories were the two Respondents; Heating and Air Conditioning, Inc.; Ruskin Mfg. Co.; and K & L Metal Shop, Inc. Where Ruskin and K & L are located is not disclosed. In 1975 contractual wage rates and other employee benefits were lower in the Pittsburg area than in the Kansas City area. 4. The merger of Local 2 and Local 475 In the spring of 1975, Local 475 merged into Local 2 and lost its separate identity. Thereafter, on or about May 16, 1975, J. D. Foster, business manager of Local 2, visited Oren Crane and Emory Wise and introduced himself to them, saying that Local 2 was now represent- ing the union in the Pittsburg area and would do the ne- gotiating for its members. 3 5. The meetings between the Southern Contractors and Foster and Baker; designation of Baker or SMACNA-KC as bargaining representative Around that time, or later, Business Manager Foster suggested to Executive Director Baker that since Local 2 was assuming responsibility in southeast Kansas, and SMACNA-KC's jurisdiction had theretofore been gener- ally coextensive with Local 2's, that Baker accompany Foster to the Pittsburg area and talk to the southern con- tractors about affiliating with SMACNA-KC. Baker agreed. As a result, a meeting was held in Parsons, Kansas, on or about June 19, 1975. Present at this meeting were Foster, Crane, Wise, and Baker. Baker and Foster ex- plained to Crane and Wise the function of SMACNA- KC, and suggested that membership in it would be bene- ficial to the southern contractors, including relieving them of the task of negotiating, and they solicited the Respondents' membership. Crane and Wise inquired about the effect on them and on the area's negotiating patterns amd wage scales of Local 2's entrance into the picture. Crane and Wise were also interested in what Local 2 would do with respect to organizing nonunion shops in the area, there being a substantial amount of nonunion competition. Foster assured Crane and Wise that there would be separate negotiations and contracts for southern Kansas. In addition, Foster drew a line, which he referred to as the "Mason-Dixon" line, across the map of southeastern Kansas, and said that everything above the line would be Kansas City scale, everything below it a lower southeast Kansas scale. As a result of the discussions, Crane and Wise agreed to let Baker handle negotiations for renewal of the 1975 contract on a trial basis, subject to the approval of Crane, Hartley and Mr. Huxtable of Heating and Air Conditioning, Inc.4 On July 1, 1975, in anticipation of the southern con- tractors joining SMACNA-KC, Executive Director Baker proposed to the Association's board of directors I The findings herein as to statements and occurrences in meetings or conversations between the southern contractors, Local 2 Representative Foster, and Association Executive Director Baker, are based on the testi- mony of Crane, Wise, and Baker, which is in substantial agreement in material matters. Foster did not testify. 4Thus, Executive Director Baker testified, consistently with the testi- mony of Crane and Wise: JUDGE PETERSON (interrupting): In other words, you felt clear in your mind that you did not have authonty to finally on your own. commit the contractors? THE WITNESS: That's right. CRANE SHEET METAL, INC. 79 80 DECISIONS OF NATIONAL, LABOR RELATIONS BOARD that, since coverage by SMACNA-KC was historically coextensive with that of Local 2, that Association cover- age be extended to the Pittsburg area. The board agreed and approved appropriate amendments to the bylaws, an action later accepted by vote of the Association's mem- bership. 5 6. The 1975 negotiations Thereafter Baker negotiated with Local 2 and reached tentative agreement on a contract for the southeastern area, which Crane, Wise, and Huxtable approved, but which the area union members rejected in July 1975. Baker and Local 2 continued negotiations, and in Sep- tember a final agreement, approved by the southern area contractors, was reached and signed by SMACNA-KC. During the interim, separate negotiations were conduct- ed between SMACNA-KC and Local 2 with respect to the Kansas City area, which resulted in an agreement signed July 15, 1975. At the request of Baker and Foster the southern contract was made terminable June 30, 1977, the same termination date as that of the Kansas City contract." At some time during their conversations in 1975, Baker told the southern contractors that the 1977 con- tract would be one document covering both areas. 