Legal aspects of exclusive representation: Ruminations on the private-public sector analogy

From the perspective of a management labor lawyer, this article argues that any legitimate theory of employment rights must be founded on the premise that employment is a voluntary relationship governed by mutual consent. In contrast, the erosion of the doctrine of at-will employment and the substitution of its legal antithesis, the tort of wrongful discharge, depend on a conception of employment rights as something the employee possesses at the employer’s expense, that is, without the employer’s consent. The theme of this article is that an employment right does not exist apart from contract. The government cannot violate an employment right unless it prevents a willing employee and a willing employer from making a contract concerning a proper subject on terms satisfactory to both. In public sector employment, the state is one of the parties to the employment contract. In most cases, a public employer cannot be “willing” if the same sovereign or polity has enacted conditions on public employment, that is, has placed limitations on itself. This article analyzes the legal aspects of exclusive union representation and related union security arrangements within this conceptual framework. Member, State Bar of California. Associate, Latham & Watkins, Los Angeles and San Diego. I wish to thank my colleague, Mark W. Smith, for his helpful suggestions and comments during the preparation of this paper. The views expressed here are solely those of the author.     

Male-female differences in the potential for union growth outside traditionally unionized industries

Using recent NLS data on preferences for union representation, this paper examines whether differences by sex exist in the potential for union organizing outside of traditionally unionized industries. The methodology distinguishes between workers’ preferences for union representation and the relative supply of union jobs in explaining interindustry differences in the extent of unionization. Within the private sector, women employed in industries other than those traditionally unionized are found to have at least as strong a preference for unionization as do comparable men but a considerably lower opportunity for unionized employment given the desire for union representation. Comparing the public sector with traditionally organized industries, the greater extent of unionization in the public sector is largely explained by a stronger desire for union representation on the part of both male and female public sector employees. The helpful comments of Rodney Fort, Daniel Hamermesh, Robert Hutchens, and Jon Sonstelie on an earlier draft of the paper are gratefully acknowledged.     

Variables related to patterns of union Stewards’ commitment

This article examines whether the union and employer commitment of stewards can be predicted by the same antecedent factors and whether any o f those factors are related to dual or unilateral commitment. It modifies a conceptual framework of organizational commitment to recognize the presence of a union and then applies that framework to both union and employer commitment. The analysis found that the predictors of union and employer commitment were mostly different, and structural characteristics of the union, employer, and work significantly differentiated between stewards with high and low dual commitment and between standards with high and low unilateral commitment.     

Agency costs,property rights,and the evolution of labor unions

Collective bargaining requires that an agent represent workers. This paper examines the implications for the trade union movement of the resulting agency costs. Without transferable rights in the union, union members lack the means and incentive to bring forth the innovative agent controls common to the modern corporation. Considerations of the bargaining strengths of employers and employees, each represented by an agent, provide an explanation of the simultaneous decline of private sector union membership (corporate share holders have been more successful at lowering agency costs) and growth of public sector union representation (where the union official, a “double agent,” serves the interest of both employee and bureaucratic employer). The authors acknowledge the helpful remarks Donald L. Martin whose earlier research on property rights in unions inspired this effort. Don Bellante’s work was supported by a grant from the Research Committee of the College of Business Administration, University of South Florida.     

