Human Resource Management
10th Edition
Chapter 12
LABOR UNIONS & COLLECTIVE
BARGAINING
© 2008 by Prentice Hall
12-1
HRM in Action: Change to Win
Coalition
• New union federation consisting of seven unions
that broke from AFL-CIO and formally launched
rival labor federation representing about 6
million workers in 2005
• Led by Service Employees International Union
• Also included are Teamsters, United Food and
Commercial Workers, Unite Here, Carpenters’
Union, Laborers’ International Union of North
America, and United Farm Workers
© 2008 by Prentice Hall
12-2
Union Objectives
• To secure and, if possible, improve living
standards and economic status of members.
• To enhance and, if possible, guarantee
individual security against threats and
contingencies that might result from market
fluctuations, technological change, or
management decisions.
• To influence power relations in social system in
ways that favors and does not threaten union
gains and goals.
© 2008 by Prentice Hall
12-3
Union Objectives (Cont.)
• To advance welfare of all who work
for a living, whether union members
or not.
• To create mechanisms to guard
against use of arbitrary and
capricious policies and practices in
workplace.
© 2008 by Prentice Hall
12-4
Union Growth Strategies
• Strategically Located Union Members
• Organizing Several Big Companies at Once
• Pulling Union Through
• Political Involvement
• Union Salting
• Flooding Community
• Public Awareness Campaigns
• Building Organizing Funds
• Befriending Laid-off Workers
• Organizing through Card Check
© 2008 by Prentice Hall
12-5
Strategically Located Union
Members
• Importance of jobs held by
union members significantly
affects union power
• Few strategically located
union members may exert
disproportionate amount of
power
• Truckers or dock workers
can affect entire country
© 2008 by Prentice Hall
12-6
Organizing Several Big Companies
at Once
• Service Employees International Union
(SEIU) in Houston organized janitors at
several big companies at once
• Negotiated big industry-wide contract
• Eliminates each company’s fear of being
undercut by competitors if it allows higher
wages
• Companies stay neutral
© 2008 by Prentice Hall
12-7
Pulling the Union Through
• Put pressure on end user of
company’s product
• Strike against four Johnson
Controls factories that make
interior parts for some of
country’s best-selling vehicles
• GM and Chrysler played active
behind-the-scenes role by
pressuring JCI to settle dispute
© 2008 by Prentice Hall
12-8
Political Involvement
• Political arm of AFL-CIO is Committee on
Political Education (COPE)
• Union recommends and assists
candidates who will best serve its interests
• With friends in government, union in
stronger position
• Give money to candidates who pledge to
help pass pro-labor legislation
© 2008 by Prentice Hall
12-9
Union Salting
• Process of training union
organizers to apply for jobs at
company and, once hired, work
to unionize
• Supreme Court has ruled
employers cannot discriminate
against union salts
© 2008 by Prentice Hall
12-10
Flooding the Community
• Process of union inundating communities
with organizers to target particular
business
• Unions typically choose companies in
which nonunionized employees have
asked for help in organizing
• Target weak managers’ departments as
way to appeal to dissatisfied employees
© 2008 by Prentice Hall
12-11
Public Awareness Campaigns
• Labor maneuvers that do not coincide with
strike or organizing campaign to pressure
employer for better wages, benefits, and the like
• Alternative to strikes because more employers
are willing to replace striking workers
• Employers have less recourse against labor
campaigns involving joint political and
community groups that support union goals
© 2008 by Prentice Hall
12-12
Building Organizing Funds
• AFL-CIO asks its affiliates to
increase organizing funds
• Increase funding to organizing
institute, which trains organizers,
and launches advertising campaign
to create wider public support for
unions
© 2008 by Prentice Hall
12-13
Befriending Laid-Off Workers
• AFL-CIO hopes castoffs from
Enron, WorldCom, and
others will become advocates
for organizing
• Fear and stress break down
relationships between
management and workers
© 2008 by Prentice Hall
12-14
Organizing through Card Check
• Organizing approach where employees
sign card of support if they want
unionization
• If 50% of work force plus one worker sign
card, it is considered a union victory
• Expedited ways of polling workers on
union representation but no secret-ballot
election takes place
© 2008 by Prentice Hall
12-15
Why Employees Join Unions
• Dissatisfaction with
management
• Social outlet
• Opportunity for
leadership
• Forced unionization
• Peer pressure
© 2008 by Prentice Hall
12-16
Dissatisfaction with Management
• Compensation
• Job Security
• Management
Attitude
© 2008 by Prentice Hall
12-17
Social outlet
• Many people have strong social needs
• Take advantage of union-sponsored
recreational and social activities that
members and their families find fulfilling
• People who develop close personal
relationships will likely stand together in
