Checker Taxi Co.

National Labor Relations Board - Board Decisions

Mar 14, 1977

228 N.L.R.B. 639 (N.L.R.B. 1977)

CHECKER TAXI COMPANY 639
Checker Taxi Company and Taxicab , Bus, Funeral
Drivers & Chauffeurs Union Local No. 496, a/w
International Brotherhood of Teamsters , Chauff-
eurs, Warehousemen and Helpers of America
Red Cab Company, Inc. and Taxicab, Bus, Funeral
Drivers & Chauffeurs Union Local No. 496, a/w
International Brotherhood of Teamsters , Chauff-
eurs, Warehousemen and Helpers of America.
Cases 1-CA-10597 and 1-CA-10598
March 14, 1977
DECISION AND ORDER
BY CHAIRMAN MURPHY AND MEMBERS
FANNING AND JENKINS
Warehousemen and Helpers of America (the Union), a
consolidated complaint was issued on June 11, 1975,
against Checker Taxi Company and Red Cab Company,
Inc. (Respondents), alleging violation of Section 8(a)(5)
and (1) of the Act' by Respondents' refusal to execute
written collective-bargaining agreements in accordance
with oral agreements previously reached.
Pursuant to due notice, the consolidated case was heard
before me in Boston, Massachusetts, on June 22, 1976. All
parties were represented by counsel and were afforded full
opportunity to present oral and other evidence and to
examine and cross-examine witnesses . The parties waived
oral argument at the close of the hearing and post-hearing
briefs have been filed on behalf of the Respondents and the
Union.
Upon the entire record, together with careful observation
of the witnesses and consideration of the briefs, I make the
following:
On November 23, 1976, Administrative Law Judge
Josephine H. Klein issued the attached Decision in
this proceeding. Thereafter, the Charging Party filed
exceptions and a supporting brief, and the Respon-
dent filed a brief in support of the Administrative
Law Judge's Decision.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the
attached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings,' and conclusions of the Administrative Law
Judge and to adopt her recommended Order.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Administrative Law Judge and
hereby orders that the complaint be, and it hereby is,
dismissed in its entirety.
' The Respondent has excepted to certain credibility findings made by
the Administrative Law Judge . It is the Board's established policy not to
overrule an Administrative Law Judge 's resolutions with respect to
credibility unless the clear preponderance of all of the relevant evidence
convinces us that the resolutions are incorrect . Standard Dry Wall Products,
Inc, 91 NLRB 544 (1950), enfd . 188 F.2d 362 (C.A. 3, 1951) We have
carefully examined the record and find no basis for reversing her findings.
DECISION
JOSEPHINE H. KLEIN, Administrative Law Judge: Pursu-
ant to charges filed on April 14, 1975, by Taxicab, Bus,
Funeral Drivers & Chauffeurs Union Local No. 496, a/w
International Brotherhood of Teamsters, Chauffeurs,
FINDINGS OF FACT
1. PRELIMINARY FINDINGS
Respondents, Massachusetts corporations, with their
principal offices and places of business in Boston and
Brookline, Massachusetts, are engaged in the operation of
taxicab businesses. Each Respondent, in the course of its
business, causes large quantities of petroleum products,
automobiles, automobile parts, and office supplies used by
it in the operation of its taxicab business to be purchased
and transported in interstate commerce from and through
various States other than the Commonwealth of Massachu-
setts. Each Respondent's annual gross of volume of
business is in excess of $500,000 and each receives at its
Massachusetts location goods valued in excess of $50,000
directly from points outside Massachusetts. Each Respon-
dent is, and was at all times material herein, an employer
engaged in commerce within the meaning of Section 2(2),
(6), and (7) of the Act.
The Union is, and was at all times material herein, a
labor organization within the meaning of Section 2(5) of
the Act.
II. THE UNFAIR LABOR PRACTICES
A. The Issue
In negotiations for a renewal collective-bargaining
agreement , a major issue in dispute was Respondents'
demand that they be allowed to "lease" their cabs and the
Union's refusal to agree to any such leasing. The Union's
bargaining agent volunteered to draft language on the
subject that would be mutually satisfactory. After reading
the proposed language drafted by the union representative,
Respondents' representatives indicated their agreement to
the entire contract. The wage and other provisions of the
contract were immediately put into effect. When the
agreement was later put in writing, Respondents' represen-
tatives submitted it to review by counsel. When informed
National Labor Relations Act, as amended , 29 U.S.C. Sec . 151, et seq
228 NLRB No. 76
640 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
by counsel that the language proposed by the Union
forbade leasing of cabs, Respondents refused to sign the
agreement.
