An Arbitration Clause May Survive the Expiration of a Collective Bargaining Agreement

Author: Alexander Soric, Kane Kessler, PC

In Litton Financial Printing Division v. NLRB, +501 U.S. 190 (U.S. 1991), the Supreme Court addressed whether a dispute over the layoff of employees which occurred well after the expiration of the collective bargaining agreement must be arbitrated nonetheless under the arbitration provision of the then-expired collective bargaining agreement.

Under Sections 8(a)(5) and 8(d) of the National Labor Relations Act ("NLRA"), an employer is obligated to bargain in good faith with respect to wages, hours, and other terms and conditions of employment. Generally, under the National Labor Relations Board's ("NLRB") "unilateral-change doctrine", an employer violates the NLRA if it is found to have implemented a unilateral change of an existing term or condition of employment without bargaining to impasse with the union. Unless the dispute arose under the agreement, arbitration clauses are excluded from the reach of this doctrine in cases where an existing agreement has expired and negotiations on a new one have yet to be completed. In such cases, employers are not required to arbitrate a union's grievances.

In this case, the Court upheld the NLRB's position that the layoff dispute was not subject to the arbitration provision in a collective bargaining agreement between the parties because 1) the employer implemented the layoffs after the collective bargaining agreement had expired, 2) the dispute did not involve rights that had accrued or vested under the agreement and 3) there was no indication that the parties expressly agreed that such a right would be carried over after its expiration.