Labor Relations Striking A Balance 4th Edition Budd Solutions Manual

Labor Relations Striking a Balance 4th
Edition Budd Solutions Manual

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Chapter 07 - Bargaining
CHAPTER 7
Bargaining
Chapter Overview
Bargaining between unions and employers is one of the three very important processes of U.S.
labor relations. The goal of this chapter is for students to understand the behavioral, strategic,
and legal aspects of collectively bargaining contracts in U.S. labor relations. The chapter also
includes discussions of the important practical elements of bargaining, including preparation,
costing, and the timeline of the negotiation process.
The bargaining process starts with labor and management negotiators preparing to bargain.
Bargaining committees, the bargaining time line, and important issues such as identification of
interests and alternatives are thus presented.
Two additional topics further set the stage for understanding what happens at the bargaining
table so they are covered next. First, types of bargaining structures are explored. Second, the
grocery industry is used as real life example to illustrate the various elements of bargaining
power and the bargaining environment.
In following the bargaining time line, the chapter next turns to the bargaining table. After
discussing contract costing, the boundaries of labor negotiations created by labor law are
reviewed. Turning to the conduct of negotiations, the chapter follows Walton and McKersie’s
four subprocesses of bargaining:
• Distributive bargaining
• Integrative bargaining
• Attitudinal structuring
• Intraorganizational bargaining
Although distributive bargaining is the type familiar to most people, all four are discussed in
detail, including examples and the overall strategy for using each one.
The chapter also discusses issues relating to reaching agreement, and private sector v. public
sector differences, and concludes with a discussion of the pressures to change from adversarial to
interest-based bargaining.
Lecture Tips
The various elements of this chapter can be covered in a relatively straightforward fashion by
following the time line of the bargaining process (that is, start with issues relating to preparing to
bargain, then turn to the actual negotiating process, and then conclude with trying to reach
agreement). To break up a traditional lecture-based approach to this material, I have done three
things.
First, when discussing the legal parameters of the bargaining process (“in good faith” over
mandatory terms and conditions of employment”), I use the labor law discussion case included in
this chapter as a discussion tool.
Second, I use a simple bargaining exercise titled “Hey Buddy, Can you Spare a Computer?” This
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is a role playing exercise involving a 10 minute one-on-one negotiation between two people who
probably start fighting over a set of used computers without realizing that they can share because
one only needs them during the day and the other only during the night. This is similar to the
classic orange example from Mary Parker Follett in which two sisters are fighting over an orange
without recognizing that one only needs the juice and the other only needs the rind. Role sheets
for each participant and teaching notes for this exercise are available for printing in the
instructor’s section of the textbook’s website at http://www.mhhe.com/budd4e.
This exercise motivates a more careful discussion of bargaining strategies, maybe as part of a
slightly broader discussion of Walton and McKersie’s four subprocesses of bargaining. Namely,
when discussing distributive and integrative bargaining, integrate examples of what happened
during the “Hey Buddy” bargaining exercise.
Third, instead of lecturing on the bargaining environment, I take an active learning approach by
having small teams of students create a Mind Map of the bargaining environment for a specific
negotiation (e.g., see reflection question 5). More details on this exercise can be found in the
article “Mind Maps as Classroom Exercises” in the Winter 2004 issue of the Journal of
Economic Education (available at http://www.legacy-
irc.csom.umn.edu/faculty/jbudd/mindmaps/mindmaps.pdf). A few PowerPoint slides that can be
used to provide instructions and examples are available in the instructor’s section of the
textbook’s website.
The Mind Maps exercise is time intensive (perhaps 1.5 hours) so discussion of Chapter 7 might
spill over into the following week, but there is usually time to make it up when covering Chapter
8. Alternatively, the newspaper articles that accompany reflection question 5 can be used as a
discussion tool to illustrate dimensions of the bargaining environment.
The issue of what happens when bargaining fails is the closing question that leads into the next
chapter.
Lecture Outline
Learning Objectives
1. Sketch the steps of the bargaining time line.

