Litton Financial Printing Division Division of Litton Business Systems Inc. v. National Labor Relations Board/Opinion of the Court

by Anthony Kennedy

This case requires us to determine whether a dispute over layoffs which occurred well after expiration of a collective-bargaining agreement must be said to arise under the agreement despite its expiration. The question arises in the context of charges brought by the National Labor Relations Board (Board) alleging an unfair labor practice in violation of §§ 8(a)(1) and (5) of the National Labor Relations Act (NLRA), 49 Stat. 449, as amended, 29 U.S.C. §§ 158(a)(1) and (5). We interpret our earlier decision in Nolde Bros., Inc. v. Bakery Workers. 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977).

* Petitioner Litton operated a check printing plant in Santa Clara, California. The plant utilized both cold-type and hot-type printing processes. Printing Specialties & Paper Products Union No. 777, Affiliated With District Council No. 1 (Union), represented the production employees at the plant. The Union and Litton entered into a collective-bargaining agreement which, with extensions, remained in effect until October 3, 1979. Section 19 of the Agreement is a broad arbitration provision: "Differences that may arise between the parties hereto regarding this Agreement and any alleged violations of the Agreement, the construction to be placed on any clause or clauses of the Agreement shall be determined by arbitration in the manner hereinafter set forth." App. 34.

Section 21 of the Agreement sets forth a two-step grievance procedure, at the conclusion of which, if a grievance cannot be resolved, the matter may be submitted for binding arbitration. Id., at 35.

Soon before the Agreement was to expire, an employee sought decertification of the Union. The Board conducted an election on August 17, 1979, in which the Union prevailed by a vote of 28 to 27. On July 2, 1980, after much postelection legal maneuvering, the Board issued a decision to certify the Union. No contract negotiations occurred during this period of uncertainty over the Union's status.

Litton decided to test the Board's certification decision by refusing to bargain with the Union. The Board rejected Litton's position and found its refusal to bargain an unfair labor practice. Litton Financial Printing Division, 256 N.L.R.B. 516 (1981). Meanwhile, Litton had decided to eliminate its cold-type operation at the plant, and in late August and early September of 1980, laid off 10 of the 42 persons working in the plant at that time. The laid off employees worked either primarily or exclusively with the cold-type operation, and included six of the eleven most senior employees in the plant. The layoffs occurred without any notice to the Union.

The Union filed identical grievances on behalf of each laid off employee, claiming a violation of the Agreement, which had provided that "in case of layoffs, lengths of continuous service will be the determining factor if other things such as aptitude and ability are equal." App. 30. Litton refused to submit to the grievance and arbitration procedure or to negotiate over the decision to lay off the employees, and took a position later interpreted by the Board as a refusal to arbitrate under any and all circumstances. It offered instead to negotiate concerning the effects of the layoffs.

On November 24, 1980, the General Counsel for the Board issued a complaint alleging that Litton's refusal to process the grievances amounted to an unfair labor practice within the meaning of §§ 8(a)(1) and (5) of the NLRA, 29 U.S.C. §§ 158(a)(1) and (5). App. 15. On September 4, 1981, an Administrative Law Judge found that Litton had violated the NLRA by failing to process the grievances. App. 114-115. Relying upon the Board's decision in American Sink Top & Cabinet Co., 242 N.L.R.B. 408 (1979), the Administrative Law Judge went on to state that if the grievances remained unresolved at the conclusion of the grievance process, Litton could not refuse to submit them to arbitration. App. 115-118. The Administrative Law Judge held also that Litton violated §§ 8(a)(1) and (5) when it bypassed the Union and paid severance wages directly to the 10 laid off employees, and Litton did not contest that determination in further proceedings.

