Definition of Collective Bargaining Agreement

What is a collective bargaining agreement? What is the definition of the term collective bargaining agreement?

If you belong to a union and/or are a fan of sports, you have likely heard the term "collective bargaining agreement" many times throughout your life.

A collection bargaining agreement occurs when two sides (the employers and the employees/group representing the employees) voluntarily come together to work out an employment agreement. This agreement will cover wages, benefits, etc.

Employees are represented by their union in collective bargaining negotiations.

If the two sides aren't able to come to an agreement, job action will usually occur. Job action can come in the form of employers locking their employees out, or it can come in the form of employees walking off the job (striking) or scaling back on the services that they offer (for instance, teachers could elect not to issue report cards or participate in extracurricular activities). In some cases, employers and employees will agree to continue under the terms of an existing deal indefinitely until a new agreement can be worked out.

Let's look at an example of a collective bargaining agreement.

In Major League Baseball you have the owners and the players. The players are represented by a union, while the owners are represented by the commissioner of the league.

When a collective bargaining agreement expires, another one must be agreed to. Both owners and players want more money, so usually there will be a round of contentious negotiations before an agreement is struck. In some cases, job action will be taken in the form of a lockout or strike.

The 1994-95 Major League Baseball season was partially lost due to a strike, with the World Series eventually being wiped out. This strike alienated millions of fans, and it took the MLB at least a decade to fully recover.

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