BUSINESS LAW CHAPTER 31 – Flashcards

A trust or corporate trust is an American English term for a large business with significant market power. It is often used in a historical sense to refer to monopolies or near-monopolies in the United States during the Second Industrial Revolution in the 19th century and early 20th century

law : protecting against unfair business practices that limit competition or control prices

The Sherman Antitrust Act (Sherman Act,[1] 26 Stat. 209, 15 U.S.C. §§ 1-7) is a landmark federal statute in the history of United States antitrust law (or "competition law") passed by Congress in 1890. It prohibits certain business activities that federal government regulators deem to be anti-competitive, and requires the federal government to investigate and pursue trusts. It has since, more broadly, been used to oppose the combination of entities that could potentially harm competition, such as monopolies or cartels. According to its authors, it was not intended to impact market gains obtained by honest means, by benefiting the consumers more than the competitors.

In 1932 Congress passed the Norris-LaGuardia Act, which prohibited federal court injunctions in nonviolent labor disputes. No longer could management obtain an injunction merely by mentioning the word "strike." By taking away the injunction remedy, Congress was declaring that workers should be permitted to organize unions and to use their collective power to achieve legitimate economic ends. The statute led to explosive growth in union membership.

In 1935 Congress passed the Wagner Act, generally known as the National Labor Relations Act (NLRA). This is the most important of all labor laws. A fundamental aim of the NLRA is the establishment and maintenance of industrial peace, to preserve the flow of commerce. The NLRA ensures the right of workers to form unions and encourages management and unions to bargain collectively and productively. For our purposes, §§7 and 8 of the NLRA are the most important.

Section 7 guarantees employees the right to organize and join unions, bargain collectively through representatives of their own choosing, and engage in other concerted activities. This is the cornerstone of union power. With the enactment of the NLRA, Congress put an end to any notion that unions were criminal or inherently illegal by explicitly recognizing that workers could join together and bargain as a group, using their collective power to seek better conditions.

Section 8(a) makes it an unfair labor practice (ULP) for an employer: •To interfere with union organizing efforts • To dominate or interfere with any union •To discriminate against a union member, or • To refuse to bargain collectively with a union.

To administer and interpret the statute and to adjudicate labor cases. The NLRB has two primary tasks: • Representation. The Board decides whether a particular union is entitled to represent a group of employees. • Unfair Labor Practices. The Board adjudicates claims by either the employer or workers that the other side has committed a ULP.

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Because employers began complaining about union abuse in 1947 Congress responded with the Taft-Hartley Act, also known as the Labor-Management Relations Act, designed to curb union abuses. The statute amended §8 of the NLRA to outlaw certain unfair labor practices by unions.

Section 8(b) makes it an unfair labor •To interfere with employees who are exercising their labor rights under §7 • To encourage an employer to discriminate against a particular employee because of a union dispute •To refuse to bargain collectively, or •To engage in an illegal strike or boycott, particularly secondary boycotts

nally, in the 1950s the public became aware that certain labor leaders were corrupt. Some officers stole money from large union treasuries, rigged union elections, and stifled opposition within the organization. In response, in 1959 Congress passed the Landrum-Griffin Act, generally called the Labor-Management Reporting and Disclosure Act (LMRDA). The LMRDA requires union leadership to make certain financial disclosures and guarantees free speech and fair elections within a union.

Preemption: states have no jurisdiction to regulate any labor issue that is governed by federal law.

A court enforces a state statute when no federal law applies. In general, when a federal law such as the NLRA does apply, it controls the outcome. This is the doctrine of preemption

Under §9 of the NLRA, a validly recognized union is the exclusive representative of the employees. This means that the union will represent all of the designated employees, regardless of whether a particular worker wants to be represented. The company may not bargain directly with any employee in the group, nor with any other organization representing the designated employees.

Collective bargaining is a process of negotiation between employers and a group of employees aimed at reaching agreements to regulate working conditions. The interests of the employees are commonly presented by representatives of a trade union to which the employees belong

A collective bargaining unit is the precisely defined group of employees who will be represented by a particular union

The goal of bargaining is a contract, which is called a collective bargaining agreement (CBA).

Three of the most common conflicts are (1) whether an issue is a mandatory subject of bargaining, (2) whether the parties are bargaining in good faith, and (3) how to enforce the agreement.

