Subject:  LITTON FINANCIAL PRINTING DIV. v. NLRB, Syllabus



 
    NOTE: Where it is feasible, a syllabus (headnote) will be released, as
is being done in connection with this case, at the time the opinion is
issued.  The syllabus constitutes no part of the opinion of the Court but
has been prepared by the Reporter of Decisions for the convenience of the
reader.  See United States v. Detroit Lumber Co., 200 U. S. 321, 337.
SUPREME COURT OF THE UNITED STATES


Syllabus


LITTON FINANCIAL PRINTING DIVISION, A DIVI  SION OF LITTON BUSINESS
SYSTEMS, INC. v.  NATIONAL LABOR RELATIONS BOARD et al.

certiorari to the united states court of appeals for the ninth circuit

No. 90-285.  Argued March 20, 1991 -- Decided June 13, 1991

Among other things, the collective-bargaining agreement (Agreement) between
petitioner Litton and the Union representing the production employees at
Litton's printing plant broadly required that all differences as to
contract construction or violations be determined by arbitration, specified
that grievances that could not be resolved under a two-step grievance
procedure should be submitted for binding arbitration, and provided that,
in case of layoffs, length of continuous service would be the determining
factor "if other things such as aptitude and ability [were] equal."  The
Agreement expired in October 1979.  A new agreement had not been negotiated
when, in August and September 1980 and without any notice to the Union,
Litton laid off 10 of the workers at its plant, including 6 of the most
senior employees, pursuant to its decision to close down its cold-type
printing operation.  The Union filed grievances on behalf of the laidoff
employees, claiming a violation of the Agreement, but Litton refused to
submit to the contractual grievance and arbitration procedure, to negotiate
over its layoff decision, or to arbitrate under any circumstances.  Based
on its precedents dealing with unilateral postexpiration abandonment of
contractual grievance procedures and postexpiration arbitrability, the
National Labor Relations Board (Board) held that Litton's actions violated
15 8(a)(1) and (5) of the National Labor Relations Act (NLRA).  However,
although it ordered Litton, inter alia, to process the grievances through
the two-step grievance procedure and to bargain with the Union over the
layoffs, the Board refused to order arbitration of the particular layoff
disputes, ruling that they did not "arise under" the expired contract as
required by its decision in Indiana & Michigan Electric Co., 284 N. L. R.
B. 53, and its interpretation of this Court's decision in Nolde Bros., Inc.
v. Bakery Workers, 430 U. S. 243.  The Court of Appeals enforced the
Board's order, with the exception of that portion holding the layoff
grievance not arbitrable, ruling that the right to lay off in seniority
order, if other things such as aptitude and ability were equal, did arise
under the Agreement.

Held: The layoff dispute was not arbitrable.  Pp. 6-18.

    (a) The unilateral change doctrine of NLRB v. Katz, 369 U. S. 736 --
whereby an employer violates the NLRA if, without bargaining to impasse, it
effects a unilateral change of an existing term or condition of employment
-- extends to cases in which an existing agreement has expired and
negotiations on a new one have yet to be completed.  See, e. g., Laborers
Health and Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.
S. 539, 544, n. 6.  However, since Hilton-Davis Chemical Co., 185 N. L. R.
B. 241, the Board has held that an arbitration clause does not, by
operation of the NLRA as interpreted in Katz, continue in effect after
expiration of a collective-bargaining agreement.  Pp. 6-8.

    (b) This Court will not extend the unilateral change doctrine to impose
a statutory duty to arbitrate postexpiration disputes.  The Board's
Hilton-Davis Chemical Co. rule is both rational and consistent with the
NLRA, under which arbitration is a matter of consent and will not be
imposed beyond the scope of the parties' agreement.  See, e. g., Gateway
Coal Co. v. Mine Workers, 414 U. S. 368, 374.  The Board's rule is
therefore entitled to deference.  If parties who favor labor arbitration
during a contract's term also desire it to resolve postexpiration disputes,
they can draft their agreement to so indicate, to eliminate any hiatus
between expiration of the old and execution of the new agreement, or to
remain in effect until they bargain to impasse.  Pp. 8-9.

    (c) The Board's decision not to order arbitration of the layoff
grievances in this case is not entitled to substantial deference.  Although
the Board has considerable authority to structure its remedial orders to
effectuate the NLRA's purposes and to order the relief it deems
appropriate, its decision here is not based on statutory considerations,
but rests upon its interpretation of the Agreement, applying Nolde Bros.
and the federal common law of collective bargaining.  Arbitrators and
courts, rather than the Board, are the principal sources of contract
interpretation under MDRV 301 of the Labor Management Relations Act.
Deferring to the Board in its interpretation of contracts would risk the
development of conflicting principles.  Pp. 9-11.

    (d) Nevertheless, as Nolde Bros. recognized, a postexpiration duty to
arbitrate a dispute may arise from the express or implied terms of the
expired agreement itself.  Holding that the extensive obligation to
arbitrate under the contract there at issue was not consistent with an
interpretation that would eliminate all duty to arbitrate upon expiration,
Nolde Bros., supra, at 255, found a presumption in favor of postexpira tion
arbitration of disputes unless negated expressly or by clear implication,
so long as such disputes arose out of the relation governed by contract.
Pp. 11-13.

    (e) The Agreement's unlimited arbitration clause places it within the
precise rational of Nolde Bros., such that other Agreement provisions
cannot rebut the Nolde Bros. presumption.  P. 13.

    (f) However, Nolde Bros. does not announce a broad rule that post
expiration grievances concerning terms and conditions of employment remain
arbitrable, but applies only where a dispute has its real source in the
contract.  Absent an explicit agreement that certain benefits continue past
expiration, a postexpiration grievance can be said to arise under the
contract only where it involves facts and occurrences that arise before
expiration, where a postexpiration action infringes a right that accrued or
vested under the agreement, or where, under the normal principles of
contract interpretation, the disputed contractual right survives expiration
of the remainder of the agreement.  And, as Nolde Bros. found, structural
provisions relating to remedies and dispute resolution -- e. g., an
arbitration provision -- may in some cases survive in order to enforce
duties under the contract.  It is presumed as a matter of contract
interpretation that the parties did not intend a pivotal dispute resolution
provision to terminate for all purposes upon the Agreement's expiration.
Pp. 13-16.

    (g) Application of the foregoing principles reveals that the layoff
dispute at issue does not arise under the Agreement.  Since the layoffs
took place almost one year after the Agreement expired, the grievances are
arbitrable only if they involve rights which accrued or vested under the
Agreement or carried over after its expiration.  The layoff provision here
does not satisfy these requirements and, unlike the severance pay provision
at issue in Nolde Bros., cannot be construed as a grant of deferred
compensation for time already worked.  The order of layoffs under the
Agreement was to be determined primarily with reference to "other [factors]
such as aptitude and ability," which do not remain constant, but either
improve or atrophy over time, and which vary in importance with the
requirements of the employer's business at any given moment.  Thus, any
arbitration proceeding would of necessity focus upon whether such factors
were equal as of the date of the layoff decision and the decision to close
down the cold-type operation, and an intent to freeze any particular order
of layoff or vest any contractual right as of the Agreement's expiration
cannot be inferred.  Pp. 16-18.

