Evergreen Clause Remains in Effect Despite Request to “Reopen” Agreement
A union’s request to “reopen” a collective bargaining agreement (CBA) containing an “evergreen clause” did not constitute notice to terminate the CBA, the U.S. Circuit Court for the Fourth Circuit (MD, NC, SC, VA, WV) has held. Therefore, the parties continued to be bound to the terms of the agreement beyond its expiration date.
The evergreen clause in the CBA between Wood County Telephone Company and Local 95 of the Office and Professional Employees International Union provided that the CBA “shall automatically continue in full force and effect after [its original expiration date] until terminated by sixty (60) days written notice given by either party.” The CBA was set to expire on July 5, 2003. By letter dated May 1, 2003, the union notified the company that of its “desire to reopen this Agreement and to negotiate on wages, hours and conditions of employment for a successor agreement.” The parties negotiated for a year, finally ratifying a new CBA on May 4, 2004. In March 2004, the union filed a grievance over the firing of an employee in the bargaining unit and the discipline of another. The union sought to arbitrate the grievances after attempts at resolution failed. The company refused to arbitrate, claiming that the old CBA had expired and that its arbitration provision was no longer in effect. The union then sued the company to force it to arbitrate the grievances.
The circuit court found that the union’s May 1 letter unambiguously conveyed a desire to continue applying the terms of the old CBA while negotiating the terms of a new CBA rather than to terminate the old CBA. “Using the word ‘reopen’ instead of ‘negotiate’ does not convey a desire to end the current deal now, as opposed to later when the bargaining has been concluded,” the court stated. If there had been doubt as to what “reopen” meant, then the court would examine additional evidence. In this case, the author of the union’s letter testified that he deliberately avoided the word “terminate” so that the old CBA would remain in effect during negotiations.
Furthermore, the company ratified the agreement’s continuation by its conduct. Most importantly, the company continued to deduct union dues from employees’ paychecks and remit them to the union. Although the Ninth Circuit (AK, AZ, CA, ID, MT, NV, OR, WA, HI, Guam) has held otherwise, this circuit and the National Labor Relations Board have long followed the position that such “check-off” is lawful only when authorized by an express writing. By adhering to the union security clause in the old CBA, the company manifested a belief that the CBA remained in effect and that the company still had the required assent to deduct dues. Because the old CBA remained in effect – including the grievance-resolution machinery – the company must arbitrate the union’s grievances.
Office & Professional Employees Int’l Union, Local 95 v. Wood County Telephone Co., Case No. 04-3689 (7th Cir., 5/10/05).
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