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Employment Law for Business

Chapter 15

Labor Law

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Learning Objectives 1

Discuss history of unions in the United States.

Identify the Norris–LaGuardia Act of 19 32 and what it covers.

Identify the National Labor Relations Act of 19 35 (Wagner Act) and what it requires.

List and explain several collective bargaining agreement clauses.

Explain unfair labor practices (both sides) and give examples.

Learning Objectives 2

Describe the Taft–Hartley Act of 19 47 and its requirements.

Define the Landrum–Griffin Act of 19359 (Labor Management Reporting and Disclosure Act) and its provisions.

Discuss collective bargaining in the public sector and how it differs from the private sector.

Discuss who is covered by the Railway Labor Act and how that act differs from the NLRA.

Statutory Basis

Employees shall 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 or other mutual aid or protection, and shall also have the right to refrain from any or all such activities.

[National Labor Relations Act of 19 35, 29 U.S.C. §§ 151 to 169, § 157, section 7.]

Coming Together on Issues

Labor law is distinct and discrete part of the law governing work.

Involves ‘concerted activity’ by employees regarding working conditions, unionization, bargaining with management.

2018 to 19 uptick in strike activity as economy flourished but wages remained stagnant.

Pandemic dampened activity which revived in 2022 to 23.

Workers’ intention to share in the prosperity they help create.

Collective bargaining: Negotiations and agreements between management and labor about wages, hours, and other terms and conditions of employment.

CBA terms govern employer-employee relationships, replacing many common law (for example, at-will) and statutory provisions (for example, FLSA).

Current Labor union facts/figures 1

Exhibit 15.1: Who’s in Unions?

According to a 2022 report of the U.S. Department of Labor’s Bureau of Labor Statistics, released in January 2023:

Union membership increased by 273,000 to 14.3 million. An additional 1.7 million workers are represented by unions but are not members.

The actual percentage of workers who belong to unions decreased 0.2 percent to 10.1 percent because the growth in the labor market outpaced the increase in union membership.

Occupations with the highest rates of unionization were protective services at 34.6 percent and education, training, and library at 33.7 percent.

Occupations with the lowest rates of unionization were insurance at 1.2 percent and finance and professional and technical services with each at 1.3 percent.

Numerically there are 100,000 more union members in the private sector than the public sector. However, the rate of unionization in the public sector is 27.1 percentage points higher than in the private sector.

Median weekly earnings for union members was $187 higher than for nonunion workers.

Current Labor union facts/figures 2

Differences in the rate of unionization for men and women continues to narrow. In 2022, it was 10.5 percent and 9.6 percent respectively, but in large part this reflects greater declines in unionization for men than women.

Unlike sex, there is no discernible trend in unionization rates on the basis of age.

Black people (11.6 percent) are more likely to be in a union than white people (10.0 percent), Asian people (8.3 percent), or Hispanic people (8.8 percent).

Full-time workers are twice as likely to be union members (11.0 percent) as part-time workers (5.5 percent).

Hawaii has the highest rate of unionization at 21.9 percent.

All states in both the East South Central and West South Central divisions had union membership rates below the national average, while all states in both the Middle Atlantic and Pacific divisions had rates above it.

Source: U.S. Department of Labor, Bureau of Labor Statistics, Union Members, accessed January 2023 Summary, https://www.bls.gov/news.release/union2.nr0.htm.

Historical Accounting 1

1800s: American economy evolved from agrarian to industrial emphasis.

Scale of enterprise grew, jobs standardized.

Individual workers lost bargaining leverage.

Criminal conspiracy laws - Early labor activity charged as common-law criminal conspiracies.

Case: Commonwealth v. Hunt, 1842 sanctioned concerted action, but general judicial hostility continued in 1890s.

Injunctions: court orders requiring individuals or groups of persons to refrain from performing certain acts (for example, strikes) that the court has determined will do irreparable harm.

Potent weapon against labor tactics.

Historical Accounting 2

‘Yellow dog contract’: Agreements employers require employees to sign stating they do not belong to a union and will not join one.

Provided legal bases to issue, enforce injunctions.

Outlawed in 19 32.

Labor Movement Growth post-Civil War.

Violence and mix of political and economic aims of workers

Antitrust attacks: Sherman Antitrust Act, 18 90.

Act intended to overcome monopolistic business practices

Per 1908 case, Unions attacked and prosecuted under Section 1 outlawing “every contract, combination . . . or conspiracy, in restraint of trade....”

Clayton Act of 19 14 exempted union activity as labor movement gained political clout.

Historical Accounting 3

‘Secondary boycott’: Union pressure tactic against companies (for example, suppliers, customers) that deal with employer (outlawed, 19 35).

Constitutional challenges to early legislation addressing labor-management relations:

18 98 Erdman Act recognized the rights of labor organizations.