893 F. 2d 1128, reversed in part and remanded.

Kennedy, J., delivered the opinion of the Court, in which Rehnquist, C. J.,
and White, O'Connor, and Souter, JJ., joined.  Marshall, J., filed a
dissenting opinion, in which Blackmun and Scalia, JJ., joined.  Stevens,
J., filed a dissenting opinion, in which Blackmun and Scalia, JJ., joined.

------------------------------------------------------------------------------




Subject: 90-285 -- OPINION, LITTON FINANCIAL PRINTING DIV. v. NLRB

 


NOTICE: This opinion is subject to formal revision before publication in
the preliminary print of the United States Reports.  Readers are requested
to notify the Reporter of Decisions, Supreme Court of the United States,
Washington, D. C. 20543, of any typographical or other formal errors, in
order that corrections may be made before the preliminary print goes to
press.
SUPREME COURT OF THE UNITED STATES


No. 90-285



LITTON FINANCIAL PRINTING DIVISION, A DIVISION OF LITTON BUSINESS SYSTEMS,
INC., PETITIONER v. NATIONAL LABOR RELATIONS BOARD et al.

on writ of certiorari to the united states court of appeals for the ninth
circuit

[June 13, 1991]



    Justice Kennedy delivered the opinion of the Court.
    This case requires us to determine whether a dispute over layoffs which
occurred well after expiration of a collectivebargaining agreement must be
said to arise under the agreement despite its expiration.  The question
arises in the context of charges brought by the National Labor Relations
Board (Board) alleging an unfair labor practice in violation of 15 8(a)(1)
and (5) of the National Labor Relations Act (NLRA), 49 Stat. 449, as
amended, 29 U. S. C. 15 158(a)(1) and (5).  We interpret our earlier
decision in Nolde Bros., Inc. v. Bakery Workers.  430 U. S. 243 (1977).

I
    Petitioner Litton operated a check printing plant in Santa Clara,
California.  The plant utilized both cold-type and hottype printing
processes.  Printing Specialties & Paper Products Union No. 777, Affiliated
With District Council No. 1 (Union), represented the production employees
at the plant.  The Union and Litton entered into a collective-bargaining
agreement which, with extensions, remained in effect until October 3, 1979.
Section 19 of the Agreement is a broad arbitration provision:

"Differences that may arise between the parties hereto regarding this
Agreement and any alleged violations of the Agreement, the construction to
be placed on any clause or clauses of the Agreement shall be determined by
arbitration in the manner hereinafter set forth."  App. 34.


Section 21 of the Agreement sets forth a two-step grievance procedure, at
the conclusion of which, if a grievance cannot be resolved, the matter may
be submitted for binding arbitration.  Id., at 35.
    Soon before the Agreement was to expire, an employee sought
decertification of the Union.  The Board conducted an election on August
17, 1979, in which the Union prevailed by a vote of 28 to 27.  On July 2,
1980, after much postelection legal maneuvering, the Board issued a
decision to certify the Union.  No contract negotiations occurred during
this period of uncertainty over the Union's status.
    Litton decided to test the Board's certification decision by refusing
to bargain with the Union.  The Board rejected Litton's position and found
its refusal to bargain an unfair labor practice.  Litton Financial Printing
Division, 256 N. L. R. B. 516 (1981).  Meanwhile, Litton had decided to
eliminate its cold-type operation at the plant, and in late August and
early September of 1980, laid off 10 of the 42 persons working in the plant
at that time.  The laid off employees worked either primarily or
exclusively with the cold-type operation, and included six of the eleven
most senior employees in the plant.  The layoffs occurred without any
notice to the Union.
    The Union filed identical grievances on behalf of each laid off
employee, claiming a violation of the Agreement, which had provided that
"in case of layoffs, lengths of continuous service will be the determining
factor if other things such as aptitude and ability are equal."  App. 30.
Litton refused to submit to the grievance and arbitration procedure or to
negotiate over the decision to lay off the employees, and took a position
later interpreted by the Board as a refusal to arbitrate under any and all
circumstances.  It offered instead to negotiate concerning the effects of
the layoffs.
    On November 24, 1980, the General Counsel for the Board issued a
complaint alleging that Litton's refusal to process the grievances amounted
to an unfair labor practice within the meaning of 15 8(a)(1) and (5) of the
NLRA, 29 U. S. C. 15 158(a)(1) and (5).  App. 15.  On September 4, 1981, an
Administrative Law Judge found that Litton had violated the NLRA by failing
to process the grievances.  App. 114-115.  Relying upon the Board's
decision in American Sink Top & Cabinet Co., 242 N. L. R. B. 408 (1979),
the Administrative Law Judge went on to state that if the grievances
remained unresolved at the conclusion of the grievance process, Litton
could not refuse to submit them to arbitration.  App. 115118.  The
Administrative Law Judge held also that Litton violated 15 8(a)(1) and (5)
when it bypassed the Union and paid severance wages directly to the 10 laid
off employees, and Litton did not contest that determination in further
proceedings.
    Over six years later, the Board affirmed in part and reversed in part
the decision of the Administrative Law Judge.  286 N. L. R. B. 817 (1987).
The Board found that Litton had a duty to bargain over the layoffs, and
violated MDRV 8(a) by failure to do so.  Based upon well-recognized Board
precedent that the unilateral abandonment of a contractual grievance
procedure upon expiration of the contract violates 15 8(a)(1) and (5), the
Board held that Litton had improperly refused to process the layoff
grievances.  See Bethelem Steel Co., 136 N. L. R. B. 1500, 1503 (1962),
enforced in pertinent part, 320 F. 2d 615 (CA3 1963).  The Board proceeded
to apply its recent decision in Indiana & Michigan Electric Co., 284 N. L.
R. B. 53 (1987), which contains the Board's current understanding of the
principles of postexpiration arbitrability and of our opinion in Nolde
Bros., Inc. v. Bakery Workers, 430 U. S. 243 (1977).  The Board held that
Litton's "wholesale repudiation" of its obligation to arbitrate any
contractual grievance after the expiration of the Agreement also violated
15 8(a)(1) and (5), as the Agreement's broad arbitration clause lacked

"language sufficient to overcome the presumption that the obligation to
arbitrate imposed by the contract extended to disputes arising under the
contract and oc curring after the contract had expired.  Thus, [Litton]
remained `subject to a potentially viable contractual commitment to
arbitrate even after the [Agreement] expired.' "  286 N. L. R. B., at 818
(citation omitted).


Litton did not seek review of, and we do not address here, the Board's
determination that Litton committed an unfair labor practice by its
unilateral abandonment of the grievance process and wholesale repudiation
of any postexpiration obligation to arbitrate disputes.
    In fashioning a remedy, the Board went on to consider the arbitrability
of these particular layoff grievances.  Following Indiana & Michigan, the
Board declared its determination to order arbitration "only when the
grievances at issue `arise under' the expired contract."  286 N. L. R. B.,
at 821 (citing Nolde Bros., supra).  In finding that the dispute about
layoffs was outside this category, the Board reasoned as follows:

"The conduct that triggered the grievances . . . occurred after the
contract had expired.  The right to layoff by seniority if other factors
such as ability and experience are equal is not `a right worked for or
accumulated over time.'  Indiana & Michigan, supra at 61.  And, as in
Indiana & Michigan Electric, there is no indication here that `the parties
contemplated that such rights could ripen or remain enforceable even after
the contract expired.'  Id. (citation omitted).  Therefore, [Litton] had no
contractual obligation to arbitrate the grievances."  286 N. L. R. B., at
821-822.


