Work teams and unions: keeping employee involvement legal.

However, the Dunlop Commission found that between one-fifth and one-third of workers are involved in some form of employee participation effort with about 30,000 of these workplace systems already in existence in the United States. Their studies indicate that most American workers still want more input into decision making, desire even more labor-management partnerships, and that employee involvement programs are flourishing despite legal obstacles (Suntrup and Barnum, 1994). Companies continue to develop employee involvement plans even when the specter of an unfair labor practice exists because unless union organizers take an interest in a company's employee involvement program, it is unlikely to attract the attention of the NLRB. Indeed, searches reveal fewer than 60 cases from 1972 to 1993 in which the NLRB had disestablished an employee involvement committee. Also, even if a program is the target of a union complaint, the penalty is not normally severe, usually only an order to abolish the program and a requirement to post a statement of employee rights to be upheld under the Wagner Act (Dalton, 1996).

Defining "Labor Organization" and "Dealing With"

Establishing the legality of employee involvement programs is not always easy, but NLRB and court decisions have provided a two-part guide. The NLRB must first determine whether the employee involvement program is a "labor organization" as defined by the NLRA. Section 2(5) of the NLRA provides the criteria for a labor organization. It provides that "any organization of any kind" is a labor organization if:

1. Employees participate;

2. The organization is "dealing with" the employer; and

3. These dealings concern conditions of work, grievances, labor disputes, wages, rates of pay, or hours of employment. Various case decisions add a fourth item in this determination:

4. Does the committee operate in a representational capacity for their employees?

The label "employee involvement group" assures that the first criterion is met--employees do participate. The remaining distinction between an employee involvement groups and a labor organization must rely on answers to the remaining criteria: is the organization dealing with the employer, and, if so, what are the subject matters of the dealings? The case of Electromation, sets the foundation.

In 1988, Electromation, an Indiana electrical component manufacturing company, unilaterally proposed to cut an attendance bonus and eliminate wage increases in order to reduce increasing financial losses. Employee complaints and an employee petition led management to organize five action committees of employees and managers to help reduce losses. Employees were invited to sign up, and then management posted the lists of members of each committee to allow all employees the opportunity to discuss concerns with committee members. The company paid committee members for their time working with the committee and supplied all necessary materials.

About one month after the committees were formed, a union requested recognition from Electromation. In response to the union's demand, the Electromation president stopped company participation in the committees, stating that committees could continue to meet on their own if they liked. No committee proposals were ever implemented: the union lost the election and filed unfair labor practice charges against Electromation.

The administrative law judge ruled that the action committees constituted an employer-dominated labor organization. Additionally, the NLRB found that the company had set up "a bilateral process involving employees and management to reach bilateral solutions on the basis of employee initiated proposals." The NLRB felt the committees were "dealing with the employer" on "conditions of employment" like employee absenteeism and remuneration via bonuses or other monetary incentives. The NLRB also noted that Electromation pitted the committees against the union that was trying to organize employees when it suspended, but did not disband, the commit tees during an organizing campaign. Finally, the Board held that the Action Committees were designed to allow employees to act on behalf of other employees.

Despite the Board's unanimous decisions in the Electromation case, three Board members wrote separate concurring opinions to emphasize the fact that employee committees could be found lawful under different factual settings. One member indicated that if the committee had not acted in a representative capacity, the committee would have been out side the legal definition of labor organization. The same would be true if it had simply provided ideas or suggestions to the employer. Another member noted that this case did not present a "quality circle" approach or "represent the type of program which gives emphasis on effective employer/employee communication." This particular Board member would have allowed committees established for "the purpose of fostering better communication over such matters as 'productivity and efficiency problems in the workplace'."

The Seventh Circuit affirmed the NLRB's Electromation decision. The court clearly recognized the growing importance of employee involvement organizations, applauding employer efforts to improve the workplace. The court encouraged the use of legitimate company sponsored employee involvement programs that are independent, do not function in a representational capacity, and focus on productivity, efficiency, and quality control. The court upheld the Board's determination in the case of Electromation's action committees because only independent labor organizations may deal with an employer in a bilateral condition regarding working conditions.

Similar to Electromation, was a case involving DuPont. In 1984, a TQM program called a "personal effectiveness program" (PEP) was implemented at DuPont's Deepwater plants to encourage decision making through consensus. The groups were formed to regularly meet to discuss various safety issues, and included both managers and employees as members. Problems started when the union tried to get a new shop for a welder whose shop was unsafe. The company refused, but eventually consented when the safety committee made the same recommendation. Later, when the union tried to bargain for a fitness facility at the plant, and the company again refused the request. Subsequently a fitness committee was formed, which recommended and received funding for a jogging track, volleyball court, a horseshoe pit, and a picnic area with bathrooms. Essentially, the fitness committee was able to gain employee benefits that the union was refused the opportunity to bargain over. The union, seeing a pattern developing, filed an unfair labor practice charge against DuPont.

In June of 1993, the NLRB determined that the DuPont committees were labor organizations as defined under the NLRA, and were "dealing with" the company, by making proposals to management to which management responded. The NLRB, in both the Electromation and DuPont decisions, established a broader definition of the Section 2(5) concept of "dealing with" as compared to bargaining. While bargaining requires the two parties to seek to comprise their differences and arrive at an agreement, "dealing with" involves only a "bilateral mechanism" between two parties in which a group of employees make proposals to management, and management responds to these proposals by acceptance or rejection by word or deed, and compromise is not required.

In DuPont, both the safety and fitness committees were designed to discuss issues with their fellow employees and make proposals to management on their behalf, which management would make a response. The Board determined from these facts that the safety and fitness committees had moved well beyond the legal limits of the NLRA. The Board found that the action committees went beyond mere cooperation to improve quality or efficiency and sought to unilaterally create in employees the impression that their disagreements with management could be resolved bilaterally. The Board held that the establishment of the action committees in response to employee discontent and the imposition of a committee mechanism that included employees instructed to represent fellow employees violated Section 8(a)(2).

In DuPont, the NLRB specifically declared three "safe havens" for employee participation under the NLRA:

1. If the groups were merely brainstorming "a whole host of ideas" (as opposed to proposals), there would be no dealing.

2. Committees that merely gave management information without making proposals would also not be engaged in dealing.

3. A committee that has the power to make decisions without making proposals and without management vote or with minority management voting, would not be considering dealing.

The Board ruling in DuPont seemed to say, in essence, that to be legal under the Act, committees must have no power or be fully empowered. Their decision echoed court decisions handed down years earlier in Cabot Carbon in which the Supreme Court distinguished "dealing with" from "bargaining" also noting that "bargaining" is a more limiting term than "dealing with." The Cabot Carbon decision was used to emphasize the following:

1. Employer communication with employees, even concerning working conditions, does not necessarily mean that the employer is "dealing with" its employees.

2. There must exist a pattern or practice of employee proposals and correlative employer responses over time before an employer may be deemed as "dealing";

3. Isolated instance of employee proposals and employer responses do not lead to "dealing"; and