chapter thirteen

© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.

Chapter ThirteenEnhancing

Union-ManagementRelations

13 | 1

PRIDE HUGHES KAPOOR

INTRODUCTION TOBUSINESS

ELEVENTH EDITION


Learning Objectives

1. Explain how and why labor unions came into being.

2. Discuss the sources of unions’ negotiating power and trends in union membership.

3. Identify the main focus of several major pieces of labor-management legislation.

4. Enumerate the steps involved in forming a union and show how the National Labor Relations Board is involved in the process.

13 | 2


Learning Objectives (cont’d)

5. Describe the basic elements in the collective-bargaining process.

6. Identify the major issues covered in a union-management contract.

7. Explain the primary bargaining tools available to unions and management.

13 | 3


Union-Management Relations

Labor union• An organization of workers acting together to

negotiate their wages and working conditions with employers

Union-management (labor) relations• The dealings between labor union and business

management both in the bargaining process and beyond it

13 | 4


The Historical Development of Unions

Early history• Craft union

- Organization of skilled workers in a single craft or trade- Limited to a single city; lasted for a short time

• Knights of Labor- Formed as a secret society- Goals: eliminate depersonalization of worker resulting

from mass production; improve moral standards of employees and society

- Lost public favor after Haymarket riot of 1886

13 | 5


The Historical Development of Unions (cont’d)

Early history (cont’d)• American Federation of Labor (AFL)

- Samuel Gompers’ goal: Improve members’ living standards

- Used the strike, a temporary work stoppage by employees as an effective labor weapon to add force to their demands

• Industrial Workers of the World (IWW)- A radical movement to overthrow capitalism

13 | 6


The Historical Development of Unions (cont’d)

Evolution of contemporary labor organizations• Industrial union

- An organization of both skilled and unskilled workers in a single industry

• Congress of Industrial Organizations (CIO)- Formed by industrial unions that withdrew from the AFL

• AFL-CIO- Both labor groups agreed to merge in 1955 to gain

strength and stop fighting each other over the right to represent particular groups of employees

13 | 7


Historical Overview of Unions

Sources: U.S. Bureau of Labor Statistics, Union Membership, www.bls.gov, accessed April 29, 2010.

13 | 8

Figure 13.1


Organized Labor Today

Union membership• Approx. 12.3% of the nation’s workers belong

to unions• AFL-CIO

- The largest union with approx 13.5 million members- Includes actors, barbers, construction workers,

carpenters, retail clerks, musicians, teachers, postal workers, painters, steel and iron workers, firefighters, bricklayers, newspaper reporters

13 | 9


Organized Labor Today (cont’d)

Union membership (cont’d)• Teamsters

- Independent labor organization with approx 1.4 million members

• United Steelworkers (USW)- Represents employees in basic resource industries

such as paper and forestry products, steel, aluminum, tire and rubber, mining, glass, chemicals, and petroleum with over 1 million members

• United Auto Workers (UAW)- Represents employees in the automobile industry with

approx 640,000 members- Part of AFL-CIO

13 | 10


Where Are the Union Members?

Source: Bureau of Labor Statistics; USA Today, February 25, 2010, p. 1A.

13 | 11



Membership trends• Union membership has declined steadily since

1980 due to changing business trends such as- Heavily unionized industries have been decreasing or not

growing as fast as nonunionized industries- Firms have moved from unionized areas (Northeast, Great

Lakes region) to less unionized areas (Southeast, Southwest)

- The largest employment growth is in service industries, which are typically not unionized

- Some companies are moving manufacturing to other (less unionized) countries

- Management is providing benefits that reduce employees’ need for unionization

13 | 12



Union-management partnerships• The adversarial nature of past union-management

relations has given way to limited cooperative partnerships between unions and companies

- Companies gain increased productivity, improved quality, and reduced costs

- Workers gain increased response to their needs, more decision-making opportunities, less supervision, more responsibility, and increased job security

- Unions gain credibility, strength, and increased membership

13 | 13


Labor-Management Legislation

Norris-LaGuardia Act (1932)• Made it difficult for businesses to obtain court orders

banning strikes, picketing, or union membership drives National Labor Relations Act / Wagner Act (1935)

• Established rights of workers to organize, be represented by a union, and to negotiate with management

• Forbids unfair labor practices, particularly those related to unionization

• Established the National Labor Relations Board (NLRB) to enforce the act

- Overseeing union representation elections- Investigating complaints filed under the provisions of the act

13 | 14


Labor-Management Legislation (cont’d)

Fair Labor Standards Act (1938)• Set a minimum wage• Requires overtime rates for work in excess of 40 hours

a week• Prohibits the use of child labor

Labor-Management Relations Act / Taft-Hartley Act (1947)• Balances the union power and management authority• Defines certain union activities as unfair labor practices• Gives management more rights during union organizing

campaigns• Gives the president power to obtain a temporary injunction

to stop strikes that threaten national health and safety

13 | 15


Labor-Management Legislation (cont’d)

