[PUBLISH]
IN THE UNITED STATES COURT OF APPEALS
FOR TH E ELEV ENTH C IRCUIT
____________________________
FILED
U.S. COURT OF APPEALS
ELEVENTH CIRCUIT
No. 02-12277
JUNE 2, 2003
____________________________
THOMAS K. KAHN
CLERK
D. C. Docket No. 01-06250-CV-KMM
DISTRICT NO. 1 - MARINE ENGINEERS
BEN EFIC IAL A SS'N , AFL -CIO ,
Plaintiff- Appe llee,
versus
GFC CRA NE C ONS ULT ANT S, INC .,
Defen dant-A ppellant.
____________________________
Appe al from th e United States D istrict Cou rt
for the Southern District of Florida
____________________________
(June 2, 2003)
Before BIRC H, DUB INA and K RAVIT CH, Circuit Judges.
BIRCH, Circuit Judge:
In this case, we must decide whether a continuation clause in a collective
bargaining agreement, which is textually applicable only to proposed modifications
of the ag reemen t, should neverth eless be ap plied to ter mination s of the ag reemen t.
The district court, in ordering compulsory arbitration of the grievances of two
discharged employees, held that the contract continued in force even after
termination. We REVERSE.
I. BACKGROUND
G.F.C Crane C onsultants, Inc. (“GFC”), as part of its business, maintains,
operates, and repairs cranes of the Port Everglades Authority in Florida, and hires
union workers to accomplish that end. On 16 August 1995, GFC and the union,
District No. 1, Marine Engineers Beneficial Association, AFL-CIO (“MEB A”),
entered into a collective bargaining agreement (“CBA”) that purported, among
other things, to provide an “orderly and peaceful procedure in the settlement of
differences” between employer and employee. R2-39, Ex.1 at § 1.1. An employee
with a g rievance must firs t approa ch the sen ior port e ngineer , who m ust respo nd to
the griev ance w ithin five d ays. If the employe e or the u nion is n ot satisfied with
the senior port engineer’s resolution of the grievance, then either may bring the
grievance to the attention of the company, GFC, which will meet with the
employee and the union representative in an attempt to resolve the problem. If the
decision reached by the company following such meeting is unacceptable to the
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union, then the dispute is submitted to final, binding arbitration.
The collective bargaining agreement spanned a five-year term, set to end on
14 Au gust 20 00. Af ter that five -year term , the agree ment w ould be automa tically
renewed on a year-to-year basis “unless either [MEBA or GFC] shall notify the
other, in writing, . . . that it desires to modify [the] Agreement.” Id. at § 36.1. If a
modification is proposed, then the parties retire to negotiations, during which time
“[t]he term s of the A greeme nt at the tim e of notic e to mod ify was g iven sha ll
continue in effect until mutual agreement on the proposed modifications or an
impasse has been reached .”1 Id. This type of provision, which we will refer to as
a “continuation clause,” serves to bridge the gap during renegotiations of labor
contracts or prov ide for an extensio n of con tract prov isions fo llowing terminatio n.
In the agreement between GFC and MEBA, there is no explicit mention in the
1
The full text of the clause is reproduced below:
ARTICLE 36
TERM OF AGREEMENT
36.1 The provisions of this Agreement shall become effective from August 14,
1995, and shall remain in full force and effect until August 14, 2000. It
shall automatically be renewed from year to year thereafter unless either
party shall notify the other, in writing, at least sixty (60) days prior but no
sooner than ninety (90) days prior to the expiration or anniversary date,
that it desires to modify this Agreement. In the event that such notice is
given, negotiations shall begin not later than thirty (30) days prior to the
expiration or anniversary date. The terms of the Agreement at the time of
notice to modify was given shall continue in effect until mutual agreement
on the proposed modifications or an impasse has been reached.
3
“continuation clause” or anywhere else in the agreement of the procedure to follow
for termination, as opposed to modification, of the agreement, and it is around that
omission that the current litigation rages.
As no ted abov e, the orig inal five-y ear term o f the agre ement w as set to
expire on 14 August 2000. MEBA properly notified GFC of its wish to modify the
agreement on 16 May 2000. In respo nse, GF C sent n otice on 3 0 May 2000 th at it
was terminating the agreement as of the original expiration date, but that it was
available for negotiations on the subject of an entirely new ag reement. Given these
revelations, the parties agreed in writing to extend the terms of the agreement for
another thirty days, to 13 September 2000,2 and to commence n egotiations. These
negotiatio ns bega n in Sep tember a nd con tinued through the end o f the year. On 21
January 2001, GFC declared bargaining to be at an impasse.