2. Define the different types of bargaining structures.
3. Discuss the determinants and importance of bargaining power.
4. Explain the legal parameters of the U.S. bargaining process.
5. Outline the four subprocesses of bargaining (distributive bargaining, integrative bargaining,
attitudinal structuring, and intraorganizational bargaining), their purposes, and their tactics.
6. Understand the pressures for changing from traditional to integrative bargaining, and why this
is difficult.
Through the process of collective bargaining, employers and unions negotiate terms and
conditions of employment, and put these terms into written contracts, also called collective
bargaining agreements. In the United States these contracts are legally binding and typically last
one to five years, with a three-year duration being the most common.
U.S. union contracts usually include the following subjects:
• Compensation: wages, benefits, vacations and holidays, shift premiums, profit sharing
• Personnel policies and procedures: layoff, promotion, and transfer policies, overtime and
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vacation rules
• Employee rights and responsibilities: seniority rights, job standards, workplace rules
• Employer rights and responsibilities: management rights, just cause discipline and
discharge, subcontracting, safety standards
• Union rights and responsibilities: recognition as bargaining agent, bulletin board, union
security, dues checkoff, shop stewards, no strike clauses
• Dispute resolution and ongoing decision making: grievance procedures, committees,
consultation, renegotiation procedures
Compensation items might also be referred to as economic issues, and the other areas are called
administrative or language issues.
I. Preparing to Bargain
A. The longest portion of the time line of a negotiation process is the preparation stage.
B. The preparation stage usually begins at least several months before bargaining begins,
or even 18 months before the start of a particularly large, complex, or pattern-setting
negotiation; it usually involves the following stages:
1. Assembling a team—for the employer team, managerial roles typically
determine bargaining team responsibilities, whereas union bargaining
committees are usually elected by the rank and file.
2. Collecting information— Managers might collect external benchmarking data on
labor costs and other items, and should also review the organization’s financial
performance and strategic plans. The union negotiating committee will likely
survey the rank and file to identify common concerns and goals, and also consult
with its national union. Both sides should also conduct thorough reviews of how
the expiring collective bargaining agreement has performed. Areas of the
contract that have created problems, such as high levels of grievances, should be
noted. These pieces of information form the basis for each side to determine the
following five essential things, from which, both bargaining teams develop
targets, priorities, and strategies:
• Their interests (what they are really concerned about)
• Options for achieving their interests
• External benchmarks of fairness
• The other side’s interests
• Their best alternative to a negotiated agreement (BATNA)
3. From these, both bargaining teams develop targets, priorities, and strategies.
Extensive checklists for both employer and union negotiators are available to
help guide preparation activities.
4. Creating a strike contingency plan is another important aspect of bargaining
preparations.
5. Sixty days before the existing contract expires, or 90 days in the health care
industry, the parties provide official notification to each other and to the Federal
Mediation and Conciliation Service that they intend to negotiate a new contract.
The bargaining teams then Establish a schedule of bargaining sessions and set
ground rules.
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II. Bargaining Structure
A. An appropriate bargaining unit is defined during the representation process. This unit
is the minimal unit for collective bargaining.
B. Once certified, multiple units can be combined into a single larger bargaining unit for
the purposes of negotiating a contract if the parties agree. The resulting organizational
structure for the collective bargaining process is called the bargaining structure.
C. Bargaining structures range from decentralized to centralized; a decentralized
bargaining structure involves a limited group of employees in a single workplace; a
centralized bargaining structure involves numerous occupations, locations, and
companies (Figure 7.2).
D. The conventional wisdom is that in many situations, employers prefer decentralized
bargaining structures to have local unions compete against one another for jobs (this is
called “whipsawing”) and to tailor contracts to local situations.
E. Unions are generally believed to prefer more centralized structures because they can
consolidate their power and prevent whipsawing by negotiating uniform contracts (this
is called “taking wages out of competition”).
F. The bargaining structure in the United States is typically decentralized; the leading
explanations for this appears to be that employers have been able to use their greater
bargaining leverage to force more decentralization and also that both firms and
workers like the flexibility and opportunities for employee involvement in decision
making allowed by decentralized bargaining structures.
G. Another type of bargaining structure is pattern bargaining in which the union
bargains exclusively with a target company until an agreement is reached. The target
settlement is then used by the union as a pattern for subsequent negotiations in the
industry; this sequential bargaining process is an informal way of achieving a more
centralized bargaining structure.
H. Pattern bargaining can help unions take wages out of competition, but there are also
intraorganizational bargaining reasons.
I. When determining the desired bargaining structure, labor and management negotiators
face a trade-off between power and responsiveness.
J. Compared to a centralized bargaining structure, decentralized bargaining can be more
responsive to local needs because the issues are often more homogeneous and the
negotiators are close to their constituents; however, decentralized bargaining can also
reduce labor’s bargaining power.
K. As negotiations become more centralized, the number of issues increases, labor and
management negotiators become further removed from their constituents, and it is
more difficult to tailor local solutions for specific problems.
III. Bargaining Power and the Bargaining Environment
A. What happens at the bargaining table reflects differences in relative bargaining power
between labor and management. Bargaining power is “the ability to secure another’s
agreement on one’s own terms.” This ability depends on the relative costs of agreeing
and disagreeing; the side that can impose greater disagreement costs on the other will
be in a more powerful position.
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B. A critical reason that U.S. labor law protects workers’ efforts at forming unions and
engaging in collective bargaining is to balance bargaining power between a company
and a group of employees.
C. Strikes are the most important way for unions to impose disagreement costs on
employers, so relative bargaining power is closely related to a union’s strike leverage;
a union with strong strike leverage can impose significant costs on management
through a strike, and labor in this situation has strong bargaining power relative to the
employer, resulting in contract terms favoring the employees; the reverse is true if a
union has weak strike leverage.
D. Analyzing relative bargaining power—or strike leverage—consists of identifying the
important elements of the bargaining environment. The bargaining environment is
the diverse set of external influences on labor and management as they sit at a
bargaining table negotiating a contract.
E. The dimensions of the bargaining environment apply equally well to the private and
public sectors.
F. There are at least two key differences between the public and private sectors:
1. Although some services can be privatized or outsourced, essential services must
still be provided. Public sector management does not have the option of moving
to a different location in search of lower labor costs. This places an important
constraint on the business strategies available to public sector managers.
2. Public services are not bought and sold in economic markets; instead the levels
of services are ultimately determined by voters, taxpayers, and elected officials
in the political arena. This heightens the importance of the sociopolitical
dimension of the bargaining environment.
G. These differences lead some to argue that public sector collective bargaining should be
prohibited because public sector unions are too powerful. The evidence, however, does
not support the contention that public sector unions have unlimited bargaining power.
IV. At the Bargaining Table
A. Once at the bargaining table, negotiators need to use their communication,

