Chapter 17: The Enforcement and Administration of the Collective Agreement

1. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 1 Chapter 17: The Enforcement and Administration of the Collective Agreement Employment & Labor Law 7th Edition Cihon & Castagnera

2. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 2 Arbitration Arbitration: The settlement of disputes by a neutral adjudicator chosen by the parties Arbitration provides: A means to resolve contractual disputes relatively inexpensively and expeditiously Flexibility because the parties are free to tailor the arbitration process to suit their particular situation In return for the agreement by each party to arbitrate their dispute, they give up their right to strike or lock out

3. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 3 Interest Arbitration Versus Rights Arbitration Interest Arbitration: Arbitration that is used to create a new collective agreement or to renew an existing agreement Common in the public sector, where employees are generally prohibited from striking Replaces pressure tactics as a means to resolve the negotiating impasse in the public sector Rights Arbitration: Arbitration to resolve a dispute involving the interpretation or application of an existing collective agreement; arbitration that defines the rights and obligations of each party under the agreement Common in both the public and private sectors

4. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 4 Rights Arbitration and the Grievance Process Most grievances are filed by employees complaining about the actions of the employer (or its agents), but management may also file grievances under the agreement Grievance: A complaint that one party to a collective agreement is not living up to the obligations of the agreement Rights arbitration is generally used as the final step in the grievance process Grievance Process: The process set up by a collective agreement to deal with complaints that arise under the collective agreement Grievance procedures vary widely The parties to an agreement can devise whatever procedure is best suited to their purposes

5. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 5 The Courts and Arbitration The collective agreement�s arbitration clause may also affect the right of individual employees to bring employment discrimination suits When one of the parties refuses to comply with the arbitrator�s award or decision after the grievance has been arbitrated, the other party may seek to have the award judicially enforced

6. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 6 Textile Workers Union of America v.Lincoln Mills of Alabama Facts: The Textile Workers Union entered into a collective bargaining agreement with the employer, Lincoln Mills, which contained a grievance procedure including arbitration. The union processed several grievances, but the employer denied them along with the arbitration request. The union then filed suit. The trial court ordered the employer to arbitrate, the employer appealed, and the Court of Appeals reversed the trial court decision. The union then appealed to the U.S. Supreme Court. Issue: Whether Section 301 authorizes a court to order the parties to a collective agreement to arbitrate a grievance Decision: The Supreme Court reversed the decision of the Court of Appeals and remanded the case, saying that if the parties have agreed to arbitration as a means for resolving issues, the parties shall follow it.

7. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 7 Duty to Arbitrate The duty to arbitrate arises from the collective agreement between the parties Continues after the expiration of the agreement if the grievance arises under the agreement: it involves facts and occurrences that arose prior to expiration; it concerns postexpiration action that infringes a right accrued or vested under the agreement; or it involves disputed contract rights that survive the expiration of the collective agreement

8. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 8 Eastern Associated Coal Corporation v.United Mine Workers of America Facts: James Smith worked for Eastern as a member of a road crew, a job that required him to drive heavy truck-like vehicles on public highways. In March 1996, Smith tested positive for marijuana. Eastern sought to discharge Smith. The union went to arbitration, and the arbitrator concluded that Smith�s positive drug test did not amount to �just cause� for discharge. The District Court ordered for Smith�s reinstatement. The Court of Appeals for the Fourth Circuit affirmed. Eastern appealed to the U.S. Supreme Court. Issue: Whether the arbitrator�s award is contrary to public policy regarding drug use by persons in safety-sensitive positions Decision: As both the employer and the union agreed to entrust this decision to an arbitrator, the court affirmed the District Court decision and found no explicit, well defined public policy neglected by the arbitrator.

9. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 9 No-Strike Clauses Judicial Enforcement of No-Strike Clauses Many agreements contain no-strike clauses No-Strike Clause: A provision in a collective agreement by which the union agrees not to strike over disputes of interpretation of the agreement during the term of the agreement Remedies for Breach of No-Strike Clauses An employer may enjoin strikes that violate a no-strike clause when the strike is over an arbitrable issue An employer may recover damages for a breach of the no-strike clause through a suit under Section 301

10. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 10 United Technologies Facts: The union alleged that the employer, United Technologies, violated Section 8(a)(1) by threatening an employee, Sherfield, with disciplinary action if she persisted in processing a grievance to the second step. At the hearing before an NLRB ALJ, the employer denied that it had violated Section 8(a)(1) and argued that this grievance came under the arbitration provision of the collective bargaining agreement. Issue: Whether the NLRB should defer to arbitration under the relevant collective agreement rather than proceed under the unfair labor practice procedures under the NLRA Decision: The NLRB decided to defer the dispute to the arbitration under the collective agreement rather than proceed with the unfair labor practice proceedings.

11. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 11 Olin Corp. Facts: The union representing Olin�s production and maintenance employees staged a sick out after the company suspended 2 employees for refusing to perform a job they felt was outside of their responsibilities. Olin issued warnings to 39 employees that participated in the sick out. Olin also discharged Spatorico, the union president, for at least partially causing or participating in the sick out and failing to try to stop it. The union filed an unfair labor practice grievance, which was referred to arbitration. The arbitrator upheld the discharge. The union then filed unfair labor practice charges with the NLRB. Issue: Whether the NLRB should defer to the arbitrator�s decision and refuse to hear the unfair labor practice charges filed by the union Decision: The NLRB held that the union�s unfair labor practice complaint should be dismissed.

12. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 12 The NLRB and Arbitration The NLRB will refer a dispute to arbitration when: the dispute arose within the confines of a long and productive collective bargaining relationship; there was no claim of employer animosity to the employees� exercise of protected rights; the parties� contract provided for arbitration in a very broad range of disputes; the arbitration clause clearly encompassed the dispute at issue; the employer had asserted its willingness to utilize arbitration to resolve the dispute; and the dispute was eminently well suited to resolution by arbitration The NLRB will enforce defer to an arbitration award when: the proceedings appear to have been fair and regular; all parties have agreed to be bound by the arbitration; the decision of the arbitrator is not clearly repugnant to the purposes and policies of the Act; the arbitrator considered the merits of the unfair labor practice issue: the contractual issue arbitrated was factually parallel to the unfair labor practice issue; and the arbitrator was presented generally with the facts relevant to resolving the unfair labor practice

13. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 13 Changes in the Status of Employers Successor Employers Successor employer must arbitrate a grievance arising under the collective agreement when there is a substantial continuity of identity in the business enterprise and the employer retains a majority of the employees from the former unionized work force

14. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 14 Fall River Dyeing & Finishing Corp. v. NLRB Facts: The Sterlingwale operated a textile and dyeing plant in Massachusetts for over 30 years. When it went out of business, two ex-employees formed Fall River Dyeing and bought the plant, real property, and equipment from Sterlingwale. The union that had represented Sterlingwale�s employees for many years requested to be recognized as the bargaining agent for Fall River and begin collective bargaining, but the company denied the request. The union then filed an unfair labor practice charge with the NLRB. Issue: Whether it is an unfair labor practice for the employer to refuse to bargain with the union of the previous employer Judgment: The Court of Appeals held that it makes no sense to require the union repeatedly to renew its bargaining demand in the hope of having it correspond with the �substantial and representative complement� date, when, with little trouble, the employer can regard a previous demand as a continuing one. The Supreme Court affirmed the judgment of the Court of Appeals.

15. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 15 Ethical Dilemma Immense Multinational Business (IMB) is planning to purchase the entire plant, assets, and operation of CastCo, a small manufacturing company. The employees at CastCo are represented by the International Molders Union, but IMB�s employees are not unionized. IMB plans to maintain most of the operations at CastCo and is considering whether to retain the former CastCo employees as well. What are the benefits of retaining the former CastCo production workers? Do you have any arguments against retaining the CastCo employees? Are there any legal restrictions on the decision whether to retain the CastCo employees? How should IMB proceed here?

16. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 16 Bankruptcy and the Collective Agreement When a corporation files a petition for the protection of the bankruptcy laws, the financial obligations of the corporation are suspended pending the resolution of the issue After the Bildisco decision, Congress amended the Bankruptcy Code to allow the employer petitioning for bankruptcy protection to reject the collective agreement only when the following conditions are met: The employer has made a proposal for contractual modifications, necessary to permit reorganization and treating all interested parties equitably, to the union The employer must provide the union with such relevant information as is necessary to evaluate the proposal The employer must offer to �confer in good faith in attempting to reach mutually satisfactory modifications The bankruptcy court finds that the union has rejected the employer�s proposal without good cause The court concludes that �the balance of equities clearly favors rejection� of the agreement The bankruptcy court is required to hold a hearing on the employer�s petition within 14 days and to issue its determination on the rejection issue within 30 days after the hearing

17. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 17 The Working Law General Motors (GM) and Chrysler both emerged from bankruptcy in the summer of 2009. GM and Chrysler had struggled for years in the face of declining sales, increased foreign competition, and soaring retiree healthcare and benefit costs. In May 2009, the United Auto Worker�s union (UAW) agreed to accept wage and benefit concessions and to eliminate restrictive work rules as part of the reorganization of the company, and also agreed to take GM stock in lieu of half of the $20.4 billion that GM owed to a union-run trust. As a result of the reorganization, a new corporation, the Vehicle Acquisitions Holding LLC, was created to assume most of the assets of the former company. This �new General Motors� is owned by the U.S. and Canadian governments and the UAW Some analysts predict that the UAW�s new role would make the union more willing to work with management to increase profitability, a higher stock price would provide the union-run trust with billions more to cover retiree healthcare costs in the years ahead. Other industry experts feel it will be difficult for the union to give up its traditional focus on preserving jobs for its members rather than increasing profits and share price.

18. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 18 In Re Bruno�s Supermarkets, LLC Facts: Bruno's began as a family-owned grocery business in 1933 and remained until 1995, when it filed Chapter 11 bankruptcy. Bruno's and the union have four current collective bargaining agreements (CBAs) covering employees in various stores. Bruno's contends that no one will purchase all, or a substantial part of, its stores so long as a sale is conditioned on accepting the CBAs with the successorship clauses. The union rejected this proposal. Issue: Whether union's position to reject Bruno's proposal to remove the sucessorship clauses Decision: The court found that the union had good cause to reject Bruno's proposal that the successorship clauses should be removed from the four current CBAs.

19. � 2011 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license distributed with a certain product or service or otherwise on a password-protected website for classroom use. 17 - 19 Bankruptcy and Retiree Benefits From the 1950�s through the 1970�s, employers were willing to negotiate with unions for generous healthcare benefit provisions for retired employees This was particularly true in the automobile and steel industries But from the 1980�s on, the costs of such retiree benefits, known as �legacy costs� became a significant financial burden on the employers The steel and automobile industries began to face strong competition from foreign firms, the costs of medical care increased substantially, and the number of retirees grew