Labor Relations week 3 discussion
Chapter 9
Contract Clauses and Their Administration
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Learning Objectives
Understand the nature of United States union contracts.
Explain important contractual provisions that attach rights and obligations to employees, jobs, unions, and employers.
Outline how grievances are resolved, that is, how contracts are administered.
Discuss the importance of grievance arbitration in United States labor relations.
Analyze the pressures for changing the nature of United States union contracts and how they are administered.
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Introduction 1
Labor unions and their supporters believe that workplace justice and efficiency are best achieved through written workplace rules enforced by private system of workplace dispute resolution
Under the employment-at-will doctrine, employers are free to establish whatever terms and conditions for employment to discharge workers at any time.
Unions have long sought to protect workers by restricting this absolute authority.
The result: detailed, legally enforceable union contracts back-up by grievance arbitration to resolve disputes.
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Introduction 2
For over 50 years, the centerpiece of United States labor relations has been union contracts that specify the rights and responsibilities of employees
Important to understand their typical content.
Moreover, in spite of the detailed nature of many contract clauses, they can never anticipate or remove every ambiguity for all scenarios that will arise during the life of the contract
Contract administration - Interpreting, applying, and resolving conflicts regarding collective bargaining agreements.
A critical process in United States labor relations that involves rights disputes.
Rights disputes - Disagreements over whether someone’s rights as specified in the contract have been violated.
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United States Union Contracts 1
Workers fought for workplace justice in the early decades of the 1900s
Frequently tried to force their employers to follow impartial rules:
Wages that were based on jobs rather than unfair manipulation of piece rates.
Promotions and layoffs based on seniority rather than managerial favoritism and discrimination.
This was a way of “introducing civil rights into industry [by] requiring that management be conducted by rule rather than by arbitrary decision”.
And instead of worker rights defended by militancy that disrupts production.
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United States Union Contracts 2
Today’s union contracts
Legally enforceable documents that specify the laws of the workplace in great detail.
Some are hundreds of pages long.
Most contracts have a duration of three years.
Some contracts include a reopener clause by which the parties can reopen the contract during its life to negotiate wage or benefit adjustments.
Most contracts are renegotiated upon expiration.
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United States Union Contracts 3
This bureaucratic model has critics
From a managerial perspective rules-based contracts and the system of grievance arbitration that relies heavily on past practices and precedents are viewed as inhibiting flexibility and innovation.
Among some labor activists the bureaucratic system of representation is criticized for achieving stability at the expense of rank-and-file involvement and activism.
This chapter focuses on the path traditionally found in U.S. labor relations: striking a balance between efficiency, equity, and voice through specific rules laid out in union contracts that are enforced through formal quasilegal grievance procedures.
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Major Components of Traditional Union Contracts 1
Table summarizes the major components of traditional U.S. union contracts with their obligations.
| Employee Rights | ...and Obligations |
| Just cause discipline and discharge | Obey work rules |
| Seniority rights in layoffs, promotions, etcetera | Follow supervisor’s orders |
| Compensation (benefits, call-in pay, etcetera) | Abide by the contract |
| Fair hearing through the grievance procedure | Accept arbitrators’ awards |
| Job Rights |
| Job holders entitled to a certain wage rate |
| Specific tasks must be done within the bargaining unit and by certain jobs |
| ...and Obligations |
| Fulfill job standards |
| Union Rights |
| Exclusive bargaining agent |
| Union bulletin board in the workplace |
| Union leader access to the workplace |
| Shop stewards |
| Union security and dues checkoff clauses |
| ...and Obligations |
| Abide by the contract, including not striking over grievances |
| Accept arbitrators’ awards |
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Major Components of Traditional Union Contracts 2
Table summarizes the major components of traditional U.S. union contracts with their obligations.
| Management Rights | ...and Obligations |
| Hire and fire (with just cause) | Abide by the contract, including not making unilateral changes |
| Determine job content and workforce size | Just cause discipline and discharge |
| Establish production standards and rules of conduct | Abide by the contract |
| Decide what to produce and how and where to make it | Accept arbitrators’ awards |
| Grievance Procedure |
| Employees, the union, and management meet to resolve disputes over the application and enforcement of the contract |
| Typically a multi-step procedure in which unresolved grievances are appealed to higher levels in the organization |
| The final step is frequently binding rights arbitration |
| Other |
| Contracts are legally-enforceable (in the United States) |
| Contracts are usually several years in duration |
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Employee Rights and Obligations 1
Four types of employee rights are frequently granted in union contracts:
Just cause discipline and discharge.
