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T & J MEAT PACKING v. SERVICE EMPLOYEES INTERNATIONAL UNION

United States District Court, N.D. Illinois


April 15, 2004.

T & J MEAT PACKING, INC., Plaintiff,
v.
SERVICE EMPLOYEES INTERNATIONAL UNION, LOCAL 1, ALF-CIO, Defendant

The opinion of the court was delivered by: JAMES ZAGEL, District Judge

MEMORANDUM OPINION AND ORDER

Plaintiff T & J Meat Packing, Inc. (the "Company") brought this action on February 25, 2004, under § 301 of the Labor Management Relations Act (the "LMRA"), 29 U.S.C. § 185,*fn1 seeking relief under the Declaratory Judgment Act, as amended, 28 U.S.C. § 2201 and 2202. The Company seeks a declaration that no collective bargaining agreement ("CBA") was entered into on September 23, 2003 between it and Defendant Service Employees International Union, Local 1, AFL-CIO (the "Union" or "Local l"), the collective bargaining representative of the Company's production and maintenance employees.*fn2 On March 4, 2004, the Company moved to advance this case for a speedy hearing pursuant to Federal Rule of Civil Procedure 57. On March 9, however, the Union claimed that Textron Lycoming Reciprocating Engine Div. v. UAW, 523 U.S. 653 (1998), precludes me from exercising jurisdiction over this case. On March 10, 1 granted the Company's motion for a speedy hearing, finding that § 301 jurisdiction exists. On March 24, the NLRB moved to intervene in the case and to stay these proceedings on the grounds of: (1) the alleged questionability of jurisdiction in light of Textron and subsequently conflicting case authority, and (2) various prudential considerations. At the March 26 status hearing, I granted the NLRB status as an intervener, took the motion to stay under advisement until after the hearing, suggested that the Company might want to move for leave to amend its Complaint in light of the jurisdictional issues raised in the NLRB's motion, and commenced the hearing in this matter. Prior to the conclusion of this hearing on March 29, the Company moved for leave to file instanter its First Amended Complaint. On April 1, the NLRB withdrew its motion to stay.

In this decision, I resolve the Company's motion to file its amended complaint, and to the extent that the Union moved to dismiss this case for lack of jurisdiction on March 9, 1 hereby elaborate on my reasons for denying this motion. Thereafter, I issue my findings of fact and conclusions of law resulting from the hearing on March 26 and 29.

 The Company's Motion for Leave to File Instanter Its First Amended Complaint

  In the face of a motion to dismiss, the party against whom the motion is made is given an opportunity to respond in writing. My customary practice is to also give the party the opportunity to amend its complaint to correct any facial deficiencies. Fed.R.Civ.P. 15(a) (providing that leave to amend a pleading "shall be freely given when justice so requires."). In this case, however, I did not give the Company an opportunity to amend its Complaint when the Union first raised the concern that jurisdiction did not exist as the case had been pleaded. Rather, I summarily concluded that § 301 jurisdiction existed. The NLRB's pending motion to stay essentially asks that I reconsider this ruling. Were I to find that there is no subject matter jurisdiction, I would be forced to dismiss the Company's case. Therefore, I think it is only fair to give the Company the same opportunity customarily given to every other litigant in this court facing the possibility of dismissal. Accordingly, I grant the Company's motion for leave to file its Amended Complaint.

