The Representation/Participation Gap:
© 1999 John E. Perkins, III
Worker-Management Cooperation in the
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Today, the buying public's preferences for quality products and timely and
courteous service delivery has made an impact on the people who own and
manage the workplaces of this country. The effort to increase quality, reduce
waste, and streamline operations has sparked a wave of workplace experimentation
with procedures and methods for utilizing the intelligence of the people
in the organization most knowledgeable about how the work is done: the workers
who do it. Under slogans and banners proclaiming the importance of quality
and cooperation, many in management now profess to want to work cooperatively
with employees in order to achieve organizational success in the marketplace.
This paper will look only at the issues raised by the Wagner Act in non-unionized
workplaces. It has three parts. This first has three sections: a brief review
of the theory behind the original Wagner Act and what it wanted to promote;
a look at the Electromation case, the most significant recent case in labor
law and the detonator of the explosion in legal, legislative, and executive
branch interest in "clarifying" (amending) the Wagner Act; and
the final part looks at workers' preferences as revealed in the Worker Representation
and Participation Survey.
The middle part of the paper will be a review, in table form, of twelve
significant laws and decisions. The last part will be a review of recommendations
for addressing issues raised by the Electromation case.
The workplace dominates the lives of most adult Americans. Most workers
spend more time at work than with their families and friends. To be without
work is to be without legitimate sources of money and thus becomes a significant
crisis for any self-supporting adult.
Yet, how many workers today know that the typical workweek-eight hours a
day, five days a week-has been squeezed out of the owners and managers of
capital through long and bloody struggles by workers? How many are aware
that the nice benefits packages they are offered-paid vacation, sick leave,
medical benefits and such-often mimic benefits unions win in collective
bargaining agreements? How many are aware that the issues of representation
and participation have become the focus of a raging policy debate at the
At the same time, and often within the same companies, companies are being
"downsized," which means lay-offs, and, sometimes, entire plants
employing thousands of workers being closed. Lone workers who do speak out
and try to exercise their rights to unionize are sometimes intimidated,
fired and even blacklisted, which hampers their ability to find other employment.1
Workers may be reluctant to fully participate with management if it might
lead to a loss of employment for themselves or co-workers. How can workers
be sure they are being fairly treated and not misled? How can management
secure greater participation from their workers?
These issues have been crystallized in what the Worker Representation and
Participation Survey calls the Participation/Representation Gap. In a survey
involving 2400 people, including people in management positions, this survey
sought to answer the question of what workers wanted, and which modes of
workplace governance they felt comfortable supporting. I will take a look
at the conclusions of this survey later in this section.
This section will take a brief look at a thread of labor history spindled
around the 1935 National Labor Relations Act (Wagner Act). I acknowledge
that this arbitrary starting point sweeps past the bloody, heroic struggles
of working people to win basic concessions from their employers. It also
may present government in a more positive light than a longer history would
reveal. Governments at all levels actively supported industrialists and
suppressed workers' struggles for the right to unionize and for better working
conditions. Still, 1935 provides a good starting place because it is when
The National Labor Relations Act (Wagner Act or the Act) became law.
In attempting to unwind this thread of labor history, I acknowledge up front
that I may be oversimplifying so that key issues stand out. Labor law involves
enacted laws of Congress, rulings by administrative agencies such as the
National Labor Relations Board (Board), and circuit and Supreme Court decisions.
Non-statutory opinions expressed by legal scholars and recommendations of
blue-ribbon commissions also play a part. In addition, the experiences,
attitudes and opinions of workers and management in the workplace has an
effect on labor law.
Robert Wagner and His Act
Senator Robert Wagner from New York, the labor policy advisor to President
Franklin Roosevelt, seized an opportunity created by the relative weakness
of business during the Great Depression to craft legislation which offered
a way for labor and management to grope its way towards a cooperative workplace.
Many people wanted to end the angry and violent confrontations between labor
and management which had characterized industrial relations from the late
nineteenth century up to the early 1930's. Business, however, did not like
Wagner's ideas and launched the largest lobbying effort in history, up to
that time. Organized labor, best represented by the American Federation
of Labor (AFL), actually opposed the legislation initially, and, in any
case, had little influence.2 That Wagner succeeded is a testimonial to his
tenacity and the public's weariness with the violence associated with workers'
rights and union organizing efforts.
