Bargaining Tips: How to Be Sure an Obligation Terminates With the Collective Bargaining Agreement

Generally, when a collective bargaining agreement expires, the employer must continue paying the same wages and benefits—and continue most other terms and conditions of employment—until the parties reach a new agreement or an impasse in negotiations. In short, the contract may have expired, but the obligation does not. This rule is an outgrowth of the rule that an employer's unilateral change in a term or condition of employment violates the statutory obligation to bargain in good faith.

If the employer wishes for a contractual obligation to cease with the contract, the contract must contain language that "clearly and unmistakably" waives the union's right to bargain about the matter upon expiration of the contract. In Local Joint Executive Board of Las Vegas v. NLRB, No. 07-73979, Aug. 27, 2008, the Ninth Circuit clarified the contractual language necessary for such a "clear and unmistakable" waiver.

Case History

In Executive Board of Las Vegas, the collective bargaining agreement stated that the dues-checkoff provision would "be continued in effect for the term of this Agreement." The agreement expired, and the employer continued abiding by the dues-checkoff provision for more than a year—but then ceased doing so without bargaining to impasse on the issue. The union argued that the employer's unilateral termination of dues-checkoff without bargaining to impasse constituted an unfair labor practice in violation of sections 8(a)(1) and 8(a)(5) of the National Labor Relations Act (NLRA).

The employer argued that, although Nevada is a right-to-work state in which union-security clauses are unlawful, the National Labor Relations Board ("Board") should nevertheless follow an exception to the unilateral change doctrine that allows an employer to unilaterally terminate union-security and dues-checkoff clauses in non-right-to-work states, upon contract expiration. Thus, the employer argued that it was privileged to terminate the dues-checkoff provision.

The Board essentially agreed, holding that the unilateral termination of dues-checkoff did not constitute an unfair labor practice because dues-checkoff is not subject to the unilateral change prohibition established in NLRB v. Katz, 369 U.S. 736 (1962).

The Ninth Circuit vacated the Board's decision, unable to discern its rationale for excluding dues-checkoff from the unilateral change doctrine in the absence of a union-security provision. The Ninth Circuit remanded to the Board to articulate a reasoned explanation for the rule or to adopt a different rule.

On remand, the Board reaffirmed its earlier decision, but on different grounds: this time, the Board reasoned that the collective bargaining agreement contained explicit language limiting the employer's dues-checkoff obligations to the duration of the agreement. The Board based its decision on language in the dues-checkoff provision stating that the obligation to withhold and remit dues to the union would "be continued in effect for the term of this Agreement." The Board, therefore, concluded that the union had "explicitly waived any right to the continuation of dues-checkoff as a term and condition of employment after expiration of the collective bargaining agreement."

The Ninth Circuit's Decision

The Ninth Circuit again vacated and remanded, holding that the contractual language did not provide a clear and unmistakable waiver of the right to bargain. The opinion reiterated the Supreme Court's rule from Katz: an employer violates sections 8(a)(1) and 8(a)(5) by making a unilateral change in a term or condition of employment without first bargaining to impasse over the relevant term. While a union can contractually waive its right to bargain over these changes, the standard for waiver is very high: the burden is on the employer to show that the union's waiver was "explicitly stated, clear, and unmistakable." Equivocal or ambiguous language in the agreement is not enough. Testimony detailing the bargaining history and showing that termination upon expiration was "fully discussed" during negotiations is relevant, if available.

In applying this rule, the Ninth Circuit determined that no such clear and unmistakable waiver had occurred. The court noted that there was no bargaining history evidence available and that, therefore, the court was limited to the language in the agreement. The Board has consistently distinguished between language that states that a provision applies only "during" the contract term and language that states that the provision will "terminate" at the end of the term. The Board has always held that only the "terminate" language is sufficient to create a clear and unmistakable waiver.

Although the employer argued that the parties' intent that the dues-checkoff benefit would end at contract expiration was clear, the Ninth Circuit disagreed. The wording simply indicated that the benefit would continue throughout the life of the contract but did not explicitly state what would happen after expiration. Therefore, the union did not clearly and unmistakably waive its claim to protection from unilateral change following expiration of the agreements. On these grounds, the Ninth Circuit vacated the Board's decision. (It did remand the case to the Board to resolve a more fundamental issue: whether dues-checkoff in right-to-work states—where employees need not join the union at all—is a term and condition of employment and therefore a mandatory subject of bargaining.)

Lessons for the Employer

Executive Board of Las Vegas chastens the Board to follow earlier precedent forbidding unilateral discontinuation of a term or condition of employment merely because a contract has expired. Instead, the contract must contain language clearly stating that the particular employer obligation "terminates" when the contract ends. An employer should not rely on general "durational" language, even if the language is contained in the very article that creates the obligation that the employer wishes to terminate. Nor should the employer rely on language in the general "Duration" or "Term" Article that states that all obligations under this contract "terminate" upon expiration. Rather, if the employer wishes a particular obligation to cease when the contract expires, the particular article that creates that obligation must clearly state that the obligation terminates when the contract expires. Moreover, bargaining history should not cause any ambiguity.