During the course of these negotiations and according to the grievance
provisions in the original collective bargaining agreement, MEBA lodged
complaints with GFC concerning employee issues that arose after 13 September
2000, including the termination of tw o port engineers. GFC den ied the grievances,
and M EBA attempted to start arb itration. GFC , howe ver, refu sed to arb itrate.
2
The operative text of the extension agreement provided that “[t]he Agreement between
GFC Crane Consultants, Inc. and District No. 1, MEBA (AFL-CIO) dated August 14, 1995
through August 13, 2000 is hereby extended to 12:01 a.m. on September 13, 2000 by mutual
agreement of the parties.” R2-44 at 3.
4
According to GFC, its notice of termination would have ended the agreement on 14
Augu st 2000 , the end o f the orig inal five-y ear term. G FC co ntends th at althoug h it
agreed to extend the terms of that agreement for a month, until 13 September 2000,
after that d ate the agr eement’s arbitration provisio ns wer e no lon ger in eff ect.
MEBA filed a complaint in the United States District Court for the Southern
District o f Florid a, seeking to comp el GFC to subm it the griev ances to a rbitration .
MEBA and GFC both filed motions for summary judgment. The district court
ruled for MEBA and ordered that arbitration should be held per the collective
bargaining agreement. Adopting MEBA’s argument, the district court reasoned
that a notice for modification of the agreement and an impasse in negotiations over
that mod ification w ere prere quisites fo r discon tinuation of the ag reemen t’s terms.
According to the district court, GFC’s notice of termination operated as the
functional equivalent of a notice to modify and therefore had the effect of
continuing the agreement during negotiations until a new agreement or im passe
was rea ched. G FC ap peals that d ecision to this cour t.
II. DISCUSSION
A. Standard of Review
A district court’s grant of summary judgment is reviewed de novo, and, as
in the district court, all evidence is viewed in the light most favorable to the non-
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movin g party. Adams v. Poag, 61 F.3 d 1537 , 1542 ( 11th C ir. 1995 ).
B. Functio nal Equ ivalence o f Notice s to Mo dify and Notices to
Termin ate
Accor ding to G FC, the continu ation clau se in the ag reemen t operated to
continue the terms of the agreement through modification discussions, but had no
effect if one party chose to terminate. GFC points to the plain language of the
clause, which states that “[t]he terms of the Agreement at the time of notice to
modify was given shall continue in effect until mutual agreement on the proposed
modifications or an im passe ha s been re ached.” R 2-39, E x. 1 at § 3 6.1 (em phasis
added). MEBA argues, as it did to the district court, that the contractual
continuation provision covered both notices of modification and notices of
termination, based on the similar effects each type of notice would have under the
federal lab or law p aradigm .
To bo lster its interp retation, M EBA invoke s the pres umptio n of arb itrability
with which courts must examine arbitration provisions in collective bargaining
agreements. Section 301 of the Labor Management Relations Act, codified at 29
U.S.C. § 185, authoriz es federa l courts to create a bo dy of fed eral labor law to
govern the interpretation and enforcem ent of collective bargaining agreements,
consistent with, among other goals, the clear congressional policy in favor of
agreem ents to arb itrate labor disputes . See Textile Workers Union of America v.
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Lincoln Mills of Ala., 353 U .S. 448 , 455, 45 8-59, 7 7 S. Ct. 9 12, 917 , 919 (1 957).
Before ordering specific perform ance of an agreement to arbitrate, we m ust first
determin e wheth er the par ties have a greed to arbitrate th e particula r matter at is sue.
See Refinery Employees Union v. Continental Oil Co., 268 F.2d 447, 452 (5th Cir.
1959) . In proc eeding w ith this ana lysis, “there is a presum ption of arbitrability in
the sense that an order to arbitrate the particular grievance should not be denied
unless it may be said with positive assurance that the arbitration clause is not
susceptible of an interpretation that covers the asserted dispute.” Wright v.
Universal Mar. Serv. Corp., 525 U.S. 70, 78, 119 S. Ct. 391, 395 (1998) (citations
and inter nal quo tations om itted).