Respondents maintain that the so-called "leasing"
provision as worded by the union representative does not
represent the substantive agreement reached by the parties.
The Union maintains that, because Respondents' represen-
tatives orally agreed to the wording of that provision, they
are legally obligated to execute the agreement embodying
such language.
B. The Facts
Respondents and the Union have had collective-bargain-
ing relationships for almost 40 years. Their most recent
collective-bargaining agreements were to expire on January
31, 1974. Negotiations for renewal agreements began
toward the end of 1973 and continued for about a year.
Respondent Checker was represented in the negotiations
by Howard MacOdrum, its vice president, and Red Cab by
Edward McCarty, its president. Both men had represented
their Companies in negotiations for around 35 years. In
most of the negotiations neither the Union nor the
Respondents had been represented by counsel. Thomas
Sawyer, president of Checker and principal stockholder in
both Companies, had not participated in negotiations
directly for at least 20 years, although he is active in the
business and retains final authority on all matters. The
Union was represented by a committee which included
employees of Respondents as well as union agents.
However, in the negotiations here involved the Union's
spokesman was Luke Kramer. Kramer, executive officer
and secretary-treasurer of the Teamsters Milkdrivers
Local, has been a union bargaining representative for some
39 years but had never before dealt with the taxi industry.
When asked by the International to participate in the
Boston taxi negotiations , he agreed only on the condition
that he would be in full charge of the negotiations and the
only union spokesman vis-a-vis the Employers.
There was disagreement as to many matters in the 1974
negotiations. From the very beginning there was a sharp
disagreement on the Respondents' demand that it be
permitted to lease taxicabs to nonemployees, which the
union members opposed. Although the areas of disagree-
ment were gradually reduced during the approximately 20
negotiating sessions , the leasing problem remained.
At this point, it should be noted that the leasing of cabs
was unlawful in Boston.2 However, it is undenied that
other taxi companies and cab owners were widely leasing
cabs, with the knowledge of, but no restrictive action by,
the authorities. For some time Sawyer, as president of the
Boston Taxicab Association as well as Respondents'
principal, had been trying to have cab leasing legalized in
Boston. His efforts in this direction proceeded at the same
time as the contract negotiations. As set forth below, he
met success about the same time the contract negotiations
with the Union ended.
On numerous occasions the parties caucused, with
MacOdrum and McCarty, Respondents' representatives,
leaving the conference room and standing in the hallway
outside. Frequently Kramer also left the conference room,
purportedly for the dual purpose of going to the restroom
and permitting the union committee to caucus on its own.
On such occasions, he spoke privately with MacOdrum
and McCarty. Union Business Agent Donald Mullin
confirmed the fact that on occasions during the sessions
Kramer left the room with McCarty and MacOdrum.
McCarty further testified that whenever leasing was
mentioned in the negotiations the discussion became
heated, whereupon Kramer calmed things down and took
McCarty and MacOdrum out of the room.
MacOdrum and McCarty credibly testified that Kramer
told them that he preferred not to discuss the matter in the
presence of the other union committeemen because
"leasing was a red flag , was an emotional issue ." MacOd-
rum and McCarty credibly testified that Kramer said
Respondents were "entitled to leasing" and he would see to
it that a final contract was reached that did not prevent
leasing cabs. Kramer said, however, that the words " lease"
or "leasing" could not be used since they were "inflamma-
tory" to the union members and representatives.
In July 1974, with the leasing issue as well as some others
still unresolved, Kramer invited Sawyer to lunch. They had
lunch together twice. On both occasions leasing was
discussed. Sawyer explained at length that Respondents'
inability to lease put them at a great competitive disadvan-
tage vis-a-vis other taxi companies , which were engaged in
broad-scale leasing despite its illegality in Boston. Briefly
stated, as explained by both Sawyer and MacOdrum in
testifying, lessees pay $20 or $25 per day for cab rental and
assume no other expenses except for gasoline , the lessor
providing operating authority, insurance, and mainte-
nance . Additionally, lessees are not restricted in the hours
they can work, as employees are by the collective-bargain-
ing agreement (presumably by the prohibitive cost of
overtime pay). And lessees also can sublease, thereby
utilizing the cabs virtually full time. Sawyer testified that
lessees can earn up to $400 per week. Accordingly, because
the rewards of individual initiative are greater, Respon-
dents maintain they are unable to obtain enough drivers,
resulting in underutilization of their vehicles , with perhaps
up to half of Checker's fleet being idle much of the time.
