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Manufacturers and retailers that have long relied on a complex web of contractors and subcontractors to supply necessary parts and materials may face a new risk. A recent decision limiting the effectiveness of a no-strike clause in a collective bargaining agreement may create an additional risk to that supply chain, if not to the employer’s own uninterrupted operations.

No-Strike Clauses

  • Most CBAs contain some form of a no-strike clause. They are intended to protect against any interruption to production due to labor unrest during the term of the agreement.
  • The Supreme Court has long deemed a strike in violation of a no-strike clause a breach of the collective agreement which a federal district court could enjoin.
  • BUT — that assumption may no longer be wholly valid as demonstrated by a recent decision by a federal district court. Just Born, Inc. v. Local Union No. 6, Bakery Workers, 2017 BL 466136 (ED Pa. 2017).

Just Born, Inc. v. Local Union No. 6, Bakery Workers

  • The case arose when the parties were negotiating a successor collective agreement. As is typical when a new agreement is not reached by the termination date of the expiring agreement, the company and the union agreed to extend the agreement while the parties continued to negotiate.
  • Then — the union struck during the extension and the employer sought an injunction.
  • The district court judge ruled that the plain language of the no-strike clause did not bar an economic strike over a successor agreement even though the expiring agreement remained in effect.
  • In ruling, the court stated that due to limiting language in the no-strike clause that clause only applied to disputes which were subject to the grievance and arbitration procedure. And, since the grievance and arbitration procedure by its terms only applied to disputes over the application or interpretation of the existing collective agreement, the no-strike clause did not apply to an economic strike over the terms of a successor agreement.

Potential Impact

  • Just Born has the potential to return labor relations to the period before the Supreme Court’s decision in Boys Market, Inc. v. Retail Clerks Union, 398 US 235 (1970) when wildcat strikes during the term of an agreement were common place and supply chains were unreliable.

Employer To-Dos

  • Examine the no-strike clause in all of your agreements, as well as the agreements of supply chain vendors to determine how broadly or narrowly the no-strike clause is drawn.
  • Even narrowly drawn no-strike clauses may prove effective if the parties’ collective agreement contains a broad grievance and arbitration clause and a vigorous zipper clause. If the risk of interruption due to a faulty no-strike clause is too great, modifying the no-strike clause should become a top priority in the next round of negotiations.

If you would like a review or evaluation of the integrity of the no-strike clauses in your collective bargaining agreement, contact your Baker McKenzie attorney.