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Chapter 7 Union Organizing And Bargaining Structures McGraw-Hill/Irwin An Introduction to Collective Bargaining & Industrial Relations, 4e Copyright © 2008 The McGraw-Hill Companies, Inc. All rights reserv 7 -3 1 - 3 Union Organizing • Negotiations cannot take place until a bargaining representative has been certified - Normally, a union must win an election to be certified as the exclusive representative of the employees - An employer may voluntarily recognize a union if the union can demonstrate that it represents a majority of the employees 7 -4 1 - 4 The Organizing Process • The NLRB is responsible for scheduling representation elections • Before the NLRB will schedule an election, at least 30 percent of the election unit must have signed an authorization card 7 -5 1 - 5 Example of informational flyer and authorization card 7 -6 1 - 6 Why workers might want union representation • For workers to express a preference of unionizing, they: • Must be deeply dissatisfied with their current employment conditions • Believe that unionization can be helpful in improving those conditions • Must be willing to overcome the negative stereotype of unions held by the population as a whole - Also, a worker may be angered by a management decision 7 -7 1 - 7 Union Campaign Practices • Unions commonly rely on organizers to rally employee support during an election campaign - They are often paid and full-time staff who travel to the site - Group meetings are often held after work hours in a local church or community room - Sometimes unions have an opportunity to move around the plant (often these are craft workers) to spread the message during work hours • The NLRB can eliminate this practice if it interferes with the business operation 7 -8 1 - 8 An Example of a Union’s Campaign Literature 7 -9 1 - 9 Sample of Actual Ballot 7 -101 - 10 Management’s Campaign Practices • Management is rarely a passive observer in the election process - Management tries to design personnel and other corporate policies in advance of any election to dissuade employees from union representation - Businesses do not always have the will or foresight to put all of their defensive policies in place 7 -111 - 11 The Election Unit • The election unit serves as the basis for the bargaining unit - It is the group of employees that the NLRB or state agency determines is eligible to vote - Two main decisions are made to define the unit: • The range of employees to be included • Who functions as the supervisor or manager - Since the passage of Taft-Hartley, supervisors have been excluded from coverage of the act 7 -121 - 12 The Scope of the Unit—The NLRB’s Criteria • The scope of the election unit can be a hotly contested issue - The NLRB and state boards normally consider the following criteria: • The community of interests among the employees • Effects of alternative units on stability in the labor relationship • Sufficient choice for the employees • History of bargaining at employer 7 -131 - 13 Election Unit Determination in Hospitals • Hospitals have a wide range of distinctions among professional and quasi-professional employees - Vast differences in the nature of worker tasks • The NLRB established separate units for: - Registered nurses and laboratory specialists - Business office and clerical employees - Service and maintenance employees - In 1990, the NLRB reversed itself and narrowed the units 7 -141 - 14 Union Organizing Success Rates - In 2005, unions won 61.5% of elections • 1,302 out of 2,117 elections - This figure has risen steadily since 1996 - In 2005, unions organized 63,700 workers through NLRB elections, down from 84,00 in the previous year - Organizing activity and win rates vary by union - New strategies by unions include organizing professional employees 7 -151 - 15 Does the election campaign influence how workers vote? • Workers are less inclined to vote for a union if the election is delayed - Illegal or aggressive behavior of the employer reduces the likelihood of a first contract - Firms with poor worker-supervisor relations and low wages are more likely to commit unfair labor practices during election campaigns 7 -161 - 16 Union Decertification - The 1947 Taft-Hartley amendments to the NLRA prescribed procedures for decertifying a union - Such elections are fewer than certification elections, but the number is growing and unions are losing an increasing percentage - In 2005, unions won 33.5 percent of the 331 decertification elections - Despite these data, union members appear to be satisfied with their unions and leaders 7 -171 - 17 The Debate Over Labor Law Reform • Unions’ low win rate led to the debate over whether the endorsement of collective bargaining in the NLRA is being fulfilled • Advocates of labor law reform argue that penalties imposed on employers who commit unlawful election behavior are too weak - They claim procedures for remedying unfair practices are too protracted, and that employers close or move operations to avoid unions 7 -181 - 18 Nontraditional Union Organizing Tactics • Corporate Campaigns - These involve union efforts to bring public, financial, or political pressures to bear on top management - In the corporate campaign against J.P. Stevens in the 