However, it is with the positive assurance requisite for overcoming the
presumption of arbitrability that we say that notices of modification and notices of
terminatio n are tw o differe nt creatur es in this p articular co ntract. Notices to modify
and notices to terminate are not equivalent except in the face of contractual
language that equates those types of notice. “[T]ermination and changes are
different things.” Local Union No. 28, IBEW v. Maryland Chapter Nat’l Elec.
Contractors Ass’n, 194 F. Supp. 494, 501 (D. Md. 1961). W e must decline, even
in the face of the arb itrability pre sumptio n, to interc hange te rms that h ave sepa rate
meanin gs, even if they hav e similar ef fects.
7
Under either type of notice, the NLRA requires the parties to the agreement
to nego tiate in goo d faith w ith the end of reach ing a new agreem ent, and c ertain
terms of the contr act wou ld be statu torily con tinued d uring th ose neg otiations. See
29 U.S .C. § 15 8(a)(5) , (d); Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 206,
111 S. Ct. 2215, 2225 (1991). Most terms and conditions of employment that are
mandatory subjects of bargaining survive by virtue of this statutory continuation
effect and cannot b e chang ed unilate rally until n egotiation s have re ached im passe.
Litton, 501 U.S. at 205-06, 111 S.Ct. at 2225. However, the fact that notices of
termination and notices of modification have a similar effect under the statute does
not necessarily mean that they should have a similar effect under a particular
contract provision. Parties are free to construct contractual continuation provisions
that go beyond the reach of the statutory continuation effect in order to enforce
other provisions past the effective date of the CBA. In fact, MEBA is arguing that
the contractual continuation provision extends continuation to the arbitration
provisio ns of the contract, w hich w ould no t be contin ued un der the sta tute.
Although a mandatory subject of bargaining, the Supreme Court has held that
grievance arbitration obligations end upon expiration of the CBA unless the parties
have ag reed oth erwise. Litton, 501 U .S. at 205 -07, 11 1 S.Ct. 2 115, 22 25-26 ; see
also Nolde Bros., Inc. v. Local No. 358, Bakery & Confectionary Workers Union,
8
430 U.S. 243, 250, 97 S. Ct. 1067, 1071-72 (1977). Obviously, these two types of
notice, though with similar effects under the statute, may have radically different
effects un der the str ucture an d langu age of a C BA, an d, therefo re, we d ecline to
treat them identically u nder a co ntract to h ow w e wou ld unde r the statute .
Just because two types of notice have similar effects under federal labor law
does not mean that the two types of notice should have similar effects under a
contract w hich spe cifically inclu des one of those types of n otice and fails to
mention the other type of n otice at all. Accordingly, we hold that, where a
collective bargaining agreement contains a continuation clause triggered by notice
of modification, but is silent as to the effect of a notice of termination, the
continuation clause does not include the latter in the absence of compelling
evidence to the contrary.
The case relied upon by MEBA and the district court to find these two types
of notice to be “functionally equivalent” is inapposite. In Kaufman & Broad Home
Sys., Inc. v. International Brotherhood of Firemen, 607 F.2d 1104, 1106 (5th Cir.
1979), the contract stated that “[t]his Agreement . . . shall remain in effect [and
renew yearly] . . . , with the provision that should either party desire to termin ate
this Ag reemen t or to modify any part th ereof, it sh all notify th e other p arty in
writing.” (emphasis added). The union in Kaufman gave pr oper no tice that it
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wished to modify the Agreement. Later, the union argued that the notice of
modification prevented automatic renewal of the agreement, based on the language
quoted above. The company contended that a notice of termination would prevent
renew al, but that a notice of modific ation w as qualitativ ely differe nt. The F ifth
Circuit fo und tha t “the structure of the clause is such that notice to terminate and
notice to modify are functionally equivalent in the extension clause,” id. at 1109
(emph asis adde d), and h eld that the notice of modific ation pre vented r enewa l.
Modification and termination were “functionally equivalent” in Kaufman
because the language of the agreement gave no extra weight or effect to one or the
other. Id. But, as recognized by the court in Kaufman, when the agreement
distinguishes between modification and termination, for example, “[i]f an
agreement only provides for notice to terminate,” then, “it cannot reasonably be
assumed that a notice to modify should have the same effect. Similarly, where the
contract states the precise effect of a notice to modify, courts should enforce the
provision as written.” Id. at 1111 (citation omitted).
C. Permanence of T riggered Continuation Clause
At oral argument, MEBA offered an alternative theory whereby the
contractual continuation clause should be given e ffect under these circumstances.
