Case Union Labor Relations

SE/The Labor Relations Process, 11th Edition ISBN-13: 978-1-305-57620-9 ©2017 Designer: LD Text & Cover printer: Edward Brothers Binding: CB Trim: 8” x 10” CMYK

THE LABOR RELATIONS PROCESS

Holley | Ross | Wolters

11th Edition

THE LABOR RELATIONS PROCESS

Holley | Ross | Wolters

11th Edition

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T H

E L

A B

O R

R E

L A

T IO

N S

P R

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S

Holley Ross

Wolters

11th Edition

76209_cvr_ptg01_hires.indd 1 14/03/16 4:06 PM

The Labor Relations Process

ELEVENTH EDITION

Australia • Brazil • Mexico • Singapore • United Kingdom • United States

The Labor Relations Process, Eleventh Edition

William H. Holley, Jr., William H. Ross, and Roger S. Wolters

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Brief Contents

Preface xiii Acknowledgements xvi About the Authors xvii

Part 1 Recognizing Rights and Responsibilities of Unions and Management

Chapter 1 Union Management Relationships in Perspective 4

Chapter 2 The History of Labor Management Relations 43

Chapter 3 Legal Influences 89

Chapter 4 Unions and Management: Key Participants in the Labor Relations Process 134

Chapter 5 Why and How Unions Are Organized 197

Part 2 The Bargaining Process and Outcomes

Chapter 6 Negotiating the Labor Agreement 266

Chapter 7 Economic Issues 325

Chapter 8 Administrative Issues 387

Chapter 9 Resolving Negotiation (Interest) Disputes and the Use of Economic Pressure 437

Part 3 Administering the Labor Agreement

Chapter 10 Contract Administration 496

Chapter 11 Labor and Employment Arbitration 537

Chapter 12 Employee Discipline 600

Part 4 Applying the Labor Relations Process to Different Labor Relations Systems

Chapter 13 Labor Relations in the Public Sector 650

Chapter 14 Labor Relations in Multinational Corporations and in Other Countries 701

Appendix A Collective Bargaining Negotiations Exercise 756

Author Index 759

Subject Index 762

iii

Contents

Preface xiii Acknowledgements xvi About the Authors xvii

Part 1 Recognizing Rights and Responsibilities of Unions and Management

Chapter 1 Union Management Relationships in Perspective 4

Phases in the Labor Relations Process 5 Elements in the Labor Relations Process 6

Focal Point of Labor Relations: Work Rules 6 Key Participants in the Labor Relations Process 10

Three Basic Assumptions Underlying U.S. Labor Relations 13 Constraints or Influences Affecting Participants Negotiation and Administration of Work Rules 14 State of the Economy: National, Industrial, and Firm-Specific Indicators 14 International Forces 19

Labor Relations in Action: Getting Online with Labor Relations Research 21 Public Opinion 22

Union Membership 24 Labor Relations in Action: Unions and Worker Centers 25

Labor Relations in Action: Are Unions Still Relevant? 28

Case Study 1-1: Was a Troublemaker Laid Off for Sharing Wage Information? Or for Business Reasons? 37

Case Study 1-2: Discharge for Whistleblower Activity 38

Classroom Exercise 1.1: Work Rules 41

Classroom Exercise 1.2: Union Membership Trend 41

Classroom Exercise 1.3: Word Association 41

Chapter 2 The History of Labor Management Relations 43

1869 to World War I 44 Early Legal Developments Involving Labor Management Relationships (1806 1931) 45 Civil Conspiracy Doctrine 47 Application of Antitrust Legislation to Labor Unions 47 Emergence of National Labor Organizations 49

Labor Relations in Action: Labor History Time Line: Selected Events 50 The Knights of Labor (KOL) 52 Strategies to Accomplish the KOL s Goals 53 Reasons for the KOL s Failure and Demise 54 The Eight-Hour Workday Movement and the Haymarket Riot 55 Origin and Goals of the American Federation of Labor 56 Strategies and Tactics of the AFL 58 Organization of the AFL 58 The Homestead Incident 59 The Pullman Strike 60

iv

Labor Relations in Action: Unions and the Civil Rights Movement 61 The Industrial Workers of the World 63

World War I to World War II 66 Union Organizing after World War I: Problems and Prospects 66

Labor Relations in Action: The American Labor Movement as Portrayed in Fiction 67

Opposition from Employers 68 Labor s Inability to Overcome Anti-Union Sentiment 70 Rise of the CIO and Industrial Unionism 71 Strong CIO Leadership 72 Realistic Goals 72 The Effective Use of Sit-Down Strikes 73 Passage of the National Labor Relations (Wagner) Act 73 Changes in Employees Attitudes 74

World War II to the Present 74 Developments in Organized Labor since World War II 75 New Collective Bargaining Issues 75 Increased Organization of Women, Minorities, Younger Age Employees, and Professionals in the Public-Sector and Private-Sector Service Industries 77 Merger of the AFL and CIO 77 Formation of the Change to Win Federation 78 Aspects of Organized Labor Unchanged since World War II 79 Unions and Politics 79 Difficulty in Achieving Consensus among Unions and among Members 79 Pursuit of Short-Range Economic and Job Security Goals Instead of Long-Range Reform 80

Chapter 3 Legal Influences 89

Origin of Labor Relations Law 91 The Norris La Guardia Act 93 The National Industrial Recovery Act of 1933 94 The National Labor Relations (Wagner) Act of 1935 95

Changes under the Labor Management Relations (Taft Hartley) Act 96 Labor Management Reporting and Disclosure (Landrum Griffin) Act 98 National Labor Relations Board 99 Labor Relations in Action: Selected Labor Relations Cases Decided by the U.S. Supreme Court and the NLRB 101

Employer and Employee Coverage under the LMRA, as Amended 104 Concerted and Protected Employee Activity 107 NLRB Unfair Labor Practice Procedure 108 Unfair Labor Practice Remedies 110 Assessment of the LMRA, as amended, and NLRB Administration 112

Transportation-Related Labor Relations Law (Railway and Airlines) 114 Assessment of the RLA 116 Deregulation Legislation in Railroads and Airlines 117 Promising Developments Regarding the RLA 117 Additional Laws That Affect Labor Relations 118 Employee Retirement Income Security Act of 1974 118 The Americans with Disabilities Act of 1990 119 Bankruptcy Act 119 Worker Adjustment and Retraining Notification Act 119 Racketeer Influenced and Corrupt Organizations Act of 1970 120 Employment Discrimination Laws and Executive Orders 120 Other Related Labor Relations Laws 121

Case Study 3-1: The Great Temperature Debate 128

Case Study 3-2: Independent Contractors? Or Employees? 128

Case Study 3-3: NLRB Jurisdiction over a Private Charter School 131

Case Study 3-4: Determination of Supervisory Status 132

Contents v

Chapter 4 Unions and Management: Key Participants in the Labor Relations Process 134

Goals and Strategies: Management and Unions 135 Company Strategic Planning 136 Nonunion Companies Strategies 137

Labor Relations in Action: Post-Electromation: Tests to Determine Whether Teams and their Activities Are in Violation of 8(a)(2) of NLRA 142

Unionized Companies Strategies 142 Union Strategic Planning 145 Company Organization for Labor Relations Activities 149 Union Governance and Structure 151

The Local Union 154 Differences between Local Craft and Industrial Unions 155 Government and Operation of the Local Union 157 The National or International Union 159 Leadership and Democracy 161

Labor Relations in Action: Rules Governing Union Officer Elections (U.S. Department of Labor) 162

Profile of Union Leaders 162 Administration 163 Professional Staff Members 163 Services to and Control of Locals 164 Dues, Fees, and Distribution of Funds 165 Mergers of National Unions 166 Intermediate Organizational Units 167 Independent Unions 167 Employee Associations 168 The American Federation of Labor and Congress of Industrial Organizations (AFL-CIO) 168 Organizational Structure 169

Union Corruption and the Landrum Griffin Act 175 Union Security 177

Union Security Provisions 178 Closed Shop 178 Union Shop 178 Agency Shop 179 Contingency Union Shop 181 Union Hiring Hall 181 Preferential Treatment Clause 182 Dues Checkoff 182 Right-to-Work Laws: Controversy and Effects 182 Arguments for Right to Work Laws 185 Arguments for Abolishing Right-to-Work Laws 186 Recent U.S. Supreme Court Decision 187

Case Study 4-1: Employee Rights under the Landrum Griffin Act 194

Case Study 4-2: Financial Core Membership Rights under the Beck Decision 195

Chapter 5 Why and How Unions Are Organized 197

Why Unions Are Formed 198 Work and Job Conditions 198 Employees Backgrounds and Needs 200 Influences on Employees Votes for and against Unions 201 The Union s Challenge of Organizing the Diverse Workforce 203 Organizing Professional Employees 203 Activities of the Union in Organizing Employees 205 Activities of the Company in Union Organizing 209 Unintended Consequences of Anti-Union Behavior 212 Methods for Organizing Unions 212

Labor Relations in Action: Volkswagen and the United Auto Workers Chattanooga, Tennessee 216

Labor Relations in Action: Objections to Joining the Union 218

Labor Relations in Action: Examples of Employer Messages during a Representation Election Campaign 220

Labor Relations in Action: Interesting Comparison: FedEx and UPS (United Parcel Service) 224

Duties of the Exclusive Bargaining Agent and Employer 230 After Election Loss by the Union 230 Proposed Mandatory Secret Ballot Elections versus Employee Free Choice Act (EFCA) 230

vi Contents

Conduct of the Representation Election Campaign 233 Campaign Doctrines and NLRB Policies 233 Captive Audience 24-Hour Rule 234 Polling or Questioning Employees 234 Distribution of Union Literature and Solicitation by Employees on Company Property 235 Showing Films during Election Campaigns 235 Use of E-Mail, Internet, and Social Media 236 New Union Strategies 237

Removing a Labor Union 238 Labor Relations in Action: Union Salting: A New Union-Organizing Tactic 239

Case Study 5-1: Are These Employees Engaged in a Protected Concerted Activity? 251

Case Study 5-2: Are the Employees Involved in Activities That Are Legal? 251

Case Study 5-3: Are the Field Supervisors Supervisors under the National Labor Relations Act (NLRA)? 252

Case Study 5-4: Are These Employees Activities Legally Protected under the National Labor Relations Act? 253

Case Study 5-5: Did the Company Violate the Section 8(a)(1) of the LMRA When It Discharged the Employee? 255

Case Study 5-6: Bulletin Board Use 257

Case Study 5-7: Nonemployee Union Solicitation Activity 258

Case Study 5-8: Campaign Threats or Implied Promise of Benefit? 259

Case Study 5-9: The T-Shirt Offer and Picnic Photographs 261

Classroom Exercise 5.1: Designing Union Election Campaign Literature 263

Part 2 The Bargaining Process and Outcomes

Chapter 6 Negotiating the Labor Agreement 266

Collective Bargaining: Definition and Structure 267 Bargaining Structure 268 The Bargaining Unit 270

Negotiation Preparation Activities 274 Selection of the Negotiating Team and Related Bargaining Responsibilities 274 Proposal Determination and Assessment 276 Formulating Proposals 277 The Bargaining Range 279

Labor Relations in Action: Bargaining Goals for Registered Nurses 282 Costing Contract Proposals 283

Understanding Collective Bargaining Behavior: A Framework 285 Distributive and Integrative Bargaining: Two Different Approaches 285 Strategies and Tactics 286 The Bargaining Power Model 287 Factors Potentially Affecting Both Bargaining Power Equations 290 Factors Affecting a Union s Disagreement and Agreement Costs 290 Factors Affecting Management s Agreement and Disagreement Costs 291 Complexities Associated with the Bargaining Power Model 291 Attitudinal Structuring 292 Intraorganizational Bargaining 292

Ethical and Legal Considerations in Collective Bargaining 293 The Legal Duty to Bargain in Good Faith 295 Type of Bargaining Subject 295

Specific Bargaining Actions 297 Totality of Conduct 298 Bargaining over

Contents vii

Managerial Rights 300 Successor Employer Bargaining Obligations 303 Collective Bargaining under Bankruptcy Proceedings 303 Legal Remedies

Associated with Violations of the Duty to Bargain in Good Faith 304 Contract Ratification 306 Explanation of Voting Behavior 306

Labor Relations in Action: Contract Ratification Process Affecting East and Gulf Coast Ports 307

Reasons for Rejection of Tentative Contract Agreements 308 Case Study 6-1: The Funeral Leave Policy Proposal 317

Case Study 6-2: Classification of a Bargaining Subject 318

Case Study 6-3: The Influenza Work Rule 319

Case Study 6-4: Refusal to Furnish Requested Information 322

Case Study 6-5: The Mileage Reimbursement Policy 323

Chapter 7 Economic Issues 325

Industrial Wage Differentials 327 Occupational Wage Differentials and the Role of Job Evaluation and Wage Surveys 329

Evaluating Jobs within the Organization 329 Surveys to Compare Firms Wage Structures 331 Production Standards and Wage Incentives 332 Wage-Setting Criteria: Arguments Used by Management and Union Officials in Wage Determination 336

Labor Relations in Action: Living Wage Ordinances: What are They? What Are Their Effects? 337

Differential Features of the Work: Job Evaluation and the Wage Spread 338 Two-Tier Wage Plans 340

Labor Relations in Action: The Waxing and Waning of Two-Tier Wage Plans 342 Wage Comparability 343 Ability to Pay 344 Productivity 345 Cost of Living 348 Wage Adjustments during the Term or Duration of the Labor Agreement 349 Lump-Sum Pay Adjustments 351

Employee Benefits 351 Insurance and Health Benefits 352 Health Care Cost Containment 353 Income Maintenance 354 Premium Pay Overtime and Other Supplements 355 Pay for Time Not Worked Holidays, Vacations, and Rest Periods 357

Pensions 358 Family and Child-Care Benefits 362 Other Benefits 363 Union Effects on Wages and Benefits 363 Case Study 7-1: Adding Insult to Injury 378

Case Study 7-2: Unilateral Freeze of Defined Benefit Pension Plan 380

Case Study 7-3: A Change in the Medical Insurance Plan 381

Case Study 7-4: Does the Deputy Sheriff Deserve a Pay Raise? 383

Classroom Exercise 7.1: Employee Benefits 386

Chapter 8 Administrative Issues 387

Technological Change and Job Protection 388 Labor Relations in Action: High Performance Work Organization (HPWO) Partnership Principles 391

viii Contents

Benefits of Technological Change 391 Negative Effects of Technological Change 392

Job Security and Personnel Changes 393 Job Security and the Changing Psychological Contract 394 Job Security Work Rules 395 Plant Closures, Downsizing, and WARN 397 Subcontracting, Outsourcing, and Work Transfer 399

Labor Relations in Action: Creating Good Jobs Today and in the Future 402 Work Assignments and Jurisdiction 403 Work Scheduling 404

Labor Relations in Action: Computer Programming and Labor Relations 405 The Role of Seniority in Personnel Changes 406 Legal Issues Involving Seniority in Administrative Determinations 410

Employee Training 412 Work Restructuring 415 Safety and Health 416 Labor Relations in Action: Domestic Violence and Trade Unions 419

Case Study 8-1: Discharged for Facebook Comments 433

Case Study 8-2: The Outsourced Work 433

Case Study 8-3: The Disputed Safety Bonus 434

Case Study 8-4: Donning Safety Equipment? or Changing Clothes? 435

Chapter 9 Resolving Negotiation (Interest) Disputes and the Use of Economic Pressure 437

Impasse Resolution Procedures Involving a Third-Party Neutral 439 Mediation 439 Fact-Finding 442 Interest Arbitration 442

Mediation-Arbitration (Med-Arb) 446 Other Third-Party Procedures 447

Arbitration-Mediation 447 Tri-Offer Arbitration 448 Double Final-Offer Arbitration 448 Night Baseball Arbitration 449

Strikes and Lockouts: The Use of Economic Pressure to Resolve Interest Disputes 449

Replacement Workers during Strikes and Lockouts 450 Types of Strikes 451 Labor Relations in Action: 2011 National Football League Contract Negotiations and Lockout 452

Reasons for Strikes 456 Strategic Purposes of a Strike 458 Strike Experiences and Preparation 459 Reinstatement Rights of Unfair Labor Practice and Economic Strikers 463 Unlawful Strike Misconduct 465 Employee Picketing Rights 466 Secondary Strikes, Boycotts, and Picketing 466

National Emergency Dispute Resolution Procedures 471 Case Study 9-1: An Interest Arbitration Hearing 485

Case Study 9-2: Legitimate Picketing? Or Illegal Secondary Boycott? 487

Case Study 9-3: The Aftermath of a Strike 489

Case Study 9-4: The Right to Strike 491

Case Study 9-5: Denial of Health Care Benefits to Striking Employees 492

Case Study 9-6: Product Picket Activity 493

Contents ix

Part 3 Administering the Labor Agreement

Chapter 10 Contract Administration 496

Labor Relations in Action: Rules Governing Workplace Investigations 499

Grievances: Definition, Sources, and Significance 499 Reasons for Employee Grievances 502 Significance of Employee Grievances 505 Preparation for Grievance Processing 506

Steps in the Grievance Procedure 508 First Step of Grievance Procedure 509 Second Step of Grievance Procedure 511 Third Step of Grievance Procedure 511 Fourth Step of Grievance Procedure: Alternative Dispute Resolution (ADR) 512 Different Approaches by Grievance Mediators 513 Administrative Complexities of Processing Grievances 515 Other Forms of ADR 516

Labor Relations in Action: Tough Contract Administration Questions 517

Grievance Resolution: Relationships and Flexibility 517 Codified Relationships 518

Power Relationships 518 Empathetic Relationships 520 Flexible Consideration in Processing Employee Grievances 520

The Union s Duty of Fair Representation 522 Case Study 10-1: Are These Grievances Arbitrable? 531

Case Study 10-2: Should the Union Represent Slick Willie Owens? 534

Classroom Exercise 10.1: Arbitration Scenario 536

Chapter 11 Labor and Employment Arbitration 537

Development of Labor Arbitration 538 Elements of a Typical Arbitration Proceeding 540

Selection and Characteristics of Arbitrators 541 Decision to Arbitrate 544 Prehearing Activities 545 The Arbitration Hearing 545

Labor Relations in Action: Improving Preparation for Arbitration Hearings 548

Comparison of Arbitration and Judicial Proceedings 549 Evidence in Arbitration vs. in Judicial Proceedings 550 Arbitration in the Railway and Airline Industries 552

The Arbitrator s Decision 552 Decision-Making Guidelines Used by Arbitrators 553

Labor Relations in Action: Example of Contract Language Ambiguity 556 Past Practice 558 Previous Labor Arbitration Decisions 559

Current Issues Affecting Arbitration 560 Legal Jurisdiction 560

Labor Relations in Action: Tenets of Labor Arbitration 561 Labor Arbitration and the National Labor Relations Board 564

Labor Relations in Action: National Football League v. National Football League Players Association (Tom Brady) 566

Labor Relations in Action: Things They Never Told Me before I Became an Arbitrator 567

x Contents

Appraising Labor Arbitration s Effectiveness 567 Procedural Problems 569 Employment Arbitration 571

Labor Relations in Action: How Employment Arbitration Differs from Arbitration Found in Labor Agreements 575

Public Policy Implications for the Future 578 Case Study 11-1: Whether the Employer Violated the Contract by Implementing Fleet Operation Changes on or about June 18, 2014? If so, What Is the Appropriate Remedy? 587

Case Study 11-2: Issue: Did the Company Violate the Collective Bargaining Agreement When It Reduced the Hours of Full-Time Employees to Less than 35 Hours per Week as This Action Relates to the NLRB Charge? 592

Case Study 11-3: Should Employee Be Penalized for On-the-Job Injury? 597

Chapter 12 Employee Discipline 600

The Changing Significance of Industrial Discipline 601 Historical Overview of Employer Disciplinary Policies 601 Employment-at-Will Doctrine and Wrongful Discharge Consideration for Nonunion Employees 603 Present-Day Significance of Employee Discipline 605

Labor Relations in Action: Disciplinary Possibilities on the Assembly Line 606

Elements of the Just Cause Principle in Employee Discipline 608 Discipline for Just Cause and Discipline s Legitimate Purpose 608 Degree of Proof in Disciplinary Cases: Nature of the Evidence and Witness Credibility 610 Labor Relations in Action: Employee Discipline and Social Media 612 Effect of Work Rules on Discipline 613 Progressive Discipline 616 Disciplinary Penalty and Mitigating Circumstances 617 Possible Collision between Discharge Decisions and Public Policy 620

Labor Relations in Action: Examples of Employee Misconduct and Mitigating Factors to Consider in Employee Discipline 621

Due Process 623 Case Study 12-1: Issue: Was Mr. Babcock s Termination for Just Cause? If Not, What Is the Remedy? 635

Case Study 12-2: Falsification of Application 641

Part 4 Applying the Labor Relations Process to Different Labor Relations Systems

Chapter 13 Labor Relations in the Public Sector 650

Significance of Public-Sector Labor Relations 651 Labor Legislation in the Public Sector 652 Current Challenges to Collective Bargaining Rights of Public Unions 654

Labor Relations in Action: States That Have Passed Laws Limiting Representational Rights for Public Sector Employees Since 2010 656

Federal-Sector Labor Relations Legislation 657 Labor Relations in Action: Privatization of the Public Sector 658

Appropriate Bargaining Units and Union Recognition in the Federal Sector 660 Negotiable Subjects in the Federal Sector 660 Unfair Labor Practices

Contents xi

in the Federal Sector 661 Grievance Procedures and Arbitration in the Federal Sector 662 Labor Management Forums in the Federal Government 662

Labor Relations in Action: Arbitration under the Federal Service Labor management Relations Statute 663

Homeland Security Act 663 Labor Relations in the U.S. Postal Service 665 Similarities between Private- and Public-Sector Bargaining 666 Differences between Private-Sector and Public-Sector Bargaining 668

The Market Economy Does Not Operate in the Public Sector 668 The Relationship between the Budget and Public-Sector Bargaining Processes 669 Employee Rights and Obligations 669

Collective Bargaining Structures and Decision-Making Processes 671 Negotiable Issues and Bargaining Tactics 672 Grievance Administration 675 The Right-to-Strike Controversy 675 Discipline of Public- Sector Employees 676

Labor Relations in Action: Douglas Factors in Deciding Disciplinary Punishment of Federal Employees 677

Interest Dispute Impasse-Resolution Procedures in the Public Sector 677 Mediation 678 Fact-Finding and Arbitration of Interest Disputes 678 Effectiveness of Fact-Finding and Arbitration of Interest Disputes 680 Referendum 681 Conclusions on Public-Sector Labor Relations 682 Challenges and Opportunities for Public-Sector Unions 684

Case Study 13-1: Unions Representing Public Employees 694

Case Study 13-2: Discharge for Off-Duty Conduct 695

Chapter 14 Labor Relations in Multinational Corporations and in Other Countries 701

Multinational Corporations and Transnational Collective Bargaining 702 Union Approaches to Multinational Bargaining and Employer Reactions 706 Labor Relations in Action: Core Labor Standards 707

Obstacles for Unions in Bargaining with Multinational Corporations 708 Effects of Unions on Multinational Corporations 709 Conclusions and Predictions on Transnational Bargaining 710

Globalization and Concerns about Free Trade 710 North American Agreement on Labor Cooperation (NAALC) 712

Unions in Other Countries 714 Canada 715 Mexico, Central America, and South America 719 Cuba 724

Labor Relations in Action: Two Views of Trade Unions in Cuba 725 Western Europe 725 European Union 727 Great Britain 730 Germany 731 Central and Eastern Europe Former Soviet Bloc Countries 733 Japan 734 South Korea 738 Australia 739 China 741

Classroom Exercise 14.1: Mobile Factory 755

Appendix A Collective Bargaining Negotiations Exercise 756

Author Index 759

Subject Index 762

xii Contents

Preface

This textbook is a culmination of more than 100 years of classroom teaching to more than 10,000 undergraduate and graduate college students. The eleventh edition of The Labor Relations Process reflects our original objective in writing the book: to provide stu- dents with a textbook that will generate an understanding of and appreciation for core elements of union management relationships. We have attempted to involve the student with the subject matter and to create an interest in related issues that will continue after the student completes the course. A model of the labor relations process (Exhibit 1.2) is presented in the first chapter and expanded in subsequent chapters through extensive references to academics and practitioners that focus on real-world situations and con- cerns. This provides a balance between concepts and applications for the reader.

The eleventh edition of The Labor Relations Process continues our long-standing tra- dition of being the most comprehensive text on the market.

Features of the Eleventh Edition

The objective of this text has always been to increase student involvement by focusing on applying the concepts being taught. This emphasis is unmatched by other textbooks in this area. This application generates student interest in the subject matter while enabling students to demonstrate their understanding of concepts and principles and apply this information to real-world situations. These opportunities and related efforts should sharpen readers communication skills, a desirable skill for any student, regardless of his or her academic major or intended occupation.

Application has been enhanced through Labor Relations in Action features; National Labor Relations Board (NLRB), court, or arbitration case studies at the end of most chapters; and class activity experiential exercises designed to promote active stu- dent participation in the learning process. There are updated Internet exercises called Exploring the Web at the end of each chapter to enhance student learning and appli-

cation and to create interest in independent research. The negotiation exercise with com- puter applications and the arbitration cases have been prepared for role-playing experience to promote the reality of union management relations. The book has also maintained many of the previous edition s features: a focus on currency, ethics, interna- tional issues, and real-world applications:

Chapter-Opening Vignettes. Each chapter begins with a short story or situation that prepares the reader for the chapter s subject. These encourage critical thinking and make the chapter s subject matter relevant to the student. Currency. This edition offers many opportunities for readers to become involved with the current applications of the labor relations process. For example, recent col- lective bargaining occurred with management and union officials in the auto indus- try and recent bargaining subjects such as health care costs and technological change are given expanded coverage in this edition. Ethics. Ethical issues concerning such topics as bargaining behavior, union organiz- ing, employee empowerment, and termination for union activities are addressed throughout the book.

xiii

International Labor. Chapter 14 has been updated and expanded to include changes that have occurred in Canada, Mexico, China, Australia, and the European Union, as well as the effects of the North American Free Trade (NAFTA) Agreement. Real-World Applications. The Labor Relations in Action boxes integrate current events in labor relations and have been updated with several new applications.

Key Chapter-by-Chapter Changes in the Eleventh Edition

Each chapter has been updated with current research, laws and judicial decisions, studies, and statistics. Additional attention has been given to explaining the labor relations pro- cess and influences. Following are some of the key updates to this edition:

Chapter 1 features updated information on mediators, the effect of the recent U.S. economic downturn, and its effect on the labor pool, and encourages online searches on current labor relations topics, supplemented by Internet exercises in every chapter. Chapter 2 has new information about early legal developments involving labor management relationships, the Knights of Labor, and the origin and goals of the American Federation of Labor. Chapter 3 presents recent key decisions of the NLRB and courts affecting labor rela- tions, such as classification of hospital interns and residents, graduate students in academic institutions, and supervisors for purposes of determining coverage as employees under the Labor Management Relations Act. The chapter also includes

expanded coverage of the NLRB s unfair labor practice procedure, and the concept of concerted and protected activity under the LMRA. Chapter 4 offers updates in the leadership of the American Federation of Labor- Congress of Industrial Organizations (AFL-CIO), expanded coverage of financial core membership, and right-to-work legislation. Chapter 5 covers modern union-organizing tactics, with the latest updates on union salting, card check, and neutrality agreements. This chapter addresses NLRB policies with changes from President Obama s appointees and new representation election rules. Chapter 6 explores collective bargaining preparation and behavior, including a com- parison of distributive bargaining versus mutual gain (interest-based) bargaining approaches and contract ratification procedures. There s also a new feature about the labor relations struggle for nurses and two new case studies. Chapter 7 features current information on wage and benefit trends and expanded coverage of wage incentive pay plans, such as skill-based pay, health care cost con- tainment, and pension plans. Chapter 8 covers technological change issues, efforts to foster more cooperative labor management relationships, safety and health issues, and the Americans with Disabilities Act. Chapter 9 reveals the role of the mediator as viewed through the eyes of one of the nation s prominent labor mediators. Coverage includes trends in strike activity; legal decisions affecting employees and employers rights during a work stoppage; and secondary strike, picket, and boycott activity. Chapter 10 provides the important actions for a successful workplace investigation, elements of grievance mediation, and coverage of a union s legal duty of fair representation.

xiv Preface

Chapter 11 provides insights to the real world of labor/employment arbitration; offers a critique of employment arbitration; compares employment arbitration to labor arbitration; explores the controversy over mandated employment arbitration as a condition of employment; explains Due Process Protocol; explains the guide- lines used in arbitrator decisions; and reveals the arbitrator decision s potential con- flict and accommodation with public policy and the new NLRB deferral policy. Chapter 12 provides guidelines used by arbitrators in determining just cause and their consideration of due process principles. This chapter features updates on Weingarten rights, such as the withdrawal of the NLRB s extension of Weingarten rights to nonunion (unrepresented) employees. Chapter 13 addresses dramatic changes in public sector bargaining, which have resulted from budget problems and politics. The subjects of public sector dispute resolution, privatization of public services, and homeland security issues are addressed. Chapter 14 focuses on the labor relations issues among multinational corporations in a global economy and characteristics of labor relations systems of America s major trading partners, including NAFTA members, European Union countries, Australia, China, Japan, and Korea. The chapter also covers major recent develop- ments in those countries.

Supplementary Materials

Instructor s Manual with Test Bank This supplement includes chapter outlines, answers to end-of-chapter discussion ques- tions, case notes, suggested student readings and term projects, and both instructors and students instructions for the Collective Bargaining Negotiations Exercise (available on our product support Web site). The Test Bank has been fully revised, updated, and expanded.

