AUDIT SERVICES INC v ELMO ROAD

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No. 13749 I N THE SUPREME COURT O THE STATE O M N A A F F O T N 1978 . AUDIT SERVICES I I N C I a Montana c o r p o r a t i o n , P l a i n t i f f and A p p e l l a n t , E M ROAD CORPORATION, L O a corporation, D e f e n d a n t and R e s p o n d e n t . Appeal from : D i s t r i c t Court d t h e Fourth J u d i c i a l D i s t r i c t , H o n o r a b l e J a c k L. Green, Judge p r e s i d i n g . C o u n s e l o f Record: For Appellant: George, W i l l i a m s a n d Benn, M i s s o u l a , Montana R i c hard Ranney a r p u e d , M i s s o u l a , Montana For Respondent: P o o r e , PIcKenzie, Roth, R o b i s c h o n and R o b i n s o n , B u t t e , Montana David Wing a r g u e d , B u t t e , Montana F o r Amicus C u r i a e : ; , ;<=.,. H i l l e y and L o r i n g , Great F a l l s , Nontana E m i l i e Loring a r g u e d , G r e a t F a l l s , Montana M c K i t t r i c k and D u f f y , G r e a t F a l l s , Plontana D . P a t r i c k M c K i t t r i c k a r c p e d , G r e a t F a l l s , FIontana S u b m i t t e d : J a n u a r y 31, 1978 Decided : FEB Filed: FEB 2 2 1E 9 2 2 1n 9 M r . J u s t i c e Frank I. Haswell d e l i v e r e d t h e Opinion of t h e Court: A c o l l e c t i o n agency, on t h e behalf of t h r e e union t r u s t funds, sued a corporation f o r an accounting and judgment f o r a l l sums owing pursuant t o c e r t a i n c o l l e c t i v e bargaining agreements and d e c l a r a t i o n s of t r u s t . Following a nonjury t r i a l , t h e D i s t r i c t Court, Lake County, denied r e l i e f t o t h e c o l l e c t i o n agency. The c o l l e c t i o n agency appeals. P l a i n t i f f Audit S e r v i c e s , Inc. i s a c o l l e c t i o n agency f o r t h r e e union t r u s t funds. The t r u s t funds a r e : Laborer's A.G.C., Health and Welfare, Pension and Training; Operating Engineers T r u s t of Montana, Health and Welfare, Pension, Apprenticeship and Vacation; ~ e a m s t e r ' sT r u s t of Montana, Health and Welfare. P l a i n t i f f i s attempting t o r e q u i r e defendant Elmo Road Corporation t o s a t i s f y i t s o b l i g a t i o n s under c o l l e c t i v e bargaining compliance agreements t o make c o n t r i b u t i o n s t o t h e s e t r u s t funds. During t h e s p r i n g 1972, r e p r e s e n t a t i v e s of t h e Operating Engineers, Teamsters and Laborers Unions contacted t h e Elmo Road Corporation and requested t h a t i t become a p a r t i c i p a n t i n t h e t r u s t s involved. The union r e p r e s e n t a t i v e s t a l k e d t o Roy Winslow, t h e g e n e r a l manager of t h e defendant corporation. Winslow duly executed c o l l e c t i v e bargaining compliance agreements w i t h t h e union r e p r e s e n t a t i v e s . The compliance agreements provide t h a t defendant agrees t o be bound by the e x i s t i n g c o l l e c t i v e bargaining agreement i n e f f e c t between t h e union and t h e employer's a s s o c i a t i o n , t h a t defendant agrees t o comply with t h e various a r t i c l e s of t r u s t which have been s e t up by c o l l e c t i v e bargaining agreement, and t h a t compliance w i l l continue u n t i l such time a s e i t h e r p a r t y n o t i f i e s t h e o t h e r i n w r i t i n g a t l e a s t s i x t y days before t h e e x p i r a t i o n of t h e then e x i s t i n g c o l l e c t i v e bargaining agreement of i t s i n t e n t i o n t o withdraw. The d e c l a r a t i o n s of t r u s t , which t h e defendant agreed t o comply with, s e t f o r t h a schedule f o r c o n t r i b u t i o n s t o t h e t r u s t funds by t h e employers bound t o t h e agreements. When t h e compliance agreements were signed, defendant was working a s a subcontractor on a Polson school job f o r S l e t t e n Construction Company. S l e t t e n Construction was a s i g n a t o r