Before it will order a union certification election, the NLRB requires a union to show that there is significant interest in unionization among a company’s employees. To meet this requirement, a minimum of 30 percent of the employees in the relevant work unit must sign an authorization card indicating that they want to be represented by a specific union for collective bargaining purposes.

Unions often conduct the early stages of their solicitation effort in private homes or public facilities so that management will not be aware of the organizing drive until the required percentage of workers has signed authorization cards. However, sometimes the union finds it necessary to solicit on company property, which alerts management and gives it the opportunity to respond.

Unions have Web sites where they can communicate with current and potential members.55 In a drive to organize IBM employees in Colorado, the Communication Workers of America (CWA) alerted employees to a special Web site designed to teach them how to form a union at IBM.56 The AFL-CIO site ( www.aflcio.org ) discusses union organizing and other issues, such as the pay of the top executives in U.S. public corporations compared to average employee pay and work/family concerns. The Web site gives interested employees a way to turn to unions affiliated with the AFL-CIO to attain social and economic justice.

Management’s choice of labor relations strategy guides a company’s response to union solicitation. Companies with a union avoidance strategy usually have a “no-solicitation” policy that restricts all solicitations to nonwork areas (for example, solicitation may take place in lunch or break rooms, but not in offices) and nonwork times. A no-solicitation policy makes it more difficult for the union to influence workers’ attitudes toward the union and persuade them to sign authorization cards. However, companies that have a no-solicitation policy must be careful to enforce it consistently so that all solicitations (including those for charitable causes) are restricted. Singling out union-organizing activities for restriction is an unfair labor practice that can result in an NLRB order to cease and desist the discriminatory policy.

Consistent enforcement of a no-solicitation policy was one of the key factors that led the Supreme Court to rule in favor of Lechmere, Inc., a Newington, Connecticut, store that had banned unions from its premises. The court found that Lechmere did not violate the Wagner Act, largely because it had consistently enforced its no-solicitation policy against all organizations, including the Girl Scouts and the Salvation Army. The court also found that the store’s 200 workers were otherwise accessible to the union’s nonemployee organizers. The NLRB extended its consistent enforcement of a no-solicitation policy to e-mail communication when it ruled that an organization that allows employees to use e-mail for personal use cannot prohibit employees from corresponding on e-mail about union activities.57

If the union can show sufficient employee interest in forming a union, the NLRB will schedule a certification election. During the period before the election, management and union leaders should allow employees to freely exercise their right to vote for or against representation. It is the NLRB’s policy to provide an environment in which employees can make an uncoerced choice in their selection of a bargaining agent—or, alternatively, an uncoerced choice not to be represented by any union.

During the preelection period, managers must avoid treating employees in a manner that could be interpreted as using their position to influence the outcome of the election. The NLRB “Notice to Employees” shown in Figure 15.6 indicates some types of conduct that are unacceptable before an election. Managers are prohibited from threatening employees with the loss of their jobs or benefits if they vote for the union. They must also avoid promising employees benefits (such as pay raises or promotions) if they vote against the union. On their side, unions must avoid threatening workers with harm if they do not vote for unionization. The NLRB’s rules for permissible conduct during a union election campaign are exceedingly complex and constantly changing; here, however, are some general guidelines for managers:

• ▪ Threats It is unlawful to threaten employees with theoretical dire consequences should the union win the election.

• ▪ Intimidation Employers by law cannot intimidate or coerce employees to vote against the union.

• ▪ Promises Management cannot promise employees benefits or rewards if they vote against the union.

• ▪ Surveillance It is unlawful to secretly or overtly spy on organizing meetings.58

It is permissible for managers to try to persuade employees before a representation election that they would be better off without a union. Managers can legally do this by:59

• ▪ Making speeches to groups of employees emphasizing why they do not need a union (legal up to 24 hours before the election).

• ▪ Employing a labor relations consultant to assist with the antiunion strategy.

• ▪ Sending a personal letter to employees.

• ▪ Showing movies that view unions in an unfavorable light.

• ▪ Writing memos to employees that summarize all the good things that the employer has provided for them.

