1-1 Human Resource Management Gaining a Competitive Advantage Chapter 14 Collective Bargaining and Labor Relations McGraw-Hill/Irwin Copyright © 2008 by The McGraw-Hill Companies, All Rights Reserved.

14-2 Goals and Strategies Society –Labor unions' major benefit to society throughout history has been the balancing of power and the institutionalization of industrial conflict in the least costly way. –The National Labor Relations Act (NLRA, 1935) sought to provide a legal framework conducive to collective bargaining. Management –Must decide whether to encourage or discourage the unionization of its employees. More accurate: mngt must decide to what extent to discourage unionization, approach to take in nonU facilities and approach to take where U-represented Labor Unions –Seek to give workers formal representation in setting the terms and conditions of employment.

14-3 Union Structure, Administration, and Membership National and International Unions –Craft unions –Industrial unions Local Unions –Responsible for the negotiations of a contract as well as the day-to-day administration of the contract, including the grievance procedure. AFL-CIO –Not a union but rather an association that seeks to advance the shared interest of its member unions at the national level. –Change to Win Coalition (2005)

14-4 WARTIME AND POSTWAR LABOR RELATIONS The labor movement at beginning of 21 st century is struggling, yet has pockets of vibrancy: Globalization continues to undermine labor’s bargaining power. Private sector union density has shrunk to <10 percent. Public sector union density stable at 35+ percent. Dunlop Commission (Clinton Administration) issued recommendations for reducing conflict and improving productivity. General unionism has largely replaced craft unionism and industrial unionism. 2005—disaffiliation of SEIU, Teamsters, UFCW, Unite Here from AFL-CIO (~1/3 of membership), formation of Change to Win Coalition (includes Laborers, UFW, Carpenters)

14-5 Change to Win Coalition Had pressured AFL-CIO to convert to institution w/ authority to order U mergers, grant exclusive organizing rights to industry sectors –Seven member unions represent ~5.4m workers –AFL-CIO now has ~8.8m members Believe Us must be much bigger to be able to bargain w/ global Cos and nationwide chains –Will have strategic organizing center and central organizing fund –75 percent of revenue from per capita fee will go to organizing, 25 percent to administrative activities Disaffiliation has implications for ability of AFL- CIO to coordinate get-out-the-vote drives, activities of state and local central labor councils

14-6 “Divided They’ll Stand – Maybe Even Taller” Robert Reich (Sec. of Labor in Clinton Admin) notes that while watchwords for labor have been “in unity there is strength,” labor movement may in fact be stronger disunited History of organized labor has been one of upheaval and rebirth, reflecting changes in structure of American economy –KoL, AFL, CIO 1950s and 1960s were golden age for unions –To achieve economies of scale, major industries became dominated by few large producers (labor costs taken out of competition) However, 1980s–present has seen rise of global product markets and increasingly global labor markets –Local service sector of economy remains exception to globalization »Source: Washington Post, 7/31/05

14-7 Union Security Checkoff Provision Right-to- Work Laws Closed Shop Maintenance of Membership Union Shop Agency Shop

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14-9 Union Membership and Bargaining Power Reasons for the consistent decline of union membership in the U.S. include: –Structural Changes in the Economy –Increased Employer Resistance –Substitution with HRM –Substitution by Government Regulation –Worker Views –Union Actions

14-10 Legal Framework The 1935 NLRA enshrined collective bargaining as the preferred mechanism for settling labor-management disputes. Section 7 of the NLRA: employees have the "right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining."

14-11 Unfair Labor Practices (ULPs) The NLRA prohibits certain activities by both employers and labor unions: –Employers cannot interfere with, restrain, or coerce employees in exercising their Section 7 rights. –Employers cannot dominate or interfere with a union. –Employers may not discriminate against an individual for exercising his or her right to join or assist a union. –Employers may not discriminate against employees for providing testimony relevant to enforcement of the NLRA. –Employers cannot refuse to bargain collectively with a certified union.

14-12 Unfair Labor Practices - Unions Originally the NLRA did not list any union unfair labor practices. These were added by the 1947 Taft-Hartley Act. The 1959 Landrum-Griffin Act further regulated unions’ actions and their internal affairs –i.e. financial disclosure and conduct of elections.

