[House Report 104-248]
[From the U.S. Government Publishing Office]



  

                                                                       
104th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES

 1st Session                                                    104-248
_______________________________________________________________________


 
            TEAMWORK FOR EMPLOYEES AND MANAGERS ACT OF 1995

_______________________________________________________________________


 September 18, 1995.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______


     Mr. Goodling, from the Committee on Economic and Educational 
                 Opportunities, submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 743]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Economic and Educational Opportunities, to 
whom was referred the bill (H.R. 743) 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, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

    The amendment is as follows:
    Strike out all after the enacting clause and insert in lieu 
thereof the following:

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Teamwork for Employees and Managers 
Act of 1995''.

SEC. 2. FINDINGS AND PURPOSES.

    (a) Findings.--Congress finds that--
          (1) the escalating demands of global competition have 
        compelled an increasing number of employers in the United 
        States to make dramatic changes in workplace and employer-
        employee relationships;
          (2) such changes involve an enhanced role for the employee in 
        workplace decisionmaking, often referred to as ``Employee 
        Involvement'', which has taken many forms, including self-
        managed work teams, quality-of-worklife, quality circles, and 
        joint labor-management committees;
          (3) Employee Involvement programs, which operate successfully 
        in both unionized and nonunionized settings, have been 
        established by over 80 percent of the largest employers in the 
        United States and exist in an estimated 30,000 workplaces;
          (4) in addition to enhancing the productivity and 
        competitiveness of businesses in the United States, Employee 
        Involvement programs have had a positive impact on the lives of 
        such employees, better enabling them to reach their potential 
        in the workforce;
          (5) recognizing that foreign competitors have successfully 
        utilized Employee Involvement techniques, the Congress has 
        consistently joined business, labor and academic leaders in 
        encouraging and recognizing successful Employee Involvement 
        programs in the workplace through such incentives as the 
        Malcolm Baldrige National Quality Award;
          (6) employers who have instituted legitimate Employee 
        Involvement programs have not done so to interfere with the 
        collective bargaining rights guaranteed by the labor laws, as 
        was the case in the 1930's when employers established deceptive 
        sham ``company unions'' to avoid unionization; and
          (7) Employee Involvement is currently threatened by legal 
        interpretations of the prohibition against employer-dominated 
        ``company unions''.
  (b) Purposes.--The purpose of this Act is--
          (1) to protect legitimate Employee Involvement programs 
        against governmental interference;
          (2) to preserve existing protections against deceptive, 
        coercive employer practices; and
          (3) to allow legitimate Employee Involvement programs, in 
        which workers may discuss issues involving terms and conditions 
        of employment, to continue to evolve and proliferate.

SEC. 3. EMPLOYER EXCEPTION.

  Section 8(a)(2) of the National Labor Relations Act is amended by 
striking the semicolon and inserting the following: ``: 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 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;''.

SEC. 4. LIMITATION ON EFFECT OF ACT.

  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.

                       Explanation of Amendments

    The provisions of the substitute are explained in this 
report.

                                Purpose

    The purpose of H.R. 743, the Teamwork for Employees and 
Managers (TEAM) Act of 1995, is to amend the National Labor 
Relations Act (NLRA) 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.

                            Committee Action

    H.R. 743 was introduced by Representative Steve Gunderson 
on January 30, 1995, and its cosponsors include every 
Republican Member of the Committee on Economic and Educational 
Opportunities.
    The Subcommittee on Employer-Employee Relations held a 
hearing on removing impediments to employee participation in 
the workplace on February 8, 1995. During this hearing, both 
the general issue of the uses and benefits of employee 
involvement structures and the specific legislative approach to 
clarifying the legality of such techniques provided in H.R. 743 
were discussed. Testimony was received from the Honorable Steve 
Gunderson, Member of Congress, 3rd District of Wisconsin; 
Elaine Jensen, Sylvia Williams, Paul Bohling, and William 
O'Brien of the FMC Corporation of Chicago, Illinois; Mr. 
Charles F. Nielson, Vice President, Human Resources, 
accompanied by Mike Patterson, Shane Jackson, Robert Brooks and 
Ricky Fulks--Process Operators, David Wiggins and Chris Karry--
Technicians, and Ms. Carolyn Manuel--Manufacturing 
Superintendent, of Texas Instruments of Dallas, Texas; Rosemary 
M. Collyer, Esquire, Crowell & Moring, Washington, DC; and 
Judith A. Scott, General Counsel, International Brotherhood of 
Teamsters, testifying on behalf of the AFL-CIO, accompanied by 
Berna Price and Diane Verrette.
    The Committee on Economic and Educational Opportunities 
held a hearing on H.R. 743 on May 11, 1995. At that hearing, 
testimony was received from Mr. Michael P. Morley, Senior Vice-
President and Director of Human Resources, Eastman Kodak 
Company, Rochester, New York (testifying on behalf of the TEAM 
Coalition, Washington, DC); Ms. Julie Smith, Team Advisor, TRW 
Vehicle Safety Systems Inc., Cookeville, Tennessee; Ms. Vicki 
J. McCormick, Human Resource Manager, EFCO Corporation, Monett, 
Missouri--accompanied by Ransom A. Ellis, Jr., Attorney at Law, 
Ellis & Black, Springfield, Missouri, and several EFCO 
employees including J. Mark Hardwick-Senior Buyer, David 
Szydloski-Foreman, David Burton-Project Engineer and Kevin W. 
Brown-Material Coordinator; Mr. David M. Silberman, Director of 
the AFL-CIO Task Force on Labor Law Reform, Washington, DC; and 
Mr. David Brody, Professor Emeritus of History, University of 
California--Davis, Davis, California.
    The Subcommittee on Employer-Employee Relations favorably 
reported H.R. 743, as amended, to the Full Committee on March 
7, 1995, by a vote of 8-4 (1 voting present). On June 22, 1995, 
the Committee on Economic and Educational Opportunities 
approved H.R. 743, as amended, on a voice vote, and, by a vote 
of 22-19, ordered the bill favorably reported.

                               Statement

                              introduction

    H.R. 743, the Teamwork for Employees and Managers (TEAM) 
Act will promote greater employee involvement in the workplace 
by removing impediments under the National Labor Relations Act 
(NLRA). These impediments, largely contained in section 8(a)(2) 
of the Act, were originally targeted at ``company'' unions, but 
actually sweep much broader to ban many cooperative labor-
management efforts. This legislation signals a new era in 
employee relations and recognizes that the best workplaces for 
employees and the most productive workplaces for employers are 
ones where labor and management work together hand in glove. 
The Committee has focused several of its legislative efforts on 
decentralizing decisionmaking in a variety of areas within its 
jurisdiction, and, in the employment arena, employee 
involvement increases local decisionmaking by giving employees 
a voice in how their workplace is structured. In workplaces 
where employee involvement programs have been implemented, 
employees are empowered and can play a role in reaching 
decisions on many aspects of their employment and production 
processes.
    As this nation enters the twenty-first 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 a better place to work. A recent study of 
employees' views in this area indicates that a majority of 
workers want a voice in their workplace and feel that having a 
say in their workplace 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.
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    The TEAM Act would clarify the legality of employee 
involvement structures by amending the NLRA to add a proviso to 
section 8(a)(2) clarifying that it is not impermissible for an 
employer to establish, assist, maintain, or participate in any 
organization or entity of any kind, in which employees 
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. H.R. 743 specifies that the proviso does not apply 
to unionized workplaces, 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 the 
ability of workers to organize and elect union representation.
    The legality of employee involvement and labor-management 
cooperative efforts must be clarified, as these are the kinds 
of management techniques that move U.S. businesses toward the 
high performance workplaces necessary to enable them to compete 
in the increasingly competitive global economy. The broad 
definitions 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 workforce of the early 
twentieth 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. The 
labor law must evolve to adjust to the modern reality where job 
responsibilities overlap and each employee must have a sense 
of, and a voice in, the whole production process. The TEAM Act 
accomplishes this evolution and the Committee fully supports 
its enactment.

                 the importance of employee involvement

    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)).
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    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 twenty 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 utilizing the majority of 
employees to perform a single task, as had been the practice 
under division of labor, companies began instituting a variety 
of programs designed to more broadly involve employees in 
solving problems and making decisions which once were 
exclusively within the realm of management.\4\ 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 have 
frequently resulted in substantial productivity gains, as well 
as increased employee satisfaction.
    \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.
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Current forms of employee involvement

    Employee involvement is not a set ``program'' that is 
easily defined. Rather, it 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 regarding that 
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.\5\
    \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).
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    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 smaller 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 which 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 Decisionmaking 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, communication 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\ Id.
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            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.
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    Again, it is important to note that the examples discussed 
above are intended to provide illustrations of the various ways 
in which employee involvement is 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 offensive 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 by 
granting employees greater involvement in the issues that most 
affect their work lives.'' \12\
    \12\ Id.
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Employee involvement enjoys broad support

    Notwithstanding the contentions of opponents of the TEAM 
Act, employee involvement enjoys wide-spread and ever-
increasing support among employees, employers, academics and 
policy-makers.
    In testimony before the Committee on Economic and 
Educational Opportunities, Ms. Julie Smith, a Team Advisor and 
hourly employee at TRW Vehicle Safety Systems described her 
company's use of employee involvement:

          Our teams are involved in all aspects of the plant. 
        We are instrumental in redesigning work space and 
        manufacturing equipment when a new product line is 
        opened. We address health and safety issues, and 
        ergonomics. We develop methods of reducing scrap and 
        improving our effectiveness. We decide what changes 
        need to be made, we participate in driving the change 
        and making sure it happens in a timely manner. Our 
        ideas are listened to and we make a difference.\13\
    \13\ Hearing on H.R. 743, ``The Teamwork for Employees and Managers 
(TEAM) Act'' Before the House Committee on Economic and Educational 
Opportunities, 104th Cong., 1st Sess. at 24 (May 11, 1995) (statement 
of Julie Smith, Team Advisor, TRW Vehicle Safety Systems, Inc.).

