Case Scenario: NLRB V. TOWN & COUNTRY ELECTRIC, INC. 516 U.S. 85 (1995)

Facts: Town & Country Electric, Inc., a nonunion electrical contractor, advertised for job applicants, but it refused to interview ten of eleven union applicants who responded to the ad. Its employment agency hired the one union applicant whom Town & Country interviewed, but he was dismissed after only a few days on the job. Those rejected applicants were members of the International Brotherhood of Electrical Workers, Locals 292 and 343; they filed a complaint with the National Labor Relations Board (NLRB), claiming that Town & Country and the employment agency had refused to interview (or retain) them because of their union membership, a violation of the National Labor Relations Act (NLRA). An administrative law judge ruled in favor of the union members, and the NLRB affirmed that ruling. The NLRB determined that all eleven job applicants were "employees," as the Act defines that word. The Board recognized that under well-established law, it made no difference that the ten applicants were never hired; nor did it matter that the union members intended to try to organize the company if they were hired, and that the union would pay them for their organizing. The NLRB held that the company had committed unfair labor practices by discriminating against them on the basis of union membership. The United States Court of Appeals for the Eighth Circuit reversed the NLRB.

It held that the NLRB had incorrectly interpreted the word "employee," and that term "employee" did not include those persons who work for a company while simultaneously being paid by a union to organize that company. The decision of the court of appeals meant that the applicants here were not protected by the NLRA from discrimination because of their union membership. The court refused to enforce the Board's order, and the NLRB appealed to the U.S. Supreme Court.

Issue: Does the definition of "employee" under the NLRA include persons working for a company and, at the same time, being paid by a union to help the union organize the company?

Decision: The National Labor Relations Act definition of "employee" [Section 2(3)] is as follows: The term "employee" shall include any employee, and shall not be limited to the employees of a particular employer, unless this subchapter explicitly states otherwise, and shall include any individual whose work has ceased as a consequence of, or in connection with, any current labor dispute or because of any unfair labor practice, and who has not obtained any other regular and substantially equivalent employment, but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse, or any individual having the status of an independent contractor, or any individual employed as a supervisor, or any individual employed by an employer subject to the Railway Labor Act, as amended from time to time, or by any other person who is not an employer as herein defined. The NLRB interpretation of this language to include company workers who are also paid union organizers is consistent with the broad language of the Act itself. That language is broad enough to include those company workers whom a union also pays for organizing. The ordinary dictionary definition of "employee" includes any "person who works for another in return for financial or other compensation." The NLRB's broad, literal interpretation of the word "employee" is consistent with the NLRA's purposes of protecting "the right of employees to organize for mutual aid without employer interference," and "encouraging and protecting the collective bargaining process." Town & Country argues that a worker also being paid as a union organizer is sometimes acting adversely to the company, and the organizer may stand ready to leave the company if so requested by the union.

Town & Country claims that means that the union, not the company, would have "the right to control the conduct of the employee," and therefore the worker must be the employee of the union alone. Town & Country's argument fails because the NLRB correctly found that it was not supported by common law. The NLRB concluded that service to the union for pay does not involve abandonment of service to the company. Common sense suggests that a worker going about the ordinary tasks during a working day is subject to the control of the company, whether or not the worker is also paid by the union. The fact that union and company interests may sometimes differ does not matter. The union organizers may limit their organizing to nonwork hours. If that is so, union organizing, when done for pay but during nonwork hours, would be equivalent to "moonlighting," a practice wholly consistent with a company's control over its workers as to their assigned duties. There are legal remedies for Town & Country's concerns, other than excluding paid or unpaid union organizers from protection under the NLRA. If the company is concerned about employees quitting without notice, it can offer its employees fixed-term contracts rather than hiring them "at will," or it can negotiate with its workers for a notice period. A company faced with unlawful activity by its workers can discipline or dismiss those workers, or file a complaint with the NLRB, or notify law enforcement authorities. The Supreme Court held the NLRB's interpretation of the word "employee" was lawful, and that the statutory definition of the term does not exclude paid union organizers. The Supreme Court vacated the judgment of the court of appeals, and remanded the case is remanded for further proceedings consistent with its opinion.