THE LEGAL

LIMITATIONS TO SELF-
DIRECTED WORK
TEAMS IN
PRODUCTION
PLANNING AND
CONTROL
 GROUP MEMBERS

 Jawairia Arshad

 Faryal Gilani
 PURPOSE

 The purposes of this article are:

 To examine the legal limitations of using

employee teams in production planning and
control.

 To provide a set of guidelines production

managers can use in implementing employee
teams.
 BACKGROUND…

 Dumond concluded that the use of employee

teams is a key component to TQM success. All
successful companies in his study reported
using functional employee teams.

 Tatikonda and Tatikonda further concluded:

“Flat organizations, empowerment, cross-
disciplinary and cross departmental efforts are
essential for TQM success…”
 BACKGROUND…
 Teams can range from a quality circle on one
end to a self-directed work group on the other
hand.

 Quality circle:
 Small group of people
 Meet frequently
 Uncovering and solving problems
 Concerning quality, process capability, and
process control
 BACKGROUND…
 Self-Directed Work Teams:
 Small, independent, self-organized and self-
controlled group
 Members flexibly plan, organize, determine and
manage the duties and actions
 Supportive functions
 Work without supervision
 Authority to select, hire, promote or discharge its
members
EMPLOYEE TEAMS AND CASE LAW

 Whetheran employee participation program

would violate the NLRA would depend on:

 Would the team be considered a labor

organization under Section 2(5) of the Act

 If so, does the employer dominate that labor

organization according to Section 8(a)(2)
 IS THE TEAM A LABOR
ORGANIZATION?

 According to NLRB, there are four criteria:

1. Employees participation
2. The organization purports to represent
others
3. Purpose of the organization
4. Concerns of the organization
 EMPLOYEES PARTICIPATION

 Under NLRA:
 “Supervisors” are excluded from being an
employee [Section 2(11)]
 It is possible that all members of a team are
treated as “supervisors”
 If this is the case, section 2(5) will not even
apply
 “Managerial” employees are also excluded
from being employees [Section 2(11)]
 THE ORGANIZATION PURPORTS
TO REPRESENT OTHERS

A TQM team is considered a labor

organization if it represents other
employees.

 Ifall of a company’s employees are

organized into teams, the team will not
constitute a labor organization under the
Act.
PURPOSE OF THE ORGANIZATION
 The purpose of the organization is to deal with
employers.

 In NLRB “dealing with” means if a group of employees

discusses things with the employer, then the dealing with
requirement is likely to be satisfied.

 One exception: If the team has the authority to resolve

employment-related problems on its own, the “dealing
with” element is likely to be absent.

 
PURPOSE OF THE ORGANIZATION

 “Is the team able to take action with

information provided to management, or is
the team required to ask permission to take
the action?”

 Ifthe former is true, the team is not to be a

labor organization.
 CONCERNS OF THE
ORGANIZATION

 Ifthe team deals with matters other than

working conditions that are:
 Wages
 Grievances
 hours of employment etc.

Then, it is not a labor organization.

 DID THE EMPLOYER DOMINATE,
INTERFERE WITH, OR SUPPORT THE
TEAM?

 YES- violation of the section 8(a)(2) of the Act.

 NO- no violation of section 8(a)(2) of the Act.

 OBSERVATIONS AND
CONCLUSIONS
 Firstly,
 If the purpose of using teams is to solve
problems, then it is legal
 If the purpose is to dissuade formation of a
union, then it is illegal.
 Secondly,
 Empowerment means empowerment that is:
 The team has the responsibility to make the

changes by its own actions.

 Management must not hold veto power over

those actions, but team may keep management

informed.
 OBSERVATIONS AND
CONCLUSIONS

 Finally,
limit the scope of the team's
responsibility to accepting the current
working conditions.

 Managers must be aware that the law is

constantly evolving because the Board or
Court will not interpret or apply the same
way every time. 
QUESTIONS