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Chapter 16
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“When I was at GE it was well known that I was not a fan of
unions. I thought they created conditions that made the
company less competitive, and they drove an unnecessary
wedge between management and employees. I use the word
“unnecessary” because in my experience, unions arise only
when a plant or office is being managed by someone who is
abusive, remote or indifferent and whose actions have taken
away the voice and dignity of employees. Without a doubt,
that boss needs to be reformed or removed because the
unionization is as excessive response with negative long term
consequences—really for everyone.”
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A dose of reality
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Violent strike at Tree Top in Palo Alto, CA over compensation
“Scabs” hospitalized
Property Destroyed
UPS Delivery driver broken jaw/nose/reconstructive surgery
Spike Strips
Professional “strike” team hired for $50,000 per day
Union claims video editing, management liars, not true
Unions not even associated agree
Other experiences
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Intimidation
Disruptive behavior
Sabotage
Keying of managers’ cars
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Union
◦ A formal association of workers that promotes the
interests of its members through collective action.
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Why Employees Unionize
◦ They are dissatisfied with how they are treated by
their employers.
 Arbitrary managerial decisions
 Noncompetitive Pay
 Poor working conditions
◦ They believe that unions can improve their work
situations.
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Union membership is falling in advanced
countries.
◦ Change in jobs
◦ Change in worker SES
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High unemployment is creating pressure for
change.
Child labor is an issue in some countries.
Co-determination
◦ A practice whereby union or worker representatives
are given positions on a company’s board of
directors.
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Types of Unions
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Craft union
Trade union
Industrial union
Professional Organization
Positions associated with the Union
◦ Union Stewards
◦ Union Employees
◦ Contract Administrators
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Closed Shop
◦ Illegal at a Federal Level
◦ Exceptions for Construction Industry
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Union Shop
◦ Must join a union after employment
◦ Must pay union dues
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Right-to-Work Laws (about ½ states)
Agency Shop
◦ Represented by the union
◦ Choose to join
◦ Must pay dues amount to either union or charity
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Union Movement Emphases:
◦ Focused on “bread-and-butter” economic issues—
wages, benefits, job security, and working
conditions.
◦ Organized by kind of job and employer.
◦ Seek multi-year collective agreements on economic
issues as “contracts.”
◦ Maintain competitive relations
with management.
12.4% in 2011
Source: U.S. Department of Labor, Bureau of Labor Statistics. 2004.
Source: U.S. Department of Labor, Bureau of Labor Statistics. 2011.
Geographic Changes
Workforce Changes
(white-collar)
(Domestic- no union history, employer friendly
Global- deportation of manufacturing)
Declining
Union
Membership
Industrial Changes
(I.T., financial, services)
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1794
1806
1886
1938
1926
1935
1932
1947
1957
1959
1978
Shoemakers’ strike
Shoemakers’ strike (“criminal conspiracy”)
American Federation of Labor (AFL)
Congress of Industrial Organizations CIO
Railway Labor Act (Airlines)
National Labor Relations Act (Wagner Act)
Norris-LaGuardia Act
Taft-Hartley Act
AFL-CIO merger
Landrum-Griffin Act
Civil Service Reform Act
This will be repeated until:
1) Interest significantly wanes
2) Union is certified
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Interfering with the organizing and collective
bargaining rights of employees.
Dominating or interfering with any labor
organization.
Encouraging or discouraging membership in a
particular union.
Discharging persons for organizing activities
or union membership.
Refusing to bargain collectively.
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“Community of Interest”
◦ Wages, hours, and working conditions
◦ Traditional industry groupings for bargaining purposes
◦ Physical location and amount of interaction and working
relationships among employee groups
◦ Supervision by similar levels of management
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Supervisors and Bargaining Units
◦ Supervisors are excluded from bargaining units.
 Defined as any individual with the authority to hire, transfer,
discharge, discipline, and who uses independent judgment
with employees.
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Issues identified
specifically by
labor laws or
court decisions
as subject to
bargaining.
