Sunderland's Inc.

National Labor Relations Board - Board Decisions

Nov 10, 1971

194 N.L.R.B. 118 (N.L.R.B. 1971)

118 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
Sunderland's Incorporated and International Jewelry
Workers Union, Local 30, AFL-CIO. Case
19-CA-5004
November 10, 1971
DECISION AND ORDER
BY CHAIRMAN MILLER AND MEMBERS JENKINS
AND KENNEDY
On June 24, 1971, Trial Examiner Maurice M.
Miller issued the attached Decision in this proceed-
ing. Thereafter, the General Counsel filed exceptions
and a supporting brief.
Pursuant to the provisions of Section 3(b) of the
National Labor Relations Act, as amended, the
National Labor Relations Board has delegated its
authority in this proceeding to a three-member panel.
The Board has considered the record and the Trial
Examiner's Decision in light of the exceptions and
brief and has decided to affirm the Trial Examiner's
rulings, findings, and conclusions,' and to adopt his
recommended Order.2
ORDER
Pursuant to Section 10(c) of the National Labor
Relations Act, as amended, the National Labor
Relations Board adopts as its Order the recommend-
ed Order of the Trial Examiner and hereby orders that
the complaint be, and it hereby is, dismissed in its
entirety.
1 We agree with the Trial Examiner that those cases in which the Board
has found that ratification is a gratuitous process which union negotiators
impose upon themselves, or in which employers have attempted to rely
upon some defect in the ratification process, are not applicable here. The
record in this proceeding discloses that during bargaining negotiations
Riviera, Respondent's attorney and bargaining agent, sought specifically to
determine whether the Union's representatives had the final authority to
accept or reject a contract, and insisted that they come, to bargaining
armed with such authority. The union negotiators, in turn , took this
question back to the union membership but, upon a vote taken among the
members , they were given only the authority to take Respondent's best
offer and bung it back to the membership for ratification. It is thus clear
that, the Union negotiators did not have final authority to accept or reject
a contract offer, and, as the Trial Examiner found, ratification was made a
precondition of arrival at a binding agreement. Here such ratification did
not take place prior to Respondent's withdrawal of assent to proposed
contract terms.
2 We do not adopt or pass upon the Trial Examiner's "Postscript,"
section III, D , of his Decision, as it is unnecessary to the determination of
the issues in the present case
TRIAL EXAMINER'S DECISION
STATEMENT OF THE CASE
MAURICE M. MILLER, Trial Examiner: Upon a charge
filed October 22, 1970, and duly served, the General
Counsel of the National Labor Relations Board caused a
Complaint and Notice of Hearing to be issued and served
upon Sunderland's Incorporated, designated as Respon-
dent in this decision. The Complaint issued January 7,
1971; therein, Respondent was charged with unfair labor
practices affecting commerce within the meaning of Section
8(aX5) and (1) of the National Labor Relations Act, as
amended. 61 Stat. 136, 73 Stat. 519. Within Respondent's
duly filed answer, certain factual statements in General
Counsel's Complaint were conceded; Respondent, howev-
er, has denied the commission of any unfair labor practice.
Pursuant to notice, a hearing was held in Seattle,
Washington, on March 16, 1971, before me. The General
Counsel and Respondent were represented by counsel.
Each party was afforded a full opportunity to be heard, to
examine and cross-examine witnesses, and to introduce
evidence pertinent to the issues. Since the hearing's close,
briefs have been received from General Counsel's repre-
sentative and Respondent's counsel. These briefs have been
duly considered.
FINDINGS OF FACT
Upon the entire testimonial record, the documentary
evidence received, and my observation of the witnesses I
make the following findings of fact:
1. JURISDICTION
Respondent raises no question with respect to General
Counsel's jurisdictional claim. Upon the Complaint's
relevant factual declarations-specifically, those set forth
in detail within the second paragraph thereof-which are
conceded to be correct, and upon which I rely, I find that
Respondent was, throughout the period with which this
case is concerned, an employer within the meaning of
Section 2(2) of the Act, engaged in commerce and business
activities which affect commerce within the meaning of
Section 2(6) and (7) of the Act. Further, with due regard to
presently applicable jurisdictional standards, I find asser-
tion of the Board's jurisdiction in this case warranted and
necessary to effectuate the statutory objectives.
II. THE LABOR ORGANIZATION INVOLVED
International Jewelry Workers Union, Local 30,
AFL-CIO, designated Complainant Union within this
decision, is, and at material times herein has been, a labor
organization within the meaning of Section 2(5) of the Act,
as amended, which admits certain of Respondent's
employees to membership.
