The Dynamics of
Labor Relations
The Challenges of Human Resources Management
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1–1
Chapter Objectives
After studying this chapter, you should be able to
LEARNING OUTCOME 1
Identify and explain the main federal laws that provide the
framework for labor relations.
LEARNING OUTCOME 2
Explain the reasons employees join unions.
LEARNING OUTCOME 3
Describe the process by which unions organize employees and
gain recognition as their bargaining agent.
LEARNING OUTCOME 4
Discuss the bargaining process and the bargaining goals and
strategies of a union and an employer.
LEARNING OUTCOME 5
Differentiate the forms of bargaining power that a union and an
employer may utilize to enforce their bargaining demands.
LEARNING OUTCOME 6
Describe a typical union grievance procedure and explain the
basis for arbitration awards.
LEARNING OUTCOME 7
Discuss some of the contemporary challenges to labor
organizations.
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36
Test Your Labor Relations Know-How
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Test Your Labor Relations Know-How (cont.)
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36
Government Regulation of Labor Relations
• Major Labor Laws



Railway Labor Act (RLA) of 1926
Norris LaGuardia Act (Anti-Injunction Act)
Wagner Act (National labor Relations Act) of 1935
– National Labor Relations Board


Taft-Harley Act (Labor-Management Relations Act)
of 1947
Landrum-Griffin Act (Labor-Management Disclosure
Act) of 1959
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36
Government Regulation of Labor Relations (cont.)
• Railway Labor Act (RLA) of 1926



Purpose of the act is to avoid service interruptions
resulting from disputes between railroads and their
operating unions.
National Mediation Board
National Railway Adjustment Board
• Norris-LaGuardia Act of 1932

Restricts the ability of employers to obtain an
injunction against unions for their lawful activities.
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36
Wagner (NLRA) Act
• Wagner Act (National Labor Relations Act)
of 1935

Protects employee rights to organize and bargain
collectively through representatives of their choice.

Created the National Labor Relations Board (NLRB)
to govern labor relations in the United States.
– Holds secret ballot union representation elections.
– Prevents and remedies unfair labor practices.
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Wagner (NLRA) Act (cont.)
• Section 7 of the Act guarantees employee rights:

To self-organization, to form, join, or assist labor
organizations, to bargain collectively through freely
chosen representatives.

To engage in concerted activities, for the purpose of
collective bargaining or other mutual aid or protection.

To refrain from any or all of such activities except to
the extent that such right may be affected by an
agreement requiring membership in a labor
organization as a condition of employment.
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Wagner (NLRA) Act (cont.)
• Section 8 of the Wagner Act outlawed
employer practices that deny employees
their rights and benefits:

Interference with Section 7 rights

Domination of a union (company union)

Discrimination against union members

Arbitrary discharge of union members

Refusal to bargain with the union
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Amendments to the Wagner Act
• Taft-Hartley Act (The Labor-Management
Relations Act) of 1947


Balances rights and duties of labor and management in
collective bargaining by defining unfair union practices.
Created the Federal Mediation and Conciliation Service
(FMCS) to help resolve negotiating disputes.
• Landrum-Griffin Act (Labor-Management
Reporting and Disclosure Act) of 1959

Safeguards union member rights and prevents
racketeering and other unscrupulous practices by
employers and union officers.
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36
Taft-Hartley Act (Unfair Union Practices )
• Unions are prohibited from:

Interfering with Section 7 rights of employees

Interfering with representation elections

Influencing employers to discriminate with regard to union
membership

Refusal to bargain collectively with employer

Interference with certified employee representative’s
relationship with employer

Assessment of excessive initiation fees and dues on
bargaining unit members

“Featherbedding”
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Landrum-Griffin Act
(Bill of Rights of Union Members)
• Union members have the right to:

Nominate candidates for union office

Vote in union elections or referendums

Attend union meetings

Participate in union meetings and vote on union
business

Examine union accounts and records

Bring suit against union officers as necessary to
protect union funds
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The Labor Relations Process
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Why Employees Unionize
• As a result of their economic needs
(wages and benefits)
• Dissatisfaction with managerial practices
• To fulfill social and status needs.
• Social and leadership concerns
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Union Avoidance Practices
• Pay
• Promote more employees from within
• Conduct cultural audits
• Offer job rotations and training programs
• Share information with employees
• Have desirable working conditions
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Organizing
Steps
Steps in the
Organizing
Process
Employee/Union Contact
Initial Organizational
Meeting
Formation of In-House
Committee
Election Petition and
Voting Preparation
Contract Negotiations
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United Food and Commercial Workers
International Union Authorization Card
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Aggressive Organizing Tactics
• Political Involvement
• Neutrality Agreements
• Organizer Training
• Corporate Campaigns
• Information Technology
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Employer Tactics Opposing Unionization
• Stressing favorable employer-employee relationship
experienced without a union.
• Emphasize current advantages in wages, benefits, or
working conditions the employees may enjoy
• Emphasize unfavorable aspects of unionism: strikes,
union dues, abuses of legal rights
• Use statistics to show that unions commit large numbers
of unfair labor practices.
• Initiate legal action when union members and leaders
engage in unfair labor practices
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How Employees Become Unionized
• Bargaining Unit

