Intl Union of Operating Eng v. Allied Erecting & Dismantling

Filing

NOT PRECEDENTIAL OPINION Coram: JORDAN, VANASKIE and VAN ANTWERPEN, Circuit Judges. Total Pages: 17. Judge: VAN ANTWERPEN Authoring, Judge: VANASKIE Dissenting.

Case: 13-2160

Document: 003111525331

Page: 1

Date Filed: 02/04/2014

NOT PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
_____________
No. 13-2160
_____________
INTERNATIONAL UNION OF OPERATING ENGINEERS, LOCAL UNION NO. 542
v.
ALLIED ERECTING & DISMANTLING CO., INC,
Appellant
______
On Appeal from the United States District Court
for the Eastern District of Pennsylvania
(D.C. Civil No. 2:12-cv-06579)
District Judge: Honorable Berle M. Schiller
______
Argued on December 16, 2013
Before: JORDAN, VANASKIE, and VAN ANTWERPEN, Circuit Judges.
(Filed: February 04, 2014)
______
Edward R. Noonan, Esq. [ARGUED]
Eckert, Seamans, Cherin & Mellot
1717 Pennsylvania Avenue, N.W., 12th Floor
Washington, DC 20006
Counsel for Appellant
Regina C. Hertzig, Esq. [ARGUED]
Cleary, Josem & Trigiani
325 Chestnut Street
Constitution Place, Suite 200
Philadelphia, PA 19106
Counsel for Appellee

Case: 13-2160

Document: 003111525331

Page: 2

Date Filed: 02/04/2014

______
OPINION OF THE COURT
______
VAN ANTWERPEN, Circuit Judge.
Appellant Allied Erecting & Dismantling Co., Inc. (“Allied”) appeals the District
Court for the Eastern District of Pennsylvania’s declaratory judgment in favor of the
International Union of Operating Engineers, Local Union No. 542 (“Union”), holding
that their collective bargaining agreements were indefinite, contrary to the aims of federal
labor law, and terminable by either party with reasonable notice. Int’l Union of Operating
Eng’rs, Local Union No. 542 v. Allied Erecting & Dismantling Co., No. 12-6579, 2013
WL 1234729, at *3–4 (E.D. Pa. Mar. 26, 2013). For the reasons that follow, we will
vacate the decision of the District Court and remand for further proceedings.
I.

BACKGROUND

Writing solely for the parties, we briefly review the essential facts. In 1992, the
parties entered into two collective bargaining agreements pertaining to work dismantling
a closed steel plant in Fairless Hills, Pennsylvania.1 The agreements established wages,
working conditions, and other terms.2 The Fairless Hills project continues to date, and the
Union anticipates it to continue at least another five years. (Compl. ¶ 13.)

1

Each agreement covers a separate bargaining unit. The “Operator Agreement” covers
equipment operators and utility personnel. The “Helper Agreement” covers helpers. The
relevant provisions are identical.
2
The agreements provided no method to renegotiate these terms. However, in 2004,
Allied agreed to wage and benefit increases. Allied also recently agreed to increase
contributions to the employees’ healthcare plan. The record is unclear when this
occurred, but the precise date does not affect our decision. (Appellant Br. at 4 (most
2

Case: 13-2160

Document: 003111525331

Page: 3

Date Filed: 02/04/2014

The agreements define the Fairless Hills project as “[Allied’s] jobsite at the USX
Corporation Fairless Hills Pennsylvania facility at which [Allied] performs dismantling
work on decommissioned property pursuant to a contract with USX Corporation (herein
referred to as the ‘Project’).” (Joint Appendix “JA” at 63, 83.) USX decides what is to be
dismantled by Allied at the Fairless Hills project. Article I, Section 4 of the agreements
states that “[i]n the event [Allied] is successful in procuring dismantling work at jobsites
other than the Project within the Union’s geographical jurisdiction, [Allied], in its
complete discretion, may elect to extend this Agreement to such other jobsites on a
jobsite-by-jobsite basis.” (Id. (emphasis added).) The termination provision of each
agreement provides that
this Agreement shall terminate upon [Allied’s] completion of the Project.
As to any jobsite to which this Agreement is extended on a jobsite-byjobsite basis[,] . . . the Agreement and [Allied’s] recognition of the Union
for employees employed at such jobsite shall terminate upon the
completion of [Allied’s] work at such jobsites.
(Id. at 78, 97.) The agreements also contain a severability clause3: “Any provision of this
Agreement which now or subsequently is found . . . to contravene [the] law . . ., shall be
suspended in operation . . . . Such suspension shall not affect the operation or validity of
the remainder of the provisions of this Agreement.” (Id. at 77, 96.)
In August, 2011, the Union notified Allied that it intended to terminate the
agreements and requested negotiations for successor agreements. Allied filed a complaint

