Court Opinion

ID: 9529266
Source: CourtListenerOpinion
Date Created: 2023-08-07 03:49:21.091252+00
Date Added: 2024-06-11T13:27:43.345243
License: Public Domain

GRABER, J.,
dissenting.
I dissent.
As will be demonstrated below, the Employment Appeals Board erroneously interpreted a provision of law. ORS 657.282; ORS 183.482(8)(a). In addition, its interpretation of the collective bargaining agreement is not supported by substantial evidence in the record. ORS 657.282; ORS 183.482(8)(c). For those reasons, I would reverse the decision of the Court of Appeals and remand the case to the agency for further consideration under a correct interpretation of the law and permissible findings of fact. The parties’ timely notices of intent to modify their collective bargaining agreement prevented its automatic renewal, and the parties then bargained to impasse; consequently, the employer’s subsequent unilateral modification of wages was not in breach of a collective bargaining agreement that was in effect at the time the affected employees were on strike.
There are two statutory provisions that the agency was called on to construe in this case. ORS 657.200(1) provides:
“An individual is disqualified for benefits for any week with respect to which the assistant director finds that the unemployment of the individual is due to a labor dispute which is in active progress at the factory, establishment or other premises at which the individual is or was last employed or at which the individual claims employment rights by union agreement or otherwise.”
*314ORS 657.176(5) contains this exception to the disqualification rule stated in ORS 657.200(1):
“An individual shall not be disqualified from receiving benefits * * * under ORS 657.200 if the individual ceases work or fails to accept work when a collective bargaining agreement between the individual’s bargaining unit and the individual’s employer is in effect and the employer unilaterally modifies the amount of wages payable under the agreement, in breach of the agreement.”
In other words, ORS 657.200(1) generally disqualifies from receiving unemployment benefits employees who are on strike; ORS 657.176(5) creates an exception if the employer unilaterally modified the employee’s wages in breach of a binding collective bargaining agreement. See Senate Committee on Labor, HB 2595, Exhibit J (sponsor described purpose of bill as protecting employees whose employers “forced [them] to forfeit the benefits of the bargain which their representatives have negotiated for them” by cutting their wages “despite the existence of valid labor agreements”).
The key questions here are whether the employer’s unilateral modification of wages was (1) “in breach of’ a collective bargaining agreement (2) that was “in effect” at the time of the strike. ORS 657.176(5). If there was no agreement in effect, or if the change in wages was not a breach of the amount of wages payable thereunder, then striking employees are disqualified from receiving benefits. In my view, there was no agreement in effect; but, even if there was some agreement in effect, it did not include the amount of wages paid under the prior agreement, when wages was the foremost issue that both parties sought to change when they gave timely notice of intent to modify the agreement.
There is a twist to this case. Even though state law governs the conditions under which striking employees may obtain unemployment compensation benefits, state law does not govern the meaning of the parties’ collective bargaining agreement. The majority makes a basic analytical mistake by starting its analysis under state labor law principles. The majority cites OSEA v. Rainier School Dist. No. 13, 311 Or 188, 808 P2d 83 (1991). 313 Or at 305. OSEA concerned a matter under the Employment Relations Board’s jurisdiction and involved only questions of state law. By contrast, this *315case involves parties whose relationship is governed exclusively by federal labor law. See San Diego Unions v. Garmon, 359 US 236, 79 S Ct 773, 3 L Ed 2d 775 (1959) (discussing the preemptive effect of the National Labor Relations Act).1 A discussion of the meaning of the agreement must proceed in that context.
The majority states the facts (313 Or at 303-04) correctly but incompletely. The majority omits the parties’ practical interpretation of their collective bargaining agreement. That interpretation is at odds with the majority’s.
Among the provisions that the parties expressly sought to revise was the provision concerning wages. The union notified the employer by letter dated March 21, 1988, that “the contracts [which were due to expire on May 31, 1988] are hereby opened for negotiations, revisions or amendments” and listed wages (along with four specific wage proposals) as the first item in a list of 14 items sought to be bargained. The employer’s letter to the union of March 28, 1988, also listed wages (along with two specific proposals relating thereto) as item 1 in its desired changes to the collective bargaining agreement. In April 1988, after each party had notified the other that it wished to change the terms of the agreement, the parties began negotiating. They negotiated concerning wages, among other things. By late November 1988, they still had not reached an agreement. The employer notified the union that it would implement its latest offer on December 15. The union asked the employer to wait before implementing that offer and to continue bargaining, and the employer agreed. The union wrote a confirming letter to the employer:
“[T]his letter will confirm an agreement that we have reached regarding renewal of the 1988 collective bargaining agreement. [The unions] agree that they will continue to bargain in good faith towards a mutually acceptable agreement. The parties have expressly agreed that you will immediately rescind your stated implementation of December 15, 1988 and the parties further agree that if no recommended settlement is reached up to and including January 4, 1989 that a legal impasse will be reached.” (Emphasis added.)
*316The parties continued to negotiate but failed to reach an agreement by January 4,1989. A few days later the employer implemented its last offer, and the union employees went on strike.
