Future Business Leaders of America (FBLA) Business Law Practice Exam

What is the process in which union and management representatives negotiate wages and working conditions?

1. Arbitration

2. Mediation

3. Collective bargaining

4. Negotiation

The correct answer is: Collective bargaining

The process in which union and management representatives negotiate wages and working conditions is known as collective bargaining. This term specifically refers to the formal discussion and agreement process that occurs between the representatives of the employees (typically a union) and the employers. The aim of collective bargaining is to reach a mutual agreement on various employment terms, including wages, hours, benefits, and working conditions. During this process, both parties come to the table to advocate for their interests and try to find common ground. It involves significant negotiation skills and can take time, as both sides present their demands and may need to make concessions to arrive at a final agreement. Successful collective bargaining results in a collective bargaining agreement (CBA), which legally binds both the employer and the employees to the negotiated terms for a specified period. Arbitration and mediation are alternative dispute resolution methods but do not specifically address the negotiating process between unions and management. Arbitration typically involves a neutral third party making a binding decision on a dispute, while mediation focuses on facilitating communication between the parties to help them reach a voluntary agreement. Negotiation is a broader term that encompasses many types of discussions aimed at reaching an agreement but does not specifically refer to the structured negotiations typically associated with collective bargaining in labor relations.