National Labor Relations Board V. Town & Country Electric, Inc.: Allowing a Trojan Horse to Trample Employer Rights

By Scheidt, Kathleen Sheil | Journal of Corporation Law, Fall 1998 | Go to article overview

National Labor Relations Board V. Town & Country Electric, Inc.: Allowing a Trojan Horse to Trample Employer Rights


Scheidt, Kathleen Sheil, Journal of Corporation Law


I. INTRODUCTION

Participation in labor unions in the United States is reaching historical lows.1 With the exception of a slight increase during 1993 and 1994, union membership has been declining since the early 1980s.2 The percentage of organized labor in the overall work force declined from 34.7% in 1954(3) to 15.5% in 1994.4 Several factors are responsible for the decline in union memberships. For example, the economy has changed from a manufacturing base to a service base, which has resulted in a loss of traditional union strength.5 Unions thus far have made little progress toward organizing the growing numbers of women and minorities in the work force.6 Additionally, the economy has become more global and unions have been unable to adapt to the resulting plant relocations, partial shutdowns, mergers, consolidations, and downsizings.7

Unions have responded in a variety of ways to membership decline. The union corporate campaign has joined the strike as "part of a wide array of weapons" labor unions use to achieve their objectives.8 The main objectives of corporate campaigns are to gain union recognition or to facilitate contract bargaining. The corporate campaign is designed to pressure a corporation on whatever fronts necessary to achieve the desired result, whether that is union recognition, a favorable collective bargaining agreement, or the suspension of the use of replacement workers.9 Many campaigns develop "divide and conquer strategies" and strike at a company's power base.10 Such campaigns generally involve "actions against employers such as work slowdowns, negative publicity, demonstrations, and efforts to disrupt the company's executive structure and its relationships with other employers."11 The union strategy is to attack the employer in a comprehensive manner that takes into account the company's financial resources, relationships with other institutions such as banks, and its customer and supplier base.12 Thomas Donohue, president of the American Trucking Association, asserts that unions use corporate campaigns "to blackmail companies into concessions [they] cannot otherwise win at the collective bargaining table or during a union organizing drive."13 The result is the undermining of the productivity, profitability, and competitiveness of some of America's best companies.14

A corporate campaign may take many forms and combine several different strategies.15 One tactic that is popular among unions is "salting."16 Salting occurs when unions send paid professional organizers or activist volunteers to nonunion work sites to apply for jobs.17 Union leaders claim their objective is to cultivate relationships with their fellow workers and to persuade them of the value of unionization,18 while corporate management maintains that unions seek to impose financial burdens on companies, to harass and intimidate them, or even to drive companies out of business.19 The "salts" often succeed by either persuading the employer to sign a collective bargaining agreement or causing the company to scale back its business, leave the union's jurisdiction, or go out of business.20 The corporation usually faces the following dilemma: if it hires salts, they tend to file unfair labor practice claims in an attempt to pressure the employer; if the corporation does not hire the salts, they file discrimination charges against the employer.21 Litigating an unfair labor practice charge typically costs approximately $10,000, and, if the charge is meritorious, employers are often held liable for back pay and benefits.22 Such costs can and do drive many companies out of business.23

Despite the effects of salting, the United States Supreme Court endorsed the tactic in NLRB v. Town & Country Electric, Inc. (Town & Country)24 by holding that a worker can be a company's employee even as he serves the union either as a paid organizer or as a volunteer to organize the company.25 The Court concluded that the National Labor Relations Act (NLRA) definition of "employee" includes any employee, regardless of union affiliation or additional employment.

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National Labor Relations Board V. Town & Country Electric, Inc.: Allowing a Trojan Horse to Trample Employer Rights
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