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The Labor Relations Process, 10th Edition
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PART
1
Part 1 introduces the labor relations process that will be discussed throughout the
book, placing it in historical and legal perH
spectives. It also examines the difference
I
between union and management organizaG
tions and their labor relations strategies.
G
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9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
Recognizing Rights and Responsibilities
of Unions and Management
H
I
G
G
S
,
A
N
Chapter 1
G
Union–Management
Relationships in Perspective
E
Chapter 2 L
Evolution of A
Labor–Management Relationships
Chapter 3 1
Legal Influences
1
0
Chapter 4
8
Unions and Management: Key Participants in the Labor Relations
T
Process
S
Chapter 5
Why and How Unions Are Organized
3
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER
1
Union–Management Relationships
in Perspective
BOB SAT IN his office staring out the window and thinking
H
about the future. As the human resources manager of the firm,
I
Bob had just finished preparing an announcement to be sent to
G
all employees informing them that the company had just been
G competitor. After 20 years of service, Bob was
sold to a larger
very proud Sof the employee relations that existed at his
, wondered how things might change now that a
company and
larger corporation would be in charge. Although Bob’s unit was
not unionized,
A he knew that the new owner had a number of
unionized facilities
within its corporate structure. Bob had never
N
thought much
G about what it would be like to manage in a
unionized firm
E and whether the management strategies he had
relied upon throughout his career would be as effective or even
L
entirely legal. How might the labor relations process change if
A
he had to deal with employees as a group through their
selected union representative rather than as individuals? Would
there be an1effort to equalize employment terms and policies
1 and nonunion facilities of the new owner?
between union
0 already representing employees at other similar
Would unions
facilities of 8the owner now seek to organize employees at
Bob’s unit? T
While Bob had more questions than answers about
the immediate
S future, he did resolve to be proactive by
attempting to expand his current level of knowledge about the
labor relations process.
4
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
Questions
1. In your opinion, what is the biggest difference between managing
employees in a unionized versus non-union firm?
2. In your opinion, does having other unionized facilities within a corporation’s
operating units alter management’s approach to labor relations at its nonunion facilities and if so, give an example to illustrate what you mean.
oday’s global economy presents many challenges and opportunities for both employers
and employees. As organizations seek to use resources both efficiently and effectively,
there will be inevitable tension over how best to manage those assets to benefit both
H
ownership and employees. The effective management of human resources is critical to
I
maintaining an organization’s
competitiveness. Recognition of and respect for the legitimate
interests of both labor and management are an important step in building and maintaining
G
work relationships capable of adapting to change in the competitive environment facing most
G work relationships are built upon trust between ownership and
organizations. Stable
employees, which isS
reflected in both the actions and words of the parties.
Chapter 1 seeks to build a basic frame of reference for understanding the labor
relations process by, first defining the three phases of the labor relations process and then
placing this process into an analytical perspective. Chapter 1 introduces the activities, focal
point, participants, and influences of the labor relations process, which are discussed in
detail in subsequentAchapters. The chapter ends with a discussion of the current status of
union membership N
and the relevance of labor organizations in today’s economy.
T
G
Phases in the Labor Relations
E Process
The labor relationsLprocess involves managers (representing the ownership interests) and
a labor organization (union), selected by employees as their exclusive bargaining agent to
A
represent their interests engaging in the joint determination and administration of work
rules. Where employees are not represented by a union, work rules are typically determined
unilaterally by the 1
employer with the opportunity for individual bargaining between an
employee and his or her employer at the employer’s discretion. The negotiation and admin1 demonstrate considerable variation across public- and private-sector
istration of work rules
organizations in the0United States, reflecting unique aspects of each organization.
The labor relations process includes three basic phases:
8
1. Recognition of the legitimate rights and responsibilities of union and manageT
ment representatives.
Employees have a legal right to form and join a union or to
refrain from doing
S so (see Chapters 3 and 5). Labor law also sets forth the rights and
responsibilities of management and union officials to abide by applicable laws and
labor agreement (contract) terms. From a union’s perspective, phase 1 may be the
most important phase because without gaining legal recognition as the exclusive bargaining representative of a group of employees in phase 1, the process does not proceed to phases 2 and 3.
2. Negotiation of the labor agreement, including appropriate strategies, tactics, and
impasse resolution techniques. Contract negotiation involves union and management
5
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
6
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
representatives jointly determining work rules (policies) governing the parties’ rights and
responsibilities affecting wages, hours, or other terms and conditions of employment
(discussed in Chapters 6, 7, and 8). The outcomes of such negotiations have an important impact on a firm’s labor costs, management’s rights, and covered employees’ standard of living. Most interest disputes (i.e., a dispute over what the terms or conditions of
employment or work rules will be) are resolved voluntarily by union and management
negotiators during the bargaining process. Strikes, lockouts, mediation, and interest arbitration are examples of impasse resolution techniques (discussed in Chapter 9) that can
be used to resolve an interest dispute. Phase 2 of the labor relations process generally
receives the most media attention even though phases 1 and 3 are equally essential.
3. Administration of the negotiated labor agreement—the interpretation and application of labor contract terms on a daily basis. Once contract terms have been settled in phase 2, there is a need to apply those terms every day during the stated term
or duration of the labor agreement. The contract enforcement phase of the labor
relations process is generally accomplished through daily union and management
H
interactions and, when necessary, the use of a grievance-arbitration procedure to
resolve rights disputesI (i.e., disputes over the interpretation or application of a contract’s terms, discussed
G in Chapters 10, 11, and 12). Resolving rights disputes
accounts for the most time and energy spent by union and management officials in
G and usually involves a larger number of these officials
the labor relations process
than the preceding phases.
S
Of course, not all labor-management
relationships progress smoothly through these three
,
phases. Indeed, employees and their chosen union representative at some public- and privatesector organizations have a difficult time moving from the recognition of an employee bargaining representative (phase
A1) through the remaining two phases of the process.1
The phases of the labor relations process are subject to qualitative variation as well.
N organizations vary in the amount of mutual trust and
In the first phase, for example,
respect union and management
officials have for each other’s goals. In the second
G
phase, negotiations are carried out with different levels of intelligence, preparation, and
E
sincere desire to achieve results. The third phase may vary as to how well the negotiated
L and effectively administered in good faith by both parties.
labor agreement is understood
There are probably as many different relationships as there are union and management
A
officials negotiating labor agreements.
1
Elements in the Labor Relations Process
1
Exhibit 1.1 provides a framework
for the labor relations process. The elements shown
0
can be applied to the labor relations activities at a single or multiple facilities owned by
a single company, or in an8entire industry. The exhibit cites three major elements: (1) the
negotiation and administration
T of work rules, which are the focal point of labor relations;
(2) the key participants in the process, who are the union and management organizaS neutrals, and branches of government (administrative, legtions, employees, third-party
islative, and judicial); and (3) the constraints or influences affecting the parties in their
negotiation and administration of work rules.
Focal Point of Labor Relations: Work Rules
Any academic discipline needs a focal point so that research, investigation, and commentary can generate applicable insights. “Labor” or “industrial” relations can become a
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
7
Exhibit 1.1
Elements in the Labor
Relations Process
nology
Tech
La
bo
rM
ar
k
io
Product Market
z a ti o n s
gani
Or
N
at
nd
C usto m ers
et
ark
al M
nci
Fina
na
er
l Lab
or O ffic
sa
Third-Party Neutral
Government:
Executive, Legislative, Judicial
Federal
State
Local
rc
es
Oth
er
Membersh
on
ip
ni
Union
Negotiators
and
Administrators
d
a l, S t a t e, a n
Negotiation
and
Administration
C
H
I
G
on
rs
su Sto c k h o ld ers
it o
lta
p et
nts
G
m
o
C
S
,
Existence and
Particular
Content
Loc
ials
fic
Subc
o ntra cto rs
Management
Negotiators
and
Administrators
Work Rules
U
the
Eco
no
my
s
State
of
s
Sup
itor
pli
ed
Owners
er
Cr
m
e
e
g
n
a
t
n
O
a
f
M
et
Employees
o
lF
na
o
i
at
ern
Int
A
Pub
N
lic O
pinion
G
E
L
broad topic including many academic concerns. For example, sociologists have examined
A
employee alienation; psychologists have investigated causes of job satisfaction and work
motivation; economists have studied wage determination; and political scientists have
assessed the impact1of union and management as interest groups attempting to influence
government policy and legislative outcomes.
John Dunlop’s1book Industrial Relations Systems provides a useful focal point for
these diverse academic
0 approaches. Dunlop suggested that the center of attention in
labor relations should be the work rules negotiated between management and union offi8
cials. Work rules facilitate
the implementation of operational plans designed to accomplish an organization’s
strategic
goals. Work rules determine employees’ standard of
T
living and the work environment within which employees will spend a substantial porS external factors (e.g., state of the economy, technology, internation of their time. Today
tional forces) play an increased role in determining the substance and type of work rules
created by union and management representatives.
