Muller-Gordon Motor Co.

MULLER-GORDON MOTOR CO. Muller-Gordon Motor Company and Automobile Salesmen's Union, Local 1095, AFL-CIO. Case 20-CA-5145 October 9, 1969 DECISION AND ORDER BY MEMBERS FANNING, BROWN, AND ZAGORIA On April 29, 1969, Trial Examiner George H. O'Brien issued his Decision in the above-entitled proceeding, finding that Respondent had engaged in certain unfair labor practices alleged in the complaint and recommending that it cease and desist therefrom and take certain affirmative action, as set forth in the attached Trial Examiner's Decision. Thereafter, the Respondent filed exceptions to the Trial Examiner's Decision and a supporting brief and the General Counsel and the Charging Party filed answering briefs. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its powers in connection with this case to a three-member panel. The Board has reviewed the rulings of the Trial Examiner made at the hearing and finds that no prejudicial error was committed. The rulings are hereby affirmed. The Board has considered the Trial Examiner's Decision, the exceptions and briefs, and the entire record in this case, and hereby adopts the findings, conclusions, and recommendations of the ial Examiner, as modified herein. The Trial Examiner finds that the Respondent violated Section 8(a)(5) and (1) by refusing to bargain in good faith with the Union and by refusing to be a party to the collective-bargaining agreement agreed to and executed on August 27, 1968, by the Union and the Eastbay Motor Car Dealers, Inc. We agree for the following reasons. The material facts of this case are undisputed and, as more fully set forth by the Trial Examiner, are as follows: The Eastbay Motor Car Dealers, Inc., hereafter the Association, is an association organized, at least in part, to engage in collective bargaining on a multiemployer basis. Respondent has been a member of the Association since 1953. In 1966, the Union and the Association entered into an agreement effective July 15, 1966, and running until June 30, 1968. Included in this agreement was a "most favored nation clause" providing that, if the Union negotiated a more favorable contract with another employer or employers in the area, the Association would have the option of adopting such contract.' On September 1, 1966, the Union executed a contract with a nonmember of the Association, Melrose Motors, Inc., providing for a different method of calculating salesmen's commissions. Shortly thereafter Respondent claimed the option of adopting the "more favorable" 9 Melrose contract. The Union acquiesced, and, thereafter, the Union and the Respondent executed a Memorandum of Agreement, effective October 1, 1966.2 By the terms of this agreement the parties agreed to be bound by all the terms of the Association agreement except those inconsistent with the terms specifically set forth in the memorandum agreement. The only provisions specifically set forth in the memorandum agreement were those providing for the "Melrose method" for salesmen's compensation. Early in 1967 four other members of the association notified the Union that they were exercising their option under the agreement and substituting the "Melrose method" of compensation. On April 13, 1967, the Union sent Respondent a letter attempting to rescind the Memorandum of Agreement entered into October 1, 1966. In so doing, the Union contended that the parties to the original agreement cannot separately take advantage of the "most favored nation" clause. Shortly thereafter, the Union filed a complaint in the Superior Court of the State of California, asking for a declaratory judgment on this point. On September 29, 1967, the court entered a judgment finding that Respondent's October 1, 1966 agreement with the Union was binding and enforceable, and that it had not been rescinded.3 The 1966 Association contract was for a term of 2 years ending June 30, 1968, and, in the absence of notice 60 days prior to the expiration date, was automatically renewable for an additional year. On April 16, 1968,4 the Union sent a letter to the Association, and to each of the independent dealers (nonassociation members) who had signed identical contracts' stating that the Union wanted to make changes in the agreement and listing the desired changes. Respondent did not receive a separate notice. On May 14, 1968, the Association and the Union held their first bargaining session on the new contract. Before that meeting Respondent advised the Association that the Respondent had a valid contract with the Union which had been extended by virtue of the Union's failure to send a notice of 'The clause reads as follows: "It is agreed that, if the Union negotiates a more favorable contract with another Employer or Employers in Albany, Berkeley, Oakland, Alameda, San Leandro or Hayward, the Eastbay Motor Car Dealers, Inc., shall have the option to adopt such contract, the question of `more favorable contract' to be subject to the Board of Adjustment procedures of this Agreement." 'The Trial Examiner in his findings, inadvertently refers to the Memorandum of Agreement of August 1, 1966, when it is clear he means this agreement of October 1, 1966. 'In doing so, the court agreed with the Union that the "most favored nation" clause could only be invoked by the Association, and not by individual members, but further found that the Union's mistake of law in entering into the Memorandum Agreement did not give it the right to rescind the agreement. 'The Trial Examiner in his findings inadvertently refers to a letter dated August 16, 1968, when it is clear that he means this letter of April 16, 1968. 'Approximately 20 independent dealers had signed contracts identical with the Association contract. 