United Health Care Services

National Labor Relations Board - Board Decisions

Sep 30, 1998

326 N.L.R.B. 1379 (N.L.R.B. 1998)

UNITED HEALTH CARE SERVICES 1379
United Health Care Services, Inc. and Angela Plada,
Petitioner, and Professional, Technical and
Clerical Employees Union, Local 707, an affili-
ate of the National Production Workers Union,
Union. Case 13–RD–2174
September 30, 1998
ORDER DENYING REVIEW
BY MEMBERS FOX, LIEBMAN, HURTGEN, AND BRAME
The Employer’s request for review of the Regional Di-
rector’s Decision and Order (pertinent portions of which
are attached as Appendix) has been carefully considered
by the Board.
Members Fox and Liebman would deny review. In
denying review, they note that in contract bar cases, for
ratification to be a condition precedent to the validity of
the contract, the entire ratification provision must be
stated by an express contractual provision. Appalachian
Shale Products, 121 NLRB 1160, 1162–1163 (1958).
“That principle means that a condition of prior ratifica-
tion cannot be established by parol or other extrinsic evi-
dence.” Merico, Inc., 207 NLRB 101 fn.2 (1973). The
request for review only highlights the patent ambiguity
here by its assertion at different points that ratification
was required by “employees,” “members,” and the
“membership.” In these circumstances, absent express
language requiring ratification by a particular entity or
group, “[t]he condition precedent of ‘ratification’ means
ratification as defined by the Union in its internal proce-
dures.” Childers Products Co., 276 NLRB 709, 711
(1985), enfd. 791 F.2d 915 (3d Cir. 1986).1
Members Hurtgen and Brame would grant review.
They conclude that a reasonable reading of the relevant
language is that ratification by the Union’s membership
was a condition precedent to a contract. Since that ratifi-
cation did not occur, there is no contract bar. Where, as
here, contractual language is ambiguous, the Board will
engage in contract interpretation to determine the effect
of ratification language in a contract.2 In Merico, the
Board engaged in such contract interpretation. It con-
cluded that ratification was a condition precedent to a
contract, and that there was no contract bar.

1 Members Fox and Liebman find that their colleagues’ reliance on
the Board’s decision in Merico is misplaced. In that case, the Board’s
finding that the ratification condition had not been satisfied was prem-
ised on the language of the contractual clause regarding ratification,
which expressly provided for ratification “by the membership”. Here,
despite their colleagues’ willingness to infer such language, Members
Fox and Liebman note that the fact remains that the parties did not
write such language into the contract.
2 Merico, Inc., 207 NLRB 101. However, that contract interpretation
cannot include the examination of parol evidence. See Merico at fn. 2.
In Members Hurtgen’s and Brame’s view, the more reasonable inter-
pretation is that the Local would recommend ratification to its mem-
bers, as distinguished from the notion that the Local would recommend
approval by the National Union. Contrary to Members Fox and Lieb-
man, Members Hurtgen and Brame do not read Merico to require the
phrase “by the membership” or any other magic words. Rather, the
issue turns on a reasonable common-sense interpretation of the lan-
guage that does appear. This is the approach that they have taken here.
Similarly, in the instant case, Members Hurtgen and
Brame conclude that the contractual language provides
that the Local representatives will “recommend” the con-
tract’s “ratification.” The Local contends that this lan-
guage means that the Local will recommend approval by
the National Union, and that such approval is a “ratifica-
tion.” This belated explanation was given, for the first
time, at the hearing in this case.
Since ratification by the membership did not occur as
of the filing of the petition on November 5, Members
Hurtgen and Brame would process the petition, and they
would permit the election to proceed.
Accordingly, as the Board Members are equally di-
vided, and there is no majority to grant review, the Re-
gional Director’s Decision and Order is affirmed. See
Durant v. Essex, 7 Wall. 107, 19 L. Ed. 154 (1869).

APPENDIX
. . . .

