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Copyright © 2017 Pearson Education, Inc.
Part Five
Enrichment Topics in Human Resource Management
Chapter 15
Labor Relations and Collective Bargaining
Lecture Outline:
The Labor Movement
Improving Performance: The Strategic Context
Why Do Workers Organize?
Employee Engagement and Unionization
What Do Unions Want?
The AFL-CIO and the SEIU
Unions And The Law
Period of Strong Encouragement: The Norris LaGuardia (1932) and National Labor
Relations (or Wagner) Acts (1935)
Period of Modified Encouragement Couple with Regulations: The Taft-Hartley Act 1947
Unfair Union Labor Practices
The Union Drive and Election
Step 1. Initial Contact
Step 2. Obtaining Authorization Cards
Step 3. Hold a Hearing
Step 4. The Campaign
Step 5. The Election
How to Lose an NLRB Election
Evidence-Based HR: What to Expect the Union to do to Win the Election
The Supervisor’s Role
Know Your Employment Law
Decertification Elections: Ousting the Union
Improving Performance: HR Practices Around the Globe
The Collective Bargaining Process
What Is Collective Bargaining?
What Is Good Faith?
The Negotiating Team
Costing the Contract
Bargaining Items
Building Negotiating Skills
Bargaining Hints
Impasses, Mediation, and Strikes
Trends Shaping HR: Digital and Social Media
The Contract Agreement
Dealing With Disputes And Grievances
Chapter 15: Labor Relations and Collective Bargaining 15- 2
Copyright © 2017 Pearson Education, Inc.
Sources of Grievances
The Grievance Procedure
Guidelines for Handling Grievances
Improving Performance: HR Tools For Line Managers and Small Businesses
The Union Movement Today And Tomorrow
What Are Unions Doing About It
Cooperative Clause
Improving Performance: HR Around the Globe
Chapter Review
Where Are We Now…
The main purpose of this chapter is to help you deal effectively with unions and grievances.
After briefly discussing the history of the American labor movement, we describe the basic law,
including unfair labor practices. We explain labor negotiations, including the union actions you
can expect during the union campaign and election. And we explain what you can expect during
the actual bargaining sessions, and how to handle grievances.
Interesting Issues:
Some people call Costco “The Anti-Walmart,” because Costco treats its workers and unions so
well. Whereas Walmart is known for difficult labor relations (it said, for instance, it was
eliminating health insurance for future employees working under 24 hours per week), Costco
actually keeps profits up in part with positive labor relations policies. We’ll see how they do it.
Learning Objectives:
15-1: Give a brief history of the American labor movement.
15-2: Discuss the main features of at least three major pieces of labor legislation.
15-3: Present examples of what to expect during the union drive and election.
15-4: Illustrate with examples of bargaining that is not in good faith.
15-5: Develop a grievance procedure.
15-6: Describe a strategy for cooperative labor relations.
Annotated Outline:
I. The Labor Movement – unions have changed dramatically since their creation. Today over 14
million U.S. workers belong to unions. Unions, in many cases, are perceived in a negative
light, but this is a poor assumption to make. Most unions are in the public sector as compared
to the private sector.
A. Improving Performance: The Strategic Context
Chapter 15: Labor Relations and Collective Bargaining 15- 3
Copyright © 2017 Pearson Education, Inc.
B. Why Do Workers Organize? – the urge to unionize often seems to boil down to the belief
on the part of workers that it is only through unity that they can get their fair share of the
pie. It is sometimes the result of workers trying to protect themselves from management’s
whims. Union workers tend to receive significantly more pay, holidays, sick leave,
unpaid leave, insurance plan benefits, long-term disability benefits, and various other
benefits than nonunion workers do. Unions seem to have reduced the impact of
downsizings and wage cuts in most industries, in part because union employees are not
entirely “at will.”
C. Employee Engagement and Unionization – paying attention to employee engagement
levels within your organization helps to foster positive relationships between employees
and management and decreases the likelihood of a workforce seeking union
representation.
D. What Do Unions Want? – Unions have two sets of aims − one for union security and one
for improved wages, hours, working conditions, and benefits for their members.
1. Union Security – the five types of union security are closed shop, union shop,
agency shop, preferential shop, and maintenance of membership arrangement.
