Farm Boy Restaurant; Farm Boy Restaurants Nos. 2 And 3

National Labor Relations Board - Board Decisions

Mar 31, 1986

279 N.L.R.B. 82 (N.L.R.B. 1986)

82 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Merrell M. Williams; Boy's Restaurant, Inc.; Girl's
Restaurant; Jumbo's d/b/a Farm Boy Restau-
rant; Farm Boy Restaurants Nos. 2 and 3 and
Hotel Employees and Restaurant Employees
International Union , Local 703, AFL-CIO.
Case 31-CA-10172
31 March 1986
SUPPLEMENTAL DECISION AND
ORDER
BY CHAIRMAN DOTSON AND MEMBERS
DENNIS AND STEPHENS
On 26 November 1982 the National Labor Rela-
tions Board issued its Decision and Order' in the
above-entitled proceeding in which it affirmed Ad-
ministrative Law Judge Frederick C. Herzog's
finding that the Respondent violated Section
8(a)(5) and (1) of the National Labor Relations
Act, by repudiating its tentative agreements with
Hotel Employees and Restaurant Employees Inter-
national Union, Local 703, AFL-CIO (the Union)
on the subjects of meal credits and cost-of-living
increases in wages. On 23 September 1983 the
Board notified the parties that it had decided, sua
sponte, to reconsider its decision.
The National Labor Relations Board has delegat-
ed its authority in this proceeding to a three-
member panel.
Having again reviewed the record in this pro-
ceeding, we have decided to overrule the earlier
decision finding the violation.
This case presents the question of whether the
repudiation of tentative agreements reached in the
course of collective bargaining, standing alone,
constitutes bad faith in contravention of the Re-
spondent's bargaining obligations. We hold that, in
the circumstances of this case, it does not.
The facts, as more fully set forth by the judge,
are as follows. The Respondent and the Union
have had a collective-bargaining relationship for
number of years, with their most recent contract
having been effective from 1 April 1975 to 31
March 1980. The parties met on 28 and 29 Febru-
ary 19802 to negotiate a successor collective-bar-
gaining agreement. The Respondent was represent-
ed in negotiations by its attorneys, Wilson Clark
and Albert Tomigal. The Union was represented
by its attorney, David Silver, as well as by local
and international union officials. Clark advised the
Union at the inception of bargaining that although
he and Tomigal were generally authorized to nego-
tiate and reach agreement, certain items would re-
quire more specific authorization of the Respond-
265 NLRB 506
Unless otherwise indicated, all dates are 1980
ent. Clark stated that arrangements had been made
between his client and him that he could reach
someone by telephone at any reasonable hour to
seek additional authority. The parties agreed at the
beginning of bargaining that each reserved the
right to add to, delete , change, or modify any pro-
posal or amendment during negotiations. The
Union additionally noted that any agreement
reached would be subject to ratification of the
membership.
On the second day of bargaining , the parties had
made sufficient progress that Clark broached the
possibility of a specific package agreement. Clark
specified that he could not make such an offer
without his client's authorization, but solicited the
Union's response if the package offer were to be
made . The union negotiators indicated that they
would be willing to agree to the proposal suggest-
ed by Clark, and Clark then left the negotiating
table to telephone his client.
After obtaining the telephonic authorization of
Richard Hall, an official of the Respondent who
had been identified by Merrell Williams as the indi-
vidual with whom Attorney Clark should have his
dealings regarding the negotiations, 3 Clark re-
turned to the negotiating table and advised the
Union that he had the authority to make the pack-
age offer previously discussed by the parties. The
Union accepted the offer, which included proposals
regarding meal credits and cost-of-living increases,
and Union Attorney Silver agreed to prepare a
document memorializing the agreement.
After the meeting, Clark again called his client
and this time spoke with Merrell Williams, owner
or part owner of all the restaurants covered by the
parties' contracts. Williams informed Clark that
Clark did not have the authority to make the pro-
posals in the parties' agreement concerning cash
payments in lieu of meals and cost-of-living wage
increases . Clark told Williams that he had been
talking with Hall about these proposals, and that he
had mistakenly believed that Hall was getting his
directions from Williams. Williams told Clark that
he had to see what the cost-of-living increase
would do to operations, that several of the coffee
shops were losing money, and that he just did not
know at that point what he was going to do. Wil-
liams agreed to consider the proposals and advise
