December 14, 2007
ROBERT P. WITKOWSKI, PLAINTIFF-APPELLANT,
NEW JERSEY EMPLOYEES LABOR UNION LOCAL #1; NEW JERSEY EMPLOYEES LABOR UNION LOCAL 1N, DEFENDANTS, AND OFFICE & PROFESSIONAL EMPLOYEES INTERNATIONAL UNION LOCAL #32, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L-4560-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 4, 2007
Before Judges Skillman and Winkelstein.
Plaintiff, Robert Witkowski, appeals from an October 6, 2006 summary judgment dismissing his complaint. We affirm.
Plaintiff was employed as a business manager by the New Jersey Employees Labor Union (Local 1) under a written employment contract. Local 1 was experiencing financial difficulties in 2004, and entered into an affiliation agreement with the Office and Professional Employees Labor Union (Local 32). The agreement provided that Local 1 would dissolve and assist Local 32 in attempting to represent Local 1's membership.
Pursuant to the terms of the affiliation agreement, Local 1 would preserve its treasury for "paying money it owes to its service providers, i.e., its attorney and its accountant." During the preservation period, "Local 1 [would] continue to pay its normal rent and office expenses and the current level salary of Robert Witkowski and of the additional staff person it currently employs." The preservation period was to last from the date of the affiliation agreement until the formal dissolution of Local 1, which was to dissolve when notified by Local 32 to do so, but no later than December 31, 2004.
Plaintiff claims that the business manager and Secretary of Local 32, Steve Tully, assured him that Local 32 would fully assume his Local 1 employment contract, which was due to expire on December 31, 2008. Plaintiff also claims that the affiliation agreement called for Local 32 to assume all of the debts and obligations of Local 1, including his employment contract.
Following the agreement between Local 1 and Local 32, plaintiff worked for both unions. He was paid as a part-time employee of Local 32. On October 20, 2004, in a letter signed by Tully, Local 32 fired plaintiff.
Meanwhile, the United Service Workers, Local 1's parent organization, had challenged the validity of the affiliation agreement. The challenge went to arbitration and on December 3, 2004, the arbitrator found that the affiliation agreement was void.
Defendant sued Local 1 and Local 32, seeking damages. He claimed he had an oral employment contract with Local 32; that Local 32 was a successor entity to Local 1; and that he was a third-party beneficiary of the affiliation agreement.
Local 1 defaulted. Local 32 moved for summary judgment. Following argument, the court granted the motion. On appeal to this court, plaintiff argues that genuine issues of material fact remain disputed concerning whether he was contractually employed by Local 32; whether Local 32 was a successor entity to Local 1; and whether he was a third-party beneficiary of the affiliation agreement. We reject these arguments.
We begin by examining plaintiff's claim that he had a binding oral employment contract with Local 32 as a result of representations Tully made to him. A binding employment contract may be based upon "[o]ral promises, representations, employee manuals, or the conduct of the parties, depending on the surrounding circumstances." Troy v. Rutgers, 168 N.J. 354, 365 (2001). The existence of an oral employment contract depends on the "'[t]he intent of the parties [that] may be ascertained from the language employed, from all attending circumstances, and from the presence or absence of the giving by the employee of consideration additional to the services incident to his employment.'" Id. at 368 (quoting Shiddell v. Electro Rust-Proofing Corp., 34 N.J. Super. 278, 289 (App. Div. 1954), certif. denied, 17 N.J. 408 (1955)).
Here, whether Tully made an oral promise of employment to plaintiff is not the critical issue. Assuming he did, plaintiff is still unable to survive summary judgment because he has failed to present evidence that Tully had authority to act for Local 32 and bind it to an employment contract with plaintiff.
"Actual authority (express or implied) may 'be created by written or spoken words or other conduct of the principal which, reasonably interpreted, causes the agent to believe that the principal desires him so to act on the principal's account.'"
Jennings v. Reed, 381 N.J. Super. 217, 231 (App. Div. 2005) (quoting Restatement (Second) of Agency § 26 (1958)). Plaintiff has presented no evidence that Tully had the actual authority to bind Local 32 to an employment contract with him. Thus, any claim plaintiff may have must be based on Tully's apparent authority.
The actions of an agent are binding on a principal "when the agent is vested with apparent authority which the principal knowingly permits the agent to assume, or which the principal holds the agent out to the public as possessing." Tannenbaum & Milask, Inc. v. Mazzola, 309 N.J. Super. 88, 94 (App. Div. 1998).
The question in every case depending upon the apparent authority of the agent is whether the principal has by his voluntary act placed the agent in such a situation that a person of ordinary prudence, conversant with business usages and the nature of the particular business, is justified in presuming that such agent has authority to perform the particular act in question.
[Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 497 (App. Div.) (internal citation omitted), certif. denied, 177 N.J. 224 (2003).]
Liability is imposed on the principal when the actions of the principal, not the agent, mislead the third party into believing that the agent has authority to act on behalf of the principal.
Ibid. The burden is on the plaintiff to prove the agent's apparent authority. Id. at 500.
Here, plaintiff has not met this burden. He presented no evidence to support his allegation that Tully had the apparent authority to bind Local 32. Plaintiff's affidavit states merely that "Tully[, Local 32's business administrator and treasurer,] assured me I would be retained and that my contract would be honored by Local  32." This is a representation of an agent, not a principal.
We next turn to plaintiff's allegation that Local 32 was a successor entity to Local 1. That argument too is without merit. Assuming, but not concluding, that under certain circumstances Local 32 could have been considered a successor entity to Local 1, under the facts here, no such conclusion may be drawn. The arbitration award voided the affiliation agreement between Local 1 and Local 32; we consequently treat the contract as if it never existed. See Fineman v. Armstrong World Indus., 774 F. Supp. 225, 242-43 (D.N.J. 1991) (New Jersey courts will not enforce void contract); In re Baby M, 109 N.J. 396, 444 (1998) (where surrogacy contract found void, court proceeds as if contract did not exist); 1 Williston on Contracts §20 (Fourth ed. 2007). In the absence of the affiliation agreement, plaintiff is unable to demonstrate that Local 32 either expressly or impliedly assumed the liability of Local 1.
It is also notable that the arbitrator's award not only voided all contracts between Locals 1 and 32, but ordered Local 1 to transfer a substantial percentage of its bargaining rights directly to a newly formed local, Local 1N. If, for purposes of argument, any entity could be taken to be the successor to Local 1, it would be Local 1N, not Local 32.
Finally, plaintiff claims that the court erred by ruling that the facts could not support his claim as a third-party beneficiary of the affiliation agreement. That claim is totally without merit and requires little discussion. R. 2:11-3(e)(1)(E). We note only that the arbitrator's ruling voiding the affiliation agreement prevented any rights plaintiff may have had in that agreement from ripening.
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