Dogherra v. Safeway Stores, Inc.

• Decision Date: 21 June 1982
• Docket Number: 81-4351,Nos. 80-4178,s. 80-4178
• Parties: 110 L.R.R.M. (BNA) 2790, 94 Lab.Cas. P 13,677 Roni K. DOGHERRA, Plaintiff-Appellee, v. SAFEWAY STORES, INC., Defendant-Appellant.
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1293

679 F.2d 1293

110 L.R.R.M. (BNA) 2790, 94 Lab.Cas. P 13,677

Roni K. DOGHERRA, Plaintiff-Appellee, v. SAFEWAY STORES, INC., Defendant-Appellant.

Nos. 80-4178, 81-4351.

United States Court of Appeals Ninth Circuit.

Argued and Submitted Jan. 12, 1982.

Decided June 21, 1982.

Richard H. Harding, Littler, Mendelson, Fastiff, Tichy, San Francisco, Cal., argued, for Safeway Stores, Inc.; Alan B. Carlson, Littler, Mendelson, Fastiff, Tichy, San Francisco, Cal., on brief.

Charles A. Dyer, Cotchett, Hutchinson & Dyer, San Mateo, Cal., for dogherra.

Appeals from the United States District Court for the Northern District of California.

Before BROWNING, Chief Judge, SKOPIL and NORRIS, Circuit Judges.

SKOPIL, Circuit Judge:

INTRODUCTION

Safeway terminated Dogherra for failing to return from leave as required. Dogherra insisted that she had notified her assistant manager, Martinez, prior to the end of her leave of her availability to work. Dogherra asked her union to file a grievance. The union dispatched investigators. Martinez allegedly told them that Dogherra had not reported for work before her leave ended. The union dropped Dogherra's grievance. Dogherra was awarded unemployment compensation, over Safeway's objection. The union sought to reopen Dogherra's grievance. At a hearing before an arbitrator, Safeway argued that Dogherra's grievance was barred by laches. The arbitrator agreed with Safeway and held the grievance non-arbitrable, stating that once the grievance was dropped, it could not be reviewed five months later. Martinez subsequently admitted that his statement that Dogherra had not reported for work before her leave ended was a lie.

Dogherra sued pursuant to section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. The district court held that Martinez' lie "thwarted and subverted Plaintiff's efforts to arbitrate her grievance." The district court concluded that Safeway violated the collective bargaining agreement and ordered Safeway to reinstate Dogherra and compensate her for lost wages. The district court taxed Safeway with costs and attorneys' fees of $50,305. Safeway appeals.

ISSUES

1. Did the district court clearly err in finding that Martinez was Safeway's agent when he lied to union investigators?

2. Did the district court clearly err in finding that Martinez' lie caused the union to drop Dogherra's grievance?

3. Did the district court err in holding that Martinez' lie vitiated the finality and binding effect of the arbitral decision?

4. Did the district court abuse its discretion in awarding Dogherra $50,305 in attorneys' fees and costs?

DISCUSSION

I. Agency.

A finding that one person is another's agent is generally reviewed as a question of fact, governed by the clearly erroneous standard. See Aguirre v. Automotive Teamsters, 633 F.2d 168, 174 (9th Cir. 1980); Laborers & Hod Carriers Local 341 v. NLRB, 564 F.2d 834, 839 (9th Cir. 1977). The nature and extent of the agent's authority and whether apparent authority existed are also questions of fact. Lockwood v. Wolf Corp., 629 F.2d 603, 609 (9th Cir. 1980); Coast Trading Co. v. Cudahy Co., 592 F.2d 1074, 1078 (9th Cir. 1979).

Under section 301, determinations regarding agency are governed by common law principles. Aguirre v. Automotive Teamsters, 633 F.2d at 171; Hasbrouck v. Sheet Metal Workers Local 232, 586 F.2d 691, 693 (9th Cir. 1978). Actual authorization or subsequent ratification is not controlling. 29 U.S.C. § 185(e). A principal may be liable if its agent has implied or apparent authority. Laborers & Hod Carriers Local 341 v. NLRB, 564 F.2d at 839. Even specifically forbidden acts may be within an agent's authority. Id.; NLRB v. ILWU Local 10, 283 F.2d 558, 565 (9th Cir. 1960). An act is not imputed to the principal if the agent has no intention to further the principal's interests. NLRB v. ILWU Local 10, 283 F.2d at 565, quoted in Hasbrouck v. Sheet Metal Workers Local 232, 586 F.2d at 693. An act is not imputed to a principal where third parties know that the agent is not speaking for the principal. Butler-Johnson Corp. v. NLRB, 608 F.2d Safeway contends that the district court made no finding that Martinez was Safeway's agent. This argument appears for the first time on appeal in Safeway's reply brief. We cannot say that the appellee has not been misled nor that the issue has been fully explored. Accordingly, we decline to consider it. Ellingson v. Burlington Northern, Inc., 653 F.2d 1327, 1331-32 (9th Cir. 1981).

1303, 1306 (9th Cir. 1979); NLRB v. Sonora Sundry Sales, Inc., 399 F.2d 930, 935-36 (9th Cir. 1968).

