ARBITRATORS AND THE SENIORITY RIGHTS OF FOREMEN

by Philip Harris When arbitrators must decide the seniority rights of dis- placed foremen, how much do management's dghts suffer?

PHILIP HARRIS is Assistant Professor of Management at Bernard Baruch School of Business, City University of New York. He serves through the Federal Mediation and Conciliation Service and the American Arbitration Association as a labor arbitrator. He is currently researching the area of electronic data processing applications for personnel systems and consulting for the City of New York. Recent publications have ap- peared in Calijornia Management Review, Labor Law Jownol and The Arbitration Journal.

The four largest unions in the United States are on record as opposing seniority benefits for supervisors who are returned to the unionized ranks of their former hourly- ranked jobs. But companies oppose this stand because it makes worthy people reluctant to accept promotion and causes a loss of key people during cutbacks. When arbi- trators settle such disputes, how much do they interfere with management rights? This paper will examine some typical cases to determine the present practices and indica- tions of future developments.

The major cause of developing disagreement in these cases is the problem of senority rights for supervisors who have been members of the collective bargaining unit and have been subsequently promoted into managerial positions. During the time spent in the unit, seniority rights accrued, but many contracts do not mention the method of disposing of these previously earned rights once the worker is promoted to foreman. A determination of these rights becomes mandatory when, for instance, the foreman is returned to his old job during a reduction of the work force because his management position is no longer required.

36 Management of Personnel Quarterly

Philip Harris

A group of 324 arbitration awards, drawn from Labor Arbitration Reports, published by the Bureau of National Affairs, Washington, D.C., was incorporated into this study and subjected to a content analysis determining the issue in grievance, the positions of both management and labor, the arbitrators’ reasoning, and the award.

Sample cases are presented here to illustrate typical kinds of disputes: 1) should reinstatement of the worker into his collective bargaining unit assure him the seniority he possessed at the time of promotion? 2 ) granted his rights to seniority, should he be reinstated with an accumulation of seniority from his time in management, or with benefits frozen at the date of promotion? Cases in which the company position was sustained will be followed by those in which the union was sustained.

THE COMPANY SUSTAINED

Reinstatement of the Worker

Issue in Grievance: Three supervisors at Hooker Chemical Corporation’ were no longer required due to a reduction of staff. Since these men all came up the ranks through the collective bargaining unit, the company saw fit to return the men to their former unit positions. There were union people on layoff a t the time, but management felt that the three ex-supervisors were entitled to the posts due to their greater length of service even without adding the time in supervision. The company assumed it had acted properly in the absence of contractual language on the subject. However, the International Association of Ma- chinists claimed the move was entirely in error because the men severed relations with the union upon accepting the supervisory jobs.

iiward: The key to the arbitration board ruling was this statement: “Most reported arbitration decisions dealing with contracts like the present one, in which promotion from the bargaining unit is not specified as a basis for breaking seniority, hold that a bargaining unit employee promoted to supervision may, on being returned in good faith by the company to the bargaining unit, assert the seniority he possessed at the time of his promotion.”

Accumulation versus Retention of Benefits

Where seniority privileges are allowed to supervisors, there is a difference of opinion concerning the reckoning of the seniority: should i t be an accumulation of seniority while the employee is in supervision, or a retention of benefits wherein credit for length of service is frozen at the promotion date? Even where contract provisions define accumulated seniority, there may still be some dispute, as in the case of the Budd Company2 and the United Auto Workers, which provided that demoted supervisors were entitled to accumulate seniority if they had their work time within a single particular plant of the company.

Issue in Grievance: An issue of seniority credit was raised

Hooker Che&al Corp., 36 LT 857. * Budd Co., 37 LA 585.

Fall, 1966

when a supervisor who spent some time at another Budd Company location was returned to the bargaining unit. The union’s interpretation of the contract, stated to the company when the men were initially “transferred”, was that seniority would be terminated since each plant had its own labor contract. The company, in defense of its action, claimed that the subject employee was continuously employed in the primary pIant as evidenced by his remaining on its payroll. The employee was “on loan.” The company argued that no supervisor could ever temporarily work elsewhere if the union were sustained.

