“Good faith bargaining” – a concept that can be quite simple and extraordinarily complex all at once. The basics as discussed in Part 1 of this Blog series seem clear. The parties must meet at reasonable times. They must bargain over terms and conditions of employment for the bargaining unit. The parties must execute a written agreement once agreement is reached. Simple right? Well, let’s review a few specific situations that fall into the basics, but are not always clear in the minds of business owners.
Unilateral Changes
One of the most common mistakes employers who are obligated to bargain with a union make is implementing unilateral changes with the bargaining unit. It is a difficult pill to swallow, but when you are unionized you cannot make any changes to the terms and conditions of employment for the bargaining unit with agreement from the union. As a result, every change including those necessary for the well-being of the business must be bargained over with the union.
There is a nuanced exception. If you have a regular and long-standing practice of a process that alters the terms and conditions of employment you may be able to continue that practice. Things such as annual bonuses, automatic pay increases, and related items may be practices you can continue without first bargaining. The calculus can be complicated, so consult your labor relations consultant or attorney for a risk analysis.
Duty to Provide Information
One of the good faith bargaining pitfalls employers run into is refusing to provide information to the union. It is instinctual for businesses to protect their business data including data concerning their workforce. However, the law is extremely broad in its mandate that:
“An employer must provide requested information that is “presumptively relevant” to the union’s performance of its role as collective-bargaining representative where the union seeks information concerning wages, hours, and other terms and conditions of employment of unit employees.”
Atlanticare Mgmt. LLC d/b/a Putnam Ridge Nursing Home & 1199 SEIU United Healthcare Workers E., 369 NLRB No. 28 (Feb. 11, 2020)
A company doesn’t have to “open its books” or provide proprietary information not related to the ability of the union to represent and bargain for the employees in the unit. However, a common mistake made by newly unionized employers bargaining for an initial contract with a union is something called a “pleas of poverty”.
A plea of poverty is essentially when the company says it cannot afford the union’s economic demands. A BUSINESS SHOULD ALMOST NEVER TENDER A PLEA OF POVERTY AT THE BARGAINING TABLE. All caps and bold because it is that important. Even if it is true, a business should not plea poverty. You can accomplish the goals you need without it and by going down that road you will be required to allow the union into all your financials – all of them.
Unfortunately, all other information unions ask for that touch on employee terms and conditions must be provided. Chalk it up to one of the major downsides to being unionized – intrusive requests for information.
Is It Hard Bargaining or Surface Bargaining?
Hard Bargaining
You have the absolute right to bargain hard. In fact, you commit malpractice if you fail to bargain hard for the terms the company needs to be successful. The U.S. Supreme Court has held:
“The National Labor Relations Act is designed to promote industrial peace by encouraging the making of voluntary agreements governing relations between unions and employers. The Act does not compel any agreement whatsoever between employees and employers. Nor does the Act regulate the substantive terms governing wages, hours and working conditions which are incorporated in an agreement.
N.L.R.B. v. Am. Nat. Ins. Co., 343 U.S. 395, 401–02, 72 S. Ct. 824, 828, 96 L. Ed. 1027 (1952) (emphasis added)
Bargain hard and get the terms you need. Do not think twice about it.
Surface Bargaining
Hard bargaining is hard. Tautology aside, the message rings true. A lot of work goes into bargaining hard for the terms and conditions you need. What you cannot do is surface bargain and call it hard bargaining.
“Surface bargaining is defined as “going through the motions of negotiating,” without any real intent to reach an agreement.”
K-Mart Corp. v. N.L.R.B., 626 F.2d 704, 706 (9th Cir. 1980)
The Board and courts look to the conduct and motivation of an employer when evaluating whether conduct is hard bargaining or surface bargaining. Additionally, the Board considers the nature of the proposals made by the employer – are they reasonable? If a proposal is so egregious that no reasonable party would ever agree to the terms, the proposal is an example of surface bargaining.
Decision & Effects Bargaining
Good Faith Bargaining and Business Decisions
Business decisions that have no relation to the terms and conditions of employment for the bargaining unit members are not mandatory subjects of bargaining. There are times, however, when a company must make major business decisions that do touch upon the terms and conditions of employment. So, does the employer have a duty to bargain over those major decisions? The answer is a resounding – maybe.
Decisions to subcontract work, transfer work, relocate operations are decisions that may carry a duty to bargain. Many companies are surprised to discover that decisions to sell, merge with another business, close, or cease parts of their operation also often carry a duty to bargain.
the analysis is case-specific and impossible to define in a blog post. It is enough to put it on your radar that these decisions may require bargaining with the union before implementation. Your bargaining representative will help you assess your situation.
Good Faith Bargaining and the Effects of Decisions
The duty to bargain over the effects of major decisions that touch upon the terms and conditions of employment constitutes and much clearer picture. Does the duty to bargain attach to the effects of these decisions? The answer is always – yes.
The rule that indicates no party is compelled to agree to terms it cannot accept in its best interest applies to both decision and effects bargaining. This is a modicum of relief to company leaders reading this post that will interpret the duty to bargain over these items as ceding control of the business to the union. The best
Good Faith Bargaining Impasse
The NLRB defines a bargaining impasse very narrowly. Impasse only occurs when the parties (both sides) determine that further bargaining would be futile. The NLRB considers the following factors in deciding whether a real impasse exists:
- Bargaining history
- Demonstrated good faith of the parties
- Length of the negotiations
- Importance of the remaining issues upon which agreement has not been reached
- Understanding of the parties as to the state of the negotiations
The party declaring impasse must prove it exists, but the trick there is that a union will never declare impasse. This is one of the main reasons why a quick declaration by an employer that the parties are at a good faith bargaining impasse is extremely risky. The NLRB will look to the “totality of the circumstances” when evaluating those five factors above. The weightier the third bullet – length of negotiations – the better the odds of a successful impasse declaration.
Implementation
The reason the NLRB maintains a very narrow interpretation of what a good faith bargaining impasse consists of is because of this last topic – implementation. Implementation is the process by which an employer, who has arrived at a good faith bargaining impasse, forces the terms and conditions of its last best and final offer onto the bargaining unit.
The stakes get no higher than implementation. A well-seasoned labor attorney once declared, “An employer implements its last best final offer at its peril.”
Implementation of terms and conditions upon which the union failed or refused to agree to stabs at the very heart of collective bargaining. The step should never be taken lightly and should always be prefaced by a solid legal opinion (and even a second opinion) because the implementation will most certainly result in an unfair labor practice charge. The liability for such a charge is dependent upon the terms implemented, but likely to be enormous. NLRA has guided several clients through successful implementations. It is a legal right and can absolutely be exercised. But it is fraught with danger. Tread lightly.
Conclusion
The National Labor Relations Act protects employees – workers. It provides several rules for employers and unions, but all those rules are designed to protect the worker. We end where we began. “Good faith bargaining” – a concept that can be quite simple and extraordinarily complex all at once.
A company should not venture into this arena without experienced representatives. Your business negotiating skills may be the best in your industry, but collective bargaining conducted as a business transaction will result in one of three outcomes:
- Complete loss of control over portions of your business
- A terrible union-centric collective bargaining agreement
- Costly litigation of unfair labor practice charges
