MANEGMENT

COLLECTIVE BARGAINING EXERCISE

(100 POINTS)

I. READ THE FOLLOWING SITUATION AND CURRENT CONTRACT PROVISIONS.

II. WRITE A PROPOSAL INDICATING WHAT YOUR TEAM INTENDS TO OBTAIN FOR EACH ISSUE. INCLUDE:

>> WHAT DOES YOUR TEAM THINK IS A REASONABLE AMOUNT FOR EACH BARGAINING ISSUE? WHY??

>> WHAT ARE YOUR HIGH PRIORITY ITEMS? WHY??

>> WHAT ARE YOU WILLING TO TRADE IN EXCHANGE FOR YOUR HIGH PRIORITY ITEMS? WHY??

>> WHAT ISSUES IN ADDITION TO THE CURRENT CONTRACT PROVISIONS DO YOU PROPOSE? WHY??

(PROPOSALS = UP TO 40 POINTS, DUE APRIL 21, 2016)

III. NEGOTIATE A CONTRACT THAT IS ACCEPTABLE TO BOTH PARTIES. YOU MUST HAVE A CONTRACT SIGNED BY ALL NEGOTIATING MEMBERS BY CLASS TIME, MAY 3, 2016).

IF AN IMPASSE IS REACHED HOWEVER, YOU MUST FULLY EXPLAIN WHAT YOUR SIDE IS PLANNING TO DO. A 25 POINT PENALTY IS ASSESSED IF THERE IS A STRIKE OR LOCKOUT. CONTRACTS WILL BE GRADED ON THEIR COMPLETENESS AND NEATNESS.

(CONTRACTS = UP TO 25 POINTS)

IV. EXPLAIN WHAT HAPPENED DURING YOUR NEGOTIATIONS. THIS REPORT SHOULD INCLUDE:

A. WHAT WERE THE HARDER ISSUES TO NEGOTIATE? WHY?

B. WHAT WERE THE EASIER ISSUES TO NEGOTIATE? WHY?

C. BASED ON HOW THIS CONTRACT TURNED OUT, WHAT WOULD YOU ANTICIPATE HAPPENING WHEN IT EXPIRES? WHAT ISSUES DID YOUR SIDE WIN? LOSE? (BE SURE TO EXPLAIN WHY YOU WON OR LOST ISSUES.) HOW WILL THESE AFFECT FUTURE CONTRACT TALKS? WHY?

(REPORT = UP TO 15 POINTS, DUE WITH THE CONTRACT, MAY 3, 2016

V. GROUP EVALUATION (20 POINTS BASED ON GROUP AVERAGE RATING) ( GROUPS MAY DISCHARGE NONPERFORMING MEMBERS. TERMINATED MEMBERS WILL RECEIVE A "0" FOR THE PROJECT. DUE MAY 3, 2016)

COLLECTIVE BARGAINING

The Melville Printing Company is a seventy year old printing company located in a south central Kentucky. The company manufactures a wide variety of items including brochures, atlases, annual reports, and sales catalogs. Melville has always enjoyed a reputation for high quality and reliability in meeting delivery dates. The company employs 1241 skilled and semi-skilled employees in addition to about 160 management and staff personnel. The currently operate 24 hours per day, seven days a week. The employees rotate on two 12 hour shifts (7 am -7 pm and 7pm-7am).

The work force, consisting mainly of graphic arts, printing, and typographical workers, was organized in 1966 by the International Brotherhood of Printers (IBP). Labor-management relations have generally been good, but some conflicts have resulted in the past few years. While the company has not been struck by IBP, the number of grievances and arbitration cases has risen substantially in the past three years.

Historically, Melville held a sizeable share of the regional market and enjoyed impressive profit margins. However, recent competition has led to a gradual erosion in the past five years. Competition is expected to increase, causing a great concern for Melville's top management. The union has sympathized with Melville's recent sales situation, but has let it be known that they will fight for a considerably stronger contract than they presently have. The company is still profitable with a stable ROA of 4% and posted a net profit of $5,120,000 last year. However, Management feels that it cannot afford to liberalize the current contract to any significant extent. They may even look for possible reductions or more cost sharing with respect to benefits. The following reflects the current contract provisions. The additional information provided comes mostly from a recent pay survey of local employers considered to be in Melville’s relevant labor market.