y t o c o l l e c t i v e bargaining agreements with each of t h e t h r e e unions involved here. These agreements contained c l a u s e s r e q u i r i n g t h e signatory employer t o r e q u i r e a l l of h i s subcontractors t o comply with t h e conditions of t h e agreements. From A p r i l 1972 t o October 1972, t h e period of t h e S l e t t e n Construction subcontract, defendant paid t h e required c o n t r i butions t o t h e t r u s t funds. When defendant stopped c o n t r i b u t i n g , t h e t r u s t s s e n t delinquency n o t i c e s . defendant. The t r u s t s , t h e r e f o r e , assigned t h e i r causes of a c t i o n to plaintiff. audited. N payments were made by o P r i o r t o t r i a l p l a i n t i f f had t h e records of defendant This a u d i t i n d i c a t e d an amount owing t o t h e t h r e e t r u s t funds of $31,842.53, which includes c o n t r i b u t i o n s , l i q u i d a t e d damages, i n t e r e s t and a u d i t f e e s . I n a d d i t i o n , under t h e terms of t h e t r u s t documents, a t t o r n e y f e e s a r e recoverable. Prior t o t r i a l , p l a i n t i f f incurred a t t o r n e y f e e s i n t h e amount of $1,802.02. The case was t r i e d i n t h e D i s t r i c t Court on September 29, 1976. T h e r e a f t e r judgment was rendered f o r defendant. Findings of f a c t and conclusions of law were entered on December 7 , 1976. The c o u r t found t h a t Roy Winslow d i d n o t have a u t h o r i t y t o s i g n t h e compliance agreements on behalf of Elmo Road Corporation; t h a t he did not believe the compliance agreements would bind the corporation to a long term collective bargaining agreement; that the unions had not been certified as the exclusive bargaining representatives of defendant's employees; and, that the collective bargaining agreements, which the compliance agreements purported to bind defendant, were not such contracts which were usual, proper or necessary to be made in the ordinary transaction of defendant's business. From these findings, the court concluded that Roy Winslow had no actual, implied, or ostensible authority to bind defendant to the collective bargaining agreements; that because he had no authority to bind the defendant to the agreements, the defendant has no obligation to contribute to the trust funds; and, that because the unions were not certified by the National Labor Relations Board as the exclusive bargaining representative of defendant' s employees and did not represent a majority of the employees, the compliance agreements are invalid and unenforceable. Plaintiff now appeals from this judgment. Three issues are before this Court: 1) Whether the District Court erred in finding, concluding, and decreeing that the agreements entered into between the defendant and the unions were invalid because the employer's general manager had no authority to bind the defendant to the agreements? 2 Whether the defendant by making the contributions to the ) trust funds for a period of time in 1972, ratified the collective bargaining compliance agreements? 3 Whether the District Court erred in invalidating the ) agreements between the employer and the unions which required the employer to make contributions to the trust funds on behalf of its employees? The g e n e r a l manager of a corporation can have e i t h e r a c t u a l , implied, o r o s t e n s i b l e a u t h o r i t y t o e n t e r i n t o c o n t r a c t s on behalf of t h e corporation. The g e n e r a l r u l e i s s t a t e d i n t h i s language: "Unless h i s a u t h o r i t y i s s p e c i a l l y r e s t r i c t e d , a g e n e r a l o r managing o f f i c e r o r agent may e n t e r i n t o any c o n t r a c t which i s u s u a l , proper o r necessary t o be made, i n t h e ordinary t r a n s a c t i o n of t h e company's b u s i n e s s , o r which he i s held o u t t o t h e public a s having a u t h o r i t y t o make, o r which, although beyond h i s g e n e r a l powers, he i s expressly authorized t o make; and a t h i r d person who d e a l s w i t h such manager i s n o t a f f e c t e d by s e c r e t l i m i t a t i o n s upon such a u t h o r i t y . 