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 labour rights, rights for ...

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 an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...

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 An appellate court, commonly called a court of appeal(s), appeal court, court of second instance or second instance court, is any court of law that is empowered to hear a case upon appeal from a trial court or other lower tribunal. Appellat ...

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 (process), conflict and Revenge, retribution. Committed group members attempt to resolve group conflicts by actively co ...

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

arbitration Arbitration is a formal method of dispute resolution involving a third party neutral who makes a binding decision. The third party neutral (the 'arbitrator', 'arbiter' or 'arbitral tribunal') renders the decision in the form of an 'arbitrati ...

) 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 spelled as labor laws), labour code 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 be ...

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 agencies of the United States government, independent agency of the federal government of the United States that enforces United States labor law, U.S. labor law in relation to collect ...

that revised federal labour policy in 2007. In

Australia Australia, officially the Commonwealth of Australia, is a country comprising mainland Australia, the mainland of the Australia (continent), Australian continent, the island of Tasmania and list of islands of Australia, numerous smaller isl ...

, 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#Fourth term: 2004–2007, Howard government in 2005, being amendments to the ''Workplace Relations Act 1996'' by the '' ...

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 Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...

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