The Wagner Act: An Evaluation

ONE hundred years ago, mere membership in the shoemakers’ union was held indictable as a criminal conspiracy. It took fifty years to establish the right to strike. The Debs case denied it to railroad men in 1894. Less than twenty years ago our federal courts were enjoining boycotts. The right to picket is even now in the making. We lawyers cannot deny that we have been extremely slow to adapt the uses of the law to changing industrial conditions.

It had been increasingly obvious that collective bargaining was what the nation wanted and what it did not have. So Congress undertook to bring it about as quickly as possible and in the easiest manner. The Wagner Act itself was not revolutionary. It was foreshadowed in its entirety through the principles established by the War Labor Board under the co-chairmanship of William Howard Taft and Frank P. Walsh. That such a statute should be adopted was first suggested in the Report of President Wilson’s Second Industrial Conference, which was published in 1920. Among the other members who signed it was the vice chairman who presided over most of its deliberations. His name was Herbert Hoover. The whole doctrine was enacted in the Railway Labor Act of 1926. This was passed by a Republican Congress and signed by Calvin Coolidge.

If you will read the Wagner Act in its entirety you will discover that it is quite simple. It establishes but four principles of substantive law. The first is that employees shall have the right to bargain collectively through agents of their own choosing. This merely declared the law as it was before. The second is that employers may not interfere in the organization of the men. This is an obvious corollary to the first. It added something to the previous law, but it was a change by no means spectacular. The third is that the employer cannot control the organization of the men once it is established. This too is a development of the first. For there is no true bargaining if the employer speaks out of one side of his mouth for himself and out of the other side for the men. The fourth principle is that the employer must bargain collectively if the employees so request. This was new; but if we accept the desirability of collective bargaining there is little in it to which we may object. In four sentences you have the fundamental rules of the Wagner Act.

I

Four years and some months have now elapsed since the Wagner Act was adopted with the confident promise that it would substantially mitigate the public inconvenience brought about through economic action by unions to compel recognition by recalcitrant employers. It is well inside the truth to say that no spectacular diminution of labor disturbances has been noticed. It is not proper to charge all of this to the Act or to the activities of the Labor Board. Considerable unrest is to be expected as a concomitant to the transformation from individual to collective bargaining. It is an axiom well known to cooks that if you would make an omelet you must first break some eggs. Whether the sum total of the results of the Act is entirely in the public interest is a question which history will answer more accurately than can we. That the people are not satisfied is attested not only by current polls of public opinion but also by the vigorous and sustained criticism of both employers and the American Federation of Labor. Even the CIO joined the hue and cry during its San Francisco convention in October.

While the various critics of the Board launch their offensives from opposite points of view, their attacks have this in common, that they are rather more upon the administration of the Act than upon the terms of the Act itself. That the Board is consciously biased against the employing class is an accusation which the objective evidence does not support. It is not fair to the Board to draw conclusions solely upon the basis of the final orders it has made. Of the charges of unfair labor practice that have been filed, fewer than one in ten ever go to a hearing, let alone to a decision. The overwhelming majority are settled somewhere along the way. It is the policy of the Board that no such charge is even formally heard unless the Board’s representatives are convinced that there has been a violation of the Act, unless they are satisfied that the violation can be proved, and unless they find that the dispute cannot be settled. The final decisions themselves merely mark the outward boundaries of what are, in the conception of the Board at least, the most outrageous labor practices by the most intransigent of employers.

Of course it is from the decisions that we must determine the rules of human conduct established under the Act. If you do not take your facts from partisans or scan them from epitomized abstracts in the public press, but if instead you have the patience to read page after page of the actual opinions, you must believe that what the Board has tried to do is to enforce the law as it is written. As you pore through them you say to yourself, ‘This is all very sensible.’ But every now and then you come upon one which raises you clear out of your chair in wonder that reasonable men can do such things.

What are the nature and sources of this derangement? I have mentioned the almost universal want of satisfaction with the work of the Board. In sharp contrast is the attitude of the Board itself. No one can do business with the Board and its staff without becoming aware that the whole organization has made a religion of the Act. They confuse their own purposes with those of the Almighty. This is a very dangerous thing. For the Board organization, in an excess of zeal to enforce the Act against all comers, has extended the terms of the statute beyond its true intent, and in the enforcement of it has cut corners which establish disquieting precedents.

