BUS 372 week 1 discussion 1&2
mrsbrowneyez
bus_372_chapter_1.pdf
Learning Objectives
After completing this chapter, you should be able to:
• Evaluate the roles of the three major players in labor relations.
• Describe union formation and the reasons why unions are formed.
• Compare and contrast the different types of unions and union structures and
organizations.
1Introduction to the Study of Labor Relations
Mark Humphrey/Associated Press
Introduction
Managers of businesses deal with many varied employment issues. They encounter challenges and
issues such as wage and hour disputes, discrimination claims, health care coverage, and employee rights.
Whether the workplace is represented by a union adds further layers of responsibility.
The presence of labor unions in the workforce relates to the field of study known as labor relations,
and this textbook is meant to introduce you to some of these important concepts. A labor union consists
of workers who have come together under state or federal law, are legally recognized, and can bargain
with their employer regarding the terms and conditions of their employment. Labor relations is the
study of unions, management, and their interrelationship.
You will learn about the early history of labor in the United States and why workers formed unions.
Conditions in factories during the 1800s can seem shocking, but an understanding of this era will lay a
foundation for your study of why later laws were enacted. You will learn about the difference between
organized labor in the private versus public sectors and why this distinction is important. Although this
may seem a subtle dividing line at first, it is in fact a significant one that has wideranging repercussions,
and your understanding of it will be essential to your role as a manager. The presence of a labor union
will obligate you to comply with extensive laws and administrative procedures.
Likewise, laws relating to employees, or wage and salary workers, even if they are not unionized, are
also significant. Unionized or not, your relationship with employees will require an indepth knowledge
of labor law and labor relations. An understanding of the culture of labor will add immeasurably to your
ability to manage both ethically and legally.
1.1 Union Membership
What is the likelihood that you will work in employment with a union presence? Although labor union
membership has been diminishing at a consistent rate, unions are still viable entities that wield political
and economic power. Approximately 14.5 million workers belonged to unions in 2013, or 11.3% of all
workers (Bureau of Labor Statistics, 2013). Compare that statistic to the year 1983, in which 20% of all
workers, or 17.7 million, were union members (Bureau of Labor Statistics, 2014b). Figure 1.1 shows the
decline in both the number and percentage of union members between 1983 and 2012.
Figure 1.1: Union affiliation of employed wage and salary
workers, annual wages, 1983–2012
The total number of workers affiliated with unions decreased from 17.7 million in
1983 to 14.4 million in 2012.
U.S. Bureau of Labor Statistics.
In 2012, unions represented 15.9 million wage and salary workers. This includes both union members
(14.4 million) and workers who are not affiliated with any union, but whose jobs are covered by a union
contract (1.6 million). In 2012, a total of 7.3 million employees in the public sector belonged to a union,
compared to 7 million union workers in the private sector. Public sector workers (35.9%) had a much
higher union membership rate (35.9%) than private sector ones (6.6%) (Bureau of Labor Statistics,
2013). Figure 1.2 shows the relative proportion of workers in private unions (at the top of the chart) and
the much larger percentage of workers in governmental public unions (at the bottom of the chart)
during the years 2011 and 2012.
Within the public sector, local government workers—including heavily unionized fields such as teachers,
police officers, and firefighters—had the highest union membership rate, at 41.7%. Examples of private
sector industries with high unionization rates include transportation and utilities (20.6%) and
construction (13.2%). Agriculture and related industries have low unionization rates (1.4%), as do
financial activities sectors (1.9%) (Bureau of Labor Statistics, 2013).
Figure 1.2: Union membership rate of employed wage and
salary workers, by industry, annual averages, 2011–2012
Union membership rates from 2011 to 2012 declined in public sector industries
and in private sector industries.
U.S. Bureau of Labor Statistics.
Despite a decline in membership, the likelihood of encountering unionized employees is significant, and
in some industries, probable. In 2012 more than 15.9 million workers were represented by a collective
bargaining agreement (Mayer, 2014).
What is a labor relations issue? On any given day, the news reflects a multitude of labor issues, all of
which impact business. In one part of the country, a strike or work stoppage might be ending, with
employees returning to their jobs. In another, 30,000 grocery store workers might authorize a walkout if
an agreement is not met. In 2013 four Tennessee workers filed a grievance with the National Labor
Relations Board (NLRB), the federal agency that oversees labor issues in private industries, claiming
that they were being coerced to join a union. Meanwhile, in 2013 a union in San Diego that offers sheet
metal workers an apprenticeship with the prospect of earning $70,000 upon graduation was overrun
with applicants. As you can see, the issues are varied, far reaching, and impactful.
1.2 The Three Main Players in Labor Relations
Let us begin our discussion with an overview of the three major players in labor relations: (a) state and
federal governments; (b) labor unions, which consist of employees; and (c) management or the
employer. Each one will be discussed separately.
The Government
When we use the term government, we are referring to a wide range of entities. Recall that there are
both state and federal governments. State governments are administered by the state executive
branch, the part of the government that consists of the governor and various state administrative
agencies. The governor may issue executive orders, which are enforceable against state employees
and state administrative agencies. If, for example, the governor signed an executive order requiring all
workers to be drug tested, this mandate would not apply to private workers but only to state workers.