III. THE UNFAIR LABOR PRACTICE CHARGED
A. Issue
This case's central question may be simply stated. Did
Seattle counsel Dan Riviera, who had been retained as
Respondent's representative in connection with certain
collective-bargaining negotiations, reach an October 1,
1970, consensus with Complainant Union herein-while
functioning in Respondent's behalf-regarding the terms of
a new collective-bargaining contract, thereby rendering
Respondent's conceded refusal to sign a contract draft
which compassed the terms of their consensus, thereafter,
violative of Section 8(a)(5) of the statute? Confronted with
General Counsel's contention that Respondent has, indeed,
194 NLRB No. 15
SUNDERLAND'S INC.
failed and refused to sign a contract with respect to which
its designated collective -bargaining spokesman had orally
declared Respondent 's concurrence , the firm's counsel
proffers several related defenses . He contends : (a) That
Respondent 's designated representative did not, during or
following the collective -bargaining session noted , declare
his client 's "acceptance" with regard to Complainant
Union's contractual proposal; (b) that Complainant
Union's spokesmen , since they were chargeable with
knowledge that Respondent was then in severe financial
straits, lacked any reasonable basis for their professed
belief that Respondent 's representative had really
"accepted" their contractual proposals ; and (c) that,
despite a possibility that the conduct of Respondent's
designated representative-while functioning as the so-
called "ad hoc" collective-bargaining spokesman for certain
other concerned employers-could be construed as show-
ing Respondent 's apparent concurrence , that concurrence
was withdrawn before Complainant Union's membership
had ratified their purported contractual consensus , or taken
action relying thereon.
B. Facts
1. Background
For some years past-never specified for the record-the
Complainant Union herein has maintained collective-
bargaining relationships with a number of Seattle jewelry
firms. Their most recent contract, a master agreement
signed by each covered firm with an extended 2-year term,
had a September 30, 1970 , termination date.
The firms privy thereto , some 15, fell into two categories:
manufacturing or production shops, and trade repair shops.
The former manufacture general lines of jewelry which they
merchandise to wholesalers and retail stores; trade repair
shops do repair work for various retail jewelry dealers but
may also produce some custom made jewelry on special
order . Within the Seattle area , there are two major, and
three minor, production shops. Respondent herein , together
with another firm, Gem East Corporation d/b/a Northwest
Jewelers, has throughout the period with which this case is
concerned been considered a major production shop.
According to Patrick Druxman , Gem East's vice-president,
Sunderland's is his firm's principal competitor within the
Seattle area and possibly elsewhere . Complainant Union's
contractual relationships with both Respondent and Gem
East during their most recent 2-year contract terms
included special "riders" with provisions specifically
drafted to cover matters of special concern in production
shops.
2. Contract negotiations begin
Sometime during July 1970 reopening notices were sent
to those firms with which Complainant Union had a
contractual relationship . Thereafter, sometime during the
middle of August, Complainant Union's spokesmen met
with a group of employers for a preliminary bargaining
session . However, no representatives of Respondent or
Gem East were there ; three other small "one-man" shops
were likewise unrepresented . Subsequently , Helen Davison,
119
Complainant Union's secretary-treasurer and business
agent, conferred with Ray Sunderland , Respondent's
president, and Jerry Gallagher , Respondent 's vice presi-
dent ; they reviewed Complainant Union 's August 11
contract proposals . Davison's credible testimony regarding
this last conference, standing without contradiction,
warrants a determination that Respondent 's representatives
first requested renewal of their reopened contract without
change for a further 1-year term . Then, with particular
reference to Complainant Union's new contract proposals,
Respondent's spokesmen questioned several provisions.
Davison's testimony, however, will within my view support
a determination that Sunderland and Gallagher finally said
they would "go along" with Gem East , so far as production
workers' wage rates were concerned.
Complainant Union 's next bargaining session convened
on August 23; representatives of all the concerned
employers , Respondent included , were present. Additional-
ly, Dan Riviera , a Seattle attorney , was present solely as the
designated collective -bargaining spokesman for Spring
Ring Stylists , Inc., one of three small production shops. The
record with respect to this bargaining session , however,
merits characterization as limited . Sometime during the
session, I find , the Complainant Union was effectively
given notice by each employer present that , despite their
common participation in coordinated bargaining sessions,
they proposed to bargain individually looking toward the
negotiation of separate contracts . Complainant Union's
membership , the record shows , had voted to seek one
contract with these various jewelry firms . The evidence
received, however, fails to clearly reveal whether they were
seeking a renegotiated single master contract which all
concerned employers would sign, or 15 separate contracts
with matching terms and conditions . Two firms, Spring
Ring Stylists , Inc., and Gem East, had previously notified
Complainant Union's secretary-treasurer , before this
August 23 bargaining session , that they would not
participate as members of any multiemployer bargaining
group . The Union representatives were told categorically
that the employers present would not bargain for a single
master contract; so far as the record shows, Complainant
Union did not thereafter seek any modification or
retraction with respect to this declared employer position.
With respect to substantive contract questions , discussion
during these August 23 talks seems to have ranged widely.
Many of those employer representatives who were present,
the record shows , verbally proffered divergent views with
respect to particular contract proposals . With respect to
some few matters , however, definitive consensus was
reached. Some counterproposals proffered by various
employers were subsequently referred to Complainant
Union's membership , which rejected them.
Within a September 14 letter , dispatched shortly
following a September 10 bargaining session which he did
not attend, counsel Riviera notified Complainant Union
that his law firm , which already represented Spring Ring,
would likewise thereafter represent Respondent with
reference to these pending collective-bargaining negotia-
tions. The Union was, likewise, reminded that Respondent
was not a member of any employer group and would be
bargaining individually. Riviera then presented Complain-
120 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
ant Union with a few counterproposals , primarily derived
from their prior contract talks. During subsequent bargain-
ing sessions , which will be discussed further hereinafter,
Riviera functioned in representative capacities for both of
his jewelry firm clients , Spring Ring and Respondent
herein.
