Crane Sheet Metal, Inc.

National Labor Relations Board - Board Decisions

Mar 31, 1980

248 N.L.R.B. 75 (N.L.R.B. 1980)

CRANE SHEET METAL, INC. 75
Crane Sheet Metal, Inc. and Sheet Metal Workers
Local Union No. 2
Hartley Sheet Metal Company, Incorporated' and
Sheet Metal Workers Local Union No. 2. Cases
17-CA-7902 and 17-CA-7903
March 3, 1980
DECISION AND ORDER
BY CHAIRMAN FANNING AND MEMBERS
JENKINS AND PENELLO
On November 7, 1979, Administrative Law
Judge Ivar H. Peterson issued the attached Deci-
sion in this proceeding. Thereafter, the General
Counsel filed exceptions and a supporting brief,
and Respondents filed answering briefs, cross-ex-
ceptions, and briefs in support of their cross-excep-
tions.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the Na-
tional Labor Relations Board has delegated its au-
thority in this proceeding to a three-member panel.
The Board has considered the record and the at-
tached Decision in light of the exceptions and
briefs and has decided to affirm the rulings, find-
ings, and conclusions of the Administrative Law
Judge only to the extent not inconsistent herewith.
The issue presented here is whether Respondents
violated Section 8(a)(5) of the Act by disavowing a
contract negotiated by an employer association of
which they were members. The General Counsel
alleges and Respondents deny that the Association
was authorized to negotiate a binding agreement
for them.
Respondents are sheet metal contractors located
near Pittsburg, in southeast Kansas. Prior to 1975,
Respondents had bargained collectively with Local
475 of the Sheet Metal Workers International
Union. In 1975 Local 475 merged with Sheet Metal
Workers Local Union No. 2 (the Union herein).
The Union's geographical jurisdiction had been
generally coextensive with that of Sheet Metal and
Air Conditioning Contractors National Association,
Inc., Kansas City Chapter (SMACNA-KC or the
Association), with which it bargained in a multiem-
ployer unit consisting of the Association's employ-
er-members. SMACNA-KC's bylaws authorize it
to negotiate for its members and to bind them to
the labor agreements it executes.
Upon the Union's accession to Local 475's
former territory, SMACNA-KC, at the Union's
suggestion, extended its geographical limits to
remain coextensive with the Union's. SMACNA-
' The Administrative Law Judge corrected the company name pursu-
ant to a motion made at the hearing. However, the company name was
further corrected at the hearing to that appearing in the present caption.
248 NLRB No. 15
KC approached southeast Kansas contractors, in-
cluding Respondents, about becoming members.
Respondents agreed.to allow SMACNA-KC to ne-
gotiate with the Union for them in 1975, on a trial
basis, with the reservation, known to the Union,
that any agreement negotiated would be subject to
their approval. SMACNA-KC negotiated an
agreement, running until June 30, 1977, and Re-
spondents approved it. Later in 1975 Respondents
each sent the Association $250 as a membership
fee. SMACNA-KC did not send Respondents
copies of its bylaws. Its executive director, Robert
Baker, told Respondents that they need not pay pe-
riodic association dues because they were not lo-
cated in its immediate service area. He also in-
formed them that the next contract would be one
document covering both the Kansas City area and
the southeastern area.
In early 1977 SMACNA-KC sent the Union a
list of its members for which it would be bargain-
ing in the upcoming contract negotiations. Not
having added Respondents' names to the list, Ex-
ecutive Director Baker had a secretary type at the
bottom of the list the addition, "All South Area
Contractors." SMACNA-KC and the Union began
bargaining over the terms and conditions to govern
both the Kansas City area and the southern area,
also known as the southeastern, or Pittsburg, area.
On June 22, 1977,2 Baker met with Respondents
and asked them if they wanted him to negotiate for
them. They told him that they did, but again limit-
ed his authority to negotiating an agreement sub-
ject to their approval. This time, however, the
Union was not informed of such a limitation.
A few days later, SMACNA-KC and the Union
reached an agreement ratified by the SMACNA-
KC membership on June 25, covering both the
Kansas City and the southeastern areas. Respon-
dents were not notified of the ratification meeting. 3
On July 1, SMACNA-KC sent Respondents copies
of the wage scale negotiated for their area. Respon-
dents informed SMACNA-KC that they did not
approve the contract. At a further meeting held on
July 19, Respondents, SMACNA-KC, and the
Union attempted unsuccessfully to reach a separate
agreement to accommodate Respondents' difficul-
ties with the negotiated agreement.4
a All further dates are in 1977.
' It is not clear from the record whether ratification was understood to
be a prerequisite to execution of the contract and, if so, what kind of vote
was required for ratification. It is clear from the bylaws, however, that
approval did not have to be unanimous.
