Explain collective bargaining and provide an example. What economic, political, legal, and social factors could potentially influence contract negotiations for a large nationwide company? What are the pros and cons of collective bargaining?
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Chapter 1 – Organized Labor and the Management Community: An Overview
Despite continuing management enmity, unionism has shown absolutely no tendency to retreat. Over five times as many workers are union members today as was the case in 1932, and the labor union seems to be very much here to stay. Indeed, union strength is highly concentrated in areas that are strategic to our economy and thus labor has an influence that is actually understated by simple membership totals.
The fast-growing white collar sector, however, has been relatively unreceptive to unions. Several reasons involving union imagery, weak union leadership, and certain unique general white collar characteristics that might work against unionization in any event are probably responsible for this. On the other hand, there are also grounds for union optimism here. Highly visible union successes in increasing blue collar wages may attract white collar workers. So, too, might the advent to unionism of governmental employees, in the process weakening the traditional association of organized labor with manual work. Improved prospects for more able labor leadership and the increasingly less enviable atmosphere in which many white collar employees work may also help unions organize in the white collar sector. From the union viewpoint, cases for both pessimism and optimism can be erected.
The many workers who have joined unions would appear to have done so because of a broad network of needs on their part. Of these, the needs for safety, social affiliation, and to a lesser extent, self-esteem, appear to be of primary importance to employees in contemporary America. Similarly, the management resistance to union inroads is also derived from a wide array of specific causes, even though the desire to retain decision-making authority in managerial hands lies at the heart of most of them.
In the governmental employee sector, the considerable recent union penetration appears to have stemmed primarily from favorable legal developments, from the public servant’s increasing unhappiness as remuneration packages have fallen farther and farther behind that of private employment, and from the general collective action spirit of the times. Controversy continues as to whether public servants should be allowed the strike weapon, with increasing support for granting it to many of them (policemen and firemen not included) under certain conditions. More ominous tidings for public sector unionism, however, now seem to lie in the general taxpayers’ revolt and its corollary messages that “labor peace” at any price is no longer acceptable to the electorate, and that public officials can perhaps fare well with the voters by standing up to unions.
In overview, chapter 1 also touches upon the general progress made in the union-management relationship in the relatively recent past, and the vulnerability of this relationship (despite the progress) to governmental control because of the increasingly high level of public expectation concerning collective bargaining.
Chapter 2 – The Historical Framework
The following constitutes a chronology of key dates in the history of the American labor movement:
Late eighteenth century: The first trade unions, individually encompassing printers, carpenters, tailors and artisans of similar skill levels, are established.
1819: A major nationwide depression occurs and all but wipes out these early unions.
1822–1850: With the return of a healthy economy, skilled workers in the trades previously organized once again turn to union activity. But economic hard times from 1837 to 1850 cause unionism to vanish almost completely once again.
1850–1865: With the return of prosperity, unions are again a force to be reckoned with and now the nationwide scope of many labor markets gives them more incentive to try to standardize conditions. The first nationals are now formed and by the end of the Civil War in 1865 there is a post-1836 high of over 200,000 unionists — still virtually all skilled workers.
1873–1878: A new period of deep depression takes place and once again it (combined with aggressive employer onslaughts on labor) severely crimps unionism, but this time 50,000 unionists survive the bad years.
1885: The Knights of Labor, American labor’s most notable attempt to form a single, large “general” union wins a major strike against the Wabash Railroad and its growth then becomes spectacular, to 700,000 members one year later (from 70,000 in 1884). But a lack of leadership and other factors send it into a permanent decline by the late 1880s.
1886: The American Federation of Labor (actually established in 1881) is officially founded and the pragmatic master plan of its first leaders (most notably, its first president Samuel Gompers) proves to be so successful that its basic tenets, stressing the needs of skilled workers, remain unchallenged by the labor mainstream for the next five decades.
1929: The most severe business downturn in the nation’s history begins. By 1933, a staggering 24.9 percent of the civilian labor force is unemployed and a newly elected President Franklin D. Roosevelt and a “New Deal” Congress have squarely supported collective bargaining, marking a drastic change in public policy.
