Jul
17
How labor contracts are negotiated
Filed Under Sunrise on KGMB9
The layoff announcement at the Honolulu Advertiser, the contract settlements at TheBus and the Holiday Inn Waikiki, the longstanding labor unrest at the Pacific Beach Hotel, and the closure of Aloha Airlines, have all brought back memories of past experiences as a contract negotiator. I thought I would dredge up a few of these memories here to encourage all sides to try to see things from each other’s point of view.
Here’s my background in this area. At the Mutual Broadcasting System I was an AFTRA shop steward and then promoted into management. At United Press International I was a Wire Service Guild shop steward and then promoted into management. At both places I was on contract negotiating teams from both sides of the table.
The first observation I’ll make is that there is a remarkable similarity to the job of union negotiator and that of management negotiator. In each case you are not only bargaining for the best possible deal from the viewpoint of your own side, but you also have to bargain with your own backers, some of whom will invariably believe that you should have won more.
The union negotiator can be hamstrung by the expectations of his own rank-and-file, while the corporate negotiator can be hamstrung by the expectations of other members of management who do not themselves do any negotiating, or, in other cases, by orders from a head office in some other time zone.
At Oahu Transit Services, the company the City & County of Honolulu created to run TheBus, for example, the city tells the transit company what its budget is. The Teamsters negotiate with TheBus, but beyond a certain point the union may sometimes find itself negotiating on a second front with the city to try to get it to free up more funds.
At The Honolulu Advertiser, local management answers to Gannett corporate headquarters and may have its hands tied in certain respects relating to everything from money to how bargaining is handled. (We tried to get both sides on “Sunrise” separately Thursday morning; the union agreed but management didn’t. Sometimes it works the other way around. But I don’t automatically assume the local person says no because I know there are sometimes specific procedural orders from headquarters.)
At the Pacific Beach Hotel, the ILWU would like to negotiate with the daughter of the founder, but she has delegated the management of the hotel to others, and those others have shielded her from negotiations. They are right to do so, however, if she is not a professional bargainer herself.
At UPI, one of our CEOs wanted to intercede personally in contract negotiations but was dissuaded from doing it by our professional negotiator, a lawyer who specializes in contract talks. The lawyer explained that you hold the CEO in reserve in case a stalemate ensues and you decide to make one last offer to try to break it. Both sides use this technique.
Certain professional courtesies are common in labor talks, too. For example, I was visibly surprised on the air Thursday when the newspaper union leader Wayne Cahill said he found out about the Advertiser layoffs from a writer. I blurted out that it was a breach of etiquette if he didn’t get a courtesy call from management.
It is, generally speaking, considered good form for the two sides in contract negotiations to refrain from public comments on bargaining so long as the bargaining is progressing well. I have seen this etiquette erode over the years, partly because so many talks drag on for months or years.
It’s also true that management tends to have a predisposition not to talk while unions are under pressure to make public comments. This is because corporations get into the habit of not blabbing every little bit of information their competitors could use, and secrecy can become a habit, while union leaders are only as strong as their membership and sometimes need to rouse their members if they are to negotiate a ratifiable contract.
Talking versus keeping things to yourself has an analog in contract talks where an employer is seeking concessions.
Companies that are in financial trouble will sometimes also show those financials to their labor unions when asking for givebacks. If they think a union leader will have a tough job selling givebacks to rank-and-file, but the financial problems of the company are genuine, they will prove to the union leaders that this is so, allowing him to tell his people he saw the books and, yes, the company is toast unless it gets X and Y and Z.
This flies in the face of the strong desire not to talk about such stuff, and one reason it happens is that the same information has to be shown to prospective buyers during due diligence. If a company is not for sale, the management is less likely to do this.
When a local operation is part of a bigger company, the bigger company may have its own issues that delay resolution of bargaining talks. Mainland hotel chains understand that compensation for hotel workers needs to be greater in more costly cities — like Honolulu — but usually delay settlement in Hawaii so as not to give false hope of parity in markets with much lower cost of living and lower standard wages. I think there have been times when Local 5 basically had deals with Hilton or Starwood but had to wait for the mainland locals to settle first.
The Advertiser is also part of a chain — Gannett owns more than 50 newspapers — and some similar factors might be in play.
Sometimes contract talks are affected by other outside factors. The union for state government employees has an economic interest in bargaining to impasse, because state law brings in a mediator, the mediator usually comes close to splitting the difference, and this arguably results in a better agreement for the workers than settling otherwise. (Some state government officials believe the system as now set up results in virtually all increased state tax revenue going to state employees, creating a situation where everything else has to be resolved by raising taxes or cutting spending.)
It is not easy to be a contract negotiator, on either side. Both sides are quick to second-guess the negotiators — and, by the way, quick also to interpret any sympathetic coverage of one side as signifying lack of sympathy for the other side.
The sturm und drang of labor negotiations will be even dicier over the next couple years as our economy cools, making it more difficult to hammer out contracts both sides can live with.
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i’m upset howard! i’m not here to comment on the story above but rather your bias reporting on housing on oahu. i was watching the news this morning and you pointing out what prudential locations says what single family home prices are doing. what you fail to mention is that prices are set to crash here like the mainland. all indicators are pointing in that direction. slaes decline of 30% year to year, stricter lending across the board, subprime arms about to reset on many oahu home owners, tight economy, etc. you know the rest. you really need to educate yourself on market conditions and report two sides. you and andrew gomes from the honolulu advertiser only take comments from realtors so or course, the picture is always rosy. if you want to be a RESPECTED reporter, report both sides!!! i’ve been posting on your blog for a longtime pointing out diferrent factors about where the market is going, FROM THE PERSPECTIVE OF THE COMSUMER! i have just about given up watching kgmb 9. please get the perspective of the avgerage joe rather than talking to guys like harvey shapiro all the time. check the polls of comsumers. read the blogs. it’s unaimous, oahu home prices will fall 20% in the next 1-2 years. READ!