Holley/Ross/Wolters Product Support Website Our product support website is a robust learning and resource center for both instructors and students. The self-assessment exercises on the site include:

An Industrial Relations Orientation Self-Assessment that measures the degree of one s pro-union or anti-union sentiments. Bargaining Strategy Orientation Self-Assessment that measure one s preference for different bargaining strategies (e.g., distributive vs. mutual gain). Mediator Effectiveness Potential Self-Assessment measures the degree to which one possesses the personal characteristics attributed to successful mediators. Quizzes presented as multiple-choice and true false questions for download by the instructor allow self-assessments by students in understanding materials related to each chapters key terms and concepts.

Preface xv

Acknowledgments

We are especially grateful to the following professors for their reviews and suggestions on this revision:

Jeffrey Arthur, Virginia Tech James Benson, Boise State University Kristian F. Braekkan, Virginia Tech Richard J. Campbell, University of Rio Grande Kim Hester, Arkansas State University Dr. Miguel R. Olivas-Lujan, Clarion University of Pennsylvania Tony Vrba, Tarleton State University

We also extend our appreciation to those who made valuable suggestions for previ- ous editions: Todd Baker, John C. Bird, Mollie Bowers, Gene Brady, James F. Byers, Joseph M. Cambridge, Anthony Campagna, James Chambers, William Chase, Boyd Childress, Milton Derber, Satish Desphande, Victor Devinatz, James B. Dworkin, Randyl D. Elkin, Geraldine Ellerbrock, Art Finkle, Paul Gerhart, Dennis W. Gibson, Carol L. Gilmore, Thomas P. Gilroy, David Gray, Charles R. Greer, Marvin Hill, Jr., Wayne Hochwarter, Janis Holden, Denise Tanguay Hoyer, Thomas Hyclak, H. Roy Kaplan, Zeinrab A. Karake, Katherine Karl, Philip Kienast, John Kilgour, Toni S. Knechtges, Kenneth A. Kovach, Charles Krider, Thomas W. Lloyd, Eugene Lorge, Howard T. Ludlow, Karl O. Magnusen, Douglas M. Mahoney, Marick Masters, William Maloney, Pamela Marett, Douglas McCabe, Patrick McHugh, Frank Milman, Jonathan Monat, Roy Moore, William L. Moore, Thomas Noble, Carol Nowicki, Lou Parrotta, Dane M. Partridge, Robert Penfield, Alex Pomnichowski, Roy R. Reynolds, Robert Rodgers, Richard L. Rowan, Sue Schaefer, Machelle K. Schroeder, Peter Sherer, David Shulenber- ger, Donna M. Testa, Herman A. Theeke, Peter A. Veglahn, Suzanne M. Vest, Jeffrey L. Walls, William Werther, Elizabeth Wesman, and Carolyn Wiley.

We also wish to thank Sarah M. Philips, Cathy Wright, and Charlie T. Cook for their aid in the preparation of this book.

Finally, we would like to thank Cengage Learning for its fine work on this book. We are especially grateful to Erin Joyner, Vice President and General Manager; Michael Roche, Senior Product Manager; Brian Pierce, Content Developer; Jennifer Ziegler, Senior Content Project Manager; Kristina Mose-Libon, Art Director; Emily Horowitz, Marketing Manager; and Casey Binder, Marketing Coordinator.

William H. Holley, Jr. Auburn University

William H. Ross University of Wisconsin La Crosse

xvi

About the Authors

William H. Holley, Jr., has had research published in a variety of journals including Labor Law Journal, Arbitration Journal, Employee Responsibilities and Rights Journal, Journal of Construction Engineering and Management, and Industrial Relations. He has engaged in consulting with private and public organizations and served as an Administrative Hearing Officer in the grievance procedure of the City of Auburn, Alabama. Dr. Wolters is a mem- ber of the Labor and Employment Relations Association. Outside interests include golfing and motorcycling.

William H. Ross has taught labor relations, collective bargaining, and human resource management courses for 30 years. He teaches at the University of Wisconsin La Crosse, where he also serves as Chairperson of the Department of Management. He does research on third-party dispute resolution procedures, including mediation and arbitration, as well as the implications of technological innovations for human resource management. His research has been published in Academy of Management Review, Journal of Applied Psychol- ogy, Labor Law Journal, and Negotiation Journal. Dr. Ross is on the editorial board of The International Journal of Conflict Management and Negotiation and Conflict Management Research. He is a member of the Academy of Management, the Society for Industrial- Organizational Psychology, and other professional organizations. Dr. Ross received his B.A. from Auburn University and his M.A. and Ph.D. in Industrial-Organizational Psy- chology, with a minor in Labor and Industrial Relations, from the University of Illinois.

Roger S. Wolters is professor emeritus in the Department of Management at Auburn University, where his primary interests included labor law, collective bargaining, and dis- pute resolution. Coauthor of Labor Relations: An Experiential and Case Approach with William H. Holley, Jr., his research was published in Labor Law Journal, Arbitration Jour- nal, Employee Responsibilities and Rights Journal, Journal of Construction Engineering and Management, Industrial Relations, and other journals. Dr. Wolters has consulted to private and public organizations and served as an Administrative Hearing Officer for grievances with the City of Auburn, Alabama. He earned his B.B.A. and M.A. from the University of North Florida and his Ph.D. in Labor and Industrial Relations from the University of Illinois.

xvii

The Labor Relations Process

PART1 Recognizing Rights and Responsibilities of Unions and Management

Part 1 introduces the labor relations process that will be discussed throughout the book, placing it in historical and legal perspec- tives. It also examines the difference between union and management organiza- tions and their labor relations strategies.

Chapter 1 Union Management Relationships in Perspective

Chapter 2 The History of Labor Management Relationships

Chapter 3 Legal Influences

Chapter 4 Unions and Management: Key Participants in the Labor Relations Process

Chapter 5 Why and How Unions Are Organized

3

CHAPTER 1

Union Management Relationships in Perspective

BOB SAT IN his office staring out the window and thinking about the future. As the human resources manager of the firm, Bob had just finished preparing an announcement to be sent to all employees informing them that the company had just been sold to a larger competitor. After 20 years of service, Bob was very proud of the employee relations that existed at his company and wondered how things might change now that a larger corporation would be in charge. Although Bob s unit was not unionized, he knew that the new owner had a number of unionized facilities within its corporate structure. Bob had never thought much about what it would be like to manage in a unionized firm and whether the management strategies he had relied upon throughout his career would be as effective or even entirely legal. How might the labor relations process change if he had to deal with employees as a group through their selected union representative rather than as individuals? Would there be an effort to equalize employment terms and policies between union and nonunion facilities of the new owner? Would unions already representing employees at other similar facilities of the owner now seek to organize employees at Bob s unit? While Bob had more questions than answers about the immediate future, he did resolve to be proactive by attempting to expand his current level of knowledge about the labor relations process.

4

Questions 1. In your opinion, what is the biggest difference between managing

employees in a unionized versus nonunion firm?

2. In your opinion, does having other unionized facilities within a corpora- tion s operating units alter management s approach to labor relations at its nonunion facilities and, if so, give an example to illustrate what you mean.

Today s global economy presents many challenges and opportunities for both employersand employees. As organizations seek to use resources both efficiently and effectively, there will be inevitable tension over how best to manage those assets to benefit both ownership and employees. The effective management of human resources is critical to maintaining an organization s competitiveness. Recognition of and respect for the legitimate interests of both labor and management are an important step in building and maintaining work relationships capable of adapting to change in the competitive environment most organizations face. Stable work relationships are built upon trust between ownership and employees, which is reflected in both the actions and words of the parties.

Chapter 1 seeks to build a basic frame of reference for understanding the labor relations process by first defining the three phases of the labor relations process and then placing this process into an analytical perspective. Chapter 1 introduces the activities, focal point, participants, and influences of the labor relations process, which are discussed in detail in subsequent chapters. The chapter ends with a discussion of the current status of union membership and the relevance of labor organizations in today s economy.

Phases in the Labor Relations Process

The labor relations process involves managers (representing the ownership interests) and a labor organization (union), selected by employees as their exclusive bargaining agent to rep- resent their interests. Managers and union representatives jointly determine and administer work rules. Where employees are not represented by a union, work rules are typically deter- mined unilaterally by the employer with the opportunity for individual bargaining between an employee and his or her employer at the employer s discretion. The negotiation and administration of work rules demonstrate considerable variation across public- and private- sector organizations in the United States, reflecting unique aspects of each organization.

The labor relations process includes three basic phases:

1. Recognition of the legitimate rights and responsibilities of union and manage- ment representatives. Employees have a legal right to form and join a union or to refrain from doing so (see Chapters 3 and 5). Labor law also sets forth the rights and responsibilities of management and union officials to abide by applicable laws and labor agreement (contract) terms. From a union s perspective, phase 1 may be the most impor- tant phase because without gaining legal recognition as the exclusive bargaining represen- tative of a group of employees in phase 1, the process does not proceed to phases 2 and 3.

2. Negotiation of the labor agreement, including appropriate strategies, tactics, and impasse resolution techniques. Contract negotiation involves union and management

5

representatives jointly determining work rules (policies) governing the parties rights and responsibilities affecting wages, hours, or other terms and conditions of employ- ment (discussed in Chapters 6, 7, and 8). The outcomes of such negotiations have an important impact on a firm s labor costs, management s rights, and covered employees standard of living. Most interest disputes (i.e., a dispute over what the terms or condi- tions of employment or work rules will be) are resolved voluntarily by union and man- agement negotiators during the bargaining process. Strikes, lockouts, mediation, and interest arbitration are examples of impasse resolution techniques (discussed in Chapter 9) that can be used to resolve an interest dispute. Phase 2 of the labor relations process generally receives the most media attention even though phases 1 and 3 are equally essential.

3. Administration of the negotiated labor agreement the interpretation and applica- tion of labor contract terms on a daily basis. Once contract terms have been settled in phase 2, there is a need to apply those terms every day during the stated term or dura- tion of the labor agreement. The contract enforcement phase of the labor relations pro- cess is generally accomplished through daily union and management interactions and, when necessary, the use of a grievance-arbitration procedure to resolve rights disputes (i.e., disputes over the interpretation or application of a contract s terms, discussed in Chapters 10, 11, and 12). Resolving rights disputes accounts for the most time and energy spent by union and management officials in the labor relations process and usually involves a larger number of these officials than the preceding phases.

Of course, not all labor management relationships progress smoothly through these three phases. Indeed, employees and their chosen union representative at some public- and private-sector organizations have a difficult time moving from the recognition of an employee bargaining representative (phase 1) through the remaining two phases of the process.1

The phases of the labor relations process are subject to qualitative variation as well. In the first phase, for example, organizations vary in the amount of mutual trust and respect union and management officials have for each other s goals. In the second phase, negotiations are carried out with different levels of intelligence, preparation, and sincere desire to achieve results. The third phase may vary as to how well the negotiated labor agreement is understood and effectively administered in good faith by both parties. There are probably as many different relationships as there are union and management officials negotiating labor agreements.

Elements in the Labor Relations Process

Exhibit 1.1 provides a framework for the labor relations process. The elements shown can be applied to the labor relations activities at a single or multiple facilities owned by a single company, or in an entire industry. The exhibit cites three major elements: (1) the negotiation and administration of work rules, which are the focal point of labor relations; (2) the key participants in the process, who are the union and management organiza- tions, employees, third-party neutrals, and branches of government (administrative, leg- islative, and judicial); and (3) the constraints or influences affecting the parties in their negotiation and administration of work rules.

Focal Point of Labor Relations: Work Rules Any academic discipline needs a focal point so that research, investigation, and commen- tary can generate applicable insights. Labor or industrial relations can become a

6 PART 1 Recognizing Rights and Responsibilities of Unions and Management

broad topic including many academic concerns. For example, sociologists have examined employee alienation; psychologists have investigated causes of job satisfaction and work motivation; economists have studied wage determination; and political scientists have assessed the impact of union and management as interest groups attempting to influence government policy and legislative outcomes.

John Dunlop s book Industrial Relations Systems provides a useful focal point for these diverse academic approaches. Dunlop suggested that the center of attention in labor relations should be the work rules negotiated between management and union offi- cials. Work rules facilitate the implementation of operational plans designed to accom- plish an organization s strategic goals. Work rules determine employees standard of living and the work environment within which employees will spend a substantial por- tion of their time. Today external factors (e.g., state of the economy, technology, interna- tional forces) play an increased role in determining the substance and type of work rules created by union and management representatives.

It is important to understand the influences determining the creation and particular content of work rules.2 Work rules can be placed in two general categories: (1) rules governing compensation in all its forms (e.g., wages, overtime payments, vacations, holi- days, shift premiums) and (2) rules specifying the employees and employers job rights and obligations, such as no employee strike or employer lockout during the term of the labor agreement. This second category of rules may specify performance standards,

Work Rules

Exhibit 1.1 Elements in the Labor Relations Process

CHAPTER 1 Union Management Relationships in Perspective 7

promotion qualifications and procedures, job specifications, and layoff procedures. Addi- tional examples of work rules are furnished in Exhibit 1.2.

Compensation work rules, such as a negotiated wage rate, often capture the attention of employees and the media because they are negotiation outcomes that are easier for most people to understand and compare. Union and management officials, however, may attach equal or greater importance to work rules regarding the second work rule category, job rights, and obligations. Managers are often adamant about retaining control over key oper- ating decisions such as determining the number and types of employees, equipment and technology decisions, geographic location of company operations, and operating hours. In order to appreciate the importance of these rules, consider the following three examples: Managers at Company A are interested in obtaining a work rule that permits production employees to perform minor repairs, instead of requiring higher paid maintenance employees to do the tasks. At Company B the union wants to reduce forced overtime; they want workers to have the final decision about whether and when they will work over- time. About 39 percent of union contracts contain limitations on the right of management to require employees to work overtime. At Company C union leaders are seeking work rules that would change the standard work week to less than 40 hours required to earn full-time pay and benefits.3 Why would the union at Company C seek a shorter work week? Assuming the number of employee work hours required to meet a firm s workload is relatively stable, reducing the number of hours considered to be an employee s full work week would theoretically require additional employee positions (and potentially more due- paying union members) or create more overtime work opportunities for employees.

Work rules can vary depending upon whether they are common or unique in the sub- ject matter addressed and vague or specific in the wording used to express the rule. Because work rules are the outcome of joint negotiation between union and management represen- tatives, neither party typically gets the exact contract language it originally preferred. Com- promise language is often worded more generally, which allows room for interpretation. However, vague wording can lead to subsequent grievance disputes during the contract s term as management implements its interpretation of contract terms through job decisions and that interpretation is challenged by employees or their union representative through the grievance dispute process. The wording or interpretation of work rules can also change over time in response to changes in operating environments and the need for greater flexibility.

For example, the work rules for airline flight attendants today would most certainly dif- fer from the following three work rules formulated in the 1930s: (1) swat flies in the cabin after takeoff, (2) prevent passengers from throwing lighted cigar butts out the windows, and (3) carry a railroad timetable in case of plane trouble. Today, the flight attendants union is concerned with issues such as too much luggage stuffed into overhead compartments, which may fall and hit a passenger, and passenger use of cell phones during flights, which could pose a security risk by making it easier for terrorists to communicate with each other.4

An analysis of work rules helps to explain the complex output of the labor relations process. The formal labor agreement in this sense represents a compilation of jointly negotiated work rules. However, as discussed in Chapter 10, labor relations activities are not limited to the negotiation of work rules. The labor relations process also includes the everyday interpretation and application of work rules and the resolution of any disputes arising over such decisions.

Concern over health care workers exposure to H1N1 flu, the Ebola virus, and acquired immune deficiency syndrome (AIDS) represents working conditions that create a need for appropriate work rules to limit patients and health care workers exposure. A nurses union could seek to negotiate health and safety work rules aimed at protecting members from unnecessary occupational exposure or ensure the availability of appropri- ate treatment when exposure does occur.5

8 PART 1 Recognizing Rights and Responsibilities of Unions and Management

Exhibit 1.2 Examples of Work Rules Job or Industry

Classification Work Rule

Government Installation

The employer agrees to furnish adequate protective clothing for employees required to work outside during rain, sleet, hail, or other atmospheric conditions detrimental to health or safety, provided the employee subjected to such assignments normally and historically performs the majority of his or her work assign- ment indoors. Employees who normally perform a majority of their work outdoors shall furnish their own protective clothing

Electricians Where the work assignment of employees who have been assigned a permanent reporting location requires travel to and between other work locations and/or return to their permanent reporting location, the time consumed by the employees in such travel shall be counted as time worked

Health Care In situations where a department head determines that it is necessary for an employee to use bilingual skills, those employees who have been previously determined to possess those skills at a level necessary for the assignment, and who are so assigned by the department head, shall be eligible to receive additional compensation of 3 percent above the applicable pay rate for the time period of the assignment

Communications The company subscribes to the principle that a well-informed union leadership promotes harmony and efficiency in union management relations. The company agrees to notify the union of any proposed changes affecting rates of pay, hours of work, and other conditions of employment. It is understood that the company has the sole right to institute all such changes as it may consider necessary, subject to the terms of this agreement. The union agrees to cooperate with the company at all times in maintaining a high degree of service to its customers and through conscientious endeavor and application of effort to strive for the lowest possible costs

Professional Baseball

The player and the club recognize and agree that the player s participation in certain other sports may impair or destroy his or her ability and skill as a baseball player. Accordingly, the player agrees that he or she will not engage in professional boxing or wrestling, and that except with the written consent of the club, he or she will not engage in skiing, auto racing, motorcycle rac- ing, sky diving or in any game or exhibition of football, soccer, professional league basketball, ice hockey, or other sport involv- ing a substantial risk of personal injury

Television The latest version of the script will be made accessible to the player in the casting office 24 hours in advance of a scheduled reading or immediately after the scheduling of the interview, whichever occurs last

Manufacturing When employees are called to work at a time other than their regular reporting time, and after having clocked out, they shall be paid two hours plus one and one-half their straight time rate for all hours worked, but in no event will less than four hours at the straight rate be paid

Cemeteries In all cases where a grave is dug straight down, a second person shall be assigned to assist the digger after a depth of five feet is reached

CHAPTER 1 Union Management Relationships in Perspective 9

Companies and unions are also negotiating no-smoking rules in the workplace both as a health benefit and a means of reducing health care costs associated with smoking- related insurance claims. In 1908, a Columbia University professor insisted that the dele- terious effects of tobacco are greatly exaggerated, a belief that prevailed for the next 70 years. Now, union and management officials and possibly arbitrators at thousands of facilities jointly determine whether the issuance of a no-smoking policy is reasonable and whether an employee was properly disciplined or discharged for violating the rule. For example, in Kansas City, an arbitrator ruled that a collective bargaining agreement between the fire department and the firefighters union that allowed smoking in designated areas of fire stations prevailed over a newer law banning smoking inside work facilities.6

A majority of employers engage in one or more forms of electronic monitoring of employee work performance. Computer monitoring software, bar code scanners, video cameras, and pressure-sensitive plates have enabled management to monitor employee performance in various ways, such as counting the number of key strokes made on com- puter keyboards, listening to employees telephone conversations with customers, following truck drivers via Global Positioning Satellite (GPS) signals, or viewing computer files, e-mail messages, and Internet connections on company computers. Employers have several legitimate interests for monitoring. These include evaluating employees work performance, seeking to eliminate illegal employee misconduct, protecting their company s trade secrets, and defending the firm s business reputation. Employees have a legitimate interest in ensuring that their union representatives negotiate appropriate work rules to govern the time, place, and method of such electronic monitoring as well as the use of such informa- tion to reward or penalize employees work performance. Employees also have a legitimate interest in discussing wages, hours, and working conditions among themselves electroni- cally (e.g., on social media Web sites) without fear that managers are electronically moni- toring their discussions in order to punish those who criticize the company.7

Key Participants in the Labor Relations Process Through the organization s structure, managers represent the interests of the ownership as well as their own self-interests. Under a legal doctrine known as agency theory, man- agers are delegated authority by the owners to make decisions required to operate the organization. Because managers represent the owners interests in employment relations matters, U.S. managers do not generally have a legally protected right to unionize.

Managers work at various levels within the organization from first-line supervisors or department heads to the highest ranking management official (e.g., chief executive officer). Labor relations managers are typically found at corporate, divisional, and plant levels. Companies with both represented (union) and unrepresented (nonunion) employees or facilities often prefer the term human resources manager rather than labor relations manager. Organizations that operate different facilities in different geographic locations may emphasize standardizing some work rules (e.g., management rights) at all locations while insisting that other work rules, such as a wage rate for a particular job classification, be based on local labor market conditions. Thus, wages would vary across facilities.

Plant-level labor relations managers implement these corporate directives, but they must also deal with other managers at each facility s location (particularly production and maintenance managers and first-line supervisors) who direct the daily work activities of hourly employees.

As will be further discussed in Chapter 10, first-line supervisors or department heads typically hear and attempt to resolve employees grievances on the production floor. In some cases, lower-level managers are surprised to learn that higher-level man- agement officials have overturned their decisions. Alert union leaders may use dissension

10 PART 1 Recognizing Rights and Responsibilities of Unions and Management

or lack of clear communication among different levels of management officials to influ- ence labor relations activities and the company s position toward unions.

Management consultants are individuals hired from outside the organization to provide some special service or expertise. The activities of management consultants in the labor relations process are varied and sometimes controversial, ranging from restruc- turing personnel practices in nonunion firms (in the absence of any active union- organizing campaign) to designing and presenting the employer s response throughout a formal union-organizing campaign. During an organizing campaign, both union sup- porters (often including professional union organizers) and union opponents (often including managers and managerial consultants) try to persuade employees to support (or oppose) forming a labor union; the campaign usually ends with a secret-ballot vote, supervised by the federal National Labor Relations Board (NLRB). One union estimate found that managerial consultants were involved in 75 percent of union-organizing cam- paigns.8 Employers who hire managerial consultants to thwart union-organizing efforts are more likely to engage in a number of legally and ethically questionable tactics. Employers who make threats of plant closings are more likely to hire outside consul-

tants, discharge union activists, hold captive audience meetings and supervisor one- on-ones, establish employee involvement committees during the organizing campaign, make unilateral changes in benefits and/or working conditions, use bribes and special favors, use electronic surveillance, threaten to report workers to the INS [U.S. Immigra- tion and Naturalization Service], and show anti-union films. 9 Controversy occurs over the consultants effectiveness. Research shows that the use of a management consultant can reduce the probability of a union win in very closely contested elections, but it does not appear to be as big an influence on union election outcomes as some other factors such as election-unit size (i.e., how many people will vote in a union representation elec- tion) or relevant labor market conditions.10

Effectively managing an organization s labor relations is an important part of the ownership goal of being competitive in the industry or market. Organizations with a quality labor management relationship may gain a competitive advantage over firms that lack the ability to gain cooperation and consensus from employees necessary to effectively implement change to meet new competitive pressures.

Union representatives, usually elected by the members to represent their employ- ment interests, are another key participant in the labor relations process. As elected representatives, union officials must consider the varied and sometimes conflicting inter- ests of individual employees within the bargaining unit seeking to build a consensus for decisions that benefit the majority of constituents. Unlike managers who are appointed by higher-level managers, union officials are subject to the political pressure of majority rule if they wish to be reelected to a union leadership position in the future. Unions as democratic organizations do experience internal differences of opinion on policies and priorities that union officials must learn to effectively manage. Every union has its own history, traditions, personalities, and accepted practices that can lead to observed differ- ences across union organizations as well as within a particular union. While different unions may share common interests and positions on many issues of common concern, each union tends to value maintaining its own independence and sense of self- determination in representing the interests of its membership.

Certainly some of the most significant participants in the labor relations process are nonmanagerial employees because they often determine whether a union is even present in an organization (representation elections and union-organizing drives are discussed in Chapter 5), whether a negotiated labor agreement is accepted or rejected, and the extent to which a threatened strike is actually carried out (see Chapter 9).

CHAPTER 1 Union Management Relationships in Perspective 11

Employees are treated here as a separate category because they may demonstrate dual loyalty to both their employer and union organization.11 Most employees want their organization to be successful but also value the ability of their union to voice employee concerns to managers or demand that employees be treated fairly both in com- pensation and work activities. For example, public employees such as firefighters, police, and teachers may feel torn between the critical or professional nature of their jobs and the strategic advantages of a strike. Auto workers may agree that operating costs, includ- ing labor costs, must be reduced for their employer to remain competitive. Yet they expect their union representative to ensure that when profitability improves employees will fairly share in that improvement. Employees varied interests help shape the exis- tence and content of particular work rules and thus employees are considered a third key participant in the labor relations process.

The government acting through its different branches executive, legislative, and judicial at the federal, state, and local levels represents another key participant in the labor relations process. As discussed in Chapters 2 and 3, the government s role in regulating labor relations has gradually increased over time as the importance of labor relations to the effective functioning of the economy has become more apparent. In the public sector, government officials also serve as managers in the labor relations process, representing both taxpayers and the general public s interests (discussed in Chapter 13).

In the private sector, the federal government has traditionally played an indirect role in determining the outcomes of work rule negotiations, preferring to allow union and management representatives to determine such work rules through the bargaining pro- cess. Governments in many other industrialized countries (see Chapter 14) take a much more active role in both regulating and determining the outcomes of specific work rules (e.g., amount of paid vacation time). The federal government s hands-off approach in most private-sector bargaining situations is based on the belief that most management and union officials are better equipped than their government counterparts to assess their needs and limitations and reach a mutually acceptable labor agreement.

Although the federal government does not dictate the terms of a negotiated labor agreement, laws, judicial decisions, and administrative agencies, such as the NLRB, can influence work rules and the ability to exercise legally granted rights. The following three examples illustrate this: First, legislation to deregulate the trucking and airline industries has contributed to reduced union membership and economic gains for employees.12 Sec- ond, the Age Discrimination in Employment Act prohibits union and management offi- cials from negotiating a mandatory retirement age of 60 years. Third, although some coal miners have long believed that females working in mines would be bad luck, union and management officials would be violating sexual discrimination aspects of the Civil Rights Act if they negotiated a provision prohibiting female employees from working in mines.

Third-party neutrals (i.e., mediators and arbitrators) represent a final key partici- pant in the labor relations process. Differences between union and management officials that arise in negotiating the terms of a labor agreement (interest disputes) or administer- ing its provisions (rights disputes) are often resolved with the aid of a third-party neu- tral. Mediators (discussed in Chapters 9 and 13), often supplied by the Federal Mediation and Conciliation Service (FMCS) or a state or private mediation agency, may be used to help resolve interest disputes during contract negotiations. The mediator assists the union and management officials to clarify and resolve their differences, thus promoting a voluntary settlement. The mediator does not possess any binding legal authority to require the parties to settle an interest dispute, but he or she will offer advice to help each party assess its own priorities and the costs or risks associated with failing to reach a voluntary agreement.

12 PART 1 Recognizing Rights and Responsibilities of Unions and Management

An arbitrator is a third-party neutral hired by union and management representa- tives to make a final and binding decision on a disputed issue. While final and binding arbitration may occasionally be used to resolve the terms of a new contract (an interest dispute ) (see Chapter 9), most often it is used to resolve grievances ( rights-type disputes ) arising during the term of a labor agreement over the interpretation or application of the contract s language (see Chapters 11 and 12).

Three Basic Assumptions Underlying U.S. Labor Relations

To better understand the U.S. labor relations system and the actions of its participants, it is helpful to bear in mind certain underlying assumptions that affect the thinking and behavior of most individuals within the system. Whereas the degree of support by some participants for these three basic assumptions has varied over the course of U.S. labor history, these assumptions have been the basis for a majority consensus for many years.

First, the free enterprise (capitalist) economic system in the United States creates an inherent conflict of interest between employers (owners) and employees. Both employees and employers seek to advance their own self-interests. Employers seek to maximize their return on capital invested, while employees seek to advance their pay, working con- ditions, and job security. Most of the interests employees seek to advance through the collective bargaining process represent an increased cost to the employer which, unless offset by cost savings elsewhere or higher productivity, may reduce the investment return desired by ownership. This creates a natural tension within a capitalist economic system between the pursuits of employees and employers legitimate interests. Such conflict should not be viewed in a negative light but rather as simply a reality of business opera- tion which must be managed effectively. The presence of some degree of inherent con- flict between employer and employee interests should also not be viewed as precluding opportunities for cooperation between the parties. Both employees and employers share a common interest in ensuring that the organization is competitive. Maintaining a suffi- cient number of qualified and motivated employees is necessary for an employer to attain desired organizational goals (e.g., productivity, product or service quality). Profits in turn permit an organization to provide competitive wages, benefits, and working con- ditions to help ensure the recruitment and retention of qualified employees. Ideally, employees perceive their own self-interest as best advanced by seeking to advance the interests of the organization as a whole.

A second underlying assumption of the U.S. labor relations system is that employees in a free and democratic society have a right to independently pursue their employment interests using lawful means. Employees should have a right to determine for themselves what is in their best interests and to pursue means of attaining such interests so long as the goals pursued and tactics used are legal. Only by allowing individuals to pursue their legitimate interests can a society foster the necessary support for prevailing economic, social, and political systems used to sustain the country. Employees may choose to pur- sue their legitimate interests on an individual basis or collectively by joining a labor organization. Managers may prefer to work with employees individually and avoid deal- ing with a union, in order to contain any wage disagreements to only a few people and to avoid negotiating widespread workplace rule changes. However, co-workers may see it as unfair when individual employees with unique skills negotiate special work arrange- ments or pay rates (sometimes called idiosyncratic deals). Further, perceived injustice has been shown to predict unionization. Therefore, such idiosyncratic deals can be chal- lenging to negotiate and implement for managers.13

CHAPTER 1 Union Management Relationships in Perspective 13

A third underlying assumption of the U.S. labor relations system is that collective bar- gaining provides a process for meaningful employee participation through independently chosen representatives in the determination of work rules. Employees in the U.S. labor relations system are not required to form or join a labor organization for the purpose of engaging in collective bargaining, but they are permitted to do so when a majority of the employee group expresses such a preference. In the absence of collective bargaining, indi- vidual bargaining may occur between an employer and his or her employee. Labor history suggests that most employees are at a relative bargaining power disadvantage in individual bargaining when confronted with the greater resources of their employer, but each employee is free to determine the degree of satisfaction that his or her own individual bar- gaining experience provides. Many unrepresented employees, for a variety of reasons, do not attempt to engage in individual or collective bargaining, thereby permitting the employer to unilaterally (without bargaining) establish work rules, setting the terms and conditions of employment. In limited cases, employment terms may be mandated by gov- ernment action (e.g., minimum wage law, safety, and health standards).