    But, perhaps more important than Ms. Smith's description of 
the ways in which her company uses employee involvement is her 
description of the ways she and her fellow employees have 
---------------------------------------------------------------------------
responded to its use:

          At Cookeville, we don't have time clocks. People come 
        to work to use their minds as well as their heads. We 
        look forward to starting our day, and when we go home, 
        we feel good about what we've done because we know that 
        we've had a direct influence on the decisions that 
        affect our work environment.\14\
    \14\ Id. at 22.

    Senior management has voiced similarly enthusiastic support 
for employee involvement. This sentiment is perhaps best 
reflected in the testimony of Howard V. Knicely, Executive Vice 
President, TRW Vehicle Safety Systems before the Committee on 
Economic and Educational Opportunities Subcommittee on 
---------------------------------------------------------------------------
Employer-Employee Relations:

          In my company, as in most others, technology is being 
        acquired in numerous ways--capital can be raised 
        wherever the financial market is most attractive. 
        However, the single most competitive advantage we have 
        that cannot be acquired or copied is a well-trained, 
        highly motivated, and involved work force. This is our 
        hope for the 90s. Employee involvement is and must be a 
        win-win strategy in all segments of our industrial 
        policy.\15\
    \15\ Hearing on ``Removing Impediments to Employee Participation/
Electromation'' Before the Subcommittee on Employer-Employee Relations 
of the House Committee on Economic and Educational Opportunities, 104th 
Cong., 1st Sess. at 44 (Feb. 8, 1995) (statement of Howard V. Knicely, 
Executive Vice President, TRW Vehicle Safety Systems, Inc.).

    While some in academia have voiced concern about the 
potential impact of H.R. 743, others have acknowledged the 
fundamental changes in labor-management relations that brought 
about its introduction and are extremely supportive of the 
specific goals it seeks to achieve. As noted by Professor 
---------------------------------------------------------------------------
Samuel Estreicher:

          Competitive pressures on U.S. firms from a variety of 
        sources--the emergence of international product 
        markets, deregulation of air and truck transport and 
        telecommunications, technological advances that reduce 
        the advantages of local firms, and capital market 
        forces that require enhancement of shareholder values--
        are undermining Taylorist conceptions of how best to 
        utilize front-line workers.\16\
    \16\ Samuel Estreicher, ``Employee Involvement and the `Company 
Union' Prohibition: The Case for Partial Repeal of Section 8(a)(2) of 
the NLRA,'' 6 N.Y.U. L.Rev. 125, 135 (1994).

    With regard to employee involvement and its relationship to 
---------------------------------------------------------------------------
the modern workplace, Professor Estreicher notes:

          Worker participation is a desirable goal whether or 
        not it increases the demand for independent 
        representation, as long [as] it does not prevent 
        workers from effectively choosing for themselves how 
        best to advance their interests in the workplace. 
        Because employee involvement programs can enhance 
        opportunities for worker participation and improve firm 
        performance without foreclosing other options, legal 
        restrictions should be lifted. (emphasis added) \17\
    \17\ Id. at 158.

    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 of 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.'' \18\ Perhaps 
more importantly, the President's Commission concluded,
    \18\ Commission on the Future of Worker-Management Relations: 
Report and Recommendations, Dep't of Labour 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. (emphasis added) \19\
    \19\ Id.

    Similarly, Secretary of Labor, Robert B. Reich, has also 
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.\20\
    \20\ 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 has 
recently issued a publication to American businesses which 
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underscores the benefits derived from 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 plan work flows and 
        design or adopt more efficient production methods; and 
        they ensure high levels of safety and health.\21\
    \21\ See ``Road to High-Performance Workplaces: A Guide to Better 
Jobs and Better Business Results,'' U.S. Department of Labor, September 
1994.
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Employee involvement works

    Employee involvement as a means of promoting the 
competitiveness of American business is a central concept in 
contemporary U.S. labor-management relations. Indeed, during 
the past twenty years, employee involvement has emerged as the 
most dramatic development in human resources management.
    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.\22\ 
It is estimated that as many as 30,000 employers currently 
employ some form of employee involvement or participation.
    \22\ 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.
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    The success of employee involvement can also be found in 
the views of American workers. As noted previously, 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 benefitted'' 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.\23\
    \23\ ``Worker Representation and Participation Survey,'' Richard B. 
Freeman and Joel Rogers, Conducted by Princeton Survey Research 
Associates, December 1994.
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    Clearly, employee involvement is more than just another 
passing trend in human resources management. Over the last 
twenty 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 
business must be allowed to use employee involvement in order 
to more effectively utilize its most valuable resource--the 
American worker.

Electromation and aftermath signal need for clarification

    On December 16, 1992, the National Labor Relations Board 
(NLRB) issued a decision in Electromation, Inc.,\24\ a case 
which many thought would provide the Board an opportunity to 
clarify the legality \25\ of employee involvement structures 
which are increasingly a part of modern work life. 
Electromation involved several employee participation 
committees, which were organized around various workplace 
issues, established within a small, nonunion company. The 
committees were established, unrelated to any organizing 
effort,\26\ in response to employees' objections to several 
changes in attendance and wage policies proposed by the 
company. The so-called ``action committees'' were formed to 
address several 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.
    \24\ 309 NLRB No. 163 (1992).
    \25\ The two provisions of the National Labor Relations Act most 
directly at issue in the debate over the legality of employee 
involvement structures are section 2(5) and section 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.''
    \26\ 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.
---------------------------------------------------------------------------
    In order to determine if the company had committed an 
unfair labor practice under the NLRA, the Board had to first 
consider whether the action committees were ``labor 
organizations'' under the Act. The Act's definition of ``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.'' \27\ The interpretation of this 
definition by the courts has added to its breadth as the 
Supreme Court has held that the term ``dealing with employers'' 
is not limited to collective bargaining situations, but is a 
much broader concept.\28\ Working with this wide-ranging 
definition, the NLRB determined that the committees were 
``labor organizations'' within the meaning of the National 
Labor Relations Act.
    \27\ Section 2(5) of the NLRA.
    \28\ See National Labor Relations Board v. Cabot Carbon Co., 360 
U.S. 203 (1959).
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    The Board next turned to the question of the company's role 
in the establishment and operation of the action committees and 
considered whether the company had ``dominated'' or 
``interfered with'' the committees. Under section 8(a)(2) of 
the Act, it is an unfair labor practice by 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 in violation of section 8(a)(2) 
because of its primacy in setting the size, responsibilities 
and goals of the committees, and in selecting the final makeup 
and initial dates for meetings. The Electromation decision was 
later affirmed by the Seventh Circuit Court of Appeals.\29\
    \29\ Electromation, Inc. v. National Labor Relations Board, 35 F.3d 
1148 (7th Cir. 1994).
---------------------------------------------------------------------------
    The need for clarification of the legality of employee 
involvement structures has since moved far beyond the specific 
facts of the Electromation decision. The breadth of the 
relevant provisions of the NLRA combined with the confusion 
created by the four opinions in the decision have left the 
myriad employers and employees attempting to establish 
cooperative arrangements in the workplace 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: \30\
    \30\ Much has been made by opponents of H.R. 743 of the relatively 
small number of charges filed with the Board alleging a violation of 
section 8(a)(2). First and foremost, the NLRB process is wholly 
complaint driven and there is obviously a diminished incentive for 
employees to challenge workplace structures which effectively meet 
their interest in having greater involvement in workplace 
decisionmaking. Furthermore, the relative absence of litigation should 
not be the criteria by which the need for clarifying the legality of 
employee involvement programs is judged. An obvious and primary problem 
is the chilling effect that the Electromation decision has had on 
legitimate employee involvement programs and on employers' plans to 
expand such programs.
---------------------------------------------------------------------------
          Donnelly Corporation: \31\ 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 has nonetheless issued a complaint 
        against Donnelly charging that its employee involvement 
        structure violates section 8(a)(2). The irony is 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, felt the Donnelly 
        system was a violation of section 8(a)(2), and thus 
        filed the initial charge.\32\
    \31\ GR-7-CA-36843.
    \32\ 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 is scheduled for October 26, 
1995.
---------------------------------------------------------------------------
          Polaroid Corporation: \33\ Also cited as One of the 
        Best 100 Companies to Work for In America, the Polaroid 
        Corporation 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 1990's to reconstitute 
        its successful committees to comply with section 
        8(a)(2), a complaint was issued by the Board's General 
        Counsel challenging even the new structure which 
        removed all decisionmaking authority from the 
        employees. A hearing was scheduled on the complaint 
        this summer and Polaroid is awaiting the decision from 
        the Administrative Law Judge.
    \33\ 1-CA-29966.
---------------------------------------------------------------------------
          EFCO Corporation: \34\ The EFCO Corporation 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.\35\ Although 
        acknowledging EFCO's commitment to employee 
        empowerment, the Administrative Law Judge nonetheless 
        found that the committees were ``labor organizations'' 
        and that the company had illegally dominated them 
        because of its role in establishing the committees, 
        choosing initial members, participating in meetings, 
        and setting topics for discussion. EFCO plans to appeal 
        the ALJ decision to the full Board.
    \34\ 17-CA-16911 (March 7, 1995).
    \35\ 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: \36\ In the most 
        recent ruling on the legality of employee involvement 
        structures, a unanimous NLRB has ordered Keeler Brass 
        Automotive Group to disband a grievance committee 
        established for several of its plants. The Board, 
        reversing the decision by the Administrative Law Judge, 
        found that Keeler Brass had unlawfully dominated the 
        formation of the committee and had 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.
    \36\ 317 NLRB No. 161 (June 14, 1995).
---------------------------------------------------------------------------
    Suffice to say that the Board's interpretation of the 
interrelationship between the broad definition of ``labor 
organization,'' which sweeps in many employee participation 
programs, and the strict limits on the role of employers in 
such organizations, makes it a very treacherous road to 
navigate for companies who want to institutionalize some form 
of labor-management cooperation.

