Collective bargaining consists of negotiations between an employer and a group of employees so as to determine the conditions of employment. The result of collective bargaining procedures is a collective agreement. Employees are often represented in bargaining by a union or other labor organization. Collective bargaining is governed by federal and state statutory laws, administrative agency regulations, and judicial decisions. In areas where federal and state law overlap, state laws are preempted.
The main body of law governing collective bargaining is the National Labor Relations Act (NLRA). It explicitly grants employees the right to collectively bargain and join trade unions. The NLRA was originally enacted by Congress in 1935 under its power to regulate interstate commerce. It applies to most private non-agricultural employees and employers engaged in some aspect of interstate commerce. Decisions and regulations of the National Labor Relations Board, which was established by the NLRA, greatly supplement and define the provisions of the act.
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. The NLRA requires the employer to bargain with the appointed representative of its employees. It does not require either side to agree to a proposal or make concessions but does establish procedural guidelines on good faith bargaining. Proposals which would violate the NLRA or other laws may not be subject to collective bargaining. The NLRA also establishes regulations on what tactics (e.g. strikes, lock-outs, picketing) each side may employ to further their bargaining objectives.
State laws further regulate collective bargaining and make collective agreements enforceable under state law. They may also provide guidelines for those employers and employees not covered by the NLRA, such as agricultural laborers.
Arbitration is a method of dispute resolution used as an alternative to litigation. It is commonly designated in collective agreements between employers and employees as the way to resolve disputes. The parties select a neutral third party (an arbiter) to hold a formal or informal hearing on the disagreement. The arbiter then issues a decision binding on the parties. Both federal and state law governs the practice of arbitration. While the Federal Arbitration Act, by its own terms, is not applicable to employment contracts, federal courts are increasingly applying the law in labor disputes. Thirty-five states have adopted the Uniform Arbitration Act as state law. Thus, the arbitration agreement and decision of the arbiter may be enforceable under state and federal law.