District 4, Communications Workers of America (CWA), AFL-CIO v. NLRB

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Submitted September 30, 2022 Decided February 14, 2023

No. 21-1188

DISTRICT 4, COMMUNICATIONS WORKERS OF AMERICA

(CWA), AFL-CIO,

PETITIONER

v.

NATIONAL LABOR RELATIONS BOARD,

RESPONDENT

THRYV, INC., FORMERLY KNOWN AS DEX MEDIA, INC., D/B/A

DEXYP,

INTERVENOR

On Petition for Review of an Order

of the National Labor Relations Board

Matthew R. Harris was on the briefs for petitioner.

Ruth E. Burdick, Deputy Associate General Counsel,

National Labor Relations Board, David Habenstreit, Assistant

General Counsel, Julie Broido, Supervisory Attorney, and

Gregoire Sauter, Attorney, were on the brief for respondent.

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David Zwisler was on the brief for intervenor Thryv, Inc.

in support of respondent.

Before: SRINIVASAN , Chief Judge, PILLARD, Circuit

Judge, and SENTELLE, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge PILLARD.

Dissenting opinion filed by Senior Circuit Judge

SENTELLE .

PILLARD , Circuit Judge: We are asked to decide which of

two different retirement-benefit terms binds the parties to a

labor agreement. It is undisputed that, before the parties

arrived at the 2016 labor agreement at issue, the Company’s

benefit plan offered bargaining-unit employees a tax-

advantaged defined contribution plan under Internal Revenue

Code Section 401(k)—a “401(k)” for short. It is also common

ground that the predecessor collective bargaining agreement

did not mention any 401(k) benefit, whereas the new agreement

guarantees the employer will continue to provide a 401(k)

benefit. But the parties dispute which of two documents—with

different 401(k) terms—reflects their final and binding

agreement.

The Company asserted and the Board determined that the

binding agreement is the September 16, 2016, Memorandum of

Agreement, as hand signed by Company and Union bargaining

representatives. The Union asserts that a different contract

document, as typed up and circulated to the parties almost a

year later, is the one that binds. At first blush, it might seem

that the later document, finalized and circulated for the parties’

reference going forward, must be the authoritative agreement.

And the Company might appear to be on thin ice in objecting

to a more generous 401(k) term it concededly inserted into that

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finalized document—a term that the Union embraced and now

seeks to enforce. But, as the Board recognized, which of the

conflicting provisions applies turns on when the parties reached

final agreement: The retirement-benefit term they agreed to at

that time is the one that binds them.

The hand-signed 2016 Memorandum of Agreement states

that “[t]he Union and Employer collectively have reached

agreement and the predecessor agreement shall only be revised

as specifically set forth herein.” J.A. 709. That Agreement’s

401(k)-benefit term committed only that the labor agreement

would “acknowledge the provision of a 401(k) benefit.” J.A.

729. The version posted the following year is a revision of the

predecessor labor agreement, meant to incorporate the terms of

the 2016 Memorandum of Agreement. In contrast to the hand-

signed version, however, the revised contract document states

that the employer’s 401(k) matching rate will be “no less than

100% for each employee dollar contributed to individual

accounts up to 5% maximum contribution.” J.A. 371.

When the Company upgraded its retirement-benefit

offering in 2018, the Union brought the unfair labor practice

charge at issue here. The Union claimed that the Company

unilaterally modified the parties’ collective bargaining

agreement by “implementing a 401(k) contribution matching

structure other than that specifically negotiated and

memorialized in the CBA [Collective Bargaining

Agreement].” Charge Against Employer, Attachment A

(stating basis of charge), J.A. 3. The new, objected-to 401(k)

plan guaranteed up to 4.8 percent overall match—the same

overall match the Company had been providing, but structured

a bit more favorably to the beneficiaries than the previous plan

by front-loading the employer’s matching contribution. The

Union pointed to the “5% maximum contribution” language in

the revised contract document to assert that the new plan fell

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short. The Company responded that it had inserted that 5

percent term by mistake in the process of revising the

predecessor agreement to reflect the terms of the 2016

Memorandum of Agreement.

The Board dismissed the complaint, concluding that the

parties reached a final and binding labor contract as of

September 16, 2016, and that the difference between the 2016

Memorandum of Agreement and the 2017 contract revision

resulted from a drafting error. To identify when the parties

reached final agreement—and so which 401(k) term binds

them—the Board considered evidence of the parties’

bargaining history. The Board found that the parties reached

final agreement at the close of negotiations in September 2016,

when they signed the 2016 Memorandum of Agreement as the

exhaustive list of their agreed revisions to the 2013 predecessor

contract. During negotiations, the Board found, the Union had

proposed and the Company rejected a 6 percent and then a 5

percent 401(k) match. The decisive compromise leading to

agreement on the new contract was to expressly acknowledge

a 401(k) benefit, without commitment to any particular match.

The Company’s Board of Directors and the bargaining unit

members ratified the new contract in late 2016 based on the

2016 Memorandum of Agreement. The follow-up

communications between the Company’s and Union’s

representatives in 2017 were aimed at revising the 2013

contract’s text to reflect the terms of the Agreement they had

reached; the parties never purported to be negotiating

substantive terms during that ministerial process. In that

context, the Board permissibly determined that the hand-signed

2016 Memorandum of Agreement was final, binding, and

exhaustive, such that its retirement-benefit term governs.

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The Union seeks review here, arguing that the Board

misapplied its precedent, impermissibly considered parol

evidence of the parties’ bargaining history, and found facts

unsupported by substantial evidence. For the reasons that

follow, we deny the petition for review.