Over six years later, the Board affirmed in part and reversed in part the decision of the Administrative Law Judge. 286 N.L.R.B. 817 (1987). The Board found that Litton had a duty to bargain over the layoffs, and violated § 8(a) by failure to do so. Based upon well-recognized Board precedent that the unilateral abandonment of a contractual grievance procedure upon expiration of the contract violates §§ 8(a)(1) and (5), the Board held that Litton had improperly refused to process the layoff grievances. See Bethlehem Steel Co., 136 N.L.R.B. 1500, 1503 (1962), enforced in pertinent part, 320 F.2d 615 (CA3 1963). The Board proceeded to apply its recent decision in Indiana & Michigan Electric Co., 284 N.L.R.B. 53 (1987), which contains the Board's current understanding of the principles of postexpiration arbitrability and of our opinion in Nolde Bros., Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977). The Board held that Litton's "wholesale repudiation" of its obligation to arbitrate any contractual grievance after the expiration of the Agreement also violated §§ 8(a)(1) and (5), as the Agreement's broad arbitration clause lacked

"language sufficient to overcome the presumption that the obligation to arbitrate imposed by the contract extended to disputes arising under the contract and occurring after the contract had expired. Thus, [Litton] remained 'subject to a potentially viable contractual commitment to arbitrate even after the [Agreement] expired.' " 286 N.L.R.B., at 818 (citation omitted).

Litton did not seek review of, and we do not address here, the Board's determination that Litton committed an unfair labor practice by its unilateral abandonment of the grievance process and wholesale repudiation of any postexpiration obligation to arbitrate disputes.

In fashioning a remedy, the Board went on to consider the arbitrability of these particular layoff grievances. Following Indiana & Michigan, the Board declared its determination to order arbitration "only when the grievances at issue 'arise under' the expired contract." 286 N.L.R.B., at 821 (citing Nolde Bros., supra ). In finding that the dispute about layoffs was outside this category, the Board reasoned as follows:

"The conduct that triggered the grievances . . . occurred after the contract had expired. The right to layoff by seniority if other factors such as ability and experience are equal is not 'a right worked for or accumulated over time.' Indiana & Michigan, supra at 61. And, as in Indiana & Michigan Electric, there is no indication here that 'the parties contemplated that such rights could ripen or remain enforceable even after the contract expired.' Id. (citation omitted). Therefore, [Litton] had no contractual obligation to arbitrate the grievances." 286 N.L.R.B., at 821-822.

Although the Board refused to order arbitration, it did order Litton to process the grievances through the two-step grievance procedure, to bargain with the Union over the layoffs, and to provide a limited backpay remedy.

The Board sought enforcement of its order, and both the Union and Litton petitioned for review. The Court of Appeals enforced the Board's order, with the exception of that portion holding the layoff grievances not arbitrable. 893 F.2d 1128 (CA9 1990). On that question, the Court of Appeals was willing to "assume without deciding that the Board's Indiana & Michigan decision is a reasonably defensible construction of the section 8(a)(5) duty to bargain." Id., at 1137. The court decided, nevertheless, that the Board had erred, because the right in question, the right to layoff in order of seniority if other things such as aptitude and ability are equal, did arise under the Agreement. The Court of Appeals thought the Board's contrary conclusion was in conflict with two later Board decisions, where the Board had recognized that seniority rights may arise under an expired contract, United Chrome Products, Inc., 288 N.L.R.B. 1176 (1988), and Uppco, Inc., 288 N.L.R.B. 937 (1988).

The court cited a second conflict, one between Indiana & Michigan and the court's own interpretation of Nolde Bros. in Local Joint Executive Bd. of Las Vegas Culinary Workers Union, Local 226 v. Royal Center, Inc., 796 F.2d 1159 (CA9 1986). In Royal Center, the Court of Appeals had rejected the argument that only rights accruing or vesting under a contract prior to termination are covered by the posttermination duty to arbitrate. Id., at 1163.

Litton petitioned for a writ of certiorari. Because of substantial disagreement as to the proper application of our decision in Nolde Bros., ^[1] we granted review limited to the question of arbitrability of the layoff grievances. --- U.S. ----, 111 S.Ct. 426, 112 L.Ed.2d 410.

