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CHAPTER 9: JOB SECURITY AND SENIORITY
LABOR NEWS: RAILROAD UNIONS, CARRIERS CLASH OVER JOBS
CHAPTER 9: OUTLINE
I. Job Security
A. Job security—also called industrial jurisprudence (Table 9-1)
2. Seniority as basis for job opportunities (95 percent of contracts)
4. Last-hired, first-fired (started in 1930s)
5. Human capital theory, implicit contract theory, and internal labor market
theory
B. Allocating economic benefits and opportunities on basis of service
C. Mandatory collective bargaining subject
II. Seniority—Set of Rules Governing the Allocation of Benefits
III. Calculation of Seniority
A. Usually accrues from date first hired
B. Seniority List
2. Disputes over seniority go through grievance procedures.
3. Plant-wide seniority—individual employee receives credit that becomes
5. Classification seniority—employee seniority only within same job
classification.
6. Company-wide seniority—considers seniority with the company.
C. Bumping—employees with greater seniority whose jobs are phased out can
displace employees with less seniority.
D. Combining types of seniorities—companies often use plant-wide seniority lists
IV. Promotions
A. Seniority usually treated as a determining factor along with skill and ability.
1. Skill and ability usually the more important factors.
B. Arbitrators generally give management the “right to judge” qualifications.
C. Job Bidding—Process usually detailed in labor agreement.
V. Layoff and Recall Actions
A. Layoff based entirely on seniority.
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B. Layoff based on seniority among those employees management feels are capable
of performing the work.
D. Where ability is part of decision:
1. When seniority is governing criteria and ability is equal, only seniority
should be considered.
3. Senior employees can be required to demonstrate ability through a test.
E. In cases involving temporary or emergency layoffs, management is usually given
greater flexibility.
F. Firefighters Local Union No 1784 v. Stotts. The court upheld a seniority system
even though it adversely affected blacks recently hired.
G. Advanced Notice of Shutdown
H. Worker Adjustment and Retraining Notification Act (Plant Closing Act)
1. This act required certain employers to provide either advance written
VI. Determining Ability in Promotion/Recall Decisions
A. Employer generally has burden to show that bypassed senior employee is not
competent for job.
B. Factors used to measure ability
2. Experience
4. Opinion of supervisor
6. Production records
VII. Company Mergers—combining seniority lists when two companies merge
A. Surviving Group Principle—add employees of acquired company to the bottom
of acquiring company
B. Length of Service Principle—employee’s length of service
VIII. Subcontracting, Outsourcing, and Relocating
A. Subcontracting, or outsourcing, is an arrangement to make goods or perform
services with another firm that could be accomplished by the bargaining unit
employee.
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B. Fibreboard Paper Products Corp. Case determined that subcontracting work of a
D. Ford-UAW 1996 historic agreement requires confidential notification and job
preservation before outsourcing. (Figure 9-3)
E. General Motors negotiated a lifetime job guarantee, so long as it did not have to
IX. Employee Teams
A. Utilizing groups of employees improves the workplace by enhancing
productivity in three areas: decision-making, problem solving, and creativity.
1. Union reaction to self-managed teams is mixed. Some see it as an
union support.
B. NLRB decisions in Electromation and DuPont give guidelines on how self-
managed teams can operate and not violate the Wagner Act. If self-managed
teams are to consider employment issues:
X. Successorship
A. If there is a genuine change in the CB representative, the existing contract, even
if not expired, is not binding on the successor.
B. If there is a genuine change of employer, and employing industry remains
C. Fall River Dyeing v. NLRB. In this case, the new company (Fall River Dyeing)
purchased a textile dyeing and finishing plant and refused to recognize the
XI. Employee Alcohol and Drug Testing
A. NLRB has ruled that alcohol and drug testing of current employees is a
B. NLRB has ruled that management can unilaterally impose mandatory testing of
job applicants.