4 According to SMACNA-KC Executive Director Baker, another sep-
arate agreement covering wage rates for light commercial and residential
jobs was still to be negotiated. This does not affect the legal status of the
negotiated agreement. Joseph McDaniel, an Individual Proprietorship d/b/a
Custom Colors Contractors, 226 NLRB 851, 854 (1976).
CRANE SHEET METAL, INC
76 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
The Administrative Law Judge concluded that
Respondents never manifested an unequivocal in-
tention to be bound by the Association's negotia-
tions with the Union. He found that, not having re-
ceived copies of the bylaws, Respondents were un-
aware of the fact that SMACNA-KC membership
carried with it complete delegation of bargaining
authority and they never assented to such a delega-
tion. Therefore, he reasoned, Respondents can be
held only to the limited authority they gave to the
Association. In the Administrative Law Judge's
view, Respondents' failure to communicate such a
limitation of authority to the Union was irrelevant
because Respondents did not, by their own con-
duct, clothe the Association with full authority.
We view the situation differently. There is no
question of the lack of timely communication to
the Union of a withdrawal of authority from the
Association. The sole issue, we agree with the Ad-
ministrative Law Judge, is whether the Association
was clothed with authority to bind Respondents in
the first place. The Association had negotiated for
Respondents in the past, albeit on a trial basis and
with limited authority. When, in 1977, the Associ-
ation truthfully informed the Union that the "south
area contractors" (including Respondents) had
become SMACNA-KC members, the Union was
justified in concluding that the trial status of the
Association's authority during the prior negotia-
tions had been converted into a grant of the full
authority which was normally associated with
membership and which the bylaws expressly pro-
vided. Such apparent authority is sufficient to bind
Respondents to an agreement reached by the Asso-
ciation absent timely withdrawal. See Lutheran
Homes and Hospitals, Inc. d/b/a Fairlawn Care
Center, 233 NLRB 1025 (1977); Homer Gale and
Howard Gale, Co-Partners, d/b/a American Sign &
Neon Company, 176 NLRB 1049, 1052 (1969); Ray
Hopman d/b/a Ray Hopman Plumbing & Heating,
174 NLRB 403, 406 (1969).5 Thus, where no limi-
tation on that authority is communicated to the
other party until negotiations have concluded and
the other party reasonably thinks it has a binding
contract, a belated disavowal of authority to bind a
party having a duty to bargain cannot relieve such
a party of its obligation to honor the contract,
whether the authority relied on is actual or only
apparent. See University of Bridgeport, 229 NLRB
1074 (1977); The Anaconda Company, 224 NLRB
1041, 1049, 1051 (1976); Welsh Aircraft, Inc., d/b/a
I The Administrative Law Judge concluded that Respondents were
not bound by the Association's bylaws because they were not aware of
them. Whatever effect Respondents' ignorance of the bylaws might have
on Respondents' rights as against the Association, however, such a de-
fense is not persuasive as against a third party who reasonably could rely
on their presumptive validity.
Welsh Plastics, Ltd., a wholly-owned subsidiary of
Standard Industries, Inc., 219 NLRB 93, 96, fn. 5
(1975). That the Association, by going to Respon-
dents after negotiations began and requesting au-
thority to negotiate for them, exhibited some doubt
as to the authority it then possessed does not
change the result. It is not the agent's subjective
belief as to the extent of his authority, but the ap-
parent authority he exhibits to third parties, that
controls the principal's responsibility. See Sunshine
Hotels Limited d/b/a Outrigger-Maui, 226 NLRB
31, 32 (1976). In short, the actions of an agent who
is clothed with authority, even when he misrepre-
sents to third parties crucial facts pertinent to the
basis or extent of his authority, may still bind the
party having the duty to bargain. See American
Sign & Neon Company, 176 NLRB at 1052. Noth-
ing in the instant case justifies relieving Respon-
dents of the responsibility to honor the agreement
negotiated in their behalf by their agent. Therefore,
we find that Respondents violated Section 8(a)(5)
of the Act by their refusal to honor and abide by
the collective-bargaining agreement entered into
between SMACNA-KC and the Union. 6
CONCLUSIONS OF LAW
1. Respondents are employers engaged in com-
merce within the meaning of Section 2(6) and (7)
of the Act.
2. The Union is a labor organization within the
meaning of Section 2(5) of the Act.
3. The following employees constitute a unit ap-
propriate for the purposes of collective bargaining
within the meaning of Section 9(b) of the Act:
All employees of the employer-members of
SMACNA-KC, including Respondents' em-
ployees, engaged in, but not limited to, the
manufacture, fabrication, assembling, handling,
erection, installation, dismantling, conditioning,
adjustment, alteration, repairing and servicing
of all ferrous or nonferrous metal work of U.S.