Firms in the United States can also hire consultants who specialize in helping management maintain a nonunion workforce. One study estimated that employers spent an average of $500 per employee on consultants in union election campaigns.60

The NLRB supervises the certification election, determining who is eligible to vote and counting the ballots. The voting is done by secret ballot, and the outcome is determined by the participating voters. If the union receives a majority of the votes, it becomes the certified bargaining agent for all of the unit’s employees. This means that it becomes the exclusive agent for both union and nonunion employees in collective bargaining with the employer. The bargaining unit consists of all the employees who are represented by a union that engages in collective bargaining with the employer.

If the majority of voters vote against the union, NLRB policy states that no other representation election may be held for a 12-month period. In recent years, unions have won over half of the representation elections held in the United States. In 2011, 1,189 representation elections were held and unions won 69 percent of the certification elections.61 Exhibit 15.1, “Organizing Campaigns: A New Priority,” gives some examples of successful attempts by U.S. unions to organize diverse groups of employees.

Unionized employees who are dissatisfied with a union’s representation of their interests have the right to get rid of that union by having a decertification election. The NLRB regulates decertification elections with rules similar to those that it uses for certification elections. If a majority of voters vote to decertify, then the union loses its right to represent employees and bargain with the employer over employee pay and working conditions.

The U.S. Congress considered the Employee Free Choice Act (EFCA), which would have allowed workers to form unions without a secret-ballot election. The bill, also known as “Card Check,” would allow union organizers to form a union simply by having a majority of employees sign authorization cards expressing their desire to join. It also had provisions to substantially increase the financial penalties for unfair labor practices and would empower an arbitrator to impose a contract if the parties are not able to reach an agreement within 100 days. Unions had pressed for passage of this law because they believe that certification elections with secret ballots make it difficult for unions to overcome management’s sophisticated tactics and use of consultants who are adept at convincing employees to vote against union representation, which occurs in nearly half the certification elections. For the most part, management and business owners were against Card Check, because they expected that, if passed, the law would have made it much easier for unions to organize the workforce and gain recognition. The proposed Card Check law was defeated in Congress in 2009.62 Representatives advocating for management and business owners who were interested in preserving the practice of secret ballot union elections introduced the Secret Ballot Protection Act to Congress in 2013, but it failed to make it to the Senate, which was controlled by Democrats. Thus, it appears that currently the union certification election process will remain unchanged despite the efforts of different parties who would seek to change it.63

Once the NLRB certifies a union as the bargaining agent for a unit of employees, both management and the union have a duty to bargain with each other in “good faith.” Refusing to bargain in good faith can result in an NLRB cease-and-desist order that is enforced in the courts. The parties are showing good faith in collective bargaining when:

• ▪ Both parties are willing to meet and confer with each other at a reasonable time and place.

• ▪ Both parties are willing to negotiate over wages, hours, and conditions of employment (the mandatory bargaining topics).

• ▪ The parties sign a written contract that formalizes their agreement and binds them to it.

• ▪ Each party gives the other a 60-day notice of termination or modification of the labor agreement before it expires.

In general, good-faith bargaining means treating the other party reasonably even when disagreements arise. To show good faith, management should develop different proposals and suggestions for negotiating with the union instead of simply rejecting all union proposals. For example, in the early 1960s a negotiator for General Electric made a single proposal to the union on a take-it-or-leave-it basis, and then refused to negotiate on any of the union’s counteroffers. The NLRB interpreted this inflexible approach to bargaining as an unfair labor practice that did not show good faith. For additional insights on how union and management representatives should behave in order to sustain good faith bargaining, see the Manager’s Notebook, “Bargaining Etiquette.”

MANAGER’S NOTEBOOK Bargaining Etiquette

Ethics/Social Responsibility

Here are some guidelines for management and union-bargaining teams to follow so that good faith can be maintained during collective bargaining sessions:

• ▪ Show courtesy to the other bargaining team When the management team takes a caucus break to develop a response to a union proposal, the management team should notify the union team by telephone that they are ready to continue bargaining instead of walking in and interrupting a conversation between the union team members.

• ▪ Set the tone by being friendly to the other bargaining team Team members should shake hands, make eye contact, and show interest in the members of the other bargaining team.

