Dunlop Preliminary Report
Copyright 1994 The Bureau of National Affairs, Inc.,

                                  JUNE  3, 1994

                                1994 DLR 105 d34

LENGTH: 72210 words






MAY 1994

Letters       Submitting the Report to:
              Secrtary of Labor Robert B. Reich                      
              Secretary of Commerce Ronald H. Brown                  
Chapter I: The Changing Environment for Worker-Management Relations
        1.  Introduction                                        
        2.  The Changing Economy                                
        3.  The Changing Workforce                              
        4.  Changing Labor Market Outcomes                      
        5.  Labor Relations Outcomes                            
        6.  Summary                                             
Chapter II. Employee Participation and Labor-Management Cooperation in
            American Workplaces
        1. Introduction                                    
        2.  Views Toward Workplace Participation and Cooperation          
        3. Extent of Employee Participation and Committees           
        4. Key Features of Workplace Participation Processes              
        5. The Effects of Employee Participation on Economic Outcomes     
        6. Will Contemporary Efforts at Employee Participation and Cooperation be
           Sustained and Diffuse Across the Economy?                 
        7. Legal Issues Regarding Workplace Employee Participation        
        8.  Summary and Questions for Further Discussion             
Chapter III: Worker Representation and Collective Bargaining Introduction
          Part A.  Under the National Labor Relations Act
        1. NLRB Certification Elections                              
        2. Unfair Labor Practice Sanctions                           
        3. The Trend in First Contracts                              
        4. Cost of The NLRB Election Process                         
        5. The Human Face of the Confrontational Relation Process         
        6. Debate on Labor and Union Organizing Campaigns            
        7. Summary                                         
Part B. Experience with "Contingent" Workers and Other Sectors
      1."Contingent" Worker-Management Relations                
      2. Construction Sector                                    
      3. The Railway Labor Act                                  
Chapter IV: Employment Regulation, Litigation and Dispute Resolution
      1. Introduction                                           
      2. Evolution and Present State of Employment Regulation             
      3. Nature of Employment Regulation                             
      4. Trends in Employment Litigation                             
      5. Private Dispute Resolution Alternatives                          
      6. Integrated Employment Regulation                            
      7. General Observations                                   
      8. Summary and Questions for Further Discussion                
Chapter V: General Observations                                 


   Appendix A - Historical Perspectives on the Work of the Commission

   Appendix B - National Meetings and Regional Hearings of the Commission
Commission on the Future of Worker-Management Relations Appointed By: Secretary
of Labor Robert B. Reich Secretary of Commerce Ronald H. Brown Paul A. Allalre
Chairman and CEO Xerox Corporation John T. Dunlop, Chairman Former Secretary of
Labor (1975-1976) Lamont University Professor Emeritus Harvard University
Douglas A. Fraser Former Pesident, United Auto Workers Professor of Labor
Studies Wayne State University Richard B. Freeman Herbert Ascherman Professor of
Economics Harvard University Program Director for Labor Studies Nationai Bureau
of Economic Research. William B. Gould, IV* Pofessor of Law Stanford University
F. Ray Marshall Former Secretary of Labor (1976-1981) Audr and Bernard Rapoport
Centennial Chair in Economics and Public Affairs L.B.J. School of Public Affairs
University of Texas at Austin

   Thomas A. Kochan George M. Bunker Professor of Management and a  Leaders for
Manufacturing Professor Massachusetts Institute of Technology Juanita M. Kreps
Former Secretary of Commerce (1977- 1979) James B. Duke Professor of Economics
and Vice President Emeritus Duke University Kathryn C. Turner Chairperson and
CEO Standard Technology, Inc. William J. Usery Former Secretary of Labor

   President Bill Usery Associates, Inc. Paula B. Voos Professor of Economics
and Industrial Relations University of Wisconsin Paul C. Weiler Henry J.
Friendly Professor of Law Harvard University (Counsel to the Commission) June
Robinson Designated Federal Official for the Commission U.S. Department of Labor
Ceased to be active upon his nomination w be a member and Chairman of the
National Labor Relations Board and resigned on March 12, 1993.
*Appointed to the Commission on November 1, 1993.

May 1994
The Honorable Robert B. Reich
Secretary of Labor
Washington, D.C. 20210
Dear Secretary Reich:
        The Commission on the Future of Worker-Management Relations that you appointed on
behalf of the President presents its Fact Finding Report. This report is designed to facilitate
the policy discourse to follow and to encourage come degree of consensus on the issues raised
by your Mission Statement that defined our task.

   Sincerely, John T. Dunlop, Chair
Commission on the Future of Worker-Management Relations

May 1994

The Honorable Ronald H. Brown
Secretary of Commerce
Washington, D.C. 20230
Dear Secretary Brown:
The Commission on the Future of Worker-Management Relations that you appointed on behalf
of the resident presents its Fact Finding Report. This report is designed to facilitate the policy
discourse to follow and to encourage some degree of consensus on the issues raised by your
Mission Statement that defined our task.
John T. Dunlop, Chair
Commission on the Future of Worker-Management Relations


   The Commission on the Future of Worker-Management Relations was announced by
Secretary of Labor Robert B. Reich and Secretary of Commerce Ronald H. Brown on
March 24, 1993. nAA

   The Mission Statement of the Commission states as follows:"The future living
standards of our nation's people, as well as the competitiveness of the United
States, depend largely on the one national resource uniquely rooted within our
borders: our people -- their education and skills, and their capabilities to
work together productively."

   The President's economic plan lays a new foundation for the education and
training of the nation's work force. But even: a work force that is well
prepared for the jobs of the future will fail to adequately improve the nation's
productivity and living standards unless workers and managers work together more
effectively. Both parties must take on new responsibilities.

   To this end, the President has asked the Secretary of Labor and the Secretary
of Commerce to form a Commission on the Future of Worker-Management Relations.
The Commission will investigate the current state of worker-management relations
in the United States and report back to the Secretaries in response to the
following questions:

   "1. What (if any) new methods or institutions should be encouraged, or
required, to enhance workplace productivity through labor-management cooperation
and employee participation?

   2. What (if any) changes should be made in the present legal framework and
practices of collective bargaining to enhance cooperative behavior, improve
productivity, and reduce conflict and delay?

   3. What (if anything) should be done to increase the extent to which
 workplace problems are directly resolved by the parties themselves, rather than
through recourse to state and federal courts and government regulatory bodies?"

   This Fact Finding Report is submitted jointly to the Secretaries of Labor and
Commerce. After release of this Report, the Commission plans a series of
hearings and conferences with representatives of business organizations, labor
organizations, other organizations that have presented testimony or statements,
and the interested public to receive comments, reactions and suggestions as to
the statement of facts and its implications for private and public policies and
for the recommendations of the Commission. Within a period of six months of the
presentation of this Report, the Commission plans to present a final report with
recommendations to the two Secretaries. (Department of Labor Press Release,
February 10, 1994).

   The Commission has held 11 national hearings m Washington, D.C., and working
parties of three to five Commission members have held regional hearings in six
communities - Louisville, East Lansing, Boston, Atlanta, San Jose and Houston.
(The agenda of each of these sessions is included in Appendix B with the
subjects under discussion and the invited participants.)

   In each of the regional hearings several hours or more were set aside to hear
individuals or representatives of organizations who requested an opportunity to
appear and to testify on any subject within the scope of the Commission's
Mission Statement. If time was inadequate to hear all who requested to testify,
in a few cases, written statements were received and distributed to all
Commission members, and these statements are a part of the public record of the
Commission. The Commission appreciates the assistance of various organizations
chat helped to organize and facilitated these regional hearings.

   A total of 134 persons testified before the Commission in its 11 hearings in
Washington, D.C., and 220 persons testified in the six regional hearings, for a
total of 354 witnesses.
   The transcripts of the 11 national Commission hearings run to 2,125 pages,
and the transcripts of the six regional hearings run to 1,733 pages, for a total
of 3,858 pages.

   The Commission has also received scores of exhibits, letters, papers,
articles and studies that have been made a part of its public record.

   The Commission examined a wide variety of quantitative and qualitative
evidence, some of which was presented to it in testimony or offered to it by
interested parties, and some of which is part of published data and the
scholarly literature. In some instances, the evidence is more or less
definitive, based upon statistically valid surveys whose results have been
replicated in many studies, or administrative records. In other cases, the
evidence is weaker, based on short reports by participants relating their own
experiences, or on limited surveys that can at best scratch the surface of
complex issues. On the general presumption that it is better to have some,
occasionally weak, evidence than no evidence, the Commission has sought to make
use of all of this information, albeit weighing the different forms of evidence.

   The Commission has encouraged four groups of studies by other organizations
that constitute new data relevant to one or more of the assignments of its
Mission Statement.

   (1) The Chairman and Ranking Minority Member of the House Committee on
Education and Labor and the Chairman and Ranking Minority Member of the
Subcommittee on Labor-Management Relations together on August 4, 1993 requested
the Comptroller General of the United States to make a study of the complex web
of workplace regulations including those administered by the Labor Department.
The study was to seek the variability in definitions in terms common to such
regulations and the perceptions as to these regulations held by employers, and
 unions in workplaces governed by collective bargaining agreements, in a diverse
group of workplaces. The study was also to seek views as to the regulatory and
administrative processes respecting these regulations. The Commission had
released on July 28, 1993 a listing of the major statutes and regulations
affecting the workplace administered by the Labor Department.

   (2) A number of employer associations - Aerospace Industries Association,
Electronic Industries Association, Labor Policy Association, National
Association of Manufacturers, and Organization Resources (Counselors - have
undertaken a survey among a number of businesses of the extent and
characteristics of employee involvement plans.

   (3) With the aid of private foundation funding, Professors Richard Freeman
and Joel Rogers secured the services of a professional survey firm to do a study
of the attitudes of representative workers and supervisors toward worker
representation and participation. The study was undertaken by Princeton Survey
Research Associates, Princeton, New Jersey.

   (4) With the aid of private foundation funding, Professor Ray Marshall
organized a conference in Washington, D.C. under the auspices of the Work and
Technology Institute on March 14-15, 1994 with labor, management, government and
academic experts on labor-management and employment issues from Western European
countries, Japan, Canada, and Australia. The Commission hearing on March 16,1994
included a summary of the conference and heard testimony from a number of the
overseas participants. A report of the March 14-15 conference has been prepared
for publication.

   This Report of the Commission contains no separate chapter on the experience
of worker-management relations in other countries. But the separate chapters
each incorporate references to this experience, by way of comparisons or
contrasts. The use of international comparisons is based on the belief that
while it is not possible to import any given practice or institution found in
 another country to the United States neither is it advisable to ignore practices
that work' well in other settings. Just as American business has recognized the
need to bench-mark practices on a global scale, the Commission believes it is
both possible and essential to be open w learning from experiences abroad.

   The Counsel to the Commission, Professor Paul Weiler, organized three groups
- of about eight in each - of lawyers which have met separately on several
occasions to discuss issues before the Commission - groups of business lawyers
including those within companies and in outside law firms, labor lawyers
including those within unions and in outside law firms, and law school
professors. Lawyers drawn from each of these groups have testified before the
Commission on legal issues affecting the Commission's assignments.

   A working party of' the Commission has met on several occasions with a
designated committee of the Small Business Council of the U.S. Chamber of
Commerce w receive views and perspectives. A working party of the Commission
heard reports from various local chapters of the Industrial Relations Research
Association at its national meeting on January 4, 1994.The Commission has
encouraged a number of studies which are still in process, and when they have
been completed they will be made available for comments.The Commission
gratefully acknowledges statistical data and information prepared for its use by
the Bureau of Labor Statistics, the Office of the Solicitor, the Women's Bureau,
the Department of Commerce, the General Counsel of the National Labor Relations
Board, the Federal Mediation and Conciliation Service, and the Small Business

   Mr. Roland Droitsch, Office of the Assistant Secretary for Policy,
coordinated this work in the Department of Labor and Mr. Everett Ehrlich, Office
of the Secretary, provided assistance in the Department of Commerce. Staff of
the Department of Labor's Office of Small Business and Minority Affairs greatly
 assisted the Commission in its hearings and related activities. The work of Ms.
Artrella Mack and Ms. Betty Cooper were invaluable in the technical preparation
of this Report. Ms. Joy Reynolds, Office of the American Workplace, prepared
summary of minutes for the Department. Secretaries to members of the Commission,
beyond their regular duties, greatly facilitated the work of the Commission. The
Commission is most grateful.

   The Commission has received some testimony, and many letters regarding
specific regulations, interpretations, rulings and decisions issued under
employment statutes and labor-management relations laws. These cases have been
helpful in under-standing wider issues and regulatory processes, and this Report
does mention some of these questions in the course of the discussion. But the
Commission was not designed to respond to or w resolve such specific cases.

   This Report raises a number of questions at various points in the discussion
for the purpose of eliciting more data and information and more reflection on
difficult issues. It should not be inferred, however, that the Commission
intends to provide responses to all these questions in a final report.

   A Historical Perspective on the work of the Commission is provided in
Appendix A.

   The Commission welcomes from all parties comments and suggestions regarding
this Fact Finding Report; Please address comments to: The Commission on the
Future of Worker-Management Relations, c/o Mrs. June M. Robinson, Designated
Federal Official, U.S. Department of Labor, Room C2318, 200 Constitution Avenue,
NW, Washington, DC 20210.


   nAA  The Federal Register of May 7 1993 carried notice of the establishment
of the Commission as well as notice of the first meeting on May 24, 1993. The
Commission is to serve solely as an advisory body in accordance with the Federal
 Advisory Committee Act.

Chapter I

The Changing Environment for Worker-Management Relations

1. Introduction

   The American economy, the work force and jobs, the technology at workplaces,
the competitive contexts of enterprises, and the regulations of employment have
changed greatly in recent decades. The environment for firms and workers differs
markedly from what it was when the basic structure of legislation governing
labor-management relations in the United States was established. n1

   The changing economic and social environment poses challenges to some aspects
of established worker-management relations and has created problems in
employment, earnings, and other job market outcomes for many Americans. This
chapter identifies those facts about the changing economic and social
environment that bear directly on the Mission Statement of the Commission and
highlight the challenges these facts pose for existing workplace practices,
worker-management relations, and labor regulations.

2. The Changing Economy

   Among the myriad of economic developments that have affected the United
States in the past several decades, the following have been significant for many
American workers and enterprises:

   1. A long-term decline in the rate of growth of productivity, measured in
Gross Domestic Product (GDP) per employee or per employee-hour.

   o From 1950 to 1973 GDP per employee in the U.S. grew by 2.6 percent per
year. From 1973 (roughly following the first oil shock) to 1992 GDP per employee
grew by 0.5 percent per year. Non-farm business output per hour increased at the
annual rate of 2.5 percent per year in the period 1948 to 1973, but only at the
rate of 0.6 Percent per year from 1973 to 1979 and at the rate of 1.0 percent
per year in the years 1979 to 1992.
   o Manufacturing has had a different productivity experience. The rate of
growth of productivity fell in the 1970s but recovered in the late 1980s and
1990s to its historic level of approximately 2.5 percent per year. While there
are problems m measuring productivity in the service sector, which raise some
doubts about the magnitude of the economy-wide productivity slowdown, no analyst
has seriously questioned that GDP per employee is growing at a pace below its
historic rate.

   o Productivity growth in most other advanced economies and in several
developing countries exceeded that in the U.S. in the last several decades. All
advanced countries experienced a reduction in the rate of productivity growth
starting with the first oil shock of 1973. Although the decline in the rate of
productivity growth was greater in many countries than in the U.S., these
countries still enjoyed higher productivity growth than the U.S.

   o Low productivity growth does not, however, mean low productivity. The U.S.
has on average the highest productivity per worker and per hour among major
economies, although Western Europe and Japan are not far behind. In some
sectors, their productivity exceeds ours.

   o The slowdown in productivity growth occurred despite sizeable American
research and development expenditures. Total R & D in the U.S. exceeds those
of our four closest industrial competitors -- Japan, West Germany, the United
Kingdom and France. But Japan and Germany outpace the U.S. in R & D as a
percentage of gross national product; this is especially the case for
non-defense research and development. In 1990 the U.S. spent 1.9 percent of GDP
on non-defense R & D compared to 3.0 percent in Japan and 2.7 percent in West

   Slow productivity growth makes it difficult for Americans to enjoy rising
standards of living and bounds the feasible increases in wages and belief that
 firms can pay and their international competitiveness at any given exchange rate
of the dollar.

   2. An increased globalization of economic life, reflected in trade and
capital flows, and immigration.

   o In 1960 the most commonly used measure of the magnitude of trade on the
economy, the ratio of exports and imports to GDP, was 0.094. In 1991, it was
over twice as large, 0.214. n2

   The ratio of exports and imports to GDP in other countries also rose over
this period, as world trade expanded greatly.

   o A growing proportion of manufacturing imports comes from relatively low
wage developing countries, such as China. n3

   Reductions in trade barriers, the success of export-oriented developing
countries on world markets, the huge trade surpluses run by Japan, and reduction
in America's productivity edge over Europe create a more competitive market for
American firms subject to international competition.

   o Throughout the 1980s and into the early 199Os, the U.S. ran a substantial
trade deficit in its national accounts. This deficit was financed by foreign
purchases of U.S. financial assets, such as bonds and stocks, of real assets,
such as property and businesses, and by direct foreign investments in the U.S.
The U.S. moved during the 1980s from being the world's greatest creditor nation
to the world's greatest debtor nation.

   o Trade balances in high technology goods between 1980 and 1988 showed that
the Japanese tripled their trade surplus, while the U.S. and the major European
countries reduced their positive balances. At the same time, the proportion of
patents issued by the U.S. Patent and Trademark Office of foreign origin have
increased over the past decade or so. n4

   In 1978 out of 66,097 patents, 24,847 or 37.6 percent, were of foreign
origin. In 1991 out of 96,047 patents, 45,152 or 47.0 percent,  were of foreign

   o As a result of the flow of capital to the U.S, an increasing proportion of
Americans have been employed by foreign-owned firms. In 1989 4.4 million
Americans worked for U.S. affiliates of foreign companies -- 3.8 percent of all
workers compared to 1.2 percent of all workers in 1974. At the same time, U.S.
owned companies employ many foreigners in their overseas operation. Major
multinational companies, regardless of national origin, consider locating
facilities throughout the world.

   In a global economy, firms face competitors whose workforces receive
different levels of pay and work under different rules than those in the U.S.,
requiring the nation to consider its labor relations from a broader perspective
than in a closed economy.

   3. The declining value of the dollar and greater reductions in unit labor
costs in the U.S. than overseas increased the competitiveness of U.S. firms in
the international marketplace in the late 1980s, in contrast to the difficulties
created by the high value of the dollar in the earlier part of the decade.

   o Global integration has heightened interest in the ability of U.S. firms to
compete with foreign firms. One determinant of competitiveness is the exchange
rate of the dollar. Using 1979 as an index of 100, the real (inflation adjusted)
value of the dollar compared to foreign currency of our trading partners rose to
159 in 1985, then fell back to 100 in 1992. The result was that U.S. firms faced
a major cost disadvantage in the mid-1980s, but have recovered since. Our share
of world manufacturing exports dropped in the mid-1980s, but has returned to its
earlier level. n5

   o The decline in the exchange rate of the dollar and slow growth of wages in
the U.S. made the country a lower-wage competitor relative w several other
advanced countries, as the tabulation of hourly compensation in dollars in
 manufacturing in Exhibit I-1 shows.

   o The growth of productivity relative to the growth of wages determines unit
labor costs, which also greatly affects competitiveness. In the U.S. output per
hour increased 2.4 percent a year in manufacturing from 1979 to 1992, while
nominal wages increased modestly more rapidly. In most of our trading partners,
nominal wages increased considerably more rapidly than productivity. The result
was a reduction in the relative unit labor cost of U. S. products compared to
products in other countries.

   o Exhibit I-2 shows movements in three measures of international
competitiveness. The real effective exchange rate; relative unit labor costs;
and the relative unit value or price of manufactured exports. All three show the
same trend, but the greatest increase in competitiveness is in unit labor costs.

                           EXHIBIT I-1
  Hourly Compensation Costs in Some Major Trading Partners
      Relative to the United States: 1975 and 1992
             (U.S. labor costs are scaled at 100)
                                     1975             1992
              United States          100              100
              Belgium                101              136
              Denmark                 99              124
              France                  71              104
              Germany                100              160
              Italy                   73              120
              Sweden                 113              150
              United Kingdom          53               91
              Canada                  94              106
              Japan                   47              100
              Korea                    5               31
              Taiwan                   6               32

   Exhibit I-2 plated

   4. Technology nas changed the work performed at many workplaces and will
continue to do so into the future.

   o The most visible symbol of the new world of work is the computer, which is
virtually ubiquitous in offices, factories, and stores. In 1989 38 percent of
workers used a computer on the job. Sixty percent of college graduates used a
 computer compared to just over eight percent of persons who were not high school
graduates. n6

   o Some technological changes require more skilled workers. Others down-grade
existing skills. The current consensus is that the former predominates, so that
technology has raised the demand for skills, responsibility, and knowledge. In
manufacturing there has been a marked increase in the proportion of employees in
more skilled white collar jobs. Between 1978 and 1993, for instance, the number
of professionals and managers in durable manufacturing increased by 9.6 percent
while the number of production workers fell by 33 percent.

   o Some technological changes have blurred the line between employees and
supervisors and in the arrangement of work responsibilities. The new information
technology has made time-based competition a new mode of business and in some
cases flattened management pyramids.

   In an economic world where knowledge is critical, firms that effectively
develop and use the brainpower of employees have an advantage over competitors;
workers who lack the requisite skills and knowledge are disadvantaged in the job

   5. The structure of employment by industry has shifted to service-producing
sectors from goods-producing sectors, such as from manufacturing and

   o In 1990 77 percent of non-agricultural employees worked in service
producing activities. This compares to 59 percent in 1950. n7

   Indicative of the change in structure, the number of Americans working for
colleges and universities in 1993 was virtually the same as the number working
in the motor vehicle and equipment, blast furnace, and basic steel product
industries combined.

   o Manufacturing constituted 17 percent of all non-agricultural employment in
1993 compared to 34 percent in 1950. Durable goods manufacturing employment has
 grown relative to non-durable goods manufacturing employment.

   o In agriculture, employment declined from 7.2 million in 1950 to 3.2 million
in 1990, due in large part to a fall in self-employed workers and unpaid family

   o The government share of non-agricultural employment has risen modestly
since 1960. In 1960 15.4 percent of employees on non-agricultural payrolls were
employed by state, local, and the federal governments. In 1993 17.1 percent of
employees on non-agricultural payrolls were government employees. n8

   The federal share of employment has fallen while the state and local
government share of employment has risen.

                              EXHIBIT I-3
            Percent Change in Employment, Level of Employment
            and Projected Change in Employment. by Occupation
                              1979 to 2005
                                        Percent    Number    Percent
                                         Change,      in      Change,
                                         Actual     Millions  Projected
                                        1979-1992   in 1992   1992-2005

All Occupations                            19.0        121.1      21.8
Executive, Administrative & Managerial     50.4         12.1      25.9
Professional Specialty                     43.0         16.6      37.4
Technicians and Related Support            57.6          4.3      32.2
Marketing and Sales                        30.7         13.0      20.6
Service Occupations                        24.6         19.4      33.4
Administrative Support, Clerical           15.0         22.3      13.7
Precision Production, Craft,                4.3         13.6      13.3
Operators, Fabricators, Laborers           10.3         16.3       9.5
Agriculture, Forestry, Fishing             -5.2          3.5       3.4

    Non-agricultural employment grew especially rapidly in industries with low
productivity growth and in those with low wages. The big gainers in employment
were wholesale trade; retail trade; finance, insurance and real estate; and
service industries, including health care. Industries with rapid growth of labor
productivity experienced falls in relative employment in the economy as a whole
and within manufacturing. Still, there are exceptions to this pattern:
employment in some industries with high pay, such as computer and data
processing and doctors' offices, grew over the period.

   The new industrial composition of employment demands workers with different
skills and with different responsibilities at the job than in the past and
contributed to the relative decline in the number of high paying jobs for manual

   6. The occupational structure of the workplace has shifted toward white
collar jobs that require considerable education. n9

   o The tabulation in Exhibit 1-3 shows the percentage change in employment by
occupation in the period 1979 to 1992 and that projected by the BLS for the
period 1992 to 2005. The rapidly growing managerial and administrative,
professional, technician and related service jobs are largely exempt positions
under the wage and hour law and most are outside the definition of employees
under the National Labor Relations Act. Compensation for these employees is
relatively high and increased over the past 10 to 15 years more rapidly than for
other employees. These occupations also typically require higher education.

                              EXHIBIT I-4
         Number of Establishments and Firms and Number of Employees
             in Establishments and Firms, by Size Class 1992
                 Establishments (in 000s)          Firms (in 000s)
Size Class            #                #             #            #
                Establishments     Employees       Firms      Employees
0 to 4             3,245            5,675          2,764         4,859
5 to 9             1,164            7,682           924        6,071
10 to 19            727             9,786           550        7,387
20 to 49            486            14,722           345       10,394
50 to 99            167            11,477           113        7,749
100 to 249          95             14,182            63        9,429
250 to 499          24              8,133            18        6,259
500 to 999           9              6,260             8        5,656
1,000+               5             11,353             8       31,465
TOTAL            5,923             89,269         4,794       89,269

   o The science and engineering workforce in private industry continued a long
growth trend at an annual rate of almost four percent. The proportion of science
and engineering jobs in manufacturing increased from 5.0 percent in 1983 to 5.5
percent in 1989.

   o Employment of administrative support and clerical positions, precision
production and craft employees as well as operators and laborers increased in
the past 13 years less rapidly than the average of all employment, and is
projected to increase less rapidly than the average in the period 1992 to 2005.
Americans with high school degrees or less education have historically filled
these jobs.

   The growing high skill work force has workplace needs that arguably differ in
some important ways from those of the workers who were envisaged in traditional
labor laws.

   7. The American workplace includes millions of establishments and firms of
different sizes, whose workplace practices and outcomes differ depending in part
on the number of employees.

   o Exhibit 1-4 shows the number of establishments and employees in thousands
by the size class of the establishment or "legal entity" (firm) in the private
 sector in 1992. n10

   o At the extremes 5.7 million workers are employed in establishments with
fewer than five employees and 13.4 million in establishments with less than ten
employees; whereas over 11.3 million are employed in establishments with over
1,000 employees. Thus 15 percent of American workers are in quite small
establishments (less than ten employees) and nearly 13 percent in the largest

   o Since large firms often have many establishments, the distribution by firm
size shows a greater concentration among firms with the over 1000 employees than
among establishments in that size class. Firms with more than 1000 employees
employ 35.2 percent of the work force whereas firms with less than ten employees
employ 12.2 percent of the work.

   o In manufacturing, there is little support for the claim that most
employment growth is generated by small firms. While small plants and firms do
account for most newly-created jobs, they also contribute disproportionately to
the number of jobs that disappear. Survival rates for new and existing
manufacturing jobs increase sharply with employer size. Smaller manufacturing
firms and plants exhibit sharply higher gross rates of job creation but not
higher net rates because of their higher gross job destruction rates.  n11

   Smaller enterprises pay lower wages than larger enterprises in the same
industry, and are less likely to offer health and retirement benefits. Spending
on insurance and retirement benefits per worker increases with the size of
enterprise. In the size categories 1-99, 100-499 and 500 or more, health
insurance and pensions costs per hour in March 1993 were respectively $ 1.09, $
1.31 and $ 2.32. n12

   Most firms in the 1-24 size category do not provide such benefits.

   o While smaller firms and establishments do not offer the same wages and
 benefits as larger firms, many workers have traditionally used them as first
jobs that lead to better employment outcomes. The lack of formal structure also
makes many small workplaces attractive to employees.

   o Health benefits for retirees, financed in party by former employers apart
from Medicare were provided in 1990 by 15 percent of establishments with fewer
than 100 workers and by 45 percent of establishments with 100 or more
workers. n13

   o Most enterprises in the United States determine compensation and working
conditions on their own, without the coordination of employer associations. This
contrasts with the situation in Western Europe or Japan, where employer
associations are a decisive factor in determining wages and hours. In Europe
agreements between associtations and unions usually extend to establishments of
all sizes.

   The disparity between smaller and larger firms creates different environments
for worker-management relations in the United States, with firms and workers
having different options and needs depending on firm size.

   8. During the past 10 to 20 years many product and financial markets in the
U.S. have faced turbulent conditions through deregulation of rates and prices
and the removal of barriers of entry; or through government cutbacks in defense
or other programs.

   o The product markets for railroads, airlines, trucking, natural gas,
tele-phone and cable television are the major fields of de-regulation, although
some public services have also been privatized. De-regulation has affected
employment and wages and labor-management relations in these sectors.

   o Changes m financial markets have led to considerable mergers and
restructuring of firms and battles for control of corporations that can affect
the employment and well-being of employees. In some cases employees benefit in
 the long run from changes in ownership, as new managers lead the firm in more
productive directions. In other cases, the consequences are adverse for
employees, with new owners downsizing the firm and demanding wage and benefit
concessions from workers.

   o Defense-industry cutbacks have created major economic problems for many
enterprises, communities and for selected occupations. Occupations with a
significant reliance on military programs include engineers, particularly
aeronautical and astronautical engineers, and aircraft assemblers, and numerical
tool controllers.

   Turbulence in product and financial markets tends to create insecurity at
work-places and can upset labor-management relations in ways that raise the
costs of structural change.

3. The Changing Workforce

   The number of workers, the demographic and ethnic composition of the American
workforce and their educational levels have changed over the past several
decades. In 1950 firms hired workers from a civilian labor force of 62. 2
million persons. In 1993 the American workforce of 129.5 million persons was
more diverse and better educated.

   9. A higher proportion of Americans work or seek work than ever before, due
in large part to the movement of women into the workforce.

   o In 1950 59.2 percent of the population was in the civilian labor force; in
1993 the percentage had risen to 66.2. The principal reason is the movement of
women into the workforce. In 1950 33.9 percent of females of working age were in
the labor force; in 1993, 57.9 percent were in the labor force. The percentage
is projected to increase further to 63.0 percent in 2005. In 1993 58 percent of
married women with children under six years of age worked.

   o By contrast, in the same period the proportion of males in the civilian
work force dropped from 86.4 percent to 75.4 percent, due in large part to
 declines in the age of retirement. The labor participation rate for men is
projected to continue to decline. Exhibit I-5 plated

   o Exhibit 1-5 shows that the composition of families by earnings has been
greatly altered. Many more families have two earners than in the past. Many more
families have single female earners than in the past. The proportion of families
fitting the traditional "Ozzie and Harriet" pattern of the male working in the
labor market and the female working exclusively in household activities fell
from a majority to a minority of families.

   o The Bureau of Labor Statistics projects, in its moderate scenario, a lower
rate of growth in the civilian workforce in the period 1992 to 2005 compared to
1979 to 1992. Annual growth rates are projected to be 1.3 percent a year for the
period 1992 to 2005 instead of 1.5 percent a year in the years 1979 to 1992, or
a net increase in the civilian labor force of 23.5 million in the 1992 to 2005
period compared to 22.0 million in the 1979 to 1992 period.

   The increased role of women as both breadwinners and homemakers challenges
traditional work arrangements and raises demands for flexible working hours,
job-sharing arrangements, child care benefits, and parental leave.

   10. The ethnic composition of the work force has changed.

   o In 1954 approximately 10 percent of the workforce was non-White; in early
1994, 15.2 percent of the workforce was non-White. The Hispanic share of the
work-force reached 9.0 percent in early 1994, in part because of sizeable
immigration from Mexico and Latin America. The proportion of the population who
were Asian or Pacific Islanders nearly doubled from 1980 to 1994, though from a
small base. n14

   o In the 1992 to 2005 period the racial composition of the labor force is
ex-pected to continue to change, as the following annual growth rates for the
labor force show:

                    1979-1992  1992-2005 (15)
           White     1.8           1.1
           Black     2.0           1.7
           Asian     5.2           4.7
           Hispanic  4.3           3.9

   (15)The figures for Hispanics are from 1980 to 1992. They are for any race.
 n15 Footnote in table above.

   o Almost two-thirds of entrants to the civilian labor force in 1992 to 2005
are projected to be women and racial minorities and only one-third are
pro-jected to be White males.

   The changing competition of the workforce challenges employers and labor
organizations to develop training and employment practices that take account of
the diverse backgrounds of employee and that guarantee equal employment
opportunity for all.

   11. The years of schooling attained by the workforce have increased greatly.

   o In 1970 25.9 percent of the labor force aged 25-64 years had more than 12
years of schooling; 38 percent had a high school degree; and 36 percent had less
than high school education. In 1992 52 percent of those aged 25-64 had more than
12 years of schooling: 25.7 percent had some college work; 26.7 percent were
college graduates.

   o Despite the huge increase in educational attainment more than 20 percent of
students drop out of high school -- 50 percent in many inner city schools. In
October 1991 in the age group 16-24, only 64.3 percent of men with less than a
high school diploma were employed compared to 80.7 percent of men who had
completed high school.

   o Many high school dropouts go on to get a general education development
certificate (GED), but GEDs are an imperfect substitute for a high school
diploma in the job market. In addition, much training in workplaces goes to
white collar and more educated workers, so that the less educated do not easily
make up for their skill deficiencies through employer-based  training, although
some employers have exemplary programs.

   The military has historically trained many male high school graduates and
until recently, many high school drop-out men as well. The decline in the size
of the military has made this form of education and route into the job market
less common among the young.

   o In 1989 about one-quarter of all students enrolled in U.S. graduate science
and engineering departments were non-U.S. citizens. In engineering, mathematics
and the computer sciences, the majority of Ph.D. recipients over 55 percent)
were non-United States citizens.

   Traditional employee-management relations and regulations may not fit well
the new highly educated workforce. The current training system does not meet
the needs of less educated workers.

   12. The age structure of the workforce has changed and will change greatly in
the next decade as the "baby boom" generation ages.

   o The median age of the labor force was 40.5 in 1962. With the post-World War
II baby boom, the median age declined to 34.6 in 1980. It increased to 36.6 in
1990 and is projected to rise to 40.5 in 2005.

   o The annual actual and projected growth rates for 16-24, 25-54, and 55 and
over persons in the labor force from 1979 to 1992 and from 1992 to 2005 are
shown below:

 Age    1970-1992   1992-2005
16-24     -1.7        1.8
25-54     2.7        1.1
55 and over... 0.2   2.5

   o The most striking change is the acceleration in the growth rate of older
workers compared to the deceleration in the growth of "prime age" workers.

   o In the period 1992 to 2005 the Bureau of Labor Statistics projects that
51.2 million persons will enter the civilian labor force and 27.7  million
persons will leave due to retirements, deaths and withdrawals. Almost twice as
many people will enter the labor force as leave in this period for a net growth
of 23.5 million.

   The increase in the workforce aged 55 and older (combined with enhanced
longevity) raises questions about the adequacy of pensions and health benefits,
particularly in small enterprises, and the feasibility of financing the trend
toward early retirement.

   13. There has been an increased flow of immigrants, many from developing
countries, into the United States.

   o Large numbers have come legally, but many also have come illegally. As a
result, the proportion of the population who are foreign born has risen from 4.7
percent in 1960 to 8.4 percent in 1990 according to Census of Population data.
Since the Census fails to count perhaps a third of illegal immigrants  n16

   and since immigrants have higher labor participation rates than the
native-born, the actual proportion of workers who are foreign born may be as
high as nine percent.

   o Following the Immigration Act of 1964, immigrants from developing countries
have made up the bulk of American immigrants. In the 1950s, only a third of
immigrants came from developing countries; the largest countries for legal
immigration were Germany, Canada, Mexico, the United Kingdom and Italy. In the
I980s, 84 percent of immigrants were from developing countries; the largest
source countries were Mexico, the Philippines, China, Korea, and Vietnam. The
increased proportion of immigrants from poorer countries has reduced the
education and skill distribution of immigrants compared to native- born
Americans. Many immigrants come with advanced training and degrees (such as
Indian doctors, Filipino nurses et al) but many come with little schooling,
largely from Mexico and other Latin American and Caribbean countries.
   o The influx of less skilled immigrants was such that about one in five
American workers with less than high school education were foreign born in the
1980s. The geographic concentration of immigrants in gateway cities and states
places substantial burdens on those areas in providing social services to a
growing low-income population.

   o Immigrants are disproportionately employed in low wage import-competing
industries. Illegal immigrants make up a significant share of employment in
several sectors: apparel manufacturing; leather and footwear; private household
jobs. In addition, many immigrants, particularly those who enter the country
illegally, work in poor conditions outside the normal rules of the labor market.

   o Immigration links American wages and working conditions to those in source
countries. Immigrants often take difficult and low-paying jobs, which increases
the output of the country. But by competing with less skilled native-born
Americans, they also contribute to the failing real earnings and weak job
opportunities for some native-born workers.

4. Changing Labor Market Outcomes

   The changes in the economy, -technology, workforce, and competitive
conditions summarized above have interacted within the U.S. labor relations
system to produce employment and wage outcomes that differ greatly from those in
the past and fall short of meeting the needs of many Americans.

   14. The United States has been more successful in creating jobs for those who
seek work than most other developed countries, but unemployment remains high for
the less skilled; many American workers are insecure about their jobs.

Child Support Enforcement Division

EMPLOYER REPORTING PROGRAM -- REPORT FORM If you use this form to report,
make and keep extra copies for future reporting. Please note that the employer
identification information below applies to your company  ONLY.Employer
Identification:New or Rehired Employee Information:

   1. Employee Name:

   Employee Address:

   City State Zip


   Birth Date:2. Employee Name:

   Employee Address:

   City State Zip


   Birth Date:3. Employee Name:

   Employee Address:

   City State Zip


   Birth Date:4. Employee Name:

   Employee Address:

   City State Zip


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   Child Support Enforcement Division

   Employer Reporting Program

   550 W 7th Ave. St. 410, MS 18

   Anchorage, AK 99501-3556CSED 04-1050 (Rev. 10/92)

   o The unemployment rate of the civilian labor force was 5.3 percent in 1950
and 5.5 percent in 1990. The figure for 1993 was 6.7 percent of the entire labor
force (6.8 percent of the civilian labor force). The averages of unemployment
rates for the decades are as follows: 1950s - 4.5; 1960s - 4.8; 1970s - 6.2;
1980s - 7.3. By contrast, average unemployment in Western Europe in the 1980s
 was 9.1 percent.

   o Unemployment in the U.S. affects many workers. In 1990, 14.7 percent of the
workforce experienced some joblessness. Spells of unemployment were shorter than
in other advanced countries--American workers unemployed in 1990 had a median
spell of 12.0 weeks. But since statistics on length of unemployment relate
solely to those currently unemployed, by the time these workers find a job, they
will have been jobless longer than 12 weeks. The amount of time they are likely
to be jobless when they conclude their spell of unemployment will be roughly
double the reported 12 weeks--or nearly half a year.

   o A 1991 Family and Workplace Institute survey found that 42 percent of
workers reported that during the past year their places of employment
experienced downsizing or permanent cutbacks of the workforce; 28 percent
reported cutbacks in the number of managers. Many workers feared for their job
security; 18 percent felt it very likely or likely they would be laid off
temporarily next year and 17 percent reported that likely or very likely they
would lose their job permanently. n17

   o Unemployment rates vary inversely with years of schooling. In 1992, the
unemployment rate for those with less than a high school education was 11. 4
percent; for those with only a high school education, 6.8 percent; for those
with a bachelor degree, 3.5 percent; while for those with a professional degree,
1.4 percent. Unemployment rates have also been lower for white collar workers
than for blue collar workers, but in recent years the gap in rates between these
two groups has diminished.

   o Unemployment rates for minorities are considerably higher than for
Whites. n18

   In 1993 12.9 percent of Blacks were unemployed compared to 6.0 percent of
Whites. For young Blacks, rates of unemployment are high, and many do not
participate in the workforce at all. In 1993 just 50.8 percent of 16-24 year old
 Blacks not enrolled in school were employed compared to 72.8 percent of 16-24
year old Whites not enrolled in school. For those in the labor force, the rate
of unemployment was 26.8 percent for 16-24 year old not enrolled Blacks compared
to 11.0 percent for similarly aged not enrolled Whites, and 15. 9 percent for
Hispanics aged 16-24 not enrolled in school.

   o In the four previous recessions prior to 1990 44 percent of the increase in
job osers were on temporary layoff--expecting recall to their previous employer.
The remaining 56 percent of additional recession-induced job losers were
permanent job losers, persons who did not expect recall. But from July 1990 to
June 1992, when unemployment peaked, only 14 percent of the increase in job
losers expected to be recalled, whereas 86 percent were permanent job losers.

