Summers ARTICLE: EXCLUSIVE REPRESENTATION: A COMPARATIVE INQUIRY INTO A "UNIQUE" AMERICAN PRINCIPLE

20 Comp. Lab. L. & Pol'y J. 47, *

Fall, 1998

20 Comp. Lab. L. & Pol'y J. 47

LENGTH: 12043 words

ARTICLE: EXCLUSIVE REPRESENTATION: A COMPARATIVE INQUIRY INTO A "UNIQUE" AMERICAN PRINCIPLE

Clyde W. Summers +

+ Jefferson B. Fordham Professor of Law, Emeritus, University of Pennsylvania. The author would like to thank the following for their very helpful comments clarifying and correcting original draft; Takashi Araki, Japan; Marco Biagi, Italy; Paul Davies, United Kingdom; Reinhold Fahlbeck, Sweden; Jacques Rojot, France; Manfred Weiss, Germany. The remaining misconceptions and errors are the author's.

SUMMARY:
... Representatives, designated or selected for purposes of collective bargaining by a majority of employees in a unit appropriate for such purposes, shall be the exclusive representative of all employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment and other terms and conditions of employment. ... The obvious import of these words is that a majority union is legally empowered to bargain for and bind by its collective agreement, not only its own members, but also members of a competing minority union and employees who belong to no union. As "exclusive representative," the presence of a majority union precludes the employer from bargaining collectively with a minority union. ... The solution was the "democratic" solution - exclusive representation by majority rule, with company unions barred. ... The practice and philosophy of collective bargaining look with suspicion on such individual advantages .... The workman is free, if he values his own bargaining position more than that of the group, to vote against representation: but the majority rules, and if it collectivizes the employment bargain, individual advantages or favors will generally in practice go in as contribution to the collective result. ... Two-thirds of the members of the works council are elected from lists open to all employees and one-third are elected from lists presented by the unions signing the national collective agreement on a basis of proportional representation. ...

TEXT:
[*47]

The fundamental ordering principle which shapes American labor law and collective bargaining is the principle of exclusive representation articulated in Section 9(a) of the National Labor Relations Act.

Representatives, designated or selected for purposes of collective bargaining by a majority of employees in a unit appropriate for such purposes, shall be the exclusive representative of all employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment and other terms and conditions of employment. ¹

The obvious import of these words is that a majority union is legally empowered to bargain for and bind by its collective agreement, not only its own members, but also members of a competing minority union and employees who belong to no union. As "exclusive representative," the presence of a majority union precludes the employer from bargaining collectively with a minority union. To implement this, the statute provides for the National Labor Relations Board (NLRB) to determine the "appropriate bargaining unit" and determine which, if any, union has majority support in the unit.

This provision is largely the product of historical circumstances. After 1933, unions engaged in energetic and generally successful organizing drives. To counter this, employers were organizing "company unions" dominated by the employer and bargaining with them. The labor movement was not united; unions were bitterly competing for bargaining rights, which led to the Committee of Industrial Organization [*48] (CIO) breaking out of the American Federation of Labor (AFL), and forming a rival federation. Employers played off company unions against legitimate unions and AFL unions against CIO unions. "Members only" or "joint bargaining" led to paralysis or chaos. The solution was the "democratic" solution - exclusive representation by majority rule, with company unions barred. ²

The Supreme Court's interpretation of Section 9(a) not only determined bargaining rights, but defined the status of individual contracts of employment. In J.I. Case Co. v. NLRB, ³ the employer, prior to the organization of the union, had made individual written contracts with its employees. When the union obtained a majority, the company refused to bargain with the union on any matters affecting rights and obligations under the existing individual contracts. The Supreme Court upheld the NLRB's order for the employer to cease giving effect to the individual contracts and to bargain with the union on all terms and conditions of employment. The court declared: "Individual contracts ... may not be availed of to ... forestall bargaining or limit the terms and conditions of the collective agreement." ⁴ It further declared that, "the individual contract cannot be effective as a waiver of any benefit to which the employee would be entitled under the trade agreement." ⁵

To these two unexceptionable propositions, the Court added a third more questionable one: The individual contract could not, without the consent of the majority representative, provide for better terms than the collective contract. Said the Court:

The practice and philosophy of collective bargaining look with suspicion on such individual advantages .... The workman is free, if he values his own bargaining position more than that of the group, to vote against representation: but the majority rules, and if it collectivizes the employment bargain, individual advantages or favors will generally in practice go in as contribution to the collective result. ⁶

The principle of exclusive representation, as developed from the Supreme Court's decision in J.I. Case, has three significant consequences which need to be separately identified. First, the designated representative, a single union, or unions bargaining jointly, is empowered to represent all employees in the bargaining unit, regardless of [*49] their union membership or their desire to be represented. Second, the identity of the designated representative is determined by majority rule. If a representative does not have majority support, it cannot act as exclusive representative, but can at most bargain only for its own members. ⁷ Third, individual employees, no matter how unwilling, are rigidly governed by the collective agreement. They cannot seek or be given better, worse, or different terms.

The principle of exclusive representation is commonly considered a uniquely American principle, ⁸ adopted in the United States and Canada, but in few other places. ⁹ In most other countries, the commonly stated legal theory is that the union bargains only for its own members, and the collective agreement benefits and legally binds only its members. There has, however, been no systematic comparison of the American legal rules and practices with the rules and practices in other countries. Preliminary examination suggests that the assumed differences and initially perceived similarities may not be what they seem. The purpose here is to explore such a comparison with the hopes that it may open insights into premises and presumptions of various collective bargaining systems, particularly the relative status and roles of the union and the individual worker.

To undertake such a comparison risks revealing more about the author's misconceptions than about the functioning of other collective bargaining systems. There is a danger that the author will not correctly understand the legal rules and practices of other countries and will make glaring and discrediting misstatements. In addition, the limited space here requires a broad brush which ignores important details. There is a greater and inescapable difficulty inherent in every comparative study; the author can ultimately see only through his own eyes and inevitably views other systems from an American perspective. That perspective will seem distorted to those who look through different eyes. But readers who see their system thus distorted might heed Robert Burns, when he wrote:

[*50]

O! wad some Pow'r the giftie gie us

To see oursels as ithers see us. ¹⁰

I. Representation Without Consent

The first characteristic of American exclusive representation - the contract of one collective representative governs all workers regardless of their authorization or consent - is not at all unique. Indeed, it is commonplace, although it takes a variety of forms.

