International Brotherhood of Electrical Workers, Local Union No. 68, Afl-Cio v. National Labor Relations Board

LEVENTHAL, Circuit Judge

(dissenting) :

I had originally thought that this was the case dreamed of by law school professors, a case where I could conscientiously say that although I considered the findings “clearly erroneous,” so that I would have voted to reverse if the decision had been rendered by a trial court, nevertheless there was support in “substantial evidence,” so that I should vote to affirm because the determination was made by an administrative agency.

On further reflection I do not see “substantial evidence” supporting the agency’s determination. The case in es *1143 sence is this: An employer has given an agent (Rocky Mountain Chapter, National Electrical Contractors Association, Inc. (NECA)) authority to negotiate a collective bargaining agreement, on its behalf. This is separately executed but given as part of the agent’s broader authority to negotiate for a large multi-employer group (Regional Association) and also for a smaller sub-group (Lari-mer County and Weld County employers) which includes this employer (J-H Electric). After extensive bargaining an agreement was signed by the agent in behalf of all employers in the group; it had special provisions addressed to the special situation of the sub-group. Now the employer refuses to abide by the agreement signed by the agent in his behalf and claims that he may do so without violating his duty of collective bargaining, because there was notice to the Union, limiting the broad authority given to the agent in writing, that there would be separate negotiations between the Union and employers in Larimer and Weld Counties.

I do not see any tenable basis for the Board’s ruling accepting this contention of J-H Electric. I see no substantial evidence of any such limitation on the agent’s authority, vis-a-vis the Union, to sign an agreement binding on all members of the multi-employer group (with special substantive provisions for this sub-group).

The Board was undoubtedly troubled by the fact that this employer sought to give a direction to this agent which was not followed. But that was not disclosed to the Union and did not undercut the agent’s authority so far as the Union was concerned. Let us suppose the Union, after signing the master agreement, had called for further bargaining with this employer to get better terms and threatened a strike. Would the Board really have held that it was always understood that there would be separate negotiation with the Larimer-Weld employees, and hence the Union was justified in holding the master agreement inapplicable? I have no doubt that the Board would have considered this impermissible, and rightly so. This employer’s course is likewise not supportable, and neither is the Board’s decision supporting it.

1. I begin my quest to see whether there was substantial evidence to support the Board’s decision, by noting and emphasizing that the Larimer and Weld County employers gained a substantial economic benefit from joining in the bargaining and agreements negotiated by the Regional Association. What this meant to them was that they could come into Denver, a market of no little consequence, and do jobs there with their customary employees, without hiring a new staff. There is not a scintilla of evidence that the employers in these counties intended to break off from the multi-employer group and lose the economic benefits which they obtained by joinder with this Regional Association. They did not notify the Union they pulled out of the group or limited the authority of the Association or Mr. Hecht.

2. All of the evidence relied on by the majority of the Board and the majority of this court established only an awareness by the Union that there were to be differences in substantive provisions for these counties.

I would certainly agree that the Union may fairly be charged with knowledge that there would be different circumstances pertaining to Weld and Larimer counties. Apparently these once rural counties, though becoming industrialized, were in a period of transition that still left them significantly different from Denver. However, the 1968 Agreement signed by the Association, and by Mr. Hecht, did make a distinction for work done in these counties.

What is entirely lacking in all the evidence — and this is crucial! — is any evidence of awareness by the Union that the substantive differences were to be communicated to the Union by, or had to be bargained by the Union with, any channel other than the authorized Agent, Hecht and NECA. The Union would of course understand that Mr. Hecht would *1144 not conduct his bargaining in behalf of the Larimer and Weld employers without consulting with them. To expedite matters they could attend the bargaining session. Still, any differences necessary for them were to be communicated to the Union, by Mr. Heeht (as in 1966/67); or perhaps by the employers (a point we take up below), but in any event prior to signing of the joint agreement.

The Board failed, and the majority of this court fail, to distinguish between any reservations of the Larimer and Weld County employers as to matters of substance, and .the issue of procedure for being bound by one’s agent, and for withdrawing his authority.

3. If there were evidence that the Union knew that the NECA, or Mr. Hecht, had departed from the instructions given them by the Larimer and Weld County employers, we would have the very different question whether there was a breach of fiduciary duty, and whether the Union was privy thereto and so acted in bad faith in its bargaining. There is no finding as to that. Hence any such possibility is unavailable to support the Board’s order, see S. E. C. v. Chenery, 318 U.S. 80 , 63 S.Ct. 454 , 87 L.Ed. 626 (1943). Since the Board expressly disclaimed adoption of the Examiner’s finding on this point, this is not a mere technicality.

