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CHAPTER 20-LABOR LAW
TRUE/FALSE
1. A fundamental aim of the National Labor Relations Act is the establishment of industrial
peace and the preservation of the flow of commerce.
Answer: True
2. The five members of the National Labor Relations Board are appointed by the President.
Answer: True
3. A “hot cargo” clause, prohibiting an employer from doing business with a specified
company in order to increase bargaining pressure, is legal.
Answer: True
4. The National Labor Relations Act guarantees employees the right to join unions.
Answer: True
5. Union members earn, on average, $200 more per week than non-union members.
Answer: True
6. The NLRA requires the union and the employer to reach an agreement through good-faith
collective bargaining.
Answer: False
7. Valley Mart told its employees that they would be fired if they actively supported a
unionizing effort. Valley Mart has committed an unfair labor practice.
Answer: True
8. If employees wish to organize a union, the employer is prohibited from distributing written
notices to employees stating it is opposed to union activity within the company.
Answer: False
9. At one point in American history, American courts regarded any coordinated effort by
workers as a criminal conspiracy, and courts convicted workers merely for the act of joining
together, even if no strike took place.

Answer: True
10. Joan was unhappy with her union's decision not to file a grievance about one of her
complaints. Consequently, she publicly criticized the union officials. Since Joan went public
with her criticism, the union can discipline her.
Answer: False
11. The management of Northeastern Manufacturing may not close one of its manufacturing
plants without bargaining that issue with the union if its workers are represented by a
collective bargaining unit.
Answer: False
12. A closed shop means the employer must hire only union members. Federal law expressly
allows closed shops.
Answer: False
13. The union representing workers at Blue Ridge Co. were unable to reach a collective
bargaining agreement with management. The union may legally stage a strike in which
members stop working but remain at their job posts, physically blocking replacement workers
from taking their places, so the strike is more effective.
Answer: False
14. The management and union at TriColor have bargained for two years without reaching an
agreement. After notifying the union, TriColor prohibited the workers from entering the
factory to work. This is a lockout.
Answer: True
15. The workers at Thom Trucking went on strike over wages. Thom Trucking may hire
permanent replacement workers.
Answer: True
MULTIPLE CHOICE
1. In 1932, Congress passed what legislation prohibiting federal court injunctions in
nonviolent labor disputes, thereby declaring that workers should be permitted to organize
unions and use their collective power to achieve legitimate economic ends?

a. The Sherman Act.
b. The Norris-LaGuardia Act.
c. The National Labor Relations Act.
d. The Labor-Management Relations Act.
Answer: B
2. Which of the following are tasks of the National Labor Relations Board?
a. To adjudicate claims that an employer has committed an unfair labor practice.
b. To adjudicate claims that a union has committed an unfair labor practice.
c. To decide whether a particular union is entitled to represent a group of employees.
d. All the above are tasks of the National Labor Relations Board.
Answer: D
3. Which of the following is an unfair labor practice for a union?
a. To encourage an employer to discriminate against a particular employee because of a union
dispute.
b. To bargain collectively.
c. To engage in a legal strike.
d. All of the above are unfair labor practices by a union.
Answer: A
4. The landmark federal labor statute that requires financial disclosures by union leadership
and guarantees union members free speech and fair elections is the:
a. NLRA.
b. Labor-Management Relations Act.
c. Labor-Management Reporting and Disclosure Act.
d. Norris-LaGuardia Act.
Answer: C

5. Stacy believes her rights as a union worker have been violated by her employer. If the
specific rights are addressed by both state and federal law:
a. the state law will apply.
b. the federal law will apply.
c. both state and federal law will apply.
d. she may choose which law, state or federal, will govern her rights.
Answer: B
6. Zoe, who works as a retail clerk, wishes to talk with her co-workers about organizing a
union. Her employer forbids her from talking with other workers about union activity in the
presence of customers and threatens to fire her if she joins the union. Does the employer have
a legal right to make this threat to Zoe?
a. Yes, the employer may limit time and place of discussions about union organizing.
b. Yes, but only if expressly authorized by state law.
c. No, an employee has the right of free speech at anytime.
d. No. An employee may limit the time and place of conversation, but may not threaten to fire
the employee.
Answer: D
7. All of the following might be in the same collective bargaining unit except:
a. secretarial workers.
b. clerical workers.
c. the executive secretary.
d. the department manager.
e. Both c and d.
Answer: E
8. Ron and several fellow workers of Vicy, Inc., a small manufacturing company, wished to
organize a union. When Vicy learned of this activity, it issued a bulletin to all workers stating

