Attract – Acquire – Retain – Develop - Deploy

Union/Manageme nt Relations MODULE 6

Jack Welch (Winning) “When I was at GE it was well known that I was not a fan of unions. I thought they created conditions that made the company less competitive, and they drove an unnecessary wedge between management and employees. I use the word “unnecessary” because in my experience, unions arise only when a plant or office is being managed by someone who is abusive, remote or indifferent and whose actions have taken away the voice and dignity of employees. Without a doubt, that boss needs to be reformed or removed because the unionization is as excessive response with negative long term consequences—really for everyone.”

Nature of Unions Union ◦A formal association of workers that promotes the interests of its members through collective action. Why Employees Unionize ◦They are dissatisfied with how they are treated by their employers. ◦Arbitrary managerial decisions ◦Noncompetitive Pay ◦Poor working conditions ◦They believe that unions can improve their work situations.

Factors Leading to Employee Unionization

Global Labor Union Issues Union membership is falling in advanced countries. ◦Change in jobs ◦Change in worker SES High unemployment is creating pressure for change. Child labor is an issue in some countries. Co-determination ◦A practice whereby union or worker representatives are given positions on a company’s board of directors. The Impact of NAFTA and the corresponding reduction of unionization

Union Logistics Types of Unions ◦Craft union ◦Trade union ◦Industrial union ◦Professional Organization Positions associated with the Union ◦Union Stewards ◦Union Employees ◦Contract Administrators

Union Participation: Rules and Exceptions Closed Shop ◦Illegal at a Federal Level ◦Exceptions for Construction Industry Union Shop ◦Must join a union after employment ◦Must pay union dues Right-to-Work Laws (about ½ states) Agency Shop ◦Represented by the union ◦Choose to join ◦Must pay dues amount to either union or charity

Union Membership as a Percentage of the Workforce for Selected Countries

Unions in the U.S. Union Movement Emphases: ◦Focused on “bread-and-butter” economic issues—wages, benefits, job security, and working conditions. ◦Do unionized employees make more money? ◦Organized by kind of job and employer. ◦Seek multi-year collective agreements on economic issues as “contracts.” ◦Maintain competitive relations with management.

Union Membership as a Percentage of the U.S. Workforce Source: U.S. Department of Labor, Bureau of Labor Statistics <12% in 2014

Union Membership by Industry Source: U.S. Department of Labor, Bureau of Labor Statistics

Reasons for Union Decline in the U.S. Industrial Changes Industrial Changes (I.T., financial, services) Industrial Changes Industrial Changes (I.T., financial, services) Geographic Changes (Domestic- no union history, employer friendly Global- deportation of manufacturing) Geographic Changes (Domestic- no union history, employer friendly Global- deportation of manufacturing) Workforce Changes (white-collar) (white-collar) Declining Union Membership

The History of American Unions  1794Shoemakers’ strike  1806Shoemakers’ strike (“criminal conspiracy”)  1886American Federation of Labor (AFL)  1938Congress of Industrial Organizations CIO  1926Railway Labor Act (Airlines)  1935National Labor Relations Act (Wagner Act)  1932Norris-LaGuardia Act  1947Taft-Hartley Act  1957AFL-CIO merger  1959Landrum-Griffin Act  1978Civil Service Reform Act

National Labor Code

Typical Unionization Process This will be repeated until: 1)Interest significantly wanes 2)Union is certified

Legal Do’s and Don’ts for Managers During the Unionization

Unfair Labor Practices: Employer Interfering with the organizing and collective bargaining rights of employees. Dominating or interfering with any labor organization. Encouraging or discouraging membership in a particular union. Discharging persons for organizing activities or union membership. Refusing to bargain collectively.

Bargaining Units  “Community of Interest” ◦ Wages, hours, and working conditions ◦ Traditional industry groupings for bargaining purposes ◦ Physical location and amount of interaction and working relationships among employee groups ◦ Supervision by similar levels of management  Supervisors and Bargaining Units ◦ Supervisors are excluded from bargaining units.  Defined as any individual with the authority to hire, transfer, discharge, discipline, and who uses independent judgment with employees.

