An evergreen clause in the collective bargaining agreement between Wood County Telephone Company and one of its unions provided that the CBA “shall automatically continue in full force and effect after [its original expiration date] until terminated by sixty (60) day written notice given by either party”. The expiration date was July 5, 2003. By a letter dated May 1, 2003, the Union notified the Employer of its “desire to reopen this Agreement and to negotiate on wages, hours and conditions of employment for a successor agreement.” Negotiations lasted for a year, and on May 4, 2004, the parties ratified a new agreement.
This litigation arises from events in March 2004, when the Employer fired one member of the bargaining unit and disciplined another. The Union filed grievances, which were handled under the terms of the old agreement. When the grievances could not be resolved to mutual satisfaction, the Union proposed to arbitrate; the Employer refused, asserting that the old agreement (which like the new one contained an arbitration clause) had expired on July 5, 2003. This surprised the Union, for until then both sides had acted as if the old agreement remained in force: the Employer paid the wages and fringe benefits provided by the old agreement, deducted union dues under the old agreement’s union-security clause, paid union stewards for the time they devoted to adjusting grievances, and so on. A dues checkoff is lawful only when expressly authorized in writing. 29 U.S.C. § 158(a)(3), § 186(c)(4). We have treated a continuing dues checkoff as an employer’s acknowl-edgement that a collective bargaining agreement remains in force. See
United States Can Co. v. NLRB,
“Reopen” and “terminate” are different ideas as well as different words. Preserving that difference enables parties to negotiate a new bargain while the old one remains in force. Allowing an agreement to persist is the point of an evergreen clause (which is to say, an automatic rollover clause). The parties’ old agreement had a no-strike, no-lockout clause. Keeping that CBA in force while the parties negotiate for a replacement reduces the risk of labor strife and lost productivity. If the Employer thought that this would afford the Union too cushy a position — for while the old agreement lasted labor could hold out for better terms without a risk that the employer would demand givebacks — it had only to give its own notice of termination. What we cannot see is any reason why this evergreen clause should be read to prevent dickering while the old terms continue. Yet that is the upshot of the district court’s approach: even if neither side wants the old agreement to end, it does so automatically whenever negotiations for a replacement begin.
Using the word “reopen” instead of “negotiate” does not convey a desire to end the current deal
now,
as opposed to later when the bargaining has been concluded. Some CBAs allow mid-term renegotiation at either side’s request; such a provision is called a “reopener.” For example, if such a CBA had a four-year term, with a reo-pener that could be exercised at the end of two years, then either side would be obliged, to bargain on the other’s demand — but the exercise of this privilege would not bring the whole agreement to an
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end after two years. See
NLRB v. Cook County School Bus, Inc.,
If there were doubt about whether the Union had used the word “reopen” to mean “terminate,” then the district judge might have turned to parol evidence. (The letter’s quotation from § 2001 of the old contract, which contained the termination clause, might have been a ground to treat the letter as ambiguous.) But there is no need for a trial on that score, because all of the extrinsic evidence points one way. The author of the Union’s letter of May 1, 2003, testified by affidavit that he deliberately avoided the word “terminate” when setting new collective bargaining in motion, so that the old agreement would persist during the negotiations.
When granting summary judgment for the Employer, the district court relied principally on
Baker v. Fleet Maintenance, Inc.,
Fleet Maintenance
dealt with an evergreen clause more like the one in our parties’ contract. It said that the agreement continues “unless written notice of desire to cancel or terminate the Agreement is served by either party upon the other at least sixty (60) days prior to date of expiration.”
Let us come back to the Employer’s conduct. It has not attempted to show any detrimental reliance on a belief that the agreement ended on July 5, 2003. How could it, after it had followed the old agreement to the letter, just as if it remained in force, until rebuffing the Union’s demand for arbitration? One provision that the Employer implemented was the union-security clause, under which it deducted the workers’ union dues from their pay and remitted this money to the Union. That is lawful
only
when authorized by express writings, 29 U.S.C. § 158(a)(3), § 186(c)(4), so the agreement must have continued during the negotiations. The Employer contests this inference, relying on
Joint Executive Board of Las Vegas v. NLRB,
Joint Executive Board of Las Vegas
does not persuade us to abandon our decision in
United States Can.
The ninth circuit recognized that it was going against a position long followed by the National Labor Relations Board — a position that we discussed and applied in
United States Can
— -but said that it just could not understand the basis of the Board’s distinction between dues checkoffs and other terms and conditions of employment. Why must the checkoff cease while all other terms and conditions must continue? We have no similar problem understanding the basis of the Board’s rule. It is § 158(a)(3), which distinguishes between checkoffs and other terms, subjecting checkoffs alone to an express-contractual-authorization requirement. The idea behind this statute is that wages are the employees’ money, which may be handed over to a third party such as a union only with the employees’ consent. If the contract expired on July 5, 2003, the consent expired with it unless the employees gave or reiterated their permission individually. The Labor Board has concluded that the required written consent may be personal as well as collective, and that personal consent may survive the expiration of a CBA. See
Lowell Corrugated Container Corp.,
If the doctrine requiring employers to afford workers all terms of the
status quo
until a new contract (or an impasse) has been reached were one that extended the length of the contract, then § 158(a)(3) and § 186(c)(4) would not come into play. But this is not how the unilateral-change doctrine of labor law works. If it did, then
all
terms of a contract would carry forward— and, in particular, the arbitration clause of the old agreement would itself continue to govern in March 2004. But it does not; the Supreme Court held in
Litton Financial Printing Division of Litton Business Systems, Inc. v. NLRB,
Although an employer must keep in force all terms and conditions that are within its unilateral power, “other contractual obligations will cease, in the ordinary course, upon 'termination of the bargaining agreement.”
Litton,
The judgment is reversed, and the case is remanded with instructions to enter a judgment requiring the Employer to arbitrate these grievances.