Sections 8(a)(5) and 8(d) of the NLRA, 29 U.S.C. §§ 158(a)(5) and (d), require an employer to bargain "in good faith with respect to wages, hours, and other terms and conditions of employment." The Board has taken the position that it is difficult to bargain if, during negotiations, an employer is free to alter the very terms and conditions that are the subject of those negotiations. The Board has determined, with our acceptance, that an employer commits an unfair labor practice if, without bargaining to impasse, it effects a unilateral change of an existing term or condition of employment. See NLRB v. Katz, 369 U.S. 736, 82 S.Ct. 1107, 8 L.Ed.2d 230 (1962). In Katz the union was newly certified and the parties had yet to reach an initial agreement. The Katz doctrine has been extended as well to cases where, as here, an existing agreement has expired and negotiations on a new one have yet to be completed. See, e.g., Laborers Health and Welfare Trust Fund v. Advanced Lightweight Concrete Co., 484 U.S. 539, 544, n. 6, 108 S.Ct. 830, 833, n. 6, 98 L.Ed.2d 936 (1988).

Numerous terms and conditions of employment have been held to be the subject of mandatory bargaining under the NLRA. See generally 1 C. Morris, The Developing Labor Law 772-844 (2d ed. 1983). Litton does not question that arrangements for arbitration of disputes are a term or condition of employment and a mandatory subject of bargaining. See id., at 813 (citing cases); United States Gypsum Co., 94 N.L.R.B. 112, 131 (1951).

The Board has ruled that most mandatory subjects of bargaining are within the Katz prohibition on unilateral changes. The Board has identified some terms and conditions of employment, however, which do not survive expiration of an agreement for purposes of this statutory policy. For instance, it is the Board's view that union security and dues check-off provisions are excluded from the unilateral change doctrine because of statutory provisions which permit these obligations only when specified by the express terms of a collective-bargaining agreement. See 29 U.S.C. § 158(a)(3) (union security conditioned upon agreement of the parties); 29 U.S.C. § 186(c)(4) (dues check-off valid only until termination date of agreement); Indiana & Michigan, 284 N.L.R.B., at 55 (quoting Bethlehem Steel, 136 N.L.R.B., at 1502). Also, in recognition of the statutory right to strike, no-strike clauses are excluded from the unilateral change doctrine, except to the extent other dispute resolution methods survive expiration of the agreement. See 29 U.S.C. §§ 158(d)(4), 163 (union's statutory right to strike); Southwestern Steel & Supply, Inc. v. NLRB, 257 U.S.App.D.C. 19, 23, 806 F.2d 1111, 1114 (1986).

In Hilton-Davis Chemical Co., 185 N.L.R.B. 241 (1970), the Board determined that arbitration clauses are excluded from the prohibition on unilateral changes, reasoning that the commitment to arbitrate is a "voluntary surrender of the right of final decision which Congress . . . reserved to [the] parties. . . . [A]rbitration is, at bottom, a consensual surrender of the economic power which the parties are otherwise free to utilize." Id., at 242. The Board further relied upon our statements acknowledging the basic federal labor policy that "arbitration is a matter of contract and a party cannot be required to submit to arbitration any dispute which he has not agreed so to submit." United Steelworkers of America v. Warrior & Gulf Navigation Co., 363 U.S. 574, 582, 80 S.Ct. 1347, 1353, 4 L.Ed.2d 1409 (1960). See also 29 U.S.C. § 173(d) (phrased in terms of parties' agreed upon method of dispute resolution under an existing bargaining agreement). Since Hilton-Davis the Board has adhered to the view that an arbitration clause does not, by operation of the NLRA as interpreted in Katz, continue in effect after expiration of a collective-bargaining agreement.

The Union argues that we should reject the Board's decision in Hilton-Davis Chemical Co., and instead hold that arbitration provisions are within Katz' prohibition on unilateral changes. The unilateral change doctrine, and the exclusion of arbitration from the scope of that doctrine, represent the Board's interpretation of the NLRA requirement that parties bargain in good faith. And "[i]f the Board adopts a rule that is rational and consistent with the Act . . . then the rule is entitled to deference from the courts." Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 42, 107 S.Ct. 2225, 2235, 96 L.Ed.2d 22 (1987); see, e.g., NLRB v. Curtin Matheson Scientific, Inc., 494 U.S. ----, ----, 110 S.Ct. 1542, ----, 108 L.Ed.2d 801 (1990).

