Opinion ID: 1550883
Heading Depth: 1
Heading Rank: 1

Heading: Alleged Unfair Labor Practices at Fore River Plant.

Text: The so-called Bethlehem Plan of Employee Representation was inaugurated at the Fore River plant in 1923. Summarizing from the Board's findings, supported by adequate evidence, as to the circumstances of its installation at this particular plant, the following facts appear: Late in February of 1923 the employment manager summoned 25 employees into the board room. High officials of the company explained to them the representation plan, which was said to be in successful operation in other Bethlehem plants. The group of employees were requested to explain the Plan to the employees in their respective departments; there is evidence that this was done to some extent, though no general meeting of all the employees was held. On the following day notices explaining the Plan and stating that it would be put in effect were posted on the bulletin boards. The notices listed the names of the 25 selected employees and suggested that persons interested consult with them. Approximately ten days later the same 25 employees were again called to the board room, where they were told by the employment manager that the Plan was ready to be put into effect. They were asked to act as tellers at the balloting to nominate candidates for employee representative and to talk it up among the employees. Twenty-one employee representatives were elected from the various departments and proceeded to organize into committees as provided in the Plan. The employees assumed no initiative or responsibility in the formation of the Plan, which was furnished and installed in its entirety by the management. The original Plan was set forth in a printed booklet entitled Representation of Employees in Plants of the Bethlehem Shipbuilding Corporation, Ltd. It contained twelve articles embracing representation, terms of employees' representatives, qualification of representatives and voters, nominations and elections, management's representatives, committee meetings, annual conference, procedure for adjustments, guaranteed independence of employees' representatives, and amendments. Employee representatives were chosen by departments, in proportion to the number of employees therein, by secret ballot, following nominations, to serve for a term of one year. Only employees who had been on the company's payroll for six months were eligible for election as representatives. The whole group of employee representatives so chosen constituted the General Committee or General Body, the function of which was to receive, discuss and generally report all matters of interest to employees and to refer matters to the proper committees for adjustment. The General Body divided itself into various standing committees. Provision was made for stated meetings of these various employee committees. The Plan also set up corresponding committees of employer representatives, and the respective employer and employee representatives together functioned as joint committees, on which management and men had equal voting strength. In addition, the company appointed a management's special representative who was charged with the duty of keeping in touch with the employee representatives and representing management in negotiations with the officers and committees of the employee representatives. A procedure for adjustment of grievances provided successive stages of review from department foreman through the committees of the Plan to the president of the corporation. For time necessarily occupied in actual attendance at regular meetings or at special meetings or conferences jointly approved, representatives were to receive from the company payment commensurate with their average earnings. In addition, Bethlehem undertook to defray such expenses as are necessarily incident to the discharge of Plan duties when approved by a majority of the joint committee on rules. Under the original Plan, Bethlehem retained effective control or veto over amendments by the provision that any method of procedure hereunder may be amended at any time by a two-thirds vote of the entire membership of the Joint Committee on Rules, or by concurrent majority vote of the Employees' Representatives and of the Representatives of the Management at an Annual Conference. Membership in the Plan is automatic. All non-supervisory employees who have been on the payroll for sixty days prior to nominations are eligible to vote. There are no applications for membership, no initiation fees, no dues and no membership cards. No independent method of financing the Plan was provided, but from the beginning and continuing up till April, 1937, when the constitutionality of the National Labor Relations Act was upheld, the company defrayed all the expenses of the Plan and compensated employee representatives for time spent on Plan duties. This necessarily constituted a potential restraint upon the freedom of action of the employee representatives. In 1931 the General Body complained of the meagerness of the budget allowance for Plan expenses as announced by the management's special representative stating that it would be impossible to do even the routine representative work within the time limits allowed. Upon another occasion, in 1927 or 1928, the General Body voted a resolution proposing an annual conference of employee representatives of the Fore River plant with employee representatives of other Bethlehem plants, to be held at Bethlehem, Pa., to consider their common problems. Management approval was not attained, and the plan accordingly fell through. Notwithstanding this financial dependence upon the company, various employee representatives testified that they were under no sense of constraint, and felt free in their negotiations with the management to pursue vigorously the interests of the employees. This is a subtle thing, and the recognition of constraint may call for a high degree of introspective perception. The employee representatives throughout