Collective Bargaining Rights and how they Impact Employment Law in the U.S.
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Abstract
In the United States, collective bargaining rights have provided a stable voice to the millions of employees against their employers who represent the industrial organizations and companies. Collective bargaining plays a strong role in defining the terms of employment in the U.S. and thus, it has had significant impact on the various employment laws that have emerged in the nation. They dictate the overall cost of employing and firing new members of staff in the company and mould the arbitration laws in the U.S. The recent labor laws in America have given credence to the solidification of the collective bargaining rights of the union without giving much thought to their wishes. Collective bargaining rights influence the labor laws in the country by impacting the demand elements of the economy but it is equally significant in terms of supply.
Collective Bargaining Rights and how they Impact Employment Law in the U.S.
Collective bargaining rights form the cornerstone of the industrial form of democracy in the United States. It offers employees a collective voice against the employers who constantly represent collective entities. Collective bargaining is rather important as the means for regulating the terms of employment usually increases with its coverage. As the employees make up a large majority of the population, the employment terms become relevant on a macroeconomic basis and are associated with larger developments in terms of society and economy. Therefore, collective bargaining may be considered to be a matter of not just industrial democracy but even socio-economic governance. However, according to state officials, public employees do not have the constitutional right to collectively bargain.
Collective bargaining is defined as a collective effort of the party that is object of the employer, the advocacy, has no legal obligation to respond to the advocacy in an affirmative manner but may choose to do so voluntarily. This kind of collective bargaining happens to be a fundamental right for the U.S. and must be protected by the constitution . Collective bargaining seems to impact the terms of employment in the United States along with other important socio-economic conditions including the employment law. As a result, collective bargaining rights face a trade-off between supply-side and demand-side considerations. So, collective bargaining is responsible for balancing these considerations. In the United States, industry-level bargaining in case of exposed sectors falls short of cartelizing the labor market. Kittel and Traxler believe that collective bargaining coverage does not affect the growth rates of unit labor costs .
The market economy in the United States depends on the direct use of financial resources as well as the freedom to enter into new contracts. From the perspective of economic freedom, employees should be free to create unions which allow them to bargain collectively over conditions of employment and wages and any sort of federal intervention which prevents unionization can be considered a violation of this financial freedom. However, since the 1930s, the employment law in the United States has changed the terms and guidelines of the collective bargaining rights and consequently, tipped the scales in favour of unions instead of firms that employ union labor. The collective bargaining rights of the employees can now be dictated by the unions due to the influence of the employees, irrespective of their labor conditions. Even though economic freedom and unions happen to be interconnected, the U.S. employment law has limited the freedom of contract between the employers and members of the staff .
Over the course of the 20th century, the employment law of the United States has decreased the ability of the employees to establish the terms of their employment. Moreover, the law has made it hard for the employers to contract with the potential employees. The employment law in the States has not just managed to solidify the union rights of collective bargaining for the employees but it has forced employees to bargain collectively without taking their wishes into consideration. Employers, on the other hand, do not have the necessary freedom to prevent entering into collective bargaining with the unions. It is their “duty” to bargain “in good faith” meaning they have to basically arrive at a certain outcome that will satisfy the leaders of the unions .
In the United States, more than 22 different states have passed the right-to-work laws which indicate that employees of those states are not compelled to join a union, in spite of whether or not the union promotes collective bargaining practices for the staff as part of the Wagner Act. The Wagner Act was passed in 1935 and it still remains one of the most important union legislations since it termed several labor practices as unfair which had been earlier used by businesses for the purpose of resisting unions. In contrast to the United States, other developed economic powers in the globe are biased towards collective bargaining. By the year 1967, the United States had 21 states which had adopted some sort of labor laws authorizing collective bargaining and then the large majority of states began to adopt them .
Union density can be calculated by taking into account the number of workers who are in a unit for collective bargaining but who are not actually union members. In comparison to other countries of the world, the United States seems to have a lower private sector union density but there is very little correlation between the percentage of employees covered by collective bargaining rights and union density. Therefore, the effects of collective bargaining extend further than the unionized workforce in the United States .
