The vendor will fall in one of these four categories:
1. National chain
2. Franchise business
3. Area chain business
4. Private owned business

Who to approach, first:

Area chain businesses and privately owned businesses are usually the most likely to agree to a discount program with a local union. The union should check with the appropriate AFL-CIO entity in the their area, usually the Central Labor Council, to determine if the vendor has a collective bargaining agreement with a union and/or if the vendor is on a boycott or do not patronize list. Also, make sure that the provider you select is acceptable based on the demographics of your current membership and those workers you are organizing.

2. Negotiations with the Vendor:

How much of a discount

There is no set scale. However, we suggest that the discount should be at least 10%. Typically, most vendors will initially agree to a discount between 10% to 20%. Most importantly, you want to ensure that you get the best discount that the vendor offers to any affinity group. This is guaranteed by inserting exclusivity or a uniqueness clause into the contract or letter of agreement. Ensure that the discount will apply during a "sale."

"Selling" the union discount to vendors

The vendor you approach may ask for a track record or for you to demonstrate the volume of business that your members do with other local businesses. You can:

• Discuss the number of union members in your local. "We represent bargaining units of ____ workers; additionally, the AFL-CIO unions in this area represent _____ workers.
• Explain the results of your local survey. "A survey we conducted found that ___ percent of the members are interested in this discount."
  
• Explain your plans to market the discount. "We will promote your business in our newsletter, on our web site, etc."
  
• Agree to a shorter-term contract during which the union agrees to evaluate usage of the benefit by your membership. This also allows the vendor to see if members will use the discount.

Make clear to the vendor that complaints must be resolved within a day or two of your receiving the complaint. A failure to resolve complaints on the part of the vendor will result in your exercising the termination of the agreement clause.

Set up a member verification

The vendor must agree to verify that the worker is entitled to the discount to ensure that only union members - and not free riders, fair share payers or non-members - can get the discount. Ask the vendor to check for a union membership card, benefits program card or coupon.

3. The Contract:

We recommend that the initial agreement with the vendor be for one year. However, the contract should have a termination agreement clause, which either side can initiate 30 days following the notification of the other party. See a sample contract and other templates that you can use.

The vendor must agree to follow/and be known in the community to follow, acceptable standards of ethical business practice and comply with all applicable federal state and local laws and regulations. Including those governing safety and health standards, consumer protection, and anti-discrimination laws on gender, color, race, national origin, immigration status, age and disability.

• The contract must accurately represent the entire understanding between the union and the vendor. It supersedes all previous oral and or written agreements and gives all the details of the discount.
• The discount or service should be an exclusive offer to the union members
• The supplier must agree that the union will have the right to review and approve advance copy of all materials used to promote the program and/or the relationship.
• The union should not provide a list of union members and their addresses to any vendor. (Most union by-laws prohibit the sharing of such lists.) However, in some cases the union may agree to a mailing to the members to promote the benefit. In this case, the union should do the mailing. The vendor may pay for the cost of the mailing.
• The union agrees to evaluate the program and to share the results with the vendor.
• Termination of the agreement: recommended 30 days by either party.
• Must be signed by authorized officer of the union and vendor.

Union's Responsibilities:

Governance - Different governing bodies of the local union may have differing roles in the development and management of the local benefits programs. The constitution/by-laws of the local union should be followed explicitly. In most cases this means that the authority to enter into an agreement with a vendor rests with the governing board of the local union and/or the chief elected officer. Most unions mandate that the chief elected officer sign the contract with the vendor. In some cases, a local union is required to have approval from the international to enter into an agreement. The board or the chief elected officer will usually appoint a committee or assign a standing committee to develop and service the local vendor agreements. (For example, some unions have used their organizing committee or their negotiations committee for these functions, while other unions have created a special benefits committee.)

Contract Management - Usually the committee chair, or an individual committee member is appointed by the chair to manage the contract. It is that person's responsibility to monitor the provisions of the contract and to ensure that both parties meet the contract requirements. This is considered the "due diligence" requirement of the union in providing a benefit/service to the membership. Due diligence is critical to ensure that the local is not placed at risk legally, financially or politically. In addition to the benefit/service this also means that the contract manager should ensure that the complaint process is being enforced and that a periodic evaluation is being conduct on the membership's response to the benefit. Where possible, the contract manager should informally meet with the vendor on a regular basis. Additionally, we recommend that the manager ask the committee for a review of the agreement if more than 5% of the members using the benefit/service have a complaint or less than "satisfactory" experience with the vendor. Note: The contract manger must agree not to receive any additional, separate or special gifts from the vendor unless otherwise approved by the governing board of the local union and with the knowledge and approval of the appropriate international union representative.

Conflict of Interest - The union may be faced with a number of apparent conflict of interest issues since most members will be most comfortable approaching vendors at which they know someone. (For example: the member's sister-in-law is a the store manager, a cousin owns the store.) We encourage you to use these vendors. However, prior to a determination being made whether or not to sign an agreement with the vendor both the committee and the governing board must be made aware of any potential conflict of interest. Under no circumstances should the union member who has the conflict of interest be appointed contract manger.

5. Revenue Sharing:

In some cases, vendors will offer the local union a percentage of the profit they make on the members usage of the benefit. Don't accept this payment. Ask that it be put into the discount for your members. Most unions prohibit a local from entering such agreements without notification and approval from the international. There are a number of reasons for this requirement including that unless done properly this may result in the union losing its tax status as a 501(c)(5) organization and leave the local and its officers libel for back taxes, penalty and prosecution under the internal revenue tax code.

6. Technical assistance:

We encourage you to integrate the Union Plus benefits and your local benefits into your organizing efforts. Union Privilege can assist you with that effort. If you have any questions, please call 1-800-472-2005 or send an e-mail to organizing@unionprivilege.org.