Work teams and unions: keeping employee involvement legal.

The nature of the American workplace has undergone a radical transformation, much of it occurring over the last decade. In the face of challenges from increasing global competition, organizations have been continuously pressured to control costs, increase productivity, and improve product and service quality. Efforts for improved organizational effectiveness have taken forms that range from corporate downsizing and massive restructuring, to the introduction of Total Quality Management and reengineering programs.

One common thread running through attempts at organizational revival has been the move to restructure conventional work systems by replacing traditional hierarchy with team based work structures. In many organizations, autonomous work teams allow employees to collectively make decisions traditionally reserved for supervisors and managers. Although many work teams are responsible for relatively simple decisions such as scheduling, maintenance, and problem solving issues, some have assumed what have traditionally been managerial functions such as employee selection, performance appraisal, and employee discipline.

Management scholars and practitioners alike attribute many advances in productivity and quality to the successful introduction of work team arrangements. One major problem for organizations, however, has been that some work team arrangements may run counter to American labor law that requires organizations to maintain an arm's length relationship with groups that negotiate over wages, hours, and working conditions. Since many work teams collectively make decisions regarding some of these aspects of the employment relationship, and since the groups have been created by management, the National Labor Relations Board (NLRB) and the courts have determined that some work teams are illegal in companies dominated labor organizations. This article explores this conflict between modern work structures and the law.

Company Dominated Unions: A Bit of Labor History

The onset of the Great Depression with its economic hardship gradually produced a social climate more accepting of the legitimacy of labor unions and collective bargaining. Changes in public attitudes were soon reflected in this country's political environment, and, ultimately, in new legislation aimed at addressing legal tactics that had frustrated union formation for a number of years.

In 1932, Congress passed the Norris-LaGuardia Act which removed several le gal barriers that companies had previously used to prevent union organizing. As union organizing efforts increased, employers began to look for new tools to discourage union activity. A particularly effective tool was to initiate employee involvement committees friendly to the interests of management. These "company dominated unions" were created because employers recognized workers' desires to exercise collective control over their employment situation. Company unions, not affiliated with the union movement and dependent on the financial support of the company, allowed this expression in a non-threatening manner and served to block the formation of legitimate unions. True collective bargaining was nonexistent because employers dominated the selection of representatives and controlled the activities of the association.

Managerial tactics continued to prevent union formation during the latter years of the depression. Congress recognized that workers acting individually were powerless to deal with management tactics, and further felt that to stimulate an economic recovery it was necessary to encourage the practice of collective bargaining and give employees the right to form and join unions. As a result the Wagner Act was passed in 1935 to give workers broad rights to form and join unions, to require bargaining on the part of employers, and to prevent companies from interfering in the formation of a union.

Aware of company-dominated unions, Congress specifically prohibited employer participation in labor unions and organizations, favoring collective bargaining by bona fide independent unions as the exclusive representative of employees, and preserving the notion that employment should be contractually based. The theory was that cooperation between industry and labor would be possible only when either side is free to contract with the other or to withdraw, and that mutual respect and industrial peace are most likely to result when employers deal with independent labor organizations.

The language of the Wagner Act made it clear that Congress intended to abolish the company-dominated union. Section 8(a)(2) of the Act provides that employers "may not dominate or interfere with the formation or administration of any labor organization, or provide financial or any other support to labor organizations." In Section 2(5), Congress defined a labor organization as "any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work." The protections in these sections were not meant to totally prevent employee representation outside of labor unions, but they were intended to prevent any form of employee representation dominated by the company. The overall objective of the Act was, there fore, cooperation between employers and employees, dealing with one another on an equal footing.

In 1947, in response to what was generally perceived to be union abuses, Congress amended the Wagner Act with the Taft-Hartley Act, outlawing a number of union practices and providing somewhat more discretion for employers in terms of their ability to actively resist unionization. Early drafts of Taft-Hartley included a proposal that would have allowed employers to form or maintain employee committees to discuss working conditions where no union existed, but the final version of the Act did not include this proposal (Martin, 1996). Laws regulating private sector labor relations in the United States, have a common assumption: an employment relationship characterized by hostility between labor and management. The U.S. labor laws were not written with cooperative workplace arrangements in mind at all, even if some room was left for some forms of these arrangements (Suntrup and Barnum, 1994).

After the Wagner Act became firmly established, relatively few charges involving company dominated unions were prosecuted. Strict enforcement of the Wagner Act and active oversight by legitimate unions served to discourage most post-Act employer attempts to dominate unions. By the 1970s, however, new work structures began to appear that were never envisioned by the framers of the Wagner Act. These work structures evolved from attempts to improve the design of jobs in order to make them more intrinsically interesting to workers and, in turn, to enhance the motivational potential of each job. Eventually, organizations began to turn to work teams or autonomous work groups in an effort to capitalize on the creative energies of their labor forces and to become more responsive to an increasingly changing and competitive global business environment.

The Evolution of the Employee Involvement Movement

There is little doubt that interest in work teams or autonomous work groups has exploded in recent years. A computerized literature search conducted by the authors revealed hundreds of recent references to work teams. The interest in work teams is understandable since they are at the heart of changing workplace structures. Many organizations have abandoned narrow job descriptions and hierarchal work structures in order to achieve greater organizational effective ness through work team arrangements. Different work teams vary in respect to who makes decisions and the level at which decisions are made, but most arrangements share a common feature: they empower employees by delegating to them some of the decisions normally made by managers in more traditional organizations. Some teams have authority to implement decisions without management approval, and the limits of their discretion are clearly defined. By contrast, cross-functional or autonomous work teams may be distinct structures in an organizational system, are largely self-managing, and may make traditionally management decisions as far-reaching as deciding on work methods, scheduling, hiring, and pay adjustments.

Changing Assumptions about Work and Workers

Management models addressing the universal challenges to improve operational efficiency demonstrate the evolution of employee and labor relations over time. More than half-a-century ago, Frederick Taylor's scientific management model focused on the one best way to do each task, explicitly moving thinking, planning and control tasks from the shop floor to the manager's office. In the name of efficiency, workers were to do what they are told and only in the manner pre scribed. Although subsequent "human relations" models of work behavior stressed that managers had to understand and be sympathetic to employees, the main objective was still compliance with authority.

Many of the traditional assumptions regarding work behavior were challenged by management scholars during the 1960s, but changes in global markets beginning in the 1970s may have provided even more impetus to question traditional methods of managing. Japanese and European imports began to capture market share and create pressures for U.S. firms to operate more efficiently in order to compete. These global competitors offered relatively short runs of differentiated products that required a broadly skilled workforce and flexible job assignment systems that permitted shifting between various tasks on short notice. As American managers sought to hold their own in this global playing field, new theories emerged with concepts like just in time systems, total quality programs, continuous improvement initiatives, and employee involvement structures drawn from experiences in countries such as Japan and Sweden. U.S. managers adopted some features and rejected others, but initiatives were more likely to be adopted outside of a union setting, and involvement programs tended to be carefully controlled by management.