Columbia Law Review Note on Featherbedding and Taft-Hartley

“Featherbedding and Taft-Hartley” Columbia Law Review, Vol. 52, No. 8 (Dec., 1952), pp. 1020-1033

Featherbedding is a method of creating or spreading employment by unnecessarily maintaining or increasing the number of employees or the time used to complete a particular job. Its basic cause is, of course, fear of unemployment, and it most commonly occurs as a result of technological innovation with its consequent displacement of labor. Whether, in the long run, technology reduces employment is a disputed question.

But whatever their permanent consequences, labor-saving improvements cause at least temporary unemployment, the effects of which labor has sought to mitigate by resorting to featherbedding practices. Accordingly, labor unions commonly request that innovations be introduced gradually or not at all, or that a minimum number of men be retained despite the introduction of labor-saving machinery.

And if labor-displacing machinery is already  in operation, the union is likely to demand that standbys, who perform no services, be hired or that work already performed by machine be duplicated by hand labor. If the employer voluntarily consents to the institution of these or other featherbedding practices, their legality cannot be questioned. Cases arise only when labor seeks to coerce an employer, usually by a strike, picket or boycott, to accept its make-work program.

Typically in such situations an injunction or a cease and desist order is sought, and it must then be determined whether the particular featherbedding demanded is lawful. Prior to 1947 the legality of featherbedding was primarily a question of state law; the two federal enactments designed to restrain the practice had only a limited applicability. The inclusion of an anti-featherbedding provision in the Taft-Hartley Act, however, has provided a new means of regulation which will probably be the basis of most future featherbedding litigation.

Since judicial interpretation of this provision is still in an early stage, it is appropriate to study the developments that led to its enactment, to analyze its scope and meaning and to evaluate its significance.

STATE ACTION

While statutes which can be interpreted so as to restrict featherbedding exist in a few states, no featherbedding cases have arisen under them, and it is from other sources that state law on the featherbedding problem has developed.

At common law an injunction will usually issue against such practices as strikes or picketing if they are used for an “unlawful” objective. Although several states have enacted statutes forbidding the issuance of injunctions in a “labor dispute,”‘ an injunction has issued in every case in which the featherbedding in question was considered an unlawful labor objective. The apparent rationalization of this contradiction in terms is that if labor’s objective is unlawful, no labor dispute can exist.

The sole remaining issue, therefore, is the lawfulness of labor’s objective. Contrary to what might be expected the determination of this issue generally does not depend on the type of featherbedding practice sought to be instituted. Except when labor demands that a self-employer hire an undesired employee-a demand often regarded as unlawful per se-the issue is whether featherbedding would, in the circumstances of the particular case, benefit labor more than it would injure the employer. Only if the injury is greater, will labor’s action to enforce its demand be enjoined.

FEDERAL ACTION BEFORE TAFT-HARTLEY

Before Taft-Hartley, federal legislation designed to curb featherbedding activities consisted of two criminal statutes, the Copeland (Anti-Racketeer-ing) Act and the Lea Act.

The Copeland Act provided that robbery or extortion accompanied by force or violence or threats of force or violence was a felony if it affected interstate commerce, but expressly exempted demands for wage payments in a bona fide employment relationship. Consequently, although labor union activities which induce the retention of unnecessary workers might be considered extortion, they were exempt. Left open, however, was the question of whether the exemption would apply to the use of force or violence to compel their hiring in the first instance. This question was squarely presented to the Supreme Court in United States v. Local 807. Here, using force and threats of force, local union members demanded and received from numerous trucking companies a union truckdriver’s daily wage for each truck entering New York City. The Court held that although union drivers might not have performed services for the money paid, they came within the exemption so long as services were offered.

As a result union activities were virtually unrestrained by the Act; only an extremely foolish union could be reached. Soon after this decision, an aroused Congress passed the Hobbs Amendment (1946) which eliminated the bona fide employment exemption in order to bring the Local 807 situation within the reach of the Copeland Act. Only one case, United States v. Kemble, has arisen under the amended act; the facts were similar to those of Local 807 and a violation was found.

