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"REACHING AGREEMENT
ON FIRST CONTRACTS
-- A LABOR PERSPECTIVE"
Richard J. Brean
General Counsel
United Steelworkers International Union
Five Gateway Center
Pittsburgh, PA 15222
4 th Annual ABA Section of Labor and
Employment Law Conference
Chicago,IL
November 3-6, 2010
"REACHING AGREEMENT ON FIRST CONTRACTS
•• A LABOR PERSPECTIVE"
I.
Introduction
Neither the NLRB nor FMCS keeps statistics on the percentage of certifications
that result in a first collective bargaining agreement. However, evidence suggests that
perhaps a third of bargaining units voting for representation never secure a contact and
that eventually the union is decertified, disclaims interest, or simply walks away. I
These results are not surprising since unions and employers approach bargaining
with radically different mindsets. Each and every union, without exception, eagerly
enters into negotiations for a first contract with the objective of not only reaching that
first collective bargaining agreement but of establishing a long-term relationship with the
employer. It is the rare employer that welcomes bargaining with a union. Most do so
only under the compulsion of a Board certification and prefer not to reach that first
contract, which would open the door to the sustained relationship that the union seeks.
And the NLRA itself, which requires only that it bargain in good faith not that it reach a
CBA, is the employer's friend. Making matters worse, the Board has progressively
narrowed the scope of the duty to bargain so that once core §8(a)(5) violations, such as
"surface bargaining" and the "making of proposals that no self-respecting union could
accept," have become routine management negotiating practices and seldom generate
IResearch by Kate Bronfenbrenner, Director of Labor Education Research, Cornell
School of Industrial and Labor Relations, establishes that in bargaining units certified by
the NLRB "52% are still without a contract a year later, and 37% are still without a
contract two years after an election." Economic Policy Institute Briefing Paper #235 at 3,
May 20, 2009.
complaints. Moreover, absent tbe rare § I AU) injunction, an employer tbat does bargain in
bad faitb can do so for years before a Court of Appeals finally enforces tbe Board's
Order, and even tben tbe only consequence of its law breaking is that tbe employer must
bargain in good faitb in tbe future. In short, tbe law helps employers wage and win a war
of attrition.
Yet contracts do get settled in tbe majority of instances. One explanation is tbat
the union and tbe employer often are parties to otber contracts and tbat the employer is
afraid to jeopardize relationships at otber locations. Anotber reason is tbat tbe majority
of employers are loatbe to willingly violate tbe law, and, if represented by a management
lawyer who believes in the collective bargaining process, an employer tbat bargains in
good faitb more often tban not will settle a first contract tbat benefits all parties.
This presentation discusses how a union should prepare for negotiations with an
employer tbat is ready to bargain in good faitb, a topic which has received much less
attention tban how to deal witb an employer tbat is negotiating in bad faitb. These
suggestions are my own, ratber tban official policy of tbe USW, but a union which
follows tbese seven steps stands a much better chance of settling a first contract with a
law-abiding employer.
II.
The Seven Steps
1)
Undoing The Damage Of The Employer's "Lawful
Predictions" During The Election
The objective of employer election campaigns is to convince workers to vote
against representation by planting in tbeir minds tbe fear tbat if tbe union is certified their
working lives will actually become worse, not better. Some employers seek to achieve
this end by naked §8(a)(l) threats of plant closure or otber retaliatory action. But
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sophisticated employers seek to achieve the same effect by making statements that
impugn the collective bargaining process itself by predicting that negotiations will lead to
the loss of precious wages and benefits. Some of these statements, for example, ones
claiming that "bargaining starts from zero" or from "a blank piece of paper" are
ordinarily treated as coercive threats by the Board since they imply an initial loss of
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existing wages and benefits that the union must bargain to restore. But the Board
regards as perfectly lawful a statement that collective bargaining is a test of economic
strength and that the employees possibly will end up worse off under a collective
bargaining agreement. 3
This statement in its endless variations is the centerpiece of anti-union campaigns
because it is an employer's dream: a lawful threat that makes employees afraid to
exercise their §7 right to bargain collectively. And because of its endless repetition
during the campaign, the chilling effect continues even after certification and casts a pall
over the bargaining process itself. Consequently, the victorious union's very first task is
to defuse the impact of this NLRB-approved threat by clearly explaining that while
literally true, after all anything is "possible," it is still nonsense because it is very
difficult, shall we even say "impossible," to imagine any contract that a union would
negotiate, and that the members would ratify, that left the employees worse off than they
would be without a CBA.