Although the Board refused to order arbitration, it did order Litton to
process the grievances through the two-step grievance procedure, to bargain
with the Union over the layoffs, and to provide a limited backpay remedy.
    The Board sought enforcement of its order, and both the Union and
Litton petitioned for review.  The Court of Appeals enforced the Board's
order, with the exception of that portion holding the layoff grievances not
arbitrable.  893 F. 2d 1128 (CA9 1990).  On that question, the Court of
Appeals was willing to "assume without deciding that the Board's Indiana &
Michigan decision is a reasonably defensible construction of the section
8(a)(5) duty to bargain."  Id., at 1137.  The court decided, nevertheless,
that the Board had erred, because the right in question, the right to
layoff in order of seniority if other things such as aptitude and ability
are equal, did arise under the Agreement.  The Court of Appeals thought the
Board's contrary conclusion was in conflict with two later Board decisions,
where the Board had recognized that seniority rights may arise under an
expired contract, United Chrome Products, Inc., 288 N. L. R. B. 1176
(1988), and Uppco, Inc., 288 N. L. R. B. 937 (1988).
    The court cited a second conflict, one between Indiana & Michigan and
the court's own interpretation of Nolde Bros. in Local Joint Executive Bd.
of Las Vegas Culinary Workers Union, Local 226 v. Royal Center, Inc., 796
F. 2d 1159 (CA9 1986).  In Royal Center, the Court of Appeals had rejected
the argument that only rights accruing or vesting under a contract prior to
termination are covered by the posttermination duty to arbitrate.  Id., at
1163.
    Litton petitioned for a writ of certiorari.  Because of substantial
disagreement as to the proper application of our decision in Nolde Bros.,
{1} we granted review limited to the question of arbitrability of the
layoff grievances.  --- U. S. ---.

II


A
    Sections 8(a)(5) and 8(d) of the NLRA, 29 U. S. C. 15 158(a)(5) and
(d), require an employer to bargain "in good faith with respect to wages,
hours, and other terms and conditions of employment."  The Board has taken
the position that it is difficult to bargain if, during negotiations, an
employer is free to alter the very terms and conditions that are the
subject of those negotiations.  The Board has determined, with our
acceptance, that an employer commits an unfair labor practice if, without
bargaining to impasse, it effects a unilateral change of an existing term
or condition of employment.  See NLRB v. Katz, 369 U. S. 736 (1962).  In
Katz the union was newly certified and the parties had yet to reach an
initial agreement.  The Katz doctrine has been extended as well to cases
where, as here, an existing agreement has expired and negotiations on a new
one have yet to be completed.  See, e. g., Laborers Health and Welfare
Trust Fund v. Advanced Lightweight Concrete Co., 484 U. S. 539, 544, n. 6
(1988).
    Numerous terms and conditions of employment have been held to be the
subject of mandatory bargaining under the NLRA.  See generally 1 C. Morris,
The Developing Labor Law 772-844 (2d ed. 1983).  Litton does not question
that arrangements for arbitration of disputes are a term or condition of
employment and a mandatory subject of bargaining.  See id., at 813 (citing
cases); United States Gypsum Co., 94 N. L. R. B. 112, 131 (1951).
    The Board has ruled that most mandatory subjects of bargaining are
within the Katz prohibition on unilateral changes.  The Board has
identified some terms and conditions of employment, however, which do not
survive expiration of an agreement for purposes of this statutory policy.
For instance, it is the Board's view that union security and dues check-off
provisions are excluded from the unilateral change doctrine because of
statutory provisions which permit these obligations only when specified by
the express terms of a collective-bargaining agreement.  See 29 U. S. C.
MDRV 158(a)(3) (union security conditioned upon agreement of the parties);
29 U. S. C. MDRV 186(c)(4) (dues check-off valid only until termination
date of agreement); Indiana & Michigan, 284 N. L. R. B., at 55 (quoting
Bethelem Steel, 136 N. L. R. B., at 1502).  Also, in recognition of the
statutory right to strike, no-strike clauses are excluded from the
unilateral change doctrine, except to the extent other dispute resolution
methods survive expiration of the agreement.  See 29 U. S. C. 15 158(d)(4),
163 (union's statutory right to strike); Southwestern Steel & Supply, Inc.
v. NLRB, 257 U. S. App. D. C. 19, 23, 806 F. 2d 1111, 1114 (1986).
    In Hilton-Davis Chemical Co., 185 N. L. R. B. 241 (1970), the Board
determined that arbitration clauses are excluded from the prohibition on
unilateral changes, reasoning that the commitment to arbitrate is a
"voluntary surrender of the right of final decision which Congress . . .
reserved to [the] parties. . . .  [A]rbitration is, at bottom, a consensual
surrender of the economic power which the parties are otherwise free to
utilize."  Id., at 242.  The Board further relied upon our statements
acknowledging the basic federal labor policy that "arbitration is a matter
of contract and a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit."  United Steelworkers of
America v. Warrior & Gulf Navigation Co., 363 U. S. 574, 582 (1960).  See
also 29 U. S. C. MDRV 173(d) (phrased in terms of parties' agreed upon
method of dispute resolution under an existing bargaining agreement).
Since HiltonDavis the Board has adhered to the view that an arbitration
clause does not, by operation of the NLRA as interpreted in Katz, continue
in effect after expiration of a collectivebargaining agreement.

B
    The Union argues that we should reject the Board's decision in
Hilton-Davis Chemical Co., and instead hold that arbitration provisions are
within Katz' prohibition on unilateral changes.  The unilateral change
doctrine, and the exclusion of arbitration from the scope of that doctrine,
represent the Board's interpretation of the NLRA requirement that parties
bargain in good faith.  And "[i]f the Board adopts a rule that is rational
and consistent with the Act . . . then the rule is entitled to deference
from the courts."  Fall River Dyeing & Finishing Corp. v. NLRB, 482 U. S.
27, 42 (1987); see, e. g., NLRB v. Curtin Matheson Scientific, Inc., 494 U.
S. ---, --- (1990).
    We think the Board's decision in Hilton-Davis Chemical Co. is both
rational and consistent with the Act.  The rule is grounded in the strong
statutory principle, found in both the language of the NLRA and its
drafting history, of con sensual rather than compulsory arbitration.  See
Indiana & Michigan, supra, at 57-58; Hilton-Davis Chemical Co., supra.  The
rule conforms with our statement that "[n]o obligation to arbitrate a labor
dispute arises solely by operation of law.  The law compels a party to
submit his grievance to arbitration only if he has contracted to do so."
Gateway Coal Co. v. Mine Workers, 414 U. S. 368, 374 (1974).  We reaffirm
today that under the NLRA arbitration is a matter of consent, and that it
will not be imposed upon parties beyond the scope of their agreement.
    In the absence of a binding method for resolution of post expiration
disputes, a party may be relegated to filing unfair labor practice charges
with the Board if it believes that its counterpart has implemented a
unilateral change in violation of the NLRA.  If, as the Union urges,
parties who favor labor arbitration during the term of a contract also
desire it to resolve postexpiration disputes, the parties can consent to
that arrangement by explicit agreement.  Further, a collective-bargaining
agreement might be drafted so as to eliminate any hiatus between expiration
of the old and execution of the new agreement, or to remain in effect until
the parties bargain to impasse. {2}  Unlike the Union's suggestion that we
impose arbitration of postexpiration disputes upon parties once they agree
to arbitrate disputes arising under a contract, these alternatives would
reinforce the statutory policy that arbitration is not compulsory.

