Collective Bargaining and How It Works

What Is Collective Bargaining

Collective bargaining is the process in which workers, through a union they choose, negotiate a written contract with their employer covering pay, hours, benefits, and working conditions. Federal law defines it as the duty of both sides to “meet at reasonable times and confer in good faith” about those terms (29 U.S.C. 158(d)). Neither side has to agree to a proposal, but both have to bargain honestly.

The word “collective” is the point. One worker asking for a raise has little leverage; a group that negotiates together, and can agree to stop work together, has much more. That is also why the rules about who may bargain are fought over so hard. This page explains how bargaining works, who has the right and who does not, what contracts measurably change, and where the federal fight stands. The tactics employers use to stop workers from forming a union in the first place are covered in our union busting guide.

The Federal Exclusion Order and the Court

On March 27, 2025, President Trump signed Executive Order 14251. It relied on a clause in the 1978 federal labor law. That clause lets a president exclude an agency from bargaining if its “primary function” is “intelligence, counterintelligence, investigative, or national security work” (5 U.S.C. 7103(b)(1)). The order applied that label to the Departments of State, Justice, Veterans Affairs, and nearly all of Defense, Energy, and Treasury, along with the EPA, parts of Homeland Security and Health and Human Services, and more (Executive Order 14251).

The same day, the White House posted a fact sheet. The U.S. Court of Appeals for the Ninth Circuit later quoted it at length. The fact sheet said “hostile Federal unions” were impeding national security and that “certain Federal unions have declared war on President Trump’s agenda.” It added that the president “will not tolerate mass obstruction that jeopardizes his ability to manage agencies with vital national security missions” (AFGE v. Trump, 9th Cir.).

Six unions representing about 800,000 federal employees sued, arguing the order punished them for criticizing and suing the administration. A federal judge in San Francisco agreed there was “a serious question” of retaliation and blocked the order in June 2025. The Ninth Circuit disagreed. Assuming some of the fact sheet showed “a degree of retaliatory animus,” the court held that the order has “a legitimate grounding in national security concerns” and that the president “would have taken the same actions” anyway. It vacated the injunction on February 26, 2026. The opinion also observed that “it appears” the order “is the largest single effort to date to exclude agencies and subdivisions from collective bargaining on national security grounds.”

The exclusion power itself is old. Since the law passed in 1978, every president except Joe Biden has used it, according to the same opinion. Earlier orders added specific units, like five Justice Department offices in 2002; this one reached whole departments.

The exclusion power grew from a list of specific units to whole departments.

1. 1978 Federal labor law passes Most civilian federal workers gain the right to bargain, with a national security exception.
2. 1979 First exclusion order President Carter signs Executive Order 12171, the list of excluded units that later presidents amend.
3. 2002 Post-9/11 additions Executive Order 13252 adds five Justice Department units, including U.S. attorneys' offices.
4. 2025 Executive Order 14251 Whole departments are excluded, including Veterans Affairs, Justice, and most of Defense.
5. 2025 Executive Order 14343 The National Weather Service, NASA, the Patent Office and others are added in August.

Sources: 5 U.S.C. 7103(b); Executive Orders 12171 (1979), 13252 (2002), 14251 (2025) and 14343 (2025), Federal Register; AFGE v. Trump (9th Cir. 2026).

Presidential orders excluding federal units from collective bargaining: 1978: Federal labor law passes (Most civilian federal workers gain the right to bargain, with a national security exception.). 1979: First exclusion order (President Carter signs Executive Order 12171, the list of excluded units that later presidents amend.). 2002: Post-9/11 additions (Executive Order 13252 adds five Justice Department units, including U.S. attorneys' offices.). 2025: Executive Order 14251 (Whole departments are excluded, including Veterans Affairs, Justice, and most of Defense.). 2025: Executive Order 14343 (The National Weather Service, NASA, the Patent Office and others are added in August.).

1978: Congress passed the Civil Service Reform Act, which gave most civilian federal employees the right to bargain and let the president exclude national security units.

1979: President Jimmy Carter signed Executive Order 12171, the list of excluded units that later presidents amended.

