Copyright © 2015 by the McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin Dealing with Union and Employee- Management Issues CHAPTER 12

LEARNING OBJECTIVES Trace the history of organized labor in the United States 2. Discuss the major legislation affecting labor unions 3. Outline the objectives of labor unions

LEARNING OBJECTIVES Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future 5. Assess some of today’s controversial employee– management issues, such as executive compensation, pay equity, child care and elder care, drug testing, and violence in the workplace

DEMAURICE SMITH NFL Players Association 12-4 Earned his law degree in 1989 and gained a reputation as a dedicated trial lawyer. He was elected director of the NFL Players Association in Shortly after starting the job he was thrown right into the middle of the recent NFL lockout.

NAME that COMPANY 12-5 The late management consultant Peter Drucker suggested that CEOs should not earn more than 20 times the salary of the company’s lowest-paid employee. Most firms ignore his suggestion but at our company, executive pay is capped at 19 times the average employee’s salary. Still, we are one of the fastest growing companies in the United States. Name that company!

ORGANIZED LABOR 12-6 LO 12-1 Unions -- Employee organizations whose main goal is to represent members in employee-management negotiations of job-related issues. Labor unions were responsible for:  Minimum wage laws  Overtime rules  Workers’ compensation  Severance pay  Child-labor laws  Job-safety regulations

PUBLIC SECTOR LABOR UNIONS 12-7 LO 12-1 Public sector union members work for governments as teachers, firefighters, police officers, etc. Many states face serious debt problems and want to cut labor costs. But states with public sector unions have limited ability to cut those costs. The Governor of Wisconsin challenged public sector labor unions by eliminating union bargaining rights for state and public employees.

GOALS of ORGANIZED LABOR 12-8 LO 12-1 To work with fair and competent management. To be treated with human dignity. To receive a reasonable share of wealth in the work it generates.

HISTORY of ORGANIZED LABOR Work weeks were 60+ hours, wages were low and child labor was rampant LO 12-1 Craft Union -- An organization of skilled specialists in a particular craft or trade. As early as 1792, shoemakers in a Philadelphia craft union met to discuss fundamental work issues.

The FACTORY BLAZE that FIRED UP a MOVEMENT On March 25, 1911, 146 women were killed in a fire at the Triangle Shirtwaist Company in New York City. The women were trapped by a door that was kept locked to prevent theft. Today labor leaders say that the Triangle fire is proof of why labor unions are crucial to maintaining workplace balance in the U.S.

EMERGENCE of LABOR ORGANIZATIONS LO 12-1 Knights of Labor -- First national labor union (formed in 1869). Knights attracted 700,000 members, but fell from prominence after a riot in Chicago. American Federation of Labor (AFL) -- An organization of craft unions that championed fundamental labor issues (formed in 1886).

INDUSTRIAL UNIONS LO 12-1 Industrial Unions -- Labor unions of unskilled or semiskilled workers in mass production industries. Congress of Industrial Organizations (CIO) -- Union organization of unskilled workers; broke away from the AFL in 1935 and rejoined in The AFL-CIO today has affiliations with 56 unions and has about 12.5 million members.AFL-CIO

PUBLIC UNIONS LO 12-1 For the first time in U.S. history, 7.2 million of the 14.5 union members work in government. Taxpayers, not stockholders, are paying the cost of union workers wages and benefits. The huge state and local government revenue losses caused by the economic crisis put pressure to reduce wage and benefit costs.

EFFECTS of LAWS on LABOR UNIONS LO 12-2 Labor unions’ growth and influence has been very dependent on public opinion and law. The Norris-LaGuardia Act helped unions by prohibiting the use of Yellow-Dog Contracts -- A type of contract that required employees to agree to NOT join a union. Collective Bargaining -- The process whereby union and management representatives form an agreement, or contract, for employees.

COLLECTIVE BARGAINING and the PUBLIC SECTOR LO 12-2 Collective bargaining among public union workers has become a key issue today. One of the issues is the fact that public employees are paid by the taxpayers. When it is perceived that public employees are winning more or better health care, more or better hours of work, and so on, some have questioned whether or not such negotiations should be allowed to continue.

