Legal Methodology

Legal Methodology

Introduction

Arbitration decisions often turn on the interpretation of contract language, and numerous arbitrators base their awards on the plain meaning of collective bargaining agreements. Application of what has been characterized as the plain meaning rule as a standard of contract interpretation requires that the meaning of contractual language be determined solely by attaching the plain or usual meaning to words that appear clear and unambiguous on the face of an agreement.

Coincidence offered to explain the intentions of the contracting parties. In many cases, evidence of a past practice of the contracting parties at variance with express provisions of their agreement is disregarded when an arbitrator invokes the plain meaning rule. As a result, the rule has produced arbitral opinions based on interpretations of collective bargaining agreements contrary to the intentions of either party. Although favoured a century ago, the plain meaning rule has been rejected by the Uniform Commercial Code (the U.C.C. or the Code) and the Restatement (Second) of Contracts (the Restatement),9 and condemned by treatise writers." In addition, the rule has been discredited by an increasing number of courts. Significantly, recent court decisions recognize that labour arbitrators have broad authority to consider extrinsic evidence in addition to the actual language of the agreement.

Nevertheless, arbitrators continue to make frequent use of the plain meaning rule. This Article analyzes the application of the plain meaning rule in labour arbitration awards in an attempt to reconcile the anomaly that exists: while courts are progressing toward rejection of the rule, arbitrators continue to rely on it. Part I discusses the anatomy of the plain meaning rule. Part II addresses its rejection by the courts. Part III analyzes arbitration decisions in which the plain meaning rule has been invoked. Part IV examines alternatives to the plain meaning approach. Because the general aim of contractual interpretation is to effectuate the intention of the parties, this Article concludes with a formulation of an approach that embodies this objective.

Anatomy of the Plain Meaning Rule

One court has described the application of the plain meaning rule as a process by which "words of the parties [are run] through a judicial sieve whose meshes [are] incapable of retaining anything but the common meaning of the words, and which permit[s] the meaning which the parties had placed upon them to run away as waste material." The rule is commonly understood to bar consideration of extrinsic evidence to interpret writing, if that writing is characterized as plain or clear.

The plain meaning rule, accordingly, raises a preliminary issue of admissibility. Extrinsic evidence is irrelevant unless the interpreting court or arbitrator first concludes that the contractual language is ambiguous. Courts disagree over whether extrinsic evidence may be admitted to prove the existence of ambiguity. Some judges adopt a plain meaning approach and determine from their own point of view whether the written words are ambiguous. Other courts hold that a judge must consider alternative meanings advocated by the parties and the nature of the objective evidence offered ...