2002: Executive Order 13252 added five Justice Department units, including U.S. attorneys’ offices and the Criminal Division (Executive Order 13252).

2025: Executive Order 14251 excluded whole departments in March, and Executive Order 14343 added the National Weather Service, NASA, the Patent and Trademark Office’s patents office, and others in August (Executive Order 14343).

How Bargaining Works, Step by Step

In the private sector, bargaining starts only after workers choose a union. The National Labor Relations Board, the federal agency that enforces private-sector labor law, runs the process.

From a union vote to a signed contract, in the private sector

1. 1 Start Workers file a petition At least 30% of the workers in a proposed unit sign cards or a petition asking for an election.
2. 2 Weeks The NLRB holds a vote A union that wins a majority of the votes cast is certified as the workers' representative. An employer can also recognize the union voluntarily.
3. 3 After certification The duty to bargain begins The employer must meet and bargain in good faith. Refusing is an unfair labor practice.
4. 4 Months, often more than a year Proposals and counterproposals The two sides trade offers on wages, hours, and working conditions until they reach a tentative agreement.
5. 5 End Members ratify the contract Union members vote on the deal. Once signed, neither side may change it without the other's consent.

Sources: National Labor Relations Board, Conduct Elections and Collective Bargaining Rights; 29 U.S.C. 158(d).

The slowest step is the first contract. A Bloomberg Law analysis found it takes an average of 465 days to sign one after a union wins an election, and our union busting guide explains how delay is used to wear workers down.

If talks stall completely, the law calls it an “impasse.” At that point, the NLRB says, an employer can put its own terms in place, as long as it offered them to the union first. When a contract expires, “almost all the terms of the expired contract continue while the parties bargain” (NLRB).

What a Collective Bargaining Agreement Covers

A collective bargaining agreement is the signed contract that comes out of bargaining. The law requires bargaining over “wages, hours, and other terms and conditions of employment,” so most contracts cover the same core ground:

• Pay: wage scales, raises, overtime, and shift pay.
• Hours and scheduling: how shifts are assigned and how much notice workers get.
• Benefits: health insurance, retirement plans, and paid leave.
• Seniority: how layoffs, promotions, and schedule choices are decided.
• Grievance and arbitration: a step-by-step way to challenge a firing or a broken rule, usually ending with a neutral arbitrator.
• Management rights, no-strike and no-lockout clauses, and union security: the terms that set what each side gives up during the contract.

The last group matters when a contract expires. The NLRB says union security, management rights, no-strike and no-lockout, and arbitration clauses are the exceptions to the rule that old terms keep running while a new deal is negotiated.

Who Has the Right to Bargain, and Who Does Not

Three different legal systems decide who can bargain, and millions of workers fall outside all of them.

Federal workers bargain over less than private workers. Federal pay is mostly set by law, and the federal labor statute excludes from bargaining anything “specifically provided for by Federal statute” (5 U.S.C. 7103(a)(14)). A separate law bars anyone who “participates in a strike” against the federal government from holding a federal job (5 U.S.C. 7311).

State and local workers depend entirely on their state. North Carolina declares any contract between a government employer and a union “illegal, unlawful, void and of no effect,” a ban in place since 1959 (N.C. Gen. Stat. 95-98). Virginia lets a county, city, town, or school board bargain only if it passes a local ordinance allowing it (Va. Code 40.1-57.2). Public-sector workers are still the most unionized group, at 32.9% in 2025, against 5.9% in private companies (BLS).

The biggest exclusions date to 1935. The main labor law leaves out “any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home,” along with supervisors and independent contractors (29 U.S.C. 152(3)). App-based drivers who are classified as contractors fall into that last group.

What Union Contracts Pay

Employers spend almost twice as much per hour on benefits for union workers as for non-union workers in private industry, $25.54 against $13.08 in June 2026. The largest gaps are in health insurance and retirement.

