In the
United States Court of Appeals
For the Seventh Circuit
No. 10-2528
INTERNATIONAL U NION,
U NITED A UTOMOBILE, A EROSPACE
& A GRICULTURAL IMPLEMENT
W ORKERS OF A MERICA, and its
L OCAL 2343,
Plaintiffs-Appellants,
v.
ZF B OGE E LASTMETALL LLC,
Defendant-Appellee.
Appeal from the United States District Court
for the Central District of Illinois.
No. 2:08-cv-02260-MPM-DGB—Michael P. McCuskey, Chief Judge.
A RGUED D ECEMBER 7, 2010—D ECIDED A UGUST 19, 2011
Before R IPPLE, K ANNE and SYKES, Circuit Judges.
R IPPLE, Circuit Judge. The International Union, United
Automobile, Aerospace & Agricultural Implement
Workers of America (“UAW”) and its Local 2343 (collec-
2 No. 10-2528
tively, the “Union”) brought this action against ZF Boge
Elastmetall LLC (“ZF Boge”) in the United States District
Court for the Central District of Illinois. The Union
claimed that ZF Boge breached the operative collective
bargaining agreement (“Agreement” or “CBA”) by
closing a manufacturing plant in Paris, Illinois, after it
had secured various concessions from the Union, which
represented the employees at the Paris facility. Pro-
ceeding under section 301 of the Labor Management
Relations Act, 29 U.S.C. § 185, the Union requested both
damages and specific performance of a provision in a
labor agreement that, it contends, required ZF Boge to
maintain the operation of the Paris facility following a
consolidation of operations with a facility in Hebron,
Kentucky. The parties filed cross-motions for summary
judgment, and the district court entered judgment for
ZF Boge. The Union now appeals.
We agree with the district court that the concessions
did not require the Paris facility to be kept open beyond
the expiration of the CBA. 1 Accordingly, we affirm the
judgment of the district court.
1
Because we agree with the district court that the 2007 Agree-
ment was intended to be only a modification that did not
create vested rights or otherwise lasting obligations, we do not
consider ZF Boge’s alternate arguments for summary judg-
ment, including that the Union failed to exhaust contractual
remedies.
No. 10-2528 3
I
BACKGROUND
A. Facts
At the times relevant to this action, ZF Boge operated
two manufacturing facilities in the United States that
produced rubber and metal brushings for use in the
automotive industry. The facility in Paris, Illinois, was
unionized and operated under the terms of successive
collective bargaining agreements. The relevant agree-
ment covered the period of April 3, 2005, through April 6,
2008. The facility in Hebron, Kentucky, was nonunion at
all relevant periods.
In early 2007, in the face of “significant operating losses,”
R.43 (R.37, Vol. V), Ex. KK, ZF Boge began studying
consolidation of its manufacturing operations. Beginning
in April 2007, ZF Boge approached the Union repre-
senting the Paris employees and requested to reopen
several provisions of the CBA that it deemed “non[-
]competitive.” Id., Ex. QQ. The Union’s membership
initially rejected the request to bargain about items in-
cluded in the governing CBA, including pensions,
shifts, job selection and payroll administration. Plant
Manager Marc Vonderlage subsequently asked the mem-
bership to reconsider by explaining in a memo to em-
ployees that the purpose of renegotiation was “to position
this plant so that it has the best chance of being chosen
to remain open and viable in the long term.” R.1, Ex. B.
Union members were reassured that, before any agree-
ment was reached, it would be presented for approval
to the membership and that “none of the changes agreed
4 No. 10-2528
to will take effect unless this plant is chosen to stay open.”
Id. A week after Vonderlage’s memo was sent, the mem-
bers voted to begin bargaining on the contested items.
The Union and ZF Boge reached an agreement, signed
on June 25, 2007, with respect to the terms that had
been reopened for negotiation. The 2007 Agreement (or
the “mid-term Agreement”) was titled, “Agreements: ZF
Boge Elastmetall/UAW 2343 regarding items discussed to
influence the plant selection decision and long term
viability of the Paris facility.” R.1, Ex. A at 1. It is written
in chart form, placing the previously negotiated provi-
sion of the still-in-effect 2005 CBA next to the newly
negotiated terms, topic-by-topic. In addition to the con-
cessions requested by ZF Boge, such as a pension
freeze and biweekly payroll, the Union negotiated more
generous 401(k) provisions, including a defined contribu-
tion of three percent for all employees and additional
matching contributions, as well as the addition of five
employees to the bargaining unit. Although the mid-
term Agreement contained no introductory materials
or comprehensive statements, the final page included a
section titled, “Notes regarding these agreements,” which
provided, in relevant part:
None of these items will be implemented unless
Paris is the plant chosen to remain in operation
after the consolidation. If Paris is NOT the
chosen facility, it will continue to operate under
the old UAW contract.
