Collective Bargaining Agreements 101
A collective bargaining agreement (CBA) is a written contract that lays out the terms of employment between an employer and the labor organization authorized to deal on behalf of a particular group of employees. CBAs are the result of union-management negotiations, and they have the force of law once the final draft is agreed upon, signed and ratified by the union members.
The CBA is essentially a contract among the union, the union members and the employer . Frequently, it also enshrines the terms of an employer’s wage and benefits obligations to employees. In the case of a unionized subcontractor, the master labor agreement—along with any addenda negotiated between the subcontractor and the union—is the CBA that governs all subordinate CBAs between the union and the employer and its subcontractors (i.e., the SCA or DBA); a CBA is subject only to the terms and conditions already negotiated and agreed to with the construction union that represents the employees of the contractual employer.
Major Participants Involved in the Negotiation Process
The primary parties to the negotiations of collective bargaining agreements between unions and general contractors are, of course, the union and the contractor. However, other players are generally involved in the process. The entire negotiation process is undertaken by the management team of each of the contractors. In larger locals, each of the trade unions will have a business manager or financial secretary, and the management team will be made up of these individuals from the union locals. Depending upon the craft, geography and jurisdictional practices, we have seen anything from the negotiating teams of one representative of management and one of union’s counsel to teams of upwards of 20 individuals from each side.
Other parties in the process may include the Committee Secretary or Business Manager for the District Council, the District Council Fund Administrators, and the International Union Representative. It is common for general contractors to consult with The Contractors Association of America, Inc., the National Electrical Contractors Association, or the Eastern Specialty Contractors Association on contract language and jurisdictional matters. As a consequence, the involvement of the association representatives on either side may be necessary.
Representatives of Unions and Their Role
The union’s representative plays a crucial role in the negotiation process, acting as the direct link between the union, its members, and the contractor. They are responsible for ensuring that the collective bargaining agreement (CBA) accurately reflects the needs and interests of its members, and invariably lead the negotiations in these discussions.
In order to effectively represent the union’s interests, the representative is expected to have a strong understanding of relevant labor laws, previous CBAs, and the prevailing concerns of the workers they represent. Before any negotiations begin, the union may engage in internal discussions or meetings to establish its negotiating strategy, which will serve as the blueprint for their proposals to the contractor in the CBA discussions.
The contract negotiations themselves require the representative to use a combination of interpersonal skills, legal knowledge, and out-of-the-box thinking to ensure that the final agreement is fair and comprehensive. Throughout the negotiation process, the representative also serves as liaison between the union and contractor, communicating any relevant information back to the workers.
Compensation and benefits are two of the most significant points on which the representative focuses during CBA negotiations, although all stipulations are up for discussion and consideration – including those that may seem less important or fair. At various points in the process, the representative may encourage the union to engage in unofficial mediation through a neutral party, request direct discussions with the contractor, and call for timetables, strict deadlines, or other specific arrangements in order to keep the process moving forward.
Representatives may take advantage of developments in the labor market to strengthen their position, for example; they may draft proposals beneficial to the employer during periods of low unemployment in order to avoid any unnecessary upwards pressure on wages. As the negotiations progress, the representative must be willing to make necessary compromises to maintain the peace, while still attempting to secure the best terms on behalf of workers.
Ultimately, it is the responsibility of the representative to ensure that the CBA reflects the need of its members in every way so that the contractor can offer competitive employment terms. By staying organized and strategically discussing each element of the CBA, the representative is able to work towards the best outcome for the union.
Negotiation Tactics Employed By Contractors
A contractor is likely to arrive at the bargaining table with specific strategies and a pre-determined set of demands or requests. In the years leading up to current times, many contractors surveyed unionized workers for input on future wage increases and benefits packages. However, as the economy has deteriorated, many contractors may be faced with a different problem. When a substantial numbers of disadvantages are present, such as low proposal margins, fluctuating material availability and low profit margins, contractors may be unable to offer any raises to unionized workers in contract negotiations. In these negotiations, unions will argue that contractors should be able to compensate their employees at least at a rate equivalent to that which existed during a more prosperous time. Therefore, they will push for a return to those previous rate levels. In these situations, contractors should be prepared to present a clear and specified plan for how to revive business profitability. Contractors may also suggest potential ways to cut costs, such as through increased business efficiency or productivity. By presenting concrete proposals demonstrating how a company will attempt to reach stability and profitability, contractors may be able to address undue union opposition to static wages during negotiations.
