What is 'Featherbedding'

Featherbedding is a term used to describe when a labor union requires an employer to increase labor costs, such as by hiring more workers than necessary to perform a particular task.

BREAKING DOWN 'Featherbedding'

Featherbedding is a colloquial term used to describe the practice of a labor union requiring an employer to increase labor cost to a degree greater than necessary for a particular task. This often takes the form of requiring employers to hire more workers than necessary, although it can also refer to adding time-consuming, make-work policies and procedures that increase labor costs, as well as adopting practices which slow productivity.

Featherbedding also occurs when when employees who are no longer needed are required to be retained by the union, or when unions demand that employers hire workers who are overqualified for a particular position.

Featherbedding emerged as a practice for unions to retain workers as industries developed and implemented technological advancements to increase productivity.

Because featherbedding is often portrayed in a negative light, unions typically deny the existence of the practice, but some economists claim the practice can help redistribute surplus profits from organizations to employees who would otherwise be unemployed.

Detractors claim that featherbedding promotes outdated and inefficient practices and policies, especially those made obsolete by technological efficiencies.

Featherbedding and the National Labor Relations Act

In 1935, the National Labor Relations Act (NLRA) was passed into law in order to protect the rights of both workers and employers. The NLRA encourages collective bargaining and protects workers rights by curtailing unfair labor practices in the private sector.  

Congress created the National Labor Relations Board (NLRB) in 1935 to enforce the NLRA. The NLRB is empowered to order violators of the NLRA to cease unfair labor practices, whether employers or labor unions. The NLRB may also direct offenders to provide relief to the employees or entities harmed by the wrongful actions.

In 1947, the NLRA was amended by the Taft-Hartley Act, or the Labor Management Relations Act of 1947. The Taft-Hartley Act placed restrictions on the activities of labor unions, prohibiting such tactics as jurisdictional strikes, wildcat strikes, secondary boycotts, closed shops and monetary contributions by unions to federal political campaigns.

Featherbedding is specifically addressed under Section 8(b)(6) of the Taft-Hartley Act, which reads:

Unions may not seek payment for services not performed.
Section 8(b)(6) of the Act makes it unlawful for a labor organization or its agents "to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other thing of value, in the nature of an exaction, for services which are not performed or not to be performed."

This section specifically outlaws practices causing an employer to pay for work that is not performed, or not intended to be performed, although it does not outlaw securing payment for performed services that are unnecessary. This provision has been interpreted narrowly by the Supreme Court, which ruled that the NLRA only limits situations in which a labor union exacts pay from an employer in return for services not performed or not to be performed. A union may demand payment for work that is actually done by an employee, with the employer’s consent, even if fewer employees could have done the work as well in the same amount of time.

  1. Organized Labor

    Organized labor is an association that engages in collective ...
  2. Department Of Labor (DOL)

    The Department of Labor is a cabinet-level U.S. agency responsible ...
  3. Labor Market

    The labor market refers to the supply and demand for labor in ...
  4. Employment Situation Report

    The Employment Situation report is a monthly report compiling ...
  5. Right-to-Work Law

    The right-to-work law is a fundamental law that allows workers ...
  6. Cost of Labor

    The cost of labor is the total of all employee wages plus the ...
Related Articles
  1. Personal Finance

    The History Of Unions In The United States

    Although the overall power of labor unions may not be what it once was, they still maintain a great deal of influence in the United States.
  2. Insights

    Unions: Do They Help or Hurt Workers?

    Learn the pros and cons of these organizations and how they fit into today's economy.
  3. Personal Finance

    The Top 5 Most Unionized Industries

    Unions don't have the membership numbers that they once did, but they are still a vital part of many industries. Here are the most unionized industries.
  4. Personal Finance

    Do Unions Benefit Non-Union Workers?

    Union membership is shrinking, but unions still affect non-union workers today.
  5. Insights

    The History of Labor Day

    When the first Labor Day parade was held in 1882 in New York City, the average worker put in six 10-hour days per week.
  6. Personal Finance

    America’s Labor Market: Hidden Distortions and Uncertain Forecasts

    Employment reports released by the Bureau of Labor Statistics have a profound impact on political, business, consumer, and investor behavior.
  7. Personal Finance

    Most Successful Unions

    Labor unions have existed in the U.S. for quite some time, but not all have been as successful as these three.
  8. Investing

    The Secret Sauce Fueling Netflix, Visa, Nike

    Shares of Netflix, Visa, Nike, Celgene and Citigroup are outperforming the market, here's why.
  9. Investing

    3 Ways Immigration Helps And Hurts The Economy

    Immigration can be a touchy subject, but here's the economic point of view.
  10. Financial Advisor

    How Labor Force Participation Rate Affects U.S. Unemployment

    While a falling unemployment rate sounds like a good thing, it can actually be indicative of people leaving the labor force because they can't find a job.
  1. Do minimum wage laws make labor a fixed or variable cost?

    Find out why labor is a classified as a semi-variable cost by the minimum wage laws; labor has elements of both fixed costs ... Read Answer >>
  2. How do companies balance labor supply and demand in human resources planning?

    Find out what it means for a company to balance labor supply and demand, and learn how human resources planning can strategically ... Read Answer >>
Trading Center