that a union will only hurt the company and that "we are a family that can solve any problems
ourselves -- we do not need union activists from outside our company trying to tell us what to
do!" Which statement is correct?
a. As a small family business, Vicy can obtain an injunction halting the unionizing drive.
b. If the union will hurt the company, Vicy can obtain an injunction halting the unionizing
drive.
c. If union activists from outside the company are involved in the unionization drive, Vicy
can obtain an injunction halting the drive.
d. The employees have the right to organize a union, regardless of Vicy's status.
Answer: D
9. Ron and several fellow workers of Vicy, Inc., a small manufacturing company, wished to
organize a union. When Vicy learned of this activity, it issued a bulletin to all workers stating
that a union will only hurt the company and that "we are a family that can solve any problems
ourselves -- we do not need union activists from outside our company trying to tell us what to
do!" Which statement is correct concerning the bulletin issued by Vicy?
a. Vicy has committed an unfair labor practice. Vicy must remain neutral during the
organizing drive.
b. Vicy has committed an unfair labor practice. The bulletin constitutes outrageous
interference with the union organizing campaign.
c. Vicy has not committed an unfair labor practice. An employer may vigorously present antiunion views to its employees.
d. Whether Vicy has committed an unfair labor practice depends on whether the bulletin was
approved by the NLRB.
Answer: C
10. Exec-Pac, Inc. is extremely opposed to having its employees organize. The union
attempting to organize a collective bargaining unit filed an unfair labor practices claim with
the National Labor Relations Board (NLRB), alleging that Exec-Pac illegally interfered with
its unionization drive. The NLRB, convinced that an election would be pointless, waived the

requirement of an election and certified the union as the exclusive representative of ExecPac's workers. Which statement is correct?
a. The NLRB had to be convinced that the employer's interference with the union's attempt to
organize the workers was outrageous.
b. The NLRB has the authority to waive the requirement of a union election if it believes the
employer has shown anti-union bias.
c. The NLRB may waive an election if the employer has distributed written materials stating
it is opposed to a union.
d. None of the above.
Answer: A
11. An employer is in the process of negotiating a new contract with its union. During
negotiations, the employer changed the workweek from a five-day, eight-hour-per-day week
to a four-day, ten-hour-per-day week. Which statement is correct?
a. This is a violation of the National Labor Relations Act.
b. This is not a violation of the NLRA because the employer is bargaining with the union.
c. This is not violation of the NLRA because the total number of work hours per week has not
changed.
d. Whether or not this is a violation of the NLRA will depend on the relevant state statutory
law.
Answer: A
12. Kelly is upset with her supervisor and believes his conduct violates the terms of her
union's collective bargaining agreement (CBA). The union filed a grievance on Kelly's
behalf. Who will conduct the grievance hearing?
a. The U.S. Court of Appeals.
b. The National Labor Relations Board.
c. A member of the company's management team.
d. A replacement worker.

Answer: C
13. Jeremy was terminated by his employer for violating company rules. He challenged the
termination by filing a grievance. Eventually, the matter went to arbitration and Jeremy's
termination was ruled to have been improper. The employer filed a claim in court to have the
arbitrator's ruling overturned since it claimed the facts clearly demonstrated Jeremy had
violated the express rules of the company. The employer claimed that the arbitrator had
ignored the obvious and had committed a serious mistake of fact. A court may refuse to
enforce an arbitrator’s ruling if:
a. it is proven that the arbitrator made a serious error of fact.
b. the court finds the ruling is contrary to public policy.
c. Both of the above are correct.
d. Neither of the above is correct.
Answer: B
14. A union declares its workers are going on strike. The employer states the collective
bargaining agreement is still in force for another eight months and that it contains a no-strike
clause. The union claims the CBA's no-strike provision is not binding since new union
leadership is in place. Which of the following statements is correct?
a. The union can strike since new leadership is now in control.
b. The union can strike since no-strike provisions have been ruled by the courts to be
unenforceable.
c. The union cannot strike, as strikes to exert economic pressure on management are
prohibited by the NLRA.
d. The union cannot strike because of the no-strike clause in the contract.
Answer: D
15. A company's collective bargaining agreement has expired and negotiations are underway
for a new one. After one exhausting session, union leaders have decided management will not
bargain in good faith. The union declares it will be going out on strike the following midnight
if an agreement is not reached. The union:

a. is allowed to go out on strike the following midnight.
b. must give the employer at least seven days' notice before going out on strike.
c. must give the employer at least 30 days' notice before going out on strike.
d. must give the employer at least 60 days' notice before going out on strike.
Answer: D
16. Mega Corp is negotiating a collective bargaining agreement with a union. The company
claims it is not financially able to pay the wage increase the union is demanding. Which
statement is correct?
a. The union has a legal right to inspect the financial records of the company to verify that the
employer cannot pay the proposed wage increase.
b. It is an unfair labor practice if the employer claims it cannot pay the higher wages but
refuses to allow the union to inspect its financial records.
c. Both of the above are correct.
d. None of the above.
Answer: C
17. A state law prohibits firefighters and school teachers from going out on strike. Though
they are allowed to organize into collective bargaining units, state law prohibits them from
striking. Such a state law:
a. is legal.
b. is not legal since the U.S. Supreme Court has ruled such a state law violates the equal
protection clause of the Constitution.
c. is not legal since the federal law (NLRA) preempts state law.
d. is not legal because the right to form unions is illusory without the right to strike.
Answer: A
18. A union declares it will be engaging in a partial strike whereby its employees will
alternate between working for a period of time and then walking off the job for an indefinite
time. Thus, employees may work for a few days or only a few hours before walking off the

