Topic 13 Labor Relations Paul L Schumann Ph

Outline �History of Unions in the US �National Labor Relations Act �Scope of Bargaining Issues �Bargaining �Impasse in Negotiations �Contract Administration �Unions in the Government Sector 2

History of Unions in the US �Union: workers join together to solve the workers’ workplace problems, to build better workplaces for themselves, & to have a formal voice �Unions are based on the following suppositions: � Companies are big & powerful � Compared to the powerful company, each worker is weak when alone � Power imbalance: “If you don’t like it, go ahead and quit” � Unions equalize the power imbalance: there’s strength in numbers �Collective bargaining: instead of each worker bargaining individually with the company, workers join together in a union to bargain collectively with the company �Bargain for better terms & conditions of employment � Better pay, better benefits, better hours, better working conditions 3

History of Unions in the US �Labor relations: the relationship between management & workers, especially workers represented by unions �Industrial & labor relations: the relationship between management & workers � Includes: human resource management, organizational behavior, organization theory, labor economics, & collective bargaining �Characteristics of early unions in the US �Local skilled workers formed craft unions � Craft union: a union that represents workers who share the same skill, trade, craft, or occupation � Examples: carpenters, cigarmakers, cordwainers �Organized as fraternal societies � Members refer to each other as “brothers” 4

History of Unions in the US �American Federation of Labor (AFL) �Federation of craft unions formed in 1886 � Each craft union focused on a specific craft �Samuel Gompers: president 1886– 1924 (except 1894, when a socialist won the presidency of the AFL) � No other single individual has had a greater, longer-lasting, influence on unions in the US � Opposed socialism � Wanted craft unions to focus on the terms & conditions of employment � “What is it that you want? ” — “More!” 5

History of Unions in the US �Congress of Industrial Organizations (CIO) �Federation of industrial unions formed in 1935 in a split with the AFL � Industrial union: a union that represents workers who are in a particular industry (regardless of the particular skill or craft of each worker) � Examples: mining industry, steel industry, auto industry �John Lewis (from the United Mine Workers) was an early leader of the CIO �Targeted the mass production industries for the formation of industrial unions: steel, auto, tire & rubber 6

History of Unions in the US �AFL-CIO �The AFL & the CIO merged in 1955 �http: //www. aflcio. org/ �The AFL-CIO is a federation of unions � Each union is responsible for its members � Some are craft unions � Some are industrial unions � 2008: AFL-CIO has 56 unions with 10. 5 million members � http: //www. aflcio. org/aboutus/unions/ � Before summer 2005, the AFL-CIO had 60 unions with 13 million members � In summer 2005, a group of unions split off from the AFL-CIO to form a new group named “Change to Win” � AFL-CIO was left with 53 unions with 9 million members 7

History of Unions in the US �Change to Win (Ct. W) �New federation of unions formed in summer 2005 after a split with the AFL-CIO �http: //www. changetowin. org/ � 7 unions with 6 million members � http: //www. changetowin. org/about-us. html � International Brotherhood of Teamsters (IBT) � Laborers’ International Union of North America (LIUNA) � Service Employees International Union (SEIU) � United Brotherhood of Carpenters and Joiners of America (UBC) � United Farm Workers of America (UFW) � United Food and Commercial Workers International Union (UFCW) � UNITE HERE (mostly hotel, restaurant, & textile workers) 8

History of Unions in the US �During the 1800’s and into the early 1900’s, companies & courts were hostile to unions �Courts often saw unions as criminal conspiracies �Violence during union organizing campaigns � Dispute over representation: a union claims to represent workers in a company & management disputes it � Workers would strike to pressure the company to recognize that the union represents the workers � Result too often was violence � Public became increasing unhappy with the violence � Laws began to be passed to channel disputes over union representation from violence in the streets into peaceful methods of resolution 9

History of Unions in the US �Laws were passed at the federal level giving employees of companies the legal right to unions �Railway Labor Act (1926) � Gave railroad workers the clear legal right to unions � Airline workers added in 1934 �National Labor Relations Act (1935) � Gave many other workers the legal right to unions �Laws were also passed at the federal & state levels giving public employees the legal right to unions 10

National Labor Relations Act �Legislative history �Original NLRA also called the Wagner Act (1935) �Amended by the Taft-Hartley Act (1947) & others �Covers virtually everyone except: �Railroad & airline workers (because they are covered by the Railway Labor Act) �Government employees (because they are covered by other laws at the state & federal levels that deal explicitly with government employees) �Supervisors (because they are not allowed to have unions) �Employees of some very small employers �Individuals employed by a parent or spouse 11

