UNITED STATES COURT OF APPEALS FOR THE THIRD CIRCUIT
argued: February 16, 1978.
NATIONAL LABOR RELATIONS BOARD, PETITIONER
NEW YORK-KEANSBURG-LONG BRANCH BUS CO., INC., RESPONDENT
ON APPLICATION FOR ENFORCEMENT OF AN ORDER OF THE NATIONAL LABOR RELATIONS BOARD (Board Nos. 22-CA-6461 and 22-CA-6686).
Seitz, Chief Judge, Rosenn and Garth, Circuit Judges.
GARTH, Circuit Judge
The National Labor Relations Board (Board) has petitioned this court to enforce its order directed against the New York-Keansburg-Long Branch Bus Co., Inc. (Company). Among the unfair labor practices found by the Board was a refusal by the Company to execute a collective bargaining contract after it had allegedly reached agreement with the Union. Finding no substantial evidence in the record that a substantive accord had been reached, we cannot agree that the Company has committed the unfair labor practices charged. We will therefore deny enforcement of the Board's order.
On June 26, 1975, Local 701 of the International Brotherhood of Teamsters, Chauffeurs, Warehousemen & Helpers of America (Union) filed a charge with the Board, alleging that the Company had refused to bargain in good faith, in violation of sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act (Act).*fn1 On October 9, 1975, the Union filed a second charge, complaining that the Company refused to reemploy striking workers, in violation of sections 8(a)(1) and 8(a)(3) of the Act.*fn2 A hearing was held on the consolidated charges. On October 20, 1976 the Administrative Law Judge (ALJ) issued his decision and order,*fn3 finding violations of sections 8(a)(1), (3) and (5) of the Act.*fn4 Specifically, the ALJ found three unfair labor practices:
(1) a refusal by the Company to execute an agreement "embodying the terms and conditions of employment on which the Respondent [Company] and the Union had reached agreement in December 1974";
(2) a refusal by the Company to contribute to the Union's Welfare and Pension Fund; and
(3) a refusal by the Company to reinstate certain striking employees.
To remedy these violations, the ALJ ordered, inter alia, (1) execution of the collective-bargaining agreement; (2) payment of all pension and welfare funds due; and (3) reinstatement of all striking workers, with back pay. (A17-18(a)).
On April 5, 1977, the Board summarily affirmed the ALJ's rulings, findings and conclusions and adopted his recommended order.*fn5 The Board then petitioned this court for enforcement.
The Company is an interstate carrier providing bus service principally between Leonardo, New Jersey and the Port Authority Terminal in New York. The Union represents the Company's full-time bus drivers. Upon the expiration of their collective bargaining agreement in September, 1973, the Company and the Union continued negotiations (which had begun on July 31, 1973) for a new agreement. By late 1973, both parties had agreed to all contract terms but three: (1) minimum work force; (2) the terminal or end points of the normal round-trip bus run; and (3) a proposed waiver by the Union of representation of part-time drivers. It is at this point that the parties' respective versions of the facts sharply diverge.
The Union contends that ultimately the parties reached full and complete agreement on a contract.*fn6 The Union asserts that the parties agreed upon the following terms: (1) the Company would maintain a minimum full-time work force of the greater of thirty-five (35) drivers or a number totalling three above the number of "posted [or line] runs" maintained on the Company work board (work force provision);*fn7 (2) the normal round trip would begin and end at Leonardo, New Jersey, not at Long Branch, New Jersey (a point fifteen miles further south) (Leonardo-to-Leonardo provision);*fn8 and (3) after execution of the contract, the Union would furnish a letter to the Company in which it agreed that it would not represent part-time drivers during the life of the contract (waiver provision). The Union further contends that the Company refused nonetheless to reduce this "agreement" to a final writing or to otherwise execute the contract.
