Contractually-Required Notices: “Evergreen” or “Automatic Renewal” Clauses
It is common for a labor agreement to contain an “evergreen” or “automatic renewal” clause whereby the CBA is automatically renewed (usually from year to year) unless one party gives notice (usually more than 60 days) prior to the contract expiration date of its intent to terminate the contract and/or renegotiate a new agreement.
Reviewing the Actual Contract Language Is Critical
At the outset, it is important to note that the language used in automatic renewal clauses varies. Whether the notice is sufficient to prevent the automatic renewal will depend on the specific language used in the contract as well as the language used in the notice.
Compare International Union of Operating Engineers v. Dahlem Construction Co., 193 F.2d 470 (6th Cir. 1973) (holding that a “notice to modify” did not terminate the CBA because the relevant portion of the CBA stated that “[s]hould such notice of a desire to modify the terms of this agreement be given by either party to the other, then this agreement shall remain in full force and effect until modified by a new agreement resulting from the negotiations.”) with Kaufman & Broad Home Systems v. Firemen, 607 F.2d 1104 (5th Cir. 1979) (“[W]e hold that the duration clause is unambiguous and provides that notice to modify prevents automatic extension of the collective bargaining agreement.”).
“Date of Receipt” Is Operative Date
The NLRB has made clear that the timeliness of such notices is governed by the “date of receipt” and not the “date of mailing.” Sawyer Stores Inc., 190 NLRB 651, 652 (1971); Illinois District Council, No. 1 v. R & R Masonry, Inc., Case No. 94-C-7377, 1996 WL 627635, at *6-7 (N.D. Ill. Oct. 28, 1996) (“[T]he NLRB uniformly has held that receipt of notice of termination by the nonterminating party within the notice period is required to prevent automatic renewal of a contract.”).
While there may be an exception for an unanticipated delay that is beyond the control of the party, the Board has made clear that waiting to the last minute to mail the notice is not a valid excuse. For example, in Anchorage Laundry and Dry Cleaning Assn., 216 NLRB 114 (1975), the Board concluded that the notice, which needed to be provided on or before Sunday, December 2, was untimely because of the late date on which the termination notice was mailed: “This late delivery was not due to factors beyond the control of the Union, as the evidence shows that Chambers mailed the notice on [Friday,] November 30, fully anticipating its delivery on Monday, December 3.” Id. at 114; compare United Electronics Institute, 222 NLRB 814 (1976) (“[I]f the notice is delayed by conditions beyond the control of the sender . . . such untimely notice will prevent the automatic renewal of a contract.”).
Calculating the Deadline for Receiving the Notice
To calculate the deadline, count backwards from the last day that the CBA remains in effect (called the “termination day”). Be sure to include the last day (or “termination day”) in your calculation. See Industrial Workers Local 770 (Hutco Equipment), 285 NLRB 651 (1987) (“[T]he ‘termination date’ [is] the day preceding the first day of the new contract term and . . . the termination date is to be included in the computation of the stated notice period.”). Consider the following examples:
|CBA Language||Deadline for Receipt of Notice|
|“This agreement shall remain in full force and effect from July 27, 1983 to midnight July 26, 1986. This Agreement shall automatically renew itself for successive twelve (12) month periods thereafter, unless either party gives written notice to the other of not less than sixty (60) days or more than ninety (90) days prior to the termination date.” Industrial Workers Local 770 (Hutco Equipment), 285 NLRB 651 (1987)||May 27 (60 days prior to July 26) If notice is not “received” by May 27, then, on May 28, the CBA would renew for 12 month period.|
|“This agreement shall continue in effect until June 30, 1979. Thereafter, this agreement shall be automatically renewed from year to year for one (1) year periods unless either party gives written notice to the other party . . . at least sixty (60) days prior to June 30, 1979, or any annual renewal period . . . of its desire to amend or terminate this Agreement.” Abbott House, Inc., 272 NLRB 78 (1984).||May 1 (60 days prior to June 30) If notice is not “received” by May 1, then, on May 2, the CBA would renew for one year.|
Contractual Notice Requirements Are Independent of Statutory Notice Requirements
The statutory notice provisions set forth in Section 8(d) of the NLRA (described below) apply independently of any notice requirements contained in a labor agreement. Geo. C. Christopher & Sons, 290 NLRB 472, 474 (1988); see also NLRB v. Lion Oil Co., 352 U.S. 282, 292-93 (1957) (“[T]he statutory notice requirement operates wholly independently of whatever notice requirement the parties have fixed for themselves.”).
In fact, in NLRB v. Lion Oil Co., 352 U.S. 282 (1957), the Supreme Court noted that Section 8(d) was not intended to alter or amend notice provisions that were negotiated by the parties:
Section 8(d) originated in the Senate. The Committee said, “It should be noted that this section [Section 8(d)] does not render inoperative the obligation to conform to notice provisions for longer periods, if the collective agreement so provides. Failure to give such notice, however, does not become an unfair labor practice if the 60-day provision is complied with.” S. Rep. No. 105, 80th Cong., 1st Sess. 24.
Id. at 292-93 n.13 (emphasis added).
