Master contract

A master contract (or master agreement) is a contract reached between parties, in which the parties agree to most of the terms that will govern future transactions or future agreements. A master agreement permits the parties to quickly negotiate future transactions or agreements, because they can rely on the terms of the master agreement, so that the same terms need not be repetitively negotiated, and to negotiate only the deal-specific terms.

Labor context

In the context of labor law, a "master contract" is a collective bargaining agreement which covers all unionized worksites in an industry, market or company, and which establishes the terms of an effective employment contract common to all workers so organized in the industry, market or company.^[1][2][3]

A master contract may be geographically limited and occur at the local, regional or national level. It may also be limited to a specific market, whether local, regional or national.^[4] Although a master contract governs the general terms of employment that apply uniformly across the company or industry, master contracts often provide for local terms to be negotiated.^[1] Some master contracts may also permit local or regional variations in order to meet special economic, competitive, or other circumstances for a union or company.^[1] For example, in the early 1980s the United Auto Workers exempted Chrysler from the master contract governing the U.S. auto industry because the company was in deep financial trouble.^[5]

Master contracts are common in the automobile manufacturing, shipping, package express, mining (especially coal mining), and general manufacturing industries. For example, the UAW and the "Big Three" American automakers tend to operate in this pattern: the union selects one manufacturer with which it does most of its negotiation; when an agreement is reached, the union attempts to apply the same contract to the others.^[2] Other areas where master agreements can be found include tire manufacturing,^[6] public education,^[7] baking,^[8] custodial and housekeeping services,^[9] and healthcare.^[10]

In some cases, the goal of a master agreement is to standardize pay and benefit conditions in a market or industry so that employers compete on the grounds of quality services, quality products, or improved workplace safety.^[11][12]

Master contracts also make it easier for newly organized workers, who get rolled into existing contract rather than having to negotiate their own first contract (with the risk that negotiations may drag on or collapse, causing the new union to eventually collapse).^[12]

Traditionally, such contracts have been struck as exclusive class actions between the whole class of workers and the whole class of (or a single) employer(s), excluding the employment of any workers outside of it. In the United States in particular there has been pressure from the employing class generally on this.

Strategy

When negotiating a master contract, the union often selects the financially strongest employer or worksite to negotiate with it. This agreement becomes the master contract, and sets the pattern for bargaining with the other employers or worksites.^[5][13]

Master contracts can also be used strategically for other ends such as organizing and to break down employer resistance to collective bargaining. In Canada, unions have used master contracts to organize thousands of new workers. A master agreement has tended to weaken an employer's resistance to the spread of the union to unorganized worksites or divisions, and some industries and markets welcome the standardization of pay and fringe benefits that unionization brings.^[14] In the United States, some unions have sought to create master agreements which provide for a neutrality agreement, code of conduct for the organizing election, or neutral third-party oversight of an election in order to make union organizing easier.^[15] Some master agreements even state that new workers will automatically come under the master agreement.^[15] Master bargaining also reduces the likelihood that employers will refuse to bargain or seek to whittle away at unionization workplace by workplace.^[16]

Criticisms

Some union members criticize master contracts for submerging local differences, and for being undemocratic.^[17] Many critics point to master contracts which impose certain fundamental terms and conditions of employment (such as wages, fringe benefits, pensions and certain working conditions) as being nothing more than company unionism.^[15] In the United States, unions have engaged in bitter battles over such master agreements in California and Ohio.^[18]

Australia

In Australia, master contracts proved so contentious that they were essentially outlawed under the 1996 WorkChoices legislation and its 2005 amendments.^[19]

Master Service Agreements

Contracts in the information technology, contract research, and similar "open ended" fields are often negotiated as a "Master Service Agreement" and a "Statement of Work." Typically, the Master Service Agreement specifies generic terms such as payment terms, product warranties, intellectual property ownership, dispute resolution, and the like. Each project - a program to be written, a research project to investigate murine effects of a compound, or the like - is negotiated in a Statement of Work, a project-specific rider to the Master Service Agreement, to specify the problem to be solved, schedule, price, and the like.

Master Transaction Agreements

Financial service institutions often agree to Master Transaction Agreements, specifying terms such as the types of transactions to be covered, credit limits, margin requirements for open positions, delivery, failure of delivery and other default, clearing and settlement, dispute resolution, and the like. Under the Master Transaction Agreement, individual transactions can be negotiated in seconds—the traders only need to agree to the security, the quantity, and the price. Most master agreements are bilateral, one pair of firms per agreement.

