with the same parent body. The annals of the American Federation of Labor are replete with conflict over the demarcation of craft lines. Often these conflicts have been permitted to continue for years in the hope that the contesting parties would amicably resolve them without the necessity of a definite decision by the parent organization. Many of those conflicts exist today. The proposed amendment would require the Board to decide these conflicts or, in the alternative, to leave thousands of employees without representation. Again, there is no assurance that the decisions of the Board as to what constitutes a craft would coincide in all cases with the determinations of the American Federation of Labor. Nor is there any assurance that the determinations of the American Federation of Labor or the Board would coincide with the determination of the courts. Such differences as are bound to arise would inevitably produce confusion among employees desirous of collective bargaining. And the ultimate effect would be to vest in the courts power to determine in minute detail the charter claims of the various American Federation of Labor unions. (3) The proposal would in many cases make collective bargaining not only impossibly complicated but wholly ineffective. Section 8 (5) of the act makes it an unfair labor practice for an employer to refuse to bargain collectively with the representatives designated by a majority of his employees "in a unit appropriate for such purposes." Since each group of craft employees in the plant is automatically made an appropriate bargaining unit by S. 1000, no union organized on a broader basis than a single craft can, as such, bargain collectively at all. A union so organized, in approaching the employer to bargain, must demonstrate that it has been designated by a majority of the employees in each craft unit included within its jurisdiction. In a large plant the task placed upon a union of deciding which is a craft group would be impossibly burdensome. Further, even if the union could make some determination of these issues, the chances of the employer agreeing with the union's contention would be most remote. And even if agreement were reached there would remain a strong possibility that the units finally agreed upon would not conform to the decisions of the Board or the courts upon the issue. We think it is safe to say that in numerous large plants the effect of the proposed amendment would be to prevent all collective bargaining in advance of a decision by the Board, subject to review in the courts under section 10, upon the appropriate bargaining units.

Again, once the manifold appropriate units were determined, the union would have to prove a majority in each separate unit. Very likely as to some of the appropriate units, this could not be done. The result would be to leave important gaps in the union's ranks which would sharply reduce its bargaining power.

Further, and most important, the proposal would give a tremendous impetus to splitting the employees into many small bargaining groups. This would make the obligation of an employer, genuinely interested in collective bargaining, exceedingly troublesome, for he would be forced into numerous separate negotiations with the different groups. As was stated at the hearings on the Wagner bill by Francis Biddle, former chairman of the old National Labor Relations Board:

"If the employees themselves could make the decision [concerning the unit] without proper consideration of the elements which should constitute the appropriate units, they could in any given instance defeat the practical significance of the majority rule; and by breaking off into small groups, could make it impossible for the employer to run his plant."

At the same time the proposal would enable the unscrupulous employer to play one group against another and thereby nullify any effective collective action. Under S. 1000 the unity essential to collective bargaining, preserved in the act by majority rule, would largely disappear. Again, this danger was foreseen by William Green, who testified at the hearings before this committee in 1935:

"The attempt to bargain with a number of groups not only destroys the stability but it makes possible the control of the employer over the organization of his employees."

It is true that the amendment provides that "two or more units may, by voluntary consent, bargain through the same agent or agents with an employer or employers, their agent or agents." This would not solve any of the foregoing problems. For despite this provision it would still be necessary for

54 Hearings before Senate Subcommittee on Education and Labor, 1935. p. 82. 55 Hearings before Senate Subcommittee on Education and Labor, 1935, pp. 119-120,

the union, the employer, the Board, and the courts to make a determination of the separate appropriate units in each case. It would still be necessary for the union to have a majority in each unit. It would do little to retard the trend toward splitting into small groups. And in any event it would be voluntary with the employer whether he wished to bargain on the basis of combined units or whether he wished to insist upon separate bargaining for separate units.

(4) Finally, the proposed amendment would, in the overwhelming majority of cases, thwart rather than carry out the desires of the employees. There are comparatively few industrial establishments which are organized today upon the basis contemplated by the amendment, with every possible craft group separately organized as a separate bargaining unit. And there are countless establishments, organized by the American Federation of Labor, the Congress of Industrial Organizations, and independent organizations which include more than one craft group in the same organization.

