Unionized Employers: Review the Wage Provisions in Your Collective Bargaining Agreements

by Foley & Lardner LLP
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Employers face many headaches in a unionized workplace, but one supposed benefit of a union is that it streamlines procedures across large groups of employees. The employer can look to the collective bargaining agreement to know precisely how, when, and how much to pay all of the bargaining unit employees.

In theory, anyway. In Aguilar v. Husco, Inc., No. 2013 AP 265 (Wis. Ct. App. May 20, 2014), the Wisconsin Court of Appeals recently told employers that the terms of a collective bargaining agreement may not conflict with state law, regardless of whether the employer and the union agree to the terms. Since 1983, Husco and its employees had operated under a collective bargaining agreement that provided for a 20-minute unpaid break each day. Under the Wisconsin Wage Payment and Collection Law, however, all breaks of fewer than 30 minutes are required to be paid breaks.

Twenty-five years after the provision was put into the CBA, someone finally realized that it was unlawful. Employees then filed a class-action lawsuit, and the Court of Appeals found in favor of the entire class of employees. The court found irrelevant the clear terms of the CBA, the fact that the parties agreed to these terms voluntarily, and the fact that neither party was aware of the state-law provision when the terms were agreed to. As the court put it, the state law “evidences a clear legislative intent to protect employee rights to wage payment in certain workplace conditions and at certain times,” and no agreement—voluntary or otherwise—can override state law.

The moral of the story is that unionized employers can no longer merely rely on the language of their collective bargaining agreements as a defense to employee wage claims. And because the provisions of the CBA apply to all bargaining unit employees (the supposed benefit above), a violation against one employee is likely a violation against all of them. And that triggers two of the most dangerous (i.e., expensive) words in employment litigation: class action.

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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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