Merico, Inc.

National Labor Relations Board - Board Decisions

Nov 8, 1973

207 N.L.R.B. 101 (N.L.R.B. 1973)

MERICO, INC. 101
Merico, Inc. and Teamsters Local Union No . 515, an
affiliate of the International Brotherhood of Team-
sters, Chauffeurs, Warehousemen & Helpers of
America Petitioner. Case 10-RC-9485
November 8, 1973
DECISION OF REVIEW
BY CHAIRMAN MILLER AND MEMBERS
KENNEDY AND PENELLO
On April 6, 1973, the Regional Director for Region
10 issued his Decision and Direction of Election in
the above-entitled proceeding, wherein he found that
an instrument executed by the Employer and Bakery
and Confectionery Workers International Union of
America, Local 25, AFL-CIO,' was not a bar to the
instant petition. Thereafter, in accord with National
Labor Relations Board Rules and Regulations, Series
8, as amended, the Employer and the Intervenor filed
timely requests for review, contending, inter alia, that
the Regional Director departed from established
precedent in not finding a contract bar.
By telegram dated May 3, 1973, the National
Labor Relations Board granted the requests for
review and stayed the ' election pending decision on
review. Thereafter the Employer filed a brief on
review.
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 entire record in this
case, including the brief on review, and hereby
affirms the Regional Director for the following
reasons:
The Employer is engaged in the production and
distribution of bakery products at its Fort Payne,
Alabama, plant. In March 1972, the Employer
recognized the Intervenor as representative of its
production and maintenance employees. Thereafter,
the parties engaged in protracted bargaining. On
January 31, 1973, the same day that the rival petition
was filed, representatives of the Employer and the
Intervenor, including a number of employees who
formed the Union Committee, executed the instru-
ment asserted by the contracting parties as a bar.
I Hereinafter called the Intervenor.
2 See Appalachian Shale Products Co., 121 NLRB 1160, 1162. We fail to
understand the charge of our dissenting colleague that our finding of no-
contract bar constitutes a departure from and substantial modification of
the salutary principle enunciated in the Appalachian Shale case. That
principle means that a condition of prior ratification must be expressed in
the written instrument itself and cannot be established by parole or other
extrinsic evidence. This necessarily requires an examination and construc-
tion of the specific language used in the document under consideration
That is precisely what we have done in this case; nor have we gone beyond
the face of the written document.
207 NLRB No. 22
Thereafter, on February 4, 1973, the employees voted
against ratification of the terms set forth in the
instrument.
The final paragraphs of the instrument recite:
This contract made retroactive to January 1,
1973 between Merico Inc., and Local #25 of the
Bakers and Confectioners Union is the full
agreement between the Union representatives, the
Union Committee, and the Company representa-
tives.
The Union Committee is Unanimous for
acceptance and each member is hereby pledged to
recommend this agreement for ratification by the
membership at Fort Payne, Alabama, Merico
Plant.
The use of this somewhat unusual legend raises the
question of whether the signatures of the Union
Committee on this document reflect an intent by
them to bind the employees to the substantive terms
in the instrument, irrespective of whether the
employees subsequently ratified it. Our examination
of the entire document, particularly the above-
quoted paragraphs and apart from any parole
evidence, clearly reveals that the Union Committee's
action in signing the document was qualified by the
phrase that they were unanimous "for acceptance"
and each member is "pledged to recommend this
agreement for. ratification by the membership." The
use of the phrase "for acceptance" in this context
indicates to us that although the terms were accepta-
ble to the Union Committee, it was not purporting to
accept them unconditionally on behalf of the
employees. While the condition of ratification could
have been more artfully drawn, we conclude that, as
a matter of contract interpretation, the signatures of
the Union Committee reflected merely "a signed
agreement to pledge the Committee's support for
ratification of the agreement," and did not evidence
a binding contract absent employee ratification. We
therefore, in accord with the Regional Director, find
that the instrument does not bar the instant petition.2
Accordingly, the case is hereby remanded to the
Regional Director for the purpose of conducting an
election in accordance with his Direction of Election
except that the payroll period for eligibility shall be
that immediately preceding the date of issuance.3
MEMBER PENELLO, dissenting:
In our opinion the cases referred to in the dissenting opinion do not
warrant a contrary conclusion as none involves the interpretation of
language used in a written document indeed, most of those cases involve
unfair labor practices where the basic issue was whether the parties had
orally agreed toa binding contract so as to obligate the employer to execute
it.