           THE CURRENT PROHIBITIONS IN THE NLRA ARE TOO BROAD

    A brief examination of the history of the prohibition in 
section 8(a)(2) demonstrates both why the stricture was 
originally crafted so broadly and why such breadth interferes 
with the preferred method of labor-management organization in 
many U.S. businesses today. In 1935, when Congress passed the 
National Labor Relations Act (NLRA), the so-called Wagner 
Act,\37\ 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.'' \38\ 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.
    \37\ Senator Robert Wagner was the prime sponsor of the bill which 
became the National Labor Relations Act (NLRA).
    \38\ National Industrial Recovery Act, 48 Stat. 195, 198 (1933) 
(the rights established by the Recovery Act had only temporary effect, 
because section 2(c) 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 ground 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.\39\ Further, the Act did not 
specifically prohibit company unions, although it prohibited 
employers from requiring employees to join a company union as a 
condition of employment.\40\ Lastly, the Act granted employees 
the right to organize, but did not specify ``the kind of 
organization, if any, with which employees should affiliate.'' 
\41\ Thus, consistent with the Recovery Act, an 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.\42\
    \39\ Hardin, Patrick, ``The Developing Labor Law'' (3d ed. 1992), 
vol. 1 at 25-26.
    \40\ National Industrial Recovery Act, 48 Stat. 195, 198-99 (1933).
    \41\ I. Bernstein, ``Turbulent Years'' 38 (1970).
    \42\ Hardin, supra note 39, 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.'' 
\43\ According to an article printed in the New York Times 
during debate over the NLRA, the number of employees in company 
unions had increased from 432,000 in 1932, before passage of 
the Recovery Act, to 1,164,000 just one year later.\44\ 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.\45\ The magnitude of this problem following 
passage of the Recovery Act is 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.\46\
    \43\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, ``Legislative 
History of the National Labor Relations Act,'' 1935, at 15 (1949).
    \44\ Wagner, Robert. ``Company Unions: A Vast Industrial Issue,'' 
The New York Times, Mar. 11, 1934.
    \45\ Id.
    \46\ Wagner, Robert. ``Company Unions: A Vast Industrial Issue,'' 
The New York Times, Mar. 11, 1934.
---------------------------------------------------------------------------
    Prior to passage of the NLRA then, employers did use 
company unions as a tool to avoid collective bargaining with 
independently organized unions and to control what collective 
bargaining 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 stated in a discussion regarding the 
advantages and disadvantages of company unions 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.'' \47\ He 
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.'' \48\ 
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 employer-employee organizations in 
general.
    \47\ Id.
    \48\ 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).
---------------------------------------------------------------------------
    Further debate over the proposed scope of section 8(a)(2) 
confirms 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 . . 
.'' \49\ 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 
states that ``these 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.'' \50\
    \49\ 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.
    \50\ 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.'' \51\ Thus, 
analysis of the legislative history of the NLRA suggests that 
Congress strongly desired to prevent employers from using 
company unions as an obstacle to collective bargaining, again 
while leaving intact organizations intended to promote 
employer-employee communication and cooperation.
    \51\ 78 Cong. Rec. 10,559 (1934) reprinted in 1 NLRB, ``Legislative 
History of the National Labor Relations Act,'' 1935, at 1125 (1949).
---------------------------------------------------------------------------
    The broad language of section 8(a)(2) does not seem 
consistent with a Congressional desire to prohibit only 
employer-employee organizations which would inhibit recognition 
of, and collective bargaining with, independent unions. 
However, the Congress' experience with narrow interpretations 
by the courts of labor relations legislation prior to enactment 
of the NLRA may explain why Congress drafted section 8(a)(2) 
broadly. Specifically, in the decades preceding enactment of 
the NLRA, Congress had enacted various measures designed 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.\52\ Of these, 
the Clayton Act and the Norris-LaGuardia Act were broadest in 
their scope of coverage.\53\
    \52\ Hardin, supra note 39, at 12-24 (providing a historical 
background to the National Labor Relations Act).
    \53\ The Erdman Act and the Railway Labor Act were limited in scope 
to employees engaged in the operation of interstate trains. Hardin, 
supra note 39, 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 
interstate commerce, were in violation of the Act.\54\ Section 
6 of the Clayton Act was designed to prevent application of the 
Sherman Act to organized labor ``by providing that labor itself 
is not `an article of commerce.' '' \55\ The section also 
specified that labor organizations do not violate antitrust 
laws by ``lawfully carrying out'' their ``legitimate 
objectives.'' \56\ 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.\57\ The 
second paragraph of section 20 lists and describes several 
labor activities and provides that ``none of these activities 
shall `be considered or held to be violations of any law of the 
United States,' '' and prohibits enjoining those activities 
even if the requirements of the first paragraph are met.\58\ 
Thus, Congress attempted to allow the development of organized 
labor through language in the Clayton Act which specifically 
prohibited various types of interference with organized labor.
    \54\ Hardin, supra note 39, at 9-10, 16.
    \55\ Hardin, supra, at 16.
    \56\ Id.
    \57\ 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 39, at 
16-17.
    \58\ Hardin, supra note 39, at 17.
---------------------------------------------------------------------------
    Despite the seemingly broad scope of sections 6 and 20 of 
the Clayton Act, however, 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.\59\ 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.\60\ Thus, the Court interpreted the Clayton Act as 
having minimal impact on barriers to union development and 
activity, despite statutory language which would suggest 
otherwise.
    \59\ Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921) 
(construed in Hardin, supra note 39, at 18).
    \60\ Id.
---------------------------------------------------------------------------
    Given the Court's narrow interpretation of the Clayton Act, 
and the failure of the Recovery Act to ensure the rights to 
organize and bargain collectively, it is not surprising that 
Congress drafted section 8(a)(2) of the NLRA broadly.\61\ Prior 
to the period in which the NLRA was enacted, courts greatly 
resisted any efforts designed to allow the growth of organized 
labor and collective bargaining.\62\ Thus, in order to ensure 
employees the rights to organize and bargain collectively, 
Congress was compelled to expansively craft the prohibition in 
section 8(a)(2) of the NLRA.
    \61\ The definitional provisions in section 13 of the Norris-
LaGuardia Act were also drafted broadly, again demonstrating Congress' 
tendency towards drafting pro-labor acts broadly in this period. 
Hardin, supra note 39, at 23-24.
    \62\ Hardin, supra note 39, at ch. 1.
---------------------------------------------------------------------------
    As the previous discussion of the expansive use of various 
forms of employee involvement and labor-management cooperation 
indicates, a broad-sweeping prohibition of all employer-
employee organizations no longer serves the interests of giving 
employees an effective voice in their workplace. While the 
right to independent representation will always remain one of 
the bedrock principles of the NLRA, as this nation approaches 
the twenty-first century, nothing about modern employee 
involvement interferes with that right. Like all aspects of 
society, the workplace of today is very different than it was 
sixty years ago. In 1935, organized labor was still in its 
formational stages and much more at the mercy of employers 
intent on derailing its development. The myriad labor 
protections that are on the books today--from the Fair Labor 
Standards Act to the Occupational Safety and Health Act to the 
Worker Adjustment and Retraining Notification (WARN) Act to 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 twentieth century. 
The workforce 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 
sixty 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.

The Team Act legalizes employee involvement: Company unions are still 
        prohibited

    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 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 the NLRA for a wide range of employee involvement 
structures where managers and workers can discuss the myriad 
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 individuals' employment in those 
processes. Lawrence Gold, General Counsel of the AFL-CIO, 
perhaps described this reality best when he argued before the 
Board:

          What is productivity? It's who does what, its 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.\63\
    \63\ Transcript of Proceedings Before the National Labor Relations 
Board in Electromation, Inc. (Case No. 25-CA-19818) 61-62 (Sept. 5, 
1991).

    Indeed, the truth of the matter is that if employee 
involvement structures 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 ranging from 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.\64\ If it is even possible, requiring 
employee involvement structures to narrowly focus on issues 
unrelated to conditions of work limits 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 non-pecuniary satisfaction 
of the workforce.
    \64\ See Hardin, supra note 39, 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). Importantly, the bill provides that employee 
involvement structures 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 structures from the company 
unions of yesteryear that section 8(a)(2) was designed to 
prohibit. Even after enactment of H.R. 743, such company unions 
would continue to be unlawful under section 8(a)(2).
    For example, in National Labor Relations Board v. Lane 
Cotton Mills,\65\ a violation of 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 because management treated the welfare association 
as the exclusive bargaining representative, conduct 
specifically prohibited by H.R. 743.\66\ Similarly, in 
Solmica,\67\ 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.
    \65\ 111 F.2d 814 (5th Cir. 1940).
    \66\ See also, National Labor Relations Board v. Link-Belt Co., 61 
S. Ct. 358 (1941), American Tara Corp., 242 NLRB 1230 (1979).
    \67\ 199 NLRB 224 (1972).
---------------------------------------------------------------------------
    While opponents of the TEAM Act have argued that many of 
the 1930s ``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).\68\
    \68\ ``BLS Survey'' at 84.
---------------------------------------------------------------------------
    Even if some of the characteristics of company unions are 
shared by today's employee involvement structures, there is a 
critical distinction. Unlike company unions, legitimate 
employee involvement structures 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 
alternatives to labor unions. However, as discussed previously, 
they rarely possessed the essential characteristics of a 
genuine collective bargaining representative.
    Under H.R. 743, 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 H.R. 743, 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 a 
violation under this paragraph for an employer'' to establish 
and participate in an employee involvement structure. [Emphasis 
added.] H.R. 743 also specifically provides in section four 
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 freely choose independent representation remain 
in full force. If employee involvement structures do not prove 
to be an effective means for employees to have input into the 
production and management policies that impact them, those 
employees have every right, and every reason, to formally 
organize. 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.\69\ Employee involvement structures 
cannot be used to interfere with employees' ability to freely 
exercise section 7 rights.\70\
    \69\ 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 of his or her membership 
in a labor organization.
    \70\ In Stone Forest Industries, Inc., 36-CA-6938 (March 17, 1995), 
it was found 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.
---------------------------------------------------------------------------
    H.R. 743 was amended in Committee to clarify that the 
amendment to section 8(a)(2) contained in the TEAM Act does not 
apply in cases in which a labor organization is the 
representative of such employees as provided in section 9(a) of 
the NLRA. This amendment was intended to mollify concerns that 
H.R. 743 would permit employers to use employee involvement 
structures as a means to avoid their obligation to bargain 
collectively with a labor organization. As an initial matter, 
the bill, as introduced, was not intended to alter in any way 
an employer's obligation under section 8(a)(5) to bargain with 
the duly elected representatives of employees.\71\ However, the 
amendment adopted in Committee makes it absolutely clear that 
the safe harbor created in the TEAM Act for certain employee 
involvement structures does not immunize an employer from the 
prohibition against directly dealing with employees who are 
represented by a labor union. In fact, as a practical matter, 
if employers and employees in a unionized workplace want to 
initiate some type of employee involvement structure, the union 
essentially has a veto power over the very establishment of 
such a structure.
    \71\ H.R. 743, either as it was introduced or as it was reported by 
the Committee, is not intended to overrule or alter the NLRB's decision 
in E.I. du Pont de Nemours & Co., 311 NLRB No. 88 (1993).
---------------------------------------------------------------------------
    In sum, H.R. 743 creates a safe harbor in the NLRA for a 
broad range of employee involvement structures which have an 
infinite variety of organizational characteristics and which 
deal with a broad spectrum of workplace issues. However, this 
safe harbor exists only to the extent that an employer's 
dominance or interference with respect to such structures is 
being judged in the context of section 8(a)(2). The legality of 
the establishment or use of such structures in the context of 
any other potential violation of the Act remains unaffected.

