Dealing with Union and Employee- Management Issues Chapter 12 Dealing with Union and Employee- Management Issues McGraw-Hill/Irwin Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved.

LEARNING GOALS Chapter Twelve Trace the history of organized labor in the United States Discuss the major legislation affecting labor unions Outline the objectives of labor unions Describe the tactics used by labor and management during conflicts, and discuss the role of unions in the future 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 12-2

DAVID STERN National Basketball Association (NBA) Profile Started with the NBA as an outside legal counselor in 1966. Spearheaded settlements between players and coaches that led to free agency, salary caps and revenue sharing . Commissioner since 1984, he’s led the league to unprecedented growth . 12-3

ORGANIZED LABOR Employee -Management Issues LG1 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 12-4

PUBLIC SECTOR LABOR UNIONS Employee -Management Issues LG1 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. 12-5

GOALS of ORGANIZED LABOR Employee -Management Issues LG1 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. 12-6

HISTORY of ORGANIZED LABOR The History of Organized Labor LG1 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. Work weeks were 60+ hours, wages were low and child labor was rampant. 12-7

EMERGENCE of LABOR ORGANIZATIONS The History of Organized Labor LG1 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). 12-8

INDUSTRIAL UNIONS The History of Organized Labor LG1 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 1955. The AFL-CIO today has affiliations with 56 unions and has about 12.2 million members. 12-9

PUBLIC UNIONS Public Sector Union Membership LG1 For the first time in U.S. history, 7.6 million of the 14.7 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. 12-10

EFFECTS of LAWS on LABOR UNIONS Labor Legislation and Collective Bargaining LG2 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. 12-11

COLLECTIVE BARGAINING and the PUBLIC SECTOR Labor Legislation and Collective Bargaining LG2 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. 12-12

FORMING a UNION in the WORKPLACE Union Organizing Campaigns LG2 The National Labor Relations Board (NLRB) was created to oversee labor-management issues and provide guidelines for unionization. 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. 12-13

LABOR/MANAGEMENT AGREEMENTS Objectives of Organized Labor Over Time LABOR/MANAGEMENT AGREEMENTS LG3 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. 12-14

UNION SECURITY AGREEMENTS Objectives of Organized Labor Over Time LG3 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. 12-15

RIGHT-to-WORK LAWS Objectives of Organized Labor Over Time LG3 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. 12-16

RESOLVING DISAGREEMENTS Resolving Labor-Management Disagreements LG3 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. 12-17

USING MEDIATION and ARBITRATION LG3 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. 12-18

TACTICS USED in CONFLICTS Tactics Used in Labor-Management Conflicts LG4 Tactics used by labor unions include: Strikes Boycotts – primary and secondary Work Slowdowns Pickets 12-19

TACTICS USED in CONFLICTS (by Management) Management Tactics TACTICS USED in CONFLICTS (by Management) LG4 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. 12-20

CHALLENGES FACING LABOR UNIONS Future of Unions and Labor-Management Relations CHALLENGES FACING LABOR UNIONS LG4 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. 12-21

LABOR UNIONS in the FUTURE Future of Unions and Labor-Management Relations LG4 Union membership will include more white-collar, female and foreign-born workers than in the past. 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. 12-22

COMPENSATING EXECUTIVES Executive Compensation LG5 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. 12-23

COMPENSATING EXECUTIVES in the FUTURE Executive Compensation LG5 Boards of directors are being challenged concerning executive contracts. Government and shareholders are putting pressure to overhaul executive compensation. The passage of the Dodd- Frank Act was intended to give shareholders more say in compensation decisions. 12-24

The QUESTION of PAY EQUITY LG5 Women earn 81% 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. 12-25

EQUAL PAY for EQUAL WORK Equal Pay Act Factors that Justify Pay Differences Pay Equity LG5 Skill Effort Responsibility Working Conditions level, etc. 12-26

THE SALARY GENDER GAP Age Average Salary 15 to 24 Women - $23,357 Pay Equity LG5 Age Average Salary 15 to 24 Women - $23,357 Men - $26,100 25 to 44 Women - $41,558 Men - $55,286 45 to 64 Women - $44,808 Men - $67,040 Source: U.S. Census Bureau, www.census.gov, accessed June 2011. 12-27

WHAT’S SEXUAL HARASSMENT LG5 Sexual Harassment -- Unwelcomed sexual advances, requests for sexual favors or other verbal or physical conduct that creates a hostile work environment. 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: Quid Pro Quo Hostile Work Environment 12-28

ISSUES MANAGEMENT FACES TODAY Child Care ISSUES MANAGEMENT FACES TODAY LG5 Childcare: The number of women in the workforce with children under three-years-old has increased. 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. 12-29

BUSINESSES RESPONSE to CHILD CARE LG5 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. 12-30

INCREASING ELDER CARE CHALLENGES LG5 29% of the adult population 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. 12-31

ELDER CARE in the MODERN HOUSEHOLD LG5 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. Source: Money, June 2010. 12-32

DRUG USE in the WORKPLACE Drug Testing LG5 Alcohol is the most widely used drug - 6.5% of full time employees are considered heavy drinkers. Over 8% of workers aged 18-49 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. 12-33

VIOLENCE in the WORKPLACE LG5 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. 12-34

WARNING SIGNS of POSSIBLE WORKPLACE VIOLENCE Violence in the Workplace LG5 Unprovoked outbursts of anger or rage Threats or verbal abuse Repeated suicidal comments Paranoid behavior Increased frequency of domestic problems 12-35