It is important to understand the influences determining the creation and particular
content of work rules.2 Work rules can be placed in two general categories: (1) rules
governing compensation in all its forms (e.g., wages, overtime payments, vacations, holidays, shift premiums), and (2) rules specifying the employees’ and employers’ job rights
and obligations, such as no employee strike or employer lockout during the term of the
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
8
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
labor agreement, performance standards, promotion qualifications and procedures, job
specifications, and layoff procedures. Additional examples of work rules are furnished
in Exhibit 1.2.
Compensation work rules, such as a negotiated wage rate, often capture the attention
of employees and the media because they are negotiation outcomes that are easier for most
people to understand and compare. Union and management officials, however, may attach
equal or greater importance to work rules regarding the second work rule category, job
rights and obligations. For example, managers might be interested in obtaining a work
rule that permits production employees to perform “minor repairs,” instead of requiring
higher-paid maintenance employees to do the tasks. Managers are often adamant about
retaining control over key operating decisions such as determining the number and types
of employees, equipment and technology decisions, geographic location of company operations, and operating hours. About 39 percent of union contracts contain limitations on the
right of management to require employees to work overtime, and some unions have
sought work rules that would change the standard work week to less than 40 hours
H
required to earn full-time pay and benefits.3 Assuming the number of employee work
hours required to meet a Ifirm’s work load is relatively stable, reducing the number of
hours considered to be an employee’s
full work week would theoretically require additional
G
employee positions or create more overtime work opportunities for union members.
Work rules can vary G
depending upon whether they are common or unique in the
subject matter addressed and
S vague or specific in the wording used to express the rule.
Because work rules are the outcome of joint negotiation between union and management
, typically gets the exact contract language it originally prerepresentatives, neither party
ferred. Compromise language is often worded more generally, which allows room for
interpretation and can lead to subsequent grievance disputes during the contract’s term
A its interpretation of contract terms through job decisions
as management implements
and that interpretation is challenged
by employees or their union representative through
N
the grievance dispute process. The wording or interpretation of work rules can also
G
change over time in response to changes in operating environments and the need for
greater flexibility.
E
For example, the work rules for airline flight attendants today would most certainly
L
differ from the following three work rules formulated in the 1930s:
A after takeoff, (2) prevent passengers from throwing lighted
(1) swat flies in the cabin
cigar butts out the windows, and (3) carry a railroad timetable in case of plane trouble.
Today, the flight attendants’ union is concerned with issues such as too much luggage
1
stuffed into overhead compartments,
which may fall and hit a passenger, and passenger
use of cell phones during flights,
which
could pose a security risk by making it easier for
1
terrorists to communicate with each other.4
0 helps to explain the complex output of the labor relations
An analysis of work rules
process. The formal labor8agreement in this sense represents a compilation of jointly
negotiated work rules. However, as discussed in Chapter 10, labor relations activities
T
are not limited to the negotiation
of work rules. The labor relations process also includes
the everyday interpretationSand application of work rules and the resolution of any disputes arising over such decisions.
Concern over health care workers’ exposure to H1N1 flu and acquired immune deficiency syndrome (AIDS) represents working conditions that create a need for appropriate work rules to limit patients’ and health care workers’ exposure. A nurses’ union could
seek to negotiate health and safety work rules aimed at protecting members from unnecessary occupational exposure or ensure the availability of appropriate treatment when
exposure does occur.5
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
Exhibit 1.2
Examples of Work Rules
Job or Industry
Classification
Work Rule
Government
Installation
The employer agrees to furnish adequate protective clothing for
employees required to work outside during rain, sleet, hail, or
other atmospheric conditions detrimental to health or safety,
provided the employee subjected to such assignments normally
and historically performs the majority of his work assignment
indoors. Employees who normally perform a majority of their
work outdoors shall furnish their own protective clothing.
Electricians
Where the work assignment of employees who have been
assigned a permanent reporting location requires travel to and
between other work locations and/or return to their permanent
reporting location, the time consumed by the employees in such
travel shall be counted as time worked.
H
I
G
G
S
Communications
,
Health Care
Professional
Baseball
Television
Manufacturing
Cemeteries
A
N
G
E
L
A
1
1
0
8
T
S
In situations where a department head determines that it is
necessary for an employee to use bilingual skills, those
employees who have been previously determined to possess
those skills at a level necessary for the assignment, and who are
so assigned by the department head, shall be eligible to receive
additional compensation of 3 percent above the applicable pay
rate for the time period of the assignment.
The company subscribes to the principle that a well-informed union
leadership promotes harmony and efficiency in union–management
relations. The company agrees to notify the union of any proposed
changes affecting rates of pay, hours of work, and other conditions
of employment. It is understood that the company has the sole
right to institute all such changes as it may consider necessary,
subject to the terms of this agreement. The union agrees to cooperate with the company at all times in maintaining a high degree of
service to its customers and through conscientious endeavor and
application of effort to strive for the lowest possible costs.
The player and the club recognize and agree that the player’s participation in certain other sports may impair or destroy his ability
and skill as a baseball player. Accordingly, the player agrees that he
will not engage in professional boxing or wrestling, and that except
with the written consent of the club, he will not engage in skiing,
auto racing, motorcycle racing, sky diving or in any game or exhibition of football, soccer, professional league basketball, ice
hockey, or other sport involving a substantial risk of personal injury.
The latest version of the script will be made accessible to the
player in the casting office 24 hours in advance of a scheduled
reading or immediately after the scheduling of the interview,
whichever occurs last.
When employees are called to work at a time other than their
regular reporting time, and after having clocked out, they shall
be paid two hours plus one and one-half their straight time rate
for all hours worked, but in no event will less than four hours at
the straight rate be paid.
In all cases where a grave is dug straight down, a second person shall be assigned to assist the digger after a depth of five
feet is reached.
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
9
10
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
Companies and unions are also negotiating “no-smoking” rules in the workplace both
as a health benefit and a means of reducing health care costs associated with smokingrelated insurance claims. In 1908 a Columbia University professor insisted that “the deleterious effects of tobacco are greatly exaggerated,” a belief that prevailed for the next 70
years.6 Now, union and management officials and possibly arbitrators at thousands of
facilities jointly determine whether the issuance of a no-smoking policy is reasonable and
whether an employee was properly disciplined or discharged for violating the rule.
A majority of employers engage in one or more forms of electronic monitoring of
employee work performance.7 Computer monitoring software, bar code scanners, and
pressure-sensitive plates have enabled management to monitor employee performance in
various ways, such as counting the number of key strokes made on computer keyboards,
listening to employees’ telephone conversations with customers, or viewing computer files,
e-mail messages, and Internet connections on company computers. Employers have a legitimate interest in evaluating employees’ work performance and in seeking to eliminate illegal employee misconduct as well as protecting their company’s trade secrets and business
H
reputation. Employees have a legitimate interest in ensuring that their union representatives negotiate appropriate Iwork rules to govern the time, place, and method of such electronic monitoring as well as
Gthe use of such information to reward or penalize employees’
work performance.
G
S Labor Relations Process
Key Participants in the
Through the organization’s,structure, managers represent the interests of the ownership as
well as their own self-interests. Managers include individuals who are delegated authority by
the ownership to make decisions required to operate the organization and exist at various
A from first-line supervisors or department heads to the highest
levels within the organization
ranking management official
N(e.g., chief executive officer). Labor relations managers are typically found at corporate, divisional, and plant levels. Companies with both represented
(union) and unrepresentedG
(nonunion) employees or facilities often prefer the term human
resources manager rather E
than labor or industrial relations manager. Organizations that
operate different facilities in different geographic locations may emphasize standardizing
L
some work rules (e.g., management
rights) at all locations while insisting that other work
rules, such as a wage rate for
A a particular job classification, be based on local labor market
conditions that would not adversely alter precedents or conditions set at another facility.
Plant-level labor relations managers implement these “corporate” directives, but they
must also deal with other1managers at each facility’s location (particularly production
and maintenance managers and first-line supervisors) who direct the daily work activities
1
of hourly employees.
0
As will be further discussed
in Chapter 10, first-line supervisors or department
heads typically hear and 8
attempt to resolve employees’ grievances on the production
floor. In some cases, lower-level managers are surprised to learn that higher-level manT
agement officials have overturned
their decisions. Alert union leaders may use dissension
or lack of clear communication
among
different levels of management officials to influS
ence labor relations activities and the company’s position toward unions.
