[Senate Report 105-12]
[From the U.S. Government Publishing Office]



                                                        Calendar No. 33
105th Congress                                                   Report
                                 SENATE

 1st Session                                                     105-12
_______________________________________________________________________


 
            TEAMWORK FOR EMPLOYEES AND MANAGERS ACT OF 1997

                                _______
                                

                 April 2, 1997.--Ordered to be printed

 Filed under the authority of the order of the Senate on March 27, 1997

    Mr. Jeffords, from the Committee on Labor and Human Resources, 
                        submitted the following

                              R E P O R T

                             together with

                     MINORITY AND ADDITIONAL VIEWS

                         [To accompany S. 295]

    The Committee on Labor and Human Resources, to which was 
referred the bill (S. 295) to amend the National Labor 
Relations Act to allow labor management cooperative efforts 
that improve economic competitiveness in the United States to 
continue to thrive, and for other purposes, having considered 
the same, reports favorably thereon and recommends that the 
bill do pass.

                            C O N T E N T S

  I. Introduction.....................................................1
 II. Purpose and summary..............................................3
III. Background and need for legislation..............................3
 IV. Legislative history and committee action........................18
  V. Explanation of bill and committee views.........................21
 VI. Cost estimate...................................................25
VII. Regulatory impact statement.....................................25
VIII.Application of law to legislative branch........................26

 IX. Section-by-section analysis.....................................26
  X. Minority and additional views...................................27
 XI. Changes in existing law.........................................55

                            I. Introduction

    In his State of the Union address in 1996, President 
Clinton told the country: ``When companies and workers work as 
a team, they do better. And so does America.'' Unfortunately, 
our Federal labor law actually prohibits many forms of worker-
management teamwork.
    The Teamwork for Employees and Management (TEAM) Act, S. 
295, will promote greater employee involvement by removing the 
barriers created by Federal labor law. These barriers, largely 
found in section 8(a)(2) of the National Labor Relations Act 
(NLRA), were originally targeted at ``company'' unions but 
actually sweep much broader to ban many cooperative labor-
management efforts.
    This legislation, S. 295, signals a new era in employee 
relations. The bill recognizes, as President Clinton did in his 
national address, that the best workplaces for employees and 
the most productive workplaces for employers are ones where 
labor and management work together.
    The Senate has focused several of its legislative efforts 
on decentralizing decision making. In the employment arena, 
employee involvement increases local decision making and 
provides employees with a voice in how to structure the 
workplace. In workplaces where employee involvement programs 
have been implemented, employees are empowered to play a role 
in reaching decisions on many aspects of their employment.
    As this Nation enters the 21st century, the committee 
believes it important that U.S. workplace policies reflect a 
new era of labor-management relations--one that fosters 
cooperation, not confrontation. Employees want to work with 
their employers to make their workplaces both more productive 
and more enjoyable.
    A recent study of employees' views in this area indicates 
that a majority of workers want a voice in their workplace. 
They also believe that their contribution would be effective 
only if management cooperates. When asked to choose between two 
types of organizations to represent them, workers chose, by a 
3-to-1 margin, one that would have no power but would have 
management cooperation over one with power but without 
management cooperation.\1\ Employee involvement gives workers 
the best of both worlds by offering both empowerment and 
cooperation.
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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 broaddefinition in the NLRA were written 
for a different era of employer-employee relations and no longer make 
sense in today's workplace.
    The hierarchical model of the work force of the early 20th 
century, where each employee's and supervisor's job tasks were 
compartmentalized and performed in isolation, is not effective 
in the current globally competitive marketplace. Federal labor 
law must evolve to adjust to the modern reality of overlapping 
responsibilities and each employee having a sense of the whole 
production process. The TEAM Act accomplishes this evolution. 
For these reasons, the committee fully supports its enactment.

                        II. Purpose and Summary

    The purpose of S. 295, the Teamwork for Employees and 
Managers (TEAM) Act of 1997, is to amend the National Labor 
Relations Act (NLRA) to protect legitimate employee involvement 
programs against governmental interference, to preserve 
existing protections against coercive employer practices, and 
to allow legitimate employee involvement programs, in which 
workers may discuss issues involving terms and conditions of 
employment, to continue to evolve and proliferate.
    The TEAM Act would clarify the legality of employee 
involvement programs by adding a proviso to section 8(a)(2) of 
the NLRA clarifying that an employer may establish, assist, 
maintain, or participate in any organization or entity of any 
kind, in which employees participate to at least the same 
extent practicable as representatives of management 
participate, to address matters of mutual interest--including, 
among others, issues of quality, productivity, efficiency, and 
safety and health.
    The bill also specifies that such organizations may not 
have, claim, or seek authority to enter into or negotiate 
collective bargaining agreements or to amend existing 
collective bargaining agreements, nor may they claim or seek 
authority to act as the exclusive bargaining agent of 
employees. Senate bill 295 specifies that the proviso does not 
apply in a case in which a labor organization is the 
representative of such employees, and S. 295 further provides 
that the priviso does not affect other protections within the 
NLRA, thereby ensuring that employee involvement cannot be used 
as a means to avoid collective bargaining obligations. The 
amendment to section 8(a)(2) contained in the bill is designed 
to provide a safe harbor for cooperative labor-management 
efforts without weakening workers' ability to select 
independent union representation.

                III. Background and Need for Legislation

    In the wake of the Industrial Revolution, American business 
operated under the time-honored principle of the division of 
labor. This theory was based on the belief that ``when a 
workman spends every day on the same detail, the finished 
article is produced more easily, quickly, and economically.'' 
\2\ Indeed, for most of this century, the accepted American 
method of human resource management--named ``Taylorism'' after 
Frederick Taylor, a turn-of-the-century engineer and inventor--
has been top-down decision making aimed at minimizing ``brain 
work'' at the shop-floor level. Employees simply did as they 
were told by their supervisors, who also operated within 
confined parameters set by their superiors.
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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, managers began to view employees as a 
source of ideas for ``developing and applying new technology'' 
and ``improving existing methods and approaches to remain 
competitive.'' \3\ Rather than organizing workers to perform a 
single task, as had been the practice under division of labor, 
companies began instituting programs to involve employees more 
broadly in solving problems and making decisions which once 
were exclusively within the realm of management.\4\
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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, 
employees involvement is a means by which work is organized 
within a company and, as such, a way for employees and 
employers to relate to one another within an organization.
    Because of this, there is no single dominant form of 
employee involvement. It usually includes some structured 
method for addressing workplace issues through discussions 
between employees and employer representatives. Indeed, two out 
of every three employee involvement structures do not even have 
a manual of procedure, thereby allowing the participants to 
design their structure to meet their changing needs.\1\
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    \5\ See Edward E. Lawler III, Gerald E. Ledford, & Susan A. 
Morhman, Employee Involvement in America: A Study of Contemporary 
Practice (American Productivity & Quality Center: Houston, TX), at 33 
(1989).
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    Although employee involvement programs come in infinite 
varieties, for discussion purposes they can be classified in 
general terms into several categories. Five of the most common 
forms of employee involvement include:

Joint labor-management committees

    In union settings, joint labor-management committees 
provide union and management leaders with a forum for ongoing 
discussion and cooperation outside the collective bargaining 
context. In nonunion settings, the committees are composed of 
employees (elected or volunteered) in addition to management 
officials.\6\ While some of these committees have a special 
focus, most are designed to address multiple issues at the 
department or plant level and often serve as an umbrella under 
which small 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.
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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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    \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 of work-life programs

    Quality of Work-Life (QWL) programs are also designed to 
improve productivity but focus primarily on improving worker 
satisfaction. Unlike quality circles, which focus directly on 
product improvement, QWL programs are premised on the belief 
that making workers' jobs more meaningful will lead to gains in 
productivity. Techniques employed by QWL programs are intended 
to bring about fundamental changes in the relations between 
workers and managers and can include changing the decision-
making, communications, and training dimensions within an 
organization. Joint labor-management committees are frequently 
used to coordinate and monitor QWL programs.\9\
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    \9\ Moe, supra note 8, at 1158-59.
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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\
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    \10\ Ibid.
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Gainsharing

    Gainsharing is the generic term used for a variety of 
programs intended to address the problem of loss of sales and 
jobs caused by declining productivity. A common feature of 
these programs is the payment of bonuses to employees when 
productivity is increased. Gainsharing programs are often 
developed and administered by joint labor-management 
committees, which also serve as clearinghouses for employee 
suggestions for improving productivity.\11\
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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 bygranting employees greater 
involvement in the issues that most affect their work lives.'' \12\
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    \12\ Ibid.
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               employee involvement enjoys broad support

    Employees, employers, academics, and policy makers 
increasingly are extolling the virtues of employee involvement 
programs, notwithstanding the contentions of opponents of the 
TEAM Act.
    Robert Von Bruns, Melinda Weide, and Michael Scarano, team 
members at IBM's Essex Junction, Vermont facility, discussed 
the benefits of employee empowerment in their testimony before 
the Senate Committee on Labor and Human Resources. The three 
employees observed that, compared to other shifts running the 
same tools, their team's production figures were the highest 
about 85% of the time.\13\ Explaining this success, the IBM 
employees noted:
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    \13\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 15 (Feb. 12, 1997) (statement of Melinda Weide, Michael 
Scarano, and Robert Von Bruns, IBM Team Members).

          We are effective and productive because the teams are 
        empowered to make informed educated business decisions.
          A key element to the success of our teams is the 
        principle of ``Shared leadership.'' Every team member 
        has the opportunity and is encouraged to take a 
        leadership role with various tasks. For example, team 
        members take turns in reporting at status and update 
        meetings, acting as meeting facilitator and taking on 
        new projects.
          Our presence here today is an example of the team 
        process at work. We were selected by our peers, fellow 
        teammates, to bring the [team] story before this panel. 
        Our present and continued success depends on 
        teamwork.\14\
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    \14\ Ibid.

    When asked what would happen if, because of the current 
state of the law, the IBM teams would have to be disbanded, Mr. 
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Von Bruns responded.

          [I]t would be like going back to the Middle Ages in 
        the work force. We no longer would have the input that 
        we do now; those of us who are on the floor, closest to 
        the work, understand most quickly and are able to 
        respond quickest to any changes that are needed. Also, 
        the ownership that is part and parcel of teams would be 
        gone.\15\

    \15\ Id. At 22.
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    Ms. Melinda Weide, Mr. Von Bruns' colleague at the Essex 
Junction, Vermont facility, expanded on the values of employee 
participation:

          When I was hired, I was given the opportunity to 
        become a team member . . . and I accepted that 
        possibility. I was a bit skeptical because I had been 
        on other teams, but never in the business work force. 
        And to see it interact on this level is just wonderful. 
        You can accomplish so much more. You do not have to 
        wait for the answer to come from someone higher up. 
        When they are not involved, and they do not have all 
        the information, it would take them time to get the 
        information that you already have. So to be able to 
        have that power and make those decisions, it makes a 
        big difference in the kind of product that we are able 
        to put out.\16\
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    \16\ Id. At 26.

    Ms. Weide opined on the need for, and effect of, passage of 
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the TEAM Act:

          The teams would like the freedom to make the choices 
        themselves, to make the working environment a better 
        place. And a lot of times, our hands are tied. I think 
        if the TEAM Act would pass, the teams would be much 
        better, and you would see more of them. You would see 
        the productivity everywhere pick up because people 
        would go to work, they would enjoy going to work, they 
        would have that pride, because they know that they are 
        able to make a difference in the product they are 
        putting out and have a choice in what they are doing, 
        instead of having someone else tell them.\17\
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    \17\ Id. At 31.

    Managers have voiced similarly enthusiastic support for 
employee involvement. In fact, William D. Budinger, Chairman 
and C.E.O. of Rodel, Inc., attributed the very survival of his 
company to the institution of teamwork and collaborative 
decision making.\18\
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    \18\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 9 (Feb. 12, 1997) (statement of William D. Budinger, 
Chairman and C.E.O., Rodel, Inc., Newark, Delaware).

          It was clear to us that if we were going to survive, 
        we would have to learn how to be better than our 
        foreign competitors. . . . Teamwork and collaborative 
        decision making have allowed us to achieve something 
        thatis generally thought to be impossible for a small 
American company--we can successfully compete in foreign markets . . . 
Teamwork is, I believe, the reason that our company has been so 
successful competing overseas. It is American teamwork that has made 
even the quality-obsessed Japanese electronics companies choose our 
materials over their locally-made options.\19\
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    \19\ Ibid.

    Similarly, J. Thomas Bouchard, IBM Senior Vice President, 
Human Resources, informed the committee that ``[t]eamwork is so 
important to IBM's competitiveness that it is, in fact, one of 
the three major ways that we measure our success--every single 
IBMer is involved in teaming, and rewarded on how they support 
teamwork and their teammates.'' \20\ Given this glowing 
endorsement of teamwork, Mr. Bouchard understandably expressed 
grave concern that employee involvement programs were under 
siege.
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    \20\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 16 (Feb. 12, 1997) (statement of J. Thomas Bouchard, 
Senior Vice President, Human Resources, International Business Machines 
Corp.).

          [A]s a direct result of recent National Labor 
        Relations Board decisions on teams and employee 
        involvement plans, we have reviewed a number of IBM 
        ideas on teamwork and have had to impose restrictions 
        on teams in order not to run afoul of the law--even 
        though those teams made good business and common sense. 
        The argument that the current state of labor law does 
        not result in a chilling effect on teamwork in U.S. 
        companies is wrong.\21\
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    \21\ Ibid.

    Former National Labor Relations Board Member Charles I. 
Cohen iterated similar concerns, in his testimony before the 
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Committee.

          I strongly endorse the Team Act as the ``Bridge to 
        the 21st Century'' for America's companies and 
        America's jobs. Without the flexibility the TEAM Act 
        provides, many of America's companies--and with them 
        many of America's best-paying jobs--will not prosper as 
        we move into the next century. The TEAM Act should 
        become law because it will support America's companies 
        in the intensely competitive global economy in which we 
        find ourselves and keep important jobs from being swept 
        away by foreign competition.\22\
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    \22\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 59 (Feb. 12, 1997) (statement of Charles I. Cohen, 
Partner, Morgan, Lewis & Bockius).

    Mr. Cohen, relying on his experience as a practicing labor 
lawyer and former NLRB Member, went on to state that, ``. . . 
current law does not provide for a wide variety of cooperative 
workplace efforts. It is my conclusion that, having tried to 
square meaningful employee participation committees with the 
current law, it simply cannot be done.'' \23\
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    \23\ Ibid.
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    In testimony before the committee, law Professor Samuel 
Estreicher discussed the approach of current NLRA sec. 8(a)(2), 
whose broad prohibitions against any employer support of 
employee groups he believes to be unique among major Western 
industrialized countries.\24\
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    \24\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 107 (Feb. 12, 1997) (testimony of Samuel Estreicher, 
Professor of Law, New York University).

          [F]or several decades, American companies were able 
        to live with this broader prohibition. The reason for 
        that was that the model of worker-management relations 
        envisioned by 8(a)(2) also dovetailed with the way 
        American managers organized their work force. In a 
        world in which workers park their brains outside the 
        factory gate, and brainwork, in the words of Frederick 
        W. Taylor, ``was the exclusive preserve of large armies 
        of engineers and managers,'' 8(a)(2) makes some 
        sense.'' \25\
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    \25\ Id. at 108.

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    Estreicher went on to stress that:

          Today, sec. 8(a)(2), as written, is problematic for 
        American companies . . . The ``mass production'' 
        factory of the 1930's and 1940's is a relic of the 
        past. Global competitive product markets put increasing 
        pressure on managers to reduce the layers of 
        supervisors and engineers that the old hierarchical 
        structures required and to delegate increasing 
        responsibility to front-line workers. American 
        companies, particularly in [the] manufacturing sector--
        require ``smart'' workers who take ``ownership'' in 
        their jobs--who can operate computer controls and 
        understand the entireprocess involved in making a 
product or delivering a service, who can on their own (with minimal 
supervision) monitor quality and tailor their work to the special 
requirements of customers and suppliers. . . . This ongoing 
transformation of the workplace requires a high level of commitment 
from front-line workers that is flatly inconsistent with the unilateral 
style of the Taylorist school of management. Workers cannot be treated 
as passive recipients of management dictates if they are at the same 
time expected to learn new tasks and skills, rotate among work 
assignments, interact with engineers, customers and suppliers, and 
essentially supervise themselves.\26\
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    \26\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 105 (Feb. 12, 1997) (statement of Samuel Estreicher, 
Professor of Law, New York University).

