Chapter 12
Dealing with
Union and
EmployeeManagement
Issues
McGraw-Hill/Irwin
Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.
Chapter Twelve
LEARNING GOALS
1. Trace the history of organized labor in the United
States
2. Discuss the major legislation affecting labor unions
3. Outline the objectives of labor unions
12-2
Chapter Twelve
LEARNING GOALS
4. Describe the tactics used by labor and
management during conflicts, and discuss the role
of unions in the future
5. Assess some of today’s controversial employee–
management issues, such as executive
compensation, pay equity, child care and elder
care, drug testing, and violence in the workplace
12-3
Profile
DAVID STERN
National Basketball Association (NBA)
• Started with the NBA as an
outside legal counselor in
1966.
• Spearheaded settlements
between players and coaches
that led to free agency, salary
caps and revenue sharing .
• Commissioner since 1984,
he’s led the league to
unprecedented growth .
12-4
Chapter Twelve
NAME that COMPANY
As the number of women in the workplace began
growing rapidly about 25 years ago, this
company recognized that providing child care
benefits would be a real advantage for
companies. Today it is the largest provider of
child care at worksites, operating about 700
child care centers for 400 companies including
90 companies in the Fortune 500.
Name that company!
12-5
Employee Management
Issues
ORGANIZED LABOR
LG1
• Unions -- Employee organizations whose main goal
is to represent members in employee-management
negotiations of job-related issues.
• Labor unions were responsible for:
-
Minimum wage laws
Overtime rules
Workers’ compensation
Severance pay
Child-labor laws
Job-safety regulations
12-6
Employee Management
Issues
LG1
PUBLIC SECTOR
LABOR UNIONS
• Public sector union members work for
governments as teachers, firefighters, police
officers, etc.
• Many states face serious debt problems and want
to cut labor costs. But states with public sector
unions have limited ability to cut those costs.
• The Governor of Wisconsin challenged public
sector labor unions by eliminating union
bargaining rights for state and public employees.
12-7
Employee Management
Issues
PUBLIC SECTOR JOBS
LG1
Source: St. Louis Post-Dispatch, September 5, 2011 and U.S. Bureau of Labor Statistics, accessed August 2011.
12-8
Employee Management
Issues
GOALS of ORGANIZED LABOR
LG1
• To work with fair and
competent
management.
• To be treated with
human dignity.
• To receive a
reasonable share of
wealth in the work it
generates.
12-9
The History
of Organized
Labor
LG1
HISTORY of
ORGANIZED LABOR
• Craft Union -- An organization of skilled specialists
in a particular craft or trade.
• As early as 1792, shoemakers in a Philadelphia
craft union met to discuss fundamental work
issues.
• Work weeks were 60+
hours, wages were low and
child labor was rampant.
12-10
The TRIANGLE FIRE
(Spotlight on Small Business)
• On March 25, 1911, 146 women
were killed in a fire at the Triangle
Shirtwaist Company in New York
City.
• The women were trapped by a
door that was kept locked to
prevent theft.
• Today labor leaders say that the
Triangle fire is proof of why labor
unions are crucial to maintaining
workplace balance in the U.S.
12-11
The History
of Organized
Labor
LG1
EMERGENCE of LABOR
ORGANIZATIONS
• Knights of Labor -- First national labor union
(formed in 1869).
• Knights attracted 700,000 members, but fell
from prominence after a riot in Chicago.
• American Federation of Labor (AFL) -- An
organization of craft unions that championed
fundamental labor issues (formed in 1886).
12-12
The History
of Organized
Labor
INDUSTRIAL UNIONS
LG1
• Industrial Unions -- Labor unions of unskilled or
semiskilled workers in mass production industries.
• Congress of Industrial Organizations (CIO) -Union organization of unskilled workers; broke away
from the AFL in 1935 and rejoined in 1955.
• The AFL-CIO today has affiliations with 56 unions
and has about 12.2 million members.
12-13
Public Sector
Union
Membership
PUBLIC UNIONS
LG1
• For the first time in U.S. history, 7.6 million of the
14.7 union members work in government.
• Taxpayers, not stockholders, are paying the cost
of union workers wages and benefits.