The Role of Legal Counsel in the Negotiation Process
The role of legal advisors in this process is critical. The lawyer’s obligations regarding the covenant are numerous and include ensuring that the covenant does not violate any laws, to review the covenant for problems with enforceability and to address the enforceability of the covenant. Legal advisors also advise on public policy implications for the contractor, including whether other jurisdictions would enforce the clause , and if it is in the public interest. In addition, a lawyer should ensure the covenant is in accordance with precedents. With a skilled legal advisor who understands both labor relations and the public policy considerations that impact the effort, clauses can be drafted that both protect the contractor and have substantial rationale to support them in being followed since they are in furtherance of public policy.
Negotiation Trials and Tribulations with Contractors
Complicating factors both economic and industrial-specific impact the negotiations process. In terms of economic impact, the extent of the relationship between the contractor and the signatory agreement is an obvious early consideration. The scope of the agreement determines the impact of settling disputes, administering grievances, processing arbitrary claims, and ultimately, providing payment of contributions. The contractor’s financial condition exacerbates the problems. Contractors commonly operate on tight margins such that an unexpected liability or an unanticipated increase in contributions can dramatically impact their ability to service their obligations. Short of litigation, and more often than not, the contractor or subcontractor has no viable alternatives for pursuing claims for indemnification or for contribution from co-employers or joint employers. Moreover, the pressure from workers and employers and the physical demands of the industry are unique. Traditional rules of thumb relating to increases, are hard earned and jealously guarded. Particularly on a construction site, there is often a prevailing do-it-yourself attitude: waste no time working out problems; get on with the work. People just want to work. And contractors want to pay them so they work. However, while the magnitude of the work may give contractors leverage in negotiating agreements, it may also provide leverage to the union in terms of increasing their involvement in or control over the workplace. Overall, the negotiation of terms for the collective bargaining agreement needs to be accomplished in consideration of the broad range of obligations and benefits arising under the industry collective bargaining agreement and the related trust agreements. Working through the obligations and benefits prior to the start of work, informing the workers, certifying hours, and assuring payment are time consuming and can easily become necessary distractions from completing the work. As a result, it is sometimes challenging to convince prevailing wage contractors who have been working independently to freely commit to the same obligations and benefits.
Examples of Successful Negotiation
Several successful case studies have illustrated the appropriate approach for negotiating a collective bargaining agreement with a contractor. In an international agreement, the U.E. Local 7540 entered into a collective bargaining agreement on June 2, 2007, which governs clerical and support employees at all U.S. and Canadian stores of Rouses LLC, a subsidiary of Netherlands-based Albert Heijn B.V. An international framework agreement was signed on February 25, 2009, by U.F.C.W. Locals 888 and 663 with retail food giant SUPERVALU INC. The framework agreement permitted Locals 888 and 663 to negotiate their own agreements under a specific new process. On September 1, 2008, Locals 888 and 663 signed a collective bargaining agreement with SUPERVALU INC. The new agreement covers more than 800 workers at 17 stores located in Maine, New Hampshire and Massachusetts. It does not require the company to bargain with the U.F.C.W. at any more of its stores.
Predictions for the Future of Collective Bargaining
In addition to the traditional methods of collective bargaining, a new trend is the emergence of technology-enabled bargaining techniques, which offer greater speed in the bargaining process and a sizable difference in the cost of the process. Commonly called cloud-based bargaining, this new technique allows a contractor and a union to have a dozen or more people from both sides write in various articles and separate proposals of a labor contract on a screen or at their computers, in real-time. It allows everyone involved in the bargaining to see what others are writing and to use it for their own negotiations. In this method, each party can see the other party’s possible acceptance or rejection of a proposal and take steps to come closer to agreement with the goals of the other party. If the contractor and union have segmented wage scales, the bargaining is in real time, in seconds, rather than weeks when they must meet and confer to determine the reaction to the proposal by the other party. The parties from one employer may also have people from the different divisions of the contractor that are affected by the labor agreement, writing separately as to their concerns and proposals. While cloud bargaining is not very common , it is becoming less rare by the day and may become one of the most popular and money-saving techniques in the future.
Another unusual alternative method to traditional bargaining is arbitration of the terms and conditions of the subject labor agreement. An arbitrator is jointly selected by the parties for this purpose and he/she decides on the disputes after hearing evidence and arguments from the parties. Once he or she issues a decision, it is final and binding and the parties have no chance to appeal. Today, the parties are actually sharing that expense as they would in normal negotiations. This new prototype for bargaining has been slow to catch on, but it is not clear what will happen in the future with this experiment.
Another visible trend has been with determining how to use multiple employers and multiple unions in a collective bargaining environment. In addition, the unions are forced by law to disclose their books and how they are expending dues, and other financial benefits to its members.
I anticipate that in the future, employers and union officers will have to learn to deal with the new technologies that will be used in the workplace as they are required by law or developed by the workplace that will be addressed in collective bargaining and through the National Labor Relations Board rules and regulations.