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MARINE TRANSP. LINES, INC. v. INTERNATIONAL ORG. O

June 6, 1986

MARINE TRANSPORT LINES, INC., Plaintiff,
v.
INTERNATIONAL ORGANIZATION OF MASTERS, MATES, & PILOTS, Defendant



The opinion of the court was delivered by: WEINFELD

EDWARD WEINFELD, D.J.

Plaintiff, Marine Transport Lines ("MTL"), brought this action seeking a declaration that its collective bargaining agreement with defendant International Organization of Masters, Mates & Pilots ("the Union") terminated at midnight on June 15, 1984. The defendant has asserted four counterclaims. The first counterclaim alleges that the agreement did not terminate as claimed by the plaintiff, and that the plaintiff breached the agreement; the second alleges that a subsequent oral agreement between the parties extended the termination date of the agreement as to certain of MTS's vessels; the third alleges that the union may recover for breach of the collective bargaining agreement under a theory of promissory estoppel; and the fourth claims tortious interference with contract. By opinion dated May 22, 1985, the Court held that so much of the union's fourth counterclaim as concerned events occurring before the date of alleged termination of the contract, June 15, 1984, was subject to arbitration under the agreement's terms. In addition, the Court stayed consideration of the remainder of the fourth counterclaim pending resolution of the question of the collective bargaining agreement's termination. *fn1" Plaintiff now moves for summary judgment in its favor on its declaratory judgment claim, and against defendant on each of the counterclaims.

 The master collective bargaining agreement (the "Master Agreement") about which this litigation centers was negotiated by the defendant Union and 109 operators of U.S.-flag oceangoing vessels, and established the terms and conditions of employment of defendant's members, who as licensed deck officers are considered supervisory personnel under the National Labor Relations Act. *fn2" The contract period and renewal procedure were set forth in the following provision:

 
The Organization and the Company hereby enter into an Agreement effective June 16, 1981 covering conditions of employment, wages, hours and working conditions said Agreement to be binding upon the parties and continue in full force and effect until midnight June 15, 1984, and shall be automatically renewed thereafter from year to year unless at least sixty (60) days before the expiration date designated herein or the expiration date of any renewal period, written notice of a desire to renegotiate, modify, amend or terminate the Agreement is given by certified mail by either party to the other. *fn3"

 During the effective period of the Master Agreement, in the fall of 1982, MTL requested wage and benefit concessions by Union members working aboard nine vessels operated by MTL under contract with the United States Navy's Marine Sealift Command. MTL told the Union that the Navy would not renew its contract with MTL unless the Union agreed to the requested labor cost reductions. MTL's negotiators further informed the Union that MTL believed the loss of the Navy Sealift contract would force MTL into bankruptcy.

 As a result of these discussions between MTL and the Union, the parties entered into an oral agreement (the "Sealift Agreement") covering those Union members working aboard the nine Sealift vessels. Wages under this agreement were rolled back to 1981 levels, and frozen for the two-year period from May 1983 to May 1985 covered by the proposed extension of the contract between the Navy and MTL; vacation and other benefits were also decreased. The modifications to the terms of employment aboard the nine Sealift vessels were never reduced to writing; MTL submitted a draft agreement to the Union in June 1983, but the Union refused to sign. While the Union acknowledges that five of the draft agreement's paragraphs set forth the terms of the oral agreement, the Union contends that one new term was included in the draft written agreement which was not acceptable. *fn4"

 On April 8, 1984, more than sixty days in advance of the June 15 expiration date of the Master Agreement, the Union sent to all employer parties to the Master Agreement a letter which stated, in its entirety:

 
This letter shall constitute written notification of our intention to modify and amend our present Collective Bargaining Agreement which expires at midnight, June 15, 1984. We are prepared to meet at a mutually convenient date. *fn5"

 On April 12, 1984, counsel for the multi-employer bargaining committee which represented MTL replied to the Union that the employers "also wish[ed] to engage in negotiations with respect to modifying the instant Contract." *fn6" On June 6, 1984, MTL withdrew from the multi-employer bargaining committee. *fn7" No further negotiations between MTL and the Union were held; on June 15, 1984, MTL sent to each Union deck officer in its employ a letter stating that MTL would no longer recognize MM & P as the bargaining agent for its deck officers, and setting forth unilateral terms and conditions of continued employment.

 Plaintiff's Claim and Defendant's First Counterclaim

 MTL contends that the Union's April 8 letter constituted sufficient notice under the applicable clause of the master Agreement to prevent automatic renewal of that agreement on June 16, 1984. The Union argues that the letter was not notice to terminate the agreement, but was merely notice of intent to modify or amend it. It emphasizes that its notice did not use the word "terminate," and contends that the agreement was therefore automatically renewed. This controversy as to the interpretation of the April 8 letter is at the heart of the issues presently before the Court. MTL relies upon the April 8 letter to support its motion for declaratory relief holding that the Master Agreement expired on June 16, 1984; the Union, on the basis of its contrary interpretation, asserts its first counterclaim for breach of the Master Agreement.

 It is of course a settled principle that the interpretation of collective bargaining agreements is a matter of federal substantive law, and not of state statutory or common law. *fn8" The present motions seek summary judgment, and as our Court of appeals has repeatedly made clear, summary judgment is not appropriate if the contract language at issue is ambiguous, or is subject to more than one interpretation. *fn9" On its face, the duration clause of the Master Agreement is entirely unambiguous. It states that the Agreement is to "continue in full force and effect until midnight June 15, 1984, and shall be automatically renewed thereafter from year to year unless at least sixty (60) days before the expiration date . . . written notice of a desire to renegotiate, modify, amend or terminate the Agreement is given by . . . either party to the other." Automatic renewal occurs unless any of the enumerated types of notice is given; no functional or grammatical distinction is drawn between notice to terminate on the one hand and notice to renegotiate, amend, or modify on the other.

 The conclusion that the language of the Master Agreement is unambiguous on its face is supported by the decisions of other courts which have reached the same result with respect to similar contract language, *fn10" and indeed with respect to the very provision here at issue. *fn11" Both the federal courts and the National Labor Relations Board have frequently held that where a collective bargaining agreement does not explicitly differentiate between the functional effect of notice to modify and notice to terminate, notice of a party's intention to modify is sufficient to prevent automatic renewal of the agreement. *fn12"

 In opposition to MTL's motion for summary judgment, the Union contends that the duration clause of the master Agreement provides for two distinct forms of notice -- notice to terminate and notice to modify or amend -- which have different practical effects. In particular, the Union's president states that he was the draftsman of the clause at issue and that his understanding of the clause was that notice to modify or amend was distinct and entirely separate from notice to terminate, because the subject of the negotiations held in the sixty days following notification would vary substantially with the type of notice given. *fn13" While it may well be true that the subject of negotiation occurring after notice to terminate would differ from the negotiations following a notice of desire to ...


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