The government may simply designate a union, or a coalition of unions as the sole bargaining representative. For example, in Austria, agreements are by law negotiated between the Austrian Federation of Trade Unions (OGB) and the Chambers of Commerce, and the agreement has the force of law regardless of union membership. ¹¹ In Tomandl's words, "A collective agreement confined to union members would be, by Austrian standards, intolerable as it would result in different conditions and terms of employment for union and non-union members in the same workplace." ¹²

The Belgian system similarly mandates exclusive representation. Only three major federations are designated as "most representative" and are authorized to conclude collective agreements. ¹³ They customarily negotiate sectoral agreements jointly, and the agreements are then made applicable by royal decree to all employers and employees in the sector, whether the employer is a member of the employers association or the employees are members of one of the unions. ¹⁴

In France, only unions legally recognized as "most representative" may sign a collective agreement. This includes all unions affiliated with one of the five competing national federations. ¹⁵ Two correlating legal principles create a system of exclusive representation: first, one, and only one, collective agreement applies in a single enterprise; ¹⁶ second, a collective agreement signed by one representative union, no matter how small, is applicable to all individual employment [*51] contracts of the employer bound by the agreement. ¹⁷ Thus, a collective agreement signed by a CFTC (Christian) union governs members of the ideologically hostile CGT (Communist) union. Other unions can only "accede" to the terms made by the contracting union. ¹⁸

Although in other countries the collective agreement is legally binding only on members of the contracting union, the practical result commonly is that the collective agreement of a dominant union in fact determines the terms and conditions of all employees in the category. In Sweden, the collective agreement binds only union members, but the Labour Court has held that unless the collective agreement expressly provides otherwise, which it almost never does, the employer is legally bound to give non-members the same benefits as members. ¹⁹ The employer is legally obligated to bargain with minority unions, but has no obligation to sign an agreement; Swedish employers have at times negotiated with unions not affiliated with the major federations, but have rigidly refused to sign agreements with those unions. ²⁰ The result is that the employment contracts of those not members of the contracting union are theoretically defined by custom and practice, but the custom and practice is legally defined by the collective agreement. ²¹

The Japanese result is essentially the same. The employer is bound to negotiate with any union, no matter how small and if agreement is reached, to sign an agreement. ²² The employer, however, can, and usually does, postpone making an agreement with a minority union until it has reached an agreement with the dominant union and then insists that the agreement with the minority union incorporate substantially the same terms. ²³ Japanese law provides that if three-fourths of the workers of the same kind regularly employed in a particular factory or other workplace are covered by an agreement, it is applicable to all others of the "same kind." ²⁴ It is not clear whether [*52] this applies to members of a minority union; Sugeno's view is that it does not. ²⁵

German practice works the same result, but gives the collective agreement a more encompassing reach. Collective agreements are commonly negotiated by an employers' association; they legally bind all employer members, but only the union members of those employers. In practice, however, employers apply the normative terms of the agreement to all employees regardless of union membership. ²⁶ The Italian practice is substantially the same. Unions in the three competing federations bargain jointly, despite their political and ideological differences, and employers customarily apply the normative terms to non-union employees, in part to avoid charges of discrimination. ²⁷ Independent unions may make separate agreements, but the terms follow those agreed upon by the major unions. ²⁸

Collective bargaining in the United Kingdom may at first glance not fit this pattern because collective agreements are only "gentlemen's agreements" and do not legally control individual contracts of employment, but the practical result follows a similar pattern. ²⁹ A union has no legal status as bargaining representative unless recognized by an employer by the making of a collective agreement, and employers, in practice, will not recognize more than one union for any one category of employees, thereby making that union the sole bargaining representative for that category. ³⁰

The collective agreement, in practice, establishes the terms and conditions of all individual contracts of employment. The employer and individual are legally free to agree to any terms, but this seldom occurs, for the employer has little incentive to vary from the collective agreement. By statute, the employer is required to give employees a written statement of the most important provisions of the individual contract. ³¹ Where a collective agreement exists, it is commonly incorporated by reference in the individual agreement.

[*53] More telling, recently developed "single union recognition" in the United Kingdom is the epitome of exclusive recognition. Under "single union recognition," employers, most often foreign owned companies, before opening a new plant may select a union which they consider most acceptable and agree to give it exclusive recognition and bargaining rights. ³² Newly hired employees are represented by the selected union regardless of their prior union membership or preferences.

In countries where collective agreements are extended by law, as in Germany, not only employees, but employers are bound by agreements negotiated by representatives they have not chosen.

Where representation and bargaining take place at two levels - national or sectoral and enterprise or plant - exclusive representation at the plant level is plainly the rule. Austria, Belgium, France, and Germany provide for statutory works councils at the enterprise or plant level. They are unitary, and by law are the sole representative of all employees within their area of competence. In Italy, the three major confederations have by agreement, created "unitary union representation" (RSU's) at the company level, recognized by the employer's association and the government as the only legitimate representative of employees on the shop floor. ³³

Sweden does not have works councils, but instead has local union "clubs." A co-determination agreement can be negotiated at the local level only by a "club" of a union with which the employer has a collective agreement. Only that union has a right to information concerning the employer's economic conditions, to examine the employer's books and accounts, and to call for negotiations before the employer makes important changes in its business activity. It is only that union which has the right of discussion to determine the order of dismissal and to negotiate rules of seniority, which are, of course, binding on all employees whether they are members of the union or not. ³⁴

The United Kingdom presents a more confused picture because of the lack of any formally established company or plant level structure. Representation at the plant level is through shop stewards and shop steward councils elected by the union members. The role of the shop stewards and shop steward councils in representing workers who [*54] do not belong to the electing unions and the application of agreements made by shop stewards to those workers is unclear. ³⁵

The prevalence of an explicit principle or active practice of exclusive representation in different collective bargaining systems should not surprise us; we should be surprised if it were otherwise. Employers who accept collective bargaining seek to avoid the administrative burden of multiple negotiations, and variegated terms and conditions of employment. At the multi-employer level, they seek protection from competition of employers who undercut wages. At the enterprise or plant level, applying different terms to employees doing the same work would not only create administrative problems, but generate tensions within the work force. Unions, of course, prefer sole control to promote their own policies, embed their own institutions and to protect their terms from those who would work for less. The institutional forces on both sides and the demands of practical operation and efficiency press toward establishment of a single collective bargaining representative making a collective agreement which is applicable to all in the bargaining unit.

