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Fion4l Labor Kit)No: :INNL.T..A.I..40.1ipti.D.8,1r, FION4L LABOR Wori-11Be Fiscal leap t,. .1EnaVed 30, 193.7,,,, , , SECOND ANNUAL REPORT OF THE NATIONAL LABOR RELATIONS BOARD For the Fiscal Year Ended'. June 30, 1937 GOVERNMENT PRINTING OFFICE WASHINGTON 1937 For Sale by the Superintendent of Documents, Washington, D. C. - - - Price 20 cents NATIONAL LABOR RELATIONS BOARD J. WARREN MADDEN, Chairman DONALD WAKEFIELD SMITH EDWIN S. SMITH BENEDICT WOLF, Secretary BEATRICE M. STERN, Assistant Secretary CHARLES FAH, General Counsel ROBERT B. WATTS, 4.880Diate Genera/ Counsel NATHAN WITT, Assistant general Counsel DAVID I. SAPOSS, Chief Economist Mezcom Ross, Director of Publicatione II LETTER OF TRANSMITTAL NATIONAL LABOR RELATIONS BOARD, Washington, D. C Jan. 4,1938. SIR: I have the honor to submit to you the Second Annual Report of the National Labor Relations Board, for the fiscal year ended June 30, 1937, in compliance with the provisions of section 3 (c) of the National Labor Relations Act, approved July 5, 1935. J. WARREN MADDEN, Chairman. The PRESIDENT OF THE UNITED STATES, The PRESIDENT OF THE SENATE, The SrEAKER OF THE HOUSE OF REPRESENTATIVES, Washington, D. C. XII c_ CONTENTS Page I. Introduction 1 II. The National Labor Relations Act 4 III. The National Labor Relations Board 7 A. The Board. 7 B. OrganizationWashington office 7 C. OrganizationRegional offices 8 D. Regional officesLocation, territory, and personnel 9 IV. Procedure of the Board 12-13 A. Rules and regulations 12-13 1. Procedure under section 10 of the act 12-13 2. Procedure under section 9 (c) of the act 12-13 V. Work of the Board 14 A. Statistical summary 14 B. Settlements 16 C. Informal activities 17 VI. Complaint cases 18 A. Analysis of charges received 18 B. Disposition of complaint cases 20 1. Cases closed before issuance of complaint 20 2. Cases disposed of after issuance of complaint 21 3. Cases pending 22 C. Hearings and intermediate reports 23 VII. Representation cases 25 A. Disposition of cases received 25 1. Cases closed before hearing 26 2. Cases closed after hearing 26 3. Cases pending 27 B. Elections 29 VIII. Litigation 31 A. Injunction proceedings 31 B. Enforcement litigation 32 C. Cumulative summary of injunction litigation 36 IX. Division of Economic Research 41 X. Publications Division 48 A. Public relations problems 48 B. Board policy in its public relations 48 C. Activities of Publications Division 49 XI. Jurisdiction 52 XII. Principles established 58 A. Interference, restraint, and coersion in the exercise of the rights guaranteed in section 7 of the act 58 B. Encouragement and discouragement of membership in a labor organization by discrimination 69 C. Collective bargaining 79 D. Domination and interference with the formation or adminis- tration of a labor organization and contribution of financial or other support to it 94 E. Investigation and certification of representatives 104 F. The unit appropriate for the purposes of collective bargaining_ 122 G. Administrative remedies 140 XIII. List of cases heard and decisions rendered 157 XIV. Fiscal affairs 168 Appendix. List of references on National Labor Relations Board 169 . SECOND ANNUAL REPORT OF THE NATIONAL LABOR RELATIONS BOARD I. INTRODUCTION The First Annual Report of the National Labor Relations Board contained an account of the events leading to the passage of the National Labor Relations Act and the creation of the Board, as well as a detailed statement of the work done by the Board in the first year of its existence. Since the issuance of that report, public in- terest in labor relations has been greatly stimulated by a number of important developments. Before proceeding to a full statement of the Boards activities during the period from July 1, 1936, through June 30, 1937, we shall review briefly some of the major occurrences affecting the work of the Board during that period. The situation existing at the end of June 1936 continued unchanged for several months. The volume of cases received showed neither increase nor decrease. The number of cases adjusted by the regional offices comprised a large percentage of the cases closed, and this phase of the Boards work, though little publicized, contributed greatly to the maintenance of industrial peace. The litigation staff of the Board devoted the major portion of its time to the injunction litiga- tion and to preparation of the five cases to be argued before the Supreme Court, and in the early part of 1937 these cases were pre- sented to the Court, the chairman of the Board and its general counsel joining with representatives of the Department of Justice in this presentation. On April 12, 1937, the Supreme Court issued its decisions in the five cases pending before it involving the validity and scope of the National Labor Relations Act. In each instance the decision of the Court affirmed the decisions previously