7. The Respondents join SMACNA-KC In October 1975, after the signing of the September agreement, pursuant to a request from Executive Direc- tor Baker, Crane and Hartley sent checks in the amount of $250 each to Baker in payment of the fee for member- ship in SMACNA-KC. Baker advised Crane and Hartley that they would not be required to pay periodic dues to the Association because they were not located in its im- mediate service area. 8. SMACNA-KC bylaws The bylaws of SMACNA-KC contain the following provision in article XIII: 2. Each member authorizes the Association, acting through its Board of Directors to: (a) Negotiate, conclude and execute labor con- tracts in the name of the Association on behalf of, and binding upon, its members. Neither of the Respondents was given a copy of the bylaws, and there is no evidence that the provision in ar- ticle XIII, 2, was called to their attention, or that they were aware of it until the hearing herein. Nor, until after the later 1977 contract was signed, were they advised that by authorizing Baker to negotiate they were waiv- ing their own authority in the matter. 6 Though at the time of the hearing the Association's bylaws had not been physically changed to conform to the actions of the board of direc- tors and the membership, that factor is found not to be of any materiality. I8 n the southern contract, signed September 15, 1975, by Wise, Crane, and a representative of Huxtable, the employers were described, similar to the 1973 contract, as "Sheet Metal Contractors of Pittsburg, Parsons. Chanute, Coffeyville, Kansas, and Nevada, Missouri." However, xecu- tive Director Baker testified that the only contractors covered by that contract were Crane, Hartley, and Huxtable. 9. Events between 1975 and 1977 The Respondents did not receive a copy of their 1975- 77 contract until sometime in 1976. When they did re- ceive it, they discovered certain items to which they had not agreed: (1) an increase in payments to an industry fund of 12 cents per hour, (2) an increase in payments to a welfare fund, and (3) a change in the counties included in the southern area (that is, a shift in the "Mason- Dixon" line). President Wise expressed his displeasure with these changes to Toney Chiaverini, Executive Di- rector Baker's assistant, but neither he nor Crane dis- avowed the contract-though they did not pay the in- crease in industry fund payments. In the period January to mid-March 1977, President Wise told a number of his employees at Hartley that when the contract expired (June 30, 1977) he would go "non-union." On March 21, 1977, Wise sent a letter to Local 2 stating that upon expiration of the contract he intended to operate an open shop. Local 2 responded with a letter stating that it desired to open negotiations for a new contract to replace the present one. Respon- dent Crane received a similar letter. 10. The 1977 negotiations Respondent Hartley replied to the union letter of March 21 with a letter dated April 1, 1977, requesting I week's notice of any proposed negotiating meetings. However, without further notice to the Respondents, ne- gotiations for renewal of the expiring contract were un- dertaken between SMACNA-KC and Local 2 beginning in April 1977, in a unit including both the Kansas City and the southern contractors. Subsequently a meeting, arranged by SMACNA-KC Executive Director Baker, was held on June 22, 1977, in Parsons, Kansas. Baker, Huxtable, Crane, and Wise were present. Baker asked the contractors whether they wanted him to negotiate the contract for them, and of- fered to leave the room while they discussed the matter. The trio replied that that was unnecessary. Wise told Baker that he had not paid dues to the Association and asked whether Baker wished him to withdraw. Baker re- plied that Wise should stay. The contractors then agreed that Baker could negotiate a successor contract provided he could reach an agreement satisfactory to them. Baker advised the contractors of the state of negotia- tions in Kansas City, and outlined the terms on which he thought Local 2 would settle in the Kansas City area. On wages, the figure was $2.425 cents with annual in- creases-which represented an increase in the Kansas City area wage rate of about 18 percent. The three southern contractors indicated that Baker would have to get a better wage arrangement than that for them. The contractors then outlined the terms they wished to be incorporated in a new 3-year agreement, adding that this was not their first, but their "top" offer. 7 7 These terms were: (1) that a money increase of 1.98 over the term of the contract be allocated as Local 2 wished, either to wages or fringe benefits; (2) that any of the $1.98 allocated to wage increases be at 6- month intervals, rather than yearly, as in the existing contract; (3) that the contractors be given a more fasorahle light commercial or residential wage scale on jobs $25,(XX) r less, in order to enable them to meet non- Continued CRANE SHEET METAL, INC. 81 Crane asked Baker to report back as to the status of the negotiations, and Baker was told that any agreement would be subject to the contractors' approval. Baker re- sponded that he would present the contractors' proposals to Local 2.8 On the following day, June 23, 1977, Baker telephoned