Employers, Be Careful With Those Employee Groups!

Some employers, particularly larger ones, may have or may be interested in the creation of employee groups to identify workplace issues and propose solutions. Unfortunately, unless carefully handled, such groups could constitute “labor organizations” under the National Labor Relations Act, and an employer’s authority over such groups could constitute unlawful interference with employees’ rights under the Act, as T-Mobile recently learned in a case before the U.S. Court of Appeals for the D.C. Circuit.

What the Law Provides: It is an unfair labor practice under Section 8(a)(2) of the Act for an employer “to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it.” The Act defines a “labor organization” as “any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the purpose, in whole or in part, of dealing with employers concerning grievances, labor disputes, wages, rates of pay, hours of employment, or conditions of work.” Thus, under National Labor Relations Board law, to find labor organization status, there must be a finding that (1) the organization submitted group proposals, (2) on statutory subjects (regarding the terms and conditions of employment), (3) the proposals received real or apparent management consideration, and (4) there is a pattern or practice of such bilateral dealing.

Background of the Case: In T-Mobile USA, Inc. v. NLRB, the company created an internal organization called T-Voice, consisting of call center employee representatives selected by management. Other employees were told to use those representatives to raise issues regarding frontline and customer problems and complaints (i.e. “pain points”). The frontline problems often involved terms and conditions of employment. The T-Voice representatives submitted their own as well as the pain points from others into a database that was reviewed by managers, who provided a response that was then transmitted by the T-Voice representative to the appropriate employee. There were also a variety of meetings between the T-Voice representatives and managers to discuss both the pain point process and particular pain points. T-Mobile occasionally announced to employees that it had implemented T-Voice proposals, expressly crediting T-Voice.

The Communications Workers of America (CWA) has been trying to unionize T-Mobile for many years. It filed an unfair labor practice charge with the National Labor Relations Board, and the Board’s General Counsel then filed a complaint alleging that T-Voice was a labor organization (i.e., like a union) under the Act, and that T-Mobile unlawfully dominated the labor organization. T-Mobile argued that T-Voice was not a statutory labor organization. The Trump Board agreed, but on appeal by the CWA, the D.C. Circuit sent the case back for further consideration – and this time, the Biden Board held that T-Voice was a labor organization. This time T-Mobile appealed to the D.C. Circuit.

The Court’s Ruling: The D.C. Circuit agreed with the Biden Board that T-Voice was a labor organization under the Act, under which the term is defined broadly and incorporates even informal entities. Applying the four-factor analysis above, it found (1) that T-Voice, as an employee group, was “dealing with” the Company “where the group’s individual members make proposals to management while acting in a representative capacity, even if there is no additional indication that the full group endorses the individual member’s proposal.” It is not required for the group to adopt the proposals as a group to meet this definition. (2) The D.C. Circuit also found that T-Voice dealt with the Company on terms and conditions of employment such as performance metrics, training and equipment (covered by the Act), in addition to customer issues (not covered by the Act). The fact that there were far more customer issues than work issues was not relevant to the analysis. (3) Proposals were clearly considered and addressed by T-Mobile, who responded or reacted to many of them. And (4) because T-Mobile itself described T-Voice as a representative organization for raising concerns about work conditions, and repeatedly acknowledged T-Voice in that context, there was an established pattern and practice of bilateral dealing.

Lessons for Employers: It is critically important that if an employer creates an employee group to address workplace issues, that it is aware of the fact that such group may very well be considered a labor organization subject to the protections of the Act and the jurisdiction of the Board. Any employee groups must be carefully constructed to avoid the triggers of coverage, and employers should consult with counsel regarding those parameters as applied to their individual circumstances.