Copyright © 2003 by South-Western. All Rights Reserved. Text by Profs. Gene Boone & David Kurtz Multimedia Presentation by Prof. Milton Pressley The University of New Orleans CHAPTER ELEVEN LABOR-MANAGEMENT RELATIONS
Copyright © 2003 by South-Western. All Rights Reserved. Summarize the history of labor unions and list their primary goals Summarize the history of labor unions and list their primary goals Describe the structure of organized labor Describe the structure of organized labor Identify the major federal laws that affect labor unions and explain the key provisions of each law Identify the major federal laws that affect labor unions and explain the key provisions of each law Explain the process of forming unions, the way they achieve goals through collective bargaining, and the issues typically addressed in union contracts Explain the process of forming unions, the way they achieve goals through collective bargaining, and the issues typically addressed in union contracts Describe the roles played by mediators and arbitrators in labor negotiations Describe the roles played by mediators and arbitrators in labor negotiations LEARNING GOALS
Copyright © 2003 by South-Western. All Rights Reserved. Identify the steps in the union grievance process Identify the steps in the union grievance process Outline the tactics of labor and management in conflicts between them Outline the tactics of labor and management in conflicts between them Describe how unions and employers are developing partner relationships Describe how unions and employers are developing partner relationships Discuss employee-employer relationships in nonunion firms Discuss employee-employer relationships in nonunion firms Explain the challenges facing labor and the strategies currently being used to rebuild union membership Explain the challenges facing labor and the strategies currently being used to rebuild union membership LEARNING GOALS
Copyright © 2003 by South-Western. All Rights Reserved. © PhotoDisc CHAPTER OVERVIEW Explore reasons for the emergence of labor unions Explore reasons for the emergence of labor unions Look at the history of labor union operations in U.S. Look at the history of labor union operations in U.S. Review legislation that affects labor-management relations Review legislation that affects labor-management relations Discuss the process of collective bargaining Discuss the process of collective bargaining Look at the future of labor- management relations Look at the future of labor- management relations
Copyright © 2003 by South-Western. All Rights Reserved. EMERGENCE OF LABOR UNIONS Craft worker organizations operated in Europe and Asia for hundreds of years Craft worker organizations operated in Europe and Asia for hundreds of years Nongovernment union membership has declined significantly in recent years in industrialized nations Nongovernment union membership has declined significantly in recent years in industrialized nations Union membership has grown considerably in some developing nations Union membership has grown considerably in some developing nations © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Need for Labor Unions Focus on efficiency created some hardships for workers Focus on efficiency created some hardships for workers Specialization made workers dependent on factories for their livelihoods Specialization made workers dependent on factories for their livelihoods Working conditions were typically exhausting – even dangerous – for low wages Working conditions were typically exhausting – even dangerous – for low wages © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.1 Union and Nonunion Wages and Benefits
Copyright © 2003 by South-Western. All Rights Reserved. History of U.S. Labor Unions Began before the Declaration of Independence Began before the Declaration of Independence Early unions were loose-knit, local organizations Early unions were loose-knit, local organizations Served primarily as friendship groups or benevolent societies Served primarily as friendship groups or benevolent societies Were typically short-lived Were typically short-lived Gradually grew strong enough to get results to their demands Gradually grew strong enough to get results to their demands © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. History of U.S. Labor Unions Labor union: group of workers who have banded together to achieve common goals in the important areas of wages, hours, and working conditions Labor union: group of workers who have banded together to achieve common goals in the important areas of wages, hours, and working conditions American Federation of Labor (AFL): organization that united individual craft unions under a common affiliation in 1886 American Federation of Labor (AFL): organization that united individual craft unions under a common affiliation in 1886 By 1920, three out of four organized workers were AFL members By 1920, three out of four organized workers were AFL members © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. History of U.S. Labor Unions Congress of Industrial Organizations (CIO): grouping of industrial unions Congress of Industrial