Id. at 8. After setting implementation times for the various
provisions, some of which depended on the date of “an
No. 10-2528 5
official announcement regarding the consolidation plan,”
the mid-term Agreement concluded with the note:
It is mutually agreed between the company and
union bargaining teams that the items revised
through this process will not be subject to
change in the next contract negotiations.
Id.
On June 20, 2007, after the mid-term Agreement had
been reached but before it had been signed, ZF Boge
announced to its employees that the decision had been
made to close the Hebron facility and to keep the Paris
facility open. Consolidation began, and some equipment
and orders were transferred from Hebron to Paris. Some
Hebron employees were permitted to transfer to an-
other division, more left voluntarily in anticipation of
future closure, and, for at least some remaining Hebron
employees, severance agreements were prepared. Al-
though the Hebron plant shrunk its workforce by roughly
thirty percent in this period, it did not completely close.
In February 2008, while the consolidation process
was ongoing, the Union and ZF Boge began negotiating
a new CBA for the Paris facility. Negotiations became
acrimonious in the days before the existing CBA ex-
pired, and, without a new contract, the Union members
went on strike on April 6, 2008. Bargaining continued. In
mid-to-late April, ZF Boge informed the Union that it
was reconsidering the decision to consolidate to the
Paris facility, and it announced that it would begin deci-
sion bargaining on the issue. Following that bargaining,
ZF Boge announced that it would reverse the ongoing
6 No. 10-2528
consolidation process, close the Paris facility and main-
tain the facility in Hebron. On April 21, 2008, the Union
made an unconditional offer to end the strike and return
to work. Although the record is not entirely clear on the
point, it appears that the striking workers returned to
work, but the plans moved forward to close the Paris
facility.
The Paris facility was closed by the end of 2009. The
Hebron facility remains open.
B. District Court Proceedings
In October 2008, the Union filed this action in the
district court. It alleged that ZF Boge breached the mid-
term Agreement when it accepted and implemented the
concessions of the Union but later reversed course and
allowed the Hebron, not Paris, facility to survive con-
solidation. The Union sought both damages and specific
performance, which, in its view, required ZF Boge to
close the Hebron plant and reopen the Paris plant.
Following discovery, the parties filed cross-motions
for summary judgment. ZF Boge made three independent
arguments for summary judgment in its favor: that
(1) the mid-term Agreement, and all obligations arising
under it, expired with the 2005 CBA in April 2008;
(2) the Union failed to exhaust its contractual remedies
by grieving and arbitrating the dispute; and (3) even if
the obligations under the mid-term Agreement continued
past the expiration of the CBA, the mid-term Agree-
ment had not been breached, because ZF Boge was only
No. 10-2528 7
required to “select” Paris, which ZF Boge did during the
term of the CBA, R.37 at 22. The Union contended princi-
pally that the mid-term Agreement, although it modified
the CBA, also created independent obligations that
did not expire in April 2008. It further contended that,
even if the mid-term Agreement had expired, the com-
pany still breached it during its effective period when
the company failed to consolidate all of its operations
at the Paris facility upon obtaining the concessions.
The district court entered summary judgment for
ZF Boge. It grounded its decision exclusively on its con-
clusion that the mid-term Agreement was a modifica-
tion to the CBA that expired with the CBA in April 2008.
The court found the structure of the mid-term Agree-
ment and its lack of any independent duration clause
persuasive on this question. The court also noted that the
CBA contained a provision, not modified in the mid-
term Agreement, that provided, “[n]otwithstanding any-
thing else in this Agreement, no act, omission, or event
occurring before the initial effective date or after the
termination of the Agreement shall give rise to any
rights or liabilities under this Agreement nor shall it
be subject to arbitration.” R.37, Ex. J at 50. The act
upon which the claim for breach was made was the
decision to reverse the consolidation in Paris to Hebron,
which occurred only after the expiration of the CBA
and during the Paris strike. Prior to that time, the
court noted, consolidation to Paris was in process.
