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R
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13
LABOR RELATIONS AND
COLLECTIVE BARGAINING*
G
A
O V E R V I E W
T
Issues related to organizational justice and
practices related to employeeE
discipline
and grievances are major factors
S in the
employment relationship and have a great
,
deal to do with why employees join
unions. Unions are organizations that
represent employees’ interests to
D
management on almost all critical HR
issues. The topics covered in E
Chapters 10
and 11 have to do with increasing
A
productivity and performance through
N generally
compensation practices. Unions
resist such efforts and prefer D
greater
stability and equality in workers’
R have
paychecks. This resistance may
something to do with the negative
A
attitudes business students have toward
unions and certainly contributes to the
antipathy that management has
1 toward
organized labor.
1 unions
Although some believe that
have become an institution of2the past,
there is some evidence that attitudes
3
toward unions may be improving. A 2002
Gallup survey of Americans T
found that
65 percent approved of unions while only
S
28 percent disapproved.1 The approval rate
is up compared to 1995 responses. There
is also evidence that unions are now
more supportive of innovative pay-forperformance systems and productivity
enhancement programs such as quality
circles and work team designs.2
Management students today often
learn the “ideal” way to manage firms’
human resources, making it difficult for
them to comprehend the adverse working
environments that led to (and still lead to)
326
unionization. People in the early part of
the 20th century often worked under
conditions many of us cannot fathom:
“dark, satanic mills,” with workweeks
of at least 60 hours and with no
provisions for safety, illness, vacations, or
retirement.3 The union’s role in improving
these conditions is clear. While the goal of
unions today in the United States is still
to improve working conditions and
increase workers’ economic status, the
need and effects are more subtle than they
were during the early years of unions.
The United States has legislation
governing wages and hours, equal
employment opportunity (EEO), family
and medical leave, pensions, mergers,
Social Security, and health and safety.
Almost all U.S. workers benefit from this
legislation, which probably would not be
law were it not for the past political clout
and successes of the unions. But this
legislative success also fosters a feeling
among American workers that unions may
not be needed. The relatively clean service
industry, not the harsh factories and coal
mines, provide for a substantial proportion
of present-day U.S. employment. Most
workers today face mental rather than
physical strains, which makes the need for
a union less clear. Nonetheless, service
work often pays low wages with few
benefits and is (some argue) in need of
union protection.
Union membership in the United
States has dropped substantially over the
last 30 years and in 2004 was estimated to
be 12.5 percent of wage and salary
*Contributed by Nancy Brown Johnson
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CHAPTER 13 Labor Relations and Collective Bargaining
workers. Figure 13-1 presents a summary of union
members in 2004, membership by industry and
occupations, demographic characteristics, earnings, and
membership rates across the states (it was 35 percent in
1945).4 Unions are nonetheless an important influence
upon workers and firms—both union and nonunion. The
AFL-CIO, which represents over 9 million workers, has
53 national and international union affiliates in the United
States.5 Go to www.aflcio.org for links to all affiliated
unions. The largest union is the National Education
Association with over 2,500,000 members. As we
discussed in Chapter 2, increased globalization also may
necessitate stronger consideration of international labor
relations. Although Starbucks in the United States has
almost no union representation for its U.S. employees,
when Starbucks expanded to Italy and Sweden,
management had to be well informed about labor relations
in those countries, where a much higher percentage
of workers are unionized.6 The online Georgetown
University law library (www.ll.georgetown.edu) is an
excellent source for international labor relations.
Worker–management relationships are strongly
affected by the presence of unions. HR decisions, such as
compensation, promotion, discipline, demotion, and
termination, require union involvement. In general,
management must handle personnel matters with the
union rather than with each individual employee. As
discussed in Chapters 10 and 11, unions have a great
influence over pay structure and the compensation system
in general. Nonunion firms also concern themselves with
union activities because they usually desire to maintain
their nonunion status. To do so, firms must be aware of
unions and their history, their goals, their influences upon
firms, and the legal issues binding both sides. Obviously,
the working conditions, wages, and terms of employment
of unionized firms have an effect on the way in which
nonunion employers manage their HR in order to
maintain nonunion status.
This chapter will begin with a discussion of what
factors affect employee decisions to join unions. We will
then review the major legislation affecting the labor
movement and management today. The factors and
procedures related to union organizing also will be
covered. We then discuss collective bargaining and the
methods that unions and organizations employ to achieve
their goals. The chapter will close with a discussion of
the contemporary labor movement in the context of
increased globalization.
O B J E C T I V E S
After reading this chapter, you should be able to
1. Understand why people join unions.
2. Understand the basic elements of labor law.
327
3. Understand collective bargaining as a tool for labor
negotiation.
4. Identify the bases of power in collective bargaining
related to both unions and management.
5. Describe current trends and issues in labor relations.
6. Understand the state of labor relations in other
countries.
G
A
T
E
S
,
Most business students today hold a negative view of the
American labor movement. Unions are often viewed as
antimanagement, striving to control or even reduce productivity, while demanding higher wages and ironclad
protection for workers regardless of their performance.
Indeed, the law requires management to meet and confer
with union representatives when formulating policy and
making decisions regarding virtually all important elements of HRM. The presence of a union or efforts to organize workers require HR expertise in labor relations. A
lot can go wrong when managers have limited knowledge
of labor law and organizing strategy. Management also
should use HR specialists to negotiate and renegotiate labor contracts. But there is no question that some knowledge of labor law and collective bargaining is critical in
any work environment where union organizing efforts are
serious. Management also should understand why workers would contemplate giving up part of their paycheck to
be represented by a union. Let’s turn to that issue first.
D
E
A
N W HY D O W ORKERS J OIN U NIONS ?
D Understanding unions and why people organize is important for managers whether or not their organization
R is unionized. As discussed in Chapter 12, perceptions of
A organizational justice, job satisfaction, and perceptions of
1
1
2
3
T
S
fair pay likely deter union organizing drives.
There are three general reasons why workers join
unions: (1) dissatisfaction with the work environment,
including working conditions, compensation, and supervision; (2) a desire to have more influence in affecting
change in the work environment; and (3) employee beliefs regarding the potential benefit of unions. Figure 13-2
presents a summary of the major determinants.
Workers’ dissatisfaction with their jobs and, in particular, dissatisfaction with their wages, benefits, and supervision are most related to the tendency to vote for a union.7
One surprising finding is that the work itself does not seem
to be strongly related to union voting. The best predictors
in several studies are satisfaction with pay, working conditions, and supervision rather than the work itself. Satisfaction with first-line supervision appears to be particularly
important as well as concerns regarding job security.
A second general reason for joining unions is a belief
that there are no other options for either gaining more influence at the workplace or finding employment elsewhere.
In general, to the extent that management has mechanisms
for employees to voice their concerns about HRM policy,
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PART IV Compensating and Managing Human Resources
FIGURE 13-1 Union Members in 2004
In 2004, 12.5% of wage and salary workers were union members, the union membership rate has steadily declined from a
high of 20.1% in 1983, the first year for which comparable union data are available.
HIGHLIGHTS FROM 2004 DATA
• About 36% of government workers were union members in 2004, compared with about 8% of workers in private-sector
industries.
• Two occupational groups—education, training, and library occupations and protective service occupations—had the highest
unionization rates in 2004, at about 37% each. Protective service occupations include fire fighters and police officers.
• Men were more likely to be union members than women (14% versus 11%).
• Black workers (15%) were more likely to be union members than were white (12%), Asians (11%), or Hispanic or Latino
workers (10%).
MEMBERSHIP BY INDUSTRY AND OCCUPATION (2004)
G (41%).
• Local government workers had the highest union membership rate
• Among major private industries, transporation and utilities had the
A highest union membership rate, at 25%. Construction
(15%), information industries (14%), and manufacturing (13%) also had higher-than-average rates.
T
OTHER DEMOGRAPHIC CHARACTERISTICS OF UNION
EMEMBERS
• Union membership rates were highest among workers 45 to 54 years old (17.0%) and were lowest among those ages
S
16 to 24 (4.7%).
• Full-time workers were more than twice as likely as part-time workers
to be union members.
,
UNION REPRESENTATION OF NONMEMBERS
About 1.6 million wage and salary workers were represented by D
a union on their main job in 2004, while not being union
members themselves.
E
EARNINGS
A
• Full-time wage and salary workers who were union members had median usual weekly earnings of $781, compared with a
N
median of $612 for nonunion workers.
• Four states had union membership rates over 20%: New York (25%),
D Hawaii (24%), Michigan (22%), and Alaska (20%).
• Membership rates below 6% are: North Carolina and South Carolina (3%), Arkansas and Mississippi (also under 5%), and
R
Florida was at 6% in 2004.
• The largest numbers of union members lived in California (2.4 million)
A and New York (2.0 million). About half (7.8 million) of
the 15.5 million union members in the U.S. lived in six states (California, New York, Michigan, Illinois, Pennsylvania, and Ohio).
Source: Bureau of Labor Statistics (www.bls.gov)
there is less tendency on the part of workers to favor unionization. A formal grievance procedure as discussed in
Chapter 12, for example, which has been used successfully
by employees, can deter union activity since workers perceive that there are alternatives to unions as an approach to
correcting problems at work. Workers are much more
likely to join a union if they perceive that they have little or
no influence on important matters at work.
The third critical reason for joining unions is that
employees believe that unions can actually improve
conditions and, in particular, can have an impact at their
own workplace. In general, this belief is driven by the
extent to which unions represent workers in any particular industry or occupation. A worker who perceives that
unions are more likely to help solve problems in the
workplace is more likely to vote for unionization.
