WSJ Columnist Jenkins Gets Works-Council Law Wrong

In yesterday’s Wall Street Journal, Holman Jenkins weighs in on the VW-UAW discussions about a German-style works council at VW’s plant in Chattanooga, TN.  Although the automaker and the union have concluded that such a council would be legal in the U.S. only in an already-unionized workplace, Jenkins asserts that this conclusion is simply a “handy interpretation” and one that is “extremely questionable.”  Why?  Because, writes Jenkins, “[f]reedom of contract exists in America.”  And, as to federal labor law’s ban on employer interference with labor organizations, Jenkins says only that “the law can’t stop employees of a company from consulting with employees of a company about company matters.”

This is, to put it politely, a thin legal analysis.  It is true that, in general, we have freedom of contract in America.  But, whatever you think about its merits, the National Labor Relations Act makes a range of of workplace contracts illegal.  Perhaps the most obvious example is that in a unionized workplace an employer is prohibited from bargaining individual employment contracts with employees covered by a collective bargaining agreement.  More particularly relevant here, section 8(a)(2) of the Act makes it illegal for employers to establish, in non-union workplaces, a wide range of labor-management committees.  Over the last few decades, the NLRB has read 8(a)(2) as banning committees that: are established by management, involve employee participation, and deal with management on issues concerning wages, hours, or working conditions.  The leading case on the subject is Electromation.

A works council that followed the German model would meet this definition easily and would be prohibited if established by management in a nonunion workplace.  If, as Jenkins suggests, VW just “set up” such a council, there’s really no doubt that the employer would violate federal labor law.

Whether or not the law ought to prohibit works councils in non-union settings is a different question, and probably one worth debating at another time.  But that the law currently does prohibit management from establishing works councils in non-union settings is clear.