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Bar News - April 15, 2015

Labor & Employment Law: Employer Obligations When a Bargaining Agreement Expires


Collective bargaining agreements (CBAs) cover a defined period of time and expire at the conclusion of that period, absent a binding automatic renewal clause. In most cases, the parties to a CBA will begin negotiating the successor CBA prior to the expiration of the current CBA, with the hope that the successor agreement can take effect upon the expiration of the prior CBA.

However, there is often a gap between the expiration of a CBA and the completion of the negotiations, leaving the parties without an enforceable CBA in place. In such cases, an employer’s options and obligations depend, in large part, on whether it is a public or a private employer.

Public Employers

Upon expiration of a CBA, and prior to the execution of a successor agreement, public employers are required to maintain the status quo with regard to the conditions under which their employees worked under the previous CBA.

This judicially created doctrine of status quo is based on the obligations set forth in RSA 273-A:5, I(e) and II(d), which require the parties to negotiate the terms and conditions of employment in good faith and prohibit the employer from making unilateral changes in the terms and conditions of employment.

The purpose underlying the status quo doctrine is the desire to maintain the balance of power between labor and management during the negotiation process. As RSA 273-A’s prohibition against strikes deprives public sector labor unions of a mechanism for gaining leverage in negotiations, the status quo doctrine prevents public employers from unilaterally imposing their will without consequence.

The status quo doctrine does not “mean that the expired CBA continues in effect; rather, it means that the conditions under which the [bargaining unit members] worked endure through the collective bargaining process.” Alton, 140 NH at 307. Accordingly, the “status quo” has been found to include only “the past year’s salary levels, not the past year’s CBA and any salary schedules contained within it.” Milton, 137 NH at 245.

The New Hampshire Supreme Court has held that the status quo doctrine does not require payment of salary increases based on additional years of experience, also called “step increases,” after a CBA expires, even if the public employer has given step increases on a discretionary basis during the status quo period, and even if the public employer had promised to provide such post-expiration increases outside of the collective bargaining context.

Private Employers

The relationship between private employers and their employees is governed by the National Labor Relations Act (NLRA) as interpreted by the National Labor Relations Board (NLRB).

Following the expiration of a CBA (and similar to the rule under RSA 273-A), the NLRB has established that parties must maintain the status quo while the bargaining process continues and until they have reached impasse. This means that prior to reaching impasse, private employers are not permitted to institute unilateral changes to existing terms and conditions of employment, including wages, medical benefits, and fringe benefits. Laborers Health & Welfare Trust Fund v. Advanced Lightweight Concrete Co. (1988).

However, unlike in the public sector, the duty to maintain the status quo is not indefinite. Instead, once the parties have bargained to an “impasse,” a private employer may unilaterally institute its “last best offer.”

The rationale behind the “impasse rule” is that private sector employees – unlike public sector employees – have the ability to strike. This is true even if the expired CBA contained a no-strike clause. See Litton Fin. Printing Div. v. NLRB (1991).

According to the NLRB, no-strike provisions do not survive expiration, because the union has a statutory right to strike under the NLRA, which is limited only by binding contractual agreement. If negotiations break down, private employers are permitted to impose an ultimatum on their employees by instituting their “last best offer” – i.e. come to work on these terms, or do not come to work at all – and the employees are able to respond by going on strike.

The private sector approach allows labor and management to use economic weapons in the form of strikes and lockouts and does not require the parties to seek a compromise through mediation or another type of alternative dispute resolution.

Such brinksmanship is not permitted in the public sector, however, because the New Hampshire Legislature has determined that it would be inconsistent with the necessary and important services provided by emergency services personnel, teachers, and other public sector employees. Instead, RSA 273-A imposes a mandatory dispute resolution process on public employees and public employers, which makes use of mediation and, if necessary, fact-finding by a neutral party.

Anna B. Cole

Laurel A.V. McClead

Laurel A.V. McClead is a member of Drummond Woodsum’s Labor and Employment Group. She represents and counsels public and private employers in all aspects of employment law. Anna B. Cole is a member of Drummond Woodsum’s Labor and Employment Group. She provides counseling and litigation services to public and private employers in all aspects of labor and employment law.

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