Negotiating the Labor Agreement

1
SECTION 2

• Negotiating the Labor Agreement

2
Basic Outline of Most Negotiations

• Posturing
• Settling in
• Finalization
• Agreement
• Impasse Resolution

3
Items to consider

• Type of bargaining unit
• Small/large unit
• Single or multi-employer (conglomerate?)
• Pattern established?
• Choice of bargaining team

4
Formulating Proposals

• Seek input from key administrative components
• 1st line supervisors
• Shop stewards/rank and file workers
• Gather info of opponent and comparative data
  on
• Economy
• Industry
• CBAs
• Know your bargaining range

5
Processes in Negotiations

• Subcomponents of bargaining (Walton and McKersie
  A behavioral theory of negotiations)
• Distributive bargaining (win/loss)
• Integrative bargaining (win/win)
• Attitudinal structuring
• Intra-organizational bargaining
• Subcomponents reflected in messages
• Does it translate into agreement?
• Tactics can help, but other items affect your
  innate bargaining power.

6
What Affects Bargaining Power?

• Unemployment
• Reputation affects (image or goodwill)
• Government intervention
• Risk preferences of bargainers
• TIME FOR A GRAPH

7
Y
V
X
V
8
Y
V
b
X
a
V
9
Y
Region of overlap is Contract Zone
V
b
If common threat pt. lies below v-boundary, CZ
will exist
X
a
V
10
Y
V
45 degree line highlights split the pie outcome
b
X
a
V
11
Y
Nash Bargaining equations Xah(V-a-b) Ybk(V-
a-b) Together they imply Y(b-(ak)/h)(k/h)x
V
b
X
a
V
12
Y
This Nash Bargaining Line Y(b-(ak)/h)(k/h)x Ide
ntifies the Nash outcome Note k/h is the slope
of the Nash line
V
b
X
a
V
13
Y
Slope of k/hgt1 implies better tactics of Player B
(i.e., a better outcome for a given CZ). Slope
of k/hlt1 implies better tactics of Player A
V
b
X
a
V
14
Y
What if Player A uses a strategy to increase
his/her threat point to a? Nash line goes
through new common threat point
V
b
X
a
a
V
15
Y
Player A is made better off
V
b
X
a
a
V
16
Y
Same is accomplished by reducing Player Bs
threat point (a,b) or by reducing both Players
threat points (a,b)
V
b
b
b
X
a
a
a
V
17
Benefits of Dixit and Skeath Model

• Bargaining outcomes analyzed as a function of
• Initial threat points (a and b)
• Tactical abilities of bargainers (k and h)
• Strategies..they can affect outcomes by varying
  threat points
• Risk preferences.they can also be thought to
  affect initial location of threat points.
• Note two risk loving bargainers will not have a
  contract zone..no agreement predicted

18
Ethics and good-faith

• Bluffing and puffing considered o.k., but
  volunteering critical information can harm
  bargaining power, and misreprentation can be
  fraudulent.
• NLRB has designated issues as
• Illegal
• Mandatory
• Voluntary

19
What is good faith bargaining?

• Its required on mandatory topics
• Bad faith bargaining includes
• Surface bargaining
• No concessions offered
• Unreasonable proposals
• Unilateral changes
• Bypassing official reps
• Committing ULPs
• NLRB considers totality of conduct