BACKGROUND

I. Facts

DexYP (the Company) publishes and sells the Yellow

Pages phone directory and other marketing tools. The

Company was known as YP Midwest Publishing until June

2017, when it was acquired by Dex Media Holdings, Inc. and

became DexYP. DexYP has a collective bargaining

relationship with the Communication Workers of America (the

Union), which represents a bargaining unit of staff associates,

service representatives, customer service specialists, and art

technicians. YP Midwest Publishing and the Union had

entered into a 2013 Collective Bargaining Agreement and a

2016 successor Collective Bargaining Agreement. When Dex

Media Holdings acquired the Company in 2017, the 2016

agreement remained in effect and the new management

committed to honoring all existing Collective Bargaining

Agreements and bargaining obligations.

The parties to the 2016 collective bargaining negotiations

used the terms of the 2013 Collective Bargaining Agreement

as the baseline from which they bargained. That predecessor

contract consisted of a main agreement with forty-one articles

and seven exhibits, plus thirty-seven side letters, a 2013

memorandum of agreement, and three appendices. Although

that pile of documents comprising the 2013 contract made no

mention of retirement benefits, the employer’s benefits plan at

the time included a 401(k) benefit for which the bargaining unit

employees were eligible. That 401(k) plan provided that, for

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employees who contributed up to 6 percent of their salary to a

401(k) account, the employer would match the employees’

contributions at 80 percent, i.e., contribute to an employee’s

retirement account an amount equal to 4.8 percent of the

employee’s salary.

In September 2016, the Company and the Union signed a

twenty-page Memorandum of Agreement memorializing the

various revisions they agreed to make to the 2013 contract. The

cover page of the Memorandum of Agreement stated: “The

Union and Employer collectively have reached agreement and

the predecessor agreement shall only be revised as specifically

set forth herein.” J.A. 709. The Memorandum of Agreement

reads like a to-do list of items to be written into the text of the

predecessor agreement, with twenty-four revisions identified.

Some revisions are short and straightforward: “Delete Letter

25 and Letter 30.” J.A. 729. Other revisions specify new

language for existing articles, increase certain reimbursement

rates and weekly wages, or set conditions for new Company

roles. The Memorandum addresses 401(k) retirement benefits

as follows: “The Company agrees to acknowledge the

provision of a 401(k) benefit to bargaining union [sic: unit]

employees in the drafting of the collective bargaining

agreement.” J.A. 729.

The Company and Union did not complete the revised

document incorporating their negotiated revisions into the

existing contract until almost a year later. The cover page of

that contract document as distributed late in 2017 is nearly

identical to the cover page of the 2016 Memorandum of

Agreement. The only difference is that actual signatures

appeared on the cover page of the Memorandum, whereas the

signatories’ names were typed on the cover of the document as

posted and circulated. But the signatories are the same, and

both documents show September 16, 2016, as the signing date.

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Indeed, the Company signatory whose name is typed in is Keith

Halpern—who represented DexYP at negotiations during 2016

and hand signed the Memorandum of Agreement—even

though he no longer worked for the Company when the revised

contract document was produced with his name typed on it in

2017.

Central to the current dispute, the revised contract

document as circulated includes specific language about the

401(k) benefit that is absent from the 2016 Memorandum of

Agreement. Whereas the Agreement states only that the

Company would “acknowledge the provision of a 401(k)

benefit,” the circulated contract document says: “The

Company 401K matching rate for all bargaining unit

employees will be no less than 100% for each employee dollar

contributed to individual accounts up to 5% maximum

contribution.” J.A. 371, 729. The question here is which of

those terms reflects the binding agreement of the parties.

To resolve which 401(k) term controls, the Board

considered the parties’ bargaining history for the 401(k) term

and made factual findings. In brief, the Board recounted the

following series of events.

In the negotiation for the 2016 Collective Bargaining

Agreement, the Union sought to secure a labor-contract term

protecting employees’ 401(k) benefits. Over the course of

negotiations, the Union twice unsuccessfully sought to secure

a specific level of employer match of employees’ 401(k)

contributions. In June 2016, the Union proposed “to change

the Company matching rate so that all bargaining unit

employees receive[d] a Company match of 100% for each

employee dollar contributed to individual accounts up to 6%

maximum contribution.” J.A. 776 (Resp. Exh. 6 – Company-

Held Bargaining Proposals and Bargaining Notes). YP

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Midwest Publishing rejected the offer. Later that month, the

Union proposed a 100 percent employer match up to 5 percent

maximum contribution. The Company also rejected that offer.

After the Union and YP Midwest Publishing failed to

reach agreement on the amount of a 401(k) match, they settled

on a compromise to prevent the employer from eliminating the

benefit: Teri Pluta, the lead Union negotiator, and Keith

Halpern, the lead Company negotiator, agreed to “have

language in the contract that guarantees the 401(k).” J.A. 161.

As Pluta later testified, the Union’s negotiating committee

members anticipated the change in Company ownership that in

fact took place in June 2017, and they “fear[ed] that . . . a new

owner may or may not honor collective bargaining agreements,

past practice, [or] provide the same type of benefits, so it

became more important to [the] committee to make sure that

they could get some guarantees there.” J.A. 159.

Steve Flagler, a Company attorney, testified that the

Company never agreed to a 5 percent 401(k) match during the

pre-ratification negotiations, but only agreed to “have a

reference in the contract to the fact that there was a 401(k) plan

offered to [the Union’s] members.” J.A. 114. Testifying as a

rebuttal witness, Pluta repeatedly acknowledged on cross

examination that the Company never agreed during

negotiations to a 5 percent 401(k) match, and that “language

that would guarantee the 401(k)” was “the very last item that

sealed the deal . . . .” J.A. 187.