1970s, The Amalgamated Clothing and Textile Workers Union waged a successful national boycott of their products and threatened to withdraw union pension funds from banks that had officers on Stevens’ board 7 -191 - 19 The Justice for Janitors Campaign • The SEIU went outside the NLRB procedures to gain union representation • They try to organize on a multi-employer basis and avoid representation elections by inducing employers to voluntarily recognize the union - They put pressure on employers that use subcontractors for janitorial services - Also use alliances with community groups such as churches to gain public support for organizing 7 -201 - 20 The AFL-CIO Organizing Institute and the New AFL-CIO Organizing Department - In 1989, the AFL-CIO created a new organizing institute - This was unique with it exclusive focus on organizing and its clinical programs to train new organizers - After John Sweeney’s election, it was given a higher budget - The summer camp funds college interns on summer union organizing projects 7 -211 - 21 A Rank and File Organizing Approach • Unions that used young, well-educated organizers, involve extensive communication, and have links to community groups achieved above-average success - This approach has been labeled a “rank-and-file” style - It contrasts with the more top down, traditional organizing that relied on appointed organizers and formal communication strategies 7 -221 - 22 Representation Election Employer Neutrality • Collective bargaining language regarding union organizing has become more common - Often included is language regarding employer neutrality in the organizing process - CWA, UAW, and USWA contracts define this as “neither helping nor hindering” union efforts • But they do allow managers to communicate facts to workers 7 -231 - 23 Voluntary Recognition • The NLRA allows employers to voluntarily recognize a union • The law also allows an employer to remain neutral • In the 1940s and 1950s, it was not uncommon for employers to adopt voluntary recognition or maintain neutrality • Employer voluntary recognition or neutrality has declined since the 1950s 7 -241 - 24 The Southwest Airlines Case • Founder and CEO Herb Kellerher was viewed as cooperative with the workforce - This was a key competitive advantage for this service-oriented business - Southwest did not oppose unionization • It is one of the most unionized airlines - Southwest’s success is attributed to flexible contracts and cooperative relationships 7 -251 - 25 The GM Case • In the 1970s, GM opened nonunion plants in the south and was successful in keeping the UAW out - But in 1976, the UAW won an agreement that GM remain neutral in organizing new plants - The UAW won an “accretion” clause, which provided that any new plants opened that did work traditionally done by the UAW would automatically be included in the bargaining unit - The UAW would not cooperate with quality of working life or other joint activities if the company continued to fight union organizing 7 -261 - 26 Bargaining Structure • Definitions of Bargaining Structure - Formal bargaining structure is defined as the employees and employers who are legally bound by the terms of the agreement - An informal bargaining structure is defined as the employees or employers who are affected by the results of a negotiated settlement through either pattern bargaining or other non-binding process • About 180,000-194,000 agreements exist in the U.S. 7 -271 - 27 The Decentralization of Bargaining Structure in the United States • Compared to other countries, the U.S. has a highly decentralized bargaining structure - In many European countries, contracts cover entire industries or broad regions - However, in recent years, many European employers have argued for greater decentralization - U.S. employers want even greater decentralization 7 -281 - 28 Types of Bargaining Units • The two primary characteristics are: - The scope of union or employee interests in the unit • These interests can be either narrow craft or broad industrial or multiskill - The scope of the employer interests • Can be multiemployer (centralized), singleemployer-multiplant, or single-employer-single plant (decentralized) 7 -291 - 29 Determinants of Bargaining Structure • Bargaining Leverage - Unions can increase their bargaining leverage by organizing a large share of the product market • An early example by John Commons was the shoemakers in Philadelphia - In some cases, employers prefer centralized bargaining structures • Employers in the local service industries, such as hotels and local truck haulers, form associations and bargain in multiemployer units to prevent whipsawing 7 -301 - 30 Centralized Bargaining Can Stabilize Competition • Employers in small firms in highly competitive industry may find it advantageous to bargain centrally - This prevents whipsawing - In the event of a strike, no employer gains advantage - In the apparel industry, employers gain stability while union workers have wage standardization that ensures that competition across the firms does not depend on low wages 7 -311 - 31 Public Policies • If the NLRB certifies the proper unit as an “industrial” unit, then “craft” structure is precluded - The NLRB allowed coalition bargaining at GE, over management’s