The Act says that an employer shall not ‘interfere’ in the organization of the men. What is interference? The National Electric Products Company told their employees that if they joined the CIO the A. F. of L. would boycott their products and they could not be widely sold. The Pacific Greyhound Company suggested to their bus drivers that joining the Brotherhood of Locomotive Firemen would be subscribing to an organization whose main interest was with the railroads as opposed to the bus lines. Both observations were true; both were on subjects of mutual interest to the employer and his employees; but both were held by the Board to be ‘ interference ‘ with the self-organization of the men and in violation of the Act. The attitude of the Board on employer statements has been so severe that even the Civil Liberties Union opposed the decision of the Board in the Ford case. In its enthusiasm to shelter the unions the Board has gone too far in holding employers to a vicarious responsibility for the acts of inconsequential subordinates exceeding that which any business man could reasonably have anticipated. In a hundred cases employers have been condemned, not because of what corporation officers have done or what executives — major or minor — have said, but by reason of trivial acts by insignificant straw bosses. In the Pacific Gas & Electric Company decision the Board found that certain foremen had declared themselves against the CIO union. They were so inferior in the chain of command that they were included by the Board as laborers in the definition of the appropriate bargaining unit. Some of them had joined the union. It would seem that one who is eligible to vote and join should be at least entitled to speak. But the Board held the company responsible for their expressions. It is true, as the Board says, that some employers may design a devilish plot to have topside management put on a pious and false front of legality while they direct lesser men to do the dirty work; but the Board goes too far.

The most startling aberration indulged by the Board is the practice of drawing sweeping presumptions when it has no direct evidence to support a finding of guilt. The International Shoe Company has a factory at Hannibal, Missouri, and the A. F. of L. was trying to persuade the workers to join. Several older employees sought out the superintendent and asked whether they should affiliate with the national organization or form a union of their own. The superintendent said that under the law he could give them no advice; but when they pressed him for some help he suggested that they might consult certain downtown business men. They did so. Later an independent union was formed. On these proved facts the Board concluded there had been interference with the right of self-organiza-

tion. In its opinion the Board said that it should be presumed that the downtown men would advise a company union because it should be presumed that they would give advice which would be agreeable to the company; and they were presumed to think that the company was opposed to the A. F. of L. — which was not the fact; and the superintendent was presumed to know the erroneous state of mind which existed downtown, as presumed by the Board, and by suggesting that the employees discuss the problem with business men he would be presumed to have intended to tell them, indirectly, that they should not join the A. F. of L. but should form a company union. Such stuff is purely wishful thinking, well bound up in a full dossier of preconceived ideas. It would be well for the Board to take a few feathers from the wings of its imagination and stick them in the tail of its judgment.

II

I have said that the Board is trying to be fair. Yet if this is wrong I know of no way to legislate fairness into a tribunal where it does not otherwise exist. If these serious mistakes arise, as I think they do, from an excess of zeal, still there does not appear to be any ready device of statutory amendment to reverse their tendencies. Probably our best remedy is by vigorous criticism — such as this one — to persuade the Board to get back on the reservation. If we fail, then we must get a new Board. Most of the amendments proposed in Congress are utterly useless to accomplish these purposes.

It has been suggested that the Board be increased from three to five members and that it be made representative of capital, labor, and the general public. And what good would that do? There is no magic in the number five. If three are unfair, would five be more fair? Others suggest that we should segregate into two separate agencies the prosecuting and the judicial functions of the Board. Unless there be a substantial increase in the duties of the Board, it does not appear that such a change would be useful. Of the charges filed with the Board, fewer than one in ten ever go to a hearing. The remedy would affect only ten per cent of the cases. Testimony is always taken by what are called ‘trial examiners.’ They also recommend findings of fact and forms of orders which the Board almost universally adopts. These trial examiners come from Washington. The attorneys who put in the cases of the Board are always local men. I have participated in cases where the trial examiners and regional attorneys did not even know each other before the hearings. I apprehend that between the trial examiners and the regional attorneys there is less contact than between the average District Judge and the average United States District Attorney under the Department of Justice.