 The Union's Motion to Dismiss

  In Textron, the plaintiff union sued under § 301 claiming that the employer had fraudulently induced it to sign a CBA, and the Union sought a declaratory judgment that the agreement was voidable at its option. Id. at 654-55. The Union made no claim that either it or the employer had violated the terms of the agreement. Id. In finding that no subject matter jurisdiction existed, the Supreme Court determined that § 301 conferred jurisdiction only over "[s]uits for violations of contracts." Id. at 656-57. It concluded that since no one was alleging any breach of contract — and in fact that both parties appeared to be in compliance with the terms of the contract — there was no basis for subject matter jurisdiction. In the Court's view, the union was simply asking that an admitted contract be declared invalid. Id. at 658. However, the Court further observed: This does not mean that a federal court can never adjudicate the validity of a contract under § 301(a). That provision simply erects a gateway through which parties may pass into federal court; once they have entered, it does not restrict the legal landscape they may traverse. Thus if, in the course of deciding whether a plaintiff is entitled to relief for the defendant's alleged violation of a contract, the defendant interposes the affirmative defense that the contract was invalid, the court may, consistent with § 301(a), adjudicate that defense. . . . Similarly, a declaratory judgment plaintiff accused of violating a collective-bargaining agreement may ask a court to declare the agreement invalid. But in these cases, the federal court's power to adjudicate the contract's validity is ancillary to, and not independent of, its power to adjudicate "[s]uits for violation of contracts."

 Id. at 657-8 (quotation omitted and emphasis added).

  Under Textron, a party must allege a breach of contract for there to be subject matter jurisdiction. Indeed, this is the interpretation that the only case in this district addressing the issue has taken. In Chicago & KE. Ill. Dist. Council Carpenters v. GDCNI/CAWCC, No. 01 C 6097, 2002 WL 237972 (N.D. Ill. Feb. 19, 2002), the plaintiff union alleged that the employer agreed to the terms of a successor CBA while the employer denied that an agreement had been reached. Both the union and the employer had also filed unfair labor practice charges with the NLRB, and although the NLRB's Regional Office dismissed those charges, both parties appealed to the NLRB's General Counsel. Id. at *1. The district court dismissed the § 301 suit on the basis that the union had failed to assert a breach of contract:

Here, Plaintiff's complaint fails to allege a violation of a contract, i.e. the agreement, and instead merely asserts a claim for a declaratory judgment as to the formation and validity of the contract. . . . Under Textron, such a claim standing alone fails to establish federal subject matter jurisdiction and prevents this court from reviewing the complaint. . . . [I]n its response to the motion to dismiss, Plaintiff asserts in a single sentence "[i]n this lawsuit the Plaintiff is requesting that the Court adjudicate whether there is a valid contract between the parties and to find that the Defendant is violating the valid contract in not recognizing it and not adhering to the provisions found in it.". . . [E]ven if this court considered the amendatory statement Plaintiff included in its response, at best Plaintiff has still not alleged how Defendant violated the agreement and at worst Plaintiff has engaged in circular reasoning. Plaintiff attempts to add a claim of contract violation to the actual single issue of contract validity by redefining its complaint to request the court "find that the Defendant is violating that valid contract in not recognizing it." Plaintiff's circular definition of contract violation actually states the claim for contract formation and validity. Further, Plaintiff simply states Defendant "is violating that valid contact in . . . not adhering to the provisions found in it," and yet fails to cite any sections of the contract which were violated or to even suggest what action or inaction by Defendant was violating the agreement. Once again, only legitimate allegations of contract violation confer upon this court the subject matter jurisdiction to assess contract validity.
Id. at *4-5.

  At least one court outside this district also supports this interpretation of Textron. In American Standard, Inc. v. Glass, Molders, Pottery, Plastics & Allied Workers Int'l Union Local 7A, No. 3:03CV7023, 2003 WL 21478861 (N.D. Ohio Jun. 17, 2003), an employer brought a § 301 suit against a union claiming that the parties had reached agreement on the terms of a contract and that the union's repudiation of that agreement amounted to a breach. The union argued that a contract had not been formed. The same dispute was also the subject of an unfair labor practice case brought by the union before the NLRB. The district court dismissed the suit in reliance on Textron, and noted in particular that determination of the dispute would hinge on whether the parties' negotiations resulted in a binding contract, since the "employer is not claiming a specific breach of one or more terms of the . . . contract which both parties are implementing." Id. at *2. The court remarked that according to Textron, the NLRB has primary jurisdiction to resolve disputes such as this that involve review of the collective bargaining process. Id.

