Michael R. Carrell & Christina Heavrin
Labor Relations and
Collective Bargaining
Seventh Edition
www.prenhall.com/carrell
PART I: Labor Relations Overview
CHAPTER 2
Challenges and Opportunities
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2- 2
Chapter Outline
Workplace Changes
 The Challenges
 Labor-Management Cooperation
 Employee Teams
 Why Unionize?
 Union Growth Areas
 Unions in Professional Sports
 Workforce 2000

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Labor News

Melissa Gilbert - Union President
 President of the Screen Actors Guild (SAG0
 SAG has 98,000 members


Small percentage of members are multimillionaires
Majority are unemployed actors
 SAG confronted by several difficult issues


Production moved to other countries to save labor costs
Negotiating with major studios to maintain SAG contracts
when movies and shows are produced abroad
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Workplace Changes

Union membership has risen and fallen
 Peaked in 1945 at 46% and 1954 at 35% of workers

Today, 13.5% of non-farm workforce is unionized
 Highest percent of union membership among


government employees
Transportation and communication/public utilities
have highest percentage in private industry
Big declines in union membership in:


Production jobs in metropolitan areas
Construction industry
 Current organizing focused in health care,
custodial, and hotel and restaurant workers
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Workplace Changes (cont.)

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Historical perspective
 Agricultural revolution

New farming techniques helped feed booming population
 Industrial revolution

Vast leap forward in productivity
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Workplace Changes (cont.)

Historical perspective (cont.)
 Scientific Management


In the U.S., new work environments created to
accommodate workers with limited industrial experience
and limited knowledge of English
Frederick Taylor and Henry Ford
 Principles for work organization




Fractionalization of work
“One best way” theory
Dividing the workforce
Protecting the process from the worker
 Robber barons

Built railroads, produced steel, and mined minerals
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Workplace Changes (cont.)

Decline and rebirth of manufacturing
 U.S. at its peak a mass producer of goods for global
consumer market in the 1950s


Consequence of being unscathed by WWII
Continued to rely on pre-war technology
 Japan and European countries rebuilt using
advanced technology

Caused decrease in growth rate of U.S. economy
 U.S. industry rebounded in the 1990s

“Lean and mean” management
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The Challenges

What’s in a name?
 Brand name market has spread throughout the


world
Consumers expect high performance to maintain
demand
Changes in comparative advantage
 Nations focused on economic activity that provided

a competitive advantage
Transferability of resources allows companies to
seek competitive advantage separate from their
nation’s historical competitive advantage
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The Challenges (cont.)

Manufacturing revolution
 Straight-line assembly converted to team assembly

Workers produced an identifiable module of work
 Quality control became each worker’s responsibility
 Just-in-time inventory system
 U.S. companies must become flexible in order to
compete in global market

Foreign-owned Southern auto plants
 Plants have remained non-union despite organizing
efforts of United Automobile Workers (UAW)
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The Challenges (cont.)

The new economy
 Unions have not been successful organizing


workers of the new high technology economy
Many new economy employers classify their
workers as temporary or independent contractors
Unions and technology
 Unions’ opposition to the introduction of new
technology has lessened
 Unions now use high technology themselves

Union organizing campaigns incorporate new technologies
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Labor-Management Cooperation

New United Motor Manufacturing Inc. (NUMMI)
Agreement
 Joint venture of General Motors and Toyota in 1983
 Productivity problems linked to American

management, not American workers
Provisions of the agreement between United
Automobile Workers (UAW) and management





Cooperation - expressed in UAW/NUMMI “letter of intent”
Training - American workers sent to Japan
Fewer job classifications - 95 classifications reduced to 4
Fewer supervisors - teams performed routine management
functions
Work teams - 5 to 10 members rotated among 15 tasks
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Labor-Management Cooperation
(cont.)

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Beiersdorf, Inc., Sewing Plant
 German owned plant in Ohio that makes medical

aids
Joint efforts of plant management and Union of
Needletrades Industrial and Textile Employees
(UNITE) avoided closing the plant



New labor contract that provided $3 million in cost savings
Toyota Sewing System implemented to increase
productivity
Landlord and vendors agreed to price cuts
 By 1999, company made the Top 25 manufacturing
list
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Labor-Management Cooperation
(cont.)

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Quality of Working Life (QWL)
 Programs designed and implemented to increase

employees’ job satisfaction and productivity
Attempt to establish practical relationships outside
traditional union-management means



Altered conduct of labor relations
Created direct channels of communication between
workers and management
Intended to reduce conflict and promote trust
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Labor-Management Cooperation
(cont.)

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Quality Circles (QC)
 Based on “people building” rather than “people




using”
5 to 10 volunteers identify and analyze productivity
problems
Develop solutions
Management must grant final approval of proposed
solutions
Unions in U.S. have adopted a neutral attitude
toward QC concept


Recognize that greater efficiency may mean greater
security
Aware that employees do not directly share the cost
savings
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Employee Teams

Groups used to enhance synergy
 Group production greater than the sum of

individuals’ productivity
Enhanced productivity occurs in 3 primary areas



Decision making
Problem solving
Creativity
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Employee Teams (cont.)
Self-Managed
5 to 15 workers learn all
production tasks and
rotate among jobs.
Do managerial duties
such as scheduling
work and ordering
materials.
Types
of
Teams
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Problem Solving
5 to 12 volunteers meet
a few hours/week to
improve quality,
efficiency, and work
environment.
Special Project
10 to 15 workers from
different functional areas design and introduce work reforms or new technology. In
union shops, labor and
management collaborate at
all levels.
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Employee Teams (cont.)
Major reasons for using self-directed teams:
 Improved quality, productivity, and service
 Greater flexibility
 Reduced operating costs
 Faster response to technological change
 Fewer job classifications
 Ability to attract and retain good workers
 Union response to teams has varied
 UAW at Ford Motor Company


Teams made the facility “a much better place to work”
 United Transportation Union at Union Pacific

Members would not participate in quality improvement teams
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Employee Teams (cont.)

