ASSOCIATED GENERAL CONTRACTORS OF AMERICA LABOR AND EMPLOYMENT LAW COUNCIL
28TH ANNUAL CONSTRUCTION LABOR LAW SYMPOSIUM
WASHINGTON, D.C. APRIL 19-20, 2012
WHAT IS “FEATHERBEDDING”: UNDER THE NLRA AND UNDER YOUR COLLECTIVE BARGAINING AGREEMENT
Presented By: WILLIAM BEVAN III REED SMITH LLP 225 Fifth Avenue Pittsburgh, Pennsylvania 15222 (412) 288-3184 Fax: (412) 288-3063 Website: www.reedsmith.com Email: [email protected]
WHAT IS “FEATHERBEDDING”: UNDER THE NLRA AND UNDER YOUR COLLECTIVE BARGAINING AGREEMENT
William Bevan III*
What is “featherbedding.” The popular notion is that featherbedding represents a situation where an employer pays employees for work it does not want or need. Most dictionary definitions confirm this, even specialized ones.1 Nevertheless, as this paper will show, the legal definition under the National Labor Relations Act (“NLRA” or “Act”) is narrower, and no pun intended, more exacting than commonly held perceptions of what constitutes featherbedding. Featherbedding as regulated under Section 8(b)(6)2 of the Act is limited to very specific situations that comport with the language of the statute but not with what the public perceives should be condemned as featherbedding. It is, perhaps, only in the arbitration world where more common notions of what constitutes featherbedding are likely to prevail. This paper will explore the legislative history of
* Partner, Reed Smith LLP, Pittsburgh, Pennsylvania. The views expressed here are mine alone and do not represent the views of Reed Smith LLP or the Associated General Contractors of America.
1 Featherbedding – (The action of) making comfortable by favourable, esp. economic or financial, treatment; the state of being so treated; spec. the employment of superfluous staff. [Oxford English Dictionary, http://www.oed.com/viewdictionaryentry/Entry/68814]. Featherbedding – Practice on the part of some unions to make work for their members through the limitation of production, the amount of work to be performed, or other make-work arrangements. Many of these practices have come about because workers have been displaced by mechanization and the union has sought some method of retaining the employees, even though there may be no work for them to perform, or their services may not be required. [Roberts’ Dictionary of Industrial Relations (Rev. 1971)]. Featherbedding (1921) – A union practice designed to increase employment and guarantee job security by requiring employers to hire or retain more employees than are needed. The practice stems from employees’ desire for job security in the face of technological improvement. Featherbedding is restricted by federal law but is an unfair labor practice only if, for example, a union exacts pay from an employer for services not performed or not to be performed. [Black’s Law Dictionary (9th Ed. 2044)].
2 29 U.S.C. § 158(b)(6). Section 8(b)(6) makes it an unfair labor practice for a labor organization and its agents “to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other thing of value, in the nature of an exaction, for services which are not performed or not to be performed . . .”
attempts to deal with featherbedding by labor organizations outside the rail and airline industries and the limited development of the law under Section 8(b)(6) of the Act. What follows thereafter is a discussion of how arbitrators have treated the concept of featherbedding in various cases arising under collective bargaining agreements.
I. LEGISLATIVE HISTORY OF SECTION 8(b)(6) OF THE ACT
A. Pre-Taft-Hartley Congressional Acts
Much of the impetus for the Congressional drive to prohibit featherbedding by labor organizations came, at least in part, by the activities of one union – the American Federation of Musicians and, in particular, its president, James Caesar Petrillo. Indeed, legislatively, the practice of featherbedding was initially prohibited in the communications industry by the passage of the Lea Act in 1946.3 The Lea Act, a criminal statute,4 was an amendment to the Communications Act of 1934, 47 U.S.C. §§ 151 et seq. (1976). It provided, in pertinent part, that
3 47 U.S.C. § 506(a)(1).
4 Another criminal statute, also cited as a pre-Taft-Hartley attempt to regulate the activities of some unions, notably the Teamsters, in interstate commerce, is the Copeland (Federal Anti- Racketeering) Act, 18 U.S.C. § 420(a) – (e), which provided that robbery or extortion accompanied by force or violence, or threats of the same, constituted a felony where it affected interstate commerce. While the statute exempted various union activities, it left open the question of whether union conduct to compel an employer to hire a union’s members was covered. That question went to the Supreme Court in United States v. Local 807, 315 U.S. 521 (1942) which considered a union demand, backed by force and violence, on various trucking companies, who acquiesced, for the payment of a union truck driver’s daily wage for each truck that entered the city of New York that was not driven by a Local 807 driver. The Court held that the demand was lawful, as long as the drivers were offering actual services. The Court upheld the payment by a bona fide employer to a bona fide employee exception in the Act on the grounds that the union and its members, even as competitors, sought at all times to offer the services of the union’s members, even though they expected payment from the employer if it or the non-Local 807 drivers rejected the offer by Local 807 members to do or help with the driving or unloading of trucks destined for New York City. 315 U.S. at 534. As a result of the Court’s decision in Local 807, Congress passed the Hobbs Act, 18 U.S.C. § 1951, et seq., as an amendment to the Copeland Act, which eliminated the so-called bona fide employee exemption. In U.S. v. Enmons 410 U.S. 396 (1973), the Court dealt with the question of whether the Hobbs Act “proscribes violence committed during a lawful strike for the purpose of inducing an employer’s agreement to legislate collective Continued on following page
- 2 - (a) It shall be unlawful, by the use of express or implied threat of the use of force, violence, intimidation, or duress, or by the use or express or implied threat of the use of other means, to coerce, compel, or constrain or attempt to coerce, compel or constrain a licensee – (1) to employ or agree to employ, in connection with the conduct of the broadcasting business of such license, any person or persons in excess of the number of employees needed by such licensee to perform actual services . . . (emphasis added).5
Despite concerns that the Lea Act might require the imprisonment of employees for engaging in a strike, the Lea Act was found constitutional, as a criminal statute, by the
Supreme Court in United States v. Petrillo, 332 U.S. 1 (1947).6 Ironically, the Court’s decision was handed down the same day that Congress passed the Taft-Hartley Act amending the Act to add a number of specific unfair labor practices by unions, including Section 8(b)(6). 7
Continued from previous page bargaining demands.” 410 U.S. at 399. The Court held, in passing, that the Hobbs Act reached situations where union officials “threatened force or violence against an employer in order to obtain personal payoffs,” and where “unions used proscribed means to exact ‘wage’ payments from employers in return for imposed, unwanted, superfluous, and fictitious services of [employees].” 410 U.S. at 400. The Court held that the Hobbs Act did not apply to the use of force or violence to obtain “legitimate labor ends.” Id. at 401.
5 47 U.S.C. § 506 (1946). The Lea Act was commonly referred to as the “Anti-Petrillo Act.” See Swartz, The American Federation of Musicians: An Unearned Encore for Featherbedding, 47 Wayne L. Rev. 1339, 1340 (2002); Aaron, Restraints on Featherbedding, 5 Stan. L. Rev. 682, 697 (1953). The Act was repealed in 1980. Act of December 8, 1980, PL 96-507 S1.94 Stat. 2747.
6 The criminal information brought against Petrillo charging him with a violation of the Act included, inter alia, a count alleging violation of the Act by “placing and causing to place and causing to be placed persons as a picket in front of the place of business of said license.” 332 U.S. at 4.
7 The Court’s decision is dated June 23, 1947. As discussed below, the irony of this coincidence is important when the legislative history of the Taft-Hartley Amendment is considered. It is important because it ultimately explains why the prohibition in the Lea Act focused on the specific activities the union and its president were broad, and the prohibition on featherbedding added by the Taft-Hartley amendments, although all encompassing in its coverage of all unions subject to the NLRA, was in fact narrow.
- 3 - B. Amendment of the National Labor Relations Act
The legislative history of Section 8(b)(6) begins with two entirely different approaches to the treatment of featherbedding. The House Bill, H.R. 3020,8 which passed the House of Representatives on April 17, 1947,9 was clear in condemning featherbedding broadly. In the House bill, new Section 17 was to be added to the definitional section of the Act found in Section 2, defining featherbedding broadly in the manner of the Lea Act:
“(17) The terms ‘featherbedding practice’ means a practice which has as its purpose or effect requiring an employer– (A) to employ or agree to employ any person or persons in excess of the number of employees reasonably required by such employer to perform actual services; or (B) to pay or give or agree to pay or give any money or other thing of value in lieu of employing, or on account of failure to employ, any person or persons, in connection with the conduct of the business of an employer, in excess of the number of employees reasonably required by such employer to perform actual services; or
(C) to pay or agree to pay more than once for services performed; or (D) to pay or give or agree to pay or give any money or other thing of value for services, in connection with the conduct of a business, which are not to be performed; or (E) to pay or agree to pay any tax or exaction for the privilege of, or on account of, producing, preparing, manufacturing, selling, buying, renting, operating, using, or maintaining any article, machine, equipment, or materials; or to accede to or impose any restriction upon the production, preparation, manufacture, sale, purchase, rental, operation, use, or maintenance of the same, if such restriction is for the purpose of preventing or limiting the use of such article, machine, equipment, or materials.
