Petition — Presto Casting Co. v. National Labor Relations Board

83-556 “irra”

No. SEP $0 1983

REEXANDERL. STEVAS,

CLERK

In the Supreme Co

OF THE

United States

Presto Castinc CoMPAny,

Petitioner,

Vs.

NatTionaL Lasor ReEuations Boarp,

Respondent.

PETITICN FOR WRIT OF CERTIORARI TO

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

McLavcGuuin & IrvIN

Patrick W. Jorpan*

Henry F. TELFEIAN

333 Market Street, #1050

San Francisco, CA 94105

Telephone: (415) 777-0115

Counsel for Petitioner

Presto Casting Company

*Counsel of Record

BOWNE OF SAN FRANCISCO, INC. * 190 NINTH ST. ¢ S.F., CA 94103 © (415) 864-2300

QUESTIONS PRESENTED

1. Whether the National Labor Relations Board may

order Presto Casting Company to execute and enter into

a collective bargaining contract that Presto has not volun-

tarily agreed to, where the Board found a valid impasse

existed between the collective bargaining parties.

2. Whether the National Labor Relations Board may

modify the terms of an offer made by an employer, making

that offer available for later acceptance, notwithstanding

prior rejection of that offer, the submission of counter-

proposals and a union-led strike.

3. May a three-judge panel overrule prior decisions of

the same Circuit.’

‘Other than those designated in the caption, the only other in-

terested party is United Steelworkers of America, AFL-CIO-CLC.

Though a corporation, petitioner neither owns any subsidiaries nor

is a subsidiary of any other corporation.

ii

TABLE OF CONTENTS

RE EES ETE SHEER De ORO

NR MUU UNIO cons ccnccenccccvecccstuocstovccescsevensebec

EG SATE SG IE A a

Constitutional and statutory provisions involved ..........

EE EES ae eT

Reasons for

Conclusion

granting the writ ................... OS ES ea

iii

TABLE OF AUTHORITIES CITED

Cases

Big John Food King, 171 NLRB No. 197, 68 LRRM

il ethane teas MONIC Rlaea ce atreed Se Mb TBSP ICRCO

Carbon Fuel Co. v. Mineworkers, 444 U.S. 219 (1979) 6

Ford Motor Co. v. NLRB, 441 U.S. 499 (1979) .............. 6, 7

Genesco, Ine. v. Joint Council 13, 341 F.2d 482 (2nd

Ie SN cantsoialeccEnccleaanstbieshaeided maeiceibiasivnsaeascdeibdidgetiiheecaeds 8

H. J. Heinz Co. v. NLRB, 311 U.S. 514 (1941) —20000.. 9

H. K. Porter Co. v. NLRB, 397 U.S. 99 (1970) .............. 5, 6

Inland Steel Co., 9 NLRB 783 (1938) ...................::-c-cceeeees 9

Lane Construction Corp., 222 NLRB No. 194, 91

RA IEE IED cede caieicalashccacniatbinisinerncnpoventosaeiioe 7

Loggins Meat Co., 206 NLRB 303 (1973) .......002..2.... 7

Lozano Enterprises v. NLRB, 327 F.2d 814 (9th Cir.

RI cctensncinitalhs ds. cigtanshentanibtaeod a

Lucas County Farm Bureau, 218 NLRB 1155 (1976)... 7

Mead Corp. v. NLRB, 697 F.2d 1013 (11th Cir. 1983) .. 12

Means & Co. v. NLRB, 377 F.2d 683 (7th Cir. 1967) .... 8,13

NLRB v. American Ins. Co., 343 U.S. 395 (1952) .... 6,7, 11

NLRB v. Burns Intl. Security Services, 406 U.S. 272

CRIN D * iansithinca ka Setcihivinpabnceidiipeesnbtramensinstlan Madhientonttieihs 6,7

NLBB v. Bus Co., Inc., 578 F.2d (3rd Cir. 1978) ............ 8

NLRB v. Downs-Clark, Inc., 479 F.2d 546 (5th Cir.