relationship-building, and problem-solving skills to reach an agreement that both sides
find acceptable.
B. Most labor negotiations involve the renegotiation of an expiring contract, and this
contract anchors the negotiations. For starters, the side that wants to change the
contract traditionally makes the opening proposals that mark the beginning of
bargaining. From there, proposals are considered and counterproposals are made until
an agreement is reached.
C. Labor Negotiations as Theater
1. The dramatic structure of labor negotiations closely parallels a theatrical play.
The negotiators are actors and have roles, especially the lead negotiators with the
leading parts. The audience for the actors’ performances is other negotiators and
the negotiators’ constituents (upper management for management negotiators,
union members for the union negotiators).
2. The audience has certain expectations of how the performance should proceed—
that is, the constituents demand that their interests be strongly represented.
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3.
The lead negotiators need to put on a show. Table pounding and other aggressive
tactics demonstrate the strength of the negotiators not to each other but to their
constituents.
4. This theater takes place on the front stage of negotiations (the bargaining table)
for the other members of the bargaining committee to see.
5. There is also a backstage: experienced lead negotiators often meet with each
other in private with no other bargaining team members present. In these
meetings the negotiators can step out of their public roles, share information, and
explore wide-ranging options.
6. In contrast with the conflictual bargaining of the front stage, backstage
interactions can have a problem-solving flavor.
7. The dramatic structure of labor negotiations makes negotiations more complex
than they appear because of the following reasons:
• Negotiators have to decipher whether the other negotiators are putting on a
show or trying to communicate a legitimate point.
• Novice labor relations practitioners need to make sure they do not get
swept up in the performance or get emotionally involved.
• Participants need to know their roles, understand the nature of the entire
performance, and wait for their opportunities out of the spotlight
backstage.
8. This dramatic structure applies equally well to the grievance procedure. Novices
should be prepared for public performances during meetings and hearings to
resolve grievances, and should not take the process personally.
D. Negotiating Tools
1. Contract costing is one of the essential negotiating tools that participants use to
evaluate proposals by estimating their monetary costs; a lump-sum bonus is
perhaps the easiest proposal to cost—simply multiply the amount of the bonus
by the number of employees who will receive it.
2. Most proposals are more complex, and their costs might depend on employee
seniority, future staffing levels, and other complicating factors; contract costing
therefore often requires making projections of complex issues and negotiators
might disagree over these projections.
3. A bargaining book is another common tool for negotiators; each side uses three-
ring binders to create a complete record of the negotiation, including their
agenda, proposals, supporting documents, proposals and materials received from
the other side, and the minutes of each bargaining session.
4. It can also be useful for the bargaining book to include a summary sheet that
shows the status of each section (pending, agreed, or withdrawn) at the end of
each bargaining session; negotiators might also receive assistance from neutral
mediators.
E. Bargaining in Good Faith
1. The National Labor Relations Act (NLRA) requires negotiators to bargain “in
good faith” [Section 8(d)]. The dividing line between good faith and illegal bad
faith bargaining, however, is not always clear.
2. Following are some of the illegal bad faith bargaining:
• Unilateral change—occurs when an employer changes wages, benefits, or
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other terms and conditions of employment without first bargaining with

the union; this includes both during contract negotiations and when a
contract is in force; an employer can make unilateral changes in mandatory
bargaining items only after it has fulfilled its bargaining obligation by
bargaining to an impasse.
• Direct dealing—occurs when an employer illegally tries to circumvent
and undermine a union by interacting directly with the employees with
respect to bargaining issues.
• Refusing to provide information in certain situations—upon request, an
employer has an obligation to provide information to the union that is
necessary for representing the workers effectively.
• Surface bargaining—occurs when an employer or a union goes through
the motions of bargaining but does not sincerely try to reach an agreement;
it is a multifaceted concept, and in each case the NLRB looks at the
specific facts and the totality of conduct, including delaying tactics,
unreasonable bargaining demands, failure to designate an agent with
sufficient bargaining authority, withdrawal of already agreed-upon
provisions, making “take it or leave it” offers, refusing to make
counterproposals, and arbitrary scheduling of meetings.
3. Good faith bargaining requires that the parties must make “a serious attempt to
resolve differences and reach a common ground.”
4. A company can use its bargaining power to achieve a favorable settlement (hard
bargaining) but not to undermine the sincere pursuit of an agreement (surface
bargaining).
F. Mandatory Bargaining Items
1. Labor law also affects what is discussed at the bargaining table; specifically, the
NLRA requires good faith bargaining over “wages, hours, and other terms and
conditions of employment” [Section 8(d)].
2. National Labor Relations Board (NLRB) is empowered by the U.S. Supreme
Court to classify bargaining issues into the following three categories of
bargaining items (called the Borg-Warner doctrine after the name of the Court’s
decision):
• Mandatory bargaining items—wages, hours, and terms and conditions of
employment; employers and unions have an obligation to bargain over
these.
• Illegal bargaining items—bargaining items that would violate the law,
such as closed shop provisions, policies that involve racial discrimination,
or payment of wages below the legal minimum; employers and unions are
prohibited from bargaining over such items.
• Permissive bargaining item—it is the middle category that includes
everything not in the other two (mandatory bargaining items and illegal
bargaining items); employers and unions can bargain over permissive
items if they choose; but because they are outside the boundaries of the
NLRA, the NLRB cannot order bargaining on these issues, and employees
are not protected if they go on strike over these issues.
3. When there are disputes between negotiators about whether something is a
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mandatory bargaining item, the NLRB issues a ruling indicating whether the
specific issue is included in their interpretation of “wages, hours, and other terms
and conditions of employment.” Some prominent examples of mandatory and
permissive bargaining items are listed in Table 7.3.
V. Bargaining Subprocesses and Strategies
A. Richard Walton and Robert McKersie decomposed the overall labor negotiations
process into four types of bargaining (Table 7.4):
1. Distributive bargaining
2. Integrative bargaining
3. Attitudinal structuring
4. Intraorganizational bargaining
B. In Walton and McKersie’s terminology, these are the four subprocesses of
negotiations—the four types of bargaining that take place in collective bargaining to
negotiate a union contract.
C. The first two subprocesses—distributive and integrative bargaining—are the major
alternatives for negotiating terms and conditions of employment: adversarial
bargaining over conflicts of interest, and collaborative problem solving for issues of
mutual gain.
D. Collective bargaining in both the private and public sectors is a mixture of all four
subprocesses for three reasons:
1. Mainstream industrial relations views employment relationship conflict as a
mixed motive—a mixture of conflicts of interests and shared opportunities for
mutual gain—so both distributive and integrative bargaining are important.
2. The employer–employee–union relationship is a long-term, ongoing affair, so
attitudinal structuring is significant.
3. Both employers and unions have constituencies with diverse interests, so
intraorganizational bargaining is present.
E. Distributive Bargaining.
1. Distributive bargaining is the familiar type of negotiation used to resolve
conflicts of interests—in other words, to distribute the shares of the fixed pie. In
distributive bargaining, the more one side receives, the less the other side
receives, so this type of bargaining is also referred to as zero-sum bargaining.
2. Distributive bargaining is the classic vision of collective bargaining.
3. Wages, benefits, working conditions, and work rules are all viewed as
conflictual issues—improvements benefit the workers and harm the company’s
bottom line(and vice versa).
4. Employers need workers to produce goods and services, and workers need to
work to earn a living—but not at any cost.
5. Parties will pursue and enter a negotiated agreement when the terms of the
agreement are better than their alternatives; for workers, their alternatives
include going on strike and looking for work elsewhere; for employers, the
alternatives are taking a strike, trying to hire new employees, outsourcing, and
moving.
6. The best alternative to a negotiated agreement (BATNA) determines what terms
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are minimally acceptable to either side.

