Alpha Beta Food Markets v. Retail Clerks Union Local 770

• Decision Date: 16 December 1955
• Docket Number: No. 770,770
• Citation: 45 Cal.2d 764,291 P.2d 433
• Court: California Supreme Court
• Parties: , 29 Lab.Cas. P 69,659 ALPHA BETA FOOD MARKETS, Inc., a corporation, et al., Plaintiffs, Cross-Defendants and Appellants, v. RETAIL CLERKS UNION LOCAL 770, an unincorporated voluntary association, et al., Defendants and Respondents, and Joseph T. DeSilva, individually and in a representative capacity, for and on behalf of Retail Clerks Union, Local, an unincorporated association, its officers and members, Defendant, Cross-Complainant and Respondent. and Food Employers Council, Inc., Cross-Defendant and Appellant. L. A. 23472

Page 433

291 P.2d 433

45 Cal.2d 764, 29 Lab.Cas. P 69,659

ALPHA BETA FOOD MARKETS, Inc., a corporation, et al., Plaintiffs, Cross-Defendants and Appellants, v. RETAIL CLERKS UNION LOCAL 770, an unincorporated voluntary association, et al., Defendants and Respondents and Joseph T. DeSilva, individually and in a representative capacity, for and on behalf of Retail Clerks Union, Local No. 770, an unincorporated association, its officers and members, Defendant, Cross-Complainant and Respondent and Food Employers Council, Inc., Cross-Defendant and Appellant.

L. A. 23472.

Dec. 16, 1955.

Rehearing Denied Jan. 5, 1956.

Musick, Peeler & Garrett, Harold F. Collins, McLaughlin & Casey, James A. McLaughlin, Gibson, Dunn & Crutcher, William French Smith and J. Stuart Neary, Los Angeles, for appellants. Gibson, Dunn & Crutcher and William French Smith, Los Angeles as Amici Curiae on behalf of appellants.

Bodle & Landye, George E. Bodle, Daniel Fogel, Leo Geffner, Los Angeles, Arnold, Fortas & Porter, Thurman Arnold, Washington, D. C., Loeb & Loeb and Herman F. Selvin, Los Angeles, for respondents. Charles F. Scully and Nutter & Smith, Los Angeles, as Amici Curiae on behalf of respondents.

SPENCE, Justice.

This is an appeal from a declaratory judgment holding valid an arbitration award made during the period of wage controls imposed during the Korean conflict. Upon a review of the record, we have concluded that, the undisputed facts sustain the judgment of the trial court.

After a long history of collective bargaining, the parties on January 1, 1950, executed a 'Retail Food Agreement' hereinafter called the 'original agreement' fixing in detail the terms, conditions, and rates of pay for the employment of union members by plaintiffs. This agreement was to be effective for 15 months until April 1, 1951 subject to the right of either party, by notice given prior to July 1, 1950, to reopen it to negotiate changes in hourly pay rates. Such notice was given by the union and on September 22, 1950, the parties executed an 'Extension and Modification Agreement,' extending the term of the 'original agreement,' as modified, to December 31, 1955. It provided that it could be reopened annually but only for negotiating changes in straight time hourly rates of pay. However, before execution of the 'modification agreement,' the Korean conflict began and the Defense Production Act of 1950, September 8 was enacted, 50 U.S.C.A.Appendix, § 2061 et seq., giving the President authority to issue regulations for wage controls. The parties therefore provided in the 'modification agreement,' section 8(b), that 'in the event any duly authorized and empowered government board or agency establishes controls over wages and/or working conditions as a result of a national emergency, and only in the event such controls nullify, invalidate, alter or in any way render inoperative or illegal the wage increase effective January 1, 1951, as provided herein, or subsequent wage reopenings in accordance with' the parties' agreement, then 'the restrictions * * * limiting the reopening rights of each of the parties to negotiate changes only in the straight time hourly rates of pay shall be declared inoperative and shall cease to be in effect during any period in which such board or agency exercises controls' and other types of pay rates might be negotiated.

