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National Labor Board

National Labor Board

Overview
The National Labor Board (NLB) was an independent agency of the United States Government established on August 5, 1933 to handle labor disputes arising under the National Industrial Recovery Act
National Industrial Recovery Act
The National Industrial Recovery Act , officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 (Ch. 90, 48 Stat. 195, formerly...

 (NIRA).

The American labor movement, encouraged by the protections guaranteed under Section 7(a) of the National Industrial Recovery Act
National Industrial Recovery Act
The National Industrial Recovery Act , officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 (Ch. 90, 48 Stat. 195, formerly...

 (NIRA), undertook a wave of organizing not seen in almost two decades. A series of strikes
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...

 overtook the country in the summer of 1933.

The NIRA established the National Recovery Administration
National Recovery Administration
The National Recovery Administration was the primary New Deal agency established by U.S. president Franklin D. Roosevelt in 1933. The goal was to eliminate "cut-throat competition" by bringing industry, labor and government together to create codes of "fair practices" and set prices...

 (NRA), and General Hugh S. Johnson
Hugh Samuel Johnson
Hugh Samuel "Iron Pants" Johnson American Army officer, businessman, speech writer, government official and newspaper columnist. He is best known as a member of the Brain Trust of Franklin D. Roosevelt in 1932-34. He wrote numerous speeches for FDR and helped plan the New Deal...

 was named the agency's administrator.

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The National Labor Board (NLB) was an independent agency of the United States Government established on August 5, 1933 to handle labor disputes arising under the National Industrial Recovery Act
National Industrial Recovery Act
The National Industrial Recovery Act , officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 (Ch. 90, 48 Stat. 195, formerly...

 (NIRA).

Establishment, structure and procedures


The American labor movement, encouraged by the protections guaranteed under Section 7(a) of the National Industrial Recovery Act
National Industrial Recovery Act
The National Industrial Recovery Act , officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 The National Industrial Recovery Act (NIRA), officially known as the Act of June 16, 1933 (Ch. 90, 48 Stat. 195, formerly...

 (NIRA), undertook a wave of organizing not seen in almost two decades. A series of strikes
Strike action
Strike action, also called labour strike, on strike, greve , or simply strike, is a work stoppage caused by the mass refusal of employees to work. A strike usually takes place in response to employee grievances. Strikes became important during the industrial revolution, when mass labour became...

 overtook the country in the summer of 1933.

The NIRA established the National Recovery Administration
National Recovery Administration
The National Recovery Administration was the primary New Deal agency established by U.S. president Franklin D. Roosevelt in 1933. The goal was to eliminate "cut-throat competition" by bringing industry, labor and government together to create codes of "fair practices" and set prices...

 (NRA), and General Hugh S. Johnson
Hugh Samuel Johnson
Hugh Samuel "Iron Pants" Johnson American Army officer, businessman, speech writer, government official and newspaper columnist. He is best known as a member of the Brain Trust of Franklin D. Roosevelt in 1932-34. He wrote numerous speeches for FDR and helped plan the New Deal...

 was named the agency's administrator.

Gen. Johnson had initially expressed the hope that the NIRA would be self-policing system. But that had clearly not happened, and formal governmental machinery was needed to handle the sudden wave of labor activity.

Subsequently, Johnson—acting on a joint motion from the NRA's Industrial Advisory Board and Labor Advisory Board—created the NLB. President Franklin D. Roosevelt
Franklin D. Roosevelt
Franklin Delano Roosevelt , also known by his initials, FDR, was the 32nd President of the United States and a central figure in world events during the mid-20th century, leading the United States during a time of worldwide economic crisis and world war...

 announced the NLB's formation on August 5, 1933. Roosevelt issued no executive order defining the Board's powers, duties or procedures, but he did assert that the board should 'consider, adjust, and settle differences and controversies' arising in labor disputes.

The NLB had seven members. Three members represented labor: American Federation of Labor
American Federation of Labor
The American Federation of Labor was one of the first federations of labor unions in the United States. It was founded in 1886 by an alliance of craft unions disaffected from the Knights of Labor, a national labor association. Samuel Gompers was elected president of the Federation at its...