The labor law in America faced its toughest anti-union challenge since the year 1947 in 2011. In several states, organizations that were against the public-employee unions realized a historic chance to revoke the rights of collective bargaining that the public employees gained earlier . It led to aggressive and widespread assault on the collective bargaining rights of the public sector. Even though some states have been affected by significant changes more than others, it cannot be denied that these changes represent some of the most radical revisions to the United States labor laws in decades and they have resulted in the beginning of political freedom.The Railway Labor Act of 1926 was the first federal law to ensure collective bargaining rights to a group of workers . In Wisconsin, a bill was passed which limits the tenure of collective bargaining agreements to a period of one year which is extremely unusual in case of labor law. Act 10 and Act 32 fundamentally shifted the balance of power between municipal employers and municipal employees in terms of wages as well as the conditions of employment. Act 10, however, does not unconstitutionally burden the right of the public employers who decide to take part in statutory collective bargaining .
In the realm of public employee compensation, several of the perceived and real economic problems involve pension plans. The pension benefits of the public sector as well as the rules in the majority of the states are not established through collective bargaining but rather through regulation and statute. However, a few states in the United States have robust collective bargaining rights for the employers and the employees and they can lead to various problems involving pension funding .
Impact of Collective Bargaining on U.S. Employment Laws
Collective bargaining influences the demand aspect of the economy which are usually fixed by collective arguments and it can secure the purchasing power on behalf of the employees. Therefore, collective bargaining basically conditions the demand of the consumers. Apart from the overall effect of buying power of employees, a distributive effect of collective bargaining can also be highlighted. The more the buying centralization and buying coverage, the more egalitarian the pay structure. However, collective bargaining plays a vital role on the supply side. Therefore, collective bargaining affects labor costs and so, affects the level of competitiveness of the companies but it has other side-effects that influence the supply. The supply of professional labor has numerous collective-action issues and constantly faces the risk of market failure in the United States. Being a collective approach to labor market regulation involving the two aspects of the industry, collective bargaining is able to make considerable enhancements to further training as well as vocational training .
Collective bargaining has a significant impact on labor laws since it dictates the overall cost of firing and hiring new employees which, in turn, influences their prospects for employment. Even though mandated employee benefits makes the process of hiring rather costly, the cost of firing can also prove to be substantial in the United States. Employment laws in the United States support the notion of financial freedom since they make sure that employees are not being coerced into becoming a part of a union as a prerequisite for accepting a certain job. Workers are not permitted to bargain on an independent basis with firms that remain covered by the union contracts without the union voicing their opinion. It is true to some extent that the right-to-work laws allow those organizations and entities who do not take part to benefit from collective bargaining offered by the union. However, the laws that coerce individuals to become part of a union as an employment condition clearly flout the freedom of the contract of the individual .
The Supreme Court in the United States has ruled that employees present under the collective bargaining agreement are prevented from going to court on grounds of discrimination claims and they must arbitrate in its stead. In April, 2009, a decision was reached at 14 Penn Plaza LLC v. Pyett that would have a great impact on unionized employers. It stated that employees who were covered under the agreement of collective bargaining claims related to age discrimination had to be arbitrated instead of permitting them to pursue the matter in Court. When the Court ruled in their favor, it narrowed or, in fact, overruled an earlier decision which was reached in 1974 in the Alexander v. Gardner-Denver Co. U.S. 36 and therefore, reaffirmed its agreement on arbitration being a suitable forum for the purpose of addressing employment claims in spite of union members not individually agreeing to the provision for arbitration .
Ruling in favor of the majority in the case, Justice Thomas echoes their sentiments, stating that no legal basis could be found where the court could strike down the arbitrary clause present in the framework of the CBA which had been negotiated freely by the Union as well as the employers and which unmistakably necessitates the union’s individual employees to arbitrate the age discrimination claims in this particular appeal .
The case came to a head after the workers of 14 Penn Plaza who were hired in the position of security guards, sued claims for age discrimination at a federal court in Southern New York based mostly on accusations that 14 Penn Plaza was responsible for transferring them to positions of light duty and porter since their age status was over 40 years. A CBA clause that needs arbitration of every discrimination claim was cited by 14 Penn Plaza who moved to assert the claims to be arbitrated. The motion was effectively denied and the Second Circuit affirmed that the compulsory arbitrating of statutory employment rights clause as stated in a CBA was inapplicable. However, the Supreme Court majority founded its ruling on a thorough analysis of the National Labor Relations Act and the ADEA. Thus, the Supreme Court stressed that an arbitration clause is a necessary element of bargaining .
