Human Resource Management Gaining a Competitive Advantage Chapter

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

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 non. U 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 -2

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 -3

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 -4

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. 4 m workers – AFL-CIO now has ~8. 8 m 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 AFLCIO to coordinate get-out-the-vote drives, activities of state and local central labor councils 14 -5

“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 – Ko. L, AFL, CIO • 1950 s and 1960 s 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, 1980 s–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 -6

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

14 -8

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 -9

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 -10

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 -11

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 -12

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 -13

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; Mc. Cain has placed hold on Becker Regional Offices Region 25, Indianapolis (also covers Henderson and Owensboro) 14 -14

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 -15

UNION AVOIDANCE TACTICS 14 -16

Union-organizing election campaign tactics • Percentage of companies that used these tactics: – – – – Held mandatory ee meetings Held supervisor one-on-ones Hired mngt consultant Distributed anti-U leaflets Mailed anti-U letters Used anti-U videos Discharged pro-U activists Promoted pro-U activists (? ) 92% 78% 75% 70% 55% 25% 11% » Source: Cornell University study reported in Wall Street Journal, 8/15/05 14 -17

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

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 14 -19

Examples of Mandatory and Permissive Bargaining Items 20 14 -20

Major U. S. Strikes, 1950 -2008 (involving 1, 000+ ees) 14 in 2003 17 in 2004 22 in 2005 20 in 2006 21 in 2007 15 in 2008 (12 private sector, 3 public) 21 14 -21

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 -22

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 -23

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 -24

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 -25

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 -26

The Public Sector • During the 1960 s and 1970 s, 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. 14 -27