Businesses are more successful when they work with employees to improve their workplace and products. Opinion surveys can help, and so can employee committees in various forms and with different goals. Employee committees can increase morale and engage employees. Some are very effective and favored by the workforce, while others fail for a variety of reasons. It is common for unions to file unfair labor practice charges with the National Labor Relations Board (NLRB) when they are trying to organize a bargaining unit at a company that has one in place.
Employers are vulnerable to such a charge when they inadvertently create a union by carelessly structuring a committee meant to engage the workforce. Under the National Labor Relations Act (the Act), a labor organization is defined broadly. It includes any “in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning” wages and terms and conditions of employment. 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. When an employer sets up an employee committee, it can do exactly this. Whether it does depends on a two-pronged inquiry to determine if “dealing with” has occurred and if the employer has "dominated, interfered with, or supported the group."
Court decisions have created a path for employers to follow when creating a committee that will not violate the act. The original decision was 63 years ago in 1959. The U.S. Supreme Court in Cabot Carbon Company, 360 U.S. 203, found that while bargaining generally requires a process by which two parties seek to compromise their differences, “dealing” only requires a bilateral process where employees might make proposals to management and management can accept or reject these proposals. From 1959 to 1992, the NLRB broadly interpreted committees as violating the Act.
In the Electromation, Inc. case, 309 NLRB 990 (1992), Enf’d, 35F3rd 1148 (7th Cir. 1994), the Board more narrowly defined “dealing with.” It had to involve proposals from the employee organization concerning subjects of bargaining, and management had to consider those proposals. The employer in Electromation had established employee action committees to determine how best to implement proposed cost-cutting measures. Clearly, there was management domination here because it is always present with employer-sponsored employee participation committees. Still, it is irrelevant if there is no “dealing with” under the Act. This is where management is not considering proposals from employees, but instead, managers and employees are working together for an outcome.
Many other cases further clarified the definition of committees and labor organizations. In one, E.I. du Pont de Nemours & Co., 311 NLRB 893 (1993), the Board ruled that joint safety committees must be deemed labor organizations where they go to management with proposals and agreed-upon incentive awards. However, not every situation of management involvement on a committee will be considered to be dealing with the employees. For example, there would not be any prohibited “dealing with employees” if management representatives participated on the committee as observers without the right to vote on proposals.
A 2007 case, Syracuse University, 350 NLRB No. 63, further narrowed the definition of “dealing with,” when the university established a staff complaint process to resolve certain types of employee relations issues. The process was unique as it involved volunteers, including supervisors and non-supervisors, as potential panelists, advocates, and mediators to process complaints. The process involved several stages, including mediation, an evidentiary hearing, and appeals. If the complainant was a non-supervisor, the panel included two non-supervisors and one supervisor. Ultimately, the panel’s decision was binding on the university. When the university asserted that the complaint process would provide employees with a cost-free hearing and review process, the union filed an unfair labor practice charge with the NLRB. The Board found that rather than “dealing with” the employer, the process was limited to an adjudicative function that provided a final resolution to disputes even if management disagreed.
More employers want to have a committee to help improve workplaces at a time when employees want a voice. A committee can be an effective tool, but it must be planned carefully. The legal definition of employee committees varies, and the ability to take different shapes means using them correctly requires thought. If you are interested in employee committees, reach out to the Employers Council Labor Relations department at LR@employerscouncil.org.
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