Jamison v. Consolidated Utilities, Inc.

• Decision Date: 03 March 1978
• Docket Number: No. 3211,3211
• Parties: 85 Lab.Cas. P 55,175 Ralph J. JAMISON, Gerald Willard, B. A. Gilbert, Frank Steger, Thomas Mahan, Alan Tri, Emil Dolchok, J. T. Stover, Gary Steger and Richard Baldwin, Appellants, v. CONSOLIDATED UTILITIES, INC., Appellees.
• Court: Alaska Supreme Court

Page 97

576 P.2d 97

85 Lab.Cas. P 55,175

Ralph J. JAMISON, Gerald Willard, B. A. Gilbert, Frank Steger, Thomas Mahan, Alan Tri, Emil Dolchok, J T. Stover, Gary Steger and Richard Baldwin, Appellants, v. CONSOLIDATED UTILITIES, INC., Appellees.

No. 3211.

Supreme Court of Alaska.

March 3, 1978.

Robert M. Goldberg, Anchorage, and Johnston Jeffries, Kenai, for appellants.

Denis R. Lazarus, Anchorage, for appellees.

Before BOOCHEVER, C. J., and RABINOWITZ, CONNOR, BURKE and MATTHEWS, JJ.

OPINION

RABINOWITZ, Justice.

Appellants, ten former employees of appellee Consolidated Utilities, Ltd., filed a complaint in the superior court seeking past due wages based on an agreement allegedly entered into by their union, the International Brotherhood of Electrical Workers, Local 1547, and Consolidated Utilities. After discovering that the collective bargaining agreement had not been executed, appellants filed an amended complaint seeking retroactive pay based on the unexecuted agreement, the terms of which, they alleged, were "operative and dependent" on only one condition, that Consolidated receive a rate increase from the Alaska Public Utilities Commission. Appellants also sought relief in quantum meruit. ¹ Consolidated answered, denying most of the allegations in the complaint and asserting several affirmative defenses. The matter ultimately came before the superior court for a non-jury trial. After the trial was completed, the superior court advised the parties of its decision, stating:

I started with the feeling at the end of the trial that, even if all of the legal issues could be resolved in favor of the plaintiffs, the evidence simply did not allow for recovery by them. After a thorough review of the testimony and the authorities cited, I must so find.

This appeal followed the entry of a formal order in favor of Consolidated Utilities.

The relevant facts are as follows: IBEW Local 1547 and Consolidated Utilities entered into a collective bargaining agreement on July 7, 1970, which by its terms was to continue in effect from April 1, 1970, through March 31, 1971, and "from year to year thereafter unless written notice of termination or request for proposed amendments (was) served by either party not less than sixty (60) days prior to December 31 of any year." The only evidence presented which tended to show that a notification had been sent to Consolidated by the union was a box checked on a form "Request for Strike Sanction" sent by the Local to the International stating that the Local had sent the required notice to the employer. Isaac Waldrop, business manager of the Local, testified that the statements on the form were true. However, after searching the union's files, he could not locate a copy of any written notice sent to Consolidated. The company's bookkeeper, Donald Bailey, testified that he had checked the company's files and could not find a notification. The superior court found that the required notice was not given.

Although the required notification was apparently never given, there were several intraunion meetings discussing a new contract with a wage increase. At this time Consolidated was in very bad financial condition; the employees knew of this condition. ² At one intraunion meeting held to discuss what the union wanted to negotiate, Gerald Blevins, the power plant manager, told the employees that Consolidated would be unable to pay them any more money. Nevertheless, at some point, a collective bargaining agreement was drawn up by the union and presented to the management of Consolidated. ³ The proposed agreement was a three-year contract to run from April 1, 1971, through March 31, 1974. The proposed wage scale for the first year presented approximately a dollar an hour increase for most employees. Roy Marquardt, Consolidated's president, testified that when he met with Waldrop, the business manager of the union, he told Waldrop that a raise was out of the question. He testified:

I did meet with Ike Waldrop and told him that under the circumstances we absolutely could not give the boys a raise at that time. And I'm sure that at the same meeting I told him that we were hoping to put in an application for a rate increase to the PUC which was delayed, unfortunately. The referee (in bankruptcy) didn't think this was a suitable charge, so it was delayed. But anyhow, I told Ike that we would ask for an increase to cover an increase for the employees as well as an increase that would hopefully allow us to exist and, in fact, I asked him for any support that he could give us with the PUC when the time came.

