Will The Rewards Of Employee Participation Committees Outweigh The Risk That The NLRB Finds Some Illegal?
By John E. Lyncheski, Cohen & Grigsby
By John E. Lyncheski, Cohen & Grigsby
When people in a company's employee participation group complain about vacation time, executives discuss the issue with the group and decide to make changes that will satisfy employee concerns.
Such action benefits the employees, and it benefits the employer, eager to show employees it is willing to address and resolve their concerns.
But this scenario leaves the employer wide open for a finding of illegality by the National Labor Relations Board (NLRB), especially if the employee committee's dominant role, in the NLRB's view, is to "act like a union" and "deal with" management in addressing employment issues.
The NLRB is taking employers to task for what it charges is unlawful domination of employee committees that fit the National Labor Relations Act's (NLRA) definition of a labor organization. The NLRA outlaws employer domination or interference with the formation, administration or support of labor organizations.
The Importance of Employee Participation Groups
The 1990s are a time of leaner budgets, requiring versatile employees to perform multiple tasks.
Many employers in both nonunion and unionized facilities have made employee communications and employee relations a priority. They are establishing employee committees under many names, such as employee advisory committees, quality circles, communication committees, employee involvement teams. These groups meet regularly to address workplace issues and to provide a forum for two-way dialog between management and the workforce.
The Association for Quality and Participation estimates that 30,000 organizations nationwide have instituted employee involvement programs.
Employers that make employee morale a priority often reap the benefits with higher productivity and better quality. Additionally, if communication already is strong and responsive, employees won't want to distance themselves from management by inserting another tier between staff and management. The time and effort spent on communications can thus be recouped by not having to deal later with union interference or the threat of a strike.
Employers should keep their employee groups together because the benefits far outweigh the damage of most NLRB penalties. For one thing, the penalties in most cases are not draconian: the NLRB simply tells the employer to disband the group. There have also been cases in which the NLRB ordered the employer to rescind some actions taken by the committee.
Recently, the U.S. Court of Appeals for the Fourth Circuit overturned an NLRB order for the Peninsula General Hospital of Salisbury, Md., to disband its employee participation group. The circuit court's blessing of Peninsula General's employee group signals that some courts will not rubber stamp NLRB decisions that take an unrealistic view of which employee committees constitute an employer-dominated "labor organization" that "deals with" the employer in violation of the NLRA.
Learning From Peninsula Hospital
Employers should note that the circuit court reversed the NLRB order because it was clear that Peninsula's group did minimal "negotiating" with management over employment issues. The Fourth Circuit found that the group did "deal with" management in some instances, but ruled that was not the group's overall purpose, so as to bring into play the NLRA's prohibitions against employer-dominated labor organizations.
The Fourth Circuit distinguished Peninsula General's situation from the now famous Electromation case. Electromation Inc., an Indiana company, formed action committees in response to employee complaints about benefit reductions. Electromation drafted committee goals and responsibilities, which included meeting with employees and resolving differences over absenteeism, bonuses, a non-smoking policy and wage increases.
The NLRB concluded that Electromation illegally dominated its employee participation group, which the board said was a "labor organization" as defined by the NLRA. The U.S. Court of Appeals for the Seventh Circuit upheld the NLRB's finding of illegality.
In the case of Peninsula General, a committee of nurses and administrators met regularly, primarily to discuss continuing education and other topics outside of basic employment issues. The NLRB ordered Peninsula General to disband the group, known as the Nursing Services Organization, finding it to be a "labor organization" because it was dealing with the employer in a representative capacity and finding it was illegally dominated by the employer.
The Fourth Circuit criticized the NLRB for assuming that "problem solving and decision making" linked to the nursing group's sessions proved that there had been, over time, a pattern or practice of the nursing group making proposals to management, with management accepting or rejecting those proposals. In reality, the court said, the nursing group did not exist primarily to "deal with" management concerning wages, hours and working conditions.
Employers should remember that Electromation still represents the NLRB's approach to employee participation committees and it is unlikely the present NLRB will agree with the Fourth Circuit's finding in the Peninsula appeal. If the legality of a committee is challenged, such action will occur initially at the NLRB, where a union files an unfair labor practice charge against the employer.
Employers should take steps to minimize the possibility of the NLRB finding the employer to be illegally dominating a labor organization. Proper steps include:
The Future
Until Congress addresses employee participation groups, it is likely unions already in place will challenge advisory committees by filing unfair labor practice charges. The present NLRB law is also an effective union tool to upset a representation election that goes against the union. Just as occurred in Electromation, the union could lose a first election but file objections and win a second representation election.
Unions generally do not like employee participation groups because the committees diminish the need for labor organization. If employers effectively address employee concerns within the framework of the employment relationship, it is less likely the employees will turn to a union for assistance.
But again, the worst-case scenario should not intimidate employers into dropping their participation groups, which are a key management tool of the `90s. Employers who take steps to maximize the communications and minimize the "dealing with" aspects of an employee participation will have a stronger case if the NLRB comes calling. And if it goes as far as the finding of illegality, the Peninsula case is on the books as a precedent that differs from the NLRB's view of employee groups. In any event, the rewards of encouraging employee committees far outweigh the risks of illegality.
Employers have made great strides in recent years with innovative methods of empowering the workforce. They should not let the NLRB's archaic views rob them of one of their most effective methods of maintaining employee morale: employee participation groups.
John E. Lyncheski, a director in the Pittsburgh
law firm of Cohen & Grigsby, concentrates a significant
portion of his practice in representing management in labor and
employment law.
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