On late Friday night, election results showed that the majority of workers at a Volkswagen (VW) plant in Chattanooga, Tennessee voted against joining the United Automobile Workers (UAW) union. The election was close, with 626 workers in favor and 712 opposed.
But that doesn’t mean workers have lost the chance to organize and be heard at their workplace. While unions, which negotiate pay and benefits with employers, are familiar in the United States, the country has yet to see European-style “works councils,” but VW wants to bring one to Tennessee. These organizations are a formal structure in which workers and management can discuss the company’s finances and business plans as well as ways to improve productivity and safety on the factory floor. They are common in Europe — so common, in fact, that every VW plant has a works council except the one in Tennessee. VW’s policy allows workers to have a say in things that impact work rules and the workplace environment while management includes them in business decisions.
After Friday’s vote, the company will still push forward with its plans to create a works council. In a statement emailed to Bloomberg, Frank Fischer, head of the facility, said, “Our goal continues to be to determine the best method for establishing a works council,” adding, “We found great enthusiasm for the idea of an American-style works council both inside and outside our plant.”
The challenge here at home is that American labor law prohibits a formal works council if it is created by management, rather than by a union or the workers themselves. The National Labor Relations Act “forbids an employer from dominating or impermissibly supporting a labor organization, and a labor organization is any kind of representation committee or plan,” Matthew Finkin, a professor of labor law at the University of Illinois, explained to ThinkProgress, if the purpose is, even in part, discussing wages, hours, and working conditions.
But there are other forms a works council might take at the VW plant that would stay on the right side of the law. That could include “informal employee involvement groups like quality circles or team-based workplace systems,” Thomas A. Kochan, a professor of management and co-director of the Institute for Work and Employment Research at the MIT Sloan School of Management, told ThinkProgress, in which the groups would make recommendations about how to improve their work environment and output. It could also include “task forces that are put together by the employer that ask employees to give them recommendations on anything from problems with work schedules to absenteeism to work family issues or production bottlenecks,” he pointed out. “Even safety and health committees are widely used and are probably not violating labor law.” So long as they don’t touch on wages, hours, or working conditions, VW can set these structures up. But it ends up being a “swiss cheese” effort to stay clear of labor laws, Finkin added.
The possibility still remains for the creation of a formal works council, with the ability to talk about safety as well as pay, if it were to be set up by UAW or the workers themselves. Those who voted in favor of unionizing may still want this structure and could work with UAW to create a constitution for the committee and present it to their employer. UAW itself could do it, but might be difficult for it to pour more resources into the situation after a failed fight.
Volkswagen clearly wants the structure in its plant, previously saying a works council in the U.S. would be based on “positive experiences” with them elsewhere. It likely realizes that businesses can reap benefits from these arrangements. Works councils in Germany “have been shown to enhance efficiency, adaptability and cooperation,” as Kochan and Finkin wrote recently. A paper from the 1990s found that works councils can produce new solutions to the problems that face a company while making workers more wiling to communicate with management and to take a longer view of the company’s decisions and investments in their own skills.
Workers can also experience benefits. Formalized works councils usually require that management share real information with their workers. And workers are interested in a more collaborative relationship with management that includes some power to influence decisions, as David Madland, director of the American Worker Project at the Center for American Progress, previously told ThinkProgress.
There is a chance, of course, that the company wouldn’t feel a need to heed workers’ input. But while they just voted down a union this time, that could be the fallback if they end up feeling frustrated about being heard. “Say you have this group dealing with some issue, and [management] suddenly says I don’t give a damn what you say about this, I’m the boss,” Richard Freeman, Herbert Ascherman professor of economics at Harvard University, told ThinkProgress. “You’ll end up with something like a union” so that workers can get some respect and power.
While unions struggle to expand at a time when their membership numbers keep dropping, works councils, or similar informal structures, have the potential to catch on. “I think it has tremendous potential to spread far and wide in the United States,” Madland said. Many multinational companies are used to engaging with their employees in this way.
One way to speed that process along would be to change labor laws so that formalized works councils would be legal in the absence of a union. American labor law “is so out of date that we need to find ways to let workers have an opportunity to choose the form of representation they want, whether formal collective bargaining or some type of elected council like this,” Kochan said. The problem is the politics, as labor law reform isn’t likely to happen any time soon. In the meantime, however, VW will push forward and try to find a way to bring the voices of their workers into the mix.