Outsourcing and union power

The outsourcing of union work and jobs either diffuses or diminishes union membership, depending on perspective and situation. The correlation of trends in union membership to trends in union power, while less than perfect, has until recently been relatively strong over the past sixteen years. The fact that as diverse a sample of unions as AFSCME, SEIU, and UAW have chosen to make outsourcing a prominent labor/public relations issue suggests that the correlation continues to be perceived by the union movement to be significant, notwithstanding the efforts of the “new” leadership of the AFL-CIO to break that link with respect to union political power by “taxing” member unions and their members to contribute both money and militancy to the 1996 election cycle. Although outsourcing may lead only to the diffusion of union membership either within or between unions, as opposed to the diminution of union membership, this fact has not received a great deal of attention. The net effect on total union membership of outsourcing from one union employer to another union employer is unclear, although the effect on the membership of the union at the outsourcing employer is not. The redistribution of membership within a union as a result of outsourcing is likely to have little immediate impact on union power. However, as even the best case scenario presented above suggests, it may have significant long-run deleterious effects on union bargaining power by taking labor out of a sheltered market and putting it into potentially competitive market. This is particularly likely to be the case when outsourcing (1) places the outsourced work into a different industry or wage contour and (2) creates the possibility of moving from sole-source to multiplesource supplier arrangements. The redistribution of membership between unions as a result of outsourcing is unlikely to have a major impact on union power broadly defined. It can have, however, serious deleterious effects in terms of the power of an individual union, as suggested in my “competitive case” scenario. The fact that one union’s losses due to outsourcing may be another union’s gain is of little consolation to the losing union. That act, in and of itself, may make the threat of outsourcing a potential union “Achilles heel” at the bargaining table by placing it into competition with some other, perhaps unknown, union as well as possibly nonunion competition. The most obvious threat to union power comes from outsourcing that diminishes union membership overall by transferring jobs from union to nonunion employers. The willingness and ability of employers to move work/jobs entirely out of the orbit of union control constitutes, in terms of power and particularly union bargaining power, a revisitation of the phenomenon of the “runaway shop.” It may also be viewed as a proactive form of hiring permanent replacements for (potentially) striking workers. The union options in dealing with such a challenge are to endeavor to preclude outsourcing through legislation or collective bargaining or to chase the work by organizing the unorganized, hopefully with the help of the unionized outsourcing employer. Neither option may be easy, but as the 1996 auto industry negotiations suggest, the former may be less difficult than the latter. The possibility that outsourcing from union to nonunion employer may provide unions with the power to organize from the top (outsourcer) down (outsourcee) cannot be entirely ignored as the issue of supplier “neutrality” reportedly was raised in the 1996 auto negotiations. The adverse effects of outsourcing on union political and financial power, by virtue of its impact on the level or distribution of union membership, can and may well be offset by an increase in union activism—as measured by dues levels, merger activity, organizing commitment, and political action. The adverse effects of outsourcing on union bargaining power are more problematical from the union standpoint. The effect of outsourcing, whatever its rationale or scenario, appears to be to put union labor back into competition. Thus, outsourcing constitutes yet another challenge to the labor movement in its ongoing and seemingly increasingly unsuccessful battle to take and keep U.S. union labor out of competition by proving itself able and willing to organize to the extent of the market and standardizing wages in that market.     

How unions affect minority representation in building trades apprenticeship programs

I use program-level data to compare the relative representation of blacks and Latinos in the construction industry apprenticeship programs organized with and without trade union participation. Econometric analysis shows that there are significant differences between the black and Latino experiences. The black share is higher in union-management joint programs, but the Latino share appears to be higher in the unilateral employer programs. Although both groups have lower representation in the higher status (electrical and mechanical) and higher paying occupations, the Latino share is more sensitive to earnings.     

WHAT DO UNIONS DO TO PENSION PERFORMANCE?

Unions can have either positive or negative effects on risk‐adjusted returns in pension plans. On the positive side, a union can improve monitoring of pension advisors and asset managers. On the negative side, the union may sacrifice returns by making investments that promote union goals. This paper discusses how the structure of the pension plan affects the union's ability and willingness to sacrifice returns to promote union goals. Using panel data on over 38,000 pension plans drawn from IRS Form 5500 filings between 1988 and 2008, we find the lowest performing plans are unionized multi‐employer plans. Among defined contribution plans, the underperformance of multi‐employer union plans disappears when the pension is controlled by individual participants. (JEL J32, J51)     

Union decertification election outcomes: Bargaining unit characteristics and union resources

Previous analysis using aggregate data has concluded that union decertification activity is “exclusively a product of market conditions.” We employ data disaggregated by local (county) labor market which permits a preliminary investigation of the importance of potential nonmarket influences that are not measurable using aggregate data, namely, the type of bargaining unit, the type of union, the type of employer, and proxies for union resources. It also allows a more precise specification of the labor market characteristics previously found to influence decertification. Our results confirm the importance of market conditions in decertification activity and outcomes, but they also suggest that the likelihood of decertification is much greater in independent unions and in industry-county combinations in which the typical employee works part-time and has limited alternative income opportunities. Institutional characteristics of the union and employer, individual characteristics of bargaining unit members, and local economic conditions are important determinants of decertification.     

