Industrial Peacemaker: George W. Taylor's Contributions to Collective Bargaining [Reprint 2016 ed.] 9781512807202

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I N D U S T R I A L

P E A C E M A K E R

George W. Taylor,

1901-1972

INDUSTRIAL PEACEMAKER George W Taylors Cmtribution to Collective Bargaining EDWARD B. SHILS · WALTER J. GERSHENFELD BERNARD INGSTER · WILLIAM M. WEINBERG

UNIVERSITY OF PENNSYLVANIA

·

1979

Copyright © 1979 by Edward Β. Shäs, Walter ]. Gershenfeld, Bernard Ingster, and William M. Weinberg All rights reserved Printed m the United States of America Designed by Adrianne Onderdonk Dudden

This work is dedicated to Edith Taylor, George's beloved wife and Ufetine companion, who not only inspired him to become the humor, being that he was, but also inspired this writing team in many tmys.

Contents

Foreword

ix

Introduction Ε D WAR D

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1. George W. Taylor: Teacher—Counselor—Friend WILLIAM

E.

SIMKIN

2. Early Years: Grievance Arbitration WALTER

J.

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GERSHENFELD

3. Early Years: Development of the Collective Bargaining Theory 49 WILLIAM

M.

WEINBERG

4. Accommodation and Mediation WILLIAM

M.

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WEINBERG

5. Regulation and Public Policy: Government Encouragement of Collective Bargaining 89 EDWARD

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SHILS

6. Regulation and Public Policy: Government Regulation of Wages 131 E D W A RD

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SHILS

7. George Taylor's Continuing Concern for the Public Interest 161 BERNARD

INGSTER

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Contents

8. Taylor's New Private Sector Solutions: The Kaiser Steel Plan 175 EDWARD

B.

SHILS

9. Taylor's New Public Sector Solutions: The Taylor Law BERNARD

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INGSTER

10. The Elusiveness of Finality: Resolution of Conflict and the Democratic Process 213 WALTER

J.

GERSHENFELD

Postscript: George W. Taylor ROSE

DEWOLF

Appendix Index

235

239

Contributors

243

231

Foreword

George W. Taylor was bom in Philadelphia, Pennsylvania, on 10 July 1901. He was, from the day of his birth until his death at the age of 71 on 15 December 1972, always a Philadelphian and Pennsylvania!!. Taylor was the nation's foremost arbitrator, mediator, industrialrelations educator, and labor statesman for more than thirty years, from the 1930s until the end of the sixties. He operated in the public eye in the national arena under five presidents, but never neglected his obligations as a member of the Philadelphia community and the Commonwealth of Pennsylvania. Although he might shuttle off to Washington to settle a steel, copper, or airline strike after a desperate midnight call from a president, he could be expected to return perhaps the next day to meet his classroom at his beloved University of Pennsylvania or to counsel with a mayor of Philadelphia or a governor of Pennsylvania, each of whom might have pressing labor problems. He was called upon to serve in such situations as a strike of the Philadelphia Orchestra members, as a chairman of a special commission to determine whether collective bargaining might work for school teachers in New York City, as a surveyor for New York's Governor Rockefeller in what became the Taylor Law, or in answering a frantic call from President Kennedy to avert a strike of electricians at Cape Canaveral when America sought to overcome the Russian lead following the development of Sputnik.

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Foreword Despite his eminence in the national field of industrial relations, his heady relationships with presidents, and his frequent stays at the White House, Taylor could always be reached by Philadelphia dress and clothing manufacturers who depended on his leadership as impartial chairman for more than thirty years. It was this local group which in 1972 raised funds for a Taylor Hall in the University of Pennsylvania's Wharton School in his memory. The authors of this work knew Dr. Taylor from several vantage points. The undersigned worked with him for many years as his colleague and associate chairman when Taylor served as chairman of Wharton's Department of Industry. Professor Walter Gershenfeld was a graduate student who also was with him on the U.S. Wage Stabilization Board during the Korean War. Dr. Bernard Ingster was involved with him in the solution of many public-sector labor problems. Professor William Weinberg was another graduate student and became engaged with him in arbitration and professional activities of the National Academy of Arbitrators. Each of us wanted to do a definitive work on George Taylor, but in different aspects, such as his roles in developing grievance arbitration, his unique teaching theories, his work in wage and price control and the encouragement of collective bargaining, his monumental Taylor Law in New York State, his career as a public mediator, his leadership in developing a professional elite of distinguished practitioners of industrial relations, and his theories in resolving conflict in the labor area—theories that throw light on many problems in today's fragmented society. William E. Simkin joined the authors' group well after the original plan of the book was developed. The authors turned to him for an integrative view of George W. Taylor. Despite Mr. Simian's eminence as an arbitrator and as a former director of the Federal Mediation and Conciliation Service, he was also able to look at George Taylor as his teacher, counselor, and friend. One of Philadelphia's leading controversial columnists is Rose DeWolf, who is the wife of one of the authors, Dr. Bernard Ingster. She had the privilege of long chats with George Taylor on a variety of local and national issues over a period of years. The authors were fortunate indeed to have her volunteer to do as a Postscript an admiring and loving treatment of Dr. Taylor. We have attempted to integrate our efforts in this book, and we have tried to eliminate overlap and redundancy; but we must admit that it has been most difficult to see each major area of Taylor's interest and activities as exclusive of the others.

Foreword

If one approaches Taylor's life and his giant contributions from different perspectives, it is easy to perceive that Taylor transferred the same liberal strains from one area to another. His speeches and his papers, as well as his conduct in high governmental office, reflect not only a love for his fellowman, but also a dedication to make America a better place for all citizens. We have chosen the University of Pennsylvania Press for this book, for George W. Taylor was a true son of Pennsylvania. He pursued both his undergraduate and graduate studies at the Wharton School and taught there for more than forty years. Although he may have settled more than two thousand labor disputes in his long career, teaching and the classroom were his first loves, and he never could stay away from the university very long. Taylor has often been described as a "superman" by those who admired him. Yet, those who knew him as we did saw him always as one who was humble and who underplayed his role in national events. More often he was one to say "no" to a presidential request than to volunteer for some "glamorous" service. He hated to leave his dear wife, Edith, or to miss several days of important classroom activity. We hope this work will help to clarify his legacy to students of economics and labor relations and will help others find better ways to give each citizen a "fair shake" in the battle for economic survival. Our deepest appreciation to Richard C. Henderson, who not only copy-edited the original text but who also was responsible for motivating the undersigned into writing the Introduction and who worked closely with him in preparing the actual text of this chapter. Kathy Coleman also assisted the undersigned in research on the Kaiser Steel Long-Range Sharing Plan. Our thanks also to Walter Duglin and David Edman for help with basic research sources and to Mrs. Shirley Johnston, Mrs. Dalia Vilgosas, and Miss Kathleen Roming for splendid work on the manuscript. Edward B. Shils Philadelphia, Pa.

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Introduction EDWARD Β .

SHILS

It is not at all surprising that George William Taylor should achieve eminence in a career of mediation and arbitration. He was born 10 July 1901 and reared in the northeast Philadelphia Kensington section, where an uncle owned a textile mill in which his father, Harry Taylor, was superintendent. So when George Taylor graduated from Frankford High School in 1919, he was expected to enter the family business. But his school principal, George Alvin Snook, encouraged him to go to college, and after earning a Mayor's Scholarship, he entered the University of Pennsylvania's Wharton School of Finance and Commerce. Choosing college was perhaps a sacrifice; while young Taylor was going to school, his friends in the hosiery mills were making as much as $13,000 a year, which, he later commented, was a lot of money then. As a center of the textile and hosiery industry, Philadelphia was the right place; the 1920s, marked by labor violence, was the right time; and George Taylor seems to have chosen the right birth sign. While he was little more than a lad, a classmate, Howard Thomas, in 1920, wrote in his book Signs of My Friends (National Publishing Co., 1920): You were bom with an innate desire to get ahead, while displaying a rather sensitive and retiring disposition. You are, however, basically very positive. You possess a keen intuitive sense, which, coupled with a remarkable memory and a naturally industrious nature, should enable you to gain your objective. By nature you are sentimental and a great lover of home.

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In the textile and hosiery industry, Taylor had seen much violence— street fighting, trolleys overturned, even killings—and mutual distrust among and between labor and management, and his studious, sensitive nature must have led him, even as a youth, to know that there should be better ways to settle differences. After he had earned his Bachelor of Science degree in economics and had served in 1923 as instructor in the Geography and Industry Department at the Wharton School, his teaching career continued the following year at Albright College (then Schuylkill College) in Reading, Pennsylvania, another hosiery industry center. There he became chairman of the Department of Business Administration and—thanks to having played tackle on the Frankford team and even being squad captain one year—graduate manager of athletics. In 1924 he married Edith S. Ayling, a fellow Frankford High School graduate. He earned his Ph.D. from the Graduate School of Arts and Sciences at the University of Pennsylvania in 1929 and that year returned to the university as a research associate in the Industrial Research Department. It was another right place and right time. The Wharton School, which has as its symbol the anvil, was founded at Penn in 1881 by Joseph Wharton, member of a family of ironmongers who founded Bethlehem Steel. As the first university school of business in the country, Wharton had established its Industrial Research Department to carry on scientific investigations of industrial organization, management, labor, and other economic factors in several important industries, much in the same way that scientific research had been associated— almost exclusively—with the medical and physical sciences. Studies of the hosiery industry had begun in Reading in 1927 following a revision of the university's plan of economic research. Rather than focus on one economic factor separately as it operated in various industries, the department felt that concentrated study of the interplay of all the factors in a single industry or group of related industries would be more valuable for research. Studying for his doctorate at the time, Taylor chose for his thesis a subject then of concern in Philadelphia and Reading and one in which, given his background, he was especially interested—the overdevelopment of the hosiery industry and the virtually certain deflation which even then was foreseen by manufacturers and union leaders alike. Following publication of his thesis, the university asked Dr. Taylor to undertake a study of the interplay of economic factors in the hosiery industry with particular emphasis on the Reading situation. Results of

Introduction the study were so valuable that it was extended to national scope in the hosiery industry, and similar studies were instituted in other industries. Having served in eastern Pennsylvania as umpire for the hosiery industry, after taking his doctorate, Taylor went into men's clothing and women's dress and hosiery as a scholar and later as industry arbitrator. His services as a consultant became widely sought, and, as chairman of the Hosiery Industry Committee, he helped establish industry minimum wages to which labor and management agreed on a national basis. He attracted national fame when he helped work out a settlement of the bloody Aberle Hosiery Mill strike in Philadelphia, the first of more than two thousand labor disputes he helped settle. This work was also directly responsible for a later call from General Motors. His activities expanded on the national scene in 1931 with appointment as impartial chairman under a National Labor Agreement for the Full-Fashioned Hosiery Manufacturers of America, Inc., and the American Federation of Hosiery Workers, a position he held until 1941. Then in 1933 came two assignments: chairman for the Philadelphia District of the National Labor Board under the National Recovery Act (NRA), and Ν RA assistant deputy administrator in Washington. These lasted until 1935, when he became impartial chairman for the Men's Clothing Manufacturers' Association and the Amalgamated Clothing Workers in Philadelphia, a chairmanship he held until 1961, except for leave during World War II and the Korean War. A special appeal from Philadelphia Mayor S. Davis Wilson involved him in the Apex Mills union-nonunion strife. The thirties also saw him as advisor for the National Fair Labor Standards Administration, 1937-38. By 1940 Taylor had settled fourteen hundred labor controversies without a strike; his leadership was acknowledged throughout the United States, and he had been appointed impartial chairman of contracts in hosiery, clothing, dresses, and textiles between three hundred employers and tens of thousands of workers covered by industry labormanagement contracts. Under these agreements, strikes and lockouts during the period of the contract were virtually eliminated, since the parties agreed to submit their differences to Taylor for arbitration. Despite the fact that "wildcat" strikes or unauthorized walkouts had occurred with frequency, he helped formulate a new "common law" in the field of voluntary arbitration in the years 1929-40. Without resort to costly court action, disputes could be settled on a basis of both reason and informality. Industrial justice became quickly expedited, and labor-management leaders began to study the consistency of these

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decisions. A year before his passing, these historic decisions were given to the University of Pennsylvania Law School for annotation and study. His much mentioned service under five presidents began in the 1940s with President Roosevelt, who named him in 1942 as vice-chairman of the National War Labor Board (NWLB) during World War II, after he had been appointed impartial umpire for General Motors Corporation and the United Automobile Workers, 1941-42. As part of his service to the NWLB, of which he became chairman in 1945, Taylor wrote in July 1942 the famous "Little Steel Formula," so named because it gave the "little" steel companies a fighting chance against the major companies. To combat inflation in war time, this formula curbed general increases in wages, but permitted modest increases and developed criteria for such adjustments as cost of living, increased productivity, wage adjustments consonant with the market, and so on. Taylor considered this one of his most significant policy contributions. It was also one of the most far-reaching: the concepts embodied in the "Little Steel Formula" became the bargaining criteria for the future and the textbook materials for the new courses in labor relations. An important part of this phase of Taylor's public career was the training of today's most renowned figures in government, academics, and labor relations. Such leaders as Shultz, Dunlop, and Wirtz, as well as others mentioned throughout this book, always acknowledged and appreciated the training and inspiration received from Professor Taylor. They in turn developed younger specialists in the labor-management profession. All of them have inherited something of the George W. Taylor wisdom and philosophy. It is difficult in other professions to find an equal influence on the part of only one man. He served as secretary of the President's National Labor-Management Conference under Truman, who at the end of World War II named Dr. Taylor chairman of the Advisory Board of the Office of War Mobilization and Reconversion, 1946-47. Also in 1947 he became impartial chairman for the Women's Apparel Industry in Philadelphia, a position he held until 1961, with time out during the Korean War, 1950-51. He was consultant to former President Hoover on his Commission on Reorganization of the Executive Branch of the Government, 1948-49. In 1949 he became third president of the Industrial Research Association, which he had helped form in 1946. Since many persons from industry and unions turned to him for informal advice, he set up his own consulting firm in Philadelphia with G. Allan Dash, a colleague from the Industrial Research Department of the Wharton School, and

Introduction William Simkin, later head of the Federal Mediation and Conciliation Service. This office continued until 1955. Taylor's membership in the National Academy of Arbitrators began in 1947. Some of his most impressive work on the national scene began in 1951, when Truman called him to Washington to become chairman of the Korean War's National Wage Stabilization Board, an eighteenmember group of experts representing industry, labor, and the public. He was arbitrator in 1952 of internal CIO jurisdictional disputes, his fairness being recognized by unions even in their vying to organize certain lands of companies so they could, as unions, increase membership and work. If not settled internally, these disputes would have gone before the NLRB; it is significant that the unions abided by Taylor's decisions. He was also arbitrator, 1953-59, for the General Building Contractors Association and the Building and Construction Trades Council of Philadelphia and Vicinity. His work as chairman of the Presidential Board of Inquiry for the steel strike under President Eisenhower came in 1959, and in that year he became chairman of the Long Range Committee for Kaiser Steel Corporation and the United Steelworkers of America. The Kaiser Plan worked out then, reviewed in detail in this book, is certainly a major achievement; the committees on human relations in various companies are largely based, whether knowingly or not, on spadework done by George Taylor. He was a faculty member of the Seminar for American Studies in Salzburg, Austria, in I960 and that same year began an eight-year term as member of the President's Advisory Committee on Labor-Manage* ment Policy. Under President Kennedy he was chairman of the President's Board of Inquiry in the Aerospace Industry in 1962 concerning nonunion shop arrangements that had been dragging since World War II. He was presidential mediator under Johnson in the 1964 National Railroad Dispute and in the Railroad-Shopcraft Unions dispute in 1967. The following year he was chairman of the presidential panel in the copper dispute, which saw one of the longest national strikes in history. Preserving his name is the famed T a y l o r Law," developed during his work as chairman under New York's Governor Rockefeller of an Advisory Committee on Public Employment Relations. In 1966 Taylor accepted an invitation from Rockefeller to head a five-member panel to study the state's Condon-Wadlin law which then, in a limited way, governed labor relations for state and local employees. This legislation, christened the 'Taylor Law" by Governor Rockefeller when he signed

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it 25 April 1967, became effective 1 September of that year. Subject of chapter 9 of this book, the law is considered a model by labor experts. Throughout his career Taylor emphasized his belief in American capitalistic democracy. As early as 1938, addressing a round table conference of the Wharton Institute, he said, "Collective bargaining . . . can only work within the framework of a capitalistic economy. Our governmental policy is obviously to raise collective bargaining to the status of a social institution, in accordance with the belief that this process provides the best democratic procedure for eliminating the basis of employee grievances as distinct from treating mere surface symptoms." And shortly after being named NWLB vice-chairman, before the annual convention of the Pennsylvania Federation of Labor on 5 May 1942: "To those doomed dictators who talk of the selfishness and softness of democracy, the procedures leading up to the creation of the National War Labor Board give a portentous answer. The Hitlers can never understand the strength of free peoples." Perhaps it was the fact that he was a man with a message that led him always to think of himself primarily as a teacher, even in his public-service role. For instance, while involved in NWLB work, writing on 10 July 1944 to Dr. C. Canby Balderston, dean of the Wharton School, after being appointed to full professorship, he wrote, I shall ever be appreciative of the constant cooperation of the University in permitting me the opportunity to do so much work in the field of my interest. . . . It is my sincere hope that, after completing my present assignment here in Washington, I will be able to carry a full program of teaching and research. That is a life to which I look forward with great anticipation. I also have hopes that out of the experiences of the past ten years there will develop a significant contribution to industrial relations and to economic theory as well. There is no place I would rather undertake this work than at the University of Pennsylvania. Just as he had labored at the local, state, and national levels, so he was honored at these levels with top awards. On 4 July 1963, President Kennedy named him to receive the Presidential Medal of Freedom, the highest civilian honor the president can confer for service in peacetime and given only twenty-four times before. It was presented in White House ceremonies by President Johnson on 3 December. Earlier that year, on 8 April, Taylor had been honored by his fellow Philadelphians as recipient of the 40th Philadelphia Award, a gold medal and $10,000 stipend established in 1921 by the noted editor,

Introduction author, and philanthropist Edward Bok to honor each year's outstanding Philadelphian. At the ceremony bestowing the award, U.S. Labor Secretary Willard Wirtz stated, "Had it not been for George W. Taylor, collective bargaining in its present form might not have developed. . . . He was the center of a group of men who made collective bargaining develop and thrive." Describing Taylor as a personal friend, Wirtz brought congratulations from President Kennedy, who thanked Dr. Taylor "for all you have done and will do" for better Iabor-management relations. In 1967 he was among the eight internationally known Pennsylvanians from more than seven hundred nominations selected by the Governor's Committee of 100,000 Pennsylvanians to receive the First Annual Pennsylvania Awards for Excellence, being honored in the category of Human Relations and Community Service. Governor William Scranton was speaker at the formal dinner on 6 January attended by some fifteen hundred civic, business, governmental, and cultural leaders. Interestingly, among the three other recipients of the Presidential Medal of Freedom and the seven others given the Pennsylvania Awards for Excellence were Marian Anderson and Andrew Wyeth, world famous in the arts. In a sense it could be said that Taylor raised arbitration and mediation to the level of art. Not coincidentally, he was an avid art collector, and the many friends fortunate enough to visit the Rittenhouse Square apartment of George and Edith Taylor admired their taste. Taylor had long wished to live on Rittenhouse Square, not so much for its prestige value as for its beauty and serenity. H e could always relax at home with Edith, who understood the pressures put on him by national crises, but provided for him—whether in their apartment, at the Poconos, or in Europe, where they went "every couple of years"— the necessary diastole for the systole of his work pressure. But he seemed to relish the pressure! Even after retirement in 1971 as Gaylord P. and Mary Louise Harnwell Professor of Industry, to which the university had named him in 1964, he returned, as professor emeritus, several times to lecture in multi-section classes and to speak to student groups. This introductory account of George W. Taylor's life does not touch upon one of his most admirable qualities—a quiet, sometimes selfdeprecating sense of humor—although the note is there in the recounting of many anecdotes. Dr. Joseph H. Willits, a former dean of the Wharton School who was a prime mover in the Taylor career, having

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offered him a research job during his student days, was called on to make a memorial address to the American Philosophical Society on 1 April 1973. Taylor had been an honored member of the Society. In his closing remarks at the memorial, Willits said, He liked people, enjoyed them and quickly understood their problems. . . . And because he understood people and had a sense of humor, he spoke interestingly and persuasively. His energy was unlimited; he spent it generously. Perhaps his early death (at 71) was in part the consequence of the free spending of himself. Beneath ail his work, there lay a strong, long-run moral purpose, borne of his complete honesty. He used to advise students: "Never let failure go to your head." Likewise, Dr. Taylor never let success go to his head, either.

1 George W. Taylor: Teacher- Counselor-Friend WILLIAM

E.

SIMKIN

One of George Taylor's friends and admirers made the meaningful comment: "Taylor was a teacher every day of his life."1 The best attributes of a teacher pervaded his contacts with people in a variety of roles. This chapter will consider his teaching in the classroom, in public speeches, and with the press; his counsel and guidance to others involved in various labor-relations capacities; his abilities in working with those of us who were in an arbitration apprenticeship or the equivalent, and his remarkable qualities as a friend in all these circumstances. I had the great good fortune to know him as teacher, counselor, and friend; which accounts for the necessarily personal tone of this chapter. However, I have sought and obtained, in person or in writing, the valuable advice and assistance of other labor-relations practitioners who have had the benefit of one or more of these roles.2 1. This quotation and others that appear subsequently in this chapter were made by the individuals named in footnote 2. No effort was made, nor was it the author's intention, to specifically identify the author of each quoted statement which appears in chapter 1. 2. Benjamin Aaron, S. Stanley Alderfer, Joseph Brandschain, Frederick H. Bullen, G. Allan Dash, Jr., William Dinsmore, Nathan P. Feinsinger, Β. W. Fleming, Sylvester Garrett, Walter J. Gershenfeld, Lewis M. Gill, William Gomberg, Morrison Handsaker, Ronald W. Haughton, Thomas Kennedy, Charles C. Killingsworth, Berthold W. Levy, William N. Loucks, Charles A. Myers, Eli Rock, Samuel H. Sackman, Ralph T. Seward, John W. Seybold, Edward B. Shils, Howard M. Teaf, Jr., S. Herbert Unterberger, Rolf Valtin, and Paul Yager. I am extremely grateful to Edith Taylor, who examined a rough draft and made important comments.

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Taylor in the Classroom and in Related Roles Folowing five years (1924-29) as chairman of the Department of Business Administration at Albright College in Reading, Pennsylvania, Taylor moved to the University of Pennsylvania, where he served continuously and actively in various teaching and research capacities for forty-two years. Successively or simultaneously, he was research associate in the Industrial Research Department, associate professor and professor of labor relations at the Wharton School, and Gaylord P. and Mary Louise Harnwell Professor of Industry. On his retirement in 1971, he became the emeritus professor of the Harnwell Chair. It is a special tribute to his devotion to classroom teaching that, except for relatively brief periods, he continued much of this activity even when holding more than full-time responsibilities with the National War Labor Board and in various other public-service capacities. He did so although such teaching often involved the rigors of weekend trips back to Philadelphia to continue his Saturday classes. Taylor's teaching was a remarkable combination of philosophy, history, vivid illustration, and insight. To him, labor history was only incidentally a matter of dates and events. It was an unfolding of the motivations, aspirations, frustrations, sufferings, and occasional triumphs of workers as they sought to form unions to improve their lot. Major emphasis was not on the pecuniary gain to be derived from organization, although that aspect was not neglected; the primary thrust was on workers as human beings and their efforts to attain dignity and adequate recognition for their contributions to industrial processes. Union leadership was discussed within the contexts of the time period in which persons lived and worked, the influences of family and friends, the positive and negative attributes of the environment, as well as the more widely known instances of success or failure. When a personality such as John L. Lewis was under discussion, an attempt was made to answer the question: "What made him tick?" Adequate recognition was also giveq to key personalities on the management side, people who had a keen sense of the importance of good labor-management relations as an aspect of success in business. Nor was there any neglect of those company personalities who had fought labor organization most vigorously. Discussion of both labor and management leaders was substantially enhanced by Taylor's personal acquaintance with many of them through his extensive public service activities and disputes-settlement work. Throughout his life, Taylor was an avid reader in various labor

George W. Taylor: Teacher—Counselor—Friend fields. But his reading interests outside labor were even more extensive. For example, Greek history and philosophy and a wide range of biographies were of special interest to him. When he was engrossed in some critical labor dispute or problem in a public-service assignment, he would often turn in the evening to some familiar or new philosophic or biographic source as a release from pressure and in a search for guidance. Although he made limited spoken references to such reading in his teaching, he could, on occasion, quote accurately and with pertinence when a reading source provided special insight. It was evident that his reading contributed much to a central theme, the development of collective bargaining as an important institution in a democracy. A commentator has accurately said: Because Taylor prized American democracy so greatly, it was to him an institution to be conserved at all costs. He admired the Constitution of the United States. He thought one of its greatest strengths was that it left so much unspecified. It has worked because the Founding Fathers, in their wisdom, understood that democracy's only assurance was to trust future generations to have the wisdom to achieve solutions to problems that could not be foreseen when the Constitution was written. Perhaps Taylor's greatest attribute as a teacher was his ability to illustrate a point by one or more actual events or occurrences. An incident in a different context can be illustrative. At a hearing of a labor dispute, a lawyer said, "Let's not get bogged down with details." Taylor replied, O n the contrary, let's not get bogged down with generalities." Although he talked a good deal during a class, Taylor was not a conventional lecturer. Student participation was welcome and almost mandatory; interruptions at almost any point were encouraged. The primary qualification was that Taylor could be tough about off-the-point or long-winded contributions, and he effectively restrained himself according to those same requirements. A former student summarized his teaching methods by the single but descriptive sentence: "He made us think, and we were very much the beneficiaries thereby." In this vein, George Taylor was simultaneously a teacher and a student; he welcomed the opportunity to sharpen his own ideas by interaction with other minds. The combination of all these features of performance made for great student interest. His own enthusiasm was contagious. His graduate classes at the University of Pennsylvania included an interesting mix of people: graduate students taking the course for credit, a few under-

