[Senate Report 104-259]
[From the U.S. Government Publishing Office]
Calendar No. 389
104th Congress Report
SENATE
2d Session 104-259
_______________________________________________________________________
TEAMWORK FOR EMPLOYEES AND MANAGEMENT ACT OF 1995
_______
May 1, 1996.--Ordered to be printed
_______________________________________________________________________
Mrs. Kassebaum, from the Committee on Labor and Human Resources,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany S. 295]
The Committee on Labor and Human Resources to which was
referred the bill (S. 295) to permit labor management
cooperative efforts that improve America's economic
competitiveness to continue to thrive, and for other purposes,
having considered the same, reports favorably thereon without
amendment and recommends that the bill do pass.
CONTENTS
Page
I. Introduction.....................................................1
II. Purpose and summary..............................................3
III. Background and need for legislation..............................3
IV. Legislative history and committee action........................16
V. Explanation of bill and committee views.........................19
VI. Cost estimate...................................................23
VII. Regulatory impact statement.....................................23
VIII.Section-by-section analysis.....................................23
IX. Minority views..................................................25
X. Changes in existing law.........................................41
I. Introduction
In his State of the Union address in 1996, President
Clinton told the country: ``When companies and workers work as
a team, they do better. And so does America.'' Unfortunately,
our Federal labor law actually prohibits many forms of worker-
management teamwork.
The Teamwork for Employees and Management (TEAM) Act, S.
295, will promote greater employee involvement by removing the
barriers created by Federal labor law. These barriers, largely
found in section 8(a)(2) of the National Labor Relations Act
(NLRA), were originally targeted at ``company'' unions but
actually sweep much broader to ban many cooperative labor-
management efforts.
This legislation, S. 295, signals a new era in employee
relations. The bill recognizes, as President Clinton did in his
national address, that the best workplaces for employees and
the most productive workplaces for employers are ones where
labor and management work together.
The Senate has focused several of its legislative efforts
on decentralizing decision making. In the employment arena,
employee involvement increases local decision making and
provides employees with a voice in how to structure the
workplace. In workplaces where employee involvement programs
have been implemented, employees are empowered to play a role
in reaching decisions on many aspects of their employment.
As this nation enters the 21st century, the committee
believes it important that U.S. workplace policies reflect a
new era of labor-management relations--one that fosters
cooperation, not confrontation. Employees want to work with
their employers to make their workplaces both more productive
and more enjoyable.
A recent study of employees' views in this area indicates
that a majority of workers want a voice in their workplace.
They also believe that their contribution would be effective
only if management cooperates. When asked to choose between two
types of organizations to represent them, workers chose, by a
3-to-1 margin, one that would have no power but would have
management cooperation over one with power but without
management cooperation.\1\ Employee involvement gives workers
the best of both worlds by offering both empowerment and
cooperation.
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\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 legality of employee involvement and labor-management
cooperative efforts must be clarified. These human resource
programs move domestic industry toward the high performance
workplaces necessary to compete in the increasingly competitive
global economy. The 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 work force of the early 20th
century, where each employee's and supervisor's job tasks were
compartmentalized and performed in isolation, is not effective
in the current globally competitive marketplace. Federal labor
law must evolve to adjust to the modern reality of overlapping
responsibilities and each employee having a sense of the whole
production process. The TEAM Act accomplishes this evolution.
For these reasons, the committee fully supports its enactment.
II. Purpose and Summary
The purpose of S. 295, the Teamwork for Employees and
Management (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 coercive employer practices, and
to allow legitimate employee involvement programs, in which
workers may discuss issues involving terms and conditions of
employment, to continue to evolve and proliferate.
The TEAM Act would clarify the legality of employee
involvement programs by adding a proviso to section 8(a)(2) of
the NLRA clarifying that an employer may establish, assist,
maintain, or participate in any organization or entity of any
kind, in which employees participate, to address matters of
mutual interest--including, among others, issues of quality,
productivity, and efficiency.
The bill also specifies that such organizations may not
have, claim, or seek authority to enter into or negotiate
collective bargaining agreements or to amend existing
collective bargaining agreements, nor may they claim or seek
authority to act as the exclusive bargaining agent of
employees. Senate bill 295 specifies that the proviso does not
affect other protections within the NLRA, thereby ensuring that
employee involvement cannot be used as a means to avoid
collective bargaining obligations. The amendment to section
8(a)(2) contained in the bill is designed to provide a safe
harbor for cooperative labor-management efforts without
weakening workers' ability to select independent union
representation.
III. Background and Need for Legislation
In the wake of the Industrial Revolution, American business
operated under the time-honored principle of the division of
labor. This theory was based on the belief that ``when a
workman spends every day on the same detail, the finished
article is produced more easily, quickly, and economically.''
\2\ Indeed, for most of this century, the accepted American
method of human resource management--named ``Taylorism'' after
Frederick Taylor, a turn-of-the-century engineer and inventor--
has been top-down decision making aimed at minimizing ``brain
work'' at the shop-floor level. Employees simply did as they
were told by their supervisors, who also operated within
confined parameters set by their superiors.
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\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 20 years,
however, have witnessed a dramatic transformation in the
fundamental nature of labor-management relations. This
transformation is due primarily to foreign competition, rapid
technological change, and other factors which have provided
strong incentives for altering workplace relationships.
By the late 1970s, manager began to view employees as a
source of ideas for ``developing and applying new technology''
and ``improving existing methods and approaches to remain
competitive.'' \3\ Rather than organizing workers to perform a
single task, as had been the practice under division of labor,
companies began instituting programs to involve employees more
broadly in solving problems and making decisions which once
were exclusively within the realm of management.\4\
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\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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These programs, implemented in both union and nonunion
workplaces, included quality circles, quality of work-life
projects, and total quality management programs. By involving
workers to varying degrees in most aspects of production, these
programs frequently resulted in substantial productivity gains,
as well as increased employee satisfaction
Forms of Employee Involvement
Employee involvement comes in many forms. It is not a set
``program,'' and therefore, it defies easy definition. Rather,
employee involvement is a means by which work is organized
within a company and, as such, a way for employees and
employers to relate to one another within an organization.
Because of this, there is no single dominant form of
employee involvement. It usually includes some structure method
for addressing workplace issues through discussions between
employees and employer representatives. Indeed, two out of
every three employee involvement structure do not even have a
manual of procedure, thereby allowing the participants to
design their structure to meet their changing needs.\5\
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\5\ See Edward E. Lawler III, Gerald E. Ledford, and 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 an 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\
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\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.
\8\ Potter, supra, note 6, at 21. Martin T. Moe, Note,
``Participatory Workplace Decision making and the NLRA: Section
8(a)(2), Electromation, and the Specter of the Company Union,'' 68
N.Y.U. L.Rev. 1127, 1158 (1993).
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Quality circles
Quality circles are small groups of employees that meet
regularly on company time with the goal of improving quality
and productivity within their own work areas. They typically
are comprised of hourly employees and supervisors who receive
special training in problem-solving techniques. Although
quality circles usually lack authority to implement solutions
without management approval, they provide workers with an
invaluable opportunity to influence the manner in which their
products are manufactured and designed.\8\
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\9\ Moe, supra note 8, at 1158-59.
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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 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\
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\10\ Id.
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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\
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
suggestion for improving productivity.\11\
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\11\ Moe, supra note 8, at 1160.
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Again, the examples discussed above are intended to provide
illustrations of the various ways in which employee involvement
has been utilized in today's modern workplace. Many other forms
are successfully utilized by both small and large employers.
More important to this discussion, however, is the fact
that employee involvement, regardless of its form, seeks as its
fundamental goal to unlock the productive capabilities of
American workers. And, while it may be argued that some
similarities exist between modern employee involvement and the
employer-dominated company unions of the 1930s, today's
programs differ dramatically in intention, form, and effect
from the organizations the National Labor Relations Act sought
to abolish. Indeed, today's employee involvement programs
``seek to engender labor-management cooperation and improve
worker productivity and morale by granting employees greater
involvement in the issues that most affect their work lives.''
\12\
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\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 Senate Committee on Labor and Human
Resources, Ms. Angie Cowan, an employee and team member at TRW
in Cookeville, TN, described her company's use of employee
involvement:
The biggest difference between TRW, Cookeville and
other businesses and plants is our employee involvement
and communication. * * * We have team meetings whenever
needed to discuss team issues such as line rotation
schedules, changes of lunches and/or breaks, changes of
our delivery schedule, and safety or housekeeping
films. * * *
The communication at TRW absolutely cannot be beat.
We know at any time, we can call anybody in the plant
without having to have a middle person. That is the
very best thing. * * *
How many of you can say that you have got the best
boss in the world? I can. I really love my job.\13\
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\13\ Hearing on S. 295, the Teamwork for Employees and Management
(TEAM) Act before the Senate Committee on Labor and Human Resources,
104th Cong., 1st Sess. at 11-12 (Feb. 9, 1995) (statement of Angie
Cowan, rework coordinator at TRW).
