501 U.S.

190
111 S.Ct. 2215
115 L.Ed.2d 177

LITTON FINANCIAL PRINTING DIVISION, A DIVISION

OF LITTON BUSINESS SYSTEMS, INC., Petitioner,
v.
NATIONAL LABOR RELATIONS BOARD et al.
No. 90-285.
Argued March 20, 1991.
Decided June 13, 1991.

Syllabus
Among other things, the collective-bargaining agreement (Agreement)
between petitioner Litton and the Union representing the production
employees at Litton's printing plant broadly required that all differences as
to contract construction or violations be determined by arbitration,
specified that grievances that could not be resolved under a two-step
grievance procedure should be submitted for binding arbitration, and
provided that, in case of layoffs, length of continuous service would be the
determining factor "if other things such as aptitude and ability [were]
equal." The Agreement expired in October 1979. A new agreement had
not been negotiated when, in August and September 1980 and without any
notice to the Union, Litton laid off 10 of the workers at its plant, including
6 of the most senior employees, pursuant to its decision to close down its
cold-type printing operation. The Union filed grievances on behalf of the
laidoff employees, claiming a violation of the Agreement, but Litton
refused to submit to the contractual grievance and arbitration procedure, to
negotiate over its layoff decision, or to arbitrate under any circumstances.
Based on its precedents dealing with unilateral postexpiration
abandonment of contractual grievance procedures and postexpiration
arbitrability, the National Labor Relations Board (Board) held that Litton's
actions violated 8(a)(1) and (5) of the National Labor Relations Act
(NLRA). However, although it ordered Litton, inter alia, to process the
grievances through the two-step grievance procedure and to bargain with
the Union over the layoffs, the Board refused to order arbitration of the
particular layoff disputes, ruling that they did not "arise under" the expired

contract as required by its decision in Indiana & Michigan Electric Co.,

284 N.L.R.B. 53, and its interpretation of this Court's decision in Nolde
Bros., Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d
300. The Court of Appeals enforced the Board's order, with the exception
of that portion holding the layoff grievance not arbitrable, ruling that the
right to lay off in seniority order, if other things such as aptitude and
ability were equal, did arise under the Agreement.
Held: The layoff dispute was not arbitrable. Pp. 198-210.
(a) The unilateral change doctrine of NLRB v. Katz, 369 U.S. 736, 82 S.Ct.
1107, 8 L.Ed.2d 230 whereby an employer violates the NLRA if, without
bargaining to impasse, it effects a unilateral change of an existing term or
condition of employmentextends to cases in which an existing
agreement has expired and negotiations on a new one have yet to be
completed. See, e.g., Laborers Health and Welfare Trust Fund v.
Advanced Lightweight Concrete Co., 484 U.S. 539, 544, n. 6, 108 S.Ct.
830, 833, n. 6, 98 L.Ed.2d 936. However, since Hilton-Davis Chemical
Co., 185 N.L.R.B. 241, the Board has held that an arbitration clause does
not, by operation of the NLRA as interpreted in Katz, continue in effect
after expiration of a collective-bargaining agreement. Pp. 198-200.
(b) This Court will not extend the unilateral change doctrine to impose a
statutory duty to arbitrate postexpiration disputes. The Board's HiltonDavis Chemical Co. rule is both rational and consistent with the NLRA,
under which arbitration is a matter of consent and will not be imposed
beyond the scope of the parties' agreement. See, e.g., Gateway Coal Co. v.
Mine Workers, 414 U.S. 368, 374, 94 S.Ct. 629, 635, 38 L.Ed.2d 583. The
Board's rule is therefore entitled to deference. If parties who favor labor
arbitration during a contract's term also desire it to resolve postexpiration
disputes, they can draft their agreement to so indicate, to eliminate any
hiatus between expiration of the old and execution of the new agreement,
or to remain in effect until they bargain to impasse. Pp. 200-201.
(c) The Board's decision not to order arbitration of the layoff grievances in
this case is not entitled to substantial deference. Although the Board has
considerable authority to structure its remedial orders to effectuate the
NLRA's purposes and to order the relief it deems appropriate, its decision
here is not based on statutory considerations, but rests upon its
interpretation of the Agreement, applying Nolde Bros. and the federal
common law of collective bargaining. Arbitrators and courts, rather than
the Board, are the principal sources of contract interpretation under 301
of the Labor Management Relations Act. Deferring to the Board in its

interpretation of contracts would risk the development of conflicting

principles. Pp. 201-203.
(d) Nevertheless, as Nolde Bros. recognized, a postexpiration duty to
arbitrate a dispute may arise from the express or implied terms of the
expired agreement itself. Holding that the extensive obligation to arbitrate
under the contract there at issue was not consistent with an interpretation
that would eliminate all duty to arbitrate upon expiration, Nolde Bros.,
supra, 430 U.S., at 255, 97 S.Ct., at 1074, found a presumption in favor of
postexpiration arbitration of disputes unless negated expressly or by clear
implication, so long as such disputes arose out of the relation governed by
contract. Pp. 203-204.
(e) The Agreement's unlimited arbitration clause places it within the
precise rational of Nolde Bros., such that other Agreement provisions
cannot rebut the Nolde Bros. presumption. P. 205.
(f) However, Nolde Bros. does not announce a broad rule that postexpiration grievances concerning terms and conditions of employment
remain arbitrable, but applies only where a dispute has its real source in
the contract. Absent an explicit agreement that certain benefits continue
past expiration, a postexpiration grievance can be said to arise under the
contract only where it involves facts and occurrences that arise before
expiration, where a postexpiration action infringes a right that accrued or
vested under the agreement, or where, under the normal principles of
contract interpretation, the disputed contractual right survives expiration
of the remainder of the agreement. And, as Nolde Bros. found, structural
provisions relating to remedies and dispute resolutione.g., an arbitration
provisionmay in some cases survive in order to enforce duties under the
contract. It is presumed as a matter of contract interpretation that the
parties did not intend a pivotal dispute resolution provision to terminate
for all purposes upon the Agreement's expiration. Pp. 205-208.
(g) Application of the foregoing principles reveals that the layoff dispute
at issue does not arise under the Agreement. Since the layoffs took place
almost one year after the Agreement expired, the grievances are arbitrable
only if they involve rights which accrued or vested under the Agreement
or carried over after its expiration. The layoff provision here does not
satisfy these requirements and, unlike the severance pay provision at issue
in Nolde Bros., cannot be construed as a grant of deferred compensation
for time already worked. The order of layoffs under the Agreement was to
be determined primarily with reference to "other [factors] such as aptitude
and ability," which do not remain constant, but either improve or atrophy

over time, and which vary in importance with the requirements of the
employer's business at any given moment. Thus, any arbitration
proceeding would of necessity focus upon whether such factors were
equal as of the date of the layoff decision and the decision to close down
the cold-type operation, and an intent to freeze any particular order of
layoff or vest any contractual right as of the Agreement's expiration
cannot be inferred. Pp. 208-210.
893 F.2d 1128 (CA9), reversed in part and remanded.
KENNEDY, J., delivered the opinion of the Court, in which
REHNQUIST, C.J., and WHITE, O'CONNOR, and SOUTER, JJ., joined.
MARSHALL, J., filed a dissenting opinion, in which BLACKMUN and
SCALIA, JJ., joined. STEVENS, J., filed a dissenting opinion, in which
BLACKMUN and SCALIA, JJ., joined.
Mathias J. Diederich, Torrance, Cal., for petitioner.
Lawrence G. Wallace, Washington, D.C., for respondent N.L.R.B. in
support of petitioner.
David A. Rosenfeld, San Francisco, Cal., for respondent Printing
Specialties.
Justice KENNEDY delivered the opinion of the Court.