difficult times
© 2008 by Prentice Hall
12-18
Opportunity for leadership
• Some individuals aspire to leadership
roles
• Employees with leadership aspirations can
often satisfy those aspirations through
union membership
• Union also has a hierarchy of leadership
that begins with the union steward
© 2008 by Prentice Hall
12-19
Forced Unionization
• In 28 states without right-to-work
laws, legal for employer to agree
with union that new employee
must join union after certain period
of time (generally 30 days) or be
terminated
• Referred to as union shop
agreement
© 2008 by Prentice Hall
12-20
Right-to-Work Laws
• Prohibit management and unions from
entering into agreements requiring union
membership as condition of employment
• State statutes or constitutional provisions
that ban practice of requiring union
membership or financial support as
condition of employment
• 22 states, located primarily in South and
West, have adopted such laws
© 2008 by Prentice Hall
12-21
Peer Pressure
• Some will join a union because they are
urged to do so by other members of the
workgroup
• May constantly remind an employee that
he or she is not a member of the union
• In extreme cases, union members have
threatened nonmembers with physical
violence and sometimes have carried out
these threats
© 2008 by Prentice Hall
12-22
Union Structure
• Local union
• National (or international)
union
• American Federation of Labor
and Congress of Industrial
Organizations (AFL-CIO)
• Change to Win Coalition
© 2008 by Prentice Hall
12-23
Local Union
• Basic element in
structure of
American labor
movement
• Deals with
employer on
day-to-day basis
© 2008 by Prentice Hall
12-24
Craft and Industrial Unions
• Craft union - Such as Carpenters and
Joiners, is typically composed of
members of particular trade or skill in
specific locality
• Industrial union - Consists of all
workers in particular plant or group of
plants (example, United Auto
Workers)
© 2008 by Prentice Hall
12-25
National Union
• Composed of local unions, which it
charters
• Local union, not individual worker, holds
membership in national union
• Service Employees International Union is
largest and fastest growing national union
(1.8 million members)
• International Brotherhood of Teamsters
has about 1.4 million members
© 2008 by Prentice Hall
12-26
American Federation of Labor and
Congress of Industrial Organizations
(AFL-CIO)
• Represents labor
interests at highest level
• Does not engage in
collective bargaining
• Financed by member
national unions
• Has little formal power or
control
• Central trade union
federation in U.S.
© 2008 by Prentice Hall
12-27
The Structure of the AFL-CIO
Convention Meets biennially
Executive Council
President, Secretary-Treasurer,
and 33 Vice Presidents
Meets at least three times a year
Executive Officers
President and Secretary-Treasurer
Department or
Organization and
Field Services
National Headquarters
General Board
Executive Council members
and principal officer of each
international union affiliate
Meets on call of Federation
President or Executive
Council
Standing Committees
Staff Departments
Regional Directors
Trade and Industrial
Departments
Building, Food, Metal,
and Maritime Trades,
Industrial Union,
Public and Railway
Employees, Union
Label
Local Dept. Councils
Affiliated National and
International Unions
Local Unions of National and
International Unions
Local unions affiliated directly
©with
2008AFL-CIO
by Prentice Hall
Affiliated State Bodies
Local Bodies
12-28
Remember the Change to Win
Coalition
• New union federation consisting of seven unions
that broke from AFL-CIO and formally launched
rival labor federation representing about 6
million workers in 2005
• Led by Service Employees International Union
• Also included are Teamsters, United Food and
Commercial Workers, Unite Here, Carpenters’
Union, Laborers’ International Union of North
America, and United Farm Workers
© 2008 by Prentice Hall
12-29
Collective Bargaining Defined
Performance of mutual obligation of employer
and representative of employees to meet at
reasonable times and confer in good faith with
respect to wages, hours, and other terms and
conditions of employment, or the negotiation of
an agreement, or any question arising there
under, and execution of written contract
incorporating any agreement reached if
requested by either party, but such obligation
does not compel either party to agree to
proposal or require making of a concession.
© 2008 by Prentice Hall
12-30
Bargaining Unit
Consists of employees
(not necessarily union
members) recognized by
employer or certified by
administrative agency as
appropriate for
representation by labor
organization for purposes
of collective bargaining
© 2008 by Prentice Hall
12-31
Steps for Forming a Bargaining Unit
External Environment
Internal Environment
Signing of
Authorization
Cards
Petition
for
Election
Election
Campaign
© 2008 by Prentice Hall
Election
and
Certification
12-32
Signing Authorization Cards
• Document indicating employee wants to
be represented by labor organization in
collective bargaining
• Is there sufficient interest on part of
employees to justify unit?