At the close of negotiations in September 2016, employer

and Union representatives drafted and signed the 2016

Memorandum of Agreement. Shortly after the negotiators

signed the Memorandum of Agreement, the bargaining unit

members and the Company’s Board of Directors both ratified

the new Collective Bargaining Agreement as memorialized in

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the Memorandum of Agreement. That Collective Bargaining

Agreement became effective for a three-year term.

Almost a year later, after Dex Media Holdings acquired

the Company, the Company and Union completed the revised

document incorporating their negotiated revisions into the

existing contract. In April 2017, seven months after

negotiations concluded, Union representative Teri Pluta

emailed the Company’s labor counsel, Brian Herman, and

asked why the revised contract was not yet ready. Herman

emailed a document eleven days later, with redlines marking

the changes from the 2013 contract. No party representative

remarked on the 5 percent language at the time, but Teri Pluta

later testified that it was in “the first draft that came from YP.”

J.A. 164. In September 2017, Pluta emailed back to Steve

Flagler, another Company attorney, a clean version of the

document, explaining that she had accepted the redlined

revisions and fixed an error: a missing wage scale for a new

position the parties agreed to in the 2016 negotiations. In that

email, Pluta told Flagler that the document was ready to be

posted as the updated contract.

Flagler responded that he would post the contract to the

Company intranet and print copies for the local unions. Flagler

and Herman reviewed the document before posting it to the

intranet. As Flagler later acknowledged, he “missed” the

reference to a 5 percent match when he reviewed the post-

ratification revisions. J.A. 116.

There was no substantive discussion or approval action by

either side beyond the October 2016 ratification vote by the

bargaining unit members and approval by YP Midwest

Publishing’s Board of Directors. Pluta testified that, in the

interim between the April 2017 and the September 2017

emails, the Union and the Company had no discussions about

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401(k) benefits and exchanged no other versions of the revised

contract.

A month after Company representative Steve Flagler

posted the updated document, a local Union vice president

alerted a Union representative that the Company was planning

changes to the 401(k) benefits plan in 2018. After the Union

representative asked DexYP to send information on the new

plan, the Company sent a benefits summary showing that the

2018 benefits plan would maintain a maximum 4.8 percent

employer matching contribution but change to a more generous

matching formula. The 2016 Company benefits plan had

included an 80% match on employee contributions up to 6% of

employee compensation, which the 2018 plan replaced with a

graduated, front-loaded match formula, matching 100% of

employee contributions for the first 3% of compensation and

60% of contributions for the next 3%.

II. Decision on Review

In 2018, the Union brought an unfair labor practice charge

against DexYP over the Company’s 2018 retirement benefits

plan. The Union argued that DexYP violated the Collective

Bargaining Agreement by adopting a retirement benefits plan

that did not comply with the language in the revised document

guaranteeing a 100% match of employee contributions up to

5% of compensation. After investigating the charge, the

Board’s Regional Director brought a complaint alleging that

DexYP unilaterally changed the 401(k)-contribution formula,

along with other allegations that the parties later settled.

Defending against the complaint at a hearing before the

Board administrative law judge (ALJ), DexYP argued that the

5 percent match language in the Collective Bargaining

Agreement resulted from a drafting error. The Company

introduced—without objection from the Board’s General

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Counsel or the Union—the 2016 Memorandum of Agreement

that the parties signed at the close of negotiations.

DexYP also sought to introduce other evidence: testimony

about the 2016 negotiations and bargaining notes from those

sessions. The General Counsel and the Union objected,

arguing that the parol evidence rule barred evidence about the

negotiations. The ALJ admitted the testimony about the 2016

negotiations and associated bargaining notes under the mistake

exception to the parol evidence rule. Under that exception, the

Board allows oral testimony to show that a written agreement

contains an obvious mistake. Apache Powder Co., 223

N.L.R.B. 191, 191 (1976). The ALJ noted when she decided

to hear parol evidence that the parties would have an

opportunity to address, in their post-hearing briefs, whether a

mistake occurred and whether the ALJ should ultimately

consider the parol evidence in the decision. The parol evidence

included the above-described testimony of Company

negotiator Steve Flagler and Union negotiator Teri Pluta about

the 2016 negotiations and the process of revising the contract

document for posting in 2017.

In a written decision after the hearing, the ALJ

recommended that the Board dismiss the complaint. YP

Midwest Publ’g, LLC, 371 N.L.R.B. No. 23, at 9 (Aug. 26,

2021). Analyzing witness credibility, the ALJ “did not find

much of [Union negotiator Teri] Pluta’s testimony credible”

because “[s]he sparred with Respondent’s counsel on cross-

examination, gave contradictory testimony, and testified in an

equivocal manner.” Id. at 5. The ALJ generally credited the

other witnesses who testified.

The ALJ found that “[t]he only agreement reached by the

parties at the bargaining table regarding the 401(k) benefit was

that [the Company] would acknowledge its provision to its

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union-represented employees in the collective bargaining

agreement.” Id. at 7. The parties reached “[n]o agreement” on

the matching amount for employer 401(k) contributions. Id.

Under those circumstances, the ALJ concluded, “the negotiated

agreement that the [Memorandum of Agreement] would

contain a memorialization of the existence of [the Company’s]

401(k) program controls.” Id.