National Labor Relations Act �National Labor Relations Board (NLRB): the US federal government agency that administers the NLRA �http: //www. nlrb. gov �Worker rights under the NLRA: �To form unions & to join unions � The workers themselves have the legal right to decide whether they want to be represented by a union �To use unions to bargain collectively � The workers have the legal right to cooperate together in seeking better terms & conditions of employment � Such cooperation is not a criminal conspiracy �To engage in strikes to secure better terms & conditions of employment 12

National Labor Relations Act �Union representation: do workers want to be on their own, or do they want to join together in a union, to seek better terms & conditions of employment? �Workers get to decide for themselves if they want: � Either everyone for themselves in trying to get a better deal � Or everyone works together for a better deal �A union begins a union organizing campaign at a company � Maybe some employees approached the union & expressed an interest in having a union represent them � Maybe the union identified the company as a potential target 13

National Labor Relations Act �Union representation (more) �The union campaigns among the employees of the company � The union organizers will ask the employees to sign “Authorization Cards” � Authorization Cards: a statement signed & dated by an employee that states that the employee would like to be represented by the union specified on the card � Signing an authorization card is the employee stating a preference about representation � It is not the same as joining a union 14

National Labor Relations Act �Union representation (more) �When the union has signed Authorization Cards from a significant percentage of the employees, the union will ask company management for voluntary recognition Voluntary recognition: management might examine the Authorization Cards & choose to voluntarily recognize the union as the representative of the employees & begin negotiations � Management might refuse to examine the Authorization Cards & choose to refuse to recognize the union as the representative of the employees � In this case, there is a dispute over representation � Before the NLRA (1935), such disputes were often settled by strikes that too often resulted in violence � Since 1935, the NLRA says to resolve the dispute over whether workers want to be represented by a union by putting it to a vote among the workers � 15

National Labor Relations Act �Union representation (more) �Representation Elections: 2 types: � Certification Elections (“Certs”) � If company management refuses to recognize the union, the union takes the Authorization Cards to the NLRB & petitions for a Certification Election � Showing of sufficient interest: at least 30% of the employees must have signed the Authorization Cards before the NLRB will conduct a vote � Types of Certification Elections: � Consent Election: parties agree on date, location, & who is eligible to vote; limited rights of appeal � Stipulated Election: parties agree on date, location, & who is eligible to vote; parties preserve their rights of appeal � Board-Directed Election: parties can’t agree, so the NLRB decides the election details 16

National Labor Relations Act �Union representation (more) �Representation Elections (more) � Certification Elections (more) � Appropriate bargaining unit: the workers who are eligible to vote in the union Representation Election � If the workers in the appropriate bargaining unit vote in favor of union representation, then the union will represent all the workers in the appropriate bargaining unit � Example: Production (80), Maintenance (20), Warehouse (10), & Office (40) � If decided by the NLRB (in a Board-Directed Election), they look for workers who share a “community of interest” � Example: Production (80) + Maintenance (20) = 100 17

National Labor Relations Act �Union representation (more) �Representation Elections (more) � Certification Elections (more) � Unfair Labor Practices (ULPs): activities that would interfere with rights under the law � Examples: spy on union meetings, question employees about their union beliefs, fire union supporters � NLRB can issue cease & desist orders to stop ULPs 18

National Labor Relations Act �Union representation (more) �Representation Elections (more) � Certification Elections (more) � Outcome determined by a simple majority vote of the valid ballots cast � Example: 100 workers in the appropriate bargaining unit Union: 41 votes No union: 39 votes Total: 80 votes cast (out of 100 eligible to vote) Needed to win: 50% + 1 vote = (0. 5 × 80) + 1 = 40 + 1 = 41 � Union got at least 41 votes �union wins �NLRB certifies that the union is the “exclusive representative” of all 100 workers in the appropriate bargaining unit 19

National Labor Relations Act �Union representation (more) �Representation Elections (more) � Certification Elections (more) � Exclusive representation: if the union wins, it is certified by the NLRB as the exclusive representative of all of the workers in the appropriate bargaining unit � Union representation is the issue � The union is the only entity that can negotiate for all of the workers in the appropriate bargaining unit � It would be a ULP for the company to negotiate with some workers without involving the union as the workers’ legal representative � Union membership is not the issue � Whether � Election any of the workers join the union is a separate issue bar: if the union loses the election, there is a 1 year before it can try again 20