pS: GENER RRAR OM SIDE SEES SENSED NEL I em UR Crate hs © PEM 8

NLRB v. -H. Koch & Sons, 578 F.2d 1287 (9th Cir

MOVED saciss eh iacscaplhsaspiniidicinicastsiltapdiutamsscisei. - Apia Abtniee 8

NLRB v. Insurance Agents, 361 U.S. 477 (1960) Drie 7

NLRB v. Pacific Grinding Wheel Co., 572 F.2d 1343

CtRa Gia, BOER) sth sis etcdroinintcsesnstentonnn cee 12

iv

TABLE OF AUTHORITIES CITED

CasEs

Page

NLRB v. Ramona’s Mexican Food Products Inc., 531

Ag gy gt SN . _: ) RC eee pent Meee 12

NLRB v. Sumner Home for the Aged, 599 F.2d 762

SE cle ee 8

Pepsi-Cola Bottling Co. v. NLRB, 659 F.2d 87 (8th

EE AR Seat «SCM eae Ra tie KOM NCO Lb 8

Pittsburgh-Des Moines Steel Co., 235 NLRB 666

(1980), enf. den. 663 F.2d 956 (9th Cir. 1981) ............ 12

Randle-Eastern Ambulance Service, Inc., 230 NLRB

542 (1977), enf. den. in relevant part 584 F.2d 720

RIN, UN iden a a 12

Royal Development Co. v. NLRB, 703 F.2d 363 (9th

SEG PN rscttedt hicks Kaas acne datum och ebpaidatebotbadsaesactadie 11

St. Joseph Stockyards, 2 NLRB 39 (1936) 000. 9

Teamsters Local 524 v. Billington, 402 F.2d 510, (9th

Rs a aa 8,11

Times-Herald, 249 NLRB 13 (1980) 00000. 12

T. M. Cobb Co., 224 NLRB 694 (1976) 00. 7

United Steelworkers of America v. Bell Foundry Co.,

— ftp) RK, Ti ah: Renee eeas aN 8,11

Statutes

National Labor Relations Act:

ESTE aa a Ra Da ate: PPMP aMR ee 2, 5, 6, 12

| | een nea en nC One 2, 5, 6, 7, 8, 13

gh CME TG 6 8 TR RSA SOR mes kannm acc A? 1 Ze 1

Other Authorities

H.R. Rep. No. 245, 80th Cong. Ist Ses. 19-20 (1947) ...... 5

H.R. Rep. No. 510, 80th Cong. Ist Ses. (1947) 000000... 5

No.

In the Supreme Court

OF THE

United States

Presto Castine CoMPANY,

Petitioner,

vs.

Nationa Lasor Reiations Boarp,

Respondent.

PETITION FOR WRIT OF CERTIORARI TO

UNITED STATES COURT OF APPEALS FOR

THE NINTH CIRCUIT

The petitioner, Presto Casting Company, respectfully

prays that a writ of certiorari issue to review the judgment

of the United States Court of Appeals entered on Septem-

ber 7, 1983.

CITATION TO OPINION BELOW

The decision of the Court of Appeals is officially re-

ported at 708 F.2d 495 and is printed in the Appendix

hereto.

JURISDICTION

The opinion of the Court of Appeals for the Ninth

Circuit was issued on June 16, 1983, and judgment was

subsequently entered on September 7, 1983. A timely peti-

tion for rehearing and suggestion for rehearing en banc

was denied on August 2, 1983. The petition for certiorari

was filed within sixty (60) days of that date. This Court’s

jurisdiction is invoked under 28 U.S.C. § 1254(1).

2

CONSTITUTIONAL AND STATUTORY PROVISIONS

INVOLVED

The relevant parts of Sections 8(a)(5) and 8(d) of the

National Labor Relations Act are set forth in the Appen-

dix hereto. No constitutional provisions are implicated.

STATEMENT OF THE CASE

Presto Casting Company operates a metal casting plant

in Phoenix, Arizona, and produces parts for the aerospace

industry.* On November 12, 1980, United Steelworkers of

America was certified as the collective bargaining agent

for Presto Casting’s production and maintenance em-

ployees.

Commencing on December 15, 1980, the parties began to

negotiate for their first collective bargaining agreement.

By February 10, 1981, after a two-day strike, the parties

had reached substantial agreement on all non-economic

issues. As found by the Ninth Circuit, these non-economic

issues were “tentatively resolved, subject to an agreement

on economic issues.” (Appendix, p. 2.) As an additional

element of the February 10 strike settlement, the parties

agreed that they would meet again on February 17 and

that if they were unabie to reach an overall agreement

on that date, “all bets were off.” Moreover, it was agreed

that there would be retroactive application of negotiated

wage increases only if the parties would reach agreement

*Except where noted, the statement of facts is as set forth in the

decision of the Court of Appeals.

ns,

3

on economics by February 18.° (ALJD, p. 5, 11. 2-11; Tr.

pp. 673, 676; GCX 8.)

When the parties met on February 17, they exchanged a

series of proposals and counterproposals covering a wide

range of economic topics. Shortly after midnight, the

company made its “final final” offer. The Union rejected

this offer and made a further counterproposal. Notwith-

standing the existence of an impasse, the parties agreed to

meet again on February 26.