Management consultants are individuals hired from outside the organization to provide some special service or expertise. The activities of management consultants in the
labor relations process are varied and sometimes controversial, ranging from restructuring personnel practices in nonunion firms (in the absence of any active union-organizing
campaign) to designing and presenting the employer’s response throughout a formal
union organizing campaign. Controversy occurs over the consultants’ effectiveness and
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
11
ethics. One union estimate found that consultants were involved in 75 percent of unionorganizing campaigns.8 “Employers who make threats of plant closings are more likely to
hire outside consultants, discharge union activists, hold captive audience meetings and
supervisor one-on-ones, establish employee involvement committees during the organizing campaign, make unilateral changes in benefits and/or working conditions, use bribes
and special favors, use electronic surveillance, threaten to report workers to the INS, and
show anti-union films.”9 Research does show that the use of a management consultant
can reduce the probability of a union win in very closely contested elections, but it does
not appear to be as big an influence on union election outcomes as some other factors
such as election-unit size or relevant labor market conditions.10
Effectively managing an organization’s labor relations is an important part of the
ownership goal of being competitive in the industry or market. Organizations with a
quality labor–management relationship may gain a competitive advantage over firms
that lack the ability to gain cooperation and consensus from employees necessary to
effectively implement change to meet new competitive pressures.
H
Union representatives, usually elected by the members to represent their employment interests, areI a second key participant in the labor relations process. As elected
representatives, union
G officials must consider the varied and sometimes conflicting interests of individual employees within the bargaining unit seeking to build a consensus for
G the majority of constituents. Unlike managers who are appointed
decisions that benefit
by higher-level managers,
union officials are subject to the political pressure of majority
S
rule if they wish to be re-elected to a union leadership position in the future. Unions as
,
democratic organizations
do experience internal differences of opinion on policies and
priorities that union officials must learn to effectively manage. Every union has its own
history, traditions, personalities, and accepted practices that can lead to observed differences across unionAorganizations as well as within a particular union. While different
unions may share common
interests and positions on many issues of common concern,
N
each union tends to value maintaining its own independence and sense of selfG
determination in representing the interests of its membership.
Certainly someEof the most significant participants in the labor relations process are
nonmanagerial employees because they often determine whether a union is even present
L
in an organization (representation elections and union organizing drives are discussed in
Aa negotiated labor agreement is accepted or rejected, and the extent
Chapter 5), whether
to which a threatened strike is actually carried out (see Chapter 9).
Employees are treated here as a separate category because they may demonstrate
1 their employer and union organization.11 Most employees want
dual loyalty to both
their organization 1
to be successful but also value the ability of their union to voice
employee concerns to managers or demand that employees be treated fairly both in compensation and work0activities. For example, public employees such as firefighters, police,
and teachers may feel
8 torn between the critical or professional nature of their jobs and
the strategic advantages of a strike. Auto workers may agree that operating costs, includT be reduced for their employer to remain competitive. Yet they
ing labor costs, must
expect their union S
representative to ensure that when profitability improves employees
will fairly share in that improvement. Employees’ varied interests help shape the existence and content of particular work rules and thus employees are considered a third
key participant in the labor relations process.
The government acting through its different branches—executive, legislative, and
judicial—at the federal, state, and local levels represents a fourth key participant in the
labor relations process. As discussed in Chapters 2 and 3, the government’s role in regulating labor relations has gradually increased over time as the importance of labor
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
12
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
relations to the effective functioning of the economy has become more apparent. In the
public sector, government officials also serve as managers in the labor relations process,
representing both taxpayers and the general public’s interests (discussed in Chapter 13).
In the private sector, the federal government has traditionally played an indirect role
in determining the outcomes of work rule negotiations, preferring to allow union and
management representatives to determine such work rules through the bargaining process. Governments in many other industrialized countries (see Chapter 14) take a much
more active role in both regulating and determining the outcomes of specific work rules
(e.g., amount of paid vacation time). The federal government’s hands-off approach in
most private-sector bargaining situations is based on the belief that most management
and union officials are better equipped than their government counterparts to assess
their needs and limitations and reach a mutually acceptable labor agreement.
Although the federal government does not dictate the terms of a negotiated labor
agreement, laws, judicial decisions, and administrative agencies, such as the National
Labor Relations Board (NLRB), can influence work rules and the ability to exercise legally
H
granted rights. For example, legislation to deregulate the trucking and airline industries
has contributed to reducedI union membership and economic gains for employees.12 The
Age Discrimination in Employment
Act prohibits union and management officials from
G
negotiating a mandatory retirement age of 60 years. Although some coal miners have
long believed that females G
working in mines would be bad luck, union and management
officials would be violatingSsexual discrimination aspects of the Civil Rights Act if they
negotiated a provision prohibiting female employees from working in mines.
, mediators and arbitrators) represent a final key participant
Third-party neutrals (i.e.,
in the labor relations process. Differences between union and management officials that
arise in negotiating the terms of a labor agreement (interest disputes) or administering its
provisions (rights disputes)A
are often resolved with the aid of a third-party neutral. Mediators (discussed in ChaptersN9 and 13), often supplied by the Federal Mediation and Conciliation Service (FMCS) or a state or private mediation agency, may be used to help
G
resolve interest disputes during contract negotiations. The mediator assists the union and
management officials to clarify
E and resolve their differences, thus promoting a voluntary
settlement. The mediator does not possess any binding legal authority to require the parL
ties to settle an interest dispute, but he or she will offer advice to help each party assess its
own priorities and the costsAor risks associated with failing to reach a voluntary agreement.
An arbitrator is a third-party neutral hired by union and management representatives to make a final and binding decision on a disputed issue. While final and binding
1 be used to resolve an interest dispute (see Chapter 9), most
arbitration may occasionally
often it is used to resolve rights-type
disputes arising during the term of a labor agreement
1
over the interpretation or application of the contract’s language (see Chapters 11 and 12).
0
8
Three Basic Assumptions Underlying U.S. Labor Relations
T
To better understand the U.S. labor relations system and the actions of its participants, it
S
is helpful to bear in mind certain underlying assumptions that affect the thinking and
behavior of most individuals within the system. Whereas the degree of support by some
participants for these three basic assumptions has varied over the course of U.S. labor
history, these assumptions have been the basis for a majority consensus for many years.
First, the adoption and support of a free enterprise (capitalist) economic system in
the United States creates an inherent conflict of interest between employers (owners) and
employees. Both employees and employers seek to advance their own self-interests.
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
13
Employers seek to maximize their return on capital invested, while employees seek to
advance their pay, working conditions, and job security. Most of the interests employees
seek to advance through the collective bargaining process represent an increased cost to
the employer which, unless offset by cost savings elsewhere or higher productivity, may
reduce the investment return desired by ownership. This creates a natural tension within
a capitalist economic system between the pursuits of employees’ and employers’ legitimate interests. Such conflict should not be viewed in a negative light but rather as simply
a reality of business operation which must be managed effectively. The presence of some
degree of inherent conflict between employer and employee interests should also not be
viewed as precluding opportunities for cooperation between the parties. Both employees
and employers share a common interest in ensuring that the organization is competitive.
Maintaining a sufficient number of qualified and motivated employees is necessary for
an employer to attain desired organizational goals (e.g., productivity, product or service
quality). Profits in turn permit an organization to provide competitive wages, benefits,
and working conditions to help ensure the recruitment and retention of qualified
H
employees. Ideally, employees perceive their own self-interest as best advanced by seeking to advance the Iinterests of the organization as a whole.
A second underlying
G assumption of the U.S. labor relations system is that employees
in a free and democratic society have a right to independently pursue their employment
G means. Employees should have a right to determine for themselves
interests using lawful
what is in their bestSinterests and to pursue means of attaining such interests so long as the
goals pursued and tactics used are legal. Only by allowing individuals to pursue their legitimate interests can ,a society foster the necessary support for prevailing economic, social,
and political systems used to sustain the country. Employees may choose to pursue their
legitimate interests on an individual basis or collectively by joining a labor organization.
A assumption of the U.S. labor relations system is that collective barA third underlying
gaining provides a N
process for meaningful employee participation through independently
chosen representatives in the determination of work rules. Employees in the U.S. labor
G
relations system are not required to form or join a labor organization for the purpose of
engaging in collective
E bargaining, but they are permitted to do so when a majority of the
employee group expresses such a preference. In the absence of collective bargaining, indiL
vidual bargaining may occur between an employer and his or her employee. Labor history
A
suggests that most employees
are at a relative bargaining power disadvantage in individual
bargaining when confronted with the greater resources of their employer, but each
employee is free to determine the degree of satisfaction that his own individual bargaining
1 Many unrepresented employees, for a variety of reasons, do not
experience provides.
attempt to engage in
1 individual or collective bargaining, thereby permitting the employer
to unilaterally (without bargaining) establish work rules, setting the terms and conditions
of employment. In0limited cases, employment terms may be mandated by government
action (e.g., minimum
8 wage law, safety, and health standards).
