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CHAPTER 13
Labor Relations in the Public Sector
Outline
I. Significance of Public-Sector Labor Relations
i. In 2014, 7.2 million union members comprised 35.7 percent of total public sector
employment (federal, state, and local) (Exhibit 13.1).
ii. For purposes of collective bargaining, unions represent 27.5 percent of federal
employees, 29.8 percent of state employees, and 41.9 percent of local
government employees.
iii. Some national unions have branched out from their private sector membership
base to represent more public sector employees (e.g., United Auto Workers
union, Service Employees Int. Union, and the Int. Assoc. of Machinists).
iv. Free rider issue is important factor affecting union membership among federal
employees.
a. Labor Legislation in the Public Sector
i. 37 states have passed legislation allowing collective bargaining, which covers
police and fire, state, education, and municipal employees (Exhibit 13.2).
ii. National Labor Relations Act. (Exhibit 13.3).
iii. 12 states allow union recognition via card checks.
iv. 13 states permit public-sector strikes.
v. Title VII of the CSRA governs most federal employees’ bargaining rights.
b. Current Challenges to Collective Bargaining Rights of Public Unions
i. Rising retiree health benefits.
ii. Shortfalls of pension obligations.
iii. Blaming public sector unions.
II. Federal-Sector Labor Relations Legislation
i. Spoils system.
ii. CSRA established the Federal Labor Relations Authority (FLRA).
iii. Federal Service Impasse Panel (FSIP).
iv. Merit System Protection Board (MSPB).
a. Appropriate Bargaining Units and Union Recognition in the Federal Sector
i. Exclusive recognition.
b. Negotiable Subjects in the Federal Sector
i. Mandatory subjects.
ii. Permissible subjects.
iii. Subjects prohibited from negotiations.
c. Unfair Labor Practices in the Federal Sector
d. Grievance Procedures and Arbitration in the Federal Sector
e. Labor–Management Forums in the Federal Government
i. Executive order 13522.
ii. National Council of Federal Labor–Management Relations.
f. Homeland Security Act
i. Homeland Security Act (HAS).
ii. Department of Homeland Security (DHS).
iii. Human Resource Management System.
iv. Federal Labor Relations Authority.
III. Labor Relations in the U.S. Postal Service
i. Postal Reorganization Act (PRA) of 1970.
ii. Creation of the U.S. Postal Service (USPS).
IV. Similarities between Private- and Public-Sector Bargaining
i. Union professionals and bargaining agents often hired from the private sector to
work in public-sector unions.
ii. Reasons employees join unions are similar.
iii. Collective bargaining settlements are often influenced by the personalities of the
negotiators.
iv. Malicious obedience (also called work-to-rule).
v. Like the private sector, there is a continuing controversy over nonunion
employees' obligation to pay for representational rights.
vi. Davenport et al. v. Washington Education Association.
V. Differences between Private-Sector and Public-Sector Bargaining
a. The Market Economy Does Not Operate in the Public Sector
i. Many public services offered at little or no cost other than taxes; market
economy does not operate for many types of public services.
ii. Monopolistic conditions.
iii. Lack of substitute goods or services.
iv. Vague aspects of some public services make productivity measurement difficult.
b. The Relationship between the Budget and Public-Sector Bargaining Processes
i. Role of budget.
c. Employee Rights and Obligations
i. Public and private employees’ legal rights and obligations different.
ii. Limited freedom of speech.
iii. Discipline and discharge.
iv. Board of Regents v. Roth (1972).
v. Cleveland Board of Education v. Loudermill (1985).
VI. Collective Bargaining Structures and Decision-Making Processes
i. Bargaining structure within municipal governments is decentralized.
ii. Defining the appropriate bargaining unit.
iii. Unionization of supervisors and other managers.
iv. The sovereignty doctrine.
a. Negotiable Issues and Bargaining Tactics
i. Exemption by statute.
ii. Multilateral bargaining.
iii. End-run bargaining.
iv. The media.
v. Sunshine laws.
b. Grievance Administration
i. Grievance procedures are multi-step, but most grievances are not resolved at the
first step.
ii. Increased legalism.
c. The Right-to-Strike Controversy
i. Usually prohibited by statute in the public sector.
d. Discipline of Public-Sector Employees
i. Employers in the public sector have a heightened sensitivity about off-duty
misconduct of their employees.
e. Interest Dispute Impasse-Resolution Procedures in the Public Sector
i. Mediation, fact-finding, and interest arbitration.
f. Mediation
g. Fact-Finding and Arbitration of Interest Disputes
i. Arbitration entails a binding decision.
ii. Chilling effect.
iii. Criteria for arbitrator decision making.
iv. Narcotic effect.
h. Effectiveness of Fact-Finding and Arbitration of Interest Disputes
i. Variables that influence the bargaining process and outcomes.
ii. Interest arbitrators.
iii. Night Baseball Arbitration.
i. Referendum
j. Conclusions on Public-Sector Labor Relations
i. There are four primary factors that have the potential to produce pressures on
public sector labor relations.
k. Challenges and Opportunities for Public-Sector Unions
Discussion Questions
1. Think of a public organization with which you are familiar. Explain how it differs from a
private company in terms of the following:
a. Nature of its service.
b. Relationship between its budget and collective bargaining processes.
c. Bargaining structure and decision-making processes.
d. Negotiable issues and bargaining tactics.
e. The right to strike.
