Labor Relations and Collective Bargaining Eighth Edition

1. Michael R. Carrell & Christina Heavrin Labor Relations and Collective Bargaining Eighth Edition www.prenhall.com/carrell PART I: Labor Relations Overview CHAPTER 2 Challenges and Opportunities © 2007 Prentice Hall Inc. All rights reserved

2. Chapter Outline Workplace Changes The Challenges The Opportunities Employee Teams Why Unionize? Unions in Professional Sports Workforce Diversity

3. Labor News Unions Seek to Organize Wal-Mart Stores 2004: Canadian Wal-Mart store 1st to unionize 2004: Kroger & United Food & Commercial Workers Union sign contract for 30%-40% higher wages & benefits than Wal-Mart 2005: Wal-Mart Closes Canadian store and fires “whistle-blower” accountant & other “union project” employees

4. Workplace Changes Organized Labor “Market Share”: 30 Year Slide Peaked in 1945 at 46% and 1954 at 35% of workers Today, 12 % of non-farm workforce is unionized The highest percentage of union membership is among government, education, and protective service employees Transportation, communication, public utilities, construction, and manufacturing have the highest percentage in private industry Big declines in union membership in: Production jobs in metropolitan areas Construction industry Current organizing focuses on health care, custodial, and hotel and restaurant workers

6. Why the Decline in Union Membership? • 2005 Stanford Univ. Study Found 6 Key Reasons: • 1. Decline is worldwide; 17 of 20 major nations • 2. Attrition of existing union members • 3. Reduced interest from non-union workers • 4. Increased worker-friendly management policies and efforts to fight organizational efforts • 5. AFL-CIO focus on politics, not organizing • 6. Global competition, U.S. employers sending jobs overseas

8. Workplace Changes (cont.) Historical perspective Agricultural revolution New farming techniques helped feed booming population Industrial revolution Vast leap forward in productivity Movement of workers from farms to cities Technology and machines became important additions to labor

9. Historical perspective (cont.) Scientific Management In the U.S., new work environments created to accommodate workers with limited industrial experience and limited knowledge of English Frederick Taylor and Henry Ford Principles for work organization Fractionalization of work “One best way” theory Dividing the workforce Protecting the process from the worker Robber barons Built railroads, produced steel, and mined minerals Workplace Changes (cont.)

10. Workplace Changes (cont.) Decline and rebirth of manufacturing U.S. at its peak in the 1950s as a mass producer of goods for global consumer market Consequence of being unscathed by WWII Continued to rely on pre-war technology Japan, by the 1980s, challenged the U.S. with automation and “just in time” inventory Caused decrease in growth rate of U.S. economy U.S. industry rebounded in the 1990s “Lean and mean” management and employee teams In 2004 the U.S. had the lowest number of manufacturing jobs in 53 years, and had shifted from a goods producing economy to a service/ knowledge economy

12. Globalization • U.S. economic expansion since 1990 created a new order • UPS, FedEx improved international trade • Technology lowered costs of international communications: voice, data, financial investment • White-collar jobs followed blue-collar jobs overseas through outsourcing

13. Foreign-owned Southern Auto Plants Plants have remained non-union despite organizing efforts of United Automobile Workers (UAW) The Detroit “Big 3” lost over 1 million UAW jobs from 1971-2001 The new foreign-owned auto plants include Toyota (Kentucky, Indiana, West Virginia), Honda (Ohio), BMW (South Carolina), Nissan (Tennessee), and the Daimler Chrysler Mercedes-Benz plant in Alabama In 2000, the UAW gave up on its last attempt to organize a Foreign-owned U.S. auto plant; the new German-owned Mercedes-Benz plant in Alabama

14. The Challenges The new economy Unions have not been successful organizing workers of the new high technology economy Many new economy employers classify their workers as temporary or independent contractors Unions and technology Unions’ opposition to the introduction of new technology has lessened Unions now use high technology themselves Union organizing campaigns incorporate new technologies

15. The Opportunities Strategic industry focus for new members: building services, hospitals, long-term health care providers, express shipping and the leisure/hotel/lodging industry, janitors Andrew Stern: build 15-20 large unions each focused on one industry (similar to early craft union movement focus) Continue public sector growth: teachers, federal, state, county, municipal employees Professional workers Immigrant workers

