1
Chapter 16
The Supervisor, Labor Relations, and Legal Issues
After reading and studying this chapter, the student
should be able to:
Explain what is meant by labor relations.
Trace the development of unions in the United
States and explain why union membership is de-
clining.
Name and explain the basic laws governing labor
relations.
Describe union principles and objectives and dis-
cuss the methods used to achieve those objec-
tives.
Name three things that a supervisor must know in
order to live with the union agreement.
State the laws providing equal employment op-
portunity for protected groups of employees.
Name and explain the different forms of unlawful
discrimination.
Describe the most commonly provided employee
benefits.
Brief Outline
What Are Labor Relations?
How Unions Developed in the United
States
Early Union Activities
Period of Rapid Union Growth
Recent Limited Union Growth
Some Reasons for Declining Union
Membership
Some Basic Laws Governing Labor
Relations
The Most Important Labor Laws
Administration of Labor Laws
Union Principles, Objectives, and
Methods of Attaining Objectives
Organizing Employees
Becoming Recognized as the Em-
ployees’ Exclusive Bargaining Agent
Engaging in Collective Bargaining
Conducting a Strike or Lockout
Reaching an Agreement
Living with the Agreement
Supervisors’ Rights under the Agree-
ment
The Supervisor and the Union Stew-
ard
The Role of Seniority
Handling Employee Complaints
Caution Needed in Terminations
Complying with Equal Employment
Opportunity (EEO) Laws
The Most Important EEO Laws
Enforcement of EEO Laws
Workplace Violence
Harassment in the Workplace
Other Legal Issues
Legally Required Benefits
The Comparable Worth Issue
Factors Affecting Wage Rates
Learning Objectives
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2
The Legal Landscape
Management may be familiar with a particular type of employment discrimination referred to as disparate
treatment, in which the employee believes he or she has been treated differently by the employer because
of a protected class such as race, color, religion, sex, or national origin. However, many may not know
that policies that appear to apply equally to everyone may nevertheless be deemed discriminatory
if the applications of those policies statistically impacts one group at significantly higher rate
than another. This type of discrimination, known as disparate impact, arises even if the employer
did not intend for the policy to affect one group more than another. Employers utilize a measure
known as the four-fifths rule to determine whether an employment practice is discriminatory.
In 2003, the City of New Haven, Connecticut administered a promotion exam for firefighters
seeking promotion to Captain and Lieutenant ranks illustrates how the disparate impact and dis-
parate treatment theories can impact managerial decisions.
I. What Are Labor Relations?
• A labor union is an organization that represents the collective interest of workers in negotiating
with the workers’ employer to achieve economic goals especially increased wages and benefits,
shorter working hours, improved working conditions, and both personal and job security.
• Even if one is—or expects to be—a supervisor in a nonunion firm, one needs to understand how
labor relations affect supervisory activities and relationships because they affect nonunion employ-
ers as well as unionized ones.
• Labor relations, union-management relations, and industrial relations all refer to the relation-
ship between employers and their unionized employees.
• The growth of unionism forced managers to change many of their ways of dealing with employees.
• Management’s freedom of choice has been greatly limited by the emergence of unions.
II. How Unions Developed in the United States
• By the end of the 19th century, the high birthrate, rapid and uncontrolled immigration, concentra-
tion of wealth and industry in the hands of a few businessmen, political abuses by some employers,
and large numbers of workers in crowded industrial areas led to many abuses against workers.
A. Early Union Activities
Preview
Lecture Outline
CHAPTER NOTES Chapter 16
• Labor unions existed in the U.S. as early as 1789, but they were small, isolated and ineffective
craft unions of skilled, experienced workers.
• To increase their impact, several craft unions joined together in 1869 to form the Knights of La-
bor.
• Because the organization was only moderately successful, a more conservative union, the Amer-
ican Federation of Labor, was formed in 1881.
• Under the leadership of Samuel Gompers, the AFL grew, and had great impact, especially dur-
ing World War I and World War II.
B. Period of Rapid Union Growth
• During the 1920s and early 1930s, business became so powerful that workers again felt they
were being exploited.