Typically, unions attempt to expand the number of mandatory subjects, seeking more input into a greater number of issues, while the company argues that subjects are not mandatory and are none of the union's business. In general, a court is likely to find a given issue mandatory when it directly relates to individual workers; when a subject only indirectly affects employees, it is likely to be found not mandatory.

Courts generally find these subjects to be mandatory: pay, benefits, order of layoffs and recalls, production quotas, work rules (such as safety practices), retirement benefits, and in-plant food service and prices (e.g., cafeteria food). Courts usually consider these subjects to be nonmandatory: product type and design, advertising, sales, financing, corporate organization, and location of plants. Can American labor compete with lower paid foreign workers? Should management have the unfettered right to transfer jobs overseas?

Campaign (pitching the idea of a union) Authorization Cards (authorizing the union to act on its behalf) Recognition (after enough signatures, the union wants to be recognized as the sole debater) Petition (petition to be a legitimate union) Election

Subcontracting means that a manufacturer, rather than producing all parts of a product and then assembling them, contracts for other companies, frequently overseas, to make some of the parts. This takes work away from union employees.

A company that subcontracts in order to maintain its economic viability is probably not required to bargain first; however, bargaining is mandatory if the subcontracting is designed to replace union workers with cheaper labor.

The NLRA guarantees employees the right to talk among themselves about forming a union, to hand out literature, and ultimately to join a union.

The NLRA permits the parties to bargain almost any subject they wish, but requires them to bargain certain issues. Mandatory subjects include wages, hours, and other terms and conditions of employment. Either side may propose to bargain other subjects, but neither side may insist upon bargaining them.

The employer may vigorously present anti-union views to its employees, but may not use either threats or promises of benefits to defeat a union drive. An employer may prohibit employees from organizing if the efforts interfere with the company's work. In a retail store, for example, management may prohibit union discussions in the presence of customers, because the discussions could harm business.It is an unfair labor practice for an employer to interfere with a union organizing effort.

Managerial Employees and Confidential Employees.

Confidential employees are generally excluded from the bargaining unit.12 A confidential employee is one who works so closely with executives or other management employees that there would be a conflict of interest if the employee were in the bargaining unit. An executive secretary may be so intimately acquainted with her boss's ideas, plans, and other confidential information that it would be unfair to allow her to join a bargaining unit of other secretaries.

Managerial employees must be excluded from the bargaining unit.10 An employee is managerial if she is so closely aligned with management that her membership in the bargaining unit would create a conflict of interest between her union membership and her actual work. Courts generally find such a conflict only if the employee is substantially involved in the employer's labor policy.

When a union petitions the NLRB for an election, the Board determines whether the proposed bargaining unit is appropriate. The Board generally certifies a proposed bargaining unit if and only if the employees share a community of interest. Employers frequently assert that the bargaining unit is inappropriate. If the Board agrees with the employer and rejects the proposed bargaining unit, it dismisses the union's request for an election. The Board pays particular attention to two kinds of employees: managerial and confidential.

Once the Board has excluded managerial and confidential employees, it looks at various criteria to decide whether the remaining employees should logically be grouped in one bargaining unit, that is, whether they share a community of interest. The Board • Rough equality of pay and benefits, and methods of computing both • Similar total hours per week and type of work • Similar skills and training, and • Previous bargaining history and the number of authorization cards from any different groups within the unit.

No Strike/No Lockout. Most agreements include some form of no-strike clause, meaning that the union promises not to strike during the term of the contract. In turn, unions insist on a no-lockout clause, meaning that in the event of a labor dispute, management will not prevent union members from working. No-strike and no-lockout clauses are both legal.

A closed shop means the employer must hire only union members. Though obviously very attractive to a union, effectively giving it veto power over new hires, a closed shop is not possible. A closed shop is illegal. Indeed, for a union to bargain for a closed shop violates the NLRA.

An agency shop is similar to a union shop. Here, the new hire must pay union fees but need not actually join the organization. In both a union shop and an agency shop, the worker may insist on paying only the percentage of dues that is devoted to collective bargaining, contract administration, and grievances. An employee may refuse to pay, for example, the percentage of union dues devoted to organizing other companies.15

In a union shop, membership in the union becomes compulsory after the employee has been hired. Thus management retains an unfettered right to hire whom it pleases, but all new employees who fit into the bargaining unit must affiliate with the union. A union shop is generally legal.

restrict or even outlaw union shop and agency shop agreements. These statutes typically prohibit a labor organization from demanding that all employees join the union or pay dues. Right to work laws prompt an intense response from both supporters and opponents of organized labor, and the Internet offers plenty of evidence

Concerted action refers to any tactics union members take in unison to gain some bargaining advantage. It is this power that gives a union strength. The NLRA guarantees the right of employees to engage in concerted action for mutual aid or protection. The most common forms of concerted action are strikes and picketing.