On February 26, the Union submitted another proposal

on economic items, which proposal was rejected by the

company. The parties were not negotiating face-to-face,

but were using the services of a federal mediator, who was

relaying proposals and messages. The company advised the

federal mediator that it was withdrawing its prior offer

of increased fringe benefits and wage retroactivity, and

that while it intended to implement its wage proposals, it

would not implement any portion of the fringe benefit

package or other non-economic items upon which tentative

agreement had been previously reached. (ALJD p., 9, 11.

1-3; Tr. pp. 744-745.) Later that day, Presto unilaterally

implemented only that portion of its final offer relating to

wages. No retroactive wage payments were made.

On the evening of February 26, the Union conducted a

strike vote and the employees, as had the Union, rejected

the company’s February 17 proposal. The following day

*The Court of Appeals incorrectly states that this agreement was

reached at the beginning of bargaining. 708 F.2d at 498, It is un-

disputed that this statement was made at the conclusion of the

February 10 negotiating session, (Tr., p. 679; Brief for the NLRB,

p- 21.)

4

the Union again struck. Two weeks later, the Union ended

its strike action and informed the company that it intended

to accept the company’s February 17 final offer. Presto

responded that in light of the Union’s previous rejections,

its counterproposals, and the strike action, the company’s

last offer was no longer outstanding and could not be

accepted by the Union. Presto agreed to commence bar-

gaining anew, but the Union pressed its NLRB claims.

Both the NLRB and the Ninth Cireuit found that the

parties had failed to reach a freely negotiated agreement

on February 17 and further, that a valid impasse was

reached on February 26. Nevertheless the NLRB ordered

the company to execute a written agreement incorporating

its previously-tendered February 17 offer, thereby modify-

ing the terms of that offer, for the purpose of compelling

agreement where none existed.

REASONS FOR GRANTING THE WRIT

The Board’s decision and the Ninth Circuit’s affirmance

jettison the centuries-old common law rule that a contract

offer is reyoked upon rejection or the making of a counter-

offer. 1 Williston on Contracts, §50A. There can be no

dispute that the general rules of offer and acceptance have

been adopted by labor and management alike, and have

been followed since the inception of collective bargaining in

the United States. In its place, the Board substitutes the

rule that an offer “may be accepted within a reasonable

time unless (i) it was expressly withdrawn; (ii) it was

made expressly contingent on a condition subsequent; or

(iii) cireumstances intervening between offer and pur-

ported acceptance would characterize the latter as simply

5

unfair.” (Appendix, p. 5.) As will be shown below, this

hypertechnical rule has both the direct and indirect effect

of allowing the Board to govern the substance of offers

tendered in the collective bargaining arena, thereby

imposing its will upon the substance of bargaining

agreements.

Since the inception of the National Labor Relations Act

(NLRA), employers have been required to bargain in good

faith with unions. In 1947, the Taft-Hartley Act amended

the NLRA to obligate both unions and management to

bargain in good faith. Section 8(d) was added for the pur-

pose of explicitly defining the duty to bargain as the obli-

gation to meet at reasonable times and confer in good

faith on terms and conditions of employment. The legis-

lative history plainly shows that Congress was deeply

concerned with prior decisions of the Board, which in

effect required an employer to make or offer concessions

before the Board would find that the employer was bar-

gaining in good faith. Accordingly, it was expressly pro-

vided that the obligation to bargain, as required by Section

8(a)(5), did not include an obligation to agree to any par-

ticular proposal or the making of concessions. H.R. Rep.

No. 245, 80th Cong. 1st Ses, 19-20 (1947). H.R. Rep. No.

510, 80th Cong. Ist Ses. (1947). See also H. K. Porter

Co. v. NLRB, 397 U.S. 99 (1970).

In construing the necessary interrelationship between

Sections 8(a)(5) and 8(d) of the NLRA, this Court has

repeatedly held that the Act does not compel that agree-

ments be reached between employers and unions. To the

contrary, each side retains its inberent freedom of contract

and the right to determine for itself the terms and condi-

6

tions of an agreement, if any, that can be reached. Carbon

Fuel Co. v. Mineworkers, 444 U.S. 219 (1979) ; Ford Motor

Co, v. NLRB, 441 U.S. 499 (1979); NURB v. Burns Intl.

Security Services, 406 U.S. 272 (1972); H. K., Porter v.

NLRB, supra. In that regard, the Court has held that an

overriding policy of Section 8(d) was to foster free col-

lective bargaining without governmental regulation or

compulsion to agree to any particular proposal, Carbon

Fuel Co. v. Mineworkers, supra.

Consistent with that analysis, this Court has expressly

held that the Board’s remedial powers are limited by the

same considerations that led to the enactment of Section

8(d). H. K. Porter Co. v. NLRB, supra. Where the Board

may not rely upon the simple act of failing to agree to find

a violation of Section 8(a) (5), likewise it may not compel

agreement in that same dispute.

