On November 15, 2015, members of the United Auto Workers Local 833 began picketing after the union rejected Kohler Co.’s last, best and final offer. Approximately 1,800 union members voted to strike. The union members took issue with what they described as inadequate pay increases, higher healthcare costs and the continuation of a two-tier wage scale.

In the last contract, which took effect in 2010, the union accepted frozen wages for five years, increased health insurance costs and a payroll system that pays new hires far less than more senior employees. Now that unemployment figures in the area are low and the housing market has begun to reemerge, the union workers are seeking increased pay and better benefits. The two-tier wage system has frustrated the union members the most.

Kohler has indicated that this strike could deter job growth in Sheboygan. According to the company, the contract proposal provided for wage and benefit increases in each year of the contract, an increase in pension for certain employees, an increase in life insurance for all employees, and increases in short-term and long-term disability benefits. In addition, Kohler has noted that the employees would have more health insurance options under the proposal. Notwithstanding the strike, Kohler has invited employees to return to work.
    
It is important for employers with unionized workforces to develop an understanding of the union’s positions early in collective bargaining. Successful negotiations balance many considerations, including maintaining consistency in the employer’s bargaining position and the financial consequences to the employer (and employees) if the parties do not reach an agreement. Furthermore, employers should consider developing a strategy to respond to unionized employees’ perception that an improving economy justifies wage increases.