Award: The arbitrator did not accept the company view that the employee remained at the primary site; however, he said, (‘ . . . I do not believe that the accumulated property rights of an employee can be taken away without his full knowledge and consent by parties in collective bargaining or by an arbitrator in contract interpretation. Upon pro- motion, the employee was ordered to work at the second site. Having no choice but to comply, he should not thereafter suffer a loss of benefits.” Since the arbitrator saw seniority as vested, he found for the company. Had he determined otherwise, the employee would have been sacrificed to the system supposedly created to protect him.

Related Cases: A study of other decisions brought to light a number of alternative reasons why an arbitrator upheld the company and preserved the seniority of the returned workers. First, unions often seek of management the open door of promotion for members into supervision; both parties benefit from such a policy in that capable people who have a perception of the thinking and problems of the rank-and-file are recognized. But capable employees can be effectively encouraged to accept promotions only if they will not lose long years of seniority. Second, where parties considered the transfer to supervision as temporary, the employee should not suffer the loss. Seniority is a “property right” and an employee cannot be deprived of it without a clear contractual bask. He is entitled to advance notifica- tion of forfeiture.

Other decisions concentrated on technical contract matters such as the following: an enumeration of the ways to break seniority excludes other ways not specified in the list; wherever the contract is silent on the point, an arbitrator’s ruling that seniority is broken by promotion would be a modification of the agreement and this is forbidden to the arbitrator; contractual references to “employees” pertains to all employees, not only to union members; and failure to challenge a seniority list indicates its acceptance.

Where accumulation versus retention of benefits is not settled in the contract, arbitrators holding for accumulation have offered several reasons for their decisions, but primarily this: in order to retain a place on the seniority list, an employee must accumulate seniority; otherwise he would lose ground to fellow employees who were not promoted. Those arguing for simple retention have challenged their opponents by posing dilemmas: if the people who are laid off cease to accumulate benefits, should not a parallel apply

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ARBITRATORS AND THE SENIORITY RIGHTS OF FOREMEN

to those promoted out of the ranks? If benefits were to accumulate, would not the union in effect be bargaining for the current rights of supervisors? Does this make sense when foremen do not vote on acceptance of the terms of the contracts?

UNION SUSTAINED

Reinstatement of the Worker

Issue in Grievance: Before the signing of the first labor- management contract between United States Radium Cor- poration3 and the Independent Radium Workers, two men were promoted into supervision. Some time after the effec- tive date of the agreement, they. were demoted to their hourly-rated jobs. The union submitted a grievance, claiming that no seniority status existed for them in terms of the collective bargaining contract, and arguing that since the jobs to which they were returned were either new or vacant, the jobs must be posted and available for bid by all.

The company admitted it failed to post the openings but stated the men were merely being transferred temporarily- this did not require posting. Further, management placed high value on the two people. Had they been laid off, they would seek other jobs and not return when production resumed. This would have negative effects on the company and on the hourly employees who would be without adequate supervision.

Award: The arbitrator saw no basis for extending the seniority privileges. He found that since no bargaining unit existed when the men were promoted, the concept of a bargaining relationship was eliminated. The right to transfer, as spelled out in the contract, “ . . . applied solely to transfer rights between and among employees on the jobs within the bQYg&hg unit. I t is self-evident that any right granted employees by the agreement has to do solely with employees who are within the bargaining unit.” Any exception to this must come from a clear agreement of the parties.

Accumulation versus Retention of Benefits

Issue in Grievance: The definition of “retain” in a contract clause concerning accumulation of seniority rights caused a dispute between Celotex Corporation4 and the Oil, Chemi- cal and Atomic Workers International Union when six fore- men were returned to the bargaining unit during a reduction of force. A clause in the labor contract provided that an employee promoted into management “shall retain his seniority rights for reinstatement in the job from which he was promoted . . . ” The company, relying on past practice, calculated on the basis of accumulated seniority in determining their rights. The union countered by spelling out the difference between the retained and accumulated con- cepts, claiming the language of the contract was quite clearly in favor of the former.

Award: The arbitrator decided that the definition of “re- tained,” as interpreted by the union, had been clearly United States Radium Corp., 36 LA 1067. Celotex Corp., 37 LA 240.

38

established in labor relations. He noted that clearly written language could not be altered by oral agreement regarding the intent of the parties. Regarding past practice, there was conflicting evidence, most of which actually supported the union.

