BUS 372 week 1 discussion 1&2

Learning Objectives After completing this chapter, you should be able to:• Evaluate the roles of the three major players in labor relat ions.

• Describe union formation and the reasons why unions are formed .

• Compare and contrast the different types of unions and union str uctures and organizations. 1 Introduction 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, he alth care coverage, and employee rights. Whether the workplace is represented by a union adds further lay ers 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 fede ral law, are legally recognized, and can bargain with their employer regarding the terms and conditio ns of their employment. Labor relations is the study of unions, management, and their interrelationship.

You will learn about the early history of labor in th e United States and why workers formed unions. Conditions in factories during the 1800s can seem shocki ng, but an understanding of this era will lay a foundation for your study of why later laws were enac ted. You will learn about the difference between organized labor in the private versus public sectors an d why this distinction is important. Although this may seem a subtle dividing line at first, it is in fac t 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 administrat ive procedures.

Likewise, laws relating to employees, or wage and salary workers, even if they are not un ionized, 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, un ions are still viable entities that wield political and economic power. Approximately 14.5 million work ers belonged to unions in 2013, or 11.3% of all workers (Bureau of Labor Statistics, 2013). Compare t hat 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 bet ween 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 sala ry workers. This includes both union members (14.4 million) and workers who are not affiliated wi th any union, but whose jobs are covered by a union contract (1.6 million). In 2012, a total of 7.3 mil lion employees in the public sector belonged to a uni on, compared to 7 million union workers in the private se ctor. Public sector workers (35.9%) had a much higher union membership rate (35.9%) than private sect or 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 governmenta l 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 industri es 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 en countering unionized employees is significant, and in some industries, probable. In 2012 more than 15.9 m illion 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 gr ocery store workers might authorize a walkout if an agreement is not met. In 2013 four Tennessee worker s filed a grievance with the National Labor Relations Board (NLRB) , the federal agency that oversees labor issues in priv ate industries, claiming that they were being coerced to join a union. Meanw hile, in 2013 a union in San Diego that offers sheet­ metal workers an apprenticeship with the prospect of e arning $70,000 upon graduation was overrun with applicants. As you can see, the issues are varied, far reachin g, 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. Reca ll 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 gove rnor and various state administrative agencies . The governor may issue executive orders, which are enforceable against state employees and state administrative agencies. If, for example, th e governor signed an executive order requiring all workers to be drug tested, this mandate would not apply to privat e 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 he arings. Each state has its own labor agency that governs labor issues and may issue opinions about labor di sputes. New York, for example, has the New York State Department of Labor, an agency that enfor ces 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 g overnor may propose a law, but it must be passed by the legislature—so it is untrue that the gove rnor 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 acc urate to say that administrative agencies make laws in the form of opinions emanat ing from these hearings.

The second branch of government that makes laws regard ing labor is the legislative branch . A legislature consists of representatives elected by the p eople 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 p ass would be one stating that children under age 14 may not be empl oyed 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 formulate d by the executive branch and the legislature may be challenged and reviewed. Although courts do n ot 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 th is textbook that interpret important statutes concerning workers and their rights. A court’s interpr etation 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 executi ve 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 o ne law but composites of laws as represented by the aggregate of the three branches. A schematic of these branc hes 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 coex ist 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 thi s 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 th e U.S. Constitution with veto power over congressional legisl ation, 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. Som e presidents have used their political powers to greatly impact the power and reach of unions, whe reas 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 fe deral 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 i n labor relations. Courts hear controversies and issue writ ten opinions. These judicial opinions form a body of law called case law; for example, there are thousands of federal court d ecisions pertaining to labor issues. These decisions are instructive about what t he 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 issue s.