   EXHIBIT 1-6

   The Stagnation of Real Earnings Growth in Establishment

   and Household Surveys 1973-1993

   Compound Growth

   Rate Per Year

   Establishment Survey Data

   Average hourly earnings, private nonagriculture,

   Production and Nonsupervisory Workers, 1973-1993 -0.7%

   Hourly Compensation, Business Section, 1973-1992 0.4%

   Total Compensation, Employment Cost Index, 1979-1993 0.1%

   Compensation of Full-time Equivalent Workers, 1975-1991 0.2%

   Household Survey Data

   Median Weekly Earnings of Full-time Workers, 1979-1993

   All -0.3

   Male, 25 and over -1.0

   Female, 25 and over -0.4Median Annual Income, Full-time Workers, 1973-1992
   Male -0.5

   Female 0.7

   The unemployment insurance system, which was intended for workers temporarily
laid off, is not well-suited to help those suffering from structural
unemployment problems due to permanent job loss or educational deficiencies.

   15. The real hourly compensation of American workers stagnated in the past
two decades and actually fell for male workers--developments unprecedented in
the past 75 years in this country.

   o From 1929 to 1973 earnings of American workers increased in real terms by
some two percent per year. For the period 1973 to 1992, estimates of
compensation per year from establishment and household surveys deflated by the
CPI show a very different pattern--stagnation or decline in real earnings. The
compound annual average changes in earnings from the different series are given
in Exhibit 1-6.

   o Compensation series differ in various ways--the sample covered; whether or
not they include employee benefits or social insurance; time coverage (for some
of the series we report figures going back to 1973, others begin in later years,
in others we report figures from 1979) -- but they tell the same story: that
real hourly pay did not increase in the 1980s to early 1990s at anything like
the historic pattern of two percent a year.  n19

   The figures that relate to wages and salaries show smaller growth of real pay
than those that include benefits; those for production workers and those for
male workers show the biggest drops.

   o The slow growth of U.S. wages has reduced the gap between the real pay of
American workers and workers in other advanced countries. Deflating wages by
OECD purchasing power parity price indices (which measure how much different
currencies buy in the consumer market) shows that workers in several European
 countries such as Germany, Belgium and Norway have attained roughiy comparable
hourly real earnings to American workers. n20

   Men Women

   1972 1990 1972 1990 Less than High

   School 26,462 20,306 15,117 14,338 4 Years High

   School 33,961 27,629 18,911 19,093

   1-3 Years of College 38,117 32,892 21,530 23,161

   4 or More Years College 48,299 44,310 28,971

   31,668Ratio 4 or more College

   to 4 years of High School 1.42 1.53 1.60 1.66

   o For the non-farm business sector as a whole, output per hour increased a
total of 13.8 percent from 1979 to 1992 while hourly compensation deflated by
the consumer price index increased by just 3.6 percent. One reason for this is
the greater increase in the consumer price index than in the deflator for
output. This implies an increased gap between the cost of labor relative to the
producer prices (which affects employment decisions by firms) and the
purchasing power of wages relative to the consumer prices (which affects living

   16. The gap in earnings between higher paid and more educated or skilled
workers and lower paid and less educated workers has increased greatly in the

   o The median annual income, in 1991 dollars, of men and women according to
educational attainment in 1972 and 1990 are reported in tabular form:  n21

   These data show that real earnings fell more for male workers with less than
4 or more years of college than for college graduates and have fallen for women
with less than high school education.

   o A group that has fared particularly poorly in terms of earnings growth has
 been younger men, particularly those with less than college education. In
addition to-facing falling real earnings, these men are less likely to have
pensions than similarly aged men years ago. n22

   Their ability to form families and buy homes has been compromised by their
labor market plight.

   Men Women

   1983 1991 1983 1991

   Managerial and Professional 706 753 489 527

   Service 349 330 237 244 Ratio 2.02 2.28 2.06 2.16

   o The usual weekly earnings, in 1991 dollars, of workers in managerial and
professional occupations and in service occupations in 1983 and 1991 are
reported above:

   These data show a pattern much like that in education: falling real earnings
for men, particularly those with low wages, and a rising ratio of earnings for
the high paid relative to the low paid.

   o Several factors have been proposed as contributing to the widening earnings
inequality. Some analysts stress the importance of trade, particularly with less
developed countries; others stress technological developments; others point out
that the influx of less skilled immigrants added to the supply of less skilled
workers in the job market; others have noted that the growth of the college
workforce decelerated during the 1980s. In addition to these factors, the
decline of unions, who historically reduce earnings differentials within
establishments and bring the earnings of production workers closer to that of
supervisory workers, has contributed to the rise in inequality. For workers with
very low earnings, the fall in the value of the minimum wage relative to the
price level has also played a role. Even after the 1990 and 1991 increases in
the minimum, it was at an historically low level relative to average earnings.

    17. The number of low wage fully employed workers in the U.S. has grown
greatly, with the result that a sizeable proportion of U.S. workers are paid
markedly less than comparable workers in other advanced countries; by contrast,
high paid U.S. workers earn more than high paid workers in other advanced

   o About 18 percent of the nation's year-round full-time workers earned less
than $ 13,091 in 1992-- a 50 percent increase over the 12 percent who had low
earnings in 1979. These workers consist disproportionately of women, young
workers, Blacks, Hispanics, and the less educated.

   o Measures of the gap between the earnings of workers in the highest decile
of earnings and those in the lowest decile show that the U.S. earnings
distribution among workers has widened greatly and is the most unequal among
developed countries. OECD data shows that male workers in the bottom decile earn
38 percent of median earnings in the United States whereas the bottom decile of
workers earn 68 percent of the median earnings in Western Europe. In the upper
rungs of the earnings distribution, male' workers in the top decile in the U.S.
earn 2.14 times median earnings whereas male workers in the top decile in most
European countries earn 1.4 to 1.7 times the median.  n23

   The ratio of earnings in the top decile to the lowest decile in the U.S. is
5.63-- by far the widest among OECD countries.

   o As a result of stagnant or declining real earnings in the U.S. and a, wide
and increasingly unequal earnings distribution, lower paid workers in the' U.S.
earn markedly less than comparable workers in Western Europe. The bottom third
of American workers earn less in terms of the purchasing power of their pay than
the' bottom third of workers' in such European countries as Germany, France,
Belgium. Tenth decile male workers in the U.S. are paid barely half what tenth
decile male workers make in Europe'. In addition, many low-paid U.S. workers
lack health insurance and other fringe benefits that are provided for all
 workers in other countries.

   The stagnation of real earnings and increased inequality of earnings is
bifurcating the U.S. labor market, with an upper tier of high wage skilled
workers and an increasing "underclass" of low paid labor.

   18. Americans put in more hours of work than workers in other advanced
countries except for Japan.

   o After having led the world in reducing hours worked, U.S. workers work
about 200 hours more during a year than workers in Europe. For instance, in 1991
the OECD reports that Americans worked 1,737 hours over the year compared to
1,557 hours for Germans, 1,540 hours for the French, and 1,423 hours by the
Dutch. n24

   o A major reason for the difference in working time is the greater length of
vacations in Europe. Americans with sufficient seniority typically get two weeks
of vacation, though some get more and others less. By contrast, Europeans
typically obtain 4-5 week vacations, often legally mandated, from the first year

   o The greater work time of Americans is a relatively new phenomenon. The
length of vacation and holiday time in the U.S. for fully employed workers
declined modestly in the past 20 years. Vacation and holiday time has increased
in such European countries as Germany.

   o Many American workers work non-normal hours in different locations. In 1991
6.2 percent of workers were multiple job-holders, reporting more than one job;
15.5 percent were on flexible schedules, compared to 12.3 percent in 1985; and
17.8 percent reported that they were on shift schedules. In addition, 18.3
percent of workers reported that they did job-related work at home. While many
of these were self-employed, 15 million wage and salary workers also reported
working at home.

   o With a higher fraction of the working age population employed and those
 working averaging more hours than workers in Europe, Americans spend more time
at work than people in other advanced countries. Surveys of preferences for work
show that Americans also want to work more hours and report working harder than
European workers.

   The fact that Americans work so many hours makes conditions at work a major
factor in the economic well-being of citizens.

   19. The gap in earnings between men and women has declined in recent years,
though women continue to earn less. The gap in earnings by race has fallen among
women, but the earnings of black men were

   Year White Men White Women Black Men Black Women

   1970* 584 353 417 302

   1980 563 356 431 323

   1993 531 403 392 349

   * The 1970 Figures for Blacks refer to "Blacks and others."

   no better relative to that of Whites in 1993 than they were in 1970.

   The following tabulations give median weekly earnings by race and gender for
full time wage and salary workers (in 1993 dollars).

   o The earnings of women, which have historically been lower paid than men,
rose relative to those for men in the 1980s, but were still just 81 percent of
male earnings for Whites in 1993. Some of the difference in pay by gender is
attributable to differences in work experience or to differences in industry or
occupation, but there still remains an unexplained residual gap in any given
labor market category. The gap between the earnings of Black women and those of
White women was relatively narrow. In 1970 Black women earned 85 percent of
White women. In 1993 they earned 87 percent as much as White women. Within
educational groups Black women earned approximately as much as White women, so
that the remaining difference is attributable to differences in educational
   o The earnings of Black men, which had risen rapidly relative to those of
White men in the late 1960s to early 1970s following passage of the Civil Rights
Act of 1964, stagnated relative to those of White men since 1970. In 1970 Black
men earned 71 percent of what white men earned; in 1980 they earned 77 percent;
in 1993, they earned 72 percent.

   While the U.S. reduced earnings differentials based on gender and race,
considerable differences remain.

   20. The economy, the labor market and the legal system produce many jobs that
diverge from full-time continuing positions with a single employer.

   o There is no standard definition or data to encompass worker-management
relations commonly grouped under the label "contingent workers." This term
covers part-time workers, some of whom are voluntarily part-time, some of whom
are multiple job holders. It also includes employees of temporary help agencies
(who may be full-time workers), and some of the self-employed, including
"owner-operators" or independent contractors with only a single contract or
employer. Rather than grouping these disparate groups under one rubric, we
consider each separately.

   o Part-time workers have been a relatively constant share of the American
workers at about 18 percent of the workforce in the 1980s to early 1990s. Many
part-time workers choose part- time work voluntarily, but the proportion who
would prefer full-time work has trended upward. In 1992 6.5 million workers were
categorized as involuntary part-timers out of a total of 20.6 million part

   o Whether voluntary or involuntary, part-time workers are lower paid per hour
than full-time workers; have higher turnover rates; are disproportionately young
and female; and are more likely to work for employers who do not offer pensions
or health insurance, Perhaps seven million part-timers work fewer than 1000
 hours per year and are exempt from Employee Retirement Income Security Act and
Family and Medical Leave Act (FMLA) benefits. Unemployment Insurance (UI) state
earnings and requirements to be available for full-time work exclude most
part-timers from UI benefits.

   o The Department of Labor estimates that in 1992 there were 2.5 million
temporary employees, approximately half hired through temporary agencies and
half hired directly by employers. The number of workers in the temporary help
services or help supply services industries more than tripled from 1979 to 1992.
These workers are disproportionately young, female, and Black and tend to be in
relatively low wage occupations.

   o Self-employed workers differ greatly from part-time and temporary workers
and include some of the nation's most highly educated and high paid workers.
Independent contractors are included in the self-employed; some of them work for
a single employer, possibly as a means for avoiding virtually all of the
nation's labor laws.

   o European countries and Japan draw somewhat different lines between
contingent and other workers. n25

   European countries distinguish between workers with permanent contracts, who
are difficult to dismiss or lay off, and those with temporary employment
contracts. The proportion of workers on temporary contracts ranges widely, from
5.3 percent in the United Kingdom to 32.2 percent in Spain. The proportion of
the labor force that is involuntary part-time is higher in the United States
than in other countries, but the proportion who are part-time is higher in many
European countries than in the U.S., in part because of work-sharing or
child-care arrangements.

   o The increase in "contingent work" in the U.S. is largely the result of the
way in which employers offer jobs to increase flexibility with uncertain product
demand and to reduce labor costs by retaining a smaller core of year round
 full-time workers who receive full benefits which are not given to contingent
workers; and of legal and tax arrangements that facilitate the formation of
"owner-operator" arrangements rather than employer-employee arrangements. The
growing number of "contingent" and other non-standard workers poses the problem
of how to balance employers' needs for flexibility with workers needs for
adequate income protections, job security and the application of public laws
that these arrangements often preclude, including labor protection and
labor-relations statutes.

   21. A rising number of America's working-age population is involved in
illegal activity, for which they have come under supervision of the criminal
justice system, which has greatly expanded its employment.

   o In 1991 789 thousand persons were federal and state prisoners and 426
thousand were in jails, for a total of over 1.2 million. Relative to the
population the number of prisoners has more than tripled since 1970.

   o Nearly 95 percent of state prisoners are men of working age and 91 percent
of jail inmates are men. These figures imply that approximately 1.7 percent of
the potential male work force in 1991 was incarcerated. Rates of recidivism are
high, so that relatively few of these men are likely to be rehabilitated into
productive members of the workforce. In 1990, an additional 3.2 million persons
were on probation or paroled. The total number under supervision of the criminal
justice system is thus equivalent to 6.4 percent of the 1991 male civilian
workforce of 68.4 million persons.

   o Of those in state prisons, in 1991 41.2 percent had less than 12 c years of
schooling,  n26

   47.3 percent were Black; and 31 percent were not employed prior to their
arrest. The rates of incarceration for young less educated men, particularly
Blacks, are extraordinarily high. Many inner city youths report that they can
 earn more from crime than from legitimate employment and report substantial
opportunities for illegal earnings.

   o In 1990 1.7 million workers were employed in the criminal justice system
providing police protection, legal services, correctional work, and the like. In
the private sector guards and watchmen are one of the fastest growing

   The large number of young American men involved in crime is a major drag on
the economy, costing the U.S. considerable human and other resources far beyond
those of any other advanced country.

   22. The measured incidence rates of occupational injury and illness per
full-time worker shows little improvement over the past decade. Fatal accidents
declined but the number of workdays lost per full-time employee due to
occupational injury and illness has risen; and workers' compensation costs have
risen sharply.

   o Occupational injury rates per 100 full-time workers were unchanged in the
range of 7.6 to 8.7 in the 1980 n27  Lost workday cases per 100 full-time
workers were in the 3.4 to 4.0 range. But the number of lost workdays per 100
full-time workers rose from around 55 days in the 1970s to over 80 days in the
early 1990s, implying that those who are sick or injured are out longer than in
the past.

   o Fatal accidents fell. Among the highest fatal accident workplaces are those
in transportation, construction, services, agriculture and manufacturing in that
order. About one-third of the 6,083 fatalities due to work injuries in 1992
resulted from highway accidents or homicides, each of which accounted for 1,000
deaths apiece.

   o The number of workers covered by workers' compensation insurance grew from
36.9 million in 1950 to 95.1 million in 1990. Workers' compensation costs rose
from 1.11 percent of payrolls in 1970 to 2.27 percent of payrolls  in 1989.
Medical and hospitalization benefits reached $ 16.8 billion in 1990. The rise in
medical and hospitalization costs has been particularly sharp in the past

   o In the first half of 1993 17 state legislatures introduced initiatives to
change workers' compensation. Ten states, by 1993, mandated joint labor-
management health and safety committees in enterprises of a specified size
(often 11 or more employees) or with above average health and safety problems as
reflected in workers' compensation records.

   o While comparisons of the level of U.S. and Canadian rates of workplace
injury and sickness are subject to many problems, the trend rate in Canada is
strikingly different from that in the U.S. Work-related accident rates declined
in Canada from the early 1970's through 1992 and fell most rapidly in Ontario,
which made a major effort to reduce accidents through joint health and safety
committees and government-sponsored health and safety education.

   America's occupational health and safety record has not improved to the
extent that seems possible, with the result that work injuries are producing
rising costs for firms, workers, and the economy.

5. Labor Relations Outcomes

   Collective bargaining governs a declining fraction of workplaces and the
workforce. Government regulations govern many more subjects and have become more
pervasive, with increased reliance on administrative and court procedures to
resolve issues of disagreement between employees and firms in the new economic

   23. The prevalence of collective bargaining has declined, as collective
bargaining agreements have not been negotiated for many new worksites and

   o In 1993 the proportion of private sector nonagricultural workers who were
 union members was 11.2 percent, which is less than one-third the 35 percent or
so covered in the 1950s. By contrast, over a third of public sector workers were
union members in 1993, compared with 10 to 11 percent in the 1950s.

   24. Overt conflict in the form of strikes or lockouts declined appreciably in
the 1980s over levels of the earlier post-World War II years.

   o The number of work stoppages involving 1,000 or more workers and the number
of workers involved in these disputes per year has dropped sharply in the past
two decades, as the following tabulation shows:

   Stoppages Workers

   1950s 352 1,588,000

   1960 288 1,234,000

   1970s 289 1,488,000

   1980s 83 507,000

   In 1950 0.26 percent of working time was lost due to strikes. In 1990 the
days idle constituted 0.02 percent of estimated working time.

   o In 1990 to 1992 the number of stoppages involving 1,000 workers or more and
the number of workers involved in these stoppages continued . to decline. In
1992 there were 35 such stoppages involving 182 thousand workers.

   The decline in collective bargaining in the private sector has created an
arena for employee-management relations in which most employees have no
independent organization to discuss issues with management.

   25. Government regulations of the workplace have increased greatly.

   o The number of statutes affecting the workplace, and the related
regulations, have increased significantly over the past 25 years under the
administrations of both political parties (see Chapter IV of this report). The
enactment of ERISA, OSHA, the Immigration Reform and Control Act, Family and
Medical Leave, and Americans with Disabilities Acts are illustrative of major
 regulatory developments.

   o At the same time the appropriations for organization and staff to secure
enforcement have not kept pace with the enlarged responsibilities of federal
agencies. A significant development has been the enactment of the Administrative
Procedures Act of 1990 which authorizes negotiated rule-making. But these
procedures have been used infrequently.

   o The administration of regulations has seldom resorted to alternative
dispute resolution methods. An important development has been the experience in
the Philadelphia area. n28

   o In contrast to the relatively centralized U.S. regulatory system, most
European countries rely on elected groups of employees in "works councils" to
meet with managers to determine workplace conditions and monitor compliance with
national labor regulations.

   The growth of federal regulations of the workplace leaves less room for local
parties to determine the workplace rules that best meet the needs of their

6. Summary

   The Commission's findings with respect to the economy and labor market for
American workers are set forth at the end of this Section. There is, of course,
nothing sacrosanct about the 25 points around which we have organized our
discussion. Some readers may prefer a more concise or a more elaborate listing
of facts. Some may prefer greater emphasis on some facts rather than others.
This said, the overall picture of the changing environment for worker-management
relations given here is an arresting one.

   The evidence shows that the economy and workforce have changed greatly in
recent years. This is not the first period of massive change in the labor
market: the movement of labor from agriculture to industry in the early part of
the century, the growth of the mass production industries, the Great Depression,
 the boom of World War II. Whether the current restructuring is greater or
smaller than earlier transformations need not be decided.  n29

   In terms of the Commission's charge, the key finding is that the changes
affect the working lives of nearly all Americans and firms, and pose a major
challenge to worker-management relations.

   As noted, some of the changes described in this chapter pose major long term
problems for our society. The low rate of growth of productivity makes it
difficult for firms and workers to produce the continually rising living
standards that have marked the economic history of our nation. The globalization
of economic activity places firms and workers in greater competition with
advanced countries that have evolved different rules of work and with less
developed countries where pay is much lower than in the U.S. It makes
competitiveness depend on fluctuations in exchange rates, almost regardless of
what employers and workers do.

   The increased demand for educated workers due to changes in the mix of
industries and occupations and to technological changes and the growth of the
educated workforce makes it critical that Americans obtain adequate schooling
and job training. They also pose a problem for the country in finding ways to
employ less educated workers at wages that enable them to support families at
reasonable living standards.

   The changing composition of the work-force -- more educated; more female,
often part of a two-earner family; more likely to be members of a minority
group; and getting older as the baby boomers age -- poses challenges to
traditional modes of compensation and organization of work schedules and makes
the provision of equal opportunity for all increasingly critical to our economic

   The growth of contingent work and other forms of employment that break the
mold of more permanent employment with a single employer raise questions about
 the ability of our traditional labor relations system to provide employee
benefits, legal protection, and representation for those who want it.

   While our labor market and employee-management system has done well in
adjusting to these changes in some areas, notably job growth, it has done
sufficiently poorly in others to. raise serious concern about whether extant
institutions and employee-management relations and regulations fit with the
rapidly changing economic and social environment.

   Among the signs of a failure to adjust to the changing environment in ways
consistent with our past economic history of progress for virtually all our
citizens are: falling real earnings for less educated and less skilled workers;
stagnant growth of earnings for others; continued high levels of occupational
injuries; lack of health insurance and other fringe benefits for many workers;
an increased proportion of our young male workers incarcerated; high rates of
joblessness for the less skilled. Cur unemployment insurance system, which was
intended for workers temporarily laid off, is not well-suited to help those
suffering from structural unemployment problems due to permanent job loss or
educational deficiencies.

   A healthy society cannot long continue along the path the U.S. is moving,
with rising bifurcation of the labor market.

   The decline of collective bargaining in the private sector and increased
reliance on governmental regulations and court suits to protect workers gives
most employees no independent mechanism for dealing with their management as a
group and moves employee-management policies from the local parties. The
disparity between smaller and larger firms creates different environments for
worker-management relations in the United States, with firms and workers having
different options and needs depending on firm size. Diversity in size and in
characteristics of workers argues for more, not for less, determination of
 working conditions and rules at worksites.

   These are just some of the areas, to which others will be added in later
chapters of this report, in which our factual review suggests that American
labor and firms need a better future.

Twenty-Five Citical Factor in the American Labor Market

   1. A long-term decline in the rate of growth of productivity.2. An increased
globalization of economic life, reflected in trade and capital flows, and

   3. Increased competitiveness of U.S. firms in the international marketplace
in the late 1980s and early 1990s, due to changes in unit labor costs and
exchange rates.

   4. Changes in the work performed due to changing technology.

   5. A shift in employment to service-producing sectors from goods-producing

   6. A shift in the occupational structure of the workplace toward white collar
jobs that require considerable education.

   7. Millions of establishments and firms of different sizes, whose workplace
practices and outcomes differ depending in part on the number of employees.

   8. Turbulence in many product and financial markets due to deregulation and
changes in government cutbacks in defense or other programs.

   9. A higher proportion of Americans working than ever before, due in large
part to the movement of women into the work force.

   10. An increased minority share of the workforce.

   11. Increased years of schooling by the workforce.

   12. A changed aged structure of the work force as the "baby boom" generation

   13. An increased flow of immigrants from developing countries into the United

   14. Substantial creation of jobs but high unemployment for the less skilled
and considerable insecurity about jobs.

   15. Stagnant real hourly compensation, with falling real compensation for
male workers.

   16. A rising gap in earnings between higher paid and more educated or skilled
workers and lower paid and less educated workers.

   17. A growing number of low wage fully employed workers whose living
standards fall below those of low wage workers in other advanced countries.

   18. Annual hours of work that exceed those in other advanced countries except
for Japan.

   19. A declining gap in the earnings of men and women, but stagnation in the
gap between non-White and White workers.

   20. A growing number of jobs that diverge from full-time continuing positions
with a single employer.

   21. A large growing population for whom illegal activity is more attractive
than legitimate work.

   22. Stagnant rates of occupational injury and illness and increased workdays
lost per full-time worker, with increased workers' compensation costs.

   23. A decline in the prevalence of collective bargaining.

   24. Fewer strikes or lockouts.

   25. Increased government regulations of the workplace.



   The principal laws governing workplace organization are the Railway Labor Act
(1926), the Wagner Act (1935) and the Taft-Hartley Act (1947), and their
subsequent amendments. Other key laws dating from this period include the Social
 Security Act (1935) and the federal-state system of unemployment insurance and
the Fair Labor Standards Act (1938). The wartime labor relations policies of
World War II and the Korean War left their imprint for many years.


   Economic Report of the President, February 1994, Table B1.


   In 1992 mainland China was the fifth largest importer to the U.S. (Japan,
Canada, Mexico, and Germany were the top four). China and Taiwan together are
the third largest importer. The U.S. trade deficit with China is second to that
with Japan.


   The U.S. Patent Office determines the nationality of a patent on the basis of
the residency of the applicant. Patents given to subsidiaries of American firms
overseas for inventions there are counted as foreign patents. while patent given
to U.S.-based subsidiaries of foreign firms are counted as U.S. patents.


   In 1991 the U.S. share of world exports of manufactures was 17.2 percent,
which exceeded the level of 16.8 percent in 1980. U.S. Bureau of Census,
Statistical Abstract, 1993, Table 1264.


   Statistical Abstract of the United States, 1992, Table 648.


   These are from the household data reported in Employment and Earnings,
January' 1994, Tables 23 and 24. and include self-employed unpaid family
workers. Establishment data that are limited to wage and salary workers give
slightly different figures.

   These figures are from establishment data which provide a longer and arguably
more accurate measure of government employment than household survey data.


   The U.S. government changed its occupational classification in 1983 so that
the figures are not strictly comparable or the period 1979-92.


   These data are for workplaces covered by state unemployment insurance laws
and thus exclude some firms, self-employed workers, railroad employees,
agricultural workers, and some others.


   Steven J. Davis. John Haltiwanger, Scort Schuh, Small Business and Job
Creation: Dissecting the Myth and Reassessing the Facts. October 1993.


   (USDL: 93-220)


   CWC, August 1993, p.1.


   See Employment and Earnings, February 1994.


   The figures for Hispanics are from 1980 to 1992. They are for any race.


   While our statistical data undercount undocumented aliens", both the Census
of Population and Current Population Survey find sizeable numbers. The current
Immigration and Naturalization Service estimate is that in 1992 there were 3.2
million undocumented workers.

   Family and Workplace Institute, The Changing Workforce. Highlights of a
National Study, 1993, Table 3.


   The data for unemployment in this section comes largely from Employment and
Earnings, January 1994, household data annual averages, Tables 3 and 6.


   We have used the CPI deflator in these calculations. Similar results are
obtained if we use the consumption deflator from the national income accounts,
or variant CPI series.


   Measured by exchange rates, workers in these countries are higher paid than
Americans, but the exchange rates do not reflect the higher cost of living in
other countries. All purchasing power parity measures show that prices in most
other OECD countries are higher than in the U.S. at 1993 exchange rates.


   These data were presented to the Commission by the Bureau of Labor Statistics
on May 24 1993 as part of the BLS presentation of facts.


   Coverage of full-time male employees in pension plans decreased from 54
percent in 1972 to 51 percent in 1988. Because many plans often require
workers to make voluntary contributions low wage younger workers have a lower
tendency to join such plans when they are available, than other workers.


   The United Kingdom and France are exceptions to the OECD pattern, with high
decile earners earning about twice what median earners make.


    OECD Employment Outlook July 1993, Table B. Our figures are for dependent
employment. The data shows that the Spanish work more hours than Americans, but
Spain is a much lower income society.


   The data in this paragraph are largely from OECD Employment Outlook, July


   The 1986 data how 61.6 percent with less than 12 years of schooling. A change
in the survey question produced a sizeable reduction in the proportion in that


   Some of the lack of improvement in occupational health and safety injury
rates may be due to changes in reporting, as the nation recognizes new forms of
occupation-related health and safety problems.


   See. A Cost Analysis of the Department of Labor's Philadelphia ADR Pilot
Project, August 26, 1993.


   The 1994 Economic Report of the President noted that changes in the structure
of industry, measured by one-half the sum of the absolute value of shifts in the
proportion of the work force in different industries, shows no trend since 1949.
See Chart 111-15.


Employee Participation and Labor Management Cooperation in American Workplaces

1. Introduction

   Considerable change is underway in many of American's workplaces, driven in
part by international and domestic competition, technology, and workforce
 developments described in Chapter I. These external forces are interacting with
a growing recognition that achieving a high productivity/high wage economy
requires changing traditional methods of labor-management relations and the
organization of work in ways that more fully develop and utilize the skills,
knowledge, and motivation of the workforce and that share the gains produced.

   Changes are particularly visible in many large workplaces that have under-
taken restructuring in response to economic pressures, in new worksites,
industries, in organizations that have utilized these organizational principles
from their start, and in work settings where managers, employees, and union
representatives have adopted these ideas and built them into the overall fabric
of their relationships.

   Thus, since the 198Os, there has been a substantial expansion in the number
and variety of employee participation efforts and workplace committees in both
establishments governed by collective bargaining agreements and those without
union representation. These arrangements take a wide variety of forms such as:
quality circles, employee participation teams, total quality management teams,
team-based work structures with a variety of responsibilities, safety and health
committees, gain sharing plans, joint labor-management training programs,
information sharing forums, joint task forces for a variety of problems,
employee ownership programs, and worker representation on corporate boards of

   Employee involvement is also being practiced in many small workplaces where
employees and managers work together and communicate on a more informal and
personal basis.

   Yet these workplace innovations are only partially diffused across the
economy and many remain rather fragile. Some are of limited duration. Others are
subject to a variety of risks and obstacles that may limit their sustainability
 and diffusion and the benefits they can potentially deliver to the nation's
economic performance and standard of living.

   The first item in the Commission's Mission Statement recognizes both the
potential value and the partial diffusion of employee participation and
labor-management cooperation. The Commission, therefore, is asked to assess:

 "What (if any) new methods or institutions should be encouraged, or required,
to enhance workplace productivity through labor-management cooperation and
employee participation?"

   This chapter reviews the facts with respect to employee participation and
labor-management cooperation. The sections that follow report on (1) the views
of workers, managers and labor leaders, (2) the extent of employee involvement,
(3) the issues addressed in these processes, (4) the evidence on their effects
on economic outcomes, (5) their prospects for diffusion, and (6) the legal
issues they raise.

2. Views Toward Workplace Participation and Cooperation

   A variety of employees, managers, and local and national labor leaders
testified and submitted statements in support of the goal of enhancing employee
participation and worker-management cooperation.

Workers' Views and Expectations

   Both survey data and direct testimony presented to the Commission documented
that a majority of American workers want to have opportunities to participate
in decisions affecting their job, the organization of their work and their
economic future. A 1985 national survey reported that 84 percent of employees
working for organizations without an employee involvement or participation
program would like to participate in one if given the opportunity and 90 percent
of those in organizations with a plan responded that their company's program was
a "good idea."  n1

   Other surveys of blue and white collar groups conducted in the  early 1980s
found similar results. One study found over 80 percent indicated a desire for a
say about issues affecting how they did their work, and about the quality of
their work, and a majority indicated an interest in having a say about the
handling of grievances or complaints, the pace of work, and how technology is
used on their jobs. White collar workers  n2  in this sample expressed higher
levels of interest in participation on all these issues than blue collar

   Data from recent focus groups interviews carried out by the Princeton Survey
Research Center report that hourly workers, professional and technical
employees, and supervisors consistently stated that among the things they value
most in a job are variety, freedom to decide how to do their work without close
supervision, information and communication regarding things that affect their
work and their firm, and evidence that their employers seek, value and act on
their suggestions for improvement at their workplace. n3

   Most workers respond favorably when provided opportunities to participate at
their workplace. Ms. Deborah Wirtz, an employee at Texas Instruments who
testified at the Commission's Houston hearing, described her response to the
introduction of self-managed teams in her plant.

 "What I really feel, my honest feelings about teaming, is that my self-esteem
has improved as a person. Before teaming, you felt like you were maybe a number
that was there to produce the daily quota that was expected of you, and you left
and went home. Now we feel like we have the capability of making decisions and
being heard."

   The changing workforce characteristics reviewed in Chapter I imply that the
desire for a voice at the workplace has been growing gradually over time and
will continue to increase in the future, since interest in participation tends
to rise with education. Rosabeth Kanter summarized these long term trends:

  "A more educated work force -- as ours has become -- is simultaneously a more
critical, questioning, and demanding work force, and a potentially more
frustrated one if expectations are not met. n4

   Some employees remain highly skeptical and fearful of cooperative programs
developed by managers in the absence of an independent union to represent
workers' interests. The following statement of Labor Notes, a publication of
rank and file union activists, expresses these sentiments:

 "We have deep skepticism toward the notion that workers and management have
much in common in dealing with workplace problems. They compete with each other
to divide the economic pie, much as companies compete for market share. The idea
that they share interests has historically been used to defeat or preempt
unions. . .

   Unions remain the only genuine independent employee organizations capable of
fighting for the interests of workers on the job."  n5

Managers and Labor Leaders

   A number of managers testified that employee participation and
worker-management partnerships are not only desired by workers but essential to
being competitive in their markets and industries. Bruce Carswell, Senior Vice
President of GTE and Chairman of the Labor Policy Association stated:

 "The message that we would like to leave with you today is that our nation can
no longer afford to view the employment relationship as American workers and
management competing with one another in a zero-sum game. Instead, we need to
create a partnership among empowered employees, government, industry, and unions
such that everyone is playing on the same team in pursuit of mutually beneficial

 We hope that the Commission has been given a sense of the sea change that has
occurred in human resource practice during the past fifteen years and what the
implications of that change should be for policy makers . . . Over the long term
 the new high performance American workplace will be better able to provide-job
security for American employees and a more satisfying work environment . . . The
Commission could make an extremely useful contribution to the development of
employment policy if the final report were to communicate to the American public
the depth of the change in the workplace environment."

   At the Houston hearing, Mr. Charles Nielson, Vice President for Human
Resources at Texas Instruments, put it this way:

 ". . . teaming, effective participation of people in the business process, is
an integral part of our survival. I somehow worry that as persons like myself
talk, what you hear is a nice-to-do program. Something that's intellectually
interesting. Something that probably is appealing to people and makes them feel
good. But I'm afraid somehow we're not communicating that it really is the one
hope for us to survive in the [competitive] environment I've just described."

   The AFL-CIO issued a report, The New American Workplace: A Labor Perspective,
that outlines its support for labor-management partnerships for designing new
models of work organization:

 "It is incumbent on unions to take the initiative instimulating, sustaining,
and institutionalizing a new system of work organization based upon full and
equal labor-management partnerships. Such a system presupposes, of course,
partners prepared to deal with each other as equals in an atmosphere of mutual
recognition and respect."  n6

   Labor leaders appearing before the Commission pointed out that unions provide
employees an independent source of power in employee participation. Union
management partenrships are more likely to address a wide range of issues of
interest to both employees and managers and lead to a sharing of decision-making
at all levels of the enterprise. The labor movement believes that the long run
objectives of employee participation should be to enhance both economic
performance and industrial democracy by providing employees a  voice at all
levels of decision-making. The AFL-CIO report stated:

 "It is unlikely in the extreme that . . . management-led programs of employee
involvement or "empowerment" can sustain themselves over the long term. It is
certain that such systems cannot meet the full range of needs of working men and

   The Collective Bargaining Forum, a group of corporate chief executive
officers and international union presidents, has issued two reports in recent
years presenting its vision of the type of labor-management partnership needed
to pursue the twin goals of competitiveness and a rising standard of living.
(See Exhibit II-1.)

   Ms. Theresa Roche, Vice President of Human Resources for Grass Valley Group,
a medium sized (900 employees) high technology company that designs and produces
video equipment, testified at the San Jose hearings that decentralization of
traditional managerial responsibilities and the need to train and empower
workers to make decisions are especially critical to success in rapidly changing
technology driven industries. Ms. Reche, along with several of her colleagues
from other high technology organizations, questioned the relevance of
traditional labels of "worker" and "manager" or "exempt" and "nonexempt"
employees to their industries and organizations:

 "Organizations' continued success require both managers and employees to play
profoundly different roles. Employees must now assume many of the
responsibilities that once belonged only to managers. They must be better able
to direct themselves, be flexible, help make sound decisions and take more
accountability for their work and its results."

   A large number of employees, managers and union representatives believe that
employee participation, work redesign, and worker-management cooperation are
essential to being competitive in their industries and markets and to producing
the results workers expect from their jobs.

    Some employees, however, are skeptical of participation processes in which
workers do not have an independent voice or means to represent their interests.

   Labor leaders believe the long run objectives of employee participation
should be to enhance both enterprise competitiveness and employee voice at all
levels of decisionmaking. They believe these goals are unlikely to be achieved
unless employees have independent representation.


Promoting Joint Approaches to Competitiveness the Collective Bargaining Forum

   To address the competitive challenge . . . will require a long run outlook
and a sustained commitment to joint work among management, labor, and government
representatives. Such a commitment also implies:

   Adoption of business strategies that can support a high productivity/high
wage employment relationship . . . In turn, it implies a responsibility on the
part of labor to accept the need for continual improvement in productivity, and
to commit its energies to the quality of the good and services produced.

   [To achieve these goals requires] expansion of and sustained commitment to
joint iabor-management activities, such as training, quality improvement, work
redesign, appropriate kinds of cost containment, and related activities that are
tailored to the specific needs and competitive conditions of individual
enterprises. This implies . . . an ongoing process of adjustment to changing
technology and new work design concepts. SOURCE: Collective Bargaining Forum,
New Directions for Labor and Management, U.S. Department of Labor, 1988.

3. Extent of Employee Participation and Committees

Surveys of Adoption Rates

   There is no entirely reliable census of workplace employee involvement
processes, although several recent surveys provide estimates of  the current
level of activity.

   Surveys in 1987 and 1990 of the Fortune 1000 firms by the General Accounting
Office (GAO) and the University of Southern California  n7  report that 86
percent of these large firms in the manufacturing and service sectors report
some experience with employee involvement in their firms. This is an increase
from 70 percent in 1987.

   Twenty percent of the firms reported employee participation processes that
cover a majority of employees in the firm.

   The results of a 1991 survey conducted by Paul Osterman of 691 establishments
with 50 or more employees  n8  are summarized in Exhibit 11-2. (See page 35.) It
found that 64 percent of these establishments have one or more employee
involvement activities covering 50 percent or more of their "core" employees.
(Core employees were defined as non-managerial blue or white collar workers
directly involved in the production and/or delivery of the establishment's
products and services.)

                              Exhibit II-2
                 Work Practices in Establishments with
                         50 or More Employees
                (50 Percent or Greater Penetration)
                                                     Blue Collar
                           Total Sample             Manufacturing
                           (in percent)             (in percent)
One Practice Only              27.1                     24.1
Teams  Only                    14.4                      5.5
Job Rotation Only               7.0                     11.7
Quality Circles Only            2.6                      4.5
Two or Three Practices
Combined                       31.8                     36.9
All Four Practices Combined     4.8                      5.0
None of these Practices        33.0                     33.3
Source: Paul Osterman, "How Common is  Workplace
Transformation and Who Adopts it?" Industrial and Labor Relations  Review,
Vol. 47, January 1994, p. 177.

   This survey showed that these practices are often combined in various ways,
thus Osterman defined significant involvement as having a majority of core
 employees covered by two or more forms of workplace innovation. Just over
one-third of these establishments met this criterion. This survey documented a
wide variety of different involvement plans in existence today.

   The survey found no significant differences in the frequency of these
practices between union and nonunion establishments.

   In a 1993 survey of 51 large firms, Organization Resources Counselors
reported that between 80 and 91 percent of these firms had committees dealing
with either safety and health, productivity, or quality.  n9  These companies
reported that approximately 25 percent of their employees participated in teams
of one form or another.

   A survey of predominantly large manufacturing firms conducted by the Labor
Policy Association in cooperation with several other industry groups, estimated
that 31 percent of the employees in these firms were involved in programs
classified as decision-making. Higher percentages were reported to be covered by
employee involvement programs that involved collaboration, soliciting ideas, and
information sharing (49, 69, and 71 percent, respectively). n10

   A 1985 survey of a nationally representative sample of the workforce
conducted by Sirota and Alper Associates and Business Associates and Business
Week found that 36 percent of the respondents worked in organizations that have
some type of employee involvement program and 23 percent of the workforce had
been personally involved in some form' of employee participation.  n11

   There is no agreed-upon standard for judging which, or what combination, of
these different workplace practices produce results that would would warrant the
popular label of a "high. performance" workplace. Most experts do agree,
consistent with the avail- able empirical evidence, that the value of these
practices is realized best when combined into a total organizational system that
rests on a foundation of trust and combines employee participation, information
sharing, and work organization flexibility with reinforcing human  resource
practices such as a commitment to training and development, gain sharing,
employment security, and where a union is present, a full' partnership between
union leaders and management.

