Translating European Labor Relations Practices to the United States Through Global Framework Agreements? German and Swedish Multinationals Compared

Abstract

Extensive research has shown that European multinational enterprises (MNEs) have a propensity to avoid collective employee representation when going abroad. This study investigates whether Global Framework Agreements (GFAs) can reverse this pattern by comparing how four European MNEs—two from Germany and two from Sweden—implement GFAs in the United States, a country with weak collective representation rights. The authors find that an MNE’s home country labor relations (LR) system mediates whether GFAs support collective representation in the United States. Sweden’s monistic LR system, in which unions are the dominant organizations legally representing workers, gives unions the power to directly influence the negotiation and implementation of GFAs. By contrast, Germany’s dualistic LR system, in which unions and works councils share worker representation, weakens the influence of unions on implementing the GFA. MNEs’ home country LR systems thus influence how transnational instruments are used to improve collective representation in host countries.