rendered by the Board, thus unequivocally and effectively answering the widespread propaganda that the act was unconstitutional, and that even if basically constitu- tional, it was narrowly limited in scope. These decisions by the Court were a complete justification of the Boards right to exercise jurisdiction over employer-employee relations in manufacturing plants, insofar as ththe relations touched matters covered by the act The effect of the action of the Supreme Court was instantaneous. An overwhelming number of charges and petitions were filed in the various regional offices a number far greater than the small staff of the Board couldle. The handle. rate of cr increase was approximately 1,000 percent. Because of lack of funds the Board was unable to increase its staff sufficiently to handle all this work adequately, despite the valiant and untiring efforts of every member of the Boards staff. As a result, the number of cases pending at the end NATIONAL LABOR RELATIONS BOARD 3 for the Board. Under the terms of the act, an employer may not discharge employees because they join a labor organization of their own choice, nor can he force his employees to join any particular labor organization. The act contains an exception to this rule; the exception providing that nothing in the act shall prevent an em- ployer from making a closed-shop contract with a legitimate labor organization, if the labor organization at the time the contract is made represents a majority of the employees. In a. number of instances, a union filed a charge with the Board alleging that while it was organizing the employees in a plant, and in some cases after it had secured the affiliation of a majority of the employees, the employer had invited a rival labor organization to organize the plant. Such invitation, according to the charge, was accompanied by the employers active aid, by preferentially making plant facilities available to the organizers of the rival union, or by clear indications to the employees of the employers prefer- ence with regard to the two unions.2 Such action by an employer is clearly illegal under the act; and when it is followed by the consummation of a closed-shop contract, either before the second union had secured a majority or after the majority had been se- cured as a result of the employers illegal acts, the existence of such a pretended contract does not give the employer the right to dis- charge employees for refusal to join the union of the employers choice. When such cases were presented to the Board, it was its duty to make a thorough investigation, and determine, among other things, whether the closed-shop contract was legal under the act. The Boards inquiry was directed solely to the ascertainment of whether the employer had violated the act, and was not directed against the union which had benefited from the employers acts except insofar as a determination that the closed-shop contract was invalid would deprive that union of an advantage it had secured as a result of the employers illegal actions. Invariably the Boards actions in such cases were bitterly resented by the union which had been the beneficiary of the employers violation of the law. Since the validity of the act and its wide applicability have been determined by the courts, acceptance of the principles of the act is bound to become more widespread. The beneficial effect of such acceptance has become apparent to an increasing number of employ- ers of labor; and as resistance decreases and its work is speeded up, the Board expects that formal proceedings, now necessary in many eases, will be replaced by informal and rapid adjpstment of com- plaints. The achievement of this end, with its attendant lessening of industrial strife and increased harmony in the field of indus- trial relations, is the Boards primary objective. There follows a detailed review of the Boards work during the past fiscal year. Cf. In the Matter of Nattonal Electric Products Co., 3 N. L. IL B., No. 47. II. THE NATIONAL LABOR RELATIONS ACT The enactment of the National Labor Relations Act followed the best traditions of preventive legislation. The act was carefully thought out in advance, upon the basis of reason and experience, was considered by committees, debated through two sessions of Con- gress, and finally approved on July 5, 19353 In signing the meas- ure, the President summarized its purpose in these terms :4 This act defines, as a part of our substantive law, the right of self-organiza- tion of employees in industry for the purpose of collective bargaining, and provides methods by which the Government can safeguard that legal right. It establishes a National Labor Relations Board to hear and determine cases In which it is charged that this legal right is abridged or denied, and to hold fair elections to ascertain who are the chosen representatives of employees.
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