[Senate Report 105-12]
[From the U.S. Government Publishing Office]
Calendar No. 33
105th Congress Report
SENATE
1st Session 105-12
_______________________________________________________________________
TEAMWORK FOR EMPLOYEES AND MANAGERS ACT OF 1997
_______
April 2, 1997.--Ordered to be printed
Filed under the authority of the order of the Senate on March 27, 1997
Mr. Jeffords, from the Committee on Labor and Human Resources,
submitted the following
R E P O R T
together with
MINORITY AND ADDITIONAL VIEWS
[To accompany S. 295]
The Committee on Labor and Human Resources, to which was
referred the bill (S. 295) to amend the National Labor
Relations Act to allow labor management cooperative efforts
that improve economic competitiveness in the United States to
continue to thrive, and for other purposes, having considered
the same, reports favorably thereon and recommends that the
bill do pass.
C O N T E N T S
I. Introduction.....................................................1
II. Purpose and summary..............................................3
III. Background and need for legislation..............................3
IV. Legislative history and committee action........................18
V. Explanation of bill and committee views.........................21
VI. Cost estimate...................................................25
VII. Regulatory impact statement.....................................25
VIII.Application of law to legislative branch........................26
IX. Section-by-section analysis.....................................26
X. Minority and additional views...................................27
XI. Changes in existing law.........................................55
I. Introduction
In his State of the Union address in 1996, President
Clinton told the country: ``When companies and workers work as
a team, they do better. And so does America.'' Unfortunately,
our Federal labor law actually prohibits many forms of worker-
management teamwork.
The Teamwork for Employees and Management (TEAM) Act, S.
295, will promote greater employee involvement by removing the
barriers created by Federal labor law. These barriers, largely
found in section 8(a)(2) of the National Labor Relations Act
(NLRA), were originally targeted at ``company'' unions but
actually sweep much broader to ban many cooperative labor-
management efforts.
This legislation, S. 295, signals a new era in employee
relations. The bill recognizes, as President Clinton did in his
national address, that the best workplaces for employees and
the most productive workplaces for employers are ones where
labor and management work together.
The Senate has focused several of its legislative efforts
on decentralizing decision making. In the employment arena,
employee involvement increases local decision making and
provides employees with a voice in how to structure the
workplace. In workplaces where employee involvement programs
have been implemented, employees are empowered to play a role
in reaching decisions on many aspects of their employment.
As this Nation enters the 21st century, the committee
believes it important that U.S. workplace policies reflect a
new era of labor-management relations--one that fosters
cooperation, not confrontation. Employees want to work with
their employers to make their workplaces both more productive
and more enjoyable.
A recent study of employees' views in this area indicates
that a majority of workers want a voice in their workplace.
They also believe that their contribution would be effective
only if management cooperates. When asked to choose between two
types of organizations to represent them, workers chose, by a
3-to-1 margin, one that would have no power but would have
management cooperation over one with power but without
management cooperation.\1\ Employee involvement gives workers
the best of both worlds by offering both empowerment and
cooperation.
---------------------------------------------------------------------------
\1\ Worker Representation and Participation Survey, Richard B.
Freeman and Joel Rogers, Conducted by Princeton Survey Research
Associates, December 1994.
---------------------------------------------------------------------------
The legality of employee involvement and labor-management
cooperative efforts must be clarified. These human resource
programs move domestic industry toward the high performance
workplaces necessary to compete in the increasingly competitive
global economy. The broaddefinition in the NLRA were written
for a different era of employer-employee relations and no longer make
sense in today's workplace.
The hierarchical model of the work force of the early 20th
century, where each employee's and supervisor's job tasks were
compartmentalized and performed in isolation, is not effective
in the current globally competitive marketplace. Federal labor
law must evolve to adjust to the modern reality of overlapping
responsibilities and each employee having a sense of the whole
production process. The TEAM Act accomplishes this evolution.
For these reasons, the committee fully supports its enactment.
II. Purpose and Summary
The purpose of S. 295, the Teamwork for Employees and
Managers (TEAM) Act of 1997, is to amend the National Labor
Relations Act (NLRA) to protect legitimate employee involvement
programs against governmental interference, to preserve
existing protections against coercive employer practices, and
to allow legitimate employee involvement programs, in which
workers may discuss issues involving terms and conditions of
employment, to continue to evolve and proliferate.
The TEAM Act would clarify the legality of employee
involvement programs by adding a proviso to section 8(a)(2) of
the NLRA clarifying that an employer may establish, assist,
maintain, or participate in any organization or entity of any
kind, in which employees participate to at least the same
extent practicable as representatives of management
participate, to address matters of mutual interest--including,
among others, issues of quality, productivity, efficiency, and
safety and health.
The bill also specifies that such organizations may not
have, claim, or seek authority to enter into or negotiate
collective bargaining agreements or to amend existing
collective bargaining agreements, nor may they claim or seek
authority to act as the exclusive bargaining agent of
employees. Senate bill 295 specifies that the proviso does not
apply in a case in which a labor organization is the
representative of such employees, and S. 295 further provides
that the priviso does not affect other protections within the
NLRA, thereby ensuring that employee involvement cannot be used
as a means to avoid collective bargaining obligations. The
amendment to section 8(a)(2) contained in the bill is designed
to provide a safe harbor for cooperative labor-management
efforts without weakening workers' ability to select
independent union representation.
III. Background and Need for Legislation
In the wake of the Industrial Revolution, American business
operated under the time-honored principle of the division of
labor. This theory was based on the belief that ``when a
workman spends every day on the same detail, the finished
article is produced more easily, quickly, and economically.''
\2\ Indeed, for most of this century, the accepted American
method of human resource management--named ``Taylorism'' after
Frederick Taylor, a turn-of-the-century engineer and inventor--
has been top-down decision making aimed at minimizing ``brain
work'' at the shop-floor level. Employees simply did as they
were told by their supervisors, who also operated within
confined parameters set by their superiors.
---------------------------------------------------------------------------
\2\ Alexis De Tocqueville, Democracy in America 555 (George
Lawrence trans., Harper & Row 1988) (1848) (quoted in Michael L.
Stokes, Note, Quality Circles or Company Unions? A look at Employee
Involvement After Electromation and Dupont, 55 Ohio St. L.J. 897, 901
(1994)).
---------------------------------------------------------------------------
Decades ago, when market forces were relatively static with
the United States in the dominant position, Taylorism ensured
the continuity and conformity necessary for American companies
to maintain their economic supremacy. The past 20 years,
however, have witnessed a dramatic transformation in the
fundamental nature of labor-management relations. This
transformation is due primarily to foreign competition, rapid
technological change, and other factors which have provided
strong incentives for altering workplace relationships.
By the late 1970s, managers began to view employees as a
source of ideas for ``developing and applying new technology''
and ``improving existing methods and approaches to remain
competitive.'' \3\ Rather than organizing workers to perform a
single task, as had been the practice under division of labor,
companies began instituting programs to involve employees more
broadly in solving problems and making decisions which once
were exclusively within the realm of management.\4\
---------------------------------------------------------------------------
\3\ Neil DeKoker, Labor-Management Relations for Survival, in
Industrial Rel. Res. Ass'n Proc. of the 1985 Spring Meeting 576, 576
(Barbara D. Dennis ed., 1985) (quoted in Stokes, supra note 2, at 902).
\4\ Stokes, supra note 2, at 903.
---------------------------------------------------------------------------
These programs, implemented in both union and nonunion
workplaces, included quality circles, quality of work-life
projects, and total quality management programs. By involving
workers to varying degrees in most aspects of production, these
programs frequently resulted in substantial productivity gains,
as well as increased employee satisfaction.
forms of employee involvement
Employee involvement comes in many forms. It is not a set
``program,'' and therefore, it defies easy definition. Rather,
employees involvement is a means by which work is organized
within a company and, as such, a way for employees and
employers to relate to one another within an organization.
Because of this, there is no single dominant form of
employee involvement. It usually includes some structured
method for addressing workplace issues through discussions
between employees and employer representatives. Indeed, two out
of every three employee involvement structures do not even have
a manual of procedure, thereby allowing the participants to
design their structure to meet their changing needs.\1\
---------------------------------------------------------------------------
\5\ See Edward E. Lawler III, Gerald E. Ledford, & Susan A.
Morhman, Employee Involvement in America: A Study of Contemporary
Practice (American Productivity & Quality Center: Houston, TX), at 33
(1989).
---------------------------------------------------------------------------
Although employee involvement programs come in infinite
varieties, for discussion purposes they can be classified in
general terms into several categories. Five of the most common
forms of employee involvement include:
Joint labor-management committees
In union settings, joint labor-management committees
provide union and management leaders with a forum for ongoing
discussion and cooperation outside the collective bargaining
context. In nonunion settings, the committees are composed of
employees (elected or volunteered) in addition to management
officials.\6\ While some of these committees have a special
focus, most are designed to address multiple issues at the
department or plant level and often serve as an umbrella under
which small employee involvement efforts operate.\7\
---------------------------------------------------------------------------
\6\ Edward E. Potter, Quality at Risk: Are Employee Participation
Programs in Jeopardy? (Employment Policy Foundation: Washington, D.C.),
at 19 (1991).
\7\ Congress has established a grant program, currently funded at
$1.5 million, to help selected labor-management committees carry out
joint programs. This program is administered by the Federal Mediation
and Conciliation Service.
---------------------------------------------------------------------------
Quality circles
Quality circles are small groups of employees that meet
regularly on company time with the goal of improving quality
and productivity within their own work areas. They typically
are comprised of hourly employees and supervisors who receive
special training in problem-solving techniques. Although
quality circles usually lack authority to implement solutions
without management approval, they provide workers with an
invaluable opportunity to influence the manner in which their
products are manufactured and designed.\8\
---------------------------------------------------------------------------
\8\ Potter, supra, note 6, at 21. Martin T. Moe, Note,
Participatory Workplace Decision making and the NLRA: Section 8(a)(2),
Electromation, and the Specter of the Company Union, 68 N.Y.U.L.Rev.
1127, 1158 (1993).
---------------------------------------------------------------------------
Quality of work-life programs
Quality of Work-Life (QWL) programs are also designed to
improve productivity but focus primarily on improving worker
satisfaction. Unlike quality circles, which focus directly on
product improvement, QWL programs are premised on the belief
that making workers' jobs more meaningful will lead to gains in
productivity. Techniques employed by QWL programs are intended
to bring about fundamental changes in the relations between
workers and managers and can include changing the decision-
making, communications, and training dimensions within an
organization. Joint labor-management committees are frequently
used to coordinate and monitor QWL programs.\9\
---------------------------------------------------------------------------
\9\ Moe, supra note 8, at 1158-59.
---------------------------------------------------------------------------
Self-directed work teams
Self-directed work teams are groups of employees who are
given control of some well-defined segment of production. Such
teams are often responsible for their own support services and
personnel decisions in addition to determining task assignments
and production methods.\10\
---------------------------------------------------------------------------
\10\ Ibid.
---------------------------------------------------------------------------
Gainsharing
Gainsharing is the generic term used for a variety of
programs intended to address the problem of loss of sales and
jobs caused by declining productivity. A common feature of
these programs is the payment of bonuses to employees when
productivity is increased. Gainsharing programs are often
developed and administered by joint labor-management
committees, which also serve as clearinghouses for employee
suggestions for improving productivity.\11\
---------------------------------------------------------------------------
\11\ Moe, supra note 8, at 1160.
---------------------------------------------------------------------------
Again, the examples discussed above are intended to provide
illustrations of the various ways in which employee involvement
has been utilized in today's modern workplace. Many other forms
are successfully utilized by both small and large employers.
More important to this discussion, however, is the fact
that employee involvement, regardless of its form, seeks as its
fundamental goal to unlock the productive capabilities of
American workers. And, while it may be argued that some
similarities exist between modern employee involvement and the
employer-dominated company unions of the 1930s, today's
programs differ dramatically in intention, form, and effect
from the organizations the National Labor Relations Act sought
to abolish. Indeed, today's employee involvement programs
``seek to engender labor-management cooperation and improve
worker productivity and morale bygranting employees greater
involvement in the issues that most affect their work lives.'' \12\
---------------------------------------------------------------------------
\12\ Ibid.
---------------------------------------------------------------------------
employee involvement enjoys broad support
Employees, employers, academics, and policy makers
increasingly are extolling the virtues of employee involvement
programs, notwithstanding the contentions of opponents of the
TEAM Act.
Robert Von Bruns, Melinda Weide, and Michael Scarano, team
members at IBM's Essex Junction, Vermont facility, discussed
the benefits of employee empowerment in their testimony before
the Senate Committee on Labor and Human Resources. The three
employees observed that, compared to other shifts running the
same tools, their team's production figures were the highest
about 85% of the time.\13\ Explaining this success, the IBM
employees noted:
---------------------------------------------------------------------------
\13\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 15 (Feb. 12, 1997) (statement of Melinda Weide, Michael
Scarano, and Robert Von Bruns, IBM Team Members).
We are effective and productive because the teams are
empowered to make informed educated business decisions.
A key element to the success of our teams is the
principle of ``Shared leadership.'' Every team member
has the opportunity and is encouraged to take a
leadership role with various tasks. For example, team
members take turns in reporting at status and update
meetings, acting as meeting facilitator and taking on
new projects.
Our presence here today is an example of the team
process at work. We were selected by our peers, fellow
teammates, to bring the [team] story before this panel.
Our present and continued success depends on
teamwork.\14\
---------------------------------------------------------------------------
\14\ Ibid.
When asked what would happen if, because of the current
state of the law, the IBM teams would have to be disbanded, Mr.
---------------------------------------------------------------------------
Von Bruns responded.
[I]t would be like going back to the Middle Ages in
the work force. We no longer would have the input that
we do now; those of us who are on the floor, closest to
the work, understand most quickly and are able to
respond quickest to any changes that are needed. Also,
the ownership that is part and parcel of teams would be
gone.\15\
\15\ Id. At 22.
---------------------------------------------------------------------------
Ms. Melinda Weide, Mr. Von Bruns' colleague at the Essex
Junction, Vermont facility, expanded on the values of employee
participation:
When I was hired, I was given the opportunity to
become a team member . . . and I accepted that
possibility. I was a bit skeptical because I had been
on other teams, but never in the business work force.
And to see it interact on this level is just wonderful.
You can accomplish so much more. You do not have to
wait for the answer to come from someone higher up.
When they are not involved, and they do not have all
the information, it would take them time to get the
information that you already have. So to be able to
have that power and make those decisions, it makes a
big difference in the kind of product that we are able
to put out.\16\
---------------------------------------------------------------------------
\16\ Id. At 26.
Ms. Weide opined on the need for, and effect of, passage of
---------------------------------------------------------------------------
the TEAM Act:
The teams would like the freedom to make the choices
themselves, to make the working environment a better
place. And a lot of times, our hands are tied. I think
if the TEAM Act would pass, the teams would be much
better, and you would see more of them. You would see
the productivity everywhere pick up because people
would go to work, they would enjoy going to work, they
would have that pride, because they know that they are
able to make a difference in the product they are
putting out and have a choice in what they are doing,
instead of having someone else tell them.\17\
---------------------------------------------------------------------------
\17\ Id. At 31.
Managers have voiced similarly enthusiastic support for
employee involvement. In fact, William D. Budinger, Chairman
and C.E.O. of Rodel, Inc., attributed the very survival of his
company to the institution of teamwork and collaborative
decision making.\18\
---------------------------------------------------------------------------
\18\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 9 (Feb. 12, 1997) (statement of William D. Budinger,
Chairman and C.E.O., Rodel, Inc., Newark, Delaware).
It was clear to us that if we were going to survive,
we would have to learn how to be better than our
foreign competitors. . . . Teamwork and collaborative
decision making have allowed us to achieve something
thatis generally thought to be impossible for a small
American company--we can successfully compete in foreign markets . . .
Teamwork is, I believe, the reason that our company has been so
successful competing overseas. It is American teamwork that has made
even the quality-obsessed Japanese electronics companies choose our
materials over their locally-made options.\19\
---------------------------------------------------------------------------
\19\ Ibid.
