Contract Negotiation Process with Labor Unions

Contract Negotiation Process Negotiating a contract requires identifying the subjects
to be addressed by the agreement. Then, each party prepares its preferred position on each
subject. Then the process of comparing those positions begins. Often, dollars are attached
to contract subjects. For example, the length of the work shift, the amount of overtime to
be paid, and the cost of health care benefits all can be represented by dollar values. If
the union wants greater benefits for its members, a dollar value can be assigned to that
increase. Employers argue budget restraint and use dollar values to justify their reasoning.
According to the Negotiation Board, there are eight steps in the negotiation process.
Here is a list of the process step flow in contract negotiations:

• Step 1, Prepare Do your research ahead of time so that you know your opponent
and you know what you want from the negotiation.
• Step 2, Open Let the other side know what you want and let them tell you
what they want.
• Step 3, Argue Back up your case with evidence and uncover defects in your
opponent’s argument.
• Step 4, Explore Search for common ground and agreeable outcomes.
• Step 5, Signal Show that you are ready to reach an agreement.
• Step 6, Package Put together different acceptable options for both parties.
• Step 7, Close Come to an agreement and finalize the negotiation.
• Step 8, Sustain Ensure that their side, and yours, follow through with the
negotiated agreement.

HR’s Role in Contract Negotiations In large organizations, a segment of the HR
department will be responsible for labor relations. That responsibility would include
duties associated with contract negotiations. In smaller organizations, the HR manager
may be the only person in the HR department. Then, that manager is responsible for
contract negotiations. Often, there is direct support from the legal department or
external legal counsel.

Each component of a contract agreement can be assigned a cost in dollars. Adding
all of those component costs can produce the total contract value. For example, health
benefits will cost several hundred dollars each month to cover an employee and
family members. The employer can agree to cover a percentage of that cost, with the balance
being paid by the employee. A union will ask for more employer contributions to that
formula. And, should the employer agree, the increased contribution can be assigned an
incremental cost increase value. Adding that to other cost increases, such as increased
pay schedules and overtime rates, will produce a total increase in contract costs. Each
time a new proposal is made or received, a cost analysis should be made to determine the
budgetary impact. Some costs will be perpetual, such as an increase in pay rates. Other
costs can be limited to one time only, such as special bonus payments. There are
advantages and disadvantages to costs that will be contained to one period of time (year)
versus continuing into future periods of time. Assembling this data is usually the responsibility
of the HR manager.

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Sharam Kohan
Sharam Kohan

Sharam Kohan: Biography

Sharam Kohan is a seasoned professional with an extensive background in law, human relations, and organizational leadership. Currently a degree candidate for an LLM at UC Berkeley Law, Sharam brings a unique blend of legal education, hands-on experience, and a deep commitment to social justice and human rights.

With a career that spans diverse sectors, Sharam's expertise extends far beyond the classroom. He has served as a Human Relations Commissioner, contributing his leadership to Alameda County’s Human Relations Commission, where he worked on initiatives to improve community relations and promote equity. His dedication to social change is also evident in his philanthropic efforts as a donor to organizations like FACES SF, which provides vital resources and support to the Bay Area’s underserved communities.

An advocate for labor and employment rights, Sharam holds a specialization in Employment Law from Temple University School of Law, which has furthered his ability to navigate complex legal frameworks. His professional journey includes leadership roles across human resources and operations, where he has honed his ability to manage teams, shape organizational culture, and implement effective strategies that drive success. He also holds SHRM certification, further solidifying his expertise in human resources management.

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Though not a traditional legal scholar, Sharam’s interdisciplinary approach to understanding law and society has made him a sought-after commentator on topics ranging from legal theory to organizational dynamics. His writing can be found on various platforms, including his blog at Harvard, where he shares insights on law, politics, and social issues.

Sharam Kohan is a dynamic and forward-thinking professional with the knowledge, experience, and passion to contribute meaningfully to the legal, social, and business landscapes.

For more on Sharam Kohan’s work, visit his blog at archive.blogs.harvard.edu/kohan and his author pages on Amazon, including Judgment, a Priori Itself and Sartre's Conception of Freedom.

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