Opinion ID: 76231
Heading Depth: 2
Heading Rank: 3

Heading: Permanence of Triggered Continuation Clause

Text: 17 At oral argument, MEBA offered an alternative theory whereby the contractual continuation clause should be given effect under these circumstances. MEBA contends that its notice of modification clearly triggered the contractual continuation clause, and the language of that clause precluded GFC from stopping the continuation effect unless it reached a new agreement with MEBA or declared impasse. According to the agreement, [t]he terms of the Agreement at the time of notice to modify was given shall continue in effect until mutual agreement on the proposed modifications or an impasse has been reached. R2-39, Ex. 1 at § 36.1. MEBA believes that this language clearly states two exclusive conditions for ending continuation once a notice to modify has been tendered, and a notice of termination is not one of those conditions. 18 Federal labor law provides a statutory right of termination, of which GFC has taken advantage in this case. See 29 U.S.C. § 158(d). 3 Though the parties to a CBA could restrict the ability of a party to terminate the agreement, the contract between GFC and MEBA is wholly silent on the issue of termination. MEBA argues that, even with this absence of restriction, the contractual continuation clause can prevent GFC from terminating and receiving the benefits of statutory termination. We disagree. 19 A notice of statutory termination results in a similar effect as a notice of modification under the agreement in this case: the parties are required by statute to negotiate in good faith, and certain provisions of the preexisting agreement are continued. 4 Once the termination becomes effective, existing contractual terms do not have force by virtue of the contract, in the absence of explicit contractual language to the contrary, but rather by virtue of the statutorily-based continuation effect embodied by the unilateral change doctrine. Litton, 501 U.S. at 206, 111 S.Ct. at 2225 (1991). 20 Here, the triggered contract clause was to continue the terms of the agreement until the parties reached an agreement on the modification proposals or impasse was reached on those modification proposals. By statutorily terminating, GFC made those contract-based modification negotiations, and, by extension, the contract continuation clause, moot. 21 If the modification negotiations were not moot, and we were to accept MEBA's interpretation of the continuation clause, GFC would be denied by implication the full panoply of effects flowing from its statutory right to terminate the agreement. Under the unilateral change doctrine, when an existing agreement has expired and negotiations on a new agreement have yet to be completed, a unilateral change in those terms and conditions of the agreement that are subject of mandatory bargaining under the NLRA constitutes a breach of the statutory requirement of good faith. See NLRB v. Katz, 369 U.S. 736, 743, 82 S.Ct. 1107, 1111, 8 L.Ed.2d 230 (1962). Therefore, no unilateral changes in those terms of the agreement, even after expiration, is appropriate unless impasse has been reached in negotiations. However, this statutory continuation effect is not as comprehensive as the contractual continuation effect triggered in this case. Post-termination, a party may alter the method of dispute resolution, at least as to those claims arising post-termination. See Litton, 501 U.S. at 205-06, 111 S.Ct. at 2225. A party may refuse to abide by the strike or lockout provisions in the agreement, to the same extent that other terms of dispute resolution are not continued. See id. at 199, 111 S.Ct. at 2222. 22 Under the circumstances of this case, to enforce a triggered contractual continuation clause even after proper statutory termination is to deny GFC the benefits arising from statutory termination, including, most importantly, a different and less-inclusive statutory continuation policy. Denying GFC the right to unilaterally alter certain terms of the agreement, including terms of dispute resolution covering disputes arising after contract termination, and terms restricting its right to lock out employees, denies GFC its rightful bargaining position under federal labor law. The termination right, like all rights granted by statute, may not be waived except by clear, explicit language. See Metropolitan Edison Co. v. NLRB, 460 U.S. 693, 708, 103 S.Ct. 1467, 1477, 75 L.Ed.2d 387 (1983) ([W]e will not infer from a general contractual provision that the parties intended to waive a statutorily protected right unless the undertaking is `explicitly stated.' More succinctly, the waiver must be clear and unmistakable.). The type of inference that MEBA suggests we make from the text of the continuation clause to effect a waiver is exactly the sort of imprecise language to which we cannot attribute waiver. 23 For both of its arguments, MEBA's position is also undermined by the execution of the 30-day extension agreement by the parties when faced with a looming termination date. If the modification/continuation clause was to effectively continue the agreement, then there was no need for the parties to enter into a separate extension agreement. MEBA's argument that the extension agreement was executed only for additional security is specious. 24 We therefore agree with GFC that three options were available to the parties under the agreement as the automatic renewal date approached: (1) they could let the day pass, and the original agreement would be automatically renewed for a one-year period; (2) a party could give notice of its wish to modify the agreement, which would prompt negotiations, during which the terms of the original agreement would be carried over until impasse was reached, and, according to the agreement, potentially disastrous bargaining tactics, including strikes and lockouts, would be curtailed strictly; or (3) a party could give notice of its intent to terminate the agreement, which would result in a termination on the expiration date, followed by a good-faith bargaining session in which the status quo is preserved under the unilateral change doctrine, and either side could employ any of the bargaining pressures it possessed, including lockouts and strikes. Abstract logical analysis might find inconsistency between the command of the [NLRA] to negotiate toward an agreement in good faith and the legitimacy of the use of economic weapons ... to induce one party to come to the terms desired by the other. But the truth of the matter is that at the present statutory stage of our national labor relations policy, the two factors — necessity for good-faith bargaining between parties, and the availability of economic pressure devices to each to make the other party incline to agree on one's terms — exist side by side. NLRB v. Insurance Agents' Internal Union, 361 U.S. 477, 489, 80 S.Ct. 419, 427, 4 L.Ed.2d 454 (1960).