Under a union acceptance strategy , management chooses to view the union as its employees’ legitimate representative and accepts collective bargaining as an appropriate mechanism for establishing workplace rules. Management tries to obtain the best possible labor contract with the union, and then governs employees according to the contract’s terms. The labor relations policy shown in Figure 15.4 is an example of a union acceptance strategy.

A union acceptance strategy is likely to result in labor relations characterized by labor–management cooperation or working harmony. The relationship between General Motors and the UAW union at the Saturn auto plant in Tennessee, which operated between 1990 and 2007, was an example of such a strategy. The union negotiated a very flexible contract with management at this plant in exchange for union recognition and job security for its workers. Management could redesign jobs, change technology, and streamline work rules—a degree of flexibility unknown in other unionized General Motors auto plants.39 In turn, labor was involved in decision making to a degree that was rare in unionized companies. Groups of 5 to 15 workers performed managerial tasks such as hiring. They also elected representatives to higher-level teams that make joint decisions with management on every aspect of the business, from car design to marketing to sticker price.40 Another tactic used to create a climate of union–management cooperation is the establishment of a joint committee composed of union and management representatives who work to solve long-term problems in the workplace that have a high potential for conflict. At Xerox, management and representatives of the Amalgamated Clothing Workers Union formed joint committees and workplace teams whose collaborative efforts resulted in improved plant safety, work flow, and production; reduced grievance rates; and preserved jobs that otherwise would have been eliminated.41 Southwest Airlines, the most profitable airline in the United States, has had a union acceptance strategy since the time it was founded in 1971. The company founders, Lamar Muse and Herb Kelleher, believed that airline employees needed an effective voice so they could be partners with the organization, and they were convinced that a union should be the mechanism for transmitting the employees’ voice to management.42

Sometimes teamwork between a union and management happens because of visionary leadership at the top of both organizations. At the Hillsborough County School District, which encompasses the cities of Tampa and St. Petersburg, Florida, the leader of the school board and the president of the local chapter of the American Federation of Teachers (AFT) nurtured collaborative relations between their organizations. They were able to negotiate unique reforms in the schools that included merit pay for top performing teachers, a coaching program for struggling teachers, and a school day that exceeds eight hours.43

Unfortunately, the road to union–management cooperation can be rocky. In fact, worker distrust of union–management cooperation threatens to derail teamwork initiatives at an increasing number of companies, especially since the NLRB ruled that management-led employee teams can violate the Wagner Act.44 For management guidelines in this area, see the Manager’s Notebook, “When Is a Team Not a Team?”

Labor relations scholars have found that cooperative labor relations occur more often in industries with patterns of labor contract agreements that foster union–management collaboration, such as the automobile, telecommunications, steel, and construction industries.45 An example of such a contract provision is one that establishes joint labor–management committees that meet on a regular basis and develop agreements over issues of mutual benefit such as (1) a drug-free workplace, (2) occupational safety rules, (3) gain-sharing plans, (4) equal opportunity for employees with disabilities, and (5) policies that prohibit any type of workplace harassment.46 Corporate leaders who support a union-acceptance strategy may view unions as an asset rather than as an obstacle to achieving business success. Mark Royse, AT&T’s executive vice president of labor relations, says that, “AT&T and its customers benefit from the skills and professionalism of union-represented employees in our business units. Our company has long taken pride in our cooperative and respectful relationship with the unions that represent our employees.”47

MANAGER’S NOTEBOOK When Is a Team Not a Team? Guidelines for Employee Involvement Committees

Emerging Trends

Two conditions determine whether a company’s employee involvement (EI) group violates the Wagner Act. A group is illegal if it can be proved to be both “employer dominated” and a “labor organization” under the law.

• ▪ Determine whether the issues addressed by an EI team clearly constitute “conditions of employment.” Until legal developments shed new light on the situation, experts say EI groups should be limited to addressing production, quality, and safety matters.^a

• ▪ Employer domination can be construed if any group of employees is perceived as constituting a “select” group empowered to speak to management on behalf of all employees. Guard against such a charge by periodically rotating employee participants on EI teams.^b

• ▪ Make sure that any such group functions in a way that is strictly independent of management influence. If disputes are settled by means of a negotiation process between employer and employee, employer dominance is often readily established. But if management delegates the authority to resolve grievances to the group and the group resolves such problems on its own, the group is likely to be seen as benign, despite the fact that management played a key role in establishing and encouraging it.^c

