Labor/Management Negotiation: A Simulation Activity
The railroad industry played a central role in the transformation of the United States from
an agrarian society to an industrialized nation. The growing pains that were a part of this
process included conflict between owners of large businesses and the laborers who
worked for them. Sometimes these conflicts escalated into violence. The railroads were
no exception.
In July of 1877, for example, disgruntled B&O workers went on strike in protest over
cuts in their wages. This strike spread quickly to every railroad east of the Mississippi
and then to the Missouri Pacific and other western lines. For more than a week, most
freight and even some passenger traffic covering over 50,000 miles was stopped in its
tracks. The situation in Baltimore got out of hand quickly as other disaffected citizens
joined to create a mob of fifteen thousand. Marching on Camden Station, they clashed
with National Guardsmen called in by the Governor. The confrontation resulted in at
least ten deaths and scores of injuries. The station suffered damage as passenger cars
were burned and nearby tracks were torn apart. Following a plea from B&O president
John W. Garret, President Rutherford B. Hayes ordered five hundred federal troops to
Baltimore to help end the chaos. Peace was restored. The strikers retreated, and by early
August the trains were running again. But neither side was happy with the outcome.
Probably the only thing they agreed upon was that there must be a better way to settle
their differences.
Collective bargaining involves representatives of both labor unions and management in
negotiations about the terms of a contract. Today, the procedures to be followed are
governed by federal law. This simulation activity is designed to allow students to
participate in the process through which workers and big business owners attempted to
settle their disputes without resorting to strikes and their potential for producing violent
confrontation.
Groups of students will assume the roles of railway union leaders and representatives of
top management as they engage in the collective bargaining process. Each side will be
given information about the current contract, and the status of negotiations on the new
contract. They will also be provided with confidential information that is not to be
revealed to their counterparts. Students will meet with members of their negotiating
teams to plan a bargaining strategy. Once they are prepared, negotiations between teams
representing labor and management begin. Failure to reach an agreement within the
allotted time will result in a strike.
Directions for teachers:
1. Distribute the handout with the introductory paragraph describing the events
surrounding the railroads strike of 1877. Have students read the paragraph.
Emphasize that this as an example of the history of conflict between labor and
management in this country. While not every disagreement escalated into
violence, it was not rare.
2. Direct students to read the second paragraph. Explain that the simulation is
designed to help them better understand a very competitive process that plays an
important role in our economic system. The results of collective bargaining in
one business can set a trend that may impact an entire industry, and ultimately the
entire economy.
3. Direct students to read the third paragraph. Distribute the general information
handout. Emphasize that each group of two or three students will be paired
against another group for the simulation. The goal of each group is to negotiate
the best deal possible for their side. Stress that a skillful negotiator is not always
the loudest, but they are the most persuasive.
4. Organize students into groups of six or fewer. Allow them to set up labor and
management teams within these groups. Once they are clear as to the respective
teams, give each team one copy of the confidential information for their side. Be
sure they do not share the information with their adversaries.
5. Teams should meet separately for several minutes to decide on the demands they
will make during the negotiation and to plan a bargaining strategy. Once they
indicate that they are ready, direct them to begin the negotiation. Remind them
that the current contract has expired and that a strike will occur if this last attempt
to reach a settlement fails.
6. Allow them to negotiate for 20 to 30 minutes (timing will vary) and keep them
informed of the time left as the strike deadline approaches. Encourage them to
compromise in order to reach an agreement, neither side will benefit from a strike.
You may want to extend the deadline based on the timing of the activity.
7. One variation, which may be employed if one or more groups are unable to settle,
is to assign members of other groups to act as mediators to help facilitate an
agreement.
8. Students should write the terms of the contract in a format similar to that used to
present the current contract. They should be encouraged to be creative in crafting
a new contract. As long as both sides agree, they are free to change the current
contract in any reasonable way they wish.
9. Once the contracts are written and signed by the parties, you may want to have
them briefly present the key provisions and answer questions about why they
reached certain conclusions. There are likely to be significant differences in the
settlements achieved by the different teams. Ask students to identify the biggest
“winners” from both labor and management perspectives.
10. In addition, or as an alternative to the above, have students write a press release
about the contract settlement. The union representatives should write the release
as if it were to be published in a newsletter distributed to their membership.
Management representatives should write for a publication to be read by
stockholders.
Objectives for Students:
1. Outline the key events of the Strike of 1877.
2. Identify the purpose of the collective bargaining process.
3. Plan a strategy and negotiate an agreement on a contract between railroad
management and workers.
Where it fits into the curriculum:
This lesson plan is useful for units aimed at teaching about industrialization and the labor
movement in the United States during the late 19th and 20th centuries. It can also be used
for units focusing on the role of negotiation and compromise between competing interests
in our economic system.
Relevant MSDE Standards
Era 6
The Development of the Industrial United States (1870-1900)
Standard 1
How the rise of corporations, heavy industry, and mechanized farming transformed the
American people.
Standard 1A
The student understands the connections among industrialization, the advent of the
modern corporation, and material well-being.
Standard 3
The rise of the American labor movement and how political issues reflected social and
economic changes.
Standard 3A
The students understands how the “second industrial revolution” changed the nature and
conditions of work.
Standard 3B
The student understands the rise of national labor unions and the role of state and federal
governments in labor conflicts.
Era 7
The Emergence of Modern America (1890-1930)
Standard 1
How Progressives and others addressed problems of industrial capitalism, urbanization,
and political corruption
Era 10
Contemporary America (1968 to the present)
Standard 2
Economic, social, and cultural developments in contemporary America
General Information for Union and Management
The current contract expires tonight at midnight. Both sides have agreed to one last
negotiating session. The three issues still unsettled are wage rates for engineers,
vacations, and the workweek for rail yard workers. The current contract provides for the
following:
Wage rates for engineers:
$450 per week for one year
$550 per week for years two through five
$750 per week for years six through ten
$1000 per week after ten years
Vacation for all union employees:
one week in year one
two weeks in years two through four
three weeks in years five through ten
four weeks after ten years
Workweek for rail yard maintenance workers:
Forty-five hours per week of regular time, with time and a half for any
work in excess of 45 hours in a week; management has the option to
arrange the workweek so that part time employees work in place of
employees who have reached 45 hours in a particular week so as to
eliminate some of the overtime pay
UNION: CONFIDENTIAL INFORMATION
You feel the need to achieve a resounding settlement for the members of your union.
You do not want a strike! Some of your members have been approached by the
organizers of another union about the possibility of representing them in the future.
Failure to obtain a good financial package could be the first step toward widespread
dissatisfaction with your leadership. Such a result will give more ammunition to the
union trying to lure your members away.
You are willing to be flexible on the vacation issue, but you know you must procure a
nice raise for the engineers. They are the leaders within your union and you do not want
their unhappiness to filter down to the other workers. In addition, the current workweek
for rail yard workers is the source of many complaints. You know you are in a difficult
position, but you are convinced that you can achieve your negotiating goals and avoid a
strike. Your reputation as a tough bargainer, and your job, are a stake in these
negotiations.
DO NOT REVEAL THIS INFORMATION TO MANAGEMENT
MANAGEMENT: CONFIDENTIAL INFORMATION
You cannot afford a strike! The company has lost money during the past two years and a
strike could be a crippling financial blow. The president of the railroad has personally
cautioned you about “giving away the store” in this contract negotiation.
You are willing to give in a bit on the vacation issue, and perhaps agree to a small raise
for the engineers. However, you do not want to change the workweek because you know
that will cost the company a lot in overtime pay. It may also cost you your job!
DO NOT REVEAL THIS INFORMATION TO THE UNION