Employment Relations in the United States: Historical Context and Current Trends

1. CHAPTER 3 Employment Relations in the United States Harry C. Catz and Alexander J. S. Colvin

2. Lecture Outline • Key themes • Historical context • The role of the state • US employers • US unionism and revitalisation • Collective bargaining • The 2000s • Variations in employment practices • The Employee Free Choice Act • Conclusions

3. Key themes • High diversity of employment conditions in US system • Relatively low levels of unionisation compared to other DMEs • Significant differences between union and non-union sectors • Recent union revitalisation and changed strategies • Decentralisation of collective bargaining structures and strategy • Possible regulatory intervention

4. Historical context • Early unions were formed by and were exclusive to skilled craftsmen • The dominance of Taylorism or ‘scientific management’ undermined the rationale for mainstream workers to act collectively to negotiate pay and conditions • Further, early capitalists were politically powerful and vigorously opposed the union movement • Even the early successes of the craft unions were hampered by the organised opposition of employers and anti-union employment laws

5. Historical context • It was not until the Great Depression of the 1930s that unions first began to organise factory workers • Many circumstances led to successful organisation during the 1930s including the Wagner Act 1935 which gave employees the federally guaranteed right to organise and strike for the first time • In the 1940s and 1950s the unions continued to grow although federal legislation restricted and regulated them • Collective bargaining arrangements secured during the war continued in peacetime • The1960s and 1970s saw much of the public sector unionise

6. The role of the state • The US state influences industrial relations beyond its role as an employer in two main ways: • Direct regulation of terms and conditions of employment • Regulation of the manner in which organised labour and management relate to each other • Federal and state wage and hour laws provide for minimum levels of pay and overtime rates, although many workers are excluded from the operation of these laws • ‘Employment at will’ operates in the US – employers do not have to provide just cause for dismissal, reasonable notice or severance pay on dismissal of an employee

7. The role of the state • The National Labor Relations Act (also called the NLRA or Wagner Act) provides a structure of rules establishing employee rights with respect to collective action • Some of these rules include union certification (by secret ballot) and the requirement for certified unions and employers to bargain in good faith • There is debate over whether union certification procedures unfairly restrict the right of workers to organise into unions • Employment disputes in the US are resolved through the general court system or agreed arbitration procedures and not through specialist tribunals (results are high costs, long waiting times, greater variability in outcomes)

8. Employers and their organisations • Employer organisations are relatively unimportant in the United States as there have never been national employers’ confederations engaging in a full range of industrial relations activities • However, a number of employer organisations have focused on union avoidance measures including anti-union litigation, lobbying and publicity campaigns • In contrast to the relative weakness of employer associations, management consultants and law firms that represent employers play an active role in US industrial relations

9. US union movement • In 2007, union density was approximately 36% in the public sector and 7.5% in the private sector • US unions are unique in their approach to ‘business unionism’, where they focus narrowly on providing benefits to existing members • American unions have focused mostly on collective bargaining with an accompanied strike threat • US unions have not formed a political labour party but often financial contribute to other major political campaigns, most frequently those of Democratic Party candidates

10. Public sector unionism • There was a rapid increase in public sector unionism in the 1960s and 1970s • Federal, state and local government employees are excluded from coverage under the NLRA. Separate legal relations govern collective bargaining in each of these sectors • As of 2006, all but nine states had legislation providing at least some of their state or local government employees with the rights to organise and bargain collectively • The public sector is the most heavily unionised sector in the US, with just over one-third of employees unionised

11. Structure of the US union movement • National unions are very powerful as they dictate strategy, control strike funds and can establish and disestablish local unions • Local unions usually carry out day-to-day activities of the union movement including the enforcement of employee rights under the collective agreement and usually conduct bargaining over the terms of new agreements and any resulting strikes (although this is sometimes carried out by national unions) • The national centralisation of strike funds has meant that unions have been able to develop common rules and to strike effectively

12. The AFL-CIO • The American Federation of Labor-Congress of Industrial Organizations (AFL-CIO) is a federation of national unions that includes a substantial share of union members • The role of the AFL-CIO is: • to provide a national political and public voice for the US union movement • to resolve jurisdictional disputes among members • to enforce codes of ethical practices and policies against racial and sex discrimination • to provide a link to the international labour movement • In recent years the AFL-CIO has championed new organising methods which led to the 2005 breakaway of a number of key national unions, resulting in a new union federation called Change to Win

