For many nonunion employers, the National Labor Relations Act (NLRA) is not on the radar screen of worrisome employment laws. Most think it applies only to union-related affairs and, therefore, do not pay much attention to it. However, recent court decisions and rulings by the National Labor Relations Board (the federal executive agency responsible for enforcing the NLRA) demonstrate that nonunion employers should be concerned about the NLRA’s coverage. Specifically, the NLRB is applying the Act to nonunion situations where the agency believes the employer’s actions could possibly "chill" future union organizing activity. This broad interpretation is impacting many employment practices, including employee involvement committees, disciplinary investigations, and pay procedures. You can limit your risks under the law both by keeping an eye on NLRB decisions and by following the five precautionary steps outlined below.

A quick review of the NLRA’s history and purpose helps explain what may appear to be illogical applications of an old law. When the NLRA was passed in 1935, it was intended to address an imbalance between the strength and concentration of big industrial employers and the newly emerging unions that were attempting to represent employee interests. At that time, none of the present employment legislation protecting employee rights existed, since most of it was passed starting in the 1960s. The atmosphere in the 1930s was clearly adversarial, and some companies responded with "union-busting" tactics and the formation of "sham" company-controlled unions. The period immediately after the NLRA’s passage was marked by management and labor confrontation, but over time most of the abuses that were targeted by the Act were eliminated and many more employee rights were created by employment legislation.

As the economy has shifted from an industrial base to a service and information base, the structure of business has become more defused and entrepreneurial, and employees have developed much greater mobility and many more opportunities. As a result, the balance in employer/employee relationships has changed dramatically since the original passage of the NLRA. However, the NLRB’s enforcement of the Act often appears to ignore these changes and assumes that an adversarial relationship still exists, a stance that catches many nonunion employers by surprise.

For example, employee participation committees, where rank and file employees and members of management get together to discuss issues affecting the workforce, are a popular method for getting employee input. However, recent decisions by the NLRB call into question the legality of these committees if they involve employees in the decisionmaking process. In particular, these committees may be illegal if they are employer-assisted or -dominated labor organizations and they discuss terms and conditions of employment.

The NLRB evaluates the legality of employee committees using a two-part analysis. First, it considers whether the committee constitutes a "labor organization" under the NLRA. A committee is a labor organization if its employee-members participate and "deal with" the employer regarding issues such as wages, hours, or other terms and conditions of employment. Next, it considers whether the employer has dominated or interfered with the formation or administration of the committee. This second prong is satisfied if management created the committee and determines the committee’s structure, function, and continued existence.

For example, in EFCO Corp., 327 NLRB No. 71 (1998), the NLRB found that the employer violated the NLRA because it selected the members of several committees, set the agenda (which included terms and conditions of employment), and accepted or rejected the recommendations made by the committees. Generally, employee committees that have missions limited exclusively to information gathering are allowed. Thus, in Stoody Co., 320 NLRB No. 1 (1995), the NLRB determined that the employer did not violate the NLRA when it formed an employee handbook committee since the committee was explicitly directed not to discuss terms and conditions of employment. Instead, it was to determine areas of the handbook that were unclear or inconsistent with current practice.

Another potential area of concern is disciplinary investigations. In the past, most employers would not consider allowing nonunion employees to have representation during an investigatory interview. However, in Epilepsy Foundation of N.E. Ohio, 331 NLRB No. 92 (2000), the NLRB recently found that nonunion employees have the same right that union employees have to request and have present a coworker during an investigatory interview that could lead to discipline. This right exists as part of the right of both union and nonunion employees to engage in concerted activities under the NLRA. Many experts predict that this decision will affect almost every investigation, including those involving employee misconduct such as sexual harassment, workplace violence, work rule violations, and theft.

Pay policies also can be the basis for NLRA claims. Since wage issues are a frequent objective of employee organizations, rules prohibiting wage discussions have been interpreted to be unlawful interference with the right of employees to engage in organizational and concerted activity. (For further discussion regarding what is protected as concerted activity, see the next section.) In fact, a policy does not even have to be in writing to violate the NLRA; it need only be orally communicated to employees. For example, in NLRB v. Main Street Terrace Care Center, 218 F.3d 531 (6th Cir. 2000), the Sixth Circuit Court of Appeals upheld the NLRB’s ruling that the employer violated the NLRA because its managers orally instructed employees not to discuss their wages.

Employers also may face NLRA claims when they take adverse employment action against employees involved in "concerted activity." Specifically, the NLRA gives employees the right to participate in concerted activities for the purpose of collective bargaining or other mutual aid or protection. For a concerted activity to be protected, it generally must center around a controversy involving the terms and conditions of employment. Thus, if employees take action as a group to complain about your organization’s policies, their actions may be protected.

For example, in Arrow Electric Company, Inc. v. NLRB, 155 F.3d 762 (6th Cir. 1998), the Sixth Circuit Court of Appeals found that the employer violated the NLRA when it terminated four nonunion employees who walked off the job to complain about their supervisor’s abusive behavior. In that case, the employer could not enforce its policy against employees improperly leaving a jobsite since the employees were acting as a group to protest their terms and conditions of employment. In addition, even if an employee acts alone, his conduct may be considered concerted activity protected by the NLRA if he is acting on behalf of other employees. In NLRB v. Main Street Terrace Care Center, 218 F.3d 531 (6th Cir. 2000), an employee was found to have engaged in concerted activity when she talked to management about the wage-related problems of other employees.

Because the NLRA can impact you in so many different ways, you should regard it in the same way as employment discrimination or wage and hour laws. In other words, you should have a plan to comply with the law and to recognize potential problem areas. You can help prevent NLRA claims by taking the following five steps.

1. Review your policies and procedures to ensure compliance with the NLRA. Pay special attention to employee participation committees, disciplinary procedures, and pay policies. In addition, you should stay current on new NLRB decisions.

2. Make sure any employee participation committees do not negotiate with or make recommendations to management. They should not deal with any issues concerning terms or conditions of employment, such as pay, work rules, and discipline. To ensure compliance with the NLRA, you also may want to limit the committees specifically to information gathering.

3. Consider including in your disciplinary policy the right for employees to request coworker representation during investigatory interviews when the results may be expected to lead to discipline. Although you are not required to notify your employees of this right, your policy should not prohibit such representation. In addition, you should have a plan for implementing these requests.

4. Make sure your pay policy does not prohibit wage discussions. Many employers want to ban pay discussions in spite of the NLRA’s position. Instead, you should encourage employees to direct questions or concerns about compensation to the human resources department or their department head.

5. Have your attorneys check your policies and procedures specifically for NLRA compliance. Regular legal reviews, particularly when you make policy changes, are good insurance for risk control.

The employment arena has drastically changed since the NLRA’s implementation in 1935, and, instead of confrontation, the trend is towards more employers working cooperatively with their employees to pursue joint goals. Unfortunately, many of the NLRB’s decisions appear to ignore this trend and assume that the uncontrolled adversarial conditions of the past continue to exist today. As a result, you should expect the NLRB to apply the Act literally, regardless of your organization’s intentions and regardless of whether there is an issue of union activity.

This article is not intended as legal advice. Readers are encouraged to seek appropriate legal or other professional advice.

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