N.L.R.B. v. Cheese Barn, Inc.

• Decision Date: 07 July 1977
• Docket Number: No. 76-1797,76-1797
• Citation: 558 F.2d 526
• Parties: 95 L.R.R.M. (BNA) 3096, 82 Lab.Cas. P 10,097 NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CHEESE BARN, INC. d/b/a Hickory Farms of Ohio, Respondent.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 526

558 F.2d 526

95 L.R.R.M. (BNA) 3096, 82 Lab.Cas. P 10,097

NATIONAL LABOR RELATIONS BOARD, Petitioner, v. CHEESE BARN, INC. d/b/a Hickory Farms of Ohio, Respondent.

No. 76-1797.

United States Court of Appeals Ninth Circuit.

July 7, 1977.

Elliott Moore, Deputy Associate Gen. Counsel, N. L. R. B., Michael D. Stein, Atty., Washington, D. C., argued for petitioner.

Warren C. Ogden, Jr., argued, Davis, Wright, Todd, Riese & Jones, Seattle, Wash., for respondent.

On Application for Enforcement of an Order of The National Labor Relations Board.

Before BROWNING, TRASK and WALLACE, Circuit Judges.

WALLACE, Circuit Judge:

The National Labor Relations Board (Board) found Cheese Barn, Inc. (Cheese Barn) guilty of an unfair labor practice: insisting to impasse on a nonmandatory subject of bargaining, in this case, a clause requiring bargaining unit employee ratification of the proposed collective bargaining agreement as a condition precedent to its operation. As part of the remedy, the Board ordered Cheese Barn to execute the collective bargaining agreement already signed by the Retail Clerks Union Local No. 1105 (Union). 222 N.L.R.B. No. 62 (1976). The Board then applied to us for enforcement of its order. Finding the factual predicates to the Board's decision supported by substantial evidence and agreeing with the Board's legal conclusions, we grant enforcement.

I.

All of Cheese Barn's legal arguments are premised on a single assertion of fact: Cheese Barn and the Union actually agreed during the course of negotiations that ratification by the bargaining unit employees of the proposed collective bargaining agreement would constitute a condition precedent to operation of the agreement. Cheese Barn does not argue that the Board made a contrary finding of fact which is not supported by substantial evidence. Rather, it argues that its characterization of the negotiations regarding member ratification is consistent with the facts as found by the administrative law judge and adopted by the Board. Our review of those findings in light of the underlying record, however, convinces us that Cheese Barn has misinterpreted or mischaracterized them. Further, we hold that the Board's findings, properly interpreted, are supported by substantial evidence in the record considered as a whole.

The Union organized the employees at one of Cheese Barn's retail stores in Seattle, Washington, but Cheese Barn refused to bargain with the Union. The Union took the dispute to the Board which issued a Gissel bargaining order against Cheese Barn in March 1974. See NLRB v. Gissel Packing Co., 395 U.S. 575, 89 S.Ct. 1918, 23 L.Ed.2d 547 (1969). Under compulsion of that order, Cheese Barn began negotiating with the Union for a first collective bargaining agreement to cover the unit employees. In these negotiations, Cheese Barn was represented by Robert Nelsen and Donald Dittman; the Union, by its president, Mervyn Henderson, its secretary-treasurer, Allen Berglund, and two of its business representatives, Thomas Ducharme and Claude Liday.

Early in the negotiations, during March and April 1974, the parties discussed the duration of the first agreement. The Union initially suggested three years, but the parties soon agreed upon a contract of one year to enable Cheese Barn and the Union officials to "get acquainted" with each other. Accordingly, when Cheese Barn sent its first contract proposal to the Union on April 17, it contained the following term:

19.1 This Agreement shall be in full force and effect from and after until , at which time it shall be automatically renewed for a period of one (1) year from such date . . . .

In subsequent negotiating sessions, the Union officials commented on their intention to submit the final agreement to the unit employees for their vote. This was a standard practice with the Union although it was not a practice required by the Union's constitution or by-laws or embodied in any previous collective bargaining agreement to which the Union was a party. ¹

Negotiations progressed well and the parties began to feel that they were getting close to a final agreement. Accordingly, when Cheese Barn sent its second contract proposal to the Union on May 15, paragraph 19.1 read exactly as before except for the entry of "July 1, 1974" and "June 30, 1975" into the blanks. These entries reflected the parties' belief that they would reach final agreement before the first date.

