On January 14, 2021, the NLRB issued a decision in Asociacion de Empleados del Estado Libre Asociado de Puerto Rico, 370 NLRB No. 71. The decision involved the issue of whether a term of employment contained in a collective bargaining agreement continues after the expiration of the contract. This issue has been vexing for employers and unions for years.

The case centered around a Puerto Rico Law, Law No. 148, that requires certain employers to pay their employees Christmas bonuses of up to $600 annually between November 15 and December 15. The law does not apply, however, “in cases where the … employees receive an annual bonus by collective agreement.”

The employer here was a Puerto Rican corporation subject to Law No. 148. The CBA at issue ran from July 2013 through June 2017. Like all of the parties’ prior CBAs, the CBA provided for a Christmas bonus. The language at issue provided: “[The Respondent] will grant the Christmas Bonus as provided in [Law No. 148] with the following modification”. The CBA then provided for bonus payments according to differing formulas in 2013, 2014, 2015, and 2016. For context, the 2016 modification provided for a bonus of 8.65% of an employee’s salary up to a maximum of $40,000.

The issue arose when, in December 2017, during a period when no agreement was in effect, the union requested the employer pay Christmas bonuses according to the amount most recently provided for by the then-expired CBA. The employer refused, paying only $600, as required by Law No. 148. The next year, an extension agreement was in effect. The union made the same request, and the employer again refused, paying each employee a $600 bonus.

The NLRB considered the employer’s 2017 actions (when the contract was expired) and 2018 actions (which occurred during an extension) separately. It considered whether, in December 2017, the employer’s $600 bonus violated Section 8(a)(5) of the NLRA by unilaterally changing employees’ terms and conditions of employment. The Board also considered whether, in December 2018, the Respondent’s $600 bonus violated Section 8(a)(5) within the meaning of Section 8(d) by modifying the CBA. The Board answered both questions in the negative, finding the Respondent acted lawfully by paying $600 bonuses.

Unilateral Change Allegation

To address the unilateral change allegation, the NLRB relied on the CBA’s plain language. The NLRB found the CBA’s reference to the “Christmas Bonus as provided in [Law No. 148]” meant the statutory bonus amount constituted the baseline contractual bonus amount. The greater bonuses explicitly provided for in each of 2013, 2014, 2015, and 2016 were simply contractually provided-for modifications of the statutory amount. Therefore, when the 2013 – 2017 agreement expired without a successor CBA, the status quo reverted to the baseline contractual $600.

The NLRB found the parties’ intent supported this conclusion: their including language providing for modifications in each of the 4 specified years was “inconsistent with an intention that employees would continue to receive greater-than statutory bonus amounts in years other than those four…” The language evinced an intent that in case of hiatus or extension, the Respondent would provide $600 “but under the contract and not by operation of law.”

The NLRB dismissed the judge’s reasoning, which relied on the parties’ past practice of paying a bonus based on contractually provided for formulas, not the statutorily required amount. The NLRB reasoned instead that the employer’s historical practice of paying more than the statutory amount was always pursuant to the CBA, and the employer’s “history of adhering to successive contracts” did not create a past practice. Even if it did, the NLRB stated, the employer followed that practice by adhering to the post-expiration status quo in 2017.

Contract Modification Allegation

The NLRB then considered whether the employer’s $600 bonus paid in December 2018 was lawful. The Board first noted the standard for finding a violation of 8(a)(5) within the meaning of 8(d): if the employer “has a sound arguable basis for its interpretation of [the] contract…” then they have not violated the Act. This standard is met where the interpretation is at least colorable.

Here, the Board found there was only one reasonable interpretation of the contract: that the contractual baseline amount was $600, and the bonus amount was modified in only the 4 years articulated in the contract. Therefore, in December 2018, the bonus amount required by the contract was the statutorily required $600, and the employer necessarily had a sound arguable basis for interpreting the contract in this way.


NLRB Member McFerran dissented from the Board’s decision, finding that the Board’s reliance on the contractual language was misplaced. McFerran noted that, until December 2017, employees had never received only the statutory minimum. Further, while the CBA established a Christmas bonus scale through 2016, “[it] did not address what would happen thereafter.” McFerran stated absent a successor agreement, the status quo was “defined by the 2016 bonus level, the last level specified in the expired contract and reflected in the last Christmas bonus that the Employer actually paid before its federal-law duty to maintain the status quo was triggered.”

McFerran pointed out that providing only the statutory minimum was contrary to the parties’ experience, expectations, and prior CBA’s; surely if the parties had intended to provide only the statutory amount – an “extraordinary result” – then the parties would have clearly so stated. McFerran took issue with the NLRB’s finding that the employer maintained the status quo by providing only the statutory amount, because such payment was never the practice. McFerran criticized the NLRB’s decision as being “completely divorced from the realities of the parties’ experience” which is an important consideration in the unilateral change analysis.


Here, the NLRB credited the CBA’s plain language in finding that bonuses above the statutory minimum were paid pursuant to a CBA which provided for the statutory minimum as the baseline contractual amount and thus, the status quo.