III
    The Board argues that it is entitled to substantial deference here
because it has determined the remedy for an unfair labor practice.  As
noted above, we will uphold the Board's interpretation of the NLRA so long
as it is "rational and consistent with the Act."  Fall River Dyeing &
Finishing Corp. v. NLRB, supra, at 42.  And we give the greatest latitude
to the Board when its decision reflects its " `difficult and delicate
responsibility' of reconciling conflicting interests of labor and
management," NLRB v. J. Weingarten, Inc., 420 U. S. 251, 267 (1975).  We
have accorded the Board considerable authority to structure its remedial
orders to effect the purposes of the NLRA and to order the relief it deems
appropriate.  See Shepard v. NLRB, 459 U. S. 344, 352 (1983); Virginia
Elec. & Power Co. v. NLRB, 319 U. S. 533, 540 (1943).
    The portion of the Board's decision which we review today does discuss
the appropriate remedy for a violation of the NLRA.  But it does not follow
that we must accord the same deference we recognized in Virginia Elec. &
Power Co. and Shepard.  Here, the Board's remedial discussion is not
grounded in terms of any need to arbitrate these grievances in order "to
effectuate the policies of the Act."  Virginia Elec. & Power Co., supra, at
540.  Rather, the Board's decision not to order arbitration of the layoff
grievances rests upon its interpretation of the Agreement, applying our
decision in Nolde Bros. and the federal common law of collectivebargaining
agreements.  The Board now defends its decision on the ground that it need
not "reflexively order that which a complaining party may regard as
`complete relief' for every unfair labor practice," Shepard v. NLRB, supra,
at 352; but its decision did not purport to rest upon such grounds.
    Although the Board has occasion to interpret collectivebargaining
agreements in the context of unfair labor practice adjudication, see NLRB
v. C & C Plywood Corp., 385 U. S. 421 (1967), the Board is neither the sole
nor the primary source of authority in such matters.  "Arbitrators and
courts are still the principal sources of contract interpretation."  NLRB
v. Strong, 393 U. S. 357, 360-361 (1969).  Section 301 of the Labor
Management Relations Act (LMRA), 29 U. S. C. MDRV 185, "authorizes federal
courts to fashion a body of federal law for the enforcement of . . .
collective bargaining agreements."  Textile Workers v. Lincoln Mills of
Alabama, 353 U. S. 448, 451 (1957) (emphasis added).  We would risk the
development of conflicting principles were we to defer to the Board in its
interpretation of the contract, as distinct from its devising a remedy for
the unfair labor practice that follows from a breach of contract.  We
cannot accord deference in contract interpretation here only to revert to
our independent interpretation of collective-bargaining agreements in a
case arising under MDRV 301.  See Local Union 1395, Int'l Brotherhood of
Electrical Workers v. NLRB, 254 U. S. App. D. C. 360, 363-364, 797 F. 2d
1027, 1030-1031 (1986).

IV
    The duty not to effect unilateral changes in most terms and conditions
of employment, derived from the statutory command to bargain in good faith,
is not the sole source of possible constraints upon the employer after the
expiration date of a collective-bargaining agreement.  A similar duty may
arise as well from the express or implied terms of the expired agreement
itself.  This, not the provisions of the NLRA, was the source of the
obligation which controlled our decision in Nolde Bros., Inc. v. Bakery
Workers, 430 U. S. 243 (1977).  We now discuss that precedent in the
context of the case before us.
    In Nolde Bros., a union brought suit under MDRV 301 of the Labor
Management Relations Act, 29 U. S. C. MDRV 185, to compel arbitration.
Four days after termination of a collectivebargaining agreement, the
employer decided to cease operations.  The employer settled employee wage
claims, but refused to pay severance wages called for in the agreement, and
declined to arbitrate the resulting dispute.  The union argued that these
wages

"were in the nature of `accrued' or `vested' rights, earned by employees
during the term of the contract on essentially the same basis as vacation
pay, but payable only upon termination of employment."  Nolde Bros., 430 U.
S., at 248.


We agreed that

"whatever the outcome, the resolution of that claim hinges on the
interpretation ultimately given the contract clause providing for severance
pay.  The dispute therefore, although arising after the expiration of the
collective-bargaining contract, clearly arises under that contract."  Id.,
at 249 (emphasis in original).


    We acknowledged that "the arbitration duty is a creature of the
collective-bargaining agreement" and that the matter of arbitrability must
be determined by reference to the agreement, rather than by compulsion of
law.  Id., at 250-251.  With this understanding, we held that the extensive
obligation to arbitrate under the contract in question was not consistent
with an interpretation that would eliminate all duty to arbitrate as of the
date of expiration.  That argument, we noted,

"would preclude the entry of a post-contract arbitration order even when
the dispute arose during the life of the contract but arbitration
proceedings had not begun before termination.  The same would be true if
arbitration processes began but were not completed, during the contract's
term."  Id., at 251.


We found "strong reasons to conclude that the parties did not intend their
arbitration duties to terminate automatically with the contract," id., at
253, and noted that "the parties' failure to exclude from arbitrability
contract disputes arising after termination . . . affords a basis for
concluding that they intended to arbitrate all grievances arising out of
the con tractual relationship," id., at 255.  We found a presumption in
favor of postexpiration arbitration of matters unless "negated expressly or
by clear implication," ibid., but that conclusion was limited by the vital
qualification that arbitration was of matters and disputes arising out of
the relation governed by contract.

A
    Litton argues that provisions contained in the Agreement rebut the
Nolde Bros. presumption that the duty to arbitrate disputes arising under
an agreement outlasts the date of expiration.  The Agreement provides that
its stipulations "shall be in effect for the time hereinafter specified,"
App. 22, in other words, until the date of expiration and no longer.  The
Agreement's no-strike clause, which Litton characterizes as a quid pro quo
for arbitration, applies only "during the term of this [a]greement," id.,
at 34.  Finally, the Agreement provides for "interest arbitration" in case
the parties are unable to conclude a successor agreement, id., at 53-55,
proving that where the parties wished for arbitration other than to resolve
disputes as to contract interpretation, they knew how to draft such a
clause.  These arguments cannot prevail.  The Agreement's unlimited
arbitration clause, by which the parties agreed to arbitrate all
"[d]ifferences that may arise between the parties" regarding the Agreement,
violations thereof, or "the construction to be placed on any clause or
clauses of the Agreement," id., at 34, places it within the precise
rationale of Nolde Bros.  It follows that if a dispute arises under the
contract here in question, it is subject to arbitration even in the
postcontract period.