recent modification occurred in 2009)); (Appellee Br. at 5 (2010)); (Compl. ¶ 11 (2008));
(Answer & Countercl. ¶ 12 (2009)).
3
The severability clause is Article XXI of the Operator Agreement and Article XX of the
Helper Agreement.
3

Case: 13-2160

Document: 003111525331

Page: 4

Date Filed: 02/04/2014

with the National Labor Relations Board (“NLRB”), alleging that such notice violated the
National Labor Relations Act (“NLRA”). The NLRB Regional Director dismissed the
charge and Allied appealed. The NLRB held Allied’s appeal in abeyance during the
pendency of the proceedings below. The NLRB Office of Appeals then terminated its
consideration of Allied’s appeal following the issuance of the District Court’s opinion.
The Union requested the District Court to declare the agreements terminable upon
reasonable notice, which the Union claimed it provided.4 (See Compl. ¶¶ 18, 20.) Allied
argued that the termination provisions were valid and sought a declaration that the
agreements remained in effect until completion of the Fairless Hills project. (See Answer
¶ 3.) The District Court held that the agreements were of “indeterminate duration” and
were “inconsistent with the aims of federal labor law.” Allied Erecting & Dismantling
Co., 2013 WL 1234729, at *3. Therefore, the parties could terminate them upon
reasonable notice. Id. at *4. Allied appealed.
II.5

DISCUSSION

“[F]ederal law governs the construction of collective bargaining agreements, [and]
traditional rules of contract interpretation apply when not inconsistent with federal labor
law.” Teamsters Indus. Emps. Welfare Fund v. Rolls–Royce Motor Cars, Inc., 989 F.2d

4

In the alternative, the Union claimed that the agreements were invalid due to unilateral
mistake, mutual mistake, and because they failed to reflect the true intention of the
parties. (Compl. ¶¶ 26, 30, 33.)
5
The District Court had jurisdiction pursuant to Section 301 of the Labor Management
Relations Act of 1947, 29 U.S.C. § 185. See, e.g., Mack Trucks, Inc. v. UAW, 856 F.2d
579, 587 (3d Cir. 1988). This Court has jurisdiction under 28 U.S.C. § 2201. We exercise
plenary review over conclusions of law when reviewing a decision to grant a declaratory
judgment. Borden v. Sch. Dist. of E. Brunswick, 523 F.3d 153, 174 n.17 (3d Cir. 2008).
4

Case: 13-2160

Document: 003111525331

Page: 5

Date Filed: 02/04/2014

132, 135 (3d Cir. 1993) (citation omitted). “If less than all of an agreement is
unenforceable [as against public policy], a court may nevertheless enforce the rest of the
agreement in favor of a party who did not engage in serious misconduct if the
performance as to which the agreement is unenforceable is not an essential part of the
agreed exchange.” Restatement (Second) of Contracts § 184(1) (1981); see also Puleo v.
Chase Bank USA, N.A., 605 F.3d 172, 186 (3d Cir. 2010). A severability analysis requires
that we determine whether a contract provision is unenforceable, and, if so, whether it
may be severed from the remainder of the agreement. See Puleo, 605 F.3d at 186.
A.

Article I, Section 4 is unenforceable.

Labor contracts of indefinite duration contravene federal labor policy and are
terminable at will. E.g., Montgomery Mailers’ Union No. 127 v. Advertiser Co., 827 F.2d
709, 715 (11th Cir. 1987). However, a contract may terminate upon a specified event
rather than a predetermined date. E.g., UAW v. Randall Div. of Textron, Inc., 5 F.3d 224,
229 (7th Cir. 1993).
The District Court concluded that the agreements were of indefinite duration and
terminable by both parties with reasonable notice. Allied Erecting & Dismantling Co.,
2013 WL 1234729, at *3. It concurred with the Eleventh Circuit’s reasoning in
Montgomery Mailers’ Union, 827 F.2d at 715–16. The contract therein “continue[d] in
effect for such reasonable time . . . as may be required for negotiation of a new
agreement.” Id. at 715. The union argued that under this provision, the agreement
terminated only upon successful negotiation of a new agreement. Id.

