NOTICE: This
opinion is subject to formal revision before publication in the bound volumes
of NLRB decisions. Readers are requested
to notify the Executive Secretary, National Labor Relations Board,
Sheehy Enterprizes, Inc. and Laborers’ International Union of North America, State of Indiana
District Council, a/w Laborers’ International Union of
January 30, 2009
DECISION AND ORDER
By Chairman Liebman and Member Schaumber
On September 3, 2008, Administrative Law Judge Joel P.
Biblowitz issued the attached decision.
The Respondent filed exceptions and a supporting brief, and the General
Counsel filed limited cross-exceptions and a supporting brief.1
The General Counsel, the
The National Labor Relations Board3 has considered the decision and the record in light of the exceptions and briefs and has decided to affirm the judge’s rulings, findings, and conclusions as discussed below, and to adopt the recommended Order as modified.4
The judge found that the Respondent violated Section
8(a)(5) and (1) by refusing to adhere to, and repudiating, the
collective-bargaining agreement to which it agreed to be bound on May 21,
2004. In so finding, the judge determined
that the terms of the “Acceptance of Working Agreement” and the collective-bargaining
agreement executed by the Respondent’s owner, James Sheehy, were clear and
unambiguous, and covered all of the Respondent’s employees and work within the
The Respondent excepts to the judge’s finding of the violation,
asserting that the judge erred in refusing to consider Sheehy’s testimony that
Sheehy believed, based on the
The Respondent’s exception amounts to a defense that the
contract is void because of “fraud in the execution”— a term the Respondent
does not use but which fairly encapsulates its argument.6 In addressing the Respondent’s exception, we
find it unnecessary to resolve whether parol evidence is admissible under Board
law to prove that defense. Even if
Sheehy’s testimony concerning the
Sheehy’s testimony does not establish that Union Business Manager David Frye misrepresented to Sheehy that he was signing an agreement covering a single project. Sheehy claimed only that Frye did not say anything “to the effect that by signing that Contract you were bound [on] all your jobs,” and that Sheehy therefore thought “we were talking about a job-specific Contract.” Tr. 119–120. This testimony is insufficient to establish “fraud in the execution.”
As set forth in Horizon
Group, “‘[f]raud in the execution’ arises when a party executes an
agreement ‘with neither knowledge nor reasonable opportunity to obtain
knowledge of its character or its essential terms.’” Horizon
Group, supra at 797, citing Southwest
Administrators v. Rozay’s Transfer, 791 F.2d 769, 774 (9th Cir. 1986),
cert. denied 479
Here, as in those cases, the Respondent had a reasonable
opportunity to read and consider the agreement’s character and essential
terms. The
Alternatively, and to the extent that the Respondent is arguing that the contract should be rescinded because of Sheehy’s mistake in signing it, we reject that defense, as well. In Apache Powder, 223 NLRB 191 (1976), the Board held that rescission for unilateral mistake is “a carefully guarded remedy reserved for those instances where the mistake is so obvious as to put the other party on notice of an error.” In Contek International, 344 NLRB 879 (2005), presented with facts similar to those in this case, the Board rejected the employer’s defense of unilateral mistake because the employer had the opportunity to read the documents but did not do so. Here, as in Contek, Sheehy testified that he did not read the collective-bargaining agreement referenced in the Acceptance of Working Agreement. This is not the type of obvious error that justifies rescission under Apache Powder, supra.
ORDER
The National Labor Relations
Board adopts the recommended Order of the administrative law judge as modified
below and orders that the Respondent, Sheehy Enterprizes, Inc.,
1. Substitute the following for
paragraph 2(b) and reletter the subsequent paragraphs.
“(b) Make whole the unit
employees for any loss of earnings and other benefits they may have suffered as
a result of the refusal to comply with the collective-bargaining agreements,
with interest, as set forth in the remedy section of the judge’s decision as
modified above.
“(c) Make all contractually
required benefit fund contributions, if any, that have not been made on behalf
of unit employees, and reimburse unit employees for any expenses ensuing from
its failure to make the required benefit fund payments, in the manner set forth
in the remedy section of the judge’s decision as modified above.”
2. Substitute the attached
notice for that of the administrative law judge.
Dated,
Wilma
B. Liebman, Chairman
Peter
C. Schaumber
Member
(seal) National
Labor Relations Board
APPENDIX
Notice
To Employees
Posted
by Order of the
National
Labor Relations Board
An Agency of the
The National Labor Relations
Board has found that we violated Federal labor law and has ordered us to post
and obey this notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities.
We will not fail or refuse to give effect to, or fully comply with, the
terms and conditions of employment set forth in the contract we entered into
with Laborers’ International Union of North America, State of
We will not in any like or related manner interfere with, restrain, or
coerce you in the exercise of the rights guaranteed you by Section 7 of the
Act.
We will give effect to the terms of the contract that we entered
into with the
We will make
the unit employees whole for any loss of earnings and other benefits they may
have suffered as a result of our refusal to comply with the collective-bargaining
agreements, with interest.