7. In distributive bargaining, each side’s BATNA can be thought of as their threat
point or resistance point—they will resist accepting terms less favorable than
their BATNA and will threaten to quit the negotiations and walk away if they
cannot obtain terms at least equal to their BATNA.
8. The major distributive bargaining strategies and tactics are rooted in power—
trying to strengthen the image of your own resistance point while seeking out
and weakening the other side’s impression of their own resistance point.
9. Some of the distributive bargaining tactics may include the following:
• Carefully controlling and selectively presenting the information shared
with the other side (typically only the chief negotiator gets to speak at the
bargaining table).
• Reacting emotionally to statements made by the other side (or not reacting
at all).
• “Educating” the other side about the implications of their proposals, and
staking out strong positions.
10. Pressure tactics might include increasing the other side’s costs of not making an
agreement, such as through union rallies that disrupt production and bring
negative publicity to the employer.
11. The careful sequencing of offers, counteroffers, and concessions lies at the heart
of the distributive bargaining process, and these tactics are designed to quicken
the pace and generosity of the other side’s concessions while reducing the need
to make your own concessions.
12. Hardball tactics such as lies, bluffs, threats, and intimidation are also sometimes
used to achieve these ends, but they may do more harm than good.
13. Conflicts of interests over wages, benefits, working conditions, and work rules
are a central component of collective bargaining in U.S. labor relations.
F. Integrative Bargaining
1. Integrative bargaining seeks to unify (integrate) the common interests of the
parties to a negotiation so that all can become better off; rather than trying to
split a fixed pie as in distributive bargaining, integrative bargaining seeks to
expand the size of the pie.
2. It is joint problem solving that relies heavily on trust and full communication.
3. It is also referred to as:
• win–win bargaining because both sides win by expanding the pie.
• mutual gains bargaining because of the focus on creating mutual gains
rather than resolving zero-sum conflicts.
• interest-based bargaining because of the focus on interests.
4. A key principle of integrative bargaining is focusing on interests rather than
positions.
5. Once an issue is identified, the key second step in the integrative bargaining
process is trying to understand each side’s fundamental interests. Once the true
interests are uncovered, the next step is generating options for satisfying these
interests using basic problem-solving strategies such as brainstorming.
6. The brainstorming approach of integrative bargaining requires high levels of
trust and extensive sharing of information; all members of each side’s bargaining
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committee—not just the lead negotiators—are expected to participate and

contribute ideas because during the brainstorming phase, the parties should be
trying to generate multiple options rather than worrying about which is the best
one; armed with multiple options and a set of agreed-upon standards, the
negotiators then determine the best solution by applying the standards to the
options.
G. Distributive versus Integrative Bargaining in Labor Relations
1. Many academics and consultants advocate replacing distributive with integrative
bargaining in labor negotiations to create more cooperative partnerships and
healthy workplaces and organizations in a competitive environment; although, in
practice it is exceptionally difficult.
2. If the employment relationship is characterized by mixed motive conflict, a
mixture of distributive and integrative bargaining is appropriate for collective
bargaining.
3. Dividing the fruits of integrative bargaining is a task for distributive bargaining,
so successful integrative bargaining ultimately creates a distributive bargaining
situation later.
4. It is common for people generally to assume that a negotiating situation involves
a conflict of interest—this is a mythical fixed-pie bias; because of this labor
negotiators default to distributive bargaining tactics and miss opportunities for
mutual gains through integrative bargaining.
5. Labor negotiators should start with integrative bargaining and then turn to
distributive bargaining when the mutual gains are exhausted; sometimes this is
called modified integrative bargaining.
6. Negotiators need to overcome not only the mythical fixed-pie bias but also their
old habits and strategies.
7. Joint labor–management training in preparation for integrative bargaining is
therefore often emphasized.
8. If collective bargaining is going to mix distributive and integrative tactics, it is
important that distributive bargaining over some issues does not poison the
relationship and prevent the successful pursuit of integrative bargaining on other
issues.
9. Seeing labor negotiations as theater also reveals the difficulty of switching from
traditional adversarial bargaining to more integrative approaches; traditional
distributive bargaining fulfills the social roles that negotiators must play.
H. Attitudinal Structuring
1. The difficulties of trying to increase the amount of integrative bargaining in the
collective bargaining process underscore the importance of Walton and
McKersie’s third subprocess: attitudinal structuring.
2. Integrative bargaining produces joint gains, distributive bargaining divides these
gains, and attitudinal structuring that establishes the broad quality of the
relationship between labor and management. Distributive and integrative
bargaining produce a written contract; attitudinal structuring creates a social
contract. Distributive and integrative bargaining are negotiation subprocesses for
managing transactions; attitudinal structuring is a negotiation subprocess for
managing relationships.
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3. The close personal interaction between labor and management negotiators

during the bargaining process provides the opportunity for the parties to build
trust and respect and therefore move toward a more cooperative and less
conflict-laden relationship.
I. Intraorganizational Bargaining
1. Intraorganizational bargaining is the bargaining subprocess that takes place
within an organization—within the union and within the ranks of management; it
results from the presence of diverse interests within the constituency of a
negotiator.
2. A diversity of interests is typically most visible on the union side; employees
with varying demographic characteristics may have different priorities—older
employees might be particularly interested in retirement benefits, younger
workers in vacation, female and minority employees in equal opportunity
policies, and workers with children in health insurance benefits.
3. Union leaders and rank-and-file workers also have different priorities; local
union leaders might be more concerned with institutional issues such as union
security, the number of union stewards, and access to employees at work; rank-
and-file workers might be more concerned with bread-and-butter employment
issues—compensation, benefits, and working conditions.
4. National union leaders need to balance the good of a specific bargaining unit and
the greater good of all the union’s members.
5. Intraorganizational bargaining is more visible on the union side of the collective
bargaining process because unions are political institutions—bargaining agendas
are determined with rank-and-file input, leaders are elected, and contracts are
approved by ratification votes.
6. Intraorganizational bargaining also occurs within the ranks of management. In
the bargaining process:
• Top management is particularly concerned with the bottom-line financial
impact
• Human resource professionals worry about the principles that are affected
or established
• Supervisors are interested in how work gets done
• Negotiators want an agreement
7. Intraorganizational bargaining occurs in varying ways including both distributive
and integrative bargaining tactics.
VI. Reaching Agreement
A. Even if it requires going right up to the bargaining deadline, successful negotiations