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

          Employee involvement is a desirable goal whether or 
        not it increases the demand for independent 
        representation, as long [as] it does not prevent 
        workers from effectively deciding on their own whether 
        they want such representation. Because employee 
        involvement programs can enhance opportunities for 
        worker participation and improve firm performance, but 
        without foreclosing other options, legal restrictions 
        should be lifted.\27\
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    \27\ Ibid.

    Removal of legal restrictions that hamper worker 
participation is particularly critical in light of testimony of 
Professor Michael LeRoy, who estimated that ``30 percent of 
U.S. work teams are probably in violation of Section 8(a)(2).'' 
\28\ Thus, Professor LeRoy concluded that:
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    \28\ Hearing on S. 295, the Teamwork for Employees and Managers Act 
before the Senate Committee on Labor and Human Resources, 105th Cong., 
1st Sess. at 112 (Feb. 12, 1997) (statement of Professor Michael H. 
LeRoy, Institute of Labor and Industrial Relations, University of 
Illinois at Urbana-Champaign).

          I support the TEAM Act because its language continues 
        to provide meaningful protection against company unions 
        while legitimating enlightened human resource practices 
        that aim to improve communication between non-
        supervisory employees and managers; and because it 
        reasonably adapts the NLRA to the rigorsof a supply-
side, global economy.\29\
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    \29\ Ibid. Indeed, the compliance problems addressed by Professor 
LeRoy may be exacerbated by certain State laws that require an employer 
to establish safety and health committees. For example, a 1993 NLRB 
General Counsel Advice Memorandum determined that such a committee, 
established pursuant to a Tennessee statutory requirement, violated 
section 8(a)(2) of the NLRA. See Goody's Family Clothing, Inc., Case 
No. 10-CA-26718, 1993 NLRB GCM LEXIS 104 (September 21, 1993).

    Similar recognition of the important role played by 
employee involvement programs has also been voiced by any 
number of prominent public policy-makers. In its final report 
and recommendations, President Clinton's Commission on the 
Future Worker-Management Relations acknowledged that 
``[e]mployee involvement programs have diverse forms, ranging 
from teams that deal with specific problems for short periods 
to groups that meet for more extended periods.'' \30\ Perhaps 
more importantly, the President's Commission concluded:
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    \30\ Commission on the Future of Worker-Management Relations: 
Report and Recommendations, Dep't. of Labor and Dep't. of Commerce, 
December 1994.

          On the basis of the evidence, the Commission believes 
        that it is in the national interest to promote 
        expansion of employee participation in a variety of 
        forms provided it does not impede employee choice of 
        whether or not to be represented by an independent 
        labor organization. At its best, employee involvement 
        makes industry more productive and improves the working 
        lives of employees.\31\
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    \31\ Id. (emphasis added).

    Similarly, as Secretary of Labor, Robert B. Reich, 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.\32\
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    \32\ Robert B. Reich, The `Pronoun Test' for Success, the 
Washington Post, July 28, 1993, at A19.

    In response to these changes, the Department of Labor 
issued a publication to American businesses that underscored 
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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 pan work flows and 
        design or adopt more efficient production methods; and 
        they ensure high levels of safety and health.\33\
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    \33\ 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.\34\ 
It is estimated that as many as 30,000 employers currently 
employ some form of employee involvement or participation.
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    \34\ The Nature and Extent of Employee Involvement in the American 
Workplace, survey conducted by Aerospace Industries Associates, 
Electronic Industries Association, Labor Policy Association, National 
Association of Manufacturers, and Organization Resources Counselors, 
Inc., August 10, 1994.
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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 benefited'' from the process. 
Indeed, 76 percent of all workers surveyed believed that their 
companies would be more competitive if more decisions about 
production and operations were made by employees rather than 
managers.\35\
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    \35\ 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.,\36\ a 
case which many thought would clarify the legality \37\ of 
employee involvement programs. Electromation involved several 
employee participation committees within a small, nonunion 
company. Unrelated to any organizing effort,\38\ management 
created the employee teams in response to employee objections 
over several proposed changes in attendance and wage policies. 
The so-called ``action committees'' addressed the following 
workplace issues: (1) absenteeism, (2) no-smoking policy, (3) 
communication network, (4) pay progression for premium 
positions, and (5) attendance bonus program. The Board found 
that the company played the primary role in establishing the 
size, responsibilities, and goals of the committees and in 
setting the final membership and initial dates for meetings.
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    \36\ 309 N.L.R.B. No. 163 (1992).
    \37\ The two provisions of the NLRA most directly at issue in the 
debate over the legality of employee involvement programs are sections 
2(5) and 8(a)(2). Section 2(5) defines a labor organization as ``any 
organization of any kind, or any agency or employee representation 
committee or plan, in which employees participate and which exists for 
the purpose, in whole or in part, of dealing with employers concerning 
grievances, labor disputes, wages, rates of pay, hours of employment, 
or conditions of work.'' Section 8(a)(2) makes it an unfair labor 
practice for an employer ``to dominate or interfere with the formation 
or administration of any labor organization or contribute financial or 
other support to it.''
    \38\ Although the Teamsters Union began an organizing drive shortly 
after the formation of the action committees, the NLRB determined that 
the company did not establish them to interfere with the employees' 
right to choose a union. In fact, the company disbanded the committees 
once it learned of the organizing efforts to avoid charges that it was 
tainting the election process.
---------------------------------------------------------------------------
    In order to determine whether the company committed an 
unfair labor practice, the Board first found that the action 
committees were ``labor organizations'' under the NLRA. The 
term ``labor organization'' is quite broad and encompasses 
``any organization of any kind, or any agency or employee 
representation committee or plan, in which employees 
participate and which exists for the purpose, in whole or in 
part, of dealing with employers concerning grievances, labor 
disputes, wages, rates of pay, hours of employment, or 
conditions of work.'' \39\
---------------------------------------------------------------------------
    \39\ Section 2(5) of the NLRA, 29 U.S.C. Sec. 152(5) (emphasis 
added).
---------------------------------------------------------------------------
    Courts have added to the breadth of what constitutes a 
``labor organization'' by finding that the term ``dealing with 
employers'' was not limited to collective bargaining 
situations, but was a much broader concept.\40\ The Board, in 
Electromation, found that ``dealing'' included bilateral 
communication between workers and supervisors within the 
employee involvement program. Working with this wide-ranging 
definition, the NLRB held that the action committees were 
``labor organizations'' under the NLRA.
---------------------------------------------------------------------------
    \40\ See National Labor Relations Board v. Cabot Carbon Co., 360 
U.S. 203 (1959).
---------------------------------------------------------------------------
    The Board then turned to the company's role in establishing 
and operating the action committees. Under section 8(a)(2) of 
the NLRA, it is an unfair labor practice for an employer ``to 
dominate or interfere with the formation or administration of 
any labor organization or contribute financial or other support 
to it.''
    In this context, the NLRB found the company had dominated 
the committees by establishing the size, responsibilities, and 
goals of the committees, and by selecting the final makeup and 
initial meeting dates for the committees. Accordingly, the 
Board held that the company had committed an unfair labor 
practice under Federal labor law. The decision was later 
affirmed by the Seventh Circuit Court of Appeals.\41\
---------------------------------------------------------------------------
    \41\ Electromation, Inc. v. National Labor Relations Board, 35 F.3d 
1148 (7th Cir. 1994).
---------------------------------------------------------------------------
    The need for clarification of the legality of employee 
involvement programs has since moved far beyond the specific 
facts of the Electromation decision. The breadth of the 
relevant provisions of the NLRA left employers and employees in 
a legal never-never land. Furthermore, since the Electromation 
decision, the NLRB has considered charges involving the 
employee involvement efforts of some of the leading companies 
in the country and has consistently questioned the legality of 
these efforts: \42\
---------------------------------------------------------------------------
    \42\ Much has been made by opponents of S. 295 of the relatively 
small number of charges filed with the Board alleging a violation of 
section 8(a)(2). First, the NLRB process is wholly complaint-driven, 
and employees have a diminished incentive to challenge workplace 
structures which effectively meet their interest in having greater 
involvement in workplace decision making. In addition, the 
Electromation decision has had a chilling effect on legitimate employee 
involvement programs and on employers' plans to continue or expand such 
programs.

          Donnelly Corp.\43\--Named ``One of the 100 Best 
        Companies to Work for in America'' and recognized by 
        the U.S. Department of Labor (DOL) for its innovative 
        work system, the NLRB nevertheless issued a complaint 
        against Donnelly charging that its employee involvement 
        program violated section 8(a)(2). The irony was that 
        the genesis of the complaint was testimony that 
        Donnelly presented to DOL's Commission on the Future of 
        Worker-Management Relations (Dunlop Commission) on 
        ``Innovations in Worker-Management Relations.'' Dr. 
        Charles J. Morris, former editor of The Developing 
        Labor Law, heard the testimony, believed the Donnelly 
        system was a violation of section 8(a)(2), and filed 
        the initial charge.\44\
---------------------------------------------------------------------------
    \43\ GR-7-CA-36843.
    \44\ Although this charge was eventually dismissed, a Donnelly 
employee then amended an unrelated unfair labor practice charge she had 
filed to include the alleged section 8(a)(2) violation. A complaint was 
issued on this second charge and a hearing was scheduled, but the 
charge was ultimately settled on other grounds.
---------------------------------------------------------------------------
          Polaroid Corp.\45\--Also cited as ``One of the Best 
        100 Companies to Work for in America,'' the Polaroid 
        Corp. has long had an institutional commitment to 
        employee involvement and has been a model for other 
        companies establishing cooperative efforts. Despite the 
        company's attempt in the early 1900s to reconstitute 
        its successful committees to comply with section 
        8(a)(2), the Board's general counsel issued a complaint 
        challenging the new program even though it removed all 
        decision-making authority from the employees. In June 
        1996, an administrative law judge ruled that the new 
        program violated section 8(a)(2).
---------------------------------------------------------------------------
    \45\ 1-CA-29966.
---------------------------------------------------------------------------
          EFCO Corp.\46\--The EFCO Corp. first became involved 
        in employee involvement programs in the late 1970's 
        with the establishment of an employee stock ownership 
        plan (ESOP). The company then moved to utilize total 
        quality control techniques and an extensive employee 
        committee system. Four of the committees--employer 
        policy review, safety, employee suggestion, and 
        employee benefits--were challenged as violating section 
        8(a)(2) by the Carpenters' Union after an unsuccessful 
        organizing effort.\47\ Although acknowledging EFCO's 
        commitment to employee empowerment, the administrative 
        law judge nevertheless found that the committees were 
        ``labor organizations'' and that the company had 
        illegally dominated them by forming the committees, 
        choosing initial members, participating in meetings, 
        and selecting topics for discussion.
---------------------------------------------------------------------------
    \46\ 17-CA-16911 (March 7, 1995).
    \47\ The Carpenters' Union attempted to organize EFCO employees in 
the summer of 1993. However, the union never filed a petition for an 
election with the NLRB.
---------------------------------------------------------------------------
          Keeler Brass Automotive Group.\48\--A unanimous NLRB 
        ordered Keeler Brass Automotive Group to disband a 
        grievance committee established for several of its 
        plants. The Board, reversing a decision of an 
        administrative law judge, found that Keeler Brass 
        unlawfully dominated the formation of the committee and 
        interfered with its administration. In a concurring 
        opinion, Chairman Gould concluded that the committee 
        was not capable of independent action, despite the fact 
        that the committee was not created in response to union 
        organizing efforts or as a means to undercut 
        independent action by employees, participation on the 
        committee was voluntary and determined by election, and 
        employees were the only voting members of the 
        committee.
---------------------------------------------------------------------------
    \48\ 317 NLRB No. 161 (June 14, 1995).

    The Board's broad interpretation of the term ``labor 
organization,'' which includes many employee participation 
programs, and the strict limits on the role employers may play 
in such organizations make it very difficult for employee 
involvement programs to proceed successfully. Clearly, a 
legislative change must be made.

                current nlra prohibitions are too broad

    A brief look at the history of section 8(a)(2) demonstrates 
why the provision was originally crafted so broadly and why 
such breadth interferes with the preferred method of labor-
management organization in many U.S. firms today. In 1935, when 
Congress passed the NLRA, the so-called Wagner Act,\49\ 
employer-dominated (company) unions had become a focal point in 
the national debate over how to improve labor-management 
relations. The precursor to the NLRA, the National Industrial 
Recovery Act, passed in 1933, had temporarily given employees 
``the right to organize and bargain collectively through 
representatives of their own choosing.'' \50\ However, the 
Recovery Act proved to be of little value in ensuring those 
rights, in part because it left the subject of employer-
dominated unions largely unaddressed.
---------------------------------------------------------------------------
    \49\ Senator Robert Wagner was the prime sponsor of the bill which 
became the National Labor Relations Act (NLRA).
    \50\ National Industrial Recovery Act, 48 Stat. 195, 198 (1933) 
(the rights established by the Recovery Act had only temporary effect, 
because section 2 of the act contained a sunset provision).
---------------------------------------------------------------------------
    Under the Recovery Act, employers could use company unions 
as tools to avoid recognition of, and collective bargaining 
with, independently organized unions. Employers often refused 
to recognize independently formed unions on the grounds that 
employees were already represented, albeit by a company union. 
As a result, employers could establish and bargain exclusively 
with unions that were formed and operated largely at their 
direction.
    The Recovery Act permitted such abuses of company unions 
for various reasons. Primarily, the act contained inadequate 
enforcement mechanisms.\51\ Further, it did not specifically 
prohibit company unions, although the law prohibited employers 
from requiring employees to join a company union as a condition 
of employment.\52\ Last, the act granted employees the right to 
organize but did not specify ``the kind of organization, if 
any, with which employees should affiliate.'' \53\ Thus, 
consistent with the Recovery Act, and employer could appear to 
be ``recognizing and cooperating with organized labor'' while 
avoiding the dangers inherent in dealing with a union not 
subservient to the employer's interests.\54\
---------------------------------------------------------------------------
    \51\ Hardin, Patrick, The Developing Labor Law (3d ed. 1992), vol. 
1 at 25-26.
    \52\ National Industrial Recovery Act, 48 Stat 195, 198-99 (1933).
    \53\ I. Bernstein, Turbulent Years, at 38 (1970).
    \54\ Hardin, supra note 51, at 26.
---------------------------------------------------------------------------
    Recognizing the inadequacies of the Recovery Act, section 
8(a)(2) of the NLRA was specifically drafted to prevent 
employers from using company unions to avoid recognizing and 
collective bargaining with independently organized unions. 
Senator Robert Wagner, sponsor of the bill which became the 
NLRA, stated that ``[t]he greatest obstacles to collective 
bargaining are employer-dominated unions, which have multiplied 
with amazing rapidity since enactment of the recovery law.'' 
\55\
---------------------------------------------------------------------------
    \55\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, Legislative 
History of the National Labor Relations Act, 1935, at 15 (1949).
---------------------------------------------------------------------------
    According to an article printed in the New York Times 
during debate over the NLRA, the number of employees in company 
unions and increased from 432,000 in 1932, before passage of 
the Recovery Act, to 1,164,000 just 1 year later.\56\ Over 69 
percent of the company unions in existence at that time had 
been formed in the brief period following passage of the 
Recovery Act.\57\ The magnitude of this problem following 
passage of the Recovery Act was evidenced by the fact that more 
than 70 percent of the disputes coming before the National 
Labor Board (precursor to the NLRB) before enactment of the 
NLRA concerned employers' refusal to deal with properly elected 
union representatives.\58\
---------------------------------------------------------------------------
    \56\ Wagner, Robert. Company Unions: A Vast Industrial Issue, the 
New York Times, Mar. 11, 1934.
    \57\ Ibid.
    \58\ Ibid.
---------------------------------------------------------------------------
    Prior to passage of the NLRA, therefore, some employers 
used company unions as a tool to avoid collective bargaining 
with independently organized unions and to control the 
collective bargaining that did take place. Section 8(a)(2) of 
the NLRA was an important measure for ensuring that employers 
did not use company unions as an obstacle to genuine collective 
bargaining.
    However, the legislative history of the NLRA suggests that, 
while Congress strongly desired to eliminate barriers to 
genuine collective bargaining, it did not desire to ban all employer-
employee organizations. Senator Wagner, in a discussion regarding the 
advantages and disadvantages of company unions stated that:

          [t]he company union has improved personal relations, 
        group-welfare activities, and other matters which may 
        be handled on a local basis. But it has failed dismally 
        to standardize or improve wage levels, for the wage 
        question is one whose sweep embraces whole industries, 
        or States, or even the Nation.\59\
---------------------------------------------------------------------------
    \59\ Ibid.