The ALJ concluded that considering parol evidence from

the parties’ negotiations was appropriate because, under the

Board’s holding in Apache Powder, 223 N.L.R.B. at 191, “the

parol evidence rule does not operate to exclude testimony

offered to establish that no agreement was reached in the first

place.” YP Midwest Publ’g, 371 N.L.R.B. at 6. The ALJ found

that neither the Company nor its predecessors had ever

“matched represented employees’ [401(k)] contributions at 5

percent,” and, based on the evidence regarding the 2016

negotiations, “[t]he record evidence conclusively established

that a 5 percent match was never agreed to in bargaining.” Id.

at 6-7. The ALJ found that, during negotiations, “the parties

only agreed to memorialize the existence of [DexYP’s] 401(k)

program,” that “[n]o specified amount of employer match was

ever established,” and that the Company mistakenly included

the 5 percent match in the revised contract. Id. at 6-8. The ALJ

found that the parties engaged in no further negotiations, nor

did they discuss any change in positions, between the close of

negotiations in fall 2016 and the revision of the contract

document in summer 2017. See id. at 4. As to whether the

Company’s inclusion of a 5 percent 401(k) match in its redline

markup of the predecessor agreement was an error that should

have been obvious to the Union, the ALJ did not credit Pluta’s

testimony that she believed the matching amount was

“language as promised” from the Company, J.A. 199, and not

“inconsistent” with the 401(k) match the members were

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receiving or with the negotiators’ agreement to acknowledge

the 401(k) plan, J.A. 200.

On administrative appeal, the Board affirmed the ALJ’s

findings and conclusions. Id. at 1. Like the ALJ, the Board

accepted the 2016 Memorandum of Agreement as

memorializing the agreement the parties reached in their

negotiations. Id. at 1 n.2. Analyzing the Memorandum of

Agreement, the Board concluded that the parties agreed the

Company would “acknowledge the provision of a 401(k)

benefit” in the revised contract but did not agree to any specific

matching percentage. Id. (emphasis in original). The Board

sustained the ALJ’s admission of parol evidence of the 2016

negotiations under Apache Powder. Id. (citing Apache

Powder, 223 N.L.R.B. at 191). After considering that

evidence, the Board held that DexYP’s “drafting error should

have been clearly obvious to the Union” given YP Midwest

Publishing’s “clear rejection of the Union’s proposal for a 5

percent match” and the lack of any “basis for the Union to

assume that [the Company] had changed its position on that

proposal.” Id.

The Union petitioned for review. DexYP, now operating

under the name Thryv, Inc., intervened in support of the Board.

DISCUSSION

The Union argues that the Board erred by crediting the

401(k) retirement-benefit term in the parties’ 2016

Memorandum of Agreement, admitting parol evidence, and

finding that the revised Collective Bargaining Agreement

circulated and posted as the final 2016-2019 contract reflected

a drafting error. We hold that the Board acted in accordance

with the law, including its own precedent, and that substantial

evidence supports its findings.

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I. Standard of Review

We review the Board’s administrative adjudications with

“a very high degree of deference.” Ozburn-Hessey Logistics,

LLC v. NLRB, 833 F.3d 210, 217 (D.C. Cir. 2016) (quoting

Bally’s Park Place, Inc. v. NLRB, 646 F.3d 929, 935 (D.C. Cir.

2011)). Within that limited scope of review, “we must uphold

the judgment of the Board unless its findings are unsupported

by substantial evidence, or it acted arbitrarily or otherwise

erred in applying established law to the facts of the case.”

Novato Healthcare Ctr. v. NLRB, 916 F.3d 1095, 1100 (D.C.

Cir. 2019). Where a party challenges the Board’s application

of its own precedent, we review whether the Board’s decision

was “arbitrary, capricious, an abuse of discretion, or otherwise

not in accordance with law.” 5 U.S.C. § 706(2)(A); Leggett &

Platt, Inc. v. NLRB, 988 F.3d 487, 494 (D.C. Cir. 2021). So

long as the Board offers a well-reasoned interpretation of its

precedent, we defer to that interpretation. Ceridian Corp. v.

NLRB, 435 F.3d 352, 355 (D.C. Cir. 2006).

We review factual findings supporting the Board’s

contract interpretation under the substantial evidence standard,

“including evidence of intent from bargaining history, and

other factual findings on matters bearing on the intent of the

parties.” Pac. Mar. Ass’n v. NLRB, 967 F.3d 878, 884-85 (D.C.

Cir. 2020) (quoting StaffCo of Brooklyn, LLC v. NLRB, 888

F.3d 1297, 1302 (D.C. Cir. 2018)); 29 U.S.C. § 160(e). We

owe no special deference to the Board’s interpretation of

contract language, but review it de novo, applying “ordinary

principles of contract law.” Pac. Mar. Ass’n, 967 F.3d at 885

(quoting M & G Polymers USA, LLC v. Tackett, 574 U.S. 427,

435 (2015)).

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II. The Board Correctly Identified the Binding

Agreement and 401(k) Term

We first consider the Union’s argument that the Board

erred by treating the 2016 Memorandum of Agreement as

authoritative rather than the document produced the following

year and circulated as the final revised contract. The Union

argues that the Board’s precedent required it to credit the

401(k) term in the revised contract document over the term

reflected in the Memorandum of Agreement. We review that

challenge in two steps. We first consider whether the Board

reasonably applied its precedent regarding when a collective

bargaining agreement is formed. We then address whether

substantial evidence supports the Board’s finding that the 2016

Memorandum of Agreement reflects the parties’ agreement on

the 401(k) term.

We hold that the Board followed its own precedent by

looking to the Memorandum of Agreement for the substance of

the parties’ agreed 401(k) term. The 401(k) terms in the two

relevant documents conflicted. The parties agreed in the 2016

Memorandum of Agreement only to “acknowledge” the

“provision” of a 401(k) benefit, whereas the document posted

in 2017 promised a 401(k) benefit whereby the employer

would match employees’ own contributions of up to 5 percent

of their salary. To decide which term controlled, the Board

followed its established approach for deciding when the parties

reached a meeting of the minds and which terms controlled at

that time.

Under Board precedent, “[i]t is well-established that a

collective bargaining agreement is formed after a meeting of

the minds on substantive issues and material terms.” Cnty.

