In the

United States Court of Appeals

For the Seventh Circuit

____________

No. 03-3699

NATIONAL LABOR RELATIONS BOARD,

Petitioner,

v.

GENERAL TEAMSTERS UNION LOCAL 662,

Respondent.

____________

Application for Enforcement of an Order 

of the National Labor Relations Board.

No. 18-CB-4111

____________

ARGUED APRIL 15, 2004—DECIDED MAY 13, 2004

____________

Before FLAUM, Chief Judge, and MANION and ROVNER,

Circuit Judges.

FLAUM, Chief Judge. In 2003, the National Labor Relations Board (“NLRB”) concluded that the General Teamsters Union Local 662 (“the Union”) had violated Section

8(b)(3) of the National Labor Relations Act by refusing to

execute a contract it had negotiated with W.S. Darley &

Company (“the Company”). The NLRB then applied to this

Court for enforcement of its order. For the reasons stated

herein, we grant enforcement of the NLRB’s order.
2 No. 03-3699

I. BACKGROUND

The Union is the exclusive bargaining representative for

all of the employees at the Company’s Chippewa Falls

manufacturing facility. In May 2000, the labor agreement

between the Union and the Company expired and the parties began negotiating a new agreement. The parties soon

reached an impasse, and the Union went on strike in

August 2000. 

During the strike, seven bargaining unit members crossed

the picket line and returned to work. The future employment status of these employees, known as “crossovers,”

became yet another point of contention between the Company and the Union. The Company of course wanted these

employees to be retained after the strike ended, but the

Union disagreed. Negotiations on this and other issues

continued on an irregular basis throughout the strike.

At this point, some of the unit employees began complaining that the Union’s four employee-representatives on the

negotiating committee seemed more attentive to personal

agendas rather than the interests of the group. The Company also had been having problems with these four

representatives, and therefore expressed concern to the

Union that these employees were detrimental to labormanagement peace.

On the morning of October 3, 2000, the parties began a

negotiation session to attempt to end the strike. The Union

was represented by its international vice president and

its secretary-treasurer. The four employee-representatives

were also available nearby in the Union’s caucus room. In

turn, the Company was represented by its attorney. Both

the Union and the Company knew that the Union’s constitution required that any agreement made by the parties

be ratified by a majority vote of the bargaining unit employees.

At the onset of this negotiation session the parties resolved several issues. However, there remained two points
No. 03-3699 3

of disagreement. First, the parties disagreed about what to

do with the crossover employees. During the strike the

Company had subcontracted work out. As a result, there

was insufficient work for more than four employees in the

division where four of the crossovers were currently working. The Union insisted that four strikers who had more

seniority than the crossovers be given the positions, but the

Company did not want to lay off the crossovers to make

room for strikers. Additionally, the parties disagreed about

how to deal with the four employee-representatives who the

Company believed impaired relations with the Union. In

order to reach a final agreement, the Company proposed a

quid pro quo under which the Company would find work for

all eight employees (both the four crossovers and the four

strikers), and in return the four employee-representatives

would agree to resign their Union positions and not seek

Union positions for the duration of their tenure with the

Company. 

When first presented with this proposal, the Union was

hesitant to accept an agreement that required their employee-representatives to waive their rights to hold Union

positions. The Union subsequently spoke to the employeerepresentatives who agreed to consider the proposal if it

was put in writing. The Company added the quid pro quo to

the contract that the parties had been drafting. The relevant provisions stated:

3. The union bargaining committee agrees to resign

their committee positions and agrees further not to run

for or hold any union bargaining unit position during

the remainder of their employment at the W.S. Darley

& Co. The committee will sign individual waivers

confirming this agreement.

4. The company will recall four (4) additional employees

in consideration for the agreement outlined in paragraph 3 above.
4 No. 03-3699

The Union took this proposal back to the employeerepresentatives and informed them that their agreement

should be voluntary and that it was exclusively for the

purpose of keeping four co-workers employed who would

otherwise be laid off. The four employees agreed to the proposal and stated that they could live with it. 

After the employee-representatives agreed, the Union told

the Company that it accepted the offer and would present

the offer for ratification by the Union members. The Union

informed the Company that it would not make a recommendation that the employees either accept or reject the

contract. The representatives of the Union and Company

shook hands and announced to the media that a tentative

agreement had been reached.

The ratification vote was subsequently scheduled for 5:00

p.m. on October 4, 2000. However, between the end of

bargaining and the ratification meeting, two of the employee-representatives decided that they no longer wanted

to resign their Union positions. The Union therefore decided

that the membership should not vote on the quid pro quo

provisions. When the contract was handed out to employees

it included the quid pro quo provisions, but the Union

instructed employees that they would not be voting on those

issues. The employees then ratified the contract by a vote

of 37-31.