4. The Petitioner seeks to decertify a unit of all employees
employed by the Employer, but excluding employees who
regularly work less then 30 hours per week, medical services
personnel, human resources department, social workers, clinical
employees, administrative department employees, supervisors,
managerial employees, executive support staff and confidential
employees as defined in the Act.
The Union had a collective-bargaining relationship with Chi-
cago HMO Ltd. and HMO America Ltd., the Employer’s
predecessor, dating back to 1982. The latest collective-
bargaining agreement between the two was in effect from April
1, 1993 to March 31, 1996. The Employer, United HealthCare,
acquired Chicago HMO soon after this collective-bargaining
agreement was signed. The parties agreed to extend the contract
through October 23, 1996. From February through October
1996, the parties met 18 to 19 times to negotiate a new agree-
ment. On October 8, 1996, the Employer put its final proposal
on the table. The Union negotiating committee stated that it did
not support the proposal but would convey it to the members.
The Union rejected the offer that same day. The Union met
with its members on October 16 to update them on the negotia-
tions. At that meeting, the members authorized the Union to
negotiate further, get a contract and/or to proceed to a strike.
The Union met again on October 30 to discuss a strike vote, but
no strike deadline was set at that time.
The Employer and Union had a final meeting on November
4 which was attended by a Federal mediator. At that meeting
the parties signed a handwritten document drafted by the Em-
ployer’s attorney titled “Tentative Memorandum Agreement.”
The agreement refers to and incorporates several other docu-
ments regarding vacation benefits and health insurance. It also
provides for, inter alla, a $350 lump-sum payment to unit
members upon ratification, a 40-hour work week commencing
upon ratification, car and parking allowances, Medicaid up-
grades, maintenance of seniority for unit employees, with-
drawal of pending unfair labor practice charges, and vacation
benefit pay-outs upon ratification. The final paragraph of the
agreement, placed immediately above the signatures, states:
“This Tentative Memorandum Agreement is entered into this
326 NLRB No. 144
DECISIONS OF THE NATIONAL LABOR RELATIONS BOARD 1380
4th day of November, 1996 and it is agreed that the Union rep-
resentatives and committee will unanimously recommend its
ratification.”
After the document was signed, the Employer asked when
the ratification vote would take place and if the Union commit-
tee would recommend ratification. The Union stated that it
would meet with its members on November 6. Several or most
of the Union representatives indicated that they would recom-
mend ratification. The Employer agreed to let the Union use its
facilities for this purpose and to refrain from discussing the
agreement with employees until after the Union met with its
members. After the signing on November 4, a representative of
the National Union telephoned the National president and read
the agreement to him and recommended its ratification. The
National president approved the agreement that same day. In a
letter dated November 4, the Union withdrew a pending unfair
labor practice charge against the Employer. The withdrawal
was approved on November 18. On November 5, the instant
petition was filed.
At the November 6 meeting, the Union distributed copies of
the agreement, but not the vacation benefit balances attach-
ment, to the members. The members were told to read the
document and, if they agreed with it, to sign a sheet that was
passed around. Ninety-eight members indicated that they sup-
ported the agreement while four dissented. After the meeting,
an Employer representative asked a Union committee member
how the meeting went and was told that, of 107 members pre-
sent, 98 members voted yes and 4 voted no.
The lump-sum payment was disbursed on the next payday
which was November 15. Several other provisions of the
agreement were also scheduled for future implementation. The
40-hour work week was scheduled to be implemented January
1, 1997 and the unused vacation pay was scheduled to be paid
the first week in January. According to the Employer, if the
members had voted no on November 6, it would not have im-
plemented these prospective changes. The Union stated that if
the changes were not implemented, it would file unfair labor
practice charges and grievances seeking arbitration.
The Local Union constitution vests its members with voting
rights except with respect to the negotiation and enforcement of
collective-bargaining agreements. According to the Local rep-
resentatives, its usual practice upon reaching agreement is to
obtain approval of an agreement from the National Union
which constitutes ratification of the collective-bargaining
agreement by the Union, and that ratification by the members is
unnecessary. The Local representatives stated that it usually
goes to its members to explain the agreement and to ask if they
accept it, although it is not required under its constitution to do
so. According to the Union, once the National president ap-
proved the agreement, it was ratified. The Employer was not
told of the National president’s approval.

