U.S. Labor Law

1. U.S. Labor Law Tuesday, June 19 Beijing 2007

2. National Labor Relations Act (NLRA): Section 7 Rights • To organize and select representative (or not) • To collectively bargain through representative • To engage in concerted activity for mutual aid and protection

3. Labor Law Enforcement Mechanisms • NLRB: Five-member administrative board • Oversees representation matters • Hears and decides unfair labor practice claims • Arbitration: Contract violations (grievances)

4. Employer Unfair Labor Practices • 8(a)(1): Interference with Section 7 rights • 8(a)(2): Employer domination of union • 8(a)(3): Discriminatory treatment for employee support of union • 8(a)(5) Failure to bargain in good faith

5. Two Ways to Obtain Union Representation • Voluntary recognition by employer following demand by union with majority support • Affirmative secret ballot vote by a majority of employees in a unit sought to be represented

6. Enterprise Level Representation • Unlike some countries, unions in the U.S. do not bargain on a regional or national basis • Instead, the NLRA authorizes representation of similarly situated employees at a plant level

7. Bernhard-Altmann • At the time that the parties in this case executed a collective bargaining agreement, a majority of employees in the unit wanted union representation • Why was this found to be insufficient by the Supreme Court to justify the employer’s voluntary recognition of the union?

8. U.S. Union Representation • The NLRA authorizes selection of an exclusive union representative only with majority support, preferably by an election • Most countries do not have elections, but simply require employers to bargain with unions with some support • Which approach is preferable?

9. Asserted Problems of U.S. Representational system • Employers lawfully may campaign against union representation so long as no threats or coercion • But, studies show that 1 in 4 active union supporters are fired in organizing campaigns • Slow and weak NLRB remedies

10. NLRA Remedies • Reinstatement • Back pay • But no punitive or compensatory damages

11. Decline in Union Density • 1954 34.7% • 1970: 24.7% • 1990: 16.1% • 2006: 12.0% Total: 16 million members

12. Question • The percentage of unionized workers has steadily declined over the past 30 years. What factors likely are contributing to this decline? • Is the decline likely to continue? • How does the decline affect the legal contours of nonunion employment?

13. Causes of union decline • Global product and labor market competition • Changing workforce composition • Increase in contingent workers • Employer opposition/NLRA weaknesses

14. Growth of Statutory Employment Law • Anti-Discrimination statutes • Occupational Safety & Health Act OSHA) • Fair Labor Standards Act (FLSA) • Family & Medical Leave Act (FMLA) • Employee Retirement & Income Security Act (ERISA)

15. Employee Free Choice Act • The House of Representatives has passed this bill which would require employers to bargain with a union that demonstrates majority support through signed authorization cards (without an election) • Would this be a good or bad idea?

16. Consultative Bodies • The NLRA bans employer support of non-union organizations that deal with terms and conditions of employment • The NLRB has interpreted 8(a)(2) to prohibit an employer’s establishment of consultative committees that discuss employment terms • Is this good or bad policy?

17. Duty to Bargain • Both employers and unions have a duty to bargain in good faith concerning terms and conditions of employment • Must bargain: Er-Ee relation issues • Need not bargain: Er business issues • An employer that unilaterally changes employment terms without bargaining commits an ULP

18. Protected Concerted Activity • Strikes • Peaceful picketing • Concerted refusal to perform dangerous work (even if no union) • Discussion of work issues on a blog so long as employer product not defamed

19. Employer Responses to Concerted Acts • Employer cannot fire employees for engaging in concerted acts • But, employer can hire temporary or permanent replacement workers • When strike over, employer need not bump permanent replacements • Strikers have right to reinstatement only as positions open up

20. Policy Question • What is the likely impact of the permanent replacement rule on employment policy? • Is there a better way to balance the competing interests of labor and management in this context?