Seniority rights.
Compensation.
Grievance procedures.
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Employee Rights and Obligations 2
Employees can be disciplined and discharged only for “cause” or “just cause”
When this provision is in a union contract, employees have the right to insist that there be valid, job-related reasons for discipline or dismissal.
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Employee Rights and Obligations 3
A second category of employee rights pertains to seniority
A traditional union objective is to replace arbitrary or discriminatory treatment of workers with an objective standard to prevent favoritism, manipulation, and abuse.
Widely used in union contracts as a criterion for allocating employment opportunities.
Factor in promotions and transfers with more senior employees having priority over less senior ones.
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Employee Rights and Obligations 4
Third category of employee rights
Unionized workers are more likely than nonunion employees to receive benefits.
Health insurance, pensions, life insurance, and the like.
Numerous collective bargaining agreements contain provisions pertaining to overtime compensation, premium pay for weekends, and rest periods among others.
A majority of private sector contracts give employees the right to reporting pay and call-in pay.
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Employee Rights and Obligations 5
Nearly every United States union contract contains a grievance procedure
Employees are entitled to challenge managerial actions that they feel violate their rights under the contract.
The final step of the grievance procedure is almost always binding arbitration.
Through the grievance procedure, union contracts grant employees the right to a fair hearing when there is a workplace problem.
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Job Rights and Obligations
Union contracts confer rights and obligations to jobs
Unions representing blue-collar workers frequently negotiate wage rates that are tied to specific jobs.
Tries to limit managerial favoritism.
Certain jobs are entitled to perform certain tasks.
Unions seek such job rights because of a concern that the employer might whittle away the union-represented jobs by having supervisors expand their duties.
Subcontracting and outsourcing restrictions try to prevent the loss of union jobs by limiting the farming out of work to other employers.
Management might try to replace higher-skilled jobs with lower-skilled, and therefore lower-paying jobs.
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Union Rights and Obligations 1
Third category of clauses frequently found in collective bargaining agreements gives unions rights and obligation
A recognition clause can help unions maintain their strength by including new occupations within the bargaining unit.
Unions are concerned with maintaining recognition rights if a business is sold or if a public sector operation is privatized.
To facilitate communication between a union and the employees unions negotiate rights for union leaders to:
Use a bulletin board on company premises.
Meet employees at workplace.
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Union Rights and Obligations 2
Union security clauses
Closed shop, requiring the employer to hire only union members (this is illegal under United States labor law).
Union shop, requiring employees to become union members after hired in order to keep their jobs.
Technically this is unenforceable; only dues are required.
Agency shop, requiring employees to pay union dues after hired in order to keep their jobs.
Beck rights: Right to pay less than full union dues.
Workers need to pay only the amount of dues that goes toward collective bargaining and contract administration.
Figuring this out can be complicated.
Right-to-work states ban union and agency shop clauses
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Union Rights and Obligations 3
“Right to work” (equals no union or agency shop clause) is controversial
Unions argue that workers shouldn’t be allowed to be free riders because they are entitled to representation.
Counterargument: workers shouldn’t be forced to pay money to an organization they don’t support.
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Union Rights and Obligations 4
An important 2018 Supreme Court ruling: Janus v. American Federation of State, County, and Municipal Employees
Agency fees (equivalently, fair share fees) are now prohibited across the entire public sector at all levels of government.
This has shifted the terrain of the union security debates in the public sector.
In particular, conservative groups believe that members should be able to resign at any time, whereas the labor movement wants this limited to specific time windows.
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Union Rights and Obligations 5
Union obligations
There are various rights that a union might be granted by contract clauses.
It is obligated to live up to the terms of the complete contract.
Unions usually give up the right to strike over grievances and instead must pursue orderly resolution of disputes over the application of the contract through the grievance procedure.
Unions can be sued for violating a collective bargaining agreement.
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Union Rights and Obligations 6
Duty of fair representation
A union “may not arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion” in a discriminatory or bad faith manner.
Applies to all bargaining unit members, even workers who do not join the union or pay dues.
This obligation applies to both contract negotiation and administration, though it is frequently discussed in terms of contract administration.
This obligation is universal and does not depend on the presence of specific clauses in a union contract.
It derives from the union’s privilege of being the exclusive bargaining representative of the workers.