B
    With these matters resolved, we come to the crux of our inquiry.  We
agree with the approach of the Board and those courts which have
interpreted Nolde Bros. to apply only where a dispute has its real source
in the contract.  The object of an arbitration clause is to implement a
contract, not to transcend it.  Nolde Bros. does not announce a rule that
postexpiration grievances concerning terms and conditions of employment
remain arbitrable.  A rule of that sweep in fact would contradict the
rationale of Nolde Bros.  The Nolde Bros. presumption is limited to
disputes arising under the contract.  A postexpiration grievance can be
said to arise under the contract only where it involves facts and
occurrences that arose before expiration, where an action taken after
expiration infringes a right that accrued or vested under the agreement, or
where, under normal principles of contract interpretation, the disputed
contractual right survives expiration of the remainder of the agreement.
    Any other reading of Nolde Bros. seems to assume that postexpiration
terms and conditions of employment which coincide with the contractual
terms can be said to arise under an expired contract, merely because the
contract would have applied to those matters had it not expired.  But that
interpretation fails to recognize that an expired contract has by its own
terms released all its parties from their respective contractual
obligations, except obligations already fixed under the contract but as yet
unsatisfied.  Although after expiration most terms and conditions of
employment are not subject to unilateral change, in order to protect the
statutory right to bargain, those terms and conditions no longer have force
by virtue of the contract.  See Office and Professional Employees Ins.
Trust Fund v. Laborers Funds Administrative Office of Northern California,
Inc. 783 F. 2d 919, 922 (CA9 1986) ("An expired [collective bargaining
agreement] . . . is no longer a `legally enforceable document.' " (citation
omitted)); cf. Derrico v. Sheehan Emergency Hosp., 844 F. 2d 22, 25-27 (CA2
1988) (Section 301 of the LMRA, 29 U. S. C. MDRV 185, does not provide a
federal court jurisdiction where a bargaining agreement has expired,
although rights and duties under the expired agreement "retain legal
significance because they define the status quo" for purposes of the
prohibition on unilateral changes).
    The difference is as elemental as that between Nolde Bros. and Katz.
Under Katz, terms and conditions continue in effect by operation of the
NLRA.  They are no longer agreedupon terms; they are terms imposed by law,
at least so far as there is no unilateral right to change them.  As the
Union acknowledges, the obligation not to make unilateral changes is
"rooted not in the contract but in preservation of existing terms and
conditions of employment and applies before any contract has been
negotiated."  Brief for Respondents 34, n. 21.  Katz illustrates this point
with utter clarity, for in Katz the employer was barred from imposing
unilateral changes even though the parties had yet to execute their first
collective-bargaining agreement.
    Our decision in Laborers Health and Welfare Trust Fund v. Advanced
Lightweight Concrete Co., Inc., 484 U. S. 539 (1988), further demonstrates
the distinction between contractual obligations and postexpiration terms
imposed by the NLRA.  There, a bargaining agreement required employer
contributions to a pension fund.  We assumed that under Katz the employer's
failure to continue contributions after expiration of the agreement could
constitute an unfair labor practice, and if so the Board could enforce the
obligation.  We rejected, however, the contention that such a failure
amounted to a violation of the ERISA obligation to make contributions
"under the terms of a collectively bargained agreement . . . in accordance
with the terms and conditions of . . . such agreement."  29 U. S. C. MDRV
1145.  Any postexpiration obligation to contribute was imposed by the NLRA,
not by the bargaining agreement, and so the district court lacked
jurisdiction under MDRV 502(g)(2) of ERISA, 29 U. S. C. MDRV 1132(g) (2),
to enforce the obligation.
    As with the obligation to make pension contributions in Advanced
Lightweight Concrete Co., other contractual 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.  And of course, if a collectivebargaining agreement provides in
explicit terms that certain benefits continue after the agreement's
expiration, disputes as to such continuing benefits may be found to arise
under the agreement, and so become subject to the contract's arbitration
provisions.  See United Steelworkers of America v. Fort Pitt Steel Casting,
Division of Conval-Penn, Inc., 598 F. 2d 1273 (CA3 1979) (agreement
provided for continuing medical benefits in the event of postexpiration
labor dispute).
    Finally, as we found in Nolde Bros., structural provisions relating to
remedies and dispute resolution -- for example, an arbitration provision --
may in some cases survive in order to enforce duties arising under the
contract.  Nolde Bros.' statement to that effect under MDRV 301 of the LMRA
is similar to the rule of contract interpretation which might apply to
arbitration provisions of other commercial contracts. {3}  We presume as a
matter of contract interpretation that the parties did not intend a pivotal
dispute resolution provision to terminate for all purposes upon the
expiration of the agreement.
C
    The Union, and Justice Stevens' dissent, argue that we err in reaching
the merits of the issue whether the posttermination grievances arise under
the expired agreement because, it is said, that is an issue of contract
interpretation to be submitted to an arbitrator in the first instance.
Whether or not a company is bound to arbitrate, as well as what issues it
must arbitrate, is a matter to be determined by the court, and a party
cannot be forced to "arbitrate the arbitrability issue."  AT&T
Technologies, Inc. v. Communication Workers of America, 475 U. S. 643, 651.
We acknowledge that where an effective bargaining agreement exists between
the parties, and the agreement contains a broad arbitration clause, "there
is a presumption of arbitrability in the sense that `[a]n 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.' "  Id., at 650
(quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U. S. 564,
582-583 (1960)).  But we refuse to apply that presumption wholesale in the
context of an expired bargaining agreement, for to do so would make
limitless the contractual obligation to arbitrate.  Although "[d]oubts
should be resolved in favor of coverage," AT&T Technologies, supra, at 650,
we must determine whether the parties agreed to arbitrate this dispute, and
we cannot avoid that duty because it requires us to interpret a provision
of a bargaining agreement.
    We apply these principles to the layoff grievances in the present case.
The layoffs took place almost one year after the Agreement had expired.  It
follows that the grievances are arbitrable only if they involve rights
which accrued or vested under the Agreement, or rights which carried over
after expiration of the Agreement, not as legally imposed terms and
conditions of employment but as continuing obligations under the contract.
    The contractual right at issue, that "in case of layoffs, lengths of
continuous service will be the determining factor if other things such as
aptitude and ability are equal," App. 30, involves a residual element of
seniority.  Seniority provisions, the Union argues, "create a form of
earned advantage, accumulated over time, that can be understood as a
special form of deferred compensation for time already worked."  Brief for
Respondents 23-25, n. 14.  Leaving aside the question whether a provision
requiring all layoffs to proceed in inverse order of seniority would
support an analogy to the severance pay at issue in Nolde Bros., which was
viewed as a form of deferred compensation, the layoff provision here cannot
be so construed, and cannot be said to create a right that vested or
accrued during the term of the Agreement, or a contractual obligation that
carries over after expiration.
    The order of layoffs under the Agreement was to be de termined
primarily with reference to "other factors such as aptitude and ability."
Only where all such factors were equal was the employer required to look to
seniority.  Here, any arbitration proceeding would of necessity focus upon
whether aptitude and ability -- and any unenumerated "other factors" --
were equal long after the Agreement had expired, as of the date of the
decision to lay employees off and in light of Litton's decision to close
down its cold-type printing operation.
    The important point is that factors such as aptitude and ability do not
remain constant, but change over time.  They cannot be said to vest or
accrue or be understood as a form of deferred compensation.  Specific
aptitudes and abilities can either improve or atrophy.  And the importance
of any particular skill in this equation varies with the requirements of
the employer's business at any given time.  Aptitude and ability cannot be
measured on some universal scale, but only by matching an employee to the
requirements of an employer's business at that time.  We cannot infer an
intent on the part of the contracting parties to freeze any particular
order of layoff or vest any contractual right as of the Agreement's
expiration. {4}

V
    For the reasons stated, we reverse the judgment of the Court of Appeals
to the extent that the Court of Appeals refused to enforce the Board's
order in its entirety and remanded the cause for further proceedings.