Ms. Cowan's colleague described to the committee the way in
which she and her fellow employees responded to the use of
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employee involvement:
What employee involvement means to me is that we come
to work looking forward to starting our day and when we
go home, we feel good about what we've done because we
know we've had a direct influence on the decisions that
affect our work environment.\14\
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\14\ Id. at 51.
Another witness before the committee, Ms. Molly Dalman, a
team member from the Donnelly Corp. in Holland, MI, described a
similar experience of increased job satisfaction as well as
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improved productivity:
Our goal is to keep each other informed, to produce a
high-quality product in the most efficient manner. This
helps us to be competitive in the market.
Teams have their biggest impact in their work areas.
I know my job, what I need to do and how to do it
better than my team leader or any engineer. Therefore,
I need to feel as if I have some control in my work
area, and by working in teams, I have that control.\15\
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\15\ Hearing on S. 295, The Teamwork for Employees and Management
(TEAM) Act Before the Senate Committee on Labor and Human Resources,
104th Cong., 2d Sess. at 9 (Feb. 8, 1996) (statement of Molly Dalman,
team member at Donnelly Corp., Holland, MI).
Senior management has voiced similarly enthusiastic support
for employee involvement. This sentiment was perhaps best
reflected in the testimony of Richard Wellins, senior vice
president for Development Dimensions International, Pittsburgh,
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PA, before the Senate Committee on Labor and Human Resources:
[T]eams and other forms of employee involvement have
had a tremendous impact on American competitiveness. On
manufacturing plant floors and in corporate offices
across the country, work teams are making employees and
their companies more productive than at any time in the
history of this country. Witness GE's cross-train teams
which increased productivity by 115 percent; teams at
Miller Brewing's new plant start-up improved
productivity by 30 percent; the 1,000 plus teams at
Texas Instruments, a Baldrige winner, who helped cut
product return rates from 3 to .03 percent; and Fisher
Rosemont, an Emerson Electric company, whose cycle time
was cut by 62 percent. These are just three of
literally hundreds of examples of teams in action.\16\
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\16\ Hearing on S. 295, The Teamwork for Employees and Management
(TEAM) Act Before the Senate Committee on Labor and Human Resources,
104th Cong., 2d sess. at 22 (Feb. 8, 1996) (statement of Richard
Wellins, DDI Inc., Pittsburgh, PA).
Academics have also acknowledged the fundamental changes in
labor-management relations over the last 20 years and are
extremely supportive of the specific goals employee involvement
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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.\17\
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\17\ 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
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the modern workplace, Professor Estreicher stated:
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.) \18\
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\18\ 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.'' \19\ Perhaps
more importantly, the President's Commission concluded:
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\19\ ``Commission on the Future of Worker-Management Relations:
Report and Recommendations,'' Dep't. of Labor and Dep't. of Commerce,
December 1994.
On the basis of the evidence, the Commission believes
that it is in the national interest to promote
expansion of employee participation in a variety of
forms provided it does not impede employee choice of
whether or not to be represented by an independent
labor organization. At its best, employee involvement
makes industry more productive and improves the working
lives of employees. (Emphasis added.) \20\
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\20\ Id.
Similarly, Secretary of Labor, Robert B. Reich, has also
noted the fundamental changes taking place in today's modern
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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.\21\
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\21\ Robert B. Reich, ``The `Pronoun Test' for Success,'' The
Washington Post, July 28, 1993, at A19.
In response to these changes, the Department of Labor
issued a publication to American businesses that underscored
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the benefits of employee involvement:
Highly successful companies avoid program failure by
assembling employees into teams that perform entire
processes--like product assembly--rather than having a
worker repeat one task over and over. In many cases,
teams of workers have authority usually reserved for
managers: They hire and fire; they plan work flows and
design or adopt more efficient production methods; and
they ensure high levels of safety and health.\22\
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\22\ 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
During the past 20 years, employee involvement has emerged
as the most dramatic development in human resources management.
One reason is that worker involvement has become a key method
of improving American competitiveness.
Evidence of the success--and corresponding proliferation--
of employee involvement can be found in a 1994 survey of
employers performed at the request of the Commission on the
Future of Worker-Management Relations. The survey found that 75
percent of responding employers--large and small--had
incorporated some means of employee involvement in their
operations. Among larger employers--those with 5,000 or more
employees--the percentage was even higher, at 96 percent.\23\
It is estimated that as many as 30,000 employers currently
employ some form of employee involvement or participation.
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\23\ ``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., Aug. 10, 1994.
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The success of employee involvement can also be found in
the views of American workers. A survey conducted by the
Princeton Survey Research Associates found overwhelming support
for employee involvement programs among workers, with 79
percent of those who had participated in such programs
reporting having ``personally 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.\24\
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\24\ ``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 fad in human resources management. Over the last 20
years, it has evolved--along with the global economy--into a
basic component of the modern workplace and a key to successful
labor-management relations. As such, American industry must be
allowed to use employee involvement in order to utilize more
effectively its most valuable resource--the American worker.
Electromation and Other Cases Signal Need for Clarification
On December 16, 1992, the National Labor Relations Board
(NLRB or Board) issued a decision in Electromation, Inc.,\25\ a
case which many thought would clarify the legality \26\ of
employee involvement programs. Electromation involved several
employee participation committees within a small, nonunion
company. Unrelated to any organizing effort,\27\ management
created the employee teams in response to employee objections
over several proposed changes in attendance and wage policies.
The so-called ``action committees'' addressed the following
workplace issues: (1) absenteeism, (2) no-smoking policy, (3)
communication network, (4) pay progression for premium
positions, and (5) attendance bonus program. The Board found
that the company played the primary role in establishing the
size, responsibilities, and goals of the committees and in
setting the final membership and initial dates for meetings.
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\25\ 309 N.L.R.B. No. 163 (1992).
\26\ The two provisions of the NLRA most directly at issues in the
debate over the legality of employee involvement programs were sections
2(5) and 8(a)(2). Section 2(5) defines a labor organization as ``any
organization of any kind, or any agency or employee representation
committee or plan, in which employees participate and which exists for
the purpose, in whole or in part, of dealing with employers concerning
grievances, labor disputes, wages, rates of pay, hours of employment,
or conditions of work.'' Section 8(a)(2) makes it an unfair labor
practice for an employer ``to dominate or interfere with the formation
or administration of any labor organization or contribute financial or
other support to it.''
\27\ 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.
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In order to determine whether the company committed an
unfair labor practice, the Board first found that the action
committees were ``labor organizations'' under the NLRA. The
term ``labor organization'' was quite broad and encompassed
``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.'' \28\ (Emphasis added.)
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\28\ Section 2(5) of the NLRA.
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Courts have added to the breadth of what constitutes a
``labor organization'' by finding that the term ``dealing with
employers'' was not limited to collective bargaining
situations, but was a much broader concept.\29\ The Board found
that ``dealing'' included bilateral communication between
workers and supervisors within the employee involvement
program. Working with this wide-ranging definition, the NLRB
held that the action committees were ``labor organizations''
under the NLRA.
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\29\ See National Labor Relations Board v. Cabot Carbon Co., 360
.S. 203 (1959).
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The Board then turned to the company's role in establishing
and operating the action committees. Under section 8(a)(2) of
the NLRA, it was an unfair labor practice for an employer ``to
dominate or interfere with the formation or administration of
any labor organization or contribute financial or other support
to it.''
In this context, the NLRB found the company had dominated
the committees by establishing the size, responsibilities, and
goals of the committees, and by selecting the final makeup and
initial meeting dates for the committees. Accordingly, the
Board held that the company had committed an unfair labor
practice under Federal labor law. The decision was later
affirmed by the Seventh Circuit Court of Appeals.\30\
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\30\ Electromation, Inc. v. National Labor Relations Board, 33 F.3d
1148 (7th Cir. 1994).
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The need for clarification of the legality of employee
involvement programs has since moved far beyond the specific
facts of the Electromation decision. The breadth of the
relevant provisions of the NLRA left employers and employees in
a legal never-never land. Furthermore, since the Electromation
decision, the NLRB has considered charges involving the
employee involvement efforts of some of the leading companies
in the country and has consistently questioned the legality of
these efforts: \31\
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\31\ Much has been made by opponents of S. 295 of the relatively
small number of charges filed with the Board alleging a violation of
section 8(a)(2). First, the NLRB process is wholly complaint-driven,
and employees have a diminished incentive to challenge workplace
structures which effectively meet their interest in having grater
involvement in workplace decision making. In addition, the
Electromation decision has had a chilling effect on legitimate employee
involvement programs and on employers' plans to expand such programs.