The court did not consider ZF Boge’s arguments re-
garding exhaustion or its argument that there was no
8 No. 10-2528
breach even if the obligations of the mid-term Agreement
continued past the expiration of the CBA.
The Union timely appealed.
II
DISCUSSION
The Union challenges the entry of summary judg-
ment for ZF Boge. First, the Union contends that the
district court erred in resolving factual issues in favor of
ZF Boge in order to conclude that the 2007 Agreement
was a mid-term modification that expired with the
CBA. Next, the Union claims that, even if the 2007 Agree-
ment is a mere mid-term modification, certain obliga-
tions, including the obligation to consolidate operations
in Paris instead of Hebron, survived the expiration of
the CBA. Finally, the Union asserts that, regardless of the
characterization of the mid-term Agreement, ZF Boge
breached the CBA before its term, entitling the Union
to specific performance and damages.
We review the entry of summary judgment de novo,
construing all facts and drawing all reasonable inferences
in favor of the nonmoving party, here, the Union. Righi
v. SMC Corp., 632 F.3d 404, 408 (7th Cir. 2011). Sum-
mary judgment is appropriate “if the movant shows
that there is no genuine dispute as to any material fact
and the movant is entitled to judgment as a matter
of law.” Fed. R. Civ. P. 56(a).
No. 10-2528 9
A.
The district court concluded that the mid-term Agree-
ment was a modification, intended to expire with the
CBA. According to the Union, the district court over-
stepped its bounds and resolved factual disputes in
favor of ZF Boge to reach that conclusion.
We begin with basic principles. The proper interpreta-
tion of a contract is ordinarily “a matter of law, and where
there is no contractual ambiguity, there is no resort to
extrinsic evidence, hence no factual dispute to preclude
summary judgment.” Diehl v. Twin Disc, Inc., 102 F.3d
301, 305 (7th Cir. 1996) (citation omitted). In interpreting
collective bargaining agreements in suits under sec-
tion 301 of the Labor Management Relations Act, we
employ federal law. Textile Workers Union v. Lincoln
Mills, 353 U.S. 448, 456-57 (1957). We approach our in-
terpretive task in the collective bargaining agreement
context “in the same way we approach other contracts.”
Int’l Bhd. of Elec. Workers, Local 176 v. Balmoral Racing Club,
Inc., 293 F.3d 402, 405 (7th Cir. 2002). “The starting point
in our inquiry is naturally the language of the [a]gree-
ment” itself, id., and we proceed to consider the agree-
ment’s structure, see Westinghouse Elec. Corp. v. NLRB, 809
F.2d 419, 422 (7th Cir. 1987) (noting that questions of
contract interpretation are “settled by examining the
language, structure, history, and functions of the con-
tract”). Further, “a document should be read as a whole
with all its parts given effect, and related documents must
be read together.” Bland v. Fiatallis N. Am., Inc., 401 F.3d
779, 783 (7th Cir. 2005) (stating federal principles of
contract interpretation).
10 No. 10-2528
The language of the mid-term Agreement is silent
about its duration. It provides dates of implementation
of the new terms, many of which hinged on the date of
“an official announcement regarding the consolidation
plan,” R.1, Ex. A at 8. However, the mid-term Agreement
has no date of expiration. The only provision that hints
at any duration whatsoever is the final note in the Agree-
ment, which indicates that the newly negotiated terms
would “not be subject to change in the next contract
negotiations.” Id.
Although the language of the mid-term Agreement
gives us little help in resolving the issue before us, its
structure is of significant help and leaves little doubt
that it is intended as a modification to the existing CBA.
As we noted earlier, the provisions of the mid-term
Agreement are set forth, topic-by-topic, with the “Present
Language” under the existing CBA in one column and
the “Proposed Language”—the newly negotiated term—
in the adjacent column. R.1, Ex. A at 1-4. Presented in
this manner, the new provisions are straightforward
amendments to existing contractual terms; the clear
intent of this structure was to alter specific provisions
of the existing contract without doing violence to any of
the unchanged terms of the then-existing CBA, including
its expiration date.2 Further, the mid-term Agreement
2
Two of the terms have slight variations to this structure.
First, the move to a biweekly, direct-deposit payroll sets “Past
Practice” of weekly pay against the “Future Practice” of the
newly negotiated term. R.1, Ex. A at 5. Second, the addition of
(continued...)
No. 10-2528 11
explicitly provides that, if Paris is not the chosen facility,
the Paris plant “will continue to operate under the old
UAW contract.” Id. at 8 (emphasis added). The plant could
not continue to operate under an expired contract that
no longer bound the parties.
