It has also been held that a union designated under the Wagner Act may - a use a closed-shop agreement with an employer as a means of discriminating gunst some of the employees in the designated unit. See Wallace Corp. v. ▼ L. R. B., 323 U. S. 248. The court reasoned that the union, by its selection is fargaining representative under that Act, became the agent of all the emvees “charged with the responsibility of representing their interests fairly mpartially."

Pased partially upon the foregoing rationale, and at times solely upon the - and that a union which seeks no compel membership within its ranks may at the same time seek to exclude eligible workers from membership, it has beld in some cases that a union may not strike for a closed shop where it closed its books to outsiders. See James v. Marinship Corp., 155 P. (2d) Calf. Supreme Court, 1944); Annotation: Closed Shops and Closed Unions * 444), 160 A. L. R. 918.

The Wagner Act guarantees to workingmen a free choice in the selection thurgaining representatives, yet permits the making of a collective agreeproviding for compulsory union membership. The N. L. R. B. has sought wacile these conflicting policies by holding that an employee may not be harged under such an agreement where he is expelled from the union for ating a change in union representation when the current agreement ex* See, for example, Matter of Portland Lumber Mills, 64 NLRB 159.

* foregoing rules do not, however, work any substantial encroachment upon large body of rules and principles (set forth above) which grant a broad d virtually unlimited charter to unions under which they are given rights to discipline and expel members. The union's right to charge excessive initiafees is not reached by these peripheral doctrines. The union's right to let members to rules, regulations, assessments, fines and all sort of disciplinactors, or to retaliate against a member for his exercise of civil rightses remain in effect today.

Te suzgestion is often made that the closed shop could best be dealt with by arding that the union which seeks it should not be a closed union. If the a is open, however, the point is made that it should be permitted to enter a closed-shop agreement.

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1's respectfully submitted that the various problems involved in the closed5 issue are not solved to any substantial extent by permitting the closed „to an open union. For although the union may be open, the right to become mber may have dubious value. For example, the union may place the tember at the end of a long seniority list. Again, the new member may laced in a class of membership depriving him of certain important rightsteak freely, to elect union officers or to advocate policies which he deems be benencial to his own interests, but which the "powers that be" believe to mical to their own interests. Yet again, the newly enrolled member may 1 "quired to pay union dues though he is unemployed, and he may be expelled membership for failure to pay such dues. No one gets a job simply be ., in the exercise of a legal right, he secures union membership. The legal in these circumstances is little more than an artificial accretion which satisfy some, but which constitutes no solution of the underlying problem. e underlying problem is how to reconcile a union's desire for security ressed through the medium of compulsory union membership) with enagement of the kind of initiative which brings newcomers into the economic Validation of the union shop as distinguished from the closed shop would * -1 recognition of the legitimate claim by labor unions that all who secure reft of union organization should contribute to its support. When, howme", a union seeks a closed shop it seeks much more than recognition of its »timate interests. Having regard for the manifold restrictive practices adopted or the elosed shop and its debilitating influence upon industry, as evidenced e brinting and publishing trades, and with due regard for the interest in *ng the channels of employment opportunities open, it would seem that ", closed shop should not be countenanced.

CONCLUDING REMARKS

In its Report on Trade Union Democracy, the American Civil Liberties Union (p. 7):

"The increasing responsibilities placed on trade unions by governmental protection of their democratic rights demand that they in turn accept the re

85905-49-pt. 2-19

sponsibility for the democratic conduct of their own affairs. An autocratic union, run without the full participation of its membership, cannot morally claim dema cratic rights in dealing with employers through the intervention of pabur agencies."

