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Labor Pains

Employees focus groups may seem like a good idea, but they could land you in court.

In the 1990s workplace, business owners and their employees often sit at the same table to swap ideas and hammer out ways to improve quality and efficiency. Instead of maintaining an us/them mentality, employers try to foster teamwork through employee focus groups and involvement committees, working together to find solutions to daily business problems. The approach tends to work well. In fact, the Employment Policy Foundation, a research and education organization in Washington, DC, credits quality circles and employee involvement committees with as much as 70 percent of the productivity increase and growth in the U.S. economy in the early 1990s.

That's the good news. The bad news is the National Labor Relations Board (NLRB) deems some employee focus groups illegal employer-dominated unions. To the dismay of many human resources experts, federal courts have backed the NLRB's position. Indeed, in a 1996 case, the U.S. Supreme Court ruled that courts must defer to the NLRB's interpretation of the law in this area. Accordingly, employers who sponsor committees that cross the line into topics and strategies traditionally reserved for unions may have to answer for their actions in court--and be forced to disband their committees.

While business owners are trying to build teamwork and draw diverse managers and employees together, labor unions are generally opposed to blurring the distinction. Across the board, union leaders envision employees being dominated by their employers and losing ground gained through decades of collective bargaining. Accordingly, unions turn to the NLRB and, eventually, to the courts to enforce Section 8(a)(2) of the 1937 National Labor Relations Act (NLRA), which prohibits employer-dominated labor organizations.


Steven C. Bahls, dean of Capital University Law School in Columbus, Ohio, teaches entrepreneurship law. Freelance writer Jane Easter Bahls specializes in business and legal topics.

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This article was originally published in the December 1997 print edition of Entrepreneur with the headline: Labor Pains.

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