Chapter 12

1. Chapter 12 Understanding Unions & Their Impact On HRM

2. Gaining Competitive Advantage • Early 1980s American auto industry was losing market share to the Japanese • Auto inventories grew and this led to 300,000 auto workers being laid off in 1982 • Many plants closed due to the “Japanese invasion” • 1985 Saturn Corporation was created

3. Saturn Corporation • 1985 announced creation of Saturn Corporation to create high quality affordable autos to recapture market share • Smith realized strategies needed to change (collaborative relationship between labor unions and management) • Union-management team eventually formed a management strategy responds to both ee and management needs (teamwork and open-communication) • Participate in decision making matters affecting them

4. Saturn Corporation • Working agreement between Saturn and UAW: • Recognize needs of everyone in organization • Allow union reps to participate fully in decision making • Use a consensus decision-making process • Place authority and decision making with the work units when appropriate • Permit free flow of information throughout the organization

5. Saturn Corporation • Team concept and union-management partnership has permitted union team members an unparalleled voice in job design ( greater freedom than what other unions have) • J.D. Power—customers have overwhelmingly embraced Saturn cars as high-value, technology advanced products

6. Linking Unions To Competitive Advantage • Employers are insensitive to worker needs and when workers are powerless to redefine their working conditions to make work more fulfilling, they seek means to represent their interests more forcefully (collective bargaining) • Unions are labor organizations “of any kind…in which ees participate and which exist for the purpose, in whole or part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work

7. Linking Unions To Competitive Advantage • Employers can contain their HR-related costs by maintaining a union-free environment (higher salaries and benefits) • Unions affect productivity in a negative way due to restrictive work rules which hinder productivity and profitability (some evidence suggests that some unionized firms are more productive than non-unionized firms) • Bottom line: ability of two parties, labor and management to work well together (higher firm productivity is the result of a cooperative relationship between management and unions) • But even if they are more productive—doesn’t offset HR-related costs

8. The Structure of Unions • Local union is where workers and their reps interact most frequently (focus of everyday union-management relations) • Local union plays two roles: • Identify and negotiate plant (local) issues in national collective bargaining agreements (need to know members views about all aspect of working conditions to adequately represent them in negotiations) • Local unions administer collective bargaining agreements or contracts (overtime pay and seniority)

9. The Structure of Unions • National unions represent workers throughout the country in a particular craft or industry (international unions—U.S. and Canada • Negotiate contracts with large employers (auto and commercial aviation industries) and organize new local unions • Local unions must be chartered from parent national union (assistance with collective bargaining and grievance administration) • Contain behavior of locals (preventing strikes or contract ratification without prior approval of national) • Local dues for services—amount is based on size

10. The Structure of Unions • AFL-CIO—almost all large national unions join the American Federation of Labor and Congress of Industrial Organizations • Membership is voluntary (United Electrical Workers and the National Education Association are not affiliated • By joining you don’t lose autonomy • Promotes cooperation among national unions in order to pursue organized labor’s common objectives • Represent organized labor in political forums—lobbyists for legislative bodies and supporting pro-union candidates for elected public office

11. The Structure of Unions • BLA estimates that approximately 16.5 million workers, or 14% of employed wage and salary workers, were represented by unions in 1999 (1960 the figure was 31.4%) • Declined…represent workers in the following industries- government, manufacturing, and transportation/public utilities • Large industrial corporations are unionized (UAW—United Auto Workers—represent the Big 3—GM, Ford, and Daimler-Chrysler. United Steel Workers and 12 industrial and craft unions--GE

12. The Structure of Unions • Why has union membership declined? • Shift in employment away from manufacturing, a traditional union stronghold, to service occupations (unions have little appeal here) • More importantly—employers generally oppose unions and have taken an aggressive stance against them • “American Plan” rugged individualism as a traditional American value as opposed to “foreign” and “subversive” principles espoused by unions • Employers had “company unions”

13. The Structure of Unions • Why has union membership declined? • Most important—employers find permanent replacements for striking ees—diminishes the impact of a union’s powerful tool • 1938 law permits employers to hire permanent replacements for striking workers if striking because of economic issues such as pay, benefits, or better working conditions (striking workers can have their job back only when replacements relinquished their work for some reason—i.e. retirement • 1981—President Reagan replaced striking Air Traffic Controllers

