Court Opinion

ID: 6956413
Source: CourtListenerOpinion
Date Created: 2022-07-24 01:38:22.310769+00
Date Added: 2024-06-11T16:08:17.332172
License: Public Domain

TASHIMA, Circuit Judge,
dissenting:
I must, respectfully, dissent because the Board did not err in applying accepted principles of agency law to conclude that Soren-sen had apparent authority to enter into the Susanville Agreement. The Board’s order, applying those principles to this case, is supported by substantial evidence and should be enforced.
The Board used well-established, common law principles of agency law to determine whether Sorensen had the authority to enter into the Susanville Agreement. The majority concludes that those principles are inapplicable here and, instead, creates and applies a different test to determine whether apparent authority existed. There is no reason to depart from the traditional agency test in this case. Indeed, the majority fails both to explain why such a departure is warranted and to provide adequate support for the adoption of its new test.
The majority explicitly acknowledges the existence of an established common law test to determine if apparent authority exists:
Apparent authority arises from the principal’s manifestations to a third party that supplies a reasonable basis for that party to believe that the principal has authorized the alleged agent to do the act in question.
Majority Opinion at 1099.1
However, instead of applying that traditional test, the majority finds “the common *1102law of agency as applied to the negotiation and ratification of side agreements to collective bargaining agreements applicable to this closely analogous situation.” Majority Opinion at 1100. According to the majority, there is apparent authority in that context only if there is a “general practice” of entering into side agreements without ratification. The majority errs in departing from the established and accepted test and adopting instead its own “general practice” test. There is no reason to adopt a different test for apparent authority in this context and the majority offers none.
The majority does appear to find significant that Sorensen’s actions implicated locals other than his own. However, questions of apparent authority in both inter-union and intra-union contexts involve identical considerations: the balancing of the potential absence of actual authority against the protection of a third party’s reasonable reliance on a principal’s representations regarding the agent’s power to bind the principal.
More importantly, the “general practice” test described by the majority simply does not exist. The opinion cites three out-of-circuit eases in support of its adoption of this test. None of them, however, so holds. The first, JSP Agency, Inc. v. American Sugar Ref. Co., 752 F.2d 56 (2d Cir.1985), does not contain any discussion or application of agency law. The second, Moreau v. Local Union No. 247, Int’l Bhd. of Firemen, 851 F.2d 516 (1st Cir.1988), applies the traditional common law standard used to determine whether there is apparent authority. It does not purport to apply, or even discuss, a different standard of apparent authority for special contexts. The third case, Central States Southeast and Southwest Areas Pension Fund v. Kraftco, Inc., 799 F.2d 1098 (6th Cir.1986), neither adopts nor applies a standard of apparent authority different from the customary common law test.
Instead of applying a test which does not exist, or needlessly creating a new one, I would apply the time-tested common law rule of apparent authority. It is clear that, under that test, the Board’s decision finding apparent authority is supported by substantial evidence. It is undisputed that each local had authority to sign up employers to the Master Agreement. Further, the District Council had made clear to Sorensen that locals were also authorized to sign up an employer to the Master Agreement for only one job or project.2 Through its acknowledgement of a local’s authority to enter into one-job agreements, the District Council gave Sorensen a reasonable basis to believe that a local also was authorized to sign up an employer to the Master Agreement for only a portion of the geographical area covered by the Master Agreement.
The Susanville Agreement was not so different from the prior one-job agreements, with respect to deviations from the contemplated scope of the Master Agreement, that, as a matter of law, the Board was required to find that Sorensen lacked even apparent authority to execute it. The Susanville Agreement’s restriction of the geographical scope of the Master Agreement no more modified the Master Agreement than did the previous one-job agreements. Those agreements embodied a temporal restriction to the applicability of the Master Agreement, while the Susanville Agreement’s “jobs north of Los *1103Angeles” restriction was a geographical restriction.3 Given the established practice authorizing a local to “modify” the Master Agreement by limiting its temporal reach through one-job agreements, substantial evidence supports the Board’s finding that apparent authority existed for a local similarly to limit the Master Agreement’s geographical reach.
The Board correctly identified the principles of agency law applicable to this case and its finding that the Unions engaged in unfair labor practices is supported by substantial evidence. Because I would grant the petition for enforcement, I dissent.

. Apparent authority also results when the principal "permits the agent to do something which reasonably leads another to believe that the agent had the authority he purported to have.” Ha*1102waiian Paradise Park Corp. v. Friendly Broad. Co., 414 F.2d 750, 756 (9th Cir.1969). In addition:
The principal’s manifestations giving rise to apparent authority may consist of direct statements to the third person, directions to the agent to tell something to the third person, or the granting of permission to the agent to perform acts and conduct negotiations under circumstances which create in him a reputation of authority in the area in which the agent acts and negotiates.

Id.

. The majority appears to suggest, based on the letters from Council President Zampa, that the two prior one-job agreements could not provide Coker with a reasonable basis to believe that locals were authorized to enter into such agreements because these were not effective until ratified by the District Council. This suggestion is unsupported by the record. The letters from Zampa merely acknowledged an already completed agreement; they in no way purported to ratify the one-job agreements. In its decision, the Board explains in detail why these letters could not have been construed as suggesting the need for ratification of one-job agreements by the District Council.

. Of course, the one-job agreements, by definition, also contained a geographical restriction, i.e., restriction to one job necessarily included restriction to one geographical location-where the one job was located.