MGT 4E30 – Spring 2016
Class 19 – Chapter 13
WORKING WITH ORGANIZED LABOR
History of Labor Unions
Most instances of labor unrest in the Colonial era were temporary and isolated
• 1636 – Fisherman’s strike in Maine
• 1677 – 12 Carmen fined for going on strike
• 1721 – Tailors conspired to raise wages
• 1806 – Cordwainers (shoe makers) agitated to raise wages
• Guilds – an association of skilled craftsmen (stone masons, cigar makers, silversmiths, hat
fitters, musicians, etc.
• Industrial Revolution gave rise to stronger organized labor concepts and legal challenges
Notable Labor Organizations
1886 – American Federation of Labor (autonomous trade unions
with central administration)
1891 – International Brotherhood of Electrical Workers (IBEW)
1892 – International Longshoreman’s Association (ILA)
1903 – International Brotherhood of Teamsters (IBT)
1905 – Industrial Workers of the World (IWW)
1915 – Brotherhood of Sleeping Car Porters (BSCP)
1931 – United Auto Workers (UAW)
Overview of Unions
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Union
 An independent organization that represents employees’
interests and deals with issues such as wages, work hours and
working conditions
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Employees join unions when they:
 Are dissatisfied with aspects of their job
 Feel they lack influence with management
 See unionization as a solution to their problems
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Why Do People Join Unions?
To achieve negotiating power relative to:
• Pay & Benefits
• Job Security
• Legal protection against unfair labor practices
• Worker’s rights & workplace issues
• Affect government policy
• Grievance procedures
• Union services (education & training)
• A feeling of brotherhood
Organizational Issues Generating Some Reasons
for Organized Labor
• Dictator-like company owners
• Unfair and dangerous labor practices
• The Jungle – Upton Sinclair (1906)
• Representation on work issues
• Feel that they lack influence on their jobs
• Union’s best ally is bad management
• Union’s worst adversary is smart and caring management
Workplace Issues
Job security
Opportunity
Health & Safety
Discrimination
Wages & benefits
Competition
Fair treatment
Favoritism
HRM Thought Starter…
Do workers get better representation through the unions or
through the federal government systems, e.g. OSHA, EEO, Courts,
etc.?
Historical & Current Challenges
to Organized Labor
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Economic downturns - recessions, depressions, panics
Aggressive anti-union activities by smarter management
Government legislation & take over of labor issues
Wars (W.W.I - W.W.II – Korea - Vietnam)
Globalism
Information Technology
Reduction in union power
Changing economic and political realities
Individualism (USA) vs. collectivism (China)
Philosophical And Psychological Bonds For Unions
A core set of values
• Solidarity
• The sense that each should look out for the interests of all
• Commitments to mutual assistance
• Commitment to a rough-and-ready sense of equality
• Commitment to a disdain for elitism
• Commitment to a belief that democracy and individual rights did not
stop at the plant gate or the office reception room.
Common Interests Between Unions & Management
• Strong business performance
• Growing the business
• Generating job opportunities for employees
• Profits for the company
• Improved safety
• Career or job stability
• Others???
Friction Between Union & Company Interests, e.g.
