Labor Legislation and Unions

Abstract

In 1935, the Labor movement gained significant force with the Passage of the National Labor Relations Act (NLRA). The NLRA protected the rights of the private sector to join unions and bargain collectively to improve their pay and working conditions, and as a result, had a profound effect on American business. This article briefly reviews the history and substance of the NLRA, its effect on labor unions, and the continued relevance of the traditional union in the twenty-first century.

Overview

Labor and Employment Law are often mentioned together, but while the two bodies of law are related, they deal with distinct issues, relationships, and rights under the law. Employment law typically concerns an individual employee's rights with respect to their rights in the workplace, including, protection from racial and other discrimination, certain working conditions, minimum wages, and workers' compensation insurance for injury, among others. Labor law is typically understood to govern the realm of management relations with organized labor. Labor law covers such subjects as the right of employees to unionize and bargain collectively and strike, regulates internal union operations, establishes dispute resolution mechanisms, and defines unfair labor practices.

The National Labor Relations Act (NLRA) is the primary body of federal law that controls labor-management relations in private business. The NLRA was shaped by three major pieces of legislation: the Wagner Act in 1935, the Taft-Hartley Act in 1947, and the Landrum-Griffin Act in 1959. The NLRA grants to employees the right to form labor organizations to bargain collectively with employers on the terms and conditions of employment and the right to otherwise make concerted efforts to support those rights.

Prior to the NLRA, employee efforts to organize for the purpose of demanding higher wages or more favorable working conditions were often met with harsh results. In the nineteenth century, employees that attempted to strike, picket, or boycott faced criminal prosecution or civil injunction because such activities were viewed as conspiracies that restrained trade and inflicted irreparable damage on the employer. State civil courts often viewed strikes and picketing as inherently intimidating and ominous. And the labor goals of higher wages or closed shops were considered anti-social and unfairly restrictive of the freedom of others. Federal courts also prevented labor activities through the federal anti-trust laws that declared illegal conspiracies that restrained trade and allowed injunctions, criminal penalties, and private treble damage awards.

At the end of the nineteenth century, sensitivity gradually developed to the concerns of laborers. The federal government passed the Clayton Act in 1914, which withdrew the power of the federal courts to regulate labor activities through the anti-trust law. The Railway Labor Act of 1926 provided for the peaceful resolution of labor disputes through mediation and protected employees from termination based on union membership. In 1932, the Norris-LaGuardia Act barred, in most cases, the issuance of injunctions in labor disputes and permitted employees to organize and bargain collectively free from employer coercion. The Supreme Court interpreted these laws broadly and allowed union activity even if it had an anti-competitive effect. Additionally, the Court insulated unions from criminal liability, treble damages, and injunctive relief.

Before the mid-1930s, Congress's approach to labor relations was essentially to leave the dispute unregulated and allow labor and management to bring to bear whatever economic resources each side had the power to apply. Labor used picketing and striking, and management used termination. With the Wagner Act, or the NLRA of 1935, Congress adopted a more positive approach. The Wagner Act granted labor a federally protected right to "self-organize, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities for the purpose of collective bargaining or other mutual aid and protection." The Wagner Act made illegal certain employer acts or "unfair labor practices," including coercion or interference with an employee's right to organize, domination of unions, discrimination to discourage union membership, and a refusal to bargain in good faith with an employee representative. The Wagner Act also created the National Labor Relations Board (NLRB) to monitor unfair labor practices through judicial-type proceedings. The Board had the power to order employers to remedy any unfair labor practices. The Board's orders were enforceable and reviewable in the US Courts of Appeals.

In the years after the Wagner Act, union membership dramatically increased, disputes between unions proliferated, labor use of strikes and mass picketing increased, and undemocratic or corrupt practices surfaced in internal union affairs. Concurrently, the NLRB was cited by many to be overly protective of labor with strict regulation of employer unfair labor practices. Congress reacted to the abuses under the Wagner Act in 1947 by enacting the Taft-Hartley Act, or NLRA of 1947. Taft-Hartley reorganized the NLRB to separate the judicial function from the prosecutorial function, removed supervisors and independent contractors from coverage under the act, placed limits on the ability of the Board to hear certain cases, and gave Courts of Appeals greater authority to set aside Board findings. Taft-Hartley also made clear that unfair labor practices could not be based on any employer expression that did not contain a threat of reprisal or on any refusal to make a concession or reach an agreement during bargaining. Unions were regulated regarding procedures and finances. Employees were given the protected right to refuse membership in a union, and closed shop agreements were declared illegal. Most importantly, Taft-Hartley enumerated a list of unfair labor practices by labor organizations, including restraining or coercing employees in violation of their protected rights, causing an employer to discriminate against employees, refusing to bargain in good faith, and causing an employer to pay for work not performed. Taft-Hartley also reintroduced the labor injunction limited to unfair labor practices and only by request of the NLRB.

