A collective bargaining agreement (CBA) is a labor contract between an employer and a group of employees with the intention of negotiating salaries, working conditions, benefits and other employee rights. The National Labor Relations Act (NLRA) was passed in 1935, providing individuals the right to organize into trade unions and engage in collective bargaining negotiations.
Most collective bargaining agreements apply to a specific period and are renegotiated upon completion of the contract. This usually takes place every four to five years.
During the life of the contract, employees represented by the collective bargaining agreements often agree not to go on strike. If an employee has an issue with their employer, they must follow the protocol for filling a grievance as outlined in the CBA.
There are numerous benefits for members protected under a collective bargaining agreement including better wages, time-off, seniority, hours and benefits. Companies often must agree to pre-determined rates and plan changes, preventing unforeseen costs to members of the union.
Employees protected under labor contracts enjoy better working conditions and higher wages. They have improved benefit packages including better pension and 401K plans. Research has also found that there is less of a wage gap between male and female employees represented by a union.
Employers aren’t permitted to interfere in the formation of labor unions. An individual may not be discriminated against as a result of his/her association with a union. Furthermore, the NLRA also protects employers from discriminating against employees who file a grievance.
All collective bargaining agreements are different depending on the goals of the employer and employees involved. Often, these agreements stipulate training and education plans resulting in better opportunities and wages for those employees protected under the CBA. Should the employer need to temporarily reduce the work force, employees with seniority are usually given special priority as outlined in the contract. Employee rights, including workplace safety and conditions, are also negotiated and delineated during the collective bargaining period.