STATEMENT OF A. C. THORNTON, PRESIDENT OF THE ILLINOIS STATE CHAMBER OF COMMERCE; ACCOMPANIED BY JOHN VAN AKEN, MEMBER OF SEYFARTH, SHAW, FAIRWEATHER & GERALDSON, LAW FIRM, CHICAGO; AND JOHN F. THARP, MANAGER, STATE CHAMBER'S LABOR RELATIONS DEPARTMENT

Mr. THORNTON. Thank you, sir. I am sorry our train was a little late. We had quite some weather on the way over last evening.

Mr. PERKINS. Identify yourself for the record and your associates, and if you want to insert your statement in the record at this point and summarize it or read it, any way that you want to proceed, you may proceed.

Mr. THORNTON. All right. My name, gentlemen, is A. C. Thornton. I am director of personnel and industrial relations at the International Minerals & Chemical Corp., of Skokie, Ill. I am also here today as the chairman of the Labor Relations Committee of the Illinois State Chamber of Commerce, accompanied by Mr. John Van Aken, a member of the Chicago law firm of Seyfarth, Shaw, Fairweather & Geraldson, and by Mr. John F. Tharp, who is manager of the State chamber's labor relations department.

We will take advantage of your offer to give to you a prepared statement for the record and also I would like to make several other comments in addition.

Mr. PERKINS. Without objection it is being inserted in the record at this point.

(The statement referred to follows:)

STATEMENT OF A. C. THORNTON FOR THE ILLINOIS STATE CHAMBER OF COMMERCE

My name is A. C. Thornton. I am director of personnel and industrial relations of the International Minerals & Chemical Corp., Skokie, Ill., and chairman of the Labor Relations Committee of the Illinois State Chamber of Commerce. I am accompanied by John Van Aken, a member of the Chicago law firm Seyfarth, Shaw, Fairweather & Geraldson, and by John F. Tharp, manager of the State chamber's labor relations department. I am presenting this statement on behalf of the Illinois State Chamber of Commerce, which is a statewide civic association with a membership of 17,500 businessmen representing approximately 7,500 companies throughout 412 towns and cities in every part of the State of Illinois. These members are engaged in every type of business, ranging from the largest corporations to the self-employed.

The Illinois State Chamber's Labor Relations Committee comprised of 100 members, representative of the chamber's membership, has seriously studied the issue under consideration by this subcommittee and this statement reflects the considered judgment of these committee members and also of the Illinois State Chamber's 71-man board of directors. Thus, it is believed the viewpoints expressed herein broadly represent those of Illinois business.

The bill under consideration by this subcommittee (H.R. 9070) is, of course, designed for the purpose of legalizing virtually all common situs picketing at construction sites. We are informed that labor-union spokesmen advocate the passage of this proposed legislation on the basis that it is for the purpose of correcting a technicality and because it involves a mere technical point related to the Taft-Hartley Act, they are urging bipartisan support for this measure. Exactly what specific technicality it is they have reference to, I don't know. The fact is that since the enactment of section 8(b)(4) of the Taft-Hartley Act, there have been a long line of decisions of the National Labor Relations Board and the courts dealing with the problem of common situs picketing.

The legislative history of the Taft-Hartley Act clearly demonstrates that it was the intent of Congress in 1947 to prohibit the very kind of unfair union activity that would be permitted with the passage of this legislation.

The Congressional Record of April 28, 1947, contains statements made on the floor of the Senate by Senator Ellender during debate on the Taft-Hartley Act which reads in part:

"Mr. President, now for a few moments I desire to discuss some of the abuses which labor unions can indulge in with impunity under existing law. Among the most aggravated of those practices are secondary boycotts and jurisdictional strikes. It is true that such practices are not new, but it seems that under the Norris-LaGuardia and Wagner Acts, these abuses grow steadily.

"A secondary boycott, as all of us know, is a concerted attempt on the part of a strong union to compel employers to deal with them, even though the employees of that employer desire to be represented by other unions, or not to be represented at all.

"Some of the most glaring examples of the secondary boycott occurred in Ohio, the State of the distinguished Senator in charge of the bill (Mr. Taft). They infected the neon sign business. Some manufacturers were compelled, under the Wagner Act, to contract with the CIO as the bargaining agent. When neon signs manufactured for distribution all over the United States were shipped to such States as Illinois, Indiana, and Michigan, the AFL unions in those States which had contracts for installing the neon signs, because the neon signs bore the label of CIO said, 'We will not put them up.' Of course, trouble followed, and losses ensued to the manufacturer. Yet management was, in a measure, compelled to take the steps it did, as it was helpless to do otherwise, as I have just indicated.