• Laws were passed in the 1930s that protected workers and forced management to recognize un-
ions.
• But some workers had started organizing industrial unions, in which all the workers in a given
industry—such as those in iron, coal, and autos—belonged to the same union, whether they
were craftsmen, unskilled workers, or clerical employees.
• These unions broke away from the AFL in 1936 to form the Congress of Industrial Organiza-
tions (CIO).
• Union membership grew rapidly until 1945, when 35.5 percent of the workforce was unionized.
• After peaking in 1945, union membership declined until 1955, when it reached 33.2 percent of
the workforce.
• That was the highest point reached in the post-World War II period.
• In 1983, the percentage of U.S. workers represented by unions had declined to 20.1% of the
U.S. workforce, with17.7 million unionized workers.
• By the year 2003, only 13.5 percent of U.S. workers were members of unions, with only 16.3
million unionized workers.
• In 2012, membership had declined even further, with unions representing only 14.8 million
workers.
C. Some Reasons for Declining Union Membership
• The economy has shifted from manufacturing jobs, which are relatively easy to unionize, to ser-
vice work, which is more difficult to organize.
• There is a new kind of service worker who is more educated and technologically oriented.
• Because of the growing global economy, U.S. firms are under pressure to cut costs in order to
compete.
• Another problem for U.S. unions is the growing global economy. U.S. firms are under pressure
to cut costs to compete, so many employers have become more aggressive in opposing union
organizing drives.
• There are now many more small business owners than there are union members, and small firms
are very difficult for unions to organize.
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• Finally, unions may have done their jobs too well. Many traditional union issues, such as work-
place safety and hours of work, are now the subject of extensive legislation and government
regulation.
III. Some Basic Laws Governing Labor Relations
• The legal basis of union–management relations is provided by the National Labor Relations Act of
1935 (also called the Wagner Act), as amended by the Labor–Management Relations Act of 1947
(the Taft-Hartley Act), the Labor–Management Reporting and Disclosure Act of 1959 (the
Landrum-Griffin Act), and others.
• This complex set of laws establishes public policy and controls labor relations.
A. The Most Important Labor Laws
• In this section, we examine why the basic labor laws were passed.
• We also point out the important features of these laws and explain how they are administered.
1. The Wagner Act
• The National Labor Relations Act (Wagner Act) was passed to protect employees and unions
by limiting management’s rights.
• It gave workers the right to form and join unions of their own choosing, protected employ-
ees’ rights to engage in collective bargaining, and provided both unionized and union-free
workers with the right to engage in protected concerted activity for mutual aid and protec-
tion.
• It also established the National Labor Relations Board (NLRB) and gave the NLRB exclu-
sive jurisdiction to enforce the law.
• The act defined unfair labor practices that management could not commit against the
workers and the union, such as interfering with workers’ rights to organize.
• The act had no provision for unfair practices that the union might commit against workers
and management.
• One major abuse was that unions could impose requirements as to how employees could get
or keep a job.
• This abuse rose to prominence with the rise of union security agreements, particularly closed
shop agreements.
• Under a closed shop agreement, all prospective employees must be members of the recog-
nized union before they can be employed, and all current employees must join within a spec-
ified time to retain their jobs.
• Under a union shop agreement, all employees must join the union within a specified peri-
od—usually 30 days after being hired—or be fired.
• In an agency shop, all employees must pay the union dues even if they choose not to join the
union.
• The maintenance-of-membership clause says that once an employee joins the union, he or
CHAPTER NOTES Chapter 16
she must maintain that membership as a condition of employment.
2. The Taft-Hartley Act
• Following World War II, with evidence of abuse of power by some union leaders, Congress
passed the Labor–Management Relations Act (Taft-Hartley Act).
• Enacted in 1947, this act greatly changed the Wagner Act, making it more evenhanded, so
that unions as well as management could be charged with unfair labor practices.
• The Taft-Hartley Act prohibited the closed shop agreement, with a few exceptions, and gave
states the right to pass laws prohibiting the union shop.
• By 2012, 24 states had passed right-to-work laws, which give workers the right to join or
refuse to join a union without being fired.
