III. CORRUPT PRACTICES AND THE JURISDICTIONAL DISPUTE Section 302 was enacted as a means of preventing collusive and abusive practices which had arisen between management and labor in many industries. It should be recalled that prior to 1947 the construction industry was marked by the closed shop, the closed union, the jurisdictional dispute, the secondary boycott, the product boycott, the permit fee, arbitrary discrimination, and other undesirable employer-employee practices. The Taft-Hartley Act undertook to correct these conditions and to impart a greater measure of independence and integrity into labor relations in these areas. The Law has achieved much toward this end. These accomplishments deserve commendation and they should be preserved. However, the enactment of H. R. 1153 may result in the return of those corrupt practices which Section 302 was designed to eliminate. Since the language employed by the amendment is susceptible to various interpretations, the limits of which remain unspecified, management and labor could once again collusively embark upon a course of corrupt practices with the apparent sanction of Congress. Moreover, the construction industry is one in which an employer must utilize various craftsmen, represented by competing unions, in order to perform his services. Many of the employers in this industry have contracts with a dozen unions or more. Strong rivalries exist between these unions as to the jurisdiction relating to a product or service to be employed in the construction process. The carpenters and plasterers represent one such rivalry, the plumbers and laborers another, and the millwrights and machinists still another. Whichever union proves victorious in a jurisdictional dispute carries with it additional jobs, however the employer generally suffers. The pending legislation will create a climate which will expedite the rapid resurgence of jurisdictional disputes in certain segments of the construction industry. If jointly administered funds are permitted, it is undeniable that their administration will become entangled in the jurisdictional ambitions fo the unions involved. It is apparent that unions could exert tremendous pressures to assure work assignments to their craft if they had an equal voice in industry advancement funds. "The passage of such legislation. will allow for a heavy club to hang over the head of management and will have the effect of compounding one of the most serious labor relations problems in the industry-the jurisdictional dispute." (Hearings Before the General Subcommittee on Labor, 89th Cong., 1st Sess. at 17 (1965).) In turn, there would be created additional problems in the administration of joint funds and present for management a burden which it may wish to be shed of in the face of such obstacles. This will result in the dissolution by management of product promotion programs, thereby denying their recognized advantages to the public as well as to the industry. IV. THE LIMITATIONS OF THE BILL A serious objection to this legislation may be found in the fact that its coverage is limited to the construction industry. The advocates of the Bill extol its alleged virtues. However, if jointly administered advancement funds are desirable to both labor and management then they should not be restricted to the construction industry. The hearings amply reveal that industry advancement or promotion funds exist in considerable number outside of this industry. Likewise, Section 302 covers a broad range of labor-management relations in virtually all industries affecting interstate commerce. It would appear to be basically unfair and discriminatory to subject the employer in one particular industry to the provisions of H.R. 1153 without his counterpart outside the industry being also included within its terms. If jointly administered funds are advisable to promote plaster board against dry walls or other prefabricated materials, then they should also be acceptable in the promotion of Chevrolet or Buick against one of its competitors. If management and labor are to join hands in promoting the long term growth of an industry, should not other industries also be joined? H. R. 1153 would result in the Plasterers Union and its employers establishing jointly administered funds whereas the establishment of a similar fund within the garment industry would subject the parties to the likelihood of criminal prosecution. It would seem highly inappropriate that Congress lay down rules designed to affect one industry without also including other industries where similar funds are found. V. THE VAGUENESS OF H.R. 1153 The amendment, as it reads, does not define with any degree of particularity what funds are to be considered within the definition of product promotion. This ambiguity may lead to grave consequences for if an employer is amenable to the establishment of a jointly administered fund, and the fund is subsequently determined not to fall within the product promotion exception