An upper management executive of a magazine publishing company, JBL Publishing, is negotiating with a Union representative regarding production workers’ contract. The main issues are salary increases, health benefits, and flexible work schedules. The Union representative is irate, because she just found out, prior to this meeting, that the executive board has received enormous bonuses for the year, at the same time they are refusing to budge on salary increases for the production workers.

Profile:

• Katherine Knudsen has a degree in Marketing and Management and a law degree. At JBL Publishing she is Vice President of Production, managing operations and production. In addition to overseeing these departments, Katherine handles all contract negotiation and labor relations.
• Alisa Jackson holds a Bachelor of Arts degree in Sociology. She has been a union organizer and representative for over eight years, with efforts focused on re-negotiation at the local level. Alisa has a renegotiation success rate of 95%, winning better terms in one or more categories per contract. The renegotiation with JBL publishing is her first in the printing industry.

Back History:Knudsen and Jackson have been meeting and talking frequently regarding the contract renegotiation for the unionized labor force working in the printing press/production building. Jackson is a new representative for Local 1087, coming from an airline workers union where there were always very tough negotiation meetings. Knudsen has been the VP of Production at JBL for 10 years and has negotiated all the contracts over that time.

The renegotiation thus far has addressed the following issues:

• A 7% wage increase for workers with seniority
• An improved benefits package across the board
• More personal days and schedule flexibility to accommodate family needs

Knudsen has said flat out “no” to the wage increase – the company has a salary freeze for all employees – labor and management included.Knudsen has slightly improved the health package and is considering the schedule issues.

Scene Set-up:Jackson has called an immediate meeting. She wants to discuss the executive bonuses and win more money for the union employees.

Scene Location:Knudsen’s Office; JBL Publishing; Wednesday 3:00pm

The Meeting - Summary: Alisa described her surprise that executives were receiving large bonuses when Katherine had said there was no money for salary increases. She immediately threatens to go the newspapers with this perceived inequity. Katherine explained that the money allocated for bonuses was based on last year’s performance even though the checks were cut this year. Alisa comes close to accusing Katherine of not disclosing this information that she feels is pertinent to the current contract. Katherine explains that it is not pertinent to the current contract because that money was budgeted last year and does not pertain to this year’s cash flow situation. Alisa then pursues the option of reallocating the bonus money so that the workers may receive a share of the money currently allocated only to upper management. Katherine agrees to draft a bonus distribution plan and present it to Alisa within the week. The two shake hands and are gracious to each other at the conclusion of the meeting.

Afterthoughts – Summary: Katherine admits that the executive bonuses were more relevant to the current negotiation than she let on. She had held out on mentioning the bonus distribution option because she represents the company and didn’t want to have to do that unless it was absolutely necessary because that was the only concession she had to make. Alisa’s threat to go to the press to disparage the company concerned Katherine but she did not want give up too much. Now that they will create a bonus-sharing plan, Katherine says she will work very hard to make that solution work because she recognizes the value of hourly workforce to the revenue of the company and strongly believes in working towards a fair solution that will reward the employees if the company does well.

Katherine discussed a potential solution (bonus sharing) that had not previously been discussed before. Is this an example of “unlawful circumvention” according to labor laws? Why or why not?