Labor Relations and Collective Bargaining

1. Labor Relations and Collective Bargaining 13

2. Why Do Workers Join Unions? • Three reasons why workers join unions (Figure 13.2): • dissatisfaction with the work environment • desire to have more influence in affecting change in work environment • belief that unions can bring benefits to workers

3. Labor Law • National Labor Relations Act (NLRA) of 1935—formally recognized workers' rights to organize and bargain collectively with representatives of their own choosing. • management cannot: • interfere with employee representation and collective bargaining rights • dominate or interfere with the affairs of unions • discriminate in regard to any employment condition against workers who engage in union activity or who file unfair labor practice charges • refuse to bargain in good faith with employee representatives • established the National Labor Relations Board (NLRB) • prevents and corrects unfair labor practices • administers certification and decertification elections • hears complaints for unfair labor practices (ULPs)

4. Labor Law • Taft-Hartley Act—amended the NLRA by describing what constituted unfair labor practices by unions. • restricting the usage of the strike • restricting unions from interfering with workers' right to organize • Unions cannot discriminate against non-striking workers • States can enact “Right-to-Work legislation (22 states have) • established Federal Mediation and Conciliation Service • Landrum-Griffin Act • Provided employees with a “Bill of Rights.” • Required unions to file annual financial statements with Department of Labor • Railway Labor Act of 1929 • applies to transportation industry (rail, airlines, etc) • Civil Service Reform Act (CSRA) of 1978 • applicable only to federal employees • prohibits wage negotiations and strikes

5. Forming a Union • Union membership is solicited by the employees or the union might conduct an organizing drive. • At least 30% of employees must sign a authorization card that states a certain union should be their representative when negotiating with management. • The NLRB is then petitioned to conduct an election. • The NLRB sets an election date. • By secret ballot, representative certification election is held, which requires a simply majority of eligible employees to vote “yes”.

6. Forming a Union • Organize workers through campaigns. • bottom-up campaign initiated by workers • top-down initiated by union • organization can campaign against union • Many unions now use the internet to organize • NRLB regulates campaigns. • NLRB goal is to maintain environment in which workers can make uncoerced decision regarding election unions can go worker-to-worker or community involvement • organization can hold “captive audience” meetings • unions believe organizations violate law in anti-campaigns • few penalties for violating law • unions can get neutrality agreements

7. Effects of Unions in The United States • Wage differentials: 22% as of 2004. • median weekly earnings (2004): $781 (union) vs. $612 • Those paid the least benefit the most from unions. • Union workers have more satisfaction with pay but more dissatisfaction with supervision, co-workers and job content. • Recent evidence-Unionized firms had more gains from QWL programs than non-union firms. • Evidence is mixed on the effects of unions on productivity. • labor-management relations are critical • unionization negatively affects accounting profits • low % of union workers- “High Performance Work System” characteristic • HRM decisions more constrained, e.g., termination for cause only

8. Conducting Labor Contract Negotiations:Stages of Collective Bargaining • Preparation – gathering facts such as industry wage rates and prior bargaining information. • Meetings with interested parties – often starts by dealing with easy issues first to build a sense of trust and accomplishment before more difficult issues are tackled. • Resolving deadlocks – done to avoid strikes and lockouts. In extreme cases a mediator (a neutral third party who suggests compromises) is brought in to keep the process moving forward.

9. Collective Bargaining • Collective bargaining—occurs when representatives of a labor union meet with management representatives to determine employees' wages and benefits, to create or revise work rules, and the resolve disputes or violations of the labor contract. • major issues in collective bargaining • wage-related issues • supplementary economic benefits • institutional issues • administrative issues

10. Types of Collective Bargaining • Most common types of collective bargaining: • distributive bargaining—most common type of bargaining and involves zero-sum negotiation—one side wins and the other side loses • integrative bargaining—similar to a problem-solving session in which both sides are trying to reach a mutually beneficial alternative • concessionary bargaining—the labor union gives back to management some of what it has gained in previous bargaining usually prompted by labor leaders who recognize the need to assist employers in reducing operating costs in order to prevent layoffs and plant closings

11. Desires, Expectations, and Tolerance LimitsThat Determine the Bargaining Zone Union’s desired solution Employer’s tolerance limit Union’s expectation Bargaining Zone Employer’s expectation Union’s tolerance limit Employer’s desired solution Source: R. Stagner and H. Rosen, Psychology of Union-Management Relations. Belmont, CA: Wadsworth, 1965, p. 96. Reprinted by permission of the publisher, Brooks/Cole Publishing Company, Monterey, California.

