A union representing some Nordstrom Inc. employees settled a 17-month contract dispute last week dropping its insistence that all sales employees and office workers covered by the contract belong to the union.

About 1,700 employees in six Seattle-area stores have worked without a contract since their last pact expired July 31, 1989.The old contract required union-covered employees to belong to United Food and Commercial Workers Union Local 1001. Negotiations foundered after the apparel retailer refused to accept renewal of that provision in a new pact.

Union lawyer James Webster said Local 1001 leaders decided to accept the Nordstrom offer proposed 18 months ago so they could turn more of their resources to litigation issues.

"There's no question that the things which were inadequate back in July 1989 remain inadequate," Webster said. "The question is what is best for membership when they are so many things on the agenda and so much to do."

Last winter the union filed suit seeking more than $300 million in back pay for Nordstrom employees nationwide.

A separate but similar union complaint resulted in a state Department of Labor and Industries ruling in February that Nordstrom failed to pay some workers for attending company meetings, writing thank-you notes to customers, making deliveries and performing other functions on their own time.

Settling the contract helps keep the labor issues from getting muddled, Webster said.

"We wanted to lay to rest Nordstrom accusations that back pay claims are simply a smoke screen to get a new contract," Webster said. "That has never been true. The issues are entirely independent of one another."

The contract's pay increases, ranging from 4 to 8 percent depending on job classification, were implemented by the company in early 1990. But employees could not pursue job grievances while they worked without a contract, Webster said. The adopted contract expires in July 1991.

Company spokesmen said they were surprised by the acceptance of an offer made a year and a half ago but pleased that union membership is now an option instead of a requirement.

"We're gratified on our employees' behalf," Nordstrom spokesman Tim Doke said. "The union finally acknowledged that freedom of choice is a valid concept and our employees will finally have the option."

Anti-union employees also applauded the settlement.

"This is what we wanted from the very beginning, 17 months ago," said Nordstrom employee John Rockwood. "We never thought it was fair that people were forced to join a union that they didn't believe in and didn't want to belong to. It's a great victory for us. We're very happy."

Webster said union leaders made the decision partly at the urging of union members. A vote by union members was not needed to accept the contract, the lawyer said.

The UFCW staged rallies in front of Nordstrom stores in several cities earlier this month to protest alleged labor abuses including off-the-clock work, discrimination against workers over the age of 40, pregnant women and blacks, and seeking to limit information to employees and the news media about its treatment of workers.

Nordstrom spokesman Doke earlier termed those allegations "nonsense."

Nordstrom employs more than 30,000 people at 62 stores in Washington, Oregon, Utah, California, Virginia, Alaska and New Jersey.