"Another example is the New York Electrical Workers' Union, the IBEW. That union has become so powerful that it has organized not only those who make the electrical equipment but those who receive it from the factory and install it. As a matter of fact, no employer who manufactures electrical equipment outside of New York has a ghost of a show of having his equipment placed in the large buildings in New York City. When such equipment is sent to New York City, the IBEW local refuses to install it unless it is permitted to tear all the equipment apart and assemble it again. Of course, one can readily understand that such procedure is unconscionable and that it results in high costs to those engaged in the erection of office buildings, homes, and stores; in fact all sorts of buildings requiring electrical equipment."

And on April 29, 1947, the Congressional Record reflects the following statement by the late Senator Taft:

"I do not quite understand the case which the Senator has put. This provision makes it unlawful to resort to a secondary boycott to injure the business of a third person who is wholly unconcerned in the disagreement between an employer and his employees. The Senator will find a great many decisions written by my father which held that under the common law a secondary boycott is unlawful. Subsequently, under the provisions of the Norris-LaGuardia Act, it became impossible to stop a secondary boycott or any other kind of strike, no matter how unlawful it may have been at common law. All this provision of the bill does is to reverse the effect of the law as to secondary boycotts. It has been set forth that there are good secondary boycotts and bad secondary boycotts. Our committee heard evidence for weeks and never succeeded in having anyone tell us any difference between different kinds of secondary boycotts. So, we have so broadened the provision dealing with secondary boycotts as to make them an unfair labor practice."

The above would tend to indicate that it was the intent to completely outlaw all secondary boycotts in the Taft-Hartley Act. It seems reasonable to interpret the above statement of the late Senator Taft as meaning that there is no such thing as a fair and equitable secondary boycott and that all secondary boycotts were intended to constitute unfair labor practices.

A review of the common situs picketing cases that have arisen under section 8(b) (4) of the Taft-Hartley Act and decided by the National Labor Relations Board and the courts indicate that many forms of common situs picketing are now legal under the National Labor Relations Act, as amended, and other forms of common situs picketing that constitute an illegal secondary boycott within section 8(b) (4) have been held to constitute an unfair labor practice. For example, picketing by a union which had a dispute with the primary subcontractor where the picketing was to induce the employees of other subcontractors to strike in order to force the general contractor to cease doing business with the primary subcontractor has been held to constitute a violation of section 8(b) (4) (A) of the act (NLRB v. Teamsters, Local 47, 234 F. (2d) 296, (1956);

IBEW, Local 501, v. NLRB, 341 U.S. 694 (1951); Denver Building and Construction Trades Council, 108 NLRB 318 (1954)). Picketing at common premises has been held unlawful if the picket sign itself indicates that picketing is aimed beyond the primary employer or if the picket sign, when viewed in context of other union actions or statements, demonstrates that picketing is directed beyond the primary employer.

Where the picket sign does not indicate that picketing is directed against the primary employer alone, the picketing is unlawful if the picketing union has previously urged secondary employers not to work with the primary employer since such action indicates that the picketing is aimed beyond the primary employer (NLRB v. Carpenters, Local 55, 218 F. (2d) 226 (1954); Pittsburgh Plate Glass Company, 110 NLRB 445 (1954)). Likewise, picketing at common premises has been held unlawful where the picket signs mislead customers of secondary employers to believe that the secondary employer is involved in the dispute and where pickets urge the customers to refrain from making purchases of the secondary employer (NLRB v. Teamsters, Local 135, 212 F (2d) 216 (1954)). And it has also been held to be unlawful to picket at common premises with picket signs that do not name the primary employer inasmuch as it is then impossible to determine at which employer the picketing is aimed (Speery v. Building and Construction Trades Council of Kansas City's metropolitan area, 131 F Supp. 36 (1955)).

Common premises picketing has also been held unlawful unless the picketing is conducted in such a manner as to minimize its impact on the neutral employees insofar as possible without substantial impairment of its effectiveness in reaching the primary employees. (Retail Clerks, Locals 1017 and 648, 116 NLRB 856 (1956).) Also, common situs picketing has been held unlawful where the union had a daily opportunity to reach the primary employees by picketing at separate premises of the primary employer. (Sheet Metal Workers, Local 51, 115 NLRB 1137 (1956).)