When Kramer indicated that some of the union members
believed that leasing was a technique for breaking the
Union, Sawyer assured him that it was not so intended and
would not be so used. Sawyer said that Respondents would
require membership in the Union as a condition to leasing
a cab. According to Sawyer, Kramer acknowledged the
validity of Sawyer's position and repeatedly assured
Sawyer that Respondents were "entitled to leasing" and
Kramer would make sure that they would get a contract
which did not prohibit it. However, Kramer said that the
words "lease" or "leasing" could not appear in the
agreement because they would be a "red flag" to the union
members and representatives.
Kramer maintained that he had told Sawyer that there
was no reason at that time to have any leasing provision in
2 There is nothing in the record concerning the legal situation in said that Red Cab did not intend to lease cabs . However , negotiations with
Brookline , the suburb of Boston in which Red Cab's facilities are located . At the two Respondents are always conducted together and result in identical
one point Kramer, the Union 's bargaining agent , quoted McCarty as having contracts.
CHECKER TAXI COMPANY 641
the contract because of the illegality of leasing. He said
that he told Sawyer the matter could be brought up again
in the next negotiations (which would be 3 years later).
However, Kramer also testified that he told Sawyer "that
he never could get a contract with a leasing arrangement,
definitely not."
Kramer also said that Sawyer was sophisticated enough
to know that if he wanted to lease cabs he could do so
through a newly organized separate company. According
to Kramer, Sawyer replied by saying that he could not do
that because he would be accused of "circumventing" the
collective-bargaining agreement . On cross-examination
Kramer acknowledged that if Sawyer formed another
corporation it could not lease vehicles or medallions (i.e.,
operating authority) belonging to Respondents .3
In these luncheon meetings Kramer was at great pains to
win Sawyer's trust. He did so by, inter alia, flattering
Sawyer's business acumen and his prolabor sympathies, on
which Sawyer prides himself.4
After the second lunch, on July 29, they went to Sawyer's
office. On his own initiative, Kramer dictated to Sawyer's
secretary a document, which, when typed, was signed by
both men. That document contains no preamble or other
introductory recital, but simply lists three numbered items.
The first reads: "Withdrawal of leasing proposition." The
second and third numbered items , concerning commission
rates and employer contributions to the retirement fund,
were liberally increased benefits designed as incentives to
increase utilization of Respondents' vehicles. Sawyer
testified that he volunteered them, without demand by the
Union, as "sweetening" in view of his obtaining permission
to lease cabs.5 Sawyer testified repeatedly and unequivo-
cally that he signed the document prepared by Kramer
solely on the strength of Kramer's repeated and unequivo-
cal assurances that Respondents would receive the Union's
approval of the leasing of cabs. Kramer on the other hand
testified: "As far as the leasing it was definitely understood
that the entire proposition that had been advanced so
assiduously by the company had to be withdrawn in order
to get a contract."
I credit Sawyer's version of the incident. First, the
written document is ambiguous . Although signed by both
men, it does not expressly purport to be an agreement; for
all that appears in the document itself it might be merely a
summary of the subjects the two men discussed. Addition-
ally, the critical first item is unintelligible. Since it appears
that neither Respondent nor the Union had presented any
written proposal concerning leasing, it is impossible to say
what "leasing proposal" was subject to "withdrawal." At
that time Respondents were demanding some provision
expressly granting the right to lease , while the union
representatives in negotiations were calling for an express
prohibition. Since Kramer had drafted the document, it
3 Kramer's testimony was: 'As far as I was concerned if he wanted to
lease cabs I was sure he could set up a corporation and buy cabs. His
problem then would be to get medallions for those cabs in order to lease
them The medallions was all I was concerned with, not the cabs. As
long as the medallions didn't follow the cabs whatever he had was his
problem " Kramer apparently was not so expansive in talking to Sawyer.
