Labor Law

Labor law refers to the body of laws, regulations, and case law that governs unionization and collective bargaining in the workplace. It is distinguished from employment law, which deals with employment contracts, workplace discrimination, and other private legal issues. Most industrialized countries have enacted labor laws, but those laws may vary across countries or even within a country. Labor relations may be governed by both national and regional labor laws—in Canada, for example, there are provincial labor laws. This essay focuses on U.S. federal labor law governing labor relations in the private sector.

The National Labor Relations Act (NLRA) is the basic federal law that governs unionization and collective bargaining in the United States. Originally enacted in 1935, at which time it was also called the Wagner Act, the NLRA has undergone several significant amendments, most recently in 1974. The NLRA regulates labor relations in almost all private-sector businesses that participate in interstate commerce. The NLRA does not cover public employees (who are covered by state labor relations laws), agricultural employees, or employees of railroads and airlines. Labor relations in the latter industries are governed by the Railway Labor Act.

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Basic Principles of the NLRA

The collective bargaining system established by the NLRA has five basic principles: (a) employee choice, (b) majority rule, (c) exclusive representation, (d) appropriate bargaining unit, and (e) labor and management determination of terms and conditions of employment. The principle of employee choice means that employees in an appropriate bargaining unit choose whether they wish to have a union represent them for collective bargaining purposes and, if so, which union. The principle of majority rule means that the employees’ choice of representation is made by a majority of the employees in the bargaining unit. If a majority of the employees in the bargaining unit do not select representation, the employees in that unit cannot be represented by a union.

If a majority of the employees in the bargaining unit choose union representation, the principle of exclusive representation comes into play. Under this principle, the union selected by the majority of the employees in the bargaining unit represents all the employees in the unit, regardless of whether the employees support unionization. The employer, in turn, has a legal obligation to bargain with the union in good faith regarding the terms and conditions of employment for the represented employees.

The fourth principle is the appropriate bargaining unit. The selection process for unionization takes place among the employees in an appropriate bargaining unit. An appropriate bargaining unit is a grouping of employees who work for a single employer and have common employment interests. They may be employees who work in a company facility, an occupational group, a department, or a craft. Employees who have a community of interest have similar supervision, pay structures, tasks, hours of work responsibilities, and work location.

The fifth principle is union and management determination of terms and conditions of employment. The employer has an obligation to bargain in good faith with the union representing its employees, and the union has an obligation to bargain in good faith with the employer. Neither party has an obligation to agree, however. The terms and conditions of employment are determined by the parties’ negotiations, which are influenced by the bargaining power of the parties, manifested in their use of economic weapons such as a strike, lockout, or employer replacement of strikers. The purpose of these economic weapons is to move the parties toward agreement, even if one party concedes. The law does require that the parties reduce an agreement to writing. An agreement in writing is generally enforced through a grievance procedure that ends in binding arbitration.

Basic Rights under the NLRA

The NLRA gives employees the right to bargain collectively; to form, join, and assist unions (called labor organizations); and to engage in concerted activity for other mutual aid or protection. Thus, the NLRA is not limited to employees’ attempts to unionize; it also protects the rights of employees to refrain from any activities related to collective bargaining or unionization.

Only those who are considered employees for the purposes of the act may exercise their rights under the NLRA. Supervisors, managerial employees, independent contractors, persons whose jobs are related to an employer’s labor relations function, and persons who are employed in industries that are not covered by the NLRA are not considered employees for the purposes of the NLRA.

Administration of the NLRA

The NLRA is administered by the National Labor Relations Board (NLRB), an administrative agency of the federal government. The NLRB consists of five members who serve staggered five-year terms. The NLRB members are nominated by the president and must be confirmed by the U.S. Senate. By the third year of a president’s term, he or she will have appointed a majority of the board members. (There is a custom, however, that no more than three board members may be affiliated with one political party.) With its limited terms and appointment and confirmation process, the NLRB is designed to be an agency that changes in its composition—and to some extent, its views on labor relations—with the changing political climate of the country.

