The recent case of Aurora Contractors Inc. v. Constr. & Gen. Bldg. Laborers Local 79 (Court: U.S. District Court for the Southern District of New York, U.S., District Judge Lorna Schofield, Case Number: 20 Civ. 6072) illustrates the importance of strictly adhering to the provisions of the Collective Bargaining Agreement when seeking to terminate the relationship with the Union.
The Mason Tenders District Council of Greater New York and Long Island (the “Union”) is a labor organization that enters into collective bargaining agreements with employers on behalf of its constituent unions including Contractor. Contractor entered into a Collective Bargaining Agreement (the “Agreement”) with the Union.
The Agreement contains the following evergreen provision at Article XII:
This Agreement shall become effective and binding upon the parties hereto on the 1st day of July, 2002, and remain in full effect through June 30, 2005, and shall renew from year to year thereafter unless either party hereto shall give written notice to the other of its desire to modify, amend, or terminate this Agreement. Such notice must be given in writing delivered by certified mail, postage prepaid, at least sixty days, but not more than ninety days, before the expiration date of this Agreement.
In January 2015, Contractor orally notified the Union that Contractor would not renew the Agreement that was set to expire on June 30, 2015. On April 30, 2015, sixty days before the expiration date, Contractor mailed a letter to the Union purporting to terminate an agreement between a different contractor and a different Union. On May 12, 2015, Contractor sent a second letter to the Union informing the Union that the Contractor will not be renewing its Collective Bargaining Agreement effective July 1, 2015. The Union did not respond to either letter.
The Court in determining the arbitrability of a grievance pursuant to the Agreement’s provisions held that the Agreement was never terminated and that the arbitration provision is still operative.
The Agreement provides detailed termination procedures to prevent renewal, specifically that notice of termination must be sent by certified mail between sixty and ninety days prior to the expiration date of the Agreement. Contractor did not send notice by certified mail. Further, Contractor’s first letter, purported to terminate an agreement with an entity not involved in this matter. Contractor’s “correction letter” sent on May 12, 2015, was outside of the notice period specified by Article XII of the Agreement. Because Contractor did not follow the specific requirements to terminate the Agreement the Agreement has not been terminated.