Whether the amended statute also applies to cases of force or violence for the purpose of compelling retention of persons actually performing unnecessary services is, at this time, unclear. In the same session that Congress amended the Copeland Act it passed the Lea (Anti-Petrillo) Act. This statute affected only the broadcasting industry and was intended to curb solely the American Federation of Musicians and its President, Petrillo.

It proscribed all practices, engaged in willfully, which aimed at impeding or making more expensive the use of mechanical devices in broadcasting or which were designed to compel broad-casters to: (1) hire more employees than needed; (2) pay for men whom they did not employ; (3) pay more than once for services rendered; (4) pay for services not performed; (5) refrain from broadcasting without paid performers; (6) refrain from broadcasting foreign programs. The only case prosecuted under the Lea Act is United States v. Petrillo,  where the defendant was charged with compelling a broadcaster to employ more men than he needed. In the district court, the section was held unconstitutional primarily on the ground that it was ‘void for vagueness.’ The Supreme Court reversed, holding the section not so vague as to be unconstitutional because men of ordinary intelligence can usually ascertain whether an employer has all the employees he needs. On remand, however, the district court acquitted the defendant, finding no evidence that he had attempted to force unnecessary employees on the defendant willfully. Despite its extensive enumeration of proscribed labor practices, the scope of the Lea Act is highly limited. The Act is significant, therefore, not as a restrictive device, but rather as an indication of a growing Congressional awareness of the featherbedding problem– an awareness which resulted in the insertion of a featherbedding provision in the Taft-Hartley Act.

Note 1. Featherbedding naturally results in increased production costs and, as a consequence, a stigma has attached to the word. To take advantage of this stigmatization, management often classifies as featherbedding some labor demands which do not logically fall within the category. Even wage and hour demands have been called featherbedding… Labor’s belief that featherbedding will accrue to its benefit possibly rests on its acceptance of the “lump-of-labor” theory which states that the demand for all goods is inelastic, and that, consequently, labor has little to lose by forcing prices up through the employment of unnecessary workers… Furthermore, labor contends that featherbedding practices often protect the health of the worker…

Note 8. This is the practice in the printing industry. Advertisers frequently submit their advertising in the form of a matrix which can be made into a plate without employing composers. The International Typographical Union, however, requires that, after such an advertisement has been printed, the publishers allow composers to set and run off the advertisement as if nothing but rough copy had been submitted– a practice known as “bogus-setting.” After the unnecessary proof is corrected, the type is usually thrown back into the melting box.

Note 31. The impetus for enactment of the statute was Petrillo’s refusal to permit noncommercial educational broadcasts of the National Music Camp at Interlaken, Mich. The Senate passed a bill designed to eliminate only such practices. The House Committee on Interstate and Foreign Commerce, however, rewrote the bill in virtually its present form. Rep. Brown (Ohio) asserted that the bill was “specifically designed for the purpose of putting in his place and . . . cutting down to his size a man by the name of James Caesar Petrillo.” 92 CONG. REC. 1547 (1946). Rep. Lea (California), the committee chairman, described the bill as one intended to end the racketeering and extortion prevailing in the broadcasting industry. 92 CONG. REC. 1549 (1946).

FEATHERBEDDING UNDER THE TAFT-HARTLEY ACT

Section 8(b) (6), the anti-featherbedding provision of the Taft-Hartley Act, makes it an unfair labor practice for a labor organization or its agents ‘to cause or attempt to cause an employer to pay or deliver or agree to pay or deliver any money or other thing of value, in the nature of an exaction for services which are not performed or not to be performed.’ At present only a few cases interpreting this provision exist-and none have reached the  Supreme Court.

But from an examination of these cases, the section’s legislative history and the construction of a parallel provision in the Act, a reasonably complete idea of its content may be obtained.

A. Legislative History

There being no reference to featherbedding in the original Senate bill, Section 8(b)(6) of Taft-Hartley was taken primarily from a House bill which made unlawful concerted labor activity designed to force an employer: (a) to employ more persons than ‘reasonably required’; (b) to pay in lieu of hiring more persons than required; (c) to pay more than once for services; (d) to pay for services not to be performed; (e) to restrict the use of, or to pay an exaction for the privilege of using, any article or machine.

