Labor Law

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Labor Law

An area of the law that deals with the rights of employers, employees, and labor organizations.

U.S. labor law covers all facets of the legal relationship between employers, employees, and employee labor unions. Employers' opposition to recognizing employees' rights to organize and bargain collectively with management has resulted in a system of primarily federal laws and regulations that is adversarial in nature. Modern labor law dates from the passage of the Wagner Act of 1935, also known as the National Labor Relations Act (NLRA) (29 U.S.C.A. §§ 151 et seq.). Congress has passed two major revisions of this act: the Taft-Hartley Act of 1947, also known as the labor management relations act (29 U.S.C.A. §§ 141 et seq.), and the Landrum-Griffin Act of 1959, also known as the Labor Management Reporting and Disclosure Act (29 U.S.C.A. §§ 401 et seq.).

The railroad and airline industries are governed by the Federal Railway Labor Act (45 U.S.C.A. § 151 et seq.), originally passed in 1926 and substantially amended in 1934. Federal employees are covered by the separate Federal Service Labor Management and Employee Relation Act (5 U.S.C.A. §§ 7101 et seq.). Labor law is also made by the national labor relations board (NLRB), an Administrative Agency that enforces federal labor statutes, and by federal courts when they interpret labor legislation and NLRB decisions. In addition, state and municipal employees are covered by state law.

A basic principle of U.S. labor law is that the Supremacy Clause of the Constitution authorizes Congress to prohibit states from using their powers to regulate labor relations. The ability of Congress to preempt state labor laws has been defined largely by the U.S. Supreme Court because the NLRA is imprecise about what states can and cannot do. The Court has set out two basic principles concerning Preemption: not all state labor laws are preempted by federal statute, and conduct actually protected by the federal statutes is immune from state regulation. For example, Vandalism committed by a union organizing campaign may be subject to state criminal and civil sanctions. A strike in an industry subject to the NLRA that is aimed at improving wages cannot be prohibited by the state.

Historical Background

Labor law traces its roots to the early 1800s, when employees who banded together to strike for improved working conditions were branded as criminals. By the mid-nineteenth century, the law changed to recognize the right of workers to organize and conduct Collective Bargaining with their employers. Employers, however, were not receptive to unions. Between 1842 and 1932, they routinely used injunctions to stop strikes and to frustrate union organizing. The Norris-Laguardia Act (29 U.S.C.A. §§ 101 et seq.) was passed by Congress in 1932 to curb the use of labor injunctions, preventing employers from going through the federal courts to quash unions. The passage of the Wagner Act three years later signaled the beginning of a new era in labor relations and labor law. The legacy of employer-union conflict shaped the new system of government regulation of labor-management relations.

Modern Labor Law

The NLRA is the most important and widely applicable U.S. labor law. Its section 7 (29 U.S.C.A. § 157) guarantees employees "the right to self-organization, to form, join, or assist labor organizations, to bargain collectively, through representatives of their own choosing, and to engage in other concerted activities for … mutual aid or protection." Employees are also entitled to "refrain from any or all such activities." The act prohibits employers and unions from committing "unfair labor practices" that would violate these rights or certain other specified interests of employers and the general public in various circumstances.

Labor law generally addresses one of three different situations: (1) a union attempts to organize the employees of an employer and to get the employer to recognize it as the employees' bargaining representative; (2) a union seeks to negotiate a collective bargaining agreement with an employer; or (3) a union and employer disagree on the interpretation and application of an existing contract between the two. Within these three situations, specific rules have been created to deal with rights of employees and employers.

Organization and Representation of Employees Under the NLRA neither employers nor unions may physically coerce employees or discriminate against them on the job because they do or do not wish to join a union, engage in a peaceful strike or work stoppage, or exercise other organizational rights. Although an employer is forbidden to discharge peaceful strikers, the employer may hire replacement workers to carry on business.

When the employees of a particular company decide to be represented by a union, they usually contact the union's parent association or local division for aid and guidance. The union may solicit membership by holding meetings to discuss how working conditions can be improved, and by distributing leaflets.

The employees, union, or employer, may file with the NLRB a petition to conduct an election to decide whether the union should be the collective bargaining representative. This petition must meet with the support of at least 30 percent of the employees in the bargaining unit named in the petition. Once the petition has been filed, the NLRB must determine whether any obstacles exist to holding the election. If not, the NLRB will attempt to get the union and employer to agree to an election.

