Labor Relations / Collective Bargaining

1. Labor Relations / Collective Bargaining Lecture 09.0 Summer 2008 SLS 4205 Dr. Richard M. Southall

2. Management Contexts, Relevant Laws, and Cases

3. In Your Role as Manager Labor Relations • Make effective management decisions informed by labor laws • Ensure that all supervisors are knowledgeable in labor laws • Keep workers satisfied and more productive • Avoid distractions caused by labor problems

4. Labor Laws Both State and Federal Levels • State labor laws: • Typically apply to public entities (e.g., university athletic departments) • Federal labor laws: • Apply to private employers engaged in a business involving interstate commerce

5. Labor Law History • Early common law decisions tended to be unfavorable to labor movements • In 19th century, state courts often considered concerted activities such as strikes and picketing to be criminal conspiracies • Commonwealth v. Hunt (1842) marked beginning of judicial recognition of employees’ right to engage in concerted actions to better their employment conditions (continued)

6. Labor Law History (continued) • Sherman Act of 1890: Employers began using this as a legal maneuver to fight employee challenges • Section 1, intended as antitrust law, prohibits contracts and conspiracies that restrain trade or commerce • Employers argued that actions of employees engaged in concerted activity had effect of reducing competition and injuring consumers (continued)

7. Labor Law History (continued) • Loewe v. Lawlor (1908): U.S. Supreme Court agreed that Sherman Act applied to employees as well, resulting in injunctions against union activity • Clayton Act of 1914 limited use of antitrust laws against labor unions engaged in legitimate objectives • Norris LaGuardia Act of 1932 further enforced Clayton Act’s intent to exempt normal union activities from antitrust laws

8. Labor Law Legislation • National Labor Relations Act (NLRA) • Taft-Hartley Act of 194 • Fair Labor Standards Act of 1938

9. National Labor Relations Act • Enacted in 1935 • Applies to private employers • Sets forth employee rights, including the right to negotiate with employer over hours, wages, and terms and conditions of employment • Encourages collective bargaining • Created National Labor Relations Board (NLRB), to administer labor laws in U.S.

10. National Labor Relations Board • Created by NLRA in 1935 • Established by Congress, because it mistrusted manner in which courts made labor decisions, historically aligned with employer interests

11. Taft-Hartley Act of 1947 • Amended the NLRA to balance protection of employees and employer • Comparison of NLRA and Taft-Hartley Act: • NRLA gives employees right to join or assist unions; Taft-Hartley adds right of employees not to do so • NLRA prohibits management from discriminating against employee on basis of union membership; Taft-Hartley prohibits union from discrimination against nonunion employees

12. Fair Labor Standards Act of 1938 • Sets forth minimum wage, overtime wages, and child labor protections, and outlines exemptions to those provisions • Requires recordkeeping on those aspects of law by employers

13. Labor Relations Applied toProfessional Sport • Early player attempts at organization were minimally successful; focused largely on soliciting pension benefits • Not until late 1960s and early 1970s did labor movement take hold in sport industry

14. Professional SportLabor Unions • Virtually all major league teams are unionized • Players associations: national employee bargaining units • Turnover rates for sport unions high due to short-term careers • Short-term careers and dynamics of professional sports labor relationships make collective bargaining negotiations a challenge

15. NLRA §7:Employee Rights • Right to join or assist unions • Right to engage in collective bargaining through a representative of one’s own choosing • Right to engage in concerted activity for one’s own mutual aid and protection

16. NLRA §7: Formation of Unions • Employers voluntarily recognize employees in a union or 30% of employees file authorization cards with NLRB authorizing an election • NLRB evaluates whether employees are appropriate cohesive unit for bargaining • Election is held and union is certified

17. Certification of Union asAppropriate Bargaining Unit • Two important changes for employees: • Management has duty to bargain in good faith with union • Union has duty of fair representation for members

18. Mandatory vs. PermissiveBargaining Subjects • Good faith bargaining required over mandatory subjects: • Hours • Wages • Terms/ conditions of employment • Permissive subjects: Management not obligated to negotiate over; union cannot bargain to impasse over

19. Duty of Fair Representation • Requires union to represent all employees in bargaining unit fairly • Unions must represent employees without acting in arbitrary, bad faith, or discriminatory manner • If union does not represent all employees fairly, NLRB has ruled that it qualifies as an unfair labor practice under §8 of NLRA

20. Right to Engagein Concerted Activity • Employees have right to strike (or engage in picketing, work slowdowns, etc.) for better economic or working conditions • Employees cannot interfere with employer’s ability to conduct business, however

21. NLRA §8: Unfair Labor Practices Employer Unfair Labor Practice, §8(a) (1) To interfere with, restrain, or coerce employees in exercise of §7 rights (2) To dominate or interfere with a union or contribute financial or other support to it (3) To encourage or discourage membership in any labor organization (4) To discharge or discriminate against an employee because he files unfair labor practices complaint or testifies under NLRA (5) To refuse to bargain collectively with employee’s representative

22. NLRA §8: Unfair Labor Practices Union Unfair Labor Practice, §8(b) (1) To restrain or coerce employees in their exercise of §7 rights (2) to cause employer to discriminate against employee (3) To refuse to bargain collectively with an employer (4) To require employees to pay excessive dues or fees for membership (5) To cause an employer to pay for services not performed

23. NLRA §8: Unfair Labor Practices • Possible mixed motives for discipline, retention, and termination; well-documented paper trail needed • Questions may arise when released employees are also heavily involved in union activity • Burden of employee to show union activities were a motivating factor in firing; burden of employer to show employee would have been fired regardless of union activity

24. Your Viewpoint • In your opinion, have unions helped or harmed industry in the United States, and in what ways? • Have they helped or hurt employees, and in what ways? • Do you have suggestions regarding how to improve labor relations in U.S. industry?

