Zimco Restaurants, Inc. v. Bartenders and Culinary Workers Union, Local 340, AFL-CIO

• Decision Date: 18 November 1958
• Docket Number: L-CIO,No. 17818,17818
• Citation: 165 Cal.App.2d 235,331 P.2d 789
• Court: California Court of Appeals Court of Appeals
• Parties: , 36 Lab.Cas. P 65,094 ZIMCO RESTAURANTS, Inc., etc., Plaintiff, and H and E Food Corporation, a corporation, San Bruno Food Corporation, a corporation, Bay Region Catering Company, a corporation, William H. Shoenhals, San Mateo Drive-In Restaurant Association, an unincorporated association, Plaintiffs and Appellants, v. BARTENDERS AND CULINARY WORKERS UNION, LOCAL 340, AF OF, an unincorporated association, Thomas A. Small, individually and as Secretary-Treasurer of said Local 340 and as President of Central Labor Council of San Mateo County, Toy Smith, individually and as Assistant Secretary of said Local 340, Defendants and Respondents.

Page 789

331 P.2d 789

165 Cal.App.2d 235, 36 Lab.Cas. P 65,094

ZIMCO RESTAURANTS, Inc., etc., Plaintiff, and H and E Food Corporation, a corporation, San Bruno Food Corporation, a corporation, Bay Region Catering Company, a corporation, William H. Shoenhals, San Mateo Drive-In Restaurant Association, an unincorporated association, Plaintiffs and Appellants, v. BARTENDERS AND CULINARY WORKERS UNION, LOCAL 340, AF OF L-CIO, an unincorporated association, Thomas A. Small, individually and as Secretary-Treasurer of said Local 340 and as President of Central Labor Council of San Mateo County, Toy Smith, individually and as Assistant Secretary of said Local 340, Defendants and Respondents.

No. 17818.

District Court of Appeal, First District, Division 1, California.

Nov. 18, 1958.

Hession, Robb & Creedon, San Mateo, Paul F. Kelly, San Mateo, of counsel, for appellants.

O'Keefe & O'Keefe, Redwood City, for respondents.

ST. CLAIR, Justice pro tem.

A group consisting of two individuals and three corporations, the owners and operators of six drive-in restaurants in San Mateo County entered into an agreement on June 26, 1952, with Local 340 of the Bartenders and Culinary Workers Union. In the preamble, the five owners were referred to simply by 'hereinafter called the 'Employer'.' Each of the owners signed the agreement; there was no reference to them in any collective capacity on the signature page or anywhere in the agreement, other than as above.

The pertinent portion of that agreement (exhibit A) reads: '1. An election by secret ballot shall be conducted amongst the employees of 'Employer' in San Mateo County, * * * for the purpose of determining whether such employees desire to be represented for purposes of collective bargaining by the 'Union'. * * *

'2. The 'Union' expressly agrees that, in the event that a majority of said employees vote that they do not wish to be represented for purposes of collective bargaining by the 'Union' that it will not make claim for representation for the purposes of collective bargaining agreement against 'Employer' for a period of three (3) months from and after the date the results of said election have been determined. Thereafter, if such claim be made, the question shall be resolved by an election by secret ballot in the same manner as is herein provided. * * *

'3. 'Employer' agrees that, in the event that a majority of said employees vote that they do wish to be represented for purposes of collective bargaining by the local, that each and all of the parties constituting 'Employer' in this agreement, and their successors in interest, if any, will be bound by the agreement concerning wage scales and working conditions which is attached hereto and made a part of this Memorandum of Agreement by this reference. * * *' (Emphasis added.)

The election was held pursuant to the contract, a majority of the employees voting against union representation.

Zimco Restaurants, Inc., (hereinafter called Zimco) purchased Smith's Drive-In No. 2, Inc., a signatory of the agreement, in March, 1954. There were meetings between some of the employers and union representatives at which there was discussion of the original agreement and its present effect, if any, on Zimco as a successor in interest to Smith's Drive-In No. 2, Inc. On conflicting evidence the trial court found that the agreement of June 26, 1952, was without a definite term, could be terminated at will, and was so terminated by notice of termination given by defendant union at the above mentioned 1954 meeting.

In 1956, all of the employees of Zimco had become members of respondent union. Union sought a collective bargaining agreement between itself and Zimco but was confronted by Zimco's claim for an election under the agreement of June 26, 1952.

After sanction by the Central Labor Council of San Mateo County, picket lines were established around Zimco's place of business but not around that of any other plaintiffs.

This action for injunctive relief followed. Preliminary relief was denied. After trial the court denied injunctive relief and this appeal followed.

The appeal was abandoned by Zimco, leaving as appellants herein H and E Food Corporation and San Bruno Food Corporation, signers of the agreement of June 26, 1952, and nonsigners Bay Region Catering Co., successor in interest to signer Harry A. Marquard, William H. Schoenhals, successor in interest to signer Elmer C. Smith, and San Mateo Drive-In Restaurant Association.

Many points were raised and exhaustively and ably briefed by both sides. Included by both sides were arguments on the point which we believe determines the case, to wit, that the agreement in question was for an indeterminate term and hence terminable at will by either party, on reasonable notice.

Examination of the quoted pertinent language of the agreement in question shows there was no fixed term; the agreement was either perpetual or for an indeterminable term. Before we enter into a discussion of the basic problem we should dispose of the contention that the contract is void ab initio for indefiniteness because of the lack of duration clause.

The general California rule appears to be that a contract is not fatally defective merely because it does not specify a time presently definite for its termination, 12 Cal.Jur.2d 310. The rule is that if the contract is to remain in effect so long as one continues to perform or act in a certain manner (as in the instant case) the agreement is sufficiently certain to be vital. Long Beach Drug Co. v. United Drug Co., 13 Cal.2d 158, 88 P.2d 698, 89 P.2d 386; Great Western Distillery Products v. John A. Wathen Distillery Co. 10 Cal.2d 442, 74 [165 Cal.App.2d 238] P.2d 745; Ravel v. Hubbard, 112 Cal.App.2d 255, 246 P.2d 88.

We assume that the agreement in question was initially valid, under the above rule. The trial court having found, on conflicting evidence, that one party had given reasonable notice of termination, the real question is whether it required the mutual agreement of all parties thereto to terminate the same, or whether it was terminable at will by either party.

The key finding of the trial court reads: 'The Agreement of June 26, 1952, identified as Exhibit 'A' is invalid, unenforceable, and of no force or effect in that it is in perpetuity and has no termination date, and if it was valid at any time, for any period of time, or for any purpose, it was an agreement without a definite term and could be terminated at will, and it was so terminated by notice of termination given by defendant Union.'

Both parties construe this finding to be referring to two separate types of agreement, to wit, one calling for perpetual performance and one providing for an indefinite term. For the purposes of this case, we accept that construction.

The premise appears to be that a contract calling for perpetual performance is one that requires the consent of both parties to terminate,...