  On the other hand, some courts outside this district have interpreted Textron's construction of § 301 to extend jurisdiction when a breach of contract is implied, rather than alleged expressly. In Darigold, Inc. v. Teamsters, Local 524, No. CY-03-3099-EFS, 2003 WL 22295327 (E.D. Wash. Sept. 5, 2003), the employer sought a declaration that the parties' contract had not expired and that the contract therefore prohibited the union from engaging in its threatened strike activity against the employer. Citing Textron, the court concluded that since the threatened strike activity might result in a breach of the contract's no-strike clause, jurisdiction existed under § 301. Id. at *2. Similarly, in Bulkmatic Transp. Co. v. Int'l Bhd. of Teamsters, Chauffers, Warehousemen & Helpers & Union Local 407, 213 F. Supp.2d 946 (N.D. Ind. 2002), the employer sought a declaration under § 301 that the parties' area agreement covering employees in one of the employer's plants did not apply to employees at another plant. The union filed a counterclaim seeking an order confirming an arbitration award the union already had obtained against the employer. Relying on Textron, the district court concluded that jurisdiction existed because a finding that the employer refused to extend the contract terms to employees at the second plant would mean that the employer had violated the contract. Id. at 951.

  In the end, the standard set forth in Chicago Dist, Council Carpenters is what best governs here. According to that case, Textron requires that a party allege in its complaint that its adversary has violated a contact or that the party itself has been accused by its adversary of violating a contract. If management is the plaintiff seeking relief from a district court under § 301, a union need not counterclaim that management has breached a contract for there to be jurisdiction; it is sufficient for management to allege in its complaint that it has been accused by the union of breaching a contract. Finally, any party making such aforementioned allegations must allege with particularity the sections of a contract alleged to have been violated or the actions or inactions alleged to be taken in violation of a contract. Here, the Company's First Amended Complaint meets the standard set forth in Chicago Dist. Council Carpenters. The Complaint alleges:

The Union further maintains that the Company is presently in breach of that claimed agreement by having failed and refused to pay a bonus of $100.00 in the second week of December 2003 and by having fail [ed] and refus[ed] to implement an across the board salary increase effective January 1, 2004, as called for by that contract. The Union also maintains that the Company will be in further breach of the contract should it fail or refuse to implement the January 1, 2005 wage increase of $.10, or should it fail or refuse to pay $100.00 bonuses in the second week of December 2004 and December 2005 as called for by the claimed agreement.*fn3
Along with these allegations in the Complaint, it clear from testimony offered by Union officials that the failure of the Company to implement the bonus and wage increases allegedly agreed upon was the primary reason for the strike called in October 2003. For example, Charles Bridgemon, a Union official, was asked the following question and gave the following response:
Q: Why did the union strike?
A: Because the Company agreed to a contract and then refused to implement it.
This brief exchange illustrates that the heart of the underlying dispute here is that by refusing to recognize any agreement, the Company has not implemented the wage increases and bonuses that the putative agreement calls for and does not intend to do so, and that the Union regards such inaction as violations of the claimed agreement. In other words, the heart of the dispute here is the Company's failure to pay the allegedly agreed upon bonuses and raises — in other words, its breach. Therefore, subject matter jurisdiction exists, and my decision on March 9 dismissing the Company's motion to dismiss for lack of jurisdiction is correct.

  For the reasons above, the Company's Motion for Leave to File Instanter Its First Amended Complaint is GRANTED and the Union's Oral Motion to Dismiss is DENIED.

  FINDINGS OF FACT

 Undisputed Facts

  Leaving aside all conflicts, the parties do not dispute the following facts:

  1. The Company is engaged in the business of meat packaging and the wholesale and retail distribution of meat products in interstate commerce. It is a corporation organized and existing under the laws of the State of Illinois and has its principal office and place of business in Chicago Heights, Illinois, within the territorial jurisdiction of this Court. The Company thereby is an employer in an industry affecting commerce within the provisions of § 301 of the LMRA, 29 U.S.C. § 185, and the definitions contained in §§ 2(2) and 501(1) and (3) of the LMRA, 29 U.S.C. § 152(2), 142(1) and (3).