Safeway also argues that no record evidence would support such a finding. Safeway concedes that Martinez, as assistant manager, was empowered to reinstate employees returning from leaves of absence. Safeway argues only that Martinez was not and could not have been seen as its agent when he lied to union investigators. Safeway notes that Martinez and Dogherra were members of the same union. Safeway also argues that it did not tell Martinez to lie nor did it know what Martinez told the union investigators.

When the union investigators sought to ascertain whether Dogherra had reported for work, they spoke to Martinez precisely because Safeway had empowered him to reinstate employees returning from leaves of absence. We cannot say that the district court clearly erred in finding that Martinez was Safeway's agent for purposes of arranging for Dogherra's return from leave.

The agency is not necessarily vitiated even if Safeway did not tell Martinez to lie nor know what Martinez told the union investigators. As noted above, even acts specifically forbidden by the principal may be within the scope of the agent's authority. E.g., NLRB v. ILWU Local 10, 283 F.2d at 564-65. Martinez stated that he understood that Safeway did not want Dogherra as its employee. He felt that lying to the union investigators would help attain Safeway's goal. He intended to further Safeway's interests. His conduct is therefore chargeable to Safeway.

II. The Decision to Drop the Grievance.

The reason the union dropped Dogherra's grievance is a fact question, reviewed under the clearly erroneous standard.

Safeway conceded that Martinez told a union investigator that Dogherra had not reported for work. Safeway argues that Martinez made this statement after the union had dropped Dogherra's grievance and was deciding whether to reopen it. This argument appears for the first time in Safeway's reply brief on appeal. Dogherra has not had an opportunity to meet it. We decline to consider it. Ellingson v. Burlington Northern, Inc., 653 F.2d at 1332; Duval Corp. v. Donovan, 650 F.2d 1051, 1054 (9th Cir. 1981).

Safeway also argues that factors other than Martinez' statement led the union to drop Dogherra's grievance. There was evidence that Dogherra's failure to obtain a medical release did not cause the union to drop her grievance. The district court was justified in concluding that Martinez' statement had a greater effect on the union investigators than the fact that other store employees had no recollection of the occurrences. The district court did not clearly err in deciding Martinez' conduct was the determinative factor behind the union's decision to drop the grievance. No doubt had Martinez volunteered the truth during the initial investigation, Dogherra's claim would have been strong, and it seems highly probable that the union would have pursued the grievance.

III. Repudiation of the Arbitral Process.

The parties' collective bargaining agreement specified arbitration as the preferred method of dispute resolution. As a result, we will not disturb an arbitration award "except on the grounds of fraud, deceit, or breach of the duty of fair representation or unless the grievance procedure was a 'sham, substantially inadequate or substantially unavailable.' " Castaneda v. Dura-Vent Corp., 648 F.2d 612, 619 (9th Cir. 1981) (quoting Harris v. Chemical Leaman Tank Lines, 437 F.2d 167, 171 (5th Cir. 1971)). Fraud is also a ground for vacating Obtaining an award by perjured testimony constitutes fraud. See Newark Stereotypers' Union No. 18 v. Newark Morning Ledger Co., 397 F.2d 594, 598 (3d Cir.) (dictum), cert. denied, 393 U.S. 954, 89 S.Ct. 378, 21 L.Ed.2d 365 (1968); Shearson Hayden Stone, Inc. v. Liang, 653 F.2d 310, 313 (7th Cir. 1981); Karppinen v. Karl Kiefer Machine Co., 187 F.2d 32, 34-35 (2d Cir. 1951) (assuming without deciding the question) (construing 9 U.S.C. § 10(a)). Accordingly, intentionally giving a false statement to union investigators causing them to drop the grievance until after it was time-barred also constitutes fraud. Congress anticipated "that the contractual machinery would operate within some minimal levels of integrity." Hines v. Anchor Motor Freight, 424 U.S. 554, 571, 96 S.Ct. 1048, 1060, 47 L.Ed.2d 231 (1976).

an arbitral award under the Federal Arbitration Act. 9 U.S.C. § 10(a). Neither the Supreme Court nor this court has ever held the Federal Arbitration Act applicable to arbitration of labor disputes. See Textile Workers v. Lincoln Mills, 353 U.S. 448, 466-67, 77 S.Ct. 912, 926, 1 L.Ed.2d 972 (1957) (Frankfurter, J., dissenting); Local 1020, United Brotherhood of Carpenters v. FMC Corp., 658 F.2d 1285, 1289-90 (9th Cir. 1981); Local 13, ILWU v. Pacific Maritime Ass'n, 441 F.2d 1061, 1064-65 & n.5 (9th Cir. 1971), cert. denied, 404 U.S. 1016, 92 S.Ct. 677, 30 L.Ed.2d 664 (1972). Because fraud is a ground for vacating an arbitral award under either the Federal Arbitration Act or the federal common law fashioned from the policy of the national labor laws under the authorization of Textile Workers v. Lincoln Mills, 353 U.S. at 457, 77 S.Ct. at 918, we need not decide whether the Federal Arbitration Act governs labor arbitrations. See Local 1020, United Brotherhood of Carpenters v. FMC Corp., 658 F.2d at 1295; Service Employees Int'l Union, Local 36 v. Office Center Services, 670 F.2d 404,...