conclude with a tentative agreement; an agreement is only tentative at this stage
because union negotiators, and maybe the management side as well, must obtain
formal approval before the settlement becomes official.
B. On the union side, the approval process typically involves a contract ratification vote
by the rank and file, though some union constitutions provide for approval by an
elected executive committee; before a ratification vote, unions will usually have a
membership meeting in which the terms of the agreement are presented to the rank and
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file and intraorganizational bargaining occurs as the leaders try to convince the
members that the agreement is a good one; union members then have the final say by
voting to accept or reject the agreement.
C. On the employer side, management negotiators typically have the authority to agree to
a final settlement, and intraorganizational bargaining takes place before the final
agreement. However, if the union is told in advance, it is legal for management
negotiators to agree to a tentative settlement subject to upper management approval.
D. If the contract is not ratified or approved, the negotiators might return to the
bargaining table to negotiate a revised contract, or a strike or lockout might occur.
E. Once contract settlement is approved, it is signed by the employer and the union and it
is binding on both parties for the length specified in the contract (often three years).
F. Bargaining in the Public Sector
1. The process of collective bargaining in the public sector is similar to that in the
private sector—the need for thorough preparation is equally great, the
environment determines bargaining power, bargaining structures range from
very decentralized to centralized, and negotiations involve dynamic mixtures of
distributive bargaining, integrative bargaining, attitudinal structuring, and
intraorganizational bargaining.
2. Public sector bargaining includes additional complexities:
• The diversity of legal jurisdictions governing public sector labor relations
results in varying legal standards for bargaining across these jurisdictions.
Some states, for example, have sunshine laws that require public sector
negotiations to take place in the public (that is, out in the sunshine).
• While the mandatory/permissive distinction for bargaining items is
common in the public sector, some public sector jurisdictions place greater
restrictions on the allowable bargaining subjects.
• The management structures of public sector agencies are not as
hierarchical as in the private sector, and often elected officials and
professional managers share or compete for decision-making authority.
• Collective bargaining in the public sector is sometimes characterized by
multilateral bargaining—negotiations between more than two parties.
• Unions can appeal for support directly to the other groups, who in turn can
pressure the management officials at the bargaining table.
VII. The Contemporary Bargaining Process: Continuity and Change
A. With the more challenging competitive environment that started in the 1970s and
continues today, collective bargaining has become increasingly divergent.
B. A number of employers have tried to tackle labor cost issues through a forcing
strategy—aggressive distributive bargaining tactics to force weakened labor unions to
grant significant wage, benefit, and work rule concessions.
C. Other bargainers have tried to develop a more cooperative relationship through
attitudinal structuring.
D. Attempts to change the bargaining relationship between an employer and union from
adversarial to integrative highlight important issues of change management and
leadership for both corporate and labor leaders.
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E. Attempts to move away from an adversarial bargaining relationship are often

intimately related to broader desires to change the entire labor relations climate. But
such changes often run into sharp opposition.
F. Resistance to many types of organizational changes often stems from the following
factors:
1. Inertia
2. Self-interest
3. Peer pressure
4. Misunderstanding
G. These same elements underlie resistance to changing a bargaining relationship from
adversarial to more integrative.
H. Joint training programs to overcome resistance are important because of the following
reasons:
1. They help address misperceptions of integrative bargaining.
2. They can involve negotiators from both sides to reduce the impression that a
change is serving one side’s hidden agenda.
3. They can develop the participants’ skills so they are comfortable with the
process.
4. They can dispel the simplistic illusion of an all-or-nothing choice between
distributive or integrative bargaining.
Active Learning Ideas
1. Use the “Hey Buddy, Can you Spare a Computer?” exercise described in the lecture tips
section. Role sheets for each participant and teaching notes for this exercise are available for
printing in the instructor’s section of the textbook’s website at
http://www.mhhe.com/budd4e.
2. Have students form small groups and complete the reflection questions from “Labor Law
Discussion: Case 6: Does the Duty to Bargain Preclude Unilateral Wage Increases?” Discuss
the outcomes in class.
3. Use the fictitious newspaper article entitled, “PD, Miners Set to Bargain…Again,” to have
students create Mind Maps (see the lecture tips section) or a traditional outline of the
bargaining environment.
4. Use the accompanying bargaining simulation (The Zinnia, available at www.thezinnia.com)

to have teams of students negotiate a new contract. This is an ambitious exercise and is
probably done mostly or entirely outside of the classroom. See the separate teaching notes
for this exercise elsewhere in this instructor’s manual. As a shorter, in-class alternative, use
the situations described in “PD, Miners Set to Bargain...Again” or provide a situation to
students reflecting a nearby company, and ask them to simulate bargaining negotiations. Set
a time limit, then let the class evaluate who they thought “won” and why.
Reflection Questions
7-13
1. In a concise paragraph, paraphrase what you have learned about bargaining strategies
to inform a friend about the options for negotiating his or her starting salary and other
items for a new job.
Students’ answers will vary, but should contain references to doing research to find out what
similar jobs are paying, what the candidate has to offer the company, what he/she must have
and what is negotiable, and trying to come up with a win-win result. It might also be helpful
to practice the discussion before actually meeting with the hiring company.
2. Distributive bargaining is sometimes referred to as “win-lose bargaining.” Where does

