The Long March To BILDISCO And The 1984 Bankruptcy Amendments: Establishment of a Limited Right To Reject Collective Bargaining Agreements

Congress passed both the 1935 National Labor Relations Act (NLRA) and the 1938 Bankruptcy Act without providing a mechanism for resolving a potential conflict in their provisions. The Bankruptcy Act and its successors contained a provision authorizing debtors in possession and trustees to reject executory contracts, including collective bargaining agreements. The NLRA provides that existing labor agreements can be modified or terminated only through a process involving notice and bargaining. Although Congress had opportunities to address this conflict, it chose to remain silent. The common law process of resolving this impasse started in 1975 with the Second Circuit. This article traces the winding path of appellate decisions which culminated in last year’s U.S. Supreme Court decision in NLRB v. Bildisco and Bildisco. It is now clear that the statutory and policy conflict has been resolved in favor of a bankruptcy override of collective bargaining. With that settled, the article proceeds to address issues left unanswered by the Bildisco majority. It concludes by analyzing the modifications of Bildisco included by Congress in the Bankruptcy Amendments and the Federal Judgeship Act of 1984.

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William A. Wines, The Long March To Bildisco And The 1984 Bankruptcy Amendments: Establishment of a Limited Right To Reject Collective Bargaining Agreements, 20 Gonz. L. Rev. 187 (1984).

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