Don Allen Case

Preliminary contract negotiation

between consultant for a GM Dealership
and Teamster representative
You first met Richard Allen, your prospective client, at a local restaurant this February 11.
During the course of conversation, you told Richard that you were a business consultant with past
experience in negotiating, and that you were presently focusing on work-process reengineering
as a constructive forum for management and labor interactions. Richard then revealed that he
and his brother owned Don Allen, Inc., a large car dealership in town. He also told you that his
company's four-year contract with its Teamster work force was due to expire May 31. He
expressed concern about the current union contract, saying that it included too many holidays,
too many sick days, and had high pay rates. He also said that his work force's performance was
not what it should be. He expressed a need to change the pay structure so that it paid
progressively higher rates based upon additional training and skills certification. Ultimately,
Richard saw the current union contract as inhibiting his ability to run his business efficiently and
profitably. Before leaving the restaurant, Richard asked you help him negotiate a better contract
with the Teamsters.
Your next meeting with Richard was on March 29. You arranged to meet with Richard, his
brother David, and their new General Manager Greg to investigate their business concerns and
issues. You also took the opportunity to describe your win-win approach to reengineering and
solving business issues, and to find out which Teamster official was currently representing Don
Allen's employees.
On April 14, you and the two brothers met with Brad McDonald, the owner of another local car
dealership. Brad had just gone through a tough contract negotiation with Charles Byrnes, the
same Teamster official who represents your client's employees. Brad described the negotiation
experience as "horrible." He ended up agreeing to a 15% wage increase over four years.
Five days later, you phoned Mr. Byrnes to introduce yourself. You told him about your credentials
and referred him to other labor union representatives with whom you had worked with in the past.
You set up a meeting with him for May 1 to discuss your meetings with the owners, the fact that
the contract was expiring, and your thoughts on this matter. You also got Mr. Byrnes to agree to
fax you a copy of his proposed changes to the current labor contract with Don Allen, Inc.
Your objective for the meeting. As a management consultant, you want Mr. Byrnes to agree to
whatever is in the best interest of your client.

Management Consultants Meeting Notes

Notes on the meeting between the consultant

and the owners of Don Allen, Inc.
prior to the consultants meeting with Teamster representative

March 29

-Desired Results in Contract

The payrolls for detail employees brought in line with market rates.
(est. $7.00 now $8.92)
Rates for jockeys, new car receivers, lot attendants adjusted to market.
Revise pay severance for parts counterman based on individual performance.
Vacation time brought in line with market.
Holidays and sick days brought in line with market.
Technician pay rates established based on ability, certifications, & quality.
90 day probation for hospitalization and union sign up.
Remove Section 3.7.
Rewrite Section 6.1.
Change: over a reasonable length of time to a specific timetable.
Delete Section 7.4--very vague.
Section 7.6-- 20 cents difference in shift.
Delete --Birthday and personal.
Rewrite Section 9.1-- (how employees earn vacation) etc.
Split vacation time.
Section 9.7-- not deserving of accumulated vacation if employee is off.

CONTRACT PROPOSALS
Changes proposed by the local Teamsters Union
to its current contract with Don Allen, Inc.
AGREEMENT

Change: Don Allen Company to read: Don Allen, Inc.

ARTICLE II SUCCESSORS AND ASSIGNS

2.1 Change to read:

This agreement shall be binding upon the parties hereto and their successors. The
employer shall give notice of the existence of this agreement and require the assumption
thereof, as a condition of any transaction involving the sale, transfer, lease, etc., of the
employer's business. In the event employer fails to give the notice and/or require
assumption of this agreement to a successor, purchaser, transferee, lessee, etc., the
employer shall be liable to the local union and to the employees covered by this
agreement for all damages sustained as a result of such failure. Such notices shall be in
writing with a copy to the local union
ARTICLE V CLASSIFICATIONS AND WAGE RATES

See appendix A
ARTICLE VII ADDITIONAL WAGE AND HOUR REGULATIONS

7.1 Change regular to guaranteed

Second paragraph, first sentence--change to read: 8 hours in any workday
ARTICLE VIII HOLIDAY COMPENSATION