4 Representative of Sawyer's testimony about his meeting with Kramer is
the following: "[Kramer said] ' I think you are sympathetic with labor. And
you have the interest of your drivers at heart because of your early
must be construed strictly against him. Further, since the
two remaining articles covered increased benefits to the
employees, it is more reasonable to infer that withdrawal of
the Union's demanded prohibition of leasing constituted
the quid pro quo in a mutual understanding. As Sawyer
indicated, the second and third items were offered as
"sweetening" in exchange for leasing authority. At most it
is possible that Sawyer was "withdrawing" Respondents'
"proposal" for express approval of leasing in favor of a
more tactful provision, as recommended by Kramer.
Having carefully observed the witnesses and analyzed the
evidence as a whole, I credit Sawyer's testimony that he
signed the July 29 document because he "trusted" Kramer
and "took the man's word." I believe that Kramer sought
out Sawyer, i.e., went over the head of Respondents'
designated bargaining agents, and intentionally drafted the
ambiguous document of July 29 as a potential tool for
taking unfair advantage in subsequent negotiations. This
conclusion finds added support in the fact that, although
he affirmatively solicited a signed document from Sawyer
in July, he did not insist on a signed contract at the end of
the negotiations in December because, in his words, "If I
don't trust [a man's] word, I can't trust his signature and
know what he writes."
As previously stated, negotiations continued through the
summer of 1975. In November Respondents offered a total
contract. The union membership rejected the Companies'
proposal and voted strike authorization, the date of the
strike to be determined later.
Thereafter, on December 6, a negotiating session was
held. At the outset of the meeting, the union representa-
tives asked McCarty and MacOdrum if they had full
authority to reach a final agreement and they answered in
the affirmative. At that time leasing was one of several
unresolved issues. Pursuant to his earlier commitments to
devise mutually acceptable "non-inflammatory" language
on the subject, Kramer proposed the following:
No medallion or vehicle owned by the Company may
be operated by other than a member of the Barg ;'ring
Unit under the terms contained in the Bargaining
Agreement.
This language was drafted by Kramer alone and had not
previously been seen by either the Union's or Respondents'
representatives. According to Union Business Agent
Donald Mullin, the union committee caucused and then
announced its acceptance of the language. Mullin also
testified that Respondents' representatives said "the com-
pany could live with that clause." Both MacOdrum and
McCarty denied that any such statement was made.
McCarty testified that he expressed "reservations" about
the language and said that he wanted to have it reviewed
by counsel. MacOdrum testified that he said he wanted to
antecedents and beginning,' and he was very complimentary to me. And I
regarded him as a friend , and one who was really a constructive labor leader
who wanted to see Checker survive."
5 Kramer apparently agreed that these proposals were generous,
testifying : "We went into the other two areas, one the contribution and the
third was the utilization of taxicabs In fact , it was his percentage of taxicab
utilization that I accepted which would have been, as I pointed out 'o him,
more generous than I would have settled for."
642 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
take the language to Sawyer for review . Mullin maintained
that nothing was said about review but he did concede that,
as is customary in all negotiations , MacOdrum and
McCarty on several occasions indicated that any agree-
ment reached at the bargaining table had to be "ratified"
by management , i.e., by Sawyer.
It appears that Respondents ' representatives did raise a
question about the Union's insistence on retaining in the
agreement the following provision from prior contracts:
No agreement shall be made between drivers
individually or collectively and the coANY which
shall conflict with the terms and conditions of the
Agreement.
However, the evidence tends to establish that Respondents'
representatives did not press the issue and appeared to
acquiesce in Kramer 's proposal.
Another negotiating session was held the next day,
December 7 . Apparently the leasing issue was not dis-
cussed , but the Union again sought assurance that
MacOdrum and McCarty had authority to reach final
agreement . No complete agreement on a contract was
reached . Thereupon the Union scheduled a membership
meeting for the afternoon of Sunday , December 15, when a
date was to be set for the commencement of the strike
previously authorized.
Respondents then sought a negotiating session, which
was held on the morning of December 15. At the
December 15 meeting a final contract was agreed to,
subject to ratification by the union membership . However,
at that time the entire contract had not been reduced to
writing so there was no signed agreement.
At the union membership meeting on the afternoon of
December 15 the terms of the contract, including the
"leasing" provision , were explained by Mullin and,
apparently , by Kramer. The union membership was
informed that the contract would not permit leasing. The
membership ratified the agreement . When informed of this
fact, Respondents ' representatives expressed great pleasure
and relief that the threat of a strike had ended. Respon-
dents forthwith put the terms of the agreement into effect.
However, they have not as yet engaged in leasing.
