Skip to main content

collective bargaining

Select source:

Collective Bargaining


The process through which alabor unionand an employer negotiate the scope of the employment relationship.

A collective bargaining agreement is the ultimate goal of the collective bargaining process. Typically, the agreement establishes wages, hours, promotions, benefits, and other employment terms as well as procedures for handling disputes arising under it. Because the collective bargaining agreement cannot address every workplace issue that might arise in the future, unwritten customs and past practices, external law, and informal agreements are as important to the collective bargaining agreement as the written instrument itself.

Collective bargaining allows workers and employers to reach voluntary agreement on a wide range of topics. Even so, it is limited to some extent by federal and state laws. A collective bargaining agreement cannot accomplish by contract what the law prohibits. For example, a union and an employer cannot use collective bargaining to deprive employees of rights they would otherwise enjoy under laws such as the civil rights statutes (Alexander v. Gardner-Denver Co., 415 U.S. 36, 94 S. Ct. 1011, 39 L. Ed. 2d 147 [1974]). Collective bargaining also cannot be used to waive rights or obligations that laws impose on either party. For example, an employer may not use collective bargaining to reduce the level of safety standards it must follow under the occupational safety and health act (29 U.S.C.A. §§ 651 et seq.). Furthermore, the collective bargaining agreement is not purely voluntary. One party's failure to reach agreement entitles the other to resort to certain legal tactics, such as strikes and lockouts, to apply economic pressure and force agreement. Moreover, unlike commercial contracts governed by state law, the collective bargaining agreement is governed almost exclusively by federal labor law, which determines the issues that require collective bargaining, the timing and method of bargaining, and the consequences of a failure to bargain properly or to adhere to a collective bargaining agreement.

National Labor Relations Act

Congress passed the National Labor Relations Act (NLRA) (29 U.S.C.A. §§ 151 et seq.) in 1935 to establish the right of workers to engage in collective bargaining and other group activities (§ 157). The NLRA also created the national labor relations board (NLRB), a federal agency authorized to enforce the right to bargain collectively (§ 153). The NLRA has been amended several times since 1935, most notably in 1947, 1959, and 1974.

The NLRA governs labor relations for businesses involved in interstate commerce only; thus, it does not protect the collective bargaining interests of all categories of workers. Several classes of employers fall outside the NLRA, including those working for the U.S. government and its wholly owned corporations, states and their political subdivisions, railroads, and airlines. The NLRA also does not protect certain types of workers, such as agricultural workers, independent contractors, and supervisory and managerial employees. But other federal and state laws often provide protection for workers not covered under the NLRA. For example, federal government workers enjoy the right to bargain collectively under the Civil Service Reform Act of 1978, which is patterned largely after the NLRA and enforced by the Federal Labor Relations Authority. Railroads and airlines are generally governed by the Railway Labor Act, the predecessor to the NLRA. Plus many states have adopted statutes similar to the NLRA that protect the rights of state and local government workers to bargain collectively.

Sections 8(a)(5) and 8(b)(3) of the NLRA define the failure to engage in collective bargaining as an unfair labor practice (29 U.S.C.A. § 158[a][5], [b][3]). The aggrieved party may file an unfair labor practice charge with the NLRB, which has the authority to prevent or halt the performance of unfair labor practices (§ 160).

Law of Collective Bargaining

The law of collective bargaining encompasses four basic points:

  • The employer may not refuse to bargain over certain subjects with the employees' representative, provided that the employees' representative has majority support in the bargaining unit.
  • Those certain subjects, called mandatory subjects of bargaining, include wages, hours, and other terms and conditions of employment.
  • The employer and the union are not required to reach agreement but must bargain in good faith over mandatory subjects of bargaining until they reach an impasse.
  • While a valid collective bargaining agreement is in effect, and while the parties are bargaining but have not yet reached an impasse, the employer may not unilaterally change a term of employment that is a mandatory subject of bargaining. But once the parties have reached an impasse, the employer may unilaterally implement its proposed changes, provided that it had previously offered the changes to the union for consideration.

Exclusive Representation A majority of the workers in a bargaining unit must designate a representative with the sole or exclusive right to represent them in negotiations with the employer's representative (29 U.S.C.A. § 159[a]). The employer is not required to bargain with an unauthorized representative (§ 158[a][5]). Once a valid representative has been selected, even workers who do not belong to the union are bound by the collective bargaining agreement and cannot negotiate individual contracts with the employer (J. I. Case Co. v. NLRB, 321 U.S. 332, 64 S. Ct. 576, 88 L. Ed. 762 [1944]). As a corollary, the employer may not extend different terms to any workers in the bargaining unit, even if those terms are more favorable, unless the collective bargaining agreement contemplates flexible terms (Emporium Capwell Co. v. Western Addition CommunityOrganization, 420 U.S. 50, 95 S. Ct. 977, 43 L. Ed. 2d 12 [1975]).

Once the NLRB certifies a union as the exclusive bargaining agent, the union enjoys an irrebuttable presumption of majority support for one year (Fall River Dyeing & Finishing Corp. v. NLRB, 482 U.S. 27, 107 S. Ct. 2225, 96 L. Ed. 2d 22 [1987]). During that year, the employer may not refuse to bargain with the union on the ground that the union does not represent a majority of employees. After that year expires, the employer may rebut the presumption that the union represents a majority of employees by showing either that the union in fact does not enjoy majority support or that the employer has a good faith doubt founded on sufficient objective evidence that the union has lost majority support (NLRB v. Curtin Matheson Scientific, 494 U.S. 775, 110 S. Ct. 1542, 108 L. Ed. 2d 801 [1990]). In cases where the employer doubts that a union enjoys majority support, the employer may "anticipatorily withdraw" recognition of the union by insisting on a collective bargaining agreement that will terminate with the end of the certification year (Rock-Tenn Co. v. NLRB, 69 F.3d 803 [7th Cir. 1995]).

