by Chris SwiecickiWhat Happens When Labor Union Contract Negotiations Break Down?
From time to time, contract negotiations stall between small businesses and their union employees. This scenario can seem daunting for businesses relying heavily on union labor, especially if they are trying to handle negotiations without an employment lawyer.
Employment lawyers help business owners make informed, rational decisions. They explain their rights and responsibilities under federal labor laws and prepare them for the possibility of a strike.
Stay Calm During Contract Negotiations
If negotiations break down, it is essential to stay calm. This may be easier said than done, but remember, there are ways to manage the situation and the goal is to bring the other party back to the table. It is not uncommon for negotiations to hit a few bumps in the road and it is important not to let these setbacks derail the entire process.
Mediation and Arbitration in Labor Union Negotiations
One option to consider if negotiations stall is mediation. This involves bringing in an impartial third party to help facilitate discussions and work toward a resolution. If mediation does not work, a company might consider arbitration. In this process, a third party makes a decision that is usually binding on both sides. Both options can help break the deadlock and move the negotiations forward.
Strike Management During Labor Union Negotiations
When negotiations break down, one of the most significant concerns for business owners is the possibility of a strike. Strikes can disrupt their business operations, impact their bottom line, and strain relationships within their workforce. However, understanding the nature of strikes and how to manage them effectively can significantly mitigate these challenges.
Types of Strikes
A strike occurs when workers collectively decide to stop working to protest against terms of employment, such as wages, working conditions, or other contractual stipulations. Strikes are a powerful tool in the labor union’s arsenal, directly impacting the company’s ability to operate normally.
However, not all strikes are the same. The nature, legality, and impact of a strike can vary depending on several factors:
Authorized Strikes: These are strikes that the union has officially approved following a vote by its members. They are typically organized and coordinated, with clear objectives and demands.
Wildcat Strikes: These are spontaneous strikes that occur without the official authorization of the union. They can be unpredictable and challenging to manage and are frequently the result of worker dissatisfaction. Wildcat strikes can be illegal, especially if they violate the terms of the existing labor contract.
Sympathy Strikes: These occur when workers strike in support of another group of workers who are striking against their employer. This type of strike can extend the impact of a labor dispute beyond the immediate parties involved.
Economic Strikes: These strikes occur due to disputes over wages, benefits, working conditions, or other economic factors. Economic strikes are generally legal, provided they adhere to specific rules and regulations.
Unfair Labor Practice Strikes: These occur in response to an employer’s alleged violation of labor laws or regulations. These strikes can happen anytime and are not limited by an existing contract.
Managing Strikes
Effective strike management is crucial to companies to minimize disruption to their business and work toward a resolution. Here are some strategies to consider:
Preparation: Anticipate a strike and have a contingency plan. This could involve training management and non-union employees to take over essential roles or hiring temporary workers to maintain operations.
Communication: Maintain open communication lines with the union representatives and their employees. Transparency about their position and willingness to negotiate can help to de-escalate tensions.
Legal Counsel: Ensure access to experienced legal counsel to advise executives on their rights and responsibilities during a strike and to help navigate labor laws and regulations.
Negotiation: Continue contract negotiations during a strike. The aim is to reach a resolution that satisfies both parties and ends the strike as soon as possible.
Maintaining Order: In the event of a strike, it is important to ensure the safety and security of all parties involved. This might include coordinating with local law enforcement or private security to manage picket lines and maintain order.
Remember, strikes are a symptom of underlying issues in the negotiation process. While managing a strike effectively is important, the ultimate goal should be to address these issues and reach a fair and sustainable agreement with the union.
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Contract Negotiations: Getting Back to the Bargaining Table
Ultimately, the goal is to get back to the bargaining table. Employment lawyers help guide the contract negotiations toward a resolution that is in everyone’s best interests. It is essential to approach these discussions with an open mind and a willingness to compromise. Remember, the goal is not to “win” the negotiations but to reach a fair and sustainable agreement for both sides.
After all, while a breakdown in labor union contract negotiations can be challenging, businesses navigate this process successfully with the proper legal counsel, a calm demeanor, and a commitment to finding a resolution. Remember, the goal is not to defeat the union but to work with them to agree upon a contract that benefits everyone involved.
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by Chris Swiecicki7 Tips for Preparing for Contract Negotiations
Running a business involves managing risk in many forms, from economic downturns to severe weather. One risk has more influence over a company’s success than any other: how well its leaders manage contract negotiations.
Without skilled, experienced leaders at the table, businesses may suffer financially in employee contract negotiations. They also may settle for less in deals with business partners, or pay too much when buying or renting property.
Many companies minimize risk by engaging an attorney for contract negotiations. Attorneys help businesses with large and small deals, from vendor agreements to merger contracts. When companies follow their attorney’s advice on how to prepare for contract negotiations, they are in a much better position to achieve their goals.
Advice from a St. Louis Attorney for Contract Negotiations
Tennis great Arthur Ashe said, “One important key to success is self-confidence. An important key to self-confidence is preparation.” Business leaders who spend time preparing for contract negotiations are more confident at the negotiating table.