Similarly, J. Thomas Bouchard, IBM Senior Vice President,
Human Resources, informed the committee that ``[t]eamwork is so
important to IBM's competitiveness that it is, in fact, one of
the three major ways that we measure our success--every single
IBMer is involved in teaming, and rewarded on how they support
teamwork and their teammates.'' \20\ Given this glowing
endorsement of teamwork, Mr. Bouchard understandably expressed
grave concern that employee involvement programs were under
siege.
---------------------------------------------------------------------------
\20\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 16 (Feb. 12, 1997) (statement of J. Thomas Bouchard,
Senior Vice President, Human Resources, International Business Machines
Corp.).
[A]s a direct result of recent National Labor
Relations Board decisions on teams and employee
involvement plans, we have reviewed a number of IBM
ideas on teamwork and have had to impose restrictions
on teams in order not to run afoul of the law--even
though those teams made good business and common sense.
The argument that the current state of labor law does
not result in a chilling effect on teamwork in U.S.
companies is wrong.\21\
---------------------------------------------------------------------------
\21\ Ibid.
Former National Labor Relations Board Member Charles I.
Cohen iterated similar concerns, in his testimony before the
---------------------------------------------------------------------------
Committee.
I strongly endorse the Team Act as the ``Bridge to
the 21st Century'' for America's companies and
America's jobs. Without the flexibility the TEAM Act
provides, many of America's companies--and with them
many of America's best-paying jobs--will not prosper as
we move into the next century. The TEAM Act should
become law because it will support America's companies
in the intensely competitive global economy in which we
find ourselves and keep important jobs from being swept
away by foreign competition.\22\
---------------------------------------------------------------------------
\22\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 59 (Feb. 12, 1997) (statement of Charles I. Cohen,
Partner, Morgan, Lewis & Bockius).
Mr. Cohen, relying on his experience as a practicing labor
lawyer and former NLRB Member, went on to state that, ``. . .
current law does not provide for a wide variety of cooperative
workplace efforts. It is my conclusion that, having tried to
square meaningful employee participation committees with the
current law, it simply cannot be done.'' \23\
---------------------------------------------------------------------------
\23\ Ibid.
---------------------------------------------------------------------------
In testimony before the committee, law Professor Samuel
Estreicher discussed the approach of current NLRA sec. 8(a)(2),
whose broad prohibitions against any employer support of
employee groups he believes to be unique among major Western
industrialized countries.\24\
---------------------------------------------------------------------------
\24\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 107 (Feb. 12, 1997) (testimony of Samuel Estreicher,
Professor of Law, New York University).
[F]or several decades, American companies were able
to live with this broader prohibition. The reason for
that was that the model of worker-management relations
envisioned by 8(a)(2) also dovetailed with the way
American managers organized their work force. In a
world in which workers park their brains outside the
factory gate, and brainwork, in the words of Frederick
W. Taylor, ``was the exclusive preserve of large armies
of engineers and managers,'' 8(a)(2) makes some
sense.'' \25\
---------------------------------------------------------------------------
\25\ Id. at 108.
---------------------------------------------------------------------------
Estreicher went on to stress that:
Today, sec. 8(a)(2), as written, is problematic for
American companies . . . The ``mass production''
factory of the 1930's and 1940's is a relic of the
past. Global competitive product markets put increasing
pressure on managers to reduce the layers of
supervisors and engineers that the old hierarchical
structures required and to delegate increasing
responsibility to front-line workers. American
companies, particularly in [the] manufacturing sector--
require ``smart'' workers who take ``ownership'' in
their jobs--who can operate computer controls and
understand the entireprocess involved in making a
product or delivering a service, who can on their own (with minimal
supervision) monitor quality and tailor their work to the special
requirements of customers and suppliers. . . . This ongoing
transformation of the workplace requires a high level of commitment
from front-line workers that is flatly inconsistent with the unilateral
style of the Taylorist school of management. Workers cannot be treated
as passive recipients of management dictates if they are at the same
time expected to learn new tasks and skills, rotate among work
assignments, interact with engineers, customers and suppliers, and
essentially supervise themselves.\26\
---------------------------------------------------------------------------
\26\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 105 (Feb. 12, 1997) (statement of Samuel Estreicher,
Professor of Law, New York University).
With regard to employee involvement and its relationship to
---------------------------------------------------------------------------
the modern workplace, Professor Estreicher stated:
Employee involvement is a desirable goal whether or
not it increases the demand for independent
representation, as long [as] it does not prevent
workers from effectively deciding on their own whether
they want such representation. Because employee
involvement programs can enhance opportunities for
worker participation and improve firm performance, but
without foreclosing other options, legal restrictions
should be lifted.\27\
---------------------------------------------------------------------------
\27\ Ibid.
Removal of legal restrictions that hamper worker
participation is particularly critical in light of testimony of
Professor Michael LeRoy, who estimated that ``30 percent of
U.S. work teams are probably in violation of Section 8(a)(2).''
\28\ Thus, Professor LeRoy concluded that:
---------------------------------------------------------------------------
\28\ Hearing on S. 295, the Teamwork for Employees and Managers Act
before the Senate Committee on Labor and Human Resources, 105th Cong.,
1st Sess. at 112 (Feb. 12, 1997) (statement of Professor Michael H.
LeRoy, Institute of Labor and Industrial Relations, University of
Illinois at Urbana-Champaign).
I support the TEAM Act because its language continues
to provide meaningful protection against company unions
while legitimating enlightened human resource practices
that aim to improve communication between non-
supervisory employees and managers; and because it
reasonably adapts the NLRA to the rigorsof a supply-
side, global economy.\29\
---------------------------------------------------------------------------
\29\ Ibid. Indeed, the compliance problems addressed by Professor
LeRoy may be exacerbated by certain State laws that require an employer
to establish safety and health committees. For example, a 1993 NLRB
General Counsel Advice Memorandum determined that such a committee,
established pursuant to a Tennessee statutory requirement, violated
section 8(a)(2) of the NLRA. See Goody's Family Clothing, Inc., Case
No. 10-CA-26718, 1993 NLRB GCM LEXIS 104 (September 21, 1993).
Similar recognition of the important role played by
employee involvement programs has also been voiced by any
number of prominent public policy-makers. In its final report
and recommendations, President Clinton's Commission on the
Future Worker-Management Relations acknowledged that
``[e]mployee involvement programs have diverse forms, ranging
from teams that deal with specific problems for short periods
to groups that meet for more extended periods.'' \30\ Perhaps
more importantly, the President's Commission concluded:
---------------------------------------------------------------------------
\30\ Commission on the Future of Worker-Management Relations:
Report and Recommendations, Dep't. of Labor and Dep't. of Commerce,
December 1994.
On the basis of the evidence, the Commission believes
that it is in the national interest to promote
expansion of employee participation in a variety of
forms provided it does not impede employee choice of
whether or not to be represented by an independent
labor organization. At its best, employee involvement
makes industry more productive and improves the working
lives of employees.\31\
---------------------------------------------------------------------------
\31\ Id. (emphasis added).
Similarly, as Secretary of Labor, Robert B. Reich, noted
the fundamental changes taking place in today's modern
---------------------------------------------------------------------------
workplace:
High-performance workplaces are gradually replacing
the factories and offices where Americans used to work,
where decisions were made at the top and most employees
merely followed instruction. The old top-down workplace
doesn't work any more.\32\
---------------------------------------------------------------------------
\32\ Robert B. Reich, The `Pronoun Test' for Success, the
Washington Post, July 28, 1993, at A19.
In response to these changes, the Department of Labor
issued a publication to American businesses that underscored
---------------------------------------------------------------------------
the benefits of employee involvement:
Highly successful companies avoid program failure by
assembling employees into teams that perform entire
processes--like product assembly--rather than having a
worker repeat one task over and over. In many cases,
teams of workers have authority usually reserved for
managers: They hire and fire; they pan work flows and
design or adopt more efficient production methods; and
they ensure high levels of safety and health.\33\
---------------------------------------------------------------------------
\33\ See Road to High-Performance Workplaces: A Guide to Better
Jobs and Better Business Results, U.S. Department of Labor, September
1994.
---------------------------------------------------------------------------
employee involvement works
During the past 20 years, employee involvement has emerged
as the most dramatic development in human resources management.
One reason is that worker involvement has become a key method
of improving American competitiveness.
Evidence of the success--and corresponding proliferation--
of employee involvement can be found in a 1994 survey of
employers performed at the request of the Commission on the
Future of Worker-Management Relations. The survey found that 75
percent of responding employers--large and small--had
incorporated some means of employee involvement in their
operations. Among larger employers--those with 5,000 or more
employees--the percentage was even higher, at 96 percent.\34\
It is estimated that as many as 30,000 employers currently
employ some form of employee involvement or participation.
---------------------------------------------------------------------------
\34\ The Nature and Extent of Employee Involvement in the American
Workplace, survey conducted by Aerospace Industries Associates,
Electronic Industries Association, Labor Policy Association, National
Association of Manufacturers, and Organization Resources Counselors,
Inc., August 10, 1994.
---------------------------------------------------------------------------
The success of employee involvement can also be found in
the views of American workers. A survey conducted by the
Princeton Survey Research Associates found overwhelming support
for employee involvement programs among workers, with 79
percent of those who had participated in such programs
reporting having ``personally benefited'' from the process.
Indeed, 76 percent of all workers surveyed believed that their
companies would be more competitive if more decisions about
production and operations were made by employees rather than
managers.\35\
---------------------------------------------------------------------------
\35\ Worker Representation and Participation Survey, Richard B.
Freeman and Joel Rogers, Conducted by Princeton Survey Research
Associates, December 1994.
---------------------------------------------------------------------------
Clearly, employee involvement is more than just another
passing fad in human resources management. Over the last 20
years, it has evolved--along with the global economy--into a
basic component of the modern workplace and a key to successful
labor-management relations. As such, American industry must be
allowed to use employee involvement in order to utilize more
effectively its most valuable resource--the American worker.
electromation and other cases signal need for clarification
On December 16, 1992, the National Labor Relations Board
(NLRB or Board) issued a decision in Electromation, Inc.,\36\ a
case which many thought would clarify the legality \37\ of
employee involvement programs. Electromation involved several
employee participation committees within a small, nonunion
company. Unrelated to any organizing effort,\38\ management
created the employee teams in response to employee objections
over several proposed changes in attendance and wage policies.
The so-called ``action committees'' addressed the following
workplace issues: (1) absenteeism, (2) no-smoking policy, (3)
communication network, (4) pay progression for premium
positions, and (5) attendance bonus program. The Board found
that the company played the primary role in establishing the
size, responsibilities, and goals of the committees and in
setting the final membership and initial dates for meetings.
---------------------------------------------------------------------------
\36\ 309 N.L.R.B. No. 163 (1992).
\37\ The two provisions of the NLRA most directly at issue in the
debate over the legality of employee involvement programs are sections
2(5) and 8(a)(2). Section 2(5) defines 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.'' Section 8(a)(2) makes it an unfair labor
practice for an employer ``to dominate or interfere with the formation
or administration of any labor organization or contribute financial or
other support to it.''
\38\ Although the Teamsters Union began an organizing drive shortly
after the formation of the action committees, the NLRB determined that
the company did not establish them to interfere with the employees'
right to choose a union. In fact, the company disbanded the committees
once it learned of the organizing efforts to avoid charges that it was
tainting the election process.
---------------------------------------------------------------------------
In order to determine whether the company committed an
unfair labor practice, the Board first found that the action
committees were ``labor organizations'' under the NLRA. The
term ``labor organization'' is quite broad and encompasses
``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.'' \39\
---------------------------------------------------------------------------
\39\ Section 2(5) of the NLRA, 29 U.S.C. Sec. 152(5) (emphasis
added).
---------------------------------------------------------------------------
Courts have added to the breadth of what constitutes a
``labor organization'' by finding that the term ``dealing with
employers'' was not limited to collective bargaining
situations, but was a much broader concept.\40\ The Board, in
Electromation, found that ``dealing'' included bilateral
communication between workers and supervisors within the
employee involvement program. Working with this wide-ranging
definition, the NLRB held that the action committees were
``labor organizations'' under the NLRA.
---------------------------------------------------------------------------
\40\ See National Labor Relations Board v. Cabot Carbon Co., 360
U.S. 203 (1959).
---------------------------------------------------------------------------
The Board then turned to the company's role in establishing
and operating the action committees. Under section 8(a)(2) of
the NLRA, it is an unfair labor practice for an employer ``to
dominate or interfere with the formation or administration of
any labor organization or contribute financial or other support
to it.''
In this context, the NLRB found the company had dominated
the committees by establishing the size, responsibilities, and
goals of the committees, and by selecting the final makeup and
initial meeting dates for the committees. Accordingly, the
Board held that the company had committed an unfair labor
practice under Federal labor law. The decision was later
affirmed by the Seventh Circuit Court of Appeals.\41\
---------------------------------------------------------------------------
\41\ Electromation, Inc. v. National Labor Relations Board, 35 F.3d
1148 (7th Cir. 1994).
---------------------------------------------------------------------------
The need for clarification of the legality of employee
involvement programs has since moved far beyond the specific
facts of the Electromation decision. The breadth of the
relevant provisions of the NLRA left employers and employees in
a legal never-never land. Furthermore, since the Electromation
decision, the NLRB has considered charges involving the
employee involvement efforts of some of the leading companies
in the country and has consistently questioned the legality of
these efforts: \42\
---------------------------------------------------------------------------
\42\ Much has been made by opponents of S. 295 of the relatively
small number of charges filed with the Board alleging a violation of
section 8(a)(2). First, the NLRB process is wholly complaint-driven,
and employees have a diminished incentive to challenge workplace
structures which effectively meet their interest in having greater
involvement in workplace decision making. In addition, the
Electromation decision has had a chilling effect on legitimate employee
involvement programs and on employers' plans to continue or expand such
programs.
Donnelly Corp.\43\--Named ``One of the 100 Best
Companies to Work for in America'' and recognized by
the U.S. Department of Labor (DOL) for its innovative
work system, the NLRB nevertheless issued a complaint
against Donnelly charging that its employee involvement
program violated section 8(a)(2). The irony was that
the genesis of the complaint was testimony that
Donnelly presented to DOL's Commission on the Future of
Worker-Management Relations (Dunlop Commission) on
``Innovations in Worker-Management Relations.'' Dr.
Charles J. Morris, former editor of The Developing
Labor Law, heard the testimony, believed the Donnelly
system was a violation of section 8(a)(2), and filed
the initial charge.\44\
---------------------------------------------------------------------------
\43\ GR-7-CA-36843.
\44\ Although this charge was eventually dismissed, a Donnelly
employee then amended an unrelated unfair labor practice charge she had
filed to include the alleged section 8(a)(2) violation. A complaint was
issued on this second charge and a hearing was scheduled, but the
charge was ultimately settled on other grounds.
---------------------------------------------------------------------------
Polaroid Corp.\45\--Also cited as ``One of the Best
100 Companies to Work for in America,'' the Polaroid
Corp. has long had an institutional commitment to
employee involvement and has been a model for other
companies establishing cooperative efforts. Despite the
company's attempt in the early 1900s to reconstitute
its successful committees to comply with section
8(a)(2), the Board's general counsel issued a complaint
challenging the new program even though it removed all
decision-making authority from the employees. In June
1996, an administrative law judge ruled that the new
program violated section 8(a)(2).
---------------------------------------------------------------------------
\45\ 1-CA-29966.
---------------------------------------------------------------------------
EFCO Corp.\46\--The EFCO Corp. first became involved
in employee involvement programs in the late 1970's
with the establishment of an employee stock ownership
plan (ESOP). The company then moved to utilize total
quality control techniques and an extensive employee
committee system. Four of the committees--employer
policy review, safety, employee suggestion, and
employee benefits--were challenged as violating section
8(a)(2) by the Carpenters' Union after an unsuccessful
organizing effort.\47\ Although acknowledging EFCO's
commitment to employee empowerment, the administrative
law judge nevertheless found that the committees were
``labor organizations'' and that the company had
illegally dominated them by forming the committees,
choosing initial members, participating in meetings,
and selecting topics for discussion.
---------------------------------------------------------------------------
\46\ 17-CA-16911 (March 7, 1995).
\47\ The Carpenters' Union attempted to organize EFCO employees in
the summer of 1993. However, the union never filed a petition for an
election with the NLRB.