19 C.J.S. Corporation, §1043(f). * * *" This r u l e has been adopted i n Montana. Consolidated v. E l Campo, I n c . , E l e c t r i c a l Products (1937), 105 Mont. 386, 73 P.2d 199. I n t h i s case t h e t r i a l c o u r t concluded Winslow, a s t h e g e n e r a l manager of Elmo Road Corporation, had no a c t u a l , implied, . o r o s t e n s i b l e a u t h o r i t y t o s i g n t h e compliance agreements on behalf of t h e corporation. P l a i n t i f f contends t h e evidence does n o t support t h i s conclusion. I n reviewing t h e f i n d i n g s and judgment of t h e D i s t r i c t Court, w e w i l l n o t d i s t u r b those f i n d i n g s i f they a r e supported by s u b s t a n t i a l evidence, Johnson v. J a r r e t t , (1976), 169 Mont. 408, 548 P.2d 144; Fautsch v. Fautsch, (1975), 166 Mont. 98, 530 P.2d 1172. The evidence must be viewed i n t h e l i g h t most favorable t o t h e p r e v a i l i n g party. Luppold v.Lewis, (1977), Mont , Johnson v. J a r r e t t , supra; , 563 P.2d 538, 34 S t . Rep. Applying t h a t standard t o t h i s c a s e , t h e D i s t r i c t Court's f i n d i n g t h a t Roy Winslow had no a c t u a l a u t h o r i t y t o bind t h e c o r p o r a t i o n t o t h e compliance agreements i s supported by s u b s t a n t i a l evidence. The evidence supporting t h i s f i n d i n g i s t h a t : (1) Roy winslow's employment c o n t r a c t l i m i t e d h i s a u t h o r i t y t o a c t on behalf of the corporation; (2) t h e a u t h o r i t y of t h e g e n e r a l manager i s s e t f o r t h i n t h e by-laws and r e g u l a t i o n s of t h e corp o r a t i o n ; and ( 3 ) t h e testimony of t h e p r e s i d e n t of t h e corporat i o n , A 1 Hewankorn, a s t o t h e a u t h o r i t y of t h e g e n e r a l manager. The employment c o n t r a c t o u t l i n e d t h e g e n e r a l manager's d u t i e s t o be: (1) procurement of c o n t r a c t s , obtaining financing and necessary equipment; (2) o v e r a l l supervision of f i e l d work, o f f i c e work, and equipment maintenance; and ( 3 ) h i r i n g , f i r i n g , d i s c i p l i n i n g and a s s i g n i n g jobs t o a l l employees. The c o n t r a c t provided t h e defendant agreed t o h i r e Winslow a s i t s g e n e r a l manager i n accordance w i t h t h e a u t h o r i t y and r e s p o n s i b i l i t i e s o u t l i n e d i n i t s r e g u l a t i o n s and by-laws. The r e g u l a t i o n s and by-laws s t a t e g e n e r a l l y t h a t t h e manager w i l l c o n s u l t with t h e Board of D i r e c t o r s on a l l major q u e s t i o n s of p o l i c y and be prepared t o submit such questions t o t h e shareholders f o r f i n a l decision. I n h i s testimony A 1 Hewankorn s t a t e d t h a t Winslow had no a u t h o r i t y t o bind t h e corporation t o any c o l l e c t i v e bargaining agreement and t h e corporation considered any r e l a t i o n s h i p with a l a b o r union t o be a major question of policy t h a t would have t o be decided by t h e shareholders and n o t t h e general manager. A g e n e r a l manager can have implied a u t h o r i t y t o e n t e r c o n t r a c t s on behalf of a corporation. Implied a u t h o r i t y has been defined i n t h i s manner: "Implied a u t h o r i t y i s a form of a c t u a l a u t h o r i t y derived by i m p l i c a t i o n from t h e p r i n c i p a l ' s words o r deeds. It i s sometimes s a i d t h a t implied a u t h o r i t y i s a c t u a l a u t h o r i t y c i r c u m s t a n t i a l l y proved. I n g e n e r a l , an agent has implied a u t h o r i t y t o do those a c t s which a r e u s u a l and i n c i d e n t a l t o