On September 23, Complainant Union 's spokesmen met
with employer representatives for another bargaining
session . The record-with respect to developments during
their discussion-presents no significant conflicts . Secretar-
y Treasurer Davison testified , with Riviera's general
concurrence , that substantial consensus was reached with
regard to certain proposed changes in basic wage rates; the
witnesses did differ , however, with respect to the participa-
tion of Sunderland 's therein . While a witness Davison
professedly could not recall any significant statement, with
respect to wage rate matters properly chargeable to Riviera
during this bargaining session, save for a promise which he
made that he would submit a rewritten "cost of living"
provision which would protect all parties. When questioned
then regarding Sunderland 's reaction during these basic
wage rate discussions , Complainant Union 's secretary-
treasurer declared her belief that Respondent's president
merely "sat there with his head in his hands " without
making "too many" remarks. Riviera, however, while
conceding generally that all participating concerned
employers, with Respondent the sole exception, were
prepared to "go along" with Complainant Union's
proposed wage increases conditioned upon their realization
of satisfactory adjustments regarding other matters in
dispute, recalled rather vaguely that Respondent 's presi-
dent had shaken his head negatively while the basic wage
rate consensus was developing , and had thereafter declared
"I can't do it" while throwing up his hands. The testimonial
conflict thus presented , between Davison and Respondent's
representative , will be discussed subsequently , within this
decision.
With respect to further bargaining, during the course of
this September 23 session, the present record provides little
information . Davison's testimony which I credit, would
warrant a determination, merely, that when the session
concluded there were only three "substantial" questions
remaining unsettled . These were questions concerning the
proposed contract's geographic coverage , the precise
language of the proposed "cost of living" provision, and the
length of the waiting period which would be required as a
precondition for pension fund eligibility.
3. - Final bargaining sessions
With matters in this posture , the services of a Federal
mediator were requested . On September 30, negotiations
continued at the Federal Mediation and Conciliation
Service 's Seattle headquarters. When the parties present
were requested to introduce themselves , Riviera declared,
the record shows, that he was merely representing Spring
Ring and Respondent. Nevertheless, during the relevant
discussions which followed , Respondent 's counsel seems to
have played a principal role. Before the session closed, for
example, he questioned the authority of Complainant
Union's spokesmen to negotiate a definitive settlement and
declared that future bargaining would be futile unless
Union representatives could demonstrate their power to
"accept" whatever contractual consensus the parties might
reach. Complainant's spokesmen were requested to secure
such powers from their Union 's membership.
That evening, Complainant Union 's membership met in
special session . A secret ballot was conducted ; thereby the
body's negotiations committee was granted "the power to
accept the best offer possible from management ,... and
bring this back to the members for final ratification."
According to Davison, this affirmative membership vote
signified that-should the negotiations committee return
with employer proposals for wage increases sufficient to
provide a specified minimum hourly rate , plus improved
health, welfare and pension provisions-final ratification
would be forthcoming . The committee was, however,
further granted the power to set a strike date , should it
deem such action necessary.
When the parties met for their October 1 session in the
Federal Mediation and Conciliation Service headquarters,
Respondent's counsel, presumably by common consent,
became the principal spokesman for those employers
present . One, Don McCune , was unavoidably absent. The
cross-table discussion was, the record shows, somewhat
disconnected , disorganized, and confusing; pursuant to one
company participant's suggestion that their negotiations
would have a better prospect of success with a single,
knowledgeable person designated to present the views of
the concerned employers present , Riviera was conceded
that function.
Complainant Union's spokesmen, the record shows, first
notified the employers present that , should they reach a
contractual consensus , ratification of that consensus by the
Union's membership would still be required ; the employers
were reassured, however , that the membership's position,
with respect to contract terms, had been well defined, and
that ratification could be considered certain for any
contractual agreements which the Negotiations Committee
would consent to present for membership consideration.
The company representatives were, nevertheless, told
further that Complainant Union's membership had author-
ized strike action, and that there would be a strike call by
noon of the following day (October 2, Friday) should no
agreement be reached.
Complainant Union's spokesman then presented some
slightly revised contract proposals . Those with respect to
which substantial consensus had previously been reached
were quickly reviewed . Still others, considered "up in the
air" and open for further discussion , were canvassed
generally . Riviera, pursuant to his promise , presented a
revised cost-of-living provision . The concerned employers
finally decided to caucus , separately with regard to certain
questions not yet resolved , while Complainant Union's
representatives waited for their decision.
No further joint sessions were held. The Federal mediator
and Riviera shuttled back and forth, several times , between
the employer's caucus and Complainant Union 's represent-
atives, conferring with each and carrying counterproposals.
For the record , both Patrick Druxman, Gem East's vice
president, and Riviera testified with regard to discussions
within the jewelry firms ' caucus . At this stage , within, my
view, no detailed factual determinations regarding the
SUNDERLAND'S INC. 121
general course of those discussions would seem required.
Should their consideration hereinafter be considered
necessary to facilitate a proper disposition of some
contentions presented in Respondent's behalf, these caucus
deliberations will be reviewed within a subsequent section
of this decision. Following some sustained discussion
within the employer's caucus, Riviera concluded, the record
shows, that a substantial consensus, with respect to
Complainant Union's contract demands, had been reached.
