Union Contracts Defined
Union contracts, also referred to as collective bargaining agreements, are written agreements between a union and an employer. These contracts establish the terms and conditions of employment for a unionized workforce which supersede existing policies until the contract has expired. These contracts are negotiated by the union and employer and may set out details of employment such as employee compensation, health care coverage, hours of work and general working conditions. Once established , both parties are legally bound to the contents of the agreement until both sides agree to alter its terms. Changes cannot be made unilaterally, though negotiation proposals may be made by either party. In addition to this, the job actions that are commonly seen with non-union employment — including strikes and lockouts — are not legally permitted with unionized employment. Again, although requests for negotiations to alter the terms of the contract are permitted, action in the event that the negotiation does not lead to change is not.
Union Contracting Legality
A variety of laws govern each jurisdiction where a union operates. The National Labor Relations Act ("NLRA") governs union and employer activity in the private, industrial, and federal contract sectors. The NLRA establishes and defines rights and obligations for unions and employers, as well as the scope for bargaining over wages, hours, and working conditions. The NLRA encompasses many facets of labor-relations law, including unfair labor practices, collective bargaining, and picketing.
Where the NLRA and state labor laws apply, unions and employers are subject to regulation by both federal and state law—unless preempted. The NLRA does this through a system of parallel federalism. This structure is designed to allow states to adopt and implement their own labor policies so long as they do not conflict with federal law, and is often much more effective than if only the federal government implemented uniform policy across the nation.
The NLRA also establishes the National Labor Relations Board ("NLRB") as an independent federal administrative agency responsible for enforcing compliance with its provisions, such as the adjudication of unfair labor practice complaints. While in theory the NLRB has the power to adjudicate disputes without the input or participation of courts, in practice courts can enforce the NLRB’s process and rulings. However, the NLRB cannot order the payment of money damages like other federal regulatory bodies, such as the Securities and Exchange Commission or Federal Trade Commission. When the NLRB improperly or unlawfully orders a remedy that requires monetary payment, the aggrieved party can seek a de novo review in federal district court.
The federal law governing unions in the private sector, the NLRA, is unlike labor laws in other countries, making it much less influential to non-American unions. The rights and obligations built into the NLRA, however, still shape how domestic unions operate.
Federal and State Laws Versus Union Contracts
Depending upon the federal and state statutes involved, a union contract may operate to change or override a federal or a state law. This is most commonly seen under the National Labor Relations Act, the Railway Labor Act and the Labor Management Relations Act, where in some instances the parties can be subject to a union contract that offsets or modifies the application of those federal statutes with respect to certain issues. The most notable example of this is a union contract including a provision extending the statute of limitations for wage claims or other claims, for example, from three years to four years or five years.
In contrast, state statutes may not be subject to alteration by a union contract. For example, a union contract cannot be used in Wisconsin to override or alter the durations of wage and hour laws or statutes of limitations. In addition, a union contract cannot create an exception to the rights guaranteed by the laws of Wisconsin or elsewhere. Thus, it would seem theoretically impossible for a union contract, for example in a case of disability or a death of an employee insured under a life insurance policy, to reduce what might otherwise be payable to the employee or the employee’s beneficiaries. A management company in Wisconsin has been criticized in several employment lawsuits in Wisconsin for allegedly trying to do just that through their union contracts.
In a situation in which an issue arises as to whether a federal or state law may be altered or changed by a union contract, it is important to consider the matter carefully. The issue almost invariably involves whether federal law controls over state law, or vice-versa. As an example, if a union contract extends the statute of limitations for filing a grievance or lawsuit, it may be that the equitable remedy of "promissory estoppel" may apply to revive an otherwise expired claim. Or, another possibility is that an employee or former employee may be subject to a situation in which the damage being suffered is subject to federal considerations, but the state law on which a claim is founded may be subject to a shorter statute of limitations. Other examples are frequent, but depend generally upon the specific factual circumstances of a particular situation or case.
When Does a Union Contract Override Company Policy
A union contract will, in some cases, nullify company policies by replacing the policy with its own terms. This is particularly true where the written terms of the policy conflict with the terms set forth in the contract. In these situations, the union contract will prevail, although the contract could be held inapplicable to the dispute if it were properly excluded from the scope of bargaining in which the policy dispute arises. Another circumstance where the contract may supersede a policy is where a management right is expressly placed in abeyance. This means the union and company have agreed that the company has the discretion to act, but not unilaterally; rather the company agrees to discuss the matter with employees and share its ideas before implementation.
The union contract is also likely to afford a greater benefit to individual employees than the terms of a competing policy. For example , the agreement may shorten the time an employee must complete certain criteria before they are promoted (e.g., seniority) or increases the waiting period before a certain employment occurrence will count towards a discipline level. A typical example is the contract’s modification of attendance criteria. A company policy may state that an employee who misses three days of work in a six-month period will be suspended for an extended period of time. In contrast, the agreement may only bring that employee up to step 1 of the discipline system. The difference, if the employee had an above average attendance record for the two years prior to the failure to report, could total a year off from work versus the month off if the company policy were applied. Here, the contract both nullified and enhanced the company’s provisions. The contract prevailed over the written policy, but a company employee retained a substantial benefit in the form of a suspended disciplinary system (while the contract was in effect).
Limitations and Case Law
However, legal precedents and limitations do exist when it comes to union contracts and their power to override laws. For example, the Taft-Hartley Act of 1947, formally known as the Labor Management Relations Act, was designed to restrict the activities and power of labor unions. Specifically, Section 302 of the Act makes it illegal for a company to pay member of a union, to which it is not represented by, even for services rendered. A Virginia brick manufacturing company, for instance, could not pay Kentucky-based Local 18 bricklayers for having members in Virginia work on a Virginia-based project.
In the case of local 18 Bricklayers and Allied Craft Workers v. Commonwealth of Virginia, the United States Court of Appeals for the Fourth Circuit in Richmond, Virginia took the case to court to determine the legality of this arrangement. Comparing this case to one in which an outside service was used for a Virginia project, the court concluded that Section 302 of the Taft-Hartley Act applied to the arrangement. As such, the ruling determined that it was illegal for the brick manufacturer to pay into an outside union and a local union because the arrangement had the potential to influence the project. Ultimately, the U.S. Court of Appeals ruled that the individual contracts were in violation of Section 302 of the Taft-Hartley Act, as they were ultimately aimed at influencing the wages of the workers on the project.
Although the rights outlined under a collective bargaining agreement are relatively unyielding, they are not absolute. Indeed, all unions are subject to the law. It is these legal limitations that can serve as the grounds for which an employee or a third party outside of the union may choose to argue against a collective bargaining agreement.
What This Means for Employers and Employees
This should raise questions for employers and employees. If a contract cannot specify a term that has already been specifically defined, then how can a union contract relate to laws which do not define the terms? The same question can be posed from the employee’s view. For the employer, this could also establish bargaining limitations with respect to certain issues. The employer should negotiate with caution and understand what terms they can include in the agreement. For the employer, these limitations may potentially impact not only negotiations with the union, but also negotiations with the employees directly .
For the employees, it is also very important to understand that union contracts are still subject to the law. Just because the law does not define the term, does not mean that the term does not already have an accepted meaning such that it could apply to the employee’s situation. It is possible that an employee could be affected by such a limitation as the law could not be applied to them under a collective bargaining agreement. For example, if an employer has an agreement with a union which includes a specific definition of "full-time employee" when the law does not differentiate between full-time and part-time employees, the meaning of such term could affect the employees.
