Whether an “evergreen clause” extending a collective bargaining agreement (CBA) for public employees beyond three years is enforceable.

A CBA in force from 2001 to 2004 required the Boston Housing Authority (BHA) to maintain a staff of 16 firemen, despite the fact that, by the year 2000, the BHA no longer maintained heating systems for which licensed firemen were required. The CBA contained an evergreen clause specifying that it would remain in force during any period of negotiations until a new agreement was signed. Negotiations continued, sporadically, from 2004 to 2006. When budget cuts in 2006 resulted in a 20% shortfall in the BHA’s overall budget, it terminated the employment of all 16 firemen.

An arbitrator held that the agreement was still in force under the evergreen clause, and that termination therefore violated the minimum staffing provision. A Superior Court judge upheld the decision.

1. Maximum length of CBAs under G.L. c. 150E, § 7(a): CBAs for public employees “shall not exceed a term of three years.” G.L. c. 150E, § 7(a). The judge found that this language did not bar evergreen clauses, which are widely used to prevent disruption in the period between agreements. The BHA argues that the statute’s plain language forbids enforcement of a minimum staffing term five years after the CBA was signed, and that public policy of “prevent[ing] governing bodies from tying the hands of their successors” supports such a limit.

2. Nondelegable managerial prerogatives: “Job security provisions in a municipal collective bargaining agreement are enforceable for periods not exceeding one fiscal year.” Billerica v. Int’l Assoc. of Firefighters, Local 1495, 415 Mass. 692, 694 (1993). The judge found that this public policy limitation applies only where the employee’s salaries are provided by a yearly line item appropriation, and therefore a function of the political process. The BHA argues that the line item distinction is irrelevant, and that the one-year limitation has applied even where an employer had the power to allocate its own budget. See Boston Teachers Union, Local 66 vs. Sch. Comm. of Boston, 386 Mass. 197, 212 (1982)

This case presents the odd situation where an employer sought to abolish an entire category of employee two years after expiration of a CBA and was unable to do so. If the BHA is correct that it had no avenue to simply end negotiation (and thus the evergreen clause) prior to termination, then public policy would seem to argue against the result reached below.

As the judge observed, however, evergreen clauses are widespread and serve a useful purpose. The Court may therefore read G.L. c. 150E, § 7(a) narrowly, to bar only contract terms that exceed three years. The Court could then moderate the contract at issue here through some narrower public policy limitation – whether that limitation relates to managerial prerogative, length of negotiation, or elimination of an entire class of employee.