Labor law and the Railway Labor Act

Collective Bargaining

Labor relations in America have undergone many changes, with the development of unions giving the workers a voice and a degree of power so as to use their solidarity as a bargaining tool. The union movement came into being after a long and difficult series of battles both with business and with the government.

In the nineteenth century, there was a kindred spirit between artisans and all types of skilled, semiskilled, and unskilled labor, which developed into a bond of common interest that would in time lead to the development of the American labor movement and to massive changes on the American labor scene. The stabilization of labor unions would also result in the expansion of collective bargaining and wage and salary demands. Labor organizations in the United States were founded long before factories were developed. Between 1790 and 1799, shoemakers, printers, carpenters, and other craftsmen organized "societies" in eastern cities, and as needed they conducted strikes for higher wages and closed shops. The earliest authenticated strike in the U.S. was in Philadelphia in 1786 when the printers union gained a minimum wage of $6 a week. The labor philosophies of these organizations were highly influential in the development of subsequent groups, notably the Mechanics' Union of Trade Associations in 1827. As industry expanded at a time of soaring prices following the discovery of gold in California in the 1850s, trade unionism was revived. Officers from 25 unions gathered in Columbus, Ohio in 1886 to organize all trades and to form the American Federation of Labor (AFL). The organization adopted the policy of collective bargaining to deal with employers on wage matters. By the turn of the century, though, there was a greater need for union organization. Hundreds of items were then manufactured under strenuous circumstances in homes and shops nicknamed "sweatshops," which were overcrowded, inadequately lighted, unventilated, and lacking in proper sanitary facilities. Men, women, and children worked under these conditions for low wages. The AFL worked incessantly for legislative relief to eliminate these working conditions, to abolish child labor, and to introduce workmen's compensation and the Fair Labor Standards Act. Massachusetts passed the first minimum wage law in 1912, followed by eight other states in 1913 (Zollitsch and Langsner 30-32).

During this era, the government was often antithetical to the interests of labor. Injunctions were used to prevent or break strikes. The Sherman Antitrust Act was applied in a way that curtailed union activities. That act had been passed to apply to business combinations, but the courts found a way to turn the law against labor activities. Congress tried to erect a shield for labor against antitrust prosecutions with the Clayton Act in 1914, but the courts found a way to turn that against labor as well. As America entered World War I, there was a scarcity of labor and a need for labor-relations stability that led President Wilson to create a tripartite War Labor Conference Board, one of whose guiding principles was the prohibition of strikes and lockouts along with the recognition of the "right of workers to organize in trade unions and to bargain collectively through chosen representatives." This can be seen as a remarkable declaration of the rights of labor, and though the Board was short-lived, it hear 1,250 cases affecting 700,00 workers. The Board did not survive the armistice in 1918 (McCulloch and Bornstein 1-6).

Over the next few years, membership in the AFL declined. The steel strike of 1919 ended in failure. Business showed hostility to labor through the "American Plan," essentially an antiunion, open shop program that would dominate the 1920s. The use of the labor injunction reached new heights. The only substantial victory for labor during this period was the Railway Labor Act of 1926, but even this was only a qualified victory because it was a weak compromise of provisions that had been agreed to by rail labor and management. It was weak primarily because it lacked administrative machinery, but it was still a breakthrough for labor because it stressed the importance of collective bargaining in the rail industry. McCulloch and Bornstein describe the situation in the 1930s and the Great Depression and find that it had three major influences in the shape and content of labor-management polices: 1) widespread unemployment shocked the country about industrial conditions and created a climate in which Congress was willing to experiment with new approaches; 2) the harshness of industrial life during the 1930s, particularly low wages and job insecurity, caused part of the labor movement to reach out to the long-ignored workers in the mass production industries; and 3) the fear of revolutionary social formulas from the Far Left and Right persuaded opinion-makers that meaningful reform in the workplace was vital to the maintenance of a democratic society (McCulloch and Bornstein 7-9).

The Railway Labor Act was the first major piece of labor legislation passed by Congress.

It did not apply to U.S. industry as a whole but to what was then seen as the most important piece of transportation infrastructure in the country, meaning the railroads. The act was amended in 1936 to include the developing airline industry. The railroads at the time wanted to end "wildcat" strikes, and railroad workers wanted to assure their chance to organize and be recognized as the exclusive bargaining agent in dealings with any railroad company. The Railway Labor Act benefited both groups because it gave the workers the right to form unions and negotiate with railroads, while the railroads gained the right to prevent their business from being interrupted by a wildcat strike. As part of the RLA, the National Mediation Board was created as the federal agency charged with administering certain functions under the Act. The Board is responsible for conducting union representational elections and supervising the mediation of contract negotiations. The Boars consists of thee members appointed by the President, and at least one of the three must be from a political party other than that of the President. These three members of the Board have a professional staff to assist them, and mediators are the staff members charged by the Board with supervising the mediation of contract negotiations ("Bargaining Under the Railway Labor Act").