It is so ordered.


 
 
 
 
 


------------------------------------------------------------------------------
1
    The conflict between the Ninth Circuit's reasoning in Local Joint
Executive Bd. of Las Vegas Culinary Workers Union, Local 226 v. Royal
Center, Inc., 796 F. 2d 1159 (1986), and the Board's approach in Indiana &
Michigan Electric Co., 284 N. L. R. B. 53 (1987), reflects a wider split of
authority.  The Third and Fifth Circuits follow an approach similar to that
of the Ninth Circuit.  See Federated Metals Corp. v. United Steelworkers of
America, 648 F. 2d 856, 861 (CA3), cert. denied, 454 U. S. 1031 (1981);
Seafarers Int'l Union of North America v. National Marine Servs., Inc., 820
F. 2d 148, 152-154 (CA5), cert. denied, 484 U. S. 953 (1987).  The Eighth
Circuit, Tenth Circuit, and the Michigan Supreme Court follow the Board's
approach and limit the presumption of post-expiration arbitrability to
rights that accrued or vested under the agreement, or events that took
place prior to expiration of the agreement.  See Chauffeurs, Teamsters and
Helpers, Local Union 238 v. C. R. S. T. Inc., 795 F. 2d 1400, 1404 (CA8
1986) (en banc); United Food & Commercial Workers Int'l Union, AFL-CIO,
Local 7 v. Gold Star Sausage Co., 897 F. 2d 1022, 1025-1026 (CA10 1990);
County of Ottawa v. Jaklinski, 423 Mich. 1, 377 N. W. 2d 668 (1985)
(discussing Nolde in context of Michigan law applicable to public
employers).  The Seventh Circuit, finally, restricts application of Nolde
Bros. to a limited period following expiration of a bargaining agreement.
See Local 703, Int'l Brotherhood of Teamsters v. Kennicott Bros. Co., 771
F. 2d 300 (1985).

2
    See, e. g., NLRB v. New England Newspapers, Inc., 856 F. 2d 409, 410
(CA1 1988) (agreement would continue in effect until a new agreement was
reached); Montgomery Mailers' Union No. 127 v. The Advertiser Co., 827 F.
2d 709, 712, n. 5 (CA11 1987) (agreement to continue in effect "for a
reasonable time for negotiation of a new agreement"); Teamsters Local Union
688 v. John J. Meier Co., 718 F. 2d 286, 287 (CA8 1983) ("all terms and
provisions of the expired agreement shall continue in effect until a new
agreement is adopted or negotiations are terminated").

3
    See, e. g., West Virginia ex rel. Ranger Fuel Corp. v. Lilly, 165 W.
Va. 98, 100-101, 267 S. E. 2d 435, 437-438 (W. Va. 1980) (duty to arbitrate
survives termination of lease); Warren Brothers Co. v. Cardi Corp., 471 F.
2d 1304 (CA1 1973) (arbitration clause survives completion of work under
construction contract); Mendez v. Trustees of Boston University, 362 Mass.
353, 356, 285 N. E. 2d 446, 448 (1972) (termination of employment contract
"does not necessarily terminate a provision for arbitration or other agreed
procedure for the resolution of disputes"); The Batter Building Materials
Co. v. Kirschner, 142 Conn. 1, 10-11, 110 A. 2d 464, 469-470 (1954)
(arbitration clause in building contract not affected by a party's
repudiation or total breach of contract).

4
    Although our decision that the dispute does not arise under the
Agreement does, of necessity, determine that as of August 1980 the
employees lacked any vested contractual right to a particular order of
layoff, the Union would remain able to argue that the failure to lay off in
inverse order of seniority if "other things such as aptitude and ability"
were equal amounted to an unfair labor practice, as a unilateral change of
a term or condition of employment.  We do not decide whether, in fact, the
layoffs were out of order.





Subject: 90-285 -- DISSENT, LITTON FINANCIAL PRINTING DIV. v. NLRB

 


 
SUPREME COURT OF THE UNITED STATES


No. 90-285



LITTON FINANCIAL PRINTING DIVISION, A DIVISION OF LITTON BUSINESS SYSTEMS,
INC., PETITIONER v. NATIONAL LABOR RELATIONS BOARD et al.

on writ of certiorari to the united states court of appeals for the ninth
circuit

[June 13, 1991]



    Justice Stevens, with whom Justice Blackmun and Justice Scalia join,
dissenting.
    As the Court today recognizes, an employer's obligation to arbitrate
postcontract termination grievances may arise by operation of labor law or
by operation of the expired collective-bargaining agreement.  I think the
Court is correct in deferring to the National Labor Relations Board's line
of cases and holding that a statutory duty to arbitrate grievances does not
automatically continue after contract termination by operation of labor
law, see ante, at 6-11.  I also agree  with the Court's recognition that
notwithstanding the absence of an employer's statutory duty to arbitrate
posttermi nation grievances, a contractual duty to arbitrate such
grievances may nevertheless exist, see ante, at 11-16.  I part company with
the Court, however, at Part IV-C of its opinion, where it applies its
analysis to the case at hand.  Because I am persuaded that the issue
whether the posttermi nation grievances in this case "arise under" the
expired agreement is ultimately an issue of contract interpretation, I
think that the Court errs in reaching the merits of this issue rather than
submitting it to an arbitrator in the first instance, pursuant to the broad
agreement of the parties to submit for arbitration any dispute regarding
contract construction.

    In Nolde Bros., Inc. v. Bakery Workers, 430 U. S. 243 (1977), a union
brought suit against an employer to compel arbitration of the employer's
refusal to give severance pay under an expired collective-bargaining
agreement to employees displaced by a plant closing.  The expired agreement
provided that employees who had worked for the employer for at least three
years were entitled to severance pay if permanently displaced from their
jobs.  The union claimed that the right to such severance pay had "accrued"
or "vested" during the life of the contract.  The employer disavowed any
obligation to arbitrate, arguing that the contract containing its
commitment had terminated and the event giving rise to the dispute -- the
displacement of employees during the plant closing -- occurred after the
contract had expired.

    We ruled in favor of the union in Nolde Bros.  Integral to our decision
was the conclusion that whether or not the right to severance pay had
accrued during the contract, and thus whether or not the employer's refusal
to offer severance pay was an arbitrable grievance after the contract had
expired, was itself a question of contract interpretation.  "There can be
no doubt that a dispute over the meaning of the severancepay clause during
the life of the agreement would have been subject to the mandatory
grievance-arbitration procedures of the contract.  Indeed, since the
parties contracted to submit `all grievances' to arbitration, our
determination that the Union was `making a claim which on its face is
governed by the contract' would end the matter had the contract not been
terminated prior to the closing of the plant."  Id., at 249-250 (citation
omitted).