National Labor Relations Act �Union representation (more) �Representation Elections (more) � Decertification Elections (“Decerts”) � Workers petition the NLRB for an election to decertify the union � Outcome decided by a simple majority vote of the valid ballots cast among the workers in the appropriate bargaining unit � If the union loses, it is decertified as the exclusive representative of the workers � If the union wins, it retains its certification as the exclusive representative of the workers � Once there is a certified union, good-faith negotiations begin on mandatory bargaining issues 21

Scope of Bargaining Issues �Types of bargaining issues �Mandatory issues: issues that if one side wants to negotiate the issue, the other side cannot simply refuse to negotiate it � Duty to bargain in good faith on mandatory issues � Not required to make concessions or reach agreement � Must make an honest effort to reach agreement � Failure to bargain in good faith is a ULP � NLRB decides by applying their “totality of conduct” doctrine Disputes over mandatory issues may be pressed to impasse � Examples of mandatory issues: terms & conditions of employment � Examples: pay, benefits, hours, working conditions (overtime rules, layoff rules, safety issues, seniority rights, etc. ), etc. � 22

Scope of Bargaining Issues �Types of bargaining issues (more) �Permissive issues: issues over which the parties are permitted to negotiate if both sides agree to negotiate over the issues � No duty to bargain in good faith for permissive issues � If one side wants to negotiate a permissive issue & the other side refuses, then that’s the end of negotiating that issue � Disputes over permissive issues may not be pressed to impasse � Examples of permissive issues: amount of union dues, prices of the company’s products or services, internal union procedures 23

Scope of Bargaining Issues �Types of bargaining issues (more) �Prohibited (illegal) issues: issues over which the parties cannot legally negotiate � Examples of prohibited (illegal) issues: � Illegal discrimination in hiring � Closed shop agreements (a type of union security agreement) �One mandatory issue that most unions want to negotiate is the inclusion of a “union security agreement” in the contract 24

Scope of Bargaining Issues � Union security agreements: negotiated contract clauses designed to protect the union from free-riders (workers who benefit from the union but who don’t pay) � Closed shop: company agrees to hire only union members � � Prohibited by the NLRA “Pre-hire agreements” are allowed by the NLRA in the construction industry � Pre-hire agreements: company agrees to hire workers from a union hiring hall � Union shop: company can hire anyone, but the new hires must join the union within so many days (typically 30 days) � Actual union membership is technically not required � � Beck rights: non-members only have to pay “fair share” dues, not full dues � � Financial core membership is required: workers don’t have to join, but have to pay dues Fair share dues: the amount of union dues that goes to pay for the union activities that are required by law (e. g. , costs associated with exclusive representation in negotiating & administering the contract; costs associate with the duty of fair representation; etc. ) Right-to-work laws: laws in some states that outlaw union shop agreements � Agency shop: membership is not required, but workers must pay fair share dues � Maintenance of membership shop: members must maintain their membership & pay dues, but non-members don’t have to join & don’t have to pay dues � Open shop: no contractual requirements to protect the union from free-riders 25

Bargaining �Types of bargaining (Walton & Mc. Kersie): �Distributive bargaining: negotiating on issues where the goals of the parties are in conflict � Zero-sum game: what one side wins, the other side loses �Integrative bargaining: negotiating on issues where the parties have common goals � Positive-sum game: both sides can win �Attitudinal structuring: negotiating activities to influence the attitudes of the parties � Examples of attitudes: cooperation, hostility, trust, respect, etc. �Intra-organizational bargaining: negotiating to resolve differences among the members of the same side � There may be differences in opinions & goals among the managers & among the union & the workers 26

Bargaining �Bargaining power: your bargaining power refers to your ability to get agreement on your own terms �Bargaining power is relative � Bargaining power is not absolute � One side will have relatively more bargaining power than the other side �Bargaining power is constantly shifting during negotiations � Bargaining power is not static � As the parties engage in negotiations, the relative bargaining power of the parties will be changing 27

Bargaining �Bargaining power (more) �Union’s bargaining power depends on: � The cost to the company of disagreeing to the union’s demands relative to cost to the company of agreeing to the union’s demands � Which is cheaper for the company: to agree with the union’s demands or to disagree with the union’s demands? � If it is very expensive for the company to disagree with the union’s demands (e. g. , it’ll trigger a very expensive strike) while it is not expensive for the company to agree to the union’s demands (e. g. , the union’s demands can be easily & cheaply accommodated), then it is more likely that the company will agree to the union’s demands the union has bargaining power at that point in time 28