A state administrative agency is a governmental entity that oversees a particular area that requires
expertise, such as labor, and makes laws by holding hearings. Each state has its own labor agency that
governs labor issues and may issue opinions about labor disputes. New York, for example, has the New
York State Department of Labor, an agency that enforces state labor laws regarding the minimum wage,
hours of work, conditions of work, unemployment insurance, and other issues.
What laws are made by a state executive branch? The governor may propose a law, but it must be
passed by the legislature—so it is untrue that the governor makes laws, other than executive orders.
Administrative agencies often hold hearings that are similar to courts. They are presided over by an
administrative law judge who “makes laws” by ruling on controversies. It is accurate to say that
administrative agencies make laws in the form of opinions emanating from these hearings.
The second branch of government that makes laws regarding labor is the legislative branch. A
legislature consists of representatives elected by the people for the purpose of passing state statutes
(legislation) to govern the state. Each state may have a different name for its legislative branch, but they
all perform the same function: They pass statutes or state laws. A labor law that a legislature might pass
would be one stating that children under age 14 may not be employed in a fulltime job.
The third branch is the judicial branch, which consists of the courts in that state. Every state has its
own court system, and in these courts the laws formulated by the executive branch and the legislature
may be challenged and reviewed. Although courts do not necessarily make laws, they write decisions
that interpret the law. A court’s interpretation of the law stands as important language for what the law
actually means. You will read court cases throughout this textbook that interpret important statutes
concerning workers and their rights. A court’s interpretation of what a statute means may be much
different from your own. The court’s interpretation of statutes is not a precise science—which can result
in a hodgepodge of laws, depending on which state you study.
All three of these entities taken together—the executive branch through the governor, the legislature,
and the courts—make laws that form the building blocks of employees’ rights and duties. When
speaking of state labor law, therefore, we mean not one law but composites of laws as represented by
the aggregate of the three branches. A schematic of these branches is represented in Figure 1.3.
Figure 1.3: Overview of how state law is made
State labor law is a composite of laws, as represented by the aggregate of the
legislative, executive, and judicial branches.
The state governments and the federal government coexist and function on two parallel planes. The
states deal with some issues, and the federal branch deals with others. Discerning which issue is covered
by which entity is often a complex task and beyond the scope of this textbook.
The federal level has the same system that also consists of three branches: the executive, legislative, and
judicial. The federal executive branch is headed by the president, who is empowered under the U.S.
Constitution with veto power over congressional legislation, as well as the power to recommend
legislation. The president has powers regarding strikes, especially when they threaten national welfare.
In this sense presidents “make laws” regarding labor. Some presidents have used their political powers
to greatly impact the power and reach of unions, whereas others have used the same powers to diminish
their strength.
Under the executive branch are also federal administrative agencies. At the federal level, the NLRB is
the most important administrative agency that oversees federal labor law and union activity for private
industry. The NLRB holds hearings to resolve important labor disputes; these operate much like a court
proceeding.
The federal legislative branch is named Congress, and it passes statutes, some of which have to do with
labor. Throughout this textbook, we will speak of federal laws with names like the National Labor
Relations Act or the Labor Management Relations Act. These are just two examples of laws passed by
Congress that impact unions.
The third branch is the federal judicial system, or court system, which also plays a significant role in
labor relations. Courts hear controversies and issue written opinions. These judicial opinions form a
body of law called case law; for example, there are thousands of federal court decisions pertaining to
labor issues. These decisions are instructive about what the law is, so reading cases is an important part
of understanding labor relations. Throughout this text you will read actual court decisions pertaining to
topics in the chapters and see the courts’ reasoning on complex issues.
Another way in which courts play an essential role in labor relations is by issuing injunctions, which are
orders by a court to do a specific act, or refrain from doing an act. For example, a court might issue an
injunction against a striking union (a union that is refusing to work), ordering its workers to return to
work; or an injunction might order management to refrain from conducting surveillance of striking
workers. Taken together, federal legislation (statutes), federal court decisions (judicial), and
presidential power and administrative agencies (executive) form a body of federal labor relations law.
Figure 1.4 illustrates the federal sources of labor law.
Figure 1.4: Federal sources of labor law
Taken together, the legislative, executive, and judicial branches form a body of
federal labor relations law.
In summary, the role of the government in labor relations takes place via the courts, where judges make
decisions about labor controversies. Administrative agencies such as the NLRB oversee the labor
process, and the legislative branch passes statutes that oversee labor, such as the National Labor
Relations Act.
Labor Unions
The next player in the field of labor relations is the union itself. A labor union is a collective body of
workers who usually join together to achieve higher wages and certain benefits. Once a labor union is
formed at a business or within an industry, management is obligated to sit down and negotiate an
agreement with that union’s representatives; this agreement is called a collective bargaining
agreement (CBA). The process of labor meeting with management to negotiate is termed collective
bargaining.
The collective bargaining agreement is a contract that sets out in detail the understanding between labor
and management of the terms and conditions of employment, such as wages, vacations, and hours
worked per week. By forcing management to come to the bargaining table and hear labor’s concerns and
address each one, the power differential between labor and management is diminished. Without a labor
union, this right to collectively bargain would not exist.
In addition to compelling a collective bargaining agreement, another advantage of a labor union is its
ability to strike, thus shutting down an employer’s ability to produce its product. This economic threat
may force an employer to bargain and reach an agreement with the union so that the workers will
return to their jobs and production can resume. The threat of a strike may compel management to
concede to better conditions for workers. Thus, the collective nature of a union—the idea that there is
strength in numbers—works to improve working conditions. Without a union, workers would have a
difficult time organizing or presenting a united front.
