Muller-Gordon Motor Co.

National Labor Relations Board - Board Decisions

Oct 9, 1969

179 N.L.R.B. 9 (N.L.R.B. 1969)

MULLER-GORDON MOTOR CO.
Muller-Gordon Motor Company and Automobile
Salesmen 's Union , Local 1095, AFL-CIO. Case
20-CA-5145
October 9, 1969
DECISION AND ORDER
BY MEMBERS FANNING, BROWN , AND ZAGORIA
On April 29, 1969, Trial Examiner George H.
O'Brien issued his Decision in the above-entitled
proceeding, finding that Respondent had engaged in
certain unfair labor practices alleged in the
complaint and recommending that it cease and
desist therefrom and take certain affirmative action,
as set forth in the attached Trial Examiner's
Decision. Thereafter, the Respondent filed
exceptions to the Trial Examiner's Decision and a
supporting brief and the General Counsel and the
Charging Party filed answering briefs.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
powers in connection with this case to a
three-member panel.
The Board has reviewed the rulings of the Trial
Examiner made at the hearing and finds that no
prejudicial error was committed. The rulings are
hereby affirmed. The Board has considered the Trial
Examiner's Decision, the exceptions and briefs, and
the entire record in this case, and hereby adopts the
findings, conclusions, and recommendations of the
ial Examiner, as modified herein.
The Trial Examiner finds that the Respondent
violated Section 8(a)(5) and (1) by refusing to
bargain in good faith with the Union and by
refusing to be a party to the collective-bargaining
agreement agreed to and executed on August 27,
1968, by the Union and the Eastbay Motor Car
Dealers, Inc. We agree for the following reasons.
The material facts of this case are undisputed
and, as more fully set forth by the Trial Examiner,
are as follows: The Eastbay Motor Car Dealers,
Inc., hereafter the Association, is an association
organized, at least in part, to engage in collective
bargaining on a multiemployer basis. Respondent
has been a member of the Association since 1953. In
1966, the Union and the Association entered into an
agreement effective July 15, 1966, and running until
June 30, 1968. Included in this agreement was a
"most favored nation clause" providing that, if the
Union negotiated a more favorable contract with
another employer or employers in the area, the
Association would have the option of adopting such
contract.' On September 1, 1966, the Union
executed a contract with a nonmember of the
Association, Melrose Motors, Inc., providing for a
different method of calculating salesmen's
commissions. Shortly thereafter Respondent claimed
the option of adopting the "more favorable"
9
Melrose contract. The Union acquiesced, and,
thereafter, the Union and the Respondent executed
a Memorandum of Agreement, effective October 1,
1966.2 By the terms of this agreement the parties
agreed to be bound by all the terms of the
Association agreement except those inconsistent
with the terms specifically set forth in the
memorandum agreement. The only provisions
specifically set forth in the memorandum agreement
were those providing for the "Melrose method" for
salesmen's compensation.
Early in 1967 four other members of the
association notified the Union that they were
exercising their option under the agreement and
substituting the "Melrose method" of compensation.
On April 13, 1967, the Union sent Respondent a
letter attempting to rescind the Memorandum of
Agreement entered into October 1, 1966. In so
doing, the Union contended that the parties to the
original agreement cannot separately take advantage
of the "most favored nation" clause. Shortly
thereafter, the Union filed a complaint in the
Superior Court of the State of California, asking for
a declaratory judgment on this point. On September
29, 1967, the court entered a judgment finding that
Respondent's October 1, 1966 agreement with the
Union was binding and enforceable, and that it had
not been rescinded.3
The 1966 Association contract was for a term of
2 years ending June 30, 1968, and, in the absence of
notice 60 days prior to the expiration date, was
automatically renewable for an additional year. On
April 16, 1968,4 the Union sent a letter to the
Association, and to each of the independent dealers
(nonassociation members) who had signed identical
contracts' stating that the Union wanted to make
changes in the agreement and listing the desired
changes. Respondent did not receive a separate
notice.
On May 14, 1968, the Association and the Union
held their first bargaining session on the new
contract. Before that meeting Respondent advised
the Association that the Respondent had a valid
contract with the Union which had been extended by
virtue of the Union's failure to send a notice of
'The clause reads as follows: " It is agreed that, if the Union negotiates a
more favorable contract with another Employer or Employers in Albany,
Berkeley, Oakland, Alameda, San Leandro or Hayward, the Eastbay
Motor Car Dealers, Inc., shall have the option to adopt such contract, the
question of `more favorable contract' to be subject to the Board of
Adjustment procedures of this Agreement."
'The Trial Examiner in his findings, inadvertently refers to the
Memorandum of Agreement of August 1, 1966, when it is clear he means
this agreement of October 1, 1966.
'In doing so , the court agreed with the Union that the "most favored
nation" clause could only be invoked by the Association, and not by
individual members, but further found that the Union's mistake of law in
entering into the Memorandum Agreement did not give it the right to
rescind the agreement.
'The Trial Examiner in his findings inadvertently refers to a letter dated
August 16, 1968, when it is clear that he means this letter of April 16,
1968.
'Approximately 20 independent dealers had signed contracts identical
with the Association contract.
179 NLRB No. 4
10 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
reopening to Respondent. Thereafter, during one of
the early meetings, the Association told the Union
that Respondent claimed to have a contract with the
Union, and that, therefore, the Association was not
bargaining for the Respondent. The Union replied
that, in its opinion, its agreement with Respondent
had not been extended for another year and. that
Respondent would be bound by whatever agreement
was reached. On August 17, 1968, the Association
signed a contract with the Union effective July 1,
1968, through June 30, 1971.
