Making Teamwork Work And Appeasing Uncle Sam

To hear many employers talk, you would think the sky had just fallen. They argue that a mid-December ruling by the National Labor Relations Board (NLRB) has dealt a potentially crippling blow to employee teams, which companies have set up by the thousands in recent years. The reason: to boost productivity and quality and restore U.S. competitiveness. The board's decision already has been appealed, and management lawyers are advising companies to prepare for years of litigation. But there's a more constructive response: Employers should take some cues from the NLRB and give employees more say in running teams.

The NLRB case involved Electromation Inc., an Elkhart (Ind.) maker of electrical parts. The company set up five committees of up to six employees and one or two managers to deal with issues such as pay scales for skilled workers. Then the Teamsters, which was trying to organize Electromation, claimed that the arrangement violated the National Labor Relations Act of 1935. Among other things, that law bans sham unions--groups that perform some functions of labor unions but are controlled by management.

'TAINTED.' The NLRB decided that Electromation did breach the law. The company's teams elicited other workers' views and dealt with traditional bargaining issues such as wages and working conditions, so the board labeled them "labor organizations" as defined by the act. It also found that the teams were "dominated" by management, which formed them, set their goals, and decided how they would operate.

Several NLRB members argue that the Electromation ruling doesn't outlaw work teams per se. But management groups say that thousands of similar teams exist. "The Electromation decision says that any employee-involvement program may be tainted," says Arnold E. Perl, a Memphis lawyer who wrote a brief in the case for the U.S. Chamber of Commerce.

This needn't be, however. True, teams that act in a representative fashion on any condition of employment--improving safety, for instance--now are suspect. But all employee-involvement systems can be made legal. Management still has the right to suggest that they be formed, help set them up, and even finance them. The key is that teams must not be dominated by management. The NLRB decision doesn't say what that means. But board member Dennis M. Devaney agrees that secret-ballot elections of members would probably be one test.

There could be some others. Teams might have wide latitude in deciding what issues to deal with and have the right to meet apart from management. Independent teams also couldn't be dismantled by executive whim--though the law doesn't require a company to follow up on employee proposals. "Employers must decide if they really want employees involved, or if they want to keep all the power," says Lewis L. Maltby, an expert on workplace rights at the American Civil Liberties Union.

Some proponents of team systems, such as former Labor Secretary Ray Marshall, point to Europe as a model. In Germany, workers elect representatives to a plant-level "works council" that management must consult on most decisions affecting employees, from work organization to health and safety policies. The councils aren't unions and can't call strikes.

BACKDOOR FEARS. In the U.S., General Motors Corp.'s Saturn Corp. is the leading example of independent teams. There, groups of 5 to 15 workers perform managerial tasks such as hiring. They also elect representatives to higher-level teams that make joint decisions with management on virtually every aspect of the business, from car design to marketing to sticker price. Saturn is unionized, but a similar approach could obviously work at unorganized companies.

Most U.S. employers distrust the works-council idea as a backdoor organizing tool for unions. And some just don't want to give up so much power: Many companies have a narrow concept of what teams are, defining them simply as groups of workers who find ways to do their own jobs better. But in a concurring opinion to the Electromation decision, NLRB member John N. Raudabaugh argued that even these teams might be considered labor organizations under the broad definition of the 1935 act, should someone press that point. So the best insurance may be truly to empower employees on teams, even if they represent only themselves.

That may sound revolutionary to many executives. But if Corporate America is serious about teams--and the results they produce--the Electromation decision need be no more than a healthy midcourse correction.

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