Management Rights Clauses Spell Out Employer Autonomy in Collective Bargaining Agreements

Q: Must every aspect of employment be negotiated with a union?
A: No. A collective bargaining agreement is a contract that employers negotiate with a union. In such negotiations, the union represents select groups of employees, which are called bargaining units. There are some subjects that the union and the employer must negotiate (mandatory subjects), and there are other subjects that they can, but do not have to, negotiate (permissive subjects).

Q: What are "permissive subjects" that may be negotiated through bargaining?
A: Permissive subjects include things such as: pension, health benefits, retirement benefits, and employer contributions to industry contribution funds. Permissive subjects do not affect the terms and conditions of employment. 

Q: What “mandatory” subjects must be negotiated through bargaining?
A: Employers and unions must meet and bargain over the terms and conditions of employment. Examples of mandatory subjects include: pay scales, breaks, health insurance, layoffs, no-strike clauses, seniority, sick leave, vacations, dress codes, work schedules, and management rights clauses. Anything that is a term or condition of employment is a mandatory subject of bargaining. 

Q: What is a term and condition of employment?
A: There is much debate and oftentimes legal proceedings over whether something is a term or condition of employment. The general rule of thumb is that a condition of employment must be something affecting the relationship between employee and employer. One of the most important term and condition of employment is the management rights clause.
Q: What is a management rights clause?
A: A management rights clause is an agreement between employers and unions about how much autonomy the employer has in running day-to-day business operations. Before a workforce is unionized, the company’s management has the right to make decisions that affect the workplace, subject to state and federal laws. When a workforce is unionized, the company still has the right to make decisions that affect the workplace, but those decisions must not violate the collective bargaining agreement, nor can they violate state and federal laws. The decisions a company makes that are not governed by state or federal law or the terms of the collective bargaining agreement are considered management rights.

Q: What is an example of a management rights clause?
A: Since management rights clauses must be negotiated, there is not a standard management rights clause. Some clauses are short, such as, “All rights are reserved to management except those expressly limited by the collective bargaining contract.” Other clauses go into great detail about what is and is not considered a management right. Long management rights clauses are generally written to avoid legal wrangling over whether an act taken by management fell under the management rights clause, was governed by the collective bargaining agreement, or should have been negotiated before the company unilaterally implemented it.

Q: How do management rights clauses get negotiated?
A: Because employers typically want to keep as much autonomy as a union agrees to let them keep, they generally seek to include a management rights clause that is as broad as possible. If a union accepts a very broad management rights clause, it is often because there is another clause that is more important for the union to include in the collective bargaining agreement, and both sides agree to accept each other’s important clauses. Broad management rights clauses, such as allowing employers to determine employee work schedules, promotions, demotions, discharges and discipline, are lawful and enforceable so long as both sides have bargained in good faith and have reached a mutual agreement.

Q: What is “good faith” and “bad faith” bargaining? 
A: When both parties intend to come to an agreement, they are entering into “good faith bargaining.” This does not necessarily mean the parties will actually come to an agreement, but only that each party is truly trying to reach a consensus for agreement. “Bad faith” bargaining tactics include refusing to meet at all, refusing to write down terms agreed upon orally, and making unilateral changes of working conditions without discussing them.


This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Columbus attorney Matthew D. Austin. It was updated by Alix J. West, an attorney with the Columbus firm of Mazanec, Raskin & Ryder.

Articles appearing in this column are intended to provide broad, general information about the law. This article is not intended to be legal advice. Before applying this information to a specific legal problem, readers are urged to seek advice from a licensed attorney.



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