II. Majority Rule

The second and a crucial element of the American form of exclusive representation is that the representative must be the choice of the majority of the employees for whom it bargains. Because freedom of choice is an articulated underlying value in the United States, to exclude individual or minority choice, proof of majority support must be beyond doubt; the employer can refuse to bargain with a union as exclusive representative until the union has proven its majority support in an NLRB election. ³⁶ The choice is not limited to which union is preferred as representative, but whether the majority prefers no collective representative; the ballot always includes the choice, "No Union." ³⁷ A vote for "No Union" is, in practice, a vote for no collective bargaining. ³⁸

To maximize free choice within majority rule, the bargaining units (election districts) are small, circumscribed by common interests, and narrowly conceived. A single establishment almost always has separate units for professional, and clerical employees, and for plant [*55] guards. Skilled workers with different skills are often placed in separate units, apart from semi-skilled or unskilled production workers, and maintenance or warehouse workers may have separate representatives. Each unit votes separately to determine the majority choice of that unit. ³⁹ Majority rule does not avoid fragmentation in bargaining, but in fact rather encourages it.

Majority rule, as described, is uniquely American. As stated earlier, in Austria and Belgium, the exclusive representative is not designated by the employees, but by the government. In Sweden, Japan, Germany, and Italy, the union's effective representation of non-members is not legitimated by a majority vote, but is the product of economic forces and the employers' interests in standardized terms. To be sure, in countries where unions exercise the power of exclusive representation at national and sectoral levels, they are clearly the largest unions and probably have majority support at the level for which they bargain. Even though many of the employees covered may not be union members, there is little doubt that if an election were held, the majority would vote for the representing union, not for another union or for "No Union."

In France and the United Kingdom, there can be no guaranteed presumption of majority support. In France, the government designates five unions authorized to make collective agreements, but an agreement made by even the smallest of the five can be legally binding on all. ⁴⁰ This can, in effect, give the employer and not a majority of the employees the choice of the exclusive representative. In the United Kingdom, the union's representation rests on the employer's decision to recognize and bargain with it. The employer's decision may, of course, respond to the union's ability to exercise economic pressure to obtain recognition, but this may not reflect the presence or absence of majority support. The potential denial of majority rule is starkly revealed in the "single union recognition" contract in which the employer holds a "beauty contest," receiving proposals from competing unions. The employer then selects the union whose proposal it finds most attractive as the exclusive representative of all employees in the plant. ⁴¹ The employees have no choice; they are represented by the employer's choice.

[*56] Statutory works councils, where they exist, are deliberately designed to reflect employee choice; council members are elected by the employees' vote. In Austria and Germany, for example, any employee can stand for election and any group can submit a list of candidates. ⁴² All employees can vote regardless of union membership, and election is on the basis of proportional representation, more accurately reflecting employee choice than election by a majority.

In Belgium, the choice is constricted in that only the representative unions can nominate candidates. ⁴³ In France, the choice is somewhat less constricted. In elections of personnel delegates and enterprise committees, only the unions in the workplace can submit candidate lists for the first round. If those unions do not get a majority, non-union candidates can run in the second round. ⁴⁴ Italy under a tripartite central agreement of 1993, presents a hybrid. Two-thirds of the members of the works council are elected from lists open to all employees and one-third are elected from lists presented by the unions signing the national collective agreement on a basis of proportional representation. ⁴⁵

Even with these restrictions, freedom of choice in works council elections might be considered the substantial equivalent of American majority rule in designating bargaining representatives. There are, however, two significant differences. In the United States, different categories of employees in an establishment may be able to choose separate representatives which will best serve their special interests. Works councils normally cover all employees in the establishment - blue collar, white collar, professional, and even lower management. Proportional representation may still leave some groups unrepresented.

More important, and crucial in recognizing a fundamental difference, works council elections do not offer an alternative of not being collectively represented. There is no equivalent of a vote for "no union." Individual bargaining is foreclosed, even though a majority of employees in the establishment would prefer it to representation by the works council. ⁴⁶

[*57] The shop steward system in the United Kingdom comes closest to the American system of majority rule. Shop stewards are normally chosen by relatively small groups of employees, much smaller than most American bargaining units. A candidate for shop steward need not be nominated or even approved by the union; the selection (and removal) is by vote of the employees. ⁴⁷ If the majority does not want to be represented by a shop steward, there will be none.

The American principle of majority rule, as applied, has had unintended but debilitating consequences on the development of our collective bargaining system. Under Section 9(a), majority support authorizes a union to bargain and contract for all employees in the bargaining unit, and the employer must recognize it as exclusive representative. The courts and the NLRB have perversely read into this the converse; that in the absence of majority support there is no duty on the employer to bargain with the union, even for its own members.

Although there is no duty on the employer to bargain with a minority union, if a minority union is able to obtain a contract, a "members only" contract is legal and enforceable in the absence of a majority union. In that case, a minority union is legally protected in engaging in concerted activity such as striking and picketing to pressure an employer to sign such a contract. Some of the earliest contracts in the auto and steel industry were for members only and were signed after bitter strikes. Since that time, however, unions have ignored the potential of using economic pressure to compel bargaining where the courts and the NLRB have refused. ⁴⁸

Indeed, unions have accepted without challenge the employer's preferred premise that in the absence of a majority union, there is to be no collective bargaining. The practical result is that a majority, can by voting "no union," deny all employees the effective right to collective representation. This outcome is unknown, or even unthinkable, in other systems, for it undermines the basic principle of freedom of association.