179 NLRB No. 4 10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD reopening to Respondent. Thereafter, during one of the early meetings, the Association told the Union that Respondent claimed to have a contract with the Union, and that, therefore, the Association was not bargaining for the Respondent. The Union replied that, in its opinion, its agreement with Respondent had not been extended for another year and. that Respondent would be bound by whatever agreement was reached. On August 17, 1968, the Association signed a contract with the Union effective July 1, 1968, through June 30, 1971. The Respondent now contends that its withdrawal occurred during the term of the 1966-1968 contract, i.e., on October 1, 1966, by, virtue of its memorandum of agreement with the. Union, and that the Union assented to the withdrawal by its conduct in connection with that agreement. Therefore, the Respondent argues, it was not a part of the multiemployer unit in 1968 and was entitled to, individual notice of a desire to modify its separate agreement with the Union, absent which its contract was renewed automatically. As the Trial Examiner, we find no merit in the Respondent's position. Under the Board's decision in Retail Associates,' an employer who engages in multiemployer bargaining is bound by the results of that bargaining unless it clearly evinces at an appropriate time and in an unequivocal manner that it desires to withdraw.' Contrary to the Respondent's contention, we find no indication of any intention on Respondent's part to withdraw from multiemployer bargaining, let alone an unequivocally expressed intention, based on the Respondent's negotiating or entering into the October 1, 1966, agreement. Its notice to the Union of its desire to take advantage of the "most favored nation" clause in the multiemployer contract was a claim of a right under that contract and certainly was not a repudiation thereof. It is difficult to conceive of a situation, except for a clause giving an employer a right of withdrawal during the term of a multiemployer contract, in which an employer could withdraw from a multiemployer unit by virtue of asserting a right to a benefit under the contract, and we do not see how the present facts can be said to present such a situation. Nor did the Respondent indicate by any affirmative conduct that it intended to withdraw. Thus, it did not inform the Union of any such intention, and it did not take any steps to resign from the Association either then or later. Furthermore, Respondent did not at that time attempt to withdraw its authorization of the Association to bargain on its behalf, assuming such a withdrawal of authorization by. a continuing member would be possible under the Association's bylaws. Finally, the Respondent does not point to any language of its October agreement by which Respondent withdrew, but relies solely on the claimed import of the terms, a claimed import with which we do not agree. There is no doubt that the Union, in entering the separate memorandum agreement with Respondent, was granting what it mistakenly believed it was required to give under the multiemployer contract upon request of the individual employer. The declaratory judgment of the court was limited to rights under the "most favored nation" clause, and in holding that both the multiemployer contract and the Respondent' s memorandum agree of October 1, 1966, were in full legal effect and binding, the court was clearly considering only the matter of the changed term pursuant to the claim made by Respondent under that clause . It did not purport to determine Respondent's relationship to the multiemployer unit as a result of the October agreement, and, in fact, under the Act that is a question for this Board. In our view, the Union's action in entering an agreement based upon its mistake of law as to its obligation to accord the more favorable term upon individual demand cannot in any way be construed as constituting a concurrence in withdrawal from the existing unit, even if such withdrawal had been "intended". In this connection, it is to be noted that even if there were individual rights of employers to seek the more favorable terms under the multiemployer unit, this would not necessarily be inconsistent with the continued adherence to such unit; it is well settled that individual bargaining on limited matters is not inconsistent with group bargaining.' As Respondent has never effectively withdrawn from the multiemployer bargaining group, it was bound by the multiemployer negotiations and was under an obligation to execute the contract negotiated by the Union and the Association.' Its failure to do so is a violation of Section 8(a)(5) and (1). Accordingly, we shall adopt the Trial Examiner's Recommended Order including the requirement that Respondent execute the contract negotiated by the Union and the Association. ORDER Pursuant to Section 10(c) of the National Labor Relations Act, as amended, the National Labor Relations Board adopts as its Order the Recommended Order of the Trial Examiner, and '120 NLRB 388. '/d. at 395; Anderson Lithograph Co.. 124 NLRB 920, enfd . sub nom N.L.R.B. v. Jeffries Banknote Company, 281 F.2d 893 (C.A. 9). The Respondent cannot deny the need for Union consent to its withdrawal by analogizing its position with that of employers who were not members of the Association but entered contracts with the Union adopting the terms of the Association contract. 'The Kroger Co., 148 NLRB 569; Sheridan Creations, Inc., 148 NLRB 1503, 1505, enfd. 357 F.2d 245 (C.A. 2), cert. denied 385 U.S. 1005. 'It is not contended that the Respondent's withdrawal occurred at any other time or in any other manner, the sole position being that its rights derive from the October 1, 1966, agreement . But even if it were argued that its letter of July 1, 1968, constituted a notice of withdrawal, this occurred after multiemployer negotiations had begun and hence would require Union consent, which was not forthcoming . Sheridan Creations, Inc.. supra at 1505. MULLER-GORDON MOTOR CO. hereby orders that the Respondent, Muller-Gordon Motor Company, Oakland, California, its officers, agents, successors, and assigns, shall take the action set forth in the Trial Examiner's Recommended Order. TRIAL EXAMINER'S DECISION STATEMENT OF THE CASE GEORGE H. O'BRIEN, Trial Examiner: On February 4, 1969, a hearing was held in the above-entitled matter in San Francisco, California, at which all parties appeared and participated. The complaint, issued by the Regional Director for Region 20 of the National Labor Relations Board on October 24, 1968, is based on a charge filed by the Union on August 2, 1968, and alleges violations of Section 8(a)(1) and (5) of the National Labor Relations Act. Upon the entire record in this case, including my observation of the witnesses, and after due consideration of the briefs filed by counsel for the General Counsel, counsel for the Respondent and counsel for the Union, I make the following: FINDINGS OF FACT 1. THE BUSINESS OF THE RESPONDENT Muller-Gordon Motor Company, herein called Respondent, is a California corporation with an office and place of business in Oakland, California, where it is engaged in the retail sale and servicing of new and used automobiles. Respondent's annual sales at retail exceed $500,000 in value and its annual purchases of goods and materials shipped from points outside the State of California directly to its place of business exceed $50,000 in value. Respondent is an employer within the meaning of Section 2(2) of the Act engaged in commerce and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act. II. THE