3 In order to assure that all eligible voters may have the opportunity to
be informed of the issues in the exercise of their statutory right to vote, all
parties to the election should have access to a list of voters and their
addresses which may be used to communicate with them . Excelsior
Underwear Inc., 156 NLRB 1236; N L R.B v. Wyman-Gordan Co., 394 U.S
(Continued)
102 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
I cannot agree with my colleagues that the contract
here is not a bar and that an election should
therefore be directed. For, although purporting to
adhere to the form of Appalachian Shale Products4 in
saying they are looking to the face of the contract to
determine whether employee ratification was specifi-
cally made a condition precedent, the majority
opinion departs from its spirit, and in effect modifies
it substantially, by interpreting ambiguous language
which is anything but specific as to either its intent or
meaning.
All the contract-bar cases decided around October
1958, including Appalachian Shale Products, stated as
their purpose and have been applied to achieve the
simplification and clarification of the so-called
contract-bar rules. This was accomplished largely by
the elimination of the need for examination or
interpretation of the intent of the parties, whereas the
Board had previously resolved disputes concerning
alleged understandings through the use of parole
evidence, conflicting testimony, and protracted
hearings in order to construe ambiguous clauses or
conduct. To this end, also, the Board in Appalachian
Shale Products stated that prior ratification as a
condition precedent would be found only where an
express contractual provision to that effect was
agreed upon.5
In the application of that principle, the Board has
consistently found that ratification is a gratuitous
process which union negotiators have imposed upon
themselves unless there is a clear provision specifical-
ly stating such a requirements or there has been
effective communication to the employer of a
limitation on the authority of the union bargaining
committee.? However, the "clear provision" must be
clear without resort to divination of the meaning or
intent of the language. And even where the employer
has been informed that any final agreement reached
would be subject to approval or ratification by the
union members, the employer cannot insist upon
759. Accordingly, it is hereby directed that a revised election eligibility list,
containing the names and addresses of all the eligible voters, must be filed
by the Employer with the Regional Director for Region 10 within 7 days of
the date of this Decision on Review . The Regional Director shall make the
list available to all parties to the election. No extension of time to file this
list shall be granted by the Regional Director except in extraordinary
circumstances. Failure to comply with this requirement shall be grounds for
setting aside the election whenever proper objections are filed.
4 Supra.
5 Supra, 1163
Accordingly, the rule for prior ratification is restated as follows: Where
ratification is a condition precedent to contractural [sic] validity by
express contractural [sic ] provision , the contract will be ineffectual as a
bar unless it is ratified prior to the filing of a petition, but if the
contract itself contains no express provision for prior ratification, prior
ratification will not be required as a condition precedent for the
contract to constitute a bar.
6 E.g., Houchens Market of Elizabethtown, Inc., 155 NLRB 729, enfd. 375
F 2d 208 (C.A. 6), where it was found that no condition precedent existed
and ratification was a gratuitous undertaking by the union, notwithstanding
the fact that the union negotiator informed the employer representatives
such ratification where there is no probative evidence
that the union agreed that the company could
condition execution upon such employee action.8
In the instant case, none of the critical elements
exist. The clause itself is not an undertaking by or on
behalf of the Union as the bargaining representative
but by the individual members of the employee
committee, and even as to them it does not clearly
state that ratification must be secured in order for a
contract to be binding. Thus, it requires no action at
any time by the bargaining representative itself.
Indeed, my colleagues recognize that the provision
itself is "inartfully drawn" and purport to find it
unambiguous by "examination of the entire docu-
ment" and their analysis of what particular words
and phrases in context "indicate[s] to us. " 9 In
engaging in such analysis and interpretation, the
majority is departing from Appalachian Shale Prod-
ucts, which was to eliminate such construction of
what the parties intended, let alone what the words
might mean to someone who was a stranger to the
bargain. As for effective communication of any
limitation on the authority of the Union's negotia-
tors, the record is totally devoid of any indication at
any time that there was any discussion between the
parties of the absence of full authority to reach
agreement.
