Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Official Strike

What it is:

Also called an official industrial action, an official strike is a work stoppage by a union.

How it works (Example):

For example, let's say that the unionized workers of Company XYZ feel that they are underpaid. They have a meeting, and a majority of the union members vote to strike. The workers cease going to work, opting instead to picket outside the company until the management meets their demands.

Why it Matters:

Official strikes are negotiating tactics with legal protections for striking workers. They are very controversial because in some cases, a strike can force the parties to negotiate more in earnest; in other cases (as with Twinkies maker Hostess Brands in 2012, for example), a strike can be the final blow and put a company (and all of its workers) out of business.