2. Improved Wages, Hours, and Benefits – the typical labor agreement also gives the
union a role in other HR activities, including recruiting, selecting, compensating,
promoting, training, and discharging employees.
E. The AFL-CIO and the SEIU – the American Federation of Labor and Congress of
Industrial Organizations (AFL-CIO) is a voluntary federation of about 57 national and
international labor unions in the United States. The AFL and CIO merged in 1955. The
three layers of structure in the AFL-CIO are the local union (a single chapter in a national
union), the national union, and the national federation. Changes have occurred recently.
Four big unions have withdrawn from the AFL-CIO and have established the Change to
Win Coalition. The Service Employees International Union (SEIU) is one of them. They
are the fastest growing federation with more than 2.2 million members.
II. Unions and the Law – there were no special labor laws until about 1930, so employers were
virtually unrestrained in their behavior toward unions. Since the Great Depression, in
response to changing public attitudes, values, and economic conditions, labor law has gone
through three clear changes: from strong encouragement of unions, to modified
encouragement coupled with regulation, and finally, to detailed regulation of internal union
affairs.
A. Period of Strong Encouragement: The Norris-LaGuardia (1932) and the National Labor
Relations (or Wagner) Acts (1935) – the Norris-LaGuardia Act guaranteed to each
employee the right to bargain collectively free from interference, restraint, or coercion,
but it did little to restrain employers from fighting labor organizations. The National
Labor Relations (Wagner) Act of 1935 (1) banned certain unfair labor practices; (2)
provided for secret-ballot elections and majority rule for determining whether a firm’s
employees were to unionize; and (3) created the National Labor Relations Board (NLRB)
for enforcing these two provisions.
1. Unfair Employer Labor Practices – as deemed by the Wagner Act, a) it is unfair
for employers to interfere with, restrain, or coerce employees in exercising their
legally sanctioned right of self-organization; b) it is unfair for company
representatives to dominate or interfere with either the formation or the
Chapter 15: Labor Relations and Collective Bargaining 15- 4
Copyright © 2017 Pearson Education, Inc.
administration of labor unions; c) companies are prohibited from discriminating in
any way against employees for their legal union activities; d) employers are
forbidden to discharge or discriminate against employees simply because the
latter file unfair practice charges against the company; and e) it is unfair for
employers to refuse to bargain collectively with their employees’ duly chosen
representatives.
2. From 1935 to 1947 – union membership increased quickly after passage of the
Wagner Act in 1935, but the tide had begun to turn by the mid-1940s.
B. Period of Modified Encouragement Coupled with Regulation: The Taft-Hartley Act
(1947) – the law amended the Wagner Act with provisions aimed at limiting unions in
four ways: (1) by prohibiting unfair union labor practices, (2) by enumerating the rights
of employees as union members, (3) by enumerating the rights of employers, and (4) by
allowing the President of the United States to temporarily bar national emergency strikes.
C. Unfair Union Labor Practices – according to the Taft-Hartley Act, a) unions cannot
restrain or coerce employees from exercising their guaranteed bargaining rights; b)
unions cannot cause an employer to discriminate in any way against an employee in order
to encourage or discourage his/her membership in a union; c) unions cannot refuse to
bargain in good faith with the employer about wages, hours, and other employment
conditions (certain strikes and boycotts are also unfair union labor practices); and d)
unions cannot engage in featherbedding.
1. Rights of Employees – the Taft-Hartley Act protects employees from
their unions.
2. Rights of Employers – the Taft-Hartley Act explicitly gives employers
full freedom to express their views concerning union organization. The
only major restraint is that employers must avoid threats, promises,
coercion, and direct interference with workers who are trying to reach
a decision. The employer (1) cannot meet with employees on
company time within 24 hours of an election or (2) suggest to
employees that they vote against the union while they are at home or
in the employer’s office, although he/she can do so while in their work
area or where they normally gather.
3. National Emergency Strikes – the Taft-Hartley Act allows the U.S.
President to intervene in national emergency strikes. The President
may appoint a board of inquiry and, based on its report, apply for an
injunction restraining the strike for 60 days. If the parties don’t reach
a settlement during that time, the President can have the injunction
extended for another 20 days, during which time employees take a
secret ballot to ascertain their willingness to accept the employer’s last
offer.