#10 gauge or its equivalent or lighter gauge
and all other materials used in lieu thereof and
of all air-veyor systems and air handling sys-
tems regardless of materials used including the
setting of all equipment and all reinforcements
in connection therewith; all lagging over insu-
lation and all duct lining; adjusting of all air-
handling equipment and ductwork in connec-
tion with testing and balancing; the prepara-
tion of all shop and field sketches used in fab-
rication and erection, including those taken
The Union's willingness to attempt an accommodation of Respon-
dents' difficulties with the negotiated agreement after it became effective
does not, in the circumstances presented here, constitute a waiver of its
right to enforce the agreement.
CRANE SHEET METAL, INC. 77
from original and engineering drawings or
sketches; and all other work included in the
jurisdictional claims of Sheet Metal Workers'
International Association.
4. At all times material herein, the Union has
been, and is, the exclusive representative of all em-
ployees in the above-described unit for the pur-
poses of collective bargaining.
5. By their failure to honor and abide by the col-
lective-bargaining agreement entered into between
SMACNA-KC, as their agent, and the Union, ef-
fective July 1, 1977, Respondents have engaged in
and are engaging in unfair labor practices within
the meaning of Section 8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices affect
commerce within the meaning of Section 2(6) and
(7) of the Act.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor Re-
lations Board adopts as its Order the recommended
Order of the Administrative Law Judge and
hereby orders that the Respondents, Crane Sheet
Metal, Inc., Parsons, Kansas, and Hartley Sheet
Metal Company, Incorporated, Coffeyville,
Kansas, 7 their officers, agents, successors, and as-
signs, shall:
1. Cease and desist from:
(a) Failing and refusing to honor and abide by
the collective-bargaining agreement effective from
July 1, 1977, to June 30, 1980, between Sheet
Metal and Air Conditioning Contractors National
Association, Inc., Kansas City Chapter, and Local
Union No. 2, Sheet Metal Workers International
Association, Kansas City, Missouri.
(b) In any like or related manner interfering
with, restraining, or coercing their employees in
the exercise of the rights guaranteed by Section 7
of the Act.
2. Take the following affirmative action:
(a) Forthwith honor and abide by the agreement
described above in paragraph l(a).
(b) Give retroactive effect to the provisions of
that agreement to July 1, 1977, and make whole all
of their employees in the above-described bargain-
ing unit for any loss of wages and other benefits
which are provided for in that agreement, due to
the Respondents' failure to give effect to its terms,
with interest as set forth in Florida Steel Corpora-
tion, 231 NLRB 651 (1977). (See, generally, Isis
Plumbling & Heating Co., 138 NLRB 716 (1962).)
(c) Preserve and, upon request, make available to
the Board or its agents, for examination and copy-
' The Administrative Law Judge inadvertently reversed the locations
of the two Rspoplldents
ing, all payroll records, social security payment re-
cords, timecards, personnel records and reports,
and all other records necessary to analyze the
amount of backpay and benefits due under the
terms of this Order.
(d) Post at their respective places of business
copies of the attached notice marked "Appendix
A" 8 for Respondent Crane Sheet Metal, Inc., or
the attached notice marked "Appendix B" for Re-
spondent Hartley Sheet Metal Company, Incorpo-
rated. Copies of said notice, on forms provided by
the Regional Director for Region 17, after being
duly signed by that Respondent's authorized repre-
sentative, shall be posted by each Respondent im-
mediately upon receipt thereof, and be maintained
by it for 60 consecutive days thereafter, in con-
spicuous places, including all places where notices
to employees are customarily posted. Reasonable
steps shall be taken by Respondents to insure that
said notices are not altered, defaced, or covered by
any other material.
(e) Notify the Regional Director for Region 17,
in writing, within 20 days from the date of this
Order, what steps have been taken to comply here-
with.
8 In the event that this Order is enforced by a Judgment of a United
States Court of Appeals, the words in the notice reading "Posted by
Order of the National Labor Relations Board" shall read "Posted Pursu-
ant to a Judgment of the United States Court of Appeals Enforcing an
Order of the National Labor Relations Board."
APPENDIX A
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all the parties participat-
ed, the National Labor Relations Board has found
that we have violated the National Labor Relations
Act. We have been ordered to post this notice and
to abide by its terms.
WE WILL NOT refuse to honor and abide by
the collective-bargaining agreement effective
from July 1, 1977, to June 30, 1980, between
Sheet Metal and Air Conditioning Contractors
National Association, Inc., Kansas City Chap-
ter, and Local Union No. 2, Sheet Metal
Workers International Association, Kansas
City, Missouri.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the
exercise of your rights under the National
Labor Relations Act, as amended.
WlX will. forthwith honor and abide by the
above-described agreement.
CRANE SHEET METAL, INC~~~~~.
78 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
WE WILL give retroactive effect to the provisions
of that agreement back to July , 1977, and make
whole all employees for any loss of wages and
other benefits they lost because we failed to give
effect to the agreement, with interest.
CRANE SHEET METAL, INC.