We think the Board's decision in Hilton-Davis Chemical Co. is both rational and consistent with the Act. The rule is grounded in the strong statutory principle, found in both the language of the NLRA and its drafting history, of consensual rather than compulsory arbitration. See Indiana & Michigan, supra, at 57-58; Hilton-Davis Chemical Co., supra. The rule conforms with our statement that "[n]o obligation to arbitrate a labor dispute arises solely by operation of law. The law compels a party to submit his grievance to arbitration only if he has contracted to do so." Gateway Coal Co. v. Mine Workers, 414 U.S. 368, 374, 94 S.Ct. 629, 635, 38 L.Ed.2d 583 (1974). We reaffirm today 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.

In the absence of a binding method for resolution of postexpiration disputes, a party may be relegated to filing unfair labor practice charges with the Board if it believes that its counterpart has implemented a unilateral change in violation of the NLRA. If, as the Union urges, parties who favor labor arbitration during the term of a contract also desire it to resolve postexpiration disputes, the parties can consent to that arrangement by explicit agreement. Further, a collective-bargaining agreement might be drafted so as to eliminate any hiatus between expiration of the old and execution of the new agreement, or to remain in effect until the parties bargain to impasse. ^[2] Unlike the Union's suggestion that we impose arbitration of postexpiration disputes upon parties once they agree to arbitrate disputes arising under a contract, these alternatives would reinforce the statutory policy that arbitration is not compulsory.

The Board argues that it is entitled to substantial deference here because it has determined the remedy for an unfair labor practice. As noted above, we will uphold the Board's interpretation of the NLRA so long as it is "rational and consistent with the Act." Fall River Dyeing & Finishing Corp. v. NLRB, supra, 482 U.S., at 42, 107 S.Ct., at 2235. And we give the greatest latitude to the Board when its decision reflects its " 'difficult and delicate responsibility' of reconciling conflicting interests of labor and management," NLRB v. J. Weingarten, Inc., 420 U.S. 251, 267, 95 S.Ct. 959, 968, 43 L.Ed.2d 171 (1975). We have accorded the Board considerable authority to structure its remedial orders to effect the purposes of the NLRA and to order the relief it deems appropriate. See Shepard v. NLRB, 459 U.S. 344, 352, 103 S.Ct. 665, 670-71, 74 L.Ed.2d 523 (1983); Virginia Elec. & Power Co. v. NLRB, 319 U.S. 533, 540, 63 S.Ct. 1214, 1218-19, 87 L.Ed. 1568 (1943).

The portion of the Board's decision which we review today does discuss the appropriate remedy for a violation of the NLRA. But it does not follow that we must accord the same deference we recognized in Virginia Elec. & Power Co. and Shepard. Here, the Board's remedial discussion is not grounded in terms of any need to arbitrate these grievances in order "to effectuate the policies of the Act." Virginia Elec. & Power Co., supra, at 540, 63 S.Ct., at 1218. Rather, the Board's decision not to order arbitration of the layoff grievances rests upon its interpretation of the Agreement, applying our decision in Nolde Bros. and the federal common law of collective-bargaining agreements. The Board now defends its decision on the ground that it need not "reflexively order that which a complaining party may regard as 'complete relief' for every unfair labor practice," Shepard v. NLRB, supra, 459 U.S., at 352, 103 S.Ct., at 670-71; but its decision did not purport to rest upon such grounds.

Although the Board has occasion to interpret collective-bargaining agreements in the context of unfair labor practice adjudication, see NLRB v. C & C Plywood Corp., 385 U.S. 421, 87 S.Ct. 559, 17 L.Ed.2d 486 (1967), the Board is neither the sole nor the primary source of authority in such matters. "Arbitrators and courts are still the principal sources of contract interpretation." NLRB v. Strong, 393 U.S. 357, 360-361, 89 S.Ct. 541, 544, 21 L.Ed.2d 546 (1969). Section 301 of the Labor Management Relations Act (LMRA), 29 U.S.C. § 185, "authorizes federal courts to fashion a body of federal law for the enforcement of . . . collective bargaining agreements." Textile Workers v. Lincoln Mills of Alabama, 353 U.S. 448, 451, 77 S.Ct. 912, 915, 1 L.Ed.2d 972 (1957) (emphasis added). We would risk the development of conflicting principles were we to defer to the Board in its interpretation of the contract, as distinct from its devising a remedy for the unfair labor practice that follows from a breach of contract. We cannot accord deference in contract interpretation here only to revert to our independent interpretation of collective-bargaining agreements in a case arising under § 301. See Local Union 1395, Int'l Brotherhood of Electrical Workers v. NLRB, 254 U.S.App.D.C. 360, 363-364, 797 F.2d 1027, 1030-1031 (1986).