This overriding congressional intent has been reaffirmed

by the Court in several significant decisions. First, in

NLRB v. American Ins. Co., 343 U.S. 395 (1952), the

Board contended that it was a per se violation of the Act

for an employer to seek a broadly-based management

rights clause for the reason that such a clause would

allow an employer to set various terms and conditions

of employment. The Board argued to the Court that

employers must; agree to include in a contract provisions

establishing fixed standards for various conditions of

employment. In rejecting this argument the Court observed

that Section 8(d) does not allow the Board to pass upon

the desirability of substantive terms contained in collec-

tive bargaining agreements. Further, the Act does not

require any party to engage in “fruitless marathon dis-

7

cussions,” where agreement cannot be reached. Moreover,

the Board may not, either directly or indirectly, compel

concessions so as to interfere with the parties’ inherent

freedom of contract and the right to make their own agree-

ments. 343 U.S. at 404. Likewise, in NLRB v. Insurance

Agents, 361 U.S. 477, 487 (1960), the Court held that

Congress through its enactment of Section 8(d) sought to

prevent the Board from controlling the terms of collective

bargaining agreements. Thirdly, in NLRB v. Burns Intl.

Security Services, supra, the Board argued that a suc-

cessor employer was obligated to follow a collective bar-

gaining agreement executed by a predecessor. This con-

tention was again rejected by the Court as it observed

that such a position violated the very premise of the Act

which is bargaining freedom, and freedom from having

contract provisions imposed against either party’s will.

Although it is well-established that the Board is entitled

to construe the Act, deference is not warranted where the

Board fails to follow the underlying purpose of the statute

or attempts to enter into new areas of regulation which

Congres expressly precluded it from doing. Ford Motor

Co. |v. NLRB, supra.

ursuant to the policy of freedom of contract and the

requirement of mutual assent, the Board has long followed

the common law rules of offer and acceptance to determine

whether a ‘meeting of the minds” has been reached. 7. M.

Cobb Co., 224 NLRB 694 (1976) ; Lane Construction Corp.,

222 NLRB No. 194, 91 LRRM 1337 (1976); Lucas County

Farm Bureau, 218 NLRB 1155 (1976); Loggins Meat Co.,

206 NLRB 303 (1973); Big John Food King, 171 NLRB

No. 197, 68 LRRM 1273 (1968). Absent a showing of offer,

acceptance, and mutual assent, the NLRB is prohibited by

8

Section 8(d) from imposing a contract on the bargaining

parties. NLRB v. Sumner Home for the Aged, 599 F.2d 762

(6th Cir. 1979); NLRB v. Bus Co., Inc., 578 F.2d 472 (3rd

Cir. 1978); NLRB v. H. Koch & Sons, 578 F.2d 1287 (9th

Cir. 1978); NLRB v. Downs-Clark, Inc., 479 F.2d 546 (5th

Cir. 1973) ; and Genesco, Inc. v. Joint Council 13, 341 F.2d

482 (2nd Cir. 1965); but see Pepsi-Cola Bottling Co. v.

NLRB, 659 F.2d 87 (8th Cir. 1981).

The Board's instant abrogation of the common law of

offer and acceptance is in direct conflict with the Seventh

Circuit’s decision in Means & Co. v. NLRB, 377 F.2d 683

(7th Cir. 1967) and previous decisions of the Ninth Circuit.

United Steelworkers of America v. Bell Foundry Co., 626

F.2d 139 (9th Cir. 1980), and Lozano Enterprises v. NLRB,

327 F.2d 814 (9th Cir. 1964). While hypertechnical rules of

contract law do not govern collective bargaining agree-

ments, it has been well-established that the normal rules of

offer and acceptance are determinative of the existence of

a bargaining agreement. Means € Co. v. NLRB, supra; and

Lozano Enterprises v. NLRB, supra. Less than four years

ago, the ..inth Circuit in United Steelworkers of America

v. Bell Foundry Co., supra, in the context of a Section 301

action, expressly held that modification of an offer oper-

ates as a revocation of that offer. A similar holding may be

found in Teamsters Local 524 v. Billington, 402 F.2d 510,

n. 2 (9th Cir. 1968), in which that court held that normal

rules of offer and acceptance govern collective bargaining.