Companies attempt to influence employees’ beliefs
about unions. Campaign tactics by management include
1
1written communications, meetings, threats, and actions
2against union supporters. These can negatively affect workvotes for unionization. Companies often use consult3ers’
ants who specialize in refuting the claims of union organizTers and presenting horrendous scenarios if the union should
It is estimated that there are over 1,000 such firms
Sprevail.
and an additional 1,500 private consultants in the union prevention or “busting” business (check out www.tbqlabor.com
for one example of such a firm). Union tactics, although less
often examined, also influence workers’ willingness to join
unions. One study found that unions that conducted a rankand-file organizing strategy were more likely to win certification.8 Such a strategy involves reliance on a slow underground person-to-person campaign that involves using
employees themselves to organize the campaign.
While most Americans believe unions can improve
things at work, many are generally hostile to unions. They
think unions protect ineffective workers, abuse their
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CHAPTER 13 Labor Relations and Collective Bargaining
1.
329
Perceptions of work environment
a. Job dissatisfaction
b. Working conditions
c. Inequity perceptions
2.
Perceptions of influence
Propensity
to
unionize
a. Desired influence
b. Difficulty of influencing
conditions
G
A
a. Image and expectations
about unions
T
E
Figure 13-2 Determinants of Propensity to Join Unions
SIL: Richard D. Irwin, 1980, p. 144. Copyright © The McGraw-Hill Companies.
Source: T. Kochan, Collective bargaining and industrial relations. Homewood,
,
3.
Beliefs about unions
power through strikes, are corrupt, and impede productivity
improvement programs. One study found that knowing
an employee’s general opinion about unions in these areas was a strong predictor of how an employee would
vote for union representation.9 Most business students
aspire to management positions. There is no question
that management prefers a nonunion environment. The
focus of unions on the so-called bread-and-butter issues
such as wages, benefits, and job security is viewed by
management as constraining.
T HE L EGAL E NVIRONMENT
L ABOR R ELATIONS
D
E
A
N
D
R
A
OF
Figure 13-3 highlights the two major federal laws affecting labor relations in the United States. The National
Labor Relations Act, also known as the Wagner Act, was
designed to protect workers’ rights to organize and join
unions. The Taft-Hartley Act was designed to place limits
on some of the powers of unions. Of course, state laws
may also play a role in union organizing efforts. For example, 22 states now have “right-to-work” laws, which
allow workers to work in an establishment under a collective bargaining agreement without having to join a union.
National Labor Relations Act (NLRA)
The National Labor Relations Act (NLRA), also known
as the Wagner Act, became law during the great depression of 1935. The NLRA formally recognized workers’
rights to organize and bargain collectively with representatives of their own choosing. To enforce that right, the
NLRA described what constituted unfair labor practices
1
1
2
3
T
S
by employers. Prohibited activities included forbidding
employers from (1) interfering with employee representation and collective bargaining rights; (2) dominating or
interfering with the affairs of unions; (3) discriminating
in regard to hiring, retention, or any employment condition against workers who engage in union activity or who
file unfair labor practice charges; and (4) not bargaining
in good faith with employee representatives. Further, the
act established the National Labor Relations Board
(NLRB) to enforce the Wagner Act and to conduct representation elections. Essentially, the goal of the NLRB is
to regulate the processes of organizing and collective bargaining, not necessarily the outcomes. As an independent
federal agency (see www.nlrb. gov), the two primary
functions of the NLRB are (1) to prevent and correct unfair labor practices and (2) to administer certification and
decertification elections to determine whether workers
choose to be represented.
When an unfair labor practice (ULP) charge is filed,
a field office conducts an investigation to determine
whether there is reasonable cause to believe the NLRA
was violated. If the Regional Director determines that the
charge lacks merit, it is dismissed. A dismissal may be
appealed to the General Counsel’s office of the NLRB. If
the Regional Director finds reasonable cause to believe a
violation of the law has been committed, that office of the
NLRB seeks a voluntary settlement to remedy the alleged
violations. If the settlement efforts fail, a formal complaint
is issued and the case goes to a hearing before an NLRB
Judge. The judge issues a written decision that may be appealed to the five-member NLR Board in Washington for
a final agency determination. The Board’s decision is
subject to review in a U.S. Court of Appeals.
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PART IV Compensating and Managing Human Resources
FIGURE 13-3 Major Implications of NLRA and Taft-Hartley Act
NLRA
MANAGEMENT CANNOT:
Interfere with, restrain, or coerce employees in the
exercise of their rights to organize, bargain collectively,
and engage in other activities for their mutual aid or
protection (e.g., threaten employees with the loss of a
job if they vote for the union).
Dominate or interfere with the formation or
administration of any labor organization or contribute
financial or other support to it.
Encourage or discourage membership in any labor
organization by discrimination with regard to hiring or
tenure or conditions of employment, subject to an
exception for valid union-security agreements.
Discharge or otherwise discriminate against an employee
because he or she has filed charges or given testimony
under the Wagner Act.
Refuse to bargain collectively with representatives of the
employees; that is, bargain in good faith.
Taft-Hartley
UNIONS CANNOT:
Restrain or coerce employees in the exercise of their right
to join or not join a union.
Restrain or coerce an employer in the selection of his or
her bargaining or grievance representative.
Cause or attempt to cause an employer to discriminate
against an employee due to membership or
nonmembership in a union, subject to an exception for
valid union-shop agreements.
Refuse to bargain collectively (in good faith) with an
employer if the union has been designated as a
bargaining agent by a majority of the employees.
GInduce or encourage employees to stop work in order to
A force an employer or self-employed person to join a
union or to force an employer or other person to stop
T doing business with any other person (secondary boycott).
or encourage employees to stop work in order to
EInduce
force an employer to recognize and bargain with the
S union where another union has been certified as a
bargaining agent (strike against a certification).
, Induce or encourage employees to stop work in order to
force an employer to assign particular work to
members of the union instead of to members of
D another union (jurisdictional strike).
an excessive or discriminatory membership fee as
ECharge
a condition to becoming a member of the union.
ACause or attempt to cause an employer to pay for
services that are not performed or not to be performed
N (featherbedding).
D
R
A
Source: Adapted with permission from J. J. Kenny and L. G. Kahn, Primer of labor relations. Washington, DC: Bureau of National Affairs, 1989, pp. 1–3.
Reprinted with permission from BNA Books.
About 30,000 ULPs are filed each year and about
one-third are found to have merit. Over 90 percent are settled. The NLRA also empowers the NLRB to petition a
federal district court for an injunction to temporarily prevent unfair labor practices by employers or unions and to
restore the status quo, pending the full review of the case
by the Board. The NLRA also requires the Board to seek
a temporary federal court injunction against certain forms
of union misconduct, principally involving “secondary
boycotts” and certain forms of picketing.
Some academic experts maintain that many of the
most recent NLRB rulings are contrary to the goals of the
NLRA. For example, the NLRB overturned a Clinton-era
ruling that gave nonunion employees the right to have a
colleague accompany them to an investigative or disciplinary ruling involving a colleague (known as the Weingarten
rule). The NLRB reversed a 1990s ruling granting graduate students the right to unionize. The NLRB also ruled
that a company claiming “financial distress” did not have
to share financial information with the union during
contract negotiations.
The Taft-Hartley Act
1The Taft-Hartley Act of 1947 was designed to limit the
power of unions by regulating labor activities allowed un1der the NLRA. Labor called this amendment to the
2NLRA the “slave labor bill.” Taft-Hartley amended the
by describing what constituted unfair labor prac3NLRA
tices by unions, including (1) restricting the usage of the
Tstrike, including granting the president of the United
the power to issue an injunction against a strike;
SStates
(2) restricting unions from interfering with workers’ right
to organize; and (3) prohibiting union discrimination
against workers who did not want to participate in union
activities, including strikes.
The Taft-Hartley Act provided states with the option
of enacting right-to-work legislation. Right-to-work laws
declare that union security agreements that require membership as a condition of employment are illegal. As of
2005, 22 states have enacted right-to-work laws.10 To aid
in the peaceful settlement of contractual disputes, the
Federal Mediation and Conciliation Service (FMCS) was
established and provided emergency dispute provisions
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CHAPTER 13 Labor Relations and Collective Bargaining
for the settlement of strikes affecting national health and
safety (see www.fmcs.gov). Thus, the Taft-Hartley Act
further restricted union activity. One purpose of the
FMCS is to provide trained representatives to assist in
labor negotiations.(see www.fmcs.gov).
president does have the right to intervene to preclude a
strike which he did in the case of United Airlines in 2001.
The Civil Service Reform Act (CSRA) of 1978
While similar to the NLRA in its provisions but applicable only to federal employees, the CSRA prohibits wage
negotiations (they’re set by Congress) and strikes. The
CSRA also established the Federal Labor Relations
Authority (FLRA) as an independent agency within the
executive branch of the government. The FLRA has
authority similar to the NLRB. (See www.flra.gov.)
Other Important Labor Laws
The Landrum-Griffin Act
In the late 1950s, the U.S. Senate held hearings investigating and exposing union corruption that ultimately resulted in the 1959 Landrum-Griffin Act. Designed to protect
workers from their unions, Landrum-Griffin, also an
amendment to the NLRA, provided for the employee “bill
of rights,” union filing of annual financial statements
with the Department of Labor, and the requirement that
unions hold national and local officer elections every five
years and three years, respectively. The main purpose of
Landrum-Griffin was to allow for the monitoring of the internal activity of unions. Union officials were now accountable for union spending, union elections, and other activities.
