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The Rise and Evolution of the American Labor Movement
Business Essentials · Chapter 11: Labor Relations and Collective BargainingSection 11.1 · lesson 53 of 10515 min · free with a free account
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In this lesson
From individual weakness to a federal framework, and a long decline.
- Trace how organized labor developed in the US
- Describe the law that governs labor relations
- Explain concerted activity and unfair labor practices
- Weigh the explanations for falling membership
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Labor Relations and Collective Bargaining
The Rise and Evolution of the American Labor Movement
This chapter turns to employees acting collectively, and it starts with history. Why did American workers organize at all, and how did the law respond? We will trace the movement from its origins, through the craft and industrial unions. Then we set out the legal framework, the National Labor Relations Act and the Board that runs it. We will look closely at concerted activity, a protection that applies even where no union exists. Then the numbers. Membership has fallen for decades, and the reasons are debated. Throughout, this course states competing positions fairly, and takes no side. What it asks of a manager is to know the law, and act within it.
Origins
Why Workers Acted Together
A labor union is an organization of employees acting collectively to influence the terms of their work. The movement is best understood as a response to a specific imbalance, not as an abstraction. Industrial work in the nineteenth and early twentieth centuries meant very long days, and six-day weeks. Workplaces had few safety rules. Injuries were common, and injured workers had no compensation. Children worked in factories and mines. Employers set wages and conditions, sometimes changing them without notice. Above all, no individual employee could affect any of it. Someone who objected was simply replaced. So workers reasoned that what one person could not obtain, a group might. Two organizing logics developed. Craft unionism organizes workers by skill or trade, like carpenters or electricians. Its strength is scarcity. It controls entry through apprenticeship, and withholds labor that is hard to replace. The American Federation of Labor, founded in eighteen eighty-six, was built mainly on craft unions. Industrial unionism organizes everyone in a workplace or industry, whatever their job. In a mass-production plant, any one job is learned quickly. Only the whole plant can stop production. In the nineteen thirties, they formed the Congress of Industrial Organizations. The two federations merged in nineteen fifty-five.
Before 1935
A Precarious Legal Position
Before the nineteen thirties, organizing stood on precarious legal ground. Some early nineteenth-century courts treated combinations of workers as criminal conspiracies. A Massachusetts decision in eighteen forty-two held that a union was not unlawful merely for being a union. But the legality of specific union tactics stayed uncertain for decades. Employers could lawfully fire employees for joining a union. They could also demand a promise never to join one. These were called yellow-dog contracts. Courts issued injunctions against strikes and boycotts, and antitrust law was applied to some union activity. The Railway Labor Act of nineteen twenty-six created a separate framework for railroads, later extended to airlines. The Norris-LaGuardia Act of nineteen thirty-two limited federal injunctions in labor disputes. It also made yellow-dog contracts unenforceable in federal court. But something essential was still missing before nineteen thirty-five. There was no general protection for employees who organized, and no obligation on employers to deal with them.
The Wagner Act
The National Labor Relations Act (1935)
The National Labor Relations Act of nineteen thirty-five, often called the Wagner Act, filled that gap. Its central provision is Section Seven, which sets out the rights of covered employees. They may organize, and form, join, or assist labor organizations. They may bargain collectively through representatives of their own choosing. And they may engage in other concerted activity, for collective bargaining or for mutual aid or protection. The Act also establishes exclusive representation. A bargaining unit is the group of employees a union represents in dealing with the employer. When a majority in an appropriate unit chooses a union, it represents everyone in that unit. Members and non-members alike. That design choice matters later, because it creates both the union's power and its obligations.
Concerted Activity
Protected Even With No Union
One feature of Section Seven surprises managers more than any other. The concerted activity protection applies whether or not a union is involved. Concerted activity is employees acting together, or one acting on behalf of others, about their terms of work. If two employees in a non-union workplace jointly complain about scheduling, pay, or safety, they are protected. Disciplining them for it may be an unfair labor practice, even though no one has mentioned a union. The protection has limits. Unlawful acts, some rule violations, and purely personal gripes are not covered. Here is how it plays out, in a composite case at Marlow Home Goods, a non-union retailer. Three part-time employees send their manager, Priyanka, a joint message. One day's notice of shift changes makes child care impossible, they say. They ask for a week. Irritated, she gives each a written warning, and removes them from the next week's high-hour shifts. They acted together about scheduling, a term of work. That is protected, union or not. Managers may decline a request, and explain why. They may not penalize people for making it together. The sound decision is to withdraw the warnings, restore the shifts, and respond on the merits.
The NLRB
The Board That Administers the Act
The Act is administered by the National Labor Relations Board, an independent federal agency. The Board has five members, appointed by the President with the Senate's consent, for staggered five-year terms. It needs three members for a quorum to decide cases. A separate General Counsel investigates charges and decides whether to issue complaints. The Board lacked a quorum for much of twenty twenty-five, and regained one in January twenty twenty-six. Its composition, and presidential power to remove members, are in litigation, so check its current status. Its work comes in two kinds of case. Representation cases ask whether employees want a union. A petition comes first, with a showing of interest. A secret-ballot election follows. If a majority of those voting choose the union, it is certified. Employers may also recognize a union voluntarily. Unfair labor practice cases concern violations. A charge is filed, and the regional office investigates. If it has merit and is not settled, the General Counsel issues a complaint. An administrative law judge hears it, then the Board reviews it, and then the federal appeals courts.