LABOR ORGANIZATION INVOLVED Automobile Salesmen's Union , Local 1095, AFL-CIO, herein called the Union , is a subordinate body of Retail Clerks International Association and is a labor organization within the meaning of Section 2(5) of the Act. III. THE ALLEGED UNFAIR LABOR PRACTICES A. The Issues and Arguments of Counsel The complaint alleges in substance that Respondent, by virtue of its membership in Eastbay Motor Car Dealers, Incorporated, herein called Association, is legally bound to a certain collective- bargaining agreement , herein called 1968 Industry Contract, executed August 27, 1968, by the Union and the Association covering all new and used car salesmen employed by members of Association, and that Respondent by refusing to be a party to said agreement or to the negotiations which preceded the agreement, violated Section 8(a)(5) of the Act. Respondent in its answer admits that it is and was a member of Association, that all salesmen employed by members of Association constitute an appropriate unit for bargaining and that the Union represents a majority of 11 the employees in said unit. Respondent denies that Association was authorized to negotiate the 1968 Industry Contract on its behalf, and denies that it is a party to or legally bound by any of the terms of said contract. Respondent as an affirmative defense alleges that on October 1, 1966, it entered into a separate agreement with the Union, herein called Memorandum of Agreement, that this separate agreement incorporated by reference the terms of an agreement, herein called 1966 Industry Contract, between the Association and the Union effective July 15, 1966, not inconsistent therewith; that one of the terms so incorporated was a provision for automatic renewal in the absence of notice; that no notice was given, and that therefore the Memorandum of Agreement was automatically renewed for a period of one year from July 15, 1968. Counsel for the General Counsel in his brief lists the following issues: a. Did Respondent's bargaining on a single-employer basis with Local 1095 which culminated in the execution of the Supplemental Agreement of October 1, 1966, constitute an abandonment of the multi-employer group? b. Did Local 1095's timely notice to the Association to reopen the Master Agreement, effective July 15, 1966 to June 30, 1968, constitute notice to all Association members? c. Did the Supplemental Agreement of October 1, 1966 automatically renew itself to be effective until June 30, 1969, by Local 1095's failure to give Respondent timely individual notice of contract reopening? d. Did Respondent's letter of July 1, 1968 constitute a timely withdrawal from the multi-employer unit? Counsel for the General Counsel and counsel for the Union argue that Respondent did not at an appropriate time nor in an unequivocal manner evince its desire to withdraw from the multiemployer unit, that the October 1, 1966, Memorandum of Agreement was a "supplemental agreement" which by its terms became part of the general agreement which had previously been negotiated by the Association, that the Union's letter of April 16, 1968, to the Association constituted notice to the Respondent and effectively prevented the renewal of any part of the agreement between the Union and the Respondent, and that Respondent's letter of July 1, 1968, was an untimely attempt to withdraw from multiemployer bargaining. In their view this is a clear case of an individual employer-member of a multiemployer bargaining group seeking to avoid the contractual obligations of a collective-bargaining agreement negotiated by its bargaining representative. Counsel for Respondent, in his brief, states: General Counsel and union have generally advanced the proposition that this is a classic multi-employer agreement situation, and that since the union gave notice to association of reopening, therefore, employer was notified. Employer takes quite a contrary position. Although the opportunity to place a particular fact situation in a preexisting legal cubbyhole is most attractive, employer maintains that there should be a careful examination of the history of dealing among the parties insofar as the substitute agreement is concerned. In short, employer maintains that insofar as the agreement of October 1, 1966, is concerned, that it replaces the previously executed master agreement dated July 26, 1966. The substitute agreement has an 12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD integrity of its own. This integrity was gained, first, through the dealings of the parties in reference to the agreement, and, secondly, by virtue of judgment and findings of the Superior Court of Alameda County. Therefore, because of the separateness and distinctness of the substitute agreement, union was under an obligation to personally and individually notify employer. The facts are not in dispute and are in all material matters stipulated. Respondent is abiding by all the terms of its October 1, 1966, Memorandum of Agreement with the Union and all terms of the (current) 1968 Industry Contract effective from July 1, 1968, through June 30, 1971, not inconsistent therewith. Respondent refuses to recognize as binding upon it any term or condition in the 1968 Industry Contract which is inconsistent with its Memorandum of Agreement of October 1, 1966. Resolution of the ultimate issue of "refusal to bargain" rests upon examination of the by-laws of the Association, the texts of the several agreements, the decision of a California court interpreting the agreements, the conduct and correspondence of the parties and the application to the foregoing of established rules of Agency law, contract law, and the law of multi-employer bargaining relationships. B. The Evidence Eastbay Motor Car Dealers, Inc., has been in existence since at least 1939, and Respondent has been a member since 1953. The by- laws contain the following relevant provisions: ARTICLE I SECTION I. These By-Laws shall contain the standing rules and regulations of this Association , a non-profit corporation , organized and existing under and by virtue of the laws of the State of California, and all members of this Association, who are such whether by reason of being members at the time of its incorporation , or are admitted to membership after the incorporation , accept these By-Laws and the Articles of Incorporation of the Association , and members shall have no other rights in their relationship with the Association than as provided by these By-Laws and the Articles of Incorporation of the Association , subject only to the laws of the State of California and the United States. SECTION 2. These By-Laws, together with the Articles of Incorporation , together also with any and/or all resolutions or motions which subsequently may duly be passed by the Board of Directors or the membership in accordance with the provisions of these By-Laws, shall constitute a contract between the Association and each and every one of its members. ARTICLE V Membership SECTION 1. Membership in the Association shall be limited to persons, firms and/or corporations actively engaged in handling, selling or dealing in new and/or used automobiles , with places of business located in the geographic area comprising Alameda and Contra Costa Counties. ARTICLE X Labor Relations SECTION 1. Every person, upon joining the Association , automatically gives, by virtue of accepting such membership , power of attorney to the Association to act for the member in any and all matters having to do with Labor relations; and every person, firm or corporation , upon joining the Association , contracts and agrees with the Association, and with each of the members thereof, not to bargain collectively with organized labor other than by and through the Association, acting pursuant to the power of attorney herein given and made. SECTION 2. The power of attorney given and made pursuant to the foregoing Section and the obligation of any member to bargain collectively with organized labor by and through the Association may be revoked and terminated at any time by giving notice in writing to the President or Secretary of the Association stating the intention of such member to so revoke the power of attorney, and terminate the obligation to bargain collectively with organized labor through the Association, said revocation and termination to be effective immediately upon presentation to the President or Secretary unless otherwise set forth in said written notice. At all times material herein Respondent retained its membership in the Association. Respondent did not at any time revoke its power of attorney by giving notice in writing as required by the By-Laws of the Association. The 1966 Industry Contract was executed July 15, 1966, by officers of the Association and officers of the Union and became binding on all 41 members of Association including Respondent immediately upon such execution, without the necessity of any further action by any member. The Union then secured the signatures of approximately 20 independent dealers to the identical contract. The 1966 Industry Contract contains the following pertinent provisions: THIS AGREEMENT, made and entered into the day and year hereinafter set forth, by and between the Dealership which hereinafter appears as Party Signatory, FIRST PARTY, hereinafter called "Employer," and AUTOMOBILE SALESMEN'S UNION, LOCAL 1095, SECOND PARTY, hereinafter called "Union." SECTION ONE Recognition of the Union. The Employer hereby recognizes Union as the sole collective bargaining agent for all automobile salemen employed by the Employer within the jurisdiction of the Union. SECTION SEVENTEEN Other Agreements. It is agreed that, if the Union negotiates a more favorable contract with another Employer or Employers in Albany, Berkeley, Oakland, Alameda, San Leandro or Hayward, the Eastbay Motor Car Dealers, Inc., shall have the option to adopt such contract, the question of "more favorable contract" to be subject to the Board of Adjustment procedures of this Agreement. SECTION TWENTY Term of Agreement (1) The term of this Agreement shall be two (2) years from its effective date, July 1, 1966, to midnight, June 30, 1968, and will be renewed thereafter for yearly periods, starting with the anniversary date of July 1, 1968, with or without changes, or will be terminated, pursuant to the following: (a) If neither Party to this Agreement, prior to sixty (60) days before the anniversary date of July 1, 1968, or thereafter, gives the notice of desired changes (hereinafter provided for in Subparagraph (b) of this Section Twenty, this Agreement shall be automatically renewed and in full force and effect; without change, for the year period following the anniversary date for which no such notice was given. (b) In the event that either Party to the Agreement is desirous of effecting any changes as of the anniversary date of July 1, 1968, or thereafter, such Party shall give notice of the same to the other Party, not less than sixty days prior to such July 1, 1968, anniversary date MULLER-GORDON MOTOR CO. and shall specify in said notice the changes desired... . About September 1, 1966, the Union executed a contract with a nonmember of the Association, Melrose Motors, Inc., of Oakland, California. The Melrose contract provided that the salesman's commission should be 40 percent of the employer's gross profit. The 1966 Industry Contract provided that the salesman's commission should be 4 1/4 percent of the retail delivery price of the automobile. Shortly before October 1, 1966, Respondent invoking section Seventeen of the Association Agreement, claimed the option of adopting the "more favorable" Melrose contract. The Union's then secretary-treasurer, Chester Ansley, agreed and a document entitled "Memorandum of Agreement" was executed. The text of this memorandum, insofar as relevant, follows: MEMORANDUM OF AGREEMENT MULLER-GORDON MOTORS, hereafter called the Employer, and Automobile Salesmen's Union Local No. 1095, hereafter called the Union, intend by this Memorandum of Agreement to adopt and be bound by the collective bargaining agreement, a copy of which is attached hereto, in effect within Alameda County for a term from July 1, 1966 to July 1, 1968, between the Union and various automobile dealerships, except as expressly modified in this Memorandum of Agreement. It is accordingly agreed as follows: The Union and the Employer adopt and agree to be bound by all the terms and conditions of the collective bargaining agreement referred to above, except that the provisions below shall be effective between the Union and the Employer, and nothing in said collective bargaining agreement shall be applicable or enforced to the extent that it is inconsistent with such provisions, or to the extent that it treats the subjects covered by such provisions in a different or inconsistent manner. * [PROVISIONS RELATING TO SALESMEN'S COMPENSATION] * * * * * This memorandum of agreement is entered into and becomes effective this I day of October, 1966, and is executed in the City of Berkeley, State of California, by the undersigned parties. For the Employer: For the Union: GEORGE A. MULLER CHESTER ANSLEY On various dates in February, March and April 1967 four other members of the Association notified the Union by letter that they were exercising the option under section Seventeen of the 1966 Industry