---------------------------------------------------------------------------
Keeler Brass Automotive Group.\48\--A unanimous NLRB
ordered Keeler Brass Automotive Group to disband a
grievance committee established for several of its
plants. The Board, reversing a decision of an
administrative law judge, found that Keeler Brass
unlawfully dominated the formation of the committee and
interfered with its administration. In a concurring
opinion, Chairman Gould concluded that the committee
was not capable of independent action, despite the fact
that the committee was not created in response to union
organizing efforts or as a means to undercut
independent action by employees, participation on the
committee was voluntary and determined by election, and
employees were the only voting members of the
committee.
---------------------------------------------------------------------------
\48\ 317 NLRB No. 161 (June 14, 1995).
The Board's broad interpretation of the term ``labor
organization,'' which includes many employee participation
programs, and the strict limits on the role employers may play
in such organizations make it very difficult for employee
involvement programs to proceed successfully. Clearly, a
legislative change must be made.
current nlra prohibitions are too broad
A brief look at the history of section 8(a)(2) demonstrates
why the provision was originally crafted so broadly and why
such breadth interferes with the preferred method of labor-
management organization in many U.S. firms today. In 1935, when
Congress passed the NLRA, the so-called Wagner Act,\49\
employer-dominated (company) unions had become a focal point in
the national debate over how to improve labor-management
relations. The precursor to the NLRA, the National Industrial
Recovery Act, passed in 1933, had temporarily given employees
``the right to organize and bargain collectively through
representatives of their own choosing.'' \50\ However, the
Recovery Act proved to be of little value in ensuring those
rights, in part because it left the subject of employer-
dominated unions largely unaddressed.
---------------------------------------------------------------------------
\49\ Senator Robert Wagner was the prime sponsor of the bill which
became the National Labor Relations Act (NLRA).
\50\ National Industrial Recovery Act, 48 Stat. 195, 198 (1933)
(the rights established by the Recovery Act had only temporary effect,
because section 2 of the act contained a sunset provision).
---------------------------------------------------------------------------
Under the Recovery Act, employers could use company unions
as tools to avoid recognition of, and collective bargaining
with, independently organized unions. Employers often refused
to recognize independently formed unions on the grounds that
employees were already represented, albeit by a company union.
As a result, employers could establish and bargain exclusively
with unions that were formed and operated largely at their
direction.
The Recovery Act permitted such abuses of company unions
for various reasons. Primarily, the act contained inadequate
enforcement mechanisms.\51\ Further, it did not specifically
prohibit company unions, although the law prohibited employers
from requiring employees to join a company union as a condition
of employment.\52\ Last, the act granted employees the right to
organize but did not specify ``the kind of organization, if
any, with which employees should affiliate.'' \53\ Thus,
consistent with the Recovery Act, and employer could appear to
be ``recognizing and cooperating with organized labor'' while
avoiding the dangers inherent in dealing with a union not
subservient to the employer's interests.\54\
---------------------------------------------------------------------------
\51\ Hardin, Patrick, The Developing Labor Law (3d ed. 1992), vol.
1 at 25-26.
\52\ National Industrial Recovery Act, 48 Stat 195, 198-99 (1933).
\53\ I. Bernstein, Turbulent Years, at 38 (1970).
\54\ Hardin, supra note 51, at 26.
---------------------------------------------------------------------------
Recognizing the inadequacies of the Recovery Act, section
8(a)(2) of the NLRA was specifically drafted to prevent
employers from using company unions to avoid recognizing and
collective bargaining with independently organized unions.
Senator Robert Wagner, sponsor of the bill which became the
NLRA, stated that ``[t]he greatest obstacles to collective
bargaining are employer-dominated unions, which have multiplied
with amazing rapidity since enactment of the recovery law.''
\55\
---------------------------------------------------------------------------
\55\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, Legislative
History of the National Labor Relations Act, 1935, at 15 (1949).
---------------------------------------------------------------------------
According to an article printed in the New York Times
during debate over the NLRA, the number of employees in company
unions and increased from 432,000 in 1932, before passage of
the Recovery Act, to 1,164,000 just 1 year later.\56\ Over 69
percent of the company unions in existence at that time had
been formed in the brief period following passage of the
Recovery Act.\57\ The magnitude of this problem following
passage of the Recovery Act was evidenced by the fact that more
than 70 percent of the disputes coming before the National
Labor Board (precursor to the NLRB) before enactment of the
NLRA concerned employers' refusal to deal with properly elected
union representatives.\58\
---------------------------------------------------------------------------
\56\ Wagner, Robert. Company Unions: A Vast Industrial Issue, the
New York Times, Mar. 11, 1934.
\57\ Ibid.
\58\ Ibid.
---------------------------------------------------------------------------
Prior to passage of the NLRA, therefore, some employers
used company unions as a tool to avoid collective bargaining
with independently organized unions and to control the
collective bargaining that did take place. Section 8(a)(2) of
the NLRA was an important measure for ensuring that employers
did not use company unions as an obstacle to genuine collective
bargaining.
However, the legislative history of the NLRA suggests that,
while Congress strongly desired to eliminate barriers to
genuine collective bargaining, it did not desire to ban all employer-
employee organizations. Senator Wagner, in a discussion regarding the
advantages and disadvantages of company unions stated that:
[t]he company union has improved personal relations,
group-welfare activities, and other matters which may
be handled on a local basis. But it has failed dismally
to standardize or improve wage levels, for the wage
question is one whose sweep embraces whole industries,
or States, or even the Nation.\59\
---------------------------------------------------------------------------
\59\ Ibid.
Senator Wagner further stated, regarding a bill containing
provisions virtually identical to section 8(a)(2) of the NLRA,
---------------------------------------------------------------------------
that it:
[did] not prevent employers from setting up societies
or organizations to deal with problems of group
welfare, health, charity, recreation, insurance or
benefits. All of these functions can and should be
fulfilled by employer-employee organizations. But
employers should not dominate organizations which exist
for the purposes of collective bargaining in regard to
wages, hours, and other conditions of employment.\60\
---------------------------------------------------------------------------
\60\ Hearings on S. 2926 before the Senate Committee on Education
and Labor, 73rd Cong., 2d Sess. 9 (1934) (statement of Senator Wagner)
reprinted in 1 NLRB, Legislative History of the National Labor
Relations Act, 1935, at 39-40 (1949) (emphasis added).
Thus, at the outset of debate over the NLRA, Congress
indicated its disapproval of employer-dominated organizations
which existed for purposes of collective bargaining but did not
signal its disapproval of all employer-employee organizations.
Further debate over the proposed scope of section 8(a)(2)
confirmed that Congress did not desire to ban all employer-
employee organizations. Senator Wagner stated several times
that ``[e]mployer-controlled organizations should be allowed to
serve their proper function of supplementing trade unionism. .
. .'' \61\
---------------------------------------------------------------------------
\61\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, Legislative
History of the National Labor Relations Act, 1935, at 16 (1949);
Wagner, Robert. Company Unions: A Vast Industrial Issue, the New York
Times, Mar. 11, 1934.
---------------------------------------------------------------------------
The Senate report on S. 2926, an earlier version of the
NLRA containing provisions virtually identical to 8(a)(2),
confirms this view. Regarding employers' use of company unions
as an obstacle to collective bargaining, the report on the bill
stated:
[t]hese abuses do not seem to the committee so
general that the Government should forbid employers to
indulge in the normal relations and innocent
communications which are part of all friendly relations
between employer and employee. . . . The object of
[prohibiting employer-dominated unions] is to remove
from the industrial scene unfair pressure, not fair
discussion.\62\
---------------------------------------------------------------------------
\62\ S. Rep. No. 1184, 73rd Cong., 2d Sess. (1934) reprinted in 1
NLRB, Legislative History of the National Labor Relations Act, 1935, at
1104 (1949).
Senator Walsh, then Chairman of the Senate Committee on
Education and Labor, concurred in this view. Commenting on S.
2926, he stated that ``this . . . unfair labor practice seeks
to remove from the industrial scene unfair pressure by the
employer upon any labor organization that his workers may
choose, yet leaves fair discussion unhampered.'' \63\
---------------------------------------------------------------------------
\63\ 78 Cong. Rec. 10,559 (1934) reprinted in 1 NLRB, Legislative
History of the National Labor Relations Act, 1935, at 1125 (1949).
---------------------------------------------------------------------------
Thus, the NLRA's legislative history strongly suggests that
Congress desired to prevent employers from using company unions
as an obstacle to collective bargaining. At the same time,
however, the act's sponsors sought to leave intact
organizations intended to promote employer-employee
communication and cooperation.
The broad language of section 8(a)(2) does not seem
consistent with a congressional intent to prohibit only
employer-employee organizations which would inhibit recognition
of, and collective bargaining with, independent unions.
However, the Congress's experience with narrow interpretations
by the courts of labor relations legislation prior to enactment
of the NLRA may explain why the NLRA's sponsors drafted section
8(a)(2) so broadly.
Specifically, in the decades preceding enactment of the
NLRA, Congress had passed various measures to allow the
development of organized labor and to ensure the right to
bargain collectively. These measures included the Erdman Act,
enacted in 1898; sections of the Clayton Act; the Railway Labor
Act; and the Norris-LaGuardia Act.\64\ Of these, the Clayton
Act and the Norris-LaGuardia Act were broadest in their scope
of coverage.\65\
---------------------------------------------------------------------------
\64\ Hardin, supra note 51, at 12-24 (providing a historical
background to the National Labor Relations Act).
\65\ The Erdman Act and the Railway Labor Act were limited in scope
to employees engaged in the operation of interstate trains. Hardin,
supra note 51, at 14, 20.
---------------------------------------------------------------------------
Congress designed sections 6 and 20 of the Clayton Act to
prevent courts and employers from using the Sherman Act as a
barrier to union activity and development. Under the Sherman
Act, Federal courts were able to assert Federal question
jurisdiction over labor disputes and frequently held that
organized labor activities, by obstructing the flow of goods in
interstatecommerce, violated the act.\66\ Section 6 of the
Clayton Act prevented the application of the Sherman Act to organized
labor ``by providing that labor itself is not `an article of commerce.'
'' \67\ The section also specified that labor organizations did not
violate antitrust laws by ``lawfully carrying out'' their ``legitimate
objectives.'' \68\
---------------------------------------------------------------------------
\66\ Hardin, supra note 51, at 9-10, 16.
\67\ Hardin, id. at 16.
\68\ Ibid.
---------------------------------------------------------------------------
Section 20 of the Clayton Act was designed to greatly
restrict the ability of courts to issue injunctions against
organized labor activity. The first paragraph of section 20 was
intended to reduce the use of injunctions by requiring that
there be no adequate remedy at law and actual or threatened
injury before issuance of an injunction.\69\ The second
paragraph of section 20 listed several labor activities and
provided that ``none of [those] activities shall `be considered
or held to be violations of any law of the United States,' ''
and prohibited enjoining those activities even if the
requirements of the first paragraph were met.\70\
---------------------------------------------------------------------------
\69\ Although both of these requirements were historically present
in equity, courts had largely disregarded them in labor-injunction
practice prior to passage of the Clayton Act. Hardin, supra note 51, at
16-17.
\70\ Hardin, supra note 51, at 17.
---------------------------------------------------------------------------
Thus, Congress attempted to permit organized labor to
develop through language in the Clayton Act which specifically
prohibited various types of interference with organized labor.
Some of these attempts were thwarted, however.
Despite the seemingly broad scope of sections 6 and 20 of
the Clayton Act, the Supreme Court interpreted both sections
very narrowly in Duplex Printing Press Co. v. Deering. The
Court interpreted the first paragraph of section 20 as
approving of existing labor-injunction practice rather than as
imposing more stringent requirements for the issuance of
injunctions against organized labor.\71\ Further, the Court
interpreted the phrase ``between an employer and employees''
contained in the first paragraph as limiting application of
both paragraphs to cases between an employer and its own
employees.\72\ The Court interpreted the Clayton Act as having
minimal impact on barriers to union development and activity,
despite statutory language which would suggest otherwise.
---------------------------------------------------------------------------
\71\ Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921)
(construed in Hardin, supra note 51, at 18).
\72\ Ibid.
---------------------------------------------------------------------------
Given the Court's narrow interpretation of the Clayton Act,
and the failure of the Recovery Act to ensure the right to
organize and bargain collectively, it was not surprising that
Congress drafted section 8(a)(2) of the NLRA broadly.\73\ Prior
to the period in which the NLRA was enacted, courts often
resisted efforts designed to permit the growth of organized
labor and collective bargaining.\74\ Thus, to ensure employees
the rights to organize and bargain collectively, Congress
expansively crafted the prohibition in section 8(a)(2) of the
NLRA.
---------------------------------------------------------------------------
\73\ The definitional provisions in section 13 of the Norris-
LaGuardia Act were also drafted broadly, again demonstrating Congress's
tendency toward drafting pro-labor acts broadly in this period. Hardin,
supra note 51, at 23-24.
\74\ Hardin, supra note 51, at ch. 1.
---------------------------------------------------------------------------
As the previous discussion on employee involvement
indicates, a broad-sweeping prohibition of all employer-
employee organizations no longer serves the interests of giving
workers an effective voice in their workplace. Although the
right to independent representation remains a fundamental
principle of Federal labor law, nothing about modern employee
involvement interferes with that right.
Like all aspects of society, today's workplace is very
different than it was 60 years ago. In 1935, organized labor
was in its formational stages and was at the mercy of employers
intent on derailing its development. The myriad labor
protections on the books today--the Fair Labor Standards Act,
the Occupational Safety and Health Act, the Worker Adjustment
and Retraining Notification (WARN) Act and the Family and
Medical Leave Act--are testimony to the tremendous influence
and power of independent labor unions to protect working men
and women.
Likewise, working men and women have changed and so,
consequently, have their needs in the workplace. The demands
on, and skills required of, workers in today's information-
based economy are very different than those prevalent in the
manufacturing-driven economy of the early 20th century. The
work force of today mirrors the demographic changes of the
United States as a whole, and thus, the interests and values of
workers are increasingly more diverse.
The nature of work, for both employees and managers, has
also evolved tremendously in 60 years from the perspective of
both technological and organizational developments. Workplace
structures that have the flexibility to meet the situational
and differing needs of employees, while also addressing the
productivity demands of employers, are at a premium in the
modern working environment. While formal representation through
an independent labor organization will remain the preferred
form of organization in many workplaces, clearly, there must be
a place in this Nation's labor laws for cooperative
arrangements between employees and employers to address the
challenges and demands of working in a globally competitive
marketplace.
IV. Legislative History and Committee Action
On February 10, 1997, Senator Jeffords introduced the
Teamwork for Employees and Managers (TEAM) Act of 1997, S. 295.
The bill is co-sponsored by Senators Coats, Gregg, Frist,
DeWine, Enzi, Hutchinson, Collins, Warner, McConnell, Ashcroft,
Gorton, Grassley, Nickles, Mack, Shelby, Allard, McCain, and
Hollings.
On Febrary 12, 1997, the Senate Committee on Labor and
Human Resources held a hearing (S. Hrg. 105-7) on the TEAM Act.
The following individuals provided testimony:
William Budinger, Chairman and CEO of Rodel, Inc., Newark,
DE.
J. Thomas Bouchard, Senior Vice President, IBM, Armonk, NY.
Medlinda Weide, Michael Scarano, and Robert Von Bruns of
IBM, Essex Junction, VT.
Charles I. Cohen, of Morgan, Lewis & Bockius, Washington,
DC.
Robert Sebris, Jr., of Sebris Busto, Bellevue, WA.
Jonathan P. Hiatt, general counsel to the AFL-CIO,
Washington, DC.
Robert Muehlenkamp, Assistant to the General President,
IBT, Washington, DC.
Samuel Estreicher, Professor of Law, New York University,
New York, NY.
Michael H. LeRoy, Institute of Labor and Industrial
Relations, University of Illinois, Urbana-Champaign, IL.
Thomas C. Kohler, Boston College Law School, Newton, MA.
Additional statements and letters regarding S. 295 were
received and placed in the record.
On February 26, 1997, the Senate Committee on Labor and
Human Resources met in executive session to consider S. 295. A
quorum being present, the committee voted on the following
amendment:
Senator Kennedy offered an amendment to expand mandatory
subjects of bargaining. The amendment was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
On February 28, 1997, the Senate Committee on Labor and
Human Resources again met in executive session to consider S.
