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socrateaser
socrateaser, Lawyer
Category: Employment Law
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Can 6 or more employees bargain collectively for themselves

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Can 6 or more employees bargain collectively for themselves without representation of a recognized union and if so can the contract be in effect forever as stipulated?
Hello,

What you are describing is possible, though it wouldn't be the same sort of collective bargaining that is contemplated under the National Labor Relations Act. It would be an ordinary contract and a "third party beneficiary claim." Example:

Employee X and employer Y contract to provide services under contract Z. The term of the contract is in perpetuity, and it provides that X will receive $10.00 per hour for all services, and that as further consideration for the agreement Y agrees that any other employees hired during X's employment shall be paid at the same rate.

Under a third-party beneficiary theory, other employees who are hired can sue if they are not paid at least $10 per hour, once they have notice of the agreement between X and Y. This is a well established legal doctrine -- but it's not collective bargaining, per se, because: (1) under federal law, a union cannot bargain on behalf of employees until the union is formally elected using the required process to validate the union's authority; and (2) the other employees who are the beneficiary of the original agreement didn't collectively bargain for it in any way. They weren't even aware that the contract existed.

The full answer to your question will be found within the "four corners" of the contract that you are seeking to enforce -- because the contract cannot be expanded into a union contract, merely because it has the look and feel of a union. Federal law preempts any attempt to unionize under rules other than those provided by the National Labor Relations Board. Which is why I'm suggesting that this contract would be either a third party beneficiary agreement, or it would be void as against federal law.

Hope this helps.



Customer: replied 3 years ago.

How do I know if it is a third party beneficiary contract?

Carleen

Scan it and upload the file to www.mediafire.com. Give me a link to the file, and I'll let you know what I think.
Customer: replied 3 years ago.

How can this employer be At-will, have permanent employees all under the same contract. The Agreement reads the employees represented must be permanent employees - these are all At-will from my read. It also states the employees must have signed a current employee agreement. Current meaning from 1970 or an amended version. If ICC has the right to change that agreement without approval from the represented employees and they refuse to sign - is the agreement void?

What happens if we give notice to terminate or negotiate new terms and there is an impass tat the mediator can not resolve. Where is the Agreement then?

Carleen

Okay, here's my evaluation.

The State of Michigan, which is one of the birthplaces of unions in the USA, has a labor relations act, which is separate from the National Labor Relations Act (NLRA). The Employee Relations Commission Act of 1939 was enacted to permit the state to resolve collective bargaining disputes between employees and employers without federal intervention. However, the Act was ruled unconstitutional where it conflicts with the National Labor Relations Act. See International Union of United Automobile, Aircraft and Agricultural Implement Workers of America, CIO v O'Brien, Prosecuting Attorney, 339 US 454;XXXXX 781; 94 L Ed 978 (1949).

The point of the above is that absent a formal election of representation under the rules created by Congress and the National Labor Relations Board (NLRB), a collective bargaining agreement cannot operate to bind new employees hired after the making of the original contract.

However, there are numerous rulings by Michigan and Federal courts which permit an employee who was not a signatory to a collective bargaining agreement to enforce the terms and conditions of that agreement against the employer. See, e.g., Lee v. General Motors Corp., 684 F.Supp. 163 (USDC ED MI 1987)

Given all of the above, the law would permit but not require any employee to enforce his or her rights under the existing collective bargaining agreement, because amazingly, the collective bargaining agreement, states plainly on its face, that "This agreement shall be in effect forever." Such a provision is potentially unconscionable (shockingly unfair), and a court might not enforce it against the employer -- especially if none of the original signatories remain employed by either management or labor. But that would be a question for a court to decide. The employer would have to reject the agreement, and the employees would have to sue, before a court would decide if the contract should terminate.

Now, let me address your questions directly. You asked:

How can this employer be At-will, have permanent employees all under the same contract. The Agreement reads the employees represented must be permanent employees - these are all At-will from my read. It also states the employees must have signed a current employee agreement.

A: Michigan revised its labor relations laws in 2012 to become a "right to work" state. Employees do not have to adhere to a collective bargaining agreement. They can negotiate independently if they wish.