In 1959, The Landrum-LaGuardia Act, or Labor-Reporting and Disclosure Act, was passed largely to address corruption in union leadership and undemocratic conduct of internal union affairs. The Act provided for elaborate union reporting requirements and a bill of rights for union members. The act also imposed further limits on union activities to close loopholes left in the secondary-boycott provisions of the previous Taft-Hartley Act.

Application. The NLRA does not cover all workers; the Act specifically excludes certain categories of workers. Those excluded from coverage include: agricultural laborers; domestic employees in a home, persons employed by a parent or spouse; independent contractors, supervisors, employees covered by the Railway Act such as railroad or airline employees; Federal, state, or local government employees. The central features of the NLRA protection for most other private sector employees are the provisions regarding unfair labor practices and union elections as administered by the NLRB. The NLRB is an independent federal agency that has two primary functions, first: to avoid and correct unfair labor practices done by labor or management and second: to determine whether groups of employees wish to form a union and, if so, which union through secret ballot elections. The NLRB is divided into two major parts: a five-member governing Board and the Office of General Counsel. The Board is a quasi-judicial body, and members are appointed by the President and confirmed by the Senate for five-year terms. The General Counsel is appointed by the President with Senate consent for four-year terms. The General Counsel is separate from the Board and is obligated to investigate and prosecute unfair labor practices cases. The General Counsel is also responsible for supervising NLRB field offices in processing cases.

The NLRB does not act of its own accord; it processes only claims made through one of its twenty-six regional offices around the nation. When an unfair labor practice (ULP) claim is filed by an employee, the appropriate office conducts an investigation to decide if there is reasonable cause to think that the NLRA has been violated. If the appropriate regional director finds reasonable cause, the office will seek a voluntary settlement to correct the violation. If the voluntary settlement effort fails, a formal complaint will be issued, and the matter will go before an NLRB Administrative Law Judge. That judge issues a written decision on the case, which can be appealed to the NLRB five-member Board. The subsequent Board decision is subject to review by the US Court of Appeals. Approximately 25,000 ULP cases are filed each year; one-third of those cases have merit, of which 90 percent are settled.

The prohibition on ULPs applies to both unions and management. Under the NLRA, employers and labor unions are prohibited from “interfering, restraining, or coercing employees in the exercise of rights relating to organizing, forming, joining or assisting a labor organization for collective bargaining purposes, or engaging in protected concerted activities, or refraining from such activity” (NLRA violations, 2010, p. 1). Under the NLRA, concerted activities are group activities where two or more employees are trying to improve such general working conditions as wages or benefits. Some examples of concerted activities are a group of employees confronting their employer about needing better working conditions or wages; one employee asking on behalf of themselves and at least one co-worker about improving working conditions an employer; two or more employees talking about wages or other work-related issues with each other. The NLRA also protects any individual’s right to engage or not engage in union support, membership, or activities (Workplace Rights, 2010).

Some examples of employer conduct that violates the NLRA are: “threatening employees with loss of jobs or benefits if they join or vote for a union or engage in protected concerted activity; threatening to close a plant if employees chose union represention; questioning employees about their union sympathies or activities in circumstances that tend to interfere with, restrain or coerce employees in the exercise of their rights under the NLRA; promising benefits to employees to discourage their union support; transferring, laying off, terminating, assigning employees more difficult work tasks, or otherwise punishing employees because they engaged in union or protected concerted activity; transferring, laying off, terminating, assigning employees more difficult work tasks, or otherwise punishing employees because they filed unfair labor practice charges or participated in an investigation conducted by NLRB” (NLRA violations, 2010, p. 2).