                               conclusion

    The Committee has placed the highest priority on the 
enactment of H.R. 743. 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 was enacted. 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-added each employee brings to the production 
process and the job satisfaction that each employee derives 
from the workplace.
    This nation's labor law must be relevant to the employer-
employee relationships of the twenty-first century. The 
Committee feels strongly that the amendments to the NLRA 
contemplated by the TEAM Act are crucial and 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 H.R. 743, an employee involvement structure may not 
engage in collective bargaining nor may it act as the exclusive 
representative of employees. 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.
    The bill makes it clear that employers can work together 
with their employees to confront and solve the myriad problems 
and issues that arise in a workplace. To allow otherwise would 
stand in the way of cutting edge human resource management that 
offers business the opportunity to make an investment in the 
human potential of the American workforce that will yield 
untold dividends for this nation.

                                Summary

    H.R. 743 would amend the National Labor Relations Act 
(NLRA) 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-by-Section Analysis

                              section one

    Provides that the short title of the bill is the ``Teamwork 
for Employees and Managers Act of 1995.''

                              section two

    Establishes the findings by the Congress related to the 
escalating demands of global competition, the resulting need 
for an enhanced role for employees in workplace decisionmaking, 
the extensive use by employers of employee involvement 
techniques, the positive impact of and support for employee 
involvement, and the legal jeopardy for employers engaging in 
employee involvement.
    Also provides that 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 three

    Amends section 8(a)(2) of the National Labor Relations Act 
(NLRA) to provide that it 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 address matters 
of mutual interest, including, but not limited to, issues of 
quality, productivity, efficiency, and safety and health. 
Provides that such organizations or entities 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. Also provides that the 
amendment to section 8(a)(2) does not apply in cases in which a 
labor organization is the representative of such employees as 
provided in section 9(a) of the NLRA.

                              section four

    Provides that nothing in the Act shall affect employee 
rights and responsibilities contained in provisions other than 
section 8(a)(2) of the NLRA.

                  Oversight Findings of the Committee

    In compliance with clause 2(l)(3)(A) of rule XI of the 
Rules of the House of Representatives and clause 2(b)(1) of 
rule X of the Rules of the House of Representatives, the 
Committee's oversight findings and recommendations are 
reflected in the body of this report.

                     Inflationary Impact Statement

    In compliance with clause 2(l)(4) of rule XI of the Rules 
of the House of Representatives, the Committee estimates that 
the enactment into law of H.R. 743 will have no significant 
inflationary impact on prices and costs in the operation of the 
national economy. It is the judgment of the Committee that the 
inflationary impact of this legislation as a component of the 
federal budget is negligible.

                    Government Reform and Oversight

    With respect to the requirement of clause 2(l)(3)(D) of 
rule XI of the Rules of the House of Representatives, the 
Committee has received no report of oversight findings and 
recommendations from the Committee on Government Reform and 
Oversight on the subject of H.R. 743.

                           Committee Estimate

    Clause 7 of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs which would be incurred in carrying out 
H.R. 743. However, clause 7(d) of that rule provides that this 
requirement does not apply when the Committee has included in 
its report a timely submitted cost estimate of the bill 
prepared by the Director of the Congressional Budget Office 
under section 403 of the Congressional Budget Act of 1974.

                Application of Law to Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch. This bill would clarify the legality of employee 
involvement programs in workplaces covered by the National 
Labor Relations Act and as such has no application to the 
legislative branch.

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act requires a statement of whether the provisions of 
the reported bill include unfunded mandates. This bill would 
clarify the legality of employee involvement programs in 
workplaces covered by the National Labor Relations Act and as 
such does not contain any unfunded mandates.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirement of clause 2(l)(3)(B) of 
rule XI of the House of Representatives and section 308(a) of 
the Congressional Budget Act of 1974 and with respect to 
requirements of clause 2(l)(3)(C) of rule XI of the House of 
Representatives and section 403 of the Congressional Budget Act 
of 1974, the Committee has received the following cost estimate 
for H.R. 743 from the Director of the Congressional Budget 
Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 28, 1995.
Hon. William F. Goodling,
Chairman, Committee on Economic and Educational Opportunities, House of 
        Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed H.R. 743, the Teamwork for Employees and Mangers Act 
of 1995, as ordered reported by the Committee on Economic and 
Educational Opportunities on June 22, 1995. CBO estimates that 
enactment of H.R. 743 would have no significant effects on the 
federal budget and no impact on the budgets of state and local 
governments. Because enactment of H.R. 743 would not affect 
direct spending or receipts, pay-as-you-go procedures would not 
apply.
    H.R. 743 would amend the National Labor Relations Act to 
allow employers to establish or participate in organizations in 
which employees participate, to address matters of mutual 
interest, so long as these organizations do not seek authority 
to negotiate or enter into collective bargaining agreements 
with the employer. The bill could affect the workload and costs 
of the National Labor Relations Board by increasing or 
decreasing its investigations of employers' involvement in 
employee organizations. We anticipate that such effects, if 
any, would not be significant.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley.
            Sincerely,
                                              James L. Blum
                                             (For June E. O'Neill).

                            Roll Call Votes

    Roll Call No. 1 (by Mr. Sawyer): An amendment in the nature 
of a substitute attempting to establish specific conditions 
under which employee involvement structures would be 
permissible and delineating specific situations where it would 
be impermissible. Defeated by a vote of 16-24, with 1 Member 
voting Present.

------------------------------------------------------------------------
                  Member                      Aye       No      Present 
------------------------------------------------------------------------
Chairman Goodling........................  ........        X   .........
Mr. Petri................................  ........        X   .........
Mrs. Roukema.............................  ........  ........  .........
Mr. Gunderson............................  ........        X   .........
Mr. Fawell...............................  ........        X   .........
Mr. Ballenger............................  ........        X   .........
Mr. Barrett..............................  ........        X   .........
Mr. Cunningham...........................  ........        X   .........
Mr. Hoekstra.............................  ........        X   .........
Mr. McKeon...............................  ........        X   .........
Mr. Castle...............................  ........        X   .........
Mrs Meyers...............................  ........        X   .........
Mr. Johnson..............................  ........        X   .........
Mr. Talent...............................  ........        X   .........
Mr. Greenwood............................  ........        X   .........
Mr. Hutchinson...........................  ........        X   .........
Mr. Knollenberg..........................  ........        X   .........
Mr. Riggs................................  ........        X   .........
Mr. Graham...............................  ........        X   .........
Mr. Weldon...............................  ........        X   .........
Mr. Funderburk...........................  ........        X   .........
Mr. Souder...............................  ........        X   .........
Mr. McIntosh.............................  ........        X   .........
Mr. Norwood..............................  ........        X   .........
Mr. Clay.................................        X   ........  .........
Mr. Miller...............................        X   ........  .........
Mr. Kildee...............................        X   ........  .........
Mr. Williams.............................        X   ........  .........
Mr. Martinez.............................        X   ........  .........
Mr. Owens................................        X   ........  .........
Mr. Sawyer...............................        X   ........  .........
Mr. Payne................................        X   ........  .........
Mrs. Mink................................        X   ........  .........
Mr. Andrews..............................        X   ........  .........
Mr. Reed.................................        X   ........  .........
Mr. Roemer...............................        X   ........  .........
Mr. Engel................................  ........        X   .........
Mr. Becerra..............................  ........  ........         X 
Mr. Scott................................        X   ........  .........
Mr. Green................................        X   ........  .........
Ms. Woolsey..............................        X   ........  .........
Mr. Romero-Barcelo.......................        X   ........  .........
Mr. Reynolds.............................  ........  ........  .........
                                          ------------------------------
      Totals.............................       16        24          1 

    Roll Call No. 2 (by Mr. Miller): An amendment relating to 
expedited relief in cases where discrimination on the basis of 
union membership is alleged. Defeated by a vote of 16-23.

