- in South America
Originally appeared in Labor Law Newsletter - January 2002
Ruling on the controversial subject of "employee committees," the National Labor Relations Board unanimously held that employee committees created to perform managerial functions were not "labor organizations" within the meaning of the NLRA.
In Crown Cork & Seal Co., 334 NLRB No. 92 (2001), the employer operated an aluminum manufacturing plant where, since the plant’s opening, authority was delegated to employees to operate the plant through participation on various committees. All seven of the committees at issue made decisions by a process of discussion and consensus. Although managers served on the committees, management members held no greater authority than other committee members.
Under the committee system, four of the seven committees were designated as "production teams," and every employee in the plant participated on one of them. The production teams were empowered to take action with respect to production, quality issues, training, attendance, safety and discipline short of suspension or discharge. The production teams had authority to decide which members were given formal and informal training, could counsel employees and recommend suspension or discharge and administered the plant’s absentee program by deciding requests for time off and whether an absence was excused or unexcused.
Three other committees - the organizational review board, the advancement certification board and the safety committee - operated at one administrative level above the production teams. Each of these three committees consisted of employees and management. Many of the higher-level committee decisions were reviewed by a team that consisted solely of plant managers. The organizational review board was responsible for reviewing production team recommendations of suspension or discipline. The advancement certification board certified employee skill levels and recommended pay increases to the plant manager. The safety committee reviewed production team accident reports and considered the best methods to ensure a safe workplace.
The employer was charged with violating Section 8(a)(2) of the Act by dominating or supporting a "labor organization." In considering whether the seven committees constituted "labor organizations" within the meaning of the Act, the Board stated that under Section 2(5) a labor organization must exist for the purpose, in whole or in part, of "dealing with" the employer regarding terms and conditions of employment. The Board noted that the term "dealing with" contemplates a bilateral mechanism under which the employer and the employee committees submit to one another’s proposals concerning the terms and conditions of employment and engage in negotiations.
In this case the Board affirmed the Administrative Law Judge’s ("ALJ") dismissal of the complaint and found that the committees do not "deal with" an employer if their purpose is to perform essentially managerial functions. The Board held that because the committees exercised authority that was unquestionably managerial, they were not "labor organizations" within the meaning of the Act. The Board reasoned, in part:
"* * * what is occurring in the Respondent’s facility is the familiar process of a managerial recommendation making its way up the chain of command. Higher-management review of a recommendation made by lower management cannot be equated to the ‘dealing’ between an employer and a representative of its employee contemplated by the statute. Indeed, it is the fact that the interaction is occurring between two management bodies that distinguishes this case from cases such as * * * [citations omitted] and persuades us that the statutory element of dealing is absent."
Crown Cork establishes that employers will not violate Section 8(a)(2) by maintaining employee commit-tees that possess real authority akin to management. If this authority is established, the fact that the decisions of the committees are subject to review by other managerial employees does not convert them to "labor organizations."
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