Bargaining trends: gains in 1984; prospects for 1985

Union members and their bargaining agents can expect 1985 to be similar to 1984. Unemployment will stay high, the overvalued dollar will continue to hurt export and import sensitive industries, the consequences of deregulation will still play havoc in transportation, and many employers will threaten workers with plant closings. However, unions showed in 1984 that despite these and other problems, economic and non-economic gains can be made. Worker solidarity and creativity turned 1984 into one of the more successful bargaining periods in the 1980s.

In 1985, about 3.5 million workers are covered by major collective bargaining agreements (defined as involving 1,000 or more workers) that are due to expire or to be reopened. Negotiations will cover about 2.4 million workers in private industry and 1.1 million state and local government employees. The sectors which will see some of the heaviest bargaining include rubber, electronic products, trucking, construction, clothing, and auto (Chrysler). There are also about 650,000 workers under contracts that expired or were reopened prior to Jan. 1, 1985, that need to be settled during this year.

Three-fifths of these workers still under negotiations work in rail transportation.

In the federal government, where bargaining rights are severely limited, workers are awaiting the outcome of the budget proposals under which President Reagan has asked for a 5-percent wage cut for federal employees. This wage cut proposal contradicts the spirit of federal law which requires the government to pay salaries equivalent to those in private industry. Last spring, the Bureau of Labor Statistics (BLS) reported that federal government workers earn 18 percent less than people working in the same kind of job in the private sector.

Collective bargaining agreements negotiated in 1984 contained a wide range of terms covering both economic and non-economic work related issues. Since many of these benefits do not have precise costs or values it is impossible to quantify them, and they are not reflected in most federal statistics.

BLS found that major private sector collective bargaining agreements reached in 1984 contained average wage increases of 2.4 percent for the first year. Included in this average are workers who had wage freezes and decreases. For the 77 percent of all workers covered by major contracts that did have wage improvements, the average first year increase was 3.8 percent. For major state and local government collective bargaining settlements in 1984 the average first year increase was 4.8. These figures do not include bonuses, profit sharing, stocks, lump-sum payments, cost of living adjustments (COLAs) or other financial payments.

The average effective wage adjustment for all workers covered by major settlements from 1984 or from previous years was 3.7 percent in the private sector and 5.0 percent in state and local government.

These figures by BLS show that the wage changes were close to the inflation rate. The inflation rate in 1984 was 3.5 percent from December to December as measured by the Consumer Price Index for Urban Wage Earners & Clerical Workers (CPI-W).

In 1984, about 700,000 workers, or one-third of those covered by new agreements, settled for some form of lump-sum or bonus payment. These payments are not included in the increases reported above. Employers refused to grant the same amount of money as wage increases. Employers prefer these payments because they are not added into the wage rate base and therefore do not increase the benefit levels for those programs that are tied to the rate base. Also, by being excluded from the rate base these payments will not be included in future wage increases.

Employers facing economic difficulties found unions willing to make wage and work-rule concessions if the companies were able to show real need and a willingness to negotiate on other options. Profit sharing and stock ownership plans were one form of trade-off for which unions bargained. These plans give workers a share in any future recovery that their concessions help bring about. They appeared mostly in contracts with the airlines and in meatpacking. In negotiations with United Press International, the Newspaper Guild also got a seat on the board of directors in addition to 6.5 percent ownership of the company in exchange for a wage decrease.

Two-tier wage structures which pay new employees less are an unfortunate concession that many employers fought for. These two-tier structures were allowed with much reluctance on the part of union members and often over the objections of their leadership. These systems should be eliminated as companies recover from their economic problems. One union has already done this: The Machinists in negotiations with Hughes Aircraft eliminated the two-tier structure that was in the previous contract.

