Management Rights

While virtually all collective bargaining agreements (“CBA’s”) include an article ostensibly preserving the employer’s right to “manage the business,” those provisions often come with restrictions.   Thus management may have the right to discharge, but only for “just cause.” Likewise the right to determine the “means and processes” of manufacturing but with limitations on subcontracting or combining jobs, among others.

A proper approach to “management rights” issues, in general, is to consider the function of the contract language. That is, what objective does the language seek to achieve? As practitioners know, the very existence of a CBA serves as a constraint on the otherwise unfettered right of the employer to take any otherwise lawful action with respect to the workforce. Beyond that overall encumbrance, the specific provisions of the agreement, setting forth all the various terms and conditions of employment further restrict the employer’s freedom of action.

Thus the “management rights” article of the CBA serves as the employer’s mainstay in its ability to run the business at a profit. It is important to remember, in this context, that the employer is not only competing with foreign companies, but in many instances with non-union companies in the same industry, and often in the same locale. It is not in the long-term interests of unions, or unionized employees, to restrict management to the point where it is no longer competitive.

In evaluating “management rights” cases, therefore, it may be appropriate to point out that the applicable language of the CBA allows the employer wide discretion to operate the business, in the absence of specific restrictions. By doing so, the proper balance between the union, the employees and the employer is most likely to be preserved.

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