We will make all contractually required benefit fund contributions,
if any, that have not been made on behalf of unit employees, and we will reimburse unit employees for
any expenses ensuing from our failure to make the required benefit fund payments,
with interest.
We will, upon request,
allow the
Sheehy Enterprizes, Inc.
Rebekah Ramirez, Esq., for the General Counsel.
David Swider, Esq. (Bose, McKinney &
Evans), for the Respondent.
Neil Gath, Esq. (Fillenwarth, Dennerline,
Groth & Towe, LLP), for the Charging Party.
DECISION
Statement of the Case
Joel P. Biblowitz,
Administrative Law Judge. This case was heard by me on July 21, 2008, in
Findings of Fact
i. jurisdiction
Respondent admits, and I find, that it has been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.
ii. labor organization status
Respondent admits, and I find, that the
iii. the facts
Respondent, a concrete construction company operating in
the
The undersigned has read and hereby approves the Contractors-Laborers’ Working Agreement by and between the State of Indiana District Council of the Laborers’ International Union of North America and the Labor Relations Division of the Indiana Constructors, Inc. operating in the State of Indiana and herewith accepts same and becomes one of the Parties thereto. Any deletions, exceptions or alterations to this Acceptance will be void and of no force or effect.
Sheehy signed the acceptance agreement as president of the
Respondent, listing the Respondent’s office address and telephone number. Frye
gave Sheehy a copy of the signed acceptance, as well as a copy of the current
contract between Indiana Constructors, Inc., Labor Relations Division, herein
the Association, and Local Unions of Laborers’ International Union of North
America, State of Indiana District Council, herein the District Council, effective
from April 1, 1999, to March 31, 2004. After
Sheehy signed the acceptance agreement Frye went to some of the Respondent’s
employees who signed to join the
Sheehy testified that while the Respondent was working at
the IUPUI jobsite, he was told by Frye that he needed to sign up with the
On May 21, 2004, Sheehy signed an acceptance of working agreement that is identical to the one that he signed on October 16, 2003, except the latter one is effective from April 1, 2004, through March 31, 2009, as is the agreement that the acceptance agreement provides that he is bound to. He testified that he believed that this was another “job-specific contract,” rather than an agreement binding him for all jobs performed by the Respondent. He further testified that, although he signed the acceptance agreements in 2003 and 2004, he does not believe that he ever received the contracts that these acceptance agreements bound him to honor. In fact, he testified that at the time of the hearing he had not read the latest contract. He also testified that in July or August 2004, after he had completed the IUPUI job, he was called on a number of occasions by Frye saying that he wanted to help the Respondent on their projects. When Sheehy asked what he was getting at, “That’s when he informed me or made me aware of the fact that . . . we were obligated as a union contractor to pay union dues on whatever project that we are working on.” Sheehy told Frye that he would be happy to do that on union jobs, but he could not afford to do it on his nonunion jobs.
The Respondent paid to the
Frye testified that on November 1, 2007, he received a telephone
call from Union Business Agent Dwight Smith telling him that he saw
Respondent’s employees performing concrete curb work at a Walmart construction
site at 4600 Lafayette Road in Indianapolis. Frye told Smith that the
Respondent had a contract with the
Sheehy testified that when he met Smith at the Walmart jobsite on November 1, 2007, Smith “was pretty emphatic about signing up all our guys . . . ” Sheehy told him that he was not to do that and Smith called Frye and gave the phone to Sheehy. Frye told Sheehy that he was bound to their contract for all his jobs and that he was obligated to pay union dues and benefits for all his jobs going back to May 2004. He replied that he didn’t feel that he was bound to it, but that he was willing to work out something for the Walmart job.
Respondent produced testimony to establish that from the
middle of 2004 to November 2007 it was operating as it normally does, out in
the open without making any attempt to conceal its operations. Frye testified
that for the period May 2004 through November 1, 2007, he was not aware of any
jobs that the Respondent was performing in the Union’s jurisdiction in the
The 1999 and 2004 contracts are identical in their relevant provisions. The work covered provision includes all work within the recognized jurisdiction of the International Union in highway construction, heavy construction and railroad contracting, utility construction and related work, and it covers all construction labor employees of the signatory employers, with the exception of warehouse or yard employees, superintendents, master mechanics, mechanics, job foremen, civil engineers, or clerks. Article III, Bargaining Agent, states:
For the purpose of collective bargaining with respect to
wages, hours, and other conditions of employment, the Employer recognizes the
Article IV, Union Security, states, inter alia:
The Contractor, or Employer, recognizes and acknowledges
that the Laborers’ International Union of North America, State of
iv. analysis
The agreements executed by the Respondent in 2003 and 2004 were 8(f) agreements and, prior to John Deklawa & Sons, 282 NLRB 1375 (1987), such agreements could be repudiated by either party and could not be enforced under Section 8(a)(5) of the Act. Deklawa changed that by declaring that permissible 8(f) agreements were enforceable, could not be repudiated prior to their termination dates and were enforceable under Section 8(a)(5) of the Act. Whether it is fair to bind the Respondent and his employees to such an agreement, as counsel for the Respondent argued at the hearing and in his brief, is irrelevant. The Respondent signed two 8(f) agreements and is bound to their provisions. P & C lighting Center, Inc., 301 NLRB 828 (1991). As the Board stated in Cedar Valley Corp., 302 NLRB 823 (1991): “A party may not lawfully repudiate an 8(f) agreement during its term.”
