Understanding Contract and Labor Disputes

June 12, 2020

Contract and labor disputes in corporations can take on many forms. Owners, managers, and workers must understand how these disputes occur, what issues they might involve, and how they will resolve them. Businesses and employees could be embroiled in these situations at any time, and it is best to anticipate future labor issues, work together, and call in an attorney when needed.

What Types of Labor Disputes Exist?

Businesses might not know how to qualify a labor dispute. Managers and employees cannot effectively negotiate the terms of a contract if they do not know what the problem is. Identifying the difficulty is one of the keys to negotiation. If the two sides are not negotiating on the same terms, they will never come to a resolution. Labor disputes include:

• Disputes over the interests involved in a contract: This is a common disagreement. One side may want to have an equal share of the money made by the company and want to raise the percentage they earn. Because this is a familiar dispute in American media, it is easy to see everything that is involved. These interests can also include pay increases, bonuses, increased vacation time, paid time off, raises, and even retirement benefit contributions.
• Disputes over rights provided to workers: Workers’ rights include Workers’ Compensation, hazard pay, working conditions, opportunities for advancement, and even the ability to unionize.

Most contracts will involve both of these disputes in one way or another. Employees must sit down with management to determine what to negotiate. Because these negotiations can be complicated, it is best to have a lawyer present.

What Causes Contract and Labor Disputes?

Businesses may wonder what causes contract disputes, or employees may want to organize their colleagues around a singular cause. The following issues may contribute to the decision of your workforce to see representation or to collectively bargain:

Economics: Employee pay, benefits, raises, and the economic conditions under which the company works are often a key to labor disputes. For example, employee perception of the company’s overall profitability or cashflow in relation to employee pay may cause workers to be dissatisfied, believing they are not compensated fairly. Conversely, management and employees might disagree over the wording of a contract revision during a recession as workers are asked to take pay cuts, give up raises, and forgo pension contributions.

Managerial issues: These could be clerical problems that are reflected in employee paychecks or work that is difficult for everyone in the office. Managers that are ineffective communicators, inadequate tools, clothing, or protective gear for workers are all issues that could be addressed by owners and may come up in bargaining.

Political cause: Changes in the political climate can cause a business to experience difficulty. Workers or managers might adhere to a particular ideology that might alter the trajectory of the business. A city or county might pass new wage laws, and the two sides will need to negotiate a contract implementing those new rules.

Psychological reasoning: The perceived motivations of people on the job could cause a friction in the workplace that leads to a labor dispute.  While these motivations are difficult to judge, they could become part of a heated contract dispute if unclear or not addressed.

Who Can Prevent Contract and Labor Disputes?

Owners, managers, and workers can help prevent labor disputes by taking affirmative action, such as:

• Ensuring work areas are clean and organized.
• Everyone within the organization, up to and including the CEO, should be held accountable for the work they must do.
• Everyone should have the opportunity to apply for and receive promotions or raises to positions they are qualified to hold. Likewise, all job opportunities should be posted so that anyone can apply.
• Ensure that managers and ownership have a positive working attitude and a good working relationship with the employees. This is one of the best ways to avoid organization in your workplace and to make labor negotiations effective where a union exists.
• Review all salaries and bonuses annually to ensure they are aligned with industry standards or averages.

A simple audit of a business will reveal problems that can be solved quickly and avoid a union organization campaign. Employees join a union for many reasons, but most often because they believe they are not being treated fairly by their employer.  Most employees would prefer to avoid going on strike, hold up the productivity of the business, or create needless animosity. If both sides work well together, union organization could be averted and most contract disputes can be avoided.

How Can Both Parties Resolve Labor and Contract Disputes?

Most labor disputes can be resolved using the following styles of conflict resolution. Every business is different, and each company should work closely with its counsel and employees to determine which method will help both sides achieve their goals:

• Employee Policies and Training: A company with effective employee management policies and relationships can avoid union organizing altogether.  Hiring and training good managers and executives to address employee concerns, establish industry appropriate pay rates and reasonable expectations for employees and are the best way to avoid union organization altogether and have a productive workforce.
• Grievance management: Companies, even those without a union, can implement and use a grievance management model to hear and address each grievance from employees. If grievances are handled property and the employees are treated consistently, then this process can avoid many labor disputes.
• Collective bargaining: If a union is formed, a clear and well-crafted Collective bargaining agreement will set the tone for employee and management interactions. Bargaining can be used to resolve issues and also alleviate employee concerns over the workplace issues.
• Mediation: When bargaining is ineffective or stalled, sometimes a mediator can lead the parties into a conversation and offers solutions. Mediators often resolve problems for both sides while helping them write a new contract.

The experienced legal team at MacMain Leinhauser help businesses resolve contract and labor disputes. Call us today at 484-318-7106 or contact us online for an initial consultation. Our offices are located in West Chester, Pennsylvania, and we serve clients throughout Philadelphia, Chester County, and New Jersey.