Michael R. Carrell & Christina Heavrin
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Michael R. Carrell & Christina Heavrin. Labor Relations and Collective Bargaining Eighth Edition. www.prenhall.com/carrell. PART II: The Collective Bargaining Process. CHAPTER 5 Negotiating an Agreement. © 2007 Prentice Hall Inc. All rights reserved. Chapter Outline.

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Michael R. Carrell & Christina Heavrin

Labor Relations and

Collective Bargaining

Eighth Edition


PART II: The Collective Bargaining Process


Negotiating an Agreement

© 2007 Prentice Hall Inc. All rights reserved

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Chapter Outline

The Bargaining Process

Bargaining Techniques


Bargaining in the Public Sector

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Labor News

Northwest Airlines Threatens Union With Replacement Mechanics

On August 11, 2005 Northwest Airlines announced that it had 1,500 trained and ready replacement workers should the Aircraft Mechanics Fraternal Association Union decide to strike.

When? Only nine days before the current contract would expire.

How? Management contacted mechanics laid off by other airlines, Northwest also had 1,500 replacement flight attendants ready should its own flight attendants call a sympathy strike.

Why? The company hoped to convince union members that a strike could cost them their jobs – and thus avoid a strike.

Cause? Northwest claimed it needed$176 in wage & benefit concessions from the union to avoid filing for bankruptcy --- which had already claimed United and US Airways, Delta Airlines.

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The Bargaining Process

People who bargain

Union representatives

National agreements - large negotiating teams

Team members represent different levels of the union

Local agreements - comprised of ex-officio members, a chief steward or grievance committee member

Craft unions include business agent

Industrial unions include international representative

Final settlement usually must be approved by membership

Management representatives

Top management, including policy makers, labor relations staff, and some line executives

Labor relations adviser and negotiator used for multi-employer bargaining

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People who bargain (cont.)

Negotiating skills

Must understand their own positions well as the other party’s positions on each bargaining issue.

Listening and communication skills

Personal integrity and courage

Figure 5-1: UAW-Ford National Negotiating Committee

The Bargaining Process (cont.)

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The Bargaining Process (cont.)

Preparation and choice of bargaining items

Analysis - data is gathered and bargaining items are identified

NLRA provides that bargaining shall include rates of pay, wages, hours of employment, and conditions of employment

3 categories of bargaining subjects - Borg-Warner

Mandatory - a party may insist on its inclusion and the other party cannot refuse to discuss it

Permissive - a party must withdraw itself from bargaining if the other party does not voluntarily agree to discuss it

Illegal - violates public policy or inconsistent with NLRA

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The Bargaining Process (cont.)

Preparation and choice of bargaining items

Analysis (cont.)

Mandatory items

Legal impasse occurs when parties cannot agree

At impasse, employer can impose its final offer

Examples of mandatory items in the realm of compensation

pensions and insurance benefits stock purchase plans

profit-sharing plans merit wage incentives

Christmas and other bonuses company housing, meals, discounts

Examples of mandatory items in the realm of conditions of employment

employment security union security

job performance management-union relationships

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The Bargaining Process (cont.)

Preparation and choice of bargaining items (cont.)

Analysis (cont.)

Permissive items

Concessions seldom made on permissive subjects

Cannot bargain to impasse

Examples of permissive items

Performance or indemnity bonds

Management’s right to have an impact upon internal union affairs

Illegal items

Examples of illegal items

Violations of public policy

Items inconsistent with the NLRA

Separability clause

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The Bargaining Process (cont.)

Preparation and choice of bargaining items (cont.)


Sources of bargaining items

Unions introduce new items to be discussed

Management reacts to proposals

Union surveys membership to identify issues

Analysis of issues brought as grievances

Recent contracts negotiated in same


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Preparation and choice of bargaining items (cont.)

Planning - effective negotiators:

Anticipate issues critical to both parties

Prioritize objectives & establish realistic settlement ranges

Prepare overall strategy for negotiations that reflects the needs of both parties

Develop an agenda that arranges issues

in a logical order for discussion

Incorporate in written ground rules

The Bargaining Process (cont.)

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The Bargaining Process (cont.)

Negotiation sessions:

Ground rules established by parties

Where, when, how often, and how long to meet

Size of bargaining teams

Each side designates a leader

Exchange initial proposals

Separate economic and non-economic


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Negotiation sessions (cont.):

Posturing - monologues wherein both parties present demands

Common aspects of bargaining that may be anticipated include:


Concealment of real bargaining objectives

from other party

Packaging items

Throwaway items




Saving face

The Bargaining Process (cont.)

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The Bargaining Process (cont.)