Most exchanges and electronic communication networks (ECNs) require member firms or customers to enter a "Trading Agreement," a contract that sets out the obligations and rights of the exchange and one particular firm or customer. Each executed trade is typically a separate contract, with an obligation to deliver cash in one direction and securities in the other, with most terms of the single-trade contract controlled by the master agreement.

References

1. ^ ^{a b c} Najita, Joyce, and Roberts, Harold S. Roberts' Dictionary of Industrial Relations. Washington, D.C.: BNA Books, 1994. ISBN 0871797771
2. ^ ^{a b} Rainsberger, Paul K. "Historical Models of Collective Bargaining in the U.S." In "Collective Bargaining." University of Missouri Labor Education Program. No date. Accessed July 30, 2008.
3. ^ Korea Shipping Corporation v. New York Shipping Association-International Longshoremen's Association Pension Trust Fund, 880 F.2d 1531 (1989).
4. ^ Hardin, Patrick; Higgins, Jr, John E.; Hexter, Christopher T.; and Neighbours, John T. The Developing Labor Law: The Board, the Courts, and the National Labor Relations Act. 4th ed. Washington, D.C.: BNA Books, 2002. ISBN 1570181519; Williams, Steve and Adam-Smith, Derek. Contemporary Employment Relations: A Critical Introduction. Oxford, England: Oxford University Press, 2005. ISBN 0199272433
5. ^ ^{a b} Levin, Doron P. "Chrysler Makes Plea To U.A.W." New York Times. July 21, 1990.
6. ^ Brus, Brian. "Bridgestone/Firestone, Union Negotiators Reach Master Contract." Oklahoma City Journal Record. June 10, 2005.
7. ^ Todd, Kris. "Spencer Teachers' 2008-09 Master Contract Ratified." Spencer Daily Report. May 9, 2008.
8. ^ Cimini, Michael H. and Muhl, Charles J. "Master Contract at Philip Morris." Monthly Labor Review. May 1995.
9. ^ Pryor, Alex. "OneSource, SEIU Union Reach Contract for Tufts Janitors." Tufts Daily. September 22, 2004.
10. ^ Rauber, Chris. "CHW Hospitals Deliver Union Contract After Short Labor." San Francisco Business Times. April 25, 1997.
11. ^ Brisbin Jr., Richard A. A Strike Like No Other Strike: Law and Resistance During the Pittston Coal Strike of 1989-1990. Baltimore, Md.: Johns Hopkins University Press, 2002. ISBN 0801869013.
12. ^ ^{a b} Royle, Tony and Towers, Brian. Labour Relations in the Global Fast-food Industry. New York: Routledge, 2002. ISBN 0415221676
13. ^ "USWA Names Goodyear Target for Master Contract Talks." Rubber & Plastics News. April 14, 2003; Freeman, Sholnn. "Union Picks GM to Lead Contract Talks." Washington Post. September 14, 2007.
14. ^ Yates, Charlotte. "Expanding Labour's Horizons: Union Organizing and Strategic Change in Canada." Just Labour. 2002.
15. ^ ^{a b c} Kutalik, Chris. "Two Unions Enter Recognition Pact with Health Care Company." Labor Notes. July 2003.
16. ^ Fairbrother, Peter and Yates, Charlotte. Trade Unions in Renewal: A Comparative Study. New York: Routledge, 2003. ISBN 0826454372
17. ^ The claim is that by permitting thousands or even tens of thousands of members to vote on a contract, the master contract makes it impossible for the contract's opponents to muster enough votes across all workplaces to defeat the contract. For an example, see: Biers, Carl and Niemeijer, Marsha. "Dockworkers Campaign Against ILA Master Agreement." Union Demcoracy Review. June-July 2004.
18. ^ Gaus, Mischa. "Quiet Deal Leads to Bitter Fight in Ohio Hospitals." Labor Notes. April 2008; Brenner, Mark. "Health Care Local Charges SEIU Is Shutting Members Out of Bargaining & Organizing." Labor Notes. March 2008; White, Ronald D. "Unions Battle for Nurses." Los Angeles Times. August 3, 2003; Lando, Tamar. "Union Triage." L.A. Weekly. September 25, 2003; Kaplan, Esther. "Labor's Growing Pains." The Nation. June 16, 2008.
19. ^ Murray, Jill. "Work Choices and the Radical Revision of the Public Realm of Australian Statutory Labour Law." Industrial Law Journal. December 2006.