Exhibit 1.3 presents a list of some basic characteristics of the private-sector U.S. labor rela- tions system. These characteristics will be discussed in further detail throughout the text.

Constraints or Influences Affecting Participants Negotiation and Administration of Work Rules The labor relations participants who affect the development of work rules are influenced by external variables or constraints in their labor relations activities (see the outer circle of Exhibit 1.1). These constraints and influences can sometimes affect one another and may relate to a particular firm, local community, or society in general. The following discussion furnishes a few illustrations of how these constraints and influences can affect the existence and content of work rules.

State of the Economy: National, Industrial, and Firm-Specific Indicators The state of the economy is usually referred to by indicating movement among such quan- titative indicators as inflation, unemployment, and productivity. During the 1980s, the United States witnessed a rising inflation rate, which influenced the negotiation of work rules notably, union insistence that a labor agreement include provisions to increase wages if increases occur in the cost of living (see Chapter 7). In the early 1990s, the focus of negotiations was on wage increases, enhancing employee benefits, and containing rising health care costs. More recently, with slow economic growth, low inflation, and rising job losses, union and management negotiators returned to an emphasis on job security and other job protection issues. Many employers, citing competitive pressures, have successfully negotiated labor cost reductions involving wages, benefits (e.g., pensions, health care), and inefficient work rules (e.g., restrictive job descriptions).

Two economic indicators that can affect work rules are interest and unemployment rates. An increase in interest rates can slow home and industrial construction projects. The Federal Reserve Board voted to raise interest rates 17 times between June 2004 and June 2006 out of concern that too rapid economic growth might trigger an increase in consumer inflation.14 More recently, the Federal Reserve Board has cut interest rates to historically low levels in an effort to spur economic growth by making capital more available at reasonable cost. If employees wage gains do not at least match the rate of increase in consumer prices (inflation rate), the purchasing power of employees declines, adversely affecting employees standard of living. If interest rates are raised to fight

14 PART 1 Recognizing Rights and Responsibilities of Unions and Management

inflation, employees will pay more for consumer debt (e.g., credit cards, auto, or home loans). A union might respond to such a rising interest/inflation rate environment by seeking to negotiate pay improvements that exceed the rate of inflation as well as by offering group discount rates to members on benefits such as credit cards or various types of consumer loans. In a low interest/inflation rate environment, a union might focus more on job security issues knowing members are more likely to be satisfied with moderate wage and benefit improvements that match the low inflation rate.

The unemployment rate affects work rules that provide job protection. Chapter 6 discusses ways in which the unemployment rate can affect the bargaining power of union and management officials. If this and other economic measures pertaining to the gross national product, productivity, cost of living, compensation at all employee levels, and exports and imports are unfavorable, unions will be more likely to accept bargaining concessions. By the same token, strong product sales, economic growth, and low unemployment tend to strengthen union bargaining power as employers have more reason to compromise to avoid any disruption in the production of current products or services.

The National Bureau of Economic Research has determined that the most recent recession affecting the U.S. economy began in December 2007 when the national unem- ployment rate was 4.9 percent. By October 2009, the national unemployment rate had risen to 10.2 percent, representing 15.7 million individuals the highest rate since the recession in the early 1980s. By September 2014, the unemployment rate had declined to 5.9 percent, representing 9.3 million individuals. An additional 698,000 individuals were classified as discouraged workers who had given up searching for a job because they

Exhibit 1.3 Basic Characteristics of the U.S. Private-Sector Labor Relations System

Primarily a bilateral process (union and management) governed by a framework of labor laws. For example, LMRA, Labor Management Reporting and Disclo- sure Act (LMRDA), Railway Labor Act (RLA), OSHA, Family Medical Leave Act (FMLA), ERISA, ADA, Norris-LaGuardia Act, and anti-discrimination laws.

A highly decentralized bargaining structure that results in a large number of labor contracts negotiated most often between a single employer and a spe- cific union to cover a defined group of employees (bargaining unit) at a specific geographic location.

Recognition of the key legal principles of majority rule and exclusive bargaining representation. No union can gain the right to represent a group of employees for purposes of collective bargaining without first demonstrating the majority support (50 percent 1) of the employees in that group. Once recognized, the union is the only legal representative authorized to negotiate work rules with the employer to establish the work group s terms and conditions of employment.

Permits the use of economic pressure (e.g., strike, lockout, picketing, and boy- cott) to aid the parties (union and management) in reaching a voluntary negoti- ated settlement of interest disputes over what the terms and conditions of employment will be.

Encourages the use of final and binding arbitration, if voluntary grievance nego- tiation efforts fail, to resolve rights disputes that arise during the term of a con- tract over the interpretation or application of the labor agreement s terms.

Characterized by significant employer opposition to employee efforts to orga- nize and bargain collectively through representation by an independent labor union chosen by the employees themselves.

CHAPTER 1 Union Management Relationships in Perspective 15

believed no jobs were available for them.15 While unemployment rates are expected to continue to decline as economic recovery occurs, the decline is expected to be gradual, extending over several years, as employers are typically reluctant to add new jobs or fill existing vacancies until the recovery in product and service demand is well established.16

The skills, wage levels, and availability of employees in a relevant labor market can affect negotiated work rules. Management is often concerned with ensuring that an ade- quate supply of labor of the skill levels required to operate is available in a particular com- munity. For example, a firm needing skilled employees from a relatively low-skilled labor market supply would probably wish to negotiate work rules regarding apprenticeship pro- grams or other forms of job training. Management would also consider negotiating a rea- sonable employee probationary period (e.g., 60 120 days) within which it could terminate a union-represented employee who cannot learn the job and perform adequately, with no union right to protest the action through the labor contract s grievance procedure.

One example of a labor management cooperative effort to assist employees in adjust- ing to changes in labor market forces is the Alliance for Employee Growth and Develop- ment, Inc., created in 1986 as a joint enterprise by American Telephone & Telegraph (AT&T), the Communication Workers of America (CWA), and the International Brother- hood of Electrical Workers (IBEW) to help displaced workers. Today, the Alliance also includes employers Alcatel-Lucent, OFS Optical Fiber, and Avaya.17 The Alliance has pro- vided training and development services to more than 175,000 individuals, helping to pre- pare them to handle new technologies, job skills training (e.g., technical, customer service, teamwork), and career transition training. Other outstanding examples include the United Auto Workers (UAW)/General Motors Skills Centers and the joint training programs of Ford Motor Company and the UAW. The Service Employees International Union (SEIU) has partnered with Kaiser-Permanente in California to provide training to upgrade the skills of workers in entry-level jobs, such as housekeeping. Trainees can then move into health care related jobs such as medical assistant and acute care nursing assistant that offer higher pay and more career potential. The vacancies created in entry-level jobs are filled with those transferring from part-time positions and from newly hired unemployed and economically impoverished workers who have also received training. In the building trades, unions have played a major role in training skilled workers. Because workers move from employer to employer on a regular basis, single construction companies have less financial incentive to train employees who may end up working for a competitor. Therefore, the unions, through their training and apprenticeship programs, provide an obvious contribution to the general national welfare. In fact, unions and their contractors outspend their nonunion counterparts by a ratio of 50 to 1 in training investments.18

Both management and union representatives should share an interest in establishing competitive compensation rates for comparably skilled employees within a relevant external labor market and internally within the firm itself. Externally, when wages are increasing, both the firm and the union may want to pay comparable wage rates. Employees generally see this as fair and owners see it as a way to attract and retain good workers. In cases where the employer faces significant labor cost competition from nonunion or foreign employers, a union may have to agree to compensation reduc- tion that will permit a unionized employer to remain competitive in pricing goods or services sold in the firm s product or service markets. Internally, a job with higher skill or responsibility requirements should earn a higher compensation rate than jobs with less skill or job responsibility requirements.

The labor relations process can be affected by the product or service market where the company either sells its product or purchases key elements required for production of its products or services. Management would be more vulnerable if a strike occurred at

16 PART 1 Recognizing Rights and Responsibilities of Unions and Management

a time when major customer sales were anticipated or on-time delivery of promised goods was critical to meet a customer s needs. For example, management at a brewery would prefer to avoid a labor agreement expiring, possibly leading to a strike, during the summer months, when significant beverage sales are anticipated. A public school sys- tem would much prefer a contract expiration date in early summer after the regular school year has ended, rather than risk a possible work stoppage disruption if the con- tract expiration date coincided with the first day of the new school year.

A second dimension of the product market, the source of key elements for product manufacture, can be a factor affecting union members perceptions of job security. For example, the UAW union is concerned over the fact that many of the parts utilized in U.S. automobiles are being manufactured in other countries, creating job opportunities for foreign workers but not for UAW-represented employees.19

Another important consideration in the labor relations process is the financial market, the arena in which the employers (and unions) seek to borrow funds to finance their invest- ment strategies. Companies must consider exchange rate money value differences among countries, which affect the profitability of plant location and sales marketing decisions. Exchange rates between countries (see Chapter 14) can alter companies investment strategies because exchange rates affect comparative wage rates and, consequently, the comparative labor costs of production. As an example, when the peso in Mexico was devalued by as much as 50 percent of the U.S. dollar, the labor costs of production in Mexico declined dramatically and made producing goods in Mexico more attractive and economical for multinational corporations. A strong euro currency valuation in comparison to the U.S. dollar helped drive up labor production costs in European countries such as Germany, encouraging automakers such as Daimler AG (Mercedes) and Bavarian Motor Works (BMW) to build production plants in the United States.

When a company wants to expand its plant capacity and increase jobs, it often has to borrow money in the financial markets at the same time it may request wage conces- sions from a union (see Chapter 7) or request the elimination of work rule restrictions to improve productivity (see Chapter 8). Unions must be able to perform financial valuation analysis to support, for example, an employee stock option plan (ESOP) (see Chapter 7), or anticipate the advantages or disadvantages of the sale or merger of an existing employer s operations with another competitor or private equity fund from the perspective of union-represented employees.

Labor unions have been able to use their financial resources and become active in the financial markets as a source of capital. With U.S. employee pension funds valued in excess of $7 trillion, many unions believe that decisions on how to invest those funds ought to take into consideration the effect of capital investments on the economic and job security interests of union members.20 Thus, one goal of many unions is to invest pen- sion funds in firms that are already unionized. For example, the United Steelworkers have created a regional investment fund of $100 million called the Heartland Labor Capital Project, which has the following objectives: (1) invest in regional business and protect jobs, (2) promote economic awareness as well as training workers and unions and raising the level of influence on economic development, (3) stimulate regional economies, (4) encourage regional business enterprises by involving both labor and its allies to support institutional development, (5) provide capital to enterprises where unions have created more democratic and sustainable practices, and (6) provide prudent returns to investors.21

Other unions, including the American Federation of Labor-Congress of Industrial Organi- zations (AFL-CIO), have similar programs to promote jobs for union members.

Perhaps the most immediate and persistent influence on the creation of work rules is the technology of a particular workplace. Technology has four dimensions: (1) equipment

CHAPTER 1 Union Management Relationships in Perspective 17

used in the operation, (2) the pace and scheduling of work, (3) characteristics of the work environment and tasks to be performed, and (4) information exchange. Consider, for example, the major equipment found at a steel mill blast furnace, which requires a very high temperature for operation. Such a furnace cannot simply be turned on and off like a household oven. Often several days are required for either reaching the high operating temperature or for cooling the furnace for maintenance. This equipment characteristic affects the facility s work rules. In essence, steel mills must operate 24 hours a day, 7 days a week a situation prompting related work rules, such as wage premiums for working the night shift, weekends, or holidays. Other continuous operating organizations like hospitals, hotels, or large retail centers may face similar work rule issues.

In some cases, the introduction of equipment reduces or eliminates employees in a particular job classification. This situation occurs when industrial robots handle tasks formerly performed by employees. A rather common application occurs in the auto industry, where mechanically joined arms perform spot welding, spraying, machine unloading, and assembly. Unions faced with having membership replaced by robots have increased related bargaining demands to protect their members job security such as more paid time off; fewer hours comprising a regular work week (e.g., 35 or 38 hours versus a 40-hour week); or job transfer or retraining rights, enabling displaced workers to fill available vacant employment opportunities.

Technological advances in computer and communications have made many profes- sional jobs (e.g., accounting, engineering, and radiology) capable of being outsourced to workers at outside firms and even in different countries. Some workers benefit from new job opportunities, while others may lose their job as their employer seeks to reduce labor costs by outsourcing work formerly performed by its own employees.

Changes in technology have raised the level and type of skill requirements for many workers. While most competing firms have access to the same technology, the ability to apply that technology using the skills and brainpower of their employees ultimately determines whether any real competitive advantage is achieved. Technology improve- ments have created a greater demand for more highly skilled workers who are able to assume multiple responsibilities, while reducing the demand for strictly manual labor. Although, both profits and productivity growth have improved, average real hourly com- pensation for American workers has not changed significantly over the last 20 years, cre- ating increasing stress on workers seeking to maintain a middle class standard of living.22

Technological change can also result in certain jobs requiring fewer skills to perform. In the supermarket industry, electronic scanners are used to change item prices, record customers purchases, and maintain product inventory counts. Radio Frequency Identifica- tion (RFID) chips combined with smart shelf systems can send electronic signals to notify personnel when store shelves are depleted. These activities result in reduced skill requirements and compensation for cashiers as well as a need for fewer employees. Inter- estingly, self-service checkout stations in grocery stores, which allow one cashier to do the work of up to six, have met with some consumer resistance; many customers simply prefer to have their groceries scanned and bagged by grocery store employees.23

The pace and scheduling of the workday also affect the work rules of certain occupa- tions. For example, bus companies optimizing their productivity and revenue would concen- trate on rush-hour traffic (6:00 9:00 A.M., 3:00 7:00 P.M.) when buses are likely to be filled with passengers. However, problems would remain in scheduling work because many bus drivers might have a daily eight-hour work schedule of three hours on, three hours off, one hour on, two hours off, and four hours on. Because of the nature of the work, most labor agreements in related industries have provisions pertaining to the permissible number, length, and possible compensation of intervals (times off) between daily work assignments.

18 PART 1 Recognizing Rights and Responsibilities of Unions and Management

Computer operations can help both union and management officials in their daily labor relations activities. Union officers can use computer applications to maintain mem- bership and dues records, as well as word processing for communication to the member- ship. Union and management officials can also use computer applications in the areas of contract negotiations (costing the various proposals, writing contract language) and administration (maintenance and research of grievances and arbitration decisions).24

Union officers also use computer applications for communicating with the union s cur- rent and prospective members. E-mail, Internet, weblogs ( blogs ), and social networking Web sites are used to keep union members and the public informed of progress during negotiations. Also, both union and management spokespersons frequently use these commu- nication tools during union-organizing campaigns. (See Chapter 4, which discusses how unions use computer technology.) For example, the United Food and Commercial Workers (UFCW) Local 21 in Washington state has used its own Web site (http://www.ufcw21.org/) and a Facebook page (https://www.facebook.com/2013GroceryBargainingUFCW21) to bring attention to its complaints about nonunion grocers, including Wal-Mart.

One survey of U.S., U.K., Irish, Australian, and New Zealand labor unions finds that 97 percent have a Web site, 78 percent have an e-mail newsletter, and about one-half use Facebook. Less than 10 percent of union leaders use UnionBook, a social media site for union organizations (http://www.unionbook.org/); 13 percent post YouTube videos. The AFL-CIO has an extensive Web site (http://www.aflcio.org/) which enables workers, union members, and students of labor and employment relations to become informed regarding current developments.25 Students needing to research current labor relations topics for a class assignment may find the Labor Relations in Action box in this chapter helpful.

International Forces As participants in the global economy, both labor and management must continuously monitor international developments and trends to determine how their respective inter- ests may be affected and how best to respond. Many U.S. firms are dependent on foreign sales or production to generate profits. The international financial crisis in recent years has affected U.S. and foreign currency values as well as the availability and costs of nec- essary operating capital. Economic cycles have differing effects: a weak U.S. dollar value may make U.S.-produced goods and services cheaper to export but drive up the cost of imported goods and services. A strong U.S. dollar has opposite consequences in that U.S.-produced goods are more expensive overseas and imported goods become cheaper. After several years of decline, the dollar had begun strengthening; at the end of 2014, the U.S. dollar was again considered strong against other currencies. Finally, a recession in other countries may reduce the demand for U.S. goods and services in those countries, thus adversely affecting employment levels at U.S. exporting firms.26

The wars in Iraq and Afghanistan have affected thousands of Americans, including union members called up as reservists. Although companies are required to retain the reservists positions, some companies may be reluctant to hire and train new employees who may have to be laid off upon return of the reservists. Instead, companies may require other employees to work more overtime or temporarily reclassify employees (through pro- motions or transfers) to fill the positions left vacant by the call-up of the reservists.

Unions are concerned about the job security and economic impact of free trade agreements such as the North American Free-Trade Agreement (NAFTA; discussed more in Chapters 2 and 14) involving the United States, Canada, and Mexico. While imports from Mexico have clearly increased the U.S. trade deficit with Mexico since the enactment of NAFTA, the effect of NAFTA on U.S. employment and wages tends to be less clear.27 Unions tend to stress fair trade rather than free trade in discussing ways

CHAPTER 1 Union Management Relationships in Perspective 19

to ensure that domestic companies can compete effectively in global markets. In addition to fostering more cooperation with foreign-based labor organizations, U.S. unions also seek to promote policies aimed at raising pay, working conditions, and environmental and safety standards applicable to workers in foreign countries.28 Not only does such an approach serve to raise the living standards of workers in their own countries, it also serves to reduce the labor cost advantage of moving work done by U.S. workers to those foreign countries, thus enhancing job security for U.S. workers.

International trade is a major influence in the labor relations process. Imports and exports, trade deficits, exchange rates, capital investments, and jobs are interconnected. As an example, the U.S. trade deficit with China increased from $6 million in 1985 to $318 billion in 2013.29 Using trade surplus funds to purchase U.S. Treasury notes, China has become the U.S. government s largest foreign creditor.30 Some economists believe that China s currency is undervalued by 25 to 40 percent.31 Coupled with a low-wage work- force, this provides China with a competitive advantage in trade with the United States.

Major retailers, such as Target, Best Buy, and Wal-Mart, depend on low-priced imports from China. These imports help to keep inflation rates low and have helped the Federal Reserve to keep interest rates in the United States at their lowest levels in four dec- ades.32 A strong U.S. dollar has made imports appear cheap and has contributed to the growing U.S. current account deficit (mainly comprising the trade deficit but including capital income and transfers). With large and persistent external deficits, the United States has swung from being the world s largest creditor nation to its largest debtor, with net for- eign liabilities now at about one-fourth of GDP (gross domestic product). 33

The trend toward globalization has been characterized as free-market capitalism, which places enormous competitive pressures on all firms that become part of the global economy. Multinational firms that sell globally are pressured to produce globally by seg- menting their production chains and outsourcing each segment to the country that can produce cheapest and most efficiently. Newly industrialized countries are able to com- pete in price-conscious markets by paying lower wages, offering fewer benefits, and pro- viding less ideal working conditions than those available in the United States. In addition, due to the diversity and customization made possible by computer-based tech- nology, the cost advantages of American-style mass production have been reduced.34

Labor unions have been active in the international arena since their beginning. American labor unions have a long history of resisting the importation of foreign pro- ducts. Over the last two centuries, organized labor has been one of the more protection- ist institutions in America. This position should not be a surprise because unions are democratic organizations that must reflect the interests and needs of their members, many of whom believe that their jobs are endangered by foreign imports. Most union members have little inclination to accept assurances that they will find another compara- ble job or that, in the long run, everyone will be better off. Organized labor unsuccess- fully opposed trade legislation such as NAFTA and has consistently encouraged Congress to ensure that trade agreements with other countries contain safeguards for workers rights and environmental protections applicable to foreign trading partners. North American unions continue to support positions of the International Labor Orga- nization (ILO), a United Nations-sponsored labor federation headquartered in Geneva, Switzerland, which has adopted core labor standards promoting basic workers rights such as freedom of association, collective bargaining, the right to earn a living wage in a safe workplace, and the prevention of forced child labor.35 Organized labor continues to press the World Trade Organization and the International Monetary Fund to forge links between international trading rights and labor standards.36

20 PART 1 Recognizing Rights and Responsibilities of Unions and Management

LABOR RELATIONS IN ACTION Getting Online with Labor Relations Research

The number of electronic sources for locating informa- tion on collective bargaining and labor relations is con- stantly increasing. The most efficient method for finding reports in journals, magazines, newspapers, and other periodical literature is through the use of online research databases, which are offered by most university and college libraries to their students, faculty, and staff members. You will choose your sources depending on the time period you want to cover, the amount of infor- mation you need, and the availability of resources in your area. Libraries still maintain a collection of print indexes, but most of these are being replaced by online versions, which allow for faster searching and less maintenance by the library.

Online databases have several advantages over print indexes, including currency, the ability to print in a variety of formats, the ability to combine terms and other ways to limit (e.g., date, language, and publication title) to broaden or narrow a search, generate biblio- graphic citations by style, and the ability to e-mail or download articles. Online databases that can be searched from college libraries can also usually be searched from a dorm room, home, or office with appro- priate user authentication. A few disadvantages are the commitment of time to become skilled in their use, the availability of only selected content in some databases, and overlapping titles from database to database.

Subscriptions to online databases that provide access to indexing or the full text of articles on business topics are sold by a number of vendors, including Lex- isNexis, ProQuest (formerly University Microfilms or UMI), OCLC (FirstSearch), Gale (part of Cengage Learn- ing), and EBSCO. Databases specifically devoted to labor relations cases and issues are provided by the Bureau of National Affairs (BNA) and Commerce Clear- ing House (CCH). Most of these databases are provided through the Internet, although there are a few that are available electronically only on CD-ROM.

General business indexes are extremely useful in locating articles on labor relations. Business Periodicals Index, originally published by the H.W. Wilson Com- pany, is a print index that is still found in most libraries and, for many years, was the only business index likely to be found in a small library. The online version of the current index is Wilson Business Abstracts with Full Text; earlier years are accessible via a separate data- base: Business Periodicals Index Retrospective: 1913 1982. Wilson merged with database provider EBSCO in 2011.

Other general business periodical databases that are useful for finding trade publications are ABI/ INFORM Trade & Industry (ProQuest), Business & Industry (Gale Cengage Learning) and the Business News portion of LexisNexis Academic. Both Lexis- Nexis and its competitor, WestLaw Next (Thompson Reuters) publish law-related information and court case summaries. Trade journals such as Automotive News, Supermarket News, Editor & Publisher, and Modern Healthcare can provide related insights into labor issues and unions such as the United Autowor- kers (UAW), UFCW, Newspaper Guild, and American Nurses Association, respectively.

ABI/INFORM Global, produced by ProQuest, was one of the first electronic databases to provide an index to both scholarly journals and practitioner maga- zines pertaining to business. EBSCO Business Source Complete is another comprehensive business periodical database that offers 2,300 journals and general busi- ness periodicals including Business Week, Forbes, For- tune, American Banker, and many others. EBSCO has exclusive rights to the electronic version of Harvard Business Review. Both ABI/INFORM and EBSCO data- bases feature several academic journals in the field of labor and employment relations. Leading academic jour- nals include Industrial Relations, Industrial & Labor Rela- tions Review (ILR Review), Journal of Labor Economics, British Journal of Industrial Relations, Labor Law Jour- nal, Employee Relations, Labor History, Journal of Col- lective Negotiations, and Journal of Labor Research.

Newspapers are an excellent source of business information because of the detailed analysis of events not often found in other periodical literature. Because newspapers are often published daily, they offer the latest news about ongoing labor negotiations or work stoppages. Citations to articles in leading newspapers may be found in print indexes, whereas a rapidly increasing number of electronic indexes provide the complete text and indexing of national and regional newspapers. Many major newspapers maintain online Web sites that offer free access to some stories (e.g., the Washington Post, USA Today, Detroit Free Press, and Los Angeles Times). The text of the Wall Street Journal is offered by several sources, such as Lexis- Nexis Academic and ABI/INFORM Complete.

LexisNexis Academic and Regional Business News (EBSCO) are reliable sources to consult for arti- cles from regional newspapers about a particular event published in the city or region where the event took

21

Public Opinion Public opinion is a factor that also affects the labor relations process. The mass media (television, radio, newspapers, movies, music) represent an important influence within a community, serving as both a generator and conduit of community opinion. Media sources often tend to perpetuate a negative stereotype of unions. When put together, the collective media image portrays unions as greedy and corrupt institutions, eager to strike, protective of unproductive workers, heedless of America s need to compete inter- nationally, and generally outmoded in a society that would have no disruptive class antagonisms were it not for a few self-aggrandizing union hot-heads. 37 The media are profit-making businesses, and at least one prominent union official contends that this orientation biases the reporting of labor relations activities:

The media tend to cover collective bargaining as if it were a pier six brawl. The intri- cate moves and trade-offs that really make up bargaining aren t as newsy as impas- sioned rhetoric or a picket line confrontation. Reporters are given little training in covering collective bargaining. They are told to look for the news the fist fight, the walkout, the heated exchange and, as a result, frequently miss the story, which is the settlement. Every union proposal is a demand, every management proposal is an offer. 38

An analysis of 40 years of New York Times columns concerning labor unions agreed with the preceding quotation, as it found that the newspaper had increasingly concen- trated on strike activities and had exaggerated the frequency of strikes.39 Media coverage of labor issues often treats the subject matter as a consumer issue, focusing on how con- sumer prices or the availability of goods or services may be affected rather than focusing on the concerns of the workers affected by the labor issue.40

From the 1930s through the mid-1970s, the percentage of Americans who approve of unions was 60 percent or higher. Between the mid-1970s and 2008, approval has

place. Regional publications often offer a different per- spective from that of a national newspaper.

The Daily Labor Report, published by BNA in both print and online versions, is extremely useful in research- ing current labor relations topics. Coverage includes leg- islation pending in Congress, discussion of court cases, bargaining settlements, statistical information, and other items relating to labor. BNA also publishes the Labor and Employment Law Resource Center online, providing the full text of labor and employment cases, sample contract clauses, and manuals for answering day-to-day labor and employment law questions.

Government sources and libraries can also prove valuable. NLRB cases and policies can be searched directly from the agency s Web site. FLRA.gov has descriptions of cases involving federal employees who are covered under the Federal Labor Relations Act. Sev- eral states have searchable databases for state public- sector grievance cases; for example, Wisconsin cases

can be found at the Wisconsin Employment Relations Commission Web site. Archived full-text collective bar- gaining agreements can be downloaded at the Institute for Research on Labor and Employment at the Uni- versity of California Berkeley (http://www.irle.berkeley. edu/library/CBA.html). A similar database of collective bargaining agreements is found at the Digital Com- mons of the Industrial & Labor Relations School at Cornell University. The Digital Commons also contains reports from groups such as the Fair Labor Association, an anti-sweatshop group, which monitors production facilities to assess their compliance with the organiza- tion s labor standards.

Exploring the Web Internet exercises at the end of each chapter in this book will give you a chance to use some of these resources. They can be helpful in exploring different labor relations topics further to enhance your understanding of labor and employment relations.

22

hovered between 55 and 65 percent. Public approval of labor unions declined at the start of the recent economic recession to an all-time low of 48 percent in August 2009, down from 59 percent one year prior; however, it has since climbed steadily to 54 percent in 2013.41 These results vary by political party affiliation with a majority of Democrats (75 percent) approving of unions in 2013 compared to 51 percent of Independents and 34 percent of Republicans. Approximately two-thirds of Americans believe that unions are helpful to their members, but less than 50 percent believe unions are helpful to the companies where workers are organized and to the U.S. economy in general. About one- third of those surveyed in 2013 desired to see unions exert the same or more influence in the United States in the future compared to today; 25 percent said that unions should have the same amount of influence and 39 percent said that they should have less influence.