These are often
delegated to committees
for position/stance
issues
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Discharge of employees
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Grievances
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Work schedules
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Union security and dues checkoff
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Retirement and pension coverage
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Vacations
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Christmas bonuses
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Rest- and lunch-break rules
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Safety Rules
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Profit-sharing plans
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Required physical exam
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Permissive Issues
◦ Collective bargaining issues that are not mandatory
but relate to certain jobs.
 Benefits for retired employees
 Product prices (e.g., employee discounts) for employees
 Performance bonds
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Illegal Issues
◦ Collective bargaining issues that would require
either party to take an illegal action (e.g.,
discriminate in hiring, force people to join union
(right-to-work laws)).
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Conciliation
◦ A process by which a third party attempts to keep
union and management negotiators talking so that
they can reach a voluntary settlement.
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Mediation
◦ A process by which a third party helps the
negotiators reach a settlement.
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Arbitration
◦ A process that uses a neutral third party to make a
decision.
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Strike
◦ A work stoppage in which union members refuse to
work in order to put pressure on an employer.
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Lockout
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Striker Replacements
◦ Shutdown of company operations undertaken by
management to prevent union members from
working.
◦ Economic strike- ok
◦ Unfair labor practices strike
 Temporarily
 Eventual Reinstatement
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Economic Strikes
◦ Strikes over economic issues (e.g., wages)
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Unfair labor practice strikes
◦ Strikes over illegal employer actions (e.g., refusal to
bargain)
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Wildcat strikes
◦ Strikes not approved by the union
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Sympathy strikes
◦ Expressions of support for other unions
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Complaint
◦ Indication of employee dissatisfaction
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Grievance
◦ A complaint formally stated in writing
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Grievance Procedures
◦ Formal channels used to resolve grievances.
◦ Union representation (Weingarten) rights
 Applies to non-union as well- not yet fully determined
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Grievance Arbitration
◦ Means by which a third party settles disputes
arising from different interpretations of a labor
contract.
Comparison of Right to Work States
vs. Non Right to Work
James B. Avey PhD
March 2009
Right to Work Laws
 Some states are passing what are called “right to work laws”
where employees can not be forced to pay union dues.
 This has led to a strategic union focus on:
 Unionization in states without these laws
 Preventing these laws from being passed
 The passing of the employee free choice act through congress to
enable unionization more efficiently
FIGURE 16–5
16–32
Right-to-Work States
This data begins to address the
questions
 Do right to work states have better financial performance
than states which have not passed right to work laws?
 Is there a trend we can examine to see who does better in a
recession?
 Overall, from a business perspective is it “better” to be a right
to work state?
Data
 Data includes:
 48 states (CA and NY removed as the economies of scale skew
the data)
 Gross State Product
 2009 Budget Gap (negative)
 Unemployment rate as of January 2009
Comparison of Gross State Product on
average (in millions)
$240,000.00
$230,000.00
$220,000.00
Right to Work
$210,000.00
Not Right to Work
$200,000.00
$190,000.00
$180,000.00
2004 GSP
2005 GSP
2006 GSP
2007 GSP
Average 2009 State Budget Gap in Millions
Budget Gap 2009
$1,400.00
$1,200.00
$1,000.00
$800.00
Budget Gap 2009
$600.00
$400.00
$200.00
$0.00
Right to Work
Not Right to Work
Unemployment Rate- November 2009
Unemployment Rate
7
6.8
6.6
6.4
6.2
6
Unemployment Rate
5.8
5.6
5.4
5.2
5
Right to Work
Not Right to Work
Conclusion
 Overall, Right to Work States emerged as:
 Performing better during recession than non right to work states.
 Having less of a financial crises as of 2009 than non right to work
states.
 Having a higher employment rate/lower unemployment rate than
non right to work states.
 While this data does not account for individual household
income which has been reported higher in unionized
environments, it does show state financial performance and
employment rates seem to be better in states with right to work
laws.