4. Period of Detailed Regulation of Internal Union Affairs: The
Landrum-Griffin Act (1959) (officially, the Labor Management
Reporting and Disclosure Act) – an amendment to the Wagner Act, it
is aimed at protecting union members from possible wrongdoing on
the part of their unions. This law provides a bill of rights for union
members; lays out rules regarding union elections; regulates the kind
of person who can serve as a union officer; greatly expands the list of
Chapter 15: Labor Relations and Collective Bargaining 15- 5
Copyright © 2017 Pearson Education, Inc.
unlawful employer actions; and requires reports from unions and
employers, covering such practices as the use of labor relations
consultants.
5. Labor Law Today – unions are pushing for new legislation today that
would substantially improve union’s efforts; although on the other
hand, economic realities (shrinking state budgets, for instance) have
undoubtedly reduced union membership.
III. The Union Drive and Election – there are five basic steps:
A. Step 1. Initial Contact – the union determines the employees’ interest in
organizing, and an organizing committee is established. The initiative for the
first contact between the employees and the union may come from the
employees, from a union already representing other employees of the firm, or
from a union representing workers elsewhere. Once an employer becomes a
target, a union official usually assigns a representative to assess employee
interest. He/she identifies employees who would make a good organizing
committee, and educates them on the benefits of forming a union, the law and
procedures involved in forming a local union, and the issues management is
likely to raise during a campaign. The union must follow certain rules when it
starts contacting employees.
1. Labor Relations Consultants are outside advisors (such as law firms,
researchers, psychologists, labor relations specialists, or public relations
firms) used by both management and unions to provide advice and related
services to assist in the winning of elections.
2. Union Salting is an organizing tactic by which full-time undercover union
organizers are hired by unwitting employers. A U.S. Supreme Court
decision held the practice to be legal. Critics claim that “salts” interfere
with business operations and harass employees.
B. Step 2. Obtaining Authorization Cards – this step is necessary for the union to petition
the NLRB for the right to hold an election. Thirty percent of the eligible employees in an
appropriate bargaining unit must sign authorization cards before the union can petition
the NLRB for an election. During this stage, both union and management typically use
various forms of propaganda. However, neither side can threaten, bribe, or coerce
employees, and an employer may not make promises that benefit employees or make
unilateral changes in terms and conditions of employment.
C. Step 3. Hold a Hearing – one of three things can occur once the union collects the
authorization cards: 1) no hearing is needed if the employer chooses not to contest union
recognition and a consent election is held immediately; 2) if the employer chooses not to
contest the union’s right to an election, and/or scope of the bargaining unit, and/or which
employees are eligible to vote in the election, no hearing is needed and the parties can
stipulate an election; or 3) if an employer does wish to contest the union’s right, it can
insist on a hearing to determine those issues. An employer’s decision about whether to
insist on a hearing is a strategic one based on the facts of each case and whether it feels it
needs additional time to develop a campaign to try to persuade a majority of its
employees not to elect a union to represent them. The hearing addresses several issues.
Chapter 15: Labor Relations and Collective Bargaining 15- 6
Copyright © 2017 Pearson Education, Inc.
If the results of the hearing are favorable for the union, the NLRB will order holding an
election, issue a Notice of Election to that effect, and send NLRB Form 707.
D. Step 4. The Campaign – during this stage, the union and the employer appeal to
employees for their votes, but neither side can threaten, bribe, or coerce employees.
E. Step 5. The Election – a secret ballot election is held within 30 to 60 days after the NLRB
issues its Decision and Direction of Election. The NLRB provides the ballots, voting
booth, and ballot box, and counts the votes and certifies the results of the election. The
union becomes the employees’ representative if it wins the election by a majority of the
votes cast.
F. How to Lose an NLRB Election – the four sure ways to lose an election are:
1. Asleep at the switch
2. Appointing a committee
3. Concentrating on money and benefits
4. Delegating too much to division
G. Evidence-Based HR: What to Expect the Union to Do to Win the Election – research
suggests that pursuing a “rank and file strategy” is the best way for unions to win
elections.
H. The Supervisor’s Role – supervisors are an employer’s first line of defense when it
comes to the unionizing effort. Supervisors need some special training because they can
discover the early signs of union activity or they can inadvertently take actions that hurt
their employers’ union-related efforts. Supervisors must be knowledgeable about what
they can and can’t do to legally hamper organizing activities.