3. Right-To-Work Laws
• A state statute that prohibits union shops in the state. Protects the right of employees to join
or refuse to join a union without being fired.
• The Taft-Hartley Act prohibited the closed-shop agreement, except in the construction and
shipping industries.
• By 2012, 24 states used Section 14(b) to pass right-to-work laws, that give workers the
right to join or refuse to join a union without being fired.
4. The Landrum-Griffin Act
• In 1959, Congress passed the Labor–Management Reporting and Disclosure Act (Landrum-
Griffin Act) in an effort to prevent corruption and abuse of employees by some union leaders
and managers.
• It provided an employees’ bill of rights which protects employees from possible abuse by
unscrupulous managers and union leaders.
B. Administration of Labor Laws
• The five-person National Labor Relations Board (NLRB) has the power to enforce the basic la-
bor laws.
• The functions of the NLRB are:
o To oversee the representation process and certify unions as the exclusive bargaining agent
for employees
o To see that unfair labor practices either are not committed or are punished
• The specific duties of the NLRB are:
o To hold an election to establish the bargaining agent for employees of a given firm.
o To investigate charges of unfair labor practices against the employer or the union.
o To issue complaints against either management or labor.
o To prosecute unfair labor practices and determine guilt.
o To assess fines and prison sentences.
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o To ask federal courts to control activities of both management and labor by citing them
for contempt.
IV. Union Principles, Objectives, and Methods of Attaining Objectives
• Samuel Gompers, the AFL’s first president, identified the following principles on which unionism
is based:
o Strength through unity
o Equal pay for the same job
o Employment practices based on seniority
• These principles of unionism lead to the practical goals unions have for their members:
o Higher pay
o Shorter hours of work on a daily, weekly, or annual basis
o Improved working conditions, both physical and psychological
o Improved security, both of the person and of the job
• The usual methods they use are:
o To organize a firm’s employees
o To become recognized as the employees’ exclusive bargaining agent
o To engage in collective bargaining
o To go on strike or threaten to strike
o To process grievances
A. Organizing Employees
• First, the union leader must persuade the employees of a firm to organize and join the union.
• A union organizer first tries to get the employees to sign a union authorization card, which
states that the employee wants the specified union to be his or her bargaining representative.
• As a supervisor in a union-free environment, you should be familiar with the basic steps in the
union organizing process, as well as steps that should be taken before a union comes calling.
1. Appeals Used by Union Organizers
• The technique most commonly employed by union organizers to obtain union recognition is
to compare the target company’s practices to items in contracts that the union has with other
companies, perhaps in an entirely different industry.
• Union organizers appeal to five main desires of employees:
o Job protection—unions stress that they continually try to ensure that employees have a
job—or at least an income—for a lifetime.
o Interference running—unions assure employees that they will act as their agents in
grievances and disputes. They will go to bat for employees, and they claim to have the
know-how to protect employees’ interests.
o Participation in management—unions insist that they can and will give employees a
CHAPTER NOTES Chapter 16
greater voice in deciding the policies, procedures, and rules that affect them and the
work they do.
o Economic gains—higher wages, reduced hours, and better benefits are still at the top
of an organizer’s checklist.
o Recognition and participation—knowing that pro-union workers need and are depend-
ent on attention, sympathy, and support, union organizers promise employees that
they’ll have greater recognition and participation through union activities.
2. Things to Do before the Union Calls
• Knowing the issues commonly used by union organizers to appeal to unorganized workers,
supervisors and other managers can do many things to minimize the chances of employees’
seeking union representation.
• The most important ones are:
o The company and its higher-level managers must pay close attention to supervisors,
for they are the key to successful labor relations.
o Ensure that workers know and understand what benefits the company offers and how
they compare to benefits offered elsewhere in the community.
o Review jobs frequently to see if they need to be upgraded because responsibilities or
working conditions have changed.
o Make sure employee facilities are adequate, safe, well lighted, well ventilated, and
reasonably clean.
o Keep records of good—and bad—performance by employees and have programs for
boosting employee performance, loyalty, and morale.
o Be firm but fair when imposing discipline.
o Provide a practical release valve, such as a grievance committee, for employee frustra-
tions and complaints.
o Be alert for any complaints of abuse or favoritism by employees or supervisors.
o Establish clear lines for two-way communications with all employees.
o Provide training for supervisors so they understand how to interact with subordinate
employees and the importance of being fair to all workers.