the history of the Plan have through the various committees and through the Plan procedure taken up with management a wide variety of questions concerning wages, working conditions, overtime, individual grievances, etc., and we may assume that in many cases satisfactory adjustments were reached by enlightened action on both sides. Incident to Bethlehem's undertaking to bear the expenses of the Plan, minutes of the meetings of the various committees were mimeographed by the management and copies retained in its files. This practice, which was continued until 1937, afforded management a certain oversight of the proceedings of the employee committees. In 1930 a resolution was voted by the General Body proposing to give public endorsement to a bill pending in the Massachusetts legislature increasing weekly and death benefits under the Workmen's Compensation Act. Management's special representative thereupon promptly wrote to the General Body that the Representative Plan is an instrument for the settlement of any differences which may arise between the employees and the management and it is in no way concerned with any matters outside of the plant, therefore, this being the purpose of the Plan the management disapproves of any action of this committee with matters outside of the plant. But the right of employees to self-organization, and to engage in concerted activities, now guaranteed by Section 7 of the National Labor Relations Act, is not limited to direct collective bargaining with the employer, but extends to other activities for mutual aid or protection, including appearance of employee representatives before legislative committees. In contrast to the incident just recited, the management in 1934 called a special meeting of the General Body to inform the representatives of a protest meeting to be held in Washington against the passage of the pending Wagner Act. A committee of employee representatives went to Washington to testify in opposition to the bill. The chairman of the General Body read a statement asserting that the provisions of the bill are in absolute opposition to the Plan under which we have operated for the past eleven years   . Bethlehem has woven into the administration of the Plan a relief plan, a community chest fund, a pension plan, a clothing store and a gasoline station operated by the company. The relief plan was formed by the company in 1926 and is administered through one of the joint committees of the Representation Plan. Among its charitable functions, it distributes Christmas and Thanksgiving baskets to needy employees. The community chest fund was established in 1928. It is administered jointly by management and employees through a board of trustees consisting of three employee representatives and two management representatives. It has been financed by drives and dances conducted by the employee representatives, by occasional management contributions and by the profits from the clothing store and gasoline station. Minutes of meetings of the Plan show various memoranda from the general manager, assistant general manager, and general superintendent addressed to foremen, requesting them to get behind the various community chest drives, and in one instance informing them that your allotment of tickets has been distributed to your department and you will please see that they are distributed to both supervisors and employees alike. The trustees are empowered to expend the fund for the relief of needy employees and their families, and for such other purposes as the Trustees may deem advisable for the benefit of the employees of the Fore River plant. In addition to expenditures for charitable purposes this fund was drawn upon to pay the expenses of the employees committee in their trip to Washington to oppose the Wagner Act and to reprint articles antagonistic to the Industrial Union's efforts to organize the employees. The pension plan created by Bethlehem in 1931 provided for a disability pension and a voluntary pension after twenty-five years of continuous service. Questions of eligibility for pensions are considered by one of the joint committees of the Representation Plan. In a statement by President Grace distributed among the employees in 1933 it was emphasized that the Plan has become vital in the administration of our business. Also, all of these benefits of collective bargaining are afforded under our Employees' Representation Plan without cost to the employee. In another statement distributed in 1937 President Grace stated that those who would serve best the interests of labor will protect the Plan. They will protect it for what it is, a fair, square, effective and responsible method of collective bargaining. From the foregoing it appears that prior to July 5, 1935, when the National Labor Relations Act went into effect, Bethlehem had impressed upon the Fore River plant a particular pattern of employee representation and had maintained it in existence by continuing support. It cannot be said as a matter of law that participation by a large majority of the employees in the annual Plan elections for representatives made this their freely chosen method of representation. As this court said in National Labor Relations Board v. H. E. Fletcher Co., 1 Cir., 108 F.2d 459, 465: True, they have participated in the periodic election of representatives under the Plan. This, however, does not signify that they approve the Plan. Their only choice is to vote or not to vote, under the Plan. If they do not vote, representatives will be chosen by those who do, and these representatives will be recognized by the company as the sole bargaining agents for the employees. Even had Bethlehem afforded the employees an opportunity for a secret referendum on the question whether the Plan should be continued in force, this would not necessarily have given the Plan a clean bill of health. National Labor Relations Board v. Newport News Shipbuilding & Dry Dock Co., 308 U.S. 241, 251, 60 S.Ct. 203, 84 L.Ed. 219. What Bethlehem did before July 