APPENDIX B
NOTICE To EMPLOYEES
POSTED BY ORDER OF THE
NATIONAL LABOR RELATIONS BOARD
An Agency of the United States Government
After a hearing at which all the parties participat-
ed, the National Labor Relations Board has found
that we have violated the National Labor Relations
Act. We have been ordered to post this notice and
to abide by its terms.
WE WILL NOT refuse to honor and abide by
the collective-bargaining agreement effective
from July 1, 1977, to June 30, 1980, between
Sheet Metal and Air Conditioning Contractors
National Association, Inc., Kansas City Chap-
ter, and Local Union No. 2, Sheet Metal
Workers International Association, Kansas
City, Missouri.
WE WILL NOT in any like or related manner
interfere with, restrain, or coerce you in the
exercise of your rights under the National
Labor Relations Act, as amended.
WE WILL forthwith honor and abide by the
above-described agreement.
WE WILL give retroactive effect to the provi-
sions of that agreement back to July 1, 1977,
and make whole all employees for any loss of
wages and other benefits they lost because we
failed to give effect to the agreement, with in-
terest.
HARTLEY SHEET METAL COMPANY,
INCORPORATED
DECISION
STATEMENT OF THE CASE
IVAR H. PETERSON, Administrative Law Judge: On
October 3, 1977, Sheet Metal Workers Local Union No.
2, herein called the Union, filed an unfair labor practice
charge against Crane Sheet Metal, Inc., herein called Re-
spondent Crane, in Case 17-CA-7902, alleging that Re-
spondent Crane had committed unfair labor practices
within the meaning of the National Labor Relations Act,
as amended. On October 4, 1977, the Union filed a simi-
lar charge against Hartley Sheet Metal, Incorporated,'
herein called Respondent Hartley, in Case 17-CA-7903.
I The name of this Respondent appears as corrected at the hearing.
On December 21, 1977, the Regional Director for
Region 17 of the Board issued separate complaints in
each case against the involved Respondent. Under date
of December 28, 1977, both Respondents filed separate
answers denying the allegations of the particular com-
plaint.
Upon due notice, a hearing was commenced against
Respondent Crane on April 6, 1978, in Case 17-CA-
7902, in Parsons, Kansas. Both Respondents appeared
and were represented by counsel. At the opening of the
hearing, upon motion of counsel for Respondent Hartley,
and with the consent of Respondent Crane, without ob-
jection from the General Counsel, and over objections
by counsel for the Union, Case 17-CA-7903 was consoli-
dated with Case 17-CA-7902. The hearing in the con-
solidated case was held on April 6 and 20, 1978. All par-
ties were represented by counsel and were afforded full
opportunity to be heard, to participate, to introduce and
to meet material evidence, and to present argument and
briefs. Following the close of the hearing, the General
Counsel and both Respondent have filed briefs.2
On the entire record in the case, the briefs, and my ob-
servation of the witnesses, I make the following:
FINDINGS OF FACT
I. JURISDICTION
Crane Sheet Metal, Inc., a State of Kansas corpora-
tion, is engaged in heating, air-conditioning, and sheet
metal contracting business at its facility located at Par-
sons, Kansas. Respondent Crane, in the course and con-
duct of its business operations within the State of Kansas,
annually purchases goods and materials valued in excess
of $50,000 directly from sources located outside the State
of Kansas. Respondent Crane is an employer engaged in
commerce within the meaning of Section 2(2), (6), and
(7) of the Act.
Hartley Sheet Metal, Incorporated, a State of Kansas
corporation, is engaged in heating, air-conditioning, and
sheet metal contracting business at its facility located at
Coffeyville, Kansas. Respondent Hartley, in the course
and conduct of its business operations within the State of
Kansas, annually purchases goods and materials valued
in excess of $50,000 from sources located within the
State of Kansas, which sources, in turn, purchased such
goods and materials directly from sources located outside
the State of Kansas. Respondent Hartley is an employer
engaged in commerce within the meaning of Section
2(2), (6), and (7) of the Act.
1. THE LABOR ORGANIZATION
Sheet Metal Workers Local Union No. 2 is now, and
at all times material herein has been, a labor organization
within the meaning of Section 2(5) of the Act.
I Along with their briefs, counsel for the General Counsel and for
Hartley filed motions to correct the transcript in specified particulars. No
objection having been received, and all other proposed corrections ap-
pearing appropriate, the motion is granted except as to that requested for
p. 122. which appears to be incorrect.
CRANE SHEET METAL, INC. 79
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issue
The issue is whether the Respondents, in joining an
employer association, delegated unconditional authority
to the association to negotiate collective-bargaining con-
tracts binding on the Respondents without their subse-
quent approval.
I. SMACNA-KC
Sheet Metal and Air Conditioning Contractors Nation-
al Association, Inc., Kansas City Chapter (SMACNA-
KC, or the Association), is an association of sheet metal
contracting employers organized to promote the interests
of the industry and the public. In 1975, and for some
years prior thereto, SMACNA-KC was the collective-
bargaining representative of its members in the Kansas
City, Missouri, area, in a multiple-employer bargaining
unit. As such representative, the Association negotiated
and executed collective-bargaining contracts with Local
2 binding upon the members of the Association.
