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Week 9 Case Study: No-Layoff Guarantees

In order to maintain civil relationships with unions, some companies (or local governments in the case of the public sector) provide a no-layoff guarantee as part of a labor union contract. This was the case of the Minnesota Newspaper Guild and Pioneer Press in 2011.

In recent years, the newspaper industry has faced decreased readership, forcing many newspapers across the country to make significant cuts to their staff size. However, some organizations have made deals with local unions to try and stabilize employee turnover. In February of 2009, the Guild and Pioneer Press reached an agreement that guaranteed no layoffs until July 31, 2011. In exchange, the full-time workweek for those union members was cut from 40 hours per week to 37.5 hours per week, and weekly pay was decreased proportionately. In January of 2011, members of the Guild voted and passed a six-month contract extension that continued to guarantee no layoffs and the shorter workweek.

Similar agreements have been reached between other organizations and their labor unions. For example, Chicago’s government has agreed to provide five year no-layoff guarantees to members of CTA construction and maintenance unions. In exchange for this job protection, some union members will face less overtime pay and fewer healthcare options.

Optional Further Reading

Course discussions will take place in your blackboard learning environment. Once you have reviewed the questions below, close this browser tab to return to your blackboard course and click the Discussion links located at the bottom of this week’s content to participate.

Question #1

From the case study, formulate an argument against no-layoff guarantees from the perspective of a union member who is critical of the agreement. Anticipate the main objections such an individual might raise, and provide corresponding justification for those objections.

Question #1B

With the case study in mind, consider the key reasons why an employer might be motivated to engage in a no-layoff guarantee with labor unions. Based on these reasons, determine whether or not you would engage in a no-layoff guarantee if you were an employer. Provide a rationale to support your decision.



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