2 See M., BP Amoco Chemical-Chocolate Bayou, 351 NLRB 614 at 616-617 (2007);
Consolidated Biscuit Company, 346 NLRB 1175 at 1209-1210 (2006), enrd, 301 Fed.
Appx. 411 (6 th Cir., 2008).
3 See, M., Wild Oats Market, Inc., 344 NLRB 717 (2005) [Statement lawful that "in
collective bargaining, you could lose what you have now."]
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2)
Promptly Establishing A Broad-Based Negotiating Committee
The single most important reason why employees vote for union representation is
their desire for a voice in the workplace to put an end to their condition of powerlessness.
The first concrete step in empowering the bargaining unit is the establishment of the
negotiating committee that will work with the staff representative or business agent in the
bargaining of the contract.
Unions differ as to their preferred method of constituting the negotiating
committee with some favoring election and others appointment. But opinion is uniform
that the negotiating committee must be representative of the entire bargaining unit and
must encompass not only portions of the workforce that favored union representation but
also those that were opposed.
3)
Obtaining The Bargaining Unit's Input As To Proposals
Before they were represented, bargaining-unit members were forced to accept
whatever terms and conditions the employer was willing to provide. Resentment of being
in this position of being dictated to is a key part of why non-union employees feel
powerless. In turn, when the union seeks the input of the bargaining unit, it is at once
both obtaining information vital for bargaining and giving the bargaining unit the voice it
seeks
Unions collect information from bargaining-unit members in a variety of ways,
and each has its advantages. The most direct and often most effective form of outreach is
one-on-one canvassing of employees by negotiating committee members. A second
alternative is the conducting of small group meetings by the chief union negotiator, who
can probe and ask questions in a relaxed setting where people feel free to speak. A third
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option is to distribute printed surveys, which ask bargaining-unit members to rank
various bargaining objectives in their order of relative importance. If such surveys are
used, it is vital that the forms contain open-ended questions as to negotiating goals
permitting employees to identify issues omitted from the survey. To maximize the utility
of the information, the survey form should identify the employee's department and/or job
classification. These techniques are obviously not mutually exclusive, and an effective
union might well use all three.
4)
Making The First Information Request
The existing terms and conditions of employment are the starting point for
bargaining a first contract, and the threshold difficulty for a union is determining what
they are. The key is making the right information request, and this request should be
made within days of certification.
With respect to benefits, ERISA's requirement of a summary plan description
solves much of the problem, and a request for all SPDs and 5500 reports should provide
an accurate benefits snapshot. However, as to remaining terms and conditions of
employment, there is no written summary required by law, and some non-union
employers make a point not to reduce their terms and conditions to writing. However,
most non-union employers do have written handbooks, and a request for all handbooks
should yield, at the very least, the employer's disciplinary, absenteeism, vacation, leave
of absence, ADA, and FMLA policies. Handbooks, however, typically are silent as to
wage rates and job classifications, and an explicit request should be made for this
information as well as for any plant rules not found in the handbook. In the event that the
employer claims that it does not maintain wage rates but simply pays each person on the
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basis of individual merit or otber individual criteria, a follow-up request should seek each
person's individual rate.
In negotiations in an established relationship, a union should always request the
employer's calculation of tbe constituent parts of its current total hourly employment cost
(THEC), a composite of its total outlays for wages, active employee and retiree benefits,
and statutory costs. The same is true in a first contract context. All employers, union and
non-union alike, calculate tbis figure, and it should be the very first item in tbe
information request since employment costs are at the heart of most bargaining.
5)
Educating The Negotiating Committee
Most Americans working in a non-union setting have never seen a collective
bargaining agreement, and virtually none have any hands-on experience with collective
bargaining. The same is true as to tbe newly elected or appointed negotiating committee
members, and most union negotiators wrongly assume a much greater level of
sophistication on tbeir part tban actually exists.
