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Make sure instructions are followed; write in apa format, please cite sources (4 or more) and utilize the reading material as well and word count should be 1500 or more excluding sources.

Case Study: Labor Relations

Unions, Labor Law, and Managerial Perspectives
Complete the questionnaire in Form 13.2.1 on page 646. Following this step, select three statements and conduct research to gain a greater understanding of these statements in this exercise. Based on this research, cross out any of your original ratings and replace them with "more educated" judgments. Then answer the following question:

1.Based on this research and analysis, how did your perspectives change, if any? Explain your rationale whether your views changed or remained the same.

Case Study: Labor Relations
Organizing a Union
(Note: Write one letter to be used in arguing the union organizer's role and one letter representing the general manager role in this case). Read the case titled, "Organizing a Union." Write the following letters:

2. Letter #1: You will assume the role of union organizer and write a letter that argues his position in this case.

3. Letter #2: You will then change hats and write a letter as the general manager and present his arguments in this situation.

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ber87251_ch13_326-349 C 1/23/06 H A P 13:21 Page 326 T R E 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 ber87251_ch13_326-349 1/27/06 8:17 Page 327 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, ber87251_ch13_326-349 328 1/23/06 7:28 Page 328 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 ber87251_ch13_326-349 1/23/06 7:28 Page 329 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. ber87251_ch13_326-349 330 1/23/06 7:28 Page 330 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 ber87251_ch13_326-349 1/27/06 8:17 Page 331 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. ber87251_ch13_326-349 332 1/23/06 7:28 Page 332 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 ber87251_ch13_326-349 1/27/06 8:17 Page 333 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 G A T E S , D E A N D R A 1 1 2 3 T S OF 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 ber87251_ch13_326-349 334 1/23/06 12:00 Page 334 PART IV Compensating and Managing Human Resources 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 ber87251_ch13_326-349 1/23/06 12:00 Page 335 CHAPTER 13 Labor Relations and Collective Bargaining 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 * G A T E S , D E A N D R A 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 1 2 3 T 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. ber87251_ch13_326-349 336 1/23/06 7:28 Page 336 PART IV Compensating and Managing Human Resources 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, ber87251_ch13_326-349 1/23/06 7:28 Page 337 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 G A T E S , D E A N D R A 1 1 2 3 T S 337 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 ber87251_ch13_326-349 338 1/27/06 8:17 Page 338 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 ber87251_ch13_326-349 1/23/06 7:28 Page 339 CHAPTER 13 Labor Relations and Collective Bargaining 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 G A T E S , D E A N D R A 1 1 2 3 T S 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 ber87251_ch13_326-349 340 1/23/06 7:28 Page 340 PART IV Compensating and Managing Human Resources 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. ber87251_ch13_326-349 1/23/06 7:28 Page 341 CHAPTER 13 Labor Relations and Collective Bargaining 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 G A T E S , 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 1 1 2 3 T S 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 ber87251_ch13_326-349 342 1/23/06 7:28 Page 342 PART IV Compensating and Managing Human Resources 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. ber87251_ch13_326-349 1/23/06 7:28 Page 343 CHAPTER 13 Labor Relations and Collective Bargaining 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 G A T E S , D E A N D R A 1 1 2 3 T S 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 ber87251_ch13_326-349 344 1/23/06 7:28 Page 344 PART IV Compensating and Managing Human Resources 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, ber87251_ch13_326-349 1/23/06 7:28 Page 345 CHAPTER 13 Labor Relations and Collective Bargaining 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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