StaffCo, a professional employer organization, took over employment of the non-physician staff at a New York medical center in May 2011. StaffCo signed a collective bargaining agreement with the union and agreed to make contributions to the pension plan. The agreement expired in 2012, and negotiations stalled. StaffCo signed a contract extension that provided for continued contributions until May 22, 2014. The company stopped making contributions at that time.
The union filed an unfair labor practice charge resulting in a complaint alleging that StaffCo violated the National Labor Relations Act (NLRA) by failing to maintain the status quo after the extended collective bargaining agreement expired. In other words, the union thought that the company should continue to make pension contributions despite the expired agreement.
The ALJ concluded that the pension contributions were a mandatory subject of bargaining and that StaffCo acted unlawfully when it implemented unilateral change (stopped making contributions) before the parties reached impasse. StaffCo pointed out that the pension plan documents provided that its obligation ceased at the end of the contract, but the ALJ found that there was no clear and unmistakable waiver of union bargaining rights.
Even if the pension plan would not accept contributions because of the expired agreement, the ALJ found that the company was required to calculate the pension contributions and set them aside until the parties reached a new agreement or impasse. If the plan rejects the contributions, the ALJ suggested making the payments to “an escrow account as negotiated with the Union.” Employers that operate under the long-existing law that many contract obligations cease when a collective bargaining agreement expires must take heed of the Board’s continued erosion of that law.