The following Monday, October 9, the strikers returned to

work. Included in this group were the four strikers whose

employment was provided for in the quid pro quo provisions

of the contract. That same day, the Company called the

Union to find out why one of the employee-representatives

who should have resigned was signing Union grievances. At

this point, the Union informed the Company that the Union

did not submit the quid pro quo provisions to the employees

for ratification. The Company protested that the Union

could not amend the contract by ratifying what it wanted
No. 03-3699 5

and rejecting what it did not want. The Company insisted

that the parties had an agreement that included the quid

pro quo provisions.

The Union subsequently sent several letters to the

Company referring to the contract between the parties as

valid. None of these letters mentioned that the quid pro quo

provisions had been removed from the contract, nor did the

letters indicate that the employees’ ratification

was incomplete or ineffective. On January 8, 2001, the

Company sent a copy of the contract including the quid pro

quo provisions to the Union for execution. The Union never

signed it.

On April 2, 2001, the Company filed an unfair labor

practice charge with the NLRB, alleging that the Union

violated the National Labor Relations Act by refusing to

execute the parties’ contract. The Administrative Law

Judge (“ALJ”) agreed that the Union had violated Section

8(b)(3) of the National Labor Relations Act, and the NLRB

affirmed the ALJ’s rulings, findings, and conclusions. The

NLRB now asks this Court to enforce its order.

II. DISCUSSION

In reviewing an order of the NLRB, this Court gives substantial deference to both the NLRB’s findings of fact and

conclusions of law. See Lincoln Park Zoological Soc’y v.

NLRB, 116 F.3d 216, 218 (7th Cir. 1997). The NLRB’s factual findings must be upheld as long as they are supported

by substantial evidence on the record as a whole. See id.

The NLRB’s legal conclusions will be upheld unless they are

irrational or inconsistent with the National Labor Relations

Act. See id. It is undisputed that Section 8(d) of the National Labor Relations Act requires parties to execute

contracts that incorporate agreements reached by the

parties. See NLRB v. Local 554, Graphic Communications

Int’l Union, 991 F.2d 1302, 1305-06 (7th Cir. 1993).
6 No. 03-3699

Whether the parties have reached an agreement is a factual

question to be decided by the NLRB. See NLRB v. Burkart

Foam, Inc., 848 F.2d 825, 829 (7th Cir. 1988).

In this case, the NLRB found that an agreement between the Company and the Union was reached when the

representatives of each group shook hands after agreeing on

the quid pro quo provisions. However, the Union argues

that such an agreement does not rise to the level of a

binding contract because: (1) employee ratification was a

condition precedent to contract formation; (2) without ratification there was no meeting of the minds; and (3) the

employee-representatives’ written waivers constituted a

condition precedent to contract formation.

We begin with the Union’s arguments that ratification was a condition precedent to contract formation

and that without ratification there could be no meeting of

the minds. At the outset, the Union must prove that the

parties agreed that ratification was necessary to contract

formation. See NLRB v. Roll & Hold Div. Area Transp. Co.,

Inc., 957 F.2d 328, 331 (7th Cir. 1992); see also NLRB v.

Truckdrivers, Chauffeurs & Helpers, Local Union No. 100,

532 F.2d 569 (6th Cir. 1976). As this Court has previously

held, the fact that a union has bylaws that require all

agreements to be ratified does not automatically result in

a condition precedent to contract formation. See Roll &

Hold, 957 F.2d at 331. Neither does the fact that the

company negotiating with the union knows that the bylaws

require ratification. See id. Therefore we seriously doubt, as

did the NLRB, that the Union could establish that a

condition precedent existed in this case. At most, the Union

can show that it advised the Company that there would be

a ratification meeting. The Union does not provide any

credible evidence to show that the Union representatives

informed the Company that they lacked authority to bind

the Union.
No. 03-3699 7

But even if the Union could prove that such a condition

precedent existed, it would still not prevail. It is a wellknown precept of contract law that when the occurrence of

a condition precedent is totally within the control of one of

the parties, that party has a duty to act in good faith and

with reasonable efforts to bring about its occurrence. See,

e.g., E.B. Harper & Co., Inc. v. Nortek, Inc., 104 F.3d 913,

919 (7th Cir. 1997). Here, as soon as the Union accepted the

Company’s proposal (which included the quid pro quo

provisions), it informed the Company that a ratification

vote would be scheduled and that the Union would not

make a recommendation as to whether the employees

should accept or reject the contract. What the Union actually did, however, was schedule a ratification vote and

then instruct the employees that they could not vote on the

quid pro quo provisions. Now the Union attempts to avoid

the contract on the basis of improper ratification of the quid

pro quo provisions. This Court will not sanction such unfair

and dilatory tactics. See NLRB v. Local 554, Graphic

Communications Int’l Union, 991 F.2d 1302, 1307 (7th Cir.

