Skip to main content
Find a Lawyer
Please enter a legal issue and/or a location
Begin typing to search, use arrow keys to navigate, use enter to select

Labor Unions: The Basics

Small business owners give very little thought to labor unions. Most unions exist for employees to organize and negotiate with employers. In small businesses, employees are more likely to knock at their boss's door to discuss higher wages or better working conditions. A small business owner using unfair labor practices and labor standards won't have labor disputes. They just won't have any employees.

Labor unions first formed in Europe in the 1800s. When Europe began industrializing, labor laws favored the new industrial magnates. Wages were low, there was little to no job security, and conditions of employment were poor. Workers unionized because the only power they had was as a collective unit. During the 1800s and early 1900s, the union movement spread to the United States.

Today, collective bargaining ensures fair wages, equal work hours, and other job benefits. Large corporations find working with unions effective since they only deal with bargaining representatives. They don't need to negotiate each employment agreement with individual workers.

The National Labor Relations Act (NLRA) governs collective bargaining and union organizations. It's backed by the National Labor Relations Board (NLRB), a government agency based in Washington, DC, with regional offices as well.

National Labor Relations Act

The NLRA allows employees to decide if they want a union. Employers cannot interfere with unionization efforts. There is no minimum size for a labor union. The only rule is that all eligible members must be non-management workers. A bargaining unit can consist of two or more eligible members.

The National Labor Relations Board (NLRB), which is independent of the Department of Labor, enforces the NLRA and safeguards a union's right to organize. The NLRB is an independent federal agency that addresses unfair labor practice charges. The Board also protects the rights of employees to strike and the rights of non-union employees in a union workplace.

The NLRA does not apply to all workers. The Act specifically excludes from coverage workers who are:

Fourteen states have laws permitting agricultural workers to unionize. The Migrant and Seasonal Agricultural Worker Protection Act gives farm workers some of the same protections as the NLRA.

If the workers in a plant or location agree to unionize, they become members of the union and pay dues to the union to cover the costs of services provided. A company may have union and non-union workers at the same location.

Right-to-Work and Unionization

About half of states are “right-to-work" states. In a right-to-work state, requiring employees to become union workers or pay union dues is illegal. In non-RTW states, if a group of employees unionizes, all workers in that office or shop must join the union membership.

There are pros and cons to both sides of the RTW and unionization argument. Union supporters say all workers benefit from union activities and should support union efforts. RTW supporters say that workers should decide for themselves whether to pay union dues or not to keep working. 

Collective Bargaining

The NLRA provides detailed guidance for forming a union and organizing other workers. When employees establish a labor organization or discuss unionizing, employers cannot interfere with the discussions.

Once a union represents employees, employers must negotiate with the union representative during the collective bargaining process. The agreement should include topics like:

Employees in large corporations benefit from collective bargaining agreements since union representatives can negotiate better contracts than many individual workers could alone.

Rights and Responsibilities of Union Members

The Labor-Management Reporting and Disclosure Act (LMRDA) contains specific rules governing the duties of union officers. Union officials must act in good faith as fiduciaries to union funds and are to report union activities to members when asked.

Union members have certain rights and duties as part of their union membership. The union must provide representation and legal counsel during arbitration or litigation. Employees have the right to consult the NLRB for assistance if they feel their union reps are mishandling their union.

The Taft-Hartley Act

The Taft-Hartley Act, also called the Labor Management Relations Act, allows a restriction of a union's ability to act in the private sector. Congress enacted Taft-Hartley just after World War II. Congress had concerns at that time about manufacturing shutdowns affecting wartime preparedness. Taft-Hartley allowed Congress to issue injunctions against striking workers if the strike affected national safety. The Act also:

  • Prohibits “secondary boycotts," the boycotting or picketing of a business with which the union does not have a dispute. Secondary boycotts try to convince the second company to stop doing business with the real target.
  • Prohibits “sympathy strikes," where workers not involved in a labor dispute strike in support of workers on strike in an unrelated industry or field.
  • Authorizes states to pass laws that forbid “closed" or union-only shops.

State laws and their amendments can affect how unions operate.

Hire an Employment Law Attorney for Your Business

Collective bargaining may affect small businesses as much as large ones. Whether your employees want pensions or higher wages, you must negotiate fairly for everyone's benefit. 

If a union represents your employees, you need legal advice from an employment law attorney who knows the state and federal laws for your area and industry. Speak with an expert on the National Labor Relations Act.

Was this helpful?

You Don’t Have To Solve This on Your Own – Get a Lawyer’s Help

Meeting with a lawyer can help you understand your options and how to best protect your rights. Visit our attorney directory to find a lawyer near you who can help.

Or contact an attorney near you:

Next Steps

Contact a qualified business attorney to help you prevent and address human resources problems.

Begin typing to search, use arrow keys to navigate, use enter to select

Kick-Start Your LLC in Minutes!

LegalZoom can help you form an LLC on your own or with advice every step of the way.

  • Starts at $0 + state fees
  • Protect your personal assets
  • Launch with the #1 online business formation service

Select and start my LLC


Prefer to work with a lawyer? 

Find one right now.

Copied to clipboard

Find a Lawyer

More Options