295. A quorum being present, the committee voted on the
following amendments:
Senator Kennedy offered an amendment to provide that the
TEAM Act would not apply where this is organizational activity
among employees. The amendment was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
Senator Kennedy offered an amendment to require NLRB secret
ballot election of team members. The amendment was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
Senator Kennedy offered an amendment to permit treble
damages for unfair labor practices. The amendment was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
Senator Kennedy offered an amendment that would require a
priority investigation, by the NLRB, of employee discharges
that occur during a union organizing campaign. The amendment
was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
On March 5, 1997, the Senate Committee on Labor and Human
Resources again met in executive session to consider S. 295. A
quorum being present, the committee voted on the following
amendments:
Senator Wellstone offered an amendment to increase remedies
in the event of a violation of section 8(a)(2) of the NLRA. The
amendment was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
Bingman
Senator Kennedy offered an amendment to change the NLRA
definition of ``supervisor.'' The amendment was defeated.
YEAS NAYS
Kennedy Jeffords
Dodd Coats
Harkin Gregg
Mikulski Frist
Bingaman DeWine
Wellstone Enzi
Murray Hutchinson
Reed Collins
Warner
McConnell
The committee then voted to report S. 295 favorably.
YEAS NAYS
Jeffords Kennedy
Coats Dodd
Gregg Harkin
Frist Mikulski
DeWine Bingaman
Enzi Wellstone
Hutchinson Murray
Collins Reed
Warner
McConnell
V. Explanation of Bill and Committee Views
The TEAM Act clarifies that it shall not constitute or be
evidence of a violation of section 8(a)(2) of the NLRA for an
employer to establish, assist, maintain, or participate in any
organization or entity of any kind, in which employees
participate to at least the same extent practicable as
representatives of management participate, to address matters
of mutual interest, including, but not limited to, issues of
quality, productivity, efficiency, and safety and health. This
language creates a safe harbor in Federal labor law for a wide
range of employee involvement initiative. Supervisors and
workers can discuss a myriad of issues that affect both the
productive capacity of a company and the quality of work-life.
Some of the matters of mutual interest which employee
involvement structures address will unavoidably include
discussions of conditions of work. The processes by which a
company ``produces'' its product are inextricably linked to the
terms and conditions of individual's employment in those
processes. Lawrence Gold, counsel to the AFL-CIO, perhaps
described this reality best when he argued before the NLRB:
What is productivity? It's who does what, it's
whether ``A'' works certain hours, whether ``B'' gets
relief, whether a particular way of moving materials is
sound or unsound. People are affected by that, their
jobs and prerogatives, their seniority, their
vacations. All of that is the stuff of working life.
And to say that you can abstract productivity from
working conditions is something that I have a great
deal of difficulty with.\75\
---------------------------------------------------------------------------
\75\ Transcript of Proceedings Before the National Labor Relations
Board of Electromation, Inc. (Case No. 25-CA-19818) 61-62 (Sept. 5,
1991).
Indeed, if employee involvement programs were prohibited
from discussing issues related to conditions of work, their
effectiveness would be severely hampered. The phrase ``terms
and conditions of employment'' includes issues such as
grievance procedures, layoffs and recalls, discharge,
workloads, vacations, holidays, sick leave, work rules, use of
bulletin boards, change of payment from a weekly salary to an
hourly rate, and employee physical examinations.\76\ Even if it
were possible to limit employee involvement to issues unrelated
to working conditions, doing so would limit their ability to be
a forum for employees and managers to develop comprehensive
strategies that contribute both to the economic well-being of
the company and to the pecuniary and nonpecuniary satisfaction
of the work force.
---------------------------------------------------------------------------
\76\ See Hardin, supra note 51, at 885-86.
---------------------------------------------------------------------------
Despite the breadth of the language creating the safe
harbor, the TEAM Act retains several important protections in
section 8(a)(2). First, the bill expressly provides that the
TEAM Act is not applicable ``in a case in which a labor
organization is the representative of such employees as
provided in [NLRA] section 9(a).'' This language ensures that
the TEAM Act only applies in nonunion settings, and clarifies
an important goal of the bill, viz., to provide nonunion
workers with the same right to form teams that union workers
have. Equally important, the bill provides that employee
involvement initiatives may not have, claim, or seek authority
to be the exclusive bargaining representative of employees or
to negotiate, enter into, or amend collective bargaining
agreements. This is a very significant protection that
distinguishes employee involvement programs from the company
unions of yesteryear that section 8(a)(2) was designed to
prohibit. Even after enactment of S. 295, such company unions
would continue to be unlawful under section 8(a)(2).
For example, in National Labor Relations Board v. Lane
Cotton Mills,\77\ a violation of section 8(a)(2) was found
where the employer established an in-house welfare association
and refused to bargain with a Textile Workers Organizing
Committee that had been elected by the employees. The
employer's action in this case would not fall within the safe
harbor created by the TEAM Act, both because management treated
the welfare association as the exclusive bargaining
representative, conduct specifically prohibited by S. 295,\78\
and because the TEAM Act would not apply in a union setting.
Similarly, in Solmica,\79\ a company president suggested to his
employees that they could resolve their differences themselves,
without a union. The employees agreed and eventually signed a
collective bargaining agreement with the president. Again, this
conduct would continue to be a violation of section 8(a)(2), as
the TEAM Act would not permit employee involvement structures,
no matter how formal or informal, to negotiate collective
bargaining agreements.
---------------------------------------------------------------------------
\77\ 111 F.2d 814 (5th Cir. 1940).
\78\ See also, National Labor Relations Board v. Link-Belt Co., 61
S. Ct. 358 (1941), American Tara Corp., 242 NLRB 1230 (1979).
\79\ 199 NLRB 224 (1972).
---------------------------------------------------------------------------
While opponents of the TEAM Act have argued that many of
the 1930's ``company unions'' which prompted the enactment of
section 8(a)(2) shared the beneficent characteristics of
today's employee involvement structures, a 1937 Bureau of Labor
Statistics study, entitled Characteristics of Company Unions,
1935 [hereinafter BLS Survey] paints a substantially different
picture. The study of 126 company unions found that 64 percent
of them had been formed in response to a strike or local union
activity. The remainder had either been intended to improve
plant morale (11.2 percent) or to appease public opinion or
respond to governmental encouragement of collective bargaining
(24.8 percent).\80\
---------------------------------------------------------------------------
\80\ BLS Survey at 84.
---------------------------------------------------------------------------
Even if some of the characteristics of company unions were
shared by today's employee involvement structures, there is a
critical distinction. Unlike company unions, legitimate
employee involvement programs do not pretend to serve the same
purpose as an independent labor union, which acts as the
exclusive representative of the employees for collective
bargaining and handling of grievances.
Unlike the employee involvement structures of today,
company unions in the first half of this century were being
advanced as exclusive alternative to labor unions. And
companies were refusing to bargain with duly chosen,
independent labor unions in favor of company unions. However,
as discussed previously, these company unions rarely possessed
the essential characteristics of a genuine collective
bargaining representative.
Under S. 295, the decision to choose formal organization
and to secure independent representation remains in the hands
of the employees. Nothing in the TEAM Act interferes with that
choice. The safe harbor created in S. 295, while arguably broad
in terms of the types of employee involvement structures to
which it applies, is quite narrow in terms of the scope of
conduct related to such structures which is legitimized. The
bill states that ``it shall not constitute or be evidence of an
unfair labor practice under this paragraph for an employer'' to
establish and participate in an employee involvement program.
(emphasis added). Senate bill 295 also specifically provides in
section 4 that ``nothing in this Act shall affect employee
rights and responsibilities contained in provisions other than
section 8(a)(2) of the National Labor Relations Act, as
amended.''
Thus, the other protections in section 8(a) of the NLRA
which prohibit employer conduct that interferes with the right
of employees to choose independent representation freely remain
in full force. If employee involvement programs do not prove to
be an effective means for employees to have input into the
production and management policies that affect them, those
employees retain the right at all times to organize formally
and seek union representation. Section 8(a)(1)--which makes it
an unfair labor practice for employers to interfere with,
restrain, or coerce employees in the exercise of their rights,
guaranteed by section 7 of the NLRA, to organize and bargain
collectively through representatives of their own choosing--
remains untouched by the TEAM Act.\81\ Employee involvement
programs cannot be used to interfere with employees' ability to
exercise freely section 7 rights.\82\
---------------------------------------------------------------------------
\81\ Similarly, the TEAM Act does not alter the prohibition in
section 8(a)(3) making it an unfair labor practice for an employer to
discriminate against any employee on the basis for his or her
membership in a labor organization.
\82\ In Stone Forest Industries, Inc., 36-CA-6938 (March 17, 1995),
it was held that an employer's promise, the day before a union
election, to establish a communications committee to deal with employee
grievances was a violation of section 8(a)(1) because it was used as an
inducement to persuade employees to vote against the union.
---------------------------------------------------------------------------
In sum, S. 295 creates a safe harbor in the NLRA for a
broad range of employee involvement programs. These legitimate
initiatives come in an infinite variety of organizational forms
and deal with a broad spectrum of workplace issues.
However, this safe harbor exists only for the purposes of
section 8(a)(2) and protects the workers' right to choose
independent representation at any time.
The committee places a high priority on the enactment of S.
295. The workplace of today is simply not the same as the
workplace that was prevalent in the America of the 1930's when
the National Labor Relations Act became law. This Nation must
prosper in an increasingly competitive and information-driven
economy where, at every level of a company, employees must have
an understanding of, and a role in, the entire business
operation.
Employee involvement in the modern workplace has proven to
be an effective strategy at increasing both the value that each
employee brings to the production process and the job
satisfaction that each employee derives from the workplace. The
Electromation case, and its progeny, have had a chilling effect
on the existence of employee involvement programs. For these
reasons, the committee recommends that the Senate promptly pass
S. 295.
This Nation's labor law must be relevant to the employer-
employee relationships of the 21st century. The committee
believes strongly that the TEAM Act is crucial to our Nation's
competitiveness as well as our workers' sense of job
satisfaction.
Significantly, the committee believes that the bill poses
no threat to the well-protected right of employees to select
representatives of their own choosing to act as their exclusive
bargaining agent. Even with the changes to the NLRA proposed in
S. 295, an employee involvement program may not engage in
collective bargaining nor may it act as the exclusive employee
representative. In fact, the TEAM Act applies in nonunion
settings only. The prohibitions in the NLRA outlawing
interference with employees' attempts to form a union and
preventing employers from avoiding bargaining obligations by
directly dealing with employees remain unaffected by the TEAM
Act.
In sum, the TEAM Act permits supervisors and managers to
confront and solve the myriad problems and issues that arise in
a workplace. Without this important legislation, the committee
believes the Nation would be idling a vast human resource that
can yield untold dividends for the country.
VI. Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, D.C., March 14, 1997.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, D.C.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 295, the Teamwork
for Employees and Managers Act of 1997.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Christina
Hawley Sadoti.
Sincerely,
June E. O'Neill, Director.
Enclosure.
S. 295--Teamwork for Employees and Managers Act of 1997
CBO estimates that enacting this bill would have no
significant effect on the federal budget. Because the bill
would not affect direct spending or receipts, pay-as-you-go
procedures would not apply. S. 295 contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act of 1995 and would impose no costs
on state, local, or tribal governments.
S. 295 would amend the National Labor Relations Act to
allow employers to work with employees in ``Employee
Involvement'' programs for the purpose of addressing matters of
mutual interest (such as issues of quality, productivity,
efficiency, and safety and health), so long as these
organizations do not seek to negotiate collective bargaining
agreements with the employers. The bill could affect the
workload and costs of the National Labor Relations Board by
increasing or decreasing the number of investigations of
employers' involvement in the activities of employee groups. We
anticipate that such effects, if any, would not be significant.
The CBO staff contact for this estimate is Christina Hawley
Sadoti.
This estimate was approved by Robert A. Sunshine, Deputy
Assistant Director for Budget Analysis.
VII. Regulatory Impact Statement
The committee has determined that there will be no increase
in the regulatory burden imposed by this bill.
VIII. Application of Law to Legislative Branch
S. 295 clarifies the legality of employee involvement
programs in workplaces covered by the National Labor Relations
Act, as amended, and as such has no application to the
legislative branch.
IX. Section-By-Section Analysis
Section 1 provides that the short title of the bill is the
``Teamwork for Employees and Managers Act of 1997.''
Section 2 provides the findings and purposes of the
legislation. Specifically, the findings by the Congress
recognize the escalating demands of global competition, the
resulting need for an enhanced role for employees in workplace
decision making, the extensive use by firms of employee
involvement techniques, the positive impact of and support for
employee involvement, and the legal jeopardy for employers
engaging in employee involvement.
The purposes of the act are to protect legitimate employee
involvement programs against governmental interference, to
preserve existing protections against deceptive and coercive
employer practices, and to allow legitimate employee
involvement programs in which workers may discuss issues
involving terms and conditions of employment to continue to
evolve and proliferate.
Section 3 amends section 8(a)(2) of the National Labor
Relations Act (NLRA) to provide that is shall not constitute or
be evidence of an unfair labor practice for an employer to
establish, assist, maintain, or participate in any organization
or entity of any kind, in which employees participate to at
least the same extent practicable as representatives of
management participate, to address matters of mutual interest,
including, but not limited to, issues of quality, productivity,
efficiency, and safety and health. The legislation also
provides that such organizations or entities may not have,
claim, or seek authority to negotiate or enter into collective
bargaining agreements between an employer and any labor
organizations. Finally, section 3 makes clear that its proviso
does not apply in a case in which an independent union
represents the employees.
Section 4 provides that nothing in section 3 of the
legislation shall affect employee rights and responsibilities
under the NLRA other than those contained in section 8(a)(2) of
the NLRA.
X. Minority Views
The Majority claims that S. 295 is intended to promote
employee involvement while protecting workers' rights. In fact,
the bill does nothing to promote legitimate employee
involvement programs and would do serious harm to the rights of
employees under the National Labor Relations Act. The bill
amounts to a reversal of more than 60 years of federal labor
law that has favored employee self-organization and discouraged
employer domination of employee organizations. Furthermore,
legitimate employee involvement programs have flourished under
the existing law, and the Majority offers no valid reasons for
changing the law.
In 1993 and 1994, the Commission on the Future of Worker-
Management Relations (the Dunlop Commission), a bi-partisan
group of labor relations experts from business, academia and
unions, conducted an intensive study of labor-management
cooperation and employee participation. The Commission held 21
public hearings and heard testimony from 411 witnesses,
received and reviewed numerous reports and studies, and held
further meetings and working parties in smaller groups. The
Commission made one recommendation that is of particular
relevance to S. 295: ``The law should continue to make it
illegal to set up or operate company-dominated forms of
employee representation.'' Commission on the Future of Worker-
Management Relations, ``Report and Recommendations,'' at xvii
(December 1994).
Yet now, after just one hearing in this Congress, and only
two in the last Congress, the Committee has voted along party
lines to report this bill, whose sole purpose is to make
company-dominated forms of employee representation lawful. The
Committee's action is ill-considered and unwise. It destroys
rights fundamental to a democratic society, undermines the
purposes of the National Labor Relations Act, and legalizes an
anti-union device, the company union, that has a shameful and
deeply disturbing history in our country. It is especially
troubling that this bill is being offered at a time when
employers are increasingly turning to the use of the company
union, in the guise of ``employee involvement,'' specifically
to defeat union organizing campaigns.
section 8(a)(2) is fundamental to the purposes of the national labor
relations act
The National Labor Relations Act prohibits company-
dominated labor organizations because they are inherently
destructive of workplace democracy and true employee
empowerment. Thus, section 8(a)(2) of the National Labor
Relations Act, 29 U.S.C. section 158(a)(2), is one of the core
provisions of American labor law. By making employer domination
of labor organizations illegal, section 8(a)(2) ensures that
all labor organizations will legitimately represent the
employees they purport to represent, rather than the owners and
managers with whom they deal over issues relating to the terms
and conditions of employment, including wages and hours of work
The law has recognized for more than 60 years that it is
profoundly anti-democratic to allow an employer to select the
representative of his employees. It is also profoundly arrogant
for this Committee or any employer to think that the employer
should make that choice for the employees.
