The National Labor Relations Board has ruled that a construction contractor’s efforts to terminate a collective bargaining agreement (CBA) and withdraw from a multiemployer group were ineffective and that the contractor was bound to a subsequent labor agreement negotiated by the multiemployer association.
In September 1997, Carr Finishing Specialties (Carr) joined the Upstate Iron Worker Employers’ Association (the Association) and executed a document (Membership Agreement) designating the Association as the company’s agent in collective bargaining with several locals of the Iron Workers union (the Union). The Membership Agreement provided that, automatically upon becoming a member of the Association, the member would become a party to all CBAs between the Association and the Union. It further provided that members of the Association are prohibited from resigning membership less than 90 days prior to the expiration date of an Association CBA. In May 2006, the Association and the Union executed a CBA for a three-year term with a one-year automatic extension absent four months’ written notice to terminate or modify. Despite already being bound to the CBA by the terms of the Association membership agreement, Carr signed a “Letter of Assent” agreeing to the terms of the CBA in September 2006. However, in October 2008, the company stopped applying the CBA. It provided no notice to the Association or the Union until February 17, 2009 – 72 days before the CBA was set to expire – when it informed the Association and Union that it was withdrawing recognition of the Union and that it was revoking both the Association’s authority to bargain on its behalf and the Letter of Assent. The Association and the Union later entered into a successor CBA for a three-year term beginning May 1, 2009. The Board found that Carr violated the National Labor Relations Act (NLRA) not only by repudiating the 2006-2009 CBA during the term of the agreement but also by failing to abide by the 2009-2012 CBA.
Because the CBAs were 8(f) prehire agreements, Carr could have lawfully withdrawn from the bargaining relationship once the CBA in effect expired had it complied with its other contractual obligations. (This is distinguishable from 9(a) agreements, which generally require signatory employers to continue to recognize the union even after the agreement has expired or has been properly terminated. For more information on the difference between 8(f) and 9(a) agreements, visit click here to go to AGC’s Labor & HR Topical Resources library and select the category “Collective Bargaining.”) However, Carr failed to give timely notice under the terms of the CBA and under the terms the Membership Agreement.
As the Board noted in the present case, prior decisions clearly establish that “a construction employer may become bound to successive 8(f) contracts…if the employer has expressly given continuing consent to a multiemployer association to bind it to future contracts and the employer has taken no timely or effective action, consistent with its own agreement, to withdraw that continuing consent from the association.” Precedent also makes clear that a “withdrawal of negotiating authority from a multiemployer association is an action distinct from terminating a contract.”
The terms of the Membership Agreement unambiguously barred Carr from resigning its membership in, or its delegation of bargaining authority to, the Association during the final 90 days of an Association CBA. The 2006 CBA was scheduled to expire on April 30, 2009. Accordingly, Carr was required to give notice of its desire to withdraw no later than January 30, 2009, which it failed to do. Because its notice was not timely, the Association remained Carr’s bargaining agent and effectively bound Carr to the successor agreement.
The Board commented that its 1994 decision in James Luterbach Construction Co. did not contradict its conclusions here. In Luterbach, the Board held that an employer bound to an 8(f) agreement by its delegation of bargaining authority to a multiemployer association is not automatically bound to a successor agreement negotiated by the association. Rather, the employer must engage in an “affirmative act” showing it intends to be bound. The present Board observed that the Luterbach Board expressly recognized that “there can be cases where the employer has expressly given continuing consent to bargain a successor contract on a multiemployer basis.” That is what happened here, the Board found.
This case stands as a good reminder to contractors of the importance of carefully following both the law and contractual obligations when withdrawing from a multiemployer association and terminating obligations under a multiemployer CBA. As noted above, these are two separate acts, and timely notice must be given for each. Contractors that wish to withdraw an assignment of bargaining rights are well-advised to send notice to both the association and the union: (a) before the time set forth in the CBA for notification of intent to modify or terminate the agreement, (b) before the next multiemployer negotiations actually begin, and (c) before any deadlines established in any contracts or governing documents of the association (e.g., bylaws) that apply to the contractor. Certified mail is recommended. Such notice does not by itself constitute termination of the CBA. The contractor still must send a letter to the union terminating the CBA within the time frame set forth in the CBA. A copy should be sent to the association and to the Federal Mediation & Conciliation Service as well. State law may require a copy also be sent to a state agency. Again, certified mail is recommended.
For more information, please contact AGC Associate General Counsel Denise Gold at goldd@agc.org or (703) 837-5326.
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