MOVING PAST THE PAST PRACTICE MISCONCEPTION

By S. Randall Weltman, Esq.

Over the years I have noticed many misconceptions that OPBA members possess in the area of labor law.  Those misconceptions range from “the law provides us with guaranteed breaks” to “HIPPA prevents my employer from inquiring about my illness” to “we’ve always done it that way so it’s a past practice.”

Each of these misconceptions has a basis for belief but none are actually true.  In this article I examine and discuss the real law and meaning of the popular term “past practice”.

Past practice is a term of art that arises when a party to a collective bargaining agreement attempts to enforce a “practice” regarding a matter that is not included in the written contract.  It is also asserted in order to assist in the actual interpretation of a confusing written term of a contract.  And finally, past practice is sometimes cited to support a claim that a “clear” term of the written contract has been “amended” by mutual agreement as evidenced by the parties’ past practice.

Evidence Required To Establish A Past Practice

Most arbitrators have recognized that for a past practice to be established that certain elements must be proven  in regard to the practice.  The practice must be unequivocal; clearly understood and acted upon; and readily ascertainable over a reasonable period of time as a fixed, and established practice accepted by both parties.

A couple of understandable ways that arbitrators have defined a past practice are: “a pattern of conduct which appears with such frequency that the parties understand that it is the accepted way of doing something”; “a practice exists when a certain result has been utilized in repetitive and identical circumstances”; “a practice is established if, when one circumstance occurs, it is consistently treated in a certain way”. To constitute a past practice, the occurrence need not be daily or weekly, or even yearly, but when it happens, a given response to that occurrence must always follow.

Past Practice When The Contract Is Silent

In cases where the labor contract is completely silent with respect to a given activity, the presence of a well-established practice may constitute an “implied” term of the contract.  In law, an implied term of a contract is as enforceable as a written term.

In labor law, though, the enforcement of an implied term often depends on whether the term involves methods of operation and/or direction of the workforce or whether it involves a benefit of personal value to the employees.  Generally, past practices involving a benefit are permitted to become an implied term while practices involving the exercise of management rights are not.

As we all know, arbitrators have permitted wide authority in management to control methods of operation and to direct the work force, including the right without penalty to make changes if the changes do not violate some right of the employees granted elsewhere by the written contract.  As such, arbitration case law contains many examples of a past practice not becoming an implied term sufficient enough to prevent management from: changing work schedules or reassigning work or determining the number of workers or eliminating a job and/or adding or eliminating job duties within reasonable limits.  The rationale behind these cases is that if management really intended to concede its management rights, then it would do so expressly in writing, and not implicitly.

An illustration of this outcome would be a situation where management has retained its  right to schedule and pursuant to that right management has utilized fixed shifts for several years.  Despite this history the parties have not referenced such a practice anywhere in their labor contract.  When the employer suddenly decides to implement rotating shifts instead, most employees think that the long standing  past practice of utilizing fixed shifts will prevail.  Uh, no; the contract is silent and the implied term we think exists will not be enforced because a management right relating to running the operation is involved.

In contrast to the freedom management is afforded regarding its basic functions, arbitrators often rule that past practice matters involving “a benefit of peculiar personal value to the employees” can be implied enough to become enforceable.  Because these matters generally do not involve management rights and because a long standing but unwritten benefit is at stake, arbitrators have found the provision of the benefit to be implied.

Arbitrators reason that an employer would not ever provide something of value to its employees, regularly and routinely, unless it intended to do so.  Wash-up periods, lunch period arrangements, paid work breaks, free coffee or free meals, payment of employee’s salary during workers’ compensation waiting period, release time for collective bargaining, allowances and maternity leaves of absence are all examples of a “benefit of a peculiar value” that arbitrators have permitted to become implied terms of a contract.

A great example of a past practice becoming an implied term of the contract involves the giving/taking of a promotional test in 24/7 operation like a police department.  In this instance there will always be candidates taking the exam while they are on duty and other candidates taking the exam while they are on their off time.  Yet rarely is there a contract term that addresses this activity.

In most cases involving this activity the parties have, knowingly or not, developed a past practice of releasing working candidates from duty and/or compensating off duty candidates for attending.  Even though this may happen once every three (3) years, it happens the same way each time. Should the employer ever decide to terminate such a practice and refuse to pay those taking the test while off duty, it will probably be on the losing end of an implied term past practice case.

Past Practice Used To Interpret A Contract Term

The most common use of a past practice is for the interpretation of ambiguous or unclear contract language.  This makes sense because unclear language can best be defined or explained by the parties’ “intent” in agreeing to and constructing the contract’s language. And a party’s intent is most often and best defined in its actions.  Those actions are demonstrated and measured through the “practice and custom of the parties” in relation to the unclear term.  Thus the parties’ past practice often provides the real meaning to an unclear contract term.

The general attitude of arbitrators is that they give great weight to a past practice when interpreting unclear language.  They routinely rule that where a practice has established a meaning for language in a contract, the language will be “presumed” to have the meaning given it by that practice.

A past practice used to interpret an ambiguous term does not have to be so “frequent and regular and repetitious.”  For purposes of interpreting ambiguous language, relatively few past instances have been required to establish a binding practice.  This is especially so when the incidents giving rise to the issue rarely occur.  So long as the parties’ practice is consistent upon each infrequent occurrence, it still rates as sufficient to define the ambiguous term.

Past Practice Used To Permit Variances From Clear Contract Language

While past practice is frequently used to establish the intent of contract language that is subject to different interpretations, it rarely can be used to alter the meaning of a clear and unambiguous term.  In almost every instance the clear language is enforced.  This is so even where an arbitrator overwhelmingly believes that, on the basis of fairness, the past practice should have prevailed.

Here are some illustrative arbitration holdings standing for the principle that clear language always trumps a past practice:  “Where a conflict exists between the clear and unambiguous language of the contract and a long standing past practice, the Arbitrator is required to follow the language of the contract”; “While the Arbitrator recognizes that it is difficult to accept the overturn of a fifteen (15) year past practice, the Arbitrator is required to do so in light of the clear and certain language”;  “Past practice” is a useful means of ascertaining intention in case of ambiguity or indefiniteness, but no matter how well established a practice may be, it is unavailing to modify a clear promise.”

A good example of this principle involves the specific time limits set forth in a grievance procedure that also includes a provision requiring the parties to “strictly adhere” to such time limits.  Even though the parties may have established a past practice of routinely ignoring and/or relaxing those specified time limits, should one or the other insist that one acted untimely, that insistence will prevail.  This is because of the contract’s clear language requiring strict compliance.

Any past practice that the parties have mutually followed or that have been enforced by an arbitrator can ultimately be broken and discontinued.  This can only occur, though, upon the expiration of the contract, during the collective bargaining process.  At the table the party who wants to terminate the practice simply declares that the practice will no longer be recognized, thus allowing or forcing the other party to regain (or not) the practice through the bargaining process.

As the foregoing indicates, what OPBA members often think of as a past practice is probably still a past practice.  It is wrong, however, to think that every past practice can be made to be binding as if it was a written contract term.  For further guidance and explanation of the law of past practice, consult your OPBA Representative.