Category: Labor Law

September 17, 2025

Negotiating Union Contracts in a High-Inflation Economy

Although inflation has cooled from its 2022–23 peak, it remains a defining factor at the bargaining table. Workers feel the cumulative effects of rising prices over the past several years. At the same time, employers face higher labor costs, escalating healthcare expenses, and demands for greater flexibility around where and how employees work. For employers with unionized workforces, these challenges are amplified. Negotiating union contracts is no longer just about splitting the difference on wage percentages—it is about balancing long-term financial stability with short-term employee expectations, preserving operational control while accommodating workplace changes, and finding creative ways to deliver value without locking in commitments that may become unsustainable if the economy shifts again.

This article offers employers practical strategies for negotiating union contracts in a high-inflation environment, focusing on three of the most contentious issues: wages, healthcare costs, and remote-work arrangements.

Inflation and Collective Bargaining

Inflation directly drives bargaining pressure. When the cost of groceries, housing, and transportation goes up, employees expect their wages to rise at least enough to maintain their standard of living. Unions will highlight members’ real-wage erosion and push for agreements that provide protection against continued volatility.

Employers have been here before. During the late 1970s and early 1980s, when inflation often hit double digits, cost-of-living adjustment (COLA) clauses became widespread in union contracts. As inflation moderated in the 1990s and 2000s, most employers phased out automatic COLAs, viewing them as too unpredictable and costly to maintain. Now, with inflation stabilizing but still running above the Federal Reserve’s 2-percent target, unions are again pressing for some form of inflation protection.

When preparing economic proposals, employers should:

Model affordability over the life of the agreement: Do not just budget year-to-year; understand what a multi-year wage pattern will cost when layered with healthcare, overtime, pensions, and roll-up effects.
Benchmark against industry peers: Unions will bring comparables to the table. Employers should know where they stand and avoid commitments that dramatically exceed local or industry norms.
Avoid long-term overcommitments: Be cautious with front-loaded increases or open-ended COLA clauses. What feels manageable today can become a liability if the economy slows and competitors are not living with similar terms.

Structuring Wage Increases

There is no one “right” way to build wage proposals, but employers should consider the following tools when negotiating union contracts:

Multi-year structures: Contracts can front-load or back-load increases. Front-loading provides workers with immediate relief but may leave employers paying above-market wages if inflation falls. Back-loading defers costs but risks resentment if inflation stays elevated. Many employers blend the two approaches, offering a strong first-year increase followed by smaller annual raises.
COLA triggers with caps: Rather than reinstating open-ended COLA provisions, employers can negotiate limited formulas. For example, wages could increase by a fraction of CPI, subject to a maximum percentage each year. This acknowledges inflation without handing over full control of wage growth to external forces.
Lump-sum bonuses: One-time payments can provide meaningful cash to employees without permanently raising base wages or compounding overtime, pension, and other benefit costs. Employers should, however, expect pushback from unions that prefer base-building increases for long-term earnings stability.
Tiered or differentiated increases: Wage increases can depend on seniority, skill level, or job classification. This can be a way to reward critical skills or long-service employees while moderating costs elsewhere. But employers should watch for morale issues and potential legal risks if disparities are too wide.

In every case, employers must ensure compliance with wage-and-hour rules, including minimum wage and overtime requirements under federal and state law. A wage package that looks good on paper can create compliance problems if it doesn’t account for legal requirements.

Managing Healthcare Costs When Negotiating Union Contracts

Healthcare costs are a perennial concern, and they are often one of the toughest issues in negotiating union contracts, especially in today’s environment of rising claims and specialty drug expenses. Employers are projecting annual cost increases well above general inflation. Unions know this and will often resist cost-shifting measures, framing them as benefit reductions rather than necessary adjustments.

Practical approaches include:

Employee cost sharing: Adjusting premium contributions, deductibles, or copays spreads costs more evenly. Employers should pair these adjustments with clear messaging that changes are designed to preserve overall benefit levels, not cut them.
Plan design changes: Options such as high-deductible plans, spousal surcharges, or dependent eligibility audits can provide meaningful savings. These changes, however, must be bargained carefully and communicated clearly to avoid perceptions of unilateral takeaways.
Wellness and preventive programs: Initiatives that encourage healthier lifestyles can reduce utilization over time. Framed correctly, these programs can be seen as joint investments in employee well-being.
Reserve funds or cost-sharing formulas: Some employers negotiate contract language that sets aside reserves or defines how future spikes will be shared. This can reduce conflict down the road when costs inevitably rise.

Employers should remember that health benefits are a mandatory subject of bargaining. Unilateral changes—even well-intended—can lead to grievances or unfair labor practice charges.

Remote Work and Flexibility

Remote work has emerged as one of the most complex bargaining issues since the pandemic. For many employees in relevant positions, the ability to work from home is now viewed as a standard benefit, not a temporary privilege. Unions may seek to embed remote-work guarantees in contracts.