The Railway Labor Act of 1926
The Railway Labor Act was jointly crafted by both labor
and management in the railroad industry. Airline workers
became covered in 1935. The focus of the law is upon
avoiding prolonged strikes whenever possible. In recent
years, negotiations in the airline industry have been quite
protracted spanning over several years. On the other
hand, strikes have been averted for the most part. The
FIGURE 13-4
H OW D O W ORKERS F ORM U NIONS ?
G
A
T
E
S
,
The process of organizing workers can be lengthy. Typically, the steps are as follows:
1. Either union membership is solicited by the
employees who contact a union or a union might
conduct an organizing drive.
2. At least 30 percent of employees must sign
authorization cards that stipulate that a particular
union should be their representative in negotiating
with the employer (see Figure 13-4 for an example).
3. The NLRB is petitioned to conduct an election.
4. Assuming the authorization cards are in order, the
NLRB sets a date for the election.
5. A secret ballot representative certification (RC)
election is held, which requires that a majority of
eligible voting workers accept the union.
D
E
A
N
D
R Card
Sample Union Authorization
A
Date
. . . . . . . . . . . . 20 . . . . . . .
STRICTLY CONFIDENTIAL
1
Office & Professional Employees International Union, Local 153, AFL-CIO
265 West 14th Street,1
New York, NY 10011
I hereby authorize Office & Professional Employees
International Union, Local 153,
2
AFL-CIO, to represent me and to petition the National Labor Relations Board to conduct
a secret ballot election among the staff. 3
Name . . . . . . . . . . . . . . . . . . . . . . . . . .T. . . . . . . . . Tel. No.
(Please print) S
Address
...............
........................................................
(Zip Code)
Present Employer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Present Employer’s Address . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Position
331
. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dept. . . . . . . . . . . . . . . . .
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
CONFIDENTIAL
Source: Office & Professional Employees Union, New York, NY.
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PART IV Compensating and Managing Human Resources
NOTICE TO
EMPLOYEES
FROM THE
National Labor Relations Board
A PETITION has been filed with this Federal agency seeking an election to determine whether
certain employees want to be represented by a union.
The case is being investigated and NO DETERMINATION HAS BEEN MADE AT THIS TIME
by the National Labor Relations Board. IF an election is held Notices of Election will be posted
giving complete details for voting.
It was suggested that your employer post this notice so the National Labor Relations Board
could inform you of your basic rights under the National Labor Relations Act.
YOU HAVE
THE RIGHT
under
Federal Law
• To self-organization
• To form, join, or assist labor organizations
• To bargain collectively through representatives of your own
choosing
• To act together for the purposes of collective bargaining
or other mutual aid or protection
• To refuse to do any or all of these things unless the union and
employer, in a state where such agreements are permitted,
enter into a lawful union-security agreement requiring
employees to pay periodic dues and initiation fees.
Nonmembers who inform the union that they object to the use
of their payments for nonrepresentational purposes may be
required to pay only their share of the union’s costs of
representational activities (such as collective bargaining,
contract administration, and grievance adjustments).
G
A
T
E
S
,
It is possible that some of you will be voting in an employee representation election as a result
of the request for an election having been filed. While NO DETERMINATION HAS BEEN MADE
AT THIS TIME, in the event an election is held, the NATIONAL LABOR RELATIONS BOARD
wants all eligible voters to be familiar with their rights under the law IF it holds an election.
D
E
A
N
D
R
A
The Board applies rules that are intended to keep its elections fair and honest and that result in
a free choice. If agents of either unions or employers act in such a way as to interfere with your
right to a free election, the election can be set aside by the Board. Where appropriate the Board
provides other remedies, such as reinstatement for employees fired for exercising their rights,
including backpay from the party responsible for their discharge.
• Threatening loss of jobs or benefits by an employer or a union
• Promising or granting promotions, pay raises, or other benefits
to influence an employee’s vote by a party capable of carrying
The following are
out such promises
examples of conduct • An employer firing employees to discourage or encourage
union activity or a union causing them to be fired to encourage
that interfere with
union activity
the rights of
• Making campaign speeches to assembled groups of employees
on company time within the 24-hour period before the election
employees and may
• Incitement by either an employer or a union of racial or religious
prejudice by inflammatory appeals
result in the setting
• Threatening physical force or violence to employees by a union
aside of the election.
or an employer to influence their votes
NOTE:
1
1
2
NATIONAL LABOR RELATIONS BOARD
3
an agency of the
UNITED
T STATES GOVERNMENT
THIS IS AN OFFICIAL GOVERNMENT NOTICE AND MUST NOT BE DEFACED BY ANYONE
S
Please be assured that IF AN ELECTION IS HELD every effort will be made to protect your
right to a free choice under the law. Improper conduct will not be permitted. All parties are
expected to cooperate fully with this Agency in maintaining basic principles of a fair election as
required by law. The National Labor Relations Board, as an agency of the United States
Government, does not endorse any choice in the election.
RD
NAL LA
IO
S BO
ON
A
TI
R RELA
BO
NA
T
FORM NLRB-666 (5-90)
U.S. GOVERNMENT PRINTING OFFICE: 1941-312-471751356
Figure 13-5 NLRB Election Notice
Source: National Labor Relations Board.
The goal of the NLRB is to maintain an environment
in which workers can make an uncoerced decision regarding the certification election. Figure 13-5 presents an
example of an NLRB election notice.
Many unions now use the Internet to conduct the authorization step (for an example, try walmartworkerslv.
com/authorization). Many employers do not get very
involved in union prevention activities until step 2 because they are often not aware of the union organizing
efforts until this step has been reached. Regardless, managers should have a thorough understanding as to what
behaviors are lawful and unlawful under the NLRA.
If a majority vote is received for the union, the NLRB
certifies the union and the union is then recognized as the
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CHAPTER 13 Labor Relations and Collective Bargaining
exclusive bargaining unit for the workers. The union then enters negotiations with the employer. If a majority do not accept the union, another certification election cannot be held
for 12 months. In fact, in recent years, the majority of union
representation votes have been lost by the union. Even after
a union is certified negotiations often break down. A high
percentage of certified unions never obtain a contract.
Employers also get involved after a union vote and
may work toward a representation decertification (RD),
which also is conducted by the NLRB at least 12 months
after a certification vote. While the petition for an RD
must be made by the rank-and-file workers, management
also is allowed, in the rare case of union misconduct, to
initiate a decertification drive. Usually, decertification
elections are specifically barred when a labor contract is
in effect. The number of NLRB elections declined in
2004 to under 3,000 and lower than the rate in 2002.
Unions won about 54 percent of the votes. Decertification
elections were 15 percent of elections in 2004 (these were
4 percent of elections in 1960).
Traditionally, unions organize workers through campaigns. Bottom-up campaigns begin when workers become dissatisfied with some aspect of their work and contact a union to request organization. Top-down campaigns
are initiated by the union as part of a strategy to increase
their representation in the area or industry. In order to
gain worker support unions employ a variety of tactics
including worker-to-worker campaigns, increasing internal pressure tactics, and community involvement.11 Their
goal is to help build a sense of injustice and a belief that
the union can effectively remedy the wrong.12
Management typically counters the union campaigns
with a campaign of their own. They can communicate
with the workers citing the harmful effects of unions and
hold “captive audience meetings” where workers must
listen to management discuss their reasons for not wanting a union. In regulating the campaign process, the goal
of the NLRB is to promote an environment in which
workers feel free to vote their conscience whether or not
it is for or against unions. By law, workers should not be
subject to threats or intimidation from either the union or
management. Management violations include promising
wages or firing workers for union activity. In recent years,
management has often employed consultants who specialize in refuting the claims of union organizers as well
as more aggressive management tactics. Often the result
is management violating the NLRA and engaging in
such tactics as illegally firing workers for union activity.
Despite the illegality of these actions, there is evidence
that many companies engage in these activities as the
penalties for these actions are weak.13
Many unions feel that they do not have a level playing field in union organizing drives and the regulation of
election conduct. Thus, they will avoid elections where
possible. Recently, some unions have been successful at
obtaining what are known as neutrality agreements from
333
management. These agreements often contain provisions
in which management agrees to recognize the union if a
majority of the workers sign authorization cards and they
waive their rights to wage a countercampaign. Management
will typically agree to a neutrality clause when the union
and management have a preexisting relationship such as
collective bargaining agreement at another location.
T HE E FFECTS
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U NIONS
Workers join unions to improve their wages, working
conditions, and job security. This section presents opinions regarding whether or not unions actually do provide
these improvements and what these effects mean for firm
performance. Estimates of union and nonunion wage differentials range from 3 percent (utilities) to 52 percent
(construction). The private sector percent difference was
22 percent in 2004. Unions also have a positive fringe
benefit effect. In general, those who are usually paid the
least tend to benefit the most from unionization. Studies
show that younger workers, nonwhites, people living in
the South and the West, and blue-collar workers seem
to gain the most from unionization. Interestingly, little
apparent difference exists between the wage gains from
unionization for males and females. Research on publicsector unions shows a 22 percent pay differential for
public-sector employees represented by unions versus
public-sector employees not represented. In 2004, fulltime wage and salary union workers had median weekly
earnings of $781, compared with a median of $612 for
workers not represented by unions.14
Variations in union wage effects across industries
partially occur due to the union’s ability to take “wages
out of competition.” Wages can be taken out of competition in several ways. First, labor demand may be relatively insensitive to wage changes (inelastic). That is,
consumers will absorb the increased labor costs without
offsetting employment effects. The extent of union organization in a particular market also can affect union power.
