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We hope this little procedural hiccup won't halt the production of Mike-Sell's potato chips. However, the future for the company hasn't looked this dim in a very long time.
Mike-Sell's is one of the iconic American brands when it comes to potato chips. But not it's going through tough economic times. The top brass at the company decided that it needed to trim the fat and lower costs -- including lay-offs. However, under their collective labor agreement, its employees were unionized.
After many half-hearted back-and-forth exchanges about scheduling times, the company suggested a meeting one day before the expiration of the currently operating collective bargaining agreement; and offered final terms. When the union said that they couldn't make the meeting because of a scheduling conflict, the company threw up its hands and declared an impasse.
What's an Impasse?
The impasse is a labor law mechanism that allows an employer to call into power its last offer once an impasse has been established. From a game theory perspective, this means that the looming possibility of being backed into a wall hangs above the union at all times. Thus, the union will generally try to avoid the impasse.
Of course, the declaration that negotiations aren't working requires that some basic and material terms at least be firmly established between the parties -- or else the impasse is meaningless. During the negotiation process, both sides yearn for certainty in order to make more strategically sound decisions. Thus, it can be argued that both sides, in some manner benefit in principal with key material terms being settled -- but the benefit usually goes to the union.
Mike-Sell's objections aside, the D.C. Circuit Court concluded that no impasse took place and Mike-Sell's failed to prove the "requisite firmness on the key issues in negotiations." Also, it had not made a "last offer" -- a necessary condition of declaring an impasse in the bargaining session.
The heart of the discussion is one about cost-benefit analysis. What the impasse really represents is a trump card, a means by which clear negotiating terms are set out cleanly for at least a single side.