Mark Barenberg at Columbia Law School has provided a valuable public service
by reconstructing the vision Wagner and his allies had of community, political
economy, and workplace governance practices. I will not try to reproduce
the subtleties and nuances of an article which runs to 117 pages. I will,
though, discuss the two sections of the Wagner Act pertinent to modern employee
involvement plans and their symbolic and consciousness shaping origins as
explicated by Barenberg.
The Electromation case, the most important case which has dealt with workplace
governance issues in recent years, turned on how the National Labor Relations
Board (Board) interpreted two sections of the Wagner Act: Section 2(5) which
defined what the Act meant by "labor organization," and Section
8(a)(2) which prohibits companies from dominating a labor organization.
The exact texts read:
Section 2(5): The term "labor organization" means
any organization of any kind, or any agency or employee representation committee
or plan, in which employees participate and which exists for the purpose,
in whole or part, of dealing with employers concerning grievances, labor
disputes, wages, rates of pay, hours of employment, or conditions of work.
Section 8(a)(2): It shall be an unfair labor practice for an employer to
dominate or interfere with the formation or administration of any labor
organization or contribute financial or other support to it: Provided, that
subject to rules and regulations made and published by the Board pursuant
to section 6, an employer shall not be prohibited from permitting employees
to confer with him during working hours without loss of time or pay.3
Ultimately, these two sections reflect Wagner's view that workers needed
to give their genuine consent to workplace authority, and this could only
be secured through their ability to express their collective will, rather
than through individual contracts between a lone employee and the company.
Wagner understood that success for the firm depended on workers offering
their intrinsic (uncoerced) group cooperation in exchange for managerial
commitment to norms of group fairness in decisions affecting job security
and distributive share.4
These sections maximize the symbolic pressures contained in this Act on
workers to recognize the need for, and to create for themselves, a collective
"voice." When a worker sees the need for workplace dissent leading
to reforms, a classic choice confronts her, conceptualized as Exit and Voice.
"Exit refers to leaving an unsatisfactory setting, and voice refers
to attempts to improve the situation."5 Voice means "participation
in the democratic process, through voting, discussion, bargaining, and the
like."6 Workers also have two less active choices: to quietly endure
the suffering or to so narrowly limit their expectations about work that
they perceive "larger" governance issues as none of their concern.
Section 8(a)(2)'s prohibition against the company dominated union, also
called the "company union" or sham union, can be viewed as Wagner's
attempt to block companies from creating seemingly representative labor
organizations which, in fact, do nothing of the sort. Wagner saw that the
scale of modern mass production required group, rather than individual,
consent and cooperation.7 A company union, by being so close to genuine
representation, might damage the pre-conditions for free group deliberation
and choice more than a non-union workplace.8
There are two reasons that collective rather than individual bargaining
are important in the workplace. First, within a given workplace, many aspects
of the job transcend the individual worker. Hardworking workers seeking
to make a change will face a daunting task, and if they succeed their co-workers
get to benefit without doing any of the work of achieving the change. Second,
workers will hesitate to reveal their true feelings to their employer for
fear of being fired or hurting their careers. The risk of losing a job makes
the expression of voice too risky for the individual worker.9
According to Barenberg, Wagner felt that independent unions could "conjoin
with the company-union like structures of shop committees and similar consultative
labor-management bodies" to create the ideal workplace governance situation.10
If necessary, Wagner would place a higher priority on fairness in the distributional
contests between labor and management (owners) than efficiency maximization.
Once cleansed of power disparities, norms of fairness, shared interests,
and mutual trust would be nurtured by the new institutional structures.11
The Electromation Case 12
This case, because it faithfully followed the Wagner Act, especially Section
8(a)(2)'s prohibitions against company unions, has ignited an explosion
of legal opinion, legislative bills and executive branch activity. Indeed,
Barenberg explicitly credits this case with motivating his review of the
purposes and intentions behind the Wagner Act, because even Board members
failed to understand how the Wagner Act supported cooperation between management
Because this case touched upon many of the assumptions and expectations
involved in modern workplace practices, the Board recognized its importance
and permitted oral arguments. The Board framed the pertinent issues as:
(1) At what point does an employee committee lose its protection
as a communication device and become a labor organization?
