Merico, Inc.

MERICO, INC. 101 Merico, Inc. and Teamsters Local Union No. 515, an affiliate of the International Brotherhood of Team- sters, Chauffeurs, Warehousemen & Helpers of America Petitioner. Case 10-RC-9485 November 8, 1973 DECISION OF REVIEW BY CHAIRMAN MILLER AND MEMBERS KENNEDY AND PENELLO On April 6, 1973, the Regional Director for Region 10 issued his Decision and Direction of Election in the above-entitled proceeding, wherein he found that an instrument executed by the Employer and Bakery and Confectionery Workers International Union of America, Local 25, AFL-CIO,' was not a bar to the instant petition. Thereafter, in accord with National Labor Relations Board Rules and Regulations, Series 8, as amended, the Employer and the Intervenor filed timely requests for review, contending, inter alia, that the Regional Director departed from established precedent in not finding a contract bar. By telegram dated May 3, 1973, the National Labor Relations Board granted the requests for review and stayed the ' election pending decision on review. Thereafter the Employer filed a brief on review. Pursuant to the provisions of Section 3(b) of the National Labor Relations Act, as amended, the National Labor Relations Board has delegated its authority in this proceeding to a three-member panel. The Board has considered the entire record in this case, including the brief on review, and hereby affirms the Regional Director for the following reasons: The Employer is engaged in the production and distribution of bakery products at its Fort Payne, Alabama, plant. In March 1972, the Employer recognized the Intervenor as representative of its production and maintenance employees. Thereafter, the parties engaged in protracted bargaining. On January 31, 1973, the same day that the rival petition was filed, representatives of the Employer and the Intervenor, including a number of employees who formed the Union Committee, executed the instru- ment asserted by the contracting parties as a bar. I Hereinafter called the Intervenor. 2 See Appalachian Shale Products Co., 121 NLRB 1160, 1162. We fail to understand the charge of our dissenting colleague that our finding of no- contract bar constitutes a departure from and substantial modification of the salutary principle enunciated in the Appalachian Shale case. That principle means that a condition of prior ratification must be expressed in the written instrument itself and cannot be established by parole or other extrinsic evidence. This necessarily requires an examination and construc- tion of the specific language used in the document under consideration That is precisely what we have done in this case; nor have we gone beyond the face of the written document. 207 NLRB No. 22 Thereafter, on February 4, 1973, the employees voted against ratification of the terms set forth in the instrument. The final paragraphs of the instrument recite: This contract made retroactive to January 1, 1973 between Merico Inc., and Local #25 of the Bakers and Confectioners Union is the full agreement between the Union representatives, the Union Committee, and the Company representa- tives. The Union Committee is Unanimous for acceptance and each member is hereby pledged to recommend this agreement for ratification by the membership at Fort Payne, Alabama, Merico Plant. The use of this somewhat unusual legend raises the question of whether the signatures of the Union Committee on this document reflect an intent by them to bind the employees to the substantive terms in the instrument, irrespective of whether the employees subsequently ratified it. Our examination of the entire document, particularly the above- quoted paragraphs and apart from any parole evidence, clearly reveals that the Union Committee's action in signing the document was qualified by the phrase that they were unanimous "for acceptance" and each member is "pledged to recommend this agreement for. ratification by the membership." The use of the phrase "for acceptance" in this context indicates to us that although the terms were accepta- ble to the Union Committee, it was not purporting to accept them unconditionally on behalf of the employees. While the condition of ratification could have been more artfully drawn, we conclude that, as a matter of contract interpretation, the signatures of the Union Committee reflected merely "a signed agreement to pledge the Committee's support for ratification of the agreement," and did not evidence a binding contract absent employee ratification. We therefore, in accord with the Regional Director, find that the instrument does not bar the instant petition.2 Accordingly, the case is hereby remanded to the Regional Director for the purpose of conducting an election in accordance with his Direction of Election except that the payroll period for eligibility shall be that immediately preceding the date of issuance.3 MEMBER PENELLO, dissenting: In our opinion the cases referred to in the dissenting opinion do not warrant a contrary conclusion as