8 H.R. 3020, 1st Sess. (1947).
9 See Legislative History of Labor Management Relations Act, at 863.
- 4 - The House bill also provided for a provision, Section 12, that made certain concerted activities unlawful. It provided as follows:
Sec. 12. (a) The following activities, when affecting commerce, shall be unlawful concerted activities: * * * (B) any strike or other concerted interference with an employer’s operations, an object of which is to compel an employer to accede to featherbedding practices; 10
The Senate Bill, 5.1126,11 contained no language resembling present day
Section 8(b)(6). Indeed, it had no specific reference to “featherbedding.” When the two versions of the bill reached the conference committee, the House version strangely did not survive. As previously indicated, the House bill would have clearly encompassed a broad assault on featherbedding in a variety of forms, but when it reached the conference stage, the Senate conferees opted for the present version of Section 8(b)(6). In the debate on the conference bill, Senate conferees expressed concerns about the House version, and often quoted are the statements of Senator Taft in the Congressional Record:
There is one further provision which may possibly be of interest, which was not in the Senate bill. The House had rather elaborate provisions prohibiting so-called feather-bedding practices and making them unlawful labor practices. The Senate conferees, while not approving of feather- bedding practices, felt that it was impracticable to give to a board or a court the power to say that so many men are all right, and so many men are too many. It would require a practical application of the law by the courts in hundreds of different industries, and a determination of facts which it seemed to me would be almost impossible. So we declined to adopt the provisions which are now in the Petrillo Act. After all, that statute applies to only one industry. Those provisions are now the subject of court procedure. Their constitutionality has been questioned. We thought that probably we had better wait and see what happened, in any event, even though we are in favor of prohibiting all feather-bedding practices. However, we did accept one provision which makes it an
10 Section 12 of the House bill also removed the Norris-LaGuardia Act as a bar to seeking relief in federal court for conduct which violated the section’s prohibition on featherbedding as defined in the House bill.
11 S.1126, 80 Cong., 1st Sess. (1947).
- 5 - unlawful-labor practice for a union to accept money for people who do not work. That seemed to be a fairly clear case, easy to determine, and we accepted that additional unfair labor practice on the part of unions, which was not in the Senate bill.12
The Senate’s views, as set forth in Senator Taft’s remarks on the floor of the Senate quoted above, as well as his summary of differences between the House and Senate bills, reported in the Congressional Record, reflect its concerns about the constitutionality of the Lea Act’s far reaching prohibition on featherbedding in the broadcasting industry and the belief that it would be better not to pass broader legislation until the outcome of the constitutional challenge was known. The other concern was a fundamental distrust in the ability of the NLRB or the courts to determine what was a “reasonably required number of employees in an employer’s operation or industry.”13 Finally, Senator Taft stated that Section 8(b)(6) as proposed, would not prohibit such union demands as call-in pay and
12 93 Cong. Record 6598 (1947); see Legislative History of the Labor Management Relations Act, at 1535 (1948).
13 93 Cong. Record 6601. Senator Taft stated:
Section 8 (b) (6) of the conference agreement covers a matter with which the House bill dealt extensively under the topic of featherbedding practices. There was no corresponding provision in the Senate amendment. The provisions in the House bill made unlawful and enjoinable any strike to compel an employer to accede to featherbedding practices. Among the activities defined as a featherbedding practice by the House bill were: (a) Agreeing to employ persons in excess of the number reasonably required, (b) paying money in lieu of employing such an excess number of persons, (c) paying more than once for services performed, (d) paying money for services not performed, and (e) paying a tax for the privilege of using certain articles or operating certain machines or agreeing to restrictions upon their use. While the Senate conferees were in sympathy with the objectives of this portion of the House bill, it seemed to them that it was almost impossible for courts to determine the exact number of men required in hundreds of industries and all kinds of functions. The provisions in the Lea Act from which the House language was taken are now awaiting determination by the Supreme Court, partly because of the problem arising from the term “in excess of the number of employees reasonably required.” Therefore, the conferees were of the opinion that general legislation on the subject of featherbedding was not warranted at least until the joint study committee proposed by this bill could give full consideration to the matter. Since the matter of exacting money for services not to be performed borders definitely on extortion, the conferees agreed to the insertion of a paragraph (sec. 8 (b) (6)) which makes it an unfair labor practice to cause or attempt to cause employers to pay money under such circumstances.
- 6 - paid rest periods, such items being a part of the normal collective bargaining relationship, and given for appropriate consideration.14
II. THE DEVELOPMENT OF THE LAW UNDER SECTION 8(B)(6)
After Section 8(b)(6) became law, there were only a limited number of Board decisions construing it,15 but two of those cases ultimately reached the Supreme Court.16 Those two cases would forever shape the legal landscape of what constitutes featherbedding under the NLRA, and would forever emasculate whatever Congressional intent had existed for a broader ban. Indeed, so narrow were the Court’s holdings in the two previously cited cases, that no case would reach the Board until almost 20 years later.
A. Of Bogus Type and Other Forms of Make Work: American Newspaper Publishers Association v. NLRB, 345 U.S. 100 (1953)
American Newspaper Publishers Association was a New York corporation which included the publishers of more than 800 newspapers. At the time that this case reached the Supreme Court, the Association represented over 90 percent of the entire daily and Sunday circulation of newspapers in the United States. 345 U.S. at 101. In November of 1947, the Association had filed charges with the National Labor Relations Board (“Board” or “NLRB”) alleging that the International Typographical Union (“ITU”) had engaged in various unfair labor practices including a violation of Section 8(b)(6) of the
14 Id. at 6037, 7001-7002.
15 American Federation of Musicians (Gamble Enterprises, Inc.), 92 NLRB 1528 (1951), rev’d sub. nom. Gamble Enterprises, Inc. v. NLRB, 196 F.2d 61 (6th Cir. 1952); International Brotherhood of Teamsters (Henry V. Rabouin), 87 NLRB 972 (1949), aff’d sub nom., Rabouin v. NLRB, 195 F.2d 906 (2nd Cir. 1952); Kalleher & Mee, Inc., 87 NLRB 410 (1949); International Typographical Union (American Newspaper Publishers Ass’n), 86 NLRB 951, aff’d sub nom., American Newspaper Publishers Ass’n. v. NLRB, 193 F.2d 782 (7th Cir. 1951).
16 American Newspaper Publishers Association v. NLRB, 345 U.S. 100 (1953); NLRB v. Gamble Enterprises, Inc., 345 U.S. 117 (1953).
- 7 - Act. Id. The Board’s Regional Director authorized issuance of a complaint on the 8(b)(6) charge. Id. at 102. Both the Board’s trial examiner and the Board dismissed the Association’s charges on the 8(b)(6) claim. Id. The Association then filed an appeal with the Court of Appeals for the Seventh Circuit, and that Court also upheld the Board’s dismissal of the 8(b)(6) allegations of the complaint. Id. Because of a conflict in the Circuit Court of Appeals, the Supreme Court granted certiorari along with the Board’s decision in Gamble Enterprises, supra, where the Sixth Circuit had expressed a contrary view about the proper interpretation of Section 8(a)(6). Id.
The Court began its decision by tracing the origins of typesetting in newspaper composing rooms in the United States. In the introduction of the linotype machine, the need process was changed significantly such that the procedure would bypass all compositors except those who made up the original form. The Court noted that as a result of the loss of work, the ITU obtained an agreement from the newspaper publishers to permit their members working at compositors to set up duplicate forms for all local advertisements “in the same manner as though the mat had not been used.” 345 U.S. at 103. Those working in the composing room at this task were paid their regular rate of pay and the performance of this make work became known in the industry as setting “bogus.” Id. The Court found specifically that setting bogus was a wasteful procedure but had become part and parcel of the collectively bargained “wage structure and work schedule of newspaper printers.” Id. The Court also found that by fitting the make work into slack periods, the practice of setting bogus type interfered only slightly with actual
“live work.” Id. at 103-104.
The court further noted that by 1947, the ITU had incorporated into its general laws a requirement that all collective bargaining agreements signed by the local unions must allow for the setting of bogus type. Id. at 104.
- 8 - The Court phrased the issue to be decided as whether a labor organization “engages in an unfair labor practice, within the meaning of Section 8(b)(6) of the National Labor Relations Act, as amended . . . when it insists that newspaper publishers pay printers for reproducing advertising matter for which the publishers ordinarily have no use. 345 U.S. at 101. The Court pointed out that in resolving this issue did not involve “what policy should be adopted by the Nation toward the continuance of this and other forms of featherbedding. The issue here is solely one of statutory interpretation: Has Congress made setting “bogus” an unfair labor practice?” Id. at 104-105.
In answering the question presented to it, the Court essentially adopted the decision of the Seventh Circuit below that found that the practice of setting bogus called for payment only for work which was actually done by employees of the publishers during the course of their employment, as distinguished from payment for work which was neither performed or was not to be performed. Id. at 105. The Court stated that, “However desirable the elimination of all industrial featherbedding practices may have appeared to Congress, the legislative history of the Taft-Hartley Act demonstrates that when the legislation was put in final form, Congress decided to limit the practice but little by law.” Id. at 106.
