Legal Definitions - new-contract dispute

Definition: A new-contract dispute is a type of major dispute that arises when there is a conflict or controversy over basic working conditions, often resulting in a new collective-bargaining agreement or a change in the existing agreement. This type of dispute is subject to mandatory arbitration under the Railway Labor Act.

Example: A union representing railway workers may enter into negotiations with the railway company to establish a new collective-bargaining agreement. If the negotiations break down and the parties cannot agree on basic working conditions, such as wages, hours, or benefits, a new-contract dispute may arise. This type of dispute may require the intervention of a neutral third party to help the parties reach a resolution.

Explanation: The example illustrates how a new-contract dispute can arise when there is a disagreement over basic working conditions. In this case, the dispute may result in a new collective-bargaining agreement or a change in the existing agreement. The Railway Labor Act requires that major disputes, such as new-contract disputes, be subject to mandatory arbitration to help resolve the conflict and prevent work stoppages or strikes.