Similarly, a successor employer may not simply refuse to recognize the union for bargaining purposes. Instead, courts have required successor employers to recognize the incumbent union if "substantial continuity" exists between both employers (NLRB v. Burns Security Service, 406 U.S. 272, 92 S. Ct. 1571, 32 L. Ed. 2d 61 [1972]). To determine whether there is substantial continuity, courts will consider, among other factors, whether both employers are engaged in the same business, whether the employees perform substantially similar tasks under both employers, whether the customer base remains much the same, and whether the successor employer continues to use the same industrial or business processes as its predecessor (Frye v. Specialty Envelope, 10 F.3d 1221 [6th Cir. 1993]).

Mandatory Subjects of Bargaining Although the parties need not bargain over every conceivable topic, they must bargain in good faith over mandatory subjects of bargaining, which include wages, hours, and other "terms and conditions of employment" (29 U.S.C.A. § 158[d]). Because these mandatory subjects are very broad, courts over the years have attempted to set standards for determining whether a specific bargaining topic is mandatory. Generally, terms and conditions of employment encompass only issues that "settle an aspect of the relationship between the employer and the employees" (Allied Chemical & Alkali Workers of America v. Pittsburgh Plate Glass Co., 404 U.S. 157, 92 S. Ct. 383, 30 L. Ed. 2d 341 [1971]).

If one party wishes to bargain over a mandatory subject, it is an unfair labor practice for the other to refuse. Other topics are permissive subjects of bargaining, and it may be an unfair labor practice for a party to demand bargaining over them (NLRB v. Wooster Division of Borg-Warner Corp., 356 U.S. 342, 78 S. Ct. 718, 2 L. Ed. 2d 823 [1958]). Thus, although the parties must bargain to an impasse over mandatory subjects of bargaining before implementing unilateral changes, they may change permissive subjects unilaterally without bargaining and cannot be forced to bargain over such changes.

Although most of the decisions an employer makes will affect employees, not all are mandatory subjects of bargaining. Some decisions, such as advertising and product selection, bear such an indirect relationship to and have such a minimal effect on the employment relationship that they are almost certainly only permissive subjects of bargaining. Other decisions, such as those regarding hiring, layoffs, and plant rules, are so directly relevant to the employment relationship that they are almost certainly mandatory subjects of bargaining. Still other decisions are not aimed at the employment relationship but have a sizable effect on it and are thus difficult to categorize as permissive or mandatory bargaining subjects (First National Maintenance Corp. v. NLRB, 452 U.S. 666, 101 S. Ct. 2573, 69 L. Ed. 2d 318 [1981] [citing Fibreboard Paper Products v. NLRB, 379 U.S. 203, 85 S. Ct. 398, 13 L. Ed. 2d 233 (1964) [Stewart, J., concurring]). The Supreme Court has attempted on several occasions to define the scope of mandatory bargaining for this third category of management decisions.

In Fibreboard, the Supreme Court held that under its three-part analysis, an employer's decision to subcontract out a portion of its operations was a mandatory bargaining subject. First, subcontracting falls within the literal meaning of the NLRA phrase "terms and conditions of employment." Second, determining that subcontracting is a mandatory bargaining subject effectuates the purposes of the NLRA by "bringing a problem of vital concern to labor and management within the framework established by Congress as most conducive to industrial peace"—namely, collective bargaining. Third, other employers in the same industry have addressed contracting out in the bargaining process, rather than leaving it to managerial discretion. Justice potter stewart added in his concurrence that subjects that "lie at the core of entrepreneurial control," such as decisions about "the commitment of investment capital and the basic scope of the enterprise," are not mandatory subjects of bargaining.

In First National Maintenance, the Court addressed whether an employer's decision to terminate certain operations entirely constituted a mandatory subject of bargaining. The Court, relying primarily on Justice Stewart's concurrence in Fibreboard, held that the decision to terminate all operations at a particular site was an economically motivated management decision that was separate from the employment relationship, even though it obviously affected job security. The Court noted, however, that the effects of the employer's decision, such as severance pay and benefits, were mandatory subjects of bargaining under section 8(a)(5) of the NLRA. Accordingly, under this Fibreboard-First National Maintenance framework, most significant economic decisions, such as plant shutdowns, layoffs, and relocations, are not mandatory subjects of bargaining, even though the employer must engage in "effects bargaining" as a result of them.

Duty to Bargain in Good Faith During the bargaining process, the parties are not required by law to reach agreement. They must, however, bargain in good faith (29 U.S.C.A. § 158[d]). Although good faith is a somewhat subjective concept, courts will look to the entire circumstances surrounding bargaining, including behavior away from the bargaining table such as pressure and threats (NLRB v. Billion Motors, 700 F.2d 454 [8th Cir. 1983]). Most authorities agree that an absolute refusal to bargain constitutes bad faith (Wooster).

Even so, one party's insistence on a certain contract term is not necessarily an unfair labor practice. The NLRB and the courts that review and enforce its orders are unwilling to substitute their judgment for that of the parties and will not judge the content of collective bargaining agreements (NLRB v. American National Insurance Co., 343 U.S. 395, 72 S. Ct. 824, 96 L. Ed. 1027 [1952]). In addition, the use of "economic weapons" such as pressure tactics, picketing, and strikes to force bargaining concessions is not necessarily bad faith bargaining (NLRB v. Insurance Agents' International Union, 361 U.S. 477, 80 S. Ct. 419, 4 L. Ed. 2d 454 [1960]).