This case requires us to determine whether a dispute over layoffs which

occurred well after expiration of a collective-bargaining agreement must be said
to arise under the agreement despite its expiration. The question arises in the
context of charges brought by the National Labor Relations Board (Board)
alleging an unfair labor practice in violation of 8(a)(1) and (5) of the
National Labor Relations Act (NLRA), 49 Stat. 449, as amended, 29 U.S.C.
158(a)(1) and (5). We interpret our earlier decision in Nolde Bros., Inc. v.
Bakery Workers. 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977).

* Petitioner Litton operated a check printing plant in Santa Clara, California.

The plant utilized both cold-type and hot-type printing processes. Printing
Specialties & Paper Products Union No. 777, Affiliated With District Council
No. 1 (Union), represented the production employees at the plant. The Union
and Litton entered into a collective-bargaining agreement which, with
extensions, remained in effect until October 3, 1979. Section 19 of the
Agreement is a broad arbitration provision: "Differences that may arise

between the parties hereto regarding this Agreement and any alleged violations
of the Agreement, the construction to be placed on any clause or clauses of the
Agreement shall be determined by arbitration in the manner hereinafter set
forth." App. 34.
3

Section 21 of the Agreement sets forth a two-step grievance procedure, at the

conclusion of which, if a grievance cannot be resolved, the matter may be
submitted for binding arbitration. Id., at 35.

Soon before the Agreement was to expire, an employee sought decertification

of the Union. The Board conducted an election on August 17, 1979, in which
the Union prevailed by a vote of 28 to 27. On July 2, 1980, after much
postelection legal maneuvering, the Board issued a decision to certify the
Union. No contract negotiations occurred during this period of uncertainty over
the Union's status.

Litton decided to test the Board's certification decision by refusing to bargain

with the Union. The Board rejected Litton's position and found its refusal to
bargain an unfair labor practice. Litton Financial Printing Division, 256
N.L.R.B. 516 (1981). Meanwhile, Litton had decided to eliminate its cold-type
operation at the plant, and in late August and early September of 1980, laid off
10 of the 42 persons working in the plant at that time. The laid off employees
worked either primarily or exclusively with the cold-type operation, and
included six of the eleven most senior employees in the plant. The layoffs
occurred without any notice to the Union.

The Union filed identical grievances on behalf of each laid off employee,
claiming a violation of the Agreement, which had provided that "in case of
layoffs, lengths of continuous service will be the determining factor if other
things such as aptitude and ability are equal." App. 30. Litton refused to submit
to the grievance and arbitration procedure or to negotiate over the decision to
lay off the employees, and took a position later interpreted by the Board as a
refusal to arbitrate under any and all circumstances. It offered instead to
negotiate concerning the effects of the layoffs.

On November 24, 1980, the General Counsel for the Board issued a complaint
alleging that Litton's refusal to process the grievances amounted to an unfair
labor practice within the meaning of 8(a)(1) and (5) of the NLRA, 29 U.S.C.
158(a)(1) and (5). App. 15. On September 4, 1981, an Administrative Law
Judge found that Litton had violated the NLRA by failing to process the
grievances. App. 114-115. Relying upon the Board's decision in American Sink

Top & Cabinet Co., 242 N.L.R.B. 408 (1979), the Administrative Law Judge
went on to state that if the grievances remained unresolved at the conclusion of
the grievance process, Litton could not refuse to submit them to arbitration.
App. 115-118. The Administrative Law Judge held also that Litton violated
8(a)(1) and (5) when it bypassed the Union and paid severance wages directly
to the 10 laid off employees, and Litton did not contest that determination in
further proceedings.
8

Over six years later, the Board affirmed in part and reversed in part the decision
of the Administrative Law Judge. 286 N.L.R.B. 817 (1987). The Board found
that Litton had a duty to bargain over the layoffs, and violated 8(a) by failure
to do so. Based upon well-recognized Board precedent that the unilateral
abandonment of a contractual grievance procedure upon expiration of the
contract violates 8(a)(1) and (5), the Board held that Litton had improperly
refused to process the layoff grievances. See Bethlehem Steel Co., 136 N.L.R.B.
1500, 1503 (1962), enforced in pertinent part, 320 F.2d 615 (CA3 1963). The
Board proceeded to apply its recent decision in Indiana & Michigan Electric
Co., 284 N.L.R.B. 53 (1987), which contains the Board's current understanding
of the principles of postexpiration arbitrability and of our opinion in Nolde
Bros., Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300
(1977). The Board held that Litton's "wholesale repudiation" of its obligation to
arbitrate any contractual grievance after the expiration of the Agreement also
violated 8(a)(1) and (5), as the Agreement's broad arbitration clause lacked

"language sufficient to overcome the presumption that the obligation to

arbitrate imposed by the contract extended to disputes arising under the contract
and occurring after the contract had expired. Thus, [Litton] remained 'subject to
a potentially viable contractual commitment to arbitrate even after the
[Agreement] expired.' " 286 N.L.R.B., at 818 (citation omitted).

10

Litton did not seek review of, and we do not address here, the Board's
determination that Litton committed an unfair labor practice by its unilateral
abandonment of the grievance process and wholesale repudiation of any
postexpiration obligation to arbitrate disputes.

11

In fashioning a remedy, the Board went on to consider the arbitrability of these

particular layoff grievances. Following Indiana & Michigan, the Board
declared its determination to order arbitration "only when the grievances at
issue 'arise under' the expired contract." 286 N.L.R.B., at 821 (citing Nolde
Bros., supra ). In finding that the dispute about layoffs was outside this
category, the Board reasoned as follows:

12

"The conduct that triggered the grievances . . . occurred after the contract had
expired. The right to layoff by seniority if other factors such as ability and
experience are equal is not 'a right worked for or accumulated over time.'
Indiana & Michigan, supra at 61. And, as in Indiana & Michigan Electric,
there is no indication here that 'the parties contemplated that such rights could
ripen or remain enforceable even after the contract expired.' Id. (citation
omitted). Therefore, [Litton] had no contractual obligation to arbitrate the
grievances." 286 N.L.R.B., at 821-822.

13

Although the Board refused to order arbitration, it did order Litton to process
the grievances through the two-step grievance procedure, to bargain with the
Union over the layoffs, and to provide a limited backpay remedy.