Consequences of work force reduction: Some employer and union evidence

Despite the popularity of workforce cutbacks in the 1990s, largescale empirical stud-ies at the bargaining unit level are rare. I explore some of the consequences of per-manent work force reduction using data from both employer and union respondents. About 56 percent of employer participants and 57 percent of local union officials reported a permanent reduction of bargaining unit employees. In comparing bargain-ing units that experienced a permanent reduction of union members, results obtained from both employers and union officials indicated a significant negative impact on over-all employee satisfaction and labor climate. Additional analyses with union respon-dents revealed that the reduction of bargaining unit employees was also associated with a higher rate of grievances and absenteeism and poorer relations between union members and their supervisors.     

Union membership,market structure,and the innovation output of large and small firms

The determinants of the extent of union membership, industry concentration, and the innovation output of large firms and small firms are examined in a simultaneous-equations model. Data for 246 U.S. manufacturing industries are used to determine: (1) that there are significant interdependencies among these endogenous variables; (2) that contrary to recent findings, unionization is significantly lower in industries with high concentration and high innovation output; and (3) that although high unionization modestly reduces small-firm innovation output (as compared with large-firm innovation output), there is not a large difference in the effects of small-firm and large-firm innovation output on the extent of union membership across industries. I am grateful to John W. Ballantine for his comments on this study.     

Some empirical observations of relevance to the analysis of union wage determination

Six important empirical characteristics of the union sector need to be incorporated into future research on wage determination. These are 1) the extent of unionization, 2) the statistical correlates of unionization, 3) divergent trends in union and nonunion earnings, 4) union/nonunion wage differentials, 5) the determinants of union and nonunion wage change, and 6) wage imitation. Examination of these characteristics suggests the following about union wage determination. Union wages have advanced relative to nonunion since the mid 1950s, despite relative shrinkage of the union sector. Union wage changes show less sensitivity to business-cycle pressures than nonunion. Limited spheres of wage imitation surround certain major union negotiations. These observations can be fitted into recent analyses of wage determination under long-term employer employee relationships, and have relevance for anti-inflation policy. Research for this paper was undertaken while the author was a Senior Fellow at the Brookings Institution and was supported by a grant from the Alfred P. Sloan Foundation. Views expressed should not be attributed to the Brookings Institution, its staff or trustees.     

The impact of right-to-work laws on employer unfair labor practice charges

The expected impact of right-to-work (RTW) laws on employer unfair labor practices is discussed within a resource allocation framework. How RTW laws affect the relative prices of different organizing tactics is also considered. Empirical analysis based on cross-sectional data for 1970, 1975, and 1980 shows that the impact of RTW laws on employer unfair labor practice charges is insignificant. Other variables that affect charge activity are also discussed in terms of their effect on employer/union organizing resource allocation decisions.     

Formalization,collectivization, and the demand for union services

Formalized collective bargaining rather than individual employer-employee negotiation is the fundamental characteristic of a unionized labor market. Formalization involves the substitution of rules for employer discretion. Collectivization substitutes simultaneous decision making on behalf of all workers in a unit for a set of individual employee decisions. Formalization and collectivization are present in nonunion as well as union labor markets and their extent varies within as well as between these two sectors. In particular, individuals may negotiate where they belong in a union environment, and the presence of rules invites negotiation over their interpretation. Nevertheless, because formalization and collectivization are obvious concomitants of trade union organization, their costs to both employers and employees should explain the probability of union organization, as well as the incidence of such antecedents of the modern trade union as the Italian padrone who acted as foreman, pay-master, and employment agency for newly-arrived immigrants to the United States; and the Indianjamdar, a construction industry recruiter-foreman. Our occasional observations of union-induced costreductions may appear to counter the implicit assumption in much of the trade union literature that unions always induce suboptimal combinations of factor inputs and factor payments (nonunion firms could choose union-induced parameters on their own and do not). Because these cost reductions may be accompanied by increased costs imposed by unions, however, the cost reductions discussed below imply nothing about overall effects of unions on employers or employees. I wish to thank John Pencavel for helpful comments on earlier versions of this paper. For further analysis of these points, see Flanders (1968). See Epstein and Monat (1973) for a discussion of the services provided by labor contractors.     