Numerous public and private organizations will be compared. Comparative differences for
2. Using the same public organization as in Question 1, discuss the similarities between
collective bargaining in this organization and a typical negotiation between a private
company and its union.
3. Explain why some states do and other states do not have a public-sector bargaining law or
laws that cover some public employees but not others.
Factors may include:
4. Describe the different types of impasse-resolution procedures used in the public sector, and
discuss the relative effectiveness of each.
Mediation is a process in which the neutral attempts to persuade the parties to settle their
Fact-finding, the second most popular impasse procedure, involves a hearing, presentation
Conventional interest arbitration involves the submission of issues in dispute to an
arbitrator who will make a final settlement. As a procedure, it has been criticized as
Referendum is a procedure in which unresolved issues are placed on the taxpayers' ballot
5. What are the advantages of ‘‘Night Baseball’’ arbitration over conventional interest
arbitration and FOA arbitration?
Advantages:
• Each party has an incentive to settle and each party has an incentive to present
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
• The final contract language is from the proposals crafted by one of the parties, not
from the ruling crafted by the arbitrator.
6. What are some possible advantages or disadvantages of expanding the scope of bargaining
in the federal sector to include issues such as wages and benefits?
Possible advantages: Would permit employees to participate in determining key elements of
their employment terms and conditions; could encourage innovation in designing
7. Why does the federal government have multiple labor management relations models?
8. Should public employees have the same right to strike as private-sector employees are
granted under the Labor Management Relations Act? Why or why not?
YES: Effective collective bargaining cannot occur without the ability to impose reasonable
costs on the other party for failing to reach an agreement; the strike threat serves as a
powerful incentive to encourage the parties to engage in bargaining and compromises
9. Should all public employees have a right to submit interest disputes to final and binding
arbitration in exchange for giving up the right to engage in legal strike activity? Why or why
not?
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
adverse arbitration ruling would pressure both union and management to reach a voluntary
settlement at the bargaining table.
NO: Would only increase union bargaining power and thus drive up the cost of bargaining
settlements; an arbitrator is not directly answerable to the public (taxpayer) and therefore
should not be granted the authority to determine how public monies will be spent;
arbitration does not permit outside parties (e.g., other interest groups) affected by the
arbitration decision to participate in the procedure directly; the current system works fine
so there is no need to change it.
Exploring the Web
Labor Relations in the Public Sector
1. Association of Labor Relations Agencies (ALRA).
2. Federal-Sector Labor Relations Legislation.
3. Labor Relations and Teachers.
4. Bureau of Labor Statistics on Work Stoppages in the Public Sector.
Suggested Readings and Term Paper Topics
1. Which procedure is better for resolving impasses in contract negotiations for state
employees: final offer interest arbitration or traditional interest arbitration?
Possible references:
Beam, K.B. (2003). Administering last rights to employee rights: arbitration enforcement and employment
law in the twenty-first century. Houston Law Review, 40, 2, 499-540.
Dickinson, D. L. (2004). A Comparison of Conventional, Final-Offer, and "Combined" Arbitration for
2. Some have argued that federal workers should have the right to strike. Others disagree.
What do you think? Support your arguments.
Possible references:
Dubofsky, M. and Dulles, F.R. (2004). Labor in America: A history. 7th edition. Wheeling, Ill. : Harlan
Davidson.
3. Should your labor-management relations instructor join the faculty union? Why or why
not?
Possible references:
------ (Jan/Feb 2004), Professor Awarded Damages in Retaliation Case, Academe, 90, 1, 12.
Dayal, S. (1989). Collective bargaining among academic professionals: An analysis of issues and
4. Compare teachers' unions in Japan and the United States.
Possible references:
Greenlees, J. (Nov. 3, 1995). The sun also rises. Times Educational Supplement, Issue 4140, p.18.
5. We often hear about "Right-to-Work" laws dealing with the private sector, but some
states have these laws for public-sector workers as well. How are the issues for public-
sector workers different from those in the private sector? Are state "Right-to-Work"
laws for public-sector (state and local government) employees a good or bad idea?
Possible references:
Ichniowski, C., & Zax, J. S. (1991). Right-to-work laws, free riders, and unionization in the local public
sector. Journal of Labor Economics, 9, 255-275.
6. Compare the labor relations system for federal employees in the United States with the
labor relations system for federal employees in Canada.
Possible references:
Hebdon R. (1998). Behavioural determinants of public sector illegal strikes: Cases from Canada and U.S.
Relations Industrielles, 53, (4), 667-691.
Palgrave Macmillan.
7. Agree or disagree: "Teacher's unions are responsible for the decline in U.S. public
schools." Support your position.
Possible references:
Bernstein, A. (January 28, 1991). Letting teachers call the shots. Business Week, p. 54.
