Understanding Labor-Understanding Labor-Management RelationsManagement Relations

Chapter 11

Chapter 11 Learning GoalsChapter 11 Learning Goals

1.1. WWhat is the historical development of American labor unions?

2.2. WWhat role did federal law play in the development of the union-management relationship?

3.3. WWhat is the union organizing process?4.4. WWhat is the collective bargaining process, and

what key issues are included in the union contract?

Chapter 11 Learning Goals Chapter 11 Learning Goals (cont’d.)(cont’d.)

5.5. HHow do employees file a grievance?6.6. WWhat economic tactics do unions and

employers use in labor-management conflicts?

7.7. WWhat trends will affect American workers and labor-management relations?

Learning Goal 1Learning Goal 1• WWhat is the historical development of American labor

unions?– Knights of Labor

• Failed to improve the lot of workers– American Federation of Labor (AFL)

• Formed in 1881; run by Samuel Gompers• Addressed matters such as union rights, better wages, hours, and

working conditions for members– Congress of Industrial Organizations (CIO)

• Formed in 1935 by John L. Lewis and the United Mine Workers of America

– AFL-CIO merged in 1955• U.S. labor movement today consists of AFL-CIO, national and

international unions, and local unions

Labor UnionLabor Union::An organization that represents workers in dealing with management over disputes involving wages, hours, & working conditions

Collective bargainingCollective bargaining::The process of negotiating labor agreements that provide for compensation & working arrangements mutually acceptable to the union & to management

Emergence of UnionsEmergence of Unions& Collective Bargaining& Collective Bargaining

1.1. American Federation of Labor (AFL)founded 1881; craft unions

2. 2. Congress of Industrial Organizations (CIO)founded 1935; industrial unions

3. 3. AFL-CIO joined in 1955

Labor Movement TodayLabor Movement Today

• Craft unions• Industrial unions• Conglomerate unions• Local unions• National & International unions

– Public Services International is a federation of 525 public sector trade unions from 141 countries; it represents 20 million workers (Source: Public Services International, www.world-psi.org)

Learning Goal 2Learning Goal 2• WWhat role did federal law play in the development of the

union-management relationship?– Norris-La Guardia Act, 1932

• Banned employers’ use of injunctions • Greatly limited yellow-dog contracts• Ended the use of the courts to settle labor disputes

– Wagner Act, 1935• Encouraged the formation of unions• Defined unfair labor practices and created the NLRB

– Taft-Hartley Act, 1947• Placed some constraints on labor union organizing activities

– Landrum-Griffin Act, 1959• Dealt with the internal affairs of unions

Legal Environment of UnionsLegal Environment of Unions

• Norris-La Guardia Act– Anti-Injunction - 1932

• Wagner Act– National Labor Relations - 1935

• Taft-Hartley Act– Labor-Management Relations - 1937

• Landrum-Griffin Act– Labor-Management Reporting & Disclosure - 1959

Learning Goal 3Learning Goal 3

• WWhat is the union organizing process?– Organizing drive that can begin:

• Inside, with a small group of existing employees• Outside, with an established union that targets the employer

– Union obtains signed authorization cards• Needs cards from 30% of firm’s employees

– NLRB conducts a union certification election• Majority vote needed to certify the union as the exclusive

bargaining agent– Union and employer can begin collective bargaining

and have one year to reach an agreement

Union OrganizingUnion Organizing

Two Ways Members Join:Two Ways Members Join:1. Unionized employer hires new workers

who choose to, or must, join a union2. Employees of a non-unionized employer

form or join a union• The average local union spends only 3%3%

of its budget on recruiting & organizing (Source: Fortune, Sept. 28, 1998, p. 180.)