this label come from? How can it be misleading? Also, some people casually
characterize any negotiated settlement as “a win-win.” Why is this accurate in
layperson’s terms but inaccurate in light of how negotiation experts use the term win-
win?
In distributive bargaining, there are only a limited number of pieces to the “pie,”so the more
that one side receives (wins), the less the other side receives (loses). The label can be
misleading because neither sides “loses” to the extent that if they reach agreement, this
agreement must be better than the alternative of no agreement (striking, looking for work
elsewhere, etc.). In layperson’s terms, this is why all negotiations are “win-win”—an
agreement that is better than both sides’ alternatives is beneficial for both sides. But
academics specifically use the term “win-win bargaining” to refer to integrative bargaining
situations in which the focus is on increasing the size of a pie, not distributing it.
3. Choose one of the scenarios from the “HR Strategy: Responding to a Union Organizing
Drive” box at the end of Chapter 6, and assume that the union wins recognition. As an
HR manager, how would you prepare for negotiations? What type of information
would be important for you? What type of bargaining priorities and strategies would
you develop? How would your answers change if you were a union representative?
Students’ answers will vary. Following are the possible responses:
Acme Auto Parts: Contact the other small companies to see how they have been dealing
with the situation. It would be important to know where workers were willing to make
concessions and if the other companies have come up with any creative strategies to satisfy
workers and yet keep a healthy bottom line. My priorities would be to satisfy workers while
keeping a healthy bottom line. My strategy would be to keep financials secret and come up
with alternatives that would not directly affect company profits, such as a longer lunch hour
or additional time off. I would research how to have a decertification election! If I
represented the union, it would be important to know where the company might be willing to
make concessions and if the union has come up with any creative strategies to pressure the
company into getting workers what they want. My priorities would be to satisfy workers
while keeping a healthy bottom line. My strategy would be to have solid reasons for worker
requests, but also come up with alternatives that would not directly affect company profits,
such as a longer lunch hour or additional time off.
The Zinnia: I would prepare a list of all the ways in which Zinnia matches current union
bargaining items. I would research ways to cut benefit costs in case Zinnia is forced to
match more generous union benefit packages. My priorities would be to satisfy workers
while keeping a healthy bottom line. My strategy would be to meet with the unionized hotel
HR people to learn from their experience and formulate ways to increase our bargaining
7-14
power in the future. If I represented the union it would be very important to know the types
of items the union had gained in other hotels. My priority would be to equal or surpass this
level by using the other hotels as a precedent.
School District 273: I would prepare by being aware of the current processes and benefits
available to the teachers, anticipate what additional items they may ask for, and compile a
list of reasons why or why not the district would be able to provide those items. It would be
important for me to know what the teachers want, and what the board is willing to give. My
priorities would be to reasonably satisfy the teachers and prevent them from going on strike.
My strategy would be to avoid an “us versus them” atmosphere and to again have solid
information to back up any items I knew the school board might be forced to deny. If I
represented the union, I would need to know what the teachers were asking for and why. I
would need to know what the board was actually capable of providing. I would meet with
the teachers to thoroughly understand their demands, and compile a list of ramifications if
the board did not meet with the teacher requests. I would start off using persuasion, but
would not hesitate to use a strike.
Woodville Health care: I would prepare by trying to anticipate what the doctors will ask for
and compile a list of solid reasons why the company may not be able to comply. I would
research past union successes and failures to understand what their “weak points” might be.
I would need a thorough understanding of where the provider might be willing to bend. My
priorities would be to satisfy the doctors while keeping a healthy bottom line and happy
executives. My strategy would be to gather hard evidence of the inappropriate union
campaigning and use that as a tool, i.e. the information they present may not be true, so how
can the company negotiate? If I represented the union I would portray the provider as the big
bad wolf and the doctors as abused pillars of social society. I would gather all evidence
possible to show that the unreasonable restrictions were placed on the doctors out of greed,
and not in the best interests of the patient.
4. Why is it difficult for labor negotiators to switch from traditional to integrative

bargaining? What recommendations would you make for negotiators trying to make
this switch? Why is it more difficult for union negotiators to make this change
compared to company negotiators?
Students’ answers will vary. Following are the possible responses:
Seeing labor negotiations as theater reveals the difficulty of switching from traditional
adversarial bargaining to more integrative approaches. Traditional distributive bargaining
fulfills the social roles that negotiators must play: “The traditional process is stable because
the public rituals that are so common to it—displays of opposition, representation, and
control—help negotiators achieve their personal and strategic goals and to manage the many
political pressures that they face.”
One of the leading issues for labor–management relationships is what type of bargaining to
use. Many academics and consultants advocate replacing distributive with integrative
bargaining in labor negotiations to create more cooperative partnerships and healthy
workplaces and organizations in a competitive environment. But achieving this change in
practice is exceptionally difficult. The trouble stems partly from the overly simplistic
illusion of a forced choice between distributive or integrative bargaining. If the employment
relationship is characterized by mixed motive conflict, a mixture of distributive and
integrative bargaining is appropriate for collective bargaining. Dividing the fruits of
7-15
integrative bargaining is a task for distributive bargaining, so successful integrative