5, 1935, is, of course, no violation of the Act. But since that date there has been no break in the continuity of the Plan, and the Board might conclude, not unreasonably, that the effect of Bethlehem's prior conduct in canalizing the employees' desire for representation carried over after the Act was passed and constituted a continuing obstacle to the exercise by employees of their free choice of bargaining representatives. This effect was furthermore reinforced after July 5, 1935, by the continuing support, financial and otherwise, which Bethlehem gave to the Plan, necessarily in violation of Section 8(2) of the Act, up to the time the Act was declared constitutional. [3] On or before May 15, 1936  the exact date not being disclosed in the record  certain amendments were made to the Plan. One of these, stressed by Bethlehem as indicating its purpose to abdicate any vestige of control, prescribed a change in the procedure for adopting amendments to the Plan. Originally, as previously stated, no amendment could be made without employer assent. The revised procedure, which was in the Plan at the time of the Board hearing and order, provided that the Plan might be amended at any regular meeting of the General Body by two-thirds vote of the entire membership thereof, except that any amendment which would necessarily change the procedure provided by the Plan for the adjustment of grievances or which might prevent the Plan from operating as a fair method of selecting representatives of the whole body of employees of the Corporation and as a fair method of collective bargaining or which might materially increase the obligations imposed upon the Corporation under the Plan, shall not become effective, until it shall also have been approved by the Joint Committee on Rules, Ways and Means. The Plan is silent as to the machinery for deciding whether a particular amendment proposed by the men is or is not one requiring the assent of the management. Much argument was addressed to us on this point. Perhaps Bethlehem is right in its contention that such a question would have to be resolved by the courts and that Bethlehem could not block any proposed amendment merely by asserting that it fell within the exception above quoted. Even so, considering the ambiguity of the language, this article of the Plan tends to put some restraint on the proper freedom of employees. A proposed change in the method of electing representatives, desired by the men, might have to be assented to by the management if a court, applying an objective standard of fairness, determined that the proposal might prevent the Plan from operating as a fair method of electing representatives    and as a fair method of collective bargaining. Bethlehem urges that though a cease and desist order might have been proper, the Board as a matter of law was in error in finding, as it did, that an affirmative order of disestablishment was necessary to effectuate the policies of the Act and free the employees of the respondent from such domination and interference, and the effects thereof, which constitute a continuing obstacle to the exercise by the employees of the rights guaranteed them by the Act. We cannot agree. Within broad limits, it is for the Board, not for the courts, to draw the inference from the underlying facts as to what means of affirmative relief are necessary to undo the effects of an unfair labor practice and to effectuate the policies of the Act. National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261, 265, 270, 271, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307; National Labor Relations Board v. Falk Corp., 308 U.S. 453, 461, 60 S.Ct. 307, 84 L.Ed. 396; cf. National Labor Relations Board v. Fansteel Corp., 306 U.S. 240, 257, 258, 59 S.Ct. 490, 83 L.Ed. 627, 123 A.L.R. 599. Mr. Justice Roberts, speaking for the Court in National Labor Relations Board v. Newport News Shipbuilding & Dry Dock Co., 308 U.S. 241, 250, 251, 60 S.Ct. 203, 208, 84 L.Ed. 219, said: The Board held that, where an organization has existed for ten years and has functioned in the way that the Committee has functioned, with a joint control vested in management and men, the effects of the long practice cannot be eliminated and the employes rendered entirely free to act upon their own initiative without the complete disestablishment of the plan. On the record as made we cannot say this was error.    As pointed out in National Labor Relations Board v. Pennsylvania Greyhound Lines, 303 U.S. 261, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307, disestablishment of a bargaining unit previously dominated by the employer may be the only effective way of wiping the slate clean and affording the employes an opportunity to start afresh in organizing for the adjustment of their relations with the employer. Compare National Labor Relations Board v. Fansteel Metallurgical Corp., 306 U.S. 240, 262, 59 S.Ct. 490, 498, 83 L.Ed. 627, 123 A.L.R. 599. The court below agreed with the respondent that, as the Committee had operated to the apparent satisfaction of the employees; as serious labor disputes had not occurred during its existence; and as the men at an election held under the auspices of the Committee had signified their desire for its continuance, it would be a proper medium and one which the employer might continue to recognize for the adjustment of labor disputes. The difficulty with the position is that the provisions of the statute preclude such a disposition of the case. The law provides that an employee organization shall be free from interference or dominance by the employer. We cannot say that, upon the uncontradicted facts, the board erred in its conclusion that the purpose of the law could not be attained without complete disestablishment of the existing organization which had been dominated and controlled to a greater or less extent by the respondent. In applying the statutory test of independence it is immaterial that the plan had in fact not engendered, or indeed had obviated, serious labor