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Mr. TABER. I believe I would like to have that in the record. Mr. CANNON. Without objection it may be put into the record. (The opinion referred to is as follows:)

March 13, 1945.

MEMORANDUM

To: Arthur M. Ross, chairman, New Case Committee.
From: Jesse Freidin, general counsel.
Subject: Jurisdiction over employees engaged in bottling milk-Walker Gordon
Laboratory Co. 111-1466-D.

QUESTION In your memorandum to Mr. Mathews of March 10, 1945, you ask whether the Board has jurisdiction under the War Labor Disputes Act over the employees in the above case.

CONCLUSION It is our opinion that the Board does have jurisdiction over these employees.

FACTS

The company operates a farm and milk-bottling plant. On the farm the company during the milking season tends, feeds, and milks cows which have been delivered to it under lease for that purpose by individual farmers. The milk thus obtained is taken to the company's bottling plant where it is pasteurized and bottled. The union in this case represents 37 workers employed in the bottling plant or in connection therewith.

The parties were unable to agree on the terms of a first contract. On February 21, 1945, the resulting dispute was certified to the Board. The Board subsequently received a letter dated February 22, 1945, from Mr. Charles W. Holman, secretary of the National Cooperative Milk Producers Federation, expressing the view that the employees in this case were subject to the jurisdiction of the War Food Administrator under the regulations and interpretation thereof issued by Lim and that the dispute should be handled by him rather than by the War Labor Board. You state in your memorandum to this office of March 10, that you have already communicated with respresentatives of the War Food Administrator, and that they have indicated that while they believe that agency would have jurisdiction over any voluntary adjustments in the wages of the present employees, the War Labor Board would thereby not be excluded from assuming jurisdiction of a dispute as to their wages. You state also in the same memorandum that the general counsel of the National Labor Relations Board has advised you informally that in his opinion these employees are not agricultural workers under section 2 of the National Labor Relations Act and that he has promised to confirm this view in writing.

REASONS Section 2 of the War Labor Disputes Act defines employees as used in the act as having the same meaning as section 2 of the National Labor Relations Act. Section 2 (3) of the National Labor Relations Act defines "employee" as not including agricultural laborers. The National Labor Relations Board has uniformly held that persons employed, as in the present case, in preparing agricultural products or livestock for market, as distinguished from those engaged in growing or raising such products or livestock, are not agricultural laborers (Upland Citrus Co., 24 NLRB 1136; Sierra Madre-Lamandà Citrus Ass'n, 23 NLRB 143; Iste Averil, 13 NLRB 411; Calif: Walnut Growers' Ass'n, 18 NLRB 493).

This view has been consistently upheld by the courts. North Whittier Heights Citrus Association v. NLRB, 109 F (2d) 76 (C. C. A. 9, 1940); NLRB v. Tovrea Packing Co., 111 F. (2d) 626 (C. C. A. 9, 1940; Idaho Potató Growers, Inc., v.

SZRB, 144 F. (20) 295 (C. C. A. 9, June 30, 1944), cert. den., 65 S. Ct. 122 | 11944). In the case last cited the court said:

* Employees who are not working at farming, but who are specializing in the preparation of farm products for trade or shipment after they have been raped or gathered, or not agricultural laborers.'

It therefore seems that the view informally expressed to you by the general expansel of the National Labor Relations Board that the present employees are not agricultural workers under the National Labor Relations Board is amply supported to decisions of the National Labor Relations Board and the courts.

*

*

You indicate that representatives of the War Food Administrator have informally advised you that in their opinion the jurisdiction conferred on the Administrator by the regulations of the Economic Stabilization Director over voluntary adjustments in wages and salaries of agricultural workers extends to the wages of the employees in the present case.!