The Company responds that the parties never reached a full and final agreement on the terms of the contract (A3). Referring specifically to the three substantive provisions of the agreement noted above, the Company makes these contentions. First, the Company maintains that the parties could not, and did not, reach agreement on the number of drivers constituting the full-time work force. The Company claims that it agreed to maintain only a force which totaled three above the number of posted runs, with no minimum guarantee of thirty-five drivers. Second, the Company asserts that it consistently and vehemently opposed the inclusion of any Leonardo-to-Leonardo provision in the contract (A7).*fn9 Finally, the Company claims that after the Union rejected the Company's version of the waiver letter pertaining to part-time representation (A7), the parties at no time thereafter agreed to or drafted the relevant provision.*fn10 In this connection the Company points out that the parties also failed to agree on the time that the waiver letter would be executed, as the Company insisted that it be executed contemporaneously with, and incorporated into, the collective bargaining contract.*fn11
The ALJ and the Board credited the Union's testimony and contentions. The ALJ found that the parties reached "full agreement on the terms of a new contract" at "the January 14, 1974 negotiation meeting" (A11).*fn12 The precise contract terms found by the ALJ include the Union's version of the three contested provisions discussed above. Yet, despite this finding, it is undisputed that the contract submitted to the Union contained the Company's and not the Union's version of the work force provision.*fn13 Nor did this "full agreement" which ultimately gave rise to the unfair labor practice charge against the Company contain a waiver of part-time representation or a provision as to the end points of the normal round-trip bus run.
It was not surprising therefore that the ALJ found that a new full and complete agreement had been reached some eleven months later in December, 1974. This later "full agreement" no longer included the Leonardo-to-Leonardo provision (A8). The ALJ determined that this new agreement consisted of all those provisions set forth in a contract drafted and sent by the Company to the Union in December, 1974 (General Counsel's Exhibit 8 (GC8)), as supplemented by two clauses which to this day have yet to be drawn: an addendum prescribing the minimum work force and a waiver letter to be furnished by the Union upon execution of the contract (A11).
With the contract in this state, the ALJ found that the parties reached a third complete agreement in April, 1975. It was then, the ALJ concluded, that "the parties agreed upon the procedure for execution of the contract -- the first step [drafting the work force addendum] to be taken by [the Company]" (A12).
The full flavor of the ALJ's findings that a "full agreement" was reached on three different dates (January 14, 1974; December, 1974; and April, 1975) cannot be appreciated without reference to the actual text of his opinion. It reads as follows:
While I have found that the parties did reach a full agreement on January 14, 1974, the parties continued to negotiate because of the Respondent's [Company's] subsequent contention it had not agreed on the definition of line runs. When the Union acquiesced to the Respondent's language in December 1974, full accord was reached at that time on the terms of a new agreement and the Respondent was to prepare the agreement. The Union was furnished copies later in December. I have found that the agreement (General Counsel's Exhibit 8) was the complete agreement encompassing the understanding of the parties except that the addendum pertaining to the work board was not included. When this was brought to Rossiter's [the Company's representative's] attention in April 1975 it was agreed that Rossiter would send such addendum to the Union and the parties would then execute the contract.
It was based on these findings that the Company was charged with having committed unfair labor practices.
The Board's factual findings "conclusive[ly]" bind this Court "if supported by substantial evidence on the record considered as a whole." 29 U.S.C. § 160(e); accord, Universal Camera Corp. v. NLRB, 340 U.S. 474, 493, 95 L. Ed. 456, 71 S. Ct. 456 (1951); NLRB v. W.C. McQuaide, Inc., 552 F.2d 519, 533 (3d Cir. 1977); NLRB v. Armcor Industries, Inc., 535 F.2d 239, 242-43 (3d Cir. 1976); NLRB v. Buitoni Foods Corp., 298 F.2d 169, 171 (3d Cir. 1962). However where there is a lack of substantial evidence in the record to support the Board's order, we will deny enforcement.
The thrust of the ALJ's opinion is that the Company had agreed to all the terms and conditions of a collective bargaining agreement negotiated with the Union. Having once found that such an "agreement" existed, the Company was then charged with having refused to sign this "agreement" which, by the ALJ's definition, embodied all the terms and conditions to which the Company and the Union had assented.