5

Case: 13-2160

Document: 003111525331

Page: 6

Date Filed: 02/04/2014

The Eleventh Circuit noted that the union, which was disinclined to enter into a
new agreement, “could perpetuate the existing contract by continuing negotiations but
never reaching an agreement.” Id. “The side not desiring a change could refuse to agree .
. . . Each side could stand entrenched knowing the contract would continue as it was. The
side desiring to alter the terms or conditions of the relationship would never have a prayer
of success.” Id. (quoting Kaufman & Broad Home Sys. v. Int’l Brotherhood of Firemen,
607 F.2d 1104, 1110 (5th Cir. 1979)). This was “contrary to fundamental principles of
law, our established national labor relations policy and the intent of Congress expressed
in the Labor Management Relations Act of 1947.” Id.
The District Court found that the instant agreements reached the same untenable
result. Allied Erecting & Dismantling Co., 2013 WL 1234729, at *3. It reasoned that, as
in Montgomery Mailers’ Union, one party (Allied) could extend the agreements
indeterminately. Id. It enumerated three examples: Allied could stall the Fairless Hills
project, contract for additional work on that project, or “in its complete discretion,
contract for additional work on other projects, extend the agreements to that additional
work, and subsequently bind the Union to the agreements for an unknown and
perpetually endless time period.” Id. This would freeze wages and benefits indefinitely
and prevent workers from negotiating pay raises or additional benefits. Id. The District
Court concluded that the aims of federal labor law required allowing the parties to
terminate such indefinite agreements. Id. (citing 29 U.S.C. § 151). Therefore, either party
could terminate the agreements upon reasonable notice. Id. at *4.

6

Case: 13-2160

Document: 003111525331

Page: 7

Date Filed: 02/04/2014

On appeal, Allied argues that the agreements are not indefinite because they
terminate upon the occurrence of a specified event—the completion of the Fairless Hills
project. See, e.g., Randall Div. of Textron, 5 F.3d at 229. Even if Allied extended the
agreements to other projects, Allied claims those agreements would also terminate when
the projects concluded. Furthermore, Allied argues that the District Court’s analogy to
Montgomery Mailers’ Union is misplaced because that case narrowly applies only when
post-expiration clauses extend an agreement indefinitely pending the negotiation of a new
agreement.
Allied argues that, even if Montgomery Mailers’ Union applies, the District Court
erred in concluding that Allied has unilateral control over the agreements’ termination. It
notes that Allied’s client, and not it, controls the length of the project and that there is no
allegation Allied is stalling. Next, it advances numerous reasons why its “complete
discretion” over extending the agreement does not render it “indefinite.”
First, it argues that “each extension creates a new and separate project agreement,”
which terminates upon completion of that particular project. (Appellant Br. at 14.)
Second, because each extension creates a “new” agreement for a distinct bargaining unit,
Allied claims that the Union completely controls whether it is bound because it can
always “refus[e] the extension through a valid disclaimer of interest in representing such
bargaining unit.” (Id.) Third, even if the District Court correctly uncovered the possibility
of perpetual agreements, it failed to recognize that, as pertains to Fairless Hills, the
agreements distinctly terminate when work is completed. (Id. at 14–15.) Thus “even

