Employers might think it wise to seek input from employees about working conditions, but they must tread carefully to make sure that they do not violate the National Labor Relations Act’s (“NLRA” or “the Act”) prohibition on “company unions.”
An Administrative Law Judge (“ALJ”) of the National Labor Relations Board (“NLRB” or “the Board”) found in T-Mobile USA, Inc., 14-CA-170229 (April 3, 2017) that the company violated the NLRA by setting up an “employer dominated organization” at its call centers. In the case, the company formed the group to give its employees a “voice” on what it called “pain points.” The company selected employees to be representatives in the group; had the employees attend summits away from their regular place of employment; and tracked the group’s “pain points.”
The company claimed the group was merely formed to address the “pain points” (repeated problems) of customers, not employees. However, the ALJ found that the group addressed issues related to employees’ working conditions. For example, on one occasion, the group addressed the issue of taking paid time off. On other occasions, the group raised issues related to employees’ benefits and bathroom conditions, among other matters. The ALJ noted this feedback was solicited from employees and that managers had requested “pain points” on any topics, including those that “enhanced the culture” at work.
Employers often ask their employees for input about all sorts of work and workplace issues. So why would the existence of a group such as this one violate the Act?
The major reason is that, when passing the NLRA in 1935, Congress expressly sought to prohibit employee groups that were dominated by employers and essentially functioned as “fake” unions. The NLRB has defined a dominated group as one that is “by virtue of the employer’s specific acts of creating the organization itself and determining its structure and function.” The employee group described above satisfied this test because it was established by company management and management dictated its structure and direction by “establishing its goals and meeting agendas, requiring face to face meetings with management, and determining how to enter the ‘pain points.’” In sum, the group would only exist with the further support and direction of management.
It’s entirely proper for employers to create employee groups for the purpose of resolving a variety of work, production, safety and customer issues. But this recent decision by an NLRB ALJ highlights the risks that are created when the group’s purpose – or perhaps even its unanticipated discussions – focus on “terms and conditions of employment.” When the employer creates and sponsors an employee group where the discussion turns to subjects such as employee pay, employee benefits, or even matters such as employee work schedules, this creates a risk that the NLRB might find that the employer has improperly created something that is the equivalent of an employer sponsored union. This risk had been especially high during the Obama administration, during which the NLRB has been very aggressive in supporting both unions and employees. Because the law here is unclear and subject to change, employers should exercise caution – and consider consulting with legal counsel — when creating or sponsoring employee groups where the discussions may involve any set of terms and conditions of employment.
Andrew MacDonald is an associate in the firm’s Labor and Employment Department, resident in its Philadelphia office.