# Luden's Inc. v. Local Union No. 6 of the Bakery, Confectionery & Tobacco Workers' International Union

> Court of Appeals for the Third Circuit · July 20, 1994 · 28 F.3d 347

URL: https://www.frixlaw.com/law-library/cases/6931274

## Case

- **Full name:** LUDEN'S INC. v. LOCAL UNION NO. 6 OF the BAKERY, CONFECTIONERY AND TOBACCO WORKERS' INTERNATIONAL UNION OF AMERICA American Arbitration Association, Bakery, Confectionery and Tobacco Workers' International Local Union 6
- **Court:** Court of Appeals for the Third Circuit
- **Decided:** July 20, 1994
- **Citations:** 28 F.3d 347
- **Precedential status:** Published
- **Opinion:** Dissent by Alito
- **Judges:** Alito, Becker, Cowen, Greenberg, Hutchinson, Lewis, Mansmann, McKee, Nygaard, Roth, Scirica, Sloyiter, Stapleton
- **Cited by:** 11 later opinions in the Frix Law Library

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## Opinion text

ALITO, Circuit Judge,
dissenting.
I would affirm the decision of the district court. For essentially the reasons explained by that court (see Luden’s Inc. v. Local Union No. 6, 805 F.Supp. 313, 323-27 (E.D.Pa.1992)), I would hold that the union’s grievance concerning the retroactivity of the proposed wage increase was not subject to the arbitration provision of the terminated 1988 collective bargaining agreement.
I would not reach the theory on which the court’s decision is based, i.e., that the parties, upon the termination of the 1988 agreement, entered into an implied-in-fact agreement containing an arbitration requirement similar to that in the 1988 agreement. The union did not advance this theory in the district court or in its brief in our court. Indeed, the union does not appear to have relied on the theory of an implied agreement until after this court requested the parties to submit post-argument memoranda addressing this subject. Under these circumstances, I do not think that it is necessary or appropriate to reach this theory, which may have considerable precedential importance.
While I am not willing, without the benefit of full briefing and argument, to express any conclusive views concerning the court’s theory, I will say that I have reservations about the correctness of the court’s analysis. At the outset, I am uncertain that the parties reached any implied-in-fact agreement after the 1988 agreement was terminated. I agree that a party’s conduct following the expiration of a contract may manifest assent to be bound by a new, tacit contract, but I am not *365 sure that the conduct of Luden’s in this case manifested such assent. After all, Luden’s took pains to terminate the 1988 collective bargaining agreement. While it appears to be true that “Luden’s kept the doors to its business open, invited its employees to enter, and conducted business as usual” (Maj. op. at 357), I am not sure that this conduct should be interpreted as a manifestation of assent to a new, tacit contract, particularly since federal labor law placed limitations on Luden’s ability to engage in a different course of conduct. See Litton Fin. Printing Div. v. NLRB, 501 U.S. 190, 198-99 , 111 S.Ct. 2215, 2221 , 115 L.Ed.2d 177 (1991) (concerning an employer’s unilateral changes in terms and conditions of employment); Stokely-Van Camp, Inc., 186 N.L.R.B. 440 (1970) (concerning pre-impasse lock-outs).
Even assuming for the sake of argument that the parties entered into some type of implied agreement, I am not certain that this agreement also contained an arbitration requirement. The rules set out in section 201 of the Restatement (Second) of Contracts seem potentially applicable. That provision states:
(1) Where the parties have attached the same meaning to a promise or agreement or a term thereof, it is interpreted in accordance with that meaning.
(2) Where the parties have attached different meanings to a promise or agreement or a term thereof, it is interpreted in accordance with the meaning attached by one of them if at the time the agreement was made '
(a) that party did not know of any different meaning attached by the other, and the other knew the meaning attached by the first party; or
(b) that party had no reason to know of any different meaning attached by the other, and the other had reason to know the meaning attached by the first party.
(3) Except as stated in this Section, neither party is bound by the meaning attached by the other, even though the result may be a failure of mutual assent.
Under these rules, the meaning attached by each of the parties is important, but in this case the record does not disclose what meaning either party attached to the implied agreement when it was formed. In particular, the record does not contain any stipulation or affidavit indicating that either party believed that the implied contract contained an arbitration requirement. Consequently, I find it difficult to see how the court can hold at this juncture that the implied contract included such a requirement. On the assumption that the issue of an implied-in-fact contract is properly before us, I am inclined to think that the most that the court could do is to reverse the award of summary judgment for Luden’s and remand for further proceedings (and perhaps for a trial) on the question whether the implied-in-fact contract contained an arbitration agreement.
Because the court does not seem to be concerned about the meaning that the parties attached to their putative agreement, the court’s decision does not appear to be based on a contract that is implied in fact, that is, “an agreement ... founded upon a meeting of minds, which, although not embodied in an express contract, is inferred, as a fact, from conduct of the parties showing, in the light of the surrounding circumstances, their tacit understanding.” Baltimore & Ohio R.R. v. United States, 261 U.S. 592, 597 , 43 S.Ct. 425, 426-27 , 67 L.Ed. 816 (1923). Rather, the court’s decision seems to be based on “an agreement ‘implied in law,’ more aptly termed a constructive or quasi contract, where, by fiction of law, a promise is imputed to perform a legal duty.” Id. The court summarizes its holding as follows:
[W]e hold that in a continuing employment relationship an arbitration clause may survive the expiration or termination of a CBA intact as a term of a new, implied-in-fact CBA unless (i) both parties in fact intend the term not to survive, or (ii) under the totality of the circumstances either party to the lapsed CBA objectively manifests to the other a particularized intent, be it expressed verbally or non-verbally, to disavow or repudiate that term.
Maj. op. at 364. This flat rule is suggestive of an obligation that arises by operation of law, not one based on an actual, albeit tacit, agreement between two particular parties.
*366 If this interpretation of the court’s decision is correct, I have serious reservations whether that decision is consistent with the Supreme Court’s refusal in Litton, 501 U.S. at 200-01 , 111 S.Ct. at 2222 , to recognize a legal duty to arbitrate disputes arising after a collective bargaining agreement expires. In Litton, the Court “reaffirm[ed] ... that under the NLRA arbitration is a matter of consent, and that it will not be imposed upon parties beyond the scope of their agreement.” Id. at 201 , 111 S.Ct. at 2222 .
For these reasons, I am not willing at this point to endorse the court’s analysis, and I therefore respectfully dissent.
Present: SLOYITER, Chief Judge, BECKER, STAPLETON, MANSMANN, GREENBERG, HUTCHINSON, SCIRICA, COWEN, NYGAARD, ALITO, ROTH, LEWIS and McKEE, Circuit Judges.

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/6931274. Public record. Not legal advice.