You have found an item located in the Kentuckiana Digital Library.
No. 27 "The Labor Relations Bill: An Analysis of a Measure Which Would do Violence to the Constitution, Stimulate Industrial Strife and Give One Labor Organization a Monopoly in the Representation of Workers Without Regard to the Wishes of the Latter," April 15, 1935.
No. 27 "The Labor Relations Bill: An Analysis of a Measure Which Would do Violence to the Constitution, Stimulate Industrial Strife and Give One Labor Organization a Monopoly in the Representation of Workers Without Regard to the Wishes of the Latter," April 15, 1935. American Liberty League. 400dpi TIFF G4 page images Digital Library Services, University of Kentucky Libraries Lexington, Kentucky Am_Lib_Leag_27 These pages may freely searched and displayed. Permission must be received for subsequent distribution in print or electronically. No. 27 "The Labor Relations Bill: An Analysis of a Measure Which Would do Violence to the Constitution, Stimulate Industrial Strife and Give One Labor Organization a Monopoly in the Representation of Workers Without Regard to the Wishes of the Latter," April 15, 1935. American Liberty League. American Liberty League. Washington, D.C. 1935. This electronic text file was created by Optical Character Recognition (OCR). No corrections have been made to the OCR-ed text and no editing has been done to the content of the original document. Encoding has been done through an automated process using the recommendations for Level 1 of the TEI in Libraries Guidelines. Digital page images are linked to the text file. Pamphlets Available Copies of the following pamphlets may be obtained upoc application to the League's national headquarters: Why, The American Liberty League? Statement of Principles and Purposes Progress vs. Change Speech by Jouett Shouse Recovery, Relief and the Constitution Speech by Jouett Shouse American Liberty League Its Platform An Analysis of the President's Budget Message N. R. A. Its Past, and Recommendations for the Future Analysis of the $4,880,000,000 Emergency Relief Appropriation Act. Economic Security A Study of Proposed Legislation Democracy or Bureaucracy? Speech by Jouett The Bonus An Analysis of Legislative Proposals The Constitution Still Stands Speech by Jouett Shouse Inflation Possibilities Involved in Existing and Proposed Legislation The Thirty Hour Week Dangers Inherent in Proposed Legislation The Pending Banking Bill A Proposal to Subject the Nation's Monetary Structure to the Exigencies of Politics The Legislative Situation Speech by Jouett Shouse The Holding Company Bill An Analysis of Proposed Legislation "What is the Constitution Between Friends?" Speech by James M. Beck Where Are We Going? Speech by James W. Congress at the Crossroads Speech by Jouett Price Control An Analysis of Experiments and Recommendations for the Future Yesterday, Today and Tomorrow A Review of Factual Analyses issued by the American Liberty League and a discussion of the Legislative Situation. AMERICAN LIBERTY LEAGUE NATIONAL PRESS BUILDING WASHINGTON, D. C. THE LABOR RELATIONS BILL â˜… â˜… â˜… An Analysis of a Measure Which Would do Violence to the Constitution, Stimulate Industrial Strife and Give One Labor Organisation a Monopoly in the Representation of Workers Without Regard to the Wishes of the Latter AMERICAN LIBERTY LEAGUE National Headquarters NATIONAL PRESS BUR-DING WASHINGTON, D. C. Document No. 17 April, 1935 The Labor Relations Bill â˜… Early in the present session of the Congress the American Liberty League recommended that any extension of the life of the National Recovery Administration be for a temporary period only. It was pointed out that important constitutional questions were awaiting adjudication in the courts and that it would be unwise meanwhile to enact permanent legislation for the control of American industry. Subsequently, on February 20 the President in a special message to the Congress proposed a two-year extension which is embodied in a bill introduced on March 29 by Senator Pat Harrison of Mississippi and by Representative Robert L. Doughton of North Carolina. Recent developments in connection with cases involving the constitutionality of the National Industrial Recovery Act have demonstrated widespread acceptance of the theory that enactment of a permanent law should await final rulings on issues which have a vital bearing on our system of government. Nevertheless, congressional committees are giving serious consideration to the pending National Labor Relations bill. Embraced within its terms is an amplification of the collective bargaining provisions of the National Industrial Recovery Act. The language does even greater violence to constitutional principles than the original Section 7(a) of the NIRA, which according to findings of a Federal District Court is invalid. No effort has been made by the government to expedite an appeal in this case or in any case directly involving the collective bargaining section. The pending Labor Relations bill would be objectionable if enacted without modification as a temporary measure. It would be doubly obnoxious as permanent law. The bill is subject to criticism on these points: 1. It is a clear attempt by law to extend the power of the Federal Government in direct conflict with the Constitution. 