REPORT: Federal Law Stops ‘Third Way’ Approach To Unionizing

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Attempts to establish German-style work councils as an innovative and new way of unionizing face significant legal obstacles under current law, according to a U.S. Chamber of Commerce report Thursday.

Federal law establishes how unions, employees and employers may interact, but both unions and businesses have argued current laws are outdated and too restrictive. The law often prevents new and innovative ways for workplaces to interact, as noted in the report, “A New Organizing Paradigm?”

The United Auto Workers (UAW) push for German-style work council at the Volkswagen plant in Chattanooga, Tenn., for instance, could face significant legal obstacles because of current federal law.

“Over the past three years, a new approach has been advocated by the United Auto Workers union (UAW),” the report detailed. “Based on the model of employee engagement found in Europe, and particularly Germany, the UAW has suggested that a ‘works council’ could be established at the Volkswagen plant in Chattanooga, Tennessee. This works council, it is argued, could create a ‘third way’ for employee representation and engagement that avoids the constraints of adversarial unionism.”

The UAW first tried traditional ways to unionize the Volkswagen plant workers, but were unable to do so. Much of the traditional way of unionizing was established under the 1935 National Labor Relations Act, which is one of the main laws governing workplace and union interactions.

“Unlike the adversarial model of labor relations found in the United States, many countries take a different approach to employee engagement in workplace decisions,” the report continued. “In Europe, a works council differs from a trade union. The union operates at an industry level, rather than a company level, while the works council provides an additional, separate path to employee participation at a local level.”

In Germany and other countries that allow work councils, the councils represent workers at individual companies. If workers at a company choose to form a work council, its scope is that company alone. Labor unions establish national industry rules while the work councils adjust them to fit the context of the they were formed in. In contrasts, labor unions in the United States represent their workers at both the national and local levels.

The model in the United States can often become a problem if the union national policy interferes with the needs of workers at an individual company. The model is also based on the assumption employers and unions compete with each other, while the German model allows for a more cooperative relationship, the report notes.

The competitive nature in which the United States model is set up is likely because in 1935, employers and unions were fighting in a way they tend not to today. For instance, management at the Volkswagen was adamant from the beginning about respecting its employees choice when it came to unionizing.

“Both the restrictions on employer interactions with employee committees under the NLRA and the governing documents of the UAW and other unions are simply incompatible with a works council,” the report concluded. “As a result, anything calling itself a works council, whether in Chattanooga or elsewhere, would in reality be nothing more than a traditional union local.”

The report noted the only way to overcome the restrictions is to amend current federal law. The problem is, previous attempts have often failed.

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