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Mgt 485/WmRoss
Document (HP): MGT-Sunrise_Bakery_v_UFCW_2017~485
Last modified: August 9, 2017
MGT 485 Negotiation Exercise; Information for MANAGEMENT Negotiators:
Sunrise Bakery
vs.
United Food & Commercial Workers’ Union, Local 1189
Background:
This mock negotiation exercise is loosely based on an actual company and one of its labor unions: Assume that the United Food & Commercial Workers’ Union, Local 1189 represent all regular full- and part-time employees of Sunrise Bakery in Hibbing, Minnesota. This includes employees working in sales (including mail-order sales, route sales, and delivery van drivers traveling to stores in nearby towns), wrappers (people who put baked goods in packaging), fryers (think: donuts), and bakers’ helpers.
The firm owns the Sunrise Deli and also has recently expanded into the twin cities with Sunrise Market/Sunrise Gourmet Foods (http://www.monitorsaintpaul.com/sunrise-market-expands-from-iron-range-to-st-paul/ ). Assume that the union does not currently represent any of those employees.
Sunrise Bakery is a privately held company, which limits access to financial information about the firm. According to this website (http://www.manta.com/c/mmc10jz/sunrise-bakery ) the bakery employs six people and has annual revenues of about $620,000. However, according to this website (http://profile.infofree.com/biz/MN/Hibbing/Sunrise+Bakery/11132550842250 ), the bakery employs 19 people and has annual revenues between $1 million and $2.5 million. Finally, according to this website (http://www.whereorg.com/sunrise-bakery-8000053 ), the bakery employs 25 and has annual revenues of $1.4 million. (This illustrates a common problem when preparing for bargaining: each side will sometimes have different information, based on the sources that were consulted when doing research.)
The business seems to have been growing in recent years: Therefore, for this class exercise, we will assume that the union represents 25 people and Sunrise Bakery has revenues of $2.5 million.
For simplicity sake, assume that 20 of the 25 employees in the bargaining unit currently work 40 hours per week (2,080 hours per year) and five employees work part-time (20 hours per week or 1,040 hours per year). There is only one shift. The union’s website is: http://www.ufcw1189.org/ (there is also a specific web page about the 2015 negotiations at: http://www.ufcw1189.org/articles/sunrise-bakery-member-ratifies-1-year-agreement ). For a brief overview of Sunrise, visit: http://www.sunrisebakery.com/ . Also see the background “our story” link on the webpage.
The UFCW is negotiating a new collective bargaining agreement (contract) with the Sunrise Human Resource (HR) office. The actual contract was set to expire on July 31, 2016. However, for the purpose of this exercise, assume that the parties agreed to an extension and that the contract will expire at 11:59 p.m. on December 10, 2017. Both sides now want to finish contract negotiations. The union members are growing restive—if they don’t get a contract soon, there may be an unauthorized strike, which would be undesirable for the union as well as the company. Therefore, both sides agree that it is time to get serious about contract negotiations, even arbitrating any unresolved issues, if necessary.
Please be aware that:
(1) As explained on page 9 of the contract, the pension plan is a 401(k) plan administered by the company. The employer pays $1.00 per hour worked, as described in Article 12.6 of the contract. There does not appear to be any “matching” of employee contributions, although presumably, employees are free to contribute some of their own funds, if they wish.
(2) Local health plans are administered through the Northern Minnesota-Wisconsin Area Retail Food Health and Welfare Fund, as named on page 14 of the contract. In class, we will discuss several types of benefits, including pensions and health plans. It is widely known that both sides intend to consider employee benefits at the upcoming contract talks, along with other contract clauses. A plan summary (from 2012) is found here: http://www.ufcw1189.org/sites/ufcw1189.org/files/northernHealthcare.pdf and benefits are described here: http://ufcw1189benefits.com/ . You can learn a bit about the “financial health” of this fund at: https://projects.propublica.org/nonprofits/organizations/416175286
You have been assigned to the MANAGEMENT side in this activity. Do not show these instructions – or your completed work to any other team.
General Instructions:
DO NOT PESTER EITHER THE UNION OR THE COMPANY FOR INFORMATION AS YOU PREPARE FOR THIS EXERCISE. They have their jobs to do; they will not do your research for you.
You will be given the following information for this exercise:
1. These instructions and background information
2. A copy of the current contract.
3. A copy of the Medical Benefits Plan and a bit of information about company financials are available on the Internet (see previous page).