2. Its effect would be to retard recovery by adding to the burdens of industry. 3. It would stimulate industrial strife and encourage the enmity of workers toward employers. 4. It would deal an unjust blow at company unions which have been highly successful in the establishment of mutually satisfactory relations between employees and the management in many large industries. 5. It would tend to give one labor organiza- 2 tion embracing only one-eighth of the workers of the country a monopoly in collective bargaining. 6. It would facilitate the movement for a closed shop. 7. It would deprive minority groups of the right to bargain for themselves. 8. It would place restraints upon employers but would furnish no check upon coercion and intimidation practiced by labor groups. 9. It would authorize an inquisitorial procedure such as has been condemned by the courts. 10. It tends definitely to the destruction of the recognized rights of states to deal with labor matters within their own borders. Terms of Bill The proposed "National Labor Relations Act" was introduced by Senator Robert F. Wagner of New York as S. 1958 and by Representative William P. Connery, Jr., of Massachusetts as H.R. 6288. While legislation for the extension of the National Industrial Recovery Act is before the Senate Finance Committee and the House Ways and Means Committee (S. 2445 and H.R. 7121), the Labor Relations measure is before the Senate Committee on Education and Labor and the House Committee on Labor. The Harrison-Doughton bill for the extension of the National Industrial Recovery Act reenacts with only minor changes Section 7 (a) relating to collective bargaining. In that bill, just as in existing law, it is provided that the collective bargaining provision shall be incorporated in all codes. The provision is not applicable to industries which are not subject to codes. In the Wagner-Connery bill, on the other hand, a broadened collective bargaining provision is applied to virtually all industry without reference to codes. The intention is to make it applicable to industries not actually involved in interstate commerce. It is sought to provide a constitutional basis through establishment of a theory that strikes and other manifestations of economic strife offer obstacles to the free flow of commerce. To facilitate enforcement of collective bargaining the bill bars certain unfair labor practices in the same manner that the Federal Trade Commission Act prohibits unfair trade practices. The bill creates a permanent National Labor Relations Board to supplant the present board whose authority expires on June 16, 1935, when the NRA also ceases to exist unless new legislation is enacted. The original National Industrial 3 Recovery Act contained no provision for a labor board and the Harrison-Doughton bill does not deal with the subject. The present board and several special industrial boards were appointed by the President under general authority conferred in a joint resolution enacted on June 19, 1934. Besides being charged with the duty of enforcing the unfair labor practice provisions, the proposed new board is authorized to act as an arbiter in labor disputes. Administration Support The bill has had the support of high administration officials. Miss Frances Perkins, Secretary of Labor; Francis Biddle, Chairman of the National Labor Relations Board; Edwin S. Smith, Member of the Board; Lloyd K. Garrison, former Chairman; and Dr. W. M. Leiserson, Chairman of the Railroad Mediation Board, were among the witnesses appearing for it. Miss Perkins, who has testified before both the Senate Committee on Education and Labor and the House Committee on Labor, differed with other sponsors of the bill only with respect to the character of the proposed board. She favored a board within her own department instead of an independent board as provided by the bill. The members of the present board asserted that enforcement of collective bargaining provisions of the existing law had broken down. They advocated the far-reaching proposals of the pending bill. In apparent conflict with the position of those favoring the enactment of the Labor Relations bill as permanent legislation is the statement of Donald R. Richberg, Chairman of the National Industrial Recovery Board, in testimony before the Senate Finance Committee. While not referring specifically to any section of the present National Industrial Recovery Act, Mr. Richberg made the following general declaration: "The Act should be extended substantially in the present form for two years, so as to allow for a further development of administrative procedures and a clarification of the entire problem prior to the enactment of such permanent legislation as may then seem desirable." Constitutionality There is reason for grave doubt as to the constitutionality of any measure which extends Federal control over industry on such a broad basis as does the Labor Relations bill. It is conceded that production is not commerce as construed by 4 the Supreme Court of the United States. In about twenty cases in the lower Federal courts it has been held that provisions of the NIRA applying to local acts of production and employment are in direct violation of the