Organizations (CIO): grouping of industrial unions Union membership peaked during the 1940s and 1950s Union membership peaked during the 1940s and 1950s © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. History of U.S. Labor Unions Union membership as a percentage of the workforce steadily declined during the second half of the last century except among government employees Union membership as a percentage of the workforce steadily declined during the second half of the last century except among government employees Two of every five government workers belong to unions Two of every five government workers belong to unions © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.2 The World’s Tallest Roller Coaster: Union-Made at Cedar Point Amusement Park, Sandusky, OH
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.3 Percentage of U.S. Workers in Unions, by Industry
Copyright © 2003 by South-Western. All Rights Reserved. LOCAL, NATIONAL, AND INTERNATIONAL UNIONS National union: union organization made up of many local unions National union: union organization made up of many local unions Local union: organization operating as a branch of a national union, representing union members in a given geographic area Local union: organization operating as a branch of a national union, representing union members in a given geographic area © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. LOCAL, NATIONAL, AND INTERNATIONAL UNIONS International union: union with members outside of the U.S. International union: union with members outside of the U.S. Federation: grouping of many national and international unions to serve mediation and political functions Federation: grouping of many national and international unions to serve mediation and political functions © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.4 Federal Labor Laws LABOR LEGISLATION
Copyright © 2003 by South-Western. All Rights Reserved. Union Security Provisions Closed shop: employment policy, illegal in the U.S., requiring a firm to hire only current union members Closed shop: employment policy, illegal in the U.S., requiring a firm to hire only current union members Union shop: employment policy requiring nonunion workers to join a union that represents a firm’s workers within a specified period after being hired Union shop: employment policy requiring nonunion workers to join a union that represents a firm’s workers within a specified period after being hired © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Union Security Provisions Agency shop: employment policy that allowing workers to reject union membership but requiring them to pay fees equal to union dues Agency shop: employment policy that allowing workers to reject union membership but requiring them to pay fees equal to union dues Open shop: employment policy making union membership and dues voluntary for all workers Open shop: employment policy making union membership and dues voluntary for all workers Right-to-work laws: prohibit union shops and outlaw compulsory union membership Right-to-work laws: prohibit union shops and outlaw compulsory union membership © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.5 States with Right-to-Work Laws
Copyright © 2003 by South-Western. All Rights Reserved. Unfair Union Practices Taft- Hartly Act outlawed unfair practices like: Taft- Hartly Act outlawed unfair practices like: Refusal to bargain with employer Refusal to bargain with employer Striking without 60 days notice Striking without 60 days notice Most secondary boycotts Most secondary boycotts Featherbedding (demanding pay for workers who do not work) Featherbedding (demanding pay for workers who do not work) Boycott: effort to prevent people from purchasing a firm’s goods or services Boycott: effort to prevent people from purchasing a firm’s goods or services © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. THE COLLECTIVE BARGAINING PROCESS Collective bargaining: negotiation between management and union representatives concerning wages and working conditions for an entire group of workers Collective bargaining: negotiation between management and union representatives concerning wages and working conditions for an entire group of workers © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. How Employee’s Form a Union Must conduct an organizing drive to collect the signatures of at least 30 percent of employees on special authorization cards Must conduct an organizing drive to collect the signatures of at least 30 percent of employees on special authorization cards Union then petitions the National Labor Relations Board (NLRB) for an election Union then petitions the National Labor Relations Board (NLRB) for an election © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.6 Steps in Starting a Union