  2. Defendant Union is the bargaining representative of the Company's production and maintenance employees and, as such, is a labor organization representing employees affecting commerce within the meaning of § 301 of the LMRA, and the definitions contained in §§ 2(5), and 501(1) and (3) of the LMRA, 29 U.S.C. § 152(5), 142(1) and (3).

  3. The Company is a family owned and operated business. Its shareholders consist of 9 members of the Lilovich family, each of whom own 10% of the shares, except for the President, Tony Alilovich, who owns 20%. 4. The Company has been in business for the past 20 years. During most of that time the Company's production and maintenance employees have been represented for collective bargaining purposes by a succession of labor organizations and have been covered by successive collective bargaining agreements negotiated on their behalf.

  5. For much of that time period and until 2000, the employees' collective bargaining representative was Local 73 of the Service Employees International Union. Also during that time the Company experienced no strikes or major labor disputes. The last collective bargaining agreement negotiated with Local 73 was a three-year agreement. Neither party was able to present an executed version of that agreement, but an unsigned draft of that agreement, dated December 2, 1997, containing blanks for wages as well as starting and ending dates, was admitted into evidence. At some point in the year 2000, Local l took over from Local 73 as the representative of the employees.

  6. In 2002, Local l assigned a new business agent, Oscar Sandoval, to the Company, and negotiations began for a successor agreement. By early 2003, the Company and the Union had agreed on most benefit and language issues, but were still apart on other issues, including wages.

  7. By March 2003, the Company had proposed a final written wage proposal with a 2% increase in each year of a 3-year contract, along with wage caps for certain positions. Sandoval purported to respond on behalf of the Union with a written wage proposal that offered a 3% increase in the first year, a 2% increase in the second year, and a 1% increase in the third year, with no wage caps. Both proposals averaged about $.19 to $.20 a year, but the Union's proposal was more front-loaded. 8. Although the parties appeared to have been very close to an agreement at that point, the Union acknowledged at a subsequent meeting that Sandoval was unauthorized to offer the proposal he had offered on behalf of the Union. The Union then offered proposals seeking much larger increases than the proposal offered by Sandoval sought, such as one proposal asking for a one-year contract with a $.60 raise. The Union also proposed that if the Company wanted the contract to be less than three years in length, then the Union wanted to re-examine some of the existing language previously tentatively agreed upon.

  9. With no further meetings scheduled and the parties at impasse, John Lilovich, the Company Vice President, suggested to Sandoval that they meet informally to see if they could make progress. Lilovich and Sandoval agreed to meet at the picnic tables in front of the Company's facility on September 23, 2003.

  10. Unlike previous meetings, neither side's attorney was present nor was Lilovich accompanied by anyone else from Company management (at least at the beginning of the meeting). Sandoval brought another Union official, Charles Bridgemon, and some employees with him, including Rumaldo Acevedo, the Chief Union Steward.

  11. At the meeting, Lilovich stated that he had been authorized to drop the salary caps that the Company previously had insisted upon. There also was a discussion in which the Union asked if it could frame the discussion on wage increases in terms of dollar amounts rather than percentages. Lilovich left to go into the facility to confer with his brother Joe Lilovich, the Company's Wholesale Manager, and with Tony Alilovich, who were working in the office, and returned with their consent. During the course of the meeting the Union gave several wage proposals, and each time Lilovich would go into the facility to confer with Joe and Tony before coming out with the Company's reaction. By this process, the parties eventually reached the stage where a final proposal was made.