Fortunately and justifiably there is much public confidence in our federal appellate courts. So we have heard it said that we should authorize our Circuit Courts of Appeal to review the facts found by the Board. The Wagner Act now endows the Circuit Courts with power to upset Board findings unless they are adequately supported by ‘evidence.’ At first the Courts seemed quite reluctant to reverse the Board; of late they have done so more and more. To go further would require the Courts to try the cases all over again. This would be altogether bad. It would be carrying the doctrine of checks and balances to an extreme.

For the government to set a man to do a job, then set a watchman to watch him, and another watchman to watch the watchman, was very popular in the eighteenth century — and so was the flintlock rifle. Today the economic world moves faster. It is better to put all the eggs in one basket, and then watch the basket.

III

Yet, contrary to the ecclesiastical dogma of the Board itself, the Wagner Act has received no divine sanction. Actual operation under it has developed stresses and strains which can be remedied by new legislation. To what extent these weaknesses are due to structural defects or to the uses to which it has been put by the Board is of less importance than the fact that there is a remedy at hand. At least three defects are manifest and are important.

Aside from its quasi-criminal jurisdiction to restrain unfair labor practices by employers, the Board is also authorized to investigate and certify which union represents the men. The Act provides, and the Board has held, that the union or its officers are the agents of the employees and that they can change their representation as they wish. The Act also expressly authorizes closedshop agreements. What is to happen when the employees make a closed-shop agreement through one union, and then a majority shifts to another union? The M & M Woodworking Company makes plywood at a plant near Portland, Oregon. They had a closed-shop agreement with an A. F. of L. union. By this they promised to hire and retain in their employ only members of the A. F. of L. A majority of their employees withdrew and joined a CIO union. The old union demanded that the CIO men be discharged. The company complied. The CIO union thereupon contended that its members had been discharged for union activity and that the management must deal with the new representation. The Board found the employer guilty of a violation of the Act even though the discharges were required by contract. By the theories of the Wagner Act the men could change their affiliation and the employer must recognize the union with the new majority. Yet because of the closed-shop agreement the men must belong to the old union to be able to work.

Under the statute as it now is the problem will remain insoluble. You can promote flexibility of representation by requiring recognition promptly to follow changes of opinion and affiliation; or you can promote stability by allowing and enforcing closed-shop agreements. You cannot have both. The acme of collective bargaining is an agreement. Once it is arrived at it should be enforced. The problem should promptly be resolved by statutory clarification. If the men make a closed-shop agreement they should not be allowed to break it by joining another union. Perhaps there should be a time limit on the enforceability of these clauses to prevent affiliations becoming frozen by contract. But any rule on the subject is far better than a conflict, and better than none at all.

Competition between unions for representation of workers is a vast source of industrial conflict. The unions have a word for it. They call it a ‘jurisdictional dispute.’ When it is between the CIO and the A. F. of L. the Board will take the case and certify which represents the men. When it is between two A. F. of L. unions the Board will not. The idea is that, since the Federation itself has the machinery to decide it, the Board will not interfere. So far as I am aware, no such problem has arisen as to the CIO. But the Federation’s machinery too often does not work; and the employer and the public suffer from the consequent disturbances. For nearly forty years the Teamsters and Brewery Workers have been fighting, striking, and picketing over which should have jurisdiction over drivers of brewery trucks. These manifestations of union activity are completely without excuse. The Board should be directed by law to certify who represents the employees in all cases. The employer should not be required to choose at his peril.

While the Wagner Act denounces unfair labor practices by employers, nothing is said about the unions. Altogether too frequently the Board has taken the position that no wrongs which the union may commit will disentitle it to the protection of the law. Unfortunately there is a substantial minority of union leaders who regard the use of the ‘ goon squad ‘ as legitimate strategy. These ‘goons’ are the strong-arm men who persuade workers to support the union by means of the argument of the blackjack and a piece of lead pipe. So, many have suggested that the Labor Board be given power to restrain coercion, violence, and intimidation on the union side. But, if you stop to think of it, this additional work would involve the Board in so much constabulary duty that unless its staff were multiplied tenfold in order to police every important picket line in the nation the whole machinery would bog down through sheer bewildering unworkability.

