Petitioner employer sought review of an order issued by respondent National Labor Relations Board (NLRB), which found that petitioner violated the National Labor Relations Act by establishing illegal company unions. While the NLRB and an intervening labor union cross-petitioned for enforcement of the order, the employer argued that its employee committees were designed to encourage employee-initiated proposals.
The employer sought to set aside an order from the NLRB, which found that petitioner had committed unfair labor practices in violation of the National Labor Relations Act. Respondent cross-petitioned to enforce its order. Numerous amici filed supporting and opposing briefs on whether a current-day "company union" was unlawful. In response to employee dissatisfaction, the employer established action committees to reach bilateral solutions on the basis of employee-initiated proposals. The employer permitted committee activities on paid time within a structure designed by the employer. The Teamsters, which intervened in support of the NLRB, then demanded recognition from the employer. The 7th Circuit ordered that the NLRB’s order be enforced, but declined to address whether "company unions" were legal. The reviewing court held that an employer-dominated labor organization, such as the employers’, that was "camouflaged" to persuade employees that it represented their best interests was illegal. The 7th Circuit held that domination existed because the employer controlled the committees. The court held the evidence showed the employer controlled the form and structure of the unions such that its employees lacked the power to determine their own actions.
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