Last year’s total compensation for the non-exempt employees covered by the contract was:

Hourly pay = $37,154,320

Overtime pay = $4,149,749

Benefits = $11,146,296

Your task is to negotiate a contract between the Melville Printing Company and IBP.

CURRENT CONTRACT PROVISIONS

ISSUE	CURRENT CONTRACT PROVISIONS	ADDITIONAL INFORMATION
WAGES	Average wage = $12.05 PER HOUR Range of $10.85 to $17.95 PER HOUR. Shift differential of $.30 for night shift.	Wage rates for competing companies in the local area average $14.35/hour, with a range of $8.75 to $19.75. Shift differentials of shift, $.50 for nights.
OVERTIME	Premium pay of time and one half for all hours over 40 per week. Also receive premium rate for Sundays and Holidays.	Each union employee averages 185 hours of overtime per year.
LAYOFF NOTICE	Minimum of 2 weeks advance notice for ANY layoff.	Five of the competing companies give 30 days notice. Eleven others give 2 weeks. Another 6 companies surveyed give 60 days notice.
VACATION	Five days after 1 year of service. Ten days for all employees with 2+ years of service.	Average union employee tenure at Melville = 8.5 years. Most (75%) competing companies offer the following: 2 weeks (10 days) after 1 year, 3 weeks after 10 years, and 4 weeks after 20 years.
LUNCH	Thirty minutes allowed for lunch/PAID.	Competing companies vary widely: From 30 minutes unpaid up to 1 hour paid.
BREAKS	Two 10-minute breaks per 8 hour shift. Also 10 minutes for personal clean-up at end of shift (Paid).	Competitors range from ten minute breaks to 20 minute breaks.
HOLIDAYS	Eight paid holidays (to be named in contract)	Competitors average 9 paid holidays.
BEREAVEMENT LEAVE	NONE	Competitors usually offer 3 days for immediate family.
LAYOFF	Need to determine the basis (e.g., seniority) for any layoffs and other policy issues	Research this one.
SICK LEAVE	Receive one half day per month or 6 paid sick days per year. No carry over.	Among competing firms: 5 have 6 days per year, 8 have 12 per year, and 7 have no paid sick leave.
FMLA	Negotiate a FMLA policy	Federal law mandates 12 weeks unpaid.
SUPPLE- MENTAL UNEMP. BENEFITS	NONE	SUB would cost the company an estimated $1000 per employee per year.
HEALTH CARE	Company pays $405/month premium per employee for major medical coverage with 80/20 co-pay with a maximum deductible of $3000. Family coverage available at employee's expense ($275/month premium).	27% of the competing companies pay for family coverage. Most use the 80/20 co-pay system for major medical with maximum deductibles ranging from $500 to $6000.
EAP	NONE	Research this one.
DENTAL CARE	NONE	If company pays, would cost $120 per employee with $100 deductible. Family coverage costs an additional $180 per employee per year.,
PROFIT SHARE	NONE (Provide all important details for any proposed plan!)	If current profit levels are maintained, typical payments to each employee would be about $300 per year with a 25/75 split. Two competitors offer gainsharing incentives.
GRIEVANCE PROCESS	NONE SPECIFIED IN CONTRACT, Employees register complaints with an elected union steward who negotiates with management personnel.	Most other union contracts specify procedures.
PENSION	NONE (Provide all important details for any proposed plan!)	Melville is the only company in the area that doesn't have some form of pension plan.
OTHER ISSUES:	TBA	YOUR OPPORTUNITY FOR ADDITIONAL RESEARCH
CONTRACT LENGTH	Three years	Among competing unionized companies: Three have 3 year contracts, two have 2 year contracts, an one has a 1year

Each part will be graded using the following scale:

A= Demonstrates complete understanding of all concepts. Shows insights and initiative by providing information beyond the text and this handout. Accurately cites all outside research.

B= Demonstrates complete understanding of all but a few concepts. Shows evidence of work beyond the minimum requirements.

C= Demonstrates basic understanding of most key concepts. Provides answers to the parts based mainly on the text and this handout. Limits contract coverage to issues currently stated.

D= Demonstrates confusion on some key concepts, and/or evidence of minimal effort. Employees would probably raise many questions with the contract.

F= Unacceptable work due to confusing explanations of key concepts, major omissions, or other errors which demonstrates a lack of understanding of the concepts or lack of effort.