Opinion ID: 3020052
Heading Depth: 2
Heading Rank: 2

Heading: The Contractual Language

Text: We undertake a plenary review of the question whether contractual language is clear or ambiguous, and we will affirm a summary judgment grant on an issue of contract interpretation only if the contractual language is “subject to only one reasonable interpretation.” Local Union No. 1992, Int’l Bhd. of Elec. Workers v. Okonite Co., 189 F.3d 339, 341 (3d Cir. 1999) (citations omitted). In determining whether contractual language is ambiguous, we will consider “the contract language, the proffer of the parties, and the extrinsic evidence offered in support of each interpretation.” Id. at 343 (citation omitted). Beginning with the CBA’s language, we can identify no ambiguity in Article 6 VII, Section 1's discussion of how ISP/EISP offers must be made to employees in a nonlayoff situation. The first sentence (which is also the first paragraph) of Article VII, Section 1 of the CBA contemplates the provision of ISP and/or EISP benefits in the event “the Company notifies the Union in writing that technological [or other] change . . . has or will create a surplus in any job title in a work location.” The parties agree that there is no ambiguity in the meanings of “job title” or “work location.” The “job title” of a Verizon employee describes her or his function within the company, such as a technician or an analyst. The “work location” describes the building where the employees work. Thus, Article VII, Section 1 begins by unambiguously describing the Company’s power to identify a surplus in the context of (1) a job title and (2) a work location. Once the company identifies a surplus in “any job title in a work location,” Verizon may make ISP/EISP offers. However, the CBA states that these offers will be “subject to the following conditions.” These conditions are given in subsections (a) – (c) of Section 1. Subsection (a) provides, inter alia, that Verizon “shall determine [1] the job titles and work locations in which a surplus exists,” (2) “the number of employees in such titles and locations who are considered to be surplus,” and (3) “the period during which the employee may, if he or she so elects, leave the service of the Company pursuant to this Section.” With respect to the EISP offers, subsection (a) empowers Verizon to “limit acceptances to the number of surplus.” Subsection (b) states that “[t]he number of 7 employees who may make such election shall not exceed the number of employees determined by the Company to be surplus.” Subsection (c) recites the an employee must, within thirty days of Verizon’s offer, transmit in writing his or her desire to leave Verizon and receive ISP or EISP benefits. The above language makes clear that Verizon’s discretionary power to make ISP/EISP offers is limited to “job title” and “work location.” The opening sentence of Article VII, Section 1describes Verizon’s discretionary powers in the context of job title and work location without making any mention of a “work group.” This power is then conditioned in subsection (a)(1) on Verizon identifying surpluses in a “job title[]” and “work location[],” which reiterates that these are the parameters of Verizon’s discretion. And, in subsection (a)(2), the parties state that Verizon shall have the power to determine the number of employees within “such titles and locations” who are considered surplus. Thus, again, Verizon’s discretionary powers are discussed only in the context of being “condition[ed]” on identifying a job title and work location. Verizon nonetheless argues that it has unhampered discretion to locate a surplus as it sees fit. In particular, Verizon claims that the contractual language does not inhibit the company from making non-layoff ISP/EISP offers by the “work group” that is housed within a work location. As described above, however, this position is not compatible with the text of Article VII, Section 1. First, Verizon does not argue that “job title” or “work location” actually means “work group.” Therefore, if the CBA language 8 describing Verizon’s discretionary powers was meant to extend to “work groups” within a job title and location, we would expect to find this language in Article VII, Section 1. Nor can Verizon argue that the drafters of the CBA were unfamiliar with discussing the distribution of employee benefits in the context of these sub-units because the very next section of the CBA – Article VII, Section 2(a) – contemplates locating a surplus within a “work group” when EISP offers are made in layoff situations.4 Also contradicting Verizon’s reading of Article VII, Section 1 is the consistent use of the “job title” and “work location” terminology in the context of “conditions” placed on ISP/EISP offers, which indicate that they are indeed limiting factors on Verizon’s power to make such offers. And the condition placed on Verizon’s discretion – essentially making Verizon treat all similarly skilled employees at a location in the same way – is the type of condition one would expect a collective bargaining unit to demand of an employer so as to ensure that all of its equivalently skilled employees are treated equally. In addition to arguing that there is no limiting language in the CBA, Verizon argues that certain words and phrases in Article VII, Section 1 could be read affirmatively to support the company’s interpretation of that provision. Again, we cannot agree. 4 Article VII, Section 2(a) of the CBA recites that “prior to proceeding to a layoff resulting from a surplus in any particular title, location, and work group the Companies will offer an Enhanced ISP Termination Allowance equal to two (2) times the normal ISP Termination Allowance (e.g., up to a maximum of $66,000) in surplus title and work location.” (Emphasis added.) 9 Verizon focuses on the contractual language authorizing it to declare a surplus. The company calls attention to the phrases “the Company deems it appropriate” and “to the extent necessary to relieve the surplus.” 5 These phrases, however, do not appear in the context of Verizon’s power to locate the surplus, which is what the “job title” and “work location” language does. Rather, the phrases appear in the context of provisions relating to Verizon’s power to dictate the size of any surplus. That is, if Verizon decides that there is a “force surplus” and “the Company deems it appropriate,” then that surplus will be relieved through a seniority system, “to the extent necessary to relieve the surplus.” The relevant question is not, however, Verizon’s power to declare the existence of a surplus, which Local 827 does not dispute. Instead, the question before us is Verizon’s asserted authority unilaterally to locate that declared surplus wherever the company pleases. And it is on this subject that the CBA places “conditions” on the reach of Verizon’s power, namely confining to “job title” and “work location” the company’s authority to locate a surplus. Finally, Verizon contends that the meaning of “surplus” is ambiguous here because limiting Verizon’s discretion to make ISP/EISP offers would mean that Verizon would 5 At oral argument, Judge Stapleton reminded Verizon’s counsel that “You have to be able to say that there is some wording in this contract that should be read differently because of this extrinsic context.” Verizon’s counsel responded by stating that the ambiguity lies in the words describing Verizon’s discretionary powers and then specifically pointed to the “the Company deems it appropriate” and “to the extent necessary to relieve the surplus” language found in Article VII, Section 1. 10 have to make ISP/EISP offers to “non-surplus” employees. First, this argument only works if the contractual language could be read as localizing the “surplus” to a work group because – under that scenario – opening up the ISP/EISP benefits to employees outside the work group would necessarily mean that those outside employees are “nonsurplus.” But, as shown above, the relevant contractual language never describes “surplus” in the context of work groups; instead, “surplus” is only deployed in the context of “job titles” and “work locations.” Second, sub-section (b) of Article VII, Section 1, authorizes Verizon to limit the number of employees who can accept the ISP/EISP offer to “the number of employees determined by the Company to be surplus.” This language granting Verizon complete discretion to determine the size of a surplus would appear to address Verizon’s concerns about over-eligibility among otherwise qualified candidates for the ISP/EISP benefits. Lastly, were “surplus” interpreted the way Verizon advances, the company would be empowered to make ISP/EISP offers narrowly so effectively as to obviate the Article VII, Section 1 requirement that the offers be made “in the order of seniority.” Put another way, Verizon’s reading of surplus would contravene the contractual language by permitting the company to make non-layoff ISP/EISP offers to individuals with less seniority than others of the same job title at the same work location. For these reasons, we find no ambiguity in the language of Article VII, Section 1 requiring Verizon make non-layoff ISP/EISP offers to all individuals with the same job title and at the same work location. 11