Gurumurthy Kalyanaram on Interpretation of Collective Bargaining Agreement (CBA)
Gurumurthy Kalyanaram on Interpretation of Collective Bargaining
There are many lawsuits arising out of disputes in interpretation of the
collectively bargained agreements. Unions and employers work hard to craft
CBAs, but lawsuits emerge even in cases of carefully designed CBAs. In this
essay, Gurumurthy Kalyanaram reports on this important matter.
U.S. Supreme Court and Second Circuit have established precedents which
mandate that (i) the provisions of a Collective Bargaining Agreement must be read
as a whole in conjunction with other provisions; and (ii) the provisions of a
Collective Bargaining Agreement must be interpreted in a manner that does not
render any provision superfluous, meaningless, or of no effect.
Supreme Court Decisions
In Mastro Plastics Corp. v. NLRB, 350 U.S. 270, 279 (1956), the Supreme
Court held that collective bargaining agreements should generally be interpreted
according to established contract interpretation principles, including the principles
that, “Like other contracts, [a collective bargaining agreement] must be read as a
Applying a similar principle, in Sandifer v. United States Steel Corp., Case
No. 12-417, at 6, 10-11 (Jan. 27, 2014), the Court recently reiterated that the
language of labor statute provisions must likewise be interpreted based upon their
ordinary plain meaning in order to give effect to them effect.
Second Circuit Decisions
The Second Circuit has likewise reiterated that Collective Bargaining
Agreements must read as a whole and in a manner that does not render any
provision of no effect. United Steel, Paper and Forestry, Rubber, Manufacturing,
Energy, Allied Industrial and Service Workers International Union v. Cookson
America, Inc., 710 F.3d 470, 473 (2d Cir. 2013) (Walker, Katzman, Preska)
(“courts should attempt to read CBAs in such a way that no language is rendered
superfluous”); Marcic v. Reinauer Transportation Companies, 397 F.3d 120, 131
(2d Cir. 2005) (collective bargaining agreement provisions must be interpreted as a
whole, in context and not in isolation, and in a manner that that avoids rendering
any language superfluous); Aeronautical Industrial District Lodge 91 of the
International Association of Machinists and Aerospace Workers v. United
Technologies Corp., 230 F.3d 569, 576 (2000) (“traditional rules of contract
interpretation apply as long as they are consistent with federal labor policies”);
Interstate Brands Corp. v. Bakery Drivers & Bakery Goods Vending Machines,
Local Union No. 550, 167 F.3d 764, 768 (2d Cir. 1999) (interpretation that gives a
reasonable and effective meaning to all the terms of a contract is generally
preferred to one that leaves a part unreasonable or of no effect); United States v.
International Brotherhood of Teamsters, Chauffeurs, Warehousemen and Helpers
of America v. Boffa, 970 F.2d 1132, 1136 (2d Cir. 1992) (“We must avoid an
interpretation of an agreement that renders one of its provisions superfluous”).
See generally 20 Williston on Contracts § 55:20 (4th ed.) (outlining
applicable rules of interpretation for collective bargaining agreements). Applying
these principles, the Court in Prescott v. Northlake Christian School, 369 F.3d 491,
497 (5th Cir. 2004), held that, where the agreement contained a provision which
stated that “no party waives appeal rights, if any, by signing this arbitration
agreement”, the court could not ignore such language as mere surplusage. And in
Gateway Technologies, Inc. v. MCI Telecommunications Corp., 64 F.3d 993, 995,
997 (5th Cir. 1995), the court held that, where a Collective Bargaining Agreement
provided that errors of law “shall be subject to appeal”, the court cannot ignore this
language nor interpret it in a manner that renders it meaningless.
Accordingly, we have 50 years of precedent to assess the viability of the
lawsuits and claims born out of disputes in CBA interpretation.