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Contract Language

Management Rights

What does management want? Employers often seek contract language that reserves their authority to act unilaterally in all areas where the contract is silent. Union negotiators should consider this when crafting contract proposals. Explicit language that specifies management rights in detail is preferable to language that is subject to open-ended interpretation by the employer.


Most Favored Nations Clause

A most favored nations clause specifies that if a the union grants more favorable terms to any employer than those terms already contained in the collective bargaining agreement, then any signatory employer may also apply those favorable terms to its workers. The following is a typical contract clause. “Should the union extend to any other employer within the area covered by this agreement, terms or conditions which are more favorable to said employer than the terms and conditions set forth in this agreement, such terms and conditions shall automatically be extended to all employers, parties to this agreement. “

A most favored nations clause can present great difficulties to an organizer seeking an agreement with open shop contractors. In a non-traditional market segment there may be wide disparities in wages and working conditions. Consider adding contract language that specifically addresses that market segment. For example, if maintenance work in a region was largely performed by non-union contractors, add: “It is understood that this clause does not apply to maintenance contracts.”

In the interest of obtaining uniformity in wages and working conditions, the union also should consider adding a “me too” clause to the collective bargaining agreement. Such a provision would require extending to all crafts any favorable terms that have been granted to one craft.


One-Time Agreements

Occasionally, contractors or developers will sign a union agreement with the local for the duration of a single project. Maintaining the flexibility to negotiate such agreements will assist organizing activities. The following clause can be added to a standard most favored nations clause. “If the union makes any “project only” agreement with any other employer containing terms or conditions which in the opinion of the employer are more favorable to such other employer as provided herein, that other agreement – at the option of the employer, shall be substituted for this agreement shall apply for that specific project.”



Subcontracting clauses limits how and to whom a contractor may assign work. To the extent that such a clause seeks to preserve bargaining unit work, it is termed a primary clause and legal for any union to negotiate. A primary clause may be enforced by economic self-help and need not be limited to on site construction work. A secondary clause is one that is directed at a non-signatory third party. In the construction industry, secondary clauses are allowable if they are directed only at other employers on the construction site. Under Section 8(f) of the Act, unions may negotiate a pre-hire agreement with signatory contractors that provides for union-only subcontracting on a construction project. “Employers shall not contract any work covered by this agreement to be done at the site of the construction, alteration, painting or repair of a building, structure, or other work to any person, firm or company who does not have a an existing labor agreement with the Union covering such work. “


Key words and phrases in contracts (from the Boilermakers)

Many words and phrases that frequently appear in contracts can cause problems for people when they first begin interpreting contract language. You may use these terms in different ways in your everyday life, but they have very specific meanings when they appear in a contract.

  May -- Implies permission, but not obligation. Something can be done if the party wants to do it, but they are not required to do so. For example, "The company may provide a holiday turkey in December." If you don't get one, you have no grievance.
  Should -- Expresses moral obligation, but not legal obligation. "The company should provide a holiday turkey in December." Again, don't count on getting one.
  Shall -- Denotes compulsion. The party is obligated to act. "The company shall provide each employee a holiday turkey in December." This one you can take home and cook. If you don't get it, you've got a grievance.
  Will -- Simply denotes the future. Does not imply compulsion. This verb confuses a lot of people. If you want to make sure the company does something, use "shall" or "must," not "will."
  Must -- Implies necessity or compulsion. Stronger than shall. "Employees must call in prior to an absence for illness or injury." If you're going to stay out sick, you are obligated to call in first.
  When (or if) appropriate -- Allows full discretion to management. "When appropriate, the company may reassign employees to jobs in a similar pay class." In this case, the company decides where you work. Though you may argue over whether the pay is truly "similar," the company can reassign you whenever they feel it is appropriate.
  When (or if) practical -- Slightly more compelling than "when appropriate." The union can argue whether something is practical. "When practical, employees may take their breaks outside so they can smoke." In this example, there is a great deal of room for arguing either way.
  When (or if) practicable -- Means when "workable." Management decides what is workable, so the decision still belongs to them, but there may be room for discussion.
  When (or if) possible -- Very compelling. The only argument for inaction is that it is not possible to do so -- a very difficult case to support. "When possible, the company will notify employees 14 days prior to any layoff." Could the company argue it was impossible for them to see the layoff coming?
  Normally -- Allows management to decide when a situation is other than normal. Arguments challenging what is "normal" require a great deal of documentation with evidence over a long period of time.
  To the maximum extent practical -- Management decides whether an action is practical, so they determine the limit here.
  To the maximum extent possible -- How much is possible? A lot! You'd better hope this phrase is part of a sentence obligating the company to do something -- and not you.

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