4. Looking further into the record there are two solid facts that vitiate the Board’s conclusions.

The first is that the 1966 Letter of Assent and the Bargaining Authorization Agreement transmitted to the Union both state on their face, in unqualified terms, that NECA is and shall continue to be the bargaining agent and representative for J-H Electric, subject to provision for revocation never invoked. 1

The second fact is that there was no direct bargaining between the Union and J-H Electric after July 15, 1965, eight months prior to the signing of the Assent and the Authorization.

In view of these stark facts I do not see how the Board could say that “the Union had no reason to believe that Respondent Company intended to abandon its prior practice of bargaining separately with the Union regarding wage rates in Weld County.” These facts plainly established a basis for the Union to believe that the company was abandoning the practice of separate bargaining on these issues. The Board’s finding that the Union had no reason to believe this is without support in the record.

5. In an attempt to find support for the Board’s conclusion, my brethren cite the Union’s response to a statement by NECA representative, during the 1966 bargaining session, that “Section 6.18 L and W, would be considered by the people in the areas covered by same.” The Union’s answer was as follows:

“Why aren’t representatives of the Larimer and Weld Counties’ area here ? We would like to make it clear that we do not intend to travel into their areas to have them negotiate parts of this agreement. We consider that all negotiating concerning this agreement are carried on in this location at this table. If they have any interest in these matters, this is where the action is, this is where the thing will happen and we don’t intend to sit around for hours negotiating small parts and pieces of this agreement to satisfy their particular situation. Our representatives are here. This is where the decisions are made concerning the entire jurisdiction and if they are interested they should be here.” (Resp. Ex. 10, App. 367.)

The majority infer from parts of the statement that “if they had been there the Union would have acknowledged the Weld and Larimer contractors’ right to *1145 negotiate with the Union concerning Weld and Larimer wages.” This has no materiality. The Union likely understood that NECA and Hecht would consult with the Larimer and Weld contractors about provisions of particular significance to them. And it is only good sense, if those Larimer and Weld contractors are interested, that they should be right there while the discussions are going on, observing and even participating. But the ability of Larimer-Weld contractors to participate with their agent, Mr. Hecht and the Association, in the negotiations does not mean that they had the authority to stay away and disavow the agreement their agent signed as a result of the negotiations. Furthermore, there is not one shred of evidence — not in the above statement or anywhere else — that the Union understood the participation of these contractors to be a prerequisite to the formation of a binding agreement with NECA covering wage rates in the two counties. The Board either failed to see or chose to ignore that it was converting an option into a requirement. This critical flaw in the Board’s analysis is perpetuated by the majority’s affirmance.

6. The majority next seek to support the Board’s order by citing the fact that when the Union’s position — the above-quoted passage — was conveyed to the Weld and Larimer contractors by NECA in January, 1967, the contractors instructed their agent to withdraw the proposals previously made concerning wage rates in those counties. The majority emphasizes that when NECA did so, it told the Union that it was “acting for and in behalf of the Weld and Larimer County contractors,” and that “the employers herein referred to stand ready to meet and discuss [these matters] with your representatives.” This, the majority states, is sufficient to put the Union on notice that the contractors did not intend to be bound by NECA on the Weld and Larimer wage rates. But when the Agent himself withdraws an offer, prior to signing the agreement, announcing that he is doing this in view of the wishes of his principal, he does not indicate a limitation or revocation of his agency. He rather indicates a responsible exercise of his agency. In this case within a matter of weeks agent Hecht again met with the Union and reached a tentative agreement as to wages, including wages to be paid by the Weld and Larimer contractors, which stood up without any Union bargaining with those contractors.

The majority say that it is not clear from the record exactly what happened in December 1966 and January 1967. What is emphatically clear from the record is that in 1967 the Union reached a tentative agreement with Hecht concerning the special provisions applicable to Larimer and Weld Counties. When the Larimer and Weld contractors agreed to grant the wage increases negotiated by Hecht they “informed Hecht by telephone,” as the majority says. There is not a line of proof, not a word of findings, that the contractors informed the Union. There was nothing to depart from the bargaining authorization given to NECA and Hecht. To the extent that Mr. Hecht stayed with the “tentative” agreement he signed with the Union, after getting the go-ahead from the Larimer and Weld County employers, it was Hecht who told the Union so. To the extent that Hecht did not stay with his tentative agreement, the matter was submitted to the Council of Industrial Relations, — an employer-union committee that is tantamount to an ad hoc arbitration.

