Management and Union Security When management and unions

Management and Union Security When management and unions bargain they must also consider survival. A union cannot achieve advantages for its members unless it continues to exist. Management’s survival in collective bargaining refers to it ability to remain master in its own house and to retain managerial authority. 1

Management Security Management security refers to the freedom of management to make managerial decisions……… To perform the “functions of management” without interference from the union. 2

Management Security The traditional division of decisionmaking authority in the United States was codified in the Wagner Act. Management was required to bargain with unions over wages, hours, and other terms and conditions of employment. 3

Management Security All other decisions, such as level of employment, production methods, product design, plant location, pricing, and advertising, were traditionally considered strictly management prerogatives. 4

Management Security An example of a management security clause: “The right to hire, lay off, discharge for cause, promote, or transfer employees is the exclusive prerogative of management, except as otherwise provided in this contract. ” 5

Management Security There are three kinds of decisions found in the employer-employee relationship: Unilateral Management Decisions n n Joint Decisions n Unilateral Union Decisions 6

Management Security The law divides the three types of decisions into the following bargaining subjects: Mandatory - Permissive - Illegal 7

Management Security Among companies and unions engaged in a high level of cooperation, the issues of scope of bargaining, and of management prerogative may be of lesser significance than for the vast majority of unions and employers, for whom these subjects are very important. 8

Subjects of Bargaining The only topics over which bargaining is legally (mandatory) required are included under the heading “wages, hours, and other terms and conditions of employment”. All other legal subjects of bargaining are referred to as permissive because bargaining over them is not mandated by law. 9

Subjects of Bargaining It is an unfair labor practice for either side to unilaterally change a condition of employment that is a mandatory subject of bargaining without first bargaining to the point of impasse. It is also illegal to bargain to the point of impasse over a permissive subject. 10

Subjects of Bargaining Over the years, the scope of mandatory topics of bargaining has expanded significantly. See page 174 of the course text for a current list of acceptable mandatory and permissive subjects of bargaining. 11

Subjects of Bargaining Permissive subjects include: Benefits to retirees, employer advertising practices, discontinuation of product lines, partial closing of a business, when not motivated by antiunion animus, business relocation, introduction of automation, and various kinds of subcontracting decisions. 12

Subjects of Bargaining Permissive subjects : However, the effects that such unilateral decisions may have on employees can be a mandatory subject of bargaining. 13

Rationales for Management Prerogatives Economic Efficiency Assumes that bargaining slows down the allocation of resources to their most productive uses and that labor can generate no information or ideas for alternatives that might contribute efficiency, 14

Rationales for Management Prerogatives Private Property Owners (or managers) should have unrestricted authority over their own property and should not have to bargain over business decisions 15

Rationales for Management Prerogatives Presumed Futility of Bargaining Sound business decisions based on conditions faced by the firm should not be reversed as a result of labor negotiations. Labor lacks the expertise to participate fully in today’s complex economic environment. 16

The Problem of Prerogatives There apparently is little, if anything, that can be classified unequivocally as the sole prerogative of either side for all times and situations, so long as employers are free to select who shall work for them and employees are free to choose whether they will work for a particular employer. 17

The Problem of Prerogatives In a free economy, it is pointless for either side to claim inherent rights to bargain about any particular subject. 18

The Problem of Prerogatives Unilateral Control of Strategy If bargaining is to have any meaning, each party must control its own strategy and leadership in dealing with the other. 19

The Problem of Prerogatives Interest and Decision Making The attempt to settle problems on the basis of Prerogatives or “inherent rights” holds the prospect of extending futile disagreement. An approach based on Interests can bring a logical and realistic settlement. 20

The Problem of Prerogatives Ability and Decision Making Either party will tend to insist on participation in a decision in proportion to its ability in the subject matter involved - assuming that it also has an interest. 21

The Problem of Prerogatives Modification of the Ability Criterion There is a presumption that employees or unions should not participate in top management decisions, since they are not in a position to make those decisions wisely. 22

Inherent Divergence of Interests n n A simple way to discover that the need for strong management security is based on something more than abstract “rights of ownership” is to assume that the employees purchase a controlling share of stock of the corporation they work for. All said and done, the officers elected by the employees are ultimately found to behave like management, for the simple reason that they are management. 23

Inherent Divergence of Interests n n Their desire for freedom to make decision grows from their interest in the job they do, not from the nature of the group they represent. Rank-and-file workers often find that their interest as owners come in conflict with their interest as workers. Since wage income is probably many time higher than dividend income, the worker’s interest greatly outweighs the owners interest. 24

Inherent Divergence of Interests Many employees of unions are also organized and bargain collectively with the union that employs them. 25

Secure vs Insecure Management Under a strong management clause, rigorously guarded and enforced, the executives are free to study that environment and decide how best to live with it, and then carry out those decisions without interference from the union. That is the core of management security. 26

Secure vs Insecure Management A typical management clause: Section 2. 1 Management of the Company. The management of the Company and the direction of the work force is vested exclusively in the company subject to the terms of this Agreement. All matters specifically and expressly covered or treated by the language of the Agreement may be administered for its duration by the Company in accordance with such policy or procedure as the Company from time to time may determine. 27

Secure vs Insecure Management In practice the defense of management security hinges on two critical points: Can management prevent wildcat strikes? And Can management prevent insubordination? 28

