Chapter 17 – Employee and Labor Relations
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CHAPTER 17
Employee and Labor Relations
LEARNING OBJECTIVES
1. Explain employment at will and employment arbitration.
2. Define discipline.
3. Explain the key features of the formal discipline process.
4. Define grievance, union steward, and arbitration.
5. Describe the differing philosophies of unions and management.
6. Discuss significant labor laws.
7. Describe four main types of union organizations.
SUGGESTIONS FOR PRESENTATION
Role Playing – Specific to Employee Relations.
1. Supervisor’s Role
You’ve just checked to see why production has stopped on the line, and found that the Blitzer is
why it exists.
2. Subordinate’s Role
Your machine is down again! This is the fourth time this week you’ve had to call maintenance.
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autos, for example, are frequently used for personal business. And your boss (who knows very
little about the machine you operate) just received a very good raise—twice the last one you
received, you hear. The company is simply penny wise and pound foolish.
it would be worth looking into.
3. Observer
a) Does the supervisor approach the subordinate in a way which encourages sharing information,
or is it too much one-way? What could have been done better?
b) If the subject of wasted money came up, how does the supervisor react? That role wasn’t
warned of the concerns, so it may come out of nowhere.
c) Does the supervisor agree to look into replacing the Blitzer? That’s the best thing for the
company.
Draw on students’ own experiences – Specific to Labor Relations.
The fact that your students are taking a course titled “supervision” may bias their answers a bit,
but you might still ask how many have belonged or do now to a union? Why did they join? What
good or bad feelings do they have about unions?
Discuss the future of unions.
Union membership, especially as a percentage of the workforce, has been dropping since the mid
1950s. In fact in several recent years, the NLRB has dealt with more decertification than
certifications. Ask your students what they see as causes of this, and whether the trend can be
stopped?
up providing, and many others.
Actions by unions to combat this trend include: entering new areas, including white—and pink—
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collar jobs, professions, and other non-traditional markets; image building efforts; closer work
with management, instead of total adversarial approaches; etc.
The UAW was rejected by Nissan workers by about a 7-3 margin at the U.S. Tennessee
operation in the election held in July, 1989. Several news and business magazines had extensive
articles regarding that specific election, as well as the future of unions. That could be a good
research project for class members
LECTURE OUTLINE
Supervision Dilemma
Jane learns that another supervisor has had a grievance filed against him by one of his employees
on the grounds that he suspended the employee without following the disciplinary procedures
spelled out in the union contract.
I. Employment at Will and Employment Arbitration
• Employment at will means that when an employer hires employees to work for an
indefinite period of time and the employees do not have a contract limiting the
circumstances under which they can be discharged, the employer can terminate the
employees at any time.
o The Supreme Court held that employers may require employees to agree to resolve
any such employment-related disputes through final and binding arbitration.
▪ This type of arbitration is referred to as employment arbitration as opposed to
contract arbitration.
II. A Positive Approach to Discipline
• Discipline should be viewed as a condition within an organization whereby employees
know what is expected of them in terms of the organization’s rules, standards, and policies
and what the consequences are of infractions.
o The basic purpose of discipline should be to teach about expected behaviors in a
constructive manner.
• A formal discipline procedure usually begins with an oral warning and progresses through
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a written warning, suspension, and ultimately discharge.
• Discipline should be aimed at correction rather than punishment.
III. Maintaining Good Discipline
• The supervisor has the responsibility of informing employees of the organization’s rules,
regulations, and standards.
o There is no reason for supervisors to bend the rules for themselves or for a favored
employee.
o It is a supervisor’s responsibility to be fair to all employees.
IV. Applying the Discipline Procedure
• Figure 17.1 lists a number of reasons for using discipline.
• Before supervisors use the discipline procedure, they must be aware of how far they can go
without involving higher levels of management.
o Because a supervisor’s decisions may be placed under critical review in the
grievance process, supervisors must be careful when applying discipline.
A. Guidelines for Effective Discipline
• Every supervisor should become familiar with the law, union contract, and past
practices of the organization as they affect disciplinary decisions.
o The importance of maintaining adequate records cannot be overemphasized.
▪ Not only is this important for good supervision but it can also prevent a
disciplinary decision from being rescinded.
o An investigation should take place before discipline is administered.
o The union should be kept informed on matters of discipline.
B. Administering Formal Discipline
• A supervisor is expected to use progressive, corrective discipline.
• Discipline should be directed against the act rather than the person.
o Immediacy refers to the length of time between the misconduct and the
discipline.
▪ For discipline to be most effective, it should be administered as soon as
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possible.
o Discipline should be preceded by advance warning.
o A key element in discipline is consistently.
o Supervisors should take steps to ensure impartiality when applying discipline.