The refusal to comply with an information request may constitute bad faith. For example, in NLRB v. Truitt Manufacturing Co., 351 U.S. 149, 76 S. Ct. 753, 100 L. Ed. 1027 (1956), the employer committed an unfair labor practice when it refused to supply the union with information supporting its claim that it could not afford to pay a wage increase the union demanded. Over the years, courts have clarified that employers' claims of an inability to pay requested wage increases are conceptually distinct from claims that wage increases will result in a competitive disadvantage (United Steelworkers of America v. NLRB, 983 F.2d 240 [D.C. Cir. 1993]). Accordingly, in Graphic Communications International Union Local 508 v. NLRB, 977 F.2d 1168 (7th Cir. 1992), the court held that an employer was not required to disclose financial information unless it had asserted specifically that it was unable to pay a requested wage increase; an employer's claim that a wage increase would lead to competitive disadvantage did not require it to disclose wage information.

However, a refusal to provide requested information is not necessarily an unfair labor practice. For example, in Detroit Edison Co. v. NLRB, 440 U.S. 301, 99 S. Ct. 1123, 59 L. Ed. 2d 333 (1979), the Supreme Court held that an employer's refusal to provide a union with confidential test results was not an unfair labor practice, where the company would have violated the right to privacy of the tested employees by disclosing the results.

Unilateral Changes During the time a collective bargaining agreement is in effect, the employer may not change a working condition that is a mandatory subject of bargaining, without first bargaining with the union (29 U.S.C.A. § 158[d]). Even after the collective bargaining agreement expires, the employer must maintain the status quo and may not unilaterally change mandatory subjects of bargaining, until the parties have reached an impasse (Louisiana Dock Co. v. NLRB, 909 F.2d 281 [7th Cir. 1990]). This proscription against unilateral changes continues even if the employer disputes that the union is the exclusive representative (Livingston Pipe & Tube v. NLRB, 987 F.2d 422 [7th Cir. 1993]; NLRB v. Parents & Friends of the Specialized Living Center, 879 F.2d 1442 [7th Cir. 1989]). Once good faith negotiations between the parties "exhaust the prospect of concluding agreement," the parties have reached an impasse, and implementing unilateral changes in working conditions does not constitute an unfair labor practice (NLRB v. Plainville Ready Mix Concrete Co., 44 F.3d 1320 [6th Cir. 1995]; United Paperworkers International Union v. NLRB, 981 F.2d 861 [6th Cir. 1992]; Southwest Forest Industry v. NLRB, 841 F.2d 270 [9th Cir. 1988]).

A pre-impasse unilateral change to a mandatory subject of bargaining generally constitutes an unfair labor practice, even though employees may regard the change as beneficial. According to the Supreme Court, unilateral changes minimize the influence of collective bargaining by giving employees the impression that a union is unnecessary to achieve agreement with the employer. For example, in NLRB v. Katz, 369 U.S. 736, 82 S. Ct. 1107, 8 L. Ed. 2d 230 (1962), the employer unilaterally changed its sick leave policy and increased its wage rates without first bargaining over them with the union. The Court ruled that the employer's unilateral change undermined the union's ability to negotiate over sick leave, wages, and other terms of employment.

One area of ongoing conflict between unions and employers concerns when wage increases constitute mandatory subjects of bargaining. In Acme Die Casting v. NLRB, 26 F.3d 162 (D.C. Cir. 1994), the court of appeals analyzed the employer's historical practice of establishing the frequency and size of wage increases and determined that whether to grant a wage increase was not an issue within the employer's discretion and could not be decided without bargaining with the union (see also Daily News of Los Angeles v. NLRB, 979 F.2d 1571 [D.C. Cir. 1992] [remanding to NLRB to determine whether wage increases that are consistent in terms of timing but discretionary in terms of amount are considered mandatory subjects of bargaining]).

One area of ongoing conflict between unions and employers concerns when wage increases constitute mandatory subjects of bargaining. In Acme Die Casting v. NLRB, 26 F.3d 162 (D.C. Cir. 1994), the court of appeals analyzed the employer's historical practice of establishing the frequency and size of wage increases, and determined that whether to grant a wage increase was not an issue within the employer's discretion and could not be decided without bargaining with the union.

As of 2003, the U.S. Supreme Court had not resolved this issue of whether wage increases were mandatory subjects of collective bargaining, so the federal courts of appeals have developed rules of their own to govern this question. Where an employer does not exercise discretion in determining the timing or the amount of a wage increase, then the issue of wage increases is a mandatory subject for collective bargaining. NLRB v. Beverly Enter.-Mass., Inc., 174 F.3d 13 (1st Cir. 1999). Moreover, even if an employer exercises a certain amount of discretion in determining wage increase, such as an annual increase to cover the costs of living, this fact does not prevent the wage increase from becoming a mandatory subject if the company has a longstanding practice of granting such pay increases. NLRB v. Pepsi-Cola Bottling Co., No. 00-1969, 2001 WL 791645 (4th Cir. July 13, 2001).