[*58] It should be underlined that this is an unnecessary and unintended consequence of majority rule, for majority support is required only to justify giving the right of exclusive representation. The words of Section 8(a)(5) do not require this result; on their face, they do not limit the employer's duty to one of bargaining with a majority union. Clearly, Section 9(a) does not bar bargaining between employers and minority unions in the absence of a majority union. ⁴⁹

Acceptance of the premise that in the absence of a majority union, there is to be no collective representation is one source of a special feature of American labor relations - the NLRB election campaign to determine whether a union has a majority. For weeks before a representation election, the union and employer engage in a bitter propaganda battle, each leveling accusations, calling names and distorting the positions of the other. For the union, it is a matter of life and death; for the employer, it is preservation of management prerogatives and profitability. If the union wins a majority vote, the antagonists face each other across the bargaining table, unprepared to compromise or seek common interests. If the union loses, the employer refuses to meet with the union and the union customarily abandons the scene, even though 30 or 40 percent may want collective representation. This explains in part the adversarial character of labor relations and the limited coverage of collective agreements in the United States.

Majority rule has also contributed to shaping the distinctive structure of the American collective bargaining system in several ways. Fragmentation of an establishment into separate bargaining units serves to largely exclude white collar and professional employees from collective bargaining because they are less ready to unionize. Multi-plant employers may have different plants with different unions and some plants with no unions. Multi-employer bargaining structures are difficult to assemble and maintain because the union must have a majority in each of the employer's employees. Collective bargaining is thus driven to the plant level, or more accurately, the sub-plant level, with the effect of reducing the number of employees covered by collective agreements.

[*59] Admittedly, the effect of fragmentation can be overstated. Separate bargaining units in an enterprise represented by the same union commonly combine and bargain as a single unit. Also, several unions may combine and engage in coalition bargaining, though this is not common. More prevalent, if a union represents a major portion of employees in a plant, its collective agreement establishes a pattern which may be generally followed in other bargaining units and substantially applied to those who have no union. In a multi-plant employer, increases negotiated in a unionized plant may be extended to non-unionized plants in order to discourage extension of unionization. Multi-employer bargaining is possible when all or most of the employers in an industry are unionized, and it has existed in various industries, such as railroads, trucking, airlines, longshore, maritime, clothing, rubber, and steel. However, it has proven fragile; any employer is legally free to break out and insist on bargaining separately, and the union cannot use economic pressure to keep it. ⁵⁰ Many multi-employer units have dissolved in the last fifteen years.

Overall, the dominant structure in the United States is bargaining at the plant level and then for only a portion of the employees. This contrasts with the multi-employer bargaining prevalent in Europe and the employer-wide bargaining in Japan.

Majority rule was the product of a historical situation long since past. Company unions have been outlawed and have largely disappeared, and the union movement is no longer divided. But there are some reasons for its continued existence other than inertia. In the American mind, giving the union power to represent without consent requires legitimation, and the explicit grant of that power requires explicit democratic legitimation. The low level of unionization gives unions no prima facie claim to that power as it might in countries with high levels of unionization like Austria, Belgium, or Sweden. Though outsiders may question why legitimation demands a demonstrated majority, Americans might question what legitimates the power of officially named French or Italian Federations, or the employer recognized British unions, and particularly the specially selected unions given "single recognition" contracts.

The unnecessary extension of majority rule to bar "members only" bargaining cannot be explained in principled terms. Underneath there is a general failure in the United States to accept collective bargaining as the preferred or normal way to structure employment relations. It is this which leads to unreflective acceptance [*60] that collective bargaining can be foreclosed by majority rule. This underlying attitude feeds, and is fed by, employer's anti-union activities and the often expressed view that their union is an "outsider" interfering in plant relationships. The question in other countries is which union shall act as collective representative; the question in the United States is whether any union shall act as a collective representative.

III. Control of the Individual Contract

The third and most critical characteristic of American style exclusive representation is the subservience of the individual employee to the majority union, and the total subordination of the individual contract of employment to the collective agreement. The individual cannot bargain with the employer for either less or more favorable terms. Although unions may permit individual variations from the collective agreement, the presumption is that in the absence of explicit provisions, variations are not permitted. Individual bargaining for better than minimum terms is allowed by unions in only a few occupations such as theater, music, and professional sports; the overwhelming practice is that the collective agreement establishes both the minimum and maximum terms. It totally controls the individual contract of employment.

In most other collective bargaining systems, the agreement establishes only minimum terms and does not preclude subordinate units or individual employees from bargaining for better terms and contracting for above the minimum. In the United Kingdom, because the collective agreement has no legal effect except to establish custom and practice, or become incorporated by reference in the written statement of important terms provided by the employer, individual contracts can wholly disregard it, though this is not customary. ⁵¹

Bargaining above the minimum is an integral part of multi-employer bargaining in other countries. The sectoral agreement establishes a minimum for less profitable employers; formal or informal bargaining at the enterprise or plant level, generally by the works council, then obtains premiums above the minimum from the more profitable employers. This cartel-like process allows weaker competitors to survive with terms adjusted within limits of the employer's ability [*61] to pay. Such toleration of differentials runs contrary to the traditional American union policy to remove wages as a factor in product market competition. Multi-employer collective agreements generally establish standard terms; the premise shared by unions and employers is that employers who cannot compete should go out of business, and their share of the market should go to those who can compete.

Bargaining above the minimum, however, is not limited to plant agreements within a multi-employer structure. Groups within the plant may bargain for terms better than those in the plant agreement negotiated by the works council, and individuals may bargain for even better terms. In France, a union which is present in the plant but has not signed the agreement may, if it has the bargaining power, try to reach a better agreement for its members.

The Supreme Court in barring individual employees from bargaining above the minimum declared, "the practice and philosophy of collective bargaining looks with suspicion on such individual advantages." ⁵² The premise of the American rule, as it has developed, however, runs much deeper than barring individual advantages. The premise is that the collective agreement not merely defines the terms of the individual contract, but is the source of the individual's contract rights. A corollary, commonly accepted, was that the majority representative not only controlled but owned the individual's contract rights and that the individual acquired no legally enforceable rights under the collective agreement. ⁵³ This view was rejected by the Supreme Court, in Smith v. Evening News Association, ⁵⁴ which held that an employee who had been discharged in violation of the collective agreement could sue in his own name without intervention of the union.

This decision, however, has not prevented unions, abetted by employers, from maintaining control over individual contract rights. Collective agreements generally provide that disputes concerning interpretation and application of the collective agreement shall be processed through a grievance procedure with ultimate resort to arbitration. These provisions almost uniformly allow only the union to appeal the employer's denial of a grievance and to demand arbitration, thereby allowing the union to abandon the claim without the [*62] grievant's consent. These contract provisions reflect the commonly stated declaration, "the union owns the grievance."