A second agency created by the law was the Railroad Retirement Board, added by the Railroad Retirement Act of 1935 (Johnson 110). The law codified the right of employees to bargain and to have their rights protected, but the law has not always worked as intended. One important provision held that each side had the right to name its representatives for collective bargaining and to do so without coercion of interference. This was included in response to the rapid growth of company unions after an unsuccessful shopmen's strike in 1922. The Transportation Act of 1920 showed that collective bargaining was contemplated but did not guarantee the right of union membership and freedom from discrimination, while the Railroad Labor Board specifically rules that there should not be any interference with the right to organize. With reference to the striking shopmen, though, the Board itself passed an "outlaw resolution" declaring that the strikers were no longer employees. This was why the collective bargaining provision was passed by Congress. The validity of the law was upheld by the Supreme Court in 1930 in a wage dispute between the Brotherhood of Railway Clerks and the Texas and New Orleans Railway during which the carrier established a company union:

The Brotherhood secured an injunction restraining the carrier on the ground that its action violated the Railway Labor Act. The carrier ignored the injunction and recognized the dominated company union as representing its employees. The District Court then found it guilty of contempt and directed it to disestablish the union. In upholding this ruling, the Supreme Court stated: "collective action would be a mockery if representation were made futile by interferences of choice." (Millis 330)

This decision made the 1934 Amendment to the Act of 1926 possible, making a number of important changes in the law. This new act replaced the five-man National Board of Mediation with the current three-man Board. It also established the National Railroad Adjustment Board. It further made it illegal to interfere with the right of employees to join, organization, or help organize any labor organization they chose (Millis 330).

The Railway Labor Act is seen as key in the development of the collective bargaining process. A collective bargaining structure was part of the Act as railroad employees were grouped into established collective bargaining units for the purpose of representation. They had been so grouped long before passage of this law, but the law codified the situation and gave it protection. The structure for collective bargaining therefore developed out of railroad operation and organization so that the "standard" labor unions for the various employees existed by 1926 as craft-type unions. Also significant in the labor climate for the railroads was the fact that the system had much uniformity of working rules already established by the crafts on the various carriers, something that started as early as 1907. Between 1907 and 1926, the unions made four separate attempts to secure uniform working rules, with great progress made during the period of federal control and operation from 1918 to 1920, during World War I. Over that time, wages and rules were established on a national basis, and though many of the pay rates and working condition rules were not renewed once government control ended, a precedent had been established so that by 1926, there were a number of uniform working rules in the industry. In framing the Railway Labor Act, legislators could therefore look to existing conditions in the industry and could reflect the collective bargaining structure that already existed (Weber 219).

Under the act, disputes are categorized as major or minor, with disputes involving proposed changes in rates of pay, rules, or working conditions being called major, and with those growing out of grievances or out of the interpretation or application of agreements concerning rates of pay, rules, or working conditions called minor. The requirements of the Act are that the parties involved negotiate in good faith:

The Railway Labor Act imposes upon the carriers and the unions representing their employees the obligation to make every reasonable effort to arrive at a settlement of a labor dispute without interrupting interstate commerce. The Act also prescribes certain procedures that must be followed by the employer and the union in every case. It is important to note that nothing in the Railway Labor Act compels either the carrier or the union to agree on anything. The Act only compels both parties to bargain in good faith to try to arrive at a settlement. (Weber 224)

The provisions were first extended to the airline industry, as noted, but with the idea of collective bargaining now set in law, these concepts extended to other types of labor and other industries as well.

In answer to the problems of the Great Depression, President Roosevelt appointed a National Labor Board in 1933 to bring about compliance with labor laws and to mediate labor disputes. He was himself chairman of this board, and also members were representatives of labor and industry.

The Board had little real power and a dubious legal foundation. Roosevelt tried to generate power for the Board through executive orders. Most employers resented the actions of the Board, and labor saw it as weak. The sole power of enforcement held by the Board was to report violations to the compliance Division of the National Recovery Administration or to the Attorney General.

Senator Robert Wagner was an ally of Roosevelt on the Board, and he was frustrated by the inability of the Board to achieve its goals. He then introduced a bill into the Senate in 1934 to prohibit employer "unfair labor practices" and to establish a permanent agency to administer its provisions. The bill envisioned a tripartite agency that would consist of two employee, two management, and three public members. Business fought the bill, calling it unconstitutional and unfair. It became evident that the bill would not pass, and Congress passed a joint resolution authorizing the President to establish one or more boards that in effect would have little more power than had the National Labor Board. This was Public Resolution 44, and it led to the creation of the National Labor Relations Board. This first National Labor Relations Board also discovered that it had little power, and it lasted from 1933 to 1935 (McCulloch and Bornstein 10-12).