Fractional Bargaining
Professor Bruce Fortado
University of North Florida
MAN 4401/6411 Labor Relations
The formal and periodic centralized labor-management decision-making in pattern
bargaining and company wide bargaining has a micro-level counterpart. The informal
and continuous labor-management decision-making that takes place at the work group
and plant level has been termed “fractional bargaining” (Kuhn, 1961). Some of these
agreements are reached within the framework of the grievance process. Other agreements
between the parties have become local work rules. In other cases, the parties reach an
agreement to bend the rules and keep this quiet (Dalton, 1959: 111). Still other accords
consist of unwritten agreements on how things will be handled in the future. What little
training most supervisors have historically been given in contract administration has
focused on how matters are handled in arbitration (Kuhn, 1961: 37). This left them
largely unprepared. The imaginative use of fractional bargaining can greatly improve
work relationships, providing the parties with much needed freedom from the legalisms
and bureaucratic restrictions of centralized decision making (Kennedy, 1954: 291).
The description of interests being handled in contract negotiations, and rights
being taken care of in the grievance process, is a bit simplistic. No contract is complete.
Some situations are impossible to foresee. As conditions change, new issues may
surface. Some vague or ambiguous language may be agreed upon in contract negotiation
in order to reach a settlement and avoid a strike. This means these passages contain
issues that must be sorted out during the life of the agreement. Moreover, the English
language is simply not clear enough to avoid all possible misunderstandings. For all
these reasons, the parties must negotiate during the life of the contract, rather than just
applying the contract. In the prior package of notes, the process of filling in the gaps
was called “interpolation,” which is different from “interpretation.”
Neither party can exert the costs involved in a strike or a lockout against the other
in day-to-day negotiations. Both sides, however, still have bargaining power.
The workers can apply pressure by engaging in wildcat strikes, slowdowns,
flooding the grievance procedure, working to rule (i.e. following procedures so precisely
the work process is slowed), turning in the employer for health and safety violations,
sabotage, sickouts, refusing overtime, and rawhiding (i.e. playing dumb). These methods
detract from productivity, consume managerial time and energy, and may worsen quality.
Some people think of such activities as solely existing in unionized settings. It should be
kept in mind some of the earliest field studies documented output restriction in nonunion
manufacturing (Roethlisberger and Dickson, 1939; Mathewson, 1931). A union simply
provides greater structure and elected leaders for such efforts.
The union can function like a pest that keeps stinging the large and powerful
employer. Small actions can foreshadow future problems. Further, as the story of
Gulliver illustrates, even a giant can be overcome by a determined and organized group
of little people. The true costs of the workers’ output restriction may be powerfully
conveyed when they corkscrew production from very high to very low levels from one
day to the next (Kuhn, 1980). It can be very enervating for supervisors to come to work
not knowing what to expect from one day to the next. At the same time, the workers can
vent their frustrations and assert greater control over their own destiny. The process of
applying pressure tactics can be so emotionally intoxicating, the union leaders need to
watch out for members who may get carried away (Kotlowitz, 1987: 15).
In some instances, the union will ask for something like the toilets to be painted
pink, when in fact they want the aisles to be narrowed (Kuhn, 1980). This indirect
approach might work if the first item demanded is large and costly, while the second is
smaller and less costly. Indirection could also allow management to save face when they
refuse to do the stated complaint, and comply with the real concern behind the scenes. If
what the workers really want is formally out of bounds, this sort of indirect pursuit of an
issue may be the only avenue available (Gouldner, 1954).
The stewards and committeemen can offer inducements as well. For example,
unforeseen production requirements might be met by the flexible use of workers and
working time (Kuhn, 1985: 255). A much needed worker may be brought over without
using formal channels, formal work classifications may not be observed for a time, work
pace may be increased, and normal break time can be used to get the job done. In return,
the union representatives and the workers expect some movement on their issues. Many
union leaders have learned more can be obtained via swaps than by being tough (Dalton,
1959: 116). Both sides need to learn to recognize situations that are critical to the other.
The managers also have bargaining power. Management can wield the heavy
costs of lost jobs and wages involved in subcontracting and layoffs. Transfers and
mandatory overtime can also provide leverage where the contract gives management
power in these areas. The supervisors also have the managerial prerogative to set
reasonable rules. When they are concerned about a matter, they can implement a rule to
deal with the matter. The company normally has more resources to support arbitration.