The Union relies heavily on the mid-term Agreement’s
limitation on renegotiation of the new terms during the
next round of bargaining. In the Union’s view, because
this obligation persisted beyond the date of expiration
of the CBA, the mid-term Agreement and the specific
obligation to maintain the Paris facility after consolida-
tion also carried independent and longer-lasting signifi-
cance. The Union believes that this term demonstrates
that, even if the contract is primarily a modification to
the CBA, it also has the force of a stand-alone agree-
ment, unencumbered by the duration clause of the
CBA. Although the Union’s position on this language
has some initial appeal, the real significance of this lan-
guage is that it demonstrates that the parties formulated
the mid-term Agreement on the premise that their
future relationship would be governed by a future CBA.
Indeed, the fact that the 2007 terms were not open to
negotiation is rendered meaningless without a succes-
sive CBA in which those terms would have continued
2
(...continued)
employees to the bargaining unit apparently had no term in
the CBA to modify, so it is set forth simply as a new term. Id.
at 6. These small differences in structure for these specific
terms do not detract from the overall structure of term-by-
term modification against the original CBA.
12 No. 10-2528
to operate. The underlying promises do not, of their
own force, bind the parties outside of the context of the
CBA that they modified.
Consequently, we agree with the district court that
the proper interpretation of the mid-term Agreement is
a term-by-term modification of the existing CBA that
leaves all unaltered terms—including the duration
clause—of the CBA intact.
B.
The Union also submits that, even if the mid-term
Agreement is considered a modification of the pre-
existing CBA, its terms should be construed as carrying
obligations that continued past its expiration. Essentially,
in the Union’s view, even if the CBA as modified by the
mid-term Agreement expired, the right to have the
Paris plant maintained over Hebron vested the moment
that ZF Boge announced the initial decision and began
operating under the concessions. The Union argues that
it is entitled to have Paris maintained over Hebron past
the expiration date of the CBA.
A contract with a defined expiration may create obliga-
tions that extend past the expiration date. See Litton
Fin. Printing Div. v. NLRB, 501 U.S. 190, 207 (1991)
(“[C]ontractual obligations will cease, in the ordinary
course, upon termination of the bargaining agreement.
Exceptions are determined by contract interpretation.
Rights which accrued or vested under the agreement will,
as a general rule, survive termination of the agreement.”);
No. 10-2528 13
Bidlack v. Wheelabrator Corp., 993 F.2d 603, 606 (7th Cir.
1993) (en banc) (“Sometimes, however, a contract creates
entitlements that outlast it.”). The Union contends that
the right to have the Paris facility survive the consolida-
tion accrued when ZF Boge implemented the conces-
sions, which, by the mid-term Agreement’s terms, were
not to be implemented unless Paris was “the plant
chosen to remain in operation after the consolidation.”
R.1, Ex. A at 8 (emphasis added). Because the parties
agree that the consolidation was expected to be a multi-
year process, the Union believes that the obligations
under the mid-term Agreement also were intended to
exceed the term of the CBA. The Union characterizes
the condition that Paris remain open a “durationally
unlimited commitment” and contends that, if ZF Boge
intended otherwise, it should have negotiated specific
language to limit that condition. Appellant’s Br. 22-23.
We do not believe that the mid-term Agreement sup-
ports this interpretation. “Courts are reluctant to inter-
pret contracts providing for some perpetual or unlimited
contractual right unless the contract clearly states that
that is the intention of the parties.” William B. Tanner Co.
v. Sparta-Tomah Broad. Co., 716 F.2d 1155, 1159 (7th Cir.
1983) (applying Wisconsin law, but citing 3 A. Corbin,
Corbin on Contracts § 553 (1960), for this general prop-
osition). In any event, it is reasonable to expect that the
parties would have provided explicitly for an unlimited
duration for the obligation to maintain Paris if such
were the intent of the bargain. It is not a reasonable
interpretation of this instrument to view the obligation
as continuing. Indeed, the specific concessions were
14 No. 10-2528
given only a limited extension beyond the expiration of
the CBA, and that extension explicitly was noted; it is
illogical that the parties would intend the instrument to
bind ZF Boge to the Paris facility for a much longer
term—indeed, an indefinite one—by its silence when it
had been explicit about the much shorter obligation
regarding the concessions.
