Here’s something to consider when contracting with a union. If the contract contains a so-called “evergreen clause,” be sure to follow the directions if you want to cancel the agreement after a term.
Recent case: A production company entered into a collective bargaining agreement with a union. The agreement included an evergreen clause that stated it “shall continue in full force and effect to and including December 31, 2007 and from year to year thereafter.”
At the end of 2007, the parties didn’t agree on a new agreement. A few years later, the union sought to enforce the earlier contract through a request to arbitrate.
The court said it could and that an arbitrator will decide if the agreement is still in effect. (IATSE Local 720 v. In Sync Show Productions, No. 12-17200, 9th Cir., 2015)
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