This study deals with the urban school system as a contracting agency which must negotiate with an organized group of employees who formerly were relatively powerless in presenting demands. The focus of the study is on the contracts drawn between the boards of education of New York City and Detroit with the respective teachers' unions in these cities following strikes in 1967-68. Part of the study deals with the impact of the contracts on teachers and principals in each city, and a search is made for some of the factors related to the climate for board-union negotiations in the two cities. A key finding of the study is that a qualitative difference in the climate for negotiations exists in the board-union relationship in each of the cities. Questionnaires completed by samples of teachers, principals, and the union's building representatives were the major instruments used to get at the questions in this study. Information was also gathered from detailed examinations of the two contracts and interviews with selected spokesmen for the boards and unions in the two cities. (Author)