SAY WHAT YOU MEAN, MEAN WHAT YOU SAY: THE NLRB SAYS CONTRACT LANGUAGE DOESN’T MEAN WHAT IT SAYS

“[I]f it was so, it might be; and if it were so, it would be; but as it isn’t, it ain’t. That’s logic.” – Through the Looking Glass

It is a challenge to convince a business person that unlike any other business contract, when a collective bargaining agreement (CBA) has expired, virtually all of its terms continue to be in effect.  This is because under the National Labor Relations Act (NLRA) an employer cannot unilaterally change terms and conditions of employment, regardless of whether there is a contract or not.  The NLRA mandates good faith bargaining before such changes can be made or implemented. 

There are, however, three CBA provisions that do not survive the expiration of a CBA:  the dues check-off clause, the no-strike clause, and the arbitration clause.  As a result, parties frequently turn to limiting language, particularly with regard to wages and benefits, to avoid unwanted extensions of wages, benefits or other terms of the CBA.  Parties frequently use limiting language in CBAs such as “for the term of this Agreement” or “for the duration of this Agreement” to signify that the benefit or term at issue expires with the CBA.

A hospital employer recently learned that using such limiting language is not enough after the NLRB concluded that it violated the law by not providing a wage increase after the expiration of its CBA.   In The Finley Hosp., 359 NLRB No. 9 (Sept. 28, 2012), the parties entered into a one-year agreement that included a 3% wage increase.  The CBA contained the following language:  “For the duration of this Agreement, the Hospital will adjust the pay of the Nurses on his/her anniversary date.  Such pay increases for Nurses not on probation, during the term of this Agreement, will be three (3) percent….”  Upon the expiration of the CBA, the employer announced that no pay increases would be given pending a new agreement with the union. 

In a 2-1 decision (with Member Hayes dissenting, again), the NLRB held that the employer’s discontinuation of the wage increases constituted a term and condition of employment in “specified amounts” and therefore, the employer had a duty to continue paying the 3% wage increases pending a new agreement. The NLRB concluded that the limiting language in the CBA (“for the term/duration”) did not constitute a “clear and unmistakable waiver” of the employer’s bargaining obligation, and that the agreement “must specifically address the employer’s postexpiration conduct” in order to constitute such a waiver. 

This appears to be a pretty tortured interpretation, particularly where the parties entered into a one-year agreement – which in and of itself suggests a mutual intention (along with the plain language of the CBA) to limit the wage increases to the one year duration of the CBA.  Nonetheless, the clear message, and yet another Obama Board inspired landmine for employers, is that if the employer (or the parties) do not intend for benefits or obligations to survive the expiration of a CBA, the parties need more exacting language to state the intention.  Accordingly, in addition to tying wage increases or benefit changes to specific dates, language unequivocally stating that the benefit or term at issue will not survive the expiration of the CBA, and that the employer will not have a further obligation with respect to the benefit or term after the expiration of the CBA, will be needed.

Todd Sarver focuses his practice on the representation of management in all aspects of labor and employment law. He has extensive experience representing employers in issues arising under the National Labor Relations Act, as well as in labor arbitrations, work stoppages, injunction proceedings, collective bargaining negotiations, corporate campaigns, unfair labor practice proceedings, labor litigation and bankruptcy proceedings.
 
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