objections • Meant that several unions would sit at the table even when only one union’s contract was discussed • Arguments against centralization include the reduction in employee free choice and a reduction in the ability of the employee to influence the union 7 -321 - 32 Organizational Factors • The growth of large corporations and centralization of management decision making have led unions to seek centralized bargaining structures - Unions believe they are better off when bargaining is coterminous with the level at which critical management decisions are made 7 -331 - 33 Bargaining Structure in the Telephone Industry • The telephone industry illustrates how management organizational structure influences bargaining structure • The gradual centralization of decision-making at AT&T led to the merger of unions into the CWA • The breakup of the Bell System into regional phone companies in 1984 forced a return to decentralized bargaining 7 -341 - 34 Bargaining Structure in the Trucking Industry • The trucking industry illustrates how management may attempt to counter union centralization with a centralization of managerial decision-making • In the 1950s, James R. Hoffa, president of the Teamsters, sought to improve bargaining power by centralizing the over-the-road truckers • Employers countered by creating a national trucker’s association to centralize bargaining • Many employers left the association when the Teamsters lost members to non-union firms 7 -351 - 35 Coordinated Bargaining • Where no single union dominates a firm’s employees, the AFL-CIO has attempted to coordinate bargaining - At its peak, the AFC-CIO’s Industrial Union Department (IUD) coordinated some 80 contracts with affiliated unions - Such agreements were found in electrical products, glass, machinery industries, and in a number of highly diversified conglomerates - The IUD was closed in 2000 and coordination now carried out by AFL-CIO staff 7 -361 - 36 The Influence of Diverse Labor and Management Interests • In order to participate in centralized bargaining, unions and managers must give up some of their authority and conform to centralized decisions and leaders • Union leaders’ opposition to consolidated bargaining units or formal union mergers acts as an additional constraint on the centralization of negotiations • Union leaders can lose influence, status, and perhaps even their jobs in consolidation 7 -371 - 37 Resolving Different Issues at Different Bargaining Levels • Even with centralized bargaining, many issues are still negotiated on a local basis - In most cases, the master agreement is negotiated at the centralized level and covers broad issues such as wage rates and fringe benefits - Issues that are either company or plant specific such as health and seniority provisions are often left to more decentralized bargaining - Sometimes individual work groups and supervisors negotiate unwritten side agreements, know as “fractional bargaining” 7 -381 - 38 Pattern Bargaining • Pattern bargaining is an informal means to spread the terms of one formal agreement to another - It is an informal substitute for centralized bargaining aimed at taking wages out of competition - The War Labor Board encouraged pattern agreements in WWII to reduce disputes 7 -391 - 39 Patterns within a Firm • Employees in a firm are usually aware of what other employees are receiving in pay and fringe benefits - Internal promotion tends to heighten such comparisons - It is most common across the blue-collar employees of the same firm • Can also occur where unions represent both blue- and white-collar employees 7 -401 - 40 Pattern Bargaining in Other Countries • Japan’s “Spring Wage Offensive” • Management, government, and labor leaders share information and create a general view of the overall rate of wage increase • Then, individual companies and unions negotiate increases that are consistent with the overall rate • Great diversity and decentralization make that impractical in the United States 7 -411 - 41 Intraindustry Pattern Bargaining • The greatest extent of pattern bargaining in the U.S. is the intraindustry variety - It stabilizes competition over wages - Examples are in auto, aerospace, and airlines - Intraindustry bargaining has drawbacks • Overextension is likely to reduce employment opportunities, encourage new entrants, and reduce the ability of the union to take wages out of competition - which was the original purpose • In moderation, it reduces strikes and establishes norms of equity for workers 7 -421 - 42 The Trend toward Greater Decentralization • From the 1980s, a number of bargaining units underwent decentralization in their structure • The steel industry is an example • The number of firms in the coal and trucking industries declined substantially as well • There were major declines in the number of workers covered by multiemployer contracts - Some of the decentralization in bargaining has been induced by public policies, such as deregulation 7 -431 - 43 Summary • Union organizing and bargaining structures are two central issues that emerge early in the bargaining process • Union organizing determines whether there will be any bargaining, and then the parties decide the structure of the bargaining • The organizing campaign is initiated by the union