In December, 1992, The National Labor Relations Board convicted Electromation, an Elkhart, Indiana, electronics manufacturer, of unfair labor practices for meeting with committees of employees in 1989 to discuss employee grievances. The NLRB ruled that Electromation's Action Committees were illegal in large part because the employees were paid for the time they spent meeting with management representatives, without a union being involved.

The NLRB's decision sent shock waves through the Fortune 500, since most large companies now have joint employer-employee "work-quality circles" that attempt to raise efficiency and productivity. But because the circles are usually run by management instead of by a joint management-union committee, the decision implied that such circles are illegal. The Occupational Safety and Health Administration requires manufacturing companies to have joint committees of management and employees to deal with safety issues. But the NLRB warned in an April 15, 1993, memo that such committees, dealing directly with employees, may be illegal under federal labor law.

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