r :D 5/481 U.S. A THE PROS AND CONS OF COMPULSORY LIBRARY ARBITRATION SANTA BARBARA UNIVERSITY OF CALIFORNIA Prepared for The New York Chamber of Commerce APR 2 1971 by G UBUCATIONS DEPT, Theodore H. Kheel, Esq. Senior Partner, Battle, Fowler, Necman, Stokes and Kheel ! 1' A Limited Number -of Additional Copies Are Available on Request NEW YORK CHAMBER OF COMMERCE- 65 .iberty Street New York 5, New York Rctor 2-1123 March, 1961 Reproduced by the Library of Congress, Legislatve R;fercnce Service, July 12, 1963 M Ebb 4 ii INDEX Pages 1. The Purpose of This Study........................................... 3 2. How Much Compulsion Is Needed....................................... 5 3. What This Study Includes............................................ 7 4. The Differnece Between Compulsory and Voluntary Arbitration......... 8 5. The Extent of the Strike Problem, the Various Types of Strikes, and the Existing Machinery For Setting Them........ .................... 10 6. Why Both Management an Labor Are Opposed to Voluntary Arbitration of Terminal or Contracts Disputes...................................... 13 7. Wartime Experience With Compulsory Arbitration...................... 16 8. The Case Against Compulsory Arbitration............................. 18 A.Adverse Effect on Collective Bargaining........................ 18 B.Enforcement.................................................... 20 C.Inevitability of Government Control Over Prices and Wages...... 22 D.Senatro TaftIs Reviews........................................ 23 9. The Case For Compulsory Arbitration................................. 25 10. Compulsory Arbitration in Federally Regulated Industries............ 27 11. Compulsory Arbitration in State Regulated Industries................ 30 A. Types of Statutes...................................... 30 B. Legal Consequences..................................... 31 12. Compulsory Arbitration in Foreign Countries......................... 36 13. Alternate Ways of Handling National Emergency.Disputes.............. 41 A. The Taft-Hartley Approach..................................... 41 B. The Search For a Better Formula............................... 44 1 3 4 1. The Purpose of This St-idy to the fire. Even in local disputes, considerable agitation developed over strikes that spread far beyond their own bound- President Eisenhower, a staunch advocate of a hands-off policy in recent years of several months in the Summer and Fall of 1960 in labor-management disputes, became visibly alarmed when the aries. A strike elevator constructors brought New York City's 116-day steel strike of 1959, temporarily stopped by an 80-day by a few hundred building construction program almost to a halt. Taft-Ilartlcy Act injunction, threatened to break out again. Aban- billion-dollar-a--ear doning his traditional policy of non-interference in labor-manage- Tfle strike problem, particularly when it involves the national ment affairs, the Presidcnt sternly warned both sides: welfare, came in for considerable discussion by the candidates and "America will not-indeed, it cannot-tolerate for long the of both major parties during the 1960 campaign. Republicans and it is clear that the public crippling of the entire economy as the result of labor-management Democrats alike promised a solution, Congress to find an effective disputes." The choice for "free American employers and em- expects the new administration and conflicts that ployees," he added, was clear. "Voluntarily, in the spirit of free device for coping with large-scale union-management immediate circles. collective bargaining, they will act responsibly; or else, in due have a serious impact far beyond their -course, their countrymen will see to it that they do act responsibly." Secretary of Labor Arthur J. Goldberg recognized this deep- particular His "or else" was widely interpreted as an ultimatum that, felt need when he was named to the cabinet. "Of unless the steel strike was quickly settled, compulsory arbitration concern to me," he said, "is tle pronhtion of labor-management would be invoked as a solution. The strike was settled on January peace." He called this "an objective toward which I am whole- 4, 1960, three wecks before the injunction was due to expire. But heartedly dedicated, for which Y have worked in the past, and what if it had not been settled? What would Congress, into for which I will work unceasingly in the years ahead." whose reluctant lap this dispute would then have been dropped, The idea that compulsory arbitration might be used to head have been able to do about it?