In the Fall 1994 and the Winter 1994/1995 Editions of the Employment Law Insider, we reported on important decisions by the National Labor Relations Board and the United States Court of Appeals for the Eighth Circuit on the issue of whether paid union organizers who apply for jobs with a nonunion employer, with organizational activities in mind, are “employees” entitled to the protections of the National Labor Relations Act.

In a decision being hailed as a victory for organized labor, the United States Supreme Court in NLRB v. Town & Country Electric, Inc. (November 28, 1995) found that the National Labor Relations Board properly determined that the definition of the word “employee” must include paid union organizers known as “salts.” “Salting” is commonly used by unions as an organizing technique in construction and in other industries. “Can a worker be a company’s `employee’...if, at the same time, a union pays that worker to help the union organize the company?” asked Justice Stephen Breyer, writing for a unanimous Court. “We agree with the National Labor Relations Board that the answer is `yes.’”

Town & Country, a large non-union electrical contractor from Wisconsin, had obtained a contract to do electrical work in Minnesota. Upon learning that Minnesota required electrical contractors to employ one state-licensed electrician for every two nonstate-licensed electricians working at a job site, Town & Country retained Ameristaff, a temporary employment agency, to help recruit Minnesota-licensed electricians. After conducting three interviews, Town & Country hired a union member, Malcom Hansen, with knowledge of his union membership. Hansen was technically employed by Ameristaff and leased out to Town & Country. Town & Country refused to interview two paid union organizers.

Hansen began organizational activities as soon as he started work at the job site. After work had begun at the site, Town & Country learned that Minnesota did not allow contractors to employ temporary workers to fulfill the licensed-electrician requirement. Town & Country informed Ameristaff that they no longer needed Hansen, and did not want to hire him directly.

The National Labor Relations Board found that Hansen and the two paid union organizers who applied for jobs with Town & Country were “employees” under the Act. Thus, said the Board, Town & Country violated the Act by refusing to interview the two paid union organizers because of their union affiliation and by refusing to retain Hansen because of his union activity at the job site. On appeal, the Eighth Circuit reversed, on the basis that the paid union organizers could not be “employees” protected by the Act.

Justice Breyer of the United States Supreme Court stated that under the National Labor Relations Act, the phrase “any employee” is to be broadly interpreted. He also explained that a person may be the servant of two different masters and likened the situation to “moonlighting,” a widely accepted practice whereby an employer’s control over its workforce is limited to their assigned duties during working hours. Breyer added that a company has adequate means to discipline or terminate “salted” or other employees who are poor workers, or who engage in sabotage or other disloyal activities - - but stated that such individuals are nevertheless “employees” within the meaning of the Act and entitled to its protections.

The Supreme Court’s decision in Town & Country is a significant one, as the issue of NLRA coverage for paid union organizers was presented in approximately 70 cases pending before the Board as the time of the Court’s decision. Union leaders embraced the Supreme Court’s ruling as vindicating “salting” as a viable organizing tactic. Management supporters denounced “salting” as a government endorsed disruption of the workplace requiring companies to “have employees whose sole purpose is to put them out of business.” The introduction of legislation to reverse the effect of the Supreme Court’s decision is a possibility.