Unions also hold important economic and political sway outside the confines of a business. Consider that
more than 14.5 million workers belong to a union, and each worker pays union dues. Unions therefore
have millions of dollars to spend. One way they spend that money is by supporting the election of
political candidates who are prolabor. Unions’ influence on elections may have a significant ripple
effect. If a prolabor president is elected, he or she will have the authority to appoint judges who oversee
labor disputes and select members of the NLRB, which sets the country’s labor policy.
With 14.5 million members, unions are also a powerful political force. Assuming that union members
vote the same way, the size of their organizations alone could affect the outcome of an election. The
heads of labor organizations are often powerful and influential people who are skilled at representing
the needs of the workers and shaping the American people’s view of labor.
Historically, labor unions first formed when employees became tired of suffering brutal working
conditions that featured few rules governing the number of hours worked, safety of conditions, or fair
pay. Although initial organizing improved some aspects of work, unions continued to grow because
employees were still paid poorly and remained unprotected in other areas, such as safety, medical
coverage for injuries, health benefits, or retirement funds. By collectively organizing, employees realized
they had the power to improve their working lives.
Union power and activities can also negatively affect workers, however. The coal mining industry
provides a dramatic example of this. In what is referred to as the Hocking Valley Coal Miners’ Strike of
1874, workers went on strike when the company slashed their wages. Many of the miners and their
families lived in companyowned housing. When they went on strike, the company evicted the miners’
wives and children from their homes and hired armed guards to harass them. The workers had no place
to live and created tent cities for their families. The armed guards went on a moving train through one of
the encampments, firing rifles at the workers and their families. The strikers retaliated, killing 16 guards
in the process. The violence was not quelled until the army was called in to end the dispute (Cotkin,
1978).
Such tragedies are part of America’s labor history. This example demonstrates that although labor
unions’ goal is to improve the lives of workers, its pursuit has also been marked by incidents of violence
that have left a lasting impression on the collective conscience of the American people. For more
information on the Hocking Valley Coal Miners’ Strike, click here
(http://www.ohiohistorycentral.org/w/Great_Hocking_Valley_Coal_Strike_of_18841885?rec=501) .
Employees
The field of labor relations is concerned with unions, which are formed by employees. Understanding
who is and is not an employee will be essential to your understanding of who can form a union.
Monkey Business Images/Thinkstock
A roofer is an example of an independent
contractor, someone who is hired for a
specific job, paid for completing that job,
and subject to his or her own control
rather than an employer’s.
An employee is a worker hired by the employer to perform certain tasks under the employer’s direct
supervision. Generally, employees are characterized by the following: Their employer dictates what time
they will come to work, exactly what job they will do when they get there, where the work will take
place, and how much the employee will be paid. In short, the employer controls how, when, and where
the employee works.
Independent Contractors
Independent contractors, on the other hand, are not
employees because they are not under the control of an
employer. Instead, they work at their own discretion. For
instance, if you needed a new roof for your home, you
could hire a building contractor. That contractor would
arrive at your home at a time he chose, use materials he
selected, install the materials in a manner he thought
best, and complete the job at his own pace in his own
way. Unlike an employee, independent contractors are
usually hired for one job, paid once instead of on a
continuing basis, and subject to their own control, not
the employer’s. As a result, the homeowner in this
example would not be deemed an employer, and the
roofer would not be an employee but instead an
independent contractor.
There are many grey areas to independent contractors,
however, and thus ongoing debate about whether certain
types of workers are in fact employees or independent
contractors. The distinction is not always clear, but the ramifications of the classification are significant.
One reason that employers classify workers as independent contractors is so the employer does not
have to pay for that worker’s Social Security or health benefits. Classifying a worker as an independent
contractor also means the worker cannot be part of the union.
In any event both the courts and the NLRB vacillate about whether a group of workers are in fact
employees. Would you think, for example, that graduate teaching assistants are employees and thus may
form a union? In the 2004 decision Brown University, the NLRB ruled that “graduate student assistants
who perform services at a university in connection with their studies are not statutory employees within
the meaning of Section 2(3) of the National Labor Relations Act, because they have a primarily
educational, not economic relationship with their university” (Brown University v. NLRB, 2004). As a
result, the teaching assistants were not allowed to unionize. Thus, the classification of a worker as an
employee and the ability to discern which workers will be classified as employees and who will not is
essential in understanding who may and may not unionize. To read the full Brown University v. NLRB
2004 decision, click here (http://mynlrb.nlrb.gov/link/document.aspx/09031d45800076ac) .
Management and Employers
The third major player in labor relations is management. Management may consist of salaried workers,
as opposed to those paid on an hourly basis. Salaried workers are often referred to as exempt, which
means they are exempt from the Fair Labor Standards Act, whereas hourly employees are called
nonexempt because they are under the purview of the act.
Management can range from the legions of supervisors at a large corporation to a twoperson business
that consists of the owner (management) and the worker. In the context of labor relations, it is
important to identify who is a supervisor because a significant legal line is drawn between management
and labor (workers).
If a particular business is governed by the National Labor Relations Act, one part of the act dictates what
management is obligated to do and another relates to unionized workers. Managers sit on one side of the
table when the parties negotiate a contract, and the workers or their union representatives sit across
from them. Thus, in businesses in which workers are represented by a labor organization, the dichotomy
between management and workers has legal, social, political, economic, and cultural ramifications.
