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1. Discuss the differences of bargaining power and bargaining environment between private and public sectors (use some examples to illustrate). Discuss your opinion about the bargaining power for public sectors.

2. Provide examples for good faith bargaining behaviors and illegal bad faith bargaining behaviors.

3. What are some changes of collective bargaining nowadays comparing to earlier days? What are the causing factors and why? (e.g., more divergent? Competitive environment? )

4. Discuss the Case: Does the Duty to Bargain Preclude Unilateral Wage Increases?

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Fourth Edition John Budd continues to present the most dynamic, engaging approach to understanding labor relations in the 21st century with Labor Relations, 4e. This textbook presents labor relations as a system for balancing employment relationship goals (efficiency, equity, and voice) and the rights of labor and management. By weaving these themes with the importance of alternative perspectives on the nature of the employment relationship throughout the text, students can learn not only how the traditional labor relations processes work, but also why these processes exist and how to evaluate whether they are working. In this way, students can develop a deeper understanding of labor relations that will help them successfully navigate a contemporary labor relations system that faces severe pressures requiring new strategies, policies, and practices. Fourth Edition features include: A rich intellectual framework for understanding both the current labor relations system and possible alternatives that is paired with engaging historical and contemporary examples drawn from a wide variety of industries, occupations, and demographic groups. Updated discussion of recent events and controversies, including financialization, the Occupy movement, public sector union protests, union political contributions, lockouts, and a proposed NLRB employee rights poster. Trends from other countries have also been updated, including expanded coverage of labor relations in China. Visit for more information. LABOR RELATIONS Striking a Balance Budd Fourth Edition John W. Budd MD DALIM 1209086 9/10/12 CYAN MAG YELO BLACK Numerous case studies to promote classroom discussion throughout each chapter. Also included are multiple labor law and grievance discussion cases as well as an accompanying collective bargaining simulation. Striking a Balance Comprehensive, even-handed coverage of the New Deal industrial relations system and its major processes as well as contemporary pressures, including workplace flexibility, employee empowerment, labor–management partnerships, globalization, and ethics. LABOR RELATIONS Understanding Labor Relations in the 21st Century A SPECIAL NOTE TO STUDENTS My goal in writing this book is to create the foundation for you to learn about the important issues and concepts in labor relations in an engaging and enjoyable fashion. Studying labor relations can be both intellectually stimulating and fun! Labor relations have been influenced by everything from violent strikes to religious writings, from libertarians to Marxists, from radical union leaders to great industrialists. You will encounter two characters named Big Bill, the brazen yet grandmotherly Mother Jones, and the still-missing Jimmy Hoffa—not to mention the colorful language of labor relations, which includes yellow dog contracts, the blue flu, hot cargo, whipsawing, and a narcotic effect. You can enrich your studies by listening to union folk songs and watching Norma Rae, On the Waterfront, Matewan, Billy Elliot, and other films. Studying labor relations draws on scholarship in industrial relations, management, economics, history, psychology, sociology, political science, law, working class and women’s studies, and philosophy, and I hope you find this diversity both stimulating and interesting. At the same time, labor relations can be controversial, and many people have strongly formed opinions about labor unions even if they’ve had little or no firsthand experience with them. I encourage you to approach this book and your labor relations course with an open mind. As you will see, whether labor unions are good or bad depends largely on how one thinks the employment relationship works, especially the extent to which one believes that labor markets are competitive. You do not need to change your beliefs about the employment relationship (and by extension, labor unions), but you do need to understand other perspectives and respect those with other views—just as they must respect your viewpoint. Try to learn from your classmates with different perspectives, and engage them in reasoned and respectful discussions with an open mind. I’ve worked hard to include diverse materials in this textbook to help you understand labor relations from multiple perspectives and to foster lively classroom exercises and discussions. Be an active yet respectful learner in your classroom. U.S. labor relations are often equated to negotiating