Donnelly Corp.: \32\ 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 NRLB nevertheless issued a complaint
against Donnelly charging that its employee involvement
program violated section 8(a)(2). The irony was that
the genesis of the complaint was testimony that
Donnelly presented to DOL's Commission on the Future of
Worker-Management Relations (Dunlop Commission) on
``Innovations in Worker-Management Relations.'' Dr.
Charles J. Morris, former editor of ``The Developing
Labor Law,'' heard the testimony, believed the Donnelly
system was a violation of section 8(a)(2), and filed
the initial charge.\33\
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\32\ GR-7-CA-36843.
\33\ Although this charge was eventually dismissed, a Donnely
employee then amended and unrelated unfair labor practice charge she
had filed to include the alleged section 8(a)(2) violation. A complaint
was issued on this second charge and a hearing was scheduled.
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Polaroid Corp.: \34\ Also cited as ``One of the Best
100 Companies to Work for In America,'' the Polaroid
Corp. has long had an institutional commitment to
employee involvement and has been a model for other
companies establishing cooperative efforts. Despite the
company's attempt in the early 1990's to reconstitute
its successful committees to comply with section
8(a)(2), the Board's general counsel issued a complaint
challenging the new program even though it removed all
decisionmaking authority from the employees.
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\34\ 1-CA-29966.
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EFCO Corp.: \35\ The EFCO Corp. first became involved
in employee involvement programs in the late 1970's
with the establishment of an employee stock ownership
plan (ESOP). The company then moved to utilize total
quality control techniques and an extensive employee
committee system. Four of the committees--employer
policy review, safety, employee suggestion, and
employee benefits--were challenged as violating section
8(a)(2) by the Carpenters' Union after an unsuccessful
organizing effort.\36\ Although acknowledging EFCO's
commitment to employee empowerment, the Administrative
Law Judge nevertheless found that the committees were
``labor organizations'' and that the company had
illegally dominated them by forming the committees,
choosing initial members, participating in meetings,
and selecting topics for discussion.
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\35\ 17-CA-16911 (Mar. 7, 1995).
\36\ 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.
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Keeler Brass Automotive Group: \37\ A unanimous NLRB
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
unlawfully dominated the formation of the committee and
interfered with its administration. In a concurring
opinion, Chairman Gould concluded that the Committee
was not capable of independent action, despite the fact
that the committee was not created in response to union
organizing efforts or as a means to undercut
independent action by employees, participation on the
committee was voluntary and determined by election, and
employees were the only voting members of the
committee.
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\37\ 317 NLRB No. 161 (June 14, 1995).
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The Board's broad interpretation of the term ``labor
organization,'' which includes many employee participation
programs, and the strict limits on the role employers may play
in such organizations make it very difficult for employee
involvement programs to proceed successfully. Clearly, a
legislative change must be made.
Current NLRA Prohibitions Are Too Broad
A brief look at the history of section 8(a)(2) demonstrates
why the provision was originally crafted so broadly and why
such breadth interferes with the preferred method of labor-
management organization in many U.S. firms today. In 1935, when
Congress passed the NLRA, the so-called Wagner Act,\38\
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.'' \39\ 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.
---------------------------------------------------------------------------
\38\ Senator Robert Wagner was the prime sponsor of the bill which
became the National Labor Relations Act (NLRA).
\39\ National Industrial Recovery Act, 48 Stat. 195, 198 (1933)
(the rights established by the Recovery Act had only temporary effect,
because section 2 of the act contained a sunset provision).
---------------------------------------------------------------------------
Under the Recovery Act, employers could use company unions
as tools to avoid recognition of, and collective bargaining
with, independently organized unions. Employers often refused
to recognize independently formed unions on the grounds that
employees were already represented, albeit by a company union.
As a result, employers could establish and bargain exclusively
with unions that were formed and operated largely at their
direction.
The Recovery Act permitted such abuses of company unions
for various reasons. Primarily, the act contained inadequate
enforcement mechanisms.\40\ Further, it did not specifically
prohibit company unions, although the law prohibited employers
from requiring employees to join a company union as a condition
of employment.\41\ Lastly, the act granted employees the right
to organize but did not specify ``the kind of organization, if
any, with which employees should affiliate.'' \42\ 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.\43\
---------------------------------------------------------------------------
\40\ Hardin, Patrick, ``The Developing Labor Law'' (3d ed. 1992),
vol. 1 at 25-26.
\41\ National Industrial Recovery Act, 48 Stat. 195, 198-99 (1933).
\42\ I. Bernstein, ``Turbulent Years,'' at 38 (1970).
\43\ 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 inadequately 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.''
\44\
---------------------------------------------------------------------------
\44\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, ``Legislative
History of the National Labor Relations Act,'' 1935, at 15 (1949).
---------------------------------------------------------------------------
According to an article printed in the New York Times
during debate over the NLRA, the number of employees in company
unions had increased from 432,000 in 1932, before passage of
the Recovery Act, to 1,164,000 just 1 year later.\45\ 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.\46\ The magnitude of this problem following
passage of the Recovery Act was evidenced by the fact that more
than 70 percent of the disputes coming before the National
Labor Board (precursor to the NLRB) before enactment of the
NLRA concerned employers' refusal to deal with properly elected
union representatives.\47\
---------------------------------------------------------------------------
\45\ Wagner, Robert. ``Company Unions: A Vast Industrial Issue,''
the New York Times, Mar. 11, 1934.
\46\ Id.
\47\ Wagner, Robert. ``Company Unions: A Vast Industrial Issue,''
the New York Times, Mar. 11, 1934.
---------------------------------------------------------------------------
Prior to passage of the NLRA then, employers used company
unions as a tool to avoid collective bargaining with
independently organized unions and to control the collective
bargaining the 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.\48\
---------------------------------------------------------------------------
\48\ Id.
Senator Wagner further stated, regarding a bill containing
provisions virtually identical to section 8(a)(2) of the NLRA,
---------------------------------------------------------------------------
that it:
[did] not prevent employers from setting up societies
or organizations to deal with problems of group
welfare, health, charity, recreation, insurance or
benefits. All of these functions can and should be
fulfilled by employer-employee organizations. But
employers should not dominate organizations which exist
for the purposes of collective bargaining in regard to
wages, hours, and other conditions of employment.\49\
---------------------------------------------------------------------------
\49\ Hearings on S. 2926 before the Senate Committee on Education
and Labor, 73d Cong., 2d sess. 9 (1934) (statement of Senator Wagner)
reprinted in 1 NLRB, Legislative History of the National Labor
Relations Act, 1935, at 39-40 (1949) (Emphasis added).
Thus, at the outset of debate over the NLRA, Congress
indicated its disapproval of employer-dominated organizations
which existed for purposes of collective bargaining but did not
signal its disapproval of all employer-employee organizations.
Further debate over the proposed scope of section 8(a)(2)
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. *
* *'' \50\
---------------------------------------------------------------------------
\50\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, ``Legislative
History of the National Labor Relations Act,'' 1935, at 16 (1949);
Wagner, Robert. ``Company Unions: A Vast Industrial Issue,'' The New
York Times, Mar. 11, 1934.
---------------------------------------------------------------------------
The Senate report on S. 2926, an earlier version of the
NLRA containing provisions virtually identical to 8(a)(2),
confirms this view. Regarding employers' use of company unions
as an obstacle to collective bargaining, the report on the bill
stated:
[t]hese abuses do not seem to the committee so general
that the Government should forbid employers to indulge
in the normal relations and innocent communications
which are part of all friendly relations between
employer and employee. * * * The object of [prohibiting
employer-dominated unions] is to remove from the
industrial scene unfair pressure, not fair
discussion.\51\
---------------------------------------------------------------------------
\51\ S. Rep. No. 1184, 73d 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.'' \52\
---------------------------------------------------------------------------
\52\ 78 Cong. Rec. 10,559 (1934) reprinted in 1 NLRB, ``Legislative
History of the National Labor Relations Act,'' 1935, at 1125 (1949).
---------------------------------------------------------------------------
Thus, the NLRA's legislative history strongly suggests that
Congress desired to prevent employers from using company unions
as an obstacle to collective bargaining. At the same time,
however, the act's sponsors sought to leave intact
organizations intended to promote employer-employee
communication and cooperation.
The broad language of section 8(a)(2) does not seem
consistent with a congressional intent to prohibit only
employer-employee organizations which would inhibit recognition
of, and collective bargaining with, independent unions.
However, the Congress' experience with narrow interpretations
by the courts of labor relations legislation prior to enactment
of the NLRA may explain why the NLRA's sponsors drafted section
8(a)(2) so broadly.
Specifically, in the decades preceding enactment of the
NLRA, Congress had passed various measures to allow the
development of organized labor and to ensure the right to
bargain collectively. These measures included the Erdman Act,
enacted in 1898; sections of the Clayton Act; the Railway Labor
Act; and the Norris-LaGuardia Act.\53\ Of these, the Clayton
Act and the Norris-LaGuardia Act were broadest in their scope
of coverage.\54\
---------------------------------------------------------------------------
\53\ Hardin, supra note 39, at 12-24 (providing a historical
background to the National Labor Relations Act).