14

The Board sought enforcement of its order, and both the Union and Litton
petitioned for review. The Court of Appeals enforced the Board's order, with
the exception of that portion holding the layoff grievances not arbitrable. 893
F.2d 1128 (CA9 1990). On that question, the Court of Appeals was willing to
"assume without deciding that the Board's Indiana & Michigan decision is a
reasonably defensible construction of the section 8(a)(5) duty to bargain." Id., at
1137. The court decided, nevertheless, that the Board had erred, because the
right in question, the right to layoff in order of seniority if other things such as
aptitude and ability are equal, did arise under the Agreement. The Court of
Appeals thought the Board's contrary conclusion was in conflict with two later
Board decisions, where the Board had recognized that seniority rights may arise
under an expired contract, United Chrome Products, Inc., 288 N.L.R.B. 1176
(1988), and Uppco, Inc., 288 N.L.R.B. 937 (1988).

15

The court cited a second conflict, one between Indiana & Michigan and the
court's own interpretation of Nolde Bros. in Local Joint Executive Bd. of Las
Vegas Culinary Workers Union, Local 226 v. Royal Center, Inc., 796 F.2d 1159
(CA9 1986). In Royal Center, the Court of Appeals had rejected the argument
that only rights accruing or vesting under a contract prior to termination are
covered by the posttermination duty to arbitrate. Id., at 1163.

16

Litton petitioned for a writ of certiorari. Because of substantial disagreement as

to the proper application of our decision in Nolde Bros.,1 we granted review
limited to the question of arbitrability of the layoff grievances. --- U.S. ----, 111
S.Ct. 426, 112 L.Ed.2d 410.

II
A.

17

Sections 8(a)(5) and 8(d) of the NLRA, 29 U.S.C. 158(a)(5) and (d), require
an employer to bargain "in good faith with respect to wages, hours, and other
terms and conditions of employment." The Board has taken the position that it
is difficult to bargain if, during negotiations, an employer is free to alter the
very terms and conditions that are the subject of those negotiations. The Board
has determined, with our acceptance, that an employer commits an unfair labor
practice if, without bargaining to impasse, it effects a unilateral change of an
existing term or condition of employment. See NLRB v. Katz, 369 U.S. 736, 82
S.Ct. 1107, 8 L.Ed.2d 230 (1962). In Katz the union was newly certified and
the parties had yet to reach an initial agreement. The Katz doctrine has been
extended as well to cases where, as here, an existing agreement has expired and
negotiations on a new one have yet to be completed. See, e.g., Laborers Health
and Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539,
544, n. 6, 108 S.Ct. 830, 833, n. 6, 98 L.Ed.2d 936 (1988).

18

Numerous terms and conditions of employment have been held to be the

subject of mandatory bargaining under the NLRA. See generally 1 C. Morris,
The Developing Labor Law 772-844 (2d ed. 1983). Litton does not question
that arrangements for arbitration of disputes are a term or condition of
employment and a mandatory subject of bargaining. See id., at 813 (citing
cases); United States Gypsum Co., 94 N.L.R.B. 112, 131 (1951).

19

The Board has ruled that most mandatory subjects of bargaining are within the
Katz prohibition on unilateral changes. The Board has identified some terms
and conditions of employment, however, which do not survive expiration of an
agreement for purposes of this statutory policy. For instance, it is the Board's
view that union security and dues check-off provisions are excluded from the
unilateral change doctrine because of statutory provisions which permit these
obligations only when specified by the express terms of a collective-bargaining
agreement. See 29 U.S.C. 158(a)(3) (union security conditioned upon
agreement of the parties); 29 U.S.C. 186(c)(4) (dues check-off valid only
until termination date of agreement); Indiana & Michigan, 284 N.L.R.B., at 55
(quoting Bethlehem Steel, 136 N.L.R.B., at 1502). Also, in recognition of the
statutory right to strike, no-strike clauses are excluded from the unilateral
change doctrine, except to the extent other dispute resolution methods survive
expiration of the agreement. See 29 U.S.C. 158(d)(4), 163 (union's statutory
right to strike); Southwestern Steel & Supply, Inc. v. NLRB, 257 U.S.App.D.C.
19, 23, 806 F.2d 1111, 1114 (1986).

20

In Hilton-Davis Chemical Co., 185 N.L.R.B. 241 (1970), the Board determined
that arbitration clauses are excluded from the prohibition on unilateral changes,
reasoning that the commitment to arbitrate is a "voluntary surrender of the right

of final decision which Congress . . . reserved to [the] parties. . . . [A]rbitration

is, at bottom, a consensual surrender of the economic power which the parties
are otherwise free to utilize." Id., at 242. The Board further relied upon our
statements acknowledging the basic federal labor policy that "arbitration is a
matter of contract and a party cannot be required to submit to arbitration any
dispute which he has not agreed so to submit." United Steelworkers of America
v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4
L.Ed.2d 1409 (1960). See also 29 U.S.C. 173(d) (phrased in terms of parties'
agreed upon method of dispute resolution under an existing bargaining
agreement). Since Hilton-Davis the Board has adhered to the view that an
arbitration clause does not, by operation of the NLRA as interpreted in Katz,
continue in effect after expiration of a collective-bargaining agreement.
B
21

The Union argues that we should reject the Board's decision in Hilton-Davis
Chemical Co., and instead hold that arbitration provisions are within Katz'
prohibition on unilateral changes. The unilateral change doctrine, and the
exclusion of arbitration from the scope of that doctrine, represent the Board's
interpretation of the NLRA requirement that parties bargain in good faith. And
"[i]f the Board adopts a rule that is rational and consistent with the Act . . . then
the rule is entitled to deference from the courts." Fall River Dyeing & Finishing
Corp. v. NLRB, 482 U.S. 27, 42, 107 S.Ct. 2225, 2235, 96 L.Ed.2d 22 (1987);
see, e.g., NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. ----, ----, 110 S.Ct.
1542, ----, 108 L.Ed.2d 801 (1990).

22

We think the Board's decision in Hilton-Davis Chemical Co. is both rational

and consistent with the Act. The rule is grounded in the strong statutory
principle, found in both the language of the NLRA and its drafting history, of
consensual rather than compulsory arbitration. See Indiana & Michigan, supra,
at 57-58; Hilton-Davis Chemical Co., supra. The rule conforms with our
statement that "[n]o obligation to arbitrate a labor dispute arises solely by
operation of law. The law compels a party to submit his grievance to arbitration
only if he has contracted to do so." Gateway Coal Co. v. Mine Workers, 414
U.S. 368, 374, 94 S.Ct. 629, 635, 38 L.Ed.2d 583 (1974). We reaffirm today
that under the NLRA arbitration is a matter of consent, and that it will not be
imposed upon parties beyond the scope of their agreement.

