34 Labor Relations Case 11 Was the Employee Involvement Committee a Violation of Labor Law? Case 11 Was the Employee Involvement Committee a Violation of Labor Law? Company Research Federal Credit Union, Warren, Milford, and Detroit, Michigan Union Food and Commercial Workers, Local Union No. 876 BACKGROUND The Union Organizing Campaign The employer was a credit union with its main office in Warren, Michigan, and branches located in Milford and Detroit, Michigan. In early March 1990, several employees met with representatives of the union. The union then actively began an organizational cam- paign and solicited signed union authorization cards from a number of employees. Shortly thereafter, the union filed a petition with the regional office of the National La- bor Relations Board requesting that a representational election be held. The union claimed that it had obtained signed representation authorization cards from a majority of the some 20 to 25 employees in a proposed bargaining unit. The NLRB subsequently directed that a representational election take place on May 21, 1990. The Employment Involvement Committee (EIC)-Preelection On April 4, 1990, management advised all its employees that it had retained a manage- ment consultant, Walter Meckfuss.' On April 30, management called for all employees from its several locations to attend an employee meeting. Walter Meckfuss, the com- pany's new management consultant, was present at this meeting. Meckfuss announced at the April 30 meeting that the company had decided to form an "employee involvement committee," or EIC, to consist of an employee and a super- visory representative from each of the three offices. Supervisory representatives were to be appointed by management, and employee representatives were to be elected by employees in their respective offices. Meckfuss stated that the purpose of the EIC was to improve communication and morale in the firm and to enable the employees to have an important say in improving work operations and other aspects of their jobs. Because the first EIC meeting was scheduled for the next day, May 1, representatives and their alternates were selected almost immediately. For example, the Milford branch employees elected Carla Lee and Teresa Coleman as their representative and alternate, 'The names of all individuals and certain data are disguised.Cases in Collective Bargaining & Industrial Relations, 10/e 35 84 Part One Legal Aspects of Collective Bargaining: National Labor Relations Board Cases respectively, in a restaurant on the way home from the meeting. The Milford branch su- pervisor, Martin Post, was present during this election process. EIC meetings were held on May 1, 7, and 16, 1990. All meetings were held at the War- ren facility or elsewhere in Warren. The meeting of May 16 was held in the evening; the other meetings were held during working hours. The May 16 meeting was for all repre- sentatives and alternates; the other meetings were just for representatives, although an alternate could attend in the absence of the representative. In her representative capac- ity, Carla Lee received her normal pay for the daytime meetings she attended as well as mileage between her branch in Milford and the meeting site in Warren. Dinner was sup- plied by the company at the May 16 evening meeting. The May 1 meeting was attended by the three employee representatives, and Jane Havis, branch manager at Warren, Martin Post, branch manager at Milford, and Walter Meckfuss. Meckfuss explained what the EIC was supposed to do, saying that the em- ployee members were to be the "unbiased eyes and ears" of the employees they repre- sented. They should try to get the employees in their respective departments to talk with them regarding any problems they felt needed attention. The representatives were then to bring these problems and suggestions to the EIC meetings. At the meetings, if solutions to such problems were found, they would be presented to top management or the board of directors. Some possible topics for action by the EIC discussed at the May 1 meeting were smoking policies, part-time benefits, and annual reviews. The meeting lasted about an hour and a half, during which an EIC chairperson and secretary were selected. At the May 7 meeting, a smoking policy was discussed; Meckfuss suggested that the EIC might come up with ideas to solve the smoking problem if representatives would discuss the matter with the employees they represented and ask for their opin- ions. The question of a constantly changing sick-time policy was also brought up. Meckfuss responded that it was a difficult subject, and that management had been studying the benefit package and comparing it with similar businesses in the area. On the subject of educational reimbursement, Meckfuss advised the representatives to ask their fellow employees how they wanted it handled, and then a written policy would be developed. Personal leave days, employee reviews, and Christmas bonuses were also discussed. The May 16 evening meeting of all representatives and alternates took place in War- ren at a local restaurant. Two members of the board of directors were also present, Nepah Rentul and Sam Barrow. An outline for discussion was presented, which included such topics as a smoking policy, wage and salary review, and sick-time benefits. Carla Lee asked whether employees were to get an ample pay raise. Meckfuss responded that man- agement was checking with similar-sized credit unions within the area to determine an appropriate salary scale. With respect to sick time, Meckfuss said that he felt the em- ployees would again be allowed seven sick days annually (the number of days of annual paid sick leave had been reduced from seven to five in 1989). However, Meckfuss stated that nothing could be done in these areas until after the union representational election. With respect to the matter of vacation benefits for part-time employees, Meckfuss sug- gested that the representatives solicit input from the employees and come up with a for-36 Labor Relations Case 11 Was the Employee Involvement Committee a Violation of Labor Law? 85 mula. There was also a discussion about credibility between the employees and the board of directors. Sam Barrow stated that he would meet with the EIC members occasionally, and that he wanted to have more open communication between the Board and all of the staff. Walter Meckfuss stated that he knew that annual reviews were a problem and some- thing had to be done about them. He added that it was possible that a special committee could be established to conduct annual reviews for employees. The Representational Election On May 21, 1990, the NLRB conducted a union representational election for the pro- posed bargaining unit. By a vote of 12 to 9, a majority voted against having the union certified