7

Case: 13-2160

Document: 003111525331

Page: 8

Date Filed: 02/04/2014

assuming that the agreements could ‘go on forever’ [by extension to other jobsites] it is
impossible for either to go on forever at Fairless Hills.” (Id. at 15.)
We concur with the District Court that Allied’s complete discretion in Article I,
Section 4 of the agreements over whether to extend these agreements to other jobsites
renders the agreements indefinite. The agreements’ plain language rebuts Allied’s claim
that each extension creates a “new and separate project agreement.” (Id. at 14.) Article I,
Section 4 and the termination provision refer to the extension of “this Agreement.” (JA at
63, 78, 83, 97 (emphasis added).) Article I, Section 4 merely grants Allied the power to
“extend” the agreements; it does not create “new and separate” agreements. Cf. Nibbs v.
Felix, 726 F.2d 102, 104–05 (3d Cir. 1984) (holding that arbitration provisions were still
binding after contract’s termination because they were informally extended). Thus, the
1992 agreements (including modifications), and no others, would apply to other jobsites.
Allied unpersuasively contends that the agreements are not indefinite because they
terminate upon completion of the Fairless Hills project (and that extensions terminate
upon completion of work at new jobsites). Article I, Section 4 allows Allied, in its sole
discretion, to extend the agreements to new projects. Even worse, at each new jobsite, the
governing agreements would still contain this extension clause, permitting Allied to
unilaterally extend the agreements to still other projects, ad infinitum. This would be true
long after work at Fairless Hills concludes. All the while, Allied need never update the
employment terms.6

6

Allied’s brief does not contest the District Court’s conclusion that perpetuating the
agreements indeterminately would “lock in the wages and benefits designated in the
8

Case: 13-2160

Document: 003111525331

Page: 9

Date Filed: 02/04/2014

Thus, although the facts here are distinguishable from Montgomery Mailers’
Union, the rationale is consistent. The agreements are indefinite because one party
unilaterally controls the termination event.7 Allied may, in its complete discretion, extend
the agreements indefinitely into the future. “The side desiring to alter the terms or
conditions of the relationship would never have a prayer of success.” Montgomery
Mailers’ Union, 827 F.2d at 715 (quoting Kaufman & Broad Home Sys., 607 F.2d at
1110).
The District Court also rested its conclusion on Allied’s hypothetical ability to
“stall” the project indefinitely, thereby rendering the agreements potentially indefinite as
applied to the Fairless Hills project. 8 Allied Erecting & Dismantling Co., 2013 WL

agreements indefinitely, depriving workers of the ability to negotiate pay raises or
additional benefits.” Allied Erecting & Dismantling Co., 2013 WL 1234729, at *3.
7
Allied’s argument that the Union can refuse the extension by disclaiming interest in
future bargaining units serves only to demonstrate how pervasive is Allied’s control over
termination. This is even more extreme than Kaufman & Broad Home Systems in which
the Court noted that “there is nothing in the agreement as interpreted by [the employer]
that would keep it from continuing year after year, thus forcing the [u]nion to choose
between termination of the entire agreement and [indefinite continuation].” 607 F.2d at
1109.
8
The District Court also concluded that Allied could hypothetically render the
agreements indefinite by contracting for additional work on the Fairless Hills Project.
However, the Union concedes that one jobsite cannot contain an infinite amount of work.
(See Brief of Appellee at 6 n.4 (“[T]he Fairless Hills dismantling projects could only
necessarily involve a finite number of buildings.”).) Indeed, the Union believes the work
at Fairless Hills could conclude in five years. (Compl. ¶ 13.) Obviously, under the terms
of the agreements, the work will terminate at some point in time. Additionally, the
agreements limit the term “Project” to “[Allied’s] jobsite at the USX Corporation Fairless
Hills Pennsylvania facility at which [Allied] performs dismantling work on
decommissioned property pursuant to a contract with USX Corporation.” (JA at 63, 82–
83). Nothing in the agreements or the record purports to permit Allied to “contract[] for
additional work” beyond this bargained-for scope. See Allied Erecting & Dismantling
Co., 2013 WL 1234729, at *3.
9