At all material times Robert Baker was executive di-
rector of SMACNA-KC and as such its agent and prin-
cipal executive officer.
2. The southeast Kansas, or Pittsburg, area
Coffeyville, Parsons, Chanute, and Pittsburg, Kansas,
are towns in southeast Kansas, in a region referred to in
the transcript as the Pittsburg, or southeast Kansas, area.
All those towns are situated within a radius of about 30
miles, some 100 or more miles south of Kansas City. Re-
spondent Crane is located in Coffeyville and Respondent
Hartley in Parsons. Oren Crane is president of Crane;
Emory Wise is president of Hartley.
3. Pre-1975 Pittsburg bargaining history
Prior to 1975 the Pittsburg area was in the jurisdiction
of Local 475 of Sheet Metal Workers International
Union, which is the parent International of both Local 2
and Local 475. In the spring of 1975, and for 10 or more
years prior thereto, there were three contractors in the
Pittsburg area who regularly contracted with Local 475.
These were the two Respondents, and Heating and Air
Conditioning, Inc., of Chanute, Kansas (later known as
Huxtable & Associates). The three contractors negotiated
with Local 475 as a group, or jointly, with the negotiat-
ing position of any two of them generally being adopted
as the position of the entire group. However, each con-
tractor retained final authority to approve or disapprove
any contract negotiated. Crane was normally their
spokesman. The resulting contract was a single docu-
ment, signed by each contractor individually. The last
such contract with Local 475, executed June 29, 1973,
was for the period July 15, 1973, to July 15, 1975. The
contract describes the "Employer" therein as "Sheet
Metal Contractors of Pittsburg, Parsons, Chanute, Cof-
feyville, Kansas, and Nevada, Missouri." The employer
signatories were the two Respondents; Heating and Air
Conditioning, Inc.; Ruskin Mfg. Co.; and K & L Metal
Shop, Inc. Where Ruskin and K & L are located is not
disclosed.
In 1975 contractual wage rates and other employee
benefits were lower in the Pittsburg area than in the
Kansas City area.
4. The merger of Local 2 and Local 475
In the spring of 1975, Local 475 merged into Local 2
and lost its separate identity. Thereafter, on or about
May 16, 1975, J. D. Foster, business manager of Local 2,
visited Oren Crane and Emory Wise and introduced
himself to them, saying that Local 2 was now represent-
ing the union in the Pittsburg area and would do the ne-
gotiating for its members. 3
5. The meetings between the Southern Contractors
and Foster and Baker; designation of Baker or
SMACNA-KC as bargaining representative
Around that time, or later, Business Manager Foster
suggested to Executive Director Baker that since Local
2 was assuming responsibility in southeast Kansas, and
SMACNA-KC's jurisdiction had theretofore been gener-
ally coextensive with Local 2's, that Baker accompany
Foster to the Pittsburg area and talk to the southern con-
tractors about affiliating with SMACNA-KC. Baker
agreed.
As a result, a meeting was held in Parsons, Kansas, on
or about June 19, 1975. Present at this meeting were
Foster, Crane, Wise, and Baker. Baker and Foster ex-
plained to Crane and Wise the function of SMACNA-
KC, and suggested that membership in it would be bene-
ficial to the southern contractors, including relieving
them of the task of negotiating, and they solicited the
Respondents' membership. Crane and Wise inquired
about the effect on them and on the area's negotiating
patterns amd wage scales of Local 2's entrance into the
picture. Crane and Wise were also interested in what
Local 2 would do with respect to organizing nonunion
shops in the area, there being a substantial amount of
nonunion competition. Foster assured Crane and Wise
that there would be separate negotiations and contracts
for southern Kansas. In addition, Foster drew a line,
which he referred to as the "Mason-Dixon" line, across
the map of southeastern Kansas, and said that everything
above the line would be Kansas City scale, everything
below it a lower southeast Kansas scale. As a result of
the discussions, Crane and Wise agreed to let Baker
handle negotiations for renewal of the 1975 contract on a
trial basis, subject to the approval of Crane, Hartley and
Mr. Huxtable of Heating and Air Conditioning, Inc.4
On July 1, 1975, in anticipation of the southern con-
tractors joining SMACNA-KC, Executive Director
Baker proposed to the Association's board of directors
I The findings herein as to statements and occurrences in meetings or
conversations between the southern contractors, Local 2 Representative
Foster, and Association Executive Director Baker, are based on the testi-
mony of Crane, Wise, and Baker, which is in substantial agreement in
material matters. Foster did not testify.
4Thus, Executive Director Baker testified, consistently with the testi-
mony of Crane and Wise:
JUDGE PETERSON (interrupting): In other words, you felt clear in
your mind that you did not have authonty to finally on your own.
commit the contractors?