1993) (holding that where a contract between an employer

and a union is conditioned upon the union obtaining

approval from its international headquarters, the union

cannot avoid the contract by failing to submit the contract

to its international headquarters). There was a meeting of

the minds when the parties shook hands agreeing to the

contract terms and the Union promised it would have a

ratification vote on those terms. The fact that the Union

later broke its promise does not invalidate the original

agreement.

Moreover, the Union may be bound to the agreement

under an estoppel theory. See id. After the Company informed the Union that it could not pick and choose contract

terms and the Company asserted that the parties had an

agreement including the quid pro quo provisions, the Union

sent multiple letters confirming ratification and requesting
8 No. 03-3699

that the Company provide it with a copy of the contract.

The strike ended, as planned, and the Company employed

the four workers provided for under the quid pro quo

provisions. The Company did not know that the Union had

changed its mind about the quid pro quo provisions until it

discovered the employee-representatives still acting on

behalf of the Union. In sum, the Union acted consistently

with a theory of total ratification and accepted the benefit

of the quid pro quo provisions but now argues that ratification of those provisions never occurred. These factors, added

to those already discussed, provide substantial evidence

supporting the NLRB’s conclusion that a valid agreement

was reached in spite of the lack of employee ratification.

Similarly, we are not persuaded by the Union’s arguments that the employee-representatives’ written waivers

were a condition precedent to contract formation. The quid

pro quo provisions stated that the “committee will sign

individual waivers confirming this agreement.” This indicates that the agreement had already been reached and

that the signatures were a mere formality. This does not

indicate that the written waivers were a necessary condition before an agreement could be reached. Under the law,

all that is required for an employee to waive the right to

hold union office is a clear and unmistakable statement of

intent to waive this right. Cf. Metropolitan Edison Co. v.

NLRB, 460 U.S. 693, 707-08 (1983). Moreover, a union may

waive its members’ rights. See id. at 706-07; Merillat

Indus., Inc., 252 N.L.R.B. 784, 786 (1980). Considering the

plain language of the contract, as well as the fact that the

employee-representatives clearly and unequivocally orally

waived their rights and agreed to the contract provisions,

there was substantial evidence supporting the NLRB’s

conclusion that written waivers were not a condition precedent to contract formation.

Even if the NLRB correctly determined that a contract

existed between the parties, the Union argues that the quid
No. 03-3699 9

pro quo provisions contained an illegal bargaining subject

and therefore the Union was not required to execute the

contract. Subjects of collective bargaining contracts fall into

one of three categories—they may be either mandatory,

permissive, or illegal. See Hill-Rom Co. v. NLRB, 957 F.2d

454, 457 (7th Cir. 1992). Mandatory subjects may be

unilaterally determined by the employer, permissive

subjects may not be implemented unilaterally, and illegal

subjects are those that may not be included in a contract at

all. See id.; see also Eddy Potash, Inc., 331 N.L.R.B. 552,

559 (2000). The first problem with the Union’s argument is

that it was made for the first time to the NLRB. As we have

previously held, a party waives the right to appeal an issue

to the NLRB if it did not raise the issue below. See, e.g.,

Barton Brands, Ltd. v. NLRB, 529 F.2d 793, 801 (7th Cir.

1976). The Union argued before the ALJ that the quid pro

quo provisions contained a permissive subject of bargaining.

Thus, the NLRB properly refused to consider the Union’s

new argument that the quid pro quo provisions were an

illegal subject of bargaining. In any event, the Union’s

argument should not have prevailed because an employee’s

waiver of his right to hold union office is a permissive

subject of bargaining and not an illegal one. See Southwestern Portland Cement Co., 289 N.L.R.B. 1264, 1280 (1988)

(stating that who can be on the union grievance committee

is a permissive subject of bargaining); Merillat Indus., Inc.,

252 N.L.R.B. 784, 786 (1980) (stating that “a union may

contract away its freedom to choose its representatives by

specifying, in a collective-bargaining agreement, who they

are to be”). 

Finally, the Union argues that the NLRB’s decision exceeds the scope of the NLRB’s authority because it impermissibly intrudes into the Union’s internal affairs. We conclude that this issue was not internal because it involved

the Union’s relationship with the Company. See Service

Employees Local 254, 332 N.L.R.B. 1118, 1125 n.20 (2000).
10 No. 03-3699

Cases involving the formation or validity of a union agreement are well within the NLRB’s authority, even when they

also involve a union’s discipline of its members. See Pattern

Makers’ League of North America v. NLRB, 473 U.S. 95, 100

(1985); Bethenergy Mines, 308 N.L.R.B. 1242, 1244-45

(1992). The Union’s argument to the contrary is therefore

without merit.

III. CONCLUSION

Substantial evidence supports the NLRB’s finding that

the Union violated the National Labor Relations Act when

it refused to execute the agreement it had reached with the

Company. Therefore, we ENFORCE the NLRB’s order in full.

A true Copy:

Teste: 

 ________________________________

Clerk of the United States Court of

Appeals for the Seventh Circuit 

USCA-02-C-0072—5-13-04