Crane and told him that Local 2 was considering their offer and was "somewhat" receptive to it. The record does not disclose what efforts Baker made to secure acceptance by Local 2 of the southern contrac- tors' proposals. It does disclose that on June 25, 2 days after Baker's telephonic communication to Crane, SMACNA-KC's membership ratified a contract effective July 1, 1977, to June 30, 1980, between SMACNA-KC and Local 2 covering both the Kansas City and the southeast Kansas area. This contract contained none of the terms proposed at the June 22 meeting by the south- ern contractors. The southern contractors received no notice of the ratification meeting, though they admittedly were entitled to notice under Association procedures. Although that contract continued to maintain a wage dif- ferential between the Kansas City and the southern areas, the differential was substantially reduced. The wage costs provided in the new contract represented an in- crease of about 26 percent for southern area contractors, as compared with 18 percent for the Kansas City area. So far as the record reveals, the first information re- ceived by the southern contractors as to the state of ne- gotiations after June 23 was a memo from the Associ- ation to "All Pittsburg area contractors" dated July 1, 1977, stating that the Association had "successfully nego- tiated a new agreement for all contractors." The memo set out the new wage scale. The Respondents received no further information as to the rest of the terms of the contract until the hearing, except for what they may have been told in this respect (and that is not disclosed) at a meeting on July 19, 1977, to be described. The 1977 contract did not, however, cover all issues opened by the southern contractors in their proposals of June 22. The question of light residential or commercial terms was left by SMACNA-KC and Local 2 to later negotiations. Under date of July 5, 1977, Executive Director Baker advised the Respondents by letter that they should make their "desires" in such connection known to Union Rep- resentative Krasovec, for Krasovec's "review and delib- eration." I interpret that letter as indicating that further negotiations on that subject on behalf of the Respondents were being left by SMACNA-KC to the Respondents themselves. So far as the record discloses, negotiations on the issue on behalf of the southern area contractors had not begun or resumed at the time of the hearing. The Respondents refused to accept the new agree- ment. union competition (4) that there be a 50-mile free travel one, that is, a zone in which travel pay is not required (5) that the old "Mason-Dixon" line be restored The $1 9 wage increase represented an increase of about I1 percent in the southern wage rate-the same percentage in- crease as the $2 425 proposal represented in the Kansas City wage scale 8 The findings ais to June 22 meeting are from the testimony of Crane and Wise, corroborated or nriot denied h Baker luxtable was not a wit- ness 11. The July 19, 1977, meeting On or about July 19, 1977, a meeting, termed by Ex- ecutive Director Baker a "negotiating" session, was held between Owen Crane, representing the southern contrac- tors, Union Representatives Foster and Krasovec, and Baker. Foster asked what could be done to get the southern contractors to go along with the contract. Crane presented their demands. Foster offered to reduce the ratio of apprentices to journeymen in order to reduce the southern wage cost, and to provide some relief on travel costs, but indicated that he could do nothing more. Crane took the matter under advisement. On the following day Crane informed Baker that the contract was not in his interest and declined to accept it. Wise did likewise. The record does not disclose the position of Huxtable. Baker replied, according to his testimony, that "that was certainly [Crane's] prerogative," although Baker felt that Foster's "offer was a good offer."" B. Conclusions Where an employer unequivocally designates an em- ployer association as his bargaining representative in a multiple-employer bargaining unit to finally conclude an agreement for him, any contract approved by the associ- ation is binding on the employer. Once such bargaining negotiations have begun, an individual employer may not, in the absence of unusual circumstances, withdraw from the bargaining unit, or from his obligation to accept any resulting agreement reached by his bargaining repre- sentative. See, for example, Retail Associates, Inc., 120 NLRB 388 (1958); Hi-Way Billboards, Inc., 191 NLRB 244 (1971), 206 NLRB 22 (1973). As the statement of the principle discloses, a prerequisite to holding the employ- er bound is that "the members of the group have indicat- ed from the outset an unequivocal intention to be bound in collective bargaining by group rather than individual action." Joseph McDaniel. an Individual