Labor & Employment Law Daily Wrap Up, LABOR—3d Cir.: HVAC company’s attempted repudiation of ‘evergreen’ labor contract was ineffective, (Aug 4, 2025)

By Jason Albright, J.D.

The contract, with a Sheet Metal Workers local, provided for automatic renewal from year to year after its initial expiration date unless written notice of reopening is given at least 90 days before expiration.

HVAC company Brian Trematore Plumbing & Heating, Inc. failed to repudiate its labor contract—which contained an “evergreen” provision—with Sheet Metal Workers Local 25, even though the employer stopped employing the local’s workers, and despite the company’s contention that the one-employee unit rule applies to contracts formed under Section 9(a) of the NLRA, the Third Circuit found. Because the labor contract ‘s non-repudiation and binding interest arbitration clauses “represent the parties’ agreement to negotiate a renewal agreement, and, if no agreement is forthcoming, to submit their dispute to the [National Joint Adjustment Board] for interest arbitration,” the appeals court found that it need not pass on the novel Section 9(a) issue. And as the district court concluded, Trematore was bound by the contract through its evergreen provision. Judge Fisher dissented in part (Brian Trematore Plumbing & Heating, Inc. v. Sheet Metal Workers Local 25, No. 24-1298 (3d Cir. Aug. 1, 2025)).

HVAC company and Section 8(f) agreement. The company does plumbing work and heat, ventilation, and air conditioning (HVAC) construction. In 2017, it was awarded a contract for plumbing and HVAC construction at High-Tech High School in Secaucus, New Jersey, and before starting the project, it was required to execute a project labor agreement recognizing Sheet Metal Workers Local 25 “as the sole and exclusive bargaining representative[] of all craft employees who” performed on-site sheet metal work.

This pre-hire agreement—formed under Section 8(f) of the NLRA—required all construction to be performed by unionized workers, and it prohibited Trematore from subcontracting sheet metal work to non-Local 25 workers. When executing the June 1, 2015, to May 31, 2018, labor contract, Trematore’s president wrote on the contract, “This agreement is for the Hudson County High Tech School only!”.

Employment of Local 25 members. After Trematore’s plumbers—who were represented by the plumbers’ union—performed HVAC sheet metal work, Local 25 filed a grievance asserting that the work should have been done by its members. So Trematore began employing Local 25’s members to do sheet metal fabrication and installation HVAC work in 2018. In May 2018, however, Trematore laid off four Local 25 members who had been working on the project and hired 12 non-union sheet metal workers to work on the project over a weekend.

Second grievance. That prompted Local 25 to pursue another grievance and to file an unfair labor practice (ULP) charge with the NLRB. Local 25 also filed a representation petition with the NLRB, presenting signed cards to demonstrate that a majority of Trematore’s sheet metal workers supported the union.

Second labor contract with “evergreen” provision. To resolve the grievance and unfair labor practice charge, Trematore executed another labor contract on May 23, 2018, which covered the period between June 1, 2015, to May 31, 2018. Unlike the prior contract, this one did not purport to limit it to the High-Tech High School project, and it provided for automatic renewal via its “evergreen” provision. Coming into effect June 1, 2015, and remaining in effect until May 31, 2018, the second contract stipulated that it “shall continue in force from year to year thereafter unless written notice of reopening is given not less than ninety (90) days prior to the expiration date.”

Binding interest arbitration. The second contract also provided for binding interest arbitration of a successor agreement if direct negotiations between the parties failed. And Trematore “waive[d] any right it may have to repudiate this Agreement during the term of this Agreement, or during the term of any extension, modification or amendment of this Agreement.”

Subcontractor compliance and recognition. Trematore also agreed that subcontractors would agree in writing to comply with the CBA. And this time, Trematore also recognized that Local 25 represented a majority of its employees within the bargaining unit. It also recognized “the union as the exclusive collective bargaining agent for all employees within that bargaining unit, on all present and future job sites within the jurisdiction of the union” “until such time as the union loses its status as the employees’ exclusive representative as a result of an N.L.R.B. election requested by the employees.”

Governed by section 9(a). Because Local 25 demonstrated its majority status, the second contract was governed by Section 9(a) of the NLRA. And Trematore agreed that it would “not request an N.L.R.B. election and expressly waive[d] any right it may have to do so.”

Short-lived labor peace. The labor peace effectuated by the May 23, 2018, signing of the second contract was short lived, according to the court. That agreement expired eight days later and Trematore did not sign the contract for June 1, 2018, to May 31, 2021, which was negotiated by a multi-employer trade organization of which Trematore was not a member. Nor did Trematore request to independently negotiate or engage in binding interest arbitration with Local 25 for a subsequent contract.

Continued to employ Local 25 workers Trematore nonetheless continued to directly employ Local 25’s sheet metal workers until September 2018, and it abided by the 2018-2021 contract during that time. Since September 2018, however, Trematore has not directly employed Local 25’s workers.

Refusal to sign 2018-21 contract. In May 2019, Local 25 sent Trematore a printed copy of the 2018-2021 contract, and Trematore responded that it would not sign the agreement because it had “made a managerial decision that it will no longer bid for any work at any construction site which is within the work jurisdiction provisions of Local 25’s” contract.

Bound nonetheless Local 25 replied that Trematore was bound to the contract because of the 2015-2018 contract’s evergreen provision.

