Saturday, March 5, 2011

Co-operatives, Constructive Dismissal, Bullying and the Law

As a consequence of the 'interesting' behavior to which I was subjected by the WSM corporate office in the Fall of 2010, and then again in the Spring of 2011, when advocating on behalf of WSM's workers, my twin sister engaged in some research on the subject of workplace bullying. It's a bit dry. But some of it may be useful for others in the future. I just quote her lock, stock and barrel:

"Common law protects an employee from retaliation if the employee disobeys an employer on the grounds that the employer ordered him or her to do something illegal or immoral. However, in the majority of cases, the burden of proof remains upon the discharged employee. No U.S. state but Montana has chosen to statutorily modify the employment at-will rule.[9] In 1987, the Montana legislature passed the Wrongful Discharge from Employment Act (WDEA). The Montana Act is unique in that, although it purports to preserve the at-will concept in employment law, it also expressly enumerates the legal bases for a wrongful discharge action.[10] Under the WDEA, a discharge is wrongful only if: "it was in retaliation for the employee's refusal to violate public policy or for reporting a violation of public policy; the discharge was not for good cause and the employee had completed the employer's probationary period of employment; or the employer violated the express provisions of its own written personnel policy."[11] [Wikipedia]

Under the public policy exception, an employer may not fire an employee if it would violate the state's public policy doctrine or a state or federal statute.

This includes retaliating against an employee for performing an action that complies with public policy (such as informing the authorities of an illegal activity, for instance nursing home abuse[12]){or perhaps notifying the press of irregularities within a co-operative? encouraging co-workers to vote in their co-op? Speaking out publicly against unequal treatment of worker-owners vs consumer-owners in the matter of cost of shares,etc?] as well as refusing to perform an action that would violate public policy. In this diagram, the pink states have the 'exception', which protects the employee. (N.C. is pink)

National Labour Relations Act

This is a federal law. It affords certain protections to all employees, whether members of a union or not, who are employed in the private sector - which I assume means everywhere but by the government.

The most important sections of the NLRA are Sections 7, 8, and 9.

Section 7 is the heart of the NLRA. It defines protected activity. Stripped to its essential, it reads:

Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid and protection.

Section 7 applies to a wide range of union and collective activities. In addition to organizing, it protects employees who take part in grievances, on-the-job protests, picketing, and strikes.

Section 8 defines employer unfair labor practices.

Five types of conduct are made illegal:

Employer interference, restraint, or coercion directed against union or collective activity (Section 8(a)(1))

Employer domination of unions (Section 8(a)(2))

Employer discrimination against employees who take part in union or collective activities (Section 8(a)(3))

Employer retaliation for filing unfair-labor-practice charges or cooperating with the NLRB (Section 8(a)(4))

Employer refusal to bargain in good faith with union representatives (Section 8(a)(5))

[Seems to me that at a minimum, we're talking about the first four out of those five.When they refer to 'collective activity they are trying to cover those instances where groups do or try to act on behalf of the collective or for the collective's benefit. Where the co-op is concerned, that includes all workers, or all worker owners, or even all owners. I see noe reason why it would not also cover activity exercised by an individual on behalf of the collective, ie yours. More on how this relates to co-ops below.]

Threats, warnings, and orders to refrain from protected activities are forms of interference and coercion that violate Section 8(a)(1). Disciplinary actions, such as suspensions, discharges, transfers, and demotions, violate Section 8(a)(3). Failures to supply information, unilateral changes, refusals to hold grievance meetings, and direct dealings violate Section 8(a)(5).

Section 8 also prohibits union unfair labor practices, which include, according to legal construction, failure to provide fair representation to all members of the bargaining unit.

Section 9 provides that unions, if certified or recognized, are the exclusive representatives of bargaining unit members. It prohibits the adjustment of employee grievances unless a union representative is given an opportunity to be present, and establishes procedures to vote on union representation.

The NLRA sets out general rights and obligations. Enforcing the Act in particular situations is the job of the NLRB.


This is interesting, and recent - a similar thing is going on in Albequerque - the Board of a co-op is trying to resist the attempts of owners to establish transparency, but here it's gone to court.


It appears that the circumstance of a co-op resisting acting as a co-op, and using the form of the co-op to disguise what is essentially a corporation whilst benefiting from all the tax and other (not least social) breaks afforded a co-op, is not new. The NLRB works with co-ops as well, and the act applies to co-ops.

The Act provides for the assistance of the NLRB is employment situations where the provisions of the Act are being breached. I don't think you have to have been sacked in order to take advantage of this assistance. If you go to the NLRB website you can find out more.

In particular, you can fill out a form outlining what your complaint is. It appears that they will take up your cause, and I think the service is free. I've read some of the case studies. They have been forced to rehire people - though perhaps that's not what you want. But I certainly think that they would be a good place to start. You do not need to be a union member, or indeed want to be, to get in touch with them.

I am especially taken by thoughts of the co-op's breaching of the Carver principles of owner participation and influence in running the co-op. I believe that one of the main reasons co-ops are given tax breaks is because their operations are in theory directed by a broad base of people, not primarily for profit but to serve the needs of the owners. This is so clearly not the case at WSM that I would be seriously tempted to alert the IRS and require an investigation. Of course, there is always the question of harm. But it's on my mind.


This is an article I found about the relationship of labor laws to co-operatives. The first half is interesting, the last half is mostly pretty irrelevant though he has some interesting conclusions and recommendations. It's written in California so the state stuff doesn't apply."