job again. The employer claims the union does not have the legal right to engage in a partial
strike. Which statement is correct?
a. The employer is correct. The union must either strike or work—it cannot alternate between
working and striking.
b. The employer is correct only if the union does not state the specific hours or days workers
will be off the job. The law requires the union to provide the employer with at least seven
days' notice of when workers will be off the job.
c. The employer is not correct since the NLRA expressly states workers have a right to
engage in a partial strike.
d. Whether the employer is correct depends on state law.
Answer: A
19. Employees of Mega Corp. have gone out on strike seeking better pay. Mega Corp.
announces that if the union does not end the strike it will begin hiring replacement workers.
Which statement is correct?
a. Hiring replacement workers during a strike is an unfair labor practice.
b. Mega Corp can only hire replacement workers if the collective bargaining agreement
expressly gives the company the right to do so.
c. Mega Corp can only hire replacement workers if it gives the union 14 days' notice prior to
actually bringing in the replacement employees.
d. Mega Corp can hire replacement workers at any time during a strike.
Answer: D
20. Mega Corp. hired permanent replacement workers when its union went out on strike
seeking better medical and retirement benefits. After the strike is over, Mega Corp.:
a. must give the striking employees their jobs back since this was an economic strike.
b. must give the striking employees their jobs back since this was an unfair labor practices
strike.
c. may hire additional workers without considering the striking employees who want their
jobs back.

d. does not have to give the striking employees their jobs back since this was an economic
strike.
Answer: D
21. Secondary boycotts:
a. are generally legal provided the boycott is peaceful.
b. are generally legal provided the boycott does not involve public employees such as nurses
or school teachers.
c. are not expressly permitted nor prohibited under federal law.
d. are generally illegal.
Answer: D
22. Jessup asks the union to file a grievance against his employer. The union believes the
grievance is without merit and refuses to file it. Jessup claims the union has violated its duty
to him as a card-carrying, dues-paying union member. Is he right?
a. Yes.
b. Yes, but only if it is later proven that Jessup had a valid claim.
c. No, provided the union acted in good faith.
d. No. A union never has an affirmative duty to file a grievance if it does not wish to do so.
Answer: C
23. Employees of Truan went on strike because Truan refused to bargain in good faith. After
the strike, the striking workers are:
a. entitled to get their jobs back.
b. not entitled to get their jobs back.
c. entitled to get their jobs back but only as they become available.
d. fired.
Answer: A
24. The duty of fair representation created by the NLRA and the LMRDA requires that:

a. a union represent all members impartially and in good faith.
b. a union must pursue any member’s grievance against the employer.
c. an employer, in communications with employees during a union organizing effort, must
fairly represent the effects it believes a union will have on the company.
d. the NLRB certify only proposed bargaining units that it thinks the union can properly
represent.
Answer: A
25. The management and union representatives of Prime Manufacturing are bargaining a new
CBA. Management:
a. may use a lockout at any time to pressure the union into compromise.
b. may never use a lockout as a tactic to pressure the union.
c. may use a lockout if the parties have reached an impasse in their bargaining and
management notifies the union before locking the employees out.
d. may use a lockout only as a retaliatory measure if and when the union has threatened a
strike.
Answer: C
ESSAY
1. Rick and Allan want to start a union in the small factory where they work. Outline the
basic procedures they will need to follow to get a union recognized as the exclusive
bargaining unit for the company employees.
Answer: The employees will need to visit with various union representatives to find out
which union would be best suited to represent their interests. Often organization meetings are
conducted where speakers from unions talk to the employees about their particular union. A
union will then attempt to have a sizable percentage of the workers, say 30 percent or more,
sign authorization cards stating that they, the workers, want that particular union to represent
them. If the employer does not voluntarily recognize the union as the employees'
representative, the union will petition the NLRB for an election. The NLRB will insure that
the workers have been properly categorized and that the chosen union is an appropriate
representative. If so, it will authorize an election. If at least a simple majority of the eligible