If the union and employer agree to an election, the NLRB conducts a secret ballot election to determine whether the majority of the employees in the bargaining unit desire to be represented by the union. During the election campaign, both employer and union may freely express their views about unionization of employees, but neither may resort to threats or bribes. If the union wins the election, the NLRB will certify it as the exclusive bargaining representative of the employees. The union may then be designated an appropriate bargaining unit of a particular category of workers.

A union is generally entitled to picket or patrol with signs reading "Unfair," for up to 30 days at the place of business of an employer it is trying to organize. To picket longer for organizing purposes, the union must file for an NLRB election. If the union then loses the election, it is forbidden to resume such picketing for a year. The U.S. Supreme Court upheld the right to peaceful union picketing in Thornhill v. Alabama, 310 U.S. 88, 60 S. Ct. 736, 84 L. Ed. 1093 (1940).

Negotiation of a Collective Bargaining Agreement Collective bargaining is the process in which an employer and an accredited employee representative negotiate an agreement concerning wages, hours, and other terms and conditions of employment. An employer and a union representing its employees have a mutual obligation under the NLRA to bargain with each other in Good Faith. The primary goal of collective bargaining is to promote industrial peace between employers and employees. The parties have a duty to try reasonably to accommodate differences and reach common ground, but ultimately they have no obligation to enter into a contract.

The Federal Mediation and Conciliation Service or state labor agencies may provide parties with mediators to help them negotiate. Mediators act as neutral facilitators. It is a fundamental part of federal labor policy that unions and management should resolve their disputes through voluntary collective bargaining and not through the imposition of a solution by the government. If a labor dispute becomes serious enough to significantly affect national health or safety, the president has the statutory authority to obtain an 80-day Injunction from the federal courts against any strike or lockout. This procedure has been used over three dozen times since 1947, but rarely since the 1970s.

Pressure to Resolve a Contract Dispute When an employer and a union are unable to resolve their differences and negotiate an employment contract, the parties may use different types of pressure to produce an agreement. These types of pressure include boycotts, strikes, the carrying of signs and banners, picketing, and lockouts.

A labor boycott is any type of union action that seeks to reduce or stop public patronage of a business. It is a refusal to purchase from or to handle the products of a particular employer. Employees may legally exert economic pressure on their employer through a boycott, so long as they act peacefully. But a union is forbidden to engage in a Secondary Boycott. For example, if a union's primary dispute is with a hardware manufacturer, it may not picket or use other methods to get the employees of a hardware store, who are neutral or secondary parties, to stage a strike at the store in order to force it to cease handling the manufacturer's products.

A strike is a concerted refusal of employees to perform work that they have been assigned, in order to force the employer to grant concessions that the employees have demanded. The right of employees to strike is protected by the courts. A lawful strike must be conducted in an orderly manner and may not be used as a shield for violence or crime. Intimidation and coercion in the course of a strike are unlawful. The peaceful carrying of signs and banners advertising a labor dispute is ordinarily a lawful means to publicize employees' grievances against an employer.

Picketing consists of posting one or more union members at the site of a strike or boycott, in order to interfere with a particular employer's business or to influence the public against patronizing that employer. It can be reasonably regulated. Lawful picketing is peaceful and honest. The use of force, intimidation, or coercion on a picket line is not constitutionally protected activity. In addition, employees are not acting within their rights when they seize any part of the employer's property.

A lockout is an employer's refusal to admit employees to the workplace, in order to gain a concession from them. In American Ship Building Co. v. NLRB, 380 U.S. 300, 85 S. Ct. 955, 13 L. Ed. 2d 855 (1965), the U.S. Supreme Court upheld the right of an employer to lock out employees if the intent is to promote the company's bargaining position and not to destroy the collective bargaining process or the union.

With some frequency, lower federal courts and the National Labor Relations Board have upheld lockouts by employers. In Local 702, International Brotherhood of Electrical Workers v. NLRB, 215 F.3d 11 (D.C. Cir. 2000), the U.S. Court of Appeals upheld a ruling by the NLRB finding that an employer's lockout did not violate the NLRA. Employees of the union in the case resorted to "inside game" tactics, where the employees refused to work voluntary overtime and adhered strictly to company rules to such an extent that it slowed the company's productivity. The union began using this strategy during labor negotiations with the company. The company imposed a lockout of the employees in order to facilitate the negotiations and to counter the effects of the union's strategy. The appellate court, in upholding a decision by the NLRB, found that the employer had legitimate and substantial business justifications for the lockout and that the union had not proven that the employer had acted with an improper motive in initiating the lockout.