then and in that event the employer will be exposed to criminal responsibility. In this respect, an exception to a general statutory prohibition must be narrowly construed. Many funds, although they do not directly promote the employer's product or its application, do have an indirect and related effect upon its promotion. An employer therefore may innocently and in good faith establish such a fund which he believes comes within the exception only to discover that the courts do not agree with his construction of the statute. In some cases this uncertainty will promote the collapse of industry funds because, presumably, many employers or groups of employers would rather face the loss of the benefits of a product promotion program than to be faced with the specter of prosecution and the imposition of criminal penalties. Moreover, the ambiguities inherent in the Bill's language will leave most, if not all, funds in a state of legal uncertainty. The validity of such funds will require judicial clarification, thereby necessitating substantial and unnecessary expense. VI. JOINT COLLECTIVE BARGAINING BOARDS The second phase of H. R. 1153, which provides for jointly administered unionmanagement funds to defray the cost of establishing and maintaining a joint board or committee to interpret collective bargaining agreements and to resolve disputes arising therefrom, is equally objectionable. As the law now stands, each party to a collective agreement is free to choose its own agents, free to assert any and all claims and defenses, and free to compensate such representatives as it sees fit. In fact, the underlying rationale of all federal labor relations policy has been the encouragement of arms-length collective bargaining. This process necessarily requires free unions and free management, each asserting its own right and each assuming its own obligations. This procedure is the converse of any concept of collusion, commingling, or the lack of identity. The pending amendment, if enacted, would impede rather than strengthen the collective bargaining process. The minority views accompanying H. R. 1153 set forth the basic objections to this feature of the Bill as follows: "In connection with this proposal, we again feel obliged to emphasize that agreements designed to carry out the terms of collective bargaining agreements and to resolve disputes arising under such agreements are perfectly valid under existing law. Every year, hundreds of thousands of such agreements are negotiated, many containing elaborate grievance procedures and even binding arbitration. All these agreements are valid. All that present law prohibits is the administration of such agreements through the creation of a fund administered jointly by union and management. This is as it should be. Each party should be free to act in its own behalf in asserting its position with respect to any question of interpretation or any dispute arising under a collective agreement to which it is a party. That right would be encumbered, obscured, and diminished if the exercise of that right of action should be brought under the joint control of a potential adversary. "As the law now stands, each party to a collective bargaining arrangement is free to choose its own agents and representatives, free to assert any and all claims and defenses, free to compensate such representatives as it sees fit. When this process becomes a jointly administered arrangement, we create a situation rife with the possibility that these rights will be substantially eroded if not completely destroyed." The Bill, therefore, would impair and independent, arms-length settlement of grievances and disputes which for so long has been a fundamental principle of our labor-management relations. It follows that the Bill could constitute a serious erosion of the National labor policy which Congress has so painstakingly sought to preserve and to foster. ADDENDUM LEGISLATIVE HISTORY 1. Hearings were conducted by the Subcommittee of the Committee on Education and Labor on April 17, 1962, August 6 and 7, 1963, and March 9, 1965. 2. On April 29, 1965, the General Subcommittee on Labor reported H.R. 1153 to the Committee on Education and Labor, with amendment. On the same day, the Committee on Education and Labor ordered H.R. 1153, with Subcommittee amendment, reported to the House. 3. On August 10, 1965, H.R. 1153 was passed by the House of Representatives. 4. The Senate, on August 11, 1965, referred the Bill to the Committee on Labor and Public Welfare. REFERENCES 1. Hearings before the General Subcommittee on Labor of the Committee on Education and Labor, 89th Cong., 1st. Sess. (March 9, 1965). 2. H.R. Rep. No. 291, 89th Cong., 1st Sess., pp. 1-11 (1965). 3. 