Be Careful When Forming Employee Committees

Issue:
To increase productivity by encouraging employee involvement in decision-making, your non-union company decides to create an Employee Policy Review Committee to meet at work on company time. Management selects employees to serve on the Committee from a group of volunteers. At the Committee’s first meeting, management informs the selected employees that they will act as employee representatives by gathering their coworkers’ ideas regarding existing policies or the need for new policies and ultimately making policy recommendations to management. After several meetings, the Committee recommends a no-tobacco policy and a proposal for 4-day workweek. Management accepts some of the Committee’s proposals and rejects others.

Several months after the Committee’s formation, the NLRB serves you with a complaint filed by a union, claiming that the Employee Policy Review Committee is an unlawfully dominated labor organization. Do the union’s allegations have merit?

Answer:
Yes. An employer’s creation of or involvement with an employee committee is unlawful if:

• The committee is a “labor organization;” and
• The employer has dominated or interfered with the formation or administration of the committee.

In a case involving almost identical facts, the NLRB ruled that such a committee was an unlawfully dominated labor organization. The committee was a “labor organization” because it made proposals on behalf of all employees concerning terms and conditions of employment, which management either accepted or rejected. The company had unlawfully “dominated” the committee because management created and announced the committee, determined the structure and function of the committee, selected the members, chose the subjects they were to address, and allowed the meetings to be held on site during work hours.

When is a committee a labor organization?
An organization is a labor organization if employees participate in it and if it exists, even in part, for the purpose of “dealing with” the employer concerning grievances, labor disputes wages, rates of pay, hours of employment or other terms and conditions of work. If a group of employees has a “pattern or practice” of making proposals to management and management responds—either by word or by deed—by rejecting or accepting those proposals, “dealing” is probably present.

When does an employer unlawfully dominate the committee?
Ask whether the employer created the structure and function of the committee. If the group is created by management, management determines the group’s structure and function, and the group’s existence depends on management’s approval, it will probably be found to be dominated by the employer. Ask how much independence the committee really has. If the employee group has no independent existence outside of the employer’s active involvement and support, it is probably unlawfully dominated.

• Before implementing new employee participation programs, consult with legal counsel.
• Do not allow any team activity to “represent” the views of a group of employees.
• Teams should not be used as “bargaining agents” to management or for management interests. There is a difference between communicating information and initiating proposals for management action.
• Management members of teams should not be able to veto any team decisions. Management should participate only if there is a majority rule (not consensus, which can be interpreted as a veto) or in an advisory or observer role.
• If a team or an employee committee is permanent, rotate membership.
• Teams should be advised that their powers are management’s powers. In no instance are teams representative of employees. The ability of the team to make binding decisions must be clearly defined.
• Avoid allowing management to direct the work of the employee group.
• Don’t assume that there are any “safe” areas for any type of committee action. Care should be exercised in every instance.
• If a committee is given decision-making authority, management cannot veto the decisions.
• If a union is present, do not proceed without union approval.
• Consider exploring alternatives such as focus groups and attitude surveys to collect information instead of establishing employee committees.

Cite: National Labor Relations Act, Section 2(5); EFCO Corp (1998) 372 NLRB No. 71, 1999-00 CCH NLRB 15,944; Electromation, Inc., (1992) 309 NLRB No. 163, 1992-93 CCH NLRB 17,609; Electromation, Inc. v. NLRB (7thCir 1994) 128 LC 11,181).

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