Once the parties have reached an impasse, the employer may implement unilateral changes to mandatory bargaining subjects as long as it has previously proposed those changes to the union (NLRB v. Plainville Ready Mix Concrete Co., 44 F.3d 1320 [6th Cir. 1995]; NLRB v. Emsing's Supermarket, 872 F.2d 1279 [7th Cir. 1989]).

further readings

Aidt, Toke, and Zafiris Tzannatos. 2002. Economic Effects in a Global Environment. Washington, D.C.: World Book.

Bagchi, Aditi. 2003. "Unions and the Duty of Good Faith in Employment Contracts." Yale Law Journal 112 (May).


Employment Law; Good Faith; Picketing.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Collective Bargaining." West's Encyclopedia of American Law. . 20 Oct. 2016 <>.

"Collective Bargaining." West's Encyclopedia of American Law. . (October 20, 2016).

"Collective Bargaining." West's Encyclopedia of American Law. . Retrieved October 20, 2016 from

Collective Bargaining


COLLECTIVE BARGAINING is a process of negotiated rule-making between a group of unionized workers and the management of one or more firms. In theory the system is one of voluntary accommodation between two private parties, but in reality much supporting legislation, and its vigorous enforcement, is essential to the health of this system. Some form of collective bargaining has existed since the late nineteenth century, but this practice proved routine—albeit for only one-quarter to one-third of all American workers—only during the middle decades of the twentieth century.

Collective Bargaining in the Late Nineteenth and Early Twentieth Centuries

The phrase "collective bargaining" was coined by British labor reformers Sidney and Beatrice Webb in the 1890s, but by that time, forms of collective accommodation between unionized workers and employers were already common in the United States. In the printing crafts, metal trades, commercial construction, and coal mining, as well as among skilled railroad personnel, practices known as "arbitration," "conciliation," "conferring," "trade agreements," and union "legislation" governed the relationship between organized workers and their collectively associated employers. These systems were unstable—and in the Lochner v. New York judicial era, legally suspect—but where unions had the power they were able to "legislate" a work, wage, or hour standard and then use the strike weapon to impose it on as many industry shops and firms as possible. Thus, in the years before World War I (1914–1918), collectively bargained work rules were of far less consequence than employer recognition of trade unionism itself. The latter was often bitterly resisted, but when accepted, it implied employer accommodation to a preexisting set of union standards.

Advocates of collective bargaining in the early decades of the twentieth century thought it essential for three reasons. First and foremost, a system of peaceful and routine bargaining would go a long way—or so it was thought—toward the elimination of the industrial strife and violence that had been such an alarming feature of American industrialization. Since the railroads were both a vital service and the scene of some of the most dramatic strike battles, Congress enacted the first laws facilitating collective bargaining in this industry. The Railway Labor Act of 1926 sanctioned the power and bargaining role of the powerful railroad brotherhoods, in return for which they accepted a legal regime that made strikes virtually illegal.

Second, collective bargaining stood for "industrial democracy," an idea that flourished during the Progressive Era and the early years of the New Deal. There could be no "political democracy," Supreme Court Justice Louis Brande is told the U.S. Industrial Commission in 1915, without an "industrial democracy," giving workers an actual participation in the governance of the firms for which they worked. And Harvard's Sumner Slichter, the dean of American labor economists after World War I, defined collective bargaining as a procedure "introducing civil rights into industry, that is, of requiring that management be conducted by rule rather than by arbitrary decision." Thus, quasi-judicial grievance and arbitration systems, pioneered in the needle trades, would pacify and democratize day-to-day industrial life. Such grievance procedures became an essential, prominent feature of all collective bargaining contracts negotiated in the years after 1940.

And finally, collective bargaining promised to make American capitalism work, especially during the crisis of the Great Depression, when "under consumption," unemployment, and regional wage inequalities generated a vicious downward spiral. "If the wages of mill workers in the South should be raised to the point where workers could buy shoes," asserted Frances Perkins, President Franklin D. Roosevelt's Secretary of Labor, "that would be a social revolution." Thus collective bargaining in the New Deal era was designed to increase mass purchasing power, eliminate the southern wage differential, and equalize wages within each industry, there by curbing the cutthroat competition that so many reformers—and some businessmen—sought to regulate.

In 1932, even before Roosevelt came to power, Congress passed the Norris-La Guardia Act, which strengthened the unions by curbing antistrike injunctions and proscribing some employer antiunion tactics. Three years later the National Labor Relations Act, sponsored by New York Senator Robert Wagner, put the federal government even more forcefully in support of a policy "encouraging the practice and procedure of collective bargaining." The 1935 Wagner Act did so by eliminating company-sponsored unions, banning a series of unfair employer labor practices, protecting union organizing rights, and establishing a National Labor Relations Board (NLRB) empowered to determine union jurisdictions and certify unions, often after holding an on-site election to determine the will of employees. The Wagner Act defined as an "unfair labor practice" employer failure to bargain with duly designated employee representatives.

Collective Bargaining's Heyday

The heyday of collective bargaining lasted from 1937, when the affiliates of the new Committee for Industrial Organizations negotiated first contracts with General Motors and U.S. Steel, until the 1970s and early 1980s when union density plunged, management hostility increased, and government indifference robbed the system of its internal vitality and pattern-setting potency. Four elements characterized collective bargaining during this half-century heyday. First, unionism grew rapidly during the 1930s and 1940s, when millions of here to fore marginalized workers—many of them immigrants (or the sons and daughters of immigrants) or African American migrants—took advantage of NLRB and War Labor Board policies to achieve the industrial citizenship promised by New Deal proponents of an American industrial democracy. Union membership grew from 3 million to 15 million in the twenty years after 1933, reaching about one-third of the nonfarm workforce in the early 1950s. In mature, unionized industries, like auto, steel, and rail transport, more than 90 percent of all workers were covered by collective bargaining contracts. Thereafter, union density slowly declined, even as 3 million public employees were recruited to union ranks in the 1960s and 1970s.