The courts have held that, despite the quite clear words of the proviso of Section 9(a), ⁵⁵ the collective agreement could legally preclude the individual from processing the grievance or obtaining arbitration. ⁵⁶ Employees are effectively denied ready access to the courts to enforce their contract rights. In Vaca v. Sipes, ⁵⁷ the Supreme Court confirmed that the employee acquired legally enforceable rights under the collective agreement. However, with rather bewildering logic, the Court stated that the employee must first exhaust all remedies under the collective agreement. The ultimate remedy was arbitration. The fact that under the collective agreement only the union could demand arbitration and the union refused to demand arbitration did not excuse the employee's failure to exhaust. Exhaustion would be excused only if the union in refusing to demand arbitration had violated its duty of fair representation, that the union's action was "arbitrary, discriminatory or in bad faith." This is a standard of proof which subsequent cases have shown is very difficult to meet; individual suits are seldom successful, even when a lawyer can be found who is willing to undertake the case. ⁵⁸

The practical result is that the individual's contract rights are almost totally subservient to the majority union. Only in cases of egregious union conduct does the individual have any independent enforceable right. No other system so obstructs an individual employee from enforcing normative rights under the collective agreement, nor is it an essential aspect of exclusive representation. ⁵⁹ In Sweden, if the union refuses to bring suit in the Labor Court, the individual can sue in the common courts. ⁶⁰ In most other systems, normative rights are commonly enforced by individual suits in the labor court or industrial tribunals, with the union's role limited to whether or not it will financially or institutionally support the individual's suit. In Italy, normative rights can be enforced only by individuals and not [*63] by the union, ⁶¹ and in the United Kingdom, where most collective agreements are not legally binding, only individual employees have contract rights.

It is difficult to explain why the law and practice in the United States have developed in a direction so opposite to that in other countries. The American special concern for protecting individual autonomy, reflected in designating small bargaining units, might seem to point toward giving the individual the widest scope of freedom practicable within the collective system. On the contrary, explicit requirement that the unions have majority support seems to legitimate near total collective authority by the union.

Perhaps, an important factor is that the union's authority is exercised where, in the absence of the union, the individual had no substantial rights. The prevailing legal doctrine in the United States is that employment is at will; an employee can be dismissed or the terms of his employment changed at any time for any reason without notice. This deprives the individual employment contract of all substance. Indeed, in most situations neither employers nor employees recognize that they have a contract; ⁶² they have only an ongoing relationship which might be changed or ended at any moment. The union's collective agreement is, in fact, the source of all meaningful contract rights. In a system of exclusive representation, this gives the union a logical claim of ownership to all rights created by the collective agreement.

Perhaps more important than the logic is the practical consequence that both unions and employers prefer that the individual employee has no independent rights. Employers resist unionization, but if they have to bargain collectively, they prefer a union which can speak with finality, both in negotiating terms and in resolving grievances. Unions want unchallenged control over all aspects of the contract, including its grievance procedure and arbitration which they created. The law ratifies the preferences and decisions of the two collectivities as against the rights of individuals in those collectivities - a seeming anomaly in a society which prizes individual's autonomy.

IV. Responsibilities of the Representative

The control which exclusive representation vests in the majority unions has produced two important derivative doctrines to oversee or legitimate that control - the duty of fair representation, and the requirement [*64] that unions be democratic. Eight months after deciding J.I. Case Co., the Supreme Court was confronted with a case in which a union of railroad workers had negotiated an agreement placing Negroes at the bottom of the seniority list. In that case, Steele v. Louisville Nashville Ry., ⁶³ the Court read into the Railway Labor Act the duty of the union to represent fairly all employees for whom it bargained. The Court declared:

Congress ... did not intend to confer plenary power upon the union to sacrifice, for the benefit of its members, rights of the minority of the craft without imposing on it any duty to protect the minority ...

So long as a labor union assumes to act as the statutory representative of a craft, it cannot rightly refuse to perform the duty which is inseparable from the power of representation conferred upon it ... to represent non-union or minority union members of the craft without hostile discrimination, fairly, impartially, and in good faith. ⁶⁴

The union's duty of fair representation is as broad as its power to represent. Discrimination against individuals or groups other than race are equally prohibited, ⁶⁵ and discrimination may be found in lower wage rates, dismissals, or denial of promotions. In negotiating agreements, the union must represent all employees equally, but it can make variations based on "relevant differences," and it must be allowed "a wide range of reasonableness ... subject always to complete good faith and honesty of purpose." ⁶⁶ These boundaries are so broad that in practice, unions are seldom found to have exceeded them.

The duty of fair representation has its major impact in grievance settlement and arbitration. The standard here has been stated in different terms, adding the term "arbitrary" to "discriminatory or in bad faith" ⁶⁷ and stating that "a union may not arbitrarily ignore a meritorious grievance or process it in a perfunctory fashion." ⁶⁸ The Supreme Court, however, in thirty years has not clarified this standard. It has not focused on the obvious differences on the union's duty in negotiating an agreement and in enforcing its normative terms. ⁶⁹ It has not recognized that collective agreement provisions which define the individual's [*65] normative rights provide a standard for measuring the union's duty and limiting its ability to settle grievances or refuse to seek arbitration. Because of the court's failure to apply the contract standard, individuals seldom win suits claiming that the union's refusal to enforce individual contract rights violates the duty of fair representation. ⁷⁰ At most, the declared duty of fair representation provides an in terrorum protection, for the feared liability leads unions to exercise more consideration in processing grievances and generates somewhat greater readiness to carry meritorious cases to arbitration.