Further, the Board and the courts have consistently
refused to allow a party to use parole evidence of an alleged oral agreement to
vary or contradict the terms of a written agreement. The sole exception to this
rule is that where there are sufficient ambiguities or uncertainties in the
written agreement, parole evidence will be admissible to resolve these ambiguities
in order to determine the parties’ intent. Sansla,
Inc., 323 NLRB 107, 109 (1997); Commonwealth
Communications, Inc., 335 NLRB 765 (2001), enf. denied 312 F.3d 465, D.C.
Cir. 2002. Therefore, the initial issue herein is whether there is any
ambiguity or uncertainty in the contracts regarding the scope and the unit
coverage of these contracts. I find none. Both the acceptance of working agreements
and the collective-bargaining agreements which they refer to are crystal clear.
The contract specifically states that it covers all of the Respondent’s employees
and work within the
Conclusions of Law
1. The Respondent has been an employer engaged in commerce within the meaning of Section 2(2), (6), and (7) of the Act.
2. The
3. By refusing to adhere to, and by repudiating, the collective-bargaining agreement it agreed to be bound by on May 21, 2004, the Respondent violated Section 8(a)(1)(5) of the Act.
The Remedy
Having found that the Respondent engaged in certain unfair labor practices, I recommend that it be ordered to cease and desist therefrom and to take certain affirmative action designed to effectuate the policies of the Act. I recommend that the Respondent be ordered to implement and adhere to the terms of the collective-bargaining agreement effective for the period April 1, 2004, through March 31, 2009, and to make whole the unit employees for any loss of wages or other benefits that they sustained as a result of the Respondent’s repudiation of its responsibilities and obligations under this contract and the earlier one. I also recommend that Respondent be ordered to pay to the appropriate union funds all health, welfare, pension, and other fringe benefits, as provided for in these contracts.
On these findings of facts and conclusions of law and on the entire record, I issue the following recommended[2]
ORDER
The Respondent, Sheehy Enterprizes, Inc.,
1. Cease and desist from
(a) Failing and refusing to bargain collectively with Laborers’ Union of North America, State of Indiana District Council, a/w Laborers’ International Union of North America, by refusing to adhere to, and by repudiating, a collective-bargaining agreement that it entered into with the Union, said agreement being effective for the period April 1, 2004, through March 31, 2009.
(b) In any like or related manner interfering with, restraining, or coercing employees in the exercise of the rights guaranteed them by Section 7 of the Act.
2. Take the following affirmative action designed to effectuate the policies of the Act.
(a) Give effect to the terms of the collective-bargaining agreement effective for the period April 1, 2004, through March 31, 2009, that it agreed to be bound by on May 21, 2004.
(b) Make whole its employees for any wages or other benefits that they may have lost due to the Respondent’s failure to abide by the terms of this, and the prior contract and make whole the union funds for fringe benefits that were supposed to be, but were not, paid by the Respondent pursuant to these agreements.
(c) Upon request, allow the
(d) Preserve and, within 14 days of a request, or such additional time as the Regional Director may allow for good cause shown, provide at a reasonable place designated by the Board or its agents, all payroll records, social security payment records, timecards, personnel records and reports, and all other records, including an electronic copy of such records if stored in electronic form, necessary to analyze the amount of backpay due under the terms of this Order.
(e) Within 14 days after service by the Region, post at
its facility in
(f) Within 21 days after service by the Region, file with the Regional Director a sworn certification of a responsible official on a form provided by the Region attesting to the steps that the Respondent has taken to comply.
Dated,
APPENDIX
Notice to Employees
Posted by Order of
the
National Labor
Relations Board
An Agency of the
The National
Labor Relations Board has found that we violated Federal labor law and has
ordered us to post and obey this Notice.
FEDERAL LAW GIVES YOU THE RIGHT TO
Form, join, or assist a union
Choose representatives to bargain with us on your behalf
Act together with other employees for your benefit and protection
Choose not to engage in any of these protected activities
We will not fail or refuse to give
effect to, or fully comply with, the terms and conditions of employment set
forth in the contract we entered into with Laborers’ International Union of
North America, State of Indiana District Council (the Union) that was effective
for the period April 1, 2004, through March 31, 2009, and we will not in any like or related
manner interfere with, restrain, or coerce you in the exercise of the rights
guaranteed you by Section 7 of the Act.
We will give effect to the terms of the
contract that we entered into with
the Union on May 21, 2004, which
agreement is effective from April 1, 2004, through March 31, 2009, we will make you whole for any loss that you suffered, plus interest, due
to our failure to apply the terms of our contracts with the Union and we will make the union funds whole for
our failure to pay the appropriate amount due to the funds pursuant to the
contract.
We will, upon request,
allow the
Sheehy Enterprizes, Inc.