Subcontracting – An Option of Last Resort

With the commencement of the calendar year, many Districts are facing contract negotiations with their non-professional staff.  All negotiations must be conducted in good faith, with a sincere desire to reach a collective bargaining agreement.  At times, despite all good faith efforts in negotiations, an impasse is reached.  At that time, with today’s economic limitations, subcontracting may be the only viable alternative.  The decision to bargain over the issue of subcontracting must also be done in good faith. 

When contemplating subcontracting work previously performed by a bargaining unit, the following steps must be followed:

  1. Notify the Union in writing of the District’s intent to subcontract.
  2. The District should request proposals from prospective subcontractors.  The bid specifications must also be given to the Union.
  3. Provide the Union with copies of the subcontracting proposals received by the School District.
  4. Meet and discuss subcontracting proposals.
  5. The District must do a cost analysis of the savings of the lowest subcontracting proposal and provide such information to the Union.
  6. Meet and discuss the cost savings of subcontracting.  Permit the Union the opportunity to make a counteroffer.
  7. If the Union declines to meet the cost savings of the lowest subcontracting proposal received by the School, the District must submit to the Union one or more bargaining proposals that would meet the subcontractor’s savings.
  8. If the Union still cannot or refuses to meet the cost savings of the lowest subcontracting proposal, the Union should be notified in writing that its proposal, if any, has been rejected, and that the parties have reached impasse.  Efforts should be made to have the mediator confirm in writing that an impasse has been reached.  The Union should also be notified in writing of the specific date and time that the Board of School Directors will consider and vote upon the issue of subcontracting.

Before taking the steps outlined above, it must be determined whether good faith bargaining has taken place.  Making that determination involves a review of the bargaining unit history, the present status of the negotiations and what steps may have to be taken, if any, prior to starting the subcontracting process.  This can be a complicated and difficult determination.  If it is determined that good faith bargaining has occurred, the application of the above steps can also be difficult to navigate.  Ultimately, if the Union is willing to provide equal services at the same or less cost than the outside vendor, the District would be obligated to enter into such a collective bargaining agreement with the Union.  If the District subcontracts the services, it is still obligated to engage in impact bargaining with the Union, including such matters as severance packages or opportunities for its members to be employed with the subcontractor.

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