Since it was then lunch time, the attorney advised the
employers, I find, that he would come back after lunch and
communicate with Complainant Union's spokesmen,
regarding their readiness to concur with the Union's
contract proposals. According to Druxman, whose testimo-
ny in this respect I credit, the several employers present
were told that it would not be necessary for them to return.
When the caucus thereupon disbanded, Riviera fortui-
tously encountered Complainant Union's representatives in
the Court House hallway, leaving for lunch. Taking
advantage of this chance encounter, he communicated his
message . The present record with respect to that communi-
cation provides this case's central point of testimonial
conflict. With respect thereto, General Counsel's position
rests upon Davison's recollection. She testified as follows:
We were then to break for lunch and Dan Riviera
said, "Now, let's settle now." And Dan Riviera came
back and said that they had agreed and the union had
won.
Complainant Union's secretary treasurer declared, categor-
ically, that Riviera did not specifically during this hallway
conversation mention Respondent, or any other concerned
employer. When queried further in this connection, during
cross-examination she testified as follows:
Q. Do you have any recollection of Mr. Riviera or
anybody else suggesting to you on October 1 around
noon when you received word from Mr. Riviera that the
employers had accepted the union proposal? Do you
recall Mr. Riviera saying anything about Sunderland's
not being part of that group?
A. No.
Q. Do you recall anything earlier from Mr. Riviera
or anyone else suggesting that Sunderland's was not
part of this dialogue between the employers and the
union?
A. No.
Questioned, then, regarding the factual basis for her
subjective conclusion that Respondent had likewise
"agreed" with respect to their contract, Davison testified
that she had so concluded because of her "belief" that, had
Ray Sunderland not concurred with the rest of the
concerned employers, their contract would never have been
settled, since the other firms would never have agreed to
sign a contract based on Complainant Union's proposal
while "someone else" remained uncommitted. According to
Davison "it was just assumed" afterwards that she would
prepare 15 identical contract drafts, embodying the
contractual consensus reached, and that Riviera would
"rewrite" a few provisions to provide her with language
guidelines. Riviera, the Respondent's sole witness with
regard to this significant hallway conversation, recalled its
substance in somewhat less positive terms. His composite
testimony, with respect thereto, reads as follows:
We got close to about 12:00 o'clock, and by this time
. it looked like if they couldn't get together there was
going to be a strike . . . I don't recall now what the last
thing was that the union people said to me, or what
issue it was, but in any event I went back into the other
room and asked those who were there - what their
view was on it. Sunderland said, "No" they couldn't,
shook his head and said no. The others pretty much
were for it, whatever the issue was. By this time, the
union people were out in the hall going to the elevator. I
came out into the hall and said, "OK you've got to take
it to the group and get it settled. You've got this fact to
be settled." Whatever it was ... [Oh], before we left the
courthouse, there was a discussion , a few comments,
we'll be back at 1:30. I don't recall saying it myself but I
recall hearing it. "We 'll be back at 1:30," meaning
Sunderland's people .. .
Riviera did concede that Respondent had not been
specifically mentioned during this hallway conversation.
Then, when asked again whether his reference to a planned
1:30 return had been made during the hallway conversa-
tion , Respondent's spokesman first said he was "quite sure"
but then said he was not positive:
I have a recollection now that I was coming back at
1:30. Whether I said it or it was said to me, and I just
generally understood it was [,] I can't say now but I
remember that. I don't recall saying or indicating now
that I was to tell the union, to tell the union something
at 1:30. That I do not recall . . . I don't recall telling
anyone that I would be back at 1:30. I knew I was
supposed to be back at 1:30 and I may have said it .. .
I don't recall saying it myself. I recall somebody saying
it, that I'd be back at 1:30... what I'm trying to say, I
understood in my mind that the two Sunderland's
people and I^would be back at 1:30 but I don't recall
myself saying, "I'm going to be back at 1:30."
Confronted with Davison's testimony that he had used the
term "agreed" during this hallway conversation, Riviera
conceded a failure of recollection. His testimony in this
connection , however, reads as follows:
I can't tell you the precise words I said, but I know
that when I was in the hall, the context of the
conversation we had that day, I know that I didn't say
everyone agreed except Sunderland. I didn't say that. I
said, OK, it's a deal, or something to that effect. [The]
majority group, other than Sunderland, had agreed on
it, but I know I didn't say that.
Respondent's representative declared it was his
"understanding" that every participant in the employer's
caucus had agreed regarding the Union's proposals except
Respondent herein; further, the record reflects his pro-
fessed "belief" that Complainant Union's representatives
were aware Respondent should not be considered privy to
the consensus reached. In this connection, however, Riviera
was finally asked why his declaration of contract
"acceptance" had been generalized, without any specific
reference to the fact that Spring Ring, inter aria, had
accepted, but that Respondent had withheld concurrence.
In reply, the attorney declared that:
122 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
If I could tell you how negotiations go, people going
in from one room to another, if I could go back and do
everything all over again, maybe I should have put it in
writing, but the fact of the matter is that we were
dealing as human beings with one another, and I
thought it became perfectly plain that Sunderland's
were not going to go along with the package at all. It's
easy to criticize now and say, "Well, you should have
made a speech."