Management has a different perspective and group of needs that are often diametrically opposite to that
of labor. The pressures on managers include producing a quality product or service, competing in a
global marketplace, keeping costs to a minimum, and retaining satisfied customers. Management is
concerned with the bottom line: If the company is not making money then it will go out of business.
Therefore, cost is the utmost concern. Labor, on the other hand, wants to earn a fair wage and work in a
safe environment. But what is a fair wage? What is a safe environment? How much will it cost?
There are pressures on every sector that complicate seemingly simple issues. For example, management
might want to cut costs, which might mean decreasing health benefits for employees. Or the company
may wish to move to a different section of the country where costs are lower, but that means all workers
in the current facility will lose their jobs. There is a natural tension between the group that wants to
compete at the cheapest price and the group that wants to work in an environment that provides basic
necessities.
The resulting tension may lead to dissatisfaction on the part of both management and employees.
Employees can feel especially helpless to change their working conditions or discounted if they bring
problems to management’s attention. Employees who feel unheard and powerless to change their work
environment often find unionizing empowering, because it forces management to listen to concerns and
make necessary changes. There is a direct correlation between discontent and unionization. On the
other hand, having management listen to and work with employees so they are part of the decision
making process helps diminish such discontent.
If a union is formed in a particular business, the manager must learn the rules and regulations governing
labor relations very quickly. Unionization presents various legal requirements and lists of do’s and
don’ts that management must be aware of, comply with, and educate its staff about or face serious
consequences that include fines and expensive legal costs.
Because the stakes are so high, there is a high demand for people trained in the study of labor relations.
Employment opportunities in this area include union organizers, managers with labor experience,
negotiators, mediators, neutrals, arbitrators, and labor attorneys, as well as judges, administrative
hearing officers, and support staff.
Watch This
To view a video concerning the
National Football League’s collective
bargaining agreement, visit
1.3 Introduction to Unionization
At the heart of labor relations is the concept that employees have much more power when they join
together and collectively present concerns to management through a union. A union is typically an
organization whose function is to protect the rights of employees, whether in terms of wages, hours,
conditions of employment, grievances, disputes, or any other function of the work environment.
We will learn from the history of unions discussed later in this text that when employees band together
and make demands of their employers, their work conditions often change for the better. Wages
increase, workplaces become safer, and employee grievances are heard and resolved. According to a
2003 Economic Policy Institute study, some of the advantages enjoyed by unionized workers include a
28.2% greater chance of getting health insurance and a 53.9% better chance of having a pension. The
decline of unions since the 1950s, on the other hand, has resulted in significant wage decreases as well
as wage inequality (Mishel, 2012).
There is a downside to organized labor, however. Economists are divided about whether unions drive up
the price of goods by demanding pay that is not representative of supply and demand. As a result, unions
are often viewed as inflating the cost of living. In addition, because union members can go on strike and
shut down a business, they can have serious and deleterious effects on the national economy.
Furthermore, in some of the largest unions, officers have been convicted of fraud and corruption, giving
unions a reputation for illegal activities.
Political leadership in the United States has also run the gamut from being proactive about labor—such
as President Franklin D. Roosevelt—to being antiunion, as some considered President George W. Bush.
In short, the American people and their leaders are generally conflicted about whether unions are a
positive force; this conflict impacts every aspect of the field of labor relations.
Collective Bargaining
Collective bargaining is the process whereby the union represents employees in formulating a contract
with management. Before that can happen, however, there are a number of steps and conditions to be
fulfilled. First, the employees must belong to an identifiable group of workers called a bargaining unit.
A bargaining unit is a discrete group of workers within a plant, firm, occupation, or industry that, on the
basis of commonality of interest or production process, is determined by the NLRB to be the appropriate
unit for collective bargaining purposes. For example, workers who have a commonality of interest, such
as working in the same plant, or workers engaged in the same industry like building cars could be a
bargaining unit. If the bargaining unit is recognized by the NLRB, then the unit is the only one that can
negotiate with management. The end product of collective bargaining is a collective bargaining
agreement. You may wonder what this looks like. The following video shows you an example of the
agreement that was hammered out by the National Football league to cover the years 2006 to 2012.
This is important because one of the main reasons to form a
union is to force management to bargain with the union over the
terms and conditions of employment. The union is the exclusive
representative for all the employees within the bargaining unit.
Exclusive representation means that management cannot enter
into separate agreements with different workers. Once workers
are officially recognized as a union, management is mandated to
https://www.youtube.com/watch?
v=_pKPLIt3ZO0
(https://www.youtube.com/watch?
v=_pKPLIt3ZO0)
deal with that union and bargain in good faith, which means
management and workers must come to the bargaining table
with the intent to enter into a final agreement that will spell out
the terms and conditions of employment.
Under the National Labor Relations Act, the federal law that
governs unions, there are certain employees who may not form a bargaining unit. These include
supervisors, independent contractors, managers, and agricultural workers, who are all deemed exempt
from the act.
When the union negotiates a collective bargaining agreement with management, it is essentially a
contract that governs the working conditions. To negotiate the CBA, the union may send representatives,
or the workers themselves may elect other workers to represent them at the bargaining table. Once an
agreement is written, it is presented to the employees for a vote; a majority vote means the agreement is
ratified, or approved. If ratified, both management and the union must operate under the CBA for the
length of that agreement or they will be in violation of it.