The Respondent now contends that its withdrawal
occurred during the term of the 1966-1968 contract,
i.e., on October 1, 1966, by, virtue of its
memorandum of agreement with the. Union, and
that the Union assented to the withdrawal by its
conduct in connection with that agreement.
Therefore, the Respondent argues, it was not a part
of the multiemployer unit in 1968 and was entitled
to, individual notice of a desire to modify its
separate agreement with the Union, absent which its
contract was renewed automatically. As the Trial
Examiner, we find no merit in the Respondent's
position.
Under the Board's decision in Retail Associates,'
an employer who engages in multiemployer
bargaining is bound by the results of that bargaining
unless it clearly evinces at an appropriate time and
in an unequivocal manner that it desires to
withdraw.' Contrary to the Respondent's contention,
we find no indication of any intention on
Respondent's part to withdraw from multiemployer
bargaining, let alone an unequivocally expressed
intention, based on the Respondent's negotiating or
entering into the October 1, 1966, agreement. Its
notice to the Union of its desire to take advantage
of the "most favored nation" clause in the
multiemployer contract was a claim of a right under
that contract and certainly was not a repudiation
thereof. It is difficult to conceive of a situation,
except for a clause giving an employer a right of
withdrawal during the term of a multiemployer
contract, in which an employer could withdraw from
a multiemployer unit by virtue of asserting a right
to a benefit under the contract, and we do not see
how the present facts can be said to present such a
situation. Nor did the Respondent indicate by any
affirmative conduct that it intended to withdraw.
Thus, it did not inform the Union of any such
intention, and it did not take any steps to resign
from the Association either then or later.
Furthermore, Respondent did not at that time
attempt to withdraw its authorization of the
Association to bargain on its behalf, assuming such
a withdrawal of authorization by. a continuing
member would be possible under the Association's
bylaws. Finally, the Respondent does not point to
any language of its October agreement by which
Respondent withdrew, but relies solely on the
claimed import of the terms, a claimed import with
which we do not agree.
There is no doubt that the Union, in entering the
separate memorandum agreement with Respondent,
was granting what it mistakenly believed it was
required to give under the multiemployer contract
upon request of the individual employer. The
declaratory judgment of the court was limited to
rights under the "most favored nation" clause, and
in holding that both the multiemployer contract and
the Respondent' s memorandum agree of October 1,
1966, were in full legal effect and binding, the court
was clearly considering only the matter of the
changed term pursuant to the claim made by
Respondent under that clause . It did not purport to
determine Respondent's relationship to the
multiemployer unit as a result of the October
agreement, and, in fact, under the Act that is a
question for this Board. In our view, the Union's
action in entering an agreement based upon its
mistake of law as to its obligation to accord the
more favorable term upon individual demand cannot
in any way be construed as constituting a
concurrence in withdrawal from the existing unit,
even if such withdrawal had been "intended". In this
connection, it is to be noted that even if there were
individual rights of employers to seek the more
favorable terms under the multiemployer unit, this
would not necessarily be inconsistent with the
continued adherence to such unit; it is well settled
that individual bargaining on limited matters is not
inconsistent with group bargaining.'
As Respondent has never effectively withdrawn
from the multiemployer bargaining group, it was
bound by the multiemployer negotiations and was
under an obligation to execute the contract
negotiated by the Union and the Association.' Its
failure to do so is a violation of Section 8(a)(5) and
(1). Accordingly, we shall adopt the Trial
Examiner's Recommended Order including the
requirement that Respondent execute the contract
negotiated by the Union and the Association.
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the
Recommended Order of the Trial Examiner, and
'120 NLRB 388.
'/d. at 395; Anderson Lithograph Co.. 124 NLRB 920, enfd . sub nom
N.L.R.B. v. Jeffries Banknote Company, 281 F.2d 893 (C.A. 9). The
Respondent cannot deny the need for Union consent to its withdrawal by
analogizing its position with that of employers who were not members of
the Association but entered contracts with the Union adopting the terms of
the Association contract.
'The Kroger Co., 148 NLRB 569; Sheridan Creations , Inc., 148 NLRB
1503, 1505, enfd . 357 F.2d 245 (C.A. 2), cert. denied 385 U.S. 1005.
'It is not contended that the Respondent's withdrawal occurred at any
other time or in any other manner, the sole position being that its rights
derive from the October 1, 1966, agreement . But even if it were argued
that its letter of July 1, 1968, constituted a notice of withdrawal, this
occurred after multiemployer negotiations had begun and hence would
require Union consent , which was not forthcoming . Sheridan Creations,
Inc.. supra at 1505.
MULLER-GORDON MOTOR CO.
hereby orders that the Respondent, Muller-Gordon
Motor Company, Oakland, California, its officers,
agents, successors, and assigns, shall take the action
set forth in the Trial Examiner's Recommended
Order.
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
GEORGE H. O'BRIEN, Trial Examiner: On February 4,
1969, a hearing was held in the above-entitled matter in
San Francisco, California, at which all parties appeared
and participated. The complaint, issued by the Regional
Director for Region 20 of the National Labor Relations
Board on October 24, 1968, is based on a charge filed by
the Union on August 2, 1968, and alleges violations of
Section 8(a)(1) and (5) of the National Labor Relations
Act. Upon the entire record in this case, including my
observation of the witnesses, and after due consideration
of the briefs filed by counsel for the General Counsel,
counsel for the Respondent and counsel for the Union, I
make the following:
FINDINGS OF FACT
1. THE BUSINESS OF THE RESPONDENT
Muller-Gordon Motor Company, herein called
Respondent, is a California corporation with an office and
place of business in Oakland, California, where it is
engaged in the retail sale and servicing of new and used
automobiles. Respondent's annual sales at retail exceed
$500,000 in value and its annual purchases of goods and
materials shipped from points outside the State of
California directly to its place of business exceed $50,000
in value. Respondent is an employer within the meaning
of Section 2(2) of the Act engaged in commerce and in a
business affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
II. THE LABOR ORGANIZATION INVOLVED
Automobile Salesmen ' s Union , Local 1095, AFL-CIO,
herein called the Union , is a subordinate body of Retail
Clerks International Association and is a labor
organization within the meaning of Section 2(5) of the
Act.