Case: 13-2160

Document: 003111525331

Page: 10

Date Filed: 02/04/2014

1234729, at *3. We find the trajectory of this argument troubling and reject it. We note
especially that the District Court only found that Allied “could” extend the project by
stalling, not that it ever had done so. Id. To begin with, it is difficult to understand how
Allied “could” unilaterally stall the project since the dismantling is being done pursuant
to a contract with a third party, USX. Furthermore, it is obvious that such a theoretical
analysis, taken to its extreme, could render indeterminate all contracts that terminate upon
completion of a project rather than a pre-determined date because one party could always
hypothetically stall. We do not say that in an appropriate case a district court may never
consider stalling—hypothetical or otherwise—as a factor; however, we reject the District
Court’s approach, in which hypothetical stalling is a sufficient cause of indefiniteness.
We also reject any notion that contracts which terminate upon completion of work at a
particular jobsite are per se indeterminate.
We are required to construe labor contracts in light of the “practice, usage and
custom pertaining to all such agreements.” Transp.–Commc’n Emp. Union v. Union Pac.
R.R., 385 U.S. 157, 161 (1966). Additionally, we must recognize the “‘dual purpose’ in
the Taft–Hartley Act—to substitute collective bargaining for economic warfare and to
protect the right of employees to engage in concerted activities for their own benefit.”
NLRB v. Lion Oil Co., 352 U.S. 282, 289 (1957) (citing Mastro Plastics Corp. v. NLRB,
350 U.S. 270, 284 (1956)). In light of these considerations, we hold that permitting
Article I, Section 4 to extend the agreements indefinitely into the future “would be
inconsistent with the aims of federal labor law.” Allied Erecting & Dismantling Co., 2013
WL 1234729, at *3 (citing 29 U.S.C. § 151 (finding that “protection by law of the right
10

Case: 13-2160

Document: 003111525331

Page: 11

Date Filed: 02/04/2014

of employees to organize and bargain collectively safeguards commerce” and declaring a
policy of “encouraging the practice and procedure of collective bargaining”)).
B.

Article 1, Section 4 is severable.

This does not end the analysis, however. The agreements contain a severability
clause which suspends the operation of any provision found “to contravene a national,
state, or local law.” (JA at 77, 96.) If such suspension occurs, the operation or validity of
the remainder of the agreements’ provisions is to remain unaffected. (Id.)
“[T]raditional rules of contract interpretation apply when not inconsistent with
federal labor law.” Rolls–Royce, 989 F.2d at 135. “If less than all of an agreement is
unenforceable [as against public policy], a court may nevertheless enforce the rest of the
agreement . . . if the performance as to which the agreement is unenforceable is not an
essential part of the agreed exchange.” Restatement (Second) of Contracts § 184(1); see
also Puleo, 605 F.3d at 186. Whether performance is essential turns on its “relative
importance in the light of the entire agreement between the parties.” Restatement
(Second) of Contracts § 184, cmt. a; see also Nino v. Jewelry Exch., Inc., 609 F.3d 191,
206 (3d Cir. 2010)).
In supplemental briefing and at oral argument in open court both parties conceded
that, if Article I, Section 4 is found to be unenforceable, the severability clause suspends
its operation. Furthermore, the parties also agree, and we find, that Article I, Section 4 is
not an essential part of the agreed exchange. The primary purpose of the agreements at
issue is to establish wages, benefits, working conditions, and dispute resolution
procedures for the covered bargaining units at Allied’s Fairless Hills project. (See JA at
11

Case: 13-2160

Document: 003111525331

Page: 12

Date Filed: 02/04/2014

62, 82.) This goal can be accomplished without the extension provision, which pertains to
other jobsites. Cf. Prusky v. Reliastar Life Ins. Co., 445 F.3d 695, 699–700 (3d Cir. 2006)
(holding that nonessential and illegal late-trading provisions in life insurance contract
were severable).
To the extent that Article I, Section 4 and the portions of those Sections which
reference it permit the agreements to be extended indefinitely into the future, these
provisions should be deemed unenforceable and severed pursuant to the severability
clause. What remains of the agreements is not indefinite because it terminates upon the
occurrence of a specified event—completion of the Fairless Hills project. See, e.g.,
Randall Div. of Textron, 5 F.3d at 229. This outcome is consistent with federal labor
policy and our jurisprudence. The federal labor policy promoting labor relations stability
does not permit parties to unilaterally repudiate collective bargaining agreements during
the agreed-to term. See Int’l Assoc. of Bridge, Structural & Ornamental Iron Workers,
Local 3 v. NLRB, 843 F.2d 770, 778 (3d Cir. 1988) [Deklewa].9 While protecting