Note that when a majority of workers vote for the agreement, the minority—even if it is 49% of the
workers—is still governed by the terms of the contract, even if they do not agree with the wages, hours,
or conditions of employment that the union and management agreed on. Though all of the terms
negotiated by the union representative might not be satisfactory to each individual, by being employed
at that particular place they concede their power to the union and its representatives.
Reasons Why Workers Unionize
There are many theories for why employees tend to unionize. The preceding material emphasized the
concept that there is strength in numbers. But if the work environment was satisfying to all workers,
would there be any unionization? Dissatisfaction with working conditions combined with management’s
refusal to deal with complaints is one of the most powerful and motivating reasons workers feel the
need to unionize (Manktelow, n.d.).
The next chapter will go into detail about the early history of labor unions in America. But in general, in
the 1800s there were no rules or regulations governing the workplace. There were no limitations on
how many hours someone could work, nor were there rules or regulations about safety conditions. In
one example, workers in factories that caught fire died because management had nailed the doors and
windows shut, which made it impossible for them to escape. You will see a correlation between
unionization and the mistreatment of workers by employers.
Even with the advent of labor laws to protect workers, there remained many reasons for them to
unionize. Many employers ignore the complaints or grievances of their employees, treat workers
disrespectfully, allow unsafe working conditions, and pay unfair wages. Employee perception that
management favors one employee over another in the application of rules is cited as one of the top
reasons for work dissatisfaction leading to unionization (Mitchell & Simpson, 2009).
Employees feel motivated to unionize when they perceive a lack of job security and feel that a union
would ensure both their livelihood and foster a more respectful and responsive workplace. In addition,
the perception that a union will effectively correct unfairness in the workplace is also a key motivator
(Deckop, 2006). As mentioned previously, another benefit of unionization is an increased national
political presence. Unions give workers a strong voice on issues of national concern such as health care
and education. They also contribute large sums of money to political candidates who take into
consideration labor’s view when proposing or opposing legislation.
Employees who are union members are often proud to belong to an organization that has a great deal of
power. Employees report feeling positive on a personal level about belonging to a group as well as about
the benefits a union can bestow by virtue of its size and organization.
In the News: Casino Workers Vote to Join Union
Based on a newspaper article by Brown, M. Graton Casino Workers Vote to Join Union (July 22,
2014), http://www.pressdemocrat.com/news/2420738181/gratoncasinoworkersvoteto
(http://www.pressdemocrat.com/news/2420738181/gratoncasinoworkersvoteto)
Although union membership is declining overall, some sectors are experiencing a growth spurt.
For example, casino workers constitute a growing unionized force. Unite Here represents
100,000 workers at gambling sites in both the United States and Canada, including prestigious
resorts such as those owned by MGM Resorts, Caesars Entertainment, Wynn Resorts, and Boyd
Gaming. The union is partnered with the Teamsters and International Union of Operating
Engineers in an effort to coordinate organizing and bargaining in the gaming industry.
In California alone, about half of all casino workers are unionized. Employees recently organized
at the Graton Resort & Casino in Rohnert Park, California. The owners of the casino, the
Federated Indians of Graton Rancheria, supported unionization. The tribal chair himself pressed
for casino workers’ ability to unionize, stating that he supported the right of workers to have
good jobs with good benefits.
The workers cited two reasons for wanting union representation. First, they wanted job security,
which they felt a collective bargaining agreement would offer; and second, they had concerns
about seeing coworkers fired without just cause (some reported cases in which workers were
allegedly fired for taking too many sick days).
Discussion Questions
1. Why do you think unions are losing members? Do you think one factor might be the type
of industry that the union is concerned with organizing? Do you think that organizing in
some types of industries is easier than others? Why or why not?
2. What impact do you think management support of unionization has on the union’s
success in organizing? Do you think the tribal chair’s support of the union helped with the
ultimate decision to unionize? Explain your reasoning.
3. These workers listed two reasons to form a union. Can you think of other reasons that
would be considered essential to workers that are not part of this list?
Management Beliefs About Unionization
Watch This
To view a video giving an example of
union busting at Walmart, click here
(https://www.youtube.com/watch?
v=2OjHWBTyfY0&index=3&list=PLsANBz8CIhEC
4mo4aO0aRZYaxu43VDc2)
When Volkswagen considered
putting in a plant in Chattanooga,
Tennessee, local politicians were so
adamantly opposed to unions coming
into the plant that they publicly went
on the record and opposed the
American Federation of Labor and
Congress of Industrial Organizations.
This brief video
(https://www.youtube.com/watch?
v=8uE5SonXJGA) illustrates this
hostile attitude.
Management often views unionization negatively, if for no other reason than the loss of flexibility that
results from a collective bargaining agreement (Verma, 2005). There is no doubt that once a business
undergoes unionization, the entire tenor of the business changes. As noted previously, management
must enter into a collective bargaining agreement with the bargaining unit, which spells out the terms
and conditions of employment. The employer must abide by detailed and complex laws and regulations
such as the National Labor Relations Act.
When compliance with the law or bargaining is required,
businesses must immediately consider the costs. A business that
bargains with a union must hire a specialized labor negotiator
familiar with bargaining agreements, usually a highly skilled
attorney. The cost for such services will run thousands of dollars
per day.