More unionized markets have greater union/nonunion
wage differentials because of less nonunion wage competition. The extent of bargaining coverage further augments
this effect. This coverage can take several forms. For example, one union may bargain for the entire market—so
that all union firms in the industry have virtually identical
contracts. In the auto industry, the UAW bargains with
one of the big automakers and then uses this contract as a
pattern for remaining settlements. This strategy has become less effective as nonunionized automakers have
gained market share. A union negotiating simultaneously
with numerous employers, such as in steel and coal, provides another example of extensive industry coverage.
A union that bargains at the plant level has much less
power than those that negotiate on a broader basis.
Union advocates maintain that the “collective voice”
of unions reduces worker quit rates, thereby leading to
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retention of experienced workers, lowering a firm’s training
costs, and raising its productivity. Another side benefit is
that management is forced to become more efficient when
faced with the necessity of providing higher wages to
unionized employees.
This suggests that unions may actually have positive
effects on management. If so, why does management
strenuously resist unions? Are they behaving rationally?
Or do they resist unions only because unions threaten
their decision-making autonomy? Two theories exist regarding the unions’ effects upon firms’ productivity. On
one hand, productivity is predicted to decrease in unionized firms because unions create resource misallocation
and demand restrictive work rules. In contrast, the collective voice view predicts that productivity gains may occur
because the union wage effect causes firms to manage better, employ better-quality labor, substitute capital for labor,
and reduce voluntary turnover, leading to the development
of a more experienced and better-trained labor force.
The evidence is mixed regarding the effects of
unions on organizational productivity. Unions tend to
have a negative effect on productivity when there is
relatively greater conflict between the union and management. Stanford professor Jeffrey Pfeffer summed up the
confusing evidence on unions and productivity this way:
“The effects of unions depend very much on what management does.”15 Positive productivity effects generally
tend to be found in competitive industries with higher
union wage effects (i.e., where firm survival apparently
depends upon offsetting the higher wage costs with
increased productivity). One review of the research concluded that, in general, productivity remains higher in
union establishments than in nonunion establishments.
This conclusion is controversial and the subject of much
debate.16 The researchers concluded that when unions
and management are working for a “bigger pie” as well as
fighting over their relative share, the result is higher productivity. Under conditions of poor labor–management
relations, where the focus is on taking a bigger share of
the same size pie, the result is usually lower productivity.
What of the argument that unions raise wages to noncompetitive levels and have thus seriously affected the ability
of some U.S. industries to compete? One surprising study
of 134 industries concluded that “heavily unionized
industries are not found to have lost any more to imports
nor gained any more in exports than comparable U.S.
industries . . . industrial concentration appears to be a significant disadvantage.”17 This means that U.S. industries
facing a more globally competitive environment after less
domestic competition tended to have more difficulty
competing regardless of union status.
If unions do improve productivity, how can management behave rationally by resisting unions? Apparently union productivity effects do not sufficiently outweigh the negative impact of unions on accounting
profits and stock prices. Studies show that unionization
negatively affects accounting profits and shareholder
wealth. For example, shareholder wealth decreases during union organizing campaigns and strikes, and increases during concession bargaining.18 In addition,
unions do not seem to change the overall firm value, but
they do redistribute the firm’s economic profits from
the stockholders to the workers. Research on “high performance work systems” establishes a closer relationship between the absence of labor unions and corporate
financial performance.19
Unions and Quality of Worklife Issues
As we discussed in Chapter 12, quality of worklife issues
G(QWL) came to the forefront in the 1980s and play an
important role in the labor–management relationship.
ASome QWL programs such as job redesign efforts, upTward communication, team-based work configurations,
and quality circles (QCs) have elicited a variety of union
Eresponses.20 Overt hostility and resistance characterize
Ssome unions’ reactions to QWL programs. A significant
faction of the UAW membership at the Saturn plant,
, for example, strongly opposes the negotiated worker involvement programs. These members fear that manageintends to use these programs to circumvent the
Dment
union and the collective bargaining relationship. Other
Emembers cautiously indicate that they prefer the collecbargaining process to QWL programs but will supAtive
port QWL programs if there is no attempt to bust the
Nunion or interfere with the collective bargaining process.
DMany have argued that union support remains critical for
successful implementation of QWL programs. One study
Rcited management neglect in inviting union participation
Aearly enough, or not at all, as a 21contributing factor to
many failures of QWL programs. Generally, in union
settings,management is seen as more careful in evaluatprogram than in
1ing the decision to implement a QWL
firms where a union is not present.22
1 The UAW has noted that the goods that workers
2manufacture and the services they provide must succeed
the marketplace (with good quality) in order to ensure
3in
long-term job and income security for workers. They
Tfurther note that UAW workers have everything to gain
demanding that employees work to achieve the highSby
est possible product and service quality. This means that
QWL programs can be quite important as well as training, up-to-date equipment, and quality materials and resources. These will enable employees to achieve first-rate
quality in goods and services and better guarantee their
own future employment.23
There is limited research on the effects of QWL efforts in union settings. Two studies found that QWL programs did not have any effect upon the firm’s economic
performance.24 However, more recent research found that
unionized firms had more gains from employee participation than did nonunion firms.25 Other research has shown
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that QWL programs can improve the firm’s industrial relations.26 Some early research has, however, elicited
evidence that QWL programs may negatively influence
perceptions of unions. One study found that participants
in employee involvement programs felt that these were
better at resolving differences than collective bargaining.
Similar individuals not in those programs maintained
preference toward collective bargaining.27 In addition,
nonunion companies that encourage communication and
participation programs have been successful in maintaining nonunion status.28
Firms must be cautious in their implementation of
nonunion work teams because of legal concerns regarding violations of the NLRA prohibition regarding company unions. The NLRA states that it is unlawful for an
employer “to dominate or interfere with the formation or
administration of any labor organization or contribute
financial or other support to it.” In the 1994 Electromation case, the U.S. Court of Appeals upheld the National
Labor Relations Board’s ruling that management committees addressing employee dissatisfaction with absenteeism
and attendance bonuses represented illegal employer
domination.29 However, the facts of this case suggest that
management had established these committees to avoid
unionization. Research on QWL is relatively new and
these findings are preliminary; however, they suggest that
QWL programs may have an important influence upon
the labor–management environment.
Union Effects on Worker Satisfaction
Better wages, benefits, and improved working conditions
would seem to predict that union workers also would be
more satisfied than nonunion workers. But evidence
points to the contrary. Supervision, coworkers, and job
content create more dissatisfaction for union workers
than for nonunion workers. Only pay provides more
union satisfaction.30 This may result from unions encouraging members to voice their dissatisfaction rather than to
quit. Voluntary turnover rates are substantially lower under unions. Alternatively, union workers may feel compelled to stay because of the “golden handcuffs” of better
wages, health insurance, and working conditions: they
may feel that they cannot afford to quit when they are dissatisfied. The most recent research indicates that union
membership has no effect on either general job satisfaction or intention to quit.31
Unions and HRM
There can be no question that with a union HRM decisions
are more constrained. In unionized organizations, the
union itself gives employees a voice in the development of
work rules. Termination is generally for cause only. Total
compensation is almost always higher. Staffing and performance management activities are often subject to
335
collective bargaining. There’s no question that management must clearly justify their reasons for termination
when unionized.
C OLLECTIVE BARGAINING *
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Collective bargaining occurs when representatives of a
labor union meet with management representatives to
determine employees’ wages and benefits, to create or
revise work rules, and to resolve disputes or violations of
the labor contract. For almost 16 million workers, collective bargaining represents the primary process for determining their wages, benefits, and working conditions.
Despite the decline in unions and their membership in
recent years, it is unlikely that either unions or collective
bargaining will ever disappear. In fact, there is recent evidence that union activity is surging in some occupations
(e.g., nursing) and developing in others (physicians).
Organizations and unions need to maintain knowledge of bargaining strategies and guidelines in order to
successfully represent their interests. Knowledge of labor
relations and collective bargaining is important for HRM
specialists and general managers. In fact, it is difficult to
separate labor relations as a human resource (HR) function from the many other HR functions. For example,
labor relations is closely tied to HR planning since the
labor contract generally stipulates policies and procedures related to promotions, transfers, job security, and
layoffs. The area of HR where a knowledge of collective
bargaining is probably most critical is compensation and
benefits, since almost all aspects of wages and benefits
are subject to negotiation.
Collective bargaining should be viewed by both the
union and management as a two-way street. This means
that the basic interests of management must be protected
as well as the rights of employees. Both sides have a responsibility to each other. For example, unions should not
expect management to concede to issues that ultimately
would impair the company’s ability to stay in business.
Likewise, management must recognize the rights of employees to form unions to argue for improved wages and
working conditions.
1
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S The Labor Contract
A labor contract is a formal agreement between a union
and management that specifies the conditions of employment and the union–management relationship over a mutually agreed upon period of time (typically two to three
years, but up to five years). The labor contract specifies
what the two parties have agreed upon regarding issues
such as wages, benefits, and working conditions. The
process involved in reaching this agreement is a complex
and difficult job requiring a willingness from both sides
*This section was written by Roger L. Cole and Joseph G. Clark, Jr.
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to reconcile their differences and compromise their interests. This process is also bound to certain “good-faith”
guidelines that must be upheld by both parties.
The Taft-Hartley Act of 1947 (section 8d) states: “to
bargain collectively is [to recognize] . . . the mutual obligation of the employer and representative of the employees to
meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of
employment, . . . or the negotiation of an agreement, or any
question arising thereunder, and the execution of a written
contract incorporating any agreement reached if requested
by either party, . . . such obligation does not compel either
party to agree to a proposal or require the making of a concession.”32 Thus, the law requires that the employer negotiate with the union once the union has been recognized as
the employees’ representative. Good-faith bargaining is
characterized by the following events:
• Meetings for purposes of negotiating the contract are
scheduled and conducted with the union at reasonable
times and places.
