CHAPTER 14 Understanding Unionization and Collective Bargaining
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Chapter 14
UNDERSTANDING UNIONIZATION AND COLLECTIVE
BARGAINING
Opening Case: Managing Human Resources at United Parcel
Service
United Parcel Service (UPS) has 410,000 employees (60,000 of whom are
outside the United States) who are represented by the Teamsters union. UPS
employees are highly paid, they tend to stay; so the company benefits by having
relatively low turnover costs. Management and union have worked together in a
productive, collaborative relationship for almost 100 years.
I. THE STRATEGIC IMPORTANCE OF UNIONIZATION AND COLLECTIVE
BARGAINING
Unionization is the effort by employees and outside agencies (unions or
associations) to act as a single unit when dealing with management over
issues relating to their work. When recognized by the National Labor
Relations Board (NLRB), a union has the legal authority not only to negotiate
with the employer on behalf of employees to improve wages, hours, and
conditions of employment but also to administer the ensuing agreement.
A. Flexibility
Managers tend to resist unionization because they perceive they will have
less flexibility once a collective bargaining contract is in place. And when
managers have less flexibility, it is harder for the company to make
substantial changes quickly because managers have less decision
freedom and employees have a greater voice.
1. Manager’s Decision Freedom
A collective bargaining agreement reduces managers’ decision
2. Employee Voice
Employee voice can be achieved in various ways. These include
grievance procedures, joint management–union committees and task
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B. Costs
Unionized employees tend to have higher salaries and substantially more
benefits than nonunionized employees. Thus, unionized firms tend to have
C. Profitability
First, work practices can be less efficient after unionization. For example,
rigid work rules may limit productivity. Second, unions have historically
II. UNIONIZATION AND COLLECTIVE BARGAINING WITHIN THE
INTEGRATED HRM SYSTEM
Exhibit 14.1 illustrates the general process of unionization and collective
bargaining and shows its relationship to other elements of the HRM system. A
critical element in the system is employees’ attraction to unionization. In fact,
this is the key factor in whether or not employees attempt and, if so, ultimately
succeed in unionizing. Other HR activities, the organizational environment,
and the external environment all play a part in employees’ attraction to
unionization.
A. Other HR Activities
As the story of UPS and Exhibit 14.1 illustrate, unionizing and collective
bargaining activities often involve other HRM practices.
Other concerns that are important to both union leaders and members are
B. The Organizational Environment
The organizational environment affects employees’ attraction to
unionization. The business strategy affects how employees are paid and
III. THE EXTERNAL ENVIRONMENT
A. Unions
The external environment has considerable influence on unionization and
collective bargaining. Here, we discuss unions, laws and regulations, the
political landscape, and labor markets.
1. A Brief History of Unions
The beginning of the labor union movement in the United States can
be traced back to the successful attempt of journeymen printers to win
2. Decline in Membership
Union membership in the United States has declined steadily from its
high of 35.5 percent of the workforce in 1945. In the mid-1950s, 35
percent of the workforce was still unionized. But in 1970, the
3. Local Unions
Most locals elect a president, a secretary–treasurer, and perhaps one
or two other officers from the membership. The larger locals hire a
business representative, who is a full-time employee handling worker
Teaching Note: In the absence of a union, how do employees express their
“grievances?”
4. National Unions
National unions organize, charter, and control member locals.
National unions develop the general policies and procedures by which
locals operate, and they help locals in areas such as collective
bargaining. National unions provide clout for locals because they
control a large number of employees and can influence large
organizations through national strikes or slowdown activities. Currently,
the largest national unions are:
1. National Education Association (NEA), 3.2 million members.
5. Federation of Unions
The AFL-CIO is the largest federation of national unions. With about 12
million union members from more than 55 national unions, it
B. Laws and Regulations
Laws and regulations dramatically affect the union movement. In the
twentieth century, several laws were passed that provided legitimacy,
structure, and governance to unions. Some of the most significant laws
were the National Labor Relations Act of 1935, the Labor Management
Relations Act of 1947, the Labor Management Reporting and Disclosure
Act of 1959, and Title VII of the Civil Service Reform Act of 1978.
1. National Labor Relations Act of 1935
The NLRA has three major components. First, the NLRA specifies and
bans five employer actions that had frequently been used to stop
2. Labor Management Relations Act of 1947
Commonly known as the Taft-Hartley Act, the Labor Management
Relations Act of 1947 is a pro-employer act that constrains the
practices of unions much as the Wagner Act does the practices of
3. Labor Management Reporting and Disclosure Act of 1959
Commonly known as the Landrum-Griffin Act, the Labor Management
2. Reporting requirements for unions.
4. Safeguards to protect union funds and assets.
4. Title VII of the Civil Service Reform Act of 1978
The first statute allowing federal employees to organize was Title VII of
the Civil Service Reform Act of 1978. The act expanded on past
presidential orders regarding the terms of employment that could be
C. Political Landscape
Although labor maintains a strong lobbying force in Washington, D.C. it is
also involved in political action committees at the state and local levels.
D. Labor Markets
States with relatively high levels of unionization include Alaska, Hawaii,
Michigan, and New York; states with relatively low levels of unionization
include Arizona, Arkansas, North Carolina, and South Carolina.
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IV. THE EXTENDED HR TRIAD
Because unions also have roles and responsibilities, in this chapter we have
V. ATTRACTION TO UNIONIZATION
In general, however, four factors strongly influence employees who decide to
join a union: dissatisfaction, lack of power, management efforts, and union
instrumentality.
