Contract Administration

Contract Administration Bringing the Agreement to Life

Grievances: Definitional Issues • Definition: Usually, a perceived contract violation that is submitted to the grievance procedure (GP) for resolution. A formal complaint. Not gripes, grumbling, whining, etc. • Courts have often endorsed broader meaning than just alleged violations of what are clearly contract matters • Common law of the shop • Past practice • External statutes or common law • Implied management obligations • Good faith bargaining obligation includes the requirement that management accept and consider grievances

Grievance Basics • Filing usually limited to workers and unions -- why? • “Comply, then grieve” is the general rule for workers • Most GPs require written grievances at an early stage -- though possibly after an initial verbal presentation • Gives focus, prevents shifting grounds or changing the issue • Provides a basis for precedents • Reduces emotional elements, clarifies objective issues • Practical value also in deterring frivolous grievances • GPs are a key voice institution. Unions aim to give workers a voice at the workplace, and this is a key part of how that works (not just every three years at negotiations!)

Why Do Grievances Arise? • Mainly, to protest perceived violations and seek remedies • Labor agreements are necessarily imprecise • Parties can’t possibly anticipate everything (e.g., “just cause”) • Might anticipate that vague language will lead to different views, but be unable to work out specific agreement. Maybe it didn’t seem worth a strike and probably wasn’t (e.g., “seniority and ability will be considered”) • Outright violations due to ignorance, mistaken interpretations, or needs for expediency (intentional) • But grievances also arise for other reasons • To get something for nothing (“strategists”) • To call attention to problems, whether contractual issues or not • To gain personal attention -- a conspicuous soapbox • To make a supervisor look bad • To build up bargaining chips for later trades

Four-organization study Pay 17% Working conditions 16% Performance and permanent job assignments 16% Discipline 14% Benefits 14% Mgmt. Rights 7% Discrimination 6% Earlier broader-based study found discipline was the largest single category … about 33% Grievances About What?

Grievance Procedure Characteristics • Usually 3-4 steps, each subsequent step involving higher levels of authority for both sides, e.g.: • Step 1: Grievant and/or steward with supervisor (written or oral) • Step 2: Steward or chief steward with supervisor and IR/HR staff rep • Step 3: Chief steward and local pres. with IR/HR head and plant super. • Step 4: Binding arbitration by a neutral third party • Nearly all procedures end with arbitration, but some are “open-ended” (strikes possible), or open-ended on some issues • Important quid pro quo: GP w/ arbitration & no-strike pledge. Language on both often “read together” • Design, scope, and other specifics up to the parties

Grievance Procedures Structures Enable Certain Functions • Primary: To resolve problems close to their source. This is likely to lead to appropriate resolution and commitment of parties to it • Other functions (mostly unintentional) • Provide training for union and ER staff • Politics: Higher-ups’ involvement lends importance to participants and provides a conspicuous role for the higher-ups • “Buck-passing:” Lower-level officials can dodge or duck issues, “kick it upstairs” and say they were overruled (letting others take the heat for bad news)

Clinical approach Find basic causes of problems, not symptoms Stress fairness and communications Stress problem-solving Problems: Fairness not well defined Bad precedents possible by case-by-case focus Fairness and open communication can fuel more grievances Legalistic approach Emphasis on who’s right according to the “letter of the law” (contract) CYA mentality (cover your assets?) Can avoid bad precedents Problems May not address underlying problem Problem likely to fester and resurface Clinical and Legalistic Approaches

Effective GPs: Norms • Clear procedure and participant roles. Waivers of rules (e.g., on time limits) possible by mutual agreement • Supervisors need authority to resolve grievances near their source (but legalistic view often prevents this for fear of bad precedents) • Individual, objective consideration of each grievance to protect individual EE rights

“Horsetrading” and Related Issues • In reality, grievances often get traded off for one another in a “Step 3.5” or “shakeout session” • Both sides want to avoid arbitration costs and risks of an undesirable arbitrator decision • Advocates: A legitimate cooperative effort, sometimes needed to avoid or reduce backlogs • Courts: Union must have some discretion, a “wide range of reasonableness,” in deciding which cases to pursue, drop, or trade. Burden is on individual to show union violated its “fair representation” duty