 Disputed Facts

  The parties are in dispute as to practically everything else that took place at the September 23 meeting. This is more than a case of a simple misunderstandings between bargaining parties. These are two completely different versions of events. At the outset, the Company and the Union disagree as to which side made the final proposal and what that final proposal was. The Union maintains that the final proposal was the Company's and that it was for a 2-year agreement with a $.50 wage increase in the first year, a $.10 wage increase in the second year, and a bonus of $100 in each year starting with December 2003. The Company maintains that the final proposal was the Union's, and that the proposal was for a 3-year agreement with a $.50 wage increase in the first year, a $.10 wage increase in the second year, no increase in the third year, and a bonus of $100 in December 2003.

  The parties also disagree about what transpired after the final proposal was presented. The Union maintains that after Lilovich verbally presented the proposal, it caucused and then told Lilovich it agreed to this proposal, at which time Lilovich declared that the Union had a contract and shook hands with the members of the Union negotiating team. The Company maintains that Lilovich never said the Union had a contract and did not shake hands with the members.

  The Union further maintains that Sandoval wrote out what he believed to be the agreement on wages (Co. Ex. 10), which characterized the proposal as being the Company's and the Union agreeing to it, and that Sandoval presented it to Lilovich for his signature next to the Union representatives' signatures. The Union acknowledges that Lilovich refused to sign the document, but maintains that the reason he gave was because he preferred a formal, typewritten document which he assured them he would sign. Lilovich, on the other hand, maintains that the document Sandoval wanted him to sign was not Company Exhibit 10, and that the document he saw made no reference to the proposal being his or the Union agreeing to the Company's proposal, but rather simply contained the Union's proposal with a line for his signature. He testified that he told the Union he would not sign because he did not have the authority to agree to the proposal, but that Sandoval should fax him a typewritten proposal and the shareholders of the Company would consider it and respond to it.

  The parties do agree, however, to the authenticity of another document containing the $.50 /$. 10 proposal, which Sandoval wrote on a sheet of paper with the Union's logo on it and which he gave to Lilovich at the meeting (Co. Ex. 9). But they disagree as to the circumstances under which it was created. Lilovich testified that Sandoval wrote this out and tendered it to him as the Union's last proposal, after which Lilovich brought it in with him to show Tony and Joe, explaining that it was the Union's proposal. Lilovich testified that he, Joe and Tony decided that John should go back outside and terminate the meeting and ask Sandoval to write it up as a formal proposal and fax it to the Company for its consideration by the shareholders. The Union, on the other hand, claims that this document was written up by Sandoval at the end of the meeting after the Union already had agreed to Lilovich's proposal, and that Sandoval did so at Lilovich's request so that Lilovich would have something by which to remember the agreement.

  The parties are also in stark disagreement about how the meeting ended. All the Company witnesses testified that toward the end of the meeting Tony and Joe came out to join the meeting and that another management representative, Richard Havlin, arrived as well. At that time, Sandoval insisted that the Company then and there sign a paper for an agreement or else he would not negotiate further and the employees would go on strike. All of the Company witnesses testified that John, Joe and Tony told Sandoval they would not sign any paper until the proposal was reviewed by all of the shareholders of the Company. They testified that Sandoval became agitated, and kept insisting that he wanted a contract that day, and that the meeting ended in rancor with both parties walking away and no one shaking hands. The Union witnesses claimed that the meeting ended with Lilovich assuring them that they had a contract. They claimed that Tony, Joe and Havlin were standing no closer than 20 feet away at the door of the plant and never joined the meeting, that Sandoval did not insist on a contract, and that the meeting did not turn rancorous.

  Were I to resolve all the disputes described above in favor of the Union, the critical question would be whether these actions constitute an agreement. 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 (1941); NLRB v. Haberman Constr. Co., 641 F.2d 351 (5th Cir. 1981). Technical rules of contract law do not control whether an agreement has been reached. Ivaldi v. NLRB, 48 F.3d 444, 448 (9th Cir. 1995). "Rather, a more crucial inquiry is whether the two sides have reached an `agreement,' even though that `agreement' might fall short of the technical requirements of an accepted contract." NLRB v. Donkin's Inn, Inc., 532 F.2d 138, 141 (9th Cir. 1976). Whether the parties have reached such an agreement is a entirely factual question. Ivaldi, 48 F.3d at 448.