As you prepare for negotiations, you should be prepared to look up additional information using the Internet, the library, and information you can obtain from other sources, as needed, such as:
1. Murphy Library’s Lexis-Nexus database has labor-related information.
a. Go to the Murphy Library website at UW-L, where databases are listed by title:
http://libguides.uwlax.edu/az.php Select “L” and then “Lexis-Nexus Academic”
b. In the upper right corner of the screen, you will see
“Source Directory: Find or Browse”. Select “Browse”
c. You will see “Browse Sources by:” Select l “Area of Law”
d. Filter by: Country [United States]
e. Trail: Area of Law: Labor and Employment Law (click on folder title)
f. This yields a list of periodicals and other sources of information. Select the
sources you want to use by clicking on the box to the left of each title þ.
g. At the far right of the screen you will see the number of sources you have
selected. Click the red box that says
h. Now you will see a red-bordered search box. Enter your search terms. Have fun!
Example: You may want to sort results by “Newest to Oldest”
2. Basic Patterns in Union Contracts. On “open shelves” at Murphy Library
3. Monthly Labor Review. Available at Murphy Library and at http://stats.bls.gov/mlr/ or http://stats.bls.gov/opub/mlr/mlrhome.htm or http://purl.access.gpo.gov/GPO/LPS806.
4. If you do a “google search” you can find websites containing .pdf copies of current UFCW contracts with other firms. You may want to compare their wages and benefits with your contract. Bakery, Confectionary, Tobacco, & Grain Millers union also represent some bakery production workers; the International Brotherhood of Teamsters represent all sorts of vehicle operators, from delivery truck drivers to hearse drivers. Here are a few websites where you can find contracts:
(1) http://digitalcommons.ilr.cornell.edu/blscontracts/
(2) http://www.dol.gov/olms/regs/compliance/cba/index.htm (a few contracts are scanned upside down!)
(3) http://www.ufcw1189.org/sites/ufcw1189.org/files/Kowalski's%20Central%20Bakery%202013-2014.pdf
(4) An interesting group within the Teamsters called, Teamsters for a Democratic Union (TDU)
has copies of some Teamsters contracts on its website: http://www.tdu.org/
(5) http://ufcw7.org/mediacat-library/ Several UFCW contracts.
(6) Rutgers links to eight contracts: http://rutgers.v1.libguides.com/content.php?pid=151685&sid=1287747
(7) Here’s a revised contract with the United States Bakery. It is fun to see the revisions:
http://www.jc28.org/blog/wp-content/uploads/2011/08/USB-Fully-Recommended-Settlement-Offer_Language.pdf
(8) You can search for all of the Teamsters contracts with various employers (including a
bakery) in Alberta, Canada, here: http://humanservices.alberta.ca/apps/cba/search.asp
(9) Another database of labor contracts: http://www.irle.berkeley.edu/library/CBA.html
(10) 15 labor contracts are linked here: http://contracts.onecle.com/type/155.shtml
(11) Links to older labor contracts: http://www.llrx.com/columns/reference24.htm
(12) http://www.sdc.gov.on.ca/sites/mol/drs/ca/Manufacturing%20%20Consumables/311-42668-16.pdf
PHASE I: Creating Your “Preparation For Bargaining” Notebook
What you will hand in:
Preparation is the single most important ingredient in negotiations; if you are not prepared, you are at the mercy of the opposing team. Therefore, your negotiating team will hand in to me a “Preparation for Bargaining” notebook. This notebook is a group effort, so feel free to divide the work among your team members. However, DO NOT show your notebook to any other team – even other teams on your side.
The notebook is to be divided into seven parts:
I. Constituent Preference information,
II. Background information,
III. Contract content information,
IV. Contract language,
V. Personality information,
VI. Bargaining process information,
VII. Completing the Team Goals Worksheet.
·For your first assignment, please complete Parts I, II, and III. (9% of your course grade)
·For your second assignment, please complete Parts IV and V (9% of your course grade)
·For your third assignment, please complete Part VI. (9% of your course grade)
·For your fourth assignment, please complete Part VII (3% of your course grade).
For each part, you will need to try to answer as many of the questions as you can. You do not have to answer all of them within each part, but be aware that the other side might be better prepared than you are if you do not answer them all. You should do the following for each question that you answer:
1. Locate the answer through research, if necessary. Include a photocopy or printout of your information along with a reference (and web link, if relevant) for where to find it.
2. Answer the question. All answers must be typed.
3. Relate the answer to your mock negotiations. Which side benefits more from this information? If your side, how can this information be useful to your side? If the other side, how can the information be useful to the other side and what will you do/what information do you have to counteract it? Again, all remarks must be typed.