• Realistic proposals are submitted.
• Reasonable counterproposals are offered.
• Each party signs the agreement once it has been
completed.
Good-faith bargaining does not mean that either party is required to agree to a final proposal or to make concessions.
The National Labor Relations Board further defines
the “duty to bargain” as covering bargaining on all matters
concerning rates of pay, wages, hours of employment, and
other conditions of employment.33 “Mandatory” issues
for bargaining include wages, benefits, hours of work,
incentive pay, overtime, seniority, safety, layoff and recall procedures, grievance procedures, and job security.
“Permissive” or “nonmandatory” issues have no direct relationship to wages, hours, or working conditions. These
might include changes in benefits for retired employees,
performance bonds for unions or management, and union
input into prices of the firm’s products. Permissive issues
can be introduced into the discussion by either party;
however, neither party is obligated to discuss them or
include them in the labor contract.
Issues in Collective Bargaining
The major issues discussed in collective bargaining fall
under the following four categories:34
1. Wage-related issues. These include such topics as
how basic wage rates are determined, cost-of-living
adjustments (COLAs), wage differentials, overtime
rates, wage adjustments, and two-tier wage systems.
2. Supplementary economic benefits. These include
such issues as pension plans, paid vacations, paid
holidays, health insurance plans, dismissal pay,
reporting pay, and supplementary unemployment
benefits (SUB).
3. Institutional issues. These consist of the rights and
duties of employers, employees, and unions,
including union security (i.e., union membership as
a condition of employment), check-off procedures
(i.e., when the employer collects dues by deduction
from employees’ paychecks), employee stock
ownership plans (ESOPs), and quality-of-worklife
(QWL) programs.
4. Administrative issues. These include such issues
as seniority, employee discipline and discharge
procedures, employee health and safety,
technological changes, work rules, job security,
and training.
While the last two categories contain important issues,
Gthe wage and benefit issues are the ones that receive the
Agreatest amount of attention at the bargaining table. In
recent years, however, issues of job security have become
Tincreasingly important as bargaining items.35 In addiEtion, the unions have adapted to a variety of workplace
changes and have played an important role in defining
Spublic policies. For example, they have been active in
, negotiating family-friendly contract provisions such as
child care, elder care, domestic partnership benefits, and
paternity leaves. They also have been involved in promotDing health and safety protections for their members.36
E
Types of Bargaining
ABargaining between labor and management can take
Nseveral different forms. Three of the most common are
Ddistributive, integrative, and concessionary bargaining.
Distributive bargaining is the most common type of barRgaining and involves zero-sum negotiation. In other
Awords, one side wins and the other side loses. Union em-
ployees may try to convince management that they will
strike if they don’t get the wages or working conditions
1they desire. Management, in turn, may be willing to try to
ride the strike out, especially if they have cross-trained
1other workers or have external replacements to fill in for
2those on strike. In distributive bargaining, unions and
have initial offers or demands, target points
3management
(e.g., desired wage level), resistance points (e.g., unacTceptable wage level), and settlement ranges (e.g., acceptwage level).
Sable Integrative
bargaining is similar to problem-solving
sessions in which both sides are trying to reach a mutually beneficial alternative (i.e., a win-win solution). Both
the employers and the union try to resolve the conflict to
the benefit of both parties. One example might consist of
providing retraining opportunities to employees to avoid
having to lay off workers. Plant safety and incentive pay
systems are other programs that involve collaborative
efforts between management and employees. Another
name for this type of bargaining has been called “interestbased bargaining.” The objective is for both parties to find
the common ground between them, to build relationships,
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CHAPTER 13 Labor Relations and Collective Bargaining
and to eliminate the adversarial elements of traditional
bargaining. This was used when a public electric and water utility, Salt River Project, located in Phoenix, Arizona,
was experiencing tension with the International Brotherhood of Electrical Workers (IBEW) Local 266. To resolve
an impasse in communications, they tried using a new approach, interest-based bargaining. Both sides shared information about their interests and concerns and they created
a list of possible solutions to best meet everyone’s needs.
Concessionary bargaining involves a union’s giving
back to management some of what it has gained in previous bargaining. Why would labor be willing to give back
what it worked so hard to obtain? Usually such a move is
prompted by labor leaders who recognize the need to assist employers in reducing operating costs in order to prevent layoffs and plant closings. Thus, it is often economic
adversity that motivates concessionary bargaining. A
good example is the agreement between GM and the International Union of Electric Workers that granted GM
around-the-clock operations, wage and benefit concessions for new hires, and a two-week mass vacation. The
concessions were made to save over 3,000 jobs at a plant
in Ohio. In some cases, despite a financial crisis, the
union may not be willing to concede. This may be because the union does not view management’s arguments
as credible. Thus, the degree of trust between management and the union may influence the extent to which
concessionary bargaining occurs. Recent evidence suggests that it is not clear whether concessions even help the
firm financially.
What kinds of concessions are sought by employers?
Often they relate to wages and benefits (e.g., health insurance and pensions); for example, putting a cap on increases in compensation or increasing the premium. For
example, in return for wage concessions, the union may
receive a gain-sharing plan that links compensation with
performance data, or some form of profit-sharing or stock
ownership. Other demands made by unions in return
for concessions include restrictions on work rules, transfers of work, subcontracting, and plant closures; getting
advance notice of shutdowns and severance pay; and
transfer rights for displaced employees.
Conducting Labor Contract Negotiations
Preparing for Negotiations
Because of the complexity of the issues and the broad
range of topics discussed during negotiating sessions, a
substantial amount of preparation time is required. To
prepare for negotiations, one must have a planning strategy. Negotiating teams typically begin data gathering for
the next negotiation session immediately after a contract
is signed. Preparation includes reviewing and diagnosing
the mistakes and weaknesses from previous negotiations
and gathering information on recent contract settlements
in the local area and industrywide (e.g., comparative
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industry and occupational wage rates and fringe benefits).
Preparation also includes gathering data on economic
conditions, studying consumer price indices, determining
cost-of-living trends, and looking at projections regarding
the short-term and long-term financial outlook. Internal
to the firm, data such as minimum and maximum pay by
job classification, shift work data, cost and duration of
breaks, an analysis of grievances, and overtime data are
almost always of interest to both sides. Often unions and
large corporations have research departments that collect
necessary data for negotiations. Management is likely to
come armed with data regarding grievances and arbitration, disciplinary actions, transfers, promotions, layoffs,
overtime worked, individual performance measures, and
wage payments.
During the preparation phase of contract negotiations, employers develop a written plan covering its bargaining strategy. The plan takes into account what the
employer considers the union’s goals to be and the degree
to which it is willing to concede on various issues. Such a
plan is useful to the negotiators because it helps them to
identify the relative importance of each issue in the
proposal.
Both the union and management send their negotiating teams to the bargaining table. The union’s negotiating
team generally consists of local union officials, union
stewards, and one or more specialists from the national
union staff. Management’s negotiating team usually consists of one or more production or operations managers,
a labor lawyer, a compensation specialist, a benefits specialist, and a chief labor relations specialist, who heads
the team.
Meetings in Contract Negotiations
One of the most important objectives of early bargaining meetings is to establish a climate for negotiations.
In other words, determining whether the tone of the negotiations is going to be one of mutual trust with “nothing up our sleeves,” one of suspicion with a lot of distortion and misrepresentation, or one of hostility with a
lot of name calling and accusations. Also, early meetings are used to establish the bargaining authority of
each party and determine rules and procedures that will
be used throughout the negotiation process. Both parties try to avoid disclosing the relative importance they
attach to each proposal so that they will not have to pay
a higher price than is necessary to have the proposal accepted. Generally, each side tries to determine how far
the other is willing to go in terms of concessions, and
the minimum levels each is willing to accept. It is best
not to establish a position that is too extreme, nor one
that is too inflexible. For instance, “take it or leave it”
proposals are typically ineffective. One of the best
examples of a “take it or leave it” philosophy of bargaining was at General Electric from the 1940s to
the 1970s. During this period, GE’s policy was that
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PART IV Compensating and Managing Human Resources
Union’s
desired
solution
Employer’s
tolerance
limit
Union’s
expectation
Bargaining
zone
Employer’s
expectation
Union’s
tolerance
limit
Employer’s
desired
solution
Figure 13-6 Desires, Expectations, and Tolerance
Limits That Determine the Bargaining Zone
Source: From Psychology of Union–Management Relations, 1st
edition by Stagner/Rosen. © 1966. Reprinted with permission of
Wadsworth, a division of Thomson Learning: www.thomsonrights.com.
Fax 800 730-2215.
management initially brought to the bargaining table its
final proposal. The unions obviously viewed this as unethical and illegal (lack of good-faith bargaining). The
Supreme Court ruling supported the unions and found
them guilty of bad-faith bargaining based upon their
“take-it-or-leave-it” policy combined with other tactics
designed to circumvent the union. Thus, GE eventually
relinquished this policy.
Successful negotiations are contingent upon each
side remaining flexible. It is hoped that the end result
will be a “package” representing the maximum and minimum levels acceptable to each of the parties. The bargaining zone, which is illustrated in Figure 13-6, is the
area bounded by the limits that the union and employer
are willing to concede. If neither the union nor management is willing to change its demands enough to bring
them within the inside boundaries of the bargaining
zone, or if neither is willing to extend the limits to accommodate the other’s demands, then negotiations reach
impasse.