23

In the absence of a binding method for resolution of postexpiration disputes, a

party may be relegated to filing unfair labor practice charges with the Board if
it believes that its counterpart has implemented a unilateral change in violation
of the NLRA. If, as the Union urges, parties who favor labor arbitration during

the term of a contract also desire it to resolve postexpiration disputes, the

parties can consent to that arrangement by explicit agreement. Further, a
collective-bargaining agreement might be drafted so as to eliminate any hiatus
between expiration of the old and execution of the new agreement, or to remain
in effect until the parties bargain to impasse.2 Unlike the Union's suggestion
that we impose arbitration of postexpiration disputes upon parties once they
agree to arbitrate disputes arising under a contract, these alternatives would
reinforce the statutory policy that arbitration is not compulsory.
III
24

The Board argues that it is entitled to substantial deference here because it has
determined the remedy for an unfair labor practice. As noted above, we will
uphold the Board's interpretation of the NLRA so long as it is "rational and
consistent with the Act." Fall River Dyeing & Finishing Corp. v. NLRB, supra,
482 U.S., at 42, 107 S.Ct., at 2235. And we give the greatest latitude to the
Board when its decision reflects its " 'difficult and delicate responsibility' of
reconciling conflicting interests of labor and management," NLRB v. J.
Weingarten, Inc., 420 U.S. 251, 267, 95 S.Ct. 959, 968, 43 L.Ed.2d 171 (1975).
We have accorded the Board considerable authority to structure its remedial
orders to effect the purposes of the NLRA and to order the relief it deems
appropriate. See Shepard v. NLRB, 459 U.S. 344, 352, 103 S.Ct. 665, 670-71,
74 L.Ed.2d 523 (1983); Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533,
540, 63 S.Ct. 1214, 1218-19, 87 L.Ed. 1568 (1943).

25

The portion of the Board's decision which we review today does discuss the
appropriate remedy for a violation of the NLRA. But it does not follow that we
must accord the same deference we recognized in Virginia Elec. & Power Co.
and Shepard. Here, the Board's remedial discussion is not grounded in terms of
any need to arbitrate these grievances in order "to effectuate the policies of the
Act." Virginia Elec. & Power Co., supra, at 540, 63 S.Ct., at 1218. Rather, the
Board's decision not to order arbitration of the layoff grievances rests upon its
interpretation of the Agreement, applying our decision in Nolde Bros. and the
federal common law of collective-bargaining agreements. The Board now
defends its decision on the ground that it need not "reflexively order that which
a complaining party may regard as 'complete relief' for every unfair labor
practice," Shepard v. NLRB, supra, 459 U.S., at 352, 103 S.Ct., at 670-71; but
its decision did not purport to rest upon such grounds.

26

Although the Board has occasion to interpret collective-bargaining agreements

in the context of unfair labor practice adjudication, see NLRB v. C & C
Plywood Corp., 385 U.S. 421, 87 S.Ct. 559, 17 L.Ed.2d 486 (1967), the Board

is neither the sole nor the primary source of authority in such matters.
"Arbitrators and courts are still the principal sources of contract interpretation."
NLRB v. Strong, 393 U.S. 357, 360-361, 89 S.Ct. 541, 544, 21 L.Ed.2d 546
(1969). Section 301 of the Labor Management Relations Act (LMRA), 29
U.S.C. 185, "authorizes federal courts to fashion a body of federal law for the
enforcement of . . . collective bargaining agreements." Textile Workers v.
Lincoln Mills of Alabama, 353 U.S. 448, 451, 77 S.Ct. 912, 915, 1 L.Ed.2d 972
(1957) (emphasis added). We would risk the development of conflicting
principles were we to defer to the Board in its interpretation of the contract, as
distinct from its devising a remedy for the unfair labor practice that follows
from a breach of contract. We cannot accord deference in contract interpretation
here only to revert to our independent interpretation of collective-bargaining
agreements in a case arising under 301. See Local Union 1395, Int'l
Brotherhood of Electrical Workers v. NLRB, 254 U.S.App.D.C. 360, 363-364,
797 F.2d 1027, 1030-1031 (1986).
IV
27

The duty not to effect unilateral changes in most terms and conditions of
employment, derived from the statutory command to bargain in good faith, is
not the sole source of possible constraints upon the employer after the
expiration date of a collective-bargaining agreement. A similar duty may arise
as well from the express or implied terms of the expired agreement itself. This,
not the provisions of the NLRA, was the source of the obligation which
controlled our decision in Nolde Bros., Inc. v. Bakery Workers, 430 U.S. 243,
97 S.Ct. 1067, 51 L.Ed.2d 300 (1977). We now discuss that precedent in the
context of the case before us.

28

In Nolde Bros., a union brought suit under 301 of the Labor Management
Relations Act, 29 U.S.C. 185, to compel arbitration. Four days after
termination of a collective-bargaining agreement, the employer decided to
cease operations. The employer settled employee wage claims, but refused to
pay severance wages called for in the agreement, and declined to arbitrate the
resulting dispute. The union argued that these wages

29

"were in the nature of 'accrued' or 'vested' rights, earned by employees during

the term of the contract on essentially the same basis as vacation pay, but
payable only upon termination of employment." Nolde Bros., 430 U.S., at 248,
97 S.Ct. at 1070.
We agreed that

30

"whatever the outcome, the resolution of that claim hinges on the interpretation
ultimately given the contract clause providing for severance pay. The dispute
therefore, although arising after the expiration of the collective-bargaining
contract, clearly arises under that contract." Id., at 249, 97 S.Ct., at 1071
(emphasis in original).

31

We acknowledged that "the arbitration duty is a creature of the collectivebargaining agreement" and that the matter of arbitrability must be determined
by reference to the agreement, rather than by compulsion of law. Id., at 250251, 97 S.Ct., at 1071-1072. With this understanding, we held that the
extensive obligation to arbitrate under the contract in question was not
consistent with an interpretation that would eliminate all duty to arbitrate as of
the date of expiration. That argument, we noted,

32

"would preclude the entry of a post-contract arbitration order even when the
dispute arose during the life of the contract but arbitration proceedings had not
begun before termination. The same would be true if arbitration processes
began but were not completed, during the contract's term." Id., at 251, 97 S.Ct.,
at 1072.

33

We found "strong reasons to conclude that the parties did not intend their
arbitration duties to terminate automatically with the contract," id., at 253, 97
S.Ct., at 1073, and noted that "the parties' failure to exclude from arbitrability
contract disputes arising after termination . . . affords a basis for concluding that
they intended to arbitrate all grievances arising out of the contractual
relationship," id., at 255, 97 S.Ct., at 1074. We found a presumption in favor of
postexpiration arbitration of matters unless "negated expressly or by clear
implication," ibid., but that conclusion was limited by the vital qualification that
arbitration was of matters and disputes arising out of the relation governed by
contract.

34

* Litton argues that provisions contained in the Agreement rebut the Nolde
Bros. presumption that the duty to arbitrate disputes arising under an agreement
outlasts the date of expiration. The Agreement provides that its stipulations
"shall be in effect for the time hereinafter specified," App. 22, in other words,
until the date of expiration and no longer. The Agreement's no-strike clause,
which Litton characterizes as a quid pro quo for arbitration, applies only
"during the term of this [a]greement," id., at 34. Finally, the Agreement
provides for "interest arbitration" in case the parties are unable to conclude a
successor agreement, id., at 53-55, proving that where the parties wished for
arbitration other than to resolve disputes as to contract interpretation, they knew

how to draft such a clause. These arguments cannot prevail. The Agreement's
unlimited arbitration clause, by which the parties agreed to arbitrate all "
[d]ifferences that may arise between the parties" regarding the Agreement,
violations thereof, or "the construction to be placed on any clause or clauses of
the Agreement," id., at 34, places it within the precise rationale of Nolde Bros.
It follows that if a dispute arises under the contract here in question, it is subject
to arbitration even in the postcontract period.
B
35

With these matters resolved, we come to the crux of our inquiry. We agree with
the approach of the Board and those courts which have interpreted Nolde Bros.
to apply only where a dispute has its real source in the contract. The object of
an arbitration clause is to implement a contract, not to transcend it. Nolde Bros.
does not announce a rule that postexpiration grievances concerning terms and
conditions of employment remain arbitrable. A rule of that sweep in fact would
contradict the rationale of Nolde Bros. The Nolde Bros. presumption is limited
to disputes arising under the contract. A postexpiration grievance can be said to
arise under the contract only where it involves facts and occurrences that arose
before expiration, where an action taken after expiration infringes a right that
accrued or vested under the agreement, or where, under normal principles of
contract interpretation, the disputed contractual right survives expiration of the
remainder of the agreement.