At this point it is appropriate to review the history of the
legalization of leasing. During the summer of 1974 Sawyer,
on behalf of the taxicab association and the Respondents,
had continued his campaign for legalization . To this end he
had numerous meetings with the mayor of Boston . Sawyer
testified that sometime around the end of July the mayor
offered him the following "package deal": If the Compa-
nies agreed to give a 20 -percent rate discount to the elderly,
they would be granted a rate increase and the right to lease
cabs . Sawyer testified that, with that agreement made
between him and the mayor, there was only the "formality"
of a public hearing before the police commissioner, who
technically had sole regulatory jurisdiction over the taxi
industry. Such public hearing was held by the commission-
er on December 9. Representatives of the Union appeared
and spoke against the rate increase and the leasing
authorization . They maintained that , as Kramer had earlier
said to Sawyer , leasing of cabs was a device to break the
Union . Sawyer gave his assurance that he had no such
intention and that he would lease only to union members.
In response to the police commissioner 's request for written
assurance , Sawyer sent him a letter saying , in part:
At the meeting I made certain commitments for
Checker Taxi Company, as follows : # 1. Leasing would
not be compulsory . #2. Membership in good standing
of Local 496 will be a condition for leasing from
Checker Taxi Company of Boston . # 3. A contribution
of $1.00 will be paid into the treasury of the Checker
Taxi drivers pension fund daily for each lease or rental.
The letter then assured "that these commitments will be
carried out as agreed ." The Union was sent copies of that
letter . Thereupon , on December 9, 1974, or within a few
days thereafter , cab leasing was officially legalized in
Boston.
In January 1975 the Union sent Respondents a typewrit-
ten full contract for signature . Also in January Respon-
dents prepared a typewritten copy of the entire agreement
but did not send it to the Union . A copy of Respondents'
version was sent to Sawyer, who by that time had left for
his annual winter sojourn in Florida . A copy was also sent
to David G. Hanrahan, Respondents' counsel . However,
Hanrahan was unable to give his immediate attention to
the matter because he was engaged in a murder trial, which
did not end until around the end of March.
Under date of January 29 the Union wrote to Respon-
dents expressing the belief "that management does not
want to live up to [the] agreement" reached in December.
The Union demanded a signed contract by February 14.
None was forthcoming . The Union made several oral
requests without success . On April 4 the Union wrote to
Respondents repeating its request for a signed contract, to
be executed by April 11. On April 9 McCarty informed the
Union that "the matter has been referred to legal counsel
and is currently having our attention ." Then, on April 11,
Attorney Hanrahan wrote to the Union. In his letter
Hanrahan stated that he understood that on December 15
"it was agreed that both groups would report to their
respective constituents ." Hanrahan further stated that he
understood that it had been agreed on December 15 that
the Union would not interfere with Respondents ' leasing
cabs and that Kramer had promised that result if
Respondents accepted his proposed language . The letter
concluded : "Therefore, the company insists that this point
be clarified in the contract so that the document will fully
represent the intention of both parties on the question of
leasing before the document is executed ." This was the first
indication of disagreement as to the final contract. The
Union filed its charge on April 14.
Counsel for the parties discussed the matter in June or
July, when they were negotiating a collective -bargaining
agreement covering inside help, a bargaining unit separate
CHECKER TAXI COMPANY
from the drivers. At that time Respondents produced their
typewritten version of the agreements However, at the
hearing, union counsel stipulated that, although Respon-
dents' version contained the Kramer language, Respon-
dents expressly preserved their contention that no agree-
ment had been reached that Respondents could not lease
cabs.
C. Discussion and Conclusions
In its brief the Union argues at some length that
MacOdrum and McCarty had authority to enter into the
contract in December 1974 without obtaining further
approval from Sawyer or from counsel . While there is a
conflict of evidence as to whether they expressed any
intention or need to have the contract reviewed, it will here
be assumed that they were fully empowered to make a final
agreement in December. However, their authority to bind
Respondents is not a decisive, nor even a very relevant,
issue . The real question is what agreement, if any, they
actually did reach on behalf of Respondents.
There is no room for doubt that the collective-bargaining
agreement with Kramer's "leasing" language would pro-
hibit Respondents' leasing cabs . The recognition clause
defines the unit as "all of the co>.wANY's employees who
are engaged as Taxicab Drivers." And Kramer's proposed
language prohibits the operation of Respondents' vehicles
or medallions "by other than a member of the Bargaining
Unit under the terms contained in the Bargaining Agree-
ment." Thus it is clear that under that language no lessee,
i.e., no nonemployee, could operate the cabs. This result is
reinforced by the provision forbidding agreements between
the Company and drivers "which shall conflict with the
terms and conditions of the Agreement."
