106 F.2d 254 (3rd Cir. 1939), 6789, Titan Metal Mfg. Co. v. N.L.R.B.

Docket Nº:6789.
Citation:106 F.2d 254
Case Date:July 20, 1939
Court:United States Courts of Appeals, Court of Appeals for the Third Circuit

Page 254

106 F.2d 254 (3rd Cir. 1939)




No. 6789.

United States Court of Appeals, Third Circuit.

July 20, 1939

Writ of Certiorari Denied Dec. 4, 1939.

M. Ward Fleming and W. Bruce Talbott, both of Bellefonte, Pa., for petitioners.

Charles Fahy, General Counsel, Robert B. Watts, Associate General Counsel, and Laurence A. Knapp, Allen Heald, Owsley Vose, and Malcolm F. Halliday, all of Washington, D.C., for respondents./p> Before BIGGS, CLARK, and BUFFINGTON, Circuit Judges.

CLARK, Circuit Judge.

The protagonists in the field of labor economics concede, as they must, that it does take two to make a bargain. As to one of the two, the other has allowed its sense of advantage to overcome its sense of reality. A restoration of balance has raised the problem of the 'so-called company union'. The use of the expression outlines the controversy. One side would substitute 'correctly' for the conventional 'so' and the other prefers the contrasting 'employees association'. The emphasis follows the point of view. It is interesting to note that the famous section 7(a)(2) of the National Industrial Recovery Act, 15 U.S.C.A. 707(a), subsection 2 uses the phrase 'company union', that section 77B of the Bankruptcy Act, as amended, 11 U.S.C.A. 207, subsection (l), prefaces it with the 'so-called' (l) of our earlier sentence, and that the Wagner Labor Disputes Act, 29 U.S.C.A. § 158, subsection 2 makes no mention of it. In any event the task entrusted to the National Labor Relations Board first, 29 U.S.C.A. § 159, and to this Court second, 29 U.S.C.A. § 160, subsection (e) is tantamount to determining which appellation more accurately fits a particular grouping of employees.

Some find in the history of company unions the gradual disintegration of another 'noble experiment'. The movement originated (circa 1898) in the desire of some few socially minded employers (notably Filene and Rockefeller, Jr.) to afford their workers some form of what they were pleased to call industrial democracy. It continued under the impulse of a patriotic cooperation in winning the war. Its widespread adoption coincident with the National Industrial Recovery Act, 15 U.S.C.A. § 707(a), subsection 2, above cited, called attention to its possible negation of that essential characteristic of a bargain mentioned at the beginning of this opinion. The extreme pros and cons are best set forth in the following books and pamphlets, pro-- Burton, Employee Representation (V Human Relations Series); con-- Dunn, Company Unions; Brooks, Unions Of Their Own Choosing; Company Unions, A Study Outline with Special Reference to the I.L.G.W.U., issued by Educational Department, International Ladies Garment Workers Union (pamphlet); whereas more impartial studies are to be found in Leiserson, Company Unions, Vol. 4 Encyclopaedia of the Social Sciences, p. 123; Labor and The Government (Twentieth Century Fund); Cummins, The Labor Problem in the United States; Characteristics of Company Unions, 1935, Bulletin No. 634, United States Department of Labor, Bureau of Labor Statistics (pamphlet); Fairley (Professor, Massachusetts Institute of Technology), The Company Union in Plan and Practice (pamphlet). It may not be inappropriate to quote briefly from Professor Cummins: 'Among the

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movements instituted by the employers in an effort to improve their industrial relations, employee representation may probably be regarded as the most significant. It has assumed larger proportions than any other, has gained the support of a larger number of employees, and has probably been looked to by a larger number of people as offering the greatest hope of a satisfactory solution to the labor problem. Organized labor has reenforced this impression by reserving its biggest guns for this scheme, giving every indication of regarding it as one of the gravest menaces to trade unionism that has yet appeared on the industrial horizon '. Cummins, The Labor Problem in the United States, p. 430.