21. Labor Law – Job security • Substantive standard in collective bargaining agreements: no discharge or discipline without “just cause.” • Notion of progressive discipline • Notion of industrial due process • Procedural process: • Grievance procedure • Binding arbitration

22. Just Cause • Conduct that interferes with management’s legitimate expectations. • May encompass: • Misconduct • Poor performance • Lack of work • Violation of reasonable work rules

23. Arbitration: Pro’s • Fair standard • Parties can define “just cause” • Fast and informal • Low transaction costs

24. Arbitration: Con’s • Less due process • Arbitrator tendency to “split the baby”

25. German Labor Law Friday, June 22 Beijing 2007

26. EU Role • Collective Bargaining: Not included within area of EU competence • Consultation: EU may legislate in this arena subject to qualified voting approval

27. German Sources of Law • Constitution: Protects “right to form associations to safeguard and improve working and economic conditions” • Statute: Collective Bargaining Agreements Law of 1969 • Enforcement: Through labor courts

28. Union Density • 20% of workforce are union members • 43% of workforce covered by collective bargaining agreements • Majority of employees subject to substantive terms of agreements via extension

29. Two-tiered System • Collective bargaining generally takes place on a regional basis among industries through union and employer associations • Consultation through works councils occurs at the enterprise and/or plant level

30. Union Representation Rights • If one worker in plant is a union member, the employer is obligated to recognize that union as the representative of all employees • If more than one union has membership, DGB confederation mediates representation status

31. Policy Questions • What are the likely policy implications of this rule? • What are the pros and cons of this rule as compared to the U.S. approach?

32. Contract Types • Framework Agreements: Ongoing agreement covering non wage terms such as hours, vacation, safety, and termination • Wage Agreements: Time-specific agreement covering wage and salary adjustments

33. Contract Application • Contracts technically fix terms of employment only for union members • But employers generally apply contract terms to all employees

34. Contract Extension • Government may extend CBA terms to others if: • Social partners consent • At least 50% of employees are within the occupational or geographic scope of agreement • Deemed to be in the public interest • May also extend CBAs in construction industry even without consent

35. Policy Questions • What are the likely policy implications of this rule? • What are the pros and cons of this rule as compared to the U.S. approach?

36. Concerted Activity • Statutory silence on topic • Courts interpret constitution to protect right to strike in support of collective bargaining position • Employer may engage in defensive lockout, but not offensive lockout

37. Lockouts • Offensive lockout: Apply pressure on union in support of bargaining position by denying temporary access to work • Defensive lockout: Apply pressure on union engaged in a partial strike by denying work access to some additional non-strikers

38. Additional Limitations on Employers • Defensive lockouts must be proportional to size of strike (e.g., if strike < 25%, then lockout may not exceed total of 25% out of work) • Employer may not hire either permanent or temporary replacement workers during a strike

39. Policy Questions • Why ban offensive lockouts? Aren’t they = to a strike? • How do the German rules of conflict likely impact the outcome of collective bargaining?

40. Works Councils • Elected representative bodies at plant or enterprise level with consultative authority • Employees have right to establish at any workplace with 5 or more employees • No right to strike

41. Right to Information and Consultation • Employer must consult with respect to anticipated workforce expansion, contraction, or reorganization • Works council has right to information and comment on • Employee termination • Employer compliance with legal rules

42. Information and Veto Right • With respect to the hiring, deployment, and transfer of employees • Employer may challenge an works council veto before a labor court

43. Codetermination Rights • Employer may not alter work hours, vacation policies, or safety rules without consent of works council • Employer must negotiate a social plan with works council to address adverse collective actions such as plant closings and mass layoffs • Impasses subject to binding arbitration

44. Relationship to Collective Agreement • Compensation matters governed by agreement, not works council • Works council can enhance employee rights but cannot undo more protective agreement provisions absent agreement waiver • But works council has right to codetermination unless agreement leaves no room for discretion

45. Two-tiered System • Collective bargaining generally takes place on a regional basis among industries through union and employer associations • Consultation through works councils occurs at the enterprise and/or plant level

46. Policy Questions • What are the advantages of this two-tiered system? The disadvantages? • Does the existence of works councils bolster or undercut the realm of collective bargaining? • Could a works council system be imported to the U.S.?

47. European Union Directives • European Works Council Directive: Requires elected works councils for large multi-national businesses • General Framework Directive: Requires employers with more than 50 employees to establish mechanisms for employee consultation

48. Chinese Trade Union Law Monday, June 25 Beijing 2007

49. PRC Trade Union Law • Article 3: All workers have the right to participate in and form trade union organizations • Article 10: A basic trade union committee shall be set up in in an enterprise having 25 or more union members

50. Collective Contracts • Labor Law Art. 33: Union may negotiate collective contract with enterprise • Art. 35: Collective contract is binding on enterprise and workforce; terms may not be reduced by individual contracts