This is well illustrated by the fact, pointed out above, that American Federation of Labor unions have asked the Board for industrial units in 210 cases up to March 1, 1939, whereas they have requested craft units in only 100 cases. Congress of Industrial Organizations unions have asked for industrial unions in numerous plants where no other union had any members. In addition there are a substantial number of cases in which unions affiliated with neither parent organization have requested industral unts.

In this connection an analysis of the structure of labor organization in this country is revealing. As far back as 1915 one student of labor relations estimated that out of 133 national unions only 28 were strictly craft unions." Examination of the constitutions of 85 out of the 102 national unions reported in good standing by the Executive Council of the American Federation of Labor in 1938 reveals that not more than 12 unions, with a total membership of 25,800, are limited in their jurisdiction to a strictly craft group:67

1 Membership figures are based on the Report of the Executive Council of the American Federation of Labor to the Fifty-eighth Annual Convention, Houston, Tex., Oct. 3, 1938, pp. 12-13.

A craft union was defined in the above tabulation as consisting of workers requiring identical skill and training who carry through to completion a particular whole process. The following were classified as craft unions: American Wire Weavers' Protective Association, Coopers' International Union of North America, Diamond Workers' Protective Union of America, International Association of Heat and Frost Insulation and Asbestos Workers, International Association of Sideographers, International Spinners Union, International Union of Journeymen, Horseshoers of the United States and Canada, International Wood Carvers' Association, Pattern Makers League of North America, Sheep Shearers' International Union of North America, Window Glass Cutters' League, and Wood, Wire and Metal Lathers' International Union

In spite of this obvious demand for industrial units upon the part of employees and labor organizations, S. 1000 would require in every case the breakdown into separate craft groups, even though not a single employee wished to organize in that way and even though no organization formed along craft lines existed in the establishment.

It is important to point out in this connection that no support for the proposal in S. 1000 can be drawn from the Railway Labor Act. It is true that the Railway Labor Act provides that "the majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this Act." However, conditions in the railroad industry differ materially from conditions throughout industry generally. In the railroad industry there has been a long history of self-organization, the number of possible crafts or classes is relatively limited, and craft

56 T. Glocker. Amalgamation of Related Trades in American Unions, 5 American Economic Review (1915), 554. 57 The 16 unions not included consist of organizations composed solely of Government, railroad, and air transportation employees, to which groups the National Labor Relations Act is not applicable.

144458-39-pt. 3-10

lines are comparatively well marked out. Even under these circumstances the National Mediation Board, which administers the Railway Labor Act, has had to face many difficult problems in setting the limits of a "craft or class." No comparable situation exists throughout industry generally. Not only are there innumerably more variations possible, but in most sections of industry no definite craft lines have been drawn and none are likely to be drawn in the near future.

Senator Wagner has well said that the National Labor Relations Act does not and should not place "the stamp of governmental favor upon any particular type of union." For the reasons stated above we submit that the Board's decisions have interpreted the Act in this spirit. The proposal embodied in S. 1000, however, would force all employees into craft units regardless of their wishes. We believe that legitimate craft union interests can be fully protected without thus jeopardizing the whole structure of collective bargaining. D. THE PROPOSAL IN S. 1264 THAT WHEREVER A MAJORITY OF THE EMPLOYEES IN ANY CRAFT GROUP DESIRES A CRAFT UNION TO REPRESENT THEM SUCH CRAFT EMPLOYEES SHALL CONSTITUTE A SEPARATE APPROPRIATE BARGAINING UNIT

As stated above, S. 1264 contains a proviso to section 9 (b) of the act reading as follows:

"Provided, That if the majority of any craft union within a plant or employer unit signify its wish for the craft unit, the Board shall designate the craft unit as the unit appropriate for the members of that union."

It is not entirely clear what this proviso is intended to mean. Taken literally it would mean that if a majority of the members of a craft union expressed a preference for a craft unit, the Board would have to set up a unit composed of the members of the craft union. So interpreted the provision would make an appropriate bargaining unit out of the members of a craft union, excluding from the unit other employees in the same craft group who were not members. Such a provision is inconsistent with principle of majority rule and is wholly unworkable. Collective bargaining cannot be successful upon the basis of an appropriate bargaining unit which includes some of the employees engaged in a particular type of work and excludes others performing precisely the same work in the same plant. All employees having identical interests must be represented by the same bargaining agent.