If a labor organization, employee representation plan or
committee is to be the genuine voice of the employees, its
members must be selected by those employees and allowed to
operate without outside interference. This principle of
independence is so important that it is separately protected by
the Landrum-Griffin Act, which makes employer financial
assistance to a labor organization a violation of criminal law.
See 29 U.S.C. section 186.
Senator Robert Wagner, the author of the National Labor
Relations Act (the Wagner Act), considered the prohibition of
company-dominated labor organizations to be essential to the
goals of the act, which include ``encouraging the practice and
procedure of collective bargaining'' and ``protecting the
exercise by workers of full freedom of association.'' When
Senator Wagner introduced the bill that ultimately bore his
name he declared:
Genuine collective bargaining is the only way to
attain equality of bargaining power. * * * The greatest
obstacles to collective bargaining are company-
dominated unions, which have multiplied with amazing
rapidity. * * * [only] representatives who are not
subservient to the employer with whom they deal can act
freely in the interest of employees. * * * For these
reasons, the first step toward genuine collective
bargaining is the abolition of the company-dominated
union as an agency for dealing with grievances, labor
disputes, wages, rules or hours of employment. 1 NLRB,
Legislative History of the National Labor Relations
Act, 1935 at 16.
The majority acknowledges that Senator Wagner and the
Congress condemned ``company unions'' in and prohibited the
domination of ``labor organizations'' in 1935. The majority
erroneously claims, however, that that condemnation did not
apply to employee representation plans that do not negotiate
labor agreements or committees like those at the Donnelly
Corporation or EFCO. But in fact, they did have such plans in
mind, since the overwhelming majority of company unions in 1935
never entered into any collective bargaining agreement. No
technological advances, and no movement toward a global
marketplace, can alter this fundamental fact. The evil that
Senator Wagner addressed in 1935 is the same one S. 295 would
legalize today.
In NLRB v. Cabot Carbon, 360 U.S. 203 (1959), the Supreme
Court examined the legislative history of the Act's definition
of ``labor organization'' and concluded definitively that
Congress had not meant to limit it to organizations that
engaged in collective bargaining. First, Congress explicitly
considered and rejected in 1935 a proposal by the Secretary of
Labor to limit the Wagner Act's definition of ``labor
organization'' to organizations that bargain collectively.
Second, during consideration of the Taft-Hartley Act in
1947, Congress rejected a proposal very much like S. 295, which
would have permitted an employer to form or maintain ``a
committee of employeesand discuss with it matters of mutual
interest, including grievances, wages, hours of employment, and other
working conditions, if the Board has not certified or if the employer
has not recognized, a representative as their representative under
section 9.'' Congress has consistently rejected the notion that
company-dominated labor organizations are acceptable as long as they do
not attempt to negotiate a contract. See H.R. 3020, 80th Cong., 1st
Sess., 26, reprinted in 1 LMRA Leg. Hist. at 537.
The prohibition of employer-dominated labor organizations
makes sense as a practical matter as well as a theoretical
issue. No good purpose is served by allowing the employer to
choose and dominate the employees' representative. Cooperation
is not truly furthered, because the employer is not really
dealing with the employees if he is dealing with his own hand-
picked ``representative.'' An employer does not need the
pretense of a team or committee if he only wants to cooperate
with himself.
employee involvement programs are flourishing under the existing law
As the majority admits, 75 percent of all employers
surveyed by the Princeton Survey Research Associates in 1994,
and 96 percent of large employers, already had employee
involvement plans. By the Majority's own estimate, 30,000
employee involvement plans are already in operation. Section
8(a)(2) has not been an obstacle to this proliferation, and S.
295 is obviously unnecessary to remove any supposed chilling
effect of current law.
For the past twenty-five years, the NLRB has abolished
employee committees at a rate of only about four per year. This
is a striking contrast to the thousands of unlawful discharge
cases decided by the Board each year. In 1995 alone, the Board
ordered reinstatement of employees discharged illegally for
exercising their right to self-organization in 7,478 cases. In
8,987 cases, the Board ordered that employees fired illegally
receive back pay.
Furthermore, the few cases in which the Board orders
disestablishment of employee committees do not show that the
law impedes legitimate employee involvement plans. A study of
section 8(a)(2) cases showed that, from 1972 to 1993, the Board
disestablished employee committees only 58 times. Of these, 44
were cases in which the committee was formed or used in
response to a union organizing drive. Of the remaining 14, all
but two were cases in which the employer used the committee to
bypass an existing union; in the two remaining cases, the
disestablished committees had nothing to do with productivity,
quality, or efficiency, and did not empower employees with any
decision-making authority. Most of the employers whose
committees were abolished were also found guilty of illegal of
violating the rights of their employees in other ways, such as
illegal surveillance and interrogation, illegal threats, and
discharging employees for union activity. Rundle concluded that
``There is absolutely no evidence that the NLRB has ever in the
past twenty-two years disestablished a committee of the type
employers say they must have to be competitive.'' James Rundle,
``The Debate over the Ban on Employer-Dominated Labor
Organizations: What Is the Evidence?'' Friedman, Hurd, Oswald,
and Seeber, in Restoring the Promise of American Labor Law, pp
161-76, ILR Press (1994).
In the three and a half years since the study, the Board
has decided only twelve more disestablishment cases. In two of
these cases, Stoody, 320NLRB 18 (1995), and Vons Grocery, 320
NLRB 53 (1995), the NLRB found no violation. There, employee committees
were established by the employer and discussed terms and conditions of
employment, but ``did not have a `pattern or practice' of making
proposals to management'' on such subjects. In six cases a violation
was found when the employer established the committees during a union
organizing campaign. One case, Peninsula General Hospital, 312 NLRB 582
(1993), was reversed by a Court of Appeals, 36 F. 3d 1262 (4th Cir.
1994). In another, Vic Koenig Chevrolet, 321 NLRB No. 168 (1996), the
employer unlawfully withdrew recognition from the union, instructed
workers not to attend union meetings and engaged in other related
unfair labor practices.
In three cases the Board disestablished committees where
there was no union and no organizing drive at the time the
committees were established. In two, Keeler Brass, 317 NLRB
1110 (1995), and Dillon Stores, 319 NLRB 1245 (1995), the
committees had nothing to do with productivity, quality or
efficiency and did not empower employees with any decision-
making authority. In the third, Simmons Industries, 321 NLRB
No. 32 (1996), the employer had created four separate
committees, of which two, the Jay Plant Corrective Action Team
and the Southwest City TQM Committee, were legal because their
activities focused on product quality and operational
efficiency, and dealt only in isolated instances with working
conditions. Two other committees were illegal because they
regularly dealt with terms and conditions of employment. Thus
the employer was able to retain the committees it needed for
quality and efficiency purposes even though working conditions
were occasionally discussed, while the committees that clearly
violated employee rights and served no legitimate purpose were
abolished.
Combined with the previously cited study, these cases
comprise a twenty-five year pattern that offers not a single
example to show why the law should be changed.
the ``chilling effect'' is a myth
Proponents have resorted to claiming that these few cases
exert a ``chilling effect'' on employers who want to establish
employee involvement plans, but supposedly do not because of
concerns about section 8(a)(2). However, employee involvement
programs are thriving under current law. As the majority has
admitted for over three years, more than 30,000 exist today,
and 75% of employers use them--including over 96% of large
employers. This alone demonstrates that there is no chilling
effect.
Moreover, employer representatives agree. Former NLRB
Chairman Edward Miller, appointed to the Board by President
Nixon, told the Dunlop Commission that the alleged chilling
effect of current case law on employee involvement programs is
nothing but a ``myth.'' Chairman Miller, now a prominent
management attorney, testified as follows on behalf of the
National Association of Manufacturers before the Dunlop
Commission in 1993: ``While I represent management, I do not
kid myself. If section 8(a)(2) were repealed, I have no doubt
that in not too many months or years sham unions would again
recur.''
In the overwhelming majority of the decided cases,
employers used the committees to thwart union activity, and in
all the cases the committees purported to represent employees
on terms and conditions of employmentwithout having been
authorized to do so by employees they represented. Prohibiting such
obviously unlawful activity is a proper result. There is no reason why
an employer who seeks to establish legitimate employee involvement
programs should be deterred by these decisions.
current law represents a clear and balanced approach
The existing case law under section 8(a)(2) represents a
balance between employee protections and the legitimate
business needs of the employer. The TEAM Act would destroy that
balance and substitute a nearly limitless power for employers
to form and control employee organizations. The Majority would
have us believe that lack of clarity in the law has thrown
employers into doubt about the legality of employee
involvement, justifying the drastic revision they seek. There
is no serious problem with clarity now. Furthermore, a review
of decisions appealed to the Courts found only four cases in
the past 25 years in which a Court of Appeals refused to
enforce an NLRB order discharging an employee committee. The
courts have not once disestablished a committee when the Board
would have left one intact during at least the past 25 years.
Considering the standards that have been developed through
case law, it should be no surprise that legitimate employee
involvement programs have not been abolished under current law.
In order for the NLRB to find a violation of section 8(a)(2),
all four of the following elements must be present:
(1) employer domination of the employee committee;
(2) a pattern or practice of bargaining or dealing between
the employer and a select group of employees on the committee;
(3) the employees on the committee must be acting as the
representatives of their co-workers, speaking for all
employees, not just for themselves; and
(4) the subject matter discussed must be wages, hours, and/
or conditions of work, or the committee is not a ``labor
organization,'' and is not regulated.
If any one of these elements is missing, there can be no
violation. For example, if employees formed a committee and
elected the employee members, there would be no violation
because the committee was not dominated by management. For
example, in Amoco Oil Co., 14-CA-21651 (1992), the company
dealt with an association of African-American employees
concerning working conditions, provided the association with a
place to meet and access to the employer's phone, FAX and copy
machine. The NLRB General Counsel nevertheless refused to issue
a complaint under section 8(a)(2) because the employer did not
``guide or advise the group'' or otherwise establish or
dominate it.
If a committee was dominated by the employer but only
discussed how to enhance productivity and quality, there would
still be no violation because the committee would not be a
labor organization. Vons Grocery Co., 320 NLRB No. 5 (1995). If
the employer met with all employees, or even with a succession
of groups that together constituted all employees, then no
representation would be involved. As the NLRB explained in
General Foods Corp., 231 NLRB 1232 (1977), discussions even of
terms and conditions ofemployment by a ``committee of the
whole'' does not make such a group a labor organization; accordingly,
in such a case there can be no violation of section 8(a)(2).
In General Foods, the NLRB made clear that employers have
the right under section 8(a)(2) to set up production processes
in which significant managerial responsibilities are delegated
to employee work teams. In that case, employee teams, acting by
consensus of their members, made job assignments to individual
team members, assigned job rotations, and scheduled overtime
among team members. On the basis of General Foods the NLRB
General Counsel refused to issue section 8(a)(2) complaints
against work teams in Harcross Pigments, Inc., 14-CA-22059
(1993) because they ``constitute, in their aggregate, the
Employer's entire work force.''
The NLRB has also held that committees used to resolve
grievances were not illegal, where the committees had decision-
making authority and were acting for management and not as
employee representatives. Mercy Memorial Hospital, 231 NLRB
1108 (1977); John Ascuaga's Nugget, 230 NLRB 275 (1977).
Individual dealings with employees about terms and
conditions of employment have never been prohibited by section
8(a)(2). Section 8(c) specifically guarantees employers and
employees the right of free speech, and section 9(a) protects
the right of employees to present their grievances individually
or in groups and the rights of the employer to respond and
resolve those grievances. The NLRB has also upheld the right of
employers to establish groups of employees for brainstorming
and for sharing information, even on terms and conditions of
employment. As long as the group does not make proposals and
the ``purpose of such a group is simply to develop a whole host
of ideas'' or if ``the employer simply gathers information and
does what it wishes with such information'' there is no
violation of section 8(a)(2). E.I. Dupont, 311 NLRB 893 (1993).
Finally, the NLRB and the courts have taken a common sense
approach to section 8(a)(2) that ensures that companies will
not violate the law if their employee involvement programs
include isolated, occasional, or unintended instances of
dealing with the subjects of collective bargaining. Vons
Grocery Co., 320 NLRB No. 5 (1995), Stoody Co., 320 NLRB No. 1;
(1995), NLRB v. Peninsula General Hospital, 36 F.3d 1262 (4th
Cir. 1994).
To the extent there is any lack of clarity in the existing
law it is because there have been so few cases for the NLRB to
decide. This has provided much fodder for speculation about how
the law might be applied in future cases. For example, in his
testimony Professor Estreicher raised questions about whether
General Foods, in which work teams were held not to be labor
organizations and therefore legal, might be narrowly construed.
But the decision is twenty years old, and it has been used as
precedent repeatedly. It is preposterous to rewrite American
labor law on the basis of a theoretical possibility that future
decisions might create exceptions to the Board's 1977 General
Foods decision requires that we rewrite American labor law.
The amendment that Senator Dorgan offered on the Senate
floor in the 104th Congress sought to clarify the safe havens
for employee involvement that have already been delineated
through case law. That amendment was a direct response to the
complaints of some employers that the case law failed to
provide adequate guidance to permit lawful involvement
programs.
Under the Dorgan amendment, section 8(a)(2) would have been
amended to spell out the right of employers to meet with
employees individually or in groups ``to share information, to
brainstorm, or receive suggestions or opinions from individual
employees, with respect to matters of mutual interest,
including matters relating to working conditions.'' It would
have guaranteed the right of employers to form employee teams
that meet with management and, on occasion, discuss terms and
conditions of employment, and also the right to form any group
for the purpose of ``improving the quality of, or method of
producing and distributing, the employer's product or service''
and to discuss on occasion, working conditions. It differed
from S. 295 in that it did not undermine section 8(a)(2)'s ban
on employer domination of labor organizations, and it also
protected employees who participated in such groups from losing
their rights to collective activity through being reclassified
as supervisors or managers as a result of their participation.
The majority misleadingly cites the Dunlop Commission in
support of their arguments for S. 295. The Dorgan amendment
included more revisions to section 8(a)(2), to accommodate
employer concerns, than the Dunlop Commission recommended. Yet
it was rejected by the 104th Congress on party lines. This
shows that TEAM Act is not about clarifying the law, it is
about legalizing employer domination of employee organizations.
s. 295 would obscure the boundaries of permissible conduct
Ironically, the TEAM bill would not only upset the balance
of the existing law, it would actually blur the boundaries of
permissible employer behavior. The language of the bill is in
some places contradictory and in other places misleading, and
appears intended to obscure its actual purpose.
On the key issue of whether the employee committees may
``address'' wages, hours, and terms and conditions of
employment, the authors of the TEAM bill used the words,
``matters of mutual interest, including, but not limited to,
issues of quality, productivity, efficiency, and safety and
health.'' This language is devious because it does not appear
to specify that terms and conditions would be permissible
subjects for employer-dominated employee organizations. But, as
Senator Dodd pointed out at the Committee markup of the bill,
language such as ``including but not limited to'' is familiar
to all experienced legislators. It signals the drafter's intent
to cover many things not specified in the bill. The authors of
S. 295, however, made sure that the meaning they intended that
catchall phrase to cover would not be in doubt. The Purposes
section which specifies that the bill is intended to legalize
``employee involvement programs, in which workers may discuss
issues involving terms and conditions of employments.''
And certainly the bill's proponents understand exactly what
the Act would accomplish. At the Committee hearing on S. 295,
former NLRB Member Charles Cohen, testifying in support of the
bill, had the following exchange with Senator Reed:
Senator Reed. Let me ask a question of Mr. Cohen, who
is an expert in the field. You have read the TEAM Act
as proposed.As I read it, it seems to me that an
employer could select unilaterally members of the team as long as they
are roughly equivalent to the number of management members, and that
they could talk about quality, productivity and efficiency, but they
are not limited to talking about that--in fact, there are no limits to
what they could talk about, so effectively, they could talk about
wages, hours, conditions--and as long as this group does not purport to
be an exclusive bargaining agent, they would be totally legal. Is that
your interpretation?
Mr. Cohen. Let me try it this way, Senator----
Senator Reed. Could you answer my question?
Mr. Cohen. I believe the answer to that is probably
yes. . . .