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graduates, various persons from labor and industry or other laborrelations capacities who came only to that course, and an occasional retiree or other type of observer. Even though recording attendance was the typical practice in most university classes at that time, attendance records were not really needed. People wanted to come and usually did so, sometimes at great inconvenience and from considerable distances. Taylor was known as a tough grader. He did not expect perfection, but he had little or no tolerance for laziness or mediocrity. For most of his classes he required a term paper of some consequence. Moreover, he read and criticized those papers carefully and with numerous marginal notes. I well recall that a conference with him about one of my term papers consumed at least two hours. Fortunately, he generally approved of the paper. But that did not preclude thorough and critical analysis and comment. At the beginning of each term, a long and wideranging reading list was handed to us. Some items were listed as required; others were optional. We were warned that there would be questions on the final examination about the mandatory reading, even if some included subject matter was not discussed in class. A few students, lulled by the enthusiasm engendered by classroom discussions, did not complete the outside reading. To their dismay this neglect often resulted in a very low grade or even a flunk. Quite aside from the outside reading, final examinations were difficult and challenging. One former student recalls a time when almost the entire class failed an examination. In that instance, Taylor advised the students almost immediately that there must have been some defect in his teaching. He held a long and comprehensive special evening review session and subsequently gave a second examination. That one was not easy, but the students appreciated Taylor's consideration and did much more work, most of them improving their grades. This appraisal of Taylor's teaching reads almost too good to be true. Were there no defects? Depending on one's point of view, I suppose there were some features that could be called defects. For each course Taylor had carefully prepared an outline. It would seldom be followed with any precision. Enthusiasm about one subject matter would result in more time expended than had been planned. Some important current labor-relations event would often be injected, even though out of context with the outline. A result was that some significant subject matters might be neglected almost entirely, simply because time ran out. To some pedagogs, these were defects; to others, these features were a small price to pay for the advantage of flexibility. It might also be said that in some "publish-or-perish" institutions,

George W. Taylor: Teacher—Counselor—Friend Taylor might not have flourished. Fortunately for him and for us, the University of Pennsylvania had a wider perspective. Taylor's classroom abilities and his public-service achievements made it possible for the university to accept the fact that his intense public activities had to limit the number of important publications. However, the university did accord him an honorary doctorate and honors such as the Hamwell chair. In the 1930s, Taylor did produce a number of writings, principally about the hosiery and textile industries. Later he promoted and edited two monograph series: Industry-Wide Collective Bargaining (1948) and Labor Arbitration (1952), both published by the University of Pennsylvania Press. He also coauthored with Frank Pierson New Concepts in Wage Determination, published in 1957 by McGraw-Hill. A book of major consequence, however, was his Government Regulation of Industrial Relations, published by Prentice-Hall in 1948. Recognizing that there is so much that Taylor could have written, how is the relatively limited amount of publication explained? I would suggest that there were two basic reasons. For prolonged periods, certainly until about the mid-1950s and probably even later, the combination of teaching and other activity left little time to write. The other is that he found it difficult to write a book. He was a good writer of arbitration opinions, of speeches, and of relatively short articles. But a book was different. One friend has suggested: "He lacked the desire to set forth a grand design and to explore it thoroughly in a book. His mind was too restless; he was, I think, constitutionally unable to let everything else go by and concentrate on one thing for the considerable time required to write a good book." One of Taylor's own statements, clearly recalled by several of us, was made after the publication of Government Regulation of Industrial Relations: Τ have discovered that you don't write a book; you revise it. And you don't finish a book; you abandon it." Whatever the reason or reasons, labor practitioners have lost something in the absence of a comprehensive statement of his concepts of labor relations and, more particularly, of the roles of mediation and arbitration in the settlement of disputes. This book is an attempt to fill in some of the gaps and to bring under one cover much that is now scattered. The dominant result of Taylor's many contributions as a classroom teacher has been the very significant numbers of people who either have entered the labor relations field or have continued such work actively, primarily because of interest and enthusiasm generated in a Taylor class. If a list were made of all members of his University of Pennsylvania classes and the names then traced to persons active in

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labor relations capacities, its length would be astonishing. The names of a very large number of arbitrators, mediators, labor relations teachers, labor lawyers, and company and union practitioners would be found. Taylor must have had great inward satisfaction in observing the outreach of his teaching efforts. In the closely related areas of public speaking, Taylor was in great demand throughout his life. Several speeches at annual meetings of the National Academy of Arbitrators, referred to in the next chapter, are properly considered highlights of academy meetings. At Industrial Relations Research Association (IRRA) and other labor relations meetings, he made similar contributions. He helped found the IRRA in 1946 and was its third president. He appeared often at seminars arranged by many educational institutions other than the University of Pennsylvania. He spoke frequently at a wide variety of meetings attended by the general public. Some of his talks were "off the cuff." Much more often, they were preceded by a very considerable amount of careful thought and appreciable time spent in writing. A completed text, not just an outline, was prepared for virtually every important speech. His remarks were always pithy, cogent, and fully understandable, given without the usual dreariness of a reading. He would spend so much time with a text that he did not really read it; he would follow it closely but not precisely. And when a question-and-answer period followed a speech, as he preferred, he was "back at the old stand," where the qualities of his classroom performance would reappear. What these speech opportunities accomplished was expansion of the limits of his classroom teaching. Persons who had not had the privilege of taking a full course could get at least a good glimpse of his mind and his objectives. Moreover, these speeches afforded him a chance to rethink his previously held notions. Another significant expansion of Taylor's teaching developed from his press conferences. He had an ability to educate press personnel in the ramifications of collective bargaining. His methods of presentation helped them to moderate or deemphasize the sensational, to stress the constructive aspects of labor dispute settlement, and to report accurately on the status of a dispute. Taylor personally handled many of the press conferences in War Labor Board days. He did not seek to glorify the board or himself when a major dispute had been settled; he did not present alibis when a dispute was not going well. These press conferences almost amounted to classroom sessions in collective bargaining with a quite consistent group of the hard-boiled Washington press corps as students. Taylor enjoyed the give-and-take of such a con-

George W. Taylor: Teacher—Counselor—Friend ference where the press had few inhibitions about asking nasty questions. He could take it and also dish it out. As co-secretary with Judge Walter P. Stacy of President Trunran's 1945 Labor-Management Conference, Taylor would stand after an exhausting day at the end of a large conference room facing a very sizable group of press representatives. His task was enormous. Things were not going well at the conference in terms of specific agreements. Among other problems, John L. Lewis and Phil Murray were feuding. Taylor did not wish to talk down to his press friends from the former War Labor Board group, but he needed to educate the persons who were new. It was important not to alarm the country about the state of labor relations in that postwar period. Perhaps most of all, he could not afford to say anything that might impede possible progress between labor and management representatives in the conference days ahead. He accomplished much in these and other press conferences. Several members of the Washington press corps who are among the best in the United States on labor matters would be the first to give some of the credit to Taylor. Many teachers of labor relations and collective bargaining have written more; some have had exposure to as many students; some may have made roughly comparable overall teaching contributions; few, if any, have exceeded the scope and versatility of Taylors teaching influence.

Taylor as Counselor The second major Taylor contribution as a teacher, in the larger use of the word, was in a variety of counseling activities that developed primarily out of his public-service activities and his arbitration and mediation work. (These activities are chronicled in Chapters 2 and 4.) In all of these endeavors, Taylor held his own or, more frequently, was in command in relationships with his peers. No definition of peers can be precise; but on numerous boards, commissions, committees, and disputes panels, under appointment by five presidents—Roosevelt, Truman, Eisenhower, Kennedy, and Johnson—and several governors Taylor was one of several experienced labor-relations practitioners, all working together on common problems. The truly educational aspects of such experiences are immense. Each encounter or series of encounters adds something to the accumulated knowledge and perception of each participant. It can appropriately be said that Taylor was "more

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than equal among equals." He was either chairman of the group by appointment or was appraised as a major contributor by other participants. Whenever Taylor was in a position to do so, he participated actively in the selection, training, and counseling of persons in an organization below the peer level. He was always aware of the importance of careful selection of previously inexperienced persons with potential promise. Frequently, these were people younger in years and from a variety of backgrounds. I will never forget discussions with him about selection of personnel. He said, in effect, "I always take a very quick look at experience background and at letters of recommendation. If a letter is from someone I know and respect, I give it careful consideration. But, in the final analysis, I insist on a reasonably extensive interview and I then trust my instinct." That instinct was not entirely infallible. In a few instances, he probably continued to support a selectee longer than was advisable. But, on the whole, knowledgeable observers would agree that his instinct was remarkably accurate. Another Taylor practice was to trust inexperienced people with jobs of substantial responsibility and with tasks that others might think were beyond their capacity. He had faith in the ability of human beings to rise above normal levels in an emergency. For example, particularly in the early days of the National War Labor Board (NWLB), of which he became chairman in 1945 after having been vice-chairman since 1942; many of us were green, but we were sent out on our own on quite difficult assignments. He recognized the very real possibility of error; what he did not countenance silently was the same mistake made twice or a worker who gave up too easily. The combination of personnel selection by instinct and early assignments to oversized tasks meant that many of us went to Taylor for guidance and counseling. Usually, we would do so before the task was completed. When this was not possible, we went for review counseling. Heavily burdened as he was with a multitude of responsibilities, he gave generously of his time to such interviews. Thus, we had the opportunity to obtain knowledge and guidance in an even more intense way than in a classroom. Vivid experiences were shared with Taylor while they were still fresh in our minds. In peer relationships and in personal interviews with persons below the peer level, Taylor frequently expressed axioms or concepts in ways that many of us remember. For instance, a Taylor precept for mediation was: "Don't take steps one, two, and three before you have thought about steps four, five, and six." He emphasized the importance of obtaining the best possible grasp of a problem in its entirety before

George W. Taylor: Teacher—Counselor—Friend

initiating moves towards a resolution of that problem. He knew very well that it would frequently be necessary to change any formulated plan in midstream because of intervening developments. However,The results of such changes would likely be constructive, in contrast to those of a hit-or-miss approach without general objectives. He likened the development of a labor agreement to a story about a sculptor who had just finished an imposing elephant and was asked how he did it. "The sculptor said: Oh, it's quite simple. You start with a big block of stone and chip away everything that doesn't look like an elephant. Finally, what is left is the elephant.'" He had little or no respect for the notion that a labor dispute is an occasion to win a battle. To him, the purpose of negotiation was to solve problems. Moreover, the objective was to solve those problems in ways that might achieve the maximum of acceptability. To him, "acceptability" was a key word and a major concept. He had limited faith in compulsion, whether of government, of a powerful company, or of a powerful union. His belief in and promotion of tripartite procedures was an application of the acceptability concept. He recognized the psychological importance of proposals emanating from the parties. Those of us who have seen him at work know that he had a special ability in this connection. In separate meetings with one or more company or union representatives, Taylor would plant an idea, often by quite indirect methods. Later, that idea would emerge from the lips or pen of a negotiator, sometimes with a conviction that it was an entirely original proposal. That proposal would be an important piece of a jigsaw puzzle. As other pieces were inserted, the total solution would begin to be visible. When the circumstances required, Taylor was not reticent about making his own proposals. Sometimes those proposals, made separately to a company and a union, were generally acceptable to both, but for strategic reasons the parties would indicate that he should make the proposal at a joint meeting. But when a proposal could come from a disputing party, he usually considered that source preferable. It was generally recognized that Taylor was the principal author of the War Labor Board's "Little Steel Formula," of the "Substandards Formulae," and of numerous General Orders. When such important policy decisions were being developed, it can be said that he was in charge, though not a solo operator. The general process can be described: A conference would be held, the group including board members and several persons below that peer level. Taylor would frequently "paint with a wide brush." However, many contributions would be made by others without any appreciable regard to position in the hier-

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archy. After the initial conference, one or more persons below the board level would prepare a draft. Several conferences and drafts might be required, the final draft generally one that was acceptable to all participants. Conferences were supplemented by personal interviews. One former staff member recalls vividly an evening when Taylor brought him in to his office and asked him to propose ideas for a stabilization formula. As the Little Steel Formula had not yet emerged, Taylor did not want the staff member as a sounding board; he wanted ideas from all available sources. Several persons have commented about Taylor's fertile mind, whether in development of a War Labor Board policy document or in resolution of a specific dispute. One friend has noted how the words of Roosevelt's Executive Order "to correct maladjustments or inequalities, to eliminate substandards of living, to correct gross inequalities, or to aid in the effective prosecution of the war" were given life and meaning by N W L B policy statements. The Little Steel Formula, treated at length in chapter 6, was a rigid basic stabilization formula that could have persisted only in wartime. Even then, the pressures against wage stabilization were so great that some relief was necessary to continue basic stabilization; the related policy decisions provided a commonsense approach to such relief. Most important and in contrast to the sometimes gibberish of governmental regulations, the board's policy statements were so effectively and simply worded and applied that they provided the basis for constructive collective bargaining. Long-needed rationalizations of wage structures and related inequity adjustments, not destructive of stabilization, were bargained or provided by board decisions. The basic steel industry Cooperative Wage Study program is a good example. Taylor deserves major credit, both for the substance of what was done and for the philosophy and methods utilized. Those who worked with him will not forget the demonstration of effective leadership. Three more general comments about Taylor's ingenuity are illustrative of widespread opinion: Every time one put a seemingly intractable problem to him, he would respond almost immediately with not just one, but many ideas of how to deal with it. When he was in high gear, his thoughts fairly exploded in such marvelous profusion and brilliance that one felt completely overwhelmed. He had a very original mind. One could discuss a current dispute or a national problem with him and suddenly discover that he had a whole new way of looking at it that put the problem in a different perspective.

George W. Taylor: Teacher—Counselor—Friend George was always an experimenter. When one solution was found to be inadequate, he calmly turned to alternatives until a satisfactory solution was found. All of the foregoing comments are made by individuals who were below the peer level when working with Taylor, but who have since attained high stature in labor-relations capacities. It is quite obvious that they benefited materially by counsel on specific problems and by observation of Taylor's problem-solving approach. Especially important was our lack of any feeling of inferiority, even though we considered Taylor a superior in ability and performance. He had evident keen interest in every problem we shared with him and in our own ideas. H e encouraged and supported us when support was justified, but he could be devastating in shooting down some idea that had little merit. Even in such circumstances, however, he did it in a way that helped us straighten out our own thinking and stimulated us to come back for more counseling. When a group endeavor was finally completed, every participant had a sense of personal contribution and an added store of knowledge of substance, procedure, and philosophy. Because of his many labor-relations activities, Taylor's personal contacts with and knowledge of decision-making persons in the labormanagement world were ever expanding and not confined to particular industry or geographic groupings. Moreover, the persons with whom he served and associated had great confidence in his judgment. The result was heavy demand on him for counseling and advice. One significant advisory role was connected with selection of personnel. Unions and companies seeking an arbitrator or mediator, public officials seeking a person for a public-service post, and companies and unions looking for someone for an important position within their own organizations came to Taylor in large numbers, in person and by telephone, asking for his advice. He gave of himself generously in such situations. He was a one-man, unpaid placement service who opened doors for many of us. Two instances in my own professional life will suggest the Taylor role. Earlier mention was made of a conference with Taylor in June 1939 about my term paper following attendance in his class. At the conclusion of that conference, I said, "By the way, Dr. Taylor, I've become quite interested in arbitration during your course. Would it be possible for me to sit in and observe at a couple of hearings sometime this summer?" He smiled and said, "That's interesting, Bill. I'm prepared to offer you a job." On 1 July of that year, I became associate impartial chairman in the Full Fashioned Hosiery Industry, a title insisted on by

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Taylor from the beginning, even though at the time I was actually only his apprentice. The second event was in January 1961. Taylor, G. Allan Dash, Jr., and I were sharing offices in Philadelphia. Taylor went out to Denver for a meeting of the Kaiser Long Range Committee, of which he was chairman.3 David L. Cole and John T. Dunlop were the other public members. Arthur J. Goldberg, long active for the steelworkers on that committee, was attending his last meeting, as he had just been nominated as Secretary of Labor by President Kennedy. Upon Taylor's return, he said me, "Bill, I'd better warn you. You may be getting a call from Washington soon about being director of the Federal Mediation and Conciliation Service [FMCS]." He did not elaborate. Later I learned that Taylor, Cole, Dunlop, and Goldberg had had dinner one night in Denver after Goldberg had been commissioned by President Kennedy to find a new director. At that dinner, it appears that the four of them hatched my prospective nomination. I had not been politically active; moreover, I had not even dreamed of the FMCS job prior to Taylor's warning statement, and my initial reaction to the possibility was quite cool. Within a couple of weeks, however, the job had been offered and accepted. It was a decision I have never regretted. When Taylor opened a door for someone, he was not patronizing about it. He expected no tribute of any kind. In many instances, the person placed may not have known about Taylor's part in the process, unless advised by someone else. This was a function he wanted to perform freely and unselfishly because of his devotion to labor-management processes and because he was in a position to help find the right person for the right place. Moreover, all of us have observed that Taylor never put any pressure on us to accept an offer. He considered that acceptance or rejection was a personal decision and that his role should not go beyond the function of opening the door. Taylor's counseling with labor and industry personalities was not confined to advice about personnel. A sizable number of substantial companies sought his services as a paid consultant. He did accept a very limited number of such positions, but only under very stringent self-imposed conditions. He refused to serve as an advocate in negotiations or in any public capacity before a governmental agency or in any labor dispute. He limited such consultation work to an in-house, impartial approach to that company's labor-management problems. A much more significant counseling role, unpaid and informal, was with both labor and industry. His many friends in each camp would 3. The Kaiser Plan is covered in detail in chapter 8.

George W. Taylor: Teacher—Counselor—Friend often seek his advice on a variety of problems. Sometimes this would occur at lunch, at dinner, or during a recess when Taylor was in an arbitration or mediation session and the problem had nothing to do with the case at hand. More often, it would be a direct approach, in person or by telephone. He gave freely and helpfully in these situations. Another type of counseling was more formal. For several years, Taylor sponsored and headed a Labor Relations Council at the University of Pennsylvania, consisting of management and labor persons and a few university professors who met for dinner and for discussion of a variety of labor-management subjects. An outside discussion leader would sometimes be invited; at other times the group managed its own meetings. In a sense, this was an extension of Taylor's university teaching, but it also included counseling functions. A federal mediator, stationed in Philadelphia for some years but with extensive experience elsewhere, has commented that Taylor's informal counseling with management and labor in the Philadelphia area and his role in the Labor Relations Council undoubtedly had a beneficial effect on the labor-relations climate in that area. He states that in no other part of the country has he observed the equivalent extent of a problem-solving approach to labor problems. Labor and management representatives with whom the mediator has worked have freely acknowledged the Taylor contribution. In all of the relationships discussed in this section, Taylor's counseling and assistance was not accompanied by a know-it-all attitude. The mood was cooperative exploration of a subject matter seeking answers, or, if no immediate answers were available, trying to find ways and means by which possible answers might be obtained. His attitude was that of a concerned friend, not a superior. Thus, he was a prolific, unselfish, and extraordinary counselor.

Taylor as a Trainer of Apprentices This section will consider continuing relationships, primarily in connection with arbitration, that can accurately be described as apprenticeships or the equivalent. From 1 July 1939 to mid-1941, when Taylor resigned as impartial chairman in the Full-Fashioned Hosiery industry to become umpire under the General Motors-United Automobile Workers agreement, I served as associate impartial chairman. From early 1941 until 1952, Taylor and I held the same respective titles in the Men's Clothing Industry—Philadelphia Market, and from early 1947 until 1952, we

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served similarly in the Dress Industry—Philadelphia Market. Thus, it can be said that I was an apprentice to Taylor continuously for some thirteen years. While Taylor was at the University of Pennsylvania, G. Allan Dash, Jr. was associated with him in the Industrial Research Department. Beginning in 1937, Dash worked with Taylor in a number of ad hoc arbitration cases and in a few continuing arbitration relationships. Although his apprenticeship was less formally recognized than mine, in a sense Dash was a Taylor apprentice over a period of about seven years. Also, the three of us shared offices in Philadelphia for some years Elfter an apprentice relationship had ceased. What was it like to be an apprentice to George Taylor? I will write first about the hosiery relationship, beginning with background. Taylor had been impartial chairman since 1931. The agreement between the Full Fashioned Hosiery Manufacturers of America, Inc., and the American Federation of Hosiery Workers was a national agreement covering all member firms. Plants were located primarily in Pennsylvania, New Jersey, Indiana, Wisconsin, Iowa, Minnesota, New York, and Massachusetts. It was a skeletal agreement in many respects and, by 1939, many of the interstices had been filled in by Taylor decisions, memos, and S.W.D.'s (cases settled without decision). The national agreement had a number of unusual provisions, two of which will be noted here. One was uniform application of all agreement provisions at all member plants except for a very few stated exceptions. This applied even to piece rates on described types of equipment. The other was that an impartial chairman's decision was agreed to be applicable at all plants, unless otherwise specifically noted, in the same manner as a negotiated agreement provision. In 1938 negotiations, supplemental agreements had been negotiated at each plant. The basic provision of these supplements was for nonuniform wage reductions associated with individual company commitments to purchase and install specific numbers of new machines. This was a bargained effort to make the unionized industry more competitive with rapidly emerging southern nonunion plants. Thus, I entered this apprenticeship at a time of change and significant economic repercussions beyond the effects of the Great Depression. The most important single value of an apprenticeship with Taylor was the opportunity to observe him in operation at a hearing. Hearings were always informal, and most were relatively brief. Each person had at least potential opportunity to participate. By summing up positions taken by the parties, by asking pertinent questions at the right time, and by numerous other procedural practices, Taylor had an

George W. Taylor:

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exceptional ability to conduct a hearing so that the essential issues were adequately explored in a minimum amount of time. Most important, his methods of conducting a hearing resulted in a clear understanding of the issues and of their ramifications. Frequently, as a result of mediation assistance, a solution was found at the hearing. About one-third of the hosiery grievances heard were recorded as "S.W.D.'s" These were write-ups by the impartial chairman of a mutual agreement. These opportunities to observe were especially significant to me as an apprentice because many aspects of hearing procedure could not adequately be taught in writing or even in a classroom, without the specific circumstances of a case. The timing and nuances of a "move" (sum up, question, and so on) by the impartial chairman needed to be appraised within the context of the hearing in order to be fully understood. The second apprentice task was to write up a draft decision. On the way back from a hearing, we would usually discuss cases briefly, and it was then my job to prepare a draft. Unless it was a complicated piecework dispute or an occasional extremely difficult contract interpretation issue, Taylor did not delay deciding on the key elements or to insist that I develop a proposed decision independently. In a fairly sizable number of cases, the responsible representatives of the parties and I would know the essence of Taylor's thinking, through indirection, by the time the hearing closed. However, he emphasized the importance of a decision text as an aspect of selling it to the parties. He insisted on simple language, readily understandable by anybody who might read it, and also on relative brevity. This was especially important in an industry where most decisions were potentially applicable at all plants and therefore needed to be understood by many who were not at a hearing. When my draft had been completed, the two of us would discuss it. Sometimes, he would accept the draft with no change; more often, a number of language changes would be made. Occasionally, several drafts would be required, and the final would be substantially different from the first. Taylor personally signed all decisions alone when he had conducted the hearing and took full responsibility for the final decision. The third important part of the process in hosiery was the discussion with top representatives of the parties before the decision was issued. Normally, that did not occur until after we had prepared and discussed at least one draft. At these informal meetings, no decision draft appeared until after extensive discussion, which he considered very important in selling the decision, especially to the losing party. Moreover, this was one aspect of his more general "no surprise" concept.

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Only rarely was any change made in the basic decision already written. In the later stages of these discussions, the party representatives would read the proposed decision in its entirety. Sometimes changes of language would be made subsequently, to avoid possible repercussions on other matters. Taylor was adamant about avoidance of delay. Roughly half of the decisions were issued within ten days after the hearing, despite what might appear to be complicated procedures. More time was required for the substantial volume of difficult piece rate cases that developed out of installation of new knitting machines and other new equipment. Also, to minimize travel expense, a sizable number of cases would be heard on a typical four- to five-day trip to midwestern plants. The resulting peaking of cases made it difficult to adhere consistently to the ten-day objective. On an overall basis, the average days required per case (hearing to issuance of final decision) during the period of my apprenticeship were: 1939—22.0 days, 1940—27.5 days, and 1941— 23.6 days.4 Taylor's problem-solving concepts and his procedural methods in grievance arbitration have sometimes been misunderstood or misinterpreted. If a grievance could be answered clearly by reference to contractual provisions, he was insistent on application and enforcement of the contract; he was a strict constructionist when the facts supported that type of answer. His more inventive and nonconformist methods and procedures were utilized in that frequent type of case where some strict constructionists have no answers or where contract provisions have sometimes been misapplied. An important feature of Taylor's concept of apprenticeship was that there be no delay in breaking in the associate impartial chairman to full responsibility status. He did not want the parties to get the notion that I was only an assistant. Accordingly, I heard my first case independently only about one month after starting the job, and the frequency of cases so heard increased rapidly as time went on. For such cases, the two of us would discuss the case thoroughly, and Taylor would give careful appraisal to the written decision, often with valuable suggestions. However, he did not sign or countersign any decision when he had not conducted the hearing. Consequently, by the time he resigned in 1941, the parties had become well adjusted to an orderly transition. In men's clothing and in the dress industry, the impartial-chairmanassociate-impartial-chairman relationship was essentially the same as in 4. Thomas Kennedy, Effective Labor Arbitration Pennsylvania Press, 1 9 4 8 ) , Appendix A, Table 15.