  Were I to accept the Union's version of events, the combination of the prior collective bargaining agreement (Co. Ex. 1), the "Agreed To Contract Changes" document (Co. Ex. 4), Sandoval's handwritten notes (Co. Ex. 9), and oral testimony that the parties agreed to continue the health insurance offered by the Company establish that the parties reached agreement on all material terms on September 23. Even if, as the Company argues, there were some unresolved issues, and thus no complete contract, minor discrepancies that may exist do not relieve party of the obligation to execute an agreed upon contract. Bennett Packaging Co., 285 N.L.R.B. 602 (1987); Parkview Furniture Mfg. Co., 284 N.L.R.B. 947 (1987); see, e.g., Timber Prods. Co., 277 N.L.R.B. 769 (1985). Also, the fact that the terms agreed upon are in separate documents is of no significance. See Mt. Airy Found., 230 N.L.R.B. 668, 677 (1977) (finding that parties reached agreement based on three documents incorporating all of the final proposals of one party). Therefore, an agreement was reached if one accepts the Union's version as true.

  I do not accept the version of events offered by Sandoval, Acevedo, and Bridgemon because I find it less credible than the version offered by Alilovich, Havlin, Joe, and John. Accordingly, I find that the Union's version does not accurately reflect what happened on September 23. There are at least two possibilities for this inaccuracy. One is that the Union witnesses are deliberately misrepresenting what occurred. Such a scenario is not entirely inconceivable. They certainly have strong incentives to misrepresent. Although Sandoval denied that he was under any pressure to get a contract concluded at the September 23 meeting, it is inconceivable that he could not have been. The employees had gone for close to three years without a contract and were undoubtedly very restive about getting one. They had already voted to authorize a strike in August 2003,*fn4 and the Union, by its own admission, had to retreat from a wage proposal it had made earlier in negotiations because the employees would not accept it. Union officials working directly with employees, such as Sandoval and Acevedo, certainly observed this restiveness among the employees and understandably felt some pressure to achieve a new contract, or at least to show some sign of their leadership in pursuing one. This pressure was probably intensified for Sandoval because he had replaced a business agent that had previously successfully negotiated a contract. One would expect that people in Sandoval and Acevedo's position would have least have the incentive, if not the willingness, to misrepresent reaching an agreement on September 23 after coming so very close.

  The respective testimonies of Sandoval and Acevedo further support an intentional misrepresentation theory as the reason for the inconsistent versions. Although Acevedo insisted he was not a disgruntled employee, he admitted that he had filed an unsuccessful charge against the Company with the NLRB complaining about mistreatment by the Company, including an assertion that Havlin had chased him to the restroom.*fn5 Acevedo was obviously a biased witness. As for Sandoval, he was defensive, hosfile and evasive witness. He persistently refused to answer questions on cross examination, would not admit to even the most obvious facts if he perceived (rightly or wrongly) that it was harmful to his position, and was generally argumentative. In addition, Sandoval was highly combative in his testimony. It is credible that, exactly as the Company witnesses described it, Sandoval indeed became upset at the September 23 meeting when the Company representatives told him that they had gone as far as they were going to go and were not going to go any further that day. It is also credible that Sandoval then demanded that he wanted a contract that day and that he had 100% support from the employees for a strike. In the end, regarding both Sandoval and Acevedo, one could conclude that they deliberately misrepresented what occurred on September 23 and that their respective versions of the events should not be credited where they contradicted that of the Company's witnesses.