The duty not to effect unilateral changes in most terms and conditions of employment, derived from the statutory command to bargain in good faith, is not the sole source of possible constraints upon the employer after the expiration date of a collective-bargaining agreement. A similar duty may arise as well from the express or implied terms of the expired agreement itself. This, not the provisions of the NLRA, was the source of the obligation which controlled our decision in Nolde Bros., Inc. v. Bakery Workers, 430 U.S. 243, 97 S.Ct. 1067, 51 L.Ed.2d 300 (1977). We now discuss that precedent in the context of the case before us.

In Nolde Bros., a union brought suit under § 301 of the Labor Management Relations Act, 29 U.S.C. § 185, to compel arbitration. Four days after termination of a collective-bargaining agreement, the employer decided to cease operations. The employer settled employee wage claims, but refused to pay severance wages called for in the agreement, and declined to arbitrate the resulting dispute. The union argued that these wages

"were in the nature of 'accrued' or 'vested' rights, earned by employees during the term of the contract on essentially the same basis as vacation pay, but payable only upon termination of employment." Nolde Bros., 430 U.S., at 248, 97 S.Ct. at 1070.

"whatever the outcome, the resolution of that claim hinges on the interpretation ultimately given the contract clause providing for severance pay. The dispute therefore, although arising after the expiration of the collective-bargaining contract, clearly arises under that contract." Id., at 249, 97 S.Ct., at 1071 (emphasis in original).

We acknowledged that "the arbitration duty is a creature of the collective-bargaining agreement" and that the matter of arbitrability must be determined by reference to the agreement, rather than by compulsion of law. Id., at 250-251, 97 S.Ct., at 1071-1072. With this understanding, we held that the extensive obligation to arbitrate under the contract in question was not consistent with an interpretation that would eliminate all duty to arbitrate as of the date of expiration. That argument, we noted,

"would preclude the entry of a post-contract arbitration order even when the dispute arose during the life of the contract but arbitration proceedings had not begun before termination. The same would be true if arbitration processes began but were not completed, during the contract's term." Id., at 251, 97 S.Ct., at 1072.

We found "strong reasons to conclude that the parties did not intend their arbitration duties to terminate automatically with the contract," id., at 253, 97 S.Ct., at 1073, and noted that "the parties' failure to exclude from arbitrability contract disputes arising after termination . . . affords a basis for concluding that they intended to arbitrate all grievances arising out of the contractual relationship," id., at 255, 97 S.Ct., at 1074. We found a presumption in favor of postexpiration arbitration of matters unless "negated expressly or by clear implication," ibid., but that conclusion was limited by the vital qualification that arbitration was of matters and disputes arising out of the relation governed by contract.

* Litton argues that provisions contained in the Agreement rebut the Nolde Bros. presumption that the duty to arbitrate disputes arising under an agreement outlasts the date of expiration. The Agreement provides that its stipulations "shall be in effect for the time hereinafter specified," App. 22, in other words, until the date of expiration and no longer. The Agreement's no-strike clause, which Litton characterizes as a quid pro quo for arbitration, applies only "during the term of this [a]greement," id., at 34. Finally, the Agreement provides for "interest arbitration" in case the parties are unable to conclude a successor agreement, id., at 53-55, proving that where the parties wished for arbitration other than to resolve disputes as to contract interpretation, they knew how to draft such a clause. These arguments cannot prevail. The Agreement's unlimited arbitration clause, by which the parties agreed to arbitrate all "[d]ifferences that may arise between the parties" regarding the Agreement, violations thereof, or "the construction to be placed on any clause or clauses of the Agreement," id., at 34, places it within the precise rationale of Nolde Bros. It follows that if a dispute arises under the contract here in question, it is subject to arbitration even in the postcontract period.