Negotiation sessions (cont.):

Exchange of proposals and counterproposals

Usually get quick agreement on less important non-economic items

Bargaining on economic items typically involves packaging

Point of crisis - agreement cannot be reached

Mediation or arbitration available to help reach


“The crunch” - point of no return when both

sides realize that some deadline will cause no

decision to become the final decision

Signal that it is time for a decision or impasse

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Negotiation sessions (cont.)

Tentative agreement

Must be ratified by union membership in secret-ballot vote

Contract - written form of negotiated agreement

May encounter problems on agreeing to language that reflects agreement

The Bargaining Process (cont.)

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Bargaining Techniques

NLRA establishes boundaries of the negotiation process

Parties determine techniques

Has become a stylized ritual

Parties sincerely attempt to resolve conflicting interests

Successful bargaining lies in flexibility and in understanding and controlling the process

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Distributive bargaining

Negotiations viewed as ‘win-lose’ situation

Each side wants to maximize its share of limited resources

5 key elements:

1.Target point - optimal point to conclude negotiations

2.Resistance point - maximum or minimum beyond which a proposal is unacceptable

3. Initial offer - first number offered by negotiator

4. Settlement range - range between the resistance points

5. Settlement point - agreed upon point in settlement range

Bargaining Techniques (cont.)

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Bargaining Techniques (cont.)

Interest-based bargaining

Used with increasing frequency

Based on the idea that both parties have a fundamental mutual interest in the long-run economic success of the employer

Process includes:

Both sides fully share all relevant bargaining information

Willingness to forgo power or leverage as the sole determinant of “winning”

Brainstorming to generate new options and willingness of both parties to withhold criticism

Focus on present issues and finding solutions that will work in future contracts

Willingness of both parties to accept and utilize the process

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Bargaining Techniques (cont.)

Principled negotiations

“Hard on the merits, soft on the people”

Avoid typical haggling process

Separate the people from the problem

Focus on interests rather than positions

People - understand attitudes and perceptions of both parties

Couch proposals in terms consistent with attitudes

Build a working relationship before negotiations begin

Interests - attack the problems

Identify interests before parties’ positions harden

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Principled negotiations (cont.)

Options - develop as many options as possible

Interests of both parties can be satisfied in numerous ways

Multiple options increase chance of successful compromise

Objective criteria - agreement easier when the basis of agreement is a recognized criterion

Bargaining Techniques (cont.)

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Bargaining Techniques (cont.)

Pressure bargaining

Settlement of collective bargaining based on relative bargaining power of each party

Ultimate tests of strength in negotiations

Union’s ability to strike

Company’s ability to take a strike

Pressure tactics

Good guy/bad guy


The “nibble”



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Many reasons for a stalemate

Interests of parties have not been reconciled

One party has no intention of settling

Union membership rejects proposed contract

Options when impasse occurs:

Third-party intervention

Continue the old contract on day-to-day basis

Lockout staged by employer

Strike called by the union

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Impasse (cont.)

Calling a strike: “lies at the core” of NLRA

Union must weigh cost of a strike versus probable benefit

Unions less likely to call a strike today than in past years

Strike means loss of wages and benefits, especially health insurance

Strikers not entitled to food stamps

Replacement workers may be hired

Management response

Prepare a strike plan that may entail:

Shutting down operations during strike

Continuing to operate using management personnel

Hiring replacement workers

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Impasse (cont.)

Calling a strike (cont.)

Predicting a strike

Multiple causes of strikes make them difficult to predict

State of the economy and political forces

Failure of the parties to correctly estimate other party’s level of interest in critical factors

Cost of strike

Benefits stemming from a strike

Why strikes occur

Accident model - strikes occur due to bargaining process errors

Joint strike costs - strikes occur when joint costs to both parties are relatively low

Rational tactics - two parties have different information

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Calling a strike (cont.)

Types of strikes

Primary strikes - strike between an employer and employees

Economic strike - called to affect the economic settlement of a contract under negotiation

Unfair labor practice strike - called to protest an employer’s violation of the NLRA

Economic strike may become an unfair labor practice strike

Rolling strike - targets one location of an employer at a time for a union walkout

Location can change daily

Impasse (cont.)



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Impasse (cont.)

Calling a strike (cont.)

Permanent striker replacement

Worker retains protection of the NLRA under both economic and unfair labor practice strikes

Mackay doctrine

Economic strike - strikers not entitled to reinstatement if their jobs have been filled with permanent replacements

Job can be reclaimed if it is vacant or if permanent replacement leaves

Unfair labor practice strike - strikers entitled to reinstatement even if the position has been filled

Striker misconduct can disqualify worker from reinstatement

Employers more willing to hire permanent replacements; or use them as a threat to prevent a strike

Workers on strike for over one year are not eligible to vote in a decertification election.