By implementing its last offer in January 1989, the employer did “unilaterally modif[y] the amount of wages payable” to the affected employees. ORS 657.176(5). Under the parties’ 1987-88 collective bargaining agreement and under applicable principles of federal labor law, however, that modification was not “in breach of the agreement.” Ibid.
The duration clause of the parties’ agreement, Article XXTV, provided:
“This agreement shall be a continuing agreement and shall remain in full force and effect until the first day of June, 1986, and shall remain in full force and effect to each succeeding June 1 thereafter® subject to the following conditions:
“This agreement may be amended or revised at any time by mutual agreement between the parties hereto.
“Either party desiring to change the terms of this agreement shall notify the other party and present the changes desired in writing not less than sixty (60) days prior to June 1, 1986, or any succeeding June 1, and negotiations shall commence within ten (10) days after receipt of such notice by either party.
“Upon completion of negotiations or any or all desired revisions, the agreed-to revisions shall be incorporated into and become a part of this Agreement.
“Either party desiring to terminate this agreement shall notify the other party in writing not less than ninety (90) days prior to June 1 of any year. However, both parties agree to meet in negotiations within ten (10) days after receipt of such notice by either party for purpose of negotiating possible renewal of this Agreement.” (Emphasis added.)2
3
*317When read straightforwardly, Article XXIV means that the agreement renews “as is” for one-year intervals each June 1 unless a party seeks to modify or terminate the agreement, or unless the parties mutually agree to a change. In any of those events, the agreement does not renew automatically in its existing form.
To state it another way, the duration clause provides that the agreement renews “as is” for one year each June 1 unless one of four situations occurs:
(1) The parties mutually revise the agreement during its term;
(2) One party gives timely notice of intent to amend, but no agreement has been reached yet;
(3) One party gives timely notice of intent to amend, and a new agreement is reached; or
(4) One party gives timely notice of intent to terminate the agreement altogether.
Each of the four situations is grammatically equivalent, because all four follow the phrase “subject to the following conditions.” The one-year renewal of the whole agreement “as is” occurs when a party gives no notice, or untimely notice, under the appropriate paragraph. In situation (2), after the parties give timely notice of intent to change the agreement, then the agreement ceases to be renewed automatically; it expires on May 31; and the parties either can bargain to a new agreement or to impasse — which is what happened here.
In my view, then, the most plausible reading of the duration clause differs from what the majority describes. What the majority demonstrates, however, is that reasonable people can differ about the meaning of the agreement. When a provision in a collective bargaining agreement is ambiguous, there are recognized rules of construction to consider. One of those aids to understanding the parties’ intent is their own *318interpretation of the clause at issue. See Cincinnati Newspaper Guild v. Cincinnati Enquirer, 863 F2d 439, 443 (6th Cir 1988) (in construing a collective bargaining agreement, ‘ ‘ [t]he practical construction placed upon a contract by people who have agreed to be bound by its terms is * * * relevant in determining, should the matter be in doubt, what those terms were supposed to mean”).
The parties treated this as an ordinary economic strike. They negotiated “towardU a mutually acceptable agreement” but, instead of reaching an agreement, they bargained to “legal impasse, ” as the union itself stated in writing. (Emphasis added.) An impasse means a situation in which there is no agreement in force; the parties have negotiated in good faith but have not reached a new agreement.
“ ‘The definition of an “impasse” is understandable enough — that point at which the parties have exhausted the prospects of concluding an agreement and further discussions would be fruitless — but its application can be difficult. Given the many factors commonly itemized by the [National Labor Relations] Board and courts in impasse cases, perhaps all that can be said with confidence is that an impasse is a “state of facts in which the parties, despite the best of faith, are simply deadlocked.” ’ ” Laborers Tr. Fund v. Advanced Lightweight Conc., 484 US 539, 543 n 5, 108 S Ct 830, 98 L Ed 2d 936 (1988).
The majority’s statement that the parties’ characterization of their situation as a “legal impasse” “says nothing about whether or not the agreement was still in existence,” 313 Or at 311 (emphasis added), is a non sequitur given the recognized meaning and effect of “impasse.” By definition, there cannot be both an “impasse” in wage negotiations and an agreement in effect concerning wages at the same time. After bargaining to impasse, that is, after good-faith negotiations have exhausted the prospects of concluding an agreement, the employer has a right — as a matter of federal labor law — to implement its last offer. Ibid.4
*319In addition to characterizing their situation as a “legal impasse” in correspondence, the parties followed up with the actions that one would expect after an impasse and in the absence of a continuing collective bargaining agreement. The employer implemented its last offer, and the union employees went on strike.
At a minimum, these parties treated the provisions of the agreement that they expressly asked to amend as not agreed upon and not continued in effect automatically. One of the items not agreed upon was wages. Even if other parts of the agreement continued unchanged under this duration clause, the wage provisions did not.
The majority dismisses the relevance of other courts’ interpretations of similar duration clauses, on the ground that they deal with different wording. 313 Or at 309-10.5 It is true that the specific wording differs from case to case. That is not the end of the inquiry, however. What the majority fails to acknowledge is that other courts’ decisions concerning similar clauses also deal with recognized principles of federal labor law, which do bear on this problem.