With these matters resolved, we come to the crux of our inquiry. We agree with the approach of the Board and those courts which have interpreted Nolde Bros. to apply only where a dispute has its real source in the contract. The object of an arbitration clause is to implement a contract, not to transcend it. Nolde Bros. does not announce a rule that postexpiration grievances concerning terms and conditions of employment remain arbitrable. A rule of that sweep in fact would contradict the rationale of Nolde Bros. The Nolde Bros. presumption is limited to disputes arising under the contract. A postexpiration grievance can be said to arise under the contract only where it involves facts and occurrences that arose before expiration, where an action taken after expiration infringes a right that accrued or vested under the agreement, or where, under normal principles of contract interpretation, the disputed contractual right survives expiration of the remainder of the agreement.

Any other reading of Nolde Bros. seems to assume that postexpiration terms and conditions of employment which coincide with the contractual terms can be said to arise under an expired contract, merely because the contract would have applied to those matters had it not expired. But that interpretation fails to recognize that an expired contract has by its own terms released all its parties from their respective contractual obligations, except obligations already fixed under the contract but as yet unsatisfied. Although after expiration most terms and conditions of employment are not subject to unilateral change, in order to protect the statutory right to bargain, those terms and conditions no longer have force by virtue of the contract. See Office and Professional Employees Ins. Trust Fund v. Laborers Funds Administrative Office of Northern California, Inc. 783 F.2d 919, 922 (CA9 1986) ("An expired [collective bargaining agreement] . . . is no longer a 'legally enforceable document.' " (citation omitted)); cf. Derrico v. Sheehan Emergency Hosp., 844 F.2d 22, 25-27 (CA2 1988) (Section 301 of the LMRA, 29 U.S.C. § 185, does not provide a federal court jurisdiction where a bargaining agreement has expired, although rights and duties under the expired agreement "retain legal significance because they define the status quo" for purposes of the prohibition on unilateral changes).

The difference is as elemental as that between Nolde Bros. and Katz. Under Katz, terms and conditions continue in effect by operation of the NLRA. They are no longer agreed-upon terms; they are terms imposed by law, at least so far as there is no unilateral right to change them. As the Union acknowledges, the obligation not to make unilateral changes is "rooted not in the contract but in preservation of existing terms and conditions of employment and applies before any contract has been negotiated." Brief for Respondents 34, n. 21. Katz illustrates this point with utter clarity, for in Katz the employer was barred from imposing unilateral changes even though the parties had yet to execute their first collective-bargaining agreement.

Our decision in Laborers Health and Welfare Trust Fund v. Advanced Lightweight Concrete Co., Inc., 484 U.S. 539, 108 S.Ct. 830, 98 L.Ed.2d 936 (1988), further demonstrates the distinction between contractual obligations and postexpiration terms imposed by the NLRA. There, a bargaining agreement required employer contributions to a pension fund. We assumed that under Katz the employer's failure to continue contributions after expiration of the agreement could constitute an unfair labor practice, and if so the Board could enforce the obligation. We rejected, however, the contention that such a failure amounted to a violation of the ERISA obligation to make contributions "under the terms of a collectively bargained agreement . . . in accordance with the terms and conditions of . . . such agreement." 29 U.S.C. § 1145. Any postexpiration obligation to contribute was imposed by the NLRA, not by the bargaining agreement, and so the district court lacked jurisdiction under § 502(g)(2) of ERISA, 29 U.S.C. § 1132(g)(2), to enforce the obligation.

As with the obligation to make pension contributions in Advanced Lightweight Concrete Co., other contractual obligations will cease, in the ordinary course, upon termination of the bargaining agreement. Exceptions are determined by contract interpretation. Rights which accrued or vested under the agreement will, as a general rule, survive termination of the agreement. And of course, if a collective-bargaining agreement provides in explicit terms that certain benefits continue after the agreement's expiration, disputes as to such continuing benefits may be found to arise under the agreement, and so become subject to the contract's arbitration provisions. See United Steelworkers of America v. Fort Pitt Steel Casting, Division of Conval-Penn, Inc., 598 F.2d 1273 (CA3 1979) (agreement provided for continuing medical benefits in the event of postexpiration labor dispute).