none involves the interpretation of language used in a written document indeed, most of those cases involve unfair labor practices where the basic issue was whether the parties had orally agreed toa binding contract so as to obligate the employer to execute it. 3 In order to assure that all eligible voters may have the opportunity to be informed of the issues in the exercise of their statutory right to vote, all parties to the election should have access to a list of voters and their addresses which may be used to communicate with them. Excelsior Underwear Inc., 156 NLRB 1236; N L R.B v. Wyman-Gordan Co., 394 U.S (Continued) 102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I cannot agree with my colleagues that the contract here is not a bar and that an election should therefore be directed. For, although purporting to adhere to the form of Appalachian Shale Products4 in saying they are looking to the face of the contract to determine whether employee ratification was specifi- cally made a condition precedent, the majority opinion departs from its spirit, and in effect modifies it substantially, by interpreting ambiguous language which is anything but specific as to either its intent or meaning. All the contract-bar cases decided around October 1958, including Appalachian Shale Products, stated as their purpose and have been applied to achieve the simplification and clarification of the so-called contract-bar rules. This was accomplished largely by the elimination of the need for examination or interpretation of the intent of the parties, whereas the Board had previously resolved disputes concerning alleged understandings through the use of parole evidence, conflicting testimony, and protracted hearings in order to construe ambiguous clauses or conduct. To this end, also, the Board in Appalachian Shale Products stated that prior ratification as a condition precedent would be found only where an express contractual provision to that effect was agreed upon.5 In the application of that principle, the Board has consistently found that ratification is a gratuitous process which union negotiators have imposed upon themselves unless there is a clear provision specifical- ly stating such a requirements or there has been effective communication to the employer of a limitation on the authority of the union bargaining committee.? However, the "clear provision" must be clear without resort to divination of the meaning or intent of the language. And even where the employer has been informed that any final agreement reached would be subject to approval or ratification by the union members, the employer cannot insist upon 759. Accordingly, it is hereby directed that a revised election eligibility list, containing the names and addresses of all the eligible voters, must be filed by the Employer with the Regional Director for Region 10 within 7 days of the date of this Decision on Review . The Regional Director shall make the list available to all parties to the election. No extension of time to file this list shall be granted by the Regional Director except in extraordinary circumstances. Failure to comply with this requirement shall be grounds for setting aside the election whenever proper objections are filed. 4 Supra. 5 Supra, 1163 Accordingly, the rule for prior ratification is restated as follows: Where ratification is a condition precedent to contractural [sic] validity by express contractural [sic ] provision, the contract will be ineffectual as a bar unless it is ratified prior to the filing of a petition, but if the contract itself contains no express provision for prior ratification, prior ratification will not be required as a condition precedent for the contract to constitute a bar. 6 E.g., Houchens Market of Elizabethtown, Inc., 155 NLRB 729, enfd. 375 F 2d 208 (C.A. 6), where it was found that no condition precedent existed and ratification was a gratuitous undertaking by the union, notwithstanding the fact that the union negotiator informed the employer representatives such ratification where there is no probative evidence that the union agreed that the company could condition execution upon such employee action.8 In the instant case, none of the critical elements exist. The clause itself is not an undertaking by or on behalf of the Union as the bargaining representative but by the individual members of the employee committee, and even as to them it does not clearly state that ratification must be secured in order for a contract to be binding. Thus, it requires no action at any time by the bargaining representative itself. Indeed, my colleagues recognize that the provision itself is "inartfully drawn" and purport to find it unambiguous by "examination of the entire docu- ment" and their analysis of what particular words and phrases in context "indicate[s] to us. " 9 In engaging in such analysis and interpretation, the majority is departing from Appalachian Shale Prod- ucts, which was to eliminate such construction of what the parties intended, let