Other countries have not developed equivalent legal doctrines of fair representation, though in negotiating collective agreements, unions, in fact, exercise control equivalent to exclusive representation, and in some countries they are legally designated as exclusive representatives. There are some explanations for this, though not wholly satisfactory. Multi-employer contracts are less susceptible to discriminatory provisions, but sectoral agreements are commonly supplemented with local agreements which are susceptible to discrimination. Other countries have not experienced racial discrimination equivalent to that in the United States, and it was racial discrimination which gave birth to the doctrine of fair representation. But other countries experience discrimination against other groups - women, foreign workers, political minorities, opponents of union leadership and non-members of the controlling union. There would seem to be the same reasons, though perhaps not so obvious and compelling, for imposing a duty of fair representation in the negotiations of collective agreements. ⁷¹

In the administration of collective agreements, there are explanations, again not entirely satisfactory, why an equivalent duty has not evolved in other countries. Individual employees can generally sue to enforce their normative rights under the collective agreement; neither the union nor the works council can make a binding settlement of their contractual rights. The problem of unfair representation in the administration of the agreement, therefore, ought not arise. In practical terms, however, this is not always the case. For example, in collective dismissals, if the employer and the works council agree to favor [*66] one group over another, or to dismiss a disliked employee, there may be little an employee who has been treated unfairly can do. ⁷²

A more important legal principle rooted in the exclusive representation is that the union in its internal processes, must observe basic democratic rights. Unions in a democratic society should themselves be democratic. This principle was forcefully articulated in the Landrum-Griffin Act of 1959. ⁷³ The Senate committee report on the bill stated the principle broadly:

Under the National Labor Relations Act and the Railway Labor Act, a labor organization has vast responsibility for economic welfare of the individual members whom it represents. Union members have a vital interest, therefore, in the policies and conduct of union affairs. To the extent that union procedures are democratic, they permit the individual to share in the formulation of union policy. ⁷⁴

Senator McClellan, in advocating passage of the bill, tied the legislation directly to the union's statutory right as exclusive representative.

The employer is compelled to bargain with that (majority) union as the exclusive representative of all the workers within the bargaining unit .... If the union is to have such federally bestowed, tremendous powers in industrial government, they should be required to represent their members in accord with democratic principles .... ⁷⁵

The statute establishes minimum standards of democratic processes which unions must observe. Title I declares a Bill of Rights for union members - the equal right of all members to participate in the political affairs of the union, the right to freedom of speech and assembly within the union, the right to vote on union dues, initiation fees and assessments, the right to sue the union, and the right to a full and fair hearing before being disciplined. Title II requires unions to give regular financial reports to all the members and permits any member, on showing just cause, to examine the books, records, and [*67] accounts of the union. Title III protects local unions from oppressive control by the national union. Title IV requires periodic elections of union officers and establishes comprehensive standards for conducting union elections, reaching from nominating candidates, through campaigning, and voting to counting of the ballots. This statute has provided substantial protection of members' political rights within the union and has made union policies more responsive to the members' desires.

No other country has comparable legal protection of democratic processes in unions. Japan has general requirements that unions observe democratic values, ⁷⁶ and the United Kingdom has specific requirements for strike votes and extensive regulations for holding union elections, ⁷⁷ but in other countries, the claim of union autonomy has silenced demands for substantial legal intervention.

This difference is difficult to explain, for most American unions, even before Landrum-Griffin, were more democratic than unions in many other countries. Unions in European countries generally exemplify Michel's "iron law of oligarchy" with a one-party self-perpetuating monolithic bureaucracy, particularly above the local level. ⁷⁸ American legislation was triggered by revelations of union corruption, which is largely lacking in other countries. But the legislation focused predominately on democratic processes, reaching far beyond the argument that democratic processes would enable union members to combat corruption themselves.

This difference may result, in part, from different conceptions of democratic decision making. In the United States, the focus is on the process by which decisions are made; whether all persons concerned have an opportunity to be heard; whether the decision responds to the expressed desire of the people. There is a strong current of thinking that representatives should act on what their constituents say they want. In other countries the focus may be less on the process by [*68] which the decision is made than the substance of the decision made; whether it responds to the needs of those affected. The conception may be that representatives should act on what they think is best for their constituents.

The difference may run much deeper, to premises as to the essential character of a democratic society. The Landrum-Griffin Act is ultimately rooted in the conviction that in a democratic society, the exercise of power, whether public or private over citizens' lives, should be exercised democratically, and this principle may override the claims of autonomy of private groups exercising this power. This conviction has not gained currency in other countries. Indeed, it has little currency in the United States in other sectors of society where private power is exercised over matters. Landrum-Griffin may be seen as an aberration implementing an ideal.

V. Conclusion

The American principle of exclusive representation is not unique in allowing a union to represent workers who do not choose to be represented by it or to exercise control over workers without their consent. Other collective bargaining systems, under other guises, work much the same practical result. We might venture to conclude that this result is inherent in the collectivization of the employment relation.

One uniqueness of the American system is the way in which the union that exercises that power is chosen. In other systems, the union is empowered by its dominant economic strength, by government anointment, or by employer preference. In the United States, it is by the democratic principle of majority vote of those workers subject to its control. To be sure, the empowered unions in other countries, more often than not, in fact have majority support. But it is not clear that they would have been chosen in the first instance by a majority vote, or that their support would continue if periodic votes were available.

This poses the first puzzle: Why is there this difference? It would be difficult to contend that all the countries examined are less dedicated to democratic principles than the United States, that they believe less in majority rule. Examination of their political systems would not support such a conclusion. Why the difference?

The second uniqueness of the American system is the impact of collective action on the individual worker; the subordination of the individual to collective control. The individual is not only barred from [*69] bargaining for better terms, but enforcement of the terms bargained by the union on his or her own behalf is only through the grievance procedure and arbitration which the union controls. No other system so subordinates the individual worker's rights to collective control.

This poses the second puzzle: Why this difference? The United States prizes the rights and freedom of the individuals, extols individualism, and rejects collectivism. This contrasts with the socialist tradition in some of the other countries, and certainly greater acceptance of collectivism in labor relations. But in collective bargaining these values are reversed with greater individualism in other countries than in the United States. Why?

This essay began with the limited goal of comparing relative roles of the union and the individual worker in certain collective bargaining systems. The second half of comparative study, the explanation of why there are fundamental differences remains unsolved and for good reason: I have the nagging intuition that perhaps no satisfactory explanation can be found in economic, political, social, or cultural factors. Some aspects of our varied collective bargaining systems may be products of special historical conditions when those systems took shape. Once established, the institutions continued long after the special conditions ceased to exist. Present differences may be explainable only by looking to the past.