    Like the expired agreement between the union and Nolde Bros. to
arbitrate "all grievances," the terminated agreement between Litton and the
Union in this case broadly mandates arbitration of " `[d]ifferences that
may arise between the parties hereto regarding this Agreement and any
alleged violations of the Agreement, [and] the construction to be placed on
any clause or clauses of the Agreement.' "  Ante, at 2.  Because the Union
here alleged that the seniority clause of the expired agreement was on its
face violated by the post termination layoffs, determining whether the
union's grievances arise under the contract requires construction of the
seniority provision of the contract and determination of whether this
provision applies to posttermination events.  As the Court itself notes:
"[T]he Board's decision not to order arbitration of the layoff grievances
rests upon its interpretation of the Agreement."  Ante, at 10 (emphasis
added).

    In my opinion, the question whether the seniority clause in fact
continues to provide employees with any rights after the contract's
expiration date is a separate issue concerning the merits of the dispute,
not its arbitrability.  Whatever the merits of the Union's contention that
the seniority-rights provision survives the contract's termination date, I
think that the merits should be resolved by the arbitrator, pursuant to the
parties' broad contractual commitment to arbitrate all disputes concerning
construction of the agreement, rather than by this Court.

    I respectfully dissent.
------------------------------------------------------------------------------




Subject: 90-285 -- DISSENT, LITTON FINANCIAL PRINTING DIV. v. NLRB

 


    SUPREME COURT OF THE UNITED STATES


No. 90-285



LITTON FINANCIAL PRINTING DIVISION, A DIVISION OF LITTON BUSINESS SYSTEMS,
INC., PETITIONER v. NATIONAL LABOR RELATIONS BOARD et al.

on writ of certiorari to the united states court of appeals for the ninth
circuit

[June 13, 1991]



    Justice Marshall, with whom Justice Blackmun and Justice Scalia join,
dissenting.

    Although I agree with Justice Stevens' dissent, post, I write
separately to emphasize the majority's mischaracteri zation of our decision
in Nolde Bros., Inc. v. Bakery Workers, 430 U. S. 243 (1977).  Nolde states
a broad, rebuttable presumption of arbitrability which applies to all
posttermination disputes arising under the expired agreement; it leaves the
merits of the underlying dispute to be determined by the arbitrator.  Today
the majority turns Nolde on its head, announcing a rule that requires
courts to reach the merits of the underlying posttermination dispute in
order to determine whether it should be submitted to arbitration.  This
result is not only unfaithful to precedent but also it is inconsistent with
sound labor-law policy.

I


    The dispute in Nolde concerned whether employees terminated after the
expiration of a collective-bargaining agreement were entitled to severance
pay under a severance-pay clause of the expired agreement.  See id., at
248-249.  The Court stated that the severance-pay dispute "hinge[d] on the
interpretation [of] the contract clause providing for severance pay" but
that "the merits of the underlying claim" were not implicated "in
determining the arbitrability of the dispute."  Id., at 249.  To determine
whether the dispute was arbitrable, the Court looked solely to the expired
agreement's arbitration clause.  It found the severance-pay dispute
arbitrable because "[t]he parties agreed to resolve all disputes by resort
to the mandatory grievance-arbitration machinery" and "nothing in the
arbitration clause . . . expressly exclude[d] from its operation a dispute
which arises under the contract, but which is based on events that occur
after its termination."  Id., at 252-253. {1}  Thus, under Nolde, the key
questions for determining arbitrability are whether (1) the dispute is
"based on . . . differing perceptions of a provision of the expired
collective-bargaining agreement" or otherwise "arises under that contract,"
id., at 249 (emphasis omitted), and, if so, (2) whether the "presumptions
favoring" arbitrability have been "negated expressly or by clear
implication," id., at 255.

    The majority grossly distorts Nolde's test for arbitrability by
transforming the first requirement that posttermination disputes "arise
under" the expired contract.  The Nolde Court defined "arises under" by
reference to the allegations in the grievance.  In other words, a dispute
"arises under" the agreement where "the resolution of [the Union's] claim
hinges on the interpretation ultimately given the contract."  Id., at 249.
    By contrast, the majority today holds that a postexpiration grievance
can be said to "arise under" the agreement only where the court satisfies
itself (1) that the challenged action "infringes a right that accrued or
vested under the agreement," or (2) that "under normal principles of
contract interpretation, the disputed contractual right survives expiration
of the remainder of the agreement."  Ante, at 14.  Because they involve
inquiry into the substantive effect of the terms of the agreement, these
determinations require passing upon the merits of the underlying dispute.
Yet the Nolde Court expressly stated that "in determining the arbitrability
of the dispute, the merits of the underlying claim . . . are not before
us."  430 U. S., at 249.

    Since the proper question under Nolde is whether the dispute in this
case "arises under" the agreement in the sense that it is "based on . . .
differing perceptions of a provision in the expired collective bargaining
agreement," ibid., I have no difficulty concluding that this test is met
here.  The Union's grievance "claim[ed] a violation of the Agreement,"
ante, at 2, by petitioner's layoffs.  And, as even the majority concedes,
"[t]he Agreement's unlimited arbitration clause" encompasses any dispute
that "arises under the contract here in question."  Ante, at 13.  Thus, the
dispute is arbitrable because the "presumptions favoring" arbitrability
have not been "negated expressly or by clear implication."  430 U. S., at
255.

    In fashioning its more rigorous standard for arbitrability, the
majority erroneously suggests that if Nolde rendered arbitrable all
postexpiration disputes about an expired agreement's substantive
provisions, it would have the effect of extending the life of the entire
contract beyond the date of expiration.  See ante, at 14.  The defect in
this view is that it equates asking an arbitrator to determine whether a
particular contractual provision creates rights that survive expiration
with a decision that the provision does create such postexpiration rights.
The majority evidently fears that arbitrators cannot be trusted to decide
the issue correctly.  Yet arbitrators typically have more expertise than
courts in construing collective-bargaining agreements, and our arbitration
jurisprudence makes clear that courts must rely on arbitral judgments where
the parties have agreed to do so.  Thus in Nolde, we carefully avoided
expressing any view as to whether the substantive provisions of the expired
agreement had any posttermination effect precisely because the parties had
expressed their preference for an arbitral, rather than a judicial
interpretation.  See Nolde, supra, at 249, 253.

    Consequently, the issue here, as it was in Nolde, is not whether a
substantive provision of the expired collectivebargaining agreement (in
this case the provision covering layoffs) remains enforceable but whether
the expired agreement reflects the parties' intent to arbitrate the Union's
contention that this provision remains enforceable.  The majority itself
acknowledges a general rule of contract construction by which arbitration
or other dispute resolution provisions may survive the termination of a
contract.  Ante, at 16, and n. 3.  That is all Nolde stands for. {2}

    In addition to being without legal foundation, the majority's
displacement of Nolde's simple, interpretive presumption with a
case-by-case test is unsound from a policy standpoint.  Ironically, whereas
parties that have agreed to a broad arbitration clause have expressed a
preference for "a prompt and inexpensive resolution of their disputes by an
expert tribunal," Nolde, supra, at 254, the majority invites protracted
litigation about what rights may "accrue" or "vest" under the contract --
litigation aimed solely at determining whether the dispute will be resolved
by arbitration.  More fundamentally, because the arbitrator is better
equipped than are judges to make the often difficult determination of the
post-termination effect of an expired contract's substantive provisions,
the majority's assignment of this task to courts increases the likelihood
of error.  See id., at 253 (" `The ablest judge cannot be expected to bring
the same experience and competence to bear upon the determination of a
grievance, because he cannot be similarly informed,' " quoting Steelworkers
v. Warrior & Gulf Nav. Co., 363 U. S. 574, 582 (1960)).