A group of two or more employees who share
common employment interests and conditions and
may reasonably be grouped together for purposes
of collective bargaining.
• Exclusive Representation

The legal right and responsibility of the union to
represent all bargaining unit members equally,
regardless of whether employees join the union
or not.
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Employer “Don’ts” during Union Organizing
Campaigns
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NLRB Representation Election
• Representation Election Process

Pre-election Hearing:
– NLRB certifies that 30 percent of eligible employees in
bargaining unit have signed authorization cards and sets
date for election.

Election:
– NLRB conducts secret ballot election. If union wins the
majority of votes in the election, NLRB certifies the union as
the exclusive bargaining unit representative with which the
employer must collectively bargain.

Certification on Card Check:
– If at least 50 percent of employees within the bargaining unit
sign authorization cards, then the union may request
recognition by the employer.
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Impact of Unionization on Managers
• Challenges to Management Prerogatives

may involve such issues as the subcontracting
of work, productivity standards, and job content
• Loss of Supervisory Authority

covering wages, benefits, job security, and
working hours
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Structures, Functions, and Leadership
of Labor Unions
• Craft Unions

Represent skilled craft workers
• Industrial Unions

Represent all workers—skilled, semiskilled,
unskilled—employed along industry lines
• Employee Associations

Represent various groups of professional and whitecollar employees in labor-management relations.
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Structure and Functions of the AFL-CIO
GENERAL BOARD
Executive members and
principal officer of each
international union affiliate
Meets upon call of federation
president of executive council
Standing
committees
Staff
departments
Local unions affiliated
directly with AFL-CIO
Affiliated national and
international unions
Affiliated state bodies
Local unions of national
and international unions
Local bodies
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Structure and Functions of the AFL-CIO (cont.)
• The “House of Labor”

Disseminates labor policy developed by leaders
of affiliated unions.

Coordinates organizing activities among
affiliated unions.

Provides research and other assistance through
its various departments.

Lobbies before legislative bodies on labor subjects

Publicizes the concerns and benefits of unionization

Resolves disputes between different unions
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Structure and Functions of National Unions
• National Unions


•
set the broad guidelines for governing union members and for
formulating collective bargaining goals in dealing with
management
establishes the rules and conditions under which the local
unions may be chartered
Other services:
1.
2.
3.
4.
5.
training of union leaders,
legal assistance,
leadership in political activity,
educational and public relations programs, and
discipline of union members.
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Structure and Functions of Local Unions
Local Union Meeting (Normally Monthly)
Business
Representative
President
Secretary/Treasurer
Vice-Presidents
Sergeant at Arms
Various Committee Chairpersons
Training and
Education
Grievance
Committee:
Chief Steward and
Shop Stewards
Collective
Bargaining
Social
Local Union Members
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Structure and Functions of Local Unions (cont.)
• Local Officers

Elected officials who lead the union and serve on the
bargaining committee for a new contract.
• Union Steward

An employee, as a nonpaid union official, represents
the interests of members in their relations with
management.
• Business Unionism

The term applied to the goals of U.S. labor
organizations, which collectively bargain wages,
hours, job security, and working conditions.
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Labor Relations in the Public Sector
• Challenges to Public Sector Unionization:

No national-level public sector labor relations laws

Public employees’ wages and working conditions
set by law
– Collective bargaining for federal employees governed by
executive orders and the Civil Service Reform Act of 1978
– Various public civil service systems address public
employee complaints or grievances

Substitution of compulsory binding arbitration for the
guaranteed right to strike
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The Collective Bargaining Process
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The Bargaining Process
• Collective Bargaining Process

The process of negotiating a labor agreement,
including the use of economic pressures by both
parties.
–
–
–
–
Preparing for Negotiations
Gathering Bargaining Data
Developing Bargaining Strategies and Tactics
Negotiating the Labor Agreement
• Bargaining Zone

Area within which the union and the employer are
willing to concede when bargaining.
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The Bargaining Process (cont.)
• Good Faith Bargaining Requirements



Meetings to be held at reasonable times and places to
discuss employment conditions.
Proposals and counterproposals submitted by each
party must be realistic and reasonable.
Both parties must sign a written document of the
agreement reached through negotiations
• Interest-based Bargaining