14. Labor Law • Yellow-dog contracts—now illegal, these contracts stipulate that workers will not organize, support or join a union if hired by the company (UAW tried to organize workers who had signed yellow-dog contracts • Railway Labor Act—1926 new era of government regulation of union-management relations, greater acceptance of unionism and collective bargaining---their right to choose a bargaining agent—railroads had to bargain with ee’s reps and established federal machinery to resolve labor disputes

15. Labor Law • Norris-LaGuardia Act • 1932 sharply curtailed the courts’ involvement in labor disputes by limiting judges’ powers to issue injunctions that restrained worker job actions (only way granted is if employers could show “substantial and irreparable injury” to their property (declared yellow-dog contracts invalid) • National Labor Relations Act (Wagner Act) • Passed in 1935 gave workers in most industries the right to form unions and bargain collectively without being subject to coercion by their employers

16. Labor Law • What practices would be considered coercive or unfair? • Interfering with the workers’ right to self-organization • Discriminating against ees for engaging in union activities • Refusing to bargain with ee representatives (Refer to Exhibit 12-1 page 380) Also established the certification election process to determine whether a majority of workers in a company wanted union representation and it created the National Labor Relations Board (NLRB)

17. Labor Law • 1947 NLRA was amended by the Labor-Management Relations Act (Taft-Hartley Act) • Americans were disenchanted with strikes after World War II • Congress wanted to impose restraints on organized labor • Taft-Hartley Act tried to restore a balance of power between employers and unions • Decertification election—union members could rid themselves of unions

18. Labor Law • 1947 NLRA was amended by the Labor-Management Relations Act (Taft-Hartley Act) • Americans were disenchanted with strikes after World War II • Congress wanted to impose restraints on organized labor • Taft-Hartley Act tried to restore a balance of power between employers and unions • Decertification election—union members could rid themselves of unions

19. Labor Law • Specified a set of unfair union labor practices: • Coercing ees who are trying to exercise their collective bargaining rights • Pressuring employers to discriminate an ee or applicant because he or she is not a union member • Refusing to bargain in good faith with an employer • Forcing employers to pay for unneeded services, such as hiring more ees Taft-Hartley Act gave the president of the U.S. the right to intervene in national emergency strikes (i.e. strikes that affect an entire industry in a way that imperils national health or safety) Prohibit workers from striking for 80 days so they can resolve their differences through collective bargaining

20. Labor Law • Specified a set of unfair union labor practices: • Coercing ees who are trying to exercise their collective bargaining rights • Pressuring employers to discriminate an ee or applicant because he or she is not a union member • Refusing to bargain in good faith with an employer • Forcing employers to pay for unneeded services, such as hiring more ees Taft-Hartley Act gave the president of the U.S. the right to intervene in national emergency strikes (i.e. strikes that affect an entire industry in a way that imperils national health or safety) Prohibit workers from striking for 80 days so they can resolve their differences through collective bargaining

21. Labor Law • Labor-Management Reporting & Disclosure Act (Landrum-Griffin Act) • Passed in 1959 by Congress—this act regulated the internal affairs of unions • Bill of Rights: • Rules for nominating candidates for union office • Holding elections • Disciplining members • Submit reports of all financial expenditures to discourage officers from using union funds for personal matters

22. Becoming Unionized • Why workers join unions? • Higher salaries • Better benefits • Ability to speak one’s mind without fear of reprisal • Better job security • Protection against unfair treatment • Gaining a sense of identity/unity

23. Becoming Unionized • Two most important reasons for unionization? • Job Dissatisfaction—workers are dissatisfied with bread-and-butter issues such as pay, job security, and supervisory practices, they are likely to unionize. In addition, to sense of control over one’s work and working conditions • Union Instrumentality—seek union representation when they perceive that acting as individuals, they are powerless to change the conditions in the workplace that are responsible for the job dissatisfaction and a large enough coalition of like-minded coworkers could improve conditions by taking collective actions Union instrumentality—perceived ability of the union to provide important benefits to the worker