Concrete Corp., 366 N.L.R.B. No. 64, at 9 (2018). The

meeting of the minds “is measured not by parties’ subjective

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inclinations, but by their intent as objectively manifested in

what they said to each other.” Id. (quoting Crittenton Hosp.,

343 N.L.R.B. 717, 718 (2004)).

To decide when the parties agreed on material terms, the

Board looks to “mutual expressions of satisfaction about the

successful negotiation of a contract [as] ‘hallmark indication[s]

that a binding agreement has been reached at the end of

negotiations.’” ABM Parking Servs., 360 N.L.R.B. 1191, 1204

(2014) (quoting Chauffeurs Loc. Union No. 771, 357 N.L.R.B.

2203, 2207 (2011)). For example, the Board has held that an

employer and a union reached a meeting of the minds at a

negotiating session where the parties “concluded that session

with handshakes and mutual expressions of satisfaction on their

successful negotiation of a contract.” Windward Teachers

Ass’n, 346 N.L.R.B. 1148, 1150-51 (2006); see also

Chauffeurs Loc. Union No. 771, 357 N.L.R.B. at 2207. The

Board likewise discerned a meeting of the minds where an

employer’s “remarks . . . were the email equivalent of shaking

hands on the deal at the end of a face to face meeting.” ABM

Parking Servs., 360 N.L.R.B. at 1204. By the same token,

bargaining unit employees’ “unqualified ratification” of an

expired predecessor collective bargaining agreement together

with a document reflecting “all of the agreed-on contract

changes” similarly sufficed to show that the parties reached a

binding agreement. Graphic Commc’ns Union, 318 N.L.R.B.

983, 992 (1995).

A collective bargaining agreement may be binding before

the parties reduce it to a final written form. To be sure, “once

an agreement is reached, each party is obligated to assist in

reducing the agreement to writing.” Ebon Servs., 298 N.L.R.B.

219, 223 (1990). But the Board has long followed the rule that

“offer and acceptance, not execution, make a labor contract.”

Sarauer v. Int’l Ass’n of Machinists & Aerospace Workers,

17

Dist. No. 10, 966 F.3d 661, 677 (7th Cir. 2020). “Once an

agreement is reached by the parties, they are obligated to abide

by the terms of the agreement even though those terms have

not been reduced to writing.” Cnty. Concrete Corp., 366

N.L.R.B. at 1 n.1 (quoting Sunrise Nursing Home, Inc., 325

N.L.R.B. 380, 389 (1998)). Indeed, “[t]he question of contract

formation is based on the parties’ expressed intentions

regarding the terms of a collective-bargaining agreement,”

which may establish a contract was formed even in advance of

any document being signed. Sunrise Nursing Home, Inc., 325

N.L.R.B. at 389. Once the parties reach agreement, ensuing

back-and-forth about the contract may be “merely

communications aimed at converting their agreement into a

complete, written contract.” ABM Parking Servs., 360

N.L.R.B. at 1204.

The Board’s treatment of collective bargaining agreements

as binding before they are reduced to a final writing helps to

protect the bargaining process. For example, the Board has

held that a party that refuses to sign an agreement after

acquiescing to its terms during negotiations “impairs the

bargaining process and tends to frustrate the aim of the

[National Labor Relations Act] to secure industrial peace

through collective bargaining.” H. J. Heinz v. NLRB, 311 U.S.

514, 526 (1941). To avoid those problems, the Board treats the

refusal to sign a written contract after reaching agreement on

its terms through negotiation as an unfair labor practice under

Section 8(b)(3) of the National Labor Relations Act.

Windward Teachers, 346 N.L.R.B. at 1150.

Applying those principles to this case, the Board did not

need to look for handshakes or email acceptances. The record

contains direct evidence of the terms the parties reached during

negotiations: the signed September 2016 Memorandum of

Agreement. The Board’s decision to credit the 2016

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Memorandum of Agreement as reflecting the parties’ agreed

401(k) term accords with its established precedent referencing

the “meeting of the minds” to identify when the parties reached

a binding agreement and to treat as authoritative the terms they

agreed to at that time.

Substantial evidence supports the Board’s conclusion that

the Memorandum of Agreement represented the parties’

binding agreement on the 401(k) term. The Memorandum of

Agreement stated that the “Union and Employer collectively

have reached agreement and the predecessor agreement shall

only be revised as specifically set forth herein.” J.A. 709. The

employer and Union representatives signed the cover page and

initialed each page. The bargaining unit members and the

Company’s Board of Directors ratified the 2016 Memorandum

of Agreement as their negotiated updates to the predecessor

Collective Bargaining Agreement. By signing an agreement

stating that the prior contract would be revised only as

specifically agreed in the Memorandum of Agreement, and by

sending that package through the ratification process, the

parties showed that they regarded the Memorandum of

Agreement as the binding document memorializing their new

Collective Bargaining Agreement.

The leisurely way the parties went about revising the 2013

contract’s text to reflect the agreed-to changes reinforces the

importance of the 2016 Memorandum of Agreement. It was

not until April 2017, seven months after signing the

Memorandum of Agreement, that Union representative Teri

Pluta asked DexYP counsel Brian Herman why the Company

had not yet sent the Union a document incorporating the

negotiated changes into the preexisting contract. Herman sent

a redlined document eleven days later, and Pluta took nearly

five more months to return it to him, writing that she had

accepted the revisions and included a missing wage scale for a

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new position. The parties apparently never even pointed out or

acknowledged during the revision process the 5 percent

matching term that appeared in the revised contract document,

and they expressed confusion before the ALJ about how it got

there. The bargaining unit members and the Company’s Board

of Directors had ratified the Memorandum of Agreement in

2016; neither party undertook any ratification process for the

revised contract document in 2017.