Hot Cargo Clause. A clause prohibiting an employer from conducting business with some other person with whom the union has or may have a dispute. Such clauses are illegal unfair labor practices under NLRA Section 8(e). A union will violate the prohibition in section 8(b)(4)(A) against coercing an employer to "cease doing business with any other person" if it uses strikes or any other pressure to force an employer to accept this type of clause

Both the union and the employer must bargain in good faith with an open mind. However, they are not obligated to reach an agreement. This means that the two sides must meet and make a reasonable effort to reach a contract. The goal is good faith bargaining, with the hope that it will lead to a contract and labor peace. Each side must listen to the other's proposals and consider possible compromises. But the NLRA does not require agreement. It is an unfair labor practice for an employer to say, "We can't afford a pay raise now," and then refuse to supply its financial data. An employer could easily destroy good faith bargaining if it were allowed to claim financial impossibility without demonstrating it. Similarly, if an employer argues that it must subcontract work to save money, it must furnish the documents it is relying on in making its proposal.

Sometimes an employer will attempt to make changes without bargaining the issues at all. However, management may not unilaterally change wages, hours, or terms and conditions of employment without bargaining the issues to impasse. "Bargaining to impasse" means that both parties must continue to meet and bargain in good faith until it is clear that they cannot reach an agreement. The goal in requiring collective bargaining is to bring the parties together, to reach an agreement that brings labor peace

The NLRA guarantees employees the right to strike, but with some limitations. A union has a guaranteed right to call a strike if the parties are unable to reach a collective bargaining agreement. A union may call a strike to exert economic pressure on management, to protest an unfair labor practice, or to preserve work that the employer is considering sending elsewhere. Note that the right to strike can be waived. Management will generally insist that the CBA include a no-strike clause, which prohibits the union from striking while the CBA is in force. A strike is illegal in several other situations as well; here we mention the most important.

Once the union agrees to a CBA, it may not strike to terminate the agreement, or modify it, without giving management 60 days' notice. Suppose a union contract expires July 1. The two sides attempt to bargain a new contract, but progress is slow. The union may strike as an economic weapon, but must notify management of its intention to do so and then must wait 60 days. This cooling off period is designed to give both sides a chance to reassess negotiations and to decide whether some additional compromise would be wiser than enduring a strike.

Many states have outlawed strikes by public employees. In some states, the prohibition applies to selected employees, such as firefighters or teachers. In other states, all public employees are barred from striking, whether or not they have a contract. The purpose of these statutes is to ensure that unions do not use the public health or welfare as a weapon to secure an unfair bargaining advantage. However, even employees subject to such a rule may find other tactics to press their cause.

The NLRA prohibits violent strikes. Violence does sometimes occur on the picket line, when union members attempt to prevent other workers from entering the job site. Or a union may stage a sit-down strike, in which members stop working but remain at their job posts, physically blocking replacement workers from taking their places. Any such violence is illegal.

A partial strike occurs when employees stop working temporarily, then resume, then stop again, and so forth. This tactic is particularly disruptive because management cannot bring in replacement workers. A union may either walk off the job or stay on it, but it may not alternate.

After an economic strike, an employer may not discriminate against a striker, but the employer is not obligated to lay off a replacement worker to give a striker his job back. An economic strike is one intended to gain wages or benefits After a ULP strike, a union member is entitled to her job back, even if that means the employer must lay off a replacement worker

Picketing the employer's workplace in support of a strike is generally lawful. Striking workers are permitted to establish picket lines at the employer's job site and to urge all others—employees, replacement workers, and customers—not to cross the line. But the picketers are not permitted to use physical force to prevent anyone from crossing the line. Secondary boycotts are generally illegal. A secondary boycott is a picket line established not at the employer's premises but at the workplace of a different company that does business with the union's employer. Such a boycott is designed to put pressure on the union's employer by forcing other companies to stop doing business with it.