978-0538468077 Chapter 5 Solution Manual Part 4

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99. CASE: THE GIVE BACK: A CASE OF UNION BUSTING

I. OVERVIEW

Three years ago, Local 974 of the United Tireworkers of America made signi,cant contract

concessions to the North American Tire plant in Bailey, Georgia. The union concessions were made for

the company’s economic survival and for the plant to remain open. Now, as the U.S. economy was

struggling to recover from what some had called the worst recession since the Great Depression, North

American Tire and its union was back at the bargaining table. While the U.S. economy had shown some

signs of recovery, the union was not looking to give back again but to recover some of what was given up

in previous negotiation. The union’s position was that its previous concessions had facilitated North

American Tire’s survival and that it had already done its part to ensure the company’s viability. However,

the company had other goals for negotiation.

II. OBJECTIVES

Possible learning outcomes for students include:

1. Introduce the students to legal issues associated with continuing operation while

the employees are engaged in a strike.

2. Introduce the students to the collec3ve bargaining process.

3. Instructors may also use this exercise as an opportunity to introduce students to the

Employee Free Choice Act, which if passed as currently written would drama3cally

alter the Union Representation election Process and initial bargaining over the terms

and condition of the ,rst contract.

III. DISCUSSION

The case presents a situation involving a labor/management impasse that has resulted in a

strike. The union is looking to recoup concessions made in the previous contract when the company

appeared to be in ,nancial trouble. Pro,ts are now up, and the union expects to recover what the

workers gave back in the previous nego3a3on. Management, on the other hand, is still faced with a

very compe33ve worldwide industry with many competitor constantly looking to cut labor cost.

The decision by management to continue operation during the strike is the focal point of the

case. Under US labor law, the use of strike replacements during an economic strike is legal. The strikers

have only limited reinstatement rights to their jobs. If the national Labor relation Board (NLRB)

determines unfair labor practice allega3ons of bad faith bargaining are valid, then the strike would be

classi,ed as an unfair labor practice strike. Striking workers would have full reinstatement rights to their

jobs. Strike replacement workers would have to be terminated.

IV. ANSWERS TO INCIDENT QUESTIONS:

1. What are the pros and cons of the ,rm’s strategy of hiring replacement workers?

The strategy is legal as long as the ,rm continues to negotiate with the union. Economic strikers

may be permanently replaced under current labor law. continuing operation during a strike certainly

On the nega3ve side, the public relation fallout could be a problem for the company. If the

union is able to mount an eCec3ve public relation campaign, consumers may boyco: the ,rm. Due to

nega3ve publicity, the company will lose the advantage gained by continuing to produce. potential

2. Assume that the ,rm’s goal is to break the union, what are the advantages and

disadvantages of this strategy?

The strategy at this point is legal as long as the ,rm continues to negotiate in good faith with the

3. What standard should the ,rm use in seEng wage rates? (Industry or geographic)

Answering this question depends on your perspec3ve. From management’s point of view,

whichever standard will enhance your compe33ve position would take precedent. The union, on the

The teaching note was prepared by Gerald E. Calvasina, Professor of Management, Southern Utah

University and Joyce M. Beggs, Associate Professor, University of North Carolina at Charlo%e.

100. EXERCISE: APPLYING THE NLRA

Responses to situation

1. The national Labor relation Act speci,es and, national Labor relation Board (NLRB)

interpreta3on has held that it is the employee’s role to initiate a decer3,ca3on pe33on. In

the situation described, the supervisor can advise the employees to contact the NLRB

regional oKce to ,nd out how to initiate proceedings to decer3fy the union.

2. This is known as union “sal3ng”. It is a recent union organizing tactic in which professional

union organizers apply for employment with open shop employers while openly expressing

an intent to organize the companies’ employees. Recent court decisions and the NLRB have

held that employers cannot refuse to hire paid professional union organizers as employees

solely because of their union status. Remember, it is an unfair labor practice to refuse to

hire a bona ,de employee applicant because of union sympathies, membership, or

association. It is also not advisable to ask questions designed to discover union aKlia3ons.

This type of questioning can be used to establish an intent to discriminate.

3. Currently, the NLRA permits employers to permanently replace economic strikers. President

Clinton issued an executive order in March of 1995, which forbids government contractors

from doing this, and congress and employers continue eCorts to secure this option for

employers. This order was struck down by D.C Circuit Court of Appeals in 1996 in Chamber

of Commerce of the United State4s v. Reich, 74 F. 3d 1322 (1996).

4. This is known as an “Excelsior list”, based on the 1966 NLRB case Excelsior Underwear, Inc.,

156NLRB No. 111. Within 7 days aDer the Regional Director has approved a consent-election

agreement or the Regional Director or the NLRB in Washington has ordered an election, the

employer must ,le with the Regional Director an election eligibility list, containing the

names and addresses of all the eligible voters.

