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In September 2015, Volkswagen's "clean diesel" technology was exposed as a sham. Not only were the company's vehicles discharging dangerously high levels of nitrogen oxide, but VW had intentionally rigged its emissions systems to cheat on environmental tests. In the wake of resignations and criminal investigations, the company's governance system came under justifiable attack. Were VW's famously worker-friendly governance policies to blame? This Chapter examines the root causes of the emissions scandal and concludes that VW's governance culture suffered from dictatorial leadership as well as a cozy relationship between management and labor leaders. This culture of complacency led to a lack of accountability at key levels, including executives, shareholders, and regulators. In addition, despite its worker-oriented governance structure, Volkswagen's internal management is still organized along traditional hierarchical lines. Empowered workers, participating at all levels of company governance, would provide a stronger internal culture of compliance, innovation, and sustainability.
The United States has a multidimensional set of employment law protections. From minimum wage and health and safety standards to antidiscrimination and antiretaliation protections, the law provides specific standards and structures to shield workers from egregious employer behavior and remedy the harms inflicted. These mandatory protections dovetail with the organizational power that labor law is intended to confer. The National Labor Relations Act (NLRA) provides for worker representation and obligates employers to bargain with these representatives over terms and conditions of employment. Labor law specifically provides employees with representation and requires management to negotiate with those representatives. And labor law professors have marveled at the spare commands of the NLRA and the depth of the Board’s interpretive nuance, as refined over 80 years.