On this note, Riviera's testimony, particularly with regard
to this October 1 noon hour hallway conversation, was
concluded.
With matters in this posture, I conclude and find that
Respondent's collective-bargaining representative during
the hallway conversation now under consideration did,
indeed, tell Complainant Union's representatives, without
specifying any exceptions, that their contractual proposals
had won "employer" concurrence; likewise, I find that,
when he did so, he did not declare Respondent a
nonparticipant. Further, with due regard for Davison's
positive testimony on the point and Riviera's contrasting
lack of certainty, I am satisfied that Respondent's
collective-bargaining representative made no comment
during the conversation in question regarding his prospec-
tive 1:30 return, following a luncheon break, for any
purpose whatsoever. Complainant Union's committee
members, I find, thereupon went to lunch and then "went
back to work" presumably at Union headquarters.
4. Subsequent developments
Sometime between 2:00 and 3:00 o'clock that afternoon,
Riviera telephoned Complainant Union's secretary-treasur-
er. Mrs. Davison was advised that due to Ray Sunderland's
precarious financial status the Respondent "could not
afford" to "go along" with the contractual consensus which
had just been reached. The record shows that, since April
1970, preceding these contract negotiations, the Respon-
dent had been involved in chapter 11 reorganization
proceedings, under the Federal bankruptcy law. Complain-
ant Union's secretary-treasurer was, the record shows, fully
cognizant of this situation; she had, before October 1,
attended "all but one" of several court-sponsored hearings
or meetings held in connection with these reorganization
proceedings. She had, further, held some "off the cuff"
discussions with Ray Sunderland regarding various ways in
which Respondent's workers might help relieve a continu-
ing drain on the firm's cash resources; none of these
discussions had, however, borne fruit. With matters in this
posture, I am satisfied that when Riviera referred to
Respondent's financial straits during the telephone conver-
sation with which we are now concerned Mrs. Davison
understood that he was, particularly, referring to Sunder-
land's chapter 11 reorganization. The record reflects a
testimonial conflict regarding Davison's reply. According
to Respondent's collective-bargaining representative,
whose recollection had to be refreshed, Mrs. Davison
conceded her understanding regarding the situation and
declared that Complainant Union would not "do anything"
such as calling a strike until sometime after Respondent's
next bankruptcy court hearing. Davison, however testified
that Riviera was merely told she could do nothing, at the
moment, but that she would consult with Complainant
Union's officers to see what could be done with respect to
"holding off" possible strike action against the firm. With
due regard for the record considered in totality and,
particularly, in view of Riviera's lack of certainty I credit
Davison's proffered recollection detailing her response.
During their conversation, I find, Riviera did refer to his
professed "expectation" that they were to meet at the Court
House after lunch to conclude negotiations with regard to
Respondent's contract particularly; Davison, however,
replied that the Union negotiators considered their
bargaining concluded.
Riviera then concluded their telephone conversation, I
find, with a promise that he would "get in touch" with
Complainant Union's secretary-treasurer. Later that day,
so Davison credibly testified before her recollection was
purportedly refreshed, he visited Complainant Union's
office and provided her with a reworked and redrafted copy
of Complainant Union's previously submitted contract
proposals, proffered for her guidance in preparing the
requisite language for final contract drafts.
That evening, pursuant to her telephonic committment
noted, Complainant Union's secretary- treasurer did confer
with her organization's officers. She told them that she did
not think it would be "smart" to strike Respondent's shop
then and there because of Sunderland's financial problems;
that this would help neither him nor the workers concerned.
Davison requested the Union officers, she testified, to
consider "some kind of relief" for the respondent firm,
particularly a decision to refrain from striking until some
time after October 23rd, when the firm's next bankruptcy
court appearance was scheduled. According to Complain-
ant Union's secretary-treasurer, this forbearance would be
calculated to help Sunderland through his "financial bind"
so that he could "subsequently" sign the contract. The
Union officers, so Davison testified concurred with this
suggestion.
Meanwhile, during the following week, Complainant
Union's secretary-treasurer did prepare a number of
contract drafts, with identical language; these were
subsequently sent to every firm still in business which had
participated in the recently concluded collective-bargaining
negotiations. They were, later, returned with signatures by
each represented firm, except Respondent herein. One
small shop operator, Don McCune, likewise failed to sign
Complainant Union's proffered contract; sometime during
October's first week, so Davison credibly recalled, he had
released his employees and become a self-employed Union
member.
The parties' October 1 contractual consensus had
previously been ratified during a meeting held the night of
the day it was reached by Complainant Union's member-
ship; Davison testified, credibly, that Respondent's em-
ployees, some of whom had attended the ratification
meeting, had voted upon the ratification question.
On October 22, Complainant Union's charge which
initiated the present proceeding was filed. Thereafter, on
November 20, the Union members in Respondent's hire
finally did strike the firm, purportedly because of their
unwillingness to work in a nonunion shop. According to
Complainant Union's secretary-treasurer, whose testimony
SUNDERLAND'S INC. 123
in this respect has not been disputed , Respondent's
management "opened the following day as a non-union
shop" hiring nonunion workmen.