8.1 Delete: Anniversary will be eliminated as a holiday and a holiday designated as a

personal day shall be added.
Last sentence--change to read: To be entitled to the personal day, an employee must have
completed their probationary period.
ARTICLE IX VACATIONS

9.1 The union wishes to discuss the section.

9.8 Delete last sentence.

ARTICLE X SENIORITY

10.2 Delete second sentence, rewrite to read: A regular employee shall be given a
seniority date based on his/her most recent date of hire by the employer and such
seniority shall accumulated thereafter.
10.3 Change: not in excess of one year to equal to the term of such election or
appointment.
10.5 Add: Employees who are absent due to an on the job illness or injury shall not lose
seniority.
ARTICLE XI UNION ACTIVITIES

11.1 Change: deduction to loss of pay

ARTICLE XII GRIEVANCE PROCEDURE

12.5 Last sentence, change to read: they do not cause undue interference with normal
working conditions.
ARTICLE XIII GENERAL PROVISIONS

13.6 Add to end: The provisions of this section shall not apply to employee(s) on layoff.
ARTICLE XVI HEALTH AND WELFARE

The union wishes to discuss this section at length.

ARTICLE XVII PENSION

The union wishes to discuss this section at length.

ARTICLE XVIII SEPARABILITY

New 18.2 It is specifically understood and agreed that the parties will immediately enter
into negotiations to replace any provision of this agreement deemed invalid or
unenforceable. Should they fail to reach mutually satisfactory replacement language
4

within 30 calendar days after the beginning of discussions, either party shall be free to
take whatever economic actions deemed necessary, all articles to the contrary
notwithstanding.
APPENDIX A

Delete: new hire rates.

The union wishes to discuss this section at length.
WORK OUT OF NORMAL JOB DUTIES

Employees requested to perform jockey work or any other duties outside the scope of
their normal employment shall receive their applicable hourly rate for such work.

SCHOOL RATES

Employees assigned, required, or requested to attend any school will receive pay equal to
one fifth (1/5) of their average weekly pay, with a minimum of one hundred dollars
($100) per day, for each day so assigned, required or requested.
INTERNAL RATES

Pay for all internal work shall be increased by three dollars ($3.00) per hour.
TEAR DOWN WORK

When an employee is required to tear down a job in and is unable to complete the repairs
due to a lack of parts, he shall be paid his applicable hourly rate for such work. The
completion of the job will then be paid at the flat rate.
OUT-OF-TOWN TRAVEL

Employees assigned, required, or requested to travel out-of-town on company business

shall be supplied reliable transportation and reimbursed for all expenses while on such
business.

TECHNICAL INFORMATION

The Company shall supply all updated technical information and recall programs to the
applicable service employees upon receipt thereof.
TOOLS AND EQUIPMENT

6.1 Don Allen, Inc. agrees to provide, in ample numbers, all tools required by statutes,
necessary for its employees to perform inspections, and/or specialty tools and equipment.
The tools and equipment will be kept in a tool room staffed by an individual who will be
responsible for distribution of said tools.
HOLIDAYS APPENDIX A (1) (C)
Flat rate employees shall receive pay for jury duty, funeral leave, sick days, and training
days at the rate of one-fifth (1/5) of the employees average weekly wage, with a
minimum payment of one hundred dollars ($100) per day for each such day.
Add: 3 personal days and the day after Thanksgiving.
GUARANTEE

Guarantee for all flat rate employees shall be increased in accord with the schedule
below.
Effective:

06/01/95
$500.00 wk

06/01/96
$540.00 wk

06/01/97
$580.00 wk

VACATION

Add: 5 weeks for 25 or more years of service.

LIFE INSURANCE

Increased to $20,000.00 on the employee.

Add: $10,000.00 on dependents.
PAYROLL DEDUCTIONS

Include language permitting payroll deductions of a 401(k) plan and Credit Union.

WAGES

Increase all current hourly rates by $1.25 per hour in each year of the contract.
WARRANTY RATE

Effective:

06/01/95
$15.00

06/01/96
$16.25

USED CAR BODY MAN

Include in the commission payment all material.

NEW

Include language on FMLA, ADA, and leave of absence.

extend employee discounts to retirees.

06/01/97
$17.50