How Does Collective Bargaining Work?

What Is Collective Bargaining? | What Laws Protect the Right to Engage in Collective Bargaining?

Since the advent of the industrial revolution, there has been a tension between workers and owners, between labor and management, as laborers seek to improve wages and working conditions and their bosses seek to maximize profits by minimizing labor costs. That tension led to the creation of labor unions, which in turn led to the concept of collective bargaining.

What Is Collective Bargaining?

Collective bargaining is a process whereby a group of workers, typically members of a union, negotiate the terms of an employment agreement together, with those terms applying equally to all participants. The collective bargaining process can address a variety of work-related issues, including compensation, benefits, leave, safety requirements, hours, and work-life balance issues.

What Are the Benefits of a Collective Bargaining Agreement?

The goal of collective bargaining is to promote greater bargaining power for workers in labor negotiations. Before the advent of collective bargaining, workers had little clout in discussions or determinations of labor conditions and were frequently exploited by owners and management. With a collective bargaining agreement in place, workers have strength in numbers. They can take collective action to compel employers to improve pay and other working conditions.

A collective bargaining agreement also typically provides greater job protection to union members. Most states consider employees to be at-will, meaning they can be terminated at any time for any reason (except where the termination would violate an employment contract or existing law). A collective bargaining agreement outlines worker expectations and can create a situation where workers may be terminated only for cause.

Proponents of the collective bargaining process contend that it also benefits employers in the following ways:

  • Greater predictability and consistency in pay, benefits, and hours, so employers can more effectively project costs and production
  • Better employee morale, which has been tied to increased worker productivity
  • Simplification of processes for resolving labor conflicts, as negotiations are conducted with the union

What Laws Protect the Right to Engage in Collective Bargaining?

The National Labor Relations Act gives workers the right to engage in collective bargaining. Under the provisions of the NLRA, your employer and your chosen representative (typically a union officer) must bargain in good faith about all terms and conditions of employment until they either come to an agreement or reach an impasse. The NLRA also regulates which tactics (e.g., strikes, lockouts, picketing) each side may or may not employ to further its bargaining objectives. If an existing agreement expires before a new one is put in place, most of the terms of the expired contract remain in effect while the parties continue to bargain. The provisions of the NLRA apply only to private sector employees. Federal employees have limited rights to participate in collective bargaining, and state and local government workers may do so only if their state legislators have passed laws giving them that right.

Common Rules in the Collective Bargaining Process

The NLRA establishes procedures for the selection of a labor organization to represent a unit of employees in collective bargaining. The act prohibits employers from interfering with this selection. Once employees have identified a representative, the parties involved in a collective bargaining process must meet at reasonable times and make a good faith effort to come to agreement on all mandatory issues, such as compensation, vacation time, hours, benefits, and safety precautions. Neither party may refuse to participate in collective bargaining, but there is no requirement that the parties come to any agreement. If, however, an agreement is not reached, the employer may declare an “impasse” and defer to the last offer presented to the union. The union can disagree that an impasse has been reached and ask the National Labor Relations Board to intervene.

The obligation to engage in collective bargaining does not end if an existing contract expires. The parties must still use good faith to try to negotiate a new agreement. Most of the terms of an expired agreement remain in place until a new agreement is reached.

What Problems Can Arise in Collective Bargaining? How Are They Resolved?

The most common problems that arise in the collective bargaining process include:

  • Changes by an employer to the terms of an agreement without negotiation or impasse
  • Refusal of either party to meet at a reasonable time or at reasonable intervals
  • Refusal of either party to provide requested information relevant to the bargaining process or to the terms and conditions of employment
  • Refusal of either party to sign a writing that incorporates the terms of the collective bargaining agreement
  • Unilateral changes to the terms and conditions of employment while a collective bargaining agreement is still in effect
  • Attempts by an employer to circumvent the provisions of a collective bargaining agreement by transferring operations to an “alter ego” of the business
  • Attempts by an employer to negotiate directly with employees when a collective bargaining agreement is in place
  • Locking out employees to pressure a union to consent to modification of the terms of employment
  • Locking out employees over issues related to a subject of a collective bargaining process
  • Locking out workers without telling them what they need to do for reinstatement
  • Declaring an impasse where one has not been reached
  • Withdrawing recognition of a union that has the support of a majority of workers

When either party to a collective bargaining agreement engages in acts that wrongfully interfere with the process, the other party may look to the National Labor Relations Board for enforcement.


Workers in the United States have the right to form and join unions and to have those unions represent them in collective bargaining with employers. Federal law grants private sector employees the right to engage in collective bargaining. When parties to a collective bargaining process engage in wrongful acts, the other parties to that process can ask the National Labor Relations Board to intervene and enforce compliance.

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