Labor Relations
CHAPTER 1
Union-Management Relationships in Perspective
Outline
Phases in the Labor Relations Process
The labor relations process includes the following three phases:
Recognition of the legitimate rights and responsibilities of union and management representatives
Negotiation of the labor agreement, including appropriate strategies, tactics, and impasse-resolution techniques
Administration of the negotiated labor agreement—applying and enforcing the terms of the agreement on a daily basis
Characteristics of the labor relations process
The negotiation and administration of work rules vary considerably across public- and private- sector organizations
Are cumulative with each phase depending on the previous phase
Are subject to qualitative variations
Elements in the Labor Relations Process (Exhibit 1.1 indicates these elements)
Focal point of labor relations: work rules (examples of rules are given in Exhibit 1.2)
Pertain to compensation as well as employees' and employers' job rights and obligations (e.g., "justice and dignity," clauses and rules requiring employees to work overtime)
Vary according to their applicability to many occupations and the extent to which they are specific
Reflect the dynamic nature of labor relations as work rule existence and/or consent charges over time (The Acquired Immune Deficiency Syndrome or AIDS, no smoking, and electronic monitoring of employee performance, for example)
Key participants in the labor relations process
Management officials and consultants
Union officials
Employees who have dual loyalties to both the union and the company
The government—National Labor Relations Board (NLRB), laws
Third party neutrals: mediators and arbitrators
Three basic assumptions underlying U.S. labor relations
The adoption and support of a free enterprise (capitalist) economic system in the United States creates an inherent conflict of interest between employers (owners) and employees. Both employees and employers seek to advance their own self-interests
Employees in a free and democratic society have a right to independently pursue their employment interests using lawful means
Collective bargaining provides a process for meaningful employee participation through independently chosen representatives in the determination of work rules
Basic characteristics of the private-sector U.S. labor relations system (Exhibit 1.3):
A bilateral process (union and management) governed by a framework of labor laws
A highly decentralized and localized bargaining structure
Recognition of key legal principles of majority rule and exclusive bargaining representation
Permits use of economic pressure (e.g., strike, lockout, picketing, and boycott)
Encourages use of final and binding arbitration
Significant employer opposition to employee efforts to organize and bargain collectively
Constraints or influences affecting participants' negotiation and administration of work rules
State of the economy: national, international, and firm-specific indicators. Impact of discouraged workers who have given up looking for a job
Labor market (skills, wage levels, supply and demand)
Product or service market (where the company either sells its products/services or purchases key elements for creating its products/services)
Financial market
Technology (equipment, pace and scheduling of work, characteristics of the work environment, tasks to be performed, and information exchange)
International forces—employee reservists in Iraq, free-trade, NAFTA, globalization
Public opinion (influential individuals/organizations within the community and/or attitudes/traditions held by community residents), negative union image, union support for social causes
Union membership (Exhibit 1.4)
Steady decline in total membership
Lower union density (union as a proportion of total labor force)
Causes:
Structural changes in the labor force
Employment shift from manufacturing to service industries
Demographic shifts: female, older, diverse, part-time workforce
Organizational practices to avoid unionization
Economic and political climate: Employment laws reduce demand for union
CHAPTER 2
The History of Labor–Management Relations
Outline
Historical perspective
Two interrelated dimensions:
Relationships between labor and management organizations
Organizational characteristics of labor organizations.
Criteria for comparing the effectiveness of a labor organization:
A labor organization’s structural and financial stability
Its ability to work within the established political and economic system, particularly the wage system
The degree to which the broader social environment, such as laws, media, and public opinion, is supportive or opposed to a labor organization’s goals and tactics
The ability of union leaders to identify and satisfy members’ goals and interests
1869 to World War I
Brief overview of unions in the U.S. before 1869
Guilds, joint associations of employers and craftspeople, local markets, small firms
Factory system in 1850s, improved transportation, larger markets, larger Firms
Article I, Section 8 of U.S. Constitution grants Congress the right to pass laws regulating interstate commerce which includes labor laws
Common law doctrine still in use today is the employment-at-will doctrine
The common law criminal conspiracy doctrine used by employers against unions was ended by the Commonwealth v. Hunt decision
The courts continued to apply the civil conspiracy doctrine.
