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I.
Introduction
II.
The Labor Relations Framework (text Figure 14.1)
A.
B.
III.
John Dunlop suggested a labor relations system that consists of
four elements:
1.
An environmental context (technology, market forces, etc.).
2.
Participants: employees and their unions, management, and the
government.
3.
A web of rules (rules of the game) that describe the process by which
labor and management interact and resolve disagreements.
4.
Ideology (acceptance of the system and participants).
Katz and Kochan have presented a model that focuses on the decision-making
process and outcomes.
1.
At the strategic level, management makes basic choices such as
whether to work with its union or develop nonunion operations.
2.
These labor and management choices made at the strategic level affect
interaction at the second level, the functional level, where contract
negotiations occur.
3.
These strategic decisions also affect the workplace level, the arena in
which the contract is administered.
Goals and Strategies
A.
Society—Labor unions' major benefit to society throughout history has been
the balancing of power and the institutionalization of industrial conflict in the
least costly way. The National Labor Relations Act (NLRA, 1935) sought to
provide a legal framework conducive to collective bargaining.
B.
Management must decide whether to encourage or discourage the unionization
of its employees. Based upon issues of wage cost, flexibility, and labor
stability, as well as ideology, management must decide. If management has a
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union, it has the option of supporting a decertification vote, an election in
which employees have a chance to vote out the union.
C.
IV.
Labor unions seek to give workers formal representation in setting the terms
and conditions of employment. (See text Table 14.1 for categories of
provisions in collective bargaining agreements).
Union Structure, Administration, and Membership
A.
National and international unions are composed of multiple local unions, and
most are affiliated with the American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO) (see Table 14.2 in the text for a list). In
1995, three major unions, the UAW, the United Steelworkers, and the
International Association of Machinists, announced plans to merge by the year
2000.
1.
Craft unions are those that organize members of a particular skill or
trade, such as electricians or plumbers. Craft unions are likely to be
responsible for training programs called apprenticeships.
2.
Industrial unions are made up of members who work in any number of
positions in a given industry, such as the auto or steel industry.
Whereas craft unions may wish to control the number of members,
industrial unions wish to maximize the number of members.
B.
Local unions are frequently responsible for the negotiations of a contract as
well as the day-to-day administration of the contract, including the grievance
procedure. Typically, an industrial local corresponds to a single manufacturing
facility.
C.
The AFL-CIO is not a union but rather an association that seeks to advance the
shared interest of its member unions at the national level. It represents labor's
interests in the political process and provides numerous services to its
members, in terms of research and education (text Figure 14.2).
D.
Union security depends upon its ability to ensure a stability of members and
dues. Unions typically negotiate a contract clause that defines the relationship
it has to employees and that provides for an uninterrupted flow of dues.
1.
A checkoff provision is an automatic deduction of union dues from an
employee's paycheck.
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E.
2.
A closed shop is a union security provision under which a person must
be a union member.
3.
A union shop requires a person to join the union within a certain
length of time after beginning employment.
4.
An agency shop is similar to a union shop, but does not require union
membership, only that an agency fee be paid.
5.
Maintenance of membership requires only that those who join the
union remain members through the life of the current contract.
6.
Right-to-work laws—As a function of the Taft-Hartley amendment to
the NLRA, states may decide to make mandatory union membership
(or even dues paying) illegal.
Union Membership and Bargaining Power—Employers are increasingly
resisting unionization. Unions are making new attempts to organize new
memberships and to provide new services. Union membership has consistently
declined since 1950 and now stands at roughly 10 percent of private-sector
employment (text Figure 14.3). Reasons for this decline are noted below:
1.
Structural Changes in the Economy—These changes include decline in
core manufacturing and increase in the service sector. But these
changes, according to studies, only account for 25 percent of the overall
union membership decline.
2.
Increased Employer Resistance—Almost 50 percent of large employers
in a survey reported that their most important labor goal was to remain
union free. Unions' ability to organize whole industries has declined,
and therefore wages are rarely taken out of competition. Additionally,
studies have shown that if a union wins an election, it is frequently the
case that managers lose their jobs (see Figure 14.4 for the increase in
employee resistance to union organizing).
3.
Substitution with HRM—In large nonunion companies, HRM policies
and practices may encourage positive employee relations, and therefore
union representation is not desired by employees.
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V.
4.
Substitution by Government Regulation—Employment laws have been
passed that reduce the areas in which unions can make a contribution.
5.
Worker Views—The lack of a U.S. history of feudalism and class
distinctions has limited the class-consciousness needed to support a
strong union movement.
6.
Union Actions—Corruption, resistance to obvious economic change,
and openness to women and minorities have all hurt the perception of
union.
Legal Framework—Legislation and court decisions that provide the structure within
which unions must operate have had an effect upon membership, bargaining power,
and the degree to which unions and managements are successful in achieving their
goals. The 1935 NLRA enshrined collective bargaining as the preferred mechanism
for settling labor-management disputes. The Great Depression of the 1930s shifted
public attitudes toward business and the free-enterprise system. Section 7 of the act
sets out the rights of employees, including the "right to self-organization, to form, join,
or assist labor organizations, to bargain collectively through representatives of their
own choosing, and to engage in other concerted activities for the purpose of collective
bargaining."
