In general, a “wage reopener” is a way for parties to a collective bargaining agreement to agree to “delay” their bargain over wages in future years before the contract’s expiration. Contractors that are faced with economic uncertainty or unreasonable economic demands frequently turn to “wage reopeners” as a way to “get a deal done” and kick the wage discussions down the road during the later years of the contract.
Why Wage Reopeners
As noted above, “wage reopeners” are helpful during times of economic uncertainty or for long-term contracts where parties are unable or unwilling to agree to certain wage rates in the future. For example, a “wage reopener” may help the parties reach a deal on a five-year contract with “wage reopeners” in years three, four, and five to set wages consistent with the market.
What to Know Before Negotiating a Wage Reopener
While there are benefits to negotiating a “wage reopener,” contractors also need to understand that they will have a statutory duty to bargain. That is, the contractor cannot implement any wage changes until it has reached “impasse” over the issue. While the contractor is not obligated to bargain over other terms in the contract, a poorly drafted “wage reopener” clause or the failure of a contractor to object to the union’s attempt to bargain over other contract terms may trigger an obligation to bargain beyond wages.
What’s more, unless there is a no-strike clause in the contract that specifically extends to reopener discussions, the union is generally allowed to strike over the reopened terms. Thus, while the contractor may have avoided a strike at expiration, it could end up with a work stoppage during the term of the contract.
Best Practices for “Wage Reopeners”
Contractors should consider adopting wage reopeners only if they make clear that the no-strike clause remains in effect during the reopener period. This, of course, greatly reduces the union’s leverage in obtaining better economic terms. But, without this clarity, a union can treat each reopener like any other open contract period and, if their demands are not met, go on strike.
To ensure that the no-strike clause is extended, consider adding the following language to any “wage reopener” clause:
On [Date or Dates], this Agreement shall be reopened for purposes of negotiations over wages (Article ___) only. Upon the reopener, all other provisions and all other articles of this Agreement shall remain in full force and effect.
As you can see, a well-drafted “wage reopener” can be helpful in situations when reaching a deal is difficult. At the same time, though, “wage reopeners” present numerous traps for unwary contractors. Thus, if you are considering such a clause, make sure that you ensure that all provisions of the contract remain in effect – including, of course, the union’s no-strike promise.