This leverage can be put into play by refusing to settle cases, forcing the union to expend
time and money to enforce the contract. Eventually, the union may have to pick and
choose what cases to pursue with its dwindling resources (Dalton, 1959: 145).
The delay involved in the appeal process also gives the managers some
advantages (Fortado, 1991: 87-88). In essence, supervisors can impose their will in the
short term. A worker can be made an example of in various ways. For instance, a
worker may be given distasteful jobs, frequently switching him/her from bad job to bad
job, or imposing unjust discipline upon him/her. A touring manager might fire a worker
to get the remaining workers to exert themselves (Whyte, 1951). Such actions can alter
the tone in making workplaces, because many workers will not want to fight to have
his/her rights restored. The grievance procedure often offers something less than
complete justice. Unlike court, the union grievance procedure does not include
compensatory or punitive damages. A grievant may have to fight for many months if not
over a year merely to restore his/her original condition.
On the inducement side, managers may provide informal rewards for those who
cooperate: such as, allowing extra break time, looking the other way on small thefts and
work rule violations, looking the other way on disciplinary violations, and the use of
company materials, equipment and time for the employees’ personal projects (Dalton,
1959). Many managers may find making informal and secret deals desirable, because
they can regain some of the power they lost when their organizations became more
centralized bureaucracies (Kuhn, 1961: 31). Both sides may find it helpful to get out of
the restrictions of the central accord, substituting personal relations for contractual
relations (Dalton, 1959: 112). If these informal deals and rewards get out of hand, a
periodic crackdown can be used to tighten things up. Conditions may later return to
“normal,” because these informal arrangements are a key part of getting the work done.
Human relations researchers noted very early on that workers were much more
receptive to decisions when they were involved in the decision-making than when
decisions were dictated from above (Whyte, 1948). In keeping with this, upper level
managers must be very cautious about unilaterally changing rules and policies. While
greater uniformity may be the result, the workers and union leaders will normally greatly
resent and resist the loss of their hard won gains (Kuhn, 1985: 255). The workers and
union representatives develop norms regarding how the managers should interact with
them based on their past experiences (Gouldner, 1954). Supervisors may make deals with
their group to overcome a short-term production problem, not thinking of the long-term
consequences. If they later revoke or tighten up what the workers now regard as their
rights, one can anticipate problems. When the leadership of either the union or the
company changes, it is also possible new policies will be implemented that disturb the
informal arrangements made in the past. In such situations, people may feel their good
faith informal bargains have been violated. Unilateral decision-making is being
substituted for bilateral decision-making. Very harsh reactions can be expected when
managers are perceived as exerting tighter discipline to show they are the bosses, and
they care more about the almighty dollar than their men (Gouldner, 1954). A period of
conflict can be expected to occur, until a new understanding is achieved. The people best
able to change conditions are those who originally negotiated the conditions. This
realization has seldom been recognized in practice (Kuhn, 1985: 255).
Some managers approach contract administration in a defensive way, thinking the
managers have the right to manage and they must strive to win any dispute that arises.
Alternatively, managers can view grievances as problems to be solved, not arguments to
be won (Kuhn, 1961: 31). Under this problem solving approach, the grievance procedure
can be used to identify problems, implement solutions, and thereby prevent future
difficulties. Can one ever win a conflict when there is an ongoing relationship? There are
many managers who think they can get ahead and stay there (Fortado, 1991: 94; Fortado,
1994: 268). As the economy fluctuates, and time passes, will the workers eventually be
able to get even later? Some managers have found it pays to work with their groups
rather than trying to defeat them (Fortado, 2001). Many managers do not have enough
formal authority and rewards to adequately get their jobs done (Dalton, 1959). This
means informal local arrangements, possibly secret ones, can be very beneficial. The
more illicit the agreement, the more tightly it will bind the parties, both of whom must
keep it quiet (Dalton, 1959: 117). Such agreements fill the gap left by the formal design.
The key question is, do the informal deals provide a useful supplement to formal
activities, or are they contradictory and harmful (Fortado, 1991: 93; Fortado, 1994: 27071)? There is no universal answer to this question. One must judge what conditions exist
on a case-by-case basis.
Some work groups are undoubtedly in a better position to pursue their interests
than others. Some groups hold critical positions in the production process, so they have
bargaining power. Some workers have special skills that make them very valuable,
because there are few other workers like them in the job market, and their contribution is
crucial in the production process. Some groups have more shared grievances than others.
Some groups have better communication channels than others. Some groups have more
status and prestige in the workplace than others.