Thre

The Committee also recognized that disciplinary action by labor unions may affect the right to work, and hence raises a civil-liberties problem where exercised for illegitimate purposes. An examination of the disciplinary practices and procedures of labor unions was made, and the observation offered that defects do exist. A distinction was drawn between the union's legitimate interest in pre serving its strength, and its misuse of power to affect the civil liberties of indiviuals. Hence, the Committee said (pp. 28-29), “members should not hẹ penalized or expelled for activities involving their basic democratic rights. include: (1) the right to criticize union officers; (2) the right to inform feiicw members of their opposition; (3) the right to organize groups within the un of, to oppose the administration; (4) the right-where information channels with " the union are closed-of voicing protests outside the union." The problem, then, seems clear. It is also clear that some kind of legislation is necessary to deal with it. The American Civil Liberties Union recommended legislation: (1) punishing discriminatory exclusion from membership; (2) re quiring hearing by an administrative agency on suspensions or expulsions, wit, review by an appellate court; (3) requiring similar hearing and appeal in regar! to the application of democratic rights under union constitutions (p. 16). This would require extensive legislative intrusion into the internal affairs of labor unions. The Taft-Hartley Act, by contrast, takes a different tack. Recog nizing the unwisdom, and perhaps also the unworkability of an elaborate of legislative rules circumscribing the internal affairs of labor unions, the TaftHartley Act allows labor unions to continue to operate under common-law r'g''s, but deprives them of the right to secure the discharge of an employee from ! ́s employment where he is expelled from the union for a reason unconnected with the nonpayment of reasonable initiation fees and periodic dues. Section 249 ignores the approach both of the Taft-Hartley Act and of the American Civil Libert was Union. Indeed, Section 249 completely ignores the problem. For this reass it is wise to bear in mind the common-law rules on the subject, and to consider these rules against the background of the problems raised by union abuse of their powers granted to them under such rules.

These are the raw materials which point up the need for corrective legislation A labor union, though unincorporated, is not a private fraternity or club. It is a quasi-public institution which, through the medium of agreements providing for compulsory union membership and by other means, may substantially affect the worker's livelihood. The common law does not, whereas the Taft-Hartles Act (and the American Civil Liberties Union) does, recognize this essetta distinction.

Respectfully submitted.

LUDWIG TELLER, 295 Madison Averne, New York 17, N. Y.

MEMORANDUM SUBMITTED BY LUDWIG TELLER TO THE SENATE COM MITTEE ON LABOR AND PUBLIC WELFARE, AT ITS REQUEST, PRO POSING A LAW REGARDING SECONDARY BOYCOTTS

PRELIMINARY Statement

The secondary boycott poses two main problems: (1) in what circumstances should secondary boycotts be outlawed? (2) What kinds of interference with business should be interdicted when carried on in unlawful circumstances? Tha second problem includes the question whether not only strikes (or inducements to strike) but also interference with business patronage or good will should he outlawed.

The purpose of this memorandum is to show that—

First, the Taft-Hartley Act goes too far, whereas S. 249 (the Thomas bill) does not go far enough, in outlawing the circumstances in which a secondary boycott may be carried on. A fairly drawn provision dealing with secondary boycotts should (1) recognize labor's contention that an employer who does business with another employer knowing that he is involved in a labor dispute with a union thereby becomes a co-combatant of the union; (2) protect an employer who did

business with another employer involved in a labor dispute, where such business was done in good faith without knowledge of the dispute.

Stated otherwise, a secondary boycott should not be permitted unless the secondary employer is shown to be a party to the primary labor dispute by having done business with the primary employer with knowledge of his dispute.

The term "doing business" is meant in general to include the sale or purchase of goods, or the furnishing or securing of services.

Second, the definition of "secondary boycott" both in the Taft-Hartley Act and in S. 249, being limited to strikes or inducements to strike and therefore failing to extend to picketing and boycotting except where its purpose is to bring about strike or work stoppage, does not sufficiently encompass the types of secondary activity which should properly be censured.

PROPOSED AMENDMENTS TO S. 249

Based upon the foregoing it is suggested that S. 249 be amended in the following respects:

1. Section 2 (11) should be altered to read as follows:

"The term 'secondary boycott' means-(a) a strike or a concerted refusal in the course of employment by employees of one employer to produce, manufacture, transport, distribute, or otherwise work on or in connection with articles, materials, goods, commodities, or services because they were or are to be manufactured, produced, distributed, or supplied by or to another employer; (b) any other interference with the business of one employer or other person because he purchased or sold articles, materials, goods, or commodities, or furnished or secured services which had been or were to be manufactured, produced, distributed, or supplied by or to another employer." 2. Section 8 (b) dealing with union unfair labor practices should be altered by adding a new subdivision "(3)", providing as follows:

"To engage or attempt to engage in, or to induce or encourage any person to engage in, a secondary boycott in the circumstances or for the objectives set forth in subdivisions (1) and (2), or where articles, materials, goods, commodities, or services were purchased or secured by, or sold or supplied to, one employer or other person in good faith in the ordinary course of business and without knowledge that the same was, or was intended to be, manufactured, produced, distributed, or supplied by another employer then involved in a labor dispute."