\54\ 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, violated the act.\55\ Section 6 of the
Clayton Act prevented the application of the Sherman Act to
organized labor ``by providing that labor itself is not `an
article of commerce.' '' \56\ The section also specified that
labor organizations did not violate antitrust laws by
``lawfully carrying out'' their ``legitimate objectives.'' \57\
---------------------------------------------------------------------------
\55\ Hardin, supra note 39, at 9-10, 16.
\56\ Hardin, supra, at 16.
\57\ Id.
---------------------------------------------------------------------------
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.\58\ The second
paragraph of section 20 listed several labor activities and
provided that ``none of [those] activities shall `be considered
or held to be violations of any law of the United States,' ''
and prohibited enjoining those activities even if the
requirements of the first paragraph were met.\59\
---------------------------------------------------------------------------
\58\ 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.
\59\ Hardin, supra note 39, at 17.
---------------------------------------------------------------------------
Thus, Congress attempted to permit organized labor to
develop through language in the Clayton Act which specifically
prohibited various types of interference with organized labor.
Some of these attempts were thwarted, however.
Despite the seemingly broad scope of sections 6 and 29 of
the Clayton Act, the Supreme Court interpreted both sections
very narrowly in Duplex Printing Press Co. v. Deering. The
Court interpreted the first paragraph of section 20 as
approving of existing labor-injunction practice rather than as
imposing more stringent requirements for the issuance of
injunctions against organized labor.\60\ 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.\61\ The Court interpreted the Clayton Act as having
minimal impact on barriers to union development and activity,
despite statutory language which would suggest otherwise.
---------------------------------------------------------------------------
\60\ Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921)
(construed in Hardin, Supra note 39, at 18).
\61\ Id.
---------------------------------------------------------------------------
Given the Court's narrow interpretation of the Clayton Act,
an the failure of the Recovery Act to ensure the right to
organize the bargain collectively it was not surprising that
Congress drafted section 8(a)(2) of the NLRA broadly.\62\ Prior
to the period in which the NLRA was enacted, courts often
resisted efforts designed to permit the growth of organized
labor and collective bargaining.\63\ Thus, to ensure employees
the rights to organize and bargain collectively, Congress
expansively crafted the prohibition in section 8(a)(2) of the
NLRA.
---------------------------------------------------------------------------
\62\ The definitional provisions in section 13 of the Norris-
LaGuardia Act were also drafted broadly, again demonstrating Congress's
tendency toward drafting pro-labor acts broadly in this period. Hardin,
supra note 39, at 23-24.
\63\ Hardin, supra note 39, at ch. 1.
---------------------------------------------------------------------------
As the previous discussion on employee involvement
indicates, a broad-sweeping prohibition of all employer-
employee organizations no longer serves the interests of giving
workers an effective voice in their workplace. Although the
right to independent representation remains a fundamental
principle of Federal labor law, nothing about modern employee
involvement interferes with that right.
Like all aspects of society, today's workplace is very
different than it was 60 years ago. In 1935, organized labor
was in its formational stages and was at the mercy of employers
intent on derailing its development. They myriad labor
protections on the books today--the Fair Labor Standards Act,
the Occupational Safety and Health Act, the Worker Adjustment
and Retraining Notification (WARN) Act and the Family and
Medical Leave Act--are testimony to the tremendous influence
and power of independent labor unions to protect working men
and women.
Likewise, working men and women have changed and so,
consequently, have their needs in the workplace. The demands
on, and skills required of, workers in todays information-based
economy are very different than those prevalent in the
manufacturing-driven economy of the early 20th century. The
work force of today mirrors the demographic changes of the
United States as a whole, and thus, the interests and values of
workers are increasingly more diverse.
The nature of work, for both employees and managers, has
also evolved tremendously in 60 years from the perspective of
both technological and organizational developments. Workplace
structures that have the flexibility to meet the situational
and differing needs of employees, while also addressing the
productivity demands of employees, are at a premium in the
modern working environment. While formal representation through
an independent labor organization will remain the preferred
form of organization in many workplaces, clearly, there must be
a place in this Nation's labor laws for cooperative
arrangements between employees and employers to address the
challenges and demands of working in a globally competitive
marketplace.
IV. Legislative History and Committee Action
On January 30, 1995, Senator Kassebaum, along with Senators
Jeffords, Gregg, and Gorton, introduced the Teamwork for
Employees and Management (TEAM) Act, S. 295.
On February 9, 1995, the Senate Committee on Labor and
Human Resources held a hearing (S. Hrg. 104-20) on the TEAM
Act. The following individuals provided testimony:
Don Skiba, Julie Smith, Johnny Albertson and Angie
Cowan of TRW Corporation, Cookeville, TN.
Kevin King and Lori Garrett of Eastman Chemical,
Kingsport, TN.
Chester McCammon of Universal Dynamics, Woodbridge,
VA.
Harold Coxson of Coleman, Coxson, Panello, Fogleman &
Cowan, Washington, DC.
David Silberman, Director of AFL-CIO Task Force on
Labor Law, Washington, DC.
Berna Price, Electromation, Elkhart, IN.
Additional statements or letters regarding S. 295 were also
received and placed in the record.
On February 8, 1996, the Senate Committee on Labor and
Human Resources held a second hearing (S. Hrg. 104-386) on the
TEAM Act. The following individuals provided testimony:
Molly Dalman, Michael Klein, Anne Nagy and Bonny Topp
of Donnelly Corp., Holland, MI.
Christopher Fuldner, president of EFCO Corp., Monett,
MO.
Richard Wellins, senior vice president, Development
Dimensions International, Pittsburgh, PA.
David Khorey, counsel to Donnelly Corp., Holland, MI.
Jonathan Hiatt, general counsel to AFL-CIO,
Washington, DC.
Alan Reuther, legislative director, United Auto
Workers, Washington, DC.
Additional statements and letters on S. 295 were also
received and placed in the record.
On April 17, 1996, the Senate Committee on Labor and Human
Resources met in executive session to consider S. 295. A quorum
being present, the committee voted on the following amendments:
Senator Kennedy offered an amendment requiring the NLRB to
seek an injunction to reinstate workers discharged during
organizing drives. The amendment was defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
Senator Kennedy offered an amendment to permit treble
damages for unfair labor practices. The amendment was defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
Senator Kennedy offered an amendment requiring management
to bargain over core management decisions. The amendment was
defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
Senator Kennedy offered an amendment to change the
definition of ``supervisor'' under the NLRA. The amendment was
defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
Senator Kennedy offered an amendment to provide union
organizers with access to the work site. The amendment was
defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
Senator Simon offered an amendment to debar federal
contractors that commit unfair labor practices. The amendment
was defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
Senator Simon offered an amendment to require arbitration
when the parties cannot agree to a first contract. The
amendment was defeated.
Yeas Nays
Kennedy Kassebaum
Pell Jeffords
Dodd Coats
Simon Gregg
Harkin Frist
Mikulski DeWine
Wellstone Ashcroft
Gorton
Faircloth
The committee then voted to report S. 295 favorably.
Yeas Nays
Kassebaum Kennedy
Jeffords Pell
Coats Dodd
Gregg Simon
Frist Harkin
DeWine Mikulski
Ashcroft Wellstone
Gorton
Faircloth
V. Explanation of Bill and Committee Views
The TEAM Act clarifies that it shall not constitute or be
evidence of a violation of section 8(a)(2) of the NLRA for an
employer to establish, assist, maintain, or participate in any
organization or entity of any kind, in which employees
participate, to address matters of mutual interest, including,
but not limited to, issues of quality, productivity, and
efficiency. This language creates a safe harbor in Federal
labor law for a wide range of employee involvement initiatives.
Supervisors and workers can discuss a myriad of issues that
affect both the productive capacity of a company and the
quality of work-life.
Some of the matters of mutual interest which employee
involvement structures address will unavoidably include
discussions of conditions of work. The processes by which a
company ``produces'' its product are inextricably linked to the
terms and conditions of individuals' employment in those
processes. Lawrence Gold, general counsel of the AFL-CIO,
perhaps described this reality best when he argued before the
NLRB:
What is productivity? It's who does what, it's
whether ``A'' works certain hours, whether ``B'' gets
relief, whether a particular way of moving materials is
sound or unsound. People are affected by that, their
jobs and prerogatives, their seniority, their
vacations. All of that is the stuff of working life.
And to say that you can abstract productivity from
working conditions is something that I have a great
deal of difficulty with.\64\
---------------------------------------------------------------------------
\64\ Transcript of Proceedings Before the National Labor Relations
Board in Electromation, Inc. (Case No. 25-CA-19818) 61-62 (Sept. 5,
1991).