13. Union revitalisation • One of the purposes of the AFL-CIO organising initiative is to diffuse throughout the labour movement successful organising strategies used by affiliated unions • These strategies include using young, well-educated organisers and involve extensive direct communication with prospective members and links to community groups such as churches • The AFL-CIO tried to modernise and broaden issues that attract union members (e.g. child care, equal pay) • During the 1990s and early 2000s there was little evidence that these strategies were working, although in 2007 US union membership numbers increased by the largest amount in over 25 years and it was the first time that union membership rate had increased in 50 years • This growth in service sector unions suggests that some of these strategies may be having a positive effect on membership numbers, although it is too early to tell whether this trend will continue

14. Formation of the ‘Change to Win’ Coalition • Declining membership rates have led to divisions within the labour movement about how best to rebuild union strength • In 1995, John Sweeney was elected AFL-CIO President after challenging the existing strategy and direction of the union movement • In 2005, Sweeney’s leadership was similarly challenged as major unions called for more resources to be directed to organising and to encouraging the merger of smaller unions into larger, more powerful unions • In May 2005, four of the major unions – the SEIU, UNITE-HERE, the IBT and the LIUNA – issued a joint proposal for reform of the AFL-CIO • These proposals were rejected and in June 2005 the four dissenting unions formed the rival Change to Win Coalition (CTW) • Today the CTW Coalition represents some 6 million US workers and the AFL-CIO represents 9 million US workers

15. Implications of the split • A major concern following the split was that the two federations would compete with each other and the strength and voice of the union movement would be weakened • Initial experience suggests that the CTW Coalition and the AFL-CIO have been able to work together in some areas, such as political campaigns • Early assessments of the impacts of the spilt are divided and the effect on membership numbers and other indicators of success remains to be seen

16. Collective bargaining • In the non-union sector, pay rates and conditions are generally imposed unilaterally by the employer • In the union sector, the structure of collective bargaining is highly fragmented and this fragmentation is increasing, with most bargaining taking place at the single workplace level • Despite this fragmentation, there are some common features of collective bargaining agreements: • They are very detailed • They cover issues of pay, hours of work, holidays, pensions, health and life insurance, union recognition, management rights, the role of seniority in determining promotions and layoffs and paid time off • They detail the handling and arbitration of grievances • Most have a limited duration of one to three years

17. Decentralisation of collective bargaining structures • Until the early 1980s, the structure of unionised collective bargaining was a mixture of multi-employer, company-wide and plant-level bargaining • Since that time, collective bargaining structures have been progressively decentralised with the locus of bargaining shifting away from company-wide agreements to the plant level • Where company-wide agreements exist, corporate strategies and product markets have resulted in greater diversity across companies (reducing pattern bargaining) • Varying work practices and pay systems have also contributed to collective bargaining decentralisation

18. Collective bargaining initiatives • In recent years, unions have made significant changes to the process and outcomes of collective bargaining in an innovative effort to extend their membership base • Corporate campaigns use media, political, financial, community and regulatory pressures to build bargaining power • Other strategies link collective bargaining to organising and political strategies – triangulation strategies link organising, politics and collective bargaining • Cross-national unionism remains an ongoing challenge for unions to counteract the power of multinational enterprises (MNEs), outsourcing and international economic pressures

19. The 2000s • US-based MNEs have faced increasing economic competition • Rising healthcare costs and benefits have resulted in tensions in the union sector where employers have not been able to unilaterally change benefits and/or increase employee contribution payments as they have in the non-union sector • Retirement benefits were also a major issue for industries with sizeable retiree ‘legacy’ costs • Outsourcing of services to overseas providers was a growing concern • Despite these various pressures, the US employment relations system remained relatively stagnant in the 2000s

20. Variations in employment practices • Employment practices in the US are diverse due to • varying economic pressures across industries • the presence of a large low-wage, non-unionised sector where managerial prerogative is high • differences between the union and non-union sectors including growth in non-union employment • imported employment practices of US-based MNEs • Diversity in employment practices is often linked to diversity in pay systems

21. The Employee Free Choice Act • The labour movement’s major labour law reform initiative, the Employee Free Choice Act (EFCA) is yet to be passed and, in the event that it becomes law, its impact on union density and power is presently unclear • The EFCA’s major provisions involve: • allowing unions to organise through card check recognition • facilitation of speedy processing of unfair labour practice claims • increased penalties on employers who unlawfully discharge employees • provision of interest arbitration if the parties are unable to negotiate a first contract • Whilst some of these changes are significant, they do not signal a fundamental departure from the current system and they would not reverse long term trends in decentralisation, the adversarial nature of the US system or the lack of mandated employee participation/consultation schemes

22. Conclusions • Diversity in US employment relations is high and increasing due to growth in non-union employment and the wide variety of union and non-union employment and pay practices • There is wide variation in recent collective bargaining practices and outcomes • Union revitalisation has resulted in various organising and bargaining strategies as unions attempt to extend membership in the face of increasing income inequality and international pressures