111 Cong. Rec. 19136-19143 (daily ed. Aug. 10, 1965). Senator YARBOROUGH. We declare the oral testimony closed. We will leave the record open until 5 o'clock tomorrow afternoon, Saturday, October 15, for any additional written statements by any of the persons listed as witnesses who could not make it or by any of the witnesses or by any other interested parties. If you have a statement you want to make on the position of anyone, file it with the staff here not later than 5 o'clock tomorrow afternoon. Thank you very much, gentlemen, for a very informative hearing. (The statements and other pertinent material on hand and subsequently supplied by other interested parties follow:) SHEET METAL & AIR CONDITIONING CONTRACTORS' Hon. Senator RALPH YARBOROUGH, Chairman of the Committee on Labor and Public Welfare, DEAR SENATOR: I was scheduled to give oral testimony on H.R. 1153 and due to severe fog conditions I was unable to appear to give my testimony. It was read for the record by our Executive Vice President of the Sheet Metal and Air Conditioning Contractors' National Association, Inc., Joseph D. Wilder. Our Director of Industry Relations, James Ferguson, was also present. I understand the record will be left open until five o'clock, October 15, 1966. I wish to add some views of my local experience which I had intended to state with my written testimony. Please enter these statements into the record: Gentlemen, in addition to serving nationally, my local experience covers five years of serving as Chairman of The Roofing and Sheet Metal Contractors Association of Philadelphia and Vicinity Industry Advancement Program. All of the contributions to our Fund are made by contractors and our Fund is fully managed by contractors. Our yearly statement and all of our activities are open to the public and well publicized. We had an experience in New Jersey with an industry Promotion Program which originally was founded with three trustees from management and three trustees from the union and it failed. The trustees could not even agree on a man to serve as administrator of the Fund and for nine months, until counsel was used to reconstruct the trust agreement, the funds accumulated and nothing was accomplished. I believe the net effects of this bill would create a situation similar to the merger of the Democratic and Republican parties. Both would have equal rights to run the government; however, all of the money would be coming from just the Democratic party. Gentlemen, you know that this would not last long, just as if you pass this Bill 1153 into law, many of the Industry Funds which are now solely managed by contractors will be disolved. I wish to thank all of the members of the Senate on this committee for allowing me to give my testimony. Very truly yours, WILLIAM J. KNECHT, PREPARED STATEMENT OF JOHN M. KEATING, COUNSEL, NATIONAL MILLINERY PLANNING BOARD Mr. Chairman, I am the General Counsel of the National Millinery Planning Board which is a national organization set up jointly by the millinery manufacturing industry trade associations throughout the United States and the United Hat Cap and Millinery Workers International Union. I think it can be said without hesitation that I am authorized to speak for practically the entire millinery manufacturing industry. On August 27, 1965 I addressed individual letters to the individual members of the Labor and Public Welfare Committee: "In re H.R. 1153-89th Congress First Session. "DEAR SIR: The above bill passed the House on August 10, 1965. It provides for an amendment of section 302(c) of the Labor-Management Relations Act, 1947, to give special treatment to funds for labor-management programs for the promotion of product, etc. in the construction industry. "We know of no reason why the construction industry should be singled out and given favored treatment. "In the millinery industry, there is a fund set up jointly by labor and management to provide for promotion of product and other phases of the welfare of the industry. We understand the same thing is true in the embroidery industry and in other portions of the apparel industry. "We feel that consideration should be given as to whether this present House bill should be passed in its present form or whether it should be made broad enough to cover any such fund in any industry. "We would be very glad to come to Washington and sit down with a representative or representatives of the Committee and elaborate on the matters touched upon in this letter. "We are hurrying this to the Committee so that untoward action will not be taken without knowing of the fact that broader problems are involved in the same general area. "Very truly yours, "NATIONAL MILLINERY PLANNING BOARD, "JOHN M. KEATING, General Counsel." As a result, on Thursday, October 13, 1966, I received a telegram inviting me to appear before you on October 14th. In the first place, I am wholeheartedly in favor of the intent of this bill which is to make certain that the laudable purposes of certain industries in setting up certain funds are not thwarted or condemned because of the peculiar restrictive language of Section 302 of the Labor Management Relations Act. This thwarting of laudable intent has occurred under the present language of