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Impasse (cont.)

Calling a strike (cont.)

Illegal strikes

Unlawful means of conducting a strike include:

Sit-down strike - takeover of employer’s property

Wildcat strike - does not have approval of the union

Violates a no-strike clause in existing contract

Partial strike - various job actions that violate employer’s property rights

Sickout - organized effort to have workers call in sick

Unlawful goals that make a strike illegal

Jurisdictional strike - dispute between unions over entitlements to work

Featherbedding strike - pressure employer to make work for union members

Recognitional strike - attempt to gain recognition for another union if a certified union already represents workers

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Impasse (cont.)


Varies according to type of union

Craft unions - small number of pickets to inform members of other craft unions that a strike is in progress

Industrial unions - requires active and large number of pickets

Intended to discourage unskilled laborers from keeping production lines in operation

Prominent U.S. strikes

In various industries - telephone, steel, airlines, coal mining, Major League Baseball

In various companies - Eastern Airlines, General Motors, United Parcel Service, Comair

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Impasse (cont.)


Employer may withhold employment during a labor dispute to resist union demands

Defensive lockout - justified if a threatened strike caused unusual economic loss or operational difficulties

Offensive lockout - used to end labor dispute on terms favorable to employer

Use of replacement workers

Same rules apply as those for strikes

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No-strike, no-lockout provisions

Contained in most collective bargaining agreements

Unconditional bans

Conditional bans

Exhaustion of grievance procedure

Violation of arbitration award

Refusal to arbitrate dispute

Noncompliance with portion of agreement

Deadlocked contract re-opener

Attractive to industry

Impasse (cont.)

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Impasse (cont.)

Resolution of impasse

Mediation - brings parties together to keep them talking, meeting

Third party, has no authority to end the dispute

2005 FMCS survey of union/mgmt. leaders: mediation in greater demand today due to polarization of sides

Interest arbitration – third party (arbitrator or panel) makes final and binding decision on the details of the final collective bargaining agreement

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Resolution of impasse (cont.)

Final-offer arbitration - both parties submit final offer to third party (arbitrator or panel) that has authority to select one of the proposals, but not to choose a compromise

Mediation-arbitration - mediator is given additional authority to arbitrate any unresolved issues, which may make mediation more successful

Fact finding – third party assembles the facts and makes them public

May recommend how to end an impasse

Impasse (cont.)

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Bargaining in the Public Sector

Nature of public employment

Public employees provide essential services

Lack of controls on public service and absence of marketplace control on their costs

Difficult to assess productivity of a professional work force

Elected officials represent public employers

Sovereignty Doctrine limits issues addressed by bargaining

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Limited scope of negotiations in public sector

Management rights are broader than in private sector

Agency shop the most common type of union security

Federal law precludes negotiation about wages and benefits

Type of job determines flexibility of negotiations about hours

Negotiations about working conditions focus on the provision of services to the public

Grievance procedure must be included, often with provision for binding arbitration

Bargaining in the Public Sector (cont.)

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Bargaining in the Public Sector (cont.)

Negotiating the public employee contract

Bargaining theories and processes in the private sector apply to public sector with little variation

Multilateral bargaining exists in 2 forms

Council form - government represented by a negotiator who returns agreement for council approval

Executive-legislative form - negotiator employed by executive branch returns an agreement

Agreement must be approved by both executive and legislative branches of government

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Bargaining in the Public Sector (cont.)

Negotiating the public employee contract (cont.)

Open negotiations - press coverage may harm negotiating process

Sunshine laws - may require bargaining to be open to public

Press coverage necessary because of ultimate responsibility of the public for decisions of elected officials

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Bargaining in the Public Sector (cont.)

Right to strike

Usually denied to public employees by collective bargaining statute or by court actions

Arguments that support the right to strike

In actuality, public employees go on strike despite laws to the contrary

Strikes, or credible strike threats, facilitate final agreement

Strike strength can be used as union bargaining strategy

Nonessential public employees should have same rights as private-sector employees

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Right to strike (cont.)

Arguments that oppose the right to strike

Public employees provide essential services

Gives employees more power than elected officials

Unions can compel governments to make unwise agreements

Bargaining in the Public Sector (cont.)

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Resolving impasse in public sector

Public sector employer generally may implement its “last best offer”

Mediation - provided in almost all states with public sector collective bargaining

Mediator has no independent authority to resolve disputes

Fact finding and advisory arbitration

More effective because of political pressures

Third party issues findings and recommendations

Interest arbitration

Arbitrator or panel makes a binding decision on negotiation disputes

Bargaining in the Public Sector (cont.)