Some examples of union conduct that violates the NLRA are: “threats to employees that they will lose their jobs unless they support the union; seeking the suspension, discharge or other punishment of an employee for not being a union member, even if the employee has paid or offered to pay a lawful initiation fee and periodic fees; refusing to process a grievance because an employee has criticized union officials or because an employee is not a member of the union in states where union security clauses are not permitted; fining employees who have validly resigned from the union for engaging in protected concerted activities following their resignation or for crossing an unlawful picket line; engaging in picket line misconduct, such as threatening, assaulting, or barring non-strikers from the employer’s premises; striking over issues unrelated to employment terms and conditions or coercively enmeshing neutrals into a labor dispute” (NLRA violations, 2010, p. 3).

The second major function of NLRA is to provide for union elections. The NLRA provides the legal structure to private-sector employees to organize into bargaining units and to dissolve a union that already exists in their workplace through either certification or decertification petitions. When an election petition is filed, a Board agent is assigned to process it and hold a secret ballot election if there is sufficient interest. Sufficient interest is generally shown when a petition is signed by more than 30 percent of the employees in the bargaining in support of collective representation by a union. The same showing in opposition will begin a decertification action. If, in a secret ballot election, a majority of the employees choose to represent, the NLRB may certify that representative to bargain collectively on behalf of the employees (Workplace Rights, 2010).

Insights. In the mid-1930s, the American Federation of Labor (AFL), which was initially formed in 1886 to organize workers in individual trades, sought to organize new manufacturing and industrial workers created by the country’s transformation from an agrarian economy into an industrial economy. The AFL had a series of craft unions in place at the time but found that unskilled and semi-skilled workers did not easily fit into those pre-existing categories. As a result, the AFL committee, charged with the task of organizing the new labor force, “formed the Congress of Industrial Organizations (CIO) and created new unions, including; the United Automobile Workers Union, the United Steel Workers Union, the International Electrical Workers Union and the United Rubber Workers Union” (Craver, 2006, p.133). When the Wagner Act was passed in 1935, 13.2 percent of the nonagricultural labor force were members of unions; by 1950, the number had climbed to 34.7 percent. That was the most rapid growth in US history, and the increased union power prompted Congress to amend the NLRA in 1947 and 1959, as discussed above. In the mid-1950s, the AFL and CIO merged into one organization, and the unions agreed not to compete to represent the same workers (Craver, 2006).

Union membership continued to grow but did not keep pace with the overall job growth, and the unionized percentage of the workforce fell to 27.3 percent by 1970. In the late 1970s, the US economy suffered from high inflation caused by increasing oil prices. Many union collective bargaining agreements contained cost-of-living adjustment clauses that made unionized labor substantially more expensive than workers not covered by such clauses. In an effort to cut costs, businesses began to move manufacturing and other labor-intensive work to Mexico and Asian countries. Those businesses that retained US-based production demanded wage and other reductions to remain competitive with products made in the lower-wage areas of the world.

Union influence continued to slide as the American economy shifted toward a white-collar, service, and retail-based economy, and by 1990, only 16.1 percent of the workforce was unionized. The new non-unionized companies were highly competitive and discouraged their workers from joining unions. As a result, by the end of 2005, the percentage of the workforce active in unions had dropped to 7.8 percent. As union membership steadily declined, worker job security and compensation also declined. Workers no longer expect to work for the same company for their adult lives, companies routinely lay off large numbers of employees as needed and use independent contractors and temporary workers sourced from employment agencies. Concurrently, business executive salaries have increased significantly, and the stock market indices have soared.

The decline in the collective power of the US worker to influence factors affecting employment has caused some to question the NLRA's relevance to the changed world economy. The NLRA is an ideal law to protect workers for large manufacturers, where unions could represent a great number of workers at varying levels in the company. But in the global economy that has emerged since the late 1980s, large companies are no longer loyal to home countries and routinely outsource production abroad and often maintain smaller production plants dispersed over a wider geographic area. Employees are now commodities that can be replaced with workers from around the world if it makes economic sense to do so (Craver, 2006).