Finally, as we found in Nolde Bros., structural provisions relating to remedies and dispute resolution-for example, an arbitration provision-may in some cases survive in order to enforce duties arising under the contract. Nolde Bros.' statement to that effect under § 301 of the LMRA is similar to the rule of contract interpretation which might apply to arbitration provisions of other commercial contracts. ^[3] We presume as a matter of contract interpretation that the parties did not intend a pivotal dispute resolution provision to terminate for all purposes upon the expiration of the agreement.

The Union, and Justice STEVENS' dissent, argue that we err in reaching the merits of the issue whether the post-termination grievances arise under the expired agreement because, it is said, that is an issue of contract interpretation to be submitted to an arbitrator in the first instance. Whether or not a company is bound to arbitrate, as well as what issues it must arbitrate, is a matter to be determined by the court, and a party cannot be forced to "arbitrate the arbitrability issue." AT & T Technologies, Inc. v. Communication Workers of America, 475 U.S. 643, 651, 106 S.Ct. 1415, 1419-20, 89 L.Ed.2d 648. We acknowledge that where an effective bargaining agreement exists between the parties, and the agreement contains a broad arbitration clause, "there is a presumption of arbitrability in the sense that '[a]n order to arbitrate the particular grievance should not be denied unless it may be said with positive assurance that the arbitration clause is not susceptible of an interpretation that covers the asserted dispute.' " Id., at 650, 106 S.Ct., at 1419 (quoting Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 564, 582-583, 80 S.Ct. 1343, 1352-1353, 4 L.Ed.2d 1403 (1960)). But we refuse to apply that presumption wholesale in the context of an expired bargaining agreement, for to do so would make limitless the contractual obligation to arbitrate. Although "[d]oubts should be resolved in favor of coverage," AT & T Technologies, supra, 475 U.S., at 650, 106 S.Ct., at 1419, we must determine whether the parties agreed to arbitrate this dispute, and we cannot avoid that duty because it requires us to interpret a provision of a bargaining agreement.

We apply these principles to the layoff grievances in the present case. The layoffs took place almost one year after the Agreement had expired. It follows that the grievances are arbitrable only if they involve rights which accrued or vested under the Agreement, or rights which carried over after expiration of the Agreement, not as legally imposed terms and conditions of employment but as continuing obligations under the contract.

The contractual right at issue, that "in case of layoffs, lengths of continuous service will be the determining factor if other things such as aptitude and ability are equal," App. 30, involves a residual element of seniority. Seniority provisions, the Union argues, "create a form of earned advantage, accumulated over time, that can be understood as a special form of deferred compensation for time already worked." Brief for Respondents 23-25, n. 14. Leaving aside the question whether a provision requiring all layoffs to proceed in inverse order of seniority would support an analogy to the severance pay at issue in Nolde Bros., which was viewed as a form of deferred compensation, the layoff provision here cannot be so construed, and cannot be said to create a right that vested or accrued during the term of the Agreement, or a contractual obligation that carries over after expiration.

The order of layoffs under the Agreement was to be determined primarily with reference to "other factors such as aptitude and ability." Only where all such factors were equal was the employer required to look to seniority. Here, any arbitration proceeding would of necessity focus upon whether aptitude and ability-and any unenumerated "other factors"-were equal long after the Agreement had expired, as of the date of the decision to lay employees off and in light of Litton's decision to close down its cold-type printing operation.

The important point is that factors such as aptitude and ability do not remain constant, but change over time. They cannot be said to vest or accrue or be understood as a form of deferred compensation. Specific aptitudes and abilities can either improve or atrophy. And the importance of any particular skill in this equation varies with the requirements of the employer's business at any given time. Aptitude and ability cannot be measured on some universal scale, but only by matching an employee to the requirements of an employer's business at that time. We cannot infer an intent on the part of the contracting parties to freeze any particular order of layoff or vest any contractual right as of the Agreement's expiration. ^[4]

For the reasons stated, we reverse the judgment of the Court of Appeals to the extent that the Court of Appeals refused to enforce the Board's order in its entirety and remanded the cause for further proceedings.

