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Modification or Termination of a Collective Bargaining Agreement

The Labor-Management Relations Act (LMRA) imposes upon employers and labor unions a “mutual obligation . . . to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an agreement or any question arising thereunder.” The LMRA also imposes rules on employers and unions once a collective bargaining agreement is reached between the parties with regard to whether and how a collective bargaining agreement may be modified or terminated.

The LMRA provides that, in order to modify or terminate a collective bargaining agreement, the party seeking to modify or terminate the agreement must provide notice of the intention to modify or terminate the agreement 60 days before the agreement is to expire. If the contract has no expiration date, the notice must be given 60 days prior to the time the party proposes that the modification or termination take effect. In addition to providing notice, the party seeking to modify or terminate the agreement must offer to meet with the other party to negotiate a new contract or modified contract. In addition, the Federal Mediation and Conciliation Service (FMCS) must be notified 30 days after notice is given if the dispute between the parties is not resolved, along with any state agencies that function as a counterpart to the FMCS. The FMCS is an independent agency that provides free, non-mandatory mediation services and fee-based arbitration services to employers and employee representatives.

During the 60-day notice period, or until the contract expires, whichever is later, all parties must abide by the terms of the contract then in force and may not conduct a strike or a lock-out. If notice is not given at least 60 days prior to the expiration of the existing agreement, the terms of the agreement continue in force for the full 60 days, regardless of the fact that the contract has expired. In addition, if the FMCS is not timely notified, the bar on strikes and lock-outs will continue until the full notice period has elapsed. Because of these provisions barring strikes and lock-outs, the notice periods are sometimes referred to as “cooling-off periods.”

There are certain special rules that apply to the health care industry. For a collective bargaining agreement in which one of the parties is a health care institution, notice of the intent to modify or terminate the agreement must be given 90 days prior and the FMCS must be notified 60 days prior. Although in general the FMCS does not provide mediation services unless requested by the parties to a dispute, the LMRA requires the FMCS to contact the parties and attempt to mediate an agreement when one of the parties is a health care institution.