(Philadelphia: University of

George W. Taylor: Teacher—Counselor—Friend hosiery. However, there were some differences, principally because I started in men's clothing later than in hosiery and we did not begin the dress industry work until 1947, and then jointly. In these relationships, I heard the majority of cases, but, when available, Taylor conducted the hearings of the most important disputes. From early 1942 until mid-1943, I was working part-time with the War Labor Board and Taylor was unavailable for men's clothing cases because of his board work. I started full-time work with the board in mid-1943, and in anticipation had lunch one day with the top representatives in men's clothing to suggest to them that they would need a new associate impartial chairman. Their interesting reply was essentially as follows: "Don't worry about us, Bill. There's a war on. You and George have more important work to do. W e l l just setde all our cases." They did just that for about two years. However, when the War Labor Board terminated, both Taylor and I were back in Philadelphia. We had lunch with the parties in men's clothing soon after our return. They then said, "We've gotten along all right so far. But we had better have a few arbitration cases soon. You are our insurance policy. The people in the shops are beginning to forget about arbitration and there is a little restlessness, here and there. A few people have even talked, a bit vaguely, about striking over a couple of grievances. We had better get the machinery oiled up again." Almost immediately, we did hold a few hearings. Another Taylor activity, though not apprenticeship of the same type, was his role in working with Philadelphia arbitrators as a group. For many years, beginning at least as far back as 1948, and probably earlier, all arbitrators in the Philadelphia area (both members and nonmembers of the National Academy of Arbitrators) met monthly, summer months excepted, for discussion of arbitration principles, procedures, and problems. Taylor played the leading role in establishing this activity. Proceedings were quite informal; a dinner together was followed by a discussion of one-and-one-half to two hours' duration. In a very real sense, Taylor was the intellectual and spiritual leader of the group. The most ambitious formal group project was a paper, "Guides for Labor Arbitration," completed in February 1953. This was the result of a series of organized discussions that had occurred over a period of more than three years, concentrated on both ethical and practical aspects of arbitration. The guide was a consensus document, not dominated by but clearly influenced heavily by Taylor's principles and philosophy. Many Philadelphia arbitrators in this group also benefited by an informal apprenticeship relationship. Especially when starting arbitra-

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tion and after hearing a difficult case, several would say to themselves, "I need to have lunch with George." When the invitation came, Taylor would surmise what was ahead but he usually accepted. On those occasions, he was careful to avoid deciding the case. He did not believe that anyone could fully understand a case unless he had personally heard it and observed the people at the hearing. Moreover, he did not want any individual in the Philadelphia group to become too dependent on him. However, he was quite pointed in indicating disapproval when he was reasonably certain that someone was on the wrong track. He also would attempt to stimulate more thinking by asking pertinent questions. In short, he used much the same tactics that he frequently employed with parties at a hearing or with students in his classes. There is no stereotype of a "Philadelphia arbitrator." Fortunately for us and for the parties we serve, we are individuals with our own minus or plus characteristics. However, it is fair to say that most of us would be proud if we could believe that we had really earned the sometimesvoiced application of "a Taylor-made arbitrator."

Taylor as a Friend In the relationships considered up to this point, it was evident that Taylor considered us his friends, over and above any labor-relations or professional aspects of a relationship. When a student wanted to talk privately to him about something related to subject matter of the class, or something quite personal, he was most generous of his time, created an atmosphere of keen interest and understanding, and was helpful. Several students recall that a practice developed after some of his Saturday morning classes of repairing to a nearby restaurant with several of the students. Wideranging discussion occurred on those occasions. Sometimes there would be a continuation of the class subject matter. Not infrequently, personal life plans and objectives of the students would be explored. Former labor-relations associates living some distance from Philadelphia would often get in touch with Taylor when they happened to be in the Philadelphia area. One former War Labor Board associate comments as follows: On my infrequent trips to Philadelphia, I would usually arrange to spend the evening with George. We would talk endlessly about a wide variety of subjects, sometimes until two or three in the morning. Despite the disparity in our ages and our prior relationship of

George W. Taylor: Teacher—Counselor—Friend master and pupil, we dealt with each other as equals, sometimes disagreeing without the slightest embarrassment on my part. Those wonderful evenings invariably left me in an almost exalted state; I felt wanned by George's friendship and, so it seemed to me, his affection, and enormously stimulated by the wide-ranging discussion we had had. This recital could be duplicated many times, by Taylor's peers and by those who had been below the peer level when the friendship had been established. An important aspect of Taylor's philosophy was that he cherished close friendship with many labor and management personalities with whom he had business dealings. Some persons in impartial capacities are afraid that they will somehow become contaminated or lose their impartiality because of friendship. Taylor had no such thoughts; nor did his labor or management friends have any notions about special treatment. Everybody who knew Taylor well knew that his integrity, his intellect, and his impartiality were so impeccable that any business dealings or decision making would not be influenced by personal friendship. George and Edith Taylor, who had grown up in an area in North Philadelphia occupied primarily by workers in various branches of the textile and hosiery industries, did not confine their friends to laborrelations personalities. They did not forget their long-time friends when Taylor became a nationally known person. Both also had close friends without labor-relations connections within the faculty at the University of Pennsylvania, in various civic organizations in Philadelphia, and among neighbors in the Rittenhouse Square area where they lived for many years. "An evening at the Taylors'" was a frequent and joyous occasion, usually with a mix of friends from various backgrounds. Without permitting too-serious an atmosphere, George and Edith had special abilities as host and hostess in encouraging meaningful dialog. It is fitting to add a special tribute to Edith Taylor. Her unfailing good humor, her astute understanding of people, and her fierce loyalty to George provided him with constant and loving support in all his endeavors. In labor matters, he necessarily played center stage but always with total confidence in her understanding. Friendship is both a cement and a lubricant. It binds people together in their pursuit of common goals; it eliminates or eases potential frictions when strong intellects seek accommodation of possible differing opinions as to how those goals are to be achieved. Those of us who knew George Taylor well will always be grateful for his friendship.

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Conclusion When all the many and varied aspects of George Taylor's role as a teacher, counselor, and friend are combined, it is no exaggeration to conclude that, over the long span of his working years, he had more constructive influence as an impartial activist in labor relations than any other individual in the United States.

2 Early Years: Grievance Arbitration WALTER

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Background and Experience EARLY INFLUENCES

George Taylor and grievance arbitration, the man and the institution, are deeply intertwined. George Taylor is remembered as an architect, leading practitioner, and thoughtful analyst of grievance arbitration. Taylor came to the labor-management field when the modern form was coming of age. His first exposure was as a student and professor in the 1920s. He was aware of early arbitration efforts including T h e Protocol" between the International Ladies Garment Workers Union and the clothing industry and other arbitration activity, principally in a number of small industries in New York City. He often mentioned the millinery industry as a pioneer in arbitration. Undoubtedly, however, the strongest early influence on Taylor's ideas on arbitration came from a series of local-market agreements establishing impartial chairmanships in the men's clothing industry. Here, he considered the agreement between the Amalgamated Clothing Workers and Hart, Schaffner & Marx a breakthrough. Taylor frequently acknowledged the intellectual leadership provided by leading men's clothing industry arbitrators, notably Harry Millis and William Leiserson. He also benefited from the early studies on arbitration by Edwin Witte.

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Taylor was impressed by the needle trades' commitment to rationality and the contribution of arbitration to that process. He frequently cited the illustration of the garment industry where justice had depended on seasonality. A case warranting discharge would likely be overturned if it occurred during the busy season. The threat of a strike at that time might cause an employer to see the light when there was no light to be seen. Conversely, a worthy case occurring during the slow season might result in an employer encouraging a useless strike in order to reduce inventory. Taylor noted that the change in employer thinking came when management realized the union was here to stay. The company might not have loved the union, but it was willing to establish a joint mechanism to eliminate guerilla warfare over employee grievances with their consequential costs to employees, unions, and companies. Taylor saw the agreement to arbitrate as the quid pro quo for the no-strike clause. He hailed arbitration because it terminated the impropriety of providing equity, under an agreement, to an individual employee by relative economic power. HOSIERY

It was against this background that Taylor was appointed the second impartial chairman by the Full Fashioned Hosiery Manufacturers of America, Inc. and the American Federation of Hosiery Workers. The impartial chairmanship of the hosiery industry was the first national arbitration arrangement among union manufacturers in the United States. A heavy concentration of these manufacturers was located in Philadelphia and environs, a large number of companies operated in the midwest, and New England was represented by a few companies. The parties had named Dr. Paul Abelson as their first impartial chairman for the years 1929-31. When Abelson stepped down, George Taylor was an easy choice as his successor. Taylor had lived and worked in Philadelphia and Reading, both hosiery centers. He had published research studies of the hosiery industry and was known as an expert in the labor relations field. Taylor was appointed impartial chairman by the parties in 1931 and continued in that office until 1941. Three characteristics of the agreement under which Taylor worked are worth noting. It included lengthy lists of virtually universal piece rates, substantive clauses were frequently skeletal, and the impartial chairman was given broad jurisdiction and authority to handle almost any grievance. He was also expected to sit in on contract negotiations, where his principal role was to learn firsthand what the agreement of

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the parties encompassed. When appropriate, he assisted them by mediating. During the early years of his chairmanship there was considerable emphasis on the rights of the parties. Management sought affirmation of its right to determine methods of operation, use of property, and to take administrative initiative. The union wanted to protect its right to protest and appeal what it considered improper adverse decisions by management and achieve retroactivity when warranted. Principles were established to guide the parties in the important matters of promotion, layoff, and discharge. Some observers believe that Taylor established the well-known grievance-arbitration principle of "do it and grieve" during his early years as hosiery chairman. The earliest case illustrating the "do it and grieve" principle and the primacy of the no-strike clause was a 1932 situation involving the Gotham Silk Hosiery Company, one of the largest in the industry. In one company department, there had been disruptive behavior on a night shift. No supervisor had been assigned. The company singled out two knitters as leaders of the affair, and they were discharged. At this juncture, the other thirty-seven knitters stopped their machines in protest. The union shop committee urged the knitters to resume work. They refused, and the company discharged them. The union filed a grievance seeking the reinstatement of all employees. The impartial chairman reinstated the two employees, noting the company shared rseponsibility for the rowdyism which had occurred because of its failure to assign supervision. The discharge of the knitters was sustained, since they had opted for self-help and violated the no-strike provision of the agreement The discharge of the knitters had to be upheld to underline the significance of the no-strike clause. Taylor privately asked the company to consider voluntary rehiring of those knitters who might seek reemployment, and many of the knitters were so reemployed. Both Taylor and the union also sought to find positions for the other knitters elsewhere in the industry. All parties recognized that stabilization of the industry was impossible if wildcat strikes were permissible. The notion became established that, unless health or safety was involved, it was necessary to "do it and grieve." The union in later years boasted of its acceptance of the decision as a measure of union responsibility in living up to an agreement. Part of Taylor's success lay in his modus operandi. He tried to make certain that the parties were satisfied that he understood the case before he left the hearing room. This helped him to mediate when that was possible and to sell the decision when that eventuality was neces-

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sary. In important cases, he would send draft decisions to the parties and informally convene a tripartite meeting to discuss the tentative decision. Although decisions were rarely modified, the process enabled Taylor to explain the decision to the loser. Taylor kept careful records and established a reference system which was useful to the parties. He initiated the notion of labeling those cases that did not have industry-wide ramifications as "memos." The decisions applying to all mills were labeled with letters. These latter decisions had a continuing life. During the 1930s the parties adopted contractual language binding them to all prior decisions of the impartial chairman. Toward the end of his impartial chairmanship, some of the decisions were written by William E. Simian, author of chapter 1 of this book, who became associate impartial chairman in 1939 and succeeded him when Taylor left to become impartial umpire under the General Motors-United Automobile Workers agreement. Simkin had been a student of Taylor and became one of a large group of arbitrators he tutored. Simkin, in tum, left to join the War Labor Board ( W L B ) , where Taylor was already serving. It is noteworthy that the parties did not replace their chairman, but simply determined to settle cases without a chairman during the war period. The 1930s were, of course, a period of depression and turmoil. The unionized hosiery industry suffered from the Depression and additionally was faced with intense competition from nonunion firms. It is against this background that Taylor's feat of assisting the parties to operate without strikes, during the period of his impartial chairmanship, acquires additional luster. The problems were, at times, unique. In 1938 the employers sought a wage cut to remain competitive. The union agreed and was willing to take a larger wage cut, provided the employers installed new equipment. Plant-by-plant agreements were made calling for new equipment, lower wages, and more work. This success was not ignored. General Motors had reached the point in its relationship with the UAW where it became interested in a grievance-arbitration system. During the final years of Dr. Taylor's chairmanship in the hosiery industry, General Motors had sent a company official to sit in on hosiery arbitrations and to study the application of arbitration to the G M - U A W relationship. But not all of Taylor's efforts were successful. In 1933 some twentyeight hosiery mills in the Reading area agreed to a contract with the hosiery workers which designated Taylor as impartial chairman. One of his early decisions involved the ressponsibility of knitters for broken needles. Taylor determined that the knitters should pay fifty percent of the cost of needles in excess of one pack of needles per week. The

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companies found the decision unacceptable and refused to implement it, and Taylor resigned from the impartial chairmanship. He later pointed out that the designation of an arbitrator required the parties to accept decisions, even those they believed to be incorrect. Their proper recourse was to work out their own solution, but, failing that, to accept the decision. They were, of course, free to fire an impartial chairman or simply not to use an ad-hoc arbitrator again. Refusal to accept a decision by either party meant the end of a constructive grievance-resolution procedure. It is noteworthy that the Reading employers were much stronger than the union and succeeded in winning the day on this and other positions, but Taylor considered the deterioration of labor relations in Reading a factor in the ultimate move of the industry away from that city. MEN'S CLOTHING

In 1934 Taylor was selected as impartial chairman by the Philadelphia Men's Clothing Manufacturers Association and the Amalgamated Clothing Workers. Although the parties here did not require the presence of the chairman during negotiations, as in hosiery, there was considerable informal discussion with the impartial chairman during snags in negotiations. The agreement also differed from the hosiery agreement in that there were many plant-by-plant piece rates. Despite the wide variety of piece rates, relatively few piece-rate cases were taken to arbitration. One principal exception was differences of opinion on appropriate piece rates for cutters, but most of the problems that went to the impartial chairman involved discipline, with a heavy incidence of discharge cases. As in hosiery, the parties made it clear that they sought and welcomed the mediatory assistance of the impartial chairman, and in both hosiery and men's clothing, Taylor frequently paid tribute to the far-sightedness of the parties in making the arbitration experiment workable. OTHER ARBITRATION ACTIVITY

During the 1930s Taylor was named to a number of single-companysingle-union impartial chairmanships; he was particularly pleased that some of his appointments as impartial chairman never resulted in cases that had to be decided. He was convinced that the institution of the chairmanship with its escape-valve potential had succeeded in encouraging the parties to resolve grievances on their own.

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Tayioi also accepted a number of ad-hoc appointments as arbitrator. Some of these assignments came through the American Arbitration Association (AAA), but the majority were direct appointments by the parties. On occasion, he was appointed by parties to handle interest arbitration cases. The parties were well aware of his skill as a mediator and, in effect, were making use of what is now known formally as "med-arb," the assignment of an individual to mediate an interest or contract-negotiation dispute with the reserve power to arbitrate the dispute. It has been estimated that Taylor heard more than fourteen hundred cases during the period 1931^il. It is doubtful that any other individual heard as many arbitration cases in the prewar period. This extensive record and the relative success with which it was consummated identify Taylor as a pioneer, not only as a practitioner, but also in achieving a high level of acceptability for grievance arbitration. W O R L D W A R I I AND A F T E R W A R D

As mentioned earlier, the success enjoyed by the needle trades under Taylor's impartial chairmanship had been noted by General Motors. Both the company, led by Charles E. Wilson, and the United Automobile Workers, headed by Walter Reuther, were concerned with the impact of grievance strikes on the war effort. They agreed that a form of arbitration could be helpful. The company insisted, however, that the impartial-chairman approach was not suited to this large massproduction industry. They opted instead for an umpireship in which the agreement was to be interpreted strictly on the basis of the contract and evidence submitted at a formal hearing. With some misgivings, in 1941 Taylor accepted an assignment as the first GM-UAW umpire. His hesitation was based, in part, on the emphasis on formalism. Additionally, he was satisfied that the parties had never had a meeting of minds as to the nature of the arbitration vehicle. GM wanted a legalistic approach, whereas Taylor believed the union was more interested in equitable solution of problems. The issue came to a head quickly. An early decision by Taylor was met with dissatisfaction by company representatives. In discussing the matter, Taylor discovered that many of the needed decision elements had not appeared at the arbitration table. Since the hearings typically took place at or near the plant where the grievance arose, Taylor obtained permission from the parties to interview, in specific cases, grievants with their representatives and supervisors. He also obtained agreement that the case could be discussed informally with the parties before a decision was rendered.

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The resulting decisions proved highly acceptable and filled out the skeletal agreement. Taylor's role in the evolution of arbitration at General Motors was interrupted after one year when he was appointed vice-chairman of the War Labor Board (WLB), later to become chairman. During his tenure at the WLB, the board faced an important decision on the role of grievance arbitration. Management and labor had agreed there were to be no strikes and no lockouts for the duration of the war. Grievance disputes, however, were numerous and often not easily resolvable; grievance arbitration was the exception rather than the norm at the start of the war. The policy question involved the role of the WLB in resolving these grievances. Taylor recognized the virtual impossibility of the board's becoming the national adjudicatory agency for grievances. He also believed strongly that the parties should develop their own approach to grievance arbitration based on the nature of their relationship. The board felt that an interruption to production because of an unresolved grievance was essentially an indication that the intraplant procedures for the resolution of grievances were inadequate. A staff member of the board might assist the parties in developing a grievance procedure leading to arbitration, or a decision might be imposed in an interest-case determination. By the end of World War II, a majority of agreements included grievance procedures terminating in arbitration. Thus, Taylor played a major role in the development and widespread use of grievance arbitration in this country, although other WLB officials certainly contributed heavily to this process. One significant aspect of the board's role was that the staff became familiar to the parties. These individuals later played leading roles as arbitrators. The term "War Labor Board Alumni" for the National Academy of Arbitrators, founded in 1947, refers to some of the most distinguished arbitrators in the United States. When World War II ended, President Truman was concerned about the potential of labor strife hampering efforts in the reconstruction period. He convened a President's National Labor-Management Conference and asked Taylor to serve as one of its two secretaries. The conference recommended that every labor agreement should include a grievance procedure with the final step of arbitration for unresolved grievances by an impartial chairman, umpire, or arbitrator. The conferees were aware of the difference in concept implicit in these terms and wished the parties to adopt the approach best suited to their individual cases. The acceptance of arbitration by General Motors and the United

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Automobile Workers, the advocacy of grievance arbitration by the War Labor Board, and the recommendation of the President's Conference all helped to advance the use of grievance arbitration. Taylor's role was significant in all three areas. Taylor returned to the University of Pennsylvania after the war, but continued to be active as arbitrator and as a student of the arbitration process. He continued arbitrating in the men's clothing industry and was also named impartial chairman for the women's dress industry in Philadelphia, 1947-61. Additionally, he served as arbitrator for the construction industry in Philadelphia from 1953 to 1959. Although not active in the formation of the National Academy of Arbitrators (NAA), he was a frequent speaker at early meetings of the organization. Taylor was instrumental in drafting the "Code of Ethics and Procedural Standards for Labor-Management Arbitration," published in 1951 and subsequently approved by the NAA, the AAA, and the Federal Mediation and Conciliation Service ( F M C S ) . Taylor continued his educational efforts by serving as editor of a ten-monograph series on labor arbitration published by the University of Pennsylvania. The capstone monograph, still useful, represented a three-year effort by an active group of Philadelphia arbitrators to analyze and provide guidance on procedural matters for ad-hoc arbitrators. Taylor played many roles in the remaining two decades of his life. He served on the Hoover Commission for the Re-organization of the Federal Government, he was chairman of the Wage Stabilization Board, he was an influential advisor to government and was active on numerous presidential boards of inquiry and commissions. Many practitioners and arbitrators acquired their first working knowledge of the field from his famous classes at the University of Pennsylvania. Among leading arbitrators directly associated with Taylor were G. Allan Dash, Jr., Eli Rock, and Thomas Kennedy. Taylor's broad-gauged interest in labor relations led him to diverse activities. At the macro level, he was principal planner of the New York State Public Employee Relations Law, "the Taylor Law," subject of chapter 9 of this book. At the micro level, he was a member of the Long Range Planning Committee which developed improvements in the labor relations situation at Kaiser Steel, reviewed in chapter 8. Throughout, however, he was concerned about the need for responsive and responsible labor arbitration. Continual study of the process was essential if the parties were to continue to find arbitration useful as a substitute for economic strife in resolving grievances. Taylor convened an interdisciplinary group at the University of Pennsylvania which was chartered to study the problem of the strike in industrial relations.

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The group, under his leadership, reasoned that study of the strike was not the appropriate handle for inquiry; rather, the emphasis should be on the broader subject of conflict resolution. Although the study group did not succeed in providing answers, its work was illustrative of the continuing effort by George Taylor to think ahead so that the viability of collective bargaining and arbitration might continue. This background of Taylor's role in the evolution of grievance arbitration sets the stage for a look in detail at his views.

Grievance Arbitration—The Taylor View CONTRASTING PHILOSOPHIES

Taylor noted that grievance arbitration was affected by two sharply contrasting philosophies, with parties arrayed along the continuum and clusters present at the extremes. The first of these philosophies became known in various circles as strict constructionism, containment, or the management-rights approach. Adherents argued that collective bargaining ended with the making of the agreement. Once the parties had settled on a contract, any matter that was not specifically spelled out was inherently the province of management. Battles over scope were to be hammered out at the collective bargaining table, and, once settled, resulted in management retention of rights that had been unmentioned. The strictest of constructionists, according to Taylor, faced serious intellectual difficulty in justifying this view on an absolutist basis. For example, a common clause in agreements provided that management was free to "discipline for cause." Under this rubric management might argue that it simply had to show that cause—any cause—existed. Thus, an otherwise exemplary employee might be discharged for being late two days in a row, and management-rights adherents would hold that since some cause had been shown, the discharge must be sustained. Taylor noted that such a position, in the absence of agreement on the nature of arbitration, required the arbitrator to accept an unworkable and unilateral theory of collective bargaining. The typical union point of view saw the grievance procedure as an extension of collective bargaining. The parties could not anticipate all of the problems that might arise under the agreement; indeed, some of the items negotiated might be deliberately vague, as the price for settlement. The arbitrator must have reasonable scope for decision making if the arbitration clause is to be properly administered.

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TayΙοέ was pleased that the Supreme Court, in the famous 1960 trilogy decisions,1 adhered to this point of view. These cases involved the United Steelworkers of America versus the American Manufacturing Company, Warrior and Gulf Navigation Company, and Enterprise Company. The Supreme Court looked upon the labor agreement (1) "as more than a contract; it is a generalized code to govern a myriad of cases which the draftsmen cannot wholly anticipate," ( 2 ) calling "into being a new common law of a particular industry or of a particular plant," and ( 3 ) an "effort to erect a system of self-government." Taylor expressed concern that these important decisions did not stem the sharp differences in the contrary views of arbitration held by some parties. THE TAYLOR VIEW

Taylor saw the fundamental nature of grievance arbitration as having three characteristics: ( 1 ) it is complementary to the no-strike, no-lockout clause; (2) it is an agreement to arbitrate future, unknown disputes; and ( 3 ) it invariably involves agreement making as well as agreement administration.2 Each of these characteristics warrants discussion. Concerning the first, Taylor noted that the agreement to arbitrate was a substitute for the strike and not a substitute for discussion and negotiation. Prior to grievance arbitration the parties had learned that agreements were not self-effectuating. Disputes arose under agreements and were commonly resolved by the strike or threat of the strike. These disputes were relatively broad gauged. If the agreement to arbitrate was to be meaningful, the parties must agree on the scope of arbitration. All too often, such agreement was absent. The second characteristic indicates that number and content of future disputes are unknown. Thus, cases might be pursued by either party in numbers calculated to achieve tactical ends. Also, the parties do not know what type of disputes will be carried to arbitration. Taylor noted that some of the early labor contracts incorporating grievance arbitration specified that the arbitrator's jurisdiction was 1. United Steelworkers v. American ( 1 9 6 0 ) ; United Steelworkers v. Warrior ( I 9 6 0 ) ; United Steelworkers v. Enterprise 593 ( 1 9 6 0 ) . 2. "Effectuating the Labor Contract Second Annual Meeting of the National January 1949, p. 2.

Manufacturing Company, 363 U.S. 564 and Gulf Navigation Co., 363 U.S. 574 Wheel and Car Corporation, 363 U.S. Through Arbitration," address before the Academy of Arbitrators, Washington, 14

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sufficiently broad to cover all disputes over which a strike or lockout might occur. Some later clauses have explicitly removed certain subjects from arbitration and left the parties free to strike or lockout to achieve their goals. Taylor was satisfied with what he believed was the implicit understanding of the parties that "the scope of the agreement, in terms of the subjects encompassed by the agreement should not beenlarged by action of an arbitrator."3 It was not the task of the arbitrator to seek an unnatural enlargement of the type of matters that could properly come before him. For example, the famous Apex sit-down strike in 1937, mentioned in chapter 5, resulted in a Supreme Court decision that the company claim for treble damages, because of alleged interference with interstate commerce, should be remanded to the lower courts. The company had meanwhile been organized by the American Federation of Hosiery Workers, and Taylor had been designated impartial chairman under the agreement with the assignment to resolve disputes between the parties. The union sought to have the damage issue decided by the impartial chairman, but Taylor denied jurisdiction on the ground that cases properly before him were limited to the subject matter covered by the contract. Taylor noted that the arbitrator retained considerable latitude despite apparently limiting language. For example, management-rights advocates might emphasize the standard provision that the arbitrator must not add to, subtract from, or otherwise modify the terms of the agreement. Taylor felt that interpretation of the agreement frequently had the effect of modifying it. As an illustration, he pictured three companies, organized by the same union and in the same locality, each with a labor agreement specifying that overtime is to be shared equally. In the first plant, the available overtime is customarily shared on a daily equalization basis; in the second plant, overtime is regularly equalized on a three-month basis. These are consequential differences in that the former approach requires the company to remove individuals from the work they are engaged in, in order to share overtime on a daily basis. The costs are considerably higher under this scheme. A grievance arises in the third company. They have the same language in their agreement. The parties simply adopted the clause in emulative fashion, and no intent is discernible. Practice varies throughout the plant and does not provide a dispositive answer. Taylor's point was that, regardless of the approach adopted by the arbitrator, he was inevitably modifying the agreement. Taylor was quick to add that where the parties were clear in their approach to arbitration, the out3. Ibid., p. 23.

