Teams at risk.

A series of new decisions by the NLRB is threatening the legality of nonunion teams. Does that mean the end of cooperation among employers and employees? Maybe - unless the law is updated.

Imagine the damage to your company's competitiveness if suddenly all nonunion, team-based activities were effectively shut down by the federal government. No more quality circles. No more health and safety task forces. No more productivity committees.

As ridiculous as it sounds, the threat is real. A series of new decisions issued by the National Labor Relations Board enforcing an outdated section of the National Labor Relations Act makes it illegal for nonunion employees to share decision making with management. This Section 8(a)(2) of the NLRA prohibits nonunion employees from having an effective voice on basic workplace issues such as quality, productivity, scheduling, training, and job assignments. This outdated law must be updated immediately: Shared decision making is an integral part of long-term business strategy. According to the Washington-based Employment Policy Foundation, employee involvement has been responsible for about 70 percent of the increase in U.S. productivity growth seen in the early 1990s.

The law was not without merit when it was passed in 1935. During the labor strife of the Depression, Section 8(a)(2) guarded against company-dominated "sham" unions. The broadly written prohibition was effective, and employer-run unions became virtually extinct by the 1950s, Today, however, this section of the NLRA is being used to brand employer-employee cooperation meetings as illegal company unions.

Consider how the law is being applied now: Monett, MO-based Efco, which makes windows, has grown from 300 to 1,300 employees in 10 years as a result of employee involvement. Its teams recently were ordered disbanded by the NLRB, which was responding to a complaint filed by the United Brotherhood of Carpenters and Joiners of America. The union had failed to generate enough interest among Efco employees to hold an election, and complained that the teams operating there were in violation of Section 8(a)(2).

And Holland, MI-based Donnelly Corp., a maker of automotive glass products that has embraced participative management for more than 30 years, is battling the NLRB, after a self-proclaimed crusader for increased unionization of America's work force who had no affiliation with Donnelly filed an unfair labor charge against the company. After the complaint was dismissed by the NLRB, the crusader, a retired California law professor, contacted a discharged employee and had her file a second unfair labor practice charge. The NLRB reversed itself and issued a Complaint and Notice of Hearing.

Kodak and other companies place trust in the abilities of these teams because they work. According to a 1994 survey sponsored by the Commission on the Future of Worker-Management Relations, more than 95 percent of America's largest companies and nearly 60 percent of smaller companies use employee teams to resolve many of the most critical issues affecting the workplace and the businesses' ability to compete effectively. Many foreign companies also recognize the value of teamwork and are experiencing success with employee teams. Their teams, however, are not threatened by their labor relations laws. Only the U.S. bans cooperation in nonunion settings.

The Teamwork for Employees and Management Act would revise Section 8(a)(2) to give the same right of cooperation to nonunion employees that is available to union employees. Under the TEAM Act, nonunion employees could participate in quality improvement councils, productivity committees, employee benefit groups, and other forums to facilitate constructive dialogue between workers and management.

The TEAM Act passed the U.S. House of Representatives in September 1995 by a narrow margin and is expected to go to a Senate vote soon. Without the TEAM Act, the only legal way for employers and employees to discuss and solve many workplace issues will be through traditional collective bargaining. That will leave 85 percent of the private-sector work force that is not formally represented by a labor union with one choice: going back to the traditional top-down way of managing.

At Kodak, we have remained globally competitive by empowering employees to participate in decision making. Employee teams played a key role in developing the specifications for the Advanced Photo System, marketed as Advantix. To develop this product, our front-line equipment operators worked side-by-side with design and development engineers. This is only one example of Kodak's employee-team system - a system that was implemented for good reason. Prior to the team management style at Kodak, if the employees' supervisor ordered a piece of equipment shut down, they were not to ask why. They were simply to do what they were told. The lack of flexibility and dialogue between employees and management sometimes caused unnecessary delays in production. Under the old system, for example, a plant employee would have to contact his or her immediate superior regarding production problems. If the supervisor and the employee could not solve the problem, they would have to consult with the general shift foreman and product engineer. Today, the employee team has the authority to investigate the problem and make repairs that only specified, upper-level employees were previously allowed to make.

The TEAM Act is essential to the success of American businesses. Decisions on issues such as workplace safety, productivity rewards, training, and job descriptions will be made by upper management without constructive input from the employees closest to the product and the customer. To remain competitive in the global marketplace, the U.S. needs a skilled and empowered work force. The TEAM Act makes that possible, and should not be seen as management versus labor. With the TEAM Act, business and workers win. Without it, America loses, plain and simple.

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At Monett, MO-based Efco, President Chris Fuldner sees a certain irony in the NLRB's attempt to disband three permanent employee teams. After all, he says, these committees monitor and review policies that affect Efco's 1,300 employees, from safety and employee benefits to general company policy. And, he points out, a profit-sharing program has given employees 25 percent ownership of the privately held company, which makes commercial windows.

"We have for years given employees as much a stake in this company's success as management has," Fuldner says. "While pension plans, profit sharing, and ESOP programs don't have immediate impact, and, therefore, aren't as motivational for younger workers, we've found that empowering them does, because they immediately can see their results in the workplace."

But today, Efco's teams, which each are composed of about 15 non-management members, have been deemed illegal by the NLRB and ordered to disband. Efco is appealing the NLRB's decision and continues to allow the teams to meet, although Fuldner says the decision has had a chilling effect on committee productivity and morale. "There's a pall hanging over the committees," Fuldner says. "The NLRB's decision was seen as taking away something that was popular among employees, something that benefitted them."

Why did the NLRB target Efco - relatively small potatoes for the big agency? Efco believes it had to do with a failed attempt by the United Brotherhood of Carpenters and Joiners of America to get enough interest to organize the shop. The union filed a complaint alleging that the permanent employee committees were labor organizations because they included employees as members and dealt with conditions of employment. The NLRB investigated and found Efco in violation of unfair labor practices. The company is appealing the decision to the full board.

"The consequences are serious now, however," says Fuldner. "The committees were a conduit for the exchange of ideas, and a showcase for talented employees. They gave a lot of people the chance to show leadership and to go farther."

- Frances Nuelle

George M.C. Fisher is chairman, president, and chief executive of Eastman Kodak, a $15 billion imaging company in Rochester, NY.