A labor Injunction is a court order restricting certain activities in a labor dispute
Many employers required their employees to sign yellow-dog contracts, which stipulated that employees may not join or organize a union
Application of antitrust legislation to labor unions
Sherman Antitrust Act (1890) – restricts power of corporations to engage in anti-competitive practices
Loewe v. Lawlor case (Danbury Hatters) – union-organized boycott of Loewe and company was declared illegal
Clayton Antitrust Act (1914) specifically allowed the existence of labor unions
Interpretations of Clayton by Supreme Court watered-down its effectiveness as it became easier for employers to get labor injunctions
The Knights of Labor (KOL)
Goals included long-range economic and social reforms, which were greatly influenced by personal philosophy of Powderly
Pyramid-style organizational structure with centralized authority resting at the top
Strategies included political actions, education, encouragement of cooperatives, and active avoidance of strikes
The KOL failed because of faulty assumptions about:
The halting and reversibility of technological advancements
The extent shared interests of employers and employees and among different types of employees
The lack of protective legislation for unions
The lack of leadership identification with members' interests
The eight-hour workday movement and the Haymarket Riot (1886)
Samuel Gompers strongly advocated the eight-hour work day
Violent aftermath (police and citizens killed) resulted in a backlash against organized labor which included the KOL
The emergence of the American Federation of Labor (AFL)
Formed under Gompers’ leadership from national unions expelled from the KOL
Is not one big union; instead member unions join Federation for its services and retain their separate identities
Goals included an emphasis on short-range material benefits (economic betterment), enhancement of the existing capitalist industrial system, and avoidance of long-term philosophical (social reform) commitments
Strategies and tactics of the AFL:
The use of striking as a viable collective bargaining tactic
Increased involvement in the political arena
To enhance the public status and reputation of organized labor and the collective bargaining process
Organization of the AFL
Exclusive union jurisdiction for each craft or trade
Decentralized authority through voluntary association
The Homestead Incident (1892)
Violent confrontation over wages at the Carnegie Steel Works
Although it represented a victory for management, the strike strengthened the AFL by demonstrating to employees the organization's concern for helping its members
The Pullman Strike (1894)
Protest over unilateral wage cuts while prices for rent and food in the company-owned town remained the same
The American Railway Union (independent from the AFL) faded out of existence owing to negative public opinion; the use of federal troops and injunctions; Pullman management resistance, and lack of support by the AFL
The Industrial Workers of the World (IWW)
Organized in 1905 with the objective of overthrowing the existing capitalistic system by any means possible
Failed because of a lack of permanent membership and financial base, inability to appeal to members' interests, being identified with sabotage and violence, and alienation of the news media and government officials
Red Scare gives reason to pass criminal syndicalism laws and Sedition laws, such as the Espionage Act of 1917 and the Sedition Act of 1918
World War I to World War II
Union organizing after World War I: Problems and prospects
Post-war economic conditions led to unsuccessful strikes that weakened unions
Union membership declined in the 1920s due to aggressive counteractions by employers and organized labor’s inability to overcome anti-union sentiment among potential union members
Recognition strikes lead to passage of the Railway Labor Act
Counteractions by employers
Open shop movement (American Plan)
Blacklisting
Industrial spies
Mohawk Valley Formula
Employer paternalism
Employee representation plan (ERP) or company union
Use of scrip payments
Labor’s inability to overcome anti-union sentiment due to:
Good economic conditions in “Roaring” 1920s
Corruption and racketeering in unions (sweetheart contracts)
Infiltration by political radicals and communists
Rise of the Congress of Industrial Organization (CIO) and industrial unionism
AFL did not want to enroll semi-skilled employees. CIO broke away from the AFL to organize employees in mass production industries (steel, auto, electrical, etc.).
CIO membership grew quickly owing to strong leadership, realistic goals (similar to AFL), effective use of the sit-down strike, passage of favorable legislation (the Wagner Act), and positive changes in employee attitudes towards union
World War II to the Present
Developments in organized labor since World War II
New collective bargaining issues Unions directed efforts toward job security in the face of technological advances, new types of benefits, and wages tied to fluctuations of economic cycles, such as cost-of –living adjustments
Organization of women, minorities, and professionals in the public and private sector service industries
Merger of the AFL-CIO in 1955
Formation of the Change to Win Federation
Voluntary departure of seven large national unions from the AFL-CIO
Dispute over the allocation of resources for organizing activities and grass-roots direct political action
Recent movements to reunite the labor movement
Aspects of organized labor unchanged since World War II
Exclusive representation
Collective bargaining agreements
Government policies of non-intervention in labor relations
Unions involvement in politics
Difficulty in achieving consensus among unions and among union members
Continued pursuit of short-range economic and job security goals instead of long-range reform
CHAPTER 3
Legal Influences
Outline
Origin of Labor Relations Law
Under the preemption doctrine, federal law takes precedence over state law or local ordinances.