Cheese Barn's May 15 proposal also contained a number of substantive revisions reflecting the prior course of the negotiations. On June 4, the Union responded to the proposal with a letter in which it addressed in detail several unresolved substantive issues. Regarding paragraph 19.1, the Union's letter stated: "Date subject to time of ratification." As later explained by testimony before the administrative law judge, this language was intended to convey the Union's concern that a final agreement might not be ready before July 1 and its interest in not having the one-year duration period foreshortened by a late agreement.

The negotiators thereafter met four more times on June 26, July 16, September 20 and October 2 without reaching a final agreement. At all of these meetings, Cheese Barn's May 15 proposal with its tentative July 1 commencement date was on the table. Although at the last three meetings the July 1 date was obsolete, the parties did not discuss paragraph 19.1 or a new commencement date.

At the October 2 meeting, Cheese Barn presented a new proposed contract. In it, paragraph 19.1 was completely changed from its prior version to read: "This agreement shall be in full force and effect commencing with the date of ratification by bargaining unit employees . . .." The Union did not notice this change nor did the parties discuss it. They were directing their attention to the three remaining substantive areas of dispute. ² In the days immediately following the October 2 meeting, Cheese Barn acceded on two of those three issues and the Union acceded on the third.

When, pursuant to its standard practice, the Union took the agreement to its members, it recommended ratification. The members, however, were displeased with the substantive provisions regarding wages and seniority and voted to reject the agreement. The Union thereupon sought to reopen negotiations on the objected-to substantive provisions, but Cheese Barn refused to make further concessions. The Union also failed in its further attempts to secure member ratification.

On February 14, 1975, the Union advised Cheese Barn that it was willing to sign the October 2 proposal. At a meeting on February 19, Henderson deleted from the duration clause the words "ratification by bargaining unit employees" and inserted the word "signature." The agreement thus read: "(T)his agreement shall be in . . . effect commencing with the date of signature . . .." Henderson then signed the contract and passed it to Nelsen. Nelsen stated that he did not have authority to sign it, but that he would take the contract to Derby, Cheese Barn's president.

After Nelsen spoke with Derby regarding the contract, Derby, on February 27, wrote a letter to Nelsen but inadvertently sent it to the Union. The letter in part stated:

I have considered the revision of Article 19 of the proposed agreement which the union has proposed. Please communicate to the union the fact that this change is unacceptable. I feel, as the union apparently did at the time it proposed the ratification procedure, that this procedure is a proper one. I wish at this time to make no concessions on this point.

On March 4, the Union informed Nelsen that it had received a copy of the letter, and on March 7, Nelsen sent another copy of it to the Union. This was the first time Cheese Barn formally advised the Union that it was insisting on member ratification as a condition to making an agreement. Cheese Barn thereafter refused to sign the contract unless the "ratification" clause was re-inserted.

This recital of the facts, which in large measure tracks the well-supported findings of the administrative law judge demonstrates the soundness of his determinative factual conclusion: The Union did not intend and did not manifest agreement that ratification by the bargaining unit employees would constitute a condition precedent to the collective bargaining agreement. In attempting to characterize the findings as stating the opposite that the parties did have such an agreement Cheese Barn relies heavily upon one sentence in the administrative law judge's decision. After noting that on October 7 Cheese Barn accepted the Union's proposals regarding two of the three remaining issues in dispute and that the Union withdrew is proposal regarding the third, the administrative law judge stated: "The parties agreed they had a contract." Cheese Barn urges that we conclude from this one sentence that member ratification language of paragraph 19.1 had been a subject of negotiation between the parties and expressed the intent of both Cheese Barn and the Union and was thus an agreed part of the contract. This conclusion, however, is wholly inconsistent with the administrative law judge's decision read as a whole and even with the one emphasized sentence when it is read in context. The administrative law judge made an express finding that "the Union's June 4 letter was not a union proposal that ratification be made a condition precedent to effectuation of the final agreement" and that the "new language of the duration provision (in Cheese Barn's proposal of October 2) passed unnoticed and was not discussed by the parties, intent as they were on securing agreement on the three substantive issues still separating them . . .." Cheese Barn's interpretation of the findings of fact is simply not tenable. ³

II.

In...