• ▪ Maintain team solidarity Make it a point that all team members will arrive and leave the bargaining sessions at the same time. It is disruptive when team members arrive and leave while bargaining sessions are in progress.

• ▪ Establish ground rules to deal with difficult bargaining issues Rules should cover when caucus breaks occur and for how long they last, the location where the bargaining sessions take place, and whether the bargaining meetings should occur at night. (It is better to avoid bargaining late into the night, because when people are tired their behavior may become less civil.)

• ▪ Keep negative emotions under control If things get heated, take a caucus break, which allows the team members to regroup and calm down. Personal attacks on the opposing bargaining team members should be avoided. Negativity has no place at the bargaining table.

• ▪ Exercise silence The saying Silence is golden is true at the bargaining table. If your bargaining team does not like the offer that the opposing team has put on the table, or your team is waiting for a response, the best course of action may be to sit back and wait instead of criticizing the other side’s position. The opposing bargaining team often fills the void of silence by justifying its own position, which may result in a compromise that is closer to your team’s bargaining goals.

Sources:Based on Tyler, K. (2005, January). Good-faith bargaining. HRMagazine, 49–53; Friedman, S. (2009). Top ten negotiating tactics every meeting manager should know. www.marketingsource.com ; Dolan, J. (2011). How to overcome the top ten negotiating tactics. www.myarticlearchive.com .▪▪

In collective bargaining sessions, both parties are likely to take opening positions that favor their goals but leave them some room to negotiate. For example, on the topic of pay raises, the union may initially ask for 8 percent but be willing to go as low as 5 percent. Management may initially offer the union 2 percent but be willing to go as high as 6 percent.

At which point will the parties reach agreement, 5 percent or 6 percent? The party that understands how to use its bargaining power will probably be able to achieve settlement closer to its initial bargaining position. Bargaining power is one party’s ability to get the other party to agree to its terms. If management has greater bargaining power than the union, it is likely to get the union to agree to a 5 percent pay increase.

An important aspect of a party’s bargaining power is how it is perceived by the other party. Each party can engage in behaviors that shape the other party’s perceptions. Management that acts in a powerful and intimidating manner may influence the union to make additional concessions. However, aggressive posturing by management may backfire and cause union negotiators to make fewer concessions.

Parties in negotiations have several tactical alternatives. Two bargaining tactics are often used to increase bargaining power: distributive bargaining and integrative bargaining.64

Integrative Bargaining

Integrative bargaining focuses on convincing your counterpart in negotiations that the benefits of agreeing with your terms would be very high. Integrative bargaining is similar to a problem-solving session in which both parties are seeking mutually beneficial alternatives. Goodyear Tire & Rubber Co. and the United Steelworkers Union (USW) negotiated an agreement that illustrates the benefits of integrative bargaining. Because of Goodyear’s need to become globally competitive, Goodyear placed a high priority on reducing its operating expenses. In exchange for the union’s willingness to slash labor costs by $1.15 billion over three years and to eliminate 3,000 jobs, Goodyear agreed to keep, and invest in, all but two of its U.S. factories and to limit imports from its factories in Brazil and Asia. The union accepted the company’s terms in a contract in 2003 in the hopes of saving as many of the 19,000 union jobs at Goodyear as possible.67 The Manager’s Notebook, “Guidelines for Integrative Bargaining,” shows what both parties need to do to achieve integrative bargaining.

MANAGER’S NOTEBOOK Guidelines for Integrative Bargaining

Customer-Driven HR

Integrative bargaining is the process of identifying a common, shared, or joint goal and developing a process to achieve it. An emphasis on integrative bargaining can lead to cooperation between union and management and the possibility of mutual gains for both. To achieve integrative bargaining, both parties should:

• ▪ Attempt to understand the other negotiator’s real needs and objectives The parties should engage in a dialogue in which both sides disclose preferences and priorities, rather than disguise or manipulate them.^a

• ▪ Create a free flow of information Negotiators must be willing to listen to the other negotiator carefully, and to accept a joint solution that incorporates both parties’ needs.^b

