Right to Work Legislation: What Impact Does it Have on Union-Employer Negotiations?

UntitledRight to Work: When you hear the term, you might think, “Well obviously, every American has a right to work!” So what exactly does this mean? Currently, there are 26 states in the U.S. with Right to Work statutes – laws that ensure state citizens that they have a right to refuse participating in a labor union associated with their employer. That’s not to say, however, that labor unions are obsolete in these parts of the country, it only means that whether or not an employee decides to join is completely voluntary.

Right-to-Work Laws: Pros and Cons

Those favoring Right to Work argue that these statutes have an upside: Workers aren’t forced to pay hundreds of dollars in union fees for services they may not necessarily want in the first place – thus saving them money. Proponents also argue that these states can attract more businesses, businesses that may want to operate in a setting that’s not as union heavy.

On the other hand, those against Right to Work argue that these statutes result in lower wages because of an inability to bargain freely. They also argue that these states’ employers are less likely to offer benefits like pensions and health insurance – since there may be less of a labor union presence fighting on the behalf of workers.

Affecting Contract Agreements

The impact of right to work laws on unions and employers can affect the contract negotiating process. When unions reach contracts that require all employees to pay dues, the impact is that they’re much better funded. Because of this, they argue that they have a much stronger ability to fight for higher wages and benefits on behalf of unionized employees. However, such agreements are not allowed in Right to Work states.

In a Right to Work state, for example, an employee’s thought process may be, “Why pay unions fees when I don’t have to? The union is going to fight on behalf of the entire workforce regardless.” But when employees opt out of union dues, unions are less powerful, can’t operate as effectively because of lack of funding, and in large, are less likely to reach effective contract agreements – the foremost right to work effect on unions.

What It Comes Down To

There are many obvious upsides and downsides when it comes to Right to Work. In essence, it’s an argument of individual choice (do I have to pay union fees?) vs. the idea that if everyone joins, unions are able to negotiate benefits more effectively.

If you’re a business that operates in a state that’s Right to Work or a state that could soon become Right to Work, Strom Engineering has the ability to advise you regarding these very complex laws. Over the years, we’ve helped many companies in regards to labor union negotiations; in addition to helping them set up reliable backup plans in case contract agreements can’t be reached. View our consulting services to see how we can help.

For information on how you can prepare for contract negotiations, whether you’re the employer or the union, read our post, How to Prepare for Labor Union Contract Negotiations

Temp Workers Help Honeywell’s South Bend, IN Aerospace Factory Stay Productive

Honeywell and the union representing workers at its aerospace plant in South Bend, Indiana continue to seek a resolution to a labor lockout that began in early May. The company has yet to reach a new contract with United Auto Workers Local 9 on a new 5-year contract, partly based over a disagreement concerning health care costs, according to a report from the South Bend Tribune.

In the meantime, the plant, which manufactures wheels and brakes for airplanes, has relied on both salaried and temporary employees to continue functioning.

Honeywell VP of Integrated Supply Chain Michael R. Madsen applauded the temporary and salaried employees in a statement, remarking, “You have continued to meet customer commitments and, in many areas, have achieved production levels higher than before the work stoppage.”

Locked out employees will be able to return to work once a new contract is finalized, Honeywell has emphasized.

Cost Considerations for Business Contingency Planning

A contingency plan is defined as the following: A strategy that can be put into practice in the event that a problematic circumstance threatens to affect your business’s operations. This can mean anything from a storm knocking your company’s data center offline, to unexpected costs arising as you look to wrap up a major project.

The contingency plan is, therefore, designed to ensure that your business continues to operate without any disruptions – or at least, with as few as possible. Needless to say, this means that having an effective plan readily available should be one of your highest priorities. But how do you go about maintaining one while taking cost considerations into account? Keep the following in mind:

Tie Business Contingency Cost peak Planning Directly to Your Budget

Any contingency plan should be closely associated with your business’s overall budget. Money may need to be set aside in a lock box, so to speak – meaning that funds are readily available only in the instance that an emergency situation arises.

Take Murphy’s Law Into Consideration

Think long-term. Murphy’s Law states: Anything that can go wrong will go wrong. To negate Murphy’s Law, identify the most common type of disruptions unique to your business and determine an estimation of costs that correspond with each.

The Cost of Business Contingency Planning VS the Cost of Facing an Emergency Unprepared

Prioritizing a savings amount for a contingency plan may cost you financially in the short-term, but will also provide you with peace-of-mind in the long-term. Take into consideration what you put at risk by not having a properly funded contingency plan: The inability to pay valued employees who could leave as a result, the loss of customers, your standing as a trusted provider in your respective industry, and potentially – a complete shutdown of operations that could threaten your company’s long-term viability in the market.

Should something threaten to disrupt your business, you can rest assured that saving for a contingency plan will likely cost you a whole lot less compared to if you were to face an incident without having properly saved.

The Verdict

Budgeting and financial management considerations are certainly paramount when formulating any plan. In the end, contingency planning is all about making unforeseen consequences foreseen – and properly preparing to financially cover them. This will ensure that your business keeps high morale and stays effective, even in the most trying of times.

Fore more information on planning for work disruptions, read our post, What’s the Difference? Business Continuity, Disaster Recovery, & Labor Contingency Planning.