Public opinion of institutions in general is low in the United States, with more than one-third of the public currently expressing confidence in only 5 out of 17 surveyed American institutions: the military (74 percent), small business (62 percent), the police (53 percent), the church or organized religion (45 percent) and the medical system (34 percent). Only 22 percent of the public expressed a lot of confidence in organized labor about the same as big business (21 percent). Confidence in unions did rank ahead of the public s opinion of Congress (7 percent), television news (18 percent), and news on the Internet (19 percent).42 In a separate 2009 Harris Poll, adults surveyed believed that a number of groups exerted too much power and influence over govern- ment in Washington, D.C., including big companies and political action committees (85 percent each), news media (75 percent), entertainment and sports celebrities (70 percent), and labor unions (54 percent).43

Public opinion, like other external influences, can affect one or more phases of the labor relations process, as well as the content of negotiated work rules. After experienc- ing a bitter, well-publicized strike between Caterpillar and the UAW, the mayor of Peoria, Illinois feared employers would not locate in his community: We had worked so hard to make this a city with the image of having a cohesive relationship between labor and management, a place [in which] people should think about expanding their businesses or opening new ones. Now comes this strike, which is going to damage our reputation. In some cases, a community may stress its low union membership level or the anti-union attitudes of citizens as a benefit to encourage business organizations to expand or relocate there. For example, commenting on UAW efforts to organize a Volkswagen plant in Chattanooga (see Chapter 5 for details), Tennessee Senator Bob Corker explained why he spoke against unionization, It was critical that workers knew the potential long-term economic consequences of this decision on the state. If the UAW came into our community, attracting suppliers and other prospective companies would be far more difficult . On Feb. 14, [2014] the workers made their voices heard, with 53% voting against allowing the UAW to represent them. I believe that the workers understood that they were nothing more than dollar signs for the UAW. 44

Union officials are aware of the significant influence that public opinion can have on the labor relations process. Albert Shanker, former president of the American Federation of Teachers, indicated why he wrote the first of 1,000 columns entitled Where We Stand. After strikes were conducted by his union, Shanker reflected,

I became one of the best-known figures in New York City, but people saw me only as a militant union leader urging teachers to strike, refusing to settle, going to jail. In late 1968, I became convinced that I had been dead wrong in believing that the pub- lic s opinion of me didn t matter. Public schools depend on public support. And the public was not likely to support the schools for long if they thought teachers were led

CHAPTER 1 Union Management Relationships in Perspective 23

by a powerful madman . I decided to devote some time and energy to letting the public know that the union s president was someone who read books and had ideals and ideas about how to fix the schools.45

Union officials seek to enhance public opinion in three general ways: (1) monitoring and reacting to negative comments made in the media, (2) getting organized labor s pos- itive message out to the community, and (3) forming alliances with various groups in the community. For example, the AFL-CIO supported a march sponsored by the Rainbow PUSH Coalition in New Orleans, Louisiana, to encourage faster government action to rebuild homes and communities devastated by Hurricanes Katrina and Rita.46 The AFL-CIO has created its own Gulf Coast Revitalization Program, committing $1 billion dollars over seven years to fund housing and economic development initiatives. Another example is the BlueGreen Alliance, which is a national strategic partnership between environmental groups (e.g., Sierra Club) and labor unions (e.g., SEIU, United Steel- workers, CWA, and the American Federation of Teachers).47 The Alliance s goal is to expand the number and quality of jobs in the green economy. Organized labor con- tinues to work with community-based religious, civil rights, and environmental groups on issues of shared interests, such as improving health care access and affordability, immigration reform, and ensuring economic and social justice on the job and within the communities in which workers live.48

Unions have also become more sophisticated in creating their own media campaigns to support union membership and bargaining activities. Some efforts such as WakeUpWalMart.com or WalMartWatch.com target a specific company, while others target a specific issue, such as the Health Care Hustle Web site sponsored by Working America, an affiliate of the AFL-CIO representing 1.5 million employees who currently are not members of an organized bargaining unit.49 Some form alliances with indepen- dent Worker Centers. For information about such alliances, see the appropriate Labor Relations in Action box.

In some cases, organized labor has cultivated alliances with business organizations. A coalition including Wal-Mart, AT&T Inc., Intel Corporation, the SEIU, and the CWA worked to encourage public policy changes that would provide affordable health care coverage to all Americans.50 Other examples include the Public Works Alliance, which involves labor unions and contractors cooperating to obtain federal funds for road and bridge improvements in the Long Island, New York, area and a labor management alliance in Rhode Island seeking to save the funding of a valued job train- ing program.51

Union Membership

Union membership in the United States has shown a steady, gradual decline as a propor- tion of the total labor force (i.e., all employed persons 16 years of age or older). In 2014, union membership was 14.6 million, or 11.1 percent of the 131 million wage and salary employees in the total U.S. labor force.52 In 1945, union membership was about 36 per- cent of the total labor force. One partial explanation of this trend is that while the num- ber of union members has declined slowly (e.g., from 16.1 million in 2002 to 14.6 million in 2014), the number of people in the workforce has risen (e.g., from 122 million in 2002 to 131 million in 2014). Thus, even if union membership had held constant, it would comprise a smaller percentage of an expanding workforce. Union density, the propor- tion of a total group (e.g., national labor force, industry, or geographic region) comprised of union members, is one measure of relative union strength or potential influence.

24 PART 1 Recognizing Rights and Responsibilities of Unions and Management

LABOR RELATIONS IN ACTION Unions and Worker Centers

During the past decade, over 200 Worker Centers have formed. These nonprofit organizations provide ser- vices for groups of workers in their communities or in specific types of low-paying jobs. For example, there are Worker Centers for taxi drivers, day laborers, undocu- mented workers, farm workers, and fast-food employ- ees. They are funded through charitable donations and grants, often obtaining financial support from religious, political, environmental, and civil rights groups.a Worker Centers typically educate low-income and immigrant workers about their legal rights and about social ser- vices; some also advocate that workers join labor unions. Thus, Worker Centers represent a hybrid between social work organizations, political action/advo- cacy groups, and union recruiting centers. As one Worker Center described its activities,

If, for example, we discover that the most common problem in the restaurant sector is employer fail- ure to pay extra for overtime work, we may suggest to the [Worker Center] Board that we make that failure the focal point of a [publicity] campaign. (p. 112) b

Many individual unions support Worker Centers financially, and through joint cooperative actions. In 2006 and again in 2013, the AFL-CIO endorsed the idea of cooperating with Worker Centers. This alliance has produced some notable successes. For example, since the 1980s, many New York taxi firms have reclas- sified their drivers from employees to independent contractors ; this change means that the drivers are unable to join a union. Instead, many of the taxi drivers have formed the New York City Taxi Workers Alliance (NYTWA), a type of Worker Center. In 2006, the group partnered with the AFL-CIO and began securing improved working conditions from individual firms. In 2012, the NYTWA negotiated a fare increase from the New York Taxi and Limousine Commission, with the increase designated for a new type of benefit: health coverage.c

Because Worker Centers do not negotiate labor contracts with businesses or have ongoing relationships with specific employers, legally, they are not labor unions. Therefore, they are free to use tactics that tradi- tional unions cannot use, such as a secondary boy- cott where the group attempts to convince the public to boycott one firm s goods in order to persuade that firm to either not do business with a second company or pressure the second company to change its labor pol- icies. Thus, Worker Centers are not subject to the reg- ulations of the Labor Management Relations Act.d

Neither are they required to abide by the Labor Management Reporting and Disclosure Act (LMRDA; also called the Landrum-Griffin Act); this means that they do not have to disclose financial information to the same degree as labor unions.e They do not even have to garner the support of a majority of workers in a firm. If the leaders of a Worker Center believe that there are, say, safety problems at a particular employer, they can immediately take action.

What sorts of actions do Worker Centers do? A few tactics are common:

(1) Publicizing problems in the media. Protests for higher wages for fast food workers in the summer of 2014 were largely organized by Worker Centers in major U.S. cities.

(2) Boycotts and picketing. Besides drawing the pub- lic s attention to issues of concern, these efforts can hurt a company financially. For example, a four-year boycott of Taco Bell in Florida by the Coa- lition of Immokalee Workers led to Taco Bell restau- rants agreeing to pay more for tomatoes, with the increase going into farm workers pay.

(3) Lobbying for government action. This has resulted in increases in the minimum wage in some cities as well as California and Washington State.

(4) Class-action lawsuits. Lawsuits filed on behalf of employees can sometimes result in out-of-court voluntary settlements that improve wages or work- ing conditions and sometimes these settlements include employer donations to the Worker Center.

(5) Union organizing. Sometimes Worker Centers help organizers get jobs within a nonunion firm with the primary goal of forming a union a tactic that is called salting.

Employers see this set of tactics as a form of harassment, led by outside groups who are not accountable to anyone. A union is accountable to its members who are employees of the company; if a majority of the members want the union to pursue a course of action, then they can encourage its leaders to do so. However, because Worker Centers are not unions, they do not need to have the support of a majority of the employees. Critics complain that the lack of legal regulation, accountability, and officially sanctioned union bargaining rights for Worker Centers means that employers cannot negotiate a compromise settlement. Many employers complain that their profit margins are too thin to afford some of the demands these groups make yet they can t afford to hire

25

One estimate predicts that unions would need to organize 1 million new members annually to increase the union density level in the total labor force by 1 percent.53

Exhibit 1.4 shows union membership data trends since 1975.

Exhibit 1.4 Union Membership Trends, 1975 2014 (in thousands)

Year Total Employment

Union Members

Percentage Union Members

Percentage Represented for Bargaining

1975 75,703.9 16,778 22.2

1980 87,479.5 20,095 23.0 25.7

1985 94,520.5 16,996 18.0 20.5

1990 103,904 16,740 16.1 18.3

1995 110,038.1 16,359 14.9 16.7

2000 110,038.1 16,258 14.9 14.9

2005 125,889.3 15,685 12.5 13.7

2010 124,073 14,715 11.9 13.1

2013 129,110 14,528 11.3 12.4

2014 131,431 14,576 11.1 12.3

Data set is based upon information in the Current Population Survey (CPS) compiled by the Bureau of Labor Statistics, U.S. Department of Labor.

SOURCES: U.S. Department of Labor, Union Members in 2010, News Release, January 21, 2011; U.S. Department of Labor, Union Members in 2013, News Release, January 24, 2014; Barry Hirsch and David Macpherson, Union Membership, Coverage,

Density, and Employment among All Wage and Salary Workers, 1973 2006, Unionstats.com, 2007, p. 1 at http://www.trinity. edu/bhirsch/unionstats/.

attorneys, lobbyists, and advertising agencies to fight these tactics either. Consequently, some owners, managers, and critics (like Worker Center Watch ) view Worker Center tactics with distain, likening them to extortion.f

Even within the labor movement, the alliance between Worker Centers and traditional unions is often tenuous. Some Worker Centers are dominated by activists who are suspicious of both capitalism and of what they see as overly bureaucratic unions. At others, leaders worry about being co-opted by traditional unions. Unions have criticized Worker Centers for refer- ring the unemployed to low-wage nonunion employers. Consequently, while both types of groups cooperate to improve poor workers wages and working conditions, such cooperation has not yet resulted in substantial membership gains for unions.g

It will be interesting to see how this develops over the upcoming years. Will Worker Centers remain a set

of minor players in the labor movement? Or will they grow and redefine the labor movement in the twenty- first century?

aRobert J. Grossman, Leading from Behind? HR Magazine, 58 (12), Dec., 2013, pp. 37 41. bAlice B. Gates, Integrating Social Services and Social Change: Lessons From an Immigrant Worker Center, Journal of Community Practice, 22(1), 2014, pp. 102 129. cAvendaño, Ana, and Jonathan Hiatt, Worker Self-Organization in the New Economy: The AFL-CIO s Experience in Movement Building with Community-Labour Partnerships, Labour, Capital & Society, 45(1), April, 2012, pp. 66 95. dEli Naduris-Weissman, The Worker Center Movement and Traditional Labor Law: A Contextual Analysis, Berkely Journal of Employment & Labor Law, 30(1), 2009, pp. 232 335. eMax Mihelich, Worker Centers Are Center of Attention, Workforce, 92(11), Nov., 2013, pp. 24 25. fRyan Williams, Worker Center Watch calls on Florida Attorney General to Investigate CIW, Worker Center Watch News, Nov., 2013. Accessed Oct. 28, 2014 at: http:// www.workercenterwatch.com/wcw-calls-on-fl-attorney-general-to-investigate-ciw/. gFine =Janice R. Fine, New Forms to Settle Old Scores: Updating the Worker Center Story in the United States, Relations Industrielles/Industrial Relations, 66(4), Fall, 2011, pp. 604 630.

26

Unions typically represent a higher number of employees than are actually union members because a simple majority of employees must support a union in order for that union to gain the legal right to represent the entire employee group (called a bar- gaining unit ) for purposes of collective bargaining. While no employee can legally be required to become a full active member of any union, if that employee is a member of an employee group whose majority has chosen to be represented by a union, then all members of that group would be covered by the labor agreement negotiated by that union and the employee group s employer. In 2014, 1.6 million employees had jobs cov- ered by a collective bargaining agreement (labor contract) but were not union members themselves.54 Almost half of these individuals were government employees.

In 2014, 7.3 million (6.6 percent) of over 111 million private-sector employees were union members, while 7.4 percent of private-sector employees were represented by a union for purposes of collective bargaining.55 A similar number of union members were employed in the public-sector (7.2 million), but the union density was greater, with union members comprising 35.7 percent of total public-sector employment. Approximately 39.2 percent were represented by a union for purposes of collective bargaining. The higher union representation among public-sector employees varies by level of public employment, with 45.5 percent of local government employees, 32.8 percent of state employees and 31.6 percent of federal employees represented by a union for purposes of collective bargaining. Union membership among these groups is 41.9 percent for local government employees, 29.8 percent for state employees, and 27.5 percent for federal employees. Public-sector labor relations issues and trends will be discussed further in Chapter 13.

The gradual decline or stagnation in union membership has been attributed to three broad factors: (1) structural changes in the labor force, (2) improved management prac- tices in business organizations, and (3) political and legal conditions governing the work- place. Of these three explanations, research suggests that changes in the structure of the labor force may be the most important.56 Since 2008, job losses due to the economic recession resulted in the loss of many union members, particularly in the manufacturing and construction industries.57

Structural Changes in the Economy Employment has shifted from traditionally unionized industries (manufacturing, rail- roads, and mining) to professional and service-related industries (e.g., health care, legal, education, food preparation, personal care and service, building and grounds cleaning and maintenance, and protective services).58 Many of the fastest growing occupations are at opposite ends of the level of education and skills continuum required for effective job performance. The problems of defending a shrinking number of high wage manufacturing jobs are different from organizing the growing ranks of lower-wage ser- vice workers. But what they have in common is the need to confront industry with one union that can bargain hard and solve problems. 59

Most business organizations in the United States are small, with 88 percent of firms having fewer than 20 employees and 98 percent of firms having fewer than 100 employ- ees.60 Union membership has traditionally been concentrated in the 2 percent of firms that account for 43 percent of all jobs in the economy. Efforts to increase union membership in small firms is both time consuming and more expensive for labor organizations.

Demographic trends affecting the size and composition of the labor force can also affect union membership trends. The proportion of the labor force comprised of individuals 55 years and older is expected to increase while the proportion of individuals in the 16 24 and 25 54 age groups is expected to decline.61 Over the period from 1992 to 2014, the proportion of the U.S. labor force comprising men declined from 54.6 percent to 51.7 percent, while

CHAPTER 1 Union Management Relationships in Perspective 27

women s proportion increased from 45.4 percent to 48.2 percent. These percentages are expected to remain virtually unchanged through 2022. The percentage of Whites in the work- force changed little, from 77.1 percent in 1992 to 79.2 percent in 2014; yet, it is expected to drop to 60 percent in 2022. In 2014, Black, Asian, and Hispanic workers comprised 12.0 per- cent, 5.7 percent, and 16.4 percent of the workforce. By 2022, groups of Black, Asian, and Hispanic origin groups will increase their representation in the labor force to an estimated 12.4 percent, 6.2 percent, and 19.1 percent of the labor force respectively. Unions will need to be able to attract and retain new members from these groups of employees to maintain or increase current union density levels in the future.

In 2014, 24.7 million part-time workers comprised about 19 percent of the total labor force.62 Unions represented 13.6 percent of full-time workers but only 6.6 percent of part-time workers for purposes of collective bargaining in 2014. Among these, 12.3 percent of full-time workers and 5.8 percent of part-time workers are union members.63

Research demonstrates that growth in part-time employment has a small, but significant, negative impact on union density, although this negative effect declines as the number of hours of work increases to 20 or more per week.64

LABOR RELATIONS IN ACTION Are Unions Still Relevant?

The answer to the provocative question of whether unions are still relevant in today s economy may depend on who you ask. Andrew Stern, past president of the SEIU believes the need for unions today may be greater than at any time in the past 75 years.

I think American workers want a voice on their job. The question is: Will unions change to become better partners with employers to respond to what is now a global economy where more people went to work in the U.S. in retail than in manufacturing? We want to find a 21st century new model that may look more like a European model, that is less focused on individual grievances, more focused on industry needs. We don t see our employers as enemies. We need to build successful employers [and] as a part of that you need to be involved and have a voice, and every- one needs to share in the success of an employer, not just the share-holders and executives.a

The AFL-CIO shares the belief that unions are just as important today as ever and views one important union role as safeguarding workers past gains while seeking a fair share of future prosperity.

Through unions, workers win better wages, bene- fits, and a voice on the job and good union jobs mean stronger communities. Unions have made life better for all working Americans by helping to pass laws ending child labor, establishing the eight-hour day, protecting workers safety and health and helping to create Social Security, unemployment insurance and the minimum wage, for example. Unions are continuing the fight today to improve life for all working families in

America.b A survey of Canadian employees reported the top three advantages of unions were that they made health and safety, job security, and benefits a lot better on the job.c While agreeing that it was important for workers to have a voice on the job, more Canadians preferred an employee association form of representa- tion that would take up problems on behalf of workers with management than the traditional Canadian union model.

Employers, particularly those who currently are non- union, are more likely to argue that unions today are no longer necessary. the protections unions used to seek, such as from unfair dismissal and dangerous work- places, have with labor s ardent support been taken over by government. d What were once considered sig- nificant employee pension and health care benefit gains under union contracts are now referred to as high legacy costs by unionized employers in industries such as air- lines and autos, making those employers less competi- tive and threatening job security.e

Ultimately, what matters is how employees will answer the question of whether unions are still relevant. The issue of why employees join a union will be explored further in Chapter 5.

aKris Maher, Are Unions Relevant? Wall Street Journal, January 22, 2007, p. R-5. bAFL-CIO, A Quick Study of How Unions Help Workers Win a Voice on the Job, Unions, 101 (accessed August 13, 2010), p. 1 at http://www.aflcio.org/joinaunion/ union101.cfm. cUyen Vu, Employees Want a Collective Voice, but Not Necessarily a Union, Survey Says, Canadian HR Reporter, 16(20), 2003, pp. 3, 11. dRobert J. Grossman, Do Unions Pay? HR Magazine, 50(5), May 2005, p. 49. eMichael Barone, Big Labor, RIP, Wall Street Journal, July 28, 2005, p. A-10.

28

Changing Management Practices Another reason often given for stagnant or declining union membership is that more organizations are learning how to operate their businesses on a nonunion basis. Some- times this entails moving some or all operations to less-unionized geographic areas of the United States (e.g., the Southwest and South). More firms are trying to be proactive in recognizing and addressing employee interests and concerns. Managers are also adopting human resource management practices, including aggressive anti-union cam- paigns (see Chapter 5), to keep their firms nonunion.

Some union officials indicate that employers often use labor law loopholes to fore- stall or negate free employee union choice through secret-ballot elections. For example, using pre-election procedural time delays, contesting election results, lengthy appeals, and delays in union attempts to negotiate a first contract settlement once union recogni- tion is granted are possible under the Labor Management Relations Act (LMRA) (see Chapter 3). One analyst makes a comparison with the political process: Suppose U.S. political elections were legally structured so that access to potential voters was denied to one political party (analogous to the union), while it was granted to the other one for eight hours a day at one s place of work. The second political party (analogous to man- agement) could force the electorate to listen to campaign speeches (captive audience meetings), while the opposing party was denied access.65

Changing Legal Environment Employment law changes that have expanded employees rights Passage of the Ameri- cans with Disabilities Act (ADA), Equal Employment Opportunity Act, Occupational Safety and Health Act (OSHA), Employee Retirement and Income Security Act (ERISA), Lilly Ledbetter Fair Pay Act, and other laws have helped employers to argue that unions are less necessary today. Indeed, many unions appear to be committing more of their resources to serving the needs of their current members than to organizing new members.

There is an ongoing debate within the union movement regarding the proportion of resources that ought to be devoted to organizing new members versus providing enhanced services (e.g., negotiating contracts; researching wage, benefit, and working condition issues; processing contract grievances; monitoring political issues) to currently represented members. Each union s membership must decide if organizing new employees is in their best interests when these efforts would require the use of scarce union organization funds earmarked for present members services. Mary Kay Henry, the president of the SEIU, has made union organizing the organization s primary goal, with the union investing $250 mil- lion annually in organizing activities.66 Because unions are political organizations and union leaders are elected by the current membership, the incentive to organize new mem- bers is often less than the incentive to provide services to current members.67

Although union membership has experienced a gradual decline as a percentage of the total labor force, many labor unions have responded by increasing their union- organizing activities. Unions are attempting to improve the ways in which they relate both to their own members and to employers with whom they have bargaining relation- ships.68 The social significance of unions can also be assessed in general terms by consid- ering what the consequences would be if unions were absent from our society. With no organized voice for workers interests to counterbalance the economic interests of employers to reduce labor costs, will the improvements gained over the previous century continue, or will they be subject to erosion and lax enforcement? Labor unions have his- torically functioned in the United States as a countervailing power necessary to maintain some balance between employer and employee rights and responsibilities.

CHAPTER 1 Union Management Relationships in Perspective 29

Summary Although unique to the particular labor management activities, attitudes, and relationships at each organiza- tion (discussed more in Chapter 4), the labor relations process includes three key phases or steps: recognition of the legitimate rights and responsibilities of union and management representatives, negotiation of a labor agreement, and daily administration of the terms of that negotiated labor agreement.

The labor relations process focuses on jointly nego- tiated and administered work rules that pertain to com- pensation and employees and employers rights and responsibilities. The labor relations process is flexible enough to permit negotiated work rules to vary, thus accommodating the unique characteristics of a particular industry, job classification, geographic setting, or exter- nal environmental conditions. The labor relations pro- cess is dynamic, which enables bargaining relationships to adapt to changing competitive conditions.

Union and management officials represent two key participants in the labor relations process along with employees, government, and certain third-party neu- trals such as mediators and arbitrators who aid in resolving interest and rights-type disputes. Employees are particularly important in the labor relations process

because they determine whether a union will be chosen to represent their employment interests. Employees typically demonstrate some degree of dual loyalty to both their union and employer, which helps to deter- mine the organizational effectiveness of each. However, there may be certain critical times in a bargaining relationship when each employee will have to decide which side they are on.

Participants in the labor relations process are influ- enced by several variables such as technology (equip- ment, pace and scheduling of work, the work environment and tasks to be performed, and informa- tion exchange); labor and product markets; international forces such as trade agreements or armed conflicts; public opinion; and prevailing economic conditions.

The current status of labor unions can be assessed from both statistical and general standpoints. A pro- longed decline in the proportion of the total labor force comprised of unionized employees has occurred in the United States. However, this trend and its related general explanations (employment shifts; business organizational practices; and economic, legal, and political conditions) do not indicate that unions have lost their societal significance.

Key Terms labor relations process, p. 5 interest disputes, p. 6 rights disputes, p. 6 work rules, p. 7 managers, p. 10 management consultants, p. 11 union representatives, p. 11 employees, p. 11

dual loyalty, p. 12 government, p. 12 third-party neutrals, p. 12 mediators, p. 12 arbitrator, p. 13 economy, p. 14 discouraged workers, p. 15 labor market, p. 16

product or service market, p. 16 financial market, p. 17 technology, p. 17 international forces, p. 19 public opinion, p. 22 Worker Centers, p. 24 union density, p. 24 employment-at-will, p. 39

Discussion Questions

1. Exhibit 1.1 illustrates the focal point of the labor relations process and many variables that affect the process. Select an academic discipline such as political science, economics, or sociology, and indicate three specific ways the discipline could add insights into the labor relations process.

2. Think about a job you have performed and dis- cuss some of the external variables (see the outer

circle of Exhibit 1.1) that influenced the work rules required on that job.

3. The text outlines three basic assumptions under- lying the labor relations process in the United States. To what extent do you agree or disagree with these assumptions? Does your response dif- fer depending on whether you think about the question from the perspective of an employer or an employee?

30 PART 1 Recognizing Rights and Responsibilities of Unions and Management

4. Discuss your opinion regarding whether unions are still relevant and necessary in today s work environment. What other means might be used to ensure employee voice in the workplace?

5. Can an individual be both pro-union and pro- employer, or does being pro-union mean one has to be anti-employer? Can an individual be anti- union and still legitimately claim to support pro- employee interests?

Exploring the Web

Labor Relations from Several Points of View

1. Public Opinion Polls Chapter 1 discusses the effect that public opinion may have on the labor relations process. Public opinion polls can provide an indication of the back- ing or support by the public during a strike.

The Gallup Organization s Web site provides abstracts of the results of polls the organization has conducted (a subscription is required to read most of the full reports). The abstracts can provide some insight into the attitudes of the public on labor issues. Go to the Gallup home page and determine how employees are reacting to the recent economic recession.

The Harris Poll provides portions of its reports without charge on the Harris Interactive Web page. Search the site for results of a recent poll on American adults attitudes toward gender equality.

2. Reports from Labor and Management Web Sites Good sources of information on labor relations can be found by searching the Web sites of labor unions and management organizations as well as reports from newspapers and newswires. Go to the Web site of the AFL-CIO and under Get Informed click on Health Care to find out what labor unions are thinking and doing to implement health care reform.

Go to the Web site of the U.S. Chamber of Com- merce and find out what the Chamber is doing to help employers implement health care reform legis- lation recently passed by Congress.

3. Newspapers The Library of Congress provides News & Periodical Resources on the Web, a Web page that provides links to online newspapers and news services. You may know of other free news services that you search on a daily basis. Search online news sources to find articles that discuss labor relations involving aircraft mechanics at American Airlines and/or Southwest Airlines in the Dallas Fort Worth, Texas area. For example, mechanics at Southwest are upset with increasing workloads and difficulty in negotiating a new contract. Some members at American have been unhappy with their current union representative, the Transport Workers Union, and are considering joining a new, indepen- dent union (the Association of Maintenance Profes- sionals). Pick one of these airlines and write about the main issues and current developments. For example, what might be the advantages or disadvan- tages of being represented by a smaller independent union versus a larger national union affiliated with the AFL-CIO (an organization discussed further in Chapter 4) at American Airlines? How do mergers or acquisitions affect labor relations? You may also want to consult union and industry weblogs (e.g., Sky Talk ) as you research your topic.

References 1. See, for example, Lance Compa, Workers Free-

dom of Association in the United States, in Workers Rights and Human Rights, ed. by James A. Gross (Ithaca, NY: Cornell University Press, 2003), pp. 23 52; AFL-CIO, The Silent War: The Assault on Workers Freedom to Choose a Union

and Bargain Collectively in the United States (Washington, D.C.: AFL-CIO, June 2002), pp. 1 24; Kate Bronfenbrenner et al., Introduc- tion in Organizing to Win: New Research on Union Strategies (Ithaca, NY: ILR Press, 1998), pp. 1 8; William N. Cooke, The Failure to

CHAPTER 1 Union Management Relationships in Perspective 31

Negotiate First Contracts: Determinants and Policy Implications, Industrial and Labor Rela- tions Review 38(2), January 1985, pp. 163 178.

2. John Dunlop, Industrial Relations Systems, rev. ed. (Boston: Harvard Business School Press, 1993), pp. 13 16.

3. 2010 Employer Bargaining Objectives, Collec- tive Bargaining Bulletin, 15(5), 2010, p. s23; John D. Boyd, Hours Rule Change Pits Railroads against Unions, Journal of Commerce (July 2, 2009), pp. 1 2; VW Wants 35-Hour Workweek, but Union Says No, Wall Street Journal, June 13, 2006, p. A-11.

4. AFA-CWA Applauds Anticipated FCC Decision to Keep Cell Phones Off Aircraft, News Release, March 22, 2007, p. 1 at http://www.afanet.org (accessed April 29, 2011); Nancy Keates, Rising Concern: Falling Luggage Inside Airplanes, Wall Street Journal, November 10, 1997, pp. B-1 & 10.

5. Service Employees International Union, Health- care Workers in Peril: Preparing To Protect Worker Health and Safety During Pandemic Influenza: A Union Survey Report, April 16, 2009, pp. 1 14 at http://www.seiu.org/Healthcare% 20Workers% 20in%20Peril%20April%202009.pdf; Bureau of National Affairs Inc., Daily Labor Report, September 10, 1992, p. A-12.

6. Sandra M. Tomkowicz and Susan K. Lessack, Where There s Smoke: Employer Policies on

Smoking, Employee Relations Law Journal, 32(3), 2006, pp. 48 65; Mollie H. Bowers, What Labor and Management Need to Know about Workplace Smoking Cases, Labor Law Journal 43(1), January 1992, pp. 40 49; Americans for Effective Law Enforcement, AELE Law Library of Case Summaries: Employment & Labor Law for Public Safety Agencies Smoking Rights/Restrictions & Air Quality. November 4, 2014, at http://www. aele.org/law/Digests/empl205.html

7. Dionne Searcey, Currents Labor Journal: Some Courts Raise Bar on Reading Employee E-mail, Companies Face Tougher Tests to Justify Moni- toring Workers Personal Accounts, Rulings Hinge on Expectation of Privacy , Wall Street Journal, November 19, 2009, p. A17; David Halpern, Patrick J. Reville, and Donald Grunewald, Management and Legal Issues Regarding Electronic Surveillance of Employees in the Workplace, Journal of Business Ethics, 80(2), 2008, pp. 175 180; William H. Ross,

Christopher J. Meyer, Jeng-Chung Victor Chen, and Paul Keaton, The Role of Human Resource Management in Protecting Information at Tele- communications Firms, Journal of Information Privacy and Security, 5(2), 2009, pp. 49 77; Donald E. Sanders, John K. Ross, and Patricia Pattison, Electronic Snoops, Spies, and Supervisory Surveil-

lance in the Workplace, The Southern Law Journal, 23(1), 2013, pp. 1 27; Margaret A. Lucero, Robert E. Allen, and Brian Elzweig, Managing Employee Social Networking: Evolving Views from the National Labor Relations Board, Employee Responsibilities and Rights Journal, 25(3), 2013, pp. 143 158.

8. The System for Forming Unions Is Broken, AFL-CIO, 2007, p. 1 at http://www.aflcio.org/ joinaunion/voiceatwork/brokensystem.cfm joinaunion/voiceatwork/brokensystem.cfm; Kris Maher, Unions New Foe: Consultants, Wall Street Journal, August 15, 2005, p. B1.

9. Kate Bronfenbrenner, Raw Power: Plant Closing Threats and the Threat to Union Organizing, Multinational Monitor, December 2000, p. 28.

10. John J. Lawler, The Influence of Management Consultants on the Outcome of Union Certifica- tion Elections, Industrial and Labor Relations Review, 38(1), 1984, pp. 38 51; Bruce E. Kaufman and Paula E. Stephan, The Role of Management Attorneys in Union Organizing Campaigns, Journal of Labor Research, 16(4), 1995, pp. 439 455; Bureau of National Affairs Inc., Special Report, Labor Relations Consultants: Issues, Trends, and Controversies (Washington, D.C.: Bureau of National Affairs Inc., 1985).

