Labor Relations: Union vs. Non-Union Work Environments

Union vs. Non-Union Work Environments

There are several important differences between a union environment and a non-union environment. The most striking distinction is that in a union environment, workers are organized — and that has significant implications for the relationship between management and workers. With respect to most issues, including pay and working conditions, negotiation takes place with the union in the form of a collective bargaining agreement (CBA), rather than individually with each employee. Most things become more formalized, which affects processes for just about everything, including critical issues like discipline. The union becomes the face of the workers, resulting in limited direct interaction between management and employees in most cases.

The division is fairly cultural — the organization itself changes. The unionized workplace is a more formalized environment, often more antagonistic, and even when it is not, it is more mechanistic. Management faces limits on its controls, which affects how and when it can pursue organizational change. It is likely that the organization will become less responsive, as it must partner with the union to implement changes. What were once simple processes become subject to negotiation and political trade-offs. In essence, a company changes significantly once its workers unionize (Gustafson, 2015).

How Unionization Changes the Organization

Over time, employees in a union environment will typically extract greater pay and benefits. They have this ability because a union is a collective, and as such it holds far more bargaining power than any individual employee would have on their own. Organizations must consider how this will affect their cost structure and may need to reconsider their overall strategic planning. Beyond cost, unions are also protected by specific rights, including the right of free association. Management should be aware of the special laws that govern union activity.

For example, management is not permitted to interfere with the organizing process. The right to strike is especially significant, because it means that the organization can face a near-total shutdown if no collective bargaining agreement is in place. Depending on the nature of the business, management may want to prepare contingency plans, particularly as the expiration of a CBA approaches.

By contrast, a non-union environment offers a more flexible situation, in which management and individual employees can define roles, pay, and benefits — and adjust these more quickly. A unionized environment slows all of this down and increases the bargaining power of workers. This changes the culture of the organization, its structure, and many of the processes that govern how it pursues its strategic objectives. Workers gain a much greater level of involvement in all of these issues.

Legal Limits During a Unionization Campaign

There are clear limits on what management can and cannot do during a unionization campaign. These limits have been established and tested in court, and management would do well to understand them thoroughly. Freeman and Kleiner (1988) found that where the likelihood of a union victory is high, management often does not fight the unionization effort, because it wants to preserve healthy relations with workers with whom it will soon be negotiating a CBA. The employer can seek to improve the workplace in order to narrow the gap between what the union promises and what workers are already receiving. There is a real trade-off at play for many workers, who must weigh the value of union dues against the changes to their working environment. Management can therefore discourage unionization by minimizing the differences between what employees currently have and what they believe they would gain from unionizing (Freeman & Kleiner, 1988).

Management is fundamentally required to uphold the National Labor Relations Act (NLRA). This law gives workers the right to organize into unions, to strike, and to take collective action. Management cannot, therefore, infringe upon the right to organize — meaning it cannot take any action that could be construed as attempting to disrupt the organizing process. A recent National Labor Relations Board (NLRB) ruling noted that companies must allow employees to use company email for organizing purposes, as this is a protected activity and employers may not infringe upon a worker's right to undertake it (NLRB, 2015).

The best management can do proactively is to address the issue before an organizing drive begins. Once an organizing drive is underway, there is essentially nothing the company can legally do to disrupt that process. In some cases, a company has closed a facility that was undergoing a drive or had recently unionized, but in practice this does not occur frequently. Management must instead ensure that workers receive pay and working conditions that approximate — or exceed — what they would gain through unionization. Employees who do not see a clear advantage in joining a union may ultimately decline to do so.

References

Freeman, R., & Kleiner, M. (1988). Employer behavior in the face of union organizing drives. NBER Working Paper Series.

Gustafson, F. (2015). Difference between a unionized and non-union workforce. Houston Chronicle.

NLRB (2015). NLRB rules employer must allow employees to use company email for protected activity including union organizing. Management Report for Nonunion Organizations, 38(2), 1.