III. THE ALLEGED UNFAIR LABOR PRACTICES
A. The Issues and Arguments of Counsel
The complaint alleges in substance that Respondent, by
virtue of its membership in Eastbay Motor Car Dealers,
Incorporated, herein called Association, is legally bound
to a certain collective- bargaining agreement , herein called
1968 Industry Contract, executed August 27, 1968, by the
Union and the Association covering all new and used car
salesmen employed by members of Association, and that
Respondent by refusing to be a party to said agreement or
to the negotiations which preceded the agreement, violated
Section 8(a)(5) of the Act.
Respondent in its answer admits that it is and was a
member of Association, that all salesmen employed by
members of Association constitute an appropriate unit for
bargaining and that the Union represents a majority of
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the employees in said unit. Respondent denies that
Association was authorized to negotiate the 1968 Industry
Contract on its behalf, and denies that it is a party to or
legally bound by any of the terms of said contract.
Respondent as an affirmative defense alleges that on
October 1, 1966, it entered into a separate agreement with
the Union, herein called Memorandum of Agreement, that
this separate agreement incorporated by reference the
terms of an agreement, herein called 1966 Industry
Contract, between the Association and the Union effective
July 15, 1966, not inconsistent therewith; that one of the
terms so incorporated was a provision for automatic
renewal in the absence of notice; that no notice was given,
and that therefore the Memorandum of Agreement was
automatically renewed for a period of one year from July
15, 1968.
Counsel for the General Counsel in his brief lists the
following issues:
a. Did Respondent's bargaining on a single-employer
basis with Local 1095 which culminated in the
execution of the Supplemental Agreement of October 1,
1966, constitute an abandonment of the multi-employer
group?
b. Did Local 1095's timely notice to the Association
to reopen the Master Agreement, effective July 15,
1966 to June 30, 1968, constitute notice to all
Association members?
c. Did the Supplemental Agreement of October 1,
1966 automatically renew itself to be effective until
June 30, 1969, by Local 1095's failure to give
Respondent timely individual notice of contract
reopening?
d. Did Respondent's letter of July 1, 1968 constitute
a timely withdrawal from the multi-employer unit?
Counsel for the General Counsel and counsel for the
Union argue that Respondent did not at an appropriate
time nor in an unequivocal manner evince its desire to
withdraw from the multiemployer unit, that the October
1, 1966, Memorandum of Agreement was a "supplemental
agreement" which by its terms became part of the general
agreement which had previously been negotiated by the
Association, that the Union's letter of April 16, 1968, to
the Association constituted notice to the Respondent and
effectively prevented the renewal of any part of the
agreement between the Union and the Respondent, and
that Respondent's letter of July 1, 1968, was an untimely
attempt to withdraw from multiemployer bargaining. In
their view this is a clear case of an individual
employer-member of a multiemployer bargaining group
seeking to avoid the contractual obligations of a
collective-bargaining agreement negotiated by its
bargaining representative.
Counsel for Respondent, in his brief, states:
General Counsel and union have generally advanced
the proposition that this is a classic multi-employer
agreement situation, and that since the union gave
notice to association of reopening, therefore, employer
was notified.
Employer takes quite a contrary position. Although
the opportunity to place a particular fact situation in a
preexisting legal cubbyhole is most attractive, employer
maintains that there should be a careful examination of
the history of dealing among the parties insofar as the
substitute agreement is concerned.
In short, employer maintains that insofar as the
agreement of October 1, 1966, is concerned, that it
replaces the previously executed master agreement
dated July 26, 1966. The substitute agreement has an
12 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
integrity of its own. This integrity was gained, first,
through the dealings of the parties in reference to the
agreement, and, secondly, by virtue of judgment and
findings of the Superior Court of Alameda County.
Therefore, because of the separateness and
distinctness of the substitute agreement, union was
under an obligation to personally and individually
notify employer.
The facts are not in dispute and are in all material
matters stipulated. Respondent is abiding by all the terms
of its October 1, 1966, Memorandum of Agreement with
the Union and all terms of the (current) 1968 Industry
Contract effective from July 1, 1968, through June 30,
1971, not inconsistent therewith. Respondent refuses to
recognize as binding upon it any term or condition in the
1968 Industry Contract which is inconsistent with its
Memorandum of Agreement of October 1, 1966.
Resolution of the ultimate issue of "refusal to bargain"
rests upon examination of the by-laws of the Association,
the texts of the several agreements, the decision of a
California court interpreting the agreements, the conduct
and correspondence of the parties and the application to
the foregoing of established rules of Agency law, contract
law, and the law of multi-employer bargaining
relationships.
B. The Evidence
Eastbay Motor Car Dealers, Inc., has been in existence
since at least 1939, and Respondent has been a member
since 1953. The by- laws contain the following relevant
provisions:
ARTICLE I SECTION I. These By-Laws shall
contain the standing rules and regulations of this
Association , a non-profit corporation , organized and
existing under and by virtue of the laws of the State of
California , and all members of this Association, who
are such whether by reason of being members at the
time of its incorporation , or are admitted to
membership after the incorporation , accept these
By-Laws and the Articles of Incorporation of the
Association , and members shall have no other rights in
their relationship with the Association than as provided
by these By-Laws and the Articles of Incorporation of
the Association , subject only to the laws of the State of
California and the United States.