Another way in which courts play an essential role in labor rela tions is by issuing injunctions, which are orders by a court to do a specific act, or refrain fr om 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 re frain from conducting surveillance of striking workers. Taken together, federal legislation (statutes), federal court decisions (judicial), and presidential power and administrative agencies (execut ive) 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 jud icial branches form a body of federal labor relations law. In summary, the role of the government in labor rela tions takes place via the courts, where judges make decisions about labor controversies. Administrative age ncies such as the NLRB oversee the labor process, and the legislative branch passes statutes that ov ersee labor, such as the National Labor Relations Act.

Labor Unions The next player in the field of labor relations is th e union itself. A labor union is a collective body of workers who usually join together to achieve higher w ages 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 agree ment is called a collective bargaining agreement (CBA) . The process of labor meeting with management to neg otiate 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 employm ent, such as wages, vacations, and hours worked per week. By forcing management to come to th e bargaining table and hear labor’s concerns and address each one, the power differential between labo r 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 abi lity to produce its product. This economic threat may force an employer to bargain and reach an agree ment with the union so that the workers will return to their jobs and production can resume. The t hreat of a strike may compel management to concede to better conditions for workers. Thus, the co llective 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 outsi de the confines of a business. Consider that more than 14.5 million workers belong to a union, an d each worker pays union dues. Unions therefore have millions of dollars to spend. One way they spend t hat money is by supporting the election of political candidates who are pro­labor. Unions’ influ ence 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 overse e labor disputes and select members of the NLRB, which sets the countr y’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 alo ne could affect the outcome of an election. The heads of labor organizations are often powerful and i nfluential people who are skilled at representing the needs of the workers and shaping the American people’s view o f labor.

Historically, labor unions first formed when employees became tired of suffering brutal working conditions that featured few rules governing the numb er of hours worked, safety of conditions, or fair pay. Although initial organizing improved some aspect s of work, unions continued to grow because employees were still paid poorly and remained unprot ected in other areas, such as safety, medical coverage for injuries, health benefits, or retiremen t funds. By collectively organizing, employees realiz ed they had the power to improve their working lives.

Union power and activities can also negatively affec t workers, however. The coal mining industry provides a dramatic example of this. In what is refer red to as the Hocking Valley Coal Miners’ Strike of 1874, workers went on strike when the company slashed t heir wages. Many of the miners and their families lived in company­owned housing. When they we nt on strike, the company evicted the miners’ wives and children from their homes and hired armed g uards to harass them. The workers had no place to live and created tent cities for their families. Th e armed guards went on a moving train through one of the encampments, firing rifles at the workers and thei r 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. Th is example demonstrates that although labor unions’ goal is to improve the lives of workers, its pur suit 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’ Strik e, 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 understandin g 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 pe rform 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 s hort, 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 a n employer. Instead, they work at their own discretion. For instance, if you needed a new roof for your home, yo u could hire a building contractor. That contractor w ould 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, no t 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 t he 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 hea lth 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 gradua te 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 stu dies are not statutory employees within the meaning of Section 2(3) of the National Labor R elations Act, because they have a primarily educational, not economic relationship with their u niversity” (Brown University v. NLRB , 2004). As a result, the teaching assistants were not allowed to unio nize. Thus, the classification of a worker as an employee and the ability to discern which workers wil l be classified as employees and who will not is essential in understanding who may and may not unioniz e. To read the full Brown University v. NLRB 2004 decision, click here (http://mynlrb.nlrb.gov/link/document.aspx/09031d4 5800076ac) . Management and Employers The third major player in labor relations is managem ent. Management may consist of salaried workers, as opposed to those paid on an hourly basis. Salaried wo rkers 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 a t 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 sign ificant legal line is drawn between management and labor (workers).

If a particular business is governed by the National La bor Relations Act, one part of the act dictates what management is obligated to do and another relates to unionize d 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, e conomic, and cultural ramifications.

Management has a different perspective and group of n eeds 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 r etaining satisfied customers. Management is concerned with the bottom line: If the company is no t making money then it will go out of business. Therefore, cost is the utmost concern. Labor, on the o ther hand, wants to earn a fair wage and work in a safe environment. But what is a fair wage? What is a safe environm ent? How much will it cost?