Accepting this view of the regulation, it is nevertheless clear that the War Labor Board is not precluded by the regulation from deciding any wage issue in dispute in the present case. Section 4001.6 of the Director's regulations, which confers on the War Food Administrator authority to determine the propriety of wage or salary payments to agricultural laborers, expressly provides that the provisions of that section "shall not be construed to affect the authority of the Board under the provision of Executive Order 9017 as extended by section 1, part III of Executive Order 9250.". In our opinion the effect of this proviso is to reserve jurisdiction in the War Labor Board to decide labor disputes over wage issues notwithstanding that voluntary adjustments of such wages are subject to the approval of the War Food Administrator. This view, as you indicate, has been accepted by the War Food Administration,

Thus in the regulations issued by the War Food Administrator on October 9, 1944 (9 FR 12117 et seq.) it is provided, after defining the jurisdiction of the Administrator to determine the propriety of payments to agricultural labor:

"Nothing contained in these regulations shall be construed to affect any jurisdiction which the National War Labor Board may have by virtue of the War Labor Disputes Act and Executive Order 9017 as extended by section 1, title III of Executive Order 9250. However, no persons, including any Federal agency

shall have authority to overrule, amend, change, or modify, directly or indirectly, any specific wage ceiling regulation issued by the Administrator pursuant to section 4001.7 of the general regulations and as described in section 1100.7 thereof.'

It is clear from the foregoing that the War Food Administrator recognizes the authority of the War Labor Board to order adjustments in wages of agricultural labor except to the extent that such adjustments may conflict with a "specific wage ceiling regulation” of the Administrator. We have been advised by the War Food Administration that no such specific wage ceiling regulation is involved in the present case.

Mr. FREIDIN. I think I might also mention that, because I believe it is a significant aspect in the case. There appears to be no question about the fact, based on the wage stabilization program, that wages of these employees are under the jurisdiction not of the War Labor Board but of the War Food Administrator. That raised an additional question in this case. We pointed out that in the regulations issued by the War Food Administrator governing similar situations it was provided that nothing contained in his regulations was to be construed to affect any jurisdiction which the National War Labor Board might have by virtue of the War Labor Disputes Act. Consequently, while it may appear on the surface to be an inconsistency, I believe that this section of the regulations eliminates that difference.

Mr. TABER. The National Milk Producers Association and the National Grange have both protested action of this character. I understand that they have not even had a response to their protest. What do you have to say about that?

Mr. FREIDIN. I have personally had no communications from either of the organizations you have mentioned.

1 Section 4001.1 (1) of the Director's regulations defines the term "agricultural labor” as used in the regulations to mean "persons who are employed in farming in any of its branches, including • dairying *." Pursuant to the authority conferred by the foregoing regulation, the War Food Administrator has interpreted the word "dairying" as here used as follows:

"If the milk is cbtained from the employer's cou's or goats his employees engaged in operations such as separating the cream from the milk, boiling such

cream or milk or making butter

or cheese out of such milk or cream are agricultural labor." (Italics ours.)

As already stated the milk bottled by the present employees is obtained from cows that do not belong to the company but are leased to it during the milking season. However, it is apparently the view of legal counsel in the War Food Administration that since the cows are fed on the premises of the company during the milking season, they should be regarded as the cows of the employer under the above interpretation

Dr. TAYLOR. I have not seen any communication from them. It has not come to my attention. We will immediately see if the communications have been handled in some other spot, Mr. Taber.

(The following statement was submitted later:)

Since making the preceding statement, I have learned that such a communication, addressed to former Chairman William H. Davis, was forwarded to the New Case Committee of the Board for its information in connection with the WalkerGordon case.

Mr. Jesse R. Smith, an executive of the Armstrong Cork Corporation, serving as & per diem industry member of the New Case Committee spoke to Mr. Charles W. Holman, Secretary of the National Cooperative Milk Producers Federation, on three occasions, at the request of the committee. He discussed the letter with Mr. Holman and also the opinion of the general counsel of the board which bas been ordered inserted in the record. The committee considered this a reply and ordered the letter made a part of the Walker-Gordon case.

AUTHORITY TO ORDER PAYMENT OF BACK PAY

Mr. TABER. Where does your organization get its power to order back pay in these labor disputes? Out of what statute?