12. Union’s Economic Powerin Collective Bargaining • Union's base of power: • striking—a refusal on the part of employees to perform their jobs • picketing—used by employees on strike to advertise their dispute with management and to discourage others from entering or leaving the premises • boycotting—involves refusing to patronize an employer by refusing to buy or use the employer's products or services • primary boycott—refusal of the union to allow members to patronize a business where there is a labor dispute • secondary boycott—occurs when a union induces third parties such as suppliers and customers to refrain from any business dealings with an employer with whom it has a dispute

13. Employer’s Power in Collective Bargaining • Employer's base of power: • ability to determine how to use capital within the organization as long as these decisions are made in accordance with the law • close down the company, the plant, or certain operations within the plant • transfer operations to another location • subcontract out certain jobs • ability to more easily replace striking employees with replacements • NLRB v. Mackey Radio & Telegraph (1938) permitted the permanent replacement of economic strikers • may effectively operate with a substantially reduced staff during a strike due to technology advances thus decreasing the effectiveness of the strike • exercise lockout—shutting down of operations, usually in anticipation of a strike

14. Administration of Labor Contract • Grievance procedure. • how the grievance will be initiated, • number of steps in the process, • who will represent each party, and • number of working days that grievance will take. • Resolution of Grievances. • most are expressed (orally or written) to supervisor. • most are settled early. • next step is taken to higher level (company and union representatives). • Arbitration process. • the Decision to Arbitrate. • selection of the Arbitrator. • the Arbitration Process. • Basis for Arbitrator’s Decision and Award.

15. U.S. Trends in Labor Relations • Union memberships. • change to Win Coalition (Teamsters, SEIU)-focus on lowest paid workers • more limited political power at the state and federal levels • declining memberships in private sector (8% in 2004) • new emphasize on keeping jobs rather than increasing wages or benefits due to increased downsizing by employers • more emphasis on security and retirement issues • new support among women, minorities, and immigrants • few recent and successful organizing campaigns Recent NLRB interpretations and court decisions have decreased ability of unions to organize. • Public-sector union membership. • increase in union involvement (36% in 2004)

16. U.S. Trends in Labor Relations • Future of unions unclear. • Change to Win Coalition to be more focused on organizing • trend in court rulings and NLRB opinions not favorable to unions • public-sector membership up • Restraining provisions. • mergers and acquisitions, downsizing, and deregulation threaten job security; unions have begun to deal with this threat through retraining provisions in collective bargaining agreements • Reinventing unionism. • need to recapture that in a global village environment • unions were supposed to be for social uplift • Employee benefits. • new emphasis on health care and family-oriented benefits in order to attract more women union members

17. International Issues • U.S. labor relations system versus systems in most other countries: • in the U.S., unions have exclusive representation; in Europe, more than one union, often with religious and political affiliations, may represent the same workers • in the U.S., the government plays a passive role in labor relations and dispute resolution, characterized by regulating the process, not the outcomes; in Western and Eastern European countries, Australia, Canada, and Latin America, the role of the government is much more active • in the U.S., there is generally an adversarial relationship between the union and management; in most other countries, the relationship is much more conciliatory and cooperative

18. International Issues • U.S. labor relations system versus systems in most other countries: • in the U.S., collective bargaining is more decentralized; unions in Europe, Japan, and Canada rely primarily on macro-negotiation by industry • in the U.S., unions place a high emphasis on economic issues such as wages, benefits, and job security; in other countries, the unions emphasize political issues to a greater degree • Global Collective bargaining, productivity and wages • 2003 World Bank study- Higher average wages for union members