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Legal Corner Sep 20, 2010
What Constitutes a "Past Practice?"
by Richard P. McCann, J.D.

(Copied from NCPSO website - www.ncpso.com - 09/20/10)

The most often-cited reference to "past practice" is the article by Arbitrator Richard Mittenthal entitled "Past Practice and the Administration of Collective Bargaining Agreements."  59 Michigan Law Review (1961).  Arbitrator Mittenthal's definition of past practice is:  A course of conduct that is the understood and accepted way of doing things over an extended period of time, and thus, mutually binding and enforceable.  This is a simple and straightforward definition.

The Purpose of the Past Practice

One purpose is to clarify an ambiguous contract provision.  For example, if the contract states that employees get overtime for work in excess of 8 hours a day, and the contract does not state what a "day" is, one side will argue that a day is midnight to midnight.  The other side will argue that a day is a 24 hour period, beginning with an employee's shift.  This dilemma would be resolved by looking to the practice, so long as it has been handled consistently.

Another purpose is to give specificity to a general contract benefit or limitation.  For example, just cause is a general statement. In some workplaces, just cause is given some specific definition by the existence of past practice.

Still another purpose is to fill a gap in the agreement.  If a contract deals specifically with one workplace rule in great detail, but then leaves a gaping hole in a unique way, arbitrators resort to a past practice analysis in order to determine what the parties intended.

Finally, the purpose may be to create an entirely new benefit outside the contract.  Let us assume that a contract provides, among other things, that promotions are based on seniority when qualifications are equal in all other respects.  Yet, both parties recognized a practice that if an employee worked more than 50% of the time in a higher level classification with pay for it, then that employee was entitled to the promotion, despite what seniority might determine.  Now, the union alleges that the company is handpicking people for promotions by temporarily assigning them to higher classifications, and thereby skirting the seniority provisions in the contract. Is this a past practice? Some arbitrators would hold that it is.

Occasionally, a past practice is used to modify, amend or even contradict a clear and unambiguous provision of the contract.  The underlying theory here is that the parties have the right to amend their contract during the contract term, unless the contract expressly prohibits amendments, whether by conduct or words.  The majority of arbitrators have found that past practice cannot modify, amend or contradict the contract.  But there are arbitrators who will permit it, if the proof is clear.

Past Practice: Sub-Issues

Using Arbitrator Mittenthal's definition, several sub-issues have been vigorously argued in arbitration.  First is the issue of clarity.  Assume that the alleged practice is providing a 20-minute break in the afternoon, when the contract does not say anything about breaks.  In this context, clarity means that the testimony at the hearing must be clear and specific.  The union cannot call a witness who is vague. The witnesses must be able to state the length of the break, under what circumstances it has been enjoyed, how often, etc.

Second, the witness must also be certain.  The witness should not say, "it was my impression," or "I think it was."  The most troubling testimony is when the witness says, "It was my understanding that . . ." To arbitrators, this witness sounds ambiguous and lacks personal knowledge.

Third, consider the sub-issue of consistency.  In the above example, the union needs to show that the break was regularly taken.

The fourth sub-issue is repetition.  It's a key element that the practice be repeated. If the break is daily, witnesses must testify to that effect. While consistency refers to the kind of practice, repetition refers to the number of breaks.

The next sub-issue, and perhaps the most important in this example, is that the practice was accepted by both parties and integral to the employment relationship.  Further, that it was matter of an obligation, and not something that was convenient or by happenstance.  In the example of the afternoon break, testimony must show that the supervisor knew and accepted and approved the break.  In this way, you can argue that the practice was mutually binding.

Mutuality

Over the years, a division has occurred over the kinds of cases which deal with past practices.  On one side are benefits and working conditions.  On the other side are management functions.  The distinction is that the contract covers the first category.  These are tangible benefits to the employees and in these kinds of cases, a past practice can arise that is mutually binding.

Some arbitrators would say that in the second category - assignment of work, establishment or hours, - past practices cannot arise.  This is particularly true when the management function was not done out of any obligation to the union.  For example, management can have an 8 a.m. start time for several years, and then decide to change it to 8:30 am.

