1938: Labor Arbitration

Operation of the Railway Labor Act.

The most highly developed machinery of mediation and arbitration in American industry exists in the railroad industry, where the Railway Labor Act provides the procedure for the settlement of labor disputes. This machinery was invoked as the result of a demand for a 15 per cent reduction in the rates of pay of railroad employees, made by the carriers on May 12, 1938. Negotiations between the management and the unions failed to produce an agreement. In accordance with the requirements of the Railway Labor Act, the National Mediation Board attempted to mediate the dispute. This, too, was unsuccessful, and the Board proposed that the parties submit the question to arbitration. The carriers were willing to arbitrate, but the unions declined. On Aug. 31, the Board formally notified the parties of the termination of its services. The effect of this notice was to create a period of truce of 30 days, during which neither party could take any action. With the formal notice from the Board, the carriers notified the unions that the reduced wage scales would become effective Oct. 1. The unions thereupon took strike votes and, when the votes were counted, announced that they would call a nation-wide strike unless the notices of a wage-cut were withdrawn. As the next step in this elaborate procedure, the National Mediation Board informed the President of the United States of the existence of an emergency; and the President, under the powers of the Railway Labor Act, appointed the Railroad Emergency Board on Sept. 27, 1938.

This Board is neither an arbitration nor a mediation agency. Its function is to weigh the facts and to report its findings within 30 days. The members of the Board — Walter P. Stacy, Chief Justice of the Supreme Court of North Carolina; James M. Landis, Dean of the Harvard Law School; and Harry A. Millis, Professor of Economics at the University of Chicago — held public hearings at which representatives of the roads and the employees and other interested parties appeared and presented their cases. On Oct. 29, the Board published its findings and the conclusion that 'no horizontal reduction upon a national scale of the wages of railway labor should be pressed by the carriers at this time.' A few days later, Nov. 4, the roads withdrew their demand.

Railroad Boards of Adjustment.

On the railroads less important disputes are constantly handled by Boards of Adjustment, composed of representatives of employees and management. If these are unable to agree, they may, and generally do, submit the issue to an arbitrator jointly chosen by the two parties. In this industry, therefore, and on commercial air lines, which were brought under the provisions of the Railway Labor Act in 1936, the procedures of negotiation are in substance fixed by the law in such a way as to avert strikes.

United States Conciliation Service and Growth of Mediation.

For the remainder of American industry, such arbitration and mediation machinery as exists is much more informal. The most active mediating agency in the country is the United States Conciliation Service, a division of the United States Department of Labor. During the year ending June 30, 1938, the Conciliation Service intervened in 4,231 situations involving 1,618,000 workers. Of the activities of the various state mediation services, which are to be found in the principal industrial states, there is no adequate record. The National Labor Relations Board is a law-enforcement agency and does not consider itself a board of arbitration. In the exercise of its functions, however, it settles many complaints before they reach the stage of a decision. Thus for the year ending June 30, 1938, the Board reported that settlements in compliance with the Labor Relations Act were obtained in 4.621 cases, or 52.2 per cent of the total cases closed. The increase in the unionization of industry and the growth of collective agreements has extended the use of arbitration in American industry. Under the older collective arrangements such as have for many years existed in the men's and women's clothing and hosiery industries, there is permanent and continuous arbitration machinery supported by the employers and the unions. Under the more recent agreements, arbitration is employed only occasionally and in the settlement of particular controversies. But it is clear that arbitration of industrial disputes has been rapidly spreading through industry.

Federal Maritime Labor Board.

Frequent strikes in the maritime industry and the disputes arising out of the conflicts between the A.F. of L. and the C.I.O. unions led to the creation of the Federal Maritime Labor Board, by an amendment to the Merchant Marine Act of 1936, approved June 23, 1938. The primary function of this Board is mediatory, and it can arbitrate only with the consent of the two parties to the dispute.

Since 1938 was a relatively quiet year, the mediation and arbitration facilities of the country were exposed to no severe test. Should the number of strikes again equal or approach the levels of 1936-37, public opinion may well demand a general arbitration law, applicable to all industry, similar in its provisions to the Railway Labor Act. See also RAILROADS; TRANSPORTATION: Railroads.