“A collective bargaining agreement is not an ordinary contract for the purchase of goods and services, nor is it governed by the same old common-law concepts which control such private contracts.” Transportation Union v. U.P.R. Co., 385 US 157, 160-61, 87 S Ct 369, 17 L Ed 2d 264 (1966).
Collective bargaining agreements are interpreted according to federal law. Ibid.) see also Allis-Chalmers Corp. v. Lueck, 471 US 202, 210, 105 S Ct 1904, 85 L Ed 2d 206 (1985) (meaning given to terms in collective bargaining agreements must be determined by federal law).
One particularly instructive case is Kaufman v. Brotherhood of Firemen, 607 F2d 1104 (5th Cir 1979). The *320parties’ collective bargaining agreement there stated that it “shall remain in effect until November 12, 1970, and from year to year thereafter with the provision that should either party desire to terminate this Agreement or to modify any part thereof, it shall notify the other party in writing.” The union timely requested modifications. Negotiations were unsuccessful. When impasse was reached, the union went on strike. The employer sued for breach of the no-strike clause in the agreement.
The District Court held that a notice to modify the agreement, as distinct from a notice to terminate, did not prevent automatic renewal of the agreement. The District Court reasoned that the agreement created two types of notices, which yielded two different results: notice to terminate the agreement prevented automatic renewal; notice to modify did not. Accordingly, the District Court concluded that the agreement was “in full force and effect” at the time of the strike and that the union had breached the no-strike provision'. The District Court’s reasoning was similar to the majority’s here.
The Fifth Circuit reversed. It agreed with the union’s argument that both a notice to terminate and a notice to modify prevented automatic renewal of the agreement. The court first noted that, grammatically, the clause at issue did not give different effect to the two types of notice. Each “serves as a condition or limitation on the extension of the agreement.” 607 F2d at 1109. That being so, the court held that the duration clause was unambiguous and had to be read so that notice to modify prevented an automatic renewal of the agreement. Ibid.
What is crucial to the present discussion is not so much the Fifth Circuit’s insistence on grammatical parity (although that is helpful, too), but its explanation that principles of federal labor law make a contrary result untenable:
“Collective bargaining agreements are not governed by the common-law principles controlling private contracts, but rather must be construed in light of industrial ‘practice, usage and custom pertaining to all such agreements.’ * * * Given this awareness for the competing interests of labor and management, the Company’s interpretation is untenable. Under the Company’s view, the Union would have no *321recourse but to accept extension of the present agreement if the parties were unable to agree on modification. The Company would have the unilateral power to reject proposed changes without fear of Union reprisal for its recalcitrance. Indeed, there is nothing in the agreement as interpreted by the Company that would keep it from continuing year after year, thus forcing the Union to choose between termination of the entire agreement and ineffective negotiations. Interpreting the agreement in light of the realities of the bargaining process, it is absurd to construe the duration clause so as to render ineffective the Union’s contractual right to seek modifications.” Id. at 1109-10 (citation omitted).
To similar effect, see IAM, Dist. Lodge No. 94 v. ILWU, Local 13, 781 F2d 685, 691 (9th Cir 1986) (notice of desire to modify properly terminates contract).
The majority fails to consider the function of the notice of intent to modify. Forcing these parties to terminate their entire agreement, even if only a few changes are desired, to avoid automatic renewal of the agreement “as is” — in the absence of a clear expression of that result in the agreement — is not an option that comports with the federal cases on this subject or with their overriding theme of labor peace and stability. Termination of the entire agreement means that both parties must bargain from scratch on every mandatory subject of bargaining, with no bench mark. If that were required in order to prevent automatic renewal of the agreement each year, then the continuity of these parties’ labor relationship would be seriously disrupted.
The majority focuses with tunnel vision on the time difference between a 90-day notice to terminate the agreement and a 60-day notice to amend it. 313 Or at 307-09. A notice of desire to modify and a notice of desire to terminate give the parties very different amounts of work ahead of them. Giving them the amount of time appropriate to prepare for the differing tasks is the sole and simple function of the 30-day difference. If the majority were right, then a negotiation for changes after the parties give the 60-day notice could never lead to an impasse, but only to a breach of contract if the employer implemented its last offer.
Even if a party wanted to take the drastic step of terminating the agreement after trying unsuccessfully to *322negotiate changes, the majority’s reading of Article XXIV effectively prevents a party from doing that. Although the majority notes that the parties can give notice of intent to modify earlier than 60 days, the agreement requires only 60-day notice. It is unlikely that the parties would have provided for so short a modification period had they realized that, by so doing, they would have insufficient time to terminate unacceptable agreements.
The majority’s result contradicts the terms of the agreement; it contradicts common sense; it contradicts the parties’ characterization of their situation as a “legal impasse” and their actions confirming that characterization; and it contradicts principles of federal labor law. These parties bargained to impasse, not to a collective bargaining agreement, after the expiration of their 1987-88 agreement. Accordingly, the terms of ORS 657.176(5) do not apply. Striking employees were disqualified under ORS 657.200(1), and the Court of Appeals’ decision to the contrary should be reversed. The case should be remanded to the Employment Appeals Board for further consideration.
Gillette, J., joins in this dissenting opinion.

