Monthly Archives: December 2011

Ramble On: How Workplace Rights Depend On Employee Conversations

Dec 19, 2011 Matt Bodie

How and why do workers join unions?  These most basic questions remain the source of significant academic and policy debate.  Over the past two decades, unions, employers, and scholars have refocused on the importance of organizing and, in turn, the law relating to employee representational choice.  The Employee Free Choice Act—currently in legislative limbo—would dramatically change the current structure by allowing unions to collect signature cards from a majority of the workers to be represented.  Under the current system, however, unions must provide signature cards from at least thirty percent of the employees in order to move on to a secret ballot election.  In the campaign period before the election, both parties are allowed to press their case vigorously—within limits.  In a notable turn of phrase, the NLRB endeavors to establish “laboratory conditions” during the campaign period in order to determine the “uninhibited desires” of employees.  General Shoe Corp., 77 N.L.R.B. 124, 127 (1948).  As it turns out, establishing laboratory conditions is largely confined to a series of prohibitions: no threats, no bribes, no racially inflammatory speech.  There is no obligation to insure that employees have the information they need to make a proper decision.

In Communication Breakdown, Professor Hirsch takes a new and compelling angle on this regulatory approach.  While recognizing the importance of protections against coercion, he argues that the law has thus far overlooked the importance of positive employee discourse.  He makes his case systematically.  First, Hirsch marshals economic and psychological concepts to support the critical role of discourse in group cooperation.  Using the work of scholars such as Olson, Ostrom, Axelrod, and Bar-Tal, Hirsch convincingly demonstrates how communication of information between interested parties is a critical catalyst to collective action.  Without communication, parties cannot identify and evaluate collective interests or develop a plan of concerted action.  Information-packed communication exchange—which Hirsch calls “discourse”—must be protected and even encouraged in order for employees to determine whether they would benefit from unionization.

Communication Breakdown then analyzes the existing labor law doctrine on workplace communication and finds it mostly missing.  Hirsch has a real talent for explicating the work of the NLRB and courts in labor law.  Here, he first discusses the hurdles to employee communication posed by the modern workplace: increased employee mobility, lower job security, and increased workplace complexity.  He notes that while electronic communication can overcome some barriers to discourse, face-to-face speech is particularly important in establishing trust.  (He uses psychological research here to convincing effect.)  The law has largely failed to address these challenges, and instead has ignored them or made them worse.  Hirsch works through many of the doctrines surrounding employee speech and representation campaigns and finds that they fail to account for the role of discourse.  He takes on card-check certification and points out the weaknesses in that system’s ability to provide for information exchange amongst employees, employers, and unions.  He then evaluates several potential ways in which the NLRB might better foment and support employee discourse on workplace issues.  Indeed, the Board has already moved to implement one of Hirsch’s suggested reforms—a notice posting describing NLRA rights—through a proposed rulemaking.

There are many things to like about Hirsch’s approach in Communication Breakdown (even beyond the Zeppelin reference).  First, he begins his analysis with an interdisciplinary inquiry into the actual structure of employee cooperation and coordination.  He then moves from the economic and psychological models into doctrinal dissection, and he expertly shows how theory points up the weaknesses of the current regulation.  This blend of interdisciplinary and doctrinal analysis is in the best law review tradition, and it moves the ball significantly in the literature on employee representational choice.  Second, Hirsch is not afraid to go where the analysis leads him, even if it may transgress traditional ideological categories in the bar and academy.  For example, Hirsch points out some weaknesses in the card-check approach, even though that approach is extremely popular with academics.  His critique is nuanced, subtle, and balanced; that is his modus operandi.  But in a field that can be polarized and polarizing, Hirsch follows his scholarly lodestar.  Third, Hirsch opens up a new avenue for future analysis.  His definition and categorization of “discourse” provides a new way for scholars to approach the issue of employee choice.  Communication Breakdown demonstrates that innovation in labor law is alive and well, and need not be at the expense of rigor or pragmatism.