The most famous citation to this latter point is by Arbitrator Harry Shulman, sitting as an umpire in Ford Motor Co. cases, who ruled that a practice cannot be binding simply because it existed.  In Shulman's view, the practice had to arise out an agreement and it was the fact of an agreement between the parties that permitted the arbitrator to enforce a past practice.

Arbitrator Shulman is also often cited because he used colorful language to describe the proof in past practice cases: "A bog of contradictions, fragments, doubts and one-side views," which came out of the mouths of witnesses.  Ford Motor Co-UAW, Opinion A-278, 19 LA 237 (1952).

If you need an agreement from which the past practice arose, as Shulman required, there are two ways for the agreement to exist.  The agreement could either be explicit (there was an oral agreement) or by conduct.  Conduct can take the form of acquiescence or concessions on the part of the employer or union.  For example, the failure of the union to file grievances or management's recognition of past grievances as legitimate may be enough of an "agreement" from which to find that a past practice existed.

Scope of Past Practice

To determine the scope of a past practice, you need to determine the circumstances under which the practice arose.  The rule is that the these circumstances limit the scope of the practice.  Thus, if the circumstances change, the practice may change. If the circumstances expire, the practice expires.

If the circumstances stay the same, then the practice is binding through the duration of the contract. In essence, the practice becomes an implied term of the contract.

Another rule is that the practice can be terminated by either party during the negotiations following the expiration of the agreement.  All that either party needs to do is state during negotiations: "We no longer will abide by that practice."  However, if you do not make such a statement, the succeeding contract is silent, and the circumstances stay the same, then the practice continues and is binding during the term of the next agreement.

It is important to differentiate between the nature of the practice and the consequences of the practice.  Arbitrator Mittenthal illustrates this point by an example of two work groups of electricians in one plant, with different foreman.  One group handles installation of new equipment and the other group handles maintenance and repairs. Over the years, the employer had approved overtime for whichever group that was working the job at the time.  In implementing this practice, the total amount of overtime between the two groups was approximately equal.  The union claimed that the equalization of overtime had become a past practice and thus, overtime must be equally shared.  But that is a mistaken analysis because the groups are different and earn overtime differently.  It was coincidence that the result of management's automatic assignment of overtime to the group on the job was equality between the two groups.  The arbitrator would not be persuaded to find a past practice based on the consequence or result; the arbitrator must look to the nature of the practice.

Contractual Recognition of Past Practice

Another aspect of this issue are "maintenance of condition clauses" which seek to maintain past practices.  For example, a letter of agreement can be appended to the contract which says that proven past practices will continue in force and effect unless agreed to the contrary.  Or the letter of agreement will refer generically to all past practices, but not say what they are.  Another possibility is that the agreement contemplates that the parties can create a practice during the agreement.

Some contracts seek to eliminate past practices by using zipper clauses or "entire agreement" clauses.  For example, the contract could say "we hereby eliminate all past practice, except the following. .. ."  But even with that language, a practice can re-arise under the contract term.  One can even re-invent the practice in order to continue it.

Problems of Proof

The most difficult matter is coming up with the proof to prove that a past practice exists.  Advocates should note the importance of presenting evidence that addresses these issues:

-  How strong is the evidence that the course of conduct was generally understood?

-  How long is long enough to establish longevity?  This will vary based on all of the circumstances, including industry and the nature of the practice.

 -  How often is "repetitive" enough?

 -  How to prove "mutuality"?:  By explicit oral agreement, silent acquiescence, specific acts or omissions, lack of grievance by Union protesting management actions, or by Management granting of previous grievances.

 -  Confine the claim and evidence to what is provable in the scope of the alleged past practice.

 -  Anticipate the arguments from the other side, and address them. Arbitrator Paul Glendon notes these pitfalls for advocates:

 -  Alleging more than you can prove.

 -  Attempting to expand the scope of the alleged practice beyond originating circumstances.

 -  Failing to recognize changes in such circumstances and attempting to enforce practice after basis for it ceases to exist.

 -  Failing to offer effective and specific evidence to rebut claim of past practice.

-  Placing too much stock in "zipper" and similar clauses, and not remembering that courts and labor arbitrators view labor agreements as contracts that govern and reflect dynamic, not static, relationships

 

 

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