thick contracts full of detailed work rules. This is undeniably an important part of labor relations, and it will receive the necessary attention in this book; but do not sell labor relations short by limiting your expectations to this narrow view. I wrote this book so you can learn not only how the traditional labor relations processes (like negotiating contracts) work but also why these processes exist. Ultimately, labor relations are not about negotiating work rules—they are about trying to balance the economic and human needs of a democratic society and foster broadly shared prosperity. As you learn about the existing processes, continually ask yourself how they contribute (or not) to balancing these needs, and whether there are better ways of achieving these objectives—with traditional unions, with new types of unions, or without any unions at all—in the 21st century world of work. Even if you are a current or future manager or union leader with practical concerns, understanding the pros and cons of the labor relations processes—not just simply grasping how things currently work—is necessary because the labor relations system is in flux. Designing new policies, practices, and strategies that are effective hinges on a deep understanding of the employment relationship and the past, present, and future of labor relations. Enjoy your stimulating journey through the fascinating world of labor relations! John W. Budd bud29430_fm_i-xxii.indd i 9/21/12 2:15 PM bud29430_fm_i-xxii.indd ii 9/21/12 2:15 PM Labor Relations: Striking a Balance bud29430_fm_i-xxii.indd iii 9/21/12 2:15 PM bud29430_fm_i-xxii.indd iv 9/21/12 2:15 PM Labor Relations: Striking a Balance Fourth Edition John W. Budd University of Minnesota bud29430_fm_i-xxii.indd v 9/21/12 2:15 PM LABOR RELATIONS: STRIKING A BALANCE, FOURTH EDITION Published by McGraw-Hill, a business unit of The McGraw-Hill Companies, Inc., 1221 Avenue of the Americas, New York, NY 10020. Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. Printed in the United States of America. Previous editions © 2010, 2008, and 2005. No part of this publication may be reproduced or distributed in any form or by any means, or stored in a database or retrieval system, without the prior written consent of The McGraw-Hill Companies, Inc., including, but not limited to, in any network or other electronic storage or transmission, or broadcast for distance learning. Some ancillaries, including electronic and print components, may not be available to customers outside the United States. This book is printed on acid-free paper. 1 2 3 4 5 6 7 8 9 0 QVR/QVR 1 0 9 8 7 6 5 4 3 2 ISBN 978-0-07-802943-1 MHID 0-07-802943-0 Vice president and editor-in-chief: Brent Gordon Editorial Director: Paul Ducham Sponsoring Editor: Michael Ablassmeir Marketing Manager: Elizabeth Trepkowski Managing Development Editor: Laura Spell Project Manager: Jessica Portz Media Project Manager: Prashanthi Nadipalli Buyer: Nicole Baumgartner Cover Designer: Studio Montage, St. Louis, MO. Cover Image: Design Pics/Tim Antoniuk Compositor: Cenveo Publisher Services Typeface: 10/12 Times New Roman Printer: Quad/Graphics Library of Congress Cataloging-in-Publication Data Budd, John W. Labor relations : striking a balance / John W. Budd.—4th ed. p. cm. Includes index. ISBN 978-0-07-802943-1 (alk. paper) ISBN 0-07-802943-0 1. Industrial relations—United States. I. Title. HD8066.B83 2012 331.880973—dc23 2012032801 bud29430_fm_i-xxii.indd vi 9/21/12 2:15 PM To my students and my colleagues bud29430_fm_i-xxii.indd vii 9/21/12 2:15 PM About the Author John W. Budd is a professor in the Center for Human Resources and Labor Studies at the University of Minnesota’s Carlson School of Management, where he holds the Industrial Relations Land Grant Chair. He is a Phi Beta Kappa graduate of Colgate University and received M.A. and Ph.D. degrees from Princeton University. Professor Budd has taught labor relations to undergraduates, professional master’s students, and Ph.D. candidates and has received multiple departmental teaching awards as well as an excellence in education award from the Labor and Employment Relations Association (LERA). He has served on LERA’s education committee and has published journal articles about teaching labor relations. Professor Budd’s main research interests are in industrial relations, especially labor relations. He is the author of The Thought of Work (Cornell University Press), Employment with a Human Face: Balancing Efficiency, Equity, and Voice (Cornell University Press), and Invisible Hands, Invisible Objectives: Bringing Workplace Law and Public Policy into Focus (with Stephen Befort, Stanford University Press), and the coeditor of The Ethics of Human Resources and Industrial Relations (with James Scoville, Labor and Employment Relations Association). He has also published numerous articles in Industrial and Labor Relations Review, Industrial Relations, the Journal of Labor Economics, the British Journal of Industrial Relations, the Journal of Industrial Relations, Labor Studies Journal, and other journals and edited volumes. He is the