After reviewing the legislative history and comparing that with Congress’ enactment of the previous Lea Act, the Court concluded that
The substitution of the present § 8(b)(6) for that definition compels the conclusion that § 8(b)(6) means what the court below has said it means. The act now limits its condemnation to instances where a labor organization or its agents exact pay from an employer in return for services not performed or not to be performed. Thus, where work is done by an employee, with the employer’s consent, a labor organization’s demand that the employee be compensated for his time spent in doing the disputed work does not become an unfair labor practice. The transaction simply does not fall within the kind of featherbedding defined in the statute. In the absence of proof to the contrary, the employee’s compensation reflects his entire relationship with his employer. * * *
- 9 - Section 8(b)(6) leaves to collective bargaining the determination of what, if any, work including bona fide “make work,” shall be included as compensable services and what rate of compensation shall be paid for it. 345 U.S. at 110-111.17
Justice Douglas, dissenting separately, was of the view that the reproduction of advertising matter through the setting of bogus type which was not meant to be read and then thrown away was not a “service” performed for the employer. As such, he concluded that the setting of bogus made “no contribution whatsoever to the enterprise.” 345 U.S. at 112. Indeed, in Justice Douglas’s view, the setting of bogus type neither added “directly or indirectly to the publication of the newspaper or its contents.” Id. Although the employer had agreed to pay for the setting of the bogus, it was “done under compulsion.” Id.
Justice Clark, joined by Chief Justice Vinson, dissented on what may be best characterized as policy grounds and Congressional intent. As Justice Clark described the Court’s majority decision: “The Court thus holds that an ‘anti-featherbedding’ statute designed to hit wasteful labor practices in fact sanctions additional wasteful labor practices in [a] futile use of labor, lead, machines, proofreading, [and] ‘hell-boxing’.”18 345 U.S. at 113. Justice Clark noted that the terms of the statute were broad enough to cover the practice at issue. Thus, “cause or attempt to cause” could refer just as equally to the collective bargaining process. 345 U.S. at 114. Similarly, the words “in the nature of an exaction” could imply outright extortion, but also could be meant to describe payment for services not performed or not to be performed. Id. at 114. In short, like
Justice Douglas, Justice Clark wrote that equating “bogus” with “work” simply takes the
17 Three of the Court’s members dissented.
18 When the setting of bogus type was finished, proofread, and corrected, it was immediately discarded and never used. 345 U.S. at 113. Indeed, the [bogus] type “was consigned as waste to a ‘hell box’ which feeds the ‘melting pot,’ which then, in turn, oozes fresh lead then molded into ‘pigs,’ and the process repeats itself.” Id.
- 10 - case out of 8(b)(6), and renders it superfluous. Id. He and the Chief Justice would have read the statutory test for “services” as something other than “a hollow phrase.” Id. at 115. Indeed, “[a]n interpretation of ‘services’ in § 8(b)(6) to exclude contrived and patently useless job operations not to the employer’s benefit could effectuate the legislative purpose. . . . [Citations omitted.] And the Labor Board should not so modestly disclaim its oft-recognized expertise which assumes full qualifications for administering this task.” Id.
B. Of Unemployed Musicians and Unwanted Music NLRB v. Gamble Enterprises, Inc., 345 U.S. 117 (1953)
In NLRB v. Gamble Enterprises, Inc., 345 U.S. 117 (1953), the Court phrased the question presented as “Whether a labor organization engages in an unfair labor practice, within the meaning of § 8(b)(6) of the National Labor Relations Act, as amended by the Labor Management Relations Act, 1947, when it insists that the management of one of an interstate chain of theaters shall employ a local orchestra to play in connection with certain programs, although that management does not need or want to employ that orchestra.” 345 U.S. at 118. The case arose at the Palace Theater in Akron, Ohio, which was part of a chain of theaters managed by Gamble Enterprises, Inc. (“Gamble”). Id. at 119. Until about 1940, the theater had employed a local orchestra of nine union- represented musicians to play for the various acts that were booked at the theater. When traveling bands were booked to play on stage, the local orchestra hired by the theater played from the pit for vaudeville acts and at times would augment the performance of the traveling band. 345 U.S. at 119-120. In 1940, the Palace converted to a motion picture theater with only limited appearances for traveling bands and orchestras; indeed, between 1940 and 1947, the theater was used by local musicians to hold rehearsals, and those musicians were available as required. Id. at 120. Indeed, as the court noted, when a traveling band appeared, the theater was required to pay the members of the local
- 11 - orchestra a “sum equal to the minimum union wages for a similar engagement but [the local orchestra] played no music.” 345 U.S. at 120.
Initially, after the passage of the Taft-Hartley Act amendments, the local orchestra in Akron made no demands to play with various performances by traveling bands. 345 U.S. at 120. However, when negotiations opened in October of 1947, the union made a demand that the pit orchestra be used to play overtures, intermissions, and chasers.19 Id. The union insisted on this demand as a condition for allowing traveling bands to appear and perform at the theater. Id. Gamble declined the offer and, as a result, a traveling band that was booked to perform in November of 1947 cancelled its engagement after learning that the local union had refused to consent to the band’s appearance. Id. The union made several subsequent proposals, but none were accepted by Gamble. Id. at 120-121.
With no agreement having been reached, in 1949 Gamble filed charges with the Board alleging violation of Section 8(b)(6). A complaint was issued and a trial was held before the Board’s Trial Examiner. The Board’s Trial Examiner concluded that the union’s conduct was a “standby engagement” but was not convinced that the demand amounted to an attempt to cause a payment which was in the nature of an exaction. Id. at 117. The trial examiner therefore had recommended the dismissal of the complaint.
92 NLRB 1528, 1549-1551. The Board affirmed the trial examiner’s decision but on different grounds.
The Board held that “In our opinion, Section 8(b)(6) was not intended to reach cases where a labor organization seeks actual employment for its members, even in situations where the employer does not want, does not need, and is not willing to accept
19 Chasers are music played when patrons of the theater are leaving the performance.
- 12 - such services. Whether it is desirable that such objective should be made, the subject of an unfair labor practice is a matter for further congressional action, but we believe that such objective is not proscribed by the limited provisions of Section 8(b)(6).” 92 NLRB at 1533-1534. The Court of Appeals for the Sixth Circuit agreed with the Board that the union sought actual employment for its members, but held that the union was, nevertheless, engaging in featherbedding as proscribed by Section 8(b)(6).
In the Court’s opinion, it accepted the Board’s finding that the union was seeking actual employment for its members and was not therefore seeking payment for standing by. 345 U.S. at 123. In this regard, the Court noted that prior to the passage of 8(b)(6), the union had received standby payments in connection with so-called traveling band appearances, but since the passage of 8(b)(6) the union sought “no such payments and [had] received none.” 345 U.S. at 123. It further noted that the union had requested and “consistently negotiated for actual employment in connection with” traveling bands and other acts appearing at the theatre. Id. The Court’s holding is set forth as follows:
Since we and the Board treat the union’s proposals as in good faith contemplating the performance of actual services, we agree that the union has not, on this record engaged in a practice proscribed by § 8(b)(6). It has remained for respondent to accept or reject the union’s offers on their merits in light of all material circumstances. We do not find it necessary to determine also whether such offers were “in the nature of an exaction. We are not dealing here with offers of mere ‘token’ or nominal services. The proposals before us were appropriately treated by the Board as offers in good faith of substantial performances by competent musicians. There is no reason to think that sham can be substituted for substance under Section 8(b)(6) any more than under any other statute. Payments for “standing-by,” or for the substantial equivalent of “standing-by,” are not payments for services performed, but when an employer receives a bona fide offer of competent performance of relevant services, it remains for the employer, through free and fair negotiation, to determine whether such offer shall be accepted and what compensation shall be paid for the work done. 345 U.S. at 123-24.
Justice Jackson dissented in a separate opinion and Justice Clark and the Chief Justice, who had dissented in American Newspaper Publishers, also dissented in Gamble.
- 13 - Justice Jackson distinguished the Court’s holding in American Newspapers from Gamble on the grounds that in the former, the ITU was adhering to an “old custom with mutual consent established for years maintained to which other terms of employment have long since been adjusted.” 345 U.S. 125. In Gamble, he believed that the musicians union had simply substituted for the practice specifically made unlawful by the statute “a new device for achieving the same result.” Id. In Justice Jackson’s view, the payments demanded in the case could not be anything but an exaction. While Justice Jackson was willing to accept the result in American Newspaper Publishers, he believed the facts in
Gamble compelled the conclusion that musicians were seeking an exaction. Thus, he wrote,
That the payments involved in this case constitute a union “exaction” within the statute would seem hard to deny, whatever may be thought of the printers’ case. As the Court says, the American Federation of Musicians has established a “nationwide control of professional talent.” No artist or organization can perform without its approval. The respondent is in the entertainment business but can get no talent to exhibit unless it makes these payments. The “service” tendered for the payments is not wanted or useful. What the Court speaks of as “free and fair negotiation, to determine whether such offer shall be accepted” is actually only freedom to pay or go out of business with all its attendant losses. If that does not amount to an exaction, language has lost all integrity of meaning. But the Court holds that so long as some exertion is performed or offered by the employees, no matter how useless or unwanted, it can never be said that there is an exaction “for services which are not performed or not to be performed.” This language undoubtedly presents difficulties of interpretation, but I am not persuaded that it is so meaningless and empty in practice as the Court would make it. Congress surely did not enact a prohibition whose practical application would be restricted to those without sufficient imagination to invent some “work.” Before this Act, the union was compelling the theatre to pay for no work. When this was forbidden, it sought to accomplish the same result by compelling it to pay for useless and unwanted work. 345 U.S. at 125-126.
