Wages and Salary Case Study

For at least 21 years, the company has paid double the striaght-time pay rate for work after 50 years in any given workweek to all plan employee’s. Whether they worked a five-day, eight hour schedule or a four-day, ten-hour schedule ( “4/10 employees”). The collective bargaining agreement (CBA) provided for such payment after 50 hours to the 4/10 employee’s but not the 5/8 employee’s. The employer, in December 2000, put the union and all hourly personnel on notice that effective January 1, 2001, overtime would be paid in accordance with the CBA; that is, the practice of praying double time after 50 hours to 5/8 employee’s would cease. The union objected and brought this grievance. The union argued that the practice of praying 5/8 employee’s double time for hours worked over 50 hours in one workweek has been in effect for over 20 years. The current CBA has a provision that protects employee’s from any deduction in pay. It says, “No employees shall suffer a deduction in wage rates or working conditions as a result of this agreement”. Allowing the company to change its overtime pay policies while this CBA is in effect violates that term. Furthermore, there have been some five CBAs negotiated since that practice has been in effect, and the company has never sought to negotiate or clarify the practice of how it pays overtime or the CBA provision regarding no reduction. Finally, the union pointed out that the length of time the practice was in place would certainly qualify it as a “past practice” that the company could not change unilaterally. The company contended that the payment of overtime at double the straight-time rate for 5/8 employees is in direct conflict with the language of the CBA. An employer may abandon past practice that is in direct conflict with the clear language of the CBA. Also, the general CBA provision regarding “No reduction in pay” cannot be interpreted as controlling the specific over-time provision of the CBA. Question 1. What do you think would be the fair way to resolve this case? Question 2. Should the company be required to pay the 5/8 employees double time even though that benefit has never been negotiated, and so, arguably the company has never received any exchange for this benefit? Or, should those employees who have in good faith accepted over time work believing they would be paid double time, even though their contract did not say they would, have to give up this benefit and get nothing in return? Question 3. Should the company have waited to bring up this issue when the CBA was being negotiated? Does it change your answer to know that the CBA was not to be renegotiated for three years? Question 4. The parties did not know why the company began paying double time to the 5/8 employees. If the practice began as an error on the part of a payroll clerk, would that fact change your opinion as to how to decide this case? Question 5. Explain why you agree or disagree with the court’s ruling that it did not commit an unfair labor practice by requiring unit drivers to continue to perform dispatch and telephone duties after managers were hired at the suburban center locations. Question 6. Explain why you agree or disagree with the court’s ruling that the employer need not pay new drivers performing the same tasks as other drivers, plus dispatch and telephone duties, the extra $1.00 an hour, and that failing to do so was not an unfair labor practice.


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