Labor Update

Labor Update

January 1, 1997

By Julie A. Doherty


Union membership in the construction industry has steadily declined since the mid-seventies. Approximately 40% of construction workers were members of the AFL-CIO building and construction unions in 1973. By 1994, that ratio had decreased to less than 19%.** In an attempt to regain their market share, unions have adopted various strategies aimed at attracting new members.

One tactic frequently used in the construction arena is known as “salting,” a direct action union organizing practice that was first utilized by the International Brotherhood of Electrical Workers (“IBEW”). A union “salts” a non-union employer by directing paid union organizers or union members to apply for and accept positions at the open shop. Once hired, the “salt” attempts to organize from within while also working at his or her assigned job tasks. In support of salting programs, unions typically will reimburse the union members for any wage, travel and benefit differentials incurred by the salt while working in the non-union shop.

The unions’ salting tactic has been significantly bolstered by a recent United States Supreme Court decision which sanctioned the practice. The decision, NLRB v. Town & Country Electric, has been touted by many as a “tremendous labor victory” in union organizing efforts. In that case, a unanimous Supreme Court agreed with the NLRB that salting is a permissible activity because a worker can be an “employee” while also receiving compensation from the union to organize the company. This briefing paper will discuss the Town & Country decision and the reactions of various interest groups to the decision.

The Town & Country Decision

Background of the Dispute

Town & Country, a Wisconsin-based non-union electrical contractor, obtained a subcontract for work at the Boise Cascade project in International Falls, Minnesota. The job required that Town & Country employ one Minnesota-licensed electrician for every two unlicensed electricians on the site. In response to Town & Country’s employment advertisements, a local of the IBEW sent a dozen job applicants, including union members and paid organizers, to the interviews. Town & Country hired one of the union members, Malcolm Hansen. After work on the project began, crew members complained that Hansen was harassing them about joining the union, that his workmanship was poor, and that his productivity was low. Hansen was discharged after a few days on the job.

NLRB Rules for Union

Following the firing of Hansen, the IBEW filed unfair labor practice charges with the National Labor Relations Board. The IBEW claimed that Town & Country illegally ceased interviews with certain job applicants upon discovery of their IBEW affiliations and refused to retain Hansen because of his union activity on the job site.

The NLRB, affirming an administrative law judge, ruled that Town & Country had engaged in unfair labor practices in violation of the Taft-Hartley Act. Central to the board’s ruling was its determination that job applicants and workers who are compensated by a union are considered “employees” under the Act and, therefore, cannot be denied work merely because they are compensated by the union.

Appellate Court Reverses NLRB

The United States Court of Appeals for the Eighth Circuit disagreed, however. The appellate court based its opinion on the fact that, once hired in a non-union job, the union member is required by the union’s salting resolution to resign immediately if so ordered by the union. Because the union, and not solely the employer, could determine whether a worker kept his or her job at the open shop, the court held that salts are not protected under the Act. The court reasoned that a company should not be required to employ a worker whose presence and performance is controlled by another party.

Supreme Court Decision in Favor of Union

Granting a petition by the Clinton Administration (which supported the union practice), the Supreme Court agreed to review the case. Town & Country argued to the Court that the salts were the “arms, eyes, and voice” of the unions and lacked any loyalty to the company. Further, the salts were in a position to easily harm the company by quitting when the company needed them or even by sabotaging the firm or its products. Along these lines, Chief Justice Rehnquist questioned whether a company should be obligated to hire an applicant whose only purpose was to get inside the building and blow it up. The unions, on the other hand, argued that an employee can be both a loyal union member and a fully-productive, loyal employee.

Upon concluding its review, the Court sided with the unions and held that a worker can be both a company’s “employee” and receive compensation from a union to organize the company. The Court resolved the Chief Justice’s concern about sabotage by reasoning that its decision does not deprive a company of its various legal remedies where an employee attempts to harm the company. If an employee is an arsonist, for example, the company can take appropriate steps to protect itself whether or not the employee is also compensated by a union. In other words, the company would be able to fire such an employee because the employee is an arsonist, not because the employee is a salt.

Reactions to the Town & Country Decision


The ruling was clearly a setback for open shop contractors. The president of Associated Builders & Contractors (which represents non-union contractors) faulted the ruling for “fail[ing] to address the far larger issue that open shop job sites are being assaulted by union agents [who are] intent–not on recruiting new members–but on putting contractors out of business by manipulating the National Labor Relations Act and filing frivolous unfair labor practice charges.” In his view, the Court’s decision has put open shop employers in the untenable position of retaining employees whose sole purpose is to put them out of business.

The chairperson of the Congressional Committee on Economic and Educational Opportunities denounced the decision as “a government-imposed disruption of the workplace that increases the cost of doing business.” In his words, “we should not condone the use of federal agencies, statutes or regulations for the sole purpose of putting American companies out of business.”


On the other hand, the president of the AFL-CIO’s Building & Construction Trades Department hailed the decision as “a tremendous victory” for union construction tradespeople which “places a strong legal foundation under our organizing efforts” and vindicates construction unions’ use of salting. In response to the decision, the IBEW president stated: “Many employers in this country seem to feel that they can twist the law like a pretzel to keep their workers from forming unions, yet they scream foul when a union uses the law to the fullest to protect its right to organize . . . . We are gratified that the Court ruled unanimously in our favor and believe this is a reaffirmation of the principle that workers have the right to organize free from management interference.”

Legislative Response

Following the announcement of the Town & Country decision, bills were introduced in Congress in 1996 to amend the National Labor Relations Act’s definition of “employee” so as to exclude workers who are also compensated by unions. Intended to nullify the Town & Country decision, these bills would expressly permit open shop employers to refuse to hire or retain an employee who also works for the union.

Testimony in opposition to and in favor of the salting tactic has been received in congressional hearings on these bills. One electrical contractor testified that it typically costs a company about $10,000 to fight each unfair labor practice charge brought by a salt. Another company representative noted that, out of the 18,000 employees it hired in the last eight years, the only unfair labor practice charges filed against the company have been by salts. In response to this testimony, unions have reminded the congressional subcommittee that a company has both criminal and civil remedies available if salts violate the law. The union spokesperson pointed out that the training program for organizers encourages them to perform their work and follow all legitimate rules, while at the same time cultivating relationships with their fellow workers.

Increase in Salting

Reports indicate that the use of salting has increased during 1996. Some of this increase is rooted in a recent change in union leadership that has brought a strong resolve to increase union membership. In 1995, a veritable revolution took place at the AFL-CIO which resulted in the forced retirement of Lane Kirkland after serving 16 years as president. In the AFL-CIO’s first contested election for the office of president, the members elected John J. Sweeney on his campaign promise to substantially increase the federation’s organizing efforts. This change in union leadership and the announcement of the Town & Country decision are undoubtedly responsible for the increased use of salting.


Given the Supreme Court’s decision in Town & Country, the unions’ increased use of salting in its stepped-up organizing efforts, and the bills which have been introduced in both the House and the Senate, salting certainly will be in the news again this coming year. While the tactic of salting is currently a legitimate one, we can expect to see a continued battle regarding this controversial practice.

This discussion is generalized in nature and should not be considered a substitute for professional advice. © FWH&T

Fabyanske Westra Hart & Thomson