Field studies suggested that the work groups who had power tended to exert it
(Sayles, 1958; Sayles and Strauss, 1967). These groups often have more rights than
those provided for in the contract. Conversely, groups that do not have much power may
not even get all of the rights provided for in the contract (Kuhn, 1985: 256). Foremen
frequently take advantage of groups that lack power.
Does fractional bargaining provide greater workplace democracy or will it foster
chaos? If a group pursued interests under the control and direction of the union
leadership, it might help many workers, and provide greater democracy. If a group
pursued its own parochial interests, and paid little attention to the union leadership, it
could create chaos. In sum, fractional bargaining holds the promise and the potential for
both greater democracy and more chaos (Kuhn, 1961).
What type of day-to-day treatment do the workers desire? The workers want to
be heard, but this alone is not enough. The impartial adjudication offered by the
grievance procedure meets some additional needs, but this also is not enough. Post hoc
adjustments seldom totally remedy injustices. Putting a person back to his/her original
condition, or providing some back pay, often do not do the trick. Dignity and respect are
lost during the delay involved in the grievance process. The workers would like to have
very rapid hearings and adjustments. Beyond this, they would like to be consulted ahead
of time (Kuhn, 1961).
The employees and union officers would like to establish a rapport where their
interests are democratically taken into account in the normal decision-making process.
Such involvement will provide greater prestige than the workers have had heretofore. In
sum, how issues are handled can be as important, if not more important, than the issues
themselves (Whyte, 1948). The process necessarily conveys important messages in terms
of status, face, self-esteem and respect. Every decision reflects the current state of the
relationship. For instance, if a supervisor will bend a rule, regardless of which specific
rule it is, a certain rapport evidently exists with his men. By bending the rule, the
supervisor recognizes the men and shows a willingness to accommodate their interests.
There are certain issues, though, that the workers and union officers want nothing
to do with. They do not want to be consulted on hot topics like discipline and unpopular
assignments. The union officers dealing with grievances can hardly be involved in
making the decisions that may favor one worker over another or lead to a grievance
where they must represent the employee in question.
Inside Strategies In the 1986, the AFL-CIO issued a publication entitled The Inside
Game: Winning Workplace Strategies. The difficulties posed by new employer tactics
were recognized. Long before bargaining began, some employers would claim financial
distress. A publicity campaign was sometimes started with both the workers and the
surrounding community. Huge concessions would be demanded in bargaining. Surface
bargaining was sometimes employed. The employer would go to impasse and implement
the last and best offer. If the workers struck as expected, replacement workers would be
brought in. In some cases, a decertification election would be initiated after a year had
passed. In other instances, contracts were abrogated when bankruptcy was declared.
Unions were being broken. Instead of leaving the workplace and allowing scabs to be
brought in, the AFL-CIO went back to the past to describe how unions could win by
having their members work and apply internal pressure tactics.
A key initial step is involving the workers. An organizing committee should be
formed to orchestrate the inside game. Whether one calls the recruitment of activists
“one-on-one,” internal organizing or building solidarity, a large network of supporters
must be formed. A “Solidarity Fund” should be built up to support any worker that is
unfairly suspended or discharged. Donations can be obtained both externally from other
unions and internally from one’s own union brothers and sisters. Research, education
and communication must be undertaken to get out the word about how unfair what the
employer has insisted upon is.
As far as the internal strategies go, the aim is to take the employer out of known
and predictable territory. Informational picketing, daily rallies, and wearing symbols of
solidarity (hats, buttons armbands, bumper stickers and t-shirts). As mentioned earlier,
the employees may work-to-rule, refuse to work out of classification, cite safety and
health violations, take sick days, take their own hand-fashioned tools home, refuse
overtime and call-ins, and take sick days in groups. Friends in the community may flood
company phone lines and simultaneously draw attention to the unfairness of what is
going on. Community groups should be contacted to obtain support. Media events
should be held to get key messages into the press. Other labor unions should be solicited
for their support. If the contract no longer applies, the grievance and arbitration
procedures may no longer be in operation. Using the right to concerted activity
guaranteed by law, five workers may notify their superiors that they are going to present
a grievance case to management. Since there are no existing procedures, it may take
hours to negotiate how things should be handled. One company sent the first five workers
home, only to be confronted by another five and another five.
The employer may become tired of the internal strategies and lockout the
workers. This is legally preferable to the union to a strike. Under a lockout, only
temporary replacement workers may be brought in. Further, the workers may be entitled
to unemployment compensation that they would not receive in a strike.