The union team is first to present its initial proposals. Usually, the original union proposal demands more
than it expects to end up with (i.e., excessive demands
in terms of changes in, additions to, and deletions from
the previous contract), which will allow leverage for
trading off for management concessions. The management negotiating team then states the management
case, often presenting unrealistic counterproposals and
data supporting the view that union workers are treated
well. The early meetings are often characterized by
both parties remaining far apart on the issues; however,
as negotiations proceed, there is generally movement
toward a pattern of agreement. As topics are discussed
and considered, mutual concessions are offered, counterproposals are made, and eventually a tentative agreement is reached.
When a tentative agreement is reached, in most
cases, the union members vote on the contract. If it is approved, the contract is ratified; if it is voted down, more
negotiating takes place. The next step involves the actual
drafting of a formal document, attempting to keep it in
simple, clear, and concise terms. In fact, however, most
contracts are difficult to read and some sections are virtually incomprehensible for the rank and file (e.g., most
often sections on seniority and grievance procedures).
The last step is the actual signing of the agreement by the
Grepresentatives of the union and management. The typical
labor agreement defines the responsibilities and authority
Aof unions and management and stipulates what manageTment activities are not subject to union authority (e.g.,
purchasing and hiring).
E
SResolving Bargaining Deadlocks and
Impasse Resolution
, If neither the organization nor the union is willing to re-
main flexible and make concessions, then negotiations
a deadlock or impasse that can eventually result in
Dreach
a strike on the part of the union or a lockout on the part of
Emanagement. So how can these breakdowns in negotiabe avoided? One way is to delay consideration of
Ations
the more difficult issues until the latter stages of bargainNing and, for the time being, to simply agree to disagree on
Dthe tougher decisions. The easier questions can be considered in the beginning, thus giving both sides a feeling
Rof making progress. Another way to avoid breakdowns in
Anegotiations is for each side to be prepared to offer propositions and to accept alternative solutions to some of the
more controversial issues.
1 If the two parties are unable to compromise and resolve a deadlock, then they have the option of calling in a
1mediator, a neutral third party who reviews the dispute
2between the two parties and attempts to open up commuchannels by suggesting compromise solutions
3nication
and concessions. Mediation is based upon the principle of
Tvoluntary acceptance. This means that mediators act as
between the parties to help clarify the issues
Sgo-betweens
but that they have no conclusive power or authority to impose or recommend a solution. In fact, either party may
accept or reject the mediator’s recommendations. The
Federal Mediation and Conciliation Service (FMCS) was
established by the Taft-Hartley Act. Mediators perform
their services for free and mediate about an average of
15,000 labor disagreements per year.37
Sometimes government intervention is necessary to
resolve deadlocks. This is generally in cases where a
work stoppage would threaten the national security or the
public welfare. For example, one of the provisions of the
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Taft-Hartley Act is a national emergency strike provision
that gives the president of the United States the power to
stop a strike if it imperils national health or safety.
decision was made in 1938, it was not until the 1980s that
the ruling was frequently applied. A recent example is the
Northwest Airlines strike by its machinists. Northwest
had replacement workers ready to go the very first day of
the strike action by the Aircraft Mechanics Federal
Association. Many workers who went on strike have
found that their jobs were not waiting for them when the
strike ended.43
Since President Reagan hired nonunion workers to
replace air-traffic controllers in 1981, management’s hiring of nonunion members has been a regular and successful strikebreaking weapon. Nonetheless, it appears that in
some industries strikes lessen the value of struck firms
and enhance the value of their competitors.44
The Union’s Economic Power in
Collective Bargaining
The basis for the union’s power in collective bargaining is
economic and generally takes one of three forms: striking
the employer, picketing the employer, or boycotting the
employer.38
Striking the Employer
One tool a labor union can use to motivate an employer
to reach an agreement is to call a strike. A strike is simply a refusal on the part of employees to perform their
jobs. Strikes occur when the union is unable to obtain an
offer from management that is acceptable to its members. Strikes are rare. According the Bureau of Labor
Statistics 17 major work stoppages began during 2004
and one major work stoppage continued from 2003,
idling 170,700 workers and resulting in 3.3 million
workdays of idleness. Comparable figures for 2003 were
14 stoppages, 129,200 workers idled, and 4.1 million
workdays of idleness.39
Before a union goes on strike, it must first assess the
consequences of a strike and its members’ willingness to
make the sacrifices and endure the hardships (e.g., lost
pay) that are part of striking. Even when the union perceives the strike as necessary, employees may not be
willing to strike. Factors such as loyalty to the organization and commitment to the job have been shown to differentiate workers who are willing to strike and those
who are not.40 Another part of this assessment also involves determining whether or not the employer can
continue operating by using supervisory and nonstriking
employees.
There are a number of risks to the union and its members attached to striking. For one, replacement employees
can vote the union out in an NLRB-conducted decertification election. Also, a strike can result in a loss of union
members. The public also may withdraw its support from
union members and often does.
The power of the strike to pressure management
has been seriously diminished during the past decades.
Automation, recent court rulings, and a growing number
of unemployed workers willing to serve as replacements
have helped management. After Congress passed the
Wagner Act in 1935, workers’ rights to organize and to
strike were guaranteed. However, the 1938 Supreme
Court ruling in NLRB v. Mackay Radio & Telegraph41
weakened this right by permitting the permanent replacement of economic strikers by management.42 The use of
replacement workers seriously undermines the economic
pressure that strikes once had. Even though this court
339
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Picketing the Employer
Another basis for union power is the picket. The picket is
used by employees on strike to advertise their dispute
with management and to discourage others from entering
or leaving the premises. Picketing usually takes place
at the plant or company entrances. It can result in severe
financial losses for a firm and eventually can lead to a
shutdown of the plant if enough employees refuse to
cross the picket line. Picket lines can become very emotional at times, especially when employees or replacements attempt to cross them. These people may become
the target of verbal insults and sometimes even physical
violence. Companies hire security firms to protect nonstriking and replacement workers.
Boycotting the Employer
Boycotting involves refusing to patronize an employer—
in other words, refusing to buy or use the employer’s
products or services. As an incentive to employees to
honor the boycott, heavy fines may be levied against
union members if they are caught patronizing an employer who is the subject of a union boycott. The union
hopes that the general public also will join the boycott to
put additional pressure on the employer.
Generally, there are two types of boycotts: the primary boycott and the secondary boycott. The primary
boycott involves the refusal of the union to allow members to patronize a business where there is a labor dispute.
In most cases, these types of boycotts are legal. A secondary boycott refers to the union trying to induce third
parties, such as suppliers and customers, to refrain from
any business dealings with an employer with whom it has
a dispute. This type of boycott, as provided for under the
Taft-Hartley Act, is illegal.
The Employer’s Power in
Collective Bargaining
Employers may come to the bargaining table with their
own base of power. Foremost is their ability to determine
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how to use capital within the organization. This enables
them to decide whether and when to close down the company, the plant, or certain operations within the plant; to
transfer operations to another location; or to subcontract
out certain jobs. All these decisions must be made in accordance with the law. This means that management must
be sure that its actions are not interpreted by the National
Labor Relations Board (NLRB) as attempting to avoid
bargaining with the union.
If an employer is confronted with a strike by one or
more of its unions, then the firm must weigh the costs
associated with enduring the strike against the costs of
agreeing to the union’s demands. There are a number of
considerations the employer must take into account:
(1) how the employer’s actions will affect future negotiations with the union, (2) how long the firm and the
union can endure a strike, and (3) whether business can
continue during the strike. Today, employers are more
able to endure strikes than they were in the past. This is
because the permanent hiring of replacements has
greatly weakened the power of the strike. Research
finds that the use of replacement workers usually prolongs strikes.45
In general, union members themselves are less willing to support a strike, and without strike unity, the power
of the strike is negligible. Also, technological advances
have increased some employers’ ability to operate during
a strike with a substantially reduced staff. Strikes in the
public sector are illegal in most states, although walkouts
have occurred in some states where strikes are illegal.
Federal employees cannot strike pursuant to the 1978
Civil Service Reform Act.
The lockout is another source of power for the
employer. A lockout is basically a shutting down of
operations, usually in anticipation of a strike. The lockout
also can be used to fight union slow-downs, damage to
property, or violence within the plants. Generally, lockouts are not used very often because they lead to financial
revenue losses for the firm. Many states allow employees
to draw unemployment benefits, thus weakening the
power of the lockout.
Administration of the Labor Contract
The earlier part of this chapter dealt with the negotiation of the labor contract. In this part of the chapter, we
will address the application and interpretation of the
labor agreement. Despite the incredible amount of
time and effort that goes into negotiating and carefully
writing the contract, most are written in such broad,
ambiguous terms that a great deal of interpretation is
required in order to put the contract to work. Most rankand-file union workers do not clearly understand the
labor contract.
Most of the problems associated with the interpretation or application of the labor contract are resolved at
the lower levels of the grievance procedure (i.e.,
between the supervisor and the union steward). Grievance procedures and the time limits associated with them
are generally spelled out in the contract for the purpose
of reaching quick, fair, and equitable solutions to contract problems. Unresolved grievances proceed progressively to higher and higher levels of management and
union representation. If the grievance procedure fails
(i.e., the grievance reaches a deadlock or stalemate),
most contracts stipulate that the final step will be binding
arbitration. Arbitration involves bringing in a third
party, an impartial outsider mutually agreed upon by
both parties, to decide the controversy. In the following
section, both the grievance procedure and the arbitration
Gprocess will be reviewed. Figure 13-7 illustrates what
these processes look like.
