A Small Business Owner's Guide to Labor Unions

The federal National Labor Relations Act (NLRA) grants most private-sector employees a protected right to organize. As a business owner, it’s important to understand your legal obligations during unionization efforts to avoid committing unfair labor practices.

The NLRA doesn’t apply to all workers. The Act specifically excludes:

• Agricultural workers
• Rail and airline employees, who are covered by the Railway Labor Act
• Local, state, and federal government employees
• Independent contractors
• Domestic employees like nannies and housekeepers

Some states have their own laws for workers not covered by the NLRA. For instance, fourteen states have laws permitting agricultural workers to unionize, and the Migrant and Seasonal Agricultural Worker Protection Act​ offers other protections.

This guide will explain the union organizing process, your rights and responsibilities, and what happens after a union is formed. While this article provides a general overview, consider consulting an employment law attorney for legal advice specific to your business.

How Are Unions Formed?

The NLRA provides detailed guidance for forming a union. The process begins when employees engage in concerted activity to establish a labor organization. No minimum company size is required. A bargaining unit can be formed by two or more eligible, non-management workers.

The National Labor Relations Board (NLRB) is the independent federal agency that enforces the NLRA. The Board investigates unfair labor practice charges, conducts union elections, and protects employees’ rights to engage in concerted activities, including strikes.

Typically, the process involves these steps:

1. Showing interest: Employees sign authorization cards to show interest in union representation
2. Request for recognition: The union may ask the employer to voluntarily recognize them as the employees’ bargaining representative
3. NLRB petition: If the employer declines, the union files a petition with the NLRB and must show that at least 30% of employees support unionization
4. Election: The NLRB can conduct a formal, secret-ballot election to determine whether a majority of employees want the union

If workers vote to unionize, they become union members and pay dues. A company may have union and non-union workers at the same location.

What Are My Rights and Obligations as an Employer?

Under your First Amendment right to free speech, you may express your opinions about unionization. This includes sharing facts about the cost of union dues or your company’s existing health insurance benefits. However, your speech cannot be coercive.

The NLRA prohibits employers from engaging in unfair labor practices. A helpful way to remember what to avoid is the acronym TIPS:

• Threaten: You cannot threaten to fire employees, close the business, or reduce benefits if they choose to unionize
• Interrogate: You cannot ask employees about their union sentiments, who is involved, or what was discussed at meetings
• Promise: You cannot promise raises, promotions, or other benefits in exchange for employees voting against the union
• Spy: You cannot monitor or conduct surveillance of union organizing activities, either in person or electronically

Committing any of these offenses can lead to fines and other sanctions.

How Does Collective Bargaining Work?

Once a union is certified to represent employees, the employer has a legal duty to begin the collective bargaining process. This means you must negotiate in good faith with the union representative over key employment terms.

Topics typically included in a collective bargaining agreement (CBA) are:

• Wage and salary negotiations
• Healthcare insurance and paid time off
• General working conditions
• Occupational safety standards and procedures
• Grievance procedures

The goal is to reach an agreement that union members can ratify.

How Do ‘Right to Work’ Laws Affect Union Membership?

The Taft-Hartley Act, also known as the Labor Management Relations Act, permits states to pass “right-to-work” laws. These laws state that an employee can’t be required to join a union or pay union dues as a condition of employment.

About half of the states are right-to-work states. In these states, employers cannot require employees to pay union dues. In non-RTW states, employees in a unionized workplace may be required to pay agency fees to cover collective bargaining costs, even if they don’t join the union.

What Are Union Members‘ Rights and Responsibilities?

The Labor-Management Reporting and Disclosure Act (LMRDA) governs unions’ internal operations. It establishes a bill of rights for union members and sets rules for union officers’ duties, including acting as fiduciaries for union funds. The union must provide fair representation to all employees in the bargaining unit, including legal counsel during arbitration or litigation.

Hire an Employment Law Attorney for Your Business

Navigating labor laws can be complex for any business owner. Whether your employees are discussing unionization or you need to negotiate a collective bargaining agreement, getting proper legal advice is critical. An employment law attorney who understands federal and state labor laws can help protect your business and ensure you meet your legal obligations.