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)