The issue of pay equity or comparable worth is being raised increasingly in collective bargaining. Unions are fighting for increases to close the discriminatory wage gap between female-dominated jobs and comparable male-dominated jobs. To eliminate wage discrimination Service Employees (SEIU) members who are school employees in Vacaville, Calif., will receive increases ranging from 2.5 to 25 percent over a five-year period in addition to regular pay raises. SEIU members who are clerical workers for the city of Berkeley, Calif., will be compensated over a two-and-a-half-year period for past discrimination. Employees of the state of California belonging to SEIU working in female-dominated jobs will receive up to an additional 5 percent pay "realignment" to narrow the wage gap. And the State, County & Municipal Employees (AFSCME) won an agreement from the state of Iowa to end sex-based pay discrimination and to upgrade the pay of employees who have been victims of that discrimination.

Studies to examine the problem of pay discrimination against female-dominated occupations were also won in some contracts. AFSCME negotiated for employer-financed pay equity studies in Los Angeles and from the state of Rhode Island. In New Jersey, AFSCME and the Communications Workers won legislation for a pay equity study which provides for union representatives on the committee and SEIU bargained for a study to be paid for by the city of Oakland, Calif.

Improvements in job security were an important part of collective bargaining in 1984. An innovation negotiated by the Auto Workers (UAW) was the creation of a Job Opportunity Bank-Security Program (JOB Security) which is financed by a company obligation of $1 billion at General Motors and $300 million at Ford for the life of the three-year contract and the succeeding agreement. The cornerstone of JOB Security is that it guarantees that workers with at least one year of service will not be permanently laid off as a result of the introduction of new technology, outsourcing, negotiated productivity improvements, shifting of work from one plant to another, or the consolidation of component production. Workers who would ordinarily be laid off under these conditions will be offered placement in an employee development bank. Participants will receive the pay rate of the last job they were assigned before being placed in the bank and will accrue pension credits and receive all benefits. Workers in the bank can be placed in retraining programs, temporary assignments, job openings in other plants, or in other agreed-upon options.

JOB Security will be administered by joint UAW-management committees at the local, area and national levels. Special programs can be set up when there are more employees in the bank at a plant than anticipated openings at the local and area level. To compensate workers for the lack of permanent job placement, these capital programs would allow workers assigned to the bank who are age 55-61 and have 10 years of service to retire with full pensions and supplements. Members who do not meet the age and service requirements would receive lump-sum severence payments of $10,000 to $55,000 based on seniority.

Preventions against layoffs were in other settlements as well. At International Harvester, the Auto Workers won job security improvement in a new Job Content Preservation Program (JCPP) which preserves jobs by influencing management's decisions involving outsourcing, overtime usage, investment commitments, sales of operations, new technology, and anything else that effects job content. Under JCPP, International Harvester guarantees to maintain the ratio of straight-time hours per unit of production/sales for each major segment of the company. If the actual number of straight-time hours falls below the ratio, International Harvester will have to increase the number of hours worked through recalls, less overtime, paid training, additional benefits to those on layoff, or by reduced subcontracting and outsourcing. This is a six-year commitment with a $30 million limit on the company obligation.

At GM's Packard Electric Division, the Electronic Workers (IUE) won lifetime job and income security "forever" which does not end when the contract expires. Workers can be furloughed only for a maximum of six months. When workers exhaust unemployment insurance and SUB payments they must be recalled.

In New York, the Food & Commercial Workers (UFCW) in negotiations with the Associated Fur Manufacturers won a guaranteed 30 weeks of employment per year in exchange for the employers' right to subcontract during the three-month busy season.

Other job security guarantees include a no-layoff promise for the life of the contract for SEIU members at Equitable Life, a no-layoff due to subcontracting commitment to Newspaper Guild members at Consumers Union, and an income security program negotiated by the UAW with Mack Trucks that gives workers the same guarantees against layoffs as in the GM and Ford pacts and creates a job bank.