11. William A. Ward, Manufacturing Jobs, 2005 2010, Economic Development Journal, 5(1), 2006, pp. 7 15; Louis Uchitelle, A Missing Statistic: U.S. Jobs That Have Moved Overseas, New York Times, October 3, 2003, p. 21. For a more thorough discussion, see Erica L. Groshen and Simon Porter, Has Structural Change Contributed to a Jobless Recovery? Report of the Federal Reserve Bank of New York, 9(8), 2003, pp. 1 7 at http://www.ny.frb.org/research.

12. Therese Jefferson and Alison Preston, Negotiat- ing Fair Pay and Conditions: Low Paid Women s Experience and Perceptions of Labour Market Deregulation and Individual Wage Bargaining, Industrial Relations Journal, 41(4), 2010, pp. 351 366; Kevin E. Henrickson and Wesley

32 PART 1 Recognizing Rights and Responsibilities of Unions and Management

W. Wilson, Compensation, Unionization, and Deregulation in the Motor Carrier Industry, Journal of Law and Economics, 51(1), 2008, pp. 153 177; John Nevile and Peter Kriesler, Minimum Wages, Unions, the Economy and

Society, Economic and Labour Relations Review, 19(1), 2008, pp. 25 38; Pierre-Yves Cremieux, The Effects of Deregulation on Employee Earn-

ings: Pilots, Flight Attendants, and Mechanics, 1959 1992, Industrial and Labor Relations Review, 49(2), 1996, pp. 223 242.

13. Denise Rousseau, I-deals: Idiosyncratic Deals Employees Bargain for Themselves. (Armonk, NY: M. E. Sharpe, 2005); Steven L. Blader, What Leads Organizational Members to Collectivize? Injustice and Identification as Precursors of Union Certification, Organization Science, 18(1), 2007, pp. 108 126.

14. Interest Rates: How Soon and How Far will they Climb? ABA Banking Journal, 102(5), 2010, p. 38; Jon Hilsenrath, Fed Sees Slower Growth, Officials Debate How to Respond if Recovery Falters, Softer 2nd Half Is Seen, Wall Street Journal, July 14, 2010, p. A-1; Barbara Hagen- baugh, Fed Holds Rates Steady Again, USA Today, May 9, 2007, pp. 1 2 at http://www.usa today.com/money/2007-05-09-fed_N.htm.

15. Stephen F. Hipple, The Labor Market in 2009: Recession Drags On, Monthly Labor Review, 133(3), 2010, pp. 3 22; Ian D. Wyatt and Kathryn J. Byun, The U.S. Economy to 2018: From Recession to Recovery, Monthly Labor Review, 132(11), 2009, pp. 11 15; U.S. Department of Labor, The Employment Situation: October, 2009, News Release, November 6, 2009, pp. 1 29 at http://www.bls.gov/news.release/archives/emp- sit_11062009.pdf; U.S. Department of Labor, The Employment Situation: September, 2014,

News Release, October 3, 2014, pp. 1 38 at http:// www.bls.gov/news.release/pdf/empsit.pdf.

16. Catherine Rampell, With Positions to Fill, Employers Wait for Perfection, New York Times [online edition], March 6, 2013 at http://www. nytimes.com/2013/03/07/business/economy/ despite-job-vacancies-employers-shy-away-from- hiring.html?pagewanted=all&_r=0; Gregory W. Brown and Christian Landblad, The U.S. Economic Crisis: Root Causes and the Road to Recovery, Journal of Accountancy, 208(4), 2009, pp. 42 49.

17. The Alliance for Employee Growth and Devel- opment, Inc., About Us, August 5, 2010, pp. 1 2 at http://www.employeegrowth.com/ about_us.htm.

18. Workforce and Economic Development Program of the California Labor Federation, Working Together: Sectoral Lessons from Labor- Management Training Partnerships in Califor- nia, (Berkley, CA: Univ. of California Berkley Labor Center, 2007), pp. 11 16 at http://www. calaborfed.org/userfiles/doc/2011/Working TogetherHighRoadReport112111.pdf; Hoyt N. Wheeler, The Future of the American Labor Movement (Cambridge, U.K.: Cambridge University Press, 2002), pp. 80 81.

19. Laurie Harbour-Felax, Challenges for Industry Decision Makers, Automotive Design & Produc- tion, 120(2), 2008, p. 12; Kathy Jackson, UAW Fights GM Plan to Hire Suppliers to Prepare Parts, Automotive News, June 2, 1997, p. 1; James R. Healey, Tangled Web of Rules Obscures Autos Origins, USA Today, March 2, 1992, pp. B-1, 3.

20. Barry B. Burr, UAW s $45 Billion Vehicle Steers Towards a New Asset Allocation, Pensions & Investments, 38(5), 2010, pp. 2 4; Pensions at Work: Socially Responsible Investment of Union- Based Pension Funds, ed. by Jack Quarter, Isla Carmichael, and Sherida Ryan (Toronto: Univer- sity of Toronto Press, 2008); Jill Andresky Fraser, Capital: State of the Union, Inc. Magazine, July

2002, pp. 1 2 at http://www.heartlandnetwork. org/pressarticles/article9.htm; Emma Blackwell, Asset Managers Launch Labor-Friendly Private

Equity Vehicles, Corporate Financing Week, April 24, 2006, p. 1; Working Capital: The Power of Labor s Pensions, ed. by Archon Fung, Tessa Hebb, and Joel Rogers (Ithaca, NY: Cornell University Press, 2001).

21. Thomas Croft, Up from Wall Street: The Respon- sible Investment Alternative (New York: Cosimo Books, 2009); Wheeler, The Future of the Ameri- can Labor Movement, pp. 176 177; The Heart- land Labor Capital Network, at http://www. heartlandnetwork.org/ (accessed April 29, 2011).

22. Rebecca Keller, How Shifting Occupational Composition Has Affected the Real Average Wage, Monthly Labor Review, 132(6), 2009, pp. 26 38; David Wessel, Politics and Econom- ics, Capital: Fishing Out Facts on the Wealth

CHAPTER 1 Union Management Relationships in Perspective 33

Gap, Wall Street Journal, February 15, 2007, p. A-10; David Wessel, Fed Chief Warns of Widening Inequality, Wall Street Journal, February 7, 2007, p. A-6; Wheeler, The Future of the American Labor Movement, pp. 25 27.

23. Attaran, M. Keeping the promise of efficiency, Industrial Engineer, 41(3), 2009 (March), pp. 45 50. Ming-Hui Huang and Roland T. Rust, Should Your Business Be Less Productive? MIT

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24. Christopher M. Lowery, Nicholas A. Beadles II, and Larry H. Faulk II, Assessing the Usability of Union Web Sites, Communications of the IIMA, 8(3), 2008, pp. 49 56; Neil De Clereq, Alec Meiklejohn, and Ken Mericle, The Use of Microcomputers in Local Union Administration, Labor Studies Journal, 10(1), Spring 1985, pp. 3 45.

25. Jessica Miller-Merrell Research Reveals how Labor Unions Use Social Media Blogging4Jobs, [online weblog], Feb. 22, 2012, at http://www. blogging4jobs.com/social-media/labor-union- social-media/; Cynthia G. Wagner, Cyberunions: Organized Labor Goes Online, Futurist, 34(1), 2000, p. 7; Alex Bryson, Rafael Gomez, and Paul Willman, Online Social Networking and Trade Union Membership: What the Facebook Phe- nomenon Truly Means for Labor Organizers, Labor History, 51(1), 2010, pp. 41 53.

26. Charles Forelle, Nick Skrekas, and Bob Davis, Greece Gets Aid, Promises Austerity, Wall

Street Journal (Online), May 1, 2010, pp. 1 2 at http://proquest.umi.com/pdqweb? did=2023352491&sid=3&Fmt=3&client id=1997&RQT=309&VName=PQD; V. K Bhalla, Global Financial Turmoil: Containment and

Resolution, Journal of Management Research, 9(1), 2009, pp. 43 58; Andrew Dollard, The Dollar s Decline Offers Advantages Over Foreign Rivals, Rochester Business Journal, 24(19), 2008, p. 25; Paul R. LaMonica, The U.S. Dollar is Super Strong Now, CNN Money, Sept. 2, 2014, at http://money.cnn.com/2014/09/02/investing/ strong-us-dollar-euro-weak-ecb/

27. Ki Hee Kim and William Paterson, Is Free Trade Good for Working Americans: Lessons from North American Free Trade Agreement, Business Review, Cambridge, 15(1), 2010, pp. 33 38; Mihal

Nica, Ziad Swaidan, and Michael M. Grayson, The Impact of NAFTA on Mexican-American

Trade, International Journal of Commerce and Management, 16(3 4), 2006, pp. 222 233.

28. Marisa von Bulow, Networks of Trade Protest in the Americas: Toward a New Labor Internation- alism? Latin American Politics and Society, 51(2), 2009, pp. 1 27; Andrew Batson, How U.S. Labor Leaders Chart a Global Course, Wall Street Jour- nal, May 23, 2007, p. A-6; Anya Sostek, USW Joins Effort to Form Superunion, Knight Ridder Tribune Business News, April 19, 2007, p. 1.

29. Foreign Trade Division of the U.S. Census Bureau, Trade in Goods (Imports, Exports and Trade

Balance) with China, Foreign Trade Statistics, November 24, 2014, pp. 1 18 at https://www. census.gov/foreign-trade/balance/c5700.html.

30. David M. Dickson, Trade Deficit Cut by Half of 08 Levels in 09, McClatchy Tribune Business News, February 11, 2010, pp. 1 2 at http:// proquest.umi.com/pqdweb?did=1960355591& sid=2&Fmt=3&clientd=1997&RQT=309& VName=PQD.

31. Labeling China s Currency Undervalued Correct: USW Calls for More Action, PR Newswire, July 9, 2010, pp. 1 2 at http://proquest.umi.com/ pqdweb?did=2076839101&sid=1&Fmt= 3&clientid=1997&RQT=309&VName=PQD.

32. Sudeep Reddy, Bernanke Prepared, but Reluc- tant, to Act on Economy; Fed Chief Discusses Limited Options to Boost GDP, Calls Outlook Unusually Uncertain , Wall Street Journal (Online), July 21, 2010, pp. 1 2 at http://proquest. umi.com/pqdweb?did=2087363941&sid=4& Fmt=3&clientid=1997&RQT=309&VName= PQD; Jon Hilsenrath, Fed Sees Slower Growth, Officials Debate How to Respond if Recovery Falters, Softer 2nd Half Is Seen, Wall Street Journal, July 14, 2010, p. A-1.

33. William R Cline, Why the U.S. External Imbalance Matters, Cato Journal, 27(1), 2007, p. 53.

34. Wheeler, The Future of the American Labor Movement, p. 25.

35. Christopher Candland, Core Labour Standards under the Administration of George W. Bush, International Labour Review, 148(1 2), 2009, pp. 169 181; International Labor Organization, ILO Declaration on Fundamental Principles and Rights at Work, 1996 2003, pp. 1 2 at http:// www.ilo.org.

34 PART 1 Recognizing Rights and Responsibilities of Unions and Management

36. Wheeler, The Future of the American Labor Movement, pp. 81 82.

37. David Porreca, Through Jaundiced Eyes: How the Media View Organized Labor, Journal of Communications, 46(3), 1996, p. 198.

38. Lane Kirkland, Labor and the Press, American Federationist, 82, December 1975, p. 3; John A. Grimes, Are the Media Short Changing Orga- nized Labor? Monthly Labor Review, 110(8), August 1987, pp. 53 54.

39. Diane E. Schmidt, Public Opinion and Media Coverage of Labor Unions, Journal of Labor Research, 13(3), Summer 1992, pp. 151 165; William J. Puette, Through Jaundiced Eyes: How the Media View Organized Labor (Ithaca, NY: ILR Press, 1992); Paul Jarley and Sarosh Kuruvilla, American Trade Unions and Public Approval:

Can Unions Please People All of the Time, Journal of Labor Research, 15(2), Spring 1994, pp. 97 117; Geoff Walsh, Trade Unions and the Media, International Labour Review, 127(2), 1988, pp. 205 220.

40. Christopher R. Martin, Framed: Labor and the Corporate Media (Ithaca, NY: Cornell University Press, 1994).

41. Lydia Saad, Labor Unions See Sharp Slide in U.S. Public Support, Gallup Poll, August 6-9, 2009, pp. 1-6 at http://www.galluppoll.com/poll/ 122744/Labor-Unions-Sharp-Slide-Public- Support.aspx?version=print; Costas Panagopoulos and Peter L. Francia, The Polls-Trends: Labor Unions in the United States, Public Opinion Quarterly, 72(1), 2008, pp. 134 159; Andrew Dugan, In the U.S., Majority Approves of Unions but Say They ll Weaken Gallup Poll, August 30, 2013, at http://www.gallup.com/poll/ 164186/majority-approves-unions-say-weaken. aspx.

42. Rebecca Riffkin, Public Faith in Congress Falls Again, Hits Historic Low, Gallup Poll, June 19, 2014, at http://www.gallup.com/poll/171710/ public-faith-congress-falls-again-hits-historic-low. aspx.

43. Very Large Majorities of Americans Believe Big Companies, PACs, Political Lobbyists and the News Media Have Too Much Power and Influ- ence in D.C, Business Wire, March 12, 2009, pp. 1 3 at http://proquest.umi.com/pqdweb? did= 1660004401&sid=2 &Fmt=3&client= 1997&RQT=309&VName=PQD.

44. Jonathan P. Hicks, Dreams and City Image Put at Stake in Strike, New York Times, April 10, 1992, p. A-31; Bob Corker, Bob Corker: Now the Auto Union Wants to Muzzle Public Officials, Wall Street Journal [online edition], March 3, 2014, at http://online.wsj.com/articles/SB100014 24052702304360704579415431328820424.

45. Albert Shanker, Where We Stand, New York Times, December 16, 1990, p. 7; Sandra Feldman, The Big Lie, New York Times, June 7, 1998, p. 7.

46. Statement by AFL-CIO President John Sweeney on Rainbow PUSH Coalition Reclaiming Our Land March in New Orleans, News Release, April 27, 2007, p. 1.

47. About the BlueGreen Alliance, BlueGreen Alli- ance, August 11, 2010, pp. 1 2 at http://www. bluegreenalliance.org/about_us?id=0001.

48. Caroline Preston, Advocacy Groups Work to Strengthen Their Influence on Immigration Laws, Chronicle of Philanthropy, 22(11), 2010, p. 16; Robert Schmidt, Big Bank Nightmare on K Street, Bloomberg Businessweek, May 24, 2010, p. 30; Steve Early and Larry Cohen, Jobs with Justice: Mobilizing Labor Community Coalitions, Working USA, 1(4), 1997, pp. 49 57; James Craft, The Community as a Source of Union Power, Journal of Labor Research, 11(2), Spring 1990, pp. 145 160. For a detailed account of a community effort involving religious institu- tions in an attempt to restore closed steel mills as a community- and employee-owned enterprise, see Thomas G. Fuechtmann, Steeples and Stacks: Religion and Steel Crisis in Youngstown (New York: Cambridge University Press, 1989).

49. Why Wal-Mart Must Change, Wakeup WalMart.Com, August 11, 2010, p. 1 at http:// www.wakeupwalmart.com/change; Wal-Mart s Urban Problem, Wal-Mart Watch, August 8, 2010, pp. 1 9 at http://www.wakeupwalmart. com/change; Wal-Mart s Urban Problem, Wal-Mart Watch, August 8, 2010, pp. 1 9 at http://walmartwatch.com/pages/wal_mart_ urban_problem/.

50. Kris Maher, Politics and Economics: Wal-Mart Joins Health Care Call; Unlikely Coalition of Labor, Business Pushes for Overhaul, Wall Street Journal, February 8, 2007, p. A-6.

51. David Winzelberg, L.I. Labor, Management Forge New Alliance, Long Island Business News, June 9, 2010, p. 1 at http://proquest.umi.com/

CHAPTER 1 Union Management Relationships in Perspective 35

pqdweb?did=2058869961&sid=1&Fmt=3& client=1997&RQT=309&VName=PQD; Cynthia Needham, Diverse Group Rallies for R.I. Job-Training Program, McClatchy Tribune Business News, April 30, 2010, pp. 1 2 at http:// proquest.umi.com/pqdweb?did=2022057401& sid=1&Fmt=3&client=1997&RQT=309& VName=PQD.

52. United States Department of Labor, Union Members in 2014, News Release, January 23, 2015, pp. 1 12, at http://www.bls.gov/news. release/union2.nr0.htm.

53. Gary Chaison, The AFL-CIO Split: Does It Really Matter? Journal of Labor Research, 28(2), 2007, p. 305.

54. United States Department of Labor, Union Members in 2014, News Release, January 23, 2015, pg. 1, at http://www.bls.gov/news.release/ union2.nr0.htm.

55. United States Department of Labor, Union Members in 2014, News Release, January 23, 2015, Table 3, pp. 7 8, at http://www.bls.gov/ news.release/union2.nr0.htm.

56. John Godard, The Exceptional Decline of the American Labor Movement, Industrial and Labor Relations Review, 63(1), 2009, pp. 82 108; Arne L. Kalleberg, Precarious Work, Insecure Workers: Employment Relations in Transition, American Sociological Review, 74(1), 2009, pp. 1 22; Justice on the Job: Perspectives on the Erosion of Collective Bargaining in the United States, ed. by Richard N. Block, Sheldon Fried- man, Michelle Kaminski, and Andy Levin (Kala- mazoo, MI: W. E. Upjohn Institute for Employment Research, 2006); C. Timothy Koel- ler, Union Activity and the Decline in American Trade Union Membership, Journal of Labor Research, 15(1), Winter 1994, pp. 19 31.

57. Union Ranks Down in 2009 as Recession Elim- inated Jobs, BNA s Collective Bargaining Bulletin, January 28, 2010, p. 8.

58. T. Alan Lacey and Benjamin Wright, Occupa- tional Employment Projections to 2018, Monthly Labor Review, 132(11), 2009, pp. 82 99.

59. Rik Kirkland, The New Face of Labor, Fortune, 154(8), October 16, 2006, pp. 122 132.

60. Shail J. Butani, Richard L. Clayton, Vinod Kapani, James R. Spietzer, David M. Talan, and George S. Werking Jr., Business Employment Dynamics:

Tabulations by Employer Size, Monthly Labor Review, 129(2), 2006, p. 4; United States Census Bureau, Statistics about Business Size (Including Small Business), available at http://www.census. gov/econ/smallbus.html.

61. Mitra Toosi, Labor Force Projections to 2022: The Labor Force Participation Rate Continues to Fall, Monthly Labor Review, 136(12), Dec., 2013 [online edition] at http://www.bls.gov/opub/mlr/ 2013/article/labor-force-projections-to-2022-the- labor-force-participation-rate-continues-to-fall-1. htm; also see, U.S. Bureau of Labor Statistics, Employment Projections: Civilian Labor Force

by Age, Sex, Race, and Ethnicity at http://www. bls.gov/emp/ep_table_304.htm.

62. U.S. Department of Labor, Union Members Summary: 2014, News Release, January 23, 2015, Table 1, at http://www.bls.gov/news.release/ union2.t01.htm.

63. U.S. Department of Labor, Union Members Summary: 2014, News Release, January 23, 2015, at http://www.bls.gov/news.release/union2.nr0. htm.

64. Arleen Hernandez, The Impact of Part-Time Employment on Union Density, Journal of Labor Research, 16(4), 1995, pp. 485 491.

65. Bruce Nissen, The Recent Past and Near Future of Private Sector Unionism in the U.S.: An Appraisal, Journal of Labor Research, 26(2), 2001, p. 325.

66. Michelle Amber, Henry Pledges Innovative Organizing Efforts Along With Addressing U.S. Economic Crisis, Daily Labor Report, 93, 2010, pp. C-1 2.

67. Joseph B. Rose and Gary N. Chiason, New Measures of Union Organizing Effectiveness, Industrial Relations, 29(3), Fall 1990, pp. 457 468.

68. Andrew W. Martin, Resources for Success: Social Movements, Strategic Resource Allocation, and Union Organizing Outcomes, Social Problems, 55(4), 2008, pp. 501 524; Peter Fairbrother and Glynne Williams, Unions Facing the Future: Questions and Possibilities, Labor Studies Jour- nal, 31(4), 2007, pp. 31 53; Paul F. Clark and Lois S. Gray, Changing Administrative Practices in American Unions: A Research Note, Industrial Relations, 44(4), 2005, pp. 654 658.

36 PART 1 Recognizing Rights and Responsibilities of Unions and Management

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1- 1 Was a Troublemaker Laid off for Sharing Wage

Information? Or for Business Reasons?

The American Restoration Contractors (ARC), Inc. was hired to reroof and fix cracks in the bricks of several buildings of a regional university. Because it was a large job, several new employees were hired. One was an experienced mason and bricklayer named Bruce Potts.* Potts had completed a four-year union appren- ticeship training program and another four years as a journeyman; subsequently, he had 12 years experience in both union and nonunion settings. ARC was a non- union contractor.

Potts testified before the federal NLRB that he had been led to believe by both his immediate supervisor, Gene Polizzi, and a co-worker who had been hired along with him, that the job would pay $44 per hour. However, upon arriving at the work site, Potts learned that it only paid $35 per hour, which made him angry, given the nature of the work.

He described the work as difficult. It required him to wash the building surface and the roof, removing any dirt. Next, employees inspected the bricks, caulk, and wood for needed repairs. Rotted caulk and other defec- tive building materials had to be removed and replaced. When the new caulk dried, the building was again sprayed with a high pressure hose. After the water dried, final waterproofing chemicals were applied. The caulk work was the most laborious, calling for the great- est expertise and precision. Much of this work took place on a 100° roof under the sweltering summer sun.

In recognition of the excellent work that Potts was doing, Polizzi recommended him for several pay raises: As the summer passed, Potts s pay went from $35 (the first week of June) to $36.13 (second week) to $37 (third week) to $39.21 (last week of June) to $40.13 throughout July and August, until he was laid off on in early September. As a result of these raises, Potts became the highest-paid non-managerial employee on the job site.

Potts often told his co-workers what his current pay rate was and he encouraged them to ask for more money. He said everyone was underpaid and all the workers should all be getting more. He also criticized some of the work methods they were asked to use. One employee quit soon after Potts discussed wage rates with him. The following week, the firm s Human

Resources Manager, Dixie Boxrud, hand-wrote the fol- lowing message on Potts s July 1st pay stub:

Please keep your pay rate to yourself. Thanks, Dixie B.

Further, when he distributed pay envelopes, Polizzi told Potts that he shouldn t be discussing his pay with his co-workers and stirring up trouble by encourag- ing them to complain.

At the end of the summer, Potts was laid off with four other workers, even though three others who did similar work kept their jobs. Potts accused ARC of lay- ing him off in retaliation for his complaining about the wages. Potts testified. I was telling everyone how they were getting short-changed and management was mak- ing a lot of money off of them and how they ought to do something about it threaten to quit or something to get what they deserved. Potts also indi- cated that Polizzi had told him that ARC had bid on another, similar job and that Potts offered to work at that site, even though it was several hours drive away. However, he was never called to work at that site, or any other ARC work sites.

The General Counsel (which often prosecutes cases involving allegations of unfair labor practices under the National Labor Relations Act, as amended by the Labor Management Relations Act [LMRA]), alleged that ARC was retaliating against Potts for his activities. Under federal labor law, employees, have the right to engage in concerted activities for the pur- pose of collective bargaining or other mutual aid or protection (Section 7); it is an unfair labor practice for employers to interfere with, restrain, or coerce employees in the exercise of [their] rights or to dis- criminate in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization (Sections 8 (a) (1) and 8 (a) (3) of the LMRA). The General Counsel argued that ARC s actions were illegal because (1) they interfered with Potts s actions aimed at mutual aid and protection (securing pay raises for all workers) and (2) ARC discriminated against Potts when making layoff and rehiring decisions because of his efforts to organize the workers to com- plain about their pay.

CHAPTER 1 Union Management Relationships in Perspective 37

Polizzi and other company officials denied the charges. They said that from the first day that he showed up at the job site Potts had been a trouble- maker. When he was hired, he had an erroneous impression as to what the pay for the work was worth. He was quite vocal about what he saw as low pay and other subjects, such as how the work should be done. I had to put up with his mouth, always com- plaining and whining, Polizzi said. However, he over- looked it because, he was a good caulker and he was productive. His outstanding productivity and excellent work resulted in several pay raises in the ensuing weeks. Still, his constant complaining bred dissatisfac- tion and caused one co-worker to quit. ARC had an informal (unwritten) policy that people not tell others their pay rate; such complaining leads to workers com- paring themselves to each other, breeding dissatisfac- tion. Potts went against that policy, even after he had been asked politely to keep your pay rate to yourself.

Ms. Boxrud testified that she wrote this on Potts s pay stub because he was causing issues on the job site telling people that, walk off and they will give you a raise. I wanted to keep an atmosphere of calm on the job. We already had one employee quit over it. Talking about pay was causing problems, so I wanted him to stop talking about it.

Managers also denied that their actions violated labor law. The workers had not formed a union, nor were they contemplating forming a union. The word union was never mentioned to ARC managers. Fur-

ther, workers were not bargaining collectively and they were not threatening to strike if wages stayed unchanged. Clearly, they were not joining together for

mutual aid and protection against an exploitive employer, given that they were all earning over $30 per hour. Thus, management at ARC was not interfer- ing with their rights under labor law.

Finally, ARC did not retaliate against Potts for his complaints. He was laid off near the end of the job, along with several other workers. He would have been laid off regardless of his statements to his co-workers: When a job neared completion, fewer workers were needed. Yes, it was true that Potts offered to work at another job site. However, what Polizzi did not know at the time that he mentioned that project was whether ARC would win the contract. It turned out that the firm did not have the low bid and the contract was awarded to another firm. The firm won other bids, but the work was not as difficult; thus, the company did not need to hire a caulker who commanded the high rate of pay that Mr. Potts earned. Consequently, ARC did not need his services. Potts s charges of retaliation are baseless.

* = All company and individual names and some minor facts are changed. This case is adapted from an NLRB case.

Questions 1. Given the facts of the case and the brief description

of the LMRA, did ARC violate labor law by telling Mr. Potts to Please keep your pay rate to yourself ? Explain your reasoning.

2. Did ARC retaliate against Mr. Potts when it laid him off and did not offer him work on other jobs? Did these actions constitute violations of the LMRA? Explain your reasoning.

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1- 2 Discharge for Whistleblower Activity

Janet Broom and Darla Miller were employed as a cer- tified medication aide and cook, respectively, at the employer s residential care facility located in Norman, Oklahoma. Both employees suspected another employee of stealing and using drugs, intended for use by residents of the facility, from the facility s medi- cation room. Broom and Miller decided to report the suspected employee based on their observation that she had falsified medical drug log books to conceal her theft from facility managers.

The facility s Employee Handbook clearly outlined a procedure employees were to follow when making com- plaints involving other employees. The Employee Hand- book called for the initial complaint to be filed with the accused employee s immediate supervisor. Because the two employees making the complaint believed that the immediate supervisor in this case, Sarah Dutton, was a close personal friend of the accused, Broom and Miller chose to make their complaint to another manager, who was the medication consultant at the facility.

38 PART 1 Recognizing Rights and Responsibilities of Unions and Management

Upon learning of the complaint from the medica- tion consultant, supervisor Dutton discharged Broom and Miller for not following the proper chain of com- mand in raising an issue about another employee. Both Broom and Miller are nonunion employees unrepresented by a union. After being discharged, Broom and Miller s only recourse was to file a wrongful discharge state court claim, arguing that they were engaged in internal whistle blowing activity and thus protected from discharge as a matter of Oklahoma public policy.

The employer argued that Broom and Miller were subject to the Oklahoma common law employment- at-will (EAW) doctrine, which permits an employer to discharge an at-will employee at any time for any or no stated reason. The employer sought and received a summary judgment in state district court declaring Broom and Miller s discharge to be lawful under the state s common law, EAW doctrine.

Broom and Miller appealed the state district court s decision to a federal Court of Appeals, seeking to reverse the district court s decision.

In Groce v. Foster, 880 P.2d902 (Okla. 1994), the Oklahoma Supreme Court recognized five types of public policy exceptions to the common law, EAW doctrine. Under Oklahoma law, an at-will employee may not be lawfully discharged for (1) refusing to par- ticipate in an illegal activity; (2) performing an impor- tant public service (e.g., jury duty); (3) exercising a legal right or interest of the employee; (4) exposing some wrongdoing by his or her employer; and (5) perform- ing an act that public policy would encourage or refus- ing to perform an act that public policy would discourage, when the discharge action is coupled with a showing of bad faith, malice, or retaliation.

Broom and Miller argued that their discharge fell under the fifth public policy exception to the EAW doctrine. By reporting to management a co-worker who they honestly believed was engaged in stealing drugs intended for administration to residents of the facility, Broom and Miller believed they were engaging in conduct that Oklahoma public policy encourages.

The Oklahoma Supreme Court mandates that to be recognized and enforced, public policy exceptions must be clearly stated in state constitutional, regula- tory, or case decision law. To that end, Broom and Miller cited three statutory laws that they believed pro- vided a clear statement of public policy supporting their action.

The first law is the Nursing Home Care Act, which governs safeguards and procedures for the storage, safekeeping, monitoring, dispensing, and, when neces- sary, destruction of patient prescription drugs. The employer argued that the act specifically applies only to licensed nursing homes operating within the state. The employer s facility is licensed as a residential care facility and thus is excluded from coverage under the Nursing Home Care Act. The state of Oklahoma grants operating licenses for several different types of elder- care facilities, including nursing homes, assisted living homes, and residential care facilities.