SECTION 2. These By-Laws, together with the
Articles of Incorporation , together also with any
and/or all resolutions or motions which subsequently
may duly be passed by the Board of Directors or the
membership in accordance with the provisions of these
By-Laws, shall constitute a contract between the
Association and each and every one of its members.
ARTICLE V Membership SECTION 1.
Membership in the Association shall be limited to
persons, firms and/or corporations actively engaged in
handling, selling or dealing in new and /or used
automobiles , with places of business located in the
geographic area comprising Alameda and Contra Costa
Counties.
ARTICLE X Labor Relations SECTION 1. Every
person, upon joining the Association , automatically
gives, by virtue of accepting such membership , power of
attorney to the Association to act for the member in
any and all matters having to do with Labor relations;
and every person, firm or corporation , upon joining the
Association , contracts and agrees with the Association,
and with each of the members thereof, not to bargain
collectively with organized labor other than by and
through the Association, acting pursuant to the power
of attorney herein given and made.
SECTION 2. The power of attorney given and made
pursuant to the foregoing Section and the obligation of
any member to bargain collectively with organized
labor by and through the Association may be revoked
and terminated at any time by giving notice in writing
to the President or Secretary of the Association stating
the intention of such member to so revoke the power of
attorney, and terminate the obligation to bargain
collectively with organized labor through the
Association, said revocation and termination to be
effective immediately upon presentation to the
President or Secretary unless otherwise set forth in said
written notice.
At all times material herein Respondent retained its
membership in the Association. Respondent did not at any
time revoke its power of attorney by giving notice in
writing as required by the By-Laws of the Association.
The 1966 Industry Contract was executed July 15,
1966, by officers of the Association and officers of the
Union and became binding on all 41 members of
Association including Respondent immediately upon such
execution, without the necessity of any further action by
any member. The Union then secured the signatures of
approximately 20 independent dealers to the identical
contract. The 1966 Industry Contract contains the
following pertinent provisions:
THIS AGREEMENT, made and entered into the
day and year hereinafter set forth, by and between the
Dealership which hereinafter appears as Party
Signatory, FIRST PARTY, hereinafter called
"Employer," and AUTOMOBILE SALESMEN'S
UNION, LOCAL 1095, SECOND PARTY,
hereinafter called "Union."
SECTION ONE Recognition of the Union. The
Employer hereby recognizes Union as the sole collective
bargaining agent for all automobile salemen employed
by the Employer within the jurisdiction of the Union.
SECTION SEVENTEEN Other Agreements. It is
agreed that, if the Union negotiates a more favorable
contract with another Employer or Employers in
Albany, Berkeley, Oakland, Alameda, San Leandro or
Hayward, the Eastbay Motor Car Dealers, Inc., shall
have the option to adopt such contract, the question of
"more favorable contract" to be subject to the Board of
Adjustment procedures of this Agreement.
SECTION TWENTY Term of Agreement (1) The
term of this Agreement shall be two (2) years from its
effective date, July 1, 1966, to midnight, June 30, 1968,
and will be renewed thereafter for yearly periods,
starting with the anniversary date of July 1, 1968, with
or without changes, or will be terminated, pursuant to
the following:
(a) If neither Party to this Agreement, prior to sixty
(60) days before the anniversary date of July 1, 1968, or
thereafter, gives the notice of desired changes
(hereinafter provided for in Subparagraph (b) of this
Section Twenty, this Agreement shall be automatically
renewed and in full force and effect; without change,
for the year period following the anniversary date for
which no such notice was given.
(b) In the event that either Party to the Agreement is
desirous of effecting any changes as of the anniversary
date of July 1, 1968, or thereafter, such Party shall give
notice of the same to the other Party, not less than
sixty days prior to such July 1, 1968, anniversary date
MULLER-GORDON MOTOR CO.
and shall specify in said notice the changes desired... .
About September 1, 1966, the Union executed a
contract with a nonmember of the Association, Melrose
Motors, Inc., of Oakland, California. The Melrose
contract provided that the salesman's commission should
be 40 percent of the employer's gross profit. The 1966
Industry Contract provided that the salesman's
commission should be 4 1/4 percent of the retail delivery
price of the automobile. Shortly before October 1, 1966,
Respondent invoking section Seventeen of the Association
Agreement, claimed the option of adopting the "more
favorable" Melrose contract. The Union's then
secretary-treasurer, Chester Ansley, agreed and a
document entitled "Memorandum of Agreement" was
executed. The text of this memorandum, insofar as
relevant, follows:
MEMORANDUM OF AGREEMENT
MULLER-GORDON MOTORS, hereafter called
the Employer, and Automobile Salesmen's Union Local
No. 1095, hereafter called the Union, intend by this
Memorandum of Agreement to adopt and be bound by
the collective bargaining agreement, a copy of which is
attached hereto, in effect within Alameda County for a
term from July 1, 1966 to July 1, 1968, between the
Union and various automobile dealerships, except as
expressly modified in this Memorandum of Agreement.
It is accordingly agreed as follows:
The Union and the Employer adopt and agree to be
bound by all the terms and conditions of the collective
bargaining agreement referred to above, except that the
provisions below shall be effective between the Union
and the Employer, and nothing in said collective
bargaining agreement shall be applicable or enforced to
the extent that it is inconsistent with such provisions, or
to the extent that it treats the subjects covered by such
provisions in a different or inconsistent manner.
*
[PROVISIONS RELATING TO SALESMEN'S
COMPENSATION]
* * * * *
This memorandum of agreement is entered into and
becomes effective this I day of October, 1966, and is
executed in the City of Berkeley, State of California, by
the undersigned parties.