In the dissenting opinion filed by Justice Clark and the Chief Justice, they found no difference between the two cases and that the work offered by the musicians was no
- 14 - less bogus than the setting of bogus type offered by the ITU in the earlier case. Id. at 127. Indeed, both schemes were, in their view, “boondagles” which the employer did not want or need, and would not accept. Id. In short, custom and tradition may not “deprive employers and employees of [their] statutory rights.” Id.
What was derived from the two Supreme Court decisions was that make-work, whether needed or not, was a legitimate demand by a union for the purpose of protecting job security and the rate at which it was compensated was a legitimate subject of bargaining. Moreover, as long as a union is offering to perform work and its members are competent to perform the work in question and the service is relevant to the employer’s business, the union’s demand does not involve featherbedding under 8(b)(6), even though the employer has absolutely no use for the union’s services.
III. THE NLRB ATTEMPTS TO RESURRECT SECTION 8(b)(6)
For roughly 20 years after the Supreme Court’s decisions in American Newspaper and Gamble essentially emasculated Section 8(b)(6), there were no reportable decisions at the Board level. However, in 1973, the Board issued its first decision under 8(b)(6) finding a violation of the statute in Metallic Latherers Union of N.Y. (Special Sections, Inc.), 207 NLRB 631 (1973). In the cited case, the employer, Special Sections, was primarily a distributor, but also manufactured furring channels. The employees performing the manufacturing work were in a separate unit represented by a local union of the Teamsters. The Latherers Union (“Latherers”), a skilled trade, demanded that
Special Sections hire a latherer to perform manufacturing work. The employer advised the Latherers that it had no need for the work of a latherer. 207 NLRB at 632-633. The Latherers’ business agent threatened that if Special Sections did not accept the union’s demand, he would instruct stewards on other jobs not to accept delivery of or handle any material from Special Sections. Id. at 633. Ultimately, Special Sections succumbed to
- 15 - the union’s secondary pressure on other contractors20 and hired a member of the Latherers. The Latherer performed no lathering work. Id.
During his employment, the latherer performed several assignments, some of which he viewed as beneath his ability.21 A unanimous Board panel (Chairman Miller, and members Kennedy and Penello) adopted the finding of its Administrative Law Judge that the employer did not have “even a prospective need for the [specialized] services of a latherer.” 207 NLRB at 636. The Board also adopted the ALJ’s finding that the
Latherers’ demand that the employer hire a latherer was not a “bona fide” offer of competent performance of a relevant service as required under Gamble. Thus the ALJ wrote:
There subsequently arose the rather ludicrous situation of where this high- priced employee was assigned to the menial task of addressing envelopes, a job which he finally refused to further perform on the understandable ground that it was “demeaning.” Furthermore, he later refused an assignment to repaint furring channels at a jobsite; and although he in fact did engage in some delivery work for the Company, the record reflects that this only took about 50 percent of his time, the balance of his 8-hour day being spent idly standing around. In short, I think it clear that Respondent’s offer to have Duffy provide the aforementioned miscellaneous services was but a camouflage to get him on the Company’s payroll, this regardless of the fact that the purported services were not relevant to any company need.
Finally, another factor key to the Board’s finding of an 8(b)(6) violation appeared to be the ALJ’s conclusion that there was no collective bargaining relationship between Special
Sections and the Latherers and that the work that was claimed by the Latherers was work which required the employer to infringe on the exclusive jurisdiction of the company-
20 The case also involved allegations of Section 8(b)(4)(i) and (ii)(B) conduct which were also found to be meritorious but are not discussed further herein.
21 The latherer was assigned to work in the office, do job promotions, answer the phone, address and lick envelopes, and run errands, which after a week, he proved unqualified to perform. 207 NLRB at 636.
- 16 - recognized bargaining unit represented by the Teamsters who had been performing the work demanded by the Latherers. 207 NLRB at 636-637.
As if the Board had breathed new life into 8(b)(6), a second case was decided less than a year later. In Local 456, Teamsters (J.R. Stevenson Corp.), 212 NLRB 968 (1974), the Board also found a violation of Section 8(b)(6) of the Act. A panel decision consisting of Chairman Miller and Members Kennedy and Penello found a violation by a Teamsters Local Union in forcing an employer to hire a nonworking union steward. The
Board found, as a fact, that the nonworking steward performed no services for the employer which could be deemed to be relevant or productive and did not offer to perform any services that were needed by the employer. 212 NLRB at 969. Rather, the steward “devoted his time to checking drivers entering the job site to see if they carried a Teamsters card.” Id. For this particular task, the steward earned $65 per day with various increases during the period of his employment. Id.22 It was also noted that the steward spent most of his time in a heated trailer with a telephone. The Board’s language provides the context for its holding:
We believe the facts and the holdings in Gamble and American Newspaper Publishers Association to be distinguishable from the facts and the issue before us. Stevenson indicated it had no use for the services of a teamster. The uncontradicted testimony reveals that since July 1, 1973, Korchma has not performed any teamster duties and Stevenson has had neither a need nor a desire for him to perform any. Respondent, well knowing that these were the facts, nevertheless demanded that Stevenson pay for Korchma’s unwanted and unneeded daily presence when there was no contemplation of his performing any bona fide relevant services. As of July 1, 1973, Stevenson did not have “even a prospective need for the specialized services” of a teamster. Respondent’s demand for a new contract calling for payments for the presence of one of its members at the jobsite when no teamster work was being performed and where the Employer indicated it had no need for teamster labor, coupled with a strike to make the Employer respond to such a demand, is an exaction within the meaning of Section 8(b)(6). Respondent’s demand falls considerably short of being a bona fide offer of the competent performance of relevant services. Both American Newspaper Publishers Association and Gamble
22 The steward was paid about $20,000 in the aggregate. 212 NLRB at 969.
- 17 - make it clear that “relevant services” must be contemplated for a labor organization’s demand for pay to its members to escape the sanctions of Section 8(b)(6). Here all parties–including Respondent–knew perfectly well that Korchma simply performed no work–made work or otherwise– for Stevenson. Although he may have checked union cards in his capacity as shop steward, such work was done solely as an agent of Respondent and was for Respondent’s benefit; it surely was not even remotely related to Stevenson’s work requirements. Accordingly, we agree with the Administrative Law Judge’s determination that Respondent violated Section 8(b)(6) of the Act. 212 NLRB at 971.
Having found the violation of Section 8(b)(6), the Board ordered the Union to reimburse the employer for all wages paid out to the unwanted steward as of the beginning of the steward’s employment and thereafter, as well as for “all reasonable expenditures directly incurred in its employment of . . . [the union steward]”. Id.
IV. THE BOARD SOUNDS RETREATS FROM METALLIC LATHER AND STEVENSON
If the Board giveth, it can also taketh away. In New York District Council of Carpenters (Graphic Displays, Ltd.), 226 NLRB 452 (1976), a decision by the full Board,
Members Penello and Walther dissenting, the Board found that the ALJ had interpreted 8(b)(6) too narrowly. In Graphic Displays, the Board was involved with the issue of whether or not the demand by the Carpenters amounted to the performance of “nominal services” within the meaning of the Supreme Court’s decision in Gamble. There, Graphic Displays had contracted with a company called Zelenko Associates, Inc. (“Zelenko”), who designed an exhibit for a large expo event to be held in the New York Coliseum. 226 NLRB at 452. The bulk of the exhibit was built for Zelenko by Graphic
Displays. Id.
When the exhibit arrived at the Coliseum in several crates to be opened and installed by employees who were represented by the District Council of Carpenters (“Carpenters”), the carpenters noticed that there was no Carpenters Union label on the
- 18 - panels. Id. The Carpenters took the position that its members would not erect the exhibit because Graphic Displays was a “nonunion” contractor. Id. In point of fact, Graphic Displays’ employees were represented by the Teamsters Union, but the Carpenters’ agent at the jobsite took the position that the Union did not “recognize their union.” 226 NLRB at 452. He further said “We don’t drive their trucks and they don’t build our displays.” However, the Carpenters’ agent indicated that the exhibit could be erected if it was first “handled” by a union shop, i.e., one with a Carpenters labor agreement. As a result of the Carpenters’ position, the exhibit was transported from the Coliseum to “ECC,” a union shop, “handled,” and then returned to the Coliseum for erection. Zelenko was required to pay an additional $826.69 for the privilege of having the exhibit “handled.” Id.
