For many employers with union represented employees, their collective bargaining agreements did not foresee what 2020 had in store. As the country continues to claw its way out of the Covid-19 pandemic, employers with unionized workforces must commit to developing their best negotiating strategies to navigate labor relations during these times.
All sides agree that maintaining a safe workplace is an obvious top priority, with preservation of economic livelihoods next. But employers also must balance safety concerns with long-term economic planning in uncertain times. Here are the keys to winning on both fronts.
Know Your Collective Bargaining Agreement and Relationship
You can’t know where you’re going if you don’t know where you’ve been. A key to charting the proper course in labor relations is understanding the sources of management rights in the collective bargaining agreement and how those rights have been implemented in the past.
Employers should be asking themselves, how has the union reacted to unilateral implementation of changes to wages, benefits, and other terms of employment in the past? Has there been litigation or arbitration over these issues? How did negotiations play out following past calamities such as 9/11, the 2008 economic collapse, or any local natural disasters? Has there been a recent change in union leadership?
If the union has been generally passive in the past, you may have a lot of leeway for decisions regarding return to work now. But employers must be mindful that management rights are not limitless while at the same time utilizing strong management rights clauses if they exist.
Does the CBA Have an Epidemic or Catastrophe Clause?
If your CBA contains such clauses, evaluate their scope to determine what economic relief they provide. Most CBAs do not contain a pandemic/epidemic clause allowing an employer to cancel the agreement or make drastic, unilateral changes, and many do not contain any kind of broad catastrophe or force majeure clause that would suspend bargaining or contractual obligations as a result of the Covid-19 pandemic either.
Even if your CBA lacks such stand-alone clauses, many CBAs make reference to acts of god, natural disasters and other circumstances beyond the company’s control within other CBA provisions that may provide management with more contractual flexibility. This may give management the the ability to unilaterally alter schedules, wages, leave, and other terms and conditions of employment. It is crucial to identify these provisions and understand the history of their use in prior emergencies.
Past practice and bargaining history is critical to assess whether management can or cannot take certain actions based on such provisions.
Can You Afford Wage or Benefit Increases?
Even if your company has a broad management rights clause, unilateral action on wages and benefits will likely be a nonstarter and will almost certainly result in arbitration or litigation with the union.
If your business simply cannot afford scheduled wage and benefit increases, you should consider offering alternatives, such as increased time off, postponement of wage increases, lump-sum wage increases, or tying wage increases to certain performance metrics. The best alternatives will depend on the employer and the workforce, but the goal is to determine what will persuade valued employees to stay while also stabilizing the long-term viability of the business.
A key to this analysis is understanding the relevant sector of the labor market before proposing any alternatives, and compiling data to support the analysis. Most importantly, employers should be prepared to explain the rationale of any alternatives and be transparent about relevant information and data that supports the proposals, including how long any changes may be expected to last.
Maximize the Management Rights Clause
The pandemic quickly taught us that survival requires adaptability. For employers actively involved in negotiations, it is vital to ensure that your management rights clause is sufficiently broad to provide flexibility to respond to changing circumstances.
If your company already has a contract in place, management must maximize its use of the management rights clause to meet the moment. In doing so, be mindful that the National Labor Relations Act allows an employer to act independently on certain issues where the CBA is silent. Employers should not hesitate to act where the contract allows action.
Most CBAs contain a management rights clause that can be maximized in the current climate to allow companies the flexibility to effectively respond to the workplace safety challenges and economic turbulence that the pandemic has created.
But this is no time for reactive or sloppy labor relations. Strategy and preparation are key to a winning economic and safety strategy more so than ever. With intelligent, adaptive labor strategies, companies can meet their challenges and ensure long-term viability and vibrance for the company and its workforce.
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Michael J. Volpe is a partner and co-chair of Venable LLP’s Labor and Employment Group in New York.
Benjamin E. Stockman is a counsel in Venable LLP’s Labor and Employment Group in New York.
Danielle A. Lawrence is an associate in Venable LLP’s Labor and Employment Group in New York.