Exhibit 1.3 presents a list of some basic characteristics of the private-sector U.S.
T These characteristics will be discussed in further detail throughout
labor relations system.
the text.
S
Constraints or Influences Affecting Participants’ Negotiation and
Administration of Work Rules
The labor relations participants who affect the development of work rules are influenced
by external variables or constraints in their labor relations activities (see the outer circle
of Exhibit 1.1). These constraints and influences can sometimes affect one another and
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
14
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
Exhibit 1.3
Basic Characteristics of the
U.S. Private-Sector Labor
Relations System
•
Primarily a bilateral process (union and management) governed by a framework
of labor laws. For example, the Labor Management Relations Act (LMRA),
Labor Management Reporting and Disclosure Act (LMRDA), Railway Labor Act
(RLA), Occupational Safety and Health Act (OSHA), Family Medical Leave Act
(FMLA), Employee Retirement and Income Security Act (ERISA), Americans
with Disabilities Act (ADA), Norris-LaGuardia Act, and anti-discrimination laws.
•
A highly decentralized bargaining structure that results in a large number of
labor contracts negotiated most often between a single employer and a specific union to cover a defined group of employees (bargaining unit) at a specific
geographic location.
•
Recognition of the key legal principles of majority rule and exclusive bargaining
representation. No union can gain the right to represent a group of employees
for purposes of collective bargaining without first demonstrating the majority
support (50 percent + 1) of the employees in that group. Once recognized,
the union is the only
H legal representative authorized to negotiate work rules
with the employer to establish the work group’s terms and conditions of
I
employment.
•
Permits the use of G
economic pressure (e.g., strike, lockout, picketing, and boycott) to aid the parties (union and management) in reaching a voluntary negotiG
ated settlement of interest disputes over what the terms and conditions of
employment will be.
S
•
Encourages the use, of final and binding arbitration, if voluntary grievance negotiation efforts fail, to resolve rights disputes that arise during the term of a contract over the interpretation or application of the labor agreement’s terms.
•
Characterized by significant
employer opposition to employee efforts to orgaA
nize and bargain collectively through representation by an independent labor
Nemployees themselves.
union chosen by the
G
E
may relate to a particularLfirm, local community, or society in general. The following
discussion furnishes a few illustrations of how these constraints and influences can affect
A
the existence and content of work rules.
State of the Economy: National, Industrial, and
1
Firm-Specific Indicators
The state of the economy is1usually referred to by indicating movement among such quantitative indicators as inflation,
0 unemployment, and productivity. During the 1980s, the
United States witnessed a rising inflation rate, which influenced the negotiation of work
8
rules—notably, union insistence
that a labor agreement include provisions to increase
wages if increases occur inT
the cost of living (see Chapter 7). In the early 1990s, the focus
of negotiations was on wage increases, enhancing employee benefits, and containing rising
S with slow economic growth, low inflation, and rising job
health care costs. More recently,
losses, union and management negotiators returned to an emphasis on job security and
other job protection issues. Many employers, citing competitive pressures, have successfully
negotiated labor cost reductions involving wages, benefits (e.g., pensions, health care), and
inefficient work rules (e.g., restrictive job descriptions).
Two other economic indicators that can affect work rules are interest and unemployment rates. An increase in interest rates could slow home and industrial construction projects. The Federal Reserve Board voted to raise interest rates 17 times between
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
15
June 2004 and June 2006 out of concern that too rapid economic growth might trigger
an increase in consumer inflation.13 More recently, the Federal Reserve Board has cut
interest rates to historically low levels in an effort to spur economic growth by making
capital more available at reasonable cost. If employees’ wage gains do not at least match
the rate of increase in consumer prices (inflation rate), the purchasing power of employees declines, adversely affecting employees’ standard of living. If interest rates are raised
to fight inflation, employees will pay more for consumer debt (e.g., credit cards, auto or
home loans). A union might respond to such a rising interest/inflation rate environment
by seeking to negotiate pay improvements that exceed the rate of inflation as well as by
offering group discount rates to members on benefits such as credit cards or various
types of consumer loans. In a low interest/inflation rate environment, a union might
focus more on job security issues knowing members are more likely to be satisfied with
moderate wage and benefit improvements that match the low inflation rate.
The unemployment rate affects work rules that provide job protection. Chapter 6
discusses ways in which the unemployment rate can affect the bargaining power of
H
union and management officials. If this and other economic measures pertaining to the
I productivity, cost of living, compensation at all employee levels,
gross national product,
and exports and imports
G are unfavorable, unions will be more likely to accept bargaining
concessions. By the same token, strong product sales, economic growth, and low unemG
ployment tend to strengthen
union bargaining power as employers have more reason to
compromise to avoid
S any disruption in the production of current products or services.
The National Bureau of Economic Research has determined that the most recent
recession affecting ,the U.S. economy began in December 2007 when the national unemployment rate was 4.9 percent.14 By October 2009 the national unemployment rate had
risen to 10.2 percent, the highest rate since the recession in the early 1980s. By June 2010
the unemploymentArate had declined to 9.5 percent, representing 14.6 million individuals.15 An additional
N 1.2 million individuals were classified as discouraged workers
who had given up searching for a job because they believed no jobs were available for
G
them. While unemployment rates are expected to continue to decline as economic recovery occurs, the decline
E is expected to be gradual, extending over several years, as employers are typically reluctant to add new jobs until the recovery in product and service
L
demand is well established.16
Alevels, and availability of employees in a relevant labor market can
The skills, wage
affect negotiated work rules. Management is often concerned with ensuring that an adequate supply of labor of the skill levels required to operate is available in a particular com1 a firm needing skilled employees from a relatively low-skilled labor
munity. For example,
market supply would
1 probably wish to negotiate work rules regarding apprenticeship programs or other forms of job training. Management would also consider negotiating a rea0
sonable employee probationary
period (e.g., 60–120 days) within which it could terminate
a union-represented8employee who cannot learn the job and perform adequately, with no
union right to protest the action through the labor contract’s grievance procedure.
One example T
of a labor–management cooperative effort to assist employees in
adjusting to changes
S in labor market forces is the Alliance for Employee Growth and
Development, Inc., created in 1986 as a joint enterprise by American Telephone & Telegraph (AT&T), the Communication Workers of America (CWA), and the International
Brotherhood of Electrical Workers (IBEW) to help displaced workers. Today the Alliance
also includes employers Alcatel-Lucent, OFS Optical Fiber, and Avaya.17 The Alliance
has provided training and development services to more than 173,000 individuals, helping to prepare them to handle new technologies, job skills training (e.g., technical, customer service, teamwork), and career transition training. Other outstanding examples
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16
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
include the United Auto Workers (UAW)/General Motors Skills Centers and the joint
training programs of Ford Motor Company and the UAW. In the building trades, unions
have played a major role in training skilled workers. Because workers move from
employer to employer on a regular basis, single construction companies have less financial incentive to train employees who may end up working for a competitor. Therefore,
the unions, through their training and apprenticeship programs, provide an obvious contribution to the general national welfare. In fact, unions and their contractors outspend
their nonunion counterparts by a ratio of 50 to 1 in training investments.18
Both management and union representatives should share an interest in establishing
competitive compensation rates for comparably skilled employees within a relevant
external labor market and internally within the firm itself. A job with higher skill or
responsibility requirements should earn a higher compensation rate than jobs with less
skill or job responsibility requirements. In some cases where the employer faces significant labor cost competition from nonunion or foreign employers, a union may have to
agree to compensation or other flexible work rule changes that will permit a unionized
H
employer to remain competitive in pricing goods or services sold in the firm’s product or
I
service markets.
The labor relations process
G can be affected by the product or service market where
the company either sells its product or purchases key elements required for production
of its products or services.G
Management would be more vulnerable if a strike occurred at
a time when major customer
S sales were anticipated or on-time delivery of promised
goods was critical to meet a customer’s needs. For example, management at a brewery
, agreement expiring, possibly leading to a strike, during
would prefer to avoid a labor
the summer months, when significant beverage sales are anticipated. A public school system would much prefer a contract expiration date in early summer after the regular
A than risk a possible work stoppage disruption if the conschool year has ended, rather
tract expiration date coincided
N with the first day of the new school year.
A second dimension of the product market, the source of key elements for product
G
manufacture, can be a factor affecting union members’ perceptions of job security. For
example, the United AutoE
Workers (UAW) union is concerned over the fact that many
of the parts utilized in U.S. automobiles are being manufactured in other countries, creL
ating job opportunities for foreign workers but not for UAW-represented employees.19
A
Another important consideration
in the labor relations process is the financial
market, the arena in which the employers (and unions) seek to borrow funds to finance
their investment strategies. Companies must consider exchange rate money value differ1 affect the profitability of plant location and sales marketences among countries, which
ing decisions. Exchange rates
1 between countries (see Chapter 14) can alter companies’
investment strategies because exchange rates affect comparative wage rates and, consequently, the comparative 0
labor costs of production. As an example, when the peso in
Mexico was devalued by as8much as 50 percent of the U.S. dollar, the labor costs of production in Mexico declined dramatically and made producing goods in Mexico more
attractive and economical T
for multinational corporations. A strong euro currency valuation in comparison to the U.S.