C. By 2003, about 25 million people in the United States were tested annually,
test employees.
D. Testing procedures:
1. Random
E. Employee attitudes toward drug testing
1. Employees favor “for cause” testing over random testing.
3. Union members who are already covered by some test program are less
supportive of testing than union members who are not covered.
F. Negotiation Issues
1. Valid testing procedure
2. On-the-job impairment
a. Arbitrators and courts often require a link between drug use and
job performance.
3. Refusal to be tested
a. Warehouse Distribution Centers. Employer had probable cause
4. Supervisor Training
XII. Social Media Usage
A. Suggested contract provisions for use of Facebook, Twitter and similar media
programs
2. Notice to workers warning them of such monitoring
4. The inclusion of an “on–off switch” on the tracking technology to protect
workers who take home equipment and are allowed to use it for personal
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XIII. Public Sector Security Issues
A. Privatization
B. School Vouchers
1. Proposals to give taxpayers support for sending children to private
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CHAPTER 9: CASE DISCUSSION
Case 9.1: DOVETAILING SENIORITY LISTS
1. The arbitrator explicitly stated that this decision established “supplementary rules of the
plant.” Do you think that is an appropriate way for a decision under a CBA to be made?
2. The two divisions operated out of the same facility before relocating to another state
approximately six years before this grievance. Presumably, some of the employees from
Division 2 could have been employees when the divisions were in the same location.
How do you think those individuals viewed the union’s grievance?
If the employee was a staunch union supporter, he or she would probably appreciate the
Case 9.2 SUBCONTRACTING
1. Do you agree with the arbitrator that the decision to subcontract need not be negotiated in
this case?
2. Why do you think the union fought this subcontract with only four union members left
with the company?
Case 9.3 DRUG TESTING
1. Do you think the U.S. Supreme Court decision in this case evidences a strong public
policy position either for or against drug testing in the workplace? Explain.
2. Explain why you agree or disagree with the arbitrator’s decision that the company did not
have just cause to dismiss the employee.
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CHAPTER 9: END CASE DISCUSSION
Case Study 9.1: Relocating Work Without Bargaining
Decision:
The Administrative Law Judge found that the company had violated the NLRA by unilaterally
relocating the bargaining unit work and ordered the company to move the work back to Michigan
until it was able to renegotiate with the union. However, the Administrative Law Judge believed
Schultz’s testimony that he had decided to move the company before the organizing campaign
began and ruled that the company was not guilty of discrimination. The union appealed that part
of the Judge’s ruling and the Appeal Court reversed it. The Appeal Court pointed out that there
was more than sufficient evidence to support the original intent of the company to be located in
Michigan and that it wasn’t until the union campaign that the company changed directions. The
Appeal Court found the statements that Schultz and the comptroller made during the
organizational campaign particularly compelling as indicators of their antiunion animus.
Questions for Discussion:
1. The union argues that the company’s efforts to borrow low interest bonds and to get tax
breaks in order to build and operate in Michigan supports their position that the
motivating factor in moving to Kentucky was antiunion animus. Do you agree?
2. The company’s defense, that Schultz made the decision to move the Company before the
organizing campaign got started, was supported only by his own testimony. If you were
told that the hearing officer who conducted the hearing and heard the testimony believed
Schultz, would it change your opinion of the defense? Why or why not?
3. Kentucky, like Michigan, is not a right-to-work state, so union organizing in a plant in
Kentucky is as likely as in Michigan. The company’s decision to move from Michigan
seems to have been both complicated and expensive. Do you think that the company
made such a decision mainly to avoid a unionized work force?
Case Study 9.2: Drug Testing
Decision:
The arbitrator found that the clearly stated drug policy limits the prohibition on the use of illegal
drugs to on-duty situations. Therefore, random testing must be limited to on-duty times. The
employee was reinstated. The union’s failure to object prior to this case did not establish a past
practice because the contract language is clear and unambiguous. However, the union’s lack of a
previous challenge means the employer acted in good faith and, therefore, the arbitrator did not
give the employee back pay.