There are pressures on every sector that complicate seem ingly simple issues. For example, management might want to cut costs, which might mean decreasing h ealth 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 i s a natural tension between the group that wants to compete at the cheapest price and the group that wan ts 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, becau se it forces management to listen to concerns and make necessary changes. There is a direct correlation b etween discontent and unionization. On the other hand, having management listen to and work wit h employees so they are part of the decision­ making process helps diminish such discontent.

If a union is formed in a particular business, the manag er must learn the rules and regulations governing labor relations very quickly. Unionization presents va rious 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 f or people trained in the study of labor relations. Employment opportunities in this area include union o rganizers, managers with labor experience, negotiators, mediators, neutrals, arbitrators, and labo r 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 managem ent through a union. A union is typically an organization whose function is to protect the rights o f employees, whether in terms of wages, hours, conditions of employment, grievances, disputes, or any other fu nction of the work environment.

We will learn from the history of unions discussed late r in this text that when employees band together and make demands of their employers, their work condi tions often change for the better. Wages increase, workplaces become safer, and employee grieva nces are heard and resolved. According to a 2003 Economic Policy Institute study, some of the adva ntages 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 representati ve 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 deleterio us effects on the national economy. Furthermore, in some of the largest unions, officers ha ve 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 g enerally conflicted about whether unions are a positive force; this conflict impacts every aspect of the fiel d of labor relations.

Collective Bargaining Collective bargaining is the process whereby the union represents employees i n formulating a contract with management. Before that can happen, however, t here 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 withi n 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 th e same industry like building cars could be a bargaining unit. If the bargaining unit is recognize d by the NLRB, then the unit is the only one that ca n negotiate with management. The end product of colle ctive bargaining is a collective bargaining agreement. You may wonder what this looks like. The fo llowing video shows you an example of the agreement that was hammered out by the National Football leag ue to cover the years 2006 to 2012.

This is important because one of the main reasons to for m a union is to force management to bargain with the uni on over the terms and conditions of employment. The union is the e xclusive representative for all the employees within the barga ining unit. Exclusive representation means that management cannot enter into separate agreements with different workers. Once workers are officially recognized as a union, management is m andated 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 ta ble with the intent to enter into a final agreement tha t 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 no t form a bargaining unit. These include supervisors, independent contractors, managers, and agr icultural workers, who are all deemed exempt from the act.

When the union negotiates a collective bargaining ag reement with management, it is essentially a contract that governs the working conditions. To negotia te the CBA, the union may send representatives, or the workers themselves may elect other workers to r epresent 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 ag reement, 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 manag ement 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 unio n 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 powe rful and motivating reasons workers feel the need to unionize (Manktelow, n.d.).

The next chapter will go into detail about the earl y 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 rul es or regulations about safety conditions. In one example, workers in factories that caught fire d ied because management had nailed the doors and windows shut, which made it impossible for them to escap e. You will see a correlation between unionization and the mistreatment of workers by employers.

Even with the advent of labor laws to protect worker s, there remained many reasons for them to unionize. Many employers ignore the complaints or gri evances of their employees, treat workers disrespectfully, allow unsafe working conditions, and p ay unfair wages. Employee perception that management favors one employee over another in the a pplication of rules is cited as one of the top reasons for work dissatisfaction leading to unionization (Mitc hell & Simpson, 2009).

Employees feel motivated to unionize when they perce ive 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 correc t unfairness in the workplace is also a key motivator (Deckop, 2006). As mentioned previously, another bene fit 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 legislati on.

