SENIOR ARTICLES Collective Bargaining Since the New Deal WILLIAM K. THOMAS THE NATIONAL LABOR BOARD--CHAPTER I Creation of the National Labor Board In latter July of 1933 the Administration realized that its offensive on industrial unemployment and business depression must be accelerated. For over a month'the NRA under General Johnson had been exerting herculean effort to formulate permanent codes for each industry. Cotton textile, electrical manufacturing, shipbuilding and ship repairing had been completed. Many more were in the process. Unfortunately the trade associations of most industries had just begun to call conferences. At best it would be many months before any real inroads would be made by this method into the uncodified mass of American industry. Mean- time the drive for recovery must proceed. More wage dollars must find their way into the pockets of the workers. Increased production and increased prices depended on increased mass buying power. The hours of the employed must be reduced to make room for willing de- serters from the ranks of the unemployed. Sweatshop wages must be destroyed. Section 7a of the NIRA must become part of our employer- employee relationships, for proper organization of labor could aid ma- terially in achieving these objectives. The Administration decided that a simple Blanket Code limited to these vital points of reducing hours, increasing minimum wages and reaffirming labor's right to organize, free from interference, would sup- ply the added punch. It would bridge the gap till the permanent codes could take its place. The Recovery Administration composed such an elementary compact; named it the President's Reemployment Agree- ment; and took immediate steps to sell the PRA to the country. The sale was generally successful. Practically all employers signed it. Many did so reluctantly. They were swept along in the surge of patriotism that rolled across the land. If you didn't have a Blue Eagle in your store window or on your factory door you were told that you weren't doing your part to help wage war on the depression. Many employers SENIOR ARTICLES 21T5 went through with their promises. Others did not. Blithely they had signed, just as blithely they violated their promises. Some did so by paying less than the blanket code minimum. Others worked their men overtime. Still others refused to meet with union representatives and fired employees who they discovered had joined outside labor organi- zations. Where workers were organized or organizing, these instances of violation laid the groundwork for future disputes. Add to these new causes of friction the sudden restlessness of the rank and file of the pre- viously organized. For four long years their wages had been going down, down, and down. The talk of increasing profits for the owners whetted their long subdued desire to reverse this downward spiral of deflation. Suddenly, workers in industries scattered across the country were on the march. Live industrial volcanoes, some tiny, some vast, were sporadically springing up in all parts of the nation. This telescopes the days that led up to August 5th and the creation of the National Labor Board. From Washington, that day, there flashed forth across the country a joint appeal from the Industrial and Labor Advisory Boards of the NRA to all industry and all labor. It took the form of a statement directed to President Roosevelt. It urged management and labor to avoid those acts that made for industrial conflict, to respect each others' rights and to maintain industrial peace pending the construction and adoption of the permanent codes. It ap- pealed to their sound judgment to carry out the PRA with regard to the letter and spirit of the NIRA. Finally it recommended the creation of a Board (with sub-boards located in central and local positions over the country) which would help iron out any difficulties and problems arising out of differing interpretations of the PRA.' The companion message, theoretically an answer to the Washington appeal, went out the same day from Hyde Park.2 In it, President Roosevelt announced the creation of the National Labor Board under the powers granted him by NIRA. Its declared purposes were to conciliate, mediate, and arbi- trate disputes arising out of conflicting interpretations of the PRA. He felt that it would set the pace for the prevention of lockouts and strikes throughout the country by marking a new precedent in establishing methods of voluntary cooperation for settling disputes between capital and labor. News reports suggested that it was implied in his message that he felt public opinion would play the major part in enforcing the Board's decisions.3 The personnel of the first Board consisted of Sena- 1 Industrial and Labor Advisory Boards Statement, N. Y. Times, Aug. 6, 1933, Z2) 3-1. President Roosevelt's Statement, ibid. a N. Y. Times, ibid. 216 LAW JOURNAL - MAY, 193 5 tor Wagner of New York, chairman; Gerard Swope (General Elec- tric), William Green (A. F. of L), Walter Teagle (Standard Oil of New Jersey), John L. Lewis (United Mine Workers of America), Louis Kirstein (Filene's of Boston), and Leo Wolman (Columbia Uni- versity). It is well to record the attitude which from the first directed the Board's general course of action. R. L. Duffus writing in the New York Times for the 15 th of October, Section 8, touched on this. In substance he said: "The psychology of conflict is being ruled out, and that of conciliation and cooperation is being substituted. The emphasis of the NRA and the Labor Board has been placed upon setting up a system of negotiations and adjudications which will take the place of strikes and lockouts. The law will not be the law of the civil courts but a new industrial code, independent of civil courts, though legally sanctioned by them, and violating no individual rights under statute or common law. Such is the objective resting on the conviction, still of course to meet the test of experience, that there is no irreconcilable an- tagonism between the basic rights and interests of the employer and those of the employee." This offers a sufficient part of the guiding attitude back of the new Board, for one to block in the underlying philosophy leading up to this guiding attitude. Expressly the starting piint is that employers and em- ployees will compose their industrial differences either by the old way of warfare, followed by the usual bitter peace treaty, or by the new way of negotiation and adjudication. Such a limitation to two possible alternatives assumes, however, that labor is collectively organized. For where labor is not so organized there is the third alternative that the workers, because they deal as individuals, necessarily do not have power to fight for their rights or power to negotiate peacefully for better con- ditions. As individuals therefore, either they accept whatever conditions and terms are laid down by their employer or they quit their jobs. By such limitation to two alternatives, it impliedly appears that the true starting point of the underlying philosophy commences with a break from the ordinary view of business men that bona fide collective bargaining is not necessary. Such philosophy accepts the traditional premise of our business men that healthy economic conditions depend largely on liberty of contract between employer and employee. The break comes however in the conviction that true liberty of contract begins in the equality of the position of the parties to the employment contract. It points to the tremendous inequality in bargaining power that the machine age has wrought. Sincerely and correctly it believes that true collective bargain- SENIOR ARTICLES 217 ing, alone, will place the employees in a position more nearly equal to that of their employer. Without this, healthy economic conditions are not possible. Section 7a of NIRA (Title 15, U.S.C.A. 701-712) by its declared establishment of collective bargaining free from employer interference crystallized this underlying philosophy of the new Board and wrote it into the law of the land. It was out of the necessity of enforcing Section 7a that the new Board arose. Thus the underlying philosophy was carried over to become the unexpressed part of the guid- ing attitude of the National Labor Board. Projecting beyond this same declared guiding attitude there is some- thing else. There is the belief that a body of precedent, apart from any interpretations of the courts, would and should be built up to give life and vitality to collective bargaining. Further there is the conviction (based on the presumption that the interests of the employer and em- ployee are reconcilable) that the Board can become an effective media- tory force to hear and settle all labor disputes over terms, tenure, and conditions of employment. Of the extremeliy important point of sanction for its decisions, there was very little said in these early days.' As an instrument of arbi- tration of course it could construct enforceable decisions. As an agency of conciliation it could only investigate the facts and try to bring the parties together with some workable arrangement. As to any decisions, finding an employer guilty under Section 7a, nothing was said as to tak- ing steps under the penal provisions of the Recovery Act or as to the seeking of injunction sanction against possible violators. Undoubtedly a too buoyant optimism as to the strength of public opinion supplemented by the fear that the courts would knock out attempts at such enforce- ment, caused the soft pedaling of this possibility and the continual empha- sis on the power and force of public opinion as a means of enforcement.