FOOTNOTES:

n1. 29 U.S.C. 159.

n2. For a history of the emergence of majority rule and exclusive representation, see Twentieth Century Fund, Labor and Government ch. 4 and 5 (1935); Houde Engineering Co., 1 N.L.R.B. 35 (1934).

n3. 321 U.S. 332 (1944).

n4. Id. at 337.

n5. Id. at 338.

n6. Id. at 339.

n7. International Ladies Garment Workers Union v. NLRB, 366 U.S. 731 (1961).

n8. See Clyde Summers, Exclusive Representation By The Majority Union: A Unique Principle of American Law in Hedendaags Arbeidsrecht (1965) (Festschrift honoring Professor Marius G. Levenbach).

n9. Israel borrowed a form of exclusive representation from the United States. See H. Schreiber, Balancing Union and Individual Rights in Israeli Collective Bargaining: Job Security and the Reinstatement of Wrongfully Dismissed Employees, 29 Israel L. Rev. 459 (1995). In Mexico, an employer is required to bargain with a minority union, but a majority union can act as exclusive representative of employees. See Stephen Befort & Virginia Cornett, Beyond The Rhetoric of the NAFTA Treaty Debate: A Comparative Analysis of Labor and Employment Law in Mexico and the United States, 17 Comp. Lab. L.J. 269 (1996).

n10. Robert Burns, To A Louse in Robert Burns Poems 101 (selected and edited by W. Beattie & H. Meikle) (Penguin Books, 1946).

n11. Theodor Tomandl, Social Partnerships: The Austrian System of Industrial Relations 38 (1986). It is also binding on all employers even if they did not want the provision and had no notice of them.

n12. Id. at 40.

n13. Roger Blanpain & Christian Engels, Labour Law in Belgium 263 (1996).

n14. Id. at 276. See also Anthony Ferner & Richard Hyman, Industrial Relations in The New Europe 378 (1992).

n15. Michel Despax and Jacques Rojot, France, in International Encyclopedia for Labour Law and Industrial Relations 250-251 (R. Blanpain, ed., 1991) (hereinafter IELL).

n16. Id. at 258.

n17. Id. at 251. Two or more "representative" unions may participate in the negotiations but only one may sign the agreement. Refusal to sign is a tactic often used by the CGT.

n18. Id. at 252.

n19. Clyde Summers, Comparisons in Labor Law: Sweden and the United States, 7 Ind. Rel. L.J. 1, 12 (1985).

n20. Id. at 11.

n21. Id. at 12.

n22. Kazuo Sugeno, Japanese Labor Law 479 (1992). Some employers have negotiated "single bargaining representative" agreements with a majority union stating that only that union will be recognized as a bargaining party. Sugeno considers this an infringement on the minority union's collective bargaining rights. Id. at 481.

n23. The employer, however, must bargain with the minority union in good faith and not manipulate the bargaining to discriminate against the members of the minority union. Kazuo Sugeno, Collective Bargaining with Rival Unions, 244 Jap. Lab. Bull. No. 10 (Oct. 1, 1985).

n24. Sugeno, supra note 22, at 525.

n25. Id. at 528.

n26. Manfred Weiss, Labour Law And Industrial Relations in Germany 139 (1993).

n27. Tiziano Treu, Italy, in IELL 177 (1991).

n28. Id. at 184.

n29. Bob A. Hepple, United Kingdom, in IELL 253 (1992).

n30. Paul Davies & Mark Freedland, Labour Law, Text and Materials 64 (1979), quoting Gallagher v. Post Office, 3 All E.R. 712, Ch. I (1970). In practice, employers may recognize several unions, each for a separate category of employees. The unions then form a joint council or negotiating committee so the effective bargaining includes multiple categories of employees. But there is only one union representing each category.

n31. Paul Davies & Mark Freedland, Labour Law, Text and Materials 277 (1984). See also 1963 Contracts of Employment Act 4.

n32. Hepple, supra note 29, at 247-8; Single Union Deals Examined, 22 EIRR No. 235 (August, 1993).

n33. Marco Biagi, Employee Representational Participation in Italy, 15 Comp. Lab. L.J. 155 (1994); Central Level Agreement on Company-Level Representation, EIRR, No. 241 (February, 1994). The RSU's displaced the statutory and factory councils, established at plant level, representing all workers, unionized or not.

n34. Summers, supra note 19, at 12-13.

n35. Hepple, supra note 29 at 10.

n36. Linden Lumber Division, Summer & Co. v. NLRB, 419 U.S. 301 (1974).

n37. If there are competing unions, and no choice receives a majority, the NLRB conducts a run-off election between the two highest choices. The run-off may include "No Union," even though the competing unions' combined vote was more than 50%.

n38. The employer can legally bargain with a minority union for a contract covering only union members, but employers almost never do.

n39. There is, in fact, no election held in a unit unless the union can show 30% support.

n40. Despax & Rojot, supra note 15, at 251. Under a little used statutory provision, if a minority union has signed an agreement, a union which has received a majority vote in the works council election can declare the agreement invalid. Act No. 30. Act Respecting Collective Bargaining and the Settlement of Collective Labor Disputes, Sec. L. 132-7.

n41. See supra note 31.

n42. Tomandl, supra note 11, at 45-6; Weiss, supra note 26, at 169.

n43. Blanpain, supra note 13, at 209.

n44. Marie Bruns, Worker Representation at The Enterprise Level in France, 15 Comp. Lab. L.J. 15 (1993).

n45. Central Agreement on Company Level Representation, EIRR, No. 241 (February 1994), p. 19.

n46. Works councils will not be created or will become defunct if there is no substantial support among the employees. In Germany, for example, only 35% of eligible establishments have works councils, but these are exclusively smaller firms, typically with less than 50 employees. W. Muller-Jentsch, Germany: From Collective Voice to Co-management in J. Rogers and W. Streek, Works Councils 56 (1995). In France, 79% of establishments of over 50 employees had enterprise committees. R. Tchobanian, France, From Conflict to Social Dialogue, id. at 130. Majority support, however, is not necessary to create or maintain a works council. In Germany, for example, three employees can call for its establishment, and less than a majority may keep it functioning.

n47. Hepple, supra note 29, at 249; E. Batstone, Working Order 88-98 (1984). Collective agreements often provide that after a shop steward has been elected, the union must approve before the employer will deal with him or her.

