Unpublished Disposition, 872 F.2d 428 (9th Cir. 1986)

MEMORANDUM^* 

Laborers' International Union, Local 89, and Abel Galvan, a laborer (collectively "Local 89"), appeal the district court's judgment in favor of Blake Construction Co. ("Blake") in a suit for back wages and pension contributions allegedly due under a collective bargaining agreement. We affirm.

* In 1983, Blake was awarded a contract for construction of a naval hospital in San Diego, California. Blake joined the Associated General Contractors of America, San Diego Chapter ("AGC"), a multiemployer association representing contractors for collective bargaining purposes. Blake joined the 1983-86 Master Labor Agreement ("MLA") previously negotiated between AGC, on behalf of its members, and four unions, including Local 89.

The MLA expired June 15, 1986. It provided for year-to-year continuation thereafter "unless either party has given sixty (60) days written notice to the other party prior to the anniversary date of their [sic] intention to amend, modify or terminate." On January 29, 1986, Blake sent a telegram to AGC stating: "Effective immediately we hereby withdraw our bargaining rights from [AGC]. We no longer desire the AGC to represent us in collective bargaining with [local 89]. We do intend to remain active members of your chapter." Blake did not independently notify Local 89 of this withdrawal.

On March 12, 1986, AGC notified Local 89 that it was terminating the MLA as of June 15, 1986, that it desired to renegotiate the MLA beginning April 15, 1986, and that "at that meeting" it would identify those employers for whom it was authorized to negotiate. On April 14, 1986, the signatory unions themselves terminated the agreement and asked for the list of employers "forthwith". On April 21, 1986, some five days after the sixty-day deadline, AGC provided a list which did not include Blake. AGC and the unions negotiated a new 1986-89 MLA. By this time Blake had substantially completed the hospital. Blake paid wages and benefits to Galvan at a lower rate than the 1986-89 MLA required following June 15, 1986.¹ 

Local 89 brought suit in state court claiming that Blake owed $4,270 in back wages and $1,895.60 in pension contributions under the 1986-89 MLA. The case was removed to the district court because of federal jurisdiction over suits for breach of a labor contract under section 301 of the Labor Management Relations Act, 29 U.S.C. § 185. The case was tried before a magistrate by agreement of the parties. The magistrate found for Blake after a bench trial, holding that Blake had terminated the 1983-86 MLA by giving timely notice and was not bound by the new agreement. Local 89 timely appealed. Fed. R. App. P. 4(a) (1). We have jurisdiction. 28 U.S.C. § 1291.

We review the district court's interpretation of a labor contract de novo, as a question of law. Pierce County Hotel Employees and Restaurant Employees Health Trust v. Elks Lodge, B.P.O.E. No. 1450, 827 F.2d 1324, 1327 (9th Cir. 1987). The applicable law is federal law. See Lingle v. Norge Div. of Magic Chef, Inc., 108 S. Ct. 1877, 1880-81 (1988).

II

Local 89 claims it did not receive timely notice of Blake's termination of the MLA, and thus that Blake was bound to the MLA as renegotiated by AGC.²  Local 89 bases its claim on agency law, arguing that since Blake terminated its agency relationship with AGC on January 29, 1986, AGC could not act as Blake's agent to terminate the MLA on March 12, and thus that no such termination had any effect as to Blake.

We apply the common law of agency to a section 301 case. Carbon Fuel Co. v. United Mine Workers, 444 U.S. 212, 216-17 (1979). It is clear that an agency relationship existed between Blake and AGC. See Whisper Soft Mills, Inc. v. NLRB, 754 F.2d 1381, 1386 (1984). It is further apparent that Blake amended the scope of the agency by its telegram. See International Bhd. of Elec. Workers, Local 532 v. Brink Constr. Co., 825 F.2d 207, 214-15 (9th Cir. 1987). Blake argues that it intended to limit AGC's authority to bargain collectively, not to end AGC's role as its agent for the purposes of administering the 1983-86 MLA. The text of the limiting telegram supports this argument. Blake did not cut off its relationship with AGC; it merely limited its powers to bargain a future agreement on behalf of Blake. Blake's intent was thus to keep AGC as its agent for purposes relating to the 1983-86 MLA it had signed, including the power to terminate or accept notice of termination of that agreement on behalf of Blake.

Although notification of termination was timely, what Local 89 was not aware of before April 21 was the fact that AGC did not represent Blake in the negotiation of a new MLA. This was a significant fact, since the MLA obviously was intended to be a comprehensive, continuing agreement, and Blake's withdrawal was notification, in effect, that it did not intend to renegotiate the MLA. Since the unions themselves terminated on April 14, however, we do not see how a delay of one week before they learned of Blake's noninclusion harmed them, since notice of Blake's noninclusion was received before the start of negotiations. See Hawaii Carpenters Trust Funds v. Waiola Carpenter Shop, Inc., 823 F.2d 289, 295-96 (9th Cir. 1987) (to promote stability in labor negotiations, employer must provide notice of withdrawal from multiemployer unit prior to commencement of negotiations). The record shows that termination followed by a list of included employers was the normal practice in collective bargaining negotiations between AGC and the unions.

