Legal Definitions - labor agreement

A labor agreement, also known as a collective-bargaining agreement, is a formal, written contract negotiated between an employer (or a group of employers) and a labor union representing a group of employees.

This legally binding document outlines the specific terms and conditions of employment for the workers covered by the union. These terms typically include details regarding wages, hours of work, benefits (such as health insurance, retirement plans, and paid time off), workplace safety rules, grievance procedures (how disputes are resolved), job security provisions, and other aspects of the employment relationship. The agreement is the outcome of a process called collective bargaining, where representatives from both the employer and the union negotiate to reach mutually acceptable terms.

Here are some examples illustrating a labor agreement:

• Example 1: Manufacturing Plant

  A large automobile manufacturing plant and the union representing its assembly line workers finalize a new three-year labor agreement. This agreement specifies an hourly wage increase for each year, outlines the company's contribution to employee health insurance and pension plans, details the procedure for shift assignments and overtime pay, and establishes a clear process for employees to file grievances if they believe the company has violated the contract. This illustrates a labor agreement because it is a formal contract between a company and a union that sets out the specific terms of employment for the unionized workforce, covering wages, benefits, and dispute resolution.

• Example 2: Public School District

  After several months of negotiations, a metropolitan school district and its teachers' union reach a labor agreement. The agreement includes a new salary schedule for teachers based on experience and education, limits on class sizes for different grade levels, provisions for professional development days, and a detailed process for teacher evaluations and disciplinary actions. It also defines the school calendar, including holidays and in-service days. This demonstrates a labor agreement as it's a negotiated contract between a public employer (the school district) and a union (the teachers' union) that governs the working conditions, compensation, and professional responsibilities of the teachers.

• Example 3: Airline Industry

  A major airline and the union representing its pilots sign a new labor agreement. This contract details pilot salaries, flight hour limits, rest periods between flights, vacation accrual, and the company's contributions to the pilots' 401(k) plans. It also includes clauses regarding seniority rights for route selection and procedures for handling pilot fatigue or medical leave. This is an example of a labor agreement because it is a comprehensive contract between an airline company and the union representing its pilots, establishing the specific terms and conditions of their highly specialized employment, from pay to work-life balance.