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come was "in hand" for the arbitrator. The operating problem was that such a situation was an exception rather than the rule. Finally, Taylor noted that grievance arbitration had elements of agreement making rather than simply of agreement interpretation. He was puzzled by the approach which stated that arbitrators were there to decide and that mediation was somehow improper. Taylor noted that parties to civil cases frequently met in the judge's chambers for discussion which amounted to mediation, with all present understanding that the judge had the reserve power of decision. Should the arbitrator be precluded from such activity? Taylor thought not. Seeing that the hallmarks of agreement making were a "meeting of the minds" and "mutual acceptability," Taylor opposed the judicial approach espoused by J. Noble Braden of the American Arbitration Association. He noted that the AAA had its beginning in commercial arbitration. There it was clear that when the parties had failed to arrive at an agreement, there was little point in seeking to mediate the dispute; the parties wanted a decision and to have done with each other. In contrast, the parties to a labor contract have to continue to live with each other; an unworkable decision was one they would have to renegotiate. Why not seek to provide them with a decision which would represent a meeting of minds? Taylor added that when it was clear that the parties wanted a judicial decision and were not interested in mediation, it was properly the task of the arbitrator to serve these expressed needs. Within the framework of the "Code of Ethics," the positions of Taylor and the AAA would be quite close today. The critical test for grievance arbitration for Taylor was whether or not it provided mutual acceptability—which to him included the notion that the parties must possess a willingness to lose or to acquiesce in unfavorable decisions—as a substitute for strike action. Taylor, in proper circumstances, bent every effort to achieve acceptability. He sought to work problems out, but, in the absence of an agreed-upon solution, it was important to provide an opportunity for the losing party to understand the decision. Taylor was willing to face the losing party in a tripartite session and explain the decision rather than relying on the cold instrumentality of a mailed decision. The alternative to the willingness to lose was reversion to warfare by strike or lockout in the resolution of the grievance problems. Although Taylor leaned to the flexible approach as likely the most beneficial in the long run, he recognized the right of the parties to specify that they did not wish to be mediated and wanted strict construction. The tragic problem in much of grievance arbitration, as Taylor saw it, was that the arbitration clause all too often represented

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an incomplete meeting of minds. The parties had agreed to arbitrate, but had widely divergent views of the process: management often thought the management-rights approach had been implied, and the union often believed the arbitrator was there to provide equity. Taylor charged the parties with the responsibility of putting their own houses in order and not leaving the arbitrator with the impossible task of reconciling divergent philosophies. Failure of the parties to achieve this end could lead only to disaffection with grievance arbitration and consequent turning away from it. Taylor provided no support for those arbitrators who saw themselves as invested with the public interest. The arbitrator was a creature of the parties, and it was properly his task to deliver what the parties had ordered. In this vein, Taylor expressed disquiet with the practice common in early arbitration of utilizing distinguished fair-minded citizens of the community, such as priests, ministers, and rabbis, as arbitrators. He was concerned that their lack of knowledge of shop practice and the nature of collective-bargaining content could lead only to imposition of unworkable terms. He summed up his notion by the pithy comment, "In labor relations, being merely good is not enough." This is not to say that such individuals cannot function effectively; they can and do, provided they have an underlying understanding of collective bargaining. In sum, Taylor saw grievance arbitration as a process to be delineated by the parties. Regardless of their choice—and he wanted more attention to conscious choice—the process involved elements of agreement making as well as agreement administration. He personally preferred an agreed-upon decision rather than an imposed one. Where a decision was to be imposed, the agreement, practice, and intent were paramount. It was not the task of the arbitrator, under these circumstances, to apply a personal set of values; careful attention was to be paid to the needs of the loser. The following section discusses the impartial chairman, umpire, and ad-hoc arbitration formats. Although the differences among them are readily distinguishable, it should be noted that, in practice, overlap can exist. IMPARTIAL CHAIRMAN

An impartial chairman is the permanent arbitrator, who, in Taylor's thinking, emphasizes the importance of a meeting of minds in the settlement of grievances. Taylor considered this impartial-chairman approach the ideal type for grievance resolution. Having noted the role

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of agreement making as well as agreement administration, he felt it desirable to have the parties involved in the decision-making process if the result was to prove acceptable. Taylor pointed out that the term "chairman" connoted consultation with others and taking their views into account. He did not shrink from the mediation aspect of such arbitration. He wrote: An Impartial Chairman, then, is first of all a mediator. But he is a very special kind of mediator. He has a reserve power to decide the case either by effectuating his own judgement or by joining with one of the partisan board members to make a majority decision, depending upon the procedure designated by the agreement. A new reason for labor and management to agree is introduced— to avoid a decision. By bringing in a fresh viewpoint, moreover, the Impartial Chairman may be able to assist the parties in working out their problems in a mutually satisfactory manner. To me, such a result has always seemed to be highly preferable to a decision that is unacceptable to either of the parties. What's wrong per se about an agreement when agreeing is the essence of collective bargaining? 4 Taylor recognized that there was a danger that the arbitrator who tried to mediate might take a position prejudicial to the interest of one of the parties if mediation failed and a decision had to be issued. He felt the danger was not a great one if mediation were approached in a workmanlike manner. Mediation could be performed without prejudice to the interest of one of the parties. He noted the fear expressed by some that the existence of the impartial chairman might encourage disputes to get through the process without serious attempts at settlement at lower levels. He felt that parties could develop protective measures against such an eventuality, and the impartial chairman should refuse to hear cases in which he was satisfied that the parties had not completed their task of handling grievances. A related concern was the charge that an impartial chairman might encourage grievances to be submitted to the final step in the interest of his own job security. Taylor noted that this approach was not realistic, as the impartial chairman served for the duration of an agreement or perhaps for a shorter time. He pointed out that the impartial chairman had almost a fiduciary relationship with the parties and commonly stepped out when it was clear that he had lost the confidence of one of them.

4.

Ibid., p. 10.

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Taylor recognized that the impartial chairman was not the universal answer. When the parties were not amenable to a flexible system, they were entitled to imposed judicial-type decisions. Taylor added that imposed decisions were not cost-free: additional grievances might be filed, unrest at the workplace was a real possibility, and the issue might appear later at the bargaining table and prove a serious stumbling block. The knowledge of the problems of the parties which was possessed by the impartial chairman was an essential ingredient of the meeting of minds. In hosiery, he sat in on contract negotiations. He might occasionally mediate, but his primary task was to develop an understanding of the reasoning behind contract content. The emphasis on informality and consultation permitted the impartial chairman to work effectively within the confines of the agreement, as negotiated by the parties. No agreement could anticipate all the problems that might emerge under its terms. There was to be a smooth flow from contract negotiation to contract administration. If a seamless web were to exist, the impartial chairman was a key weaver. UMPIRE

Taylor was aware that there were parties who did not wish to accept the risks inherent in a third party participating actively in making crucial collective-bargaining decisions. When the parties felt this way, the umpire was to rule legalistically on the contract as written and on the evidence presented without regard for the industrial-relations consequences of the decision. The umpire system was workable, in Taylor's opinion, provided the parties understood what they were about. The umpire was a substitute for a strike. In collective bargaining, the risks inherent in a work stoppage lead to compromise and agreement in the majority of cases. The same principle applies to grievance arbitration. If the parties understand this, they must aggressively seek to work out grievances at the lower steps of the procedure. The submission of cases to the umpire must be perceived as having great risks, and the threat of arbitration can be used as the lever which brings about settlement of most grievances. Taylor was not talking about compromise for the sake of compromise; he scorned this approach. Many grievances were amenable to a meeting of the minds, but others required a recognition by the parties that they must be willing to accept some losses in the bargaining over

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grievances. Still others might be worked out because the parties had reason to fear the consequences of the all-or-nothing arbitration decision. Taylor noted: The Umpire system would doubtless be effective if it actually induced agreements at earlier stages of the grievance procedure. But, if large numbers of cases are arbitrated, the basic purpose of the system will not be achieved, and the program will inevitably fail. Submission of a large volume of issues to an Umpire evidences an inability of the parties to peacefully resolve their differences. A backlog of extremely difficult problems may be built up for treatment when a new contract is negotiated. And grievances unacceptably handled during the term can't be satisfactorily dealt with in contract negotiations. 5 Although the umpire system can work effectively, Taylor felt that the parties generally failed to understand their responsibilities under the system. Moreover, he expressed serious doubt that employees would long accept a system in which equity considerations were secondary, if present at all. This situation was aggravated when the company expected a legalistic determination and the union expected equity. Taylor hoped that most umpireships would eventually be dropped in favor of impartial chairmanships. Taylor was wrong with regard to form, but not so far off on content. The umpire is a more common vehicle today than the impartial chairmanship. It is the observation of the writer that umpires, although they hold closely to the agreement and explanatory practice, find that they frequently have a range of options legitimately available for decision. Within this range, an imposed decision often has acceptability. Further, it is not unknown for umpires to adopt, in certain cases, the mediation approach of the impartial chairman. AD-HOC ARBITRATION

Dr. Taylor had genuine reservations about the use of ad-hoc arbitrators —that is, arbitrators selected to hear a particular case. He argued that some sort of permanent arbitrator arrangement was desirable. The alternative led to situations where arbitrators selected to hear individual cases might arrive at conflicting and confusing interpretations. Stability in industrial relations was enhanced by the services of an individual who could become familiar with the agreement between the 5. Ibid., p. 12.

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parties and arrive at consistent and useful arbitration settlements or decisions. Taylor was aware that ad-hoc arbitration was, nevertheless, a growing and popular phenomenon. He expressed the hope that the parties would consider it an interim step pending the time when they could agree on a permanent form of arbitration and adopt it as their practice. Frequently Taylor wrote about the usefulness of tripartite arbitration in connection with interest arbitration, new contract determinations. Curiously, the writer was unable to find any writing by Taylor in which he supported tripartite boards as a helpful approach in ad-hoc grievance arbitration. The notion may be found, however, by inference in his writing. For example, he indicated that it was desirable for an impartial chairman to use a regularly constituted tripartite board or, when necessary, convene one for a case. It would seem that Taylor contemplated a tripartite board in ad-hoc grievance arbitration. The board could get at those matters that the parties hesitated to place fully on the arbitration table and could explore the possibilities of settlement within the terms of the agreement. SUMMARY

Taylor emphasized grievance arbitration as a process constituting a continuation of the discussion which had led to the collective-bargaining agreement. Labor agreements were not self-effectuating. Under these circumstances, the parties were best served by an impartial chairman who operated as a mediator but with a reserve power to decide the matter. The impartial chairmanship was the most useful instrumentality for grievance arbitration because it typically represented a meeting of minds as to the importance of agreement making in arbitration and mutual acceptability as a criterion for settlement. Taylor was firm, however, in his emphasis that while the agreement had interstices that could best be handled by the parties, the chairman was not empowered to go outside the scope of the agreement. He stressed the importance of the parties' learning to work out their grievances together and avoiding the automatic referral of cases to an impartial chairman. Taylor often stated that a permanent arbitrator "provided real utility." In this connection, he was not averse to the use of an umpire, provided both parties understood the nature of the umpire approach. The umpire brought the virtue of stability, but was limited in his approach to agreement making. This was not fatal if the parties agreed to work on cases realistically before submitting them to the umpire. Taylor felt

45

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there was a necessity for a meeting of minds about the nature of umpire determinations. Too often, the parties agreed to arbitrate, but with the company expecting a legalistic solution and the union expecting equity as the outcome of the process. If they could agree on the nature of the arbitration sought, there was room for useful umpire activity. Taylor was least sanguine about the use of ad-hoc arbitrators. Given his philosophic approach, he preferred to see ad-hoc arbitration wither as relationships between the parties became more mature. He would be pleased that ad-hoc arbitration today is not quite as legalistic and one-off as might have been expected. Procedures tend to be informal. Many arbitrators, with the acquiescence of the parties, will investigate the possibility of a mediated solution when the disputants indicate that such an effort is welcome. More important, a series of common-law ground rules have emerged which tend to provide equity within a legalistic framework. For example, although the contract may simply refer to just cause as a basis for discipline, arbitrators frequently look for evidence of progressive discipline—limited, of course, to those cases where the discipline-precipitating event is not a major traumatic one. Here too, however, the employee's past record may be reviewed as a mitigating circumstance. Similarly, the agreement may be silent with regard to the company's promulgating rules and regulations for everyday conduct. It is usually clear that the company may issue such rules, but they are subject to an arbitral test of fairness. The important point is that the common institution of ad-hoc arbitration has more of the approach advocated by Taylor than is generally supposed. In essence, the impartial chairman, umpire, and ad-hoc arbitrator are arrayed on a continuum. Each type may be sharply defined in theory, but in practice the distinctions may well blur and overlap. Indeed, it is perfectly possible for umpires and ad-hoc arbitrators, with the approval of the parties, to behave more like impartial chairmen. Taylor's role in the emergence and use of grievance arbitration in the country was a towering one. Possibly, more than that of any other individual, his thoughtful and successful approach to arbitration led many parties to consider it a substitute for historic open warfare. He was in a position, in various government assignments, to promote the use of grievance arbitration; he tended to avoid imposition of arbitration, but emphasized the need for parties to select their type of forum and arbitrator. One important reason for some disparity of form from Taylor's expectations may lie in the fact that he was an unusually skilled mediator, and it may well be that he projected too much of his own success as being within the realm of possibility for others less able.

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It is appropriate to conclude by using Taylor's own words to summarize his feelings and approach to grievance arbitration: 1. Grievance arbitration cannot be made to conform to any single rigid pattern. It is a substitute for the use of strikes and lockouts and must be developed in each case as a procedure that the parties will mutually accept as preferable to the use of economic power. 2. No sharp line can be drawn between agreement-making and agreement-administration. Grievance settlement involves not merely the application of clear and unmistakable agreement terms to individual cases, but particularly in die early stages of a relationship or as respects new terms added to an old contract, is also related to a completion of the agreement of the parties. This applies to the arbitration clause itself which commonly does not constitute a complete meeting of minds about the kind of arbitration to be employed. 3. In many situations, perhaps in most of them, procedures for grievance settlement have not yet been adapted to the agreementmaking functions involved. Careful consideration should be given to the desirability of arbitrators assisting a mutual understanding between the parties as respects the kind of arbitration they are desirous of developing. Discriminating attention could well be directed toward the use of arbitration procedures that tend to bring about mutual acceptance or acquiescence in arbitrators' decisions. 4. Ad-hoc arbitration should be looked upon, at best, as a transitory method and as entailing disadvantages that outweigh its advantages to labor, management, and arbitrators. As a support for industrial relations stability, a permanent arbitrator is a prime requisite. Out of the continuing relationship, consistent policy and mutually acceptable procedures can gradually be evolved. Conflicting awards and those based upon an incomplete appraisal of all the circumstances in a case may increase, not decrease, the range of difference that ultimately have to be reconciled. 5. It is highly doubtful whether the cause of industrial peace can be advanced through legislation requiring the parties to include in their labor agreement clauses providing for the arbitration of grievances. Such legislation could conceivably be helpful by directing the attention of labor and management to the necessity of dealing with this problem themselves. In the last analysis, however, an effective grievance procedure can only be worked out by labor and management as long as collective bargaining and the right to strike obtain. Unacceptable arbitration procedures and unacceptable arbitration decisions could contribute heavily to the difficulties of avoiding strikes over the renewal of agreements.6 6. Ibid., pp. 13-14.

3 Early Years: Development of the Collective Bargaining Theory1 WILLIAM

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Taylor's theory of collective bargaining was based on his adaptation of contemporary labor movement theories as greatly modified by his experience in dealing directly with unions and management. As a graduate student, he studied the American Federation of Labor and its relationship to the development of social insurance. By the end of the 1920s he saw the labor movement through Samuel Gompers's eyes and his views were influenced by Perlman, Commons, the Webbs and, to a lesser extent, Ely and Hoxie. The collective-bargaining world he observed in hosiery, the needle trades, heavy industry, the public sector, and in wartime controls shaped his theory. Taylor's Wharton School Master's thesis2 was based almost entirely on AFL materials, and his conclusion was as AFL as his source: "union insurance has been deemed more practical than government social insurance."3 His columns in the Underwear and Hosiery Review in the late 1920s and early thirties used Perlman-derived phrases.4 "Job control" loomed large, and the Perlman notion of limited economic opportunity was embraced during the Depression, but was abandoned by the forties. 1. Much of this chapter was based on classroom notes ( 1 9 4 9 - 5 1 ) of Taylor's lectures on the "American Labor Movement" and "Collective Bargaining." This was supplemented by Taylor's various course outlines and syllabi. The text is as close a paraphrase of Taylor's words as the author could make. 2. " T h e American Federation of Labor and Social Insurance" ( 1 9 2 7 ) . 3. Ibid., p. 3. 4. E.g., November 1931, p. 136.

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Taylor's experience in the hosiery industry served as a foundation for his future actions and frame of reference: informal mediation, tripartite dispute settlement, permanent chairman, the use of statistics and agreed criteria to narrow differences in wage determination, the development of standard rates, the use of arbitration as part of the continuing process of collective bargaining, the no-strike clause being related to the grievance procedure and arbitration, union security being tied to union responsibility, management security related to the scope of unilateral managerial decisions, the need for labor-management cooperation, and the concept of the meeting of minds. His collective-bargaining theory was a summation of his experiences; the terminology and some of the conceptual devices he utilized came from contemporary labor-movement theories. The use of labor-movement theory as an underpinning for collectivebargaining theory may be observed in the purpose Taylor identified for his 1950 course on "The American Labor Movement." First he wanted to explain the labor movement; second, to analyze the driving force behind the urge of employees to associate to further their desire; third, to explore why the labor movement became a vital social force within a major social institution. To analyze and answer these questions Taylor leaned heavily on the Perlman theory.5 A preliminary statement in the course syllabus was, in effect, a brief summary of Perlman. The course was based on the "job conscious theory," the notion that workers form unions to control the job as a group. Taylor analyzed the beginnings of the American labor movement with a historical overview that touched on the cordwainers and other nineteenth-century pioneers, but focused on the foundations of the American Federation of Labor in the 1880s. The AFL was designed primarily to further job control and to allocate job empires. Thus, the most significant characteristic of the American labor movement was its limited objective. Taylor emphasized Perlman's concern that unions not be politicized and emphasized that Perlman's theory was based on a rejection of the class-conscious analysis of the labor movement. Taylor conceded that there were many other explanations of the labor movement and collective bargaining in the wide spectrum between Gompers and the Marxists, and he urged his students to examine this range of explanations and to arrive at their own philosophy. It was his belief that without understanding or conviction, one could 5. Selig Perlman, A History of Trade Unionism in the United States (New York: Macmillan, 1 9 2 2 ) , and A Theory of the Labor Movement (New York: Maemillan, 1928).

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not appraise public policy. The appraisal also calls for a measuring standard, however, and knowledge of the theory of the labor movement was that device. Taylor agreed with Perlman that the objectives of the labor movement were best understood in terms of "job consciousness." An aspect of Perlman's "job control" was that all jobs can be stopped to deprive the employer of access to workers and that this was a manifestation of group determination of conditions of employment through their representatives. This notion of representation was the essence of collective bargaining. According to Taylor, workers rejected individual bargaining as a liberty that was an illusion, because it really meant simply the right to reject proffered terms. In contrast, collective bargaining offered the opportunity to negotiate terms and conditions of employment. Most Americans are uneasy with the concept of group control, and Taylor recognized that collective bargaining deprived the individual of some of his freedom. He believed another freedom was involved: freedom from the adverse conditions of individual bargaining. Although this causes conflicts with some people who may prefer individual bargaining because they do well on their own, most workers prefer group determination. The concept of "group control" as used by Taylor was a mixture of Perlman's "job control" and the Webbs' "equality of bargaining" notion and their identification of bargaining as a collective action. The second aspect of the objectives of the labor movement, in terms of "job consciousness," was the right to strike, which was identified as the right of the majority of employees to determine whether all shall stop work. Taylor felt that one of the reasons for controversy over the Taft-Hartley Act, discussed in chapter 5, was its philosophic unsoundness, as it was based on a misunderstanding of collective bargaining. He believed that there cannot be a consistent law that allows group control and at the same time protects the right of the individual to work. The Webbs were identified by Taylor as the first to explain the labor movement based on a study of its activities and functions.6 They coined the term "collective bargaining." Their works are classic and were to be read first, he urged, because theirs was the earliest theoretical attempt to present collective bargaining. It was a novel notion in the 1890s that management and labor could reconcile their differences. At that time, management unilaterally established conditions of em6. Sidney and Beatrice Webb, Industrial Green, & Company, 1897).

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ployment and simply posted them, and labor's answer was to post its own conditions unilaterally. The Webbs represented a marked departure from this type of labor-management process, explaining that the issues could be subject to joint discussion, negotiations, and conciliation. Taylor compared Perlman's concept of "job control" to the Webbs' "restriction of numbers." The Webbs saw the "restriction of numbers" as a monopolistic control of the supply of labor. The "restriction of numbers" led to control for all the union workers. Once the workers were in control, they could get the "Device of the Common Rule." The Webbs' "Device of the Common Rule" was founded on the "standard rate" and the common terms of employment for all workers.7 They believed that once the common rule was accepted, there could no longer be intraplant bargaining, but that with the larger unit such bargaining was necessary. Because this challenges the right of an individual company to determine its own working and wage conditions, management has fought "the outside agitator" who is attempting to have interplant organization and common rules. In 1946 Sen. Joseph Ball (R., Wise.) introduced legislation that threatened labor at a basic point: the common rule. He attempted to outlaw multi-unit bargaining in the guise of assisting individual bargaining and local control of the unit. Taylor stated that the old A F L was more closely concerned with the notion of restriction of numbers and that the impact of the CIO in the 1930s represented a major shift to the device of the common rule, which increased competition as nonlabor factors became more important, resulting in a stable, high-priced labor force. Taylor taught that competition was based on the use of managerial skills, not on driving down wages. For example, a new company with new equipment need not start with cheap labor because it has the advantage of efficiency. The Webbs presented their theory not only as an assertion of economic power, but also as one in which labor unions would use political power. The economic power was the withdrawing of services from the machine or plant. But the Webbs said labor should achieve its objectives both ways: politically and through the use of economic power. They assumed that collective bargaining was simply a contemporary practical phase in the determination of conditions of employment, a compromise intermediate step to accommodate the relationship between capital and labor as a way station on the journey toward socialism. In the United States at the turn of the century, there was a marked 7.

Ibid.

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deviation from the Webbs' concepts in the Wisconsin school. The University of Wisconsin was a strong center in the theory of labor, and its faculty led the nation in translating this into action through the promotion of social legislation in Wisconsin and nationally. Ely was the forerunner; Commons strongly influenced the thinking of everyone who works in labor relations; Perlman, in turn, was an important influence on Taylor. Taylor said, "For most of us, the first glimmer of understanding and then that sense of a big job done came from a study of their writings. An incalculable debt is owed to the men of Wisconsin."8 Commons gathered around him able researchers who were influenced by German historiography. Their method was comparable to Marx's historical approach. Taylor noted in his lectures that Commons explored historically but not dialectically, as did Marx. Commons found the start of the labor movement at the time when the wage contract was broken from the price contract, when wages were determined independendy of prices, and he made much of the role of the merchant capitalist. The crucial advantage came when the capitalist provided orders and prices in advance. This introduced price lists. The producer had to get orders out for a fixed number of products—for example, for a specific number of shoes. Therefore, the manufacturer made a separate bargain with the workers. He tried to set wages to guarantee a profit. Commons and Perlman related the uniqueness of the free labor movement to basic characteristics of the American scene, such as available free land, immigration, and the uncertainties of the business cycle. The crucial difference between Commons and Marx, according to Taylor, was that Marx saw the dispossession of the means of production leading toward an irreconcilable conflict in which the workers were to capture the means of production. Commons saw this phenomenon as a bargaining process. The workers would strike to get a better contract to establish a better working relationship with the manufacturer rather than rending society and changing the world. The Commons group were the only ones to take issue with the Marxian approach from the start. The Perlman "job conscious" theory flowed from John R. Commons.9 Commons saw the start of the labor movement as part of a bargaining process with the wage earners as a distinct group. He rejected class 8. "Labor-Management Relations in the Days Ahead," address at the Industrial Relations Center, University of Wisconsin, Madison, 13 December 1948, p. 1. 9. J. R. Commons, History of Labor in the United States (New York: Macmillan, 1Θ21).

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warfare and demonstrated that it was possible to find harmony through a bargaining relationship. The Commons group did not accept the Marxian notion of surplus value; rather, they accepted a wage theory and profit system because the concept of bargaining classes implied accepting the private system. Taylor noted that the Commons view of unions as a bargaining class saw the labor movement as a distinctly American phenomenon, different from that of Europe. Commons described the American labor movement as fitting into a national product market that must be competitive with other goods in other areas. Many identified the Commons theory as an "expansion of the market theory," but Taylor saw it as a development of the bargaining classes theory. Commons related the expansion of the market to the spread of transportation into the West and identified the development of national unions as a result of the growth of industry. Taylor cautioned his students that not all of the Commons History was accurate. He believed that Commons and Perlman may have overstated the "job consciousness" of the American labor movement, but that it remained a most important factor in explaining collective bargaining. Commons saw organized labor as a group of autonomous bargaining organizations. Developing from Commons, Perlman saw that the principal function of the AFL as a confederation was to allocate boundaries and to settle boundary disputes. The great crime of the AFL was "dual unionism," the overlapping of charters. But unions, with their own territories fairly well defined, still got into jurisdictional disputes, and it was the function of the AFL to settle those disputes. Taylor believed that the federated structure of organized labor with its internal rivalries was evidence of the Commons-Perlman thesis. There is a key distinction between making public policy, with the resulting activity for legislation to protect the achievements of collective bargaining, and the rival concept of the substitution of political power for collective bargaining. The Webbs, ultimately, wanted to use political power as a replacement for collective bargaining. Commons and Perlman were for limited political action only to enhance and reinforce the collective bargaining process.10 Taylor noted that the Taft-Hartley Act forced unions to go into national politics on a large scale to get sufficient power for repeal. 10. Perlman's opposition to labor's political action may be found in his " L a b o r in the New Deal D e c a d e , " Educational Department, International Ladies Garment Workers Union, 1945, pp. 1 5 - 3 6 .

Early Years: Collective Bargaining Theory According to Taylor, Perlman saw the labor movement as a government within a government, as autonomous organizations not subject to governmental controls. Perlman, who saw the labor union as a "job empire," insisted that labor should be free from review by political government in its area of activity. The A F L had the right to charter the unions, divide territory, establish job sovereignty, and settle jurisdictional disputes. Permanence and stability were major early objectives of the AFL, because the labor movement wished to avoid the instability of the earlier unions that were politically oriented, seeking Utopias and establishing dual unionism. Thus, the AFL established job allocation, discouraged squabbling, blocked invasions, and prevented poachers. The AFL challenged the employer's empire, but the employers assumed their sovereign rights, too. The result was a clash of empires within a concept of bargaining classes, not class warfare. Taylor was uncomfortable with Perlman's psychology that identified a cleavage between the philosophies of the employers and employees. To Perlman, employers are optimistic, confident and risk oriented, but employees have a limited-opportunity point of view and are protective and defensive. Taylor saw this as an oversimplification. Perlman also identified intellectuals as a threat to the labor leader, because intellectuals assumed workers were ignorant; enlightenment would come from intellectuals, not the elected rank-and-file leaders. Perlman said the intellectuals frustrate the labor movement by seeking to impose an abstract, unreal theory. Taylor added that they achieve leadership only when the labor movement is driven underground. Taylor was sympathetic to Perlman's reservations about intellectuals. T o Perlman, the theory reflected suspicion of the intellectual left; to Taylor, it represented hostility toward those who did not understand or accept collective bargaining. Taylor agreed with Hoxie's objections to a simplistic explanation of the labor movement.11 Hoxie felt that the labor movement fell into distinct, identifiable types that were not necessarily dependent on an economic background. Their organization reflected the total situation, and he attacked the economic and monolithic explanations of the labor movement. "Welfare unionism," a Hoxie category, may be illustrated by the railroad unions. Because railroading was a dangerous occupation, the railroaders were pioneers in developing their own insurance. They 11. Robert F. Hoxie, Trade Appleton & Co., 1917).

