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Merk v. Jewel Food Stores

United States Court of Appeals for the Seventh Circuit

945 F.2d 889 (1991)

Facts

A new employee-ratified, collective-bargaining agreement between Jewel Food Stores (Jewel) (defendant) and its employees’ union guaranteed the employees a minimum wage. However, when discount chain Cub Foods entered Jewel’s Chicago-area market, Jewel slashed wages and took other actions that forced Kelly Merk and many other employees (ex-employees) (plaintiffs) to leave the company. Arguably, Jewel’s cost-cutting response to competition was permissible under a secret side deal struck late in the contract negotiations, when it became clear to both Jewel and the union that stiff competition was on the horizon. The side deal was omitted from the contract’s text. Compulsory binding arbitration eventually forced Jewel to restore wages for its active employees, but the arbitration award did nothing to help Jewel’s ex-employees. The ex-employees sued Jewel. Because it was clear that neither Jewel nor the union regarded the written, ratified contract to be the sole and integrated expression of their agreement, the federal district court admitted parol evidence of the secret side deal into evidence. The trial jury returned its verdict for Jewel, and the ex-employees appealed to the Seventh Circuit.

Rule of Law

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Issue

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Holding and Reasoning (Cudahy, J.)

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Dissent (Easterbrook, J.)

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