24 December 2013

Collective Bargaining, Strikes and Arbitration

Negotiation two-mind map

Chapter 8

Collective Bargaining, Strikes and Arbitration

Chapter 8, Major Features of Labor Relations in the USA

            (2): Collective Bargaining, Strikes, and Arbitration

Collective bargaining is the bilateral process of governing labor/management relations in the workplace. Without a union, the corporation unilaterally governs.

Negotiating a Contract

The first part of collective bargaining occurs when union leaders and management representatives negotiate and (hopefully) agree upon a written collective bargaining agreement (union contract). This legal document, which is enforceable by arbitrators and judges, includes:

·        Union rights: job titles represented by the union, union membership requirements, steward rights; bulletin board posting rights;
·        Management rights: to manage the workforce, except as limited by the contract;
·        Economic issues: pay rates, hours, pensions, medical insurance, vacations, sick leave;
·        Non-economic issues: work rules, seniority rules - for promotions, layoffs, overtime;
·        Employee rights: “just cause” required to discipline employees, grievance rights, arbitration of grievances;
·        Miscellaneous: contract duration, joint labor-management committees, etc.

The process of collective bargaining to achieve a contract includes several stages:

1.      Each side (union and management) decides on a list of its contract proposals (demands). Each side selects a bargaining team and a chief representative, and, usually, a lawyer.

2.      The two sides meet and exchange proposals along with opening presentations and supporting documents. They then take up the various proposals, one by one, “horse trading” and compromising as they go. Usually, the two sides agree to keep the progress of the negotiations private. When the negotiations do not proceed smoothly, the union will often mobilize its membership to show management that it can organize a strike if the negotiations break down. Management, on the other hand, may cut overtime or publicize its ability to move to lower-cost locations. Usually, the two sides agree on a new contract without resorting to a strike or lockout.

3.      If the two sides come to an impasse (cannot reach an agreement), management has the right to impose its last contract offer on the workers. In the private sector, the union has the right to strike to win its demands or prevent management from imposing its last contract offer, and management has the right to “lockout” its employees to force them to accept it.

The Federal Mediation and Conciliation Service (FMCS) is a government agency that routinely offers to assist collective bargaining negotiations by sending in a mediator. In 2011, it mediated 4,700 negotiations, with the vast majority achieving settlements. For example, the FMCS mediated a new contract between two unions representing 62,000 grocery workers and three national supermarket chains that had been deadlocked over rising health care costs.[i]

Management’s ability to resist strikes has grown in recent years. Its weapons include: Using management personnel and replacements (“scabs”) to continue production at struck facilities; moving production to other plants; and informing union members they will not be allowed to return to work because “permanent replacements” have replaced them.

Unions have mainly abandoned the strike weapon because they have learned that they often lose when they strike, with “permanent replacements” sometimes taking some or all of their members’ jobs. The U.S. Department of Labor reported only 19 major strikes and lockouts in 2011 involving 1,000+ workers.[ii] The largest strike involved 45,000 employees of the telecommunications giant Verizon who struck in August 2011 for two weeks and returned to work without a new contract. The two sides agreed to keep the old contract in place while they continued to negotiate. As of mid-2012, they have not signed a new contract.

In the public sector, very few workers have the right to strike. Federal and most state and municipal employees can be fired if they strike. New York City (NYC) has a particularly harsh public sector labor law, called the Taylor Law (1967). It says that each striker has to pay a fine of two days’ pay for every day the worker was on strike, and it allows the government to fine the union and jail its leaders.[iii] When NYC’s subway and bus employees struck for three days in 2005, a court fined the union $1 million per day, jailed its leadership, and denied it the right to collect members’ dues through payroll “checkoff” (automatic deduction each month).[iv]

In the public sector, when the two sides cannot agree on a contract, laws prescribe many paths forward. U.S. Postal Service and many police and firefighter unions use an arbitrator (a neutral person chosen by the two sides) to decide the contract terms. Some states provide a mediator (who helps the two sides narrow their differences) and then a fact finder (who recommends new contract terms). In some states, the law allows the employer to impose new contact terms if one side rejects the fact finder’s recommendation. Often, there is no mechanism to settle the contract when mediation and fact finding fails, and negotiations continue for years before the two sides agree on a new contract.

Enforcing a Contract – Grievance and Arbitration

The second part of collective bargaining is the ongoing struggle between the two sides to compel the other side to live up to its contractual obligations. Thus, management disciplines employees who (it claims) violate attendance rules, work poorly, disobey instructions, steal, etc. The union responds by filing grievances (complaints) against the disciplinary actions and often appeals to an arbitrator for a final and binding decision. The union also files grievances when (it claims) management underpaid workers, required them to work in an unsafe environment, discriminated (sexual harassment, racist conduct), or violated seniority rights, etc.

The courts, management, and unions strongly support the use of the grievance procedure (including arbitration) to resolve day-to-day disputes about labor contracts. Therefore, almost all labor contracts include a “no strike” (and a “no lockout”) clause prohibiting collective actions that disrupt production (demonstrations, slowdowns, work-to-rule, sickouts, short strikes, lockouts). However, unhappy unions and groups of workers sometimes initiate these actions to protest speed-up, safety hazards, or firing of popular workers. When the union organizes these “unfair labor practices,” they open the union to being sued. Individual workers can be fired.

There are no “labor courts” in the United States. Congress, the Supreme Court, and the NLRB have decided that labor arbitrators, chosen jointly by management and labor, should hear and decide almost all grievances. Additionally, the NLRB has ruled that arbitrators (rather than NLRB specialists) should decide almost all charges of “unfair labor practices” involving alleged violations of already-existing contracts.[v] The same practice exists in the public sector.

Arbitrators make “final and binding” decisions about alleged contract violations. The union and the company each pay half of the arbitrator’s fees. This helps to ensure the arbitrator’s neutrality and allows workers to have free representation. An arbitrator can order an employer to reinstate to employment and award back pay to a worker who was fired “without just cause,” but the arbitrator cannot impose a fine for “pain and suffering” or other damages.

Discussion Questions

Discuss the right to strike. Should all workers be able to strike? Why?

[i] http://fmcs.gov/assets/files/Public%20Documents/2011_Annual_Report.pdf.
[ii] http://www.bls.gov/news.release/wkstp.t01.htm In 2009, there was a record low of 5 major work stoppages involving 13,000 workers. These numbers are tiny, compared with annual averages in the 1990s (32 strikes; 300,000 workers), 1980s (75 strikes; 400,000 workers), and 1970s (300 strikes; 1.2 million workers).
[iii] http://www.perb.state.ny.us/stat.asp#str.
[iv] http://www.twu.org/flipbook/2012winter/TWU_Winter2012.pdf.
[v] The National Labor Relations Board, under the Collyer Doctrine, refers issues to arbitration if they can be resolved under the collective bargaining agreement. Collyer Insulated Wire 192 N.L.R.B. 837 (N.L.R.B. 1971).


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