• Higher pay and/or benefits for employees = higher costs for company
• Higher costs for company = erosion of market share & competitive pricing
opportunities
• Job security = lack of flexibility to take advantage of market opportunities
• Historical friction
Pressure Points for Labor & CEO
Labor Leader – Single issue focus
CEO – Multiple issue focus
Contracts
Grievances
Security
Work rules
Seniority
Worker representation
Investors / Wall Street
Finance
Gov’t regulators
Taxes
Competitive marketplace
Suppliers
Globalism
Labor Relations
The Legal Environment
Five Important Laws
• Railway Labor Act of 1926
(Coolidge)
• Norris-LaGuardia Act of 1932
(Hoover)
• Wagner Act of 1935
(Roosevelt)
• Taft-Hartley Act of 1947
(Truman)
• Landrum-Griffin Act or 1959
(Eisenhower)
Railway Labor Act of 1926 (Coolidge)
Amended 1932 & 1936 (Roosevelt)
• Federal law that governs labor
relations in the transportation
industry
• Covers airlines, railroads &
trucking industries
• Provides dispute settlement
procedures in the absence of a
labor agreement
• Provides opportunities for
Presidential and Congressional
intervention when the issues
disrupt interstate commerce
Norris-LaGuardia Act of 1932 (Hoover)
This act makes it easier for employees to engage in union-organizing
activities. Three main provisions:
1. Employees are free to form unions without employer interference and
engage in collective bargaining;
2. Removes jurisdiction from federal courts vis-a-vis the issuance of
injunctions in non-violent labor disputes
3. Outlaws the "yellow-dog" contract, i.e. an agreement between an
employer and an employee in which the employee agrees, as a condition
of employment, not to be a member of a labor union
The National Labor Relations Act of 1935
a.k.a. The Wagner Act (FDR)
US labor law which guarantees basic rights of private sector employees to:
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Organize into trade unions;
Engage in collective bargaining for better terms and conditions at work
Take collective action including strike if necessary;
Created the National Labor Relations Board which
Conducts elections that, if successful, can require employers to engage in
collective bargaining with labor unions (a.k.a. trade unions.)e
lations Act of 1935,
a.k.a. The Wagner Act (FDR
The National Labor Relations Act of 1935
a.k.a. The Wagner Act (FDR)
Passed for three main reasons
1. To protect the rights of employees and employers
2. To encourage these parties to engage in collective bargaining
3. To control their activities so that the economy wouldn’t be adversely
affected
The National Labor Relations Board
• National Labor Relations Board (NLRB)
• Independent federal agency
• Certifies elections
• Investigates unfair labor practice charges
• Can issue cease and desist order, if management:
• Interferes with union formation or administration
• Discriminates against union members
• Refuses to bargain with the union
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National Labor Relations Board
• 5 members – appointed by the President – Staggered terms
• 26 regional offices + Puerto Rico & American Samoa with authority to:
• Conduct elections
• Investigate unfair labor practice charges
• Make the initial determination on those charges (whether to dismiss,
settle, or issue complaints).
Taft-Hartley and Landrum-Griffin Acts
∎Taft-Hartley Act of 1947 (Truman)
∎Protects management and workers from union coercion
∎Prohibits discrimination against non-union employees
∎Illegal to refuse to bargain in good faith
∎Permits states to become “right-to-work” state
∎Also prohibits unethical practices
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The Landrum-Griffin Act of 1959 (Eisenhower)
∎ Protects union members from union leaders
∎ Unions must have bill of rights and constitution
∎ Union elections regulated by government
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Right To Work Law
Taft-Hartley Act allows states to pass ‘Right To Work’ laws:
• A statute that prohibits union security agreements, or agreements between labor
unions and employers, that govern the extent to which an established union can
require employees' membership, payment of union dues, or fees as a condition of
employment, either before or after hiring.
• The Right to Work principle affirms the right of every American to work for a living
without being compelled to belong to a union;
• In ‘right-to-work’ states, compulsory unionism in any form, e.g. closed shop, agency
shop, is prohibited
States with Right-to-Work Laws
SOURCE: National Right to Work Legal Defense Foundation, “Right to Work States,” www.nrtw.org , accessed May 3, 2012.
Types of Union Membership
Closed Shop (outlawed by Taft-Hartley)
• Requires workers to join a union before they can be hired
• Requires employers to go to the union first to hire new employees
• Employers may hire non-union employees only if union employees are not available
or have the requisite skills
• Taft-Hartley ended the right of unions to decide who could be members of the
union.
Agency Shop
• Employees cannot be forced to join a union but can be required to
pay a union fee to cover collective bargaining costs
• These fees are known as agency fees
• All University at Albany professors belong to an agency shop, i.e.
dues are subtracted from their paychecks, even if they are not
members of the union.
