Chapter 6Negotiating the Labor Agreement

Collective Bargaining: DefinitionCollective BargainingContinuing interdependent relationship that involves the exchange of commitments to resolve conflicts of interests Conflicts concern terms and conditions of employmentSuccess in Collective BargainingObjectivelySubjectively

Negotiation Preparation ActivitiesSelection of the Bargaining TeamSizeMember QualificationsProposal Determination and AssessmentRecent labor negotiations settled by industry competitors or other facilitiesRecords of previous negotiationsAnalysis of grievances

Costing Contract ProposalsPreparation of employee background dataCalculation of cents-per-hour wage increase and its roll-up effect on associated time-based benefitsThe cost of some items (e.g., funeral leave) can be difficult to precisely estimate

Effective NegotiatorsHas the ability to say no effectivelyHas integrity and the ability to inspire confidenceIs able to plan effectively and conduct researchCan discern bottom line interests of other partyIs even-tempered; able to tolerate ambiguity and conflictIs an excellent communicator and listener

Effective Negotiators (cont.)Self-confident and pragmaticHas good physical and mental staminaUnderstands short- and long-term implications of proposalsIs willing to take calculated risks to achieve bargaining goalsAsks relevant questions and interprets other partys responsesHas a sense of humor and uses it to relieve stress

The Bargaining Range

Bargaining ApproachesDistributive bargainingThe negotiation process is a win-lose exerciseEach party relies on its bargaining power Mutual gain (win-win or interest-based) bargainingBoth bargaining parties seek to satisfy each partys substantive interest Strengthens their relationship

Strategies and TacticsUsing persuasive arguments and objective evidencePainting a picture of the loss or gainPresenting a bargaining proposal in writingListening carefully for nonverbal cuesUse of positive reinforcementLinking issues (packaging multiple proposals)Matching proposalsSplitting the difference

The Bargaining Power ModelBP = OCD/CAAssumptionsBoth parties are rational and use the same approach to the costing of proposalsEither party will accept the other partys proposal if it costs that party more to disagree than to agreeFactors Affecting Bargaining PowerPrevailing economic conditionsBargaining partiesGovernmental interventions

Factors Affecting Agreement and Disagreement CostsUnionFinancial SupplementsPublic AidManagementExternal Competition FactorsCompany-Specific FactorsIntraorganizational Bargaining

Ethical and Legal ConsiderationsImmoral or Unethical BehaviorsBribing opponentsStealing opponents confidential informationDemeaning or humiliating opponentsSurreptitiously observing opponentsSelf-DealingConformance to Professional Standards by Negotiators

Good Faith BargainingEach party must demonstrate a sincere and honest intent to reach a labor agreement and be reasonable in their bargaining positions, tactics, and activitiesTotality of ConductViolations of Good Faith BargainingTypes of Bargaining Issues (subjects)

Examples of Mandatory SubjectsAll wage issues (hourly, piece rate, differentials, bonuses, etc.)Health care issues (premiums, carriers, etc.)Retirement plans Clothing or tool allowanceHours of workJob issues (duties, qualifications, etc.)Performance issues (promotion criteria, evaluation methods, etc.)Employee testing procedures (e.g., drug test)

Management Per Se ULPsRefusing to meet with the union to negotiate proposalsImplementing a wage change without consulting the union (unilateral change in a mandatory item)Reaching a bargaining impasse on a nonmandatory issueRefusing to furnish information necessary for the unions carry out its duty to bargain

Union Per Se ULPsInsisting on a closed shop or discriminatory hiring clauseRefusing to meet with a legal representative of the employer about negotiationsRefusing to negotiate a management proposal involving a mandatory subject

Other Bad Faith BargainingPleading PovertyTotality of Conduct DoctrineBoulwarismSurface bargainingDilatory tacticsImposing unreasonable conditionsUnilateral changesCommission of ULPs

Managerial RightsManagement RightsThe discretionary freedom of management to decide about and direct the operations of the firm Reserved Rights DoctrineManagement retains all rights to manage the firm except those rights restricted by the terms of its labor agreement with labor

Successor Employer Bargaining ObligationsSuccessor EmployerLegal duty to bargain with an existing union if there is substantial continuity of operationsSuccessorship ClauseA clause requiring the present owners to obligate subsequent owners to continue the labor contract

BankruptcyA bankrupt firm can abandon the terms of a labor contract if the firm:Seeks to make a fact-based proposal to the union to modify the contractProvides relevant information to the unionBargains in good faith Needs to modify the contract to reorganize the firm and treats all parties fairlyHas a balance of equities favoring modification of the contract

Violations of the Duty to Bargain in Good FaithLegal RemediesA cease-and-desist order that halts further ULPsA requirement to post written notices of employee basic rights and pledge to cease ULPsRequire employer to take affirmative actions that restore employees rights and remove the effects of past practices