Constitution. A decision of this character relating specifically to the collective bargaining provisions is that of United States District Judge John P. Nields in the case of the Weirton Steel Company. Judge Nields held that Section 7 (a) is unconstitutional and void when applied to companies not engaged in interstate commerce and that the company union, or employee representation plan of collective bargaining existing in the plants of the company in question, is legal under the law. Judge Nields said: "If defendant's manufacturing plants and manufacturing operations are to be regarded as instruments for the interstate movement of goods, it follows that practically all of the manufacturing industry of the United States would be brought within the control of the Federal government. Such result has received the unqualified condemnation of the Supreme Court." Judge Nields held that there is no analogy between an industrial plant and the situation involved in stockyards and grain exchange cases wherein regulatory laws were upheld on the ground that the businesses were a part of a "flow" of commerce. On the basis of the Nields decision the courts could not sustain the validity of the Labor Relations bill as applied to industry generally merely because, as asserted in the measure, a labor dispute "might burden or affect commerce or obstruct the free flow of commerce." Judge Nields' decision dismissing the Federal government's suit against the Weirton Steel Company was announced in Wilmington, Delaware, on February 27, 1935. No effort has been made by the government to obtain a speedy decision by the Supreme Court. The government also instituted a suit in another collective bargaining case which has been tried and awaits decision in the Federal District Court at Buffalo, New York. This is the case against the Houde Engineering Corporation. It is sought to require that company to bargain collectively with representatives selected by a majority of workers. Pending final rulings by the Supreme Court on issues involved in the Weirton and Houde cases the Congress should not write any collective bargaining provision into permanent law. Features of the pending Labor Relations bill, other than the collective bargaining sections, have also been attacked by competent legal authori-5 ties. It is contended that the procedure provided in the bill denies due process of law in the taking of evidence, that the inquisitorial authority is in violation of the constitutional guaranty against search and seizure and that powers vested in the proposed board constitute a denial of trial by jury. Injurious Effects The National Industrial Recovery Act was intended to promote business recovery. Its collective bargaining section has not had that effect. The Labor Relations bill would impede recovery to an even greater extent. Workers are entitled to every protection. On the other hand, it is unjust to the management of industry to give labor a club with which to force concessions which increase costs by such an amount as to hamper recovery. The actual effect of Section 7(a) of the NIRA has been to retard rather than to promote recovery. The present collective bargaining section has been responsible for much industrial strife, including most of the actual and threatened strikes in major industries during the past year. Instead of promoting good feeling between workers and their employers it has tended to occasion controversy and bitterness. It has arrayed class against class. Conflicts in the automobile, steel and textile industries might never have occurred except for the existence of this law. The United Mine Workers of America would not have been in a position to threaten a strike throughout the bituminous coal industry recently except for the power gained by an industry-wide contract under a code. The provisions of the Labor Relations bill would accentuate a feeling of hostility between capital and labor. It makes no pretense of so adjusting labor relations as to avoid strikes. Section 15 provides that "nothing in this Act shall be construed so as to interfere with or impede or diminish in any way the right to strike." Company Unions The Labor Relations bill is aimed at employee representation plans, or company unions. While it does not prohibit the existence of unions of this kind, it imposes restrictions which are designed to make it difficult, if not impossible, for them to continue. A mass of evidence was presented before the Senate Committee on Education and Labor to show that under employee representation plans in many of the large industries, good feeling between the workers and the company management has been promoted and the best interests of the workers have been furthered. It was shown that while companies have contributed financial support to many of these plans, they have not dominated them. Under them it has been possible to adjust genuine grievances of workers and to provide for improved working conditions. Recent elections participated in by employees in the automobile industry proved conclusively their satisfaction with the operation of employee representation plans. Only seven per cent of those voting favored affiliation with the American Federation of Labor. Under the present Section 7(a) of the NIRA, it is