In this seemingly post-EFCA era, perhaps it is time for a new discourse between academics and policymakers on better ways to manage employee representational choice.  Communication Breakdown will be an important part of that conversation.

Understanding ADR in the Non-Union Workplace

Dec 9, 2011 Samuel Estreicher

Much has been written about arbitration of employment disputes in the nonunion sector.  Much of this literature is theoretical and declamatory, rarely involving an examination of actual institutional arrangements, outcomes and perceptions.¹ Some work has been done on outcomes in nonunion arbitrations, but these are hobbled by the inability to track the path different claims may take, including withdrawal and settlement.² Employee perceptions have been studied in the union sector, but almost nothing has been done in nonunion companies, and certainly nothing that is able to provide a direct measure of innovations in alternative dispute resolution (“ADR”)  systems in a given workplace.

Armed with a Ph.D. in Management from the Sloan School at MIT, his J.D. degree from Cornell, and management labor-side experience at Twentieth Century Fox and several  law firms,  Zev Eigen of  Northwestern University School of Law is uniquely positioned and likely to improve this state of affairs in the study of the nonunion workplace.   Eigen understands economics and the importance of revealed behavior but he is equally sensitive to the insights of psychologists like my colleague Tom Tyler. Perceptions of fairness affect behaviors, which have feedback effects for each other.

Eigen’s first work as a law teacher built on his dissertation, under Tom Kochan of MIT’s supervision.  It was a study of employee perceptions of the fairness of adhesive contracts, The Devil in the Details: The Interrelationship among Citizenship, Rule of Law and Form-Adhesive Contracts, 41 Conn. L. Rev. 381 (2008).

In the work under review, Eigen and his coauthor, Adam Litwin, have obtained access to a truly remarkable data set spanning more than 100,000 workers and more than 1,000 locations across the United States provided by a large nonunion company, which they have dubbed “Gilda”s, Inc.”   The authors use employee surveys commenced before the company introduced a four-step ADR system and continuing for several years afterwards—permitted ‘before and after” comparisons of employee perceptions.   The four steps of the ADR system were (1) employee initiation of a claim with management, (2) appeal to the HR department, (3) further appeal to either a peer review panel or unilateral determination by higher-level HR management, and (4) if still not satisfied, resort to final, binding arbitration.

Eigen and Litwin are interested in employee perceptions of voice and justice.  “Procedural justice” is a measure of how employees perceive the fairness of the procedures employed in a particular system; “interactive justice,” the authors tell us, is a measure of employee perceptions of how well their interests are being taken into account by management in making decisions. They find that the company’s introduction of a formal 4-step ADR system culminating in arbitration resulted in a decrease in “perceived formal procedural justice” but an increase in “perceived informal procedural justice” as well as an increase in “perceived interactive justice.”

One would expect, in theory, to find all three measures advancing in the same direction.   It is especially interesting that employees are able to distinguish between the quality of the formal procedural justice they are receiving in the employer’s decision-making process from the quality of the informal procedural justice of those procedures, but one would think that the direction should be other way—that perceptions of formal justice are increasing while perhaps the discretion of management and perhaps other informal processes are on the decline.  Moreover, the introduction of the new ADR system has no discernible impact on employees’ organizational commitment—another counterintuitive result.

Explaining these results will take further work. The authors suggest that employees are perceiving a kind of low-level resistance to the new program by their immediate supervisors: “Immediate supervisors might be incentivized to encourage their employees to trust them to resolve claims instead of allowing HR or Gilda’s as a corporate entity to do so.  Perhaps local managers are actively encouraging employees to trust them, which could be interpreted implicitly as being encouraged to distrust Gilda’s DRS or the company writ large.”  (p. 15) This dynamic is consistent with low-level supervision’s disquiet with the formal processes introduced by union contracts.

I applaud the coauthors, and especially Professor Eigen, for an important contribution to our understanding of ADR in the nonunion workplace.  I look forward to further contributions by Zev Eigen.