3. Additional Precautions for Supervisors
• In addition, management should make sure there is nothing in personnel policies and work
rules that the NLRB can construe as being anti-union.
• A company is obliged to permit solicitation and distribution of literature by union organizers
in nonwork areas such as locker rooms and parking lots during non-work times such as
breaks or lunch.
• Personnel policies that prohibit employees from discussing their wages have been found to
violate the Wagner Act because the policies interfere with the ability of workers to work col-
lectively to better their terms and conditions of employment.
4. What the Supervisor Should Do–and Not Do–When the Union Enters
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• A union tactic frequently used is for the union organizer to meet with the supervisor and
hand over signed authorization cards.
• If the supervisor touches the cards, it can be construed as acceptance of the union as the
workers’ agent – a process known as voluntary recognition.
• Supervisors must know that during union organizing the company is required to maintain the
status quo; changes in policy or the way policies are enforced may not occur in response to
union organizing.
• However, because of the fine line between legal and illegal supervisory conduct during union
organizing campaigns, most companies hire outside consultants to help guide them through
the process and provide detailed training to supervisors on what they can and cannot say and
do during the campaign period.
B. Becoming Recognized as the Employees’ Exclusive Bargaining Agent
• An exclusive bargaining agent is the employees’ representative who has the exclusive right to
deal with management over questions of wages, hours, and other terms and conditions of employ-
ment.
• A “certified” union is one that has won its representation right through the NLRB election pro-
cess and has the sole right and legal responsibility to represent all of the employees, nonunion
members, as well as members, in their dealings with management.
• Management may voluntarily recognize the union when presented with authorization cards or
some other showing of interest signed by a majority of employees in the proposed bargaining
unit.
• A secret-ballot election is conducted by the NLRB when requested by the union or the compa-
ny.
• Because legislative efforts to change the unionization process have not been successful, the ap-
pointed members of the National Labor Relations Board have proposed modifying its election
rules to accomplish through agency rule-making what the elected legislature has been unable to
accomplish through changes to statutory law.
C. Engaging in Collective Bargaining
• Once the union has been recognized as the employees’ bargaining agent, it starts negotiating
with management.
• Legally, collective bargaining is the process by which:
o Representatives of the employer and employees
o Meet at reasonable times and places
o To confer in good faith
o Over wages, hours, and other terms of employment
• It is a “must” that supervisors be consulted at each step of this bargaining procedure.
• If no agreement is reached, an impasse develops. At this point, the three alternatives are:
o To call in an outside mediator, provided by the Federal Mediation and Conciliation Ser-
CHAPTER NOTES Chapter 16
vice, who will bring the parties together and try to help them reach an agreement;
o To agree to bring the issue to an outside arbitrator, who will make a decision that will be
binding on both parties; or
o For the union to go on strike, or for management to stage a lockout.
D. Conducting a Strike or Lockout
• A strike occurs when employees withhold their services from an employer to achieve a goal.
• The employees tell the public why they are striking by picketing, walking back and forth out-
side the place of employment, usually carrying signs.
• Most union leaders do not like to use the strike, and only a small percentage of the thousands of
contract negotiations conducted annually result in strikes.
• The threat of a strike is a continuing factor in almost all negotiations.
• Management can stage a lockout. A lockout is closing company premises to the employees and
refusing to let employees enter to resume work.
E. Reaching an Agreement
• When an accord is reached, a document is prepared that becomes the collective bargaining
agreement or contract among the company, the union, and the workers.
• It usually contains clauses covering at least the following areas:
o Union recognition
o Wages and benefits
o Vacation and holidays
o Working conditions
o Layoffs and rehiring
o Management prerogatives or “rights”
o Hours of work
o Seniority
o Grievance and arbitration procedures
o Renewal clause
• Rules are established that should be obeyed by management and the union.