ANALYSIS

The only question presented in the instant case is whether an
agreement between the Employer and the Union constitutes a
contract bar to a Recertification. If a contract does exist and
conforms to the required elements, the contract is held to be a
bar to an election. Hexton Furniture Co., 111 NLRB 342
(1955). The required elements are set forth in Appalachian
Shale Products Co., 121 NLRB 1160 (1958). In order to meet
the threshold inquiry of the contract bar doctrine, the agreement
must be written, signed before the rival petition is filed, contain
the substantial terms and conditions of employment, encompass
the employees involved in the petition, and cover an appropri-
ate unit. Id., Seton Medical Center, 317 NLRB 87 (1995). Ad-
ditionally, where ratification is a condition precedent to con-
tractual validity by an express contractual provision, the con-
tract will be ineffectual as a bar, unless it is ratified prior to the
filing of a rival petition, but if the contract itself contains no
express provision for prior ratification, prior ratification is not a
condition precedent for the contract to constitute a bar to an
election. Appalachian Shale Products Co., supra at 1163. Most
of the requisite elements of a contract appear to have been met
as the document was written, signed, contained the substantial
terms and conditions of employment, and covered employees in
an appropriate unit. These factors were not points of contention
at the hearing. Instead, the parties disagree over whether ratifi-
cation by Union members was a required condition precedent
necessary to validate the agreement signed on November 4,
1996.
The language in the agreement in dispute states “This Tenta-
tive Memorandum Agreement is entered into this 4th day of
November, 1996 and it is agreed that the Union representatives
and committee will unanimously recommend its ratification.”
The Employer argues that the last paragraph of the Tentative
Memorandum Agreement creates a requirement of prior ratifi-
cation by Union members before the agreement became effec-
tive. It asserts that ratification by the members did not occur
until November 6, one day after the Recertification petition was
filed and thus no contract bar exists. The Union, however, con-
tends that ratification by members was not required and that
once the National president approved the agreement on No-
vember 4, it was ratified pursuant to its procedures and valid.
Similar language was used in Merico, Inc., 207 NLRB 101
(1973), where the parties’ final paragraph stated “The Union
(committee) is Unanimous for acceptance and each member is
hereby pledged to recommend this agreement for ratification by
the membership at Fort Payne, Alabama, Merico Plant.” There,
the Board found that this language indicated that the terms were
acceptable to the Union committee, but that it did not evidence
a binding contract in the absence of employee ratification. The
employees subsequently rejected the agreement in that case.
The Union argues that the case is distinguishable from the
instant case because, here, the agreement does not specify rati-
fication by the members. The agreement uses the term “ratifica-
tion” in several provisions, but it does not specify the entity
which must grant its approval. The ambiguity is not resolved by
an examination of extrinsic evidence. The Employer appears to
have assumed, but not verified, that the members must ratify
the agreement. It points to its inquiries about when the Union
would meet with the members. Furthermore, it argues-that it
provided its facilities in order to expedite the ratification proc-
ess. Finally, it asserts that it was not informed of the National
president’s approval. The Local Union constitution, however,
does not require membership approval of agreements and does
not vest the members with the right to vote on collective-
bargaining agreements. The Union did not put other proposals
to a membership vote earlier in negotiations when it rejected a
“final offer” by the Employer. The Union stated that ratification
is accomplished by the National president’s approval of the
agreement. Finally, the Union points out that it withdrew its
unfair labor practice charge against the Employer on November
4 as required by the agreement.