bargaining ultimately creates a distributive bargaining situation later.
5. Use the three fictitious newspaper articles that follow this question to analyze the
bargaining environment for contract negotiations between copper producer Phelps
Dodge and Morenci Miners Local 616. Create a traditional outline or a mind map (a
radial outline) for one of the years. Use the major dimensions of the bargaining
environment as your major categories. Note that the newspaper articles are based on
fact but have been embellished for educational use.
Student answers will vary. Following are the possible responses based on the article
published in 1983:
Legal—The Supreme Court is poised to rule whether or not management has the right to
replace striking workers during a labor dispute, overturning the 1938 Mackay ruling. In the
past, MML616 has had to strike to get Phelps Dodge to agree to their demands. This could
put Phelps Dodge in an excellent position and take away some of the union’s power if they
become afraid to strike and be replaced.
Economic—The economic situation is also in favor of Phelps Dodge in regards to contract
negotiations. The recession has shut down some of coppers biggest customers and Phelps
Dodge is currently losing 10 cents on every pound of copper it produces. While economic
times are probably bad for workers, you can’t get blood from a stone. Also, while Phelps
Dodge needs skilled workers in some parts of their operations, there are recently laid off
workers waiting on the sidelines and no doubt many of them possess the skills to step in.
The question is whether or not they would cross the picket line. Without a paycheck for six
months, it is quite likely Phelps Dodge could find a number of takers.
Technical—One aspect of this dimension that favors Phelps Dodge is that new technology is
emerging that will allow the company to extract usable copper from its piles of previously
unusable waste. This provides Phelps Dodge will a low cost source of revenue.
Political—In this particular year, politics are on the side of Phelps Dodge. The firing of the
air traffic controllers is still fresh in everyone’s minds, and President Reagan, believed to be
unsympathetic to unions, is the one making appointments to the National Labor Relations
Board. Labor’s bargaining power is weakened by the current “hostile” climate regarding
labor relations.
Social—Unions only represent a small fraction of the workforce so it’s difficult for labor to
rally support, especially when there are lots of laid off workers in a concessionary
environment.
Business—Phelps’ current business strategy is most likely to make a profit rather than
continuing to lose money on the copper that they produce. Moreover, Phelps Dodge
essentially has a low-cost strategy so an adversarial approach might not be as costly as for a
company with a high-quality approach that needs loyal workers.
Institutional—Labor has been even or the underdog in the last six categories; however their
advantage in this category swings some major weight. Copper unions have traditionally
followed a practice of pattern bargaining, and in a recent settlement wage rates were
preserved and benefits, including COLA, only suffered minor benefit concessions.
Labor Law Discussion
7-16
Case 6: Does the Duty to Bargain Preclude Unilateral Wage Increases?
Teaching Notes
The Issue
The union was arguing that Winn-Dixie was failing to bargain in good faith by unilaterally
implementing the wage increase.
UNFAIR LABOR PRACTICES (SECTION 8)

(a) It shall be an unfair labor practice for an employer
(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7;
(5) to refuse to bargain collectively with the representatives of his employees, subject to the provisions
of section 9 (a).
SECTION 8
(d) For the purposes of this section, to bargain collectively is the performance of the mutual obligation of the
employer and the representative of the employees to meet at reasonable times and confer in good faith
with respect to wages, hours, and other terms and conditions of employment, or the negotiation of an
agreement, or any questions arising thereunder, and the execution of a written contract incorporating any
agreement reached if requested by either party, but such obligation does not compel either party to agree
to a proposal or require the making of a concession...
REPRESENTATIVES AND ELECTIONS (SECTION 9)

(a) Representatives designated or selected for the purpose of collective bargaining by the majority of the
employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the
employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of
employment, or other conditions of employment...
So in essence, the issue is whether unilateral changes, even after the union has had a chance to
make counterproposals, satisfy the requirement of bargaining in “good faith.”
Discussion
Does the unilateral change fulfill Winn-Dixie’s obligation to collectively bargain with the union?
The employer seemed determined to implement the wage increase whether or not the union
agreed (note how the company wanted to put it into effect “immediately”). Further, the company
stated it was proceeding even after the union disagreed--is this real bargaining? This seems more
like “take it or else,” not good faith bargaining. The Union did not really have a chance to
bargain; rather it had a chance to agree to management’s previously-decided actions. That is not
bargaining.
If this was bargaining, the employer could essentially make any changes it wanted by simply
notifying the union. This violates the principle of collective bargaining.
The lack of impasse is quite important. Remember, the NLRA requires bargaining in good faith,
it does not require agreement. After an impasse is reached, the firm can make unilateral changes
(bargaining to an impasse fulfills the duty to bargain obligation).
7-17
Rulings
The NLRB ruled that the company was in violation of Sections 8(a) (5) and 8(a) (1) of the NLRA
by making unilateral changes before bargaining to an impasse.
Remedies
The NLRB issued a cease and desist order requiring Winn-Dixie to bargain collectively with the
union. Additionally, Winn-Dixie was required to post a notice regarding the NLRB order. The
NLRB’s order also stated that “nothing herein shall require Respondent to vary such minimum
salary schedules as are already established.” Note that the NLRB’s decision was issued five years
after the wage increase was implemented.
What is an Impasse?
This case raises the issue of what is an ‘impasse’? An employer (and a union) must bargain to an
impasse, but this doesn’t tell us when an impasse occurs. Unfortunately, “impasse” is another
aspect of labor law that is fairly ambiguous and often requires NLRB interpretation of the
specific facts of a case to make a ruling. For example, in North Star Steel Co., 305 NLRB No. 7
[139 LRRM 1089] (1991), the administrative law judge found that an impasse existed because
“the parties had met for a number of bargaining sessions, failed to reach agreement, and did not
schedule any negotiating sessions after July 18.” In North Star Steel, the board quotes Taft
Broadcasting, 163 NLRB 475, 478 (1967) for guidance in the determination of an impasse:
Whether a bargaining impasse exists is a matter of judgment. The bargaining history, the good
faith of the parties in negotiations, the length of the negotiations, the importance of the issue or
issues as to which there is disagreement, the contemporaneous understanding of the parties as to
the state of negotiations are all relevant factors.
These are all vague and situation-specific, so NLRB interpretation is required. In North Star
Steel, the NLRB did not find an impasse because “the record fails to show how many negotiating
sessions were held; the substance of many of those sessions; the importance of the issue, or
issues, separating the parties; and the understanding of the parties as to the state of negotiations.”
Note that impasse is a defense to charges of a unilateral change and thus, the burden of proof is
on the company.
For an example of a union as an employer being charged with failing to reach an impasse before
unilaterally implementing changes, see International Association of Fire Fighters, 304 NLRB No.
47 [139 LRRM 1208] (1991), in which the union representing International Association of Fire
Fighters staff (OPEIU) cancelled one bargaining session and the employer (the Fire Fighters
Union) declared an impasse and unilaterally implemented changes.
What is ‘Good Faith’ Bargaining?
This case also raises the issues of what “good faith” bargaining is. In NLRB v. Insurance Agents,
361 U.S. 477, 485 (1960), the Supreme Court stated that “collective bargaining...is not simply an
occasion for purely formal meetings between management and labor, while each maintains an
attitude of take it or leave it; it presupposes a desire to reach ultimate agreement, to enter into a
collective bargaining contract,” and that the parties must deal with each other in a serious attempt
7-18
to adjust differences and reach common ground. But what is “serious?” Various cases give
negotiators the following guidance:
• Counterproposals must be presented when another party’s proposal is rejected (Majure
Transport Company v. NLRB, 198 F.2d 735 (5th Cir. 1952))
• Evasive behavior not permitted (Na-Mac Product Corp., 70 NLRB 298 (1946))
• A position with regard to contract terms may not be constantly changed (NLRB v. Norfolk
Shipping & Drydock Corp., 172 F.2d 813 (4th Cir. 1949))
• Must be a willingness to incorporate oral agreements into a written contract (Southern
Saddlery Co., 90 NLRB 1205 (1950))
The opposite of these behaviors is surface bargaining (refusing to respond to union proposals,
maintaining predetermined and inflexible positions, using delay tactics to prompt an impasse,
etc.). Other examples of bad-faith bargaining include:
• Refusing to furnish info pertaining to a wage increase for non-bargaining unit employees
(Brazos Electric Power Co-Op, 241 NLRB 1016 (1979))
• Refusing to grant members of the union’s negotiating committee unpaid leave so they
could bargain while also refusing to bargain during nonworking hours (Indiana &
Michigan Electric Co., 229 NLRB 576 (1977))
Citation
This case is Winn-Dixie Stores, Inc. and United Food and Commercial Workers International
Union, AFL-CIO (243 NLRB 972 (1979).
Suggested Class Discussion or Short Essay Topics
1. Contracts typically last one to five years, with three years being quite common. What are the
advantages and disadvantages to the company and labor regarding a one year, three year,
and five year contract?
2. Give an everyday example of distributive bargaining and integrative bargaining not cited in
the text.
Internet Exploration
1. Search the Internet for descriptions of integrative bargaining in practice (for example, search
for “teachers and interest-based bargaining,” or some other occupation). What types of
benefits are described? Are the areas of resistance consistent with Table 7.6 in the textbook?
2. Go to the NLRB website (www.nlrb.gov), navigate to the launch page for NLRB decisions
(“Board Decisions”), and find the search box. Search for decisions containing the text
“surface bargaining.” What types of negotiator behaviors were ruled to be surface
bargaining? What behaviors were acceptable as fulfilling the good faith bargaining
standard?
3. Some unions use the Internet to publicize their bargaining goals and to keep their members
informed about the status of negotiations. An extensive example is
7-19
www.geworkersunited.org. You can find other sites by using the search term “bargaining
update.” What types of issues are emphasized on these sites? What issues seem common
across different unions? What issues are specific to certain occupations? Do the sites suggest
a more adversarial or cooperative bargaining relationship?
4. Explore the LEARN WorkFamily website (www.learnworkfamily.org). Why might labor