Problem-solving bargaining based on a win-win
philosophy and the development of a positive longterm relationship.
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Management and Union Power in
Collective Bargaining
• Bargaining Power

The power of labor and management to achieve their
goals through economic, social, or political influence.
• Union Bargaining Power

Strikes, pickets, and boycotts
• Management Bargaining Power



Hiring permanent replacement workers
Continuing operations staffed by management
Locking out employees
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The Labor Agreement
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Administration of the Labor Agreement
• The bulk of labor relations activity comes from the
day-to-day administration of the agreement because
no agreement could possibly anticipate all the forms
that disputes may take.
• Once the agreement is signed, each side will
naturally interpret ambiguous clauses to its own
advantage. These differences are traditionally
resolved through the grievance procedure.
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Grievance Arbitration
• Rights Arbitration

Arbitration over interpretation of the meaning of
contract terms or employee work grievances.
• Fair Representation Doctrine

The doctrine under which unions have a legal
obligation to provide assistance to both members
and nonmembers in labor relations matters.
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Grievance (Rights) Arbitration
Issues in deciding to use arbitration
as a method for dispute resolution
Use of binding arbitration
Rights arbitration and EEO conflicts
Fair Representation Doctrine
Methods for choosing an arbitrator
Submission agreement and awards
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Arbitration Hearing
• The arbitrator declares the hearing open and obtains
the submission agreement.
• Parties present opening statements.
• Each side presents its case using witnesses and
evidence; witnesses can be cross examined.
• Parties make closing statements.
• Arbitrator closes hearing and designates date and
time for rendering the award.
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Arbitration Award
• Factors arbitrators use to decide cases:

The wording of the labor agreement (or employment
policy in nonunion organizations).

The submission agreement (statement of problem
to be solved) as presented to the arbitrator.

Testimony and evidence offered during the hearing.

Arbitration criteria or standards (similar to standards
of common law) against which cases are judged.
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Contemporary Challenges to
Labor Organizations
• Decrease in Union Membership

A shift from traditional unionized industries
(manufacturing, mining) to high technology
industries (computers, pharmaceuticals).

Growth in the employment of part-time and
temporary workers.

Growth in small businesses, in which unionization
is more costly and difficult to perform.

Globalization of the workforce particularly among
low wage employers
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Contemporary Challenges to
Labor Organizations (cont.)
• Globalization and Technological Change


Offshoring: work that was previously carried out in one
country moved to another
most of the recent growth in U.S. companies comes from
outside of the country
• Employers need to pay more attention to the
relevant stakeholders such as unions, employees
and communities in which they operate
• Most job loss in America is not due to offshoring,
but rather to technological changes.
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Key Terms
•
•
•
•
•
•
•
arbitrator
authorization card
bargaining power
bargaining unit
bargaining zone
business unionism
collective bargaining
process
• craft unions
• employee associations
• exclusive representation
•
•
•
•
•
•
•
fair representation doctrine
grievance procedure
industrial unions
interest-based bargaining
labor relations process
rights arbitration
unfair labor practices
(ULPs)
• union shop
• union steward
• offshoring
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Chapter 14 - Learning Outcomes
Learning Outcome Statements
Related Outcomes from Body of the Text
1
Identify and explain the main federal laws that
provide the framework for labor relations.
What role did the government play in the dispute between NFL owners and players? Which
law protects both the NFL owners and players’ union?
2
Explain the reasons employees join unions.
While unionization in the private sector is declining, certain industries, such as the hospitality
industry, are gaining ground in unionization. If you were a service worker in a hotel, what
factors would make you want to join a union?
3
Describe the process by which unions organize
employees and gain recognition as their bargaining
agent.
4
Discuss the bargaining process and the bargaining
goals and strategies of a union and an employer.
5
Differentiate the forms of bargaining power that a
union and an employer may utilize to enforce their
bargaining demands.
6
Describe a typical union grievance procedure and
explain the basis for arbitration awards.
7
Discuss some of the contemporary challenges to
labor organizations.
Despite union avoidance efforts, some employees may still want to unionize. What steps can
they take in unionizing? What steps can employers take in trying to stop the union from
organizing?
If you were a manager in charge of bargaining with the union, what would be the first steps you
would take in the collective bargaining process? How would you ensure that the bargaining
does not become highly adversarial?
When the NFL and the NFL Players Association came to a deadlock, what forms of bargaining
power did each side possess? Who do you think had more power?
How would you resolve a complaint about your boss making you do work that is not in your
contract? Would you need an arbitrator?
Do technology changes and globalization improve the situation of unions in America?
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