C. Conclusions
With matters in this posture, we confront the first of
several questions which the present record presents: Did
Complainant Union and Respondent herein reach
"agreement" regarding a new collective-bargaining con-
tract, following the conclusion of their October 1 negotiat-
ing session?
General Counsel would have this Board find that, when
Riviera told Complainant Union's negotiators , either in
words or substance , "O.K., it's a deal" during their
noontime hallway conversation, such communication
constituted a binding "acceptance" with respect to
Complainant Union's contract proposals, on behalf of each
and every concerned employer, and particularly on behalf
of his two clients, Spring Ring Stylists, Inc., and
Respondent herein . Respondent, however, presses a
contention that Riviera 's generalized communication was
not intended to convey its concurrence with respect to
whatever contractual consensus some other concerned
employers might have reached ; that Complainant Union's
representatives either knew or had reason to know that
Respondent's management had not really "accepted" their
contract proposals ; and, therefore , that Complainant
Union was never misled regarding Respondent 's position,
despite counsel's failure to declare the firm's nonconcur-
rence specifically.
Respondent 's line of defense with respect to this
particular facet of General Counsel 's case cannot stand.
With respect thereto, first, some matters may be taken as
data. Clearly, throughout the period with which this case is
concerned , Riviera concededly functioned as Respondent's
designated representative "with reference to pending
negotiations" 'looking toward a new collective-bargaining
contract . In that capacity, he necessarily possessed "actual"
power rather than mere "apparent authority" to negotiate a
contractual consensus in Respondent 's particular behalf
and to declare Respondent's concurrence with respect
thereto. The brief filed in Respondent's behalf , so far as I
can tell , raises no challenge with respect to these
propositions ; counsel presumably seeks a determination,
rather, that Riviera's crucial communication , though
proffered within the scope of his authority, was never
intended to commit Respondent , and could not reasonably
have been so construed . While a witness, Riviera persistent-
ly declared that his October 1 statement had not been
intended to bind Respondent ; further, he declared his
"belief" that, throughout, Complainant Union' s negotiators
really understood that Respondent had not agreed with
respect to various matters, regarding which he had
communicated the concurrence of other concerned em-
ployers. Riviera's professed belief in this respect, so counsel
would have me find , should be codered warranted
because:
1. Ray Sunderland had made manifest several times
during various bilateral negotiating sessions the fact
that he could not "go along" with some Union contract
proposals , with respect to which his fellow employers
seemed disposed to yield.
2. The so-called "jurisdictional" question which
Sunderland 's, alone , had raised regarding their prospec-
tive contract's geographic coverage had not yet been
settled.
3. Sunderland's known involvement with respect to
chapter 11 corporate reorganization proceedings, under
Federal bankruptcy law, raised a significant question,
with respect to which Complainant Union was knowl-
edgeable, regarding the firm's prospective capacity to
meet various contractual commitments which other,
more viable, firms could presumably satisfy.
4. Riviera and Respondent 's management team,
together with Complainant Union's committee mem-
bers, had mutually understood that they were to resume
negotiations, with particular reference to Respondent's
situation, following their luncheon break.
These considerations , so counsel presently contends , should
reasonably have persuaded Complainant Union 's repre-
sentatives that Riviera's generalized October 1 announce-
ment regarding a contractual deal was never intended to
commit Respondent herein; counsel would have this Board
find, therefore, that so far as Respondent was concerned
Riviera's message did not constitute the binding acceptance
which General Counsel now claims.
First: I note that the record reflects testimonial conflict
with regard to Sunderland's conduct during collective-
bargaining sessions ; Mrs. Davison's testimony , which Vice
President Druxman of Gem East substantially. corroborat-
ed, would warrant a determination that Respondent's
president, though he did reveal some concern and distress
when confronted with various monetary contract propos-
als, did not clearly declare himself determined to reject
them . Such testimony , within my view, merits credence.
Further, were I to conclude , nevertheless, consistently with
Respondent's contention that Sunderland had made his
reluctance to concur with Complainant Union 's proposals
perfectly clear, determination would still be warranted,
within my view , that Complainant Union 's negotiators were
entitled to rely on Riviera's subsequent October 1
declaration, proffered without qualification, that a general
contractual consensus had been reached. Positions strongly
held while collective-bargaining negotiations are in prog-
ress nevertheless are frequently yielded when circumstances
dictate some immediate necessity for consensus. More
particularly, such positions may be yielded , with relatively
minor misgivings , when some prospect of strike or lockout
has become manifest . While a witness , Riviera conceded
that this sometimes happened. Such pressures toward
agreement were clearly present herein. Thus, when
Respondent's spokesman communicated the generalized
message that a contractual deal had been reached , without
simultaneously declaring Sunderland's nonconcurrence,
Complainant Union's negotiators were, within my view,
entitled to presume that Respondent's previously expressed
qualms with respect thereto had been relinquished or laid to
rest.
Second: Sunderland's position regarding his prospective
contract's geographic coverage never seems to have been
considered as raising a serious question likely to prevent or
124 DECISIONS OF NATIONAL LABOR RELATIONS BOARD
delay consensus. The present record gives no indication
that it was ever discussed, comprehensively, during the
negotiations. And Riviera, while a witness, declared his
prior and present conviction that whatever difference there
may have been between the parties with regard to this
matter could have been settled quickly. With matters in this
posture, I find, Complainant Union's negotiators were once
more privileged to presume that when Riviera, while
making his October 1 noontime announcement, failed to
designate this question as not yet settled his omission
signified Respondent's ultimate determination that the
question was not sufficiently significant to prevent or delay
agreement.
