Electromation v. NLRB - 35 F.3d 1148 (7th Cir. 1994)

Rule:

Words and actions that might dominate the employees in their choice of a bargaining agent do not constitute domination proscribed by the National Labor Relations Act, 29 U.S.C.S. § 158(a)(2), unless the employees are actually dominated. The employer-employee relationship itself offers many possibilities for domination, which is one of the reasons for the original enactment of the Wagner Act, 29 U.S.C.S. § 151 et. seq., but actual domination must be shown before a violation is established. The National Labor Relations Board (NLRB) is quite correct in pointing out employer assistance may be, and often has been, a means of domination. Assistance or cooperation does not always mean domination, however, and the NLRB must prove that employer assistance is actually creating company control over the labor organization before it has established a violation of 29 U.S.C.S. § 158(a)(2). The test of whether an employee organization is employer controlled is not an objective one but rather subjective from the standpoint of the employees. 

Facts:

Electromation, Inc. sought to set aside an order from respondent National Labor Relations Board (“NLRB”), which found that Electromation had committed unfair labor practices in violation of the National Labor Relations Act, 29 U.S.C.S. §§ 158(a)(1) and 158(a)(2). NLRB cross-petitioned to enforce its order. Numerous amici filed supporting and opposing briefs on whether a modern "company union" was unlawful. In response to employee disaffection, Electromation had established action committees to reach bilateral solutions on the basis of employee-initiated proposals. Electromation permitted committee activities on paid time within a structure wholly designed by Electromation. A labor union, which intervened in support of NLRB, then demanded recognition from Electromation.

Issue:

Did Electromation commit unfair labor practices by setting up illegal company unions?

Answer:

Yes.

Conclusion:

The reviewing court ordered that NLRB’s order be enforced, but declined to address whether "company unions" were legal. The reviewing court held that an employer-dominated labor organization, such as Electromation’s, that was "camouflaged" to persuade employees that it represented their best interests was illegal. The reviewing court held that domination existed where the employer controlled the organization completely.