The ability of management unilaterally to make plant-closing or outsourcing decisions ws limited in some contracts. For example, in Detroit, Kroger Co. guaranteed the UFCW that 40 of its 45 reopened food stores will stay open for at least three years. In six different states, the UFCW got a no-plant-closing commitment from the George A. Hormel Company. At Ford, the UAW won a three-year moratorium on plant closings. Both Ford and GM guaranteed the UAW 60 days' notice of any outsourcing decisions that affect 25 or more workers. At Mack Trucks, the UAW got a promise of a three-year moratorium on any new plant-closing decisions. In soft coal negotiations, the Mine Workers won job security clauses from the Bituminous Coal Operations Association which include advance notification of intention to sell a mine with proof that the buyer will honor the labor contract, no loss of bidding rights if a mine is subleased, and justification whenever mine owners subcontract repairs or maintenance work. The Retail, Wholesale & Dept. Store Union will get a 45-day advance notification of plant closing from Del Monte. And the Sheet Metal Workers in negotiations with the Sheet Metal & Air Conditioning Contractors National Association won an employer guarantee not to open, operate, or become involved with a nonunion company. In exchange, the workers promised not to work for nonunion contractors or open competing businesses.

In auto negotiations, the UAW also created Business Venture Development Groups to work with JOB Security committees. Venture Development is aimed at helping communities hit by job losses to develop and attract new businesses with hiring preference given to displaced auto workers. The union also won commitments from GM and Ford to continue investing in American production facilities. including GM's new small car, "Saturn."

For auto workers being laid-off or transferred, GM and Ford both agreed to improve unemployment benefits and transfer payments. The auto companies increased funding of the Guaranteed Income Stream (GIS) and Supplemental Unemployment Benefits (SUB) programs. GIS, which was set up in 1982, pays laid-off employees who have 15 years of service once they have exhausted their SUBs. They will receive GIS payments until they return to work or reach retirement age or until the program runs out of funds. The relocation allowance for employees being transferred to another plant within the company was also increased. The allowance now ranges from a low of $580 for a single person moving 50-99 miles to $2,310 for married employees moving 1,000 miles or more

In a job-security related issue, the Steelworkers and Jones & Laughlin Steel's Aliquippa, Pa., mill agreed on a work-sharing plan. Under this program the 200 employees currently working will share their jobs with the 225 employees on layoff. Each of the 425 workers will work 60 percent of the time and be on layoff 40 percent of the time. The loss in wages will be made up through SUB payments.

To decrease overtime and spread available work among its members, the UAW won a requirement that the auto companies pay a 50^-an-hour penalty to a Joint Skill Development & Training Fund for all overtime hours worked in excess of 5 percent of straight-time hours. The companies also promised to try to reduce overtime to two hours a week. The Skill Development & Training Fund also will receive a 10^-an-hour contribution for all hours worked. This will help finance training for laid-off employees. Tuition assistance ranges from $1,500 for those with one year of service to $5,000 for those with four or more years. Active employees can receive payments of $1,500 for courses at a college or university and $1,000 a year for other job-related courses.

Tuition and retraining benefits also were negotiated in other contracts. For example, at Blue Cross/Blue Shield of Michigan, the UAW increased tuition reimbursement to $1,200 for its clerical and technical members; in Massachusetts, the State Police Association negotiated for 100 percent tuition reimbursement; the Electrical Workers (IBEW) at General Telephone of Ohio will receive full reimbursement for retraining if laid off due to the introduction of new technology, and Chemical Workers at Essex Chemical won a 100 percent tuition refund for job-related courses.

Confronting the challenge of excalating health care costs was another important area of collective bargaining in 1984. Unions and employers worked together to reduce the cost of health care without decreasing the quality of the care or shifting the cost to the workers. An example of this type of settlement in the Health Care Cost Containment Agreement reached between the Rubber Workers (URW) and Uniroyal. Features of this agreement for non-emergency medical needs included:

* Precertification review of hospital confinement.

* Second surgical opinion for certain procedures with employees receiving compensation for up to four hours for time spent getting a second opinion.

* A toll-free benefit hot line for employees and retirees who need help filing claims.

* self-audit program that pays workers 50 percent of savings recovered from corrected hospital bills, up to $1,000.

* Health Maintenance Organizations (HMOs) will be considered.

* $50 bonus for certain outpatient surgical procedures.