    Senator Wagner further stated, regarding a bill containing 
provisions virtually identical to section 8(a)(2) of the NLRA, 
---------------------------------------------------------------------------
that it:

          [did] not prevent employers from setting up societies 
        or organizations to deal with problems of group 
        welfare, health, charity, recreation, insurance or 
        benefits. All of these functions can and should be 
        fulfilled by employer-employee organizations. But 
        employers should not dominate organizations which exist 
        for the purposes of collective bargaining in regard to 
        wages, hours, and other conditions of employment.\60\
---------------------------------------------------------------------------
    \60\ Hearings on S. 2926 before the Senate Committee on Education 
and Labor, 73rd Cong., 2d Sess. 9 (1934) (statement of Senator Wagner) 
reprinted in 1 NLRB, Legislative History of the National Labor 
Relations Act, 1935, at 39-40 (1949) (emphasis added).

    Thus, at the outset of debate over the NLRA, Congress 
indicated its disapproval of employer-dominated organizations 
which existed for purposes of collective bargaining but did not 
signal its disapproval of all employer-employee organizations.
    Further debate over the proposed scope of section 8(a)(2) 
confirmed that Congress did not desire to ban all employer-
employee organizations. Senator Wagner stated several times 
that ``[e]mployer-controlled organizations should be allowed to 
serve their proper function of supplementing trade unionism. . 
. .'' \61\
---------------------------------------------------------------------------
    \61\ 78 Cong. Rec. 3443 (1934) reprinted in 1 NLRB, Legislative 
History of the National Labor Relations Act, 1935, at 16 (1949); 
Wagner, Robert. Company Unions: A Vast Industrial Issue, the New York 
Times, Mar. 11, 1934.
---------------------------------------------------------------------------
    The Senate report on S. 2926, an earlier version of the 
NLRA containing provisions virtually identical to 8(a)(2), 
confirms this view. Regarding employers' use of company unions 
as an obstacle to collective bargaining, the report on the bill 
stated:

          [t]hese abuses do not seem to the committee so 
        general that the Government should forbid employers to 
        indulge in the normal relations and innocent 
        communications which are part of all friendly relations 
        between employer and employee. . . . The object of 
        [prohibiting employer-dominated unions] is to remove 
        from the industrial scene unfair pressure, not fair 
        discussion.\62\
---------------------------------------------------------------------------
    \62\ S. Rep. No. 1184, 73rd Cong., 2d Sess. (1934) reprinted in 1 
NLRB, Legislative History of the National Labor Relations Act, 1935, at 
1104 (1949).

    Senator Walsh, then Chairman of the Senate Committee on 
Education and Labor, concurred in this view. Commenting on S. 
2926, he stated that ``this . . . unfair labor practice seeks 
to remove from the industrial scene unfair pressure by the 
employer upon any labor organization that his workers may 
choose, yet leaves fair discussion unhampered.'' \63\
---------------------------------------------------------------------------
    \63\ 78 Cong. Rec. 10,559 (1934) reprinted in 1 NLRB, Legislative 
History of the National Labor Relations Act, 1935, at 1125 (1949).
---------------------------------------------------------------------------
    Thus, the NLRA's legislative history strongly suggests that 
Congress desired to prevent employers from using company unions 
as an obstacle to collective bargaining. At the same time, 
however, the act's sponsors sought to leave intact 
organizations intended to promote employer-employee 
communication and cooperation.
    The broad language of section 8(a)(2) does not seem 
consistent with a congressional intent to prohibit only 
employer-employee organizations which would inhibit recognition 
of, and collective bargaining with, independent unions. 
However, the Congress's experience with narrow interpretations 
by the courts of labor relations legislation prior to enactment 
of the NLRA may explain why the NLRA's sponsors drafted section 
8(a)(2) so broadly.
    Specifically, in the decades preceding enactment of the 
NLRA, Congress had passed various measures to allow the 
development of organized labor and to ensure the right to 
bargain collectively. These measures included the Erdman Act, 
enacted in 1898; sections of the Clayton Act; the Railway Labor 
Act; and the Norris-LaGuardia Act.\64\ Of these, the Clayton 
Act and the Norris-LaGuardia Act were broadest in their scope 
of coverage.\65\
---------------------------------------------------------------------------
    \64\ Hardin, supra note 51, at 12-24 (providing a historical 
background to the National Labor Relations Act).
    \65\ The Erdman Act and the Railway Labor Act were limited in scope 
to employees engaged in the operation of interstate trains. Hardin, 
supra note 51, at 14, 20.
---------------------------------------------------------------------------
    Congress designed sections 6 and 20 of the Clayton Act to 
prevent courts and employers from using the Sherman Act as a 
barrier to union activity and development. Under the Sherman 
Act, Federal courts were able to assert Federal question 
jurisdiction over labor disputes and frequently held that 
organized labor activities, by obstructing the flow of goods in 
interstatecommerce, violated the act.\66\ Section 6 of the 
Clayton Act prevented the application of the Sherman Act to organized 
labor ``by providing that labor itself is not `an article of commerce.' 
'' \67\ The section also specified that labor organizations did not 
violate antitrust laws by ``lawfully carrying out'' their ``legitimate 
objectives.'' \68\
---------------------------------------------------------------------------
    \66\ Hardin, supra note 51, at 9-10, 16.
    \67\ Hardin, id. at 16.
    \68\ Ibid.
---------------------------------------------------------------------------
    Section 20 of the Clayton Act was designed to greatly 
restrict the ability of courts to issue injunctions against 
organized labor activity. The first paragraph of section 20 was 
intended to reduce the use of injunctions by requiring that 
there be no adequate remedy at law and actual or threatened 
injury before issuance of an injunction.\69\ The second 
paragraph of section 20 listed several labor activities and 
provided that ``none of [those] activities shall `be considered 
or held to be violations of any law of the United States,' '' 
and prohibited enjoining those activities even if the 
requirements of the first paragraph were met.\70\
---------------------------------------------------------------------------
    \69\ Although both of these requirements were historically present 
in equity, courts had largely disregarded them in labor-injunction 
practice prior to passage of the Clayton Act. Hardin, supra note 51, at 
16-17.
    \70\ Hardin, supra note 51, at 17.
---------------------------------------------------------------------------
    Thus, Congress attempted to permit organized labor to 
develop through language in the Clayton Act which specifically 
prohibited various types of interference with organized labor. 
Some of these attempts were thwarted, however.
    Despite the seemingly broad scope of sections 6 and 20 of 
the Clayton Act, the Supreme Court interpreted both sections 
very narrowly in Duplex Printing Press Co. v. Deering. The 
Court interpreted the first paragraph of section 20 as 
approving of existing labor-injunction practice rather than as 
imposing more stringent requirements for the issuance of 
injunctions against organized labor.\71\ Further, the Court 
interpreted the phrase ``between an employer and employees'' 
contained in the first paragraph as limiting application of 
both paragraphs to cases between an employer and its own 
employees.\72\ The Court interpreted the Clayton Act as having 
minimal impact on barriers to union development and activity, 
despite statutory language which would suggest otherwise.
---------------------------------------------------------------------------
    \71\ Duplex Printing Press Co. v. Deering, 254 U.S. 443 (1921) 
(construed in Hardin, supra note 51, at 18).
    \72\ Ibid.
---------------------------------------------------------------------------
    Given the Court's narrow interpretation of the Clayton Act, 
and the failure of the Recovery Act to ensure the right to 
organize and bargain collectively, it was not surprising that 
Congress drafted section 8(a)(2) of the NLRA broadly.\73\ Prior 
to the period in which the NLRA was enacted, courts often 
resisted efforts designed to permit the growth of organized 
labor and collective bargaining.\74\ Thus, to ensure employees 
the rights to organize and bargain collectively, Congress 
expansively crafted the prohibition in section 8(a)(2) of the 
NLRA.
---------------------------------------------------------------------------
    \73\ The definitional provisions in section 13 of the Norris-
LaGuardia Act were also drafted broadly, again demonstrating Congress's 
tendency toward drafting pro-labor acts broadly in this period. Hardin, 
supra note 51, at 23-24.
    \74\ Hardin, supra note 51, at ch. 1.
---------------------------------------------------------------------------
    As the previous discussion on employee involvement 
indicates, a broad-sweeping prohibition of all employer-
employee organizations no longer serves the interests of giving 
workers an effective voice in their workplace. Although the 
right to independent representation remains a fundamental 
principle of Federal labor law, nothing about modern employee 
involvement interferes with that right.
    Like all aspects of society, today's workplace is very 
different than it was 60 years ago. In 1935, organized labor 
was in its formational stages and was at the mercy of employers 
intent on derailing its development. The myriad labor 
protections on the books today--the Fair Labor Standards Act, 
the Occupational Safety and Health Act, the Worker Adjustment 
and Retraining Notification (WARN) Act and the Family and 
Medical Leave Act--are testimony to the tremendous influence 
and power of independent labor unions to protect working men 
and women.
    Likewise, working men and women have changed and so, 
consequently, have their needs in the workplace. The demands 
on, and skills required of, workers in today's information-
based economy are very different than those prevalent in the 
manufacturing-driven economy of the early 20th century. The 
work force of today mirrors the demographic changes of the 
United States as a whole, and thus, the interests and values of 
workers are increasingly more diverse.
    The nature of work, for both employees and managers, has 
also evolved tremendously in 60 years from the perspective of 
both technological and organizational developments. Workplace 
structures that have the flexibility to meet the situational 
and differing needs of employees, while also addressing the 
productivity demands of employers, are at a premium in the 
modern working environment. While formal representation through 
an independent labor organization will remain the preferred 
form of organization in many workplaces, clearly, there must be 
a place in this Nation's labor laws for cooperative 
arrangements between employees and employers to address the 
challenges and demands of working in a globally competitive 
marketplace.

              IV. Legislative History and Committee Action

    On February 10, 1997, Senator Jeffords introduced the 
Teamwork for Employees and Managers (TEAM) Act of 1997, S. 295. 
The bill is co-sponsored by Senators Coats, Gregg, Frist, 
DeWine, Enzi, Hutchinson, Collins, Warner, McConnell, Ashcroft, 
Gorton, Grassley, Nickles, Mack, Shelby, Allard, McCain, and 
Hollings.
    On Febrary 12, 1997, the Senate Committee on Labor and 
Human Resources held a hearing (S. Hrg. 105-7) on the TEAM Act. 
The following individuals provided testimony:
    William Budinger, Chairman and CEO of Rodel, Inc., Newark, 
DE.
    J. Thomas Bouchard, Senior Vice President, IBM, Armonk, NY.
    Medlinda Weide, Michael Scarano, and Robert Von Bruns of 
IBM, Essex Junction, VT.
    Charles I. Cohen, of Morgan, Lewis & Bockius, Washington, 
DC.
    Robert Sebris, Jr., of Sebris Busto, Bellevue, WA.
    Jonathan P. Hiatt, general counsel to the AFL-CIO, 
Washington, DC.
    Robert Muehlenkamp, Assistant to the General President, 
IBT, Washington, DC.
    Samuel Estreicher, Professor of Law, New York University, 
New York, NY.
    Michael H. LeRoy, Institute of Labor and Industrial 
Relations, University of Illinois, Urbana-Champaign, IL.
    Thomas C. Kohler, Boston College Law School, Newton, MA.
    Additional statements and letters regarding S. 295 were 
received and placed in the record.
    On February 26, 1997, the Senate Committee on Labor and 
Human Resources met in executive session to consider S. 295. A 
quorum being present, the committee voted on the following 
amendment:
    Senator Kennedy offered an amendment to expand mandatory 
subjects of bargaining. The amendment was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell

    On February 28, 1997, the Senate Committee on Labor and 
Human Resources again met in executive session to consider S. 
295. A quorum being present, the committee voted on the 
following amendments:
    Senator Kennedy offered an amendment to provide that the 
TEAM Act would not apply where this is organizational activity 
among employees. The amendment was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell

    Senator Kennedy offered an amendment to require NLRB secret 
ballot election of team members. The amendment was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell

    Senator Kennedy offered an amendment to permit treble 
damages for unfair labor practices. The amendment was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell

    Senator Kennedy offered an amendment that would require a 
priority investigation, by the NLRB, of employee discharges 
that occur during a union organizing campaign. The amendment 
was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell

    On March 5, 1997, the Senate Committee on Labor and Human 
Resources again met in executive session to consider S. 295. A 
quorum being present, the committee voted on the following 
amendments:
    Senator Wellstone offered an amendment to increase remedies 
in the event of a violation of section 8(a)(2) of the NLRA. The 
amendment was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell
                                    Bingman

    Senator Kennedy offered an amendment to change the NLRA 
definition of ``supervisor.'' The amendment was defeated.
        YEAS                          NAYS
Kennedy                             Jeffords
Dodd                                Coats
Harkin                              Gregg
Mikulski                            Frist
Bingaman                            DeWine
Wellstone                           Enzi
Murray                              Hutchinson
Reed                                Collins
                                    Warner
                                    McConnell

    The committee then voted to report S. 295 favorably.
        YEAS                          NAYS
Jeffords                            Kennedy
Coats                               Dodd
Gregg                               Harkin
Frist                               Mikulski
DeWine                              Bingaman
Enzi                                Wellstone
Hutchinson                          Murray
Collins                             Reed
Warner
McConnell

               V. Explanation of Bill and Committee Views

    The TEAM Act clarifies that it shall not constitute or be 
evidence of a violation of section 8(a)(2) of the NLRA for an 
employer to establish, assist, maintain, or participate in any 
organization or entity of any kind, in which employees 
participate to at least the same extent practicable as 
representatives of management participate, to address matters 
of mutual interest, including, but not limited to, issues of 
quality, productivity, efficiency, and safety and health. This 
language creates a safe harbor in Federal labor law for a wide 
range of employee involvement initiative. Supervisors and 
workers can discuss a myriad of issues that affect both the 
productive capacity of a company and the quality of work-life.
    Some of the matters of mutual interest which employee 
involvement structures address will unavoidably include 
discussions of conditions of work. The processes by which a 
company ``produces'' its product are inextricably linked to the 
terms and conditions of individual's employment in those 
processes. Lawrence Gold, counsel to the AFL-CIO, perhaps 
described this reality best when he argued before the NLRB:

          What is productivity? It's who does what, it's 
        whether ``A'' works certain hours, whether ``B'' gets 
        relief, whether a particular way of moving materials is 
        sound or unsound. People are affected by that, their 
        jobs and prerogatives, their seniority, their 
        vacations. All of that is the stuff of working life. 
        And to say that you can abstract productivity from 
        working conditions is something that I have a great 
        deal of difficulty with.\75\
---------------------------------------------------------------------------
    \75\ Transcript of Proceedings Before the National Labor Relations 
Board of Electromation, Inc.  (Case No. 25-CA-19818) 61-62 (Sept. 5, 
1991).