• The huge state and local government revenue
losses caused by the economic crisis put
pressure to reduce wage and benefit costs.
12-14
Labor Legislation
and Collective
Bargaining
LG2
EFFECTS of LAWS on
LABOR UNIONS
• Labor unions’ growth and influence has been
very dependent on public opinion and law.
• The Norris-LaGuardia Act helped unions by
prohibiting the use of Yellow-Dog Contracts -- A
type of contract that required employees to agree to
NOT join a union.
• Collective Bargaining -- The process whereby
union and management representatives form an
agreement, or contract, for employees.
12-15
Labor Legislation
and Collective
Bargaining
LG2
COLLECTIVE BARGAINING
and the PUBLIC SECTOR
• Collective bargaining among public union workers
has become a key issue today.
• One of the issues is the fact that public
employees are paid by the taxpayers.
• When it is perceived that public employees are
winning more or better health care, more or better
hours of work, and so on, some have questioned
whether or not such negotiations should be
allowed to continue.
12-16
Union Organizing
Campaigns
LG2
FORMING a UNION in the
WORKPLACE
• The National Labor Relations Board (NLRB) was
created to oversee labor-management issues and
provide guidelines for unionization.
• Certification -- The formal process by which a
union is recognized by the NLRB as the bargaining
agent for a group of employees.
• Decertification -- The process whereby employees
take away a union’s right to represent them.
12-17
Union Organizing
Campaigns
WHY JOIN a UNION?
LG2
• Pro-union attitudes
• Poor
management/employee
relations
• Negative organizational
climate
• Poor work conditions
• Union’s reputation
• Job security
12-18
Objectives of
Organized Labor
Over Time
LG3
LABOR/MANAGEMENT
AGREEMENTS
• Negotiated Labor-Management Agreement
(Labor Contract) -- Sets the terms under which
labor and management will function over a period of
time.
• Union Security Clause -- Stipulates workers who
reap union benefits must either join the union or pay
dues to the union.
12-19
Objectives of
Organized Labor
Over Time
UNION SECURITY AGREEMENTS
LG3
• Closed Shop Agreement -- Specified workers had
to be members of a union before being hired for a
job.
• Union Shop Agreement -- Declares workers don’t
have to be members of a union to be hired, but must
agree to join the union within a specific time period.
• Agency Shop Agreement -- Allows employers to
hire nonunion workers who don’t have to join the
union, but must pay fees.
12-20
Objectives of
Organized Labor
Over Time
RIGHT-to-WORK LAWS
LG3
• Right-to-Work Laws -- Legislation that gives
workers the right, under an open shop, to join or not
to join a union.
• The Taft-Hartley Act of 1947 granted states the
power to outlaw union shop agreements.
• Open Shop Agreement -- Agreement in right-towork states that gives workers the right to join or not
join a union, if one exists in their workplace.
12-21
Objectives of
Organized Labor
Over Time
LG3
STATES with
RIGHT-to-WORK LAWS
12-22
Resolving LaborManagement
Disagreements
RESOLVING DISAGREEMENTS
LG3
• Labor contracts outline labor and management’s
rights, and serves as a guide to workplace
relations.
• Grievances -- A charge by employees that
management isn’t abiding by the terms of the
negotiated agreement.
• Shop Stewards -- Union officials who work
permanently in an organization and represent
employee interests on a daily basis.
12-23
Mediation and
Arbitration
LG3
USING MEDIATION and
ARBITRATION
• Bargaining Zone -- The range of options between
initial and final offers that each side will consider
before negotiations dissolve or reach an impasse.
• Mediation -- The use of a third party (mediator) to
encourage both sides to keep negotiating to resolve
key contract issues.
• Arbitration -- An agreement to bring in a third party
to render a binding agreement.
12-24
Mediation and
Arbitration
LG3
The GRIEVANCE RESOLUTION
PROCESS
12-25
Tactics Used in
LaborManagement
Conflicts
TACTICS USED in CONFLICTS
LG4
• Tactics used by labor unions include:
- Strikes
- Boycotts
- Work Slowdowns
- Pickets
12-26
Union Tactics
STRIKES and BOYCOTTS
LG4
• Strikes -- A strategy in which workers refuse to go to
work.