In addition to the expense involved, once a union is in place all
actions are thereafter governed by the CBA. This means a loss of
flexibility, since employers must stay within the agreement’s
confines. Employers must put a grievance procedure into place
and provide staff to hear grievances, which is another expense. If
the workers go on strike, the business will lose production and
incur the security costs also associated with a strike.
Many employers threatened with unionization react with a
campaign to thwart formation: For example, Walmart chose to
shut one of its stores in Canada after it unionized (United Food
and Commercial Workers, 2005). An entire industry exists of
consultants whose job it is to persuade employees not to vote for
unionization. The video feature offers some interesting
information about opposing labor unions, and an example of a website that promotes one company’s
message to keep out unions appears in Figure 1.5.
Figure 1.5: Labor Relations Institute tips to prevent unions
The Labor Relations Institute, Inc. is a consulting firm that helps organizations
maintain a unionfree workplace.
Reprinted with permission from Labor Relations Institute.
Mary Evans/Everett Collection
Craft unions used apprenticeships to
train workers in a specific skill.
Watch This
To view a video on the differences
between craft and industrial unions,
visit
https://www.youtube.com/watch?
v=ZbUblVPW5Ig
(https://www.youtube.com/watch?
v=ZbUblVPW5Ig)
Figure 1.6: Basic
structure of local and
national unions
Local unions are formed on a
geographic basis, and national
1.4 Types of Unions and Union Structures
Unions may be classified in numerous ways. This section explains some of the more common types of
unions and their definitions.
Craft Versus Industrial Unions
A craft union, sometimes referred to as a horizontal or
trade union, organizes workers along occupational lines.
These unions originated from the guilds in medieval
Europe when workers started as an apprentice and
learned a trade. As discussed in more depth in the next
chapter, the earliest unions in the United States were
craft unions. Historically, they trained workers in a
specific skill through apprenticeships. These workers
took great pride in their particular craft and, believing
they should be compensated fairly for their talents,
joined together with other similarly trained craftspeople
to represent their interest in obtaining higher wages and
safer working conditions. One of the earliest examples of
an American craft union was a union of shoemakers that
formed in Philadelphia in 1792.
Industrial unions, or vertical unions, on the other hand, are formed along industry lines, meaning a
particular type of business. For example, employees in the automobile industry may be members of the
United Automobile Workers (UAW), a union open to workers in several industries, including the auto
industry. UAW members in the auto industry might be cleaners, bolt makers, or assemblers, but what
they all share in common is that they work in the same type of industry: auto making.
Historians generally consider craft unions as most viable until the
1930s. Because they limited their membership to skilled workers
only, they experienced a steady decrease in membership until
they changed their membership standards to include nonskilled
workers in the 1940s. Industrial unions, on the other hand,
increased membership as they admitted members who were
both skilled and unskilled. Of the original 133 craft unions in the
United States, only 28 were left by 1915, and even those that
remained reached out to all types of workers and were not purely
craft unions anymore (Tomlins, 1985).
Public Versus Private Unions
Unions may also be categorized as either public or private. A public
union is one whose members work for a state or federal governmental
entity. For example, nurses employed at a state hospital are state
employees and therefore public employees; if they unionize, the union
is public.
unions are overarching
organizations that bring together
and represent the different local
unions.
The American Federation of State, County and Municipal
Employees is the largest public union in the United States today.
Public unions are growing in strength and size and play a formidable
role in national politics, as you will see in later chapters.
Private unions are those that form in a business that is not
governmental. If the employees of a major steel producer decide to
unionize, for example, the union is private because steel production is
undertaken by private industry and not a governmental entity.
The distinction between public and private unions has many
important ramifications that are essential to understand. Private
unions are governed by the National Labor Relations Act and the
NLRB. Public unions are governed by individual state laws or by
federal law, but public unions are not governed by the National Labor
Relations Act, nor do they have disputes heard before the NLRB.
Local Versus National Unions
One way to understand how unions are organized is to begin at the
local level. The locals are usually formed on a geographic basis. For
example, electrical workers in a city or town may form a local chapter
of the International Brotherhood of Electrical Workers for their area.
The local must receive recognition from the national organization,
which is usually granted in a charter. A charter is an official document
issued by the national union that confers powers on the local to
organize and represent itself as affiliated with the national
organization. A national union, on the other hand, is the overarching
organization that brings together all of the locals. This entity
represents the local chapters, gives them an identity with which
people can readily associate, and lobbies governments for better
working conditions.
Rankandfile members, or the members of a union (not including its
leadership), have the most contact with their local. There they can obtain advice about benefits, look for
a job, file a grievance (or at least receive support if they have a grievance), and receive information
about the happenings of the state and national organization. The locals elect representatives to attend
the national organization meetings, which hold a national convention at least every five years. The
representatives who attend the national convention elect the union’s national officers. The national
organization often deals with political influencing, such as lobbying Congress on issues relevant to labor,
negotiating national contracts for its members, and setting up educational programs.
Figure 1.6 shows the basic structure of local and national unions.
Fiftyeight national unions have joined together and affiliated themselves with the American
Federation of Labor and Congress of Industrial Organizations (AFLCIO). The AFLCIO is not a
union; instead, it is a federation that represents the national unions on legislation, education, civil rights,
and health issues, to name a few (see Figure 1.7).
