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Contract Interpretation CBA’s – Contracts Between two parties – Rules for Governing a Workplace Govern a continuing relationship between two parties “Workplace.

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Presentation on theme: "Contract Interpretation CBA’s – Contracts Between two parties – Rules for Governing a Workplace Govern a continuing relationship between two parties “Workplace."— Presentation transcript:

1 Contract Interpretation CBA’s – Contracts Between two parties – Rules for Governing a Workplace Govern a continuing relationship between two parties “Workplace Governance” 1

2 Prime Directive – Intent of the Parties Accepted principles of contract interpretation Past practice – If the parties act in a consistent way over a substantial period of time such that mutual agreement is established, an interpretation of the contract has been established Contract is silent Contract is ambiguous Contract is specific and inconsistent with the past practice Reasonableness – A business justification for a decision (usually by management) 2

3 Ambiguity Contracts not always perfectly clear – A contract ambiguous if it is reasonably susceptible to more than one meaning Unintentionally – Circumstances change or can’t be anticipate Intentionally – Parties unable to agree on specific language but don’t want to go impasse or self-help on the matter – Leave it ambiguous and go to arbitration, if necessary – Example “The company may subcontract work done by employees in the bargaining unit when it is economically feasible to do so.” 3

4 Intent of Parties Express Language Negotiating History – Testimony – Notes Past Practice 4

5 Principles of Contract Construction Principles used by arbitrators to interpret agreements when the contract is ambiguous and susceptible to multiple meanings Generally taken from contract law Not mutually exclusive – several may be used in the same case 5

6 Dictionary Definitions If there is doubt regarding what a word means in a context, and given a particular set of facts, the dictionary definition may provide a means of interpreting the provision 6

7 Avoidance of Harsh or Absurd Results If one interpretation would or could lead to an absurd result, and the other would avoid such results, the interpretation that avoids a harsh or absurd result is preferred. 7

8 Giving Effect to All Words If one interpretation would negate another provision of the collective bargaining agreement, that interpretation should be avoided 8

9 To Express Something or Some Things is to Exclude Things not Expressed “Upon ratification of this contract (November 14, 2002) a one-time amnesty will be granted to all employees such that all previous warning steps of discipline related to Article VI, section 1 of this agreement will be dropped from the employee's record. This amnesty excludes Last Chance Agreements.” 9

10 General vs. Specific Language When general language conflicts with specific language, the specific language governs Example – Seniority Provision “The Seniority of an employee shall terminate if... the employee is absent... for one (1) year for any reason whatsoever,” – Sickness or Injury Provision “Sickness or injury incurred after the date of employment shall not be cause for discharge...” 10

11 Words Must Be Interpreted in Context “SECTION 27. VACATIONS – Employees transferred to cover a vacation period shall work for the duration of the said vacation period. Employees temporarily transferred to a nonvacation position shall be limited to fifteen (15) working days. Should the position have a higher rate of pay, the employee transferred will receive the higher rate of pay.” 11

12 The Same Words Mean the Same Thing, Different Words Mean Different Things SECTION 18: WORK HOURS AND SHIFT DIFFERENTIAL A. ELECTRICIAN TRANSIT AND SIGN WORKER: 1. WORK HOURS: The regular first shift working hours shall be an eight (8) hour shift, SHIFT DIFFERENTIAL: The Agency may establish a second shift of eight hours,... B. ELECTRICIAN METROLINK: 1. WORK HOURS: The regular first shift work hours for employees in this classification shall be eight (8) hours SHIFT DIFFERENTIAL: The Agency may establish a second shift of eight hours..., The Agency may establish a third shift of eight hours..., C. SELECTION OF SHIFT. Employees in the class of Electrician Transit, Electrician Metrolink, or Sign Worker may exercise seniority to select a work shift within the classification when a job is vacant or when there is change in regular work hours or days off. 12

13 Interpretation Against the Drafter It is the obligation of the drafter to make his/her intentions clear. 13

14 Contract Silence Why? – Unanticipated events – Anticipated but unlikely Criteria – Negotiating History – Past Practice – Remand to the Parties 14

15 Custom and Past Practice What is a past practice? What is the relationship of a past practice to the CBA? 15

16 What is a Past Practice? A pattern of prior conduct consistently adhered to in recurring similar situations so as to demonstrate that it has been mutually accepted by the parties as the appropriate course of action – May be frequent – Infrequent but used each time the situation occurred Most common situation Bi-State Development Agency, 114 LA 1208,

17 What is the relationship of a past practice to the CBA? Will only apply when contract is ambiguous or silent. A past practice cannot overrule specific contract language. – Primacy of the Written Agreement – Waiver of a Management Right Can amend written words to the contrary. – Industrial self-governance model 17


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