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Unions and Management
Negotiations between Labor and Management
• Wages and Fringe Benefits
• Wages are set by labor
contracts and vary based-type
of position, years on the job.
• Years of experience=more $
• Contracts also include cost-ofliving adjustment (COLA).
• A COLA automatically raises
employee wages to match
widespread price increases,
allowing workers to maintain
their purchasing power.
• Fringe Benefits include
nonwage payments such as;
paid sick days, holidays,
vacation days, health and life
insurance, savings and
retirement plans.
• Cont. Wages and Fringe
• Many companies provide
profit sharing & employee
stock ownership plan.
• Working Conditions
• Desirable working
conditions include a clean
and safe workplace,
clearly defined work
responsibilities, and
reasonable working
Job Security and Union Security
• Under the legal system the
law prohibits an employer
from firing an employee
because of race, sex,
religion, age, or union
• Seniority is the holding of
privileges based on the
number of years a worker
has been employed by a
• Employees with the least
seniority are the first to lose
their jobs in a company.
• Union security provides
workers with the right
to organize and join a
union. The right is
enforced by the
National Labor
Relations Board (NLRB).
Grievance Procedures
• Grievances, or formal complaints, usually are
resolved by committees made up of
representatives of the union and the
• If this procedure does not resolve the
problem, a negotiator it brought in by the
• Both union and management must agree to
give the negotiator all applicable information
and to abide by the negotiator’s decision.
Contact Negotiations
• Collective Bargaining: Union and management
representatives meet to discuss their goals and offer
solutions and compromises. In most cases, collective
bargaining results in a contract settlement.
• Mediation: Negotiators call in a neutral third party,
or mediator, to listen to the arguments of both sides
and to suggest ways in which an agreement may be
• Arbitration: Like mediation, arbitration calls for the
assistance of a negotiator to arrive at a contract. An
arbitrator, like a mediator, is a neutral third party.
Unlike in mediation, an arbitrator’s decision is legally
Union Tactics
• When unions and management cannot reach an
agreement, unions use the STRIKE tactic in
which union members stop working until
contract demands are met.
• Most strikes are over wage disputes, working
conditions, lack of benefits, and unfair
management practices.
Three Strike Tactics
• Picketing:
 The tactic is to inform the public that a
strike is in progress.
 Picketing may arouse public support and some
members of the public will identify with the
problems of the striking workers.
 Picketing discourages nonstrikers from
entering the plant. However, those workers
who cross the picket line, called scabs, are
often insulted by strikers.
• A primary boycott is an organized effort to stop
purchases of a firm’s products
• In the 1960s Cesar Chavez led the National Farm
Workers Association in an attempt to improve the
wages and working conditions of migrant agricultural
• The United Farm Workers (UFW) in 1965 organized a
primary boycott of grapes. Millions of consumers
across the U.S. supported the union by refusing to
buy grapes.
• A secondary boycott is a refusal to buy the goods or
services of any firm that does business with a
company whose employees are on strike.
Coordinated Campaigning
• Coordinated campaigning: involves the
use of picketing as well as boycotts.
Management Responses
• Replacement Workers: Finding qualified workers
can be difficult because picketing workers often
intimidate strikebreakers as they attempt to go
to work.
• Lockouts: A lockout occurs when an employer
closes a company’s doors to striking workers until
negotiators reach a contract agreement that is
satisfactory to management. Employers may lose
money if they are unable to hire other workers
and production stops.
• Injunctions: A court order to prohibit the
workers from striking. There are restrictions on
injunctions – the Taft-Hartley Act permits the
issuing of an injunction when a strike threatens
the health or safety of the public.