Landrum-Griffin Act (1959)• Regulates the internal functioning of unions to

preserve their integrity and democratic nature

13 | 16


The Unionization Process

Why some employees join unions• As a way to combat alienation and loss of personal

identity from dull and repetitive jobs• Due to the perception that union membership

increases job security• As a way of expressing dissatisfaction with one or

more elements of the job• Due to personal background (family history of union

membership)• As a requirement to keep a job under provisions of

the labor contract between the union and the firm

13 | 17


Steps in Forming a Union

13 | 18

Figure 13.2


Sample Authorization Card

13 | 19

Figure 13.3


Steps in Forming a Union (cont’d)

Complicating factors• Bargaining unit

- The specific group of employees represented by a union must be defined

• Jurisdiction- The right of a particular union to organize particular

groups of workers- When jurisdictions overlap or are unclear, employees

may decide who will represent them

13 | 20


Steps in Forming a Union (cont’d)

The Role of the NLRB• Overseeing organizing campaign• Conducting the election• Certifying the results• Monitoring questionable behavior

13 | 21


Collective Bargaining

Process of negotiating a labor contract with management First contract

• Pre-negotiation preparations by both parties• Exchange of initial contract demands by union and company• Bargaining over issues until agreement is reached (or strike)• Membership vote to ratify (approve) the agreement

- If ratified, the agreement is signed and becomes a legally binding agreement

- If not ratified, there is more negotiation Later contracts

• Pre-negotiation preparations are more intense• Each side may take a harder line on the issues in negotiations• Contract expiration date produces tension

13 | 22


Union-Management Contract Issues

Employee pay• Forms of pay

- Direct compensation: wage or salary and benefits- Deferred compensation: pension and retirement

• Magnitude of pay- Parity with local and national industry pay levels- Real wage protection through cost-of-living clauses- Financial condition of employer- Cost-sharing for benefits

13 | 23


Union-Management Contract Issues (cont’d)

Employee pay (cont’d)• Pay determinants

- Management seeks to tie wages to each employee’s productivity

- Unions feel this creates unnecessary competition and usually suggest pay according to seniority

- Management seeks to constrain benefits to only some employees

- Unions want equal application of benefits

13 | 24



Working hours• Overtime

- Time worked in excess of forty hours in one week (under some union contracts, time worked in excess of eight hours in a single day)

- Pay is at least one and a half times the normal hourly wage• Special hourly rates for weekend or holiday work• The right of employees to refuse overtime• Premium pay for workers on less desirable shifts• Starting times• Length of meal periods and work breaks

13 | 25



Security• For the individual

- Job security: Protection against the loss of employment- Seniority

• For the union- Protection of the union’s position as employees’ bargaining agent- Arises directly from its membership- Closed shop: Workers must be union members before they are

hired; outlawed by the Taft-Hartley Act- Union shop: New employees must join the union after a

probationary period- Agency shop: Employees can choose not to join the union

but must pay dues- Maintenance shop: Employees who join the union must remain

members as long as they are employed by the firm

13 | 26



Management rights• The firm wants to control whom it hires, how

work is scheduled, how discipline is handled• Unions seek to control these matters• Some union executives have been given seats

on corporate boards of directors

13 | 27


Steps in Resolving a Grievance

13 | 28

Figure 13.4


Union and Management Negotiating Tools

Strikes• Picketing

- Marching back and forth in front of a place of employment with signs informing the public that a strike is in progress

- Employees hope- to arouse public sympathy and encourage the public not

to patronize the firm- Non-striking employees will honor the picket line and not

report to work- members of other unions will not cross the picket line

• Wildcat strike- A strike not approved by the strikers’ union

13 | 29


Union and Management Negotiating Tools (cont’d)

Slowdowns and boycotts• Slowdown

- Workers report to their jobs but work at a slower pace than normal

• Boycott- A refusal to do business with a particular firm- Primary boycott: aimed at the employer directly

involved in the dispute- Secondary boycott: aimed at a firm doing business

with an employer involved in a labor dispute; prohibited by the Taft-Hartley Act

13 | 30


Union and Management Negotiating Tools (cont’d)

Lockouts and strikebreakers• Lockout

- A firm’s refusal to allow employees to enter the workplace• Strikebreaker

- A nonunion employee who performs the job of a striking union member

Mediation and arbitration• Mediation

- The use of a neutral third party to assist management and the union during their negotiations

• Arbitration- The use of a neutral third party to decide an issue when the

two sides cannot agree

13 | 31

chapter thirteen

Documents