By John M. (Jack) Collins, General Counsel, Massachusetts Chiefs of Police Association, Grafton, Massachusetts
ven if a collective bargaining agreement has expired, this “does not mean there can be no duty to arbitrate issues arising out of that agreement.” 1 Rights that were violated or that accrued or vested under the agreement will, as a general rule, survive termination of the agreement.
Where a contract clearly provides that all or certain specified disputed matters arising out of or in connection with the agreement shall be submitted to arbitration, there can rarely be any question of the right of the parties to resort to this means of adjusting differences, provided the arbitration procedure is invoked prior to the expiration date of the contract. If the contract provides a definite period of time independent of the contract’s expiration date, within which arbitration must be commenced, the procedure must be begun before the time limit expires. Arbitration procedures initiated before the contract expired can be continued to a conclusion, even though the final award was not made until after the contract’s expiration.
In the leading case of Litton Financial Printing Division, a Div. of Litton Business Systems, Inc., v. National Labor Relations Board et al., the U.S. Supreme Court ruled that even though there is a rebuttable contract-interpretation presumption that the duty to arbitrate disputes arising under a collective bargaining agreement outlasts the date of expiration, and even though a particular such agreement contained both an unlimited arbitration clause and a layoff-seniority clause, an employer is not required by the agreement to arbitrate a union’s grievances as to the application of the layoff-seniority clause to particular layoffs that took place almost one year after the agreement had expired, because the grievances do not involve rights that accrued or vested under the agreement or rights that carried over after expiration of the agreement as continuing obligations of the agreement rather than as legally imposed terms and conditions of employment. Consider the following:
- Under the layoff-seniority clause (in case of layoffs, length of continuous service would be the determining factor if other things such as aptitude and ability were equal), only where the other factors such as aptitude and ability were equal would the employer be required to look to seniority.
- Any arbitration proceeding would of necessity focus upon whether aptitude and ability, and any unenumerated other factors, were equal long after the date that the agreement had expired, as of the date of the layoff decision and in light of the employer’s decision to close down one operation at a plant.
- Such factors as aptitude and ability are not constant, but change over time and cannot be said to vest or accrue as a form of deferred compensation.
- No intent can be inferred on the part of the contracting parties to freeze any particular order of layoff or to vest any contractual right under the agreement.2
As the U.S. Supreme Court explained in the 1960 case of United Steelworkers of America v. Warrior and Gulf Navigation Co., under certain circumstances the grievance provisions of an expired contract may survive. When the parties have agreed to a grievance and arbitration procedure, their obligations under the arbitration clause survive contract termination when the dispute is over an obligation arguably created by the expired agreement and arises under that agreement.3
Where the dispute is over a provision of the expired agreement, the presumption favoring arbitrability must be negated expressly or by clear implication. One way to negate the presumption is by specifying in the contract that the obligation to participate in the grievance process extends only for the life of the agreement. The presumption also diminishes over time and grievances filed six months after a contract expired were found to be too remote.
Filed during Contract Term
Unless a contract specifically provides otherwise, which is not likely to be the case, those grievances that were properly filed during the life of a contract should proceed under the applicable grievance procedure to arbitration. The confusion will focus on grievances filed after the contract has expired. In some cases, such grievances will be arbitrable. In other cases, grievances concerning events that took place after a contract expired may not need to be arbitrated, especially where the rights allegedly violated had not become vested while the contract was in effect. However, the analysis is not as simple as looking at the timing of the events giving rise to the dispute. It is possible that a dispute may be grievable even though the event that is the subject of the complaint actually occurred after a contract expired, especially where it relates to events that took place during the life of the agreement.
In 1977, the U.S. Supreme Court, in the case of Nolde Brothers, Inc., v. Local No. 358, Bakery and Confectionery Workers Union, AFL-CIO, ruled that grievances that arise during the life of a collective bargaining agreement and are arbitrable under that agreement do not become nonarbitrable simply because the contract terminated before arbitration was requested or commenced. In addition, the court held that a grievance will be arbitrable even though it arose after the termination of the collective bargaining agreement so long as the grievance was based on a right that arguably had accrued or had become vested under the agreement prior to its termination.