   When judged by this systemic standard, estimates of the extent of diffusion
of "high performance" employment systems are considerably lower. The Commission
on the Skills of the American Workforce and Jerome Resow, President of the Work
in America Institute, each estimate that perhaps less than five percent of
American workplaces presently fit this description.

   A substantial majority of larger American employers report using some forms
of employee participation in their organizations. Many small firms have more
informal processes for employee participation- The best available-estimates
suggest that between one-fifth and one-third of the workforce is covered by some
form of employee participation-

   A stall fraction of these efforts represent the systemic forms of
participation consistent with the label of a "high performance workplace."

Studies of Survival Rates

   Despite the widespread interest in employee participation and cooperative
arrangements, the record shows that some employee participation efforts do not
survive long enough to have significant positive economic effects. The Osterman
survey showed, for example, that only about one- third of these establishments
reported their employee involvement efforts have been in place for five years or
more. Edward Lawler and Susan Mohrman report over half of the quality circles
begun in the early 1980s failed to survive.  n12  Robert Drago found a similar
result for quality circles.  n13  His results showed a higher survival rate for
quality circles in union than nonunion establishments, a finding replicated in a
more recent study of labor-management committees in machine shops.  n14

    A number of studies have shown that employee involvement is more likely to
survive over time if the effort expands beyond the narrow confines of a single
program or process and if human resource practices such as compensation,
training, employment security, and managerial rewards systems are modified to
support these efforts. Where a union is present survival is increased
significantly if the process is governed by a joint partnership between the
union and management.  n15

   Some employee participation efforts are short lived. Others have been
sustained over a long enough time to demonstrate their value.

   Those most likely to be sustained over time are ones in which the parties
broaden the scope of issues addressed, and integrate them with the human
resource policies of the organization. Those in unionized settings in which the
union is involved as a joint partner with management are particularly likely to

4. Key Features of Workplace Participation Processes

   Surveys cannot tell us what these participatory processes actually do, the
mix of employees and managers involved in these efforts, how participants are
selected, or whether they speak only for themselves or implicitly represent
others in the organization. These issues are of special relevance to the
Commission since they relate to the legal status of employee participation.

   The Commission received considerable testimony on these issues in its
national and regional hearings. Some of this is presented to illustrate the
range of variation in contemporary practice with respect to these issues.

   The examples presented below begin with efforts originally designed to focus
on productivity and quality improvement issues, and then move on to examples of
self-managing work teams and broader work management committees, partnerships
and employee ownership arrangements. Any effort to categorize  these arrangements
is rather artificial, however, since as the examples will illustrate, they tend
to evolve and change over time in ways that are not well captured by their
popular labels.

   The examples are presented in this sequence, however, since labor law
attempts to draw a distinction between processes that deal with production or
quality issues, and those that involve wages, hours, or other terms and
conditions of employment, and between processes in which employees communicate
information to management versus those that involve consultation, shared
decision-making, and"or representation.

Production and Quality Centered Initiatives

   Many participation efforts focus on quality or productivity improvement. For
example, a team from Federal Express composed of both management and
non-management employees described how it changed the way packages are sorted in
its Memphis distribution center and thereby improved the company's on-time
delivery performance, reduced staffing required for this operation from 150 to
80 employees and achieved annual savings of approximately $ 702,000.

   At the New United Motors Manufacturing (NUMMI) operations in California, team
members are trained to use a six-step problem-solving process. This process
requires team members to explore potential root causes associated with, among
other things, the way work is organized, how individuals perform their work, the
staffing and scheduling of activities, and other per 'sonnel and employment
practices. Toyota's manufacturing facilities in Kentucky follow similar
training, problem-solving, and kaizen (continuous improvement) processes.

   The type of root cause analysis described at NUMMI and Toyota is central to
most Total Quality Management (TQM) processes that have become increasingly
popular in U.S. industry.

   In Atlanta, Bell South and representatives from the  Communication Workers of
America described how their quality of working life program that carried over
from the early 1980s later embraced TQM practices, and has evolved to the point
where employees and workers meet with key customers to demonstrate their
commitment to total customer satisfaction. Their program, like nearly all the
others described to the Commission, entails a strong commitment to training in
problem-solving, statistical methods, and related quality practices.

   In Louisville, the Commission heard about quality improvement teams at
Alliant Health Care Systems. Alliant relies heavily on use of temporary task
force teams to solve specific problems that cut across traditional functional
and/or hierarchical groups. In response to a question Mr. Rodney Wolford, former
CEO of Alliant, described the changing membership and structure of these task

 "When it comes to specific projects or specific improvement efforts, those are
typically cross-functional teams made up of front-line workers, with some
involvement by management, and certainly a responsibility of management to
monitor the process and to be involved to some degree, but not necessarily to
run the process.

 Often-time those teams may even be chaired by front-line workers who have
undergone specific training to be able to manage the team process. In terms of
who goes on those teams, it's simply what makes sense representatives of all the
various functions that may be involved or have some ownership accountability to
any aspect of the process."

   In San Jose, the Commission heard testimony from small and large high
technology firms working to embed participatory principles into their
organizational cultures through a wide variety of practices. Again, a common
practice in these firms is to use temporary task forces or teams made up of a
diverse cross section or a "vertical slice" of employees and  managers. Ms.
Deborah Barber, Vice President of Human Resources at Quantum Corporation,
described the fluid nature of assignments in her corporation:

 "High performance groups are assembled to address specific needs, whether the
need is in design or manufacturing or sales and marketing or distribution, and
since many of these high performance work groups are associated with the
management of a particular process or product, they need to be constantly
reconfigured and reassembled as the products and processes change."

Exhibit II-3

Self-Managed Teams at D.D. Williamson and Company

   We have eliminated all supervisory positions and we have gone to self-managed
work teams. Our Louisville plant runs 24 hours a day, five days per week. Shift
leaders and teams were chosen by the associated themselves in something similar
to a baseball draft. And team leaders rotate on a semi-annual basis. Along with
the increase in responsibility, there's an extensive training. For the most,
associates can now do several tasks . . . The work teams are also responsible
for their own hiring and firing. We have some base education and personality
screens that we use but after that the team does the interviewing and the team
does the hiring.

   Two years ago. . . . we began a program to see that all associates visit our
customers. And many times it required an overnight stay.

   While the survey evidence suggests that formal participation arrangements are
more prevalent in large than small establishments, the Commission heard
testimony from small employers about the diverse and informal ways these
principles are applied in their organizations. For example, Ms. Cheryl Womack,
Chief Executive Officer of VCW, Inc., a 75-person insurance company in Kansas
City, described a wide range of informal communications, rewards, quarterly
meetings, and advisory committees in her Finn. She stressed  particularly, the
importance of the communications that flow out of breakfast meetings company
officers hold each month with the winner of their employee of the month"

   Both temporary and ongoing production an-or quality focused efforts often
expand over time to address issues that fall within the category of terms and
conditions of employment.

   The principles underlying TQM encourage team members to explore root causes
of problems and alternative solutions that involve human resource practices and

   Quality improvement teams often mix together individuals from different
hierarchical levels and functional groups in ways designed to overcome
traditional status distinctions and job definitions.

   Over time it becomes increasingly difficult if not impossible to draw a line
between production issues and employment practices, and among "employees,"
"supervisors, and "managers "in the most successful productivity and quality
improvement efforts.

Self-Managed Work Teams

   As illustrated above, some employee participation processes that begin as
production or quality focused problem-solving groups evolve over time to take on
issues and responsibilities that in the past would have been handled by a
supervisor or manager. In self-managed work teams a number of duties
traditionally reserved to managers are explicitly delegated to team members. At
the Louisville hearing, for example, Mr. Ted Nixon, CEO of D.D. Williamson and
Company in Louisville, a food processing manufacturer of caramel colored
products with 105 employees, described the responsibilities of the self-managed
work teams in his company. (See Exhibit II-3.)

   Self-managed work teams take on responsibilities traditionally performed by
supervisors and managers and may deal with a variety of issues  that affect
wages, hours, and other terms and conditions of employment

Workplace Committees and Partnerships

   A variety of firms and labor organizations described their efforts as
full-fledged partnerships and committee structures. Some of these focus on
specific issues such as safety and health while others address a wide range of
issues and span multiple levels of the organization.

Safety and Health Committees

   Among the most longstanding and widespread types of issue specific committees
found in American workplaces are those that focus on monitoring and improving
workplace health and safety. According to the 1993 survey of thee National
Safety Council, workplace safety and health committees are found in 75 percent
of establishments with 50 or more employees and in 31 percent of establishments
with less than 50 employees. This study also reported that safety and health
committees exist in 89 percent of unionized establishments and 56 percent of
nonunion establishments.  n16  Under collective bargaining, union safety and
health committees often have access to union-provided professional experts to
assist in these matters. The role of committees or other approaches to employee
participation in safety and health will be discussed in more detail in Chapter

Multi-Employer and Union Committees

   A distinctive feature of collective bargaining in some industries or regions
has been the creation of multi-employer-labor union committees. These committees
address a variety of workplace problems that can be more effectively handled on
a multi-employer level than within an individual enterprise. Such committees
have existed since the earliest days of collective bargaining and have been
concerned with issues such as training, health and safety, grievance handling,
and productivity. Examples have occurred in industries such as anthracite
mining, electrical contracting, men's and women's clothing, retail  food stores,
and longshoring.

Broad-ranging Committees

   In a number of union and nonunion firms, employee participation and labor-
management cooperation processes take on a variety of issues and are overseen by
one or more committees.

   Ford Motor and the UAW have had an employee involvement and labor-management
cooperation program in place since 1979. (See Exhibit 11-4 page 58) 'They
summarize the key lessons learned over this period as follows:

   The Ford-UAW experience has demonstrated two especially significant lessons
about joint programs. The first is that leadership, trust and funding are
critical ingredients--not structure. The second is that an evolutionary
approach, progressing from fairly simple applications to those that are more
comprehensive and integrated, is important to create and to sustain large- scale

Peter Pestillo added another point:

   "If management wants unions to help make companies more competitive and to be
an ally in the struggle with foreign competitors, management must accept the
validity of employee chosen unions as a legitimate institution in our society.
Management must accept this union role, must honor it, must value it, must work
with it. A strong alliance requires two strong members. There should be no
quibbling about that."

   The National Steel Company and the United Steelworkers described the
evolution of their partnership as one that now goes from the shop floor to the
corporate board room. Steelworkers' former president Lynn Williams commented on
how his union extended the approach used at National Steel to other major steel
companies in their 1993 negotiations:

   "We have in our minds closed the circle by including board membership. We're
not taking over the boards of these companies . . . but we are  going to have one
person on each of these boards there to represent the general interest of the
worker constituency. [w]e'll be functioning at every level of the company."

   AT & T and the CWA described a similar integrated partnership they call the
"Workplace of the Future" that is built on extensive employee involvement and
team systems at the workplace, consultation at the business unit level where
long term competitive issues are discussed, and a corporate-wide human resource
council that includes labor, management, and outside: experts in discussion of
long range plans.

   William Ketchum, Vice President of AT & T, described Workplace of the Future
as a "framework 'for change which includes unions as joint partners in planning
and implementing change based on mutual respect and mutual gain." Morton Bahr,
the president of the Communication Workers of America, testified that "the
critical element of success" is that for workers to effectively participate in
workplace decision-making, front-line workers must first have their own
organizations, educated leadership and significant resources in order to have
the confidence and preparation to participate as equals and without fear.

   At the Commission's Michigan hearing, Miller Brewing Company and
representatives of the UAW described how they jointly planned and designed a
team-based highly participative work system in a new plant. The management
system of this plant includes union representatives at all levels of the
organization. (See page 58 for Exhibit 114.)

   Several nonunion firms described enterprise-wide councils or committees in
their organizations. In Michigan, a team from Donnelly Corporation described
their longstanding (established in the 1950s) Scanlon Plan that has since
expanded to include an employee council that not only reviews employee
suggestions but consults on the full range of human resource policies.
 Donnelly's system is described in Exhibit 11-5. Another Scanlon Plan that has
been in place for over thirty years at Herman Miller Corporation is also
described in Exhibit 11-5. (See page 59)

   At the Boston hearing, the Commission heard accounts of the events that led
to the termination of a longstanding and broad ranging employee committee at the
Polaroid Corporation.

   Mr. MacAllister Booth, the Chief Executive Officer of Polaroid Corporation,
de 'scribed his frustration with his decision to disband an elected employee
committee that had been in place since 1949 after an employee filed charges with
the Department of Labor over the legality of the company's procedures for
electing the committee's officers. The elected representatives of this committee
discussed the full range of personnel practices and policies at Polaroid.
Subsequently, a charge also was filed with and a complaint issued by the
National Labor Relations Board finding the committee violated Section 8(a)(2) of
the National Labor Relations Act banning company dominated organizations.

   Following the Labor Department charge, and in anticipation of the 8(a)(2)
charge, the company disbanded the committee and in its place Polaroid
established an Employee Ownership Influence Council which serves as a "focus up"
for communications between employees and managers. This new entity has
considerably less power to review and consult on employment policies and
practices than the disbanded employee committee. This case raises the issues of
what companies can do within the law to establish committees of workers to
resolve problems. 'The mutual frustrations of Mr. Booth and Ms. Charla Scivally,
the employee who filed the complaint, are summarized in Exhibit 11-6. (See page

Consultation in Japan

   Labor-management consultation forums exist in over 70 percent of Japanese
 firms and establishments. in contrast to European works councils, these operate
in the absence of any formal statutory obligation. Instead, they have been
promoted by the Japan Productivity Center as a means for, among other things,
discussing the relevance of macro economic trends and performance to the wage
and other policies of specific enterprises. Professor Haruo Shimado from Keio
University in Japan indicated that consultation now covers a wide variety of
issues ranging from safety and health to new technology and investment plans and
is viewed by both employer and worker representatives as an essential component
of Japan's industrial relations system.

Australian Strategies for Workplace Reform

   In the mid-1980s the Australian Conferation of Trade Unions (ACTU) conducted
an international study that produced a new strategy promoting union mergers and
consolidations, work restructuring, commitment to training and development,
decentralization of wage setting and collective bargaining, and labor-management

   Between 1987 and 1991 Australia's Industrial Relations Commission issued
decisions calling for enterprise level bargaining over work restructuring and
pay systems that reward skill attainment and productivity improvement and
labor-management consultation. In 1991 the federal government initiated a "Best
Practices" program that provides grants and awards to firms and unions to
promote workplace reforms. In 1993 the requirement for consultation was
enacted into federal law.

   The Australian approach involves legal requirements for safety and health
committees, incentives and recommendations for workplace reforms, enterprise
wage agreements, and labor-management consultation in return for greater
flexibility and decentralization in wage determination, and a "Best Practices"
recognition and grant program. These reforms have produced the following results
to date:

    o Approximately 40 percent of Australian workplaces, covering 65 percent of
the workforce are covered by safety and health committees;

   o Quality management techniques that rely on employee involvement are found
in 26 percent of the workplaces;

   o The greatest amount of workplace reform has occurred in workplaces with an
active union presence; and

   o Managers report consultation has resulted in improvements in
management-employee relations in 90 percent of the workplaces, improvement in
the process of introducing change in 81 percent, and improvements in
productivity in 70 percent.

Works Councils in Europe

   Works councils are elected bodies of employees who meet regularly with
management to discuss establishment level problems. Works councils are
widespread in Europe because most countries require them by law, if employees
indicate an interest in creating such a body. In Germany, for example, if
employees want one, an establishment with five or more employees is required to
have a council that is elected to represent the entire workforce in the
establishment. This does not mean that all workplaces have them, for in many
smaller enterprises, employees and managers choose less formal modes of
communication and consultation. The prime difference between the U.S. and
Germany in this respect is that workers can "trigger" the formation of councils.

   Exhibit 11-7 summarizes some of the key features of works councils presented
to the Commission at its meeting on international experiences. (See page 61)

   Some workplace committees and labor-management partnerships address a wide
range of employment and managerial issues while others are focused on specific
topics such as workplace health and safety.

   In some cases these structures cover individual establishments. Others are
enterprise-wide and few cover an entire sector in a community or  nationally.

   Establishment or enterprise-wide committees that cover the full spectrum of
work-place issues are more prevalent in unionized companies. However, examples
of such structures are found in some non-union firms as well.

   Committees in nonunion firms operate with some uncertainty over their legal

   Establishment or enterprise-wide consultative arrangements are less widely
diffused in the U.S. than in firms in Japan, Australia, or in European
countries with works council legislation.

Employee Ownership

   Employee stock ownership plans (ESOPS) have increased in recent years to the
point where they now are estimated to cover as much as 11 percent of the labor
force. While all ESOPS provide employees with a direct financial stake in the
economic performance of their enterprise, the vast majority are mainly
contingent compensation plans and do not provide any role for employees in firm
governance (beyond the voting rights associated with share ownership). Some of
these have been established to achieve the favorable tax treatment available to
such plans or to help ward off the threat of a hostile takeover.

   Other ESOPS, such as those at Lincoln Electric or the Bureau of National
Affairs, have been in existence for many years, include extensive employee
participation and a formal role for employees in the governance of the firm.
ESOPS that provide for employee participation and representation in firm
governance perform better than those that do not. The empirical evidence on the
effects of ESOPS on firm performance can be summarized as follows  n17

   1. No studies show that ESOP plans reduce productivity or profitability.

   2. Some studies show that ESOPS are associated with higher performance
compared to non-ESOP firms or compared to the same firms prior to  the
introduction of the ESOP. Some of these estimated effects, however, are not
significant and are sensitive to changes in the statistical modes and tests

   3. ESOPS are more likely to be associated with higher performance when
combined with participation of employees at the workplace than when there is
only representation of employees on the board of directors.

   ESOPS have grown in recent years. While some include a role for employees in
organizational governance an/or workplace participation, many do not. Those that
include employee participation appear to perform better than those that do not.

General Patterns

   These are only some of the examples described in Commission hearings and in
the materials submitted to the Commission. This evidence suggests the following
general conclusions regarding what these committees and employee participation
processes do and who is involved in them.

   1. There is no single dominant form of employee participation today. While
many efforts began with a focus on productivity and or quality improvement, most
of those that endure over time go on to address other workplace issues as well.
Some address a variety of terms and conditions of employment such as training,
safety and health, communications and information sharing, employee selection,
performance evaluation, work assignments"rotation, job descriptions and
procedures, staffing levels, work hours and scheduling, overtime, pay system
design and administration, discipline, and grievance resolution. Some deal with
issues traditionally reserved to management and supervision such as customer
service, new plant design, design and implementation of new technologies,
equipment, or products, and long-range human resource planning.

   2. Some workplace participation efforts are ongoing while others are
temporary task forces established to solve specific problems and then disbanded
 or reconstituted for other purposes. In some cases, employees participate in
these processes while continuing working in their regular jobs or participation
becomes a normal part of the job itself. In other cases employees may be asked
temporarily to serve as facilitators or team leaders in a fashion traditionally
reserved for managers or supervisors. In some cases their primary co-workers are
peers doing similar work while at other times they work in cross-functional task
forces that mix together hourly employees with technicians, professionals, and
managers. Sometimes the work may be on-site during regular work hours but in
cases where customer service or external bench-marking are involved, it may
require travel and irregular hours.

   3. Few of these efforts remain constant over time. Those that endure over
time often expand or modify the issues included and the personnel involved.
Indeed, the lines separating production, employment, and managerial issues are
often impossible to draw or to enforce in the most successful programs.

   4. Participants are chosen for these processes in various ways. In some cases
individuals volunteer to participate in problem-solving teams. In other cases
management selects team or committee members, however, there are also some cases
where employees elect representatives. In union-management committees it is
customary for the union leaders to arrange for the selection or for unions to
elect their representatives.

   5. The line between communication and shared decision-making is difficult to
draw in these processes. In some cases decision-making authority is delegated to
the teams; in others committees make suggestions that are advisory to
management, and in other cases, committees consisting of employees and managers
make decisions and allocate resources. Regardless of their formal authority,
workers and managers tend to remain committed to these arrangements only if they
believe they are exerting a constructive influence on the issues involved.

    6. These features all make it difficult to draw a clear distinction between
"exempt" and "nonexempt" employees as defined in various labor and employment
laws and regulations.

5. The Effects of Employee Participation on Economic Outcomes

   The Commission received considerable testimony on the effects of employee
participation efforts and reviewed the case studies and quantitative research on
these efforts. The evidence to date suggests that many programs improve the
quality of work life and in some cases raise productivity and product quality.
More specifically:

   1. One by-product of employee participation is to increase investment in
education and training of the workforce. This point was made in almost every
case described to the Commission. This is also consistent with the evidence in
the Lawler, et. al., Osterman, ORC, and other studies.

   2. While most of those testifying about their efforts reported their programs
resulted in improved productivity, quality, or some other indicators of economic
performance, the empirical studies on this issue completed to date show mixed

   Some of these efforts fall to survive long enough to produce significant
economic gains. Studies that have attempted to isolate the individual effects of
single programs such as quality circles or teams tend to find small or
insignificant effects on performance.  n18  One study found that union companies
with joint committees use significantly less production time per unit of output
than nonunion companies with such committees.  n19  Other studies have suggested
that employee involvement or gain sharing under collective bargaining has
greater effects when the union supports the effort and jointly administers the
program.  n20

   The largest positive effects on economic performance have been found in
studies that measure the combined effects of workplace reforms (i.e., where
 participation is combined with changes in employment practices, manufacturing
policies and management structures and decision-making procedures).

   Studies examining these systemic forms of workplace change at Xerox, in an
international sample of auto assembly plans, and in a sample of plans in the
steel industry all conclude that the more systemic the involvement efforts, the
greater the economic benefits.  n21

   Another exhaustive review of all the studies of employee participation and
work redesign that were carried out since the 1970s reached a similar conclusion
with respect to the effects of participation on various economic and
psychological results.

   A study of the effects of human resource management innovation on profits and
returns to shareholders found similar results, namely, the more comprehensive
the human resource innovations, the greater their economic effects.  n22

   Thus, broad based workplace innovations that remain in place over an extended
period of time and are integrated into a system's approach to workplace
innovation and change produce the most improvements in economic performance.

   3. The effect of these efforts on employment security is limited, at best.
Many of the organizations that have initiated these efforts did so in response
to an economic crisis so it is difficult to determine what would have happened
to job growth or loss in the absence of these efforts. But clearly, employee
participation or workplace committees alone do not necessarily produce new jobs.
However, we did receive testimony from a number of people indicating that market
share improvements resulted that created or maintained jobs, and from others
that new investment was authorized because of the improved relationships and
economic effects of these programs. Phillip Morris, Saturn Corporation, Ceiba
Gigy, Miller Brewing Company, and others were all cited as cases where new jobs
 were created as a direct result of cooperative efforts.

6. Will Contemporary, Efforts at Employee Participation and Cooperation be
Sustained and Diffuse Across the Economy?

   "If these efforts work so well, why aren't they adopted more widely? Do they
constitute a real change in work relations or another management fad?"

   These are big questions facing this Commission and others concerned with the
American Workplace. A bit of history will help explain these concerns. Earlier
Examples of Committees

   The period since the 198Os is not the first time American industry
experienced an increase in the use of worker-management committees. Indeed,
worker-management cooperation has ebbed and flowed at various points in history
both under collective bargaining and nonunion workplaces.

   In earlier years these arrangements were often called "employee
representation plans," "works councils," or "shop commit- tees." Among the
earliest of' these works councils, outside of collective bargaining, was one
established at the Filene's store in Boston in 1898. Employee committees were
elected and a board of arbitration heard any matter brought by an employee. The
employees' association owned a large block of company stock and nominated
persons to the Company board of directors. n23

   Historically, employee representation and participation plans, outside of
unions, have involved in varying degrees three themes: more efficient production
and higher quality; workplace democratic values and participation; and
discouragement of "outside" labor organizations.

   During World War I the National War Labor Board required the establishment of
shop committees where unions did not exist. The American Federation of Labor
initially viewed these committees as a possible step in the evolution of unions.
In the post-war period of conflict, however, the A- stated at its 1919
   "We heartily condemn all such company unions and advise our membership to
have nothing to do with them; we demand the right to bargain collectively
through the only kind of organization fitted for this purpose, the trade

   Employee representation plans and shop committees, outside of collective bar-
gaining, grew during the 192Os. By 1924 virtually all the' plans stared by the
government in World War I were abandoned or superseded by plans drawn up by
employers themselves. By 1928 there were 869 plans in 399 companies with 1.5
million employees. The depression after 1929 eliminated many of these plans
except in the largest companies. In 1933 and 1934 employee representation plans
expanded unions. In the post-war period of conflict, however, the AFL stated at
its 1919 convention:

   "We heartily condemn all such company unions and advise our membership to
have nothing to do with them; we demand the right to bargain collectively
through the only kind of organization fitted for this purpose, the trade

   As will be described in more detail later, employer dominated committees or
"company unions" were outlawed by the National Labor Relations Act in 1935 and
by the 1934 amendments to the Railway Labor Act.

   Labor-management committees devoted 'to workplace problems under collective
bargaining also have a long history. Instances of labor-management cooperation
in the 1920s and 1930s were most noteworthy in the men's and women's garment
industries on various railroads such as the Chesapeake and Ohio and Baltimore
and Ohio, and in the Naumkeag Steam Cotton Company.  n24  Beyond these
cooperative programs addressing costs and competitive conditions, many
collective bargaining relationships historically included provisions for
cooperative activities on a wide range of workplace and industry issues such
 as safety, quality, and training.

   Most of these examples from earlier periods took the form of indirect
participation or representation (i.e., they involved workers selected by
management or elected by employees to represent them in consultations or
negotiations with management over a variety of enterprise issues). Few were as
focused on direct employee participation and work redesign as are contemporary

   This history adds considerable controversy and concern to current debates
over employee participation and labor-management cooperation.  n25  Some critics
believe that today's participation efforts are in some ways an effort by
employers to return to the past whereby weak forms of management controlled
participation and representation are substituted for independent forms of worker
voice. Some skeptics also believe that the changes occurring at the workplace
today are merely another in a long history of temporary fads that will ebb and
flow as did past episodes of labor-management cooperation.

   History tells us that labor-management cooperation in the U.S. tends to
periodically ebb and flow. It is hard to sustain in the American environment and
institutional setting, and often fails to diffuse widely acre the economy.

Obstacles to Diffusion of Contemporary Practices

   If American history indicates that sustaining and diffusing cooperation is
difficult, and the current data suggest that participation is now partially
diffused, the logical question becomes:

   "What will influence the staying power and diffusion of contemporary forms of
employee participation and worker-management cooperation?"

   A number of managers testified that market pressures will force firms to
adopt these practices.

   Employee participation is more widespread in industries exposed to
international and domestic competition than in industries with  less competition.
 n26  However, within all industries, a considerable number of firms and
employees do not have any significant amount of employee participation or
workplace committees. Once the effects of product and labor market competition
are controlled, the evidence suggests that size of firm, managerial values, the
type of competitive strategies adopted by the firm, the relative influence of
human resource considerations in top management decision-making, and in
unionized settings, the extent to which the union is involved as a joint
partner, all influence whether employee participation will be adopted and
sustained over time.  n27  Thus, managers, and in collective bargaining
relationships, managers and union leaders, have considerable discretion over
whether or not to initiate and sustain these workplace innovations.

   While there is no clear consensus on what keeps workplace innovations from
spreading more widely, some of the most frequently mentioned factors are
summarized below in order to stimulate further discussion on this vital

Lack of Trust

   Workers must trust management to use the fruits of worker participation to
benefit employees as well as shareholders.

   Data obtained in a series of recent focus group interviews conducted by the
Princeton Survey Research Center provides insights into the sources of employee
skepticism. Consistent with the evidence on 'workers views summarized earlier,
most of the employees in these focus groups responded positively to the idea of
employee participation around quality and general organizational improvement.
Moreover, many examples of successful quality improvement programs were cited
and evaluated favorably by the focus group participants. But many also noted
that too often in their experience top management fails to follow through and
stay committed to these efforts. Suggestions are not taken  seriously or
implemented, or the initial commitment to TQM fades as customer pressures to
implement these programs fade. Those with such experiences expressed
considerable distrust of their managers. These interviews suggest that some
employees view these initiatives with a rather skeptical eye based on their past
and current experiences.

   For workers the biggest fear is that employee participation and productivity
improvement will result in the loss of their jobs. At the San Jose hearings, Mr.
Romie Manan, an employee of National Semiconductor, told of how he and his
fellow employees were bitter about being laid off after contributing ideas to
improve productivity of his operations. The company was now planning to transfer
this work to a new plant in another state:

   "The company claims that these teams give us a voice in running the plant and
a place where we can talk about our problems. In reality, however, in these
groups, all the company ever wants to talk about are ways to make National more
productive, more efficient, and more profitable.

   Over the past seven or eight years, our company has shifted production from
our plant to lower wage plants in Arlington, Texas and Portland, Maine.
Thousands of my fellow workers on the fab lines have lost their jobs in this
process. I will lose mine too, next week after working many years in that

   Some middle level managers, first-line supervisors, and workers also are
skeptical of management's motives or fear that these initiatives are just
another passing managerial fad. One survey of middle level managers reported
that 72 percent of these managers felt employee involvement was good for their
company, 60 percent felt it was good for rank and file employees, but only 31
percent felt it was good for them.  n28

   Some union leaders distrust managers' motives because they see employee
 participation initiatives as union avoidance techniques. This distrust has deep
historical roots. As noted earlier, union avoidance has historically been one of
several factors motivating management to implement workplace committees. Union
avoidance has also been documented as one, but not the sole, motivation for some
of the workplace innovations introduced by nonunion employers in the current
period as well.  n29

   Union leaders are sometimes asked to support and participate in cooperative
efforts in one facility at the same time an employer with multiple facilities
opposes union representation in others, often newer worksites. This has been a
major factor chilling the diffusion of employee participation in unionized
facilities and holding back

Exhibit II-8

AFL-CIO Principles for Labor-Management Partnerships

   First, we seek partnerships based on mutual recognition and respect...A
partnership requires management to accept and respect the union's right to
represent the workers in units, already organized and equally to accept and
respect the right of workers in unorganized units to join a union.

   Second, the partnerships we seek must be based on the collective bargaining
relationship. Changes in work organizations must be mutually agreed to--and not
unilaterally imposed--and must be structured so as to assure the union's ability
to bargain collectively on behalf of the workers it represents on an ongoing

   Third, the partnerships must be founded on the principle of equality. In
concrete terms, this means that unions and management must have an equal role in
the development and implementation of new work systems.

   Fourth, the partnership must be dedicated to advancing certain agreed-upon
goals reflecting the parties' mutual interests. labor leaders from  becoming more
active and visible champions of employee participation. It is not coincidental,
for example, that the union leaders who appeared before the Commission in
support of worker participation with individual companies such as AT & T,
Phillip Morris, National Steel, Scott Paper, and Miller Brewing were all cases
where the issue of union representation in new facilities had been worked out to
the parties mutual satisfaction.

   Some managers likewise distrust or are skeptical of union leaders ability to
support cooperation and employee participation, believe unions will hold
cooperation hostage to achieve other objectives, or are unwilling to share
information and power with union leaders in the belief that the company will be
"contractually" bound to continue joint decision-making in the future.

   A number of individual unions, including the Steelworkers, CWA, the
Amalgamated Clothing and Textile Workers, and the Grain Millers, have recently
publicly endorsed employee participation and labor-management partnerships as an
explicit policy and objective. As noted earlier, the AFL-CIO recently did so as
well. The principles it believes should guide these partnerships are are
summarized, in Exhibit 11-8. Whether these principles will be accepted by
employers and provide a basis for overcoming the mutual skepticism and mistrust
between some labor and management leaders are questions worthy of further

   Economic Factors. Building a trusting relationship between workers and
employers so that workers are highly motivated and contribute their ideas to the
firm constitutes a long term investment. Thus, it is no surprise that management
surveys report layoffs and downsizing are the single biggest threat to the
continuity of employee participation in industry today.  n30

   Employee participation and related workplace changes entail high start-up
costs for training, consulting services, and management and employee time away
 from normal" activities. Yet the benefits are not likely to be realized until
some time in the future and often are difficult to predict or to measure. This
often produces conflicts within management between advocates for these changes
and those who want to measure their costs and benefits of these efforts before
the benefits are realized. Indeed, the Labor Policy Association reported that
other managers were a more significant source of resistance to employee
involvement efforts than were employees or unions. Specifically, among those
reporting their efforts had been less successful than expected, 42 percent cited
management resistance, 39 cited employee resistance, and 28 percent cited union
resistance as a problem.

   Some executives report that the investment community has little knowledge or
understanding of workplace innovations. Others go a step further and argue that
pressures for short term results from the financial community coupled with the
lack of 'information on the benefits of workplace innovations and the high
up-front costs of these efforts produce a systematic under-investment in these

   In businesses where employee turnover is routinely high, where the education
of workers is low, or where the technology of jobs is such that employee
participation is unlikely to add much to economic performance, participation may
not spread no matter how much it succeeds in other areas.

   Employee Options to Initiate Participation. The vast majority of employee
participation efforts have been initiated by senior managers. Lawler et. al.,
for example, reported that the stimulus for employee involvement came from
employees in only 18 percent of the cases.  n31  In nonunion settings,
management traditionally retains control over whether to initiate, change, or
abandon employee participation. Outside of union settings, employees have little
independent means for initiating these efforts.

   Surveys consistently find that over 80 percent of American workers want a say
 in decisions affecting their jobs and how their work is performed. A recent
survey by the Gallup. Organization and the Employee Benefit' Research Institute
found that 83 percent agreed or strongly agreed that most companies do not give
workers enough say in decisions that affect them.  n32  Combining these
percentages with the number of workers not now covered by some form of
participation process, this implies that there may be as many as 40 to 50
million workers who want to participate in decisions on their job but lack the
opportunities to do so.  n33

   The focus group interviews again provide some insight on the difficulty
employees have in acting on their preferences for greater involvement. Most
participants felt that their managers would feel threatened by efforts of
employees to propose formation of groups or teams to solve problems. Some feared
retaliation. Others believed their employers would view this as an effort to
organize a union and this would put at risk the jobs or careers of leaders of
this type of effort. Others simply expressed a sense of futility about their
ability to initiate changes that did not have the active support of their
supervisors or top management. Taking the initiative to propose changes in ways
that went beyond individual efforts and involved any group or collective process
was seen by most participants as risky or futile.

Government Policy and Legal Issues

   The international evidence presented to the Commission documented that
governments can and do promote diffusion of workplace reforms in a variety of
ways. Australia and several Canadian provinces require safety and health
committees. European countries require work councils if employees express a
desire for them at their workplaces. The Japanese Productivity Center encourages
and supports labor-management consultation through its data gathering,
information dissemination, and related activities. The Australian "Best
Practices" program, along with its national 'arbitration awards, encourage
 consultation and workplace reforms.

   The U.S. Government has no program of a magnitude, visibility, or impact that
comes close to any of these international approaches.

   Labor law casts a cloud that some believe limits the scope of participation.
Seventy-six percent of the managers who responded to the Labor Policy
Association survey indicated their organization saw significant problems with
the government's views of employee involvement programs. Sixty-eight percent
indicated that the government's views either are of concern to them (45 percent)
or are making them more cautious about broadening existing or implementing new
programs (23 percent). Those most vulnerable to legal challenge are precisely
those that take a broader, more systemic approach to participation that the
evidence suggests have the greatest long term positive effects on economic

7. Legal Issues Regarding Workplace Employee Participation

   Section 8(a)(2) of the National Labor Relations Act makes it an unfair labor
practice for an employer to "dominate or interfere with the formation or
administration of any labor organization or to contribute financial or other
support to it." In turn, Section 2(s) of the Act defined "labor organization" as
"any organization of any kind, or any agency or committee or plan, in which
employees participate and which exists for the purpose, in whole or in part, of
dealing with employers concerning grievances, labor disputes, wages, rates of
pay, hours of employment, or conditions of work." The underlined phrases
indicate how broad and how important Congress intended this legal prohibition to

   The stated aim of. the NLRA is to encourage collective bargaining through
representatives of the employees' own choosing. Unions whose activities are
limited to employees at a single firm are perfectly compatible with this policy
as long as they are not created or controlled by management. The law says
 employees may not be exposed to employer-dominated structures that "deal" with
"conditions of work." Congress assumption, based on the experience with the
employee representation plans of the 1920s reviewed earlier, was that the
presence of such company-dominated unions would unduly influence employees in
their judgment about whether they needed and wanted to be represented by an
independent union.

   Only during representation election campaigns is it illegal under the NLRA
for employers to unilaterally grant benefits to employees.  n34
Management-created representation plans are illegal at any time.  n35

   By the end of World War II, Section 8(a)(2) was generally conceded to have
eliminated as a significant phenomenon the form of "company unionism" that had
developed prior to the enactment of the NLRA. Though Congress chase not to
relax this provision in the 1947 Taft-Hartley amendments to the NLRA, the
principal use of Section 8(a)(2) from the mid-1940s to the mid-1970s was to bar
employers from recognizing minority unions, to require company neutrality
between two unions seeking to represent its employees.

   In the late 1970s and early 1980s, several legal controversies arose about
the original intent and contemporary relevance of Sections 8(a)(2) and 2(5) of
the NLRA A closely-divided National Labor Relations Board found that employer
participation in grievance adjudication committees constituted performance of
management functions on behalf of their employer, rather than representation of
employees in dealing with the employer (Mercy-Memorial Hospital (NLRB), 1977)).
That same year, a unanimous Board panel concluded that a job enrichment program:
under which production employees were divided into small teams, that by
consensus divided up their own work and overtime assignments, did not constitute
illegal "dealing with" the employer about conditions of work (General Foods
(NLRB, 1977)). Meanwhile several appeals court panels, most conspicuously on the
Sixth Circuit (e.g., in Scott and Fetzer (6th Cir. 1984)), were giving narrower
 reading to the key statutory terms "labor organization" and "employer
domination." A sentiment that ran through several of these judicial opinions was
that the adversarial conception of the employment relationship that had led to
the 1935 Wagner Act was incompatible with the cooperative relations that were
necessary in the modern economic and human resource environment.

   The topic returned to the national legal agenda with the j case of 1992.
Management of Electromation, reacting to employee displeasure about the
company's new pay and attendance policies, established five committees to
address these and other issues such as pay progression, no smoking, and the
communication network. The committees were principally comprised of employees
selected by management from volunteers, along with one or two supervisors or
managers. The committees began to meet weekly to talk about these subjects.
However, after the Teamsters Union surfaced with a petition to represent the
employees, the company campaigned actively against union representation of the
workers and announced that it would not continue with the committee format until
after the NLRB-conducted election. Shortly before the election a Section 8(a)(2)
charge was filed with the NLRB along with a Section 8(a)(1) charge alleging
unlawful employer interference with the election.

   The Board scheduled the case for special oral argument at which a variety of
employer groups argued that Sections 8(a)(2) and 2(5) do not apply to these
forms of employee involvement. However, the four members of the Board were
unanimous in finding a violation of the Act in the circumstances of this case.
Though they authored four different opinions explaining their respective views
about the relevant legal principles, their decision in this case reinforced the
traditional board interpretation of this feature of the NLRA, rather than accept
a narrower view that would exclude most or all employee involvement programs
found in many workplaces today. Electromation is now on appeal to the Seventh
Circuit Court.

    Few cases have actually been brought to the NLRB on these issues. A recent
study found  n36 an average of about three such NLRB decisions a year over the
last quarter century. This may change in the future, however, given the
visibility and importance attached to the Electromation case. For these reasons,
a number of employer representatives suggested the Commission recommend major
revisions in this area of labor law. Most labor leaders believe no change in the
law is required.

   If changes to 8(a)(2) are to be considered, two related legal questions will
need to be addressed. The first reflects the same armslength adversarial
philosophy of workplace representation embodied in Section 8(a)(2). This issue
concerns exclusion of all supervisors and managers for the rights and
protections of national labor law. This statutory exclusion rests on the
assumption (see Bell Aerospace, (1974)) that employers need the undivided
loyalty of management in representing shareholder interests where these conflict
with the interests of the work force. If a more cooperative conception of the
employer-employee relationship is embodied in labor law so that representation
does not necessarily imply the existence of an adversarial relationship, it may
be necessary to reconsider whether supervisors or middle managers should be
denied the right to union representation or collective bargaining.