1935: The Wagner Act, restricting management’s labor relations conduct and establishing the National Labor Relations Board to determine appropriate bargaining units and conduct representation elections, is enacted.
John L. Lewis, unable to get his AFL colleagues to admit the new fast-growing mass production sector industrial unionists, forms the Committee for Industrial Organization (known after 1938 as the Congress of Industrial Organizations). This AFL offshoot, its national member unions now expelled by the AFL, claims almost 4 million recruits by 1937.
Late 1941: Total union membership now stands at 10.2 million compared with less than 3 million only nine years earlier. Much of the growth is due to newly aggressive AFL efforts, inspired by the CIO’s challenge, to emulate the CIO and recruit industrial workers.
1947: The Taft-Hartley Act, far less friendly to labor than the Wagner Act and due in large part to labor’s fall from public favor (because of its occasional strikes during World War II in the 1941-1945 period and especially to its huge wave of postwar strikes) is enacted.
1955: AFL and CIO leaders, culminating two years of intensive negotiations, merge into the AFL-CIO. The new constitution respects the “integrity of each affiliate,” including both its “organizing jurisdiction” and its “established collective bargaining relationships.”
1957: The AFL-CIO expels the International Brotherhood of Teamsters for “corrupt influences.”
1959: The Landrum-Griffin Act further restricts labor’s freedom of action, especially in the conduct of internal affairs.
2005: The original 15 million membership total of the AFL-CIO in 1955 is down to 13 million and unions now represent just 12.5 percent of the labor force, down from 35 percent in the later 1950s.
New AFL-CIO leadership under John J. Sweeney, who is elected federation president in late 1995 in the face of general union unhappiness with labor’s stagnation since the merger, starts to achieve some favorable results. New union members are recruited and there is for a time a marked increase in labor’s political influence as well.
But the returns for the first years of the 21st century in both of these areas are not as encouraging as in the early Sweeney years, and in 2005 three of the federation’s four largest unions sever their ties to the federation. With four other unions they announce the formation of a new coalition—“Change to Win”—designed to reverse labor’s now-resumed membership slide by pouring massive amounts of resources into heightened organizing attempts.
By late 2008, it is still too early to tell whether or not the new organization will have any lasting consequences in the membership recruitment sphere – or, indeed, in the political arena. The returns are both tentative and mixed.
The chapter ends with “Some Concluding Thoughts,” a segment that above all argues that the current reports of unionism’s impending doom may be greatly exaggerated: Organized labor has confronted conditions at least as bleak as those surrounding it today many times in its long history and has always proved equal to the challenge. It would appear that too many workers, from the early nineteenth century to the present, there really has been no acceptable substitute for collective bargaining as a means of maintaining and improving employment conditions.
Chapter 3 – The Legal Framework
There was almost no statutory treatment of labor-management relations until the 1930s. Instead, individual judges exercised public control over these relations. For the most part, they totally repressed unions by finding most aggressive union activities to be illegal and by extensive use of the injunction in particular.
Public policy changed in 1932, with the passage of the Norris-LaGuardia Act. It greatly narrowed the scope of the court for issuing the injunctions, made yellow dog contracts unenforceable, and explicitly recognized employee freedom of association free from employer restraint or coercion.
Strong teeth were put into the governmental pledge to protect employee collective bargaining rights in 1935. The Wagner Act specifically banned five types of management action as constituting unfair labor practices. And it set forth the principle of majority rule for the selection of employee bargaining representatives and provided that, should the employer express doubt as to the union’s majority status, a secret-ballot election of the employees would determine if the majority existed. It also created the National Labor Relations Board to enforce both of these provisions.
In 1947, public policy toward unions changed again. The Taft-Hartley Act retained the basic principles of the Wagner Act (which continue to this day, as does virtually all of Taft-Hartley). But now six union unfair labor practices were enumerated and prohibited in the same way that the employer practices had been. In addition, Taft-Hartley recognized a need to protect the rights of individual employees against labor organizations and framed certain rights of employees as individuals”; explicitly gave employers certain collective bargaining rights; provided machinery for national emergency strike situations; and in several other ways also demonstrated a hardening of congressional and public attitudes toward unions.
