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Contract disputes with unions can hurt your bottom line

Running a successful business takes a lot of time, energy and investment. Chances are that you've spent many years developing your company and building it to a point where you can afford to retain skilled staff. Now, you've been informed that your staff has decided to unionize. Your employees are hoping to leverage their contributions to your company's success for better pay, different working conditions and different benefits.

That can leave you in a difficult position. Under the National Labor Relations Act, you can't penalize your employees for trying to unionize or prevent them from doing so. However, you may have to look closely at the aims of the union and the way that it may impact your business. Increased wages, an inability to terminate workers who perform poorly and expensive benefits could undermine your company's ability to succeed.

Unions don't always see the big picture

Because unions are worker groups, it can be easy for their leadership to feel pressured by members. Issues that employees feel strongly about can become sticking points for your company, even if there's no positive way to resolve the issue. Unions can give your employees a voice and help ensure they receive fair treatment. They can also make poor decisions that have an impact on all of your employees and the success of your company.

You want to pay your employees a fair wage and scale their benefits up as profit margins increase. Unions, however, may expect instant gratification. With limited liquid capital, your company could easily end up over-extended trying to fulfill the requests of the union. Worse still, you could face staff walk-outs or strikes if you fail to meet demands. These events can result in massive operating losses until disputes about pay, benefits and other contract issues get resolved.

Arbitration can help, but the process is complex

For many businesses, the preferred manner for dealing with contract disputes that arise due to unionized worker forces is to participate in arbitration. Typically, both sides are bound to whatever the outcome of arbitration may be. This can help you prevent future or ongoing issues about the same dispute, but it can also leave your company vulnerable to substantially increased expenses.

That's why it is so critical that you approach any negotiation or arbitration with a worker union proactively. Having firm figures to back up your position can help. So can an in-depth knowledge of state and federal employment laws. In order to keep your business running properly and maintain costs at a sustainable level, you will need to advocate for your company aggressively. Doing so will ensure that you not only protect your profits, but also the future job security of your employees.

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