Illustration by Gwendal Le Bec
Illustration by Gwendal Le Bec

The United Auto Workers, which has lost 75 percent of its membership since 1979, is pulling out all the stops to gain recognition at Volkswagen AG’s non-union plant in Chattanooga, Tennessee.

If successful, the effort would mark a turning point: The UAW has never been able to organize workers at any of the South’s foreign automobile manufacturers.

Both sides are seeking to be conciliatory. UAW President Bob King has said he realizes that any deal has to work “for our employers.” Volkswagen, meanwhile, is aiding the UAW’s effort to represent the workers in wage and benefits bargaining in return for a promise the union will cede its authority to a German-style “works council.”

A works council is established by plant employees but paid for by the employer to negotiate factory-specific conditions, such as bonuses, daily work hours and codes of conduct. Bargaining for wages and benefits is done by an industry-level union.

Works councils have been effective at Volkswagen and other companies in Europe. Their inclusive membership -- they are made up of representatives of blue- and white-collar workers, managers and supervisors -- helps reduce conflict and promotes the view that the employer and its employees are partners in a common enterprise. This sense of partnership is often missing in the U.S. when an outside labor organization represents plant workers in exchange for union dues.

The union feels a constant need to demonstrate its value to workers, which can devolve into an “us versus them” mentality that damages the company.

Legal Constraint

This environment is intensified by the National Labor Relations Act requirement that the employer negotiate terms and conditions of employment with the workers’ union as their exclusive bargaining representative. The German model of dual representation -- with an industrywide union required by law and plant-level works councils negotiating workplace terms of employment -- is inconsistent with U.S. law.

In fact, the act’s broadly worded “company union” prohibition has been interpreted as barring the establishment of works councils altogether. In a 1994 case involving Electromation Inc., the NLRB, building on a 1959 Supreme Court ruling, found that the law prohibits the creation of any employer-assisted organ that engages in bilateral communications with employees on wages, hours or working conditions.

A German-like works council that represents employees -- with management participating on both sides of the negotiating table -- would seem to fall squarely within this proscription.

How does this legal obstacle affect the negotiations at VW’s Chattanooga plant? It means that the UAW’s promise to cede its authority to a German-style works council is empty. Union officials must know such an arrangement is prohibited by U.S. law; the plant’s workers who think otherwise run the risk of being duped.

After securing a majority of plant-employee signatures on union authorization cards, the UAW demanded to be recognized as the representative of VW’s Chattanooga workers. Shortly thereafter, however, eight workers at the plant filed suit against the union charging that they and others were coerced and misled into signing the cards.

A secret-ballot election would be a more expeditious way to determine employee sentiment, and undeniably more reliable. It could take up to two years for the workers’ lawsuit to be litigated. Moreover, unlike the signing of a card, which is public, a worker’s vote by secret ballot won’t be subject to the scrutiny of third parties, peer pressure or coercion. Volkswagen is likely to require a secret ballot, according to recent reports.

Workers’ Options

The UAW fears this prospect. “We know that if we go for a traditional election where the outside organizations could campaign against us, we’d probably lose,” conceded the union’s organizer, Gary Casteel.

The employees can choose the UAW as their collective-bargaining representative, but another option is available to Volkswagen workers who want to organize and create the environment a works council promotes. They can form a union unaffiliated with an outside labor organization -- a factory association that can decide the level of dues or elect to charge no dues at all.

Although no German-like works council can be created, an unaffiliated union would have only one interest: to represent the company’s workers. When negotiating over employment terms and conditions, the unaffiliated union, unlike the UAW, wouldn’t have to consider the agreements to be negotiated with other automobile manufacturers competing with Volkswagen.

The Chattanooga workers can also choose to remain non-union. Despite the restrictions in U.S. labor law against works councils, management has several options, albeit limited, to encourage worker participation and communication. For example, it can use polls, focus groups and other tools to solicit employee reactions to proposed changes in working conditions. It can invite employees to participate in self-directed work teams or employee-involvement committees that don’t function as employee representatives but that address how to increase company productivity, efficiency and quality control.

The hurdles to greater worker involvement in Chattanooga show how the basic premise of the National Labor Relations Act - - that relations between employers and employees are necessarily adversarial -- is outdated. It is incompatible with the modern global economy that requires a cooperative workplace atmosphere.

Nevertheless, the AFL-CIO has opposed legislation, such as the Team Act of 1995, which would have expanded the permitted scope of employee-involvement committees and increased employer-employee collaboration. A more satisfied workforce may be less likely to want to unionize, but it is in the interests of workers, their employers and the U.S. economy.

If Big Labor cares about American workers, and if it wants to survive, it should stop blocking reform that would help everyone.

(Peter Schaumber was a chairman of the National Labor Relations Board under President George W. Bush.)

To contact the writer of this article: Peter Schaumber at peter@schaumber.com.

To contact the editor responsible for this article: Katy Roberts at kroberts29@bloomberg.net.