Foundations of Labor Relations
Labor relations encompasses the relationship between employers, employees, and their representative organizations, primarily labor unions. For HR professionals, understanding labor relations is critical whether or not the organization is currently unionized, because the legal framework governing labor relations affects all workplaces. The SHRM exam tests knowledge of labor law, collective bargaining processes, and the HR professional's role in maintaining positive employee relations.
The National Labor Relations Act (NLRA), also known as the Wagner Act of 1935, established the legal framework for labor relations in the private sector. It guarantees employees the right to organize, form unions, and bargain collectively. The act also created the National Labor Relations Board (NLRB) to administer and enforce its provisions.
Key Labor Relations Laws
The National Labor Relations Act (NLRA)
The NLRA protects employees' Section 7 rights, which include the right to self-organization, to form or join labor organizations, to bargain collectively through representatives of their choosing, and to engage in concerted activity for mutual aid or protection. Importantly, these rights apply to all employees covered by the act, not just those in unionized workplaces.
The Taft-Hartley Act (1947)
This amendment to the NLRA balanced the playing field by identifying unfair labor practices by unions, establishing the right of employees to refrain from union activity, and allowing states to pass right-to-work laws. It also created the Federal Mediation and Conciliation Service (FMCS) and established procedures for handling national emergency strikes.
The Landrum-Griffin Act (1959)
This act, formally known as the Labor-Management Reporting and Disclosure Act, established a bill of rights for union members, imposed reporting and disclosure requirements on unions and their officers, and regulated internal union affairs such as elections and trusteeships.
The Collective Bargaining Process
Collective bargaining is the negotiation process between an employer and a union representing its employees to establish terms and conditions of employment. Both parties have a legal obligation to bargain in good faith.
Mandatory Subjects of Bargaining
These are topics that either party can insist on negotiating and cannot refuse to discuss. They include wages, hours, working conditions, overtime, holidays, vacations, insurance benefits, grievance procedures, seniority provisions, and health and safety measures. Changes to mandatory subjects during the term of a contract generally require bargaining.
Permissive Subjects of Bargaining
These are topics that may be raised but cannot be insisted upon to the point of impasse. Examples include internal union affairs, the composition of the bargaining team, and benefits for retired employees. Either party may decline to discuss permissive subjects without committing an unfair labor practice.
Illegal Subjects of Bargaining
These are topics that violate the law and cannot be included in a collective bargaining agreement. Examples include closed shop provisions (requiring union membership before hiring) and agreements to discriminate based on protected characteristics.
Negotiation Strategies
HR professionals involved in collective bargaining should be familiar with different negotiation approaches and their applications.
- Distributive Bargaining: A win-lose approach where each side tries to maximize its gains at the other's expense. This traditional approach treats the negotiation as a fixed pie to be divided.
- Integrative Bargaining: A collaborative, win-win approach that seeks solutions benefiting both parties. This approach requires trust, open communication, and creative problem-solving.
- Interest-Based Bargaining: A variation of integrative bargaining that focuses on underlying interests rather than stated positions. Parties work together to identify shared goals and develop mutually beneficial solutions.
Grievance Procedures and Arbitration
Most collective bargaining agreements include grievance procedures that provide a structured process for resolving disputes about the interpretation or application of the contract. A typical grievance procedure involves several steps, from informal discussion to formal hearings, with arbitration as the final step.
Arbitration involves a neutral third party (the arbitrator) who hears arguments from both sides and issues a binding decision. Arbitration decisions are generally final and can only be overturned by a court under very limited circumstances, such as fraud, corruption, or the arbitrator exceeding the scope of authority.
Union Avoidance and Positive Employee Relations
Many organizations prefer to remain union-free and invest in positive employee relations strategies to address the concerns that might otherwise lead employees to seek union representation. These strategies include competitive compensation and benefits, effective communication channels, fair and consistent treatment, employee voice mechanisms, and responsive management practices.
It is critical that union avoidance efforts remain lawful. Employers may not threaten, interrogate, promise benefits, or surveil employees regarding their union activities (remembered by the acronym TIPS). Violations can result in unfair labor practice charges filed with the NLRB.
SHRM Exam Preparation
- Know the major labor relations laws and their key provisions.
- Understand the difference between mandatory, permissive, and illegal subjects of bargaining.
- Be familiar with negotiation strategies, particularly the distinction between distributive and integrative approaches.
- Know the grievance and arbitration process and the finality of arbitration decisions.
- Understand what constitutes lawful versus unlawful employer conduct during organizing campaigns.