• ▪ In a unionized setting, getting union participation in EI committees is virtually a surefire way to avoid litigation.^d If the company is nonunion, the situation can be trickier. Get visible employee input and make the venture a cooperative and voluntary one.^e An alternative would be to let peers nominate employees to participate rather than have management select them.^f

• ▪ Never start an EI group during a union organizing campaign. Such activity can readily be seen as union busting.^g

Sources:^aBased on Management Review Forum, February 1994, © 1994. American Management Association, New York. All rights reserved. ^b Ibid.; ^c Ibid.; ^d Ibid.; ^e Ibid.; ^fLeRoy, M. H. (1999). Are employers constrained in the use of employee participation groups by Section 8(a)(2) of the NLRA? Journal of Labor Research 22(1), 63–71; ^g Management Review Forum, 1994.▪▪

Although many small business owners work closely with their workers, they tend to regard such concepts as worker–management teams as a big company’s game. According to the NLRB, two-thirds of unfair labor practice complaints are filed against employers with fewer than 100 workers. Because the great majority of small businesses are nonunionized, this record has encouraged unions to target small firms for membership expansion. In recent years, unions won certification at firms with fewer than 50 workers at twice their rate of success at companies employing more than 500 workers.48 To avoid the loss of management control caused by unionization, many small companies have chosen to pursue a union avoidance strategy.

Management selects a union avoidance strategy when it fears the union will have a disruptive influence on its employees or fears losing control of its workers to a union. Companies that choose a union avoidance strategy are likely to be, at best, in an armed truce with unions and, at worst, in open conflict with them (see Figure 15.4). There are two different approaches to union avoidance: union substitution and union suppression.49 Which approach a company pursues usually depends on the values of top management.

Union Suppression

Management uses the union suppression approach when it wants to avoid unionization at all costs and does not make any pretense of trying “to do the right thing” for its employees. Under this approach, management employs hardball tactics, which may be legal or illegal, to get rid of a union or to prevent the union from organizing its workers.51

For example, in the mid-1980s, Continental Airlines’ CEO Frank Lorenzo used the U.S. bankruptcy courts to reorganize Continental and escape the company’s obligations to employees under its labor contracts with its unions. When the airline emerged from bankruptcy, it had a nonunion workforce with pay levels about 40 percent lower than had prevailed under the union contracts. In another case at about the same time, the Chicago Tribune bargained aggressively with its production unions and, when the union workers went out on strike, substituted permanent replacement workers. The result was a completely nonunionized workforce at the newspaper. More recently, in 2000 Wal-Mart used union suppression tactics to reduce its susceptibility to work with a union after the United Food & Commercial Workers union (UCFW) attempted to organize its meat cutters. Wal-Mart’s response was to reorganize its supply chain and buy prepackaged meat for its U.S. stores and eliminate most of its meat counter jobs around the country.52 Caterpillar, the world’s largest construction and mining equipment manufacturer, has taken an aggressive stance in its labor negotiations with unions in order to squeeze more profits out of its factories. During contract negotiations in 2012 at its Joliet, Illinois, hydraulic-parts factory, Caterpillar management insisted on making cuts to employee health care and other benefits. This led the International Association of Machinists, representing the employees, to go out on strike. After striking for three months, the union capitulated and accepted the company’s settlement terms for a wage freeze and a reduced benefits package. While the union survived the strike and continues to represent the Caterpillar employees in Joliet, its support from employees may have been compromised because it was unable to protect its constituents from a reduction in their compensation.53

Sometimes the union suppression approach backfires and management reaps nothing but an angry union, bitter employees, and the worst kind of public relations. In 1990, management at the New York Daily News, which was then owned by the Chicago Tribune Company, tried to use replacement workers to intimidate its striking unions, but lost the battle because the media and the public sympathized with the union cause. J. P. Stevens, a textile manufacturer with plants in the southern United States, illegally tried to intimidate its workers by firing union organizers before a union certification election. The NLRB intervened on behalf of the union and ordered J. P. Stevens to recognize and bargain with the union.

In general, the union suppression approach is a higher-risk strategy than the union substitution approach and for this reason is used less frequently. Hardball tactics not only entail legal risks but can also come back to haunt management. Frank Lorenzo’s use of the bankruptcy courts to break the company’s unions looked like a great success at the time. However, in 1994 Lorenzo’s bid to start a new low-fare airline was rejected by the Department of Transportation because of safety and regulatory compliance problems during Lorenzo’s stewardship of Eastern Airlines and Continental Airlines. The DOT said that both of these airlines “experienced operational, maintenance, and labor-related problems that were among the most serious in the history of aviation.”54