When the NLRB has certified a union, that union represents employees during contract negotiations. Collective bargaining differs from one situation to another in terms of bargaining structure—that is, a contract may involve a narrow group of employees in a craft union or a broad group in an industrial union. The majority of contract negotiations take place between unions and employers that have been through the process before. In the typical situation, management has come to accept the union as an organization it must work with.

Clearly, the outcome of contract negotiations can have important consequences for labor costs, productivity, and the organization’s ability to compete. Therefore, unions and management need to prepare carefully for collective bargaining. Preparation includes establishing objectives, reviewing the old contract, gathering data, predicting the likely demands to be made, and establishing the cost of meeting the demands. The intended outcome of collective bargaining is a contract with terms acceptable to both parties. If one or both sides determine that negotiation alone will not produce such an agreement, bargaining breaks down.

A strike is a collective decision of the union members not to work until certain demands or conditions are met. The union members vote, and if the majority favors a strike, they all go on strike at that time. A primary reason strikes are rare is that a strike is seldom in the best interests of either party. Not only do workers lose wages and employers lose production, but the negative experience of a strike can make future interactions more difficult. Because work stoppages are so costly and risky, unions and employers generally prefer other methods for resolving conflicts.

With mediation, a neutral third party hears the views of both sides and facilitates the negotiation process. The mediator has no formal authority to dictate a resolution, so a strike remains a possibility. A mediator typically reports on the reasons for the dispute, the views and arguments of both sides, and (sometimes) a recommended settlement, which the parties may decline. The public nature of these recommendations may add pressures.

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