Golden Donuts, Inc. v NLRC, et. al.

G.R. No.: 112666-68 January 19, 2000

Facts: 
 Petitioner and the Kapisanan ng Manggagawa sa Dunkin Donut-CFW (KMDD-
CFW) agreed to meet to finish their negotiation for a CBA.
 On the scheduled date, representatives of management arrived late, prompting
union officers to walk out and thereafter refused, for several times, to meet again
with management.
 Despite management’s open letter of admonition, the union staged a strike.
 Counsel for management pleaded for a compromise, hence, a compromise
agreement was entered into with the union, whereby they agreed, among others,
that they shall withdraw any case filed against each other and shall not file any
case upon the execution of the agreement as it constitutes a general waiver or
release by them.
 In virtue of such agreement, 262 strikers shall be paid their separation
pay.
 The five disagreed and did not receive the amount due, arguing that the
agreement was entered into by their counsel and the union president without
their individual consent and that the same was not approved by the majority of
the union membership, hence, this petition.

Labor Arbiter: Denied.

NLRC: Modified Labor Arbiter’s decision—reinstatement with backwages

Issue: 
(1) W/N a union may compromise or waive the rights to security of tenure and
money claims of its minority members without the latter’s consent; – (NO)

(2) W/N the compromise agreement which has not been consented to or
ratified by respondents minority members has the effect of res judicata upon
them. – (NO)

Ruling: 

 Even if a clear majority of the union members agreed to a settlement with

the employer, the union has no authority to compromise the individual
claims of members who did not consent to such settlement.
 Rule 138, Sec. 23 of the 1964 Revised Rules of Court requires a special authority
before an attorney may compromise his client’s litigation.
 Authority to compromise cannot be lightly presumed and should be duly
established by evidence.
 In the case at bar, as private respondents did not authorize the union to
represent them in the compromise settlement, they are not bound by the terms
thereof. There is no valid waiver of rights.
 Money claims due to laborers cannot be the object of settlement effected
by a union or counsel without specific individual consent of each laborer
concerned.
 Private respondents were not parties to the compromise agreement; hence,
judgment approving such agreement cannot have the effect of res judicata upon
them.
 They have not waived their right to security of tenure and they are not barred
from entitlement of their individual claims.

Since the Labor Arbiter found no evidence showing illegal acts during the strike, the
five employees shall be reinstated with backwages.