Case name: Golden Donuts, Inc. v NLRC, et. al. G.R. No.

: 112666-68 Date: January 19, 2000 Petitioner: Golden Donuts, Inc. Respondent: NLRC et. al. Facts: Petitioner and the Kapisanan ng Manggagawa sa Dunkin Donut-CFW (KMDDCFW) 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 managements 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, Out of 267, 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 Arbiters decisionreinstatement with backwages Issue: (1) WON a union may compromise or waive the rights to security of tenure and money claims of its minority members without the latters consent; (2) WON the compromise agreement which has not been consented to or ratified by respondents minority members has the effect of res judicata upon them. 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 clients 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.