II



    The majority's resolution of the merits of the contract dispute here
reinforces my conviction that arbitrators should be the preferred resolvers
of such questions.  The Union based its grievance on the following
provision of the contract: "[I]n case of layoffs, lengths of continuous
service will be the determining factor if other things such as aptitude and
ability are equal."  App. 30.  The Union's contention that postex piration
layoffs violated this provision rests on the assertion that this
contractual provision created rights that survive termination of the
contract.  The majority rejects this assertion on the ground that "factors
such as aptitude and ability do not remain constant, but change over time"
and thus "cannot be said to vest or accrue."  Ante, at 18.  This conclusion
strikes me as utterly implausible.

    As the majority appears to concede, ante, at 17-18, and as the Board
has held, an unconditional seniority provision can confer a seniority right
that is "capable of accruing or vesting to some degree during the life of
the contract."  United Chrome Products, Inc., 288 N. L. R. B. 1176, 1177
(1988).  Obviously, an employee's relative seniority, much like his
relative "aptitude and ability," will "change over time."  That is, a given
member of a bargaining unit who is, for example, 12th in seniority when his
collective-bargaining agreement expires may be 5th in seniority at a
particular time thereafter, depending upon the number of more senior
employees who have departed from the workforce.  Or an employee could lose
his seniority altogether where specified conditions for such loss have been
met.  See, e. g., n. 3, infra.  The fact that, despite the volatility in
individual rank, the seniority guarantee might nevertheless vest under the
contract means that what vests is not the employee's seniority rank or his
right to job security but rather the right to have the standard of
seniority applied to layoffs.

    In my view, a provision granting only "qualified" seniority may vest in
the same way.  (Here, the provision guaranteeing seniority is "qualified"
by the requirement that the employee claiming seniority possess "aptitude
and ability" that is equal to that of less senior employees who seek to
avoid being laid off.)  As with an employee's seniority rank, a given
worker's "aptitude and ability" relative to other employees may change over
time, yet the right to have layoffs made according to the standard of
qualified seniority could vest under the contract.  Under this view, a laid
off employee would have the opportunity to prove to the arbitrator that he
should not have been laid off under the terms of the contract because other
factors such as aptitude and ability were equal at the time he was laid
off.

    Indeed, I think this is the more plausible reading of the parties'
intent in this case, particularly given related contract provisions
involving loss of seniority.  As the Board has previously held, a
contract's


"failure to specify expiration as one of the ways in which seniority rights
could be lost indicates that the parties intended that seniority rights
remain enforceable after contract termination.  Therefore, the grievance
over [the employer's] refusal to recall employees by plantwide seniority .
. . involves a right worked for and accumulated during the term of the
contract and intended by the parties to survive contract expiration."
Uppco, Inc., 288 N. L. R. B. 937, 940 (1988).


In the present case, the expired agreement enumerates six specific ways an
employee could lose seniority, and these do not include termination of the
agreement.  See App. 31. {3}  Thus, the qualified seniority at issue in
this case would seem as likely to accrue as did the unconditional seniority
in Uppco.

    In any event, the conclusion that the contracting parties in this case
did not intend qualified seniority rights to vest is sufficiently
implausible as to raise serious questions about the majority's assignment
of the task of deciding this interpretive issue to itself.  Had the
majority left this issue to the arbitrator to decide, as Nolde requires,
the arbitrator would have had the benefit of an evidentiary hearing on the
contractual question and the opportunity to explore petitioner's actual
postexpiration seniority practices.  The contractual text, alone, may not
be the only relevant information in determining the parties' intent.
Because arbitrators are better equipped to decide such issues and are more
familiar with the " `common law of the shop,' " Nolde, supra, at 253,
quoting Warrior & Gulf Nav. Co., supra, at 582, I would have much more
confidence in the majority's construction of the contract were that result
reached by an arbitrator.  In sum, the majority's problematic reasoning
regarding the substance of the layoff grievance only underscores the
soundness of the Nolde presumption of arbitrability which the majority
today displaces.  Accordingly, I dissent. {4}

 
 
 
 
 


------------------------------------------------------------------------------
1
    I agree with the majority that the National Labor Relations Board's
(Board) determination as to arbitrability under the contract is not
entitled to deference.  See ante, at 10-11.

2
    The majority "presume[s] as a matter of contract interpretation that
the parties did not intend a pivotal dispute resolution provision to
terminate for all purposes upon the expiration of the agreement."  Ante, at
16.  But the arbitration clause of the expired collective-bargaining
agreement does not distinguish among types of disputes that the parties
would and would not submit to arbitration.  As in Nolde, the parties agreed
to submit all disputes arising under the agreement to arbitration.  By
looking to the terms of the agreement's layoff provision to draw a
conclusion about whether the parties intended rights under that provision
to survive termination, the majority is deciding the merits of the dispute
rather than the issue of its arbitrability.  Notably, the layoff provisions
do not contain any language suggesting an intent to preclude
posttermination grievances over layoffs from arbitration.  See App. 30-31.

3
    Section 12 of the expired agreement, entitled "Notice of Layoutt"
[sic], contains six subsections addressing, inter alia, issues of
seniority, layoffs, and recalls.  Subsection F, which addresses the
recalling of laid off workers, enumerates the six ways in which "[a]n
employee shall lose his seniority."  App. 31.  The "seniority" referred to
in subsection F reasonably could be construed as the same seniority that is
implied in subsection A, concerning layoffs, and that is expressly
identified in subsection E, which requires the employer to "supply the
Union with an updated seniority list semi-annually," id.  See id., at
30-31.

4
    Although I believe the parties have a contractual duty to arbitrate in
this case, I agree with the majority's conclusion that the Board
articulated rational grounds for not imposing a statutory duty under the
National Labor Relations Act, 29 U. S. C. MDRV 151 et seq., to arbitrate
grievances arising after the termination of a collective-bargaining
agreement.  See Ante, at 8-9.  In Indiana and Michigan Electric Co., 284 N.
L. R. B. 53 (1987), the Board noted that "an agreement to arbitrate is a
product of the parties' mutual consent to relinquish economic weapons, such
as strikes or lockouts" and therefore the contractual obligation to
arbitrate could be distinguished from other "terms and conditions of
employment routinely perpetuated [after termination of a
collective-bargaining agreement] by the [statutory] constraints of [the
unilateral change doctrine]."  Id., at 58.  Under MDRV 13 of the Act, 29 U.
S. C. MDRV 163, the Act may not be construed to interfere with a union's
right to strike.  Therefore, the Board rationally concluded that employers
should not, as a matter of statutory policy, be compelled to arbitrate and
thus forbear from using their economic weapons, when no concomitant
statutory obligation can be imposed on a union.