Copyright © 2003 by South-Western. All Rights Reserved. Bargaining Patterns Vary for different industries and different occupational categories Vary for different industries and different occupational categories Most collective bargaining involves single-plant, single- employer agreements Most collective bargaining involves single-plant, single- employer agreements A multiplant, single-employer agreement applies to all plant operated by an employer A multiplant, single-employer agreement applies to all plant operated by an employer © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Bargaining Patterns Coalition bargaining involves negotiations between a coalition of several unions that represent the employees of one company Coalition bargaining involves negotiations between a coalition of several unions that represent the employees of one company In industrywide bargaining, a single, national union engages in collective bargaining with several employers in a particular industry In industrywide bargaining, a single, national union engages in collective bargaining with several employers in a particular industry © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Bargaining Zone Issues covered in a bargaining agreements include wages, work hours, benefits, union activities and responsibilities, grievance procedures and arbitration, and employee rights and seniority Issues covered in a bargaining agreements include wages, work hours, benefits, union activities and responsibilities, grievance procedures and arbitration, and employee rights and seniority Bargaining zone: range of collective bargaining between conditions that induce a union to strike and those that induce management to close the plant Bargaining zone: range of collective bargaining between conditions that induce a union to strike and those that induce management to close the plant © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Union Contracts Typically cover a 2 or 3 year period Typically cover a 2 or 3 year period Once ratified by the union membership, contract becomes a legally binding agreement that covers all labor-management relations during the period specified Once ratified by the union membership, contract becomes a legally binding agreement that covers all labor-management relations during the period specified © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.7 Typical Provisions in a Union Contract
Copyright © 2003 by South-Western. All Rights Reserved. Wage Adjustments in Labor Contract Contracts often provide for wage adjustments during the life of the contract Contracts often provide for wage adjustments during the life of the contract Cost-of-living-adjustment (COLA) clauses (escalator clauses): designed to protect the real incomes of workers during periods of inflation by increasing wages in proportion to increases in the CPI Cost-of-living-adjustment (COLA) clauses (escalator clauses): designed to protect the real incomes of workers during periods of inflation by increasing wages in proportion to increases in the CPI © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Wage Adjustments in Labor Contract Consumer Price Index (CPI): indicator for the cost of living that tracks the cost of such expenses as housing, clothing, food, and automobiles Consumer Price Index (CPI): indicator for the cost of living that tracks the cost of such expenses as housing, clothing, food, and automobiles Givebacks: wage and benefit concessions to help employers remain competitive and continue to provide jobs for union members Givebacks: wage and benefit concessions to help employers remain competitive and continue to provide jobs for union members © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. SETTLING UNION-MANAGEMENT DISPUTES Mediation: process which brings in a third party, called a mediator, to make recommendations for settling differences Mediation: process which brings in a third party, called a mediator, to make recommendations for settling differences Arbitration: bringing in an impartial third party called an arbitrator to render a binding decision in the dispute Arbitration: bringing in an impartial third party called an arbitrator to render a binding decision in the dispute © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. GRIEVANCE PROCEDURES Grievance: employee or union complaint that management is violating some provision of the union contract Grievance: employee or union complaint that management is violating some provision of the union contract
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.8 Steps in the Grievance Procedure
Copyright © 2003 by South-Western. All Rights Reserved. COMPETITIVE TACTICS OF UNIONS AND MANAGEMENT Strike (walkout): temporary work stoppage by employees until a dispute is been settled or a contract signed Strike (walkout): temporary work stoppage by employees until a dispute is been settled or a contract signed Picketing: workers marching at a plant entrance to protest some management practice Picketing: workers marching at a plant entrance to protest some management practice Union Tactics
Copyright © 2003 by South-Western. All Rights Reserved. COMPETITIVE TACTICS OF UNIONS AND MANAGEMENT Lockout: in fact, a management strike to bring pressure on union members by closing the firm Lockout: in fact, a management strike to bring pressure on union members by closing the firm Strikebreakers: nonunion workers who cross picket lines to fill the jobs of striking workers Strikebreakers: nonunion workers who cross picket lines to fill the jobs of striking workers Union Tactics Management Tactics