Dr. TAYLOR. It really flows from the responsibility to determine wage disputes, because it becomes necessary to fix a date when the award becomes effective. The Board is cognizant of the fact that in earlier days when folks would do collective bargaining there was a rather standard pattern that they developed, which was that anything they subsequently agreed upon would be made retroactive.

Mr. TABER. When they did that, it was only made retroactive to the date they had agreed upon rather than to some date that somebody else might determine later on where there was no such arrangement?

Dr. TAYLOR. Except that two things would happen in collective bargaining. This idea of "no contract, no work” was one which had great prevalence in collective bargaining set-ups prior to the war.

Mr. TABER. But those were almost always dependent upon contracts for a fair disposition of the product of the employer, and it did not come right out of a clear sky on to the employer regardless of what his contract might have been based on at the time the dispute arose. For instance, if an employer had a contract for the construction of something based upon an existing rate, that was taken into consideration. Those things do not exist any more, and there is a very good chance of throwing a fellow out of business. I know of some cases where that has been a very great hardship:

Dr. TAYLOR. We are quite aware of the problem involved, and we think that the approach to it, Congressman, is to work on this business of cutting down the delay between the time that the case comes to us and we decide it. If we are able to get our business into good enough shape so we can still further cut down this lag, we are going to be able to meet that retroactive problem.

The National Defense Mediation Board, our predecessor board, when it was told that the agreement expired at a certain date, said:

You are nevertheless going to have to continue working. The agreement was then extended, and the practice then was to say: You continue work. You do not strike as is your ordinary right to do, but any adjustment that is found that you are entitled to later will be retroactive to the expiration date of the prior contract.

The justification for putting that back there when it was found impossible to strike without affecting the national interest was that when folks under any collective bargaining extended their agreement pending the working out of the details by collective bargaining, they commonly said:

We will extend the agreement. We won't strike. We will work with the understanding that any adjustment finally made will be retroactive to the expiration date of the contract.

I think you have to consider it in the light of the fact that the right to strike was withdrawn during wartime. Withdrawing the right to strike would seem to indicate the necessity for following what had been good collective bargaining practice when agreements were extended to avoid a strike in peacetime; I really think the answer to the problem is a speed-up in the Board's work even to a greater extent.

We have made great progress in that direction and we are going to continue to cut down the time in handling disputes cases where it becomes burdensome; and in that regard I think it is impossible to follow a different procedure in disputes than you do in these voluntary form applications.

In the recent textile cases you may have noted the amount of retroactive pay that was involved was cut down substantially; that was a long-drawn-out case, that ran nearly a year.

But to get back to the question of the authority, a date must be fixed, whether the present, prospective, or retroactive. It is a concomitant, really, of the obligation to fix wages.

Mr. TABER. I know of some cases where the retroactive pay has borne pretty heavily on small organizations. It is going to be impossible for such companies to take contracts for future production, if that practice is going to be followed, in a great many cases.

I would really like to know where you get your authority for that. I would like to have you put something in the record showing us the authority that you have for that sort of thing.

Dr. TAYLOR. Very well, sir.
(The information is as follows:)

STATEMENT AS TO AUTHORITY OF THE NATIONAL WAR LABOR BOARD TO ORDER

RETROACTIVE WAGE INCREASES IN DISPUTE CASES

I. THE BOARD'S POLICY

The National Board has developed a policy, from which it now rarely deviates, for determining the effective date for wage increases when ordered in dispute cases coming before the Board. Under this policy the effective date used is:

A. The date agreed upon by the parties or fixed by their contract or, where an existing contract contains a wage reopening clause, the date when the wage issue was actually reopened; or, in the absence of any such agreement, the date of expiration of a previous agreement governing the same bargaining unit; and

B. If there is no agreement of any of these types, then the date of certification of the dispute to the Board by the United States Conciliation Service or the date of assumption of jurisdiction of the dispute by the National War Labor Board.

Deviations from this policy may be required by special circumstances, such as the relation of the particular directive order to directive orders in other cases or to voluntary increases already in effect.