Watch This
To watch an overview of Change to
Win, visit
https://www.youtube.com /watch?
v=vKREFu46Gwo
(https://www.youtube.com/watch?
v=vKREFu46Gwo)
Figure 1.7: Examples of unions in the AFLCIO
Fiftyeight national unions are affiliated with the AFLCIO.
The other major umbrella organization is the Change to Win Federation, sometimes referred to as a
coalition. This organization began in 2005 when the Service Employees International Union (with 1.7
million members) and the International Brotherhood of Teamsters (with 1.3 million) both withdrew
from the AFLCIO over internal political matters, taking with them more than $20 million in annual dues.
Today this organization consists of both of those unions plus the United Farmworkers Union.
Change to Win is overseen by a leadership council consisting of
the officers of the three affiliated labor organizations and three
atlarge members. The council meets four times per year to
discuss issues and carry out the purpose of the alliance, which is
to better the lives of its workers and to engage in organizing
workers. The organization also has a convention to which each of
the three affiliates send representatives (Change to Win, 2014).
The AFLCIO is considered the stronger and more politically
savvy organization, whereas Change to Win is considered more
focused on grassroots efforts that include directly organizing workers. Speculation that the two
coalitions are discussing a merger occurs sporadically, but as of 2014, this had not occurred (Watts,
2012).
Nonunion Organizations
Workers sometimes form alliances with one another that are not formal or approved by the NLRB or a
governmental organization. Although the alliance may strive for better working conditions, increased
salaries, or safety improvements—and therefore appear to be a union in terms of its organization and
tactics—it is not considered a labor organization and therefore does not have the right to collectively
bargain, because it did not form in accordance with a state or federal law. These organizations or
alliances are called nonunion organizations.
Watch This
To view a video about Hispanics
United, visit
https://www.youtube.com/watch?
v=XKa0aPUm_lo
(https://www.youtube.com/watch?
v=XKa0aPUm_lo)
Nonunion organizations have many positive attributes and can accomplish much good for their
employees, just as unions can. However, they are limited in how they represent workers because they
may not enter into collective bargaining agreements. A collective bargaining agreement is at the heart of
a labor organization’s power because it forces management to negotiate with its workers to establish the
terms and conditions of their employment. Conversely, if a group does not have collective bargaining
powers, then it cannot force such negotiations; it only has the power of persuasion, picketing, bad
publicity, and the like to persuade an employer to agree to its demands.
Despite this, workers form alliances for many reasons, be they onetime disputes with management or
more systemic problems with pay or conditions of employment. One example of a nonunion
organization is OUR Walmart (Organization United for Respect at Walmart; see http://forrespect.org
(http://forrespect.org) ), a group of employees that protest their pay and hours at Walmart stores. Their
protests have garnered national attention and raised publicity about poor pay and Walmart’s failure to
hire workers full time.
Despite the fact that nonunion organizations lack collective bargaining rights, they are not completely
vulnerable. The National Labor Relations Act protects concerted activity, which is the right of workers
to act together to try to improve their pay and working conditions, with or without a union (National
Labor Relations Act, 2006).
For example, Hispanics United of Buffalo is an organization that
consists of employees who provide social services to lowincome
clients. These workers were fired after they complained about
their working conditions, workloads, and staffing through posts
on Facebook. Although they were not represented by a union, the
NLRB stepped in because talking to one another at work,
complaining to each other about their working conditions, and
posting comments constitutes “protected, concerted
activity” (Hispanics United of Buffalo, 2012).
Or consider the situation at an Omaha, Nebraska, meat processing and packaging plant, where a group of
employees walked off the production line in protest over their working conditions. The workers were
not members of a union. They met with the plant manager to express their concerns. One month later
the manager learned that another walkout was planned. He called each of the workers into his office and
fired them. The NLRB held that the walkout was “concerted protected activity” (Greater Omaha Packing
Co., Inc. and Heartland Workers Center, 2014) and ordered that the employees be reinstated to their jobs
with full back pay and benefits.
What implications does this have for you as a manager? If a union exists in your workplace, you know
that this imposes particular responsibilities on you; but you need to be aware that workers acting
together who are not unionized also impose legal obligations.
Summary & Resources
Summary of Chapter Concepts
• The study of labor relations encompasses numerous concepts, including the distinction between
private and public unions, learning about the complications that arise from unionization, and the
need to be familiar with this area of study.
• Labor law is based on laws from a number of sources: the state and federal executive branches,
the state and federal legislative branches, and the state and federal judiciary.
• There are three main players in labor relations: the government, which consists of the
legislature, executive branch, and judiciary; the labor union, which consists of employees; and
management, which consists of employers or owners.
• Unionization is based on the concept that employees have more power when they join
collectively to present concerns. Unionization also has many detractors who believe that unions
cause inflated wages, violence, and corruption.
• Collective bargaining is the process whereby management meets with union representatives to
make an agreement that will thereafter control their relationship.
• Workers unionize for many reasons, including better wages, hours, conditions of employment,
safety improvements, and the need to be respected and heard by management.
• Employers tend to dislike unions because of increased paperwork, inflated prices and wages,
increased operating expenses, and imposed restraints that decrease the ability to be flexible.
• Unions are generally divided into public or private, and craft (horizontal) or industrial (vertical).