While the language is clear when carefully read, it would
be possible for a nonlawyer, on a superficial reading, to
understand it as meaning that only union members would be
permitted to drive Respondents' cabs. Indeed, Sawyer
indicated that he so understood it. When asked if he
objected to the language, he replied: "I don't have any
objection, `no medallion or vehicle owned by the company
may be operated by other than a member of the bargaining
unit,' which is the union ." Respondents had from the
beginning voluntarily agreed that cabs would be leased
only to members of the Union. Sawyer and McCarty
apparently had doubts about the added phrase "under the
terms contained in the Bargaining Agreement." Their
doubts were sufficient to prevent signing the written
agreement without review by counsel.
In view of Kramer's repeated assurances to MacOdrum,
McCarty, and Sawyer that he would produce "non-inflam-
matory" language which would not prohibit leasing and
Respondents' granting of substantial concessions in return,
they cannot be seriously faulted for failing immediately to
recognize the true purport of the language . This observa-
tion is particularly valid when it is recalled that the
agreement was reached under the threat of an imminent
strike, which had already been authorized by the union
membership.
6 There were some differences between the Union 's and Respondents'
written versions However, such variations are not now in dispute , and in its
643
In its brief the Union states that "the finally accepted
language did indeed represent a compromise from the
Union's demand for even stronger language." While more
direct and readily understandable language could have
been written, it is difficult to conceive of any "stronger"
language for effectuating the Union's desire. Even more
significant, however, is the indisputable fact that Respon-
dents had no need or desire for weak or tactful language.
Bowdlerization would be required only to conceal the true
purport of the agreement from the employees or from the
Employers. Respondents had no aversion to or anxiety
concerning the word "leasing." It was only to the Union
that "leasing" was an emotionally charged concept. If
Respondents had agreed to substance to a contractual
prohibition of leasing, there would have been no reason for
any circumlocution.
In his dealings with Sawyer, MacOdrum, and McCarty,
Kramer had indicated that he would, in effect, "slip"
leasing authority by the employees, without using the
specific word "leasing," which would be an immediate
irritant to the employees. It could not reasonably be argued
that Respondents are somehow estopped because they
joined Kramer in a plan to deceive the union membership.
Respondents did not stand in a fiduciary relationship to
the employees. It was clearly understood that the contract
was subject to ratification by the union membership and
Respondents could reasonably rely on Kramer, as the
Union's bargaining agent, not to mislead the membership.
Respondents had reason to believe that the union member-
ship were averse only to "compulsory" leasing. Since
Respondents did not want to abolish employment in favor
of leasing but only to supplement its employed personnel,
they could reasonably hope that Kramer could obtain
employee acceptance of a provision satisfactory to Respon-
dents. His skill at winning people's trust had been amply
demonstrated.
The fact is that Kramer, in his zeal for success in
obtaining a contract, was playing a duplicitous game.
While informing the union membership that the contract
forbade leasing, he knowingly led Respondents to believe
the contrary. There is not a shred of evidence that he ever
had reason to believe Respondents had retreated from their
substantive demand.
The Union's brief contains no serious argument that
Kramer was not guilty of active misrepresentation. Rather,
the major burden of its argument is:
More significantly, the Union submits that even if
the Company were sincerely under the misconception
that the provision in question would still allow it to
lease, the fact that there is no dispute as to the specific
language involved precludes a Board finding that there
was no valid agreement.
This contention, placing a "pound-of-flesh" technicality
above justice and equity, has been soundly rejected by the
Board, which recognizes the statutory obligation of mutual
good faith as a cornerstone of labor-management relations.
In Industrial Engineering Co., Inc., 173 NLRB 77 (1968),
brief the Union says that it "has at all times stood willing to sign the
Company draft."