The second law is the Residential Care Act, which the employer admitted does apply to the facility in this case. Broom and Miller noted that the law authorizes the Oklahoma State Department of Health to develop and enforce rules and regulations to implement the provisions of the Residential Care Act. Such rules and regulations shall include but not be limited to govern- ing temperature limits, lighting, ventilation, and other physical conditions which shall protect the health, safety, and welfare of the residents in the home. The employer argued that Broom and Miller did not raise the issue of the Residential Care Act s applicability to their case when the case was before the district court and therefore could not legally raise it as a supporting argument on appeal. It is a well-settled legal principle that issues or arguments not clearly presented and con- sidered at a prior legal proceeding cannot be subse- quently raised as a legal basis for argument on appeal. The employer also noted that the language referred to by Broom and Miller in the Residential Care Act is very general and not specific enough to rise to the level of a clear statement of public policy supporting intent to make an exception to the prevailing Oklahoma EAW doctrine.

The third law cited by Broom and Miller as a basis for their appeal is the Uniform Controlled Dangerous Substances Act. Although this law does make it a crim- inal offense to steal a controlled dangerous substance, Broom and Miller made no specific argument as to how this law established a clear mandate of public pol- icy applicable to their discharge case. The employer argued that Broom and Miller again failed to meet the required showing of a clear and compelling public policy in favor of restricting an employer s right to dis- charge an at-will employee for failing to follow the established procedure for bringing a serious complaint against a co-worker.

CHAPTER 1 Union Management Relationships in Perspective 39

Questions 1. Should the federal appeals court deny Broom and

Miller s appeal and enforce the decision of the state district court finding upholding the discharge of the two whistleblowers? Explain your reasoning.

2. How might this case have been handled differently if Broom and Miller had been members of a bargain- ing unit represented by a union for purposes of collective bargaining?

40 PART 1 Recognizing Rights and Responsibilities of Unions and Management

41

CLASSROOM EXERCISES

1.1 Work Rules

Directions: This activity can be performed as an individual or group assignment using either an oral or written report format. Select a recent (not more than one-year old) news story or article and explain how the information in the story could affect the nego- tiation or administration of a particular work rule. An appropriate news story or article should contain information on one or more of the possible constraints or influences affecting the negotiation or administration of work rules identified in the text (e.g., state of the economy, labor market conditions, product market conditions, financial mar- ket conditions, technology, and international forces or events).

1.2 Union Membership Trend

Directions: This activity can be performed as an individual or group assignment using either an oral or written report format. Select a recent (not more than one-year old) news story or article and explain how the information in the story could affect future union membership growth in a positive or negative manner. Your explanation should clearly indicate why or how you think the information in your story will have the pre- dicted effect on future union membership growth.

1.3 Word Association

Directions: Divide the class into groups of three to five students. Presented below are 25 words or phrases. Each group should classify each listed word or phrase as primarily applicable to UNIONS (U) or MANAGERS (M), BOTH U & M (B), or NEITHER U nor M (N). Groups may compare their results and discuss their reasoning for associating particular words or phrases with the terms Union or Management. Groups may also list additional descriptive terms or phrases that they would strongly associate with the terms Union or Management.

Words or phrases to classify

1. Powerful 2. Educated 3. Democratic 4. Profit-oriented 5. Productive 6. Fair 7. Violence 8. Trustworthy 9. Job security

10. Competitive 11. Political 12. Authority 13. Reasonable 14. Work stoppage 15. Professional 16. Employee compensation 17. Ethical 18. Innovative 19. Flexible 20. Quality improvement 21. Risk taker 22. Necessary 23. Job safety and health 24. Work rules 25. Growth-oriented

42 PART 1 Recognizing Rights and Responsibilities of Unions and Management

CHAPTER 2

The History of Labor Management Relations

UNCLE BOB USED to try and explain to me what it meant to be a labor man. This was generally a part of his usual rant about how workers today, especially young workers, had no under- standing of or appreciation for what it took to achieve some of the working conditions they enjoyed today, such as the eight- hour work day, paid vacations and holidays, protection from unsafe working conditions, and so on. In Uncle Bob s view, every advancement made by American workers over the past 100 years occurred because workers learned to join together and fight for their right to enjoy the American dream. That fight often involved pressuring employers to make more improve- ments at a faster pace than employers would likely be inclined to do in the absence of such pressure. Sometimes it meant pres- suring politicians to support needed change or sometimes other societal institutions (religious, civic, and charitable organizations) as well. A strong union movement helped to ensure that as employers profited from economic growth, so too increased the prosperity of typical workers helping to create a strong middle class in this country. I suspect Uncle Bob s pro-labor views didn t do adequate justice to the history of the positive contribu- tions made by employers or other societal groups strongly sup- portive of a free enterprise system and economic growth. Still I must admit, I knew very little about the history of labor management relations in the United States and how personal- ities, events, environmental factors, and formal organizations interacted to create the type of labor management relations I experienced on the job today.

43

Questions 1. Some would argue that the middle class in America is shrinking

today. Do you agree or disagree and why?

2. To what extent do you think the decline in union membership in the United States has made it more or less difficult for individuals to maintain their standard of living?

3. Should labor history be a subject taught in public/private schools in the United States similar to required study of the free enterprise system and leading entrepreneurs (e.g., John D. Rockefeller, Andrew Carnegie, Bill Gates)?

The American labor movement, as we know it, has adjusted to changing social and eco-nomic events, employers attitudes and actions, and employee preferences for more than 100 years. A historical perspective is necessary to better understand current union behavior and help us predict how most unions might react to sudden and dramatic change.

There is no best way to obtain this perspective.1 Insights from many academic disci- plines (sociology, economics, political science, etc.) have to be considered, and many focal points can be assessed. Our discussion focuses on what has worked and not worked for organized labor through two interrelated historical dimensions: (1) relations between labor and management organizations and (2) organizational characteristics of labor organizations.

This second dimension is important to labor relations students and practitioners because current national union and labor federations have been historically affected by four major labor organizations: the Knights of Labor (KOL), the Industrial Workers of the World (IWW), the American Federation of Labor (AFL), and the Congress of Indus- trial Organizations (CIO).

The strength or likely continued success of any labor organization can be assessed by focusing on four criteria:

A labor organization s structural and financial stability. Its ability to work within the established political and economic system, particularly the wage system. The degree to which the broader social environment, such as laws, media, and pub- lic opinion, is supportive or opposed to a labor organization s goals and tactics. The ability of union leaders to identify and satisfy members goals and interests.

Readers can use these criteria to assess why some labor organizations failed in the past and to predict the likelihood of current unions posing a strong challenge to management. The chapter is organized into three time periods: from 1869 to World War I, World War I to World War II, and World War II to the present.

1869 to World War I

Unions as we know them today did not exist before 1800. There were some small guilds, joint associations of employers, and craftspeople, that pressed for professional standards

44

and restriction of outside competition.2 Such guilds typically pressed concerns that benefited employees and employers alike. By 1820, there had been only a few scattered strikes, usually over wages, because only two industries, shoemaking and printing, had even a semblance of collective bargaining. There was also no general labor philosophy or labor movement in the United States at this time, as labor organizations were princi- pally small groups of craft employees located in major metropolitan areas along the East- ern coast of the United States.3

The 1850s and 1860s saw development of the U.S. factory system (industrial revolu- tion), improved transportation, and increased product mobility, all factors that extended a company s (and potential unionized employees ) organization beyond the local com- munity. For example, an employer could produce shoes at lower wages in Baltimore and ship them to Boston, where they could be sold at a higher price. Negotiating similar terms and employment conditions for labor was viewed as a means to take wages out of competition; but to do so would require labor organizations capable of operating on a national rather than local basis. The Civil War (1861 1865) refined and encouraged mass production techniques, creating large concentrations of semiskilled and low-skilled employees under a single factory roof a situation that created conditions conducive to the organization of labor.

Early Legal Developments Involving Labor Management Relationships (1806 1931) Article I, Section 8, of the U.S. Constitution grants Congress the right to pass laws reg- ulating interstate and international commerce. Labor relation activities can affect inter- state commerce and therefore, since the late 1800s, they have been the focus of many statutory laws to regulate various aspects of the employment relationship. The First Amendment of the U.S. Constitution, which ensures the rights of peaceful assembly, freedom of association, and freedom of speech, usually has been interpreted as allowing employees to form and join unions and has provided the justification for union picketing (to communicate information to possible union members or supporters). The Fifth Amendment contains due process protections, and the Fourteenth Amendment prohibits state laws from depriving citizens of their constitutional rights, providing equal protec- tion under the law. These constitutional provisions play an important role in defining the basic framework of American labor law.

Few statutory labor laws were enacted prior to the late 1800s, so early U.S. history was governed by the application of common law. Common law is used to resolve a legal dispute only when no constitutional or statutory law applies to that dispute. In such situations, judges develop legal principles or procedures to resolve these types of dis- putes. Over time, these principles and procedures are adopted by other judges in similar disputes and come to represent the common law. Early U.S. common law was based upon English common law principles as modified by local custom and practice.

One example of a common law doctrine that is still often used today is the employment- at-will (EAW) doctrine. The EAW doctrine states that employment relationships established for an indefinite duration may be terminated by either the employer or the employee at any time for any or no stated reason. Arising from the English common law governing master servant relationships, employers have historically relied upon this common law doctrine as a basis for terminating employees for a wide variety of reasons without permitting the termi- nated individual to legally challenge whether management s decision or reasoning was correct or justified. Of course, if a group of employees were to join a union that bargained an employ- ment contract with their employer that established terms and conditions of employment, then such employees would no longer be considered employees-at-will, and their job rights

CHAPTER 2 The History of Labor Management Relations 45

and protections would be governed by the jointly negotiated and administered labor agree- ment. Thus for many employers, the question of whether their employees join a union and engage in collective bargaining directly affects the employer s ability to make decisions con- cerning specific employees and whether those decisions will be subjected to legal challenge through a grievance procedure contained in the applicable collective bargaining agreement. Over time the EAW doctrine has been modified by the passage of laws and court interpreta- tions intended to prohibit employers from discharging individuals for certain protected rea- sons (e.g., joining a union or an individual s race, sex, or religion). In many states, the EAW doctrine remains the primary protection of management s right to discharge employees. This doctrine is more thoroughly discussed in Chapter 12.

Early labor unions in the United States had to struggle for existence. The legal sys- tem was primarily focused on protecting employer property rights to advance the eco- nomic growth of the nation, with little importance placed on protecting the rights of employees within the emerging free enterprise economic system. Employer property rights were defined in broad terms to include both tangible property (e.g., right to con- trol plant, equipment, employees) as well as intangible property (e.g., right to engage in normal business, right to make a profit). Due to the absence of statutory laws regulating labor relations, the judicial system exerted great control over conflicts of interests between employers and employees from the early 1800s through the 1930s.

Under English common law, it was illegal for two or more workers to join together for the purpose of pressuring their employer to improve wages or working conditions. In 1806, one of the first major labor law cases in the United States, known as the Cordwai- ners case, occurred when a group of journeymen shoemakers in Philadelphia were indicted, convicted, and fined $8 each for forming an illegal criminal conspiracy. The shoemakers had joined together in an attempt to raise their wages and refused to work with nonmembers or at a wage rate less than they demanded. Twelve jurors (all busi- nessmen) found the shoemakers guilty of forming an illegal combination for the purpose of raising their own wages while injuring those who did not join the coalition.4 The pros- ecutor in the trial stated: Our position is that no man is at liberty to combine, conspire, confederate and unlawfully agree to regulate the whole body of workmen in the city. The defendants are not indicted for regulating their own individual wages but for undertak- ing by a combination, to regulate the price of labor of others as well as their own. It must be known to you, every society of people are affected by such confederacies; they are injurious to the public good and against the public interest. 5

The application of the common law criminal conspiracy doctrine to attempts by employees to organize unions aroused much public protest, not only from employees but also from factory owners who feared the closing of their factories if their employees dissat- isfaction grew too strong. These concerns were undoubtedly a consideration when the Supreme Judicial Court of Massachusetts in Commonwealth v. Hunt (1842) set aside the criminal conspiracy conviction of seven members of the Journeymen Bootmakers Society who had refused to work in shops where nonmembers were employed at less than their scheduled rate of $2 per pair of boots.6 While not rejecting the criminal conspiracy doctrine, the court instituted an ends/means test to be applied on a case-by-case basis to determine if the ends (goals) sought by the combination of workers were legal and if the means (tactics) used by the workers were also lawful. The court concluded it was not illegal for workers to seek to protect their own economic interests in maintaining a desired wage rate, nor was it illegal to refuse to work as a means of encouraging an employer not to hire an individual at a lower wage rate, thus undercutting the current established rate of pay for a particular type of labor. Of course, in order to continue normal business operations, the employer was free to replace any employee who refused to work.

46 PART 1 Recognizing Rights and Responsibilities of Unions and Management

Civil Conspiracy Doctrine The Commonwealth v. Hunt decision virtually ended the use of the common law criminal conspiracy doctrine in labor relations. However, the courts continued to apply the civil conspiracy doctrine, which held that a group involved in concerted activities violated the law if it inflicted harm on other parties outside the disputants (e.g., customers or other employees) even though the workers were pursuing a valid objective in their own interest.7

In Vegelahn v. Guntner (Mass. S.Ct. 1896), an injunction was issued against a union that was picketing its employer to obtain higher wages and shorter hours.8 Although the court agreed that higher wages and shorter work hours were legitimate ends for workers to pur- sue, the court concluded that picketing, accompanied by threats of violence, could unlaw- fully intimidate individuals who desired to continue to work for the employer or customers who sought to do business with the employer and, therefore, was an unlawful means to accomplish an otherwise lawful end. Only where both the workers ends and their means were lawful would the concerted activity be permitted.

Around 1880, many states began loosening restrictions on who could serve on juries (e.g., removing property ownership requirements), which permitted more hourly workers to perform jury duty service. As a consequence, juries became less willing to convict workers of criminal or civil conspiracy charges. Employers turned to the courts for a quicker and more reliable means of restricting employee concerted activities, which the legal system provided in the form of a labor injunction.9 A labor injunction is a court order prohibiting or restricting certain activities in conjunction with a labor dispute. The advantage of a labor injunction over a jury trial was that a preliminary labor injunction could be issued by a judge without a formal jury hearing and was often based solely on statements or evidence provided by the employer to demonstrate the need for the labor injunction. It might be weeks or months before the labor organization enjoined might get a chance to challenge the credibility of the employer s evidence or offer alternative evidence at a hearing to show why a labor injunction was not necessary or appropriate. By that time the employer had often prevailed in ending the labor dispute on terms favorable to the employer s interest aided by the labor injunction s restrictions on work- ers ability to use effective economic pressure tactics against the employer.

The courts long-standing interest in enforcing the terms of contracts led many employ- ers to require their employees to sign a yellow-dog contract, an agreement stating that they would neither join a union nor assist in organizing one.10 Why would an employer use the yellow-dog contract if, under the EAW doctrine, it could already legally fire employees for virtually any reason including organizing a union? While motives varied, we believe that three reasons were predominant. First, asking employees to sign a yellow-dog contract sent a strong signal that a union would not be tolerated at the company. Second, because this contract was a condition of initial or continued employment, any violation would clearly allow the company to discharge the employee. Third, if any outside union organizer attempted to solicit employees to join a union or engage in other concerted activity (such as a strike to improve wages or working conditions), such activity could be enjoined by a judge on the grounds that it was an attempt to interfere with a legal contractual relationship between the employer and its employees. Union organizers who violated the court order could then be charged with contempt of court and fined and/or imprisoned.

Application of Antitrust Legislation to Labor Unions Another legal obstacle confronting labor organizations in the late 1800s was the applica- tion of antitrust law to restrict union-organizing and bargaining activities. Congress passed the Sherman Antitrust Act in 1890 to regulate the increasing power of large

CHAPTER 2 The History of Labor Management Relations 47

corporations to engage in anti-competitive practices (e.g., cutthroat pricing, restricting competitor s access to necessary raw materials), which tended to drive smaller firms out of the market.11 The Sherman Antitrust Act neither explicitly included nor excluded labor unions from coverage as an illegal combination in restraint of interstate commerce. The congressional debate and testimony leading to passage of the bill focused on the business practices of employers, not labor organizations.

The U.S. Supreme Court decided to apply the Sherman Antitrust Act to labor orga- nizations in the 1908 landmark decision Loewe v. Lawlor (better known as the Danbury Hatters case).12 The United Hatters of North America (UHU), having organized 70 of 82 firms in the hat manufacturing industry, wanted to organize Loewe & Co., one of the few remaining nonunion employers located in Danbury, Connecticut. As a part of the UHU s campaign to gain union recognition as the bargaining agent for employees at Loewe & Co., the union organized a nationwide boycott assisted by the AFL and directed at persuading all retailers, wholesalers, and customers not to buy, sell, or handle hats produced by Loewe & Co. The boycott was successful, which prompted Loewe & Co. to sue, alleging that the UHU s boycott interfered with Loewe & Co. s ability to engage in its normal interstate commerce of selling hats. The Supreme Court ruled that unions were covered under the Sherman Act and that the union s boycott did illegally obstruct Loewe & Co. s ability to engage in its normal interstate commerce. The court awarded the employer triple damages ($252,000) as provided for under the Sherman Antitrust Act and ruled that individual union members could be held liable for paying the damage award if the labor organization itself did not have sufficient funds to pay the claim.

The Loewe v. Lawlor decision had several important impacts on labor relations. First, the decision essentially eliminated the use of the boycott, which had previously been an effective union tactic for bringing economic pressure against an employer to persuade it to agree to union proposals. It also raised concerns in the minds of some union leaders as to whether the courts might extend the ruling on boycotts in future legal cases to include other union tactics (e.g., picketing, strikes, or handbilling) also intended to impose economic pressure on an employer s business operations. Second, the court s decision to hold individual union members personally liable for damages resulting from the actions of their labor organization dealt a serious blow to union- organizing efforts. Not only could an employee face discharge for participating in union-organizing activity, but if the organizing activity was declared to be an antitrust violation, the employee might also risk loss of personal assets acquired over the indivi- dual s work career, as some UHU members experienced.

One positive aspect for unions of the Loewe v. Lawlor decision was that it clearly demonstrated to AFL president Samuel Gompers and other labor leaders the need to expand state and local union political efforts to include Congress and other federal branches of government. An aggressive campaign led by the AFL to reverse the court s interpretation of the Sherman Antitrust Act led to the enactment of the Clayton Anti- trust Act in 1914. Included among the Clayton Act s amendments to the Sherman Anti- trust Act were the following provisions:

[The] labor of a human being is not a commodity or article of commerce. Nothing contained in the antitrust laws shall be construed to forbid the existence and opera- tions of labor [unions] nor shall such organizations be held or construed to be illegal combinations or conspiracies in restraint of trade.

No restraining order or injunction shall be granted in any case between an employer and employees growing out of a dispute concerning terms or conditions of employment, unless necessary to prevent irreparable injury to property.

48 PART 1 Recognizing Rights and Responsibilities of Unions and Management

No such restraining order shall prohibit any person or persons from ceasing to perform work recommending, advising, or persuading others by peaceful means so to do peacefully persuading any person to work or abstain from working peacefully assembling in a lawful manner, and for lawful purposes.13

When AFL president Samuel Gompers read the provisions of the Clayton Act, he pro- claimed it U.S. labor s Magna Charta because it would free organized labor from the restraints of antitrust prosecution. Gompers s joy, however, was short-lived. A series of Supreme Court decisions in the 1920s left no doubt that the Clayton Act was not labor s Magna Charta.14 Rather than viewing the Clayton Act as a repudiation of the court s prior interpretation of the Sherman Antitrust Act, the Supreme Court interpreted Congress s intent in passing the Clayton Act as only reaffirming a labor organization s right to exist so long as it sought to achieve lawful ends using lawful means. In fact, the Clayton Act hurt union growth and development more than it helped. Under the Clayton Act employ- ers could directly seek a court order for a labor injunction rather than having to ask a U.S. district attorney to seek such a court order, as had been required under the Sherman Act.

Some states attempted to address perceived labor law deficiencies on their own by enacting state labor legislation to grant legal bargaining rights to employees or restrict the circumstances under which a state court judge could issue a labor injunction to ban employee activity during a labor dispute. For example, in 1921 the U.S. Supreme Court declared a law enacted by the Arizona legislature and upheld by the Arizona Supreme Court unconstitutional in violation of the Fifth and Fourteenth Amendments.15 The Ari- zona law sought to deny a judge the right to issue a labor injunction during a labor dispute to halt peaceful picketing. The Supreme Court majority declared that the Arizona law unlawfully denied the employer being picketed during a wage dispute its due process and equal protection right to obtain a labor injunction to prevent the picketing from damaging normal business operations. The dissenting opinion argued that states such as Arizona ought to be free to determine for themselves whether some restrictions on employer prop- erty rights (e.g., limiting access to injunctive relief) might be imposed if necessary to pro- tect other legitimate rights of employees to participate in bargaining over work conditions.

The 1920s were a difficult period for organized labor. Although this was a period of general economic growth and prosperity, unions confronted an environment where labor injunctions were easier to obtain; the court system strongly supported employer property rights; favorable legislation protecting employees right to organize and bargain collec- tively was absent; and employers commonly used anti-union tactics (such as goon squads, yellow-dog contracts, discharge, and blacklisting). Although the Railway Labor Act (discussed in Chapter 3), passed in 1926, granted bargaining rights to railroad employees, the 1920s was primarily a time of regrouping, self-analysis, and trying to preserve the status quo for most unions.

Emergence of National Labor Organizations During the period of 1869 to World War I, three national labor organizations emerged: the KOL, the AFL, and the IWW. Each of these organizations is discussed in terms of its philosophy and goals, organizational structure, and strategies and tactics. Reasons sug- gested for the demise of the KOL and decline of the IWW are discussed to illustrate the previously mentioned criteria for assessing the strength or success of a labor organi- zation. Three prominent labor episodes of this period are also discussed: the drive for an eight-hour workday (including the Haymarket Riot of 1886), the Homestead strike (1892), and the Pullman strike (1894). The Labor Relations in Action box highlights some of the key events that have helped to shape U.S. labor relations over time.

CHAPTER 2 The History of Labor Management Relations 49

LABOR RELATIONS IN ACTION Labor History Time Line: Selected Events

Year Event

Late 1700s Emergence of local craft unions in large East Coast cities (e.g., New York, Philadelphia). 1842 The Massachusetts Supreme Court in Commonwealth v. Hunt establishes a legal precedent

that workers have a right to combine together for the purpose of pursuing lawful end (goals) using lawful means (tactics).

1850 U.S. economy begins to shift from an agricultural base to a manufacturing (industrial) base. Regional and national product markets emerge with larger firms able to use new technology and improved transportation modes (roads, rail) to mass produce goods.

1869 Noble Order of the Knights of Labor organized. 1880s Use of the labor injunction to prohibit or restrict employees concerted activities replaces reli-

ance on criminal or civil conspiracy trials and emerges as a popular management legal strategy. 1886 Eight-hour day movement gains momentum; Haymarket Square Riot occurs in Chicago, Illinois;

American Federation of Labor (AFL) is organized, electing Samuel Gompers as president. 1892 The Homestead strike involving the Amalgamated Association of Iron, Steel and Tin Workers

and steel mills owned by Andrew Carnegie occurs. 1894 Eugene Debs leads the American Railway Union in a strike against the Pullman Company,

resulting in federal troop intervention in the labor dispute. 1905 The Industrial Workers of the World (IWW) organizes. 1908 U.S. Supreme Court declares a national product boycott by the United Hatters Union to be a

violation of the Sherman Antitrust Act. 1911 Triangle Waist Company fire in New York City leads to the death of 146 clothing workers. This

tragedy focuses national attention on the poor working conditions facing many industrial employees.

1913 Congress creates the U.S. Department of Labor, and the department s head (Secretary of Labor) is designated a member of the president s cabinet.

1926 Railway Labor Act enacted, granting employees in the private-sector railroad industry the right to form unions and bargain collectively.

1932 The Norris-LaGuardia Act enacted, placing restrictions on the issuance of labor injunctions dur- ing labor disputes and making yellow-dog contracts unenforceable in court.

1933 U.S. Secretary of Labor Frances Perkins becomes the first woman to serve as a member of the president s cabinet.

1935 National Labor Relations (Wagner) Act enacted, granting most private-sector employees the right to form unions and bargain collectively. The Committee for Industrial Organization created by several AFL unions to encourage efforts to organize workers in the mass production indus- tries (auto, steel, rubber, etc.).

1936 Railway Labor Act amended to add coverage of the airline industry. 1938 The Committee for Industrial Organization is reorganized as the Congress of Industrial Organi-

zations (CIO), electing John L. Lewis as its first president. Fair Labor Standards Act enacted, establishing a federal minimum wage of 25 cents per hour and requiring time and one-half pay for hours worked in excess of 40 hours in a regular work week.

1947 Labor Management Relations (Taft Hartley) Act enacted over the veto of President Truman. Retains NLRA protections for employee collective activity but adds protection for the right of individual employees not to engage in collective activity and imposed restrictions on union conduct similar to restrictions imposed on management conduct by the NLRA.

1952 Presidents of both the AFL and CIO die of natural causes in the same month, setting the stage for new leadership by AFL president George Meany and CIO president Walter Reuther.

50

Year Event

1955 AFL and CIO labor organizations merge to form the AFL-CIO, electing George Meany as presi- dent and Walter Reuther as vice president.

1959 Following Senate hearings on alleged organized crime infiltration of unions, the Labor Manage- ment Reporting and Disclosure (Landrum Griffin) Act enacted to regulate the internal affairs of unions and their relationship with individual union members.

1959 Wisconsin passes the first state law allowing collective bargaining by state and local govern- ment employees.

1962 President John F. Kennedy issues Executive Order 10988, permitting federal employees to organize and engage in collective bargaining.

1963 Equal Pay Act enacted, prohibiting different wage rates based on sex for workers performing the same job who are subject to coverage under the Fair Labor Standards Act.

1964 Civil Rights Act enacted, prohibiting discrimination based upon race, color, religion, sex, or national origin in hiring, apprenticeship, compensation, terms or conditions of employment, and union membership.

1967 Age Discrimination in Employment Act enacted, making it illegal to discriminate against indivi- duals 40 years of age or older in regard to hiring, discharge, or other employment decisions on the basis of the individual s age.

1968 Unrest leads to increased organizing, bargaining, and strikes by public employees (e.g., police, firefighters, and teachers). Martin Luther King Jr. is assassinated while helping to lead a sanita- tion workers strike in Memphis, Tennessee.

1970 Occupational Health and Safety Act enacted to provide a safe and healthy work environment for American workers. Congress passes the Racketeer Influenced and Corrupt Organizations Act (RICO) which allows the prosecution of organizational leaders for racketeering if two or more crimes have been committed by the organization in a ten-year period; used against crime syndicates involved with business firms and labor unions.

1974 Employee Retirement Income Security Act (ERISA) enacted to regulate defined-benefit pension plans; the goal of the law was to protect employee pensions.

1975 Economy begins to transition from industrial-based to service-based. 1978 Civil Service Reform Act enacted, converting previous presidential executive orders establish-

ing bargaining right for federal employees into permanent legislation. 1980 Increasing global competition ushers in a decade in which many U.S. firms are forced to

undergo dramatic change in order to remain competitive. Concession bargaining, flexible work rules, and labor management cooperation become common topics for negotiation.

1981 Members of the Professional Air Traffic Controllers Union (PATCO) engage in an illegal strike and are discharged by the Reagan administration. This act was widely interpreted by practitioners in the private and public sectors as evidence of a new employer get tough policy in labor rela- tions. Union avoidance consultants advised firms on how to become or remain union free.

1988 Worker Adjustment and Retraining Notification Act enacted. Requires employers who employ 100 or more employees to provide 60 days advance notice of any plant closing or major layoff.

1991 Americans with Disabilities Act enacted to protect persons with disabilities from discrimination in regard to hiring, discharge, or other terms and conditions of employment. Civil Rights Act of 1991 amended Title VII of the 1964 Civil Rights Act to permit (1) suits for punitive damages for violations involving intentional discrimination and (2) the use of alternative dispute resolution methods to resolve employment discrimination claims.

(Continues)

51

The Knights of Labor (KOL)

Goals and Organization of the KOL Founded by Uriah S. Stephens as a secret society in 1869, the Knights of Labor (KOL) operated in secrecy until 1882 so that the members would not be discharged by their employers for participating in a labor organization. There are two major reasons for dis- cussing the KOL. First, rather than limiting membership to a local geographic area, it was a national union that had a scope larger than any previous union in American his- tory. The KOL enjoyed steady growth in the early 1880s, reaching a membership of more than 100,000 in 1885. Between 1885 and 1886, the organization s membership increased dramatically to 700,000. The KOL achieved more power, prestige, and notoriety than any other previous labor organization.16 However, its goals and strategies also contributed to its demise as an effective organization. Therefore, the KOL served as an important nega- tive example to the AFL and other contemporary labor organizations that followed as they worked to establish goals, policies, and an organizational structure necessary to sur- vive and grow as a labor organization.

The Knights attracted members who were dissatisfied with many features of the new industrial revolution, which dramatically altered work practices and relationships begin- ning at the time of the Civil War. In response to workers concerns, the KOL established two major interrelated goals:

1. Change the existing labor management relationship so that the depersonalized and specialized aspects of mass production could be avoided.

2. Attain moral betterment for employees and society.

The KOL s goals can best be understood through the views of Terence Powderly, its leader and chief spokesman from 1879 to 1883. Powderly felt that mass production reduced employees feelings of pride and personal accomplishment.17 During the Agri- cultural Economy era, prior to 1850, work occurred in relatively small shops where employees often gained satisfaction and pride from their craftsmanship as they created high-quality customized products from beginning to end. The Industrial Economy (1850 1975) utilized mass production techniques and job specialization so that different

Year Event

1992 North American Free Trade Agreement enacted; intended to promote trade between the United States, Canada, and Mexico.

1993 The Family and Medical Leave Act enacted, permitting employees of employers who employ 50 or more employees to take up to 12 weeks of unpaid time off in the event of a birth, adop- tion, or foster care of a child; or to care for a child, parent, spouse, or themselves involving a serious health condition.

