Litton Financial Printing Division v. NLRB

Supreme Court of the United States · 1991 · Labor Law

Labor LawCollective BargainingArbitrationPostexpiration GrievancesNLRALMRA § 301arbitrationcollective-bargaining agreement

Facts

Litton and the Union were parties to a collective-bargaining agreement that expired on October 3, 1979, and that contained a broad arbitration clause. Nearly a year later, after Litton decided to eliminate its coldtype operation, it laid off 10 employees without notice to the Union. The Union filed grievances claiming the layoffs violated the agreement's layoff clause, which provided that in layoffs length of continuous service would control if aptitude and ability were equal. Litton refused to arbitrate, and the question became whether these postexpiration layoff grievances arose under the expired agreement.

Issue

When layoffs occur well after expiration of a collective-bargaining agreement, does a grievance alleging violation of the agreement's layoff-seniority provision arise under the expired agreement so that it remains subject to arbitration? More generally, how far does the Nolde Brothers presumption of postexpiration arbitrability extend?

Rule

Under the NLRA, arbitration is a matter of consent and is not imposed by operation of law after a collective-bargaining agreement expires. Under Nolde Brothers, a postexpiration grievance is arbitrable only if it arises under the contract, which occurs only when it involves facts and occurrences arising before expiration, when postexpiration conduct infringes a right that accrued or vested under the agreement, or when, under normal principles of contract interpretation, the disputed contractual right survives expiration of the rest of the agreement.

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Pioneer Glass Works and Local 418 were parties to a collective-bargaining agreement in Toledo, Ohio, with a broad clause requiring arbitration of disputes regarding the agreement. Two days before the agreement expired, the company suspended Dana Ruiz for alleged misconduct, but the grievance process was not completed until after expiration and the company then refused to arbitrate.

Is the suspension grievance most likely arbitrable after expiration of the agreement?

Explanation. A postexpiration grievance is arbitrable only if it arises under the expired contract. Under the majority's rule, that includes disputes involving facts and occurrences arising before expiration. Here, the suspension occurred before the agreement ended, so the grievance has its real source in the contract. The Court also rejected the idea that arbitration continues by operation of law; the basis is contract interpretation, not automatic statutory carryover.