MEBA contends that its notice of modification clearly triggered the contractual
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continuation clause, and the language of that clause precluded GFC from stopping
the continuation effect unless it reached a new agreement with MEBA or declared
impasse. According to the agreement, “[t]he terms of the Agreement at the time of
notice to modify was given shall continue in effect until mutual agreement on the
propo sed mo dification s or an im passe ha s been re ached.” R 2-39, E x. 1 at § 3 6.1.
MEBA believes that this language clearly states two exclusive conditions for
ending continuation once a notice to modify has been tendered, and a notice of
terminatio n is not o ne of tho se cond itions.
Federal labor law provides a statutory right of termination, of which GFC
has taken advanta ge in this c ase. See 29 U.S.C. § 158(d). 3 Though the parties to a
3
That section states in relevant part:
[W]here there is in effect a collective-bargaining contract covering
employees in an industry affecting commerce, the duty to bargain
collectively shall also mean that no party to such contract shall terminate or
modify such contract, unless the party desiring such termination or modification–
(1) serves a written notice upon the other party to the contract of the
proposed termination or modification sixty days prior to the expiration date
thereof, or in the event such contract contains no expiration date, sixty days
prior to the time it is proposed to make such termination or modification;
(2) offers to meet and confer with the other party for the purpose of
negotiating a new contract or a contract containing the proposed
modifications;
(3) notifies the Federal Mediation and Conciliation Service within thirty days
after such notice of the existence of a dispute, and simultaneously therewith
notifies any State or Territorial agency established to mediate and conciliate
disputes within the State or Territory where the dispute occurred, provided
no agreement has been reached by that time; and
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CBA could restrict the ability of a party to terminate the agreement, the contract
between GFC and MEBA is wholly silent on the issue of termination. MEBA
argues that, even with this absence of restriction, the contractual continuation
clause can prevent GFC from terminating and receiving the benefits of statutory
termination. We disagree.
A notice of statutory termination results in a similar effect as a notice of
modific ation un der the ag reemen t in this case : the parties are requ ired by sta tute to
negotiate in good faith, and certain provisions of the preexisting agreement are
continued.4 Once the termination becomes effective, existing contractual terms do
not have force by virtue of the contract, in the absence of explicit contractual
language to the contrary, but rather by virtue of the statutorily-based continuation
effect em bodied by the “un ilateral chan ge” doc trine. Litton, 501 U.S. at 206, 111
S. Ct. at 2225 (1991).
(4) continues in full force and effect, without resorting to strike or lock- out,
all the terms and conditions of the existing contract for a period of sixty days
after such notice is given or until the expiration date of such contract,
whichever occurs later.
29 U.S.C. § 158(d). This section authorizes both notices of termination and notices of
modification, but because modification rules are provided in the agreement between GFC and
MEBA, only the termination authorization is relevant.
4
Pre-termination, all terms of the existing agreement must be continued for sixty days
from date of notice of termination, or until actual termination of the agreement, whichever
comes later. 29 U.S.C. § 158(d)(4). This effect is not the statutory continuation effect on which
we focus in the text. Rather, we focus on the boundaries of the post-termination relationship
between the parties, and, specifically, which terms of the agreement are carried over post-
termination to preserve the status quo.
12
Here, the triggered contract clause was to continue the terms of the
agreement until the parties reached an agreement on the modification proposals or
impasse was reached on those modification proposals. By statutorily terminating,
GFC made those contract-based modification negotiations, and, by extension, the
contract c ontinua tion claus e, moot.
If the modification negotiations were not moot, and we were to accept
MEBA’s interpretation of the continuation clause, GFC would be denied by
implicatio n the full p anoply o f effects flo wing f rom its sta tutory rig ht to term inate
the agreement. Under the “unilateral change” doctrine, when an existing
agreement has expired and negotiations on a new agreement have yet to be
completed, a unilateral change in those terms and conditions of the agreement that
are subject of mandatory bargaining under the NLRA constitutes a breach of the
statutory r equirem ent of go od faith. See NLR B v. K atz, 369 U.S. 736, 743, 82 S.