    Indeed, if employee involvement programs were prohibited 
from discussing issues related to conditions of work, their 
effectiveness would be severely hampered. The phrase ``terms 
and conditions of employment'' includes issues such as 
grievance procedures, layoffs and recalls, discharge, 
workloads, vacations, holidays, sick leave, work rules, use of 
bulletin boards, change of payment from a weekly salary to an 
hourly rate, and employee physical examinations.\76\ Even if it 
were possible to limit employee involvement to issues unrelated 
to working conditions, doing so would limit their ability to be 
a forum for employees and managers to develop comprehensive 
strategies that contribute both to the economic well-being of 
the company and to the pecuniary and nonpecuniary satisfaction 
of the work force.
---------------------------------------------------------------------------
    \76\ See Hardin, supra note 51, at 885-86.
---------------------------------------------------------------------------
    Despite the breadth of the language creating the safe 
harbor, the TEAM Act retains several important protections in 
section 8(a)(2). First, the bill expressly provides that the 
TEAM Act is not applicable ``in a case in which a labor 
organization is the representative of such employees as 
provided in [NLRA] section 9(a).'' This language ensures that 
the TEAM Act only applies in nonunion settings, and clarifies 
an important goal of the bill, viz., to provide nonunion 
workers with the same right to form teams that union workers 
have. Equally important, the bill provides that employee 
involvement initiatives may not have, claim, or seek authority 
to be the exclusive bargaining representative of employees or 
to negotiate, enter into, or amend collective bargaining 
agreements. This is a very significant protection that 
distinguishes employee involvement programs from the company 
unions of yesteryear that section 8(a)(2) was designed to 
prohibit. Even after enactment of S. 295, such company unions 
would continue to be unlawful under section 8(a)(2).
    For example, in National Labor Relations Board v. Lane 
Cotton Mills,\77\ a violation of section 8(a)(2) was found 
where the employer established an in-house welfare association 
and refused to bargain with a Textile Workers Organizing 
Committee that had been elected by the employees. The 
employer's action in this case would not fall within the safe 
harbor created by the TEAM Act, both because management treated 
the welfare association as the exclusive bargaining 
representative, conduct specifically prohibited by S. 295,\78\ 
and because the TEAM Act would not apply in a union setting. 
Similarly, in Solmica,\79\ a company president suggested to his 
employees that they could resolve their differences themselves, 
without a union. The employees agreed and eventually signed a 
collective bargaining agreement with the president. Again, this 
conduct would continue to be a violation of section 8(a)(2), as 
the TEAM Act would not permit employee involvement structures, 
no matter how formal or informal, to negotiate collective 
bargaining agreements.
---------------------------------------------------------------------------
    \77\ 111 F.2d 814 (5th Cir. 1940).
    \78\ See also, National Labor Relations Board v. Link-Belt Co., 61 
S. Ct. 358 (1941), American Tara Corp., 242 NLRB 1230 (1979).
    \79\ 199 NLRB 224 (1972).
---------------------------------------------------------------------------
    While opponents of the TEAM Act have argued that many of 
the 1930's ``company unions'' which prompted the enactment of 
section 8(a)(2) shared the beneficent characteristics of 
today's employee involvement structures, a 1937 Bureau of Labor 
Statistics study, entitled Characteristics of Company Unions, 
1935 [hereinafter BLS Survey] paints a substantially different 
picture. The study of 126 company unions found that 64 percent 
of them had been formed in response to a strike or local union 
activity. The remainder had either been intended to improve 
plant morale (11.2 percent) or to appease public opinion or 
respond to governmental encouragement of collective bargaining 
(24.8 percent).\80\
---------------------------------------------------------------------------
    \80\ BLS Survey at 84.
---------------------------------------------------------------------------
    Even if some of the characteristics of company unions were 
shared by today's employee involvement structures, there is a 
critical distinction. Unlike company unions, legitimate 
employee involvement programs do not pretend to serve the same 
purpose as an independent labor union, which acts as the 
exclusive representative of the employees for collective 
bargaining and handling of grievances.
    Unlike the employee involvement structures of today, 
company unions in the first half of this century were being 
advanced as exclusive alternative to labor unions. And 
companies were refusing to bargain with duly chosen, 
independent labor unions in favor of company unions. However, 
as discussed previously, these company unions rarely possessed 
the essential characteristics of a genuine collective 
bargaining representative.
    Under S. 295, the decision to choose formal organization 
and to secure independent representation remains in the hands 
of the employees. Nothing in the TEAM Act interferes with that 
choice. The safe harbor created in S. 295, while arguably broad 
in terms of the types of employee involvement structures to 
which it applies, is quite narrow in terms of the scope of 
conduct related to such structures which is legitimized. The 
bill states that ``it shall not constitute or be evidence of an 
unfair labor practice under this paragraph for an employer'' to 
establish and participate in an employee involvement program. 
(emphasis added). Senate bill 295 also specifically provides in 
section 4 that ``nothing in this Act shall affect employee 
rights and responsibilities contained in provisions other than 
section 8(a)(2) of the National Labor Relations Act, as 
amended.''
    Thus, the other protections in section 8(a) of the NLRA 
which prohibit employer conduct that interferes with the right 
of employees to choose independent representation freely remain 
in full force. If employee involvement programs do not prove to 
be an effective means for employees to have input into the 
production and management policies that affect them, those 
employees retain the right at all times to organize formally 
and seek union representation. Section 8(a)(1)--which makes it 
an unfair labor practice for employers to interfere with, 
restrain, or coerce employees in the exercise of their rights, 
guaranteed by section 7 of the NLRA, to organize and bargain 
collectively through representatives of their own choosing--
remains untouched by the TEAM Act.\81\ Employee involvement 
programs cannot be used to interfere with employees' ability to 
exercise freely section 7 rights.\82\
---------------------------------------------------------------------------
    \81\ Similarly, the TEAM Act does not alter the prohibition in 
section 8(a)(3) making it an unfair labor practice for an employer to 
discriminate against any employee on the basis for his or her 
membership in a labor organization.
    \82\ In Stone Forest Industries, Inc., 36-CA-6938 (March 17, 1995), 
it was held that an employer's promise, the day before a union 
election, to establish a communications committee to deal with employee 
grievances was a violation of section 8(a)(1) because it was used as an 
inducement to persuade employees to vote against the union.
---------------------------------------------------------------------------
    In sum, S. 295 creates a safe harbor in the NLRA for a 
broad range of employee involvement programs. These legitimate 
initiatives come in an infinite variety of organizational forms 
and deal with a broad spectrum of workplace issues.
    However, this safe harbor exists only for the purposes of 
section 8(a)(2) and protects the workers' right to choose 
independent representation at any time.
    The committee places a high priority on the enactment of S. 
295. The workplace of today is simply not the same as the 
workplace that was prevalent in the America of the 1930's when 
the National Labor Relations Act became law. This Nation must 
prosper in an increasingly competitive and information-driven 
economy where, at every level of a company, employees must have 
an understanding of, and a role in, the entire business 
operation.
    Employee involvement in the modern workplace has proven to 
be an effective strategy at increasing both the value that each 
employee brings to the production process and the job 
satisfaction that each employee derives from the workplace. The 
Electromation case, and its progeny, have had a chilling effect 
on the existence of employee involvement programs. For these 
reasons, the committee recommends that the Senate promptly pass 
S. 295.
    This Nation's labor law must be relevant to the employer-
employee relationships of the 21st century. The committee 
believes strongly that the TEAM Act is crucial to our Nation's 
competitiveness as well as our workers' sense of job 
satisfaction.
    Significantly, the committee believes that the bill poses 
no threat to the well-protected right of employees to select 
representatives of their own choosing to act as their exclusive 
bargaining agent. Even with the changes to the NLRA proposed in 
S. 295, an employee involvement program may not engage in 
collective bargaining nor may it act as the exclusive employee 
representative. In fact, the TEAM Act applies in nonunion 
settings only. The prohibitions in the NLRA outlawing 
interference with employees' attempts to form a union and 
preventing employers from avoiding bargaining obligations by 
directly dealing with employees remain unaffected by the TEAM 
Act.
    In sum, the TEAM Act permits supervisors and managers to 
confront and solve the myriad problems and issues that arise in 
a workplace. Without this important legislation, the committee 
believes the Nation would be idling a vast human resource that 
can yield untold dividends for the country.

                           VI. Cost Estimate

                                     U.S. Congress,
                               Congressional Budget Office,
                                  Washington, D.C., March 14, 1997.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, D.C.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for S. 295, the Teamwork 
for Employees and Managers Act of 1997.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Christina 
Hawley Sadoti.
            Sincerely,
                                         June E. O'Neill, Director.
    Enclosure.

        S. 295--Teamwork for Employees and Managers Act of 1997

    CBO estimates that enacting this bill would have no 
significant effect on the federal budget. Because the bill 
would not affect direct spending or receipts, pay-as-you-go 
procedures would not apply. S. 295 contains no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act of 1995 and would impose no costs 
on state, local, or tribal governments.
    S. 295 would amend the National Labor Relations Act to 
allow employers to work with employees in ``Employee 
Involvement'' programs for the purpose of addressing matters of 
mutual interest (such as issues of quality, productivity, 
efficiency, and safety and health), so long as these 
organizations do not seek to negotiate collective bargaining 
agreements with the employers. The bill could affect the 
workload and costs of the National Labor Relations Board by 
increasing or decreasing the number of investigations of 
employers' involvement in the activities of employee groups. We 
anticipate that such effects, if any, would not be significant.
    The CBO staff contact for this estimate is Christina Hawley 
Sadoti.
    This estimate was approved by Robert A. Sunshine, Deputy 
Assistant Director for Budget Analysis.

                    VII. Regulatory Impact Statement

    The committee has determined that there will be no increase 
in the regulatory burden imposed by this bill.

             VIII. Application of Law to Legislative Branch

    S. 295 clarifies the legality of employee involvement 
programs in workplaces covered by the National Labor Relations 
Act, as amended, and as such has no application to the 
legislative branch.

                    IX. Section-By-Section Analysis

    Section 1 provides that the short title of the bill is the 
``Teamwork for Employees and Managers Act of 1997.''
    Section 2 provides the findings and purposes of the 
legislation. Specifically, the findings by the Congress 
recognize the escalating demands of global competition, the 
resulting need for an enhanced role for employees in workplace 
decision making, the extensive use by firms of employee 
involvement techniques, the positive impact of and support for 
employee involvement, and the legal jeopardy for employers 
engaging in employee involvement.
    The purposes of the act are to protect legitimate employee 
involvement programs against governmental interference, to 
preserve existing protections against deceptive and coercive 
employer practices, and to allow legitimate employee 
involvement programs in which workers may discuss issues 
involving terms and conditions of employment to continue to 
evolve and proliferate.
    Section 3 amends section 8(a)(2) of the National Labor 
Relations Act (NLRA) to provide that is shall not constitute or 
be evidence of an unfair labor practice for an employer to 
establish, assist, maintain, or participate in any organization 
or entity of any kind, in which employees participate to at 
least the same extent practicable as representatives of 
management participate, to address matters of mutual interest, 
including, but not limited to, issues of quality, productivity, 
efficiency, and safety and health. The legislation also 
provides that such organizations or entities may not have, 
claim, or seek authority to negotiate or enter into collective 
bargaining agreements between an employer and any labor 
organizations. Finally, section 3 makes clear that its proviso 
does not apply in a case in which an independent union 
represents the employees.
    Section 4 provides that nothing in section 3 of the 
legislation shall affect employee rights and responsibilities 
under the NLRA other than those contained in section 8(a)(2) of 
the NLRA.
                           X. Minority Views

    The Majority claims that S. 295 is intended to promote 
employee involvement while protecting workers' rights. In fact, 
the bill does nothing to promote legitimate employee 
involvement programs and would do serious harm to the rights of 
employees under the National Labor Relations Act. The bill 
amounts to a reversal of more than 60 years of federal labor 
law that has favored employee self-organization and discouraged 
employer domination of employee organizations. Furthermore, 
legitimate employee involvement programs have flourished under 
the existing law, and the Majority offers no valid reasons for 
changing the law.
    In 1993 and 1994, the Commission on the Future of Worker-
Management Relations (the Dunlop Commission), a bi-partisan 
group of labor relations experts from business, academia and 
unions, conducted an intensive study of labor-management 
cooperation and employee participation. The Commission held 21 
public hearings and heard testimony from 411 witnesses, 
received and reviewed numerous reports and studies, and held 
further meetings and working parties in smaller groups. The 
Commission made one recommendation that is of particular 
relevance to S. 295: ``The law should continue to make it 
illegal to set up or operate company-dominated forms of 
employee representation.'' Commission on the Future of Worker-
Management Relations, ``Report and Recommendations,'' at xvii 
(December 1994).
    Yet now, after just one hearing in this Congress, and only 
two in the last Congress, the Committee has voted along party 
lines to report this bill, whose sole purpose is to make 
company-dominated forms of employee representation lawful. The 
Committee's action is ill-considered and unwise. It destroys 
rights fundamental to a democratic society, undermines the 
purposes of the National Labor Relations Act, and legalizes an 
anti-union device, the company union, that has a shameful and 
deeply disturbing history in our country. It is especially 
troubling that this bill is being offered at a time when 
employers are increasingly turning to the use of the company 
union, in the guise of ``employee involvement,'' specifically 
to defeat union organizing campaigns.

 section 8(a)(2) is fundamental to the purposes of the national labor 
                             relations act

    The National Labor Relations Act prohibits company-
dominated labor organizations because they are inherently 
destructive of workplace democracy and true employee 
empowerment. Thus, section 8(a)(2) of the National Labor 
Relations Act, 29 U.S.C. section 158(a)(2), is one of the core 
provisions of American labor law. By making employer domination 
of labor organizations illegal, section 8(a)(2) ensures that 
all labor organizations will legitimately represent the 
employees they purport to represent, rather than the owners and 
managers with whom they deal over issues relating to the terms 
and conditions of employment, including wages and hours of work
    The law has recognized for more than 60 years that it is 
profoundly anti-democratic to allow an employer to select the 
representative of his employees. It is also profoundly arrogant 
for this Committee or any employer to think that the employer 
should make that choice for the employees.
    If a labor organization, employee representation plan or 
committee is to be the genuine voice of the employees, its 
members must be selected by those employees and allowed to 
operate without outside interference. This principle of 
independence is so important that it is separately protected by 
the Landrum-Griffin Act, which makes employer financial 
assistance to a labor organization a violation of criminal law. 
See 29 U.S.C. section 186.
    Senator Robert Wagner, the author of the National Labor 
Relations Act (the Wagner Act), considered the prohibition of 
company-dominated labor organizations to be essential to the 
goals of the act, which include ``encouraging the practice and 
procedure of collective bargaining'' and ``protecting the 
exercise by workers of full freedom of association.'' When 
Senator Wagner introduced the bill that ultimately bore his 
name he declared:

          Genuine collective bargaining is the only way to 
        attain equality of bargaining power. * * * The greatest 
        obstacles to collective bargaining are company-
        dominated unions, which have multiplied with amazing 
        rapidity. * * * [only] representatives who are not 
        subservient to the employer with whom they deal can act 
        freely in the interest of employees. * * * For these 
        reasons, the first step toward genuine collective 
        bargaining is the abolition of the company-dominated 
        union as an agency for dealing with grievances, labor 
        disputes, wages, rules or hours of employment. 1 NLRB, 
        Legislative History of the National Labor Relations 
        Act, 1935 at 16.

