What Are The Risks When An Employer Negotiates Its Own Union Contract?


Business owners and managers, elected public officials and administrators, and even sports teams' owners and general managers usually have more to lose than to gain by negotiating their organizations' union contracts. Employer representatives who claim that they are as qualified as any outside professional -- "Who knows better what I can afford to pay my employees?" -- unfortunately disregard the potential risks of their efforts. Years of so-called savings can be lost in a single negotiation. 

Some of the benefits of hiring an experienced outside negotiator include:

1.  Negotiations can generate "heat" at the table. Arguments and emotional or derogatory comments can spill over to the workplace. Yet, good employee attitudes and cooperation are needed to increase productivity, reduce turnover and operate efficiently. An owner/manager who too vigorously becomes a participant in the emotion of the battle can injure his/her critically needed managerial role. Simply by rejecting the employees' requests, he/she automatically becomes the "bad guy." An outside negotiator minimizes such institutional risk.

2.  When the owner/manager is at the table, his/her presence may inhibit a candid discussion of the real reasons underlying an important issue ... especially if it involves the owner/manager.  The other members of the management team may not contribute, or worse, respond abnormally in his/her presence.  And, often, a real underlying irritant remains hidden only to grow into a future, more difficult problem.  An outside negotiator knows that preventing molehill problems from becoming mountainous conflicts is the key to a healthy labor relations environment.

3.  There are often mismatches when comparing an experienced union negotiator who daily sharpens his/her skills with many different employers and an owner/manager who participates in the process only once every two or three years for one company.  This can be especially disastrous in negotiating what appear to be "no cost" subjects such as employee transfers, contracting out, supervisory work, and seniority rights. Past practice, grievance resolution, negotiation intent or contract language may appear harmless to an owner/manager; yet, suddenly, any and all of these things may become a straightjacket to an organization whose immediate need is to effectuate an operational change.  The outside negotiator considers these factors as important as wage and benefit increases in advising employer actions. Often, a contract that prevents flexibility in operational efficiencies can be more costly than even excessive increases in wages and benefits.

4. Can an owner/manager compromise? Can he/she look at a present problem objectively? Can he/she solve employee concerns by patient discussion? Can he/she play the role of a mediator as well as the union paid negotiator? Can he/she talk to the employees as an equal, solving problems for the benefit of all? This is the job description of a successful negotiator.

5. Direct access by a union and/or employees to the executive with the authority and power to decide on the spot often should be avoided. The scope of the executive's authority and future ongoing relationships with employees may not permit an executive to delay a response. Yet, quick answers risk mistakes. By contrast, the use of an outside negotiator generally automatically creates the need for consultation and/or directions from the decision makers.

6. Is it truly time and cost justified for the owner/manager to be tied down to the table and negotiate a union contract? Could he/she have made one major profi.table sale during that time?  Could he/she have solved one major operational problem or planned one important long range strategy that will have a greater positive impact on the organization during the same time? In fact, if an experienced, qualified professional who is respected by the union as an honest and credible spokesperson negotiates a union contract, the cost may be calculated in terms of cents per hour. The outside professional should be able to reach agreements that will often end up being at no or a minimal cost to the organization.

As restrictive Labor Board and Arbitration decisions proliferate, the need to ensure operational flexibility and efficiency increases, and the owner/manager becomes more mature and experienced, the conclusion will be that there may be many reasons why owners/managers should not negotiate their own union contracts.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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