Friday, 21 February 2014

Gurumurthy Kalyanaram on Interpretation of Collective Bargaining Agreement (CBA)

There are many lawsuit arising out of disputes in interpretation of the collectively bargained agreements.  Unions and employers work hard to craft CBAs, but lawsuits emerge even in cases of carefully designed CBAs.  In this essay, Gurumurthy Kalyanaram reports on this important matter.

Gurumurthy Kalyanaram Lawsuit

U.S. Supreme Court and Second Circuit have established precedents which mandate that (i) the provisions of a Collective Bargaining Agreement must be read as a whole in conjunction with other provisions; and (ii) the provisions of a Collective Bargaining Agreement must be interpreted in a manner that does not render any provision superfluous, meaningless, or of no effect.

Supreme Court Decisions 

In Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 279 (1956), the Supreme Court held that collective bargaining agreements should generally be interpreted according to established contract interpretation principles, including the principles that, “Like other contracts, [a collective bargaining agreement] must be read as a whole.”

Applying a similar principle, in Sandifer v. United States Steel Corp., Case No. 12-417, at 6, 10-11 (Jan. 27, 2014), the Court recently reiterated that the language of labor statute provisions must likewise be interpreted based upon their ordinary plain meaning in order to give effect to them effect.
Second Circuit Decisions

          The Second Circuit has likewise reiterated that Collective Bargaining Agreements must read as a whole and in a manner that does not render any provision of no effect.  United Steel, Paper and Forestry, Rubber, Manufacturing, Energy, Allied Industrial and Service Workers International Union v. Cookson America, Inc., 710 F.3d 470, 473 (2d Cir. 2013) (Walker, Katzman, Preska) (“courts should attempt to read CBAs in such a way that no language is rendered superfluous”); Marcic v. Reinauer Transportation Companies, 397 F.3d 120, 131 (2d Cir. 2005) (collective bargaining agreement provisions must be interpreted as a whole, in context and not in isolation, and in a manner that that avoids rendering any language superfluous); Aeronautical Industrial District Lodge 91 of the International Association of Machinists and Aerospace Workers v. United Technologies Corp., 230 F.3d 569, 576 (2000) (“traditional rules of contract interpretation apply as long as they are consistent with federal labor policies”); Interstate Brands Corp. v. Bakery Drivers & Bakery Goods Vending Machines, Local Union No. 550, 167 F.3d 764, 768 (2d Cir. 1999) (interpretation that gives a reasonable and effective meaning to all the terms of a contract is generally preferred to one that leaves a part unreasonable or of no effect); United States v. International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers of America v. Boffa, 970 F.2d 1132, 1136 (2d Cir. 1992) (“We must avoid an interpretation of an agreement that renders one of its provisions superfluous”).

See generally 20 Williston on Contracts § 55:20 (4th ed.) (outlining applicable rules of interpretation for collective bargaining agreements).   Applying these principles, the Court in Prescott v. Northlake Christian School, 369 F.3d 491, 497 (5th Cir. 2004), held that, where the agreement contained a provision which stated that “no party waives appeal rights, if any, by signing this arbitration agreement”, the court could not ignore such language as mere surplusage.  And in Gateway Technologies, Inc. v. MCI Telecommunications Corp., 64 F.3d 993, 995, 997 (5th Cir. 1995), the court held that, where a Collective Bargaining Agreement provided that errors of law “shall be subject to appeal”, the court cannot ignore this language nor interpret it in a manner that renders it meaningless.

Accordingly, we have 50 years of precedent to assess the viability of the lawsuits and claims born out of disputes in CBA interpretation.

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