The Union S Grievance Contracting Out Jobs Protected by Bargaining Unit

¶ … Right to Contract Out

The notion that by raising the janitor job from $13.89 to $14.38 the Company would cease "to be successful" says enough about the "good faith" of the Company to know that it is dubious at best. Yet this 80 cent raise was maintained as the reason for denial of the grievance (Schwartz 516). Moreover, during the job evaluation, the Company "tipped its hand" by announcing that it did not really want to evaluate the job because after a wage survey it had found that the "janitors were the highest paid in the area" (p. 518). At the same time, the Company broke with its traditional or normative manner of evaluating by not requesting for a lowering of points, as it had in the past, when pay was an issue. Instead, the Company showed its hand again when one representative stated, "These jobs are probably gone" (Schwartz 518). In reality, it was the Company's intention to give the appearance of "evaluating" by meeting with the Union representatives while secretly negotiating with outsiders to outsource the janitor jobs at lower cost. When the Union realized this and noted it, the Company attempted to backtrack and say that there was already a contract made to outsource -- which was not the case at all. By tipping its hand, the Company was essentially testing the waters to see if the Union would object. It did, citing Article 19 and Article 29 of the contract.

The Company responded by citing the "very broad management rights clause" of the contract -- essentially a loophole, or what it deemed as such. The reason for this loophole seeking is also clear: by outsourcing the janitor jobs, the Company could save nearly $400,000 a year.

In this situation, the union has the burden of proof since it is the one filing the grievance and the matter is related to a contract interpretation ("Five Common Grievance Issues"). The case is, however, both a matter of "good faith" on the part of the Company, which was clearly violated by its dubious intentions in entering into the evaluation, and also a contract interpretation issue. In essence, it is always a contract interpretation issue, unless it is a disciplinary issue. Yet, the "good faith" and the contract are intertwined in the sense that the Company views itself as not having violated "good faith" because of clauses within the contract, which it itself points out are "broad" in nature. But by adhering to "broad" clauses, the Company is undermining the Company-Union relationship and attempting to fit into a loophole its desire to save $370,000 by outsourcing labor. If the union's purpose is to protect labor, then it has a right to file a grievance, and its burden of proof is not so great as one might think: it shows clearly that the Company was not acting in "good faith" and was in violation of the contract.

This issue might have been avoided, however, if in the contract there had been a section devoted to providing guidelines for the Company to retain the right to contract out bargaining unit work. Such guidelines could, for instance, be developed thus:

First, the Company should agree with the Union on which positions may qualify for contracting out. Second, this agreement should be up for re-negotiation every so many years (2-3, for example), at which time both sides should prepare reasons for or against allowing jobs to be permitted to be contracted out. Third, if jobs are deemed allowed to be contracted out, there should be some rights pertaining to the workers in that their jobs are not eliminated (in the sense that the Company still maintains them in some other capacity). This allows for workers to be shifted within the Company while retaining their rate of pay at worst. Such guidelines are necessary for keeping the Company from violating the recognition clause of the labor agreement ("Union Rights-Management Rights-Recognition Clause").

When a company contracts out work formerly performed by bargaining unit employees, the company is violating the recognition clause of the labor agreement if the labor that is contracted out was that still belonging to employees accepted (or recognized) by the company as being part of the bargaining unit represented by the union. The company violates the recognition clause when it fails to recognize the rights of the workers to retain their labor when they are represented by the union as part of a bargaining unit. This is a basic company-union dynamic and one that should not be violated because doing so undermines the relationship of workers, union representatives, mangers, and company heads.

Were I the arbitrator I would rule in favor of the union because the Company failed both to show "good faith" and to uphold the contract. First, the Company was not in "good faith" with the union as it attempted to skid the evaluation by "showing up" but not really "showing up" -- in other words, the Company came agreed to perform the evaluation, but upon performing the evaluation it disclosed that it did not really want to perform the evaluation and that it was in fact already in the process of eliminating the jobs under evaluation. This was the violation of "good faith." The Company should have been up front with the union and stated plainly that it wanted to outsource the position to see if the union would have any objection. Instead, the Company appeared to do as it desired, without approaching the union, and then, sensing that the union might object, "floated" the idea of outsourcing as a way to discover the impact of such an action. Not liking the reaction, the Company then decided to act in force regardless and at the same time "cushion the blow" by giving the janitors raises even as it outsourced their positions and moved them elsewhere within the Company. Jobs that should have been protected by the bargaining unit were thus cut out as though they were not part of the unit at all. This was the contract violation.