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Commission on the Future of Worker-Management Relations

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Federal Publications Key Workplace Documents 
May 1994 
Executive Summary of the Fact Finding Report of the Commission 
on the Future of Worker-Management Relations 
Commission on the Future of Worker-Management Relations 
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Executive Summary of the Fact Finding Report of the Commission on the Future 
of Worker-Management Relations 
Comments 
Suggested Citation 
Commission on the Future of Worker-Management Relations. (1994). Executive summary of the fact 
finding report of the Commission on the Future of Worker-Management Relations. Retrieved [insert date], 
from Cornell University, School of Industrial and Labor Relations site: 
http://digitalcommons.ilr.cornell.edu/key_workplace/416/ 
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Property of 
MARTIN P. CATHERWOOD LIBRA* < 
NEW YORK STATE SCHOfll 
FACT FINDING 
REPORT 
EXEOJITVE SUMMARY 
CHYIMESION ON THE FUTURE OF 
\VORKER-MANAGEMENT RELATIONS 
MAY 1994 
U.S. Department of Labor U.S. Department of Commerce 
f5£S 
V«XV 
Commission on the Future of Worker-Management Relations 
Report of Findings: Executive Summary 
At the request of President Clinton, Secretary of Labor Robert B. Reich and Secretary 
of Commerce Ronald H. Brown appointed the Commission to investigate the current state of 
worker-management relations and to report on the following questions: 
"1. What (if any) new methods or institutions should be encouraged, or required, to 
enhance work-place productivity through labor-management cooperation and 
employee participation? 
2. What (if any) changes should be made in the present legal framework and 
practices of collective bargaining to enhance cooperative behavior, improve 
productivity, and reduce conflict and delay? 
3. What (if anything) should be done to increase the extent to which work-place 
problems are directly resolved by the parties themselves, rather than through recourse 
to state and federal courts and government regulatory bodies?" 
The Report of Findings provides the factual base and background, after further public hearings 
and comments from all interested parties, for a final report with recommendations planned to 
be completed in six months' time. 
The report has four majors chapters with some final general observations. 
I 
Chapter I describes an environment for worker-management relations that is markedly 
different from what it was when the shaped decades ago. Sections of the chapter summarize, 
with statistical data, the dimensions of the changing economy, workforce, labor market and 
labor relations outcomes. 
The Commission's findings with respect to the economy and labor market may be 
summarized in the following 25 critical factors: 
1. A long-term decline in the rate of growth of productivity. 
2. An increased globalization of economic life, reflected in trade and capital flows, and 
immigration. 
3. Increased ability of U.S. firms to compete in the international marketplace in the late 
1980s/early 1990s, due to changes in unit labor costs and exchange rates. 
1 
4. Changes in the work performed due to changing technology. 
5. A shift in employment to service-producing sectors from goods-producing sectors. 
6. A shift in the occupational structure of the workplace toward white collar jobs that require 
considerable education. 
7. Millions of establishments and firms of different sizes, whose workplace practices and 
outcomes differ depending in part on the number of employees. 
8. Turl .dlence in many product and financial markets due to deregulation and government 
cutbacks in defense or other programs. 
9. A higher proportion of Americans working than ever before, due in large part to the 
movement of women into the workforce. 
10. An increased minority share of the workforce. 
11. Increased years of schooling by the workforce. 
12. A workforce whose average age has increased as the baby boom generation has grown 
older. 
13. An increased flow of immigrants from developing countries into the United States. 
14. Substantial creation of jobs but high unemployment for the less skilled and considerable 
insecurity about jobs. 
15. Stagnant real hourly compensation, with falling real compensation for male workers, both 
unprecedented in American economic history. 
16. A rising gap in earnings between higher paid and more educated or skilled workers and 
lower paid and less educated workers, that is bifurcating the U.S. labor market. 
17. A sizeable and growing number of low wage fully employed workers in the lower end of 
the earnings distribution whose real earnings fall below that of comparable workers in other 
advanced countries. 
18. A decline in the pay gap of men and women, but which still leaves considerable gender-
based pay differentials; and stagnation in the pay gap between non-white and white workers. 
19. Annual hours of work that exceed those in other advanced countries except for Japan. 
2 
20. A growing number of jobs that diverge from full-time continuing positions with a single 
employer. 
21. An increasing number and proportion of working age men incarcerated or under 
supervision of the criminal justice system. 
22. Stagnant rates of occupational injury and illness and increased workdays lost per full-
time worker, with increased workers' compensation costs. 
