Labor Dispute Resolution: Mediation, Fact-finding, Arbitration, and Grievance Procedures -, Exams of Introduction to Business Management

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Ch. 12  Sources of miscalculations o Behavioral factors  Union members more optimistic  The degree to which employees/union members are connected to the social community; disconnections from the outside world are possible (isolations: underground miners)  Nature of work contributes to miscalculations o Militancy as a cause of strikes  During recessions, union's threat of strike is weaker  Strike activity o Occur infrequently  2/3 occur when negotiating a contract  1/3 during the terms of a contract  Companies w/ 1000+ employees and strike causes production/service to stop: 0.2%  Conclusion: during impasses, they are most likely to resolve issues before a strike o Strike leverage: certain industry (sports, Hollywood; because of fans)  Striker replacements o What can happen:  Bargaining power weakens o Controversial strike issue o What does the labor law say?  Yes they can replace them as long as the employer informs union and replacement workers they are doing that o Consequences:  Strike ends  Decertification of union so it dissolve it (50% vote will decide this)  Public pressure o Bargaining leverage  Disney company: try to get public support about Disney's actions o In service-oriented economy and media-intensive environment: more public process  Public opinion can strengthen leverage  Management strategies o Investment and product decisions affect bargaining power and negotiating strategies o Overall human resource strategy " " and could also affect employees' overall attitudes and eventually union's response o Airline negotiations  US Airways: previously US Air (small, regional airline that operated in smaller domestic airports so they had a monopoly) British Airways purchased them and moved away from the smaller airports and lost that monopoly; now in a lot of competition and did poorly; renamed US Airways; had to seek concessions from the union members (lower wages, fringe benefits) in order to survive  Takes 17 months to negotiate contract  Southwest Airline  Linked: competitive strategies; HR policies; and labor negotiations  Family environment  Accepted unionization w/out a battle  Negotiated flexible work practices that supported company business strategy  Takes 6 months to negotiate contract  West Coast Docks o Mgt sought to gain bargaining power through govt'al intervention rather than through the more traditional sources of strike leverage  Issue is over new technologies  Mgt initiated a lock-out (def: the initiative that an employer takes to close operations and lay-off employees after an impasse is reached in contract negotiations  Settled by 2002 and compromise was reached  Union strategies o Steel industry  Comprehensive union-mgt partnership plan (United Steel Worker's "new directions" strategy)  Employee participation in shop-floor problem solving  Profit sharing (or other forms of gain sharing)  Union reps on each company's board of directors (important b/c the BOD is the heart of an org's planning and decision making and union want a part of that  Result: led to negative r'ships, less trust o Historical relationships  Airline labor relations  Southwest Airline didn't fight unionization, so it didn't get impacted too much after 9/11  Other airlines suffered  UPS-Teamsters  United Postal Services  Teamsters union initiated a large and successful strike  International comparison o Strikes play different roles in different countries  Unions may be larger and more political involvement in Europe  In the US, strikes are a tactical response/threat  The performance of fact-finding  Supplement to mediation; doesn't work on its own  Very successful when used when there are internal differences  Inexperienced vs. experienced negotiators  Works better w/ inexperienced negotiators b/c more experienced negotiators put less weight on an outsider's opinions  Less effective in overcoming serious disputes caused by a large gap b/t the expectations of one party and the bottom line position of the other  Interest arbitration  Def: use of third party (arbitrator) who is empowered to impose a settlement on a contract dispute (diff b/t mediation and arbitration, settlement is legally binding)  Terms of the contract (vs. grievance arbitration): this is what's in dispute  Not common in the US private sector  The right to strike vs. interest arbitration  Forfeit right to strike in favor of arbitration  Types of interest arbitration  Voluntary arbitration: a dispute resolution system in which the parties agree to submit differences to arbitration  Compulsory arbitration: a system in which law requires the parties to submit their unresolved differences to arbitration if they can't reach a settlement on their own  Conventional arbitration: process in which the arbitrator is free to fashion any award he deems appropriate (voluntary or compulsory)  