* Laboratory tests and X-rays must be conducted before hospital admission.

* A continued investigation by the URW and Uniroyal to find alternatives to contain health care costs.

Many other agreements negotiated in 1984 contain cost containment features. Examples include:

The Metal Trades Council and Union Carbide (Texas) agreed on full coverage of outpatient minor surgery and home health care following hospitalization.

HMOs are a covered option for UAW members at Rockwell International and members of the Hotel Employees & Restaurant Employees with Philadelphia Hotel-Motor Inn Association.

IBEW members at Niagara Mohawk Power Company, Food & Commercial Workers members at John Hancock, and Clothing & Textile Workers members at Maremont receive a portion of all overcharges they discover.

The UAW at Ford and GM agreed on preauthorization for all non-emergency and non-maternity hospital admissions, and educational programs to encourage cost-effective use of medical benefits.

Health programs also have been expanded to provide better care for many union members. For instance:

* The IBEW at Crouse-Hinds increased maximum dental coverage to $1,000, up from $600.

* Steelworkers at Outboard Marine's Evinrude Motors Division increased maximum hospitalization coverage to $50,000 (was $20,000).

* The IBEW at General Telephone of Pennsylvania got orthodontia coverage for their members' families.

* The UAW at Mack Trucks established coverage for substance abuse treatment and speech therapy.

* The Machinists at FMC Corp. (Calif.) got coverage for hearing aids, adult orthodontia, hospice and home visit health care.

* Major medical maximum was increased under many contracts--up to $1 million for members of the Bakery Workers in New York and New Jersey (was $250,000).

* The UAW at Rockwell International negotiated a new alcohol and drug abuse program.

* A new optical benefits plan was established by the Oil, Chemical & Atomic Workers at Penwalt.

* New or expanded dental coverage in contracts between the Paperworkers and James River Corporation of Virginia, the Newspaper Guild and the St. Louis Review, and Clothing & Textile Workers and Stillman Seal.

* At GM, the UAW expanded medical coverage to include procedures like laser surgery, organ transplants, tubal ligation, and vasectomies.

Programs to reward workers for unused deductibles and sick days were also negotiated. The Glass & Ceramic Workers at PPG Industries, for example, set up a $300 health care plan account to pay deductibles with the unused portion to go to the workers at the end of the year. The Teachers in Jacksonville, Fla., bargained for 90 percent of unused sick leave to be converted into cash at retirement, as against 80 percent in the previous agreement. Washington, D.C., employees in AFSCME now get three additional personal days if they use no more than two sick days, two extra personal days if they use no more than four sick days, and one extra day if they take no more than five sick days. IBEW members at Utah Power & Light Company will now receive 100 percent payment for unused sick leave.

In negotiations between the UAW and Lear-Siegler's Instrument Division, laid-off employees won coverage for six months under the hospital, medical, dental, and vision care plants.

Paid time off is another important feature of collective bargaining agreements. Eligibility requirements for paid vacations were decreased under many agreements. For example, IBEW members at Gulf State Utility Company now get three weeks after seven years of service (was eight), four weeks after 16 years (was seventeen) and five weeks after 25 years (was 26). Steelworkers at Boston Gas now get four weeks after 10 years. Paperworkers at Potlatch's Northwest Paper Division bargained for seven weeks after 25 years instead of 30. Longshoremen from North Carolina to Florida are eligible for five weeks after 15 years and six weeks after 20. Hotel Employees & Restaurant Employees working for San Francisco restaurants in the Golden Gate Restaurant Association qualify for three weeks off after five years (was six). Bakery Workers at Keebler now get six weeks after 25 years instead of 30. Hospital & Health Care Employees at Norwalk, Conn., Hospital won five weeks after 11 years instead of 20.

One vacation clause that some unions bargained for allows workers to take a week of vacation one day at a time. Instead of taking a week all at once, workers can now use these days as personal days or to make long weekends. One settlement that included this was between IBEW and General Telephone of Ohio. The years of service needed for this vacation option were reduced to eight from 15.