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avoided strikes, shunned the AFL, and accepted the original Railway Labor Act, in part to protect their large insurance funds. Taylor deplored the fact that Hoxie was no longer taken seriously. Hoxie's classifications were attacked as not valid, but most of them were actually exceptions to his key rule: business unionism. Hoxie's "business unionism" concept was very similar to Perlman's job consciousness and to Commons's bargaining classes. Each identified the structure and organization of collective bargaining as it existed at that time. Thus Hoxie's classifications were fairly accurate in the early part of the twentieth century. The various explanations of the labor movement before Hoxie presupposed a system of private enterprise, but Hoxie offered a dynamic approach. His method could be adapted to a changing social environment, whereas Taylor pointed out that Perlman's could not. Hoxie's strength, according to Taylor, was his insistence on a pluralistic approach and his keen, accurate descriptions of what existed at that time. Perlman failed in his analysis of the European labor movement because his generalizations were based on the American experience. The most important deficiency, Taylor claimed in his lecture on the Perlman theory, was its inability to carry over into industrial unionism. The Wagner Act and the CIO could not be accounted for in Perlman. Taylor included voluntarism and tripartitism as part of the evolution of the Commons-Perlman thesis. His experience on the War Labor Board and the Wage Stabilization Board and his arbitration role were illustrations of applied Perlman. Taylor identified Sidney Hillman as one who developed a philosophy that was the antithesis of Marxism; it was "new unionism." It claimed that industry's and labor's interests are so close that the parties are bound together and that there was no sharp cleavage between management's and labor's functions. Labor had to enable industry to be profitable. It was class cooperation. Wight Bakke developed this theme as "mutual survival." It is a distinct and different point of view, neither Commons's bargaining classes nor Perlman's job control. Whereas Marx said the gap between capital and labor cannot be bridged and that conflict is inevitable, Hillman said collaboration between the two can serve the workers—a notion that developed in the needle trade, where socialism was strong among the workers. Taylor's lectures on the American labor movement had little historical or chronological emphasis. Although they contained references to much of current journal material, his emphasis was on Commons, Perlman, Marx, Hoxie and the Webbs as modified by practitioners such

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as Hillman and Golden. He also lauded John Dunlop for attempting the first overall view of labor-management relationships in his work on industrial relations systems.12 Indeed, the focus was his fascination with the work of theoreticians and practitioners who had a vision of the structure of labor management relations and the relationship of the parties.

Industrial Democracy One of Taylor's primary lecture themes was that collective bargaining is nurtured by industrialization and democracy. Historically, all nations with even a small degree of industrialization and democracy have evolved some form of collective bargaining and a system of industrial democracy. Taylor believed that labor and management had "strong mutuality of interest in both the unions' demand for stability in working conditions and management's demand that it be kept in a competitive position."13 He wrote that Collective bargaining is neither a 'natural' nor an instinctive way of industrial life. The primacy of reason and the will to cooperate, both so important in agreement making, doubtless have to be classed as an acquired characteristic. In addition, an assumption that the objectives of organized labor and management are reconcileable, because their common interests are more compelling than the points of differences.14 In Taylor's scheme, industrial democracy was based on the "mutuality of interests" of labor and management nurtured by democracy and industrialization. Taylor saw the economic system as requiring private decision making and felt that the parties must be "left relatively free to work out solutions to their own problems."15 A major premise of the structure of collective bargaining was its decentralization within a system of private decision making.1® 12. John T. Dunlop, Industrial Relations Systems (New York: Holt, 1958). 13. The Government Regulation of Industrial Relations (New York: PrenticeHall, Inc., 1948), p. 341. 14. Ibid., pp. 369-70. 15. Ibid., p. 331; also "Mutual Obligations of Labor and Management," lecture, Carrier Institute of Business, Syracuse, N.Y., 11 October 1948, p. 8; "Proper Methods of Determining Wages," Trade and Commerce Bar Association, New York City, 28 February 1946, p. 2. 16. "The Adequacy of Taft-Hartley in Public Emergency Disputes," Annals of the American Academy of Political and Social Sciences 333 (January 1961): 77.

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The collective-bargaining system was dynamic.17 The parties within this private decision-making system must have the leeway to experiment and develop their own collective-bargaining procedures. When the first General Motors-United Auto Workers long-term agreement (1948) included a cost-of-living and annual-improvement factor, there was much adverse reaction from other unions and management, as well as from the government. Taylor noted that the parties might well take into consideration the public reaction to their agreement, but he stated emphatically that the collective-bargaining system "does not assume that private decision-makers have a national planning responsibility."18 Taylor believed that "the basic function of the union is to provide a means for the individual worker to participate in an industrial democracy."19 He used Harry Shulman's definition of industrial democracy "as the essential condition of the political democracy, the means of providing for the workers lives in industry the sense of work, of freedom, and a participation that democratic government promises them as citizens."20 The key to worker participation was the grass-roots involvement of the individual in the grievance procedure, the election of stewards, and the processing of grievances. The individual was free to participate in the internal initial steps of industrial democracy.21 This was his reconciliation of the role of the individual within the function of group determination. The great industrial-relations challenge has been the effectuation of collective bargaining as a constructive social instrument. It was a search for industrial self-government.22 Within an industrial democracy the formulation of some terms of employment was a joint undertaking of both unions and management.23 Taylor never granted that a goal of industrial relations was the joint determination of all aspects of industrial life. Although the theme of collective bargaining as part of the competi-

17. The Full Fashioned Hosiery Worker: His Changing Economic Status (Philadelphia: University of Pennsylvania Press, 1931) pp. i, v. 18. "Public Responsibility of Unions in Collective Bargaining," symposium sponsored by National Institute of Labor Education, University of Wisconsin, November 1959, p. 19. 19. "The Role of Unions in a Democratic Society," address before the Harry Shulman conference on current problems in labor relations, Yale Law School, New Haven, 10 January 1958, p. 4. 20. Ibid., p. 1. Taylor cited Harry Shulman's Reason, Contract and I.aw in Labor Relations. 21. Ibid., p. 4. 22. Government Regulation, pp. vii and 5. 23. "Role of Unions," p. 8.

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tive private-enterprise system was constant in Taylor, it is important to note that in his view competition between workers to sell their labor was a category different from the competition in the sale of goods. He believed that labor should be taken out of the competition of the labor-product market. Obviously this meant the subordination of individual rights to group rights.24 There was a connection between the concept of labor as not a commodity, group rights, and the quality of bargaining. Taylor was concerned with the criticism of unions in the 1960s: When the so called sweetheart contract is in the spotlight, emphasis is placed upon the function of the union in seeking whatever the employees aspired to. Yet with increasing extent, the union function involves a mediation between the conflicting interests of its own membership. There are times, moreover when the union is called upon to restain the employees demands either in the interest of effective plant and company cooperation or in the interest of national planning. There is an apparent conflict between such functions and the public disposition to make the union more responsive to employee direction.25 One of the key aspects of industrial relations was that they depended on the bargaining that went on between the employer or the manager and his supervisor—an aspect of internalization of collective bargaining.26 The union also had to negotiate the diverse interests of its workers in the plant, and it had to resolve the conflicting interests of its own membership.27 To Taylor collective bargaining was not self-effectuating, nor was it the exclusive responsibility of unions. The employer had to play a role.28 The main functions of the unions . . . are primarily: one, to make available to individual employees a right effectively to participate in a determination of the conditions under which they work; two, to discern, reconcile and then represent the diverse and often conflicting demands and interests of its membership and, indeed, even the interests of its non-members in a bargaining unit; three, to 24. Government Regulation, p. 62. 25. "The Public Interest—Variations on an Old Theme," National Academy of Arbitrators, 29 January, 1965 (reprint for B.A. and Econ. 912, American Labor Movement for graduate classes at the Wharton School), p. 7. 26. "Labor Relations Is Management's Responsibility," address at annual meeting of the Gray Iron Founders Society, Cleveland, 17 October 1952, p. 4. 27. "Role of Unions," pp. 5-6; cf. the R. E. Walton and Robert B. McKersie concept of intraorganizational bargaining in their Λ Behavioral Theory of Labor Negotiations (New York: McGraw-Hill, 1965). 28. "Role of Unions," p. 7.

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share with the employer the making of important joint business decisions in which the need of union members are reconciled with the needs of the business enterprise. 29 He noted the mutuality that existed between the negotiating teams and wrote that when an agreement was reached, labor and management negotiating teams "stand shoulder to shoulder vis-ä-vis the employee."30 Their purpose in winning worker acceptance of the agreed terms was in keeping with Taylor's "meeting of minds" theory. One of his principal reasons for writing the Government Regulation of Industrial Relations was "to evaluate the strong trend in our country toward government regulation of industrial relations in order to discern whether that is either inevitable or socially desirable." 31 Taylor's solution for the trend toward increased government regulation was for labor and management "to set up their own machinery for settling disputes whenever a strike or a lockout entails an undue social cost."32 Industrial self-government meant that organized labor and management would settle their own differences by reaching understandings through compromise and agreement without government interference. 33 The labor movement would continue to maintain limited objectives only as long as substantial economic protection and security resulted from collective bargaining. 34 At first Taylor identified the cornerstone of the development of collective bargaining as being the "private enterprise" system as it existed in the early twentieth century. By the early 1940s he began to use that term interchangeably with the "private decision-making" system. In the 1960s he became deeply involved in public-sector bargaining problems, especially those concerning the New York City teachers. He saw these problems as being closely related to the unresolved publicemergency dispute crisis. The preferred term now was a "pluralistic society" or "a pluralistic economy." It was an effort to identify simply and clearly the underlying basis of American society that nurtured a free labor movement, encouraged managerial decision making, and allowed for collective bargaining. The collective-bargaining system was based on a wage-and-profit economy. The emphasis was on private enterprise because almost all of unionization was in the private sector. The shift in description to 29. Ibid., p. 24. 30. "Decision-Making in a Laboristic Economy," address delivered at 1959 Client Seminar Workshop, Edward N. Hay & Associates, Philadelphia, p. 10. 31. Government Regulation, p. ix. 32. Ibid., p. 22. 33. Ibid., p. 1. 34. Ibid., p. 69.

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"private decision-making" and to "pluralistic decision-making" came as the public sector bargaining grew and as Taylor became involved in those problems. During his early years his emphasis was on a wage-and-profit system, but as a result of observing the adaptation of collective bargaining to the public sector and the not-for-profit private sector, he later shifted his emphasis to linking pluralism, democracy, and industrialization, rather than pluralism, wage system, and profit system. When comparing the American collective-bargaining system with other systems, he found the others lacking. He observed that the labor movement in the United States was based on a combination of cooperation and competition. The competitive system adapted well to the private decision-making process, but neither labor nor management was motivated entirely by the competitive urge, and so, to survive, the parties had to cooperate. This theme was present in his writings from his early days in the hosiery industry, and it was amplified later by references to Bakke's theory of "mutual survival." Taylor believed that society survived because of a complex system of decentralized decision making. Workers negotiated for their own good in a series of bargains that became a multitude of negotiations, and the end result was the common good. As success was not guaranteed, the result of the threat of failure was pressure on the parties to work out an accommodative or cooperative system to enhance the possibilities of success. This was for the common good of industrial democracy.

Group Determination Taylor's lectures on the relationship of group determination to collective bargaining stressed that it fit the needs of the group and is created to serve the group. Several principles permeated his treatment of the topic. Collective bargaining does not fit the needs of the individual, because it subordinates the individual to the group; it is group rights versus individual rights. There is no freedom to contract if freedom to reject is absent. Workers approve the bargaining issues; labor is not always unanimous, but the majority prevails. There are conflicts within the group over what demands should be made of management initially, then later over the settlement terms. An important function of the union is to accommodate conflicting views within the membership. There can be no attempt to pattern collective bargaining after the individual. Workers generally want group freedom, rather than individual freedom. Taylor stated that the real question is whether the

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unions can maintain their democracy. The rights of the individual workers are best protected within unions that are democratic; but a democratic union leadership also has the responsibility of establishing internal discipline, and that set of rights is difficult to reconcile. He felt there was a close connection between union self-determination and such matters as union security, the scope of the bargaining unit, and the problems of internal democracy and other basic labor-management issues. "Dogged adherence by union leaders to long established objectives can easily be mistaken for grasping of power for its own sake."35 An unresolved aspect of group determination was the conflict between job control and property rights. Among his earliest writings, Taylor noted this as "clashing philosophies."36 In general, Taylor's concept of group rights was very close to the Perlman notion of "job control."

Equality of Bargaining Power Taylor's use of equality of bargaining power came from the Webbs, but he related it to Perlman's "job control" and the ability of both sides to close down the enterprise. "In a collective bargaining system, the term 'equality of bargaining power' can be given logical meaning only in relation to job control"—that is, the ability of both sides to close down the plant. "Only in such terms have I been able to give reasonable meaning to the phrase 'equality of bargaining power' as that term was used in the Wagner Act."37 The Wagner Act was government intervention to create equality of bargaining power,38 but Taylor's persistent theme was that equality of bargaining power was a meaningless concept as long as labor and management held contrary philosophies.39 Taylor stated that "participation in the sense of being consulted is not enough. Only when equals participate in working out problems of mutual interest can differences be reconciled in a mutually acceptable manner . . . 'a willingness to lose' can come only out of negotiations by equals."40 But the equality of bargaining power does not mean that the 35. Government Regulation, p. 59. 36. Underwear and Hosiery Review 73 (November 1931) : 130. 37. "Labor-Management Relations," p. 4. 38. Government Regulation, p. 45. 39. Ibid.; it also appeared often in Underwear and Hosiery Review between 1930 and 1933. 40. "The Search for Industrial Democracy," address at the Institute on Business and Economic Problems, University of Pittsburgh, 5 March 1952, p. 3.

Early Years: Collective Bargaining Theory results of negotiations will be fair and equitable on the basis of some objective measure. Often an effort is made to get the government to adjust to balance of power rather than the alternative of labor and management attempting to deal with each other equally at the bargaining table. 11 Taylor pointed out that the resort to the use of political power to supplant economic power reveals that collective bargaining "carries the seeds of its own destruction." 42 The Webbs' explanation in Industrial Democracy that an employee bargained with 100 percent and the employer bargained with 1/100 percent is crucial to the concept of equality of bargaining power. The worker's need for a job is greater than the employer's need for a laborer. In individual bargaining, the stakes at the bargaining table are disproportionate. The employer can decide that none shall work; this has to be matched with the right of the employees to withdraw their labor. When all labor may b e withdrawn, there is equal bargaining; there is equality of bargaining power when there is an equal potential for withdrawal. Taylor referred constantly to the Webbs' illustration. The public accepts without hesitation an employer's closing of a plant because he does not operate at a profit. But the public opposes or is uneasy with the workers who close a plant because they are dissatisfied with the returns from their labor. The basis of the Wagner Act was to establish equality of bargaining power. With recognition, both management and labor had the same potential to withdraw all labor. The combination of the right to strike with the formal recognition procedures that came with the Wagner Act established the basis for the equality of bargaining power. Industrial peace comes through the use of equality of bargaining. Taylor wrote, "An agreement [is] reached with the consent of the parties having equal bargaining power" and only "by participating in the determination of wage contract, they can give real consent to the terms of employment." 43 Collective bargaining is a process for determining conditions of employment through agreement. Part of the search for equality of bargaining power is essentially an effort to avoid the imposition by one party of its unilateral terms and conditions of employment. 44 From the 1920s into the sixties Taylor rarely spoke on collective bargaining without mentioning equality of bargaining power. In his 41. "Labor-Management Relations," p. 3. 42. Ibid., pp. 5-6. 43. "Toward a National Labor Policy," Atlantic Monthly, October 1938, p. 337. 44. "Collective Bargaining Notes," 1963, p. 1. Used at Wharton School for class work.

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last decade, he thought the differences between labor and management were moderating, if not muffled. Labor was secure. He believed the equality of bargaining power concept was accepted, if not fully understood.

"Mutual Agreement" Taylor viewed agreement as the only way to settle the terms of employment in a system of collective bargaining. He noted that agreement is not necessary in a system of legislatively imposed conditions. "Meeting of minds" applies to more than labor relations; it is relevant in any dispute settlement system—international, community, commercial, domestic. To Marxists, trade unionists are traitors to the working class because they accept the collective-bargaining system based on agreement with the employer. To them the goal should be changing the economic system, not trying to make it work. When Taylor first became aware of the term "meeting of minds" is not clear from his writing. It may have had Quaker origins and may be related to the Quaker notion of the consensus of the meeting: the moment when general agreement was reached without a vote, but when all seemed agreed as a result of the trend of the discussion. Taylor believed strongly that "the essence of free collective bargaining is a meeting of minds."45 He stated, "our civilization is fundamentally a 'meeting of minds civilization.' In a democracy, people are willing and able to reconcile their differences and come to a meeting of minds. Compromise is an essential foundation stone of our whole civilization."46 Under collective bargaining, the only way to determine terms of conditions of employment is through mutual agreement.47 There is "a vast difference between an arbitrarily imposed decision from which those affected have no responsibility and a decision devised by agreement and embraced by the parties and accepted as their own."48 In his view it was important to preserve the values of collective bargaining because it was practical and equitable in arriving at terms of employment, acceptable to those immediately affected by them. 49 45. "Labor-Management Relations," p. 4. 46. "The Role of Mediation in Labor-Management Relations," address at a conference of regional directors of the Federal Mediation and Conciliation Service, Washington, 23 June 1952, p. 1. 47. Ibid., p. 2. 48. "The Search for Industrial Democracy," p. 2. 49. "Labor-Management Relations," p. 12.

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The meeting of minds concept carried over into Taylor's arbitration practice in those cases where the parties desired to avoid imposition of terms. He said, "I like to serve on tripartite boards which recognize the meeting of minds idea as distinct from someone telling others what to do."50 The contract was central to collective bargaining because it signified that both sides found the conditions acceptable. This was Taylor's meeting of minds. The contract signing was the point at which the parties agreed on conditions of employment. It was made possible by the equality of bargaining power and "by the pressure inherent in the right to strike and to lock-out. Self-interest and avoiding the strike or lock-out, which are the ultimate arbitraments, is counted upon to bring about a modification of extreme positions."51 Although the contract marked the pivotal point of the meeting of minds that signified the end of negotiations and the beginning of contract administration, there were differences between labor and management on the concept and purpose of the contract. Employers traditionally tried to define collective bargaining, identified in the contract, as limited to the basic labor agreement. Management believed it had an unlimited right to determine unilaterally those conditions not structured within the contract. Unions, on the contrary, tended to see the labor agreement as being a skeleton to be fleshed out by the day-to-day bargaining over grievances.52 Taylor was chagrined by the expansion and length of contracts and by the increase of technical terms. These agreements get bigger every year as unions spell out the detailed rights of employees that will not be recognized by employers unless they are in writing. In consequence, a few labor agreements become so complex as to be beyond the comprehension of mortals. Grievance handling can become a game in which advantages and disadvantages are sought on technical grounds.53 Taylor resisted the increase in the complexity of bargaining. He wrote: The collective bargaining system will operate satisfactorily . . . only if bargaining is intelligent and if considerable restraint is exercised in the actual use of industrial warfare. . . . Economic power . . . is a last resort weapon, to be used to resolve critical issues and 50. " T h e Role of Mediation," pp. 2 - 3 . 51. "Labor-Management Relations," p. 4. 52. "Report re Development of Grievance Arbitration," incomplete manuscript ( 1 9 7 1 - 7 2 ) , pp. 1 1 - 1 2 . 53. " T h e Public Interest," p. 198.

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only after all other reasonable steps for securing a meeting of minds had been tried without success. '4 Collective bargaining will work only if the parties are willing to compromise, to explore accommodations, but, most of all, to "consent to lose."55 Taylor's definition of the responsible union was the key to this. The union had to be concerned with developing procedures to accept "a consent to lose" on the part of those employees who received less than they had hoped for. To him, that was a responsible union.50 The collective-bargaining system had to be receptive to persuasion and willingness to accommodate an exercise of restraint in the use of power and compromise was a tool used by professional negotiators. The labor agreement provided the general principles and guides on conditions of employment. It was the day-to-day operations that gave the essential meaning to the manner of the application of the agreement.57 "Mutual agreement" was the crucial bridge between labor and management. Collective bargaining was possible only when both sides sought to effectuate their areas of agreement. The importance of "mutual agreement" to Taylor may be identified by the fact that most of his speeches, papers, and articles contained a reference to the central role of mutuality.

Fairness and Equity Taylor maintained that "fairness and equity have substance in collective bargaining ultimately in terms of what is achievable by a balance of relative economic power."58 However, he also stressed that there are no objective criteria or standards for determining what is fair and equitable. 59 When Taylor pointed out that labor-management relationships in collective bargaining can be typified by intelligence and restraint in the use of power, he cited the needle trades and hosiery, examples that he used all of his life.60 The theme was present in his early articles in 54. "Criteria in the Wage Bargain," in Emanuel Stein, ed., Issues in Collective Bargaining and Taft-Hartley Act, proceedings of the New York University First Annual Conference on Labor (New York: Matthew Bender and Co., 1948), pp. 6 6 - 6 7 . 55. "Role of Mediation," p. 18. 56. "Public Responsibility of Unions," p. 21. 57. "Collective Bargaining Notes," 1963, p. 2. 58. Government Regulation, pp. 2 0 - 2 1 . 59. Ibid., p. 23. 60. Ibid., p. 28.

Early Years: Collective Bargaining Theory the Underwear and Hosiery Review, persisted through the late 1930s, and was used in his classroom at the end of his teaching career, but with reservations.61 His general argument was that fairness and equity is determined by whatever the parties agree. One cannot be for collective bargaining and against the right to strike. Fairness and equity has a base of economic power, which is preferable to political power. There are abuses, since some powerful companies and unions dominate their opponents, but Taylor's experience indicated that most parties exercise reasonableness and restraint. The completed agreement is both a signification of fairness and a reflection of economic power. The Taylor concept of fairness and equity as determined by mutual agreement fitted well into the notion of collective bargaining as private decision making. The spread of collective bargaining into public employment and the private not-for-profit sector served to tax the vitality of agreement making as a private, isolated phenomenon. Taylor never rejected his concept of fairness and equity, but it receded as he became more concerned with public policy and the public sector.

Union Security and, Management Security Taylor taught union security with scant reference to the types of contract clauses and with no court citations. His experience in the hosiery industry during the 1920s made a profound impression. Its history served as a basis for his belief that it was to management's advantage to have a strong, secure union and that it was to the union s advantage to have a secure employer with the flexibility needed to manage the enterprise. The key to the security problem was a functional analysis of management and labor. The union was a political organization responsible to its membership. Since Taylor saw the union's function in terms of Perlman's job control and the Webbs' protection and improvement of conditions of employment, he felt its function was not to direct or manage the enterprise. Conversely, management's function was to provide a service or manufacture a product; no matter how enlightened a company, its prime role was not to protect the well-being of its employees. Management became secure when it had the freedom of action to initiate change. The corollary is that a union becomes secure 61. "Toward a National Labor Policy," p. 343. By 1970 his syllabus on the "American Labor Movement" course mentions the concept obliquely (p. 17) but spends much time on the dilemma of reconciling collective bargaining with a greater protection of the public interest (e.g., pp. 4 8 - 5 0 ) .

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when its membership issue is resolved, when all workers belong. Only a secure union may function responsibly. If the union leadership must compete with other unions for membership, or campaign against management in order to get members, then it must push every grievance, no matter how invalid. It was Taylor's belief that only a secure leadership can be realistic with the membership in analyzing contract proposals. Therefore, management cannot expect responsible union leadership unless the membership issue has been resolved and management no longer competes with the union for the exclusive loyalty of the membership. Workers can be loyal to both company and union; union security and union responsibility are intertwined. A responsible management will make the union secure and will have a problem-solving approach to its workers and union. A responsible union will offer realistic leadership to its members and will provide flexibility to management. The result of union security and management security is greater potential for a meeting of minds.

Function of the Strike To Taylor the right to strike was another method of bringing about a meeting of minds. He saw the function of a strike as an alternate means of bringing about an agreement, and he preferred to discuss the "function" rather than the "right" to strike. Strikes have a functional purpose, and Taylor felt that the strike cannot be understood if it is viewed solely as conflict. The real conflict is the difference over the terms of employment, and the strike is a method used to resolve the underlying conflict. It exerts pressure on both sides. It is difficult for the parties to anticipate the outcome, and this uncertainty forces them to explore alternatives. The constructive force is found in the threat of the strike; it is this threat that propels the parties toward a meeting of minds. Eliminating strikes does not solve the underlying conflict. Some other method would have to be invented to resolve disputes. Strikes may not be the best way, and there are other alternatives. The right to strike is the right of the majority to determine that none shall work. Taylor saw this as flowing out of the "job control" notions of Perlman. The right to work should be determined by the group and not the individual. Taylor noted that labor thinks of the right to strike in terms of complete control of the job by the group. The public counters with the protection of individual liberties of those who want to work. Some

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employer opposition groups use the argument of the protection of the right of the individual. They claim they want collective bargaining and that they also want individual bargaining. However, labor's experience indicates that individual bargaining and collective bargaining cannot coexist. The fact is, it is labor that must withdraw its services; labor must take the initiative. Actually, the history of industrial relations reveals that any competent management can create and present issues in a manner that forces the union membership to go on strike. The labor movement is agreed uniformly on its right to strike, as well as its abhorrence of the scab and dual unionism. In spite of differences within the labor movement with respect to size, structure, politics and ideology, labor agrees on these matters. A strike must be 100 percent; foremen must be kept out, because they will work if they enter the building. Workers do not want job competition; they want job control. Taylor felt that his analysis of the right to strike substantiated the Commons-Perlman thesis. Originally, there were two types of strikes: over terms of a new agreement, and over a grievance. The key difference between the two is that the new agreement affects all, whereas the grievance affects one. Arbitration of grievances has made obsolete the strikes over contract interpretation and routine issues. The wildcat is a rejection of the grievance procedure and arbitration and is a strike as much against the union leadership as against management. In practice the strike is a recourse to economic power, since it is the cost of the strike that forces an agreement. The strike is one mechanism for resolving conflict, and the process of avoiding the strike induces agreement. To remove this mechanism by abolishing the right to strike actually increases conflicts, as seen in Australia and our own public sector. The strike process includes elements of economic coercion, but it also may be viewed as economic persuasion and as an instrument for industrial peace. Taylor saw the function of the strike as pressure on both sides inducing an agreement. Also, it served as an alternative to government imposition of terms of employment.82 The right to strike and the lockout served as essential insurance for peaceful settlement.63 The greater the risk of collective bargaining, the more reason for compromise and agreement.64 The strike was the use of economic power, and it served as a prime motive power for agreement making and free collective bargaining. 62. "Role of Mediation," p. 5. 63. "Labor-Management Relations," p. 5. 64. Government Regulation, pp. 1 8 - 1 9 , 2 1 - 2 2 .