   The second question also involves the managerial exclusion doctrine in the
NLRA and arises out of the Supreme Courts 1980 University decision. The Court
found that university faculty were excluded from the NLRA because as a group
they influenced their employer's policies about curriculum content, teaching
staff, and so on. Up to this time, that brand of legal exclusion has been
applied principally to university faculty and other professional-level
employees. However, as noted earlier in this Chapter, even under current labor
law more and more employers are choosing to delegate to work teams considerable
 autonomy to shape the bake-up of their group, their mode of operations,
materials and equipment used, and so on. It would seem inconsistent with the
intent of the NLRA if, in pursuit of more innovative and cooperative work
relationships, employees were denied the right to independent union

8 Summary and Questions for Further Discussion

   The Commission's findings with respect to employee participation and
labor-management cooperation can be summarized as follows:

   1. Employee participation, in a wide variety of forms, is growing and is
partially diffused across the economy and the work-force, extending to upwards
of one-fifth to one-third of the workforce. Adding the more informal styles of
communication and involvement found in many small establishments would likely
increase the number covered.

   2. The trends in the workforce and the economy identified in Chapter I
suggest interest will continue to grow in future years as the education of the
workforce rises, technology creates more opportunities to share information and
delegate decision-making authority, and the pressures of competition require
continuous improvement in productivity and quality.

   3. Survey data suggest that between 40 and 50 million workers would like to
participate in decisions on their job but lack the opportunity to do so. n37

   4. Labor representatives view employee participation as a means to enhance
both competitiveness and workplace democracy. They believe that independent
representation is essential to achieve both of these goals. Most management
representatives see employee participation as an integral part of the work
process and believe effective participation can be achieved in the both union
and nonunion settings.

   [something missing]
representation embodied in Section 8(a)(2). This issue concerns  exclusion of
all supervisors and managers for the rights and protections of national labor
law. This statutory exclusion rests on the assumption (see Bell Aerospace,
(1974)) that employers need the undivided loyalty of management in representing
shareholder interests where these conflict with the interests of the work force.
If a more cooperative conception of the employer-employee relationship is
embodied in labor law so that representation does not necessarily imply the
existence of an adversarial relationship, it may be necessary to reconsider
whether supervisors or middle managers should be denied the right to union
representation or collective bargaining.

   5. The labor and employment legislation enacted in the 1930s has raised
questions about a variety of forms of contemporary employee participation. This
is particularly true of (1) employment laws and regulations that try to draw a
distinction between "exempt" and "nonexempt" employees or among "workers,"
"supervisors" and "managers," and (2) labor laws that may tend to limit the
scope of employee participation in both nonunion and union settings.

   6. Where employee participation is sustained over time and integrated with
other organization policies and practices, the evidence suggests it generally
improves economic performance. If more widely diffused and sustained over time,
employee participation and labor management cooperation may contribute to the
nation's competitiveness and standards of living.

   7. Both historical and contemporary evidence suggests that employee
participation and labor-management cooperation are fragile. and are difficult to
sustain and diffuse in the American environment.

   8. The available evidence does not provide a clear understanding of the
factors that limit the diffusion or sustainability of employee participation and
labor-management cooperation. Four factors that appear to be important include:
insufficient trust, the inability of employees to initiate participation,
 economic pressures on employers, and government policies and legal issues.
Further understanding is needed, however, of these and other barriers and
potential strategies for overcoming them.

   These findings suggest a number of questions on which the Commission invites
further discussion and analysis:

   1. How can the level of trust and quality of the relationships among workers,
labor leaders, managers, and other groups in society and at the workplace be

   2. Is there a deep unrealized interest m participation in the American
workforce? If so, what keeps these employees from taking the initiative on these

   3. Should employees have some voice in initiating employee participation? If
so, how might this be done?

   4. Should employees have some voice in determining whether, once started, a
given employee participation process should be continued, changed, or
terminated? If so, how might this be done?

   5. How serious are the economic obstacles such as downsizing pressures for
short- term results, high start-up costs, and lack of understanding in the
investment community? What, if anything, can be done to address these issues?

   6. How should the legal uncertainties and limits on employee participation
and labor-management cooperation be addressed without discouraging workplace
innovations that enhance the competitiveness of the modern workplace and without
risking a return to the conditions that motivated passage of these protections?

   7. What, if any government strategies can assist the diffusion of employee
participation and labor-management cooperation?

   The issues raised in this chapter should not been seen in isolation. They are
tightly interrelated with the issues discussed with respect to collective bar-
 gaining in Chapter III and government regulations and dispute resolution in
Chapter IV.

   With respect to future legal policy, the major question is whether, and if
so, how, the National Labor Relations Act should be revised or interpreted to
permit nonunion firms to develop one or more of the array of employee
participation plans that have been challenged under Section 8(a)(2) of the Act:

   o Self-managed production teams, particularly if the team addresses not only
efficiency and product quality, but also workplace safety, assignments, and
other matters of direct concern to employees.

   o In-house dispute resolution procedures in which employees may participate
either as members of the committee hearing the matter or as representatives of
the employee with a grievance.

   o Joint quality of working life committees in some of which employee-members
are selected by management, and in others by the employees.

   o With respect to these and other forms of employee participation that have
become more common in the modern workplace, very different policy positions are
now being advocated from different quarters:

   o Section 8(a)(2) should be retained in its present form. the National Labor
Relations Act should be revised or interpreted to permit nonunion firms to
develop one or more of the array of employee participation plans that have been
challenged under Section 8(a)(2) of the Act:

   Self-managed production teams, particularly if the team addresses not only
efficiency and product quality, but also workplace safety, assignments, and
other matters of direct concern to employees.

   In-house dispute resolution procedures in which employees may participate
either as members of the committee hearing the matter or as representatives of
the employee with a grievance.

   Joint quality of working life committees in some of which  employee members
are selected by management, and in others by the employees.

   With respect to these and other forms of employee participation that have
become more common in the modern workplace, very different policy positions
are now being advocated from different quarters:

   o Section 8(a)(2) should be retained in its present form.

   o Section 8(a)(2) should no longer limit the freedom of nonunion employers to
establish procedures by which its employees will "deal with" (as opposed to
"collectively bargain" about) conditions of employment.

   o Section 8(a)(2) should be relaxed to permit employers to establish such
employee participation procedures dealing with conditions of work, if these
procedures meet certain standards about employee selection, access to
information, protection against reprisals, and the like.

   o Section 8(a)(2) should be altered to require employers to offer their
employees participation procedures meeting these minimum quality standards.

   In the second stage of its proceedings, the Commission would like to hear
from interested parties about which of these (or other) options are preferable
(and what, if any, revisions might also be made in the scope of the managerial
exclusion from the NLRA).

Exhibit II-4

Two Cases of Partnerships in Union Settings

I. Ford-UAW The Ford and UAW joint initiatives are national local. At both
levels, they address matters of common concern in areas such as product quality,
education and development, employee involvement, team structures, work redesign,
health and safety, ergonomics, employee assistance, apprenticeship, and labor.
management studies. Job security protection, wide information sharing, and
profit sharing are all important building blocks for this structure of workplace
cooperation. A negotiated central fund and local training funds,  projected to
total $ 75 million in 1993, support these joint endeavors. Administrative
direction is furnished by the first National Training Center ever negotiated in
the United States, plus a network of national and local committees that extends
to all 71 Ford-UAW locations in the U.S. Each workplace program has a purpose,
structure, and focus of its own. Some have large programs within programs. For
example, there are more than 20 individual programs in education and
development. Source: 1993 UAW-Ford Joint Programs Key Documents.

II. Joint Approach to New Plant design at Miller Brewing Company In October 1990
the decision was made to open Miller Brewing Company's plant located in Trenton,
Ohio. Planning at the earliest stages assumed that our workforce at the new
facility would be unionized. The planning team decided that if the workforce
chose to be represented, a significant investment would be made in communicating
with the union leadership about issues facing the plant, the company, and the
industry. While certain decision-making responsibility would still reside with
management union involvement in plan operational planning, problem-solving, and
goal setting would be sought at every level and few decisions would be made
without the union leaderships consent and endorsement. In practice, this meant
that the plant's management team would not only have to include the union in
weekly staff meetings, decisions, and planning, but would also have to re-think
which decisions required staff-level attention and involvement.

Exhibit II-5

Two Cases of Plans in Nonunion Companies

I. Donnelly Corporation [The Scanlon Plan] was introduced in 1952. . .in the
late 1960s Donnelly had worked with the Scanlon Plan for a fair amount of time
but we really introduced what we call the "Team Concept" in the late 1960s. . .
.We also started at that time trying to provide an alternate forum for due
process. . .the Equity Structure began in the late 1960s as basically an
employees' commmittee. . . .Now it's developed over time to a  representative
structure to make sure that it satisfied two fundamental purposes. These
representatives sit on committees, and we have sort of a hierarchy committees.
Eventually, the top committee in this structure is the Donnelly committee, which
has 15 voting members, one of whom is the president of the company. So again, it
is a diagonal slice; there are representatives from all different section of the
company. This structure has two fundamental purposes. . . .it provides a safety
net on issues of fairness, the whole issue of due process, grievance processing.
We also call it the issue resolution process, so I think that's a very
interesting commonality there. Also, we ask our equity structure to guarantee
that people have a voice in the development of policies that affect them and in
fact, we ask our Donnelly committee to unanimously agree on all personnel
policies that we put into place in the company.

II Herman Mlller, Inc. We began to practice participative management in the
1950s with the adoption of our Scanlon Plan. . .Every month we hold
informational meetings to inform all employees of business conditions and our
performance to plan. Every full-time tenured employee, regular employee, with
one year of tenure, is given stock in the company throughout profit sharing
plan. [W]ithin our organization we have an internal Appeals Board, which is made
up of management and employees. There is a group of ten people who an employee
an choose [five] from and appeal a decision to them. We also have what we call
caucuses and councils. Caucuses are used for information sharing, for seeking
charity, for groups, and they elect an individual who is able to act as an
information source for that group of employees in the organization. We have what
we call a Suggestion Review Board, which is made up of representatives from all
disciplines in the organization, and it is a diagonal representation of
employment. Exhibit II-6 The Polaroid Problem I. The Employee's Complaint

   I was elected to the Employee' Committee in 1992 . . . I ran on  a platform of
reform. The word around the company was that the Employees Committee was a tool
of management and did not represent the employees and had been that way for a
long, long time.

   So I filed a complaint with the Office of Labor Management Standards . . .
They did an investigation and found out, yes, that . . . these officials of the
union should be elected by the membership.

   There was a special meeting of the Employees' Committee . . . . shortly
thereafter where Mr. Booth appeared along with other corporate executives, and
said he had decided to do away with the Employees' Committee . . .

   It was widely known in the company that this organization was not in
compliance with the law, but nobody filed a complaint about it. But, they
[employees] wanted reform. We all wanted reform. They said it didn't represent
us. I was there trying to do what I felt I had been elected to do. That was to
make this body of people represent the employees of this company. That was
what they had elected to do. Then, all of a sudden, it was gone. II. The
Company's Dilemma

   What it needed for sure is greater freedom to try new ideas and methods of
participation without the fear, that merely discussing vital workplace questions
with employees, means being charged with unfair labor practice violation. It
seems terribly unreasonable for federal policy to urge workplace cooperation and
then put out of bounds open discussion on the most vital issues for
employees--pay, policy, and benefits.

   As a practical matter, I can't figure out how to engage in any meaningful
discussion about any workplace issues without treading on those important
matters. Employee involvement is about new creative ideas and solutions. That is
what our country's history has been all about. So why have barriers to trying
out different forms of employee creativity in the workplace to solve mattes are
 so important to eveyone? Exhibit II-7 Works Councils in Europe

   1. Councils are elected by and cover all employees (up to the most senior
executives) in an establishment. Works councils have information sharing rights
on issues affecting the enterprise and consultation rights on a wide array of
human resource policy issues. In Germany work councils have joint
decision-making rights on some specific workplace issues.

   2. Works councils operate separately from unions though in most countries
unions representatives make up the majority of council members and unions
sometimes provide technical advice and other supports to council members. Works
councils are reported to be more effective where there is a strong union
presence and support for council activities. They are least effective in France
where they lack support from either employers or the ideologically divided
French unions.

   3. In some countries unions and/or employers initially oppose works council
legislation. In countries with legislation works councils are now generally
accepted by both unions and employers with France again serving as the exception
to this generalization. British employers generally oppose works council
legislation both within their country and through directives of the European

   4. Works councils encourage employers to consider and consult on human
resource issues when planning major restructuring or modernization decisions and
encourage employees to recognize the need for such plans. Some see this as a
major benefit; it elevates the importance and integrates human resource policies
with other strategic decisions. In addition, councils tend to: (a) improve
communications and assist in resolving grievances, (b) delay decisions but
improve their quality; (c) provide flexibility in adapting regulations to fit
the needs of different worksites, and; (d) support diffusion of work redesign
and decentralized decision making. *

   5. But these benefits are not costless. Councils slow  decision-making. Some
see them as to formal and less flexible than the informal small group problem
solving processes found in American firms especially when faced with the need
for major restructuring often called for by current competitive conditions.



   Business Week and Sirota and Alper Associates, The 1985 National Survey of
Employee Attitudes, New York, Siroa and Alper, September, 1985.


   Thomas A. Kochan, Harry C. Katz, and Robert B. McKersie, The Transformation
of American Industrial Relations, New York, Basic Books, 1986, p. 212.


   "Worker Representation and Participation Survey Focus Group Report,"
Princeton Survey Research Associates, Princeton, New Jersey, April 194.


   Rosabeth Moss Kanter, "Work in America," Daedalus, Vol. 107 (1978), p. 54.


   Labor Notes, "The Independence of Labor," A paper submitted to the
Commission, October 1, 1993.


   The New American Workplace: A Labor Perspective, A Report by the AFL-CIO
Committee on the Evolution of Work, Washington, DC: AFL-CIO, February 1994.


   Edward E. Lawler, III. Susan A. Mohrman. and Gerald E. Ledford, Employee
Involvement and TQM: Practice and Results in Fortune 1000 Companies, San
Francisco: Jossey Bass, 1992.

   Paul Osterman. "How Common is Workplace Transformation and Who Adopts It. ?"
Industrial and Labor Relations Review, Vol. 47, January 1994, pp. 173-88.


   "ORC Employee Involvement Survey," Chicago: Organization Resources
Counselors, 1993.


   Preliminary tabulations from an employee involvement survey conducted by the
Aerospace industries Association, Electronic Industries Association, Labor
Policy Association, National Association of Manufacturers, and Organization
Resources Counselors, 1994.


   Business Week and Sirota and Alper, p. 87.


   Edward E. Lawler III and Susan Mohrman, "Quality Circles after the
Honeymoon," Organizational Dynamics, Vol. 15 (Spring, 1987), pp. 42-59.


   Robert Drago, "Quality Circle Survival: An Explanatory Analysis," Industrial
Relations, Vol. 27, 1988, pp. 336.51.


   Maryellen Kelley, Presentation to the Sloan Foundation Human Resources
Network Meeting, MIT, Cambridge. July 1993. Data are available from Maryellen
Kelley, Graduate School of Industrial Administration Carnegie Mellon University,
Pittsburgh, PA.


   For reviews of these studies see Eileen Appelbaum and Rose  Batt, The New
 American Workplace, Ithaca. New York: ILR Press. 1994; Gag C. McMahan and Edward
E. Lawler, III, "Effects of Union Status on Employee Involvement: Diffusion and
Effectiveness," a paper prepared for the Employment Policy Foundation,
Washington, D.C., 1994: and Thomas A. Kochan and Paul Osterman, The Mutual Gains
Enterprise, Boston: Harvard Business School Press, forthcoming, 1994.


   Thomas W. Planek and Kenneth P. Kolosh "Survey of Employee Participation in
Safety,' and Healthy" Itasca, IL: National Safety Council October 1993. A
similar estimate of the frequency of safety committees is reported in the Labor
Policy Association survey.


   Michael A. Conte and Jan Svejnar with Comments by Joseph R. Blasi, "The
Performance Effects of Employee Ownership Plans," in Alan S. Blinder (ed.)
Paving for Productivity. Washington, D.C.: The Brookings Institution, 1990, pp.


   Harry Katz, Thomas A. Kochan and Jeffrey H. Keefe, "Industrial Relations and
Productivity in the U.S. Automobile Industry," The Brookings Papers on Economic
Activity, Vol. 3, 1987, pp. 685-728.


   Maryellen Kelley and Bennet Harrison, "Unions, Technology, and
Labor-Management Cooperation," in Lawrence Mishel and Paula Voos (eds.),
Washington, D.C.: Economic Policy Institute, 1992.


   Roger T. Kaufinan, "Effects of Improshare on Productivity," Industrial and
Labor Relations Review, Vol. 45, No. 2 (January 1992), pp. 311-322; William
Cooke, "Product Quality Improvement Through Employee Participation: The Effects
of Unionization and Joint Union-Management Administration," Industrial and Labor
 Relations Review, Vol. 46, No. 1 (October 1992), pp. 119-134.


   Joel Cutcher Gershenfeld, "The Impact on Economic Performance of a
Transformation in Workplace Practices," Industrial and Labor Relations Review,
Vol. 44 (January 1991), pp. 241-60; John Paul MacDuffie and John F. Krafcik,
"Integrating Technology and Human Resources for High-Performance Manufacturing:
Evidence from the International Motor Vehicle Research Program," in Thomas A.
Kochan and Michael Useem (eds.) Transforming Organizations. New York: Oxford
University Press, 1992, pp. 209-26; Casey Ichinoiski, Kathryn Shaw, and Giovanna
Prennushi, "The Effects of Human Resource Management Practices on Productivity,
unpublished paper, Carnegie Mellon University, March 1994.


   Mark Huselid, "Human Resource Management Practices and Firm Performance,"
unpublished paper. Institute of Management and Labor Relations, Rutgers
University, June 1993.


   Lescohier, Don D., "Employee Representation or Company Unions," in John R.
Commons (ed.) History of Labor in the United States, 1896-1932, Vol. 3. Working
Conditions. New York: MacMillan, 1935.


   Summer Slitcher, Union Policies and Industrieal Management. Washington, D.
C.: The Brookings Institution, 1941.


   David Brody, "Section 8(a)(2) and the Origins of the Wagner Act," paper
presented to the Commission, January 6, 1994.


   Kochan and Osterman, The Mutual Gains Enterprise; McMahan and Lawler, "The
Effects of Union Status on Employee Involvement."

   See McMahan and Lawler, "Effects of Union Status on Employee Involvement,"
and Kochan and Osterman, the Mutual Gains Enterprise.


   Janice Klein, "Why Supervisors Resist Employee Involvement, Harvard Business
Review, Vol. 62 (September-October, 1984), pp. 87-95.


   Fred Foulkes, Personnel Policies in Large Nonunion Firms (Englewood Cliffs,
NJ: Prentice Hall, 1980; David W. Ewing, Justice on the Job, Boston: Harvard
Business School Press, 1989.


   Lawler, Mohrman and Ledford Emplovee Involvement and TQM.


   Lawler, Mohrman, and Ledford, Employee Involvement and TQM.


   Daily Labor Reports, February 25, 1994, A-3.


   This estimate was calculated as follows: 111 million wage and salary workers
- 19 million government employees = 92 million private sector wage and salary
workers. 92 million (.88).(67)(.80) = 43.4 million. .88 = percentage of private
sector non union work force; .90= percent expressing a desire to participate on
issues normally covered in employee participation processes. This calculation
assumes all union members have access to participation through their collective
bargaining representatives. Relaxing this assumption and including both the
union and nonunion labor force in the calculation increases the estimate to 49.3
million private sector workers. (92)(.67)(.80) =49.3 million.


    The Supreme Court so held in Exchange Parts (1964).


   Or so the Supreme Court appeared to rule in its two major decisions
interpreting this statutory policy: in Newport News Shipbuilding & Drydock
(1933), regarding the Section 8(a)(2) concept of "employer domination"; and in
Cabot Carbon (1957) , regarding the Section 2(5) phrase "dealing with".


   James Rundle "The Debate Over Modifying the Bar on Employee Dominated Labor
Organizations: at Is the Evidence?" Cornell University, unpublished manuscript


   See footnote 33 for the calculations of these estimates.

Chapter III

Worker Representation and Collective Bargaining


   Since enactment of the National Labor Relations ("Wagner") Act in 1935, the
declared policy of the United States has been "to encourage the practice d
procedure of collective bargaining. " Congress asserted that collective
bargaining is an essential instrument for securing "equality of bargaining power
between employers and employees," and promoting economic and political democracy
for American workers. Public opinion surveys have long made it clear that most
Americans approve of unions in general and of the right of employees to loin the
union of their choice.  n1  In presentations to the Commission, representatives
of labor and business concurred with the basic principle of the Act that workers
should have "full freedom of association, self organization, and designation of
representatives of their own choosing.

   The intent of the Wagner Act was to encourage collective bargaining, not to
mandate it in any particular workplace. The Wagner Act made it an  unfair labor
practice for employers to "interfere with, restrain, or coerce employees in the
exercise of their right . . . to form, join, or assist labor organizations." The
1947 Taft-Hartley amendments to the NLRA made it an unfair labor practice for
labor unions to coerce employees who wanted "to refrain from" union

   By making it illegal for either management or unions to coerce employees in
their freedom of association, the Nation's labor law seeks to leave the decision
whether to form a union or not in the hands of workers.

   The second charge to the Commission provides:

   "What (if any) changes should be made in the present legal framework and
practices of collective bargaining to enhance cooperative behavior, improve
productivity, and reduce conflict and delay?"

   In most workplaces with collective bargaining, the system of labor-management
negotiations works well. Conflict is relatively low, any unions and firms have
developed diverse forms of new cooperative arrangements, as Chapter II
indicated. The relations among workers, their unions, and management in these
workplaces are well-regarded by these parties. In testimony before the
Commission, the leaders of major companies and unions attested to their positive
experiences with collective bargaining.

   Peter J. Pestillo, Executive Vice-President Corporate Relations, Ford Motor
Company testified as follows:

   "In this constantly evolving environment of uncertainty, can collective
bargaining produce and sustain the type of cooperation the nation requires? I
believe it can.

   Based on the Ford experience, I believe that management, unions and employees
can successfully work together to improve relationships and improve U.S.
competitiveness on a firm-by-firm basis. It's a tall order. But it's the only
way to proceed if we want to be here for the long run.
   We can't afford a collective bargaining meltdown." (July 28, 1993).

   Moreover, in some cases, parties develop their own non-conflictual procedures
for determining workers' preference for Unionism. The Commission heard testimony
about some of these efforts to reduce the degree of conflict and resources
devoted to confrontational battles over whether new facilities should be
organized. Philip Morris, Miller Brewing, and the General Motors' Saturn
Division created joint task forces to discuss the organization of work and the
management system in their new facilities. In each case this produced union
representation without prolonged conflict so that collective bargaining could
start in the new facilities on a cooperative basis. Other firms, such as AT & T
and Scott Paper, have negotiated rules of conduct to govern union organizing in
new facilities or business units.

   For instance, AT & T agreed that it would not campaign against organization
and that it would recognize the union if a majority of employees signed cards
indicating that they desire representation. (This agreement excludes that part
of AT & T that was formerly National Cash Register). According to testimony
before the Commission, this system has worked well. The Commission notes that in
some of these facilities workers have chosen to remain nonunion.

   In addition to these cases, other parties have developed their own procedures
for voluntary representation elections. Many companies maintain nonunion
facilities and good relations with workers and unions without engaging in a
"war" over organizing new plants or worksites.

   Where much conflict and delay does occur is in the process of providing
workers a democratic choice whether to organize a union in previously
unorganized work- places. The history of union organization is not one of a
"laboratory condition" election (to use the phrase that has guided the National
Labor Relations Board) of employees for or against forming a union to bargain
 collectively with their employer. Many firms and business organizations in the
United States have historically been more resistant to the formation of unions
than managements in other advanced economies, and often have sought to
discourage unionization. Employees and union organizers who seek to bargain
collectively have countered this resistance with their own variety of tactics,
with varying degrees of success over time.

   General agreement exists on broad principles regarding worker representation
and collective bargaining; however, the effort to implement those principles in
workplaces encounters a highly conflicted and emotional debate. Since the 1926
Railway Labor Act every major piece of legislation regulating the process of
organizing a union has been the subject of bitter partisan political and
union-management conflict. Most union organizing drives in the United States
today are difficult for both employees and management. Though the number of
union organizing campaigns is small compared to the universe of workplaces, the
perceptions generated by these conflict-driven situations pervade the broader
employee and management relationships.

   The first step in moving toward a dispassionate and reasoned discourse on the
experiences with worker representation and collective bargaining under U.S. law
is to examine statistical evidence on the operation of the National Labor
Relations Act.  n2 Much of the data in this chapter comes from the statistics of
the National Labor Relations Board (NLRB), and the record was developed under
both Republican and Democratic administrations over the years.

The Process of Establishing Collective Bargaining

   Before examining statistical trends, however, it is useful to set out the key
features of the National Labor Relations Act that guide the model for
determining whether there is to be a collective bargaining relationship at any
given workplace.

   1. The majority verdict of employees in an appropriate unit  determines
whether or not they will be represented by a union for purposes of collective
bargaining--a decision typically made through a secret ballot election conducted
by the National Labor Relations Board at the employees' worksite.

   2. Prior to this election, the employer and the union are entitled to, and
usually do, engage in a vigorous campaign pointing out the pros and cons of
changing the nonunion status quo. However, as noted above, both sides are
prohibited from threatening or inflicting retaliation against employees who
support the other side--in particular, employers through dismissals of union
supporters or of labor organizations through coercing employees in their
decision respecting self-organization.

   3. If the majority of employees vote for union representation, the employer
must recognize the designated union as exclusive bargaining agent for employees
in the unit, and must engage in good faith negotiations about terms and
conditions of employment that would be incorporated in a collective 'agreement;
but the employer is not required to make concessions to particular union

   4. If agreement cannot be reached 'voluntarily by the two sides, employees
have the legal right to collectively withdraw their labor (i.e., to strike)
without fear of dismissal; although the employer is free to lockout workers or
to permanently replace striking employees in their jobs.

   Not all workers are covered by the National Labor Relations Act. Some, such
as managers, supervisors, agricultural workers, and domestic workers, are
excluded by the law. Workers in the railroad and airline industries are covered
by the Railway Labor Act.

   1. The majority verdict of employees in an appropriate unit determines
whether or not they will be represented by a union for purposes of collective
bargaining--a decision typically made through a secret ballot election conducted
by the National Labor Relations Board at the employees' worksite.
   2. Prior to this election, the employer and the union are entitled to, and
usually do, engage in a vigorous campaign pointing out the pros and cons of
changing the nonunion status quo. However, as noted above, both sides are
prohibited from threatening or inflicting retaliation against employees who
support the other side--in particular, employers through dismissals of union
supporters or of labor organizations through coercing employees in their
decision respecting self-organization.

   3. If the majority of employees vote for union representation, the employer
must recognize the designated union as exclusive bargaining agent for employees
in the unit, and must engage in good faith negotiations about terms and
conditions of employment that would be incorporated in a collective agreement;
but the employer is not required to make concessions to particular union

   4. If agreement cannot be reached voluntarily by the two sides, employees
have the legal right to collectively withdraw their labor (i.e., to strike)
without fear of dismissal; although the employer is free to lockout workers or
to permanently replace striking employees in their jobs.

   Not all workers are covered by the National Labor Relations Act. Some, such
as managers, supervisors, agricultural workers, and domestic workers, are
excluded by the law. Workers in the railroad and airline industries are covered
by the Railway Labor Act.

   Other workers nominally covered by the law are effectively excluded, because
they may be part-time or contingent, as described in Chapter I, or because they
may have an independent contractor relationship with a sole employer. These
temporary, "leased," on-call, or self employed contractor status workers, are
often low-paid individuals.

   Finally, the situation of employers and workers in construction differs
enough from that of other employers and workers to merit special  attention. We
examine first the experience of employees for whom the procedure given above
applies, and whose experience dominates the NLRB statistics.

Part A

Experience Under the National Labor Relations Act

1. NLRB Certification Elections

   Since passage of the NLRA almost 60 years ago, millions of workers and large
numbers of unions and enterprises have used the procedures established by the
NLBB. The majority of participants have compiled with the established
requirements without resort to tactics that were challenged by either side and
later found illegal by the Board.

   Exhibit III-I (see page 81) shows the number of elections held for union
certification under the NLRB and the outcome of this stage of the process to
form a collective bargaining relationship. It gives the data in five year annual
averages from 1950 to 1980 and in single years thereafter. The first fact that
stands out is that the number of certification elections and workers involved
has been small compared to the number of workplaces and employees in the United

   o In the late 1980s, less than 4,000 NLRB elections were held in any given
year. This contrasts with the large number of establishments in the U.S. shown
in Chapter I. The number of "eligible voters" in NLRB elections has ranged from
roughly 200,000 to 250,000 in the 1980s. This contrasts with the approximately
65 million non-union employees potentially covered by the Act. n3 

   o The extent of NLRB election activity has trended downward through much of
the post-World War II period. In the early 1950s for example, the Board
conducted nearly 6,000 elections, involving over 700,000 workers. By the late
1970s, the total number of certification elections had risen to over 7,500, but
in smaller-sized units totaling 490,000 employees. From 1975 to 1990 the
 number of elections fell by 55 percent to 3,628 elections involving 230,000

   o Fewer workers were involved in the N1-BB representation process in 1990
than were involved in previous decades, despite the enlarged work force.

   One important implication of these statistics is that the NLRB data on
organizing campaigns, and on unfair labor practices by management and labor in
these campaigns, reflects experiences in a small portion of the American labor
market. Even at 1960s or 1970s levels of NLRB election activity, only a
relatively small number of workers and workplaces were involved in
representation campaigns that reached the election stage.

   A second fact is that the success of employees in organizing unions through
the NLRB election process has fallen sharply.

   o The proportion of elections in which workers voted to unionize fell from
the early 1950s levels of 1950 to 1954 of 72 percent to figures hovering about
50 percent in the 1975 to 1990 period.

   o The number of workers eligible to vote in NLRB elections has fallen more
than has the number of elections. This reflects the fact that union organizing
drives have increasingly been located at smaller workplaces.

   o The number of employees in newly certified units shows a greater percent
age decline than does the number of newly certified units. This is because
unions have been plus successful in winning elections in larger workplaces in
the 1970s and 1980s than in the 1950s and 1960s. In 1990, 79,000 workers were in
newly certified units.

   The number of NLRB elections held, the number of workers in elections, and
the number in unite certified for collective bargaining has diminished.

   The number of workers organized through NLRB elections, and the downward
trend in such, underlies the decline in the proportion of the private sector
 workforce whose conditions of employment are shaped by collective bargaining
described in Chapter I.

   The process of moving from a petition for an election to an election involves
several steps. The union seeking to represent the workers first goes to the NLRB
with a written authorization petition from at least 30 percent of workers in the
relevant unit, but which usually includes close to two-thirds of the workers.
Once the Board has directed an election, it also provides the union with a list
of names and addresses of employees in the election unit.

   The union can speak to the employees on its own premises or in the employees'
homes, if the employees are willing. The employer can speak to the employees at
the workplace, whether through one-on-one conversations between supervisors and
workers, or in general meetings which employees are required to attend and from
which individual workers who support unionization may be excluded. Union
organizers are excluded from. these meetings and are typically banned from
speaking to workers in some places accessible to the general public, such as
company parking lots, or cafeterias. Supervisors who refuse to engage in the
company's campaign may be legally did charged. Studies-show that consultants are
involved in approximately 70 percent of organizing campaigns and that unions
are less successful in those campaigns than in others. There are no accurate
statistics on consultant activity.

   How long does an NLRB election campaign last? Exhibit 111-2 (see page 82)
shows the time between union petitions for an election and the actual election.
The The number of workers organized through NLRB elections, and the downward
trend in such, underlies the decline in the proportion of the private sector
workforce whose conditions of employment are shaped by collective bargaining
described in Chapter I.

   The process of moving from a petition for an election to an election involves
several steps. The union seeking to represent the workers first  goes, to the
NLRB with a written authorization petition from at least 30 percent of workers
in the relevant unit, but which usually includes close to two-thirds of the
workers. Once the Board has directed an election, it also provides the union
with a list of names and addresses of employees in the election unit.

   The union can speak to the employees on its own premises or in the employees'
homes, if the employees are willing. The employer can speak to the employees at
the workplace, whether through one-on-one conversations between supervisors and
workers, or in general meetings which employees are required to attend and from
which individual workers who support unionization may be excluded. Union
organizers are excluded from. these meetings and are typically banned from
speaking to workers in some places accessible to the general public, such as
company parking lots, or cafeterias. Supervisors who refuse to engage in the
company's campaign may be legally did- charged. Studies' show that consultants
are involved in approximately 70 percent of organizing campaigns and that unions
are less successful in those campaigns than in others. There are no accurate
statistics on consultant activity.

   How long does an NLRB election campaign last? Exhibit 111-2 (see page 82)
shows the time between union petitions for an election and the actual election.
The median time from petitioning for an election to a vote has been roughly
fifty days for the last two decades (down considerably from the time taken in
the 1940s and 1950s).

   The union determines when to file an authorization petition, and employers
can influence the election date by raising issues about the relevant election
unit and insisting on a pre-election hearing and decision about them. Employers
and unions can also agree on the definition of the unit or exclusion of certain
categories of employees from its scope, producing consent or stipulated
elections that will take place more quickly.

    It is difficult to determine the effect of the time between a petition and an
election on whether workers vote for or against unionization. Unions are more
likely to win elections held relatively quickly, but this does not prove that
time in fact affects the election result. Many things will differ between
elections that take place quickly and those that take a long time. Management is
more likely to be resistant to the organizing drive in the latter case.
Approximately 20 percent of elections take more than 60 days.

Compliance with the NLRA

   The NLRA makes provision for identifying and remedying' unfair labor
practices involving any participant.

   The NLRB statistics provide information about management and union illegal
behavior under the labor law.

   Exhibit III-3 (see page 83) records the number of unfair labor practice
charges against employers, the percentage held meritorious, the decomposition of
the charges between those under Section 8(a)(3) (which prohibits discriminatory
discharges and other retaliatory actions against union supporters) and those
under Section 8(a)(5) (which prohibits employers from bad faith bargaining in a
collective bargaining situation). The last three columns give the number of
backpay awards, amount of awards, and the number of employees ordered reinstated
due to employer unfair practices. The Exhibit gives figures as annual averages
in five year intervals through 1980 and for single years thereafter.

   Through 1980, there was an upward trend in unfair practice charges against
employers. In the early 1950s, when the number of certification elections was
running at roughly 6,000, approximately 3,000 8(a)(3) charges were filed each
year against employers, and a little over 1,000 8(a)(5) charges were also filed.
By the late 1970s, with approximately 7,500 NLRB elections per year, Section
8(a)(3) charges had risen five-fold, to almost 16,000 a year, while Section
 8(a)(5) charges were up to nearly 7,500 annually.

   o From 1980 to 1990, the number of Section 8(a)(3) charges against employers
fell by 50 percent while the number of Section 8(a)(5) charges against employers
remained stable. The fall in Section 8(a)(3) charges tracks the fall in NLRB
elections over the period.

   o More than 60 percent of unfair labor practice charges are either withdrawn
by the complainant or judged to be without merit by the National Labor Relations
Board. This means that the number of charges under the law exaggerates the
extent of violations. In 1990, there were about 10,600 charges of unfair labor
practices against management that were found meritorious by the NLRB.

   o The proportion of charges found meritorious has trended upward over time.
In 1990 44 percent of charges against employers were held meritorious compared
to less than 40 percent in the 1950 to 1975 period.

   o The number and amount of backpay awards given to employees and the number
of employees reinstated under the Act because of meritorious charges against
employers rose from about 1960 through the mid 1980s. The number of backpay
awards roughly stabilized thereafter, in the 17,000- 18,000 range, while the
amount of backpay awarded continued to grow. The number of employees ordered
reinstated dropped from the early 1980s to around 4,000-4,500 in the late 1980s
and 1990.

   Taken by themselves, the statistics in Exhibit 111-3 may overstate the degree
of employer interference with employee free choice about union representation.
Because the legal reach of Sections 8(a)(3) and 8(a)(5) has been considerably
expanded by the Board' and the courts over time, many meritorious complaints do
not take place within the context of representation campaign or attempted
negotiation of a first contract.

   The NLRB does not separately catalogue meritorious 8(a)(3) complaints that
are precipitated by a representation contest. However, the  Commission used a
methodology developed by University of Chicago Professors Bernard Meltzer and
Robert Lalonde  n4 to calculate the share of reported NLRB reinstatements that
were connected to union organizing campaigns.

   Exhibit III-4 (see page 84) presents one set of estimates of the number of
workers offered reinstatement arising from NLRB certification elections, the
ratio of those workers to workers voting for unions, and the percentage of
elections producing reinstatement offers.  n5

   o In the early 1950s, approximately 600 workers were reinstated each year
because of a discriminatory discharge during a certification campaign. By the
late 1980s, this number was near 2,000 a year.

   o Adjusted for the number of certification elections and union voters, the
incidence of illegal firing increased from one in every 20 elections adversely
affecting one in 700 union supporters to one in every four elections victimizing
1 in 50 union supporters.

   The number of reinstatement offers arising from certification elections,
while small and relative constant since 1975, has risen significantly when
compared to the total number of workers voting for unions.

   As noted earlier, section 8(b)(1) of the NLRA makes it an unfair labor
practice for a labor organization to restrain or coerce employees in the
exercise of their rights of self-organization guaranteed by law.

   Exhibit III-5 (see page 86) shows the number of unfair labor practice charges
against unions, using a format similar to that in Exhibit III-3 for charges
against employers.  n6

   o In 1990, nearly 9,700 unfair labor practice charges were filed against
unions, constituting 29 percent of the nearly 34,000 unfair labor practice
charges filed with the Board. The proportion of charges held meritorious was
just over a quarter, so that charges against unions represented 17 percent of
 the charges found meritorious, 10 percent of complaints issued, and 11 percent
of cases in which formal decisions were made by the Board that year.

   o That trend in unfair labor practice charges against unions, like that
against firms, is upward from 1950 through 1980, and falling number of NLRB
representation elections.

   o The percentage of unfair labor practice charges held meritorious against
unions was below 30 percent in the 1980s and trended downward since roughly

   Unfair labor practices against unions grew until the 1980s. The proportion of
charges against unions held meritorious is lower than the proportion held
meritorious against employers.

   Comparing the statistics in Exhibits III-3 and III-5 shows that a larger
proportion of unfair labor charges and of charges held meritorious are against
employers than are against unions. In 1990, 71 percent of unfair labor practice
charges (Section 8(a) and 8(b)) were against employers and 81 percent of charges
held meritorious were against employers.

2. Unfair Labor Practice Sanctions

   What penalties does the law impose on employers or unions who engage in
unfair labor practices?

   The philosophy of the NLRA has been to repair the harm done to injured
employees by providing employees who were fired for union activity with backpay
and by ordering them reinstated in their jobs.

   The monetary penalty for an employer firing a union supporter in violation of
Section 8(a)(3) is the back pay that was lost by the employee-victim, minus any
sums the employee did (or should have) earned in another job while awaiting
relief from the NLRB. In 1990, the average back pay award amounted to $ 2749 per

    The "in kind' relief of reinstating workers who were illegally fired often
takes a long time to effectuate. Before an employer is legally obligated to
reinstate a discharged employee, the case goes through a four-stage procedure.
The employee's charge must first be judged meritorious by the Board's regional
office, then by an Administrative Law Judge following a full-scale trial, then
by the Board itself, and then by a federal appeals court -- a process that takes
an average of three years to complete. In practice, however, most such cases are
resolved long before they reach the end of this legal path.  n7  Earlier
disposition of a charge requires voluntary agreement between the parties.

   Empirical research shows that most illegally fired workers do not take
advantage of their right to reinstatement on the job, following an order, and
most reinstates are gone within a year.  n8

   Employers who violate Section 8(a)(5) by engaging in surface bargaining
typically are ordered by the NLRB not to repeat this conduct in the future. The
Board cannot award any specific contract term that employees may have been
denied by reason of their employer's bad faith bargaining. Most NLRB orders
directing employers to cease bargaining in bad faith do not lead to a first
contract, and of those that do, most do not see a contract renewal.  n9

   Board remedies against employer unfair labor practices can be compared to the
remedies available to employers against the unfair labor practice of unions, the
secondary boycott, that was outlawed by the 1947 Taft-Hartley amendments to the
NLRB. Section 8(b)(4) of the Act makes it an unfair labor practice for unions to
engage in any such secondary pressures, either for "top down" organizing of
nonunion employees, or where employees on strike in a bargaining dispute with
their own employer have asked fellow union members working for other employers
not to handle goods and services produced by their strike replacements.