In 1959, the national legislature passed another significant law. The Landrum-Griffin Act was the direct outgrowth of the unsatisfactory internal practices of a small but strategically located minority of unions as revealed by Senate investigations. It can be said to have marked the beginning of quite detailed regulation of internal union affairs. Under Landrum-Griffin, union members are guaranteed an ambitious and wide-sweeping Bill of Rights that their unions cannot violate, officers of labor organizations must meet a variety of reporting and disclosure obligations, and the secretary of labor is charged with the investigation of relevant union misconduct.
No collective bargaining law of any significance has been enacted since 1959, but in recent years unions have generally not been happy with the overall thrust of public policy. A comparatively pro-management National Labor Relations Board in the Reagan-George H.W. Bush years was, it is true, replaced by a definite tilt toward labor on the part of the Clinton era NLRB. But the latter was itself supplanted by a Republican-dominated board under George W. Bush, and unions feared the worst in the early years of the twenty-first century, with (based on new NLRB rulings) some justification.
Management’s increasing use of a relatively new strategy—the hiring of permanent replacements for workers striking for economic reasons—has proven surprisingly effective as a union-weakener, too. Legal since 1938, the policy received a huge shot in the arm when then-President Reagan authorized its use in the 1981 air traffic controller strike. At the time of this writing in 2008, labor had as yet been unable to get Congress to declare it illegal.
The laws through the years, the steady expansion since 1932 of governmental interest in labor-management relationships, the appropriateness (or lack of it) of the current statutes and their interpretations, and the fact that labor laws have become anything but easy to comprehend.
Chapter 4 – Union Behavior: Structure, Government, and Operation
Whatever else may be said of the structure of organized labor in the United States, it cannot accurately be described as being a simple one. Of the 109 “national” (or “international” as unions are interchangeably called) unions in the country, 55 currently belong to the American Federation of Labor-Congress of Industrial Organizations (commonly referred to as the AFL-CIO). The latter is a rather elaborately organized federation, even if it is one that lacks real authority over the affairs of its member unions except in quite limited circumstances. It currently, through its member nationals, represents some 10 million workers, or about 65 percent of all U.S. union members.
Of the remaining 54 nationals, a mere seven of them represent collectively another appreciable percentage of the nation’s unionized total: just under 33 percent. These unions were all co-founders of the breakaway Change to Win federation established in 2005. Six of them (the Service Employees, Food and Commercial Workers, Teamsters, UNITE HERE, Laborers, and Carpenters) were in 2008 in the ranks of America’s dozen largest unions (the seventh is the 5,500-member Farm Workers Union) and their combined membership now adds up to a formidable 5.2 million. Their parent Change to Win’s exact niche as a federation, however, still remains unclear: Many observers, while willing to suspend judgment for a while longer, tentatively view it as a rather unstructured confederation of unions originally united essentially only by a sincere impatience with the AFL-CIO’s recent-year record in organizing the unorganized and these days by a desire to wage coordinated action in doing this on their own.
The 48 smallish national unions that are today outside both federations (having for one reason or another chosen not to join) thus account for relatively few American unionists: only about 500,000 out of a 15.7 million total.
Whether AFL-CIO or Change to Win affiliates, or independents, the nationals are themselves generally subdivided into regions or districts for more efficient administration. To further complicate matters, although the vast majority of the country’s approximately 40,000 local unions belong to national unions, several hundred of them do not and are commonly described as independent unions. Finally, some unions are craft in character, others industrial, and some are both craft and industrial.
AFL-CIO nationals pay per capita dues to their federation above all to gain protection against raiding (attempts by other unions to dislodge the originally established union and take over its members) and also for various other, if lesser, benefits related to political, organizational, educational, legal, research and social endeavors. The AFL-CIO governing structure includes a quadrennial convention (the supreme governing body), and executive council, and various departments and constituency groups. There are also 50 state AFL-CIO federations and hundreds of central labor councils.
The federation is an aggressive lobbyist in the political arena and at times inactive and influential endorser of political candidates. It also carries out a massive research program, organizes on its own and helps its affiliated nationals in their organizational drives.
Change to Win’s governing structure remains quite lean. Its major emphasis by far is on the recruitment of new members for its member nationals. 75 percent of its budget is regularly earmarked for this purpose. It is, however, also (increasingly) active in politics.