A
TGrievance Procedure
EWhen an employee believes that the labor agreement
has been violated, the employee files a grievance. A
Sgrievance is a formal complaint regarding the event, ac, tion, or practice that violated the contract.46The grievance
procedure serves a number of purposes. The primary
purpose is to determine whether the labor contract has
Dbeen violated. Also, the grievance procedure is designed
settle alleged contract violations in as friendly and orEto
derly a fashion as possible, before they become major
Aissues. Other purposes of the grievance procedure inNclude preventing future grievances from arising, improving communication and cooperation between labor
Dand management, and helping to obtain a better climate
Rof labor relations. The grievance procedure also helps to
clarify what often is not clear in the contract (e.g., definAing lawful or unlawful conduct). Grievance procedures
generally establish the following: (1) how the grievance
will be initiated, (2) the number of steps in the process,
1(3) who will represent each party, and (4) the specified
1number of working days within which the grievance
must be taken to the next step in the hearing. Failure to
2comply with time limits may result in forfeiture of the
3grievance.47
T
Resolution of Grievances
SIn most cases the labor contract stipulates that the employee’s grievance be expressed orally or in writing to
the employee’s immediate supervisor. One advantage
of expressing the grievance in written form is that it
reduces the chance that differing versions of the grievance will be circulated. It also forces the employee to
approach the grievance in a comparatively rational
manner, thus helping to eliminate or reduce the likelihood of trivial complaints or feelings of hostility. Generally, the grievance is processed through the
union steward, who will discuss it with the employee’s
supervisor.
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341
Employee
with a
grievance
5 workdays
Verbal Presentation
Employee;
possibly
shop steward
Immediate
supervisor
5 workdays
Written Grievance
Department
manager
Personnel/
industrial
relations
director
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Business
representative,
grievance
committee
10 workdays
National union
representative
and
local union
representative
D
15 workdays
Arbitration E
A
Figure 13-7 A Grievance Procedure
N Labor Relations, 2nd ed., p. 530. Reprinted with permission of the author.
Source: A Grievance Procedure R. E. Allen and T. J. Keaveny, Contemporary
D
Most grievances are settled early in the process. Set- R different from that played by the arbitrator, whose decitlement generally occurs after an employee has either pre- A sions are final and binding.
sented his or her grievance in writing to the supervisor or
appealed to the next higher level. An early settlement is
contingent, however, on each side being willing to listen
to the other side and discuss the problem in a rational and
objective manner. Settlement can be hampered if both
sides enter the procedure with an attitude of “win-lose” as
opposed to “win-win.”
When a grievance does not get settled in the first or
second step, it goes to a higher level, often to company
representatives (e.g., a general superintendent) and union
representatives (e.g., a grievance committee). These representatives meet to further discuss the grievance and try
to reach a solution agreeable to all. In most cases, the
burden of proof in a grievance proceeding is on the union.
Sometimes a mediator will be brought in to help resolve
the grievance. The mediator’s role in a grievance resolution is much the same as in contract mediation (i.e., to get
the two parties to communicate and to offer compromise
solutions). The mediator’s role is not to establish which
side is right or wrong. His or her recommendations and
suggestions can be accepted or rejected by either party.
The role of the mediator, as will be seen later, is much
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Arbitration Process
While there is no law that forces parties to include arbitration in their labor agreements (either party can refuse
to incorporate any arbitration provisions), approximately
96 percent of all labor agreements in the United States do
provide for arbitration as the final step in the grievance
procedure. In the majority of grievances filed, arbitration
is not necessary since resolutions are usually made during
lower-level discussions. In fact, arbitration should be the
last resort after all other options in the grievance process
have failed. Since both parties share the cost of arbitration, there is a financial disincentive to rely upon it.
Arbitration involves bringing in an impartial third party
(referred to as the arbitrator or adjudicator), who is mutually agreed upon by both parties to break the deadlock
between the union and management. Unlike the mediator’s role of providing recommended solutions, the arbitrator’s role is to make a ruling that is “final and binding
upon both parties.”
Major League baseball is one organization that uses
binding arbitration in salary determination. In this form
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of negotiation, the player and the team each puts in an
offer for what it considers to be an acceptable salary. If
no agreement is reached, the arbitrator hears arguments
from both sides and chooses one of the figures. The decision reached then becomes binding to both the player and
the team.
Arbitration is generally not used as a method of
breaking a deadlock in negotiating a new labor contract in
the private sector. This is because both labor and management would prefer to make their own decisions regarding
conditions of employment rather than have these decisions made by a third party (i.e., the arbitrator). However,
because most public-sector workers do not have the
right to strike, arbitration is often used as a substitute for
the strike.
The Decision to Arbitrate The decision about whether
or not to take a grievance to arbitration depends upon a
number of factors and circumstances. At least two things
might happen before arbitration becomes necessary:
(1) the union could withdraw the grievance or (2) the employer could give in. If neither of these happens, then
both sides must take into account whether or not the case
is important enough to justify the costs in terms of time,
money, and effort. They also should determine what the
chances are for a favorable ruling.
According to the duty of fair representation doctrine,
unions cannot ignore their legal obligation to provide assistance to their members who are pursuing a grievance.
Even if the union knows that an employee’s case is weak,
it often pursues the case to demonstrate its commitment
to its members. In addition, management cannot refuse to
arbitrate unresolved grievances if the labor contract contains an arbitration clause.
Selection of the Arbitrator Most labor agreements
state that union and management will select an arbitrator
from a panel of names submitted by either the FMCS or
the American Arbitration Association (AAA). Neither
party is, however, obligated to use either service. One of
these organizations will provide the two parties with a
list of names (usually seven) from their roster of arbitrators. The two parties will then agree upon an arbitrator
through a process of elimination or some other mutually
acceptable procedure. Many labor contracts stipulate a
procedure for appointing an arbitrator. In some cases, a
permanent arbitrator may be appointed under the terms
of the labor agreement. The advantages of using a permanent arbitrator are that it saves time in the selection
process, the arbitrator is already familiar with the contract and the current state of labor relations in the company, and there is a greater likelihood of uniformity in
decisions because there tends to be more consistency in
the interpretation of the contract. The other option for
selecting an arbitrator is what is known as the “ad hoc
method,” which simply calls for a different arbitrator for
each case. Despite the fact that the selection process
takes longer, the ad hoc method is more popular precisely because the parties are not stuck with the same
arbitrator for every case.
The Arbitration Process While arbitration hearings
are considered quasi-judicial, they are less formal than
court proceedings. The arbitration hearing begins with a
submission agreement, either oral or written, that describes the issues to be resolved through arbitration.
Once the issues are presented, it is up to each of the parties to educate the arbitrator about relevant issues, facts,
Gevidence, and arguments. The arbitrator does not play
Athe role of fact finder; however, he or she does have the
right to question witnesses or to request additional facts.
TInterestingly, union complaints of employers’ failures to
Edisclose information for collective bargaining purposes
have increased.
S Arbitrators are not bound by formal rules of evidence
, like those used in a court of law. For example, hearsay
evidence may be introduced as long as it is identified as
such. In addition, throughout the arbitration proceedings,
Da court recorder may be present to prepare a transcript of
the hearing.
E
ABasis for the Arbitrator’s Decision and Award
NAfter hearing all of the evidence, the arbitrator writes his
or her opinion supporting the decision and award. This
Dincludes providing written rationale for the decision (i.e.,
Ran explanation for why the decision was made the way it
The written opinion of the arbitrator presents the
Awas).
basic issues of the case, the pertinent facts, the position
and arguments of each party, the merits of each position,
the reasons for the case. As a rule of thumb, the arbi1and
trator has 30 days in which to consider the evidence and
1to prepare a decision.
2 A fair decision and award must be based strictly
upon the contract if relevant contract language exists.
3Also, they should be based upon an accurate assessment
Tand interpretation of the contractual clauses of the labor
agreement. The contract is the final authority. That is why
Sthe contract language is so important; it should be as
clear-cut and precise as possible. Unfortunately, contractual language usually is unclear and ambiguous and has
many different meanings. When contract language is
silent, such factors as past practice, negotiation history,
and other relevant laws play an important role in the
arbitrator’s decision.
In reaching a decision, an arbitrator must decide
if the employee was accorded due process. The arbitrator must also determine whether the employer had just
cause for any actions taken against the complainant.
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One final consideration for the arbitrator is to make
sure that his or her decision is not based upon precedents established in previous cases, but rather on the
facts of the current case. The arbitrator’s awards should
be clear and to the point. If the union receives the
award, the arbitrator should state explicitly what actions the employer must take to comply with the provisions of the contract.
Criticisms of the Arbitration Process
Probably the criticisms heard most often about arbitration
relate to costs and delays. Arbitration can be both expensive and time-consuming. However, supporters of arbitration will counter that argument with the fact that the costs
associated with strikes and lockouts are even greater. The
average fee for an arbitrator now typically exceeds
$2,000 per day, plus expenses. These costs include all the
arbitrator’s expenses such as hotel, travel, and meals; his
or her time to analyze and write up the case and opinion;
and other miscellaneous costs such as those associated
with lawyers and stenographers.
A few strategies have been found to reduce the costs
of arbitration. These include developing a system to
ensure that only grievances of high importance to the
union and employer end up in arbitration, using arbitrators from the local area, consolidating grievances into one
hearing, and having the arbitrator issue an award without
providing a detailed written opinion.
The arbitration process is also frequently criticized
for being too time-consuming. Cases often become
backlogged due to arbitrators’ busy schedules. Also, the
actual hearings get drawn out because of the need to
read lengthy transcripts or briefs. Finally, the writing of
the opinion is very time-consuming. Several things can
be done to cut down on this excessive time. These include using new arbitrators with smaller case loads,
creating a permanent panel of arbitrators from which to
choose, and cutting out transcripts and posthearing
briefs (i.e., having the arbitrator take his or her own
notes).