In the instant case, the Board asserts that it has merely

redefined the rules of offer and acceptance by imposing

its regulation that unless an offer is expressly withdrawn,

it remains open-ended even though it has been previously

rejected. The rationale for this new “rule” is that there

is a difference between the collective bargaining arena and

the negotiation of commercial contracts and further, that

collective bargaining parties are compelled to deal with

each other. Remarkably, the Board seems to forget that

the fundamental basis for the enactment of the NLRA

was Congress’ desire to provide for labor peace so as not

to obstruct commerce and the free flow of commerce. Addi-

tionally in Inland Steel Co., 9 NLRB 783 (1938), and

St. Joseph Stockyards, 2 NLRB 39 (1986), the Board

found that it was an unfair labor practice for employers

to refuse to sign an agreement embodying the terms nego-

tiated, even though such a requirement was not then con-

tained in the Act. The basis for these decisions was that

it was customary in commercial settings to have a written

agreement which outlined the duties and responsibilities

of the contracting parties, and the unions’ request for

written agreements was consistent with what any “prudent

businessman would expect.” Indeed, this argument lies at

the heart of the Court’s decision in H. J. Heinz Co. v.

NLRB, 311 U.S. 514 (1941), where the Court observed that

a businessman who refused to put his commitments in

writing could not expect to be found to have bargained in

good faith by that refusal and accordingly, the seune

rationale should be applied to an employer, who by his

refusal to sign apparently would not honor his verbal

commitments, Given this history, the Board may not prop-

erly contend that there is a meaningful distinction, for

purposes of offer and acceptance, between commercial con-

tracts and collective bargaining agreements. Moreover, the

general principles of offer and acceptance were uniformly

followed at the time of the enactment of the NLRA and

10

Taft-Hartley, and were thereby a part of the concept of

collective bargaining with which Congress dealt.

There is no dispute, and it was reaffirmed by the Ninth

Circuit, that the parties reached a bona fide impasse on

February 26, and could not conclude a voluntary agree-

ment, There was nothing in the written “final final” offer

which extended it on into infinity or granted the Union

an opportunity, at its whim, to test the strike waters and

then return to the bargaining table unscathed. Thus,

simply because the parties must deal with each other, this

does not mean that the Board has the authority to break

the logjam by redefining the terms of an offer submitted

by Presto, to suit its purposes of compelling an agreement.

Significantly, the Ninth Circuit affirmed that the parties

reached agreement on a ground rule that “ ‘all bets were

off’ if the negotiations broke down.” (Appendix, p. 5.) In

redefining the “parties’ expectations” vis-a-vis these plain

words, the Board has rewritten Presto’s final offer to

include a term that would make it available for union

acceptance within a reasonable period of time. As a result,

the Board is now attempting to fashion a rule that all

offers are available for later acceptance, notwithstanding

rejection and the submission of counterproposals thereto,

unless the offer has been expressly withdrawn in a form

and fashion acceptable to the Board. Such a rule does not

involve the mere establishment of procedures to be fol-

lowed by the parties, nor is the Board simply observing

_ the process of collective bargaining. Rather, the Board

seeks to participate in the substance of collective bargain-

ing by dictating the terms of an offer, i.e., the length of

time within which that offer may be accepted, irrespective

11

of prior rejections or the submission of counterproposals.

This meddling in the substantive aspects of collective bar-

gaining, which of necessity compels a concession by an

employer to a union whereby its offer is extended indefi-

nitely absent express withdrawal on terms acceptable to

the Board, is contrary to the policy of the Act in general

and is in direct conflict with the remedial limitations

placed upon the Board by Section 8(d). Once a union has

rejected an employer’s offer, the Board has no authority

to require that the employer expressly withdraw its offer

or run the risk of having a union accept that offer at a

later time. If a valid impasse has been reached, it is the

collective bargaining parties who must determine the con-

ditious under which they will continue bargaining, and not

the Board. The Board’s instant policy of requiring the

express Withdrawal of offers or suffer the consequences

of an open-ended offer is no different than requiring that

specified terms and conditions of employment must be

addressed and incorporated into an agreement. Cf. NLRB

v. American Ins. Co., supra.

The Ninth Cireuit’s decision not only improperly abol-

ishes the need for mutual assent, but also conflicts with its

own developed case law. This intra-circuit conflict goes

unexplained, as the Court’s decision fails to cite or discuss

either Bell Foundry or Billington, despite the Circuit's

acknowledged position that the doctrine of stare decisis

prevents the Court from overruling a previous panel deci-

sion. Royal Development Co. v. NLRB, 703 F.2d 363 (9th

Cir. 1983).