16. Labor-Management Cooperation 2005-2010 A.K. Steel & Steelworkers: “New Era Agreement”: 1. Consolidation of 100 job classifications into 5 2. Elimination of minimum number of workers 3. Health-care cost sharing 4. Profit-sharing plan 5. Defined pension plan NUMMI auto plant in California Beiersdorf, Inc., Sewing Plant German owned plant in Ohio that makes medical aids Joint efforts of plant management and Union of Needletrades Industrial and Textile Employees (UNITE) avoided closing the plant New labor contract that provided $3 million in cost savings Toyota Sewing System implemented to increase productivity Landlord and vendors agreed to price cuts

17. Labor-Management Cooperation (cont.) Quality of Working Life (QWL) Programs designed and implemented to increase employees’ job satisfaction and productivity Attempt to establish practical relationships outside traditional union-management means Altered conduct of labor relations Created direct channels of communication between workers and management Intended to reduce conflict and promote trust

18. Quality Circles (QC) Based on “people building” rather than “people using” 5 to 10 volunteers identify and analyze productivity problems Develop solutions Management must grant final approval of proposed solutions Unions in U.S. have adopted a neutral attitude toward QC concept Recognize that greater efficiency may mean greater security Aware that employees do not directly share the cost savings Labor-Management Cooperation (cont.)

19. Employee Teams Groups used to enhance synergy Group production greater than the sum of individuals’ productivity Enhanced productivity occurs in 3 primary areas Decision making Problem solving Creativity 2004 study of fortune 1000 companies indicated about 70% utilize employee teams; examples include Ford, Proctor & Gamble, Federal Express, Levi Strauss, and Westinghouse.

20. Employee Teams (cont.) Self-Managed 5 to 15 workers learn all production tasks, rotate among jobs, and do managerial duties such as scheduling work and ordering materials. Problem Solving 5 to 12 volunteers meet a few hours/week to improve quality, efficiency, and work environment. Special Project 10 to 15 workers from different functional areas de- sign and introduce work re- forms or new technology. In union shops, labor and management collaborate at all levels. Types of Teams

21. Employee Teams (cont.) Major reasons for using self-directed teams: Improved quality, productivity, and service Greater flexibility Reduced operating costs Faster response to technological change Fewer job classifications Ability to attract and retain good workers Union response to teams has varied UAW at Ford Motor Company Teams made the facility “a much better place to work” United Transportation Union at Union Pacific Members would not participate in quality improvement teams

22. National Labor Relations Board (NLRB) and the courts strictly interpreted Section 8(a)(2) of the Wagner Act Electromation - company illegally created and dominated a labor organization DuPont - company ordered to dismantle committees Teamwork for Employees and Managers (TEAM) Act If adopted, would have allowed employer and employees to participate on matters of mutual interest Crown Cork & Seal Committees were not “dealing” with management Employee Teams (cont.)

23. Why Unionize? Union v. non-union workers receive : Higherwages (24%), retirement benefits (249%), insurance (130%), paid leave (52%), and supplemental pay (76%). Additionally: grievance protection, “just cause” discipline standards, seniority system Reasons to vote for union representation Dissatisfaction with job and employment conditions Instrumentality of union in improving conditions Promotion of social advances for all workers Most important factors affecting the health of the American labor movement Collective bargaining rights Leadership in labor movement Union member solidarity Action of NLRB

24. Active participation in the union based on: Pro-union attitudes in general Belief that union is instrumental in improving economic well-being of workers “Strength in numbers” Why Unionize? (cont.)

26. “Soft Issues” that Lead Employees to Unionize Hopelessness Lack of control Job insecurity Recognition Double standards Broken promises Protection from humiliation Representation Attractiveness of unions

27. Why Workers Do not Need to Unionize- Public Laws Provide: • 1938 Fair Labor Standards Act: 40 hour week, minimum wage, overtime pay • 1963 Equal Pay Act: equal pay for women • 1964 Civil rights Act: prohibits discrimination in employment and compensation of employees based on race, color, religion, sex, or national origin • 1967 Age Discrimination in Employment Act: prohibits discrimination against workers over age 40 • 1990 Americans With Disabilities Act: prohibits discrimination against workers with certain impairments • 1993 Family Medical Leave Act: requires employers provide up to 12 weeks of unpaid family leave to employees in cases of childbirth, adoption, or care of a family member

28. Unions Today Union workers today are organized in: Craft unions Industrial unions Public sector unions Professional sports unions Transportation unions Agricultural unions Profile: MELISSA GILBERT, President, Screen Actors Guild (SAG) union in Hollywood with 98,000 members.