Second, collective bargaining did not generate the industrial peace promised by its proponents. Strikes were large and frequent, not only in the 1930s, but in the next three decades as well. Except in the South, corporations did not try to break the unions, but they were quite willing to "take a strike" in order to test union will power before and during collective bargaining negotiations. Except for 1919, a year of near-revolutionary expectations, all of the largest and longest strikes in American history took place between 1945 and 1973, the mature years of institutionalized collective bargaining. Strikes became less frequent and more predictable as the standard term of the collective bargaining contract grew from one or two years in the 1940s to three or five years in the 1960s and 1970s.

Third, collective bargaining did raise and equalize wages across a wide spectrum of America's working population. Real wages doubled between 1940 and 1973. Economists debate the extent to which the unions themselves were responsible for this achievement, because these were also years of enormous productivity growth and Keynesian fiscal stimulus. But collective bargaining exerted a continuous upward pressure within almost all of the nation's key industries, there by tempering the regional, racial, and skill differentials that had long divided the working population. Uniform, company-wide wage standards were essential in order to reinforce a sense of solidarity within the workforce and deprive managers of an incentive to shift work to low-paid regions, factories, or departments. Beginning in 1948, many unions negotiated contracts that linked wages to the government's cost-of living index. Additional annual pay awards assured steady growth in real income. In its most fully developed form, "pattern bargaining" made wages and benefits more equitable across a range of industries, first in steel, autos, and rubber, and later in meatpacking, electrical products, long-distance trucking, the airlines, and metropolitan construction work. Between the 1940s and the 1960s, wages in the packinghouse industry tracked those in steel, while nonunion white-collar salaries and benefits in unionized heavy industry were invariably boosted after labor and management negotiated a new contract.

Fourth, during these years the scope of collective bargaining expanded from wages, hours, and working conditions to encompass a set of fringe benefits that included pensions, supplemental unemployment insurance, health care, longer vacations, and a variety of employment guarantees. This development was unique to the United States, largely because of the underdeveloped character of the American welfare state. Thus, the growth of a privately negotiated welfare system began in the late 1940s when it became clear that President Harry S. Truman's Fair Deal was incapable of either bolstering Social Security or enacting national health insurance. In 1949 and 1950, big unions like the United Steel workers and the United Automobile Workers negotiated pension and health insurance benefit packages that later spread to other industry sectors, some nonunion. By the mid-1970s about two-thirds of all American workers held some kind of company-paid health insurance, and about half were covered by an employer-paid pension.

The Eclipse of Collective Bargaining

In the years after 1980, the collective bargaining system became increasingly marginal to the wage standards of American workers and to the shape of the political economy. It was weakened from within and battered from without. Since the 1940s, when Congress passed the Taft-Hartley Act over President Truman's veto, the legal and administrative regime had become more hostile toward unionism and collective bargaining. Taft-Hartley effectively ghettoized private-sector unionism within a Northeastern–Upper Midwest–Pacific Coast blue-collar archipelago. Foremen, managers, and professionals were deprived of NLRB protections, and the president was empowered to suspend strikes for an eighty-day "cooling off" period. In the South and the mountain West, Taft-Hartley enabled conservative state legislators to pass "right-to-work" laws that made organizing more difficult. Subsequent judicial rulings enabled employers to intimidate workers participating in union certification elections, and in 1964, the Supreme Court declared outside the scope of collective bargaining those issues, such as production planning and investment decisions, that "lie at the core of entrepreneurial control."

After the onset of the 1973–1974 recession, globalized competition in the world economy added greatly to these political and legal difficulties. Collective bargaining works best in fully organized, oligopolistic industries, where wages and working conditions are uniform among competing firms. The emergence of an internationally competitive market in steel, electrical products, automobiles, apparel, and other products enhanced unilateral management efforts to set wage-and work-rule standards. Employers did this in two ways: by moving production and services to the American South or to low-wage nations, or by "concession bargaining" with a unionized workforce. President Ronald Reagan's 1981 destruction of the Professional Air Traffic Controller's Organization signaled that government policy had turned hostile to unionism, while a simultaneous series of dramatic wage and workforce reductions at the hard-pressed Chrysler Corporation opened the door to a management offensive at hundreds of unionized firms.

With wages and fringe benefits now back in competitive play, management's resistance to unionism hardened, as did its hostility to long-established norms generated by a half-century of collective bargaining. Through the 1980s and 1990s, it was once again routine for a strike to end with the destruction of the trade union that called it. Ballooning health care costs generated a bitter set of bargaining disputes, and pattern bargaining was eliminated in former bastions like steel, trucking, electrical products, and coal mining. Corporations deployed the most sophisticated legal and psychological tools to persuade workers to eschew unionism, and where the NLRB did certify a union election victory, more than half of all negotiations failed to secure a first contract. By 2002, union density had plunged to less than 14 percent.

Collective bargaining is still practiced in the twenty-first century, but among many of its union advocates it is no longer the most hopeful road toward either high wages or an updated industrial democracy. Key service-sector trade unions have sought to fulfill these goals through a set of increasingly political initiatives. In the janitorial, hotel, and health care sectors of the economy, firm centered collective bargaining has been linked, and in some cases subordinated, to political and social mobilizations designed to advance the well-being of all workers, regardless of their union status.


