Chapter Thirteen

PRIDE HUGHES KAPOOR INTRODUCTION TO BUSINESS ELEVENTH EDITION Chapter Thirteen Enhancing Union-Management Relations 13 | 1

Learning Objectives • Explain how and why labor unions came into being. • Discuss the sources of unions’ negotiating power and trends in union membership. • Identify the main focus of several major pieces of labor-management legislation. • Enumerate the steps involved in forming a union and show how the National Labor Relations Board is involved in the process. 13 | 2

Learning Objectives (cont’d) • Describe the basic elements in the collective-bargaining process. • Identify the major issues covered in a union-management contract. • Explain the primary bargaining tools available to unions and management. 13 | 3

Union-Management Relations • Labor union • An organization of workers acting together to negotiate their wages and working conditions with employers • Union-management (labor) relations • The dealings between labor union and business management both in the bargaining process and beyond it 13 | 4

The Historical Development of Unions • Early history • Craft union • Organization of skilled workers in a single craft or trade • Limited to a single city; lasted for a short time • Knights of Labor • Formed as a secret society • Goals: eliminate depersonalization of worker resulting from mass production; improve moral standards of employees and society • Lost public favor after Haymarket riot of 1886 13 | 5

The Historical Development of Unions (cont’d) • Early history (cont’d) • American Federation of Labor (AFL) • Samuel Gompers’ goal: Improve members’ living standards • Used the strike, a temporary work stoppage by employees as an effective labor weapon to add force to their demands • Industrial Workers of the World (IWW) • A radical movement to overthrow capitalism 13 | 6

The Historical Development of Unions (cont’d) • Evolution of contemporary labor organizations • Industrial union • An organization of both skilled and unskilled workers in a single industry • Congress of Industrial Organizations (CIO) • Formed by industrial unions that withdrew from the AFL • AFL-CIO • Both labor groups agreed to merge in 1955 to gain strength and stop fighting each other over the right to represent particular groups of employees 13 | 7

Historical Overview of Unions Figure 13.1 Sources:U.S. Bureau of Labor Statistics, Union Membership, www.bls.gov, accessed April 29, 2010. 13 | 8

Organized Labor Today • Union membership • Approx. 12.3% of the nation’s workers belong to unions • AFL-CIO • The largest union with approx 13.5 million members • Includes actors, barbers, construction workers, carpenters, retail clerks, musicians, teachers, postal workers, painters, steel and iron workers, firefighters, bricklayers, newspaper reporters 13 | 9

Organized Labor Today (cont’d) • Union membership (cont’d) • Teamsters • Independent labor organization with approx 1.4 million members • United Steelworkers (USW) • Represents employees in basic resource industries such as paper and forestry products, steel, aluminum, tire and rubber, mining, glass, chemicals, and petroleum with over 1 million members • United Auto Workers (UAW) • Represents employees in the automobile industry with approx 640,000 members • Part of AFL-CIO 13 | 10

Where Are the Union Members? Source: Bureau of Labor Statistics; USA Today, February 25, 2010, p. 1A. 13 | 11

Organized Labor Today (cont’d) • Membership trends • Union membership has declined steadily since 1980 due to changing business trends such as • Heavily unionized industries have been decreasing or not growing as fast as nonunionized industries • Firms have moved from unionized areas (Northeast, Great Lakes region) to less unionized areas (Southeast, Southwest) • The largest employment growth is in service industries, which are typically not unionized • Some companies are moving manufacturing to other (less unionized) countries • Management is providing benefits that reduce employees’ need for unionization 13 | 12

Organized Labor Today (cont’d) • Union-management partnerships • The adversarial nature of past union-management relations has given way to limited cooperative partnerships between unions and companies • Companies gain increased productivity, improved quality, and reduced costs • Workers gain increased response to their needs, more decision-making opportunities, less supervision, more responsibility, and increased job security • Unions gain credibility, strength, and increased membership 13 | 13

Labor-Management Legislation • Norris-LaGuardia Act (1932) • Made it difficult for businesses to obtain court orders banning strikes, picketing, or union membership drives • National Labor Relations Act / Wagner Act (1935) • Established rights of workers to organize, be represented by a union, and to negotiate with management • Forbids unfair labor practices, particularly those related to unionization • Established the National Labor Relations Board (NLRB) to enforce the act • Overseeing union representation elections • Investigating complaints filed under the provisions of the act 13 | 14

Labor-Management Legislation (cont’d) • Fair Labor Standards Act (1938) • Set a minimum wage • Requires overtime rates for work in excess of 40 hours a week • Prohibits the use of child labor • Labor-Management Relations Act / Taft-Hartley Act (1947) • Balances the union power and management authority • Defines certain union activities as unfair labor practices • Gives management more rights during union organizing campaigns • Gives the president power to obtain a temporary injunction to stop strikes that threaten national health and safety 13 | 15