From a practical standpoint, the Board's decision is in-

herently contradictory and has the effect of placing em-

12

ployers in an untenable position. Thus, while the Board

asserts that it permits an employer to withdraw an offer

prior to acceptance, it has also promulgated a nearly

per se rule that such withdrawals, without good cause, are

violative of Section 8(a)(5) of the Act. E.g. Randle-East-

ern Ambulance Service, Inc., 230 NLRB 542 (1977), enf.

den, in relevant part 584 F.2d 720 (5th Cir. 1978). In the

absence of an acceptable explanation, the Board uniformly

refuses to permit an employer to retract an outstanding

offer. Compare Pittsburgh-Des Moines Steel Co., 235 NLRB

666 (1980), enf. den. 663 F.2d 956 (9th Cir. 1981), with

Times-Herald, 249 NLRB 13 (1980). Similarly, various

Courts of Appeal have also found a violation of Section

8(a)(5) where an offer was withdrawn prior to imminent

acceptance. Mead Corp. v. NLRB, 697 F.2d 1013 (11th Cir.

1983); and NLRB v. Ramona’s Mexican Food Products

Inc., 531 F.2d 390 (9th Cir. 1975). See also NLRB v. Pacific

Grinding Wheel Co., 572 F.2d 1343 (9th Cir. 1978). Stated

otherwise, the Board asserts that it may adopt a procedural

rule requiring the withdrawal of offers. However, that pro-

cedural rule becomes one of substance for the reason that

the simple act of following the Board’s procedure subjects

the employer to independent liability under Section 8(a) (5)

for having withdrawn an offer. What the Board gives with

one hand, it takes back with the other. It is readily appar-

ent that the Board’s rewriting of Section 8(d), to serve its

own purposes and to force agreements where none can be

had, will result in brinksmanship rather than industrial

peace.

Employers and unions are entitled to rules which will

lend certainty to the negotiating process and ensure that a

13

meeting of the minds has occurred. This was correctly ob-

served by the Seventh Circuit in Means & Co. v. NLRB,

supra, where it held that industrial peace can best be served

by following rules which are calculated to afford some de-

gree of certainty in collective bargaining. The Court re-

fused to accept the Board’s deviation from general prin-

ciples of contract law and its failure to justify such an

attempt.

The common law rules governing offer and acceptance

require nothing more than the simple acts of offering, ac-

cepting, or rejecting proposals. They do not require ten-

dering offers in a certain form, conditioning those offers

upon various events, or dictating the length of time those

offers are available for acceptance notwithstanding p.ior

rejection. By imposing a requirement that offers be ex-

pressly withdrawn or limited to a specified duration, the

Board has compelled the making of a concession, and has

injected itsclf into the formulation of offers. Such offers

form the basis of the terms and conditions ultimately to be

agreed upon by the parties through mutual assent. Ac-

cordingly, the Board has entered the bargaining process in

a direct and meaningful fashion which will necessarily have

an impact upon substantive agreements reached by collec-

tive bargaining parties. The Board may not use this in-

direct or veiled approach to accomplish that which it may

not do directly.

14

CONCLUSION

For the foregoing reasons, this Petition for a Writ of

Certiorari should be granted.

Dated: September 29, 1983.

Respectfully submitted,

McLAvuGHLIN AND IrvIN

Patrick W. Jorpan

Henry F’, Te.reran

By Patrick W. Jorpan

Attorneys for Petitioner

Presto Casting Company

(Appendices follow)

Appendix A

United States Court of Appeals,

Ninth Circuit

No. 82-7386

Presto Casting Company,

Petitioner,

V.

National Labor Relations Board,

Respondent.

On Petition to Review a Decision of the

National Labor Relations Board

Before HUG and FARRIS, Circuit Judges, and

GADBOIS,* District Judge

GADBOIS, District Judge:

This matter is before the court on the petition of Presto

Casting Company to review and set aside an order of the

National Labor Relations Bvard, and the cross-application

of the Board for enforcement of the order. Both petitions

were timely filed and jurisdiction is afforded by 29 U.S.C.

§ 160(e) and (f).

Presto is a metal casting firm which operates a foundry

and heat treating plant in Phoenix, Arizona. On November

12, 1980, the Board certified the United Steelworkers of

America as the collective bargaining representative of

Presto’s production and maintenance employees. Com-

mencing on December 15, 1980 and through February 26,

*The Honorable Richard A. Gadbois, Jr., United States District

Judge, Central District of California, sitting by designation.

A-2

1981, the parties met a number of times for the purpose

of negotiating a collective bargaining agreement. At Pres.

to’s insistence, the parties treated non-economic and eco-

nomic matiers separately. initial negotiations were limited

to non-economic items. Negotiations broke down when a

personality problem developed between Garza, negotiator

for the company, and Smith, the union spokesman. On

February 10, 1981, the union met with Presto’s new nego-

tiator, Long. The latter had prepared a draft of the com-

pany’s non-economic proposal and presented it to the union.

After some revisions the non-economic issues were tenta-

tively resolved, subject to an agreement on economic

issues.