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Referring to the strike, Taylor commented: An institutional role has been assigned to such use of economic force. Nor does this arise from any love of belligerency for its own sake among the great mass of Americans. We hold deep convictions about the way in which men should live and work together. The right to strike is related to a belief that men should not be required, against their will, to work for the profit and benefit of other men. The employer's right to close down his plant is related to the belief that ownership and direction of industrial enterprise should remain in private hands. [But it was important for both labor and management] to accept the social obligations which accompany [the right to strike and lock-out.]65 Taylor persisted in linking together the terms "strike" and "lockout."ee But, he noted, "for reasons not entirely clear, there seems to be less disposition to accept the lock-out as part of the collective bargaining system in which relative economic power is a final arbitrament."67 Taylor accepted Dunlop's term "crisis collective bargaining," with its emphasis on tough negotiations and easy recourse to strike. He said that "one would think that there has been enough experience with this cycle of events to generate efforts at improving negotiating procedures" and pointed out that we were novices in developing substitutes for the strike.68 He was heartened in the late 1950s and early sixties that procedures were being developed and experience gathered.69 The strike was becoming less and less acceptable, but he insisted that parties would have to develop their own procedures to avoid recourse to economic strength.70 He deplored the focus on the strike issues in the public sector, because he feared that it might stifle what he saw as an orderly trend toward more rational relationships. He knew that the publicsector strike would affect the private sector; therefore, he pressed for the development of substitute procedures in public-sector impasse procedures.71 He also realized that there was a need for extraordinary procedures to handle public emergency disputes.72 He warned that such disputes should not be only those in which 65. "Proper Methods of Determining W a g e s , " p. 2. 66. Government Regulation, pp. 1 8 - 2 3 . 67. "Public Responsibility of Unions," p. 18. 68. "Collective Bargaining: New Approaches to the Problem of Achieving Agreement," Industrial Relations Conference, University of Michigan, 3 0 March 1961, p. 3. 69. "Role of Mediation," p. 5. 7 0 . "Ideas for Social Change," address given on receiving the Philadelphia Award, Philadelphia, 8 April 1963, pp. 7 0 - 7 7 . 71. "Impasse Procedures—The Finality Question," Governor's Conference on Public Employment Relations, New York City, 15 October 1968, p. 1. 72. "The Adequacy of Taft-Hartley," p. 77.

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there was mere public inconvenience, and he advocated letting the public-inconvenience strike run its course rather than have government intervention.73 But his main theme was that labor and management should develop procedures for public-emergency disputes, a persistent theme that ran through much of his writings in the 1950s and sixties.74 At one point, Taylor advocated a "board of public accountability" which would be charged with responsibility for reviewing the manner in which the parties met their collective-bargaining responsibilities. This board would be able to recommend solutions, and he felt that this power to recommend might force the parties to narrow their differences in that they would be more inclined to arbitrate their disputes.75 He saw it as an extension of mediation and insisted that the negotiating procedures of the parties in major disputes were not entirely a private matter. There are times when the strike cannot be permitted to run its course. Inconvenience is the price the public pays for the right to strike; however, many exaggerate and equate inconvenience with peril. Taylor deplored the failure of labor and management to develop successful alternatives to the strike. He felt strongly that those parts of the economy that should not risk strikes had the responsibility for devising joint procedures for avoiding strikes: Kaiser Steel and Armour were cited as viable alternatives. As a pioneer in developing theories of public-sector bargaining, Taylor was acutely aware of the inability to reconcile the right to strike and public-sector dispute-settlement procedures. He was unable during the 1960s and early seventies to develop procedures that could approach the successes of the War Labor Board or the Wage Stabilization Board. The strike was crucial to Taylor's structure. It was a better alternative for a meeting of minds than legislated conditions of employment. Whenever the strike was under attack, he would request the identification of better or at least alternate procedures.

Alternatives to Collective Bargaining Management set the pattern and standards in employment before the Wagner Act, but unilateral management action failed as a system and generated labor violence. Many workers preferred collective bargain73. "Role of Mediation," p. 6. 74. E.g., in the Philadelphia Evening Bulletin, 3 January 1949; "Impasse Procedures—The Finality Question," p. 1; " T h e Adequacy of Taft-Hartley in Public Emergency Disputes," p. 80. 75. " T h e Adequacy of Taft-Hartley," pp. 8 1 - 8 3 .

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ing because they wanted to be involved in decision making. Every society with any degree of industrialization and at least some democracy has abandoned unilateral management control of conditions of employment. Another alternative to collective bargaining is that unions may set the conditions of employment unilaterally. One system is for unions to reject collective bargaining and to set standards. They may post demands as cordwainers did and as the typographical union does now. The typographers do not seek control of jobs for bargaining power. They seek unilateral action. Israel is too unique to emulate, and the Yugoslavian system has not proved to be exportable; consequently, we have few successful examples of unions setting conditions of employment. A third option is that the government may set the terms of employment. The extreme in government control is a totalitarian system. Unionism is growing in the public sector. Public employees are rejecting the unilateral action of public management. The private sector's preferred alternative is some type of labormanagement participation. Although the right to strike must be modified—for example, during a war—it must be done by agreement through voluntarism. The parties must have, as a substitute for the strike, the right to withdraw from this agreement. Collective bargaining and compulsory arbitration are mutually exclusive. The war controls were voluntarily constructed by labor and management; compulsory arbitration is imposed by the legislature. Voluntary controls reflect a meeting of minds; compulsory solutions impede voluntary solutions. Public-emergency strikes were identified by Taylor as those that bring the public to their knees before they bring the parties to terms. Society has not yet devised procedures to bring about agreement on conditions of employment in the absence of the strike or voluntary procedures. Taylor resisted any industrial-relations system that was based on sheer power: "The imposed solution is not very productive—and forms no basis for cooperation—if it is not embraced by those who have to make it work." 76 He was as uneasy with narrow labor leaders as he was with their management counterparts. "If John Hoxie were alive today," he said, "he would find new and expanding illustrations of his category "business unionism.'" He added, "Mere operational pragmatism, even if that seems to satisfy some employees, falls short of what the company needs and expects of its labor movement." 77 Taylor warned management that the real question was whether col7 6 . " R o l e of Mediation," p. 3. 7 7 . " R o l e of Unions," p. 2.

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lective bargaining could be developed as a constructive institution or whether there was going to be a trend away from industrial democracy and toward government determination of terms and conditions of employment. 78 If the government imposed working conditions, then it was no longer a matter of relative economic power, but of relative political power. 79 Thus, Taylor rejected all the alternatives to collective bargaining because none was as attractive or as workable as collective bargaining. 80 SHORTCOMINGS O F COLLECTIVE BARGAINING

"Free collective bargaining . . . has few all out supporters in the ranks of labor, management or the public," Taylor said. 81 He knew that the public was uneasy about the possibility of a labor-management agreement that might be damaging to the public. Generally, he was more inclined to be concerned with the increasing efforts by the federal government to make modifications in the traditional enterprise system— that is, federal restrictions on the use of private power by unions and management, especially with respect to wages and price determination. 82 In his view, one of the strengths of collective bargaining was the use of private contract between labor and management, which was the antithesis of employee exploitation. Employees collaborate with the employer through contract negotiations to determine the conditions of employment. But this contractual concept became blurred. Critics claimed it turned into "a capitalist device to snare the workers and divert them from a manifest destiny." Taylor noted that in this country it caused concern that a minority of organized workers, by developing their own protection through the use of the contract, could be exploiting nonorganized workers, employers, and consumers. 83 His Penn class syllabus for "Collective Bargaining" in the fall of 1963 (BA 916) discussed the institutional aspects of collective bargaining: the security issue of both unions and management; effectuating the labor agreement, the grievance procedure, and arbitration; hours of work; productivity; technical change. Wage determination was studied in the spring semester. By 1969 his course on "New Developments in Collective Bargaining" focused on the role of the union and collective bargaining in the private sector and raised the question 78. 79. 80. 81. 82. 83.

"Labor Relations Is Management's Responsibility," p. 2. Government Regulations, p. 21. Ibid., pp. 370-72. Ibid., p. 330. Syllabus, "New Developments" course, 1969, p. 2. "Ideas for Social Change," p. 73.

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of the inevitability of compulsory arbitration of wages. It included a section on wages and on the interrelationship between conglomerates and coordinated bargaining and concluded with a section on the internationalization of business. It also expressed his concern for the principles and theories that were developed in the private for-profit collective-bargaining arena and were now being introduced into the not-for-profit sector. He had a separate section on the nongovernment not-for-profit sector, discussing such topics as hospitals, welfare agencies, and symphony orchestras. Although so much of his writings treated collective bargaining as though it could answer all possible labor-management problems, Taylor conceded readily that collective bargaining was not sufficient and complete protection for workers. There was a need for a fair labor standards act and social security.84 He was concerned with the materialistic aspects of collective bargaining—individuals, representatives, and the parties themselves being interested only in their immediate problem, not with long-range goals, and many lacking an understanding of the practices and theories of collective bargaining.85 He never lost his belief in the value of collective bargaining and the important roles that labor and management must play in continuing a positive relationship. "I believe that, in its own self-interest, management can and should exercise a much more positive leadership in developing collective bargaining as a constructive institution built along cooperative lines. Collective bargaining is not something 'conceded' to employees; it is a way of industrial life in the success of which management has as great a stake as the employees."80 In one of his last course outlines for "New Developments," Taylor quoted John W. Gardner: "The more democratic an organization or society, the more clearly it will reflect the interest of its members." Taylor warned that democratic societies, especially pluralistic ones, may be particularly susceptible to the rectifying forces of vested interests.87 His belief in the effectiveness of collective bargaining never failed, even though he found the flaws in the system. His enthusiasm for group determination, the reasonableness of the parties, the need to reach a mutual agreement, and the adaptability of collective bargaining was always manifest in his actions in both the public and private sectors. 84. 85. 86. 87.

" L a b o r M a n a g e m e n t Relations," p. 6. " R o l e of Unions," p. 1. " T h e Search for Industrial D e m o c r a c y , " p. 12. Syllabus, " N e w D e v e l o p m e n t s " ( 1 9 6 8 - 6 9 ) , p. 4 .

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The Meeting of Minds As emphasized throughout this book, a constant theme in Taylors writing and rarely absent from any speech was the concept that "our civilization is fundamentally a meeting of minds civilization." The democratic process was based on a willingness of people to reconcile their differences and to come to a meeting of minds. Compromise was the essential foundation stone.1 The "meeting of minds" was viewed by Taylor as a system that assumed "a receptiveness to persuasion, a willingness to accommodate, and the exercise of such restraint in the use of power as is necessary to avoid coercion. In these terms, 'compromise' need not be a suspicious word."2 Taylor's "meeting of minds" accepted the fact that labor and management were in conflict. He recognized they had different functions: management runs the enterprise, the union focuses on the well-being of its members; management is an administrative organization, the union a political one. Conflict in collective bargaining results, in a large part, from the difference in functions. 1. " T h e Role of Mediation in Labor-Management Relations," an address at a conference of regional directors of the Federal Mediation and Conciliation Service in Washington, 23 June 1952, p. 1; "Labor-Management Relations in the Days Ahead," address at the Industrial Relations Center, University of Wisconsin, Madison, 13 December 1948, p. 4. 2. "Developing Maturity in Labor-Management Relationships," Pittsburgh Personnel Association, 10 October 1956, p. 2.

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Taylor also recognized that the parties needed each other: prosperous workers needed prosperous enterprise. The parties had a vested interest in survival and industrial peace. Industrial warfare had been tried and found wanting: violence and strikes were too heavy a price to pay for constant warfare. The potential for peaceful industrial relations came with the Wagner Act and the equality of bargaining power, which was basic to the development of the meeting of minds.3 With both sides having equal potential to negotiate and equal possibility of recourse to economic power, there was pressure on the parties to develop procedures and explore alternate solutions of their problems; the function of the strike was to induce peace by forcing the parties into accommodation. Taylor saw a direct relationship between the equality of bargaining power, the function of the strike, and the need for the parties to seek alternate solutions. 'The greater the risk, the more reason for compromise and agreement."4 Further, he felt that management had a responsibility to develop constructive labor relationships and that this could be done without weakening the managerial function.5 Crucial to the success of the meeting of minds concept was Taylor's view that the relationship would be typified "by intelligence and restraint in the use of power."0 The meeting of minds did not come easily. Taylor identified collective bargaining as "neither a 'natural' nor an instructive way of industrial life. The primacy of reason and a will to cooperate, both so important in agreement-making, doubtless have to be classed as acquired characteristics."7 The culmination of the bargaining relationship and the meeting of minds was "mutual agreement"; it was the only way in collective bargaining. A signed contract signified that the differences between the parties had been resolved and solutions agreed. It had an economic base. Power was ameliorated by the reasonableness of man. Taylor saw collective bargaining as a continuous process, not compartmentalized into rigid segments with no connection between the stages of collective bargaining: recognition, negotiations, contract administration. This principle eventually widened the differences between Taylor and the mainstream of arbitrators. He seemed to view dispute settlement procedures primarily from the vantage point of one 3. "Labor-Management Relations," p. 4. 4. The Government Regulation of Industrial Relations (New York: PrenticeHall, Inc., 1948), p. 22. 5. "Labor Relations Is Management's Responsibility," address at annual meeting of the Gray Iron Founders Society, Cleveland, 17 October 1952, p. 2; "The Search for Industrial Democracy," address at the Institute on Business and Economic Problems, University of Pittsburgh, 5 March 1952, p. 12. 6. Government Regulation, p. 28. 7. Ibid., pp. 369-70.

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who had considerable experience as a chairman of major industries dispute-settlement procedures. This was in contrast to the more parochial views of the ad-hoc arbitrator who dealt with the more typical random daily disputes that characterize the great diversity of collective bargaining. Another theme that ran through much of Taylor's work was that negotiations and dispute settlement were primarily a private function and belonged to the parties, who, he constantly warned, must develop their own procedures—both for the settlement of contract disputes and for solving grievances—or else the government would impose procedures. He saw the Wagner Act as giving labor and management an opportunity to develop industrial self-government. Various tripartite internal disputes-settlement procedures were constantly cited by Taylor in the 1950s and sixties as experiments worth nurturing. Dispute settlement was a private function, but its continuance in the hands of the parties depended on their increased responsibility and maturity. Taylor disagreed with Harry Shulman's approach to arbitration at Ford during the forties. According to Taylor, Shulman sought to achieve a solution acceptable to the grievant Taylor believed strongly that the agreement had to be between the chairman, company, and union. If employees were unhappy, they could try to renegotiate the next contract. He saw the Shulman view as reversion to individual bargaining. Acceptability to the grievant could adversely affect a group of employees. Taylor believed in group determination, and he insisted that dispute settlement was a private function of the institutional representatives, company, and union, not a matter of individual bargaining.8 The concept of meeting of minds, Taylor believed, was applicable to a much wider area than just labor-management relations. He was eager to point to the application of dispute settlement techniques and a broader acceptance of the concept of meeting of minds in international affairs. He often cited the effort by Elmore Jackson, who in the 1950s organized meetings with United Nations personnel under the auspices of the American Friends Service Committee to discuss the common threads that may be shared by international mediators, diplomats, labor mediators, and others involved in commercial and other forms of dispute settlement. Taylor, Will Davis, Arthur Meyer, Bill Simkin, and Harry Shulman were among those who met at the UN.® 8. "Report re Development of Grievance Arbitration," incomplete manuscript (1971-72?), p. 5. 9. "Role of Mediation," pp. 13-14; the results were published in Elmore Jackson, Meeting of Minds: A Way to Peace Through Mediation (New York: McGraw-Hill, 1952); William E. Simkin, letter, 12 July 1978.

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The Process of Accommodation The Taylor concepts of accommodation were developed from his study of the practices of the AFL. His dissertation analyzed and accepted the precepts of Gompers and Green. Collective bargaining was a private matter between management and labor. The concept of "voluntarism" prevailed, and the influence of government should be minimized. His early experiences in the hosiery and needle trades allowed him to apply successfully what he had learned in his studies of the AFL; what he applied, worked. By the early 1920s, unions were achieving their internal security, both through recognition by the employers and through the development of their own organizational structure. Labor and management had worked out the full concept of the contract well before the Wagner Act. Labor gave up the right to strike and in turn achieved union security and the arbitration of grievances; management dealt with a stable, responsible union and gained in security. When the combination of the Depression and competition from nonunion sources, especially in the South, placed a fatal economic burden on the northern hosiery industry, labor and management cooperated to improve production in order to meet the competition. By the 1950s, that effort had failed. Taylor was involved in the late twenties and all during the thirties, initially as a supplier of data so that the parties may bargain rationally; soon he also became a commentator on the industry and its plight through his various monthly columns in the Underwear and Hosiery Review. These articles summarized his research, helped popularize his theories of labor movement and collective bargaining, and urged both management and unions to embrace a rational disputesettlement structure that would adopt the meeting of minds and practice accommodation. It was a problem-solving approach and it succeeded until the fifties. Taylor defined the role of chairman as one who assists the parties to a meeting of minds, a function implicit, as he saw it, in the word "chairman."10 When he accepted the umpireship at General Motors in 1941, he saw this as a major change in industrial relations because heavy industry was accepting dispute-settlement procedures and the concepts of accommodation, mutual agreement, and meeting of minds that had been practices in the soft industries. In his umpire role, he was able to utilize some, but not by any means all, of his "chairman" ideas. He did work out a more limited informal procedure for checking decisions before issuance than had been used in hosiery.11 10. "Role of Mediation," pp. 7 - 8 . 11. William E . Simkin, letter.

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and

Mediation

The World War II experience with the experimental National Defense Mediation Board and the inventiveness, success, and recognition of this period that culminated in the War Labor Board (WLB) indicated the acceptance of his ideas of accommodation. Although chapter 6 of this book, by Ed Shils, discusses this aspect in detail, it is important to recognize that Taylor regarded the WLB as essentially a mediation agency.12 The success of the board was due not to the public members providing a balance of power, but to the development of the notion of alternate solutions. It was the dedication of both labor and management to an accommodative process that enabled them to maintain a stable relationship during the war years. Basic to the accommodative process was an acceptance of each other's function. Before the accommodative process could develop, it had to be nurtured by the prior development of a secure union and a secure management, as pointed out in the preceding chapter. To Taylor, negotiations were not a haphazard matter; the parties had to develop their own dispute-settlement procedures. There was a vast difference between an arbitrarily imposed decision and one in which the parties assumed their own responsibility and devised a solution which they embraced as their own.13 The parties also should develop their own criteria for the arbitration of disputes. If the adoption of self-effectuation were transferred into the public sector, he thought, it would be easier for public agencies to accept arbitration, since the criteria for a decision would be agreed on by the parties in advance.1* Control of their own procedures would guarantee that the accommodative process was problem solving. As Taylor was uneasy with efforts to compartmentalize the stages of bargaining, he decried the shibboleth that the step from contract making into contract administration was a complete shift. He saw this as part of the growing trend toward a legalistic approach to arbitration. Often pointing out that the difficult grievances were not explicitly mentioned in the contract, he insisted that arbitrators, in case after case, were actually modifying, adding to, or changing the contract regardless of their legalistic rationale. His view of arbitration was dominated by the need for management and labor to accommodate. Therefore, he viewed the collective-bargaining process as continuous. He scrutinized the process through the eyes of a chairman who aided the parties in solving their grievances and also often reached for a pen to draft their 12. "Role of Mediation," p. 17. 13. "Search for Industrial Democracy," University of Pittsburgh, March 1952, p. 2. 14. "Impasse Procedures—The Finality Question," Governor's Conference on Public Employment Relations, New York City, 15 October 1968, p. 4 (typescript used in Wharton School).

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contract language. Arbitration was part of the accommodative process rather than a derivation of a court of equity. Problems had to be solved, and Taylor believed that the arbitrators should assist the parties in their accommodation process. His firm belief in accommodation led to the dispute with the American Arbitration Association (AAA) in the late 1940s and early fifties mentioned in chapter 1. Taylor and Noble Braden, at that time AAA vice-president, debated whether the arbitrator may mediate a contract dispute. The AAA eventually modified its rules to allow an arbitrator to function either judicially or as a mediator in aiding the parties to resolve the dispute. Taylor continued to fight for his belief in the continuous process of collective bargaining with accommodative procedures at every step in his various speeches before the National Academy of Arbitrators, although many arbitrators tended to view his concepts as becoming old-fashioned and increasingly saw them as glorious but tattered remnants of the War Labor Board. Taylor insisted the arbitrator's role was an accommodative one, because the meeting of minds was the goal. The arbitrator should function as a mediator if the parties so desired. However, if the parties wanted a judicial decision, the arbitrators should comply and play a judicial role. Taylor's model arbitrator was one who functioned informally, was able to put pressure on the parties to settle, and could devise an agreement.15 He was hostile to the role he saw played by many lawyers and economists, but "if they come into a proceeding to solve a problem instead of trying to win an argument, I find them helpful."16 Taylor hoped that arbitrators would play an educational role and would display leadership in the whole collective-bargaining process. He often cited the early pioneering arbitrators such as Harry Millis and William Leiserson. They were not only technically competent, but they provided "a clear vision about the constructive role which collective bargaining and arbitration can play in our own industrial civilization."17 The accommodative process was central to Taylor's procedures. He 15. "Effectuating the Labor Contract Through Arbitration," address before the Second Annual Meeting of The National Academy of Arbitrators (Washington, 14 January 1949, reprinted in Jean T. McKelvey, The Profession of Lahor Arbitration, Selected Papers . . . National Academy of Arbitrators (Washington: BNA Inc., 1957). 16. "Criteria in the Wage Bargain," Emanuel Stein, Proceedings of New York University First Annual Conference on Labor (New York: Matthew Bender & Co., 1948), p. 87. 17. "The Arbitration Idea," Sidney Hillman Memorial Lecture, University of Wisconsin, Madison, 13 December 1954, p. 2.

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and Mediation

strongly resisted what he considered a legalistic trend in collective bargaining and deplored the movement toward more government regulation that continued the process of greater controls over the details of scope, procedures, and substance of collective bargaining. Taylor wanted arbitration to fit into the continuous process of collective bargaining and to function as an accommodative process, and he wanted the parties to determine their own bargaining procedures and to live with the results of their "mutual agreement."

Mediation George Taylor was the mediator supreme, whether chairman of the Full-Fashioned Hosiery Industry, umpire at General Motors, or member of the War Labor Board, the tripartite committees of the 1950s and sixties, or the New York Taylor Commission. Under a variety of tides and roles he remained the ultimate mediator seeking the meeting of minds. He insisted that the neutral must help disputants reach a settlement in terms of the parties themselves; the settlement was for the parties, not the mediator. Again, the meeting of minds concept was paramount. Mediation was of central importance and was much more exciting than arbitration and "far more fundamental." He asked that mediation be subject to more scholarship and research. 18 Surprisingly, Taylor rarely wrote about mediation. Often when he discussed mediation publicly he was describing the processes and concepts involved with the meeting of minds, mutual agreement, and accommodation. In fact, in the Illinois address during which he asked that mediation be subject to more scholarship and acclaimed its central importance, he cited examples in the railroad, meatpacking, and steel industries. He was, in effect, actually discussing the use of tripartite boards in private mediation, not mediation conventionally viewed as a governmental process related to ad-hoc negotiations. In the late 1930s, he wrote an excellent summary analyzing the national labor policy and pointing toward future developments that were quite accurate in most respects, but he devoted a mere two sentences to mediation. "Provisions must be made so that facts and assistance are available to enable the contracting parties to develop collec18. "Freedom and Responsibility in Collective Bargaining," adapted from address "Freedom and Responsibility in Labor Relations" at the dedication of the new building of The Institute of Labor and Industrial Relations, Champaign, 111., 29 November 1962. Reprinted in the Quarterly Review of Economics and Business, Bureau of Economic and Business Research, University of Illinois, p. 25.

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tive bargaining as an economic process. A far reaching and carefully developed system of mediation and arbitration services must be readily available should the parties choose to use them."19 This statement reflected his role as chairman and related mediation to his concept of collective bargaining as a continuous process. The chairman was to mediate at each step of collective bargaining: negotiations and contract administration. It also shows the influence of his early role in hosiery and the needle trades in which the chairman provided the research, facts, statistics, and other substantive information to the parties' negotiations. Mediation was not just helping the parties talk their way into an agreement; a mediator also was a technician who supplied them with materials to build the bridges of meeting of minds. Taylor respected Leiserson and often cited him as an important influence in dispute settlement, but he deemed Leiserson's views on mediation too cautious. Although Leiserson emphasized the conciliation aspects more than Taylor did, Leiserson also advocated that the mediator take charge and that mediation be conducted actively.20 Taylor differed in that he pressed for the mediator to participate as a supplier of facts, information, and materials for bargaining. Further, the mediator had to take an active role in recommending solutions to parties.21 He occasionally spoke to the staff of the Federal Mediation and Conciliation Service (FMCS). 2 2 In those talks, he generally ranged over topics of national importance: the problems of controls during wartime, efforts to establish guidelines to slow the inflationary trend, problems of the public sector, experiments by industries to develop their own private dispute-settlement procedures, especially those for dealing with the solution of internal grievances. He rarely focused on the type of dispute handled by government mediators in the federal or state services. In spite of being the supreme mediator, he rarely discussed mediation techniques. The most telling indication of this may be found in the best book on labor mediation, written by Taylor's first and foremost protege.23 Simkin was very much influenced by Taylor and more than any other person reflected his thinking about mediation. The Simkin 19. Atlantic Monthly 38 ( 1 9 3 8 ) : 343. 20. William M. Leiserson, "The Function of Mediation in Labor Relations," presidential address, Industrial Relations Research Association Proceedings, 1951, pp. 2-12. 21. E.g., Government Regulation, pp. 102, 363; "Role of Mediation," pp. 15-16; Evening Bulletin, 3 January 1949. 22. E.g., "Role of Mediation." 23. William E. Simkin, Mediation and the Dynamics of Collective Bargaining (Washington: Bureau of National Affairs, 1971).