Vacation rights of workers on layoff were given protection under the Chemical Workers' contract with American Cyanamid's Lederle Laboratories Division. Rehired workers will have layoff time counted toward their vacation eligibility.

Martin Luther King, Jr.'s birthday is a new paid holiday in many contracts including those between the Transit Union and Old Dominion Transit Management, Clothing & Textile Workers and Sterling Dye, Ladies' Garment Workers and Ken Stacy, Bakery Workers and Specialty Bakery Owners Association, Chemical Workers and Day & Zimmerman's Lone Star Division, Transit Union and the Transit Authority of River City, Utility Workers and Detroit Edison, and SEIU and the Chicago Building Managers Association.

Many unions won an additional paid day off for their members. For example, the Ladies' Garment Workers in negotiations with the makers of lingerie, negligees and underwear in New York and the Retail, Wholesale & Dept. Store Union at Nestle in Fulton, N.Y., now get 12 paid days off, up from 11.

Floating paid days off are becoming more common. The SEIU and the Midtown Realty Owners Association, N.Y., switched four fixed holidays to floating holidays. Another example is in the Operating Engineers' agreement with the Realty Advisory Board of Labor Relations, N.Y., which switched two fixed days to floating days and added one new paid day off as a floating day.

Paid days off in case of death in the family are being expanded to cover more relatives and longer periods of time. Chemical Workers at Lederle Laboratories can now also take one day off for the death of a brother-in-law or sister-in-law. Paid bereavement leave for Dutchess County, N.Y., employees in AFSCME now also covers death of step-children and step-parents. Members of SEIU employed by Alameda County, Calif., can now take two of their sick days for a death in the family in addition to three previously negotiated bereavement days. And funeral leave for Chemical Workers at American Salt now applies for the death of grandparents.

One important and frequently overlooked type of paid time off is leave for military service. Machinists at United Technologies' Florida Research & Development Center now are eligible for up to 15 days paid military leave, up from 10.

Retirement and pension clauses were improved in many contracts. For example, the UAW at General Dynamics' Electric Boat Division negotiated for full benefits when age plus years of service equal 85. Retired Machinists at Rohr Industries will get benefit increases of up to 10 percent depending on how long they have been retired. Machinists at United Technologies (Florida) bargained for retirement benefits for the spouses of vested employees who died before age 55. Communications Workers at Rochester Telephone increased minimum monthly benefits by $100 for retirees with 20 or more years of service. And the IBEW at Hawaiian Electric won a decrease of five percent in the early retirement pension penalty.

Voluntary Political Action Committee checkoffs of contributions are being negotiated by many unions. Examples include the Painters with the Painting & Decorating Contractors Association (MASS.), Oil, Chemical & Atomic Workers at Gulf Oil, Teachers in Chicago, AFSCME at Shelby County, Tenn., Hospital Authority, and Machinists at Allied Corporation's Bendix Electronic Central Division.

The rights of part-time employees are getting increasing attention under collective bargaining. For instance, SEIU members employed by Health Employers, Inc. (Minn.) are now paid double-time for any of seven holidays on which they work. UFCW members got a guarantee of at least 16 hours of work per week from the Food Employers Council which represents 1,334 stores in 12 grocery chains in California. The SEIU negotiated with six commercial cleaning companies in Hartford, Conn., to raise part-time wage rates to the level for full-time workers. And AFSCME members who work part-time for Little Rock, Ark., now get vacation and sick leave benefits.

New settlements also improved commission rates for many workers in retail trade and insurance. For example:

* UFCW and Frederick's Department Stores in the state of Washington increased clothing sales commissions to 7 percent and shoe sales commissions to 10 percent.

* At Metropolitan Life Insurance, the UFCW won an increase to 15 percent for first-year commissions on home owners' policies, up from 10 percent.

* UFCW members working for John Hancock Mutual Life Insurance now get a 55-percent first-year commission on policies, up from 52.5 percent.