 (AFL) president William Green
William Green (labor leader)
William Green was an American trade union leader. Green is best remembered for serving as the President of the American Federation of Labor from 1924 to 1952.-Early years:...

; United Mine Workers of America president John L. Lewis
John L. Lewis
John Llewellyn Lewis was an American leader of organized labor who served as president of the United Mine Workers of America from 1920 to 1960...

; and Leo Wolman
Leo Wolman
Leo Wolman was a noted American economist whose work focused on labor economics. He also served on a number of important boards and commissions for the federal government.-Early life:...

, formerly director of research for the Amalgamated Clothing Workers of America
Amalgamated Clothing Workers of America
The Amalgamated Clothing Workers of America was a United States labor union known for its support for "social unionism" and progressive political causes. Led by Sidney Hillman for its first thirty years, it helped found the Congress of Industrial Organizations...

 and chairman of the Labor Advisory Board of the NRA. Three members represented industry: General Electric
General Electric
General Electric Company , or GE, is an American multinational conglomerate corporation incorporated in Schenectady, New York and headquartered in Fairfield, Connecticut, United States...

 president Gerard Swope
Gerard Swope
Gerard Swope was a U.S. electronics businessman. He served as the president of General Electric Company between 1922 and 1939, and again from 1942 until 1944...

; Louis Kirstein, the vice president of Filene's of Boston
Filene's
Filene's was a Boston-based department store owned by Federated Department Stores , and May Department Stores . It operated throughout New England and in New York.-Early years:...

 (a department store); and Walter C. Teagle
Walter C. Teagle
Walter Clark Teagle , was responsible for leading Standard Oil to the forefront of the oil industry and significantly expanding the company's presence in the petrochemical field.-Biography:...

, president of Standard Oil of New Jersey. The chairman of the NLB was United States Senator Robert F. Wagner
Robert F. Wagner
Robert Ferdinand Wagner I was an American politician. He was a Democratic U.S. Senator from New York from 1927 to 1949.-Origin and early life:...

.

Although the NLB's mandate was vague, its procedures undefined and its enforcement powers nonexistent, Sen. Wagner—who had been one of the primary authors of the NIRA—was determined to make the board work along the self-policing lines previously announced by Gen. Johnson.

Initially, the NLB attempted to merely be a mediator in labor disputes. The NIRA protected the right of workers to form unions of their own choosing. And it required employers to engage in good-faith negotiations when a union had issued a demand for recognition and bargaining. More often than not, an employer's refusal to bargain was the issue. Holding representation elections, much less establishing bargaining units or determining majority status, was not even considered by the Board.

Employers, however, quickly established company union
Company union
A company union is a trade union which is located within and run by a company or by the national government, and is not affiliated with an independent trade union. Company unions were outlawed in the United States by the 1935 National Labor Relations Act, due to their use as agents for interference...

s and announced that these were the only proper representatives of the workers. Unions responded by holding strikes, demanding to be recognized as the organization of the workers' choosing and immediate negotiations. Large numbers of workers were summarily fired for striking.

The NLB quickly settled on a strategy of suggesting elections as a way of determining majority status and breaking a collective bargaining
Collective bargaining
Collective bargaining is a process of negotiations between employers and the representatives of a unit of employees aimed at reaching agreements that regulate working conditions...

 deadlock.

The Reading Formula and representational elections


The NLB's opportunity came when the Full-Fashioned Hosiery Workers Union launched an organizing drive in the summer of 1933 in the silk stocking mills around Reading, Pennsylvania
Reading, Pennsylvania
Reading is a city in southeastern Pennsylvania, USA, and seat of Berks County. Reading is the principal city of the Greater Reading Area and had a population of 88,082 as of the 2010 census, making it the fifth most populated city in the state after Philadelphia, Pittsburgh, Allentown and Erie,...

. The employers refused to recognize the union, and 10,000 workers went on strike. On August 10, 1933, the NLB mediated a settlement.

Known as the "Reading Formula," the settlement consisted of four parts: (1) That the union call off the strike; (2) That all employees be rehired immediately, without retaliation; (3) That the NLB hold elections in which the workers would vote by secret ballot for their own representatives, and that both parties would negotiate a collective bargaining agreement covering wages, hours and working conditions; and (4) That in the event of any disagreement on any matter, the parties would submit the dispute to the NLB for binding arbitration.