In place of the term ``dealing with,'' which has a well
established meaning, the authors of the TEAM bill use the term
``address,'' which has no precedent anywhere in the Act. It is
only when we reach the words ``does not have, claim, or seek
authority to be the exclusive bargaining representative of the
employees or to negotiate or enter into collective bargaining
agreements . . .'' that the intent becomes apparent. Employers
would be able to engage in actual bargaining with an employee
organization that they established and controlled as long as
they did not ``enter into collective bargaining agreements.''
The term ``collective bargaining agreement,'' however, is
not defined by the Act, so the meaning of ``enter into
collective bargaining agreements'' is not clear. In its common
usage a collective bargaining agreement is written, so that
Board and the courts would likely treat it that way. If so, S.
295 means that employee committees, dominated by the employer,
could engage in unlimited bargaining as long as no written
contract was signed. Furthermore, the employer would be under
no obligation to bargain in good faith with the organization,
because section 8(a)(5)'s requirement of good faith negotiation
applies only to an exclusive representative. Thus employees
would not be able to enforce their agreement. Is this not an
employer's dream come true?
The claim that the bill protects workers' freedom of choice
by forbidding employer-dominated employee committees
proclaiming exclusive representation is particularly
disingenuous. All an employer would need to do to evade this
proscription is simply avoid the words ``exclusive
representative.'' A more unbalanced provision is hard to
imagine.
The bill would also inject significant confusion into the
realm of employee involvement schemes. If the TEAM bill is
enacted, the proscription against employer domination of a
labor organization will still exist, but it will be either
partially or wholly contradicted by the new proviso, which says
it is not an unfair labor practice for an employer to
``establish, assist, maintain, or participate in'' an employee
organization. These actions arguably encompass the very
criteria used to determine whether an employer is guilty of
domination.
Most employer actions now considered evidence of domination
would be legalized by the TEAM Act. However, some specific
issues that are well-settled under current law, may become
ambiguous under S. 295. How would the Board and the courts
decide, for example, if setting the agenda of meetings is
evidence of domination, as existing precedents hold, or if it
is encompassed by ``participate'' or ``assist'' or
``maintain,'' and therefore permissible? Similarly, if an
employer chose the members of an employee committee, or decided
that employee members would be elected by a show of hands,
instead of allowing employees to choose the method of
selection, would that be domination, or would that be allowed
because the employer made the decisions in order to
``establish'' the organization?
Certainly any of the above actions would be profoundly
undemocratic, and the existing law is quite clear about them--
they are illegal. But S. 295 would provide no clear barrier to
such actions. The Board and the courts would have to decide the
extent to which the current standards for domination were
eclipsed by S. 295. Considering the very small number of cases
decided each year, the law in this area would likely remain
unclear for many years. Employer domination would almost
certainly be legalized to some extent, but whether the concept
of domination would have any force at all under S. 295 is an
open question.
The authors of the TEAM bill seem to want employers to be
able to establish and dominate employee organizations and
bargain with them over wages, hours, and terms and conditions
of employment, i.e., repeal section 8(a)(2), but they are
embarrassed to say so. Therefore they seek to achieve the
effect by indirect and contradictory language. As a
consequence, if the bill becomes law, it will radically alter
the boundaries of permissible behavior, but it will obscure,
not clarify, where those boundaries lie.
testimony of republican witnesses showed no need to change the law
The majority, in their sole hearing on S. 295 in this
Congress, failed to bring forward a single employer who had
received even so much as a complaint, let alone an actual
decision, from the NLRB concerning a section 8(a)(2) issue. As
we will show in discussions of recent cases, if the Majority
had attempted to do so, the result would have been an
embarrassment, since none of the actual cases provides any
justification for changing the law. The employers and employees
who testified actually provided several illustrations of how
employee involvement can succeed without violating the law, and
failed to show any need to change the law.
Three employees from IBM's Essex Junction, Vermont facility
testified that in their three years of experience as team
members they had never dealt with issues of wages or hours.
Though they were described as the most successful production
team in the plant, their activities had never conflicted with
the law. Obviously S. 295 is not needed in order for such
activities to proliferate.
William D. Budinger, Chairman and C.E.O. of Rodel, Inc.,
testified about the importance of teamwork to his company, but
claimed to fear that he was violating section 8(a)(2). However,
his company's teams were perfectly legal, for they do not
purport to represent other employees.
J. Thomas Bouchard, Senior Vice President of IBM, and a
member of the LPA Board of Directors, offered four examples of
how employee involvement and teams can run afoul of the law.
Yet, from the evidence he gave, none of them appear to be in
conflict with the law. The ``diversity networks'' apparently
form on their own, and IBM merely provides them the opportunity
to network with each other. Since there was no evidence the
groups were dominated, there is no reason to believe they
violate section 8(a)(2).
Similarly, as Bouchard described it, the efforts of
employees to accommodate the needs of a co-worker who was a
single parent were organized by the employees themselves. Not
only does the law permit such activity, it encourages and
protects it as ``concerted activity,'' which is one of the key
employee rights of NLRA section 7, and which is protected
against employer interference or retaliation in Sections
8(a)(1) and 8(a)(3). The same is true of the group of fathers
who came forward to talk about leave issues for fathers after
the birth of their children. Their action was not just legal,
but enjoys protection under the law.
Finally, Bouchard erroneously claimed that section 8(a)(2)
prevents companies from complying with state laws that require
employers to set up safety and health committees. The NLRB
General Counsel has held that employers can comply with state
laws like those in Washington and Oregon that require joint
safety and health committees without violating section 8(a)(2)
because those laws do not require employer domination of the
committees or unlawful interference with employee rights. In
August 1996, the NLRB General Counsel issued an advice
memorandum in Vanalco, Inc., finding that a Washington State
safety committee did not violate section 8(a)(2). The General
Counsel determined that the financial and administrative
support the company provided to the committee constituted
``friendly cooperation'' and ``did not constitute unlawful
interference.'' Vanalco, at, 8-9.
Robert Sebris, Jr., an attorney who represents management,
made the same error. He claimed that section 8(a)(2) makes it
illegal for employers to comply with state laws that require
employers to establish joint safety and health committees. He
cited an advice memorandum by the NLRB General Counsel that
found, based on the particular facts of the case, that
Tennessee's state law requires employers to set up committees
in such a way that they are inevitably dominated and illegal.
That is because the employer determines the structure and
procedures of the committees, appoints the employee
representatives, and sets the committee's agenda.
But Sebris failed to cite the more recent Vanalco case from
his own state of Washington, noted above, in which the NLRB
General Counsel found that a joint safety and health committee
established pursuant to that state's law did not violate
section 8(a)(2). Moreover, in a November 13, 1996 letter to
Rep. Elizabeth Furse, the NLRB General Counsel stated his
opinion that Oregon's law, which is similar to Washington's, is
also valid on its face. This is as it should be, and S. 295
cannot be justified on the grounds that existing laws stands in
the way of non-union joint health and safety committees.
The majority report notes that Charles I. Cohen, a former
member of the National Labor Relations Board (1994 to 1996)
favors the TEAM Act. Mr.Cohen testified before this committee
on February 12, 1997, that ``. . . current law does not provide for a
wide variety of workplace efforts. It is my conclusion that, having
tried to square meaningful employee participation committees with the
current law, it simply cannot be done.''
It is difficult to square Mr. Cohen's testimony with the
fact that he participated in and joined in the opinions in two
of the controlling decisions interpreting section 8(a)(2) of
the National Labor Relations Act, decisions that strongly
affirmed the legality of employee participation committees. In
Stoody Co. and Vons Grocery, the Board clarified that isolated
instances of a committee straying into wage and hour issues
would not make the committee unlawful. For a team or a
committee to violate section 8(a)(2), it must have a pattern or
practice of dealing with wages, working conditions or work
hours. These decisions clarified and broadened the scope of
activities allowable to employee involvement committees.
The United States Court of Appeals for the Fourth Circuit
has held that a committee that dealt with wages or hours as an
isolated incident does not violate section 8(a)(2), and does
not need to be disbanded. In NLRB v. Peninsula General Hospital
Medical Center 36 F. 3d 1262 (4th cir. 1994) the court held
that a nurses committee established by an employer was lawful,
even though it considered working conditions on several
isolated occasions and made proposals to management.
Thanks in part to Mr. Cohen's efforts as a member of the
National Labor Relations Board, employers do not have to be
concerned about the legality of employee participation
committees that engage in a variety of activities and address a
variety of topics. It is telling that in his testimony
supporting the TEAM Act, Mr. Cohen was unable to cite a single
case in which he believed that employers and employees would
have been better served, had his decision not been constrained
by the current text of section 8(a)(2).
Professor Michael LeRoy testified on his survey of 23
employee involvement programs provided by Fortune 500 companies
in eight states. He found that about 30% dealt with ``issues
generally prohibited by Electromation.'' The Majority cites his
estimate that 30% of employee involvement programs may be
illegal, arguing that this figure shows that ``[r]emoval of
legal restrictions that hamper worker participation is
particularly critical.'' But in his research paper about the
survey, LeRoy admitted that the sample's small size ``means
that the results and conclusions may not be generalized.'' He
went on to point out several biases in the sample that could
distort the results. But even more fatal to the use of his
study as evidence about S. 295 is his statement about the
nature of his questions, ``The survey was not detailed enough
to determine whether an actual violation was present.'' Michael
H. LeRoy, Can TEAM work? Implications of an Electromation and
Dupont Compliance Analysis for the TEAM Act, 71 Notre Dame Law
Review 242, 245 (1996).
But that is still not all. Even if 30% of all employee
involvement programs violated section 8(a)(2), it does not
follow that section 8(a)(2) is a problem. It would mean that
70% of employee involvement programs do not violate section
8(a)(2). This raises an obvious question: if so many employers
have employee involvement plans that do not violate the law, is
there any reason why the other 30% should not comply with the
law, too?
Finally, LeRoy's support for the TEAM Act is based on a
misreading of the law. He believes that the TEAM Act would not
allow a dominated committee to deal with the employer on
matters relating to wages, hours, and working conditions. As we
show, a close reading of the law as well as the express
admissions of its supporters, including former NLRB member
Cohen, show that the TEAM Act would allow an employer to
dominate an employee committee and bargain with it over those
issues.
The majority also cites former Secretary of Labor Robert B.
Reich, and the Dunlop Commission Report to bolster their
arguments for S. 295. But Secretary Robert Reich and every
member of the Dunlop Commission publicly stated their
opposition to S. 295. Nothing in the testimony before this
committee or elsewhere belies these facts.
until recently, key proponents opposed any change in the law
If the bill is passed it will be vetoed, as the identical
bill was vetoed last year. The question then becomes, what is
really motivating proponents of S. 295? The answer is:
politics. If we examine the groups pushing this bill, their
composition, their positions on other employment laws, and
their flip-flopping positions on this bill, we can see just how
cynical this legislation really is.
The ``TEAM Coalition,'' a group of 110 corporate and trade
association members, is the driving force behind S. 295. Yet
two of the key employer organizations in the TEAM Coalition,
the Labor Policy Association (LPA) and the National Association
of Manufacturers (NAM), both declared just three years ago that
they opposed any change in section 8(a)(2). On September 8,
1994, the Dunlop Commission held a public hearing at which
representatives of the two groups testified on whether the
Electromation decision, disestablishing employee committees
that were dominated by the company, created a chilling effect
on employee involvement that justified changing section
8(a)(2).
John C. Reed, Chairman of the Employee Relations Committee
of the NAM, stated, ``The NAM believes that the current Board
and Board Chairman should be provided time and the opportunity
to narrow in focus and constrain that [chilling] effect through
whatever means the Board has at its disposal. . . . So we want
to take a `wait and see' approach.'' Similarly, Edward V.
Knicely, Vice-President of TRW, Inc., testified for the LPA,
``we believe that we should give the Board an opportunity. . .
. We're willing to see how the Board rules in some of these
future cases. But clearly, if that does not change then we are
prepared to pursue other legislative avenues through Congress
that would help us make the changes we believe . . . are
necessary to continue this whole employee involvement cultural
change.''
Given this stance, the only reason for the LPA and the NAM
to switch their position is if new Board decisions constrained
employers in the use of legitimate employee involvement
programs. Yet a letter from the Vice-President and General
Counsel of LPA to Senator Jeffords (March 27, 1997), despite
extensive discussion of the LPA's switch, fails to mention a
single case in which the Board did that. LPA's General Counsel
certainly did not have much to work with. Between Knicely's
September 8, 1994 testimony that theLPA was waiting to see if
legislation was necessary, and the time the TEAM Act was introduced in
the 104th Congress, the Board decided only one case, Magan Medical
Clinic, Inc., 314 NLRB 1083 (September 12, 1994). In Magan Medical, the
Board found that the employer had unlawfully interfered with the
formation of an employee committee, but had not dominated it. Because
the committee was not dominated, the Board said that all that was
necessary for the committee to function legally was a majority vote of
the employees indicating that they wanted it to represent them. This
should not be a barrier to employee involvement. Employers should not
impose a particular employee representational system on employees who
do not want it. In any event, there was absolutely nothing new about
the decision, and TEAM Act proponents have not cited it as a problem.
No matter how much the LPA may protest, there is only one
thing that changed between the time they announced their wait-
and-see approach and the time the TEAM Act was introduced, and
it wasn't the law. What changed was politics, and that is what
the bill is about. When Republicans gained control of Congress
in November 1994, the TEAM Coalition saw its chance to attack
the rights of workers, and switched from advocating a wait-and-
see approach to pushing for virtual repeal of a key principle
of American labor law, the ban on employer domination of labor
organizations.
Since the hearings in which the NAM and the LPA declared
their opposition to changing section 8(a)(2), the NLRB has
decided only twelve cases, about four per year. These cases put
no new restrictions on employee committees and, in fact, two of
the cases actually expanded and clarified the contours of
permissible activity. Since the case law continues to be
consistent with the wait-and-see approach that the NAM and LPA
favored, why do they now demand a drastic change to section
8(a)(2)?
This anti-union, anti-worker legislative assault is
entirely consistent with other legislative actions in which
proponents of S. 295 have engaged. The LPA and the NAM both
opposed the Worker Adjustment and Retraining Notification
(WARN) Act, which simply requires employers to notify workers
60 days in advance of a plant closing or a major layoff. They
also opposed the Family and Medical Leave Act, which has given
millions of workers the opportunity to take care of their
families or themselves during serious medical conditions,
without fear of losing their jobs. The NAM also opposed the
Civil Rights Act Amendments of 1991. Further the NAM opposed
increasing the minimum wage, along with other TEAM Coalition
members, including the National Federation of Independent
Business and the National Restaurant Association. These
organizations claim that they want to ``empower'' employees,
but their legislative records show that they want to be able to
close plants without notifying employees or the community in
advance, keep wages below the poverty level, permit rampant
discrimination in the workplace, and fire employees who stay
home to take care of sick children. This legislation has noting
to do with employee involvement or employee empowerment, and
everything to do with striking a blow against employee rights
while the time is ripe.
It is not necessary to speculate about the goals of the
TEAM Coalition. A June 5, 1995 memo to member companies from
their counsel emphasized ``two critical components of the TEAM
Act which should not be compromised: (1) Employee involvement
structures should be able to dealdirectly and exclusively with
terms and conditions of employment'' and (2) that control of the
``formation, composition and operation of EI structures is best left in
the hands of the employer and the employees who will shape them to meet
the needs to be addressed. Deregulation of EI [employee involvement] is
as critical as legalization. Any attempt to specify what constitutes a
legal employee involvement approach flies in the face of the vast
diversity of successful EI structures that have been developed by
employers and employees without having to follow a federal blueprint.''
Of course, the only ``federal blueprint'' that exists right
now is nothing more nor less than the requirement that the
employees themselves decide what organization, if any, should
represent them with respect to wages, hours, and working
conditions. That employee choice should be portrayed as an
inflexible barrier to the participation of employees in the
decisions that affect their terms and conditions of their
employment shows who this bill is really designed to empower:
employers, at the expense of employees. The freedom from
regulation that LPA demands is a freedom of the employer to
impose, and to retract, any system of employee representation
that the employer chooses. Any role that employees might have
in such a process is strictly up to the good graces of the
employer.
This, in their own words, is what TEAM supporters want:
employer-controlled committees dealing directly and exclusively
with terms and conditions of employment. They have never denied
that this is their intention. If this is not a sham union of
exactly the type outlawed for more than 60 years, then what is?