negotiators need particular help in the area of work-family issues? In what concrete ways is
this a useful site for labor negotiators? Can you find lessons that apply to other subjects of
bargaining in addition to work-family issues?
Other Links
Harvard Program on Negotiation: http://www.pon.harvard.edu
Yale University Federation of Hospital and University Employees: http://www.yaleunions.org/
Suggested BusinessWeek Articles
1. “Why GE Buckled on Pension Costs” (June 16, 1973, pp. 92-93)

2. “Truckers Fragment Before the Bargaining” (December 25, 1978, pp. 37-38)
3. “A Pilot Contract That Sets a New Course” (August 17, 1981, pp. 27-29)
4. “Only Some Baby Bells Are Talking Tough” (August 18, 1986, pp. 41-42)
5. “GE and Labor: This Could Get Ugly” (June 2, 2003, pp. 54-55)
(http://www.businessweek.com/stories/2003-06-01/ge-and-labor-this-could-get-ugly)
6. “Twilight of the UAW” (April 10, 2006, pp. 62-64)
(http://www.businessweek.com/stories/2006-04-09/twilight-of-the-uaw)
7. “What Could Dull Toyota’s Edge” (April 28, 2008, p. 38)
(http://www.businessweek.com/stories/2008-04-16/what-could-dull-toyotas-edge)
7-20

Labor Relations Striking A Balance 4th Edition Budd Solutions Manual

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Labor Relations Striking A Balance 4th Edition Budd Solutions Manual

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Labor Relations Striking a Balance 4th

Edition Budd Solutions Manual

1. Sketch the steps of the bargaining time line.

II. Bargaining Structure

III. Bargaining Power and the Bargaining Environment

IV. At the Bargaining Table

A. Once at the bargaining table, negotiators need to use their communication,

other terms and conditions of employment without first bargaining with

V. Bargaining Subprocesses and Strategies

are minimally acceptable to either side.

committee—not just the lead negotiators—are expected to participate and

3. The close personal interaction between labor and management negotiators

VI. Reaching Agreement

A. Even if it requires going right up to the bargaining deadline, successful negotiations

VII. The Contemporary Bargaining Process: Continuity and Change

E. Attempts to move away from an adversarial bargaining relationship are often

Active Learning Ideas

4. Use the accompanying bargaining simulation (The Zinnia, available at www.thezinnia.com)

2. Distributive bargaining is sometimes referred to as “win-lose bargaining.” Where does

4. Why is it difficult for labor negotiators to switch from traditional to integrative

integrative bargaining is a task for distributive bargaining, so successful integrative

Labor Law Discussion

Case 6: Does the Duty to Bargain Preclude Unilateral Wage Increases?

UNFAIR LABOR PRACTICES (SECTION 8)

REPRESENTATIVES AND ELECTIONS (SECTION 9)

What is ‘Good Faith’ Bargaining?

Suggested Class Discussion or Short Essay Topics

4. Explore the LEARN WorkFamily website (www.learnworkfamily.org). Why might labor

Suggested BusinessWeek Articles

1. “Why GE Buckled on Pension Costs” (June 16, 1973, pp. 92-93)

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