Why no impasse in Minnesota?

One of the continuing mysteries of the Minnesota Orchestra dispute (for me, at least) was why the management chose to lock out its musicians rather than declare impasse and impose its proposal. Drew McManus believes he has an explanation:

On the surface, the MOA executive committee’s public angst over the lack of a musician offer may seem like a perfectly straightforward and reasonable point. If both parties were bargaining in good faith and beyond reproach, that would likely be an accurate assessment.

But as we learned in yesterday’s post, a formal counterproposal isn’t a firm requirement to make genuine negotiation headway. Consequently, the distress over the presence of a counterproposal may appear to some as puzzling and the latest Campbell and Davis article pushes it firmly into the lady doth protest too much, methinks territory.

Here’s the reason why: once the musicians submit a formal proposal, the MOA executive committee acquires a very clear prerequisite for declaring an impasse.

Impasse is when two parties engaged in negotiations reach a point where further discussion would be futile. If impasse is reached, then the employer is in a position to lawfully implement the most recent pre-impasse proposal.

And in light of just how astonishing the MOA’s pre-impasse proposal actually is (details), having that on deck and unaltered throughout the course of bargaining provides an ultimate power in the universe eschelon of leverage.

Once impasse is declared and the pre-impasse proposal imposed, the employees are placed in a position to accept the terms or refuse to work, thereby altering the existing work stoppage from a lockout to a strike.

And once the employees are on strike, it all but guarantees a loss of unemployment benefits and an acute acceleration of the economic distress leverage traditionally favored by employers in an orchestral labor dispute.

This is a plausible explanation (and Drew might have information from the inside that I don’t), but I don’t think it’s the most likely one. But some discussion of the concept of “impasse” is in order before I explain why.

The concept of impasse in US labor law has been called “the ‘pornography’ of collective bargaining,” because, as Supreme Court Justice Potter Stewart once said about pornography, it’s very hard to define in legal terms but “I know it when I see it.” The NLRB and the courts have wrestled repeatedly with defining impasse, and have, in practical terms at least, ended up resorting to Justice Stewart’s logic, thereby creating a slippery and hazardous legal landscape for both union and employer when the issue comes up.

Drew is broadly correct in his definition of “impasse.” The problem for employers doing so is that an unfair labor practice charge from the union is virtually guaranteed to follow within 24 hours or so. And the consequences to an employer of the NLRB finding the employer guilty are potentially financially significant. So employers are careful about declaring impasse, given how ad hoc the definition can appear to be.

If, however, an employer does declare impasse, the union can respond in several ways. The most common is simply to strike; after all, the negotiations would not be at impasse if the union could live with management’s most recent proposal. The union can also fold its hand and accept the offer, although I’ve never heard of that happening in the orchestra world.

The most interesting choice, though is that the union can choose to return to work on management’s terms without actually accepting them. The employer remains obligated to bargain with the union, and the union can choose to strike later on. In certain situations, an employer can find this very unappealing, and choose not to implement accordingly.

This is an option I became very familiar with in 1994, as that’s exactly what happened in my orchestra. Management imposed their final offer in January, we had a weekend-long strike (announcing beforehand that we would return to work the following week), management chose not to lock us out, and negotiations continued until a settlement was reached in March that was substantively different from management’s implemented proposal.

Part of my skepticism about Drew’s argument that the lack of a union counter-proposal means the employer can’t declare impasse is that, if avoiding impasse was really this easy, unions would never make counter-proposals, or even initial proposals. I found some backing for this view on this management-side labor law blog, where one of the criteria expressly cited as support for an employer’s claim of impasse was:

…union’s rejection of proposals without presentation of counteroffer or requesting more time to negotiate.

That’s not to say that MO management would have a solid case to claim impasse; as I indicated before, it’s a very slippery term when the NLRB actually has to define it in a given situation. But it looks to me like they didn’t try very hard to get to a point where they could make a solid case.

So the question remains: why not? One hint was suggested by a point Drew made in passing; that the musicians wouldn’t be entitled to unemployment benefits if they were on strike. In lots of states, locked-out workers aren’t entitled to unemployment benefits either, but, to my surprise, Minnesota isn’t one of them. So there is an economic benefit to the musicians to being locked-out rather than on strike, as well as a PR benefit, which I hadn’t considered.

Intuitively, it would seem that a benefit for the musicians is bad for management, as loss of that benefit would be, as Drew wrote, “an acute acceleration of the economic distress leverage traditionally favored by employers in an orchestral labor dispute.” But I wonder if, in this highly unusual situation, this is really (as they say in the tech world) a feature and not a bug for MO management.

This may well be too many bank shots to be truly plausible, but hear me out. Remember that the orchestra is out of Orchestra Hall for the entire season, and that ticket sales in the replacement venue were not going at all well. Is it possible that management really doesn’t mind the musicians having the economic wherewithal to sustain a season-long strike?

The fact that management scheduled the hall renovation for the season immediately following the expiration of their collective bargaining agreement has always struck me as suspicious. I wonder if they were looking at a significant deficit for this season even if the musicians worked under management’s proposal. That would certainly explain management’s decision to lock the musicians out rather than implement and take the chance that the musicians might actually choose the option of working temporarily under management’s proposal while continuing to hold the option to strike at a time of their choosing. The fact that the musicians would retain the right to strike at a time of their choosing would certainly be an added reason for management to lock them out and conduct the work stoppage on their timetable and not the musicians’.

At some point, this kind of speculation is little more than a parlor game, of course. But there are lessons to be learned from extreme cases like this. I’m coming to believe more and more that one of those lessons is about the downsides for musicians of multi-year labor agreements.