We recognize that under traditional contract law if the contracting parties do not intend a contract to become effective unless and until reduced to a signed, integrated writing, that intention will be given effect and the contract will not bind either party until the writing is executed. However, we are not dealing here with such a contract. In the field of labor relations when the parties have agreed to the substantive terms and conditions of a contract, even though it may not be reduced to writing, they can nevertheless be held to its terms. H.J. Heinz Co. v. NLRB, 311 U.S. 514, 524-26, 85 L. Ed. 309, 61 S. Ct. 320 (1941). This has been explained by the Supreme Court as follows:
Before the enactment of the National Labor Relations Act it had been the settled practice of the administrative agencies dealing with labor relations to treat the signing of a written contract embodying a wage and hour agreement as the final step in the bargaining process. . . .
We think that Congress, in thus incorporating in the new legislation the collective bargaining requirement of the earlier statutes included as a part of it, the signed agreement long recognized under the earlier acts as the final step in the bargaining process. It is true that the National Labor Relations Act, while requiring the employer to bargain collectively, does not compel him to enter into an agreement. But it does not follow, as petitioner argues, that, having reached an agreement, he can refuse to sign it, because he has never agreed to sign one. He may never have agreed to bargain but the statute requires him to do so. To that extent his freedom is restricted in order to secure the legislative objective of collective bargaining as the means of curtailing labor disputes affecting interstate commerce. The freedom of the employer to refuse to make an agreement relates to its terms in matters of substance and not, once it is reached, to its expression in a signed contract, the absence of which, as experience has shown, tends to frustrate the end sought by the requirement for collective bargaining. A business man who entered into negotiations with another for an agreement having numerous provisions, with the reservation that he would not reduce it to writing or sign it, could hardly be thought to have bargained in good faith. This is even more so in the case of an employer who, by his refusal to honor, with his signature, the agreement which he has made with a labor organization, discredits the organization, impairs the bargaining process and tends to frustrate the aim of the statute to secure industrial peace through collective bargaining.
Id. at 524-26 (footnotes omitted; emphasis added).
This teaching is necessarily subject however to the overriding precondition that the parties in the first instance must have agreed to the terms of the contract which is sought to be enforced. H.K. Porter Co., Inc. v. NLRB, 397 U.S. 99, 102, 25 L. Ed. 2d 146, 90 S. Ct. 821 (1970). It is only a written contract embodying agreed terms which the Board may require the company to sign. H.J. Heinz Co. v. NLRB, supra, 311 U.S. at 526.
It therefore becomes apparent that the first inquiry to be made is whether, in fact, the parties did agree on the terms and the conditions of the contract. If they did, then plainly an unfair labor practice could be charged against the employer who refused to sign the agreement to which it had assented. However if the substantive terms had not been agreed to by the employer, then of course we may not compel, as the Board may not, the execution of any document.
It is these considerations which must govern our scrutiny of the administrative proceedings in this case. Accordingly, we turn to an examination of the evidence which gave rise to the ALJ's findings and conclusions in order that we might determine its substantiality.
The ALJ made his findings and reached his conclusions by relying almost exclusively on the testimonial, as distinct from the documentary, evidence presented by certain Union representatives.*fn14 Even if the ALJ had properly credited this testimony, which we believe he did not,*fn15 we would still find that:
the inferences on which [his] findings were based were so overborne by evidence calling for contrary inferences that the findings of the [ALJ] could not, on the consideration of the whole record, be deemed to be supported by "substantial" evidence.
NLRB v. Pittsburgh Steamship Co., 340 U.S. 498, 502, 95 L. Ed. 453, 456, 71 S. Ct. 479 (1951); see Altemose Construction Co. v. NLRB, 514 F.2d 8, 13-17 (3d Cir. 1975).
Most significant, the undisputed documentary evidence which appears in the record conclusively establishes that no full and complete agreement capable of being executed was ever reached by the parties.
Minimum Work Force Provision
Each of the three written drafts of the purported collective bargaining agreement*fn16 contains a work force provision (Article XIII, Section 8). That provision appears as follows in all three drafts: "the Company shall maintain a [work force] consisting of three (3) men above the number of posted runs" (A767, A837, A813) (see A396-400). No writing or mention is to be found in any of the documents which provides for a minimum of thirty-five workers. Nor is there any reference made to any addendum so providing. Despite this, the ALJ found that the parties agreed to an addendum providing for a thirty-five worker minimum in February, 1974 (A7) -- a date which preceded all three contract drafts !