The judicial branch of government functions to determine a law’s constitutionality.
Administrative agencies within the Executive Branch:
National Labor Relations Board (NLRB).
Management Reporting and Disclosure (Landrum-Griffin) Act.
Federal Mediation and Conciliation Service (FMCS).
U.S. Department of Labor (USDOL).
National Mediation Board (NMB).
National Railroad Adjustment Board (NRAB).
State and local administrative agencies.
The Norris-La Guardia Act (Federal Anti-Injunction Act) of 1932
Restricted role of federal courts, particularly in issuing injunctions and temporary restraining orders (TRO) and protected right to peaceful picketing and publicity.
Declared yellow-dog contracts to be unenforceable in federal courts.
Encouraged courts to balance legitimate rights of employers and employees.
Expressed congressional support for the process of collective bargaining.
Deficiencies of Norris-LaGuardia Act:
No independent administrative agency charged or established to enforce the Act’s provisions.
No specific employer unfair labor practices (ULPs) were identified and prohibited.
The National Industrial Recovery Act (NIRA) of 1933
Designed to stabilize economic activity.
Allowed businesses to form associations to draw up codes of fair competition.
Standardization of marketing, pricing, financial, and other practices.
National Labor Board (NLB) established to determine violations under Section 7 and help settle disputes.
Section 7 required codes to guarantee employees’ right to unionize.
Deficiencies of the NIRA:
Not effective in protecting employee’s rights to organize and bargain collectively because employers were not required to bargain with unions and the NLB lacked effective enforcement of its orders.
Ruled unconstitutional in 1935 by Supreme Court.
The National Labor Relations (Wagner) Act of 1935
Passed one month after NIRA declared unconstitutional.
Established new labor policies.
Encouraged collective bargaining and prevented employer interference.
NLRB authorized to investigate and decide unfair labor practices (ULPs).
Avoided labor unrest by legal protection for employees’ rights.
Section 7 listed rights of employees (see Exhibit 3.1, page 95).
Section 8 listed ULPs under the NLRA such as:
Discharging or refusing to hire union supporters,
Threatening pro-union workers with poor job assignments or termination,
Using company spies to learn who was organizing a union,
Blacklisting pro-union employees,
Creating “company unions,”
Bargaining in bad faith (discussed in Chapter 6),
Requiring applicants to sign yellow-dog contracts.
The Supreme Court Challenge
Declared the National Labor Relations (Wagner) Act constitutional by Supreme Court in 1937.
Recognized important impact of labor relations on interstate commerce.
Endorsed Congress’ rights to regulate labor relations.
Supreme Court approval and economic conditions lead to huge union membership growth.
Employer Criticisms of the Wagner Act
Labor relations favored unions too much.
Public concern over union strikes, boycotts, refusal of unions to negotiate in good faith, and pressure on job applicants to become union members.
Closed-shop union security clause.
Changes under the Labor-Management Relations (Taft Harley) Act
Congress amended NLRA with the Taft-Hartley Act (LMRA) in 1947.
LMRA addressed deficiencies of the NLRA.
Focused on rights of individual employees and employers.
Protected anti-union individuals from retaliation.
Gave owners and managers bigger voice in opposing the unionization of employees.
Deficiencies of the Labor-Management Relations (Taft Harley) Act:
Did not universally expand free-speech rights.
Required union officers to sign anti-communism affidavits.
Called a “slave labor act.”
Unfair Labor Practices by Unions
A section of unfair union labor practices added to the LMRA including:
Threatening workers who refuse to join or support a labor union,
Paying people to support or vote for a union,
Pressuring an employer to discriminate against hiring an anti-union applicant,
Bargaining in bad faith,
Jurisdictional strikes,
Strikes against employers who are not involved in the labor dispute,
Political strikes—striking in support of a political cause or candidate.
The Closed Shop vs the Union Shop
Union shop security clause.
Agency shop clause.
Open shop, right to work laws.
Employer Opposition to Unionization
Restriction of employers’ right to speak against unionization.
Infringement of employers’ free-speech rights ruled unconstitutional.
Language of court’s decision included in Section 8 of the LMRA.
Right to File a Lawsuit. LMRA permitted parties to a collective bargaining agreement to sue in court for breach of contract.
Managers and Unionization. LMRA clarified that managers did not have a legal right to unionize.
Extended to cover the U.S. Postal service in 1970 and health care institutions in 1974.