Accommodation and Mediation book contains very little that directly presents Taylor's thoughts as gleaned from speeches, papers, lectures, or even informal comments on mediation and reflects the paucity of Taylor's writing on the mediation process. This scarcity is in marked contrast to the flood of articles that Taylor provided on the arbitration process. When Taylor headed the Wage Stabilization Board ( W S B ) during the Korean War, he offered advice to the regional directors of the FMCS. In discussing mediation techniques, he said, "You must have each party feel convinced that you understand what his position is." He was clear that this convincing process was not the same as simply understanding the party's position. In addition, the mediator must "raise doubts in people's minds about the position they have been holding to with firmness and rigidity." The mediator must get the parties to recede from positions, but he must have a factual basis for developing the doubts. Finally, the mediator must develop the art of proposing new solutions. He must develop a concept of acceptance of alternate solutions.24 Interestingly, the bulk of Taylor's talk to the regional directors was on problems then facing the WSB. There was little else on mediation as practiced by the FMCS staff. Taylor considered mediation of central importance in labor and industrial relations. In its broadest application, mediation constituted a major route for gaining a primacy of reason and a voluntary assumption of responsibility. Much more exacting than arbitration, and far more fundamental, mediation "should be subject to more study." But again Taylor illustrated this statement with examples not directly related to agency staff mediators but from the 1960s private-sector experience when mediation was used in a private nongovernmental agency function—for example, the Kaiser project.25 In order to propose alternate solutions, a mediator must make value judgments about the issues in controversy. This is an obvious danger point for the mediator. When the parties complain about mediators interfering, it is often when the mediators are most imaginative in developing solutions.26 When Taylor pressed for wider use of private mediation, he was clearly advocating "the kind of mediation . . . [in which] terms of settlement may be proposed by a 'third party.'" 27 The failure of mediators to recommend was an impediment in the mediation process.28 24. "Role of Mediation," pp. 15-16. 25. "Freedom and Responsibility," p. 25. 26. "Role of Mediation," p. 16. 27. Government Regulation, p. 363. 28. "The Adequacy of Taft-Hartley in Public Emergency Disputes," Annals of the American Academy of Political and Social Sciences (January 1961) : 84.

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It was the mediator's function to interject ideas about what should constitute a fair and acceptable solution. A mediator may offer judgments on the contending positions of the parties. "Mediation can thus affect the bargaining position of the parties."29 The mediator must induce parties to "modify strongly held positions in his own self interest. There is no other way of securing the essential agreement." 30 Taylor saw mediation as an active dynamic process. He was scornful of those who assumed it was the mediator's role simply to get the parties together. Although he advocated that the mediation function was dependent essentially on the willingness of the parties to accept mediation and little could be done if the parties refuse to be mediated, he insisted that "even a casual reading of the Taft-Hartley Act will show an intent to depend upon mediation as a cornerstone of a national labor policy." He pointed out that "one can scarcely deny a positive public interest in negotiations," if failure resulted in a public emergency. "Prevention rather than intervention could be a worthy goal."31 Taylor's interest in mediation encompassed a role of concern and advice to various mediation agencies. He regarded with reservation the old U.S. Conciliation Service. During World War II the mediation functions were handled by the War Labor Board and various state mediation agencies with a higher degree of recognized professionalism than was accorded the Conciliation Service. Suffice to note there were many competent staff members in the Conciliation Service, but with the WLB as an available next step, the mediation agencies had a difficult time.32 One of the more positive aspects of the Taft-Hartley Act was the reform of the Conciliation Service into the Federal Mediation and Conciliation Service. This was an effort to upgrade and professionalize mediators in order to provide a more acceptable service to the parties. One of the shortcomings of the Conciliation Service, as Taylor saw it, was its inability to deal with the more technical aspects of collective bargaining. Taylors role in the hosiery industry and other chairmanships included a major component of information gathering. Statistics were to be used to aid the parties in bargaining, and the chairman also aided the parties in developing their own criteria for wage determination and the resolution of other issues.33 The notion of the mediator as 29. Government Regulation, p. 102. 30. "Freedom and Responsibility," p. 25. 31. "Collective Bargaining: New Approaches to the Problem of Achieving Agreement," Industrial Relations Conference, University of Michigan, 30 March 1961, p. 3. 32. Simkin letter. 33. E.g., Underwear and Hosiery Review (December 1930): 145.

Accommodation and Mediation research consultant was apparent in his hosiery chairmanship and persisted through the early Taft-Hartley period into the end of his career. 34 When the FMCS was organized in 1947, it included a technical section. Mediators with skills in job evaluation and other technical skills became a special part of the service. In the long run, this did not prove to be a highly useful degree of specialization. There was a difference between governmental mediators who leap into a wide variety of crisis disputes with scant notice or preparation and the contrasting private tripartite mediation which was more easily structured with continuity and staff to develop technical information over a peaceful period of time. Taylor's criticism of the inadequacies of the Conciliation Service was guarded but pointed. Although he could privately disparage the early FMCS, his public statements were usually oblique. For example, the Service "has not been accepted to the extent it should be." 35 In the 1940s and early fifties when the more competent state agencies were involved in jurisdictional disputes with the FMCS, some state mediators viewed Taylor as an ally simply because he recognized the professional competency of a few state agencies, such as those of New York, New Jersey, Michigan, and Wisconsin. At the same time, he could express reservations about the professional limitations of the federal service. As a matter of fact, Taylor could suggest that neither the federal nor the state agencies were achieving their full potential, and he could compare them unfavorably with the experiments in private mediation that were taking place in industry.36 The model mediation agency for Taylor was the private experiment, such as existed at Kaiser Steel (see chapter 8 ) , Armour, and others. After World War II, Taylor had fully developed his concept of voluntary mediation, structured within the procedures of a large bargaining unit and utilizing its tripartite committee to develop accommodation at every level of the relationship.37 He foresaw the various joint committees and human relations councils that emerged in the 1950s and continue to find acceptance decades later. The roles of governmental mediation agencies were too narrowly conceived, and the quality of the staff mediators was less than the quality of the chairmen of the private mediation committees. He urged that the mediation service did not "have to be merely traffic cops as respects labor disputes. You can be the intellectual leaders in the field."38 There is no 34. 35. 36. 37. 38.

E.g., Evening Bulletin, 3 January 1949. "Role of Mediation," p. 12. "Developing Maturity," Pittsburgh, 10 October 1956, p. 8. Government Regulation, pp. 362-64. "Role of Mediation," p. 20.

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indication that Taylor saw governmental mediators as a group in terms of being leaders in labor and management relations. He had some reservations about preventive mediation as practiced by the government. He preferred that preventive-mediation procedures be developed by the parties themselves.39 When his colleague and friend Bill Simkin became director of the FMCS, Taylor told some state mediation agencies that jurisdictional problems between the agencies would be lessened. He expressed the hope that the work load would not be so heavy as to prevent Simkin from experimenting with new dispute-settlement techniques and procedures, and further hoped there would be an adaptation of some of the private mediation experiments within the federal service. Although he had reservations about preventive mediation, he advocated mediators assisting the parties in developing their own procedures that would lessen dependence on mediation and would at the same time improve their day-to-day relationships. At least one mediator present intrepreted the remarks to mean that the governmental mediators should help the parties develop their own mediation procedures in the form of tripartite committees and that the ongoing committee functions should be conducted privately without recourse to direct agency support—in other words, that the federal or state mediator would help the parties develop a human relations committee, but the committee would be chaired by a private mediator. Simkin, on the other hand, recalls that Taylor gave a good deal of encouragement to some of the stronger aspects of preventive mediation as practiced by FMCS. 40 Taylor was pleased with Simkin's tenure at FMCS. Even though the agency was more to his liking and more responsive to his thinking, there is no record that indicated a modification of his reservations about governmental mediation, necessary though it may be. His true affection went to private tripartite dispute settlement regardless of its guise. Although Taylor wrote very little on the function and techniques of mediation, his love of mediation and his genius in its use were communicated to his students and to those who worked with him on various tripartite boards. It is apparent at any gathering of Taylor students or colleagues as their shoptalk is often dominated by adventures in mediating disputes, whether as staff mediators, private mediators, arbitrators, or practitioners for the parties. 3 9 . " C o l l e c t i v e B a r g a i n i n g : N e w A p p r o a c h e s , " p. 3. 4 0 . Simkin letter.

Accommodation and Mediation Taylor's views on accommodation and mediation, in common with all his thinking, were dominated by his concepts of the "meeting of minds" and "mutual agreement." He saw mediation more from the position of an industry chairman than from that of a staff mediator. The notion that dispute settlement was primarily a private function and the concept of mediation as part of the continuous process of collective bargaining were manifestations of his role as chairman and were grounded in his belief in free collective bargaining.

5 Regulation and Public Policy: Government Encouragement of Collective Bargaining EDWARD

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George Taylor's early life thrust him face to face with industrial problems in the manufacturing context. Growing up in a hosiery and textile environment—"Fishtown" in Philadelphia's Kensington section—he was able to witness the inability of hosiery and textile workers to maintain a decent level of living without the opportunities for the bargaining power now possible under legalized collective bargaining statutes. Taylor lived through a period of layoffs, strikes, labor unrest, and the impossibility of settling individual grievances without "wildcat" strike action. These early involvements not only directed his interest in industrial relations, but also made him seek out postgraduate studies in industrial research at the Wharton School. There his work won him some renown even before the passage of the National Industrial Recovery Act, the Wagner Act, and subsequent labor legislation. His Ph.D. dissertation was in the field of hosiery economics, and while still a very young man, between 1929 and 1940, Dr. Taylor helped settle some 1,400 labor controversies as impartial chairman for Greater Philadelphia in the hosiery, clothing, dress, and textile industries. Involved were 300 employers and about 100,000 workers covered by labor-management contracts. Taylor helped formulate a new "common law" in the field of voluntary arbitration during this same period. Under those agreements, which he chaired, strikes and lockouts were virtually eliminated during the period of the contract, since the parties agreed to submit their differences to him for arbitration. His arbitration

EDWARD Β .

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stance was a composite of mediation and arbitration as he developed the role of "impartial chairman" as compared to the ad-hoc arbitrator. Without resort to costly court action, disputes could now be settled both reasonably and informally. Industrial justice became quickly expedited, and labor-management leaders began to study the consistency of his arbitration decision. Taylor provided a new rationalization in labor-management relations based on the use of facts and logic as well as a due-process approach which permitted genuine collective bargaining rather than, as he once said, "collective arguing." As noted in earlier chapters of this work, Taylor's earliest major impact on the American labor relations scene was his singular contribution in the field of grievance arbitration. In 1941 he was appointed impartial chairman in the General Motors-UAW contract, thus extending his leadership to one of America's basic industries. As a result of his influence on labor relations in the period 1929-40, aided and abetted by the general inclusion of grievance arbitration in contracts negotiated under the context of the National Industrial Recovery Act and later the Wagner Act, today more than ninety percent of all labor agreements provide impartial and binding arbitration as the final step of the grievance procedure. Yes, Dr. Taylor became known as the nation's number one arbitrator but in a sense he helped weave the total context in which arbitration evolved. He was an important influence in helping to secure the passage of the NIRA and the Wagner Act. Taylor's style became national when in 1929 he was able to insert grievance arbitration clauses in hosiery's national agreement. This adoption came prior to the enactment of the NIRA and the Wagner Act. The passage of those two acts did help extend arbitration to other national industries. In his personal notes, Taylor indicated that he was able to get the support from the national hosiery union in 1929 for the adoption of no-strike and impartial chairmanship clauses to enable the union to concentrate on the organization of nonunion full-fashion hosiery plants in both the North and South. Taylor's ingenuity in extending the role of permanent ad-hoc arbitrators to become impartial chairmen put him on the national scene. In 1933 he became very active in the preparation of the national hosiery code under the National Industrial Recovery Act. The experience gained in the brief life of the NIRA made him one of the soughtafter academicians. Taylor's early support from the Textile Workers Union, the International Ladies Garment Workers Union and the Amalgamated Clothing Workers of America gave him the necessary stature with union

Government Encouragement

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Bargaining

leaders to have clout with important employers and with government leaders. He believed ardently in national collective bargaining and in the facilitation of the right of employees to organize for collective bargaining. He saw it as essential that employees exercise their organizational rights through collective bargaining. He believed that once workers had organized and management had sat down with union representatives around the conference table, the government had no further function to perform—that the parties were "all on their own."1 Current students see the Wagner Act, which Congress enacted and approved as the National Labor Relations Act in 1935 following the demise of the NIRA, as the cornerstone of a government policy to encourage joint dealing between organized labor and management; nevertheless, there had been earlier experiences of a similar nature. Constructive labor policies agreed to by labor and industry had facilitated industrial relations during World War I.2 There also had been other attempts on the part of the government to balance rights under collective bargaining, to equalize opportunities by employees, and to exert bargaining pressure on employers for fair collective bargaining despite the existence of the Sherman Act and the practice of "yellow-dog" contracts. The yellow-dog contract was an agreement solicited by the new employer to be signed by the new employee stating that he would not join a union. Taylor had noted the inequality of bargaining power based on interpretation of the Sherman Act of 1890. The intent of the amended Sherman Act (Clayton Act of 1914) was to eliminate unions as targets for combination in restraint of trade suits. Taylor served as an arbitrator and mediator in the famous Philadelphia Apex Hosiery Mill case in the early 1930s. In this case, the Sherman Act was employed by Apex against union organization, and Apex won an initial award in the federal courts of more than $700,000, later reduced to $150,000. The damages served to remind Taylor of the power and exercise of the Sherman Act against the organizing power of the labor unions. In other cases, the federal courts permitted the antitrust statutes to 1. George W. Taylor, Government Regulation of Industrial Relations (New York: Prentice-Hall, Inc., 1948), p. 34. 2. The War Labor Board of World War I did not start to function until certain principles to govern its operations had been worked out by labor and management. The major point agreed on in 1918 was that the prior status of the union in any plant would be maintained during the war unless a contrary agreement was entered into by the parties. Labor assented to this principle in 1918 in return for management's assurance that employers would not interfere with the organization of employees and would collectively bargain with chosen union representatives.

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be applied against the organizing drives of unions, despite the obvious prohibition contained in the Clayton Act of 1914. It took a great combination of legislative liberals—Norris in the Senate and La Guardia in the House—to enact the Norris-La Guardia Act of 1932, which, in perfect timing with the depth of the Great Depression, virtually precluded the issuance of injunctions against the organizing efforts of unions and also succeeded in outlawing yellow-dog contracts.

Pre-Wagner-Act Government Labor-Management Policies A most positive act, however, which imposed by law an obligation upon employers to deal collectively with their employees, was the short-lived National Industrial Recovery Act in 1933.3 Taylor was an active researcher and advisor to government in the passage of this act, the first important "New Deal" law. Particularly effective in spelling out labor's right to organize without management interference, he also helped the development of a code of standard, uniform prices for the national hosiery industry to eliminate cutthroat competition structured through the NIRA to help bring the nation out of the Great Depression. The act, better known through its short title, NRA, although declared unconstitutional in May 1935 within two years of its passage, succeeded in establishing pricing codes for all industries and covered twenty million workers under its basic wage minimums ranging in general from 30 to 40 cents per hour. In industries employing fifty-five percent of all NRA-covered employees, the hourly minimum was 40 cents. Herbert R. Northrup stated that "although the NRA was shortlived, it did result in a significant increase in wage and hour standards. In addition, it provided valuable experience for the administration of later legislation."4 By 1933 Taylor had become an important advisor in the Roosevelt administration. As a witness to the disastrous competition in the hosiery industry and the apparel and textile industry, he was philosophically prepared to support emergency legislation that would lead the country out of its economic doldrums. In addition, he longed for a more con3. The Railway Labor Act of 1926 was the first federal law to guarantee to employees the right to organize and bargain collectively through representatives of their own choosing without interference by employers; however, this was restricted to railroad employees initially and in the thirties was amended to cover airline employees also. 4. Bloom & Northrup, Economics of Labor Relations, 5th Ed. (Homewood, 111.: Irwin, 1 9 6 5 ) , p. 549.

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crete expression of the implications of the Clayton and Norris-La Guardia acts that moved toward the rights of employees to organize and bargain collectively. He saw in the 1930s what he described in retrospect as the "pre-Wagner Act" policy. In the fifties after the passage of the Taft-Hartley Act (1947), Professor Taylor, in a scholarly fashion, reviewed government attitudes towards collective bargaining and categorized these attitudes in three classifications: pre-Wagner Act policy, Wagner Act policy, and TaftHartley Act policy. The pre-Wagner Act policy he believed to be in existence even before the NIRA was declared unconstitutional. Prior to passage of the Wagner Act, employees had a right to form a union and then to call upon their employer to engage in collective bargaining. The employer was free to oppose such endeavors. He could penalize any worker who joined a union and could also refuse to engage in collective bargaining with any union that was nevertheless formed. Some methods of employer opposition were outlawed even prior to the passage of the Wagner Act, notably the so-called "yellow dog contract" and certain uses of the labor injunction. The strike was the sole means available to employees to oppose the discharge of, or discrimination against, union members or to obtain union recognition denied by an employer. Industrial relations issues arising over the attempts of employees to organize unions and to secure collective bargaining were thus determinable, in the last analysis, by a test of economic power. 5 Despite his interest and insistence in a governmental structure for collective bargaining throughout his life, Taylor was a consistent advocate of free collective bargaining in which the parties would assume maximum responsibility for settling their own problems without running to the government. The National Industrial Recovery Act, 48 Stat. 195 (1933), was the Roosevelt administration's main effort to whip the Depression. It provided for federal control of the entire industrial structure of the country through the mechanism of codes of fair competition, industry agreements, and governmental supervision (the Blue Eagle and General Hugh Johnson) plus a program of public works.® The purpose was the increase of production, consumption, purchasing power, and employment. Sets of labor standards, with minimum and maximum hours of work, formed were an important part of each code; the act 5. "National Labor Policy," Annals of the American Academy of Political and Social Science 274 (March 1951): 185-94. 6. Ο. N. Phelps, Introduction to Labor Economics (New York: McGraw Hill, 1950), p. 316.

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also included the famous Sec. 7a, which was later reproduced in the Wagner Act: (1) That employees shall have the right to organize and bargain collectively through representatives of their own choosing, and shall be free from the interference, restraint, or coercion of employers of labor, or their agents, in the designation of such representatives or in self-organization or in other concerted activities for the purpose of collective bargaining or other mutual aid or protection; (2) that no employee and no one seeking employment shall be required, as a condition of employment, to join any company union or to refrain from joining, organizing, or assisting a labor organization of his own choosing. It was soon apparent that employers were interfering with their employees' rights of self-organization and selection of bargaining representatives. The NRA administrators favored collective bargaining, even to the point of withholding the Blue Eagle in its absence. Since many employers found themselves without a union to bargain with, they organized their own. The NRA turned loose on the country a flood of "employee representation plans," most of which were in effect company unions with little or no independence and less bargaining power. There were a lot of squawks over this and other violations of the guarantee in Sec. 7a, so two successive boards were set up to handle disputes and say what was and what was not "interference, restraint, or coercion" by employers.7 NATIONAL LABOR BOARD UNDER T H E NRA

The first was the National Labor Board, an unpaid part-time public body, organized on the traditional basis of three-way representation: three public members, two industry members, and two labor members. It had no genuine direction, no clear idea of what to do, no power to enforce its decisions, and, like the Railway Labor Board of ten years earlier (which it somewhat resembled), it did not last. Several hardboiled executives in the steel and metal fabrication industries took exception to it, told it off, and it folded. However, in the eleven months of its existence, it did much work—handling 3,532 cases involving 1.8 million employees, holding 183 employee representation elections, and so on—and began the difficult process of defining and classifying the unfair labor practices of employers. 7. Ibid.

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NATIONAL L A B O R R E L A T I O N S BOARD UNDER NRA

This work of definition and administration was continued by the National Labor Board's successor, the first National Labor Relations Board, appointed 29 June 1934 by President Roosevelt under the authority of Public Resolution 44 of the Seventy-third Congress. Quite different from its predecessor, the NLRB had only three members, all of them impartial, full-time, salaried employees of the government. The board had the power to subpoena witnesses, hold elections, and enforce its orders through the federal district court.8 It also lasted eleven months, until 27 May 1935, when the entire NRA statute was held unconstitutional in Schechter Poultry Corporation v. United Statesand did a lot of work (9,364 cases involving 2,154,000 workers; 154 representation elections, and so on). Its principal contribution was to find out what the main types of employer interference consisted of and what powers an administrative labor board needed to put a stop to them. The first NLRB operating with the NIRA provided the basis for the Wagner Act, which took the place of Sec. 7a after the NIRA was declared unconstitutional.10 According to Taylor, the pre-Wagner Act period was one in which the basic government attitude was "official unconcern" as to whether or not collective bargaining would become established. The government role was that of a referee to see that law and order were preserved in whatever test of economic strength was undertaken. Taylor suggested in his own review that as a practical matter, the attitude of the government and the courts prior to the Wagner Act evidenced a preference for individual bargaining and an opposition to collective bargaining.11 On the whole, collective bargaining in the basic industries did not work at all. At times unions were formed during the upswing in the business cycle when strikes were too costly to employers, but most of the union organization success disintegrated on the downswing when the threat of business displacements made strikes risky for workers. Taylor believed that the pre-Wagner Act indifference of the government was very unsatisfactory. Since, with the exception of a short period under the NRA, there was no legitimate way to vote in a union, organization strikes and strikes for union recognition were extensively undertaken and were often very violent. While the government favored 8. Ibid., p. 317. 9. 295 U.S. 495. 10. Phelps, Introduction to Labor Economics, p. 317. 11. "National Labor Policy," p. 2.

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signing up employees individually, this was not practical, as these employees could be singled out for disciplinary or discriminatory action by the employer. The unions knew this and favored total strike to get all the workers to join the union together, so that the organizational strike which characterized the pre-Wagner Act period served to protect the individual worker from employer countermeasures. Taylor was sensitive to the economic insecurity of the individual worker and was one of the earliest economists to believe that the worker has a so-called property right in his job. This theory has often been assailed by employers who like to engineer technological changes unilaterally. Employers develop stress when workers and unions grieve over changes in work standards and methods they claim will affect earnings and employment adversely. Employers counter with demands for the insertion of "the management prerogative" clauses in most contracts and assert that unions must not tinker with "traditional management rights." (For an enlightened discussion of property rights theory see William Gomberg's stimulating discussion.12) Taylor also believed that it was in the public interest that "a democratic principle of equality of citizenship within an industry be more generally accepted." On 23 March 1940, in an unpublished address at a conference sponsored by the Amalgamated Clothing Workers of America in New York, he stated: "The political equality of all people in the United States has long been recognized as essential, although you will recall that even this idea once had vigorous opponents . . . while defending property rights, as in the wave of public disapproval over sit-down strikes, society has come to recognize certain workers' rights as 'self-evident' and essential to citizens of democracy." Taylor's philosophy visualized the employer's interest as requiring protection of ownership rights in the investment and the right to reasonable profits to be earned. As a corollary, he saw employee interest in this relationship to include to the fullest possible extent rights to private and profitable useful employment, to an adequate standard of living and of job security. He saw the so-called "freedom of the employee as an individual workman" as an illusion and held that individual bargaining would mean, almost universally, the complete determination of terms of employment by the employer. To quote further from his speech before the Amalgamated Clothing Workers in 1940: "I do not wish to imply that such terms are always oppressive to 'individual workers, for many employers seek to set fair 12. William Gomberg, "Featherbedding: An Assertion of Property Rights." Annals of the American Academy of Political and Social Science 333 (January 1 9 6 1 ) : 119-29.

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conditions of work. But, I do emphasize that the employees have no voice in appraising this fact. Their choice is limited to accept or reject the terms offered." Obviously, according to Taylor, if the alternative is no work at all, the terms offered will generally be accepted. This labor statesman saw collective bargaining as having a designated purpose to provide an active representation of employee interest in the determination of the contract with labor. All through his life, he saw genuine collective bargaining as a device by which democracy could be extended from the political to the industrial field. When Taylor was espousing as an active protagonist both the NIRA and the Wagner Act, he visualized his mission as a kind of frontier of social problems to be conquered. He wanted to see collective bargaining work to protect both the employee and the employer interest as well as that of the public. He felt that conflict rather than setting a context for industrial democracy was an easy way out, since once "the battle has ceased, the task of cooperation must still be faced." Taylor also questioned the use of the term "collective bargaining" for what took place after the organization and representation issues had been resolved. He saw the term implying that by astuteness or cleverness one party could get the better of the other. In 1940 Taylor suggested the term "collective negotiations" as a more precise description to imply joint participation of the parties directly interested and the adjustment of issues on the basis of merit without infringing on fundamental needs and requirements of either party to survive. Throughout his life Taylor favored emphasizing the concept "the public interest." In recent years the public interest connotation came from his role as the author of the Taylor law in New York State, governing the bargaining conduct of public employees. In the earlier years, about 1940, Taylor would have defined the public interest as translating the principles of political democracy into the operations and activities of industrial democracy, thus creating satisfaction for the employers, workers, and consuming public. He saw in the coming Wagner Act a vehicle for substituting the ballot for the organization strike.