Final-offer arbitration: arbitrator MUST choose one proposal or the other and may not fashion their own compromise; can be handled:  Total package basis: choose complete offer by mgt or union on all issues  Issue by issue basis: consider each issue individually  Arbitrator  Can one person or a panel of several  Can be all neutrals or a tripartite:  Representatives of employer  Reps of union  Neutrals  Performance and effects of interest arbitration  Interest arbitration records  Eliminating either extremely high or low settlements  Does it prevent strikes? Not 100% of the time; can help situation  Voluntary arbitration in the private sector  MLB  Master agreement: requires players' salaries to be settled by arbitration if there is a dispute  The KEY to the negotiation of voluntary interest arbitration plans: both parties must perceive benefits by agreeing to arbitration b/c they give up right to strike  Accept arbitration when: the strike costs are high  Combined mediation-arbitration approach: use both techniques; agree to mediate first, then arbitrate if that fails; mediator then becomes arbitrator  Nontraditional dispute resolution  Neutrals (skilled and objective third parties)  Facilitators: facilitate labor-mgt committees  Consultants: how to improve certain work programs  Joint planning or design: new work system, new work plant…  Experimental projects: solving long-term problems in r'ships b/t unions and mgt; improve relations  Nontraditional Roles  Addressing problems: team-building, changing attitudes, increasing trust; on an on-going basis; traditionally: reach an agreement  Specialized knowledge: knowledge about the industry they're working in so they're sensitive to needs of both sides  Time frame: longer b/c they're addressing more issues  Info sharing: long term problem solving requires both sides to share info  Key organizations and agencies involved in impasse resolution  American Arbitration Association (AAA)  Private, non-profit org that facilitates process of arbitration  Maintains lists of arbitrators and make available facilities than can be used for hearings  Performs mostly grievance arbitration but also involved in interest arbitration  Federal Mediation Conciliation Services FMCS  An agency of the Fed. Govt mandated by the NLRA  NLRA requires FMCS be notified at least 30 days before a strike  National Academy of Arbitrators (NAA)  Prof. society of experienced arbitrators  Most cases heard are grievance arbitration  National Mediation Board (NMB)  Administrative agency created by the Railway Labor Act*  One function is to mediate disputes b/t labor and mgt in the transportation industry covered by the RLA*  State mediation and conciliation agencies: variety agencies existing at the state level to facilitate the mediation of labor impasses Ch. 14 1. Contract administration o Def: day to day implementation and application of the labor contract; process of grievance procedures done here o Violation of causes  Both parties must follow clauses in contract  If someone breaks them, certain procedures must be followed o Behavior and attitudes  Intra-contractual disputes: to resolve issues during the contract o Grievance procedures  NLRB: any disputes with wages, hours, terms of conditions, must try to resolve them through G.P. included in the contract o Mgt and union o Competitive environment condition  More pressure from competitors so companies come up w/ supplemental ways to administer contracts to : 1) save time; 2) save resources 2. Conventional contract administration (mgt takes control) o Issues in contract administration  Discipline  Try to save the jobs  Work assignments  Job classification  Individuals personnel assignments  Shift preference (seniority may decide this)  Production standards  Mgt may want increase in production but won't increase salary  Working conditions  Health, safety, comfortable working environment 3. Grievance procedure o Employee-initiated grievance (formal contractual grievance procedure)  Step 1:  Oral discussions ( union steward, supervisor and employee)  Union steward: union member elected to represent workers; duties include collecting fees, soliciting for new members, announcing meetings, receiving, investigating and attempting the adjustment of grievances  U.S. and employee decide if:  Problem has been resolved  Whether contract violation has occurred  Step 2:  Written grievance submitted (production superintendent and line manager)  Steward and mgt rep meet and discuss grievance  Mgt's response to grievance that has been submitted (labor relations staff may be consulted) o Limited industrial disputes  Want our products and services protected/to be able to continue o Public policies compliance 9. How arbitration works o Prehearing briefs (document submitted to arbitrator from each side to explain their side of the argument: summaries, views…)  Views of the issues  Express positions  Describe the evidence o Prehearing stipulations  Prepared instead of briefs  Prepared by both sides jointly  Usually shorter and presents just key facts in a case o The arbitration hearing  Present positions and evidence  Opening statements  Witnesses  Critical component: the evidence that documents past behavior  Closing arguments  Post hearing brief: additional evidence or facts submitted after the hearings are over o The arbitrator's decision  Decision announced after the hearing  Can be written or oral  Summarizes the contentions and claims  Outline the judgment reached  Denies grievance: employee loses job and can't get it back  Usually doesn't award punitive damages 10. The arbitrator's decision criteria o Discipline for just cause  Did employee actually carry out the act mgt claims violates labor agreement?  