• The management rights clause defines the areas in which supervisors have the right to act free
from questioning or joint action by the union.
V. Living with the Agreement
• Once the agreement has been signed, it is binding until it is time to negotiate a new one – usually
three or four years later.
• The meaning and interpretation of each clause should be reviewed, and the wording of the contract
should be clearly understood.
A. Supervisors’ Rights under the Agreement
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• Supervisors should view the agreement as the rules of the game, because it spells out what they
may and may not do.
o To decide what work is to be done.
o To decide how, when, and where it will be done.
o To determine how many workers are needed to do the work safely.
o To decide who will do each job.
o To instruct, supervise, correct, and commend employees in the performance of their work.
o To require that work performance and on-the-job personal behavior meet minimum
standards.
o To recommend promotions and pay increases.
o To administer discipline according to the agreed-upon procedure.
• Supervisors need to have a working knowledge of the agreement’s details because the employ-
ees and their advocate, the union steward, will be aware of these details.
B. The Supervisor and the Union Steward
• The union steward, a union member who has been elected by other members to represent their
interests in relations with management, is the supervisor’s counterpart.
• The steward is the link between the workers and their union and between the union and the
company, especially in case of controversy.
• The supervisor represents the company and its interests to workers, who play the dual roles of
employees of the company and members of the union.
• The steward is at the same level in the union hierarchy as the supervisor is in the company hi-
erarchy.
C. The Role of Seniority
• One of the most basic union principles is seniority, which means that workers who have been
on the job the longest get preferred treatment and better benefits.
• One of the supervisor’s greatest challenges is to maintain high productivity while assigning
work especially preferred jobs and overtime, to the most senior employee, who is not necessari-
ly the most capable worker.
• In unionized companies, promotions within positions covered by the agreement are often
awarded to the most senior employee, who may or may not be the best person for the job.
D. Handling Employee Complaints
• Work assignments, promotion decisions, and discipline and discharge decisions lead to most
grievances against supervisors.
• The grievance procedure is a formal way of handling employees’ complaints.
• The grievance procedure will depend on factors such as type of industry, size and structure of
the organization, and the type of union.
1. Grievance Procedures
CHAPTER NOTES Chapter 16
• The form and substance of the grievance procedure depend on several factors:
o The type of industry (the old-line, “smokestack” industries, such as steel, auto, and
transportation have the most formal and rigid procedures).
o The size and structure of the organization (the larger, more highly structured organiza-
tions have the most formal and inflexible procedures).
o The type of union (the older, craft-oriented unions tend to have a highly structured
procedure).
• There are usually five steps in a formal grievance procedure in a unionized organization.
• However, the actual number of steps taken will depend on the number of managerial levels in
the organization and whether or not the grievance is submitted to arbitration.
• The steps in the grievance procedure are as follows:
o Step 1: Begins when an employee complains to the supervisor about a presumed wrong.
o Step 2: The employee goes to the union steward to present a grievance.
o Step 3: The union committee person or business agent tries to resolve the complaint with
middle management.
o Step 4: The union president and the chief executive officer try to resolve the difference.
o Step 5: If they cannot resolve the grievance, it is submitted to outside arbitration.
E. Complaint Procedures in Nonunionized Organizations
• Many nonunion organizations have formal complaint procedures that are comparable to the
formal union grievance procedures.
• Historically, these procedures in union-free companies did not, however, provide for arbitration.
• However, because of the increasing risk of employment-related lawsuits and the rising costs as-
sociated with those lawsuits, many union-free companies have begun including mandatory arbi-
tration provisions in their personnel policies, requiring employees to utilize alternative dispute
resolution procedures, such as arbitration, to settle any disputes arising from the employment re-
lationship.
F. Caution Needed in Terminations
• At one time, supervisors at one time had the right to terminate employees without having to
show cause or even give a reason.
• Today’s supervisors must offer a valid, documented reason for such discipline and discharge
decisions whether they are in a union or union-free workplace.
G. Labor Law for the Supervisor in a Union-Free Workplace
1. Concerted activity
• First, supervisors are the company’s first line of defense when it comes to union organizing.