Employers, however, must think carefully before committing. Remote work implicates productivity, supervision, safety, and even cybersecurity. Once written into a CBA, these arrangements can be hard to adjust.

Strategies for handling remote-work demands while negotiating union contracts include:

Pilots with sunset clauses: Agree to trial programs with defined end dates. This allows both sides to evaluate productivity and employee satisfaction without permanent commitments.
Clear management-rights language: Preserve employer discretion over work locations. Where possible, limit contract language to procedures (such as how requests will be considered) rather than entitlements.
Distinguish accommodations from entitlements: ADA or state law may require remote work as a disability accommodation in some cases. Those obligations should be addressed separately, not written into the collective agreement as universal rights.

Handled carefully, remote-work provisions can be structured in a way that provides employees with flexibility while ensuring employers retain control over core operational decisions.

Leaving Room to Adapt

In high-inflation environments, union proposals tend to be more ambitious. Employers need mechanisms that provide flexibility over time:

Side letters or MOUs: Use these for experimental provisions. They provide flexibility to test new ideas without locking them into the core agreement.
Reopener clauses: Tie reopeners to inflation thresholds, healthcare cost increases, or legislative changes. This ensures that both sides can revisit the contract if conditions change dramatically.
Strong management-rights clauses: Explicitly protect employer discretion on operations, staffing, technology, and scheduling. These clauses become especially valuable when economic conditions shift mid-contract.
Non-economic benefits: Consider creative alternatives—training, scheduling input, vacation flexibility—that can be highly valued by employees without carrying heavy ongoing costs.

Employers should also pay close attention to past practice and industry comparables. Arbitrators frequently rely on these benchmarks when interpreting disputed contract terms.

Practical Approaches to Negotiating Union Contracts at the Table

The bargaining process itself can shape outcomes as much as the proposals on the table. Employers should:

Be transparent but strategic: Share enough financial context to build credibility, but avoid “opening the books” in ways that limit flexibility later.
Prepare detailed costing models: Understand the true cost of each proposal, including wage roll-ups, overtime, and pension implications. A one-percent wage increase often costs far more than one percent once these effects are included.
Use interest-based bargaining where appropriate: Focusing on mutual interests—such as stability, recruitment, and sustainability—can sometimes open the door to creative solutions that meet both parties’ needs.
Stay consistent and credible: Bargaining is as much about trust as economics. If management develops a reputation for following through on commitments and maintaining consistent positions, unions are more likely to engage constructively.

For employers, negotiating union contracts during high inflation requires not only careful costing but also a clear communication strategy that builds credibility with both union leaders and employees.

Conclusion

High inflation creates challenges for both sides of the bargaining table when negotiating union contracts. Unions want to protect members’ purchasing power; employers must guard against unsustainable cost growth. But with careful planning, creativity, and a willingness to use flexible tools, employers can negotiate agreements that provide meaningful improvements without jeopardizing financial stability.

The most effective strategies combine structured wage proposals, proactive healthcare cost management, cautious approaches to remote work (where applicable), and adaptive bargaining mechanisms such as side letters and reopeners. Employers who enter negotiations prepared, consistent, and transparent are best positioned not only to reach agreements in this inflationary environment, but also to build stronger long-term labor relationships.

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September 15, 2025

New York Tries to Expand State Labor Relations Jurisdiction

On September 5, 2025, Governor Kathy Hochul signed off on a potentially monumental change in New York’s labor law. The amendment to the New York State Labor Relations Act purports to give the New York Public Employment Relations Board (PERB) broad jurisdiction over private employers. As its name suggests, PERB historically focuses on public sector labor relations issues. The National Labor Relations Board (NLRB), a federal agency, governs most private-sector labor relations throughout the country, including New York. Can New York step in and take over this historically federal role?

Read here for more on the scope of NLRB’s jurisdiction.

NYS Labor Relations Act Amendment

The amendment to Labor Law § 715 purports to expand PERB’s jurisdiction to private employers in a novel way. Specifically, the statute now provides that PERB has jurisdiction over private-sector labor relations unless the NLRB “successfully asserts jurisdiction over any employer, employees, trades, or industries pursuant to an order by the federal district court established under article three of the United States constitution.”

If you’re not sure what that means, you’re not alone. The wording appears to be ambiguous in multiple respects. But we do at least know what the NY Legislature wants it to mean.

State Senator Ramos sponsored the legislation in the NY Senate. Her introducer’s memorandum explains the goal: to prevent a gap in labor law enforcement during periods when the NLRB cannot act, such as when the Board lacks a quorum. In other words, “This bill intends to give New York the power to protect employees if the National Labor Relations Board is not fulfilling its duty.”

The amendment took effect immediately upon signing.