36

Any other reading of Nolde Bros. seems to assume that postexpiration terms
and conditions of employment which coincide with the contractual terms can be
said to arise under an expired contract, merely because the contract would have
applied to those matters had it not expired. But that interpretation fails to
recognize that an expired contract has by its own terms released all its parties
from their respective contractual obligations, except obligations already fixed
under the contract but as yet unsatisfied. Although after expiration most terms
and conditions of employment are not subject to unilateral change, in order to
protect the statutory right to bargain, those terms and conditions no longer have
force by virtue of the contract. See Office and Professional Employees Ins.
Trust Fund v. Laborers Funds Administrative Office of Northern California,
Inc. 783 F.2d 919, 922 (CA9 1986) ("An expired [collective bargaining
agreement] . . . is no longer a 'legally enforceable document.' " (citation
omitted)); cf. Derrico v. Sheehan Emergency Hosp., 844 F.2d 22, 25-27 (CA2
1988) (Section 301 of the LMRA, 29 U.S.C. 185, does not provide a federal
court jurisdiction where a bargaining agreement has expired, although rights
and duties under the expired agreement "retain legal significance because they
define the status quo" for purposes of the prohibition on unilateral changes).

37

The difference is as elemental as that between Nolde Bros. and Katz. Under
Katz, terms and conditions continue in effect by operation of the NLRA. They
are no longer agreed-upon terms; they are terms imposed by law, at least so far
as there is no unilateral right to change them. As the Union acknowledges, the
obligation not to make unilateral changes is "rooted not in the contract but in
preservation of existing terms and conditions of employment and applies before
any contract has been negotiated." Brief for Respondents 34, n. 21. Katz
illustrates this point with utter clarity, for in Katz the employer was barred from
imposing unilateral changes even though the parties had yet to execute their
first collective-bargaining agreement.

38

Our decision in Laborers Health and Welfare Trust Fund v. Advanced

Lightweight Concrete Co., Inc., 484 U.S. 539, 108 S.Ct. 830, 98 L.Ed.2d 936
(1988), further demonstrates the distinction between contractual obligations
and postexpiration terms imposed by the NLRA. There, a bargaining agreement
required employer contributions to a pension fund. We assumed that under Katz
the employer's failure to continue contributions after expiration of the
agreement could constitute an unfair labor practice, and if so the Board could
enforce the obligation. We rejected, however, the contention that such a failure
amounted to a violation of the ERISA obligation to make contributions "under
the terms of a collectively bargained agreement . . . in accordance with the
terms and conditions of . . . such agreement." 29 U.S.C. 1145. Any
postexpiration obligation to contribute was imposed by the NLRA, not by the
bargaining agreement, and so the district court lacked jurisdiction under
502(g)(2) of ERISA, 29 U.S.C. 1132(g)(2), to enforce the obligation.

39

As with the obligation to make pension contributions in Advanced Lightweight

Concrete Co., other contractual obligations will cease, in the ordinary course,
upon termination of the bargaining agreement. Exceptions are determined by
contract interpretation. Rights which accrued or vested under the agreement
will, as a general rule, survive termination of the agreement. And of course, if a
collective-bargaining agreement provides in explicit terms that certain benefits
continue after the agreement's expiration, disputes as to such continuing
benefits may be found to arise under the agreement, and so become subject to
the contract's arbitration provisions. See United Steelworkers of America v.
Fort Pitt Steel Casting, Division of Conval-Penn, Inc., 598 F.2d 1273 (CA3
1979) (agreement provided for continuing medical benefits in the event of
postexpiration labor dispute).

40

Finally, as we found in Nolde Bros., structural provisions relating to remedies

and dispute resolutionfor example, an arbitration provisionmay in some
cases survive in order to enforce duties arising under the contract. Nolde Bros.'

statement to that effect under 301 of the LMRA is similar to the rule of
contract interpretation which might apply to arbitration provisions of other
commercial contracts.3 We presume as a matter of contract interpretation that
the parties did not intend a pivotal dispute resolution provision to terminate for
all purposes upon the expiration of the agreement.
C
41

The Union, and Justice STEVENS' dissent, argue that we err in reaching the
merits of the issue whether the post-termination grievances arise under the
expired agreement because, it is said, that is an issue of contract interpretation
to be submitted to an arbitrator in the first instance. Whether or not a company
is bound to arbitrate, as well as what issues it must arbitrate, is a matter to be
determined by the court, and a party cannot be forced to "arbitrate the
arbitrability issue." AT & T Technologies, Inc. v. Communication Workers of
America, 475 U.S. 643, 651, 106 S.Ct. 1415, 1419-20, 89 L.Ed.2d 648. We
acknowledge that where an effective bargaining agreement exists between the
parties, and the agreement contains a broad arbitration clause, "there is a
presumption of arbitrability in the sense that '[a]n order to arbitrate the
particular grievance should not be denied unless it may be said with positive
assurance that the arbitration clause is not susceptible of an interpretation that
covers the asserted dispute.' " Id., at 650, 106 S.Ct., at 1419 (quoting
Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 564, 582-583, 80
S.Ct. 1343, 1352-1353, 4 L.Ed.2d 1403 (1960)). But we refuse to apply that
presumption wholesale in the context of an expired bargaining agreement, for
to do so would make limitless the contractual obligation to arbitrate. Although "
[d]oubts should be resolved in favor of coverage," AT & T Technologies, supra,
475 U.S., at 650, 106 S.Ct., at 1419, we must determine whether the parties
agreed to arbitrate this dispute, and we cannot avoid that duty because it
requires us to interpret a provision of a bargaining agreement.

42

We apply these principles to the layoff grievances in the present case. The
layoffs took place almost one year after the Agreement had expired. It follows
that the grievances are arbitrable only if they involve rights which accrued or
vested under the Agreement, or rights which carried over after expiration of the
Agreement, not as legally imposed terms and conditions of employment but as
continuing obligations under the contract.

43

The contractual right at issue, that "in case of layoffs, lengths of continuous
service will be the determining factor if other things such as aptitude and ability
are equal," App. 30, involves a residual element of seniority. Seniority
provisions, the Union argues, "create a form of earned advantage, accumulated

over time, that can be understood as a special form of deferred compensation

for time already worked." Brief for Respondents 23-25, n. 14. Leaving aside
the question whether a provision requiring all layoffs to proceed in inverse
order of seniority would support an analogy to the severance pay at issue in
Nolde Bros., which was viewed as a form of deferred compensation, the layoff
provision here cannot be so construed, and cannot be said to create a right that
vested or accrued during the term of the Agreement, or a contractual obligation
that carries over after expiration.
44

The order of layoffs under the Agreement was to be determined primarily with
reference to "other factors such as aptitude and ability." Only where all such
factors were equal was the employer required to look to seniority. Here, any
arbitration proceeding would of necessity focus upon whether aptitude and
abilityand any unenumerated "other factors"were equal long after the
Agreement had expired, as of the date of the decision to lay employees off and
in light of Litton's decision to close down its cold-type printing operation.