5. There is potential here for several blatant unfair labor practice charges against the employer.

The only consola3on for you as a manager is, if your employer terminates you for refusing to

follow up on the orders, you may now be protected under the NLRA and may also ,le an

unfair labor practice charge against your “former” employer. It may even be possible to

advance a wrongful discharge claim in a state court under the public policy exception to the

at-will doctrine.

Gerald E. Calvasina, Associate Professor, Southern Utah University prepared this teaching note.

101. EXERCISE: LABOR ARBITRATION

I. objective

A. To familiarize you with the arbitration process.

B. To give you practice in presen3ng a case before others.

C. To examine issues relating to contract administration.

II. Out-of-Class preparation Time: 40–50 minutes

III. Procedures

Either at the beginning of or before class, each student should read the exercise. To start the

exercise, the instructor will divide the class into the following three groups:

A. Union representative (approximately ,ve individuals)

B. Company representative (approximately ,ve individuals)

C. Arbitrators (all remaining participant, divided into groups of three to ,ve members)

The union representative should meet together and carefully examine “The Union position” and

prepare to argue and defend this position. The company representative should do the same with

reference to “The Company position.” Meanwhile, the arbitrators should read both the union position

and the company position and discuss among themselves the arguments for and against each position.

ADer both the union and company representative have prepared their position statements, each

should present their case to the arbitrators. Each group will be allowed ,ve minutes for their

presentation, and then an additional ,ve minutes to counter the other group’s position.

ADer all presentations are complete, each group of arbitrators will be given 10 minutes to discuss the

case and reach a decision. These decisions should be presented, along with the reasoning behind them,

to all participant.

Finally, the instructor may (optionally) present the arbitrator’s actual decision in this case.

The Issue

Was the grievant discharged for just cause? The company claimed the employee’s negligence of duty

resulted in the discharge and the union claimed poor performance was the issue. If the union is right,

what should be the remedy?

Per3nent Provisions of the Union Agreement

article I. Purpose of the Agreement.

1.3. The management of the company and the direction of the working force, including the right to plan,

direct, and control operation, the right to hire, suspend, transfer, or discharge for just and suKcient

cause, to relieve employees from duties because of lack of work or for other legitimate business reasons,

and the right to introduce new or improved methods or facilities of production is vested exclusively in

the company; provided, however, that such rights shall not be exercised for the purpose of

discrimina3ng against any employee, and such rights shall not conTict with the provisions of this

agreement.

article 33. Discipline and Discharge

33.1. In cases of poor job performance, the following procedure dealing with discipline will be

accomplished with written no3,ca3on to the Union:

a. Formal written warning in the ,rst instance with copy to the employee.

b. In subsequent instances, formal written warning and/or suspension without pay for a period not

to exceed ,ve working days.

c. In the event three or more instances occur, one of which results in a suspension, within any

two-year period, discharge for just cause will be accomplished.

33.1.1. For purposes of this article, job performance shall include consideration of the following

factors:

a. A:endance record, including absenteeism, tardiness, and proven abuse of sick leave.

b. Adherence to industrial safety rules.

c. Adherence to Company house rules.

d. Ability to perform assigned tasks sa3sfactorily.

33.2. In cases of personal misconduct, the disciplinary action taken, including discharge, will be

consistent with the gravity of the oCense.

Background

The grievant was employed as a service technician for the ABC Petroleum/Gas Company from

August 1999 to April 2003. On January 26, 2003, grievant was dispatched to a customer who reported a

strong odor. Grievant’s service report showed that he spent 26 minutes on the call, that no leaks were

found, and that no repairs were made. The grievant did not take a pressure/manometer test.

Later that same day, in response to a second call, another technician was sent to the customer’s

home. The second technician checked the gas tank and gauge readings, added some gas, used the track,

and did the pressure/manometer test. He tested the lines and isolated the source of the gas odor at a

leak in the heater connector aDer the shutoC valve on the heater. The leak was located less than two

feet from the pilot light on the water heater, which was lit. The technician replaced the heater connector

and put the old one in the back of his truck. Subsequently, the grievant’s immediate supervisor talked

with the second technician and examined the damaged heater connector. On January 28, 2003, the

supervisor met with the grievant and informed him that he was being suspended, pending an

investigation. The reason for the suspension was “Negligent in responding to report of gas odor on

January 26, failure to perform leak investigation according to company procedures, leaving party with

hazardous condi3on.” By letter on April 16, 2003, grievant was no3,ed that he was being terminated

based on the company’s ,ndings indicating that “the incident was of such serious nature that we would

be remiss in continuing your employment as a technician.”