The House bill, which covered most of the activities forbidden by the Lea Act, was defended in a House Report as necessary to maintain productivity and to cope with increasing production costs. In conference,  however, it was rejected in favor of the present, much less restrictive provision. In the floor debate on the conference bill, the House was silent as to the content of the featherbedding provision. Senator Taft, however, in supporting the action of the Senate conferees, elaborated upon its meaning. He stated that while the conference committee disapproved of featherbedding, they felt it would unduly burden a court or board to determine how many men might reasonably be needed in the innumerable industries to which the Act would apply. Therefore, he said, the House provisions were rejected, and the only type of featherbedding proscribed by the bill was accepting money ‘for people who do not work. . . .’ ‘[T]hat seemed to be a fairly clear case. . . ‘ In his summary of conference changes, Taft explained that Section 8(b)(6) covered only demands akin to extortion. And in a colloquy with Senator Pepper he steadfastly insisted that the normal union demands for call-in pay and paid rest periods would be exempt since they are not ‘in the nature of an exaction.’

B. Judicial Construction of Section 8(b) (6)

Analysis of this provision in light of the few decisions dealing with it indicates that although a union demand is ‘in the nature of an exaction, for services which are not performed or not to be performed,’ no violation may be found unless the demand is accompanied by conduct sufficient to constitute a ’cause or attempt to cause’ an employer to pay money.

(…)

There are, however, dicta to the effect that ’cause or attempt to cause’ means something more than a bargaining demand. A more complete idea of the meaning of the phrase can be derived from judicial interpretations of Section 8(b)(2) of the Taft-Hartley Act which makes a union demand seeking ‘to cause or attempt to cause’ discrimination by an employer an unfair labor practice.

The first case under Section 8(b) (6) to reach a court of appeals was American Newspaper Publishers Ass’n v. NLRB. The union had demanded continuation of the ‘bogus-setting’ practice, whereby International Typographical Union composers set and then destroyed type for advertisements which had already been printed. Neither the NLRB nor the Seventh Circuit found such conduct prohibited by Section 8(b) (6). The Board decided that no ‘services’ within the meaning of the provision were to be performed because no consideration accrued to the employer. But because only five percent of the employees’ time was spent in “bogus-setting,” the Board analogized the situation to rest period demands which Senator Taft had specifically said were not ‘in the nature of an exaction.’ The court upheld the NLRB on the dual grounds that (1) work would be performed and (2) that it would be performed by regular employees hired to do composition work.

The Seventh Circuit’s rationale in the above case is in seeming conflict with that of the Sixth Circuit in Gamble Enterprises, Inc. v. NLRB. Gamble occasionally employed traveling name-bands in its motion picture theatre. Prior to Taft-Hartley, it had complied with local union demands that it pay for a local orchestra whenever a name-band was employed, even though the local orchestra was not used. But after passage of the Taft- Hartley Act, Gamble refused to continue this practice. The local union then insisted that its members be employed in some way and offered to perform services such as playing during intermissions. Gamble again refused. The local union in turn refused to consent to the appearance of a name-band which had agreed to perform in Gamble’s theatre. Since national union rules required that traveling bands play only where they have the consent of the local union, the name-band was forced to cancel its contract. The NLRB, holding that the union had not violated Section 8(b)(6), found that a mere offer of services constituted sufficient compliance with the section.

The Sixth Circuit reversed and remanded saying that NLRB’s decision would make it possible for a union to nullify 8(b) (6) by merely asserting that it desired to perform. The court, misconstruing one of Senator Taft’s statements, held that forcing an employer to pay for unneeded services falls within the statutory prohibition. Both of these constructions are of doubtful accuracy. The Board’s decision would provide a convenient device for circumventing the section entirely, while the court would attribute to the Senate an intent to ban the very practice it showed a clear intent not to ban. A more reasonable ap-proach was taken by a dissenting member of the NLRB. He suggested that a different distinction be drawn between what is not and what is in the nature of an exaction, for services not performed or not to be performed. Demands that more employees be hired to do existing work or that present   employees be paid for non-productive work incidental to their necessary and regularly performed tasks, would be lawful, whereas demands that new employees be added to perform non-existing tasks which are neither needed nor wanted by the employer would be proscribed.

