Why Is Employee Involvement an Unfair Labor Practice?

U.S. labor law is largely based on the false narrative of an inequality of bargaining power between employees and employers. The theory goes that an employer will extort an employee down to their reservation wage, or lowest acceptable wage that is better than being unemployed.

Tyler Cowen and Alex Tabarrok, both professors at George Mason University, dispel this myth. As they explain, “[B]uyers compete against other buyers (and sellers compete against other sellers). Firms buy labor and they are competing primarily not against workers but against other firms. Firms versus Firms! Now that is a real battle!”

Meaning when companies are trying to determine what compensation to pay an employee, they are not thinking about shaking down an employee, but how much another company may pay the employee. Interestingly, the data show it is more likely that an employee leaves a company than an employer breaks off the relationship (see data here on quits vs. layoffs).

Even still, labor unions and Democrats commonly argue workers need stronger voice in how a company is run. Yet, there is an obvious reason why employees are not given much of a say in company matters. The only voice an employee can have under American labor law is from a union. Other kinds of “employee involvement,” sometimes referred to as a “company union” or simply a formal system that gives employees input on how the company runs, have been illegal for decades. This is just another flaw in the outdated, 80-year-old National Labor Relations Act.

Today, Bloomberg Businessweek reports that T-Mobile is in the Communications Workers of America’s (CWA) crosshairs because they are trying to give workers a greater voice. CWA has been trying to organize T-Mobile for years, but “[n]ow CWA is alleging to the National Labor Relations Board (NLRB) that T-Mobile has adopted an anti-union tactic that’s been illegal since 1935: creating a company-controlled union to drain support for an independent one.”

But the fact that T-Mobile cannot give employees a say (without a union) is a flaw of the NLRA, not an attribute. Bloomberg Businessweek describes the program that T-Mobile is using to give workers a voice:

CWA says that in June 2015, Brian Brueckman, a T-Mobile senior vice president, sent employees an e-mail announcing “another big step to ensure your voice is heard” by management—the nationwide rollout of a group called T-Voice, composed of employee “representatives” from each call center, selected every six months by the company. “T-Voice is your voice,” Brueckman wrote in his e-mail, the first of several messages to employees that CWA contends contradict federal labor rules.

Under the NLRA, it is an unfair labor practice for management to “dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.”

NLRB precedent has decided that most kinds of labor-management cooperation (without union involvement) that is constructed to determine work issues is deemed illegal because they constitute a “company union.”

Setting this standard was the 1992 case, NLRB v. Electromation:

The company in that case was ordered to disband five worker-management committees that had been set up to deal with absenteeism, no smoking policies, communications, pay progression, and attendance bonuses. Useful or not to either workers or management, the establishment of these committees was determined to be an unfair labor practice.

As George Leef, director of research of the John W. Pope Center for Higher Education Policy, asked, “Why should it be illegal for management to take peaceful steps to increase worker satisfaction?”

Easy, it shouldn’t.