Employee Resource Groups Can Create Labor Issues

Employee resource groups (ERGs) for female and black workers, as well as other demographic groups, are a popular part of many organizations’ diversity and inclusion efforts. But U.S. employers must pay special attention to the structure and operation of such groups to be sure they don’t become a management-favored union called a “sweetheart union,” an employment attorney says.

“As long as a sophisticated employer understands where the lines are drawn and they stay on the right side of the line, they can use these committees as they see fit,” says Steven D. Wheeless, a partner with the law firm of Steptoe & Johnson LLP in Phoenix. “But the vast majority of employers don’t know where the lines are drawn—or even that there are lines.”

Legal challenges associated with employee affinity groups are most likely to arise when an employer refuses to allow a particular group to form, he says, such as one associated with a particular religion.

But that’s not the only issue employers should worry about.

“The National Labor Relations Act controls collective actions between employers and employees whether a union is present or not,” Wheeless says. So if a group has a back-and-forth exchange with members of management on a recommendation to adopt flextime to improve work/life balance, it could become an in-house union “in a colloquial sense,” he says.

The key, he says, is for such groups to avoid bilateral negotiations on terms and conditions of employment, such as wages, work hours and benefits. Group members can discuss such topics, he says, and even brainstorm ideas, as long as they don’t make recommendations, appear to represent other employees or negotiate with management.

“Most affinity groups don’t [intentionally] sit down to talk about terms and conditions of employment,” notes Wheeless, who represents management in labor relations and employment matters. Rather, they tend to focus on issues such as mentoring, equal access, promotion opportunities and how people are getting along.

But an organization should be prepared to anticipate such conversations and redirect them if they get started.

Structure Means Control

Whether an employee group is controlled by the employer or not is one test used to determine if such a group could be considered a sweetheart union, according to Wheeless.

For example, the existence of an executive sponsor suggests a group is employer-dominated, Wheeless told SHRM Online. The same is true when employers allow group meetings and events to occur during work time on company premises, when the groups are structured formally and when they are asked to focus on business issues.

But that’s how most employee resource groups operate, experts say.

“Today’s ERGs are much more connected to the customer, the community and the external activities of the company,” says Margaret Regan, president and CEO of The Future Work Institute. They spend their time asking “how can we help the business?”

For example, she says, employee resource groups are being used in the pharmaceutical industry to encourage people of color to participate in clinical trials, something they have been historically resistant to do.

The structure, the purpose and even the label of employee resource groups has evolved over time, according to Regan. “For many years everyone called them affinity groups, but that gave people the impression that only those in the group could belong,” she told SHRM Online. Some were later called employee networking groups, but now the preferred term is employee resource group or business resource group, she says.

“There are still some groups that are more socially oriented,” says Janice Bowman, president of the Association of Diversity Councils. “What we are seeing now is that companies want to move away from that and want to work more strategically.”

When groups existed primarily for social networking, there wasn’t much accountability, Bowman says. But now they have a formal structure, a specific purpose, and goals and objectives linked to business goals.

The size of an employee resource group will depend on the demographic being represented, the size of the employee population and the intended purpose of the group. When a group is focused on a core business purpose, an organization might be more selective about who participates, Bowman says. Other groups might be open to everyone with an interest in the group’s target population.

The more open the membership and the more random the membership, the better, according to Wheeless. “In my experience, the groups say they are open to everyone but it’s the same group of people. If so, it takes on the form of a standing committee,” he says.

A Growing Trend

According to the 2008 Catalyst Member Benchmarking Report, which focused on employee resource groups, 83 percent of more than 200 respondent organizations said they had at least one ERG. Nearly one-half (45 percent) said ERGs were open to all employees, and 91 percent of organizations with ERGs said they had organization-appointed senior-level champions or sponsors.

Organizations say they plan to create more ERGs.

A study conducted by the Boston Consulting Group for the World Federation of Personnel Management Associations in 2008 found that 49 percent of the more than 4,700 executives from 83 countries surveyed—and 62 percent of North American respondents—said they expected their organizations to create ERGs. Just 28 percent of worldwide respondents and 35 percent of North American respondents had such groups in 2008.

More organizations—even smaller ones—are fostering the creation of employee resource groups, Bowman notes, by providing application forms and specific instructions to employees regarding the types of information needed for a group to be sanctioned.