------------------------------------------------------------------------
                  Member                      Aye       No      Present 
------------------------------------------------------------------------
Chairman Goodling........................  ........        X   .........
Mr. Petri................................  ........        X   .........
Mrs. Roukema.............................  ........  ........  .........
Mr. Gunderson............................  ........        X   .........
Mr. Fawell...............................  ........        X   .........
Mr. Ballenger............................  ........        X   .........
Mr. Barrett..............................  ........        X   .........
Mr. Cunningham...........................  ........        X   .........
Mr. Hoekstra.............................  ........        X   .........
Mr. McKeon...............................  ........        X   .........
Mr. Castle...............................  ........        X   .........
Mrs. Meyers..............................  ........        X   .........
Mr. Johnson..............................  ........        X   .........
Mr. Talent...............................  ........        X   .........
Mr. Greenwood............................  ........        X   .........
Mr. Hutchinson...........................  ........        X   .........
Mr. Knollenberg..........................  ........        X   .........
Mr. Riggs................................  ........        X   .........
Mr. Graham...............................  ........        X   .........
Mr. Weldon...............................  ........        X   .........
Mr. Funderburk...........................  ........        X   .........
Mr. Souder...............................  ........        X   .........
Mr. McIntosh.............................  ........        X   .........
Mr. Norwood..............................  ........        X   .........
Mr. Clay.................................        X   ........  .........
Mr. Miller...............................        X   ........  .........
Mr. Kildee...............................        X   ........  .........
Mr. Williams.............................        X   ........  .........
Mr. Martinez.............................        X   ........  .........
Mr. Owens................................        X   ........  .........
Mr. Sawyer...............................        X   ........  .........
Mr. Payne................................        X   ........  .........
Mrs. Mink................................        X   ........  .........
Mr. Andrews..............................        X   ........  .........
Mr. Reed.................................        X   ........  .........
Mr. Roemer...............................  ........  ........  .........
Mr. Engel................................        X   ........  .........
Mr. Becerra..............................        X   ........  .........
Mr. Scott................................        X   ........  .........
Mr. Green................................        X   ........  .........
Ms. Woolsey..............................        X   ........  .........
Mr. Romero-Barcelo.......................  ........  ........  .........
Mr. Reynolds.............................  ........  ........  .........
                                          ------------------------------
      Totals.............................       16        23   .........
------------------------------------------------------------------------

    Roll Call No. 3 (offered by Mrs. Mink): An amendment 
relating to application of the Act in the context of union 
organizing campaigns. Defeated by a vote of 18-20.

------------------------------------------------------------------------
                  Member                      Aye       No      Present 
------------------------------------------------------------------------
Chairman Goodling........................  ........        X   .........
Mr. Petri................................  ........        X   .........
Mrs. Roukema.............................  ........  ........  .........
Mr. Gunderson............................  ........        X   .........
Mr. Fawell...............................  ........        X   .........
Mr. Ballenger............................  ........        X   .........
Mr. Barrett..............................  ........        X   .........
Mr. Cunningham...........................  ........        X   .........
Mr. Hoekstra.............................  ........        X   .........
Mr. McKeon...............................  ........        X   .........
Mr. Castle...............................  ........        X   .........
Mrs. Meyers..............................  ........        X   .........
Mr. Johnson..............................  ........  ........  .........
Mr. Talent...............................  ........        X   .........
Mr. Greenwood............................  ........  ........  .........
Mr. Hutchinson...........................  ........        X   .........
Mr. Knollenberg..........................  ........        X   .........
Mr. Riggs................................  ........  ........  .........
Mr. Graham...............................  ........        X   .........
Mr. Weldon...............................  ........        X   .........
Mr. Funderburk...........................  ........        X   .........
Mr. Souder...............................  ........        X   .........
Mr. McIntosh.............................  ........        X   .........
Mr. Norwood..............................  ........        X   .........
Mr. Clay.................................        X   ........  .........
Mr. Miller...............................        X   ........  .........
Mr. Kildee...............................        X   ........  .........
Mr. Williams.............................        X   ........  .........
Mr. Martinez.............................        X   ........  .........
Mr. Owens................................        X   ........  .........
Mr. Sawyer...............................        X   ........  .........
Mr. Payne................................        X   ........  .........
Mrs. Mink................................        X   ........  .........
Mr. Andrews..............................        X   ........  .........
Mr. Reed.................................        X   ........  .........
Mr. Roemer...............................        X   ........  .........
Mr. Engel................................        X   ........  .........
Mr. Becerra..............................        X   ........  .........
Mr. Scott................................        X   ........  .........
Mr. Green................................        X   ........  .........
Ms. Woolsey..............................        X   ........  .........
Mr. Romero-Barcelo.......................        X   ........  .........
Mr. Reynolds.............................  ........  ........  .........
                                          ------------------------------
      Totals.............................       18        20   .........
------------------------------------------------------------------------

    Roll Call No. 4 (by Mr. Green): An amendment relating to 
access of labor organizations and cease and desist orders where 
violations occur. Defeated by a vote of 18-20.

------------------------------------------------------------------------
                  Member                      Aye       No      Present 
------------------------------------------------------------------------
Chairman Goodling........................  ........        X   .........
Mr. Petri................................  ........        X   .........
Mrs. Roukema.............................  ........  ........  .........
Mr. Gunderson............................  ........        X   .........
Mr. Fawell...............................  ........        X   .........
Mr. Ballenger............................  ........        X   .........
Mr. Barrett..............................  ........        X   .........
Mr. Cunningham...........................  ........        X   .........
Mr. Hoekstra.............................  ........        X   .........
Mr. McKeon...............................  ........        X   .........
Mr. Castle...............................  ........        X   .........
Mrs. Meyers..............................  ........        X   .........
Mr. Johnson..............................  ........  ........  .........
Mr. Talent...............................  ........        X   .........
Mr. Greenwood............................  ........  ........  .........
Mr. Hutchinson...........................  ........        X   .........
Mr. Knollenberg..........................  ........        X   .........
Mr. Riggs................................  ........  ........  .........
Mr. Graham...............................  ........        X   .........
Mr. Weldon...............................  ........        X   .........
Mr. Funderburk...........................  ........        X   .........
Mr. Souder...............................  ........        X   .........
Mr. McIntosh.............................  ........        X   .........
Mr. Norwood..............................  ........        X   .........
Mr. Clay.................................        X   ........  .........
Mr. Miller...............................        X   ........  .........
Mr. Kildee...............................        X   ........  .........
Mr. Williams.............................        X   ........  .........
Mr. Martinez.............................        X   ........  .........
Mr. Owens................................        X   ........  .........
Mr. Sawyer...............................        X   ........  .........
Mr. Payne................................        X   ........  .........
Mrs. Mink................................        X   ........  .........
Mr. Andrews..............................        X   ........  .........
Mr. Reed.................................        X   ........  .........
Mr. Roemer...............................        X   ........  .........
Mr. Engel................................        X   ........  .........
Mr. Becerra..............................        X   ........  .........
Mr. Scott................................        X   ........  .........
Mr. Green................................        X   ........  .........
Ms. Woolsey..............................        X   ........  .........
Mr. Romero-Barcelo.......................        X   ........  .........
Mr. Reynolds.............................  ........  ........  .........
                                          ------------------------------
      Totals.............................       18        20   .........
------------------------------------------------------------------------

    Roll Call No. 5 (by Mr. Petri): Motion to favorably report 
the bill to the House with an amendment in the nature of a 
substitute and with the recommendation that the amendment be 
agreed to and that the bill as amended do pass. Passed by a 
vote of 22-19.

------------------------------------------------------------------------
                  MEMBER                      Aye       No      Present 
------------------------------------------------------------------------
Chairman Goodling........................        X   ........  .........
Mr. Petri................................        X   ........  .........
Mr. Roukema..............................  ........  ........  .........
Mr. Gunderson............................        X   ........  .........
Mr. Fawell...............................        X   ........  .........
Mr. Ballenger............................        X   ........  .........
Mr. Barrett..............................        X   ........  .........
Mr. Cunningham...........................        X   ........  .........
Mr. Hoekstra.............................        X   ........  .........
Mr. McKeon...............................        X   ........  .........
Mr. Castle...............................        X   ........  .........
Mrs. Meyers..............................        X   ........  .........
Mr. Johnson..............................  ........  ........  .........
Mr. Talent...............................        X   ........  .........
Mr. Greenwood............................        X   ........  .........
Mr. Hutchinson...........................        X   ........  .........
Mr. Knollenberg..........................        X   ........  .........
Mr. Riggs................................        X   ........  .........
Mr. Graham...............................        X   ........  .........
Mr. Weldon...............................        X   ........  .........
Mr. Funderburk...........................        X   ........  .........
Mr. Souder...............................        X   ........  .........
Mr. McIntosh.............................        X   ........  .........
Mr. Norwood..............................        X   ........  .........
Mr. Clay.................................  ........        X   .........
Mr. Miller...............................  ........        X   .........
Mr. Kildee...............................  ........        X   .........
Mr. Williams.............................  ........        X   .........
Mr. Martinez.............................  ........        X   .........
Mr. Owens................................  ........        X   .........
Mr. Sawyer...............................  ........        X   .........
Mr. Payne................................  ........        X   .........
Mrs. Mink................................  ........        X   .........
Mr. Andrews..............................  ........        X   .........
Mr. Reed.................................  ........        X   .........
Mr. Roemer...............................  ........        X   .........
Mr. Engel................................  ........        X   .........
Mr. Becerra..............................  ........        X   .........
Mr. Scott................................  ........        X   .........
Mr. Green................................  ........        X   .........
Ms. Woolsey..............................  ........        X   .........
Mr. Romero-Barcelo.......................  ........        X   .........
Mr. Reynolds.............................  ........        X   .........
                                          ------------------------------
      Totals.............................       22        19   .........
------------------------------------------------------------------------

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3 of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (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):

             SECTION 8 OF THE NATIONAL LABOR RELATIONS ACT

                         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 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;
          * * * * * * *
                             MINORITY VIEWS