   Both the secondary and the primary employers affected by such  union actions
have the right under Section 10(1) of the NLRA to have the Board's regional
office seek immediate injunctive relief (typically within a few days) from a
federal district judge; as well as the right under Section 303 of the Labor
Management Relations Act to sue the union in court for all damages sustained as
a result of its illegal behavior (including recovery of the employer's legal
costs of suing the union). Those statutory sanctions have greatly reduced the
use of secondary boycotts.

   Congress did not, however, enact the same enforcement provisions for cases in
which employers illegally discharge union supporters in an organizing campaign
or engage in bad faith bargaining with newly-elected union representatives as
they do for secondary boycotts. The Taft-Hartley law (Section 10(j)) empowers
the Board itself (not its Regional Office), following issuance of an unfair
labor practice complaint, to petition a federal district court for interim
injunctive relief.  n10 In practice, this legal avenue is pursued infrequently
each year, and is usually too late in discriminatory discharge cases to undo the
damage done.

   More recent employment law including the Civil Rights Act, the Age
Discrimination in Employment Act, the Americans with Disabilities Act, and
related antidiscrimination laws that Chapter IV examines, and the tort of
wrongful dismissal,  n11 use a very different enforcement model. Over and above
the back pay lost by the fired employee, the employer is liable for
consequential financial and psychological harm to its victims, punitive damages
for willful misconduct, and the attorney fees of victorious plaintiffs.

   The NLRB mode of dealing with employers or unions who violate the rights of
workers under the Act is remedial or reparative. There are stiffer sanctions
available to employees whose rights are violated under most federal and state
employment laws.

 3. The Trend in First Contracts

   NLRB certification that employees voted to be represented by a union is one
step in establishing collective bargaining in the workplace. The next step is
for employees and their union to secure a written agreement from the employer.

   Data about the historical trend in success in negotiating first contracts is
less firm than the data on certification elections. One set of estimates is from
independent analysts who have used various samples in different years to
determine the extent to which workers who elect a union to represent them in
collective bargaining obtain a contract. The earliest estimate in the late 1950s
found that unions failed to secure a first contract 14 percent of the time.
 n12 whereas estimates of the union failure rate in the 1980s are on the order
of 20 to 37 percent.  n13

   The Commission received new information on first contracts from the files of
the Federal Mediation Conciliation Service (FMCS). Since fiscal year 1986 the
FMCS, by informal arrangement with the NLRB, has received notice and copies of
all new certifications. Exhibit III-6 (see page 87) presents these new data.

   o Of the 10,783 certification notices the FMCS received between 1986 and
1993, initial agreements were reached in 6,009 or 56 percent of those units.
Another 4 percent were found not to need mediation or to fall outside the FMCS
jurisdiction. Thus, on the order of two-thirds of certification elections lead
to a first contract, whereas one-third or so do not.

   o Because many newly certified units do not produce a first contract, the
number of workplaces which obtain a collective bargaining contract through the
NLRB process is lower than indicated in the election figures in Exhibit III-1.
Applying two-thirds to the percent won figures in that Exhibit indicates that
just one-third of NLRB elections resulted in a collective bargaining contract in
1990, and that on the order of 53,000 workers ended up with a contract.  n14
   o FMCS data also show that strikes occurred in 356 of these first contract
negotiations. First contract strikes tended to last longer than contract
renewal strikes handled by FMCS--an average of 45 days versus 30 days -- and to
produce fewer agreements at the end of the strike -- 54 percent versus 82

   Studies of representative samples of first contract situations  n15 indicate
the roughly a third of employers engage in bad faith "surface" bargaining with
the newly-elected union representative, and that this illegal tactic
significantly reduces the odds that employees will secure an initial agreement
from their employer (or if they do, that the bargaining relationship will
survive the next round of negotiations).

   The Commission is aware that many factors can contribute to the failure of
the parties to reach agreement including bad faith bargaining.

4. Cost of the NLRB Election Process

   There do not exist national data on the amount of resources spent by
management and labor in fighting NLRB election campaigns, but most participants
and observes assess the dollar and human cost as high in relation to the extent
of such activity. Firms spend considerable internal resources and often hire
management consulting firms to defeat unions in organizing campaigns at a
sizable cost. Unions have increased the resources going to organizing and spend
considerable money in organizing campaigns. Employees who want representation
devote considerable time and effort to this activity.

   In testimony before the Commission both union and employer spokespersons
stressed the confrontational nature of the election process. (See Exhibit III-7,
page 888) Ms. Allison Porter of the AFL-CIO Organizing Institute explained the
problem faced by union organizers who must tell workers the risk they face from
illegal firings. Mr. Clifford Ehrlich of Marriott International explained how
 employers view "perpetual conflict" in organizing drives. Public opinion polls
show that many Americans recognize the problems involved in organizing drives as

   In a 1988 Gallup Poll, 73 percent said that "workers' rights and abilities to
organize unions have faced a strong challege from corporations in the past few
years," 69 percent stated that "corporations sometimes harass and fire employees
who support unions," and 44 percent reported that "if employees attempted to
form a union in my workplace, serious conflict among employees would be

   In a 1991 Fingerhut-Powers poll, 59 percent said it was likely they would

lose favor with their employer if they supported an organizing drive; 79 percent
agreed (versus 16 percent who disagreed) that it was either "very" or "somewhat"
likely "that nonunion workers will get fired if they try to organize a union."
 n16  Of employed non-union respondents, 41 percent believed (versus 50 percent
who did not) that "it is likely that I will lose my job if I tried to form a

   While no survey has documented the disturbance that a "war" for unionization
brings to the employer nor the effects on productivity or profitability, the
statement by Clifford Ehrlich makes it clear that the confrontational process
brings tension and pain to employers as well as to workers.

   The United States is the only major democratic country in which the choice of
whether or not workers are to be represented by a union is subject to such a
confrontational process in most cases. One reason for this is that the exclusive
representation doctrine in the United States means that workers who want union
representation must constitute a majority of the relevant work force:
unionization is an all-or-nothing choice. Another person is that in the United
States unionization often raises the labor costs at a worksite, whereas in many
 other countries, collective bargaining or administrative decrees establish wages
for all workers in a given sector regardless of unionization at the local site,
while many benefits are nationally mandated. A third reason is that the legal
framework poses the issue of worker representation as a campaign struggle
between employers and unions.

   The issue of union representation sparks a highly contested campaign between
employers and unions that produces considerable tension at the workplace.


   The four major findings that emerge from the NLRB and related evidence on
representation elections, unfair labor practices, and first contracts are:

   1. Relatively few new collective bargaining agreements have been created in
recent years under the procedures of the NLRB.

   2. The rights of most workers who seek to unionize are respected by
employers, but some employers do violate the rights of some workers.

   3. Employer unfair labor practices have risen relative to the declining
amount of NLRB representation activity.

   4. The NLRA process of representation elections is often highly
confrontational with conflictual activity for workers, unions and firms that
thereby colors labor-management relations.

5. The Human Face of the Confrontational Representation Process

   Behind the NLRB and other statistics are real people -- American employees --
rather than spokespersons for organized labor or business groups. A number of
employees testified before working parties of the Commission about experiences
with employer reprisals in organizing campaigns.  n17  These examples are not
necessarily representative of organizing campaigns generally, and do not reflect
on the behavior of employers at millions of worksites in the U.S. any more than
 the examples of criminal activity by some union leaders that sparked the
Landrum-Griffin Bill of 1959 reflected on the overwhelming majority of union
members and leaders. Still, the testimony "of workers trapped . . . in the dark
ages of labor-management antagonism" show that there is a negative side to
American labor relations that reflects the highly charged nature of the debate
and contrasts sharply with the efforts of employers and their workers to
establish cooperative and productive relations documented in Chapter II of this
Report. (See Exhibit III-8, page 89)

   As the Commission has neither the investigative staff nor subpoena power to
examine these examples in detail, the Commission simply reports the testimony
before it, as in Chapter II.

6. Debate on Labor Law and Union Organizing Campaigns

   The debate over labor law and union organizing goes beyond concerns over
illegal conduct.

   The Commission heard from labor leaders, front-line union organizers, and
workers, and some scholarly experts that, as currently operated, the design and
administration of the NLRA are ill-suited to providing workers a free choice
about union representation.

   The Commission also heard from many business representatives who believe the
current law is working well, at least for the vast bulk of employers and
workers, and does not need any major revision. The business representatives
agreed that the Act should be effectively enforced; some acknowledged that the
misconduct of those firms that violate the law needs to be dealt with more
effectively; and others called for a new vision for labor law that breaks out of
the current highly adversarial pattern.

   The issue dividing labor and management is not about the illegal actions of
some employers or unions but about how the current operation of the law affects
the ability of workers to organize. No one before the Commission  condoned the
tactics of employers who violate the law.

   On the union side, the trend in union representation shown in Chapter I and
the trend in NLRB election results shown in this chapter illustrate why union
leaders are gravely concerned about the operation of the law in general.

   The Commission received testimony from union leaders that the primary problem
facing workers who want to organize is not the illegal actions of some employers
(although those actions harm an organizing campaign). It is rather, in the words
of AFL-CIO President Lane Kirkland, "veiled threats and acts of discrimination
which cannot be proven to be unlawfully motivated."

   Union witnesses felt that employers had certain advantages in NLRB election
campaigns: access to the workplace and to employees during working time, and
exercised their economic power over employees to override the right to free

   "The reality of employer opposition and the kind of latitude employers have
in how they campaign under current law has totally invaded that way that unions
select and run campaigns . . . and a clearly defined bargaining unit . . .
organizing a union today is so risky, its so hard, it's so technical, and so
scary for workers, that only the most resourceful, the most fed-up, and the most
heroic workers will even pursue it." (Allison Porter in testimony before the

   Based on their experiences union representatives recommend various changes in
the representation system, such as: the representation system, such as: stronger
penalties to deter unlawful employer conduct, expedited procedure to remedy such
conduct, an equal time provision to give workers the same access to union
spokepersons as they have to management spokespersons, an obligation of an
employer to recognize a representative designated by a majority of employees
through authorization cards, and interest arbitration to guarantee a first
 contract to employees who vote for a union.

   The employers do not believe the trend in union representation is due to any
flaws in the NLRA and are opposed to those changes advanced by labor.

   The Commission heard testimony from management representatives that they did
not feel that unfair labor practices contributed to the difficulty of
organizing. Employers further contend that a meaningful campaign is an
indispensable means for enlightening employees about the issues before they cast
their secret ballot vote for or against union representation.

   Overall, both sides are in apparent agreement that employer resistance to
unionization reduces the probability of a union election win, and thus of the
establishment of a collective bargaining arrangement.

   One question that is often raised is whether any significant number of
workers currently not covered by collective bargaining in fact want such

   Public opinion surveys provide some evidence on this question for the
millions of American workers who are not involved in NLRB election campaigns.
These data while informative about attitudes, do not tell us how workers would
in fact vote in an NLRB representation campaign after management and unions gave
their respective arguments nor how they would vote in such campaigns absent
unfair labor activities, or in an environmental with less stringent employer

   Public opinion surveys on this issue tell a fairly consistent story from 1977
through 1991: approximately 30 percent of the nonunion workforce typically
answers "yes" to questions normally worded as follows: "If a union
representation election were held on your job, how would you vote?" Non-Whites
are generally twice as likely to express desire for unionization as Whites;
women also often tend to express a greater preference for unionization than men.
   If the 30 percent figure is applied to the number of private sector workers
covered by the NLRA and not in unions, approximately 15 million
nonrepresentation.  n18  Many of these workers may be at worksites where the
majority of employees do not want representation. Some will be at worksites
where the majority does want such representation. While the NLRA protects the
concerted activity of nonunion employees as a group, the doctrine of exclusive
representation makes minority unionism or non-union concerted activity by
workers rare in the United States.

   Information was presented to the Commission regarding the results of
representation elections in the public sector. Over the past three decades, 36
states have enacted laws allowing some or all of their public employees to
organize and bargain collectively. Certification win-rates by unions in public
employment are high, in 1991-92 averaging 85 percent nation-wide, reflecting
substantial union wins in the elections. Studies show that the union win rate in
public sector elections exceeds their win rate in private sector representation
elections in the same state.  n19 The reasons for the difference in union
success in elections in the two sectors is an issue for debate. Union
representative testified before the Commission that they believed an important
reason was that public employers seldom campaign against union organizing and
that employees believe if they vote union the outcome will be a collective
bargaining contract.

   The Commission has not sought to determine the role of particular campaign
tactics, legal or illegal, on the outcome of NLRB elections nor the reasons for
the decline in the proportion of workers covered by collective bargaining in the
United States.

   Information was presented to the Commission regarding the results of
representation elections in the public sector. Over the past three decades, 36
states have enacted laws allowing some or all of their public employees to
 organize and bargain collectively. Certification win-rates by unions in public
employment are high, in 1991-92 averaging 85 percent nation-wide, reflecting
substantial union wins in the elections. Studies show that the union win rate in
public sector elections exceeds their win rate in private sector representation
elections in the same state. The reasons for the difference in union success in
elections in the two sectors is an issue for debate. Union representatives
testified before the Commission that they believed an important reasons was that
public employers seldom campaign against union organizing and that employees
believe if they vote union the outcome will be a collective bargaining contract.

   The Commission has not sought to determine the role of particular campaign
tactics, legal or illegal, on the outcome of NLRB elections nor the reasons for
the decline in the proportion of workers covered by collective bargaining in the
United States.

   Many factors are undoubtedly at work behind these trends, including
management actions, union actions, government regulations, and the changing
needs of workers and their assessment of how best to meet those needs. The
relative influence of these (and other) actors would be very difficult to
determine, including the significance of unfair labor practices.

   There is disagreement about the relationship between unfair practices and
legal employer and union tactics in NLRB elections and the declining success of
unions in representation elections.

   There is no disagreement that illegal discharges and related illegal activity
harm the lives of the individual employees who were fired, and that the legal
and administrative process should afford those employees effective redress and
dry to reduce illegal activity.

7. Summary

   Part A of Chapter III has focused on how effectively the NLRA works in
providing American workers the free choice to choose whether or  not to bargain
collectively with their employers, which is the unifying principle on which
labor, business, and the American people concur.

   Only a small proportion of the U.S. workforce is involved in NLRB
representation elections and only a small number of employers and unions have
been found guilty of violations of the NLRA. Still, the issues in this Chapter
are important to U.S. employee-management relations. They are important because
NLRB representation elections are the way the nation offers workers the right to
choose union representation and because conflicts in this arena can create an
atmosphere of conflict and confrontation in worker-management relations
throughout the economy.

   Our principle findings are summarized in the following points:

   1. American society -- management, labor, and the general public -- support
the principle that workers have the right to joint a union and to engage in
collective bargaining if a majority of workers so desire.

   2. The number of NLRB elections held, the number of workers in elections, and
the number in units certified for collective bargaining has diminished.

   3. Representation elections as currently constituted are a highly conflictual
activity for workers, unions, and firms. This means that many new collective
bargaining relationships start off in an environment that is highly adversarial.

   4. The probability that a worker will be discharged or otherwise unfairly
discriminated against for exercising legal rights under the NLRA has increased
over time. Unions as well as firms have engaged in unfair labor practices under
the NLRA. The bulk of meritorious charges are for employer unfair practices.

   5. The legal relief afforded individual employees fired for exercising their
rights under the NLRA was designed to be remedial. The legal relief afforded
individuals under more recent employment law is more severe.

    6. Relief to employees whose employer has bargained in bad faith with them
requires the employer to cease and desist such tactics.

   7. Roughly a third of workplaces that vote to be represented by a union do
not obtain a collective bargaining contract with their employer.

   8. There is a dismal side to American labor relations in which the rights of
some individual workers are violated by some employers who resist the effort to

   The analysis of Part A poses a host of questions about possible labor law
reforms, to which the Commission will be looking for information from interested
parties and the general public. Here are some critical questions for further

   o How can the level of conflict and amount of resources devoted to union
recognition campaigns be de-escalated?

   o What new techniques might produce more effective compliance with
prohibitions against discriminatory discharges, bad faith bargaining, and other
illegal actions?

   o Should the labor law seek to provide workers who want representation but
who are a minority at a workplace a greater option for non-exclusive

   o Should unions be given greater access to employees on the job during
organizational campaigns, and if so how?

   o What if anything, should be done to increase the probability that workers
who vote for representation and their employers achieve a first contract and
on-going collective bargaining relationship?

   o How might cooperation in mature bargaining relationships be increased?

                               EXHIBIT III-1
   Final Outcome of NLRB Union Representation Elections in Cases Closed
Year   Total     Total     % Won  Total     Size of   Newly    % of
        Number    Number          Eligible  Certified Units   Eligible
     Elections  Elections        Voters    (in % of           Voters
in                 Won                      Employees)       Certified
1950-54 5,906    4,257          72.1       715.541   554,098   77.4
1955-59 4,731    3,013          63.7       443,770   277,707   62.6
1960-64 6,780    3,944          58.2       495,593   273,066   55.1
1965-59 7,374    4,419          59.9       545,057   302,031   55.4
1970-74  7,911   4,297          54.3       538,108   248,402   46.2
1975-79  7,593   3,746          49.3       488,226   181,352   37.1
1980     7,296   3,498          47.9       478,821   174,983   36.5
1981     6,658   3,019          45.3       403,837   147,353   36.5
1982     4,247   1,857          43.7       258,626   86,439    33.4
1983       3,483   1,663        47.7       171,548   76,659    44.7
1984     3,561    1,655         46.5       211,696   92,231    43.6
1985     3,663   1,745          47.5       217,331   78,073    35.9
1986     3,663   1,740          46.5       223,018   76.272    54.2
1897     3,314   1,608          48.5      204,235    81,396    39.9
1988     3,509   1,736          49.5       211,438   85,525   40.4
1989     3,791   1,878          49.5       247,638   98,709   39.9
1990     3,623   1,795          49.5       231,069   79,814   34.5



   A 1988 Gallup poll found that 69 percent of Americans believe that "labor
unions are good for the nation as a whole." A 1991 Fingerhut/Powers survey
reported 60 percent of the general public agreeing (and 23 percent disagreeing)
that "unions have basically been good for American working people." A 1992
 Harris Poll showed that general approval of unions does not necessarily
translate into support of their stand on particular issues, such as on NAFTA.


   From the outset, the National Labor Relations Act contained the provision:
"Nothing in this Act shall be construed to authorize the Board to appoint
individuals for the purpose of conciliation or mediation or for economic
analysis." The paucity of analysis and data, other than operating statistics,
hampers efforts to study and appraise the work of the NLRB and the public
policies it administers.


   The estimate of 65 million is based on applying 74 percent to the 88.1
million total private sector wage and salary workers reported in U.S. Department
of Labor Employment and Earnings January 1994, Table A-23. The estimate of 74
percent is based on data in Table 1 of Dorothy Sue Cobbie's "Making
Post-industrial Unionism Possible" Rutgers University, January 7, 1994.


   See Robert LaLonde and Bernard Meltzer, "Hard Times for Unions: Another Look
at the Significance of Employer Illegalities," 58 University of Chicago Law
Review 953, 1991.


   The estimates are imperfect as a measure of discriminatory discharges during
elections. One problem is that they only include workers offered reinstatement
and exclude those offered backpay. Another problem is that some of the
reinstatement offers may occur in situations in which the union petitions for an
election but does not proceed to an election. There is no reason to expect these
problems to bias the trends over time shown in the Exhibit. Though not taking
issue with the Meltzer-Lalonde methodology and findings regarding the rate of
 illegal discharges during organizing campaigns, former NLRB Chairman Edward
Miller pointed out to the Commission that unions actually file objections to
employer conduct in only six percent of elections, and these objections are
found meritorious in only two percent of the cases.


   The NLRB does not have available statistics that show the number of unfair
labor practice charges against unions in certification elections, so Exhibit
III-4 cannot be replicated for unions. However, the NLRB tends to set aside an
election, and orders a new election, on a finding that a union has coerced
employees in their free choice.


   As former NLRB Chair Edward Miller pointed out to the Commission, the source
of delay is not at the Board's initial investigative stage. The Regional Offices
screen out or settle the bulk of charges and issue formal complaints in
meritorious cases within 45 days or so, a track record that just about any other
labor or employment agency would be proud to have. The crucial delay occurs at
the next stage, the administrative law judge proceedings, which typically takes
a year to complete, and then only with a recommended disposition to the Board
itself. Rather than superimpose on this administrative process the additional
avenue of interim injunction sought from judges, Miller would rather move the
trial of all NLRA unfair labor practice cases into a specialized federal labor
court which had full judicial authority to move as quickly and effectively as
the legal circumstances required. (See Edward B. Miller, An Administrative
Appraisal of the NLRB (Rev. ed. 1980).)


   The first study, by Les Aspin of reinstatment cases in New England in the
early 1960s, is summarized in Hearing on H.R. 11725 before the Special
Subcommittee on Labor of the Committee on Education and Labor,  90th Congress,
1st Sess. 3-12, 1967. The second study, by Elvis C. Stephens and Warren Chaney
of cases in Texas in the early 1970s, is reported in "A Study of the
Reinstatement Remedy under the NLRB," 25 Labor Law Journal 31, 1974, and "The
Reinstatement Remedy Revisited," 32 Labor Law Journal 357, 1981.


   Philip Ross, The Labor Law in Action; An Analysis of the Administrative
Process Under the Taft-Hartley Act, An independent Study Supported by the NLRB,
Typescript, 1966; Benjamin Wolkinson, "The Remedial Efficacy of NLRB Remedies in
Joy Silk Cases, "Cornell Law Review 1, 1969.


   The Board may delegate this authority to its Regional Office.


   See Clyde Summers, "Effective Remedies for Employment Rights: Preliminary
Guidelines and Proposals," 141 University of Pennsylvania Law Review 457, 1992.


   Philip Ross, The Labor Law in Action: An Analysis of the Administrative
Process Under the Taft-Hartley Act 12, An Independent Study Supported by the
NLRB, Typescript, 1966. Also see, Philip Ross, The Government as a Source of
Power. The Rule of Public Policy in Collective Bargaining, Brown University
Press, 1965, Theodore J. St. Antoine, "The Role of Law" in U.S. Industrial
Relations 1950-1980; A Critical Assessment, Industrial Relations Research
Association, 1981, pp. 172-77.


   An analysis done for the AFL-CIO's Industrial Union Department, Gordon Pavy,
"Winning NLRB Elections and Establishing Stable Collective Bargaining
Relationships With Employers," found that of NLRB certifications secured by
AFL-CIO affiliates in 1987, the union had by 1992 negotiated a  first contract
for 65 percent of the units and a second contract in just 47 percent (covering
59 percent of the employees).


   Because FMCS data do not give us the number of employees covered in different
situations, we apply the distribution of new certificates to the number of
workers in elections won.


   William N. Cooke, "Failure to Negotiate First Contracts," 38 Industrial and
Labor Relations Review 163, 1985.


   The polling data referred to in this section are detailed in Richard Freeman
and Joel Rogers, "Who Speaks for Us? Employee Representation in a Nonunion Labor
Market," from Bruce E. Kaufman and Morris M. Kleiner, eds. Employee
Representation: Alternatives and Future Directions 13, 2834, 1993.


   Professor Richard Hurd of Cornell and several union representatives provided
additional case studies of employee experiences.


   This is a conservative estimate obtained by applying 30 percent to the
approximately 58 million private non-agricultural wage and salary workers
covered by the law who are not union members. We obtained the 58 million by
adjusting downward the roughly 65 million private non-agricultural wage and
salary workers who are covered by the law by the 11 percent of workers who are


   Kate Bronfenbrenner and Tom Jurawich, the Current State of organizing in the
Public Sector: Final Report. Transcript, February 24, 1994.


                          Exhibit III-3
          Unfair Labor  Practice Charges Against Employers
Year*   Total     % of    Total         Total      Backpay    Employees
       Number    Charges  Number of    Number of   Awards      Offered
       of 8(a)   Found     8(a)(3)     8(a)(5)     (Number/   Reinstate
       Charges  Meritorious  Charges     Charges Average Amount)  ment
1950-54  4,345    32.9        3,036       1,266       2,940    $ 458    2,194
1955-59  5,175    21.8        3,993       1,047        1,627   495    9,437
1960-84  9,067    33.9        6,746       2,279         4,349   444    2,876
1965-69 11,397    37.4        7,657       3,902         9,156   517    4,180
1970-74 16,428    34.6       10,684       5,306         6,407   846    4,317
1975-79 25,199    37.9       15,912       7,420         8,729 1,607    4,817
1980    31,281    42.6       18,315       9,866        15,433 2,050   10,033
1981    31,273    40.2       17,571       9,815       25,793 1,415    6,463
1982    27,749    40.1       14,732      10,898           NA    NA     6,332
1983    28,995    42.5       14,866      12,211       17,984 1,713    6,029
1984    24,852    41.1       13,177      10,349       34,863 1,050    5,363
1985    22,545    41.4       11,824       9,186       18,482 2,066   10,905
1986    24,084    42.6       12,714      10,131       17,635 1,937    3,196
1987    22,475    41.4       11,548       9,760       17,175 2,093    4,307
1988    22,266    44.4       11,196       9,501       17,496 1,928    4,179
1989    22,345    45.0       11,567       9,479       18,956 3,007    4,508
1990    24,075    43.9       11,886      10,024       16,082 2,733    4,026
*Numbers represent annual averages.

                             EXHIBIT III-4
                    Discriminatory  Discharges During NLRB Elections(1)
Five Year Period  Reinstatement Ratio of Workers  % of Elections % of Workers
                 Offers Arising  Offered Reinstate-   Producing   Involved in
                 From Certifica- ment to Workers    Reinstatement  Elections
                  tion Elections(2)   Voting for Unions(3) Offers(4) Whose(5)
                                                              Units Voted to
1951-1955            608            1/689                 5%        75%
1956-1960            429            1/584               4%          59%
1961-1965           1019            1/272               8%          56%
1966-1970           1346            1/225               8%          54%
1971-1975           1473            1/171               8%          43%
1976-1980           2238            1/92                14%         37%
1981-1985           2855            1/38                32%         38%
1986-1990           1967            1/48                25%         38%

   (1) The figures in this Table represent annualized averages for each five
year period reported.

   (2) The figures in this column represent the number of all reinstatement
offers recorded by the NLRB, reduced to reflect only those resulting from
firings that took place during representation election campaigns. The figures do
not represent all election-time discriminatory discharges, but only those
leading to the particular remedy of reinstatement. In other words, they do not
account for 1) illegal firings not reported to the NLRB; 2) those reported to
the NLRB but not producing an NLRB charge or complaint; 3) those producing a
complaint but not a favorable resolution; 4) those resulting a favorable
resolution not including reinstatement, such as an award of back pay.

   Robert J. LaLonde and Bernard D. Meltzer developed the method for estimating
the portion of reinstatement offers attributable to election-period firings in
"Hard Times for Unions: Another Look at the Significance of Employer
Illegalities," 58 U. Chi. L. Rev., 953 (1991). The figure is  derived by 1)
multiplying the gross number of Board-adjudicated or settled reinstatement cases
by 0.51, the fraction that arises in the election context, and 2) multiplying
that product by 2.2, the estimated number of persons offered reinstatement in
each case. Lalonde and Meltzer looked at a period beginning with 1964, the first
year the NLRB reported the number of reinstatement cases (in addition to its
long reported figure for the number of individuals offered reinstatement). We
employed a method suggested by Professor Lalonde in order to extend this figure
back before 1964. We multiplied the number of individuals offered reinstatement
by 0.30, which represents the ratio between individuals offered reinstatement as
a result of election-period firings and all individuals offered reinstatement
for the period 1964-1969. Sources: 16-55 NLRB Annual Reports Table 4
(1953-1990), Table 3 (1951-1952).

   (3) This column shows how many workers voted to unionize for every one worker
offered reinstatement as a result of an illegal firing during election
campaigns. The figures are derived by dividing all workers voting to unionize in
NLRB elections by the number of election-time reinstatement offers (column one).
The figures may be turned into percentages simply by dividing the numerator by
the denominator. Thus, .14% of workers voting to unionize were fired and offered
reinstatement in the early 1950s, whereas 2% were in the late 1980s. The source
for the number of pro-union voters is 16-55 NLRB Annual Report Table 14

   The column analogous to this one in Lalonde and Meltzer's table contains two
errors which taken together, understate the steepness of the rise in the
percentage of union supporters illegally fired from the early 1960s to 1980s.
For the period 1964-1969, the appropriate figure is 11219, not 11209. For
1980-1984, the correct figure is 1148 not 1157. These corrections indicate that
illegal terminations were somewhat less of a problem in the early 1960s and more
a problem in the early 1980s than their table suggests. Their  mistake for
1964-1969 appears to be a simple arithmetical one. As for 1980-1984, they
arrived at the wrong figure by forgetting to eliminate the number of pro-union
voters in 1982 from the equation. The other side of the equation for 1982, the
number of "discriminatory discharges" (reinstatement offers), was already
eliminated because the NLRB did not publish the relevant figures for that year.

   (4) The figures in this column are derived by dividing the number of
reinstatement offers arising in the election context (column one) by the number
of collective bargaining elections. The source for the annual number of
elections is 16-55 NLRB Annual Report Table 13 ("RC" and "RM" elections only)

   (5) This column represents what one might call organized labor's effective
yield in NLRB elections. It reveals the percentage of workers in such elections
whose group ended up unionizing. The percentages are derived by dividing the
number of workers in units that voted to unionize by the total number of workers
eligible to vote in NLRB elections. The source for both halves of the equation
is 16-55 NLRB Annual Report Table 13 (1953-1990), Table 10 (1952), Table 12

                       EXHIBIT III-5
            Unfair Labor Practice Charges Against Unions
Year*   Total     % of         Total       Total      Backpay  Awards
       Number    Charges      Number of   Number of  (Number/
       of 8(b)   Found        8(b)(2)     8(b)(3)    Average Amount)
      Charges   Meritorious  Charges     Charges
1955-59  2,300     28.9          1,482       157        256       360
1960-64  4,231     30.5          1,827       284        201       494
1965-69  5,585     31.8          1,587       453        125     1,002
1970-74  8,657     31.8          1,743       653        324       763
1975-79  11,503    27.3          1,760       858        373     1,999
1980     12,563    29.7         1,690        913        285     1,740
 1981     11,882    28.3         1,513        945        460     1,619
1982     10,230    26.0         1,514       778         N/A       N/A
1983     11,526    27.8         1,749     1,158        437       1,055
1984     10,580    26.5         1,660       991        329     4,567
1985     10,065    28.7         1,420       825        158     5,940
1986       10,259    27.9         1,324       735        509     1,823
1987     9,495       27.7         1,298       716        171    20,549
1988     9,111     27.2           1,171       638        142     6,366
1989     9,928     26.5           1,250       616        210     2,758
1990     9,684     25.4         1,269         649        344     1,434

   * Numbers represent annual averages.

   SOURCE: Statistics provided by the NLRB to the Commission. Section (8)(b)(1)
charges against unions are for re-training or coercing employees in exercise of
their statutory rights. . . ; in (8)(b)(2) cases unions are charged with
discriminating against employees; in (8)(b)(3) cases unions are charged with bad
faith bargaining.

                           EXHIBIT III-6
          Estimates  of the Outcome of Certification Cases
                                             Fiscal Year 1986 to
                                               Fiscal Year 1993
                            Number of Cases      Percent  of Cases

Number of Certifications         10,783                100.0
Reason   for Closing the Case
Agreement Reached                6,009                  55.7
Diverse Factors for Closing        488                  4.5
Question of Representation         580                  5.4
Referred to NLRB                     563                  5.2
Plant Closed                         341                  3.2
Other                            2,802                   26.0
Strikes of Certification Cases      356                100.0
Agreement Reached                  191                 53.7
Diverse  Factors for Closing          3                  0.8
Question of  Representation          18                  5.1
Referred to NLRB                      27                  7.6
Plant Closed                         8                    2.2
Other                               109                  30.6
 SOURCE: Tabulated for the
Commission by the Federal Mediation and  Conciliation Service.


Allison Porter, Director of Recruitment and Training AFL-CIO Organizing
Institute "

   I believe regular people with ordinary concerns about their jobs . . . should
be able to choose union representation and have an accessible mechanism for
achieving it. Sadly, that is not the case in America today . . . When [workers]
hear what the process actually is -- signing up a majority, requesting the
federal government to conduct an election, then waiting several weeks or months
for an election to occur -- the first question you hear is, can I be fired? New
organizers are usually daunted by this question. "If I'm honest, I'll scare them
away. If I'm not, and something happens, how will I live with myself?". . . It's
every organizer's job to develop the ability to confront and work through
worker's fears. In my experience, fear is the number one obstacle to workers
supporting a union in an organizing drive. It starts out as fear of retaliation,
then becomes fear of losing what they have, fear of the union as it is described
by management, fear of strikes and plant closings, until finally it just becomes
fear of change."

Clifford Erhlich, Senior Vice President of Human Resources Marriott
International ". . .

   most American companies would prefer operating without a union present at the
worksite . . . [The reason is that] in the swirling seas of change sweeping over
the workplace there remains all too often one island of constancy - organized
labor's view of the employment relationship. That view, unfortunately, has kept
many labor leaders" in a mindset that sees employee needs and company interests
in perpetual conflict. I would refer the Commission to a quote from a recent
article in Labor Research Review by Joe Crump, Secretary-Treasurer  of the United
Food and Commercial Workers Local 951, who testified before a panel of the
Commission. "Organizing is war. The objective is to convince employers to do
something that they do not want to do. That means a fight. If you don't have a
war mentality, your chances of success are limited." If Mr. Crump's quote
represents how a union approaches an unorganized worksite, I have a difficult
time understanding who anyone should be surprised that most companies respond
in kind.


The Human Face of the Confrontational Representation Process "The federal
Commission on the Future of Worker Management Relations heard two stories about
those relations in Louisville yesterday. One story told of cutting-edge programs
for cooperation and training. The other told of workers trapped in . . . the
dark ages of labor-management antagonism." (Joe Ward, The Courier-Journal, Sept
23, 1993). Testimony given by Judy Ray at the Regional Hearing in Boston,
Massachusetts on January i, 1994 recounted: "I was a ten year employee of Jordan
Marsh, in Peabody, up until this day after Thanksgiving, on which I was fired. I
was fired, I truly believe, solely because I was a union organizer within the
store. I was a dedicated employee, for ten years, for that company . . .

   I cannot impress upon you what an organizer, what an employee who is just
fighting for their rights in a campaign, goes through this day and age. I
wouldn't have believed it, myself. I have been followed, on my day off, to
restaurants, by security guards with walkie-talkies. I had an employee, a
management person, assigned to work with me eight hours a day, five days a week,
who was told he was there solely to work on me, to change my ideas about unions.
I was timed going to the bathroom. I could go nowhere in my workplace without
being followed. It's a disgrace. It's harassment. beyond what I could ever tell
you. Unless you have lived through it, you couldn't know what it feels like. . .
 ."  n1 At its Regional Hearing in Atlanta on January 11, 1994, the working party
heard testimony from Mrs. Florence Hill of High Point, North Carolina, whose
firm, Highland Yarn Mills, decided to undertake a drive to decertify an existing
union. Mrs. Hill is the wife of the local union president:

   I was not allowed off of my little section that I worked in. When I'd go to
the bathroom, the Supervisor would follow me. Anywheres I went, I was being
followed. I'd go take my break; they'd cut me down to two 10-minute breaks and a
15-minute break. I was checked. I'd go through the mill. I'd always been a
happy-go person, I could speak and I -- you know, be friendly with people. But I
got, as time -- I'd have to hold my head down when I walked, because I didn't
know what I was going to see, I didn't know what these people were going to do
to me. . . .

   And then, the stress got so bad that I did have a heart attack. But when I
came back, they didn't let up on me. They continued even worse than what they
were doing in the beginning. And my super. visor made the remark that he didn't
know how I had been taking what I was taking without walking out the door or
dropping over dead. That was what they was waiting for, is for me to drop over
dead . . .

   And it was all because that we stood up for what we believed in, for what we
thought was right, and for what we thought the other people wanted. The people
wanted the union there; we've had it there all these years. And, yet, they did
this campaign against us, and it was terrible." In Louisville, the Commission
working group heard testimony from Carol Holman and Steve Lazar on September 22,
1993, about the blacklisting of nurses for seeking to exercise their legal
rights. Here is Ms. Holman's testimony:

   "In June of 1988 I was employed by Humana Audubon on Four East. Because of my
concern for understaffing and other conditions affecting patient care, I
became active in the NPO (Nurses Professional Organization). I openly spoke for
 the union. . . . Oh August 1st, 1989, I and my friend, who was also active in
NPO, were so frustrated and upset with the conditions of understaffing on our
nursing unit that we resigned our positions at Humana Audubon. . . .

   It was a time of the nursing shortage when all hospitals were desperate to
recruit nurse Jewish Hospital at that time was anxious to recruit nurses and
offered a hundred dollars to each -- to all nurses who agreed to come for an
interview. My friend and I both went to Jewish and were paid a hundred dollars
to do interviews. Jewish Hospital hired us for the Transitional Care Unit. The
critical care supervisor called us and had arranged for us to attend the
critical care classes. We had our physicals. TB skin tests, chest X-rays, and
other lab tests. We were told to report to work on TCU at Jewish on September
the 25th. .

   On September 20th we each received by UPS Next Day Air at our homes the
following letter from Jewish Hospital: Quote. "We regret to inform you that we
have no position of employment for you.". The letter was signed by the Vice
President of Human Resources at Jewish. My friend and I went to Jewish Hospital
and asked to speak with him. He was there, but would not see us. . . . On
September 26, Jewish Hospital ran a nurse recruitment ad in the Courier-Journal
listing TCU as a unit where positions were available.

   I had a very good evaluation at Humana-Audubon, a 3.6. A 3.0 is a
satisfactory-plus. A 4.0 is excellent . . . In all, I received on my evaluation
a total of 22 fours and fives. Despite this very good evaluation, Audubon marked
me as ineligible for rehire on the personnel form. . . .

   We knew we had been blacklisted . . . It was very scary when my friend and I
received the letters from Jewish Hospital denying us our TCU jobs for which we
had just been hired. We knew deep in our hearts that there was no reason for
this. Someone had to be out to get us. It was very devastating. . .

    Mr. Lazar, former manager in the employee relations department at Humana,
Incorporated, testified:

   "I was present in the office of the human resource director of Audubon
Hospital when he received a call from the human resource director of Jewish
Hospital about Carol and her friend. The conversation I overheard was directed
at the fact that both nurses were considered to be union red hots, very active
in the Audubon campaign, extremely pro-union individuals. The Audubon human
resources director went to so far as to say, "You probably don't want them
working for you.". . . "I fully expect that by testifying as I have today every
effort will be made by Humana to discredit me. But my testimony is not rumor, it
is not innuendo, and it is certainly not falsehood. Rather, I have told you what
I have seen, what I have heard, and what I have personally done to combat
unionizing efforts." In its East Lansing Hearings on October 13, 1993, the
Commission working parry heard the testimony of an employee in a unit that had
voted for a union but which had not been able at that time to negotiate a first

   "I am on the bargaining committee for a union certified to represent
employees of a food processor in Eastern Michigan . . . Because we are still in
bargaining, I'm not going to give my name or the employer's name, because I
don't know what he'd do if he knew I was even here right now. He might fire
me, he might not, I don't know and I don't want to take the chance.

   ". . . I make $ 6.80 an hour . . . About over two-thirds make less than $
6.00 an hour . . . We have no benefits, no health insurance, no meaningful
pension, nothing, nothing to go on. . . . So low wages and benefits were an
obvious reason why we went for the union.

   "And the other reason is, we have no voice in this work place. He don't
listen to anything we have to tell him. Example . . . five people come down with
some kind of rash that they got off of the sauce or something they  were allergic
to. Their skin started cracking, it started bleeding. He wouldn't even give them
gloves to wear . . . he told them if they wanted to go to the doctor they got to
go on their own and pay for it out of their own pocket. He wouldn't acknowledge
that it come from that shop.

   ". . . we started organizing in April of '92 . . . we won by a three to one
vote, and he filed objections to it . . . it took a year for certification . . .
after the certification he wouldn't bargain with us. . . . he offered us a raise
if we would sign a petition saying that we did not want a union there.

   "Then he withheld our annual wage increase, and we haven't gotten nothing
since. So when we filed these charges they were settled and that's when he come
to the table and started bargaining with us . . . We've been to seven meetings
that we've had with him; nothing's been done . . . He has not agreed to anything
. . .