Unfair Labor Practices

An Unfair Labor Practice is any action or statement by an employer that interferes with, restrains, or coerces employees in their exercise of the right to organize and conduct collective bargaining. Such interference, restraint, or coercion can arise through threats, promises, or offers to employees.

Reinventing the Workplace: Improving Quality, or Creating Company (Sham) Unions?

Foreign competition, technological change, and concerns about declining productivity have led to significant modifications in the way many U.S. businesses manage their affairs. These changes, which have been championed by a long list of management consultants, have appeared under numerous labels, including quality circles and total quality management (TQM). All of these approaches emphasize that the goal of a business is to achieve a high standard of quality in goods manufactured or services provided. To meet this quality goal, businesses have moved away from top-down management, substituting a team approach. Traditional management personnel and line-level workers meet in committees to discuss and resolve issues within the company concerning product, service, and the way work is organized.

The advocates of teamwork and quality circles have hit a legal brick wall in the National Labor Relations Act of 1935 (NLRA) (29 U.S.C.A. § 151 et seq.). Under the NLRA, sections 2(5) and 8(A)(2), employers are forbidden to create employer-dominated company unions. In Electromation, 309 N.L.R.B. 990 (1992), the National Labor Relations Board (NLRB) ruled that Electromation, a nonunion company, could not sponsor an "action committee" because that committee was, under the NLRA provisions, a labor organization. Additional cases have confirmed the NLRB's position on this issue.

Proponents of quality circles and teamwork argue that the NLRA is an antiquated set of laws, based on a period of U.S. history when businesses used every tool at their disposal to subvert unions and union organization. The adversarial posture of labor and management may have made sense in the past, this argument goes, but it is counterproductive in an economy that must adapt quickly to world market forces. The most radical proposal by critics of the NLRB's position on this issue is to abolish the NLRA altogether.

More moderate proponents argue instead for changes in the NLRA to permit committees, teams, and more of what they call workplace democracy. They point out that with the steady decline of union membership and blue-collar jobs, traditional labor-management relations have become irrelevant. They note that white-collar workers, who now dominate the U.S. economy, are less likely to join a Labor Union. Therefore, worker morale and job satisfaction are better when employees are included in the decision-making process of a business.

Proponents of quality circles also believe that a better educated workforce is capable of making informed decisions about its relations with employers. They assert that the days of the employer's being an absolute sovereign are over. It is more productive to allow nonunion employees to organize within the company based on committees and circles. These workers are entitled to the same type of participatory democracy found in labor unions.

Most proponents would give employees the chance to make up their own mind about their work environment. If a union successfully wins over enough employees to be certified as the legal bargaining agent, that would indicate dissatisfaction with the employer and would be an acceptable outcome. These proponents would object to unions filing complaints with the NLRB over company committees where the employees have rejected union representation in the past. As long as employees want to participate in a company committee or circle, they should be permitted to do so.

Proponents argue that the bar on these types of workplace organizational innovations hurts workers. These innovations give employees more autonomy to plan work schedules, meet deadlines, operate equipment, make repairs, and handle health and safety issues. In the past an employee could suggest a change to management but then had to stand back and observe whether the change took place. In today's workplace an employee wants to implement as well as suggest improvements.

Finally, proponents note that in union-organized companies unions are free to negotiate the participation of employees in teams and quality circles. They suggest that it is unfair to restrict nonunion employees from electing to participate in similar business management ventures.

The U.S. labor movement has resisted vigorously the introduction of employee involvement programs by management in both union and nonunion environments. Labor union leadership views the introduction of employer-sponsored committees as a return to the past and as a way of undercutting the ability of unions to organize white-collar workers.

Opponents point out the sordid history of U.S. labor relations prior to the passage of the NLRA in 1935. Company-sponsored unions were put forward as a way to resolve disputes over wages, hours, and other conditions of employment. Employees believed that these unions acted in Good Faith to negotiate a contract with management. In reality, these organizations were sham unions, dominated by the employer. The employers would put company spies in them to monitor what was discussed. Employees were either bought off or fired if they proved too effective in their union duties.

