Does the Nlra Constrain Employee Involvement and Participation Programs in Nonunion Companies?: A Reassessment

Abstract

This paper reexamines the merits of the ban on nonunion employee representation plans ("company unions") contained in Sections 2(5) and 8(a)(2) of the National Labor Relations Act (NLRA). The historical origins of the company union ban are reviewed and critiqued. The current legal and policy debates over the efficacy of Sections 2(5) and 8(a)(2) are then reviewed, with particular attention given to the National Labor Relations Board's decision in Electromation, Inc. A major dispute in this debate is to what degree the NLRA's provisions crimp the ability of nonunion companies to establish and operate employee involvement and participation (EIP) programs. The paper presents fresh evidence on this matter through case studies of EIP programs at six American companies. I conclude that the NLRA constrains the majority of the EIP programs at these companies, only in a marginal manner at some and more fundamentally at others. The proponents of the NLRA's ban on company unions justify it on the grounds that these representation plans are largely used as a union avoidance device. I agree that union avoidance is one motive of nearly all nonunion companies but argue that the manner in which these plans are used to accomplish this purpose is the crucial consideration--plans used as a short run, reactionary "win-lose" tool of union avoidance should be prohibited, but plans used as part of a long range, proactive "win-win" employee relations strategy should be permitted. This assertion is supported by evidence from Canada, where nonunion employee representation plans are legal and operate with little criticism or adverse impact on employees. The paper concludes that the ban on nonunion representation plans was a policy mistake in the 1930s and adversely affects industrial competitiveness and employee free choice today. Accordingly, I present a detailed set of proposed revisions to the NLRA that, on one hand, largely exempt nonunion representation plans from the reach of the NLRA but, on the other, strengthen the protection of the right to organize in the Act so that employers are constrained to use the plans for legitimate, above-board EIP objectives. This suggested change in the NLRA, I claim, is a more balanced approach than either the recommendations of the Dunlop Commission or the proposed TEAM Act legislation.