[Congressional Record Volume 142, Number 54 (Wednesday, April 24, 1996)]
[Extensions of Remarks]
[Pages E616-E618]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




              COOPERATIVE TEAMS IN THE AMERICAN WORKPLACE

                                 ______


                         HON. THOMAS C. SAWYER

                                of ohio

                    in the house of representatives

                       Wednesday, April 24, 1996

  Mr. SAWYER. Mr. Speaker, I rise today to insert in the Record the 
text of an address recently given by National Labor Relations Board 
Chairman William B. Gould on the subject of cooperative teams in the 
American workplace. I believe it is a significant contribution to the 
ongoing congressional debate on the legality of employee involvement 
structures.
  Currently, the National Labor Relations Act prohibits employer-
dominated teams if they discuss wages, hours or other conditions of 
employment. That policy was enacted over 60 years ago to prevent 
employers from setting up company unions as a means to block employee 
efforts to obtain truly independent representation for the purpose of 
collective bargaining.
  Last year, Congressman Steve Gunderson introduced H.R. 743, the Team 
Act, which was intended to make all workplace teams legal, regardless 
of the content of their discussions. When the House considered H.R. 
743, I offered a substitute amendment that was intended to protect 
legitimate employee involvement structures, without allowing employer-
dominated sham unions.
  My substitute would have clarified that teams established to discuss 
productivity, efficiency or other competitiveness issues are currently 
legal under the National Labor Relations Act. More importantly, it 
would also have preserved one of the fundamental tenets of the NLRA--
that employees must be able to choose effective independent 
representation for discussions of terms and conditions of employment, 
such as hours, wages, and other matters typically discussed in 
collective-bargaining negotiations.
  However, my substitute also recognized that such issues are sometimes 
inextricably linked with competitiveness. It would have protected 
legitimate workplace teams, even if their discussions occasionally 
touched on directly related conditions of work.
  In his speech, chairman Gould expresses support for this type of 
approach and issues a broad call for allowing the NLRB to conduct its 
statutory responsibility to apply the basic principles of the NLRA to 
specific cases. He specifically voices opposition to the Team Act, and 
makes the case that recent Board decisions have begun to address the 
concerns of Team Act supporters. He also reviews his successful efforts 
since becoming chairman 2 years ago to streamline and improve the 
Board's decision-making process.

[[Page E617]]

  Mr. Speaker, the Senate has begun to consider the legality of 
workplace teams, so these issues may be before the House again soon. In 
preparation for this, I commend chairman Gould's speech to my 
colleagues.

            National Labor Relations Board Luncheon Address

                   (By William B. Gould IV, Chairman)