As explained hereafter, it may possibly be contended that the foregoing provision is unduly restrictive in that it does not include all the situations in which secondary boycotts are unfair. It is therefore suggested in the alternative that the proposed new section 8 (b) subdivision (3) provide as follows:

"To engage or attempt to engage in, or to induce or encourage any person to engage in, a secondary boycott unless articles, materials, goods, commodities or services were purchased or secured by, or sold or supplied to, one employer or other person with knowledge that the same was, or was intended to be, manufactured, produced, distributed or supplied by another employer then involved in a labor dispute."

The difference between the first wording of new section 8 (b) (3) and the alternative wording lies in the fact that the first wording states the circumstances under which secondary boycotts may not be carried on; the second, by Contrast, defines the situations in which such boycotts may be carried on, thereby declaring that secondary boycotts carried on in any other circumstances are illegal.

3. Section 8 (b) subdivisions (1) and (2), dealing with union unfair labor practices arising out of jurisdictional disputes, should be altered by deleting the words a secondary boycott or so as to avoid confusion, and for the further purpose of clarifying that the illegality of the secondary boycott stems primarily from its form rather than from its objective.

OTHER MODIFICATIONS TO S. 249 NECESSARY

In proposing the above amendments to S. 249 it is not suggested that these should be the only amendments or the only subjects with regard to which S. 249 is deficient. Other proposals dealing with other subjects have heretofore been made by the writer in a written memorandum and oral testimony furnished to the committee on February 5, 1949.

INJUNCTIVE REMEDY NECESSARY

The proposed amendments deal solely with the substantive side of the ser ondary boycott. They do not touch on the procedural question whether the court. injunction remedy or simply an administrative cease-and-desist order should te utilized to bring about the cessation of illegal secondary boycotts. As stated to the committee on February 5, 1949, the writer believes that the administrative remedy is too slow moving, and that a court injunction is necessary in cases of secondary boycotts.

To support this view further, the writer furnished to the committee reprints if his recently published article in the Virginia Law Review dealing with the in junctive remedy. (See Teller, The Taft-Hartley Act and Government By Injure tion, 35 Va. L. Rev. 1 (1949).)

ALLEGED CONSTITUTIONAL PROBLEM AS TO STRIKES AND PICKETING

It is also urged in that article that there is no absolute right to strike or ergage in picketing; that reasonable statutory limitations of strikes or picketing should not be difficult under our Constitution to sustain in the courts. Most of the recent decisions of State courts have held that picketing for unlawful laber objectives may be enjoined despite the partial identification (in some circum stances) of picketing with free speech in certain decisions of the United States Supreme Court.

The United States Court of Appeals for the Tenth Circuit has recently sne tained the constitutionality of the Taft-Hartley Act's prohibition of secondary boycotts in a case involving peaceful picketing (United Brotherhood of Carpen ters & Joiners v. Sperry, 170 F. (2d) 863 (C. C. A. 10, 1948)). The court observed that

the guaranty of free speech and free press contained in the fire amendment does not compel the United States to tolerate in all places an: under all circumstances even peaceful picketing, if it has a harmful eff on interstate commerce. The constitutional right of free speech and from press postulates the authority of Congress to enact legislation reasona adapted to the protection of interstate commerce against harmful encroact: ments arising out of secondary boycotts."

The National Labor Relations Board has recently held to like effect in a case arising out of the same controversy as that considered by the Court in the Sperry case. Matter of United Brotherhood of Carpenters & Joiners of Amerus (Wadsworth Building Co., Inc.) Case No. 17-CC-1 (February 21, 1949).

POINT ONE

The Taft-Hartley Act goes too far, whereas S. 249 does not go far enough, in outlawing the circumstances under which secondary boycotts may be carried on

The rule under the Taft-Hartley Act

Section 8 (b) (4) (A) of the Taft-Hartley Act outlaws the secondary boyce** (at least where a strike is used to effectuate it) without regard for the extent te which the boycotted employer may by his actions become an ally of the employ+-* involved in the primary labor dispute. In other words, the Act declares the fort. of the secondary boycott to be illegal per se without regard to the circumst...bers under which it is carried on.

The theory underlying the Act was anticipated in the case of Pacific T 1-setting Company v. International Typographical Union (125 Wash. 273 (216 Par 358 (1923)), where the court stated:

"The courts holding that a secondary boycott is unlawful have done ← upon the broad theory that one not a party to industrial strife cannot, against his will, be made an ally of either one of the parties for the purpose of accomplishing the destruction of the other."