S dollar helped drive up labor production costs in European
countries such as Germany, encouraging automakers such as Daimler AG (Mercedes)
and Bavarian Motor Works (BMW) to build production plants in the United States.
When a company wants to expand its plant capacity and increase jobs, it often has
to borrow money in the financial markets at the same time it may request wage concessions from a union (see Chapter 7) or request the elimination of work rule restrictions
to improve productivity (see Chapter 8). Unions must be able to perform financial
valuation analysis to support, for example, an employee stock option plan (ESOP)
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CHAPTER 1 • Union–Management Relationships in Perspective
17
(see Chapter 7), or anticipate the advantages or disadvantages of the sale or merger of an
existing employer’s operations with another competitor or private equity fund from the
perspective of union-represented employees.
Labor unions have been able to use their financial resources and become active in
the financial markets as a source of capital. With U.S. employee pension funds valued
in excess of $7 trillion, many unions believe that decisions on how to invest those
funds ought to take into consideration the effect of capital investments on the economic
and job security interests of union members.20 The United Steelworkers have created a
regional investment fund of $100 million called the Heartland Labor Capital Project,
which has the following objectives: (1) invest in regional business and protect jobs, (2)
promote economic awareness as well as training workers and unions and raising the
level of influence on economic development, (3) stimulate regional economies, (4)
encourage regional business enterprises by involving both labor and its allies to support
institutional development, (5) provide capital to enterprises where unions have created
more democratic and sustainable practices, and (6) provide prudent returns to invesH
tors.21 Other unions, including the American Federation of Labor-Congress of Industrial
I
Organizations (AFL-CIO),
have similar programs to promote jobs for union members.
Perhaps the most
immediate
and persistent influence on the creation of work rules is
G
the technology of a particular workplace. Technology has four dimensions: (1) equipment
G (2) the pace and scheduling of work, (3) characteristics of the work
used in the operation,
environment and tasks
S to be performed, and (4) information exchange. Consider, for
example, the major equipment found at a steel mill blast furnace, which requires a very
, operation. Such a furnace cannot simply be turned on and off like a
high temperature for
household oven. Often several days are required for either reaching the high operating
temperature or for cooling the furnace for maintenance. This equipment characteristic
affects the facility’s A
work rules. In essence, steel mills must operate 24 hours a day, 7 days
a week—a situationN
prompting related work rules, such as wage premiums for working the
night shift, weekends, or holidays. Other continuous operating organizations like hospitals,
G
hotels, or large retail centers may face similar work rule issues.
In some cases E
the introduction of equipment reduces or eliminates employees in a
particular job classification. This situation occurs when industrial robots handle tasks
L
formerly performed by employees. A rather common application occurs in the auto
A
industry, where mechanically
joined arms perform spot welding, spraying, machine
unloading, and assembly. Unions faced with having membership replaced by robots
have increased related bargaining demands to protect their members’ job security such
as more paid time1off; fewer hours comprising a regular work week (e.g., 35 or 38
hours versus a 40-hour
1 week); or job transfer or retraining rights, enabling displaced
workers to fill available vacant employment opportunities.
Technological 0
advances in computer and communications have made many professional jobs (e.g., accountanting,
engineering, and radiology) capable of being outsourced
8
to workers at outside firms and even in different countries. Some workers benefit from
T while others may lose their job as their employer seeks to reduce
new job opportunities
labor costs by outsourcing
work formerly performed by its own employees.
S
Changes in technology have raised the level and type of skill requirements for many
workers. While most competing firms have access to the same technology, the ability to
apply that technology using the skills and brainpower of their employees ultimately determines whether any real competitive advantage is achieved. Technology improvements have
created a greater demand for more highly skilled workers who are able to assume multiple
responsibilities while reducing the demand for strictly manual labor. Although both profits
and productivity growth have improved, average real hourly compensation for American
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18
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
workers has not changed significantly over the last 20 years, creating increasing stress on
workers seeking to maintain a middle class standard of living.22
Technological change can also result in certain jobs requiring fewer skills to perform. In the supermarket industry, electronic scanners are used to change item prices,
record customers’ purchases, and maintain product inventory counts. These activities
result in a need for fewer employees to stock shelves and reduced skill requirements
and compensation for cashiers.
The pace and scheduling of the workday also affect the work rules of certain occupations. For example, bus companies optimizing their productivity and revenue would
concentrate on rush-hour traffic (6:00–9:00 A.M., 3:00–7:00 P.M.) when buses are likely
to be filled with passengers. However, problems would remain in scheduling work
because many bus drivers might have a daily eight-hour work schedule of three hours
on, three hours off, one hour on, two hours off, and four hours on. Because of the nature
of the work, most labor agreements in related industries have provisions pertaining to
the permissible number, length, and possible compensation of intervals (times off)
H
between daily work assignments.
Computer operations Ican help both union and management officials in their daily
labor relations activities. Union
G officers can use computer applications to maintain membership and dues records, as well as word processing for communication to the memberG officials can also use computer applications in the areas of
ship. Union and management
contract negotiations (costing
S the various proposals, writing contract language) and
administration (maintenance and research of grievances and arbitration decisions).23
,
Union officers can use computer
applications to maintain union records, for training
union members, and for communicating with the union’s membership.24 E-mail, Internet, and Web pages are used to keep employees and union members informed of progress during negotiations. A
Also, both unions and management frequently use these
communication tools during
N union organizing campaigns. (See Chapter 4, which discusses how unions use computer technology.)
G
The American Federation of Labor–Congress of Industrial Organizations (AFL-CIO)
has introduced two computer
E information networks, Labor-NET (for members only) and
Labor-WEB (public access), for accessing the organization’s new home page’ on the
L
Internet, which will enable practitioners and students of industrial relations to become
well informed on current A
developments.25 One AFL-CIO official contends that labor’s
message will be communicated to more people because most American families have
computers at home or have access to computers at their work site. Many students need1 relations topics for a class assignment may find the “Labor
ing to research current labor
Relations in Action” box in
1 this chapter helpful.
0
8 economy, both labor and management must continuously
As participants in the global
monitor international developments
and trends to determine how their respective interT
ests may be affected and how best to respond. Many U.S. firms are dependent on foreign
S profits. The international financial crisis in recent years
sales or production to generate
International Forces
has affected U.S. and foreign currency values as well as the availability and costs of necessary operating capital.26 A declining U.S. dollar value may make U.S.-produced goods
and services cheaper to export but drive up the cost of imported goods and services. A
recession in other countries may reduce the demand for U.S. goods and services in those
countries, thus adversely affecting employment levels at U.S. exporting firms.
The wars in Iraq and Afghanistan have affected thousands of Americans, including
union members called up as reservists. Although companies are required to retain the
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
19
reservists’ positions, some companies may be reluctant to hire and train new employees
who may have to be laid off upon return of the reservists. Instead, companies may require
other employees to work more overtime or temporarily reclassify employees (through promotions or transfers) to fill the positions left vacant by the call-up of the reservists.
Unions are concerned about the job security and economic impact of “free trade
agreements” such as the North American Free-Trade Agreement (NAFTA; discussed
more in Chapters 2 and 14) involving the United States, Canada, and Mexico. While
imports from Mexico have clearly increased the U.S. trade deficit with Mexico since the
enactment of NAFTA, the effect of NAFTA on U.S. employment and wages tends to be
less clear.27 Unions tend to stress “fair trade” rather than “free trade” in discussing ways
to ensure that domestic companies can compete effectively in global markets. In addition
to fostering more cooperation with foreign-based labor organizations, U.S. unions also
seek to promote policies aimed at raising pay, working conditions, and environmental
and safety standards applicable to workers in foreign countries.28 Not only does such
an approach serve to raise the living standards of workers in their own countries, it
H
also serves to reduce the labor cost advantage of moving work done by U.S. workers to
I thus enhancing job security for U.S. workers.
those foreign countries,
International trade
G is a major influence in the labor relations process. Imports and
exports, trade deficits, exchange rates, capital investments, and jobs are interconnected.
As an example, theGU.S. trade deficit with China increased from $6 million in 1985 to
29
$227 billion in 2009.
U.S. Treasury notes, China
S Using trade surplus funds to purchase
has become the U.S. government’s largest foreign creditor.30 Some economists believe that
China’s currency is, undervalued by 25 to 40 percent.31 Coupled with a low-wage workforce, this provides China with a competitive advantage in trade with the United States.