    The majority acknowledges that Senator Wagner and the 
Congress condemned ``company unions'' in and prohibited the 
domination of ``labor organizations'' in 1935. The majority 
erroneously claims, however, that that condemnation did not 
apply to employee representation plans that do not negotiate 
labor agreements or committees like those at the Donnelly 
Corporation or EFCO. But in fact, they did have such plans in 
mind, since the overwhelming majority of company unions in 1935 
never entered into any collective bargaining agreement. No 
technological advances, and no movement toward a global 
marketplace, can alter this fundamental fact. The evil that 
Senator Wagner addressed in 1935 is the same one S. 295 would 
legalize today.
    In NLRB v. Cabot Carbon, 360 U.S. 203 (1959), the Supreme 
Court examined the legislative history of the Act's definition 
of ``labor organization'' and concluded definitively that 
Congress had not meant to limit it to organizations that 
engaged in collective bargaining. First, Congress explicitly 
considered and rejected in 1935 a proposal by the Secretary of 
Labor to limit the Wagner Act's definition of ``labor 
organization'' to organizations that bargain collectively.
    Second, during consideration of the Taft-Hartley Act in 
1947, Congress rejected a proposal very much like S. 295, which 
would have permitted an employer to form or maintain ``a 
committee of employeesand discuss with it matters of mutual 
interest, including grievances, wages, hours of employment, and other 
working conditions, if the Board has not certified or if the employer 
has not recognized, a representative as their representative under 
section 9.'' Congress has consistently rejected the notion that 
company-dominated labor organizations are acceptable as long as they do 
not attempt to negotiate a contract. See H.R. 3020, 80th Cong., 1st 
Sess., 26, reprinted in 1 LMRA Leg. Hist. at 537.
    The prohibition of employer-dominated labor organizations 
makes sense as a practical matter as well as a theoretical 
issue. No good purpose is served by allowing the employer to 
choose and dominate the employees' representative. Cooperation 
is not truly furthered, because the employer is not really 
dealing with the employees if he is dealing with his own hand-
picked ``representative.'' An employer does not need the 
pretense of a team or committee if he only wants to cooperate 
with himself.

  employee involvement programs are flourishing under the existing law

    As the majority admits, 75 percent of all employers 
surveyed by the Princeton Survey Research Associates in 1994, 
and 96 percent of large employers, already had employee 
involvement plans. By the Majority's own estimate, 30,000 
employee involvement plans are already in operation. Section 
8(a)(2) has not been an obstacle to this proliferation, and S. 
295 is obviously unnecessary to remove any supposed chilling 
effect of current law.
    For the past twenty-five years, the NLRB has abolished 
employee committees at a rate of only about four per year. This 
is a striking contrast to the thousands of unlawful discharge 
cases decided by the Board each year. In 1995 alone, the Board 
ordered reinstatement of employees discharged illegally for 
exercising their right to self-organization in 7,478 cases. In 
8,987 cases, the Board ordered that employees fired illegally 
receive back pay.
    Furthermore, the few cases in which the Board orders 
disestablishment of employee committees do not show that the 
law impedes legitimate employee involvement plans. A study of 
section 8(a)(2) cases showed that, from 1972 to 1993, the Board 
disestablished employee committees only 58 times. Of these, 44 
were cases in which the committee was formed or used in 
response to a union organizing drive. Of the remaining 14, all 
but two were cases in which the employer used the committee to 
bypass an existing union; in the two remaining cases, the 
disestablished committees had nothing to do with productivity, 
quality, or efficiency, and did not empower employees with any 
decision-making authority. Most of the employers whose 
committees were abolished were also found guilty of illegal of 
violating the rights of their employees in other ways, such as 
illegal surveillance and interrogation, illegal threats, and 
discharging employees for union activity. Rundle concluded that 
``There is absolutely no evidence that the NLRB has ever in the 
past twenty-two years disestablished a committee of the type 
employers say they must have to be competitive.'' James Rundle, 
``The Debate over the Ban on Employer-Dominated Labor 
Organizations: What Is the Evidence?'' Friedman, Hurd, Oswald, 
and Seeber, in Restoring the Promise of American Labor Law, pp 
161-76, ILR Press (1994).
    In the three and a half years since the study, the Board 
has decided only twelve more disestablishment cases. In two of 
these cases, Stoody, 320NLRB 18 (1995), and Vons Grocery, 320 
NLRB 53 (1995), the NLRB found no violation. There, employee committees 
were established by the employer and discussed terms and conditions of 
employment, but ``did not have a `pattern or practice' of making 
proposals to management'' on such subjects. In six cases a violation 
was found when the employer established the committees during a union 
organizing campaign. One case, Peninsula General Hospital, 312 NLRB 582 
(1993), was reversed by a Court of Appeals, 36 F. 3d 1262 (4th Cir. 
1994). In another, Vic Koenig Chevrolet, 321 NLRB No. 168 (1996), the 
employer unlawfully withdrew recognition from the union, instructed 
workers not to attend union meetings and engaged in other related 
unfair labor practices.
    In three cases the Board disestablished committees where 
there was no union and no organizing drive at the time the 
committees were established. In two, Keeler Brass, 317 NLRB 
1110 (1995), and Dillon Stores, 319 NLRB 1245 (1995), the 
committees had nothing to do with productivity, quality or 
efficiency and did not empower employees with any decision-
making authority. In the third, Simmons Industries, 321 NLRB 
No. 32 (1996), the employer had created four separate 
committees, of which two, the Jay Plant Corrective Action Team 
and the Southwest City TQM Committee, were legal because their 
activities focused on product quality and operational 
efficiency, and dealt only in isolated instances with working 
conditions. Two other committees were illegal because they 
regularly dealt with terms and conditions of employment. Thus 
the employer was able to retain the committees it needed for 
quality and efficiency purposes even though working conditions 
were occasionally discussed, while the committees that clearly 
violated employee rights and served no legitimate purpose were 
abolished.
    Combined with the previously cited study, these cases 
comprise a twenty-five year pattern that offers not a single 
example to show why the law should be changed.

                   the ``chilling effect'' is a myth

    Proponents have resorted to claiming that these few cases 
exert a ``chilling effect'' on employers who want to establish 
employee involvement plans, but supposedly do not because of 
concerns about section 8(a)(2). However, employee involvement 
programs are thriving under current law. As the majority has 
admitted for over three years, more than 30,000 exist today, 
and 75% of employers use them--including over 96% of large 
employers. This alone demonstrates that there is no chilling 
effect.
    Moreover, employer representatives agree. Former NLRB 
Chairman Edward Miller, appointed to the Board by President 
Nixon, told the Dunlop Commission that the alleged chilling 
effect of current case law on employee involvement programs is 
nothing but a ``myth.'' Chairman Miller, now a prominent 
management attorney, testified as follows on behalf of the 
National Association of Manufacturers before the Dunlop 
Commission in 1993: ``While I represent management, I do not 
kid myself. If section 8(a)(2) were repealed, I have no doubt 
that in not too many months or years sham unions would again 
recur.''
    In the overwhelming majority of the decided cases, 
employers used the committees to thwart union activity, and in 
all the cases the committees purported to represent employees 
on terms and conditions of employmentwithout having been 
authorized to do so by employees they represented. Prohibiting such 
obviously unlawful activity is a proper result. There is no reason why 
an employer who seeks to establish legitimate employee involvement 
programs should be deterred by these decisions.

          current law represents a clear and balanced approach

    The existing case law under section 8(a)(2) represents a 
balance between employee protections and the legitimate 
business needs of the employer. The TEAM Act would destroy that 
balance and substitute a nearly limitless power for employers 
to form and control employee organizations. The Majority would 
have us believe that lack of clarity in the law has thrown 
employers into doubt about the legality of employee 
involvement, justifying the drastic revision they seek. There 
is no serious problem with clarity now. Furthermore, a review 
of decisions appealed to the Courts found only four cases in 
the past 25 years in which a Court of Appeals refused to 
enforce an NLRB order discharging an employee committee. The 
courts have not once disestablished a committee when the Board 
would have left one intact during at least the past 25 years.
    Considering the standards that have been developed through 
case law, it should be no surprise that legitimate employee 
involvement programs have not been abolished under current law. 
In order for the NLRB to find a violation of section 8(a)(2), 
all four of the following elements must be present:
    (1) employer domination of the employee committee;
    (2) a pattern or practice of bargaining or dealing between 
the employer and a select group of employees on the committee;
    (3) the employees on the committee must be acting as the 
representatives of their co-workers, speaking for all 
employees, not just for themselves; and
    (4) the subject matter discussed must be wages, hours, and/
or conditions of work, or the committee is not a ``labor 
organization,'' and is not regulated.
    If any one of these elements is missing, there can be no 
violation. For example, if employees formed a committee and 
elected the employee members, there would be no violation 
because the committee was not dominated by management. For 
example, in Amoco Oil Co., 14-CA-21651 (1992), the company 
dealt with an association of African-American employees 
concerning working conditions, provided the association with a 
place to meet and access to the employer's phone, FAX and copy 
machine. The NLRB General Counsel nevertheless refused to issue 
a complaint under section 8(a)(2) because the employer did not 
``guide or advise the group'' or otherwise establish or 
dominate it.
    If a committee was dominated by the employer but only 
discussed how to enhance productivity and quality, there would 
still be no violation because the committee would not be a 
labor organization. Vons Grocery Co., 320 NLRB No. 5 (1995). If 
the employer met with all employees, or even with a succession 
of groups that together constituted all employees, then no 
representation would be involved. As the NLRB explained in 
General Foods Corp., 231 NLRB 1232 (1977), discussions even of 
terms and conditions ofemployment by a ``committee of the 
whole'' does not make such a group a labor organization; accordingly, 
in such a case there can be no violation of section 8(a)(2).
    In General Foods, the NLRB made clear that employers have 
the right under section 8(a)(2) to set up production processes 
in which significant managerial responsibilities are delegated 
to employee work teams. In that case, employee teams, acting by 
consensus of their members, made job assignments to individual 
team members, assigned job rotations, and scheduled overtime 
among team members. On the basis of General Foods the NLRB 
General Counsel refused to issue section 8(a)(2) complaints 
against work teams in Harcross Pigments, Inc., 14-CA-22059 
(1993) because they ``constitute, in their aggregate, the 
Employer's entire work force.''
    The NLRB has also held that committees used to resolve 
grievances were not illegal, where the committees had decision-
making authority and were acting for management and not as 
employee representatives. Mercy Memorial Hospital, 231 NLRB 
1108 (1977); John Ascuaga's Nugget, 230 NLRB 275 (1977).
    Individual dealings with employees about terms and 
conditions of employment have never been prohibited by section 
8(a)(2). Section 8(c) specifically guarantees employers and 
employees the right of free speech, and section 9(a) protects 
the right of employees to present their grievances individually 
or in groups and the rights of the employer to respond and 
resolve those grievances. The NLRB has also upheld the right of 
employers to establish groups of employees for brainstorming 
and for sharing information, even on terms and conditions of 
employment. As long as the group does not make proposals and 
the ``purpose of such a group is simply to develop a whole host 
of ideas'' or if ``the employer simply gathers information and 
does what it wishes with such information'' there is no 
violation of section 8(a)(2). E.I. Dupont, 311 NLRB 893 (1993).
    Finally, the NLRB and the courts have taken a common sense 
approach to section 8(a)(2) that ensures that companies will 
not violate the law if their employee involvement programs 
include isolated, occasional, or unintended instances of 
dealing with the subjects of collective bargaining. Vons 
Grocery Co., 320 NLRB No. 5 (1995), Stoody Co., 320 NLRB No. 1; 
(1995), NLRB v. Peninsula General Hospital, 36 F.3d 1262 (4th 
Cir. 1994).
    To the extent there is any lack of clarity in the existing 
law it is because there have been so few cases for the NLRB to 
decide. This has provided much fodder for speculation about how 
the law might be applied in future cases. For example, in his 
testimony Professor Estreicher raised questions about whether 
General Foods, in which work teams were held not to be labor 
organizations and therefore legal, might be narrowly construed. 
But the decision is twenty years old, and it has been used as 
precedent repeatedly. It is preposterous to rewrite American 
labor law on the basis of a theoretical possibility that future 
decisions might create exceptions to the Board's 1977 General 
Foods decision requires that we rewrite American labor law.
    The amendment that Senator Dorgan offered on the Senate 
floor in the 104th Congress sought to clarify the safe havens 
for employee involvement that have already been delineated 
through case law. That amendment was a direct response to the 
complaints of some employers that the case law failed to 
provide adequate guidance to permit lawful involvement 
programs.
    Under the Dorgan amendment, section 8(a)(2) would have been 
amended to spell out the right of employers to meet with 
employees individually or in groups ``to share information, to 
brainstorm, or receive suggestions or opinions from individual 
employees, with respect to matters of mutual interest, 
including matters relating to working conditions.'' It would 
have guaranteed the right of employers to form employee teams 
that meet with management and, on occasion, discuss terms and 
conditions of employment, and also the right to form any group 
for the purpose of ``improving the quality of, or method of 
producing and distributing, the employer's product or service'' 
and to discuss on occasion, working conditions. It differed 
from S. 295 in that it did not undermine section 8(a)(2)'s ban 
on employer domination of labor organizations, and it also 
protected employees who participated in such groups from losing 
their rights to collective activity through being reclassified 
as supervisors or managers as a result of their participation.
    The majority misleadingly cites the Dunlop Commission in 
support of their arguments for S. 295. The Dorgan amendment 
included more revisions to section 8(a)(2), to accommodate 
employer concerns, than the Dunlop Commission recommended. Yet 
it was rejected by the 104th Congress on party lines. This 
shows that TEAM Act is not about clarifying the law, it is 
about legalizing employer domination of employee organizations.

       s. 295 would obscure the boundaries of permissible conduct

    Ironically, the TEAM bill would not only upset the balance 
of the existing law, it would actually blur the boundaries of 
permissible employer behavior. The language of the bill is in 
some places contradictory and in other places misleading, and 
appears intended to obscure its actual purpose.
    On the key issue of whether the employee committees may 
``address'' wages, hours, and terms and conditions of 
employment, the authors of the TEAM bill used the words, 
``matters of mutual interest, including, but not limited to, 
issues of quality, productivity, efficiency, and safety and 
health.'' This language is devious because it does not appear 
to specify that terms and conditions would be permissible 
subjects for employer-dominated employee organizations. But, as 
Senator Dodd pointed out at the Committee markup of the bill, 
language such as ``including but not limited to'' is familiar 
to all experienced legislators. It signals the drafter's intent 
to cover many things not specified in the bill. The authors of 
S. 295, however, made sure that the meaning they intended that 
catchall phrase to cover would not be in doubt. The Purposes 
section which specifies that the bill is intended to legalize 
``employee involvement programs, in which workers may discuss 
issues involving terms and conditions of employments.''
    And certainly the bill's proponents understand exactly what 
the Act would accomplish. At the Committee hearing on S. 295, 
former NLRB Member Charles Cohen, testifying in support of the 
bill, had the following exchange with Senator Reed:

          Senator Reed. Let me ask a question of Mr. Cohen, who 
        is an expert in the field. You have read the TEAM Act 
        as proposed.As I read it, it seems to me that an 
employer could select unilaterally members of the team as long as they 
are roughly equivalent to the number of management members, and that 
they could talk about quality, productivity and efficiency, but they 
are not limited to talking about that--in fact, there are no limits to 
what they could talk about, so effectively, they could talk about 
wages, hours, conditions--and as long as this group does not purport to 
be an exclusive bargaining agent, they would be totally legal. Is that 
your interpretation?
          Mr. Cohen. Let me try it this way, Senator----
          Senator Reed. Could you answer my question?
          Mr. Cohen. I believe the answer to that is probably 
        yes. . . .

    In place of the term ``dealing with,'' which has a well 
established meaning, the authors of the TEAM bill use the term 
``address,'' which has no precedent anywhere in the Act. It is 
only when we reach the words ``does not have, claim, or seek 
authority to be the exclusive bargaining representative of the 
employees or to negotiate or enter into collective bargaining 
agreements . . .'' that the intent becomes apparent. Employers 
would be able to engage in actual bargaining with an employee 
organization that they established and controlled as long as 
they did not ``enter into collective bargaining agreements.''
    The term ``collective bargaining agreement,'' however, is 
not defined by the Act, so the meaning of ``enter into 
collective bargaining agreements'' is not clear. In its common 
usage a collective bargaining agreement is written, so that 
Board and the courts would likely treat it that way. If so, S. 
295 means that employee committees, dominated by the employer, 
could engage in unlimited bargaining as long as no written 
contract was signed. Furthermore, the employer would be under 
no obligation to bargain in good faith with the organization, 
because section 8(a)(5)'s requirement of good faith negotiation 
applies only to an exclusive representative. Thus employees 
would not be able to enforce their agreement. Is this not an 
employer's dream come true?
    The claim that the bill protects workers' freedom of choice 
by forbidding employer-dominated employee committees 
proclaiming exclusive representation is particularly 
disingenuous. All an employer would need to do to evade this 
proscription is simply avoid the words ``exclusive 
representative.'' A more unbalanced provision is hard to 
imagine.
    The bill would also inject significant confusion into the 
realm of employee involvement schemes. If the TEAM bill is 
enacted, the proscription against employer domination of a 
labor organization will still exist, but it will be either 
partially or wholly contradicted by the new proviso, which says 
it is not an unfair labor practice for an employer to 
``establish, assist, maintain, or participate in'' an employee 
organization. These actions arguably encompass the very 
criteria used to determine whether an employer is guilty of 
domination.
    Most employer actions now considered evidence of domination 
would be legalized by the TEAM Act. However, some specific 
issues that are well-settled under current law, may become 
ambiguous under S. 295. How would the Board and the courts 
decide, for example, if setting the agenda of meetings is 
evidence of domination, as existing precedents hold, or if it 
is encompassed by ``participate'' or ``assist'' or 
``maintain,'' and therefore permissible? Similarly, if an 
employer chose the members of an employee committee, or decided 
that employee members would be elected by a show of hands, 
instead of allowing employees to choose the method of 
selection, would that be domination, or would that be allowed 
because the employer made the decisions in order to 
``establish'' the organization?
    Certainly any of the above actions would be profoundly 
undemocratic, and the existing law is quite clear about them--
they are illegal. But S. 295 would provide no clear barrier to 
such actions. The Board and the courts would have to decide the 
extent to which the current standards for domination were 
eclipsed by S. 295. Considering the very small number of cases 
decided each year, the law in this area would likely remain 
unclear for many years. Employer domination would almost 
certainly be legalized to some extent, but whether the concept 
of domination would have any force at all under S. 295 is an 
open question.
    The authors of the TEAM bill seem to want employers to be 
able to establish and dominate employee organizations and 
bargain with them over wages, hours, and terms and conditions 
of employment, i.e., repeal section 8(a)(2), but they are 
embarrassed to say so. Therefore they seek to achieve the 
effect by indirect and contradictory language. As a 
consequence, if the bill becomes law, it will radically alter 
the boundaries of permissible behavior, but it will obscure, 
not clarify, where those boundaries lie.

