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Labor Law

Unfair Labor Practices

An UNFAIR LABOR PRACTICE is any action or statement by an employer that interferes with, restrains, or coerces employees in their exercise of the right to organize and conduct collective bargaining. Such interference, restraint, or coercion can arise through threats, promises, or offers to employees.


Foreign competition, technological change, and concerns about declining productivity have led to significant modifications in the way many U.S. businesses manage their affairs. These changes, which have been championed by a long list of management consultants, have appeared under numerous labels, including quality circles and total quality management (TQM). All of these approaches emphasize that the goal of a business is to achieve a high standard of quality in goods manufactured or services provided. To meet this quality goal, businesses have moved away from top-down management, substituting a team approach. Traditional management personnel and line-level workers meet in committees to discuss and resolve issues within the company concerning product, service, and the way work is organized.

The advocates of teamwork and quality circles have hit a legal brick wall in the National Labor Relations Act of 1935 (NLRA) (29 U.S.C.A. § 151 et seq.). Under the NLRA, sections 2(5) and 8(A)(2), employers are forbidden to create employer-dominated company unions. In Electromation, 309 N.L.R.B. 990 (1992), the National Labor Relations Board (NLRB) ruled that Electromation, a nonunion company, could not sponsor an "action committee" because that committee was, under the NLRA provisions, a labor organization. Additional cases have confirmed the NLRB's position on this issue.

Proponents of quality circles and teamwork argue that the NLRA is an antiquated set of laws, based on a period of U.S. history when businesses used every tool at their disposal to subvert unions and union organization. The adversarial posture of labor and management may have made sense in the past, this argument goes, but it is counterproductive in an economy that must adapt quickly to world market forces. The most radical proposal by critics of the NLRB's position on this issue is to abolish the NLRA altogether.

More moderate proponents argue instead for changes in the NLRA to permit committees, teams, and more of what they call workplace democracy. They point out that with the steady decline of union membership and blue-collar jobs, traditional labor-management relations have become irrelevant. They note that white-collar workers, who now dominate the U.S. economy, are less likely to join a LABOR UNION. Therefore, worker morale and job satisfaction are better when employees are included in the decision-making process of a business.

Proponents of quality circles also believe that a better educated workforce is capable of making informed decisions about its relations with employers. They assert that the days of the employer's being an absolute sovereign are over. It is more productive to allow nonunion employees to organize within the company based on committees and circles. These workers are entitled to the same type of participatory democracy found in labor unions.

Most proponents would give employees the chance to make up their own mind about their work environment. If a union successfully wins over enough employees to be certified as the legal bargaining agent, that would indicate dissatisfaction with the employer and would be an acceptable outcome. These proponents would object to unions filing complaints with the NLRB over company committees where the employees have rejected union representation in the past. As long as employees want to participate in a company committee or circle, they should be permitted to do so.

Proponents argue that the bar on these types of workplace organizational innovations hurts workers. These innovations give employees more autonomy to plan work schedules, meet deadlines, operate equipment, make repairs, and handle health and safety issues. In the past an employee could suggest a change to management but then had to stand back and observe whether the change took place. In today's workplace an employee wants to implement as well as suggest improvements.

Finally, proponents note that in union-organized companies unions are free to negotiate the participation of employees in teams and quality circles. They suggest that it is unfair to restrict nonunion employees from electing to participate in similar business management ventures.

The U.S. labor movement has resisted vigorously the introduction of employee involvement programs by management in both union and nonunion environments. Labor union leadership views the introduction of employer-sponsored committees as a return to the past and as a way of undercutting the ability of unions to organize white-collar workers.

Opponents point out the sordid history of U.S. labor relations prior to the passage of the NLRA in 1935. Company-sponsored unions were put forward as a way to resolve disputes over wages, hours, and other conditions of employment. Employees believed that these unions acted in GOOD FAITH to negotiate a contract with management. In reality, these organizations were sham unions, dominated by the employer. The employers would put company spies in them to monitor what was discussed. Employees were either bought off or fired if they proved too effective in their union duties.

Opponents argue that the NRLA is preserving the independence of labor unions. Without its decisions employers of nonunion employees would use TQM, quality circles, and other buzzwords to promote a nonunion status that would place employees at a disadvantage. Employees will quite likely be intimidated in employer-organized groups, and unable to raise or meaningfully discuss certain issues that management does not want to hear. Without a collective bargaining agreement negotiated by a union, opponents maintain, employees will not have job security or promotion protection.

Opponents also question who makes the decisions in these groups. Though the rhetoric suggests empowerment of employees, employee committees are purely advisory, and the employer retains the authority to decide all issues. In addition, because management creates these committees, management can dissolve them at any time. The inequality of power within a nonunion business dictates that the employer can do whatever management wants, regardless of a recommendation by an employee committee.

The NLRA has placed a barrier to new models of business organization. The distrust of labor unions and their difficulty in making inroads with white-collar workers reconfirms to the unions the need for an adversarial posture with management. Those who seek fundamental change in the way U.S. business operates believe that the NLRA must be amended to accommodate a major shift in economic organization.

An unfair labor practice can occur during collective bargaining. In Auciello Iron Works v. NLRB, 517 U.S. 781, 116 S. Ct. 1754, 135 L. Ed. 2d 64 (1996), the U.S. Supreme Court upheld an NLRB ruling that the employer had committed an unfair labor practice. After the union accepted one of the employer's collective bargaining proposals, the employer disavowed the agreement because of good faith doubts about whether the union still commanded a majority of the employees. The Court reasoned that the employer's doubts arose from facts that the employer had known about before its contract offer had been accepted by the union.

Labor laws are not intended to interfere with an employer's normal exercise of discretion in hiring and firing employees. In general, an employer may hire employees based on their individual merit, with no regard to union affiliation. Refusal to hire an applicant owing to affiliation with a labor union is an unfair labor practice.

The motive of an employer in discharging an employee may be a controlling factor in determining whether the discharge is an unfair labor practice. An employer's history of antiunion bias is an extremely important factor in ascertaining the motive for discharge of an employee. An employer may discharge an employee on various grounds without being guilty of an unfair labor practice. Such grounds include misconduct, unlawful activity, disloyalty, and termination of the business operation. In addition, inefficiency, disobedience, or insubordination is proper grounds for dismissal, provided the discharge is not motivated by the employer's reaction to union activity. Firing an employee based on union activity or membership is an unfair labor practice. Furthermore, the filing of unfair labor practice charges or the giving of testimony in a case based on such charges does not warrant dismissal.

In general, an unfair labor practice exists when an employer contributes financial or any other support to a labor organization. An employer must, therefore, remain neutral between competing unions. It is also an unfair labor practice for an employer to dominate or interfere with the formation or administration of any labor organization.

A union commits an unfair labor practice when it causes, or attempts to cause, an employer to hire, discharge, or discriminate against an employee for the purpose of encouraging or discouraging union activity. The same is true when a union restrains or coerces employees in the exercise of their rights to self-organize; to form, join, or assist labor unions; to bargain collectively; or to refrain from any of these activities. The refusal of a labor organization to bargain collectively or to execute a formal document embodying agreement with an employer is another unfair labor practice.

Additional topics

Law Library - American Law and Legal InformationFree Legal Encyclopedia: Labor Department - Employment And Training Administration to Legislative PowerLabor Law - Historical Background, Modern Labor Law, Unfair Labor Practices, Reinventing The Workplace: Improving Quality, Or Creating Company (sham) Unions?