Union Organizing Process & ElectionUnion Organizing Process & Election

1. Union contact with employees

2. Authorization card campaign

3. Petition for certification election

4. NLRB determination of bargaining unit

5. Employer and union preelection campaigns

6. Election

7a. Certification of union

7b. Rejection of union

Learning Goal 4Learning Goal 4• WWhat is the collective bargaining process, and what key

issues are included in the union contract?– Collective bargaining processCollective bargaining process

• Both union and management negotiators prepare a bargaining proposal

• The two sides meet and exchange demands and ideas• Compromises and concessions lead to tentative agreement• Top management approves or disapproves agreement• Union members vote to approve or reject contract• Key issues included are:

– Union and job security– Management-rights clause– Wage increases and fringe benefit improvements

Negotiating Union ContractsNegotiating Union ContractsEmployer bargaining preparation Union bargaining preparation

Exchange of initial demands & proposals

Bargaining agenda

Bargaining compromise, concession, agreement

Top management

approval

Vote of union members

Ratification

Rejection & strike

Resumption of bargaining

Transparency 11-10

Qualities of Good NegotiatorsQualities of Good Negotiators

1.1. They listen

2. 2. They are creative & flexible

3. 3. They are willing to walk

4. 4. They don’t worry about being liked

5. 5. They can handle multiple tasks

6.6. They love to negotiateSource: HR News, Nov. 1999, p. 15.

Issues Included in Union ContractsIssues Included in Union Contracts1.1. Union security2. 2. Management rights3. 3. Wages

African-American & Latina female union members earned over 40% more than non-union counterparts (Source: AFL-CIO/US Bureau of Labor Statistics, 1998)

4. 4. Job benefitsThe percentage of workers with health coverage was

84% for union members and 74% for nonunion members (Source: AFL-CIO/US Bureau of Labor Statistics, 1998)

5. 5. Job security

Learning Goal 5Learning Goal 5

• HHow do employees file a grievance?– Grievance procedureGrievance procedure

• Employee files a grievance– Oral and/or written presentation to the supervisor– May involve a union steward as representative of grievant

• Meeting of employee and one or more union officials• Meeting of the appropriate supervisor and one or more

management officials• If grievance is not resolved after meetings, union or

management can request that an arbitrator, or neutral third party, hear and decide the grievance

GrievanceGrievance::A formal complaint, filed by an employee or by the union, charging that management has violated the contract

Arbitration:Arbitration:The process of settling a labor-management dispute by having a third party make a binding decision

Typical Grievance ProcedureTypical Grievance Procedure

Step 1:Oral Presentation

Step 2:Grievance in Writing

Step 3:Higher-level grievance

meeting

Step 4:Arbitration

Employee with grievance

Front-linesupervisor

Union steward

Learning Goal 6Learning Goal 6• WWhat economic tactics do unions and employers use

in labor-management conflicts?– Union tacticsUnion tactics

• Strike– Union members stop working– Union members may picket or carry signs to alert public to the dispute

• Product boycott– Union attempts to persuade consumers not to purchase products

produced by firm involved in dispute

– Employer tacticsEmployer tactics• Lockout and strike replacements

– Employer closes the plant and prevents workers from working– Hires temporary, nonunion workers as strike replacements

Managing Labor-Managing Labor-Management ConflictManagement Conflict

Union tactics:Union tactics:• strike• boycott• picketing• corporate

campaign

Employer tactics:Employer tactics:• lockout• strike

replacements• mutual-aid pact• shift production

Learning Goal 7Learning Goal 7

• WWhat trends will affect American workers and labor-management relations?– Decline in union members will cease– Growth in membership that began in 1998 will continue– Union demands will stimulate new membership

• Wage increases• Improvements in fringe benefits

– Shortages of skilled workers will persist into the 21st century

• Unions and employers will need to build apprenticeship programs for careers in skilled crafts

Trends Affecting Labor-ManagementTrends Affecting Labor-Management

Overall decline in union membership Shortage of skilled construction

workers

Decline in Union MembershipDecline in Union Membership

0

5

10

15

20

25

3019

77

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

Perc

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that

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Source: Fortune, Sept. 28, 1998, p. 180.