Also known as: deadlock
Written by attorneys — see sources below.
2 senses
A deadlock among directors in managing corporate affairs that shareholders cannot break and that threatens or causes irreparable injury to the corporation or prevents the business from being conducted to the advantage of the shareholders generally.
A point in labor negotiations at which the parties cannot reach agreement despite good-faith bargaining.
A deadlock among directors in managing corporate affairs that shareholders cannot break and that threatens or causes irreparable injury to the corporation or prevents the business from being conducted to the advantage of the shareholders generally.
A point in labor negotiations at which the parties cannot reach agreement despite good-faith bargaining.
Imperial Motors and the union reach a new collective-bargaining agreement after extended talks but cannot agree on a separate back-to-work deal covering strike damages. The union instructs members to continue striking until the company accepts the hold-harmless terms. The company refuses, treating further strikes as violations of the new agreement.
Each sense below has its own examples, sources, and questions.
Irene Ingalls and Igor Ito each own half the shares of Ideal Solutions and serve as its only directors. They disagree on whether to refinance the company's main project or sell it immediately and refuse to compromise. No board decisions can be made, construction halts, permits expire, and lenders issue foreclosure notices. Irene petitions for judicial dissolution.
Isabelle Inman and Ingrid Innes form Insight Consulting with equal ownership. They execute a shareholder agreement that transfers authority to resolve any board deadlock to a designated third-party advisor. When the directors later split on a key contract decision, the agreement allows the advisor to break the tie and approve the deal.
3 common questions
The shareholder must show that directors are deadlocked in managing corporate affairs, that shareholders cannot break the deadlock, and that the deadlock threatens or causes irreparable injury or prevents the business from operating to the shareholders' general advantage.
Supporting sources
Yes. A shareholder agreement may transfer authority to resolve any deadlock among directors or shareholders to one or more shareholders or other persons, provided the agreement is properly executed and noticed.
Supporting sources
No. A simple disagreement does not satisfy the statute. The deadlock must produce concrete harm such as stalled operations, expiring permits, lost tenants, or lender defaults that threaten irreparable injury or prevent advantageous conduct of the business.
Supporting sources
Petitioner Granite Rock Company is a concrete and building materials company that has operated in California since 1900 and employs approximately 800 employees under labor contracts with several unions, including respondent International Brotherhood of Teamsters, Local 287. Granite Rock and Local were parties to a 1999 collective-bargaining agreement that expired in April 2004. After negotiations reached an impasse, Local members initiated a strike on June 9, 2004, in support of their contract demands. The strike continued until July 2, 2004, when the parties reached agreement on the terms of a new collective-bargaining agreement containing a no-strike clause and an arbitration clause. At the end of that negotiating session, Local's business representative approached Granite Rock about executing a separate back-to-work agreement that would hold union members harmless for damages incurred during the June 2004 strike, but no such agreement was executed and Local voted to ratify the new agreement on July 2 without it. Respondent IBT, which had advised Local throughout the negotiations and supported the June strike, opposed Local's decision to return to work without a hold-harmless agreement and instructed Local's members not to honor their agreement to return to work on July 5. On July 6, 2004, Local's representative demanded a hold-harmless agreement, but Granite Rock refused and informed Local that continued strike activity would violate the new agreement's no-strike clause. IBT and Local responded by announcing a companywide strike involving numerous facilities and hundreds of workers, including members of other IBT locals. IBT provided pay and benefits to members who refused to return to work, directed Local's negotiations, supported Local with a $1.2 million loan, and represented that it had unilateral authority to end the work stoppage in exchange for a hold-harmless agreement. On July 9, 2004, Granite Rock sued IBT and Local in the District Court, invoking federal jurisdiction under LMRA § 301(a), seeking strike-related damages for breach of contract, and requesting an injunction against the ongoing strike on the ground that the hold-harmless dispute was an arbitrable grievance. The unions conceded § 301(a) jurisdiction but asserted that the new agreement was never validly ratified on July 2. After a Local member testified that the new agreement had been put to a ratification vote on July 2 and unanimously approved, Granite Rock moved for a new trial. On August 22, while that motion was pending, Local conducted a second successful ratification vote, and on September 13 the unions called off the strike. The District Court granted Granite Rock a new trial on its damages claims, denied Local's motion to send the ratification-date dispute to arbitration, and submitted the question to a jury, which unanimously found that Local ratified the agreement on July 2, 2004. The District Court entered the verdict and ordered arbitration on Granite Rock's breach-of-contract claims. Granite Rock amended its complaint to add federal tortious-interference claims against IBT, which the District Court dismissed on the ground that § 301(a) supports a federal cause of action only for breach of contract. The Ninth Circuit affirmed the dismissal of the tortious-interference claims but reversed the arbitration order, holding that the ratification-date dispute was a matter for an arbitrator to resolve under the agreement's arbitration clause. The Supreme Court granted certiorari.
View caseIndigo Textiles negotiates with its employees' union over wages and benefits. After good-faith discussions the parties cannot agree on key terms. The employer implements its last offer while the union considers further economic pressure. Both sides treat the negotiations as exhausted for the time being.
In 1967 the Detroit Federation of Teachers was certified under Michigan's Public Employment Relations Act as the exclusive bargaining representative of all teachers employed by the Detroit Board of Education. The Union and the Board thereafter concluded a collective-bargaining agreement effective from July 1, 1969, to July 1, 1971. Among the agreement's provisions was an agency shop clause. Every teacher who had not become a Union member within 60 days of hire or of the clause's effective date had to pay the Union a service charge equal to the regular dues required of Union members. A teacher who failed to meet this obligation was subject to discharge. Christine Warczak and other named teachers filed a class action in a state court naming as defendants the Board, the Union, and several Union officials. Their complaint as amended alleged that they were unwilling or had refused to pay dues and that they opposed collective bargaining in the public sector. D. Louis Abood and other named teachers filed a separate action in the same state trial court with virtually identical allegations. This second action was held in abeyance pending disposition of the Warczak appeal. When that case was remanded the two cases were consolidated in the trial court for consideration of the defendants' renewed motion for summary judgment. Following the 1973 legislative amendment that expressly authorized agency-shop clauses the trial court granted summary judgment and upheld the clause under state law and the Federal Constitution. The Michigan Court of Appeals reversed the retroactive application of the amendment but upheld the clause insofar as service fees financed collective bargaining while invalidating it to the extent fees financed political and ideological activities. The Michigan Supreme Court denied review and the plaintiffs appealed to the United States Supreme Court.
View case1 common questions
After impasse the employer may implement changes it previously offered to the union and may decline to negotiate further on the mandatory subjects that produced the deadlock.
…private and public-sector collective bargaining is drawn from these sources. : See, e. g. , Anderson, Strikes and Impasse Resolution in Public Employment, 67 Mich. L. Rev. 943 (1969); Burton & Krider, The Role and Consequences of Strikes by Public Employees, 79 Yale L. J. 418 (1970); Hildebrand, supra , n.…