Employer opposition to unions in the twenty-first century is reminiscent of the fierce anti-union sentiment that existed in the 1930s when the NLRA was first enacted. The central goal of unions is to capitalize on collective bargaining to negotiate higher wages and benefits. Because of the competitive advantage that a particular company's competition may get from low-cost production, significant pressure is placed on companies that maintain domestic operations. This push to lower costs tends to set the potential advantages gained by unions through collective bargaining at odds with company survival. Consequently, companies try to discourage unionization; companies "predict" the effect of unionization on increased labor costs and company survival. These predictions are legal so long as they are based on objectively verifiable data. While a company may not make unsubstantiated threats of plant closings or job relocations, the NLRA sanctions are minimal. The only remedy under the NLRA calls for cease and desist orders that direct violators not to repeat the same conduct. Employers sometimes engage in more severe tactics to discourage union activity. If a union is attempting to establish itself with a company, it is not uncommon for management to illegally terminate vocal supporters of unionization to discourage employees from voting for the union. The NLRB can order that the illegally terminated employee be reinstated with back pay but may take a year or more to arrive at that result. By that time, unionization efforts would have likely failed, the illegally terminated employee has likely found a new job, and the back pay award that the company would have to pay is slight when compared to the increased costs of a unionized workforce (Craver, 2006).

In the event a union is successfully established in a business, it may meet with significant difficulties in reaching a collective bargaining agreement. The NLRA requires management to bargain in good faith but does not require either party to make any particular concession or agree to any particular term. Consequently, newly unionized employers can avoid even preliminary agreements. Employers sometimes enter into superficial bargaining, with no intention of actually reaching a collective agreement. While such a tactic is illegal, the consequence under the NLRA is only an order to direct future bargaining and the cost to the company is only the legal fees to continue the negotiations.

The effectiveness of the NLRA in the twenty-first century employment market is also diminished by judicial interpretation. The NLRA also specifically excludes supervisors from coverage, which made sense when a supervisor had genuine authority to hire, discipline, and manage work. But the Supreme Court has enlarged the category to include those who do not have the managerial authority traditionally associated with supervisors. As a result, professionals, such as registered nurses, who give simple directives to assistants, are precluded from organizing. Similar exclusions based on “managerial” status have been applied to faculty members at colleges and universities.

In addition to the employee perception that unionization will create job loss, unions face other challenges to remain relevant in the American economy of the twenty-first century. Modern workers fear a perceived decline in professional status associated with membership in traditional trade unions. Many Americans consider themselves as part of the middle class, and union membership may be viewed as part of the lower or working-class. These class-based concerns are particularly prevalent among white-collar and semi-professional employees that represent an important new source of organized labor. Those employees work in industries such as finance, insurance, health care, education and information technology. Those industries remain largely unorganized, and union leaders recognize the need to organize such employees. John Sweeney, AFL-CIO president from 1995–2009, recognized that the unions had not dedicated enough resources to gaining new members and suggested new spending to help remedy declining membership. Leadership in unions affiliated with the AFL-CIO, citing concerns about the lack of action to grow membership and organize new industries, withdrew their unions from the AFL-CIO to form the Change-to-Win coalition (Craver, 2006). The Change-to-Win coalition changed its name to the Strategic Organizing Center and represented 4.5 million workers in 2023 (Change to Win, 2023). However, efforts to include the new workforce under the banner of a historical union were not without challenges. For example, a union that traditionally represented truck drivers would meet with skepticism in their efforts to organize highly educated healthcare or educational employees. Unions may avoid the stigma of union membership by calling bargaining units “professional associations,” as well as by being sensitive to the professional needs of higher-income professionals by offering career development opportunities and seeking their input more directly. Unions were also slow to embrace the improved communication methods afforded by advances in email and the Internet.

In the early twenty-first century, concerns about the influence of "special interests" in politics, particularly in campaign financing, gave rise to a string of attempts at reforms aimed at reining in the power of groups identified by the Left as corporations and by the Right as unions. Political influence is seen as key to the survival of unions, and in fact, in states where unions are strong, political representation by members of unionized occupations (and so by members of the working and middle class) is greater (Sojourner, 2013). Businesses moved more aggressively against unionization efforts, sometimes in violation of the Wagner Act (Warner, 2013). By the 2010s, support for unions among workers in the private sector had diminished in favor of nonunion, management-organized solutions. Support for both union and management-based systems, however, diminished whenever bureaucratic procedures were introduced (Godard & Frege, 2013). The decline of union support among private sector workers and the curtailing of benefits and bargaining rights by state and local governments of public sector union members resulted as a backlash against compensation packages that, during the deep and prolonged financial crisis of the 2000s and 2010s, seemed out of line with straining government budgets funded largely by taxpayers who were experiencing declines in income, health insurance, and retirement savings. Lewin, Keefe, & Kochan (2012) argued that the overcompensation of public employees was a misperception and that in general unionized public employees were still at a competitive disadvantage compared with private sector counterparts. According to the US Bureau of Labor Statistics, as of 2017, 10.7 percent of wage and salary workers were members of unions (Bureau of Labor Statistics, 2018).