'While it is a precarious undertaking to try to measure motives, it nevertheless seems fairly apparent that one cause for the spread of employee representation is the employer's desire to frustrate the union. In passing it should be mentioned that there are probably some employers who have no thought of the union in mind, or at least who think of it only in the vaguest way. In some cases the union has never threatened and there was not the slightest prospect of union organization when the plan was introduced. On the other hand, it is a matter of observation that the presence of a union or the threat of one has played an important part in the development of employee representation. * * * Employers as a class have furnished ample evidence that they do not yearn after trade unions. They are, however, shrewd enough to see that the trade union arose in response to an insistent desire on the part of workers to bargain collectively; and though they may hold ever so stubbornly to the position that the business is theirs and that no outsider has a right to interfere, they are realists enough to see that they cannot escape interference, however unjustifiable, on the part of their employees and that consequently their best bet is to beat the unions at their own game. This is where employee representation comes in. It allows the employees to bargain collectively to some degree at least, and if presented to them in the proper way, may even convince them that their interests will be as well protected by an organization of workers in their own plant as by an organization of workers in the entire craft or industry, perhaps even better protected. At any rate the thing has seemed worth trying to a good many employers '. Cummins, The Labor Problem in the United States, pp. 437, 438.

A temperate summary of the objections to company unionism is contained in Section 3 of Professor Fairley's pamphlet, pp. 17-25. See also Dunn, Company Unions, Chapter 12, Labor's Case Against The Company Union, pp. 175-183; Labor and The Government (Twentieth Century Fund), Chapter 13, Problems in Collective Bargaining, subsection 2, Company Unions, pp. 325-331; Employer Interference With Lawful Union Activity, 37 Columbia Law Review 816, 828 (note). But see contra, Burton, Employee Representation (V Human Relations Series), Chapter 13, Terms and Conditions of Employment, p. 247.

Some apprehension of evil seems to have permeated the Congress contemporaneously with the decline of the reason for patriotic fervor. As often in the give and take of the democratic process, the therapeutic effort of the legislative body (the Congress) stopped short of a major operation. Company unions or employee associations have not been outlawed, Employer Interference with Lawful Union Activity, 37 Columbia Law Review 816, 829 (note), but have been regulated. A comparison of language indicates that the lapse of time has narrowed the gulf between limitation and prohibition.

The first regulatory law and the first administrative board were the Railway Labor Act and the Board created thereunder, 41 Stat.p. 456, 45 U.S.C.A. § 131. This enactment had a pathetic legal history. It received its first blow in our own Circuit, Pennsylvania R.R. System and Allied Lines Federation v. Pennsylvania R. Co., 3 Cir., 1924, 1 F.2d 171, and its coup de grace from the Supreme Court's affirmance thereof, Pennsylvania Railroad System & Allied Lines Federation v. Pennsylvania R. Co., 1925, 267 U.S. 203, 45 S.Ct. 307, 69 L.Ed. 574; Effect of the Railway Labor Act of 1926 Upon Company Unions, 42 Harvard Law Review 108 (note); Labor Law-- The Present State of Section 7(a), 21 Virginia Law Review 677 (note); Section 7(a) of the N.I.R.A.: An Attempt to Equalize Bargaining Power, 34 Columbia Law Review 1529, 1537 (Legislation). These decisions have been questioned in a note entitled, Enforcement of Duties Under the Labor Provisions of The Transportation Act, 38 Harvard Law Review 374. As often, the Congress speedily reenacted what the Court had denied to be

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its original intention. An amendment of May 20, 1926 inserted the 'teeth' required by the school of dentistry to which the Justices of the Supreme Court, but not the editors of the Harvard Law Review, belonged, 45 U.S.C.A. § 151 et seq. The aforesaid grinders received the blessing of their sponsors in the case of Texas & New Orleans R. Co. v. Brotherhood of Ry. & S.S. Clerks, 281 U.S. 548, 50 S.Ct. 427, 74 L.Ed. 1034. The pertinent section is subsection 3 of section 2 of the Act and is to be found in Section 152 of 45 U.S.C.A. It reads as follows: 'Representatives, for the purposes of this chapter, shall be designated by the respective parties without interference, influence, or coercion by either party over the designation of representatives by the other; and neither party shall in any way interfere with, influence, or coerce the other in its choice of representatives. Representatives of employees for the purposes of this chapter need not be persons in the employ of the carrier, and no carrier shall, by interference, influence, or coercion seek in any manner to prevent the designation by its employees as their representatives of those who or which are not employees of the carrier'.

In interpreting this language, Mr. Chief Justice Hughes described the essence of a bargain in the cogent language often quoted in National Labor Relations Board briefs, Texas & New Orleans R. Co. v. Brotherhood of Ry. & S.S. Clerks, 281 U.S. 548, above cited, at page 559, 50 S.Ct. 427, 74 L.Ed. 1034.

The economic orgy of 1929 required the economic regeneration of 1933. Among the bromos administered was the National Industrial Recovery Act. Section 7(a), 15 U.S.C.A. 707(a), subsection 2,...

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