Can a Members-Only Union Validate a Works Council?

Published July 11th, 2014 -  - 07.11.142

As we noted yesterday, the UAW has decided to form a members-only union at the Volkswagen plant in Chattanooga, TN.  Part of the motivation for this move is the union’s desire to contribute to the formation of a works council at the plant.  According to Steve Greenhouse’s reporting, UAW officials say that the members-only union would “facilitate Volkswagen’s efforts to form a German-style works council made up of workers and management.”

In the debate about the VW works council, there have been – until now – two primary positions.  One is that, under section 8(a)(2) of the NLRA, a works council would be a dominated labor organization and thus illegal unless it was created with the cooperation of a labor union.  On this theory, the kind of labor union necessary to insulate a works council from 8(a)(2) problems is a union that is supported by a majority of the workforce and that represents all the workers in the relevant bargaining unit.  The other position was that a union is not necessary to the creation of a works council, and that management could implement one unilaterally.

The UAW move thus constitutes a third position on the works council/8(a)(2) issue.  On the UAW’s theory, a “union” is necessary for a works council, but that union can represent a minority of the workforce and can be a members-only organization.  (Cesar F. Rosado Marzan made a similar argument in a February blog post.)

Legally, this is terra incognita, but it’s an interesting theory.  Here are some preliminary thoughts and one way of thinking about the question:

Everyone, on all sides of the works council debate, agrees that a works council can be formed by an employer and a traditional union.  That’s because the presence of a traditional union alleviates the concern that the works council will constitute the kind of dominated labor organization – a “company union” in common parlance – that 8(a)(2) prohibits.  But why does a traditional union alleviate this concern?  There are (at least) two possibilities.  One is that, because a traditional union is supported by a majority of the workforce, the union has the democratic or representational legitimacy to endorse the works council on behalf of the workers.  Call this the democracy argument.  Another possibility is we trust that if a works council is endorsed by an independent union – a union that exists independently of the employer seeking to set up the council – then the works council isn’t likely to be a dominated labor organization.  Call this the independence argument.

The problem with the democracy argument is that if a works council could be legitimated by the support of a majority of the workforce, then we might simply allow workers to vote on the establishment of works councils.  If a majority of workers wanted one, then we’d say the works council doesn’t violate 8(a)(2).  But we don’t do this.  In fact, it’s been clear since Newport News, that employee votes on works councils (and other types of management-initiated workplace organizations) are legally irrelevant.

If its not majority worker support that validates a works council, then it might well be the independence of a labor union – again, the union’s independence from management ­– that enables a union to validate the council.  But if its union independence that matters, then a members-only union should be able to endorse a works council just as a traditional, exclusive bargaining representative can.  What we’d care about, in other words, is whether the union is truly independent of management not the number of workers who support the union when the council is established.  And, in the VW Chattanooga case, there is no question on these grounds: the UAW is an independent union.

That’s a way of understanding why the UAW might be right.  The theory does present some difficulties.  For example, it’s easy to say that the UAW is an independent union because of its rich and deep history.  But it would be harder with respect to smaller and less-well known unions or worker organizations.  The Board, that is, would need a test for union independence.  There might also be issues of collusion down the line.  Imagine that a genuinely independent union sanctions a works council in exchange for management support for future organizing efforts.  This kind of exchange would raise some 8(a)(2) questions of its own, although presumably the Board could police these issues with its traditional rules regarding employer assistance.  And, finally, perhaps there are reasons for wanting both independence and democratic support, or democratic support as expressed through the vehicle of an independent union, before we allow a works council.

If the UAW plan proceeds, and a works council is established through a members-only union, we (and the Board) will have to work through these questions.  But whether or not the members-only UAW local in Chattanooga can or does facilitate the establishment of a works council, the development is very important.  One obvious thing to watch is whether the members-only union contributes to the growth of employee support for the UAW and whether, sooner or later, the members-only union becomes a majority, exclusive representative.

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