Contract Interpretation

1
Contract Interpretation

• CBAs
• 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 cant be anticipate
• Intentionally
• Parties unable to agree on specific language but
  dont 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