The Reading Formula proved useful in settling large numbers of labor disputes, including strikes in silk mills in Paterson, New Jersey
Paterson, New Jersey
Paterson is a city serving as the county seat of Passaic County, New Jersey, United States. As of the 2010 United States Census, its population was 146,199, rendering it New Jersey's third largest city and one of the largest cities in the New York City Metropolitan Area, despite a decrease of 3,023...

; silk mills in Allentown, Pennsylvania
Allentown, Pennsylvania
Allentown is a city located in Lehigh County, Pennsylvania, in the United States. It is Pennsylvania's third most populous city, after Philadelphia and Pittsburgh, and the 215th largest city in the United States. As of the 2010 census, the city had a total population of 118,032 and is currently...

; tool and die factories in Detroit, Michigan
Detroit, Michigan
Detroit is the major city among the primary cultural, financial, and transportation centers in the Metro Detroit area, a region of 5.2 million people. As the seat of Wayne County, the city of Detroit is the largest city in the U.S. state of Michigan and serves as a major port on the Detroit River...

; and coal mines in Illinois
Illinois
Illinois is the fifth-most populous state of the United States of America, and is often noted for being a microcosm of the entire country. With Chicago in the northeast, small industrial cities and great agricultural productivity in central and northern Illinois, and natural resources like coal,...

. In most cases, the union won the election.

But within months, a large number of employers refused to cooperate with the NLB. The NLB relied on enforcement of its orders through the NRA (which only had the power to remove so-called Blue Eagle industrial code approval from a manufacturer) or prosecution by the U.S. Department of Justice. These weak enforcement powers encouraged employer resistance. In July 1933, the Weirton Steel Company held a private election rather than submit to one ran and monitored by the NLB. The Budd Manufacturing Company
Budd Company
The Budd Company is a metal fabricator and major supplier of body components to the automobile industry, and was formerly a manufacturer of stainless steel passenger rail cars during the 20th century....

 established a company union, then refused to bargain with the AFL affiliate in the plant.

E.O. 6580 and representational exclusivity


To strengthen the NLB's powers vis-a-vis employers, President Roosevelt issued Executive Order 6511 on December 16, 1933.

The order ratified the Board's prior activities, including its decisions and representational elections. The order also authorized the Board to "settle by mediation, conciliation or arbitration all controversies between employers and employees which tend to impede the purpose of the National Industrial Recovery Act."

But E.O. 6511 said nothing about elections, and did not address the Board's enforcement powers.

Roosevelt issued a new order, E.O. 6580, on February 1, 1934. The order gave the Board explicit power to authorize, upon a showing by a substantial number of employees, representational elections to determine majority status. The order appeared to give the winning organization exclusive representation for employees in the bargaining unit, but this interpretation was widely contested.

Worse, Roosevelt made the off-hand public comment that the government was seeking to check the growth of company unions. This caused a firestorm of discontent among business owners, who began an anti-Wagner campaign.

Johnson was forced to issue a statement denying that the NRA or the administration was seeking to stamp out company unions. His statement also rejected the concept of exclusive representation.

Denver Tramway decision


The NLB's interpretation of Section 7(a), however, increasing diverged from that espoused by the NRA. On March 1, 1934, the Board issued its decision in Denver Tramway Corporation. The Board held that, where a union had obtained a majority of the votes cast in a government-sponsored representational election, any collective bargaining agreement would have to cover all employees in the bargaining unit.

Until Denver Tramway, unions had bargained only for their own members. A union which represented only half the bus drivers in a company, for example, would bargain a contract only on behalf of its members. Another union could represent the other bus drivers. In many cases, several unions represented the same workers in one company, each union bargaining a different contract for however many members it represented.

Denver Tramway was a major turning point in American labor law because it established the rule of exclusive representation. This rule said that a union which won the majority of votes in an election would win the right to represent all workers. Even when several unions competed against one another and no union won a majority of the votes, the union with the most votes still won the right to represent all workers.

