The Temporally-Flawed Concept of Binding Promises in American Collective Bargaining and Employee Benefits Law: A Source of the Concurrent Crises in the U.S. Industrial Relations, Retirement, and Health Care Systems
Document Type Book Chapter
Published in "Panorama Internacional de Derecho Social: Culturas y Sistemas Juridicos Comparados" coordinated by Patricia Kurczyn Villalobos. Universidad Nacional Autonoma de Mexico, Instituto de Investigaciones Juridicas, Mexico City, 2007, p. 27-48.
The American collective bargaining system is in serious trouble, as is the employee benefits system providing pensions and health care benefits for millions of non-union as well as unionized workers and retirees. The portion of the labor force covered by collective bargaining has dropped so low that one can barely refer to it as a system. Simultaneously, the American private employer-based pension system is moving towards a crisis. Large employers with the finest pension plans, covering thousands of workers and retirees, in industry after industry, are terminating their pension plans, or replacing them with cheaper, weaker retirement programs, often while reorganizing under the American bankruptcy system. Pension benefits upon which retirees and their families have relied are suddenly, often dramatically, cut, as the expense and liability are transferred to the federal government pension benefit guaranty program, a back-up scheme which only covers specified portions of the original benefits. The health care system, too, largely employer-based, is beginning to stagger under the weight of employer reductions in coverage, for retirees as well as employees. These changes are all in the nature of broken promises, whether or not a contract technically has been breached: broken promises to individual workers and retirees, broken promises to trade unions, and on a grand scale, the broken promise of the American social contract. This paper will sketch out, in comparative perspective, some flaws in American labor law regarding the nature of the collective bargaining agreement (CBA), trade union representation in negotiating and enforcing CBAs, and treatment of long-term benefits promises to employees and retirees. It will suggest that the cumulative effect of these doctrinal contradictions has made possible the thwarting of the bargained-for, relied upon, expectations of workers and retirees, and has led to massive difficulties in the employee benefits system as well as in the collective bargaining regime. These aspects of both collective labor law and employee benefits law must be reconsidered if the system is to function soundly in the future. The American situation also may have implications for the pensions and health care systems of many other countries.