Bronfenbrenner, Kate, et al. Organizing to Win: New Research on Union Strategies. Ithaca, N.Y.: ILR Press, 1998.

Dubofsky, Melvin. The State and Labor in Modern America. Chapel Hill: University of North Carolina Press, 1994.

Fraser, Steven. Labor Will Rule: Sidney Hillman and the Rise of American Labor. New York: Free Press, 1991.

Freeman, Joshua. Working-Class New York: Life and Labor Since World War II. New York: The New Press, 2000.

Freeman, Richard, and James Medoff. What Do Unions Do? New York: Basic Books, 1984.

Harris, Howell John. The Right to Manage: Industrial Relations Policies of American Business in the 1940s. Madison: University of Wisconsin Press, 1982.

Lichtenstein, Nelson. Walter Reuther: The Most Dangerous Man in Detroit. Urbana: University of Illinois Press, 1997.

———. State of the Union: A Century of American Labor. Princeton, N.J.: Princeton University Press, 2002.

Lichtenstein, Nelson, and Howell John Harris. Industrial Democracy in America: The Ambiguous Promise. New York: Cambridge University Press, 1993.

Montgomery, David. The Fall of the House of Labor: The Workplace, the State, and American Labor Activism, 1865–1925. New York: Cambridge University Press, 1987.

Moody, Kim. Workers in a Lean World: Unions in the International Economy. New York: Verso, 1997.

Nissen, Bruce, ed. U.S. Labor Relations, 1945–1989: Accommodation and Conflict. New York: Garland Publishing, 1990.

O'Brien, Ruth. Workers' Paradox: The Republican Origins of New Deal Labor Policy, 1886–1935. Chapel Hill: University of North Carolina Press, 1998.

Stebenne, David. Arthur Goldberg: New Deal Liberal. New York: Oxford University Press, 1996.


See alsoAir Traffic Controllers Strike ; National Labor Relations Act ; Strikes ; Trade Unions ; Wages and Hours of Labor, Regulation of .

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Collective Bargaining." Dictionary of American History. . 20 Oct. 2016 <>.

"Collective Bargaining." Dictionary of American History. . (October 20, 2016).

"Collective Bargaining." Dictionary of American History. . Retrieved October 20, 2016 from

Collective Bargaining


Collective bargaining is "a process of negotiation between management and union representatives for the purpose of arriving at mutually acceptable wages and working conditions for employees" (Boone and Kurtz, 2006, pp. 424425). Various methods may be used in the bargaining process, but the desired outcome is always mutual acceptance by labor and management of a collective bargaining agreement or contract.


The collective bargaining process begins when the majority of workers of an organization vote to be represented by a specific union. The National Labor Relations Board (see Labor Unions) then certifies the union. At this point, the management of the organization must recognize the union as the collective bargaining agent for all the employees of that organization. Once this part of the process is completed, collective bargaining can begin.

Bargaining always takes place between labor and management, but negotiations can include more than one group of workers and more than one employer. Single-plant, single-employer agreements are the most common. However, if an employer has more than one plant or work site, multiplant, single-employer agreements can be bargained. Several different union groups representing the workers of the same employer can use coalition bargaining. Industry wide bargaining involves one national union bargaining with several employers of a specific industry.

Many different negotiation styles can be used when union and labor representatives sit down at the bargaining table. The two basic modes of bargaining are traditional bargaining and partnership bargaining, though there are many variations of each style.

The traditional style of bargaining has been used since collective bargaining began between management and the early labor unions (see Labor Unions). It is an adversarial style of negotiating, pitting one side against the other with little or no understanding of, or education about, the other on the part of either party. Each side places its demands and proposals on the table, and the other side responds to them with counterproposals. The process is negative and involves a struggle of give-and-take on most issues. Even with its negative connotations, however, the traditional style of negotiating is still used effectively in bargaining many union contracts.

The partnership style of bargaining is the more modern approach to negotiations. It strives for mutual understanding and common education on the part of both labor and management, and it focuses on goals and concerns common to both parties. Because of its emphasis on each side's being aware of the issues concerning the other side, partnership-style bargaining is also known as interest-based bargaining. In this process, labor and management each list and explain their needs, and the ensuing discussion revolves around ways to meet those needs that will be not only acceptable but also beneficial to both parties. This style of bargaining is very positive and imparts a much more congenial atmosphere to the negotiating process. Many modern union-management contracts are bargained very successfully using the partnership style.

A blending of the traditional and partnership styles is widely used in labor-management negotiations. The combination approach is used for many reasons, including the fact that many union and management leaders are more familiar with the traditional style. However, with today's more participatory relationship between labor and management in the workplace, the partnership style is becoming more accepted and is being used more frequently. The negotiating process may also include both styles of bargaining because of the variety of issues being negotiated. The partnership style may be used to negotiate certain issues, while the traditional style may be invoked when bargaining other terms.


Labor unions were formed to help workers achieve common goals in the areas of wages, hours, working conditions, and job security. These issues still are the focus of the collective bargaining process, though some new concepts have become the subjects of negotiations. Table 1 lists the issues most often negotiated in union contracts.


Union contracts are usually bargained to remain in effect for two to three years but may cover longer or shorter periods of time. The process of negotiating a union contract, however, may take an extended period of time. Once the management and union members of the negotiating team come to agreement on the terms of the contract, the union members must accept or reject the agreement by a majority vote. If the agreement is accepted, the contract is ratified and becomes a legally binding agreement remaining in effect for the specified period of time.

