The Disadvantages of Union Membership From an Employer's Perspective

While unions provide many benefits for workers, they create a variety of disadvantages for employers, including strict federal labor laws governing the rights of employers in relation to unions. Just because your workforce may unionize doesn’t mean your relationship with your employees must be adversarial. Understanding some of the disadvantages of union for employers will help you avoid conflicts and work better with an organized workforce.

One of the main disadvantages of having your employees unionize is that your labor costs will likely rise. Union workers make approximately 22 percent more than their non-union counterparts, according to data provided at the website of the U.S. Bureau of Labor Statistics. With collective bargaining, employees are free to talk with each other before sending a representative on their behalf to negotiate wages, benefits and working conditions, all of which can lead to higher production costs.

If you do not agree to the wage, benefits or workplace rules requested by union members, they are legally allowed to strike. Federal laws limit your ability to fire striking workers. A strike not only costs you money directly from lost production, but causes other problems, as well. Publicity from a strike can cause a decrease in sales if sympathetic customers boycott your products or services. Your vendors and commercial customers may stop working with you, anticipating that you may not be able to pay your bills or deliver what they buy.

If you promote workers based on parameters such as merit, productivity or other objective means, you may lose this opportunity with a union workforce. Many unions negotiate workplace rules that promote and protect workers based on seniority, rather than merit. This means that if you need to terminate a number of workers, you must terminate those workers you’ve hired most recently, not those workers who are the least productive. Your ability to discipline workers will also decrease, as union rules and reactions to instances of employee discipline limit your options to deal with workers you deem poor performers.

With an organized labor force, you are likely to face more challenges to actions you take regarding an employee’s status. While individual employees might not have the financial resources or will to contest such things as a termination, a demotion, a lack of promotion, or alleged harassment or discrimination, a union worker may be encouraged to file a suit or appeal your actions, and may be offered union support to do so.

If union members pay dues, they can request that those dues be deducted from their paychecks, adding an extra task for your accounting department. After you deduct the dues from employees' paychecks, you must then disburse the funds to the appropriate union account.