Collective Bargaining

08
CHAPTER

The Definition and Duty

The Statutory Mandate

Collective bargaining is the cornerstone of the National Labor Relations Act (NLRA). It is defined in Section 8(d) as the mutual obligation of the employer and the representative of the employees to meet at reasonable times and “confer in good faith with respect to wages, hours, and other terms and conditions of employment”.1

Crucially, the law “does not compel either party to agree to a proposal or require the making of a concession”.3 The goal of the NLRA is to bring the parties to the table to negotiate a contract that stabilizes the workplace, not to impose specific terms.

The "Good Faith" Standard

The duty to bargain in good faith requires more than just meeting; it requires a sincere desire to reach an agreement. The National Labor Relations Board (NLRB) evaluates a party’s “totality of conduct” to determine if they are engaging in lawful “hard bargaining” or unlawful “surface bargaining” (going through the motions without intent to agree).2

Boulwarism: A famous example of bad faith is the strategy known as “Boulwarism” (named after a GE vice president), where an employer presents a “take-it-or-leave-it” final offer at the start of negotiations and bypasses the union to market the deal directly to employees. In NLRB v. General Electric Co. (1969), the courts held that this tactic, combined with a refusal to modify the offer, violated the duty to bargain because it reduced the union’s role to that of a mere advisor.5

Video 1:

The Duty to Furnish Information

Good faith bargaining requires honest claims. In NLRB v. Truitt Mfg. Co. (1956), the Supreme Court held that if an employer claims it “cannot afford” to pay a wage increase, it must provide financial records to substantiate that claim upon request.7

Inability to Pay vs. Competitive Disadvantage: A critical legal distinction exists between claiming “inability to pay” (which triggers the duty to open the books) and claiming “competitive disadvantage” (which does not). In Nielsen Lithographing Co. (1991), the Board ruled that an employer stating it needs wage cuts to stay competitive without claiming it is currently broke is not required to disclose financial data.8

Unilateral Changes and Past Practice

Generally, an employer cannot unilaterally change mandatory subjects of bargaining (like wages or schedules) until the parties reach a full agreement or a lawful impasse.

The Wendt and Tecnocap Standard (2023): The NLRB recently tightened the rules regarding “past practice.” In Wendt Corp. and Tecnocap LLC, the Board overruled the Raytheon doctrine. Now, an employer cannot justify a unilateral change during bargaining by citing a past practice unless that practice is “regular and consistent” and based on a nondiscretionary formula. If the employer has any discretion (e.g., deciding who to lay off), they must bargain with the union before making the change, even if they have done similar layoffs in the past.10

Subjects of Bargaining

Legal disputes often arise over what the parties are discussing. In NLRB v. Wooster Division of Borg-Warner Corp. (1958), the Supreme Court established three categories of bargaining subjects 11:

Video 2:

Unilateral Changes and Past Practice

1. Mandatory Subjects

These are issues that “vitally affect” the terms and conditions of employment. Parties must bargain over them if requested and may bargain to impasse (strike or lockout) over them.

    • Examples: Wages, overtime pay, shift differentials, holidays, pensions, healthcare, grievance procedures, safety practices, and “just cause” discipline standards.3
  1. Permissive (Voluntary) Subjects

These are legal topics that are not central to the employment relationship. Parties may discuss them, but they cannot insist on them to the point of impasse. Refusing to sign a contract unless a permissive subject is included is an Unfair Labor Practice (ULP).

    • Examples: Changing the scope of the bargaining unit (e.g., adding supervisors), internal union affairs (e.g., how the union votes on ratification), interest arbitration clauses, and placing the union label on products.3 In Borg-Warner, the employer’s insistence on a “ballot clause” (requiring a secret vote on offers) was deemed permissive and thus unlawful to push to impasse.13
  1. Illegal Subjects

These are provisions that violate the NLRA or other laws. They are unenforceable even if agreed to.

    • Examples: Closed shop clauses (requiring union membership before hiring), “hot cargo” agreements (refusing to handle non-union goods), and discriminatory hiring clauses.3

The Bargaining Process

Strategies and Stages

Collective bargaining typically moves through defined stages:

    1. Preparation: Both sides survey constituents and analyze economic data (CPI, industry rates).16
    2. Negotiation: Parties exchange proposals. Negotiators may use Distributive Bargaining (zero-sum, adversarial, “fixed pie”) or Integrative Bargaining (interest-based, collaborative, “expanding the pie”) strategies.19
    3. Tentative Agreement (TA): When negotiators agree on terms, they sign a TA.

