Companies should be loyal to their employees; likewise, the employees are also expected to be loyal to their employers. The relationship between a company and its employees can be termed as a social contract (Clancy, 1999). The company should enter into a pseudo-political agreement with its employees, acknowledging the rights and obligations which govern both parties.

In the case of Marsh Company, since the employees had satisfactory attendance, had an acceptable level of effort and had generally exhibited loyalty to the company, the company is supposed to provide a fair pay, fringe benefits and most importantly, job security especially to employees who have served the company for a long period of time.

If the employees are dismissed and a law court rules out that a contract has been bleached, then the employees are supposed to be compensated for the loss of earnings under the breach of contract law (Keiningham &Aksoy, 2009). Although the Union enforced uniform industrial wide contractual terms, it may be forced to bend its contract law because if it does not do so, both the company and the union will bear some unbearable losses. For instance, if Marsh Company stops its operations, then it will be forced to terminate the employment its workers who have been working with the company for a long period of time. To make the matter worse, most of the employees are old and may not be able to secure employment elsewhere.

However, in dispensing Marsh Company request, the union has to consider the reaction of the other depressed companies in the industry. Therefore, to avoid this, agreement between the Marsh Company and the union should be an internal affair in the sense that other depressed companies may not see the union’s action as a favor to the company.  

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