The cover page of the revised contract document refers to

September 16, 2016, as the date of the agreement. The cover

pages of both the 2016 Memorandum of Agreement and the

contract package as revised, posted, and circulated in 2017

reflect that same September 2016 date—when Company and

Union negotiators signed the 2016 Memorandum of

Agreement, not when Herman and Pluta finished incorporating

the changes into the text of the predecessor agreement or when

the Company posted it on its intranet. The signatories are the

same—with signatures handwritten on the September 2016

Memorandum of Agreement and the same names typed on the

revised version circulated to employees in 2017—even though

the employer’s signatory, Keith Halpern, no longer worked for

the Company when the revision was done. Halpern’s

replacement, Brian Herman, supervised the revision process,

but Halpern’s is the only name that appears on the final version.

The timing of the parties’ ratification of the contract terms,

together with the casual pace at which the parties later

incorporated the negotiated revisions into the predecessor

agreement, supports the Board’s conclusion that it was the

Memorandum of Agreement that was binding. The use of the

same employer signatory even after his departure from the

Company reinforces that the parties’ agreement was finalized

in September 2016, not 2017. Substantial evidence supports

the Board’s finding that the 401(k) term in the ratified 2016

20

Memorandum of Agreement, not the post-ratification revision,

reflects the parties’ binding agreement.

III. The Board Permissibly Considered Parol

Evidence

Next, we review the Board’s application of the parol

evidence rule. The Union argues that the Board incorrectly

relied on Apache Powder, 223 N.L.R.B. 191, to admit

testimony and bargaining notes relating to the 2016

negotiations to discern the Company’s mistake. In the Union’s

view, the Board should have instead followed its precedent in

Windward Teachers Association, 346 N.L.R.B. 1148 (2006),

and Ebon Services, 298 N.L.R.B. 219 (1990), two cases in

which the Board rejected a mistake defense and enforced a

collective bargaining agreement as written. That precedent,

says the Union, requires enforcement of the term inserted in the

2017 contract revision rather than the term reflected in the 2016

Memorandum of Agreement. We must determine whether, in

looking to parol evidence to resolve that claim, the Board

arbitrarily and capriciously departed from its precedent. ABM

Onsite Services-W., Inc. v. NLRB, 849 F.3d 1137, 1146 (D.C.

Cir. 2017).

The Board recognized the mistake exception to the rule

against parol evidence in Apache Powder when it held that “the

parol-evidence rule does not operate to exclude testimony

offered to establish that in fact no agreement was reached in the

first place.” 223 N.L.R.B. at 191. The employer in Apache

Powder had refused to sign a collective bargaining agreement

because, it claimed, the agreement the parties initialed and

ratified contained a mistake. Id. at 193-94. It sought to offer

parol evidence to show that, during negotiations, it

inadvertently proposed a start date for higher monthly pension

benefits a year earlier than the parties intended. Id. at 194. The

21

ALJ admitted the parol evidence, recognizing that evidence

outside an agreement “may be introduced for the purpose of

ascertaining the correct interpretation of an agreement, as well

as to establish the nonexistence of an agreement.” Id. (internal

citations omitted). After considering the parol evidence, the

ALJ found that the start date was indeed a drafting error. Id.

The Board affirmed. Id. at 191. The Board cautioned that

“rescission for unilateral mistake is, for obvious reasons, a

carefully guarded remedy,” but held the standard met because

the start-date mistake was “so palpably at odds with the pension

provisions of the existing contract as to put the [union] on

notice of an obvious mistake by the [employer].” Id.

Apache Powder established two rules relevant here: First,

parol evidence is admissible to establish whether an agreement

was reached; second, a unilateral mistake occurs “where the

mistake is so obvious as to put the other party on notice of an

error.” Id.

The Board has consistently relied on the Apache Powder

formulation of the mistake exception to the parol evidence rule.

In some decisions, the Board discusses parol evidence before

concluding that no mistake occurred and enforcing an

agreement as written. See, e.g., Monterey/Santa Cruz Bldg.

Trades Council (Nat’l Refractories), 299 N.L.R.B. 251, 257

(1990). In others, the ALJ admits parol evidence at the hearing

but, on consideration, finds no need to refer to it in the written

decision. See, e.g., Sheehy Enterprizes, Inc., 353 N.L.R.B. 803,

805 n.1 (ALJ decision), 806 (2009). Other Board decisions,

like Apache Powder and the decision under review, consider

parol evidence and, based on the bargaining history it discloses,

conclude that the written agreement contains a mistake. See,

e.g., Waldon, Inc., 282 N.L.R.B. 583, 584-86 (1986); Cook

Cnty. Sch. Bus, Inc., 333 N.L.R.B. 647, 653 (2001), enforced,

22

283 F.3d 888, 896 (7th Cir. 2002); Globe-Union, Inc., 245

N.L.R.B. 145, 147 (1979).

The mistake exception finds support not only in Board

precedent, but in accepted principles of generally applicable

contract law. See M & G Polymers, 574 U.S. at 430, 433

(2015). Contract doctrine recognizes that “oral testimony is

admissible to prove fraud or misrepresentation, mistake, or

illegality.” 6 Corbin on Contracts § 25.20 (2022). “Such

invalidating causes need not and commonly do not appear on

the face of the writing.” Restatement (Second) of Contracts

§ 214 (2022). And, “[s]ince the application of the parol

evidence rule depends on the existence of a valid integrated

contract, the rule does not preclude evidence which contradicts

the very existence or validity of an alleged contractual

obligation.” 11 Williston on Contracts § 33:14 (4th ed. 2022).

Our dissenting colleague argues that the 2016 signed and

ratified Memorandum of Agreement is itself parol evidence.

Diss. Op. at 2. But as explained, that Memorandum of

Agreement is itself the agreement that binds the parties.