Questions for Discussion
1. As the arbitrator, give your reasons for ruling in the union’s favor; in the employer’s
favor.
Union: The union negotiated a policy that did not prohibit behavior on the employee’s
private time. To allow random testing away from the job is an invasion of privacy and not
2. Argue for and against a decision by the employer in this case to insist on expanding the
drug program to include the prohibition of sale, possession, or use of illegal substances
on the employees’ own time?
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CHAPTER 9: REVIEW QUESTIONS
1. Why is seniority considered a critical issue?
Seniority governs the allocation of economic benefits and employment opportunities
What are the advantages and disadvantages of using a seniority system?
2. In layoffs involving K-12 teachers, should seniority or merit be the determining factor?
Explain why.
Seniority: Because it rewards loyalty, layoffs are not the fault of those involved,
3. Describe the different methods by which labor agreements might consider seniority in a
promotion decision.
4. Why is seniority often used in layoff and recall actions?
• Labor unions support the use of seniority because employee experience and skills
are critical to productivity;
• Employees require some protection against unreasonable managers as well as
Specifically, how do contract clauses provide for the consideration of seniority in such
decisions?
Layoffs
• Probationary or part-time employees are the first to be laid off.
• Depending upon the business, layoffs can be by job classification or business-
wide.
Recall.
• Job openings to be filled will be posted and made available to working
employees through the job bidding procedure.
• If no bids are received, laid-off employees will be recalled on the basis of either
business or job classification seniority, the same as when laid off.
5. Under what circumstances might the employer bypass a senior employee and promote a
junior employee when the labor agreement contains a seniority clause?
6. Why has management’s right to subcontract work been the subject of many grievances?
7. What are the key issues in an employee alcohol and drug testing program?
8. How does the successorship doctrine affect union security?
9. Should employers be able to limit employees’ use of social media? What are reasonable
limits?
Yes, computer equipment is the employer’s property and it should not be used for
personal activities especially on employer’s time.
No, there is nothing essentially different from communication by social media on a
Acceptable rules for use of social media:
● Description of acceptable use of social media tracking technology
10. When is a successor employer required to recognize a union from the previous
employer’s business?
1. Substantial continuity. The successor substantially continues the business
operations of the predecessor. Factors considered include the purchase of real property,
2. Appropriate bargaining unit. The bargaining unit(s) of employees must remain
3. Predecessor’s workers. The new employer hires a majority of its employees from
the predecessor.
11. Why has the use of employee teams been so controversial?
While a handful of U.S. companies utilized employee teams in the 1980s, by the 1990s,
thousands of firms had begun using special-project, self-managed, and problem-solving
What are the pros and cons?
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CHAPTER 9: YOU BE THE ARBITRATOR
Subcontracting Work or Union Busting?
1. As arbitrator, what would be your award and opinion in this arbitration?
The arbitrator denied the grievance. He pointed out that the union’s theory of the case
was premised upon an inherently illusory status quo ideal. The employer, however, was
in a collapsing sector of an economy, where business “as usual” would have guaranteed
disaster. The company, in changing much of its basic operation, had to rely on a blend of
Third Party Vendors (“TPVs”) with 24/7/365 capabilities and three large Regional
Distribution Centers serving the entire nation. Because the TPVs had much more
extensive equipment and much greater capacity for storage and delivery than the
The “on–call” system was substantially inferior to the 24/7/365 services the
employer obtained with TPVs. Likewise, there was insufficient infrastructure internally
to efficiently process the large PBXs, rendering the employees de facto unqualified to
perform fully all aspects of the necessary work given the severe infrastructure constraints.
The subcontracting relationships that the employer initiated and maintained with
2. Explain why the relevant provisions of the CBA as applied to the facts of this case dictate
the award.
3. What actions might the employer and/or the union have taken to avoid this conflict?