Non-union Union

1. Wages and salaries $32.41 → $37.52 (+$5.11)
2. Health and other insurance $3.25 → $8.74 (+$5.49)
3. Retirement and savings $1.27 → $5.04 (+$3.77)
4. Paid leave $3.43 → $4.73 (+$1.30)

$0$10$20$30$40

Employer cost per hour worked, private industry, non-union vs. union workers, June 2026

Group	Non-union	Union	Change
Wages and salaries	$32.41	$37.52	+$5.11
Health and other insurance	$3.25	$8.74	+$5.49
Retirement and savings	$1.27	$5.04	+$3.77
Paid leave	$3.43	$4.73	+$1.30

Source: U.S. Bureau of Labor Statistics, Employer Costs for Employee Compensation, June 2026, Table 5. Costs per hour worked for private industry workers by bargaining status. Not adjusted for industry, occupation, or experience.

The wage gap is smaller than the benefit gap. In 2025, the median union member earned $1,404 a week and the median non-union worker $1,174, about 20% more (BLS). Health insurance costs employers about 2.7 times as much per hour for union workers, and retirement about 4 times as much, by the same survey.

These are raw comparisons, and BLS says so. Its figures “do not control for many factors that can be important in explaining earnings differences.” Union jobs are concentrated in industries like utilities, transportation, and public schools, which pay differently to begin with.

Where the Fights Stand

The federal exclusion order is in effect at the agencies it covers, while one court order keeps a major contract alive at the Department of Veterans Affairs.

Where the Fight Over Federal Bargaining Stands

As of September 25, 2026

• Executive Order 14251 (VA, Justice, State, Defense and more) Agency action, in effect

  Signed March 27, 2025. Agencies were told to stop recognizing unions once their contracts ended. (source)

• Executive Order 14343 (more agencies) Agency action, in effect

  Signed August 28, 2025. Added NASA, the National Weather Service, and others. (source)

• AFGE v. Trump (Ninth Circuit) In litigation, injunction vacated

  The court vacated the injunction on February 26, 2026, and on June 17 amended its opinion and barred rehearing. The case returns to the trial court. (source)

• NTEU v. Trump (D.C. Circuit) In litigation, injunction stayed

  The appeals court paused the trial judge's injunction on May 16, 2025, and set argument for December 2025. The trial court stayed its case on January 9, 2026, and no appeals decision was found as of October 6, 2026. (source)

• Veterans Affairs contract with AFGE Blocked by a court, contract restored

  The VA ended its master contract on August 6, 2025. A court ordered it restored, and FedSmith reported on May 20, 2026 that the First Circuit refused to pause that order. (source)

• Protect America's Workforce Act (H.R. 2550) Proposal, passed the House

  Passed the House 231 to 195 on December 11, 2025, after a discharge petition. Received in the Senate December 15, with no Senate action recorded. (source)

Source: Federal Register; U.S. Court of Appeals for the Ninth Circuit; Civil Rights Litigation Clearinghouse; FedSmith; govinfo

The Ninth Circuit ruled only that the unions were unlikely to win their retaliation claim. It did not decide whether the president exceeded his power under the 1978 law, a separate claim still in the trial court. The court also held that federal district courts, not only the Federal Labor Relations Authority, can hear these challenges.

If You Want to Bargain

What to do, by situation

Open the one closest to yours. This is general information, not legal advice.

I work for a private company and want a union

1. Talk with co-workers first. The law protects workers who discuss pay and conditions together, even without a union.
2. Contact a union that represents workers in your field, or your nearest NLRB regional office, about filing a petition.
3. An election needs signatures from at least 30% of the workers in the group. The union wins with a majority of the votes cast.

The National Labor Relations Act makes it illegal for an employer to fire, discipline, or threaten workers for "protected concerted" activity.

I am a federal worker at an excluded agency

1. Ask your union whether your unit's contract is still in force. Some contracts, like the one at Veterans Affairs, were restored by a court.
2. Keep records of any grievance or disciplinary action, with dates, in case bargaining rights are restored.
3. Other protections still apply. Most federal employees can still appeal a firing or suspension to the Merit Systems Protection Board.

The executive orders removed bargaining rights, but civil service appeal rights come from separate laws.

Our contract expired and talks are stalled

1. Know that most terms of the old contract keep running while bargaining continues.
2. If the employer changes terms without bargaining first, a union can file an unfair labor practice charge with the NLRB.

