CHAPTER 12:
LABOR RELATIONS
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Union Membership
• Decline in union membership
– Workers have become disenfranchised from unions
– Many unionized firms have moved operations
outside US
– Change in nature of work and technology has
eliminated many traditionally unionized manual labor
jobs
– Unions have often refused to be flexible enough to
allow organizations to grow and adapt to changes in
industries
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Why Study Labor Relations?
• Unionization is norm in many industries
• Contract settlements with unionized competitors
may impact on HR practices, programs, and
policies needed to remain competitive
• Managers of non-unionized firms need to know
– Why and how employees form unions
– Legal requirements of representation and collective
bargaining process
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Why Employees Organize
• Employees seek to form unions because of
perceived economic, social and political benefits
of organization
–
–
–
–
–
Higher or more equitable wages
Better or expanded benefits
Greater job or employment security
Affiliation and sense of community
Sense of power/influence in numbers
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Strategic Challenges of Organized Labor
• Organized labor can have significant impact on
organizational performance
– Employee/management power balance is redistributed
– Brings in “outside players” whose support must be gained
for any new and ongoing management initiatives
– Unionized work setting can greatly impact organization’s
cost structure
• Payroll expenses
• Efficiency of work processes
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National Labor Relations Act (NLRA)
• NLRA, a.k.a. the Wagner Act, (1935)
– Provided rights for employees to organize, elect
representatives, and collectively bargain
– Required employers to recognize rights of employees to
organize and bargain collectively with elected representatives
– Act regulates process of union/management relations
– Created National Labor Relations Board (NLRB) to oversee
and enforce provisions of Act
http://www.nlrb.gov/
• U.S. Labor Code also includes:
– Taft-Hartley Act (1947) – Labor Management Relations Act
– Landrum-Griffin Act (1959) – Labor-Management Reporting
and Disclosure Act
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NLRA: Six Notable Provisions
1.
2.
3.
Right of employees to
discuss employment
terms
Right to complain to
third parties, such as
customers, clients, and
media
Employees have right to
engage in work
stoppage or collective
walk out to protest
working conditions
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4. Employees have right to
honor picket lines
without fear of
retaliation
5. Employees have
conditional right to
solicit and distribute
union literature
6. Employers cannot
unilaterally ban
employees access to
work site while off-duty
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Steps in Organizing Process
• Employees conduct organizing campaign in
which 30% of employees sign
“authorization cards”
• Employees petition NLRB to hold
representation election and to determine
bargaining unit
• If union receives majority vote in election, it
gains representation status to bargain
collectively for a contract with employer
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Behavior During Organizing Campaigns
• NLRA
– Regulates employer/employee activities during organizing
campaigns; violations are considered unfair labor practices
– Employers cannot conduct reprisals against employees who
exercise their rights as defined in NLRA
– Prounion employees have right to approach coworkers and
express union support during nonworking periods in
nonworking areas
– Employers can restrict access to employees by nonemployees, if organizers have other means of access, and
there is a policy in place of banning solicitation by nonemployees
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Collective Bargaining
• Collective bargaining between union and employer
covers various terms and conditions of
employment
• NLRA classification of bargaining items
– Mandatory items that must be negotiated in good faith
• Can be bargained to impasse
– Permissive items can be included if both parties agree
• Cannot be bargained to impasse
– Prohibited items cannot be negotiated because of illegality
under terms of NLRA or other laws
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Exhibit 12-1
Types of Bargaining Items
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Union Security Issues
• Unions attempt to increase security of status by
bargaining for
– Union shop agreements: Require new employees to join
union after initial employment period
– Agency shop agreements: Require employees who choose
not to join union to pay “representation fees” to cover union’s
cost of representing them
– Dues check-off agreement: Employer deducts union dues
from paychecks of union employees
• Current issues concerning “Beck Rights”
http://nlrb.custhelp.com/cgi-bin/nlrb.cfg/php/enduser/std_alp.php
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Failure to Reach Agreement
• Failure in bargaining negotiations to reach agreement
(impasse) may result in a strike or lockout
• Economic strikes
– Result of bargaining impasse over wages or other monetary-related
issues
– Striking workers can be permanently replaced in economic strikes
• Unfair labor practice strikes
– Employees strike in response to management’s unfair labor practices
– Striking workers cannot be permanently replaced in unfair labor practice
strikes
• Wildcat strikes
– Unauthorized strikes by workers who walk out in violation of collective
bargaining agreement
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Related Bargaining Issues
• Government workers
– Generally prohibited by law from striking
• Laws vary by state and occupation
– Must seek arbitration
• http://werc.wi.gov/
• Organizations can prevent strikes by
– Using mediation to restart bargaining process
• http://www.fmcs.gov/
– Agreeing to submit unresolved issue(s) to binding arbitration
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Unions Today
• Recruit in organizations and industries
with which they have no previous
affiliation
• Rely on technology
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Reading 12.1(MacDougall)
Changes in the NLRB
• Clinton NLRB issued several decisions which
favored interests of bargaining representative or
preference for collective bargaining agreements
over expression of employee free choice
• Ruled that workers provided by temporary
employment agency may be included in same
collective bargaining unit as client’s regular
employees without mutual consent of agency and
its client
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Reading 12.1
Controversial Rulings of Clinton NLRB
• Overruled established principles of law that
employer could withdraw recognition from union
if employer has good-faith uncertainty as to
union’s majority status
• Extended “Weingarten” right to nonunion
employees
– Epilepsy Foundation decision (2001): Employers must grant
requests by nonunion employees to be accompanied by coemployee of their choice at any investigatory meeting that
employee “reasonably believes” may result in disciplinary
action
– Update: Overturned in 2004
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Latest NLRB Policy on Employee Weingarten Rights
2004— In a decision dated June 9, 2004, the NLRB overruled Epilepsy Foundation and held that nonunionized employees do not have a right to co-worker representation at investigatory interviews.