• Primary Boycott -- When a union encourages both its
members and the general public not to buy the products
of a firm in a labor dispute.
• Secondary Boycott -- An attempt by labor to
convince others to stop doing business with a firm that is
the subject of a primary boycott.
12-27
Management
Tactics
TACTICS USED in CONFLICTS
LG4
• Tactics used by management include:
- Lockouts
- Injunctions
- Strikebreakers
12-28
Management
Tactics
LG4
LOCKOUTS, INJUNCTIONS and
STRIKEBREAKERS
• Lockout -- An attempt by
management to put pressure on
workers by closing the business,
thus cutting off workers’ pay.
• Injunction -- A court order
directing someone to do something
or refrain from doing something.
• Strikebreakers -- Workers hired
to do the work of striking workers
until the labor dispute is resolved;
called scabs by unions.
12-29
WALKING a FINE LINE
(Making Ethical Decisions)
• Shop-Til-You-Drop is seeking workers to fill the
jobs of striking workers.
• Many students at your college are employees
and others are supporting the strike.
• You need money and legally it’s permissible for
you to replace striking workers.
• What will you do? What are the consequences?
12-30
Future of Unions
and LaborManagement
Relations
LG4
CHALLENGES FACING LABOR
UNIONS
• The number of union workers is falling.
• Many workers (like airline employees) have
agreed to Givebacks -- Gains from labor
negotiations are given back to management to help
save jobs.
12-31
Future of Unions
and LaborManagement
Relations
LABOR UNIONS in the FUTURE
LG4
• Union membership will include more white-collar,
female and foreign-born workers than in the past.
• Unions will take on a greater
role in training workers,
redesigning jobs and
assimilating the changing
workforce.
• Unions will seek more job
security, profit sharing and
increased wages.
12-32
Future of Unions
and LaborManagement
Relations
UNION MEMBERSHIP by STATE
LG4
12-33
Progress
Assessment
PROGRESS ASSESSMENT
• What are the major laws that affected union
growth, and what does each one cover?
• How do changes in the economy affect the
objectives of unions?
• What are the major tactics used by unions and by
management to assert their power in contract
negotiations?
• What types of workers do unions need to
organize in the future?
12-34
Executive
Compensation
COMPENSATING EXECUTIVES
LG5
• CEO compensation used to be determined by a
firm’s profitability or increase in stock price.
• Now, executives receive
stock options and
restricted stock that’s
awarded even if the
company performs poorly.
12-35
EXECUTIVE PAY REMAINS
on the RISE
(Legal Briefcase)
• Some companies defy common sense by
rewarding failure.
• After posting $8 billion losses, Stanley O’Neal of
Merrill Lynch left with a $165 million severance.
• Executive pay in 2008-2009 was lower than it had
been in years.
• As the economy improved, CEO pay shot back
up faster than it had in over 60 years.
12-36
Executive
Compensation
PLAY BALL!
Salaries in Professional Sports
LG5
League
Minimum Salary
Highest Paid Player
NFL
$325,000
Julius Peppers $16.6 million
NBA
$457,588
Tracy McGrady $23.2 million
MLB
$400,000
Alex Rodriguez $33 million
NHL
$500,000
Vincent Lecavalier $10 million
MLS
$40,000
David Beckham 6.5 million
WNBA
$35,190
Max. Salary $99,500
Source: KREM Spokane, www.krem.com, accessed June 2011.
12-37
Executive
Compensation
LG5
COMPENSATING EXECUTIVES
in the FUTURE
• Boards of directors are being challenged
concerning executive contracts.
• Government and shareholders are putting
pressure to overhaul executive compensation.
• The passage of the DoddFrank Act was intended to
give shareholders more say
in compensation decisions.
12-38
Pay Equity
The QUESTION of PAY EQUITY
LG5
• Women earn 81% of what
men earn.
• This disparity varies by
profession, experience and
level of education.
• Young women actually earn
8% percent more than male
counterparts due to their
higher graduation rates.
