Should Good Relations with Employees Be an Unfair Labor Practice?

The old-fashioned management style of expecting workers to check their brains at the door and just telling them what to do no longer works, if it ever did. In an intensely competitive world where companies cannot afford to ignore the insights and ingenuity of employees, "Employee Involvement" (EI) programs are springing up. That’s the good news. The bad news is that this promising model for labor relations is under attack.

Employee Involvement programs are intended to resolve issues in the workplace through open discussion between workers and management. They often include brainstorming sessions and the formation of worker-management teams to improve working conditions, increase morale, and boost productivity. EI stresses cooperation over confrontation.

Organized labor, eager to guard its turf, contends that the kinds of groups established under EI programs can constitute employer-dominated labor organizations and are illegal under the National Labor Relations Act. That 1935 law deems it an "unfair labor practice" for the management of a company to "dominate" or "assist" any "labor organization." The purpose was to prohibit the "company unions" of the 1930s. Recently, the unions have won some legal battles against EI programs.

The decision in a 1992 case, NLRB v. Electromation, prohibits EI programs in non-union workplaces from dealing with "terms or conditions of employment." The company in that case was ordered to disband five worker-management committees that had been set up to deal with absenteeism, no smoking policies, communications, pay progression, and attendance bonuses. Useful or not to either workers or management, the establishment of these committees was determined to be an unfair labor practice.

Since the Electromation decision, managers know that some subjects are off limits for EI programs, but they don’t have clear guidance as to what is or is not legal because the decision was limited to the facts of one particular case. A company can be dragged into a costly legal battle if it ventures into the law’s considerable "gray area."

Several Michigan firms have felt the sting of union litigation against their EI programs. Webcor Packaging in Burton established a "Plant Council" in 1990 to deal with a wide variety of production and employment issues. Following a loss in a representation election, the Teamsters Union filed charges against Webcor, seeking to nullify the vote on the grounds that the Plant Council was illegal and had tainted the election. Subsequently, an administrative law judge ruled that the Plant Council was indeed illegal and ordered that it be disbanded.

The Donnelly Corporation manufactures glass products, including mirrors and windows, at its facilities in Grand Haven and Holland. In 1993 it was listed as one of the ten best companies to work for in the nation. For decades, Donnelly practiced employee involvement in many facets of its decision making. In 1994, representatives from the company were invited to testify before the Dunlop Commission on Worker/Management Relations about their experience with EI programs that enhance cooperation and productivity.

Despite its good motives and track record, Donnelly has had to fight off a succession of charges that its EI programs are illegal. Thus far, the National Labor Relations Board has issued no decision, since the complaining parties have withdrawn their charges. But it still cost Donnelly in excess of $50,000 in legal fees plus hundreds of hours of management time that could have been put to more constructive use. And since there is no "double jeopardy" defense under federal labor law, Donnelly could find itself drawn into another expensive legal fight over its successful management style in the future.

Organized labor dislikes EI because it may (and often does) lead to more satisfied workers, who are less receptive to union organizers. AFL-CIO official David Silberman, for example, claims that the teams established by Electromation were a "bald-faced effort to stop union organizing." Whether or not that is true, it raises an important question: Why should it be illegal for management to take peaceful steps to increase worker satisfaction? Union leaders talk as if they’re entitled to a large pool of dissatisfied workers for them to entice into unions.

Most Americans would be astounded to learn that it could ever be illegal for managers and workers to get together to discuss topics of mutual interest. The central activity of EI programs, after all, is talking. Vagueness in the law compels Americans to devote resources to legal wrangling over what they may say in the labor relations setting.

Last summer, President Clinton vetoed a bill that would have overruled the Electromation decision and clarified the law so that nonunion employers and their workers would be able to establish EI programs without fear of legal harassment. Perhaps if the public understood what companies like Webcor and Donnelly have endured, and what positive worker-management relations can accomplish, they would ask Congress to try again.