Collective Bargaining Economic & Non-economic aspects AND Dispute Settlement: Grievance Procedures, Arbitration/Mediation, & Strikes
Legal & Political Structure • Meaningful government intervention began in the 2nd quarter of the 20th century – RLA & NLRA; Taft-Hartley reined in organized labor in 1945. • Vagueness of Phrases in the Statutes: • Good faith bargaining & terms & conditions of employment. • Three Legal Categories: • Mandatory Issues • Permissive Issues • Prohibited Issues
Issues • Mandatory issues: • Wages, hours, & working conditions – subjects that affect the employment relationship. • Permissive issues: Both sides can either refuse to bargain or voluntarily choose to bargain: - internal union matters such as how and when a tentative agreement is ratified - the price of meals furnished or sold to employees by an independent caterer - granting the employer the right to use the union label • Prohibited issues: • Topics that may not be lawfully included in a labor contract: closed shop clause, a racially discriminatory clause, or hot cargo clause (requires employees not handle particular goods).
Bargaining in Good Faith • Duty to bargain in good faith imposed on both employer and union. • Basic Requirements: • Meet at reasonable times, to confer in good faith about certain items • Put into writing any agreement reached if requested by either party • The obligation to bargain in good faith, does not compel either party to agree to a proposal by the other, nor does it require either party to make a concession to the other.
Bargaining Steps to end or change a contract • The party must notify the other party to the contract in writing about the proposed termination or modification 60 days before the date on which the contract is scheduled to expire. If the contract is not scheduled to expire on any particular date, the notice in writing must be served 60 days before the time when it is proposed that the termination or modification take effect. • 2. The party must offer to meet and confer with the other party for the purpose of negotiating a new contract or a contract containing the proposed changes. • 3. The party must, within 30 days after the notice to the party, notify the Federal Mediation and Conciliation Service of the existence of a dispute if no agreement has been reached by that time. Said party must also notify at the same time any State or Territorial mediation or conciliation agency in the State or Territory where the dispute occurred. • 4. The party must continue in full force and effect, without resorting to strike or lockout, all the terms and conditions of the existing contract until 60 days after the notice to the other party was given or until the date the contract is scheduled to expire, whichever is later. • (In the case of a health care institution, the requirement in paragraphs 1 and 4 is 90 days, and in paragraph 3 is 60 days. In addition, there is a 30-day notice requirement to the agencies in paragraph 3 when a dispute arises in bargaining for an initial contract.
Bad Faith Bargaining: Totality of the Conduct Doctrine • There are no precise standards in determining bad faith bargaining: • Evidence of Bad Faith Bargaining: • Delaying tactics, • Proposing unreasonable bargaining demands, • Implementing unilateral changes in conditions of employment, • Direct dealing, or implementing steps to by-pass the union, • Failure to designate an agent with sufficient authority to negotiate, • Withdrawal of proposals after tentative agreement has been reached on those items, • Arbitrary scheduling of meetings. • Boulwareism: Essential Elements included: • Offering to the union a packaged proposal on an “all or nothing, take it or leave it” basis. • Exhibiting, at the table, a willingness to explain its proposal and to listen to counterproposals, but refusing pro forma to make any changes in the complete package, and • Appealing directly to the workforce to encourage acceptance of the package, by providing detailed information on the basis of the unilaterally established package.
The Negotiation Process • Walton & McKersie framework: Identified 4 sub-process of bargaining – • Distributive Bargaining • Win-lose or zero-sum bargaining. • Integrative Bargaining • Joint gain or win-win bargaining. • Intraorganizational Bargaining • Different goals within either side, either union or management. • Surface bargaining: often seen in public sector – bargaining opposite a representative who lacks the authority necessary to make a commitment. • Attitudinal Structuring • The degree of trust the respective sides feel or develop toward each other. • Negotiations can be extremely emotional – hostile attitudes can and sometimes develop and can constrain effective negotiations. • Personality traits of negotiators may also play a role in trust building.