\What can this country do to pro- off feuds between industry and labor did not, of course, originate tect itself against tie impact of such strikes? with President Eisenhower. Such proposals, frequently pro- More than a year has passed since the steel strike ended, but pounded by persistent foes of industry-wide strikes and as often the continuing concern over national emergency strikes is still with condemned by opponents of any type of compulsion, have been us. A special committee of the National Council of Churches, the advanced and denounced, off and on, for more than forty years. nation's single most influential group of clerical and lay religious A wave of strikes immediately after World War I provided con- leaders, recently issued a report condemning industry and labor siderable imp(!,s in Congress for a law to prohibit large-scale for shirking public responsibilities in the steel stoppage, and work stoppages, and the view that compulsory arbitration may be . making recommendations to prevent a repetition. The proposals, the tool to insure labor peace has gained acceptance in some quar- discussed later in this study, seem, however, to fall far short of ters as the cold war has intensified. any guarantee that a similar crisis in steel or another vital industry The purpose of this study is to explain what compulsory will not occur again. arbitration is, how it works, and what ifs advantages and disad- The-belief that a positive formula must be found to prevent vantages are. There is no intention here to endorse or oppose national emergency strikes stems from more than the steel walk- conpulsory arbitration; rather, the aim is to present both sides ,ut. 11e distasteful prospect of a stoppage on most of the major of this important and controversial subject so that intelligent railroads in a disagreement over work rules spurred the search Ainericans way become better informed on whether comrplulsory early in 1960 for new methods to achieve peace in that critical arbitration is a practical and desirable way of pieren;i;ng Strikes industry. An 11-day shutdown of the Pennsylvania Railroad, that might otherwise become national emergencies and threats to America's largest rail carrier, in September, 1960 added new fuel the public welfare. - 9 - S 6 disobedience. fo".t of 2. How Much Cosnpulsion Is Nccdcd alatlilLi, often to the point of wil ilful us remember how millions of Americans expressed their disap- are the direct results disagreements between man- Str'kcs of Froval of a law banning the transportation and sale of alcoholic agement and labor in administering or renewing approximately liquors for 14 years, to say nothing of the casual and widespread I 25,C00 collective bargaining contracts under which some 17 z way current laws against gambling have bcen flouted. This patent million Americans, members of about 200 national unions and resentment against being told by law what to do and how to do a strike 15,000 locals, earn their livelihoods. But the prospect of it is especially evident in the head-on clashes between industry and is the single most potent factor in persuading the disputing sides labor. Neither, although for different reasons, wants to be ordered to sit down at a bargaining table and compromise their differences. around by the government. Management's fear of strike-caused losses of production and of management and labor to compul- profits, along with a union's worry over lost wages hardly ever Indeed, the opposition recouped, jointly constitute the prime pressures in hammering out sory arbitration as a national or state policy is so deep-rooted, subject to public regulations, that a peace pact, either before or during a strike. except in the few industries there is little chance that it will be imposed in the foreseeable Where a strike affects only the disputants themselves, no future. Nor, for that matter, do the most vigorous advocates of great need exists for any restriction on its use. But when non- compulsory arbitration seriously advance it as the panacea for rill combatants are hurt, obviously thought mu t be given to their disputes., Thcy confine their recommendations primarily to those with the economy. there- protection. B,, as sdcnts of industrial relations point o;t, disputes which threaten wide segments of If, rc;)no l"' of the strike ince;'tIve for ind'striad corn promise, another fore, there is any likelihood at all of a compulsory arbitration law way of blinding age.,nen;s. ii be joiinndl since, izncr sI/Cl) being enacted on a federal icvcl in the next few years, it will Crci1msances, companies and mInions will frcl .:fentlyfail to reach certainly be carefully circumscribed, most labor relations experts accord1 by themselves. ienc theIe proposal oJ con/pudsory arbitra- are convinced, to apply only in cases of work disruptions and lion, which its sa'pportcrs say is the only possible alternative if production stoppages described by the Taft-Ifartley Act as threaten- strikes