Employees who are union members are often proud to be long 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 organiz ation. In the News: Casino Workers Vote to Join Union Based on a newspaper article by Brown, M. Graton Casino Worker s Vote to Join Union (July 22, 2014), http://www.pressdemocrat.com/news/2420738­181/graton­casino­w orkers­vote­to (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 for ce. Unite Here represents 100,000 workers at gambling sites in both the United States and Ca nada, including prestigious resorts such as those owned by MGM Resorts, Caesars Entertainment, Wyn n Resorts, and Boyd Gaming. The union is partnered with the Teamsters and Internati onal Union of Operating Engineers in an effort to coordinate organizing and bargaini ng in the gaming industry.

In California alone, about half of all casino workers are union ized. Employees recently organized at the Graton Resort & Casino in Rohnert Park, California. The o wners of the casino, the Federated Indians of Graton Rancheria, supported unionizati on. The tribal chair himself pressed for casino workers’ ability to unionize, stating that he support ed 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 off er; and second, they had concerns about seeing coworkers fired without just cause (some reported ca ses 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 fac tor 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 unionizatio n has on the union’s success in organizing? Do you think the tribal chair’s support of t he 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 l ist? 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 f or 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 busin ess changes. As noted previously, management must enter into a collective bargaining agreement wi th 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 requir ed, businesses must immediately consider the costs. A business th at bargains with a union must hire a specialized labor ne gotiator familiar with bargaining agreements, usually a highly skilled attorney. The cost for such services will run thousands o f dollars per day .

In addition to the expense involved, once a union is in place all actions are thereafter governed by the CBA. This mean s a loss of flexibility, since employers must stay within the agree ment’s confines. Employers must put a grievance procedure int o place and provide staff to hear grievances, which is another expense. If the workers go on strike, the business will lose producti on and incur the security costs also associated with a strike.

Many employers threatened with unionization react wi th a campaign to thwart formation: For example, Walmart chose to shut one of its stores in Canada after it unionized (Un ited Food and Commercial Workers, 2005). An entire industry exi sts of consultants whose job it is to persuade employees not to vote for unionization. The video feature offers some interestin g information about opposing labor unions, and an examp le 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 u nions 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 ex plains 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 lin es. 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, bel ieving they should be compensated fairly for their talents, joined together with other similarly trained craftspe ople to represent their interest in obtaining higher wage s 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, includ ing the auto industry. UAW members in the auto industry might be cl eaners, bolt makers, or assemblers, but what they all share in common is that they work in the same type of indust ry: auto making.

Historians generally consider craft unions as most viable u ntil 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 non skilled workers in the 1940s. Industrial unions, on the other h and, 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 t hose that remained reached out to all types of workers and were not pu rely craft unions anymore (Tomlins, 1985).

Public Versus Private Unions Unions may also be categorized as either public or pri vate. A public union is one whose members work for a state or federal governmenta l entity. For example, nurses employed at a state hospita l are state employees and therefore public employees; if they uni onize, 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 toda y. Public unions are growing in strength and size and pla y 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 produ cer decide to unionize, for example, the union is private because st eel 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 understan d. 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 t he 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 b egin at the local level. The locals are usually formed on a geographic basis. For example, electrical workers in a city or town may fo rm a local chapter of the International Brotherhood of Electrical Work ers 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 n ational 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 w ith which people can readily associate, and lobbies governments f or 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 fo r 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 organi zation. The locals elect representatives to attend the national organization meetings, which hold a nat ional convention at least every five years. The representatives who attend the national convention el ect 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 e ducational 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 Organiz ations (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 o f Teamsters (with 1.3 million) both withdrew from the AFL­CIO over internal political matters, tak ing with them more than $20 million in annual dues. Today this organization consists of both of those unions plus the Uni ted Farmworkers Union.

Change to Win is overseen by a leadership council consi sting of the officers of the three affiliated labor organizat ions and three at­large members. The council meets four times per yea r to discuss issues and carry out the purpose of the alliance, which is to better the lives of its workers and to engage in or ganizing workers. The organization also has a convention to whi ch each of the three affiliates send representatives (Change to Win, 2 014).