 The parties in this case do not dispute that their relationship is governed by federal law.

 The agreement remained in effect for 1987-88.

 Significantly, the agreement did not contain a “continuation clause” providing that the agreement would remain in effect during negotiations that follow a notice to amend, until modified by a new agreement. Had the parties intended their agreement to continue while they negotiated the desired amendments, they could have provided for it easily. Such provisions are common in collective bargaining agreements. See, e.g., International Union of Op. Eng. v. Dahlem Const. Co., 193 F2d 470, 473 (6th Cir 1951) (“Should such notice of a desire to modify the terms of this *317agreement be given by either party to the other, then this agreement shall r emain in full force and effect until modified by a new agreement resulting from the negotiations”); Paterson v. Parchment P. Co. v. International Brotherhood, 191 F2d 252, 253 (3d Cir 1951) (“should there be a delay in negotiating the new agreement, this agreement shall remain in full effect until such time as a new agreement is completed”), cert den 342 US 933 (1952).

 Footnote 4 (313 Or at 311) illustrates the majority’s misreading of the applicable concepts. The text quoted there concerns only a situation in which, in the middle of the present term covered by an existing collective bargaining agreement, parties reach a stalemate with respect to proposed changes to the ongoing agreement. The quoted text does not refer to situations, such as the one at issue here, in *319which the present term of the agreement comes to an end and in which the question is whether the agreement renews.

 Ironically, the only case on which the majority is willing to rely (313 Or at 309, 311-12) is the one that — by the majority’s own description of it — is the least similar of the federal eases that it cites. In KCW Furniture, Inc. v. N.L.R.B., 634 F2d 436 (9th Cir 1980), the duration clause stated expressly that a notice of intent to amend did not prevent the automatic renewal of the agreement — wording conspicuously absent from the parties’ agreement here.