45

The important point is that factors such as aptitude and ability do not remain
constant, but change over time. They cannot be said to vest or accrue or be
understood as a form of deferred compensation. Specific aptitudes and abilities
can either improve or atrophy. And the importance of any particular skill in this
equation varies with the requirements of the employer's business at any given
time. Aptitude and ability cannot be measured on some universal scale, but only
by matching an employee to the requirements of an employer's business at that
time. We cannot infer an intent on the part of the contracting parties to freeze
any particular order of layoff or vest any contractual right as of the Agreement's
expiration.4

V
46

For the reasons stated, we reverse the judgment of the Court of Appeals to the
extent that the Court of Appeals refused to enforce the Board's order in its
entirety and remanded the cause for further proceedings.

47

It is so ordered.

48

Justice MARSHALL, with whom Justice BLACKMUN and Justice SCALIA

join, dissenting.

49

Although I agree with Justice STEVENS' dissent, post, I write separately to

emphasize the majority's mischaracterization of our decision in Nolde Bros.,

Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977).
Nolde states a broad, rebuttable presumption of arbitrability which applies to all
post-termination disputes arising under the expired agreement; it leaves the
merits of the underlying dispute to be determined by the arbitrator. Today the
majority turns Nolde on its head, announcing a rule that requires courts to reach
the merits of the underlying posttermination dispute in order to determine
whether it should be submitted to arbitration. This result is not only unfaithful
to precedent but also it is inconsistent with sound labor-law policy.
50

* The dispute in Nolde concerned whether employees terminated after the

expiration of a collective-bargaining agreement were entitled to severance pay
under a severance-pay clause of the expired agreement. See id., at 248-249, 97
S.Ct., at 1070-1071. The Court stated that the severance-pay dispute "hinge[d]
on the interpretation [of] the contract clause providing for severance pay" but
that "the merits of the underlying claim" were not implicated "in determining
the arbitrability of the dispute." Id., at 249, 97 S.Ct., at 1071. To determine
whether the dispute was arbitrable, the Court looked solely to the expired
agreement's arbitration clause. It found the severance-pay dispute arbitrable
because "[t]he parties agreed to resolve all disputes by resort to the mandatory
grievance-arbitration machinery" and "nothing in the arbitration clause . . .
expressly exclude[d] from its operation a dispute which arises under the
contract, but which is based on events that occur after its termination." Id., at
252-253, 97 S.Ct., at 1072-1073.1 Thus, under Nolde, the key questions for
determining arbitrability are whether (1) the dispute is "based on . . . differing
perceptions of a provision of the expired collective-bargaining agreement" or
otherwise "arises under that contract," id., at 249, 97 S.Ct., at 1071 (emphasis
omitted), and, if so, (2) whether the "presumptions favoring" arbitrability have
been "negated expressly or by clear implication," id., at 255, 97 S.Ct., at 1074.

51

The majority grossly distorts Nolde's test for arbitrability by transforming the
first requirement that posttermination disputes "arise under" the expired
contract. The Nolde Court defined "arises under" by reference to the allegations
in the grievance. In other words, a dispute "arises under" the agreement where
"the resolution of [the Union's] claim hinges on the interpretation ultimately
given the contract." Id., at 249, 97 S.Ct., at 1071.

52

By contrast, the majority today holds that a postexpiration grievance can be

said to "arise under" the agreement only where the court satisfies itself (1) that
the challenged action "infringes a right that accrued or vested under the
agreement," or (2) that "under normal principles of contract interpretation, the
disputed contractual right survives expiration of the remainder of the
agreement." Ante, at 206. Because they involve inquiry into the substantive

effect of the terms of the agreement, these determinations require passing upon
the merits of the underlying dispute. Yet the Nolde Court expressly stated that
"in determining the arbitrability of the dispute, the merits of the underlying
claim . . . are not before us." 430 U.S., at 249, 97 S.Ct. at 1071.
53

Since the proper question under Nolde is whether the dispute in this case
"arises under" the agreement in the sense that it is "based on . . . differing
perceptions of a provision in the expired collective bargaining agreement,"
ibid., I have no difficulty concluding that this test is met here. The Union's
grievance "claim[ed] a violation of the Agreement," ante, at 194, by petitioner's
layoffs. And, as even the majority concedes, "[t]he Agreement's unlimited
arbitration clause" encompasses any dispute that "arises under the contract here
in question." Ante, at 205. Thus, the dispute is arbitrable because the
"presumptions favoring" arbitrability have not been "negated expressly or by
clear implication." 430 U.S., at 255, 97 S.Ct., at 1074.

54

In fashioning its more rigorous standard for arbitrability, the majority

erroneously suggests that if Nolde rendered arbitrable all postexpiration
disputes about an expired agreement's substantive provisions, it would have the
effect of extending the life of the entire contract beyond the date of expiration.
See ante, at 206. The defect in this view is that it equates asking an arbitrator to
determine whether a particular contractual provision creates rights that survive
expiration with a decision that the provision does create such postexpiration
rights. The majority evidently fears that arbitrators cannot be trusted to decide
the issue correctly. Yet arbitrators typically have more expertise than courts in
construing collective-bargaining agreements, and our arbitration jurisprudence
makes clear that courts must rely on arbitral judgments where the parties have
agreed to do so. Thus in Nolde, we carefully avoided expressing any view as to
whether the substantive provisions of the expired agreement had any
posttermination effect precisely because the parties had expressed their
preference for an arbitral, rather than a judicial interpretation. See Nolde, supra,
at 249, 253, 97 S.Ct., at 1070-71, 1073.

55

Consequently, the issue here, as it was in Nolde, is not whether a substantive

provision of the expired collective-bargaining agreement (in this case the
provision covering layoffs) remains enforceable but whether the expired
agreement reflects the parties' intent to arbitrate the Union's contention that this
provision remains enforceable. The majority itself acknowledges a general rule
of contract construction by which arbitration or other dispute resolution
provisions may survive the termination of a contract. Ante, at 208, and n. 3.
That is all Nolde stands for.2

56

In addition to being without legal foundation, the majority's displacement of

Nolde's simple, interpretive presumption with a case-by-case test is unsound
from a policy standpoint. Ironically, whereas parties that have agreed to a broad
arbitration clause have expressed a preference for "a prompt and inexpensive
resolution of their disputes by an expert tribunal," Nolde, supra, at 254, 97
S.Ct., at 1073, the majority invites protracted litigation about what rights may
"accrue" or "vest" under the contractlitigation aimed solely at determining
whether the dispute will be resolved by arbitration. More fundamentally,
because the arbitrator is better equipped than are judges to make the often
difficult determination of the post-termination effect of an expired contract's
substantive provisions, the majority's assignment of this task to courts increases
the likelihood of error. See id., at 253, 97 S.Ct., at 1073 (" 'The ablest judge
cannot be expected to bring the same experience and competence to bear upon
the determination of a grievance, because he cannot be similarly informed,' "
quoting Steelworkers v. Warrior & Gulf Nav. Co., 363 U.S. 574, 582, 80 S.Ct.
1347, 1353, 4 L.Ed.2d 1409 (1960)).