The Company’s position

The company contends that the grievant failed to follow normal procedures necessary to determine

whether there was a gas leak, and that leaving the customer in a hazardous condi3on cons3tuted just

cause for discharge. The grievant’s failure to ,nd or repair the gas leak was not poor performance but

negligence of duty. The company de,ned poor performance as involving a lack of skills or intelligence

and that the grievant’s behavior was not caused by a lack of skills or innate inability. The company

speci,cally refers to article 1.3 which permits the company to discharge an employee for “just cause”

and that, under article 1.3, no prior warnings are required. The company also noted in its presentation

that the employee was previously suspended for ,ve days in 2000, and that he has been reprimanded on

numerous occasions for various infractions.

The Union’s position

The union contends that the grievant should have been disciplined under section 33.1 for poor job

performance. The union contends that grievant performed three of the four tests usually performed and

that, at worst, used poor judgment in not pressure tes3ng the system. Further, the union contends that

the company failed to give grievant adequate notice of the rule or the consequences of his action. The

grievant did not have knowledge that he could be discharged for negligence in performance of his duties.

Further, the union claimed that the company did not conduct a proper investigation and relied solely on

the report of the second technician sent to the customer’s home. The company made no a:empt to visit

the job site to determine ,rsthand if grievant had followed company rules.

102. SKILL BUILDER: EMPLOYEE COMMUNICATIONS DURING UNION CAMPAIGNS

I. OBJECTIVES

1. To give students practice in preparing an eCec3ve company communication during a

union campaign.

2. To help students understand the practical application of the national Labor relation

Act.

3. Instructors may also use this exercise as an opportunity to introduce students to the

Employee Free Choice Act, which if passed as currently written would drama3cally

alter the Union Representation election Process.

II. TIME REQUIRED TO COMPLETE: 1 hour

III. INSTRUCTIONS: See Text

In order to do an eCec3ve job on this assignment, students will need to review sections 7 and 8

of the national Labor relation Act. section 8 (a)(1) of the act states that employers cannot interfere

with, restrain, or coerce employees in exercising their rights under section 7 to join or not to join a labor

organization. Viola3on of the act usually involves threatening employees with the loss of jobs, pay, or

bene,ts; interroga3ng employees about their union ac3vi3es or interest in the union; surveillance of

employees’ union ac3vi3es; or promising increases in wages and bene,ts in exchange for non-union

votes. These principles can be applied to specifying permissible content in letters sent to employees. If

any of these general principles are violated the employer may be guilty of an unfair labor practice.

letter to employees must be carefully draDed since employees would have de,nite evidence of unfair

labor practices if the content of the letter contains viola3ons of section 8 (a) (1). It is important to point

out to students that the interpreta3on of section 8 (a) (1) is largely determined by the outcomes of NLRB

cases. While section 8 (a) (1) does protect employer expression of “views, argument or opinion,” the

diCerence between protected statements and unprotected threats” or “promises” must take account of

the way in which the language is likely to be understood by employees (See NLRB vs. Gissel Packing C o.,

395 U. S. 575 (1969). In Midland national Life Insurance Co., 263 NLRB No. 24 (1982), aDer a number of

changes in its position, the Board has now taken the position that factual misrepresentations in speeches

or statements do not disturb the “laboratory condition” deemed necessary for holding fair elections.

This assignment works well if you allow students to cri3que each other’s letters. This can be achieved by

having students exchange letters with one another or the instructor can select one or more students to

read their letter to the class. It may be useful to discuss eCec3ve management strategies during union

organizing campaigns.

Sample Le:er

Dear Fruit Canner Employee:

We feel that it is important that we share with you our philosophy about labor unions and what

aCect they might have on our company. Our approach has always been working directly with employees

to resolve any problems or issues. A union will only interfere with a relationhip that has taken us many

years to build.

While you have the legal right to join a union, you also have the legal right not to join a union.

We feel very strongly that we do not need a union here at Fruit Canners because we don’t think the

United Food and Commercial Workers Union can oCer many advantages to you.

We feel that it is only fair that you understand the changes a union will bring to the workplace.

Unions may require you to pay an ini3a3on fee. Some unions have charged their members as much as

$800 to join. additionally, you may also be required to pay monthly union dues. Worse yet your union

may engage in strikes and boyco:s disrup3ng normal business. Employees will no longer be able to

come directly to management to discuss problems but will have to follow union procedures and policies.

We do not feel that we need a third party to come between us.

We do hope that you will think very carefully about the United Food and Commercial Workers

Union. Unions can promise a lot, but we hope that you will not sign a union authoriza3on card if asked.

Sincerely,

Contributed by Dr. Gerald Calvasina, Southern Utah University.