FORMING a UNION in the WORKPLACE LO 12-2 The National Labor Relations Board (NLRB) was created to oversee labor-management issues and provide guidelines for unionization.National Labor Relations Board Certification -- The formal process by which a union is recognized by the NLRB as the bargaining agent for a group of employees. Decertification -- The process whereby employees take away a union’s right to represent them.

WHY JOIN a UNION? LO 12-2 Pro-union attitudes Poor management/employee relations Negative organizational climate Poor work conditions Union’s reputation Job security

LABOR/MANAGEMENT AGREEMENTS LO 12-3 Negotiated Labor-Management Agreement (Labor Contract) -- Sets the terms under which labor and management will function over a period of time. Union Security Clause -- Stipulates workers who reap union benefits must either join the union or pay dues to the union.

UNION SECURITY AGREEMENTS LO 12-3 Closed Shop Agreement -- Specified workers had to be members of a union before being hired for a job. Union Shop Agreement -- Declares workers don’t have to be members of a union to be hired, but must agree to join the union within a specific time period. Agency Shop Agreement -- Allows employers to hire nonunion workers who don’t have to join the union, but must pay fees.

UNION SECURITY AGREEMENTS LO 12-3

RIGHT-to-WORK LAWS LO 12-3 Right-to-Work Laws -- Legislation that gives workers the right, under an open shop, to join or not to join a union. The Taft-Hartley Act of 1947 granted states the power to outlaw union shop agreements. Open Shop Agreement -- Agreement in right-to- work states that gives workers the right to join or not join a union, if one exists in their workplace.

RIGHT-to-WORK STATES LO 12-3

RESOLVING DISAGREEMENTS LO 12-3 Labor contracts outline labor and management’s rights, and serves as a guide to workplace relations. Grievances -- A charge by employees that management isn’t abiding by the terms of the negotiated agreement. Shop Stewards -- Union officials who work permanently in an organization and represent employee interests on a daily basis.

USING MEDIATION and ARBITRATION LO 12-3 Bargaining Zone -- The range of options between initial and final offers that each side will consider before negotiations dissolve or reach an impasse. Mediation -- The use of a third party (mediator) to encourage both sides to keep negotiating to resolve key contract issues. Arbitration -- An agreement to bring in a third party to render a binding agreement.

The GRIEVANCE RESOLUTION PROCESS LO 12-3

TACTICS USED in CONFLICTS LO 12-4 Tactics used by labor unions include:  Strikes  Boycotts  Work Slowdowns  Pickets

STRIKES and BOYCOTTS Secondary Boycott -- An attempt by labor to convince others to stop doing business with a firm that is the subject of a primary boycott. LO 12-4 Strikes -- A strategy in which workers refuse to go to work. Primary Boycott -- When a union encourages both its members and the general public not to buy the products of a firm in a labor dispute.

TACTICS USED in CONFLICTS LO 12-4 Tactics used by management include:  Lockouts  Injunctions  Strikebreakers

LOCKOUTS, INJUNCTIONS and STRIKEBREAKERS LO 12-4 Lockout -- An attempt by management to put pressure on workers by closing the business, thus cutting off workers’ pay. Injunction -- A court order directing someone to do something or refrain from doing something. Strikebreakers -- Workers hired to do the work of striking workers until the labor dispute is resolved; called scabs by unions.

To CROSS or NOT to CROSS? Shop-Til-You-Drop is seeking workers to fill the jobs of striking workers. Many students at your college are employees and others are supporting the strike. You need money and legally it is permissible for you to replace striking workers. What will you do? What are the consequences?

CHALLENGES FACING LABOR UNIONS LO 12-4 The number of union workers is falling. Many workers (like airline employees) have agreed to Givebacks -- Gains from labor negotiations are given back to management to help save jobs.

LABOR UNIONS in the FUTURE Union membership will include more white-collar, female and foreign-born workers than in the past LO 12-4 Unions will take on a greater role in training workers, redesigning jobs and assimilating the changing workforce. Unions will seek more job security, profit sharing and increased wages.

UNION MEMBERSHIP by STATE LO 12-4

TEST PREP What are the major laws that affected union growth, and what does each one cover? How do changes in the economy affect the objectives of unions? What are the major tactics used by unions and by management to assert their power in contract negotiations? What types of workers do unions need to organize in the future?