THE WITNESS: That's right.
CRANE SHEET METAL, INC.
80 DECISIONS OF NATIONAL, LABOR RELATIONS BOARD
that, since coverage by SMACNA-KC was historically
coextensive with that of Local 2, that Association cover-
age be extended to the Pittsburg area. The board agreed
and approved appropriate amendments to the bylaws, an
action later accepted by vote of the Association's mem-
bership. 5
6. The 1975 negotiations
Thereafter Baker negotiated with Local 2 and reached
tentative agreement on a contract for the southeastern
area, which Crane, Wise, and Huxtable approved, but
which the area union members rejected in July 1975.
Baker and Local 2 continued negotiations, and in Sep-
tember a final agreement, approved by the southern area
contractors, was reached and signed by SMACNA-KC.
During the interim, separate negotiations were conduct-
ed between SMACNA-KC and Local 2 with respect to
the Kansas City area, which resulted in an agreement
signed July 15, 1975. At the request of Baker and Foster
the southern contract was made terminable June 30,
1977, the same termination date as that of the Kansas
City contract."
At some time during their conversations in 1975,
Baker told the southern contractors that the 1977 con-
tract would be one document covering both areas.
7. The Respondents join SMACNA-KC
In October 1975, after the signing of the September
agreement, pursuant to a request from Executive Direc-
tor Baker, Crane and Hartley sent checks in the amount
of $250 each to Baker in payment of the fee for member-
ship in SMACNA-KC. Baker advised Crane and Hartley
that they would not be required to pay periodic dues to
the Association because they were not located in its im-
mediate service area.
8. SMACNA-KC bylaws
The bylaws of SMACNA-KC contain the following
provision in article XIII:
2. Each member authorizes the Association,
acting through its Board of Directors to:
(a) Negotiate, conclude and execute labor con-
tracts in the name of the Association on behalf of,
and binding upon, its members.
Neither of the Respondents was given a copy of the
bylaws, and there is no evidence that the provision in ar-
ticle XIII, 2, was called to their attention, or that they
were aware of it until the hearing herein. Nor, until after
the later 1977 contract was signed, were they advised
that by authorizing Baker to negotiate they were waiv-
ing their own authority in the matter.
6 Though at the time of the hearing the Association's bylaws had not
been physically changed to conform to the actions of the board of direc-
tors and the membership, that factor is found not to be of any materiality.
I8 n the southern contract, signed September 15, 1975, by Wise, Crane,
and a representative of Huxtable, the employers were described, similar
to the 1973 contract, as "Sheet Metal Contractors of Pittsburg, Parsons.
Chanute, Coffeyville, Kansas, and Nevada, Missouri." However, xecu-
tive Director Baker testified that the only contractors covered by that
contract were Crane, Hartley, and Huxtable.
9. Events between 1975 and 1977
The Respondents did not receive a copy of their 1975-
77 contract until sometime in 1976. When they did re-
ceive it, they discovered certain items to which they had
not agreed: (1) an increase in payments to an industry
fund of 12 cents per hour, (2) an increase in payments to
a welfare fund, and (3) a change in the counties included
in the southern area (that is, a shift in the "Mason-
Dixon" line). President Wise expressed his displeasure
with these changes to Toney Chiaverini, Executive Di-
rector Baker's assistant, but neither he nor Crane dis-
avowed the contract-though they did not pay the in-
crease in industry fund payments.
In the period January to mid-March 1977, President
Wise told a number of his employees at Hartley that
when the contract expired (June 30, 1977) he would go
"non-union." On March 21, 1977, Wise sent a letter to
Local 2 stating that upon expiration of the contract he
intended to operate an open shop. Local 2 responded
with a letter stating that it desired to open negotiations
for a new contract to replace the present one. Respon-
dent Crane received a similar letter.
10. The 1977 negotiations
Respondent Hartley replied to the union letter of
March 21 with a letter dated April 1, 1977, requesting I
week's notice of any proposed negotiating meetings.
However, without further notice to the Respondents, ne-
gotiations for renewal of the expiring contract were un-
dertaken between SMACNA-KC and Local 2 beginning
in April 1977, in a unit including both the Kansas City
and the southern contractors.
Subsequently a meeting, arranged by SMACNA-KC
Executive Director Baker, was held on June 22, 1977, in
Parsons, Kansas. Baker, Huxtable, Crane, and Wise were
present. Baker asked the contractors whether they
wanted him to negotiate the contract for them, and of-
fered to leave the room while they discussed the matter.
The trio replied that that was unnecessary. Wise told
Baker that he had not paid dues to the Association and
asked whether Baker wished him to withdraw. Baker re-
plied that Wise should stay. The contractors then agreed
that Baker could negotiate a successor contract provided
he could reach an agreement satisfactory to them.