Supreme Court: voided as beyond federal power only over ‘Interstate Commerce.’

Historical Accounting 4

19 70s+ Decrease in private sector unionization.

Heavily unionized industries decline, automate (manufacturing).

Aggressive anti-unionizing campaigns by employers.

Union concessions during downturns in the economy.

International competition, ‘Globalization’ and trade pacts.

Lack of success in new private sector campaigns.

Public sector union growth.

Labor unions remain important participant in workplace (11% of workers, with regional variations).

Some now-mandated benefits began as bargained concessions to unions.

15% median pay advantage.

Union presence may deter some management-side abuses.

Out of Necessity Comes Change 2

Great Depression Era, continued:

FDR frustration, ‘Court-packing scheme.’

Supreme Court gets message, broadens scope of ‘Interstate Commerce’ interpretation.

‘New Deal’ legislation upheld (including FLSA).

National Labor Relations Act (‘Wagner Act’).

Guaranteed rights to organize and bargain: “concerted action.”

Established National Labor Relations Board (NLRB) as agency to oversee unionization elections and bargaining.

Stated management-side Unfair Labor Practices (none for Labor, yet).

Out of Necessity Comes Change 3

Unions flourished (pendulum), led to expensive strikes.

Taft-Hartley Act 1948 – pro-management response.

Union Unfair Labor Practices (symmetry).

Right-to-work states.

80-day Cooling-off period.

Union Corruption/organized crime linkage.

Landrum Griffin Act 1959 to guarantee internal democracy.

Labor Laws: four primary statutes, detailed 1

Norris–LaGuardia Act (19 32):

Endorsed collective bargaining process.

Restricted use of injunctions in workplace disputes.

Authorized union strike funds.

Voided ‘Yellow Dog Contracts.’

Broadened antitrust immunity.

Paved way for NLRA/Wagner Act 3 years later.

Labor Laws: four primary statutes, detailed 2

National Labor Relations Act of 1935 (‘Wagner Act’) a/k/a Labor’s ‘magna carta.’

Established the right of employees to ‘concerted action’: form unions, bargain collectively, strike.

Established the National Labor Relations Board (NLRB) to administer, enforce the Act.

Set up standards to govern the exercise of power delegated to that administrative agency.

Provided for the judicial review, enforcement of Board orders.

Labor Laws: four primary statutes, detailed 3

National Labor Relations Act (cont’d.)

Established management-side Unfair Labor Practices (ULPs):

Interfere with, restrain, or coerce employees in the exercise of their rights.

Interfere with the formation of a labor organization.

Discriminate in the hiring or tenure of employment or discourage membership in a labor organization.

Retaliate for filing charges or testifying under the act.

Refuse to bargain with the representatives of the employees.

Note: no labor-side ULPs, yet.

Labor Laws: four primary statutes, detailed 4

National Labor Relations Act of 19 35, cont’d. – Concepts 1

Unions	Meaning
Community of interests	Factors employees have in common for bargaining purposes
Bargaining unit	The group of employees in a workplace that have the legal right to bargain with the employer
Shop steward	Union member chosen as an intermediary between union members and employers

Labor Laws: four primary statutes, detailed 5

National Labor Relations Act of 19 35, cont’d. – Concepts 2

Unions	Meaning
Collective bargaining agreement	Negotiated contract between labor and management
Industrial union	Union organized across an industry, regardless of member's job type
Craft unions	Union organized by the employee's craft or trade
Bussiness agent	The representative of a union, usually a craft union

Traditional Employer Hostility Factors

Exhibit 15.2: Why Employers Don’t Want Unions.

Union busting is big business. You might wonder why a business would pay to have an organization come in to the workplace and stop employees’ efforts to unionize. Here are a few of the reasons:

Businesses generally prefer to make their own decisions, without the input of employees.

Bottom-line decisions such as outsourcing, subcontracting, or relocating to take advantage of cheaper labor or other costs would require negotiation with the union, which increases the time to make decisions and may result in a less preferred option.

Due to the long history of contention between labor and management, being unionized often gives the workplace a feeling of “us versus them,” which can adversely impact morale and productivity.

An employer looking to sell their business looks less appealing if a union is in place. This can lead to a lowering of the potential selling price for the business.

Labor Laws: four primary statutes, detailed 6

National Labor Relations Act – ‘Concerted Activity.’.

Section 7 of the NLRA guarantees employees the right to engage in ‘concerted activities’ for mutual aid or protection.

Include union organizing, the discussion of unionization among employees, and the attempt by one employee to solicit union support from another employee.

Need not involve a union.

Covers activity by as few as a single employee.

Labor Laws: Four Primary Statutes, Detailed 7

National Labor Relations Act – Unions

Composed of nonsupervisory or nonmanagerial employees, including part-time workers.