III

Local 89 contends, based on section 6 of the MLA, that even if Blake followed section 2 of the MLA, regarding termination, it still failed to give proper notice. Section 6 is a poorly-drafted section entitled "Employer Membership." It defines "Employers" as "signatory members ... who give power of attorney to [AGC] to bind them to this Agreement."³  It then requires signatory Employers⁴  leaving the AGC to continue to adhere to the MLA, and, in 6(B), states that "An Employer may be released from ... the [MLA] only if he notifies in writing ... the Unions at least sixty (60) days prior to the expiration date ... of his intent not be [sic] be bound by the new or renewed [MLA]." Local 89 argues that this text means exactly what it appears to say: that each contractor ("employer") must notify the unions independently of AGC's notification. This interpretation ignores, however, both the parties' actual practice and the specific provisions for termination of the entire MLA by all parties, contained in section 2.

When the language of a labor agreement is unclear, the court must determine the parties' intent at the time of execution. Northwest Administrators, Inc. v. B.V. & B.R., Inc., 813 F.2d 223, 226 (9th Cir. 1987); see also International Bhd. of Elec. Workers, Local 387 v. NLRB, 788 F.2d 1412, 1414 (9th Cir. 1986) (per curiam) (listing other factors to be considered in interpreting a labor contract, including the conduct of the parties). Read in the context of the entire agreement, and the parties' conduct, section 6 applies only to contractors leaving AGC membership; since the AGC no longer represents them for any purpose, they are responsible themselves for giving notice. The term "Employer" in 6(B) apparently really refers to an "ex-Employer" or "ex-member" who has withdrawn from membership but not yet terminated the agreement. Blake retained its membership.

The next question is whether Blake put itself into section 6 by its partial withdrawal of agency. The problem is that Blake set up a relationship with AGC not directly contemplated by the MLA. The MLA scheme contemplates two classes of contractors: those who are "signatory"⁵  members, and give power of attorney to AGC; and those who are not members, and must give independent notice. Blake withdrew part of its power of attorney while retaining "membership". It wished AGC to represent it for purposes of the present agreement, but not for a future one. If Blake had withdrawn its entire power of attorney for the present and future MLA, it is questionable whether it could claim continued membership (or at least "signatory membership"), since for section 6 purposes signatory membership seems to be premised on the power of attorney. We conclude, however, that Blake's situation was governed by section 2. Despite the partial withdrawal of agency, Blake retained its membership, properly terminated the 1983-86 MLA through AGC, and was not required by section 6 to give duplicate notice directly to Local 89.

IV

Local 89 argues that Blake adhered to the new MLA through its conduct. The district court found, however, that Blake began attempts to negotiate a separate "project agreement" with the unions soon after termination of the 1983-86 MLA. Nothing in the record indicates action by Blake taken pursuant to the 1986-89 MLA--at least, none distinguishable from action taken pursuant to the 1983-86 MLA to maintain the status quo on subjects of mandatory bargaining.

V

Blake states that it "intends to request costs and attorneys' fees incurred in ... this appeal ... pursuant to ERISA Sec. 502(g) (1), 29 U.S.C. § 1132(g) (1)."⁶  The district court denied a similar request for fees, on the grounds that Local 89 brought its case in good faith.

Blake has met the requirement of circuit rule 39-1.6 by stating the authority under which the request is made. Local 89 responds that this is not an ERISA case, and that attorneys' fees thus may not be awarded under 29 U.S.C. § 1132(g) (1). Suit was brought under ERISA, 29 U.S.C. § 1132, as well as under section 301, 29 U.S.C. § 185. The case remains an ERISA action. Although Local 89 does not urge ERISA-based grounds on appeal, the appeal attempts to collect contributions allegedly due under ERISA.

Attorneys' fees for an appeal may be awarded under ERISA. See Operating Engineers Pension Trust v. Cecil Backhoe Service, Inc., 795 F.2d 1501, 1508 (9th Cir. 1986). Fees may be awarded to an employer who successfully defends against a claim. Sapper v. Lenco Blade, Inc., 704 F.2d 1069, 1073 (9th Cir. 1983). Our list of relevant factors is a lengthy one. In ruling on a request for attorneys' fees under ERISA, we must consider five factors in addition to the twelve factors provided in Kerr v. Screen Extras Guild, Inc., 526 F.2d 67, 70 (9th Cir. 1975), cert. denied, 425 U.S. 951 (1976). Sapper, 704 F.2d at 1073; see also Smith v. CMTA-IAM Pension Trust, 746 F.2d 587, 589-91 (9th Cir. 1984). Of these seventeen factors, the two most pertinent here are the degree of bad faith and the relative merit of the parties' positions. Local 89's position can be reasonably supported by section 6 of the MLA. Its position is not frivolous, and there is no evidence of bad faith. We do not award fees to Blake.

AFFIRMED.