Certified Corp. v. Hawaii Teamsters and Allied Workers, Local 996, IBT, 77-3231

• Decision Date: 31 May 1979
• Docket Number: No. 77-3231,77-3231
• Citation: 597 F.2d 1269
• Parties: 101 L.R.R.M. (BNA) 2584, 86 Lab.Cas. P 11,353 CERTIFIED CORPORATION, a Hawaii Corporation, Plaintiff-Appellant, v. HAWAII TEAMSTERS AND ALLIED WORKERS, LOCAL 996, IBT, Defendant-Appellee.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1269

597 F.2d 1269

101 L.R.R.M. (BNA) 2584, 86 Lab.Cas. P 11,353

CERTIFIED CORPORATION, a Hawaii Corporation, Plaintiff-Appellant, v. HAWAII TEAMSTERS AND ALLIED WORKERS, LOCAL 996, IBT,

Defendant-Appellee.

No. 77-3231.

United States Court of Appeals, Ninth Circuit.

May 31, 1979.

Robert S. Katz of Torkildson, Katz, Jossem & Loden, Honolulu, Hawaii, for plaintiff-appellant.

John R. Desha, II, Honolulu, Hawaii, David A. Rosenfeld, San Francisco, Cal., for defendant-appellee.

Appeal from the United States District Court for the District of hawaii.

Before BROWNING, CHOY, and HUG, Circuit Judges.

CHOY, Circuit Judge:

Certified Corporation brought suit in district court alleging that Hawaii Teamsters and Allied Workers, Local 996, IBT, (Local 996 or the Local) breached the no-strike provision of a collective bargaining agreement between Certified and the Local. The district court granted summary judgment in favor of Local 996. Certified appeals.

I. Statement of the Case

On July 28, 1974, Certified and Local 996 executed a written agreement. This collective bargaining agreement covered matters such as union recognition, seniority, hiring, grievances and arbitration. It also contained a no-strike provision. ¹ By its express terms, the agreement was effective from March 1, 1974, and expired on February 28, 1977.

Certified alleges that Anthony Rutledge, a bargaining agent for Local 996, ² entered into an oral agreement with Certified. Certified further alleges that this oral agreement extended the written agreement on a "day-to-day" basis, "subject to termination" on 48 hours notice. ³ Finally, Certified alleges that by striking on March 1, 1977, without giving 48 hours notice of termination of the collective bargaining agreement then in effect, the Local breached the no-strike provision of that agreement.

Local 996 contends that there was no binding agreement other than the written collective bargaining agreement. It also argues that, in any event, (1) a written collective bargaining agreement cannot be orally modified when it contains a provision requiring all amendments and modifications to be in writing; and (2) Certified's complaint alleges a breach of a Written contract, and the only written contract between Certified and the Local expired according to its express terms one day before the strike Certified complains of. Therefore, the Local concludes, the district court properly granted summary judgment in its favor.

II. Analysis of the Case

Certified contends that there are two ways in which the terms of the written collective bargaining agreement between Local 996 and Certified could have been extended beyond its express termination date by Certified's oral agreement with Rutledge: (a) the agreement could have been orally amended or modified so that the set expiration date was replaced with a requirement that notice must be given 48 hours in advance of termination, or (b) the terms of the written agreement, minus the set expiration date, could have been incorporated into the oral agreement and subjected to the 48 hour notice of termination provision. Certified argues each of these theories in the alternative.

A. Oral Modification

As a general matter, a written collective bargaining agreement can be orally modified. See NLRB v. Universal Services, Inc., 467 F.2d 579, 580-84, 587 (9th Cir. 1972); Watson v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers, 399 F.2d 875, 879 (5th Cir. 1968); F. W. Means & Co. v. NLRB, 377 F.2d 683, 686 (7th Cir. 1967). However, the written agreement in issue contains the following provision:

No provision or term of this agreement may be amended, modified, changed, altered or waived except by written document executed by the parties hereto.

Thus, the first issue we must face is whether or not oral modification of a written collective bargaining agreement is allowable in the face of a provision requiring that any modification must be in writing.

It is settled that in the absence of a statute preventing oral modification of a contract, a written contract can Always be orally modified, even if its express terms prohibit modification except in writing. Restatement of Contracts § 407 & comment a (1932); 6 Corbin on Contracts § 1295, at 206-08 (1963); L. P. Simpson, Handbook of the Law of Contracts § 95 (2d ed. 1965); See Restatement (Second) of Contracts § 353, comment b (Tent.Draft No. 13, 1978). "Two contractors cannot by mutual agreement limit their power to control their legal relations by future mutual agreement. Nor can they in this manner prescribe new rules of evidence and procedure in the proof of facts and events." Corbin, Supra, at 206-08.