Picketing a subcontractor at a construction project was held unlawful where the signs carried by the pickets did not clearly indicate that the dispute was with the subcontractor and not with the general contractor or other subcontractors and where no action was taken to correct the impression received by employees of other subcontractors that the picketing was intended to induce them to engage in a work stoppage. (Getru v. Painters, Local 193, (DC, Ga., 1953) 24 Labor Cases 67,906.)

On the other hand, as previously mentioned, other forms of common situs picketing have been held not to violate section 8(b) (4) of the act. Common situs picketing has been held lawful where the picket signs clearly indicate the dispute is with the primary employer (Piezonki, D.B.A. Stover Steel Service 112 NLRB 1044 (1955)). Picketing at a construction project was held lawful where both companies at the site of the picketing were under common ownership and control (Administrative decision of NLRB General Counsel (1953) case No. 806). Picketing of a construction site was held not to be unlawful merely because the primary employer had a permanent place of business elsewhere where the location of that other place of business was such that picketing there would be ineffective and where the dispute with the primary employer arose out of employment at the construction site (Pittsburgh Plate Glass Company, 110 NLRB 455 (1954)). The National Labor Relations Board explicitly defined the critera for lawful common situs picketing in Moore Dry Dock Company, 92 NLRB 547 (1950). In that case, the Board stated that picketing of the premises of a secondary employer is primary if it meets the following conditions: (A) the picketing is strictly limited to times when the situs of dispute is located on the secondary employer's premises; (B) at the time of the picketing, the primary employer is engaged in its normal business at the situs; (C) the picketing is limited to places reasonably close to the location of the situs; and (D) the picketing discloses clearly that the dispute is with the primary employer.

After reviewing the above cases, it becomes quite apparent that all common situs picketing even now is not illegal per se. Generally, so long as the picketing is clearly directed to the primary employer and his employees, the picketing is lawful and becomes unlawful only when the picketing union departs from directing its picketing at the primary employer and directs its picketing or otherwise attempts to coerce the secondary employees into a work stoppage as a means to force the primary employer to meet its demands. In essence, if it is truly primary picketing, it is lawful, but unlawful if it is, in fact, secondary picketing.

With that understanding of the current state of the law with reference to common situs picketing, let's consider what would happen if H.R. 9070 is enacted into law. For one thing, a union would be completely free to picket at the construction site where the employees of many different subcontractors are jointly engaged in construction notwithstanding the fact there may be every opportunity to picket the permanent place of business of the primary employer. The result of such picketing, of course, will be that all of the employees of the other subcontractors at the consrtuction site will cease work, and whereas the rule now is that the picketing at the construction site must be clearly directed to the primary employer, the effect of the picketing can be so misleading that the employees will have no idea as to whom the picketing is directed against. If in the particular case, the purpose of the picketing is recognition or organizational, the pressure brought upon the primary employer would be such that he could hardly avoid committing an unfair labor practice himself by forcing his employees into the union whether or not they were desirous of union membership. Obviously, under such circumstances, the entire job would be closed down until such itme as the primary employer acceded to the union demands, whatever they may be, or goes out of business.

This proposed legislation can likewise be extremely harmful to many employers that are primarily manufacturers rather than contractors. Let's take the case of the manufacturer of a product who, due to the nature of the product, finds it advantageous to have his own employees install that product at the job site. Let's assume that that manufacturer's employees who install the product at the job site are nonunion. The employees commence installation of the product at the job site and a union, desirous of organizing that employer's employees, commence picketing the job site. The result, again, obviously, would be that the employees of all other employers at the common site would engage in a work stoppage. It isn't unusual at all for many employers that are primary manufacturers rather than contractors to install their own product on a job. It's particularly prevalent among employers whose business is sheet metal, roofing and acoustical materials and becoming more and more prevalent is the erection of prefabricated homes. There, the manufacturer of the prefab home, in many instances, have their own employees at the job site erecting the home. Accordingly, this legislation, if passed, would result in product boycotts.

This and several other forms of product boycotts were rendered unlawful by Congress during the last session with the passage of the Labor-Management Reporting and Disclosure Act of 1959, commonly referred to as the LandrumGriffin Act. Other forms of secondary boycotts that were outlawed by the Landrum-Griffin Act would also be legalized with the passage of the proposal being considered by this subcommittee.