I fail to see how the majority can find substantial evidence of a withdrawal of NECA’s authority to negotiate with the Union on wages for Larimer and Weld County employers when almost immediately NECA did negotiate on wages payable by Weld-Larimer contractors and reach an agreement on this matter.

7. The 1967 events included the following: NECA reached a partial agreement with the Union; some of the issues were referred to arbitration; the ultimate 1967 agreement, arrived at by the arbitrating Industrial Relations Council, *1146 contains a recital that it was “jointly and locally negotiated.” I don’t think it can be seriously put that a mere recital of to sign a contract in behalf of Weld-Lari-local negotiations undercuts or qualifies the authority of ÑECA and Mr. Hecht mer employers. I do not believe it is seriously contended, by the Board, its counsel, or the majority of this court, that there was in fact any local negotiation between the Union on the one side and Larimer or Weld contractors themselves on the other. There is not an iota of evidence that there was any such local bargaining. 2

The recital may mean that there was local discussion of substantive issues with the Weld and Larimer employers by the NECA’s Mr. Hecht. That is a fact, and it appears in the record. Or the recital may refer to local negotiations in the area covered by the ad hoc arbitration. Whatever it referred to, I don’t see how it can operate to limit the agent’s authority in absence of any evidence that negotiations were in fact conducted by the principal.

8. The majority says that “there was no Letter of Assent executed following the 1967-68 negotiations.” However, it is clear from the face of both documents that the appointment of ÑECA as bargaining agent “for all matters contained in this Agreement” was to remain in effect “until terminated by written notice.” In view of this language, and the undisputed fact that no written notice of termination was ever sent to the Union, I fail to see how NECA’s authority as bargaining agent was undercut merely because it was not re-executed. The 1967 and 1968 agreements were avowedly signed as “Amendments” to the 1965 pact, not as wholly new agreements. The Letter of Assent, by its very terms, authorized NECA to negotiate amendments concerning “matters contained in” the original agreement. The majority’s assumption to the contrary is without support in the record.

9. The law is focusing sharply and vigorously on the responsibilities of the parties engaged in multi-employer collective bargaining. A union may not validly threaten to strike individual members of the group in order to force them to withdraw bargaining authority from the association. Int’l Union of Operating Engineers, Local 825, 145 N.L.R.B. 952 (1964). If such a strike takes place the members of the group can take effective action to preserve the group bargaining. N. L. R. B. v. Truck Drivers Union, 353 U.S. 87 , 77 S.Ct. 643 , 1 L.Ed.2d 676 (1957). This can extend so far as to permit to a lockout of regular employees with the hiring of temporary replacements to continue operation. N. L. R. B. v. Brown Food Store, 380 U.S. 278 , 85 S.Ct. 980 , 13 L.Ed.2d 839 (1965).

I do not see how an individual employer or sub-group of employers can be allowed to disengage from the bargaining group, before or after the agreement is signed, unless the operative ground rules are observed. If there are any rules that must be followed strictly they are the ones concerning bargaining authority. Indeed, a union is held to the “apparent” bargaining authority of an official who did not have authority in fact. United Steelworkers of America v. CCI Corp., 395 F.2d 529 (10th Cir. 1968), cert. denied, 393 U.S. 1019 , 89 S.Ct. 627 , 21 L.Ed.2d 564 (1969). Actual and written authority to a bargaining agent cannot be undercut by anything less than a clear showing that what exists on paper is only a paper authority that does not conform to substance and fact. I see no substantial evidence in this record to support that conclusion.

I respectfully dissent.

. The Bargaining Authorization Agreement signed by the employers and transmitted to the Union provided that an employer could withdraw on 60 days notice, except that the Agreement, being coupled with an interest, was irrevocable without consent during the period between December 1 and April of the following year.

. It is hard to conceive that if any such bargaining had taken place there would have been no evidence of that. Obviously the burden was on respondent employers, having possession of the evidence, to prove this positive fact if it did exist; the burden cannot be meaningfully or fairly put on the Board or Union counsel to go beyond the written power of authority and produce evidence of a non-happening.