What Is Collective Bargaining?

Written by: Rachel Vanni
Legally Reviewed by: David Curle and Jennifer Tsai

December 15, 2020

5 minute read

One of the most important pieces of progressive labor laws comes from the idea of collective bargaining. Workers, especially those at risk of unfair treatment, rely on collective bargaining to provide them with a safe work environment and fair wages. Read on to better understand how collective bargaining works, determine whether a worker is entitled to this process, some vital terms, and what happens if both parties reach an impasse.

Collective Bargaining Defined

Collective bargaining is a process where a group of employees, assisted by a labor union, negotiates contract terms and crafts a collective bargaining agreement (CBA) with an employer. Standard terms include employee compensation, vacation time, working environment, worker safety, and other benefits. The goal of collective bargaining is to negotiate with a company’s management, with employees and executives on equal footing.

Infographic - What Is Collective Bargaining?

Who Is Entitled to Collective Bargaining?

Whether employees may bargain collectively with their employer depends on a number of factors, including the employees’ industry, employer, and state laws. According to the AFL-CIO, three-quarters of private employees and two-thirds of public employees have the right to collective bargaining. Employees in specific industries may be entitled to collective bargaining rights under several federal laws. For example, the Railway Labor Act (RLA) of 1926 grants collective bargaining rights to railroad and airline workers and extends to other transportation employees as well.

More broadly, the National Labor Relations Act (NLRA) of 1935 grants other private-sector employees the right to bargain collectively. The NLRA makes it so employers cannot prevent employees from forming a union.

The right to collective bargaining does not stop at the national level. Multiple international human rights conventions, including the United Nations, recognize the right to collective bargaining as a way for employees to negotiate fairly.

Who Is Not Entitled to Collective Bargaining?

While the NLRA declared collective bargaining is the “policy of the United States,” not all employees have access nor the ability to form a union. The National Labor Act excludes workers such as agricultural laborers, independent contractors, supervisors, and managerial employees from creating a bargaining unit.

Some employers have attempted to passively prevent union creation by labeling employees as supervisors. Known as the Kentucky River Cases, the National Labor Relations Board (NLRB) issued more concise guidance on interpreting the term “supervisor,” as defined in Section 2(11) of the NLRA. While employers may not prevent union creation, employees must understand their rights and be able to spot employer interference.

What Benefits Does Collective Bargaining Provide?

Above all, employees deserve a safe work environment and fair wage. A collective bargaining agreement includes these and many other terms.

In the United States, it pays to participate in collective bargaining. According to the U.S. Bureau of Labor Statistics, in 2019, among full-time or salaried workers, union members had median weekly earnings of $1,095 compared to $892 for non-union members. The disparity between the two groups is more considerable when you look at vulnerable populations such as minorities or those in LGBTQ communities. For example, for Hispanic or Latinx workers, union members had median weekly earnings of $955, while non-union members earned $686.

The benefits of collective bargaining extend far beyond wages. The Economic Policy Institute reports that union workers are more likely to be covered by employer-provided health insurance. Additionally, members typically have greater access to paid sick days. 90 percent of workers covered by a collective bargaining agreement have access to sick days, compared to 73 percent of non-union workers. Union members are also more likely to have additional available vacation time, providing a better work-life balance.

A safe work environment is another critical term in any collective bargaining agreement. Union workers can negotiate additional health hazard pay, job preservation, and increased health and safety measures. This benefit has come into play recently with the COVID-19 pandemic. The United Auto Workers union persuaded large car manufacturers including GM, Ford, and Fiat to temporarily shut down operations for two weeks to prevent the spread of the coronavirus as well as provide protective gear and masks to employees.

How Does Collective Bargaining Work?

Generally, the process begins with a disagreement that occurs between the employees and the employer. The first step involves each side choosing a representative to conduct negotiations with the other party.

The representatives prepare and meet to discuss possible solutions. Negotiations can be quite adversarial, so ground rules must be established to focus on finding solutions rather than creating conflict. Throughout the negotiation process, each party exchanges offers to the other, making concessions in exchange for certain terms.

Once the parties reach an agreement, all agreed-upon terms are memorialized in a collective bargaining agreement signed by each representative involved. Once signed, the agreement is considered a binding contract.

What Happens if Employees and Employers Cannot Agree?

Tensions can run high during the negotiation process. If the representatives cannot reach an agreement, they can turn to several options. Either side may explore legal recourse through the court system. However, litigation can be prohibitively expensive, requires a considerable amount of time to resolve, and generally does not promote a long-term positive relationship.

A neutral third-party — typically a mediator or arbitrator — may be brought in to help resolve a conflict. They can provide alternative dispute resolution skills that help parties get through an impasse.

Lastly, the employees can strike, refusing to work until the employer compromises. While not considered an ideal solution, strikes can effectively pressure the business to consider alternative solutions.


The most effective collective bargaining occurs when both parties come to the table informed and ready to work together to create a solution. Before entering negotiations, both sides must have an ideal agreement in mind with the ability to quickly draft a document once they reach a resolution.

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