                              introduction

    The Committee majority has reported out a bill which 
represents a giant step backward in an old, tried and 
discredited direction.
    Despite the majority's claim to the contrary, the so-called 
TEAM Act has nothing to do with teamwork, with workplace 
cooperation, or with empowering employees. There is nothing in 
the National Labor Relations Act (NLRA) or in any decision of 
the National Labor Relations Board (NLRB) which prohibits teams 
or workplace cooperation and the entire point of the NLRA is to 
encourage employee empowerment. Moreover, as the majority 
itself states, the types of work systems the majority heralds 
are in fact proliferating at a rapid pace.
    In the name of ``teamwork'', H.R. 743 actually would 
legalize employer domination of employee organizations and of 
systems of employee representation. In other words, this bill 
would legalize virtually all of the insidious practices of the 
1920's and 1930's--practices which section 8(a)(2) of the NLRA 
[hereinafter section 8(a)(2)] was specifically enacted to 
proscribe.
    Employer-controlled employee organizations are every bit as 
illegitimate--and every bit as inimical to freedom of 
association--as the government-controlled and party-controlled 
labor organizations which only recently were overthrown in 
Eastern Europe. Such employer domination is, and ought to 
remain, an unfair labor practice.

              the team act has nothing to do with teamwork

    We wish to make clear at the outset that we fully agree 
with the majority that the ``workplace of today is simply not 
the same as the workplace that was prevalent in the America of 
the 1930's.'' We also agree that ``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.'' And we could not agree more that to deal with the 
globally-competitive economy of ``the twenty-first century . . 
. it is important that U.S. workplace policies reflect a new 
era of labor-management relations--one that fosters 
cooperation, not confrontation.'' None of this, however, in any 
way justifies the bill the majority has reported.
    In the 1930's, and for many years thereafter, workplaces 
were organized on the principle that workers are 
interchangeable parts who perform best when they check their 
brains at the door of the workplace and carry out rote tasks in 
a manner desired by management. As Henry Ford put it, ``the 
work of an individual must be repetitive''; ``our tasks are 
exceedingly monotonous . . . but then, also, many minds are 
monotonous . . . many men want to earn a living without 
thinking.'' \1\
    \1\ Henry Ford, ``Today and Tomorrow,'' p. 160 (1926).
---------------------------------------------------------------------------
    In the past few years, management in many firms has 
belatedly discovered that working men--and women--do not want 
to ``earn a living without thinking'', but rather want to use 
their capacities fully to contribute to the success of their 
employer. Management has also belatedly discovered that those 
who actually do the productive work of an organization are in 
the best position to decide how their work can be most 
efficiently and effectively accomplished. Where management has 
come to accept these truths--as in non-union companies like 
Texas Instruments and unionized companies such as Xerox, 
Saturn, or Corning Glass--the workplaces operate very 
differently than the mass production factories of the 1930's, 
to the benefit of employees and employers alike.
    The TEAM Act, however, has nothing to do with these changes 
in work systems, because section 8(a)(2) has nothing to say 
about them. Section 8(a)(2) does not mandate command-and-
control management or any other form of management. Nor does 
section 8(a)(2) in any way restrict the adoption of Deming's 
system or any other system of management.
    The NLRB made that clear in General Foods,\2\ decided in 
1977. In General Foods the Board squarely held that work teams 
which are ``administrative subdivisions,'' of an employer, 
reflecting management's judgment as to ``the best way to 
organize the work force to get the work done,'' \3\ do not 
violate section 8(a)(2). That is true, the Board went on the 
hold, even if the teams hold meetings (or ``staff 
conferences'') at which individual employees raise grievances 
which ``involve conditions of employment'' and even if certain 
``managerial functions'' are ``delegated'' to the teams.\4\ So 
long as a team does not act as ``a bargaining agent''--or so 
long as any such actions on the part of the team are ``de 
minimis and isolated''--section 8(a)(2) is not implicated.\5\
    \2\ 231 NLRB 1232.
    \3\ Id. at 1234.
    \4\ Id. at 1235.
    \5\ Id.
---------------------------------------------------------------------------
    Significantly, since General Foods, there has not been even 
a single case to reach the Board which so much as questioned 
the lawfulness of teams or any other system that ``moves as 
much brain work as possible to front-line employees.'' \6\
    \6\ Statement of Howard Knicely, Chairman of the Labor Policy 
Association (LPA) and Executive Vice President of TRW, Inc., ``Hearings 
on Removing Impediments to Employee Participation/Electromation,'' 
before the Subcommittee on Employer-Employee Relations of the House 
Economic and Educational Opportunities Committee, 104th Congress, 1st 
Sess., at p. 28, (February 8, 1995).
---------------------------------------------------------------------------
    It is thus hardly surprising that employee involvement has 
proliferated and is now practiced by as many as 30,000 
employers according to the majority's estimate, including 96 
percent of large firms. Indeed, within the confines of the 
current law, employee involvement, in the majority's own words, 
has become ``a basic component of the modern workplace''. This 
is hardly evidence that suggests a need to change the law.
    Equally important, employee involvement systems are 
virtually never the subject of legal challenge. Indeed, 
according to a study by Professor James Rundle of Cornell 
University, from 1983 to 1993 the NLRB issued a total of just 
17 orders requiring an employer to disband an employer-created 
employee organization under section 8(a)(2); in all but two of 
these cases the organization was created either to thwart a 
union organizing drive or to bypass an existing union.\7\
    \7\ Rundle, ``The Debate Over the Ban on Employer-Dominated Labor 
Organizations'', in Restoring the Promise of American Labor Law, p. 
161, (1994).
---------------------------------------------------------------------------
    As David Silberman, Director of the AFL-CIO Task Force on 
Labor Law, testified before the Commission, this legislation is 
truly a ``solution in search of a problem.'' \8\
    \8\ Testimony of David M. Silberman, Director, AFL-CIO Task Force 
on Labor Law, Hearings on S. 295. The TEAM Act: The Employee 
Involvement and Worker-Management Cooperation Act, before the Senate 
Committee on Labor and Human Resources, 104th Congress, 1st Sess., 
(February 9, 1995).
---------------------------------------------------------------------------

                   the real facts about electromation

    The majority contends that the NLRB's decision in 
Electromation Inc.\9\ interferes with the adoption of these 
forms of employee involvement. That is simply not true: as 
Professor Charles Morris has written, Electromation is a case 
``more significant for its hype than its type.'' \10\
    \9\ 309 NLRB No. 163 (1992), enf`d. 35 F.3d 1138 (7th Cir. 1994).
    \10\ Morris, ``Deja Vu and 8(a)(2)--What's Really Being Chilled,'' 
(April 30, 1994).
---------------------------------------------------------------------------
    Electromation involved a traditionally-run, command and 
control manufacturer of electrical components. The case arose 
when new management of the company decided to cut expenses by 
altering attendance bonuses and denying the employees a general 
wage increase. These changes were announced at an employee 
Christmas party. Within two weeks, a group of employees 
submitted a petition to management protesting the loss of 
benefits. At approximately the same time, some employees began 
circulating union authorization cards.
    Faced with a restive workforce, the comapny--in an effort 
to preserve control--formed five ``Action Committees.'' The 
company decided the scope of each committee's jurisdiction and 
selected the employee members of the committee. The company 
instructed those individuals to represent their fellow 
employees with respect to those issues management chose to 
address. When a majority of the employees signed written 
authorization designating a union to serve as the employees' 
representative, the company commenced an anti-union campaign.
    As part of that campaign, the company pitted its Action 
Committees against the union by suspending the operations of 
committees--not ``disbanding'' them as the majority claims--and 
informing the employees that ``due to the Union's campaign the 
Company would be unable to participate in the committee 
meetings and could not continue to work with the committees 
until after the election.'' (Emphasis added.) \11\
    \11\ On the same day at which the company so notified the 
employees, the company held a meeting, which all employees were 
required to attend, to hear a speech by the company president, John 
Howard. As part of the speech, Mr. Howard held up a placard with a 
drawing of a graveyard and a series of tombstones bearing the names of 
``deceased employers'' in the area in which Electromation was located. 
An Administrative Law Judge found that ``it is easy to understand how 
employees ... could think that they heard Howard make ... threats,'' 
but that Howard was not, in fact, guilty of violating the law.
---------------------------------------------------------------------------
    The National Labor Relations Board, composed at the time of 
five Members appointed by Presidents Reagan and Bush, 
unanimously ruled that the employer had violated section 
8(a)(2). The Board found that the ``only purpose'' of the 
Action Committees was ``to address employees' disaffection 
concerning conditions of employment through the creation of a 
bilateral process involving employees and management'' and that 
the employer had dominated that process by controlling the 
jurisdiction, composition and processes of the Committees. The 
Board stated that the ``employees essentially were presented 
with the Hobson's choice of accepting the status quo, which 
they disliked, or undertaking a bilateral `exchange of ideas' 
within the framework of the Action Committees, as presented by 
the [employer].''
    The NLRB summarized its conclusion as follows:

          In sum, 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 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 Committees 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. (Emphasis 
        added.)

    Electromation chose to appeal to the United States Court of 
Appeals for the Seventh Circuit. A panel of that court 
unanimously affirmed the NLRB's decision. The court explained 
that under the NLRA, ``the principal distinction between an 
independent labor organization and an employer-dominated 
organization lies in the unfettered power of the independent 
organization to determine its own actions.'' And the court had 
little difficulty sustaining the NLRB's conclusion that the 
Action Committees:

        which were wholly created by the Employer, whose 
        continued existence depended upon the employers, and 
        whose functions are essentially determined by the 
        employer, lacked the independence of action and free 
        choice guaranteed by Section 7 [of the NLRA].

    The court stressed that its ruling ``does not foreclose the 
lawful use of legitimate employee participation organization, 
especially those which are independent, which do not function 
in a representational capacity, and which focus solely on 
increasing company productivity efficiency, and quality 
control.'' (Emphasis added.)
    Electromation chose not to seek review of the Court of 
Appeals' decision either before the full Seventh Circuit or the 
United States Supreme Court.
    In sum, the Electromation ruling is a narrow one which 
addresses only the issue of employer-created and controlled 
employee committees that consider wages and working conditions. 
Electromation does not address any other form of employee 
involvement. As Edward Miller, a life-long management attorney 
and former Chairman of the NLRB under President Nixon has 
stated, the claim that Electromation invalidated employee 
involvement is a ``myth''; it ``is indeed possible to have 
effective programs . . . without the necessity of any changes 
in current law.'' \12\
    \12\ Edward Miller, ``Myths and Reality About U.S. Labor 
Relations,'' at p. 6 (testimony submitted to the Commission on the 
Future of Worker-Management Relations, October 8, 1993).
---------------------------------------------------------------------------
    Moreover, the facts of the case illustrate the abuses that 
would be possible without section 8(a)(2). While the motivation 
of the employer in Electromation in creating the ``Action 
Committees'' is unclear, there is every reason to believe that 
the employer did so to fend off the workers' desire for 
independent representation. Certainly the company used the 
committees as pawns in its anti-union campaign. And in all 
events, the Action Committees were tools of the employer to 
deal with employee discontent and were not an independent voice 
of the employees.

