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MetroCity Manufacturing Co. employs a plant supervisor, Mr. Dela Cruz. To address wage concerns, Dela Cruz meets with the workers’ union representative, Ms. Reyes, who claims to be authorized to negotiate a temporary wage adjustment for the plant’s workers. They draft and sign a written Memorandum of Temporary Wage Adjustment stating that overtime pay will increase by 15% for the next three months, and that the memorandum binds the company. The company later refuses to implement the increase, arguing that Dela Cruz had no actual authority to bind the company and that Reyes had no express authority. The union contends that Dela Cruz had apparent authority by virtue of his position and the company’s longstanding practice of allowing such signings.
(a) Identify the controlling doctrine applicable to the facts and determine whether Dela Cruz had actual authority, apparent authority, or neither.
(b) If there is no actual authority, discuss whether the company can be bound by apparent authority or agency by estoppel, and what evidence would be required to prove either.
(c) If the company refuses to honor the memorandum, what remedy could the workers pursue under Civil Code principles to enforce the agreement or recover losses? Focus on contract remedies available to the workers.