44 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Industrial Engineering, a building contractor, had for some
time executed association collective-bargaining agree-
ments , although it was not a member of the association. At
one time the contractor had also signed agreements not to
subcontract to nonunion employers but had thereafter
refused to enter any such subcontracting agreement. One
year, when negotiations with the association were very
extended, the union demanded that individual contractors
sign interim agreements to avoid being picketed. Under
this pressure the company signed an interim agreement
committing itself to adopt any contract later reached by the
union with the association . The subsequent association
agreement contained a subcontracting clause . When the
employer refused to execute the association agreement
because of the subcontracting clause , a complaint was
issued alleging violation of Section 8(aX5) and seeking to
have the company ordered to sign the final agreement. The
Board adopted the decision of Trial Examiner Vose
dismissing the complaint . The rationale of that Decision is
so clearly apropos to the present case as to warrant the
following extensive quotation ( 173 NLRB at 81):
In my opinion , the Board should stay its hand in this
case . While the General Counsel regards that portion of
Section 8(d) of the Act requiring the "execution of a
written contract incorporating any agreement reached"
as compelling a finding of a refusal to bargain in this
case, I do not regard it as necessarily being applicable
to the instant situation. For this provision .. .
contemplates a consciously arrived at understanding
and a refusal thereafter to reduce it to writing. That
plainly is not the situation here . President Davis
obviously had no idea that the A.G.C. and the Union,
contrary to past practice, would seek to incorporate in
the regular 3-year trade agreement the subcontracting
provisions which were already in effect by virtue of the
July 6, 1966, supplemental agreement . While Davis
may not have exercised the best judgment in signing an
agreement which was susceptible of being construed as
a wide-open commitment to sign whatever agreement
was reached between the Union and the A.G.C., there
can be no doubt that Davis in signing the Interim
Agreement did not contemplate agreeing to limiting
subcontracting to union subcontractors . The Union
knew that Davis had repeatedly refused to agree to
such a subcontracting provision previously, and had
refused even when faced with the threat of picketing
.... Thus the Union had ampl[e] basis for anticipat-
ing that Davis would not have signed the Interim
Agreement if the possibility of including a subcontract-
ing clause in the final agreement had been broached at
the time the Interim Agreement was signed.
Plainly there was no meeting of the minds between
the Union and the Respondent on the subcontracting
issue at the time the Interim Agreement was signed.
The Union's effort to use the Interim Agreement which
Davis had unwittingly signed as the means of obtaining
the one provision which the Union knew the Respon-
dent had steadfastly refused to grant to it in collective
bargaining in the past hardly reflects the good faith
which the Act requires of parties to the collective-
bargaining process. It should be noted that we are not
concerned here with a recalcitrant employer who is
acting in bad faith but one who through the years has
bargained in good faith with the Union as the exclusive
representative of its carpenters and apprentices, and
which stands ready today to fulfill the commitment
which it thought it was making when it signed the
Interim Agreement, that is by signing the A.G.C.-
Union agreement , omitting only ... the provision
limiting subcontracting to union subcontractors.
s s • s
I conclude that the Board should not permit
its processes to be utilized by the Union to enable it to
saddle the Respondent with a contract provision
limiting its choice of subcontractors in a way which the
Respondent sincerely believes will put it out of
business . To do so, in my opinion , would subvert rather
than effectuate the policies of the Act.
The rationale of Industrial Engineering is a fortiori
applicable to the present case, where it has been found that
the Employers' misunderstanding was induced by active
misrepresentation by the union representative . And the
result is not affected by the fact that they may have been
guilty of negligence or poor judgment in accepting
Kramer's language without minute analysis . Cf. United
States Postal Service, 204 NLRB 292, 294 (1973).
The result would be the same even if Kramer had not
been guilty of conscious misrepresentation . See K Jacobson
& R Haberman d/b/a J-H Electric, 178 NLRB 690 (1969),
affd. sub nom . International Brotherhood of Electrical
Workers, Local Union No. 68, AFL-CIO v. N.L.RB., 448
F.2d 1127 (C.A.D.C., 1971). In that case the employer had
signed a letter of assent to be bound by an association
contract to be negotiated . The Board held that, notwith-
standing the letter of assent , it was understood that,
following past custom, a separate agreement would be
negotiated for the respondent and other employers in the
same area . Accordingly, the Board dismissed a complaint
seeking to compel the employer to sign the association
contract . The Board's decision was based on its finding
(178 NLRB at 691 ) 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." In affirming, the
court of appeals said (448 F .2d at 1140), "the question is
not what the Letter of Assent itself said , but what the
Union understood . . . the Union did not understand the
situation to be controlled by the literal wording of the
Letter of Assent ...: . Similarly , in the present case the
question is not what the oral agreement said but rather
what Respondents understood. Kramer certainly under-
stood that they were insisting on the right to lease cabs.