Related Cares: Alternate philosophies .among arbitrators supporting unions were evidenced by such rulings as the

If the company were so motivated, it could compensate the foreman for his lost benefits, and grant him its own type of supervisory seniority. 2) A man outside the unit cannot bid for a unit job because this right is a benefit of membership. Seniority is a matter of contract, and the employees never covered by the agreement are not in a position to seek this primary privilege of member- ship. 3 ) Where a unit employee loses seniority upon transferring from one department to another, a supervisor cannot be given a greater benefit, that of accumulating seniority. 4) Contract reference to “employee” implies “unit employee”. 5) Contract reference to “employer” concerns that plant under contract, not other plants of the company.

WHAT DO UNIONS WANT?

It is apparently inconsistent with union philosophy to dilute seniority lists with employees attaining higher status outside their jurisdiction. Unions draw a sharp line between members of their ranks and those who have been promoted into supervision. Supervisors returning to the unit may have adopted thinking processes characteristic of management and opposed to the union’s policy. The ultimate problem of unionism, as of any other group, is control.

Although it may seem logical that unions would want to ease the transition of their members into management, it is common that while advancement Yithin the collective bargaining jurisdiction is sought on the strict basis of seniority, this philosophy is abruptly abandoned when employees leave the unit job. Unions evidence little interest in having a first-line supervision (and an ultimately higher supervision as further promotions are made) which shows perception for the problems of subordinates. Where a union approves of the concept of promotion from within to include moving out of its jurisdiction, there is often a contradiction between theory and practice.

The unions’ reluctance to open seniority lists may be due to the resistance they have encountered from the legal system and employers in obtaining collective property rights in jobs. Barkin points out that the unions’ goal is to ‘‘maintain job priorities and available employment Oppor- tunities for the present work force . . . to define the rules regulating the rights of classes of individuals to different employment opp~rtunities.”~

Despite the strong position unions have taken, more fre- quently than not arbitrators have ruled in behalf of the company in granting seniority benefits to supervisors 5 Solomon Barkin, “Labor Unions’ and Workers’ Rights in Jobs,” IndustsMZ Conpict, Arthur Kornhauser, Robert Dubin and Arthur H. ROSS, McGraw Hili Book Co., Inc. New York, 1945, p. 128.

Management of Personnel Quarterly

promoted from the ranks. (The one seniority area where the union was upheld almost exclusively was seniority of supervisors who never held membership in the unit.) When the reason offered by the arbitrator in favor of the company is that unions want the promotion ladder opened to their members, a contradiction persists. Such interpretations by the arbitrators are based upon their own standard of what the unions should want, not what the unions do want as a matter of policy. The nation's largest four unions have opposed seniority benefits for supervisors. These unions International Brotherhood of Teamsters, United Steel. workers, United Auto Workers, and International Associa, tion of Machinists, have a total membership of some 4.t million workers.G This is a substantial segment of ~

union world, and testifies to the basic attitude on the question.

WHAT MUST COMPANIES DO?

Generally, the effect of arbitration has been largely to clarify the problems of the company in managing its personnel, especially the changing role of the foreman. The foreman, frequently coming up from the ranks, is in a good position to make a positive contribution to the administration of labor relations, but the company must accept the respon- bility of training him for this task. The union must also regard the promoted supervisor in a different light. It is unlikely that all unions will change their attitude toward the returning supervisors, at least in the foreseeable future.

It will require a determined effort on the part of manage- ment and supervisors to establish-by deed-over a sustained period of time that union self-interest requires acquiesence. However, constantly working against this possibility is the reality that differing objectives exist for the company and employees. Each group demands loyalties to its own priorities, making it highly speculative that unity on this point can ever be obtained on a widespread basis. The entire problem of seniority is one for the bargaining table, and for arbitration only when the agreement is not firmly established in the contract. It seems paradoxical that companies seldom seek superseniority for supervisors, especially when such an agreement is standard for union officials in a plant to permit a union representative on the premises as long as work remains within his competence. The company could likewise seek such benefit for its key people. Apparently, companies yield quite consistently in collective bargaining sessions where the issue is presented and rely on the prospects of a favorable arbitration finding. Therefore, seniority and the security it yields in the guarantee of work remain boons that the union is able to reserve for itself.

Directory of National and International Labor Unions in the United Slates, 1961, U. S. Department of Labor, Bur. of Labor Statistics, Washington, 1962, Bulletin 1320, pp. 14-32.

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