(2) What conduct of an employer constitutes domination or interference with
the employee committee?13
The Board found that "Action Committees" as established by Electromation
were not simply communication devices but constituted labor organizations
within Section 2(5) of the Act, and Electromation's actions towards these
Action Committees constituted domination and interference, thus violating
Section 8(a)(2) and (1) of the Act.
The Facts of the Case.
Electromation makes electrical components and related products. It employed
about 200 people who were not represented by any labor organization at the
time of the events of this case. Late in 1988, Electromation was losing
money, and decided to cut expenses by altering an existing employee attendance
bonus policy and replacing a wage increase in 1989 with a lump-sum payment
based on length of service. In January of 1989 (all following dates are
in 1989), 68 employees signed a petition expressing displeasure with the
changes and presented it to Electromation. John Howard, the president of
Electromation, met with the supervisors and then, on January 11, he met
directly with a selected group of eight employees and discussed with them
a number of issues including wages, bonuses, incentive pay, attendance program,
and leave policy.
After another meeting with the supervisors, Howard concluded that Electromation
had a serious problem with employees. Howard testified that they decided
that unilateral action would fail to make everyone happy and the best course
of action would be to involve employees. Howard met with the same group
of eight on January 18 and explained management's plan for dealing with
the problems. He said management had distilled the list into five categories
and proposed the creation of Action Committees to meet and try to resolve
the problems. He told them that if the Action Committee made proposals which
could fit into Electromation's budget, and the employees generally accepted
them, they might be tried. Howard told the Board that the employees at this
meeting (the select group of eight) did not receive the idea of Action Committees
At this meeting this select group of employees and Howard agreed to allow
workers to sign-up to be on Action Committees. On January 19, the company
posted a memorandum to all employees explaining the Action Committee idea.
Features of Action Committees included:
Six employees and two members of management
In addition, employees were paid for their time, and the company provided
necessary supplies. After several people tried to sit on more than one committee,
Electromation told them that an employee could only be on one Action Committee.
Employees on the Action Committees were expected to discuss with their fellow
workers the proposals the Action Committees generated. The Employee Benefits
Manager facilitated the discussions.
Coordination of all Action Committees by the Employee Benefits Manager
Goals and Responsibilities of each Action Committee entirely drafted by
On February 13, the Teamsters made a formal demand for recognition, which
management had not known about until then. A week later, on February 21,
management withdrew from the Action Committees but told the employees they
could continue to meet if they wanted to. Two committees continued to meet,
one disbanded, and one wrote up a proposal and did not meet again. This
committee had submitted a previous proposal which the controller, a member
of this particular Action Committee, had overruled because of its costs.
The proposal was not presented to President Howard because of the union
On March 15, Howard told employees that the company could not continue to
participate in the Action Committees until after the election. On March
31, the union lost the election by a vote of 95 to 82. A switch of seven
votes would have changed the outcome. The administrative law judge who first
heard this case noted that the company had said, in effect, that it would
continue the committees after the union vote.14 Would those seven people
have changed their vote had they known that Action Committees could not
legally be continued?
As noted, the Board ruled that Electromation had indeed created "labor
organizations" and then dominated them. Given the facts of the case,
the Board could draw no other conclusion. Though Electromation's management
had concluded unilateral action would not resolve the problem, it then proceeded
to set up committees exactly how it wanted them. The structure, size, number
and facilitation of these committees firmly remained in the control of management.
The employees who chose to participate did so voluntarily, which means there
had not been a democratic means for workers to select who represented them.