24. How Do Workers Become Unionized? • Petition Phase • Workers express initial interest in union representation by signing authorization cards that empower a union to represent them in the collective bargaining with the employer • Card must state that the signer is authorizing bargaining rights to the union, and not simply expressing an interest in holding a certification election (30% must sign authorization cards for there to be sufficient “showing of interest” to trigger NLRB involvement in the certification process—but a union has little chance of winning an elections with less than 50%

25. How Do Workers Become Unionized? • Election Phase • Three steps: • NLRB conducts representation hearings to determine appropriate bargaining unit (bargaining unit consists of those jobs or positions in which two or more ees share common employment interests and working conditions) NLRB’s discretion to approve bargaining units is not unlimited. For example, professional ees cannot be included in the same bargaining unit with nonprofessional ees unless a majority of these professionals vote to be included in the mixed unit

26. How Do Workers Become Unionized • Campaigning by both the union and the employer (Unions are at a disadvantage here because they have less access to workers in the bargaining unit than employers do) • Employers must provide the union with names, addresses, and phone numbers of their ees within seven days after the parties consent to an election • Employers cannot threaten ees for pro-union activities or give ees false or misleading information (see Exhibit 12-2 page 384) • Third step is the election itself—held on site at the company—NLRB requests that the union and employer supply election observers to ensure voters are members of the sanctioned bargaining unit

27. How Do Workers Become Unionized? • Certification Phase • When the election is completed, the NLRB certifies the results (simple majority—as long as their was no misconduct) • Misconduct they can issue a bargaining order—accept collective bargaining with the union even if the employer won the election

28. The Collective Bargaining Agreement • Collective Bargaining is a system for governing relations between representatives of employers and ees through bilateral negotiations to reach mutual agreement about employment terms (called the collective bargaining agreement) • Patterned bargaining—auto industry– UAW selects one of the Big 3 as a target for negotiations • Preparation for collective bargaining-gather information about contract settlements that are relevant to the bargaining—estimate costs of their initial offers at the bargaining table (See Exhibit 12-3) page 386 • Look at language in agreements is their a problem with too many grievances filed?—need to clarify language

29. The Collective Bargaining Agreement • Establishing a bargaining agenda: • Illegal bargaining items are matters about which bargaining is not permitted by law (union security arrangements (e.g., closed and open shops) cannot be negotiated in right-to-work states) • Mandatory bargaining items are issues that must be negotiated if either party brings thee matters to the table • Voluntary or permissive bargaining items become part of the negotiation only if both parties agree to discuss them (See Exhibit 12-4) page 387

30. The Collective Bargaining Agreement • Choosing a bargaining strategy: • What are each parties priorities? • Employer may wish to bargain health care benefits and staffing rules that mandate crew size. If employer gives more weight to health benefits then it may drop demands for changes in staffing • Each party estimates three bargaining objectives for each item negotiated • Realistic bargaining objective---value of the final settlement on a particular bargaining issue • Optimistic bargaining objective—most favorable settlement level perceived by each party • Pessimistic bargaining objective—least favorable settlement each party is willing to accept (See Exhibit 12-3 page 388)

31. The Collective Bargaining Agreement • Good faith bargaining—obligates both management and labor to meet at reasonable times and confer in good faith with respect to wages, hours, and other terms and conditions of employment (i.e., surface bargaining—unacceptable proposals or offering no alternative counterproposal) • Cooperative bargaining—work together to find solutions

32. The Collective Bargaining Agreement • Grievance system—a system that provides due process for claims of collective bargaining agreement violations • Common grievance issues • Discipline and discharge • Work assignments • Employment decisions • Production standards • Working conditions • Imposition of new rules

33. The Collective Bargaining Agreement • Grievances play two important roles: • Forum in which disagreements concerning violations of contract rights can be adjudicated • Influence the way workers view organized labor—workers state the grievance handling is the most important union activity

34. The Collective Bargaining Agreement • How Grievance Systems Operate: • Informal stage—union steward, the complainant, and the complainant’s immediate supervisor try to resolve the matter before it is written up and becomes an official grievance • Written up • Bilateral—higher level reps from union and management • Arbitration—calls for a neutral third party to settle matters that cannot be resolved by bilateral discussion between union and management reps (Discuss Figure 12-4 page 391) Grieving ee feels union did not represent them well go to the courts but they typically rule in favor of the union (win 90% of the time)