Bargaining Union Bargaining Power Cost to company of disagreein g with union’s demands Cost to company of agreeing with union’s demands Union Tactics to Increase Its Bargaining Power Union says “We’ll raise your costs if we don’t get what we want” Withdraw cooperation with management Threaten a strike Time a strike to maximize the cost to the company Build support for a strike among key workers who are hard to replace Picket during a strike Union says “We’ll lower your costs if we get what we want” Make a concession 29

Bargaining �Bargaining power (more) �Company’s bargaining power depends on: � The cost to the union of disagreeing to the company’s demands relative to cost to the union of agreeing to the company’s demands � Which is cheaper for the union: to agree with the company’s demands or to disagree with the company’s demands? � If it is very expensive for the union to disagree with the company’s demands (e. g. , it’ll trigger massive layoffs) while it is not expensive for the union to agree to the company’s demands (e. g. , the company’s demands can be easily accommodated), then it is more likely that the union will agree to the company’s demands the company has bargaining power at that point in time 30

Bargaining Company Bargaining Power Cost to union of disagreein g with company’s demands Cost to union of agreeing with company’s demands Company Tactics to Increase Its Bargaining Power Management says “We’ll raise your costs if we don’t get what we want” Threaten layoffs or a plant closing Plan to continue operations during a strike using supervisors or replacement workers Encourage customers to stockpile inventory in anticipation of a strike Threaten a lockout Management says “We’ll lower your costs if we get what we want” Make a concession 31

Bargaining Union Bargaining Power Cost to company of disagreein g with union’s demands Cost to company of agreeing with union’s demands Company Bargaining Power > = < Cost to union of disagreein g with company’s demands Cost to union of agreeing with company’s demands 32

Bargaining �Commitment tactics (Schelling; Walton & Mc. Kersie): tactics designed to make it look like you are committed to your position while hiding room to make future concessions without losing face or credibility �Goal: make the other side think that if they want an agreement that they’ll have to be the side that makes the next concession �Method: make it look like you can’t make a concession � Say or do something that makes your opponent think that your hands are tied on an issue & you can’t make a concession 33

Bargaining �Commitment tactics (more) �Method (more) � Language is critical — imagine a union negotiator that says: � “Your demands for give-backs on medical insurance and pay are completely unacceptable. I just don’t see how we can agree to your demands on these two issues. The union members will never accept those two give-backs and there’s nothing I can do to change that fact. If you keep demanding give-backs on medical insurance and pay, the worker’s would rather go out on strike than agree to such a lopsided, unfair deal!” � While that statement appears firm, it leaves room for future concessions: “In light of your side’s concession on pay, I now see how my side can make a concession on medical insurance” 34

Impasse in Negotiations �Impasse: the parties are unable to reach agreement �Resolving impasses �Continuing negotiations: the parties continue to have a duty to bargain in good faith � The parties can’t just give up �Mediation: a neutral third party (mediator) helps the union & management reach an agreement The mediator schedules meetings, separates the parties if that’d help, carries messages between the parties, makes suggestions, etc. � The mediator does not have the binding authority to impose a settlement � Mediators can be obtained from the Federal Mediation and Conciliation Service (FMCS) � http: //www. fmcs. gov/ � 35

Impasse in Negotiations �Resolving impasses (more) � Interest arbitration: a neutral third party (interest arbitrator) has the authority to fashion a settlement � Types of interest arbitration: Fact-finding: non-binding interest arbitration: the arbitrator can fashion a suggested settlement, but cannot force the parties to accept it � Binding interest arbitration: the arbitrator has the authority to fashion a settlement that the parties are required to accept � Conventional interest arbitration: the arbitrator can fashion any settlement that the arbitrator believes to be reasonable � Final offer interest arbitration by package: the arbitrator must pick the entire final offer package of one side or the other � Final offer interest arbitration by issue: the arbitrator must pick the final offer of one side or the other on each issue-by-issue � � � Interest arbitration is rarely used in the US private sector More common in the US public sector, especially if the government employees don’t have the legal right to strike 36

Impasse in Negotiations �Resolving impasses (more) �Strikes: workers put pressure on the company to change something by withholding their labor & attempting to stop company operations � Types of strikes: � Economic strikes: workers withhold their labor to put economic pressure on the company during contract negotiations � Goal: increase the cost to the company of disagreeing to the union’s contract demands � May result in the company making additional concessions to prevent or to shorten the strike � NLRA strikes says workers have a legal right to engage in economic � Economic strikers cannot be fired or discriminated against � But replacement workers can be hired during an economic � Adds another (very controversial) issue to be negotiated strike 37