These employers boldly demand of Congress nothing less than
outright repeal of section 8(a)(2), which is what the Majority,
through S. 295, would obligingly do.
One NAM representative, Edward Miller, was honest about the
impact the TEAM Act would have on American workers. Former
Chairman of the NLRB, appointed by President Nixon, Miller
testified to the Dunlop Commission in 1993, ``While I represent
management, I do not kid myself. If section 8(a)(2) were
repealed, I have no doubt that in not too many months or years
sham company unions would again recur.'' Nothing in the TEAM
Act rebuts Chairman Miller's characterization.
s. 295 would legalize employer conduct that should remain unlawful
The only cases the Majority cited in support of its
argument that section 8(a)(2) should be amended, Electromation,
EFCO Corporation, Keller Brass, Polaroid and Donnelly, are
cases that have nothing to do with quality circles, self-
managed work teams, front-line efficiency, the introduction of
new technology or work practices, or expanding employee
decision-making. If S. 295 is intended to improve American
competitiveness and empower employees with decision-making
authority, in good faith, without thwarting the right of
employees to organize, then the Majority should present us with
cases in which the NLRB has disestablished committees that met
those criteria. If they cannot do so, then they are wasting
time and resources on a problem that does not exist.
As the NLRB wrote in Electromation, 309 NLRB at 182,
This case presents a situation in which an employer
alters conditions of employment and, as a result, is
confronted with a workforce that is discontented with
its new employment environment. The employer responds
to that discontent by devising and imposing on the
employees an organized committee mechanism composed of
managers and employees instructed to ``represent''
fellow employees. The purpose of the Action Committee
was, as the record demonstrates, not to enable
management and employees to cooperate to improve
``quality'' or ``efficiency'', but to create in
employees the impression that their disagreements with
management had been resolved bilaterally. 309 NLRB at
182.
Far from being a legitimate cooperative effort on the part
of management, the action committees at Electromation were
nothing but a technique to manipulate employees. As the Court
of Appeals noted:
The company proposed and essentially imposed the
action committees upon its employees as the only
acceptable mechanism for resolution of their
acknowledged grievances. . . . Electromation
unilaterally selected the size, structure, and
procedural functioning of the committees; it decided
the number of committees and the topics to be addressed
by each. . . . Also, as was pointed out during oral
argument, despite the fact that the employees were
seriously concerned about the lack of a wage increase,
no action committee was designated to consider this
specific issue. In this way, Electromation actually
controlled which issues received attention by the
committees and which did not.
In EFCO, 17-CA-6911 (1995), the Administrative Law Judge
(ALJ) found that the employee committees in question, which
dealt with benefit issues relating to employee stock option
plans and profit sharing, were different from those in
Electromation only ``in form, not substance.'' Slip op. at 28.
He found that EFCO's committees were established unilaterally
by management, which chose the initial membership, participated
in almost all of the meetings of the various committees, and
selected some of the issues the committees dealt with.
Furthermore, EFCO engaged in numerous activities that were
destructive of the employees' right to form and join a union.
The ALJ found that EFCO violated section 8(a)(1) of the NLRA by
maintaining an invalid no-solicitation rule, creating the
impression of surveillance, and soliciting grievances from
employees.
EFCO's employee committees did not empower workers. They
were created or revived in the context of an organization drive
by the United Brotherhood of Carpenters, which began organizing
EFCO in 1991 and had assigned two additional organizers to the
campaign as employees in 1992.
EFCO's committees were delegated no real power, and EFCO
reserved for itself the authority to decide which
recommendations, suggestions, policies, safety rules, and
employee benefits would be adopted. In particular, the safety
committee had ``lapsed into inactivity'' for some three years
until its reactivation during the organizing drive. The
ALJfound that the safety committee was not taken seriously by the
employees, that there was ``widespread disregard, even ridicule, of the
safety committee's efforts to improve plant safety.''
In Keeler Brass, 317 NLRB No. 161 (1995), the employee
committee in question was established to handle employee
grievances. The Board found that, rather than empowering
employees to handle grievances free of company influence, the
company dominated the committee by determining the committee's
membership eligibility rules, approving candidates, conducting
the election, counting the ballots, and soliciting employees to
vote for particular committee members.
Since the activities found to violate section 8(a)(2) in
Electromation, EFCO, and Keeler Brass had nothing to do with
quality circles, self-managed work teams, increasing efficiency
on the front-lines, improving the quality of a product or
service, introducing new technology or work practices, or
expanding employee decision-making, these cases do not support
the majority's contention that section 8(a)(2) needs to be
amended.
The result in the Donnelly case will not be changed even if
S. 295 becomes law. The Donnelly Equity Committee claimed to be
the exclusive collective bargaining representative of workers
at one of its plants. The bill expressly excludes committees
which ``claim or seek authority to negotiate or enter into
collective bargaining agreements.''
Testimony provided to the Committee in the 104th Congress
by Alan Reuther, Legislative Director of the United Automobile,
Aerospace, and Agricultural Implements Workers Union (UAW),
recounted efforts by Donnelly to use its company-created Equity
Committees to thwart organizing efforts by the UAW. In
particular, Reuther testified that Donnelly had actively
resisted the UAW's organizing drive, distributing anti-union
literature to workers while trying to bolster the credibility
of this Equity Committee by expanding worker representation and
referring to the committee's work as a ``grievance resolution
process.''
According to Reuther, 70 percent of the employees signed
authorization cards that designated the UAW as their
representative and asked for a representation election.
Donnelly then derailed the secret ballot union representation
vote by prompting the ``Equity Committee'' to seek resolution
of pending unfair labor practices prior to the vote.
The Donnelly Equity Committees, upon scrutiny, turn out to
be nothing but an old fashioned company union, used, just like
the company unions of the 1930's, to try to prevent employees
from organizing. The Polaroid case began not as a section
8(a)(2) charge, but as a charge under the Labor Management
Reporting and Disclosure Act (LMRDA) by an employee against the
conduct of officer elections to the ``Employees' Committee,''
which made recommendations to management concerning company
policies, benefits, wages, hours, and working conditions. The
Labor Department issued a preliminary finding that the
elections did not comply with the LMRDA's requirements that are
designed to ensure that labor organizations observe certain
democratic practices, in this case, the election of officers by
the employees they represent. Polaroid dissolved the Employees'
Committee rather than hold the required election, stating that
an election would be ``disruptive'' and ``divisive.''
Subsequently, Polaroid set up anotherorganization. Like the
Employees' Committee, the new organization was established to deal with
terms and conditions of employment not quality of product or efficiency
of the production process.
The case law cited by the majority in support of the TEAM
Act does not justify any changes to Section 8(a)(2). Moreover,
in the three years that the Republicans have been pushing this
legislation, they have failed to cite a single case
demonstrating that the law needs to be changed. Nor has the
majority produced a single witness to testify that he or she
has done anything legitimate that has been ruled unlawful by
the NLRB or the courts. The majority has utterly failed to make
even the most superficial case for changing the law. Outright
repeal of a labor law that has worked well for over sixty years
requires far more than this.
the dunlop commission report shows need for other changes in labor law,
but does not support the changes in s. 295
The blue-ribbon Dunlop Commission, appointed in 1993 by
Labor Secretary Reich and Commerce Secretary Brown, included
corporate executives (among them, Paul Allaire, the CEO of
Xerox), three former Secretaries of Labor (two from Republican
administrations), a former Commerce Secretary, a former union
president, and distinguished academics. The Dunlop Commission
issued its report and recommendation in December 1994.
The Dunlop Commission's recommendations are the best
starting point for deciding what changes need to be made in the
current law of the workplace. Instead of addressing isolated
topics--the way the TEAM Act does--the Dunlop Commission looked
at the whole legal system governing workers and managers.
The Commission identified serious problems that go to the
heart of the current labor system and that demand attention.
Revising Section 8(a)(2) of the National Labor Relations Act,
which is the sole focus of the TEAM Act, is only a small part
of a much bigger picture. Tinkering with one part of the
system, while ignoring other parts, makes no sense. The parts
are interconnected. Some parts are more important than others.
Improving the system means understanding how the parts fit
together and how the whole system is working--or not working.
The Dunlop Commission addressed the law of worker
representation and collective bargaining. One of the questions
that the Dunlop Commission was asked to answer was:
``What (if any) changes should be made in the present
legal framework and practices of collective bargaining
to enhance cooperation behavior, improve productivity,
and reduce conflict and delay?''
The Commission began its answer by making a remarkable
observation, which cannot be ignored.
``The evidence reviewed by the Commission
demonstrated conclusively that current labor law is not
achieving its stated intent of encouraging collective
bargaining and protecting workers' rights to choose
whether or not to be represented at the workplace.
Rectifying this situation is important to insure that
these rights are realized for the workers who wish to
exercise them, to de-escalate workplace conflicts, and
to create an overall climate of trust and cooperation
at the workplace and in the broader labor and
management community.'' [Dunlop Commission Report, p.
xviii.]
In other words: The law is not working and it needs to be
fixed.
The Commission made a number of findings that supported its
conclusion. It found that:
(1) ``American society--management, labor, and the
general public--supports the principle that workers
have the right to join a union and to engage in
collective bargaining if a majority of workers so
desire.''
(2) ``Representation elections as currently
constituted are highly conflictual for workers, unions
and firms.''
(3) ``The probability that a worker will be
discharged or otherwise unfairly discriminated against
for exercising legal rights under the NLRA [National
Labor Relations Act] has increased over time.''
With respect to discharges of union activists, the
Commission pointed to some terrible statistics:
Improper firings of union activists occur in one of
every four union elections; and seventy-nine percent of
American workers surveyed say it is likely that
employees who seek union representation will be fired.
[Commission Report, p. 19.]
Those figures shape--or distort--what happens in the
workplace. The Commission stated, ``This fear is no doubt one
cause of the persistent unsatisfied demand for union
representation on the part of a substantial minority of
American workers.'' [Commission Report, p. 19.] Fear should not
be a factor in the collective bargaining process. Fear is the
antithesis of free choice. And free choice is the core
principle of American labor law.
As the Dunlop Commission observed, the flaws in the current
legal framework for collective bargaining must be addressed--
for the benefit of workers, managers, and the country as a
whole. In the Commission's words:
``All participants--employees, management, and
unions--would benefit from reduction in illegal
activity and deescalation of a conflictual process that
seems out of place with the demands of many modern
workplaces and the need of workers, their unions, and
their employers.'' [Dunlop Commission Report, pp. 15-
16.]
The Commission did not simply point to this problem and
express the hope that it would go away. Instead, the Commission
made specific recommendations for changing the law. The
recommendations include:
Authorizing injunctions to remedy discrimination against
workers in organizing campaigns and first-contract
negotiations. The Commission recommended that Congress change
the law, to authorize injunctions under 10(I) of the National
Labor Relations Act against employers who discriminate against
workers. This provision requires the NLRB to seek injunctions
and to give case priority.
Ensuring employee access to union views on representation.
The Commission observed that access to union and employers is
crucial to workers' free choice about representations. But,
said the Commission, ``employees have little access to the
union at work--the one place where employees naturally
congregate,'' while employers have virtually unlimited access.
[Commission Report, p. 23.] To promote free choice, the
Commission recommended that Congress overrule the Supreme
Court's decision in Lechmere v. N.L.R.B., and thus give
employees access to union organizers in privately-owned, but
publicly-used spaces like shopping malls.
The conclusion of the Dunlop Commission on worker
representation and collective bargaining is worth quoting in
full:
``Employee freedom of choice about whether to have
independent union representation for purposes of
collective bargaining remains one of the cornerstones
of a flexible system of worker-management cooperation
in our democratic society, whatever portion of the
workforce decides to avail itself of this form of
participation. A labor relations environment marked by
prompt, pre-hearing elections, effective injunctive
relief for discriminatory reprisals in the
representation process, and flexible dispute resolution
of first contract negotiations, including arbitration
where necessary, will provide American workers greater
freedom to choose collective bargaining if that is what
they want. Taking these steps is an integral part of an
effort to reduce conflictual relations and to reform
the regime governing workplace participation. Employee
free choice about independent union representation
serves both as a guarantor of the integrity of employee
involvement plans in non-union facilities and as a
voluntary worker-management alternative to direct
federal regulation of the employment relationship.''
[Commission Report, p. 24.]
The Commission's last point is important. Employee free
choice, the Commission points out, helps guarantee the
integrity of employee involvement plans. If free choice is
missing--if free choice is a myth--then employee involvement
plans are suspect. We can't be sure that they truly serve
workers. It follows, then, the before we focus on employee
involvement plans, the way the TEAM Act does, we pay attention
to employee free choice. That means addressing the Dunlop
Commission's recommendations. The Commission has pointed out
the forces that are undermining free choice about workers
representation and collective bargaining. And the Commission
has shown us how to begin to make free choice a reality again.
That should be our first priority.
the real purpose of s. 295 is to thwart union organizing
As Senator Wagner recognized, company-dominated labor
organizations are a major obstacle to the development of real
unions that represent employers vis a vis their employers and
that can help them achieve improvements in their wages and
working conditions.
Two recent studies, one by James Rundle of Cornell
University, and the other by Kate Bronfenbrenner of Cornell
University and Tom Juravich of the University of Massachusetts,
both found that employers that use employee involvement plans
during union organizing campaigns are much likelier to defeat
the union than employers who do not institute such plans. Both
studies were scientific samples of all organizing campaigns in
the United States involving 50 or more employees that occurred
during a one-year period. Bronfenbrenner and Juravich found the
same effect in public sector union organizing campaigns as in
the private sector. Rundle's study showed that the negative
effects of employee involvement plans on union organizing were
especially severe where the plan or committee dealt with the
employer on pay issues, which is one of the things that S. 295
would legalize.
Rundle's study makes a comparison with an earlier study by
Bronfenbrenner (part of the Bronfenbrenner and Juravich study)
that reveals a profoundly disturbing fact: the proportion of
employers that use company unions as anti-union devices, in the
guise of employee involvement committees, has been rising
rapidly in recent years. The Bronfenbrenner study found that
union organizers in 1986 encountered employee involvement
committees in only 7% of all campaigns. By the time of Rundle's
sample in 1994, organizers were encountering employee
involvement programs in 32% of all campaigns. In both studies,
employers who used employee involvement programs also ran more
aggressive anti-union campaigns, based on the number and
intensity of specific anti-union tactics, including illegal
discharge of union supporters. This means that the TEAM Act is
being proposed at the same time that the use of employee
involvement programs as an anti-union tool during union
organizing drives is becoming more popular among employers.
James Rundle, ``Winning Heart and Minds: Union Organizing in
the Era of Employee Involvement,'' in Organizing to Win: New
Research On Union Strategies, Bronfenbrenner, Hurd, Oswald,
Seeber, Eds., ILR Press/Cornell University Press (forthcoming,
fall 1997). Kate Bronfenbrenner and Tom Juravich, The Impact of
Employer Opposition to Union Certification Win Rates: a
Private/Public Sector Comparison, Economic Policy Institute,
Working Paper No. 113 (February, 1995).
Not surprisingly, employers know about the effect of
employee representation plans on union organizing, and union
avoidance is an explicit purpose of many such plans. As Charles
Morris reports in his article, ``Deja Vu and 8(a)(2), What's
Really being Chilled by Electromation,'' (April 30, 1994), a
study of employee representation plans published by the Harvard
Business School Press in 1989 found that in every company
studied, managers cited the plans as ``a valuable and proven
defense against unionization.''
Electromation is a perfect illustration of how company-
dominated employee committees impede union organizing, and how
their disestablishment pursuant to section 8(a)(2) promotes
employeeempowerment by protecting the right of employees to
form independent labor organizations. The International Brotherhood of
Teamsters petitioned for an election in 1989, while the ``action
committees'' were in operation. The company mounted a vigorous anti-
union campaign and suspended the committees until after the election.
The union lost the election. A second election was held after a
National Labor Relations Board Administrative Law Judge found the
action committees to be in violation of section 8(a)(2) and ordered
them disbanded. The union won the election. Subsequently, after a
decertification petition was filed, a third election was held, and the
union won that vote, too.
