Contract Interpretation

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

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)

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.”

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

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

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

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.

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

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.”

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 . . .”

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.”

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, . . . • 2. 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 . . . • 2. 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.

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

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

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

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, 1214-15

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