• Union structure typically features locals, or regional unions, and national unions. Fiftyeight
national unions are affiliated as the AFLCIO, the largest labor organization in the United States.
• Nonunion organizations are those affiliations that have not formed under a federal or state law
but still include employees who work toward bettering their conditions of employment; if the
workers act together to improve their working conditions, even if they are not unionized, such
concerted activity is covered by the National Labor Relations Act.
Chapter 1 Review Quiz
Chapter 1 Flashcards
Choose a Study Mode
Key Terms
administrative agency
A unit in the government that oversees a particular area of expertise and makes laws by holding
hearings.
administrative law judge
The person who presides over hearings in administrative agencies.
American Federation of Labor and Congress of Industrial Organizations (AFLCIO)
The largest coalition of labor unions in the United States, consisting of 58 national unions and about
12.5 million members.
American Federation of State, County and Municipal Employees
The largest public union in the United States.
bargaining unit
A discrete group of workers within a plant, firm, occupation, or industry that, on the basis of
commonality of interest or production process, is determined by the National Labor Relations Board
to be the appropriate unit for collective bargaining purposes.
case law
When a judge renders a decision and writes an opinion, that opinion is called case law.
Change to Win Federation
Sometimes called the Change to Win Coalition, this is the second largest coalition of labor unions in
the United States, after the AFLCIO.
charter
An official document issued by the national union; it confers powers on the local chapter to organize
and represent itself as affiliated with the national organization.
collective bargaining
The process whereby a union represents employees in formulating a contract with management.
collective bargaining agreement (CBA)
A contract between labor and management that spells out the terms and conditions of employment.
concerted activity
The right of workers to act together to try to improve their pay and working conditions, with or
without a union.
Congress
The federal legislative branch of government that passes laws called federal statutes.
craft unions
A type of union that organizes workers along occupational lines; also called a horizontal or trade
union.
employee
A worker hired by the employer to perform certain tasks under the direct supervision of the
employer.
executive branch
One of the three branches of a state or federal government, headed by a governor at the state level and
the president at the federal.
executive orders
An order issued by a governor or president that applies to state or federal workers and is considered
to have the force of law.
exempt employees
Employees who are not paid on an hourly basis but instead are paid a salary and therefore are exempt
from the National Labor Relations Act.
federal administrative agencies
Federal governmental entities that oversee specific specialized areas. In labor the National Labor
Relations Board is an example.
federal executive branch
The president and the federal administrative agencies.
federal judicial system
The court system in the federal government; federal courts.
Hocking Valley Coal Miners’ Strike
A famous 1874 U.S. strike that is an example of striker violence.
independent contractor
A worker who is not an employee but who is hired for one job, is not supervised by the person hiring,
and who manages how he or she does the job.
industrial unions
A type of union in which the workers are engaged in the performance of a particular service or the
production of a particular commodity; also called a vertical union.
injunction
An order from either a state or federal court that commands the defendant to do something or refrain
from doing something. For example, an injunction could order a union to go back to work (do
something) or to stop striking (refrain from doing something).
judicial branch
That branch of either state or federal government that comprises the courts.
labor relations
The study of workers, unions, and their interplay with management and the government.
labor union
A collective body of workers who join together, usually for higher wages and certain benefits on which
they agree.
legislative branch
That branch of either state or federal government consisting of legislative bodies that make laws
called statutes. At the federal level, this is Congress.
locals
Local unions; usually formed along geographic lines, with other local unions these form the larger
national union.
National Labor Relations Act
Also called the Wagner Act, this 1935 federal law guaranteed employees the right to selforganize; to
form, join, or assist labor organizations; to bargain collectively through representatives of their own
choosing; and to engage in concerted activities for the purpose of collective bargaining (a strike) or
other mutual aid and protection.
National Labor Relations Board (NLRB)
The federal administrative agency that oversees labor issues in the United States for private industry.
national union
A union that consists of smaller regional local unions and represents workers across the United States.
nonexempt employees
Employees who are paid on an hourly basis, including payment for overtime, and are under the
purview of the National Labor Relations Act.
nonunion organizations
Affiliations of workers who are united in an effort to improve their working conditions but are not
formed in accordance with federal or state law.
private unions
A labor organization formed by employees who work for a nongovernmental entity.
public unions
A labor organization formed by employees who work for a governmental entity.
ratified
Affirmed or approved by a majority vote.
Service Employees International Union
A public union in the United States.
state administrative agencies
State governmental entities that oversee specific specialized areas. In labor, for example, each state
has an administrative agency that deals with labor issues.
state executive branch
The governor’s office.
state statutes
Laws passed by a state legislature.
statutes
Laws passed by either a state or federal legislature.
strike
A work stoppage.
union representative
The person elected by a union to represent the workers in collective bargaining with management.
United Automobile Workers (UAW)
A large union representing workers in North America.
Critical Thinking Questions
1. Are unions still relevant? Write an essay taking either the pro or con side to this issue and argue
your side persuasively.
2. What are some reasons management opposes unionization? Do you agree or disagree with these
reasons? Why or why not?
3. What are some of the social, political, and economic reasons that unions are losing
membership—and therefore power—in the United States?
Research Projects
1. Find a recent newspaper article about a labor relations issue. Describe the issue, discuss
whether it has been resolved, and explain what its current status is.
2. Find the websites for a public union and a private union. Compare and contrast the material you
find concerning the objectives of each of the unions and how they present themselves.
