Research Questions and Background Does trust between works councillors and managers affect their preferences for plant-level negotiations 1 compared with industry-wide or multiemployer bargaining? This is the question our article sets out to address. Our main hypothesis is that the higher the degree of mutual trust between management and works councils, the stronger the preference of both parties for plant-level bargaining. The basic rationale for this hypothesis is the assumption that trust furthers interaction between the bargaining parties (Axelrod, 1984; Thompson, Wang, & Gunia, 2010) and reduces uncertainty. This implies a higher preference for plant-level bargaining and a lower preference for supraplant-level bargaining, that is, multiemployer bargaining. We will elaborate the hypothesis and the rationale in detail below. Relationships of trust and bargaining do not exist in a social vacuum. They are rather embedded in both a legal and factual regulatory framework and a discursive context. Currently, in Germany, quantitative working conditions (e.g., the number of working hours and above all pay) are still primarily negotiated at the regional and industry levels, that is, between unions (e.g., the metal workers union IG Metall) and employers associations (in this example, Gesamtmetall for the metal industry; Keller & Kirsch, 2011, p. 209 ff.). Although some companies conclude their own enterprise or company-level agreements with a trade union, Germany has, compared with other industrialized countries, a medium (industry-or region-wide) collective bargaining coverage rate (Keller & Kirsch, 2011). In 2010, 56% of employees in western and 37% in eastern Germany were covered by industry-wide agreements (63% and 47%, respectively, in 2000; Ellguth & Kohaut, 2011). Multiemployer bargaining is still significant, but developments since the 1990s indicate an erosion of the typical German system of collective bargaining. First, the rate of employees covered by industry-or region-wide collective agreements is slowly and steadily decreasing. Accordingly, an increasing proportion of employees (7% and 13%, respectively, in 2010) work either in companies with an enterprise or company-level agreement or in companies that are not bound by any collective agreement (37% of all employees in western and 47% in eastern Germany; Ellguth & Kohaut, 2011). There are many reasons for this development, including the tendency for newly founded firms not to organize in employers' associations and for existing firms to leave them. Second, we also observe a "tacit escape from collective agreements" (stille Tarifflucht; Keller & Kirsch, 2011, p. 211), meaning that firms 425691S GOXXX10.