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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 called bargaining units. Only mandatory subjects of bargaining must be negotiated and agreed upon by both the employer and the union.

Q: What “mandatory” subjects must be negotiated through bargaining?
A:
 Employers and unions must meet and bargain over the terms and conditions of employment, so anything that is a term or condition of employment is a mandatory subject of bargaining. However, a matter that is not considered a term and condition of employment may, but is not required to be negotiated through collective bargaining. Therefore, there is much debate and oftentimes legal proceedings over whether something is a term or condition of employment. Some of the more common mandatory subjects of bargaining include: pay scales, breaks, health insurance, layoffs, no-strike clauses, pensions, seniority, sick leave, vacations, and work schedules. Another very important mandatory subject for collective bargaining 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 that 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, these clauses rarely look alike. 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 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 they can get the union to accept.  Oftentimes, unions accept very broad management rights clauses because there is another clause that is more important for a union to include in a collective bargaining agreement, and both sides agree to accept each other’s important clauses. Management rights clauses allowing employers to determine employee work schedules, promotions, demotions, discharges and discipline are lawful so long as both sides have bargained and agreed.

Q: Can management rights clauses be too broad?
A:
 No. So long as it is negotiated and agreed upon, the National Labor Relations Board cannot rewrite the contract if one party later claims that the management rights clause is too broad. However, employers may run afoul of the law if they demand a broad management rights clause and refuse to bargain over a less-broad clause. In such a situation, the employer may be engaging in surface bargaining or bad-faith bargaining instead of truly trying to reach a consensus for an agreement.

3/14/2011

This “Law You Can Use” column was provided by the Ohio State Bar Association (OSBA). It was prepared by Matthew D. Austin, an attorney with the Columbus firm of Barnes & Thornburg LLP.

Articles appearing in this column are intended to provide broad, general information about the law. Before applying this information to a specific legal problem, readers are urged to seek advice from an attorney.

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