An employer may impose terms only after a true impasse, and only terms it already offered the union.

I am a farmworker, domestic worker, or independent contractor

1. Check your state's law. Some states protect farmworkers' right to organize even though federal law does not.
2. If you think you are misclassified as a contractor, ask a workers' center or legal aid office. Employees get protections that contractors do not.

The National Labor Relations Act excludes these workers, so their rights come from state law or from how they are classified.

The Honest Disagreement

The administration’s case is that bargaining slows agencies down. As the Ninth Circuit summarized the fact sheet, federal contracts let unions “obstruct agency management.” They made it hard to remove employees for “poor performance or misconduct.” In the fact sheet’s words, that conflicted with “a responsive and accountable civil service to protect our national security.” Guidance from the Office of Personnel Management said contracts “often create procedural impediments to separating poor performers.” The Ninth Circuit found that reasoning a “legitimate grounding” for the order.

The unions’ case is that the order punished speech. They pointed to the fact sheet’s own words about unions that “declared war” on the president. They also pointed to how the order treated different groups. It kept bargaining for most police and firefighters at excluded agencies, but not for Bureau of Prisons staff, whom the plaintiff union represents. The trial judge found that raised “a serious question” of retaliation. The appeals court said it would not “infer the most jaundiced, retaliatory account” without more evidence, and left the unions’ separate claim, that the order stretched the national security exception past what Congress allowed, for the trial court.

On bargaining in general, the evidence cuts in both directions. Union contracts are linked to higher pay and much higher benefit spending, as BLS data shows. Employers and some economists argue that the same costs, and rules like seniority, make it harder to hire, fire, and adapt, which is why the fight over coverage is so intense.

What the Numbers Leave Out

• The pay gaps are not controlled comparisons. BLS compares all union and non-union workers, who work in different industries and jobs.
• Employer cost is not take-home pay. The benefit figures measure what employers spend per hour, not what workers receive in cash.
• 2025 federal counts may lag the orders. BLS counts workers who report being covered by a contract, and its 2025 figures are 11-month averages because the October 2025 survey was not collected during the shutdown.
• Coverage is not the same as membership. In 2025, 1.8 million workers were covered by a union contract without being members.

Frequently Asked Questions

What is collective bargaining in simple terms?

It is a group of workers negotiating together, through a union, for a contract that sets their pay and working conditions, instead of each person negotiating alone.

Can you collectively bargain without a union?

Formal bargaining requires a representative the workers choose, usually a union. But private-sector workers without a union still have a legal right to act together, for example by discussing pay or signing a petition to their employer, and the NLRB says an employer cannot punish them for it.

Is collective bargaining good or bad?

It depends on what you measure. Union workers earn more and get far more in benefits, by BLS data, though BLS says its comparisons do not control for many factors that can explain the gaps. Most Americans approve of unions: Gallup found 71% in 2026.

Can federal employees strike?

No. Federal law bars anyone who participates in a strike against the federal government from holding a federal job, whether or not their agency still bargains.

What topics does an employer have to bargain over?

Wages, hours, and other terms and conditions of employment are mandatory subjects, so an employer must bargain over them in good faith. In NLRB v. Borg-Warner (1958), the Supreme Court held that either side may raise other topics, but insisting on one as the price of a contract is an unfair labor practice.

What are the four types of collective bargaining?

One common answer comes from labor scholars Richard Walton and Robert McKersie, whose 1965 book A Behavioral Theory of Labor Negotiations modeled four parts of a negotiation: distributive bargaining, integrative bargaining, attitudinal structuring, which shapes the relationship between the sides, and intraorganizational bargaining, which settles conflict inside each side.

What You Can Do

1. If you work in the private sector, talk with co-workers about pay and conditions. That conversation is legally protected, union or not.
2. If you are a federal worker, ask your union where your unit’s contract stands, since court orders and agency decisions differ.
3. Learn how employers fight organizing in our union busting guide, and check whether your state is one of the right-to-work states.
4. Ask your senators to pass the Protect America’s Workforce Act, H.R. 2550, which passed the House in December 2025. Use the letter below.