First Assignment: Complete Parts I, II, & III, below:
Part I: MANAGEMENT Constituent Information about the Current Contract:
A survey was given to all owners, managers, and bakers (N=10). Their responses are tallied below.
Assume that your survey generated the following results:
Article of the Contract
/Topic/Area of Possible Concern/Contract Proposal
/YES
This is a concern; negotiate something better for the Bakery /NO
This is NOT a concern; no need to negotiate something better1 / Make it easier to contract out union jobs / 3 / 7
1 / Need to charge a 5-10% fee for collecting union dues. / 6 / 4
1 / Need to add a strong Mgt Rights clause. / 9 / 1
1 / Need to be able to assign workers to various jobs (across categories) and to cross-train w/o union filing grievances. / 8 / 2
2 / Too much paid overtime. It is confusing as to when workers get 1.5x vs. 2x normal pay. Make all extra-work clauses pay 1.5x. / 6 / 4
2 / Article 2.6: Don’t guarantee minimum of 4 hours -- pay only for actual time worked. / 5 / 5
3 / Article 3.1: Lengthen the probationary period from 30 days to one year / 6 / 4
4 & 10 / Only discharge (and negotiation) are discussed. We need a list of rules. We also need a progressive discipline clause (e.g., 1st offense = 1 day suspension, 4th offense = termination) for some violations. / 4 / 6
4 & 10 / Employee discipline records stay on file for 5 years. / 9 / 1
5 / We need to offer one day per year as a “floating” holiday and/or for funeral leave. / 4 / 6
5 / Too many paid days off and/or paid holidays. / 7 / 3
5 / Work on holidays is rare. If such work is done, it should be paid at 1.5x hourly rate. / 3 / 7
6 / Reduce the number of fully-paid vacation days to save money. / 2 / 8
10 / Reduce number of days a worker has to file a grievance from 10 to 5 working days. / 5 / 5
11 / If a customer's union is on strike, Sunshine workers are only paid for hours worked. / 10 / 0
12 / Offer $20,000 in life insurance coverage with the workers paying at least 50% of monthly life insurance premiums. / 6 / 4
12 / Need to shift more of health-care costs onto the worker, with bakery paying less. / 7 / 3
12 / Offer five paid sick days annually to those with at least one year seniority. / 5 / 5
13 / Need clearer & less generous uniform allowance. What is paid for? How often? / 9 / 1
13 / Need a less generous uniform allowance. / 4 / 6
Article of the Contract
/Topic/Area of Possible Concern/Contract Proposal
/YES
This is a concern; negotiate something better for the Bakery /NO
This is NOT a concern; no need to negotiate something better14 / The renegotiation part of the “Separability” (also called “Zipper”) clause is vague. Deadline for agreement? What happens if we don’t agree? Unclear. / 6 / 4
15 / Need a longer contract. / 10 / 0
Appendix “A” / Keep across-the-board wage increase under 3.50% per year. / 10 / 0
Other: / Converting some union jobs to "Independent Contractor" (non-employee) status will save the Bakery money. / 5 / 5
Delivery drivers (sales route drivers) need more training. / 8 / 2
Offer a partially paid leave of absence/ disability leave (less than 50% of wage) that lasts six months (to coordinate benefits with Social Security) / 4 / 6
Re-Negotiate issues that union won in arbitration during the previous contract. / 6 / 4
Need a “successorship” clause if Bakery is sold. / 2 / 8
Poll -- Do you authorize bargaining team to lock union workers out if talks collapse? / 7 / 3
Create permanent two-tier wage system OR lower the starting wage. / 4 / 6
Video cameras and GPS monitoring added to trucks for evaluating drivers. / 8 / 2
Male employees should be clean-shaven, not wearing beards. / 7 / 3
Questions for thought and discussion in your report:
1. Which areas were seen as “problem areas” or “topics of concern” by a substantial number (more than one-half) of the respondents? Discuss EACH “problem area” (or the requested contract modification) briefly in light of both the current labor contract AND in terms of the “typical” labor contract for this group of workers. This will involve a bit of library or Internet research to discover what the “typical” contract says. (If you cannot find average information, at least use one other contract for bakery workers for comparison purposes.)
2. Why do you suppose those problem areas were identified as such by the respondents? (Your answer may involve some speculation as to why they answered as they did)
3. Make a list of your team’s tentative “top ten bargaining objectives” based on this survey. What five areas of the contract should definitely NOT change, based on this survey?