Major retailers, such as Target, Best Buy, and Wal-Mart, depend on low-priced
A These imports help to keep inflation rates low and have helped the
imports from China.
Federal Reserve to keep
N interest rates in the United States at their lowest levels in four decades.32 A strong U.S. dollar has made imports appear cheap and has contributed to the
G
growing U.S. current account deficit (mainly comprised of the trade deficit but including
capital income and E
transfers). “With large and persistent external deficits, the United States
has swung from being the world’s largest creditor nation to its largest debtor, with net forL
eign liabilities now at about one-fourth of GDP (gross domestic product).”33
A globalization has been characterized as free-market capitalism,
The trend toward
which places enormous competitive pressures on all firms that become part of the global
economy. Multinational firms that sell globally are pressured to produce globally by seg1
menting their production
chains and outsourcing each segment to the country that can
produce cheapest and
most
efficiently. Newly industrialized countries are able to com1
pete in price-conscious markets by paying lower wages, offering fewer benefits, and pro0
viding less ideal working
conditions than those available in the United States. In
addition, due to the8diversity and customization made possible by computer-based technology, the cost advantages of American-style mass production have been reduced.34
Labor unions T
have been active in the international arena since their beginning.
American labor unions
S have a long history of resisting the importation of foreign products. Over the last two centuries, organized labor has been one of the more protectionist institutions in America. This position should not be a surprise because unions are
democratic organizations that must reflect the interests and needs of their members,
many of whom believe that their jobs are endangered by foreign imports. Most union
members have little inclination to accept assurances that they will find another comparable job or that, in the long run, everyone will be better off. Organized labor unsuccessfully opposed trade legislation such as NAFTA and has consistently encouraged
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
LABOR RELATIONS IN ACTION
Getting Online with Labor Relations Research
The number of electronic sources for locating information on collective bargaining and labor relations is constantly increasing. The most efficient method for finding
reports in journals, magazines, newspapers, and other
periodical literature is through the use of online research
databases, which are offered by most university and
college libraries to their students, faculty, and staff
members. You will choose your sources depending on
the time period you want to cover, the amount of information you need, and the availability of resources in
your area. Libraries still maintain a collection of print
indexes, but most of these are being replaced by online
versions, which allow for faster searching and less
H
maintenance by the library.
Online databases have several advantages over
I
print indexes, including currency, the ability to print in
a variety of formats, the ability to combine terms and
G
other qualifiers (e.g., date, language, and publication
title) to broaden or narrow a search, the abilityG
to
e-mail or download articles, and availability by remote
S
access. A few disadvantages are the commitment of
time to become skilled in their use, the availability, of
only selected content in some databases, and overlapping titles from database to database.
A
Subscriptions to online databases that provide
access to indexing or the full text of articles on business
N
topics are being sold by a number of vendors, including
LexisNexis, ProQuest (formerly University MicrofilmsG
or
UMI), OCLC (FirstSearch), Gale (part of Cengage Learning, formerly Thomson Learning), EBSCO, and H. E
W.
Wilson. Databases specifically devoted to labor relations
L
cases and issues are provided by the Bureau of National
A
Affairs (BNA) and Commerce Clearing House (CCH).
Most of these databases are provided through the Internet, although there are a few that are still available electronically only on CD-ROM.
1
Online databases that can be searched from univer1
sity and college libraries also can usually be searched
from a dorm room, home, or office with appropriate
0
user authentication. Until a few years ago, the content
8
of many of these databases was available only through
mediated searches requested by a student or faculty
T
member and performed by a librarian, who would then
pass on the cost of the search to the requestor. These
S
costs included a connection fee, ranging from $1.60 to
$2.20 per connect minute, and charges for each record
displayed, ranging from $0.50 per record to $1.40 per
record. Web-based electronic resources have virtually
eliminated the need for mediated searches and allow
students to perform free searches with or without the
assistance of a librarian.
General business indexes are extremely useful in
locating articles on labor relations. Business Periodicals
Index, published by the H. W. Wilson Company, is a
print index that is still found in most libraries and, for
many years, was the only business index likely to be
found in a small library. The online version of the index
is Wilson Business Abstracts, which includes indexing
and abstracting of the Wall Street Journal and the
business section of the New York Times, as well as
more than 600 publications that date back to 1952.
Wilson Business Full Text provides access to full text
articles in more than 350 publications that date back to
1995.
Other general business periodical databases that are
useful for finding trade publications are ABI/INFORM
Trade and Industry (ProQuest), Business and Industry
(Gale RDS), Business and Management Practices (FirstSearch), and the Business News portion of LexisNexis
Academic. Trade journals such as Automotive News,
Supermarket News, Editor & Publisher, and Modern
Healthcare can provide related insights into labor
issues and unions such as the United Autoworkers
(UAW), United Food and Commercial Workers (UFCW),
Newspaper Guild, and American Nurses Association,
respectively.
ABI/INFORM Global, produced by ProQuest, was
one of the first electronic databases to provide an
index to the scholarly literature of business, although
coverage is not limited to scholarly titles. Coverage
also includes general business magazines and trade
periodicals. ABI/INFORM contains abstracts and fulltext articles published from 1971 to the present.
Recently, ProQuest began to offer ABI/INFORM
Archive, which provides full-text articles published
from 1918 to 1986. EBSCO Business Source Premier
is another comprehensive business periodical database that offers 2,300 scholarly journals and general
business periodicals, including Business Week,
Forbes, Fortune, American Banker, and many others.
EBSCO has exclusive rights to the electronic version
of Harvard Business Review.
Newspapers are an excellent source of business
information because of the detailed analysis of events
not often found in other periodical literature. Because
newspapers are often published daily, they offer the latest news about ongoing labor negotiations or work stoppages. Citations to articles in leading newspapers may
20
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
be found in print indexes, whereas a rapidly increasing
number of electronic indexes provide the complete text
and indexing of national and regional newspapers. The
major publishers of online full-text newspapers include
Knight-Ridder, LexisNexis, Newsbank, and ProQuest.
Many major newspapers maintain online Web sites
that offer free access to many stories (e.g., the
Washington Post, USA Today, Detroit Free Press, and
Los Angeles Times). The text of the Wall Street Journal
is offered by several sources, and students can also
sign up for a subscription to the online WSJ, which
includes articles not found in the print copy of the newspaper. WSJ offers a special subscription for professors
H site at
and students, which can be found on its Web
http://www.wsj.com.
I
LexisNexis Academic and Business Newsbank
Plus are reliable sources to consult for articles
G from
regional newspapers about a particular event published
in the city or region where the event took place. The
regional publications often offer a different perspective
from that of a national newspaper.
The Daily Labor Report, published by The Bureau of
National Affairs in both print and online versions, is
extremely useful in researching current labor relations
topics. Coverage includes legislation pending in Congress, discussion of court cases, bargaining settlements, statistical information, and other items relating
to labor. BNA also publishes the Labor and Employment
Law Library, providing the full text of labor and employment cases and manuals for answering day-to-day labor
and employment law questions. Exploring the Web
Internet exercises at the end of each chapter in this
book should also be helpful in exploring different labor
relations topics further.
G
Congress to ensureSthat trade agreements with other countries contain safeguards for
workers’ rights and
, environmental protections applicable to foreign trading partners.
American unions continue to support positions of the International Labor Organization
(ILO), a United Nations–sponsored labor federation headquartered in Geneva, Switzerland, which has adopted
A “core labor standards” promoting basic workers’ rights such as
freedom of association, collective bargaining, the right to earn a living wage in a safe
N
workplace, and the prevention of forced child labor.35 Organized labor continues to
engage in pressureG
tactics before the World Trade Organization and the International
Monetary Fund to forge links between international trading rights and labor standards.36
E
Public OpinionL
Public opinion is a factor that also affects the labor relations process. The mass media
A
(television, radio, newspapers, movies, music) represent an important influence within a
community, serving as both a generator and conduit of community opinion. Media
sources often tend1to perpetuate a negative stereotype of unions. “When put together,
the collective media image portrays unions as greedy and corrupt institutions, eager to
strike, protective of1unproductive workers, heedless of America’s need to compete internationally, and generally
outmoded in a society that would have no disruptive class
0
antagonisms were it not for a few self-aggrandizing union hot-heads.”37 The media are
8
profit-making businesses,
and at least one prominent union official contends that this
orientation biases the
reporting
of labor relations activities:
T
The media tendSto cover collective bargaining as if it were a pier six brawl. The intricate
moves and trade-offs that really make up bargaining aren’t as newsy as impassioned rhetoric or a picket line confrontation. Reporters are given little training in covering collective
bargaining. They are told to look for the “news”—the fist fight, the walkout, the heated
exchange—and, as a result, frequently miss the “story,” which is the settlement…. Every
union proposal is a “demand,” every management proposal is an “offer.” 38
An analysis of 40 years of New York Times columns concerning labor unions
agreed with the preceding quotation, as it found that the newspaper had increasingly
21
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
22
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
concentrated on strike activities and had exaggerated the frequency of strikes.39 Media
coverage of labor issues often treats the subject matter as a consumer issue, focusing on
how consumer prices or the availability of goods or services may be affected rather than
focusing on the concerns of the workers affected by the labor issue.40
Public approval of labor unions declined during the recent economic recession to an
all-time low of 48 percent in August 2009, down from 59 percent one year prior.41 These
results vary by political party affiliation with a majority of Democrats (66 percent)
approving of unions compared to 44 percent of Independents and 29 percent of Republicans. Most Americans believe that unions are helpful to their members (66 percent),
but less than a majority believe unions are helpful to the companies where workers are
organized (46 percent) and to the U.S. economy in general (39 percent). Still, 53 percent
of the 1,010 adults surveyed desired to see unions exert the same or more influence in
the United States in the future compared to today.