t h e authorized t r a n s a c t i o n and those which a r e reasonably necessary t o accomplish t h e p r i n c i p a l ' s purposes, including t h e making of whatever c o n t r a c t s a r e needed." S e l l , Agency, 540 (1975). The r u l e i n Montana on implied a u t h o r i t y has been s t a t e d a s follows : "No p r i n c i p l e of law i s more c l e a r l y s e t t l e d than t h a t an agent t o whom i s i n t r u s t e d by a corporation t h e management of i t s l o c a l a f f a i r s , whether such agent be designated a s p r e s i d e n t , general manager, o r superintendent, may bind h i s p r i n c i p a l by c o n t r a c t s which a r e necessary, proper, o r usual- t o be made i n t h e ordinary prosecution of i t s business. The f a c t t h a t he occupies, by t h e consent of t h e board of d i r e c t o r s , t h e p o s i t i o n of such an a g e n t , implies, without f u r t h e r proof, t h e a u t h o r i t y t o do anything which t h e corporation i t s e l f may do, s o long a s t h e a c t done p e r t a i n s t o t h e ordinary business of t h e company." Trent v. Sherlock, (1900), 24 Mont. 255, 263, 6 1 P. 650. *** I n t h i s c a s e , t h e D i s t r i c t Court found t h a t Roy Winslow d i d n o t have implied a u t h o r i t y t o s i g n t h e compliance agreements on behalf of Elmo Road Corporation. Specifically, the court found i n i t s f i n d i n g of f a c t X V I : "The c o l l e c t i v e bargaining agreements, t o which t h e v a r i o u s compliance o r p a r t i c i p a t i n g agreements executed by Roy Winslow purport t o bind t h e Elmo Road Corporat i o n , were n o t such c o n t r a c t s which were u s u a l , proper o r necessary t o be made i n t h e ordinary t r a n s a c t i o n of t h e Elmo Road Company' s business ." P l a i n t i f f contends t h e evidence does n o t support t h i s finding. W agree. e The evidence i n d i c a t e s Roy Winslow signed the compliance agreements t o o b t a i n t h e Polson school job subcontract from S l e t t e n Construction. He t e s t i f i e d t h a t i f he had n o t signed t h e agreements, Elmo Road Corporation would n o t have obtained the contract. A t t h e t r i a l of t h i s c a s e , i n i t s b r i e f , and i n o r a l argument, defendant admits Winslow signed t h e agreements s o t h e corporation could o b t a i n t h e subcontract. However, defendant contends the signing of the agreements was not usual, proper or necessary for Winslow to do in the ordinary transaction of defendant's business. We believe Winslow did have implied authority to sign the compliance agreements and the finding of the District Court on this issue cannot be upheld. The court found that one of Winslow's responsibilities was to procure work for the corporation. This finding is supported by the evidence. In order to procure work on the Polson school job, the evidence shows that he had to sign the compliance agreements. Thus, his signing of those agreements was proper, usual and necessary in the transaction of defendant's business. Winslow had the implied authority to sign the agreements. Plaintiff also contends Winslow had ostensible authority to sign the agreements. As stated earlier, ostensible authority is another form of authority a general manager can have to act on behalf of a corporation. 2-124, R.C.M. Ostensible authority is defined in section 1947: "Ostensible authority is such as a principal, intentionally or by want of ordinary care, causes or allows a third person to believe the agent to ' possess. 