Fortunately, tbis knowledge deficit on tbe part of the negotiating committee
provides an invaluable opportunity to properly educate the committee as to tbe nuts and
bolts (and underlying philosophy) of collective bargaining. The best way to begin is to
examine an actual collective bargaining agreement. The ideal example would be a
contract from a mature relationship in the same or similar industry. Each article of tbe
contract has its own purpose, and tbe union negotiator should carefully walk the
committee through the recognition article, tbe non-discrimination clause, tbe
management rights clause, the bread and butter provisions dealing witb wages, hours of
work, and vacations, the clauses treating witb promotions and layoffs, the grievance and
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arbitration article and the related no-strike clause, the union security and check-off
provisions, and the termination article. The objective is to help the committee grasp the
central fact about the CBi\, that it is an integrated whole setting forth a code of conduct
for the workplace that binds the employer, the union, and the employees as well.
It is also vital that the union negotiator educate the committee about the colIective
bargaining process itself. One aspect of this education is a basic introduction to labor
law, including an explanation of the concept of the certification bar and the limitation on
the employer's ability to implement unilateral changes imposed by the impasse doctrine.
An equalIy important aspect of the committee's education is a practical explanation of the
realities of collective bargaining: that it takes time, that it involves the exchange of
multiple proposals, that it involves the gradual narrowing of differences by sincere
compromises by both sides, and, above all, that it requires a willingness to listen and
respond to the other side's legitimate needs.
It is this final lesson which is the most difficult to teach, and it ultimately involves
schooling the committee as to how an employer thinks. First and foremost, the
committee has to learn that an employer thinks "on the margin." That is to say that it
views every union proposal through the prism of how much it will add to its hourly labor
costs, and the THEC analysis provided in response to the initial union information
request is the principal educational tool needed to explain this point. Second, the
committee, which rightly cherishes predictability and protecting employee expectations,
must be made to understand why an employer would want to preserve its managerial
flexibility so that it can arrive at workable compromises of these competing goals.
FinalIy, the committee, which embraces its own "must have" clauses, must be taught to
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acknowledge that the employer also has core aspects of its right to manage that it will
press throughout negotiations and that each side must accommodate the other's need to
attain and protect its "sacred cows" if a contract is to be settled.
6)
Creating The Union's Contract Proposals
Collective bargaining agreements, including first contracts, are typically
negotiated in phases. The non-controversial items are generally negotiated first, followed
by the substantive language articles, and finally the economics and still umesolved
language issues. Many unions in first contract situations, as a way of framing bargaining,
prefer to begin the process by making a complete language proposal. Others prefer to
make discrete proposals as to individual language articles as a way of preserving
bargaining flexibility as the negotiations unfold. Both approaches have strengths and
drawbacks.
However, under either approach, a union still faces the same initial issue: how to
draft contract language that maximizes the chances for employer agreement while
fulfilling employees' reasons for voting for union representation. The starting point
should be the existing terms and conditions of employment, both written and unwritten.
Given that the employer freely implemented these terms on its own volition, it should
have no principled objection to their inclusion in a contract. Many of these terms are
likewise acceptable to bargaining-unit members. Others, such as at-will employment, are
not. Those existing terms acceptable to the members should be reduced to contract
language, and they will provide the platform on top of which the remainder of the
contract proposal is constructed.
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The best source for the remaining terms of the union's proposal should be another
CBA to which the employer is a party, Unless that contract is woefully sub-standard, it
will contain the vital terms ofvoicc, including a just-cause requirement and a grievance
and arbitration system, that are the core reason why employees vote for union
representation. In addition, this CBA will provide concrete examples of the specific
bargaining compromises that the employer has struck with respect to any number of other
terms and conditions of employment. If these compromises mesh with the preferences of
the new bargaining-unit members, they can be imported whole cloth into the union's
proposal, with any modifications for operational differences being tailored as narrowly as
possible. The obvious advantage of this "same employer" language is that it maximizes
the chance for agreement since the language has already been accepted once by the
employer, and the employer will have no principled reason for objecting to its inclusion
in a second contract.
