As contractors enter or prepare for collective bargaining negotiations, several recurring legal and strategic issues warrant clarification. These include contractor authority over economic allocations, communications with the workforce during bargaining, and the importance of securing the “right of assignment” in labor agreements. This brief addresses these topics with guidance grounded in collective bargaining law and practical experience from ongoing contract negotiations.

1. Authority to Propose and Influence Allocation of Economic Increases

Contractors have the right to propose how total economic packages are allocated across wages, pensions, health benefits, and other funds, even where language is silent on allocation discretion. Contractors may present proposals that specify intended allocations (e.g., “$1.50 of the proposed increase shall go directly to wages”), especially when allocation decisions directly impact competitiveness, workforce retention, or fund sustainability.

Where contributions are proposed to non-mandatory funds (such as industry promotion funds), contractors have no legal obligation to continue contributions and may withhold or reallocate that funding if not mutually agreed upon. These positions can also serve as bargaining leverage if the union seeks dues check-off or other contractual concessions.

2. Communications with Union Members During Negotiations

Contractors are legally permitted to communicate any bargaining proposal they have made to the union directly to employees. This includes communicating proposals regarding wage increases and fund allocations. There is no violation of the National Labor Relations Act (NLRA) if contractors are not bargaining directly with employees or attempting to bypass the union.

However, strategic caution is advised. While lawful, such communications may escalate tensions with union leadership. To mitigate conflict, contractors may consider informing the union prior to employee communications and offering to share draft notices, thereby enhancing transparency and minimizing allegations of undermining union authority.

Ongoing communication, outside of bargaining cycles, is also recommended. Regularly informing employees of their total compensation (often called a “Total Rewards Statement”) helps reinforce the value of benefits received and lays the groundwork for future economic discussions.

3. Work Assignment and the Risk of Double Liability

A critical yet underutilized contractual provision is the Right of Assignment language that ensures a contractor’s ability to assign specific scopes of work to the union of their choice, which is particularly important when a contractor is signatory to multiple CBAs. Without this right, contractors face jurisdictional disputes that could result in double payment of benefits for the same work.

This issue becomes acute when overlapping jurisdiction exists between multiple trades (e.g., painters vs. carpenters for scaffolding or finish work). Without assignment protections, a grievance from the non-assigned union can result in penalties even when work was performed by union labor.

To mitigate this risk, contractors should ensure the CBA includes clear Right of Assignment language. Work with your local association or contact FCA International if you would like assistance with this language.

In addition to this language, contractors should:

  • Incorporate participation in the Plan for the Settlement of Jurisdictional Disputes in the Construction Industry where possible. Verify that all relevant unions are signatory to the Plan to ensure it applies.
  • Utilize project labor agreements that reference established jurisdictional dispute resolution frameworks.

4. Proactive Bargaining Language for Fund Variances

Contractors may propose language to protect against unanticipated increases in fund contributions mid-contract. For example:

“In the event any trust fund requires contributions in excess of the negotiated allocation, such additional contributions shall be deducted from the wage portion of the total economic package, without reopening the agreement.”

This provision helps ensure contractors are not forced to increase overall labor costs beyond the agreed economic terms and maintains budget predictability.

Bottom Line

Contractors must assert their legal rights and exercise strategic foresight when entering negotiations. From having a voice in economic allocations to protecting themselves from costly jurisdictional disputes, clarity in contract language and consistent employee communications can strengthen both bargaining position and long-term labor relations. If you are preparing for bargaining or reviewing your agreement for vulnerabilities, we recommend a thorough review of your existing CBA provisions concerning allocation rights and work assignment authority.

For questions or legal consultation regarding your labor agreement, please contact FCA International.