8. Do public-sector workers get higher wages because of interest arbitration procedures?
What are the other benefits/costs of interest arbitration relative to other public-sector
dispute resolution procedures?
Possible references:
Stokes, G. (1999). Solomon's wisdom: An early analysis of the effects of the Police and Fire Public Interest
Arbitration Reform Act in New Jersey (2001). Journal of Collective Negotiations in the Public Sector, 28,
9. What factors or tactics make public-sector mediation effective? Support your position.
Possible references:
Briggs, S., and Koys, D. J. (1990). An empirical investigation of public sector mediator effectiveness.
10. Compare the grievance procedures and processes found in the public sector with those
commonly found in the private sector.
Possible references:
Bohlander, G. W. (1989). Public sector independent grievance systems: Methods and procedures. Public
Personnel Management, 18, 339-354.
11. What are the causes of most public-sector strikes? How are those causes similar to and
different from the causes of private-sector strikes? What do you recommend policy
makers do in order to reduce the number of strikes in the future?
Possible references:
Devinatz, V. G. (1997). Testing the Johnston "public sector union strike success" hypothesis: A qualitative
12. What factors distinguish the labor relations system in the public sector from that in the
private sector? Propose a public-sector labor relations system for the employees of the
city government here. What would it borrow from the private sector? What would it not
be able to borrow? Why? How would you modify your system to account for specific
aspects of city government? Why?
Possible references:
Nicholson, P.Y. (2004). Labor’s story in the United States. Philadelphia : Temple University Press.
© 2017 Cengage Learning®. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Jacoby, S. M. (2004). Employing bureaucracy : Managers, unions, and the transformation of work in the
20th century. Mahwah, N.J. : Lawrence Erlbaum.
Coleman, C. J. (1990). Managing labor relations in the public sector. San Francisco: Jossey-Bass.
13. How, if at all, did the Civil Service Reform Act of 1978 alter labor relations for federal
employees? What did it leave undone? How would you improve upon it?
Possible references:
West, W. F. (March/April, 2000). Merit, management, and neutral competence: Lessons from the U.S.
merit systems protection board, FY 1988-FY 1997. Public Administration Review, 60,(2),pg.111-123.
14. How does public-sector fact-finding differ from public-sector mediation? Which
procedure do you recommend? Why?
Possible references:
Nelson, N. E. (1990). Factfinders view the factfinding process. Journal of Collective Negotiations in the
15. Compare the labor relations system in the federal sector with that found in your state or
municipality. How are they different? How are they similar?
Possible references:
Ashraf, J. (1992). Union wage effects in the public sector: An examination of the impact across alternative
16. What are the major shortcomings of the present public-sector industrial relations
system? (You can pick either the federal or state or local level.) If you were to design a
public-sector labor relations system, how would it look? How would it overcome the
limitations you identified with the present system?
Possible references:
Cohen (2003). Relative Satisfaction with ADR: Some Empirical Evidence. Dispute Resolution Journal, 57,
4, 36-41.
17. In some European nations, soldiers are allowed to join labor unions. Should American
soldiers and/or defense contract workers (e.g., navy shipbuilders) be allowed to join
labor organizations and bargain collectively? Why or why not?
Possible references:
Jacoby, S. M. (2004). Employing bureaucracy: Managers, unions, and the transformation of work in the
20th century. Mahwah, N.J. : Lawrence Erlbaum.
18. Should (pick one): (a) prisoners, (b) prison guards be allowed to form unions and
bargain collectively? Why or why not?
Possible references:
Arax, M. (July 19, 1999). Union Crushed Bid to Let State Prosecute Guards; Justice: Organization's clout is
apparent as brutality cases remain under the jurisdiction of county district attorneys. The Los Angeles
Labor Relations Review, 34, 531-544.
19. Compare faculty and/or graduate student labor unions at public universities with those
of private-sector universities. How do they differ legally? Do they differ in organization,
practice, and tactics?
Possible references:
------ (Jan/Feb 2004), Professor Awarded Damages in Retaliation Case, Academe, 90, 1, 12.
20. Why is it that, at a time when private-sector unions are declining in the U.S., public-
sector unions are growing? How do you explain this paradox? What, if anything, can
private-sector unions learn from their public-sector counterparts?
Possible references:
Gerwin, C. (Oct. 29, 2000). Teachers drop an "R" (for reform). Boston Globe. E-3.
Johnston, P. (1994). Success while others fail: Social movement unionism and the public workplace. Ithaca,
21. Agree or disagree: Public-sector teachers' unions are the biggest opponents of true
educational reform.
Possible references:
DeMitchell, T. A., Barton, R. M. (Sept., 1996). Collective bargaining and its impact on local educational
reform efforts. Educational Policy, 10, (3), 366-379.
22. Do public-sector strikes work? Why or why not? Do prohibitions against public-sector
strikes work? What factors make public-sector strikes different from those of the
private sector?
Possible references:
Cohen (2003). Relative Satisfaction with ADR: Some Empirical Evidence. Dispute Resolution Journal, 57,
4, 36-41.