UNITED HEALTH CARE SERVICES 1381
It is well-established Board precedent that an Employer may
not question internal Union procedures as to ratification. Martin
J. Barry Co., 241 NLRB 1011, 1013 (1979); M&M Oldsmo-
bile, 156 NLRB 903, 905 (1966), enfd. on other grounds 377
F.2d 712 (2d Cir. 1967); North Country Motors, 146 NLRB
671, 673 (1964). Thus, if internal Union procedures provide for
ratification by the National president, then that act is sufficient
to effect the agreement. The fact that the Union later asked for
employee input as to their support for the agreement is irrele-
vant, even though the Employer believed that this act consti-
tuted ratification.
The Employer cites Beatrice/Hunt-Wesson, Inc., 302 NLRB
224 (1991), in support of its questioning of the ratification
process. There, the parties signed a document which “recom-
mended to the management of the company and members of
the bargaining unit . . . ratification as soon as possible.” Id. at
228. The language in that agreement was found not to be a bar
until ratification occurred. The Union made 3 unsuccessful
efforts to obtain its members’ approval of the agreement. The
Union then relied upon ratification from 1 member in a unit of
approximately 100 employees. The Employer polled its em-
ployees as to their support of the agreement and refused to bar-
gain, claiming that the Union had not abided by the agreement
which required the approval of unit employees. The ALJ found
merit in the Employer’s defense, and the Board adopted the
ALJ’s findings without further discussion. The Employer relies
upon a concurring opinion to support its questioning the peti-
tioner’s ratification procedures. The concurring opinion distin-
guished between self-imposed internal ratification procedures
and ratification imposed by express agreement between a union
and an employer. According, to concurring opinion, the prohi-
bition against employer’s question the ratification procedures
applies to the self imposed ratification procedures but not to
procedures required as part of an express agreement between a
union and an employer. In Beatrice/Hunt-Wesson, Inc., supra,
according to the concurring opinion, there was express agree-
ment for unit employees, not just union members, to ratify the
agreement, which the union violated by eventually resorting to
having the ratification vote limited to the sole union member at
the facility.
However, even within the framework of the analysis of the
concurring opinion in Beatrice/Hunt-Wesson, the instant case is
distinguishable and a different result is required. In Bea-
trice/Hunt-Wesson, the agreement plainly designated the mem-
bers of the bargaining unit as the ratifying entity, and the Un-
ion’s actions clearly departed from the provisions of the express
ratification requirements set forth in the contract. The ratifica-
tion process in Beatrice/Hunt-Wesson was unambiguous and
clearly not met. Here, the record indicates that the Union’s
usual procedure is to obtain the National president’s approval.
Regardless of the misunderstandings that may have developed
during negotiations as to what was meant by the term “ratifica-
tion”, there is no express provision in the contract requiring
ratification by a specific entity, employees or union members,
that was violated, as occurred in Beatrice/Hunt-Wesson. Here,
the Union did obtain the requisite internal approval for ratifica-
tion and, thus, met the express provisions of the agreement,.
Furthermore, the lack of notice to the Employer on Novem-
ber 4 does not nullify the ratification on that date. In Felbro,
Inc., 274 NLRB 1268 fn. 2 (1985), the parties agreed that ratifi-
cation by Union members was necessary to create a binding
contract. The Board stated that the requisite ratification oc-
curred when the membership granted their approval and it was
immaterial that the Employer may not have been notified of the
ratification prior to its attempt to revoke its contract offer. Id
Therefore, according to internal Union protocol, ratification
was achieved by the National president’s approval of the
agreement on November 4, despite the lack of notice to the
Employer. The contract was in effect as of November 4, 1996,
one day before the Recertification petition was filed. Accord-
ingly, the contract consitutes a bar to processing the instant
petition.
ORDER
IT IS HEREBY ORDERED that the petition filed herein be, and it
hereby is, dismissed.
. . . .