Currently, the starting place for the analysis of what happens post-expiration of a collective bargaining agreement starts and ends with the language of the contract. This narrow interpretation is likely to be changed in the coming years with the change in the make-up of the Board. Out of an abundance of caution, employers should consider how the language of the contract would be interpreted in the event the contract expires and a successor agreement is not immediately put into place.

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Photo of Mark Theodore Mark Theodore

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice…

Mark Theodore is a partner in the Labor & Employment Law Department. He has devoted his practice almost exclusively to representing management in all aspects of traditional labor law matters throughout the U.S. He is Co-Chair of Proskauer’s Labor-Management and Collective Bargaining Practice Group.

Some recent highlights of his career include:

  • Successfully defended client against allegations that it had terminated a union supporter and isolated another. T-Mobile USA, Inc., 365 NLRB No. 15 (2017).
  • Successfully appealed NLRB findings that certain of client’s written policies violated the National Labor Relations Actions Act.  T-Mobile USA, Inc., 363 NLRB No. 171 (2016), enf’d in part, rev’d in part 865 F.3d 265 (5th Cir. 2017).
  • Represented major utility in NLRB proceedings related to organizing of planners.  Secured utility-wide bargaining unit. Bargained on behalf of grocery chain.  After negotiations reached an impasse, guided the company through lawful implementation of five year collective bargaining agreement.
  • Coordinated employer response in numerous strike situations including a work stoppage across 14 western states of the client’s operations.

Mark has extensive experience representing employers in all matters before the NLRB, including representation petitions, jurisdictional disputes and the handling of unfair labor practice charges from the date they are filed through trial and appeal. Mark has acted as lead negotiator for dozens of major companies in a variety of industries, including national, multi-unit, multi-location, multi-employer and multi-union bargaining. Mark has handled lockout and strike situations, coordinating the clients efforts.

In addition, Mark has handled hundreds of arbitrations involving virtually every area of dispute, including contract interest arbitration, contract interpretation, just cause termination/discipline, benefits, pay rates, and hours of work.

Photo of Joshua Fox Joshua Fox

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several…

Joshua S. Fox is a senior counsel in the Labor & Employment Law Department and a member of the Sports, Labor-Management Relations, Class and Collective Actions and Wage and Hour Groups.

As a member of the Sports Law Group, Josh has represented several Major League Baseball Clubs in all aspects of the salary arbitration process, including the Miami Marlins, Boston Red Sox, Los Angeles Dodgers, Kansas City Royals, San Francisco Giants, Tampa Bay Rays and Toronto Blue Jays. In particular, Josh successfully represented the Miami Marlins in their case against All-Star Catcher J.T. Realmuto, which was a significant club victory in salary arbitration. Josh also represents Major League Baseball and its clubs in ongoing litigation brought by current and former minor league players who allege minimum wage and overtime violations. Josh participated on the team that successfully defended Major League Baseball in a wage-and-hour lawsuit brought by a former volunteer for the 2013 All-Star FanFest, who alleged minimum wage violations under federal and state law. The lawsuit was dismissed by the federal district court, and was affirmed by the U.S. Court of Appeals for the Second Circuit.

Josh also has extensive experience representing professional sports leagues and teams in grievance arbitration proceedings, including playing a vital role in all aspects of the grievance challenging the suspension for use of performance-enhancing drugs of then-New York Yankees third baseman Alex Rodriguez. Josh also has counseled NHL Clubs and served on the trial teams for grievances alleging violations of the collective bargaining agreement, including cases involving use of performance-enhancing substances, domestic violence issues, and supplementary discipline for on-ice conduct. He has played a key role in representing professional sports leagues in all aspects of their collective bargaining negotiations with players and officials, including the Major League Baseball, National Hockey League, the National Football League, Major League Soccer, the Professional Referee Organization, and the National Basketball Association,.

In addition, Josh has extensive experience representing clients in the performing arts industry, including the New York City Ballet, New York City Opera, Big Apple Circus, among many others, in collective bargaining negotiations with performers and musicians, the administration of their collective bargaining agreements, and in grievance arbitrations.

Josh also represents a diverse range of clients, including real estate developers and contractors, pipe line contractors, hospitals, hotels, manufacturers and public employers, in collective bargaining, counseling on general employment matters and proceedings before the National Labor Relations Board, New York State Public Employment Relations Board and arbitrators.

Josh has also recently served as an adjunct professor at Cornell University’s School of Industrial Labor Relations for the past two years, teaching a course regarding Major League Baseball salary arbitration.

Prior to joining Proskauer, Josh worked for a year and a half at the National Hockey League, where he was involved in all labor and employment matters, including preparations for collective bargaining, grievance arbitration, contract drafting and reviewing and employment counseling. Josh also interned in the labor relations department of Major League Baseball and at Region 2 of the National Labor Relations Board. He was a member of the Brooklyn Law Review and the Appellate Moot Court Honor Society and served as president of the Brooklyn Entertainment and Sports Law Society.