Safety and health is another critical area of collective bargaining. For instance, in negotiations with Ford and General Motors the UAW made gains that include the establishment of joint management-union committees to review new plant layouts, changes in manufacturing equipment and major processes where worker health and safety may be affected, review of job design to decrease stress, review and access to management's information on the chemical hazards, and worker training on safety and health.

The use of video display terminals (VDTs) is being regulated under many contracts. The SEIU at Equitable Life for example, bargained for VDT safeguards including rest breaks, glare reduction, detachable keyboards, adjustable chairs, redesigning of work stations, and guarantees of proper maintenance.

Legal service plans were established in many new contracts. Among them are agreements negotiated by the UAW with Ford and International Harvester, by SEIU with the Realty Advisory Board and the Apartment Owners Advisory Council in New York, and by HERE with the Bellevue Stratford Hotel and the Franklin Plaza Hotel in Philadelphia.

Child care for the children of employees is getting increasing attention in collective bargaining. For example, the SEIU and the state of California negotiated a $1 million fund which will be jointly administered by a worker-management day care committee. And the New York State Nurses Association won an agreement from St. Luke's Roosevelt Hospital to build a new day care facility.

There are thousands of other important clauses that unions negotiated in 1984. A few of them are:

* The RWDSU in bargaining with both the Association Of Voluntary Nursing Homes and the League of Voluntary Hospitals & Homes in New York won guarantees of every other weekend off.

* Clerical workers in the SEIU at Equitable Life won the right to see their personnel files and appeal anything they do not agree with.

* UAW members at General Motors and Ford get attendance bonuses for not missing any work days, $50 for the first and second quarter of perfect attendance and $200 for the third and fourth quarter for a total of $500 for a perfect year.

* Actors' Equity got a commitment from the League of Off-Broadway Theaters & Producers to cast more minorities including blacks, Hispanics, and the handicapped.

Unfortunately there are still many problem areas in collective bargaining. In postal negotiations President Reagan's anti-union feelings manifested themself in unreasonable concessionary demands and an unwillingness to conduct serious negotiations. Congress had to stop Reagan's unilateral imposition of a two-tier wage structure under which new hires would be permanently paid less. After a lengthy fact-finding and arbitration process, the Postal Workers and the Letter Carriers succeeded in winning pay and benefit improvements, a retroactive raise, Martin Luther King, Jr.'s birthday as a paid holiday, and retention of the COLA clauses, night-shift differential and sick leave. The lower starting rate for new hires was awarded, but they will follow the same general wage schedule and will eventually be brought up to the more senior workers' salary levels.

Unrealistic concessions were fought off by many unions. For example, workers in various unions in Las Vegas, were able to band together to fight back wage cuts and even succeeded in gaining wage increases.

The use of Chapter 11 bankruptcy to escape from collective bargaining agreements was severely restricted by the bankruptcy reform legislation passed in 1984. Employers now must bargain with unions when they file for bankruptcy protection and wish to change the contracts. Steelworkers at Phoenix Steel's Pennsylvania facility not only resisted concessions when the company filed for bankruptcy, they even negotiated pay increases.

Unfair labor practices, union-busting consultants, anti-worker National Labor Relations Board rulings, and the anti-union attitude in the Reagan Administration were problems which many unions faced in 1984 and will continue to face in 1985. Two of the largest and still ongoing battles against anti-union employers are the Phelps Dodge strike by 13 unions representing copper workers and at Louisiana-Pacific lumber mills by the Carpenters.

This discussion of collective bargaining in 1984 does not tell the whole story. Giving examples of individual contract terms cannot adequately present them as part of a larger package reached through negotiations. Also, collective bargaining is a continuing process that involves the day-to-day relations between employers and workers. Across the nation grievances were being resolved and safety and health issues discussed; joint labor-management committees were working on issues of mutual interest, and medical cost problems were being addressed.

In addition to the bargaining trends mentioned in this report, thousands of other improvements were achieved in contract settlements throughout the United States. In 1985, union members will continue to pursue the strategies that best serve their needs and those of their fellow workers.

COPYRIGHT 1985 AFL-CIO
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