9

The Union attempts to distinguish Deklewa as applying only to § 8(f) agreements;
however, Deklewa suggests a broader application for its principle. See, e.g., 843 F.2d at
773, 778 (resolving in the affirmative “whether during its term a § 8(f) agreement is as
binding and enforceable as any other union agreement” and noting the NLRB’s rationale
that “a right of unilateral repudiation is . . . antithetical to traditional principles of
collective-bargaining under the [NLRA]” (emphasis added)); see also Builders,
Woodworkers & Millwrights, Local Union No. 1 (Glen Falls Contractors Ass’n), 341
N.L.R.B. 448, at *1 n.2 (2004) (“Regardless of whether this may have been a 9(a) or 8(f)
relationship, the . . . employers were not free to unilaterally repudiate their agreement
with the Carpenters and recognize the Respondent.”); John Deklewa & Sons, 282
N.L.R.B. 1375, 1386 (1987) (“Our new analytic framework also better fulfills general
statutory policies and integrates Section 8(f) with other sections in the Act. In this regard,
the policy of labor relations stability in the Act generally favors requiring parties to
adhere to a voluntarily adopted collective-bargaining agreement.”).
12

Case: 13-2160

Document: 003111525331

Page: 13

Date Filed: 02/04/2014

collective bargaining is also an overarching objective of the NLRA, we have recognized
that this goal is strengthened by requiring adherence to the terms of labor contracts. See,
e.g., Michota v. Anheuser-Busch, Inc., 755 F.2d 330, 335 (3d Cir. 1985) (“Integrity of the
collective bargaining process under the [NLRA] is critical to the stability of labor
relations. The ability of duly elected bargaining representatives to bargain effectively is
dependent in part upon its ability to bind the employees it represents to the terms of a
negotiated agreement.”).
The District Court’s opinion did not address the Union’s remaining claims:
unilateral mistake, mutual mistake, and reformation based on party intent. (See Compl. ¶¶
26, 30, 33.) We decline Allied’s invitation to decide these issues on appeal.
III.

CONCLUSION

For the foregoing reasons, we will vacate the District Court’s declaratory
judgment in favor of the Union and remand the case to that Court to determine the
Union’s remaining claims in a manner consistent with this Opinion.

13

Case: 13-2160

Document: 003111525331

Page: 14

Date Filed: 02/04/2014

VANASKIE, Circuit Judge, concurring in part and dissenting in part.
I agree with the majority’s conclusion that the extension provision of Article I,
Section 4 of the agreements is unenforceable. I part company with the majority,
however, with respect to the holding that the collective bargaining agreements are not of
indeterminate duration because they will terminate upon completion of the Fairless Hills
project, a project that has spanned more than three decades since the agreements were
negotiated. Indeed, there is no end in sight for the project, and I believe that is the
quintessential example of an indeterminate duration. Therefore, I respectfully dissent
from the majority’s conclusion that the collective bargaining agreements at issue are not
terminable at will by either party upon reasonable notice.
As the majority notes, “[f]ederal law governs the construction of collective
bargaining agreements, [and] traditional rules of contract interpretation apply when not
inconsistent with federal labor law.” Teamsters Indus. Emps. Welfare Fund v. Rolls–
Royce Motor Cars, Inc., 989 F.2d 132, 135 (3d Cir. 1993). In interpreting labor
contracts, the Supreme Court has instructed federal courts to “fashion from the policy of
our national labor laws” a body of substantive federal law. Textile Workers Union of
America v. Lincoln Mills of Ala., 353 U.S. 448, 456 (1957).
Employing this authority, federal courts have articulated the principle that “[l]abor
contracts of indeterminate duration are generally terminable at will upon reasonable
notice to the other party.” Communications Workers of America v. Southwestern Bell
Telephone Co., 713 F.2d 1118, 1123 n. 4 (5th Cir. 1983); Boeing Airplane Co. v. NLRB,
174 F.2d 988, 991 (D.C. Cir. 1949); Montgomery Mailers’ Union No. 127 v. Advertiser
1