If the union membership rejects the terms of the agreement, the negotiating teams from labor and management return to the bargaining table and continue to negotiate. This cycle can be repeated several times. If no agreement can be reached between the two teams, negotiations are said to have broken down, and several options become available.

Mediation is usually the first alternative when negotiations are at a stalemate. The two parties agree voluntarily to have an impartial third party listen to the proposals of both sides. It is the mediator's job to get the two sides to agree to a settlement. Once the mediator understands where each side stands, he or she makes recommendations for settling their differences. The mediator merely makes suggestions, gives advice, and tries to get labor and management to compromise on a solution. Agreement is still voluntary at this point. The mediator has no power to force either of the parties to settle the contract, though often labor and management do come to agreement by using mediation.

If mediation fails to bring about a settlement, the next step can be arbitration, which can be either compulsory or voluntary. Compulsory arbitration is not often used in labor-management negotiations in the United States. Occasionally, however, the federal government requires union and management to submit to compulsory arbitration. In voluntary arbitration, both sides agree to use the arbitration process and agree that it will be binding.

Collective bargaining issues
Wages Hours Working Conditions Job Security
Regular Compensation Regular Work Hours Rest Periods Seniority
Overtime Compensation Overtime Work Hours Grievance Procedures Evaluation
Incentives Vacations Union Membership Promotion
Insurance Holidays Dues Collection Layoff
Pensions Recall

As in mediation, an impartial third party serves in the arbitration process. The arbitrator acts as a judge, listening to both sides and then making a decision on the terms of the settlement, which becomes legally binding on labor and management. Ninety percent of all union contracts use arbitration if the union and management can not come to agreement (Boone and Kurtz, 2006).


If the collective bargaining process is not working as a way to settle the differences between labor and management, both sides have weapons they can use to bolster their positions. One of the most effective union tactics is the strike or walkout. While on strike, employees do not report to work and, of course, are not paid. Strikes usually shut down operations, thus pressuring management to give in to the union's demands. Some employees, even though allowed to belong to unions, are not allowed to strike. Federal employees fall into this category. The law also prohibits some state and municipal employees from striking.

During a strike, workers often picket at the entrance to their place of employment. This involves marching, carrying signs, and talking to the media about their demands. The right to picket is protected by the U.S. Constitution as long as it does not involve violence or intimidation. Problems sometimes arise during strikes and picketing when management hires replacement workers, called scabs or strikebreakers, who need to cross the picket line in order to do the jobs of the striking workers.

The boycott is another union strategy to put pressure on management to give in to the union's demands. During a primary boycott, not only union members but also members of the general public are encouraged to refuse to conduct business with the firm in dispute with the union.

Though it is rarely done, management may use the lockout as a tactic to obtain its bargaining objectives. In this situation, management closes down the business, thus keeping union members from working. This puts pressure on the union to settle the contract so employees can get back to their jobs and receive their wages.

Management sometimes uses the injunction as a strategy to put pressure on the union to give in to its demands. An injunction is a court order prohibiting something from being done, such as picketing, or requiring something to be done, such as workers being ordered to return to work.


Once a collective bargaining agreement is settled and a union contract is signed, it is binding on both the union and management. However, disagreements with contract implementation can arise and violations of the contract terms can occur. In these cases, a grievance, or complaint, can be filed. The differences that must be resolved are usually handled through a step-by-step process that is outlined in the collective bargaining agreement. The grievance procedure begins with a complaint to the worker's immediate supervisor and, if unresolved at that level, moves upward, step by step, to higher levels of management. If no resolution is found at any of these levels, the two parties can agree to have the grievance submitted to an impartial outside arbitrator for a decision binding to the union and management.

Collective bargaining is a successful way for workers to reach their goals concerning acceptable wages, hours, and working conditions. It allows workers to bargain as a team to satisfy their needs. Collective bargaining also allows management to negotiate efficiently with workers by bargaining with them as a group instead of with each one individually. Though traditional bargaining can be negative and adversarial, it does produce collective bargaining agreements between labor and management. Partnership bargaining can lead to increased understanding and trust between labor and management. It is a positive, cooperative approach to collective bargaining that also culminates in contracts between labor and management.

see also Labor Unions; Negotiation


Boone, Louis E., and Kurtz, David L. (2006). Contemporary Business 2006. Mason, OH: Thomson/South-Western.

Davey, Harold W., Bognanno, Mario F., and Estenson, David L. (1982). Contemporary Collective Bargaining (4th ed.). Englewood Cliffs, NJ: Prentice-Hall.

Miernyk, William H. (1973). The Economics of Labor and Collective Bargaining (2nd ed.). Lexington, MA: Heath.

Voos, Paula B., ed. (1994). Contemporary Collective Bargaining in the Private Sector. Madison, WI: Industrial Relations Research Association.

Wray, Ralph D., Luft, Roger L., and Highland, Patrick J. (1996). Fundamentals of Human Relations. Cincinnati, OH: South-Western Educational Publishing.

Paula Lee Luft

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Collective Bargaining." Encyclopedia of Business and Finance, 2nd ed.. . 20 Oct. 2016 <>.

"Collective Bargaining." Encyclopedia of Business and Finance, 2nd ed.. . (October 20, 2016).