The ALJ dismissed the case on the rationale that no “exaction” was involved because no money was paid to any employees. 226 NLRB at 467. The Board rejected that interpretation of 8(b)(6) stating, “There is nothing in the statutory language itself or in its legislative history which suggests to us that in order for a payment to be considered an exaction under Section 8(b)(6) it must be paid to employees.” 226 NLRB at 452. Nevertheless, the Board found that there was no violation of the Act. As noted in its decision, when the exhibit arrived at a Carpenters union shop, “it was uncrated, the elements were checked, the panels were cleaned, minor repairs were made, miscellaneous services were performed and it was then recrated and returned to the Coliseum.
Accordingly, it was clear that the bill submitted to Zelenko by ECC was for work which was actually performed.” Id. at 453.
The dissenting Board members, Penello and Walther, relying on Metallic Lathers and Stevenson argued that even if ECC performed the services as alleged, those services were not “relevant services” under the Gamble test. They also argued that the Union’s demand violated 8(b)(6) because it did not occur within the confines of a collective bargaining agreement. 226 NLRB at 455-456.
- 19 - Again, the Board rejected the dissenters’ argument stating “The exhibit was composed of several different panels, some new and some old. It was important, therefore, that all of the panels be cleaned, be in good repair, fit together properly and create a fresh unified appearance. The services performed by ECC furthered this objective and were therefore relevant.” 226 NLRB at 453. The Board further stated, in response to the dissenters,
It may well be that ECC services were unnecessary and/or were not desired by Zelenko, but necessity and/or need are not – and never have been – the determinants of whether the services are relevant under Section 8(b)(6) . . . [i]t is sufficient that the work performed has to do with the product or service offered, regardless of whether the work is necessary or desirable.” Id.
Lastly, the Board majority rejected the argument of the dissenters that the union’s conduct violated 8(b)(6) because its demand did not occur within the confines of a collective bargaining relationship. The Board stated “Nothing in that section implies that its applicability is dependent on the existence or non-existence of a collective bargaining relationship. It is designed to accomplish one objective and one objective only – the prevention of the payment of money for work not performed or not to be performed. This objective applies both within and without a collective bargaining relationship. 226 NLRB at 455.
In the last case decided by the Board, Teamsters Local 282 (TDX Construction
Corp.), 332 NLRB 922 (2000), the Board also found no violation of 8(b)(6), reversing the decision of the ALJ that the union’s picketing had violated both Sections 8(b)(7)(C) and
8(b)(6) of the Act. TDX was employed by the State of New York to supervise the Queens West project, ensuring that all of the work on the project was done in accordance with the various subcontracts granted by the responsible state agency. TDX employed four employees at the Queens West jobsite: a project manager, two project superintendents, and one secretary. 332 NLRB at 922. According to the Board, both the
- 20 - project manager and the superintendents were civil engineers who were required to coordinate and supervise the work. Id. TDX did not receive trucks delivering materials or even have employees to unload trucks. Id. Over the course of a two-month period, the Respondent Union had asked TDX to employ an on-site steward; TDX refused and eventually the Union began picketing the job site. Id. The picket line was withdrawn when one of the contractors on the project agreed to employ an on-site steward (“OSS”). Id. The facts as found by the Board show that the duties of the on-site steward involved hauling and moving materials on the site, coordinating deliveries and materials on the site, coordinating safety efforts relating to the other Teamsters working on the site, and performing whatever other tasks were requested at the direction of the contractor.23
Although the business agreement between TDX and Queens West Development Corporation (“QWDC”) did not prohibit employment of an on-site steward, in order to have hired an OSS, TDX would have been required to obtain approval from Queens West to be compensated for the payments it would have to make to the OSS for his “work” on the project. 332 NLRB at 922.
The ALJ found a violation of the statute. He found that TDX’s function was to oversee the project and ensure that various contractors performed the work assigned to them according to the job specification and their contracts. The judge further found
“none of the functions of the OSS which included hauling materials and helping coordinate deliveries were performed by TDX or were relevant to the responsibilities of that company.” 332 NLRB at 922. Relying on both Metallic Latherers and Stevenson, the judge found that the Respondent Union’s actions constituted a violation of 8(b)(6) because the demand to employ an OSS was not a bona fide offer of the competent performance of a relevant service. Id.
23 It was not disputed that the previously-described duties were performed by the on-site steward.
- 21 - When the case reached the Board, a majority of the panel, Chairman Truesdale and Member Fox, reversed the judge’s decision. The Board majority relied on the Board’s earlier analysis in Graphic Displays of the Gamble relevance standard, i.e., relevant work is work having to do with the employer’s business that is to be performed or is contemplated. The Board majority in TDX held that Graphic Displays “put to rest the confusion engendered by the relevance analysis in its earlier decisions. It held that “necessity and/or need are not – and never have been – the determinants of whether services are ‘relevant’ under Section 8(b)(6).” 332 NLRB at 922 (italics in original).
The Board majority also held that the question of need is not the deciding factor. It pointed out in both Gamble and American Newspaper Publishers that neither employer had any need for nor wanted the work demanded by the unions involved, and in both cases the demands by the unions were for the performance of actual work related to the employer’s business. 332 NLRB at 923. The Board majority further found that the Board’s interpretation of the Gamble relevance standard in Graphic Displays rests “on the requirement that work having to do with the employer’s business be performed or contemplated.” 332 NLRB at 92424. In rejecting the arguments of dissenting member Hurtgen, the Board stated in TDX what is arguably the death knell for all future cases under 8(b)(6).
To be sure, TDX did not want or need the services of an OSS. It was supervising construction work rather than performing such work at the Queens West project. Nevertheless, its contract with QWDC did not prohibit the hiring of an employee who would perform the duties of an OSS. Nor did the contacts between QWDC and the contractors supervised by TDX limit TDX’s ability to perform work on the jobsite. The
24 The Board majority in Graphic Displays had rejected the dissenters’ reliance on Metallic Latherers and Stevenson. They attempted to distinguish the earlier cases on the grounds that no work was performed in connection with the disputed function. 226 NLRB at 453. In other words, relevance is understood as whether or not the union’s demands are for “actual work having to do with the employer’s business.” The Board majority in TDX read this portion of the majority opinion in Graphic Displays as effectively rejecting the need analysis of Metallic Latherers and Stevenson and instead focusing “relevance” on the fact that “no work was performed or contemplated” 332 NLRB at 924.
- 22 - Respondent’s demand for an OSS did not run afoul of TDX’s contractual obligations and did not seek the hire of an employee with skills not relevant to TDX’s business. That TDX was supervising rather than performing construction work does not require a different result. The services offered were within TDX’s sphere of activity, just as in Gamble the union’s offer of orchestral performances was within the theater owner’s sphere of activity even though the owner’s business had changed and it had ceased providing or paying for musical accompaniment months before the union’s offer. * * * Our colleague construes the term “relevant” too narrowly by confining it to the work performed by a company at the time an offer of services is made. True, when the Respondent in the case at bar demanded an OSS, TDX was coordinating and supervising others, not performing, construction work itself. However, as shown above, the Respondent’s offer of work included coordinating the delivery of materials on the site, coordinating safety efforts relating to teamsters on the site, and performing other work at the direction of TDX. Moreover, neither TDX’s contract with QWDC, nor those of the contractors it supervised, prevented TDX from performing construction work at the site or prohibited it from hiring an OSS. TDX is a company in the construction industry acting as a construction manager on the Queens West project under a contract that does not bar it from performing the work offered by the Respondent. In these circumstances, the work of an OSS is within TDX’s potential sphere of activity. It clearly “has to do with” the services rendered by TDX. Graphic Displays, supra. 226 NLRB at 453. 332 NLRB at 925.
In dissent, Member Hurtgen argued that the Board majority confused the terms “need” and “relevant.” In driving his point home, Member Hurtgan stated “For example, if a company is engaged in the manufacture of widgets, the union can insist upon, and picket for, the hiring of additional widget makers, even if the company has no need for same. However, if the union insisted on and picketed for the hire of a brass band, I believe that the conduct would be unlawful. The services would not simply be
‘unneeded’; they would be irrelevant to what the company does.” 352 NLRB at 926. In Member Hurtgen’s view, the Board majority construed the term “relevant services” too “speculatively,” based on the fact that in the future TDX might perform construction work at the site. The fact that the contract between TDX and QWDC did not prohibit the hiring of an OSS in his view proved too much because it was also not prohibited from
- 23 - hiring a wide variety of potential employees as long as QWDC was willing to compensate them. Id. The plain fact, as found by the ALJ, was that none of the functions of an OSS were actually performed by TDX personnel, but by another contractor who wanted the union’s picketing to stop.
With the Board’s decision in TDX, it can be argued that the Board has gone beyond even American Newspapers and Gamble. In those cases, one could understand the “relevancy” standard, at least as applied to the employer’s current operations, on a day-to-day basis, but TDX stretches that concept to future possible operations. Just how is that standard to be applied by the Board in future cases – if there are any. This new approach seems, by any reasoned analysis, to emasculate the statute beyond anything
Congress would possibly have recognized.