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Management Rights and Obligations 1
Management rights clauses – makes it clear that management maintains sole authority over traditional management functions
Such as hiring, firing, assigning work, determining job content, and deciding what to produce and how and where to make it.
Such clauses are found in 80 percent of private sector contracts.
Management rights are guaranteed by law in some public sector bargaining laws.
Management rights clauses are even found in collective bargaining agreements in which the employer is a union.
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Management Rights and Obligations 2
Reserved rights doctrine - All management rights not explicitly limited, restricted, or modified by the union contract are reserved by management
Many arbitrators uphold the reserved rights doctrine even if this specific language is not in the contract.
The detailed work rules often found in union contracts are a natural reaction by organized labor to this doctrine
If management retains authority over all issues that are not limited, restricted, or modified, then unions will seek to explicitly limit, restrict, and modify managerial authority where it serves workers’ interests.
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Management Rights and Obligations 3
These limitations, restrictions, and modifications largely represent management’s obligations under union contracts (for example, just cause, seniority rights, etcetera).
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Grievance Procedures 1
Even detailed contract clauses can never anticipate or remove every ambiguity for all scenarios that will arise during the life of the contract
Contract administration - Interpreting, applying, and resolving conflicts regarding collective bargaining agreements (equals grievances).
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Grievance Procedures 2
Possible methods for settling grievances
One party might unilaterally control how grievances are resolved, whether it be an employer, a union, or a judge.
Union contracts reject this approach.
Allow multiple parties to participate in grievance resolution (equals grievance procedure).
This is what is favored in union contracts.
Rejection of the unilateral approach is nearly universal in contemporary United States labor relations
Management is unwilling to concede control to unions, and vice versa.
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Grievance Procedures 3
Grievance procedure - The method for resolving rights disputes and grievances over the interpretation, application, and enforcement of union contracts in United States labor relations that is negotiated into a contract
Unilateral management control undermines the whole point of collective bargaining.
Without a balanced dispute resolution procedure for grievances, workers and workplace justice are at the mercy of employers and markets.
This is the situation that the NLRA and public sector bargaining laws seek to improve upon.
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Grievance Procedures 4
The typical steps in a unionized grievance procedure
Discussions between the employee who has a grievance and his or her supervisor.
If grievance remains unresolved, go to next step.
A union representative and a management official from the employee’s department try to settle the dispute.
If grievance remains unresolved, go to next step.
The employee or union can further appeal to higher level management and union representatives.
If grievance remains unresolved, go to next step.
The union can appeal the step 3 outcome to binding arbitration.
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Grievance Procedures 5
The uses of the grievance procedure:
Provides a fair, orderly and efficient method for resolving rights disputes and enforcing union contracts.
Incorporates accepted standards of justice and due process into the workplace.
Nonunion grievance procedures can lack due process protections.
Employers and unions benefit from continuity, consistency, and a prescribed channel of communication.
Gives unions an avenue for pressuring management to further their bargaining goals.
Note: Formal grievances may be inevitable in unionized workplaces, but the rate at which they emerge is not
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Grievance Arbitration 1
Rights arbitration - Ensures that the grievance process is fair and respects workers’ rights
This is also called grievance arbitration.
Involves a hearing before a third-party neutral (the arbitrator), who issues a decision that is binding on the parties.
Focuses on rights disputes.
Nearly all contracts in both the private and public sectors include binding rights arbitration as the last step of the grievance procedure.
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Grievance Arbitration 2
The legal support for grievance arbitration: Supreme Court rulings ensure the viability and importance of grievance arbitration in United States labor relations
In 1957 the Court ruled that if a union contract contains binding arbitration as the final grievance procedure step, the employer is legally bound to adhere to this agreement and submit unresolved grievances to binding arbitration.
Steelworkers trilogy: The collective reference to the decisions taken by the Court in 1960, all involving the United Steelworkers of America.
Provide strong legal support for the grievance arbitration process.
The supremacy of grievance arbitration decreases when the grievance overlaps with employment laws and public policies.
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Grievance Arbitration 3
The quasijudicial nature of grievance arbitration
The arbitrator’s sole job is to interpret not adapt or modify the contract.
Grievance arbitration is not a problem solving exercise.
The arbitrator is limited in methods and solutions.
Cannot be creative; rather, needs to stick to the contract.
An arbitration hearing is like a courtroom hearing, and extensive preparation by both labor and management advocates is important
If the grievance is upheld, a remedy is also awarded.
