Answer questions in good detail after reading case study !

The Company owns and operates a nursing home for the elderly at its facility in Los Angeles, California. Jeoung Lee (J. Lee) is president of the Company. Although the Company is a corporation, witnesses spoke of J. Lee as the owner. The Company and the Union were parties to one collective bargaining agreement that expired on June 30. The Company and the Union conducted six negotiating sessions over the terms of a new agreement. The Union was represented by Estrada and the Company by Yokoyama and Jarvis, neither of whom had previously negotiated a collective bargaining agreement for the Company. According to Jarvis, prior to commencement of negotiations, J. Lee, who speaks broken English, met with him and Yokoyama. She told them to go to the negotiating meetings and bring back information. Yokoyama testified that his role was to represent J. Lee at negotiations, to give information requested by the Union during negotiations, and to collect any information or agreement and present it to J. Lee.

According to the Union, Jarvis told the negotiating group that Yokoyama had the authority to negotiate and that J. Lee had empowered Yokoyama with the authority to reach final agreement for the Company. The Union denied there was any discussion that a final agreement would need to be approved by J. Lee.

Yokoyama, testifying for the Company, said that Estrada asked at each negotiation session why J. Lee was not present, and they answered that she was extremely busy and could not attend but that J. Lee would be the final person to approve any contract.

The last negotiations lasted eight to nine hours and, with a federal mediators help, the parties reached a final agreement. The parties initialed a six-page document entitled Tentative Agreement, Summary of the Agreement, which included an appendix of wage rates effective July 1. According to the Union, the parties discussed the fact that the bargaining unit employees needed to vote on the provisions before the agreement could be considered final but there was no discussion about J. Lee or anyone else in management having to approve any agreement.

According to Yokoyama and Jarvis, after the parties reached a tentative agreement, the Union asked if the Company was going to sign the contract. Yokoyama told them that he could not sign the contract without J. Lee signing the contract, that she would be the final person to approve the contract. Yokoyama testified that he reminded the Union he would initial each point, but the final approval would have to be made by J. Lee and then the Union asked, When is J. Lee going to look at this? One union bargaining team member confirmed that the Companys representatives said they would have to show J. Lee the agreement.

Yokoyama personally left the draft agreement in J. Lees office in her absence and also gave a copy to the payroll office, explaining that it was a tentative agreement. On July 1, the Company implemented the wage provisions set forth in the tentative agreement. In early August, upon her return from Korea, J. Lee told Yokoyama that she did not approve of the wage increases and that she wanted to change wages back to what they were prior to July 1. J. Lee then held a meeting with employees and told them that the increases were not part of the agreement, that the increase was too costly, and nobody had told her that they had signed a contract on her behalf. Without notifying the Union, the Company rescinded the wage increases.

The Union filed an unfair labor practice for refusing to sign the negotiated agreement and for not notifying the union that the wage increase was being rescinded. The Union pointed out that the duty to bargain carries an obligation to appoint a negotiator with genuine authority to carry on meaningful bargaining on key issues. And while an employer is not required to appoint an individual possessing final authority to enter into an agreement, the law is clear that an agent assigned to negotiate a collective bargaining agreement is clothed with apparent authority to bind the principal unless notice is given to the contrary. Therefore, if the agent does not have authority to bind his principal, notice of that must be clearly and unambiguously given. If an employers agent does not clearly communicate the existing condition precedent of his principals approval of any agreement, the refusal to sign the agreement is unlawful. The Union testified that Yokoyama and Jarvis repeatedly said they could negotiate on behalf of the Company. There was no clear or unambiguous notice that the agreement reached at the bargaining table would have to be approved by J. Lee. Therefore, refusing to sign the agreement was an unfair labor practice.

The Union also objected to J. Lees failure to notify the union that the wage increase was being rescinded. It is an unfair labor practice to change benefits without notice to the union and an opportunity to negotiate the change.

The Company responded on the bargaining in bad faith claim that if negotiators on the other side are apprised in advance of a requirement that any final and binding agreement is dependent on approval by the employer and that the agreement fashioned by the parties is only a tentative one, then either party has the right to reject it after presentation to its principal. So the issue in this case is what authority Yokoyama and/or Jarvis possessed to bind the Company by their negotiations and whether they conveyed to the Union that J. Lees approval was a condition precedent to any final and binding collective bargaining agreement. The Company further argued that in spite of the conflicting testimony as to what was said at the negotiation sessions, the circumstances of the negotiations support a conclusion that not only did Yokoyama communicate the necessity of preapproval by J. Lee but also that the Union understood that to be the case. Both Jarvis and Yokoyama were inexperienced in labor negotiations and therefore it was unlikely that they would be given carte blanche to bind the Company. The Union admitted that in responding to wage and benefit proposals, Yokoyama referred to J. Lees opinion on the subject and at one point, the Union negotiator demanded that J. Lee be present at negotiations. The persistent urging to have J. Lee present suggests that the Union was aware that J. Lees approval of contract terms was necessary. All the testimony agreed that the Company representatives only claimed the authority to negotiate or bargain. The authority to negotiate is not intrinsically equivalent to the authority to reach final agreement. Finally, the document initialed on the last day of negotiations specifically stated it to be a tentative agreement.

On the issue of an unfair labor practice for failing to notify the Union of the Companys decision to rescind the wage increase, the Company argued that because the wage increase had not been agreed to and was simply an error, it was not a benefit. There is no requirement to meet with or negotiate with the Union on correcting a mere bookkeeping error.

• Explain why it might be an unfair labor practice for the company to rescind the pay raise without first meeting with the Union. It is not an unfair labor practice for an employer to send negotiators to the bargaining table without the authority to give final approval to the negotiated terms, but is it a good or a bad idea? Explain.