Passage of the Landrum-Griffin Act was the culmination of years of hearings before the McClellan Senate Rackets Committee as well as extensive hearings before this committee. H.R. 9070 would be a severe impairment of the LandrumGriffin bill.

The legislative intent of the Taft-Hartley Act, as previously stated, was in effect to outlaw all secondary boycotts. However, subsequent interpretation of the secondary boycot provisions of the act resulted in several loopholes. Many of these loopholes were subsequently corrected in the Landrum-Griffin Act and now the proponents of this legislation would open up secondary boycotts for the benefit of the building trade unions.

Records of the National Labor Relations Board reflect that some 30 percent of all boycotts are perpetrated by the building trade unions. Clearly, the building trade unions are the greatest offenders when it some to secondary boycotts and since they use this weapon so extensively, it is no wonder that they are desirous of having the entire field of secondary boycotts opened to them for their use. Why is it that the building trade unions should be entitled to freely engage in common situs picketing that results in secondary boycotts to the exclusion of other unions? Their desire for this special class legislation is for the obvious purpose of obtaining a complete stranglehold over the construction industry and could only result in a larger monopoly than they now have to the detriment of the general public. With such a club in hand to enforce their demands, it goes without saying that the employers affected will be helpless insofar as preventing an unchecked rise in the cost of construction.

Suppose that a union represents the employees of one small subcontractor at a job site. This may involve only two or three employees that they represent and suppose further that the employees of all the other subcontractors on the

job site are unorganized. The union could use the pretense of a dispute with the employer whose employees they do represent as a club to force the other subcontractors at that job site to, in turn, compel their employees to join the union. In other words, the picketing could outwardly be for the purpose of a wage demand but in reality be a pretense for closing the entire job down until such time as the employees of all the other employers became members of the union, and how could employers possibly withstand economic pressure of this kind? The picket sign will replace the union organizers if H.R. 9070 becomes the law.

It is very possible that this proposed legislation has some extremely farreaching effects that were never contemplated by the drafters of the bill. This legislation possibly goes far beyond the limits of the construction industry alone. Certainly, my own company, the International Minerals & Chemical Corp., is not in the construction industry. However, dependent upon interpretation of this bill, it could conceivably have a devastating effect on our own business. For example, we have one plant that we built 7 years ago. However, during the 7 years since its completion, there has constantly been additional construction work going on at that site, either in the form of additions to the plant or alterations to provide for the installation of new processes. This construction work is frequently both on the interior of the plant as well as the exterior. Consequently, our plant itself becomes a construction site within the meaning of H.R. 9070. Picketing directed at the general contractor or any of the subcontractors on the job is going to have the effect of not only closing down the construction work that is being performed but is going to close down the entire plant. That is why I say it is very possible that this legislation has far-reaching effects that were never actually intended.

The stated objective of labor-management relations legislation is always to create industrial harmony. This bill will pit union against union and management against unions, thus creating havoc. It, in effect, will declare war on industrial harmony.

The prohibitions against common situs picketing that have been spelled out in the cases previously cited herein are fair and reasonable and do not deprive a labor organization of its right to picket a primary employer where not otherwise prohibited by the National Labor Relations Act, as amended. If this was a situation where under the act a union was prohibited under any circumstances from picketing at a common site, the situation would be different. However, inasmuch as such is not the case, the Illinois State Chamber urges the defeat of this measure.

Mr. THORNTON. Thank you. There are three points somewhat in addition and for emphasis we would like to make. The first is that H.R. 9070 is not needed as a technical amendment. The Denver Building Trades case seems to make it clear that primary picketing is permitted at construction sites. Also the Moore Dry Dock and related National Labor Relations Board and court cases spell out that the rules for all common situs picketing are rather clear. Then the Landrum-Griffin Act itself adds a provision to 8(b) (4) which makes it clear that primary picketing is not prohibited.

Therefore, construction unions are not discriminated against in this matter of technical picketing. Secondly, H.R. 9070 is not a proper solution for the so-called organizing problems of construction unions. If secondary boycotts are used for forcing unionization of nonunion employers, Congress will have then abandoned the principle of majority rule and majority decision insofar as a test is concerned. Then if construction unions under this act would be given monopoly powers in the construction industry, they will be empowered to effectively ban any employer-that would be any employer, even besides the primary one-or any product which they desire to ban.

Thirdly, H.R. 9070 will open up and this is very important, we believe all industry to endless disputes. Not only will this be true in the construction industry, but it will be true in manufacturing in