   ". . . me and my fellow workers, we need our jobs. We don't want to strike,
we don't want to walk out . . . If we can't even get a first contract, we're in
big trouble, These stories are representative of testimony presented to the
Commission by individual citizens.


   n1 The NLRB issued a formal complaint against Jordan Marsh, alleging that the
store discharged her because of her union activities. On April 11, 1994, Ms. Ray
filed a suit in Essex County Superior Court for violting her civil rights
through intimidation and coercion, falsely imprisioning her for two hours before
firing her, defaming her character, injuring her career and causing her
emotional stress. See Meg Vaillancourt, "Clerk Wins NLRB Decisions, Sues to Get
Former Job Back," The Boston Globe, Tuesday, April 12, 1994.

Part B

Experience with "Contingent" Worked and Other Sector 1.  "Contingent"


   As noted in Chapter 1.20, one of the significant developments in the American
economy in the past decade or two-has been the growth in the number and
proportion of workers with relationships to those that provide job opportunities
that diverge from full-time continuing positions with a single employer. This
duster of types of worker- management relations, or self-management
arrangements, has been expanding, but there are few reliable statistics beyond
those summarized in Chapter 1.20.

   These marginal job relations to a single employer have always existed in
American labor markets. Hiring halls and various other arrangements have been
developed to match worker qualifications and availabilities with the fluctuating
and specialized demands of employers in such industries as maritime,
construction, home nursing, printing and hotel banquets. But these contingent
work relations now encompass many more workers and take ever more forms.  n1 The
term "contingent workers" often includes part-time workers, some of whom are
voluntarily part-time, some of whom would like full-time work, and some of whom
are multiple job holders. It also includes employees of temporary help agencies
-- who may be full-time workers -- and some of the self-employed including
"owner-operators" or independent contractors with only a single contract of

   The Commission encountered many reports of these diverse worker-management
arrangements in-its hearings and in written submissions:

   In the cleaning of office buildings, in some cities, owners have
sub-contracted the cleaning to businesses who may Perform the work with their
employees or even franchise parts of the work to groups of workers.  n2

   Many public and private employers have sub-contracted activities to
 enterprises using the same workers part-time performing identical tasks at lower
benefits and wage rates.

   In trucking, agriculture and construction the device of owner-operator has
expanded rapidly.

   Temporary work agencies have grown in white collar and specialized

   Homework and sub-contracting has expanded in a number of sewing industries.

   These developments reflect market pressures on labor costs and the need for
flexibility. They also at times result in the avoidance of social security
taxes, workers' compensation, unemployment insurance and benefits such as health
insurance and pensions. These arrangements often attract new immigrants,
minorities and women in the labor force. As Chapter 1.20 noted, the problem is
how to balance employers' needs for flexibility with socially determined job
protections and labor-relations statutes.

   Introduction of these contingent relationships just to reduce the amount of
compensation (whether wages or benefits) paid by the firm for the same amount
and value of work raises serious social questions. To the extent that free
collective bargaining is considered a valuable instrument for protecting the
economic and personal situation of both contingent and regular workers, the
predominant industrial model of unionism is somewhat ill-suited for this task,
based as it is on the actions and representation of a group of employees who
work together for a single employer. The NLRA framework for collective
bargaining was, however, primarily designed for thin kind of employment
relationship and union representation.

   Mr. John Sweeney, President of the SEIU, devoted a considerable part of his
testimony to the human and economic situation of the contingent worker. He and
other witnesses have placed the following important legal and  policy issues
before the Commission for its deliberations.

   o What is the proper interpretation of the "community of interests between
regular full-time and temporary or part-time workers for purposes of defining
the "appropriate unit" within which representation decisions are made and
collective bargaining carried on?

   o Should the definition of "employee" be expanded (or supplemented) to bring
under the NLRA workers who are labeled "contractors," but who function not as
entrepreneurs but as individuals in a dependent relationship with the firm(s)
for whom they work?

   o Should the definition of "employer" be retailored to include the enterprise
that owns the structure or finances the project on which work is being done, but
utilizes a contractor to hire and manage the people who perform this work?

   o Are the standard legal picture and restraints on representation,
negotiation, and economic pressure suited for an employment world in which
employee interests are focused much more on the sector within which they (hope
to) work regularly, rather than on the specific firm for 'whom they happen to be
working at any one time?

   While the contingent worker issue was identified by labor representatives,
the Commission realizes that it poses a number of important and complex
questions about the application and enforcement of employment laws, such as the
Fair Labor Standards Act, and labor-management statutes. The Commission intends
to devote more attention to this subject.

2. Construction Sector

   Some forms of "contingent" employment relationships have characterized the
construction industry for more than a century.

   The construction industry is large and diversified, widely spread throughout
the country with specialized contractors and a skilled and  relatively mobile

   o In June 1992 the industry was composed of 622,975 establishments with the
employment of 4.6 million. The industry contained 10.5 percent of all
establishments and 5.2 percent of all employment in the economy.

   o In June 1992 the industry contained 524,741 firms (legal entities), 11
percent of all firms.

   o Construction is an industry of small business. in June 1992 425,000 firms
had less than 10 employees (for a total of 1.15 million employees) while 120
firms had more than 1,000 employees (for a total of 290,000 employees).

   o The number of single proprietorships or independent contractors with no
employees has expanded greatly in the past several decades. One government
estimate places the increase from 687,000 in 1970 to 1.46 million in 1990.

   Many branches of the construction industry reflect significant cyclical and
seasonal fluctuations in employment.

   The major proportion of employees work on shifting construction sites which
often contain variations in employees and crafts during the course of a single
project or work site. These variations relate to the branch of the industry, the
size of the project, and the diverse practices of contractors under collective
agreements and those operating nonunion.

   The Commission heard sharply different testimony and points of view from
representatives of the collective bargaining and the nonunion segments of the
construction industry.  n4 The Commission would welcome further information and
analysis of some of the factual information in contention:

   The extent to which construction activity and employment is transitory by
firm -- and how this varies by sector and occupation and trade.  n5

   o The union-nonunion differences, if any, in occupational  safety and health
enforcement and industry and fatality rates, again identifying construction
sector characteristics and job classifications.

   o The union-nonunion differential, if any, m the expenditures made by
construction workers and firms in the acquisition and retention of skills
through apprenticeship and other training programs.

   Clearly, these and other questions are crucial to the Commission's appraisal
of the human and social consequences of worker-management transformations in the
construction work place.

   Also vital is evaluation of the difference, if any, that labor law has made
in the sharp drop in collective bargaining in the construction industry. The
Associated Builders and Contractors, Inc. believes that the true explanation for
the decline in building trade unionism is that construction workers now prefer
this group's "merit shops" to traditional union representation. The Building
Trades believes that it is employers, not employees, who have effectively made
the decision to deunionize this industry, a decision they have been able to
implement because of the apparent misfit between the general design of the NLRA
and the special features of construction employment.

   Though the original Wagner Act of 1935 made no exception for construction,
the NLRB quickly decided not to exercise jurisdiction over this industry (Brown
and Root, 1943). The Board adopted that "hands-off" policy because it believed
that the legal framework for certification and bargaining decisions by stable
units of employees could not sensibly be applied to a construction industry
workforce that regularly moved from job to job and employer to employer.
Formation and termination of labor-management relationships were left to
voluntary actions by the parties themselves, with construction unions having the
instrument of picketing and boycotts through which-to secure their position in
the industry.

    In 1947, however, the Taft-Hartley amendments to the NLRA clearly brought
construction under the orbit of the statute by subjecting building trade unions
to section 8(b)(4)'s new ban on secondary boycotts and jurisdictional disputes.
The significance of this new legal status became clear with the Supreme Court's
1951 D Building Trades decision, which restricted picketing at a construction
site by a union representing one building trades craft that was also being
worked by other contractors and employees from other trades. (As noted earlier,
Section 8(b)(4) was and is an unfair labor practice provision with effective
enforcement teeth).

   When Congress returned to the NLRA in 1959, its Landrum-Griffin amendments
acknowledged in two ways the special features of the construction employment
relationship. n6 One was an exception to the new ban on "hot cargo" agreements,
and the other was permission given to building trade unions and contractors to
enter into "prehire" agreements, with NLRB-conducted votes reserved for after
the fact, if the employees so desired. Subsequent decisions by the NLRB have,
however, restricted the scope and effectiveness of both of these exceptions, at
least as compared to what the building trade unions believed they had secured
from the Congress in 1959.

   Even more important, in the early 1970s construction firms developed and the
NLRB endorsed a device called "double-breasting" (see Peter Kiewit Sons, 1977).
What this label refers to is the ability of a single construction enterprise to
operate one corporate entity for purposes of securing a contract on a project
whose terms of employment are set by union agreements, and another corporate
entity to work on nonunion projects at lower wages and benefits.

   In the view of the Building and Construction Trades Department, the major
issues in the legal framework of worker-management relations in the construction
industry requiring change include:

   o On the expiration of a pre-hire agreement, a contractor is free currently
 to repudiate the agreement without the obligation to bargain. (John Deklewa and
Sons, 282 NLRB 1375, 1987).

   o A contractor signatory to a collective bargaining agreement is free to
establish a construction entity under its control that is not bound by the
agreement and can bid and perform work through this entity on a non-union basis.
(Peter Kiewit Sons' Company, 206 NLRB 562). The term "double breasting" or "dual
shop" is used to characterize such activity.

   o A general contractor and its sub-contractors or separate prime contractors
working on the same job site are separate entities for purposes of the secondary
boycott prohibition. (NLRB v. Denver Building and Construction Trades Council,
341 U.S. 675, 1951).

   The Associated Builders and Contractors, Inc. opposes changes in the law
advocated by the Building and Construction Trades Department. In particular, it
opposes the "anti-dual shop" bills, the proposed change in "pre-hire"
agreements, advocating that contractors be free to call for an election and
escape at any time, under Section 8(f), and it opposes the changes urged in
Section 8(e).

   The Associated Builders and Contractors, Inc. provide a further list of
matters that include the following to achieve "true law reform": federal laws to
prohibit labor violence; enforcement of the decision; amendment or repeal of the
Davis-Bacon Act; make it unlawful for a public or private employer to require a
sub-contractor to adopt a labor agreement as a condition of performing work,

   With the preceding brief background, the Commission poses the following
questions for further presentations and deliberations:

   o Is the source of the decline in collective bargaining in the industry the
unattractiveness of union representation to the present-day construction worker,
or resistance to unionization on the part of construction  employers, or the
inappropriateness of the general legal framework for representation to the
special features of construction employment and what importance should be
attached to each?

   o Which, if any, of the provisions of the NRLA (or interpretations) should be

   To the extent that changes are warranted in the legal treatment of
construction employment under the NLRA, can some or all of these be accomplished
by the NLRB (perhaps via the Board's rule-making procedure), or should these
issues by reserved for Congressional action?

3. The Railway Labor Act

   The special legal treatment sought for the construction industry would not be
unprecedented. Indeed, the Railway Labor Act (RLA) of 1926 was this country's
first national labor-management relations law one that was extended in 1936 to
embrace the fledgling airline industry. The Commission held a session on October
20, 1993 at which management and labor representatives from both these
industries offered their views about the present-day operation of the RLA. They
also submitted subsequent statements and comments.

   The factual evidence presented to the Commission reflects changes in the
economy, the development of labor laws enacted after RLA, and changes in the
Administration of the RLA. While representatives of railway and airline labor
and management recognize that "there is much that could be changed for the
better" under the RLA, they were virtually unanimous in contending that the
primary purpose of the Act has been satisfied. That is, disputes between the
parties have been settled through the Act's provisions for negotiation and
mediation without resort to strikes or major disruption of the national
transportation system. These representatives were united in the common and
repeated refrain with respect to the RLA: "if it isn't broke, don't fix it."
 Nonetheless, the evidence reflects that there is room for improvement.

   A brief overview of the history of the Act, and highlights of the significant
differences between the RLA and the National Labor Relations Act follow. These
elements are critical to understanding the impact of the economic changes that
have occurred since the RLA's adoption.

A. Historical Overview

   Enactment of the RLA in 1926 was the product of a consensus reached by
railway management and railway unions, in stark contrast to the intense
labor-management and partisan political conflicts that took place over enactment
of the NLRA and all later amendment efforts. The original intent of the RLA was
to provide mechanisms that would guarantee the continuity of interstate
transportation service in the event of labor conflict. The unique provisions of
the RLA were deemed necessary due to the crucial role of rail transportation in
the free flow of interstate commerce.

   The RLA created different mechanisms to achieve this goal, based on whether
the dispute was a "major" dispute or a "minor" dispute. (These disputes are
roughly analogous to disputes over collective agreements (major) and grievances
(minor)). If the parties are unable to resolve a "major" dispute through direct
negotiation, the dispute is subject to mandatory mediation through the National
Mediation Board. If mediation efforts do not succeed, the parties have the
option of proceeding to arbitration. If either party rejects the offer of
arbitration, there is a 30 day status quo period, during which time the
President may appoint an Emergency Board. Emergency Board have been invoked 224
times in the last 67 years,  n7 191 times in the railroad industry and 33 times
in the airline industry. Congress has been called upon 17 times to extend the
status quo, to impose a settlement, or to provide for final and binding
arbitration in the railroad industry.

    In exchange for labor giving up the right to strike over "minor" disputes,
these disputes are subject to mandatory arbitration. The government bears the
expense of railroad arbitrations. The budget for grievance arbitration averaged
$ 2.5 million a year for the period 1983 to 1992, or an average cost of $ 264
per grievance closed. Arbitrators in the airline industry are appointed to
System Boards of Adjustment: each party shares the costs of the neutral
arbitrator on the System Board.

   The RLA was amended in 1981 to establish a special procedure for publicly
funded and operated rail commuter service, including Amtrak. The procedures
provide not only for a emergency board to report the facts (including
recommendations), but should that report not settle the dispute, another
emergency board may be created requiring each side to submit final and binding
offers for settlement. This emergency board shall select "the most reasonable
offer" and prescribed penalties are to apply to the party refusing to accept the

B. Differences Between the RLA and the NLRA

   The railroad and airline industries under the RLA differ in a number of
respects from other private sectors governed by the NLRA.

   o Enactment and amendment of the RLA, and appointment of members to the
National Mediation Board, has regularly been the product of consultation and
consensus. Enactment and revisions of the NLRA and appointments to the National
Labor Relations Board have been characterized by acrimony and conflict.

   o Coverage under the RLA is limited to two major industries, railroads and
airlines. The NLRA covers all other private industries, with specified

   o Representation under the RLA is based on the majority vote of all employees
eligible to vote through a mail-in ballot. Representation under the NLRA is
based on the majority vote of those who do vote, almost always in  elections
conducted at the work place.

   o Employees under the RLA are represented for purposes of collective
bargaining in nation-wide "class or craft" units for a single employer.
Employees under the NLRA are placed in bargaining units that rest on the NLRB's
judgment of their "community of interests," typically on a site by site basis.

   o Employees in the two industries covered by the RLA are almost entirely
represented by labor unions and governed by collective bargaining agreements.

(Total employment in railroads in 1992 was 275,000, down from 1.2 million in
1950; in airlines, employment has risen from 76,000 to 540,000.)

   o Arbitration over miner disputes is mandatory under the RLA. Arbitration is
a negotiable and occasionally contentious issue under the NLRA.

   o Secondary picketing during a labor dispute is permissible under the RLA; it
is prohibited in industries covered by the NLRA.

   o Under the NLRA, collective bargaining agreements typically have specific
termination dates. Contracts do not expire, as such, under the RLA. The
contractual terms continue until Section 6 notices are filed and negotiations
take place to amend, in whole, or in part, existing contracts.

   o Under the RLA, the parties cannot seek self-help, i.e., strike or lock-out,
until they are specifically released by the NMB, which in most instances does
not occur for many months or years. Under the NLRA, parties can engage in self
help if they follow the notice requirements provided in the NLRA and in the
collective bargaining agreement.

C. The Changing Economy

   The changing environment depicted in Chapter I has had a distinctive impact
on the railroad and airline industries.

   o From the RLA's inception until the end of the 1970s, the two  industries
subject to the Act were highly regulated. Deregulation (of airlines in 1978 and
railroads in 1980) had two major effects on the RLA industries. First,
deregulation exposed the two industries to increased price competition, which
resulted in downsizing or elimination of a number of employers. Second, those
firms that survived found themselves competing against other firms covered by
the RLA as well as some covered by the NLRA.

   o In the 1930s, a railroad strike had great potential to shut down the entire
country. A national or regional railroad strike rapidly affected many other
industries that depended upon the railroads for essential transportation
services. A strike could soon become a serious threat to the nation's economy
and welfare. Today, the impact of a railroad or airline strike is questionable.
On the one hand, adoption of "just in time" inventory management systems, such
as those used by the major auto companies, risks shutdown of manufacturing
operations within 24 to 72 hours of a rail strike. Moreover, in some parts of
rural america, just as in the 1930s, there are no other viable freight options
besides railroads. On the other hand, in most settings, the external impact of a
strike has been sharply diluted. Due to the fractionalized nature of both train
and air services, there generally are other transportation methods available. In
1926 railroads carried 80 percent of inter-city freight. Today, they carry under
30 percent.

   o In the 1930s, the role of railroads (if not airlines) was unique in that no
other industry had such an impact on the overall economy. Strikes in other
industries principally affected the companies involved, their employees,
customers and suppliers. This statement is no longer true. Other industries, e.
g., communication, have as great or greater impact on the economy as a whole as
did the railroads six decades ago.

   o In the 1930s, coverage under the Act was clearcut. Firms providing similar
services operated under the same rules. Today, due to the  complexities of
corporate structuring and the combinations of services provided, the line
between an RLA covered and non-covered firm has become sometimes ambiguous. (For
example, Federal Express is covered by the RLA while its competitor, United
Parcel Service, is covered by the NLRA. The growth of inter-model transportation
further complicates the separation.) As in other industries, the line between
employer and employee is no longer clearcut. Not only has changing organization
of work created new roles and blurred distinctions between managers and
employees, but employee ownership and participation on corporate boards has
become a regular response to financially troubled airlines.

   o Administration of the RLA has become characterized by increased
governmental involvement and excessive delay.

   Over the last decade, average time taken to grant or dismiss certification
petitions has ranged as high as 175 days for airlines and 130 days for
railroads. During that same period, the number of RLA arbitration cases has
reached as high as 14,000 in a single year -- an overall growth of ten percent
during a period when employment has dropped by 30 percent.

   -- In 1992 there were a total of 11,708 pending cases in all boards to hear
minor disputes. In 1992 there were 7,755 cases docket and 6,951 case closed. The
National Mediation Board reports that "virtually all cases submitted to the
National Railroad Adjustment Board have required the services of neutral

   -- There is increasing litigation over what constitutes a "major" or a
"minor" dispute, producing considerable delay before the cases can even make
their way into the proper dispute system.

   -- Average time spent in mediation of "major" disputes trebled over the last
decade -- now taking three years after the parties had already engaged in direct

    -- Out of the 17 times that Congress has had to intervene in rail disputes,
five occurred in the last ten years, giving Congress a role it does not relish.
As Congressman Swift, chairman of the subcommittee that had handled the last two
national rail shutdowns, noted in his written statement to the commission:
"Congress is not a body mandated or temporarily suited to interfere with complex
labor-management disputes, some of which require the experts in the field to
negotiate for 4 years and still they do not reach agreement. Yet, it comes to
this body and we are somehow supposed to. . . resolve what the experts cannot
resolve in years."

D. The Parties' Recommendations

   As noted at the outset, representatives of both labor and management in the
major railroad and airline firms concurred in their judgment that, by any
measure, "RLA labor relations are in better working order than labor relations
in the NLRA sector, the Federal Labor Relations Act sector, or any of the state
or local public or private labor relations law sectors." For this reason, these
constituencies stated emphatically to the Commission that they wanted their
labor relations to be governed by the RLA, not placed under the NLRA. They
further agree that "there is no compelling need to seek changes in the RLA and
to risk the unforeseeable consequences that might result. Any defects in the
system are attributable to its administration, not its statutory design."

   In contrast, the group of smaller Regional Railroads of America, a coalition
of 117 class II and Class III carriers with an aggregate of 10,000 employees, as
well as some of the transit systems that have rail operations under the RLA,
expressed a need for change. The problems unique to small railroads are
highlighted by the class and craft distinctions which prevent the parties from
cross-utilizing employees and can result in separate units comprised of just two
or three people. The regional railroads claim that the resulting cumbersome
negotiating process prevents their smaller lines from reaching  effectively to
today's competitive marketplace, and that a collective bargaining process more
like that available in the traditional industry contracts governed by the NLRA
could be more effective.

   While recommendations for change were sparse, the following suggestions were
made. Some parties called for the use of mandatory arbitration of major disputes
to eliminate the need for emergency boards. Others called for a prohibition
against permanent striker replacement to achieve the same results. Some
advocated use of the NLRA model that counts only votes that are actually cast,
rather than counting abstentions as a "no" vote. Some recommendations were made
to revise RLA definitions so as to reduce the amount of litigation over who is
covered and/or what constitutes a "major" or "minor" dispute.  n8 


   This initial factual inquiry has raised a number of important questions about
the operation of the RLA. For example:

   o Does interstate transportation still require al of the distinctive
provisions of the RLA? Would the parties' interests be better served by
utilizing (perhaps modified) provisions that now exist under the NLRA?

   o If the special provisions of the RLA are still needed, are the right
industries covered? Specifically, are there other industries that should today
be brought within its coverage, and are there segments of the railroad and/or
airline industry that need to be exempt from the RLA? How is the experience with
commuter railroads to be evaluated? Even if the right industries are covered,
have changes in the country's economic structure made the RLA's coverage tests

   o Has the administration of the RLA become so burdensome that it is

    o Should the federal Government continue to pay for grievance arbitration
handling pursuant to Railroad Adjustment Boards and/or Public Law Boards under
the RLA?

   The Commission is mindful of the labor and management representatives who
testified that the RLA was just fine: "If it isn't broke, don't fix it]" There
was also, though, testimony to the contrary conclusion including the concerns
voiced by members of Congress. While the Commission is respectful of some key
parties' evident which to be left alone, its stated mission requires that it at
least consider these questions. The Commission is aware that some of the problem
areas can be corrected under the current RLA regime (for example, by the
National Mediation Board changing its procedures for resolving disputes more
expeditiously and by more aggressive and effective mediation).

   Before the Commission makes any recommendations, it will explore these
questions and explore whether the problems can and will be addressed by the
parties and the NMB in the context of the existing statutory framework.



   See, Francoise J. Carre, Virginia duRivage, and Chris Tilly, "Piecing
Together the Fragmented Workplace", Unions and Public Policy on Flexible
Employment, Lawrence G. Flood, ed. (forthcoming), and Dorothy Sue Cobble,
"Making Postindustrial Unionism Possible", Rutgers, October 1993.


   The Commission was told of a large Seattle cleaning contractor which, after
its low bid won the contract for a number of commercial buildings, sold the
franchise to clean individual floors to a largely immigrant workforce.


   "Labor Relations and the Contingent Work Force: Lessons from the Women's
 Garment Industry," a statement submitted by Jay Mazur, President, International
Ladies' Garment Workers' Union, April 29. 1994.


   The Building and Construction Trades Department, AFL-CIO testified on
December IS, 1993 and the Associated Builders and Contractors, Inc. on January
5, 1994. Also see the Supplemental Statement of the Building and Construction
Trades Department, AFL-CIO, of March 29, 1994 and the comments of the Associated
Builders and Contractors, Inc. and the comments of the Associated General
Contractors of America, both dated April 29, 1994. There are numerous other
contractor associations in the industry that have presented no views.


   Data were furnished to the Commission from jointly-trusted benefit funds that
give some indication of the variability of employment, at least in the unionized
sector; 1) The Massachusetts Laborers Benefit fund, for instance, reports for
1993 that of 8967 employees, 5208 worked for a single contractor averaging 1033
hours But 1780 employees worked for 2 contractors, 871 worked for 3 contractors,
482 worked for 4 contractors, 252 worked for 5 contractors. 144 for 6
contractors, and so on, with 1 person having reported working for 18 different
contractors in a single year, 2) The National Electrical Benefit Fund reports a
similar pattern of variability on a national basis. In 1992, while 63 percent of
employees worked for a single contractor, 18 percent worked for two, 9 percent
worked for three, 5 percent for four, 2 percent for five, and on up to those who
worked for ten or more contractors in the year. 3) The Bricklayers & Trowel
Trades International Pension Fund reports the following pattern of variability
on a national basis. In 1992, while 58 percent of employees worked for a single
contractor 23 percent worked for two, 9 percent for three, 5 percent for four,
2 percent for five, and on up to those who worked for ten or more contractors in
the year.

   The garment industry has also long been characterized by contingent work
relationships with its heavily immigrant and female labor force and with highly
competitive manufacturing and sub-contracting arrangements. Congress expressly
modified the NLRA in 1959 to give garment industry unions protection from "hot
cargo" and secondary boycott provisions in cases involving "an integrated
process of production in the apparel and clothing industry".


   In addition, a presidential commission was appointed under Executive Order
10891 to consider a series of work rules and manning issues. Report of the
Presidential Railroad Commission, Washington, DC., February, 1962.


   See National Research Council, Transportation Research Board, Compensating
Injured Railroad Workers Under the Federal Employer Liability Act, 1994.

Chapter IV

Employment Regulation, Litigation and Dispute Resolution

1. Introduction

   The National Labor Relations Act (and the earlier Railway Labor Act) were the
pioneering forms of federal legal regulation of labor management relations at
the workplace. By the 1990s, though, a very different model of legal
intervention, employment law, has come to play a much more prominent role both
on the job and in the courts.

   American employees have now been promised a wide variety of legal rights and
protections by both federal and state law-makers. These include minimum wages
and maximum hours, a safe and healthy workplace, secure and accessible pension
and health benefits once provided, adequate notice of plant closings and mass
layoffs, unpaid family and medical leave, and bans on wrongful  dismissal: these
and all other employment terms and opportunities are to be enjoyed without
discrimination on account of race, gender, religion, age, or disability.
Implementation and enforcement of these legal rights against noncomplying
employers requires litigation in the ordinary courts and/or administrative
proceedings before specialized agencies. The dramatic surge in employment law
disputes over the last quarter century has raised questions about the burden and
distribution of these legal costs. At the same time, the complicated, lengthy,
and expensive processes involved make it difficult for many ordinary employees
to pursue a claim through these administrative and court proceedings. This is
especially true for low wage workers, and those who lack the support of a union
or other advocacy group in pursuing their legal rights.

   Concern over these issues gives rise to the third charge to the Commission:
"What (if anything) should be done to increase the extent to which work-place
problems are directly resolved by the parties themselves rather than through
recourse to state and federal courts and government regulatory bodies?"

   Crucial to any such policy judgments are appraisals of both whether workplace
litigation imposes unnecessary costs on employers, the immediate target of
employment regulation, and whether the current procedures meet the needs of
ordinary workers who are the intended beneficiaries of such public programs.

2. Evolution and Present State of Employment Regulation

   The present body of federal and state employment law -- statutory,
administrative, and judicial -- fills many volumes. Employment laws and
regulations have expanded at an especially rapid rate since 1960. One study
found that from 1960 to 1974 the number of regulatory programs administered by
the Department of Labor tripled, growing from 43 to 134.  n1 A current count
would place this number much higher.  n2 Some highlights are noted here.

 A. Fair Labor Standards in the 1930s

   An important legacy of the New Deal, the Fair Labor Standards Act of 1938
(FLSA), established a minimum hourly wage and required time and one-half pay for
overtime hours worked by nonexempt employees. Administration of the FLSA, which
covers both private and public employers, is the responsibility of the Wage and
Hour Division of the Department of Labor.

B. Birth of Antidiscrimination in the Mid-1960's

   The modern birth of federal employment law was inspired by the civil rights
movement of the 1960s, which produced three major. statutory regimes.

   o The Equal Pay Act of 1963 (formally an amendment to the FLSA) prohibited
gender-based differences in wages and benefits, unless the differential could be
justified by factors not based on sex (such as seniority).

   o The Civil Rights Act of 1964, in particular, its Title vII, prohibited
discrimination by private firms (with at least 25 employees), not just in pay
but also in hiring, firing, and other employment decisions, on grounds of race,
sex, religion, and national origin.

   o The Age Discrimination. in Employment Act of 1967 (ADEA) extended the
antidiscrimination principle to age-based decisions affecting employees over 40
years old working for finns of 20 employees or more.

   The ADEA and Title VII are administered by the Equal Employment Opportunity
Commission (EEOC), now located in the Department of Justice; however, legally
binding verdicts under these statutes must be rendered through lawsuits filed in

C. Expansion of Antidiscrimination Law in the Early 1970s

   A number of important expansions in the breadth and death of federal
antidiscrimination law took place in the early and mid-1970s.

   o In two major rulings, the U.S. Supreme Court found that employer use of
 apparently neutral factors (such as high school diplomas or test scores) could
be a violation of Title VII if this practice had a disparate statistical
impact on members of a particular group and the employer could not justify its
practice as a "business necessity" (Griggs v. Duke Power (1971)); and that the
civil rights legislation of the post-Civil War era allowed minorities to sue for
general and punitive damages suffered because of intentional employer
discrimination in an employment contract (Johnson v. Railway Express

   o Executive Order 11246, first promulgated by President Johnson in 1965,
amended by Executive Order 11375 in 1967, to ensure equal employment
opportunities with firms that had contracts with the federal government, was
intensified by President Nixon so as to direct all such contractors to develop
and file affirmative action plans that set numerical goals and 'timetables for
elimination of under-utilization of women and minorities in their labor forces.

   o The Equal Employment Opportunity Amendment Act of 1972 extended Title VII's
coverage to state and local governments and to private firms with at least 25
employees, and allowed the EEOC, as well as the affected employee, to sue
employers for violations.

   o The Rehabilitation Act of 1973 prohibited employers with federal contracts
from discriminating against employees with handicaps.

D. New Regulatory Targets in the 1970s

   In the early 1970s the federal government enacted several statutory programs
directed at serious workplace problems that potentially affect all classes of

   o --The Occupational Safety and Health Act of 1970 (OSHA) imposed on
employers the general duty to furnish their employees "a place of employment. .
.free from recognizable hazards that are causing or are likely to cause death or
 serious physical harm," as well as to comply with a growing array of specific
safety and health standards developed by OSHA in the Department of Labor.

   o The Federal Mine Safety and Health Act of 1977 (MSHA) established analogous
statutory and administrative obligations to protect the safety and health of the
nation's mine workers.

   o The Employee Retirement Income Security Act of 1974 (ERISA) enacted a
program for regulating access, vesting, security, and fiduciary responsibilities
in pensions and health and welfare benefits provided by employers to their

E. Judicial Protection Against Wrongful Dismissal

   From the mid-1970s through the mid-1980s, there were no major legislative
innovations in employment regulation. During that period, though, the state
courts across the country were transforming their traditional hands-off posture
towards employment at will into a measure of legal protection against wrongful

   o One such source of protection is a tort action for discharges in violation
of public policies, such as retaliation for an employee refusing to violate the
law (e.g., commit perjury) on behalf of the employer, or for asserting their own
legal rights (e.g., claiming workers' compensation benefits).

   o A second source of protection is contractual, based on violation by
employers of express or implied representations of job security (e.g., through
personnel handbooks).

   o A third source of protection is the general doctrine of "good faith and
fair dealing," treated by some state courts as contractual and by others as
tort-based (with the label used by judges making a real difference in potential

   By the early 1990s, 45 states had adopted one, two or all three of these
legal doctrines, each of which is enforceable by individual suits  filed in state
or federal courts. Then,

   o In 1987, the state of Montana enacted a broader Wrongful Discharge From
Employment Act (WDFEA) which gave all nonunion employees broad legal protection
against any form of "wrongful" dismissal, though with more limited damages in
most cases.

   o In 1991, the National Conference of Commissioners on Uniform State Laws
agreed upon a Model Employment Termination Act (META) with important
similarities and differences from the Montana example. META has not yet been
adopted by any state.

Resurgence of Statutory Regulation Since the Late 1980s

   Beginning in the later years of President Reagan's Administration, and
continuing to the present time, there has been a revival of Congressional
enactments targeted at workplace problems.

   o The Immigration Reform and Control Act of 1986 (IRCA) made it illegal for
employers to hire illegal aliens and for employers to discriminate against legal

   o The Employee Polygraph Protection Act of 1988 (EPPA) made it generally
illegal for employers to force their employees to submit to lie detector tests.

   o The Worker Adjustment and Retraining Notification Act of 1988 (WARN)
required 60 days notice by covered employers (those with 100 employees or more)
of pending plant closings and mass layoffs (generally those layoffs affecting 50
or more workers).

   o The Americans With Disabilities Act of 1990 (ADA) prohibited discrimination
by employers (as of July 1994, those with at least 15 employees) against
disabled workers, and required reasonable accommodation of the workplace to the
employee's disabling condition.

   o The Civil Rights Act of 1991 revised several important  Supreme Court
rulings of the late 1980s (most prominently, Wards Cove Packing v. Antonio
(1989), which had relaxed the Court's earlier "disparate impact" standard of
discrimination in Griggs v. Duke Power (1971)), and significantly increased
potential damages for intentional violations.

   Most recently, the Family and Medical Leave Act of 1993 (FMLA) required
public and private employers (with more than 50 employees) to grant up to 12
weeks of leave from the job (without pay but with continued health benefits)
to employees who had given birth to or adopted a child, or who themselves, their
spouse, or their children had developed a medical condition needing care.

   In its forthcoming study,  n3 the GAO identified a general framework of 26
key statutes and one executive order whose thousands of implementing rules
constitute an intricate web of workplace regulation. A description of this major
framework of federal workplace regulation is summarized in Exhibit IV-I. (See
page 129.)

   The number of laws and regulations governing the workplace have increased
substantially since the 1960s creating a complex and expensive set of
requirements for employers to administer and for employees in pursuit of their
legal rights.

3. Nature of Employment Regulation

   The body of employment law just recounted constitutes a very different model
of government intervention in the workplace than does the national labor
relations law depicted in Chapter III. The NLRA provides a variety of
protections aid procedures for employees choosing whether or not to pool their
collective resources to try to negotiate better compensation and conditions of
employment. The law, however, basically takes a hands-off attitude to the
process and results of free collective bargaining between private employers and
   Employment law, by contrast, focuses on issues that are felt to be
sufficiently vital to the body politic not to leave to private
negotiations--whether individual or collective. Some such concerns are directly
financial: (e.g., what are the minimum wages that should be paid to people at
work (under FLSA), and what must be done to insure the value and security of
retirement income promised for the future (under ERISA)). But as described
above, many employment laws tend to focus on value-laden issues like racial and
gender discrimination, occupational hazards, privacy invasions, and the like.
Public policy holds that all employees have equal protection against denial of
their rights in these areas, whatever their (or their employer's) market power.

   The reason these social standards are announced in mandatory form is
recognition that some employers (perhaps also employees and their unions) are
tempted by the financial and non-financial gains from non-compliance with these
public standards. Equally important, law-abiding employers need protection
against the unfair competition from non-complying employers' lower labor costs.
Enforcement of employment law is pursued either through specialized
administrative agencies (such as OSHA), or regular courts and juries (as under
state wrongful dismissal law), or a combination of the two (the variety of
antidiscrimination laws).

   Handling and resolving disputes under such law enforcement vehicles requires
considerable financial expenditures from employers, employees, and the public. A
conservative estimate is that for every dollar transferred in litigation to a
deserving claimant, another dollar must be expended on attorney fees and other
costs of handling both meritorious and non-meritorious claims under the legal
program.  n4 Employers regularly spend much more than these direct costs of
litigation to develop new personnel practices, operational procedures and
equipment, and other measures to comply with the regulations.

    The difficulties encountered in fitting regulations to the diverse and
changing employment relationships found in the modern economy and the many
trade-offs among different policy objectives give rise to a continuous stream of
questions and debates over the merits of specific employment regulations.
Consider just a few of the current controversies brought to the Commission's

   o Should the fact that salaried employees are given unpaid time off work for
personal reasons mean that they (and their colleagues in the same positions) are
entitled under FLSA to be paid the overtime premium for extra hours that the
employer requires them to work?

   o Is obesity a disabling condition that should trigger protection of the
antidiscrimination and reasonable accommodation requirements of the ADA?

   o Does the transformation in technology and family life require different
legal treatment of unconventional work schedules, and indeed of work performed
entirely at home?

   o Has the host of federal regulations and recordkeeping promulgated since
ERISA, intended to enhance the financial viability and accessibility of pensions
and other benefits, in fact served more to reduce the willingness of employers
to offer these benefits to their workforce?

   o How, if at all, can one address under OSHA the serious hazards posed by
guns and cigarettes to people working at their jobs?

   o Is a mandate that employers pay for (the bulk of) their employees' health
insurance the ideal vehicle for securing comprehensive and affordable health
care coverage for American workers and their families?

   o Which employer(s) are or should be held responsible for enforcing labor
standards (e.g., safety and health) for temporary or contract workers?

   Although concerns such as these are often raised about specific  rules, the
forthcoming GAO study referred to earlier found that most employers and union
leaders accept the need for workplace regulations and support the broad social
goals embodied in the laws governing the workplace. But these respondents were
critical of the complexity and the "command and control" orientation of the
agencies that administer and enforce these laws. What they desire is a more
service-oriented approach to the administration of workplace laws.

   It is not the Commission's task to judge the substantive merits of any of
these laws or regulations. Instead, the question before the Commission is
whether more efficient and equitable ways can be developed to administer,
enforce, and resolve disputes involving the law of the workplace. Specifically,
are there alternative methods for prescribing regulations, administering
complaints and resolving disputes that arise under the variety of legal regimes
-- federal and state, legislative and judicial -- summarized above?  n5 A
further question is whether alternative dispute resolution (ADR) mechanisms can
render the positive benefits promised by regulation more accessible to and
effective for ordinary workers.

   Most employers and union representatives support the social goals of
workplace laws and regulations but see them as highly complex and unresponsive
to their needs. They would like to see a more service-oriented approach adopted
to the administration and enforcement of workplace laws and regulations.

   It is increasingly difficult to write and enforce standard regulations that
fit well with the diverse employment settings and workplace and the changing
workplace practices found in the contemporary economy. This is particularly true
for the growing number of temporary or contract workers and the firms that
employ them or utilize their services.

4. Trends in Employment Litigation

    Exhibit IV-2 offers a glimpse of the array of forums, procedures, and
remedies available under this country's law of the workplace. (See page 132.)
 n6 Some cases the individual employee alone can bring (e.g. , wrongful
dismissal suits); others only the administrative agency can file (e. g., FLSA).
Some cases go directly to court (wrongful dismissal); some remain within the
agency (OSHA); some go to the agency for investigation and then to the courts
for adjudication (ADA), while some conduct adjudication within the agency but
leave enforcement (and review) up to the courts (NLRA). Some legal rights carry
open-ended compensatory and punitive damages (wrongful dismissal); some provide
for general damages under a ceiling, but attorney fees are also assessed against
losing employers (Title VII; ADA); while (as set forth in Chapter III) the NLRA
is unique in restricting the damages assessed against guilty employers to the
net back pay lost by the employee -- along with the prospect of reinstating the
employee if the latter is willing to return to the position from which he or she
was fired.

   Table IV-3 (see page 134), based on suits in federal court, provides as good
a statistical index as is available of how fast and how far employment
litigation has been rising.  n7  (There are no systematic records of the rate of
state court filings, whether the trends over time or the breakdown by type of
suit). By the early 1970's, many of the key features of federal statutory
protection were in place. During the two decades from 1971 to 1991, total civil
suits filed in federal court were up 110 percent. Interestingly, (non-asbestos)
personal injury suits, the usual targets of litigation critics, were up only 17
percent, not appreciably different from population growth. While suits under
labor laws had actually dropped slightly, business-related suits by Fortune
1,000 firms had more than doubled. However, the annual rate of employee suits
against employers was five times the number of twenty years earlier -- and this
was before the Americans With Disabilities Act of 1990, the Civil Rights Act of
 1991, and the Family and Medical Leave Act of 1993 had come into effect.

   In fact, the true leap in employment litigation was even higher than that
visible in federal court figures. Though the precise numbers and trends are not
available, it is clear that wrongful dismissal cases comprise a major share of
employment suits filed in state courts. In 1971, there were only a handful of
such discharge suits, because the doctrinal underpinnings for such claims had
not yet been fashioned by state supreme courts. By the early 1990s, the best
estimate we have is that employees are now filing 10,000 or so wrongful
dismissal suits annually, with a total of 25,000 such cases now pending (the
bulk in state courts).  n8 Adding these state court numbers to the federal court
figures in Exhibit IV-4 (See page 135) makes the aggregate rise in employment
litigation even steeper.