Current meaning from 1970 or an amended version. If ICC has the right to change that agreement without approval from the represented employees and they refuse to sign - is the agreement void?

A: The agreement is enforceable by any employee who chooses to accept its terms and conditions -- until a court rules otherwise. Modifying the agreement is only possible with the employer's consent, or according to its current terms and conditions.

What happens if we give notice to terminate or negotiate new terms and there is an impass tat the mediator can not resolve. Where is the Agreement then?

A: The employees would have to continue under the current agreement as currently in effect, subject to any intervening statutory changes that cannot be avoided (e.g., changes in the minimum wage, etc.).

There is no way that the employees can require amendments to the agreement, unless the agreement itself contains provisions for modification. I don't see anything in the agreement that provides for the resolution of disputes, so I can't comment further.

Hope this helps.

Customer: replied 3 years ago.


Now I am confused. Initially you felt this was a Third Party Beneficiary Agreement. Is it a Union Contract? I am not sure what the reference to the Right to Work has to do with this? I know the members can decline but that is not our issue. We (ICC) would like to void this contract and start over, or ask for a moratorium of the costs, or add a two tier structure one for existing and one for new hires. Of course we have the option of ignore the contact and waiting for the employees to sue. What would be your advice on how to proceed?

There is no union as representative of workers, because there has never been an NLRB election. The right to work prevents any organization from preventing an employee from working or bargaining independently of some other organization.

A third party beneficiary agreement permits a worker to enforce an agreement that the employer has agreed to follow. It does not require an employee to enforce the agreement.

Section 3 of the agreement permits termination after good faith mediation fails. All you have to do is mediate and if you don't get what you want, then the agreement terminates. Send notice to all current employees that if they want to mediate, they need to designate a representative to the mediation. If no one responds within the time limits of Section 3, then terminate the agreement.

Simple as that.

Hope this helps.

Customer: replied 3 years ago.

I am with you so far but what happens if we mediate and there is no change. Is the Contract terminated at this point too?

Carleen

Yes, that's exactly what section 3 provides. You serve a notice of termination on the workers. You engage in negotiation. If negotiation fails, you request mediation. If mediation fails, the contract terminates.

If your goal is to completely negate the existing contract, then your negotation would be to present a contract that provides for exactly what you are willing to do as an employer going forward. If the workers accept, then you have your contract. Otherwise, you go through the steps, try to bargain in good faith, and when it fails, the contract terminations irrevocably.

Hope this helps.
Hello again,

I'm wondering if you have further questions about this issue or are we "all good?"

Thanks in advance.
Customer: replied 3 years ago.


I am still a bit confused with the contradictory answers of what happens if we negotiate to an impasse. In one case you say we have to abide by the contract and in the other you say the contract is terminated. Which can I rely on for this?


 


Carleen

I don't believe that there is anything contradictory in my previous answers, so please permit me to try again to clarify any possible misunderstanding.

 

The issue surrounds a third party who attempts to enforce the agreement as currently agreed upon at the time that enforcement is sought -- as opposed to the modification or termination of that agreement.

Right at this instant, there has presumably been no attempt to terminate the agreement. Therefore it is enforceable as currently written, and any third party employee can enforce the agreement on its terms and conditions.

However, if you start proceedings to terminate the agreement, then that may change the outcome. As a practical matter, and as an employer, you want to impose a specific at will employment contract on all of your employees. Let's call that agreement X. Currently, there is an agreement Y, to which all employees and you are subject.

You can, in good faith attempt to bargain in good faith for the modification of agreement Y, such that it will ultimately resemble agreement X in all material respects. If you accomplish this goal, then there is no reason to terminate agreement Y, because it would be identical to the desired agreement X. However, if you cannot accomplish the goal, then once negotiation and mediation fail, agreement Y terminates, and it is at that instant, unenforceable by any present or future employee.

And at that point you would be free to impose agreement X, and if any employee disagrees, then you can terminate them effective immediately.

The result in each circumstance is the same: an agreement X will be formed, either by negotiation/mediation under the existing Section 3 of agreement Y, or by force, after termination of agreement Y.

Hope this helps.

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