68

It is possible that the provision in S. 1264 is intended to mean that if the majority of employees in any craft group within a plant or employer unit signify their wish for a separate craft unit, the Board shall designate such a craft unit as the unit appropriate for the employees in such group. Such a proposal is similar to that introduced in the Senate by Senator Walsh on Apr. 7, 1937, which provided as follows:

"Provided, however, That in any case where a majority of the employees of a particular craft shall so decide, the Board shall designate such craft as an appropriate unit for the purposes of collective bargaining."

It will be noted that this proposal establishes a principle not essentially different from that now applied by the Board in the Globe doctrine. There are certain objections, however, to its enactment into a hard and fast rule. The most serious objection is that already indicated, namely, that the designation of an appropriate bargaining unit involves a multiplicity of factors and the establishment of an inflexible formula would deprive the Board of power to adapt the rule to various unforeseeable circumstances.

Several exceptions, noted above, which the Board has already had occasion to make in the application of the Globe doctrine-exceptions which the Board considers fully justifiable-well illustrate this point. Thus where the craft employees have joined with other employees in negotiating a contract upon a plantwide basis we see no reason for designating the craft group as a separate unit during the pendency of the contract, assuming the term of the contract to be a reasonable one.

The Board has attempted to handle the problem in a manner best calculated to carry out the purpose of the act. We are glad to have the committee consider whether, in the light of the Board's experience, legislation which would resolve some of the questions facing the Board is feasible and desirable.

See the discussion of the proposal to abolish majority rule, supra, sec. III.

59 S. 2108, 75th Cong., 1st sess. A similar amendment was introduced into the House at the same time by Representative Dies (H. R. 6143, 75th Cong., 1st sess.).

E. PROHIBITION OF AN APPROPRIATE UNIT EMBRACING THE EMPLOYEES OF MORE THAN ONE EMPLOYER

S. 1000 contains a proviso to section 9 (b) that "an appropriate unit shall not embrace employees of more than one employer."

Section 9 (b) of the act in its present form provides that the appropriate bargaining unit shall be "the employer unit, craft unit, plant unit, or subdivision thereof." Section 2 (2) of the act defines employer to include "any person acting in the interest of an employer, directly or indirectly." Under these provisions the Board has included within a single unit the employees of more than one employer (as that term is used in its ordinary sense) in two types of situations: (1) Where two or more companies, generally affiliated, are operated as a single business enterprise, with the direct control of labor relations vested in a single source, and where the other facts in the case make the broader unit advisable, the Board has included the employees of all the companies in a single bargaining unit.

(2) Where a group of employers engaged in the same industry have delegated to a trade association or other employers' organization the right to bargain collectively with a labor organization representing the employees, and where the other factors in the case make a broader unit advisable, the Board has considered the trade association or employers' organization to be an "employer" within section 2 (2) of the act and has established a single employer unit consisting of all the employees of the members of the trade association or employers' organization.

S. 1000 would apparently prohibit the Board from establishing the broader unit in either of the foregoing situations, regardless of the circumstances of the We believe that a modification of this sort would be inadvisable.

case.

1. AFFILIATED COMPANIES AS A SINGLE UNIT

Both American Federation of Labor and Congress of Industrial Organizations unions have frequently requested the Board to find that two or more affiliated companies, operated as a single enterprise, constitute a single appropriate bargaining unit. Typical of such cases is Matter of Art Crayon Company. In that case there were two separate corporations involved, one engaged in the manufacture of crayons, chalks, and kindred products, and the other engaged in the manufacture of paints, water colors, oils, and similar artists' supplies. One corporation owned a majority of the stock in the other, and officers and directors were interlocking. Each corporation had a separate pay roll and filed separate tax returns. Each corporation had a separate management, but one individual, who was the secretary of each, handled labor controversies arising with respect to both. Both corporations occupied space on the same floor of the same building; all employees used the same entrance, the same telephone, and the same time clock. Although separate books were kept for the two corporations, one had no bank account, all its funds being endorsed over to the other and all its disbursements being made by check of the other. A majority of the employees of the two corporations were members of a single labor organization. Finding that the ultimate control of the labor policies of both corporations rested in the same hands, the Board ruled that the employees of both corporations constituted a single bargaining unit.