            The Myth of Uncertainty and the Sawyer Amendment

    Because the NLRB in Electromation took pains to confine its 
decision to the question before it and not to utter broad 
pronouncements, in dictum, on questions that might be raised in 
other cases, the decision necessarily, and appropriately, is a 
careful and limited one. But the issues left open by 
Electromation in no way call into question the fundamental 
principle that section 8(a)(2) speaks only to employer-
dominated representation and not to methods of work 
organization.
    The majority, nonetheless, claim that Electromation has had 
a ``chilling effect . . . on legitimate employee involvement 
programming and on employers' plans to expand such programs.'' 
But no empirical evidence--or even anecdotal evidence--is cited 
by the majority to support these claims. To the contrary, the 
data indicate that in the two and one-half years since 
Electromation was decided, employee involvement has continued 
to grow at a healthy pace, especially in small firms. For 
example, studies conducted by Professor Paul Osterman of M.I.T. 
and by the Labor Policy Association (LPA) done in 1994 both 
found that two-thirds of the companies with employee 
involvement programs had adopted them in the preceding five 
years. In the LPA study 60 percent of the small businesses with 
employee involvement programs had adopted them in the preceding 
three years.\13\
    \13\ ``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; Osterman, ``How Common Is 
Workplace Transformation and Who Adopts It?'', 47 Industrial and Labor 
Rel. Rev. 173 (1994).
---------------------------------------------------------------------------
    The business community's professed fear about the 
``chilling effect'' of Electromation is a recent invention--one 
that post-dates the November 1994 elections. Two months before 
those elections, the Labor Policy Association and National 
Association of Manufacturers testified before the Dunlop 
Commission on the employee involvement issue. Each organization 
stated that it did not see the need for--and did not propose or 
support--legislative change at that time; rather, they 
advocated ``a wait and see approach.'' \14\ Just two months 
later, lobbyists from these organizations and their member 
companies were swarming Capitol Hill claiming that the sky was 
falling and that the TEAM Act was urgently needed.
    \14\ Hearing Before the Commission on the Future of Worker-
Management Relations, September 8, 1994, Tr. at 105-07.
---------------------------------------------------------------------------
    In a good-faith effort to meet the professed concerns about 
Electromation's supposed chilling effect, at the Committee 
markup many in the minority supported a substitute offered by 
Representative Sawyer (D-OH). That substitute was designed to 
create safe harbors for employers genuinely concerned about 
their ability to create team systems for work organization. The 
Sawyer substitute would have amended section 8(a)(2) by adding 
a proviso permitting three specific types of practices: self-
managed work teams, supervisor-managed work teams, and 
productivity/quality teams. In each case, these teams would 
have been lawful, even if they held ancillary discussion of 
conditions of work directly related to the work issues before 
the team.
    The majority's unanimous vote against the Sawyer substitute 
belies any claim that H.R. 743 is truly concerned with teamwork 
or employee involvement. Rather, the teamwork rubric is simply 
a convenient and innocent-sounding means for obscuring the real 
purpose and real effect of this legislation.

                    the real purpose of the team act

    If, then, the TEAM Act has nothing to do with teamwork, and 
is not necessary to dispel any uncertainty about the legality 
of employee involvement, why is it being pushed so 
aggressively? The answer is plain: the TEAM Act's real agenda 
is to permit management to ``involve'' employees in ways that 
do not threaten management prerogatives.
    When all is said and done, there is only one form of so-
called ``employee involvement'' that section 8(a)(2) currently 
prohibits. Under the law, employers may not ``involve'' their 
employees in dealing with the employer on the terms and 
conditions of their employment through employee organizations 
or employee representation plans which are dominated by the 
employer. That prohibition has proven to be an inconvenience 
for some employers who wish to create the form--but not the 
substance--of joint decisionmaking by employers and employees.
    Remarkably, the proponents of the TEAM Act are not claiming 
that it is designed to ``empower'' workers. In testimony before 
the full Committee, the LPA stated that the legislation 
``enables employers to give power directly to employees.'' But 
there is nothing in the current law which in any manner, shape, 
or form prohibits employers from transferring ``power'' to 
employees. To the contrary, in E.I. Dupont & Co.,\15\ the NLRB 
expressly ruled that the Act permits employers to grant a 
committee or team ``the power to decide matters for itself 
rather than simply make proposals to management.''
    \15\ 311 NLRB 893, 895 (1993).
---------------------------------------------------------------------------
    Moreover, the very last thing that the LPA or other backers 
of the TEAM Act seek is a workforce with real power--a 
workforce able to deal with employers on a more-or-less equal 
footing in determining the terms and conditions of their 
employment. And the ultimate point of the TEAM Act is to 
legalize involvement schemes that will enable management to 
preserve existing hierarchies and existing power arrangements--
that is, to preserve management's unilateral control over 
determining terms and conditions of employment.

            the team act means the return of company unions

    Despite the majority's claims to the contrary, there is 
nothing new about the TEAM Act. It represents a return to the 
discredited practice of company unionism.
    Under the TEAM Act, management would be entirely free to 
create, mold, and terminate employee organizations, at will, to 
deal with wages, benefits and working conditions. For each such 
employee organization or plan it chooses to create, management 
would have carte blanche to select the employees' 
representatives, write the organization's bylaws, determine the 
organization's governing structure and operating procedures, 
and establish the organization's mission and jurisdiction. The 
legislation contains no conditions to assure that such 
organizations are either legitimate or democratic. Rather, the 
legislation gives employers unfettered power to fashion 
employee organizations to the employer's own liking and to 
disband such organizations if and when doing so suits the 
employers' pleasure.
    The only limitations that H.R. 743 would place on an 
employer-dominated employee organization would be to require 
such an organization to function as a non-exclusive--rather 
than as an exclusive--representative and to foreclose such an 
organization from negotiating binding agreements. These 
conditions serve to further advance the interest of employers 
by assuring that any understanding arrived at with an employer-
created organization will never be legally binding on the 
employer but rather may be repudiated at the whim of the 
employer.
    In sum, H.R. 743 returns to employers everything that they 
had prior to 1935 that enabled them to create and dominate 
employee organizations. The inexorable effects will be to 
encourage the return of employer-dominated employee 
organizations and employee representation plans--that is, of 
company unions.
    The majority contends that its bill will not have such an 
effect, but in order to make that claim, the majority is forced 
to redefine ``company unions'' into something quite different 
from what they were in fact. The majority pretends that the 
company unions of the 1930's were ``sham organizations'' which 
entered into sham collective bargaining agreements. That 
pretense is convenient for the majority because it enables the 
majority to claim that it has safeguarded against the return of 
these practices by prohibiting employer-created organizations 
from signing contracts.
    In point of fact, however, as the noted labor historian Dr. 
David Brody testified before the Committee, this is not what 
company unions were all about.\16\ Indeed, a study by the 
Bureau of Labor Statistics in 1935 found that the overwhelming 
majority of company unions did not enter into any collective 
bargaining agreements, at all. Rather, company unions, as Dr. 
Brody explained, were employer-controlled systems of in-plant 
representation. And that is precisely what H.R. 743 would allow 
once again.
    \16\ Statement of David Brody, Professor Emeritus of History, 
University of California at Davis ``Hearing on H.R. 743, the Teamwork 
for Employees and Managers [TEAM] Act,'' Before the Committee on 
Economic and Educational Opportunities, 104th Congress, 1st Sess., at 
p. 42, (May 11, 1995).
---------------------------------------------------------------------------
    The majority could not be more wrong in suggesting that 
Senator Wagner had intended to ban all employer-dominated 
employee organizations, and that the language of the current 
statute was drafted more broadly than needed to achieve Senator 
Wagner's ends. Senator Wagner specifically considered a 
proposal to prohibit employer-dominated, employee organizations 
which ``bargain'' with an employer and specifically rejected 
that proposal as too limited. Leon Keyserling, Senator Wagner's 
chief aid, explained that if that proposal had been adopted, 
``then most of the activity of employers in connection with the 
company unions we are seeking to outlaw would fall outside the 
scope of the Act.'' The very point of the Act, Keyserling 
explained, is to cover employer-dominated employee 
organizations ``whether they merely `adjust' or exist as a 
`method of contact' or `engage in genuine collective 
bargaining.' '' \17\
    \17\ Memorandum of Leon Keyserling, quoted in David Brody, Section 
8(a)(2) and the Origins of the Wagner Act in ``Restoring the Promise of 
American Labor Law,'' p. 41 (1994).
---------------------------------------------------------------------------
    Thus despite the majority's pious claims to the contrary, 
this legislation is an open invitation to employers to recreate 
the company unions as they existed in the 1920's and 1930's. 
Former NLRB Chairman Miller puts it well: ``While I represent 
management I do no kid myself. If Section 8(a)(2) were to be 
repealed I have no doubt that in not too many months or years 
sham company unions would again recur.'' \18\
    \18\ Miller, supra n. 12, at 7.
---------------------------------------------------------------------------

    Company Unions are Illegitimate and Antithetical to Freedom of 
                              Association

    There are two fundamental reasons why Congress decided to 
prohibit employer-domination of employee organizations when it 
enacted the National Labor Relations Act in 1935 and when it 
reenacted that law, as part of the Taft-Hartley Act in 1947. 
Those reasons remain just as true and powerful today.
    First, employer-dominated employee organizations are 
inherently illegitimate. Although employers and employees have 
many interests in common, in the nature of things they have 
differing interests when it comes to determining how much they 
will be paid, what benefits they will receive, and what their 
other terms of employment will be. Against that background, 
elementary notions of representational fairness demand that the 
individuals who speak for the employees should be 
``independent'' of the employer in the sense that they are 
accountable to, and only to, the employees they represent. 
Section 8(a)(2) of the NLRA guarantees employees the right to 
such an independent voice. And the NLRA contains another 
provision which parallels that section and assures that 
employers can pick their own representatives without union 
interference.
    As Senator Wagner said in 1935:

          I cannot comprehend how people can rise to the 
        defense of a practice so contrary to American 
        principles as one which permits the advocates of one 
        party to be paid by the other. Collective bargaining 
        becomes a sham when the employer sits on both sides of 
        the table or pulls the strings behind the spokesman of 
        those with whom he is dealing. . . . [T]o argue that 
        freedom of organization for the worker must embrace the 
        right to select a form of organization that is not free 
        is a contradiction in terms.