On February 17, Long presented the company’s economic

package to Smith. During the course of a marathon bar-

gaining session, the parties exchanged proposals and

counter-proposals covering a wide range of economic issues.

Late in the meeting Long submitted his “final final” offer.

The union made a counter-proposal which Long rejected.

The union again proffered a counter-proposal, but Long

reiterated that Presto had made its ultimate offer. The

parties agreed to meet again on February 26. At that

meeting the union gave Presto another proposal on eco-

nomic matters, but again Long rejected it. That evening

the union conducted a strike vote. The employees rejected

the Presto proposal. A strike commenced on February 27

and lasted until March 6. Smith decided to terminate the

strike on March 6 because a majority of the employees had

in fact returned to work. A union mailgram accepting the

company’s final offer was sent on the afternoon of March 6.

Garza, who had earlier heard of the union’s acceptance,

*

A-3

informed Long that the union was accepting the company’s

offer. Long notified the federal mediator that he wanted the

proposal withdrawn from the bargaining table. The union

mailgram was received at Presto on March 7. Acting on the

union’s March 6 acceptance of the agreement, those em-

ployees who had remained on strike reported to the com-

pany’s main plant on March 9, unconditionally seeking

reinstatement. Presto has refused to acknowledge existence

of an agreement or to conform to any of its provisions.

At various relevant times the union filed with the Board

unfair labor practice charges which complained of Presto’s:

(i) failing to acknowledge and sign the March 6

“agreement” with the union; (Sections 8(a)(1) and (5)

of the National Labor Relations Act, 29 U.S.C. § 158(a)

(1) and (5))

(ii) failing to reinstate economic strikers who had

not been permanently replaced; (Sections 8(a)(1) and

(3) of the Act, 29 U.S.C. § 158(a)(1) and (3))

(iii) unilateral discontinuance during negotiations of

the company’s past practice of holiday distributions;

(Sections 8(a)(1) and (5) of the Act, 29 U.S.C.

§ 158(a)(1) and (5))

(iv) requiring returning economic strikers to sign

a company-prepared request for reinstatement.

The Administrative Law Judge found for the union on

these charges. The Board affirmed the ALJ’s findings of

fact and conclusions of law and adopted his recommended

order.

The principal issue in this case is whether the Board

erred in finding that Presto’s final contract offer was still

susceptible of acceptance on March 6, notwithstanding that

it was subjected to two counteroffers and a rejection, fol-

A-4

lowed by a strike. The law is clear that we must affirm a

decision of the Board which relies on findings of fact sup-

ported by substantial evidence. NLRB v. Tomco Communi-

cations, Inc., 567 F.2d 871, 876 (9th Cir.1978) ; and Capitol-

Husting Co., Inc. v. NLRB, 671 F.2d 237, 242-243 (7th Cir.

1982).

Presto urges us to apply general legal principles of con-

tract formation and to hold that counteroffers, rejections

and a subsequent change of relative bargaining positions in

favor of the offeror constitute withdrawal of the offer and

that a purported acceptance thereafter is wholly ineffective.

Indeed, this court, in Lozano Enterprises v. NLRB, 327

F.2d 814, 819 (9th Cir.1964), stated:

We do not at all mean to hold that, in general, the

normal rules of offer and acceptance are not determina-

tive as to whether an agreement has been reached in

a collective bargaining situation...

As Lozano observes, however, strict reliance on that gen-

erality is an overly simplistic approach.’ The more consid-

ered view is that adopted in Pepsi-Cola Bottling Co., Ete.

v. NLRB, 659 F.2d 87 (8th Cir.1981). There the court con-

fronted a situation in which the employer refused to

acknowledge an agreement based on its own proposal,

which was initially rejected but accepted shortly there-

after. The court noted that technical rules of contract

formation do not confine collective bargaining, because the

parties are obliged by their relationship to deal exclusively

with each other and because policies of the Act dictate that

1Lozano holds that intentional failure to deliver a written contract

signed by the parties is ineffective to bar its enforcement. 327 F.2d

at 819.

+

a

A-5

this provess not be encumbered by undue formalities. Jd.

at 89. Pepsi-Cola held that an offer is not automatically

terminated by rejection or counter-proposal. Rather, it may

be accepted within a reasonable time unless (i) it was

expressly withdrawn; (ii) it was made expressly contingent

on a condition subsequent; or (iii) circumstances interven-

ing between offer and purported acceptance would charac-

terize the latter as simply unfair. Jd. at 89-90. We now

adopt that holding as the law of this Circuit.’