Ratification: The union membership votes to accept or reject the TA. Common reasons for rejection include a disconnect between negotiators and members or sudden economic shifts.18

Contract Administration: The Grievance Procedure

Once a contract is signed, disputes are resolved through grievance arbitration rather than strikes. The Supreme Court cemented the authority of arbitrators in the Steelworkers Trilogy (1960):

    1. American Mfg. Co.: Courts cannot deny arbitration just because a grievance seems frivolous.24
    2. Warrior & Gulf: There is a presumption of arbitrability; doubts should be resolved in favor of arbitration unless the contract explicitly excludes the topic.26
    3. Enterprise Wheel: Courts must enforce an arbitrator’s award so long as it “draws its essence” from the contract, even if the court disagrees with the interpretation.26

“Obey Now, Grieve Later”: A fundamental rule of contract administration is that an employee must follow a manager’s order even if they believe it violates the contract and file a grievance later. Refusal to work is insubordination, punishable by discharge, unless the work poses an immediate safety hazard.28

Impasse and Economic Weapons

If good faith bargaining fails to produce an agreement, the parties reach Impasse. The determination of impasse depends on the Taft Broadcasting factors: bargaining history, good faith, length of negotiations, and the importance of the issue.31

Employer Rights at Impasse

Once a valid impasse is reached, the employer may unilaterally implement its “last, best, and final offer”.32

Strikes and Replacements

The right to strike is protected, but the consequences depend on the type of strike:

    1. Economic Strike: A strike over wages or benefits. Under NLRB v. Mackay Radio (1938), employers cannot fire economic strikers but may hire permanent replacements. Strikers who are replaced retain Laidlaw rights: they must be placed on a preferential recall list and reinstated as vacancies arise.34
    2. Unfair Labor Practice (ULP) Strike: A strike caused or prolonged by an employer’s illegal acts (e.g., bad faith bargaining). ULP strikers are protected against permanent replacement. They must be immediately reinstated upon their unconditional offer to return, even if the employer has to fire temporary replacements.34

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Lockouts

An employer may refuse to let employees work (a lockout) to pressure the union.

    • Offensive Lockouts: In American Ship Building, the Supreme Court ruled that employers can use lockouts as a legitimate economic weapon to support their bargaining position.38
    • Replacements: Employers can generally hire temporary replacements during a lockout (NLRB v. Brown Food Store) to maintain operations, but hiring permanent replacements during a lockout is generally viewed as inherently destructive of employee rights and is unlawful.38

References

Statutes and Regulations

    • National Labor Relations Act (NLRA), 29 U.S.C. §§ 151-169.
    • NLRB Rules and Regulations, Section 8(d) (Duty to Bargain).

Supreme Court Cases

    • NLRB v. Mackay Radio & Telegraph Co., 304 U.S. 333 (1938).
    • NLRB v. Truitt Mfg. Co., 351 U.S. 149 (1956).
    • NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342 (1958).
    • United Steelworkers v. American Mfg. Co., 363 U.S. 564 (1960).
    • United Steelworkers v. Warrior & Gulf Navigation Co., 363 U.S. 574 (1960).
    • United Steelworkers v. Enterprise Wheel & Car Corp., 363 U.S. 593 (1960).
    • NLRB v. Katz, 369 U.S. 736 (1962).
    • American Ship Building Co. v. NLRB, 380 U.S. 300 (1965).
    • NLRB v. Brown Food Store, 380 U.S. 278 (1965).

NLRB & Appellate Decisions

    • NLRB v. General Electric Co., 418 F.2d 736 (2d Cir. 1969).
    • Taft Broadcasting Co., 163 NLRB 475 (1967).
    • The Laidlaw Corp., 171 NLRB 1366 (1968).
    • Nielsen Lithographing Co., 305 NLRB 697 (1991).
    • Wendt Corporation, 372 NLRB No. 135 (2023).
    • Tecnocap, LLC, 372 NLRB No. 136 (2023).

Secondary Sources

    • National Labor Relations Board. Basic Guide to the National Labor Relations Act.
    • Practical Law Labor & Employment. Collective Bargaining Basics Toolkit.
    • The Common Law of the Workplace (National Academy of Arbitrators).