As the Indian tribal industry expands and refines its function and focus, labor relations and labor contract negotiations becomes more important and an integral part of any successful business. As we have seen with San Manual Indian Bingo & Casino, 341 NLRB No. 138 (May 28, 2004), and the Tenth Circuit Court of appeal decision in San Manuel Indian Bingo & Casino v. N.L.R.B., No. 05-1392A (D.C. Cir. February 9, 2007).), exposing tribes to the National Labor Relations Act, Indian owned businesses, will likely continue to be required to comply with federal labor laws including collective bargaining rules and regulations. As employee costs can easily meet or exceed 50 percent of any business’ expenses, it is critical to any organization that it address labor relations and labor contract issues in a direct, forthright and comprehensive manner.
Relationship Building: Preventive Maintenance
Building a relationship with the representative union/bargaining unit provides for alternative avenues of communication: a phone call or incidental meeting is much preferable to meeting at a grievance hearing or arbitration. Moreover, a working relationship may aid in the interpretation of a collective bargaining agreement and possibly facilitate a more efficient negotiations process for a new collective bargaining agreement. How is this relationship accomplished? Meet informally or on an as needed basis to discuss work place issues or contract interpretation. Agree to be proactive and attempt to resolve conflicts and do not simply avoid them. And finally, retain the right to disagree on matters of importance to both sides of the argument, and understand that the grievance process or ultimately arbitration is a recognized and natural outcome of contractual disputes. It should not be taken personal.
Understanding Your Business: A Data Driven Approach
Economics, however, are the ultimate driver of any negotiation. In preparing for negotiations you must evaluate the businesses historical economic information and data. Past budgets, projected growth, the previous costs of prior collective bargaining agreements, ongoing fiscal trends, rising costs and retirement trends and future business goals must be considered. An understanding of these critical areas is paramount to successful negotiations. Having your financial officer preparing a three (3), five (5) or seven (7) year outlook on the future of the business, expenses, revenues, projected growth, etc., is a good way to anticipate future business revenues and costs, including future payroll costs, that may effect negotiations.
Wages: Consider all Cost Drivers
It goes without saying that wage increases will likely be the topic at the bargaining table. Some things to contemplate are: What is the cost to the organization of a wage increase, of an increase in health benefits, in increased retirement contributions and other benefits? Further, what is the cost of increased time off, sick leave, overtime coverage and the like? While wages may be the centerpiece of negotiations, it is not just wages that drive the cost of labor, but numerous other agreed-upon contract language and benefits; e.g. overtime, sick leave, vacation, education and uniforms. In order to be prepared for negotiations, one needs to have at the least a working grasp of these potential costs.
A helpful tool for assessing costs while at the bargaining table is the “cost of one percent (1%) of payroll. This provides the employer with a quick reference point from which proposals at the bargaining table can be extrapolated (roughly) to assess the costs to the employer.
Another area of pre-negotiation consideration is employee working conditions. Quite often labor contracts are fairly specific concerning what conditions apply in the work place. This can result in conflict when business needs merge with contractual obligations. Does the business need employee flexibility? Does the existing agreement or business policies, procedures and regulations, permit employees to work out of class? Work overtime or shift assignments? Does your business have seasonal or unusual work hours? Interview front line managers and supervisors to determine whether any working conditions require alteration. Understanding the needs of the business from an operations perspective can result in additional savings and profit for the business at the bargaining table.
Negotiations: The Art of Compromise
Negotiations themselves call for a more nuanced approach. The objectives of the parties at the bargaining table are by definition different; and at times those objectives foster disagreement and conflict with the businesses goals. Addressing disagreement with smart, business based decisions and not retaliatory or flippant remarks maintains negotiations focus and communicates to the opposition a message of confidence and direction. Both sides are driven to succeed in spite of the other, yet it is only with the other that success (a collective bargaining agreement) will be accomplished. Building on commonality of purpose, the parties to negotiations must ultimately work together. Whether that working together is direct interaction between the parties, or the utilization of a third party neutral, the objective remains the same: the arrival at a collective bargaining agreement. Experienced labor negotiators intuitively understand their adversary’s wants, needs and desires, juxtaposed to the economics and operational needs of the business. And the more clear that understanding is of the negotiation variables and limitations, the more likely a successful negotiation will result.
In sum, the collective bargaining process is a blending of personalities, economics and business operations considerations. It is not unexpected that there will be disagreements and conflict; however, if approached in the manner describe above, the process may proceed to a positive outcome, and a stable labor/employer environment.
Jack Duran is a Ysleta Del Sur Pueblo affiliate and owner of Duran Law Office in Roseville, California. Larry Menth is a Labor Consultant in Rocklin, California.