Applying the above rule to the facts in this case, we find

that substantial evidence supports the Board’s conclusion

that Presto’s offer was not withdrawn. The company makes

much of the ground rules set at the beginning of the bar-

gaining between Long and Smith, at which time it was

agreed that “all bets were off” if the negotiations broke

down. It certainly could be implied that any company offer

on the table when negotiations terminated was auto-

matically revoked. The Board determined otherwise, how-

ever, and it has the expertise to determine the reasonable

expectations of the parties during the period in issue. The

“all bets are off” statement was made early in the bargain-

ing process and was not used in connection with the impasse

reached on February 26. Further, there is some “vidence

that Presto itself thought that the offer was still open. When

Long heard on March 6 that the union had sent a mailgram

of acceptance, he tried expressly to withdraw the offer.

*This rule is fully consistent with decisions of this court dealing

with contract formation in the context of labor relations. See

Lozano Enterprises v. NLRB, 327 F.2d at 818-19; NLRB v. Electra-

Food Machinery, Inc., 621 F.2d 956, 958 (9th Cir.1980); and NLRB

v. Donkin’s Inn, Inc., 532 F.2d 138, 141-42 (9th Cir.1976), cert.

den., 429 U.S. 895, 97 S.Ct. 257, 50 L.Ed.2d 179.

A-6

Presto complains that the Board’s order is unfair, since

it takes away the economic advantage earned by its having

weathered the strike. The decision in Pepsi-Cola Bottling

Co., Etc. v. NLRB, correctly states the rule that a mere

change in bargaining strength does not create such unfair-

ness as to negate acceptance. 659 F.2d at 90.

The Presto offer, which was not contingent on a subse-

quent condition, was never the subject of an effective

express withdrawal. It was accepted within a reasonable

time, and the intervening events do not render recognition

of the agreement as unfair. Whether the agreement was in

fact reached by the parties is a question for the Board to

determine. Capitol-Husting Co., Inc. v. NLRB, 671 F.2d

at 243. Since the Board’s determination in this case is sup-

ported by substantial evidence we cannot declare the same

to be erroneous, even if we might reach a different conclu-

sion on the same evidence. Jd.; accord, NLRB v. Nevis In-

dustries, Inc., 647 F.2d 905, 908 (9th Cir.1981).

The second issue raised by Presto’s appeal concerns its

alleged failure timely to reinstate several economic strikers.

Presto complains of the Board’s finding of such failure

in that the issue was not raised in the complaint against it.

It is clear that the Board may find an unfair labor practice

even though not specifically charged in the complaint, if in

fact the issue has been fairly and fully litigated. Alexander

Dawson, Inc. v. NLRB, 586 F.2d 1300, 1304 (9th Cir.1978).

Here, the complaint charged Presto with unfair labor prac-

tices connected with the strike itself. Presto was not pre-

pared at the hearing to come forward with valid reasons

for failure to reinstate economic strikers, Under these cir-

cumstances Presto did not have the opportunity to litigate

A-7

the issue fairly, and enforcement of the Board’s order ‘n

this respect must be denied.

The remaining issues involve Board determinations that

Presto violated the Act by requiring returning workers to

sign a reinstatement form and unilaterally abolishing a

minor employee benefit. We affirm these orders. On the first

issue, there was substantial evidence to support the finding

that reinstatement was conditioned upon signing the form.

When the striking employees made an unconditional offer

to return to their employment, Presto was obligated to

make them an unconditional offer of reinstatement. See

Shelly € Anderson Furniture Mfg. Co., Inc. v. NLRB, 497

F.2d 1200, 1204 (9th Cir.1974). With respect to the em-

ployee benefit situation, Presto concedes technical violation

of the Act but argues that it was de minimis and later

cured. The remedial authority of the Board, however, is

broad and discretionary, and it is not an abuse of discretion

to make an order to deter future misconduct despite a claim

of compliance. NLRB v. Gissel Packing Co., Inc., 395 U.S.

575, 612 n. 32, 89 S.Ct. 1918, 1939 n. 32, 23 L.Ed.2d 547,

Enforcement of the Board’s order is granted in part and

denied in part.

A-8

Appendix B

United States Code, Title 29, Section 158(a) (5)

Sec. 8. (a) It shall be an unfair labor practice for

an employer—

(5) to refuse to bargain collectively with the repre-

sentatives of his employees, subject to the provisions

of section 9(a).

United States Code, Title 29, Section 158(d)

(d) For the purposes of this section, to bargain col-

lectively is the performance of the mutual obligation

of the employer and the representative of the em-

ployees to meet at reasonable times and confer in good

faith with respect to wages, hours, and other terms

and conditions of employment, or the negotiation of an

agreement, or any question arising thereunder, and the

execution of a written contract incorporating any

agreement reached if requested by either party, but

such obligation does not compel either party to agree

to a proposal or require the making of a concession: .. .