The Featherbedding Files, Entry 15

Thurman Arnold, The Bottleneck of Business (New York: Reynal & Hitchcock, 1940).

Chapter XI. Labor–Restraints of Trade Among the Under-Dogs

The labor movement in this country has lagged behind countries like Sweden or even England. It has presented the picture of constant battle rather than peace-time expansion. The need of fighting tactics on the part of labor to obtain the right to organize has given unions a fighting leadership that has gained many victories in Congress… As this is written the enforcement of collective bargaining has survived the attacks of three years, and my guess is that it is destined to remain a fundamental principle of the labor legislation of the future.

Yet it must be obvious to anyone that government protection of the right of collective bargaining is not working smoothly.(240)

… the National Relations Board, which enforces the Act finds itself so hampered by investigations and other types of guerrilla warfare that its whole efficiency is undermined.

The question, therefore, arises why, in a country where everyone recognizes that collective bargaining is an inalienable right of labor and where legislation enforcing it has survived every legal attack, it is today so difficult to enforce the Wagner Act without bitterness and conflict.

*The answer, I believe, lies in the failure of government to confine organized labor to legitimate labor objectives.

The right of collective bargaining is being enforced in favor of labor organizations which are using that right for illegitimate purposes, against the interests of consumers, against the interests of efficiency, and against the interests of labor itself.

(Many unions are “corrupt political machines”); Many “are interested in restricting output, in building trade barriers between states, and even in discriminating against working men themselves for the advantage of a few”  (241)

Such tendencies lead to corruption; “Corruption in unions has become notorious”

The corruption itself was, I think, an incident of allowing a legitimate organization to be used for illegitimate purposes. (242)

(…)

I hold no brief for company unions. However, if we are going to outlaw them, we must give industry some protection against the kind of banditry which always springs up in organizations that are not confined by outside pressures to their legitimate sphere of action.

Arnold’s examples: carpenters’ union preventing building of addition to Anheuser-Busch Brewing Co. in St. Louis; Chicago–labor boss prevented use of ready-mixed concrete (243)

Also complains about union rules re: free trade between the states (244)

And what has this sort of practice done to the labor movement as a whole? Today the labor movement is in complete confusion. It presents a confused picture of labor unions fighting among themselves and thus incurring the hostility of those who might be their friends (244)

This condition is not the fault of labor nor is it peculiar to labor. It is simply the kind of thing which happens when organizations are allowed to grow up and no curb is put upon the illegitimate use of their organized power… The whole labor movement suffers from the depredation of a few political gangs whom labor itself cannot remove. (245)

The remedy is not to condemn labor. (cites many examples of unions without much in the way of internal democracy) (246)

The Sherman Act is the only instrument capable of preventing the illegitimate use of organized power (246)

The use of Sherman Act against labor  made the Act seem to labor to be a weapon against it

“Private groups originally used the Sherman Act to hamper legitimate strikes with the weapon of injunction. After the weapon of injunction was taken away by the Norris-LaGuardia Act, private suits for triple damages were substituted…. These suits have the potential power of crippling the entire labor movement.”

Evolution of labor law: focus shifted to question of “what are the legitimate objectives of labor unions.” From this reality, Arnold, as Assistant Attorney General, felt compelled to spell out what an illegitimate labor objective was: “only such boycotts, strikes, or coercion by labor unions as have no reasonable connection with wages, hours, health, safety, the speed-up system, or the establishment and maintenance of the right of collective bargaining” (249)

“Progressive unions have frequently denounced… (the) ‘make work’ system as not to the long-run advantage of labor” (249)

Such unions have found it possible to protect the interests of labor in the maintenance of wages and employment during periods of technological progress without attempting to stop that progress” (249-50)

Preventing improved methods of production–as distinguished from protecting labor from abuses connected with their introduction–is, of course, not the only labor activity which goes beyond any legitimate labor purpose (250)

The types of unreasonable restraint against which we have recently proceeded or are now proceeding illustrate concretely the practices which in our opinion are unquestionably violations of the Sherman Act, supported by no responsible judicial authority whatever.

1. Unreasonable restraints designed to prevent the use of cheaper material, improved equipment, or more efficient methods. An example is the effort to prevent the installation of factory-glazed windows or factory-painted cabinets.

2. Unreasonable restraints designed to compel the hiring of useless and unnecessary labor. An example is the requirement that on each truck entering a city there be a member of the Teamsters’ Union in addition to the driver who is already on the truck.  Such unreasonable restraints must be distinguished from reasonable requirements that a minimum amount of labor be hired in the interests of safety and health or of avoidance of undue speeding of the work.

3. Unreasonable restraints designed to enforce systems of graft and extortion.

4. Unreasonable restraints designed to enforce illegally fixed prices.

 

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