2005 Formation of the Change to Win labor federation to focus more resources on organizing unrep- resented employees.

2009 Lilly Ledbetter Fair Pay Act enacted to clarify the time limit within which a pay discrimination claim may be filed but limiting any potential employer liability for damages to a maximum of two years.

52

jobs focused only on a relatively few tasks which, when combined with other employees job output, could produce a complete product. Because the time and skill level required to learn and perform, a limited set of job tasks were less than previously required to pro- duce the entire product, less costly labor could be employed, and more easily replaced when necessary. Powderly placed this situation in perspective by considering the shoe- makers situation: The man who was called a shoemaker 30 years ago made shoes; the man who claims to be a shoemaker today makes only part of a shoe. What was once a trade in itself is a multiplicity of trades. Once there were shoemakers, now we have Bea- ters, Binders, Bottomers, Buffers, Burnishers, Channellers, Crimpers, Cutters, Dressers, Edge Setters and several other workers at the shoe trade, and they all consider them- selves shoemakers. 18

Employees working in these specialized classifications often did not obtain meaning or satisfaction from their fragmented work tasks. Powderly also felt that bankers and owners of gold were the villains of industrial society, causing higher taxes for employees and creating monopolies that further depersonalized the individual employee.19

The KOL believed that changing the existing industrial and societal system would help accomplish a second goal, moral betterment, and increased dignity for their mem- bers. Powderly claimed that members must place their concerns on a higher ground than material working conditions, as these physical effects were but stepping stones to a higher cause, of a nobler nature the more exalted and divine nature of man, his

high and noble capabilities for good. 20 The leadership of the KOL were continually con- cerned that its members would devote too much attention to improving working condi- tions and ignore the goal of moral betterment to make every man his own master.21

The moralistic overtones of the Knights guided their membership policies, organiza- tional structure, and strategies and tactics. Because moral betterment affected all mem- bers of society, the KOL adopted a One Big Union approach encouraging people of all job types and skill levels to join the organization except professional gamblers, stock- brokers, lawyers, bankers, and those who lived in whole or in part by the sale or manu- facture of intoxicating liquors.22 Employers were also encouraged to join the KOL, the rationale being that they along with employees were being duped by financiers and law- yers, and once educated to this fact would join hands with their employees to improve society.

The local assembly, the basic unit in the KOL, could consist of employers and employees from several different trades. By 1886, there were 1,100 KOL local assemblies. However, the formal authority and power of the KOL remained centralized in the hands of the General Executive Board headed by Powderly.23 As seen later in this section, the top-down pyramid structure of the KOL later led the AFL to adopt a dramatically differ- ent organizational structure.

Strategies to Accomplish the KOL s Goals The Knights used at least four strategies to accomplish their goals. First, political action was viewed as important, particularly because the Knights felt that previous legislation had led society down the wrong road. The Knights believed that politicians were moti- vated by self-interest and therefore required careful watching. However, the Knights believed in operating through existing political parties. The KOL actively lobbied for leg- islation to restrict the immigration of foreign labor. Employers often encouraged less restrictive immigration policies as a way to expand the labor supply, thereby reducing the cost (value) of labor. The KOL lobbied for increased funding of public school sys- tems to give every individual an opportunity to become better educated.

CHAPTER 2 The History of Labor Management Relations 53

They also lobbied against the use of prison labor. At that time, companies in some states could secure contracts to use prisoners as workers, who were often paid very little in wages. Because of the lower labor costs, firms with prison contracts could expand their market share at the expense of their competitors. Occasionally, prisoners were used as strikebreakers. Thus, labor leaders complained that prisoners were given work even as honest citizens lost their jobs. Some business and religious leaders also believed that the system gave some firms an unfair advantage over others and lobbied for change. Initially resistant, many states eventually passed laws limiting the use of prison labor in the private sector. Consequently, to keep prisoners from becoming idle, penitentiaries gave their prisoners public-sector work to do.24

A second strategy was the encouragement of producer and consumer cooperatives. Unlike the socialists, the Knights did not want the cooperatives to be owned by the state. Instead, the KOL wanted employees to save enough from their wages to either purchase established operations or create their own cooperative ventures. Because factories would then be owned by the employees, KOL leaders reasoned that conflict between employees and employers would cease. Cooperatives would also enable employees to become their own masters, granting them a voice in decision making, including the determination of a fair distribution of profits.

The Knights leadership believed cooperatives would affect the established wage profit system most directly; yet they made little attempt to establish cooperatives or to financially support the approximately 100 cooperatives that were established by KOL local or district assemblies during the mid-1880s. Most of these cooperatives failed because of inefficient managers, squabbles among shareholders, lack of capital, and inju- dicious borrowing of money at high rates of interest. 25

The KOL pursued a third strategy when it actively avoided the use of strikes to obtain its goals. Indeed, the KOL s leadership often actively discouraged strikes and, in some cases, demoralized local assembly members by failing to financially support local assembly strike actions.26 Some leaders viewed strikes as a last resort that could result in labor violence and lessen the common interests of employers and employees, serving to distract members from the major goal of moral betterment. The General Executive Board set up a complicated procedure that local assemblies had to follow before they could obtain strike funds.27 Powderly believed that no employee should be able to enter a strike that would result in other employees losing their jobs; therefore, a procedure was needed to ensure that every employee possibly affected by a strike would have a voice in the strike decision.28 Yet the red tape involved in obtaining strike funds caused great dis- sension between the KOL leaders and members.29 Local assemblies that conducted strikes were often left on their own to financially support work stoppages, or KOL- approved funds arrived too late to effectively support a strike.

The Knights leadership preferred a fourth strategy as an alternative to the strike: namely, the education of its members and general citizens as to the perceived evils of the existing industrial system, as well as the Knights goals for societal improvement. Usually the leaders would meet with members of local assemblies in private sessions to inform them of the organization s goals and objectives. The emphasis on education instead of job action efforts (strikes and boycotts) is further discussed in the next section.

Reasons for the KOL s Failure and Demise Despite tremendous growth, the KOL experienced a sudden demise. One reason for its growth was a successful strike initiated by local assemblies against Jay Gould s railroads in 1885, during which the Knights showed the public that an aggressive, well-disciplined

54 PART 1 Recognizing Rights and Responsibilities of Unions and Management

group could take on one of the most powerful financiers of the day and win. Yet the effect of this strike may have been limited because neither the Knights nor the newspa- pers highly publicized the events. Another reason for the KOL s growth was its identifi- cation with the eight-hour workday, an issue of growing importance to the nation s workforce.30 However, as discussed in the next section, the KOL s actions in support of the eight-hour workday were rather weak.

The KOL s leadership operated under several faulty assumptions. First, the advan- tage of hindsight makes it clear that the KOL s leadership erred in assuming that techno- logical advancement could be halted and possibly reversed. Second, the KOL overestimated the extent to which employers and employees share common interests. Although some common ground exists, each group is motivated by self-interest, which in a profit-oriented economic system makes labor gains a cost factor to be minimized by employers in order to enhance ownership s interest. Employers are concerned about increased operating efficiency, effectiveness, and profitability, whereas employees are more concerned about job security, fair treatment, and improving working conditions.

The KOL s third faulty assumption was that all types of employees shared identical employment interests. The KOL was ahead of its time in its attempt to organize less- skilled employees a goal eventually accomplished by unions within the CIO in the late 1930s. However, employees do not all have the same employment interests, particularly if they have different skills or work classifications, or if they are employed in different industries or occupations. The one big union approach (enrolling nearly anyone who expressed an interest in the Knights) was further complicated by many immigrant mem- bers whose differences in race, language, and religion presented barriers to effective com- munication and achieving consensus regarding goals and tactics.31

Fourth, the KOL s success was further hampered by a lack of legislation protecting the rights of employees to join unions and engage in collective bargaining. Suffice it to say that the Knights, as well as other labor organizations before 1935, did not have a legal right to engage in many of the collective activities necessary for effective represen- tation of workers interests.

Finally, the inability of the KOL s leadership (particularly Powderly) to identify with members goals also presented a problem. The Knights insisted on adopting a middle class program for the American labor force, which they refused to contemplate in indus- trial, working-class terms. Almost all local assembly meetings required the members to dress up after a day s work to engage in intellectual discourse. The preference for intel- lectual deliberation over immediate action is perhaps best illustrated by Powderly s approach to the eight-hour workday movement.

The Eight-Hour Workday Movement and the Haymarket Riot One of the more important reforms desired by many employees in the late 1800s was reduc- ing the prevalent ten-hour workday to eight hours. Samuel Gompers, who was a Knights member and an official of other labor organizations (Federation of Organized Trades and Labor Unions and the Cigar Makers Union), pressed Powderly to support a nationwide gen- eral strike on May 1, 1886, in support of the eight-hour workday. Powderly was receptive to the goal of an eight-hour workday, as it would give employees more leisure time to pursue intellectual activities. However, Powderly did not join Gompers s call to action because he did not believe the length of the workday was the major problem: To talk of reducing the hours of labor without reducing the power of machinery is a waste of energy. 32

Supporters of the eight-hour workday believed that, if instituted, employers would have to hire more employees to perform the current total hours worked, thereby reducing the unemployment problem. On May 3, 1886, some workers striking over this issue in Chicago

CHAPTER 2 The History of Labor Management Relations 55

were involved in a skirmish with the police, and at least four strikers were killed. A leader of this dispute published an inflammatory circular urging Revenge! and Workingmen to Arms! The circular also indicated that a mass rally would be held the next day at Haymarket Square in Chicago. The stage was set for an event (known later as the Haymarket Riot) that virtually eliminated the KOL s effectiveness.

On May 4, 1886, approximately 3,000 people attended the scheduled meeting, which began peacefully. Police who monitored the meeting were ordered by their chief to return to the station. However, Police Captain Bonfield, whom the governor of Illinois later charged as being responsible for the incident, ordered them back to the meeting. During a speech a bomb was thrown into the gathering of police, killing 7 and wounding 60. What happened next is uncertain. The Chicago Tribune reported that anarchists and rioters poured in a shower of bullets before the first action of the police was taken. 33 Yet another report in the same article stated that the police opened fire on the crowd imme- diately after the bomb exploded. Regardless of the order of events, the police did shoot into the crowd, killing several and wounding 200.

Eight individuals allegedly responsible for the incident were arrested. Four of the eight were hanged, one committed suicide in prison, and three were eventually pardoned by the governor of Illinois after serving some of their sentences. The trial of these eight individuals contained a number of irregularities. For example, the hand-picked jury included a relative of one of the bombing victims.34 The trial never did establish who threw the bomb; however, the accused were judged guilty by the Chicago Tribune before the trial took place. More specifically, the paper stressed that the mob was led by two wirey whiskered foreigners, 35 who were Nihilistic Agitators. 36

The Knights were not directly labeled in the immediate press accounts of the strike nor in the subsequent series of unsuccessful strikes over the eight-hour workday, which involved nearly 340,000 employees. However, the strikes contributed to the organization s demise for at least two paradoxical reasons. A substantial body of public opinion did label the Knights as being involved in the strikes. Yet many of the Knights own members criti- cized their leadership for not participating enough in the events during and after the Hay- market Riot.37 Indeed, Powderly strongly discouraged strikes over the eight-hour workday, believing instead that members should write essays on the subject. Thus, the Haymarket Riot dramatically reflected the split between the KOL and the newly formed AFL led by Samuel Gompers, a labor organization that was to flourish and endure.

Origin and Goals of the American Federation of Labor The American Federation of Labor (AFL) was formed in 1886 after some of its member national unions (most notably the Cigar Makers) were expelled from the KOL.38 As pre- viously mentioned, Samuel Gompers, a major founder of the AFL, was a member of the KOL until he became disenchanted with the KOL leadership s long-range social reform philosophy. Gompers was also upset about KOL activities involving his own craft union, the Cigar Makers. In particular, the KOL tried to persuade local cigar makers to join a KOL assembly and sometimes supplied its own members to act as strikebreakers to work for employers who were being struck by the Cigar Makers (Gompers s) union.

Gompers met with KOL leaders in December 1886 to discuss these problems, but the meeting did not resolve the situation. Indeed, Gompers became incensed when a pamphlet was circulated among KOL representatives attacked Gompers personally by indicating the General Executive Board has never had the pleasure of seeing Mr. Gom- pers sober. 39 Also, in retrospect, KOL leaders blundered when they focused on recruit- ing skilled craft employees already members of existing craft unions (e.g., Cigar Makers union), a move that resulted in bitter reactions from those trade unions. The Knights

56 PART 1 Recognizing Rights and Responsibilities of Unions and Management

might have been better off (and still consistent with their goals) if they had devoted more attention to recruiting other, less-skilled employees who were not eligible for member- ship in existing skilled craft unions.40

Unlike the KOL, the AFL was not established as one big union. AFL member unions were organized along skilled craft lines, where only employees who shared a skilled trade (e.g., painters) were in the same union. (The current organizational structure of the AFL- CIO is discussed in detail in Chapter 4.) The AFL represented a federation of national unions cooperating for mutual gain while permitting each national union to maintain independent control over its own identity and operations. Craft unions such as the Cigar Makers, dominated the early stages of the AFL. The AFL influenced its member unions through its services, particularly organizing activities, philosophies, and strategies.

It is impossible to discuss the AFL apart from Gompers because in the early years, the AFL existed only in the person of Gompers and in the annual conventions. 41 With the exception of 1895, Gompers was president of the AFL from its founding in 1886 until his death in 1924. Therefore, much of the discussion of the goals, strategies, and organization of the AFL is from the perspective of Gompers, a point of view that still relates strongly to the thinking of organized labor.

Gompers placed little emphasis on intellectual betterment, and he scorned other union leaders pretensions to show labor union members the course of action they should pursue.42 Gompers criticized the KOL as representing a hodgepodge with no basis for solidarity with the exception of a comparatively few trade assemblies. 43 Gom- pers believed that the goals and organization of unions should flow directly and naturally from the members needs, not from the pronouncements of top leaders who structured unions based on their views of what should have been, rather than what was.

Gompers particularly scorned those union leaders who tried to change the existing social system through revolutionary means.44 Although Gompers was a socialist in his early years, he grew to despise this philosophy, contending that it was economically unsound, socially wrong, and impossible to apply in an industrial setting.45 Gompers believed that union members should work for equitable treatment within industrial soci- ety rather than revolt against it.

Thus, the AFL s major goal was to improve the material conditions of members through the existing capitalistic system. This goal was attacked by critics of the AFL as representing pure and simple unionism. Gompers embraced this intended attack; indeed, he seemed to devote most of his attention to ensuring that the AFL s pure and simple approach to collective bargaining successfully differentiated it from other labor organiza- tions. What can also be called business unionism represented a philosophy that the union was an organization whose business was to represent the employees interests in their dealings with their employers, just as a lawyer s business was to represent the cli- ent s interests in the courtroom.46

Pure and simple unionism had two major objectives. The primary objective was eco- nomic betterment of the organization s members. Gompers believed the truth, or essence, of labor unions should be measured in terms of their economic accomplishments:

Economic betterment today, tomorrow, in home and shop, was the foundation upon which trade unions have been built. Economic power is the base upon which may be devel- oped power in other fields. It is the foundation of organized society. Whoever or whatever controls economic power directs and shapes development for the group or the nation.47

Thus, the AFL s notion of employee dignity equated with measured economic gains. This view differed from the KOL s contention that employee dignity is attained by participation as equals in meaningful work and in other societal concerns.48

CHAPTER 2 The History of Labor Management Relations 57

Gompers also stressed a second objective of pure and simple unionism the enhancement of the capitalistic system, which could benefit both employees and employ- ers. Workers could obtain more only if capitalism continued to flourish. Without capital- ism, neither employees nor employers would receive revenues. The AFL therefore believed labor and management shared some similar interests. However, Gompers did not agree with Powderly that this situation would lead to complete employer employee agreement on all issues. Gompers realized that major differences of opinion would occur over the distribution of revenues and that employees would probably have to pressure employers to receive their fair share.

Strategies and Tactics of the AFL This realization prompted the AFL to rely on using economic pressure tactics when nec- essary to support its collective bargaining efforts. Unlike the KOL, Gompers believed the strike was a viable collective bargaining tactic: A workman must convince his employer that he is entitled to an advance in wages . Why should the wage earner work for less than living wages, which he would have to do if he could not strike? The worker is expected to continue to work at whatever wages his employer is willing to give in order to save the public from inconvenience. 49

A second AFL tactic (particularly after its headquarters moved to Washington, D.C.) was that of involvement in the political arena. Gompers, an aggressive lobbyist, attempted to translate election votes of AFL members into rewards for political friends of labor and punishments for political enemies of labor. However, political efforts dur- ing Gompers s leadership were neither intense nor widespread throughout the AFL.50

AFL political efforts were directed at influencing the existing two-party system instead of forming a third political party. Gompers felt that establishing a third party would divert too much time from fundamental collective bargaining efforts, and he was con- cerned that any new political party might fall under the socialists control.51

A third AFL tactic was to enhance the public status and reputation of organized labor and the collective bargaining process. Gompers devoted much attention to the National Civic Federation (NCF), formed in 1899 to promote industrial peace through collective bargaining. The NCF was composed of prominent labor, management, and political officials and attempted to guide public opinion toward the positive aspects of collective bargaining, including improved wages and working conditions. For example, unionized coal mines tended to have far fewer fatalities than nonunion mines. However, at least one observer of industrial relations has questioned the success of this public rela- tions tactic, believing that the NCF s rhetoric surpassed its performance. 52

Organization of the AFL The AFL s organizational structure was based on two principles. The first principle, exclusive union jurisdiction, had two normative ideas: First, workers should only be members of one union they should not join multiple unions; second, when dealing with a specific employer, one union should represent everyone who worked in that skilled craft. The AFL avoided the concept of one big union, which had proven ineffec- tive for the KOL, and insisted on using the principle of exclusive union jurisdiction. This principle rested on the twofold observation that (1) each craft or trade had unique work- ing conditions and job interests and (2) combining members of different trades into one organization would jeopardize those interests and cause unnecessary dissension. The AFL believed in one union representing each identifiable skilled craft; for example, sepa- rate unions to represent carpenters, painters, and cigar makers. Because membership in the AFL was restricted to established skilled crafts, many semiskilled workers did not meet the qualifications for membership in an AFL-affiliated union.

58 PART 1 Recognizing Rights and Responsibilities of Unions and Management

The second principle was that of decentralized authority. Gompers strongly believed the AFL was a voluntary organization held together by the mutual self- interests of its members. Unlike Powderly, who believed that centralized authority was necessary to achieve the Knights objectives, Gompers viewed the AFL as a rope of sand, dependent entirely on the acceptance of its members. Thus, the real authority rested with the AFL s affiliated national unions and their member locals. As is further discussed in Chapter 4, these principles continue to influence contemporary union organizations.

Gompers was a most active union organizer who claimed to have helped in organiz- ing 28 unions representing different crafts such as painters, papermakers, firefighters, and post office clerks.53 Much of this effort was due to Gompers s view of himself as one of the boys he took pride in his ability to socialize with the members on their

own terms. Despite Gompers s efforts, the AFL s early growth was not spectacular. Its original

membership of 150,000 had increased to only 250,000, six years later. The initial slow growth was due to the counterattack of industry (discussed in the section on World War I to World War II), the generally repressive attitude of the government and the courts toward collective employee activities, and the difficulties created by the depression of 1893. Yet Gompers could view these modest membership gains as a tribute to the AFL s powers of stability and permanency. 54

From its formation until World War I, the AFL was directly or indirectly involved in three prominent events: the Homestead and Pullman incidents and the formation and demise of the IWW.

The Homestead Incident The Carnegie Steel Works, located in Homestead, Pennsylvania, was ironically the scene of one of the more violent episodes in labor history. The founder of the works, Andrew Carnegie, was a renowned philanthropist who gave every indication of being receptive to organized labor. In one article, written before the Homestead Incident, Carnegie stated that a strike or a lockout was a ridiculous affair because it represented only a test of strength instead of determining what was fair and just. 55 Carnegie also believed that labor management problems would occur in large firms run by salaried managers instead of owners because the managers had no permanent interest in the desires of the employees.

Carnegie s remarks proved prophetic in the Homestead Incident of July 6, 1892. Although many have labeled the incident a strike, one labor historian has noted that no-strike vote was ever taken by the membership, and the employer prohibited the employees from working, which would be more consistent with an employer lockout.56

During negotiation between the mill and the Amalgamated Association of Iron, Steel, and Tin Workers (an affiliate of the AFL), a 15-foot-high solid board fence, topped with barbed wire, was constructed around the building. Andrew Carnegie was vacation- ing in Scotland during negotiations and had delegated construction of the fence to a manager named Henry Clay Frick. The union labeled the structure around the steel mill Fort Frick. Union members were undoubtedly aware that Frick was negotiating with Pinkerton detectives as a potential strike intervention force at the same time nego- tiations were being conducted with the union. Frick intended to use Pinkerton detectives inside the facility to protect the company s property and as strikebreakers to perform work should a strike occur.

On June 30, 1892, the company made its last offer, which represented a substantial reduction of previous wages; when it was rejected, the company locked out its 4,000

CHAPTER 2 The History of Labor Management Relations 59

employees.57 Workers then began an around-the-clock surveillance of the plant. One newspaper account indicated, The line of pickets covers the river, roads, and railways so tightly that no stranger can enter the town without being known to the strikers. 58 On the morning of July 5, 300 Pinkertons gathered at Ashtabula, Ohio, and proceeded by rail to Youngstown, Ohio. They then traveled up the Monongahela River by barge. On July 6, word had reached those in Homestead that the Pinkertons would be entering the plant from the river. Six thousand people lined the river banks at 2:00 A.M., and employees pre- pared two small cannons, one on each side of the river, to be used on the Pinkertons.59

The Pinkertons attempted to land by the company s beach at 5:00 A.M.; shots were exchanged, and three Pinkertons were killed. Shooting by both sides continued for 12 hours, with an additional seven townspeople killed and 50 wounded. The Pinkertons sur- rendered to the townspeople and were forced to run a bloody gauntlet before being locked up for their protection. The townspeople had taken weapons from the Pinkertons, a situation that resulted in 8,700 National Guard members being sent to secure the town. There were few further attempts to occupy the mill by Pinkertons or strikebreakers.60

The incident ended for all purposes approximately 5 months later (November 20, 1892) when the Amalgamated lifted its prohibition against returning to work.

Homestead has been labeled the Waterloo of unions in the steel industry. After the Homestead Incident, membership in the national union dropped from 24,000 in 1892 to 8,000 in 1894. On the local level, only 800 of the original Homestead employees were reinstated. Carnegie s mills showed a dramatic increase in profits when the union was eliminated, a fact that encouraged other employers to take an anti-union stance.61

Although Homestead represented a victory for management, the AFL and organized labor did benefit to some extent from the situation. First, Gompers demonstrated to existing and potential union members his very real concern about the Homestead situa- tion.62 The funds contributed by the AFL to help defray the employees legal expenses also demonstrated that the AFL was interested in helping its member unions in a mate- rial sense.63 Finally, the Homestead situation received more sympathetic newspaper cov- erage than did the Haymarket Riot. The press charged Carnegie with provoking the situation. For example, the Chicago Tribune strongly criticized the company s use of Pin- kerton guards and contended that Carnegie s company, as well as any large industrial organization, has duties and obligations toward society which it must not forget, and not the least of them is to do all in its power, and make all of the concessions it can, to preserve civil and industrial peace. 64

The Pullman Strike In the late 1800s and early 1900s strikes were common in the railroad industry. For example, the Great Upheaval of 1877 involved independent railroad employee associa- tions protesting wage cuts. It was a bitter and violent confrontation in which more than 100 employees were killed and several hundred were badly wounded.65

Yet the Pullman Strike of 1894 assumed significance because of the principal per- sonalities involved (Eugene Debs and George Pullman) and an organization (the Ameri- can Railway Union (ARU)) that had the potential to challenge the AFL for union members. It also approached being a revolutionary strike in the United States, progres- sing from a nationwide strike in one industry to nearly involving all industries.

First, some background: George Pullman recognized the need for comfortable rail cars suited to long distance travel and he decided to fill that need. Consequently, Pull- man, who had experience as a carpenter and refurbishing other firm s passenger cars, began making railroad cars. He improved upon existing sleeper cars and offered the first dining car in the late 1860s. However, instead of simply selling railroad cars, he

60 PART 1 Recognizing Rights and Responsibilities of Unions and Management

usually rented them to the railroads, complete with staff. Thus, conductors, cooks, wait- ers, and porters usually were not employed by the client railroads, but were employed by Pullman.66 For more about the African-American employees who worked for Pullman and the Civil Rights movement, see the Labor Relations in Action Box.

As a result of the 1893 depression, the Pullman Palace Car Company laid off 3,000 of its 5,800 employees and cut wages 25 to 40 percent. Both actions were important because they occurred in the milieu of Pullman, Illinois (now a part of Chicago) a company town where the factory was located. This town represented a paternalistic social experiment by George Pullman. The company owned all the buildings, and houses in the town, which were built to provide living space for company employees, who were not allowed to own their own homes in the town.67 After wages were cut, the company did not reduce housing

LABOR RELATIONS IN ACTION Unions and the Civil Rights Movement

When George Pullman sought workers for his passen- ger cars in the mid-to-late 1800s, he found a ready source of labor, already experienced in pleasing others: Former slaves. For these workers, employment at Pull- man was a position of some status, although low wages had to be supplemented with tips and White passengers were sometimes condescending.

Prior to the 1960s, work in many parts of the coun- try was segregated based on race. Some jobs (e.g., train conductors) were generally reserved for Whites, while other jobs were reserved for Blacks and other minorities (e.g., train porters, baggage handlers). Unions often reflected the social norms of their day: Some refused to admit minority-group members. Others established auxiliary unions for Blacks and/or women workers.

Some union leaders, particularly in the CIO, were more open to the idea of admitting minority-group members because they felt that segregating the races only allowed managers to pit one group against another (e.g., threatening White workers with layoff and replace- ment with lower paid Blacks; using minorities as strike- breakers when White unions went on strike). Even when national union leaders embraced the idea of equal opportunity, local unions occasionally thwarted their efforts, as happened with the United Automobile Workers (UAW) in the late 1940s: Whites in a few fac- tories walked off the job rather than allow Blacks to do White work.

One union leader who worked to bring about equal employment opportunity for African-Americans was A. Phillip Randolph. A Socialist in his youth, in 1925 he was elected president of a labor union called the Broth- erhood of Sleeping Car Porters, which consisted of Blacks who worked for the Pullman Co. The following year Congress passed the Railway Labor Act, which regulated labor relations in the railroad industry. How- ever, because Pullman employees technically did not

work for the railroads (who merely rented cars from Pull- man), these porters were not covered under this new law. Randolph lobbied successfully to get the law chan- ged (1934) and then successfully negotiated a contract with Pullman Co. (1937) that provided pay raises and a shorter work week.

By 1940, U.S. defense industries were boosting production out of concerns that the country might be dragged into World War II. Yet Blacks were ineligible for many jobs due to racial segregation, which prompted some protest marches in selected cities. Randolph and other Civil Rights leaders proposed a March on Washington, D.C., where African-Americans would argue for equal employment opportunity. The march was called off, however, because President Roosevelt issued an Executive Order forbidding racial discrimina- tion in defense industries. Later, Randolph and others persuaded President Truman to issue an executive order abolishing racial segregation in the armed ser- vices. In the 1950s, he lobbied to end segregated schools and to promote equal voting rights for all races, forming an alliance with Rev. Martin Luther King, Jr. In 1963, over 20 years after he had first pro- posed it, he helped organize the March on Washington, D.C., which promoted passage of the 1964 Civil Rights Act. This law forbade discrimination in employment, access to job training, union membership, and other aspects of society. Randolph s incessant efforts had finally brought the sweeping legal changes he had sought over a 40-year career.

SOURCES: Cornelius L. Bynum, A. Philip Randolph and the Struggle for Civil Rights (Urbana, IL: University of Illinois Press, 2010); Venus Green, Not your average frater- nal organization: the IBPOEW and labor activism, 1935 1950, Labor History, 53(4), 2012, pp. 471 494; Kevin Boyle, There are no Union Sorrows that the Union Can t Heal : The struggle for racial equality in the United Automobile Workers, 1940 1960, Labor History, 36, 1995, pp. 5 24; Jervis Anderson, A. Philip Randolph: A Biographical Portrait (New York: Harcourt, Brace, Jovanovich, 1973).

61

rents or charges for other services. The wage cuts resulted in some employees having a net two-week pay of $1 to $6 during the winter of 1893 to 1894.

This situation generated much hostility among employees, many of whom were members of the ARU, formed in 1893. The ARU was completely independent from the AFL and competed for members with the AFL-affiliated railway craft unions. The ARU accepted any white employee, regardless of specific job classification, so that railroad employees could present a unified front to the railroad companies.68 The ARU was attractive to many employees because its inclusion of all types of railway workers served to counter employers previously successful strategy of creating dissension among the dif- ferent specialized craft unions by playing one against the other in wage negotiations.

The ARU s local unions had sole authority to call a strike, and the Pullman strike began on May 11, 1894. Eugene Debs, the ARU s leader, came to Chicago fresh from a labor victory: The Great Northern Railroad in Minnesota and North Dakota had tried to impose substantial wage cuts, but Debs led an ARU strike and, in April, 1894, got most of the cuts rescinded. Debs informed the Pullman strikers that the strike should repre- sent a protest against philosophical issues rather than just for mere material betterment: The paternalism of Pullman is the same as the interest of a slave holder in his human

chattels. You are striking to avert slavery and degradation. 69

At first the strikers followed Debs orders not to damage railroad property. The ARU instead adopted a strategy of not operating any train that included a Pullman sleeping car the common practice was to cut these cars from the train and move them to the side tracks. If any employee was discharged for this action, then the entire crew would quit, leaving the train immobilized. This tactic, employed in 27 states and territo- ries, was intended to make railroad carriers put pressure on Pullman to agree with the ARU s bargaining position.