Continuum of Collective Bargaining Relations

Mandatory Bargaining Issues Issues identified specifically by labor laws or court decisions as subject to bargaining. Discharge of employees Grievances Work schedules Union security and dues checkoff Retirement and pension coverage Vacations Christmas bonuses Rest- and lunch-break rules Safety Rules Profit-sharing plans Required physical exam These are often delegated to committees for position/stance issues

Classification of Bargaining Issues  Permissive Issues ◦ Collective bargaining issues that are not mandatory but relate to certain jobs.  Benefits for retired employees  Product prices (e.g., employee discounts) for employees  Performance bonds  Illegal Issues ◦ Collective bargaining issues that would require either party to take an illegal action (e.g., discriminate in hiring, force people to join union (right-to-work laws)).

Bargaining Impasse Conciliation ◦A process by which a third party attempts to keep union and management negotiators talking so that they can reach a voluntary settlement. Mediation ◦A process by which a third party helps the negotiators reach a settlement. Arbitration ◦A process that uses a neutral third party to make a decision.

Typical Items in a Labor Agreement

Strikes and Lockouts Strike ◦A work stoppage in which union members refuse to work in order to put pressure on an employer. Lockout ◦Shutdown of company operations undertaken by management to prevent union members from working. Striker Replacements ◦Economic strike- ok ◦Unfair labor practices strike ◦Temporarily ◦Eventual Reinstatement

Types of Strikes  Economic Strikes ◦ Strikes over economic issues (e.g., wages)  Unfair labor practice strikes ◦ Strikes over illegal employer actions (e.g., refusal to bargain)  Wildcat strikes ◦ Strikes not approved by the union  Sympathy strikes ◦ Expressions of support for other unions

Grievance Management Complaint ◦Indication of employee dissatisfaction Grievance ◦A complaint formally stated in writing Grievance Procedures ◦Formal channels used to resolve grievances. ◦Union representation (Weingarten) rights ◦Applies to non-union as well- not yet fully determined Grievance Arbitration ◦Means by which a third party settles disputes arising from different interpretations of a labor contract.

Steps in a Typical Grievance Procedure

Right to Work Laws

Comparison of Right to Work States vs. Non Right to Work JAMES B. AVEY PHD MARCH 2009

Right to Work Laws Some states are passing what are called “right to work laws” where employees can not be forced to pay union dues. This has led to a strategic union focus on: ◦Unionization in states without these laws ◦Preventing these laws from being passed ◦The passing of the employee free choice act through congress to enable unionization more efficiently

16–32 FIGURE 16–5 Right-to-Work States

This data begins to address the questions Do right to work states have better financial performance than states which have not passed right to work laws? Is there a trend we can examine to see who does better in a recession? Overall, from a business perspective is it “better” to be a right to work state?

Data Data includes: ◦48 states (CA and NY removed as the economies of scale skew the data) ◦Gross State Product ◦2009 Budget Gap (negative) ◦Unemployment rate as of January 2009

Comparison of Gross State Product on average (in millions)

Average 2009 State Budget Gap in Millions

Unemployment Rate- November 2009

Conclusion Overall, Right to Work States emerged as: ◦Performing better during recession than non right to work states. ◦Having less of a financial crises as of 2009 than non right to work states. ◦Having a higher employment rate/lower unemployment rate than non right to work states. While this data does not account for individual household income which has been reported higher in unionized environments, it does show state financial performance and employment rates seem to be better in states with right to work laws.

EFCA

Readings: Types of individual level pay for performance systems Exceptions to the principle of paying for performance Upward and 360-degree assessment implications Types of self-other rating agreements Jobs and stores affected by Sears Charles Schwab & Company use of downsizing Eight practices for making employee downsizing decisions Sub-practices under analyzing adverse impact Meal breaks and compensation at work Exceptions to the general rule of FSLA