disputes in the past, or that any company interference in the administration of the plan had been incidental rather than fundamental and with good motives. It was for Congress to determine whether, as a matter of policy, such a plan should be permitted to continue in force. We think the statute plainly evinces a contrary purpose, and that the board's conclusions are in accord with that purpose. In National Labor Relations Board v. Brown Paper Mill Co., 5 Cir., 108 F.2d 867, 871, the court said: Therefore, when once it appears that management has had a hand in organizing, supporting or in any wise interfering or collaborating with an `association' of employees, such an association may not be recognized as the free and voluntary association of employees called for in the act. If in such cases the employees really intend and want it to be such, their only sure course is to disestablish it as the bargaining agency and, entirely dissolving it, begin organization anew, upon their own time and their own devices without aid or comfort from the management. In Westinghouse Electric & Mfg. Co. v. National Labor Relations Board, 2 Cir., 112 F.2d 657, 660, a disestablishment order was sustained in a much weaker case than the present. In that case there had been more of a break between the old representation plan and the new unaffiliated independent union which arose from its ashes after the plan went to pieces following the Supreme Court's decision in National Labor Relations Board v. Jones & Laughlin Steel Corp., 301 U.S. 1, 57 S.Ct. 615, 81 L.Ed. 893, 108 A.L.R. 1352. Judge Learned Hand, commenting on the disestablishment order in the Newport News case, supra, said: The reason for this was that, although the new union would be lawful, if freely formed, it had in fact arisen out of the earlier organization, and the company had done nothing to mark the separation between the two, and publicly to deprive the successor of the advantage of its apparently continued favor. It is true that in that case there was somewhat less separation between the old and the new than in the case at bar; the union was in form merely a `revision' of the earlier `Plan', and its constitution had been prepared in part at any rate, by executives of the company. But that was not the circumstance which counted, as we understand it; it was rather that the employees at large had not been advised that the company was wholly indifferent whether they joined the new union, and that, as it might, and probably did, appear to be a successor of the old, the separation should have been made plain, and with it the discontinuance of any continued countenance from the employer. The theory is that in cases such as this, where an unaffiliated union seems to the employees at large to have evolved out of an earlier joint organization of employer and employees, the Board may take it as datum, in the absence of satisfactory evidence to the contrary, that the employees will suppose that the company approves the new, as it did the old, and that their choice is for that reason not as free as the statute demands. How substantial such a fear really is, it is not for us to say; upon how much evidence the Board may insist to make public the change, the court did not declare; nor need we here; for the company did not make any effort to make it plain to the employees generally that the `Independent' was not a revision, or amendment, of the `Plan'. On the surface it seemed to be such, for it emanated from the old elected representatives, and that alone established an appearance of continuity between the two. Madden's speech on May 12th was only to those representatives; the company did not seek to broadcast it or its equivalent in any way to the employees  about 2500 in all. So far as appears, it was content to let them assume, what was true, that the `Independent' had arisen out of the `Plan'; and to believe, as they quite naturally might have done, that it preferred the successor to the C.I.O. local just forming, and still very feeble. It is of course possible that it would have made no difference if the company had declared itself to all as Madden did at the meeting; but the Board was to decide how important that would have been; certainly it is not a question for us. So far as we know, the courts upon sustaining a Board finding that an employer has been guilty of the unfair labor practice forbidden by Section 8(2) of the Act, have uniformly enforced disestablishment orders. See further, National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261, 58 S.Ct. 571, 82 L.Ed. 831, 115 A.L.R. 307; National Labor Relations Board v. Pacific Greyhound Lines, Inc., 303 U.S. 272, 58 S.Ct. 577, 82 L.Ed. 838; National Labor Relations Board v. Falk Corp., 308 U.S. 453, 60 S.Ct. 307, 84 L.Ed. 396; National Labor Relations Board v. Fansteel Corp., 306 U.S. 240, 59 S.Ct. 490, 83 L.Ed. 627, 123 A.L.R. 599; National Labor Relations Board v. H. E. Fletcher Co., 1 Cir., 108 F.2d 459; National Labor Relations Board v. Christian Board of Publication, 8 Cir., 113 F.2d 678. It is true, the Supreme Court stated in National Labor Relations Board v. Pennsylvania Greyhound Lines, Inc., 303 U.S. 261, 270, 58 S.Ct. 571, 576, 82 L.Ed. 831, 115 A.L.R. 307, that: We may assume that there are situations in which the Board would not be warranted in concluding that there was any occasion for withdrawal of employer recognition of an existing union before an election by employees under Section 9(c), 29 U.S.C.A. § 159(c), even though it had ordered the employer to cease unfair labor practices. Such might be the case where an employer committed a merely technical violation of Section 8(2) by an isolated act of interference with the administration of a labor organization which had theretofore been freely chosen by the employees acting on their own, and not the employer's, initiative. No such exceptional case is now before us. On the facts of the case at bar we think the propriety of a disestablishment order has been settled by controlling authority.