Temporary abandonment of exclusive representation


President Roosevelt quickly disavowed the Board's exclusive representation rule. The United Auto Workers
United Auto Workers
The International Union, United Automobile, Aerospace and Agricultural Implement Workers of America, better known as the United Auto Workers , is a labor union which represents workers in the United States and Puerto Rico, and formerly in Canada. Founded as part of the Congress of Industrial...

 had organized more than 50,000 workers in the automobile industry in 1933. But the auto companies rejected the union's demand for recognition, set up company unions and refused to allow the NLB to mediate. Roosevelt intervened personally in the dispute. On March 25, 1934, Roosevelt announced a settlement that provided for proportional, rather than exclusive, representation—thus giving the company unions equal footing with the Auto Workers. The agreement also stripped the NLB of its jurisdiction over the auto industry. Worse, the agreement provided no authority for holding elections, and thus no means of determining which organizations truly represented workers.

Demise of the NLB


Senator Wagner, convinced by the fall of 1933 that the NLB needed replacement, began work on legislation which would establish a new statutory regime for labor relations in the United States.

Consulting with a key aide, Leon Keyserling
Leon Keyserling
Leon Hirsch Keyserling was an American economist and lawyer. During his career he helped draft major pieces of New Deal legislation and advised President Harry S. Truman as head of the Council of Economic Advisers....

, Wagner conceived of a "labor court" to hear cases involving labor disputes and fashion enforceable resolutions. Roosevelt evinced no interest in such a bill, so Wagner proceeded without him. Labor leaders were consulted in January 1934, and a bill was drafted in February.

The "Labor Disputes Act" was introduced in the Senate on March 1, 1934. The bill provided statutory authority for the existence of the NLB, and gave it exclusive enforcement authority over Section 7(a) of the NIRA. The NLB was given the authority to hold elections, but it was also authorized to prohibit acts of coercion by the employer against employees and required employers to bargain in good faith with the duly elected representatives of workers.

The bill explicitly incorporated the concept of exclusive representation. However, it did not require it, and left it up to the NLB to determine whether to apply the rule, given the facts of each case.

Wagner's bill received a hostile reception in Congress. The business community fought the bill ferociously, arguing that it contravened Roosevelt's own policies in the automobile case. The press, too, was adamantly opposed to the legislation. Administration spokespersons were ambivalent about the bill, when they mentioned it at all.

Nevertheless, Roosevelt and the Democratic leadership in Congress understood the need for action. A wave of large strikes swept the country in April and May, and a significant number of them were over the recognition issue. Senator David I. Walsh
David I. Walsh
David Ignatius Walsh was a United States politician from Massachusetts. As a member of the Democratic Party, he served in the state legislature and then as Lieutenant Governor and then as the 46th Governor . His first term in the U.S...

, Democrat
Democratic Party (United States)
The Democratic Party is one of two major contemporary political parties in the United States, along with the Republican Party. The party's socially liberal and progressive platform is largely considered center-left in the U.S. political spectrum. The party has the lengthiest record of continuous...

 from Massachusetts
Massachusetts
The Commonwealth of Massachusetts is a state in the New England region of the northeastern United States of America. It is bordered by Rhode Island and Connecticut to the south, New York to the west, and Vermont and New Hampshire to the north; at its east lies the Atlantic Ocean. As of the 2010...

 and chair of the Senate Committee on Education and Labor, quickly wrote a substitute bill, the "National Industrial Adjustment Bill".

The Walsh bill significantly altered many of the provisions of Wagner's bill. It permitted company unions, removed prohibitions on a refusal to bargain, and turned the Board's affirmative duty to determine the outlines of the bargaining unit into a voluntary one.

The Walsh bill won almost unanimous support from the president, the cabinet, the Senate and even from Wagner himself. Wagner was unhappy with the number of provisions which had been watered down, but believed that passage of some legislation was preferable to inaction. He also resolved to draft much stronger legislation after the fall elections. Nevertheless, the Walsh bill faced an uncertain future in the Senate. Congress needed to adjourn and return home to campaign for the fall elections, and the bill promised a lengthy fight.

Roosevelt once more directly intervened in order to win labor peace. Steelworker unions were threatening a nationwide strike. At a White House conference on June 12, 1934, Roosevelt called together Wagner, Walsh, U.S. Department of Labor secretary Frances Perkins
Frances Perkins
Frances Perkins , born Fannie Coralie Perkins, was the U.S. Secretary of Labor from 1933 to 1945, and the first woman appointed to the U.S. Cabinet. As a loyal supporter of her friend, Franklin D. Roosevelt, she helped pull the labor movement into the New Deal coalition...