Secure vs Insecure Management The answer is “Yes” assuming that: Management is successful in negotiating a “No-Strike” clause and They are effective in establishing and enforcing discipline. 29

Patterns and Trends in Management Security Some contracts place definite restrictions on managerial prerogatives. Some contracts contain a general statement limiting managerial rights, others set restrictions in such areas as subcontracting, performance of work by supervisors, technological changes, and plant shutdown or relocation. 30

Union Representation on Corporate Boards Traditionally, labor unions and employers in the United States have objected to union presence on corporate boards of directors. The most noted exception in this country has been the appointment of the head of the UAW to the board of Chrysler. 31

Union Representation on Corporate Boards The growth of European-owned industry in the United States could also encourage the importation of codetermination or representation by workers on boards of directors, into this country, since union members on the boards of directors of European companies may favor codetermination for the U. S. subsidiaries. 32

Overview of Some Legal and Practical Aspects n n To the degree that the law requires management to bargain at all, management security is reduced. The precise boundary line between what management will and will not be required to bargain about is determined by the NLRB and the courts. 33

Overview of Some Legal and Practical Aspects n n It should be remembered that a legal obligation to bargain is explicitly not an obligation to concede. The indications are that the future will bring considerable diversity in approaches to management security. (Saturn Contract) 34

Union Security The meaning of union security: It refers to the continued existence of the union as the bargaining agent for each bargaining unit it represents. 35

The Meaning of Union Security It can also be defined as the union’s freedom to perform the function of collectively representing employees without interference from management or other sources. 36

The Meaning of Union Security The final definition parallels that of management security in that both are defined in terms of freedom to act. 37

Some Threats to Union Security The non-essentiality of unions. n Management opposition. n Anti-union activities. n Decertification elections. n Loss of membership. n 38

The Non-essentiality of Unions unlike management are dispensable. This subordinate position is the starting point of the problem of union security and partially explains many characteristics of union behavior. 39

Management Opposition In many places management dislike takes active forms and keeps the union’s existence in perpetual jeopardy. Antiunion labor attorneys help employers operate within the law, while at the same time making it very difficult for unions to gain recognition. 40

Anti-Union Activities The use of union busting consultants who specialize in defeating unions include lawyers, employer and trade associations, psychologists, detectives, and nonprofit antiunion organizations. 41

Anti-Union Activities Reasons for Anti-Union activities: n n n Resistance in the antiunion South. Organizational activities of large unions are more threatening. Anti-Union methods are much more sophisticated. 42

Decertification Elections After one year employees can request a decertification election provided no contract is in force. A contract can act as a bar to a decertification election for up to three (3) years. 43

Decertification Elections Decertification elections must be requested during the 30 day period from 90 to 60 days before the contract expiration date. There also special circumstances under which employers could file for a representation election. 44

Decertification Elections Under Taft-Hartley employees can petition the NLRB to conduct a union shop deauthorization poll. A winning vote for deauthorization gives the employees the right to remove the union shop provision from the labor contract. 45

Loss of Membership and Income A union’s ability to organize workers and collect dues is complicated further by right-to-work laws, which prohibit compulsory union membership. 46

Loss of Membership and Income By a ruling of the NLRB, the union, as exclusive bargaining agent, must process the grievance of any individual employee against the employer, including arbitration if necessary, even if the employee is not a member of the union and pays no dues. 47

Loss of Membership and Income Although nonmembers cannot vote in elections for union officers or on contract ratification, the number of employees placing a high value on that privilege is not large enough to alter this particular situation. 48

Loss of Membership and Income While some employees desire to “ride free” others avoid the union because: They object on principle. n The dues are too high and misused. n Some see the unions as having no value. n Some don’t want to upset the boss. n Inertia. n 49

-Security. Satisfactory Union Performance Union leaders without disciplinary powers lack the authority to effectuate the strategy for which they are responsible. For the union, the discrepancy between authority and responsibility can be substantial in the area of contract enforcement. 50

-Security. Satisfactory Union Performance Whether disciplinary power is needed for the orderly execution of bargaining tactics or the faithful observation of the contract, the ultimate discipline in all organizations except the government is expulsion. But as long as union membership is voluntary, expulsion from union membership is an ineffectual disciplinary action. 51

-Security. Sound Industrial Relations It is suggested that sound relations between union and management are impossible unless both parties possess a rather high degree of security. The insecure union, like the insecure individual, often tends to be permanently aggressive and belligerent. 52

-Security. Sound Industrial Relations Many employers see distinct advantages in a secure union. This attitude is more marked in large firms and among those who have dealt longest with unions. In many ways union security leads to a less hostile, and distractive work environment. 53

-Security. Sound Industrial Relations Once management accepts that the union will be with it indefinitely the alternatives change. 54

The Forms and Extent of Union Security n n n Closed Shop Union Shop Modified Union Shop Agency Shop Maintenance of Membership Dues Checkoff 55

The Basic Controversy in Union Security The basic conflict over union security is now clear. On the one hand, union security seems to be a requisite condition for sound industrial relations. On the other, compulsory membership curtails the individual’s freedom of choice. 56

The Basic Controversy in Union Security Most legislation about union security since World War II has moved in the direction of prohibiting compulsory membership. This, of course, prevents the abuse of the union’s disciplinary power by abolishing it. 57