A.
Unfair Labor Practices (ULPs)—Employers: The National Labor Relations Act
(1935) prohibits certain activities by both employers and labor unions. Section
8(a) of the NLRA contains ULPs by employers.
1.
Employers cannot interfere with, restrain, or coerce employees in
exercising their Section 7 rights.
2.
Employers cannot dominate or interfere with a union.
3.
Employers may not discriminate against an individual for exercising his
or her right to join or assist a union.
4.
Employers may not discriminate against employees for providing
testimony relevant to enforcement of the NLRA.
5.
Employers cannot refuse to bargain collectively with a certified union
(other examples are given in text Table 14.4).
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B.
Unfair Labor Practices—Labor Unions: Originally the NLRA did not list any
union unfair labor practices. These were added by the 1947 Taft-Hartley Act.
1.
C.
VI.
These ULPs parallel those listed previously. For example, unions may
not restrain or coerce employees in the exercise of their Section 7 rights
(see Table 14.5 in the text for additional examples).
Enforcement—The National Labor Relations Board (NLRB) has the primary
responsibility for enforcing the NLRA.
1.
The NLRB is a five-member board appointed by the president.
Additionally, there are 33 regional offices.
2.
Only businesses involved in interstate commerce are covered by the
NLRA and therefore subject to the NLRB.
3.
The NLRB has two major functions:
a.
To conduct and certify representation elections.
b.
To prevent unfair labor practices.
Union and Management Interactions: Organizing
A.
B.
Why Do Employees Join Unions?
1.
Is there a gap between pay, benefits, and other conditions of
employment that employees actually receive versus what they believe
they should receive?
2.
If such a gap exists, is it sufficiently large enough to motivate
employees to remedy the situation?
The Process and Legal Framework of Organizing—An election may
be held if at least 30 percent of the employees in the bargaining unit
sign authorization cards. A secret ballot election will be held. The union is
certified by the NLRB if a simple majority of employees vote for it (Figure
14.5).
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C.
VII.
1.
A decertification election may be held if no other election has been
held within the year or if no contract is in force.
2.
The NLRB must define the appropriate bargaining unit and the
employees who are eligible to participate in organizing activities.
3.
Certain categories of employees cannot be included.
Organizing Campaigns: Management and Union Strategies and Tactics (see
text Tables 14.6 and 14.7 for common campaign issues).
1.
Table 14.8 in the text list employer strategies, legal and illegal, which
are used to oppose unions in organizing campaigns. Additionally, note
the significant increase in employer ULPs since the late 1960s.
2.
The consequence of breaking the law in this situation is minimal.
3.
The NLRB may set aside the results of an election if the employer has
created "an atmosphere of confusion or fear of reprisals” (Table 14.9).
4.
Associate union membership is a form of union membership in which
the union receives dues in exchange for services but does not provide
representation in collective bargaining.
5.
Corporate campaigns seek to bring public, financial, or political
pressure on employers during the organizing and negotiating process.
Union and Management Interaction: Contract Negotiation— Bargaining structures, the
range of employees and employers that are covered under a given contract, differ, as
shown in text Table 14.10.
A.
The Negotiation Process—Walton and McKersie suggested that negotiations
could be broken into four subprocesses:
1.
Distributive bargaining occurs when the parties are attempting to
divide a fixed economic pie into two parts. What one party gains, the
other loses.
2.
Integrative bargaining has a win-win focus; it seeks solutions
beneficial to both sides.
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B.
3.
Attitudinal structuring refers to behaviors that modify the relationships between the parties, for example, offering to share
information or a meal.
4.
Intraorganizational bargaining is the consensus-building and
negotiations that go on between members of the same party.
Management's preparation for negotiations is critical to labor costs and
productivity issues. The following steps are suggested:
1.
Establish interdepartmental contract objectives among industrial
relations and finance, production, and so on.
2.
Review the old contract to focus on provisions needing change.
3.
Prepare and analyze data on labor costs, your own and competitors'.
Data on grievances, compensation, and benefits must be examined as
well.
4.
Anticipate union demands by maintaining an awareness of the union
perspective.
5.
Establish the potential costs of various possible contract provisions.
6.
Make preparations for a strike, including possible replacements,
security, and supplier and customer.
7.
Determine the strategy and logistics for the negotiators.
D.
Bargaining Power, Impasses, and Impasse Resolution—An important
determinant of the outcomes of negotiations is the relative bargaining power of
each party. Strikes impose various economic costs on both sides and therefore,
in part, determine the power.
E.
Management's Willingness to Take a Strike—Willingness is determined by the
answers to two questions.
1.
Can the company remain profitable over the long run if it agrees to the
union's demands?
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F.
2.
Can the company continue to operate in the short run despite a strike?
3.
The following factors help determine whether management is able to
take a strike:
a.
Product Demand—If it's strong, there is greater potential loss
for management.
b.