Indeed, if employee involvement programs were prohibited
from discussing issues related to conditions of work, their
effectiveness would be severely hampered. The phrase ``terms
and conditions of employment'' includes issues 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.\65\ Even if it
were possible to limit employee involvement to issues unrelated
to working conditions, doing so would limit their ability to be
a forum for employees and managers to develop comprehensive
strategies that contribute both to the economic well-being of
the company and to the pecuniary and non-pecuniary satisfaction
of the workforce.
---------------------------------------------------------------------------
\65\ 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 initiatives may not have, claim, or seek authority
to be the exclusive bargaining representative of employees or
to negotiate, enter into, or amend collective bargaining
agreements. This is a very significant protection that
distinguishes employee involvement programs from the company
unions of yesteryear that section 8(a)(2) was designed to
prohibit. Even after enactment of S. 295, such company unions
would continue to be unlawful under section 8(a)(2).
For example, in National Labor Relations Board v. Lane
Cotton Mills,\66\ a violation of section 8(a)(2) was found
where the employer established an in-house welfare association
and refused to bargain with a Textile Workers Organizing
Committee that had been elected by the employees. The
employer's action in this case would not fall within the safe
harbor created by the TEAM Act because management treated the
welfare association as the exclusive bargaining representative,
conduct specifically prohibited by S. 295.\67\ Similarly, in
Solmica,\68\ 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.
---------------------------------------------------------------------------
\66\ 111 F.2d 814 (5th Cir. 1940).
\67\ See also, National Labor Relations Board v. Link-Belt Co., 61
S. Ct. 358 (1941), American Tara Corp., 242 NLRB 1230 (1979).
\68\ 199 NLRB 224 (1972).
---------------------------------------------------------------------------
While opponents of the TEAM Act have argued that many of
the 1930's ``company unions'' which prompted the enactment of
section 8(a)(2) shared the beneficent characteristics of
today's employee involvement structures, a 1937 Bureau of Labor
Statistics study, entitled ``Characteristics of Company Unions,
1935'' [hereinafter ``BLS Survey''] paints a substantially
different picture. The study of 126 company unions found that
64 percent of them had been formed in response to a strike or
local union activity. The remainder had either been intended to
improve plant morale (11.2 percent or to appease public opinion
or respond to governmental encouragement of collective
bargaining (24.8 percent).\69\
---------------------------------------------------------------------------
\69\ BLS Survey at 84.
---------------------------------------------------------------------------
Even if some of the characteristics of company unions were
shared by today's employee involvement structures, there is a
critical distinction. Unlike company unions, legitimate
employee involvement programs do not pretend to serve the same
purpose as an independent labor union, which acts as the
exclusive representative of the employees for collective
bargaining and handling of grievances.
Unlike the employee involvement structures of today,
company unions in the first half of this century were being
advanced as exclusive alternatives to labor unions. And
companies were refusing to bargain with duly chosen,
independent labor unions in favor of company unions. However,
as discussed previously, these company unions rarely possessed
the essential characteristics of a genuine collective
bargaining representative.
Under S. 295, the decision to choose formal organization
and to secure independent representation remains in the hands
of the employees. Nothing in the TEAM Act interferes with that
choice. The safe harbor created in S. 295, while arguably broad
in terms of the types of employee involvement structures to
which it applies, is quite narrow in terms of the scope of
conduct related to such structures which is legitimized. The
bill states that ``it shall not constitute or be evidence of an
unfair labor practice under this paragraph for an employer'' to
establish and participate in an employee involvement program.
(Emphasis added.) Senate bill 295 also specifically provides in
section 4 that ``nothing in this amendment made by section 3
shall be construed as affecting employee rights and
responsibilities under the National Labor Relations Act other
than those contained in section 8(a)(2) of such Act.''
Thus, the other protections in section 8(a) of the NLRA
which prohibit employer conduct that interferes with the right
of employees to choose independent representation freely remain
in full force. If employee involvement programs do not prove to
be an effective means for employees to have input into the
production and management policies that affect them, those
employees retain the right at all times to organize formally
and seek union representation. Section 8(a)(1)--which makes it
an unfair labor practice for employers to interfere with,
restrain, or coerce employees in the exercise of their rights,
guaranteed by section 7 of the NLRA, to organize and bargain
collectively through representatives of their own choosing--
remains untouched by the TEAM Act.\70\ Employee involvement
programs cannot be used to interfere with employees' ability to
exercise freely section 7 rights.\71\
---------------------------------------------------------------------------
\70\ 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.
\71\ In Stone Forest Industries, Inc., 36-CA-6938 (Mar. 17, 1995),
it was held that an employer's promise, the day before a union
election, to establish a communications committee to deal with employee
grievances was a violation of section 8(a)(1) because it was used as an
inducement to persuade employees to vote against the union.
---------------------------------------------------------------------------
In addition, S. 295 was not intended to alter an employer's
obligation under section 8(a)(5) to bargain with the duly
elected representatives of employees.\72\ Thus, it is
absolutely clear that the safe harbor created in the TEAM Act
for legitimate employee involvement programs 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 veto power over the very
establishment of such a structure.
---------------------------------------------------------------------------
\72\ Senate bill 295 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, S. 295 creates a safe harbor in the NLRA for a
broad range of employee involvement programs. These legitimate
initiatives come in an infinite variety of organizational forms
and deal with a broad spectrum of workplace issues.
However, this safe harbor exists only for the purposes of
section 8(a)(2) and protects the workers' right to choose
independent representation at any time.
The committee places a high priority on the enactment of S.
295. The workplace of today is simply not the same as the
workplace that was prevalent in the America of the 1930s when
the National Labor Relations Act became law. This Nation must
prosper in an increasingly competitive and information-driven
economy where, at every level of a company, employees must have
an understanding of, and a role in, the entire business
operation.
Employee involvement in the modern workplace has proven to
be an effective strategy at increasing both the value that each
employee brings to the production process and the job
satisfaction that each employee derives from the workplace. For
these reasons, the committee recommends that the Senate
promptly pass S. 295.
This Nation's labor law must be relevant to the employer-
employee relationships of the 21st century. The committee
believes strongly that the TEAM Act is crucial to our Nation's
competitiveness as well as our workers' sense of job
satisfaction.
Significantly, the committee believes that the bill poses
no threat to the well-protected right of employees to select
representatives of their own choosing to act as their exclusive
bargaining agent. Even with the changes to the NLRA proposed in
S. 295, an employee involvement program may not engage in
collective bargaining nor may it act as the exclusive employee
representative. The prohibitions in the NLRA outlawing
interference with employees' attempts to form a union and
preventing employers from avoiding bargaining obligations by
directly dealing with employees remain unaffected by the TEAM
Act.
In sum, the TEAM Act permits supervisors and managers to
confront and solve the myriad problems and issues that arise in
a workplace. Without this important legislation, the committee
believes the Nation would be idling a vast human resource that
can yield untold dividends for the country.
VI. Cost Estimate
U.S. Congress,
Congressional Budget Office,
Washington, DC, April 29, 1996.
Hon. Nancy Landon Kassebaum,
Chairman, Committee on Labor and Human Resources, U.S. Senate,
Washington, DC.
Dear Madam Chairman: The Congressional Budget Office has
reviewed S. 295, the Teamwork for Employees and Managers Act of
1995, as ordered reported by the Committee on Labor and Human
Resources on April 17, 1996. CBO estimates that enactment of S.
295 would have no significant effect on the federal budget.
Because S. 295 would not affect direct spending or receipts,
pay-as-you-go procedures would not apply.
S. 295 contains no mandates as defined by Public Law 104-4,
and would impose no direct costs on state, local, or tribal
governments.
S. 295 would amend the National Labor Relations Act to
permit an employer to participate in employee organizations for
the purpose of addressing matters of mutual interest, so long
as these organizations do not seek to negotiate collective
bargaining agreements with the employer. The bill could affect
the workload and costs of the National Labor Relations Board by
increasing or decreasing investigations of employers'
involvement in employee relations. 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 for federal cost
implications is Christi Hawley. For state and local costs, the
staff contact is John Patterson, and for private sector costs,
the staff contact is Daniel Mont.
Sincerely,
James L. Blum
(For June E. O'Neill, Director).
VII. Regulatory Impact Statement
The committee has determined that there will be no increase
in the regulatory burden imposed by this bill.
VIII. Section-By-Section Analysis
Section 1 provides that the short title of the bill is the
``Teamwork for Employees and Management Act of 1995.''
Section 2 provides the findings and purposes of the
legislation. Specifically, the findings by the Congress
recognize the escalating demands of global competition, the
resulting need for an enhanced role for employees in workplace
decision making, the extensive use by firms of employee
involvement techniques, the positive impact of and support for
employee involvement, and the legal jeopardy for employers
engaging in employee involvement.