• ▪ Emphasize the commonalities, and minimize the differences, between the parties Specific goals should be reframed to be considered part of a larger, collaborative goal. For example, a safe workplace may be a goal on which both the union and management agree, although they may differ on a specific approach to achieve this goal.^c

• ▪ Search for solutions that meet both parties’ goals and objectives When parties are combative or competitive, they are more likely to focus only on their own objectives and ignore those of the other party. Integrative bargaining is successful only when both parties’ needs are met.^d

• ▪ Develop flexible responses to the other negotiator’s proposals Each negotiator should try to accommodate and adapt to the needs of the other party by modifying his or her proposals. Avoid getting stuck in one intractable position that does not provide room to make tactical trade-offs. By behaving flexibly, a negotiator can encourage the other party to reciprocate in a similar fashion and move toward a settlement with mutual gains.^e

Sources:^aLewicki, R., Saunders, D., and Barry, B. (2010). Negotiation (6th ed.). Burr Ridge, IL: McGraw-Hill Irwin; ^b Ibid.; ^c Ibid.; ^d Ibid.; ^eDas, T. K., and Teng, B. (1998). Between trust and control: Developing confidence in partner cooperation and alliances. Academy of Management Review, 23, 491–512.▪▪

It is not unusual in collective bargaining for both sides to use both distributive and integrative bargaining tactics. However, the firm’s overall labor relations strategy generally determines what type of bargaining it adopts.68 Firms with a union acceptance strategy are more likely to mix integrative and distributive bargaining, whereas those with a union avoidance strategy are more likely to focus solely on distributive bargaining. In addition, the strategies selected by the union will influence a firm’s bargaining strategies and tactics, because collective bargaining is a dynamic process.

The NLRB and courts classify bargaining topics into three categories: mandatory, permissive, and illegal. As mentioned earlier, mandatory bargaining topics are wages, hours, and employment conditions. These are the topics that both union and management consider fundamental to the organization’s labor relations. Some examples of each of these mandatory topics are shown in Figure 15.7.

The NLRB and courts have interpreted wages, hours, and employment conditions fairly broadly. “Wages” can mean any type of compensation, including base pay rates, pay incentives, health insurance, and retirement benefits. “Hours” can mean anything to do with work scheduling, including the allocation of overtime and the amount of vacation time granted. “Employment conditions” can mean almost any work rule that affects the employees represented by the union. These include grievance procedures, safety rules, job descriptions, and the bases for promotions.

Permissive bargaining topics may be discussed during collective bargaining if both parties agree to do so, but neither party is obligated to bargain on these topics. Some permissive bargaining topics are provisions for union members to serve on the company’s board of directors and benefits for retired union members. In the recessionary economy of the early 1990s, some unions swapped wage concessions for equity in the company and a stronger voice in how it is run.

Management–labor agreements in the airline industry have incorporated some novel approaches to rescue faltering airlines and thousands of jobs. For instance, at United Airlines, the unions that represent pilots and machinists traded 15 percent in pay cuts for 55 percent of the company stock and three of 12 board seats in 1994. By 1996, United’s stock price had more than doubled and the employee-owned airline was outperforming most of its rivals.69 However, United Airlines stock plunged in 2001 after the terrorist attack on the United States as United grounded 31 percent of its flights and furloughed 20,000 of its employees. This reversal of company fortunes put a damper on the union’s interest in taking additional pay cuts to help the company overcome its latest financial crisis.70

Other examples of permissive bargaining topics include allowing management to put the union label on its product, settlement of unfair labor practices, and including supervisors in the labor contract.

Illegal bargaining topics may not be discussed in collective bargaining. Examples of illegal topics are closed shop agreements, featherbedding, and discriminatory employment practices. The NLRB considers the discussion of illegal bargaining topics an unfair labor practice.

A labor contract cannot be finalized until the bargaining representatives on both sides go back to their organizations and obtain approval of the contract. Union negotiators typically ask the members to vote on the contract. Most unions require a majority of union members to approve the contract. Management’s negotiating team may need approval from the company’s top executives. If the parties cannot agree on one or more mandatory issues, they have reached an impasse in bargaining. A party that insists on bargaining over a permissive topic to the point of impasse engages in an unfair labor practice.

