U.S. employees generally seek representation from a union because they (1) are dissatisfied with certain aspects of their job, (2) lack influence with management to make the needed changes, (3) believe that their pay and benefits are noncompetitive, and (4) see the union as a solution to their problems.

Labor unions were largely unprotected by law in the United States until 1935. Economic conditions during the Great Depression led Congress to try to equalize the power of employers and employees. After several decades of widespread support, unions are today widely perceived as too powerful.

Managers strongly affect how employees perceive the work environment and thus whether they will be susceptible to unionization. Managers must possess enough knowledge of basic labor law to (1) avoid creating a legal liability for the company, (2) implement the terms of labor agreements fairly and impartially, and (3) hear and resolve employee grievances.

The most important laws governing labor relations in the United States are the Wagner Act (1935), the Taft-Hartley Act (1947), and the Landrum-Griffin Act (1959). The Wagner Act created the National Labor Relations Board, which administers union certification elections and prevents and remedies unfair labor practices.

Labor relations in the United States are characterized by (1) business unionism, (2) unions structured by type of job, (3) a focus on collective bargaining, (4) the use of labor contracts, (5) the adversarial nature of labor–management relations and shrinking union membership, and (6) the growth of unions in the public sector.

The labor relations systems of two key global competitors of the United States, Germany and Japan, have achieved a greater degree of cooperation between unions and management than the U.S. system has. The German system uses works councils and codetermination to involve workers in decisions at all levels of the organization. In Japan, enterprise unions have worked closely with companies for the mutual benefit of both parties. Some believe that economic pressures are straining labor–management relations in these countries today.

A labor relations strategy is a company’s overall plan for dealing with unions. Companies that choose a union-acceptance strategy view unions as their employees’ legitimate representatives and accept collective bargaining as an appropriate mechanism for establishing workplace rules. Companies that choose a union-avoidance strategy use either union substitution or union suppression to keep unions out of the workplace.

The labor relations process has three phases: (1) union organizing, (2) collective bargaining, and (3) contract administration. In the union organizing phase, management must confront the issues involved with union solicitation, preelection conduct, and the certification election. In the collective bargaining phase, union and management representatives negotiate workplace rules that are formalized in a labor contract. The contract administration phase starts after the labor contract is settled and deals with day-to-day administration of the workplace. A key feature of the contract administration phase is the grievance procedure, a step-by-step process for settling employee disputes about contract interpretations or disciplinary actions.

The impact of a union on the way a company manages its human resources is significant. Management can expect that the union will affect virtually every major area of HRM. In a unionized workplace, staffing decisions will be heavily influenced by seniority rather than by merit. Individually focused performance appraisals are severely curtailed, while training programs are emphasized. Unionized employees tend to receive larger compensation and benefit packages. Finally, employee relations processes in a union shop are by definition highly structured.