V. FEATHERBEDDING UNDER COLLECTIVE BARGAINING AGREEMENTS
A. Preliminary Observations
One of the aims of this paper was to determine how arbitrators might have dealt with the question of featherbedding when it was raised in the context of arbitration, particularly as a defense by an employer to an alleged breach of the collective bargaining agreement. Research in this area is always complicated by the fact that many arbitration decisions go unreported, either because the parties have not consented to make them public, or the arbitrator chooses not to make the decision public. In preparing this aspect of the paper, the BNA Topical Library to Labor Arbitration Reports (“LA”) was consulted. The net result of that research was approximately 73 reported decisions in which the term “featherbedding” appears in the text thereof. Eliminated from this overall group were cases arising under the Railway Labor Act, interest arbitration cases, or cases arising in the public sector. Also included were eight decisions which contained express
- 24 - references to Section 8(b)(6) of the Act, six of which do not appear in the original group of 73.
Before analyzing in broad outline what the cases say, it is perhaps useful to raise a preliminary issue: Should an arbitrator even consider the substantive law of Section
8(b)(6) when such a claim is presented either on the merits or as a response by an employer to providing for an enforceable remedy to the union involved. It is not the purpose of this paper to reopen the long-standing debate about the role of substantive law in labor arbitration. The Elkouris have certainly collected, in one place, most of the scholarly writing on this subject matter.25 However, a former colleague has recently summarized the views of arbitrators about the role of substantive law in labor arbitration, and his remarks are clearly worth reiterating, as well as pointing out that an arbitrator will not necessarily entertain a Section 8(b)(6) claim in arbitration. Thus, in Duraloy, 100 LA
1166, (Franckiewicz, 1993), Arbitrator Matthew Franckiewicz summarized the various situations when an arbitrator might consider external law:
There are five distinct situations in which an arbitrator might consider external law in deciding a grievance. First, the Agreement itself might incorporate various laws, or require or authorize an arbitrator to consider them. Second, the Agreement might forbid the arbitrator from giving any consideration to outside laws. Since the role of an arbitrator is to give effect to the Agreement, few would dispute that the arbitrator should consider external law in the first situation, and should not in the second. Likewise, where the Agreement does not contain any explicit instruction, but the parties at the hearing agree that the arbitrator should, or should not, consider the effects of outside legislation, the arbitrator ought to follow their instruction. A third situation occurs where reference to external legislation might assist in interpreting specific provisions of an Agreement. For example, an Agreement might refer to “overtime” without defining what is intended by the term. In such a case, the arbitrator might refer to the Fair Labor Standards Act. Additionally,
25 Elkouri and Elkouri, How Arbitration Works (6th Cir. 2003), at pp. 485-537.
- 25 - Agreements frequently borrow terms used elsewhere in the law, such as “bargain in good faith”, or “discrimination on the basis of race, sex, religion or national origin”, or “probable cause”. In such cases I believe that most arbitrators, and most courts, would consider it appropriate for an arbitrator to take the relevant statute into account in interpreting the meaning of the phrase in the Agreement. A fourth situation occurs where the Agreement is silent, but the arbitrator is asked to consider some statute, case or regulation and read it into the Agreement. For example, a contract might contain no provision relating to health or safety, but the arbitrator might be asked to require the employer to comply with OSHA regulations. The fifth situation, which might be considered the reverse of the fourth, is where the contract imposes an obligation, but one party contends that the contractual obligation would conflict with the law, and that the arbitrator should therefore decline to follow the contract as written. My view is that in the fourth and fifth situations described above, the arbitrator should consider only the agreement and not the external law. Where reference to statutes, regulations or decisions is not necessary in interpreting an agreement, the only effect of considering such external sources of law would be to amend the contract by adding or subtracting. The proper role for an arbitrator is only to interpret a contract, and not to rewrite it.
Id. at 1172
Moreover, when the arbitrator is faced with a claim of featherbedding, but without a party’s specific reference to Section 8(b)(6), is he or is she free to use some other reference point other than what constitutes featherbedding under Section 8(b)(6)? The interpretation of federal substantive law, while relevant, and even an important guideline, is not binding. See, e.g., United States Steel Corp. (Kuwatin Taconite), 121 LA 1793,
1795 (St. Antonine, 2005); United States Steel Corp. (Mine Ore Operations), 121 LA
1255, 1259 (St. Antonine, 2005).
B. The Arbitrators’ Decisions
Of the eight cases where Section 8(b)(6) was expressly raised by a party, usually as a challenge to the union’s position in seeking relief,26 (and some certainty did not deal
26 Kimberly Clark Corp., 97 LA 1099 (Stix, 1991); Minnesota Mining & Mfg. Co., 62 LA 1013 (Belkin, 1974); American Bakeries Co., 46 LA 1084 (Keefe, 1966); Burgermeister Brewing Corp., Continued on following page
- 26 - with what one would think of as featherbedding), the issue was raised by the employer, but the arbitrator ignored it in his or her decision. For example in the Kimberly Clark Corp. 97 LA 1099 (Stix, 1991) 1103 the employer suggested that the union’s remedy of seeking back pay for an employee who was subject to an improperly cancelled holiday operating schedule would result in featherbedding, i.e, pay for no work. The arbitrator stated that he found “no warrant for holding that where an employee who has been scheduled to work on a holiday is ‘de-scheduled’, he is not entitled to the paid wages he would have earned if he had worked as originally scheduled.” Accordingly, the arbitrator held it, was not necessary to discuss the employer’s contention that the result of the Union’s remedy “would contravene Section 8(b)(6) of the Act.” Id.
In a similar vein is the arbitrator’s decision in Great Atlantic & Pacific Tea Co., 21 LA 623 (Updegraff, 1953). There, under a 40 hour weekly guarantee of pay clause covering drivers who delivered produce to the employer’s retail stores and whose work week under the clause began on Sunday, employees were told not to report on a Sunday, but still worked 40 hours a week by working on their day off. The arbitrator rejected a contention by the employer that the union’s grievance violated Section 8(b)(6) because it sought pay for a day on which no work was performed. The arbitrator in dicta held “that a guaranteed work week or other guaranteed wage within logical and suitable limitations cannot be held to violate statutory prohibition against ‘featherbedding’.” Id. at 676.
Further, in Minnesota Mining & Mfg. Co., 62 LA 1013, 1014 (Belkin, 1974) the arbitrator opined as to whether requiring employees who had recently left the bargaining unit to become supervisors had to pay union dues in order to retain the right to
Continued from previous page 44 LA 1028 (Updegraff, 1965); Thomas Strahan Co., 27 LA 194 (Healy, 1956); Great Atlantic & Pacific Tea Co., 21 LA 673, (Updegraff, 1953); Patterson-Sargent Co., 23 LA 21 (Willcox, 1954); Owl Drug Co., 10 LA 498 (Pollard, 1948)
- 27 - accumulate seniority during the first year of their absence from the unit constituted an exaction for services not performed or to be performed under Section 8(b)(6). Nevertheless, having raised the issue, the arbitrator declined to decide it.
The remaining cases in which Section 8(b)(6) claims were specifically raised relate, broadly speaking, to the assignment of work. In a very early case, Owl Drug Co., 10 LA 498 (Pollard, 1948), the arbitrator was faced with the employer’s 8(b)(6) claim that the union’s insistence, as a condition to allowing the transfer of certain supervisory duties outside the bargaining unit, that the employer should still continue to pay those remaining occupants in the changed job their existing rate of pay despite the loss of work associated with that position, was featherbedding. The case arose when the employer consolidated two warehouses into one operation and changed its method of supervision from using working to non-working supervisors. The prior set-up duties were taken away and given to the non-working supervisors; the former working supervisors became order scanners and performed the remaining duties they had previously done in their old jobs.
Although the arbitrator conceded that the employer might still find itself paying the same rate for a job that no longer included supervisory duties, the arbitrator found that the union’s insistence that the former working supervisors be paid their old rate was not a demand in the nature of an exaction under Section 8(b)(6). Rather, the arbitrator held that the rate demanded was “a residue of a contractual obligation freely entered into and later altered by the [c]ompany for its own advantage and at the cost of having to make good [on] its [contractual] commitments. . .” Id. at 506.
In Patterson-Sargent, 23 LA 21, 23 (Willcox, 1954), the arbitrator held that seeking payment directly to the union for the employer’s violation of the labor agreement in assigning work out of the unit did not violate Section 8(b)(6), that such a payment would be a payment in the nature of damages for breach of contract rather than a payment
- 28 - in the nature of an exaction, provided of course that the union can show “some substantial” injury.