If the impasse persists because the parties have taken rigid positions, a strike may result. Before a strike is called, either party may ask a mediator to help resolve the impasse. A mediator is a neutral third party that attempts to help the parties in a dispute come to a voluntary agreement. Mediators do not have the power to impose their ideas for a settlement on the other parties. Mediators are trained in conflict resolution techniques and are sometimes able to improve communication so that the impasse is resolved. The Federal Mediation and Conciliation Service (FMCS), established by the Taft-Hartley Act, monitors labor disputes and (under certain circumstances) mediates disputes. In addition, the FMCS maintains a list of impartial mediators and arbitrators who are qualified to assist with contract disputes.

If the contract’s expiration date approaches and the parties are still at an impasse, the union may ask its members to vote on a strike. If members approve, the strike will start the day after the current labor contract expires. Striking union members withhold their labor from the employer and often publicize their dispute by picketing in front of the employer’s buildings. A strike imposes costs on both parties. Striking union members receive no wages or benefits until they return to work, although they may draw some money from the union’s strike fund, which is set up to give a small allowance to cover the striking members’ basic expenses. However, a long strike may exhaust the strike fund, putting pressure on the union to make concessions in order to get its members back to work.

Workers on strike also face the risk of losing their jobs to permanent replacement workers. Caterpillar, Inc., the world’s largest manufacturer of construction equipment, used the threat of hiring permanent replacement workers to win a heated dispute with the UAW. The company set a deadline and told striking workers, “Go back to work or lose your job.” The strikers were scared off the picket line and returned to work on management’s terms.71 The use of permanent replacement workers is very controversial, and organized labor is trying to get Congress to pass legislation restricting it.72 See Exhibit 15.2, “Permanent Replacement Workers: A Strike Against Labor or an Economic Necessity?” for more on this issue.

Sometimes unions are legally bound by their contracts to honor another union’s picket line, which makes it more difficult for the company to hire replacement workers. For example, during a strike by the screenwriters at the major U.S. television networks, all the other television production workers left their jobs in a sympathy strike. The solidarity of the unions forced the television studios to abandon all production work until they could reach a settlement with the screenwriters.73

Management also faces significant strike costs. A strike can force a company to shut down operations and lose customers. In a highly competitive market, such actions may plunge the company into bankruptcy. This is exactly what happened at Eastern Airlines when the International Association of Machinists and Aerospace Workers (IAM) struck the air carrier in a contract dispute in 1989. A strike also poses a threat to a company from a loss of market share to its rivals in highly competitive industries. This is what happened to Boeing in 2000 in the competitive commercial aircraft industry when it sustained a six-week strike of 18,000 engineers and technicians of the Society of Professional Engineering Employees in Aerospace (SPEEA) in the largest white-collar strike occurring in the United States. Eventually the company settled with a contract favorable to the union’s demands. The union demanded and obtained in its contract provisions for the company to continue paying for all of the employees’ health insurance benefits and to give employees a 5 percent annual pay increase over a three-year period.74

Despite the negative outcomes sometimes associated with strikes, they are an important feature of the collective bargaining process. The pressure of an impending strike deadline forces both union and management negotiators to make concessions and resolve their differences. In the United States, less than 0.2 percent of total working time lost is lost because of strikes. Put another way, less working time is lost because of strikes than because of the common cold.75

The type of strike we have been discussing thus far, which takes place when an agreement is not reached during collective bargaining, is called an economic strike . Another type of strike, called the wildcat strike , is a spontaneous work stoppage that happens under a valid contract and is usually not supported by union leadership. Wildcat strikes generally occur when workers are angered by a disciplinary action taken by management against one of their colleagues. Some contracts forbid wildcat strikes and penalize workers who participate in them, sometimes by termination. The preferred method of resolving disputes between unionized workers and management is the grievance procedure. One tool that employers can use against workers is the lockout. A lockout occurs when the employer shuts down its operations before or during a labor dispute. Employers may use a lockout during a bargaining impasse to protect themselves from unusual economic hardship when the timing of a strike may ruin critical materials. For example, a brewer must bottle beer by a certain date or the entire batch can be ruined. Because employers have other alternatives to influence the union to make concessions, such as the use of replacement workers, lockouts are rarely used. A 10-month lockout occurred when National Hockey League (NHL) team owners and the Player’s Association representing the hockey players failed to come to terms over the owners’ demand—citing losses of $273 million the previous year—for a salary cap on each team’s wage bill. The lockout resulted in the cancellation of the entire 2004–2005 NHL season. The Player’s Association finally caved in and agreed to a deal with the owners that capped each team’s total wage bill at $39 million and included a 24-percent reduction in player salaries.76