• Evidence of interest when at least 30% of
employees in workgroup sign
authorization cards
• Usually need 50% to proceed
© 2008 by Prentice Hall
12-33
Petition for Election
• After authorization
cards have been
signed, petition for
election made to
regional NLRB office
• NLRB will ordinarily
direct that election be
held within 30 days
© 2008 by Prentice Hall
12-34
Election Campaign
• Both union and management usually
promote causes actively
• Cannot threaten loss of jobs or benefits
• Cannot misstate important facts
• Illegal to incite racial or religious prejudice
© 2008 by Prentice Hall
12-35
Election and Certification
• NLRB monitors secret-ballot election
• Board issues certification of results to
participants
• If majority of employees vote for union,
NLRB will certify
© 2008 by Prentice Hall
12-36
Collective Bargaining
• Fundamental to
management-organized
labor relations in United
States
• Process does not require
either party to make
concessions; only
compels them to bargain
in good faith
© 2008 by Prentice Hall
12-37
Forms of Bargaining Structures
• One company dealing
with a single union
• Several companies
dealing with single union
• Several unions dealing
with single company
• Several companies
dealing with several
unions
© 2008 by Prentice Hall
12-38
Collective Bargaining Process
EXTERNAL ENVIRONMENT
INTERNAL ENVIRONMENT
Preparing for Negotiation
Bargaining Issues
Preparing for Negotiation
Negotiation Breakdowns?
Yes
Overcoming Breakdowns
No
Reaching the Agreement
Ratifying the Agreement
Administration of the Agreement
© 2008 by Prentice Hall
12-39
Psychological Aspects of
Collective Bargaining
• Difficult because
process is adversarial
situation and must be
dealt with as such
• Psychological aspects
vitally important
© 2008 by Prentice Hall
12-40
Bargaining Issues
• Mandatory bargaining issues Wages, hours, etc.
• Permissive bargaining issues May be raised but neither side
may insist that they be
bargained over
• Prohibited bargaining issues Statutorily outlawed
© 2008 by Prentice Hall
12-41
Bargaining Issues
Document that results from collective bargaining
process is labor agreement or contract
• Recognition
• Management Rights
• Union Security
• Compensation and Benefits
• Grievance Procedure
• Employee Security
© 2008 by Prentice Hall
12-42
Recognition
• Appears at beginning of labor
agreement
• Identifies union that is
recognized as bargaining
representative
• Describes bargaining unit
© 2008 by Prentice Hall
12-43
Management Rights
Section that is often
(but not always)
written into labor
agreement which
spells out rights of
management
© 2008 by Prentice Hall
12-44
Union Security
• Closed Shop - Arrangement whereby
union membership is prerequisite to
employment
• Union Shop - Requires all employees
become members of union after specified
period
• Maintenance of Membership - Must
continue memberships until termination of
agreement
© 2008 by Prentice Hall
12-45
Union Security (Cont.)
• Agency Shop - Nonunion members pay union
equivalent of membership dues as kind of tax
• Exclusive Bargaining Shop - Company must
deal with union that has achieved recognition,
but employees not obligated to join
• Open Shop - Equal terms for union members
and nonmembers
• Dues Checkoff - Company agrees to withhold
union dues
© 2008 by Prentice Hall
12-46
Compensation and Benefits
• Wage rate schedule
• Overtime and premium
pay
• Jury pay
• Layoff or severance pay
• Holidays
• Vacation
• Family care
© 2008 by Prentice Hall
12-47
Grievance Procedure
• Means by which employees can voice
dissatisfaction with specific management
actions
• Procedures for disciplinary action by
management
• Termination procedure that must be
followed
© 2008 by Prentice Hall
12-48
Employee Security
Seniority - Length
of time employee
has been
associated with
company, division,
department, or job
© 2008 by Prentice Hall
12-49
Job-Related Factors
Many of rules
governing
employee
actions on job
are included
© 2008 by Prentice Hall
12-50
Negotiating the Agreement
• Begins with each side presenting
initial demands
• Suggests certain amount of give and
take
• Each side does not expect to obtain
all demands presented
© 2008 by Prentice Hall
12-51
Example of Negotiating Wage Increase
10
15
20
LABOR
Additional Cents
per Hour Demanded
25
30
35
40
Bargaining
Zone
Labor’s Final
Offer (before
strike)
10
15
MANAGEMENT
Additional Cents
per Hour Offered
20
Labor’s
Plan B
25
30
Labor’s
Plan A
35
40
Bargaining
Zone
Management’s
Plan A
Management’s
Plan B
© 2008 by Prentice Hall
Management’s Final
Offer (before plant
lockout)
12-52
Breakdowns in Negotiations
• Third party intervention
• Union strategies for
overcoming
breakdowns
• Management strategies
for overcoming
breakdowns
