Lockout (industry)
Lockout in the industrial context is a strategy employed by employers to prevent employees from working during labor disputes, often as a means to gain concessions in negotiations with labor unions. When employees organize into unions to enhance their bargaining power, employers may initiate a lockout to pressure workers to accept terms regarding wages or benefits that the unions are resisting. This tactic can lead to significant financial strain for the workers, who are typically not paid during the lockout, prompting them to seek alternative employment if the situation persists.
In the United States, labor laws restrict employers from permanently replacing locked-out workers and allow for the hiring of temporary staff instead. Notable instances of lockouts have occurred in various sectors, including significant events in professional sports like the NBA and NHL, which have experienced extensive lockouts resulting in the cancellation of numerous games or even entire seasons. The dynamics of lockouts have evolved over time, particularly as the influence of labor unions has waned in recent years, making employers more likely to resort to this method during negotiations. The practice illustrates the ongoing tensions between employee rights and employer strategies in the complex landscape of labor relations.
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Lockout (industry)
A lockout is a method used by employers to prevent employees from working in order to gain concessions in labor negotiations. A lockout is often used when employees band together to form unions to strengthen their negotiating ability. To combat unions, employers can institute a lockout, refusing to allow employees to work until the union agrees to management’s terms or relaxes its demands. These demands often include wage and benefit concessions that employees are reluctant or unwilling to make. Additionally, if a union allows a lockout to persist for too long, it may lose members as they are forced to look for work in other places.
In most cases, businesses in the United States prefer potential labor unrest to take the form of a strike, which is a work stoppage initiated by employees. Businesses that implement a lockout are not allowed to fire their employees, and may only hire temporary replacements. Businesses are also not allowed to fire striking employees either, unless the employees stage an illegal strike.
Several notable lockouts have occurred in the history of the United States. One example was the Crystal Sugar Company in 2011, which locked out more than 1,300 of its workers over contract disputes. Other lockouts have involved sports leagues, such as the National Hockey League (NHL), National Basketball Association (NBA), and Major League Baseball (MLB). In 1998, an NBA lockout forced the cancellation of half the season, while the NHL cancelled more than six hundred games in 2012 and an entire season in 2004 as the result of lockouts. The MLB has experienced four lockouts in 1973, 1976, 1990, and 2021 to 2022.
Backgrounds
For much of human history, people worked to sustain their own survival, seeking to provide food and shelter for themselves and their families or social groups. During the Industrial Revolution of the late eighteenth and early nineteenth centuries, workers began to migrate away from rural farms to find jobs in the manufacturing sector. This shift in the labor force led to a conflict between business owners and the employees who provide the labor. Workers have typically attempted to secure as much personal capital as possible from employers, while employers have tried to get as much value from each employee as possible. In a traditional capitalist society, workers and employers agree upon fair working conditions, such as acceptable wages, hours, and safety measures. If the skills required to perform the required work are common, a worker becomes easily replaceable, driving down the wages they can demand from their employer. However, if the work is more difficult or requires special knowledge, the employee is not easily replaced and may negotiate more aggressively for higher wages.
In theory, if an employer does not offer an acceptable wage, workers are free to go elsewhere to seek employment. However, if a group of employers agrees beforehand to drive down the price of labor by capping salaries, employees may be faced with fewer places to earn a competitive wage. Additionally, some employers may see their workforce as easily replaceable and refuse to pay above a minimum wage. In order to increase power in labor negotiations and gain greater concessions from employers, workers often band together to form unions.
Unions are groups of employees that utilize the power of collective bargaining. Collective bargaining occurs when many employees negotiate with an employer together. They can use threats of strikes or other forms of mass protests to encourage employers to raise pay, improve safety standards, or increase benefits. For this reason, many employers are opposed to their employees forming unions. In the late nineteenth and early twentieth centuries, large businesses often hired armed guards to break up union rallies by assaulting strikers. However, in the modern era, businesses and labor unions typically negotiate in a less violent, albeit sometimes still confrontational, manner.
Overview
Lockouts are one of many tactics used by employers to try and compel workers to accept concessions in a labor negotiation. It is most commonly used as a means to fight demands by a union, preempting a union’s chance to engage in a strike. In most cases, workers are not paid during a lockout. This puts pressures on unions to reach a deal with the employer quickly, before employees who need their wages leave the union and return to work.
In the United States, several federal regulations protect workers during lockouts. Employers may not permanently replace workers during a lockout and may instead only hire temporary workers to continue production. Additionally, though employees may not receive their normal wages during a lockout, they may be eligible to collect unemployment. For these reasons, employers are often reluctant to utilize a lockout.
As labor unions have decreased in power in the twenty-first century, workers have become less likely to strike. As a result, employers have become more likely to institute lockouts. One prominent lockout occurred in 2011 at the American Crystal Sugar Company, a beet sugar producer headquartered in Minnesota. Contract negotiations with the Bakery, Confectionary, Tobacco Workers and Grain Millers International Union failed, leading to the company instituting a lockout and leaving 1,300 employees without jobs. That July, the company sent the union a final offer, and refused the union’s attempts to negotiate on future occasions. The union refused to accept the demands for about two years. After five votes, the union officially agreed to American Crystal Sugar’s terms. However, by that point, the union had been severely weakened by members who left for other forms of employment. Just four hundred union members returned to work after the end of the lockout.
Lockouts are especially common in professional sports, where unions still wield significant power. At the end of the 1998 season, NBA owners imposed a lockout when they and the players failed to agree on a new collective bargaining agreement. The lockout lasted more than 190 days and was not resolved until January 1999 and cost the NBA nearly half its regular season. In 2004, a labor dispute over the imposition of a salary cap caused NHL owners to begin a lockout. As negotiations dragged on, the two sides failed to reach a consensus, ultimately resulting in the cancellation of the 2004–2005 NHL season. In 2012, players and management again battled over a new collective bargaining agreement. Owners sought to decrease the players’ share of revenue from 57 percent to 43 percent, but the players’ union rejected this and subsequent offers. The owners eventually imposed a lockout that lasted until early 2013, forcing the cancellation of more than six hundred games. The two sides eventually compromised, agreeing on a fifty-fifty split of revenue.
Bibliography
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