II
57

The majority's resolution of the merits of the contract dispute here reinforces
my conviction that arbitrators should be the preferred resolvers of such
questions. The Union based its grievance on the following provision of the
contract: "[I]n case of layoffs, lengths of continuous service will be the
determining factor if other things such as aptitude and ability are equal." App.
30. The Union's contention that postexpiration layoffs violated this provision
rests on the assertion that this contractual provision created rights that survive
termination of the contract. The majority rejects this assertion on the ground
that "factors such as aptitude and ability do not remain constant, but change
over time" and thus "cannot be said to vest or accrue." Ante, at 210. This
conclusion strikes me as utterly implausible.

58

As the majority appears to concede, ante, at 209-210, and as the Board has
held, an unconditional seniority provision can confer a seniority right that is
"capable of accruing or vesting to some degree during the life of the contract."
United Chrome Products, Inc., 288 N.L.R.B. 1176, 1177 (1988). Obviously, an
employee's relative seniority, much like his relative "aptitude and ability," will
"change over time." That is, a given member of a bargaining unit who is, for
example, 12th in seniority when his collective-bargaining agreement expires
may be 5th in seniority at a particular time thereafter, depending upon the
number of more senior employees who have departed from the workforce. Or
an employee could lose his seniority altogether where specified conditions for
such loss have been met. See, e.g., n. 3, infra. The fact that, despite the

volatility in individual rank, the seniority guarantee might nevertheless vest

under the contract means that what vests is not the employee's seniority rank or
his right to job security but rather the right to have the standard of seniority
applied to layoffs.
59

In my view, a provision granting only "qualified" seniority may vest in the

same way. (Here, the provision guaranteeing seniority is "qualified" by the
requirement that the employee claiming seniority possess "aptitude and ability"
that is equal to that of less senior employees who seek to avoid being laid off.)
As with an employee's seniority rank, a given worker's "aptitude and ability"
relative to other employees may change over time, yet the right to have layoffs
made according to the standard of qualified seniority could vest under the
contract. Under this view, a laid off employee would have the opportunity to
prove to the arbitrator that he should not have been laid off under the terms of
the contract because other factors such as aptitude and ability were equal at the
time he was laid off.

60

Indeed, I think this is the more plausible reading of the parties' intent in this
case, particularly given related contract provisions involving loss of seniority.
As the Board has previously held, a contract's

61

"failure to specify expiration as one of the ways in which seniority rights could
be lost indicates that the parties intended that seniority rights remain
enforceable after contract termination. Therefore, the grievance over [the
employer's] refusal to recall employees by plantwide seniority . . . involves a
right worked for and accumulated during the term of the contract and intended
by the parties to survive contract expiration." Uppco, Inc., 288 N.L.R.B. 937,
940 (1988).

62

In the present case, the expired agreement enumerates six specific ways an
employee could lose seniority, and these do not include termination of the
agreement. See App. 31.3 Thus, the qualified seniority at issue in this case
would seem as likely to accrue as did the unconditional seniority in Uppco.

63

In any event, the conclusion that the contracting parties in this case did not
intend qualified seniority rights to vest is sufficiently implausible as to raise
serious questions about the majority's assignment of the task of deciding this
interpretive issue to itself. Had the majority left this issue to the arbitrator to
decide, as Nolde requires, the arbitrator would have had the benefit of an
evidentiary hearing on the contractual question and the opportunity to explore
petitioner's actual postexpiration seniority practices. The contractual text, alone,

may not be the only relevant information in determining the parties' intent.
Because arbitrators are better equipped to decide such issues and are more
familiar with the " 'common law of the shop,' " Nolde, supra, 430 U.S., at 253,
97 S.Ct., at 1073, quoting Warrior & Gulf Nav. Co., supra, 363 U.S., at 582, 80
S.Ct., at 1352, I would have much more confidence in the majority's
construction of the contract were that result reached by an arbitrator. In sum,
the majority's problematic reasoning regarding the substance of the layoff
grievance only underscores the soundness of the Nolde presumption of
arbitrability which the majority today displaces. Accordingly, I dissent.4
64

Justice STEVENS, with whom Justice BLACKMUN and Justice SCALIA join,
dissenting.

65

As the Court today recognizes, an employer's obligation to arbitrate

postcontract termination grievances may arise by operation of labor law or by
operation of the expired collective-bargaining agreement. I think the Court is
correct in deferring to the National Labor Relations Board's line of cases and
holding that a statutory duty to arbitrate grievances does not automatically
continue after contract termination by operation of labor law, see ante, at 198203. I also agree with the Court's recognition that notwithstanding the absence
of an employer's statutory duty to arbitrate posttermination grievances, a
contractual duty to arbitrate such grievances may nevertheless exist, see ante,
at 203-208. I part company with the Court, however, at Part IV-C of its
opinion, where it applies its analysis to the case at hand. Because I am
persuaded that the issue whether the posttermination grievances in this case
"arise under" the expired agreement is ultimately an issue of contract
interpretation, I think that the Court errs in reaching the merits of this issue
rather than submitting it to an arbitrator in the first instance, pursuant to the
broad agreement of the parties to submit for arbitration any dispute regarding
contract construction.

66

In Nolde Bros., Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51
L.Ed.2d 300 (1977), a union brought suit against an employer to compel
arbitration of the employer's refusal to give severance pay under an expired
collective-bargaining agreement to employees displaced by a plant closing. The
expired agreement provided that employees who had worked for the employer
for at least three years were entitled to severance pay if permanently displaced
from their jobs. The union claimed that the right to such severance pay had
"accrued" or "vested" during the life of the contract. The employer disavowed
any obligation to arbitrate, arguing that the contract containing its commitment
had terminated and the event giving rise to the disputethe displacement of
employees during the plant closingoccurred after the contract had expired.

67

We ruled in favor of the union in Nolde Bros. Integral to our decision was the
conclusion that whether or not the right to severance pay had accrued during
the contract, and thus whether or not the employer's refusal to offer severance
pay was an arbitrable grievance after the contract had expired, was itself a
question of contract interpretation. "There can be no doubt that a dispute over
the meaning of the severance-pay clause during the life of the agreement would
have been subject to the mandatory grievance-arbitration procedures of the
contract. Indeed, since the parties contracted to submit 'all grievances' to
arbitration, our determination that the Union was 'making a claim which on its
face is governed by the contract' would end the matter had the contract not been
terminated prior to the closing of the plant." Id., at 249-250, 97 S.Ct., at 1071
(citation omitted).

