Contract Administration

1
Contract Administration

• Bringing the Agreement to Life

2
Grievances Definitional Issues

• Definition Usually, a perceived contract
  violation that is submitted to the grievance
  procedure (GP) for resolution. A formal
  complaint. Not gripes, grumbling, whining, etc.
• Courts have often endorsed broader meaning than
  just alleged violations of what are clearly
  contract matters
• Common law of the shop
• Past practice
• External statutes or common law
• Implied management obligations
• Good faith bargaining obligation includes the
  requirement that management accept and consider
  grievances

3
Grievance Basics

• Filing usually limited to workers and unions --
  why?
• Comply, then grieve is the general rule for
  workers
• Most GPs require written grievances at an early
  stage -- though possibly after an initial verbal
  presentation
• Gives focus, prevents shifting grounds or
  changing the issue
• Provides a basis for precedents
• Reduces emotional elements, clarifies objective
  issues
• Practical value also in deterring frivolous
  grievances
• GPs are a key voice institution. Unions aim to
  give workers a voice at the workplace, and this
  is a key part of how that works (not just every
  three years at negotiations!)

4
Why Do Grievances Arise?

• Mainly, to protest perceived violations and seek
  remedies
• Labor agreements are necessarily imprecise
• Parties cant possibly anticipate everything
  (e.g., just cause)
• Might anticipate that vague language will lead to
  different views, but be unable to work out
  specific agreement. Maybe it didnt seem worth a
  strike and probably wasnt (e.g., seniority and
  ability will be considered)
• Outright violations due to ignorance, mistaken
  interpretations, or needs for expediency
  (intentional)
• But grievances also arise for other reasons
• To get something for nothing (strategists)
• To call attention to problems, whether
  contractual issues or not
• To gain personal attention -- a conspicuous
  soapbox
• To make a supervisor look bad
• To build up bargaining chips for later trades

5
Grievances About What?

• Four-organization study
• Pay 17
• Working conditions 16
• Performance and permanent job assignments 16
• Discipline 14
• Benefits 14
• Mgmt. Rights 7
• Discrimination 6

• Earlier broader-based study found discipline was
  the largest single category about 33

6
Grievance Procedure Characteristics

• Usually 3-4 steps, each subsequent step involving
  higher levels of authority for both sides, e.g.
• Step 1 Grievant and/or steward with supervisor
  (written or oral)
• Step 2 Steward or chief steward with supervisor
  and IR/HR staff rep
• Step 3 Chief steward and local pres. with IR/HR
  head and plant super.
• Step 4 Binding arbitration by a neutral third
  party
• Nearly all procedures end with arbitration, but
  some are open-ended (strikes possible), or
  open-ended on some issues
• Important quid pro quo GP w/ arbitration
  no-strike pledge. Language on both often read
  together
• Design, scope, and other specifics up to the
  parties

7
Grievance Procedures Structures Enable Certain
Functions

• Primary To resolve problems close to their
  source. This is likely to lead to appropriate
  resolution and commitment of parties to it
• Other functions (mostly unintentional)
• Provide training for union and ER staff
• Politics Higher-ups involvement lends
  importance to participants and provides a
  conspicuous role for the higher-ups
• Buck-passing Lower-level officials can dodge
  or duck issues, kick it upstairs and say they
  were overruled (letting others take the heat for
  bad news)

8
Clinical and Legalistic Approaches

• Legalistic approach
• Emphasis on whos right according to the letter
  of the law (contract)
• CYA mentality (cover your assets?)
• Can avoid bad precedents
• Problems
• May not address underlying problem
• Problem likely to fester and resurface

• Clinical approach
• Find basic causes of problems, not symptoms
• Stress fairness and communications
• Stress problem-solving
• Problems
• Fairness not well defined
• Bad precedents possible by case-by-case focus
• Fairness and open communication can fuel more
  grievances

9
Effective GPs Norms

• Clear procedure and participant roles. Waivers
  of rules (e.g., on time limits) possible by
  mutual agreement
• Supervisors need authority to resolve grievances
  near their source (but legalistic view often
  prevents this for fear of bad precedents)
• Individual, objective consideration of each
  grievance to protect individual EE rights

10
Horsetrading and Related Issues

• In reality, grievances often get traded off for
  one another in a Step 3.5 or shakeout session
• Both sides want to avoid arbitration costs and
  risks of an undesirable arbitrator decision
• Advocates A legitimate cooperative effort,
  sometimes needed to avoid or reduce backlogs
• Courts Union must have some discretion, a wide
  range of reasonableness, in deciding which cases
  to pursue, drop, or trade. Burden is on
  individual to show union violated its fair
  representation duty