Subcontracted HVAC work within Local 25’s jurisdiction. Then, in March 2020, Trematore was subcontracted to perform plumbing and HVAC work at Felician University Wellness and Recreation Center in New Jersey. That project required sheet metal work and was within Local 25’s jurisdiction. Trematore, however, subcontracted out all the HVAC work—including sheet metal work—to a company that employed non-union sheet metal workers in January 2021.

Third grievance. The next month, Local 25 served Trematore with another grievance alleging that the company violated the 2018-2021 contract by subcontracting sheet metal work during the Felician project without the subcontractor agreeing to the contract’s terms. Trematore argued that it was not bound by the contract because (1) more than two and a half years had passed since it had employed Local 25’s members or performed any sheet metal work within Local 25’s jurisdiction and (2) the 2015-2018 contract had expired on May 31, 2018. In response, Local 25 argued that Trematore was bound to the 2018-2021 contract because of the 2015-2018 contract’s evergreen provision.

Obligation to bargain again. Finally, in February 2021, Local 25 sent Trematore a letter requesting negotiations for a 2021-2024 labor contract. Trematore told Local 25 that it was not obligated to negotiate because it was not bound by an existing contract. Local 25 rejoined that Trematore was bound to the 2018-2021 contract because of the evergreen provision in the 2015-2018 contract.

Employer’s lawsuit. A few weeks after receiving the request to negotiate, Trematore sued Local 25 in the U.S. District Court for the District of New Jersey. It sought to enjoin Local 25 from processing any grievances, proceeding to arbitration with respect to Trematore, and demanding negotiations for a successor contract. Trematore also requested a declaration that Local 25 is no longer the exclusive bargaining representative for Trematore’s employees and that Trematore is not subject to the 2015-2018 contract or any successor agreements.

Union’s ULP charge. Soon after Trematore filed its civil action, Local 25 filed a ULP charge with the NLRB. It alleged that Trematore had violated the NLRA by (1) repudiating Local 25’s exclusive representation status and its existing contract, (2) refusing to proceed with arbitration concerning a pending grievance, and (3) refusing to negotiate a successor agreement.

ALJ’s finding. In 2023, the NLRB investigated Local 25’s ULP and issued a complaint and notice of hearing against Trematore. In January 2024, an ALJ found that Trematore “violated Section 8(a)(5) and (1) of the Act by failing and refusing to bargain in good faith and failing to continue in effect all the terms and conditions of the parties’ 2015/2018 collective bargaining agreement by subcontracting bargaining unit work.”

District court’s decision. Back in the District Court, the parties cross-moved for judgment on a stipulated record, and the district court held that Trematore was bound by the labor contract because of the evergreen provision, reasoning that the one-employee unit rule does not apply to labor contracts formed under Section 9(a). The district court also reasoned that the “CBA contain[ed] provisions which unequivocally waived Trematore’s right to repudiate the collective bargaining agreements during their term, or during the term of any extension, modification, or amendment.” Trematore accordingly could not repudiate the contract, and the Felician grievance was therefore arbitrable.

Trematore timely appealed to the Third Circuit.

No valid repudiation. The appeals court found that it need not decide whether the one-employee unit rule applies to labor contracts formed under Section 9(a) because there was no valid repudiation. Because the contract’s non-repudiation and binding interest arbitration clauses “represent the parties’ agreement to negotiate a renewal agreement, and, if no agreement is forthcoming, to submit their dispute to the [National Joint Adjustment Board] for interest arbitration,” repudiation was inappropriate. Thus, even if the Third Circuit were to recognize the one-employee unit rule in the context of a labor contract under Section 9(a), Trematore could not use it to repudiate the labor contract here.

Third grievance arbitrable. The appeals court also found that the union’s Felician grievance was arbitrable. The parties agreed that Trematore would not subcontract bargaining unit work unless the subcontractor agreed in writing to comply with the labor contract, and they established an arbitration procedure to resolve “grievances arising out of interpretation or enforcement of” the contract. The contract did not expressly exclude this dispute from arbitration, observed the Third Circuit, and no evidence suggested that the parties intended to exclude it.

Partial dissent. Dissenting in part, Judge Fisher would hold that the labor contract is no longer in force. Trematore, according to Judge Fisher, waived the right to repudiate during the contract’s term, not in perpetuity, and it gave notice in February 2021 that it was repudiating under the one-employee unit rule. This, observed Judge Fisher, begs the question of whether Trematore could invoke the one-employee unit rule to repudiate a Section 9(a) contract. “Some courts, including the District Court in this case,” he noted, “have held the rule applies only to § 8(f) pre-hire agreements. But I see no reason to limit the rule to one kind of agreement or the other, so I would hold that it applies here and would reverse the District Court judgment to the extent it rules that Trematore continues to be bound by the CBA.”

The case is No. 24-1298.

Judge: Hardiman, T.

Attorneys: Dennis J. Alessi (Mandelbaum Barrett) for Brian Trematore Plumbing & Heating, Inc. Raymond Baldino (Zazzali Fagella Nowak Kleinbaum & Friedman) for Sheet Metal Workers Local Union 25, Smart.

Companies: Brian Trematore Plumbing & Heating, Inc.; Sheet Metal Workers Local Union 25, Smart

Cases: Labor Bargaining UnfairLaborPractices Arbitration DelawareNews NewJerseyNews PennsylvaniaNews