COLUMN ONE : Settling the Score In-House : More non-union firms are setting up meaningful grievance procedures that allow employees to challenge supervisors. Businesses hope to avoid going to court, where verdicts can be expensive.

Mike Johnson had a problem with his boss. Rather than stew about it, as most non-union workers might, he had another option. He took the supervisor to court--company court.

Johnson felt that the supervisor at the Borg-Warner automotive plant in Frankfort, Ill., had unfairly bypassed him in picking four other mechanics to repair a particularly critical furnace.

The repair meant overtime, and a weekly list posted by the company to make sure overtime was spread evenly showed that he had recently accumulated less of it than the mechanics who were picked.

The court--a panel consisting of three hourly workers such as himself, the plant manager and a supervisor not involved in the dispute--operated “like a (union) grievance committee,” Johnson said.

It heard from his supervisor, who said he felt that he had to pick the “absolute best” mechanics for the job because it was so important, and from Johnson, who said that he had done the same kind of job before without complaints about his performance.

Then the panelists retired to deliberate. They decided by secret ballot that Johnson had a legitimate gripe. They awarded him the $210 in overtime that he would have earned had he been chosen.

“I kind of applaud the management to allow something like that,” Johnson said. “In my case especially, because I won.”

Such challenges to management decisions are being played out at a small but increasing number of non-union firms, which have begun providing formal grievance procedures similar to those found in unionized firms’ collective-bargaining contracts.

In part, firms hope to persuade workers that unions are not needed to protect their interests. The firms also want to resolve disputes in-house. When disgruntled or fired employees take them to real courts, the price can be punishingly expensive.

Employees can pay a price for taking complaints to a grievance committee. Supervisors retaliate. But retaliation at non-union firms, studies show, is no worse than in union shops.

A third or more of large corporations have adopted grievance systems, but many are just window-dressing and do not offer serious protections for aggrieved employees.

Despite recent “exponential growth” in the use of such systems, there are only 70 to 80 firms nationwide that have “real good ‘due process’ . . . where the manager gets reversed part of the time,” said David W. Ewing, former managing editor of Harvard Business Review and author of the 1989 book “Justice on the Job.”

Companies that met those standards, in Ewing’s view: Bank of America, NBC, Northrop Corp., Cigna, IBM, Citicorp, Control Data, Donnelly Corp., Federal Express, two Honeywell divisions, John Hancock Mutual Life Insurance Co., Polaroid, SmithKline Beecham and TWA.

In both union and non-union firms with serious systems, employees win about 40% of grievance cases, said David Lewin, director of UCLA’s Institute of Industrial Relations.

Non-union employees appear less inclined to file grievances. Lewin’s study of huge, non-union aerospace, financial services and computer products firms found that about 6% of their employees filed a written grievance in a three-year period, compared to about 10% of union employees in school systems, steel mills and hospitals.

Non-union firms typically rely on high-ranking executives or on panels of workers and managers--rather than on outside arbitrators used in union firms--to make decisions. In union and non-union settings, most complaints are resolved through negotiations, long before a grievance panel ruling is required.

One driving force behind grievance procedures at non-union firms has been the legal environment. Forty states over the last decade have recognized that non-union workers have a limited property right to their jobs--a “due process revolution,” in the words of Stanford University labor law expert William Gould.

As a result, wrongful discharge lawsuits have surged, rising from several hundred annually 10 years ago to between 10,000 and 20,000 now.

Only a handful of non-union companies had grievance policies “before these wrongful discharge cases,” said Gould.

James Sidman, employee relations lawyer for Jack Eckerd Corp., operator of a huge Sun Belt drugstore chain, has proposed to his board of directors a progressive grievance system in which disputes would be decided by outside arbitrators.

“The long and the short of it,” he said, “is that we think this would be an opportunity to take these employment disputes out of the hands of juries who are biased” in favor of fired employees and prone to awarding them millions of dollars in damages.

Whether judges would prevent non-union employees who have lost in a grievance procedure from filing complaints in a real court is unclear. Most judges have been unwilling to do that, expressing concerns that the internal grievance procedures are not completely fair.