The railroad employers rallied behind Pullman and countered the union s strategy by hiring strikebreakers. Railroad employers also decided to include federal mail on nearly every train as a way of getting support from the federal government to ensure the mail was delivered. Owners were able to obtain a labor injunction on July 2, 1894 (subsequently upheld by the U.S. Supreme Court), to prevent any employee from inter- fering with the delivery of the mail. Employees could no longer engage in their strike strategy of rendering the trains inoperative. Some 16,000 troops, dispatched by President Cleveland to enforce the injunction, either delivered the mail and operated the trains or protected strikebreakers so that food and other perishable items could be delivered throughout the country.

The strike then took a particularly ugly turn when employees burned at least 700 railroad cars in Chicago on July 7, 1894. Management was also criticized for this incident for failing to take minimum security measures, such as guarding or locking the railroad cars, to prevent such damage. There were allegations that some management officials may have even provoked the incident to receive additional support from the government. This possibility is suggested because all the burned cars were old (the newer, more expensive Pullman sleeping cars were not on the property), and very few of the cars were loaded with any product.70

The resulting negative public opinion and increased action by federal troops forced Debs to seek Gompers s cooperation. Debs wanted Gompers to call a national strike to help enforce Debs s last offer to settle the strike, which was simply management s agree- ment to reinstate the striking employees. Gompers refused to support Debs, contending that he did not have the authority to call a general strike. Gompers also believed that the proposed settlement would, in effect, admit to the public that the ARU had failed to win material benefits for its members. Much of Gompers s reluctance was based on his view

62 PART 1 Recognizing Rights and Responsibilities of Unions and Management

of Debs as being a leader of irregular movements and lost causes. 71 However, Gom- pers s inaction might also have been caused by his desire to eliminate a potential rival to the AFL and bolster his reputation in the business community.

Debs was eventually convicted and sentenced to federal prison in Atlanta, Georgia, for failing to abide by the court s labor injunction. In prison, Debs read books on social- ism and began to advocate the election of a government that would be responsive to the working classes by taking control of major industries including railroads. Eventually, Debs ran for the U.S. president as the Socialist Party s candidate. Meanwhile, the ARU, which had grown to 150,000 members in one year, quickly faded from existence. Orga- nized labor did learn an important lesson from the Pullman strike: It would be difficult to alter existing terms and conditions of employment when confronted by a persistent, if not exceptionally stubborn, owner (Pullman), the federal government (troops, injunc- tions, legislation), and negative public opinion (fueled by exaggerated and dramatic newspaper articles).

The Industrial Workers of the World The Industrial Workers of the World (IWW) was formed as an alternative to the AFL on June 27, 1905. William Big Bill Haywood, one of the initial organizers of the IWW, proclaimed the organization s goals in calling the convention of 209 delegates to order with the following remarks:

Fellow Workers . We are here to confederate the workers of this country into a working class movement that shall have for its purpose the emancipation of the work- ing class from the slave bondage of Capitalism. The aims and objects of this organi- zation should be to put the working class in possession of the economic power, the means of life, in control of the machinery of production and distribution without regard to capitalist masters.72

The significance of the IWW as a labor organization is that it represents perhaps the most serious effort in U.S. labor history to organize workers on the basis of a radical political ideology. The initial goal of the IWW was to overthrow the existing capitalistic system by any means necessary, based on the belief that employers and employees had nothing in common. The IWW s radical political ideology was a marked departure from the pure and simple unionism approach advocated by the AFL, which extolled the vir- tues of the capitalist system. While the KOL had also stressed that the existing wage and profit system needed to be reformed, the KOL believed that employees and employers shared similar interests and that change should be peaceful and gradual. The IWW, on the other hand, had no reservations about advocating the use of any method that would result in the quick destruction of capitalism; thus, some IWW leaders saw the union as a stepping stone to a communist society where all private property would be abolished.

The IWW also opposed any group that supported capitalism. This approach placed the IWW in direct opposition to the AFL, not to mention most other established orga- nizations in society. The IWW regarded the AFL as an extension of the capitalist class because it advocated pure and simple unionism, which was dependent on capitalism.73

Haywood believed that Gompers had sold out the ARU when he failed to support Debs in the Pullman strike, and he viewed Gompers as an arrogant, power-hungry leader.74

Thus, the IWW appeared to have two general enemies. One was capitalism. The second was the AFL. Unlike IWW leaders, AFL officers did not divide society into a ruling class and laboring class dichotomy. Thus, the AFL did not embrace the idea of a working-class movement of hourly employees uniting to overthrow capitalism.

CHAPTER 2 The History of Labor Management Relations 63

An analysis of the IWW reveals that establishing goals can be an easier task than accomplishing them. The IWW never did establish an effective organization; in fact, its leaders never made up their minds about precisely what kind of organizational structure it should adopt.75 Most of the IWW officials agreed with Haywood s objective of orga- nizing every man that earns his livelihood either by his brain or his muscle. 76 This was similar to the One Big Union approach previously tried by the KOL. However, major differences arose among IWW leaders over how to organize one big union into an effec- tive organization. Some members felt that the IWW should work slowly, for example, infiltrate the established AFL unions and gradually persuade members that the IWW cause was best. Others felt that this temporary acceptance of collective bargaining with the capitalists made employees only better paid slaves and would hinder the quick and necessary overthrow of the capitalistic system.77 In addition to organizational differ- ences, there were at least four other reasons for the decline of the IWW, reasons that served as negative lessons for contemporary organized labor.

1. Lack of permanent membership and financial base. A large proportion of the IWW consisted of itinerants individuals who either were unemployed or traveled from job to job, particularly in the agriculture, mining, and lumber industries. This contributed to an unstable financial base. Many IWW leaders thought the members dues should not be mandatory but instead should be paid out of a voluntary inner conviction. For example, in 1907 only 10,000 members out of the total 31,000 members paid any dues. The lack of revenues resulted in meager strike funds, and by 1909 the organization was deeply in debt.

2. Inability of the IWW to appeal to members interests. The IWW did not consider the short-run material interests of its members. Its major emphasis on long-term political and philosophical goals and its focus on propaganda as a means to achieve these goals failed to demonstrate tangible signs of success on a continuous basis.78

The average trade unionist, inside or outside the IWW, had no strong desire to help the underdog. Most employees were too focused on trying to survive them- selves. For example, while many men worked full time and were considered family breadwinners, it was sometimes financially necessary for their wives and children to also hold jobs in factories, work at home (e.g., sewing, laundry), or sell produce from gardens. Such families had little time for radical rhetoric.79

3. Identification of the IWW with sabotage and violence. The relationship between the IWW and sabotage and violence was ambiguous. The IWW in 1914 became the only labor organization ever at its convention to officially endorse sabotage as a legitimate labor tactic. Yet no local, state, or federal authority could ever establish legal proof of any IWW-instigated violence. A strike in 1917 closed the logging camps and sawmills of the Pacific Northwest but did not record any violent acts of sabotage by the IWW.80 The IWW often stated that sabotage does not always equal destruction of equipment. For example, employees could sabotage a company by malicious obedience (following the work rules to the letter, thereby creating a

slowdown) and by informing customers that the company s product was of inferior quality. However, at least one article in the IWW s paper, the Industrial Worker, indicated how emery dust and ground-up glass could cause the destruction of machinery. Evidence suggests that the IWW s leadership did not generally advocate physical violence.81 Yet, there are some accounts of incidents in which IWW mem- bers and leaders pledged a life for a life or an eye for an eye. 82 At a minimum, it would appear that the IWW did not actively discourage its link with violence. Given the widespread reputation for violence and inflammatory rhetoric that accompanied many IWW strikes, many workers distanced themselves from the union.

64 PART 1 Recognizing Rights and Responsibilities of Unions and Management

4. Alienation of the news media and government officials. The newspapers enhanced the IWW s reputation for violence by labeling members as desperate villains who set fire to wheat fields, drove spikes into sawmill-bound logs, derailed trains, destroyed industrial machinery, and killed policemen. 83 Part of this negative image was enhanced by leaders of IWW factions who would damn one another in the press. The IWW also engaged in several free speech fights soapbox speeches in local communities. This strategy, which has since been copied by various protest groups, including students, relied upon there being more participants than there were available jail spaces. City officials, faced with such a situation, typically allowed the unlawful demonstration to continue.84 In many of these speeches, members of the IWW would shout anti-social comments such as There is no God. 85

The press, never enthusiastic about unions in general, reserved a special hatred for the IWW. One editorial against the IWW stated: They would be much better dead, for they are absolutely useless in the human economy; they are the waste material of crea- tion and should be drained off into the sewer of oblivion there to rot in cold obstruction like any other excrement. 86

The IWW also remained alienated from the government. It did not actively use the existing political system because many of its transient members could not meet voter registration requirements. The IWW also incurred the wrath of the federal government when it opposed American involvement in World War I, proclaiming instead that the war represented a plot to allow capitalists to profit from the sale of war materials. Mean- while, they said working-class individuals served as soldiers in the armed conflict. IWW- led strikes reduced lumber and copper production for the war effort.

Opposition to the war and the Soviet revolution in Russia in 1917 led to what was called the Red Scare: A general concern that a communist revolution would happen in the United States. Several states passed criminal syndicalism laws. These laws outlawed the promotion or use of organized violence, sabotage, or terrorism to accomplish indus- trial aims or social revolution. Sedition laws such as the federal Espionage Act of 1917 and the Sedition Act of 1918 prohibited interfering with the war effort, spreading false rumors, advocating revolution, or incitement to resist lawful authority. Red Scare fears were also fueled by an anarchist letter-bomb campaign, the Boston police strike and an IWW-led general strike in Seattle in 1919. The government responded to these activities by creating a Federal Bureau of Investigation that aided in the arrest of more than 100 IWW leaders for sedition. Many foreign nationals were deported and hundreds of U.S.-born IWW leaders were sentenced to prison terms ranging from 5 to 20 years. In effect, the IWW ceased to be a major player on labor s stage after World War I. The organization went into a steep decline in the 1920s. The IWW was rejuvenated during the 1960s, but today it has only a few thousand members.87

The onset of World War I found the AFL confronting several challenges. The AFL had been the first national labor organization to withstand a severe economic depression, a hostile press, reluctant or hostile employers, and three rival labor organizations (KOL, ARU, and IWW). Yet the AFL also faced internal pressures from at least three sources: (1) socialists and other related political groups that advocated independent political action and the organization of low-skilled industrial employees, (2) pacifist members who wanted the AFL to remain neutral or take a stand against the war, and (3) member unions that became involved in jurisdictional disputes caused by increased specialization and technological change (e.g., the plumber was no longer responsible for the complete installation of the water and heating system for a building). Perhaps the most lingering concern of the AFL was that the largest proportion of unrepresented workers in the labor force, low- or semiskilled industrial employees, remained essentially outside the ranks of organized labor.88

CHAPTER 2 The History of Labor Management Relations 65

World War I to World War II

The period from World War I to World War II witnessed several important trends:

1. The inability of unions, particularly the AFL, to make substantial membership gains in the 1920s.

2. The further development of employer strategies to minimize union growth. 3. Increased union concern over organizing semiskilled industrial employees, which led

to a bitter rivalry between the AFL and the CIO.

Union Organizing after World War I: Problems and Prospects The AFL overcame its initial reluctance toward participating in World War I and even- tually pledged its cooperation when the United States became directly involved in the war. The government, aware of the need to ensure uninterrupted production of war materials, responded to the AFL by attempting to meet some its concerns. Government agreements with the AFL provided for the enforcement of trade union standards in all government contracts; labor representatives were appointed to all government agencies, including the War Labor Board; and Gompers was made a member of the Advisory Commission of the National Council of Defense. In short, organized labor was elevated to a more prominent status than had ever been witnessed before. Accordingly, the AFL had a sizable growth in membership during this period (an increase from 2.37 million members in 1917 to 3.26 million members in 1919). Legislative gains also occurred. A long-time AFL goal of severely restricting the number of new immigrants entering the country was accomplished.

The rather sharp increase in the cost of living that followed World War I, coupled with the newly recognized status of labor, resulted in an unprecedented number of strikes such as the Seattle General Strike of 1919, along with other strikes by actors, New York waterfront employees, and coal miners. The most widespread strike in 1919 occurred in the steel industry, where some 367,000 employees walked off the job in 70 major cities.

This strike actually resulted in a setback to organized labor in the steel industry. Many possible factors contributed to the setback. Some were notably similar to those found in the Homestead and Pullman incidents, whereas others reflected a typical situa- tion unions faced in the 1920s and early 1930s. Of crucial importance to the outcome of the 1919 steel strike were internal union difficulties: an organizing campaign conducted by 24 unions instead of one common industrial union; improvised leadership rather than a consistent union approach to the issues; and poor financial resources. U.S. Steel was also successful in withstanding the strike by using strikebreakers and maintaining strong ties with other companies and social institutions, such as the press and church leaders. The strike ended without a labor agreement, and another 15 years would elapse before organized labor would make any significant progress in organizing the steel industry.89

Although the steel industry did not reflect all industrial reactions to collective bar- gaining, apparently many other unions were similarly powerless to organize companies such as U.S. Steel, who firmly believed unions were not in the firm s best interests. For example, another 1919 strike almost paralyzed the coal industry when no miners returned to work until President Wilson persuaded them to accept a temporary wage increase and submit all other issues to the newly appointed Bituminous Coal Commis- sion. In 1920, the commission awarded increases ranging from 20 to 30 percent, but this was the last victory for mine employees for several years.

66 PART 1 Recognizing Rights and Responsibilities of Unions and Management

LABOR RELATIONS IN ACTION The American Labor Movement as Portrayed in Fiction

One way to learn about U.S. labor history is through works of fiction: The Labor Novel. While fiction is rarely completely historically accurate, it can give a sense of the problems that working-class families went through and why workers embraced certain solutions (e.g., labor unions, socialism, or violence or all three). A textbook gives the broad sweep of history; a novel can show the rich details of particular historical events as seen through the eyes of the novel s central characters.

It is good to consider the historical setting of a work of fiction as well as the context in which the person created the work; sometimes, a novel says as much about the time in which it was written (e.g., a twenty- first-century feminist viewpoint) as it does about the time in which the novel was set (e.g., early 1900s). Also the use of a particular genre of fiction, such as a detective story, to discuss labor relations may reflect the popularity of the genre at the time it was written.

Works of fiction tend to follow a few broad themes. One theme is the struggle between the impoverished workers and the rich unsympathetic industrialist. Another theme is the conflict within the family of the industrialist, as some family members may sympathize with the working classes. A third common theme is that of the honest union member fighting corruption (or gangsters or communists or all three) within his or her own union. A fourth theme is that of a manager, detective, police officer, or consultant fighting to keep a corrupt union from coming into a business or town. A fifth theme is that violent strikes are either inevitable or futile and that only through reason and compromise can labor management disputes be resolved. Finally, in some novels, there is the rejection of conventional social norms (including the American dream of mar- riage, having employment, and owning one s home) in favor of life as a revolutionary labor leader and the con- sequences that such a decision brings, both profes- sionally and personally. Often works of fiction are thinly disguised descriptions of actual people, unions, or events. If you read one of the following novels, you might do a little research and ask yourself how closely it relates to actual labor events.

Here are a few titles that you may find interesting and informative (some older titles are available as full- text, free e-books at Web sites such as www.books. google.com/, http://onlinebooks.library.upenn.edu/, or http://www.classicreader.com/):

Auch, Mary Jane (2004). Ashes of Roses. Random House.

Bullard, Arthur [Evans, Arthur, pseud.] (1913). Comrade Yetta. New York: Macmillan. Cantwell, Robert (1934). The Land of Plenty. New York: Farrar & Rinehart. Coleman, Louis (1931). Lumber. Boston: Little, Brown. Coleman, Lynn A. (2005). Fighting for Bread and Roses. Kregel. Conroy, Jack (1933). The Disinherited. New York: Covici-Friede Press. Farrell, Mary Cronk (2004). Fire in the Hole! New York: Clarion Books. Fast, Howard (1962). Power. New York: Doubleday. Foote, Mary H. (1894). Coeur d Alene. Boston: Houghton Mifflin. Garland, Hamlin (1903). Hesper. New York: Harper. Gilfillan, Lauren (1934). I Went to Pit College. New York: Viking Press. Grey, Zane (1920). Desert of Wheat. New York: Grossett & Dunlop. Haddix, Margaret P. (2007) Uprising. NY: Simon & Schuster. Kemske, Floyd (2000). Labor Day. Catbird Press. McCardell, Roy L. (1899). The Wage Slaves of New York. New York: G. W. Dillingham Co. McKenney, Ruth (1939). Industrial Valley. New York: Harcourt, Brace. Merwin, Samuel (1901). Calumet K New York: Macmillan. Newell, Arthur (1905). A Knight of the Toilers. Philadel- phia: F. L. Marsh. Perez, Norah A. (1988). Breaker. Houghton Mifflin. Phelps, Elizabeth Stuart (1871). The Silent Partner. Boston: James R. Osgood. Pinkerton, Allan (1877). The Mollie Maguires and the Detectives. Reprint, 1973, New York: Dover. Scott, Leroy (1905). The Walking Delegate. New York: Doubleday. Sinclair, Upton (1917). King Coal. self-published. (396 pages). Steinbeck, John (1936). In Dubious Battle. New York: Covici, Friede. Weber, K. (1996). Triangle: A Novel. Farrar, Straus, & Giroux. Wright, Harold B. (1921). Helen of the Old House. New York: D. Appleton & Co.

For general essays and commentary on labor unions, workers lives, and strikes as portrayed in fic- tion, see one or more of the following books: (1) Andrew Lawson, Class and the Making of American

67

During the early 1920s, there was a series of rail strikes. Railroads played a vital role in society at that time, transporting both passengers and goods; thus, a major railroad strike could significantly harm the economy of a geographic region. Some strikes dealt with economic issues such as wages and pensions, while others were recognition strikes: Strikes undertaken to force management to accept and deal with ( recognize ) a labor union. Because of the importance of railroads to interstate commerce, members of Con- gress decided that a labor law was needed to regulate union-organizing and labor dis- putes. Therefore, representatives from the major railway lines and their unions met to negotiate over the terms of such a law. Consequently, in 1926 Congress passed the Rail- way Labor Act. The provisions of this law are discussed in Chapter 3.

Despite increased status and militancy, something went wrong for organized labor in the 1920s; the Golden Twenties for the majority in the United States was a dreary decade for labor both for hourly employees in terms of real income and for labor unions in terms of membership.90 Between 1920 and 1924, total union membership declined from 5.11 million to 3.6 million; membership in AFL unions dropped from 4.078 million to 2.866 million. By 1930 total union membership had declined to 3.4 mil- lion, and AFL membership dropped to 2.7 million.91 This decline was caused by at least two major factors: (1) aggressive opposition from employers and (2) organized labor s inability to overcome anti-union sentiment among potential union members.92

Opposition from Employers Concerned with the increased status given labor during the war, employers actively engaged in efforts to roll back union membership gains, beginning in the 1920s and con- tinuing through the 1930s. These tactics took the form of either (1) aggressive opposition toward established labor unions or (2) providing an acceptable nonunion alternative to independent unions.

Employers actively opposed unions by supporting the open-shop movement, which is discussed in more detail in Chapter 4. The stated purpose of the open shop was to ensure that each employee had the freedom to determine whether he or she would join a union. Thus, an open-shop arrangement prevents a union from negotiating a contract clause that forces workers to join the labor organization. Another rationale for this movement, also called the American Plan, was employers desire for employees to adhere to the traditional American value of rugged individualism instead of the foreign, subversive, and corrupt principles of labor unions. Many employers

equated the attainment of an open-shop status with the absence of an independent union controlled by employees.

Other tactics were also used by employers to prevent employees from joining or forming an independent union. For example, some employers would hire industrial spies to identify which employees had pro-union sentiments. Once identified, employees would then be discharged and possibly blacklisted, meaning that their names would be

Literature: Created Unequal (New York: Routledge, 2014); (2) Fay M. Blake, The Strike in the American Novel (Metuchen, NJ: Scarecrow Press, 1972); (3) Laura Hapke, Labor s Text: The Worker in American

Fiction (New Brunswick, NJ: Rutgers University Press, 2000); or (4) Eric Schocket, Vanishing Moments: Class and American Literature (Ann Arbor: University of Michi- gan Press, 2006).

68

placed on a list that was circulated to other employers in the area, who would then refuse to hire anyone whose name appeared on the list. Employer violence against participants in union-organizing drives was also a potential strategy to counter unions during this period.93

As employers gained experience using anti-union tactics, a refinement of the open shop or American Plan appeared in the 1930s, called the Mohawk Valley Formula. This approach formulated specific steps that could be used by any employer to defeat an orga- nizing drive or strike action by a union. The Mohawk Valley Formula consisted of the fol- lowing steps: (1) form a citizens committee in the community to support the employer s position in the labor dispute, (2) label the union leaders as outside agitators, (3) stir up violence or the fear of violence, (4) report union leaders and meetings to the police and/ or have a state of emergency declared by public authorities, (5) organize a back-to-work movement encouraging individuals to resume their normal work duties, and (6) have the back-to-work employees march into the plant protected by armed police.94

Employers also countered unions by providing an alternative model to unionism. The 1920s saw widespread employer paternalism, a management style in which the employer was viewed as the wise parent figure and employees were expected to rely upon the employer to know what was in their best interest and trust the employer to protect employees interests. Paternalistic practices implemented by some companies included free lunches, baseball fields, vacations, pensions, and employee counseling.95

Employers felt that employees receiving these benefits would be indebted to the employer and realize that a union would be unnecessary.

An employee representation plan (also called a company union), provided another substitute for an employee-controlled independent union. Employee representation plans (ERPs) covered as many as 1.5 million employees and appeared superficially similar to independent unions in that employee representatives (typically selected by the employer) would discuss working conditions with management officials. ERPs differed from inde- pendent unions in four major respects.

First, the employer typically controlled the type of subjects discussed with ERP leaders. Second, independent unions had more autonomy than ERPs. Employers strongly influenced the decisions of ERPs; provided the funding, space, and time for their operation; and management could veto any decision made by the joint labor management committee. Third, ERPs were usually limited to a single facility, and employees under ERPs could neither press for work rules that would remove unfair competition from other facilities nor push for legislation at the local, state, or federal level. Fourth, ERPs did not engage in economic pressure tactics such as strikes or boycotts to persuade the employer to modify decision outcomes.96

ERPs did provide employees more communication with management than existed in their absence and, most importantly, most employees did not fear discharge for partici- pating in an organization created by their own employer.

Another anti-union weapon used by employers was that of paying employees in company scrip (company-created currency) instead of U.S. currency. Scrip often emerged in isolated locations where one employer (e.g., a coal mining or lumber firm) owned the land and provided the infrastructure and most business services. In a com- pany town the scrip could be used at the employer-owned stores and to pay rent for employer-owned housing. How could scrip serve as an anti-union weapon? Imagine this scenario: managers suspected two employees of being union organizers. These

CHAPTER 2 The History of Labor Management Relations 69

workers received a triple punishment : (1) they lost their jobs, (2) their families had to move from their company-owned houses (leaving town because they were also black- listed), and (3) whatever modest savings they had accumulated in scrip became worth- less, because the company-owned stores would no longer do business with them and stores in other towns would not accept the scrip as legal tender. Thus, in this scenario, the two pro-union workers and their families would be forced to move away, penniless.

Independent merchants lobbied against company scrip and the practice was out- lawed in some states; it came under increasing federal scrutiny and skepticism by regu- lators in the 1930s after the National Industrial Recovery Act (NRA) and the Fair Labor Standards Acts were passed and by the end of the 1940s almost all such practices had ended in the United States.97

Labor s Inability to Overcome Anti-Union Sentiment The lack of organizing gains during the 1920s also has to be attributed to the anti-union sentiment of potential union members and the activities and attitudes of organized labor. The number workers in new types of industries was growing and these workers some of whom were white-collar sales clerks and office workers often felt that unions were irrelevant to their work experience. Part of this problem may have been caused by the relatively good economic conditions that prevailed throughout most of the 1920s: While job insecurity may have deterred some employees from joining unions in the

face of employer opposition, many of them apparently felt that unions were no longer as necessary as they had formerly believed them to be. What profit strikes or other agi- tation for collective bargaining when the pay envelope was automatically growing fatter and a more abundant life seemed to be assured with our rapid approach to the final tri- umph over poverty? 98

There was also a public perception fostered by employers and media accounts that much of organized labor was corrupt and subject to control by socialists and commu- nists, even though many AFL leaders were consistently anti-communist. Racketeering had become a feature of some local union employer relationships. For example, in one incident a union official signed a two-paragraph agreement with three major employers guaranteeing no wage increase for three years and requiring all employees to join the union or be discharged. None of the employees had ever contacted the union about join- ing, nor did they ever see a union official during the life of the contract. This type of sweetheart contract was often coupled with financial kickbacks from the employer to the union official, meaning the employer paid the union official a portion of the labor cost savings achieved by the employer.99

Some labor unions were also accused of harboring political radicals. Many promi- nent union leaders would occasionally accept help from almost any group that would devote time and effort in organizing employees, believing that they could control these political elements once the local union had been established. However, union leaders sometimes overestimated their ability to control such elements. One former president of the Steelworkers Union recalled how communists could dominate local union meetings by using the V technique, whereby the leader would find a seat at the center of the audi- torium in about the second or third row. Then the following would ensue: A few rows back, two of his associates would locate about ten seats apart, and this same pattern would be followed all the way to the rear of the hall. When the chief spokesman opened debate, his line would then be parroted all the way through the V behind him, giving an illusion of widespread strength. The radical groups would also wait until other union members, tired and bored, had gone home before trying to push through their own proposals. 100

70 PART 1 Recognizing Rights and Responsibilities of Unions and Management

Organized labor, particularly the AFL, devoted much of its attention during the 1920s to overcoming its negative public image.101 These efforts detracted from active organizing efforts, particularly because Gompers had lost much of his former physical enthusiasm for this activity. In 1924 Gompers died, and his successor, William Green, did not revive any major organizing activities, as he focused on maintaining the status quo of the AFL s existing organization in an adverse atmosphere.102 The AFL s prefer- ence for simply maintaining the status quo among its member unions rather than seek- ing to actively grow the labor movement eventually led to the formation of the Congress of Industrial Organizations (CIO).

Rise of the CIO and Industrial Unionism Major disagreement occurred within the AFL over organizing the growing number of semiskilled employees in the labor force. Tremendous technological shifts occurred dur- ing and after World War I, reducing the demand for highly skilled employees. This increased the percentage of the labor force comprised of semiskilled or unskilled produc- tion workers. In 1926, for example, 85 percent of the hourly employees at Ford Motor Company required less than two weeks of training.103 Because craft employees no longer dominated the industrial scene, the AFL needed to organize production employees if it wanted to increase membership.

Many of the AFL unions did not want to enroll semiskilled production employees. Some AFL leaders believed these employees were inferior to craft employees and pos- sessed less bargaining power because they were easier to replace than skilled workers if they went on strike. Other AFL leaders thought the inclusion of production workers would confuse and distort the AFL s organization. Recall that AFL member unions were organized along skilled craft lines. William Green himself did not view industrial employees as being compatible with the AFL s organizational principle of exclusive juris- diction by skilled craft.

Some AFL leaders thought that if they were to try to organize semiskilled factory workers, a separate union would be needed for each company s or industry s products. Thus, if General Electric (GE) had 50 different products, then 50 different AFL unions (each having exclusive jurisdiction over its members interests) would be needed for effective collective bargaining. In other words, at least 50 separate collective bargaining agreements could be negotiated by GE and its unions. Both the craft approach and the product line stood in contrast to the industrial unionism approach, where everyone in the same industry could be represented by the same union (e.g., all the employees at GE might be in one electrical workers union). The president of one AFL union urged his members to stamp out the awful serpent of industrial trade unionism that would destroy this International and weaken the entire structure of the Labor Movement. 104

The issue came to a head in 1935 under the direction of John L. Lewis, president of the AFL s United Mine Workers Union. The AFL rejected the concept of industrial unionism at its 1935 convention.105 On November 9, 1935, the Committee for Industrial Organizations was formed. Its purpose was allegedly educational and advisory, but in reality it was intended to promote organizing among unrepresented employees, particu- larly those semiskilled workers in the mass production industries.106

In January 1936, AFL leaders were shocked to find that the Committee for Industrial Organizations had been formed by some AFL unions. AFL President Green thought the industrial unionism issue had been buried once and for all at the 1935 convention. AFL leaders ordered the Committee for Industrial Organizations to disband or get out. Per- sonalities intensified the issue. John L. Lewis, a powerful man in voice and action, sought and obtained power and publicity through his union activities.107 Lewis managed to

CHAPTER 2 The History of Labor Management Relations 71

provoke AFL leaders into a confrontation while at the same time whipping his United Mine Workers members into a lather of rage against the AFL.108 Lewis believed that the future success of the American labor movement was dependent on the ability to organize production workers in the fast growing mass production industries. The split over the industrial unionism issue resulted in seven unions with almost a million mem- bers being expelled from the AFL. These seven unions joined with newly established industrial unions in some of the mass production industries to quickly form a rival and completely independent labor federation, the CIO, electing John L. Lewis (then president of the United Mine Workers union) as the first CIO president.109

The development of the CIO coincided with a significant upsurge in union member- ship. By November 1937, the CIO s affiliated unions had already organized 75 percent of the steel industry, 70 percent of the automobile industry, 65 percent of the rubber indus- try, and about one-third of the maritime and textile industries.110 The AFL also saw rapid growth in membership during the late 1930s and the 1940s. The AFL organized the skilled trade employees in mass production industries into local labor unions and national councils assigned to various craft unions. The steady growth of the AFL during the late 1930s was also aided by employers preference to deal with the more conserva- tive organization instead of taking their chances with the new, unpredictable, and more politically radical CIO.111

Why did union membership increase dramatically in the 1930s and 1940s? At least five factors seem to account for the growth in unionism during this period: strong CIO leadership, the CIO s realistic goals, the CIO s effective use of the sit-down strike tactic, passage of the National Labor Relations (Wagner) Act of 1935, and changes in employ- ees attitudes toward a more favorable view of unions.