In our first four articles of this five-part series, we discussed trends in unionizing, ways to prevent organizing, what to do if faced with a union petition and what happens after a union election. This fifth article discusses the situation where a newly unionized company or company that has been unionized for many years is bargaining with the union for a new labor agreement or a renewal agreement.
While there are many things that need to be considered in bargaining the first or renewal labor agreement, you should engage in contingency planning from the outset. If the union were to strike, you want to have managerial, supervisory, and nonunion employees, whether from the facility at issue or another, who know how to and can perform the work needed to continue your operations. Since the National Labor Relations Board ("Board") has held that an employer may hire temporary replacements to continue operations in the event of a strike, you should have arrangements in place with temporary employers to fill positions to maintain operations. You should also assess if there are any positions which are critical to your operation which may not be easily filled and determine possible solutions.
Company's Management Team
You will want to decide who best to compose the employer's management negotiation team. In the first place, you should consider having a management negotiator who is either a lawyer with knowledge and experience in labor relations or another labor relations professional. From there, we recommend that the management team include three additional individuals. First, you should have a human resources representative, who is likely to be the most knowledgeable about any benefits provided for in the employee handbook or the labor agreement, as well as employee issues that may exist at the Company. Second, you will want an operations executive, who understands the impact of a proposal on the company's operations. Third, you typically want to involve a financial officer, who will be able to assist in making calculations as to the cost impact of proposals going back and forth across the table.
As the employer, you will next want to figure out the cost of the financial package that you are willing to offer to settle the labor agreement without a strike. In representing management, we typically work with the concepts of "red line" and "blue line" bargaining limits. The "blue line" is the cost of a package that the company believes will be a desirable settlement. The "red line" is the amount on which the company is prepared to take a strike.
While the red line and the blue line figures may change during negotiations, we have found it advantageous for the management team to focus on these two figures as soon as possible.
Negotiating the Labor Agreement
At the outset, we suggest negotiating "non-economic" items (such as no-strike, management rights, and seniority clauses) first. This usually occurs with the union's approval. "Economic" items are proposals primarily directed to monetary evaluation, such as wages, health insurance, vacations, holidays, and retirement contributions, which are normally discussed last.
As you bargain with the Union, you will want to keep track of tentative agreements on particular items that have been reached at the bargaining table. At some point, instead of discussing individual proposals, the Company may find it beneficial to present a "package" with the understanding that the package is a single proposal. If the economic issues are proposed as part of a package, the employer has the option of rearranging dollars in subsequent offers, even if as to a particular item the subsequent offer is less generous than a previous one.
Always work from your documents. Particularly in the case of a first collective-bargaining agreement, the "union contract" the Company is handed at the beginning of negotiations will typically be a collection of the best clauses that the Union has been able to secure from other employers over many years. The employer wants to be sure it presents the Union with well-prepared provisions, since it will be very difficult to change language in the future.
The employer should make only one "final" offer. When the final offer is made, it should be conditioned on an agreement by the union negotiating team to recommend that offer to the employees for ratification. Once the parties have made a tentative settlement at the bargaining table, the final session should never adjourn until the terms of the settlement have been reduced to writing and are approved by every member of the negotiating team for each side.
The Role of the Mediator
The union and the employer may have reached agreement on many provisions, but may be stuck on how to reach agreement on a few key economic issues such as wages and health insurance. Often a mediator can play an important role in assisting the parties in reaching an agreement.
With the right preparation and team, employers can achieve many of the rights they had before they became unionized and sometimes gain additional rights in renewal labor agreements. Preparing and conducting yourself during negotiations, with management in control and being fair and respectful, often leads to good results that the company can handle during the labor agreement, while remaining competitive and able to adapt in a changing business climate.