alone what the words might mean to someone who was a stranger to the bargain. As for effective communication of any limitation on the authority of the Union's negotia- tors, the record is totally devoid of any indication at any time that there was any discussion between the parties of the absence of full authority to reach agreement. For all the above reasons, I believe that resort to construction of the clause is improper and the contract was final in the absence of an unambiguous requirement for prior ratification. However, if the majority engages in construction of the meaning of the clause, they should use the record evidence to test their conclusions. But the evidence in the record respecting the purpose of the clause and the way in which it was incorporated into the contract does not support their construction. For, there is no indication whatsoever of any discussion between the parties concerning ratification as a condition precedent. On the contrary, the Employer's negotiator testified that all agreements would be subject to approval by the employees, since the requirement was not incorporated in the written contract . And see Gate City Optical Company, 175 NLRB 1059, 1061. 7 Sunderland's Incorporated 194 NLRB 118, fn. I; Lewittes and Sons, 96 NLRB 775; 776-777. Cf. Wickly, Inc., 131 NLRB 467,468-469. s Houchens Market; supra 734. 9 In stating the principle and meaning of Appalachian Shale Products as "necessarily requir[ing] an examination and construction of the specific language used in the document under consideration ," my colleagues have added the factor of "construction" which is contrary to what has been deemed to be "necessarily required." Rather, if construction is necessary the clause is ambiguous and does not require ratification as a condition precedent to the existence of a binding contract; the language of the clause must set forth the need for ratification on its face . Here, the majority purports to rely on the language of the clause while conceding that it is inartfully drawn, stating they rely on the contract as a whole and engaging in extensive rationalization as to what certain words and phrases mean to them. The fact that they have not "gone beyond the face of the written document" is immaterial, inasmuch as they have gone beyond the precise language of the clause itself. MERICO, INC. 103 during the hearing herein, on cross-examination, that the language of the clause was his own and that he included it "to make sure that we had a unanimous group there.... I wanted to make sure that everybody was with us. . . . They were completely unanimous. That's what I was trying to establish here." And in response to the question "Isn't it true you expected this to be taken to the membership?" He stated: "I didn't care as long as they recommend- ed it. I had a contract with Charlie Messer [the Union representative] here as far as I was concerned "10 (Emphasis supplied.) To find a condition precedent in the face of this testimony is inexplicable, indeed. Even if this clause related to the Union rather than the individuals, at most this language might be analogous to that in General Asbestos & Rubber Division, Raybestos-Manhattan, Inc.," where the union's attorney notified the company in writing that the union accepted the company's proposal and that the union "will of course wish to submit the total agreement for ratification by the membership."12 The Board there found no difficulty in adopting without comment the Trial Examiner's finding that this was no more than a statement of the course the union intended to pursue.13 A similar finding is required in the case before us, where the language is even more vague, notwithstanding the fact that it is contained in the contract rather than in a letter. Perhaps my colleagues may have been swayed by the fact that here the employees failed to ratify the contract agreed to by their negotiators. However, that is immaterial if, in fact, final agreement was reached which was not subject to such ratification. For, it is well settled that dissatisfaction with the contract or with the conduct of the bargaining agent is not sufficient to justify the processing of a rival petition 14 or the nullification of the contract.15 In sum, all, logic and precedent require the conclusion that the Board is precluded from constru- ing the disputed language of the contract and that, because it is ambigous on its face, it must be held not to rise to the level of specificity required by Appalachian Shale Products. For that reason, the contract is a bar, and I would dismiss the petition. 10 Mr. Miller, Employer's vice president in charge of employee relations, further testified: Q. You are certain at the time this was signed the employees understood they were signing a contract, not signing that this proposal be taken to the members for ratification? A. Right. Yes, sir, yes. 11 183 NLRB No. 27. 12 Ibid 13 Ibid 14 Cf. Gate City Optical Company, supra. 15 General Asbestos & Rubber Division, Raybestos-Manhattan, Inc., supra