Briefing Paper No. 18

Are Quality Circles Illegal? Global Competition Meets the New Deal

By Charles W. Baird
February 10, 1993

Executive Summary

In an age of growing global competition, American business has just learned that its efforts over the past few years to improve efficiency by involving workers more closely in making decisions run afoul of the 1935 National Labor Relations Act. In December 1992 the National Labor Relations Board declared that, in nonunion firms, labor-management cooperation on a wide range of issues is illegal be cause the committees through which such cooperation takes place amount to “company unions.” The full effects of the board’s decision in the Electromation case are unknown, but companies are already abandoning their labor-management committees. Meanwhile, organized labor, which brought the Electromation complaint, is stepping up its efforts to capitalize on the decision, arguing that under the law the only way workers can cooperate with management is through unions.

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Charles W. Baird is professor of economics and director of the Smith Center for Private Enterprise Studies, California State University, Hayward.