BARGANING

BARGAINING Chapter Seven

Jennifer DaniellLinda AlspaughLabor & Management RelationsProfessor Marc Codd

Bargaining Process

• Preparing to Bargain • Bargaining Structure• Bargaining Power and the Bargaining

Environment• At the Bargaining Table • Bargaining Sub processes and Strategies• Reaching Agreement• The Contemporary Bargaining Process:

Continuity and Change

Preparing to Bargain• One of the goals of the U.S. labor relations system,

they want to allow employees to be able to negotiate their terms and conditions of their employment with their employer as a group, instead of having to take or leave whatever their employers offers.

• “the union at work is a union negotiation contract”

• The process of collective bargaining, employers and unions negotiate terms and conditions of employment and put these terms into written contract.

Preparing to Bargain• The written contracts are also called collective

bargaining agreements. • In the United States these contracts are legally

binding and can last one to five years, the most common is 3 years

• The U.S. union contracts usually include the following subjects:• Compensation: wages, benefits, vacations &

holidays, shift premiums, profit sharing • Personnel policies & procedures : layoff,

promotion & transfer policies, overtime and vacation rules

Preparing to Bargain• More subjects that are included in the U.S. union

contracts:• Employee rights & responsibility: seniority rights, workplace

rules, job standards

• Employer rights & responsibility: management rights, just cause discipline and discharge, subcontracting, safety standards

• Union rights and responsibilities : recognition as bargaining agent, bulletin board, union security, dues checkoff, shop stewards, no strike clauses

• Dispute resolution and on going decision making: grievance procedures, committees consultation, renegotiation procedures.

Preparing to Bargain• There is a timeline of the negotiation process, the

longest portion of the time line is the preparation stage. *Preparation stage: usually begins several months before bargaining begins.

*A team needs to be assembled, for the employer team usually management, for the Union usually elected rank and file

*Preparing for negotiations is collecting information. Managers should collect external benchmarking data on labor costs

*Union negotiating committee will usually survey the rank and file to identify their top priorities, example; wage, benefits, vacations

Preparing to Bargain

• Timeline negotiation process continued • Both sides should thoroughly review how the

expiring collective bargaining agreement has worked, and which sections have created problems.

The following pieces of information form the basis for each side to determine five essential things:

1.What they are really concerned about2.Options for achieving these interests 3.External benchmarks of fairness4.The other sides interest5.Their best alternative to a negotiated agreement

Preparing to Bargain• Sixty days before the current contract expires,

both sides provide official notification to each other and to the Federal Mediation and Conciliation Service that they intent to negotiate a new contract.

• The bargaining teams then set a schedule of bargaining sessions and set ground rules .

• If both side desire a joint training session might be completed at this time.

• Then it is time to bargain.

Bargaining Structure• The organizational structure for the collective

bargaining process.• Bargaining structures range decentralized to centralized.• Decentralized is limited to a group of employees in a

single workplace(meat cutters at a single store, or bus drivers in a single school district)

• Centralized involves numerous occupations and locations • Employers prefer decentralized and tailor contracts to

local situations.• Unions prefers centralized because they can consolidate

their powers. • Compared to other countries the bargaining structure in

the United States is typically decentralized

Bargaining Power and the Bargaining Environment

• Bargaining Power -what happens at the bargaining table reflects differences in bargaining power between labor and management.

• A reason that the U.S. labor laws protects workers efforts in forming a union and engage in collective bargaining is to balance the bargaining power. • If management realizes that it is more costly to

disagree then they accept the proposal• A union strike can be very costly to a company


• Bargaining environment -these are external influences on labor and management , such as legal, economic and sociopolitical, these pressures shape the ability of employers and unions to achieve their goals. -Laws specify what bargaining environments can and can’t do, the dimensions of the bargaining environment apply equally to private and public sector-2 key difference between public and private. 1.In the private sector for example if you don’t like this car dealership for their high price you can go to another, in the public if you don’t like the police in your city you don’t have another choice except to move.