The NLRB has two main functions: determining representation and preventing unfair labor practices. In its representation function, the board determines whether a unit of non-union employees wishes to be represented by a union. Upon a showing of substantial interest—generally demonstrated by at least 30% of the employees in a bargaining unit signing union authorization cards designating the union as their collective bargaining representative and presenting the cards to an NLRB regional office—the board will initiate its representation procedures. After resolving any disputes regarding the bargaining unit, representation is typically determined through a representation election. For example, from October 1, 2002, through September 30, 2003, the NLRB conducted 2,797 representation elections. Employees chose representation in 1,458 of those elections (52.1%) and did not choose representation in 1,339 elections (47.9%).

The board’s second major function is to prevent unfair labor practices. An employer commits an unfair labor practice under the NLRA when it discriminates, interferes with, or coerces employees who attempt to exercise their rights under the NLRA or when it refuses to bargain with a union that represents its employees. Examples of unfair employer labor practices include the following:

  • Discriminating in hiring, promotion, or discharge in order to discourage membership in any labor organization
  • Retaliating against an employee for filing charges or testifying under the act
  • Interfering with union affairs by sending a management representative to spy on worker organizing meetings
  • Attempting to control a union by helping a certain candidate (favorable to management) win election to a union office
  • Refusing to bargain in good faith by changing the terms or conditions of employment without employee input during the term of the collective bargaining agreement

A union commits an unfair labor practice when it refuses to bargain in good faith with management, discriminates against an employee who wishes to exercise his or her right to refrain from union activity, or commits any one of several other types of offenses. Examples of unfair union labor practices include the following:

  • Refusing to process a grievance because an employee has criticized union officers
  • Threatening employees that they will lose their jobs unless they support the union’s activities
  • Fining employees who have validly resigned from the union for engaging in protected activity following their resignation
  • Refusing referral or giving preference in a hiring hall on the basis of race or union activities

Implications for Individuals and Organizations

The NLRA and U.S. labor laws provide an extensive formal structure that ensures employees’ right to engage in collective or concerted activity for the purpose of improving their conditions in the workplace. The NLRA also protects individual employees from being unduly coerced into engaging in concerted activity. Though the NLRA clearly outlines employees’ individual and collective legal rights in the workplace, its impact on employees’ actual workplace experiences is less clear. For example, although the NLRA formally provides workers a greater collective voice in workplace affairs, research shows that union workers report having less actual influence in their workplace than non-union workers.

The NLRA has important implications for the employment practices of both unionized and non-unionized employers in the private sector. Among unionized employers, collective bargaining agreements between an employer and a union commonly include a wide range of clauses that affect the employer’s human resource practices, such as wages, benefits, hours of work, job security, discipline, arbitration, the permissible pool of employees eligible for promotion and transfer, training, and criteria for evaluating performance. The terms of collective bargaining agreements are subject to negotiation, but once they are agreed to, collective bargaining agreements create binding obligations that, if unilaterally disregarded by the employer, may result in an arbitration decision that is enforceable in court.

The NLRA’s implications for employment practices in non-union workplaces, though less extensive, are still significant. For example, a non-union employer’s workplace policy may violate the NLRA on its face or if it is applied discriminatorily against employees exercising their NLRA rights. As a result, when drafting workplace policies, instituting workplace practices, or deciding whether to discipline employees, non-union employers need to consider whether the policy, practice, or disciplinary action relates to a group activity of nonsupervisory employees concerning the terms and conditions of employment. If so, the employee activity may be considered a protected concerted activity. The NLRA has also been interpreted as constraining the use of employee involvement teams in non-union (and union) workplaces. Specifically, in designing and supporting employee involvement teams, employers must be careful to avoid the NLRA’s prohibition against employer domination of, interference with, or assistance to labor organizations—that is, employee groups that deal with management regarding the terms and conditions of employment. For example, it would be legal for an employer to create teams to discuss productivity, but it would be illegal for such teams to discuss compensation linked to productivity because compensation is a term or condition of employment.


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