There is a modification of this idea which has possibilities. We might adopt an amendment providing that any union guilty of violence or intimidation would be ineligible for certification, and no employer should be found guilty of a violation of the Act in refusing to bargain collectively with a union which makes a habit of these practices. Under the Wagner Act the strong arm of the government has been extended to assist employees in organizing and in bargaining collectively. There is no inconsistency, even with the present theory of the Act, in extending that assistance with some discrimination and in saying that we will not give governmental aid to unions which adopt the ‘goon squad’ policy to promote their interests. It should be no disfavor to the unions to provide that we will encourage those unions which do obey the law, but will not assist those which do not. To this distinction no labor leader whose intentions are honest could have any reasonable objection.

An amendment still more mild in its effect would provide that the Board may protect the unions which it certifies from interference from any source. It is now the law that, when a union is certified as the collective-bargaining agent, if the employer refuses to recognize the certificate he is guilty of a violation of the law, but if a rival union interferes by establishing a picket line that is all right. It is no help to labor for the Board to certify a union and then allow the processes of collective bargaining to be interrupted through the avarice of a rival and disgruntled organization.

In any amendment on this subject the description of the offensive acts must be written with great care. The commonest suggestion is that we should denounce ‘coercion.’ What is‘coercion’? To hit a man over the head with a piece of lead pipe is undoubtedly coercion. So is threatening to hit him. Mass picketing is generally held to be coercive; but what is mass picketing — two at an entrance, or three, or five, or ten, or twenty? Is it coercion for the pickets to sing hymns? One court in Pennsylvania found it so. Some skeptical soul inquired what hymns were sung and learned that as the non-striking workers entered the plant the pickets made it a practice to sing ‘Nearer, My God, to Thee.’ The five-finger salute is improper in California. A Connecticut court has said that it was coercive to give ‘threatening looks.’ In New York it is proper to call a non-striker a ‘scab,’ but not a ‘dirty rat.’ That is not all. The law is that a picket line may be coercive if it is non-peaceful, and also it may be coercive if it is for an unlawful purpose. Yet there is no agreement as to what is a lawful purpose. A picket line to organize a plant is coercive in New Jersey; it is not in New York; and in California I am not sure whether it is or not. To picket for a closed-shop agreement is unlawful in Maine and Massachusetts; it is not coercive in New York unless the closed shop would be unduly monopolistic — whatever that means; and in California no one can know what the rule is until the State Supreme Court passes upon three cases now pending.

So you see the word ‘coercion’ means nothing because it means too much. Its use is not intellectual economy; it raises more questions than it answers. You cannot say with precision to what acts in human experience it relates. It is a linguistic blank. All of this is but one illustration of the point that any amendment which deals with union ‘goon squad’ strategy must be skillfully drafted. The difficulty is not insuperable. I should hate to admit that the English language does not contain words to express a concept which is so generally understood.

IV

Other proposals have been made to amend the Act to set up a substantive control over union affairs. These include compulsory incorporation of unions, restraint of the use of union funds in public elections, publicity of financial reports, and specific requirements for the conduct of union elections and the taking of strike votes. It is inescapable that over the next fifteen years the unions wall undergo a process of public regulation similar to that through which corporations were progressively subjected at about the turn of the century. This will call upon all of us to examine carefully into fundamental considerations of labor organization and the device of collective bargaining. These questions are too important to be disposed of by any ancillary amendments to the Wagner Act. It is high time to give thought to some of the ultimate problems of this relatively new relationship.

What should be the true nature of a union? Should it be regarded as a unit or merely as an aggregation of individuals? Most labor unions are unincorporated associations. The law now says that they are not units. They are aggregations of individuals. When they act, they act not as an entity but as a group of persons. When a union holds title to real property the equitable ownership of the property is in the entire membership as co-owners. Most courts have said that in a collective-bargaining agreement the real parties in interest are the men themselves — not the union.

