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CHAPTER 11
LABOR UNIONS AND COLLECTIVE BARGAINING
CHAPTER OBJECTIVES
11.1 Explore the role of labor unions
11.2 Describe the basic union structure and organized labor’s strategies for a stronger
movement
11.3 Discuss laws affecting collective bargaining
11.4 Summarize the formation of bargaining units and the collective bargaining
process
11.5 Describe the grievance procedure in a union environment
11.6 Explain union decertification
KEY TERMS
Labor unions: Organizations that exist to represent the interests of employees in the
workplace and to ensure fair treatment when conflicts arise between one or more
National union: Organization composed of local unions, which it charters.
American Federation of Labor and Congress of Industrial Organizations (AFL-
CIO): Central trade union federation in the United States.
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Union salting: Process of training union organizers to apply for jobs at a company and,
once hired, working to unionize employees.
Flooding the community: Process of the union inundating communities with organizers
to target a particular business.
Public awareness campaigns: Labor maneuvers that do not coincide with a strike or an
organizing campaign to pressure an employer for better wages, benefits, and the like.
Authorization card: Document indicating that an employee wants to be represented by a
labor organization in collective bargaining.
Mandatory bargaining issues: Bargaining issues that fall within the definition of wages,
hours, and other terms and conditions of employment.
Permissive bargaining issues: Issues that may be raised, but neither side may insist that
they be bargained over.
Prohibited bargaining issues: Issues that are statutorily outlawed from collective
dues as a service charge in return for the union acting as the bargaining agent.
Open shop: Employment on equal terms to union members and nonmembers alike.
Checkoff of dues: Agreement by which a company agrees to withhold union dues from
members’ paychecks and to forward the money directly to the union.
Grievance: Employee’s dissatisfaction or feeling of personal injustice relating to his or
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Beachhead demands: Demands that the union does not expect management to meet
when they are first made.
Mediation: Neutral third party enters the negotiations and attempts to facilitate a
resolution to a labor dispute when a bargaining impasse has occurred.
Arbitration: Process in which a dispute is submitted to an impartial third party for a
LECTURE OUTLINE
THE ROLE OF LABOR UNIONS
The Industrial Revolution transitioned to an economy driven by large-scale
manufacturing. The capitalist factory owners sought profits and needed highly efficient
workforces. The resulting poor pay, unsafe working conditions, and lack of job security
motivated workers to band together to negotiate better terms and conditions of
employment.
WHY EMPLOYEES JOIN UNIONS
Individuals join unions for many different reasons, and these reasons tend to change over
time.
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● COMPENSASTION AND EMPLOYEE BENEFITS—If employees are
dissatisfied with their wages, they may look to a union for assistance in improving
their standard of living. Employees who are covered under a collective bargaining
agreement enjoy higher wages and are more likely to participate in a variety of
employee benefit programs.
● JOB SECURITY—If the firm does not provide its employees with a sense of job
security, workers may turn to a union.
● ATTITUDE OF MANAGEMENT—Employees do not like to be subjected to
arbitrary and capricious actions by management.
PREVALENCE OF UNIONS
There has been a decline in union membership. There are several reasons for this,
including a decline in unions’ ability to use intimidation tactics, the establishment of civil
rights laws that lessened the role of unions, and the globalization of businesses. Right-to-
work laws that prohibit management and unions from entering into agreements requiring
union membership have also impacted the decline. Unionization is substantially higher in
the public or government sector than in the private sector.
UNION STRUCTURE AND LABOR STRATEGIES
Labor movement has developed a multilevel organizational structure.
● NATIONAL UNION—Organization composed of local unions, which it
charters.
● AMERICAN FEDERATION OF LABOR AND CONGRESS OF
INDUSTRIAL ORGANIZATIONS (AFL-CIO)—Central trade union
federation in the United States. It is a loosely knit organization of national unions
that has little formal power or control. The member national unions remain
completely autonomous and decide their own policies and programs.
● CHANGE TO WIN COALITION—Union federation consisting of unions that
broke from the AFL-CIO and formally launched a rival labor federation
representing about 6 million workers.
ORGANIZED LABOR’S STRATEGIES FOR A STRONGER MOVEMENT
● STRATEGICALLY LOCATED UNION MEMBERS—A few strategically
located union members may exert a disproportionate amount of power.
● PULLING THE UNION THROUGH—One union tactic that puts pressure on
the end user of a product to force successful organizing attempts at a supplier.
● PUBLIC AWARENESS CAMPAIGNS—Labor maneuvers that do not coincide
with a strike or organizing campaign to pressure an employer for better wages,
benefits, and the like.
● BUILDING ORGANIZING FUNDS—AFL-CIO often asks its affiliates to
increase organizing funds. The funds are used to train organizers and launch
advertising campaigns.
● UNIONS PARTNERING WITH HIGH SCHOOLS—Some high schools are
pairing up with labor unions to prepare students for a career.
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unionization, and if 50 percent of the workforce plus one worker sign a card, the
union is formed. Card checks are expedited ways of polling workers on union
representation but no secret-ballot election takes place.
