Multiemployer Bargaining and Monopoly: Labor-Management Collusion and a Partial Solution

Multiemployer collective bargaining relationships between un- ions and employer associations easily devolve into legalized cartels. Once unions establish themselves as the bargaining representative for employers\u27 employees, the employers have much to gain from banding together as an association, raising their prices and eliminating non-union competition, with unions happily serving as enforcement agents in the scheme. In return, unions receive a share of the increased oligopolistic profits in the form of higher wages and benefits. A threat to such a cartel is an employer who wants to bargain with the union but does not want to accept the terms the associ- ation has bargained for. This Article examines the status of such an employer. It outlines how unions and (especially) as- sociations work to thwart such an employer from bargaining di- rectly with a union despite the federal labor policy ofprotecting an employer\u27s freedom in selecting its bargaining representa- tive. This anticompetitive behavior not only hurts individual non-association employers but also non-association employers\u27 union employees, as the union will refuse to realistically bar- gain with their employer unless it agrees to the terms in the as- sociation agreement. This leads to the employer either being forced to accept the association\u27s terms, which it cannot afford, or, if it survives a strike and picket, becoming non-union. A middle ground of real bargaining that serves the non- association employer\u27s union employees\u27 interests is not avail- able. In enforcing this scheme a cartel\u27s primary tactic is the use of most- favored-nations clauses in multiemployer collec-tive bargaining agreements. Another is the design and use of multiemployer ERISA plans. The Article also discusses the labor antitrust exemptions and how, notwithstanding the suggestions of other scholars, anti- trust law is an ineffective tool to remedy union-association car- tel behavior. Instead, the Article advocates changes that can be made to the labor laws and to ERISA that would allow individ- ual employers to escape the terms of association collective bar- gaining agreements and encourage unions to nevertheless bar- gain with them. This does not mean that multiemployer bar- gaining itselfshould be banned. Multiemployer bargaining has always been with us and is not going away, but its anticompeti- tive effects can be tempered