recipient of a LERA Outstanding Young Scholar Award and serves on the editorial boards of the British Journal of Industrial Relations and Industrial and Labor Relations Review. Professor Budd is director of the University of Minnesota’s Center for Human Resources and Labor Studies, and has also served as director of graduate studies for Minnesota’s graduate program in human resources and industrial relations, one of the oldest and largest such graduate programs in the United States. viii bud29430_fm_i-xxii.indd viii 9/21/12 2:15 PM Preface The traditional approach to studying U.S. labor relations focuses on an uncritical exploration of how the existing labor processes work: how unions are organized, how contracts are negotiated, and how disputes and grievances are resolved. And because U.S. unions have typically used these processes to win detailed work rules, there is a tendency to equate labor relations with work rules and therefore to structure labor relations courses and textbooks around examination of these work rules. In other words, traditional labor relations textbooks are dominated by rich descriptions of the how, what, and where of the major labor relations processes. But what’s missing is the why. Labor relations are not about work rules. Labor relations processes and work rules are simply a means to more fundamental ends or objectives. What are these objectives? Under what conditions are collectively bargained work rules a desirable or undesirable method for achieving these objectives? In the 21st century world of work, are there better ways of pursuing these objectives? These are the central and engaging questions of labor relations—questions ignored by textbooks that narrowly focus on how the existing labor relations processes and detailed work rules operate in practice. The importance of moving beyond a process-based focus in studying labor relations is underscored by the fact that today’s labor relations processes are under attack from all directions. Business professionals, labor leaders, and diverse academics frequently criticize the operation of contemporary U.S. labor relations, albeit usually for different reasons. Analyzing whether the labor relations system needs updating and evaluating alternative options for reform require an intellectual framework that is rooted in the objectives of the employment relationship. A description of how the current processes work without any discussion of what the processes are trying to achieve fails to provide the basis for determining whether the processes are working, and fails to supply metrics for judging alternative strategies, policies, and processes. This textbook presents labor relations as a system for striking a balance between the employment relationship goals of efficiency, equity, and voice, and between the rights of labor and management. It is important to examine these goals to discover what motivates contemporary U.S. labor relations processes, and to evaluate whether these processes remain effective in the 21st century. What are the differing assumptions (such as whether labor markets are competitive) that underlie alternative mechanisms for achieving efficiency, equity, and voice? Why is a balance important? These questions provide the framework for analyzing the existing processes—especially organizing, bargaining, dispute resolution, and contract administration—as well as the major issues facing these processes—particularly the need for workplace flexibility, employee empowerment, and labor–management partnerships in the context of globalization and financialization. Another recurring theme is that the current processes are one option for balancing workplace objectives and rights, but that this system is under fire from many directions. The book therefore concludes with chapters to promote reflection on the strengths and weaknesses of the current system and the possibilities for reform. This material includes a comparative examination of labor relations systems in other countries and a consideration of varied U.S. reform proposals that include changes in union and corporate behavior as well as public policies. This textbook thus replaces the tired paradigm of “labor relations equal detailed work rules” with the dynamic paradigm of “labor relations equal balancing workplace goals and rights.” This is not to say that the existing processes are unimportant. Labor law, union organizing, bargaining, dispute resolution, and contract administration are central topics that are thoroughly covered in the heart of this book using diverse historical and contemporary examples. Current and future labor relations practitioners will certainly learn the ins and ix bud29430_fm_i-xxii.indd ix 9/21/12 2:15 PM x Preface outs of the traditional labor relations processes. But this is no longer sufficient for effective practice because labor relations practices are in flux. Indeed, recent movements in various states to change public sector labor relations or implement right-to-work laws, sometimes punctuated by large-scale protests such as those we witnessed in Wisconsin, highlight the unsettled