Running Head: LABOR LAWS AND UNIONS

Labor Laws and Unions Elizabeth Achhammer Human Capital Management HRM/531 March 4, 2013 John Henderson

LABOR LAWS AND UNIONS

2 Labor Laws and Unions

Labor laws and unions are an important aspect of any organization. There are many who have succeeded from forming unions and some that have not. PepsiCo is an organization that has been very profitable and is a union organization. There are always legal issues and obstacles that arise, even in a union organization. How these issues are handled defines how the organization will continue to operate. It must looks at pros and cons of a union and how it will affect employees in the end. PepsiCo Pepsi was founded in 1898 by Caleb Bradham, who was a druggist from North Carolina. The company has continued to grow after the formula was created; Pepsi includes carbonated soft drinks, juices and juice drinks, teas, coffees, bottled and enhanced waters. PepsiCo also has an American Foods branch that provides food and snack business in North and South America. This includes Frito-Lay, Quaker Foods & Snacks, Sabritas, Gamesa and Latin America Foods (Pepsico, 2013). The continued growth is a result of the companys mission. Pepsicos mission is to be the worlds premier consumer products company focused on convenient foods and beverages (Pepsico, 2013, para 1). They are committed to achieving both financial and business success while leaving a positive mark on society. Legal Issues and Obstacles Pepsico may face some discrimination issues because of the organization being so broad in their locations. Pepsico has organizations across the world and others may not be so open to other races, nationalities, etc. It may also face issues where in other countries, women work just as man does. The organization may not want to put women in hard labor positions for fear that

LABOR LAWS AND UNIONS

they will injure themselves. These employees could bring a case against the organization because they were discriminated against. Title VII of the Civil Rights Act of 1964 says that an organization shall not discriminate against employees because of race, religion, disability, etc. Every employee needs to be given the opportunity to perform as he or she wishes and can. Pepsico may experience issues with different standards of law because of being in different states and in different countries. The organization must make sure it is abiding by the laws that are appropriate to its location and where the employees are working. If the organization is found to have broken any laws in the location where it is accused, it could face penalties and fines that will be issued by the state or country. Recommendations Recommendations to avoid possible litigation would be for the organization to follow laws and regulations associated with employment law. This can be done by offering training sessions to train management and employees on what laws need followed and how to follow them. It may also help, since the organization is so big, to have postings on the internal intranet of the organization and posted in the building of what the laws are and how they can be followed. When management and employees know what is expected and required, they will adhere to this. Then if an issue arises, it can be handled appropriately. This can be done by meeting to discuss what had happened and finding a resolution to keep the issue out of going to litigation. Benefits and Drawbacks of a Union The benefits of a union are better wages, more access to benefits, job security, strength in numbers, and seniority. The wages for union members are higher than non-union members.

LABOR LAWS AND UNIONS

Union members enjoy more access to benefits such as medical. These benefits are provided to themselves, family, and even unmarried domestic partners. There is job security for union members because non-union employees are hired at will where union employees can be terminated only if misconduct that is serious and will go through a process before being terminated. Union workers are also more powerful in numbers, especially when trying to bargain for higher wages, benefits, or working conditions. Seniority is also an important factor in a union because if there is a layoff, the employer lays off the most recent hired first (Keller, 2012). The drawbacks of a union are union dues, initiation fees, loss of autonomy, less collaborative work environment, and seniority. Every year, employees must pay union dues and initiation fees that can range from $200 and up. These help pay for officials salaries and conducting union business. Union members do lose their individuality by belong to a union group and being bound by the union and its decisions. These workers experience less partnership and trust in his or her supervisors because he or she treats them as someone lower and not a partner. Seniority is also a downfall because if there is a layoff, the lower end gets cut out even if he or she has been there a long time (Keller, 2012). Not being part of the union puts an employee at risk, even if he or she has been there 20 years. Unionization Process The unionization process begins with defining the characteristics of both the employee and the employees job. Individual characteristics are relatively stable and unchanging differences between individuals whereas job characteristics are factors determined by the nature of the job. Individual and job characteristics determine the employees perception of the

LABOR LAWS AND UNIONS

employment relationship as an exchange process or when an employee exchanges such a thing as working for things from the employer. These things can be wages, promotions, job security, etc. If an employee is not happy, the process proceeds to unionization. The employees who are committed to the organization will more than likely voice their rights and consider unionization instead of leaving the organization. This process will lead to a vote for a union for the opportunity to increase work outcomes and reduce dissatisfaction (Premack & Hunter, 1988). Union Bargaining Union bargaining is different across countries but there are three situations that are covered. The first occurs when the workplace belongs to the organization signing the agreement with the workers not members of the unions participating in the bargaining. The second occurs when the workers belong to the union, but the workplace is not part of the organization participating in the bargaining. The third occurs when neither the workers nor the workplace belong to the signatory organizations (Garcia-Serrano, 2009). After one of these situations is determined, the group can determine their interests, options for achieving interests, external benchmarks of fairness, the other sides interests, and the best alternative to a negotiated agreement. Effects of Union Bargaining There are many effects of union bargaining include pay, benefits, working conditions, and employment security. Employees who are covered by union bargaining earn more than those not covered; these employees earn between four and 11% higher than non-union members (Eberts, R, 2007). These employees also receive fringe benefits, unlike non-union employees. The working conditions for employees covered by union bargaining tend to be standardized

LABOR LAWS AND UNIONS

where otherwise would not be. Union members also have employment security because the unions protect employment by negotiating factors that are affected. The negotiating is usually done by a vote and when a vote cannot be reached sometimes a strike may take place. The union tries to reach an agreement before a strike takes place so there is no work time lost and employees can perform their duties as scheduled. Conclusion Labor laws and unions must be adhered to in organizations to be sure it is operating to its fullest. Employees must choose if they want to be part of a union or continue as a non-union employee, but they must understand the difference and what each means. Each side can greatly affect not only the employee but also the organization and how it operates. Pepsico is an organization that has overcome many obstacles being a union organization and has profited in the end. More organizations need to operate as Pepsico to be successful along with the employees.

LABOR LAWS AND UNIONS

7 Reference

Eberts, R. (2007). Teachers Unions and Student Performance: Help or Hindrance? Excellence in the Classroom, 17(1). Retrieved from: http://futureofchildren.org/publications/journals/article/index.xml? journalid=34&articleid=81&sectionid=480 Garcia-Serrano, C. (2009). Job Satisfaction, Union Membership and Collective Bargaining. European Journal of Industrial Relations, 15(1), 91-111. Doi: 10.1177/0959680108100167 Kellers, L. (2012). The Pros and Cons of Joining a Labor Union. Retrieved from: http://www.foxbusiness.com/personal-finance/2012/04/10/pros-and-cons-joininglabor-union/ Premack, S. L., & Hunter, J. E. (1988). Individual Unionization Decisions. Psychological Bulletin, 103(2), 223-224. Doi: 10.1037/0033-2909.103.2.223