• It is critical that supervisors know what rights their employees have under the labor laws and
SUPERVISORY MANAGEMENT Instructor’s Manual
know what their role is in protecting those rights.
• Second, the federal labor law does apply to union-free workplaces.
• In particular, supervisors need to know that the Wagner Act provides protection for concert-
ed activity.
o Protected concerted activity involves one or more workers taking action for the mutual
aid or protection of the group.
VI. Complying With Equal Employment Opportunity (EEO) Laws
• Most employees in the modern workplace – including men and whites — are protected by one or
more laws limiting the ability of a supervisor to terminate an employee “at–will.”
• This section examines some of the federal regulations and court decisions, and their effects on re-
cruiting and selection, as well as discipline and discharge.
A. The Most Important EEO Laws
• Federal legislation prohibits discrimination based on race, color, religion, sex, or national
origin in all employment practices.
• There are also additional laws that protect the people with disabilities, older workers, and veter-
ans.
B. Enforcement of EEO Laws
• The Equal Employment Opportunity Commission (EEOC) is the primary agency enforcing the
EEO laws.
• The EEO receives and investigates charges of discrimination, issues orders to stop violations,
and may go to court to enforce its decrees.
• One method used to combat the present effects of past discrimination is affirmative action
programs (AAPs).
• In essence, an organization, through an AAP, promises to do the following:
o Make good-faith efforts to recruit from diverse groups, which include women, African-
Americans, Hispanics, Vietnam-era veterans, Native Americans, persons with disabilities,
and older workers, through state employment services.
o Limit the questions that are asked of applicants during interviews and on their application
forms.
o Set goals and timetables for hiring the protected groups
o Avoid testing applicants unless the tests have been statistically evaluated to show the test
1. Types of Discrimination
• Unlawful discrimination generally takes one of two forms—disparate treatment and dis-
parate impact.
CHAPTER NOTES Chapter 16
o Disparate treatment requires the complaining person to show he or she suffered an
adverse employment action such as a failure to hire or a termination because of his or
her protected class (race, color, religion, gender, national origin, age, disability-status,
veteran’s status, military obligations, etc.).
o The other form of discrimination is disparate impact discrimination, which arises
when an employer’s policies or practices are facially neutral—they look like they ap-
ply to everyone equally – but when the policies or practices are applied, they statisti-
cally impact one group at a statistically higher rate than another.
VII. Harassment in the Workplace
• Companies must take measures against sexual harassment and regularly communicate their policies
about it.
• In 1999 the U.S. Supreme Court ruled that “victims of workplace sex discrimination can win puni-
tive damages from employers even if the boss’s behavior was not ‘egregious.’”
• Federal law now permits victims of workplace bias to recover punitive damages in addition to any
actual losses.
• The EEOC’s Guidelines on Discrimination Because of Sex defines sexual harassment as unwel-
come sexual advances, requests for sexual favors, and other physical or verbal conduct, by a mem-
ber of either sex, when such actions result in one of several consequences.
• Those consequences are as follows:
o Submission to the conduct is made, either implicitly or explicitly, a condition of employ-
ment.
o Submission to, or rejection of, the request(s) is used in making employment decisions in-
volving the employee.
o The purpose or effect of such conduct is to unreasonably interfere with the employee’s work
performance or create a hostile, offensive, or intimidating work environment.
• Supervisors and their managers should take strong, quick, and positive measures to discourage sex-
ual harassment because employers are responsible for such harassment by, or of their employees.
• Today, sexual harassment litigation is a big business, with thousands of cases filed annually at the
EEOC.
1. Accommodating Religious Beliefs
• An often costly mistake by supervisors is to overlook the employer’s duty under Title VII to
provide reasonable accommodation for sincerely-held religious beliefs.
• Under Title VII, religion is more than just protection for the traditional organized religion; it
also protects and requires accommodations for a variety of other non-traditional religious,
ethical and moral beliefs.
2. Accommodating Qualified Individuals with Disabilities
• The Americans with Disabilities Act requires employers to make reasonable accommoda-