, Senate majority leader
Majority leader
In U.S. politics, the majority floor leader is a partisan position in a legislative body.In the federal Congress, the role differs slightly in the two houses. In the House of Representatives, which chooses its own presiding officer, the leader of the majority party is elected the Speaker of the...

 Joseph T. Robinson, Representative Joseph W. Byrns and several aides. After discussion, Roosevelt himself dictated Public Resolution No. 44. The resolution authorized the president to create one or more new labor boards to enforce Section 7(a) by conducting investigations, subpoenaeing evidence and witnesses, holding elections and issuing orders.

Public Resolution No. 44 was introduced in the Senate the next day. Amended to expressly protect the right to strike, it passed both houses of Congress on unanimous voice-votes. Roosevelt signed the resolution on June 19, 1934.

Roosevelt issued Executive Order 6763 on June 29, 1934. The new order abolished the NLB. In its place, it established the National Labor Relations Board
National Labor Relations Board
The National Labor Relations Board is an independent agency of the United States government charged with conducting elections for labor union representation and with investigating and remedying unfair labor practices. Unfair labor practices may involve union-related situations or instances of...

. The new NLRB had only three members: Lloyd K. Garrison
Lloyd K. Garrison
Lloyd Kirkham Garrison was an American lawyer. He was Dean of the University of Wisconsin Law School, but also served as chairman of the "first" National Labor Relations Board, chairman of the National War Labor Board, and chair of the New York City Board of Education...

, dean of the University of Wisconsin Law School
University of Wisconsin Law School
The University of Wisconsin Law School is the professional school for the study of law at the University of Wisconsin–Madison in Madison, Wisconsin. The law school was founded in 1868.-Facilities:...

, was its chairman; Harry A. Millis
Harry A. Millis
Harry Alvin Millis was an American civil servant, economist, and educator and who was prominent in the first four decades of the 20th century. He was a prominent educator, and his writings on labor relations were described at his death by several prominent economists as "landmarks"...

, professor of economics at the University of Chicago
University of Chicago
The University of Chicago is a private research university in Chicago, Illinois, USA. It was founded by the American Baptist Education Society with a donation from oil magnate and philanthropist John D. Rockefeller and incorporated in 1890...

, and Edwin S. Smith, Commissioner of Labor and Industry for the state of Massachusetts, were its members.

The new law encouraged the proliferation of labor boards to cover various segments of industry. Roosevelt duly complied with business demands for these boards. Each board interpreted the law as it wished, and American labor law fragmented.

Wagner, however, proceeded to draft and in 1935 introduced a new bill, the National Labor Relations Act
National Labor Relations Act
The National Labor Relations Act or Wagner Act , is a 1935 United States federal law that limits the means with which employers may react to workers in the private sector who create labor unions , engage in collective bargaining, and take part in strikes and other forms of concerted activity in...

 (NLRA). The NLRA was enacted and is the basis for private-sector labor relations in the United States to this day.

Impact of the NLB


Many of the legal doctrines established by the National Labor Board deeply influenced American labor relations. The Board's exclusive representation doctrine was "a major landmark in American labor history". The doctrine was later enacted into law as part of the NLRA, and the NLRB continues to apply it today.

The Board's decision in Denver Tramway laid the basis as well for the NLRB's concept of mature collective bargaining relations. Under this doctrine, the NLRB has emphasized and de-emphasized various aspects of the NLRA over time, weighing different parts of the law more heavily depending on the longevity of the collective bargaining relationship between the employer and union.

Other Board decisions, such as Bee Bus Line Company (decided May 10, 1934) and Eagle Rubber Company (decided May 17, 1934), laid down the stipulation that a properly conducted, government-monitored representational election required good-faith bargaining, and that collective bargaining must precede the decision to strike. Both decisions have had stabilizing influences on collective bargaining relationships.

The doctrines laid down by the NLB continue to reverberate in 2006, as the NLRB wrestles with the implications of card check
Card check
Card check is a method for American employees to organize into a labor union in which a majority of employees in a bargaining unit sign authorization forms, or "cards," stating they wish to be represented by the union...

and voluntary recognition.

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