There was never any intent on our part and I'm sure that he understood at the time to try to ask for a retroactive increase, which in fact I don't think the PUC would have given under any circumstances. . . . And I know . . . I told Mr. Waldrop . . . that an increase, if we got it, would be made effective as of the date we got it.

Consolidated requested a rate increase, in part, based on increased labor costs. Tom Hix, business representative of IBEW Local 1547, testified before the Alaska Public Utilities Commission in March of 1972 with respect to the proposed wage increase.

MR. LAZARUS (counsel for Consolidated): (U)nder what contract or pay figures . . . is CUL and the union working now?

MR. HIX: Right now they're drawing pay at the rate on the contract that expired in April of 1971.

MR. LAZARUS: All right, and have you entered into negotiations with (Consolidated) insofar as the new rates are concerned?

MR. HIX: Yes, . . . it began in April of '71 and I believe it was either June or . . . the latter part of July, I believe it was, of '71 that we had arrived at a new contract with new rates and stuff subject to the approval of the bargaining union employees, of course.

MR. LAZARUS: And has this agreement been tentatively approved?

MR. HIX: Tentatively approved and as I say subject to the approval of the bargaining union employees(.)

In June of 1972, the Commission denied Consolidated's request for a flat rate of 22 mills per kilowatt hour, but granted a rate of 18 mills. The Commission specifically did not consider the proposed labor increases in granting the increase. The Commission found:

CUL estimates that its labor will increase by $26,100 in the test year (fiscal 1972 over fiscal 1971). However, as of the date of the hearing no wage increase had been granted, and Exhibit 4 between CUL and the union representing its employees was only a proposed contract containing tentative labor rates. It is commonly accepted in the utility regulatory field that when wage increases have not been implemented, they will not be recognized for the purpose of determining a utility's revenue requirement in a rate proceeding. Furthermore, the tentative wage increases appear to be clearly in excess of the policies set by the United States Price Commission. The Commission also notes that CUL's labor charges for the year ended June 30, 1970, were only $59,869 compared to the $84,300 figure for the year ended June 30, 1971. The increase in that year was $24,431, an increase of approximately forty percent. A further proposed increase in the test year of almost thirty percent in labor costs can only be indicative of poor management procedures and inefficient use of help. Such increases cannot be considered reasonable by this Commission.

Approximately one month after the rate increase was given to Consolidated, the company's permit and operating contract were sold to Homer Electric Association.

The testimony at trial differed greatly on the issue of what representations had been made to the employees. Frank Steger, one of the employees, testified that Max Von Radics, a shareholder and director of Consolidated who had significant contact with the employees, told him in June 1971 that the employees had to work to keep the plant going so they could be paid their back pay. Ralph Jamison, another employee, testified that Von Radics told him substantially the same thing. Gerald Willard testified that Von Radics said they would get their back pay if they stayed with the plant. Emil Dolchok testified that Von Radics said they "would get (their) pay if (they) stayed and worked." J. T. Stover testified about a similar representation made by Von Radics to him. Von Radics testified that he had never made any statements about retroactive pay. However, he did testify that had they received a rate increase the men would be paid more.

Other employees testified about a Christmas party in 1971. Benjamin Gilbert testified that Gerald Blevins, plant manager, told them at the party that they could expect the retroactive pay and full union-scale wages, but they had to work for it. Thomas Mahan did not testify about retroactive benefits, but remembered Blevins saying that the workers had to "get on the ball" to get the increases in the contract. Blevins testified that he did not recall any statements about wages at the Christmas party, but if anything had been said, it would have been that if Consolidated received a rate increase, they would be in a position to negotiate with the union.

There were other representations about which the employees testified. Emil Dolchok testified that Blevins said when Consolidated was given a rate increase, the employees would be given retroactive pay. Benjamin Gilbert testified that during the period that the Commission was considering Consolidated's application, Blevins was very happy because it looked as though Consolidated would be granted an increase. Gilbert said that Blevins told him that the increase would enable the company to pay the retroactive benefits and also bring the employees wage up to union scale. He further testified that Blevins made some calculations of how much the retroactive benefits would cost the company. Gerald Willard testified that Blevins often assured him that when the company received their rate increase, it would pay the employees retroactive benefits....