A. Dissatisfaction
When an individual takes a job, certain conditions of employment (wages,
hours, and type of work) are specified in the employment contract. In
B. Lack of Power
The jobholder’s amount of power is determined by how difficult it is to
replace the person and how important or critical the job is to the overall
C. Management Efforts
Companies that treat employees fairly (e.g., employee-related decisions
are consistent and based on reasonable justifications), involve employees
(e.g., giving them voice), and have conflict resolution procedures in place
(e.g., grievance procedures) are more likely to have employees who are
satisfied and do not perceive that they are powerless. Because the
employer is already behaving similarly to a unionized firm, employees may
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D. Union Instrumentality
Beliefs about unions in general and about the particular union to be voted
benefits.
VI. THE UNION CERTIFICATION PROCESS
A major function of the NLRB is to conduct the process in which a union is
chosen to represent employees. This is accomplished through a certification
election to determine whether the majority of employees want a particular
union to represent them. The process by which a single union is selected to
represent all employees in a bargaining unit is crucial to the American system
of collective bargaining. If a majority of those voting opt for union
representation, all employees are bound by that choice, and the employer is
obligated to recognize and bargain with the chosen union.
A. Soliciting Employee Support
In the campaign to solicit employee support, unions traditionally attempt to
contact the employees, obtain a sufficient number of authorization cards,
and request an election from the NLRB.
1. Establishing Contact Between the Union and Employees
U.S. workers are generally apathetic toward unions, however, and are
not likely to initiate contact with a union until their relationship with their
2. Authorization Cards and Request For Elections
Once contact has been made, the union begins the campaign to collect
sufficient authorization cards, or signatures of employees interested in
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14.8. Union representatives have argued that employers frequently
ignore the law prohibiting interference because the consequences of
interfering are minimal and, by doing so, they can effectively
discourage unionization.
B. Determination of the Bargaining Unit
After a union gathers enough signatures to petition for an election, the
C. Preelection Campaign
After the bargaining unit has been determined, both union and employer
embark on a preelection campaign. Unions claim to provide a strong voice
D. Election, Certification, and Decertification
Generally, elections are part of the process of determining whether unions
will win the right to represent workers. However, elections can also
determine whether unions will retain the right to represent employees.
1. Election and Certification
The NLRB conducts the certification election, which determines
2. Election and Decertification
The NLRB also conducts decertification elections that determine
whether a union is removed as the legal representative of the
CHAPTER 14 Understanding Unionization and Collective Bargaining
employees in the organization.
VII. THE COLLECTIVE BARGAINING PROCESS
Once a union is elected to represent the employees of the bargaining unit, the
collective bargaining process begins. This process involves employees,
management, and the union—with the government influencing interaction
among the three—and each group has different goals.
Teaching Note: The key to bargaining is the duty from both parties to
bargain in good faith; this is required by the NLRA. For example, an
employer cannot refuse to bargain with the employees’ representatives.
Good faith is established by:
A. Types of Bargaining
In this section, we describe in more detail five types of bargaining that can
occur during contract negotiations. The types of bargaining discussed are
distributive bargaining, integrative bargaining, concessionary bargaining,
continuous bargaining, and intraorganizational bargaining.
1. Distributive Bargaining
Distributive bargaining takes place when the parties are in conflict over
2. Integrative Bargaining
When more than one issue needs to be resolved, integrative
3. Concessionary Bargaining
Distributive and integrative bargaining are the primary approaches to
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4. Continuous Bargaining
With the rapid rate of change in the global and domestic environments,
B. Negotiating the Agreement
Once a union is certified as the representative of a bargaining unit, it
becomes the only party that can negotiate an agreement with the
employer for all members of that work unit—whether the workers are
union members or not.
1. Negotiating Committees
2. The Negotiating Structure
Most contracts are negotiated by a single union and a single employer.
In some situations, however, different arrangements can be agreed on.
3. Preparation for Bargaining
To prepare for union negotiations, management needs to complete
four tasks:
CHAPTER 14 Understanding Unionization and Collective Bargaining
4. Factors Affecting Bargaining
The frame (positive or negative) of negotiators can make the difference
C. Issues for Negotiation
The Labor Management Relations Act specifies the issues that can be
discussed in collective bargaining sessions and establishes three
categories of issues for negotiation. These categories are mandatory,
permissive, and prohibited. Mandatory issues are those that employers
and employee representatives (unions) are obligated to meet and discuss;
these are, according to the act, “wages, hours, and other terms and
conditions of employment.” Permissive issues are those that are not
specifically related to the nature of the job but still of concern to both
parties. Prohibited issues concern illegal or outlawed activities.
1. Total Compensation
2. Benefits and Services
Some commonly negotiated forms of benefits and services are
pensions, paid vacations, retraining, paid holidays, sick leave, job
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3. Hours of Employment
Organizations are required by federal labor law to pay overtime for
4. Institutional Issues
Institutional issues that affect the security and success of both parties
5. Administrative Issues
Administrative issues concern the treatment of employees at work.
D. Conflicts and Their Resolution
Although the desired outcome of collective bargaining is agreement on the
conditions of employment, on many occasions negotiators are unable to
reach such an agreement at the bargaining table. In these situations,
several alternatives are used to break the deadlock. The most dramatic
response is a strike or lockout. Indirect responses are also used, however,
and third-party interventions, such as mediation and arbitration, are
common as well.
1. Strikes
A strike occurs when the union is unable to get management to agree
to a demand it believes is critical and tells employees to refuse to work
at the company. Employers usually attempt to continue operations