Union Shop Agreement
An arrangement under which all workers except managers in an
organizational unit represented by a union have to become members
of that union within a certain period of time after being hired or lat
least pay the equivalent of union dues
Checkoff
• A system whereby an employer regularly deducts a portion of an
employee's wages to pay union dues or initiation fees.
• The checkoff system is very attractive to a union since the collection
of dues can be costly and time-consuming.
• It prescribes the manner in which dues are paid by deductions in
earnings rather than through individual checks sent directly to the
union.
• Unions are thereby assured of the regular receipt of their dues.
UNION TERMINOLOGY
Craft unions or guilds
Unions organized to represent the interests of members with
specialized craft skills, e.g. musicians, electricians, plumbers, etc.
Industrial unions
Unions that have traditionally represented semi-skilled or unskilled
workers in a particular industry, e.g. automotive, truck drivers, etc.
Union Representative – Union Steward – Shop Steward
• An employee of an organization or company who represents and defends the
interests of her/his fellow employees but who is also a labor union official.
• Rank and file members of the union hold this position voluntarily (usually through
democratic elections by fellow workers or sometimes by appointment of a higher
union body) while maintaining their role as an employee of the firm.
• As a result, the union steward becomes a significant link and conduit of information
between the union leadership and rank-and-file workers.
International Unions
• Federations of local unions, i.e. a parent for the local unions
• Lobbies for legislation on behalf of local unions
• Affected by economic pressures as well
• Examples:
Service Employees International Union – SEIU
Industrial Workers of the World – IWW
United Auto Workers – UAW
International Brotherhood of Electrical Workers - IBEW
Union Terminology
• Local Unions
Represent members in a craft or trade in a particular geography
• Bargaining Unit
Group of employees identified by the union and the employer
together as eligible to participate in a union election
• Union Authorization Card / Signature Card
A document indicating that an employee is interested in being
represented by a union
Six Characteristics of Labor Relations
Accepts capitalism and the capitalist economic structure
1. Business unionism
 Focus on improving worker well-being
 Focus is less on running the company
2. Unions structured by type of job
 AFL-CIO - minus break-aways
 SEIU, Teamsters, United Food and Commercial Workers, Unite Here (apparel &
hotel workers)
 Change to Win – Laborers, Carpenters & Farm workers
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Six Characteristics of Labor Relations in the U.S.
3. Focus on Collective Bargaining
Unions and management negotiate with each other to develop work rules under
which union members will work for a stipulated period or time (usually 2-3 years)
Work rules include pay, work breaks, meal periods, vacation, work assignments,
grievance procedures
4. Labor Contracts
Spells out the conditions of employment and work rules that affect employee in
the unit represented by the union.
Six Characteristics of Labor Relations in the U.S.
5. The adversarial nature of Labor-Management relations in the US and shrinking union
membership
- Disagreements over the distribution of a firm’s profits (Economic justice)
Union membership – Private sector
1945 = 35%
2010 = 12%
Factors for decline
Automation, globalism, public legal problems of union leaders, smarter workforce,
smarter management, generational issuesinabilities of unions to impact economic
realities, assumption by government of typical union issues, e.g. low wages, safety,
layoffs, etc.
Six Characteristics of Labor Relations in the U.S.
6. Growth of Unions in the Public Sector
Public Sector union = 37%
Public sector have less bargaining power, because
1. Decision–making in government is divided among the legislative,
executive, and judicial branches
2. Employees right to strike is severely restricted
3. Funding comes from taxpayers, not from corporate profits
Two Basic Labor Relations Strategies
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Union Acceptance – Management chooses to accept the
union as its employee's legitimate representative and
accepts collective bargaining as an appropriate mechanism
for establishing workplace rules.
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Union Avoidance – Manages wishes to prevent its
employees from joining a union, either by removing the
incentive to unionize or by using hardball tactics
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