Section 302 of the Act. The Ninth Circuit Court of Appeals stated in Cement Masons v. Paramount Plastering, 310 Fed. (2d) 179, said: "We do not quarrel in the slightest with the laudable objectives of the trust amicably created by labor and management in this case. We sympathize with the efforts of both labor and management to solve a vexing industry problem. *** But like so many of such present-day problems, our duty is to rule in accordance with that which the Congress in its wisdom has seen fit to enact. We cannot widen the door when the door sill has been carefully tailored by the representatives in Congress. The relief sought by the appellants herein must be found in congressional and not judicial action." However, I submit that the present bill should be amended in certain respects. Its wording now only applies to the construction industry. There is no logical reason for this. Every industry has the same needs as the construction industry. For example, the millinery industry has a promotion fund which is extremely well managed, successful and a most laudable undertaking, to improve the conditions of this declining industry which is beset by hatlessness of American women arising from modern suburban living along with competition from European low-wage imported finished hats. The bill should be amended to apply to all American industry, and eliminate the reference to the construction industry. Second, the language of the bill relating to the purposes for which funds can be set up should be widened. Promotion is laudable. So is arbitration of labor disputes. It is just as laudable and desirable, however, to maintain such a fund to finance an organization to improve the general industry welfare. For example, it is proper and desirable to collect statistics and to keep the industry abreast of current industry economic conditions by periodic economic reports. It is equally desirable to finance an organization to analyze these economic conditions and to propose plans for remedies to adverse economic conditions or to plan for and propose training and education for new young workers, designers and otherwise to encourage young blood to come into an industry. I could recite many, many, equally desirable programs. I urge that the bill be broadened to provide that the funds can be used to finance organizations for the general industry welfare. Senator WAYNE MORSE PORTLAND, OREG., October 13, 1966. Understand H.R. 1153 scheduled for hearing before Senate Labor Subcommittee tomorrow. Request delay so that testimony may be prepared for committee bill as written does not appear to limit itself to products promotion funds as we intended. Your consideration will be appreciated. ROGERS CONSTRUCTION Co., PREPARED STATEMENT OF EDWIN ROBIDOU, EXECUTIVE SECRETARY, PLUMBING INDUSTRY PROGRESS & EDUCATION FUND, EUGENE, OREG. Our group wants to go on record as opposing H. R. 1153 that would do away with industry promotion funds. Our aims are: (as quoted from our Declaration of Trust) The Employer's Ass'n and the Union are desirous of promoting the welfare of the plumbing industry in the State of Oregon and also the welfare of the public at large through the development of improved plumbing and its more widespread availability. Our purposes are: (as quoted from our Declaration of Trust) 1. PIPE of Oregon shall be utilized to promote the Plumbing, Heating, and Cooling Industry through such action as, but not limited to, a public relations and advertising program, contract specification improvement and promotion of the contract method for both new construction and maintenance work. 2. The advancement of the Plumbing, Heating, and Cooling Industry through securing the cooperation of the various firms and persons engaged in such businesses and collecting, correlating and disseminating all information to them. 3. To promote through cooperative effort and published facts the standards concerning the Plumbing, Heating, and Cooling Industry with the general public so that the general public will be acquainted with said standards and objectives. 4. To improve, extend, and protect the contracting of plumbing, heating, and cooling work. 5. To educate engineers and architects and awarding bodies to award work with the jurisdiction of the Union to the Contractors covered by this trust agreement and collective bargaining agreements with the Union. 6. To promote the general welfare of the industry and to promote its standards and specifications. 7. To acquaint the public at large with the work of the industry and to further the good public relations. In Oregon we feel that relations between industry and labor has been greatly strengthened by this organization. We feel that we have done a lot of good both for our industry and union employees and ask that you go on record as opposing this bill and similar types of bills. We thank you for your consideration on this matter of great importance. We feel that it is not in the best interests of the general public. |