This situation differs significantly from the example of
a contract with promises surviving beyond its duration
that we presented in Bidlack v. Wheelabrator Corp., 993 F.2d
603 (7th Cir. 1993) (en banc). There, we posited that an
employee with an employment contract fixing wages
might be discharged before the end of a pay period, thus
terminating the contract. We noted the ordinary rule
that “when a contract expires, it[]expires. It is at an end.”
Id. at 606. We wrote, however, that, “quite apart from
any statutory entitlement that employees may have to
be paid at the agreed rate for work actually done, the
employee would have a compelling argument that the
employer’s promise to pay for work actually done had
survived the expiration of the contract.” Id. (citation
omitted). In the Bidlack example, the employees accrued
a right to payment during the contract’s term, but, during
that term, received nothing. By contrast, here, the Union
and its members did not receive a right to some future
benefit unfulfilled during the term of the contract.
Rather, they provided ZF Boge with the concessions in
exchange for the benefit of the bargain that they received
within the mid-term Agreement’s term: The decision to
close the Hebron facility and to leave the Paris facility
open was made, and the execution of that decision was
No. 10-2528 15
undertaken. The result was an additional year of sur-
vivability at the Paris facility. The Union’s claim that
considering the duration of the mid-term Agreement
limited to the term of the CBA amounts to requiring the
Union to give concessions for the mere empty words of
ZF Boge simply is not supported by the undisputed
facts of the record.3
C.
Finally, we are convinced that the contract contains
no latent ambiguity, that is, an ambiguity that becomes
apparent only in consideration of the surrounding cir-
cumstances. See Pastor v. State Farm Mut. Auto. Ins. Co.,
487 F.3d 1042, 1046 (7th Cir. 2007) (defining a latent
ambiguity). Whether an ambiguity exists is a question
of law reviewed de novo. Illinois Conf. of Teamsters &
3
The Union concludes its opening brief with a short argument
that the mid-term Agreement was breached during its term
because ZF Boge failed to render full performance prior to
the expiration of the CBA. This argument is without merit.
Nothing in the mid-term Agreement suggests that ZF Boge
was required to consolidate at all, as the Union repeatedly
has acknowledged. The only requirement was that if a decision
to consolidate was made, Paris must be chosen over Hebron.
During the mid-term Agreement’s term, such a decision was
made, and the Company began to consolidate at Paris. There
is no suggestion that, during the term of the mid-term Agree-
ment, ZF Boge did anything to reverse that. That change
occurred only after the conclusion of the CBA and after the
failure to reach a new agreement.
16 No. 10-2528
Emp’rs Welfare Fund v. Mrowicki, 44 F.3d 451, 459 (7th
Cir. 1994).
Extrinsic evidence as to meaning should be put before
the trier of fact only after the court determines that the
evidence creates an ambiguity. AM Int’l, Inc. v. Graphic
Mgmt. Assocs., Inc., 44 F.3d 572, 575-77 (7th Cir. 1995)
(stating Illinois rule and applying it as a matter of federal
common law); see also Rossetto v. Pabst Brewing Co., 217
F.3d 539, 546 (7th Cir. 2000) (applying practice in inter-
pretation of a collective bargaining agreement). More-
over, “[a]lthough extrinsic evidence is admissible to
show that a written contract which looks clear is actually
ambiguous, perhaps because the parties were using
words in a special sense, there must be either contractual
language on which to hang the label of ambiguous or
some yawning void . . . that cries out for an implied
term. Extrinsic evidence should not be used to add terms
to a contract that is plausibly complete without them.”
Bidlack, 993 F.2d at 608 (citation omitted).
The extrinsic evidence offered by the Union in support
of its interpretation is insufficient to create such an am-
biguity. The Union’s evidence of context to support its
interpretation of the contract consists primarily of the
facts that its members had to be induced to the bar-
gaining table and that contemporaneous statements by
ZF Boge’s management team indicated that the conces-
sions would not take effect unless Paris was chosen to
remain open after consolidation. But these facts add little
beyond what is apparent from the face of the 2007 Agree-
ment itself and say nothing about any understanding of
No. 10-2528 17
the parties, explicit or implicit, regarding the duration
of obligations. We already have interpreted those terms
as indicating that the 2007 Agreement was a modifica-
tion of the existing CBA.
Conclusion
Because the district court, as a matter of law, correctly
interpreted the mid-term Agreement to be a modification
to the CBA that did not create an indefinite obligation
to maintain the Paris plant following a consolidation,
we affirm the judgment of the district court.
A FFIRMED
8-19-11