The Representation/Participation Gap:
Worker-Management Cooperation in the
Non-Union Workplace

© 1999 John E. Perkins, III
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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 national level?

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 and workers.

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 positively.

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

Voluntary Sign-up

Coordination of all Action Committees by the Employee Benefits Manager

Goals and Responsibilities of each Action Committee entirely drafted by 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.

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 campaign.

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?

The Decision

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 question:
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 relationships;

2. such changes has increased "employee involvement" in workplace decisionmaking;

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
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 the 1930's?

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 the country.20

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?

A. Yes.

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" organizations.21

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.

"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 1393-1394.

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 Psychology, 78(6):950.

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, Section 2. Findings and Purposes.

20 Freeman, Richard, and Rogers, Joel. (1994). Worker Representation and Participation Survey-Final Findings. Available 10/17/96 at

21 Grob, H. (1995). Worker Representation and Participation Survey Summary. Available 10/17/96 at

22 Ibid., p. 3.

23 Freeman, Richard and Rogers, Joel. (1994). First Report of the Findings. Available on 10/17/96 at

24 Ibid.

25 Freeman and Rogers. (1994). Final Findings, p. 4-5.