Contract and substituting the Melrose method of commission payment for the Industry method. On April 13, 1967, the Union sent a letter to Respondent rescinding the Memorandum of Agreement of October 1, 1966, on the ground: We have been informed by legal counsel that industry dealerships such as yours who were originally bound by the industry contract cannot separately take advantage of section 17. This clause, according to our legal advice, 13 authorizes the Eastbay Motor Car Dealers, Inc. to exercise the option on behalf of all of its members as a single group to adopt the terms "of a more favorable contract", but requires that all members act as a group. The Union's letter concluded with the statement: "the industry contract remains in effect between your dealership and Local 1095." The Union then filed a complaint for declaratory judgment in the Superior Court of the State of California, and the court on September 29, 1967, entered the following judgment: 1. Defendants Bob Philippi Inc., Lee Adams Pontiac, Inc., J. E. French Co., and Lloyd A. Wise, Inc., and each of them , have not validly or lawfully modified the agreement with plaintiff of July 1, 1966 to June 30, 1968, executed on their behalf by Eastbay Motor Car Dealers, Inc., and that said agreement has at all times during its term been in full legal effect and binding upon the aforesaid parties; and 2. The written agreement entered into between plaintiff and defendant Muller-Gordon Motor Co. on October 1, 1966 constitutes a valid and enforceable agreement which has been in full effect and binding on the parties since its date of execution; and 3. Plaintiff has not at any time validly or effectively rescinded its agreement with Muller-Gordon Motor Company. The court's judgment was supported by its conclusions of law that the option created by section 17 could only be exercised by Association , and could not be exercised by any individual member of Association , and that the fact that the Union entered into the Memorandum Agreement because of a mistake of law did not give the Union the right to rescind. On January 2, 1968, Vincent J . Fulco was elected Secretary-Treasurer of the Union, succeeding Chester Ansley. Fulco, who had been business agent since 1962, visited Respondent in February while making the rounds of dealers to introduce his successor as business agent. George Muller, Respondent's president, told Fulco "he would like to sit down and negotiate" and Fulco replied, "this is not the time for me to negotiate." On April 16, 1968, Secretary-Treasurer Fulco wrote to the Association: Pursuant to Section 20(l)(b) of the current collective bargaining agreement in effect between the undersigned and you , notice is hereby given to you that the undersigned and Local Union is desirous of effecting changes in said agreement as of the anniversary date of June 30, 1968, and hereby specifies in this notice the changes desired. The letter listed 11 items on which it desired changes, and contained a request for a meeting on or after May 1. On the same date the Union sent individual letters to each of the 20 dealers who had signed separate identical contracts . No separate letter was sent to any individual member of the Association. On April 23, 1968, the Association replied: This will acknowledge your letter of April 16th, 1968 constituting your formal opening of that certain agreement effective July 1, 1966 to midnight June 30, 1968 pursuant to Section XX entitled "Terms of Agreement." The changes and amendments to said agreement desired by Eastbay Motor Car Dealers, Inc. are the following: Methods of and provisions concerning remuneration of salesmen, hours of operation, provisions for 14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD handling demonstrators , provisions for new car announcement and clean -up period , house deal provisions, clarify favored nations clause and all other related matters bearing upon or concerning the above subjects. The letter concluded with a request that the Union set a time and place to begin negotiations . The first meeting was held May 14, 1968. Before the first meeting the Association was orally advised by Respondent that Respondent had a valid contract , which had been extended for another year by virtue of the Union's failure to send a notice of reopening to Respondent . Respondent told the Association that it would not be a part of the negotiations . At one of the early meetings, Marcus Hardin, an attorney who had been a negotiator for the Association since 1939, asked the Union whether they had sent any notice reopening the separate agreement with Respondent . Upon receiving a negative reply, Hardin stated that Respondent claimed to have a contract, that the claim appeared to have merit , that on the face of the matter it appeared that Respondent did have a contract, that therefore the Association was not negotiating for Respondent , and Respondent had no part in the joint negotiations . The union representative replied that in their opinion Respondent' s separate agreement had not been continued for another year and that they would consider Respondent bound by whatever agreement came out of the 1968 joint negotiations. On July 1, 1968, the Union received the following letter from Respondent: Please accept this letter as confirmation that Muller Gordon Chrysler Plymouth and the Automobile Salesmen's Union will again be bound by the provisions of the Memorandum of Agreement entered into between Muller Gordon Chrysler Plymouth and your union, dated October 1, 1966. This agreement in its introductory paragraph incorporates the consistent provisions of the Master Agreement between East Bay Motor Car Dealers and your union , dated July 26, 1966. Since we have not, within the required time set out in Section 20 of the Master Agreement , heard from you concerning modifications, we are treating our Memorandum of Agreement as having been extended to July 1, 1969. The Union replied on the same date: As you are a member of Eastbay Motor Car Dealers Association and we have been negotiating the remuneration and etc., for Local No. 1095. It is thereby the thinking of this office that your contract has expired as of June 30, 1968 , as of Section 20 of the Working Agreement. This was the first notice by Respondent to the Union that it did not intend to be bound by the 1968 Association negotiations . No notice of any kind was given to the Union by Respondent prior to the automatic renewal date of the 1966 Industry Contract or prior to May 14, 1968. Between May 14, 1968, and through July 1968, the Union and the Association met 14 or 15 times . A strike was called in July and the Union picketed all members of the