The National Labor Relations Act (NLRA) is the basic federal law that governs unionization and collective bargaining in the United States. When it was originally enacted in 1935, the NLRA was called the Wagner Act, based on the name of its main sponsor, Senator Robert Wagner of New York. The NLRA underwent major amendments in the Taft-Hartley Act of 1947, also called the Labor-Management Relations Act. The NLRA was also amended in 1958 and in 1974.
The NLRA regulates labor relations in almost all private sector businesses in the United States that affect interstate commerce. The NLRA does not cover public employees (who are covered by state labor relations laws), agricultural employees, or employees in the railroad and airline industries. Labor relations in the latter industries are governed by the Railway Labor Act.
Basic Principles of the NLRA
The collective bargaining system in the United States as governed by the NLRA has five basic principles: employee choice, majority rule, exclusive representation, the “appropriate bargaining unit,” and labor and management determination of terms and conditions of employment. The principle of employee choice means that employees in an “appropriate bargaining unit” (to be discussed below) choose whether they wish a union to represent them for collective bargaining purposes, and if so, which union. The principle of majority rule means that the choice of whether employees choose to be represented is made by a majority of the employees in the “bargaining unit.” If a majority of the employees in the bargaining unit do not select representation, the employees in the unit are not represented by a union.
If a majority of the employees in the bargaining unit choose union representation, the principle of “exclusive representation” comes into play. Under this principle, the union selected by a majority of the employees in a bargaining unit represents all the employees in the unit, regardless of whether the employees supported unionization. The employer, in turn, has a legal obligation to bargain with the union in good faith over terms and conditions of employment for the represented employees.
The fourth principle is that the selection process for unionization takes place among the employees in an “appropriate bargaining unit.” An appropriate bargaining unit is a grouping of employees who work for a single employer and have a “community of (employment) interest” or common employment interests. They may be the employees who work in a company facility or the employees in an occupational group or a department or within a particular craft. Employees who have a community of interest are employees with similar supervision, pay structures, tasks, hours of work, responsibilities, and work location.
The fifth principle is union and management determination of terms and conditions of employment. The employer has an obligation to bargain in good faith with the union representing its employees, and the union has an obligation to bargain in good faith with the employer. Neither party has an obligation to agree, however. Terms and conditions of the employment are determined by the parties’ negotiations influenced or affected by the bargaining power of the parties as manifested by their use of economic weapons, such as a strike, a lockout, or employer replacement of strikers. The purpose of these economic weapons is to move the parties toward agreement, even if one party concedes. The law does require that the parties reduce an agreement to writing. An agreement in writing is generally enforced through a grievance procedure ending in binding arbitration.
Basic Rights under the NLRA
The NLRA provides employees the right to bargain collectively, to form, join, and assist unions (called labor organizations), and the right to engage in concerted activity for other mutual aid or protection. Thus the NLRA is not limited to employee attempts to unionize. The NLRA also protects the rights of employees to refrain from any activities related to collective bargaining or unionization.
The employees who may exercise rights under the NLRA are only employees who are considered “employees” for purposes of the act. Persons employed in industries not covered by the NLRA are not considered “employees” for the purposes of the NLRA. Other persons employed who are not considered employees for the purposes of the NLRA are supervisors, managerial employees, independent contractors, and persons whose jobs are related to an employer’s labor relations function.
Administration of the NLRA
The National Labor Relations Board (NLRB), an administrative agency of the federal government, administers the NLRA. The NLRB consists of five members who serve staggered five-year terms. The NLRB members are nominated by the president of the United States and must be confirmed by the U.S. Senate. By the third year of a president’s term, the president will have appointed a majority of the board members. There is a custom, however, that no more than three board members may be affiliated with one political party. Because of these limited terms and appointment by the president with confirmation by the Senate, the NLRB is designed to be an agency that changes its composition, and to some extent its views on labor relation issues, with the changing political consensus in the country.
The NLRB has two main functions: determining representation and preventing unfair labor practices. In its representation function, the NLRB determines whether a unit of nonunion employees wishes to be represented by a union. Upon a showing of “substantial interest,” which is generally demonstrated by at least 30 percent of the employees in a bargaining unit signing union “authorization cards” designating the union as their collective bargaining representative and presenting the cards to an NLRB regional office, the board will initiate its representation procedures. After resolving any disputes regarding the bargaining unit, the typical method for determining representation is through a representation election. During the one-year period from October 2002 through September 2003, the NLRB conducted 2,797 representation elections. Employees chose representation in 1,458 elections (52.1%) and did not choose representation in 1,339 (47.9%). A total of 181,496 employees voted in these elections. Of these, 74,649 were in units that selected representation, and 106,847 were in units that did not select representation.
The second major function of the board is preventing unfair labor practices. An employer commits an unfair labor practice under the NLRA when it discriminates, interferes with, or coerces its employees who are attempting to exercise their rights under the NLRA or when the organization refuses to bargain with a union that represents its employees. A union commits an unfair labor practice when it discriminates against an employee who wishes to exercise rights to refrain from union activity or commits any one of several other types of offenses. During the period from October 2002 through September 2003, the NLRB closed 30,390 unfair labor practice cases. Of these, 23,444 were charges of unfair labor practices against employers.
Although the NLRA has been in existence for more than 70 years, labor relations in the United States and its regulation by the NLRA continues to be controversial and the cause of a wide gap in viewpoints between employers and unions. The NLRA and labor laws in the United States touch on issues of individual rights and collective rights, property rights, and human rights to organize. These are issues that lie at the very heart of the relationship between business, society, and government in the United States.
- Block, R. N. 2003. “Competitiveness and Employment Protection and Creation: An Overview of Collective Bargaining in the United States.” Pp. 13-44 in Bargaining for Competitiveness: Law, Research, and Case Studies, edited by R. N. Block. Kalamazoo, MI: W. E. Upjohn Institute for Employment Research.
- Block, R. N., Beck, J. and Kruger, D. 1996. Labor Law, Industrial Relations, and Employee Choice: The State of the Workplace in the 1990’s. Kalamazoo, MI: W. E. Upjohn Institute for Employment Research.
- Gould, W. B., IV. 2000. Labored Relations: Law, Politics, and the NLRB: A Memoir. Cambridge, MA: Massachusetts Institute of Technology Press.
- Greenhouse, S. 2005.”Labor Board’s Critics See Bias against Workers.” New York Times, January 2.
- Hardin, P. and Higgins, J. E., Jr., eds. 2001. The Developing Labor Law. 4th ed. Washington, DC: BNA Books.
- National Labor Relations Board. 2004. 68th Annual Report. Washington, DC: U.S. Government Printing Office.