Necessarily, then, it is not parol evidence. And indeed, the

Union and the Board’s General Counsel never objected to

consideration of that document as parol evidence. At the

hearing before the ALJ, neither the Union nor General Counsel

objected when the Company introduced the Memorandum of

Agreement. They raised the parol evidence objection only to

oral testimony about the negotiations preceding that signed

contract.

The Union argues that by admitting parol evidence in this

case the Board departed from its decisions in Windward

Teachers Association, 346 N.L.R.B. 1148, and Ebon Services,

298 N.L.R.B. 219. Because the Board in those two cases

enforced written contract terms, the Union reasons, the Board

23

should enforce the revised contract’s terms here. But the Board

in both of those cases considered oral testimony about the

parties’ bargaining history before concluding that the written

terms accurately reflected the parties’ agreement at the close of

negotiations. Windward Teachers, 346 N.L.R.B. at 1148-50;

Ebon Servs., 298 N.L.R.B. at 220-22. The Union’s objection

here is accordingly reduced to a challenge to the Board’s

factual finding that the revised contract contained a drafting

error, not the ALJ’s admission of parol evidence to consider

whether a mistake occurred.

IV. Substantial Evidence Supports the Board’s

Mistake Finding

We next consider whether substantial evidence supports

the Board’s finding that the specific 401(k) language in the

revised document was a mistake. The Board found that “it

should have been obvious to the Union that the inclusion of a

specific matching percentage of 5 percent did not reflect the

parties’ understanding and was a drafting error.” YP Midwest

Publ’g, LLC, 371 N.L.R.B. at 1 n.2. To so find, the Board

applied the standard for unilateral mistake from Apache

Powder: A finding of unilateral mistake is a “carefully guarded

remedy,” appropriate “where the mistake is so obvious as to

put the other party on notice of an error.” 223 N.L.R.B. at 191.

The Union challenges that determination, arguing that even if

the employer mistakenly added the 5 percent match language

to the draft, the mistake was not obvious enough to place the

Union on notice. Substantial evidence supports the Board’s

finding to the contrary.

De novo review of the dueling contract terms themselves

does not reveal whether the 401(k)-benefit term offering a 5

percent match resulted from a mistake. Where contract

language contains a drafting error, the mistake “commonly

24

do[es] not appear on the face of the writing.” Restatement

(Second) of Contracts § 214. The mistake here is apparent only

in light of the Board’s findings about the bargaining history.

The deference we owe to the Board’s findings of fact extends

to its findings that describe bargaining history and provide

context showing when and how the parties reached agreement.

See Pac. Mar. Ass’n, 967 F.3d at 885.

The facts of the parties’ course of bargaining reveal that

they had reached a complete and binding agreement in

September 2016, when the parties signed the Memorandum of

Agreement stating they would “acknowledge” the 401(k)

benefit, and that the parties promptly ratified the agreement on

that basis. J.A. 729. Their binding agreement did not include

the language guaranteeing a 5 percent match, which was only

mistakenly inserted the following year during the process of

updating the predecessor contract for circulation. See supra at

18-20. Several of our sister circuits have looked to ratification

as the “last act necessary” to create an enforceable labor

contract. Sarauer, 966 F.3d at 676; Mack Trucks, Inc. v. United

Auto, Aerospace & Agr. Implement Workers of Am., 856 F.2d

579, 592 (3d Cir. 1988); NLRB v. Deauville Hotel, 751 F.2d

1562, 1569 n.10 (11th Cir. 1985); Sw. Airlines Co. v. Loc. 555,

Transp. Workers Union of Am., 912 F.3d 838, 846-47 (5th Cir.

2019). On that logic, the Seventh Circuit affirmed a Board

finding of mistake where a drafter introduced a post-ratification

typo into a contract. NLRB v. Cook Cnty. Sch. Bus, Inc., 283

F.3d 888, 895-96 (7th Cir. 2002). There, the Seventh Circuit

observed that bargaining unit members ratified an earlier

synopsis without the typo and had never voted to adopt the

later-appearing “actual agreement,” which a union

representative had finalized (with a typo) “merely for signature

by the head honchos.” Id. at 895.

25

Enforcing the ratified agreement here—rather than the

revised contract document as circulated and posted—is

unassailable where the record contains no evidence of

“renegotiation of the agreement’s terms” after the date of

ratification. Sarauer, 966 F.3d at 676. Again, YP Midwest

Publishing negotiator Steve Flagler and Union negotiator Teri

Pluta both testified that the Union never persuaded the

Company during negotiations to agree to a 5 percent 401(k)

match. Yet the language that ultimately ended up in the

agreement—language nearly identical to the language that the

Company had rejected in June 2016—called for a 5 percent

match. Under those circumstances, substantial evidence

supports the Board’s conclusion that the 5 percent match was a

drafting error that should have been obvious to the union.

The Union argues that the Board erred by not following

Ebon Services, 298 N.L.R.B. at 219 n.2, 223 and Windward

Teachers, 346 N.L.R.B. at 1151, to hold that parties are bound

by language they reviewed and agreed to sign. The Board

should have held the 5 percent 401(k) match term binding, says

the Union, because it was consistent with the term of the 2016

Memorandum of Agreement, so not a mistake. The cases on

which the Union relies are consistent with the Board’s

approach to determining when a binding agreement was

reached in the first place. In Ebon Services and Windward

Teachers, parties successfully challenged their counterparties’

refusals to sign agreements with language they had agreed to at

the close of negotiations. Ebon Servs., 298 N.L.R.B. at 219

n.2; Windward Teachers, 346 N.L.R.B. at 1151. In both cases,

the Board considered oral testimony about the parties’

negotiations, then decided that the written terms accurately

reflected the parties’ agreement at the close of negotiations.