12-39
Pay Equity
LG5
EQUAL PAY for EQUAL WORK
Equal Pay Act Factors that Justify Pay Differences
• Skill
• Effort
• Responsibility
• Working Conditions
12-40
Pay Equity
THE SALARY GENDER GAP
LG5
Age
Average Salary
15 to 24
Women - $23,357
Men - $26,100
25 to 44
Women - $41,558
Men - $55,286
45 to 64
Women - $44,808
Men - $67,040
Source: U.S. Census Bureau, www.census.gov, accessed June 2011.
12-41
Sexual
Harassment
WHAT’S SEXUAL HARASSMENT
LG5
• Sexual Harassment -- Unwelcomed sexual
advances, requests for sexual favors or other verbal
or physical conduct that creates a hostile work
environment.
• Sexual harassment laws
cover men, women and
foreign companies doing
business in the U.S.
• Violations can be extremely
expensive for businesses.
12-42
Sexual
Harassment
KINDS of SEXUAL HARASSMENT
LG5
• Quid pro quo sexual harassment involves threats
like “Go out with me or you’re fired.” An
employee’s job is based on submission.
• Hostile work environment sexual harassment is
conduct that interferes with a worker’s
performance or creates an intimidating or
offensive work environment.
12-43
Sexual
Harassment
YOU MAKE the CALL…
LG5
1. Two colleagues walk by you as one delivers the
punch line to a very dirty joke. You feel the joke
is inappropriate. Is this sexual harassment
under the law?
2. An employee thinks she may have been
sexually harassed when her boss
complimented her blouse. She explains the
circumstances to you and asks, “Wouldn’t
you be upset?” What’s your response?
12-44
Child Care
FACING CHILDCARE ISSUES
LG5
• The number of women in the workforce with
children under three-years-old has increased.
• Childcare related absences
cost businesses billions of
dollars each year.
• Who should pay for the cost
of childcare – this is a
dividing issue among
employees and businesses.
12-45
Child Care
LG5
BUSINESSES RESPONSE to
CHILD CARE
• Benefits can include:
- Discounts with childcare
providers.
- Vouchers that offer payment
for childcare.
- Referral services identify
high-quality childcare
facilities.
- On-site childcare centers
- Sick-child centers.
12-46
Elder Care
LG5
INCREASING ELDER CARE
CHALLENGES
• 29% of the adult population
are providing some care to an
elderly person.
• Care giving obligations cause
employees to miss about 15
million days of work per year.
• Costs could rise up to $35
billion annually.
12-47
Elder Care
LG5
ELDER CARE in the
MODERN HOUSEHOLD
• More and more boomers are taking care of their
parents while still working.
- 31% say that may delay their retirement.
- The average cost of taking care of an aging parent is
$5,534.
- 76% say they enjoy taking care of their parents.
- 54% say it made them closer.
Source: Money, June 2010.
12-48
Drug Testing
DRUG USE in the WORKPLACE
LG5
• Alcohol is the most widely used drug - 6.5% of full
time employees are considered heavy drinkers.
• Over 8% of workers aged 18-49 use illegal drugs
and are more likely to be in workplace accidents.
• Drug abuse costs the U.S. economy $414 billion
in lost work, healthcare costs and crime.
• Over 80% of major companies drug test workers.
12-49
Violence in the
Workplace
VIOLENCE in the WORKPLACE
LG5
• OSHA reports homicides account for 16% of
workplace deaths.
• Violence is the number one cause of death for
women in the workplace.
• Companies have taken action to deal with
potential problems by using focus groups and
other interactions.
12-50
Violence in the
Workplace
LG5
WARNING SIGNS of POSSIBLE
WORKPLACE VIOLENCE
• Unprovoked outbursts of anger or rage
• Threats or verbal abuse
• Repeated suicidal comments
• Paranoid behavior
• Increased frequency of domestic problems
12-51
Progress
Assessment
PROGRESS ASSESSMENT
• How does top-executive pay in the U.S. compare
with top-executive pay in other countries?
• What’s the difference between pay equity and
equal pay for equal work?
• How is the term sexual harassment defined and
when does sexual behavior become illegal?
• What are some of the issues related to childcare
and elder care and how are companies
addressing those issues?
12-52