Labor Management Reporting and Disclosure (Landrum-Griffin) Act (LMDRA)
Congress passed LMDRA in 1959 to deal with abuses of power and corruption within unions and to guarantee union members certain rights within unions:
Secret ballot elections.
Approval by members of changes in union dues and fees and local constitution.
Filing of annual reports with the USDOL.
Legal rights in officer elections regardless of position in union.
Right to run for office, nominate others for office, make speeches for candidates, and own a copy of collective bargaining agreement.
Section 303, granting neutral, secondary employees sue for recovery of illegal strike/boycott/picket damages.
National Labor Relations Board (NLRB)
NLRB is an independent federal administrative agency, primary interpreter and administrator of the NLRA.
ULP decisions of NLRB could be appealed.
Board composition:
Five-member panel with members serving staggered five year terms.
Members nominated by the President, confirmed by Senate.
Responsibilities and duties of the board:
Prevent employer and union unfair labor practices (ULPs).
Determine representation desires and hold certification elections.
Enforcement of LMRA through NLRB
Board serves as judicial and policy-making role.
General Counsel’s office investigates (prima facie evidence) and prosecutes unfair labor practices; represents Board in federal court, and works with Regional offices to conduct and supervise union representation elections.
Procedure followed in cases involving ULP charges, see Exhibit 3.3.
Contact with the NLRB occurs at the regional or resident office level.
Decisions of the Board are subject to review by court of appeals and then Supreme Court; Courts have agreed with most of Board's decisions.
Employer and Employee Coverage under the LMRA, as Amended
Act covers private-sector employees of all employers whose operations have the potential to vitally affect interstate commerce unless specifically excluded (See pages 104-107 for excluded parties).
NLRB can refuse to assert jurisdiction in de minimus cases. Exhibit 3.2 lists NLRB jurisdictional standards. NLRB can defer also to individual states.
Concerted and protect employee activity
To be protected, the concerted activity must be for a protected purpose described in Sec. 7 of the LMRA and engaged in using lawful means.
Key point: NLRB decides on a case-by-case basis if an act is concerted and is protected.
Opportunity for grievance resolution by employer does not have to precede concerted action.
Interboro doctrine: individuals can act alone if issue concerns term or condition of collective bargaining agreement.
NLRB unfair labor practice (ULP) procedure (see Exhibit 3.3)
Charging party is party bringing ULP complaint to NLBR.
Respondent is party accused of committing ULP.
General Counsel and regional office staff investigate merit of ULP charge.
Charge is dismissed, voluntarily settled, or formally heard before an Administrative Law Judge (ALJ) for decision.
The ALJ’s report and recommendations go to Board for review.
ULP categories: routine ULP case (no new or novel issues) and lead ULP (raises new or novel issues).
Unfair labor practice remedies
Sec 10 (c), LMRA grants Board broad authority to fashion an appropriate remedy for ULP violation: issue cease and desist orders, require posting of written notices, require affirmative action. Punitive damages are excluded.
Board cannot require agreement or make policy for employers.
Board ULP decision can be appealed to federal appeals courts; appeals court decisions can be appealed to the Supreme Court (petition for certiorari).
Decisions must be enforced if:
Decision follows congressional intent in the language of the LMRA.
Decision is supported by substantial evidence contained in the case record.
Assessment of the LMRA, as Amended and NLRB Administration
Academics believe that current labor policy favors the powerful and labor laws discourage unionism, labor contracts allow employers to take back gains by the unions, and replacement workers render strikes ineffective.
Concerns about partisan influences due to Presidential appointments.
The LMRA, unchanged since 1959, is out of sync with substantial changes in the labor relations environment and concerns over weakening of Board interpretations vs focusing on changing economy and political climates.
Pro labor tilt to the Board under Obama.
Labor unions desired reforms:
Better communication with employees during organizing campaigns.
Stronger penalties for ULPs by employers against union supporters.
Elimination of strikers’ replacement.
Employers seek changes:
Employers’ right to create work teams.
Ability to create forums for improving productivity.
Beck rights.
NLRB critics among government officials
Length of time required to complete ULP case decisions.
Efforts made under Obama administration to reduce time that elapses between filing of a valid petition and the representation vote.
Other suggested changes include: strengthening remedies for ULPs, efficient administrative rule-making, reducing shifts in Board policies, union authorization cards use, and insuring that first contract negotiations result in a labor agreement.
Transportation-Related Labor Relations Law (Railway and Airlines)
The Railway Labor Act (1926) was the first comprehensive labor relations law (covers railroads and airlines) passed to promote collective bargaining and to avoid interruptions of transportation services.
Coverage was extended to airlines in 1936.