LAWS AFFECTING COLLECTIVE BARGAINING
● THE NATIONAL LABOR RELATIONS ACT—Also known as the Wagner
Act of 1935, is one of the most significant labor management relations statutes
ever enacted. The Act declared legislative support, on a broad scale, for the right
of employees to organize and engage in collective bargaining. The Act specifies
five potentially unfair labor practices:
● LABOR-MANAGEMENT RELATIONS ACT—Also known as the Taft-
Hartley Act in 1947 revised the National Labor Relations Act. The pendulum had
begun to swing toward a more balanced position between labor and management.
Changes introduced by Taft-Hartley include:
Other Changes introduced in the Act required Labor Unions to refrain from:
● Restraining or coercing employees in the exercise of their guaranteed
collective bargaining rights
● Causing an employer to discriminate in any way against an employee to
encourage or discourage union membership
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● Refusing to bargain in good faith with an employer regarding wages,
hours, and other terms and conditions of employment
● Engaging in certain types of strikes and boycotts
● Requiring employees covered by union shop contracts to pay initiation
fees or dues in an amount which the board finds excessive or
discriminatory under all circumstances
● Featherbedding, or requiring that an employer pay for services not
performed
● ANTIDISCRIMINATION LAWS AND EXECUTIVE ORDERS—There are
a variety of federal laws and executive orders that are designed to protect
employees from illegal discrimination.
BARGAINING UNIT FORMATION AND THE COLLECTIVE BARGAINING
PROCESS
Before a union can negotiate a contract, it must first be formed or certified. The primary
law governing the relationship of companies and unions is the NLRA, as amended.
Collective bargaining is one of the key parts of the act.
FORMING A BARGAINING UNIT
The bargaining unit is a group of employees, not necessarily union members, recognized
by an employer or certified by an administrative agency as appropriate for representation
by a labor organization for purposes of collective bargaining.
COLLECTIVE BARGAINING PROCESS— Once the NLRB certifies the union,
efforts can begin to negotiate a contract. The collective bargaining process is fundamental
to union and management relations in the United States. Most union/management
agreements in the United States are for a three-year period. Both external and internal
environmental factors can influence the process. The following steps are involved:
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BARGAINING ISSUES
Bargaining issues can be divided into three categories: mandatory, permissive, and
prohibited. Mandatory bargaining issues fall within the definition of wages, hours, and
other terms and conditions of employment. Permissive bargaining issues may be raised,
but neither side may insist that they be bargained over. Prohibited bargaining issues are
statutorily outlawed from collective bargaining.
● UNION SECURITY—Ensures that the union continues to exist and perform its
function.
● Closed shop: Arrangement making union membership a prerequisite for
employment.
● Union shop: Requirement that all employees become members of the
union after a specified period of employment (the legal minimum is 30
days), or after a union shop provision has been negotiated.
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● Open shop: Employment on equal terms to union members and
nonmembers alike.
● Checkoff of dues: Agreement by which a company agrees to withhold
union dues from members’ paychecks and to forward the money directly
to the union.
● COMPENSATION—Virtually any item that can affect compensation may be
included.
● Wage rate schedule: The base rates to be paid each year of the
contract for each job are included in this section.
specified.
● Vacation: Spells out the amount of vacation that a person may
take, based on seniority.
● GRIEVANCE PROCEDURE—Means by which employees can voice
dissatisfaction with specific management actions; also included in this section are
the procedures for disciplinary action by management and the termination
procedure that must be followed.
PREPARATION FOR NEGOTIATIONS
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The union must continuously gather information regarding membership needs to isolate
areas of dissatisfaction. The union steward is normally in the best position to collect such
data. Management also spends long hours preparing for negotiations.
NEGOTIATING THE AGREEMENT
Negotiating suggests a certain amount of give-and-take, the purpose of which is to lower
the other side’s expectations.
OVERCOMING BREAKDOWNS IN NEGOTIATIONS
Several means of removing roadblocks may be used in order to get negotiations moving
again.
● Interest Arbitration: Involves disputes over the terms of the proposed
collective bargaining agreements. The disputants are free to select any
person as their arbitrator, so long as they agree on the selection
UNION STRATEGIES FOR OVERCOMING NEGOTIATIONS
BREAKDOWNS—Strikes and boycotts are the primary means that the union may use to
overcome breakdowns in negotiations.
● Strikes: Action by union members who refuse to work in order to exert pressure
on management in negotiations.
● Boycotts: Agreement by union members to refuse to use or buy the firm’s
products.
● Lockout: Management decision to keep union workers out of the workplace and
run the operation with management personnel and/or replacement workers to
encourage the union to return to the bargaining table.
● Continue Operations Without Striking Workers: Operate the firm by placing
management and nonunion workers in the striking workers’ jobs.
the agreement, which is seldom viewed by the public.
PUBLIC SECTOR COLLECTIVE BARGAINING
Title VII of the Civil Service Reform Act of 1978 regulates most of the labor-
management relations in the federal service. Title V of the U.S. Code, the law that
dictates rules for federal employees, did not allow bargaining over wage issues, except