For the Employer: For the Union:
GEORGE A. MULLER CHESTER ANSLEY
On various dates in February, March and April 1967
four other members of the Association notified the Union
by letter that they were exercising the option under section
Seventeen of the 1966 Industry Contract and substituting
the Melrose method of commission payment for the
Industry method. On April 13, 1967, the Union sent a
letter to Respondent rescinding the Memorandum of
Agreement of October 1, 1966, on the ground:
We have been informed by legal counsel that industry
dealerships such as yours who were originally bound by
the industry contract cannot separately take advantage
of section 17. This clause, according to our legal advice,
13
authorizes the Eastbay Motor Car Dealers, Inc. to
exercise the option on behalf of all of its members as a
single group to adopt the terms "of a more favorable
contract", but requires that all members act as a group.
The Union 's letter concluded with the statement: "the
industry contract remains in effect between your
dealership and Local 1095."
The Union then filed a complaint for declaratory
judgment in the Superior Court of the State of California,
and the court on September 29, 1967, entered the
following judgment:
1. Defendants Bob Philippi Inc., Lee Adams Pontiac,
Inc., J. E. French Co., and Lloyd A. Wise, Inc., and
each of them , have not validly or lawfully modified the
agreement with plaintiff of July 1, 1966 to June 30,
1968, executed on their behalf by Eastbay Motor Car
Dealers, Inc., and that said agreement has at all times
during its term been in full legal effect and binding
upon the aforesaid parties; and
2. The written agreement entered into between
plaintiff and defendant Muller-Gordon Motor Co. on
October 1, 1966 constitutes a valid and enforceable
agreement which has been in full effect and binding on
the parties since its date of execution; and
3. Plaintiff has not at any time validly or effectively
rescinded its agreement with Muller-Gordon Motor
Company.
The court 's judgment was supported by its conclusions
of law that the option created by section 17 could only be
exercised by Association , and could not be exercised by
any individual member of Association , and that the fact
that the Union entered into the Memorandum Agreement
because of a mistake of law did not give the Union the
right to rescind.
On January 2, 1968, Vincent J . Fulco was elected
Secretary -Treasurer of the Union, succeeding Chester
Ansley. Fulco, who had been business agent since 1962,
visited Respondent in February while making the rounds
of dealers to introduce his successor as business agent.
George Muller, Respondent ' s president , told Fulco "he
would like to sit down and negotiate " and Fulco replied,
"this is not the time for me to negotiate."
On April 16, 1968, Secretary-Treasurer Fulco wrote to
the Association:
Pursuant to Section 20(l)(b) of the current collective
bargaining agreement in effect between the undersigned
and you , notice is hereby given to you that the
undersigned and Local Union is desirous of effecting
changes in said agreement as of the anniversary date of
June 30, 1968, and hereby specifies in this notice the
changes desired.
The letter listed 11 items on which it desired changes,
and contained a request for a meeting on or after May 1.
On the same date the Union sent individual letters to each
of the 20 dealers who had signed separate identical
contracts . No separate letter was sent to any individual
member of the Association.
On April 23, 1968, the Association replied:
This will acknowledge your letter of April 16th, 1968
constituting your formal opening of that certain
agreement effective July 1, 1966 to midnight June 30,
1968 pursuant to Section XX entitled "Terms of
Agreement."
The changes and amendments to said agreement
desired by Eastbay Motor Car Dealers, Inc. are the
following:
Methods of and provisions concerning remuneration
of salesmen , hours of operation , provisions for
14 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
handling demonstrators , provisions for new car
announcement and clean - up period , house deal
provisions , clarify favored nations clause and all other
related matters bearing upon or concerning the above
subjects.
The letter concluded with a request that the Union set a
time and place to begin negotiations . The first meeting
was held May 14, 1968. Before the first meeting the
Association was orally advised by Respondent that
Respondent had a valid contract , which had been extended
for another year by virtue of the Union' s failure to send a
notice of reopening to Respondent . Respondent told the
Association that it would not be a part of the
negotiations . At one of the early meetings , Marcus
Hardin , an attorney who had been a negotiator for the
Association since 1939, asked the Union whether they had
sent any notice reopening the separate agreement with
Respondent . Upon receiving a negative reply, Hardin
stated that Respondent claimed to have a contract, that
the claim appeared to have merit , that on the face of the
matter it appeared that Respondent did have a contract,
that therefore the Association was not negotiating for
Respondent , and Respondent had no part in the joint
negotiations . The union representative replied that in their
opinion Respondent ' s separate agreement had not been
continued for another year and that they would consider
Respondent bound by whatever agreement came out of
the 1968 joint negotiations.
On July 1, 1968, the Union received the following letter
from Respondent:
Please accept this letter as confirmation that Muller
Gordon Chrysler Plymouth and the Automobile
Salesmen ' s Union will again be bound by the provisions
of the Memorandum of Agreement entered into
between Muller Gordon Chrysler Plymouth and your
union , dated October 1, 1966.
This agreement in its introductory paragraph
incorporates the consistent provisions of the Master
Agreement between East Bay Motor Car Dealers and
your union , dated July 26, 1966.
Since we have not, within the required time set out in
Section 20 of the Master Agreement , heard from you
concerning modifications , we are treating our
Memorandum of Agreement as having been extended
to July 1, 1969.
The Union replied on the same date:
As you are a member of Eastbay Motor Car Dealers
Association and we have been negotiating the
remuneration and etc., for Local No. 1095. It is thereby
the thinking of this office that your contract has
expired as of June 30, 1968 , as of Section 20 of the
Working Agreement.
This was the first notice by Respondent to the Union
that it did not intend to be bound by the 1968 Association
negotiations . No notice of any kind was given to the
Union by Respondent prior to the automatic renewal date
of the 1966 Industry Contract or prior to May 14, 1968.