  One incident particularly raises doubts about Sandoval's credibility. A newspaper article appeared in Hoy, a Spanish language periodical, shortly after the strike began (Co. Ex. 17). In that article, a reporter, Jaime Reyes, quoted Sandoval as stating that the $.50 and $.10 proposal was the Union's proposal, and that management "apparently" accepted the proposal. Reyes was subpoenaed to testify at the hearing and verified the accuracy of the article. Sandoval insisted that Reyes misquoted him on this point as well as throughout the article, but it is striking that the reporter would have misquoted him as giving a version that was consistent with the Company's version when Reyes himself was not able to contact the Company for its version of events. It is highly unlikely that Reyes not only would have misquoted Sandoval, but would have misquoted him in a way that was consistent with the Company's version when the reporter never talked to the Company. Reyes also quoted Sandoval as saying that he submitted the Company's counterproposal of October 7, 2003 to the Union members and that they turned it down. Reyes's testimony is significant in an even more fundamental sense. Not only was he a credible witness, but he was the only witness at the hearing who had no apparent motive to fabricate his testimony.*fn6 Therefore, where his testimony contradicted that of Sandoval, it discredits Sandoval. I find Sandoval's testimony unbelievable that the reporter misquoted him.*fn7 While the subject of this discredited testimony by Sandoval could be said to be over a collateral issue, one could conclude that if Sandoval was untruthful in that regard, then he was also being untruthful in other areas where his testimony was uncorroborated or disputed.

  Aside from that of Sandoval and Acevedo, the testimonies of other Union officials reflects a strong desire to placate restive employees. For example, in a letter from Union Secretary Treasurer Chris Andersen to John Lilovich on December 1, 2003, Andersen denied that the Union was "refus[ing] to meet and bargain a new contract," and stated that "at no time has Local l refused or rejected the idea of meeting to bargain a fair contract" (Co. Ex. 15). At the hearing, Andersen attempted to offer an explanation that he did not mean to state that there was not a successor contract already in effect, but was really just writing the letter for the consumption of the rank-and-file. This testimony confirms strong pressure on Union officials to negotiate a new contract and demonstrate strong leadership in this effort. This pressure could certainly have motivated other Union officials to testify as they did.

  This theory of intentional misrepresentation on behalf of the Union is contradicted only by the fact that, with the exception of Sandoval and Acevedo, there was little in the respective demeanor of the other Union witnesses that suggests intentional misrepresentation. But bearing in mind the evidence I heard, the only other credible version of what happened here was touched upon by the Union's lawyer in his hypothesis as to why Sandoval might have denied making statements in the Hoy article that were attributed to him:

If we assume that the reporter from Hoy did not misinterpret what Mr. Sandoval told him and wrote down verbatim exactly what Mr. Sandoval told him, then it has to be that Mr. Sandoval actually believed that he said something differently than what was posted in that paper. He can come up [on] the stand and say, I said something, I said this but I didn't mean this because he actually believes that he didn't say that.
In other words, Sandoval believes the truth of that to which he testified, regarding both the Hoy incident and the events surrounding the September 23 meeting. However, he believes in the truth of that to which he testified not because those events happened as he says they did, but because he wants — if not needs — to believe that they happened as he described. With the possible exception of Acevedo, the same may be said about all the Union witnesses. Given the strong pressure they were under, their prolonged attempt to reach a new agreement, and the fact that the employees were ready to strike, the Union officials were desperate for and pre-determined to get an agreement on September 23 and came to believe that they actually got it even though the facts tell otherwise. Morally, it is better if they believed what they were saying but it does not alter the fact that what they said is not true.*fn8 I considered that the Company witnesses also had an incentive to shade their testimony and thus may have been the ones telling the inaccurate version of what happened. Perhaps the Company manipulated the entire negotiating process. Historically, it is a union shop, but it had been a while since the old CBA lapsed. The Company had an obligation to negotiate in good faith, but it may have adopted a strategy of delaying and/or negotiating to a standstill. It might have engaged in regressive bargaining to make the Union look ineffectual in the eyes of the employees and so help "bust" the Union or break any strike called. One way to execute this policy would be deliberately misleading the Union into believing there was an agreement on September 23 by declaring that there was a contract and shaking hands with the members of the Union negotiating team.

