Assumption Of Collective Bargaining Agreement

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In Re Trump Entm`t Resorts UNITE HERE Local 54, 810 F.3d 161 (3d Cir. 2016), the U.S. Court of Appeals for the Third Circuit answered a question of first impression evident among appeled courts by ruling that Section 1113 of the Bankruptcy Act allowed a liquidator or Chapter 11-Reverse Charge („DIP“) to reject a collective agreement („CBA“) even after the agreement had expired. The courts of first instance disagreed as to whether such terminated contracts could be refused or whether the conditions transmitted from an expired KNA would remain in force until a new agreement was concluded. On 7 March 2014, TER announced to the union its „intention to terminate, amend or amend the CBA“ and asked the union to enter into negotiations for a new agreement. The union did not react. On 10 April 2014, TER reiterated its request. The union replied on 30 April that „if the Union also tries to start negotiations, about five months after the expiry of the KNA, the Union is simply not ready to start negotiations“, but it „will contact [TER] in the coming months“. According to the NLRA, once a collective bargaining relationship has been established, an employer cannot change certain mandatory bargaining matters without allowing the union to negotiate the change. Even if a CBA expires, the employer must maintain the status quo under the agreement, until the employer reaches a new CBA or negotiates an impasse.

See 29 U.S.C§ 158(a)(5); NLRB v. Katz, 369 U.S. 736 (1962) (an employer commits an unfair labor practice when it unilaterally alters existing terms and conditions of employment without ending up in a dead end). Trump Entertainment Resorts Inc. and its related companies (together „TER“) own and operate the Trump Taj Mahal Casino in Atlantic City, New Jersey. The casino has 2,953 employees, 1,467 of whom are unionized. UNITE HERE Local 54 (the „Union“) is the largest of the workers` unions. Congress did not use the word „executory“ anywhere in Section 1113, but instead chose the phrase „in force“ in Section 1113(e). . . .


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