In the book Labor Relations: Striking a Balance by John W. Budd; Chapter 11: Globalization - Talk about the existing U.S. labor relations system developed in an environment when the U.S. and U.S....

In the book Labor Relations: Striking a Balance by John W. Budd; Chapter 11: Globalization - Talk about the existing U.S. labor relations system developed in an environment when the U.S. and U.S. companies dominated world markets. 

Now in Chapter 11: The Study Case; “Labor Law Discussion Case 10: Do Threats in Mexico Violate U.S. Labor Law?” Talks about the tension existing between the existing U.S. labor relations system and the demands and realities of business operating in a global environment.

 Answer the Fallowing:

  • How Acosta’s actions violated the National Labor Relations Act (NLRA).
  • Did you think Acosta ‘Did Acosta ‘a actions Violated American Labor Law (the NLRA).
  • Did Acosta’s actions violate any human right standards? If so, should there be any consequences or remedies for this violation?  

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kipling2448 | (Level 3) Educator Emeritus

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As a general rule, and with minimal exceptions, U.S. labor laws do not apply to business operations in foreign countries.  That is one of the reasons many labor activists demand that trade agreements between the United States and other countries include provisions requiring the other country to abide by International Labor Organization standards.  Absent such provisions, American companies are more free to set up business operations in less-developed countries where labor protections are minimal or nonexistent, with lower operating costs part of the attraction.  In the case of Mexico, however, the situation becomes considerably more complex due to its geographic proximity to the United States and the porous nature of the common border separating the two countries.  Factories, known as maquiladoras, operating just across the U.S.-Mexico border, are routinely used by American manufacturers to lower production costs by exploiting the far lower standard of living in Mexico and the endemic political corruption that has severely weakened that nation’s otherwise large labor unions.  In addition, business operations along the U.S.-Mexico border often taken advantage of the unique characteristics of each country, with offices in El Paso, for instance, that interact with manufacturing operations in nearby Ciudad Juarez, Mexico, thereby providing the protections of U.S. laws for the corporation while labor practices are carried out south of the border where standards tend to be lower.

In the specific case of Acosta, the general counsel of the National Labor Relations Board was able to intervene precisely because the discharged drivers were based in the U.S. city of El Paso, rather than a few miles south in Mexico. 

Acosta may very well have violated American labor laws if he did, in fact, fire drivers in retaliation for the latters’ efforts at organizing workers within the context of unionization activities.  The right to collective bargaining is a bedrock of American labor laws, and forms the basis of the mission of the National Labor Relations Board.  Furthermore, the International Labor Organization, established in 1919 and later folded into the United Nations organizational structure, expressly demands the right of laborers in all countries to form unions and engage in collective bargaining.  As such, it is fair to say that human rights standards, as well as labor laws, were violated.  As far as the question of penalties, violations of laws carry penalties.  With respect to penalties for violating human rights, the main recourses involve boycotts and divestiture campaign, as well as efforts by state governments to prohibit official business with the company in question and, possibly, with the foreign country involved should that be deemed appropriate.

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