How to Use the Zipper Clause in Contracts

¶ … Faith Bargaining The company's unilateral implementation of the two new work rules without providing the union with prior notice or an opportunity to bargain did constitute a violation of the duty to bargain in good faith under the LMRA, as amended, because at least one of the two new rules -- that regarding bonus pay for perfect attendance -- was a mandatory subject of bargaining (Fecteau).

Management attempted to circumvent the LMRA by applying a zipper clause, the language of which is neither clear nor unmistakable in terms of waving all bargaining rights. The Union could sue by claiming that the zipper clause only appears to be concerning material already stated in the contract and not new additions. The purpose of the zipper clause is to effectively put an end to all bargaining between Union and company (Nakamura).

Essentially it relieves both the Union and the company from engaging in any more negotiations over mandatory bargaining subjects that may be included or added to the contract during the term. Companies will apply a zipper clause in a contract when they know that they want to later add rules that they do not want to negotiate with the Union.

The zipper clause can be used to allow them to do this, but the language of the zipper clause must be very precise and acknowledge that the Union and the company wave the right to bargain. Typically such clauses do not appear in contracts because Unions rarely agree to them. Instead, if a zipper clause appears it is less precise and clear and the Union does not wave its bargaining rights by acknowledging it (Nakamura).

The right to bargain in this case involves the mandatory subject of bonuses, but it could also be said to involve the testing of employees. There could be a case for either, but primarily and most clearly the case for mandatory bargaining rights applies to the issuance of bonuses. The NLRB clearly notes that "bonus programs" and "merit increases" are subjects that involve mandatory bargaining -- and the company's rule regarding bonuses for perfect attendance is clearly a bonus program and merit-based increase incentive (Schwartz 97).

However, "physical examinations" and "health rules" as well as "drug/alcohol testing" are also clearly noted in the mandatory bargaining list compiled by NLRB (Schwartz 97). Thus, the Union could make the case that base rules should be ones that the Union could negotiate.

First off, the new rule of the company dictating how employees are to be rewarded for perfect attendance by receiving an extra dollar per hour for a week of perfect attendance and an extra dollar and a half for a month's perfect attendance is an obvious attempt to institute a new bonus program. It could not be taken as otherwise. Why does the company state that it is not a mandatory subject for bargaining? Obviously, the company does not want to negotiate these terms.

Management attempts to circumvent the Union's right to bargain by claiming that the "current contract language gave management the right to unilaterally implement the two rule changes .. even if they were" mandatory subjects. Thus, the management first attempts to assert that the subjects are not mandatory and then back-tracks and says that even if they are, the contract contains a zipper clause as well as other clauses that support the company's right to add new rules.

The Union disagrees and has every right to disagree as the company is clearly trying to pull "a fast one" by alluding "Management's Rights" and the terms dictated under "Wages" and the zipper clause. Still, this is only one interpretation of the case and others might disagree, and history has shown that interpretations are always differing when it comes to the law and its implementation.

For example, there is the case of Provena Hospitals, which asserted that it had the right to implement a bonus pay change to its existing contract based upon a clause within the section on Management's Rights which stipulated that management had the right to "change .. and/or introduce new and improved" rules ("Implementing Work Rules During the Term of a Collective Bargaining Agreement"). The NLRB upheld the Hospitals right to change the contract without entering into bargaining because of this clause.

Now, a similar clause exists in the company's contract which management pointed out to the Union, which states that management has the "right ..

to issue, enforce and change Company rules." Thus, while it can be said that management's unilateral implementation of the two new work rules without providing the union prior notice or a chance to bargain was a clear violation of good faith bargaining duties, it may also be argued that Management Clause in Section 3 acts as a better zipper clause than the zipper clause because it provides management with an "out" or the reserved right to alter the contract as it sees fit.

This interpretation, however, is not guaranteed and it could very well happen that the NLRB would not provide the same ruling in this case as it did in Provena. Thus the appropriate remedy is clear (in order to avoid undue litigation): the company should allow the Union to bargain with the company regarding the two new rules. This is a simple solution, however, and one which the company may not wish to accept. Obviously the company does not want to negotiate these new rules for whatever reasons.

Nonetheless, the easiest and best solution to the problem at hand is to accept the law and its most likely interpretation as it applies to this case and go ahead and enter into a bargaining agreement with the Union. There can be no denying that either of the two new rules presents itself as a mandatory subject for bargaining in good faith. The only argument that the company can make is that its zipper clause excludes any more bargaining.

However, this clause is not precise in terms of "new rules" or additions to the contract and so therefore is likely not to be enforceable the way that the company management believes it to be. The entire point of good faith bargaining is just that -- to exercise good faith, an essential element to good management-employee-union relations. There is no reason to try to circumvent good faith bargaining and, on the contrary, every reason to try to engage in it. It allows both.