## Facts

- A union representing hotel and restaurant employees sought specific performance of a purported collective bargaining agreement and payment of allegedly delinquent health and welfare contributions.
- Around May 1, 1962, the general manager of a Kansas City motor inn signed a standard industry labor agreement form (“green contract”) commonly used with members of a local hotel association.
- The union had executed a separate master agreement with the hotel association; the green contract functioned as an employer’s adoption of those association terms.
- The green contract was not countersigned by a union official.
- The employer contended the green contract was unenforceable because (i) the union did not sign it, (ii) the general manager lacked actual or apparent authority to bind the company, (iii) the union allegedly lacked majority employee support when the document was signed, and (iv) a strike on October 18, 1962 and a purported rescission letter dated October 19, 1962 ended any obligations.
- Evidence showed the employer’s vice president later told the general manager he lacked authority to sign, but there was also evidence that before signing he had been told he could pay union-scale wages and could join the local hotel association on the employer’s behalf.

## Issues

1. Whether the union’s failure to countersign the green contract prevented formation or enforceability of a collective bargaining agreement due to lack of mutuality.
2. Whether the general manager had actual or apparent authority to execute the green contract and bind the employer.
3. Whether the agreement was invalid because the union allegedly did not represent a majority of employees at the time of execution.
4. Whether the strike and the employer’s subsequent letter could rescind or terminate the agreement and eliminate the claimed benefit-fund obligations.

## Decision

- The court held the employer was bound by the green contract executed by its general manager.
- The court rejected the defenses based on the union’s non-signature and the employer’s asserted lack of mutuality.
- The court found the manager’s execution of the agreement attributable to the employer under agency principles, at least on an apparent-authority theory grounded in the employer’s manifestations of authority in labor matters.
- The court declined to treat the asserted lack of union majority status, the strike, or the employer’s attempted rescission as negating enforceability on the record presented.
- The court granted relief to the union, including enforcement of the agreement’s health and welfare contribution obligations.

## Legal Principles

- A collective bargaining agreement may be enforceable where the parties’ obligations are established through a master agreement and an employer’s signed adoption form, even if the union does not countersign the particular adoption document.
- An employer may be bound by a manager’s execution of a standard labor agreement when the employer’s conduct reasonably indicates the manager has authority to act in labor-relations matters; internal limitations not communicated to the union do not defeat apparent authority.
- An employer cannot avoid contractual benefit-fund obligations by unilateral post-dispute repudiation where the agreement is otherwise enforceable and the asserted termination does not satisfy applicable legal requirements.
- Courts may order specific performance of bargained-for health and welfare contribution provisions when a valid labor agreement exists and contributions are due.

## Conclusion

The court enforced a hotel labor agreement signed by the employer’s general manager and ordered compliance with benefit contribution obligations, holding that the union’s lack of countersignature and the employer’s after-the-fact authority and rescission defenses did not defeat the agreement’s enforceability.


Local Joint Exec. Bd. v. Nationwide Downtowner Motor Inns, Inc., 229 F. Supp. 413 (W.D. Mo. 1964)