30. Unions in Professional Sports Baseball Management - National and American Leagues of Professional Baseball Clubs Union - Major League Baseball Players Association Tripartite grievance arbitration panel replaced commissioner in 1970 as last step in resolving disputes Final offer arbitration in salary disputes Free agency attained in 1976 Large disparities in salaries for different teams Strikes in 1972, 1981, and 1994 World Series canceled in 1994 2005 salary arbitration = $2.8 m for 89 players, but 66% of arbitrator awards were lower than owner’s last offer

31. 2005 Salary Comparison • U.S. Worker = $37,020 • Baseball Player = $2,800,000 • Football Player (NFL) = 2,300,000 • Basketball Player (NBA) = 4,900,000 • Hockey Player (NHL) = 1,800,000

32. Unions in Professional Sports (cont.) Football Management - National Football League Union - National Football League Players Association First sports union to receive charter from AFL-CIO Negotiations less turbulent than baseball Free agency attained in 1993 Owners got salary cap in return Brown v. Pro Football - 1996 Negotiations by League did not violate Sherman Antitrust Act Strike in 1982

33. Unions in Professional Sports (cont.) Basketball Management - National Basketball Association Union - National Basketball Players Association Players’ salaries highest of all professional sports Free agency began in 1981 ‘Hardship rule’ Union decertification defeated in 1995 Lockout in 1998 Profile: Oscar Robertson- 1976 suit against NBA ended uniform contract, reserve clause (Sherman Anti-trust Act)

34. Hockey Management - National Hockey League Union - National Hockey League Players Association Negotiations begin spontaneously as new issues arise Contractual grievances are arbitrated Players entitled to free agency 2005 Lockout by NHL owners cancelled entire season; first due to labor dispute in professional sports Unions in Professional Sports (cont.)

35. Workforce Diversity U.S. labor movement “competing agendas”: social change v. collective bargaining Minorities and women benefit economically from membership in unions However, U.S. unions have not always been sympathetic to groups who are increasingly represented in Workforce 2000 Today: union women earn 30% more than non-union, union African-American 31% more, union Latino 45% more

37. Workforce Diversity (cont.) African-Americans and unions Unionists protested waging the Civil War over slaves’ rights Freed slaves compelled to form their own unions National Colored Labor Union (NCLU) African-Americans used as strikebreakers In 1920s and 1930s, AFL and CIO unions typically refused membership to African-American workers Exclusionary policies of the AFL appeared to dominate after merger of AFL-CIO African-American workers formed their own unions Maryland Freedom Union (MFU) Mississippi Freedom Labor Union

38. African-Americans and unions (cont.) 1964 Civil Rights Act Resulted in higher levels of unionization among African-American workers African-Americans more unionized than workforce as a whole Unionized African-American workers earn 50% more income than nonunionized African-American workers Workforce Diversity (cont.)

39. Workforce Diversity (cont.) Women and unions Coalition of Labor Union Women (CLUW) - 1974 Promotes participation of women in union movement Women often had separate unions in post-Civil War period 1903 - Women’s National Trade Union League Platform to promote rights of women included: Equal pay for equal work Full citizenship for women Organization of all workers into unions Civil Rights Act of 1964 Outlaws discrimination in employment on basis of gender Women turned to unions to increase their power in workforce

40. Workforce Diversity (cont.) Immigrants and unions Skilled laborers were included in early unions Industrial revolution created competition with immigrant labor After WWI, unions supported legislation to restrict immigration After WWII, CIO unions more open to immigrants Today, immigrants primarily of Latin and Asian descent Opportunities exist for skilled immigrants Fewer opportunities for unskilled immigrants American employers and unions recognize that these workers are changing workplaces across the U.S. 1999-2001 King City, CA strike by Mexican immigrants against Basic Vegetable Products—new model of boycott, community support, stopped replacement workers