II. LEGAL BASIS (a) Retroactivity in general. --The legal basis for this policy is found in section 7 (a) (2) of the War Labor Disputes Act (15 U. S. C. A., sec. 1507 (a) (2)), which authorizes the Board, in dec ding labor disputes, to "provide by order the wages and hours and all other terms and conditions (customarily included in collectivebargaining agreements) governing the relations between the parties."

l’nder this language it is clear that the Board is obligated to determine wage rates when such issue is in dispute and to decide on the effective date for the institution of such rates. In formulating its policy on effective dates the Board, following the injunction of the statute, has looked to the history and practice of collective bargaining to see what terms are "customarily included in collective hargaining agreements."

It is common knowledge that collective bargaining agreements do frequently euntain provisions for retroactive effectiveness of wage increases. Thus it was customary where an agreement expired before a new agreement was consummated to make the new agreement effective as of the date of expiration of the old contract. There were other situations in which retroactive effect was provided for in collective bargaining agreements. See, for example, paragraph 64 of the 1941 agreement between the Ford Motor Co, and the United Automobile Workers, which is reproduced on page 323 of Bulletin No. 686 of the Bureau of Labor Statistics, entitled “Union Agreement Provisions." This paragraph provides that certain wage adjustments which are to be made after a survey of the rates of major competitors shall be retroactive to the date of the signing of the agreement. Similar provisions are found in the 1941 standard agreement of the metal trades department of the American Federation of Labor for the Shipbuilding Industry where wage rates, reset from time to time on the basis of cost of living studies, are to be effective retroactively to the dates when review is provided for by the contract (p. 288 of the Bureau of Labor Statistics Bulletin No. 686, cited above). Als) see the shipbuilding stabilization agreement (p. 291 of the Bulletin). The ame practice was followed in peacetime when disputes were referred to arbitration. The arbitration award, in appropriate circumstances, would set the wage rate and make it retroactive in effect. Instances of this sort might be multiplied. Since, therefore, collective bargaining agreements frequently provide for retrostive wage adjustments, it is clearly within the Board's authority under the snguage quoted above to include such provision in its directive orders.

b) Selection of retroactive date.-As indicated above, it is the Board's policy to Drescribe various retroactive dates in various types of situations. In selecting the appropriate retroactive date the Board has been governed by the requirement E section 7 (a) (2) of the War Labor Disputes Act that in the absence of controlling ftatutory provisions “the order of the Board shall provide for terms and condi

* which shall be fair and equitable to employer and employee under all the circumstances of the case.'

In the judgment of the Board it would not be fair and equitable for it to give its seards prospective effect only. If the Board's awards were so limited, employees Tonld be denied an increase for the entire period between the date of commencement of negotiations for a wage adjustment and the date of the Board's directive ander, a period which in some cases, because of the heavy docket of the Board and Decause of various complications arising in some cases, may be more than a year. Io the absence of the wartime no-strike pledge, a union could normally obtain or *ry to obtain a wage increase much more expeditiously by resort to the strike trapon. But labor has renounced the right to strike and is bound to submit its zputes to the Board for settlement. It is clear, therefore, that denial of any yrease with respect to this period would, in effect, penalize employees for mulering to the no-strike pledge and submitting their dispute to the orderly Fuesses of the Board. The imposition of such a penalty can be avoided only by making the Board's wage awards retroactive for some fair and reasonable period.

It situations where there had been no prior collective bargaining agreement the Lard las tried to grant retroactive effect to wage awards for a period only corresporting to the period of delay in settling the wage dispute, necessitated by the poployees' acceptance of orderly governmental procedures. Accordingly, the proactive date in such cases is the date of certification of the dispute of the War Labor Board or the date on which the Board assumed jurisdiction thereof on its **", motion. Where there had been a previous collective bargaining agreement per are the dispute arose under a wage reopening clause in an existing agreement, | - Board felt that fairness and equity required that wage awards be carried back

be date of expiration of the previous agreement or to the date of reopening of he existing agreement, respectively. In this respect the Board was merely emuang the normal collective bargaining practice under these circumstances, which bo make a new wage agreement retroactive to the date of expiration of a previous cement or the date of reopening of the wage issue under a current agreement.

T2457-454

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