25. Duty to Bargainin Good Faith • Duty by both parties to bargain in good faith over hours, wages, and terms and conditions of employment • Decisions made by commissioners of pro sports within their owner-granted powers may clash with duty to bargain over mandatory subjects (NFLPA v. NLRB)

26. §10(j) injunctions • NLRB may seek a court order to stop an employer from committing an alleged unfair practice (Mario v. NASL)

27. Collective Bargaining • Goal of union: negotiating contract containing mandatory subjects of their workplace • Process favors compromise between the two sides

28. Collective Bargaining in Professional Sports • Collective bargaining addresses policies restrictive to employees: drafts, limits on free agency, salary caps • Federal courts decide whether restrictive provisions are protected from antitrust scrutiny when negotiated with players union

29. Convergence of Laborand Antitrust Law • Restrictive policies (the draft, the salary cap or luxury tax, and restrictions on free agency) may inspire antitrust challenges • Practices that might otherwise violate players’ antitrust rights may be shielded if negotiated through collective bargaining process

30. Collective Bargaining Agreements (CBAs) • CBA: a contract representing one round of collective bargaining negotiations • Collective bargaining relationship an on-going one • Either side has right to convince other side to come back to bargaining table

31. In Your Role as Manager Union Relationships • Managers who understand that unilateral changes in the workplace must be negotiated with the union will have a better relationship with employees and be less likely to face unfair labor practice charges • Exception: “Managerial decisions which lie at the core of entrepreneurial control” (Ford Motor Co. v NLRB, 1979)

32. Wage Provisions in Professional Sport CBAs • Salary caps/taxes • Minimum salaries • Fines • Salary arbitration • Termination/severance pay • Licensing revenues • Per diem pay • Fringe benefits • Tickets • Charitable contributions

33. Hour Provisions in Professional Sport CBAs • Training camp/spring training • Season schedule • Postseason play • Travel • All-star game • Exhibition games • Charitable requirements • Winter or summer leagues • No strike-no lockout

34. Terms/Conditions of Employment inProfessional Sport CBAs • Grievance arbitration • Free agency • Draft • Discipline • Drug testing • Travel, locker room, parking policies • Player conduct • Health issues • Rosters • Anticollusion

35. Collective Bargaining: Arbitration • Parties to a dispute hire a neutral third party arbitrator to render a decision that is final and binding • Less costly, more efficient alternative to the court system or a strike or lockout • Arbitration clauses common in labor agreements

36. Arbitration Is Binding • Arbitrator’s decision is final and binding; established by three Supreme Court cases known collectively as Steelworkers Trilogy • Court can overturn only where plaintiff can prove arbitrator exceeded scope of his or her authority

37. Arbitration Grievance Procedure • Arbitration typically preceded by grievance process negotiated into CBA: • Employee discusses grievance with union rep or directly with supervisor • If they agree grievance has merit, formal written grievance is filed • Union rep and management attempt to resolve • A committee may hear grievance, but if unresolved, arbitration called for

38. Types of Arbitration • Rights arbitration: • For disputes over the interpretation or application of the contract • Interest arbitration: • Deals with disputes over the terms of contracts, such as salary arbitration

39. Salary Arbitration • Major League Baseball: “Final offer method,” in which arbitrators must choose one side or the other’s final offer • National Hockey League: Arbitrators have ability to choose either offer or an amount between the two offers

40. Collective Bargainingand Discipline • Most CBAs have at least one provision devoted to employee discipline • Grievance arbitration serves as mechanism to challenge disciplinary action • The phrase “just cause” appears in discipline provisions referring to a level of scrutiny used in evaluating situation

41. Collective Bargainingand Drug Testing • Drug and alcohol testing is a mandatory subject for bargaining • Goal is to negotiate fair provisions in regard to players’ privacy rights, determination of which drugs to test for, and so on • Drug-testing covers two categories: substances of abuse and performance enhancers

42. Collective Bargainingand Salary Caps • As players associations have engaged in collective bargaining, salaries have risen at increasing rates • Negotiations have increasingly centered on salary caps and other wage restrictions • Salary caps so complex that specialized financial experts called capologists are used

43. Individual vs. Collective Bargaining • Employee-athletes have individual bargaining power and individual contracts • Are also parties, through their players association, to CBAs • Hierarchy of agreements: CBA takes precedence over individual contract

44. Your Viewpoint • In your opinion, what works and what doesn’t work about players’ associations and collective bargaining in professional sports? • As team owner, what do you feel are the pros and cons of salary negotiations as they currently exist? As an athlete?