Clark of his decision.
On 5 March Williams informed Clark that he
would not abide by the agreements regarding meal
credits or cost-of-living increases. On the same
' According to Clark, Hall is the comptroller for Williams Brothers
Markets, Inc , a partner in some of the Farm Boy Restaurant operations
involved in the case, and the bookkeeper, in general , for the Respond-
ent's restaurant operations
279 NLRB No. 13
MERRELL M. WILLIAMS 83
date, Clark telephoned Union Attorney Silver to
advise him of Williams' position. Clark offered to
resume negotiations and explained his embarrass-
ment in having erroneously assumed that Williams
had authorized the offer regarding these items.
Clark told Silver that Williams could not agree to
the proposals because the Respondent was losing
money at several of the restaurants, and indicated a
willingness on the part of the Respondent to allow
the Union to look at its books. The Union thereaf-
ter refused to meet and bargain further with the
Respondent and, on 17 March, conducted a ratifi-
cation meeting at which the membership approved
the package agreement including the two repudiat-
ed provisions. On 25 August 1981, over a year
later, the Union presented the Respondent with a
copy of their "agreement" for execution.
The judge found the Respondent's failure to
make sure that it had clear channels of communica-
tion between itself and its negotiator to be incon-
sistent with its duty to bargain in good faith, but
concluded that the Respondent's violation did not
stem from any defect in its grant of authority to
Clark. He found, rather, that the Respondent vio-
lated the Act by repudiating its tentative agree-
ments on the subjects of meal credits and cost-of-
living increases which had been explicitly and ad-
mittedly authorized by the Respondent through
Hall, an officer of the Respondent cloaked with os-
tensible authority to reach agreement . The viola-
tion found, therefore, was premised on the Re-
spondent's repudiation of these earlier agreements.
We disagree, and find that the Respondent's with-
drawal of these provisions does not constitute bad
faith in the circumstances of this case.
Unlike the refusal to execute an agreed-upon
contract, which is a per se violation of Section
8(a)(5) and (1) of the Act because it demonstrates a
refusal to acknowledge and abide by the fruits of
bargaining, the withdrawal of tentative agreements
reached prior to the formation of a legally enforce-
able contract represents only one factor to be con-
sidered in determining good- or bad-faith bargain-
ing.4 In ruling on an allegation that a party has
failed to bargain in good faith, it is well established
that we look to the totality of circumstances re-
flecting the party's bargaining frame of mind.
Rhodes-Holland Chevrolet, 146 NLRB 1304 (1964).
We have previously declined to find employers
who withdrew provisions on which tentative
agreement had been reached during negotiations to
have failed in their bargaining obligations when the
employer's explanation for its retraction did not in-
dicate a lack of good faith. See Olin Corp., 248
NLRB 1137, 1141 (1980); Loggins Meat Co., 206
NLRB 303, 309 (1973); Food Service Co., 202
NLRB 790, 802-803 (1973).
In this case, the Respondent's negotiator made
an offer to the Union believing he had the author-
ity to do so. When it became clear that the Re-
spondent would not approve the proposals, the ne-
gotiator immediately withdrew from the agree-
ments, offering a reason for so doing, and further
offered to immediately resume bargaining. The
Union, which had not yet submitted the proposal
to membership for ratification or taken any action
in reliance on the parties' tentative agreement, re-
fused to bargain further. The Respondent's expla-
nation for its retraction of its prior agreement re-
garding the two provisions constitutes sufficient
good cause to rebut any inference of bad faith ar-
guably arising from that action. Further, the Re-
spondent offered to substantiate its explanation by
opening its books to the Union and to resume bar-
gaining in an effort to reach agreement. There is
no other indication that the Respondent was with-
drawing from the agreements in order to frustrate
the bargaining process or avoid reaching a con-
tract. Accordingly, we overrule the original Deci-
sion and Order and shall dismiss the complaint.
ORDER
The complaint is dismissed.
4 As noted by the judge, the General Counsel refused to issue a com-
plaint alleging that the parties had reached a complete agreement Nor
does the General Counsel challenge the Respondent' s legal right to with-
draw from its tentative agreement on the proposals prior to the union
ratification vote What the General Counsel contends is that the act of
repudiating these tentative agreements evidences bad faith