Federal Preemption

The NY Legislature knows that this amendment will face preemption challenges. The Sponsor’s memo acknowledges that “[u]nder current law the National Labor Relations Act preempts any attempt to take up these cases at the state level.”

The Supreme Court has long held that the NLRA preempts most state regulation of private-sector labor relations:

Garmon preemption blocks state action in areas “arguably protected or prohibited” by the NLRA.
Machinists preemption blocks states from regulating areas Congress intended to leave to the “free play of economic forces.”

The Sponsor’s memo asserts that “The National Labor Relations Act simply remaining in place does not guarantee that the provisions will successfully protect employees.” Thus, the Legislature’s theory seems to be that by amending state law as they have, PERB can assert jurisdiction unless the NLRB stops it from doing so. However, that reasoning still appears to be at odds with established preemption case law.

The Garmon and Machinists preemption doctrines don’t shut off just because the NLRB is not acting. Federal law still governs, even if enforcement is delayed.

There are two narrow exceptions where states can act:

When the NLRB formally declines jurisdiction over entire categories of employers under NLRA § 14(c)(2) (e.g., very small local businesses).
When the NLRB cedes jurisdiction to a state agency under NLRA § 10(a).

New York’s amendment doesn’t fit either exception. Instead, it aims directly at the NLRB’s core jurisdiction, effectively daring federal courts to enforce existing preemption standards.

On September 12, 2025, the NLRB sued the State of New York and its PERB seeking to enjoin the enforcement of the amendment. If the NLRB (which is not itself an employer subject to the NYS law) is deemed to lack standing, then private parties may need to take up the litigation fight.

How New York’s State Labor Relations Act Differs from the NLRA

One reason the recent amendment is so consequential is that New York’s own Labor Relations Act is not just a copy of the NLRA. The differences are significant.

Devalues Employer Interests

Most importantly, the New York law is written as a one-sided protection for employees. The NLRA recognizes both employee rights and certain employer rights. The New York state labor relations statute does not include that balancing language. Its focus is on ensuring employees’ right to organize.

Certification procedures under the state law are also potentially more favorable to unions. While the NLRB strongly favors secret-ballot elections, the NY State Labor Relations Act permits certification based on alternative showings of majority support. In practice, that could mean greater reliance on card-check recognition and fewer opportunities for employers to communicate with their employees before a union is installed.

Lacks Relevant Precedent

The NLRA has nearly 90 years of precedent guiding questions like: What is an appropriate bargaining unit? When is an election necessary? What counts as unlawful conduct during a campaign? PERB has far less (essentially zero) precedent in the private-sector setting, and the State Labor Relations Act does not replicate all the more detailed parameters found in federal law. In essence, PERB would be starting from scratch in this area.

Broader Remedies

Finally, remedies under the state law are not identical to those under the NLRA. At the federal level, remedies are historically limited: reinstatement, back pay, and cease-and-desist orders. The New York statute authorizes PERB to fashion remedies for unfair labor practices with little guidance on limits. Without decades of judicial gloss, employers could face new uncertainty about what remedies PERB might impose.

In short, if PERB were to exercise jurisdiction broadly under this amendment, employers would not simply be dealing with the familiar NLRA system transplanted to Albany. They would be operating under a different statute—one that is more protective of employees, less protective of employers, and far less developed in terms of jurisprudence.

What Employers Should Do

Stay alert to petitions. If a union files at PERB citing the new law, you may need to respond quickly with a preemption defense.
Know your thresholds. If you are in one of the small categories where the NLRB has formally declined jurisdiction, PERB jurisdiction is nothing new—it already applied.
Prepare for litigation. Expect forum fights. Legal battles are inevitable—effectively invited by the amendment. The question is which employers will be the ones stuck in the crosshairs and forced to take up the fight.

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July 22, 2025

Trump Names First 2025 NLRB Board Member Nominees

On July 17, 2025, President Trump submitted the nominations of Scott Mayer, Boeing’s chief labor counsel, and James Murphy, a veteran NLRB attorney, to fill the two Republican vacancies on the National Labor Relations Board. These 2025 NLRB Board nominations represent the next step toward re-establishing a functioning Board after a prolonged standoff that began in January.

The Removal of Gwynne Wilcox

In a rare and consequential move, President Trump removed Democratic Member Gwynne Wilcox on January 27, 2025, despite her term being set to run through August 2028. Notably, no allegations of misconduct or neglect of duty accompanied her dismissal. Wilcox quickly filed suit, citing the National Labor Relations Act’s explicit requirement that a Board member may only be removed for cause—specifically, neglect of duty or malfeasance.

A federal district court sided with Wilcox in March, ordering her reinstatement. But that decision was stayed—first by the D.C. Circuit and then by the U.S. Supreme Court in May, effectively allowing the removal to stand for the time being. The legal battle remains active and may ultimately prompt the Court to revisit long-standing precedent that limits presidential authority to remove members of independent agencies.

