Electromation, Inc. v. National Labor Relations Board
35 F.3d 1148 (1994)
Premium Feature
Subscribe to Lexplug to listen to the Case Podcast.
Rule of Law:
An employer dominates a labor organization in violation of Section 8(a)(2) of the National Labor Relations Act when it creates, structures, and administers employee committees that exist for the purpose of dealing with the employer concerning grievances, wages, hours, or other conditions of employment.
Facts:
- Electromation, Inc., facing financial losses, decided to revise its employee attendance policy and replace scheduled wage increases with lump-sum payments.
- In response, 68 employees signed a request asking the company to reconsider the new policies.
- Electromation's president, John Howard, met with eight employees to discuss their concerns, which included wages, bonuses, and leave policies.
- Following the meeting, Howard decided to involve employees by creating 'action committees' to propose solutions to these problems.
- Electromation management unilaterally created five specific committees, drafted their purposes and goals, and posted sign-up sheets for employees.
- Each committee was composed of up to six employees and at least one or two members of management, including an Employee Benefits Manager who coordinated all committees.
- The committees met on company premises during work hours, and Electromation paid the employee members for their time and provided all necessary supplies.
- Management representatives participated in committee meetings, and in one case, a manager declared an employee proposal too costly, preventing it from being pursued further.
Procedural Posture:
- The International Brotherhood of Teamsters filed an unfair labor practice charge against Electromation with the National Labor Relations Board (NLRB).
- An NLRB regional director issued a complaint alleging violations of the National Labor Relations Act.
- Following a hearing, an Administrative Law Judge (ALJ) found that Electromation had violated Section 8(a)(2) and (1) of the Act by dominating the action committees.
- Electromation appealed the ALJ's decision to the full National Labor Relations Board in Washington, D.C.
- The Board affirmed the ALJ's conclusion that the committees were employer-dominated labor organizations and issued an order requiring Electromation to cease and desist its support and to disestablish the committees.
- Electromation filed a petition with the U.S. Court of Appeals for the Seventh Circuit to review and set aside the Board's order, and the NLRB filed a cross-petition for enforcement of its order.
Premium Content
Subscribe to Lexplug to view the complete brief
You're viewing a preview with Rule of Law, Facts, and Procedural Posture
Issue:
Does an employer's establishment, structuring, and financial support of employee 'action committees' to address and resolve employee grievances regarding working conditions constitute unlawful domination of a labor organization in violation of Section 8(a)(2) of the National Labor Relations Act?
Opinions:
Majority - Will, District Judge
Yes, an employer's establishment, structuring, and financial support of such 'action committees' constitutes unlawful domination of a labor organization. The court's reasoning proceeded in two steps. First, the committees were 'labor organizations' under Section 2(5) of the Act because (1) employees participated in them, (2) their purpose was to 'deal with' the employer, and (3) the subjects discussed (bonuses, attendance policies) were conditions of work. Citing NLRB v. Cabot Carbon Co., the court affirmed that 'dealing with' is a broad term that includes making proposals and is not limited to formal collective bargaining. Second, the court found that Electromation 'dominated' these labor organizations in violation of Section 8(a)(2). The company's domination was established by the totality of its conduct: it created the committees on its own initiative, defined their structure and goals, controlled their membership and agendas, included management on the committees with veto power over proposals, and provided full financial support. This level of control goes beyond permissible 'cooperation' and constitutes illegal domination, as it places the employer on both sides of the bargaining table.
Analysis:
This decision reaffirms the NLRB's broad interpretation of what constitutes an unlawful, employer-dominated 'company union' under Section 8(a)(2) of the NLRA. It clarifies that the statute prohibits not only employer actions motivated by anti-union animus but also well-intentioned programs that cede control of a labor organization's structure and function to the employer. The ruling distinguishes between legitimate employee participation programs focused on quality or efficiency and illegal committees that 'deal with' the employer on mandatory subjects of bargaining. For future cases, Electromation solidifies a focus on the objective facts of the employer's conduct and control, rather than the employees' subjective satisfaction with the arrangement, in determining whether illegal domination has occurred.
