Understanding Labor- Management Relations Chapter 11

Chapter 11 Learning Goals 1.W 1.What is the historical development of American labor unions? 2.W 2.What role did federal law play in the development of the union-management relationship? 3.W 3.What is the union organizing process? 4.W 4.What is the collective bargaining process, and what key issues are included in the union contract?

Chapter 11 Learning Goals (cont’d.) 5.H 5.How do employees file a grievance? 6.W 6.What economic tactics do unions and employers use in labor-management conflicts? 7.W 7.What trends will affect American workers and labor-management relations?

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

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

Emergence of Unions & Collective Bargaining American Federation of Labor (AFL) founded 1881; craft unions Congress of Industrial Organizations (CIO) founded 1935; industrial unions AFL-CIO joined in 1955

Labor 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,

Learning 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 Unions Norris-La Guardia Act –Anti-Injunction Wagner Act –National Labor Relations Taft-Hartley Act –Labor-Management Relations Landrum-Griffin Act –Labor-Management Reporting & Disclosure

Learning 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 Organizing Two Ways Members Join: 1. Unionized employer hires new workers who choose to, or must, join a union 2. Employees of a non-unionized employer form or join a union 3%The average local union spends only 3% of its budget on recruiting & organizing (Source: Fortune, Sept. 28, 1998, p. 180.)

Union 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 4 WWhat is the collective bargaining process, and what key issues are included in the union contract? –Collective 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 Contracts Employer bargaining preparationUnion 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 Negotiators They listen They are creative & flexible They are willing to walk They don’t worry about being liked They can handle multiple tasks They love to negotiate Source: HR News, Nov. 1999, p. 15.

Issues Included in Union Contracts Union security Management rights Wages African-American & Latina female union members earned over 40% more than non-union counterparts (Source: AFL- CIO/US Bureau of Labor Statistics, 1998) Job benefits The 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) Job security

Learning Goal 5 HHow do employees file a grievance? –Grievance 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

Grievance: A formal complaint, filed by an employee or by the union, charging that management has violated the contractArbitration: The process of settling a labor- management dispute by having a third party make a binding decision

Typical Grievance Procedure Step 1: Oral Presentation Step 2: Grievance in Writing Step 3: Higher-level grievance meeting Step 4: Arbitration Employee with grievance Front-line supervisor Union steward

Learning Goal 6 WWhat economic tactics do unions and employers use in labor-management conflicts? –Union 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 tactics Lockout and strike replacements –Employer closes the plant and prevents workers from working –Hires temporary, nonunion workers as strike replacements

Managing Labor- Management Conflict Union tactics: strike boycott picketing corporate campaign Employer tactics: lockout strike replacements mutual-aid pact shift production

Learning 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 21 st century Unions and employers will need to build apprenticeship programs for careers in skilled crafts

Trends Affecting Labor-Management  Overall decline in union membership  Shortage of skilled construction workers

Decline in Union Membership Source: Fortune, Sept. 28, 1998, p. 180.