Section 8(a)
Employer Unfair Labor Practices
An unfair labor practice is conduct by an employer or a union that the Act prohibits. Section eight a lists the employer categories, and there are five. An employer may not interfere with, restrain, or coerce employees in exercising their Section Seven rights. That broad provision is where most discipline for concerted activity is challenged. It may not dominate or fund a labor organization, a rule aimed at company-controlled unions. It may not discriminate in hiring or any term of employment, to encourage or discourage union membership. It may not retaliate for charges or testimony. And it may not refuse to bargain with the chosen union. Employees may talk about a union with each other, in non-working time and areas, subject to lawful rules. They may not be threatened, coercively questioned, bribed to drop the union, or spied on. Employers have protected rights too. They may share their views on unionization. They may enforce lawful, evenly applied rules, and discipline for legitimate reasons unrelated to protected activity. Much of labor relations lies in the difference between lawful expression of a view, and unlawful coercion.
Taft-Hartley (1947)
4 Changes That Balanced the Statute
In nineteen forty-seven, the Taft-Hartley Act amended the statute in four important ways. First, it added union unfair labor practices, so that both sides could now commit them. Unions may not coerce employees, cause discrimination against them, or refuse to bargain in good faith. Nor may they charge excessive fees, demand pay for work not performed, or run certain secondary boycotts. Second, it confirmed the right to refrain. Section Seven now protects choosing not to organize, too. Third, it banned the closed shop, where only union members may be hired. And under Section fourteen b, states may prohibit union security agreements altogether. Fourth, Section eight c added a free speech provision. Expressing views or argument is not an unfair practice, unless it carries a threat of reprisal or promise of benefit. That gave both employers and unions more room to speak during organizing campaigns. The overall effect was to regulate both sides of the relationship, not just employers.
Table 11.1.1
4 Union Security Arrangements
A union security agreement makes supporting the union a condition of keeping the job. There are four arrangements, from strongest to weakest. The closed shop requires membership before hiring. Federal law prohibits it. The union shop requires joining, or meeting the financial obligation, after a grace period. It is allowed in the private sector unless a state bans it. Only dues and fees can be enforced. The agency shop requires a representation fee without membership. In twenty eighteen, the Supreme Court held that compelling such fees in the public sector violates the First Amendment. The open shop requires nothing. It is the only option in states with right-to-work laws. The core dispute is about free riders. The union must represent everyone in the unit fairly. Supporters argue that everyone who receives representation should share its cost, or the union cannot bargain effectively. Opponents argue that no one should have to pay an organization to hold a job. Research on what these bans do reaches varying conclusions. The values question remains open.
Who Is Outside
Exclusions and the Public Sector
The Act does not cover everyone who works, and a substantial share of the workforce falls outside it. It excludes agricultural laborers, and domestic workers in a private home. It excludes independent contractors, who are in business for themselves. It excludes supervisors, people who hire, discipline, or direct others using independent judgment. Courts also exclude managerial employees. Railroads and airlines fall under the Railway Labor Act instead. Government employees are excluded, and some very small employers fall below the Board's jurisdictional standards. Whether someone is an employee, supervisor, or contractor turns on the actual relationship, not the label. The public sector has its own framework. Federal employees fall under the Civil Service Reform Act of nineteen seventy-eight. Federal employees may bargain, but wages are set by statute, and strikes are prohibited. Executive action in twenty twenty-five changed the scope of federal bargaining, so verify where that stands. State and local employees depend on state law, which varies widely. Bargaining subjects are often narrower, and strikes are generally barred, often with binding arbitration as the alternative.
Membership Trends
A Long Decline, Driven by One Sector
The Bureau of Labor Statistics measures the union membership rate through a monthly household survey. In nineteen eighty-three, the rate was twenty point one percent, with seventeen point seven million members. In twenty twenty-five, it was ten percent, with fourteen point seven million members. Members fell less than the rate, because the workforce grew. The sectors tell different stories. Private-sector membership fell from sixteen point eight percent to five point nine. The public sector went from thirty-six point seven percent to thirty-two point nine. The gap between them reached twenty-eight point four points by two thousand seven. The decline is mainly private. One caveat. The twenty twenty-five estimate uses eleven months of data, because a shutdown interrupted collection. Structural change moved jobs from manufacturing toward services. But rates also fell within the remaining industries. Employer opposition is real, but hard to separate from the market pressures behind it. The legal framework changed only slowly. Globalization hit tradable industries, yet much of the decline came where foreign competition was slight. And preference surveys show stated attitudes, which may not match real choices under campaign pressure. The honest conclusion is that several explanations contribute, and their weights are not settled.
Competing Positions
Should Workers Organize Collectively?
Should workers be organized collectively at all? Reasonable people differ, so take each position at its strongest. The case for representation starts with power. One employee facing a large employer has little. Collective action offsets that imbalance, and gives employees a voice in their working conditions. Supporters say unions raise and compress wages, secure safer workplaces, and counterweigh concentrated economic power. The skeptical case says unions raise labor costs, which can reduce employment, investment, or competitiveness. Seniority and work rules can reduce flexibility, and reward tenure over merit. A union's interests can diverge from its members', or from workers outside the unit. And individuals should be free to make their own arrangements, especially now that statutes provide many protections. The empirical questions, like the true union wage difference, produce a range of findings. The normative questions, about freedom, fairness, and the right to manage, evidence cannot decide. So the course takes no side. The law protects employee choice in both directions.
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