▪ The employee should feel that the disciplinary action is a consequence of
what he or she has done and is not a matter of personality or of
relationship to the supervisor.
o Ordinarily, the supervisor should administer discipline in private.
o The supervisor should warn the employee of the result of repeated violations.
o Supervisors should be very reluctant to impose disciplinary suspensions and
discharges.
• Figure 17.3 provides a checklist of rules that should be observed when applying
discipline.
V. Minimizing Grievances
• A grievance is a formal dispute between management and an employee or employees over
some condition of employment.
• The grievance procedure is a formal method for resolving grievances.
• Grievance usually begins with an informal complaint by an employee.
• The grievance procedure varies among organizations.
o Large organizations have a more formal procedure with more steps—typically three
▪ Subsequent steps involve higher levels of management and the union hierarchy.
▪ Arbitration is usually the final step in the grievance procedure.
❖ Arbitration is a process by which both the union and management agree
to abide
• The most frequently grieved problems are disciplinary actions, promotions and layoffs, and
distribution of work (including overtime).
• There are many reasons for allowing the supervisor to settle a complaint before it enters the
grievance procedure or at the lowest possible step of the grievance procedure.
o This saves time and money.
o The supervisor develops the employee’s confidence in the organization’s ability to
make decisions and solve problems.
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differences and avoid costly arbitration.
o Early settlement also prevents minor problems from becoming major disturbances
that upset morale and disrupt the entire organization.
• Very unusual cases or decisions that could affect many employees are best referred to
higher levels of management.
• Under no circumstances should the supervisor never attempt to obstruct the grievance
procedure.
VI. Differing Philosophies of Unions and Management
• Unions and management operate on two conflicting philosophies.
o Generally, the union philosophy is that the management has exploited labor in the
past and continues to do so.
▪ Unions usually believe that management is more interested in making a profit
than in furthering the welfare of its employees.
o Management often feels that unions foster inefficiency and reduce profits.
▪ It feels that unions strive to gain power for themselves and to divide the
employees’ loyalty.
VII. Development of Labor Law
• The first U.S. unions began as organizations of skilled workers as early as 1790.
o These unions sought to eliminate competition by banding together people in the same
craft.
o The early unions were generally held to be illegal.
o The Sherman Antitrust Act of 1890 made it illegal to restrain trade.
▪ It was applied against unions and restricted their growth.
o The Clayton Act, passed in 1914, was considered pro-union.
▪ It stated that labor unions were not to be considered in restraint of trade under
the Sherman Antitrust Act.
❖ However, court interpretations of this law determined that a union
engaged in a strike or boycott activity could be in restraint of trade.
• Yellow-dog contracts and injunctions were used to restrict unions.
o A yellow-dog contract is an agreement between an employee and management that,
as a condition of employment, the employee will not join a labor union.
o An injunction is a court order to prohibit certain actions.
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• During the 1920s and 1930s, public sentiment became more pro-union.
o As the Industrial Revolution progressed, employers had less need for skilled craft
employees and more need for semiskilled or unskilled employees.
o Semiskilled and unskilled employees lacked the job security that the skilled
employees had.
• In 135, Congress passed the National Labor Relations Act (Wagner Act).
o It required employers to bargain collectively with the union.
o It also created the National Labor Relations Board (NLRB), which is responsible
for supervising union elections and investigating unfair labor practices.
o This act led to increased power and growth of unions.
• The Labor-Management Relations Act (Taft-Hartley Act) was passed in 1947.
o This act upheld the right of employees to unionize, but it also broadened
management’s rights and prohibited unfair labor practices on the part of both unions
and management.
o The act also prohibited closed shops.
▪ It prohibited a union from requiring that a person be a member of the union
before he or she could be hired by an employer.
▪ RTW ensures that workers are not forced to join unions or pay union dues as a
condition of employment.
▪ Figure 17.6 lists the states with RTW laws.
• The Labor-Management Reporting and Disclosure Act (Landrum-Griffin Act) was
passed in 1959.
o This act is primarily concerned with the protection of the rights of individual union
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supervise union elections and investigate unfair labor practices in the public sector.
• The latest labor legislation which is quite controversial is the Employee Free Choice Act
(EFCA).
o The proposed act replaces the current process used in voting in union organizing
campaigns with a system called “card check.”
VIII. Structure of Labor Unions
• There are four main types of union organizations:
o Federations of local, national, and international unions
▪ The AFL-CIO (American Federation of Labor–Congress of Industrial
Organizations) is a federation of local, national, and international unions that
represents a majority of all union members in the United States.