Between May 14, 1968, and through July 1968, the
Union and the Association met 14 or 15 times . A strike
was called in July and the Union picketed all members of
the Association , with the exception of Respondent. On
August 17, 1968, the Association on behalf of its members
and the Union executed the 1968 Industry Contract
effective from July 1, 1968, through June 30 , 1971. It
provides that salesmen shall be compensated by a
commission of 4 1/2 percent of the retail delivery price.
C. The Law
1. Applicable Rules of the Law of Contracts
Restatement of the Law of Contracts , American Law
Institute, 1932.
Section 228
An agreement is integrated where the parties thereto
adopt a writing or writings as the final and complete
expression of the agreement . An integration is the
writing or writings so adopted.
Section 229. Partial Integration
Part of the terms of an agreement may be integrated;
but an integration , unless it appears when interpreted in
accordance with the rule stated in Section 230 to be a
statement of only part of the agreement of the parties,
is an integration of the whole thereof, subject to the
qualifications stated in Section 240.
Section 230. Standard of Interpretation Where There is
Integration.
The standard of interpretation of an integration , except
where it produces an ambiguous result , or is excluded
by a rule of law establishing a definite meaning, is the
meaning that would be attached to the integration by a
reasonably intelligent person acquainted with all the
operative usages and knowing all the circumstances
prior to and contemporaneous with the making of the
integration, other than oral statements by the parties of
what they intended it to mean.
Section 239. Effect of Partial Integration.
Where there is integration of part of the terms of a
contract prior written agreements and contemporaneous
oral agreements are operative to vary these terms only
to the same extent as if the whole contract had been
integrated.
Section 240. In What Cases Integration Does Not Affect
Prior or Contemporaneous Agreements.
(1) An oral agreement is not superseded or invalidated
by a subsequent or contemporaneous integration, nor a
written agreement by a subsequent integration relating
to the same subject matter , if the agreement is not
inconsistent with the integrated contract, and
(a) is made for a separate consideration, or
(b) is such an agreement as might naturally be made
as a separate agreement by parties situated as were
the parties to the written contract.
(2) Where no consideration is stated in an integration,
facts showing that there was consideration and the
nature of it, even if it was a promise, or any other facts
sufficient to make a promise enforceable , are admissible
in evidence and are operative.
Section 408. Discharge of Duty Under an Earlier Contract
By a Subsequent Inconsistent Contract.
A contract containing a term inconsistent with the term
of an earlier contract between the same parties is
interpreted as including an agreement to rescind the
inconsistent term in the earlier contract . The parties
may or may not at the same time agree to rescind all
the other provisions of the earlier contract . Whether
they do this is a question of interpretation , except as
this rule is qualified by the rule stated in Section 223.
MULLER-GORDON MOTOR CO.
2. Applicable Rules of the Law of Agency
Witkin, Summary of California Law 7th Edition Agency
Sec. 97
Ordinarily an agency is created for the benefit of the
principal, and the confidential relationship is one which
the law does not impose upon the parties, even though
there is a valid contract for a fixed period. The
principal is free to terminate the agency at anytime. If,
however, the agency or power is created for the benefit
of the agent or a third person, e.g., to protect some title
or right in him, or to secure some performance to him,
the agent and not the principal is most concerned with
the continuance of the agency and it is no longer proper
to permit the principal to terminate it at will.
Consequently it is held to be irrevocable by the
principal....
This type of agency is usually called a power coupled
with an interest (Civil Code 2356). The Restatement of
Agency (Sec. 138) terms it a "power given as security,"
defined as a power "in the form of an agency authority,
but held for the benefit of the power holder or a third
person and given to secure the performance of a duty
or to protect a title, either legal or equitable, such
power being given when the duty or title is created or
given for consideration." Thus, under the Restatement,
the essentials are as follows: It must be given (1) to
secure performance of a duty. or (2) to protect a title,
legal or equitable. (3) The power must be given when
the duty or title is created or (4) for consideration.
Mechem, Outlines of the Law of Agency, Fourth Edition
Sec. 265
Sec. 265. Irrevocable authority. As stated above,
there is one type of authority which may not be
revoked. The cases here are neither numerous nor clear.
To understand the idea involved it may be. useful to
reconsider what was stated above as to the reasons why
authority in the ordinary situation is always revocable.
Briefly, they inhere in the fact that in the ordinary
agency the agent is charged with the management of
some part of the principal's business. It should be, it is
thought, always in the power of the principal to manage
.his own business. This includes, if necessary, the power
of the principal to reassume the control of his own
business which he has delegated to the agent.
There is no rule of law or policy, however, which
prevents a person from getting rid of his business. He
may sell and convey it. He may also mortgage it, or
otherwise create a security interest in it in some third
party. What if this is in substance what is intended, but
that the transaction takes the form of a power to deal
with P's property in a certain way in certain
circumstances? Should the substance or the form of the
transaction be regarded?
American Law Institute, Restatement of the Law Agency
2d
Sec. 127. Unless otherwise agreed, if the principal
has manifested that an agent is a general agent, the
apparent authority thereby created is not terminated by
the termination of the agent's authority by a cause
other than incapacity or impossibility, unless the third
person has notice thereof.
Sec. 128. Unless otherwise agreed , if the principal
has specially accredited an agent to a third person, the
apparent authority thereby created is not terminated by
the termination of the agent's authority by causes other
than incapacity or impossibility, unless the third person
has notice thereof.
15
Sec. 135. A third person to whom a principal has
manifested that an agent has authority to do an act has
notice of the termination of authority when he knows,
has reason to know, or has been given a notification of
the occurrence of an event from which, if reasonable, he
would draw the inference that the principal does not
consent to have the agent so act for him, that the agent
does not consent so to act for the principal, or that the
transaction has become impossible of execution.