Frozen in Limbo

Since Wilcox’s removal, the NLRB has operated with only two sitting members—Republican Chairman Marvin Kaplan and Democrat David Prouty—leaving it without the three-member quorum required to issue decisions or take formal action. As a result, hundreds of pending matters, from unfair labor practice charges to union election petitions, have ground to a halt. While pro-labor rulings from the Biden era remain in effect, the current Board lacks the quorum necessary to issue new decisions or revisit those precedents.

Meet the First 2025 NLRB Board Member Nominees

Scott Mayer: A Corporate Counsel with Management Credibility

Scott Mayer currently serves as chief labor and employment counsel at Boeing, one of the world’s largest aerospace manufacturers and a frequent player in high-stakes labor relations. Mayer has spent much of his career advising corporate leadership on collective bargaining strategy, managing labor disputes, and responding to union organizing efforts across Boeing’s nationwide facilities. His public record includes involvement in some of the most contentious labor negotiations in the private sector, including disputes involving the International Association of Machinists and the SPEEA engineers’ union.

Prior to joining Boeing, Mayer worked in private practice representing employers in labor and employment matters. He is regarded as a strategic thinker with a deep understanding of the National Labor Relations Act and a clear preference for traditional, employer-focused interpretations of Board precedent. While not as publicly outspoken as some prior nominees, his record reflects a consistent orientation toward limiting the reach of union-friendly doctrines and maintaining management flexibility in workforce decisions.

If confirmed, Mayer would likely favor curbing Board deference to union access, narrowing the definition of protected concerted activity, and restoring business-friendly case law on discipline, surveillance, and employer speech rights.

James Murphy: The Institutional Insider

In contrast to Mayer’s corporate pedigree, James Murphy brings an insider’s grasp of Board operations after five decades of government service. A career attorney at the NLRB, Murphy has advised both Republican and Democratic-led Boards over the years, contributing to the General Counsel’s office and supporting enforcement in regional investigations and appellate litigation.

Murphy is respected among practitioners as a procedural expert who knows the internal workings of the agency better than almost anyone. Though not publicly outspoken, his long tenure has made him a stabilizing figure within the institution. Republicans likely view Murphy as a safe pick to provide continuity and procedural discipline while still aligning with conservative views on the limits of Board power.

His experience also makes him an ideal candidate to help unwind recent doctrinal shifts and reassert the Board’s more traditional enforcement approach, particularly in the wake of regulatory and decisional experimentation during the Biden years.

What Confirmation of Mayer and Murphy Would Mean

Confirmation of Mayer and Murphy would immediately restore the Board’s quorum and give Republicans a 3–2 majority. Mayer’s term would run into 2029, and Murphy’s into 2027, solidifying a longer-term shift in the Board’s ideological direction.

With a new Republican majority in place, the Board could quickly revisit and reverse several high-profile decisions issued in recent years. Potential areas for change include:

Narrowing the definition of “joint employer”
Reversing rules limiting employers’ ability to hold mandatory meetings opposing unionization
Redefining what constitutes protected concerted activity under the National Labor Relations Act
Relaxing restrictions on employee handbooks and workplace policies

For employers and management-side counsel, these changes would represent a significant shift from the Board’s recent trajectory and a return to more traditional interpretations of the Act.

A Time Pressure Scenario

Chairman Kaplan’s term is set to expire on August 27, 2025, and he has not been nominated for reappointment. This creates a time-sensitive dynamic for the confirmation process for these 2025 NLRB nominations. If Mayer and Murphy are confirmed before Kaplan’s term expires, the Board will immediately regain quorum and a Republican majority. If confirmation is delayed until after Kaplan steps down, Prouty, a Democrat, could temporarily become the only Board member and de facto chair. Without quorum, his authority would be limited. Nonetheless, it would present a politically awkward scenario under a Republican administration.

Why Employers Should Pay Attention to These 2025 NLRB Nominations

The outcome of this series of events will shape the labor law landscape for years to come. Employers should closely monitor both the confirmation timeline and the ongoing litigation over Wilcox’s removal. If the Supreme Court ultimately rules in Trump’s favor, it could fundamentally alter the degree of independence enjoyed by administrative agencies.

Trump’s first 2025 NLRB Board Member nominations are more than mere personnel decisions. They are a calculated move to reclaim control of the NLRB ahead of Kaplan’s impending departure. If Mayer and Murphy are confirmed, the Board will resume its decision-making authority with a Republican majority. Until then, labor-friendly precedents remain the controlling administrative interpretation of many aspects of the NLRA. And hanging over it all is the unresolved question of whether a president can lawfully remove a sitting NLRB member without cause—a constitutional showdown that may soon reach its climax.

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