1

U.S. Union Contracts Centerpiece of U.S. labor relations has long been

union contracts that specify rights and responsibilities of employees, unions, and employers (including wages and other terms and conditions of employment)

Contracts grew out of need to replace managerial favoritism and discrimination with impartial rules based on the job—not on unfair manipulation of piece rates and arbitrary use of layoffs

Most contracts have duration of three years and are re-negotiated upon expiration • Some include re-opener in which parties can reopen

contract during its life to negotiate wage and benefit adjustments only

2

Box 9.1: Major Components of Traditional U.S. Union Contracts

3

Employee Rights and Obligations Four common areas of employee rights

granted in union contracts:

• Just cause discipline and discharge • Seniority rights • Compensation • Grievance procedures

• In return, employees obligated to follow employer’s work rules, supervisors’ directions, and the contract (such as not striking over grievances)

Seniority Normally defined as length of service w/ Er Benefit-status (e.g., vacations) Competitive-status

A factor in selecting ees for layoffs in ~90% of major contracts

“Sufficient ability” / “relative ability” clauses apply Some role in promotion decisions in ~75% of major

contracts Sole factor (“straight seniority”) (relatively uncommon)

Most senior Ee promoted wo/ regard to ability “Sufficient ability”

Seniority determining factor when Ee qualified for job “Relative ability”

Seniority is secondary factor to be considered when other factors equal

Compensation Basic Patterns

Most CBAs for 3 yr duration “Just cause” for discharge required in ~85% Provisions designed to lower health care costs increasingly common

In addition to increasing wage levels, over time Us have introduced innovations such as

COLAs (~50% of CBAs in late 70s, now <20%) Deferred wage increases (~80% of CBAs) Now standard benefits (pensions, health insurance, sick leave, SUBs,

vacations, holidays [median is 11]) Recent Developments

Concessions Reduced (or eliminated) COLAs Lump sum increases (~15% of CBAs) Contingent compensation Two-tier wage agreements (~30% of CBAs)

“Demands for Labor Givebacks Grow More Aggressive” U leaders increasingly in role of selling

concessions to rank-and-file, while cos becoming more aggressive in demands UAW pioneered whole package of Er-provided

benefits – now being dismantled

Source: Wall Street Journal,10/27/05

7

Job Rights and Obligations In blue-collar settings, wage rates are tied to

specific jobs, not individuals (i.e., holder of specific job is entitled to a certain wage rate by virtue of holding that job, irrespective of their individual characteristics)

Certain jobs are entitled to perform certain tasks • Explicit prohibitions against supervisors doing

bargaining unit work

Job and Income Security Unions seek

Notification of introduction of new technology Advance notification of plant closings (beyond WARN Act

provisions) Transfer rights, relocation allowances

Prohibitions against contracting out Most clauses don’t ban, but provide for advance notice,

consultation w/ U, a/o limits on number of barg unit ees laid off, economic conditions involved

Regulation of layoff methods Retraining for those laid off SUB plans Severance pay

Classic conflict between Ees’ desire for security, Er’s desire for flexibility

Management Rights and Obligations

Freedom of mngt to make decisions wo/ involvement of U Unilateral authority when no bargaining

representative in place Restrained only by employment law, labor

markets Bilateral decision-making following selection

of bargaining rep Mngt rights clause in CBA may be

general or specific

Management Rights and Obligations

Two Views re: Management Rights Reserved/residual rights

All rights not covered by specific clause in CBA are retained by mngt

Implied obligations U recognition clause in CBA requires mngt to negotiate

changes in terms and conditions even in absence of express provision covering issue involved

Implications of views in practice If mngt introduces new machinery into workplace, must

this be bargained w/ U?

11

Shop Stewards Shop stewards are employees selected by the

rank and file or appointed by union leadership to be first-line advocates for workers to ensure that contract is not violated

Contracts frequently include clauses in which employers recognize right of stewards to investigate grievances, some contracts specify the number of stewards, grant them special seniority rights (“superseniority”), and indicate that the company will pay the steward for time conducting legitimate union business

Union Security Unions seek U security clause to protect

against being undermined by Er, “free riders,” other unions

Closed shop Requires Ee be U member before Er hires –

illegal under T-H Union shop

Requires barg unit Ee employed specific length of time (not less than 30 days) must become member of U as condition of continued employment

Legally, all that can be compelled is dues payment

Union Security Modified U shop

Any barg unit Ee hired after date specified by CBA must become U member

Agency shop Requires any barg unit Ee who is not U member must pay

service fee to U for representation activities Maintenance of membership

Any barg unit Ee who becomes U member must remain member as condition of continued employment

Open shop Checkoff

Er deducts dues, remits $ to U Avoids workplace disruptions Insulates Ees from U discipline due to nonpayment Provides revenue stream to U

Source: National Right-to-Work Legal Defense Foundation

Union Security Supreme Court ruled in Beck case

(1988) that T-H does not permit U to collect agency fees beyond those necessary to finance CB whenever nonmember objects to use of fees for purposes not directly related to bargaining and contract administration

16

Union Rights and Obligations A central issue in contract administration for

labor unions is duty of fair representation In return for the privilege of being the exclusive

representative, unions have an obligation to fairly and without discrimination represent all of the bargaining unit employees

• This obligation applies to both contract negotiations and administration

Right to Work Laws Pro

Every citizen should have right to work whether or not s/he belongs to U

No individual should be compelled to join private organization, particularly if org uses individual’s dues to support causes individual opposes

Voluntary unionism insures U is responsive RTW states benefit re: economic

development

Right to Work Laws Con

RTW is misleading PR slogan; unions not denying anyone right to seek employment; no difference between U security and other terms and conditions

U has legal duty of fair representation – those not paying dues/fees are “free riders”

RTW states have lower wages, poorer working conditions

Research suggests passage of RTW law leads to reduced U membership (appears such laws don’t simply reflect lesser support for unions)