   testimony of republican witnesses showed no need to change the law

    The majority, in their sole hearing on S. 295 in this 
Congress, failed to bring forward a single employer who had 
received even so much as a complaint, let alone an actual 
decision, from the NLRB concerning a section 8(a)(2) issue. As 
we will show in discussions of recent cases, if the Majority 
had attempted to do so, the result would have been an 
embarrassment, since none of the actual cases provides any 
justification for changing the law. The employers and employees 
who testified actually provided several illustrations of how 
employee involvement can succeed without violating the law, and 
failed to show any need to change the law.
    Three employees from IBM's Essex Junction, Vermont facility 
testified that in their three years of experience as team 
members they had never dealt with issues of wages or hours. 
Though they were described as the most successful production 
team in the plant, their activities had never conflicted with 
the law. Obviously S. 295 is not needed in order for such 
activities to proliferate.
    William D. Budinger, Chairman and C.E.O. of Rodel, Inc., 
testified about the importance of teamwork to his company, but 
claimed to fear that he was violating section 8(a)(2). However, 
his company's teams were perfectly legal, for they do not 
purport to represent other employees.
    J. Thomas Bouchard, Senior Vice President of IBM, and a 
member of the LPA Board of Directors, offered four examples of 
how employee involvement and teams can run afoul of the law. 
Yet, from the evidence he gave, none of them appear to be in 
conflict with the law. The ``diversity networks'' apparently 
form on their own, and IBM merely provides them the opportunity 
to network with each other. Since there was no evidence the 
groups were dominated, there is no reason to believe they 
violate section 8(a)(2).
    Similarly, as Bouchard described it, the efforts of 
employees to accommodate the needs of a co-worker who was a 
single parent were organized by the employees themselves. Not 
only does the law permit such activity, it encourages and 
protects it as ``concerted activity,'' which is one of the key 
employee rights of NLRA section 7, and which is protected 
against employer interference or retaliation in Sections 
8(a)(1) and 8(a)(3). The same is true of the group of fathers 
who came forward to talk about leave issues for fathers after 
the birth of their children. Their action was not just legal, 
but enjoys protection under the law.
    Finally, Bouchard erroneously claimed that section 8(a)(2) 
prevents companies from complying with state laws that require 
employers to set up safety and health committees. The NLRB 
General Counsel has held that employers can comply with state 
laws like those in Washington and Oregon that require joint 
safety and health committees without violating section 8(a)(2) 
because those laws do not require employer domination of the 
committees or unlawful interference with employee rights. In 
August 1996, the NLRB General Counsel issued an advice 
memorandum in Vanalco, Inc., finding that a Washington State 
safety committee did not violate section 8(a)(2). The General 
Counsel determined that the financial and administrative 
support the company provided to the committee constituted 
``friendly cooperation'' and ``did not constitute unlawful 
interference.'' Vanalco, at, 8-9.
    Robert Sebris, Jr., an attorney who represents management, 
made the same error. He claimed that section 8(a)(2) makes it 
illegal for employers to comply with state laws that require 
employers to establish joint safety and health committees. He 
cited an advice memorandum by the NLRB General Counsel that 
found, based on the particular facts of the case, that 
Tennessee's state law requires employers to set up committees 
in such a way that they are inevitably dominated and illegal. 
That is because the employer determines the structure and 
procedures of the committees, appoints the employee 
representatives, and sets the committee's agenda.
    But Sebris failed to cite the more recent Vanalco case from 
his own state of Washington, noted above, in which the NLRB 
General Counsel found that a joint safety and health committee 
established pursuant to that state's law did not violate 
section 8(a)(2). Moreover, in a November 13, 1996 letter to 
Rep. Elizabeth Furse, the NLRB General Counsel stated his 
opinion that Oregon's law, which is similar to Washington's, is 
also valid on its face. This is as it should be, and S. 295 
cannot be justified on the grounds that existing laws stands in 
the way of non-union joint health and safety committees.
    The majority report notes that Charles I. Cohen, a former 
member of the National Labor Relations Board (1994 to 1996) 
favors the TEAM Act. Mr.Cohen testified before this committee 
on February 12, 1997, that ``. . . current law does not provide for a 
wide variety of workplace efforts. It is my conclusion that, having 
tried to square meaningful employee participation committees with the 
current law, it simply cannot be done.''
    It is difficult to square Mr. Cohen's testimony with the 
fact that he participated in and joined in the opinions in two 
of the controlling decisions interpreting section 8(a)(2) of 
the National Labor Relations Act, decisions that strongly 
affirmed the legality of employee participation committees. In 
Stoody Co. and Vons Grocery, the Board clarified that isolated 
instances of a committee straying into wage and hour issues 
would not make the committee unlawful. For a team or a 
committee to violate section 8(a)(2), it must have a pattern or 
practice of dealing with wages, working conditions or work 
hours. These decisions clarified and broadened the scope of 
activities allowable to employee involvement committees.
    The United States Court of Appeals for the Fourth Circuit 
has held that a committee that dealt with wages or hours as an 
isolated incident does not violate section 8(a)(2), and does 
not need to be disbanded. In NLRB v. Peninsula General Hospital 
Medical Center 36 F. 3d 1262 (4th cir. 1994) the court held 
that a nurses committee established by an employer was lawful, 
even though it considered working conditions on several 
isolated occasions and made proposals to management.
    Thanks in part to Mr. Cohen's efforts as a member of the 
National Labor Relations Board, employers do not have to be 
concerned about the legality of employee participation 
committees that engage in a variety of activities and address a 
variety of topics. It is telling that in his testimony 
supporting the TEAM Act, Mr. Cohen was unable to cite a single 
case in which he believed that employers and employees would 
have been better served, had his decision not been constrained 
by the current text of section 8(a)(2).
    Professor Michael LeRoy testified on his survey of 23 
employee involvement programs provided by Fortune 500 companies 
in eight states. He found that about 30% dealt with ``issues 
generally prohibited by Electromation.'' The Majority cites his 
estimate that 30% of employee involvement programs may be 
illegal, arguing that this figure shows that ``[r]emoval of 
legal restrictions that hamper worker participation is 
particularly critical.'' But in his research paper about the 
survey, LeRoy admitted that the sample's small size ``means 
that the results and conclusions may not be generalized.'' He 
went on to point out several biases in the sample that could 
distort the results. But even more fatal to the use of his 
study as evidence about S. 295 is his statement about the 
nature of his questions, ``The survey was not detailed enough 
to determine whether an actual violation was present.'' Michael 
H. LeRoy, Can TEAM work? Implications of an Electromation and 
Dupont Compliance Analysis for the TEAM Act, 71 Notre Dame Law 
Review 242, 245 (1996).
    But that is still not all. Even if 30% of all employee 
involvement programs violated section 8(a)(2), it does not 
follow that section 8(a)(2) is a problem. It would mean that 
70% of employee involvement programs do not violate section 
8(a)(2). This raises an obvious question: if so many employers 
have employee involvement plans that do not violate the law, is 
there any reason why the other 30% should not comply with the 
law, too?
    Finally, LeRoy's support for the TEAM Act is based on a 
misreading of the law. He believes that the TEAM Act would not 
allow a dominated committee to deal with the employer on 
matters relating to wages, hours, and working conditions. As we 
show, a close reading of the law as well as the express 
admissions of its supporters, including former NLRB member 
Cohen, show that the TEAM Act would allow an employer to 
dominate an employee committee and bargain with it over those 
issues.
    The majority also cites former Secretary of Labor Robert B. 
Reich, and the Dunlop Commission Report to bolster their 
arguments for S. 295. But Secretary Robert Reich and every 
member of the Dunlop Commission publicly stated their 
opposition to S. 295. Nothing in the testimony before this 
committee or elsewhere belies these facts.

      until recently, key proponents opposed any change in the law

    If the bill is passed it will be vetoed, as the identical 
bill was vetoed last year. The question then becomes, what is 
really motivating proponents of S. 295? The answer is: 
politics. If we examine the groups pushing this bill, their 
composition, their positions on other employment laws, and 
their flip-flopping positions on this bill, we can see just how 
cynical this legislation really is.
    The ``TEAM Coalition,'' a group of 110 corporate and trade 
association members, is the driving force behind S. 295. Yet 
two of the key employer organizations in the TEAM Coalition, 
the Labor Policy Association (LPA) and the National Association 
of Manufacturers (NAM), both declared just three years ago that 
they opposed any change in section 8(a)(2). On September 8, 
1994, the Dunlop Commission held a public hearing at which 
representatives of the two groups testified on whether the 
Electromation decision, disestablishing employee committees 
that were dominated by the company, created a chilling effect 
on employee involvement that justified changing section 
8(a)(2).
    John C. Reed, Chairman of the Employee Relations Committee 
of the NAM, stated, ``The NAM believes that the current Board 
and Board Chairman should be provided time and the opportunity 
to narrow in focus and constrain that [chilling] effect through 
whatever means the Board has at its disposal. . . . So we want 
to take a `wait and see' approach.'' Similarly, Edward V. 
Knicely, Vice-President of TRW, Inc., testified for the LPA, 
``we believe that we should give the Board an opportunity. . . 
. We're willing to see how the Board rules in some of these 
future cases. But clearly, if that does not change then we are 
prepared to pursue other legislative avenues through Congress 
that would help us make the changes we believe . . . are 
necessary to continue this whole employee involvement cultural 
change.''
    Given this stance, the only reason for the LPA and the NAM 
to switch their position is if new Board decisions constrained 
employers in the use of legitimate employee involvement 
programs. Yet a letter from the Vice-President and General 
Counsel of LPA to Senator Jeffords (March 27, 1997), despite 
extensive discussion of the LPA's switch, fails to mention a 
single case in which the Board did that. LPA's General Counsel 
certainly did not have much to work with. Between Knicely's 
September 8, 1994 testimony that theLPA was waiting to see if 
legislation was necessary, and the time the TEAM Act was introduced in 
the 104th Congress, the Board decided only one case, Magan Medical 
Clinic, Inc., 314 NLRB 1083 (September 12, 1994). In Magan Medical, the 
Board found that the employer had unlawfully interfered with the 
formation of an employee committee, but had not dominated it. Because 
the committee was not dominated, the Board said that all that was 
necessary for the committee to function legally was a majority vote of 
the employees indicating that they wanted it to represent them. This 
should not be a barrier to employee involvement. Employers should not 
impose a particular employee representational system on employees who 
do not want it. In any event, there was absolutely nothing new about 
the decision, and TEAM Act proponents have not cited it as a problem.
    No matter how much the LPA may protest, there is only one 
thing that changed between the time they announced their wait-
and-see approach and the time the TEAM Act was introduced, and 
it wasn't the law. What changed was politics, and that is what 
the bill is about. When Republicans gained control of Congress 
in November 1994, the TEAM Coalition saw its chance to attack 
the rights of workers, and switched from advocating a wait-and-
see approach to pushing for virtual repeal of a key principle 
of American labor law, the ban on employer domination of labor 
organizations.
    Since the hearings in which the NAM and the LPA declared 
their opposition to changing section 8(a)(2), the NLRB has 
decided only twelve cases, about four per year. These cases put 
no new restrictions on employee committees and, in fact, two of 
the cases actually expanded and clarified the contours of 
permissible activity. Since the case law continues to be 
consistent with the wait-and-see approach that the NAM and LPA 
favored, why do they now demand a drastic change to section 
8(a)(2)?
    This anti-union, anti-worker legislative assault is 
entirely consistent with other legislative actions in which 
proponents of S. 295 have engaged. The LPA and the NAM both 
opposed the Worker Adjustment and Retraining Notification 
(WARN) Act, which simply requires employers to notify workers 
60 days in advance of a plant closing or a major layoff. They 
also opposed the Family and Medical Leave Act, which has given 
millions of workers the opportunity to take care of their 
families or themselves during serious medical conditions, 
without fear of losing their jobs. The NAM also opposed the 
Civil Rights Act Amendments of 1991. Further the NAM opposed 
increasing the minimum wage, along with other TEAM Coalition 
members, including the National Federation of Independent 
Business and the National Restaurant Association. These 
organizations claim that they want to ``empower'' employees, 
but their legislative records show that they want to be able to 
close plants without notifying employees or the community in 
advance, keep wages below the poverty level, permit rampant 
discrimination in the workplace, and fire employees who stay 
home to take care of sick children. This legislation has noting 
to do with employee involvement or employee empowerment, and 
everything to do with striking a blow against employee rights 
while the time is ripe.
    It is not necessary to speculate about the goals of the 
TEAM Coalition. A June 5, 1995 memo to member companies from 
their counsel emphasized ``two critical components of the TEAM 
Act which should not be compromised: (1) Employee involvement 
structures should be able to dealdirectly and exclusively with 
terms and conditions of employment'' and (2) that control of the 
``formation, composition and operation of EI structures is best left in 
the hands of the employer and the employees who will shape them to meet 
the needs to be addressed. Deregulation of EI [employee involvement] is 
as critical as legalization. Any attempt to specify what constitutes a 
legal employee involvement approach flies in the face of the vast 
diversity of successful EI structures that have been developed by 
employers and employees without having to follow a federal blueprint.''
    Of course, the only ``federal blueprint'' that exists right 
now is nothing more nor less than the requirement that the 
employees themselves decide what organization, if any, should 
represent them with respect to wages, hours, and working 
conditions. That employee choice should be portrayed as an 
inflexible barrier to the participation of employees in the 
decisions that affect their terms and conditions of their 
employment shows who this bill is really designed to empower: 
employers, at the expense of employees. The freedom from 
regulation that LPA demands is a freedom of the employer to 
impose, and to retract, any system of employee representation 
that the employer chooses. Any role that employees might have 
in such a process is strictly up to the good graces of the 
employer.
    This, in their own words, is what TEAM supporters want: 
employer-controlled committees dealing directly and exclusively 
with terms and conditions of employment. They have never denied 
that this is their intention. If this is not a sham union of 
exactly the type outlawed for more than 60 years, then what is? 
These employers boldly demand of Congress nothing less than 
outright repeal of section 8(a)(2), which is what the Majority, 
through S. 295, would obligingly do.
    One NAM representative, Edward Miller, was honest about the 
impact the TEAM Act would have on American workers. Former 
Chairman of the NLRB, appointed by President Nixon, Miller 
testified to the Dunlop Commission in 1993, ``While I represent 
management, I do not kid myself. If section 8(a)(2) were 
repealed, I have no doubt that in not too many months or years 
sham company unions would again recur.'' Nothing in the TEAM 
Act rebuts Chairman Miller's characterization.

   s. 295 would legalize employer conduct that should remain unlawful

    The only cases the Majority cited in support of its 
argument that section 8(a)(2) should be amended, Electromation, 
EFCO Corporation, Keller Brass, Polaroid and Donnelly, are 
cases that have nothing to do with quality circles, self-
managed work teams, front-line efficiency, the introduction of 
new technology or work practices, or expanding employee 
decision-making. If S. 295 is intended to improve American 
competitiveness and empower employees with decision-making 
authority, in good faith, without thwarting the right of 
employees to organize, then the Majority should present us with 
cases in which the NLRB has disestablished committees that met 
those criteria. If they cannot do so, then they are wasting 
time and resources on a problem that does not exist.
    As the NLRB wrote in Electromation, 309 NLRB at 182,

          This case presents a situation in which an employer 
        alters conditions of employment and, as a result, is 
        confronted with a workforce that is discontented with 
        its new employment environment. The employer responds 
        to that discontent by devising and imposing on the 
        employees an organized committee mechanism composed of 
        managers and employees instructed to ``represent'' 
        fellow employees. The purpose of the Action Committee 
        was, as the record demonstrates, not to enable 
        management and employees to cooperate to improve 
        ``quality'' or ``efficiency'', but to create in 
        employees the impression that their disagreements with 
        management had been resolved bilaterally. 309 NLRB at 
        182.

