Most Favored Nation Clause
(Collective Bargaining Agreement)

Summary

This Most Favored Nation Clause (Collective Bargaining Agreement) protects an employer by triggering certain rights if, during the term of the collective bargaining agreement (CBA), the union agrees to more management-favorable terms with another employer. It is intended for inclusion in a collective bargaining agreement between an employer and the union representing its employees. It contains practical guidance, drafting notes, and alternate clauses. CBA most favored nation provisions typically either automatically allow the employer to benefit from the same more favorable terms as the union agrees to with another employer or at least allows the employer to reopen negotiations over such terms. Such clauses are typically drafted narrowly. This clause is intended for private employers. It is based on federal law and does not address all potential state law distinctions; thus, you should check any relevant state and local laws. For information generally on the collective bargaining process, see Good Faith Bargaining when Negotiating CBAs and Mandatory, Permissive, and Illegal Bargaining Subjects: Key Considerations.