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Labor Unions

30 October, 2015 - 16:03

A union is an organization of employees formed to bargain with an employer. We discuss labor unions in greater detail in Working with Labor Unions. It is important to mention unions here, since labor contracts often guide the process for layoffs and discipline. Labor unions have been a part of the US workplace landscape since the late 1920s, but the Wagner Act of 1935 significantly impacted labor and management relations by addressing several unfair labor practices. The National Labor Relations Board is responsible for administering and enforcing the provisions outlined in the Wagner Act. The act made acts such as interfering with the formation of unions and discriminating on the basis of union membership illegal for employers. By the 1940s, 9 million people were members of a union, which spurred the passage of the Taft-Hartley Act. This act set a new set of standards for fair practices by the unions, within a unionized environment.

The purpose of a union is to give collective bargaining power to a group of individuals. For example, instead of one person negotiating salary, a union gives people the power to bargain as a group, creating a shift from the traditional power model. Issues to negotiate can include pay, health benefits, working hours, and other aspects relating to a job. People often decide to form a union if they perceive the organization or management of the organization is treating them unfairly. Some people also believe that belonging to a union means higher wages and better benefits.

Many employers feel it is not in the best interest of the organization to unionize, so they will engage in strategies to prevent unionization. This is discussed further in Working with Labor Unions . However, the Taft-Hartley Act says that employers can express their views about unions but may not threaten employees with loss of job or other benefits if they unionize. Some of the talking points an organization might express about unions include the following:

  1. Less ability to deal more informally with the organization
  2. Possibility of strikes
  3. Payment of union dues by employees
  4. Emphasis on what positive aspects the employer has provided

If employees still unionize, managers and HR professionals alike will engage in the bargaining process. The collective bargaining process is the process of negotiating an agreement between management and employees. This process ultimately defines the contract terms for employees. In negotiating with the union, being prepared is important. Gathering data of what worked with the old contract and what didn’t can be a good starting point. Understanding the union’s likely requests and preparing a counteraction to these requests and possible compromises should be done before even sitting down to the bargaining table. One of the better strategies for negotiating a contract is called interest-based bargaining. In this type of bargaining, mutual interests are brought up and discussed, rather than each party coming to the table with a list of demands. This can create a win-win situation for both parties.

Once an agreement has been decided, the union members vote whether to accept the new contract. If the contract is accepted, the next task is to look at how to administer the agreement.

First, the HR professional must know the contract well to administer it well. For example, if higher pay is successfully negotiated, obviously it would be the job of HR to implement this new pay scale. The HR professional may need to develop new sets of policies and procedures when a new agreement is in place. One such procedure HR may have to work with occasionally is the grievance process. As we will discuss in Working with Labor Unions, the grievance process is a formal way by which employees can submit a complaint regarding something that is not administered correctly in the contract. Usually, the grievance process will involve discussions with direct supervisors first, discussions with the union representative next, and then the filing of a formal, written grievance complaint. Management is then required to provide a written response to the grievance, and depending on the collective bargaining agreement, a formalized process is stated on how the appeals process would work, should the grievance not be solved by the management response. One such example is the dismissal of members of the National Air Traffic Controller Association (union). In 2011, of the 140 proposed dismissals of air traffic controllers, 58 had penalties rescinded, reduced, or deferred.  1 This is because of due-process protections used to prevent mass firings when a new administration comes to power. Federal workers, including controllers, can challenge disciplinary action penalties through a government panel called the Merit Systems Protection Board. The process is described in union contracts and mentions involvement of an arbitrator, if necessary.

How Would You Handle This?

To Join or Not to Join

As the HR manager for a two-hundred-person company, you have always worked hard to ensure that workers received competitive benefits and salaries. When you hear rumors of the workers’ wanting to form a union, you are a little distressed, because you feel everyone is treated fairly. How would you handle this?

How Would You Handle This?

The author discusses the How Would You Handle This situation in this chapter at:

Key Takeaways

  • The employment-at-will principle means that an employer can separate from an employee without cause, and vice versa.
  • Even though we have employment at will, a wrongful discharge can occur when there are violations of public policy, an employee has a contract with an employer, or an employer does something outside the boundaries of good faith.
  • Whistleblowing is when an employee notifies organizations of illegal or unethical activity. Whistleblowers are protected from discharge due to their activity.
  • A constructive discharge means the conditions are so poor that the employee had no choice but to leave the organization.
  • The Worker Adjustment and Retraining Notification Act (WARN) is a law that requires companies of one hundred or more employees to notify employees and the community if fifty or more employees are to be laid off.
  • A retaliatory discharge is one that occurs if an employer fires or lays off an employee owing to a charge the employee filed. For example, if an employee files a workers’ compensation claim and then is let go, this could be a retaliatory discharge.
  • The privacy of employees is an issue that HR must address. It is prudent to develop policies surrounding what type of monitoring may occur within an organization. For example, some organizations monitor e-mail, computer usage, and even postings on social network sites.
  • Drug testing is also a privacy issue, although in many industries requiring safe working conditions, drug testing can be necessary to ensure the safety of all employees.
  • A union is a group of workers who decide to work together toward a collective bargaining agreement. This agreement allows workers to negotiate as one, rather than as individuals.
  • The Wagner Act, passed in 1935, addresses many issues related to workers’ unionization.
  • The process of collective bargaining means to negotiate a contract between management and workers. HR is generally part of this process.
  • Interest based bargaining occurs when mutual interests are discussed, rather than starting with a list of demands.
  • Once an agreement is reached, HR is generally responsible for knowing the agreement and implementing any changes that should occur as a result of the agreement. One such example is understanding the grievance process.


  1. Perform an Internet search and find a union agreement. Discuss how the union agreement handles terminations and grievances.
  2. Compare and contrast the differences between a retaliatory discharge and a constructive discharge.