IBM Corp., 341 NLRB No. 148 (June 9, 2004).
The NLRB noted that, unlike union representatives, a non-union co-worker: (1) does not
represent the interests of the entire workforce; (2) cannot redress the imbalance of power
between the employer and its employees; (3) does not have the same skills as a union
representative in facilitating workplace interviews; and (4) does not have any obligation to
maintain the confidentiality of information elicited during a workplace interview.
According to the NLRB, although "many of these same concerns exist in a unionized setting,"
the "dangers are far less when the assisting person is an experienced union representative with
fiduciary obligations and a continuing interest in having an amicable relationship with the
employer." Balancing all of the policy considerations, the NLRB ruled that non-unionized
employees do not have a right to co-worker representation at investigatory interviews.
SOURCE: O’Melveny & Myers, LLP, Labor and Employment Alert, June 29, 2004. Accessed on April 17, 2006 at:
http://www.omm.com/webdata/content/publications/client_alert_labor_2004_06_29.htm
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Reading 12.1
Controversial Rulings of Clinton NLRB
• Ruled that companies doing business with
employer that chooses to contest Board
certification of union are excluded from
secondary boycott protections
• Expanded doctrine to hold that policy
impacting adversely on union members is
discriminatory, even without any showing
of discriminatory intent
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Reading 12.1
Controversial Rulings of Clinton NLRB
• Recognized that role played by legitimate
employee involvement structures is
substantially different from that of sham
unions
• Sought to assist union organizers by
extending property access rights to them in
number of cases
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Reading 12.1
Bush NLRB
• Likely to address important issues that
have never been decided by Board
– New forms of union solicitation
– Card check/neutrality agreements
– Corporate campaigns
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Reading 12.2 (Thrasher)
Employment Litigation
• Liability claims have risen
400% in past two decades
– 67% of plaintiffs win in trial
– 90% of claims brought against
employers are settled for
average of $390,000
– 91% of all discrimination
claims are successfully
resolved through consent
decrees, settlements, and
favorable court orders – all
unfavorable to most
employers
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• Damages company’s
reputation and its
ability to hire top
talent
• Can devastate
employee morale
• Employment practices
liability insurance
costs have
skyrocketed
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Reading 12.2
Employment Practices Compliance System
• Effective risk management should be pervasive
responsibility throughout organization
• Critical for organizations to consistently monitor,
quantify, and measure effectiveness of company’s
compliance program
• EPCS is interactive, online tool that provides
method of achieving nearly 100% workforce
compliance
• Educates employees
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Reading 12.2
Employment Practices Compliance System
• Can be antidote to hardening insurance market
• Provides high level of protection against
employment lawsuits
• Demonstrates “good faith efforts”
• Prevention strategy
– Raising workforce compliance and understanding
• Substantiation strategy
– Systematic, centralized documentation of compliance
activities
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Reading 12.2
Good Faith Efforts
• Adopt compliant policies
• Distribute to all employees
• Train managers and employees
• Investigate promptly
• Enforce consistently
• Evaluate practices
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Reading 12.3 (Lazes & Savage)
Unions’ Experimental Strategies
• Education and retraining
• Research and development to improve and
develop new products and services
• Voice in strategic management decision
making and ownership
• Capital investment and pension funds
• Industrial sector approach
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Reading 12.3
Initiating Nontraditional Strategies
• Education is key
• Unions need to have specific knowledge
necessary to contribute substantively
• Unions need to develop effective process
for communicating with members and
involving them in changes
• Unions need clear agenda for change
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