## Facts

- Jewel Food Stores operated roughly 180 supermarkets in the Chicago area and employed over 15,000 workers represented by UFCW Local 881.
- Jewel and the Union negotiated a collective-bargaining agreement (CBA) intended to run from September 15, 1982, to June 15, 1985; it was reduced to writing and ratified by the membership on January 27, 1983.
- The written CBA set wage and benefit terms, including a provision stating that during the agreement’s term Jewel would pay not less than the minimum wage rates set out in an appendix.
- During negotiations, certain Union officials and Jewel management allegedly reached undisclosed oral understandings that modified central wage terms reflected in the ratified written CBA.
- After discount competitor Cub Foods entered the market, Jewel implemented cost-cutting measures, including wage reductions, prompting many employees to resign or otherwise leave employment.
- In separate 1984 litigation brought by the Union, the dispute resulted in arbitration and a 1985 consent judgment restoring certain wages and benefits for current employees, not for former employees.
- Former employees filed suit under LMRA § 301 alleging (i) Jewel breached the CBA and (ii) the Union breached its duty of fair representation.
- The duty-of-fair-representation claims were resolved against plaintiffs before trial; the remaining breach-of-contract claim proceeded to a jury trial against Jewel.
- At trial, the district court admitted parol evidence concerning the alleged secret side deal; the jury returned a verdict for Jewel.

## Issues

1. Whether the written, ratified CBA was a fully integrated agreement such that evidence of undisclosed oral side understandings modifying wage terms should be excluded under the parol evidence rule.
2. Whether, considering the admitted evidence of side understandings, Jewel’s wage reductions and related conduct breached the parties’ labor contract as actually agreed.
3. Whether the district court’s evidentiary and contract-integration rulings required reversal of the defense verdict.

## Decision

- The Seventh Circuit affirmed the judgment for defendants.
- The court held the district court did not err in concluding the written CBA was not necessarily a complete integration and in admitting parol evidence of the alleged side understandings.
- The court held the jury’s verdict for Jewel on the breach-of-contract claim was supported by sufficient evidence and would not be disturbed on appeal.
- Prior dispositions leaving the Union out of the case remained undisturbed.

## Legal Principles

- In interpreting collective-bargaining agreements under federal labor-contract law, integration for parol-evidence purposes turns on whether the parties treated the written CBA as the complete and exclusive memorial of their bargain.
- A ratified written CBA is not automatically deemed fully integrated; when the employer and union conduct indicates reliance on additional understandings, a court may admit parol evidence to determine the actual agreement.
- The presence of undisclosed side negotiations affecting material terms does not, by itself, require exclusion of parol evidence in a § 301 contract action; the factfinder may consider such evidence in deciding contract content and breach.
- Appellate review of a civil jury verdict is deferential; if the record permits a rational verdict for the prevailing party, the verdict stands.

## Conclusion

The Seventh Circuit upheld a defense verdict on a § 301 breach-of-CBA claim, holding that the district court properly admitted evidence of undisclosed oral side understandings because the written, ratified labor agreement was not shown to be the parties’ complete and exclusive expression of their bargain.


Merk v. Jewel Food Stores, 945 F.2d 889 (7th Cir. 1991)