11
The Duty of Fair Representation (DFR Obligation)

• Quid pro quo the union gets for right to be
  exclusive bargaining agent
• Complexities Balancing individual rights
  against majority rights and interests
• Common scenario Grievant feels the union
  violated its DFR by failing to press grievance or
  take it to arbitration
• Note DFR suit threats are part of the reason
  unions press unpopular or questionable grievances

12
Legal Guidelines for DFR

• The union must
• Consider all EEs
• Make good faith effort to serve all w/o hostility
  to any
• Exercise its discretion with good faith and
  honesty
• Vaca vs. Sipes case
• Union and Co. doctors agreed that grievant should
  not be put back on the job, so union dropped
  grievance
• Grievant filed DFR suit, lost. Court said
• Union made good faith effort and had reasonable
  grounds for its decision not to arbitrate the
  grievance
• No absolute right for grievant to arbitrate
  union owns that right
• Burden of proof is on EE to show violation

13
DFR Legal Matters, continued

• Types of conduct likely to be judged violations
• Arbitrariness -- no clear reason for decision
• Discrimination -- race, gender, loyalty, friend,
  etc.
• Negligence -- poor investigation, incompetence,
  etc.
• Dishonesty -- e.g., a payoff
• DFR issue concerns ERs too
• Joint liability for DFR violation damage possible
• Contributory negligence (e.g., bad investigation,
  faulty firing)
• Deep pockets theory (Co. has resources union
  may not)
• Implication Co. should try to ensure union does
  job well, but not interfere in internal union
  affairs
• Key case Hines vs. Anchor Motor Freight
• Drivers allegedly submitted false receipts for
  reimbursement
• Co. fired drivers. Union investigation supported
  Co. decision
• Real culprit The motel clerk. Co. and union
  liable for damages

14
Grievance Arbitration

• a.k.a. Rights Arbitration

15
Definition and Historical Development

• Grievance or rights arbitration A neutral third
  party is used to apply or interpret the terms of
  an existing agreement
• Authority comes mainly from the parties own
  agreement. They agreed to this process
  voluntarily as a way of avoiding strikes, etc.
  during the course of their agreement
• This institution was developing on its own, but
  WW IIs no-strike environment added a big boost.
  War Labor Board often pushed for its use to avoid
  strikes that might disrupt the war effort

16
Legal Status of Grievance Arbitration Clarified
via Supreme Court Decisions

• Lincoln Mills (1957) Taft-Hartleys Sec. 301
  provides suits for enforcement of labor
  agreements, including injunctions
• Steel Workers Trilogy (1960). Three cases
  involving USWA established policy of judicial
  deferral to arbitration. Principles
• Courts not to review merits of grievance on
  appeal
• Arbitration is the favored mechanism when in
  doubt, courts order its use
• Courts will enforce arbitration awards w/o review
  of merits
• More recent refinements and elaboration on legal
  status (1970s)
• Boys Market Courts may use injunctive powers
  to stop strikes that violate no-strike clauses,
  despite Norris-LaGuardia (Federal Anti-Injunction
  Act of 1932)
• Buffalo Forge Injunctive powers can be used to
  halt strikes only where its clear the union
  agreed to arbitrate the dispute
• Misco Notable in halting trend toward erosion
  of judicial deferral policy

17
Some Implications of Legal Rulings

• Federal authority backs a private decision-making
  process wherein courts give great deference to
  arbitration
• Arbitration and no-strike clauses read together
  to determine what the parties agreed to arbitrate
  and what they agreed to leave outside the
  no-strike clause. In effect, courts affirmed and
  strengthened the quid pro quo notion relating GPs
  and arbitration with no-strike clauses
• Labor injunctions return, but in a limited form.
  In accomodating N-L, courts noted v. different
  circumstances
• Norris-LaGuardia situation Court power used to
  squash union formation
• Arbitration cases Court power makes parties
  honor their agreements
• NLRB deferral policy similarly broad, if ULP
  issues heard and resolved consistent with NLRA

18
Arbitration Proceedings and Decisions

• Who? Anybody the parties choose
• Usually chosen ad hoc from AAA or FMCS rosters
• Some parties have permanent arbitrators
  (umpires)
• Key characteristics of arbitration awards
  (decisions)
• Final. Theres usually no appeal on merits
• Binding. Parties must abide by award unless they
  agree to an alternative solution
• Voluntary. The parties agreed to this procedure.
  It wasnt imposed by government
• Form of decisions Usually written, reviewing
  issues, facts, contentions, evidence, contract
  provisions, etc. to provide a thorough rationale
  for the award (conclusion and remedy) that
  convinces both sides the arbitrator is wise and
  fair