In the 2020s unions have played predominantly in the media as workers for large corporations like Amazon, Whole Foods, and Starbucks have attempted to unionize. These companies use a vast array of strategies to prevent workers from forming unions. In union busting campaigns reminiscent of past decades, these companies use coercion, intimidation and surveillance to prevent their employees from unionizing. They are often in violation of labor laws as well. The NLRB became involved to investigate what labor laws were being violated by these tactics, yet employees of these companies still struggle to unionize. The aftermath of the COVID-19 pandemic which saw the decline in historically high ages has also influenced unionization (Sherer, 2022). In 2022, 14.3 percent of wage and salary workers were members of unions (Bureau of Labor Statistics, 2023).

Conclusion

The NLRA when first enacted in 1935, provided important protection to the country's emerging labor force. Union influence and importance, while once great, has declined due to several factors arising from the development of the world economy. However, unionization became increasingly popular in the 2020s. Both unions and the NLRA will likely have to adapt to the twenty-first-century workforce to capitalize on the benefits collective bargaining can bring to employees when negotiating for working conditions.

Terms & Concepts

Bargaining Unit: The group of employees represented by a union in their negotiations with management.

Boycott: A refusal to deal with, purchase goods from, or work for an employer; a conspiracy to inhibit the carrying on of business to exert pressure on a party in a labor dispute.

Closed shops: A union agreement by which only union members may be hired by an employer. Now generally prohibited under federal law.

Collective Bargaining: Negotiations between union representatives and an employer to determine the conditions of employment.

Injunction: A court order whereby a party is required to perform or not perform certain activities.

National Labor Relations Act (NLRA): The collective reference to a series of Congressional acts governing labor law.

Picket(ing): Placing people outside a place of employment so that by words or signs they may inform the public of the existence of a labor dispute.

Secondary Boycott: A refusal to do business with a neutral party to coerce the neutral party to exert pressure on a party to a labor dispute.

Strike: To stop working as a protest.

Treble damages: A monetary award three times the amount of actual damages. Such awards are punitive in nature and used as a deterrent.

Bibliography

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Bureau of Labor Statistics. (2018). Economic news release: Union members summary. Bureau of Labor Statistics. Retrieved from https://www.bls.gov/news.release/union2.nr0.htm

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Godard, J., & Frege, C. (2013). Labor unions, alternative forms of representation, and the exercise of authority relations in u.s. workplaces. Industrial & Labor Relations Review, 66, 142–168. Retrieved October 31, 2013, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=85632761&site=ehost-live

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NLRA violations (2010). National Labor Relations Board. Retrieved August 12, 2010 from http://www.nlrb.gov/workplace_rights/nlra_violations.aspx

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Suggested Reading

Abrahms, A. C. (2017). Could employee choice end labor unions' influence? Employee Relations Law Journal, 43(1), 33–37. Retrieved February 13, 2018 from EBSCO Online Database Business Source Ultimate. http://search.ebscohost.com/login.aspx?direct=true&db=bsu&AN=122461559&site=ehost-live&scope=site

Chavez, L. (2007). Unions oppose free choice. Human Events, 63, 9. Retrieved April 08, 2007, from EBSCO Online Database Academic Search Premier. http://search.ebscohost.com/login.aspx?direct=true&db=aph&AN=24052737&site=ehost-live

Corbett, W. (2006). The narrowing of the National Labor Relations Act: Maintaining workplace decorum and avoiding liability. Berkeley Journal of Employment & Labor Law, 27, 23–47. Retrieved April 08, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=21645884&site=ehost-live

Estlund, C. (2006). Is the National Labor Relations Act an outmoded statute in the 21st century? Labor Law Journal, 57, 148–157. Retrieved April 24, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=22948391&site=ehost-live

Smith, A. (2006). Unions may use NLRB decisions to organize. HRMagazine, 51, 26–36. Retrieved April 24, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=23337735&site=ehost-live

Zachary, M. (2007). Union organizing efforts fraught with legal pitfalls. Supervision, 68, 22–25. Retrieved April 08, 2007, from EBSCO Online Database Business Source Complete. http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=24523908&site=ehost-live