As Board Member Devaney said in his concurring opinion:
The Respondent (Electromation) itself chose the Action Committee members
and charged them with representing their fellows, overriding employee preferences
as to how the representatives would be chosen. By these acts, the Respondent
substituted its will for that of a majority of employees and usurped their
right to choose their own representativeIn essence, the Respondent recognized
for purposes of collective bargaining a labor organization that did not
represent a majority of its employeescurrent binding precedent under Section
8(a)(2) requires an approach sensitive to the damage to employee Section
7 rights [rights to self organization] that sham bargaining agents inflict
and to the realization, present both in Congressional deliberations and
in Board law itself, that genuine employee involvement is in no way inimical
to the free exercise of the right of employees to choose a bargaining representative,
if one is desired.15
From the facts reported in the case, I agree with the Board. Electromation
had, in effect, created and then dominated labor organizations. What is
surprising is that a case which clearly falls within the area of sham or
company unions that Wagner sought to outlaw would raise such a chorus for
changing the law. Even Board Member Raudabaugh, in his concurring opinion,
argues that Wagner built an adversarial relationship into the Act: "The
adversarial model, upon which the Wagner Act was based, is at odds with
a cooperative model of labor relations. In the adversarial model, there
is an inherent conflict between management and labor which may lead to industrial
strife and unrest."16 Member Raudabaugh misunderstood what Wagner intended,
according to Barenberg. Barenberg, from his research into Wagner's intent
in writing the Act, suggests that the Act attempts to answer this fundamental
What legal regime can best encourage collaborative, high-trust
workplaces, and simultaneously empower and safeguard workers against "domination,"
understood as illegitimate instrumental coercion and endogenous shaping
workers' preferences and interests?17
Words like "adversarial" and "cooperative" describe
the climate mutually created and shared by management and workers. But management,
which represents the owners of capital, has more than half of the responsibility
for the climate through its rights to hire and fire. By permitting workers
to have legal protections for creating or voting to join an independent
organization which would speak for them, as a group, in negotiations with
management, Wagner sought to create parties more closely matched. Otherwise,
as noted before, a lone worker would be overwhelmed. So if a climate is
adversarial, a major share of the responsibility for changing that must
be management's.18 Management's stiff opposition to the rights of workers
to have a voice had not been Wagner's making-it existed long before his
legislation-and unfortunately, it has continued since.
In an uncoercive workplace, what type of workplace governance do workers
support? Has the Wagner Act succeeded in helping workers understand their
need for an independent, collective voice when dealing with management?
In the next section we will see how workers have answered these questions.
Worker Representation and Participation Survey
The Teamwork for Employees and Managers Act of 1995 (the TEAM Act) had seven
"findings" which I will summarize:
1. Global competition has "compelled" changes in workplace
Can management be trusted to organize "collaborative" employee
involvement programs which genuinely represent the interests of workers,
as workers themselves perceive their interests? Is the workplace more hospitable
today to workers freely speaking their minds, and actively seeking representation
they can trust to deal with workplace issues? Have conditions changed since
2. such changes has increased "employee involvement" in workplace
3. Employment Involvement programs exists in unionize and non-unionized
workplaces, have been adopted by 80 percent of the largest employers, and
exist in over 30,000 workplaces;
4. Employment Involvement programs positively impact employees by better
enabling them to reach their potential in the workplace;
5. Congress has encouraged Employee Involvement through such incentives
as the Malcolm Baldrige National Quality Award;
6. employers using "legitimate Employee Involvement programs have not
done so to interfere with collective bargaining rights guaranteed by labor
laws, as was the case in the 1930's when employers established deceptive
sham 'company unions' to avoid unionization;" and
7. "Employee Involvement is currently threatened by legal interpretation
of the prohibition against employer-dominated 'company unions.'"19
The Worker Representation and Participation Survey (Survey) set out to answer
these types of questions. It provides the best current data on workers'
attitudes about workplace governance issues. Richard Freeman and Joel Rogers
led the project and private foundations sponsored it. Though Freeman served
as a member of President Clinton's Commission for the Future of Worker-Management
Relations (the Dunlop Commission), formed in response to the Electromation
decision, the Survey and Commission have no formal or direct links.
In total, the Survey interviewed 2,408 adults, 18 years old or older, who
worked in private companies or non-profit organizations with 25 or more
employees. The Survey reached all levels from "low-level" service
workers to "knowledge" workers and middle management. An additional
omnibus survey reached 1100 workers and a follow-up survey reached 1000
of the original 2,408 workers. The project also conducted focus groups around
In summary, workers answered three big questions posed by the Survey:
Q. Do employees want greater participation and representation
at their work place than is currently provided?
Q. What do employees see as essential to attaining their desired level of
participation and representation?
A. Management acceptance and cooperation.
Q. What solutions do employees favor to resolve any gap between their desired
participation and representation and what they currently have?
A. Difficult to answer. Most want cooperative joint committees with some
independent standing inside their companies, and many want unions or "union-like"
The Survey identified "four major gaps between what is and what should
be for American workers:
Workers believe overwhelmingly (82%), that employee participation programs
would be better run if workers had more say in running them. Workers do
not want management to select employee representatives, with non-union workers
overwhelmingly choosing against management selection (by a margin of 86%
to 9%); of the 86% of workers wanting to select their own representatives,
a 50 percent plurality preferred employee election.