Baker advised the contractors of the state of negotia-
tions in Kansas City, and outlined the terms on which he
thought Local 2 would settle in the Kansas City area. On
wages, the figure was $2.425 cents with annual in-
creases-which represented an increase in the Kansas
City area wage rate of about 18 percent. The three
southern contractors indicated that Baker would have to
get a better wage arrangement than that for them.
The contractors then outlined the terms they wished
to be incorporated in a new 3-year agreement, adding
that this was not their first, but their "top" offer. 7
7 These terms were: (1) that a money increase of 1.98 over the term
of the contract be allocated as Local 2 wished, either to wages or fringe
benefits; (2) that any of the $1.98 allocated to wage increases be at 6-
month intervals, rather than yearly, as in the existing contract; (3) that
the contractors be given a more fasorahle light commercial or residential
wage scale on jobs $25,(XX) r less, in order to enable them to meet non-
Continued
CRANE SHEET METAL, INC. 81
Crane asked Baker to report back as to the status of
the negotiations, and Baker was told that any agreement
would be subject to the contractors' approval. Baker re-
sponded that he would present the contractors' proposals
to Local 2.8
On the following day, June 23, 1977, Baker telephoned
Crane and told him that Local 2 was considering their
offer and was "somewhat" receptive to it.
The record does not disclose what efforts Baker made
to secure acceptance by Local 2 of the southern contrac-
tors' proposals. It does disclose that on June 25, 2 days
after Baker's telephonic communication to Crane,
SMACNA-KC's membership ratified a contract effective
July 1, 1977, to June 30, 1980, between SMACNA-KC
and Local 2 covering both the Kansas City and the
southeast Kansas area. This contract contained none of
the terms proposed at the June 22 meeting by the south-
ern contractors. The southern contractors received no
notice of the ratification meeting, though they admittedly
were entitled to notice under Association procedures.
Although that contract continued to maintain a wage dif-
ferential between the Kansas City and the southern areas,
the differential was substantially reduced. The wage
costs provided in the new contract represented an in-
crease of about 26 percent for southern area contractors,
as compared with 18 percent for the Kansas City area.
So far as the record reveals, the first information re-
ceived by the southern contractors as to the state of ne-
gotiations after June 23 was a memo from the Associ-
ation to "All Pittsburg area contractors" dated July 1,
1977, stating that the Association had "successfully nego-
tiated a new agreement for all contractors." The memo
set out the new wage scale. The Respondents received
no further information as to the rest of the terms of the
contract until the hearing, except for what they may
have been told in this respect (and that is not disclosed)
at a meeting on July 19, 1977, to be described. The 1977
contract did not, however, cover all issues opened by the
southern contractors in their proposals of June 22. The
question of light residential or commercial terms was left
by SMACNA-KC and Local 2 to later negotiations.
Under date of July 5, 1977, Executive Director Baker
advised the Respondents by letter that they should make
their "desires" in such connection known to Union Rep-
resentative Krasovec, for Krasovec's "review and delib-
eration." I interpret that letter as indicating that further
negotiations on that subject on behalf of the Respondents
were being left by SMACNA-KC to the Respondents
themselves. So far as the record discloses, negotiations
on the issue on behalf of the southern area contractors
had not begun or resumed at the time of the hearing.
The Respondents refused to accept the new agree-
ment.
union competition (4) that there be a 50-mile free travel one, that is, a
zone in which travel pay is not required (5) that the old "Mason-Dixon"
line be restored The $1 9 wage increase represented an increase of
about I1 percent in the southern wage rate-the same percentage in-
crease as the $2 425 proposal represented in the Kansas City wage scale
8 The findings ais to June 22 meeting are from the testimony of Crane
and Wise, corroborated or nriot denied h Baker luxtable was not a wit-
ness
11. The July 19, 1977, meeting
On or about July 19, 1977, a meeting, termed by Ex-
ecutive Director Baker a "negotiating" session, was held
between Owen Crane, representing the southern contrac-
tors, Union Representatives Foster and Krasovec, and
Baker. Foster asked what could be done to get the
southern contractors to go along with the contract.
Crane presented their demands. Foster offered to reduce
the ratio of apprentices to journeymen in order to reduce
the southern wage cost, and to provide some relief on
travel costs, but indicated that he could do nothing
more. Crane took the matter under advisement. On the
following day Crane informed Baker that the contract
was not in his interest and declined to accept it. Wise did
likewise. The record does not disclose the position of
Huxtable. Baker replied, according to his testimony, that
"that was certainly [Crane's] prerogative," although
Baker felt that Foster's "offer was a good offer.""
