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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 2 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 2 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."] 3 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 4 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 5 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 6 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 7 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. 8 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. 9 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, 10 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. II 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. 12