We have said that

(a) collective bargaining agreement is more than a contract; it is an attempt at self-government. In dealing with such agreements courts should not be preoccupied with principles which might apply to an ordinary contract.

Lodge 1327 v. Fraser & Johnston Co., 454 F.2d 88, 92 (9th Cir. 1971), Cert. denied, 406 U.S. 920, 92 S.Ct. 1775, 32 L.Ed.2d 119 (1972). The courts have not strictly adhered to contract rules in dealing with collective bargaining agreements. For example, they have held that consideration is not necessary to make a collective bargaining agreement enforceable. Darnel v. East, 573 F.2d 534, 537 (8th Cir. 1978), Citing Calhoun v. Bernard, 333 F.2d 739 (9th Cir. 1964). They have also held that non-parties may be bound by a collective bargaining agreement under certain conditions. John Wiley & Sons v. Livingston, 376 U.S. 543, 550-51, 84 S.Ct. 909, 11 L.Ed.2d 898 (1964). They have even held that some terms of a collective bargaining agreement bind the parties after the agreement has expired. NLRB v. Cone Mills Corp., 373 F.2d 595, 598 (4th Cir. 1967).

While we are not, therefore, "strictly bound by the technical rules of contract law," Lozano Enterprises v. NLRB, 327 F.2d 814, 818 (9th Cir. 1964), we nonetheless hold that the written collective bargaining agreement in this case was orally modifiable as to duration, notwithstanding the express provision to the contrary. The contract rule which we adopt is not contrary to federal labor policies and in fact effectuates the federal policy of maintaining "industrial peace." See Vaca v. Sipes, 386 U.S. 171, 182, 87 S.Ct. 903, 17 L.Ed.2d 842 (1967). It encourages resolution of labor disputes by negotiation rather than by the economic pressure of a strike. Therefore, we are justified in adopting it here. See Textile Workers Union v. Lincoln Mills, 353 U.S. 448, 456-57, 77 S.Ct. 912, 1 L.Ed.2d 972 (1957); United States v. Crain, 589 F.2d 996, 999 (9th Cir. 1979); United States v. Best, 573 F.2d 1095, 1101 (9th Cir. 1978). ⁴

B. Oral Collective Bargaining Agreements

As to Certified's oral collective bargaining agreement theory, it has long been established in this jurisdiction that a collective bargaining agreement need not be in writing in order to be enforceable: "The (National Labor Relations) Act, it is to be remembered, does not require contracts between employer and the union to be in any particular form, or that they be reduced to writing." NLRB v. Scientific Nutrition Corp., 180 F.2d 447, 449 (9th Cir. 1950); See 29 U.S.C. § 158(d); John Wiley & Sons v. Livingston, 376 U.S. at 550-51, 84 S.Ct. 909; NLRB v. Ralph Printing & Lithographing Co., 433 F.2d 1058, 1061 (8th Cir. 1970), Cert. denied, 401 U.S. 925, 91 S.Ct. 883, 27 L.Ed.2d 829 (1971); Teamsters, Chauffeurs, Warehousemen & Helpers Local Union 524 v. Billington, 402 F.2d 510, 513 & n. 3 (9th Cir. 1968); Warrior Constructors v. International Union of Operating Engineers, 383 F.2d 700, 706 (5th Cir. 1967). Therefore, the only issue remaining is whether Certified's oral modification and oral collective bargaining agreement theories are cognizable under its complaint.

C. Scope of the Complaint

The district court held that Local 996 was entitled to summary judgment because

(p)laintiff's complaint alleges breach of a written contract, I. e., the collective bargaining agreement. It does not allege breach of any oral contract. Because the written collective bargaining agreement expired on February 28, 1977, before the commencement of defendant's striking and picketing, there was no violation of the written agreement's no-strike clause.

We believe that the district court's reading of Certified's complaint is too restricted.

The complaint states, in part:

The Defendant, as the collective bargaining representative of the . . . employees . . . entered into a collective bargaining agreement . . . in writing effective March 1, 1974 to February 28, 1977 with the Plaintiff . . . . Such Agreement has since the date...