Higgins v. Oil, Chemical and Atomic Workers Intern. Union, Local No. 3-677

• Decision Date: 03 June 1991
• Parties: Alvin HIGGINS, Gerald Briggs, Wesley Banks, Christopher Ledford, Carmel Burleson, and John Conley, Plaintiffs-Appellees, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, LOCAL # 3-677, Defendant-Appellant. 811 S.W.2d 875, 122 Lab.Cas. P 56,999
• Court: Tennessee Supreme Court

Page 875

811 S.W.2d 875

Alvin HIGGINS, Gerald Briggs, Wesley Banks, Christopher Ledford, Carmel Burleson, and John Conley Plaintiffs-Appellees, v. OIL, CHEMICAL AND ATOMIC WORKERS INTERNATIONAL UNION, LOCAL # 3-677, Defendant-Appellant.

811 S.W.2d 875, 122 Lab.Cas. P 56,999

Supreme Court of Tennessee,

at Knoxville.

June 3, 1991.

Judith Fain, Erwin, for plaintiffs-appellees.

Cecil D. Branstetter, Branch H. Henard, III, Nashville, Michael J. Davenport, Johnson City, for defendant-appellant.

OPINION

DAUGHTREY, Justice.

This lawsuit involves an action in contract, brought by six former employees of Nuclear Fuel Services Company (NFS) against their union, the Oil, Chemical and Atomic Workers International Union, Local # 3-677 (the OCAW). ¹ The discharged workers alleged in their complaint that, based on an agreement with the OCAW, they were entitled to receive weekly compensation from the union in an amount equal to their lost wages, plus insurance coverage for themselves and their families, "until [they] were allowed or could return to work" at NFS. They further alleged that the union had breached this contract by discontinuing weekly payments while they were still unemployed.

The OCAW denied that there was ever an enforceable contract between the union and the discharged workers, although the union concededly had made weekly payments to the plaintiffs for some 22 months, in an amount totalling over $300,000. The disputed question, therefore, is whether and under what circumstances the OCAW was entitled to terminate these payments.

The chancellor held that there was a valid contract between the parties. The chancellor also found that the union had breached the contract and ordered the union to resume payments to the discharged workers under terms outlined below. On appeal from the trial court, the Court of Appeals likewise concluded that there was an enforceable contract, but it expanded the terms of the judgment against the union.

The OCAW now appeals the decision of the Court of Appeals, contending among other things ² that there was no valid contract because there was no mutual assent between the parties. We agree and we therefore reverse the judgment entered below.

I. FACTUAL BACKGROUND

The dispute in this case arose from a strike initiated by the local union against the company in May 1985, after negotiations on a new collective bargaining agreement were unsuccessful. The strike was a long and bitter one, continuing until March 1986, when a new contract was finally negotiated. During the course of the strike, certain picket line violence occurred, which the company blamed on seven of the striking workers. Final resolution of the strike was held up when NFS flatly refused to rehire these seven workers, including the six original plaintiffs in this case.

In the meantime, the other striking workers had become disgruntled and wanted to return to work. Union leaders were also interested in ending the strike quickly, because there was talk of a possible union decertification vote that would have the effect of costing all the striking workers their jobs.

The union negotiating team, consisting of the officers of the local union and a representative of the international union, met secretly with the plaintiffs in an effort to gain their approval of the proposed contract, which was then in the final stages of negotiation. At this meeting, on March 16, 1986, the committee proposed to the plaintiffs that local union dues would be increased in an amount sufficient to pay them their wages and insurance until such time as they were able to return to work. ³ Plaintiffs later claimed that in return they promised to remain silent at the upcoming union meeting and not to object to ratification of the proposed contract with NFS, even though it did not provide for their reemployment. However, the record indicates that at least two and possibly three or more of the plaintiffs did, in fact, oppose settlement of the strike at the later union meeting on March 30.

The business proceedings at the March 30 meeting were tape-recorded, and both the recording and a transcript of it were introduced at trial. The transcript indicates that the following motion was made by one of the union officers:

"Mr. Chairman, at this time I'd like to make a motion that in the event this contract is voted on, that we raise union dues in order to take care of these seven people on their regular wages plus insurance til they're back in the plant."

