chapter twelve enhancing union-management relations

Chapter Twelve

EnhancingUnion-Management

Relations

Copyright © Houghton Mifflin Company. All rights reserved. 12 - 2

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.


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.


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


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: to eliminate depersonalization of worker

resulting from mass production; to improve moral standards of employees and society

• Lost public favor after Haymarket riot of 1886


The Historical Development of Unions (cont’d)

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

• Samuel Gompers’ goal: to improve members’ living standards

• Used the strike as an effective labor weapon

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


The Historical Development of Unions

• 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


Historical Overview of Unions

Sources: U.S. Bureau of Labor Statistics, Dictionary of U.S. Labor Organizations, 1986–1987; www.aflcio.org; Statistical Abstract of the United States, 2001.


Organized Labor Today• Union Membership

– Approx. 14.5% of the nation’s workers belong to unions

– AFL-CIO• The largest union with approx 13.1 million members• Includes actors, barbers, construction workers, carpenters,

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

– Teamsters• Independent labor organization with approx 1.3 million

members

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

approx 748,000 members• Part of AFL-CIO


Organized Labor Today (cont’d)• Membership Trends

– Union membership has declined steadily since 1980– Heavily unionized industries have been decreasing

or not growing as fast as non-unionized industries– Firms have moved from unionized areas (Northeast,

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

– 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 employee’s need for unionization


Organized Labor Today (cont’d)

• 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


Labor-Management Legislation• Norris-LaGuardia Act (1932)

– Made it difficult for businesses to obtain court orders banning strikes, picketing, and 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


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


Labor-Management Legislation (cont’d)

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

preserve their integrity and democratic nature


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


Steps in Forming a Union


Steps in Forming a Union (cont’d)

• Complicating Factors– Bargaining Unit

• The specific group of employees to be represented by the union must be determined

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

particular workers• When jurisdictions overlap or are unclear,

employees may decide who will represent them


Steps in Forming a Union (cont’d)

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


Collective Bargaining

• The process negotiating a labor contract with management

• The 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)– Agreement is ratified by a vote of the union membership– Agreement is signed and a becomes legally binding

agreement (or 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


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


Union-Management Contract Issues

• 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


Union-Management Contract Issues (cont’d)

• Working Hours– Overtime

• Time worked in excess of 40 hours in one week; under some union contracts, time worked in excess of eight hours in a single day

• Pay is 1½ 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



• Security– For the individual

• Job security: protection against the loss of employment• Seniority

– For the union• 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



• 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


Steps in Resolving a Grievance


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

• Nonstriking 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


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


Union and Management Negotiating Tools (cont’d)

• Lockouts and Strikebreakers– Lockout

• A firm’s refuses to let employees 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

chapter twelve enhancing union-management relations

Documents

labor unions

labor groups

organized labor

union membership

union management contract

industrial unions

largest union

organization of workers