68

Like the expired agreement between the Union and Nolde Bros. to arbitrate "all
grievances," the terminated agreement between Litton and the Union in this
case broadly mandates arbitration of " '[d]ifferences that may arise between the
parties hereto regarding this Agreement and any alleged violations of the
Agreement, [and] the construction to be placed on any clause or clauses of the
Agreement.' " Ante, at 194. Because the Union here alleged that the seniority
clause of the expired agreement was on its face violated by the posttermination
layoffs, determining whether the union's grievances arise under the contract
requires construction of the seniority provision of the contract and
determination of whether this provision applies to posttermination events. As
the Court itself notes: "[T]he Board's decision not to order arbitration of the
layoff grievances rests upon its interpretation of the Agreement." Ante, at 202
(emphasis added).

69

In my opinion, the question whether the seniority clause in fact continues to

provide employees with any rights after the contract's expiration date is a
separate issue concerning the merits of the dispute, not its arbitrability.
Whatever the merits of the Union's contention that the seniority-rights
provision survives the contract's termination date, I think that the merits should
be resolved by the arbitrator, pursuant to the parties' broad contractual
commitment to arbitrate all disputes concerning construction of the agreement,
rather than by this Court.

70

I respectfully dissent.

The conflict between the Ninth Circuit's reasoning in Local Joint Executive Bd.
of Las Vegas Culinary Workers Union, Local 226 v. Royal Center, Inc., 796

F.2d 1159 (1986), and the Board's approach in Indiana & Michigan Electric
Co., 284 N.L.R.B. 53 (1987), reflects a wider split of authority. The Third and
Fifth Circuits follow an approach similar to that of the Ninth Circuit. See
Federated Metals Corp. v. United Steelworkers of America, 648 F.2d 856, 861
(CA3), cert. denied, 454 U.S. 1031, 102 S.Ct. 567, 70 L.Ed.2d 474 (1981);
Seafarers Int'l Union of North America v. National Marine Servs., Inc., 820
F.2d 148, 152-154 (CA5), cert. denied, 484 U.S. 953, 108 S.Ct. 346, 98
L.Ed.2d 372 (1987). The Eighth Circuit, Tenth Circuit, and the Michigan
Supreme Court follow the Board's approach and limit the presumption of postexpiration arbitrability to rights that accrued or vested under the agreement, or
events that took place prior to expiration of the agreement. See Chauffeurs,
Teamsters and Helpers, Local Union 238 v. C.R.S.T. Inc., 795 F.2d 1400, 1404
(CA8 1986) (en banc); United Food & Commercial Workers Int'l Union, AFLCIO, Local 7 v. Gold Star Sausage Co., 897 F.2d 1022, 1025-1026 (CA10
1990); County of Ottawa v. Jaklinski, 423 Mich. 1, 377 N.W.2d 668 (1985)
(discussing Nolde in context of Michigan law applicable to public employers).
The Seventh Circuit, finally, restricts application of Nolde Bros. to a limited
period following expiration of a bargaining agreement. See Local 703, Int'l
Brotherhood of Teamsters v. Kennicott Bros. Co., 771 F.2d 300 (1985).
2

See, e.g., NLRB v. New England Newspapers, Inc., 856 F.2d 409, 410 (CA1
1988) (agreement would continue in effect until a new agreement was reached);
Montgomery Mailers' Union No. 127 v. The Advertiser Co., 827 F.2d 709, 712,
n. 5 (CA11 1987) (agreement to continue in effect "for a reasonable time for
negotiation of a new agreement"); Teamsters Local Union 688 v. John J. Meier
Co., 718 F.2d 286, 287 (CA8 1983) ("all terms and provisions of the expired
agreement shall continue in effect until a new agreement is adopted or
negotiations are terminated").

See, e.g., West Virginia ex rel. Ranger Fuel Corp. v. Lilly, 165 W.Va. 98, 100101, 267 S.E.2d 435, 437-438 (1980) (duty to arbitrate survives termination of
lease); Warren Brothers Co. v. Cardi Corp., 471 F.2d 1304 (CA1 1973)
(arbitration clause survives completion of work under construction contract);
Mendez v. Trustees of Boston University, 362 Mass. 353, 356, 285 N.E.2d 446,
448 (1972) (termination of employment contract "does not necessarily
terminate a provision for arbitration or other agreed procedure for the
resolution of disputes"); The Batter Building Materials Co. v. Kirschner, 142
Conn. 1, 10-11, 110 A.2d 464, 469-470 (1954) (arbitration clause in building
contract not affected by a party's repudiation or total breach of contract).

Although our decision that the dispute does not arise under the Agreement does,
of necessity, determine that as of August 1980 the employees lacked any vested
contractual right to a particular order of layoff, the Union would remain able to

argue that the failure to lay off in inverse order of seniority if "other things such
as aptitude and ability" were equal amounted to an unfair labor practice, as a
unilateral change of a term or condition of employment. We do not decide
whether, in fact, the layoffs were out of order.
1

I agree with the majority that the National Labor Relations Board's (Board)
determination as to arbitrability under the contract is not entitled to deference.
See ante, at 202-203.

The majority "presume[s] as a matter of contract interpretation that the parties

did not intend a pivotal dispute resolution provision to terminate for all
purposes upon the expiration of the agreement." Ante, at 208. But the
arbitration clause of the expired collective-bargaining agreement does not
distinguish among types of disputes that the parties would and would not
submit to arbitration. As in Nolde, the parties agreed to submit all disputes
arising under the agreement to arbitration. By looking to the terms of the
agreement's layoff provision to draw a conclusion about whether the parties
intended rights under that provision to survive termination, the majority is
deciding the merits of the dispute rather than the issue of its arbitrability.
Notably, the layoff provisions do not contain any language suggesting an intent
to preclude posttermination grievances over layoffs from arbitration. See App.
30-31.

Section 12 of the expired agreement, entitled "Notice of Layoutt" [sic ],

contains six subsections addressing, inter alia, issues of seniority, layoffs, and
recalls. Subsection F, which addresses the recalling of laid off workers,
enumerates the six ways in which "[a]n employee shall lose his seniority." App.
31. The "seniority" referred to in subsection F reasonably could be construed as
the same seniority that is implied in subsection A, concerning layoffs, and that
is expressly identified in subsection E, which requires the employer to "supply
the Union with an updated seniority list semi-annually," id. See id., at 30-31.

Although I believe the parties have a contractual duty to arbitrate in this case, I
agree with the majority's conclusion that the Board articulated rational grounds
for not imposing a statutory duty under the National Labor Relations Act, 29
U.S.C. 151 et seq., to arbitrate grievances arising after the termination of a
collective-bargaining agreement. See Ante, at 200-201. In Indiana and
Michigan Electric Co., 284 N.L.R.B. 53 (1987), the Board noted that "an
agreement to arbitrate is a product of the parties' mutual consent to relinquish
economic weapons, such as strikes or lockouts" and therefore the contractual
obligation to arbitrate could be distinguished from other "terms and conditions
of employment routinely perpetuated [after termination of a collectivebargaining agreement] by the [statutory] constraints of [the unilateral change

doctrine]." Id., at 58. Under 13 of the Act, 29 U.S.C. 163, the Act may not
be construed to interfere with a union's right to strike. Therefore, the Board
rationally concluded that employers should not, as a matter of statutory policy,
be compelled to arbitrate and thus forbear from using their economic weapons,
when no concomitant statutory obligation can be imposed on a union.