"Collective Bargaining." Encyclopedia of Business and Finance, 2nd ed.. . Retrieved October 20, 2016 from

Collective Bargaining


Collective bargaining is a formal negotiation process in which representatives of labor (employees) and management (employers) meet to hammer out a written, binding labor agreement. The purpose of labor agreements is to find common ground on such issues as wages, benefits, seniority, job security, grievance resolution, and working conditions. Collective bargaining offers labor and management a way to resolve differences so as to avoid a strike or lockout. By bargaining as a group rather than individually, workers no longer have to compete against each other for improved pay and benefits and can push for such improvements without fear of losing their jobs. Collective bargaining may take place between a single firm and labor organization, between the workers and management of an entire industry, or at the national level between the employees and management of several industries. The agreement produced by collective bargaining may be several hundred pages in length and remains in effect for a limited, specified period of time. If labor and management cannot come to agreement on their own they may submit their dispute to a third party in an arbitration proceeding.

The term collective bargaining first came into use in the United States at the end of the nineteenth century, when America's national labor unions were organizing to win decent wages and working conditions in an era that was characterized by low pay, long hours, and harsh work environments. The Clayton Anti-Trust Act of 1914 gave labor the legal right to strike, but it took the devastating effects of the Great Depression to highlight the need for fundamental labor reform. The National Labor Relations Act of 1935 established a set of laws to encourage labor and management to resolve labor issues peacefully and "in good faith," and it explicitly gave labor the right to form unions and bargain collectively for better wages and working conditions. This act also established the National Labor Relations Board (NLRB) to ensure that union elections were fair, to determine who could bargain on behalf of employees, and to promote equitable labor practices. By creating a formal, legal, defined system for negotiating differences between labor and management, collective bargaining has generally improved wages, benefits, and working conditions for U.S. workers and made them more uniform across industries and regions of the United States.

See also: Clayton Anti-Trust Act, Closed Shop, Labor Movement, Labor Unionism

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Collective Bargaining." Gale Encyclopedia of U.S. Economic History. . 20 Oct. 2016 <>.

"Collective Bargaining." Gale Encyclopedia of U.S. Economic History. . (October 20, 2016).

"Collective Bargaining." Gale Encyclopedia of U.S. Economic History. . Retrieved October 20, 2016 from

collective bargaining

collective bargaining, in labor relations, procedure whereby an employer or employers agree to discuss the conditions of work by bargaining with representatives of the employees, usually a labor union. Its purpose may be either a discussion of the terms and conditions of employment (wages, work hours, job safety, or job security) or a consideration of the collective relations between both sides (the right to organize workers, recognition of a union, or a guarantee of no reprisals against the workers if a strike has occurred). The merits of collective bargaining have been argued by both opponents and proponents of the process; the former maintain that it deprives the worker of his individual liberty to dispose of his service, while the latter point out that without the union's protection the worker is subject to the dictation of the employer. As an essential process in labor relations, collective bargaining was first developed in Great Britain in the 19th cent. It has since become an accepted practice in most Western countries with a high level of industrialization. The National Labor Relations Act of 1935, known as the Wagner Act, established the right to collective bargaining in the United States.

See G. Farmer, Collective Bargaining in Transition (2 vol., 1967); J. S. Fishkin, The Limits of Obligation (1983); E. E. Herman et al., Collective Bargaining and Labor Relations (2d ed. 1987); J. P. Windmuller et al., Collective Bargaining in Industrialized Market Economies (1987).

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"collective bargaining." The Columbia Encyclopedia, 6th ed.. . 20 Oct. 2016 <>.

"collective bargaining." The Columbia Encyclopedia, 6th ed.. . (October 20, 2016).

"collective bargaining." The Columbia Encyclopedia, 6th ed.. . Retrieved October 20, 2016 from

collective bargaining

collective bargaining A system for the fixing of earnings and conditions of employment, in which the processes of price (or wage) competition in the labour-market between individual workers and individual employers is replaced, either in whole or in part, by rule-fixing. These rules are of two kinds: procedural, regulating the forms and institutions under which collective negotiations are to be conducted; and substantive, regulating the actual content of particular agreements. Typically, collective bargaining occurs between trade unions and an employer, or organization of employers. However, during the twentieth century, governments and the law in industrial societies have increasingly become parties to both the procedural and the substantive aspects. Bargaining may therefore take place at the workplace, company, regional, or industry levels. Britain is unusual in having no legal compulsion on employers to bargain in this way and collective agreements are rarely directly enforceable in the courts.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"collective bargaining." A Dictionary of Sociology. . 20 Oct. 2016 <>.

"collective bargaining." A Dictionary of Sociology. . (October 20, 2016).

"collective bargaining." A Dictionary of Sociology. . Retrieved October 20, 2016 from

Collective Bargaining Agreement


The contractual agreement between an employer and alabor unionthat governs wages, hours, and working conditions for employees and which can be enforced against both the employer and the union for failure to comply with its terms. Such an agreement is ordinarily reached following the process ofcollective bargaining. A high profile example of such bargaining happens in the world of professionalbaseball.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"Collective Bargaining Agreement." West's Encyclopedia of American Law. . 20 Oct. 2016 <>.

"Collective Bargaining Agreement." West's Encyclopedia of American Law. . (October 20, 2016).

"Collective Bargaining Agreement." West's Encyclopedia of American Law. . Retrieved October 20, 2016 from

collective bargaining

col·lec·tive bar·gain·ing • n. negotiation of wages and other conditions of employment by an organized body of employees.

Cite this article
Pick a style below, and copy the text for your bibliography.

  • MLA
  • Chicago
  • APA

"collective bargaining." The Oxford Pocket Dictionary of Current English. . 20 Oct. 2016 <>.

"collective bargaining." The Oxford Pocket Dictionary of Current English. . (October 20, 2016).

"collective bargaining." The Oxford Pocket Dictionary of Current English. . Retrieved October 20, 2016 from