Labor-Management Legislation (cont’d) • Landrum-Griffin Act (1959) • Regulates the internal functioning of unions to preserve their integrity and democratic nature 13 | 16

The Unionization Process • Why some employees join unions • As a way to combat alienation and loss of personal identity from dull and repetitive jobs • Due to the perception that union membership increases job security • As a way of expressing dissatisfaction with one or more elements of the job • Due to personal background (family history of union membership) • As a requirement to keep a job under provisions of the labor contract between the union and the firm 13 | 17

Steps in Forming a Union Figure 13.2 13 | 18

Sample Authorization Card Figure 13.3 13 | 19

Steps in Forming a Union (cont’d) • Complicating factors • Bargaining unit • The specific group of employees represented by a union must be defined • Jurisdiction • The right of a particular union to organize particular groups of workers • When jurisdictions overlap or are unclear, employees may decide who will represent them 13 | 20

Steps in Forming a Union (cont’d) • The Role of the NLRB • Overseeing organizing campaign • Conducting the election • Certifying the results • Monitoring questionable behavior 13 | 21

Collective Bargaining • Process of negotiating a labor contract with management • First contract • Pre-negotiation preparations by both parties • Exchange of initial contract demands by union and company • Bargaining over issues until agreement is reached (or strike) • Membership vote to ratify (approve) the agreement • If ratified, the agreement is signed and becomes a legally binding agreement • If not ratified, there is more negotiation • Later contracts • Pre-negotiation preparations are more intense • Each side may take a harder line on the issues in negotiations • Contract expiration date produces tension 13 | 22

Union-Management Contract Issues • Employee pay • Forms of pay • Direct compensation: wage or salary and benefits • Deferred compensation: pension and retirement • Magnitude of pay • Parity with local and national industry pay levels • Real wage protection through cost-of-living clauses • Financial condition of employer • Cost-sharing for benefits 13 | 23

Union-Management Contract Issues (cont’d) • Employee pay (cont’d) • Pay determinants • Management seeks to tie wages to each employee’s productivity • Unions feel this creates unnecessary competition and usually suggest pay according to seniority • Management seeks to constrain benefits to only some employees • Unions want equal application of benefits 13 | 24

Union-Management Contract Issues (cont’d) • Working hours • Overtime • Time worked in excess of forty hours in one week (under some union contracts, time worked in excess of eight hours in a single day) • Pay is at least one and a half times the normal hourly wage • Special hourly rates for weekend or holiday work • The right of employees to refuse overtime • Premium pay for workers on less desirable shifts • Starting times • Length of meal periods and work breaks 13 | 25

Union-Management Contract Issues (cont’d) • Security • For the individual • Job security: Protection against the loss of employment • Seniority • For the union • Protection of the union’s position as employees’ bargaining agent • Arises directly from its membership • Closed shop: Workers must be union members before they are hired; outlawed by the Taft-Hartley Act • Union shop: New employees must join the union after a probationary period • Agency shop: Employees can choose not to join the union but must pay dues • Maintenance shop: Employees who join the union must remain members as long as they are employed by the firm 13 | 26

Union-Management Contract Issues (cont’d) • Management rights • The firm wants to control whom it hires, how work is scheduled, how discipline is handled • Unions seek to control these matters • Some union executives have been given seats on corporate boards of directors 13 | 27

Steps in Resolving a Grievance Figure 13.4 13 | 28

Union and Management Negotiating Tools • Strikes • Picketing • Marching back and forth in front of a place of employment with signs informing the public that a strike is in progress • Employees hope • to arouse public sympathy and encourage the public not to patronize the firm • Non-striking employees will honor the picket line and not report to work • members of other unions will not cross the picket line • Wildcat strike • A strike not approved by the strikers’ union 13 | 29

Union and Management Negotiating Tools (cont’d) • Slowdowns and boycotts • Slowdown • Workers report to their jobs but work at a slower pace than normal • Boycott • A refusal to do business with a particular firm • Primary boycott: aimed at the employer directly involved in the dispute • Secondary boycott: aimed at a firm doing business with an employer involved in a labor dispute; prohibited by the Taft-Hartley Act 13 | 30

Union and Management Negotiating Tools (cont’d) • Lockouts and strikebreakers • Lockout • A firm’s refusal to allow employees to enter the workplace • Strikebreaker • A nonunion employee who performs the job of a striking union member • Mediation and arbitration • Mediation • The use of a neutral third party to assist management and the union during their negotiations • Arbitration • The use of a neutral third party to decide an issue when the two sides cannot agree 13 | 31

Chapter Thirteen