Law360 spoke to labor and employment partner Matthew Fontana and associate Daniel Dorson about the Third Circuit’s strike down of decades-old precedent allowing “implied” provisions to outlive an employment contract’s expiration.
Fontana noted that the ruling brought the Third Circuit in line with others that had done away with implied labor contracts and brought the interpretation of labor contracts more in line with all other regular contracts. “It’s significant for employers because you have to be thinking about collective bargaining agreements (CBAs) strategically, whether provisions of a contract ought to survive the termination of that contract. Arbitration and grievance procedures are high on that list.”
Fontana and Dorson explained that with the ruling, a post-contract grievance arbitration’s potential extension would become part of the bargaining process, along with whether to extend other provisions, including benefits, dues or no-strike agreements. “You have more options, more flexibility,” said Dorson.
“The trend in law before [M&G Polymers USA LLC v. Tackett] was to give special treatment to CBAs — almost a presumption that benefits would last for life,” Fontana said. “What the Supreme Court in Polymers did was say, ‘A contract is a contract.’ My expectation would be that the other circuits will continue to apply ordinary contract principles to these disputes.”
“An employer may want the arbitration and grievance provision to continue because they provide stability to the workplace,” Fontana added. “It creates more options for the employer and the union to talk about. If you want something to continue, you’re going to express it clearly. All labor counsel now will pay attention to the impact of the expiration date.”