n48. See Matthew Finkin, The Road Not Taken: Some Thoughts on Non-Majority Employee Representation, 69 Chi.-Kent L. Rev. 195, 197-98 (1993); Clyde Summers, Unions Without a Majority: A Black Hole?, 66 Chi.-Kent L. Rev. 531 (1990).

n49. The words of Section 7 state that, "Employees shall have the right ... to bargain through representatives of their own choosing," and Section 8(a)(5) provides that, "It shall be an unfair labor practice for an employer ... to refuse to bargain collectively with the representatives of his employees, subject to the provisions of Section 9(a)." That section, quoted at note 1, provides only that when there is a majority representative, it shall be the exclusive representative. It does not limit the duty to bargain with a representative chosen by employees when there is no majority union.

n50. Charles D. Bonano Linen Service, Inc. v. NLRB, 454 U.S. 404 (1982).

n51. Recent controversial decisions by the House of Lords allowed individual contracts to not only vary the terms of collective agreements, but to obstruct union representation and collective bargaining. See Associate Newspaper Ltd. v. Wilson and Associated British Ports, ICR 406 (1995). In these cases, the employers offered wage increases to employees who would sign "personal" contracts, thereby foregoing the right to be represented by a trade union in the future. See Robert Simpson, Freedom of Association and the Right to Organize: The Failure of an Individual Right Strategy, 24 Ind. L.J. 235 (1995).

n52. J.I. Case v. NLRB, supra note 3, at 338. See also David Feller, A General Theory of the Collective Agreement, 61 Cal. L. Rev. 663 (1973).

n53. See Archibald Cox, Rights Under a Labor Agreement, 69 Harv. L. Rev. 601 (1956). For a minority view, see Clyde Summers, Individual Rights in Collective Agreements and Arbitration, 37 N.Y.U. L. Rev. 362 (1962).

n54. 371 U.S. 195 (1962).

n55. That proviso states: "Provided, that any individual employee or group of employees shall have the right at any time to present grievances and have such grievances adjusted, without the intervention of the bargaining representative, as long as the adjustment is not inconsistent with the terms of the collective bargaining contract or agreement then in effect."

n56. Black-Clawson Co. v. Machinists Lodge 355, 313 F.2d 179 (2d. Cir. 1962).

n57. 386 U.S. 171 (1967).

n58. Michael J. Goldberg, The Union's Duty of Fair Representation: What the Courts Do in Fact," 34 Buff. L. Rev. 89 (1985).

n59. Israel borrowed the American rule of exclusive representation, but allowed individuals to sue to enforce normative rights, even though ambiguous, if the parties had not previously settled their meaning by express agreement or a decision in the labor court. See H. Schreiber, supra note 9, at 462-3.

n60. Summers, supra note 19, at 16.

n61. Treu, supra note 27, at 147.

n62. Even some federal courts have declared that in employment at will there is no underlying contractual relationship. See Moore v. Grumman Aerospace Corp., 964 F. Supp. 665 (E.D.N.Y. 1997).

n63. 323 U.S. 192 (1944).

n64. Id. at 199.

n65. See Ford Motor Co. v. Huffman, 345 U.S. 330 (1953), extending the duty to unions the National Labor Relations Act.

n66. Id. at 338.

n67. Vaca v. Sipes, supra note 51, at 190.

n68. Id. at 191.

n69. On the contrary, the Supreme Court has obscured that difference. In Airline Pilots Ass'n v. O'Neil, 589 U.S. 65 (1991), a case involving negotiation of an agreement, the Court rejected the argument that the duty in negotiating an agreement should be different from the duty in administering its terms representation.

n70. See Goldberg, supra note 58.

n71. General legal rules, not focused on collective agreements, may prohibit discrimination in employment on grounds of race, sex, nationality, political beliefs, etc. See Roger Blanpain, Equality of Treatment in Employment, in International Encyclopedia of Comparative Labor Law 10A (1990); R. Ben Israel, Equality and Prohibition of Discrimination in Employment, in Comparative Industrial Relations in Industrialized Market Economies (R. Blanpain & C. Engels, 1993) Ch 12. The United States has similar laws, but the duty of fair representation reaches cases not covered by such laws.

n72. In Germany, the rate of dismissal of foreign workers is twice as frequent as that for German workers. "Works councils do not actively oppose and often tacitly approve soft discriminatory measures aimed at filtering out foreign workers." W. Muller-Jentsch, supra note 46, at 74. As Tomandl says, in Austria, "If the works council consents to a transfer, a dismissal or disciplinary penalty, there is nothing the affected employee can do about it." He acknowledges that in dismissals there is a danger that the employer and works council will combine to fire members of an unpopular minority without good cause. Supra note 9, at 50. Clyde Summers, An American Perspective of The German Model of Worker Participation, 8 Comp. Lab. L.J. 333, 349 (1987). Professor Rojot states that this is not the case in France because access to the Conseil des Prudhommes is readily available and inexpensive, and the court will enforce the individual's statutory and contract rights.

n73. Labor Management Reporting and Disclosure Act of 1959, 29 U.S.C. 401-531.

n74. S. Rep. No. 189 at 6, 86th Cong. (1959).

n75. 105 Cong. Rec. 6471-6 (1959).

n76. Sugeno, supra note 22, at 435.

n77. Paul Davies & Mark Freedland, Labor Legislation and Union Power 483-7 (1993); Hepple, supra note 29, at 223.

n78. In Belgium, for example, union leaders are not elected, but appointed by their predecessors, those already in power. The rank and file are not involved in deciding union policies or union dues, and the financial affairs are kept secret from the members. Blanpain, supra note 13, at 188-89. For discussion of bureaucratic character of unions in Sweden, see Clyde Summers, Worker Participation in Sweden and the United States: Some Comparisons from an American Perspective, 132 U. Pa. L. Rev. 175, 214-9 (1984); and in Germany, Clyde Summers, Workers Participation in the U.S. and West Germany: A Comparative Study from an American Perspective, 28 Am. J. Comp. L. 367, 385-7 (1980); O. Jacobi, B. Keller, & W. Muller-Jentsch, Germany: Codetermining the Future, in A. Ferner and R. Hymans, Industrial Relations in the New Europe 234 (1992); Anthony Carew, Democracy and Government in European Trade Union 194-7 (1976).