Excluded - Agricultural and domestic workers (systemic racism excluded those jobs, done mostly by African Americans), independent contractors, and those employed by spouse or parent.

Shop steward.

Elected by the members.

Intermediary generally between the union and the employer.

Organized by industry or craft/trade.

Labor Laws: Four Primary Statutes, Detailed 8

National Labor Relations Act – ‘Good Faith’ Bargaining

Mandatory subjects of bargaining.

Wages, hours, and other conditions of employment, which, by law, must be negotiated between labor and management.

Case 2, Gimrock Construction v. IUOE Local 487. Bad faith = absence of good faith.

Permissive subjects of bargaining.

Non-mandatory subjects that can be negotiated between labor and management.

Closed shop: Employer hires only union members.

Considered union bad-faith bargaining to propose it.

Labor Laws: Four Primary Statutes, Detailed 9

Exhibit 15.4: Selected Collective Bargaining Agreement Clauses.

Wages—including cost-of-living increases, production increases, learners’ and apprentices’ overtime. Benefits—including vacations, sick pay, holidays, insurance. Hours—including overtime and determinations about assignment. Seniority—involves how it is calculated (for example, overall organization vs. unit) and how it is used (for example, amount of vacation time or factor in getting a promotion). Management security—employers may make their own decisions about how to run the business as long as they are not contrary to the collective bargaining agreement or law. Union security—these clauses recognize the union’s legal right to represent the employees in the bargaining unit and add to the stability of the union. Within this category are.

Dues checkoff—right of a union to have the employer deduct union dues from employees’ wages and turn them over to the union. • Union shop—requires all employees to join the union within a certain time of coming into the bargaining unit. • Agency shop—requires all employees of the bargaining unit to pay union dues, whether union members or not. • Maintenance-of-membership—employees who voluntarily join a union may leave only during a short window period prior to agreement expiration.

Labor Laws: four primary statutes, detailed 10

Grievances—sets forth the process and procedures for handling disputes over the meaning of the CBA or employee discipline. Items related to and/or included in the grievance procedure include.

Just cause—or related standard for employee discipline is normally stated in the contract.

Arbitration—often the last step in a grievance procedure. This clause specifies issues like the selection of the arbitrator.

Reopener—specifies if and when certain topics can be renegotiated before the expiration of the CBA. No-strike, no lockout—parties agree that the employees will not strike or will only do so under limited circumstances and that employers will not engage in lockouts. Instead, the grievance procedure will be used to handle labor disputes.

Organizing Campaign Prohibitions

Exhibit 15.3: What to Avoid During an Organizing Campaign.

Threats—about losing benefits, losing jobs, or more onerous working conditions.

Withhold—improvement to wages or benefits that would have occurred absent the organizing drive.

Discipline or Discharge—employees for union activities.

Provide—new or better benefits as an inducement to reject the union.

Promises—about improved benefits if workers reject the union.

Spy on or Interrogate—employees about union activities or sympathies.

Promises—about improved benefits if workers reject the union.

Prohibit—union communication if you would allow nonunion communication in the same situation.

Labor Laws: four primary statutes, detailed 11

National Labor Relations Act – ‘Duty of Fair Representation.’

Requires the union to represent all employees fairly and non-discriminatorily.

Duty of a union, even if members may not have liked the outcome.

Case: Air Line Pilots Association International v. O’Neill.

Labor Laws: four primary statutes, detailed 12

National Labor Relations Act – Collective Bargaining Agreements.

Term for the contract that is reached between the employer and the union about workplace issues.

Management security clause: Parties agree that management has the right to run the business and make appropriate business decisions as long as applicable laws and agreements are complied with.

Midterm negotiations: Collective bargaining negotiations during the term of the contract.

Labor Laws: four primary statutes, detailed 13

NLRA – Strikes and Lockouts.

NLRA permits certain strikes by employees as a legitimate bargaining approach that leverages economic and public pressure.

Picketing: Union members carrying signs in front of the employer’s business that tell of an unfair labor practice or strike.

Wildcat strike: Not sanctioned by the union.

No-strike, no-lockout clause: Labor and management agree that labor will not strike and management will not stage a lockout.

Labor Laws: four primary statutes, detailed 14

Taft-Hartley Act, 19 47 - amendment to NLRA enacted to curb labor excesses.

Union Unfair Labor Practices:

Restrain employees in the exercise of their rights or employers in the selection of their representatives for collective bargaining.

Cause an employer to discriminate against an employee.

Refuse to bargain with an employer.

Engage in jurisdictional or secondary boycotts.

Charge excess or discriminatory initiation fees or dues.

Cause an employee to pay for goods or services that are not provided (‘featherbedding’).

Labor Laws: four primary statutes, detailed 15

80-day Cooling-off Period: President may order sides back to table when strike or lock-out would imperil national health or safety.