Third: Though Complainant Union's secretary- treasurer
may have been knowledgeable with respect to Respondent's
straitened financial condition, nothing within the present
record will support a determination that she had reason to
believe Respondent would not or could not, because of its
financial situation, negotiate a collective-bargaining con-
tract. Within his brief, General Counsel notes that:
The employers, as evidenced by their subsequent
insistence to the Union that Sunderland be required to
sign the same agreement, and the Union all had the
impression that the Respondent was negotiating in the
same manner as the others in attendance.
And the present record, not previously cited in this
connection, will, in my view, fully support General
Counsel's factual contention. Thus, Respondent's known
involvement with respect to chapter 11 corporate reorgani-
zation proceedings cannot be considered, per se, sufficient
to have put Complainant Union's spokesmen on notice that
Respondent's participation in some shared contractual
consensus would be less than likely.
Fourth: Respondent's contention that Riviera, Sunder-
land, Gallagher, and Complainant Union's committee
members shared some mutual understanding that negotia-
tions, with particular reference to Respondent's situation,
would continue following their October 1 luncheon break
simply lacks record support.
With matters in this posture, then, I conclude and find
that Riviera's noon hour declaration that a contractual deal
had been reached represented a consensual acceptance
compassing Complainant Union's then pending contract
proposals, with respect to which Respondent was privy.
Nevertheless, despite this conclusion, I find merit in
Respondent's second principal contention, that the firm's
so-called "apparent agreement" had been withdrawn
before Complainant Union's membership was called on to
ratify their presumed contractual consensus.
Substantially, the present record shows that Respon-
dent's designated representative, functioning under pres-
sure within the context of a somewhat volatile, confused
situation, had effectively committed his client to contractu-
al provisions with respect to which Respondent's manage-
ment team had really noted serious reservations. When
apprised of Respondent's reluctance to proceed within a
comparatively short time, Riviera notified Complainant
Union's secretary-treasurer that, whatever construction
Complainant Union's negotiators may have given his
previous noon hour declaration, so far as Respondent was
concerned the firm could not go along with contractual
commitments matching those which the other firms privy to
the recently concluded negotiations had reached. This
telephonic notification within my view consituted an
effective withdrawal of Respondent's previously communi-
cated consent to be bound. As Respondent's counsel in his
brief notes:
The participants may have different recollections as to
the explanation given by Mr. Riviera for Sunderland's
position, but there can be no question that the Union
understood by 2 p.m. on October 1, 1970, prior to
membership ratification of the contract, that Sunder-
land's was not a part of the agreement.
General Counsel's representative contends that this at-
tempted withdrawal should be considered untimely. He
suggests in his brief that:
When the Respondent communicated acceptance to the
Union, abinding agreement was reached . Clearly, in
this instance, ratification by the membership was a pure
formality. The membership had given its bargaining
committee complete authority to conclude a binding
agreement with the employers subject only to the
formality of ratification.
Despite this contention's superficial plausibility, I cannot
concur. True, when Respondent's collective-bargaining
representative communicated his client's presumed accept-
ance to Complainant Union's negotiators, one necessary
step looking toward a final and binding contractual
settlement had, so I find, been taken. However, with due
regard for the record considered in totality, determination
cannot be considered warranted, within my view, that
promised ratification by the Complainant Union's mem-
bership would be a mere formality. The parties were on
notice that a contractual consensus presented for consider-
ation by Complainant Union's Negotiations Committee
would, most likely, be ratified; Secretary-Treasurer Davi-
son, while a witness , conceded, however , that the consensus
could have been rejected.
We are therefore confronted with a prompt notification,
directed to Complainant Union by Respondent's designat-
ed collective -bargaining representative , that so far as
Sunderland's was concerned no contractual consensus
subject to ratification had yet been reached. Complainant
Union's membership had not yet considered the matter;
Complainant Union's leadership, certainly, had taken,no
action predicated on Respondent's presumptive contractual
commitments. With matters in this posture, I conclude and
find, Respondent's management cannot be considered
estopped from withdrawing whatever signal of contractual
acceptance Riviera may previously have given.
Within his brief, General Counsel cites for its presump-
tive relevance with respect to the present situation the
settled decisional doctrine that once consensus has been
reached with union negotiators , binding enforceable
commitments result, so that concerned employers may not
rely upon some claimed failure or defect in union
ratification processes to excuse their failure to sign
proffered contract drafts. General, Asbestos & Rubber
Division, Raybestos-Manhattan, Inc., 183 NLRB No. 27;
Houchens Market of Elizabethtown, Inc., 155 NLRB 729; cf.
M & M Oldsmobile, Inc., 156 NLRB 905; North Country
SUNDERLAND'S INC.
Motors, Ltd, 146 NLRB 671. These references, however,
miss the mark.
This Board, to be sure, has declared that ratification will
not be considered a condition precedent to the conclusion
of an agreement, but rather a gratuitous condition which
union negotiators may have imposed upon themselves.