provided that every code of fair competition, agreement and license shall contain the following conditions: "(1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; (2) that no employee and no one seeking employment shall be required as a condition of employment to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing; and (3) that employers shall comply with the maximum hours of labor, minimum rates of pay, and other conditions of employment, approved or prescribed by the President." The Harrison-Doughton bill for a two-year extension of the National Industrial Recovery Act contains a Section 7 (a) which is almost identical with that of the present law as above quoted. The pending Labor Relations bill, on the other hand, contains permanent collective bargaining provisions which apply to industries that have no codes. Such legal basis as may be provided by contractual obligations under the codes is thus lacking in the new measure. Section 7 of the Labor Relations bill provides that "employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in concerted activities, for the purpose of collective bargaining or other mutual aid or protection." Section 8 specifies four unfair labor practices on the part of employers. These include (1) in- 6 7 terference with, restraint, or coercion of employees in the exercise of rights guaranteed in Section 7; (2) domination or interference with the formation or administration of any labor organization, or contribution of financial or other support to it; (3) discrimination in employment in such a way as to encourage or discourage membership in any labor organization; and (4) discharge or discrimination against any employee who has filed charges or given testimony under the procedure provided by the act. The particular provision which hits at company unions is the second which makes it an unfair labor practice for an employer "to dominate or interfere with the formation or administration of any labor organization or contribute financial or other support to it." The effect undoubtedly would be to destroy many employee representation plans which have been set up with the aid and financial support of companies even though in no sense dominated by them. Experience under these plans shows that there is no justification for arbitrary restrictions of the kind proposed. A Labor Monopoly The tendency under the bill would be to give unions affiliated with the American Federation of Labor a monopoly in collective bargaining, although 77 per cent of all workers are not affiliated with any organization. Under the present law the American Federation of Labor has enjoyed a large growth in membership. It is obvious that its rolls would be further expanded under the conditions created by the Labor Relations bill. The imposition of new restrictions against company unions would in most industries make it easy for a national labor organization with its superior financial and other resources to drive out an independent union. The motives of most of the recognized leaders of the American Federation of Labor are above reproach. It has proved impossible, however, for them to control the racketeers who promote unionization for personal profit and power. Within the past year the national officers of the American Federation of Labor stood by helpless while jurisdictional disputes among different unions tied up for weeks at a time the construction of government buildings across the street from the headquarters of the NRA. The newspapers record almost daily instances of abuses of power by labor unions. 8 The Closed Shop The Labor Relations bill would advance organized labor a long ways toward achievement of a closed shop throughout industry. A stipulation in connection with the unfair labor practice provisions would facilitate this movement. After prohibiting discrimination "in regard to hire or tenure of employment or any term or condition of employment to encourage or discourage membership in any labor organization," the bill provides that nothing in the act or in the National Industrial Recovery Act as amended from time to time, or in any code or agreement, shall preclude an employer "from making an agreement with a labor organization (not established, maintained, or assisted by any action defined in this act as an unfair labor practice) to require as a condition of employment membership therein, if such labor organization is the representative of the majority of the employees in the appropriate collective bargaining unit covered by such agreement when made." This proviso permits a labor organization claiming representation of a majority of the employees "in the appropriate collective bargaining unit" to negotiate a closed shop agreement. Such an agreement manifestly is intended to apply not merely to a single company but to an entire industry which may be brought within the terms of a single wage agreement. The proviso is so phrased as to eliminate a closed shop agreement with a company union. Enactment of the Labor Relations bill would be followed by a drive on the part of organized labor for the closed shop. Majority Rule The Labor Relations bill would write into law the controversial majority rule. Section 9 of the bill provides that "representatives designated or selected for the purposes