Client Bulletin #544

Last week, Volkswagen Group of America announced a "Community Organization Engagement" policy that will allow labor organizations to engage in what the company calls "constructive dialogue" with the company and employees at VW's plant in Chattanooga, Tennessee. The policy announcement comes after the United Auto Workers union lost an election at the Chattanooga plant. After its loss in February, the UAW formed a "members-only" local union to carry the organizing effort forward.

The new VW policy sets forth conditions for groups representing employees to "be eligible" to engage with the company under the policy. "[A]n organization must exist for the primary purpose of representing employees and their interests to employers consistent with the National Labor Relations Act, and must agree to and comply with this policy." Under the policy, if an organization establishes that its membership consists of a certain percentage of employees at the plant, it will have the right to have discussions with management or employees, and access to the plant for communication with employees.

The higher the percentage of employee membership, the greater the opportunities for discussion and organization, generally as follows: An organization with at least a 45 percent membership level can meet with Human Resources representatives bi-weekly and with the plant's Executive Committee monthly. An organization with at least 30 percent membership can meet quarterly with an Executive Committee member. An organization with at least 15 percent support can meet monthly with HR staff. The policy indicates that an independent third party auditor will be used to verify employee names and membership numbers. The policy provides that it may not be used to "request recognition as the exclusive representative of any group of employees for the purposes of collective bargaining." Under current law, many labor experts believe that "bargaining" by an employer with a "labor organization" that does not represent a majority of employees in an appropriate bargaining unit is a violation of the NLRA. However, the VW policy expressly disclaims any interpretation that would conflict with the NLRA. The legal significance of this disclaimer is probably an open question.

Volkswagen's policy announcement drew immediate, favorable comments from the UAW, which identified support within Volkswagen for its continuing organizing bid. On the other hand, a spokesperson for the National Right to Work Foundation was quoted in Bloomberg BNA as calling the policy an effort solely to "prop up the UAW."

It is uncertain whether VW's new policy will allow the UAW to obtain majority support and recognition, or an NLRB election victory. The policy raises many serious legal questions regarding employer dealings with unions that do not represent a majority of employees in an appropriate bargaining unit. Employers in the European Union are used to dealing with minority unions (how's that been working?), a concept that has not been adopted in U.S. labor law. Here are some of the legal questions raised by the VW policy:

• Would application of the policy be "employer support of a labor organization," which is prohibited by Section 8(a)(2) of the NLRA?

• Would application of the policy be unlawful "interference" under Section 8(a)(1) or unlawful "discrimination" under Section 8(a)(3) of the NLRA against employees who choose not to become members of organizations meeting the membership percentage threshholds?

• Does the policy or its application violate Section 8(a)(1) and Section 8(a)(2) by favoring some labor organizations over others, with none having majority support in an appropriate bargaining unit?

• Is the monitoring of membership percentages unlawful "polling" of employees, which is a form of "interference" under Section 8(a)(1)?

• Is it unlawful "interference" that that the policy cannot be used by an organization to get recognition as the exclusive bargaining representative of the employees and that the policy imposes other terms and conditions on employee organizations?

• Will unions acting under the policy only on behalf of their members be subject to claims for breach of the duty of fair representation under Section 8(b) of the NLRA?

• Is it unlawful "interference" that the policy could require employees and labor organizations to reveal individuals' identities and membership as a condition of eligibility for discussions and access?

Because of the scrutiny given to the UAW election loss in Chattanooga and surrounding litigation, these questions just might be answered in the future. We will keep you informed.