Sec. 136. Notification terminating apparent authority
(1) Unless otherwise agreed, there is notification by
the principal to the third person of revocation of an
agent's authority or other fact indicating its
termination:
(a) when the principal states such fact to the third
person; or
(b) when a reasonable time has elapsed after a writing
stating such fact has been delivered by the principal
(i) to the other personally;
(ii) to the other's place of business;
(iii) to a place designated by the other as one in
which business communications are received; or
(iv) to a place which , in view of the business
customs or relations between the parties is
reasonably believed to be the place for the receipt
of such communications by the other.
(2) Unless otherwise agreed , a notification to be
effective in terminating apparent authority must be
given by the means stated in Subsection ( 1) with respect
to a third person:
(a) who has previously extended credit to or received
credit from the principal through the agent in reliance
upon a manifestation from the principal of continuing
authority in the agent;
(b) to whom the agent has been specially accredited;
(c) with whom the agent has begun to deal, as the
principal should know; or
(d) who relies upon the possession by the agent of
indicia of authority entrusted to him by the principal.
3. Applicable Rules of Law Governing Multiemployer
Bargaining Relationships
When a pattern of bargaining on a multi -employer
basis has been established neither the Union, nor
individual employers may withdraw from the
multi-employer unit as a measure of momentary
expediency or bargaining strategy.
The decision to withdraw must be unequivocal; it
must be made in good faith ; and it must contemplate
abandonment , on a relatively permanent basis, of
multi-employer bargaining . and embracement of
bargaining on an individual employer basis.
An employer or union may withdraw only upon
adequate written notice given prior to the date set for
modification of the employer association contract or for
the start of multi-employer bargaining.
Where multi-employer negotiations have begun,
withdrawal will be permitted only if there is mutual
consent in the absence of unusual circumstances . Retail
Associates , Inc., 120 NLRB 388. N.L.R.B. v. Jeffries
Banknote Company, 281 F.2d 893 (C.A. 9), enfg. 124
NLRB 920.
16 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
D. Concluding Findings
Applying the propositions of law set forth in section C
of this report to the facts found in section B, supra, I
conclude and find:
1. Respondent did not decide to withdraw from
multiemployer bargaining on a relatively permanent basis.
Respondent's conduct in its dealings with the Association
and the Union was equivocal and did not embrace
bargaining on an individual employer basis. Respondent
indicated its intent to remain part of the multiemployer
group (a) by its failure to serve a notice of revocation of
authority on the Association in accordance with the
Association by-laws, (b) by its failure to notify the Union
in proper or timely fashion that the Association was not
authorized to bargain for Respondent in 1968, (c) by the
very text of the Memorandum of Agreement which clearly
demonstrates that the Memorandum is an amendment to
the 1966 Association Agreement and not, as contended by
Respondent's counsel, an independent document, and (d)
by Respondent's voluntary adoption of all terms of the
1968 Industry Contract which are not inconsistent with
the Memorandum of Agreement.
2. The Memorandum Agreement of August 1, 1966,
and the Industry Contract of 1966 constituted one single
integrated agreement. One of the terms of the integrated
agreement was that it would automatically renew for one
year from July 1, 1968, unless notice to terminate or
modify was given on or prior to May 1, 1968.
3. From at least July 1966 through at least the date of
the hearing herein Association was the general agent of
Respondent, empowered by Respondent to enter into
binding agreements with the Union on behalf of
Respondent and ipso facto authorized by Respondent to
receive notices from the Union regarding such agreements.
4. The by-laws of Association create a power coupled
with an interest . As between Respondent and Association
the power of attorney can only be revoked by written
notice from Respondent to Association. No such notice
was given, and oral notice did not extinguish the power of
the Association to bind Respondent within the scope of
the specifically delegated authority.
5. Association is a general agent of Respondent and
Respondent's president knew, when he orally notified
Association that he would not participate in nor be bound
by the results of the 1968 negotiations, that Association
had already begun to deal with the Union, and that the
Union relied upon possession of authority entrusted to
Association by Respondent. Respondent's failure to notify
the Union either in person or by mail of the attempted
revocation of part of that authority made all acts of
Association, prior to the Union's receipt of actual notice,
binding on Respondent.
6. The execution of the Memorandum of Agreement
August 1, 1966, did not in any way, nor to any degree
extinguish or diminish the power of Association to bind
Respondent in collective bargaining with the Union.
7. By entering into the Memorandum of Agreement,
the Union did not consent to the withdrawal of
Respondent from the multiemployer unit.
8. The Industry Contract of 1968 is binding on
Respondent and all inconsistent terms of the
Memorandum of Agreement are thereby superseded and
rendered void.
9. The Union's letter to Association dated August 16,
1968, effectively prevented renewal of the integrated
agreement , and Association ' s reply, requesting changes in
methods of remuneration of salesmen placed the subject
matter of the Memorandum of Agreement on the
bargaining table.
10. Respondent is now and has been at all times
material herein a member of the multiemployer
bargaining unit represented by Association.
It. Respondent is now and has been since the date of
its execution a party to and bound by all the terms of the
Industry Contract of 1968.
12. Respondent in May 1968 directed Association not
to bargain on its behalf.
13. Respondent on July 1, 1968, by its insistence on the
Memorandum of Agreement refused to bargain with the
Union.
14. Respondent since August 15, 1968, has refused to
be a party to or bound by the contract made by
Association on Respondent's behalf.
IV. THE EFFECT OF THE UNFAIR LABOR PRACTICES
UPON COMMERCE
The activities of Respondent, as set forth above,
occurring in connection with the operations of Respondent
described above have a close, intimate and substantial
relation to trade, traffic and commerce among the several
states and tend to lead to labor disputes burdening and
obstructing commerce and the free flow of commerce.