1 The District Court concluded Roy Winslow did not have ostensible authority to sign the compliance agreements. Plaintiff argues the evidence does not support this conclusion. Plaintiff's argument is that the evidence showed Winslow was, as general manager of the corporation, the official representative of defendant's company; that the restrictions on his authority were in regulations and by-laws, which were not recorded or filed nor available to be viewed by the union representatives; that A1 Hewankorn, president of Elmo Road Corporation, was on the job site when the union representatives came to get the agreements signed and he made no effort to tell the union agents they should talk to him and not Roy Winslow; that both Winslow and Hewankorn testified they knew of no facts that would have put the union representatives on notice of the restrictions in Winslow's authority; and that general managers usually sign such agreements on behalf of their companies. On the other hand, defendant argues the evidence shows that Winslow did not have ostensible authority. It again argues the agreements were signed to obtain the subcontract and this is not evidence of ostensible authority. Further, it argues that A1 Hewankorn testified the by-laws and regulations of the corporation were free to be examined by the union representatives if they chose to examine them; and Winslow testified he did not consider himself the official representative of the corporation for all purposes. This Court has previously held that ostensible authority arises from the facts of the particular case and the test is found in a determination of the exact extent to which the principal held the agent out or permitted him to hold himself out as authorized, and what a prudent person acting in good faith under the circumstances would reasonably believe the agent's authority to be. Butler Mfg. Co. v. J & L Imp. Co., (1975), 167 Mont. 519, 540 P.2d 962. Applying that standard here, we find Roy Winslow had ostensible authority to sign the compliance agreements and bind the defendant to them. He was held out to be the general manager of the corporation and the union representatives, - 9 - unaware of any restrictions in his authority, could reasonably believe Winslow had the authority to sign the agreements. In concluding as a matter of law that Roy Winslow did not have ostensible authority, the District Court made no finding of fact that he lacked such authority. The defendant, in its brief and at oral argument, states the finding which says the compliance agreements were "not such contracts which were usual, proper or necessary to be made in the ordinary transaction of Elmo Road Company's business", is a finding of a lack of ostensible authority in Winslow to execute the agreements. As pointed out earlier, this finding deals with implied authority and not ostensible authority. Implied authority and ostensible authority are not one and the same. We believe the District Court misapplied the law in concluding, as a matter of law, that Winslow did not have ostensible authority to sign the compliance agreements. Ostensible authority can be implied from the words and conduct of the parties and circumstances of the particular case notwithstanding a denial by the alleged principal. Ludwig v. Montana Bank and Trust Co., (1939), 109 Mont. 477, 98 P.2d Applying that rule to this case, we find defendant, by making Roy Winslow its general managr and authorizing him to procure work for defendant, implied to third parties that he had the ostensible authority to sign agreements such as those in question here. In discussing the effect of limitations on an agent's authority on third parties, the Restatement on Agency 2d, 4167, states: " I f a person d e a l i n g with an agent has n o t i c e t h a t t h e a g e n t ' s a u t h o r i t y i s c r e a t e d o r described i n a w r i t i n g , which i s intended f o r h i s i n s p e c t i o n , he i s a f f e c t e d by l i m i t a t i o n s upon t h e a u t h o r i t y contained i n t h e w r i t i n g , unless misled by conduct of t h e principal ." Comment b. t o 5167 s t a t e s : "* ** O r d i n a r i l y , by-laws of a corporation o r t h e records of t h e employer's business a r e n o t intended f o r t h e i n s p e c t i o n of t h i r d persons within