Product Perishability—A strike timed with perishability of a
crop results in permanent revenue loss.
c.
Technology—A capital-intensive firm is less dependent on
labor for continued operation.
d.
Availability of Replacement Workers—(Note that the Clinton
Administration issued an executive order that at the time of
publication was under an injunctive order. This executive order
prohibits federal contractors from permanently replacing
striking workers).
e.
Multiple Production Sites and Staggered Contracts—These
permit the shifting of work from a struck site.
f.
Integrated Facilities—If parts are not available from a struck
plant, other facilities may be shut down.
g.
Lack of Substitutes for the Product—A strike is less costly if
customers cannot purchase substitute goods.
Impasse-Resolution Procedures: Alternatives to Strikes
1.
Mediation is provided by the Federal Mediation and Conciliation
Service. While a mediator has no formal authority to force a solution,
he or she acts as a facilitator for the parties, trying to help find a way to
resolve an impasse.
2.
A fact finder is most commonly used in the public sector. The fact
finder's job is to investigate and report on the reasons for the dispute
and both sides' positions.
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3.
VIII.
Arbitration is a process through which a neutral party makes a final
and binding decision. Traditionally, rights arbitration (the interpretation
of contract terms) is widely accepted, while interest arbitration
(deciding upon the outcome of contract negotiation) is used much less
frequently.
Union and Management Interactions: Contract Administration
A.
The grievance procedure is a process developed to resolve labor management
disputes over the interpretation and implementation of the contract. The two
processes—negotiation and administration—are linked.
1.
The WWII War Labor Board first institutionalized the use of a
third-party neutral, called an arbitrator (now, the final step in the
grievance process).
2.
The duty of fair representation is mandated by the NLRA and
requires that all bargaining-unit members, whether union members or
not, have equal access to and appropriate representation in the
grievance process. An individual union member may sue the union over
negligent or discriminatory representation.
3.
Most grievance procedures have several steps prior to arbitration, each
including representatives from increasingly higher levels of
management and the union (Text Table 14.11).
4.
Arbitration is a final and binding step. The Supreme Court, through
three cases known as the Steelworkers' Trilogy, confirmed the
credibility and binding nature of the arbitrator's decision.
5.
Criteria arbitrators use to reach decisions include:
a.
Did the employee know the rule and the consequences of
violating it?
b.
Was the rule applied in a consistent and predictable way?
c.
Were the facts collected in a fair and systematic way?
d.
Did the employee have the right to question the facts and
present a defense?
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B.
IX.
e.
Does the employee have the right of appeal?
f.
Is there progressive discipline?
g.
Are there mitigating circumstances?
New Labor-Management Strategies
1.
There are signs of a transformation from an adversarial approach to a
less adversarial and more constructive approach to union-management
relations.
2.
The transformation includes increasing worker involvement and
participation and reorganizing work to increase flexibility.
3.
Union leaders have frequently resisted such change, fearing an erosion
of their influence.
4.
These new approaches (with the boundaries of legality) to labor
relations may add to an organization's effectiveness. Table 14.13 in the
text illustrates the patterns of traditional and transformational
approaches.
Labor Relations Outcomes
A.
Strikes—See Table 14.14 in the text for U.S. strike data. Note that strikes
occur very infrequently.
B.
Wages and Benefits—In 2000, private-sector unionized workers received, on
average, wages that were 19 percent higher than nonunion counterparts.
1.
2.
The union-nonunion gap is most likely overestimated due in part to the
ease of organizing higher skilled (therefore more highly paid) workers.
The "union threat" more than likely causes an underestimation of the
differences. The net difference is close to 10 percent.
Unions influence the way in which pay is given (across-the-board
wages on top of occupational wage rates). Promotions are in large part
based on seniority.
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C.
Productivity
1.
2.
3.
D.
Unions are believed to decrease productivity in three ways:
a.
The union pay advantage motivates management to use more
capital per worker, which is inefficiency.
b.
Union contracts may limit workload, and so on.
c.
Strikes and other job actions result in some lost productivity.
Unions, alternatively, may increase productivity:
a.
Unions provide more efficient communication with management, which may reduce turnover.
b.
The use of seniority decreases the competition between
workers.
c.
The presence of a union may encourage management to tighten
up in terms of consistency on work rules, and so on.
Overall, studies have concluded that union workers are more
productive than nonunion workers although the explanation is not clear.
Profits and Stock Performance—These may suffer under unionization if costs
are raised. Recent studies have shown negative effects on profit and
shareholder wealth. These research findings describe the average effects of
unions. The consequences of more innovative union-management relationships
for profits and stock performance are less clear.
X.
The International Context—The United States has both the largest number of union
members and the lowest unionization rate of any Western European country or Japan
(Text Table 14.15). A number of potential explanations exist.
XI.
The Public Sector—During the 1960s and 1970s, unionization in the public sector
increased dramatically. As of 2003, 37 percent of government employees were
covered by a union contract, and 42 percent of all government employees were
covered by a collective bargaining contract. Strikes are illegal at the federal level and
in many states for government workers.
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