The collective bargaining agreement in Nolde had a clause that required the payment of severance pay to all employees with three or more years of service. Negotiations for a new contract continued beyond the expiration date and the union gave notice of its intention to cancel the contract, presumably so its members could strike. Negotiations continued for several days after the termination became effective. Finally, however, when faced with the threat of a strike, the employer decided to permanently close the plant, effective immediately. After paying accrued wages and vacation pay, the employer refused to either pay or arbitrate the union’s claim for severance pay. The employer explained that its obligation to arbitrate such dispute ended when the contract was terminated.
In Nolde, there was general agreement that the severance-pay grievance would have been arbitrable under the broad all grievances clause if it had arisen during the life of the collective bargaining agreement. However, since the union filed the grievance after it terminated the contract, there was a dispute over the arbitrability of such grievance. The union argued that the severance benefits had accrued or had become vested during the term of the agreement, even though they were payable only when employment was terminated. The court held that the grievance was arbitrable even though it arose from an event, in this case a plant closure, that occurred after the union terminated the agreement. The court pointed out that the underlying dispute, “although arising after (italics in the original) the expiration of the collective bargaining contract, clearly arises under (italics in the original) that contract.”4
The U.S. Supreme Court’s decision covered only the issue of arbitrability of the dispute. The court noted strong policy reasons for holding the dispute arbitrable. It also explained that “where the dispute is over a provision of the expired agreement, the presumptions favoring arbitrability must be negated expressly or by clear implication.”5
In this case the parties each raised arguments concerning differing interpretations of a certain contract clause. Obviously, if the dispute over the clause had arisen when the contract was in effect, there would be no doubt of its arbitrability. The court rejected the employer’s argument that the duty to arbitrate is automatically extinguished upon a contract’s termination. Pushed to its natural conclusion, this proposition might mean that even grievances started when a contract was in effect would be stopped upon expiration, and that was clearly against the strong public policy that favors arbitration for the settlement of labor disputes.
For many years following Nolde, lower courts and even the National Labor Relations Board adopted varying interpretations of the U.S. Supreme Court’s ruling. In 1991, the court issued its decision in the case of Litton Financial Printing Division, a Div. of Litton Business Systems, Inc., v. National Labor Relations Board et al. in an effort to resolve some of these issues. Agreeing with the board’s narrow interpretation of Nolde, the court held that post-expiration arbitration is strictly limited to disputes arising under the contract. As the court explained, where the dispute involves events that occurred before expiration, or where post-expiration conduct “infringes a right that accrued or vested under the agreement,” or where the right survives the contract’s expiration, the matter will be arbitrable as arising under the contract.6
Where a collective bargaining agreement contains an arbitration clause, there is a presumption of arbitrability—an order to arbitrate a particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of interpretation that covers the asserted the dispute. Doubts should be resolved in favor of the arbitration clause’s coverage, particularly where the clause, which is included in the collective bargaining agreement, is broad.
When an arbitration provision of a collective bargaining agreement being interpreted involves expiring contracts and changes in union representation, courts carefully consider statutory context in which agreements are negotiated.
Chiefs should carefully review the scope of the grievance and arbitration clauses in their collective bargaining agreements. It is possible to address the arbitrability of grievances following the expiration of a collective bargaining agreement by inserting narrow language in the contract specifically limiting grievances to the life of a contract or otherwise limiting the authority of an arbitrator to rule on matters following the expiration of a collective bargaining agreement. ■
1International Association of Machinists and Aerospace Workers, AFL-CIO v. Massachusetts Bay Transportation Authority, 389 Mass. 819, 821 (1983).
2Litton Financial Printing Division, a Division of Litton Business Systems, Inc., v. National Labor Relations Board et al., 501 U.S. 190 (1991).
3United Steelworkers of America v. Warrior and Gulf Navigation Co., 363 U.S. 574 (1960).
4Nolde Brothers, Inc., v. Local No. 358, Bakery and Confectionery Workers Union, AFL-CIO, 430 U.S. 243, 249 (1977).
5Id. at 255.
6Litton, 501 U.S. at 206, citing Nolde.
Please cite as:
John M. (Jack) Collins, "Arbitration under an Expired Contract," Chief's Counsel, The Police Chief 78 (April 2011): 12–13.