Case: 13-2160

Document: 003111525331

Page: 15

Date Filed: 02/04/2014

Co., 827 F.2d 709, 715 (11th Cir. 1987). This is because our labor laws encourage
collective bargaining between labor organizations and employers as a means of both
ensuring “the friendly adjustment of industrial disputes arising out of differences as to
wages, hours, or other working conditions,” as well as safeguarding the “equality of
bargaining power between employers and employees.” 29 U.S.C. § 151. In the absence
of a periodic opportunity to adjust wages, hours, or working conditions, an indefinite
labor agreement becomes a tool that exacerbates the inequality of bargaining power
between employers and laborers, rather than providing a bulwark against it.
The majority acknowledges that the agreements as written cannot stand, as they
purport to give Allied the unilateral ability to extend the agreements indefinitely to any
new jobsites they desire. Rather than taking the remedial step of declaring the
agreements terminable at will by either party, the majority seeks to reform the indefinite
contracts to limit them to a definite duration. To do this, the majority strikes Article I,
Section 4. but leaves in place the provision indicating the agreements will terminate upon
the completion of “[Allied’s] jobsite at the USX Corporation Fairless Hills Pennsylvania
facility.” (App. 78)
The majority believes this fix renders the agreements definite and enforceable,
noting that the “Union concedes that one jobsite cannot contain an infinite amount of
work.” Maj. Op. at 9, fn. 8 (emphasis added). But indeterminate does not mean infinite.
Indeterminate is defined as “uncertain; not ascertained; not fixed; not made certain.”
Ballentine’s Law Dictionary 610 (3rd ed. 1969). For instance, an agreement that
provided that it would terminate upon a certain person’s death would be indeterminate
2

Case: 13-2160

Document: 003111525331

Page: 16

Date Filed: 02/04/2014

because, although a human lifespan is not infinite, its duration is not capable of being
ascertained in advance by the parties to the contract.
Although I agree that this case does differ from Montgomery Mailers Union, upon
which the District Court relied, in that neither party to the contracts possesses the
unilateral ability to extend the collective bargaining agreements in perpetuity, this case
similarly presents contracts whose duration cannot be fixed or ascertained by the parties
in advance of termination. The majority comforts itself that “the work at Fairless Hills
could conclude in five years” (Maj. Op. at 9, fn. 8), but when pressed at oral argument,
Allied’s counsel conceded that he had “no idea how long it could take” for the Fairless
Hills project to be completed. (Oral Arg. At 31:46-31:50). Uncertainty about the amount
of time the contracts will govern the relationship between the parties prevents the
members of the union from knowing how long they will have to continue to labor under
the existing contractual terms—negotiated more than twenty years ago—before being
permitted to renegotiate. The duration of the agreements is, therefore, “uncertain; not
ascertained; not fixed; not made certain.” Ballentine’s Law Dictionary at 610.
The majority’s conclusion that the agreements are not indeterminate because the
projects will be completed at some unknown time in the distant future thwarts federal
labor law’s preference for the negotiated adjustment of “industrial disputes arising out of
differences as to wages, hours, or other working conditions.” 29 U.S.C. § 151. In this
instance, it is the laborers whose terms and conditions of employment are frozen
indefinitely. In another instance, it may be the employer who becomes hostage to a
collective bargaining agreement of indefinite duration, negotiated perhaps at a time when
3

Case: 13-2160

Document: 003111525331

Page: 17

Date Filed: 02/04/2014

organized labor had the upper hand in bargaining. The point is that neither labor nor the
employer should be unable to negotiate the terms and conditions of employment on a
periodic basis. The majority’s holding effectively forecloses the union from doing so on
behalf of its members for however long it may take to complete the Fairless Hills project.
The majority notes that “federal labor policy promoting labor relations stability
does not permit parties to unilaterally repudiate collective bargaining agreements during
the agreed-to term.” Maj. Op. at 9 (citing Int’l Assoc. of Bridge, Structural &
Ornamental Iron Workers, Local 3 v. NLRB, 843 F.2d 770, 778 (3d Cir. 1988)
[Deklewa]). But Deklewa concerned a very different factual scenario—an employer’s
attempt to renege on a collective bargaining agreement with a fixed three-year term. Id.
at 772. I would not extend Deklewa to the type of agreements at issue here, which have
no ascertainable duration. In such cases, federal labor law’s interest in stability is
outweighed by its concern with equalizing bargaining power between labor organizations
and employers and preventing the ossification of disputed wages, hours, and working
conditions. See 29 U.S.C. § 151.
Because I believe considerations of federal labor policy weigh in favor of
allowing the parties to terminate the agreements at issue upon giving reasonable notice, I
respectfully dissent.

4