government intervenes for the purpose of protecting financial creditors, and the property is administered under the cloak of judicial protection. In the former case, the need for intervention is the greater because it is the public interest which requires protection. If the manner of government operation were regularized, the financial consequences defined, and the resulting legal relationships clarified, the principal difference between executive seizure and a judicial receivership would lie in nomenclature. The lack of established legal restraints gives seizure an appearance of uncontrolled executive power which would soon be dispelled once litigation in the courts produced decisions upon the legal consequences. Unfortunately, the very uncertainties which furnish ground for fear and criticism also give seizure its chief advantages. To cure the fault would impair the value. CONCLUSION Seizure alone would seldom be an effective solution for national emergency disputes. As an available alternative, or in conjunction with other measures, it appears to have considerable psychological value both in emphasizing to the employees the public need for continued work and in making it difficult for both parties to calculate the cost of disagreement. But seizure is a wasting asset because experience and the development of legal principles would tend to dissipate the peculiar risks involved. A statute supplying a legal foundation for executive action, unless limited to a bare delegation of authority, would also substitute calculable costs for uncertainty. Accordingly, sound policy would seem to dictate resort to seizure only in those rare crises where executive action may be justified without an established legislative policy. VI-d. (Source: Edwin E. Witte. In Harvard Business Review, vol. 25, No. 1 (Autumn 1946), pp. 169-189) A WARTIME HANDLING OF LABOR DISPUTES BY EDWIN E. WITTE T VARIOUS times during World War II there was widespread alarm in this country over strikes and threats of strikes. There was much criticism of the way in which the government was handling the situation. In and out of Congress many proposals were made for changes in gov. ernmental policies, although only one of these got through Congress, the War Labor Disputes (Smith-Connally) Act of June, 1943, and this act made but minor changes in the policies developed previously under executive orders of the President. In particular, the War Labor Board was the focus of complaint and recrimination, on the part of both management and labor. While the very great increase in strikes since V-J Day led many people to believe that the War Labor Board was scrapped too soon, even today the wartime policies with regard to labor disputes are favorably commented on only in comparison with the postwar developments. The great majority of Americans continue to believe that the policies pursued in dealing with labor disputes during the war proved anything but sound and successful. Yet each interested group has a different story about what was done and in what respects it was wrong. These stories are fast assuming the nature of "economic myths," which are uncritically accepted as facts by the respective partisans. No impartial account of the wartime AUTHOR'S NOTE: The opinions expressed are the author's and not necessarily those of the National War Labor Board with which he was associated as Public Member. This article omits from consideration railroad labor disputes, for which special laws and adjustment machinery exist. handling of labor disputes has yet been written, and nothing like the complete story can be told at this time because much of it is preserved only in the recollections of the participants. A recital of the broad outlines of the facts as they appear from the official records, however, may have value as a corrective to the myths which are developing. The Developing Myths 1 The general belief runs like this: The governmental policy toward labor disputes during World War II "amounted to compulsory arbitration." This made free collective bargaining impossible and "resulted in the conversion into full-fledged disputes of many disagreements which would otherwise have been settled at a local level in the course of collective bargaining." Another result was to make efforts at mediation ineffective and virtually to terminate the usefulness of the United States Conciliation Service. All major labor relations matters were decided by the gov ernment, principally the National War Labor Board, but with much interference from the White House. The latter's determinations, while not enforceable through legal processes, had to be complied with lest the plants be seized by presidential order. While the great majority of all who have spoken or written on the subject agree with this account of what was done, widely differing views are held The quotations in this paragraph are from an advertisement, "Labor and Management Meet For Peace or Civil War?" inserted in many daily newspapers by James H. McGraw, Jr., President, McGraw-Hill Publishing Company, Inc., in Octo ber, 1945. concerning the over-all effect of these policies: (1) In labor circles the belief is prevalent that labor got the worst of the deal in wartime. Committed not to strike, labor could not secure proper redress of grievances or otherwise accomplish much for its members. The War Labor Board always pounced upon workers who went on strike, while many managements successfully defied the Board. Wage rates were kept down by the government and lagged behind the increase in the cost of living. (2) In management circles almost diametrically the opposite opinion is held regarding the effect of the labor relations policies of wartime. It is believed that the War Labor Board and all other governmental agencies were pronouncedly pro-labor and gave labor many things it could not possibly have obtained through collective bargaining. Conversely, many vital management rights were set at naught in War Labor Board decisions. (3) Large elements in the neutral