Management Objectives/Union Targets • Wage objectives: Critical – become the heart of the internal management planning process. • Union’s Targets: usually employ 2 basic criteria • The potential effects of the settlement on the real wages of the membership • A comparison between the proposed settlement and settlements with other bargaining units or with other employees. • Other Factors that influence objectives/targets • Local labor market comparisons • Product market factors • The firm’s ability to pay • Internal comparisons
Bargaining Power • The cost of disagreement relative to the cost of agreement on the opponent’s terms. • The employer’s ability to take a strike – • Timing of strikes • Perishability of the product • Level of Technology • Availability of replacements • Multiple locations & staggered contracts • Integrated facilities • The effect of a strike on sales & profits • Union bargaining power – • Barriers to entry for new competitors • Higher industrial concentration • Low foreign competition • High penetration of a single dominant union among workers in the industry • Alternative sources of worker income • Worker Solidarity
Marshall’s Conditions • Alfred Marshall argued that unions are most powerful when the demand for labor is highly inelastic – that is, when increases in wages will not result in significant reductions in employment in the unionized sector. • Four basic conditions under which the demand for union labor would be inelastic: • When labor cannot be easily replaced in the production process by other workers or machines. • When the demand for the final product is price inelastic. • When the supply of non-labor factors of production is price inelastic; • When the ratio of labor costs to total costs is small.
Bargaining Structures • Multiemployer Bargaining – characterized by large numbers of small firms within a given geographical area – eg. contract construction. • Employers compete on labor costs savings • Both employers & unions have mutual interest in uniform negotiation outcomes. • Industry-wide Bargaining – when the output of one producer or service is indistinguishable from that of other in the industry – eg. Trucking, coal mining. • Wide-area & Multi-craft Bargaining – Council of Allied Building Trades & Associated General Contractors. • Pattern Bargaining – high degree of concentration within an industry & a single dominant union – eg. auto industry. • Coordinated Bargaining – when two or more national unions represent employees of a single major employer – eg. General Electric and EW & UEW. • Centralization & decentralization in bargaining -
Impasses & Their Resolution • Impasse: occurs when parties cannot seem to move further in the direction of agreement. • The point in negotiations where neither party is willing to make additional compromises on an issue in order to reach an agreement. • Employers may then unilaterally impose its last offer at the negotiating table on the issues for which a legal impasse has been reached. • At any time after a contract expires, the union can strike or the employer can lock out workers. • Intervention: by 3rd parties may be required under the Railway Labor Act, for certain health care organizations, & in Taft-Hartley emergency disputes. • Alternatives to the strike at impasse more frequently employed in the public sector.
Mediation • Mediation: a neutral 3rd party tries to assist the parties to reach an agreement – aimed at opening communications & identifying settlement cues the parties may have missed. • How can mediation facilitate settlement? • Role of FMCS: under Taft-Hartley, parties are required to notify the FMCS 30 days before the expiration of a contract when negotiations are under way & an agreement has not been reached.
Arbitration • Rights Arbitration: arises under an existing contract. • Interest Arbitration: arises over what the terms of the new contact are to be.
Types of Strikes • Economic Strikes: may be called over any mandatory bargaining issue. Economic strikers can be legally replaced. • Unfair Labor Practice Strikes: strikes initiated by union perception of a violation of statute. • Wildcat strikes: unauthorized work stoppages initiated by employees.
Strike Activity • http://www.bls.gov/news.release/pdf/wkstp.pdf • Chart D. Number of major work stoppages beginning in period, 1947-2007 • Chart E. Number of workers involved in major work stoppages beginning in period, 1947-2007
Employers responses to Strikes • Employer Options: • Close down the affected site(s) • Continue to operate, perhaps with replacement workers. • Contract out required labor. • Employer consequences of a shutdown? • Continued operations – elevates the level of confrontation in the dispute. Mackay decision by U.S. Supreme court. • Contracting out – ally doctrine – if subcontractor is unionized, its employees legally can refuse to perform the work when a struck employer has initiated the order. Limited exemption to the ally doctrine for health care providers.
Rights of Economic Strikers • Offer to unilaterally return – if qualified and jobs not filled, refusing to rehire is an ULP • At end of strike – if jobs are open, they are entitled to reinstatement – receive preference in hiring when positions become open. • Employers may give preference to replacements who cross picket lines during strike. • Employers not required to reinstate employees who damage company property or engage in picket line violence – grievance procedure is available.