Relies mainly on collective bargaining, but uses mandatory mediation by National Mediation Board (NMB) for major disputes and turns to the National Railroad Adjustment Board (NRAB) to resolve minor disputes (grievances), and uses final and binding arbitration when necessary.
RLA successful in avoiding strikes, 97% of disputes. Only two airline strikes between 2008 and 2012, only two presidential-appointed emergency boards established to deal with railroad issues. Last railroad strike in 1994.
The National Railroad Adjustment Board (NRAB) is a bipartisan group of 17 union and 17 management representatives. Established to assist with minor disputes under the RLA.
Differences between the RLA and the LMRA:
RLA covers railway and airline industries, LMRA covers most other private-sector employers in interstate commerce.
NMB ballots are mailed, NLRB uses secret ballot.
RLA requires show of support from the majority of all employees; NLRB requires only support from majority of employees actually voting. RLA and LM RA use same certification since 2010.
Higher percentages of employees in the railway and airline industry are represented by RLA compared to private-sector employees covered under the LMRA.
A union cannot strike and an employer cannot lock out until NMB procedures exhausted; under LMRA, parties are allowed to engage in “self-help” actions.
RLA: arbitration of minor disputes is mandatory; LMRA: arbitration procedures are negotiated by parties.
LMRA limits certain union activities including “featherbedding”; The RLA does not contain the same limitations.
The LMRA allows prohibition of “union shops”; RLA does not.
Assessment of the RLA
Success of the RLA has been and is affected by industry conditions, a complicated labor relations process; Any measure of the RLA’s effectiveness must be made with reference to its objectives.
Mediation remains most important method of intervention under the RLA, and its greatest success has been resolving minor issues once large issues have been resolved.
Deregulation legislation in Railroads and Airlines
Airline Deregulation Act of 1978, Motor Carrier Act of 1980, and Staggers Rail Act of 1980.
Increased efforts to avoid strikes, including interventions by Congress.
Results of deregulation are generally greater activity in the industry and structural change (consolidation and merger), and a decline in services offered, as well as increased time for contract negotiations and increased frequency of nonstrike work actions.
Promising Developments Regarding the RLA
Greater union management cooperation.
Reduction of emergency board procedures.
Progress on work-rule issues.
Positive influence of new management and union leadership.
Formation of the National Railway Labor Conference.
RLA appears to have accomplished goal of facilitation cooperative labor relations.
Additional laws that affect labor relations
The Employee Retirement Income Security Act (ERISA) establishes minimum standards for plan participation, vesting rights, benefit accrual and funding, fiduciary responsibilities of plan administrators, and guaranteed payments of benefits accrued under a defined benefit plan through a federally chartered corporation called the Pension Benefit Guaranty Corporation (PBGC), should the plan be terminated. The PBGC is funded from insurance premiums paid by employers whose plans are covered, investment revenues, and the remaining assets of pension plans, which are terminated and taken over by the PBGC.
Americans with Disabilities Act of 1990 (ADA): prohibits employment discrimination against disabled; requires employers to make "reasonable accommodation," except when there is an "undue hardship."
Bankruptcy Act (1984): subjects contract proposal and union negotiations to court review prior to rejection of union contract.
Worker Adjustment and Retraining Act of 1988 (WARN): requires notification of employees, union, and government officials 60 days prior to plant closing or mass layoff.
Racketeering Influenced and Corrupt Organizations Act of 1970 (RICO): prohibits anyone involved in racketeering from being involved in any interstate commerce enterprise.
Employment Discrimination Laws and Executive Orders
Civil Rights Act of 1991 which amended the Civil Rights Act of 1964; prohibits discrimination on basis of race, color, religion, sex, or national origin.
Age Discrimination in Employment Act of 1967: prohibits the discrimination against those over the age of 40.
Equal Pay Act of 1963; equal pay for men and women.
Lilly Ledbetter Fair Pay act of 2009 (FPA); states that each incident of pay discrimination starts anew the time limit for filing a valid claim.
Executive Orders 11246 and 11375: require affirmative action plans of government contractors and subcontractors for minority employees.
Vocational Rehabilitation Act of 1973: requires affirmative action of federal government contract holders toward qualified physically and mentally handicapped individuals.
Other related labor relations laws:
Uniform Services Employment and Reemployment Rights Act. (USERRA) of 1994; Vietnam Era Veterans Readjustment Assistance Act.
Social Security Act of 1935.
Fair Labor Standards Act of 1938.
Occupational Safety and Health Act of 1970.
Family and Medical Leave Act of 1993.