For all the above reasons, I believe that resort to
construction of the clause is improper and the
contract was final in the absence of an unambiguous
requirement for prior ratification. However, if the
majority engages in construction of the meaning of
the clause, they should use the record evidence to test
their conclusions. But the evidence in the record
respecting the purpose of the clause and the way in
which it was incorporated into the contract does not
support their construction. For, there is no indication
whatsoever of any discussion between the parties
concerning ratification as a condition precedent. On
the contrary, the Employer's negotiator testified
that all agreements would be subject to approval by the employees, since the
requirement was not incorporated in the written contract . And see Gate City
Optical Company, 175 NLRB 1059, 1061.
7 Sunderland's Incorporated 194 NLRB 118 , fn. I; Lewittes and Sons, 96
NLRB 775; 776-777. Cf. Wickly, Inc., 131 NLRB 467,468-469.
s Houchens Market; supra 734.
9 In stating the principle and meaning of Appalachian Shale Products as
"necessarily requir [ing] an examination and construction of the specific
language used in the document under consideration ," my colleagues have
added the factor of "construction" which is contrary to what has been
deemed to be "necessarily required." Rather, if construction is necessary the
clause is ambiguous and does not require ratification as a condition
precedent to the existence of a binding contract; the language of the clause
must set forth the need for ratification on its face . Here, the majority
purports to rely on the language of the clause while conceding that it is
inartfully drawn, stating they rely on the contract as a whole and engaging
in extensive rationalization as to what certain words and phrases mean to
them . The fact that they have not "gone beyond the face of the written
document" is immaterial, inasmuch as they have gone beyond the precise
language of the clause itself.
MERICO, INC. 103
during the hearing herein, on cross-examination, that
the language of the clause was his own and that he
included it "to make sure that we had a unanimous
group there.... I wanted to make sure that
everybody was with us. . . . They were completely
unanimous. That's what I was trying to establish
here." And in response to the question "Isn't it true
you expected this to be taken to the membership?"
He stated: "I didn't care as long as they recommend-
ed it. I had a contract with Charlie Messer [the Union
representative] here as far as I was concerned "10
(Emphasis supplied.) To find a condition precedent
in the face of this testimony is inexplicable, indeed.
Even if this clause related to the Union rather than
the individuals, at most this language might be
analogous to that in General Asbestos & Rubber
Division, Raybestos-Manhattan, Inc.," where the
union's attorney notified the company in writing that
the union accepted the company's proposal and that
the union "will of course wish to submit the total
agreement for ratification by the membership."12
The Board there found no difficulty in adopting
without comment the Trial Examiner's finding that
this was no more than a statement of the course the
union intended to pursue.13 A similar finding is
required in the case before us, where the language is
even more vague, notwithstanding the fact that it is
contained in the contract rather than in a letter.
Perhaps my colleagues may have been swayed by
the fact that here the employees failed to ratify the
contract agreed to by their negotiators. However,
that is immaterial if, in fact, final agreement was
reached which was not subject to such ratification.
For, it is well settled that dissatisfaction with the
contract or with the conduct of the bargaining agent
is not sufficient to justify the processing of a rival
petition 14 or the nullification of the contract.15
In sum, all, logic and precedent require the
conclusion that the Board is precluded from constru-
ing the disputed language of the contract and that,
because it is ambigous on its face, it must be held not
to rise to the level of specificity required by
Appalachian Shale Products. For that reason, the
contract is a bar, and I would dismiss the petition.
10 Mr. Miller, Employer's vice president in charge of employee relations,
further testified:
Q. You are certain at the time this was signed the employees
understood they were signing a contract, not signing that this proposal
be taken to the members for ratification?
A. Right. Yes, sir, yes.
11 183 NLRB No. 27.
12 Ibid
13 Ibid
14 Cf. Gate City Optical Company, supra.
15 General Asbestos & Rubber Division, Raybestos -Manhattan, Inc., supra