Statutorily-Required Notices – Section 8(d) of the NLRA
There are statutory prerequisites that must be satisfied by any party seeking to terminate or modify a CBA under the NLRA. Specifically, Section 8(d) defines the parties’ “[o]bligation to bargain collectively” to include the following:
[W]here there is in effect a collective-bargaining contract covering employees in an industry affecting commerce, the duty to bargain collectively shall also mean that no party to such contract shall terminate or modify such contract, unless the party desiring such termination or modification—
(1) serves a written notice upon the other party to the contract of the proposed termination or modification sixty days prior to the expiration date thereof, or in the event such contract contains no expiration date, sixty days prior to the time it is proposed to make such termination or modification;
(2) offers to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed modifications;
(3) notifies the Federal Mediation and Conciliation Service within thirty days after such notice of the existence of a dispute, and simultaneously therewith notifies any State or Territorial agency established to mediate and conciliate disputes within the State or Territory where the dispute occurred, provided no agreement has been reached by that time; and
(4) continues in full force and effect, without resorting to strike or lock-out, all the terms and conditions of the existing contract for a period of sixty days after such notice is given or until the expiration date of such contract, whichever occurs later . . .
29 U.S.C. § 158(d).
Section 8(d)(1) provides that the party desiring to terminate or modify a CBA must serve upon the other party written notice of the proposed termination or modification 60 days prior to the expiration date of the agreement. Section 8(d)(3) requires that the same party notify the Federal Mediation and Conciliation Service (FMCS) and the appropriate state mediation agency of the existence of a dispute within 30 days thereafter.
Statutory Duty Applies to the “Initiating Party” Only
In United Artists Communications, Inc., 274 NLRB 75, 77 (1985), the Board held that “the burden of notifying the mediation services of a dispute under Section 8(d)(3) and (4) [of the Act] rests exclusively with the initiating party and that the initiating party’s failure to file such a notice cannot serve to preclude the noninitiating party from undertaking otherwise lawful economic action.”
Typically, the party that gives the “notice to reopen” or “notice to terminate” to prevent the renewal of the CBA pursuant to an “evergreen” or “automatic renewal” clause (as described above) is considered the “initiating party.”
For example, in United Artists Communications, 274 NLRB 75, (1985), the union was considered to be the “initiating party” because it sent a notice of its intent to terminate the contract to the employer. Even though the union provided notice to the employer, it failed to send the 8(d) notices to both the FMCS and to its state equivalent. Nearly 10 months after the expiration of the old CBA, the employer implemented its last offer. The Board held that the burden of filing 8(d) notices with the federal and state agencies falls exclusively on the party which initiated the changes in the old collective-bargaining agreement, there the union.
However, in American Water Works Serv. Co, Inc., 361 NLRB 64 (2014), the Board held that the employer was the “initiating party” because the employer’s labor relations director called the union in an attempt to “get an early start” in negotiations and suggested creating a timeline for proposals, information requests, etc. The Board concluded that the director’s communications showed that the employer was “[t]he first party to express a desire to modify a contract.”
Consequences for Failing to Provide Statutorily-Required Notices
If the employer is the “initiating party” and fails to provide the required notices under Section 8(d), it violates its duty to bargain under Section 8(a)(5) and precludes the employer from altering terms or conditions of the collective-bargaining agreement or engaging in a lockout to enforce its proposed changes.
See, e.g., NLRB v. Whitesell, Corp., 638 F.3d 883, 894 (8th Cir. 2011) (affirming NLRB Order requiring employer that failed to give timely notice under Section 8(d)(3) to reimburse union for uncollected dues from the date it failed to give timely notice).
If the union is the “initiating party” and fails to provide the required notices under Section 8(d), any work stoppage by the union would violate Sections 8(d) and 8(b)(3). There are also significant consequences for employees who strike before the proper notices are provided: Section 8(d)(4) provides that each striker “shall lose his status as an employee of the employer engaged in the particular labor dispute, for the purposes of sections 8, 9, and 10” of the NLRA.
Duty to Notify Both the FMCS and Any State Agency Where Employees Work
Parties typically notify the FMCS by mailing, faxing, or e-filing a “Notice of Bargaining” (F-7 Notice) with FMCS. Notifying FMCS, however, is not enough. Section 8(d)(3) also requires notification to “any State or Territorial agency established to mediate and conciliate disputes within the State or Territory where the dispute occurred.”
The Board has made clear that the duty to notify the State agency is independent of the duty to notify FMCS. For example, in Meatcutters Local 576 (Kansas City Chip Steak), 140 NLRB 876 (1963), the union notified the FMCS but failed to notify the Kansas State labor commissioner.
The Board found that the Kansas labor commissioner was a State agency “established to mediate and conciliate disputes” within the meaning of Section 8(d)(3) of the NLRA and that by failing before striking to notify the Kansas State labor commissioner of the existence of the labor dispute, as required by Section 8(d)(3) of the Act, the union violated the NLRA.
In fact, the FMCS’s website includes a “notice” to parties that they are required by the NLRA to file notice with any state mediation and conciliation service:
Please note the requirement to simultaneously notify the applicable state mediation agency if there is one having jurisdiction. For convenience, here is a link to a list of state labor and mediation agencies, maintained by the Association of Labor Relations Agencies (of which FMCS is a member): https://alra.org/member-agencies/#state.
Please understand that information for individual states is subject to change, and a party should independently confirm that they are giving notice to the right state agency, if one exists. Also, note that in many cases, the employer is not within a particular state agency’s jurisdiction (for example, a public sector labor relations commission or board may not have jurisdiction over private sector cases) and notice to such an agency may not be appropriate; parties should check to make sure that the agency is a proper recipient of notice.
 In MSR Industrial Services, LLC, 363 NLRB No. 1 (2015), the Board held that the notice requirements of Section 8(d) did not apply to Section 8(f) relationships.
 If bargaining involves employees of a “health care institution,” the 60-day period in Section 8(d)(1) and 8(d)(4) are extended to 90 days and the 30-day deadline in Section 8(d)(3) is extended to 60 days.