Key Terms	Meaning
Right-to-work laws	Permits employees to choose not to become a part of the union
Union shop	Union and management agree that employees must be members of the union
Union shop clause	Provision in a collective bargaining agreement allowing a union shop
Agency shop clause	Requires non-union members to pay union dues without having to be subject to the union rules
Free riders	Bargaining unit employees who do not pay union dues but whom the union is still obligated to represent

Bargaining Tactics: Strikes

Exhibit 15.6: Types of Strikes.

Economic strike—is a consequence of a breakdown in negotiations. Protected activity (assuming a legal impasse has been reached).

Unfair labor practice strike—called by union because of an employer’s unfair labor practice. Protected activity.

Sympathy strike—union not involved in strike also strikes to show solidarity and support for striking union.

Wildcat strike—strike not authorized by union. Generally not protected activity.

Intermittent strike—strikes that occur from time to time and are not announced. Not protected activity.

Labor Laws: four primary statutes, detailed 16

Landrum–Griffin Act of 19 59 - also known as the Labor Management Reporting and Disclosure Act.

Enacted in response to congressional investigations into union corruption from 19 57 to 19 59.

Purposes:

Establish democratic processes in union governance.

Provide union members with a minimum bill of rights.

Regulate activities of union officials and uses of union funds.

Set forth specific procedures for holding union elections.

Provisions were enacted to safeguard union funds.

Labor Laws: four primary statutes, detailed 17

Exhibit 15.9: Union Members’ Bill of Rights.

Key provisions of the Landrum–Griffin Act include.

Union members have the right to attend union meetings, vote on union business, and nominate candidates for union elections.

Members may bring an agency or court action against the union after exhausting union procedures.

Certain procedures must be followed before any dues or initiation fee increases.

Except for the failure to pay dues, members must have a full and fair hearing when being disciplined by the union.

Labor Relations in the Public Sector 1

Relatively fertile setting for labor organizing.

Large numbers of workers in similar jobs (for example, teachers).

‘Essential’ governmental services, difficult to outsource (for example, first responders).

Federal employees.

US employees exempted from NLRA provisions.

Federal restrictions prevent federal unions from conducting direct bargaining over wages and benefits, and from striking.

Civil Service Reform Act of 1978 established the Federal Labor Relations Authority (FLRA) to administer federal sector labor law.

Labor Relations in the Public Sector 2

State, county, and municipal public employees.

Divided into three major categories:

Professional associations.

Craft unions.

Industrial-type unions.

Largest professional employees organization is the National Education Association (NEA).

Difference between public and private collective bargaining.

Federal legislation and most state statutes do not contain a right of public employees to strike (but note: the ‘blue flu’ and similar tactics).

Railway Labor Act

Specialized 19 26 statute, given importance of RR industry in US economy.

Expanded to include airline industry in 19 36 (but trucking excluded – covered by NLRA).

Creates complications for mixed-mode logistics businesses.

RLA Contrasts:

One union/craft or class (broadens communities of interest).

Created National Mediation Board (includes arbitration) to discourage strikes, lock-outs.

Management Tips

Despite national trends and employer preferences to maintain a union-free workplace, workers continue to join unions. Following the tips below can help avoid problems resulting in liability for violating labor laws:

Remember that collective action by employees is legally protected and does not require the presence of a union.

Know the kinds of things the employer can legally do to influence the unionizing decision, and do only those things that are permissible.

Once the union is in place, conduct all negotiations only with the union representatives. Avoid making side deals with individual employees.

Treat the collective bargaining process as you would any business activity. Do not invite unfair labor practice charges by engaging in activity that could be deemed a refusal to bargain in good faith.

Know what the law requires—the employer need not do any more than the law requires in permitting the union to conduct its business. Know well what the employer can and need not do. • Keep the lines of communication open between labor and management.

Try to keep the “us versus them” mentality from having a negative impact on the collective bargaining process. It can be difficult to avoid, but if you can, it helps negotiations stay on an even keel without letting egos get in the way.

Chapter Summary

Before the passage of the Norris–LaGuardia Act in 19 32, there was a lack of legal protection for unions.

The Wagner or National Labor Relations Act (NLRA), established the basic structure of how labor (union) management relations function. It created the National Labor Relations Board which oversees union elections and hears cases involving unfair labor practices.

The NLRA was amended twice. First, by the Taft–Hartley, or Labor Management Relations Act, which established union unfair labor practices to match the original set of employer unfair labor practices. Second, by the Landrum– Griffin, or Labor Management Recording and Disclosure Act, which established a bill of rights for union members.

Railroad and airline workers are covered by the Railway Labor Act which created the National Mediation Board.

The federal government and the majority of states have their own distinct laws governing unions in the public sector.

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