Public opinion of institutions in general is low in the United States, with a majority
of the public currently expressing confidence in only 3 out of 15 surveyed American
H
institutions (the military, the police, and the church or organized religion).42 Only
I
24 percent of the public expressed
a lot of confidence in organized labor, but this rating
did rank ahead of the public’s
opinion
of Congress (19 percent) and big business (18
G
percent). In a separate 2009 Harris Poll, adults surveyed believed that a number of
groups exerted too much G
power and influence over government in Washington, D.C.,
including big companies and
S political action committees (85 percent each), news media
(75 percent), entertainment and sports celebrities (70 percent), and labor unions
,
(54 percent).43
Public opinion, like other external influences, can affect one or more phases of the
labor relations process, as well as the content of negotiated work rules. After experiencA strike between Caterpillar and the UAW, the mayor of
ing a bitter, well-publicized
Peoria, Illinois, feared employers
would not locate in his community: “We had worked
N
so hard to make this a city with the image of having a cohesive relationship between
G
labor and management, a place [in which] people should think about expanding their
businesses or opening newEones. Now comes this strike, which is going to damage our
reputation.”44 In some cases, a community may stress its low union membership level or
L
the anti-union attitudes of citizens as a benefit to encourage business organizations to
expand or relocate there. A
Union officials are aware of the significant influence that public opinion can have on
the labor relations process. Albert Shanker, former president of the American Federation
1 he wrote the first of 1,000 columns entitled “Where We
of Teachers, indicated why
Stand.” After strikes were 1
conducted by his union, Shanker reflected,
I became one of the best-known
figures in New York City, but people saw me only as
0
a militant union leader—urging teachers to strike, refusing to settle, going to jail. In
8
late 1968, I became convinced
that I had been dead wrong in believing that the public’s opinion of me didn’t
matter.
Public schools depend on public support. And the
T
public was not likely to support the schools for long if they thought teachers were led
S I decided to devote some time and energy to letting the
by a powerful madman….
public know that the union’s president was someone who read books and had ideals
and ideas about how to fix the schools.45
Union officials seek to enhance public opinion in three general ways: monitoring and
reacting to negative comments made in the media, getting organized labor’s positive message out to the community, and forming alliances with various groups in the community.
For example, the AFL-CIO supported a march sponsored by the Rainbow PUSH Coalition
22
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
23
in New Orleans, Louisiana, to encourage faster government action to rebuild homes and
communities devastated by Hurricanes Katrina and Rita.46 The AFL-CIO has created its
own Gulf Coast Revitalization Program, committing $1 billion dollars over seven years to
fund housing and economic development initiatives. Another example is the BlueGreen
Alliance, which is a national strategic partnership between environmental groups (e.g.,
Sierra Club) and labor unions (e.g., Service Employees International Union, United Steelworkers, Communication Workers of America, and the American Federation of Teachers).47 The Alliance’s goal is to expand the number and quality of jobs in the “green
economy.” Organized labor continues to work with community-based religious, civil rights,
and environmental groups on issues of shared interests, such as improving health care
access and affordability, immigration reform, and ensuring economic and social justice on
the job and within the communities in which workers live.48
Unions have also become more sophisticated in creating their own media campaigns
to support union membership and bargaining activities. Some efforts such as
WakeUpWalMart.com or WalMartWatch.com target a specific company, while others
H
target a specific issue, such as the Health Care Hustle Web site sponsored by Working
I of the AFL-CIO representing 1.5 million employees who currently
America, an affiliate
are not members ofGan organized bargaining unit.49
In some cases, organized labor has cultivated alliances with business organizations.
G Wal-Mart, AT&T Inc., Intel Corporation, the Service Employees
A coalition including
International Union,
S and the Communications Workers of America worked to encourage public policy changes that would provide affordable health care coverage to all
Americans.50 Other, examples include the Public Works Alliance, which involves labor
unions and contractors cooperating to obtain federal funds for road and bridge improvements in the Long Island, New York, area and a labor-management alliance in Rhode
A the funding of a valued job training program.51
Island seeking to save
N
G
Union Membership
E
Union membership in the United States has shown a steady, gradual decline as a proporL force (i.e., all employed persons 16 years of age or older). In 2010,
tion of the total labor
union membership A
was 14.7 million, or 11.9 percent of the 124.1 million wage and salary
52
employees in the total U.S. labor force. In 1945, union membership was about 36 percent
of the total labor force. Union density, the proportion of a total group (e.g., national labor
force, state labor force,
1 industry, company, or geographic region) comprised of union
members, is one measure of relative union strength or potential influence. One estimate
predicts that unions1would need to organize 1 million new members annually to increase
the union density level
0 in the total labor force by 1 percent.53 Exhibit 1.4 shows union
membership data trends since 1975.
8
Unions typically represent a higher number of employees than are actually union
members because T
a simple majority of employees must support a union in order for
that union to gain the legal right to represent the entire employee group (bargaining
S
unit) for purposes of collective bargaining. While no employee can legally be required
to become a full active member of any union, if that employee is a member of an
employee group whose majority has chosen to be represented by a union, then all members of that group would be covered by the labor agreement negotiated by that union
and the employee group’s employer. In 2010, 1.6 million employees had jobs covered
by a collective bargaining agreement (labor contract) but were not union members themselves.54 Almost half of these individuals were government employees.
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
24
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
Exhibit 1.4
Union
Members
Percentage
Union
Members
Percentage
Represented
for
Bargaining
Union Membership Trends,
1975–2009 (in thousands)
Year
Total
Employment
1975
75,703.9
16,778
22.2
—
1980
87,479.5
20,095
23.0
25.7
1985
94,520.5
16,996
18.0
20.5
1990
103,904
16,740
16.1
18.3
1995
110,038.1
16,359
14.9
16.7
2000
120,785.6
16,258
13.5
14.9
2005
125,889.3
15,685
12.5
13.7
2010
124,073
14,715
11.9
13.1
H
I
SOURCE: U.S. Department of Labor, “Union Members in 2010,” News Release, January 21, 2011, p. 5; Barry Hirsch and David
G
Macpherson, “Union Membership, Coverage, Density, and Employment among All Wage and Salary Workers, 1973–2006,”
Unionstats.com, 2007, p. 1 at http://www.trinity.edu/bhirsch/unionstats/.
G
S
In 2010, 7.1 million ,(6.9 percent) of 103 million private-sector employees were
Data is based upon information in the Current Population Survey (CPS) compiled by the Bureau of Labor Statistics, U.S. Department of Labor.
union members while 7.7 percent of private-sector employees were represented by a
union for purposes of collective bargaining.55 Slightly more union members were
A (7.6 million) than were employed in the private sector,
employed in the public sector
comprising 36.2 percent of
N total public-sector employment. The higher union density
among public sector employees varies by level of public employment, with 45.9 percent
G 34.6 percent of state employees and 31.4 percent of fedof local government employees,
eral employees represented
E by a union for purposes of collective bargaining. Publicsector labor relations issues and trends will be discussed further in Chapter 13.
The gradual decline orLstagnation in union membership has been attributed to three
broad factors: structural changes
in the labor force, improved management practices in
A
business organizations, and political and legal conditions governing the workplace. Of
these three explanations, research suggests that changes in the structure of the labor
56
In 2008 and 2009, job losses due to the economic
force may be the most important.
1
recession resulted in the loss of many union members, particularly in the manufacturing
1
and construction industries.57
Employment has shifted
0 from traditionally unionized industries (manufacturing,
railroads, and mining) to professional and service-related industries (e.g., health care,
8
legal, education, food preparation, personal care and service, building and grounds cleaning and maintenance, and T
protective services).58 Many of the fastest growing occupations
are at opposite ends of theSlevel of education and skills continuum required for effective
job performance. “The problems of defending a shrinking number of high wage
manufacturing jobs are different from organizing the growing ranks of lower-wage service workers. But what they have in common is the need to confront industry with one
union that can bargain hard and solve problems.”59
Most business organizations in the United States are small, with 88 percent of firms
having fewer than 20 employees and 98 percent of firms having fewer than 100 employees.60 Union membership has traditionally been concentrated in the 2 percent of firms
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
LABOR RELATIONS IN ACTION
Are Unions Still Relevant?