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Grievance Arbitration 4
Interpreting ambiguous contract language
The arbitrator’s task is to interpret the contract and apply it to the situation at hand.
Disputes for which the contract is clear are likely to be settled early in the grievance procedure, so arbitrators frequently confront difficult and ambiguous matters of interpretation.
Arbitrators’ decisions are based on the common law of the workplace
The written rules and unwritten customs developed in each workplace by the union contract.
Contractual language, intent, and past practices.
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Grievance Arbitration 5
While there are many positives, there are also criticisms of grievance arbitration
The bureaucratic nature of traditional grievance procedures and the importance of stewards, union officials, and attorneys rather than individual workers are attacked by labor activists for stifling rank–and-file involvement in unions.
It can be lengthy and costly.
It can excessively legal, formal, and reactive.
Perhaps also need proactive problem solving in constructive labor-management relationships.
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Employee Discipline 1
One of the most important areas of contract administration is employee discipline and discharge
Employers particularly want to be able to discipline and terminate employees who are substandard performers.
Employees do not want to lose their jobs unfairly.
Most union contracts specify that employees can only be disciplined or discharged for just cause
Just cause - There must be valid, job-related reasons for being disciplined or fired.
Arbitration precedents have developed standards.
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Seven Tests of Just Cause 1
Did the worker know the consequences of his or her conduct?
Was the rule, order, or standard reasonably related to the orderly, efficient, and safe operation of the employer’s business?
Was the alleged violation thoroughly investigated before discipline?
Was the investigation fair and objective?
Did the investigation reveal convincing proof of guilt?
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Seven Tests of Just Cause 2
Was the employer’s discipline non-discriminatory?
Was the discipline reasonably related to the worker’s record and the severity of the conduct?
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Employee Discipline 2
An employee’s rights to representation
The Supreme Court has interpreted the right of employees to engage in concerted activity for mutual protection to mean that an employee who believes that discipline will result from a meeting with management can insist that a union representative be present.
This is called an employee’s Weingarten rights.
The union representative is entitled to assist the employee but not to obstruct reasonable questioning by the employer.
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Do These Contract Clauses Matter? 1
What effects do these contract provisions have?
Chapter 2 reviewed the key research on what do unions do.
Whether these effects are interpreted as the unfortunate product of monopoly power or as the fairness-enhancing result of a more balanced employment relationship depends on the school of thought used to analyze the employment relationship.
Unions also bring grievance procedures that end in binding arbitration to the employment relationship
The basic statistics of these grievance procedures show that they provide due process protections to employees.
Analyses of what happens to individual grievants and their supervisors are less favorable.
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Do These Contract Clauses Matter? 2
What about important effect on organizational performance?
Many aspects of union contracts are predicted to reduce productivity.
Control gap: The difference between restricted managerial control in unionized and complete unilateral control in nonunion workplaces.
Might be more important than the wage gap in explaining employer opposition to unions.
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Do These Contract Clauses Matter? 3
But grievance procedures, seniority provisions, just cause, and other fairness-promoting provisions might increase morale, reduce turnover, and improve productivity
The overall evidence is mixed.
Effect of unionism on productivity is determined by the specifics of each situation, including whether managers are accommodating or confrontational.
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Nonunion Workplace Dispute Resolution 1
A critical difference between union and nonunion United States workplaces is the nature of dispute resolution
Many nonunion workplaces traditionally lacked formal dispute resolution systems - Open door policies.
So by default they relied heavily on managerial control.
Employees discuss their concerns and complaints with their managers.
Employees who are dissatisfied by the managers’ responses are free to quit.
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Nonunion Workplace Dispute Resolution 2
Other elements are increasing being added to supplement open door policies
Ombudsperson - Neutral facilitator between employees and managers who helps them resolve workplace disputes.
Peer-review grievances - Can be appealed to a review panel in which employees comprise the majority of the panel members.
The use of mandatory arbitration instead of the courts to resolve employment law claims.
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Nonunion Workplace Dispute Resolution 3
Reasons for increased adoption of nonunion workplace dispute resolution:
Formal dispute resolution procedures can be part of a human resource management strategy to increase organizational commitment and performance by treating employees fairly and identifying problem areas.
These procedures might be implemented to try to avoid costly lawsuits.
Implementation of a grievance procedure in a nonunion workplace might be part of a union substitution strategy to prevent unionization.
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