Unionism and Employer Discrimination: Analysis of 8(a)(3) Violations

The choice model of firm violations of section 8(a)(3) of the NLRA specified here was tested for the period 1972–1979 using a sample of firms from the New York and American Stock Exchange. The results show that previous violations of this section of the Act, relative per cent of union organization, and changes in firm employment are statistically significant determinants of the marginal benefits of violations. These findings generally support union officials' claims that the penalties in the Act are not strong deterrents to management violations and may be considered a relatively low cost of doing business. However, assertions by union officials that product market factors are important in firm decisions to violate the Act are not supported. In addition, the results do not support NLRB officials' belief that firms that commit violations are not likely to commit them again. The fact that there are no significant differences in violations by firms in our sample as a result of product market variables or industry implies that ethical considerations may be a factor in choosing to violate the Act. Since current penalties are low, and past violations are significant in determining current violators, an increase in penalties may reduce violations by those who do not consider the ethical implications of the Act. If the intent of the current NLRA is to reduce the coercion of employees by employers, an amendment to increase the economic costs to employers seems indicated.