In American Bakeries Co., 46 LA 1084 (Keefe, 1966), the arbitrator dealt with a contract clause that provided that a driver salesman at the employer’s Flint, Michigan facility “shall be compensated appropriate [sic] rate for all merchandise delivered or sold on his route.” 46 LA at 1084. The driver salesmen were represented by a Flint, Michigan local union (“Flint Local”) of the Teamsters. The employer announced it would assume the business of supplying certain stores, previously carried on by another company, provided a Detroit local union (“Detroit Local”) of the Teamsters gave the employer the same concessions enjoyed by the predecessor company. The employer further decided that it would supply a certain private label product from Detroit. The employer’s Flint and Detroit operations competed with each other. When the employer commenced making drop shipments27 with Detroit Local drivers, the Flint Local filed a grievance seeking commission payment for its driver/members to make them whole for the lost work. The employer argued, inter alia, that because the Flint Local was not seeking work jurisdiction over the drop shipments, its grievance was tantamount to a violation of Section 8(b)(6); therefore the grievance was not arbitrable because it involved a representational or interunion jurisdictional dispute. The arbitrator found the union’s grievance was arbitrable, and on the merits, the arbitrator ordered that the employer pay the Flint Local’s drivers their lost commissions, without any further discussion of the Section 8(b)(6) issue.
Lastly, the arbitrator’s decision in Burgermeister Brewing Corp., 44 LA 1028 (Updegraff, 1965) illustrates the strategic use of a Section 8(b)(6) claim against the
27 Drop shipments were delivered in bulk. The Flint Local performed rack service where the drivers went into the stores and stacked the product on the customer’s shelves.
- 29 - union’s arguments to cause the arbitrator to interpret the contract in such a way so as to avoid a clash with that section of the Act. In the cited case, a provision in the labor agreement provided, “there shall be no laying off for any fractional part of a day or week.” 44 LA at 1032. When certain employees were recalled in the middle of the week following their previous days off, the arbitrator rejected the union’s claim that the employees had to be compensated for the full week. In doing so, the arbitrator held that the union’s interpretation of the contract would render the clause of dubious validity in light of the provisions of Section 8(b)(6) and held that the clause did not prevent mid- week recalls or require that any such recalled employees receive pay for the days during the week that they did not work.
Of the 63 cases in the private sector in which the term “featherbedding” appeared in the text of the arbitrator’s decision, the cases can be organized loosely as follows: (1) cases where the term “featherbedding” was mentioned as an issue but was not addressed by the arbitrator;28 (2) cases where the issue of featherbedding was raised by either the arbitrator or the employer, and was decided by the arbitrator either expressly or impliedly;29 (3) cases where featherbedding was raised as an issue by the employer but
28 Army Fleet Support, 126 LA 33 (Holley, 2009); G&R Masonry Co., 123 LA 782 (Pritzker 2007); Georgia Pacific Resins, 119 LA 163 (Jennings, 2003); Thrall Car Mfg. Co., 115 LA 290 (Daly, 2001); Americold Compressor Co., 95 LA LA 11 (Byars, 1990); Reynolds Metal Co., 95 LA 1243 (Holley, 1990); MSB Manufacturing Co., 92 LA 620 (Bankston, 1989); Keebler Company, 91 LA 559 (Fox, 1988); Packaging Corporation of America, 76 LA 691 (McDonald, 1981); Old Ben Coal Company, 102 LA 823 (Feldman, 1994); Hilliard Corp., 75 LA 548 (Konvitz, 1980); Northrop Aircraft Svcs., Inc. 65 LA 658 (Goodstein, 1975); Scott Paper Co., 61 LA 808 (Brandschain, 1973); American Oil Co., 53 LA 338 (Barnhart, 1969); American Oil Co., 51 LA 484 (Barnhart, 1968); Hillbro Newspaper Printing Co., 48 LA 1304 (Jones, 1967); Kaiser Aluminum & Chemical Corp., 31 LA 938 (Hebert, 1958); Metropolitan Coach Line, 27 LA 376 (Lennard, 1956); General Tire & Rubber Co., 28 LA 728 (Mann, 1957); Standard Oil Co. (Indiana), 27 LA 51 (Mullady, 1956); John Wood Co., 20 LA 764 (Ryder, 1953); Bridgeport Brass Co., 17 LA 490 (Donnelly, 1951); 15 LA 559 (Donnelly, 1950);
29 Dravo Corp., 75 LA 1042 (Hannan, 1980); Dravo Corp., 76 LA 903 (Duff, 1981); Master Builders Assn., 48 LA 1144 (McDermott, 1967); Shell Oil Co., 44 LA 989 (Updegraff, 1965); Meyer’s Bakery of Little Rock, Inc., 38 LA 1135 (Hon, 1962); Hillbro Newspaper Printing Co., 37 LA 915 (Hildebrand, 1961); Great Lakes Pipe Line Co., 27 LA 748 (Merrill, 1956); Thomas Strahan Co., 27 LA 194 (Healy, 1956); Dow Chemical Co., 22 LA 336 (Klamon, 1954); American Continued on following page
- 30 - the arbitrator held that featherbedding was not an issue;30 (4) cases where featherbedding was raised by the employer or the arbitrator and the arbitrator decided the case in favor of the union or the employee;31 (5) a case where a “reverse” featherbedding issue was raised by the union on behalf of an employee grievant.32
Given the large number of cases that mention “featherbedding” in the text that involve no express consideration of the issue by the arbitrator, I have sought to include from most of the categories perhaps a case or two for discussion that might be representative of that category. Also important was including any cases in the construction industry.
In the first category are those cases where the arbitrator mentioned the term “featherbedding” in his or her decision, either because he raised it or because a party
Continued from previous page Zinc Co. of Illinois, 18 LA 827 (Updegraff, 1952); Emerson Electric Mfg. Co., 18 LA 608 (Klamon, 1952); General Teleradio, Inc., et al., 18 LA 418 (Rosenbarg, 1952); Celotex Corp., 16 LA 321 (Ralston, 1951); North American Aviation, Inc., 17 LA 692 (Komaroff, 1951); Union Starch & Refining Co., 15 LA 782 (Klamon, 1950); Bethlehem Steel Co., 8 LA 113 (Simkin, 1947); National Malleable & Steel Castings Co., 7 LA 243 (Gilden, 1947);
30 Indiana Limestone Co., 100 LA 661 (Donnelly, 1993); Russell Coal, Inc. 98 LA 1104 (Nigro, 1992); Oxford Chemical Co., 57 LA 216 (Mathews, 1971); Marble Cliff Quarries Co., 47 LA 396 (Dworkin, 1966); Monsanto Chemical Co., 40 LA 177 (Rohman, 1963);
31 Hughes Aircraft Co., 107 LA 157 (Richman, 1996); SYSCO Food Services, 106 LA 524 (Gentile, 1996); National Distillers & Chemical Corp., 85 LA 622 (Caraway, 1985); United States Borax & Chemical Corp., 53 LA 440 (Kotin, 1969); Sinclair-Koppers Co., 52 LA 648 (Leonard, 1968); McDonnell Aircraft Corp., 35 LA 221 (Klamon, 1960); Wheland Co., 34 LA 904 (Tatum, 1960); Hilton-Davis Chemical Co., 33 LA 754 (Warns, 1959); American Petrofina Co. of Texas, 32 LA 614 (Boles, 1958); Cooperative Mills, Inc. 20 LA 603 (Lehoczky, 1953); Republic Oil Refining Co., 16 LA 40 (Klamon, 1951); Follansbee Steel Corp., 11 LA 617 (Selekman, 1948); Timm Industries, Inc. 9 LA 642 (Prasow, 1948);
32 The Hale Co., 51 LA 778 (Hebert, 1968) is a “reverse” featherbedding claim where the union claimed that an employee was assigned higher rated work but paid at a lower rate by assigning Grade B employees in a particular job classification to higher rated work in Grade A of the same job classification; the employer accomplished this by controlling the number of allowed employees in the higher Grade A job classification. The argument was rejected by the arbitrator. Id. at 784. No other cases were found raising this novel concept.
- 31 - raised it, but no discussion or resolution of the issue was specifically addressed by the arbitrator. For example, in G&R Masonry Co., 123 LA 782 (Pritzker, 2007), the employer refused to hire a steward referred by the union, insisting that the steward be chosen from among the ranks of existing employees. The employer argued that imposition of a non-employee as the steward on a new job “essentially [constituted] featherbedding because the employer is forced to hire an additional employee when that employee is not needed.” Id. at 785. The arbitrator decided not to rule on the “featherbedding” contention, finding that another contract provision gave the union right
“place or replace a steward” on any job of the employer’s. Id. at 785-786.
In cases falling within the second category, either the arbitrator or the employer raises a claim or contention of featherbedding. An example of the former situation is found in Dravo Corp., 75 LA 1042 (Hannan, 1980) where the issue raised by the union’s grievance was the employer’s decision to eliminate a bargaining unit dispatcher’s job whose function had been to “rely on” a foreman’s order for drivers to meet requests to transport the employer’s products. The employer had reorganized the shipping department, so that most of the calls were going through the foreman and not the dispatcher. The dispatcher had been previously laid off when the hourly workforce was reduced by 50 percent due to lost production. The union argued that the dispatcher should have been recalled when the rest of the unit was. The arbitrator, noting the substantial changes in the employer’s operations because of a change in product mix, held that:
“Aside from the paperwork for the moment, the only function of a dispatcher would be to relay orders from the foreman to the drivers. . . an unnecessary and featherbedding procedure when the foreman and the driver (or conductor) are at the same location.” Id. at 1044 (Emphasis added). The arbitrator found that the remaining duties of the
- 32 - dispatcher had been either eliminated, assigned to bargaining unit personnel, or on a “de minimum basis” assigned to a non-bargaining unit clerk. Id. The arbitrator found this job obsolete and denied the grievance.