workers vote for that union (50 percent plus 1), then the union is certified as the exclusive
bargaining unit for the employees.
2. Identify some of the trends and characteristics of organized labor. For example, discuss
how the statistics compare for percentage of government vs. private sector employees with
union membership, what occupational groups and industries have the highest percentage of
unionized workers, and what regions of the country have the highest and lowest union
membership.
Answer: Organized labor is in flux in the United States. Today, the percentage of the
workforce that is unionized is about half of what it was in the 1950s. However, union
membership grew by 311,000 the year before the textbook was published. The largest unions
are national in scope, with many affiliated locals throughout the country. More than four
times as great a percentage of government as private sector employees are in unions (35.9 vs.
7.5 percent). The two occupational groups with the greatest percentage of union membership
are education (37.3 percent) and police and fire (34.7 percent). The private industries with the
highest percentage of union workers include transportation and utilities; construction; and
installation, maintenance, and repair. Union membership is highest in the Northeast, North
Central, and Pacific states. Half of all union workers live in the six states of California, New
York, Illinois, Michigan, Ohio, and Pennsylvania. Union membership is lowest in the South.
3. Connie and her fellow union employees went out on strike when the company refused to
meet the union's demands for higher wages and better benefits. Shortly thereafter, the
company began hiring permanent replacement workers. After a hard eight-month strike, the
union and the company reached an agreement. When the strike was over, Connie was upset
that she was not given her job back. The replacement worker that took over her job was
retained. She believes she has a legal right to her job, especially since she was a faithful
employee for over 20 years. Is Connie right? Explain.
Answer: No. Connie has no legal claim to require the company to give her job back. The
strike was based on economic issues and the law clearly states the employer has the right not
only to hire replacement workers but to retain those new workers after the strike. When
employees go out on strike they run the risk they will not get their jobs back. Most
companies, in the interest of preserving somewhat decent relations with the union
membership and often as a part of the final agreement, do hire back the workers who went
out on strike and dismiss the replacement workers. However, this is not a legal requirement.

The only time Connie would have a legal right to demand her job back would be if the strike
had occurred due to an unfair labor practice on the part of the company.
4. Mega Corp has decided to subcontract about 30 percent of its production work to a
company located in Thailand. The subcontracting is designed to replace union workers with
cheaper labor. The work that will be contracted away had previously been done in the
company's main plant in New Jersey. The union representing the Mega Corp workers claims
this is an issue subject to mandatory bargaining. Management claims it is a corporate
organization decision and, thus, not subject to bargaining. Who is right?
Answer: The workers are right. Since the work would have been done by union employees in
the New Jersey plant, this is an issue subject to mandatory bargaining. It is important to keep
in mind that, as in all bargaining matters, the law does not require the employer and union to
reach agreement. Thus, even though the subcontracting issue is subject to bargaining, that
does not mean the employer will not be able to contract away the work to the plant in
Thailand. The bargaining process will allow the union to investigate what is going on and to
see if a potential unfair labor practice has occurred and/or if the terms of the collective
bargaining agreement have been violated. Assuming neither has occurred, the company may
legally send the work to Thailand.
5. Jenna works for Mega Corp as a production employee. She is paid an hourly wage. She
wishes to negotiate her own employment contract with management since she does not agree
with the terms of her union's collective bargaining agreement. Can Jenna negotiate her own
contract? Explain.
Answer: No. Once Jenna's union was certified as the official representative of Mega Corp's
employees (or, at least, a certain group of employees within the company), then the union has
the exclusive right to negotiate the employment contract for that class of employees. It would
be a violation of federal law (Section 9 of the National Labor Relations Act of 1935) if the
company negotiated individually with Jenna. The principle of "exclusivity" is illustrated by
this situation.
6. The dock workers on Main Harbor were union members. They have been negotiating a
contract with management, so far unsuccessfully. Discuss what tactics they might use in
unison to gain a bargaining advantage, identify the statute that guarantees their rights, and
discuss the possible response by management.

Answer: Tactics union members take together to gain a bargaining advantage are called
concerted action. The two most common forms are strikes and picketing. The union may call
a strike, or refusal to work, if the union cannot reach a collective bargaining agreement with
management. The union may use a strike to exert economic pressure on management, to
protest an unfair labor practice, or to preserve work management wants to send elsewhere.
Violent strikes, partial strikes, or strikes by public employees are prohibited. Striking workers
are allowed to establish picket lines at the employer’s worksite and to urge others not to cross
the line. Secondary boycotts, however, are generally illegal. The National Labor Relations
Act (NLRA) is the statute that guarantees employees the right to engage in concerted action
for mutual aid or protection. Management may use lockouts, where they prohibit workers
from entering the workplace. Most lockouts are legal. A defensive lockout is almost always
legal. A lockout might be management’s response to a union’s sit-down strike or whipsaw
strike. An offensive lockout is legal if the union and management have reached a bargaining
impasse. Management must usually notify the union prior to the lockout, in order to
encourage bargaining.

Test Bank For Introduction to Business Law
Jeffrey F. Beatty, Susan S. Samuelson
9781133188155

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