Association, with the exception of Respondent. On August 17, 1968, the Association on behalf of its members and the Union executed the 1968 Industry Contract effective from July 1, 1968, through June 30 , 1971. It provides that salesmen shall be compensated by a commission of 4 1/2 percent of the retail delivery price. C. The Law 1. Applicable Rules of the Law of Contracts Restatement of the Law of Contracts , American Law Institute, 1932. Section 228 An agreement is integrated where the parties thereto adopt a writing or writings as the final and complete expression of the agreement . An integration is the writing or writings so adopted. Section 229. Partial Integration Part of the terms of an agreement may be integrated; but an integration , unless it appears when interpreted in accordance with the rule stated in Section 230 to be a statement of only part of the agreement of the parties, is an integration of the whole thereof, subject to the qualifications stated in Section 240. Section 230. Standard of Interpretation Where There is Integration. The standard of interpretation of an integration , except where it produces an ambiguous result , or is excluded by a rule of law establishing a definite meaning, is the meaning that would be attached to the integration by a reasonably intelligent person acquainted with all the operative usages and knowing all the circumstances prior to and contemporaneous with the making of the integration, other than oral statements by the parties of what they intended it to mean. Section 239. Effect of Partial Integration. Where there is integration of part of the terms of a contract prior written agreements and contemporaneous oral agreements are operative to vary these terms only to the same extent as if the whole contract had been integrated. Section 240. In What Cases Integration Does Not Affect Prior or Contemporaneous Agreements. (1) An oral agreement is not superseded or invalidated by a subsequent or contemporaneous integration, nor a written agreement by a subsequent integration relating to the same subject matter , if the agreement is not inconsistent with the integrated contract, and (a) is made for a separate consideration, or (b) is such an agreement as might naturally be made as a separate agreement by parties situated as were the parties to the written contract. (2) Where no consideration is stated in an integration, facts showing that there was consideration and the nature of it, even if it was a promise, or any other facts sufficient to make a promise enforceable , are admissible in evidence and are operative. Section 408. Discharge of Duty Under an Earlier Contract By a Subsequent Inconsistent Contract. A contract containing a term inconsistent with the term of an earlier contract between the same parties is interpreted as including an agreement to rescind the inconsistent term in the earlier contract . The parties may or may not at the same time agree to rescind all the other provisions of the earlier contract . Whether they do this is a question of interpretation , except as this rule is qualified by the rule stated in Section 223. MULLER-GORDON MOTOR CO. 2. Applicable Rules of the Law of Agency Witkin, Summary of California Law 7th Edition Agency Sec. 97 Ordinarily an agency is created for the benefit of the principal, and the confidential relationship is one which the law does not impose upon the parties, even though there is a valid contract for a fixed period. The principal is free to terminate the agency at anytime. If, however, the agency or power is created for the benefit of the agent or a third person, e.g., to protect some title or right in him, or to secure some performance to him, the agent and not the principal is most concerned with the continuance of the agency and it is no longer proper to permit the principal to terminate it at will. Consequently it is held to be irrevocable by the principal.... This type of agency is usually called a power coupled with an interest (Civil Code 2356). The Restatement of Agency (Sec. 138) terms it a "power given as security," defined as a power "in the form of an agency authority, but held for the benefit of the power holder or a third person and given to secure the performance of a duty or to protect a title, either legal or equitable, such power being given when the duty or title is created or given for consideration." Thus, under the Restatement, the essentials are as follows: It must be given (1) to secure performance of a duty. or (2) to protect a title, legal or equitable. (3) The power must be given when the duty or title is created or (4) for consideration. Mechem, Outlines of the Law of Agency, Fourth Edition Sec. 265 Sec. 265. Irrevocable authority. As stated above, there is one type of authority which may not be revoked. The cases here are neither numerous nor clear. To understand the idea involved it may be. useful to reconsider what was stated above as to the reasons why authority in the ordinary situation is always revocable. Briefly, they inhere in the fact that in the ordinary agency the agent is charged with the management of some part of the principal's business. It should be, it is thought, always in the power of the principal to manage .his own business. This includes, if necessary, the power of the principal to reassume the control of his own business which he has delegated to the agent. There is no rule of law or policy, however, which prevents a person from getting rid of his business. He may sell and convey it. He may also mortgage it, or otherwise create a security interest in it in some third party. What if this is in substance what is intended, but that the transaction takes the form of a power to deal with P's property in a certain way in certain circumstances? Should the substance or the form of the transaction be regarded? American Law Institute, Restatement of the Law Agency 2d Sec. 127. Unless otherwise agreed, if the principal has manifested that an agent is a general agent, the apparent authority thereby created is not terminated by the termination of the agent's authority by a cause other than incapacity or impossibility, unless the third person has notice thereof. Sec. 128. Unless otherwise agreed , if the principal has specially accredited an agent to a third person, the apparent authority thereby created is not terminated by the termination of the agent's authority by causes other than incapacity or impossibility, unless the third person has notice thereof. 