Opponents argue that the NRLA is preserving the independence of labor unions. Without its decisions employers of nonunion employees would use TQM, quality circles, and other buzzwords to promote a nonunion status that would place employees at a disadvantage. Employees will quite likely be intimidated in employer-organized groups, and unable to raise or meaningfully discuss certain issues that management does not want to hear. Without a collective bargaining agreement negotiated by a union, opponents maintain, employees will not have job security or promotion protection.

Opponents also question who makes the decisions in these groups. Though the rhetoric suggests empowerment of employees, employee committees are purely advisory, and the employer retains the authority to decide all issues. In addition, because management creates these committees, management can dissolve them at any time. The inequality of power within a nonunion business dictates that the employer can do whatever management wants, regardless of a recommendation by an employee committee.

The NLRA has placed a barrier to new models of business organization. The distrust of labor unions and their difficulty in making inroads with white-collar workers reconfirms to the unions the need for an adversarial posture with management. Those who seek fundamental change in the way U.S. business operates believe that the NLRA must be amended to accommodate a major shift in economic organization.

An unfair labor practice can occur during collective bargaining. In Auciello Iron Works v. NLRB, 517 U.S. 781, 116 S. Ct. 1754, 135 L. Ed. 2d 64 (1996), the U.S. Supreme Court upheld an NLRB ruling that the employer had committed an unfair labor practice. After the union accepted one of the employer's collective bargaining proposals, the employer disavowed the agreement because of good faith doubts about whether the union still commanded a majority of the employees. The Court reasoned that the employer's doubts arose from facts that the employer had known about before its contract offer had been accepted by the union.

Labor laws are not intended to interfere with an employer's normal exercise of discretion in hiring and firing employees. In general, an employer may hire employees based on their individual merit, with no regard to union affiliation. Refusal to hire an applicant owing to affiliation with a labor union is an unfair labor practice.

The motive of an employer in discharging an employee may be a controlling factor in determining whether the discharge is an unfair labor practice. An employer's history of antiunion bias is an extremely important factor in ascertaining the motive for discharge of an employee. An employer may discharge an employee on various grounds without being guilty of an unfair labor practice. Such grounds include misconduct, unlawful activity, disloyalty, and termination of the business operation. In addition, inefficiency, disobedience, or insubordination is proper grounds for dismissal, provided the discharge is not motivated by the employer's reaction to union activity. Firing an employee based on union activity or membership is an unfair labor practice. Furthermore, the filing of unfair labor practice charges or the giving of testimony in a case based on such charges does not warrant dismissal.

In general, an unfair labor practice exists when an employer contributes financial or any other support to a labor organization. An employer must, therefore, remain neutral between competing unions. It is also an unfair labor practice for an employer to dominate or interfere with the formation or administration of any labor organization.

A union commits an unfair labor practice when it causes, or attempts to cause, an employer to hire, discharge, or discriminate against an employee for the purpose of encouraging or discouraging union activity. The same is true when a union restrains or coerces employees in the exercise of their rights to self-organize; to form, join, or assist labor unions; to bargain collectively; or to refrain from any of these activities. The refusal of a labor organization to bargain collectively or to execute a formal document embodying agreement with an employer is another unfair labor practice.

Contract Enforcement and Contract Disputes

Almost every collective bargaining agreement in the United States contains a grievance procedure. In the grievance procedure, the union and the employer try to settle any disputes over the meaning or application of the contract by themselves. If the parties fail, they may invoke Arbitration, a procedure that typically calls for referring the issue to an impartial third party for a final and binding determination.

Grievance provisions of a collective bargaining agreement govern the procedure to be followed to settle on-the-job disputes. Typical grievance procedures generally consist of at least three steps: (1) an employee and his or her union steward present their complaint orally to the supervisor, who has the power to settle it; (2) in the event that the matter is not settled at that stage, it is reduced to writing, and the union steward and union officers confer with management; (3) if no agreement is reached, the aggrieved employee may submit the matter to arbitration, which will be binding on all parties.

The arbitration of disputes under a collective bargaining agreement is a matter of contract, and the parties to it may delineate the scope of their arbitration clause. Common grievances settled under arbitration clauses include disputes over seniority rights, employee discipline, Pension or Welfare benefits, rates of pay, and hours of work. Ordinarily, the issue of whether a strike or lockout is a breach of an agreement is a proper subject for arbitration.