1. Some TIPS: The Supervisor’s Role in the Unionizing Effort – one company helps its
supervisors remember what they may and may not do with respect to unionization
with the acronyms TIPS and FORE. For example, the manager should remember
TIPS for what he or she may not do: threaten, interrogate, promise, or spy. To
remember what to do to discourage unionization, the supervisor may remember
FORE: facts, opinion, rules, and experience.
I. Know Your Employment Law – Rules Regarding Literature and Solicitation
J. Decertification Elections: Ousting the Union – the same law that grants employees the
right to unionize also gives them a way to legally terminate their union’s right to
represent them, which is known as decertification. Decertification campaigns don’t differ
much from certification campaigns.
K. Improving Performance: HR Practices Around the Globe
IV. The Collective Bargaining Process
A. What Is Collective Bargaining? – according to the National Labor Relations Act,
collective bargaining “is the performance of the mutual obligation of the employer and
the representatives of the employees to meet at reasonable times and confer in good faith
with respect to wages, hours, and terms and conditions of employment, or the negotiation
of an agreement, or any question arising thereunder, and the execution of a written
contract incorporating any agreement reached if requested by either party, but such
obligation does not compel either party to agree to a proposal or require the making of a
concession.”
Chapter 15: Labor Relations and Collective Bargaining 15- 7
Copyright © 2017 Pearson Education, Inc.
B. What Is Good Faith? – in collective bargaining, good faith means that both parties
communicate and negotiate, that proposals are matched with counterproposals, and that
both parties make every reasonable effort to arrive at an agreement.
C. The Negotiating Team – both union and management send a negotiating team to the
bargaining table. It is vital that the team understand the impact, particularly the financial
impact, of the things they either propose or accept in negotiations.
D. Costing the Contract – collative bargaining experts emphasize the need to cost the
union’s demands carefully – know how it will impact you financially.
E. Bargaining Items – labor law sets out categories of items that are subject to bargaining:
mandatory, voluntary, and illegal items. Mandatory items are items that a party must
bargain over if they are introduced by the other party. Voluntary (permissible) items are
neither mandatory nor illegal; they become a part of the negotiations only through the
joint agreement of both management and union. Illegal items are forbidden by law.
F. Building Negotiating Skills – hammering out a satisfactory labor agreement requires
negotiating skills. Experienced negotiators use leverage, desire, time, competition,
information, credibility, and judgment to improve their bargaining positions. Leverage
means factors that help or hinder the negotiator.
G. Bargaining Hints – according to expert Reed Richardson, the following is advise for
bargainers: Be sure you have set clear objectives for every bargaining item, and you
understand on what grounds the objectives are established; do not hurry; when in doubt,
caucus with your associates; be well prepared with firm data supporting your position;
always strive to keep some flexibility in your position; don’t just concern yourself with
what the other party says and does – find out why; respect the importance of face saving
for the other party; constantly be alert to the real intentions of the other party with respect
not only to goals but also priorities; be a good listener; build a reputation for being fair
but firm; learn to control your emotions – don’t panic; be sure as you make each
bargaining move that you know its relationship to all other moves; measure each move
against your objectives; pay close attention to the wording of every clause negotiated;
remember that collective bargaining negotiations are, by their nature, part of a
compromise process; try to understand people and their personalities; and remember that
excessive bargainer transparency and openness can backfire.
H. Impasses, Mediation, and Strikes
1. Third Party Involvement – three types of third-party interventions are used
to overcome an impasse: mediation, fact-finding, and arbitration. With
mediation a neutral third party tries to assist the principals in reaching
agreement. A fact finder is a neutral party who studies the issues in a
dispute and makes a public recommendation of what a reasonable
settlement ought to be. Arbitration (binding or unbinding) can guarantee a
solution to an impasse because the arbitrator often has the power to
determine and dictate the settlement terms. Various public and
professional agencies make mediators and arbitrators available.
2. Sources of third-party assistance come from various public and
professional agencies.
3. Strikes – is a withdrawal of labor. There are four types of strikes:
economic strike, unfair labor practice strike, wildcat strike, and sympathy
strike. An economic strike results from a failure to agree on the terms of a
Chapter 15: Labor Relations and Collective Bargaining 15- 8
Copyright © 2017 Pearson Education, Inc.
contract that involve wages, benefits, and conditions of employment.