The purposes of the act are to protect legitimate employee
involvement programs against governmental interference, to
preserve existing protections against deceptive and coercive
employer practices, and to allow legitimate employee
involvement programs in which workers may discuss issues
involving terms and conditions of employment to continue to
evolve and proliferate.
Section 3 amends section 8(a)(2) of the National Labor
Relations Act (NLRA) to provide that 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 and efficiency. The
legislation also provides that such organizations or entities
may not have, claim, or seek authority to negotiate or enter
into collective bargaining agreements between an employer and
any labor organizations.
Section 4 provides that nothing in section 3 of the
legislation shall affect employee rights and responsibilities
under the NLRA other than those contained in section 8(a)(2) of
the NLRA.
IX. MINORITY VIEWS
Labor-management cooperation and employee involvement are
critical to the future success of our economy. Any bill that
promises to encourage them appears at first blush to be a good
idea. But what S. 295 promises and what it delivers are two
very different things.
In 1993 and 1994, the Commission on the Future of Worker-
Management Relations (the Dunlop Commission), a bi-partisan
group of labor relations experts from business, academia, and
unions, conducted an intensive study of labor-management
cooperation and employee participation. The Commission held 21
public hearings and heard testimony from 411 witnesses,
received and reviewed numerous reports and studies, and held
further meetings and working parties in smaller groups. The
Commission made one recommendation that is of particular
relevance to S. 295:
The law should continue to make it illegal to set up
or operate company-dominated forms of employee
representation. \1\
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\1\ Commission on the Future of Worker-Management Relations,
``Report and Recommendations,'' p. xvii (December 1994).
Yet now, after only two hearings, the Labor and Human
Resources Committee has voted along party lines to report this
bill, whose sole purpose is to make company-dominated forms of
employee representation lawful. The committee's action is ill-
considered and unwise. It is destructive of rights fundamental
to a democratic society and is inherently anti-union.
The administration has pledged to veto S. 295, and we
applaud that decision.
1. The National Labor Relations Act prohibits company-dominated labor
organizations because they are inherently destructive of
workplace democracy and true employee empowerment
Section 8(a)(2) of the National Labor Relations Act is one
of the core provisions of American labor law. By making
employer domination of labor organizations illegal, section
8(a)(2) ensures that all labor organizations will genuinely
represent the employees they purport to represent, rather than
the owners and managers with whom they deal over issues
relating to the terms and conditions of employment, including
wages and hours of work.
The law has recognized for more than 60 years that it is
profoundly anti-democratic to allow an employer to select the
representative of his employees. It is also profoundly arrogant
for this Committee or any employer to think that the employer
should make that choice for the employees.
If a labor organization, employee representation plan or
committee is to be the genuine voice of the employees, its
members must be selected by the employees and allowed to
operate without outside interference. This principle of
independence is so important that it is separately protected by
the Landrum-Griffin Act, which makes employer financial
assistance to a labor organization a violation of criminal law.
Senator Robert Wagner, the author of the National Labor
Relations Act (the Wagner Act), considered the prohibition of
company-dominated labor organizations to be essential to the
goals of the act, which include ``encouraging the practice and
procedure of collective bargaining'' and ``protecting the
exercise by workers of full freedom of association.'' When he
introduced the bill that became the Wagner Act, Senator Wagner
declared:
Genuine collective bargaining is the only way to
attain equality of bargaining power. * * * The greatest
obstacles to collective bargaining are company-
dominated unions, which have multiplied with amazing
rapidity. * * * [only] representatives who are not
subservient to the employer with whom they deal can act
freely in the interest of employees. * * *
For these reasons, the very first step toward genuine
collective bargaining is the abolition of the company-
dominated union as an agency for dealing with
grievances, labor disputes, wages, rules or hours of
employment.\2\
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\2\ 78 Cong. Rec. 3443 (1935).
The majority goes to great lengths to argue that Senator
Wagner and Congress did not have in mind employee
representation plans that do not negotiate labor agreements or
committees like those at the Donnelly Corporation or EFCO when
they condemned ``company unions'' in 1935 and prohibited the
domination of ``labor organizations.'' But in fact, they did
have such plans in mind, since the overwhelming majority of
company unions in 1935 never entered into any collective
bargaining agreement. The evil that Senator Wagner addressed in
1935 is the same one S. 295 would legalize today.
In NLRB v. Cabot Carbon, 360 U.S. 203 (1959), the Supreme
Court examined the legislative history of the Act's definition
of ``labor organization'' and concluded definitively that
Congress had not meant to limit it to organizations that
engaged in collective bargaining. First, Congress explicitly
considered and rejected in 1935 a proposal by the Secretary of
Labor to limit the Wagner Act's definition of ``labor
organization'' to organizations that bargain collectively.
Second, during consideration of the Taft-Hartley Act in
1947, Congress rejected a proposal very much like S. 295, which
would have permitted an employer to form or maintain ``a
committee of employees and discuss with it matters of mutual
interest, including grievances, wages, hours of employment, and
other working conditions, if the Board has not certified or if
the employer has not recognized, a representative as their
representative under section 9.'' \3\ Congress has consistently
rejected the notion that company-dominated labor organizations
are acceptable as long as they do not attempt to negotiate a
contract.
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\3\ H.R. 3020, 80th Cong., 1st Sess., 26, reprinted in 1 LMRA Leg.
Hist. at 537.
---------------------------------------------------------------------------
No good purpose is served by allowing the employer to
choose and dominate the employees' representative. Cooperation
is not truly furthered, because the employer is not really
dealing with the employees if he is dealing with his own hand-
picked ``representative.'' An employer does not need the
pretense of a team or committee if he only wants to cooperate
with himself.
2. Employer-formed teams, committees, and employee involvement plans
that do not deal with the subjects of collective bargaining
have always been legal. S. 295 is not needed to make them legal
and serves no legitimate purpose
Under section 8(a)(2) of the NLRA, employers are free to
communicate with their employees about the terms and conditions
of employment. Section 8(c) specifically guarantees employers
the right of free speech, and section 9(a) protects the right
of employees to present their grievances individually or in
groups and the right of the employer to respond and resolve
those grievances. The NLRB has upheld the right of employers to
establish suggestion boxes and to establish groups of employees
for brainstorming and for sharing information. E.I. Dupont, 311
NLRB No. 88 (1993).
The NLRB's 1977 General Foods decision, 231 NLRB 1232,
made clear that employers have the right under section 8(a)(2)
to set up production processes in which significant managerial
responsibilities are delegated to employee work teams. In that
case, employee teams, acting by consensus of their members,
made job assignments to individual team members, assigned job
rotations, and scheduled overtime among team members. As the
NLRB took pains to emphasize in Electromation, 309 NLRB 990
(1992), section 8(a)(2) does not proscribe employee involvement
programs that deal with issues of productivity, efficiency and
quality control. Where teams do not purport to represent other
employees, they will not be considered labor organizations and
will not run afoul of section 8(a)(2) even when they stray from
issues of quality and productivity and enter a grey area on
issues relating to wages, hours, and working conditions. NLRB
v. Streamway Division of Scott & Fetzer Co., 111 LRRM 2673 (6th
Cir. 1982).
Finally, the NLRB and the courts have taken a common sense
approach to section 8(a)(2) that ensures that companies will
not violate the law if their employee involvement programs
include isolated, occasional, or unintended instances of
dealing with the subjects of collective bargaining. See Vons
Grocery Co., 320 NLRB No. 5 (1995), Stoody Co., 320 NLRB No. 1
(1995), and NLRB v. Peninsula General Hospital, 36 F. 3d 1262
(4th Cir. 1994).
The flexibility of the law is reflected in the fact that
employee involvement plans are widespread in American industry
and are gaining in popularity. As the Majority admits, 75
percent of all employers surveyed by the Princeton Survey
Research Associates in 1994, and 96 percent of large employers,
already had employee involvement plans. By the Majority's own
estimate, 30,000 employee involvement plans are already in
operation. Section 8(a)(2) has not been an obstacle to this
proliferation, and S. 295 is obviously unnecessary.
3. S. 295 would legitimize employer conduct that should remain unlawful
The only decided cases the Majority has cited in support of
its argument that section 8(a)(2) should be amended
(Electromation, EFCO Corporation, and Keeler Brass) are cases
that have nothing to do with quality circles, self-managed work
teams, front-line efficiency, the introduction of new
technology or work practices, or expanding employee decision-
making.
As the NLRB wrote in Electromation:
[T]his case presents a situation in which an employer
alters conditions of employment and, as a result, is
confronted with a workforce that is discontented with
its new employment environment. The employer responds
to that discontent by devising and imposing on the
employees an organized committee mechanism composed of
managers and employees instructed to ``represent''
fellow employees. The purpose of the Action Committee
was, as the record demonstrates, not to enable
management and employees to cooperate to improve
``quality'' or ``efficiency'', but to create in
employees the impression that their disagreements with
management had been resolved bilaterally. 309 NLRB at
182 (emphasis added).
