Impact of absence of management rights clause

Arbitrator Stuart Levinson has issued an Award discussing the impact of the absence of a management rights clause in a labor agreement. Laborer’s Local 113 grieved the actions of Forest Home Cemetery in subcontracting certain work, transferring work to non unit employees, and having the Cemetery superintendent perform work of the type performed by unit employees. The contract was silent on the issue of subcontracting and did not contain a management rights provision.

In its defense, the Cemetery relied in part on its “inherent right” to manage the workforce. In addressing this contention, Arbitrator Levinson observed:

 As the employer asserts, most arbitrators hold that employers have primary rights, and

may act unfettered except as by law or agreement. In our capitalist economy, after all, it is capital, exercised through ownership and management, subject to government regulation as appropriate, which creates, maintains and directs the private sector enterprise.

However, I take arbitral notice that it is now standard for a labor agreement to have a

management rights clause, and highly unusual when it doesn’t. Such provisions “appear to be widely favored by management,” and have been found in 60%-80% of labor agreements in various surveys. How Arbitration Works, 6th edition, Ruben, ed., (BNA Books, Washington D.C. 2003), p. 660. That is, the collective judgment of employers is to have a management rights clause, which means such a clause has value to management. Its absence must therefore mean a loss of value to management. Also, since most collective bargaining agreements include a management rights clause, the general understanding of the reserved rights of management is based on contracts which do include them. The lack of a management rights clause in the labor agreement here under review weakens the employer’s claim of inherent authority, and will prove significant when considering the relevance and importance of prior cases which do involve such a provision.[Footnote omitted]

Notwithstanding what he viewed as the employer’s “limited inherent power” the arbitrator denied the Union’s grievance concerning the superintendent’s claimed performance of unit work and the subcontracting of unit work, finding that the Union had failed top meet its burden of proof. However he sustained the grievance concerning the transfer of work to non unit employees.