Whether mgt's discipline is appropriate  Will look into both sides' past behavior  Def of just cause: whether mgt has legitimate cause to take action, esp whether mgt acted appropriately and fairly when disciplining an employee o Progressive discipline (gets more higher for each repeat offense)  Is discipline appropriate? o The importance of past practice  Past cases included 11. Who are the arbitrators? o Expertise in industrial labor relations o Full time or part time, perhaps business or law professors o American Association of Arbitration (AAA) 12. Evaluating the performance of the grievance system o Time and costs  Court litigation vs arbitration case  $1500-5000 (arbitration: fees, time and effort spent, research)  $10,000 (litigation)  Grievance mediation: less expensive alternative to arbitration; resolving disputes w/in terms of contract; effective and costs less time, money and effort; decision non-binding o The effects of arbitration decisions  Delays involved in processing a case  Avg of 9 months  Problems with reinstatement  May have issues w/ mgt and co-workers  May have already found a job  The procedure itself make work against certain results 13. The duty of fair representation o The union has the duty to represent all members of the bargaining unit "w/out hostile discrimination, fairly, impartially and in good faith". o Four related developments  The stringency of the standards the courts have used to judge whether an employee has been fairly represented by unions  The willingness of individual workers to bring claims against unions for failure to represent them fairly  The reluctance of unions to drop grievances of questionable merit for fear of being sued for failure to represent fairly  The resulting rise in the number of court cases b/c Supreme Court says unions must fairly represent employees 14. The Supreme Court Revisits the Issue of Arbitrator Discretion o 2001: Circuit City v. Adams  Adams was an employee of Circuit City who signed an arbitration agreement and filed a lawsuit in court after being fired; Supreme Court ruled in favor of Circuit City because he'd broken the contract  Broadened discretion  Extreme cases: the exception b/c courts will decide if it’s a fair labor practice o EEOC v. Waffle House  Equal Employment Opportunity Commission used this case to serve as an example  WH employee signed arbitration agreement and reported unfair practices to EEOC; they are responsible for investigating and may file a lawsuit on behalf of employee  Pursue relief for victims of discrimination in court; they did and filed suit for violating labor laws (unfair termination)  Supreme Court sided with EEOC b/c they did not have a contract with the employer 15. Should arbitrators ignore external public policies? (laws) o For:  Increased judicial scrutiny of arbitration decisions  They are not lawyers and should not include laws as a part of decision making and the might misinterpret the law o Against:  Advantages of arbitration  Quickness to make a decision so take the time to research the law 16. Alternatives to the grievance procedure in the union sector o Costs and delays o Innovative alternative procedures  Oral grievances (want process to go as long as possible w/out written grievances)  Time allowances are fixed (strict time limits) 17. Expedited arbitration o Speed the resolution of disputes o Bypass steps o Results:  Reduced costs (as low as $55 per party involved)  Grievances are resolved before arbitration (more than half)  On time 18. Grievance mediation o A neutral third party functions as both the mediator and arbitrator o Goal: reduce the frequency of arbitration 19. Conflict resolution in nonunion settings o Grievance arbitration system leads to lower quit rates o "speak up" programs (tell supervisor your problem), employee counseling services, attitude surveys 20. Ombudsman o Role: counsel on how to help people  investigate reported claims; help solve problems and conflicts b/t or among employees, mgt  Grievances, complaints…  Conciliate communication b/t two parties; serves as middleman (parties not in person)  Provide info on one-on-on basis  To mediate b/t parties in person  Provide generic solutions (ex: improved communication)  Arbitrate sometimes