COMPENSATING EXECUTIVES LO 12-5 CEO compensation used to be determined by a firm’s profitability or increase in stock price. Now, executives receive stock options and restricted stock that’s awarded even if the company performs poorly.

COLLEGE ATHLETES: WHAT are THEY WORTH? Regional economies in college towns reap huge revenues on sports weekends. The players, however, cannot draw a salary. Northwestern University’s football players won a ruling that gave them the right to unionize. The university is appealing the ruling.

PLAY BALL! Salaries in Professional Sports Source: Bloomberg Businessweek, accessed November

COMPENSATING EXECUTIVES in the FUTURE The passage of the Dodd- Frank Act was intended to give shareholders more say in compensation decisions LO 12-5 Boards of directors are being challenged concerning executive contracts. Government and shareholders are putting pressure to overhaul executive compensation.

The QUESTION of PAY EQUITY LO 12-5 Women earn 77% of what men earn. This disparity varies by profession, experience and level of education. Young women actually earn 8% percent more than male counterparts due to their higher graduation rates.

EQUAL PAY for EQUAL WORK Equal Pay Act Factors that Justify Pay Differences LO 12-5 Skill Effort Responsibility Working Conditions

THE SALARY GENDER GAP Source: U.S. Census Bureau, accessed November LO 12-5

WHAT’S SEXUAL HARASSMENT? Sexual Harassment -- Unwelcomed sexual advances, requests for sexual favors or other verbal or physical conduct that creates a hostile work environment LO 12-5 Sexual harassment laws cover men, women and foreign companies doing business in the U.S. Violations can be extremely expensive for businesses.

KINDS of SEXUAL HARASSMENT LO 12-5 Quid pro quo sexual harassment involves threats like “Go out with me or you’re fired.” An employee’s job is based on submission. Hostile work environment sexual harassment is conduct that interferes with a worker’s performance or creates an intimidating or offensive work environment.

YOU MAKE the CALL… LO Two colleagues walk by you as one delivers the punch line to a very dirty joke. You feel the joke is inappropriate. Is this sexual harassment under the law? 2.An employee thinks she may have been sexually harassed when her boss complimented her blouse. She explains the circumstances to you and asks, “Wouldn’t you be upset?” What’s your response?

FACING CHILDCARE ISSUES The number of women in the workforce with children under three-years-old has increased LO 12-5 Childcare related absences cost businesses billions of dollars each year. Who should pay for the cost of childcare – this is a dividing issue among employees and businesses.

BUSINESSES RESPONSE to CHILD CARE LO 12-5 Benefits can include:  Discounts with childcare providers.  Vouchers that offer payment for childcare.  Referral services identify high-quality childcare facilities.  On-site childcare centers  Sick-child centers.

INCREASING ELDER CARE CHALLENGES LO % of U.S. households are providing some care to an elderly person. Care giving obligations cause employees to miss about 15 million days of work per year. Costs could rise up to $35 billion annually.

ELDER CARE in the MODERN HOUSEHOLD Source: Money, accessed November LO 12-5 More and more boomers are taking care of their parents while still working.  31% say that may delay their retirement.  The average cost of taking care of an aging parent is $5,534.  76% say they enjoy taking care of their parents.  54% say it made them closer.

DRUG USE in the WORKPLACE LO 12-5 Alcohol is the most widely used drug - 6.5% of full time employees are considered heavy drinkers. Over 8% of workers aged use illegal drugs and are more likely to be in workplace accidents. Drug abuse costs the U.S. economy $414 billion in lost work, healthcare costs and crime. Over 80% of major companies drug test workers.

VIOLENCE in the WORKPLACE LO 12-5 OSHA reports homicides account for 16% of workplace deaths. Violence is the number one cause of death for women in the workplace. Companies have taken action to deal with potential problems by using focus groups and other interactions.

WARNING SIGNS of POSSIBLE WORKPLACE VIOLENCE LO 12-5 Unprovoked outbursts of anger or rage Threats or verbal abuse Repeated suicidal comments Paranoid behavior Increased frequency of domestic problems

TEST PREP How does top-executive pay in the U.S. compare with top-executive pay in other countries? What is the difference between pay equity and equal pay for equal work? How is the term sexual harassment defined and when does sexual behavior become illegal? What are some of the issues related to childcare and elder care and how are companies addressing those issues?