The mere existence of these procedures has reduced litigation by offering workers a chance to vent their complaints, some companies say. Also, top management has a chance to review decisions of lower-ranking supervisors for fairness.

Sharon Sanchez, labor lawyer for Blue Cross of California, said 50 lawsuits were pending against the 2,800-employee company in 1985, when a grievance system for non-union employees was adopted. Only seven lawsuits are pending today.

Successful procedures at non-union firms vary and are tailored to a firm’s corporate culture, said Columbia University Prof. Alan Westin, co-author of the 1988 book “Resolving Employment Disputes Without Litigation.”

At NBC, where people “want to talk and talk about their problems,” a counselor is provided to try to work things out, “like (in) therapy,” Westin said.

At Federal Express, the pilots and couriers sought and got a more structured system that says “these are the rules, prove I broke them.”

At companies where grievance systems are taken seriously, supervisors know that they can be reversed even on the most important issues.

Robert Kopack, a Federal Express manager in the Detroit area, had his decision challenged when he fired a courier for leaving an overnight letter without permission in the doorway of a customer who was not home.

When the customer complained, Kopack investigated and concluded that the courier had forged the customer’s signature on a form saying that it was OK to leave the letter.

The courier, who had worked for the company 10 years with a nearly spotless record, said that it was all a misunderstanding. He appealed to the company’s top managers, who met and decided that they could not tell who was right. As part of the company’s “guaranteed fair treatment procedure,” they referred the case to a “court,” dominated by the courier’s peers, which held a formal hearing in a rented hotel room.

For Kopack, it was very much like going to a real court, but plaintiffs and defendants act as their own lawyers. “You present your facts. Then he presents his,” Kopack said. “Then you have your closing arguments. He has his closing arguments. Then you’re . . . all done. Members discuss it. It’s like a jury. . . . They deliberate as long as they need to resolve it.”

In this case, the employee kept his job but was suspended for two weeks without pay.

At Federal Express, such rulings are binding--and, the company says, employees win 60% of grievance proceedings. There is a catch: Grievance panels are used only when management feels that it cannot decide whether a supervisor or employee is right. Most complaints are settled at lower management levels. Counting those complaints, Federal Express employees win only 20% of grievances.

At service companies such as Federal Express, the idea is that employees treated with dignity will be happier and will treat customers better, said Donald Maliniak, Federal Express’ senior attorney.

Kopack, the supervisor, is not angry that his decision was reversed, and he endorses the grievance procedure. “There’s always that glimmer of hope that you can get your job back, without going to (real) court, without that long battle.”

Are workers punished for having the nerve to complain? They probably are. That is not true in just non-union companies, but in union shops as well, said UCLA’s Lewin.

Those who use grievance systems have about the same performance ratings and chance of promotions as other employees--until they file their grievances. Then their performance ratings decrease, as do their chances of promotions. They are also more likely to leave the company--voluntarily or not.

Complaining employees are not the only ones who may suffer. Supervisors who are challenged often suffer as well.

People’s worst traits are exposed, Lewin reasons, and poorer performers may be most likely to be caught up in grievance cases.

At Borg-Warner, mechanic Johnson said that he was “scared to death” when he filed his complaint. He said the company promised workers that they could use the system without fear of retaliation. “I believed that they would stand behind the policy.”

In his case, his supervisor “was a little upset at first. But after a couple of weeks, everything was back to normal. He didn’t really hold any grudges, (for) which I’m glad.”

COMPLAINT DEPT.

In both union and non-union firms, the vast majority of grievances are resolved by an employee and his supervisor. Progressively fewer complaints make their way to each subsequent appeal.

IN UNION FIRMS, if an employee is unable to work out a grievance with his immediate supervisor, he contacts his shop steward, who takes up the problem with the supervisor’s boss. If the worker loses, he asks his union grievance committee to meet with the plant manager or plant management committee. The final appeal step is binding arbitration, in accordance with the union contract.

IN NON-UNION COMPANIES, an employee typically submits a written complaint and gets a response from the supervisor’s boss. If the worker loses, he takes his complaint to the boss’s superior. And if he loses again, he appeals to an even higher-ranking executive, or to an appeals committee, usually consisting of workers and managers. A few companies use outside arbitrators as a final step to resolve disputes.