Pursuant to the 1950 Act, the Wage Stabilization Board was established and wage controls were imposed on January 26, 1951. The Wage Stabilization Board's interpretation of its statutory function was: 'Wage increased may be agreed upon but cannot be put into effect without Wage Stabilization Board approval except to the extent permitted by general regulations issued by the Board.' (C.C.H.Emergency Labor Law Reports, par. 10,151.02.) On October 1, 1951, the union gave notice of its desire to negotiate changes relative to various matters, including premium pay for night, holiday and Sunday work. In January, 1952, an amending agreement hereinafter called the 'January 1 agreement' was made whereby plaintiffs, the employers, were obligated to grant a cost-of-living adjustment; to pay an increase in base wage rates on January 1 of the years 1953, 1954, and 1955; and to make certain contributions to the union benefit fund. These benefits were subject to wage board approval. It was further provided that except as to amended and as to any changes that might result from an arbitration award (infar), the parties' original agreement and modification should remain in full force and effect until December 31, 1955, and there should be no reopening prior to January 1, 1956.

Concurrently with the 'January 1 (1952) agreement,' the parties executed a 'Submission Agreement,' providing for submission to arbitration the question of what, if any, changes should be made in permium pay for night, holiday, and Sunday work. This agreement further specified: 'If such award provides for any change in premium pay, such award shall be submitted for approval to the Wage Stabilization Board by joint petition of the parties hereto if then so required. The effective date of the Award shall be the date upon which it is approved by the Board, if such approval is necessary. If such approval is not required, the effective date shall be the date of said award. In no event, however, shall such Award be effective prior to April 1, 1952.'

The arbitration award was made May 12, 1952, in favor of the pay increases. Pursuant to the 'submission agreement,' the parties submitted, by joint petition, the award to the Twelfth Regional Wage Stabilization Board. By decision of July 24, 1952, it approved the premium pay only for Sunday work, but not for night or holiday work. Thereafter the matter was automatically transferred to the National Wage Stabilization Board at Washington, D. C., for review. It was there pending when the President by executive order of February 6, 1953, terminated wage controls. That order provided, in part, as follows: '(1) All regulations and orders issued pursuant to the Defense Production Act of 1950, as amended, stabilizing wages, salaries, and other compensation, are hereby suspended; (2) The wage, salary, and other compensation adjustments proposed in petitions pending before wage and salary control agencies may now be placed in effect without the approval of such agencies. To the extent that agreements involved in such petitions are conditioned upon approval under Title IV of the Defense Production Act, this order shall be deemed such approval, but such approval shall be subject to paragraph 3 hereof; (3) This order shall not operate to defeat any suit, action, prosecution, or administrative enforcement proceeding, whether heretofore or hereafter commenced, with respect to any right, liability or offense possessed, incurred, or committed prior to this date.'

Meanwhile (January 28, 1953) plaintiffs had brought this action alleging a controversy as to the meaning of the 'submission agreement'; that defendants contend that premium pay for night and holiday work would become automatically effective immediately following the termination of wage controls, 'regardless of whether or not the Wage Stabilization Board shall have approved or disallowed the award of such premium pay,' while plaintiffs contend that 'there shall never be any duty on the part of plaintiffs to pay any such premium pay for night work and holidays unless and until such premium pay is specifically allowed and approved by the Wage Stabilization Board in accordance with the statutes of the United States governing wages, and that under the terms of the Submission Agreement, approval of such premium pay by the Wage Stabilization Board is a condition precedent to any liability and duty on the part of plaintiffs to pay such night and holiday premium pay.' There was no dispute as to plaintiffs' obligation to pay the agreed increases for Sunday work, and these were immediately put into effect following approval by the decision of the Twelfth Regional Wage Stabilization Board in July, 1952. The cross-complaint filed on behalf of the union alleged the promulgation of the executive order of February 6, 1953, and sought a declaration that the effect of the order was to make the increases payable as of May 12, 1952, when the award was made, or alternatively, as of February 6, 1953, when the executive order was issued.

The trial court found as follows: 'The provisions of the Submission Agreement with respect to approval of the award by the Wage Stabilization Board did not create or constitute a condition precedent to the finality of the award with respect to the said premium pay. Such provisions expressed the legal requirement of federal government approval, only; that such government approval was a continuing legal requirement until February 6, 1953; that with the termination of wage controls on that date, pursuant to * * * Executive Order * * * such legal requirement was eliminated.' Accordingly, judgment was entered declaring defendants entitled to their premium pay for night and holiday work, with the effective date fixed as February 6, 1953.

In challenging this judgment, plaintiffs argue that wage board approval was a condition precedent to any obligation to pay the increased rates, and that the President's decontrol order would not suffice in the absence of such board approval. On the other hand, defendants maintain that...