National unions, whether members of the AFL-CIO or Change to Win (or as the few of them are, independent of both federations) generally exercise considerable power over their locals. They typically must approve both the strikes and the collective bargaining contracts of these locals, and all national union constitutions today contain provisions that establish standards of conduct and procedures for the internal operation of the locals. In turn, the national provides considerable bargaining service to the locals, something that is increasingly desired by the latter as the bargaining issues become more and more complex. The nationals also, through their staff representatives, aid the locals in the grievance procedure and in arbitration and are the major force for organizing the unorganized. Another major national union function concerns political action (although nationals differ widely in their vigor here).
Most national unions have regular conventions, as their supreme authority, but nothing in the laws requires that this be the case (although Landrum-Griffin does demand that national officer elections be held at least once every five years) and if the leadership is autocratically inclined it can use this fact to help perpetuate its power. National officers have political machines (involving the powers of patronage, the purse, and the press), anyway, and this helps account for the long tenure in office of many such leaders, particularly at the presidential level. But most national union leaders are deservedly popular because of proven competence, and they hold office with longevity for this reason and not because of political machination.
The local union is “where the people are,” where personal knowledge of and contact with union leadership take place, and thus where the union member really belongs. Local union officers generally work without pay, lack the political machinery that their national counterparts have, and are under constant and often highly critical observation by their constituents. They are motivated to hold their jobs (despite all of this) for a variety of reasons, among them a desire for recognition, a devotion to the labor movement, and the viewing of local union office as a vital stepping-stone to attaining higher union office. Local officers most frequently directly negotiate the labor agreement with the employer, handle grievances, and oversee the disciplining of union members alleged to have violated union rules. Local unions also at times are active in politics and engage in a variety of social, educational, and community activities.
Chief expenditures of unions—particularly at the national level, where the lion’s share of dollars is spent—involve salaries and expenses for union officers and staff people and the building up of strike funds. The annual income of American unions from all sources amounts to about $5 billion, but most unions are still regularly hard-pressed for money. Yet, as political animals, they are normally reluctant to raise union dues (which often equate to about two hours’ wages per month) and they typically ask the membership to pay more only as an absolute last resort.
Chapter 5 – At the Bargaining Table
The labor contract negotiation process has been depicted as (1) a poker game; (2) an exercise in power politics; (3) a debating society; and (4) a rational process. It is likely that all of these traits have marked most negotiations over time. At present, however, bargaining is most commonly an orderly process in which problems are discussed relatively rationally and settled more or less on the basis of facts.
By far the major prerequisite for bargaining is preparation for the negotiations. In recent years the time allotted for such planning by both sides has steadily lengthened, basically because the issues dealt with have become more and more complex. Thorough planning is needed. Each party may find it advisable to use not only general data (U.S. Bureau of Labor Statistics wage information, for example), but information that is more specifically tailored to its own needs. Thus, most larger unions and employers now have their own research staffs and they may also use the services of outsiders on an ad hoc basis. Increasingly, too, the top echelons of both parties have appreciated the need to carefully consult with lower level members of their respective organizations before framing specific bargaining table approaches. (The union has the further job of screening the many demands that emanate from the rank and file. They must be considered, but they are frequently inconsistent and unrealistic.) Legal and, often, public relations expertise is also needed by both sides in the preparation for the negotiations.
Negotiations often begin with the union presenting extreme demands. Usually, these are meant only as ploys in a logical bargaining strategy and are not to be taken literally. Indeed, some managements have increasingly come to appreciate the strategic value of the large demand themselves and nowadays similarly engage in such “blue-skying.” Because of this kind of strategy, however, a large gap normally separates the parties at the opening sessions.
In the later stages of bargaining, experienced negotiators (having a fairly good idea of what the other side wants) seldom take a rigid position and employ a variety of techniques, including trading points and counter proposals. Yet frequently the last stages of scheduled negotiations are reached with the complete contract far from being resolved.
It is the strike deadline that is the great motivator of labor relations agreement. The strike threat and its attendant uncertainties generate a willingness to bridge differences that has not been in evidence before.