15 Sec. 135. A third person to whom a principal has manifested that an agent has authority to do an act has notice of the termination of authority when he knows, has reason to know, or has been given a notification of the occurrence of an event from which, if reasonable, he would draw the inference that the principal does not consent to have the agent so act for him, that the agent does not consent so to act for the principal, or that the transaction has become impossible of execution. Sec. 136. Notification terminating apparent authority (1) Unless otherwise agreed, there is notification by the principal to the third person of revocation of an agent's authority or other fact indicating its termination: (a) when the principal states such fact to the third person; or (b) when a reasonable time has elapsed after a writing stating such fact has been delivered by the principal (i) to the other personally; (ii) to the other's place of business; (iii) to a place designated by the other as one in which business communications are received; or (iv) to a place which , in view of the business customs or relations between the parties is reasonably believed to be the place for the receipt of such communications by the other. (2) Unless otherwise agreed, a notification to be effective in terminating apparent authority must be given by the means stated in Subsection ( 1) with respect to a third person: (a) who has previously extended credit to or received credit from the principal through the agent in reliance upon a manifestation from the principal of continuing authority in the agent; (b) to whom the agent has been specially accredited; (c) with whom the agent has begun to deal, as the principal should know; or (d) who relies upon the possession by the agent of indicia of authority entrusted to him by the principal. 3. Applicable Rules of Law Governing Multiemployer Bargaining Relationships When a pattern of bargaining on a multi-employer basis has been established neither the Union, nor individual employers may withdraw from the multi-employer unit as a measure of momentary expediency or bargaining strategy. The decision to withdraw must be unequivocal; it must be made in good faith ; and it must contemplate abandonment, on a relatively permanent basis, of multi-employer bargaining . and embracement of bargaining on an individual employer basis. An employer or union may withdraw only upon adequate written notice given prior to the date set for modification of the employer association contract or for the start of multi-employer bargaining. Where multi-employer negotiations have begun, withdrawal will be permitted only if there is mutual consent in the absence of unusual circumstances . Retail Associates , Inc., 120 NLRB 388. N.L.R.B. v. Jeffries Banknote Company, 281 F.2d 893 (C.A. 9), enfg. 124 NLRB 920. 16 DECISIONS OF NATIONAL LABOR RELATIONS BOARD D. Concluding Findings Applying the propositions of law set forth in section C of this report to the facts found in section B, supra, I conclude and find: 1. Respondent did not decide to withdraw from multiemployer bargaining on a relatively permanent basis. Respondent's conduct in its dealings with the Association and the Union was equivocal and did not embrace bargaining on an individual employer basis. Respondent indicated its intent to remain part of the multiemployer group (a) by its failure to serve a notice of revocation of authority on the Association in accordance with the Association by-laws, (b) by its failure to notify the Union in proper or timely fashion that the Association was not authorized to bargain for Respondent in 1968, (c) by the very text of the Memorandum of Agreement which clearly demonstrates that the Memorandum is an amendment to the 1966 Association Agreement and not, as contended by Respondent's counsel, an independent document, and (d) by Respondent's voluntary adoption of all terms of the 1968 Industry Contract which are not inconsistent with the Memorandum of Agreement. 2. The Memorandum Agreement of August 1, 1966, and the Industry Contract of 1966 constituted one single integrated agreement. One of the terms of the integrated agreement was that it would automatically renew for one year from July 1, 1968, unless notice to terminate or modify was given on or prior to May 1, 1968. 3. From at least July 1966 through at least the date of the hearing herein Association was the general agent of Respondent, empowered by Respondent to enter into binding agreements with the Union on behalf of Respondent and ipso facto authorized by Respondent to receive notices from the Union regarding such agreements. 4. The by-laws of Association create a power coupled with an interest . As between Respondent and Association the power of attorney can only be revoked by written notice from Respondent to Association. No such notice was given, and oral notice did not extinguish the power of the Association to bind Respondent within the scope of the specifically delegated authority. 5. Association is a general agent of Respondent and Respondent's president knew, when he orally notified Association that he would not participate in nor be bound by the results of the 1968 negotiations, that Association had already begun to deal with the Union, and that the Union relied upon possession of authority entrusted to Association by Respondent. Respondent's failure to notify the Union either in person or by mail of the attempted revocation of part of that authority made all acts of Association, prior to the Union's receipt of actual notice, binding on Respondent. 6. The execution of the Memorandum of Agreement August 1, 1966, did not in any way, nor to any degree extinguish or diminish the power of Association to bind Respondent in collective bargaining with the Union. 7. By entering into the Memorandum of Agreement, the Union did not consent to the withdrawal of Respondent from the multiemployer unit. 8. The Industry Contract of 1968 is binding on Respondent and all inconsistent terms of the Memorandum of Agreement are thereby superseded and rendered void. 9. The Union's letter to Association dated August 16, 1968, effectively prevented renewal of the integrated agreement, and Association's reply, requesting changes in methods of remuneration of salesmen placed the subject matter of the Memorandum of Agreement on the bargaining table. 10. Respondent is now and has been at all times material herein a member of the multiemployer bargaining unit represented by Association. It. Respondent is now and has been since the date of its execution a party to and bound by all the terms of the Industry Contract of 1968. 12. Respondent in May 1968 directed Association not to bargain on its behalf. 13. Respondent on July 1, 1968, by its insistence on the Memorandum of Agreement refused to bargain with the Union. 