2. Public services are not bought and sold in the economic market, instead the services are determined by taxpayers, voters and elected officials.

•None of this evidence supports that that Public sector has unlimited bargaining power

•Overpaid workers can be replaced by others willing to work for less

•Many laws forbid public employees from striking.

•Public sector managers and employees are disciplined by government budget restraints.

At the Bargaining Table

• Once at the table both sides need to use their negotiating skills to reach an agreeable contract.

• When in the presence of an audience that negotiations can get a little crazy.

• Experienced lead negotiators will try to meet in private in order to come to an agreement without an audience

• Contract costing is a negotiating tool , this is used to evaluate proposals monetary cost. • This often requires making projections on complex

issues, such as health insurance, early retirement, parental issues


• Bargaining in good faith versus bad faith is not always clear

• 4 examples of bad faith• Unilateral change- when employers change wages, benefits or

other terms and conditions of employment with out first bargaining with the union

• Direct dealing- when an employer illegally tries to undermine or circumvent the union by dealing with employees directly regarding bargaining issues.

• Employers refusing to provide information in certain situations to the union that is necessary for representing workers effectively

• Surface bargaining-when an employer or union goes through the motions bargaining, but does not sincerely want to reach an agreement


• Mandatory bargaining items-Wages, hours, and terms and conditions of employment: They are required to bargain over these• Illegal bargaining items are those that would break the

law, racial discrimination, working for less than minimum wage.

• Permissive bargaining items – Drug & alcohol screening, benefits for retirees, plant closings , etc. employers can argue over these items but they are outside the boundaries of the NLRA (national labor relations act & NLRB(national labor relations board)

• Effects bargaining-the decision to close a plant is not mandatory bargaining, but the effects that it has on employees such as layoffs, severance packages, are mandatory issues that must be bargained.

Bargaining Subprocesses And Strategies

• The Four Subprocesses of Labor Negotiations1.Distributive bargaining – Resolving conflicts of

interest; often adversarial “AKA” Zero-sum bargaining.2.Integrative bargaining – Solving joint problems (that

do not involve conflicts of interest) by creating solutions for mutual gains; often collaborative. “AKA” Win-win bargaining.

3.Attitudinal structuring – Managing attitudes and the overall labor-management relationship; often trust-building.

4.Intraorganizational bargaining – Achieving consensus within each group; often complex.


Collective bargaining in both the private and public sectors is a mixture of all four subprocesses for three reasons.1.Mainstream industrial relations views employment relationship conflict as a Mixed motive – a mixture of conflicts of interests and shared opportunities for mutual gain- so both distributive and integrative bargaining are important.


2. The employer-employee-union relationship is a long-term, ongoing affair, so attitudinal structuring is significant.

3. Both employers and unions have constituencies with diverse interests, so intraorganizational bargaining is present.

Reaching Agreement

Negotiations are almost always settled at the last minute. On the union side, the approval proves typically involves a contract ratification vote by the rank and file, Before a ratification vote, unions will usually have a membership meeting in which the terms of the agreement are presented to the rank and file and intraorganizational bargaining occurs as the leaders try to convince the members that the agreement is a good one.

Reaching Agreement

On the employer side, management negotiators typically have the authority to agree to a final settlement , and intraorganizational bargaining takes place before the final agreement. If the contract is not ratified or approved, the negotiators might return to the bargaining table to negotiate a revised contract, or a strike or lockout might occur.

The Contemporary Bargaining Process:

Continuity and ChangeBargaining between unions and employers is one of the important processes of the U.S. labor relations. Institutionally ,collective bargaining serves efficiency, equity, and voice: Efficiency is served by having employers’ interests represented at the bargaining table, equity can be achieved by harnessing employees collective strength to balance employers power and produce fair outcomes, and voice is fulfilled by having the terms and conditions of employment negotiated rather than unilaterally imposed by someone else.

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BARGANING