public, particularly the farmers, the small-town people, the suburbanites, and many of the veterans, likewise feel that labor had pretty much everything its own way during the war. Even more strongly they believe that labor's wartime "no-strike" pledge was a sham and that the governmental policies encouraged and rewarded strikers. There are some facts to be cited in support of all the views generally held regarding the government policies in relation to labor disputes and of all the widely differing beliefs concerning the effects of these policies. No serious study of the record in its entirety, how ever, can lead to any other conclusion than that there are many departures from fact in the myths which have de 'Employer Group of Motor Freight Carriers, Inc. v. National War Labor Board, 143 F. (2nd) 145; National War Labor Board v. Montgomery veloped about the American way of dealing with labor disputes in wartime. "Compulsory Arbitration" To begin with, questions may prop erly be raised regarding the oft-repeated statement that what we had during the war "amounted to compulsory arbitration." In support of this view can be cited the language of Executive Order 9017 of January 12, 1942, which created the National War Labor Board: "After it takes jurisdiction, the Board shall finally determine the dispute, and for this purpose may use mediation, voluntary arbitration, or arbitration under rules established by the Board." To the same effect, Section 7 of the War Labor Disputes Act, in defining the powers of the War Labor Board, gave it jurisdic tion "to decide the dispute, and provide by order the wages and hours and all other terms and conditions (customarily included in collective bargaining agreements) governing the relations between the parties, which shall be in effect until further order of the Board." On the other hand, the War Labor Board was legally unable to enforce compliance with its orders. In actions instituted by employers to restrain the government from taking any steps to penalize them because they had refused to comply with orders of the War Labor Board, the legal character and effect of the Board's orders were definitely and finally established. In two leading cases decided by the Circuit Court of Ap peals for the District of Columbia in the spring of 1944, it was held that directive orders of the War Labor Board were advisory only and that noncompliance did not subject anyone to legal penalties. The United States Supreme Ward and Co., Inc., 144 F. (and) 528, certiorari refused in 65 S. Ct. 134. Court was asked to review this decision, but it denied a writ of certiorari. One consequence was that orders of the Board were not reviewable in court; another that the parties to disputes could often get away with defying the Board. In general, the Board used all possible methods of persuasion and bluff to get compliance. When these failed, it could only report the facts to the President, or to the Director of Economic Stabilization acting for the President, with plant seizure and government operation as the solution. In August, 1943, the President issued Executive Order 9370, which authorized the Director of Economic Stabilization to apply sanctions other than plant seizure against noncomplying em. ployers and labor unions. The only in stance of the successful use of these sanctions against an employer occurred in the case of the E. A. Laboratories, Inc. In that case denial of priorities for materials brought prompt compliance. In another instance, while the war was still in progress, the Board tried to apply sanctions against the San Francisco Machinists Lodge No. 68 because it had disregarded the Board's order to lift its ban on working overtime, but the attempt proved ineffective, and it became necessary for the government to seize the machine shops in uptown San Francisco to get repair work done expeditiously on vessels damaged in the Pacific War. In general, because legal experts in the government took the position that these sanctions were unau Two types of noncompliance situations are to be distinguished. One involved the refusal of workers to terminate a strike and to return to work when so directed by the Board; the other, the refusal of employers to put into effect directive orders of the Board in settlement of a labor dispute. Let us first look more closely at the Board's action in the two different types of situation, and then go on to consider the plant seizures which sometimes resulted. Action in Strike Cases. Although no statute or executive order gave it any powers or responsibilities in relation to strikes, the National War Labor Board, through the disputes divisions of its regional and national offices, kept in close touch with all strike developments. When a strike anywhere was not ended almost immediately, the regular procedure was for the Secretary of Labor to certify the particular dispute to the Board for determination. This action was followed by the sending of a telegram to the union to which the strikers belonged, reminding it of labor's no-strike pledge and stating that the Board would not proceed with the processing of the certified dispute case until the strike was ended but that it was prepared to do so promptly once work was resumed. Employees of the Board conferred with the employer and union representatives and occasionally addressed union meetings (usually in company with labor relations officers of the procurement divisions of the armed forces and United States conciliators) to persuade strikers to return to work. Quite often, also, the assistance of the top union leadership was invoked for this purpose. This was all done by administrative officers and employees of the Board, usually without any formal '111-11443-D, 21 W. L. R. 323, after V-J Day. action by its regional or national offices. thorized under the War Labor Disputes Act, attempts to apply them were made only in very rare cases. This left plant seizure as the only effective means to secure compliance when persuasion and bluff had failed. |