A side letter, or side agreement, is a

collective bargaining Collective bargaining is a process of negotiation between employers and a group of employees aimed at agreements to regulate working salaries, working conditions, benefits, and other aspects of workers' compensation and rights for workers. The i ...

agreement that is not part of the underlying or primary

collective bargaining agreement A collective agreement, collective labour agreement (CLA) or collective bargaining agreement (CBA) is a written contract negotiated through collective bargaining for employees by one or more trade unions with the management of a company (or with an ...

(CBA) but is used by the parties to the

contract A contract is a legally enforceable agreement between two or more parties that creates, defines, and governs mutual rights and obligations between them. A contract typically involves the transfer of goods, services, money, or a promise to tran ...

to reach agreement on issues that the CBA does not cover, to clarify issues in the CBA or to modify the CBA (permanently or temporarily). One may distinguish side letters from "side settlements", or "settlement agreements", which settle a dispute arising from the underlying CBA.''United Steelworkers of America v. Cooper Tire & Rubber Company''
474 F.3d 271 (6th Cir. 2007). In rare cases, bargaining parties may use a side letter to adjust the focus of the contract if the parties are not yet ready or willing to adapt the contract formally. Under the law of contracts, a side letter has the same force as the underlying contract. However, the courts may invalidate side letters in conflict with the main collective bargaining agreement. The terms of the CBA govern interpretation of side letters. In the United States, several

appellate courts A court of appeals, also called a court of appeal, appellate court, appeal court, court of second instance or second instance court, is any court of law that is empowered to hear an appeal of a trial court or other lower tribunal. In much of t ...

have held that in disputes on which side letters do not contain

conflict resolution Conflict resolution is conceptualized as the methods and processes involved in facilitating the peaceful ending of conflict and retribution. Committed group members attempt to resolve group conflicts by actively communicating information abou ...

procedures, the parties must use the underlying collective bargaining agreement's dispute resolution mechanism (in these cases,

arbitration Arbitration is a form of alternative dispute resolution (ADR) that resolves disputes outside the judiciary courts. The dispute will be decided by one or more persons (the 'arbitrators', 'arbiters' or 'arbitral tribunal'), which renders the ' ...

) to resolve the dispute.Dube, Lawrence E. "Court Orders Arbitration on Neutrality Pact, But Says NLRB May Have to Decide Legality". ''Daily Labor Report.'' September 10, 2007. The range of issues side letters covers is wide. In some cases, side letters have driven national

labour law Labour laws (also known as labor laws or employment laws) are those that mediate the relationship between workers, employing entities, trade unions, and the government. Collective labour law relates to the tripartite relationship between employee, ...

policy. For example, in the United States, a side letter guaranteeing employer neutrality during union elections in newly-acquired plants, subsidiaries, or divisions led to a federal lawsuit over the legality of the agreement in 2002 and to a major decision by the

National Labor Relations Board The National Labor Relations Board (NLRB) is an independent agency of the federal government of the United States with responsibilities for enforcing U.S. labor law in relation to collective bargaining and unfair labor practices. Under the Natio ...

that revised federal labour policy in 2007. In

Australia Australia, officially the Commonwealth of Australia, is a Sovereign state, sovereign country comprising the mainland of the Australia (continent), Australian continent, the island of Tasmania, and numerous List of islands of Australia, sma ...

, side letters are becoming increasingly common due to the changes in federal labour law that the

WorkChoices WorkChoices was the name given to changes made to the federal industrial relations laws in Australia by the Howard Government in 2005, being amendments to the ''Workplace Relations Act 1996'' by the ''Workplace Relations Amendment (Work Choices ...

Act created. It limits the collective bargaining agreements that parties can register for eligibility for workplace tribunals enforcement and also requires CBAs to be strictly limited to work-related issues. The inclusion of even minor non-workplace-related clauses (such as dues check-off) can render a CBA unenforceable. In response, many unions and employers use side letters to reach agreement on non-workplace-related matters and do not register the side letters with the federal government but rely on

common law In law, common law (also known as judicial precedent, judge-made law, or case law) is the body of law created by judges and similar quasi-judicial tribunals by virtue of being stated in written opinions."The common law is not a brooding omnipresen ...

to enforce the side letters.Stewart, Andrew and Riley, Joellen. "Working Around WorkChoices: Collective Bargaining and the Common Law". ''Melbourne University Law Review.'' 2007.

References

External links

Coalition of University Employees (CUE) and the Lawrence Berkeley National Laboratory (LBNL). "Appendix E: LBNL Wages Side Letter Compensation Agreement." 2001.
*[https://web.archive.org/web/20090107061140/http://www.utaaup.com/disab.htm University of Toledo Chapter of the American Association of University Professors (UT-AAUP) and the University of Toledo. "Memorandum of Agreement." Collective Bargaining Agreement. July 14, 1993.]
Office of the Comptroller. State of Connecticut. "Memorandum No. 96-13a: Correction to Memorandum 96-13, for the payment of Vehicle Usage Fees, Equipment and Clothing, and to correct the language for Recruitment and Retention Stipends, for the P-4 bargaining unit." April 26, 1996.
{{Use British English Oxford spelling, date=September 2018 Collective rights Labor relations