Chapter 16Chapter 16http://www.youtube.com/watch?v=MjU8psjeHIQ

“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.”

A dose of reality◦ 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◦ Intimidation◦ Disruptive behavior◦ Sabotage◦ Keying of managers’ cars

Union◦ A formal association of workers that promotes the

interests of its members through collective action. 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.

Union membership is falling in advanced countries.◦ Change in jobs◦ Change in worker SES

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.

Types of Unions◦ Craft union◦ Trade union◦ Industrial union◦ Professional Organization

Positions associated with the Union◦ Union Stewards◦ Union Employees◦ Contract Administrators

Closed Shop◦ Illegal at a Federal Level◦ Exceptions for Construction Industry

Union Shop◦ Must join a union after employment◦ Must pay union dues

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

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.

Source: U.S. Department of Labor, Bureau of Labor Statistics. 2004.

12.4% in 2011

Source: U.S. Department of Labor, Bureau of Labor Statistics. 2011.

Industrial ChangesIndustrial Changes(I.T., financial, services)(I.T., financial, services)

Industrial ChangesIndustrial Changes(I.T., financial, services)(I.T., financial, services)

Geographic ChangesGeographic Changes(Domestic- no union history, employer friendly(Domestic- no union history, employer friendly

Global- deportation of manufacturing)Global- deportation of manufacturing)

Geographic ChangesGeographic Changes(Domestic- no union history, employer friendly(Domestic- no union history, employer friendly

Global- deportation of manufacturing)Global- deportation of manufacturing)

Workforce ChangesWorkforce Changes(white-collar)(white-collar)

Workforce ChangesWorkforce Changes(white-collar)(white-collar)

Declining Declining Union Union

MembershipMembership

Declining Declining Union Union

MembershipMembership

1794 Shoemakers’ strike 1806 Shoemakers’ strike (“criminal

conspiracy”) 1886 American Federation of Labor (AFL) 1938 Congress of Industrial Organizations CIO 1926 Railway Labor Act (Airlines) 1935 National Labor Relations Act (Wagner

Act) 1932 Norris-LaGuardia Act 1947 Taft-Hartley Act 1957 AFL-CIO merger 1959 Landrum-Griffin Act 1978 Civil Service Reform Act

This will be repeated until:1) Interest significantly wanes2) Union is certified

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.

“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 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.

Issues identified specifically by labor laws or court decisions as subject to bargaining.

Discharge of employees

Grievances

Work schedules

Union security and dues checkoff

Retirement and pension coverage

Vacations

Christmas bonuses

Rest- and lunch-break rules

Safety Rules

Profit-sharing plans

Required physical exam

These are often delegated to committees for position/stance issues

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

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)).

Conciliation◦ A process by which a third party attempts to keep

union and management negotiators talking so that they can reach a voluntary settlement.

Mediation◦ A process by which a third party helps the

negotiators reach a settlement. Arbitration

◦ A process that uses a neutral third party to make a decision.

Strike◦ A work stoppage in which union members refuse

to work in order to put pressure on an employer. Lockout

◦ Shutdown of company operations undertaken by management to prevent union members from working.

Striker Replacements◦ Economic strike- ok◦ Unfair labor practices strike

Temporarily Eventual Reinstatement

Economic Strikes◦ Strikes over economic issues (e.g., wages)

Unfair labor practice strikes◦ Strikes over illegal employer actions (e.g., refusal

to bargain)

Wildcat strikes◦ Strikes not approved by the union

Sympathy strikes◦ Expressions of support for other unions

Complaint◦ Indication of employee dissatisfaction

Grievance◦ A complaint formally stated in writing

Grievance Procedures◦ Formal channels used to resolve grievances.◦ Union representation (Weingarten) rights

Applies to non-union as well- not yet fully determined Grievance Arbitration

◦ Means by which a third party settles disputes arising from different interpretations of a labor contract.

James B. Avey PhDMarch 2009

Comparison of Right to Work States vs. Non Right to Work

Right to Work LawsSome 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 lawsPreventing these laws from being passedThe passing of the employee free choice act

through congress to enable unionization more efficiently

16–32

FIGURE 16–5 Right-to-Work States

This data begins to address the questionsDo 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?

DataData includes:

48 states (CA and NY removed as the economies of scale skew the data)

Gross State Product2009 Budget Gap (negative)Unemployment rate as of January 2009

Comparison of Gross State Product on average (in millions)

Average 2009 State Budget Gap in Millions

Unemployment Rate- November 2009

ConclusionOverall, 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.

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