This interpretation distinguishes rather well between employees who perform, or primarily perform, real services and those whose entire performance consists of services which are not genuine. It is consistent with all of Senator Taft’s explanations of the Statute and has the added advantage of reconciling the Sixth Circuit’s finding of a violation in the Gamble case, where standby work was sought, and the Seventh Circuit’s finding of no violation in the American Newspaper Publishers Ass’n case, where non-productive work by existing employees was sought.

The third, and most extraordinary, decision arising under 8(b)(6) was Rabouin v. NLRB which involved a trucker who had violated a closed shop contract, entered into in 1946, by employing a non-union driver. The union demanded payment equivalent to the wages paid the non-union driver as a prerequisite to settling the dispute arising from the contract breach. The Second Circuit, enforcing the NLRB’s order, found no violation on the part of the union. Relying on the fact that the work had been done, albeit by the non-union driver, and that 8(b)(6) was aimed at standby practices, the court held that this section does not require that the one who is to receive the wages must have done the work.

(…)

Applying this test to union demands that machinery not replace men, or that men replace machines, the probable conclusion would be that 8(b) (6) does not prohibit such demands. Suppose, for example, that a musicians’ union demands that an orchestra replace a juke-box in a local tavern or that a machinists’ union demands that screws be threaded by hand instead of machine. In both these situations the work to be performed by the union would be work both needed and wanted by the employer, although he would ‘want’ it done by different methods.

CONCLUSION

Advancing technology makes possible the substitution of a machine for a man, an unskilled or semi-skilled worker for a highly-trained craftsman. This problem of technological unemployment cannot be entirely eliminated except by eliminating technological improvements of the labor-displacing variety, which is quite unlikely and probably undesirable. But, although there is inevitably some hardship when a skilled worker is through no fault of his own replaced by a machine, there exist, either now or potentially, means of satisfying our desire for efficiency without totally disregarding the interests and the importance of the individuals involved.

Featherbedding is one means of mitigating the adverse effects of unemployment caused by technological improvements or otherwise. It is relatively easy to hypothesize a situation in which it may well be the most desirable solution. Hand glassblowers, for example, are highly skilled craftsmen who, generally having been trained in Europe where they were born, are mostly older men. Presumably, too, they know no other trade and could learn one only with great difficulty. If, therefore, they were replaced by machine processes, it would be quite reasonable to permit them to featherbed and thereby spread the cost of the innovation among the consumers of glass until such time as the ranks of the unneeded glassblowers were depleted. At least it can be said for such a solution that the cost of the innovation would be borne by those who benefited most from it rather than by those least capable of bearing such a burden.

The premise, of course, is that our economy is wealthy enough to delay for a short time the full benefits of technological improvements where human values are at stake,-a premise not often disputed. Certainly there are other situations where featherbedding is economically unjustifiable. An example of such a situation would be one where the economy is operating at high gear and the displaced labor, being unskilled or having a transferable skill, has job mobility.

Finally, even if featherbedding is desirable in a particular situation, some varieties of featherbedding programs may have economically more objectionable consequences than others. There seems little excuse for a program such as that in the music industry which shows signs of perpetuating itself indefinitely.

Unfortunately Congress and the courts have rudely ignored the economic considerations which should determine whether any featherbedding is desirable and if so, what sort of featherbedding.

Consider for example, the rule that a union may lawfully demand that five men do the work of four but that it violates Section 8(b)(6) if it demands that four men work while one is paid for doing nothing. Economically the two situations are indistinguishable; in both the work potential of one man is lost or wasted. From this and other rules regulating featherbedding and from the legislative history of the Taft-Hartley Act, it is apparent that, whether or not Section 8(b) (6) is well-phrased, it was sponsored and is being applied by lawyers who have failed to give proper consideration to the economic factors involved.

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