23. A decline in the prevalence of collective bargaining. 
24. Fewer strikes or lockouts. 
25. Increased government regulations of the workplace. 
The overall picture is one of dramatic changes. While our labor markets and 
employee-management relations system has done well in adjusting to change in some areas, 
notably job creation, it has done sufficiently poorly in others, notably stagnant real earning 
and growing inequality, to raise serious concerns about the "fit" between extant institutions 
and the web of regulations and the needs of employees and enterprises. 
Chapter II describes the extent and characteristics of employee participation and labor-
management cooperation in American workplaces. In recent years there has been a 
substantial expansion in the number and types of these plans. They are also described in a 
variety of terms - quality circles, employee participation teams, total quality management 
programs, self-managed teams, safety and health committees, gain sharing plans, information 
sharing forums, joint task forces, joint labor-management committees including training 
programs, employee ownership programs, worker representation on corporate boards of 
directors, etc. 
These employee involvement and labor-management programs have arisen in response 
to pressures from international and domestic competition, technological changes, and related 
corporate restructuring. They are also influenced by a growing recognition that achieving 
high productivity and quality require changes in work organization that better utilize the 
potentials of the workfoice. 
These employee participation and labor-management cooperation plans function in 
only some workplaces. Some are of quite limited duration. Others are subject to a variety of 
risks and obstacles that limit their sustainability and diffusion. 
Many small enterprises have informal processes for employee participation compared 
to the formal arrangement of larger workplaces. 
3 
The major findings of the Commission are as follows: 
1. Employee participation, in a wide variety of forms, is growing and is partially diffused 
across the economy and the workforce, comprising one fifth to one third of the workforce. 
The value of these practices is realized best when combined into a total organizational system 
that rests on trust, information sharing and human resources practices of training and gain 
sharing, and where a union is present, a full partnership between union leaders and 
management. These "high performance" workplaces are estimated to exist in no more than 
five percent of workplaces. 
2. Where employee participation is sustained over time and integrated with other policies and 
practices, the e/idence suggests it generally improves economic performance. 
3. Interest in participation can be expected to grow in future years as the education of the 
workforce rises, technology creates more opportunities to share information and delegate 
decision-making authority, and the pressures of competition require continuous improvement 
in productivity and quality. 
4. Survey data suggest that between 40 and 50 million workers would like to participate in 
decisions on their job but lack the opportunities to do so. 
5. Many managers, workers, and union representatives believe employee participation and 
labor-management cooperation are essential to being competitive in their industries and to 
meeting employee interest and expectations. However, some employees, middle managers, 
and union leaders are skeptical or critical of employee participation processes. 
6. Labor representatives view employee participation as a means to enhance workplace 
democracy as well as economic competitiveness. The believe that independent representation 
is essential to achieving these goals. 
Most management representatives see employee participation as an integral part of the work 
process and believe effective participation can be achieved in both union and non-union 
settings. 
7. The labor and employment legislation enacted in the 1930s and related regulations raise 
questions about a variety of forms of contemporary employee participation. This is 
particularly true of (1) employment laws and regulatior.s that distinguish between "exempt" 
and "nonexempt" employees or among "workers," "supervisors," and "managers," and (2) 
labor law that may limit the scope of employee participation in non-union settings. 
Ill 
Part A describes the experience under the National Labor Relations Act (Wagner Act, 
4 
1935 and the Taft-Hartley amendment, 1947). Part B is concerned with "contingent" 
workers, the Construction industry and the experience under the Railway Labor Act. 
Part A focuses on how effectively the NLRA has worked to provide American workers 
the free choice whether or not to join a union and to bargain collectively with their 
employers, which is the unifying principle on which labor, business, and the American people 
concur. 
In most workplaces with collective bargaining, the system of labor-management 
negotiations works well. Conflict is relatively low, and unions and firms have developed 
diverse forms of new cooperative arrangements. There relation among workers, their unions 
and managements in these workplaces are well-regarded by these parties. 
Where much conflict and delay does occur is in the process of providing workers a 
democratic choice to organize a union, in previously unorganized workplaces. Only a small 
proportion of the U.S. workforce is involved in NLRB representation elections, and only a 
small number of employers and unions have been found guilty of unfair labor practices. 
NLRB representation elections are the way the nation offers workers the right to choose union 
representation, and conflicts in this arena can create an atmosphere of confrontation in 
worker-management relations throughout the economy. 
V 
The principle findings are summarized in the following points: 
1. American society — management, labor, and the general public — support the principle that 
workers have the right to join a union and to engage in collective bargaining if a majority of 
workers so desire. 
2. The number of NLRB elections held, the number of workers in elections, and the number 
in units certified for collective bargaining had diminished over the past several decades, 
3. Representation elections as currently constituted are a highly conflictual activity for 
workers, unions, and firms, This means that many new collective bargaining relationships 
start off in an environment that is highly adversarial. 
