The 26,000 members of the Chicago Teachers’ Union went on strike at the beginning of last week. A tentative deal to end the strike was announced last Friday, but the strike has not yet been fully resolved. For many, the strike is interesting because of its political implications. Chicago is President Obama’s adopted hometown, and its Mayor, Rahm Emmanuel, is a Democrat who counted on organized labor to help him get elected. These circumstances create real life drama and great fodder for political pundits. But the strike is also interesting because in many ways it is quite different from the typical high-profile labor dispute. In Chicago, the primary disputes between the teachers and the School District are over “non-economic” issues.
Generally, when a high profile labor dispute hits the national news, the parties are at odds over wage and benefit provisions – the so-called “economic” issues. In bargaining, parties frequently bifurcate the bargaining process; getting the “easy” non-economic issues out of the way before tackling the divisive wage and benefit proposals. However, an employer who focuses exclusively on the economic issues does so at its own peril. Non-economic issues – including work jurisdiction, bumping and recall rights, seniority, discipline and discharge, and grievance procedures – have significant implications for the operation of a business.
While not directly economic in nature, the non-economic provisions of a labor contract often result in significant cost for employers. This is because non-economic provisions generally work to limit an employer’s ability to efficiently and profitably manage its business. For example, many labor agreements contain work jurisdiction provisions that designate the work that can be performed by bargaining unit position. It is also not unusual to see provisions in contracts that limit an employer’s ability to introduce new technologies or production methods, or that impose staffing and scheduling requirements. Such provisions hamstring an employer’s ability to timely respond to market trends, and introduce new technology or production methods. As in Chicago, non-economic provisions can also compromise an employer’s ability to create and manage a high performance work team. Progressive discipline and grievance provisions can make it difficult, if not impossible, to eliminate poorly performing workers; and seniority provisions often force employers to let ambitious and motivated less senior employees go in favor of employees who may or may not measure up.
- In first contract bargaining, fight hard to exclude or at least limit non-economic provisions that make it harder to run your business efficiently and profitably. First contract bargaining is your best chance to succeed on this front.
- Don’t ignore non-economic issues when bargaining successor agreements. While the primary focus may still be on wages and benefits, non-economic terms may also have costs. They also tend to be more important to the union than they are to management, and should be part your overall bargaining strategy.