    Far from being a legitimate cooperative effort on the part 
of management, the action committees at Electromation were 
nothing but a technique to manipulate employees. As the Court 
of Appeals noted:

          The company proposed and essentially imposed the 
        action committees upon its employees as the only 
        acceptable mechanism for resolution of their 
        acknowledged grievances. . . . Electromation 
        unilaterally selected the size, structure, and 
        procedural functioning of the committees; it decided 
        the number of committees and the topics to be addressed 
        by each. . . . Also, as was pointed out during oral 
        argument, despite the fact that the employees were 
        seriously concerned about the lack of a wage increase, 
        no action committee was designated to consider this 
        specific issue. In this way, Electromation actually 
        controlled which issues received attention by the 
        committees and which did not.

    In EFCO, 17-CA-6911 (1995), the Administrative Law Judge 
(ALJ) found that the employee committees in question, which 
dealt with benefit issues relating to employee stock option 
plans and profit sharing, were different from those in 
Electromation only ``in form, not substance.'' Slip op. at 28. 
He found that EFCO's committees were established unilaterally 
by management, which chose the initial membership, participated 
in almost all of the meetings of the various committees, and 
selected some of the issues the committees dealt with.
    Furthermore, EFCO engaged in numerous activities that were 
destructive of the employees' right to form and join a union. 
The ALJ found that EFCO violated section 8(a)(1) of the NLRA by 
maintaining an invalid no-solicitation rule, creating the 
impression of surveillance, and soliciting grievances from 
employees.
    EFCO's employee committees did not empower workers. They 
were created or revived in the context of an organization drive 
by the United Brotherhood of Carpenters, which began organizing 
EFCO in 1991 and had assigned two additional organizers to the 
campaign as employees in 1992.
    EFCO's committees were delegated no real power, and EFCO 
reserved for itself the authority to decide which 
recommendations, suggestions, policies, safety rules, and 
employee benefits would be adopted. In particular, the safety 
committee had ``lapsed into inactivity'' for some three years 
until its reactivation during the organizing drive. The 
ALJfound that the safety committee was not taken seriously by the 
employees, that there was ``widespread disregard, even ridicule, of the 
safety committee's efforts to improve plant safety.''
    In Keeler Brass, 317 NLRB No. 161 (1995), the employee 
committee in question was established to handle employee 
grievances. The Board found that, rather than empowering 
employees to handle grievances free of company influence, the 
company dominated the committee by determining the committee's 
membership eligibility rules, approving candidates, conducting 
the election, counting the ballots, and soliciting employees to 
vote for particular committee members.
    Since the activities found to violate section 8(a)(2) in 
Electromation, EFCO, and Keeler Brass had nothing to do with 
quality circles, self-managed work teams, increasing efficiency 
on the front-lines, improving the quality of a product or 
service, introducing new technology or work practices, or 
expanding employee decision-making, these cases do not support 
the majority's contention that section 8(a)(2) needs to be 
amended.
    The result in the Donnelly case will not be changed even if 
S. 295 becomes law. The Donnelly Equity Committee claimed to be 
the exclusive collective bargaining representative of workers 
at one of its plants. The bill expressly excludes committees 
which ``claim or seek authority to negotiate or enter into 
collective bargaining agreements.''
    Testimony provided to the Committee in the 104th Congress 
by Alan Reuther, Legislative Director of the United Automobile, 
Aerospace, and Agricultural Implements Workers Union (UAW), 
recounted efforts by Donnelly to use its company-created Equity 
Committees to thwart organizing efforts by the UAW. In 
particular, Reuther testified that Donnelly had actively 
resisted the UAW's organizing drive, distributing anti-union 
literature to workers while trying to bolster the credibility 
of this Equity Committee by expanding worker representation and 
referring to the committee's work as a ``grievance resolution 
process.''
    According to Reuther, 70 percent of the employees signed 
authorization cards that designated the UAW as their 
representative and asked for a representation election. 
Donnelly then derailed the secret ballot union representation 
vote by prompting the ``Equity Committee'' to seek resolution 
of pending unfair labor practices prior to the vote.
    The Donnelly Equity Committees, upon scrutiny, turn out to 
be nothing but an old fashioned company union, used, just like 
the company unions of the 1930's, to try to prevent employees 
from organizing. The Polaroid case began not as a section 
8(a)(2) charge, but as a charge under the Labor Management 
Reporting and Disclosure Act (LMRDA) by an employee against the 
conduct of officer elections to the ``Employees' Committee,'' 
which made recommendations to management concerning company 
policies, benefits, wages, hours, and working conditions. The 
Labor Department issued a preliminary finding that the 
elections did not comply with the LMRDA's requirements that are 
designed to ensure that labor organizations observe certain 
democratic practices, in this case, the election of officers by 
the employees they represent. Polaroid dissolved the Employees' 
Committee rather than hold the required election, stating that 
an election would be ``disruptive'' and ``divisive.'' 
Subsequently, Polaroid set up anotherorganization. Like the 
Employees' Committee, the new organization was established to deal with 
terms and conditions of employment not quality of product or efficiency 
of the production process.
    The case law cited by the majority in support of the TEAM 
Act does not justify any changes to Section 8(a)(2). Moreover, 
in the three years that the Republicans have been pushing this 
legislation, they have failed to cite a single case 
demonstrating that the law needs to be changed. Nor has the 
majority produced a single witness to testify that he or she 
has done anything legitimate that has been ruled unlawful by 
the NLRB or the courts. The majority has utterly failed to make 
even the most superficial case for changing the law. Outright 
repeal of a labor law that has worked well for over sixty years 
requires far more than this.

the dunlop commission report shows need for other changes in labor law, 
               but does not support the changes in s. 295

    The blue-ribbon Dunlop Commission, appointed in 1993 by 
Labor Secretary Reich and Commerce Secretary Brown, included 
corporate executives (among them, Paul Allaire, the CEO of 
Xerox), three former Secretaries of Labor (two from Republican 
administrations), a former Commerce Secretary, a former union 
president, and distinguished academics. The Dunlop Commission 
issued its report and recommendation in December 1994.
    The Dunlop Commission's recommendations are the best 
starting point for deciding what changes need to be made in the 
current law of the workplace. Instead of addressing isolated 
topics--the way the TEAM Act does--the Dunlop Commission looked 
at the whole legal system governing workers and managers.
    The Commission identified serious problems that go to the 
heart of the current labor system and that demand attention. 
Revising Section 8(a)(2) of the National Labor Relations Act, 
which is the sole focus of the TEAM Act, is only a small part 
of a much bigger picture. Tinkering with one part of the 
system, while ignoring other parts, makes no sense. The parts 
are interconnected. Some parts are more important than others. 
Improving the system means understanding how the parts fit 
together and how the whole system is working--or not working.
    The Dunlop Commission addressed the law of worker 
representation and collective bargaining. One of the questions 
that the Dunlop Commission was asked to answer was:

          ``What (if any) changes should be made in the present 
        legal framework and practices of collective bargaining 
        to enhance cooperation behavior, improve productivity, 
        and reduce conflict and delay?''

    The Commission began its answer by making a remarkable 
observation, which cannot be ignored.

          ``The evidence reviewed by the Commission 
        demonstrated conclusively that current labor law is not 
        achieving its stated intent of encouraging collective 
        bargaining and protecting workers' rights to choose 
        whether or not to be represented at the workplace. 
        Rectifying this situation is important to insure that 
        these rights are realized for the workers who wish to 
        exercise them, to de-escalate workplace conflicts, and 
        to create an overall climate of trust and cooperation 
        at the workplace and in the broader labor and 
        management community.'' [Dunlop Commission Report, p. 
        xviii.]

    In other words: The law is not working and it needs to be 
fixed.
    The Commission made a number of findings that supported its 
conclusion. It found that:

          (1) ``American society--management, labor, and the 
        general public--supports the principle that workers 
        have the right to join a union and to engage in 
        collective bargaining if a majority of workers so 
        desire.''
          (2) ``Representation elections as currently 
        constituted are highly conflictual for workers, unions 
        and firms.''
          (3) ``The probability that a worker will be 
        discharged or otherwise unfairly discriminated against 
        for exercising legal rights under the NLRA [National 
        Labor Relations Act] has increased over time.''

    With respect to discharges of union activists, the 
Commission pointed to some terrible statistics:

          Improper firings of union activists occur in one of 
        every four union elections; and seventy-nine percent of 
        American workers surveyed say it is likely that 
        employees who seek union representation will be fired. 
        [Commission Report, p. 19.]

    Those figures shape--or distort--what happens in the 
workplace. The Commission stated, ``This fear is no doubt one 
cause of the persistent unsatisfied demand for union 
representation on the part of a substantial minority of 
American workers.'' [Commission Report, p. 19.] Fear should not 
be a factor in the collective bargaining process. Fear is the 
antithesis of free choice. And free choice is the core 
principle of American labor law.
    As the Dunlop Commission observed, the flaws in the current 
legal framework for collective bargaining must be addressed--
for the benefit of workers, managers, and the country as a 
whole. In the Commission's words:

          ``All participants--employees, management, and 
        unions--would benefit from reduction in illegal 
        activity and deescalation of a conflictual process that 
        seems out of place with the demands of many modern 
        workplaces and the need of workers, their unions, and 
        their employers.'' [Dunlop Commission Report, pp. 15-
        16.]

    The Commission did not simply point to this problem and 
express the hope that it would go away. Instead, the Commission 
made specific recommendations for changing the law. The 
recommendations include:
    Authorizing injunctions to remedy discrimination against 
workers in organizing campaigns and first-contract 
negotiations. The Commission recommended that Congress change 
the law, to authorize injunctions under 10(I) of the National 
Labor Relations Act against employers who discriminate against 
workers. This provision requires the NLRB to seek injunctions 
and to give case priority.
    Ensuring employee access to union views on representation. 
The Commission observed that access to union and employers is 
crucial to workers' free choice about representations. But, 
said the Commission, ``employees have little access to the 
union at work--the one place where employees naturally 
congregate,'' while employers have virtually unlimited access. 
[Commission Report, p. 23.] To promote free choice, the 
Commission recommended that Congress overrule the Supreme 
Court's decision in Lechmere v. N.L.R.B., and thus give 
employees access to union organizers in privately-owned, but 
publicly-used spaces like shopping malls.
    The conclusion of the Dunlop Commission on worker 
representation and collective bargaining is worth quoting in 
full:

         ``Employee freedom of choice about whether to have 
        independent union representation for purposes of 
        collective bargaining remains one of the cornerstones 
        of a flexible system of worker-management cooperation 
        in our democratic society, whatever portion of the 
        workforce decides to avail itself of this form of 
        participation. A labor relations environment marked by 
        prompt, pre-hearing elections, effective injunctive 
        relief for discriminatory reprisals in the 
        representation process, and flexible dispute resolution 
        of first contract negotiations, including arbitration 
        where necessary, will provide American workers greater 
        freedom to choose collective bargaining if that is what 
        they want. Taking these steps is an integral part of an 
        effort to reduce conflictual relations and to reform 
        the regime governing workplace participation. Employee 
        free choice about independent union representation 
        serves both as a guarantor of the integrity of employee 
        involvement plans in non-union facilities and as a 
        voluntary worker-management alternative to direct 
        federal regulation of the employment relationship.'' 
        [Commission Report, p. 24.]

    The Commission's last point is important. Employee free 
choice, the Commission points out, helps guarantee the 
integrity of employee involvement plans. If free choice is 
missing--if free choice is a myth--then employee involvement 
plans are suspect. We can't be sure that they truly serve 
workers. It follows, then, the before we focus on employee 
involvement plans, the way the TEAM Act does, we pay attention 
to employee free choice. That means addressing the Dunlop 
Commission's recommendations. The Commission has pointed out 
the forces that are undermining free choice about workers 
representation and collective bargaining. And the Commission 
has shown us how to begin to make free choice a reality again. 
That should be our first priority.

        the real purpose of s. 295 is to thwart union organizing

    As Senator Wagner recognized, company-dominated labor 
organizations are a major obstacle to the development of real 
unions that represent employers vis a vis their employers and 
that can help them achieve improvements in their wages and 
working conditions.
    Two recent studies, one by James Rundle of Cornell 
University, and the other by Kate Bronfenbrenner of Cornell 
University and Tom Juravich of the University of Massachusetts, 
both found that employers that use employee involvement plans 
during union organizing campaigns are much likelier to defeat 
the union than employers who do not institute such plans. Both 
studies were scientific samples of all organizing campaigns in 
the United States involving 50 or more employees that occurred 
during a one-year period. Bronfenbrenner and Juravich found the 
same effect in public sector union organizing campaigns as in 
the private sector. Rundle's study showed that the negative 
effects of employee involvement plans on union organizing were 
especially severe where the plan or committee dealt with the 
employer on pay issues, which is one of the things that S. 295 
would legalize.
    Rundle's study makes a comparison with an earlier study by 
Bronfenbrenner (part of the Bronfenbrenner and Juravich study) 
that reveals a profoundly disturbing fact: the proportion of 
employers that use company unions as anti-union devices, in the 
guise of employee involvement committees, has been rising 
rapidly in recent years. The Bronfenbrenner study found that 
union organizers in 1986 encountered employee involvement 
committees in only 7% of all campaigns. By the time of Rundle's 
sample in 1994, organizers were encountering employee 
involvement programs in 32% of all campaigns. In both studies, 
employers who used employee involvement programs also ran more 
aggressive anti-union campaigns, based on the number and 
intensity of specific anti-union tactics, including illegal 
discharge of union supporters. This means that the TEAM Act is 
being proposed at the same time that the use of employee 
involvement programs as an anti-union tool during union 
organizing drives is becoming more popular among employers. 
James Rundle, ``Winning Heart and Minds: Union Organizing in 
the Era of Employee Involvement,'' in Organizing to Win: New 
Research On Union Strategies, Bronfenbrenner, Hurd, Oswald, 
Seeber, Eds., ILR Press/Cornell University Press (forthcoming, 
fall 1997). Kate Bronfenbrenner and Tom Juravich, The Impact of 
Employer Opposition to Union Certification Win Rates: a 
Private/Public Sector Comparison, Economic Policy Institute, 
Working Paper No. 113 (February, 1995).
    Not surprisingly, employers know about the effect of 
employee representation plans on union organizing, and union 
avoidance is an explicit purpose of many such plans. As Charles 
Morris reports in his article, ``Deja Vu and 8(a)(2), What's 
Really being Chilled by Electromation,'' (April 30, 1994), a 
study of employee representation plans published by the Harvard 
Business School Press in 1989 found that in every company 
studied, managers cited the plans as ``a valuable and proven 
defense against unionization.''
    Electromation is a perfect illustration of how company-
dominated employee committees impede union organizing, and how 
their disestablishment pursuant to section 8(a)(2) promotes 
employeeempowerment by protecting the right of employees to 
form independent labor organizations. The International Brotherhood of 
Teamsters petitioned for an election in 1989, while the ``action 
committees'' were in operation. The company mounted a vigorous anti-
union campaign and suspended the committees until after the election. 
The union lost the election. A second election was held after a 
National Labor Relations Board Administrative Law Judge found the 
action committees to be in violation of section 8(a)(2) and ordered 
them disbanded. The union won the election. Subsequently, after a 
decertification petition was filed, a third election was held, and the 
union won that vote, too.
    If the proponents of S. 295 had their way, the employees at 
Electromation would never have voted for a union. Today, as a 
direct consequence of acting on their section 8(a)(2) rights, 
the workers have their own union, chosen and run by them, in 
which they make decisions through a democratic process. Through 
their union they have negotiated a 3-year collective bargaining 
agreement, ratified by majority vote of the employees. This is 
precisely how the law is supposed to operate. Thus, 
Elecromation proves the opposite conclusion from that which the 
majority cites it: no change is warranted.

         employees want freedom of choice, not employer control

    The majority cites a study by Richard Freeman and Joel 
Rogers as evidence that employees want employee involvement, 
and by implication would favor the TEAM Act. (Worker 
Representation and Participation Survey Richard B. Freeman and 
Joel Rogers, conducted by Princeton Survey Research Associates, 
December 1994). This is completely misleading, first, because 
the majority fails to mention parts of the study that refute 
this view, and second, because the study was never intended as 
a referendum on the TEAM Act, and so does not include questions 
that would directly address what the TEAM Act would do.
    The Freeman and Rogers study shows that workers want to 
choose their own representatives. Only 10 percent believe that 
management should select the employee representatives while 59 
percent thought employee representatives should be elected. 
Most employees (59 percent) also thought that in cases of 
conflict, final decisions should be made by an outside 
arbitrator rather than leaving the final decision to 
management. But the June 5, 1995 memo from the TEAM Coalition 
counsel rejected ``[a]ny attempt to specify what constitutes a 
legal employee involvement approach,'' so under S. 295 
employers would be free to choose the employee representatives 
and keep all final decisions to themselves.
    The survey did not ask the critical question, namely 
whether employers should be allowed to impose a system of 
employee representation without the consent of the employee. It 
is not hard to imagine that the response would be similar to 
the employee's response to the idea of employers choosing 
employee representatives: overwhelming rejection. In any event, 
the study cannot legitimately be cited as the majority does.