❖ Its basic policies are set and its executive council is elected at a national
convention that is held every two years.
❖ Each national and international union sends delegates to the national
convention.
o National and international unions
▪ Most national and international unions are organized similarly to the AFL-CIO.
❖ These have a periodic national convention at which each local union is
represented in proportion to its membership.
o City or statewide federations of local unions
▪ These are composed of, and supported by, the local unions.
▪ These federations promote the interests of labor in the area they serve.
o Local unions
▪ As a rule, the membership of a local union elects officers who carry on its
activities.
❖ These officers normally conduct union business in addition to working at
their regular jobs.
❖ They generally receive no pay from the union for their union activities.
▪ Local unions depend heavily on the staff of its national or international union
for assistance in handling contract negotiations, strikes, and important
grievances.
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IX. Reasons for Joining Unions
• People join unions even when management has been fair in dealing with its employees.
o Some of the more important reasons for joining unions are purely economic. These
are:
▪ Higher wages
▪ Greater job security
o People also join unions for many other reasons. These reasons include:
▪ Better working conditions
▪ More meaningful work
▪ Fairer rules and procedures for determining promotions, discipline, etc.
• Most members of unions join them for positive reasons. Some employees, however, join
unions because they must do so in order to continue their employment.
o These employees would prefer not to join the union for a various reasons; among
them are:
▪ The employee wants to progress into management and therefore identifies
more with management than with the union
▪ The employee feels that the union protects the mediocre worker and does not
support the merit reward system
X. Union Organization Drive
• The union organization drive is usually started by the employees of the organization.
• A group of employees determines that a union is desirable.
o A representative of a national or international union is then asked by this group to
visit the company and solicit members.
o The union must obtain signed authorization cards from at least 30 percent of the
employees before a representation election can be called.
▪ Such an authorization card states that the employee desires representation by a
specific union.
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• Figure 17.9 gives a flowchart for a union organizing campaign.
XI. Supervisor’s Responsibility to the Employer and the Union
• The supervisor’s first responsibility is to the employer.
o As a member of management, the supervisor must work toward achieving good
productivity.
o As a member of management, the supervisor must help uphold the commitments of
management under the contract.
• The Labor-Management Relations Act, passed in 1947, outlines some unfair labor
practices that the supervisor is legally required to avoid.
o Restraining employees from forming or joining a union
o Trying to influence the labor organization
XII. Supervisory Responsibilities and Unions
• Supervisors should observe the following guidelines during a union organization drive:
o Consult higher management before dealing with officials of the union.
o Avoid arguing with employees over unionization.
o Do not threaten or bribe an employee directly or indirectly with regard to joining the
union.
o Be very careful not to discriminate against any employee who is involved in the
unionization attempt.
Solution to the Supervision Dilemma
Jane understands the differing philosophies of unions and management and about the
development of labor laws.
Chapter 17 – Employee and Labor Relations
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SUPERVISION ILLUSTRATIONS
17-1: Working in the Rain
17-2: A Contract Dispute
17-4: Professors Vote to Join a Union
REVIEW QUESTIONS
1. Explain employment at will.
2. Define employment arbitration.
3. What is discipline?
4. Give 10 reasons why an employee might be disciplined.
5. What are some actions that should be taken by the supervisor in the prediscipline stage?
Some actions that the supervisor should take in the prediscipline stage are as follows:
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6. What are the key features of formal discipline?
7. What is a grievance?
8. What is a union steward? arbitration?
9. What are yellow-dog contracts? What are injunctions?
10. Describe four laws that affect the union movement.
The four laws that affected the union movement are as follows:
• The Norris-La Guardia Act of 1932 made yellow dog contracts illegal and made it
Chapter 17 – Employee and Labor Relations
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Education.
shops, but permits states to pass right-to-work laws to prohibit union shops. [p. 360]
• The Labor Management Reporting and Disclosure Act (Landrum-Griffin Act) was
passed in 1959 to protect the rights of individual union members. [p. 361]
11. What are the four main types of union organizations?
The four main types of union organizations are:
12. Give four reasons for joining a union.
Four reasons for joining a union are:
SKILL-BUILDING QUESTIONS
1. The union and management philosophies outlined in this chapter are in conflict. Which
philosophy do you agree with, and why?
2. Can the supervisor single out employees who are less active in the union for preferred job
assignments? Why or why not?
Chapter 17 – Employee and Labor Relations
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Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill
Education.
Supervisors have to be fair in following a contract because first of all it is the legal and
moral thing to do. Besides that, if the supervisor plays games with the contract, several
things may happen. Grievances will be higher and more costly, employee morale will be
lowered, productivity will decrease, turnover will increase, and the next time the contract
comes up, there will be demands for much more specific language in the contract.
