Notes on Collective Bargaining in Economic Crisis: Mediated Multi-Party Negotiation Simulation
Eskenazi, Mark G., Labor Law Journal
I. Introduction and Background Information
A. Content, Intended Use, and Instructions
This is a simulation exercise about the negotiation of a collective bargaining agreement (CBA) between a labor union and an employer involving multiple parties and a mediator during an economic crisis. It is intended for law students, lawyers, and others involved in the field of labor law and industrial labor-management relations. The parties should take about an hour and a half to negotiate with the goal of achieving the best possible agreement. Following the negotiation, each group of negotiators should report whatever agreements they have reached and de-brief with the class facilitator. Topics explored include (i) the problems and benefits of coalition-building in a multi-party setting; (ii) agency relationship (principal/agent) issues that arise in community-lawyering negotiation contexts; (iii) the role of the mediator in a multi-party setting; and (iv) the power of morality and social change in negotiations.
A labor dispute is brewing in February 2010 in Buffalo, New York between one of the city's few surviving steel companies, Mackey's Steel Mill (Mackey's), and its lawfully elected union,1 Steel Workers Union Local 14 (Local 14), amidst economic, social, and political crises that plague the state's northern region. As labor costs spike in the upstate New York manufacturing cities of Buffalo, Rochester, Syracuse, and Utica, companies like the steel mill in question are simultaneously lowering wages and relocating their production overseas where they can escape costly federal labor and employment regulations.2 Additionally, the Chinese and Indian economies have experienced manufacturing booms in recent years and, as a result, the demand for cheap labor there is rapidly growing, adding to global industry competition. The brunt of the steel market's upheaval in the United States disproportionately burdens union workers that mainly are black, Hispanic, and less educated than the average American. In dividing up the tax coffers, local politicians pay lip service to the employees by promising social programs and economic aid to the disadvantaged but once in office, realize that businesses, in order to compete globally, require substantial economic protection from the government.
Negotiating rounds for new CBAs between the parties take place every two years. During the 2004 negotiations, Local 14 struck for the first time in eight years after Mackey's refused to budge on the pension fund rolls. The strike lasted three months, which was much longer than Local 14 expected that Mackey's would hold out. As a result, Local 14 lost a substantial amount in valuable reserve emergency funds and realized only nominal gains in its pension fund. However, many employees felt that the leadership took strong action against what they perceive as stubborn and belligerent management lawyers. The 2006 and 2008 negotiations ran much more smoothly despite the withering economic conditions because Local 14 did not want a repeat of the grim 2004 scenario. Therefore, in the 2006 and 2008 negotiations, Mackey's was able to get away with giving only relatively slight increases in wages, pension, and health insurance that fell just short of the cost of living. In return for these minimal concessions, Mackey's dramatically slashed its Buffalo workforce from 6,000 to 4,000 over the course of the two negotiations. Mackey's shipped the 2,000 lost American jobs to one of its two new plants in China, which runs on substantially lower labor costs.
The situation seems bleak, but the parties have hired as mediator a local labor and employment law professor from the local university school of law with significant expertise and experience to handle high-pressured labor negotiations like this one.
C. The Issues
Among the important issues on the table for Mackey's, Local 14, and the employees are wages, the size of the workforce, the pension fund, and health insurance. …