The Facilitator’s Key Role

Executives at a very senior level are often tapped to sponsor employee resource groups, Bowman says. But that doesn’t mean that they drive the meeting agenda. Instead, she says, meetings tend to be employee-led.

The role of the executive sponsor is to make sure that ERG activities are tied to business, Regan says, and to make sure that the voice of that group is carried up to the executive level. However, executive sponsors generally don’t dominate the discussions at group meetings, she says, because they are operating outside their area of expertise and want to listen to what employees have to say so they understand the issues the group is dealing with.

In addition to sponsors, groups have leaders and co-leaders who typically hold management-level positions, Bowman says.

“Any managers that are involved [in an ERG] have to be there in a representative or facilitator capacity and not as a participant,” according to Wheeless. The reason? “When a manager speaks, they are a representative of management, and what they say can be scrutinized,” he says. They don’t have the luxury of “sitting around and venting with rank-and-file employees.”

Wheeless, who trains supervisors on how to avoid union-organizing efforts, emphasizes the need to train ERG facilitators and executive sponsors so they know what pitfalls to avoid.

For example, at the beginning of an ERG meeting a facilitator should say, “We’re not here to make policy or to negotiate, but we are here to brainstorm and get good ideas,” Wheeless says.

All ideas shared during a meeting should be recorded and submitted to the appropriate decision-makers, he says. The group should not be encouraged to reach consensus or to make a recommendation. “A consensus that arises naturally because it’s the right idea or a good idea is no problem,” he says, but any forced consensus implies that a recommendation is being sought from an ERG—an outcome which he says should be avoided at all costs.

“That’s why it’s important for a management representative to collect the information,” Wheeless notes. If necessary, they can jump in and say, “We are not here to get the best idea or to make a recommendation but to collect all ideas, and then it’s up to management.”

Moreover, facilitators should not permit employees to present ideas their colleagues have submitted, Wheeless says, so as to avoid any appearance that the group is representing other employees. In this case the facilitator would say, “We are here to hear your ideas. We’re not set up to collect ideas from others, but if they want to participate, that’s great.”

Do’s and Don’ts

Wheeless suggests that organizations practice several do’s and don’ts when any type of employee communication committee exists:

• Do select employee participants at random.
• Do arrange for a turnover of employee group members.
• Do limit discussions to issues involving work and product quality, production standards and issues, safety, marketing, customer relations, and efficiency.
• Do share information, ideas and experiences.
• Do engage in brainstorming.
• Do present a whole range of ideas to management on each issue rather than a single proposal.
• Do encourage managers to facilitate discussion among employee participants.
• Do seek input from sources other than the employee group.
• Do answer questions from employees on policies and procedures (including questions about unions).
• Do refer to the union those issues that are proper subjects for bargaining if the facility is unionized.
• Don't have employees vote for representatives to the group.
• Don't encourage or allow group members to speak on behalf of, advocate for or otherwise represent other employees.
• Don't encourage employees in the group to report back to co-workers.
• Don't divide into subcommittees or study groups to produce recommendations or make decisions.
• Don't allow employees to engage in give-and-take exchanges ("negotiations") with management members in the group.
• Don't accept, reject or vote on ideas or suggestions from the group's members during the meeting.
• Don't let the group consider personal grievances (unless it's going to rule on them and it is not a violation of the collective bargaining agreement for them to do so).
• Don't compel the group to reach a consensus and present a single, unified proposal on a subject.
• Don't let the group respond to management action on issues considered by the group.

Future of ERGs

Regan predicts that employee resource groups will flourish over the next five to 10 years with a continuing focus on business issues and continuing involvement of executive sponsors.

Employee resource groups are a valuable recruiting and retention tool, she says: “If you can say, ‘We have a vibrant network of African-Americans,’ that’s a very important part of attracting people, especially to communities where there aren’t a lot of other people like them.”

Regan predicts that employee resource groups focused on religion and spirituality will be more common, as will those addressing generational issues.

Though some might believe that such groups are divisive and others don’t want to participate because they don’t want to be set apart with a particular group, Regan believes that those concerns will fade. “People newer to diversity and inclusion will stop being afraid of them,” she says.

Rebecca R. Hastings, SPHR, is an online editor/manager for SHRM.

Related Articles:

Measure Employee Resource Groups To Yield Business Results, SHRM Online Diversity Discipline, Oct. 1, 2007

Employee Networks, HR Magazine, June 2006