A labor union is an organization that represents employees in collective bargaining with the employer over wages, benefits, and working conditions. Labor relations are the interactions between management and unionized employees. Labor relations are also called union–management relations and industrial relations.

Union membership has been steadily declining in the United States for several decades. It is currently stagnated at around 11%. The National Labor Relations Act established the National Labor Relations Board (NLRB), which oversees labor relations by conducting union elections, hearing unfair labor practice complaints, and issuing injunctions on offending employers. Collective bargaining is the negotiation process resulting in a contract between employees and management that covers employment conditions.

The most common employment conditions covered in contracts are compensation, hours, and working conditions, but a contract can include any condition that both sides agree to. To avoid a strike or a lockout and to handle grievances by either side, collective bargainers sometimes agree to use neutral third parties, called mediators.

A mediator is a neutral party that helps management and labor settle their disagreements. In cases in which management and employees are not willing to compromise but do not want to call a strike or a lockout, they may call in an arbitrator. An arbitrator is different from a mediator in that the arbitrator makes a binding decision, one to which management and labor must adhere. The services of an arbitrator are more commonly used to settle employee grievances.