Strikes do, however, occur—because of inexperienced bargainers, because constituent sentiments have been misjudged, and for other reasons. And crisis situations with or without strikes are frequently seen in the bargaining. Bypassing the difficult issues until the easy ones are settled, depersonalization by negotiators, being prepared in advance with alternative proposals, and the use of joint study groups during the contractual period can all minimize the chances of negotiation breakdowns. Mediation is also a potentially valuable appendage to the bargaining in crisis situations.
Other topics dealt with in this chapter are: Costing the labor contract, the vital need for testing and proofreading of the contract before signatures are affixed to it; coordinated bargaining, the name given to the increasing tendency on the part of unions to band together for contract negotiation purposes, and the growing threat to labor of multinationals and the prospects of “one big global union.” General Electric’s imaginative approach to bargaining from the 1940s until the 1970s — Boulwarism — is also analyzed. An inspection of the many interdependent variables (from the current health of the economy to the role of personalities) that individually might be of major importance in a given bargaining situation, or of no significance at all, concludes the chapter.
Chapter 6 – Grievances and Arbitration
With the establishment of a collective bargaining agreement, the broad guidelines of labor/management relations are set down. What follows is the often more involved task of applying and interpreting these general principles. It is important to keep in mind that labor relations is a day-to-day issue. Two mechanisms for resolving issues in a peaceful and orderly manner are the grievance procedure and arbitration. They are decidedly more attractive ways to resolve conflict than the chaotic and disruptive alternatives of strikes and lockouts.
The grievance procedure allows management and labor to interpret and apply the contract within a system of specific stages and time limits. It is a personalized process in which the participants in an enterprise decide its labor relations issues. Often these individuals help to negotiate the collective bargaining agreement and are better able to react to particular circumstances and to judge the impact of a decision upon industrial relations. The grievance procedure often produces compromise and is a most useful and efficient means of contract enforcement.
This bilateral arrangement helps prevent small issues from becoming major areas of contention. A better climate for both management and labor can be attained. A tribute to its efficacy, and the sincerity of the participants, is the fact that the vast majority of application and interpretation problems are solved at the grievance procedure level.
In the best of situations, there will always be conflicts that the bilateral grievance procedure cannot resolve. Some 99 percent of all collective bargaining agreements provide for arbitration, another peaceful and orderly solution to the questions of application and interpretation. At this stage, an impartial outsider is selected to decide the issue, and his or her conclusions are invariably stipulated in the contract to be final and binding upon both parties.
The American system of arbitration is private and voluntary. Arbitration is not required to be a contract provision, nor is it an area of government control or participation. The United States Supreme Court in the Trilogy cases has given its full support to this process, and has greatly strengthened the integrity and authority of the arbitrator’s decision. Recent Supreme Court decisions, though qualifying the finality of the arbitrator’s decision in the areas of civil rights, union representation of the employee in arbitration proceedings, and Fair Labor Standards Act rights, do not overturn the traditions of the arbitration procedure.
The key person in arbitration is the arbitrator. Those who exercise this role must adhere to a strict code of ethics, be free of any bias, and be very knowledgeable about industrial relations in general. They are normally bound by the provisions of the contract, but may rely on past practice in the absence of clear cut guidelines. It is their responsibility to keep the process, which is less formal than a court proceeding and more formal than the grievance procedure, moving smoothly and efficiently. The main responsibility of labor and management is to make sure the arbitrator is presented with all the relevant facts and evidence bearing upon the case. The method of selecting the arbitrator is specified in the contract. In most instances, the choice is made on an ad hoc basis from names supplied by both governmental and private agencies. Some collective bargaining agreements opt for the appointment of permanent arbitrators. Both the ad hoc and permanent methods of selection have advantages and disadvantages.
Although arbitration is an efficient and fair procedure, it does have some problems. The costs are high, and the time delays often produced cannot be justified. Several solutions are being offered today to meet these criticisms. One relatively new procedure is mini, or expedited, arbitration. With this approach, a hearing is scheduled very soon after an appeal, and a decision rendered sometimes as quickly as 48 hours after the hearing. Only the more routine or simple cases can be handled in this manner, but it has proven successful in the steel industry and elsewhere. Another alternative described in the chapter is that of grievance mediation.