The Duty of Fair Representation (DFR Obligation) • Quid pro quo the union gets for right to be exclusive bargaining agent • Complexities: Balancing individual rights against majority rights and interests • Common scenario: Grievant feels the union violated its DFR by failing to press grievance or take it to arbitration • Note: DFR suit threats are part of the reason unions press unpopular or questionable grievances

Legal Guidelines for DFR • The union must: • Consider all EEs • Make good faith effort to serve all w/o hostility to any • Exercise its discretion with good faith and honesty • Vaca vs. Sipes case • Union and Co. doctors agreed that grievant should not be put back on the job, so union dropped grievance • Grievant filed DFR suit, lost. Court said: • Union made good faith effort and had reasonable grounds for its decision not to arbitrate the grievance • No absolute right for grievant to arbitrate; union “owns” that right • Burden of proof is on EE to show violation

DFR Legal Matters, continued • Types of conduct likely to be judged violations • Arbitrariness -- no clear reason for decision • Discrimination -- race, gender, loyalty, friend, etc. • Negligence -- poor investigation, incompetence, etc. • Dishonesty -- e.g., a payoff • DFR issue concerns ERs too • Joint liability for DFR violation damage possible • Contributory negligence (e.g., bad investigation, faulty firing) • “Deep pockets theory” (Co. has resources; union may not) • Implication: Co. should try to ensure union does job well, but not interfere in internal union affairs • Key case: Hines vs. Anchor Motor Freight • Drivers allegedly submitted false receipts for reimbursement • Co. fired drivers. Union investigation supported Co. decision • Real culprit: The motel clerk. Co. and union liable for damages

Grievance Arbitration a.k.a. “Rights” Arbitration

Definition and Historical Development • Grievance or rights arbitration: A neutral third party is used to apply or interpret the terms of an existing agreement • Authority comes mainly from the parties’ own agreement. They agreed to this process voluntarily as a way of avoiding strikes, etc. during the course of their agreement • This “institution” was developing on its own, but WW II’s no-strike environment added a big boost. War Labor Board often pushed for its use to avoid strikes that might disrupt the war effort

Legal Status of Grievance Arbitration Clarified via Supreme Court Decisions • Lincoln Mills (1957): Taft-Hartley’s Sec. 301 provides suits for enforcement of labor agreements, including injunctions • “Steel Workers Trilogy” (1960). Three cases involving USWA established policy of judicial deferral to arbitration. Principles: • Courts not to reviewmerits of grievance on appeal • Arbitration is the favored mechanism; when in doubt, courts order its use • Courts will enforce arbitration awards w/o review of merits • More recent refinements and elaboration on legal status (1970s) • Boy’s Market: Courts may use injunctive powers to stop strikes that violate no-strike clauses, despite Norris-LaGuardia (Federal Anti-Injunction Act of 1932) • Buffalo Forge: Injunctive powers can be used to halt strikes only where it’s clear the union agreed to arbitrate the dispute • Misco: Notable in halting trend toward erosion of judicial deferral policy

Some Implications of Legal Rulings • Federal authority backs a private decision-making process wherein courts give great deference to arbitration • Arbitration and no-strike clauses “read together” to determine what the parties agreed to arbitrate and what they agreed to leave outside the no-strike clause. In effect, courts affirmed and strengthened the quid pro quo notion relating GPs and arbitration with no-strike clauses • Labor injunctions return, but in a limited form. In accomodating N-L, courts noted v. different circumstances • Norris-LaGuardia situation: Court power used to squash union formation • Arbitration cases: Court power makes parties honor their agreements • NLRB deferral policy similarly broad, if ULP issues heard and resolved consistent with NLRA

Arbitration Proceedings and Decisions • Who? Anybody the parties choose • Usually chosen ad hoc from AAA or FMCS rosters • Some parties have permanent arbitrators (“umpires”) • Key characteristics of arbitration awards (decisions) • Final. There’s usually no appeal on merits • Binding. Parties must abide by award unless they agree to an alternative solution • Voluntary. The parties agreed to this procedure. It wasn’t imposed by government • Form of decisions: Usually written, reviewing issues, facts, contentions, evidence, contract provisions, etc. to provide a thorough rationale for the “award” (conclusion and remedy) that convinces both sides the arbitrator is wise and fair