nature of contemporary labor relations. As such, the labor relations processes are not presented in this textbook as self-evidently good; they are placed in the broader context of the nature of the employment relationship to foster a deep understanding of labor relations. The logic and relevance of the existing labor relations processes are more readily understood when explicitly linked to the beliefs about the employment relationship that underlie these processes. This deep understanding further provides the foundation for critically evaluating future directions for labor relations and labor policy—what labor relations strategies, policies, and practices can most effectively balance the workplace goals and rights of workers and employers in the environment of the 21st century? ORGANIZATION Labor Relations: Striking a Balance has four parts and is written for upper-level undergraduates and professional-level graduate students. Part One provides the intellectual framework for studying labor relations. Chapter 1 sketches the major concerns in labor relations within a context explicitly rooted in the objectives of the employment relationship (efficiency, equity, and voice) and of labor relations (striking a balance). In Chapter 2 four different views of labor unions in the employment relationship are presented from the perspectives of mainstream economics, human resource management, industrial relations, and critical (or radical or Marxist) industrial relations. The industrial relations viewpoint shapes the existing U.S. policies on collective bargaining, so a thorough understanding of this school of thought is essential, and this understanding is best achieved through contrasts with the other three schools. Part Two focuses on the New Deal industrial relations system—today’s U.S. labor relations system: its historical development (Chapter 3), labor law (Chapter 4), the strategies and organizational structures used by labor and management and the environmental constraints they face (Chapter 5), how new unions are organized (Chapter 6), how contracts are negotiated (Chapter 7), how bargaining disputes are resolved (Chapter 8), and how grievances over contract administration are resolved (Chapter 9). Part Two provides a thorough understanding of these processes to help develop effective management professionals and labor advocates, as well as for thinking more critically about future directions for U.S. labor relations. Part Three focuses on four issues that are putting particular strain on the New Deal industrial relations system in the 21st century: workplace flexibility, employee empowerment, and labor–management partnerships (Chapter 10) as well as globalization (Chapter 11). These are important issues for business, policymakers, and labor unions and also reflect struggles with efficiency, equity, and voice and trying to balance labor rights and property rights. Consequently, these issues are critical for both policy and practice. The goals of Parts One, Two, and Three are to develop a deep understanding of the current state of U.S. labor relations—its goals, major processes, and current pressures. But many individuals from nearly every viewpoint—pro-business or pro-union, liberal or conservative, Republican or Democrat, academic or practitioner—have called for reform of the existing U.S. labor relations system. Thus, Part Four reflects on the current state of U.S. labor relations and options for reform. Other countries wrestle with the same goal of balancing efficiency, equity, and voice, and Chapter 12 presents some comparative examples of different labor relations systems. In a global economy it is important to understand how things work in other countries to be a better manager or labor leader, but there are also lessons for reflection and reform. The concluding chapter returns to the starting questions: What should labor relations bud29430_fm_i-xxii.indd x 9/21/12 2:15 PM Preface xi do? What should labor relations seek to accomplish? And in light of the material in the rest of the book, what reforms are needed—in union strategies, corporate governance and social responsibility, and labor law? Chapter 13 therefore integrates the past lessons with directions for the future. Throughout the chapters, engaging historical and contemporary examples are combined with concrete issues for both practice and policy to develop a deep understanding of the past, present, and future of U.S. labor relations for managers, unionists, workers, and anyone concerned with the employment relationship. The first three editions of Labor Relations: Striking a Balance were well received by instructors and students alike. In fact, the first edition was recognized with a Texty excellence award from the Textbook and Academic Authors Association for the best textbook in accounting, business, economics, and management in 2005. This fourth edition continues to refine and update rather than overhaul the successful approach of the earlier editions. The particular emphases of the revisions for this fourth editio ...
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