of collective bargaining by the majority of the employees in a unit appropriate for such purposes, shall be the exclusive representatives of all the employees in such unit for the purposes of collective bargaining in respect to rates of pay, wages, hours of employment, or other conditions of employment." The only exception is that any individual employee or group of employees shall have the right at any time to present grievances to their employer through representatives of their own choosing. The majority rule is designed to strengthen the grip of organized labor over industry. Minority groups would not be permitted to partici-9 pate in collective bargaining. The liberties guaranteed to individuals under the Constitution are destroyed by provisions of this bill. Coupled with the closed shop provision, the above quoted section means that when 51 per cent of the workers in a collective bargaining unit, the scope of which may be determined by the National Labor Relations Board, insist upon and obtain a contract requiring membership in a union as a condition of employment, the other 49 per cent will be discharged unless they join such union. The majority rule provision is one of the new features not contained in the present law. While the existing National Labor Relations Board has applied the majority rule, the automobile industry agreement, sponsored by the President, provides for representation of minority groups. Even if the Congress proposes to go so far as to enact the majority rule into law, it should certainly await a decision by the Supreme Court in the Houde case as to whether the provision is constitutional. Responsibility of Labor While the Labor Relations bill places restraints upon employers, it fails to restrict the activities of employees. Coercive tactics have been practiced by labor groups against employers with resultant serious injury to industry. If the Congress persists in enacting this legislation, labor should be made responsible for its acts. The British law bestowing privileges upon labor also imposes responsibility. An employer in Great Britain has much more adequate protection against improper labor practices than is true in this country. The unfair labor practice provisions of the bill are markedly one-sided. There is no prohibition against coercion and intimidation of employees by professional labor organizers. Unusual Procedure The National Labor Relations Board under the terms of the bill is given very broad and arbitrary powers. An unusual procedure is authorized. In effect, the Board may act as complainant, prosecutor and judge. It may mediate, conciliate, make inquiry on complaint from any source and conduct trials without regard to rules of evidence. The bill authorizes "fishing expeditions" into the affairs of industries, such as have been frowned upon by the courts. The inquisitorial powers of the Board are very great. It is pro-10 vided that the Board or ks agent "shall at all reasonable times have access to, for the purpose of examination, and the right to copy any evidence of any person being investigated or proceeded against that relates to any matter under investigation or in question." This is despite the guaranty against search and seizure in the Constitution. Authority of States The centralization of authority over labor disputes in the hands of the Federal government infringes upon the rights of the states. In many of the states there are mediation departments and boards which properly should assist in the settlement of local industrial difficulties. The effect of setting up a permanent board at Washington would be to weaken the influence of the state mediation agencies. In the atmosphere of the national capital, adjustment of many disputes would become more difficult. A "Bad Bill" Walter Lippmann, widely known publicist who has been sympathetic with many of the objectives of the present administration, summarizes the Labor Relations bill as follows: "It i8 a bad bill. It extends the scope of the government's responsibility beyond the government's power to discharge that responsibility. It sets up undefined rights and proposes to enforce them by the cumbersome process of litigation and prosecution. It distorts the device of elections by the untrue assumption that elections will show a clear majority. The administration and Congress will settle nothing by passing this bill. On the contrary they will multiply many times the troubles they have had with Section 7(a), the lawsuits, the noncompliance, the disappointment of labor." The collective bargaining provision of the present law should not be broadened in temporary legislation. If the National Industrial Recovery Act is extended for a two-year period, there is excuse for carrying forward Section 7 (a) for that length of time. The National Labor Relations Board also may properly be extended for two years. The public accepted the NIRA under emergency conditions despite objectionable features. In the Labor Relations bill there is an attempt to write some of its provisions into permanent law. Any form of permanent legislation dealing with labor relations as well as with other phases of industrial recovery should await a clarification of constitutional points by the Supreme Court of the United States. 11