The Wagner Act clearly adopts this theory. In some states the agreement is held to be with the employees of the individual plant made through the agency of the whole union or possibly through the agency of the officers of the union. Other states say the agreement is with the whole body of union members and through either of the alternative agencies. The difference is real. If the agreement is with the whole body of the union, then the union determines whether the contract is renewed or whether there is a strike; if it is with the particular employees of the plant, then they alone decide. Then, too, what should be the relation of a local union to its international, and the international to the broader Federation or Congress?

Incorporation is no solution. The purpose of most of those who propose that unions incorporate is to increase liability and responsibility for wrongful acts. The result would be the opposite. If you recall, the main reason why entrepreneurs incorporate their businesses is to limit liability. The corporate device was designed to facilitate the organization of capital and the management of its affairs. It is not adapted to union organization. There should be established by law a new definition of organization conformed particularly to the necessities of labor unions.

Then again, what should be the proper nature and effect of collective-bargaining agreements? When they are broken by a few members of the union, should the whole organization be liable or only the few? What machinery can we set up which will promptly and effectually enforce these contracts? Perhaps the greatest single source of industrial unrest today is that there is no tribunal to which either party can resort for adequate enforcement. Relief must be prompt. As Napoleon said to his generals before Austerlitz, ‘Ask me for anything but time.’ The only remedy available in the courts which is of any use at all is the injunction in equity. This is too complicated, too slow, too costly. Do we need a whole new set of labor courts? It would seem so.

Most important of all, what are the appropriate objects of union strategy and what the allowable tactics on a picket line? On both these subjects the courts are in hopeless confusion. These are questions of public policy. It is unfair to call upon a judge to decide whether a union should be entitled to picket for a closed shop. That is not a matter of law. There is no law, except by analogy. It is a question of what the people want.

But to add all of this legislation to the Wagner Act would be to engraft a pine tree on a rosebush. The Wagner Act is limited to a single, specific subject — the right of employees to organize and bargain collectively. These other reforms embrace the whole area of industrial relations. They merit independent consideration. I doubt, too, whether on these broader subjects our national thinking has sufficiently matured to justify attempting to crystallize it in a Congressional enactment. It was Lord Bryce who pointed out that one of the great merits of our federal form of government was that we can test proposed reforms in individual states without the hazard of a national commitment. Experience with the Wagner Act abundantly proves the wisdom of this caution.

V

Thus far the public debate on the Wagner Act has done little but lay over the whole subject a fog of fury and malice and mistrust. The path of truth is neither straight nor clear. Sometimes it wanders into the field of what is, and sometimes into the realm of what should be. But in the present state of the nation after four years of the Act I see no special cause for alarm. The Wagner Act brought no substantial change in substantive rights. Its principal innovation was to create the sanction of a strong administrative remedy. This was a new and ambitious experiment in government.

The work of the Labor Board has been carried on in the face of bitter and unrelenting opposition. Its problems have been without precedent and most of its decisions are filled with unparalleled embarrassment. As an arbitrator of labor disputes, I have met with similar questions, and I speak with some feeling on the subject. If you have never been confronted with the issue of whether Bill Jones was fired for union activity or for the infraction of some minor rule, you have no possible conception of the mental labor pains which are suffered by the trier of the fact while he gives birth to his decision.

That, under all the circumstances, the Act should have been administered imperfectly, even that it has resulted in some considerable injustice, should be no cause for surprise. These ills cannot all be cured by statutory amendment. Not every disease can be treated by medication. I hope it is not too much to expect that, sooner or later, the Board will correct its own habits. If not, then the remedy is to get another Board.

The Act is not perfect. It has flaws to be repaired, omissions to be supplied. More important still are the necessities of reëxamining the broader rules covering the nature of unions, their objects and strategies, and the new technique of collective bargaining and agreements. Prudence requires that all of this be done without haste and with malice toward none. ‘It were good,’ wrote Sir Francis Bacon, ‘that men in their innovations would follow the example of time itself, which indeed innovateth greatly, but quietly and by degrees scarce to be perceived.’