Collective Bargaining

Collective bargaining refers to the negotiation process between a union (on behalf of the bargaining unit it represents) and an employer to work out an agreement that will govern the terms and conditions of the workers' employment. The agreement reached through this negotiating process is called a collective bargaining agreement (CBA).

The National Labor Relations Act requires a duly elected union and an employer to meet and negotiate over wages, hours, and other employment terms, as well as to negotiate over issues that may arise under an existing CBA. The two sides don't have to reach an agreement, but they always have to bargain in good faith. although neither side is required to make a particular concession, a party that refuses to bend on a single issue or to put any offer on the table might be acting in good faith.

Employers Must Supply Unions With Certain Information

Employers have a clear bargaining advantage over the union in one important respect: Employers have access to more information. Although the union can poll its members to find out what they know, the employer is almost always better informed about a variety of issues, especially the company's financial picture.

To level the playing field a bit, the National Labor Relations Board (NLRB) and the courts require employers to make certain types of information available to the union during the collective bargaining process. For example, if an employer claims that financial problems prohibit it from granting a requested wage increase, the union has the right to request and review documents that support the company's claims. Similarly, employers may have to supply the union with current employee salary and benefit data so the union can base its demands on accurate information.

Mandatory Bargaining Issues

An employer doesn't have to bargain over every conceivable employment issues. However, employers must bargain with the union over issues that are central to the employment relationship, such as wages, hours, and layoff procedures. Employers must give the union advance notice of any proposed workplace changes that involve these issues, if the union requests it. An employer who refuses to bargain or takes unilateral action in one of these mandatory bargaining areas commits an unfair labor practice. At that point, the NLRB can step in to remedy the situation, but the union may also take certain actions against the employee, including a strike.

Given these dire consequences, you might think that there would be a clear list of mandatory bargaining topics included in labor laws. But that's not the case. Although there is general agreement that mandatory bargaining is required on some issues -- including wages, hours, layoff procedures, production quotas, and other substantial work rules -- many other issues fall into a gray area.

Part of the problem is that some subjects may or may not qualify as mandatory bargaining topics, depending on the reasons for the employer's action. For example, if the employer decides to close a plant in order to avoid paying union wages, that might be a mandatory bargaining topic. But if the employer bases its decision on concerns unrelated to the union -- for instance, if the employer's customer base in the area has dried up or the employer can reap significant tax advantages by moving to another location -- the employer might not have to bargain the issue.

What Happens If Employers Act Unilaterally

Before changing a workplace rule or policy that clearly requires bargaining (such as adjusting pay scales or revamping a seniority system), a company must ask the union to negotiate. mandatory bargaining applies whether the changes will benefit or harm workers. In other words, a company cannot give an across-the-board pay raise or offer more generous paid leave on its own initiative without consulting with the union.

Sound silly? Consider that some employers make positive changes on their own to convince workers that they don't need a union. And, some employers might try to disguise controversial changes as a "benefit" (for example, by linking a wage increase to higher production rates). Yet, the process of bargaining on mandatory topics isn't as onerous as it might sound. In the real world, if the proposed change is beneficial, the union it likely to agree to it without a lengthy negotiating session. And, by seeking the union's approval, an employer can avoid a claim that it committed an unfair labor practice.