62

Other cases of the same sort include Matter of Mackay Radio Corporation," where the Board included in one unit the employees of two Mackay companies operating as a single enterprise; Matter of Postal Telegraph Company, where the Board found the employees of 35 related companies comprising the Postal Telegraph System to constitute a single unit; and Matter of C. A. Lund Company, where the employees of two related companies operating plants 20 miles apart were included in the same unit.

We think it plain that in the cases just cited, and in numerous similar situations, the employees of all the related companies have identical interests and

7 N. L. R. B. 102.

15 N. L. R. B. 657.

9 N. L. R. B., No. 98.

36 N. L. R. B. 423.

The mere fact that two or more companies are interrelated does not necessarily mean that the Board will include the employees of all companies in a single unit, where other factors require a different result. See Matter of Pennsylvania Salt Manufacturing Co., 3 N. L. R. B. 741.

identical problems. Under such circumstances the corporate structure has no relation to collective bargaining realities. In this type of situation collective bargaining can often best be effectuated through disregarding the corporate fiction and including all the employees in a single unit or in several units cutting across corporate lines. We believe that discretion in this matter should be left to the Board.

2. EMPLOYERS' ORGANIZATIONS AS A SINGLE UNIT

The Board has decided seven cases in which requests were made that all the employees of certain companies, which were members of a trade association, be included in a single bargaining unit. Two of such requests were made by American Federation of Labor unions and five by Congress of Industrial Organizations unions."

65

Typical of such cases is Matter of Shipowners Association of the Pacific Coast, the first to be decided. That case involved the longshoremen in all the ports of the Pacific coast. The facts, which were undisputed, showed that in 1934 the Pacific Coast District of the International Longshoremen's Association, affiliated with the American Federation of Labor, called a strike of all the longshoremen on the Pacific coast in an attempt to obtain a coast-wide agreement for the longshoremen; that during the strike the longshoremen rejected several proposed settlements on the ground that a coast-wide agreement was not provided for; that the strike was settled by provision for arbitration, in which proceedings all the employers on the coast were represented by one attorney and all the longshoremen by one set of representatives; that following arbitration an agreement was effected between the International Longshoremen's Association and regional associations of employers which covered all the longshoremen on the coast; that the agreement was renewed in 1935; that a new agreement on a coast-wide basis was negotiated in 1937; that, in short, the history of bargaining on the coast revealed a persistent effort by longshore labor to obtain collective bargaining on a coast-wide basis. At the same time the employers on the coast had for a long time operated as a single unit, first through four regional associations and then through a single coast-wide association. These associations had full power to establish labor policies and enter into labor agreements on behalf of their members.

Until the summer of 1937, the coast-wide bargaining was conducted by the International Longshoremen's Association, affiliated with the American Federation of Labor. In this connection the Board pointed out, with reference to certain agreements supplementing the contract of 1937, that "several small locals rejected these agreements, but they were bound by the majority vote." Thus, before the longshoremen transferred their allegiance to the Congress of Industrial Organizations, the American Federation of Labor union had a practice bargained as a coastwide unit and had not only recognized, but had insisted upon, the appropriateness of that unit.

Under these circumstances the Board found that all longshoremen on the Pacific coast employed by members of the employer associations constituted a single appropriate unit. The Board said:

"The numerous factors which have been pointed to as indicating that the coast unit is the one which will best insure to the longshoremen the full benefit of their right to self-organization and to collective bargaining, are all reflections of the organization of the employers. The history of bargaining and of the longshoremen's organizations is a vivid portrayal of the experiences of the longshoremen as they learned that, since their employers were acting together on a coast basis, they, too, would have to build a coast organization which would parallel the organization of the employers. The desires of the men for a coast unit are the result of their failures when they acted on a port basis, and their success when they acted with their fellow longshoremen on the coast. The imperative need of the longshoremen for the coast unit and the dangers of smaller units arise because the companies on the Pacific coast which use their labor are organized on a coast basis"

Other cases in which the Board has found a single unit composed of employees of members of a trade association are Matter of Mobile Steamship

65 The cases are cited infra. One of the American Federation of Labor and four of the Congress of Industrial Organizations requests were granted. The other American Federation of Labor and the other Congress of Industrial Organizations request was denied. 68 7 N. L. R. B. 1002.