         s. 295 would undermine the basis of american labor law

    The National Labor Relations Act was designed to minimize 
the role of government in labor relations, and as such is 
uniquely American. In all European countries, for example, 
employees are guaranteed a certain amount of vacation by law, 
in most cases four or five weeks per year. In this country, 
employees have no such rights. Instead, they have a right to 
organize and bargain with the employer. Apart from enforcing 
those rights, and enforcing strictures against certain kinds of 
union activity, the government does not get involved. Even when 
employers have been found guilty of egregious violations of 
their duty to bargain in good faith, the government stays out 
of decisions about wages, hours and other terms and conditions 
of employment (beyond the minimums set by the Fair Labor 
Standards Act). Instead, the government leaves it up to the two 
parties to work out such issues between themselves.
    The key to this system is that there must be two parties. 
That is why section 8(a)(2) lies at the heart of the National 
Labor Relations Act. By requiring that any organization that 
speaks for employees be independent of the employer, section 
8(a)(2) is intended to ensure that such an organization is 
accountable to the employees, just as those who speak for an 
employer are accountable to that employer, so that the two 
parties can represent their respective interests.
    The law does not require that the two sides do this in an 
adversarial or conflictual way. It merely recognizes that 
however much the interests of employees and employers may 
overlap, due to their mutual interest in the success of the 
enterprise, their interests may differ with respect to other 
issues, such as compensation, hours of work, and due process 
for discipline. Nothing in the various participative workplace 
experiments around the country changes this fact. Indeed, at 
the same time that the majority of firms claim to have employee 
involvement programs, real wages for workers have on average 
been falling, while profits have been rising. The alarming 
increase in disparity of income and loss of secure employment 
opportunities for the average American worker in recent years 
has not been prevented by the growth of employee involvement 
programs.
    Section 8(a)(2) was intended to foster labor organizations 
that were capable of offsetting the lack of bargaining power of 
individual employees in relation to their employers so that 
workers would enjoy the fruits of economic progress and the 
dignity that comes from contractual agreements, all without the 
government mandating any of those things. Our system of labor 
relations is inconceivable without it.

                         democratic amendments

    The Majority claims that its primary objective in 
eliminating the protections of section 8(a)(2) of the National 
Labor Relations Act is to give more authority and autonomy to 
employees. However, the TEAM Act bolsters employer prerogatives 
without a commensurate enhancement of employee rights under the 
NLRA.
    At the TEAM Act Executive Session, Democrats offered a 
number of amendments that address directly some of the most 
serious problems with S. 295. Senator Kennedy offered 
anamendment to protect team members from losing their right to organize 
under the NLRA. Senator Kennedy also offered an amendment to exempt 
from S. 295 workplaces where organizing was already in progress. 
Senator Wellstone offered an amendment to impose tougher penalties on 
repeat violators of section 8(a)(2) and to deter further violations.
    Democrats also offered amendments designed to remedy some 
of the inequalities that presently inhere in the NLRA. These 
amendments would have provided employees with enhanced legal 
remedies for NLRA violations by an employer, provided that the 
National Labor Relations Board must seek immediate 
reinstatement for workers fired during organizing, provided 
that employees can bargain over the issues that affect them, 
and provided equal access to the job site and equal time for 
unions to speak with employees during organizing drives. The 
Committee rejected all of Senator Kennedy's amendments on 
party-line votes.
    Senator Kennedy offered an amendment to preserve the status 
as employees protected by the NLRA of employees who 
collectively, as part of a work team or committee, take on some 
of the decisionmaking authority of managers. The amendment 
would have changed the definition of ``supervisor'' in section 
2 of the NLRA to exclude individuals whose only supervisory 
role is to direct the work of another employee, without having 
the power to hire, fire, discipline or discharge the employee. 
This amendment is necessary because the United States Supreme 
Court has broadly interpreted the definition of supervisor to 
deny numerous workings their right to an independent voice in 
the workplace. Majority witness and former NLRB Member Charles 
Cohen testified at the hearing on S. 295 that ``employees 
[should] not be deemed supervisors or managers solely by virtue 
of their participation in [committees or teams].'' The Dunlop 
Commission also recommended this correction.
    Senator Kennedy offered an amendment to provide that the 
TEAM Act will not apply in workplaces where a union organizing 
campaign is underway. It is in those instances where management 
is combatting a union that the employer is most likely to 
misuse teams and commit unfair labor practices. The few 
violations of section 8(a)(2) found by the NLRB overwhelmingly 
deal with employer efforts to set up teams in order to 
frustrate union organizing efforts.
    Since 1993, the Board ordered companies to disband employee 
committees in 16 cases. In 11 of them, the violation occurred 
in response to an organizing campaign. Between 1972 and 1993, 
the Board ordered employers to disband employee committees 58 
times. In 76 percent of these cases, an organizing campaign was 
in progress at the time of the violation. In all but one of 
these cases, the employer was also found guilty of unfair labor 
practices.
    Senator Wellstone offered an amendment to prohibit 
employers from committing repeat violations of the provisions 
against employer interference in the formation of a labor 
organization. In cases where the National Labor Relations Board 
has found an employer to be in violation of section 8(a)(2) of 
the National Labor Relations Act, the Board could take such 
action as it considers necessary to remedy the effects of the 
violation, including requiring the employer to provide unions 
with reasonable access to the employer's property. The Board 
would also be required to issue a cease and desist order, 
directing the company not to violate section 8(a)(2) again for 
a period of five years.
    The amendment would have corrected a flaw in section 
8(a)(2). Currently, an employer who is found by the Board to 
have established a company union in response to a genuine union 
organizing drive is required to dismantle the illegal entity--
that is all. The Board has no remedy to deter repeat offenders. 
The amendment would have provided meaningful sanctions against 
repeat offenders, firms that are caught violating their 
workers' rights but that continue their unlawful activities.
    Senator Kennedy offered two amendments to strengthen the 
remedies provided under the NLRA for unlawful discharges of 
employees and other unfair labor practices during union 
organizing campaigns.
    The first amendment would have amended section 10(c) to 
provide for triple back pay and the award of attorney fees as 
the remedy for illegal discharges during union organizing or 
during the negotiation of a first collective bargaining 
agreement.
    Currently, workers must risk their livelihood when they 
start a union. 25 percent of employers respond to union 
election campaigns by firing union supporters. In 1994, the 
NLRB granted back pay in over 8,000 cases where workers alleged 
they were punished for supporting a union. A triple back pay 
remedy would deter employers from treating illegal firings as 
an acceptable cost of doing business, and better protect 
workers when they seek to organize. Almost every other major 
employment statute contains provisions designed to deter 
illegal conduct--the National Labor Relations Act should not be 
an exception.
    The second amendment would have amended section 10(l) of 
the NLRA to require the Board to give top priority to the 
investigation of charges that an employer has illegally 
discharged an employee during a union organizing campaign or 
during the negotiation of a first collective bargaining 
agreement. If the Board found reasonable cause to believe the 
charge was valid, it would be required to seek an injunction in 
federal court pending final adjudication of the charge.
    A quarter of employers use discharges to fight union 
organizing campaigns. In fiscal year 1995, the Board reinstated 
workers fired for union activity in 7,478 cases, and ordered 
back pay in 8,987 cases. Employers have injunctive protection 
in the case of secondary boycotts--it is only fair to give 
employees this kind of protection, too. The most democratic way 
to give employees control over their livelihood is to ensure 
that employees do not fear for their jobs when they try to 
start a union.
    Senator Kennedy also offered an amendment to expand the 
range of issues subject to collective bargaining. One way to 
increase employee empowerment and make bargaining power more 
balanced is to ensure that critical subjects, such as the 
decision to close or relocate a plant or to subcontract 
bargaining unit work, are not excluded from collective 
bargaining. No issue is more important to employees than the 
fundamental issue of whether they will have a job at all. The 
amendment would have amended section 9 of the NLRA to make 
clear that employees can negotiate over all issues that 
significantly affect wages, hours, and terms and conditions of 
employment. This amendment would ensure that as employees have 
assumed an expanded role in decisionmaking in the workplace, 
they have the right to bargain with their employers over the 
key issues that affect them.
    Finally, Senator Kennedy offered an amendment to provide 
employees with as much access to union organizers and 
information about unions as they have to the employer's anti-
union campaign.The amendment would have amended section 8 of 
the NLRA to make it an unfair labor practice for an employer to deny a 
non-employee union organizer access to the non-work areas of the 
employer's facility for the purpose of conferring with employees, if 
the union had filed a petition for representation with the NLRB. The 
amendment would also make it unlawful for an employer to deny a union 
the right to attend a meeting of employees called by the employer to 
discuss representation by a labor organization.
    Employers often respond to an organizing effort with an 
all-out anti-union campaign, with posters, videos, leaflets, 
and speeches meant to frighten workers about the consequences 
of organizing. One common tactic is the ``captive audience 
speech,'' in which employees are required to attend anti-union 
speeches during their working hours.
    This amendment offered three solutions to bring a greater 
degree of fairness to union elections: it would protect 
employees against compulsory attendance or absence from 
meetings called by an employer on union representation, give 
unions the right to speak about their goals at these meetings, 
and give unions real access to employees who are considering 
whether or not to organize.

                               conclusion

    This bill is identical to the bill that was passed in the 
104th Congress on party lines, and vetoed by the President. 
Once again, the administration has promised a veto. On February 
25, 1997, in a letter to Senator Jeffords, the Department of 
Labor explained that S. 295 would be vetoed again. A copy of 
that letter is appended to these views. We concur in this view 
and urge our colleagues once again to oppose this ill-advised 
piece of legislation.

                                   Edward M. Kennedy.
                                   Tom Harkin.
                                   Jeff Bingaman.
                                   Patty Murray.
                                   Christopher J. Dodd.
                                   Barbara A. Mikulski.
                                   Paul D. Wellstone.
                                   Jack Reed.
                  Appendix to Minority Views on S. 295

                          U.S. Department of Labor,
                                        Secretary of Labor,
                                      Washington, DC, Feb. 25,1997.
Hon. James M. Jeffords,
Chairman, Committee on Labor and Human Resources,
U.S. Senate, Washington, DC.
    Dear Chairman Jeffords: We understand that your Committee 
may consider S. 295, the ``Teamwork for Employees and Managers 
Act,'' on Wednesday, February 26. I am writing to emphasize the 
Administration's opposition to S. 295, and to urge your 
Committee not to order the bill reported.
    This bill would amend section 8(a)(2) of the National Labor 
Relations Act (NLRA) to broadly expand employers' abilities to 
establish and control employee involvement programs. Section 
8(a)(2) states, in part, that it is an unfair labor practice 
for an employer to dominate or interfere with the formation or 
administration of any labor organization. By prohibiting 
employer domination and interference, section 8(a)(2) protects 
the right of employees to choose their own independent 
representative to advance their interests.
    The Administration strongly supports further labor-
management cooperation within the broad parameters allowed 
under current law. Recent decisions of the National Labor 
Relations Board (NLRB) have helped clarify the broad legal 
boundaries of labor-management teamwork, and the NLRB can be 
expected to provide additional guidance in the exercise of its 
independent authority. Your Committee's hearing showed that 
employers currently do have the latitude to cooperate with 
employee teams. The employee groups described by IBM, for 
example, were clearly legal, and the IBM team that testified 
has never found it necessary to discuss wages and hours, 
showing that productivity and quality teams need not run afoul 
of the law. I note that the NLRB has ordered only four 
companies a year, on average, to terminate illegal employee 
involvement schemes since Electromation was decided, and that 
there is no other penalty for violation of section 8(a)(2).
    Rather than promoting genuine teamwork, S. 295 would 
undermine the delicate system of checks and balances between 
employer and employee rights and obligations that has served 
this country so well for six decades. It would do this by 
allowing employers to establish company unions where no union 
currently exists and by permitting company-dominated unions 
where employees are in the process of determining whether to be 
represented by a union. Rather than encouraging workplace 
cooperation, this bill would abolish basic protections that 
help ensure independent democratic representation in the 
workplace.
    As several witnesses before the Committee testified, 
section 8(a)(2) is not the place to begin reform of the 
National Labor Relations Act. Rather, they--as did the Dunlop 
Commission before them--recommend changes in the law to 
facilitate the free choice of employees to be represented by an 
independent union and to deter unfair practices by employers, 
which have become routine and widespread. The Administration 
agrees with that approach.
    For the foregoing reasons, the Administration opposes the 
enactment of S. 295. If S. 295 were presented to the President, 
I would recommend that he veto the bill.
            Sincerely,
                                        Cynthia A. Metzler,
                                         Acting Secretary of Labor.

 Additional Views of Senator Jeff Bingaman on S. 295, the Teamwork for 
                  Employees and Management Act of 1997

    I join my Democratic colleagues on the Labor Committee in 
opposing S. 295, the Teamwork for employees and Management Act 
of 1997.
    I oppose the TEAM Act as reported because I feel it does 
not provide enough protections against the company dominated 
structures which Section 8(a)(2) was enacted to prevent. Anyone 
who is serious about promoting legitimate employee involvement 
must also be serious about preventing the proliferation of sham 
unions. Such structures are not only bad for the American 
worker, they are bad for American business. I am concerned that 
S. 295 does not address the practice of establishing teams and 
committees as a means to interfere with employee's efforts to 
organize. As pointed out in some of the testimony the Committee 
heard, this is the situation in which teams most often lose 
claim to legitimacy.
    However, workplaces of the late 1900s are far different 
from the workplace of the early part of this century. More 
employers understand the importance of having employees as 
partners and not simply parts of a machine that churns out 
products. We should be concerned with providing both employees 
and employers the tools that empower them and that position 
America for the new century and the global marketplace in which 
we will compete.
    I also understand the concerns of employers who fear that 
they are operating outside the law when they institute and 
promote employee involvement programs. If the Committee report 
demonstrates nothing else, it demonstrates the uncertainty 
about what is and is not permitted under 8(a)(2) and it is 
appropriate for Congress to consider changes that protect 
against sham unions, protect the legitimate right of employees 
to organize and allow increased employee participation in the 
workforce.
                      XI. Changes in Existing Law

    In compliance with rule XXVI paragraph 12 of the Standing 
Rules of the Senate, the following provides a print of the 
statute or the part or section thereof to be amended or 
replaced (existing law proposed to be omitted is enclosed in 
black brackets, new matter is printed in italic, existing law 
in which no change is proposed is shown in roman):

            TEAMWORK FOR EMPLOYEES AND MANAGERS ACT OF 1997

          * * * * * * *

                     TITLE 29.--UNITED STATES CODE

          * * * * * * *

                         unfair labor practices

    Sec. 8. (a) It shall be an unfair labor practice for an 
employer--
          (1) to interfere with, restrain, or coerce employees 
        in the exercise of the rights guaranteed in section 7;
          (2) to dominate or interfere with the formation or 
        administration of any labor organization or contribute 
        financial or other support to it: Provided, That 
        subject to rules and regulations made and published by 
        the Board pursuant to section 6, an employer shall not 
        be prohibited from permitting employees to confer with 
        him during working hours without loss of time or pay[;] 
        : Provided further, That it shall not constitute or be 
        evidence of an unfair labor practice under this 
        paragraph for an employer to establish, assist, 
        maintain, or participate in any organization or entity 
        of any kind, in which employees participate, to at 
        least the same extent practicable as representatives of 
        management participate to address matters of mutual 
        interest, including, but not limited to, issues of 
        quality, productivity, efficiency, and safety and 
        health, and which does not have, claim, or seek 
        authority to be the exclusive bargaining representative 
        of the employees or to negotiate or enter into 
        collective bargaining agreements with the employer or 
        to amend existing collective bargaining agreements 
        between the employer and any labor organization, except 
        that in a case in which a labor organization is the 
        representative of such employees as provided in section 
        9(a), this proviso shall not apply;
          * * * * * * *

                                
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