NLRB Expands Lawful Use of Employee Participation Committees

In an effort to improve productivity and eliminate wasteful management and supervisory hierarchy, many employers have established joint employee-management committees to deal with a variety of workplace issues. Unfortunately, many of these committees have been found to be employer-dominated labor organizations in violation of federal labor law. In a recent decision, however, the National Labor Relations Board enhanced employers' ability to lawfully use such committees. The Board ruled that where the committees exercise managerial authority, they are not illegal employer-dominated unions. Crown Cork & Seal Company, 334 NLRB No. 92 (July 20, 2001).

The National Labor Relations Act makes it an unfair labor practice for an employer to dominate or support "any labor organization." The Act defines a labor organization as: "any organization of any kind, or any agency or employee representative 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."

In Electromation, Inc., 309 NLRB 990 (1992), enf'd., 35 F.3d 1148 (7th Cir. 1994), the Board held that "action committees" consisting of volunteer employee and management representatives were labor organizations because the representatives on the committee discussed and sought to resolve matters concerning working conditions. As such, the committee was "dealing with the employer" via a "bilateral mechanism involving proposals from the employee committee concerning the subjects listed in [the Act] 2(5), coupled with real or apparent consideration of those proposals by management." Following Electromation, the Board in E. I. DuPont de Nemours found a safety and fitness committee to be unlawful where management determined the committee composition, and where the management representatives on the committee could veto decisions made by the committee members.

Recently, however, the Board unanimously agreed that an employer's creation and use of four production teams and three other employee-participation committees did not violate federal law where the committees exercised functions normally delegated to managers or supervisors. In Crown Cork and Seal Company, the employer implemented a system of employment management known as the "Socio-Tech System." The purpose of the system was to delegate to employees authority to operate the...