Arbitration Proceedings and Decisions(continued) • Arbitration hearings • Similar to court, many parallels • Usually less formal (e.g., witnesses may not be sworn) • Arbitrator has discretion on many matters, but consistency arises from similar backgrounds (mostly law, economics, business), and professional guidelines (e.g., AAA, FMCS) • Major contrasts with courts • Arbitration recognizes on-going relationships, sensitive to parties’ need to live with the decision • Arbitration recognizes “common law of the shop” • Usually quicker, but not always quick • Draws authority from the parties (“bound by the four corners of the agreement”)

Arbitrator Decision Criteria • First and foremost, the terms of the agreement. Some arbitrators favor “parole evidence rule” -- no evidence contradicting the written agreement may be introduced • Past practice. Can even override written contract • Intent of the parties (e.g., “constructive discharge”) • Precedents. Not as strictly bound as courts are, but following them does enhance predictability, and arbitrators will usually give precedents some consideration • De minimus. Trivial matters can be dismissed, but note that cases on important principles can’t be ignored, even if the dollar amount is trivial • Burden of proof: Grievant and union except in discipline

Arbitration in Action:Employee Discipline Cases • Disciplinary actions may be the single largest focus of grievances (35%). Arbitrator decisions shape norms on discipline systems broadly, union and nonunion • Definition: Actions taken by ERs against EEs for alleged rule violations • Added significance: Ultimate form, discharge, is somewhat akin to “economic capital punishment,” for EE • Large share of cases implies major costs for ER and union ($7000 or more per case taken through arbitration?) • Also major indirect costs for ER in ineffective discipline • Historical trend in discipline: More emphasis on human rights, less on property. Also, at-will doctrine eroding

Principles and Elements of Discipline • Just cause -- two key elements • Clear and convincing evidence of violation? • Penalty appropriate for the offense? • Legitimate purposes of discipline • Mainly to correct EE behavior • But also to maintain respect, convey the rules, promote efficiency, and identify unacceptable behavior • Progression of penalties supports corrective aim • Nature of the rules -- what should it be? • Clear and reasonable, with consequences of violations indicated • Are they known to the EE? • “Price lists” help convey nature and penalties

Price List With Progressive Discipline

Evidence and Degree of Proof • Evidence requirements usually less strict than courts • Hearsay, entrapment may be allowed • Tougher standards for cases with serious charges (e.g., theft) • Conflicting testimony • As in court, truth has to be assessed under uncertainty • One general rule: Who stands to gain the most by lying? Other things equal, odds say that person is (usually favors management) • Parole evidence rule noted earlier (some arbitrators). The contract is the final word. Contradictory evidence not allowed. “Change the contract next negotiation” • Standard of proof: Usually the “weight of the evidence” (or preponderance of the evidence). Not “beyond a doubt”

Is the Penalty Appropriate? • Reasonableness (e.g., discharge for chewing gum?) • Past practice. Is there consistency? • Mitigating circumstances. Most common reason for reducing or setting aside a penalty • Management contributed to a problem (e.g., poor training) • Good work record and/or disciplinary history • Improbable circumstances unlikely to reoccur • Union official role deserves extra “slack” in some cases • Due process issues • Written notice and opportunity to be heard • No double jeopardy (being tried twice) or escalating penalties, but initial action may be conditional (“pending further investigation”) • Right to union representation if discipline is likely

Significance and Prevalence of Grievance Procedures and Grievance Arbitration • Significance • Upward communication in a top-down environment • Grievances are often spurs to organizing and important for union day-to-day roles • Costly to management (and union), but also important in encouraging consistency, fairness, and forethought • An alternative to strikes and other costly conflict • A system of “industrial jurisprudence” • A key “voice institution.” Is exit more efficient? • How prevalent are GPs with arbitration? • About 99% of CB contracts include GP, and 97% of these include arbitration (75% in public sector due to Civil Service alternative) • Nonunion sector: Growing use, but arbitration is still rare

Appraisals of GP/Arbitration Systems • Generally regarded as working well in terms of protecting individual EE rights and providing a strike alternative • Problems and criticisms • Creeping legalism, formalism, and slower resolution. Various experiments on-going to recapture its earlier advantages • Limited availability as unions decline • “Horse trading” and other phenomena can weaken value in protecting individual rights • Management: Limits discretion and interferes with efficiency • Unions • Weakens member support by reducing member involvement (via strikes, etc.) -- not a “mainstream” view? • Processes sometimes abused by ERs to weaken unions (financially)

Contract Administration