© 2008 by Prentice Hall
12-53
Third Party Intervention
• Mediation - Neutral party
comes in when impasse
has occurred
• Arbitration - Impartial
third party makes binding
decision to settle dispute
• Sources of mediators and
arbitrators - FMCS and
AAA
© 2008 by Prentice Hall
12-54
Types of Arbitration
• Rights arbitration - Disputes
over interpretation and
application of various
provisions of existing contract
• Interest arbitration - Disputes
over terms of proposed
collective bargaining
agreements (Rarely used in
private sector)
© 2008 by Prentice Hall
12-55
Union Strategies for Overcoming
Negotiation Breakdowns - Strikes
• Strikes - Union members refuse to work to
pressure management in negotiations
• Halts production, resulting in lost
customers and revenue
• Fewer strikes today
• Timing is important
• Unions prefer to strike only as last resort
© 2008 by Prentice Hall
12-56
Trends & Innovations:
Virtual Strikes
• Proposed as means to avoid hurting
others
• When labor calls a strike then more than
labor and management are hurt
• In virtual strike only labor and
management suffers
• Worker wages, management salaries, and
company profits, go into separate account
© 2008 by Prentice Hall
12-57
Union Strategies for Overcoming
Negotiation Breakdowns - Boycotts
• Union members agree to refuse to use or
buy firm’s products
• Effect often lasts much longer than strike
• Shoppers change buying habits
• Example - Coors
• Secondary Boycott - Union practice to
encourage third parties to stop doing
business with company
Illegal
© 2008 by Prentice Hall
12-58
Other Union Tactics
• Byline strike - Newspaper writers withhold
their names from stories
• Informational picketing - Union members
display placards and hand out leaflets,
usually outside their place of business,
depicting information union wants general
public to see
© 2008 by Prentice Hall
12-59
Management Strategies for
Overcoming Negotiation Breakdowns Lockout
• Lockout - Keep employees out; operate by
placing management and nonunion
workers in striking workers’ jobs
• Effective when management dealing with
weak union, when union treasury is
depleted, or when business has excessive
inventories
• Type of industry involved has considerable
effect on impact of this maneuver
© 2008 by Prentice Hall
12-60
Management Strategies for Overcoming
Negotiations Breakdowns – Continue
Operations Without Striking Workers
• Operate firm by placing management and
nonunion workers in striking workers’ jobs
• Type of industry involved
• At petroleum refinery or chemical plant,
this practice may be quite effective
© 2008 by Prentice Hall
12-61
Ratifying the Agreement
• May be more difficult for
union
• Until approved by majority
of union members,
proposed agreement is not
final
• Approval process for
management is easier
© 2008 by Prentice Hall
12-62
Administration of the Agreement
• Larger and perhaps more important part of
collective bargaining
• Seldom viewed by public
• Agreement establishes unionmanagement relationship for duration of
contract
© 2008 by Prentice Hall
12-63
Collective Bargaining for
Federal Employees
• Executive Order 10988
established basic
framework for collective
bargaining in federal
government agencies.
• Did not allow bargaining
over wage issues
© 2008 by Prentice Hall
12-64
Union Decertification
• Essentially reverse of process that
employees must follow to be recognized
as official bargaining unit
• Employees have used decertification
petitions with increasing frequency and
success
© 2008 by Prentice Hall
12-65
Decertification Procedure
• Rules established by NLRB
• At least 30% must petition for election
• Petition submitted 60-90 days prior to
expiration of current contract
• Schedule decertification election
• If majority of votes against union,
employees will be union free
© 2008 by Prentice Hall
12-66
Management and Decertification
• If management wants union decertified,
must be active rather than passive
• Effective first-line supervisors
• Effective communication
• Trust and openness
• Effective compensation programs
• Effective employee and labor relations
© 2008 by Prentice Hall
12-67
Unions Today
• Fall of Big Labor has
been dramatic
• Unionized share of
private sector workforce
is 7.8 percent in 2005
© 2008 by Prentice Hall
12-68
Percentage of the Private Workforce That is
Unionized
Percentage of Workforce
40
40
30
30
20
20
10
10
8
0
1950
1955 1960 1965 1970 1975 1980 1985
© 2008 by Prentice Hall
Year
1994
2002
2005
0
12-69
A Global Perspective: The ICFTU
Says Union Organizing Can Be
Dangerous
• Thousands of trade unionists have been
arrested, jailed, tortured, fired, intimidated,
and murdered or disappeared, across the
world
© 2008 by Prentice Hall
12-70
© 2008 by Prentice Hall
12-71