Proprietorship d/ b/a Custom Colors Contractors, 226 NLRB 851, 852 (1976). In the instant case, the Respondents did not evince an unequivocal intention to be bound by the actions of either Baker, SMACNA-KC, or the Kansas City em- ployers. The only group action conceivably authorized by the Respondents was of the southern area group, not the Kansas City group. And the southern contractors never reached agreement with Local 2; indeed they never, as a group, negotiated with Local 2, except inso- far as Baker may be said to have represented them. In any event, the extent of the authority conferred by the Respondents on Baker or SMACNA-KC was to ne- gotiate on their behalf with Local 2 subject to approval by the Respondents of any agreements reached. Thus, neither Baker nor SMACNA-KC was given authority to finally bind the Respondents without their specific con- sent. As to the 1975 negotiations this is conceded. It is equally true of the 1977 negotiations. I Baker testified, and Crane denied, that Baker also told Crane that the contractors were "bound by" the "bargaining rights," but that he was "not going to fight them" A resolution of that conflict is neither neces- sary nor of substantial assistance in resol ing the issue of the Respon- dents' obligation to accept the 1977 contract CRANE SHEET METAL INC. 81 82 DECISIONS OF NATIONAL LABOR RELATIONS BOARD That this was understood by Baker is apparent from the statements and occurrences at the June 22, 1977, meeting, set out heretofore.10 The Respondents' mem- bership in SMACNA-KC was similarly conditioned, even though not articulated. They were not advised that the membership waived their right to finally approve agreements negotiated by SMACNA-KC. They were not provided with copies of the bylaws, there is no evi- dence or suggestion that they were aware of article XIII, 2; nor were they told, despite Baker's knowledge of their position, that acceptance of membership conferred final authority on SMACNA-KC to conclude agreements for them. The Respondents thus had no reason to apprehend that by joining SMACNA-KC they conferred on it any greater bargaining authority than they did when they au- thorized it, through Baker, to negotiate the 1975 agree- ment. In such a circumstance, acceptance of membership in SMACNA-KC did not evidence a delegation of au- thority by the Respondents to SMACNA-KC to bind the Respondents to a bargaining agreement without their '0 As has been seen, Baker admitted his lack of authority to bind the Respondents in the 1975 negotiations. Despite his belief, expressed at the hearing, that the situation was different in 1977 because the Respondents were then members of the Association, Baker's objective conduct appears to manifest the contrary. Thus, he admittedly came to the June 22, 1977, meeting to ascertain whether the southern contractors wished him to ne- gotiate their contract-a needless inquiry if the contractors had authorized SMACNA-KC to negotiate an agreement for them. In addition, at that meeting the contractors clearly authorized Baker merely to negotiate an agreement on their terms, and in no event authorized him to conclude one. The record discloses no protest or opposition by Baker at that meet- ing to such limitations on his authority, no statement by him of his plena- ry power to bind the Respondents, no indication of anything other than acceptance of his limited role. consent. There was therefore no necessity for the Re- spondents to withdraw from SMACNA-KC in order to prevent SMACNA-KC from concluding a contract with Local 2 binding on the Respondents. In such circum- stances, the fact that the bylaws of SMACNA-KC pro- vide that its members authorize the organization to nego- tiate and execute labor contracts binding on them is thus not controlling. That Local 2 had no knowledge of SMACNA-KC's limited authority to bind the Respondents is also not con- trolling. That an agent, or a third party dealing with him, may misapprehend the extent of the agent's author- ity, does not authorize the agent to bind the principal, at least in the absence of overt conduct by the principal manifesting an apparent intent to clothe the agent with a larger authority. The circumstances here do not warrant such an inference or conclusion. It is consequently found that the Respondent did not at any time indicate an unequivocal intention to be bound by the actions of SMACNA-KC in negotiations with Local 2, without the Respondents' prior specific ap- proval. It follows that the Respondents' actions in refus- ing to be bound by the 1977 contract negotiated by SMACNA-KC did not constitute an unfair labor prac- tice. It will therefore be recommended that the com- plaint be dismissed. In view of those conclusions, it is unnecessary to con- sider other contentions advanced by the Respondents in defense. [Recommended Order for dismissal omitted from pub- lication.]