t h e t h e meaning of t h i s Section ." Thus, under t h i s r u l e , t h e l i m i t a t i o n s on t h e g e n e r a l manager's a u t h o r i t y contained i n t h e r e g u l a t i o n s and by-laws can have no e f f e c t a s n o t i c e t o t h i r d persons dealing with t h e manager, r e g a r d l e s s of t h e i r being open f o r i n s p e c t i o n o r n o t . The l i m i t a t i o n s i n those documents cannot l i m i t t h e g e n e r a l manager's ostensible authority. Therefore, we hold Roy Winslow had both implied and o s t e n s i b l e a u t h o r i t y a s g e n e r a l manager of Elmo Road Corporation t o a c t on behalf of t h e corporation and t h e D i s t r i c t Court's conclusions t o the contrary are i n e r r o r , I n i t s second i s s u e p l a i n t i f f r a i s e d t h e i s s u e of r a t i f i c a t i o n a t t r i a l and on appeal. Defendant a t t r i a l and on appeal argues t h a t t h e d o c t r i n e of r a t i f i c a t i o n has no a p p l i c a t i o n t o t h i s case, The D i s t r i c t Court made no f i n d i n g s of f a c t o r con- c l u s i o n s of law on t h e i s s u e of r a t i f i c a t i o n . make a f i n d i n g of f a c t o r conclusion Nor d i d t h e c o u r t of law on why Elmo Road Corporation made t h e c o n t r i b u t i o n s t o t h e t r u s t funds i n 1972, o r what e f f e c t those c o n t r i b u t i o n s had regarding t h e r i g h t s and o b l i g a t i o n s of t h e p a r t i e s t o t h i s a c t i o n . The proper r e s o l u t i o n of t h e i s s u e of r a t i f i c a t i o n i s t h e r u l e s e t f o r t h i n Freeman v. Withers, (1937), 104 Mont. 166, 65 P.2d 601. There, t h i s Court s t a t e d t h a t where t h e p r i n c i p a l , with knowledge of a l l t h e m a t e r i a l f a c t s , v o l u n t a r i l y makes p a r t i a l payment on an unauthorized c o n t r a c t , t h e r e i s s t r o n g evidence of r a t i f i c a t i o n . Applying t h a t r u l e h e r e , we f i n d t h a t Elmo Road's voluntary c o n t r i b u t i o n s t o t h e t r u s t funds during t h e months of A p r i l through October, 1972, r a t i f i e d insl low's a c t of signing t h e agreements r e q u i r i n g the c o n t r i b u t i o n s . The t h i r d i s s u e , whether t h e D i s t r i c t Court e r r e d i n i n v a l i d a t i n g t h e compliance agreement, i s a d i s p u t e involving a c o l l e c t i v e bargaining agreement. are valid. P l a i n t i f f claims t h e compliance agreements Defendant claims they a r e i l l e g a l and i n v a l i d . To resolve t h i s disagreement, 5 301 of t h e Taft-Hartley Act, 29 U.S.C. 5 185(a) must be invoked. That s e c t i o n reads: " S u i t s f o r v i o l a t i o n of c o n t r a c t s between an employer and a l a b o r organization representing employees i n an industry a f f e c t i n g commerce a s defined i n t h i s c h a p t e r , o r between any such labor o r g a n i z a t i o n s , may be brought i n any d i s t r i c t c o u r t of t h e United S t a t e s having j u r i s d i c t i o n of t h e p a r t i e s , without r e s p e c t t o the amount i n controversy o r without regard t o t h e c i t i z e n s h i p of t h e p a r t i e s . I I This s e c t i o n has been construed t o mean t h a t t h e r e i s concurrent j u r i s d i c t i o n i n t h e s t a t e c o u r t s t o hear such d i s p u t e s , b u t , i n e x e r c i s i n g t h i s j u r i s d i c t i o n , s t a t e c o u r t s must apply f e d e r a l l a b c r law. Dowd Box Co. v. Courtney, (1962), 368 U.S. 7 L ed 2d 483. O'Connor, 502, 82 S.Ct. 519, Montana has recognized t h i s p r i n c i p l e . Lowe v. (1973), 163 Mont. 100, 515 P.2d 677. I n i t s findings of f a c t and conclusions of law, t h e D i s t r i c t Court held t h a t t h e compliance agreements were i n v a l i d and unenforceable by t h e union t r u s t funds. S p e c i f i c a l l