If no "same employer" contract is available, other CBAs are the preferred source
for additional contract proposals. The ideal candidates are well-drafted comprehensive
contracts covering operations of similar size and type of operation (but not direct
competitors), and while most unions do not publicize the source of their proposals it
makes sense to do so if the employer is a well-respected one. Once again, any contract
language must be harmonized with bargaining-unit preferences.
These same preferences are the source of the remaining union proposals, which
should address both problems unique to the employer's workplace and issues common to
other workplaces which are of high salience to the bargaining unit but are not adequately
treated in the contract proposals drawn from other CBAs.
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7)
Obtaining Ratification
American unions voluntarily practice a unique fonn of direct democracy,
membership ratification of contracts, that grants union members far greater power over
their lives in the workplace than they will ever exercise as citizens vis-a.-vis any other
aspect of society. By its very definition, membership ratification, tbe crystal clear power
to say yes or no, is the antidote to the sense of powerlessness that defines the non-union
workplace. And this sense of empowennent is particularly buoyant in newly organized
bargaining units as workers anticipate the opportunity to finally take control of their
working lives.
A right-minded union negotiation team never forgets that all bargaining occurs
against the backdrop of ratification and that in a newly organized unit special efforts must
be made to constantly communicate events at the table, as they occur, so that the
membership both understands the union's bargaining gains and setbacks and fonns
realistic expectations as to the contents of the emerging contract. This need for repeated
communication, in turn, is the opposite of the norm in many established bargaining units,
where the parties routinely agree to blackouts in order to maximize candor at the table.
As a result, management attorneys will often complain that the steady stream of union
communications interferes with the free flow of bargaining, but once the union explains
its rationale, most employers withdraw any objection to the on-going updates on
negotiations.
Once the parties reach a tentative agreement that the negotiating committee can
recommend, the next, and most crucial, step is the preparation of a written contract
summary for distribution prior to the ratification vote. In a mature relationship,
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summaries tend to be brief and are typically limited to the labor relations shorthand
emphasizing the economic package that long-established bargaining units expect. The
approach should be exactly the opposite in a first contact context, and the summary,
while not ignoring the economics, should treat extensively with the language articles and
explain in detail the rights attained in each. Straight talk is more convincing than puff,
and the summary should candidly discuss what was achieved in bargaining and what was
not.
In bargaining units where summaries are distributed, information meetings tend to
be anti-climatic because most members will have made up their minds beforehand.
However, where summaries are not employed, the information meeting is critical to
ratification. Ideally, the contract should be explained by both the chief union negotiator
and the members of the negotiating committee, and it is vital that the negotiating
committee members explain why they are recommending ratification. Ample
opportunity should be provided for bargaining-unit members to not only ask questions
but to speak for or against the proposed contract.
Union constitutions, by-laws, and traditional practices vary widely as to
ratification procedures Most newly organized units involve fewer than 200 employees,
and the norm for smaller units is the holding of a secret ratification vote at the conclusion
of the information meeting. However, unions are free to ratify by means of stand-up
votes, secret ballots held on delayed basis following the information meeting, or mail
ballots, and all of these techniques are employed to varying degrees with mail ballots
predominating in widely dispersed bargaining units.
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In the event that the contract is not ratified, the union should immediately notify
the employer of its intent to resume bargaining and then set about determining the reason
for the rejection. In the ordinary case, the information meeting will provide quite clearly
and loudly the reasons why members voted "no." However, in many instances,
particularly in cases of close votes, the impetus for rejection is far from clear. In these
circumstances, the best approach is active outreach to the bargaining unit akin to that
undertaken prior to formulating the initial proposal, with meetings and surveys explicitly
inquiring as to the contract changes needed to obtain ratification. The best course is to
then make a new proposal incorporating these suggested changes, even if they stand only
a slim chance of being accepted at the table, since a vote against a recommended contract
is often as much the product of a feeling that one has not been heard by the union's
negotiators as it is a rejection of the terms offered by the employer. If these new
proposals are vigorously pursued by the union in subsequent bargaining, even if
unsuccessfully, the next recommended contract will often be ratified because the
bargaining unit is now convinced that the best terms have been obtained.
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