There appears to be one exception to the blanket ban of the act, i e., a es where an employer X, engaged in a dispute with Y union, secures Z to do Xwork while the dispute is in effect. It has been held that the picketing of Z may not be enjoined though it induces a strike of Z's employees, the court ressoning that Z was an ally of X, not a third party "doing business" in nerazl fashion with X within the meaning of the Act (See Douds v. Metropolitan Feder ation of Architects, Engineers, Chemists, and Technicians (75 F. Supp 672 (D. C. S. D. N. Y. 1948)).

With the foregoing exception, however, the act broadly outlaws strike-inducing secondary boycotts.

Labor's contentions as to secondary boycotting

In so doing, it is submitted that the Act fails to take adequate cognizance of labor's contention that the secondary employer comes within the area of the primary dispute by engaging in business with the party to that dispute, since by so doing the secondary employer becames a cocombatant of the union.

There would seem to be a substantial measure of justification for labor's contention. In any event, legislation dealing with the secondary boycott should recognize that the arguments pro and con are very close. It is difficult to deny some validity to the argument advanced by labor spokesmen that a union should have a right to boycott not only the employer with whom it has a legitimate controversy, but also the person who aids that employer by buying goods from him or selling goods to him, thereby becoming a cocombatant in the primary dispute.

The State courts have not entirely refused recognition to labor's contention.
In Goldfinger v. Feintuch (276 N. Y. 281, 11 N. E. (2d) 910 (1938)), the New York
Court of Appeals modified its former rule denying any legality to secondary
picketing, and indicated as follows the reason for its modification:

"Where a manufacturer pays less than union wages, both it and the re-
tailer who sells its product are in a position to undersell competitors who
pay the higher scale, and this may result in unfair reduction in the wages
of union members."

The following are State court decisions recognizing the legality of secondary picketing:

Alliance Auto Service, Inc., v. Cohen (341 Pa. 283, 19 A. (2d) 152 (1941)); Fortenbury v. Superior Court (100 Cal. Dec. 407, 106 P. (2d) 411 (1940)); Johnson v. Milk Drivers & Dairy Employees Union (195 So. 791 (La. 1940));

Wiest v. Dirks (20 N. E. (2d) 352 (Ind. Sup. Ct. 1939)).

The force of these decisions, as regards the present inquiry, is weakened in some cases by the fact that they were reached under State anti-injunction laws, though in most cases State courts have held that they retain jurisdiction despite such laws to enjoin boycotts carried on in illegal circumstances.

There are also several recent decisions holding that secondary picketing is unenjoinable because of the identification of picketing with free speech. Contrary decisions, despite this alleged identification, may also be found. The cases are collected in 1 Teller, Labor Disputes and Collective Bargaining (1940) (1947 and 1948 Supp.) Secs. 123, 136.

A number of decisions permitting secondary picketing limit this permission to picketing of the "product" rather than picketing of the seller of the product. This is particularly true in New York, where it is also held that picketing may not be carried on against one who purchases goods for the purpose of consuming or using it, as distinguished from one who purchases goods for resale. Compare American Gas Stations v. Doe (250 App. Div. 227, 293 N. Y. S. 1019 (1937)), with Hydrox Ice Cream Co., Inc., v. Doe (250 App. Div. 770, 293 N. Y. S. 1013 (1937)). This distinction is made even in cases where the goods, though not themselves resold, are used as ingredients for merchandise which is resold. Picketing in such circumstances is held illegal. (See Elizabeth Arden Sales Corp. v. Hawley, 176 Misc. 821, 28 N. Y. S. 2d 936 (1941) aff'd 261 App. Div. 953, 27 N. Y. S. 2d 423 (1941).)

It is submitted that these distinctions are too fine; they are therefore omitted from the proposed amendment to S. 249. Moreover, there is very little difference between picketing a product and picketing the seller or purchaser of the product; aside from the fact that the legend inscribed on the picketing signs (which very few people read) may differ, the picketing has virtually the same purpose and the same effect.

Several other problems have arisen under the rule (sometimes called the "unity of interest" rule) permitting the picketing of a product, including the question whether thereby not only the buyer from an "unfair" employer but also the seller to such employer may be boycotted. None of these problems would arise under the proposed amendment to S. 249; it is believed that the underlying distinctions which they pose are unfair to union contentions insofar as they prohibit the