19
Arbitration Proceedings and Decisions(continued)

• Arbitration hearings
• Similar to court, many parallels
• Usually less formal (e.g., witnesses may not be
  sworn)
• Arbitrator has discretion on many matters, but
  consistency arises from similar backgrounds
  (mostly law, economics, business), and
  professional guidelines (e.g., AAA, FMCS)
• Major contrasts with courts
• Arbitration recognizes on-going relationships,
  sensitive to parties need to live with the
  decision
• Arbitration recognizes common law of the shop
• Usually quicker, but not always quick
• Draws authority from the parties (bound by the
  four corners of the agreement)

20
Arbitrator Decision Criteria

• First and foremost, the terms of the agreement.
  Some arbitrators favor parole evidence rule --
  no evidence contradicting the written agreement
  may be introduced
• Past practice. Can even override written
  contract
• Intent of the parties (e.g., constructive
  discharge)
• Precedents. Not as strictly bound as courts are,
  but following them does enhance predictability,
  and arbitrators will usually give precedents some
  consideration
• De minimus. Trivial matters can be dismissed,
  but note that cases on important principles cant
  be ignored, even if the dollar amount is trivial
• Burden of proof Grievant and union except in
  discipline

21
Arbitration in ActionEmployee Discipline Cases

• Disciplinary actions may be the single largest
  focus of grievances (35). Arbitrator decisions
  shape norms on discipline systems broadly, union
  and nonunion
• Definition Actions taken by ERs against EEs
  for alleged rule violations
• Added significance Ultimate form, discharge, is
  somewhat akin to economic capital punishment,
  for EE
• Large share of cases implies major costs for ER
  and union (7000 or more per case taken through
  arbitration?)
• Also major indirect costs for ER in ineffective
  discipline
• Historical trend in discipline More emphasis on
  human rights, less on property. Also, at-will
  doctrine eroding

22
Principles and Elements of Discipline

• Just cause -- two key elements
• Clear and convincing evidence of violation?
• Penalty appropriate for the offense?
• Legitimate purposes of discipline
• Mainly to correct EE behavior
• But also to maintain respect, convey the rules,
  promote efficiency, and identify unacceptable
  behavior
• Progression of penalties supports corrective aim
• Nature of the rules -- what should it be?
• Clear and reasonable, with consequences of
  violations indicated
• Are they known to the EE?
• Price lists help convey nature and penalties

23
Price List With Progressive Discipline
24
Evidence and Degree of Proof

• Evidence requirements usually less strict than
  courts
• Hearsay, entrapment may be allowed
• Tougher standards for cases with serious charges
  (e.g., theft)
• Conflicting testimony
• As in court, truth has to be assessed under
  uncertainty
• One general rule Who stands to gain the most by
  lying? Other things equal, odds say that person
  is (usually favors management)
• Parole evidence rule noted earlier (some
  arbitrators). The contract is the final word.
  Contradictory evidence not allowed. Change the
  contract next negotiation
• Standard of proof Usually the weight of the
  evidence (or preponderance of the evidence).
  Not beyond a doubt

25
Is the Penalty Appropriate?

• Reasonableness (e.g., discharge for chewing gum?)
• Past practice. Is there consistency?
• Mitigating circumstances. Most common reason for
  reducing or setting aside a penalty
• Management contributed to a problem (e.g., poor
  training)
• Good work record and/or disciplinary history
• Improbable circumstances unlikely to reoccur
• Union official role deserves extra slack in
  some cases
• Due process issues
• Written notice and opportunity to be heard
• No double jeopardy (being tried twice) or
  escalating penalties, but initial action may be
  conditional (pending further investigation)
• Right to union representation if discipline is
  likely

26
Significance and Prevalence of Grievance
Procedures and Grievance Arbitration

• Significance
• Upward communication in a top-down environment
• Grievances are often spurs to organizing and
  important for union day-to-day roles
• Costly to management (and union), but also
  important in encouraging consistency, fairness,
  and forethought
• An alternative to strikes and other costly
  conflict
• A system of industrial jurisprudence
• A key voice institution. Is exit more
  efficient?
• How prevalent are GPs with arbitration?
• About 99 of CB contracts include GP, and 97 of
  these include arbitration (75 in public sector
  due to Civil Service alternative)
• Nonunion sector Growing use, but arbitration is
  still rare

27
Appraisals of GP/Arbitration Systems

• Generally regarded as working well in terms of
  protecting individual EE rights and providing a
  strike alternative
• Problems and criticisms
• Creeping legalism, formalism, and slower
  resolution. Various experiments on-going to
  recapture its earlier advantages
• Limited availability as unions decline
• Horse trading and other phenomena can weaken
  value in protecting individual rights
• Management Limits discretion and interferes
  with efficiency
• Unions
• Weakens member support by reducing member
  involvement (via strikes, etc.) -- not a
  mainstream view?
• Processes sometimes abused by ERs to weaken
  unions (financially)