Ebon Servs., 298 N.L.R.B. at 224-25; Windward Teachers, 346

N.L.R.B. at 1149-50. Specifically, the employer in Ebon

Services, having read over the agreement and verbally agreed

26

to sign, ultimately refused to sign even though “there was no

mutual mistake or misunderstanding about any of the terms” in

the agreement. 298 N.L.R.B. at 224-25. And in Windward

Teachers, the union claimed mistake and so refused to sign an

agreement even though the disputed language had been present

in the draft agreement during the final negotiating session when

the parties reached agreement. 346 N.L.R.B. at 1149. The

Board’s decision in this case reflects the same approach it has

used in prior cases to identify the terms the parties agreed to in

negotiations and enforce the written agreement memorializing

those terms.

The Board recognizes that resorting to parol evidence to

find a unilateral mistake in a written agreement is reserved for

“unusual instance[s].” Apache Powder, 223 N.L.R.B. at 191.

Rightly so. Consistent with that recognition, the Board in the

decades since Apache Powder has declined to recognize

unilateral mistake in the absence of a mistake so obvious as to

communicate to the opposing party that it was unlikely to have

been intended. For example, the Board has rejected a mistake

defense where a union negotiator “hurriedly glanced at” a side

letter before approving it, then later argued that he did not

intend to agree to the letter’s terms. Television Artists AFTRA

(Eleven-Fifty Corp.), 310 N.L.R.B. 1039, 1041, 1044 (1993).

The Board has also declined to find mistake where a negotiator

made incorrect assumptions before agreeing to a contract term.

Nat’l Refractories, 299 N.L.R.B. at 257. The reasoning in

those cases, as here, treats as binding the terms that the parties

agreed to and submitted for ratification at the conclusion of

their negotiations. Id.; Eleven-Fifty Corp, 310 N.L.R.B. at

1043. Here, the parol evidence of the parties’ bargaining

history allowed the Board to identify the Memorandum of

Agreement as the final product of the parties’ negotiations, and

to conclude that the 401(k) term in the 2017 revised version of

27

the Collective Bargaining Agreement contained an

unenforceable unilateral mistake.

* * *

For the foregoing reasons, we deny the petition for review.

So ordered.

SENTELLE , Senior Circuit Judge, dissenting: This case

presents a straightforward contract dispute between

Communications Workers of America (“the Union”) and

DexYP (“the Company”). The Union and the Company

negotiated. They reduced their negotiations to a written

agreement, the Collective Bargaining Agreement (“CBA”).

And both parties signed the agreement. That is the end of the

story. The National Labor Relations Board in the opinion

under review erred in accepting parol evidence to rewrite that

agreement. In this Court, the majority cites Williston and

Corbin for the proposition that a court may review parol

evidence in the cases of fraud, misrepresentation, or lack of a

valid integrated contract. Op. at 22. But there is an even more

fundamental rule of contracts: courts hold parties to their

bargains. See, e.g., NRM Corp. v. Hercules Inc., 758 F.2d 676,

681 (D.C. Cir. 1985) (“Where the language of a contract is

clear and unambiguous on its face, a court will assume that the

meaning ordinarily ascribed to those words reflects the

intentions of the parties.”).

First, the “mistake” in the 2017 CBA, supposedly

memorializing the parties’ 2016 Memorandum of Agreement

(“MOA”), is far from obvious. See Apache Powder Co., 223

N.L.R.B. 191, 191 (1976) (“[R]escission for unilateral mistake

is, for obvious reasons, a carefully guarded remedy reserved

for those instances where the mistake is so obvious as to put

the other party on notice of an error.”). First, the Company’s

attorney himself wrote the disputed 5% 401(k) contribution

term into the CBA. See Resp. Br. at 7–8. Then, he highlighted

the change by redlining the term before sending it to the

Union’s attorney. See id. This is perhaps an even worse

scenario for violation of the parol evidence rule than not

reading—and agreeing to—a term in a contract, a scenario in

which we still hold parties to their bargains. See Paterson v.

Reeves, 304 F.2d 950, 951 (D.C. Cir. 1962) (“One who signs a

contract which he had an opportunity to read and understand is

bound by its provisions.”). The Company wrote the term into

2

the final contract and highlighted it for the Union to review. It

strains credulity to then penalize the Union for not recognizing

an “obvious” mistake in the term amount.

Second, the parties engaged in a full exchange. Neither

side suffered from a bargaining disadvantage or mismatched

negotiating skills. See BHM Healthcare Sols., Inc. v. URAC,

Inc., 320 F. Supp. 3d 1, 10 (D.D.C. 2018). The attorneys for

both sides exchanged the final agreement back and forth. The

parties have a right to rely on the document to which they both

agreed.

Third, courts take the parol evidence rule very

seriously, especially in cases of unilateral mistake, a point the

majority acknowledges. Op. at 21. But the majority here

tautologically uses parol evidence to prove it needs parol

evidence. The 2016 MOA is parol evidence. Relying on it to

conclude what the final, executed 2017 CBA means is to

therefore violate the parol evidence rule. If the 2016 MOA

represented the final, negotiated settlement between the parties,

as the majority contends, there would have been no need for

the Union and the Company to execute the 2017 CBA. The

majority claims the MOA is inconsistent with the as-executed

CBA including the 5% term, indicating a lack of a meeting of

the minds, but the MOA only included placeholder language

that the parties would later insert the term. See J.A. 729 (“The

Company agrees to acknowledge the provision of a 401(k)

benefit to bargaining union [sic: unit] employees in the drafting

of the collective bargaining agreement.”). Therefore, the 2016

MOA and the 2017 CBA are just as easily consistent with one

another.

3

At base, the CBA is the final agreement. We must

adhere to the four corners of that document, in which both

parties agreed to a 5% 401(k) matching contribution term.

I respectfully dissent.