y , t h e c o u r t found t h e unions were not c e r t i f i e d by the National Labor Relations Board a s t h e exclusive bargaining r e p r e s e n t a t i v e of defendant's employees; t h a t t h e unions never represented a majority of t h e employees of any bargaining u n i t of defendant's employees; and t h a t t h e unions had no a u t h o r i t y t o r e p r e s e n t t h e employees. These f i n d i n g s and conclusions were based on t h e National Labor Relations Act, 29 U.S.C. and 5 158(a) / ( b ) , which d e a l s with u n f a i r l a b o r p r a c t i c e s . The United S t a t e s Supreme Court, i n construing 29 U.S.C. and 5 158(a) / ( b ) , has held t h a t t h e determina t i o n of an u n f a i r labor p r a c t i c e i s e x c l u s i v e l y a function of t h e f e d e r a l system. San Diego Building Trades Council v. Garmon, (1959), 359 U.S. 236, 79 S.Ct. 773, 3 L ed 2d 775. Thus, although a s t a t e c o u r t has t h e a u t h o r i t y t o construe and enforce c o l l e c t i v e bargaining agreements, i t does not have t h e a u t h o r i t y t o i n v a l i d a t e a l a b o r c o n t r a c t , proper on i t s f a c e , because one of t h e p a r t i e s has a l l e g e d l y engaged i n an u n f a i r labor p r a c t i c e . I n t h i s c a s e , we hold t h e D i s t r i c t Court e r r e d i n i n v a l i d a t i n g t h e compliance agreements which were proper on t h e i r face because t h e s t a t e c o u r t s lack t h e a u t h o r i t y t o do so. A case i n p o i n t on t h i s i s s u e i s T r u s t Fund Services v. Hey- man, (1977), 88 Wash.2d 698, 565 P.2d 805. I n that case, a collec- t i o n agency was attempting t o c o l l e c t c o n t r i b u t i o n s from an employer who was o b l i g a t e d t o c o n t r i b u t e t o union t r u s t funds and had f a i l e d t o do so. The employer's defense was an a l l e g a t i o n of u n f a i r labor p r a c t i c e s on t h e p a r t of t h e union. H f u r t h e r argued e t h e i s s u e of u n f a i r l a b o r p r a c t i c e was r e s j u d i c a t a because t h e 9th c i r c u i t and t h e Federal D i s t r i c t Court had rescinded t h e c o n t r a c t between t h e employer and t h e union, when t h e employer sued t h e union i n f e d e r a l c o u r t f o r r e c i s s i o n of t h e c o n t r a c t on a claim of u n f a i r labor p r a c t i c e . The Washington Supreme Court held t h e claim of u n f a i r l a b o r p r a c t i c e was no defense t o t h e a c t i o n by t h e c o l l e c t i o n agency f o r t h e unions. F u r t h e r t h e Washington Court held t h a t i t was n o t bound by t h e d e c i s i o n of t h e f e d e r a l courts. C i t i n g San Diego Building Trades v. Garmon, supra, t h e Washington Court s t a t e d t h e National Labor Relations Board has exclusive j u r i s d i c t i o n t o determine u n f a i r l a b o r p r a c t i c e s and s t a t e c o u r t s a s w e l l a s f e d e r a l c o u r t s must d e f e r t o t h e e x c l u s i v e competence of t h e F.L.R.B. Thus, i n t h i s c a s e , t h e defendant can only r a i s e t h e question of u n f a i r labor p r a c t i c e s on t h e p a r t of t h e unions before t h e N.L.R.B. This Court cannot decide t h a t issue. Therefore, t h e judgment of t h e D i s t r i c t Court i s vacated. The cause i s remanded t o t h e D i s t r i c t Court f o r e n t r y of judgment i n accord with t h i s opinion, and f o r determination of reasonable a t t o r n e y f e e s t o be awarded t o p l a i n t i f f f o r t h e s e r v i c e s of i t s a t t o r n e y s a t t r i a l i n t h e D i s t r i c t Court. That award s h a l l be added t o our award of $1,250 a t t o r n e y f e e s f o r t h e s e r v i c e s of i t s a t t o r n e y s on appeal and both s u m s h a l l be incorporated i n t o t h e judgment . Justice W Concur: e V

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