as their bargaining representative. The Employee Involvement Committee (EIC)-Postelection Two EIC meetings were held on May 30 and June 20, 1990, after the election. The May 30 meeting was a predinner meeting at a local restaurant. At this meeting, the EIC developed a memo for employees listing and describing six issues that the EIC would be presenting at the next board of directors meeting, scheduled for June 21. Those issues were wage and salary pay scales, including the area wage survey and part-time employee benefits; clean- ing out the ventilation system at Warren; smoking areas; sick time; employee transactions; and memos. The latter two issues involved setting a specific time during the day to see su- pervisors for access to money and slowing down the number of memos that were being is- sued. By memo to the EIC dated May 31, Sam Barrow responded to some of the issues raised in the EIC's May 30 memo, informing the EIC that the firm was getting bids re- garding ventilation system maintenance, that sick-time policy and cash incentive awards would be announced at the June board meeting, and that new procedures were in place to ensure more consistency in policies. At the June 20 meeting of the EIC, Meckfuss stated with respect to sick-time policy pro- posals that he did not think there would be any problem with them, and that the employees should have gotten what they had asked for a long time ago. He commented that proposals dealing with part-time benefits would be more difficult because of the costs. With respect to smoking areas, the Warren EIC employee representative had a suggestion for a location in the Warren offices where a smoking area might be designated. Meckfuss said that he would ask management to check with the fire marshal for approval. During the meeting, Meckfuss stated that wages would not be discussed because the wage survey was not complete. The Union's Unfair Labor Practice Charges Shortly after the representational election, the union filed unfair labor practice charges against the company claiming that the company had violated Sections 8(a) (1), 8(a) (2), and 8(a) (5) of the Labor Management Relations Act. The union claimed that the em- ployee involvement committee (EIC) was a labor organization within the meaning of Section 2(5) of LMRA, and that it had been created by management to deny the em- ployees their own union representation.86 Part One Legal Aspects of Collective Bargaining: National Labor Relations Board Cases POSITION OF THE UNION The union claimed that the purpose of the employee involvement committee was to un- dercut the employees' desire for a union. The EIC had been created by the company with- out any employee request for such an entity shortly after the union had begun its repre- sentational campaign. The nature of the EIC had been determined by management, and employees had been directed to select representatives and alternates. Meetings were called by management, some on company time with the employee representatives paid for attendance. Although the meetings were led by a management consultant, it was clear that Meckfuss was serving as an agent of management and the board of directors. Vir- tually every topic discussed at the EIC meetings dealt in some way with wages, hours of employment, and working conditions. In the union's view, the EIC was designed to cre- ate in the employees' minds the sentiment that there was no need for a labor union. This was particularly evident in the efforts of Meckfuss and members of the board of direc- tors to solicit employee grievances and promise to remedy them. The union argued that the EIC was a labor organization created and dominated by the company in violation of Sections 8(a) (2) and 8(a) (1) of the Labor Management Rela- tions Act. By soliciting employee grievances and promising to improve various working conditions, the employer further violated Section 8(a) (1) since these matters were con- tingent upon the outcome of the union election. The union argued that it had attained a valid majority of employees who had signed union authorization cards. The company had refused to recognize these cards and had insisted on a formal NLRB election. By refusing to recognize and bargain with the union when it had obtained signed authorization cards from a majority of employees, and by having unlaw- fully interfered with the union, the employer had violated Section 8(a) (5) of LMRA. The union requested as a remedy that the NLRB under Section 10(c) of the Act direct that the EIC be disestablished and that the company recognize and bargain with the union because of the company's significant unfair labor practices that destroyed a valid union majority. POSITION OF THE COMPANY The company claimed that it had not violated any provisions of the Labor Management Relations Act by organizing an employee involvement committee (EIC). The purpose of the EIC was to provide a means for employees to address various concerns and to present recommendations for solutions to management and/or the board of directors. The company had contemplated the formation of the EIC for several months prior to the union representational election. No employees were forced to participate in the EIC. The employees and their representatives had found the EIC to be an appropriate forum in which to express their concerns. The EIC was not dominated by management; the management consultant, Mr. Meckfuss, was merely a conduit between management and the employee representatives. No employee was disciplined or reprimanded for anything that was said or brought up within the EIC.Labor Relations Case 11 Was the Employee Involvement Committee a Violation of Labor Law? 87 The company contested the allegation that the EIC was a labor organization within the meaning of Section 2(5) of LMRA. The EIC was a venue for presenting employees' concerns to management, such as is widespread in American industry. Quality circles, quality-of-work-life programs, and the like, provide a cooperative means by which em- ployees and management can discuss and solve mutual problems. These nonadversarial programs should be fostered and not condemned by labor laws. The fact that the em- ployees rejected the union was an indication that they considered the EIC to be a viable mechanism for addressing their concerns. Although the company denied that the EIC violated Sections 8(a) (1) and 8(a) (2), it argued that in the event the NLRB should rule that some technical violation had oc- curred, an order to recognize and bargain with the union would be totally improper. A majority of employees had voted against the union. If the NLRB should find that the company had inadvertently violated the Act, the appropriate remedy would be to direct that a new representational election be held to determine the employees' wishes con- cerning union representation