1941: Labor Arbitration

National Defense Mediation Board.

The wave of strikes, affecting both defense and non-defense industries, which featured the year 1941 caused the creation of new machinery for settling labor disputes not long after the beginning of the year. Although the administration in Washington had been consistently sanguine over the capacity of existing governmental agencies to keep peace in industry, numerous and prolonged stoppages in machine shops, airplane factories and shipyards aroused both Congress and the public and forced the President to act. On March 19, the President, acting under the terms of an Executive Order, set up the National Defense Mediation Board and appointed its members. The Board was composed of representatives of the employers, the unions and the public. The President designated Clarence A. Dykstra, president of the University of Wisconsin, as its first chairman. He served until mid-June when he was succeeded by William H. Davis, a New York patent lawyer and chairman of the New York State Mediation Board.

The powers under which the Board operated were vague and ill-defined. It was obviously not empowered to engage in compulsory arbitration. To force the discontinuance of existing strikes or to prevent strikes from being called, it had to rely mainly on its ability to win the support of public opinion. Cases came before the Board only on the certification of the Secretary of Labor. Disputes, therefore, as a rule passed through several stages of mediation and conciliation before they reached the Board. And it did not possess, at its inception, a set of principles to assist it in arriving at an effective and generally acceptable war labor policy.

Closed Shop Issue.

On the matter of labor policy the Board made a vital decision in its first days. It agreed then not to seek general principles but to judge each case on its merits. Aside from the fact that this procedure tacitly, if not explicitly, involved the development and application of general principles, it exposed the Board to the danger of making contradictory decisions on the same or similar issues and thus weakening the Board's authority with first one and then the other of the parties to a dispute. This was the result of the Board's method of dealing with the most difficult and contentious issue of the closed shop. In several cases, in which the closed shop was the principal issue, the Board, much against the employers' opposition, undertook not only to mediate the question but in substance brought the full measure of its prestige to bear on the employers and forced them to accept the closed shop itself or some modification of that device. But on Nov. 11, the Board by a majority vote ruled against the United Mine Workers in their demand for a closed shop in the coal (captive) mines owned and operated by the steel companies. The decision was immediately followed by the resignation of the C.I.O. members of the Board, the refusal of all C.I.O. unions to submit cases to the Board, and a more or less general boycott of defense agencies by C.I.O. advisers and officials. These were obviously effective measures and they shortly brought to an end the brief life of the Defense Mediation Board.

Wage Issue.

The wage issue raised similar difficulties. Beginning early in the year unions made demands for considerable advances in wage rates. Employers, while not averse to raising wages somewhat, opposed the increases demanded on the score that they were excessive and would, if unregulated, lead to inflationary price movements. Public opinion, likewise, was directed toward the threat of inflation that inhered in unrestrained wage rises. But with wages as with the closed shop the Board was unwilling to take a position on the basic policy of wages and, hence, became a party to the wage policies pursued by organized labor during 1941.

Government Intervention.

On the whole, the Board's experience was not a happy one. Although it participated in settling many strikes, the aggregate number of stoppages and the time lost through them remained high in the face of the Board's activities. At the same time the Board was severely criticized for the part it played in cases that terminated in the Government's taking over plants and operating them. In the case of the North American Aviation Company, manufacturer of war planes, the Government seized the plant because of a strike called while the dispute was under consideration by the Board. Government intervention in this form was roundly condemned by many union spokesmen, though it was generally approved by public opinion. In the Federal Shipbuilding case, on the other hand, the shipyards were taken over and operated by the Government because the company, a subsidiary of the United States Steel Corporation, refused to accept the Board's decision ordering the company to enforce a modified form of the closed shop. Again, in the case of Air Associates, the Board, acting on the complaint of the union that the firm's management was antagonistic to union labor, had the plant seized by the Government and returned to its owners only when the company's president retired from his position.

Proposed Legislation.

These episodes and the disruptive effects of the large number of strikes turned the attention of Congress to new legislation. Many proposals were made in both houses. Some proposed the outright prohibition of strikes. Others prohibited strikes during specified periods, generally designated cooling-off periods. Still others were aimed more generally to regulate the activities of labor unions. But, although there was considerable sentiment for legislation, the Administration was opposed to legislative action and successfully barred the passage of new laws.

The upshot of these various circumstances was that the Defense Mediation Board was forced to go out of business. The entrance of the United States into World War II, after the Japanese attack on Pearl Harbor on Dec. 7, radically changed the complexion of labor relations and afforded employers, labor and Government an opportunity to reconsider the machinery of arbitration and mediation. Accordingly the President called a joint conference of employers and unions to propose a plan for preventing strikes and lockouts. The conference split on the issue of the closed shop. But it reached a partial agreement on the appropriate features of some labor agency and thereby paved the way for the creation of a new war labor board to replace the National Defense Mediation Board.

Captive Coal Mine Dispute.

The issue of the closed shop in the captive coal mines (the rock on which the Defense Mediation Board split) was not settled by the Board's findings. The miners' union ordered its members in the captive mines on strike and the whole dispute then passed into the hands of the President. The strike defied all of the President's efforts at a settlement. His handling of the matter also introduced new features into public arbitration. Although the President had stated in a published communication to John L. Lewis that no public agency would force a man to join a union against his will, he was persuaded by the continuance of the strike to set up a new board to arbitrate the closed shop issue in this particular case. The members of the board were Fairless, president of the United States Steel Corporation, Lewis, president of the United Mine Workers, and Steelman, chief of the United States Conciliation Service. In order to make this an unofficial agency, Steelman resigned his position for the period of the arbitration, to resume it again at its close. The members of the Board divided and Steelman, in the deciding vote, granted the captive coal miners the closed shop.

Railroad Wage Dispute.

Similar difficulties in performing the duties of composing labor disputes were encountered by the Railroad Fact-finding Board, appointed by the President in the early fall of 1941. This board was created, under the provisions of the Railway Labor Act, to avert a strike authorized by the railroad unions in furtherance of their demand for wage increases. After lengthy hearings and scrutiny of evidence, the Board issued its report proposing increases averaging 12.5 per cent, with greater advances for the lower- than for the higher-paid employees, and recommending that the increases terminate at the end of 1942. All railroad unions rejected the Board's findings and, after taking a strike vote, ordered a strike for early December. Again the White House intervened. It sought to bring railway management and the unions together for further negotiation. When these efforts failed to produce a settlement, the Board was recalled to Washington. It refused to review its findings of fact, but consented to act as an intermediary between the parties. This method succeeded and a new wage settlement was arrived at which raised the average increase to approximately 15 per cent. While a strike was thus averted, this experience did much to damage the prestige of railroad arbitral procedure and generally to impair the authority of public arbitration agencies. See also CONGRESS OF INDUSTRIAL ORGANIZATIONS; LABOR LEGISLATION.