The answer to the provocative question of whether
unions are still relevant in today’s economy may depend
on who you ask. Andrew Stern, past president of the
Service Employees International Union (SEIU) believes
the need for unions today may be greater than at any
time in the past 75 years.
I think American workers want a voice on their job.
The question is: Will unions change to become better partners with employers to respond to what is
now a global economy where more people went to
work in the U.S. in retail than in manufacturing? We
want to find a 21st century new model that may
look more like a European model, that
H is less
focused on individual grievances, more focused
on industry needs. We don’t see our Iemployers
as enemies. We need to build successful employG
ers [and] as a part of that you need to be involved
and have a voice, and everyone needs G
to share in
the success of an employer, not just the shareS
holders and executives.a
, are just
The AFL-CIO shares the belief that unions
as important today as ever and views one important
union role as safeguarding workers’ past gains while
A
seeking a fair share of future prosperity.
Through unions, workers win better wages, beneN
fits, and a voice on the job—and good union jobs mean
stronger communities. Unions have made lifeGbetter for
all working Americans by helping to pass laws ending
child labor, establishing the eight-hour day,E
protecting
workers safety and health and helping to create
L Social
Security, unemployment insurance and the minimum
A
wage, for example. Unions are continuing the fight
today to improve life for all working families in America.b
A survey of Canadian employees reported the top
three advantages of unions were that they made health
and safety, job security, and benefits a lot better on the
job.c While agreeing that it was important for workers to
have a voice on the job, more Canadians preferred an
employee association form of representation that would
take up problems on behalf of workers with management than the traditional Canadian union model.
Employers, particularly those who currently are nonunion, are more likely to argue that unions today are no
longer necessary. “… the protections unions used to
seek, such as from unfair dismissal and dangerous workplaces, have—with labor’s ardent support—been taken
over by government.”d What were once considered significant employee pension and health care benefit gains
under union contracts are now referred to as “high legacy costs” by unionized employers in industries such as
airlines and autos, making those employers less competitive and threatening job security.e
Ultimately, what matters is how employees will
answer the question of whether unions are still relevant.
The issue of why employees join a union will be
explored further in Chapter 5.
Kris Maher, “Are Unions Relevant?” Wall Street Journal, January 22, 2007, p. R-5.
AFL-CIO, “A Quick Study of How Unions Help Workers Win a Voice on the Job,” Unions
101, (accessed August 13, 2010), p. 1 at http://www.aflcio.org/joinaunion/union101.cfm.
c
Uyen Vu, “Employees Want a Collective Voice, but Not Necessarily a Union, Survey
Says,” Canadian HR Reporter, 16(20), 2003, pp. 3, 11.
d
Robert J. Grossman, “Do Unions Pay?” HR Magazine, 50 (5), May 2005, p. 49.
e
Michael Barone, “Big Labor, RIP,” Wall Street Journal, July 28, 2005, p. A–10.
a
b
that account for 431percent of all jobs in the economy. Efforts to increase union membership in small 1firms is both time consuming and more expensive for labor
organizations.
0 affecting the size and composition of the labor force can also affect
Demographic trends
union membership8trends. The proportion of the labor force comprised of individuals
55 years and older is expected to increase while the proportion of individuals in the 16–24
T is expected to decline.61 Over the period from 2008 to 2018, the proand 25–54 age groups
portion of the laborS
force comprised of men is expected to decline from 53.5 percent to 53.1
percent, while women’s proportion will increase from 46.5 percent to 46.9 percent. By 2018
groups of Black, Asian, and Hispanic origin groups will increase their representation in the
labor force, comprising an estimated 12.1 percent, 5.6 percent, and 17.6 percent of the labor
force respectively. Unions will need to be able to attract and retain new members from these
groups of employees to maintain or increase current union density levels in the future.
In 2010, 24.4 million part-time workers comprised 19.6 percent of the total labor
force.62 Unions represented 14.6 percent of full-time workers but only 7.2 percent of
25
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
26
PART 1 • Recognizing Rights and Responsibilities of Unions and Management
part-time workers for purposes of collective bargaining in 2010.63 Research demonstrates
that growth in part-time employment has a small, but significant, negative impact on
union density, although this negative effect declines as the number of hours of work
increases to 20 or more per week.64
Another reason often given for stagnant or declining union membership is that
more organizations are learning how to operate their businesses on a nonunion basis.
Sometimes this entails moving some or all operations to less-unionized geographic
areas of the United States (e.g., the Southwest and South). More firms are trying to be
proactive in recognizing and addressing employee interests and concerns. Managers are
also adopting human resource management practices, including aggressive anti-union
campaigns (see Chapter 5), to keep their firms nonunion.
Some union officials indicate that employers often use labor law loopholes to forestall
or negate free employee union choice through secret-ballot elections. For example, using
pre-election procedural time delays, contesting election results, lengthy appeals, and delays
in union attempts to negotiate a first contract settlement once union recognition is granted
H
are possible under the LMRA (see Chapter 3). One analyst makes a comparison with the
political process: Suppose IU.S. political elections were legally structured so that access to
potential voters was denied
Gto one political party (analogous to the union), while it was
granted to the other one for eight hours a day at one’s place of work. The second political
G could force the electorate to listen to campaign speeches
party (analogous to management)
65
(captive audience meetings),
S while the opposing party was denied access.
Employment law changes that have expanded employees’ rights through passage of
,
the Americans with Disabilities
Act, Equal Employment Opportunity Act, Occupational
Safety and Health Act, Employee Retirement and Income Security Act, Lilly Ledbetter
Fair Pay Act and other legislation have helped employers to argue that unions are less
A unions appear to be committing more of their resources
necessary today. Indeed, many
to serving the needs of their
N current members than to organizing new members.
There is an ongoing debate within the union movement regarding the proportion of
G
resources that ought to be devoted to organizing new members versus providing
enhanced services (e.g., negotiating
contracts; researching wage, benefit, and working
E
condition issues; processing contract grievances; monitoring political issues) to currently
L
represented members. Each union’s membership must decide if organizing new employA when these efforts would require the use of scarce union
ees is in their best interests
organization funds earmarked for present members’ services. Mary Kay Henry, the
recently elected president of the Service Employees International Union (SEIU), has
1 organization’s primary goal, with the union investing $250
made union organizing the
66
million annually in organizing
1 activities. Because unions are political organizations
and union leaders are elected by the current membership, the incentive to organize new
members is often less than0the incentive to provide services to current members.67
Although union membership
has experienced a gradual decline as a percentage of
8
the total labor force, many labor unions have responded by increasing their unionT are attempting to improve the ways in which they relate
organizing activities. Unions
both to their own members
Sand to employers with whom they have bargaining relationships.68 The social significance of unions can also be assessed in general terms by considering what the consequences would be if unions were absent from our society. With no
organized voice for workers’ interests to counterbalance the economic interests of
employers to reduce labor costs, would the improvements gained over the previous century continue, or would they be subject to erosion and lax enforcement? Labor unions
have historically functioned in the United States as a countervailing power necessary to
maintain some balance between employer and employee rights and responsibilities.
9781285982953, The Labor Relations Process, Tenth Edition, Holley/Jennings/Wolters - © Cengage Learning. All rights reserved. No distribution allowed without express authorization.
CHAPTER 1 • Union–Management Relationships in Perspective
27
Summary
Although unique to the particular labor–management
activities, attitudes, and relationships at each organization (discussed more in Chapter 4), the labor relations
process includes three key phases or steps: recognition
of the legitimate rights and responsibilities of union
and management representatives, negotiation of a
labor agreement, and daily administration of the
terms of that negotiated labor agreement.
The labor relations process focuses on jointly negotiated and administered work rules that pertain to compensation and employees’ and employers’ rights and
responsibilities. The labor relations process is flexible
enough to permit negotiated work rules to vary, thus
H
accommodating the unique characteristics of a particular industry, job classification, geographic Isetting, or
external environmental conditions. The labor
Grelations
process is dynamic, which enables bargaining relationG
ships to adapt to changing competitive conditions.
Union and management officials represent
S two key
participants in the labor relations process along with
,
employees, government, and certain third-party
neutrals such as mediators and arbitrators who aid in
resolving interest and rights-type disputes. Employees
A process
are particularly important in the labor relations
Key Terms
labor relations process, p. 5
interest disputes, p. 6
rights disputes, p. 6
Work rules, p. 7
managers, p. 10
Union repre...
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