14-13 Enforcement The National Labor Relations Board (NLRB) has the primary responsibility for enforcing the NLRA. –The NLRB is a five-member board appointed by the president. Additionally, there are 33 regional offices. –The NLRB has two major functions: To conduct and certify representation elections. To prevent unfair labor practices. –ULP charges are filed at and investigated by the regional offices.

14-14 National Labor Relations Board Chair, Wilma Liebman (D) U atty, term expires 8/11 Clinton appointee, twice reappointed by Bush, appt Chair by Obama Peter Schaumber (R) Atty and arbitrator, term expires 8/10 Former Chair under Bush Three positions vacant since 12/07 Nominations announced, two U attys for the D seats (Craig Becker and Mark Pearce), mngt atty and Senate staffer for R seat (Brian Hayes) Senate committee voted in October to send nominations to full Senate; McCain has placed hold on Becker Regional Offices Region 25, Indianapolis (also covers Henderson and Owensboro)

14-15 The Process and Legal Framework of Organizing An election may be held if at least 30 percent of the employees in the bargaining unit sign authorization cards. A secret ballot election will be held. The union is certified by the NLRB if a simple majority of employees vote for it. A decertification election may be held if no other election has been held within the year or if no contract is in force. Certain categories of employees cannot be included in bargaining units.

14-16 UNION AVOIDANCE TACTICS

14-17 Union-organizing election campaign tactics Percentage of companies that used these tactics: –Held mandatory ee meetings92% –Held supervisor one-on-ones78% –Hired mngt consultant75% –Distributed anti-U leaflets75% –Mailed anti-U letters70% –Used anti-U videos55% –Discharged pro-U activists25% –Promoted pro-U activists (?)11% »Source: Cornell University study reported in Wall Street Journal, 8/15/05

14-18 The Negotiation Process Distributive Bargaining - win/lose Intraorganizational Bargaining - conflicting objectives of different factions Integrative Bargaining - win/win Attitudinal Structuring - relationship and trust

14-19 Good Faith Bargaining Subjects for Bargaining –Mandatory “Effects bargaining”—managerial decisions are not mandatory bargaining items, but the effects of those decision on workers, such as layoff order or severance pay, can be mandatory items –Permissive General rule is that neither party may negotiate to impasse over non-mandatory subject –Illegal

Examples of Mandatory and Permissive Bargaining Items

Major U.S. Strikes, (involving 1,000+ ees) 14 in in in in in in 2008 (12 private sector, (12 private sector, 3 public) 3 public)

14-22 Management’s Willingness to Take a Strike The following factors help determine whether management is able to take a strike: –Product Demand –Product Perishability –Technology –Availability of Replacement Workers –Multiple Production Sites and Staggered Contracts –Integrated Facilities –Lack of Substitutes for the Product

14-23 Alternatives to Strikes Mediation - Has no formal authority to force a solution; acts as a facilitator for the parties. Fact finder - Investigates and reports on the reasons for the dispute and both sides' positions. Arbitration - A process through which a neutral party makes a final and binding decision.

14-24 New Labor Management Strategies There are signs of a transformation from an adversarial approach to a less adversarial and more constructive approach to union-management relations. –The transformation includes increasing worker involvement and participation and reorganizing work to increase flexibility. Union leaders have frequently resisted such change, fearing an erosion of their influence.

14-25 Labor Relations Outcomes Strikes Wages and Benefits –In 2006, private-sector unionized workers received, on average, wages that were 24 percent higher than nonunion counterparts. Productivity –Some argue that unions increase productivity, while other argue that they decrease productivity. –Studies have concluded that union workers are more productive than nonunion workers although the explanation is unclear. Profits and Stock Performance –These may suffer under unionization if costs are raised.

14-26 The International Context The United States has both the largest number of union members and the lowest unionization rate of any Western European country or Japan. The growing globalization of markets will continue to put pressure on labor costs and productivity. The United States differs from Western Europe in the degree of formal worker participation in decision-making.

14-27 The Public Sector During the 1960s and 1970s, unionization in the public sector increased dramatically. As of 2006, 36 percent of government employees were covered by a union contract, and 42 percent of all government employees were covered by a collective bargaining contract. Strikes are illegal at the federal level and in many states for government workers.