The AFL­CIO is considered the stronger and more politi cally savvy organization, whereas Change to Win is considered more focused on grassroots efforts that include directly orga nizing workers. Speculation that the two coalitions are discussing a merger occurs sporadically, b ut 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 ma y 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 t herefore 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 limite d 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 n egotiate 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 onl y has the power of persuasion, picketing, bad publicity, and the like to persuade an employer to agree to its d emands.

Despite this, workers form alliances for many reasons, be they one­time disputes with management or more systemic problems with pay or conditions of employ ment. 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 p ublicity about poor pay and Walmart’s failure to hire workers full time.

Despite the fact that nonunion organizations lack col lective bargaining rights, they are not completely vulnerable. The National Labor Relations Act protect s concerted activity , which is the right of workers to act together to try to improve their pay and wor king conditions, with or without a union (National Labor Relations Act, 2006).

For example, Hispanics United of Buffalo is an organiz ation that consists of employees who provide social services to low ­income clients. These workers were fired after they complaine d about their working conditions, workloads, and staffing thro ugh posts on Facebook. Although they were not represented by a union, the NLRB stepped in because talking to one another at wor k, complaining to each other about their working condi tions, and posting comments constitutes “protected, concerted activity” ( Hispanics United of Buffalo , 2012).

Or consider the situation at an Omaha, Nebraska, meat proc essing and packaging plant, where a group of employees walked off the production line in protest o ver their working conditions. The workers were not members of a union. They met with the plant mana ger to express their concerns. One month later the manager learned that another walkout was planne d. He called each of the workers into his office and fired them. The NLRB held that the walkout was “conc erted 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 complication s 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 fed eral executive branches, the state and federal legislative branches, and the state and fed eral judiciary.

• There are three main players in labor relations: the governme nt, which consists of the legislature, executive branch, and judiciary; the labor uni on, which consists of employees; and management, which consists of employers or owners.

• Unionization is based on the concept that employees have more p ower when they join collectively to present concerns. Unionization also has many d etractors who believe that unions cause inflated wages, violence, and corruption.

• Collective bargaining is the process whereby management meet s with union representatives to make an agreement that will thereafter control their relati onship.

• Workers unionize for many reasons, including better wages, hou rs, conditions of employment, safety improvements, and the need to be respected and heard by ma nagement.

• Employers tend to dislike unions because of increased paperwork , inflated prices and wages, increased operating expenses, and imposed restraints that decre ase the ability to be flexible.

• Unions are generally divided into public or private, and cra ft (horizontal) or industrial (vertical).

• Union structure typically features locals, or regional union s, and national unions. Fifty­eight national unions are affiliated as the AFL­CIO, the largest lab or organization in the United States.

• Nonunion organizations are those affiliations that have not f ormed under a federal or state law but still include employees who work toward bettering their co nditions of employment; if the workers act together to improve their working conditions, ev en if they are not unionized, such concerted activity is covered by the National Labor Relation s 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 agencie s. American Federation of Labor and Congress of Industrial Organiz ations (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, o r 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 purpose s. case law When a judge renders a decision and writes an opinion, that opini on 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 po wers on the local chapter to organize and represent itself as affiliated with the national organizat ion. 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 cal led 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 th e direct supervision of the employer. executive branch One of the three branches of a state or federal government, head ed 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 f ederal 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 speciali zed 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 perform ance 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 d efendant 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 compr ises the courts. labor relations The study of workers, unions, and their interplay with manageme nt 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 o f legislative bodies that make laws called statutes. At the federal level, this is Congress. locals Local unions; usually formed along geographic lines, with othe r local unions these form the larger national union. National Labor Relations Act Also called the Wagner Act, this 1935 federal law guaranteed em ployees the right to self­organize; to form, join, or assist labor organizations; to bargain collectiv ely 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 t he 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 nongov ernmental 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 collect ive 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 yo u agree or disagree with these reasons? Why or why not?

3. What are some of the social, political, and economic reasons th at 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 i s. 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 the y pre­sent themselves.