Monday, July 13, 2020

Check The Fine Print

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Check The Fine Print

As the saying goes, an oral agreement is as good as the paper it’s written on. However, once it’s in writing, it might as well be written in stone. Such is the case with labor contracts. Management can promise one thing and workers can promise another, but unless those promises are clearly stated in a labor contract, it’s probably not enforceable.

In an article on The Society For Human Resources website titled, “Labor Negotiators Must Pay Attention To Details,” they revealed an issue that came back to haunt a company. There was a proposed change from a pension account to a 401(k) where the company would pay a certain amount per hour worked up to a cap. During the negotiations, the cap was somehow left off. When a representative for the workers asked how the new plan for retirement contributions would be handled, the verbal reply was that it would work like it had always worked in the past. Smartly, for the workers, the representative did not bring up the cap.

When all was said and done, a contract was signed with the new retirement contribution amount in place. It’s unknown how much back-and-forth took place during negotiations, but typically these can take months with many meetings and lots of offers and counteroffers. Details of a labor contract, no matter how small, can make a huge impact, which is why it’s crucial to review everything with a fine-tooth comb. Often, when you’ve scanned a document dozens of times, you tend to gloss over key points and might miss something even when a change has been highlighted.

Once the company realized that the payment cap wasn’t in place, they tried to have the contract voided. Naturally, the workers appealed. Consider the headache facing the company. They have paid people to negotiate and write the labor contract. Now, they will have to pay even more to have one single item settled in court. Even if the company prevails and gets the cap reinstated, they may lose in terms of employee morale.

In the end, the company lost and the contract was validated. The lesson here is that labor negotiators, no matter whether they’re on the side of management or labor, need to pay close attention to every single minute aspect of a contract in order to avoid, or at least lessen, any future problems.

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