Second Circuit Vacates Decision Denying Arbitration

The Second Circuit Court of Appeals recently vacated a decision holding that a union could not compel arbitration of a grievance related to an expired collective bargaining agreement.

Xerox Corp. entered into a series of collective bargaining agreements with the Local 14A, Rochester Regional Joint Board, Xerographic Division Workers United. The final collective bargaining agreement expired in 2021 and the parties did not agree to a successor agreement. Xerox subsequently allegedly modified health benefits for certain retired workers. The union filed a grievance and demanded arbitration. Xerox refused to arbitrate and filed an action seeking declaratory relief and to stay and enjoin arbitration. It argued that none of the retiree benefits at issue had vested by the time the last collective bargaining agreement expired, and the union could therefore not enforce the provisions in the final agreement. The union argued that certain language in the final agreement promised benefits that survived the expiration of the agreement and were therefore enforceable.

The district court sided with Xerox, but the Second Circuit vacated that decision. It concluded that certain provisions in the final collective bargaining agreement could “be reasonably understood as guaranteeing benefits beyond the [final agreement’s] expiration or as constituting deferred compensation.” The Second Circuit also noted that to “discern the parties’ intent here, consulting extrinsic evidence of intent may be necessary,” which “would be a task for the arbitrator” “[i]f the Union’s grievance [was] indeed arbitrable.”

Xerox Corp. v. Local 14A Rochester Regional Joint Board, Xerographic Division Workers United, No. 23-634 (2d Cir. Feb. 5, 2025).