Examining the three documents, we observe that on the Union's copy of RX 13, the earliest of the three drafts,*fn17 section 8 of Article XIII (the work force provision) contains one, but only one, handwritten correction.*fn18 The original typewritten draft had recited that the Company "may" maintain a minimum work force. Thereafter the handwritten word "shall" appears as a substituted verb for the original verb "may" (A837). Next to the clause containing this one interlineation, the Union representative had scrawled "OK". The Union had thereby signified its approval of the Company's work force provision, despite the lack of reference to any minimum number of workers (i.e., thirty-five) or to any addendum so providing.
Even more telling, on the draft of the contract prepared by the Union in May or June of 1974 (RX 12) (A398), the work force provision (section 8 of Article XIII) reads in its final typewritten form that "the Company shall maintain a [work force] consisting of three (3) men above the num[b]er of posted runs" (A813). As noted, this is the precise wording of the clause found in RX 13, the draft which had earlier been submitted by the Company to the Union. Here again, no mention is made in this second draft (RX 12) of a minimum of thirty-five workers, or of any addendum.
Similarly, in GC 8, the draft contract drawn by the Company in December, 1974, no change was made to section 8 of Article XIII. That section, which prescribes the requisite full-time work force, appears in the precise form as recited in the two prior drafts. Indeed, on this last draft the Union representative circled the word "shall" on his copy, and penned an "OK" immediately next to it (A767).
On three consecutive contract drafts, therefore, no reference is made to the Union's thirty-five worker provision nor to any addendum which would so provide. Rather on all three drafts both parties had agreed that the Company's obligation was only to "maintain a [work force] consisting of three (3) men above the number of posted runs."
Similarly, two letters which appear in the record provide conclusive evidence refuting the ALJ's finding that the parties had agreed to a minimum of thirty-five full-time bus drivers. On October 8, 1974, with no thirty-five worker provision appearing either in the principal contract draft nor in any addendum to such a draft, the Union wrote to the Company respecting the current status of their contract negotiations.*fn19 The Union's letter did not refer to any minimum worker provision but only to the Leonardo-to-Leonardo line run provision. Moreover that letter, which is reproduced in full in the margin,*fn20 explicitly acknowledges that other than the disputed line run provision, both parties "had reached total agreement" on all aspects of their negotiations. That "total agreement" in the context of the negotiations and the contracts drafted to that date necessarily included an agreement on a work force provision which prescribed a minimum number of workers equalling "posted runs plus three," for that is the only language which appears in the three approved contract drafts. This conclusion is substantiated by a second letter sent in November, 1974 from one Union representative to another (GC7, reproduced at A749). That letter recites that save for the Leonardo-to-Leonardo provision, the Union considered the contract to be "complete" -- a contract again without a minimum thirty-five worker provision.*fn21
No conclusion can be derived from these five uncontroverted documents other than a conclusion that the parties never agreed to a minimum of thirty-five workers. The ALJ nonetheless found that a minimum work force of thirty-five drivers was a significant feature of the Company's and the Union's integrated and complete contract. Counselled that "the findings of the examiner are to be considered along with the consistency and inherent probability of testimony," Universal Camera Corp. v. NLRB, 340 U.S. at 496; accord, NLRB v. United Brass Works, Inc., 287 F.2d 689, 694 (4th Cir. 1961), we are compelled to conclude that in light of the documentary evidence contained in the record, the testimonial evidence credited by the ALJ and the Board is inherently improbable.*fn22
Waiver of Part-Time Representation Provision
Other irrefutable evidence demonstrates that the parties never reached a final collective bargaining agreement which could be executed. The Company, as it promised, prepared a letter whereby the Union agreed to waive representation of part-time drivers during the duration of the contract (RX 9, reproduced at A798).*fn23 Although ostensibly agreeing to the import of the letter, the Union flatly rejected its "legal terminology" (A7, A11). The ALJ found that:
Before the [February, 1974] meeting ended, Rossiter [the Company representative] presented a letter prepared by Respondent's counsel which, in substance, stated the Union would not seek representation of the part-time employees during the contract term and that such letter would be incorporated in the contract. According to Rossiter, he asked McDermott [the Union representative] to sign the letter who then expressed criticism of the counsel's draftsmanship and refused to sign the letter. McDermott then put the letter in his briefcase. McDermott testified he did refuse to sign the letter and criticized the legal terminology of the letter. He credibly testified he told Rossiter he would prepare the waiver letter on Union stationery and send it to Rossiter when the contract was signed and Rossiter was not adverse to this procedure.