Houchens Market, supra. We are not, however, confronted
herein with a respondent employer contending that some
failure or defect in Complainant Union's ratification
process vitiates or cancels its statutory obligation to sign a
proffered contract compassing a consensus previously
reached. Rather, Respondent contends that nothing
remained, so far as Respondent was concerned, which
Union members- could ratify, since Riviera gave Davison
telephonic notice regarding his client's position before word
regarding its presumed participation in the general
contractual consensus had been communicated to Com-
plainant Union's membership.
Significantly, perhaps, Davison took no contrary posi-
tion; she did not protest Riviera's declaration, nor did she
presume to declare it futile. Rather, Complainant Union's
secretary-treasurer committed herself to seek a postpone-
ment of possible strike action directed against Respon-
dent's shop, looking toward the chance that Ray Sunder-
land might subsequently sign a proffered contract draft.
With matters in this posture, Respondent's contention
that its putative acceptance had been withdrawn before
Complainant Union's ratification deserves Board concur-
rence.
D. Postscript
Further and finally, note should be taken, in my view,
that a Board Order finding Respondent guilty of some
Section 8(a)(5) violation and directing Respondent's
management to sign Complainant Union's proffered
contract might well finally prove nothing more than an
exercise in futility.
Reference has been made to Respondent's present
involvement in chapter 11 reorganization proceedings
looking toward a so-called "arrangement" under Federal
bankruptcy law. In connection with such proceedings, the
governing statute (11 USCA §713) provides, inter alia, that:
Upon the filing of a petition, the Court may ... (1)
permit the rejection of executory contracts of the
debtor, upon notice to the parties to such contracts and
to such other parties in interest as the court may
designate... .
See, further, in this connection, 11 USCA §753, and
§778(B). Collective-bargaining agreements have been held
executory contracts within the meaning of this statutory
provision, subject to rejection by referees in bankruptcy,
upon proper notice, where the referee finds that such a
contract's continued effectuation would be detrimental to
the debtor's estate. In re Klaber Bros., Inc., 173 F.Supp. 83
(D.C.N.Y. 1959) 44 LRRM 2176; In re Overseas National
Airways, Inc., 238 F.Supp. 359, 360, 361-362 (D.C.N.Y.
1965); Compare Carpenters Local Union, No. 2746, United
Brotherhood of Carpenters and Joiners of America,
AFL-CIO v. Turney Wood Products, Inc., et al., 289
F.Supp. 143 (D.C.W.D. Ark. 1968), dealing with the same
125
question in connection with a full bankruptcy proceeding,
and Durand v. N.L.R.B.; In re Turney Wood Products, Inc.,
70 LRRM 2651 (D.C.W.D. Ark. 1969) disposing of this
Board's claimed interest therein.
Should the Board, therefore, see fit to direct that
Respondent sign Complainant Union's proffered contract
now, such a directive could, conceivably, be nullified
shortly thereafter within appropriate chapter 11 reorganiza-
tion proceedings under 11 U.S.C.A. §713 and related
statutory provisions. The Board's statutory mandate could
hardly be considered responsibly effectuated by affirmative
relief calculated merely to vindicate "abstract principles of
labor-management relations, collective bargaining and
Board jurisdiction" without promoting a significant, viable
result. See Durand v. N.L.RB., supra, at p. 2654. All things
considered, exercises of governmental power susceptible of
being rendered nugatory should, in my view, be eschewed.
CONCLUSIONS OF LAW
In the light of these findings of fact, and upon the entire
record in this case, I make the following conclusions of law:
1. Sunderland's Incorporated is an employer within the
meaning of Section 2(2) of the Act engaged in commerce
and business activities which affect commerce within the
meaning of Section 2(6) and (7) of the Act, as amended.
2. International Jewelry Workers Union, Local 30,
AFL-CIO, is a labor organization within the meaning of
Section 2(5) of the-Act, as amended, which admits certain
of Respondent's employees to membership.
3. All of Respondent's production employees in its
jewelry manufacturing shop in Seattle, Washington,
excluding clerical employees, professional employees,
guards, and supervisors as defined in the Act, constitute a
unit appropriate for the purpose of collective bargaining
within the meaning of Section 9(b) of the Act, as amended.
4. Before October 1, 1970, Complainant Union was
designated or selected by a majority of Respondent's
employees, within the unit described above, as their
representative for collective-bargaining purposes. By virtue
of Section 9(a) of the Act, Complainant Union was then
entitled to recognition as the exclusive collective-bargaining
representative of Respondent's employees within the unit
described, with respect to their rates of pay, wages, hours of
work, and other terms and conditions of their employment.
5. Respondent has not refused to bargain collectively
with Complainant Union herein, within the meaning of
Section 8(a)(5) of the Act, as amended, by its failure or
refusal, on or after October 1, 1970, to execute a written
agreement with Complainant Union embodying provisions
relative to wages, hours, and other terms and conditions of
employment, with respect to which a prior contractual
consensus had purportedly been reached.
Upon the foregoing findings of fact, conclusions of law,
and the entire record, and pursuant to Section 10(c) of the
National Labor Relations Act, I hereby issue the following
recommended:
ORDER
The complaint is dismissed in its entirety.