It is so ordered.

Justice MARSHALL, with whom Justice BLACKMUN and Justice SCALIA join, dissenting.

Notes

1. The conflict between the Ninth Circuit's reasoning in Local Joint Executive Bd. of Las Vegas Culinary Workers Union, Local 226 v. Royal Center, Inc., 796 F.2d 1159 (1986), and the Board's approach in Indiana & Michigan Electric Co., 284 N.L.R.B. 53 (1987), reflects a wider split of authority. The Third and Fifth Circuits follow an approach similar to that of the Ninth Circuit. See Federated Metals Corp. v. United Steelworkers of America, 648 F.2d 856, 861 (CA3), cert. denied, 454 U.S. 1031, 102 S.Ct. 567, 70 L.Ed.2d 474 (1981); Seafarers Int'l Union of North America v. National Marine Servs., Inc., 820 F.2d 148, 152-154 (CA5), cert. denied, 484 U.S. 953, 108 S.Ct. 346, 98 L.Ed.2d 372 (1987). The Eighth Circuit, Tenth Circuit, and the Michigan Supreme Court follow the Board's approach and limit the presumption of post-expiration arbitrability to rights that accrued or vested under the agreement, or events that took place prior to expiration of the agreement. See Chauffeurs, Teamsters and Helpers, Local Union 238 v. C.R.S.T. Inc., 795 F.2d 1400, 1404 (CA8 1986) (en banc); United Food & Commercial Workers Int'l Union, AFL-CIO, Local 7 v. Gold Star Sausage Co., 897 F.2d 1022, 1025-1026 (CA10 1990); County of Ottawa v. Jaklinski, 423 Mich. 1, 377 N.W.2d 668 (1985) (discussing Nolde in context of Michigan law applicable to public employers). The Seventh Circuit, finally, restricts application of Nolde Bros. to a limited period following expiration of a bargaining agreement. See Local 703, Int'l Brotherhood of Teamsters v. Kennicott Bros. Co., 771 F.2d 300 (1985).
2. See, e.g., NLRB v. New England Newspapers, Inc., 856 F.2d 409, 410 (CA1 1988) (agreement would continue in effect until a new agreement was reached); Montgomery Mailers' Union No. 127 v. The Advertiser Co., 827 F.2d 709, 712, n. 5 (CA11 1987) (agreement to continue in effect "for a reasonable time for negotiation of a new agreement"); Teamsters Local Union 688 v. John J. Meier Co., 718 F.2d 286, 287 (CA8 1983) ("all terms and provisions of the expired agreement shall continue in effect until a new agreement is adopted or negotiations are terminated").
3. See, e.g., West Virginia ex rel. Ranger Fuel Corp. v. Lilly, 165 W.Va. 98, 100-101, 267 S.E.2d 435, 437-438 (1980) (duty to arbitrate survives termination of lease); Warren Brothers Co. v. Cardi Corp., 471 F.2d 1304 (CA1 1973) (arbitration clause survives completion of work under construction contract); Mendez v. Trustees of Boston University, 362 Mass. 353, 356, 285 N.E.2d 446, 448 (1972) (termination of employment contract "does not necessarily terminate a provision for arbitration or other agreed procedure for the resolution of disputes"); The Batter Building Materials Co. v. Kirschner, 142 Conn. 1, 10-11, 110 A.2d 464, 469-470 (1954) (arbitration clause in building contract not affected by a party's repudiation or total breach of contract).
4. Although our decision that the dispute does not arise under the Agreement does, of necessity, determine that as of August 1980 the employees lacked any vested contractual right to a particular order of layoff, the Union would remain able to argue that the failure to lay off in inverse order of seniority if "other things such as aptitude and ability" were equal amounted to an unfair labor practice, as a unilateral change of a term or condition of employment. We do not decide whether, in fact, the layoffs were out of order.