Our firm helps clients gain confidence before negotiations. Here are the steps we recommend for maximizing returns and minimizing risk in contract negotiations:
- Research the other party. Read the company’s website and news articles about it. Search for news of earlier deals and try to glean the terms of the deal. You want to understand the company’s financial position or time constraints on reaching an agreement. This information will help you negotiate from a place of power—one in which you are confident and able to predict how the other party will react to your actions.
- Create and share a draft contract. If your business is making the proposal, develop a baseline draft of the contract, then share it with the other party. The baseline draft includes the most important terms of the agreement, what your company is willing to accept, and room for writing in changes. Present the draft to everyone who will be at the negotiating table in plenty of time for them to review it.
- Break up complicated negotiations. Large companies often face contract negotiations that go on for days. If you expect a long, tedious, process, think about breaking up the negotiations into several components, then agree upon the terms of each part separately. This will reduce stress and fatigue for both parties, resulting in better decision-making and ultimately, better results.
- Prioritize objectives. Decide on which objectives to focus on before contract negotiations begin, using the SMART goal format to put parameters on the goals. Objectives may include your bargaining range with an optimum number, as well as minimum and target goals. The optimum number is where you want to start negotiations. The minimum is the least you will accept, and if the other party does not offer it, your company will walk away. Hitting the target goal is the objective of the contract negotiations.
- Decide which terms are non-negotiable. Meet with your team and agree upon what must be in the contract. Then, when you arrive at the negotiating table, firmly tell the other party about your non-negotiables.
- Determine concessions. Contract negotiations usually include one party offering the other a concession, or trade-off. Negotiators need to know beforehand how to proceed when the other party offers a concession and what trade-offs their own party will offer. Concessions must be managed carefully during the negotiation. By deciding the concessions to offer and accept beforehand, you are decreasing the likelihood of a hasty decision that hurts your position.
- Set your intention for a win-win outcome. There are several styles of negotiating. We recommend the style focused on win-win results because they get better results and lay the foundation for more productive conversations in the future. Set the stage for win-win negotiations by arriving at the negotiating table with your mind set on treating the other party as a valued business partner. When you are respective, cooperative and collaborative, not combative, the other party most likely will respond in kind.
Take your time while working through these seven steps and do not put off preparation. You do not want to feel rushed at any point in the contract negotiations to avoid hasty decision-making.
Preparing for Mergers and Employee Contract Negotiations
Preparation for contract negotiations varies based on the type of contract. Two of the most consequential types of business contracts are merger contracts and contracts with unionized workers.
Details to Include in a Merger Contract
I draw on decades of merger contract experience to guide business owners through preparation of a merger contract. The contract spells out the terms and conditions of the two or more businesses that are merging. The owners will agree to sell all stock and assets to the new company at the price stated in the merger contract. The newly created business will be a single new legal entity.
Follow these steps to prepare for signing a merger contract:
- Determine the value of the other business(es) and your own. You can do this yourself with extensive research or hire a business appraiser.
- Compare the values and decide whether you will need additional resources to invest in the business.
- Make a list of assets and liabilities of both businesses.
- Prepare a contract for the purchase of assets or stock or a corporation.
- Plan how to transfer ownership.
- Create an operating plan.
Ask a contract lawyer to review the merger contract before you transfer ownership.
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Minimizing Risk During Employee Contract Negotiations
Attorneys for contract negotiations advise organizations on two types of employment contracts: individual employee contracts and contracts with employees represented by labor unions.
Companies with unionized employees have many layers of rules to work through that are explained in the National Labor Relations Board’s guidelines on collective bargaining rights. Organizations have a legal duty to negotiate in good faith, but the law does not require reaching an agreement with the union. The consequence of a breakdown in negotiations may be a strike which may disrupt the economy and delay delivery of essential services for weeks.
Organizations minimize conflict with their employees’ unions when they begin preparing for employee contract negotiations months or weeks in advance. Steps to take include:
- Form a negotiating team. Most negotiating teams include one or more labor professionals, a human resources professional, an operations executive, a senior finance executive, and a frontline supervisor.
- Assess organizational and employee needs, then develop objectives for the contract negotiations.
- Draft a new contract. If questions surfaced about certain aspects of the current contract, clarify the matter in the new contract. The same goes for adding solutions to problems that arose with the current contract. Adjust the current contract for anything new such as facilities, more gig workers, or employee training.
- Prepare for information requests. Negotiators may ask for data and other information about the organization to support their requests. Be prepared by anticipating their needs.
Preparation for union contract negotiations also must include creating a robust strategic communications plan. Organizations must take steps to control the narrative and minimize conflict.
If your organization uses contracts for individual employment, preparation can be handled internally with on caveat. Ask an attorney to review all contracts to ensure nothing has been overlooked or misconstrued.
When it Comes to Contract Negotiations, Experience Matters
Every contract includes unwritten rules attorneys understand.
Christopher Swiecicki ensures his clients know what they are agreeing to and that they must abide by them. If they do not understand the contract they sign, they risk a battle in court. Chris’s experience ranks him in the top contract and mergers and acquisitions attorneys in St. Louis. Contact him online or by phone at 636-778-0209 for a consultation on contract negotiations.
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