Similarly, in Great Lakes Pipeline Co., 27 LA 748 (Merrill, 1956), a case involving the alleged transfer of work out of the bargaining unit and the assignment thereof to a supervisor, the arbitrator, although condemning the transfer of work outside the unit, denied the grievance on the basis of the facts and on his belief that a
“featherbedding” situation would have existed. Id. at 754. His words are instructive:
On the other hand, the collective bargaining contract should not be so interpreted as to a favor “featherbedding,” unless the parties expressly have provided for it. In this instance, Mr. Jenkins’ presence at the point of delivery and his accompaniment of the equipment to its destination having been established as necessary, it certainly would have been superfluous to call out other drivers from the bargaining unit. That would have been in the nature of “made work.” This, however, should not be taken as a precedent for situations in which there is not the same close relationship between the circumstances which require the service of men outside the unit and the work which normally falls within the unit’s jurisdiction.
Id.
In Master Builders Assn., 48 LA 1144 (McDermott, 1967), a case arising in the construction industry, the arbitrator held that the union was not justified in refusing to allow a general contractor to attach an air hose to a compressor being used and operated by a subcontractor’s employee on the same project without hiring its own operating engineer. Because the general contractor did not have an air compressor at the site, it entered into an agreement with the subcontractor whereby it could obtain air from the compressor whenever the general contractor needed it. When the general contractor subsequently sought to use air from the air compressor, the subcontractor’s employee
- 33 - refused to allow the general contractor to do so, claiming that the general contractor needed to hire its own operating engineer. The union’s business agent backed the subcontractor’s employee. The general contractor was forced to hire an engineer and pay a day’s wages. The Association instituted an unfair labor practice charge against the union alleging a violation of Section 8(b)(6) and also filed grievance on behalf of the general contractor. The NLRB charge was dismissed. The grievance proceeded to arbitration.
The arbitrator found for the Association and its general contractor. First, he found that the dismissal of the unfair labor charge was not binding on him. Next, he concluded that the manning requirements did not apply, therefore upholding the featherbedding claim. He stated as follows:
Considering, therefore, the duties performed by the air compressor operator, and the practice that has prevailed, I find I cannot accept the Union argument that Article VI, Section 1(b) required Dick Corporation to hire its own operating engineer, when it sought to obtain air from the McKinney compressor. The work of the operator would not have changed if the tie-in had been made. He would still only have been responsible for the operation of the compressor and the water pump as before, By adding a second hose to the manifold, it did not make conditions any different than if McKinney decided to add another hose.
Id. at 1148.
The second issue raised in Master Builders concerned the right of the subcontractor’s employee and the union to refuse to permit the general contractor to run the line to the compressor, and to require it to either to hire an additional engineer or to seek other ways of performing the work. The arbitrator held that the union’s self-help violated the labor agreement:
In the circumstances surrounding this case the employee and the Union were wrong in refusing to allow the Company to tie its line into the
- 34 - compressor. This was not a case where there was an established practice for hiring second engineers to work with a compressor, and the Employer was seeking to break that practice. Neither was it a situation where the safety conditions seriously were being jeopardized, nor any outright violations of the contract being attempted. Instead, it related to a situation that is not specifically treated in the labor agreement, so that it was a matter requiring interpretation. As a result the employer’s directions to the air compressor operator should have been followed, and the matter negotiated.
Id.
In the third category of cases, which is not numerically significant, the arbitrator considered but rejected the employer’s claim that the union’s position amounted to featherbedding. The rulings are neither surprising nor of particular note. Two of these cases involved classic work assignment disputes between two craft unions or employees in different job classifications.33 A third case involved an employer’s refusal to perform additional work in his classification based on health and safety considerations.34 A fourth case arose in the context of a contracting out grievance,35 and the fifth case involved the assignment of lower rated duties to employees.36
Indicative of cases falling within the fourth category are those where featherbedding was raised as a defense by the employer, and the arbitrator decided that the employer had violated the collective bargaining agreement. These cases frequently involved subcontracting,37 supervisors performing bargaining unit work,38 the transfer of
33 Indiana Limestone Co., 100 LA 661, 664 (Donnelly, 1993); Russell Coal, Inc. 98 LA 1107, 1111 (Nigro, 1992)
34 Oxford Chemical Company, 57 LA 216, 223 (Mathews, 1971)
35 Mosanto Chemical Co., 40 LA 177, 181 (Rohman, 1963)
36 Kaiser Aluminum and Chemical Co., 31 LA 938 (Hebert, 1958)
37 National Distillers & Chemical Corp., 85 LA 622 (Caraway, 1985)
- 35 - work out of the bargaining unit,39 crew size,40 work assignments,41 and elimination of job classifications.42
For example, in National Distillers Chemical Corp., supra, the contracting parties had agreed to a letter of intent concerning contracting out. Under the terms of the letter of intent, if outside maintenance contractors performed maintenance work on overtime rates, maintenance employees in the classification(s) involved were to be offered a like amount of overtime, and at least one employee in the classification was to be used. The arbitrator found that the employer failed to assign a plant boilermaker for overtime when an outside contractor was performing hydroblasting. The employer contended that requiring the boilermaker to assist the outside contractor’s employees in the work involved constituted featherbedding. The arbitrator rejected this claim. Squarely focusing on the language of Section 8(b)(6), the arbitrator held that the union was “not causing the Company to pay wages for work not performed.” Id at 626. The arbitrator noted that the employer had agreed to this practice, and had in the past, when grievances were filed for failing to assign a maintenance employee, paid the required overtime claim. Moreover, the arbitrator found that the employee was not just standing by. Thus, he held:
Continued from previous page 38 McDonnel Aircraft Corp., 35 LA 221 (Klamon, 1960); Wheland Co., 34 LA 904 (Tatum, 1960); Hilton-Davis Chemical Co., 33 LA 754 (Warns, 1959); Cooperative Mills, Inc. 20 LA 603 (Lehoczky, 1953); Timm Industries, Inc. 9 LA 642 (Pearson, 1948).
39 Sysco Food Services, 106 LA 524 (Gentile, 1996)
40 United States Borax & Chemical Corp., 53 LA 440 (Kotin 1969); Republic Oil Refining Co., 16 LA 40 (Lamon, 1951)
41 Sinclair Koppers Co., 52 LA 648 (Leonard, 1968)
42 American Petrofina Co. of Texas, 32 614 (Boles, 1958).
- 36 - Further, this is not a case where the Boilermaker stands by and observes the Halliburton crew. The Boilermaker has duties he must perform, specifically, setting up lights, welding scrappers to the ends of rods, maintaining air breathing devices, checking water pressure, making safety checks. While Mr. Comeaux testified that the Boilermaker assists the hydroblasting crew for about one-half the time that the crew is working, the Boilermaker is available to be assigned to perform other Boilermaker work. It is up to this Supervisor to see that any excess time is spent productively.
Insofar as the hydroblasting work is concerned, this has been performed by an outside contractor since at least 1977. In the grievance filed by the Union, the primary claim was not for the work – only that a Boilermaker be assigned to assist pursuant to the Letter of Intent, No. 8. Further, the Union stated that Halliburton can do the hydroblasting work as it has the necessary equipment.
The Company makes the further argument that since having a Boilermaker assigned to assist is featherbedding in violation of 29 U.S.C. Section 158(b)(6), the Letter of Intent, No. 8 is an illegal contract, and is null, void, and non-enforceable. . . . This argument has no merit. The company agreed to the Letter of Intent, No. 8. It bound itself by that contractual language as shown by its practice of assigning a Boilermaker when Halliburton worked overtime. When it failed to assign a Boilermaker the Company settled grievances by paying the designated Boilermaker. The Letter of Intent, No. 8 is not an illegal contract. It was mutually agreed to. It was supported by consideration. The Company acquiesced in its application over a long period of time.43
C. Conclusion
So what conclusions can be drawn from this admittedly cursory analysis of the cases.
First, there is a dearth of published decisions on the issue of featherbedding in the arbitral context. Second, in the majority of the cases, arbitrators have sought to avoid passing on featherbedding claims, almost always advanced by an employer, as a defense to the union’s grievance. Third, where arbitrators have considered the statutory claim, they have not expressed a reluctance to do so, either in finding for the employer, or rejecting the employer’s claim that
43 Id. (Citations omitted)
- 37 - union arguments or conduct are featherbedding. Fourth, employers have been creative, if not particularly successful, in making featherbedding claims in a variety of contexts beyond what would be considered traditional featherbedding. Fifth, both arbitrators and employers have viewed featherbedding more broadly than Section 8(b)(6), focusing on the question of the employer’s need, unless the employer agreed in collective bargaining to the disputed practice.
WBIII
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