Some employers try to reduce arbitration time and
costs by using a form of expedited arbitration sometimes
referred to as miniarbitration. Miniarbitration requires
that a hearing be held within 10 days after an appeal is
made. Also, arbitration hearings are completed in one
day, the arbitrator’s decision must be made within
48 hours after the close of the hearing, there are no transcripts or briefs, and the fee is paid for only the hearing
day. Miniarbitration is not always appropriate, but it generally works well with simple, routine cases. Another
alternative is a process called grievance mediation, which
combines aspects of both mediation and arbitration. It is
much less formal than arbitrations, with no briefs or
cross-examinations of witnesses.
C URRENT AND F UTURE U.S. T RENDS
L ABOR R ELATIONS
343
IN
Union Membership
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The future of unions in the United States is unclear. There
can be no question that political power at the state and
federal levels has diminished. Legislation dealing with
how unions can spend members’ dues will be on many
state legislative agendas. Republicans tend to support
“paycheck protection” ballot initiatives that give union
members more say in how their money is spent. With the
unions suffering from declining membership and unfavorable legislation, a new movement has begun within the
union leadership to place greater emphasis on union
organizing.
Five of the largest AFL-CIO affiliates formed a separate coalition in 2005 in order to focus on organizing.
The Change to Win Coalition is composed of unions
that were very unhappy with the leadership of AFL-CIO
President John Sweeney, who was reelected in 2005. The
new coalition is made up of the Service Employees International Union, the United Food and Commercial
Workers Union, Unite Here, the Laborers’ International Union, and the International Brotherhood of
Teamsters. The coalition maintains that the AFL-CIO
has spent too much money on politics and not nearly
enough to organize new members. The five unions represent 5 million workers. The Coalition pledges to devote
75 percent of its income to organizing.
Unions continue to challenge team-based productivity improvement programs as violations of NLRA. They
have successfully blocked the Republican-supported
Teamwork for Employees and Management (TEAM)
Act. A ruling by the NLRB upheld a claim by the union at
DuPont’s largest chemical plant that the company’s quality circles (QCs) constituted an employer-dominated
labor organization and thus violated NLRA as an unfair
labor practice. A similar ruling also affected Electromation, Inc. These rulings make the environment unclear as
to the continued formation of employee committees and
have left many organizations wary of testing empowerment programs in a union environment. Of course, QCs
are still legal if first agreed to as part of a collective
bargaining contract.
The widening wage gap also suggests that workers
on the lower rung of the economic ladder feel more
inequity and may be willing to risk jobs for economic
gain. Contingent workers also may feel a sense of inequity relative to those in more standardized work
arrangements with whom they are working side-by-side.
These factors suggest that workers may be more receptive
to unions than when working conditions were more favorable and equitable. In 2000, the NLRB extended the
rights guaranteed by the NLRA to temporary and other
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contingent workers although these unions must reside in
a separate bargaining unit.48 There are over 35 million
temporary workers.
Unions are gaining support among women, minorities, and immigrants.49 Since the rate of women and minorities entering the workforce is higher than the rate for
white males, this represents a bright spot for the future
of unions. In fact, one highlight for unions in the early
part of the 21st century is the increase in the number of
women who joined unions and the growth of unionism
among nurses, a fast-growing occupation with critical
real (and projected) shortages.
Most experts predict that if union representation is to
increase, the focus of organizing must be on clerical
workers, data processors, salespersons, nurses, auditors,
financial services, child care workers, computer technicians, and other major occupations of the service sector.
In many of these jobs, women represent the majority
of workers. Interestingly, while the total of union membership declined in the 1990s, the number of women
who belong to unions increased in the 90s relative to the
80s. Overall, as of 2004, 11.1 percent of working women
were union members, compared to 13.8 percent of male
workers. From the perspective of union organizers, while
this signifies improvement and expansion, there is still a
long way to go.
A prime and successful target of late has been nursing home employees who toil at very difficult and physically taxing jobs at slightly more than the minimum
wage. The Service Employees International Union won
the right to represent 75,000 home care workers in Los
Angeles County in 2000. Workers reported that they
voted in the union to raise their wages from $5.75 and
gain health insurance and vacation time. This is the single largest gain for unions anywhere since the first auto
contracts were signed over 70 years ago. Unions even
won 25 of 37 elections in the South for health care workers and over 75 percent of elections across the country in
the late 90s.50
Many physicians are unionizing against health maintenance organizations due to low fees, excessive patient
loads, and increased interference in what physicians
believe to be their decision making regarding medical
treatment.51 The Federation of Physicians and Dentists
now claims over 40,000 members as of 2005.52
There are few recent and successful union organizing
efforts. In 2005, Hollywood casting directors (the people
who pick the actors) voted to become Teamsters. Says
Gary Zuckerbroad, a casting director and organizer who
weeds out auditioning actors, “Every other major craft in
the entertainment industry is unionized. Casting directors
get no residuals—writers do.” But a key question in this
case is whether casting directors, given their jobs and as
independent contractors, are even protected by the
NLRA. Are they management since they participate in
hiring the actors? Teamsters represent over 4,000 location
manager and studio drivers; they will probably refuse to
cross picket lines.
The trend in recent court rulings and NLRB decisions is certainly not favorable for unions. “The cumulative effect is to decrease the capability of unions to organize” says Theodore St. Antoine, former Dean of
University of Michigan Law School and professor of
labor law. These rulings, the anti-union political power
in Washington (and elsewhere), plus the growing conservatism of the federal judiciary should make labor organizing even more difficult and, given the decline in
unions in most sectors of the U.S. economy, things have
apparently gone from quite bad to nearly catastrophic in
terms of union organizing.
G As of 2005, no American Wal-Mart worker belonged to a union. Wal-Mart’s prices are 14 percent
Alower than its competitors for lots of reasons (e.g.,
Teconomies of scale, price control pressures on suppliers,
technology on products bought and sold, cheaper imEports). Low wages are certainly another factor. Sales
Sclerks in some areas of the United States earn substantially less at Wal-Mart than unionized workers doing es, sentially the same work for competitors. Health care
benefits are estimated to be 30 percent less than coverage
workers within the same industry. There is no doubt
Dfor
that Wal-Mart will continue to be a high priority target
Efor union organizing.
is a lot at stake for managers too. Research
AshowsThere
that managers who preside over a successful union
Norganizing effort are much more likely to be fired and not
Dpromoted. Many former Wal-Mart managers, for example, have reported that they were warned they would be
Rfired if any part of their workforce even authorized an
Aelection.
1Public-Sector Union Membership
While private-sector union membership has been drop1ping, public-sector, or government employees’, unioniza2tion has been on the increase. Public-sector employees
have less bargaining power than private-sector
3generally
employees. This is because unions often have to negotiate
Tor bargain with more than one person or group. Also,
governmental entities prohibit striking. Colorado
Smany
and Florida, for example, forbid striking by any state employee, including teachers. However, many state employees in midwestern states have maintained the right to
strike. Visit the Web site of the National Education Association (nea.org) for a study of teacher salaries as a function of the right to strike.
The most sophisticated (and successful) of the service
sector unions has been the American Federation of State,
County, and Municipal Employees (AFSME), which emphasizes workplace dignity and safety, pay equity programs (comparable worth), resistance to performance and
electronic monitoring, and career development. AFSME,
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an affiliate of the AFL-CIO, has 1.3 million members.
According to the Philadelphia Inquirer, “AFSME seems to
represent labor’s future. A majority of its members are
women, nearly a quarter of them are minorities, and more
than half are younger than 40.”53
345
and GM and the Communications Workers of America
with AT&T. These programs were jointly funded by management and the union. They were designed to help employees prepare for re-employment in the face of layoffs
or to help workers gain more marketable skills that could
be used within or outside the firm.55
Mergers and Acquisitions
A common occurrence today is for a new company to buy
a failing (or failed) business. What then are the legal obligations of the new company with regard to active collective bargaining agreements? Federal labor law addresses
the duties of the new employer to recognize and bargain
with the predecessor’s union. In the 1987 case Fall River
Dyeing & Finishing Corp. v. NLRB, the U.S. Supreme
Court established that when (1) a successor employer
shows “substantial continuity” in business operations,
(2) the bargaining unit is appropriate (performing essentially the same jobs under the same working conditions),
and (3) the predecessor employed a majority of the new
employer’s workers, then the successor employer is required to recognize and bargain with the predecessor
union.54 However, there is no duty imposed on the successor employer to hire the predecessor’s workers unless the
failure to hire them was based upon their union status.
Also, the successor is not legally required to adopt an old
collective bargaining agreement that was made with the
predecessor.
Union lobbyists have been successful in passing
legislation regulating mergers and acquisitions. According to the Investor Responsibility Research Center,
39 states now have some form of antitakeover statute.
This legislation typically requires a lengthy waiting period for completion of a takeover or the approval by the
corporation’s board of directors. Legislation enacted in
Massachusetts is considered the most favorable for
unions. Hostile takeovers in Massachusetts require
approval by the board of directors, and a long waiting
period is stipulated for the takeover. Workers laid off
within two years of the takeover get severance pay, and
new management must recognize all existing collective
bargaining agreements.
Retraining Provisions
Mergers and acquisitions, downsizing, and deregulation
have all imposed great threats to job security, particularly
for union workers. One of the key ways that unions have
begun to deal with this threat is through retraining provisions in collective bargaining agreements. For example,
job security has become a prime concern of unions in the
deregulated and technologically changing telecommunications industry.
Some unions have cooperated with management to
enhance employee development in order to limit downsizings and maintain jobs. Model programs have ...
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