Far from being a legitimate cooperative effort on the part
of management, the action committees at Electromation were
nothing but a technique to manipulate the employees. As the
Court of Appeals noted:
[T]he company proposed and essentially imposed the
action committees upon its employees as the only
acceptable mechanism for resolution of their
acknowledged grievances. * * * Electromation
unilaterally selected the size, structure,and
procedural functioning of the committees; it decided
the number of committees and the topics to be addressed
by each * * * Also, as was pointed out during oral
argument, despite the fact that the employees were
seriously concerned about the lack of a wage increase,
no action committee was designated to consider this
specific issue. In this way, Electromation actually
controlled which issues received attention by the
committees and which did not.
In EFCO, 17-CA-16911 (1995), the Administrative Law Judge
(ALJ) found that the employee committees in question, which
dealt with benefit issues relating to employee stock option
plans and profit sharing, were different from those in
Electromation only ``in form, not substance.'' (17-CA-16911 at
28.) He found that EFCO's ;committees were established
unilaterally by management, which chose the initial membership,
participated in almost all of the meetings of the various
committees, and selected some of the issues the committees
dealt with.
Furthermore, EFCO engaged in numerous activities that were
destructive of the employees' right to form and join a union.
The ALJ found that EFCO violated section 8(a)(1) of the NLRA by
maintaining an invalid no-solicitation rule, creating the
impression of surveillance, and soliciting grievances from
employees.
EFCO's employee committees did not empower workers. They
were created or revived in the context of an organization drive
by the United Brotherhood of Carpenters, which began organizing
EFCO in 1991 and had assigned two additional organizers to the
campaign as employees in 1992.
EFCO's committees were delegated no real power, and EFCO
reserved for itself the authority to decode which
recommendations, suggestions, policies, safety rules, and
employee benefits would be adopted. In particular, the safety
committee had ``lapsed into inactivity'' for some three years
until its reactivation during the organizing drive. The ALJ
found that the safety committee was not taken seriously by the
employees, that there was ``widespread disregard, even
ridicule, of the safety committee's efforts to improve plant
safety.''
In Keeler Brass, 317 NLRB No. 161 (1995), the employee
committee in question was established to handle employee
grievances. The Board found that, rather than empowering
employees to handle grievances free of company influence, the
company dominated the committee by determining the committee's
membership eligibility rules, approving candidates, conducting
the election, counting the ballots, and soliciting employees to
vote for particular committee members.
Since the activities found violative of section 8(a)(2) in
Electromation, EFCO and Keeler Brass had nothing to do with
quality circles, self-managed work teams, increasing efficiency
on the front-lines, improving the quality of a product or
service, introducing new technology or work practices, or
expanding employee decision-making, these cases do not support
the majority's contention that section 8(a)(2) needs to be
amended.
The other two cases cited by the majority, Polaroid \4\ and
Donnelly,\5\ have not yet been tried by an ALJ. Moreover, the
Donnelly Equity Committee, by claiming to be the exclusive
collective bargaining representative of workers at one of its
plants, would still be illegal under S. 295. The bill expressly
excludes committees which ``claim or seek authority to
negotiate or enter into collective bargaining agreements.''
---------------------------------------------------------------------------
\4\ 1-CA-29966.
\5\ GR-7-CA-36843.
---------------------------------------------------------------------------
Testimony provided to the committee by Alan Reuther,
Legislative Director of the United Automobile, Aerospace, and
Agricultural Implements Workers Union (UAW), recounted efforts
by Donnelly to use its company-created Equity Committees to
thwart organizing efforts by the UAW. In particular, Mr.
Reuther testified that Donnelly had actively resisted the UAW's
organizing drive, distributing anti-union literature to workers
while trying to bolster the credibility of this Equity
Committee by expanding worker representation and referring to
the committee's work as a ``grievance resolution process.''
According to Reuther, 70 percent of the employees signed
authorization cards that designated the UAW as their
representative and asked for a representation election.
Donnelly then derailed the secret ballot union representation
vote by prompting the ``Equity Committee'' to seek resolution
of pending unfair labor practices prior to the vote.
In short, the Equity Committees so vigorously defended by
Donnelly are neither democratic not independent. Members are
not elected by employees in a secret ballot, but appointed by
supervisors or a public show of hands. Donnelly finances the
activities of its committees and sets their agendas, and
members have no authority to investigate grievances
independently.
The case law cited by the majority in support of the TEAM
Act does not justify the sweeping changes to Sec. 8(a)(2) the
majority has proposed. As Professor Charles Morris has written,
Electromation is a case ``more significant for its hype than
its type.'' \6\ The same might also be said of Electromation's
successor cases.
---------------------------------------------------------------------------
\6\ Morris, ``Deja Vu and 8(a)(2)--What's Really Being Chilled by
Electromation?'' (Apr. 30, 1994).
---------------------------------------------------------------------------
4. The real purpose of S. 295 is to impede union organizing
As Senator Wagner recognized, company-dominated labor
organizations are a major obstacle to the development of real
unions that represent employers vis a vis their employers and
that can help them achieve improvements in their wages and
working conditions.
James Rundle, a researcher at Cornell University, has shown
that employers that institute employee involvement plans after
a union organizing campaign has begun are much likelier to
defeat the union than employers who do not institute such
plans. Other researchers, including Fiorito, Grenier,
Bronfenbrenner, and Juravich, have also found profound negative
effects on union organizing where employers institute such
plans, especially where the plan or committee deals with the
employer on pay or discusses the union organizing campaign.
Not surprisingly, employers know about the effect of
employee representation plans on union organizing, and union
avoidance is an explicit purpose of many such plans. As Charles
Morris reports in his law article, ``Deja Vu and (a)(2), What's
Really being Chilled by Electromation,'' a study of employee
representation plans published by the Harvard Business School
Press in 1989 found that in every company studied, managers
cited the plans as ``a valuable and proven defense against
unionization.''
Electromation is a perfect illustration of how company-
dominated employee committees impede union organizing, and how
their disestablishment pursuant to section 8(a)(2) promotes
employee empowerment by protecting the right of employees to
form independent labor organizations. The International
Brotherhood of Teamsters petitioned for an election in 1989,
while the ``action committees'' were in operation. The company
mounted a vigorous anti-union campaign and suspended the
committees until after the election. The union lost the
election. A second election was held after a National Labor
Relations Board Administrative Law Judge found the action
committees to be in violation of section 8(a)(2) and ordered
them disbanded. The union won the election. Subsequently, after
a decertification petition was filed, a third election was
held, and the union won that vote, too.
If the proponents of S. 295 had their way, the employees at
Electromation would never have voted for a union. Today, the
workers have a 3-year collective bargaining agreement that
their union negotiated on their behalf.
5. S. 295 ignores the real impediments to employee involvement and
empowerment
According to the majority report, the Electromation
decision marked the beginning of the end of employee
involvement, leaving employers in a ``legal never-never land.''
There were only 87 cases in 1994 in which employers were
required to disestablish employee participation committees. By
contrast, there were 7,947 orders in 1994 requiring employers
to reinstate employees they had unlawfully discharged, and
8,559 orders for backpay.
In fact, it is employees who are seeking empowerment
through a union who are in a legal never-never land. Their
right to free association and free choice about representation
has not been protected, and tens of thousands of them have
suffered at the hands of anti-union employers. If the committee
were truly concerned about employee involvement it would
strengthen the remedies for unlawful discharge and seek ways to
deter employer violations--particularly during union organizing
campaigns. The right to form a union is not effectively
protected by remedies that may take 3 or more years to obtain,
long after the representation election they were meant to
affect has been lost.
Employer violations of the rights of their employees to
form and join a union have escalated dramatically over the
years.
The proportion of NLRB elections in which union supporters
are discharged is five times greater now than in the late
1950's. Union supporters are illegally fired in one out of four
elections, according to the Dunlop Commission.
The effect of this widespread, unlawful employer activity
extends far beyond the individuals who lose their jobs and the
means to support themselves and their families. Employees all
across the Nation are afraid to seek union representation. The
Dunlop Commission found that 79 percent of workers say it is
likely that employees who seek union representation will lose
their jobs.
6. Scholars overwhelmingly oppose the TEAM Act
Dr. Hoyt Wheeler, the President of the Industrial Relations
Research Association, recently wrote a letter that 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 [S. 295]--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 60 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, Chairman of the Commission on
the Future of Worker-Management Relations and Secretary of
Labor in the Ford administration, has said that the members of
the Dunlop Commission--including three former Secretaries of
Labor, a former Secretary of Commerce, the CEO of Xerox Corp.,
several prominent labor relations scholars, and a
representative of the small business community--unanimously
oppose enactment of the TEAM Act.
democratic amendments
The majority claims that its primary objective in
eliminating the protections of Sec. 9(a)(2) is to give more
authority and autonomy to employees. However, the TEAM Act
bolsters employer prerogatives without a commensurate
enhancement of employee rights under the NLRA.