       I am honored to address this Seventeenth Annual Labor-
     Management Relations Seminar, which has a long history of 
     constructive contributions to labor-management relations in 
     the United States. It is a pleasure to be here to discuss 
     with you some of the recent developments and issues of 
     current concern involving the National Labor Relations Board.
       Not only is this a chance to access the direction of the 
     Board on the eve of the second anniversary of my confirmation 
     as Chairman by the Senate--but also on a more personal note 
     on that same day, March 2, I will be in Los Angeles to attend 
     the wedding of my second oldest son, Timothy Samuel Gould, 
     the first of the three Gould boys to exchange marital vows. 
     Thus, both professionally and personally, it is a time for 
     celebration as well as reflection about the past and 
     contemplation on the years to come.
       The two years have passed quickly and have been a real 
     learning experience, not so much in labor law--though I am 
     continuously dazzled by new doctrines and precedents which 
     somehow escaped my scrutiny in a quarter of a century of 
     teaching and writing and 6 years of practice--but in the ways 
     and politics of Washington. This was not new to me in an 
     intellectual sense, but to live it has been a unique 
     experience.
       As you know, the TEAM Act was passed by the House of 
     Representatives in September 1995, and is now pending before 
     the Senate.
       That bill would make inoperative Section 8(a)(2)'s 
     strictures against employer dominated or assisted labor 
     organizations to most situations where a ``sham'' union 
     necessitates the intervention of law. My sense is that the 
     TEAM Act is an inappropriate response to whatever problems 
     exist under Section 8(a)(2) and that they would promote the 
     rise of sham or dependent labor organizations, a result most 
     undesirable under a statutory policy which promotes autonomy 
     and self-determination. And, most important, the Board since 
     last summer, has attempted to affirmatively promote 
     legitimate employee cooperation programs under the statute as 
     written.
       As you know, there are two parts of the legal problem under 
     the NLRA. In order for a company union problem to arise under 
     Section 8(a)(2) an employee organization must be found to be 
     a ``labor organization'' within the meaning of the Act. In 
     this regard, the Supreme Court in NLRB v. Cabot Carbon Co. 
     established an extremely broad definition for labor 
     organization almost 40 years ago--it covers far more entities 
     than unions which we typically think of as 
     labor organizations--and, thus, has made many such 
     employee mechanisms fit the statutory definition.
       This is an important part of the problem because an 
     organization can be only ``unlawfully'' assisted or dominated 
     under Section 8(a)(2) if it meets the labor organization 
     test. Last summer I addressed both issues in my separate 
     concurring opinion in Keeler Brass Co. Though I found that 
     the Grievance Committee in that case was a labor organization 
     within the meaning of the Act, I explicitly stated that I 
     would not find other employee groups to fall within the 
     definition. I stated that I agreed with the Board decisions 
     of the 1970s which had held employee participation groups not 
     to be labor organizations. In those cases the Board held that 
     employee groups which rendered final decisions and did not 
     interact with management performed ``purely adjudicatory 
     functions'' which had been delegated to it by employers and 
     thus did not ``deal with'' the employer within the meaning of 
     Section 2(5) of the Act which defines a labor organization. I 
     stated that I fully agreed with the Board's decision and 
     rationale in those cases and that they are `. . . consistent 
     with the movement toward cooperation and democracy in the 
     workplace which I have long supported,'' I further stated:
       ``This movement is a major advance in labor relations 
     because, in its best form, it attempts nothing less than to 
     transform the relationship between employer and employees 
     from one of the adversaries locked in unalterable opposition 
     to one of partners with different but mutual interests who 
     can cooperate with one another. Such a transformation is 
     necessary for the achievement of true democracy in the 
     workplace. However, it does pose a potential conflict with 
     the National Labor Relations Act, enacted in 1935 at at time 
     when the adversarial struggle between management and labor 
     was at its height.''
       In Keeler Brass I concluded that the Committee, since it 
     did not have the authority to adjudicate, was not covered by 
     the precedent which I embraced in that opinion. Since it made 
     recommendations about grievances and employment conditions--
     recommendations about which the Committee was not the final 
     arbiter--it was a labor organization within the meaning of 
     the Act. Accordingly, I then considered the question of 
     whether the employer had unlawfully dominated or interfered 
     with the labor organization in question.
       In considering this issue I stated my approval of the Court 
     of Appeals for the Seventh Circuit's approach to this issue 
     in the landmark Chicago Rawhide decision. The court 
     established in that case, as I noted in my concurring 
     opinion, a demarcation line between support and 