Most union grievance procedures have three or four steps leading up to arbitration, the final step. Figure 15.8 illustrates a four-step union grievance procedure. Usually a time limit is set for resolution of the grievance at each step. Later steps in the procedure require more time than earlier steps, and the degree of formality increases with each step. Because the grievance procedure is time consuming and distracts several people from their regular job duties, it is generally advantageous for the company to resolve disputes as early as possible.

The key to an effective grievance procedure is training supervisors to understand the labor contract and to work with union stewards to settle grievances at the first step. The labor relations staff in the HR department can make an important contribution here by training and consulting with supervisors.

The first step of the grievance procedure is taken when an employee tells the union steward about his or her grievance. In our example in Figure 15.8, the employee must make the dispute known to the steward and/or the supervisor within five working days of its occurrence. The steward refers to the labor contract to determine whether the grievance is valid and, if it is, tries to work with the employee’s supervisor to settle it. The grievance may or may not be put in writing. Most grievances (about 75 percent) are settled at this first step.

If the dispute cannot be resolved at this first step, the grievance is put into writing, and, in our example, the department or plant manager and a union official (such as the union’s business representative) have an additional five working days to resolve the issue. At this second step, a formal meeting is usually held to discuss the grievance.

If the second step is unsuccessful at resolving the grievance, the parties move on to the third step. This step usually involves both a corporate manager (for example, the company’s director of labor relations) and a local and national union representative. In our example, the labor agreement gives these people 10 days to respond to and resolve the grievance. Grievances that have the potential to set precedents affecting employment policy may get “kicked up” to this level because it is inappropriate for plant supervisors or managers to settle them. For example, a grievance concerning production standards may have widespread implications for all workers if a corporate-wide labor contract is in effect. Because the third step is the last step before arbitration, it is management’s final opportunity to negotiate a settlement with the union. It is common for management to try to “cut a deal” with the union at this step.

The final step of the grievance procedure is arbitration. Only about 1 percent of grievances get as far as arbitration; the rest are settled at the earlier steps. Both parties select the arbitrator, before whom the union and management advocates present their case and evidence at a hearing with a quasi-judicial format. The arbitrator then examines the evidence and makes a ruling. Most arbitrators also write an opinion outlining their reasoning and the sections of the labor contract that influenced their decision. This opinion can serve as a guideline for dealing with similar disputes in the future. The arbitrator’s decision is final and binding on both parties.

Employees initiate two types of grievances. The first is a contract interpretation grievance based on union members’ rights under the labor contract. If the contract’s language is ambiguous, this type of grievance may go to arbitration for clarification. For example, suppose that a labor contract allows workers two 10-minute coffee breaks per day. If management decides it would be more efficient to get rid of coffee breaks, employees may file a contract interpretation grievance to get this privilege restored.

The second type of grievance involves employee discipline. In such cases, the grievance procedure examines whether the employee in question was disciplined for just cause, and management has the burden of proof. An important aspect of these cases is determining whether the disciplined employee received due process. For minor infractions, management is expected to give employees the opportunity to correct their behavior via the progressive discipline procedure (verbal warning, written warning, suspension, discharge). For more serious charges (such as theft), management must provide strong evidence that the discipline was warranted.

Union grievance procedures provide benefits to both management and employees. Specifically:

• ▪ The grievance procedure protects union employees from arbitrary management decisions; it is the mechanism for organizational justice.

• ▪ The grievance procedure helps management quickly and efficiently settle conflicts that could otherwise end up in the courts or result in work stoppages.

• ▪ Management can use the grievance procedure as an upward communications channel to monitor and correct the sources of employee dissatisfaction with jobs or company policies.