Copyright © 2003 by South-Western. All Rights Reserved. COMPETITIVE TACTICS OF UNIONS AND MANAGEMENT Injunction: court order prohibiting some practice – to prevent excessive picketing or certain unfair union practices Injunction: court order prohibiting some practice – to prevent excessive picketing or certain unfair union practices Employers’ associations: employers group that cooperates and presents a united front in dealing with labor unions Employers’ associations: employers group that cooperates and presents a united front in dealing with labor unions Union Tactics Management Tactics
Copyright © 2003 by South-Western. All Rights Reserved. THE TREND TOWARD UNION-MANAGEMENT CO-OPERATION Hostile and antagonistic attitudes that have sometimes characterized labor-management relationships are changing Hostile and antagonistic attitudes that have sometimes characterized labor-management relationships are changing Companies should treat employees as valuable human resources and adopt policies designed to empower them Companies should treat employees as valuable human resources and adopt policies designed to empower them © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure 11.9 GMC: Employees as Valued Resources Figure 11.9 GMC: Employees as Valued Resources
Copyright © 2003 by South-Western. All Rights Reserved. EMPLOYEE-MANAGEMENT RELATIONS IN NONUNION ORGANIZATIONS Nonunion companies often offer compensation and benefits comparable to those of unionized firms to avert unionization Nonunion companies often offer compensation and benefits comparable to those of unionized firms to avert unionization Satisfied workers may thus conclude that a union is unnecessary Satisfied workers may thus conclude that a union is unnecessary © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Grievance Programs for Non-union Employees Can file: Can file: Lawsuits against their firms Lawsuits against their firms Charges with the U.S. Equal Opportunity Commission Charges with the U.S. Equal Opportunity Commission Charges with a state human rights commission Charges with a state human rights commission © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Grievance Programs for Non-union Employees Alternative dispute resolution programs: vary, but usually include open-door policies, employee hotlines, peer review councils, mediation, and arbitration Alternative dispute resolution programs: vary, but usually include open-door policies, employee hotlines, peer review councils, mediation, and arbitration Peer-review boards: typically consists of three employee peers and several management representatives Peer-review boards: typically consists of three employee peers and several management representatives © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure Grievance Programs for Nonunion Workers
Copyright © 2003 by South-Western. All Rights Reserved. Job Security in Nonunion Companies Primary motivation for workers to form labor unions Primary motivation for workers to form labor unions To reduce staffing levels, firms may try to provide alternatives to layoffs To reduce staffing levels, firms may try to provide alternatives to layoffs Some companies offer incentives for early retirement and resignation Some companies offer incentives for early retirement and resignation
Copyright © 2003 by South-Western. All Rights Reserved. Unions are representing a declining share of the workforce Unions are representing a declining share of the workforce Reasons include: Reasons include: Downsizing by large, unionized firms to improve global competitiveness Downsizing by large, unionized firms to improve global competitiveness Shift in favor of free-market ideologies Shift in favor of free-market ideologies Growth of the information economy Growth of the information economy CHALLENGES FACING ORGANIZED LABOR
Copyright © 2003 by South-Western. All Rights Reserved. INITIATIVES TO REBUILD UNIONS Share of people who have positive attitudes towards unions is growing Share of people who have positive attitudes towards unions is growing Global economy provides opportunities Global economy provides opportunities © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. Figure Selmer Woodwinds/Bach Instrument Assemblers: UAW Members in Unlikely Places
Copyright © 2003 by South-Western. All Rights Reserved. INITIATIVES TO REBUILD UNIONS AFL-CIO’s membership drives AFL-CIO’s membership drives Unions focusing narrow organizing efforts on unskilled, low-wage service workers Unions focusing narrow organizing efforts on unskilled, low-wage service workers Corporate campaigns pressure employers to accept unions Corporate campaigns pressure employers to accept unions U.S. unions developing a role in the world economy U.S. unions developing a role in the world economy © PhotoDisc
Copyright © 2003 by South-Western. All Rights Reserved. WHAT’S AHEAD Next chapter covers the ways in which businesses produce world- class goods and services Next chapter covers the ways in which businesses produce world- class goods and services © PhotoDisc