Equity market response to union decertification petitions and elections

The effect of union decertification elections on the valuation of corporations is examined using a standard event study methodology. Cumulative abnormal daily common stock returns for 203 NYSE and AMEX listed firms are estimated for the day on which a petition for a decertification election is filed and for the day on which the National Labor Relations Board (NLRB) certifies the decertification election outcome. The results are consistent with the hypothesis that successful union decertifications increase firm valuation and unsuccessful ones reduce firm valuation. The primary carrier of valuation information is the date the NLRB confirms the decertification election results. The petition file date yields little, if any, information about the firm’s capitalization. The authors thank the directors of the regional NLRB offices and the editor of this journal for their assistance. The usual caveats concerning errors and omissions apply. Correspondence should be directed to William L. Huth.