National Labor Relations Board (NLRB) and the
courts strictly interpreted Section 8(a)(2) of the
Wagner Act
 Electromation - company illegally created and
dominated a labor organization
duPont - company ordered to dismantle committees

 Teamwork for Employees and Managers (TEAM)
Act
 If adopted, would have allowed employer and
employees to participate on matters of mutual interest

Crown Cork & Seal
 Committees were not “dealing” with management
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Why Unionize?
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Reasons to vote for union representation
 Dissatisfaction with job and employment conditions
 Instrumentality of union in improving conditions
 Willingness to overlook unions’ “Big Labor” image
 Promotion of social advances for all workers
 Most important factors affecting the health of
the American labor movement
 Collective bargaining rights
 Leadership in labor movement
 Union member solidarity
 Action of NLRB

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Why Unionize? (cont.)

Active participation in the union based on:
 Pro-union attitudes in general
 Belief that union is instrumental in improving
economic well-being of workers
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“Soft Issues” that Lead Employees to
Unionize
Hopelessness
Lack
of
control
Job
insecurity
Recognition
Protection
from
humiliation
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Attractiveness
of
unions
Representation
Double
standards
Broken
promises
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Union Growth Areas

Public sector
 By year 2000, 3 public unions among the 9 largest U.S.
unions



National Education Association (NEA)
American Federation of State, County and Municipal
Employees (ASFME)
American Federation of Teachers (AFT)
 Public sector workers typically do not support unions
 Professional workers
 Professionals, especially in health care, less resistant
to unions


Growth of large managed-care organizations
Response to hours of work, under-staffing
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Union Growth Areas (cont.)

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Immigrant workers
 Fastest-growing sector of working class
 Organizing is hindered by cultural differences and
language problems

Unions today
 Craft unions
 Industrial unions
 Public sector unions
 Professional sports unions
 Transportation unions
 Unions of agricultural workers
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Unions in Professional Sports

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Baseball
 Management - National and American Leagues of






Professional Baseball Clubs
Union - Major League Baseball Players Association
Tripartite grievance arbitration panel replaced
commissioner in 1970 as last step in resolving
disputes
Final offer arbitration in salary disputes
Free agency attained in 1976
Large disparities in salaries for different teams
Strikes in 1972, 1981, and 1994



World Series canceled in 1994
1995 season played without a labor agreement
Contract finally okayed in November, 1996
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Unions in Professional Sports (cont.)

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Football
 Management - National Football League
 Union - National Football League Players
Association

First sports union to receive charter from AFL-CIO
 Negotiations less turbulent than baseball
 Free agency attained in 1993

Owners got salary cap in return
 Brown v. Pro Football - 1996

Negotiations by League did not violate Sherman Antitrust
Act
 Strike in 1982
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Unions in Professional Sports (cont.)

Basketball
 Management - National Basketball Association
 Union - National Basketball Players Association
 Players’ salaries highest of all professional sports
 Free agency in 1981
 ‘Hardship rule’
 David Stern era - 1984
New era in the economics of professional
basketball
 “Revenue-sharing,” salary cap, and antidrug
policy

 Union decertification defeated in 1995
 Lockout in 1998
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Unions in Professional Sports (cont.)

Hockey
 Management - National Hockey League
 Union - National Hockey League Players



Association
Negotiations begin spontaneously as new issues
arise
Contractual grievances are arbitrated
Players entitled to free agency
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Workforce 2000

Study predicted change in homogeneous,
white male U.S. workforce
 Increase in percentage of:




Women
People of color
New immigrants
Minorities and women benefit economically
from membership in unions
 However, U.S. unions have not always been
sympathetic to groups who are increasingly
represented in Workforce 2000
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Workforce 2000 (cont.)

African-Americans and unions
 Unionists protested waging the Civil War over
slaves’ rights

Freed slaves compelled to form their own unions
 National Colored Labor Union (NCLU)
 African-Americans used as strikebreakers
 In 1920s and 1930s, AFL and CIO unions typically
refused membership to African-American workers


Exclusionary policies of the AFL appeared to dominate
after merger of AFL-CIO
African-American workers formed their own unions
 Maryland Freedom Union (MFU)
 Mississippi Freedom Labor Union
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Workforce 2000 (cont.)

African-Americans and unions (cont.)
 1964 Civil Rights Act



Resulted in higher levels of unionization among AfricanAmerican workers
African-Americans more unionized than workforce as a
whole
Unionized African-American workers earn 50% more
income than nonunionized African-American workers
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Workforce 2000 (cont.)

Women and unions
 Coalition of Labor Union Women (CLUW) - 1974



Promotes participation of women in union movement
Women often had separate unions in Post-Civil War period
1903 - Women’s National Trade Union League
 Platform to promote rights of women included:



Equal pay for equal work
Full citizenship for women
Organization of all workers into unions
 Civil Rights Act of 1964


Outlaws discrimination in employment on basis of gender
Women turned to unions to increase their power in
workforce
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Workforce 2000 (cont.)

Immigrants and unions
 Skilled laborers were included in early unions
 Industrial revolution created competition with

immigrant labor
After WWI, unions supported legislation to restrict
immigration

After WWII, CIO unions more open to immigrants
 Created ethnic locals
 Today, immigrants primarily of Latin and Asian
descent


Opportunities exist for skilled immigrants
Fewer opportunities for unskilled immigrants
 American employers and unions recognize that these workers
are changing workplaces across the U.S.
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