Week 11: Labor Relations

1. Week 11: Labor Relations Agenda for Today • Discuss the historical antecedents of current labor relations environment • Discuss goals of unions • Discuss reasons for the decline of unions • Understand different labor-management strategies • Discuss labor relations management process • Debate: Pros and Cons of Unionization

2. Historical Overview of Labor Relations • Little protection for labor rights before 1930s • First federal labor law: Railway Labor Act (RLA) 1926. Gave right to organize and bargain collectively only to railroad employees. In 1936, extended to airline employees • Norris-LaGuardia Act (1932): Extended right of workers to organize to other industries. Also restricted issuance of court injunections in labor disputes. • “National Labor Code”: Far reaching impact of 3 major pieces of legislation.

3. “National Labor Code” Acts • The Wagner Act of 1935 (or National Labor Relations Act) protected employees’ rights to form & join unions • Created the National labor Relations Board (NLRB) • Major function of NLRB is to prevent and remedy unlawful five unfair labor practices • The Taft-Hartley Act of 1947: limits some of the unions power and protects management rights • Identified six unfair union practices • Introduced right-to-work law(WI does not have it) • Made closed shops illegal; created Federal Mediation & Conciliation Service • The Landrum-Griffin Act of 1959: established to protect union members & their participation in union affairs

4. Labor Relations: State of Unions • Decline in private sector unions: • Percentage of private-sector workforce unionized declined from 24% (1975) to less than 14% in 2002 (Bureau of Labor Statistics) • Still over 70,000 local unions and 173 national unions: of these 110 belong to AFL-CIO • AFL-CIO represents about 80% of all unionized employees • Only 16% of Americans believe union leaders had a “high” or “very high” ethical standards. • But only 17% thought business leaders were honest or ethical.

5. Private-Sector Decline Due to: • Shift from Industrial to Service Economy • Service workers more difficult to organize • Hold pro-management views • Spread out across organizations • Foreign Competition and Technological Change • NAFTA(Manufacturing moved to other countries) • Layoffs and retirement especially in the last two years • Narrowing of union/nonunion wage gap in construction industries • Management interventions: • Improved management practices & union acceptance strategy • Preventative labor-relations practices (e.g., union avoidance strategies) • Union-busting

6. Public Sector Unions • Growth in Public-Sector Unions: • Approximately 40% of workers unionized • Comprise 45% of all union members • These employees have less bargaining power: • Government power is diffuse: no one person is in charge (e.g., pay increases approved by city council) • Right to strike is limited (varies by state and region: e.g., teachers can’t strike in CO and WI; can in PA) • Results in: • Mandated arbitration and mediation • Broader focus on quality of work life and safety issues (e.g., safety equipment, class size, academic freedom, job security) • Members vote: well-organized public-sector union powerful figure in local and national politics

7. Union Goals • Union Security: • Union Shop • All new employees must join (usually within 30 days of hire) • Right-to-work states (about 21) prohibit union shops • Agency Shop • Employee not required to join shop, but must pay dues (which can be spend only on collective bargaining activities, not on political campaign/lobbying) • Maintenance-of-Membership Shop • Not required to join, but those who do join must remain until contract expires or designated “escape period” occurs • Closed Shop: not permitted under the Taft-Hartley Act (construction industry an exception); illegal requirement that employee must be union member at time of hire (happens in practice in union hiring halls); • Open Shop: employees free to decide on membership

8. Union Goals (contd.) • Job Security • Seniority system • Subcontracting (ie., use laid-off workers rather than sub-contractors) • Retraining rights, advance notice, outplacement • Make-work activities • Improved Economic Conditions • Wages, benefits, pensions • Improved Working Conditions • Safety, shorter work weeks, less mandatory overtime, clean/healthy work environment • Social Actions (lobbying)

9. Labor Relations Strategy • Classified into two broad types: • Union Acceptance Strategy or Union Avoidance Strategy • Union Acceptance: Management believes labor unions are an ally and accepts collective bargaining as a foundation for workplace rules • Union Avoidance: Management does not believe in labor unions and tries to prevent its employees from unionizing through: • Union Suppression: Mgmt. uses hardball tactics to prevent union from organizing or to get rid of a union. • Union Substitution: Mgmt. becomes so responsive to employees’ needs that it removes incentives for unionization.

10. Managing the Labor Relations Process Daily HR activities carried out by Management and its representatives Objectives & goals affect (1) Workers desire collective representation (2) Unions begin organizing process (3) Collective negotiations lead to a contract (4) Contract is administered May result in Objectives & goals affect Labor and its representatives Laws and Regulations

11. Pro-Labor Views: Pro-Management Views: Labor Relations Debate!