   Lawsuits filed in court are only the tip of the legal iceberg. In contrast to
judicially-developed wrongful dismissal law, legislative programs give primary
(under Title VII) or exclusive (under OSHA) jurisdiction to a specialized
administrative agency. Exhibit IV-2 shows that in 1993, the EEOC received nearly
90,000 employee claims of discrimination by employers, up from 56,000 in 1981
(and up tenfold from 1966). The number of such administrative proceedings is
roughly ten times the number of antidiscrimination suits eventually filed in
court (only a handful of which are filed by the agency instead of the employee).
In 1993, the Wage and Hour Division of the Department of Labor was receiving
46,000 employee complaints under the FLSA and initiating more than 2300 suits,
while OSHA was receiving over 10,000 complaints and conducting nearly 60,000
inspections, leading to 9,000 cases. While a considerable portion of such
government action potentially affords legal relief to employees with meritorious
claims, every such action imposes legal costs on the targeted employers, many of
whom turn out to be fully in compliance with the law.

   Access to legal relief is not uniformly distributed across the  labor force,
especially under those laws that require the individual employee to initiate a
lawsuit to secure a binding ruling. For example, only about one m ten suits
under civil rights legislation is filed by an employee still on the job.  n9 By
contrast with the early life of Title VII, the vast majority of such suits
currently complain of discriminatory firings, rather than about a refusal to
hire in the first place. Such ex-employee plaintiffs are disproportionately
drawn from the ranks of executives and professionals. These are the people whose
lost earnings and personal characteristics make them the best bets for plaintiff
lawyers to make the substantial investment needed to challenge in court an
employer with its (usually) much greater resources.

   Verdicts in employment litigation regularly reach six and even seven figures.
The prospect of such awards does serve as a deterrent to improper management
decisions (though sometimes a source of unduly defensive personnel practices).
The overall pattern of jury awards does, however, display a rather lottery-like
response to the harms inflicted on individual employees.

   The administrative procedures and remedies used to enforce workplace laws
vary widely, involve multiple agencies from different departments of the federal
government, and are administered on a stand-alone basis with little or no regard
for overlap or conflicting requirements.

   The number of employment suits in federal courts increased by 430 percent
between 1971 and 1991. Another 10,000 cases charging unlawful discharge are
filed annually in state courts.

   The EEOC handles approximately 90,000 complaints per year, compared to 56,000
in 1980.

   Access to legal relief through the courts is limited for the majority of
employees whose earnings are too low to cope with the high costs and contingency
fee requirements of private lawyers.

5. Private Dispute Resolution Alternatives
   Two broad approaches have been suggested for reforming the current mechanism
for implementing employment law: private alternatives for dispute resolution
(ADR), and more coordinated administrative regulation, perhaps capped by a
single labor and employment court with jurisdiction over the broad array of
legal rules described earlier. The private alternatives are discussed in this
section and the administrative and judicial options are taken up in the next

   The option that attracted the most attention and debate before the Commission
was private resolution of public law disputes in the employment relationship.
'This approach is commonly labeled alternative dispute resolution (ADR). ADR can
take on a variety of forms including informal problem solving processes, peer
review panels, ombudsman systems, grievance procedures, mini-trial, mediation,
and arbitration.

   Practitioners of ADR suggest that these procedures work best when integrated
into a system that begins with effective organizational policies and practices
that limit occurrence of problems before they arise, provides informal processes
for individual and group problem-solving of issues or conflicts that do arise,
and includes formal appeal and dispute resolution procedures.  n10 In turn, for
these internal procedures to be used to full advantage, they need to have the
necessary due process features. Moreover, neutrals who resolve claims within
these systems need to have sufficient substantive expertise to warrant deference
to their decisions by the public agencies and courts responsible for the laws
involved. Finally, most experts in dispute resolution stress the importance of
involving the parties covered by the system in its design and oversight.  n11

A. Mediation

   Under "mediation" the parties try to settle their dispute voluntarily, but
with the assistance of a third party who serves as a channel of  communication
and advice about mutually acceptable resolution of the issues. Ultimately,
though, each side retains the prerogative to reject a proposed settlement and
proceed to litigation. Under "arbitration," by contrast, the parties agree that
their legal dispute will be authoritatively resolved by a private person whom
they have jointly selected, rather than pursued to the courts for a jury trial.
A third option, fact-finding with or without recommendation or non-binding
arbitration, is a blend of the two: the parties submit their cases to a third
party who gives them a written decision, but a decision that each has the option
of rejecting and going off to court (subject perhaps, to certain sanctions if
their case does not fare so well in court).

   Mediation, if successful, is advantageous to both sides. They get finn
resolution of their legal conflict without the expense and delay of protracted
litigation, and on terms that the parties themselves control, rather than being
subject to the judgment of an outside tribunal applying public law. Mediators
often provide real assistance in settlement negotiations by facilitating private
conversations that explore the zone for a "win-win" consensus among the two
sides. These potential gains are the reason the EEOC and the Department of Labor
have been experimenting with mediation of employment law suits.  n12

   One difficulty with mandating mediation -- whether by legal directive or at
the option of either side -- is that if this process does not succeed in
resolving the dispute, additional time and money will have to be. expended by
the parties who still must go to court to get a binding decision. There is good
reason to believe that mediation would be a valuable tool for resolving certain
disputes; it benefits not just the immediate parties, but also the agency
burdened with a large and fast-growing caseload, and thence other parties who
are at the back of the agency's long line. To be cost-effective, mediation of
legal disputes should occur at a key point in the litigation process. The
 parties should be far enough along that they have discovered what they need to
know to make an intelligent judgment about how to resolve the matter
voluntarily. They should not have gone so far, though, that almost all of the
pre-trial costs have been incurred and the parties are either committed to going
to trial or are ready to settle themselves, without outside intervention.

   Since the most propitious time can vary considerably from case to case,
another possible option is for the agency to assemble a group of seasoned
outsiders who can offer those parties who want it some expert and reliable
advice about where they could reasonably compromise from their original
positions. If settlement negotiations still fail, the parties could be assured
that what the mediator has learned from them would not figure in the agency's
decision about whether to file charges or a law suit.

B. Arbitration

   Arbitration, by contrast, produces a final and binding adjudication of the
employment dispute. If the dispute poses complicated questions of fact or law,
the arbitration proceeding will require a hearing at which both sides are
represented by legal counsel or other experienced advocate. By comparison with
litigation in court, arbitration can secure considerable savings in both the
time and money that must be expended for such authoritative legal resolution.
 n13 Arbitration entails much less paperwork, preliminary depositions and
motions, and post-hearing briefs and appeals than does the winding path to and
from the courthouse. Equally important, the arbitration hearing is scheduled at
a time convenient for the parties and the person they have picked to decide
their case, rather than placed at the end of a long line of cases filling the
dockets of the court or agency responsible. For a smaller expenditure than going
to court, the parties entrust their fate to a decision-maker whose previous
track record they knew about and whom they decided to use, rather than a jury
 for whom this is usually the first and last legal experience.

1. Grievance Arbitration in Union Settings

   While arbitration has had a long history in commercial contract disputes, its
appearance m the workplace in substantial volume post-dates the National Labor
Relations Act of 1935. In almost every industry, unions and employers have
negotiated into their collective agreements a system of grievance arbitration to
resolve disputes about how their contract provisions should be interpreted and
applied. (This labor-management innovation took place in a legal and industrial
relations environment in which the likely alternative to arbitration was a
strike or lockout, not a lawsuit.)

   Grievance arbitration developed under collective bargaining meets many of the
requirements of effective dispute resolution system design. It is a voluntary
system. adopted through negotiation to fit the particular circumstances of the
different employment settings and therefore builds participation of the parties
into its design, administration, evaluation, and modification. It rests on a
foundation of day-to-day interaction among workers, union stewards, and first
line supervisors where the vast majority of problems are resolved informally
without ever entering the formal procedure. It allows for the parties to reach
settlements at multiple steps in the process up to and sometimes during the
arbitration hearings. Arbitrators, chosen by the parties for their specialized
knowledge and expertise in labor relations, are limited to interpreting the
parties' rights under the contract and therefore cannot expand or reduce the
substantive rights of either party.

   By 1960, the system of grievance arbitration was so widespread in collective
bargaining and had achieved such a high degree of confidence that the Supreme
Court, in three cases that became known as the "Steel-workers' Trilogy," gave
strong judicial endorsement to the labor arbitrator's jurisdiction and final say
about a labor contract. The effect of these three decisions was that the court
 would defer to arbitrators' awards on nearly all substantive questions and only
review arbitration decisions for procedural or due process irregularities.

   Grievance arbitration has proven to be a flexible instrument that has, from
time to time over its long history, been combined with other dispute resolution
techniques to enhance its effectiveness and lower its costs. For example, labor
and management have sometimes used mediation of grievances to increase the
number of cases resolved prior to arbitration. Between 1980 and 1992, the
Mediation Research and Education Project at Northwestern University Law School,
a non-profit organization that conducts grievance mediation, reports that of the
2,220 cases it handled, 82.6 percent were resolved through mediation. The
average cost for the mediator in 1990 to 1992 was $ 393 per case, compared to an
average arbitrator's fee during this time of approximately $ 1,800.  n14

2. Grievance Arbitration in Nonunion Settings

   Some nonunion firms have also adopted forms of grievance arbitration. A
recent study  n15 found that 45 percent of large nonunion firms had some form of
employee grievance procedure, versus 98 percent in all unionized firms. In the
nonunion setting, senior management usually made the final judgment about
whether to uphold or reverse the personnel decision being challenged by an
employee (whereas in unionized firms, final authority is lodged in a neutral
arbitrator selected by both sides). The study also found that nonunion employees
faced significant risks in their future prospects with the firm if they took
issue with their supervisor's action through such a review process.

   Shortly after the Steelworker Trilogy rulings came the surge in employment
legislation and regulation. Unlike the collective agreement, these laws created
public rights that could not be waived or altered private agreement, and they
entrusted interpretation and enforcement of the law's terms to a body selected
by and accountable to the broader community, not the parties to an  immediate
dispute. Thus, in the early 1970s, the Supreme Court ruled (in Alexander v.
Gardner-Denver (1974)) that a unionized employee with a racial discrimination
claim was not bound by nor required to have the claim disposed of by the
arbitrator under the labor agreement; the employee was free, instead, to pursue
the case in federal court. That refusal to defer to the collectively bargained
system was applied by the Court to other civil rights laws (Section 1983 in
McDonald v. City of West Branch, 1984) and to employment legislation generally
(to the FLSA in Barrentine v. Arkansas-Best Freight System (1981)). Since the
substantive rights established by public statutes could not be waived or altered
by private agreement, the Court was concerned about entrusting administration of
legal claims of individual employees to a grievance procedure negotiated by
employers and by unions and to private arbitrators whose jurisdiction and
experience was primarily based on the interpretation of labor agreements.

3. Arbitration Under Individual Employment Agreements

   By the early 1990s, sentiment had begun to change about the virtues of the
ADR alternative to litigation. Thus, in the 1991 Civil Rights Reform Act, the
Congress stated:

   "where appropriate and to the extent authorized by the law, the use of
alternative dispute resolution, including settlement negotiations, conciliation,
facilitation, mediation, fact finding, mini-trials, and arbitration, is
encouraged to resolve disputes arising under the Acts and provisions of Federal
Law amended by this law."

   That same year, the Supreme Court was confronted (in Gilmer v.
Interstate/Johnson Lane Corp. (1991)) with the question whether to require
arbitration of a nonunion employee's claim of age discrimination in violation of
the ADEA. The Court majority decided to enforce the employee's agreement to
arbitrate even such public law disputes, distinguishing Gardner-Denver and other
 precedents from the union context on the basis that nonunion workers had sole
control over their claims and the arbitrator was empowered to address the
non-contractual issues.

   There is disagreement about the legal scope as well as the policy merits of
the Gilmer ruling.  n16 What is still up in the air post-Gilmer, is whether the
Supreme Court will treat Congress' decision in 1925 to exclude from the FAA all
contracts of employees then engaged in interstate commerce as excluding the
contracts of all employees who are now potentially subject to Congressional
regulation under the present reading of the constitutional commerce clause.
Whatever the Court's eventual verdict, a sound judgment about whether it is
worthwhile public policy in the 1990s to facilitate arbitration of employment
rights cases should not turn on what Congress intended in the 1920s to be an
endorsement of arbitration of commercial contract disputes.

   The pros and cons of this form of ADR for statutory claims of employees are
hotly contested at present.  n17 Proponents of arbitration believe that this
procedure actually strengthens enforceability of the substantive rights
guaranteed by the law, by expanding access for those people whose cases would
otherwise not be heard (particularly lower-paid workers with less obvious, but
still meritorious, legal claims).

   Some experts have expressed misgivings about the type of arbitration system
endorsed in the Gilmer case as a model for resolving employment disputes
involving public law. Few are concerned about an agreement to use arbitration
arrived at by both parties after a dispute has arisen. In this setting the
plaintiff (usually a former employee) is advised by a lawyer, and can freely
decide that private arbitration is truly preferable to pursuing this particular
case in court. The reason arbitration is rarely agreed to at this stage is that
the employer and the employee each prefer to take quite different kinds of cases
to court.  n18 By contrast, the type of pre-dispute arbitration arrangement seen
 in Gilmer is devised by employers or their associations and presented to
newly-hired employees on a "take it or leave it" basis. while the labor market
does permit some negotiation and variation in salaries and benefits, it is
hardly likely to let employees insist on litigating, rather than arbitrating,
future legal disputes with their prospective employers.

   The fact that employment arbitration is not a particularly voluntary
procedure as far as individual employees are concerned is not a sufficient
reason for rejecting this option. The alternative of litigation in court or
before an administrative tribunal is hardly voluntary either. The
employee-plaintiff has no other option but to expend the time and money needed
for legal resolution of a claim of a claim.

   A crucial fact, of course, is that it is the employer that unilaterally
develops the arbitration procedures that (nonunion) employees are contractually
bound to use. That means that important quality standards should be met by such
a private procedure before it may be enforced against a plaintiff with a public
law claim. As the Supreme Court acknowledged in Gilmer, if Congress or the
courts have decided that it is in the public interest to guarantee employees
certain fundamental rights, this policy judgment must not be evaded or diluted
through private procedures that cannot fairly and effectively address employee
claims that their rights have been violated.

   Employer representatives who addressed the Commission on this topic accepted
this fundamental principle.  n19 The difficult practical issue concerns the key
safeguards that must be built in to any employment ADR model. Some of the
questions regarding these safeguards are listed below.

Bilateral Arbitration

   Should the employer also have to commit itself to arbitration of all
employment disputes it might have with (former) employees covered by this
procedure (e.g., claims of violation of trade secret or noncompete covenants)?

 Selection of Arbitrator

   Should a neutral arbitrator for each case have to be agreed-to by the
individual employee with the claim, or should the employer be entitled to name a
roster of arbitrators (or even a permanent umpire) for all claims by its entire
workforce? Should some kind of certification of arbitrators handling public law
disputes be required from either arbitration associations or the agency
responsible for enforcing the legislation in question (e.g., the EEOC for
anti-discrimination claims)?

Arbitration Costs

   Should the fees and expenses of the arbitrator be borne entirely by the
employer, or be divided equally between the two sides, or divided between the
parties but with a cap on the employees' share? Should the employer (and
possibly the employee) be required to pay the entire cost of arbitration if the
other party wins the case?

Arbitration Procedure

   Should each side have a right to discovery of relevant documents and to
deposition of representatives of the other side, and if so, with any limits to
use of such pre-hearing procedures? Should the arbitrator have the authority to
issue subpoenas to secure the presence of reluctant witnesses?

Arbitration Decision

   Should the arbitrator have the same broad remedial authority as would be
available to a court or to an administrative agency hearing this type of
employment law dispute? Should the arbitrator be required to issue a written
decision containing both detailed findings of fact and explicit analysis of all
the relevant legal issues?

Arbitration Rulings

   Should arbitration rulings in employment disputes be a matter of public
record or kept confidential? Should arbitration rulings be subject  to the same
right of appeal or judicial review as is normal with trial court or
administrative enforcement of the statute in question, or be subject only to the
extremely narrow scope of review of grievance arbitration (after the
Steelworkers Trilogy)? Should an arbitration verdict unfavorable to an
individual employee affect the prerogatives of the public enforcement agency to
file and pursue a claim in court about the same dispute?

Participation in Design and Oversight

   Should employees have a voice in the design and oversight of the arbitration
system? If so, how can this be achieved?

   The current debate about the use of private arbitration relates not simply to
employer-designed procedures (post-Gilmer), it also requires rethinking employee
use of union-negotiated procedures (post-Gardner-Denver). For example:

   Should unions and employers include in their grievance arbitration systems a
right of individual employees to secure resolution of legal claims and a
directive to the arbitrator to consider them? If this is done by the parties,
should union-represented employees be required to use this procedure to dispose
of federal law claims? Should they be entitled to use this procedure for state
law claims?

C. Internal Workplace Dispute Resolution Procedures

   Grievance arbitration procedures under collective bargaining or in most
nonunion settings are limited to the scope of issues covered in the bargaining
agreement or in the written personnel policies of the company. Yet increasingly,
the problems that arise at the workplace involve issues and sometimes involve
employees or managers not covered by a bargaining agreement. The increased
diversity in the workforce and in workplace issues has led to the adoption of a
variety of procedures for handling complaints of any type in organizations. Many
of these procedures include a designated professional, often with the (Swedish)
 title, Ombudsperson, who is responsible for handling and seeking resolution of
employee complaints as they arise. As MIT Ombudsperson Mary Rowe pointed out to
the Commission:

   "We've been hearing about saving the courts from traditional problems and
overload of traditional channels. There are, in addition, peer problems,
problems between managers, for example, or between workers, or disputes from
managers about harassment by subordinates, as well as the typical
labor-management problems you re all used to"

   In establishments with union representation, these professionals must work to
supplement but not substitute for the established grievance procedures or other
informal problem-solving processes between union and employer representatives.
In both union and nonunion situations, the role of these professionals is to
help apply or to supplement, not to modify or substitute for, existing
personnel policies. There are no reliable national estimates of the extensive-
ness of these procedures, nor are there any systematic studies of their
effectiveness. Several analyses have documented, though, that properly
functioning internal dispute systems can be cost effective for an organization.
 n20 Exhibit IV-5 (See page 136) lists some of the features professionals
believe need to be built into effective workplace dispute resolution systems.

   These internal dispute resolution systems tend to embody multiple options for
handling complaints: ranging from informal counseling of the individual on how
to deal with the problem or with a fellow employee, to mediation and
fact-finding, and in some cases, culminating in binding arbitration.

   The existence of multiple options for resolving issues is viewed as
especially important for the handling of interpersonal issues such as sexual
harassment. The processes used to deal with these issues vary depending on the
nature of the complaint, the wishes or willingness of the complainant to pursue
 the issue through a formal or public process, and the subjective nature of the
evidence that is often involved.

   The limited amount of published information on these systems makes it hard to
evaluate their effectiveness at this point in time or the extent to which those
in place embody these design features. While most of these systems appear to
provide multiple options, they are paid for, staffed, and managed by the
employer. Thus, standing alone, they do not serve as a complete substitute for
enforcement of worker rights through recourse to a public agency or the courts.
 n21 The question, however, is how to build on the features and experiences of
these internal dispute resolution systems in ways that integrate the private
procedures at the workplace with public agencies and the courts.

D. Joint Safety and Health and Other Workplace Committees

   Well designed grievance procedures and arbitration models may prove a
valuable alternative for resolving the kinds of employment problems that would
otherwise be channeled into a lawsuit. These procedures are not, however,
well-suited for addressing ongoing problems facing the workplace as a whole:
whether it be occupational hazards (under OSHA); the financial viability of the
company's pension plan (under ERISA); devising alternatives (including
retraining) to mass lay-offs (under WARN); eliminating sexually hostile
environments (under Title VII); devising reasonable accommodation to the special
needs of disabled workers on the job (under ADA). Implementation of public
policies and protections in these spheres has primarily relied on specialized
administrative agencies.

   Vice President Gore's 1993 Report, Creating a Government That Works Better
and Costs Less, underlines the limitations and failings of use of a single
centralized agency to monitor and secure compliance with quality standards
ordained by public policy for millions of workplaces across the nation.
 n22 Speaking specifically about OSHA, the Report stated (at  p.62):

   "Today 2400 inspectors from OSHA and approved state programs try to insure
the safety and health of 93 million workers at 6.2 million worksites. The system
doesn't work well enough. There are only enough inspectors to visit even the
most hazardous workplaces once every several years and OSHA has the personnel to
follow up on only three percent of its inspections."

   The Vice President proposed, instead, to draw upon the efforts and insights
of those actually on site to figure out ways to make our workplaces safer,
fairer and more secure.

   Employees, the intended beneficiaries of these public policies, can play a
valuable role in enforcing the laws. Properly trained, equipped and organized,
employees on the job are in a good position to monitor whether their employers
are complying with the government's standards. Working together, employees and
managers can also figure out ways of achieving more of these goals at lower
costs to their firms and the economy.

   That is why joint safety and health committees (JSHCs) are the most common
form of employee participation program aimed at employee concerns about
conditions of work (as opposed to employer concerns about productivity and
quality). A 1993 National Safety Council Report found that JSHCs exist in 75
percent of establishments with 50 or more employees, and in 31 percent with less
than 50 employees.  n23 Indeed, ten or so states now require by law such a
committee (or other forms of employee involvement in this area). In many of
these states the joint committees were legislated with trade-offs involving
other provisions of workers' compensation and disability provisions.

   What JSHCs do in practice varies significantly from one work site to another.
The more effective programs offer technical training to committee members, have
regularly scheduled meetings and well-defined internal procedures and
 responsibilities, conduct periodic on-site inspections to monitor compliance
with safety regulations, and recommend (and usually secure) improvements in
employer practices and equipment to avoid identifiable hazards. The best such
committees are integrated with other employee participation and quality
programs. These high-quality JSHCs tend to be found in unionized settings or in
larger nonunion firms with a commitment to the advanced human resource
techniques described in Chapter II. Union committees, even in small firms, have
access to outside technical assistance.

   The Commission heard favorable testimony from both business and labor about
their experience under the Oregon statute, in particular. (A recent Wall Street
Journal article also quoted positive comments from a number of small employers
about their experience in Oregon and other states with such laws.) The reasons
cited include fewer OSHA inspections and fines, more effective efforts at
reducing workplace hazards, and lower workers' compensation costs. (Workers'
compensation premiums in Oregon declined by approximately ten percent a year
during the first three years, 1991 to 1993, in which its law requiring employee
safety and health participation was in effect.) A recent study documents how
effective Oregon's new brand of on-the-job safety regulation and administration
has proven (in non-union as well as unionized firms).  n24 The Commission was
also provided with evidence of the considerably longer experience with such
"internal responsibility" procedures in Ontario, which shows that higher quality
committees lead to lower injury rates for employees.  n25

   Private arbitration has served as an effective and flexible process for
resolving workplace issues covered under collective bargaining agreements.

   The Supreme Court, through the Gilmer decision, has introduced the
possibility of an expanded role for arbitration of a wider array of employment
law issues. A variety of questions regarding the design of such systems will
need to be addressed if arbitration is used to resolve a broader  array of
employment disputes and is to apply to a broader range of employees.

   A wide variety of alternative dispute resolution procedures have arisen in a
number of workplaces to deal with issues or individuals not covered by a
collective bargaining agreement. These procedures expand the options available
for resolving workplace issues.

   Safety and health committees are widely used in the U.S. and other countries.
Although their effectiveness varies considerably, well designed committees that
are supported with adequate training and resources and integrated with other
organizational policies and practices have demonstrated their effectiveness in
improving workplace safety.

6. Integrated Employment Regulation

   Shifting disputes from courts (and juries) to private mediation, arbitration,
or in-house dispute resolution is just one component of possible institutional
reform. Another would be to create a specialized tribunal--a single employment
court--to handle the entire array of employment (and labor) law disputes.

   As the Preface noted, while it is not possible to import an institution found
in other countries into the United States it is important to learn from
experiences abroad. The task of consolidating the mix of agencies detailed in
Exhibit IV-2 would be enormously difficult and take considerable time in view of
the diversity of statutes, administrative agencies, rules, and remedial

Labor Courts

   Most other countries have tribunals that specialize in workplace disputes
(see Exhibit IV-6, page 137). n26 Typically, the tribunal is composed not just
of professional neutral lawyers, but also of lay representatives of business and
labor. The procedures are considerably more informal and relaxed than standard
judicial proceedings, and extensive use is made of mediation  sessions with the
parties. Either the labor court can itself issue immediate injunctive relief
when necessary, or it can petition the regular court for such orders that are
routinely granted. There has been little systematic study of the impact of the
labor court model on comparative costs and effectiveness in enforcing of
employment law in these other countries.

   The Commission recognizes an important objection that can be raised to the
idea of a single employment tribunal. Are not the differences between, for
example, civil rights law and occupational safety and health law, or between
pension law and collective bargaining law, so deep and complex that it would be
a mistake to assume that a single group of judges could develop the necessary
experience and sophistication in all these fields? (People who take that
position cannot, of course, easily defend the current breadth of federal and
state court jurisdiction in this country, not only over employment, but all
other fields of law.)

Unified Agency Administration The Commission does want to highlight for further
discussion the question whether there should be more integrated administration
of our numerous federal employment statutes, even granting the difficult odds
against creation of a single Article III labor court for final adjudication of
all such cases. It is important to try to improve resolution of immediate
disputes in the employment relationship. However, such disputes should not
simply be viewed as isolated events affecting only the immediate claimants. This
country needs to develop institutional arrangements that will do a better job of
integrating the host of legally distinct programs all trying to influence and
reshape different parts of the same employment body.

   The following are just a few of the questions that one might address from
that perspective.

   o If the Wage and Hour Division of the Department of Labor discovers that an
employer is regularly violating Fair Labor Standards requirements,  is that a
reason for alerting OSHA about the need to do a sudden and thorough work site
inspection to see whether the same management is also endangering the lives and
limbs of its workers?  n27

   o Since state-appointed tribunals under the federal Unemployment Insurance
law now must decide whether an employee was discharged for good reasons and
thereby disentitled to UI benefits, could such tribunals also function as the
body that awards employees damages against those employers who fire them without
good reasons?

   o Should the Department of Labor establish a single investigative staff to
coordinate enforcement of its extensive body of regulations, and a single
adjudicative tribunal for interpretations and enforcement rulings under all
these laws?

   o Should various agencies that enforce specific employment regulations that
are located in different federal departments outside the Department of Labor be
included in a single integrated agency responsible for enforcing all employment
regulations and resolving employment law disputes?

   o Should the judgment about whether to add or delete a new employment
regulation or doctrine under one statute be assessed and instituted only as part
of a broader process that considers the new rule's interplay with and cumulative
impact on other existing (or proposed) employment mandates?

Negotiated Rule Making

   Apart from legislative enactment, the promulgation of regulations offers
another opportunity to reduce the extent to which workplace problems are
resolved without the current level of recourse to regulatory agencies and the
courts. Under the Administrative Procedures Act, regulators draft rules, publish
them in the Federal Register, hold hearings and receive comments, and then issue
the final regulations. The comments often present extreme views of the most
 interested parties and their versions of the facts. The scene is set for
extended litigation on the legislation and what the regulations mean in their
finest detail.

   Beginning in 1975, the Labor Department began to experiment with negotiated
rule-making, under which interested parties were invited to meet with agency
officials to present and to discuss various views of the facts and issues.
 n28 Studies could be agreed upon by mutually respected sources and, with the
assistance of a mediation process, a degree of consensus on many facets of the
prospective regulations could be reached. Such discourse was designed to
concentrate on practical achievement of legislative objectives, rather than on
esoteric technicalities. The agency would then issue a draft regulation in the
Federal Register for general comment, to be followed by the final rules. The
mediation process was designed to. produce more understandable and acceptable
regulations, within the intent of the legislation, and thereby to reduce
subsequent litigation.

   The process has now been fully endorsed and authorized bathe Negotiated
Rulemaking Act of 1990.  n29 Despite the encouragement of this legislation,
negotiated rule making has seldom been used in the employment law field (by
comparison with environmental regulation). Negotiated rule-making's potential to
reduce recourse to state and federal courts and administrative agencies for
workplace regulation has yet to be achieved. The Commission needs to understand
why so little use has been made of these methods since negotiations appear to be
such a natural tool for effective regulation at the workplace. The process,
however, requires different attitudes and skills from the parties.

   Most other countries resolve employment disputes in a dedicated labor court
rather than through the civil court system as in the U.S. A number of experts
testified about the merits and limitations of adopting this approach in the U.
   A number of suggestions were presented to the Commission for integrating some
or all of the administrative agencies responsible for different employment laws.

   Negotiated rule making has been used effectively but infrequently by the
federal government to adapt regulations to fit the modern workplace.

7. General Observations

   While the various private and public procedures for resolving disputes were
discussed separately in previous sections, experience suggests it is best to
view them as interrelated. Thus in considering new approaches to resolving
workplace issues it is useful to think in terms of at least the following four
stages to an overall system:

   (1) the practices used to solve workplace problems before they arise or
informally before they enter the formal system;

   (2) the options available to resolve disputes privately without involvement
of public agencies or the courts;

   (3) the administrative processes involved in enforcing the law and resolving
disputes; and

   (4) the judicial procedures used to review or appeal private and public
administrative decisions and rulings.

   The last three decades have witnessed an explosion in the breadth and depth
of legal regulation of the American workplace. Federal and state legislatures,
courts, and administrative agencies have tried to respond to the social and
economic concerns of employees by establishing a host of legal directives
telling employers what they must do or they may not do.

   The virtue of a legal mandate that offers the employee recourse to a judicial
or administrative tribunal is that this provides some assurance that crucial
employee inter 'ests in a safe, secure, and fair working environment will not be
 ignored. As we saw from Exhibits IV-I and IV-2, since the 1970s employees
seeking such legal relief have produced a sharp increase in the numbers of suits
filed in federal courts and complaints filed with federal agencies.

   The workers best able to take advantage of the law are upper-level employees
whose claims (usually about their termination) are financially worthwhile to sue
about, or groups of employees who have the kind of representation (usually by a
union or some other advocacy group) that gets the attention of a short-staffed
administrative agency.

   Even such limited legal protection comes at a considerable cost. Some of the
costs are paid from the public purse that supports the judicial and
administrative systems. Much of it comes from the parties themselves who must
pay the attorney fees and other expenses of legal proceedings. Some of that cost
burden is borne by employers who were guilty of violating. the law. As much, if
not more, of these legal expenditures are made by law-abiding employers
defending themselves against non-meritorious claims and going through all the
internal procedures and paperwork needed to demonstrate compliance.

   In the longer run most of these employer expenditures are passed on to
others--to governments in the form of lower corporate taxes, to consumers the
form of higher product prices, and to employees in the form' of fewer jobs or
lower wages and benefits. That means that there is a broad social interest, not
just a narrow business interest, in reducing the costs of litigation and

   One such path would take us towards privately-run mechanisms for either
resolving individual disputes under the law (e.g., discrimination or wrongful
dismissal) or for inspecting and monitoring workplace compliance with
regulations (e.g., of OSHA or ERISA).

   o With respect to arbitration, the key question is whether and how such a
 procedure should be designed to ensure it is a fair, as well as a more
accessible, alternative to a jury trial.

   o With respect to joint safety and health or other such "internal
responsibility" programs, should the law require committees or some equivalent
from of employee participation, and, if so, how can these programs be designed
to fit the diverse workplaces and employment settings found in the economy?

   o With respect to either arbitration or self-regulatory committees, the
question is whether employment law can safely grant these private procedures
some leeway in interpreting and applying public laws to local situations.

   For all these questions, the issue is not just whether there are risks and
costs to these private alternatives. The more important issue is how these risks
and costs of ADR compare with those now being experienced in the administration
of employment law by courts and agencies. That, in turn, raises the question
about the value of another path towards reform -- more coordinated
administration of the array of employment regulations.

8. Summary and Questions for Further Discussion

   1. Federal laws governing the workplace increased dramatically since the
1960s. Accompanying this growth in law is a corresponding expansion in the rules
and regulations that guide their administration and enforcement. The Labor
Department alone is responsible for enforcing a vast number of workplace
regulations, and other agencies.

   2. At the same time, the American workforce and workplaces have become more
diverse, making it difficult for the laws and regulations to fit these changing
circumstances. The increased diversity, in turn, created more demand for
protective legislation and more complex rules.

   3. Workplace litigation caseloads and costs rose faster than other areas of
law. Employment cases in the federal courts increased by over 400  percent
between 1971 and 1991.

   4. Agencies responsible for administering these laws experienced increasing
backlogs and delays in processing cases.

   5. The private institutions Americans have traditionally relied upon to
resolve issues without resort to government regulations or court litigation,
namely collective bargaining grievance arbitration, declined in coverage and
were limited in their finality by court decisions.

   6. Neither the more longstanding forms of private representation and dispute
resolution, i.e., mediation and arbitration, nor the newer more informal
employee participation and alternative dispute resolution systems, are being
utilized to their full potential for dealing with issues and resolving disputes
that now are regulated by law. All of these procedures would need to be modified
in various ways if they are to be used as part of a system for adapting
workplace regulations to fit different settings and enforce public laws.

   7. The administrative procedures for resolving employment cases are
complicated by (1) the large number of different agencies, enforcement regimes,
and remedies available under the different statutes; and (2) the varying scope
of judicial review accorded agency decisions.

   8. The U.S. relies on the civil court system to litigate employment disputes
while many other countries use specialized, tripartite employment courts.

   9. Experience with dispute resolution suggests the value of considering the
inter-relationships among different levels or stages in the private and public
procedures used to resolve workplace issues, including: (1) the informal
practices and organizational policies designed to solve workplace problems
before they arise or to resolve them informally before they enter the formal
system; (2) the formal procedures (e.g. arbitration) used to resolves disputes
 before they are brought to a public-agency or the court, (3) the administrative
processes involved in enforcing the law and resolving disputes, and (4) the
judicial procedures used to review or appeal private and public administrative
decisions and rulings.

   10. Negotiated rule making has been shown in some instances to improve the
efficiency and acceptability of the regulations required to implement and
enforce the objectives of laws governing the workplace. However, it has seldom
been used for employment issues.

Questions for Further Discussion

   1. What changes in current labor and employment arbitration procedures are
needed to deal with the broader range of issues and individuals involved in
contemporary employment disputes?

   2. What is the appropriate relationship between private and public dispute
resolution procedures?

   3. What role, if any, should employees have in the design and oversight of
workplace dispute resolution systems that involve issues of public law?

   4. How can worker-management committees or other forms of employee
involvement be used to internalize responsibility for or resolve problems of
occupational safety and health or other workplace matters regulated by public

   5. Should the U.S. government integrate and combine different agencies
responsible for administering and enforcing employment laws and regulations?

   6. Should the U.S. consider establishing a specialized branch of the judicial
system to deal with employment law cases?



   "The Limits of Legal Compulsion." U.S. Department of Labor  Release, November
12, 1975, Labor Law Review, Vol. 27 February 1976. p. 67.


   See Outline of Statutes and Regulations Affecting the Workplace, prepared by
the Office of the Assistant Secretary of Policy, U.S. Department of Labor, June
21, 1993.


   United States General Accounting Office, Report to Congressional Requestors,
Workplace Regulation, Agencies Need to Become Service-Oriented. Say Employers
and Unions, 1994.


   James N. Dertouzos, Elaine Holland, and Patricia Ebenere, The Legal and
Economic Consequences of Wrongful Termination (Rand Institute for Civil Justice:
1988), finds the compensation-legal costs ratio to be significantly worse than


   As put by the Republican Statement of members of the House Committee on
Education and Labor to the Commission (at page 15, referring specifically to the
variety of EEO laws): ". . .it is important to note that the Commission should
not attempt to change or alter the basic thrust of each law; rather, the
Commission should seek to untangle the legal web of regulation that has spawned
a cottage-industry for lawyers consultants, and employment policy specialists.


   For detailed analysis, see Clyde Summers, "Effective Remedies for Employment
Rights," 141 University of Pennsylvania Law Review 457, 1992.


   Exhibit IV-3 was based on data supplied to the Commission by the Business
Disputing Group Project of Professor Joel Rogers of the University of Wisconsin
 and Terence Dunworth at the RAND Corporation. The data were generated by their
assistant. Matt Zeidenberg, from figures supplied to the Project by the
Administrative Office of the U.S. Courts.


   Those rough estimates are developed in a 'paper by Lewis Maltby, Director of
the American Civil Liberties Union's National Task Force on Civil Liberties in
the Workplace, to be published in the November 1994 issue of Annals of the
American Academy of Political and Social Science.


   John J. Donohue and Peter Siegelman, "The Changing Nature of Employment
Discrimination Litigation, 43 Stanford Law Review 983, 1991.


   Douglas S. McDowell, Alternative Dispute Resolution Techniques: Options and
Guidelines to Meet Your Company's Needs, Washington D.C.: The Employment Policy
Foundation. 1993.


   See, for example, William L. Ury, Jeanne M. Brett, and Stephen B. Goldberg,
Getting Disputes Resolved, San Francisco: Jossey Bass, 1988, p. 65.


   Report to the Secretary of Labor on the Philadelphia ADR Pilot Project
(October 1992), and Marilynn L. Schyyler, A Cost Analysis of the Department of
Labor's Philadelphia ADR Pilot Project, August 1993.


   For illustrations of arbitration of legal disputes outside the employment
field, see U.S. General Accounting Office, Securities Arbitration: How Investors
Fare, 1992, and U.S. General Accounting Office, Medical Malpractice: Few Claims
Resolved Through Michigan's Voluntary Arbitration Program, 1990.


   Data provided to the Commission by Professor Stephen B. Goldberg, the
Mediation Research and Education Project, Northwestern University Law School,
1994. The arbitrator's fee is based on Federal Mediation and Conciliation
Service data. See Stephen B. Goldberg and Jeanne M. Brett, "Grievance Mediation
and other Alternatives to Arbitration," Workplace Topics, Vol. 2, July 1992, pp.


   David Lewin, "Grievance Procedures in Nonunion Workplaces: An Empirical
Analysis of Usage, Dynamics, and Outcomes," 66 Chicago-Kent Law Review 828,


   What was distinctive about the case was that the employee worked for a
financial services firm and the arbitration clause was contained in his
registration agreement with the New York Stock Exchange (NYSE) as a securities
representative. Arguably, then, the case did not involve an m contract. The
significance of that fact is that the legal premise for the Supreme Court's
ruling was the 1925 Federal Arbitration Act which specifically excludes
"contracts of employment of seamen, railroad employees, or any other class of
workers engaged in foreign or interstate commerce." In the 1920s, the judicial
interpretation of the Constitution basically limited Congress' jurisdiction
under the commerce clause to businesses (and employees) engaged in
transportation of goods and services. Now interstate commerce under the
Constitution has been read to encompass just about any firm engaged in
production and distribution of goods and services.


   Besides Professors Clyde Summers, Theodore St. Antoine, and Katherine Stone
who testified on this topic, there is a published debate by two other legal
 scholars who testified before the Commission on other issues: Samuel Estreicher,
"Arbitration of Employment Disputes Without Unions," 66 Chicago-Kent Law Review
753 (1990), and Matthew W. Finkin, "Commentary," Id. 799. The limited evidence
we have is that arbitrators tend to uphold claims more often than they reject
them (see, for example, U.S. General Accounting Office, Employment
Discrimination: How Registered Representatives Fare in Discrimination Disputes
(March, 1994), and, at least in the medical malpractice context, to favor the
plaintiff's case considerably more often than do juries: see Thomas B. Metzloff,
"Alterative Dispute Resolution Strategies in Medical Malpractice," 9 Alaska Law
Review 429, 1992.


   That is why under Montana's wrongful dismissal statute, even though there are
substantial financial incentives to the two sides to agree to arbitration, the
vast majority of such cases still go to court: see Leonard Bierman, Karen
Vinton, and Stuart A. Youngblood, "Montana's Wrongful discharge from Employment
Act: The Views of the Montana Bar," 54 Montana Law Review 367, 1993.


   The views of one such witness are elaborated in a recent book, Douglas S.
McDowell Alternative Dispute Resolution Techniques: Options and Guidelines to
Meet Your Company's Needs (Employment Policy Foundation: 1993). The written
submission by another witness, Charles Bakaly, was essentially to the same


   See A.J. Pemeski, G. Hall, M. Rowe, J. Ziehgenfuss, and M. Lux, "Perspectives
on the Costs and Cost Effectiveness of Ombudsman Programs in Four Fields:
Academia, Health Care, Private Companies, and State Government," 15 Journal of
Health and Human Resources Administration, Winter, 1993.