Ct. 1107, 1111 (1962). Therefore, no unilateral changes in those terms of the
agreem ent, even after exp iration, is ap propria te unless im passe ha s been re ached in
negotiations. However, this statutory continuation effect is not as comprehensive
as the con tractual co ntinuatio n effect trig gered in this case. P ost-term ination, a
party may alter the method of dispute resolution, at least as to those claims arising
post-term ination. See Litton, 501 U.S. at 205-06, 111 S. Ct. at 2225. A party may
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refuse to abide by the strike or lockout provisions in the agreement, to the same
extent tha t other term s of disp ute resolu tion are n ot contin ued. See id. at 199, 111
S. Ct. at 2222.
Under the circumstances of this case, to enforce a triggered contractual
continuation clause even after proper statutory termination is to deny GFC the
benefits arising from statutory termination, including, most importantly, a different
and less- inclusive statutory c ontinua tion polic y. Deny ing GF C the rig ht to
unilaterally alter certain terms of the agree ment, inc luding te rms of d ispute
resolution covering disputes arising after contract termination, and terms restricting
its right to lock out employees, denies GFC its rightful bargaining position under
federal lab or law. The termination right, like all rights granted by statute, may not
be waiv ed excep t by clear, ex plicit langu age. See Metropolitan Edison Co. v.
NLRB, 460 U.S. 693, 708, 103 S. Ct. 1467, 1477 (1983) (“[W]e will not infer from
a genera l contractu al provis ion that th e parties in tended to waive a statutorily
protected right unless the undertaking is ‘explicitly stated.’ More succinctly, the
waiver must be clear and unmistakable.”). The type of inference that MEBA
sugges ts we m ake from the text of the contin uation cla use to eff ect a waiv er is
exactly the sort of imprecise language to which we cannot attribute waiver.
For both of its arguments, MEBA’s position is also undermined by the
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execution of the 30-day extension agreement by the parties when faced with a
loomin g termin ation date. If the mo dification /continu ation clau se was to
effectively continue the agreement, then there was no need for the parties to enter
into a separate extension agreement. MEBA’s argument that the extension
agreem ent was executed only for addition al security is speciou s.
We therefore agree with GFC that three options were available to the parties
under the agreement as the automatic renewal date approached: (1) they could let
the day pass, and the original agreement would be automatically renewed for a
one-yea r period ; (2) a par ty could g ive notice of its wis h to mo dify the ag reemen t,
which would prompt negotiations, during which the terms of the original
agreement would be carried over until impasse was reached, and, according to the
agreement, potentially disastrous bargaining tactics, including strikes and lockouts,
would be curtaile d strictly; or (3) a par ty could g ive notice of its inten t to termin ate
the agreement, which would result in a termination on the expiration date, followed
by a good-faith bargaining session in which the status quo is preserved under the
“unilateral change” doctrine, and either side could employ any of the bargaining
pressur es it posse ssed, inclu ding loc kouts an d strikes. “A bstract log ical analysis
might find inconsistency between the command of the [NLRA ] to negotiate toward
an agree ment in g ood faith and the le gitimacy o f the use o f econo mic we apons . . .
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to induce one party to come to the terms desired by the other. But the truth of the
matter is that at the present statutory stage of our national labor relations policy,
the two factors – necessity for good-faith bargaining between parties, and the
availability o f econo mic pres sure dev ices to each to make the other party inclin e to
agree on one’s terms – exist side by side.” NLRB v. Insurance Agents’ Internal
Union, 361 U.S. 477, 489, 80 S. Ct. 419, 427 (1960).
III. CONCLUSION
The en d result o f our dis cussion is that GF C was not oblig ated by its
agreement with MEBA to arbitrate labor-management disputes arising after 13
September 2001. The agreement between the parties was terminated on that date,
with no arbitration terms applicable to disputes arising after termination. The
district court’s ruling to the contrary was error. Accordingly, we REVERSE.
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KRAVITCH , Circuit Judge, concurring:
In the district court’s well-reasoned order it concluded that this case turned
on whether “the parties intended to extend the terms of the agreement during
negotiations following a notice of termination, or only during negotiations
following a notice to modify.” I agree with the district court that this case turns on
the parties’ intent. Because, however, MEBA failed to present evidence to show
that the parties intended the word “modify” to mean “modify or terminate” in the
CBA ’s continuation c lause, I concur in parts I, II A, II B, and III o f the majority’s
opinion . Theref ore, altho ugh the district cou rt offered sound reasonin g for its
determin ation that a CBA continu ation clau se that exp ressly on ly require s terms to
continue after notice to modify is tendered could be interpreted to read “modify or
termina te,” I concur in the reversal because of a lack of eviden ce that the parties’
intended that mean ing in the CBA at issue in th is case. I do not con cur, how ever, in
part II C of the majority opinion, as I consider it dicta unnecessary to the disposition
of this case.
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