At the TEAM Act Executive Session, Democrats offered a
number of amendments designed to remedy some of the
inequalities that presently inhere in the NLRA. These
amendments would have provided employees with enhanced legal
remedies for NLRA violations by an employer, debarred firms
with a pattern and practice of NLRA violations from receiving
Federal contracts, and preserved the NLRA protections of
employees who accept decision-making authority. The committee
rejected all of these amendments on party-line votes.
kennedy amendments
Senator Kennedy offered two amendments to strengthen the
remedies provided under the NLRA for unlawful discharges of
employees during union organizing campaigns. The first would
have amended section 10(1) of the NLRA to require the NLRB to
give top priority to the investigation of charges that an
employer has illegally discharged an employee during a union
organizing campaign or during the negotiation of a first
collective bargaining agreement. If the NLRB found reasonable
cause to believe the charge was valid, it would be required to
seek an injunction in federal court pending final adjudication
of the charge. The second amendment would have amended section
10(c) to provide for triple backpay and the award of attorney
fees as the remedy for illegal discharges during union
organizing drives or during the negotiation of a first
collective bargaining agreement.
Senator Kennedy offered an amendment to expand the range of
issues subject to collective bargaining. One way to increase
employee empowerment and equalize bargaining power is to ensure
that critical subjects, such as the decision to close or
relocate a plant or to subcontract bargaining unit work are not
excluded from collective bargaining. No issue is more important
to employees than the fundamental issue of whether they will
have a job at all. The amendment would have amended section 9
of the NLRA to make clear that employees can negotiate over all
issues that significantly affect wages, hours, and terms and
conditions of employment.
Senator Kennedy offered an amendment to provide employees
with as much access to union organizers and information about
unions as they have to the employer's anti-union campaign. The
amendment would have amended section 8 of the NLRA to make it
an unfair labor practice for an employer to deny a non-employee
union organizer access to the non-work areas of the employer's
facility for the purpose of conferring with employees, if the
union had filed a petition for representation with the NLRB.
The amendment would also make it unlawful for an employer to
deny a union the right to attend a meeting of employees called
by the employer to discuss representation by a labor
organization.
Senator Kennedy also filed an amendment to preserve the
status as employees protected by the NLRA of employees who
collectively, as part of a work team or committee, take on some
of the decision-making authority of managers. The amendment
would also have amended the definition of ``supervisor'' in
section 2 of the NLRA to exclude individuals whose only
supervisory role is to direct the work of another employee,
without having the power to hire, fire, discipline or discharge
the employee.
simon nlra debarment amendment
Senator Simon's NLRA debarment amendment would have allowed
the Secretary of Labor to debar from Federal contracts firms
that showed a clear pattern or practice of NLRA violations. The
Federal government already enforces a number of statutes and
executive orders that hold Federal contractors to high
standards. For example, the Davis-Bacon Act requires Federal
construction contractors to pay their workers the ``prevailing
wage'' in their locality, and Executive Order 11246 requires
Federal contractors to establish affirmative action policies in
their workplaces. Yet there is no statute or executive order in
place to require that Federal contractors abide by the NLRA.
A recent GAO Report commissioned by Senator Simon showed
that the Federal government is currently paying millions of
contract dollars per year to companies that have demonstrated a
clear pattern and practice of violating labor laws. The Report,
entitled ``Worker Protection: Federal Contractors and
Violations of Labor Law,'' showed that approximately 13 percent
(or more than $23 billion) of FY 1993 Federal contracts went to
80 firms that were found to have violated the NLRA in FY 1993-
94.
Of the 80 cases decided by the NLRB involving Federal
contractors, 44 firms interfered with their workers' right to
organize, 45 firms refused to bargain collectively with their
employees' representatives, and 33 firms discriminated against
union supporters in hiring or conditions of employment.
The GAO also identified 15 firms that were more serious
violators, in that they had either been ordered by the NLRB to
comply with a comprehensive remedy, taken actions affecting the
job status of more than 20 workers, or had a history of labor
law violations in the period preceding the time covered by the
study. Among the third group, 3 of the 15 (Beverly Enterprises,
Monfort of Colorado, and Overnite Transportation Co.) had
received several adverse Board judgments.
Senator Simon's amendment, the Federal Contractor Labor
Relations Enforcement Act of 1995, would have addressed this
problem by giving the Secretary of Labor the discretion to
debar firms that show a ``clear pattern and practice'' of NLRA
violations from receiving Federal contracts or extensions or
modifications of Federal contracts for three years.
The Simon amendment would also have given the Secretary
discretion to reduce or remove a debarment order for a firm
that demonstrates that it has complied with the rules that it
had been found to have violated, that there has been a bona
fide change of ownership, or that there has been fraud or
misrepresentation by a charging party.
Under the Simon amendment, the Secretary would have been
allowed to define ``pattern and practice'' through the
administrative rulemaking process. The Amendment would also
have left to the Secretary rulemaking authority regarding the
debarment of a parent company because of the actions of a
subsidiary.
The Simon amendment would have helped to ensure that
employers who repeatedly disregard the rights of their workers
under the NLRA would face serious economic consequences for
their failure to abide by the law. It also would have promoted
efficient and economical Federal procurement by removing
Federal support for firms that unfairly underbid their
competitors by ignoring the requirements of the NLRA.
simon first contract arbitration amendment
Senator Simon's Labor Relations First Contract Negotiations
Act of 1996 would have required mediation of first contract
negotiation disputes lasting longer than 60 days. Under the
Amendment, If an employer and a new representative have not
reached a collective bargaining agreement within 60 days of the
representative's certification, both sides would be required to
jointly select a mediator to help them reach an agreement (or
have one appointed by the Federal Mediation and Conciliation
Service). Either side would be entitled to request binding
arbitration of any matter still in controversy 30 days after
selecting the mediator.
Approximately one-third of unions never get a first
collective bargaining agreement following certification.
Estimates of the union failure rate in the 1980s range from 20
percent to 3 percent. Furthermore, many employers engage in bad
faith ``surface'' bargaining with a newly-elected union
representative. This illegal tactic significantly reduces the
odds of employees securing an initial agreement from their
employer.
On the other hand, mediation of first contract terms leads
to a first contract in approximately two-thirds of
certifications. Of the 10,783 certification notices the Federal
Mediation Conciliation Service (FMCS) received between 1986 and
1993, 6,009 (56 percent) resulted in an initial agreement. An
additional 4 percent did not need mediation. Submitting first
contract disputes to mediation could significantly decrease the
overall union failure rates.
Arbitration could prevent many first contract strikes,
which tend to last longer than contract renewal strikes handled
by mediators (FMCS). First contract strikes last an average of
45 days, and produce agreements only 54 percent of the time.
Contract renewal strikes last an average of only 30 days and
produce successful agreements 82 percent of the time.
The Simon Labor Relations First Contract Negotiations Act
would have assisted employees who have voted for union
representation to obtain the benefits of a collective
bargaining agreement with unnecessary and wasteful delay.
conclusion
S. 295 proposes to undermine workplace democracy in a
profound way. Employers would be free to create and control
employee committees, even those designed to represent employees
regarding the most basic, pocketbook issues of wages,
retirements, and health benefits.
The TEAM Act would allow employers to create a ``labor
organization,'' while controlling virtually every aspect of its
activity. The employer could select committee members, limit
its agenda or discussions, stack the committee with management
or company favorites, and even unilaterally terminate the
committee for any reason.
While the National labor Relations Act currently promotes
and protects the creation of democratically elected, equal
bargaining partners, S. 295 would authorize phony employee
organizations that would sour good labor-management relations.
Over the years, section 8(a)2 has endured for the same
reason democratic governments endure: the precious right of
self-representation allows each American to seek a prosperous
and safe future. We dissent from this bill's gratuitous attack
on the right of working men and women.
Ted Kennedy.
Barbara A. Mikulski.
Claiborne Pell.
Chris Dodd.
Tom Harkin.
Paul Wellstone.
Paul Simon.
X. Changes in Existing Law
In compliance with rule XXVI paragraph 12 of the Standing
Rules of the Senate, the following provides a print of the
statute or the part or section thereof to be amended or
replaced (existing law proposed to be omitted is enclosed in
black brackets, new matter is printed in italic, existing law
in which no change is proposed is shown in roman):
TEAMWORK FOR EMPLOYEES AND MANAGEMENT ACT OF 1995
TITLE 29--UNITED STATES CODE
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SEC. 158. UNFAIR LABOR PRACTICES.
(a) Unfair Labor Practices by Employer * * *
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(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 156 of this title, 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 issues of quality, productivity and
efficiency) and which does not have, claim or seek
authority to negotiate or enter into collective
bargaining agreements under this Act with the employer
or to amend existing collective bargaining agreements
between the employer and any labor organization;
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