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First Central Bank Case Essay

3791 words - 15 pages

First Central Bank Case

Part I:

River City was a community of approximately 210,000 people and, because of the influence of the International Metalworkers Union (IMU), had been considered a "union town" by most everyone. The IMU was heavily involved with organizing many of the firms and institutions in the area and was active in local politics. They had represented the workers at the large auto parts plant since the 1930's. Another of the institutions that the IMU had been able to unionize was one of the town's smaller banks. It had organized the bank's maintenance workers. The IMU was now trying to organize First Central Bank, the area's largest and oldest commercial bank.
As a result of recent growth, First Central had expanded to include 18 branch offices and a data processing center. Some of the bank's employees were closely related to the IMU local leaders and to workers at the auto parts plant. The salaries of First Central employees was considerably lower than those of comparable jobs at the auto plant and even lower than two of the smaller banks in town. With the exception of the maintenance workers, everyone at the First was on salary. Management believed that its somewhat low salary scale was more than made up for by its excellent working conditions, its job security, and its liberal profit-sharing program.
Benefits under First Central's pension plan were not as good as those provided to the auto plant workers, but they were equal to or better than the smaller bank's plans. Management felt that all of its benefits, when considered as a package, compared well with the auto plant's benefits. However, due to the rising medical costs and the objections of the bank's largest stockholder, Fred Jackson, the bank did not offer an employer-paid hospital and medical-care program. Management had made proposals to the board, but each time Jackson was able to block the action by putting pressure on the president, Jack Kramer, and the other members of the board. The lack of a company paid insurance program and the lower salary scale had led many of the bank's employees to explore what the advantages might be with union representation. As a result, Kramer was now facing the possibility of the IMU being the collective bargaining agent for his workers.
Management was flabbergasted to learn that there were enough employees to warrant an election. Initially, in fact, the bank did not take the actions of some of the employees seriously until it was almost too late. To combat the reality of the situation First Central's officers began taking measures to prevent the infiltration of the union. In trying to do so the question arises whether or not the bank violated any legal statutes. Also, it must be explored whether or not the IMU violated any laws or rules in trying to push to unionize the employees. Did both sides abide by the fair labor practices dictated by the National Labor Relations Act and the Taft-Hartley Act? Was the electioneering tactics...

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