Unfair labor practice strikes are called by unions to protest illegal conduct
by the employer. A wildcat strike is an unauthorized strike occurring
during the term of a contract. Picketing, or having employees carry signs
announcing their concerns near the employer’s place of business is one of
the first activities that occur during a strike.
4. Strike Guidelines for Employees – several guidelines are discussed that
can minimize confusion during a strike.
5. Other “weapons” – to break an impasse include corporate campaigns and
boycotts. A corporate campaign is an organized effort by the union that
exerts pressure on the corporation by pressuring the company’s other
unions, shareholders, directors, customers, creditors, and government
agencies, often directly. A boycott is a refusal by employees and other
interested parties to buy or use the employer’s product.
I. Trends Shaping HR: Digital and Social Media
J. The Contract Agreement may be 20-30 pages or longer, and the main sections cover
these subjects: 1) management rights, 2) union security and automatic payroll dues
deduction, 3) grievance procedures, 4) arbitration of grievances, 5) disciplinary
procedures, 6) compensation rates, 7) hours of work and overtime, 8) benefits: vacations,
holidays, insurance, pensions, 9) health and safety provisions, 10) employee security
seniority provisions, and 11) contract expiration date.
V. Dealing with Disputes and Grievances
A. Sources of Grievances – employees may use just about any factor involving wages,
hours, or conditions of employment as the basis of a grievance.
B. The Grievance Procedure – it is specified in most collective bargaining contracts; it
specifies the various steps in the procedure, time limits, and specific rules. Union
grievance procedures differ from firm to firm.
C. Guidelines for Handling Grievances – Do’s: As a manager, do investigate and handle
each and every case as though it may eventually result in an arbitration hearing; talk with
the employee about his/her grievance; require the union to identify specific contractual
provisions allegedly violated; comply with the contractual time limits of the company for
handling the grievance; visit the work area of the grievance; determine whether there
were any witnesses; examine the grievant’s personnel record; fully examine prior
grievance records; treat the union representative as your equal; hold your grievance
discussions privately; and fully inform your own supervisor of grievance matters.
Don’ts: discuss the case with the union steward alone – the grievant should be there;
make arrangements with individual employees that are inconsistent with the labor
arrangement; hold back the remedy if the company is wrong; admit the binding effect of
a past practice; relinquish to the union your rights as a manager; settle grievances on the
basis of what is fair – stick to the labor agreement; bargain over items not covered by the
contract; treat as subject to arbitration claims demanding the discipline or discharge of
managers; give long written grievance answers; trade a grievance settlement for a
grievance withdrawal; deny grievances on the premise that your “hands have been tied by
management;” and do not agree to informal amendments in the contract.
Chapter 15: Labor Relations and Collective Bargaining 15- 9
Copyright © 2017 Pearson Education, Inc.
VI. The Union Movement Today and Tomorrow – union membership has gradually declined in
America from about 20% of the workforce in 1938 (when 17.8 million workers belonged to
unions), to about 11% ( just over 14 million workers) recently.
A. What Are Unions Doing About it – unions are becoming more aggressive and becoming
more proactive in coordinating their efforts including extending them abroad. Several
recent NLRB decisions have supported union efforts.
B. Cooperative Clauses – parties commit to adhere to one or more of these cooperative
themes (in descending order of frequency-of-mention in the agreements):
1. Intent to cooperate
2. A statement of commitment to cooperate
3. Committees to review mutual concerns that arise
4. Decisions on traditional issues
5. Guarantees of employment security
6. Commitments to high-performance practices
7. Decisions on strategic issues
8. Full cooperation
C. Improving Performance: HR Around the Globe
Chapter Review
Chapter Section Summaries:
15-1: The labor movement is important. About 14 million U.S. workers belong to unions –
about 11% of the total.
15-2: To understand unions and their impact, one should understand the interplay between
unions and the law.
15-3: When unions begin organizing, all managers and supervisors usually get involved, so it’s
essential to understand the mechanics of the union drive and election.
15-4: The employer and union hammer out an agreement via the collective bargaining
process.
15-5: Most managers become involved with disputes and grievances during their careers.
15-6: Membership is down but unions are still influential today, so it’s important to understand
the union movement today and tomorrow.
Discussion Questions:
15-1: Why do employees join unions? What are the advantages and disadvantages of
being a union member?
This item can be assigned as a Discussion Question in MyManagementLab. Student
responses will vary.