(A7) (footnotes omitted). The Union never furnished its version of the waiver letter to the Company, allegedly because the final contract was never signed.*fn24 Hence even to today's date, neither party has reduced to writing or approved a vital component of their collective bargaining agreement, whether that component was to be included within the main body of the contract or attached to that contract as an addendum.
We recognize, as did the parties to the contract, that the waiver of representation of part-time employees was an essential element requiring their agreement. We find it inconceivable therefore that a full and complete agreement ready for signature had been effected without the resolution of an issue as vital as this one.*fn25
The entire course of the conduct of the parties, as evidenced by their actions, their correspondence, and their drafting and redrafting of the contract documents, leaves no room for doubt that both parties were extremely conscious of, and placed strong emphasis upon, the precise terms by which their agreement was to be expressed. This being so, we do not think it unreasonable to ask the following question of ourselves, as we did of counsel: just what are the precise terms of the waiver and the work force provisions to which both parties agreed? Which of the various documents is the Company to sign in order to remedy its "refus[al], upon request, to sign the collective-bargaining agreement embodying the terms and conditions of employment on which [the Company] and the Union reached agreement in December, 1974"? (Order of ALJ at A17).
The Board's only answer to these questions has been that the Company is required to sign a contract document prepared in December, 1974 (GC 8) containing an apparently approved work force provision limited to "three men above the number of posted runs" (Article XIII, section 8, at A767), supplemented by an unwritten addendum which designates a potentially greater (thirty-five driver) minimum work force and a letter waiving representation of part-time bus drivers, which letter has not yet been drafted by the Union nor approved by the Company. Neither the Company nor the Union however can be bound by a collective bargaining provision to which it did not agree. H.K. Porter Co., Inc. v. NLRB, 397 U.S. 99, 102, 25 L. Ed. 2d 146, 90 S. Ct. 821 (1970).*fn26 Even if it be contended that the work force provision was approved by the Company (a proposition for which we find no support in the record), it is undisputed that the letter which waived representation of part-time workers never received the approval of both parties. In such a circumstance the Company cannot be forced to execute that which it did not approve and indeed, that which does not exist.
We will deny enforcement of the Board's orders dated April 5, 1977 because we "cannot conscientiously find that the evidence supporting [the Board's] decision is substantial, when viewed in the light that the record in its entirety furnishes, including the body of evidence opposed to the Board's view." Universal Camera Corp. v. NLRB, 340 U.S. at 488; see Altemose Construction Co. v. NLRB, 514 F.2d 8, 13-17 (3d Cir. 1975).*fn27 In fact the evidence in support of the ALJ's decision in our opinion is completely insubstantial, and the credible evidence that does appear in the record compels the conclusion that the parties never agreed to a final collective bargaining contract.*fn28 We therefore will not enforce the Board's order.
Additionally we may not enforce those portions of the order which proscribe the unfair labor practice charges which depend upon the parties' agreement to a final contract, to wit, the Board's order which compels: restitution of payments to the welfare and pension fund to remedy the Company's alleged mid-term modification of the "contract";*fn29 reinstatement with back pay of the striking workers who were allegedly protesting the mid-term contractual modification;*fn30 and the posting of notices. (A16-18(a), A20-21).
The Board's petition for enforcement will accordingly be denied.
The Board's petition for enforcement will accordingly be denied.