Court Opinion

ID: 9466022
Source: CourtListenerOpinion
Date Created: 2023-08-05 01:03:33.437269+00
Date Added: 2024-06-11T17:39:30.445363
License: Public Domain

ALBERT V. BRYAN, Senior Circuit Judge,
dissenting:
With deference to my brothers, the proposed opinion fails to recognize that General Counsel, rather than Banta (the Company), abrogated the Settlement Stipulation (the contract) in substantial and material points, justifying Banta’s disaffirmance and termination of the agreement.
The fact is that General Counsel — unintentionally, of course, but nonetheless actually — misled Banta into signing the contract by asserting the immediacy of its effectuation. On July 22, 1977, Banta, therefore, signed the contract, less than a month after the Regional Director filed the complaint. As submitted to the Company, the Stipulation declared that without any further notice the Company consented to the entry “forthwith” of an order by the Board requiring Banta to comply with the terms of the agreement and preventing it from raising any defenses to the judicial enforcement of the order.
Obviously, “forthwith ” denoted and connoted expedition. Since the Company had been embroiled in the throes of a strike for over three months, plainly, prompt resolution of the problem was the inducement of Banta’s ready joinder in the contract. It was in this spirit that the Company signed before either the Union or, indeed, the Gen*839eral Counsel had done so. With Banta’s signature secured, however, the spirit of expedition abruptly vanished due to the utter laxity of General Counsel, which prevented dispatch in completing the execution of the contract.
I.
After July 22, for two and a half months, General Counsel was inexplicably inactive in fulfilling his commitment to act “forthwith.” Although termination of the walkout hung on the contract’s approval, even the Regional Director did not sign the Stipulation until August 11. The next day, the paper was sent to General Counsel. Ignoring the urgency of Banta's circumstances, General Counsel deplorably did not approve the Stipulation for six weeks. During its two-month wait, the Company faithfully and regularly, but in vain, reminded General Counsel that the strike was still afoot and the lagging pace was creating grave problems. Indeed, prior to his approval, the Company had protested to General Counsel that further delays would require it to withdraw from the Stipulation.
The Union constantly opposed the Stipulation. General Counsel, on September 20, notified it that he had executed the Stipulation and had sent it to the Board, recommending approval. At the Union’s request, he extended the time for filing objections with the Board until October 5. When this deadline was postponed to October 17, Ban-ta forcefully, but hopelessly, complained saying:
Because of the tremendous delays that have occurred already in the processing of this formal settlement which was initially signed by Banta Division in early July, any further delay would cause irreparable harm, especially since the strike which commenced on April 4 is still in progress. Banta Division therefore requests that the requested extension be denied and/or revoked and that the Board expeditiously act on the formal settlement agreement that has already been recommended and approved by both the Regional Director and the General Counsel.
Ultimately, October 8, the Union signed the Stipulation and notified Banta, simultaneously. The strike ended October 8. Ban-ta at once accepted the strikers’ unconditional offer to return to work and resumed its own operations immediately. On October 20, the Union filed new unfair labor practice charges against Banta. Five days later, October 25, 1977, in understandable exasperation, Banta advised the Board that “in light of the great delay in approving Settlement,” it was withdrawing from the Stipulation “effective immediately.”
Despite the hurt suffered by Banta, enduring a lengthy strike, aggravated by General Counsel’s inordinate dallying, the majority suggests that no injury was done the Company. The majority refuses to impute the delay to General Counsel’s tarrying, ascribing it rather to the Union’s hostility toward the Stipulation. Even if that were so, it was hardly just for General Counsel to temporize with the Union at the expense of the Company. If the Stipulation could not be implemented “forthwith,” as precisely indicated in the provision which engaged Banta’s acceptance, then in justice General Counsel was bound to evince concern and take immediate steps for the Company’s relief. This was but another unmet contract obligation of General Counsel, entitling Banta to withdraw.
Noteworthy here is the majority’s observation that “[t]o permit a respondent unilaterally to withdraw from a formally executed settlement stipulation prior to Board approval would . . . encourage its use as a dilatory tactic.” But how much more of an inciting tactic is it to allow General Counsel to stymie a Settlement Stipulation by simply dawdling in the consummation of it.
II.
In considering whether the Company transgressed the Settlement Stipulation, it is, of course, acknowledged that the roles of General Counsel and the Board are distinct, the first prosecutorial, the latter adjudica*840tory. Nor is it disputed that General Counsel, not the Board, was the party contracting with the Company.
Unquestionably, too, the Settlement Stipulation was the equivalent of a consent decree. Decision upon its continued vitality, breach and termination is governed by the law of contracts, and not contract law jointly with Federal labor statutes, as the majority suggests. The authorities speak as one on this theorem, even in instances such as that here, when an administrative agency offers the forum. Summing the precedents, the Court in United States v. ITT Continental Baking Co., 420 U.S. 223, 236-37, 95 S.Ct. 926, 934-935, 43 L.Ed.2d 148 (1975), stated:
Thus, the basic import of [United States v.] Armour [& Co., 402 U.S. 673, 91 S.Ct. 1752, 29 L.Ed.2d 256 (1971)], [United States v.] Atlantic Refining [Co., 360 U.S. 19, 79 S.Ct. 1246, 3 L.Ed.2d 1312 (1959)], and Hughes [v. United States, 342 U.S. 353, 72 S.Ct. 306, 96 L.Ed. 394 (1952)] is that, since consent decrees and orders have many of the attributes of ordinary contracts, they should be construed basically as contracts, without reference to the legislation the Government originally sought to enforce but never proved applicable through litigation. (Footnote omitted.)
With General Counsel defaulting in performance of a fundamental purpose and proviso in his contract by failing to act “forthwith,” the Company was justified in disaffirming the Stipulation. “A breach or non-performance of a promise by one party to a bilateral contract, so material as to justify a refusal of the other party to perform a contractual duty, discharges that duty.” Restatement of Contracts § 397 (1932).
The late Judge Parker enunciated for this court, in Sylvania Industrial Corp. v. Lilien-field’s Estate, 132 F.2d 887, 892 (4th Cir. 1943): “[I]t is well settled that in proper cases rescission may be granted for default in performance.” (Accent added and citations omitted.) Moreover, in Hogue v. Pellerin Laundry Machinery Sales Co., Inc., 353 F.2d 772, 774 (8th Cir. 1965), it is noted that
In Williston’s language, “ * * * rescission is imposed in invitum by the law at the option of the injured party, and it * * * in general is allowed * * * for any breach of contract of so material and substantial a nature as would constitute a defense to an action brought by the party in default for a refusal to proceed with the contract.” Williston on Contracts (Rev.Ed.), § 1467. (Additional citation omitted.)
Further, in United States v. Southern Construction Co., Inc., 293 F.2d 493, 498 (6th Cir. 1961), it was stated: “Appellant relies upon the well-settled rule that under certain conditions a material breach of contract by one of the parties thereto confers upon the other party to the contract the right to rescind and abandon the contract . . . . ”
Enforcement of the Board’s order should be declined.