Beware Employer-Controlled Labor Organizations

September 22, 2017

Topics: Unions and the NLRB

Most employers know that employees have legal rights to form unions—if a majority of employees want to do so.  Union organizations collectively bargain with management over the union member’s wages and other terms and conditions of employment, rather than each individual employee negotiating with the employer for themselves.  But what if the employer sets up a group or committee comprised of employees and managers to improve conditions, relationships, or address other issues at work?  Can this be done?  Possibly not.

Under the federal National Labor Relations Act (the “NLRA”), private sector employees may form or attempt to form a union or labor organization.  The same law prohibits private sector employers from forming a union or labor organization for their employees, or from dominating or interfering with any union or labor organization formed.  Under the NLRA, only the employees, not the employers, have the right to form and choose their union or labor organization.

Many employers frequently form committees, which may include representatives of employees and management, to address issues such as pay, work shifts, safety, decide perks or suggestions to improve the working environment, and other terms and conditions of employment.  Unfortunately, as one company recently learned, if the committee looks like an employer-dominated union, it may cross the line.

This question was in the news in 2017, in a case involving T-Mobile USA Inc. (“T-Mobile”).  In 2015, T-Mobile formed T-Voice, a nationwide program to gather and submit complaints from its customer service representatives, which were not then unionized.  T-Mobile claimed that T-Voice was intended to deal with employee issues in an organized fashion.

The Communications Workers of America (“CWA”), a union who had unsuccessfully been trying to organize T-Mobile, claimed that T-Voice was an improper employer-controlled labor organization because it dealt with employee issues.  CWA brought its case to the National Labor Relations Board (“NLRB”), the federal agency that addresses issues under the NLRA, claiming that T-Mobile had violated its employees’ rights to form and choose their own labor organization.

In April 2017, the NLRB judge agreed with the CWA and decided that T-Voice was an unlawful employer-dominated labor organization.  The judge decided that T-Voice was controlled by T-Mobile because T-Mobile selected T-Voice’s employee representatives, trained and paid the employee representatives, determined T-Voice’s procedures, determined T-Voice’s goals and agenda, and provided all financial support for T-Voice.

As such, the judge ordered T-Mobile to dissolve T-Voice.

Federal law and the NLRB’s decisions do not ban all efforts by employers to work with employees to improve their working environments.  They merely restrict the ways in which employers legally can do so.  Employers who seek to establish committees or groups composed of both employees and management to improve any terms and conditions of employment, should consult with counsel regarding best practices, compliance with the NLRA and any applicable federal, state and local laws.