June 01, 2016 Articles

The Third Circuit Affirms a Debtor's Ability to Reject an Expired CBA

The court held that section 1113 applies to both expired and unexpired collective bargaining agreements.

By Zachary I. Shapiro

Trump Taj Mahal Associates, LLC, and certain affiliated entities (collectively, the debtors) owned and operated the Trump Taj Mahal Casino in Atlantic City, New Jersey. Taj Mahal and UNITE HERE Local 54, the largest of the debtors’ employee unions, were party to a CBA that was negotiated in 2011 and had a three-year term. On September 9, 2014, prior to the expiration of the CBA, the debtors commenced Chapter 11 cases in the U.S. Bankruptcy Court for the District of Delaware. On September 14, 2014, the CBA expired pursuant to its terms. However, notwithstanding the expiration of the CBA, the National Labor Relations Act (NLRA) obligated the debtors to continue to honor the terms of the expired CBA until the parties reached a new agreement or a bargaining impasse.

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