V. THE REMEDY
It has been found that Respondent has engaged in
certain unfair labor practices. It will therefore be
recommended that it cease and desist therefrom and take
certain affirmative action, as set forth in the
Recommended Order below, designed to effectuate. the
policies of the Act.
CONCLUSIONS OF LAW
1. Muller-Gordon Motor Company is an employer
within the meaning of Section 2(2) of the Act engaged in
commerce and in a business affecting commerce within
the meaning of Section 2(6) and (7) of the Act.
2. Automobile Salesmen's Union, Local 1095,
AFL-CIO , is a labor organization within the meaning of
Section 2(5) of the Act.
3. All employees of employer-members of Eastbay
Motor Car Dealers, Incorporated, (including employees of
Muller-Gordon Motor Company) who are engaged in the
sale or leasing of new or used vehicles, excluding all other
employees, office clerical employees, guards and
supervisors as defined in the National Labor Relations
Act, as amended, constitute a unit appropriate for the
purposes of collective bargaining within the meaning of
Section 9(b) of the Act.
4. Automobile Salesmen's Union, Local 1095,
AFL-CIO, has been at all times material herein and is
now the exclusive representative of all the employees in
the aforesaid appropriate unit within the meaning of
Section 9(a) of the Act.
5. By refusing on and after July 1, 1968, to bargain in
good faith with the Union as the exclusive
collective- bargaining representative of its employees in the
aforesaid appropriate unit, by refusing to be a party to the
collective-bargaining agreement executed by the Union
and by Eastbay Motor Car Dealers, Incorporated, . on
August 27, 1968, and by refusing to be a party to the
collective-bargaining negotiations which resulted in said
agreement , Respondent has engaged in and is engaging in
MULLER-GORDON MOTOR CO. 17
unfair labor practices within the meaning of Section
8(a)(5) and (1) of the Act.
6. The aforesaid unfair labor practices are unfair labor
practices affecting commerce within the meaning of
Section 2(6) and (7) of the Act.
RECOMMENDED ORDER
Upon the basis of the foregoing findings of fact and
conclusions of law, and upon the entire record in this
proceeding, I recommend that Muller-Gordon Motor
Company, its agents, successors, and assigns, shall:
1. Cease and desist from:
(a) Refusing to be a party to the collective-bargaining
agreement executed by Automobile Salesmen's Union,
Local 1095, AFL-CIO, and Eastbay Motor Car Dealers,
Incorporated, on August 27, 1968, effective from July 1,
1968, through June 30, 1971.
(b) In any like or related manner interfering with,
restraining, or coercing employees in the exercise of rights
guaranteed in Section 7 of the Act.
2. Take the following affirmative action which I find
will effectuate the policies of the Act:
(a) Forthwith honor and abide by the agreement
described in paragraph 1(a) of this Order.
(b) Give retroactive effect to the terms and conditions
of the agreement described in paragraph l(a) of this
Order, including but not limited to the provisions relating
to salesmen's commissions and other employment benefits
and make whole its employees for any losses they may
have suffered by reason of Respondent's refusal to be a
party to said agreement, with interest thereon at 6 percent
per annum.
(c) Preserve and make available to the Board, or its
agents, upon request, for examination and copying, all
payroll records, timecards, personnel records and reports,
and all records necessary to analyze the amount of
backpay due under the terms of this Order.
(d) Post in conspicuous places at Respondent's place of
business including all places where notices to employees
are customarily posted, copies of the notice attached
hereto and marked "Appendix."' Copies of said notice on
forms to be provided by the Regional Director for Region
20 shall, after being duly signed by Respondent, be posted
immediately upon receipt thereof and be maintained by it
for a period of 60 consecutive days thereafter in
conspicuous places, including all places where notices to
employees are customarily posted. Reasonable steps shall
be taken by Respondent to insure that said notices are not
altered, defaced, or covered by any other material.
(e) In writing, notify the Regional Director for Region
20 within 20 days from the receipt of this Decision what
steps Respondent has taken to comply herewith.2
'In the event that this Recommended Order is adopted by the Board, the
words "a Decision and Order" shall be substituted for the words "the
Recommended Order of a Trial Examiner" in the notice. In the further
event that the Board's Order is enforced by a decree of a United States
Court of Appeals, the words "a Decree of the United States Court of
Appeals Enforcing an Order " shall be substituted for the words "a
Decision and Order.
'In the event that this Recommended Order be adopted by the Board,
this provision shall be modified to read : "Notify the Regional Director, for
Region 20, in writing, within 10 days from the date of this Order what
steps the Respondent has taken to comply herewith."
APPENDIX
NOTICE TO ALL EMPLOYEES
Pursuant to the Recommended Order of a Trial
Examiner of the National Labor Relations Board and in
order to effectuate the policies of the National Labor
Relations Act, as amended, we hereby notify our
employees that:
WE WILL honor and abide by and give retroactive
effect from July 1, 1968, to all the terms and conditions
of the industry agreement executed August 27 , 1968, by
Eastbay Motor Car Dealers, Incorporated, and
Automobile Salesmen's Union, Local 1095, AFL-CIO,
including but not limited to wages, commissions and
other employment benefits , and shall make our
employees whole for any losses they may have suffered
by reason of our refusal to honor and apply the terms
of said agreement.
Dated By
MULLER-GORDON
MOTOR COMPANY
(Employer)
(Representative) (Title)
This notice must remain posted for 60 consecutive days
from the date of posting and must not be altered, defaced,
or covered by any other material.
If employees have any question concerning this notice
or compliance with its provisions, they may communicate
directly with the Board's Regional Office, 13050 Federal
Building, 450 Golden Gate Avenue, Box 36047, San
Francisco, California 94102, Telephone 556-0335.