## Facts

- Electromation, an Indiana manufacturer with about 200 employees, faced employee discontent after changes to attendance policies and certain pay-related practices.
- After 68 employees signed a protest letter, management created five “action committees” to address: attendance bonuses, no-smoking rules, communications, pay progression for new hires, and attendance discipline.
- Employees volunteered via sign-up sheets, but management encouraged participation to fill the committees and set key participation limits (including one committee per employee).
- Each committee included several employees and management representatives; the employee benefits manager played a central administrative role, including drafting committee descriptions and setting agendas.
- The committees met on company premises during paid time, using company-provided space and materials.
- At least one committee developed a proposal (revising an attendance bonus program) that management considered and rejected as too costly; other committees met and discussed potential changes.
- After a Teamsters local petitioned for a representation election, Electromation stated the committees could meet without management; they soon disbanded.
- The NLRB found the committees were “labor organizations” and that Electromation unlawfully dominated or interfered with them, violating NLRA §§ 8(a)(2) and 8(a)(1).

## Issues

1. Whether the “action committees” were “labor organizations” under NLRA § 2(5).
2. If they were labor organizations, whether Electromation dominated or interfered with their formation or administration, violating NLRA § 8(a)(2) (and derivatively § 8(a)(1)).

## Decision

- The Seventh Circuit denied Electromation’s petition for review and granted enforcement of the NLRB’s order.
- The court held the committees were “labor organizations” because they existed, at least in part, to deal with the employer over wages and other terms and conditions of employment.
- The court held Electromation violated § 8(a)(2) because it initiated, structured, and controlled key aspects of the committees, including agenda-setting, procedures, and management participation.
- The court upheld the related § 8(a)(1) finding because employer domination of a labor organization interferes with employees’ § 7 rights.

## Legal Principles

- A “labor organization” under NLRA § 2(5) includes any employee representation committee in which employees participate and that exists, in whole or in part, to deal with the employer over grievances, wages, hours, or other working conditions.
- “Dealing with” the employer is not limited to formal collective bargaining; it includes a bilateral pattern in which employee representatives make proposals and management responds regarding employment terms.
- An employer violates NLRA § 8(a)(2) by dominating or interfering with the formation or administration of a labor organization, including by initiating the body, controlling its structure and agenda, embedding management participants, or supplying significant financial or administrative support.
- A substantiated § 8(a)(2) violation commonly supports a concurrent § 8(a)(1) violation because employer-controlled employee-representation mechanisms tend to interfere with employees’ rights to select independent bargaining representatives.

## Conclusion

The court enforced the NLRB’s order, concluding that Electromation’s employee-management action committees functioned as labor organizations that “dealt with” management over workplace terms, and that the employer unlawfully dominated their formation and operation in violation of NLRA §§ 8(a)(2) and 8(a)(1).


Electromation, Inc. v. Nat’l Lab. Rels. Bd., 35 F.3d 1148 (7th Cir. 1994)