Workplace hazards and workers’ desires for union representation

This paper investigates “voice” responses to hazardous and otherwise disagreeable working conditions in the form of workers’ expressed desires for union representation. Using data from three surveys conducted between 1977 and 1982, workers exposed to significant health and safety risks on the job are found to be substantially more likely to report a willingness to vote pro-union than are comparable workers not similarly exposed. This finding is obtained using both subjective and objective measures of hazard and both union and nonunion workers. Management resistance, however, appears to play a strong role in determining the actual extent of unionization. Between 41 and 48 percent of workers in hazardous jobs desire union representation but have not achieved it. Support for this research was obtained from the Institute of Industrial Relations, University of California, Berkeley. Computational help was provided by Keun Lee and Glenn Shor. Valuable comments on an earlier draft were obtained from William Dickens.     

French Labor Tribunals and the making of Labor law. Toward a sociology of judiciary roles

How do the verdicts of French joint industrial tribunals (Conseils de prud’hommes) participate in shaping the law in the field of labor relations? A “sociographic” survey brings to light both the multiplicity of forms of commitment to the institution and the key role played by a group of “professionals” in these labor tribunals, where elected representatives of employer associations and trade-unions sit side by side. Analyzing how councillors are socialized by the institution and how they arrive at their decisions shows that judgments stem from a combination of three different rationales: the law, union representation and the world of work. Between magistrates’ social characteristics, institutional affiliations and manners of judging, a new way of studying judiciary activity is suggested.     

The state of the unions: United States and Canada

This study demonstrates that the Canadian labor movement has outperformed its American counterpart in terms of union growth, union density, and certification outcomes. Labor and product market factors do not appear to be major contributing factors. Public policy and increased employer resistance have played a critical role, particularly in the decline of unionization in the United States. Union-related variables — militancy, structure, and the desire and ability to organize — are also important in explaining the divergent union trends in the two countries.     

Dual commitment: Unique construct or epiphenomenon?

Research on dual commitment has been criticized for failing to establish that dual commitment is a unique construct with significant explanatory power beyond that of employer commitment and union commitment. Using data for a sample of shop stewards, this analysis shows that dual commitment does have unique predictive power for steward grievance processing behaviors and grievance procedure outcomes. Consequently, models relating employer commitment (in unionized settings) or union commitment to behaviors or outcomes will be misspecified if they do not include dual commitment as a unique construct, and statistical estimates of these models will be subject to specification bias. This research was supported by a grant from the Social Sciences and Humanities Research Council of Canada.     

Union leaders’ willingness to negotiate concessions

Between 1979 and 1985, many labor organizations faced the difficult experience of concession bargaining. This field study examines the conditions under which local union leaders become willing to negotiate contract concessions. The findings indicate that conditions under which union leaders may agree to concessions fall into three categories: pressure, reduced union militancy, and legitimacy of the package of concessions. Sources of these conditions are the employer, the union, and the public. This paper argues that the joint effect of the three categories of conditions makes union leaders agree to concessions. The author would like to thank the following persons for advice and comments on this research: Robert Perloff, James Craft, Marian Extejt, Donna Wood, and Herbert Chesler.     

The contribution of exclusive representation to union strength

In this paper we show that exclusive representation and other union security agreements contribute substantially to union strength. A regression analysis of the growth of unionism among teachers during the 1970s measures just how potent exclusive representation and dues checkoff agreements are in stimulating union growth in the public sector. Further discussion prompts the conclusion that these powerful measures are especially inappropriate in the public sector, for they excessively coerce employees’ representation and benefit employers, not employees.     

Union Legitimacy and the Team Concept: A Case Study of Workers’ Attitudes*

Unions are facing a crisis of legitimacy resulting in part from employer‐initiated workplace participation programs that seek to undermine labor militancy and attachment to unions. The overall trend among union leaders, however, is support for the team concept when implemented in unionized settings. This study examines the effect of union involvement in the team concept on pragmatic and moral union legitimacy at the first unionized team concept assembly plant in the automobile industry—the General Motors’ truck plant in Shreveport, Louisiana. The unique contribution of the study is that it systematically examines how workers who began their careers in the industry under different production regimes view the team concept and union legitimacy. The analysis is based on a random sample survey of workers and employs an original approach of comparing work attitudes and union legitimacy among different “political cohorts.” The results indicate that the team concept threatens pragmatic union legitimacy for veteran workers because it undermines seniority rights. Significant time working under the team concept may also weaken moral union legitimacy, even among workers socialized initially in nonteam concept environments.