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Labor Boards: The New Mechanism for Industrial Relations

by John A. Fitch

Director of Industrial Courses, New York School of Social Work

November 1934

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The National Labor Board was created by the President on August 5, 1933, at the joint request of both the Labor and the Industrial Advisory Boards of the NRA. This Board of seven, made up of three members of each of the two advisory boards (industrial and labor) with Senator Wagner as chairman, was limited at the outset to cases of "hardship or dispute that may arise from interpretation or application of the President's Re-employment Agreement." It was looked upon, however, and soon came to be used as a general mediation board functioning widely in industry.

This Board broke new ground. It did a vast amount of work and in its decisions made a significant contribution to orderly processes in industrial relations and to the enforcement of Section 7-a of the Recovery Act. But it operated under three major handicaps.

In the first place, its powers were uncertain, because it existed solely as the result of a somewhat informal invitation from the President, made without reference to any statutory authority. In December 1933 and in February 1934 the President issued executive orders on the authority of the Recovery Act, enlarging the scope of the Board and giving it definite powers. Specifically, it was empowered to mediate in all labor controversies tending to "impede the purposes of the Recovery Act," to arbitrate cases submitted to it, to organize regional labor boards and to review their findings, and after February 1, 1934, to conduct elections to determine the will of employes in particular establishments for collective bargaining. These formal orders strengthened the Board's position, but there continued to be some doubt about its legal status.

In the second place, its jurisdiction as distinct from that of the Recovery Administration was somewhat uncertain. There was nothing to prevent the NRA from appearing suddenly in a labor case to supplant the Labor Board. A notable case in point was the threatened automobile strike in March 1934. The National Labor Board asked the disputants to come to Washington for a hearing. Just before the hearing was to begin, General Johnson, according to authoritative sources in Washington, summoned the manufacturers to his office and discussed terms of settlement. The manufacturers then went before the Labor Board and stated their case, after which, accompanied by some of the employer-members of the Board they returned to General Johnson's office where negotiations were continued until the settlement, later promulgated, was agreed upon. The Labor Board, although it held a hearing, never made a finding in this case. The text of this agreement when finally perfected contained the clause providing for proportional representation, referred to above.

A threat to the independence of the Board appeared also in a provision that crept, inadvertently, into the President's order of February 1. It provided that cases of violation of Section 7-a, not adjusted by the Board should be referred to the administrator for Industrial Recovery for "appropriate action." Three weeks later this provision was withdrawn and a new one inserted authorizing reference of cases to the attorney general or to the Compliance Division of the NRA, which was to take "appropriate action" but not to review the findings of the Board.

The third handicap confronting the Board was its heavily burdened personnel. Besides its chairman who was one of the most active members of the Senate, it consisted of six exceptionally busy men who, in addition to holding important positions in their respective fields, also had other obligations in the NRA itself. Consequently it was ofien very difficult to obtain a quorum.

The second important agency to be set up during the experimental period was the Cotton Textile Industrial Relations Board, commonly known as the Bruere Board, created on August 8, 1933. This Board also had its handicaps, some of which are well known. They appear to have arisen out of its form of organization and the peculiar problems existing in the cotton-textile industry. Unlike most of the other boards, the Bruere Board was outlined and its powers specified in the Cotton Code itself. Thus, while in a sense under the jurisdiction of the NRA it was more closely tied up to the Code Authority than to any other agency. It was limited both in funds and in staff. Consequently many complaints addressed to it had to be turned over to the Code Authority, made up of employers, for investigation by their staff. Moreover, the industry is one of vast extent, employing nearly half a million workers, less than twenty thousand of whom at the time of the organization of the Board were members of the United Textile Workers or of any other union. Under all of these circumstances it was more or less inevitable that when a widespread movement for organization got under way there should be a tendency to upset the applecart.

THE Board consisted of a representative of employers, a labor representative who because of the initial weakness of the Textile Workers Union was chosen from another field, and a chairman of exceptional experience and ability in the handling of industrial relations. It was a Board committed to action upon the basis of ascertained facts developed through research. Its members knew that changes in the set-up were necessary and steps in that direction were under way when the strike intervened and the Board ceased to function. If conditions in the industry had been different it seems probable that the Board would have worked its way out of its difficulties. But the situation required quick action and the Board was deliberate. Its elimination was necessary because it had lost the support of labor. It is only fair to say, however, that the official change of front on the part of the union was a sharp break with its previous position. Comment in the official journal had been favorable and as late as June 28, Vice-president Francis Gorman, the leader of the textile strike, accepted membership on a new board for wool and silk under Mr. Bruere's chairmanship.

The problems that emerged in the cotton-textile industry are duplicated in part by the situation in the automobile industry, although the Automobile Labor Board was set up under very different conditions. This Board is neither under the Code Authority nor the NRA but is responsible directly to the President. It was created in accordance with the terms of the agreement of March 27 by which the threatened strike in the industry was averted (see Survey Graphic, May 1934, page 213). Its authority is limited to the discovery of the will of the employes with respect to representation and the adjustment of disputes with respect to discriminatory discharge. By agreement between the parties it has final authority with respect to these matters.

This agreement was, as previously stated, arrived at by conference between the Recovery Administration and the employers, with representatives of labor not participating to any great extent. Both for this reason and on account of the proportional-representation clause organized labor was dissatisfied with it at the outset and is still dissatisfied, since it feels that the decisions of the Board have been neither prompt nor vigorous.

The extent to which this feeling is justified depends upon facts and circumstances that could only be definitely established by investigation on the ground. But here is another industry which was almost wholly without organization a year ago. There has been a mushroom growth of trade unionism in this field but the situation is so unstable that the member of the Board representing labor is no longer representative of the majority of organized workers.

The only one of the labor boards appointed during this experimental period which has won the confidence of both employers and workers is the Petroleum Labor Policies Board created by the secretary of the interior as administrator of the Petroleum Code. Yet its creation was due, in part at least, to an accident. In November, Secretary Ickes had appointed a three-party Board. It happened that one of the three labor members of this Board was a representative of a company union, and the other two, representing an AFL union, refused to sit on the Board with him. Accordingly this Board never functioned and on December 22, 1933, the secretary abolished it and created a new Board of three, having no connection either with the industry or with labor. This Board was made up of exceptionally able men with long experience in industrial relations and it dealt vigorously and realistically with the situation before it.

The second period of governmental activity in the creation of labor adjustment boards may be said to have been initiated by Senator Wagner. Because of what he had learned as chairman of the National Labor Board he introduced last winter his labor-disputes bill, defining with particularity the employer's duties as to collective bargaining, banning company unions and creating a labor adjustment board. This bill failed of passage. In its stead Congress passed Public Resolution No. 44 which was signed by the President on June 19. This authorized the President to create boards to investigate controversies arising under 7-a or which are in danger of affecting interstate commerce. Such boards were authorized to conduct elections to determine representation, and were given power to subpoena witnesses and documents.

The first to be set up under this act was the Longshoremen's Board created to arbitrate the questions involved in the San Francisco strike. The second was the Steel Labor Relations Board appointed onJune 28 to deal with matters involved in the threatened strike in that industry. The third was the National Labor Relations Board created by executive order on June 29, and the fourth was the new Textile Board appointed in accordance with the recommendation of the Winant Committee Report which ended the textile strike. In all four cases, though the law does not require it, the President followed the practice of selecting non-partisan representatives of the public. The period of boards representing interests appears to be definitely over. In every case the President has chosen men of exceptional qualifications for this type of work.


Kay Davis, University of Virginia, © 2001-2003