The vast majority of union-employer contract disputes are resolved in a grievance procedure, and most of the rest are disposed of routinely through arbitration. Occasionally, a party will resist arbitration or will refuse to comply with an arbitrator's award. In such a case section 301 of the Taft-Hartley Act authorizes a suit in federal court to enforce the agreement to arbitrate or the arbitrator's award.

The federal courts have enforced a proarbitration policy in labor contracts. If a union strikes over a grievance it could have arbitrated, the employer may secure an injunction against the strike under section 301 of the Taft-Hartley Act, even though ordinarily the Norris-LaGuardia Act prevents the federal courts from enjoining strikes by labor unions.

Regulation of Unions

The Landrum-Griffin Act contains provisions that regulate how labor unions conduct their internal affairs. These provisions seek to prevent union corruption and to guarantee to union members that unions will be run democratically. The act provides a bill of rights for union members, requires certain financial disclosures by unions, prescribes procedures for the election of union officers, and provides civil and criminal remedies for financial abuses by union officers.

Changing Labor-Management Relations

For most of the history of U.S. labormanagement relations, employers and labor unions have seen each other as adversaries. Federal labor law has been shaped by this adversarial relationship, yet shifts in the structure of the U.S. economy have led to more cooperation. In the 1980s unions agreed to givebacks, in which employees agree to reduced wages and benefits in return for job security, particularly in the manufacturing industries. In response, employers have given unions a larger voice in the allocation of jobs and in the work environment itself.

When economic hardships fall on employers, these employers must often negotiate concessions with employees and the unions representing employees in order to save their businesses. After the September 11th Attacks in 2001, for instance, many airlines in the United States suffered devastating economic downturns. Many of these airlines were forced to negotiate concessions from unions representing airline employees in order to avoid bankruptcy. For instance, in April 2003, a union representing flight attendants for American Airlines agreed to concessions with the airline that saved the company $340 million. The concessions allowed American to avoid bankruptcy, which some commentators had previously suggested was inevitable.

Since the 1980s, innovations in corporate management that advocate teamwork, quality circles, and total quality management (TQM) have led to legal disputes and questions about the continued vitality of the adversarial model of labor-management relations. Under the NLRA, sections 2(5) and 8(A)(2), employers are prohibited from creating employer-dominated company unions. This prohibition was included in the original NLRA because employers had created sham unions that promised representation for workers but in fact toed the company line.

With the beginning of TQM and quality circles in the late 1980s, some employers have attempted to reinvent the workplace by empowering all levels of workers to help make decisions, instead of delegating this task to a set of managers. The creation of quality circles and employee committees has run afoul of the NLRA provision against employer-created unions. In Electromation, 309 N.L.R.B. 990 (1992), the board held that the company's "action committee" was a labor organization involved with and dominated by the company, in violation of sections 2(5) and 8(A)(2). Electromation was a nonunion company. In E. I. du Pont de Nemours & Co., 311 N.L.R.B. 893 (1993), the board considered identical issues in a union-organized company. The board ruled that a series of safety and fitness committees created by du Pont were illegal under the NLRA. These cases illustrate the skepticism of some unions about the true intentions of management and the difficulty in adjusting to change in some areas of labor law.

Further readings

Jasper, Margaret C. 2002. Labor Law. Dobbs Ferry, N.Y.: Oceana.

Lareau, N. Peter, et al. 2003. Labor and Employment Law. Conklin, N.Y.: Matthew Bender.

Squire, Madelyn C. 1993. "Reality or Myth: Participatory Programs and Workplace Democracy—A Proposal for a Different Role for Unions." Stetson Law Review 23.

Wade, David R. 1994. "When Two Worlds Collide: Company Unions and Employee Empowerment in the Aftermath of NLRB v. Electromation and NLRB v. DuPont." Ohio Northern University Law Review 21.


Administrative Agency; Bargaining Agent; Boycott; Employment Law; Federal Mediation and Conciliation Service; Landrum-Griffin Act; Norris-Laguardia Act; Taft-Hartley Act; Unfair Labor Practice.

West's Encyclopedia of American Law, edition 2. Copyright 2008 The Gale Group, Inc. All rights reserved.
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