3. “Grievance procedures are only used by troublemakers and should be abolished.” Discuss
your views on this statement.
4. “A supervisor’s disciplinary action against an employee should never be overturned.”
Discuss.
ADDITIONAL READINGS
Refer to page 367 for more details.
SKILL-BUILDING APPLICATIONS
Incident 17-1: Working with Trudy
This case presents a situation where problems develop between a supervisor and a union steward.
1. Do you feel that this situation is unusual in unionized organizations?
17–15
2. If you were Jane, how would you handle the situation?
Incident 17-2: Wildcat Strike
This case presents a situation involving a wildcat strike, and should prompt a discussion on the
supervisor’s role.
1. How should Albert handle the situation?
2. What should the company do?
Incident 17-3: You’re Fired!
This case illustrates a typical grievance that results from differing interpretations of a contract.
1. Should James be reinstated in his job?
2. Was an effective disciplinary procedure followed?
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3. What would you do about the charges against Russ if you were his boss?
Incident 17-4: Keys to the Drug Cabinet
This case presents a controversial situation involving the discharging of an employee.
1. What would your decision be if you were asked to decide this case?
be a judgment call. The central issue seems to be that Marcus was fired and Margaret
wasn’t. She was responsible as well as Marcus, in that she allowed the incident to occur.
She also was more experienced with the hospital rules, and was not physically ill at the
time, while Marcus was. There is unquestionable blame on her part. Was a verbal
reprimand adequate, when Marcus was fired?
2. Should a supervisor and an employee be disciplined equally?
17–17
Exercise 17-1: Mock Arbitration
This exercise is designed to give the class a feel for what arbitration is like. The actual outcome
is secondary to the process.
otherwise.
Exercise 17-2: Discipline in a Nonunionized Business
A couple of points are relevant here:
below are suggested.
The system should include a minimum of:
• Definition of and limits on issues which it will address.
Exercise 17-3: Contract Negotiations
Chapter 17 – Employee and Labor Relations
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Education.
and then compute the costs as explained in the text of the exercise. Vary the directions as needed
for the students. The instructor may also have to play arbitrator if the teams get stuck. This will
take some time to complete, so planning should be done accordingly. The instructor may wish to
have the teams meet and decide their respective positions one class, then actually hold the
negotiations the following week. Emphasize that it can’t all be one sided—both sides will have
to win some and lose some or the company will go bankrupt and workers will be out of jobs.
Exercise 17-4: How Do You Rate as a Business Negotiator?
SUPERVISORY ANECDOTES
Good cause for discharging an employee, including threatening or assaulting a supervisor, can be
upset by a procedural deficiency. In ruling on the fairness of discipline imposed for such an
offense, arbitrators do not concern themselves merely with whether the employee involved is
Companies that formalize an internal problem-resolution program may avoid huge legal costs
Restaurant Administration Quarterly, Vol.: 36, Iss.: 1, Feb 1995, pp. 28-33.
But other sources are more skeptical. They say ADR seems good and is becoming accepted, but
remains undocumented:
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At a time when the use of alternative dispute resolution (ADR) techniques by employers is
growing swiftly, there remains little empirical data to document current practices in the
workplace. Understanding the unprecedented growth of ADR can only be accomplished in light
of the perceptions of its users. A survey of 92 companies of all sizes was conducted to determine
Health care unions report heightened interest in organizing among nonunionized workers. The
activism is not limited to nurses and hospitals. The managed-care revolution has pushed some
physicians to organize. Another factor leading to increased union interest may be that in the past,
nurses dissatisfied with working conditions could simply move to another hospital. In these
guarantees employees fair treatment by allowing them to bring their grievances in front of a
group that includes their co-workers. An employee who is unsatisfied with the application of a
company policy, but not the policy itself, may file an appeal with his employee-relations
representative within 7 working days. The employee-relations representative then sets up an
appeal board by randomly selecting 2 members of management and 3 employees from the same
job category as the appellant. A hearing is held, orchestrated by the employee-relations
representative. At the hearing, the supervisor describes the circumstances surrounding the
discipline.
Chapter 17 – Employee and Labor Relations
17–20
RELATED VIDEOS
1. I’d Like a Word with You, Video Arts, 27 mins. This video demonstrates the problems
for a legally defensible termination using progressive discipline.
6. On Strike, FHS, 56 mins. This 48 Hours program follows the 1989 United Mine Workers
strike.
7. Employer versus Employee, FHS, 28 mins. This video has a Phil Donahue segment which
presents several universal principles that apply to all forms of negotiation.