4. The probability that a worker will be discharged or otherwise unfairly discriminated 
against for exercising legal rights under the NLRA has increased over time. Unions as well 
as firms have engaged in unfair labor practices under the NLRA. The bulk of charges found 
meritorious are for employer unfair practices. 
5. The legal relief afforded individual employees fired for exercising their rights under the 
NLRA was designed to be remedial. The legal relief afforded individuals under more recent 
employment law is more severe. 
5 
6. Relief to employees whose employer has bargained in bad faith with them requires the 
employer to cease and desist such tactics. 
7. Roughly one third of workplaces that vote to be represented by a union do not obtain a 
collective bargaining contract with their employer. 
8. There is a dismal aspect of American labor relations in which the rights of some 
individual workers are violated by some employers who resist the effort to organize. 
Part B(l) notes that one of the significant developments of the past decade or two has 
been the growth in the number and proportion of workers with relationships to those that 
provide job opportunities that diverge from full-time continuing positions with a single 
employer. The term "contingent workers" often includes part-time workers, some of whom 
are voluntarily part-time, some of whom would like full-time work, and some of whom are 
multiple job holders. It also includes employees of temporary help agencies - who may be 
full-time workers - and some of the self-employed including "owner-operators" of independent 
contractors with only a single contract of employment. 
The contingent worker issues pose a number of important and complex questions about 
the application and enforcement of employment laws, such as the Fair Labor Standards Act 
and labor-management statutes. The Commission intends to devote more attention to this 
subject. 
Part B(2) reviews the conflicted developments and problems in the application of the 
National Labor Relations Act to the construction sector. It summarizes the views of the union 
and non-union segments of the industry as to changes in the present legal framework and 
poses questions for further deliberations. 
Part B(3) concerns the experience under the Railway Labor Act affecting the railroad 
and airline industries. The factual review raises a number of specific questions for discussion 
with affected parties. 
IV 
Chapter IV concerns employment regulation, litigation and dispute resolution. 
The National Labor Relations Act (anc earlier Railway Labor Act) were the pioneering 
forms of federal, legal regulation of labor-management relations at the workplace. By the 
1990s a very different model of legal intervention, employment law, has come to play a much 
more prominent role both on the job and in the courts. 
American employees have now been promised a wide variety of legal rights and 
protections by both federal and state law makers. These include minimum wages, a safe and 
6 
healthy workplace, secure and accessible pensions and health benefits once provided, adequate 
notice of plant closings and mass layoffs, unpaid family and medical leave, and bans on 
wrongful dismissal, without discrimination on account of race, gender, religion, age or 
disability. Implementation and enforcement of these legal rights against noncomplying 
employers requires litigation in the ordinary courts and/or administrative proceedings before 
specialized agencies. 
The workers best able to take advantage of the law are upper-level employees whose claims 
(usually about termination) are financially worthwhile to sue about, or groups of employees 
with some form of representation. 
The Commission's summary findings include: 
1. Federal laws governing the workplace increased dramatically since the 1960s, with a 
corresponding expansion in the regulations and rules that guide their administration and 
enforcement. Administration and enforcement are not always well funded, and compliance is 
not always achieved in some sectors. 
2. The American workforce and workplaces have become more diverse, making it difficult 
for the laws and regulations to fit these changing circumstances. 
3. The private institutions Americans have traditionally relied upon to resolve issues without 
resort to government regulations or court litigation, collective bargaining and grievance 
arbitration, declined in coverage and were limited in their finality by court decisions. 
4. Neither mediation and arbitration, nor the newer more informal employee participation and 
alternative dispute resolution systems are being utilized to their full potential for dealing with 
issues and resolving disputes that now are regulated by law. These procedures would need to 
be modified if they are to fit different settings in enforcing public laws. 
5. Workplace litigation caseloads and costs rose faster than other areas of law. Employment 
cases in the federal courts increased by over 400 percent between 1971 and 1991. 
6. Agencies responsible for administering these laws experienced increasing backlogs and 
delays in processing cases. 
7. The administrative procedures for resolving employment cases are complicated ,y (1) the 
large number of different agencies, enforcement regimes, and remedies available under the 
different statutes; and (2) the varying scope of judicial review accorded agency decisions. 
8. The U.S. relies on the civil court system to litigate employment disputes while many other 
countries use specialized, tripartite employment courts. 
7 
9. Negotiated rule making can improve the efficiency and acceptability of the regulations 
required to implement and enforce the objectives of laws governing the workplace, but it has 
seldom been used for employment issues. 
V 
The Commission emphasizes the interdependence of the three issues presented to it 
and the interdependence of the findings of the previous three chapters. Employee 
participation, rights freely to exercise or refrain from representation, and dispute resolution are 
a seamless whole for the future of worker-management relations. 


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