After this motion was seconded, a series of questions followed, all of them indicating confusion on the part of the union members as to the substance and effect of the motion.

Not surprisingly, the first question raised concerned the amount of the dues check-off that would be necessary to "take care of the seven." The presiding officer responded:

"Well, I'd say probably right now we're looking roughly at probably $50.00 or $60.00 [per month].... Now, you're looking at maybe--what we're going to do, we're going to speed this thing into arbitration. You may be looking at within two weeks, but the thing about it is, everybody won't be going back at the same time. They [the seven discharged workers] may be back before we get back to work."

The next question was whether the discharged workers' return to work would reduce the dues check-off. The chair, Mr. Tolley, responded:

"Yes, definitely. If we put all five--if we put the first five back the first week, then it would be dropped down as it goes in until they all go back. This is only to take care of the seven people."

Tolley then explained that the union expected not only to achieve reinstatement for the seven, but also to secure back pay for them, leaving an implication that the money advanced through the dues check-off would ultimately be returned to the membership.

When a union member asked from the floor to hear from the discharged workers, he was told by Tolley:

"We've talked to the seven people ... [They] are in agreement ... to stay out and take their chances under these conditions with arbitration."

Tolley and the International representative, Larry Able, then reassured the crowd that arbitration would be successful, pointing out, for example, that "it's very rare that you see any person lose his job as far as picket line violence. Most arbitrators are real easy because, what it is, [they know that the workers are just] out fighting to try to protect their jobs."

There is no doubt that there was considerable confusion among the members who attended the March 30, 1986, meeting. At one point, someone in the back of the hall shouted that they "didn't hear the proposal back here." In response, Mr. Tolley attempted to restate the original motion, but he did so in an obviously oversimplified fashion, saying, "The proposal was that we raise dues enough to take care of these people." There was no explanation about how long this might take, although there were additional assurances given that arbitration would be sought and that the international union would supply "the best representation ... the best lawyers that we can get" for the seven discharged members.

Given the tenor of statements made by those in charge of the meeting and the general level of confusion that prevailed, it is not surprising that some of the members who were present later testified at trial that they thought the increase in dues would last only two or three weeks, but in no event longer than "a couple of months." There is nothing in the record to indicate any intention to make payments in lieu of wages on a perpetual basis, other than the wording of the original motion calling for "wages plus insurance 'til they're back in the plant." As the chancellor later noted, however, to give literal effect to this provision would make the contract "void due to impossibility of performance," because performance would be wholly contingent on the action of a third party, the company, which might refuse to accept the discharged workers and then be vindicated in its position by the arbitrators.

In any event, the record indicates that the motion to "take care of the seven" carried by a vote of 274 to 29, and the new collective bargaining agreement was ratified by the union membership at the same meeting. Of the original six plaintiffs in this case, one was quickly rehired. A second pursued arbitration unsuccessfully and was not. Arbitration in the other four cases dragged out over many months, until finally, on February 10, 1988, the local union membership voted to terminate the remaining dues check-off used to fund the weekly payments. This lawsuit followed, based on the plaintiffs' claim that they had a valid contract that was breached by the union's termination of payments in February 1988, and that they are entitled to payments from that date "at least through the term of the [three-year] contract which was negotiated between the union and the management of Nuclear Fuel Services ... in March or April of 1986."

II. THE RULINGS BELOW

The chancellor noted that in its answer to the complaint, the union had denied the existence of a valid contract. The chancellor held that this issue had been waived, however, based on what we take to be an erroneous conclusion that "[d]uring the trial the parties failed to address the contract issue...." ⁴ The chancellor, having assumed the existence of a contract, went on to find that it had been breached and awarded the plaintiffs "their wages and insurance from the date of the termination of their benefits on February 1, 1988, until their cases are arbitrated or legally terminated, or until the end of the contract between the union and the company, whichever shall first occur." As noted above, the chancellor declined to give literal effect to the alleged promise to pay the plaintiffs until they actually returned to work, on the ground that performance based on such a contingency would make the contract void for impossibility of performance.

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