If the proponents of S. 295 had their way, the employees at
Electromation would never have voted for a union. Today, as a
direct consequence of acting on their section 8(a)(2) rights,
the workers have their own union, chosen and run by them, in
which they make decisions through a democratic process. Through
their union they have negotiated a 3-year collective bargaining
agreement, ratified by majority vote of the employees. This is
precisely how the law is supposed to operate. Thus,
Elecromation proves the opposite conclusion from that which the
majority cites it: no change is warranted.
employees want freedom of choice, not employer control
The majority cites a study by Richard Freeman and Joel
Rogers as evidence that employees want employee involvement,
and by implication would favor the TEAM Act. (Worker
Representation and Participation Survey Richard B. Freeman and
Joel Rogers, conducted by Princeton Survey Research Associates,
December 1994). This is completely misleading, first, because
the majority fails to mention parts of the study that refute
this view, and second, because the study was never intended as
a referendum on the TEAM Act, and so does not include questions
that would directly address what the TEAM Act would do.
The Freeman and Rogers study shows that workers want to
choose their own representatives. Only 10 percent believe that
management should select the employee representatives while 59
percent thought employee representatives should be elected.
Most employees (59 percent) also thought that in cases of
conflict, final decisions should be made by an outside
arbitrator rather than leaving the final decision to
management. But the June 5, 1995 memo from the TEAM Coalition
counsel rejected ``[a]ny attempt to specify what constitutes a
legal employee involvement approach,'' so under S. 295
employers would be free to choose the employee representatives
and keep all final decisions to themselves.
The survey did not ask the critical question, namely
whether employers should be allowed to impose a system of
employee representation without the consent of the employee. It
is not hard to imagine that the response would be similar to
the employee's response to the idea of employers choosing
employee representatives: overwhelming rejection. In any event,
the study cannot legitimately be cited as the majority does.
s. 295 would undermine the basis of american labor law
The National Labor Relations Act was designed to minimize
the role of government in labor relations, and as such is
uniquely American. In all European countries, for example,
employees are guaranteed a certain amount of vacation by law,
in most cases four or five weeks per year. In this country,
employees have no such rights. Instead, they have a right to
organize and bargain with the employer. Apart from enforcing
those rights, and enforcing strictures against certain kinds of
union activity, the government does not get involved. Even when
employers have been found guilty of egregious violations of
their duty to bargain in good faith, the government stays out
of decisions about wages, hours and other terms and conditions
of employment (beyond the minimums set by the Fair Labor
Standards Act). Instead, the government leaves it up to the two
parties to work out such issues between themselves.
The key to this system is that there must be two parties.
That is why section 8(a)(2) lies at the heart of the National
Labor Relations Act. By requiring that any organization that
speaks for employees be independent of the employer, section
8(a)(2) is intended to ensure that such an organization is
accountable to the employees, just as those who speak for an
employer are accountable to that employer, so that the two
parties can represent their respective interests.
The law does not require that the two sides do this in an
adversarial or conflictual way. It merely recognizes that
however much the interests of employees and employers may
overlap, due to their mutual interest in the success of the
enterprise, their interests may differ with respect to other
issues, such as compensation, hours of work, and due process
for discipline. Nothing in the various participative workplace
experiments around the country changes this fact. Indeed, at
the same time that the majority of firms claim to have employee
involvement programs, real wages for workers have on average
been falling, while profits have been rising. The alarming
increase in disparity of income and loss of secure employment
opportunities for the average American worker in recent years
has not been prevented by the growth of employee involvement
programs.
Section 8(a)(2) was intended to foster labor organizations
that were capable of offsetting the lack of bargaining power of
individual employees in relation to their employers so that
workers would enjoy the fruits of economic progress and the
dignity that comes from contractual agreements, all without the
government mandating any of those things. Our system of labor
relations is inconceivable without it.
democratic amendments
The Majority claims that its primary objective in
eliminating the protections of section 8(a)(2) of the National
Labor Relations Act is to give more authority and autonomy to
employees. However, the TEAM Act bolsters employer prerogatives
without a commensurate enhancement of employee rights under the
NLRA.
At the TEAM Act Executive Session, Democrats offered a
number of amendments that address directly some of the most
serious problems with S. 295. Senator Kennedy offered
anamendment to protect team members from losing their right to organize
under the NLRA. Senator Kennedy also offered an amendment to exempt
from S. 295 workplaces where organizing was already in progress.
Senator Wellstone offered an amendment to impose tougher penalties on
repeat violators of section 8(a)(2) and to deter further violations.
Democrats also offered amendments designed to remedy some
of the inequalities that presently inhere in the NLRA. These
amendments would have provided employees with enhanced legal
remedies for NLRA violations by an employer, provided that the
National Labor Relations Board must seek immediate
reinstatement for workers fired during organizing, provided
that employees can bargain over the issues that affect them,
and provided equal access to the job site and equal time for
unions to speak with employees during organizing drives. The
Committee rejected all of Senator Kennedy's amendments on
party-line votes.
Senator Kennedy offered an amendment to preserve the status
as employees protected by the NLRA of employees who
collectively, as part of a work team or committee, take on some
of the decisionmaking authority of managers. The amendment
would have changed the definition of ``supervisor'' in section
2 of the NLRA to exclude individuals whose only supervisory
role is to direct the work of another employee, without having
the power to hire, fire, discipline or discharge the employee.
This amendment is necessary because the United States Supreme
Court has broadly interpreted the definition of supervisor to
deny numerous workings their right to an independent voice in
the workplace. Majority witness and former NLRB Member Charles
Cohen testified at the hearing on S. 295 that ``employees
[should] not be deemed supervisors or managers solely by virtue
of their participation in [committees or teams].'' The Dunlop
Commission also recommended this correction.
Senator Kennedy offered an amendment to provide that the
TEAM Act will not apply in workplaces where a union organizing
campaign is underway. It is in those instances where management
is combatting a union that the employer is most likely to
misuse teams and commit unfair labor practices. The few
violations of section 8(a)(2) found by the NLRB overwhelmingly
deal with employer efforts to set up teams in order to
frustrate union organizing efforts.
Since 1993, the Board ordered companies to disband employee
committees in 16 cases. In 11 of them, the violation occurred
in response to an organizing campaign. Between 1972 and 1993,
the Board ordered employers to disband employee committees 58
times. In 76 percent of these cases, an organizing campaign was
in progress at the time of the violation. In all but one of
these cases, the employer was also found guilty of unfair labor
practices.
Senator Wellstone offered an amendment to prohibit
employers from committing repeat violations of the provisions
against employer interference in the formation of a labor
organization. In cases where the National Labor Relations Board
has found an employer to be in violation of section 8(a)(2) of
the National Labor Relations Act, the Board could take such
action as it considers necessary to remedy the effects of the
violation, including requiring the employer to provide unions
with reasonable access to the employer's property. The Board
would also be required to issue a cease and desist order,
directing the company not to violate section 8(a)(2) again for
a period of five years.
The amendment would have corrected a flaw in section
8(a)(2). Currently, an employer who is found by the Board to
have established a company union in response to a genuine union
organizing drive is required to dismantle the illegal entity--
that is all. The Board has no remedy to deter repeat offenders.
The amendment would have provided meaningful sanctions against
repeat offenders, firms that are caught violating their
workers' rights but that continue their unlawful activities.
Senator Kennedy offered two amendments to strengthen the
remedies provided under the NLRA for unlawful discharges of
employees and other unfair labor practices during union
organizing campaigns.
The first amendment would have amended section 10(c) to
provide for triple back pay and the award of attorney fees as
the remedy for illegal discharges during union organizing or
during the negotiation of a first collective bargaining
agreement.
Currently, workers must risk their livelihood when they
start a union. 25 percent of employers respond to union
election campaigns by firing union supporters. In 1994, the
NLRB granted back pay in over 8,000 cases where workers alleged
they were punished for supporting a union. A triple back pay
remedy would deter employers from treating illegal firings as
an acceptable cost of doing business, and better protect
workers when they seek to organize. Almost every other major
employment statute contains provisions designed to deter
illegal conduct--the National Labor Relations Act should not be
an exception.
The second amendment would have amended section 10(l) of
the NLRA to require the Board to give top priority to the
investigation of charges that an employer has illegally
discharged an employee during a union organizing campaign or
during the negotiation of a first collective bargaining
agreement. If the Board found reasonable cause to believe the
charge was valid, it would be required to seek an injunction in
federal court pending final adjudication of the charge.
A quarter of employers use discharges to fight union
organizing campaigns. In fiscal year 1995, the Board reinstated
workers fired for union activity in 7,478 cases, and ordered
back pay in 8,987 cases. Employers have injunctive protection
in the case of secondary boycotts--it is only fair to give
employees this kind of protection, too. The most democratic way
to give employees control over their livelihood is to ensure
that employees do not fear for their jobs when they try to
start a union.
Senator Kennedy also offered an amendment to expand the
range of issues subject to collective bargaining. One way to
increase employee empowerment and make bargaining power more
balanced is to ensure that critical subjects, such as the
decision to close or relocate a plant or to subcontract
bargaining unit work, are not excluded from collective
bargaining. No issue is more important to employees than the
fundamental issue of whether they will have a job at all. The
amendment would have amended section 9 of the NLRA to make
clear that employees can negotiate over all issues that
significantly affect wages, hours, and terms and conditions of
employment. This amendment would ensure that as employees have
assumed an expanded role in decisionmaking in the workplace,
they have the right to bargain with their employers over the
key issues that affect them.
Finally, Senator Kennedy offered an amendment to provide
employees with as much access to union organizers and
information about unions as they have to the employer's anti-
union campaign.The amendment would have amended section 8 of
the NLRA to make it an unfair labor practice for an employer to deny a
non-employee union organizer access to the non-work areas of the
employer's facility for the purpose of conferring with employees, if
the union had filed a petition for representation with the NLRB. The
amendment would also make it unlawful for an employer to deny a union
the right to attend a meeting of employees called by the employer to
discuss representation by a labor organization.
Employers often respond to an organizing effort with an
all-out anti-union campaign, with posters, videos, leaflets,
and speeches meant to frighten workers about the consequences
of organizing. One common tactic is the ``captive audience
speech,'' in which employees are required to attend anti-union
speeches during their working hours.
This amendment offered three solutions to bring a greater
degree of fairness to union elections: it would protect
employees against compulsory attendance or absence from
meetings called by an employer on union representation, give
unions the right to speak about their goals at these meetings,
and give unions real access to employees who are considering
whether or not to organize.
conclusion
This bill is identical to the bill that was passed in the
104th Congress on party lines, and vetoed by the President.
Once again, the administration has promised a veto. On February
25, 1997, in a letter to Senator Jeffords, the Department of
Labor explained that S. 295 would be vetoed again. A copy of
that letter is appended to these views. We concur in this view
and urge our colleagues once again to oppose this ill-advised
piece of legislation.
Edward M. Kennedy.
Tom Harkin.
Jeff Bingaman.
Patty Murray.
Christopher J. Dodd.
Barbara A. Mikulski.
Paul D. Wellstone.
Jack Reed.
Appendix to Minority Views on S. 295
U.S. Department of Labor,
Secretary of Labor,
Washington, DC, Feb. 25,1997.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
Dear Chairman Jeffords: We understand that your Committee
may consider S. 295, the ``Teamwork for Employees and Managers
Act,'' on Wednesday, February 26. I am writing to emphasize the
Administration's opposition to S. 295, and to urge your
Committee not to order the bill reported.
This bill would amend section 8(a)(2) of the National Labor
Relations Act (NLRA) to broadly expand employers' abilities to
establish and control employee involvement programs. Section
8(a)(2) states, in part, that it is an unfair labor practice
for an employer to dominate or interfere with the formation or
administration of any labor organization. By prohibiting
employer domination and interference, section 8(a)(2) protects
the right of employees to choose their own independent
representative to advance their interests.
The Administration strongly supports further labor-
management cooperation within the broad parameters allowed
under current law. Recent decisions of the National Labor
Relations Board (NLRB) have helped clarify the broad legal
boundaries of labor-management teamwork, and the NLRB can be
expected to provide additional guidance in the exercise of its
independent authority. Your Committee's hearing showed that
employers currently do have the latitude to cooperate with
employee teams. The employee groups described by IBM, for
example, were clearly legal, and the IBM team that testified
has never found it necessary to discuss wages and hours,
showing that productivity and quality teams need not run afoul
of the law. I note that the NLRB has ordered only four
companies a year, on average, to terminate illegal employee
involvement schemes since Electromation was decided, and that
there is no other penalty for violation of section 8(a)(2).
Rather than promoting genuine teamwork, S. 295 would
undermine the delicate system of checks and balances between
employer and employee rights and obligations that has served
this country so well for six decades. It would do this by
allowing employers to establish company unions where no union
currently exists and by permitting company-dominated unions
where employees are in the process of determining whether to be
represented by a union. Rather than encouraging workplace
cooperation, this bill would abolish basic protections that
help ensure independent democratic representation in the
workplace.
As several witnesses before the Committee testified,
section 8(a)(2) is not the place to begin reform of the
National Labor Relations Act. Rather, they--as did the Dunlop
Commission before them--recommend changes in the law to
facilitate the free choice of employees to be represented by an
independent union and to deter unfair practices by employers,
which have become routine and widespread. The Administration
agrees with that approach.
For the foregoing reasons, the Administration opposes the
enactment of S. 295. If S. 295 were presented to the President,
I would recommend that he veto the bill.
Sincerely,
Cynthia A. Metzler,
Acting Secretary of Labor.
Additional Views of Senator Jeff Bingaman on S. 295, the Teamwork for
Employees and Management Act of 1997
I join my Democratic colleagues on the Labor Committee in
opposing S. 295, the Teamwork for employees and Management Act
of 1997.
I oppose the TEAM Act as reported because I feel it does
not provide enough protections against the company dominated
structures which Section 8(a)(2) was enacted to prevent. Anyone
who is serious about promoting legitimate employee involvement
must also be serious about preventing the proliferation of sham
unions. Such structures are not only bad for the American
worker, they are bad for American business. I am concerned that
S. 295 does not address the practice of establishing teams and
committees as a means to interfere with employee's efforts to
organize. As pointed out in some of the testimony the Committee
heard, this is the situation in which teams most often lose
claim to legitimacy.
However, workplaces of the late 1900s are far different
from the workplace of the early part of this century. More
employers understand the importance of having employees as
partners and not simply parts of a machine that churns out
products. We should be concerned with providing both employees
and employers the tools that empower them and that position
America for the new century and the global marketplace in which
we will compete.
I also understand the concerns of employers who fear that
they are operating outside the law when they institute and
promote employee involvement programs. If the Committee report
demonstrates nothing else, it demonstrates the uncertainty
about what is and is not permitted under 8(a)(2) and it is
appropriate for Congress to consider changes that protect
against sham unions, protect the legitimate right of employees
to organize and allow increased employee participation in the
workforce.
XI. Changes in Existing Law
In compliance with rule XXVI paragraph 12 of the Standing
Rules of the Senate, the following provides a print of the
statute or the part or section thereof to be amended or
replaced (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman):
TEAMWORK FOR EMPLOYEES AND MANAGERS ACT OF 1997
* * * * * * *
TITLE 29.--UNITED STATES CODE
* * * * * * *
unfair labor practices
Sec. 8. (a) It shall be an unfair labor practice for an
employer--
(1) to interfere with, restrain, or coerce employees
in the exercise of the rights guaranteed in section 7;
(2) to dominate or interfere with the formation or
administration of any labor organization or contribute
financial or other support to it: Provided, That
subject to rules and regulations made and published by
the Board pursuant to section 6, an employer shall not
be prohibited from permitting employees to confer with
him during working hours without loss of time or pay[;]
: Provided further, That it shall not constitute or be
evidence of an unfair labor practice under this
paragraph for an employer to establish, assist,
maintain, or participate in any organization or entity
of any kind, in which employees participate, to at
least the same extent practicable as representatives of
management participate to address matters of mutual
interest, including, but not limited to, issues of
quality, productivity, efficiency, and safety and
health, and which does not have, claim, or seek
authority to be the exclusive bargaining representative
of the employees or to negotiate or enter into
collective bargaining agreements with the employer or
to amend existing collective bargaining agreements
between the employer and any labor organization, except
that in a case in which a labor organization is the
representative of such employees as provided in section
9(a), this proviso shall not apply;
* * * * * * *