     cooperation. As I said:
       ``The court defined support as the presence of `at least 
     some degree of control or influence,' no matter how innocent. 
     Cooperation, on the other hand, was defined as assisting the 
     employees or their bargaining representatives in carrying out 
     their `independent intentions. The court went on to find that 
     assistance or cooperation may be a means of domination, but 
     that the Board must prove that the assistance actually 
     produces employer control over the organization before a 
     violation of Section 8(a)(2) can be established. Mere 
     potential for control is not sufficient; there must be actual 
     control or domination. The court set forth the following 
     test: `The test of whether an employee organization is 
     employer controlled is not an objective one but rather 
     subjective from the standpoint of the employees.' ''
       I said in Keeler Brass--and say here again today--that I 
     approve of the Seventh Circuit's statement holding promoting 
     good and cooperative relationships. I also agree that the 
     subjective views of the employees must be taken into account 
     as the Seventh Circuit said in both Chicago Rawhide and 
     Electromation--but that to rely completely upon employee 
     satisfaction would undermine extant Supreme Court precedent.
       Although the employee cooperative program in Chicago 
     Rawhide originated with the employees, I said in Keeler Brass 
     that an employee group does not have to originate with 
     employees but can be promoted or suggested by the employer 
     and not run afoul of the prohibitions against assistance and 
     domination. As I said:
       ``I do not think these efforts are unlawful simply because 
     the employer initiated them. The focus should, instead, be on 
     whether the organization allows for independent employee 
     action and choice. If, for example, the employer did nothing 
     more than tell employees that it wanted their participation 
     in decisions concerning working conditions and suggested that 
     they set up a committee for such participation, I would find 
     no domination provided employees controlled the structure and 
     function of the committee and their participation was 
     voluntary.''
       Thus, I noted in Keeler Brass that the factors in favor of 
     dismissal were that the employer did not create the committee 
     in response to a union organizational campaign, that the 
     committee was voluntary and employees were the voting members 
     of the committee and all of them were elected by employees. 
     Accordingly, I was of the view that there was some measure of 
     free choice and ``scope for independence.'' On the other 
     hand, the fact that the employer set time limits for terms 
     for membership, established eligibility rules and election 
     procedures and conducted the election, announced the results 
     of the election, dictated the number of employees who could 
     serve on the committee, established meeting days and allowed 
     special meetings to be held only with management approval 
     argued in favor of unlawful domination. As I said:
       ``These elements of control indicates that the committee is 
     not capable of action independent of the employer. Perhaps 
     the most telling aspect of dependency is that the committee 
     cannot even make a decision about when it will meet without 
     prior approval from the employer.''
       I am of the view that the Board in these past two years 
     moved closer to the support for employee cooperative programs 
     which I expressed last summer in a series of decisions issued 
     on December 18, 1995. For instance, in Stoody Company a 
     unanimous Board said: ``We support an interpretation of the 
     Act which would not discourage such [employee participation] 
     programs.'' In this case the employer created a committee, 
     the Handbook Committee, to gather information about sections 
     in the handbook which were inconsistent with the current 
     practice, that were obsolete or that were misunderstood by 
     employees. The committee was not established to discuss 
     wages, benefits or working conditions. But during the only 
     meeting of the committee, which lasted one hour, employees 
     raised questions concerning vacation time and the employer's 
     representative participated in these discussions. 
     Subsequently, the company stated again that the committee was 
     not designed to discuss such subjects.
       The Board in Stoody Company rejected the view that the 
     employee group in question was a labor organization within 
     the meaning of the Act. Thus, the prohibitions regarding 
     unlawful assistance and domination were inapplicable. In an 
     important passage which ought to get the attention of the 
     Senate when it considers the TEAM Act in the coming months, 
     the Board said the following:
       ``Drawing the line between a lawful employee participation 
     program and a statutory labor organization may not be a 
     simple matter because it may be difficult to separate such 
     issues as operations and efficiency from those concerning the 
     subjects listed in the statutory definition of labor 
     organization. If parties are burdened with the prospect that 
     any deviation, however temporary, isolated, or unintended, 
     from the discussion of a certain subject, will change a 
     lawful employee participation committee into an unlawfully 
     dominated labor organization, they may reasonably be 
     reluctant to engage in employee participation programs.''

