By Ronald Miller, J.D.
The United States Soccer Federation (USSF) had a binding collective bargaining agreement with the United States Women’s National Soccer Team Players Association, a federal district court in Illinois found, comprised of a Memorandum of Understanding (MOU) and the unmodified provisions of the parties’ 2005 CBA. Contrary to the union’s contention, the union’s previous general counsel had apparent authority to execute the MOU and to thereby bind the union. However, the USSF was not entitled to summary judgment on its claim against the union for anticipatory breach of contract because the union had not manifested a clear, unequivocal intent not to perform under that contract when performance was due (U.S. Soccer Federation v. U.S. Women’s National Soccer Team Players Association
, June 3, 2016, Coleman, S.).
Anticipatory breach of contract.
After a dispute arose as to the terms of the CBA that governs their relationship, the USSF brought an action for anticipatory breach of contract and declaratory judgment against the players association, which serves as the collective bargaining representative of players on the Women’s National Soccer Team. The union is governed by three players’ representatives and an executive director appointed by a majority of the players’ representatives. If no executive director is appointed, the general counsel is authorized to perform the functions of the executive director. From its inception until the fall of 2014, the players association was represented in its interactions with USSF by its general counsel.
Memorandum of understanding.
The USSF and the union entered into their first CBA in March 2001. That agreement and successive CBAs expressly incorporated the terms of a corresponding Uniform Player Agreement and fee schedule. In the fall of 2012, the parties began negotiating a new CBA, and the union was again represented in negotiations by its general counsel. The negotiations were complicated by the need to address the integration of the Women’s National Team into the newly formed National Women’s Soccer League (NWSL). As the deadline for the NWSL’s launch approached, several issues remained unresolved. Accordingly, the parties agreed to execute a MOU with the understanding that a fully integrated CBA would be executed once the remaining issues were resolved.
In a subsequent email regarding potential topics to be addressed in the MOU, the union’s general counsel wrote, “Terms from the old CBA that we have not addressed remain unchanged unless inconsistent with the memo we will sign.” A USSF representative responded, “The general principle that stuff that we have not specifically covered would remain the same (or be appropriately adjusted) as in the previous CBA seems sensible.” The general counsel took these emails to mean that the parties “were identifying issues that would be the modifications to the existing Collective Bargaining Agreement and then in all other respects the Collective Bargaining Agreement would remain the same.” However, the MOU did not contain any language expressly stating that it incorporated the unmodified terms of the parties’ 2005 CBA.
In March 2013, the players unanimously accepted the proposed MOU pending the resolution of one outstanding issue: the players’ ability to play in Europe instead of playing in the NWSL. That issue was subsequently approved by a majority of union members and the general counsel notified the USSF that the players had voted to approve what the USSF described as a new four-year CBA, which would consist of the terms contained in the 2005 CBA/UPA as amended, modified and/or supplemented by the MOU.
Just prior to the execution of the MOU, the general counsel emailed the USSF and reiterated his understanding that items not specifically covered in the MOU would remain the same as under the prior CBA, but with appropriate increases, adjustments, and changes. After the MOU was executed, USSF continued to act as if it was governed by the terms of the 2005 CBA that were unmodified by the MOU.
Challenging the contract.
In 2014, the union appointed a new general counsel, who provided the USSF with notice that the union intended to terminate or modify the MOU and that it reserved its right to challenge USSF’s claim of the existence of a CBA between the parties. The USSF filed this suit, seeking damages for anticipatory breach of contract and a declaratory judgment establishing that the MOU includes the no-strike, no-lockout provision contained in the 2005 CBA. According to the USSF, the parties entered into a CBA consisting of the parties’ 2005 CBA, as modified by the MOU; they remain bound by that CBA; and the union engaged in an anticipatory breach of that CBA. However, the union countered there never was a CBA.
It was undisputed that during the drafting of the MOU, the parties’ negotiators agreed that the MOU, and thus the subsequently envisioned CBA, would encompass all terms of the 2005 CBA that were not modified or amended by the MOU. The court found that the terms of the MOU demonstrate that it is a partially integrated contract. Moreover, the text of the MOU evinced substantial gaps that demonstrated that it was intended to be supplemented by external documents. Accordingly, extrinsic evidence could be introduced to supplement its terms.
Consistent with the federal preference for recognizing CBAs, section 8(d) of the NLRA does not require CBAs to be in writing unless one or both parties request that they be. The union required a signed writing when a CBA is executed or modified, but nothing in the union’s constitution and bylaws supported the inference that the signed writing must be fully integrated and contain all of the terms of the parties’ agreement. Accordingly, there was no requirement that the agreement to adopt the unmodified terms of the 2005 CBA as part of the MOU take the form of a signed writing. Thus, the MOU incorporated the unmodified terms of the 2005 CBA.
Further, the court rejected the union’s contention that the previous general counsel did not have the authority to agree that the unmodified terms of the 2005 CBA would constitute part of the MOU agreement. The union’s constitution and bylaws expressly authorized the general counsel to negotiate CBAs with the USSF and sign on behalf of the union once the agreement has been approved. There was no evidence indicating that USSF knew, or had reason to know, that the players might not have been informed that the MOU incorporated all unmodified terms of the 2005 CBA. Accordingly, the previous general counsel had apparent authority to execute the MOU and to thereby bind the players association. Thus, the court granted the USSF’s declaratory judgment claim for the existence of a binding CBA.
However, the court denied the USSF’s motion for summary judgment on its claim against the union for anticipatory breach of contract. Anticipatory breach of contract occurs when a party manifests a clear, unequivocal intent not to perform under that contract when performance is due. Here, USSF’s anticipatory breach claim was premised on the union’s CBA termination notice. The union subsequently clarified that it was threatening to terminate the MOU “unless significant progress is made in these negotiations by or before March 1st” and that it was rejecting USSF’s assertion that the MOU contained a no-strike provision. The record did not establish beyond dispute that the union’s conditional threats to terminate the MOU manifested “clear, unequivocal intent not to perform.”