- A trust gap exists in the extent to which employees feel their loyalty
to the company is reciprocated by their employers.
- A participation gap exists between workers' actual ability to influence
decisions that directly affect them, and the amount of influence they desire.
- A representation gap exists between the number of workers who are dissatisfied
with their access to group representation to help resolve workplace problems
and the number who feel they have sufficient access.
- A legal gap exists between the amount of legal protection workers would
like to have to protect their rights, and the protection they believe they
"Non-union workers without committees want them as an additional means
for employee voice," the Survey notes, with 69-76 percent of such workers
(depending on question wording) feeling these committees would be a more
effective means of solving problems than their current system. Over half
of workers interviewed have no group representation at all, and of these,
over two-thirds believe an employee committee would improve the system for
resolving workers' concerns.23
Fear of offending management plays a role in suppressing workers support
for unions. "Employees see management acceptance and cooperation as
the key to the success of the employee organizations and workplace practices
needed to close the representation/participation gap," Freeman and
Rogers report. Workers would prefer a weak organization in a cooperative
environment over a strong one in an adversarial one by a margin of 3-1 (63%
vs. 22%).24 About equal numbers of workers say they are pro-union as anti-union
(42% - 44%). There is a "sizable" 25 point gap between those workers
in unions and those who would like to be (14% vs. 39%). If management opposition
were not a factor, unions might be competitive in all major sectors except
the Financial industry.25
This Survey directly followed in the wake of the Electromation case, along
with bills in Congress, Presidential Commissions and long articles in legal
journals. The following table summarizes the
pertinent legal and legislative events preceding and following the Electromation
decision. In the last section of this paper I look at the recommendations
which have emerged.
1 Commission on the Future of Worker-Management Relations. (May 1994). Fact
Finding Report. Washington, DC: U. S. Department of Labor.
2 Barenberg, Mark. (May 1993). The Political Economy of the Wagner Act:
Power, Symbol, and Workplace Cooperation. 106 Harvard Law Review, 1396 and
3 National Labor Relations Board. (December 1992). Electromation, Inc. and
International Brotherhood of Teamsters, 309 NLRB 992.
4 Barenberg, Wagner Act, p. 1466.
5 Parker, Louise E. (1993). When to Fix it and When to Leave: Relationships
Among Perceived Control, Self-Efficacy, Dissent, and Exit. Journal of Applied
6 Freeman, Richard, and Medoff, James L. (1984). What do Unions Do? New
York, Basic Books, p. 8.
7 Ibid., p. 1454.
8 Ibid., p. 1455.
9 Ibid., p. 9.
10 Barenberg, Wagner Act, p. 1430.
11 Ibid., p. 1392.
12 Details of events drawn from Electromation, 309 NLRB 990-992.
13 Ibid., p. 990.
14 Ibid., p. 1019.
15 Ibid., p. 1003.
16 Ibid., p. 1011.
17 Barenberg, Wagner Act, p. 1496.
18 This is expressed by workers themselves as will be noted in the next
section. Also see Scott, William and Hart, David K. (1990), Organizational
Values in America, New Brunswick, NJ: Transaction Publishers, p. 153, where
they make a case that the masses, though powerful, lack the "organization
expertise to make and maintain the necessary reforms."
19 Teamwork for Employees and Managers Act of 1995 (TEAM Act, H.R. 743 and
S. 295), Available 10/8/96 at http://thomas.loc.gov/cgi-bin/query/6?c104:./temp/~c104IGEj::,
Section 2. Findings and Purposes.
20 Freeman, Richard, and Rogers, Joel. (1994). Worker Representation and
Participation Survey-Final Findings. Available 10/17/96 at http://bovine.ssc.wisc.edu-:8080/cows/wrps.html.
21 Grob, H. (1995). Worker Representation and Participation Survey Summary.
Available 10/17/96 at http://violet.berkeley.edu-/~iir/ncw/pubs/rpts/wrps.html.
22 Ibid., p. 3.
23 Freeman, Richard and Rogers, Joel. (1994). First Report of the Findings.
Available on 10/17/96 at http://violet.berkeley.edu/~iir/clre/other/rogers.html.
25 Freeman and Rogers. (1994). Final Findings, p. 4-5.