14. Respondent since August 15, 1968, has refused to be a party to or bound by the contract made by Association on Respondent's behalf. IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES UPON COMMERCE The activities of Respondent, as set forth above, occurring in connection with the operations of Respondent described above have a close, intimate and substantial relation to trade, traffic and commerce among the several states and tend to lead to labor disputes burdening and obstructing commerce and the free flow of commerce. V. THE REMEDY It has been found that Respondent has engaged in certain unfair labor practices. It will therefore be recommended that it cease and desist therefrom and take certain affirmative action, as set forth in the Recommended Order below, designed to effectuate. the policies of the Act. CONCLUSIONS OF LAW 1. Muller-Gordon Motor Company is an employer within the meaning of Section 2(2) of the Act engaged in commerce and in a business affecting commerce within the meaning of Section 2(6) and (7) of the Act. 2. Automobile Salesmen's Union, Local 1095, AFL-CIO, is a labor organization within the meaning of Section 2(5) of the Act. 3. All employees of employer-members of Eastbay Motor Car Dealers, Incorporated, (including employees of Muller-Gordon Motor Company) who are engaged in the sale or leasing of new or used vehicles, excluding all other employees, office clerical employees, guards and supervisors as defined in the National Labor Relations Act, as amended, constitute a unit appropriate for the purposes of collective bargaining within the meaning of Section 9(b) of the Act. 4. Automobile Salesmen's Union, Local 1095, AFL-CIO, has been at all times material herein and is now the exclusive representative of all the employees in the aforesaid appropriate unit within the meaning of Section 9(a) of the Act. 5. By refusing on and after July 1, 1968, to bargain in good faith with the Union as the exclusive collective- bargaining representative of its employees in the aforesaid appropriate unit, by refusing to be a party to the collective-bargaining agreement executed by the Union and by Eastbay Motor Car Dealers, Incorporated, . on August 27, 1968, and by refusing to be a party to the collective-bargaining negotiations which resulted in said agreement, Respondent has engaged in and is engaging in MULLER-GORDON MOTOR CO. 17 unfair labor practices within the meaning of Section 8(a)(5) and (1) of the Act. 6. The aforesaid unfair labor practices are unfair labor practices affecting commerce within the meaning of Section 2(6) and (7) of the Act. RECOMMENDED ORDER Upon the basis of the foregoing findings of fact and conclusions of law, and upon the entire record in this proceeding, I recommend that Muller-Gordon Motor Company, its agents, successors, and assigns, shall: 1. Cease and desist from: (a) Refusing to be a party to the collective-bargaining agreement executed by Automobile Salesmen's Union, Local 1095, AFL-CIO, and Eastbay Motor Car Dealers, Incorporated, on August 27, 1968, effective from July 1, 1968, through June 30, 1971. (b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of rights guaranteed in Section 7 of the Act. 2. Take the following affirmative action which I find will effectuate the policies of the Act: (a) Forthwith honor and abide by the agreement described in paragraph 1(a) of this Order. (b) Give retroactive effect to the terms and conditions of the agreement described in paragraph l(a) of this Order, including but not limited to the provisions relating to salesmen's commissions and other employment benefits and make whole its employees for any losses they may have suffered by reason of Respondent's refusal to be a party to said agreement, with interest thereon at 6 percent per annum. (c) Preserve and make available to the Board, or its agents, upon request, for examination and copying, all payroll records, timecards, personnel records and reports, and all records necessary to analyze the amount of backpay due under the terms of this Order. (d) Post in conspicuous places at Respondent's place of business including all places where notices to employees are customarily posted, copies of the notice attached hereto and marked "Appendix."' Copies of said notice on forms to be provided by the Regional Director for Region 20 shall, after being duly signed by Respondent, be posted immediately upon receipt thereof and be maintained by it for a period of 60 consecutive days thereafter in conspicuous places, including all places where notices to employees are customarily posted. Reasonable steps shall be taken by Respondent to insure that said notices are not altered, defaced, or covered by any other material. (e) In writing, notify the Regional Director for Region 20 within 20 days from the receipt of this Decision what steps Respondent has taken to comply herewith.2 'In the event that this Recommended Order is adopted by the Board, the words "a Decision and Order" shall be substituted for the words "the Recommended Order of a Trial Examiner" in the notice. In the further event that the Board's Order is enforced by a decree of a United States Court of Appeals, the words "a Decree of the United States Court of Appeals Enforcing an Order" shall be substituted for the words "a Decision and Order. 'In the event that this Recommended Order be adopted by the Board, this provision shall be modified to read : "Notify the Regional Director, for Region 20, in writing, within 10 days from the date of this Order what steps the Respondent has taken to comply herewith." APPENDIX NOTICE TO ALL EMPLOYEES Pursuant to the Recommended Order of a Trial Examiner of the National Labor Relations Board and in order to effectuate the policies of the National Labor Relations Act, as amended, we hereby notify our employees that: WE WILL honor and abide by and give retroactive effect from July 1, 1968, to all the terms and conditions of the industry agreement executed August 27 , 1968, by Eastbay Motor Car Dealers, Incorporated, and Automobile Salesmen's Union, Local 1095, AFL-CIO, including but not limited to wages, commissions and other employment benefits, and shall make our employees whole for any losses they may have suffered by reason of our refusal to honor and apply the terms of said agreement. Dated By MULLER-GORDON MOTOR COMPANY (Employer) (Representative) (Title) This notice must remain posted for 60 consecutive days from the date of posting and must not be altered, defaced, or covered by any other material. If employees have any question concerning this notice or compliance with its provisions, they may communicate directly with the Board's Regional Office, 13050 Federal Building, 450 Golden Gate Avenue, Box 36047, San Francisco, California 94102, Telephone 556-0335.