Impasse in Negotiations �Resolving impasses (more) �Strikes (more) � Types of strikes (more) � Unfair labor practice strikes: workers withhold their labor to protest the company’s ULPs � NLRA says workers have a legal right to engage in ULP strikes � ULP strikers cannot be replaced � If the company hires replacements for ULP strikers, and if the NLRB finds the company guilty of a ULP, then the NLRB can order the company to reinstate the ULP strikers 38

Impasse in Negotiations �Resolving impasses (more) �Strikes (more) � Types of strikes (more) � Wildcat strikes: workers go on strike in violation of their contract � NLRA does not protect wildcat strikers � They can be fired and replacements hired 39

Impasse in Negotiations � National Emergency Strikes: strikes that threaten the health & safety of the general public � President of US appoints a board of inquiry � Board reports to the President � President directs the Attorney General to seek an injunction to enjoin the strike or lockout for a “cooling off” period of up to 80 days � � FMCS offers mediation Board of inquiry monitors progress of the negotiations � After 60 days, if no agreement, the board reports the final offers of both sides � After 15 days, the NLRB conducts a vote among the workers on management’s last offer � After 5 days, the NLRB reports the vote (60 + 15 + 5 = 80 days) � If still no agreement, the injunction is lifted, the strike can resume, & the President reports to Congress for possible Congressional action 40

Contract Administration �Grievance: a rights dispute in which the parties disagree during the life of the contract about the meaning, interpretation, or application of the contract �Once the parties have negotiated the contract, they need to administer the contract � The parties might disagree on what the contract requires in particular cases — a “grievance” �Grievance procedure: the procedures spelled out in the contract for how grievances are to be resolved �The parties can negotiate and include clauses in the contract that specify how grievances are to be resolved during the life of the contract 41

Contract Administration �Example of a grievance procedure: � Step 1: employee reports the grievance to the union steward, who meets with the employee’s supervisor to try to resolve the grievance � Step 2: if no resolution at Step 1, next the grievance is written down & a meeting occurs with the employee, the union steward, the chief union steward, the employee’s supervisor, & the supervisor’s manager � Step 3: if no resolution at Step 2, next is a meeting of everyone from Step 2 plus the local union president, someone from the company’s HR department, & someone from local top management � Step 4: if no resolution at Step 3, next is a meeting of everyone from Step 3 plus representatives from the national union & from corporate top management � Step 5: if no resolution at Step 4, last step is grievance arbitration 42

Contract Administration �Grievance arbitration: a neutral third party (grievance arbitrator) is brought in to interpret the contract �Arbitration hearing: the arbitrator listens to the arguments & evidence of both sides to the grievance �Arbitration award: the arbitrator decides the grievance in a written decision � Arbitrator cannot change or amend the contract � Arbitrator clarifies & applies the contract � Arbitrator typically considers past practices � If the contract says so (and it usually does), the decision of the arbitrator is final and binding � No appeals: courts typically will not review arbitration awards 43

Unions in the Government Sector �Unions in the US federal government �Relevant law: Civil Service Reform Act (1978) � Federal Labor Relations Authority (FLRA): federal agency responsible for administering labor-management relations for employees of the federal government � http: //www. flra. gov/ � Certain federal employees have a right to unions � Scope of bargaining issues tends to be narrow � Cannot bargain over pay & most benefits (set by Congress) � Strikes by federal employees are illegal � Impasses in negotiations are resolved by the FMCS, by arbitration, & by the Federal Services Impasse Panel 44

Unions in the Government Sector �Unions in state & local governments �Handled by the laws of each state � Minnesota law: Public Employees Labor Relations Act (PELRA) � Text of PELRA: https: //www. revisor. leg. state. mn. us/statutes/? id=179 A � Minnesota Bureau of Mediation Services (BMS): state agency that administers PELRA � http: //www. bms. state. mn. us/ � Minnesota Department of Employee Relations (DOER): state agency that acts as the employer for state employees in Minnesota � http: //www. doer. state. mn. us/ 45

Outline �History of Unions in the US �National Labor Relations Act �Scope of Bargaining Issues �Bargaining �Impasse in Negotiations �Contract Administration �Unions in the Government Sector 46