   Indeed, to the extent that such nonunion grievance procedures involve
participation by regular employees, they pose significant questions about their
compatibility with the NLRA's ban on employer-established employee
representation plans (discussed in Chapter II). Professor Charles Morris, in his
presentation to the Commission titled "Deja Vu and 8(a)(2) --What's Really Being
Chilled by Electromation?" April 1994, pointed out that a case now pending
before the NLRB, Keeler Brass Automative Group, may produce a Board ruling on
precisely this legal issue.


   Also see U.S. General Accounting Office. Dislocated Workers: Worker
Adjustment and Retraining Notification Act Not Meeting Its Goals, February 1993,
documents the particularly egregious failings of WARN, whose notice requirements
are complied with by employers less than 30 percent of the time.


   Thomas W. Planek and Kenneth P. Kolosh, Survey of Employee Participation in
Safety and Health National Safety Council, October 1993.


   David Weil, "The Impact of Safety and Health Requirements on OSHA
Enforcement" (April, 1994).


   See the submission by the labor and management co-chairs of Ontario's
Workplace Health and Safety Agency: Paul K. Forder and Robert D. McMurdo.
"Working Together on Health and Safety: The Impact of Joint Health and Safety
Committees on Health and Safety' Trends in Ontario" (March 1994).


   Good descriptions of the tribunals and procedures for enforcement of labor
and employment in other countries can be found in Benjamin Aaron, "Settlement of
Disputes Over Rights," in Comparative Labour Law and Industrial  Relations (Roger
Blanpain, ed., 1990); Manfred Weiss, Simitis and Rydzy, "The Settlement of Labor
Disputes in the Federal Republic of German," in Industrial Conflict Resolution
in Market Economies (Tadashi Hanami and Roger Blanpain, eds., 1989); Michel
Despax and Jacques Rojot, "Labor Law and Industrial Relations in France," in
International Encyclopedia for Labor Law and Industrial Relations (Roger
Blanpain ed., 1987): and Bob Hepple, "Labor Law and Industrial Relations in
Great Britain, in International Encyclopedia for Labor Law and Industrial
Relations (Roger Blanpain, ed., 1992).


   A study in California (released on April 14, 1994), based on random
inspections of 69 garment manufacturers and contractors. found that all but two
were breaking some federal and state employment laws -- including locked or
blocked fire exits and having 13-year-old children working nine hours a day. A
Labor Department official was quoted as stating that "this is an industry that
ignores the law."


   "The Limits of Legal Compulsion", U.S. Department of Labor Release, November
12, 1975, Labor Law Journal. February 1976. pp. 67-74.


   Public Law 101-648, 101st Congress. See also Administrative Conference of the
United States, Negotiated Rulemaking Sourcebook, January 1990.

   EXHIBIT IV-1 plated

   Exhibit IV-2 plated

                          EXHIBIT IV-3
                   By Cases Filed
Year         Total     Fortune 100      Personal       Labor    Employment
             Civil(1)     Plaintiff(2)      Injury(3)    Law(4)       Law
1971        69,465        3,153         20,517         2,430        4,331
1972        72,180        3,396         19,449        2,741       4,635
1973        74,563        3,220         18,520       2,965         4,855
1974        77,347        3,485         18,621       3,311        5,783
1975        87,641        4,139         19,192       4,316        7,638
1976        96,139        4,718         19,161       4,452       10,269
1977        96,829        4,836         19,280       4,305       10,954
1978       103,513        4,495         19,483       4,141       10,709
1979       117,680        4,874         20,630       4,603       11,103
1980       131,533        6,059         22,622       4,368       11,472
1981       139,193        6,044         24,816       4,540       13,134
1982       139,593        7,539         25,801       4,711       15,436
1983       147,518        7,744         27,582       4,669       17,701
1984       152,061        7,855         27,686       4,459       19,166
1985       160,484        8,257         30,294       4,017       18,061
1986       163,664        8,329         29,420       4,242       20,320
1987       159,275        9,709         27,622       3,738       19,950
1988       161,769        9,029         26,760       3,231       20,041
1989       163,865        8,905         26,803       2,920       21,775
1990       156,762        6,637         23,868       2,709       22,165
1991       146,790        6,954         23,959       2,364       22,968
1971-1991     110%         121%            17%           -3%        430%

   (1)This category excludes the following subcategories of civil litigation:
prisoner petitions (i.e., for writs of habeas corpus) student loan recovery
cases, deportation cases, local cases in U.S. territories, and personal injury
or social security cases in which the U.S. is a-defendant.

   (2) This category is presented here as proxy for business litigation m
 general, for which there are no precise figures for the period in question.
Fortune 1000 stands for the industrial Fortune 500 and service sector Fortune
500 combined.

   (3) This category excludes all asbestos cases because the brief but massive
surge in asbestos litigation during the 1980s distorts underlying long term

   (4) Labor law covers cases involving the National Labor Relations Act, the
Labor Management Reporting and Disclosure Act, and the Railway Labor Act.

                         EXHIBIT IV-4
                Wage & Hour  Wage &  Hour  OSHA    OSHA     EEOC   EEOC
                Complaints   Cases     Complaints   Cases Complaints Cases
1980        45,366      7,949        16,100      11,988   ----      ----
1981        46,020      5,752       13,161       6,744   56,228      444
1982        46,584      7,648        6,741       5,978   54,145      241
1983        44,869      3,958       6,361         5,219   66,461     195
1984        50,037      3,989       7,532         4,789   ----      ----
1985        57,314      3,610       8,663       4,736     ----      ----
1986        59,988      4,389       9,085       4,808    62,822      526
1987        58,936      3,343       9,764       5,041    62,074      527
1988        62,599      3,357      12,200       5,686    58,853      555
1989        63,965      3,439      11,869       7,702    55,952      598
1990        60,484      3,327      10,850       8,242    62,135      643
1991        54,142      3,041      10,198       8,686    63,898      593
1992        47,879      2,733      10,873       8,646    72,302      446
1993        46,121      2,295      10,539       8,960    87,942      481
Peak Year   1989        1980       1980         1980     1993        1990
% Change
1980-Pcak(1)   +41%        0%         0%           0%      +56%      45% %
1980-1993   +2%          - 71%        - 35%            - 25%    +56%   8%

   (1) The figures for the EEOC categories are from 1981, sin 1980 figures are
unavailable. SOURCE: Joel Rogers and Terence Dunworth, Business Disparity-Group.

   Exhibit IV-5 Key Features for an Integrated Workplace Dispute Resolution

   An Integrated Workplace Resolution System should: 1. Deal with a very wide
spectrum of workplace concerns. 2. Be open to al categories of personnel. 3.
Handle group issues as well as individual complaints. 4. Have multiple options
or mechanisms including encouraging person-to-person or group-to-group
negotiations and problem resolution; informal or formal mediation fact finding,
and peer review, and; arbitration. 5. Allow "looping backward and forward" to
the informal and formal procedures at various stages in the resolution process.
6. Provide a variety of helping resources such as training, advising, and
representation not only to the complaint but also to the respondent and the
supervisors and coworkers affected by the dispute. 7. Include people of color,
wan, and men in the various roles in the system. 8. Be taught to all
participants in the organization. 9. Proscribe reprisal and provide for
monitoring and evaluation. 10. Include a wide cross section of employees and
managers in the design of the system. Source: Testimony of Professor Mary Rowe,
April 6, 1994EXHIBIT IV-6 PLATED

Chapter V

General Observations

   Several common themes emerged in the testimony and the evidence presented to
he Commission, beyond the three separate questions raised in the Mission
Statement discussed in the previous three chapters. This brief chapter
summarizes several of these themes which need to be recognized when addressing
 the issues considered in the individual chapters.

1. Growing Diversity in Worker-Management Relations

   Chapter I reported the wide variety of employment relations found in firms of
different sizes and in different industries. Earnings have become more unequally
distributed in recent years, separating chose with and without the education,
raining, and ability to use modern technologies and to participate effectively
in workplace problem-solving. This raises he question of whether the American
workforce is adequately prepared to meet the demands of international and
domestic competition, changing technologies, and new patterns of work
organization that put a premium on education, skill, and problem-solving
abilities. The move away from the stereotypical model of a male wage earner in a
stable long term job with a wife and family at home poses the question of
whether existing private and public policies are flexible enough to fit the
diverse workforce and circumstances encountered in the contemporary labor

   Diversity characterizes the distribution of human resource policies and
practices of employers and labor organizations. Chapter II, for example, focused
on the innovative practices found in many firms that provide employees a voice
in decisions that affect their jobs and the performance of their enterprises.
American employers have been world leaders in introducing some of these
workplace innovations. Some American firms have served as benchmarks for
employers around the world, while others have learned from the practices of
leading firms in other count tries. These innovations are helping American
employers be competitive on world markets. A number of unions have initiated
broad ranging partnerships with employers that extend from the workplace to the
highest levels of decision-making in an effort to enhance both enterprise
performance and democracy at the workplace. Chapters III and IV showed that the
diversity reported in Chapter I has contributed to the inability of government
 regulators to enforce the laws governing individual and collective worker
rights. The variation and complexity in administrative and enforcement
procedures and penalties add significant costs to the workplace and divert
time and resources to litigation that could be more effectively put to use in
preventing problems from arising, resolving disputes quickly and close to their
source and making the promised rights accessible to their intended
beneficiaries. This leads to the question of whether alternative dispute
resolution techniques, mediation, and arbitration can be utilized to provide
better tailored approaches to workplace dispute resolution; the issue also
arises whether the present methods of determining regulations and administering
them can be improved.

2. Interdependence of Issues Presented to the Commission

   A diverse workforce requires variation in methods and procedures for employee
participation representation, and dispute resolution. Sustained labor-management
cooperation requires acceptance of labor representatives as valued partners in
existing worksites under collective bargaining and respect for workers' rights
to choose whether or not to be represented in new facilities. Cooperation cannot
be sustained in an environment of bitter, prolonged, and inflammatory debates
over the process of worker representation. Collective bargaining relationships
that follow long battles over union recognition cannot be easily transformed
into cooperative and highly participative workplaces.

   Alternative dispute resolution procedures cannot take on a broader role at
the workplace in enforcing workplace justice unless the parties affected
participate in both the design and oversight of the system. The issues and the
parties to the workplace no longer fit the traditional labels of "worker" versus
"supervisor" or "manager," or "exempt" versus "nonexempt." The issues of concern
in the modern workplace transcend those covered by a traditional collective
bargaining contract. Thus, participation in the design and  oversight of
workplace dispute resolution must also transcend these traditional labels and
boundaries between employee groups.

   The success of any formal dispute resolution system requires effective
workplace policies and institutions that both prevent problems from arising in
the first place and resolve as many as possible informally before they escalate
into formal complaints or lawsuits. The evidence presented in Chapter II
suggests that workplaces that have been successful in developing the trust
needed to foster and sustain employee participation and cooperation are more
likely to have these types of policies and the capability to resolve those
problems that do arise. The question is whether it is possible to take advantage
of existing labor-management relationships and employee participation processes
to fulfill some of these workplace justice roles.

3. Mismatch of Policy and Practice

   The evidence presented to the Commission reflected a degree of mismatch
between some aspects of the legal framework regulating worker-management
relations and the emerging workplace and workplace practices necessary to be
competitive and to meet workers' needs in the modern economy.

   Chapter II reported how some of the more advanced forms of employee
participation are put under some uncertainty by interpretations of the National
Labor Relations Act. Chapter III documented the obstacles some employees
experience in exercising their right to choose whether or not to be represented
and to bargain collectively if faced with determined employer opposition.
Chapter IV described the growth in regulatory burdens on the workplace and the
exploding levels of litigation related to statutes and regulations that workers
and employers find hard to use or manage because of their high costs, long
delays, and unresponsiveness to non-standard employment relationships. The
mismatch between law and practice may grow in the future given the trends of
 increased international and domestic competition, technological innovation,
rising education levels and growing labor force diversity.

4. De-escalation of Workplace Conflicts

   The agreement of management and labor on the principle that workers should
have the right freely to choose whether or not to be represented by a union and
the cooperative labor-management relations found in many settings conflicts with
the confrontational process of union organizing and management campaigning to
prevent organization that takes place in many other situations. The latter is
what was referred to as the "dark side" of labor relations in Chapter III.
Caught in the midst of these conflicts are workers who want a voice on their job
but fear the tensions, risks, and adversarial climate that sometimes accompany
efforts to exercise those rights. All participants--employees, management, and
unions--would benefit from reduction in illegal activity and de-escalation of a
conflictual process that seems out of place with the demands of many modern
workplaces and the needs of workers, their unions, and their employers.


Historical Perspective on the Work of the Commission.

   1. The United States enacted in the past years four major statutes that
govern labor-management relations -- the Railway Labor Act (1926) now applicable
to the railroad and airline industries; the Wagner Act, the National Labor
Relations Act, (1935), the Taft-Hartley amendments, Labor-Management Relations
Act, (1947), and the Labor-Management Reporting and Disclosure Act (1959).

   o The 1926 Railway Labor Act was passed with full agreement of railway
managements and railway unions.

   o The other three pieces of legislation were enacted in bitter controversy
between business and organized labor, in sharply divided partisan political
conflict, and each reflected short term antecedents in conflicts in the periods
 preceding the legislation.

   2. The labor law reform attempt on the part of the Carter Administration in
1978 and 1979 ended with passage of legislation m the House but a failure to
muster the 60 votes required to break a filibuster in the Senate.

   3. In this century, there have been two congressional Commissions and two
extended Congressional Committee hearings, that lasted over several years, that
have been influential in developing information chat shaped Congressional views
and legislation on labor-management relations: U.S. Industrial Commission,
1898-1901; U.S. Commission on Industrial Relations 1912-1915; the LaFollette
Committee, Senate Committee on Education and Labor, 1936-1940; The McClellan
Committee, Select Committee, 1957-1960.

   o The 1898-1901 Commission was comprised of five members of Congress from
each body and nine private citizens appointed by the President with a large
technical staff. The Commission submitted 19 volumes of materials, ten of
which related to the problems of labor, and the Commission also submitted
recommendations. The substantive content of the volumes rather than the
recommendations were noteworthy.  n1

   o The 1912-1915 Commission was comprised of three representatives of
organized labor, three of employers, and three public members. Frank P. Walsh
was named chairman; Professor John R. Commons of Wisconsin was also a public
member. The work of the Commission was carried on both by public hearings and by
research reports done by a large and distinguished staff. The Commission held
154 days of hearings in which 740 witnesses testified. The final report
consisted of 11 volumes with 253 pages of recommendations.  n2

   o The extensive hearings conducted by Senator McClellan, 1957-60, detailed
the influence of organized crime in some unions, the abuse of some union
officers of their members and finances and improper conduct of some management
representatives. The Committee produced 46,150 pages of testimony, heard 1,525
 witnesses and employed 104 staffers at its peak.

   4. There have been two occasions in the past 75 years in which Presidents of
the United States, after World War I and World War II, have assembled labor and
management representatives in formal conferences to seek a consensus on vital
issues of post-war labor-management relations. Organized labor and the business
community had supported the government in wartime, and business and labor had
worked cooperatively with government agencies in the wartime for full production
and resolution of disputes.

   o President Wilson called an industrial conference that convened in October
1919 with 50 representatives drawn worm organized labor, business and public
members. The main difference arose on a resolution on collective bargaining in
which employers would only endorse collective bargaining unless at the same time
the resolution endorsed shop councils and similar organizations, outside of
unions. No agreement was possible between these views.

   o President Truman opened the Labor-Management Conference on November 5,
1945. It was designed in part to seek agreement on a reconversion policy - from
wartime w peace and from wage controls to free bargaining and wage setting.
Labor and management were unable to reach agreement. In the view of George
Taylor, however "the Labor-Management [conference] of 1945 goes down on the
books as the cession where American industry formally accepted collective
bargaining in principle." The Conference did agree on a few matters, most
notably, arbitration as the final step in a grievance procedure under a
collective bargaining agreement.

   o In commenting on the 1945 Conference, George Taylor who played a role in
organizing the Conference, wrote: "Labor-management conferences, both national
and regional in scope, can be and should become a standard part of the American
industrial-relations pattern."  n3

   5. Two Presidents since the end of World War II established ongoing
 labor-management committees comprised of national leaders of organized labor and
business. They met regularly for periods of a year or two.

   o President Johnson established a Committee jointly chaired by the Secretary
of Labor and Secretary of Commerce in the mid-1960s.

   o President Ford established a Committee chaired by the Secretary of Labor
that met monthly during 1975. The President met with the Committee for an hour
each session.

   6. The previous experience outlined above provides some perspective on the
scale of the work of the present Commission. It also necessarily raises the
question whether a major Congressional Commission is in order and whether a
continuing Labor-Management Committee of top level national business and labor
representatives is appropriate.

   o Previous Commissions have been much more elaborate than the present effort,
and Congressional authorization and involvement historically appear to have been
a vital ingredient.

   o Continuing direct discourse between top level national business and labor
representatives is essential to changing circumstances and to the long-term
adaptation of the public framework for constructive worker-management and
labor-management relations in the changing environment described in Chapter I.

   o The problems of the workplace confronting workers and their organizations
and management are not susceptible to simple or once-and-for-all solutions.



   Mark Perlman, Labor Union Theories in America, Background and Development,
Evanston, IL, Rob, Peterson and Company, 1958, pp. 264-79.


   Mark Perlman, pp. 279-301.

   George W. Taylor, Government Regulation of Industrial Relations, New York,
Prentice-Hall, Inc., 1948, p. 228.

APPENDIX B NATIONAL MEETINGS--Washington, D.C. May 24, 1993 -- Initial Meeting
FOCUS: Nature of the American Workforce and Workplace COMMISSIONERS John T.
Dunlop, Chair * Paul A. Allaire Douglasm A. Fraser Richard B. Freemen William B.
Gould IV Thomas A. Kochan Juanita M. Kreps F. Ray Marshall William J. Usery, Jr.
Paula B. Voos Paul C. Weiler. Counsel to the Commission June M. Robinson,
Designated Federal Official Introduction of Commissioners REMARKS/PRESENTATIONS
Thomas S. Williamson, Jr. Solicitor (then nominee) Department of Labor Robert A.
Shapiro Associate Solicitor Legislation & Legal Counsel Department of Labor
William G. Barron Acting Commissioner Bureau of Labor Statistics Robert B. Reich
Secretary of Labor Ronald H. Brown Secretary of Commerce Chair  Dunlop.
 Commission  Plans & Procedures June 21, 1993 FOCUS: Presentation on American
Workforce and Further Workplace Committee Reports PRESENTATIONS William G.
Barron Acting Commissioner Bureau of Labor Statistics George L. Stelluto
Associate Commissioner Office of Compensation & Working Conditions Bureau of
Labor Statistics Edwin R. Dean Associate Commissioner Office of Productivity &
Technology Bureau of Labor Statistics Everett W. Ehrlich Special Advisor to the
Secretary Department of Commerce David C. Cranmer Associate Director National
Institute of Standards & Technology Department of Commerce REPORTS OF COMMISSION
WORKING PARTIES Paul A. Allaire Workplace Committees F. Ray Marshall Foreign
Experience Thomas A. Kochan Regional Meetings of the Commission Richard B.
Freeman Focus Groups William B. Gould IV Litigation JULY 28, 1993 FOCUS:
Employee Participation Programs PRESENTATIONS Manufacturing Sector Peter J.
Pestillo Executive Vice President Corporate Relations Ford Motor Company Ernest
Lofton Vice President United Auto Workers Director, Ford Department Health &
 Safety Lisa Trussell Manager, Human Resources Norpac Foods Irv Fletcher
President, Oregon, AFL-CIO Jack Pompei Administrator, Oregon OSHA Oregon
Occupational Safety & Health Division Harry Featherstone CEO & Chairman The
Will-Burt Company Services Sector -- Small Enterprise Cheryl Womack CEO VCW,
Inc. Michael Howe Human Resources Officer Healthspan Corporation Betty
Bednarczyk Local 113 Service Employees International Union Vickie Cloud (and
Others) Personnel Division Administration Federal Express Corporation SEPTEMBER
15. 1993 FOCUS: Workplace Committees & Employment Involvement PRESENTATIONS -
Manufacturing Sector Ronald Doerr President & CEO National Steel Lynn Williams
President, United Steelworkers of America Harry Lester Director, District 29
United Steelworkers of America Barry W. Davis Director, District 34 (Retired)
United Steelworkers of America Services Sector Morton Bahr President
Communications Workers of America William K. Ketchum Vice President, Labor
Relations AT & T Tunja Gardner Sprint Employee Network Representative/CWA Juan
Castillo Supervisor, Atlanta Mini-Computer Maintenance & Operations Center
MMOC/AT & T Bill Cosens Communications Technician MMOC/CWA Kathi Bond
Communications Technician John P. Nee Vice President Scott Paper Company Donald
L. Langham International Vice President & Regional Director United Paperworkers
International Union, AFL-CIO Robert J. Reid Chief Legal Officer TOYOTA
Work in
America Institute OCTOBER 20, 1993 FOCUS: Issues Under the Railway Labor Act
PRESENTATIONS - Patrick Cleary Member, National Mediation Board William Gill
Executive Director, National Mediation Board Panel I Walter J. Shea President,
Transportation Trades Department, AFL-CIO Airline Labor Panel Capt ain J.
Randolph Babbitt President Airline Pilots Association John F. Peterpaul Vice
President International Association of Machinists Marvin Griswold Director,
Airline Division International Brotherhood of Teamsters Nancy Segal Attorney
American Flight Attendants David Borer Director, Collective Bargaining
 Department American Flight Attendants Rail Labor Panel James M. Brunkenhoefer
National Legislative Director United Transportation Union Donald C. Buchanan
Director of Railroad Division Sheet Metal Workers' International Association
Mark Filipovic Railroad Coordinator International Association of Machinists
Ronald P. McLaughlin President Brotherhood of Locomotive Engineers Joel Parker
International Vice President Transportation-Communications International Union
Panel II Charles I. Hopkins, Jr. Chairman National Railway Labor Conference
Edwin L. Harper President & CEO Association of American Railroads Panel III
Robert J. DeLucia Vice President General Counsel & Treasurer Airline Industrial
Relations Conference Panel IV Victoria Frankovich President Independent
Federation of Flight Attendants Alice Saylor General Attorney & Director of
Public Relations Transtar, Inc. (for) Regional Railroads of America Captain
Robert M. Miller President Independent Pilots Association NOVEMBER 8. 1993
FOCUS: Issue of Organization and Representation for Collective Bargaining
PRESENTATIONS Lane Kirkland President American Federation of Labor - Congress of
Industrial Organizations Jerry Jasinowski President National Association of
Manufacturers William D. Marohn President & CEO Whirlpool Corporation Bruce
Carswell Senior Vice President GTE Corporation Chairman, Board of Directors
Labor Policy Association Howard V. Knicely Executive Vice President TRW and Vice
Chairman, Board of Directors Labor Policy Association Clifford J. Ehrlich
Senior Vice President of Human Resources Marriott Corporation Charles F. Nielson
Vice President of Human Resources Texas instruments

   Chair Dunlop presided at all meetings of the Commission held in Washington,

   DECEMBER 15. 1993 FOCUS: Issues of Organization & Collective Bargaining,
continued.PRESENTATIONS William Stone Chairman & CEO Louisville Plate Glass and
Chairman, Labor Relations Committee U.S. Chamber of Commerce Diane M. Orlowski
President JFD Tube & Coil Products, Inc. Wendy Lechner Research Director
 National Federation of Independent Businesses Karen Nussbaum Director, Women's
Bureau U.S. Department of Labor John J. Sweeney President Service Employees
International Union, AFL-CIO Robert A. Georgine President Building &
Construction Trades Department, AFL-CIO Albert Shanker President American
Federation of Teachers and Chairman of the Board Department of Professional
Employees, AFL-CIO John D. Ong CEO B.F. Goodrich Company and Chairman The
Business Roundtable JANUARY 19. 1994 FOCUS: The Legal Framework of Workplace
Employee Participation Plans PRESENTATIONS Views of Management and Labor
Organizations Daniel V. Yager Assistant General Counsel Labor Policy Association
Howard V. Knicely Executive Vice President of Human Resources, Communications
and Information Sources TRW Judith Scott General Counsel International
Brotherhood of Teamsters Larry Cohen Organizing Director Communications Workers
of America PRESENTATIONS Perspectives of research & Academic Lawyers Richard A.
Beaumont President Organization Resources Counselors, Inc. Eileen Applebaum
Associate Research Director Economic Policy Institute David Brody Associate
Institute of Industrial Relations and Professor Emeritus of History University
of California at Berkeley Samuel Estreicher Professor of Law New York University
School of Law Joel Rogers Professor of Law University of Wisconsin School of Law
Karl Klare Professor of Law Northeastern University FEBRUARY 24, 1994 FOCUS:
Procedural and Substantitive Issues of Representation PRESENTATIONS Views of
Management and Labor Organizations William J. Kilberg Gibson, Dunn and Crutcher
Clifford J. Ehrlich Senior Vice President of Human Resources Marriott
Corporation Allison Porter Director, Recruitment & Training AFL-CIO Organizing
Institute Bruce H. Simon Cohen, Weiss and Simon PRESENTATIONS Reports of
Research by Academics Matthew Finkin Professor of Law and Professor in
Industrial and Labor Relations University of Illinois College of Law Jack Getman
Professor of Law University of Texas School of Law Henry S. Farber Professor of
Economics Industrial Relations Section Princeton University Jack J. Lawler
 Associate Professor of Law and Industrial Relations Institute of Labor and
Industrial Relations University of Illinois at Urbana-Champaign MARCH 16. 1994
FOCUS: The Foreign Experience in Labor-Management Relations Summary of March 14
and 15 Conference on Industrial Evidence F. Ray Marshall Commissioner and
Convener of Conference PRESENTATIONS Experience of Selected Countries Germany
Wolfgang Streeck Professor of Sociology University of Wisconsin and Senior
Fellow Berlin Institute for Advanced Studies Japan Hironari Yano Manager,
Yokohama Works Toshiba Electric France Jacque Rojot Professor and Dean of
Industrial Relations and Management University of Paris I, the Sorbonne
Australia Bill Kelty General Secretary of Trade Unions Australian Council Bruce
Charles Hartnett Vice President National Australia Bank and Formerly with ICI
Australia Margaret Gardner Head of the School of Industrial Relations Griffith
University, Brisbane Comments on Presentations from Selected Countries United
States of America Charles F. "Chuck" Nielsen Vice President, Human Resources
Texas Instruments Peter Stirling Vice President, Human Resources TI Europe and
formerly Personnel Manager, Pfizer Consumer Products Pfizer, inc. Jack Sheinkman
President Amalgamated Clothing and Textile Workers Union Thomas F. Flynn
Consultant to the National Association of Manufacturers and Organization
Resources Counselors, inc. APRIL 6, 1994 FOCUS: Alternative Dispute Resolution
Litigation and Regulations PRESENTATIONS Views of Management and Labor Civil
Rights and Civil Liberty Organizations Charles G. Bakaly, Jr. Attorney
O'Melvaney and Myers Douglas S. McDowell Partner McGuiness and Williams Marsha
S. Berzon Attorney Altshuler, Berzon, Berzon, Nussbaum and Rubin Lewis Maltby
Director National Task Force on Civil Liberties in the Workplace American Civil
Liberties Union Mary P. Rowe Adjunct Professor of Management Massachusetts
Institute of Technology Designated Neutral and Ombudsperson Co-founder and
former President The Ombudsman Association Paul H. Tobias Attorney Founder,
Plaintiff Employment Lawyers Association Pay Equity and Related Issues Susan
 Bianchi-Sand Chair Council of Presidents Research Reports by Academics Clyde
Summers Jefferson B. Fordham Professor of Law Emeritus University of
Pennsylvania Katherine Stone Professor of Law University of Michigan Law School
Comment Leroy D. Clark Professor of Law Catholic University School of Law
REGIONAL HEARINGS -- Commission Working Pa:rties SEPEMBER 22. 1993 Louisville
Regional Hearing Centors for the Arts COMMISSIONERS John T.Dunlop, Chair Juanita
M. Kreps Thomas A. Kochan F. Ray Marshall REMARKS/PRESENTATIONS Carol M.
Secretary of Labor Commonwealth of Kentucky David Armstrong Jefferson County
Judg/Executive Jerry Abramson Mayor City of Louisville Panel 1: Community
Infrastructure Laramie L. Leatherman Greenebaum Doll & McDonald Vice President
The Gheens Foundation, Inc. and Chairman Elect Greater Louisville Chamber of
Commerce Regina M. J. Kyle President The Kyle Group JCPS/Gheens Professional
Development Academy Patt Todd Jefferson County Public Schools Steve Neal
Jefferson County Teacher's Association Kentuckiana Education & Workforce
Institute Kathryn Mershon Vice Chair Kentuckiana Education & Workforce Institute
Jack Will Executive Director Greater Louisville Chamber of Commerce Panel 2:
Innovative Practices in Large Companies Stephen A. Williams President & CEO
Alliant Health Systems Rodney Wolford President & CEO California Health Systems
Former CEO, Alliant Health Systems Ron Gettlefinger Director Region 3, United
Auto Workers Ford Motor Company Tom Ryan Regional Manager of State Government
Relations Denver Region Terry Smith Employee Relations Manager Louisville
Assembly Plant Al Kirkpatrick Director Industrial Relations Louisville Gas &
Electric Company Gary W. Klinglesmith President Business Manager Local Union
2100, IBEW Frank Crowe Manger, Labor Relations Philip Morris Wayne PUrvis
President 16T, BCTW Panel 3: Innovative Practices in Smaller Companies Robert
Taylor Dean College of Business University of Louisville George Cendron
Editor-in-Chief INC. Magazine Thomas Blades Plant Manager Buckhorn, Inc. Rendy
Pidcock President USWA, Local 15523 Ted Nixon President & CEO D.D.  Williamson &
Co., Inc. Sherri Schuenemeyer Manager, Human ResourcesVice Lantech, Inc. OCTOBER
13, 1993 East Lansing Regional Hearing Michigan State University COMMISSIONERS
Douglas S. Fraser Thomas A. Kochan Paula B. Voos REMARKS?PRESENTATIONS M.
McPherson President Michigan State University Rendall Eberts Executive Director
W.E. Upjohn Institute for Employment Research Industry and Labor Organizations
Frank Garrison President Michigan AFL-CIO David Zurvalec Vice President
Industrial Relations, Michigan Manufacturers Panel 1: Innovations in
Worker-Management Relations Miller Brewing Company and United Auto Workers.
Local 2308 Jim Neal President UAW Local 2308 Bill "Red" Green Plant Chairperson
UAW Local 2308 Dennis Puffer Plant Manager Ron McClaron Human Resources Manager
Herman Miller Company Craig Schrotenboer Vice President for People Services Dave
Cotter Rehabilitation Service Team Leader Donnelly Corporation Kay Hubbard
Advocate for Human Resource Development Shelly Appel, Lee Keuvelaar, and Tony
Spalding PVC Operations Technicians Johnson Controls and International
Association of Machinists Local 66 Paul Sivanich Plant Manager Doug Curler Shop
Committee Chair Panel 2: Non-traditional Methods of Resolving Dispute Problems
David Hammar Mead Paper Company Bill Brower President United Paperworkers
International Union, Local 110 Joe Moberg President United Paperworkers
International Union, Local 209 Rita Shellenberger Manager of Diversity Dow
Chemical Company Janet S. Dillon Advisor, Diversity, Management, IBM United
States International Business Machines Corporation Rochell Habeck Professor of
Counseling, Education Psychology, and Special Education Michigan State
University Michael Taubitz Assistant Director of Occupational Safety, General
Motors Corporation Panel 3: Legal Issues in Labor-Management Relations Tom
Woodruff President Service Employees International Union District 1199,
Columbus, Ohio Joe Crump Food and Commercial Workers, Local 951 Gene Holt Vice
President Graphic, Communications International Union Local 577 M Rita Ernst
International Representative, Amalgamated Clothng and Textile  Workers Union
Midwest Regional Board Leonard Page Associate General Counsel International
Union, UAW Kent Vana Attorney, Varnum Riddering, Schmidt and Howlett Theodore
St. Antoine University of Michigan, Law School JANUARY 5, 1994 Boston Regional
Hearing Gardner Audltoriurn, The State House COMMISSIONERS John T. Duniop, Chair
Richard B. Freeman F. Ray Marshall Thomas A. Kochan Paula B. Voos Paul C.
Weiler, Counsel to the Commission REMARKS/PRESENTATIONS IM (Mac) Booth,
President & CEO Polaroid Corporation Ann G. Leibowitz Senior Corporate Attorney
Polaroid Corporation Kenneth B. Krohn, PhD. Charla Scivally Polaroid Employee
Honorable Edward M. Kennedy U.S. Senator Massachusetts Anthony Byergo Attorney
James R. Green Professor and Director, Labor Studies University of Massachusetts
at Boston Rebert J. Haynes Secretary-Theasurer Massachusetts AFL-CIO Phil Mamber
President, District 2 United Electrical, Radio & Machine Workers of America
George Poulin International Vice President, Machinists Ashley Adams Organizer,
Service Employees International Union, Local 285 Karen O'Donnell State
Representative, Massachusetts Elly Leaery AW, Local 2324, New Directions
National Organizing Committee Joe Ivey 1993 President Associated Builders and
Contractors, Inc. Maurice Baskin General Counsel Associated Builders and
Contractors, Inc. Henry Fijalkowski International Representative, UAW Peter B.
Morin General Counsel Massachusettts Bay Thansportation Authority George Carlson
Graphics Communications, Local 600M Ed Clark Vice President, ACTWU Steve Early
International Representative, CWA for Jobs with Justice Sandy Felder President
and Executive Director Service Employees International Union, Local 509 Father
Edward F. Boyle, S.J. Donene Williams, HUCTW Kate Bronfenbrenner New York State
School of Industrial and Labor Relations Cornell University Mark Erlich Business
Manager/Financial Secretary Carpenters Local 40 Nancy Lessin Senior Staff
Massachusetts Coalition for Occupational Safetya nd Health, Safety and Health
Effectiveness Committees Dave Buck Economic Democrary Committe Citizens for
Participation in Political Action (Written submission) Joseph Dart  President
Massachusetts Building Trades Council AFL-CIO (written submission) Dorothy
Johnson Member United Electrical Radio and Machine Workers of America (UE),
Local 299 at Circuit-Wise of New Have, CT (Written Submission) JANUARY 11, 1994
Southeast Regional Hearing-Atlanta Georgia State University COMMISSIONERS
William J. Usery, Jr., Presiding Richard B. Freeman Thomas A. Kochan F. Ray
Marshall PRESENTERS Bruce Kaufman/ Philip A. LaPorte Site Committee Co-Chairs
Carl Patton President Georgia State University Honorable William Campbell Mayor
of Atlanta Randy Cardoza Commissioner Georgia Department of Industry, Trade &
Tourism David Poythress Georgia Department of Labor Donald Ratacjzak Director
Economic Forecasting center Georgia State University Amanda Hyatt Chair, Concil
for Competitive Georgia Michael McCall Deputy Executive Director, South Carolina
State Board for Technical Education Kathy Delancey Regional Manager The Alliance
for Emplyee Growth and Development David Reynolds, Sr. Vice President for Human
Resources, Georgia-Pacific Corporation Dorothy Yancey Georgia Institute of
Technology Jerry Barnes Assistant Vice President for Labor Relations BellSouth
Telecommunication, Inc. Gene Russo Vice President for District 3 Communications
Workers of America Maurice Worth, Sr. Vice President for Personnel Delta
Airlines Charles Wilson Industrial Relations Manager Reynolds Metals Company
Bill Metchnik District Business Representative International Association of
Machinists Carolyn Jackson Director of Human Resources Coca-Cola, USA Ralph
Johnson Director Center for Labor Education and Research University of
Alabama-Birmingham Harold McIver Regional Director Industrial Union Department,
AFL-CIO Bruce Raynor Executive Vice President Southern Regional Director, ACTWU
Hoyt Wheeler Professor of Management College of Business Administration
University of South Carolina Casey Sharpe Organizing Coordinator International
Brotherhood of Teamsters Homer L. Eadkins, Jr. Management Attorney Ogletree,
Deakins, Nash, Smoak & Stewart Frank Sheehan Vice President of Industrial
Relations The Bibb Company JANUARY 27, 1994 San Jose, CA San Jose  McEnery Center
COMMISSIONERS William J. Usery, Jr., Presiding Douglas A. Fraser Thomas A.
Kochan FOCUS: The Changing Nature of Work in Silicon Valley Employee Challenges
in the Current Employer Context Changes in the Law Remarks/Presentations Doug
Henton Deputy City Manager of San Jose, CA Pat Hill Hubbard Senior Vice
President American Electronics Association Any Dean Business Manager South Bay
AFL-CIo Labor Council Lenny Siegel Director Pacific Studies Center Linda Kimball
Mary Ruth Gross Institute of Industrial Relations University of California at
Berkeley, Val Afanasiev President Communications Workers of America, Local 9409
Romie Manan Member United Electrical Workers Electronics Bill Brill
Co-Chair,Labor Management Committee Pacific Gas and Electric Co. Lloyd Williams
Business Manager United Sssociation Local 393, Plumbers, Steam Fitters and
Refrigeriation Mechanics Union Ed Chiera Consultant International Association of
Machinists Mr. Manan National Semi-conductor Dennis Cuneo New United Motives
Bruce Lee Regional Director, UAW, California Kirby Dyess Corporate Vice
President, Intel Corporation Jamie Van De Ven Operations Manager Phuli Siddiqi
Area Coordinator Glenn Toney Vice President Global Human Resources for Applied
Materials Bess Stephens Manager of Corporate K through 12 Relations Hewlett
Packard Theresa Roche Vice President Human Resources for Grass Valley Group Kaye
Caldwell Policy Director, Software Industry Coalition and President, Computer
Software Industry Association, Software Entrepreneur's Forum Lloyd Ulman
FEBRUARY 11, 1994 Houston Regional Hearing Ommi Hotel COMMISSIONERS John T.
Dunlop, Chair Thomas A. Kochan F. Ray Marshall REMARKS/PRESENTATIONS George
McLaughlin John Ray Institute William E. Haynes Lynodell-Citgo Refining Company
Ltd. Robert Wages OCAW International W. Michael Cox Federal Reserve Bank of
Dallas Bernard L. "Bud" Weinstein University of North Texas John Calhoun Wells
Federal Mediation and Conciliation Service Recommendations from Management John
Yoars Lyondell-Citgo Refining Company, Ltd. Michael J. Kern Texaco Chemical
 Company Foley Parovenzano Union Carbide Company Recommendations from Organized
Labor Robert Wages OCAW International Joe Gunn Texas AFL-CIO Gale Van Hoy Texas
Building & Construction Trades Quality Process and Employee Involvement Patricia
Pate John Gray Institute Victor Zaloon Lamar University-Beaumont Don
Shellenberger Drago Supply Company Chuck Nielson Texas Instruments Scott
Moffitt, Texas Instruments Deborah Wirtz Texas Instruments Lolita Dickinson
Ciba-Geigy Corporation Recommendations Charles J. Morris Professor Emeritus, SMU
School of Law Wade Rathke Service Employees International Union Mark Sherman
University of Houston-Clear Lake Mike Garcia President Service Employees  n1
International Union 1877 Karen Hossfeld Professor of Sociology James McEntee
Director of Santa Clara Country Office of Human Relations Esther Thompson
Member, SEIU Local 1877 Eugenio Ramirex Gamboa Member, SEIU Local 715 Debra
Engel Vice President, Corporate Services 3Com Corporation Deborah Barber Vice
President, Human Resources Quantum Corporation Cheryl Fields-Tyler Director,
Work Force Activities, American Electronics Association Work Force Skills
Project Laindbergh Porter Shareholder, Littler, Mendleson, Fastiff, Tichy &
Mathiason, General Counsesl and Legal Advisor Chuck Mack Secretary/Treasurer
Teamsters Local 70 Curt Weinrich Director Regional Transportation Commission,
Southern Nevada Vince Carrajal John Neece Sharlene, Bonnemaison Business
Representative, IBEW Dale Stansbury Fred Hirsch Member, Plumbers Local 939
Joseph Doniach Airline Pilots Association Jock Savage Retired Airline Pilot
Steve Stamm Secretary/Treasurer UFCW, Union Local 428 Darcy Brister Barbara
Beatle SEIU, Local 250 Jill Furillo Director, Organizing for Local 250, SEI Al
Traugott Ken Pavlsen Business Manager Hotel/Restaurant Union, Local 19 David
Beaver, Manager


Roy J. Adams		Ph:  905-525-9140, ext 23965
McMaster University	Fax: 905-527-0100
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