Respondents cannot be made to bear the burden of
Kramer's conduct in misleading the union membership. It
may also be noted that the union members have not
actually suffered any detriment. Respondents have put all
the other terms of the contract into effect and have not as
yet embarked on leasing cabs. In their brief they argue only
that "the parties should be sent back to the bargaining
CHECKER TAXI COMPANY 645
table so that the question can be decided through the open,
give and take of collective bargaining."
It would serve no useful purpose to analyze the
authorities cited by the Union.? They all involve, in one
way or another, actual or claimed agreement on substan-
tive terms; none of them concerns asserted agreement as to
wording without a meeting of the minds as to substance,
which is the situation in the present case.
Brief notice may be taken of the Union's apparent
argument that Respondents must execute the contract and
rely on arbitration thereunder to seek relief. Such conten-
tion is manifestly untenable. Arbitration is not available to
avoid, rescind, or alter an agreement, which is what
Respondents would need if they were to sign the agreement
in its present form. Cf. Amalgamated Clothing Workers of
America (Henry I. Siegel Co. Inc.) v. N.L.R.B., 324 F.2d 2:8
(C.A. 2, 1963), cited by the Union. In that case a union
filed a charge alleging that an employer violated Section
8(a)(5) of the Act by refusing to include in its current
contract an express provision concerning the existing
customary 12-percent incentive factor. The Board dis-
missed the complaint, holding that the incentive factor was
implicit in the contract as written by the employer. Henry I.
Siegel Co. Inc., 140 NLRB 1292 (1963). In reversing, the
court of appeals noted, with apparent approval, the union's
contention that "if a dispute over new rates should have to
be referred to arbitration, there is no assurance, particular-
ly in view of the parol evidence rule, that the arbitrator
would decide the case by reference to the contemporane-
ous oral agreement. " A fortiori an arbitrator could not : efer
to contract negotiations to alter terms of a contract which,
as here, are not on their face reasonably susceptible to
more than one interpretation. Cf. Bellacicco & Sons v.
r Brief reference should, however, be made to Schlecht v. Hiatt, 271
F.Supp 644 (D.C. Ore, (1967)). The Union fails to note that that decision
was reversed on jurisdictional grounds, with the Court of Appeals for the
Ninth Circuit expressly declining to pass on the district court's treatment of
the merits. 400 F.2d 875 ( 1968). In that case the union sought to enforce a
written contract. The district court found that the matters in dispute had not
been discussed in detail during the negotiations and the employer was given
a full opportunity to read the contract before signing. In holding the
employer bound, the court emphasized that the union representatives "did
Bakery Workers, 92 LRRM 3694, 3696 (N.Y.Sup.Ct.,
1976): "Arbitration cannot, change the written contract
... for in order to do so, it would have to go completely
outside the agreement signed by the parties and would be
obliged to rely upon oral testimony relating to the prior
agreement negotiations and alleged oral `understand-
ings.' " See also Couch v. Prescolite Manufacturing Corpo-
ration, 191 F.Supp. 737 (D.C.Ark., 1961).
On the foregoing considerations, I shall recommend
dismissal of the complaint in its entirety.
CONCLUSIONS OF LAW
1. Checker Taxi Company and Red Cab Company,
Inc., are, and have been at all times material herein,
employers engaged in commerce within the meaning of
Section 2(2), (6), and (T; of the Act.
2. Taxicab, Bus, Funeral Drivers & Chauffeurs Union
Local No. 496, a/w International ;irotherhood of Team-
sters, Chauffeurs, Warehousemen and Helpers of America,
is, and has been at all times material herein, a labor
organization within the meaning of Section 2(5) of the Act.
3. It has not been established that Respondents have
engaged in any unfair labor practices warranting issuance
of a remedial order.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
Act, I hereby issue the following recommended:
ORDERS
The consolidated complaint in this matter is dismissed in
its entirety.
not make any false or misleading statements" and the employer had
voluntarily failed to read all the provisions.
8 In the event no exceptions are filed as provided by Sec 102.46 of the
Rules and Regulations of the National Labor Relations Board , the findings,
conclusions , and recommended Order herein shall, as provided in Sec.
102.48 of the Rules and Regulations , be adopted by the Board and become
its findings, conclusions , and Order, and all objections thereto shall be
deemed waived for all purposes.