    Second, as Senator Wagner also noted, employer-dominated 
employee organizations are ``one of the great obstacles to 
genuine freedom of self-organization.'' It is difficult enough 
under our labor laws for employees who want an independent 
voice on the job to organize a union of their own, given the 
depth of management opposition they face. Organizing would 
become next to impossible, however, if on top of everything 
else employers were permitted to offer a safe and cost-free 
company union as an alternative to the risks and costs involved 
in creating an independent representative.
    That is why employers chose to create employer-dominated 
representation systems in the 1920's and 1930's. As John Common 
wrote in his seminal ``History of Labor in the United States,'' 
``every investigator, whether pro-employer, pro-labor, or 
neutral seems to agree that the company unions have interested 
a majority of the employers because of their potentialities in 
combating unionism.'' \19\ And that is why Congress enacted 
section 8(a)(2) of the NLRA in 1935. As Dr. Brody has written, 
``abhorrence of company domination is a corollary to the 
principle of freedom of association central in our labor law.'' 
\20\
    \19\ Commons, 3 ``History of Labor in the United States'' at 354 
(1935).
    \20\ Testimony of David Brody before the Commission on the Future 
of Worker-Management Relations, January 19, 1994, Tr. at 120.
---------------------------------------------------------------------------
    While much has changed in the ensuing sixty years, the 
fundamental judgments that Congress made in enacting section 
8(a)(2) of the NLRA remain as valid today as they were in the 
1930s. The TEAM Act ignores the lessons of history by allowing 
for a return to systems of employer-dominated representation 
which are illegitimate and inimical to freedom of association.

 Working Men and Women Do Not Desire Employer-Dominated Representation

    The majority claims that the TEAM Act would further the 
desire of working men and women. The evidence on which the 
majority purports to rely proves precisely the opposite.
    The majority cites the Worker Representation and 
Participation Survey directed by Professors Richard Freeman and 
Joel Rogers and administered by Princeton Survey Research 
Associates. But as Professors Freeman and Rogers have stated, 
their Survey found ``that virtually all employees wanted both 
cooperative relations with management and, within those 
relations, a significant measure of independence and control 
over how their interests are represented.'' In other words, 
``American workers want both cooperation and independence in 
workplace relations, and they see no necessary conflict between 
the two.'' \21\
    \21\ R. Freeman and J. Rogers, ``Worker Representation and 
Participation Survey: Second Report of Findings'' at 4, 11 (June 1, 
1995).
---------------------------------------------------------------------------
    Specifically, in the Survey, only a small minority of 
workers (11%) believe that management should be free to pick 
the employee members of labor-management committees or to 
select the leaders of employee organizations (12%). Yet that is 
precisely what the TEAM Act would let management do.
    Similarly, in the Survey only 17 percent of respondents 
favor a system of ``involvement'' in which management makes the 
final decisions; 81 percent of respondents favor a system in 
which decisions are made jointly through the agreement of 
employees and management. And 56 percent of workers favor the 
use of outside arbitrators to resolve disagreements. Yet the 
TEAM Act would institutionalize a system of management control.

              Scholars Overwhelmingly Oppose the TEAM Act

    Shortly before the mark-up, the Committee received a letter 
from Dr. Hoyt Wheeler, the president-elect of the Industrial 
Relations Research Association. That letter was signed by more 
than 400 professors of labor law and industrial relations and 
other neutral parties in the labor-management community. The 
letter states:

          The stated purposes of this bill--promotion of 
        legitimate employee involvement and genuine worker-
        management co-operation--are vital to the national 
        interest. However, enactment of the TEAM Act would 
        frustrate the realization of these goals by encouraging 
        illegitimate forms of employee involvement and 
        discourage the legitimate expression of worker voice.
          For the past sixty years, it has been the policy of 
        our labor law to encourage collective bargaining by 
        protecting the right of workers to freely associate and 
        select representatives of their own choosing. A 
        cornerstone of that policy has been the prohibition, 
        contained in section 8(a)(2) of the National Labor 
        Relations Act, on employer domination of employee 
        organizations and employee representation plans. That 
        section was central to the NLRA and was enacted because 
        prior to the NLRA's enactment, employer control of 
        employee organizations and representation plans had 
        been used widely and effectively to impede workers from 
        organizing independent labor unions.
          The proposed TEAM Act would negate the original 
        purpose of section 8(a)(2) by permitting without 
        limitation a revival of the very practices against 
        which section 8(a)(2) was aimed. The legislation 
        contains no safeguards to guarantee that employer-
        created representation plans function democratically 
        and independently of the employer. Nor is there 
        anything in the bill which would prevent employers from 
        manipulating the employer-controlled organizations in 
        order to thwart genuine employee voice. As a result, we 
        are persuaded that passage of the TEAM Act would 
        quickly lead to the return of the kind of employer-
        dominated employee organization and employee 
        representation plans which existed in the 1920's and 
        1930's.
          Employee involvement and worker-management 
        cooperation can and should be fostered by means which 
        do not further limit employees' freedom of association. 
        The proposed TEAM Act represents a step backwards 
        towards the discredited approaches of the 1920's and 
        1930's and away from true employee involvement and 
        genuine worker-management co-operation. H.R. 743 and S. 
        295 should not be enacted into law.

    In addition, Dr. John Dunlop, former Secretary of Labor in 
the Ford Administration and chairman of the Commission on the 
Future of Worker-Management Relations (Dunlop Commission), has 
publicly stated that the members of that Commission--including 
three former Secretaries of Labor, several scholars of labor 
relations, the chief executive officer of Xerox and a 
representative of the small business community--unanimously 
oppose enactment of H.R. 743.
    Given the polarization within the labor-management 
community between business and labor, the opinion of these 
scholars and Commission members, who have no ax to grind, is 
particularly impressive.

                       the team act is one-sided

    In addition to being unnecessary and ill-conceived, the 
TEAM Act is entirely one-sided. The bill addresses the one 
complaint that employers have about the National Labor 
Relations Act. But this bill--like the rest of the majority's 
legislative agenda--does nothing to address the concerns or 
advance the interests of employees.
    The failure of the NLRA to protect workers' rights to 
organize and bargain collectively is, by now, well-documented, 
but that failure is of no moment to the majority. The only 
issues that make it onto the majority's legislative radar 
screen are those raised by the already powerful.
    At the Committee mark-up, the minority offered an amendment 
which simply sought to assure that workers who are illegally 
discharged for attempting to organize an independent labor 
organization in lieu of an employer-dominated organization 
created under the TEAM Act would receive the same kind of 
expedited hearing that the NLRA already provides in cases 
involving secondary boycotts. Notwithstanding the majority's 
claim that the right to organize is the ultimate safeguard 
against employers abusing the privileges being granted to them 
by the TEAM Act, the majority voted down this simple amendment 
which would have effectuated that right.
    The majority also voted down a modest amendment designed to 
assure that employers who violate the expansive limits of the 
TEAM Act--an act not easily accomplished--would be subject to 
stronger remedies than merely the current law's slap on the 
wrist.

                               Conclusion

    The National Labor Relations Act is a complex law. It seeks 
to foster and protect a system of labor-management relations 
whereby employees, through collective activity, are able to 
balance the inherently disproportionate economic power 
otherwise vested in management and thereby achieve binding 
contracts covering terms of employment reflecting the mutual 
needs of both labor and management.
    Section 8(a)(2), however, stands for a simpler, more 
fundamental principle--representatives should be exclusively 
responsible to those they represent. Stripped of all the 
rhetoric, H.R. 743 stands for the proposition that employers 
should be able to choose and control who shall speak for 
employees on matters in which the interests of employers and 
employees are inherently divergent and sometimes at odds.
    The principle that representatives should be exclusively 
responsible to those they represent is essential to the system 
of labor-management relations envisioned by the National Labor 
Relations. Act. More importantly, it is the bedrock principle 
of republicanism, our system of government, and basic fairness. 
That a party that calls itself the Republican Party should 
proffer legislation that would grant to employers the right to 
choose both who will represent the interests of workers and how 
they will do so is not simply ironic, but tragic. To use an 
analogy from American history, it is akin to saying that 
allowing the British Parliament to choose which Americans would 
represent the interests of American colonists (and on what 
issues they would be able to speak) would have provided 
adequate and sufficient representation for Americans. That such 
a gross contradiction of core concepts of fairness is likely to 
produce cooperation, or anything other than animosity, is no 
more likely today than it was in 1776.

                                   William (Bill) Clay.
                                   Dale E. Kildee.
                                   George Miller.
                                   Major R. Owens.
                                   Matthew G. Martinez.
                                   Bobby Scott.
                                   Tim Roemer.
                                   Lynn C. Woolsey.
                                   Gene Green.
                                   Jack Reed.
                                   Pat Williams.
                                   Patsy T. Mink.
                                   Donald M. Payne.
                                   Tom Sawyer.
                                   Eliot L. Engel.
                                   Carlos A. Romero-Barcelo.
                                   Mel Reynolds.
                                   Xavier Becerra.