B. Conclusions
Where an employer unequivocally designates an em-
ployer association as his bargaining representative in a
multiple-employer bargaining unit to finally conclude an
agreement for him, any contract approved by the associ-
ation is binding on the employer. Once such bargaining
negotiations have begun, an individual employer may
not, in the absence of unusual circumstances, withdraw
from the bargaining unit, or from his obligation to accept
any resulting agreement reached by his bargaining repre-
sentative. See, for example, Retail Associates, Inc., 120
NLRB 388 (1958); Hi-Way Billboards, Inc., 191 NLRB
244 (1971), 206 NLRB 22 (1973). As the statement of the
principle discloses, a prerequisite to holding the employ-
er bound is that "the members of the group have indicat-
ed from the outset an unequivocal intention to be bound
in collective bargaining by group rather than individual
action." Joseph McDaniel. an Individual Proprietorship d/
b/a Custom Colors Contractors, 226 NLRB 851, 852
(1976).
In the instant case, the Respondents did not evince an
unequivocal intention to be bound by the actions of
either Baker, SMACNA-KC, or the Kansas City em-
ployers. The only group action conceivably authorized
by the Respondents was of the southern area group, not
the Kansas City group. And the southern contractors
never reached agreement with Local 2; indeed they
never, as a group, negotiated with Local 2, except inso-
far as Baker may be said to have represented them.
In any event, the extent of the authority conferred by
the Respondents on Baker or SMACNA-KC was to ne-
gotiate on their behalf with Local 2 subject to approval
by the Respondents of any agreements reached. Thus,
neither Baker nor SMACNA-KC was given authority to
finally bind the Respondents without their specific con-
sent. As to the 1975 negotiations this is conceded. It is
equally true of the 1977 negotiations.
I Baker testified, and Crane denied, that Baker also told Crane that the
contractors were "bound by" the "bargaining rights," but that he was
"not going to fight them" A resolution of that conflict is neither neces-
sary nor of substantial assistance in resol ing the issue of the Respon-
dents' obligation to accept the 1977 contract
CRANE SHEET METAL INC.
82 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
That this was understood by Baker is apparent from
the statements and occurrences at the June 22, 1977,
meeting, set out heretofore.10 The Respondents' mem-
bership in SMACNA-KC was similarly conditioned,
even though not articulated. They were not advised that
the membership waived their right to finally approve
agreements negotiated by SMACNA-KC. They were
not provided with copies of the bylaws, there is no evi-
dence or suggestion that they were aware of article XIII,
2; nor were they told, despite Baker's knowledge of their
position, that acceptance of membership conferred final
authority on SMACNA-KC to conclude agreements for
them. The Respondents thus had no reason to apprehend
that by joining SMACNA-KC they conferred on it any
greater bargaining authority than they did when they au-
thorized it, through Baker, to negotiate the 1975 agree-
ment. In such a circumstance, acceptance of membership
in SMACNA-KC did not evidence a delegation of au-
thority by the Respondents to SMACNA-KC to bind
the Respondents to a bargaining agreement without their
'0 As has been seen, Baker admitted his lack of authority to bind the
Respondents in the 1975 negotiations. Despite his belief, expressed at the
hearing, that the situation was different in 1977 because the Respondents
were then members of the Association, Baker's objective conduct appears
to manifest the contrary. Thus, he admittedly came to the June 22, 1977,
meeting to ascertain whether the southern contractors wished him to ne-
gotiate their contract-a needless inquiry if the contractors had authorized
SMACNA-KC to negotiate an agreement for them. In addition, at that
meeting the contractors clearly authorized Baker merely to negotiate an
agreement on their terms, and in no event authorized him to conclude
one. The record discloses no protest or opposition by Baker at that meet-
ing to such limitations on his authority, no statement by him of his plena-
ry power to bind the Respondents, no indication of anything other than
acceptance of his limited role.
consent. There was therefore no necessity for the Re-
spondents to withdraw from SMACNA-KC in order to
prevent SMACNA-KC from concluding a contract with
Local 2 binding on the Respondents. In such circum-
stances, the fact that the bylaws of SMACNA-KC pro-
vide that its members authorize the organization to nego-
tiate and execute labor contracts binding on them is thus
not controlling.
That Local 2 had no knowledge of SMACNA-KC's
limited authority to bind the Respondents is also not con-
trolling. That an agent, or a third party dealing with
him, may misapprehend the extent of the agent's author-
ity, does not authorize the agent to bind the principal, at
least in the absence of overt conduct by the principal
manifesting an apparent intent to clothe the agent with a
larger authority. The circumstances here do not warrant
such an inference or conclusion.
It is consequently found that the Respondent did not
at any time indicate an unequivocal intention to be
bound by the actions of SMACNA-KC in negotiations
with Local 2, without the Respondents' prior specific ap-
proval. It follows that the Respondents' actions in refus-
ing to be bound by the 1977 contract negotiated by
SMACNA-KC did not constitute an unfair labor prac-
tice. It will therefore be recommended that the com-
plaint be dismissed.
In view of those conclusions, it is unnecessary to con-
sider other contentions advanced by the Respondents in
defense.
[Recommended Order for dismissal omitted from pub-
lication.]