  I reject this theory as not the fact. First, nothing supports an inference that the Company was deliberately engaging in regressive bargaining in an effort to make the Union look ineffectual in the eyes of the employees and to "bust" the Union. The Company had what appears to have been a 20-year history of peaceful union relations, and it is improbable that the same people in management would suddenly have become anti-union in the 20th year. In addition, the Company officials seem to have been very diligent in meeting repeatedly with Union officials, and it was John Lilovich who set up the meeting on September 23.*fn9 With respect to this particular negotiation, an agreement was almost reached by March 2003, but the Union backed down from this proposal. These actions are inconsistent with some subversive strategy of delaying and/or negotiating to a standstill absent a finding of Machiavellian sublety which I find lacking in the Company owners. In the end, the Company witnesses were straightforward witnesses who were relatively unshakeable on cross examination. I find Company's version of events and intentions is credible

  Accordingly, I adopt the additional findings of fact:

  12. The final proposal made on September 23 was the Union's. The proposal was for an increase of S.50 an hour in the first year, $. 10 an hour in the second year, no increase in the third year, and a bonus of $100 in December 2003. Sandoval wrote out this proposal on a sheet of paper with the Union's logo on it and tendered it to Lilovich as the Union's last proposal (Co. Ex. 9). John brought this proposal in with him to show Tony and Joe, explaining that it was the Union's proposal. Joe, John and Tony decided that John should go back outside and terminate the meeting and ask Sandoval to write it up as a formal proposal and fax it to the Company for its consideration by the shareholders. *fn10 13. When Lilovich returned to the meeting, Sandoval presented to him some form to sign as evidence to an agreement. This document made no reference to the proposal being his or the Union agreeing to the Company's proposal, but rather simply contained the Union's proposal with a line for Lilovich's signature. Lilovich refused to sign the document because he did not have the authority to agree to the proposal, but told Sandoval to fax him a typewritten proposal that the shareholders would consider it and to which they would respond. Lilovich never said that the Union had a contract and did not shake hands with the members of the negotiating team.*fn11 14. Toward the end of the meeting Tony and Joe came out to join the meeting and another management representative, Richard L. Havlin, arrived as well. At that time, Sandoval insisted that the Company then and there sign a paper for an agreement or else he would not negotiate further and the employees would go on strike. John, Joe and Tony told Sandoval they would not sign any paper until the proposal was reviewed by all of the shareholders of the Company. Sandoval became agitated, and kept insisting that he wanted a contract that day, and that the meeting ended in rancor with both parties walking away and no one shaking hands.*fn12

  15. On September 29, 2003, the Union sent John Lilovich a document entitled "Tentative Agreement," which was signed by Sandoval and Bridgemon. The Company did not countersign the document but instead faxed back a counter-proposal on October 7, 2003, which offered a 3-year agreement with increases of $.25 in the first year, $.25 in the second year, and $. 10 in the third year and no bonus.

  16. On December 1, 2003, Union Secretary Treasurer Chris Andersen sent a letter to John Lilovich denying that the Union was "refus[ing] to meet and bargain a new contract," and stated that "at no time has Local l refused or rejected the idea of meeting to bargain a fair contract." (Co. Ex. 15). 17. Based on the facts above, there was no meeting of the minds on September 23, 2003, and, therefore, no agreement was entered into between the Company and the Union either then or at any other time during negotiations.

  CONCLUSIONS OF LAW

  1. I have jurisdiction over this case under § 301(a) of the LMRA.

  2. There was no contract entered into between the parties on September 23, 2003 or at any other time during negotiations for a new contract, and the Company therefore could not have violated any such "contract."

  3. This decision is binding both on the Union and on the NLRB (whose motion to intervene in this case was granted). Neither the Union nor the NLRB will take any action that is contrary to the findings and conclusions of law stated herein.*fn13 4. Judgment is hereby entered in favor of Plaintiff T & J and against Defendant Local 1.


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