[[Page E618]]

       The Board then noted that employees had initiated the 
     discussion of working conditions which would have argued for 
     a labor organization finding and said the following:
       ``What happened here appears to us to be the kind of 
     situation that is likely to occur when an employer is 
     attempting something new and its supervisors have little or 
     no experience with participation efforts. Absent evidence of 
     a pattern or practice, or of a design to interfere with the 
     organizing efforts of an independent labor organization, we 
     do not think such conduct violates the Act.''
       The labor organization aspect of this issue was also 
     presented in Webcor Packaging, Inc. where a plant council was 
     designed to offer recommendations to management about 
     proposed changes in working conditions, such as wages, and 
     management would consider whether to accept or reject these 
     recommendations. The Board found that the council existed to 
     deal with variety of grievances involving employment 
     conditions including issuing employee vacation paychecks, 
     payment for safety shoes. Unlike the cases which the Board 
     had decided in the `70s in which I found to be appropriate 
     decisions in Keeler Brass, the council had no authority to 
     make decisions on its own. All that was involved was an 
     obligation on the part of management to take the matter under 
     advisement and consider the employee proposal very seriously. 
     Said the Board:
       ``We accordingly conclude that the record evidence 
     establishes that the Plant Council existed for the purpose, 
     at least in part, of following a pattern or practice of 
     making proposals to management which would be considered and 
     accepted or rejected, and that such a pattern in fact 
     occurred.''
       ``Accordingly, the Board found that the council was a labor 
     organization which was ``dealing with'' management. Since the 
     record established that the council was a creation of 
     management and that its structure and function were 
     essentially determined by it, unlawful domination under 
     Section 8(a)(2) was found to exist.''
       In another decision, Vons Grocery Co., the question was 
     whether an employee participation group interfered with the 
     union's role as exclusive bargaining representative. In this 
     case, the employer created an entity known as the Quality 
     Circle Group (QCG). The group dealt with dress code matters 
     and an accident point system for truck drivers, reaching 
     agreement on the former matter. We concluded that there was 
     no pattern of practice of making proposals to management and 
     that the proposals on a dress code and accident point policy 
     were ``. . . an isolated incident in the long life of the 
     QCG.'' And we noted that even in that situation, the union 
     was informed of proposals and brought into consultation 
     before any decision was made. When the union complained about 
     the role of QCG representatives, the employer immediately 
     changed the format so as to include a union steward at each 
     meeting. The Board concluded, in a vein similar to Stoody, 
     that one incident did not make a pattern of practice of 
     dealing with the employer within the meaning of Section 2(5). 
     We thus dealt with this matter in a manner similar to our 
     conclusion in Stoody. We said:
       ``In sum, we do not believe that this one incident [the 
     dress code and accident policy] should transform a lawful 
     employee participation group into a statutory labor 
     organization. We do not believe that what happened here poses 
     the dangers of employer domination of labor organizations 
     that Section 8(a)(2) was designed to prevent.''
       These four December 18 decisions are all compatible with 
     the strong support for employee cooperation that I 
     articulated in my July 14, 1995 concurring opinion in Keller 
     Brass. Acceptance of this approach makes it clear that the 
     TEAM Act, as presently drafted, is unnecessary.
       Nonetheless, as I wrote 3 years ago in Agenda for Reform, a 
     revision of Section 8(a)(2) is desirable. The difficulties 
     involved in determining what constitutes a labor 
     organization, under the Act as written, subjects employees 
     to unnecessary and wasteful litigation and mandates lay 
     people to employ counsel, when they are only attempting to 
     promote dialogue and enhance participation and 
     cooperation.
       The law's insistence upon a demarcation line--a line 
     admittedly made less rigid by the common sense approach that 
     we undertook in both Stoody and Vons Grocery--between 
     management concerns like efficiency on the one hand, and 
     employment conditions on the other, simply does not make 
     sense. The line is synthetic and inconsistent with 
     contemporary realities of the workplace where it is 
     impossible to distinguish between the pace of the work or 
     production standards and quality considerations for which all 
     employees can and should have responsibility.
       Accordingly, Congress and the President should amend 
     Section 8(a)(2) so as to allow all employee committees and 
     councils and quality work circles to function, addressing any 
     and all subjects outside any cloud of illegality--and to 
     allow employers to devise proposals and assist such 
     mechanisms free from liability so long as employee automony 
     is protected and respected. In connection with such employee 
     groups, the Act's prohibition against assistance should be 
     eliminated altogether. In this way, employee participation 
     and involvement would be promoted, sham unions discouraged, 
     and wasteful, sometimes acrimonious litigation about what 
     constitutes a labor organization eliminated. But this is 
     hardly the answer to what ails Section 8(a)(2) set forth in 
     the TEAM Act.
       This was the objective of Congressman Thomas Sawyer's bill 
     which he proposed last fall as a substitute for the TEAM Act. 
     It was designed to encourage productivity and quality teams 
     without opening the door to sham unions--which I believe is a 
     constructive approach.
       We must move beyond the ``them and us'' mentality of an 
     adversarial model which exclude cooperation between employees 
     and management. Employees should be able to collaborate with 
     management in establishing such teams, setting the agenda for 
     meetings, determining voting procedures for election of 
     representatives and on debated issues.
       Only a month ago, in his State of the Union message, 
     President Bill Clinton said:
       When companies and workers work as a team, they do better. 
     And so does America.
       The President's road is the road of dialogue, cooperation 
     and settlement processes rather than litigation. That is the 
     road taken by our small and independent administrative Agency 
     through our new ALJ rules, my concurring opinion in Keeler 
     Brass and our December 18 rulings.

                          ____________________