Gurumurthy Kalyanaram on Interpretation of Collective Bargaining Agreement (CBA)

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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

whole.”

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.