Management vs. Labor in Kansas
Each year, many businesses are faced with restructuring, mergers, downsizing, contract disputes and other factors affecting relationships between management and employees. BFL&S learned of a situation that began to unfold on Feb. 5 in Girard, Kan., when 39 bargaining-unit employees (production workers and press operators) were locked out of Forms Manufacturing Inc. (FMI) during a union contract dispute. More than four months later, a new contract has been ratified, but not before lawsuits, appeals and the loss of union label work during that period.
The last contract had expired in April 2005. FMI and Global Communications Conference/International Brotherhood of Teamsters (GCC/IBT) Local 235-M met to negotiate a new contract in late April 2005. The contract had remained essentially unchanged for several years, but now the company was proposing to cut wages 20 percent to 25 percent, and increase contributions for health insurance for single coverage from 80 percent company/20 percent employee to 65 percent company/35 percent employee.
Journalist Matthew Clark of the Morris News Service provided continuing coverage of the story for the Morning Sun Newspaper from Feb. 7 to June 10 (available at www.morningsun.net). There were no reports of picketing or unauthorized workers being admitted, nor were there any other visual signs of the situation occuring at the plant. A summary of Clark’s detailed accounts follows, along with information BFL&S obtained from interviews with John Sneed, Secretary-Treasurer of FMI, and former FMI owner and president Jim Orwig. Jim Miller, GCC/IBT Local 235-M president, was unavailable for additional comment.
The Heat is On
Clark reported that both parties met again in Jan. 2006 and on Feb. 2, and representatives of FMI’s parent company, Houston-based Sovereign Business Forms, requested a union response to the entire company proposal.
On Saturday, Feb. 4, Sneed sent a letter notifying the union of FMI’s intentions. “I am writing to advise you of FMI’s decision to institute a lockout of bargain-unit employees effective 6 a.m. Feb. 5, 2006, in support of our lawful bargaining proposal,” Sneed stated in the letter to Miller. “From the onset of these negotiations, we have emphasized the need for substantial contract cost reductions to make FMI more competitive and to bring FMI’s labor costs in line with FMI’s sister corporations...” Initially, the union asked if the company was having financial trouble, but Miller said FMI was in no hurry to provide the requested information regarding its financial situation.
Approximately 39 employees discovered the company had, indeed, locked them out when they reported for work that Sunday morning.
The major concern was the locked-out employees would not be covered under FMI’s insurance plan. “Since the company locked us out in February,” said Miller, “we have the question as to whether we will have insurance immediately when we return to work or whether there will be a probationary period.”
The union filed unfair labor practice charges against FMI with the National Labor Relations Board (NLRB) in Overland Park, Kan., over the use of vacation pay by locked-out employees. In an April 13 press release, the union expressed its displeasure over the NLRB’s decision to overrule charges of unfair labor practices. “Throughout the years, the influence of big business in politics has caused an alarming erosion of workers’ rights by weakening the enforcement of labor laws, and so, the union was not surprised to learn their charges were not sustained at the regional level,” Miller is quoted as saying in the release.
However, the workers were granted unemployment benefits from the state of Kansas. FMI appealed, but the Kansas
Department of Labor upheld its decision. The court acknowledged in its opinion that “the employer acted unilaterally in locking the claimants out without the benefit of either the receipt of a final offer or a declaration that an impasse existed. Under the facts of this case, the claimants are unemployed through no fault of their own.”
Attorneys representing FMI at the hearing stated the law prevents workers involved in a labor dispute from collecting unemployment benefits, and employees can return to work as soon as they agree to a contract.
Miller said the basic argument for benefits was the employees were not in the middle of a labor dispute, thus they should collect their benefits. “It is not a labor dispute ... we were locked out,” he explained. “When you are laid off under no fault of your own, then you can collect unemployment benefits.”
Another point of contention was the last wage proposal still reflected a 13 percent to 15 percent reduction across the board with no increase for two years. “There are only three out of the 39 employees that have not reached five years [of employment],” Miller commented. “The average is 17 years. This is a long-term plant and they want to compress the wages.” He went on to say he remained hopeful. “I have never had a strike and that is not the process of labor unions anymore,” said Miller. “I believe the company and the union are partners.”
Finally, on May 19, FMI presented the union with what it called its “best and final offer” to resolve the dispute with the union.
This included an offer to restore health-insurance benefits. Employees were now being asked to pay 20 percent—the amount they paid prior to the lockout. (For dependent and family benefits, the company proposed a 47 percent employer/53 percent employee
ratio for insurance premiums. Now, FMI had proposed a 50/50 split for premiums.)
Part of FMI’s final offer also included a reduction in the employee wage decrease from a weighted average of 13.8 percent to an average 11.8 percent. “It is still a decrease. However, it is not across the board,” Miller said. “Some will suffer a 7 percent decrease and others may have a 30 percent decrease. We don’t necessarily think that is correct, but we are obligated to take it to our members,” he continued.
On June 9, after a nearly year-long dispute, the union and FMI reached a tentative agreement and the 36 bargaining-unit employees returned to work on June 18.
“FMI is pleased to have reached a mutually beneficial end to this labor dispute,” said Sneed. “Throughout this process, FMI has worked hard to maintain the utmost standards of fairness. We are glad that the lockout can now conclude and our employees can return to work. We look forward to returning to peak production levels, and we will continue to provide our customers with excellent service.”
- Companies:
- FMI-Forms Manufacturers