Many valid arguments were raised by the employees. While two of them concentrated on the wrongness of the arbitrating committee to judge claims of discrimination as well as the lack of ability of the unions to suitable represent the individual rights of the employees, the Court could not be persuaded and they explained that judicial antagonism towards arbitration is valid no more and that it is necessary for the union to fairly present the employee’s individual claims or risk breaching ADEA claims or the duty of fair representation .
The most persuasive argument of the employees was the Second Circuit where they insisted that the Gardner-Denver precluded the CBA arbitration clauses that coerced individual employees to have statutory claims arbitrated. The Court set the Gardner-Denver case apart specifying that the clauses concerned in every case was not explicitly connected to statutory claims but they seemingly considered that claims that were contractual would be related to the grievance procedure of the CBA and that employees would possess the ability to bring the statutory claims to court .
The significance of this case stems from the fact that it serves as a potent weapon against jury trials pertaining to discrimination of employees and uses the grievance procedure of the CBA to resolve the statutory discrimination of the employee. Arbitration requirements that seek to cover such statutory claims can no longer be applied to attack as unenforceable under the Gardner-Denver case as well as its progeny. An employer simply needs to bargain and must comprise overt lingo in the CBA mentioning that the said grievance process covers statutory claims of employment discrimination .
Commercial arbitration and labor laws can be explained through a case study of the 2011 AT&T Mobility LLC v. Concepcion. In this particular case, the United States Supreme Court ruled that FAA or the Federal Arbitration Act pre-empts the contract laws of the state that interfere with the goals of the Act, such as the defense that an arbitration argument is out of the question. This decision can hardly be considered any sort of surprise in spite of its considerable effect on employees as well as the consumers. During the time of the 1980’s onwards, the Court has been responsible for constantly expanding the FAA, the statute government commercial arbitration. This expansion was justified by the Court through the comparison of the FAA to section 301 of the Labor Management Relations Act, a statute whose comparison necessitates courts to defer to labor arbitration in which case the parties tend to agree to the arbitration of their disputes However, the arbitration of labor is considerably different from commercial arbitration. While the former supports the process of collective bargaining, the latter simply happens to be a substitute for litigation. In spite of their differences, during the course of the last two decades, the Court has conflated labor arbitration as well as commercial arbitration. This conflation happens to be quite troubling since labor arbitration can be used as a substitute for litigation instead of a tool which can help support the rights of collective bargaining among the employers as well as the employees. This sudden shift happens to be indicative of a rather sharp departure from the actual purpose of labor arbitration .
Conclusion
Collective bargaining rights appear to be instrumental in obtaining the consent of members of the staff to the terms of employment across organizations in the United States. This sort of consent may be used to boost morale and can substantially influence productivity, especially in cases where the speed of the assembly line is not related to the pace of the workers and where the intensity of the output is rather hard to measure.
Even though the rights of the employees to bargain collectively and unionize happens to be totally consistent with the freedom of individual rights and contract, the labor laws developed in the 20th century by the United States has led to the formation of an environment where unions possess the ability to compromise the freedom of contract by forcing the employees to bargain collectively. In many instances it is seen that the laborers are compelled to join a union and pay the necessary union dues and, in turn, compel the employers to negotiate with the unions for labor contracts even during the times when the individuals prefer to bargain on their own, free from other workers. However, the economic developments in the United States during the 20th century have compromised financial freedom and the powers provided to the unions have restricted the rights of both the employers as well as the workers .
Works Cited
Anderson, A. (2013). Labor and commercial arbitration: The court's misguided merger. Boston College Review (Symposium Issue), 1237-1275.
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Holcombe, R. G., & Gwartney, J. D. (2010). Unions, Economic Freedom, and Growth. Cato Journal , 30 (1), 1-22.
Madison Teachers, Inc. vs Scott Walker, 2012AP2067 (Wisconsin Court of Appeals District IV April 25, 2013).
Saltzman, G. M. (2012). An Anti-Union Tide: The 2011 Attacks on Public-Employees' Bargaining Rights. In The NEA 2012 Almanac of Higher Education (pp. 39-50). Washington D.C.: National Education Association.
Schaner, D. J., & Carter, A. T. (2009, April 3). Supreme Court Holds That Employees Under Collective Bargaining Agreement Are Blocked From Going to Court On Age Discrimination Claims, Must Arbitrate Instead. Retrieved November 21, 2013, from Haynes and Boone: http://www.haynesboone.com/supreme_court_employees_under_collective_bargaining/
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