Wagner Act Policy

1935-46

Taylor had his wish with a passage of the (Wagner) National Labor Relations Act in 1935. As a result of the previously mentioned Schechter decision, which outlawed the NIRA, the first National Labor Relations

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Board was terminated. Under the Wagner Act, Congress reconstituted Section 7a. of the NIRA, expanding it and providing administrative machinery to make it stick; replacing the former National Labor Relations Board with the new National Labor Relations Board ( N L R B ) under the Wagner Act. During twelve years of aggressive administration, enthusiastic support, virulent criticism, and violent controversy, the law stood without the dotting of an "i" or the crossing of a "t," until the Taft-Hartley Act of 1947 absorbed it in modified form. During those twelve years, tradeunion membership grew from 4.4 million to 15.6 million, and the principles of self-organization and collective bargaining were solidly embedded in the American way of life and in the United States legal code. The Wagner Act became labor's Magna Carta, and Franklin Delano Roosevelt was referred to as trade unionism's King John. The Wagner Act was simple, clear, explicit. It set up a board of three with full power to administer and enforce the law; it forbade five employer unfair practices, and it outlined a method of giving official approval to employ bargaining representatives (unions). ( 1 ) The board was the National Labor Relations Board ( N L R B ) . It had power to subpoena witnesses and compel the submission of documents, to administer oaths, to enter upon employers' premises, to investigate, hold hearings and elections, and make awards. It could issue cease-and-desist orders, require constructive action, like rehiring and the payment of back wages to unjustly discharged workmen, and go directly to the circuit courts of appeal for enforcement of its orders. ( 2 ) The five unfair labor practices of employers were: ( a ) any interference with the employees' rights of self-organization and collective bargaining, ( b ) establishment of a company-dominated union, ( c ) antiunion discrimination in hiring, firing, or job assignment, ( d ) discrimination against an employee who files charges or gives testimony under the act, and ( e ) refusal to bargain collectively. ( 3 ) If a union claimed the right to represent some employees, the board was to define the "appropriate bargaining unit" and then satisfy itself that a majority of the employees in the unit (or voting, if an election were held) wanted the union as their representative. If they did, the board was to "certify" the union, and the employer was required by law to recognize and bargain with it. Employers reacted negatively to the Wagner Act, as might have been expected. They had never liked Section 7a. or the boards that administered it, and when the new NLRB began to interpret the unfair labor practices, there was widespread refusal to comply with its orders. The rebellion was supported by legal opinion; a number of lawyers,

Government Encouragement of Collective Bargaining especially those on the payroll of major corporations, indicated that they thought the law unconstitutional and advised their clients to disregard it. Many clients did as advised, some of them to their ultimate cost, when the surprising Jones and Laughlin decision was rendered in the spring of 1937 confirming the constitutionality of the Wagner Act. Since the NLRB and the trade unions were both busy, the former investigating and issuing orders and the latter organizing as aggressively as possible in reliance upon the new statute, the period 1935-37 turned out to be rather chaotic. Taylor noted four value judgments expressed in the Wagner Act that fashioned the basic collective-bargaining policy of the United States: (1) Prior to the Wagner Act, the securing of organization and union recognition rights by employees was generally dependent upon possession of enough economic power to win a strike. Under the Wagner Act, this was changed, and employees were assured those rights as a matter of law. To minimize organizational strikes, the government stood ready to conduct elections at which the employees could designate their preference for "no union," or some specific union could then be selected by a majority of the employees in a designated bargaining unit and then be certified by the government. The employer would then be required to engage in collective bargaining with the certified union. It should be noted that organization and recognition strikes were not outlawed but that elections and NLRB proceedings, while an alternate procedure, were more logical and less costly to both union and employees than the strike or lockout. Taylor was delighted with that section of the Wagner Act which met his philosophical value judgment, namely, that representation elections were better than organization strikes. At that time Taylor did not differ with the employer position that the Wagner Act was deliberately one-sided. He excused it as the "quid" for the "quo" of eliminating certain union organizing tactics. He believed that temporarily it was logical to be deliberately one-sided as a balance to "the outlawry" of unfair labor practices formerly used by employers to deter organization. Taylor later showed his opposition to the Taft-Hartley Act, which he claimed went too far in "regulating collective bargaining" on the mistaken assumption that this would eliminate the one-sidedness of the Wagner Act policy. At the time of its passage, he was quiet when it came to a review of what could have been described as "unfair labor practices by the union." In the forties he agreed with critics of the Taft-Hartley that the act was somewhat punitive with respect to labor unions. On the other hand, in the early thirties he believed vigorously that collective bargaining as advocated

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by the Wagner Act would be a "good thing" for the country, even though the act appeared to be somewhat deliberately pro-union. ( 2 ) Taylor saw the government deliberately strengthen union power but expected no serious problems in the use of this enhanced power or the relationships between the individual employees and their union. Perhaps he did not see the exercises of power and the corruption of leadership that ultimately brought on the punitive provisions of Taft-Hartley in 1947 and the passage to the LandrumGriffin Act in 1959. Taylor's sympathy ever since his boyhood in "Fishtown's" hosiery mills had been with the blue-collar worker. He saw the Wagner Act as an approval of "free" unionism, namely, that unions could be left alone to develop their own policies and to run their internal affairs. Moreover, he envisioned government assisting the development of free unionism. He was so idealistic that, although he realized there could be many shortcomings in the practice of unionism, he believed that free unionism would lead toward a more nearly perfect political democracy. ( 3 ) He saw the type of collective bargaining conceived by the framers of the Wagner Act as a sort of self-effectuating process. It was to be expected that the government could and did step entirely out of the industrial relations picture after it had brought union and management representatives together for negotiations. To these parties of direct interest was assigned the full responsibility for hammering out and agreeing to all their own arrangements. He perceived the Wagner Act as embracing a system for "industrial self-government" in which the terms of employment would be fashioned in one way—by agreement between the union and the management. The deterrent to nonagreement and to 'give and take' would be a desire to avoid or to terminate a work stoppage." A practical idealist, he warned his students always that the successful use of collective bargaining was dependent upon union and the management voluntarily giving reasonable weight to the broad public interest. Consumers would be affected by a lack of continuous production or by the actual terms of employment that might drive up costs beyond the just or equitable level. A general "ganging up on the consumer" would be incompatible with the development of collective bargaining as a socially desirable institution.13 Taylor's concern for the public interest put him thirty years ahead of his time. 13. "National Labor Policy," p. 187.

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( 4 ) Although he realized that the Wagner Act was dealing with longstanding and critical issues, he also saw that a relatively limited area of industrial relations was made subject to government regulations. Whereas the act provided rules applicable to the organization of unions for collective bargaining, no regulations were promulgated that applied directly to the collective-bargaining process itself; only the precollective-bargaining aspects of union-management relationships were legislatively dealt with. The one possible exception was in Section 8 ( 5 ) of the Wagner Act, which made it an unfair labor practice for employers—and only the employers—to refuse to bargain in good faith. Taylor saw Section 8 ( 5 ) as only facilitating compression of union recognition in initial collective bargaining. At the time Taylor was not certain whether the mission of regulation beyond the pre-collective bargaining aspects was good or bad; however, he did describe the limited area of government regulation under the Wagner Act as the most distinguishing characteristic of the national labor policy at that time. In 1951 Taylor reviewed the major differences between national labor policy during the Wagner Act period with that of the TaftHartley period of 1947-51. He concluded somewhat ruefully that the Taft-Hartley Act did not extend government regulation beyond organization for collective bargaining and through the actual conduct of negotiations as well as through the designation of employment terms. In the years immediately following the passage of the Taft-Hartley Act, he saw these differences as threatening to the status of free collective bargaining. 14

The Taft-Hartley Act The Labor Management Relations Act, 1947, was popularly known as the Taft-Hartley Act. It was originated in the House of Representatives and authored by Fred Hartley of New Jersey. It was repassed and became effective 23 June 1947, the date the Senate overrode President Truman's veto, the House having voted to override on the twentieth. In effect, Taft-Hartley was an act to amend the Wagner Act and to provide additional facilities for the mediation of labor disputes affecting commerce, to equalize legal responsibilities of labor organizations and employers, and for other purposes. The Taft-Hartley Act preamble is abstracted from the Wagner Act, 14. Ibid., pp. 189-91.

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namely, that the denial by employers of the right of employees to organize and the refusal of employers to bargain collectively causes strikes and other forms of industrial unrest that burden and obstruct commerce. The inequality of bargaining power between nonorganized employees and organized employers also burdens commerce by aggravating depressions, holding down wages, and reducing purchasing power. Experience proves that legal protection of employees' right to organize and bargain collectively promotes the flow of commerce by removing certain causes of industrial disputes, such as nonrecognition, while encouraging the friendly adjustment of disputes over wages, hours, and working conditions and by restoring the quality of bargaining power between employer and employees. However, added to this statement in the Taft-Hartley Act was a new thought which in a sense stated that experience has also shown that certain practices by labor organizations, their officers and members have the effect of burdening commerce through strikes and other forms of industrial unrest, and the elimination of such practices is necessary for the assurance of rights guaranteed in the act. Taft-Hartley was the answer to twelve years of demands for amendment of the "one-sided" Wagner Act, but it was also an attempt to summarize the federal labor policy in a single omnibus law, and to extend government regulations and many phases of labor-management relations previously left up to the parties themselves. During the passage of this law, every step in hearings, in committees, and on the floors of Congress was violently opposed by organized labor. After its passage, trade unionists unanimously agreed in labeling it the "slave labor law" and putting its appeal as item 1 in their political agenda. The fears expressed in 1948 have never come to pass. While it is good politics for Republicans to maintain that the Taft-Hartley Act should have even more regulations put into it, it is bad politics for the Democrats to suggest that the Taft-Hartley Act be wiped off the books, particularly with respect to the "right-to-work" laws. In 1947 President Truman had suggested to Congress proposals to outlaw jurisdictional strikes, extend the conciliation and mediation services of the Department of Labor, and establish a commission to study the causes of labor and management conflict. The Taft-Hartley Act is a very large and complex statute with many additions to the federal code for the regulation of labor regulations in the United States. It ( 1 ) modified the procedures and substance of union management dealings, ( 2 ) changed the basic policy of the Wagner Act, ( 3 ) reestablished the principle of a modified labor injunction as a tool of government regulation, ( 4 ) put the government in the

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business of regulating the internal affairs of the unions, (5) took the U.S. Conciliation Service out of the Department of Labor, where it had reposed for years, and (6) set up procedures for handling national emergency disputes. POLICY CHANGES F R O M WAGNER TO TAFT-HARTLEY

In addition to the right to organize and bargain collectively through representatives of their own choosing, the act gave employees the right to reject union membership and refrain from participation in union activities, except where an authorized union-shop agreement was in effect. Unions as well as management were found to be capable of burdening and obstructing the full flow of commerce by their bargaining strategies. The National Labor Relations Board was reorganized from three to five members, and its prosecuting and judicial functions were sharply separated, the former going to a semi-independent general counsel and the latter being retained by the board. Secret-ballot elections were required for all official certifications of union representatives and for settlement of union shop questions. Unions as well as employers were required to bargain in good faith. Collective bargaining was defined as meeting, conferring, and signing a written agreement if one was reached, plus a sixty-day notice before striking or locking out. Union practices such as "featherbedding," jurisdictional strikes, secondary boycotts and "hot goods" boycotts were prohibited, as were strikes to force employers to violate the law or bargain with an uncertified union in place of a certified labor organization. Strikes by federal employees were made unlawful. There was a whole series of limitations on the substance of unionmanagement agreements: 1. Closed-shop agreements were outlawed, and union-shop contracts were made accessible only to unions that could win a secret-ballot election by a majority of all the employees eligible to vote. 2. The involuntary checkoff of union dues was prohibited, and voluntary checkoffs organized by individual members could run for one year only. 3. Extensive limitations to the purpose of administration and audit of union trust funds to which management had contributed were placed. Those items of Taft-Hartley that regulated internal union affairs were as follows:

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1. Foremen's unions were not protected by the law, and unions of guards (plant protection employees) had to be entirely independent of other labor organizations. 2. Professional and craft workers were given support if they wanted to organize separately from other workmen. 3. Unions were required to make extensive annual reports containing general and financial information. Their officers were required to file annual affidavits that they were not communist and did not support the Communist party or any other subversive organization. 4. Union coercion of employees to join or take part in activities was made an unfair labor practice. 5. If the union closed its union-shop contract, charged excessive initiation fee, or put a member in bad standing for anything other than failure to pay his dues, it was guilty of an unfair labor practice. 6. Union political contributions or expenditures were forbidden. 7. The U.S. Conciliation Service of the Department of Labor was abolished. In its place was formed the Federal Mediation and Conciliation Service, an independent agency, responsible directly to Congress. A major innovation in the new Labor Management Act was the national emergency strike procedure, set up for handling threatened or actual strikes or lockouts that imperiled the national health or safety. It consisted of (1) a presidential fact-finding board, (2) an injunction stopping the strike, (3) a sixty-day period for the fact-finding board to report, (4) a secret ballot of the employees accepting the employees' last offer, (5) discharge of the injunction (total cooling-off period, eighty days), and (6) a presidential report to Congress. The unions claimed that Congress had brought back the dreaded labor injunction which had been outlawed by the Norris-La Guardia Act. The proponents of the new statute stated, however, that this was a labor injunction that was brought by government officials and not by the employer. Under this new provision, government officials were authorized to ask for injunctions (which in effect was an amendment of the NorrisLa Guardia Act) to delay strikes or lockouts, hold as unfair certain practices by either unions or management, and to restrain violation of the checkoff and trust fund regulations. Employers and labor organizations were held to be bound by the acts of their agents, and unions were made suable as entities rather than as collections of individuals; violations of collective agreements were specifically made suable as breaches of contract.

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Trust funds, checkoff violations, and political contributions contrary to law were made subject to criminal penalties. Striking employees in the federal government were made subject to immediate discharge, with loss of civil service status, and were ineligible for reemployment for three years. After the act was passed, union leaders declared that it was intended to produce, and would surely result in, the destruction of the labor movement. This has never happened and the labor movement is a very strong entity today. Labor, generally believing that the act reestablished a fair balance of power between unions and employers, supported its regulations with a few exceptions. There was much concern about interpretation of the featherbedding, boycott, and jurisdictional dispute rules, and the meaning of the terms "union coercion" and "excessive initiation fees" caused some bewilderment.

Tap-Hartley Act Policy What was George W. Taylor's attitude toward the Taft-Hartley Act? As we understand the background of the National Industrial Recovery Act, and the Wagner Act, we realize that these were products of the Depression. The Taft-Hartley Act, however, was in large measure a product of inflation. It was Taylors belief that it was passed as a result of large corporate employers' fear of the excessive power of unions, especially in an inflationary period. Taylor viewed the new act as a deprivation of the rights of workers to have free unionism, and he thought that collective bargaining was impaired as a result of the act. Although essentially the same as that of the Wagner Act, the Taft-Hartley preamble was in complete conflict, according to Taylor, with the act itself. Whereas the Wagner Act had sought deliberately to facilitate union organization, this time Taylor saw government policy as deliberately attempting to diminish the power of unions. A major criticism of the Taft-Hartley Act, according to Taylor, was that the government and its policy had once more reverted to that of the pre-Wagner Act period—namely, an official indifference and a willingness to permit labor and management to fight out their sharp differences about this matter. Under the Taft-Hartley Act, government policy became even less approving of the relative social values of collective bargaining. While the Wagner Act aimed at providing assistance to employers who desire self-organization and collective bargaining, workers under the Taft-Hartley Act were also assured of "the

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right to refrain from any or all such activities." The implicit conclusion is that the right of employees to refrain from organization needs as much government protection as the right to organize. Furthermore, today government assistance is available under the Taft-Hartley Act for decertifying a union as well as certifying one. Taylor feared that government would move to break up unions. This did not occur; time has indicated that he was entirely too suspicious of what might be done with the mechanism of the Taft-Hartley Act. Apparently he did not realize that members of the National Labor Relations Board, both national and regional, would continue to operate impartially. In fact, during the Taft-Hartley years, industry often accused board members of being "pro-labor." Taylor was incensed about the assistance features of Taft-Hartley and that government would actively administer the conduct of decertification elections, but he was also upset about the "right to work" provision. He indicated in a statement in 1951 that the act had introduced a program for union insecurity as an element of national labor policy. Taylor was quite critical of the "balance of power" theory advanced by labor experts who favored Taft-Hartley in its early days. He did not believe in the merits of a statute which could regulate union activities by seeking to protect individual members against the union and by limiting ways the union could apply its power. He felt that this position on the part of government evidenced a weakening of confidence in internal union democratic processes and in the inherent collective bargaining orientation of unions. He felt that the Taft-Hartley regulation of union practices and activities in order to adjust economic strengths at the bargaining table was essentially unsound, inasmuch as this policy changed the old referee function of the government. The government now seemed directed to cut down excessive bargaining power, presumably of either side, and thus indirectly influence the terms of agreement. The introduction of the balance-of-power concept caused Taylor deep concern, as he and others looked to collective bargaining as the best mechanism for fixing employment terms. Taylor agreed that some secondary boycotts involved the extended use of economic power and that to many observers the results might appear improper; on the other hand, some secondary boycotts were used to organize plants where employees were reluctant to join, but where the end of the maneuver was to establish an improved standard of working conditions in many competing plants. Taylor queried: "Does this form of use of the boycott constitute excessive economic

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power?" A conclusion that a union's economic power is excessive, according to Taylor, must rest by and large on a prior conclusion that the ends attainable through the use of that power are not legitimate. He could not accept the philosophy that a national labor policy should include a government responsibility for continuously adjusting the relative balance of power between unions and management so that neither could exact what was politically determined to be "unfair" conditions of employment. Anyone believing this should look to the transfer of some of the most important questions in industrial relations from the economic arena to the political arena. As indicated earlier, Taylor felt that government-regulated collective bargaining had now been substituted for free collective bargaining. With the NRLB given in effect the prominence and impelling voice at every negotiating conference, he now saw at least three aspects of collective bargaining that were to be regulated: (1) The scope of collective bargaining: In the context of the TaftHartley Act, the required duty to bargain collectively was applied so as to designate certain subjects that are legally encompassed by the collective bargaining process. Some of these subjects, of course, are wages, pensions, fringe benefits, health insurance, and merit increases. Taylor recognized that the law did not require agreement among the parties on these points; however, once the subject is held legally bargainable, management is precluded from taking any unilateral action with respect to it. If such a point is at issue in a public-emergency dispute under the Taft-Hartley Act, it would seem that it becomes "fact findable." In any event, a public board will tend to recommend as to the substance of the issue. Taylor recognized this aspect of the act as antimanagement, but perhaps he was overly concerned with the nature of the scope of bargaining issues at the time of its passage. He indicated that the NLRB appeared to be fairly liberal throughout the forties, but that there was a possibility that a future NLRB might become very conservative. One can see therefore that while Taylor was an eminent arbitrator, he was by no means a conservative. (2) The procedures of collective bargaining: Procedures allowed in negotiations can tend either to narrow or to widen differences and then either facilitate or impede agreement making. Taylor warned against a policy of strike first and negotiate later. If this were to develop, there would be no opportunity for relatively uncoerced bargaining. Taylor raised the issue of section 8d of the Taft-Hartley Act, which required a written notice of desired changes in the labor agreement to be made at least sixty days prior to the expiration date thereof. While he feared that ultimately the government would get too deeply into

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the procedures of collective bargaining, most labor practitioners today would agree that the sixty-day notice is an important asset to the parties and that it helps prevent the community and the country from having negotiations start so late that strikes and lockouts are bound to ensue. (3) Substantive terms of employment: An underlying assumption of collective bargaining is that unions and management can be entrusted with the right of and the responsibility for working out between themselves the actual terms and conditions by which workers will be employed. There are indeed risks involved. So also are risks involved when the government takes over the responsibility for designating the contents of certain clauses of labor agreements. Important in this consideration are the substantive terms of the employment agreement as they respect the union security and welfare funds. Taylor feared further government encroachment over alleged featherbedding or other work rule disputes. He saw the interest of the government in such items as actually narrowing the scope of bargaining. When the Taft-Hartley Act was passed, Taylor agreed that there were certain understandable dissatisfactions with collective bargaining, excess power of unions, and corruption in unions. Always a believer in free collective bargaining, however, he thought that there should be ways to eliminate collective bargaining's deficiencies. The wrong way was to substitute government determination. At the time, 1947, he undoubtedly was aligned with the philosophy of Truman, the man he had served so notably as chairman of the War Labor Board. In the years following the passage of the Taft-Hartley Act, George Taylor believed that a new and better labor law was needed. To the day of his death he felt that there were certain substantive deficiencies in the Taft-Hartley Act, and he could not agree philosophically with the "right to work" provisions. He felt that the spirit of the TaftHartley Act was punitive. He saw the act's full title as a symbol of dissension between union and management. NATIONAL STRIKES AND T A F T - H A R T L E Y VS. VOLUNTARY ARBITRATION

Interviews with Taylor on "Is There Any Answer to Strikes?" were reported in the U.S. News and World Report of 15 October 1959. He had just been made chairman of the Steel Strike Emergency Panel appointed by the president in 1958 under the Taft-Hartley Act. The public had begun to realize that powerful unions and powerful industries could involve themselves in long-term harmful strikes. It was obvious that the Taft-Hartley Act, with its national emergency strike provisions, was now on trial.

Government Encouragement

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Taylor was asked, "Is there a practical way to avoid big strikes that threaten the country with an emergency?" His answer was, "I think that the parties to the dispute negotiated for a long period and still did not settle the issues between them, so that there's an obligation on the two parties to agree between themselves to set up an arbitration board or a fact-finding board." "The parties themselves," he said, "should assume this responsibility in the public interest." Taylor made it clear that he believed the public interest would best be served by the parties agreeing voluntarily to arbitration or solving their own problems through the relative bargaining power they had. He pointed to his own long labor-relations experience leading others to call him "father of arbitration." In the early days of grievance arbitration employers would say bitterly, "You can't submit these disputes to arbitration; no outsider can tell us how to run our business." It was common procedure to close down plants over minor issues, but gradually alternative procedures developed, and the parties began to work out solutions for themselves. Arbitration today is called for in some form in ninety percent of the agreements between employers and unions. "When I started as an arbitrator," said Taylor, "almost no agreement had provisions for arbitration." He indicated that in principle he was against arbitration and would prefer that the parties decide the issues themselves, but, he added, "If they can't decide, you can't simply say that the settlement should be dictated by the government." PUBLIC INTEREST

Taylor believed in what he described as a Board of Public Accountability. He thought this board would say to the people who could not settle between themselves disputes that involved the public interest, "Now just what is it that divides you and is so important that you would throw the nation into an emergency? What is so important that you cannot arbitrate the difference, that in preference to arbitration, you force the nation to suffer?" He made it clear that the board should be a quasi-public one. He believed that it should consist of persons in the class of Bernard Baruch, Judge Learned Hand, and other individuals of equal stature. He preferred that the negotiating parties face up to their responsibilities without going to a fact-finding board, but if they couldn't, rather than plunge the country into an emergency, they had a public obligation to preserve the nation's freedoms, to work out a plan for arbitration and settlement of major national labor-management strife. Taylor preferred voluntary arbitration, rather than use of Taft-

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Hartley, for handling major strikes. He always believed that the TaftHartley machinery, in which he had participated on many serious occasions, could not solve the major issues of national strikes. A famous colleague was W. Willard Wirtz, who served with Taylor on the War Labor Board during World War II and the Wage Stabilization Board during the Korean War. On his return to his teaching duties at Northwestern University School of Law, Wirtz, who served later as Secretary of Labor under President Johnson, was asked his opinion of the Taft-Hartley Act. He agreed with Taylor: "It seems to me that what Taft-Hartley comes down to be is simply a polished-up, embroidered form of relief by injunction. My feeling is that the wrong way to solve these problems is to say to both parties that you must go ahead and work eighty days under terms laid down by the government." Wirtz viewed the injunction as requiring the union to accept terms offered employers for eighty more days. He, like Taylor, believed in voluntary arbitration and fact-finding in national labor disputes.15 UNION SECURITY UNDER TAFT-HARTLEY

Taylor was upset about the amended union security provisions of the Taft-Hartley Act. Under the Wagner Act, the statute was designed to be an antidepression legislative measure, since it eliminated the possibility of company-dominated unions and provided workers with an opportunity for collective bargaining. Taylor believed that the TaftHartley Act union security clauses were a step backward, because of the protection given to the right of individuals not to conform either to a union organization program or to a union policy. Historically, union security was looked on as a traditional subject to be dealt with by collective bargaining. Generally, it has been to the advantage of the employers to support a strong union security program. The union is expected to tightly review union member conduct to meet contract terms as well as to police the working conditions of employers to prevent the production of goods at substandard rates or conditions. Taylor believed that a strong union security provision was most workable and defensible when it had the support of an overwhelming majority of the employees and when the employer also looked upon it as a stabilizing factor. Management always felt that it had the right to discipline its own employees, including the use of discharge penalty for conduct inimical to the efficient operation of the business. 15. Taylor told this story to the author on several occasions.

Government Encouragement

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Despite Taylor's logic, the Taft-Hartley Act outlawed the closed shop. Moreover, the standard union shop previously included in labor agreements and widely used "maintenance membership" clauses were no longer permissible. Traditionally, the "union shop" meant that all employees were obligated to join the union and maintain their good standing as a condition of employment. The requirement of good standing in a labor organization formerly was determined by conformity to union rules. In essence, the union was given the right to initiate disciplinary action against an employee. Discharge could result from loss of union membership. Some unions admittedly did abuse their disciplinary powers over individual workers, just as some employers did before the unions came along. Whereas the new statute aimed at avoiding discriminatory actions by unions towards members, Taylor believed that the pendulum had swung too far in the opposite direction. Unfortunately, now all "de jure" union control over its members has been removed. In addition, the responsibility of individual employees under a labor contract has been limited by law.

UNION DISCIPLINE UNDER TAFT-HARTLEY AND LANDRUM-GRIFFIN

The Taft-Hartley Act, plus the Landrum-Griffin Act of 1959, created a situation where union officers were afraid to exert the kind of discipline among members necessary to make certain there would not be substandard work under a contract. Whenever grievances took place and the union officers indicated to the worker that he had no logical justification for filing a grievance, the worker could complain that he was not being represented in terms of both Taft-Hartley and LandrumGriffin and threaten to take the matter to federal attorneys. Union leaders are not as statesmanlike today as formerly in honoring the spirit of contracts they have negotiated. Now they often push grievances to arbitration even when the grounds are flimsy and the chances good that the union will lose. Taylor viewed with great suspicion the alleged purpose of the TaftHartley Act, namely, the social desirability of stabilizing or standardizing objectives of unions. He observed that many obstacles were being placed in the way of union control over members. He concluded that the protection of individual rights was incidental to the lawmakers and that they were part of a rationalization developed for the main purpose of trying to forestall the labor movement from obtaining its timehonored objectives.

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TAYLOR S POSITION ON RIGHT-TO-WORK LAWS

Under the Taft-Hartley Act, the highest form of union security is the union shop. The act took away from the union the hiring function which had made it important to its members. Instead, it gave the employer the right to put on the job any worker, including nonunion members, as long as the new worker joined the union within a given period. Under the Taft-Hartley Act, nonpayment of dues is the principal basis upon which the union can discipline a member. Taylor and others observed an adverse impact upon union security by the provisions of the act relating to the "right-to-work" laws. Permitting nonunion members to work in those states with such laws weakened union security and helped undermine national contracts that also covered southern locals. Even though a majority might vote for a union-shop clause, workers could still remain working in the bargaining environment without joining the union in the right-to-work states. The right-to-work feature was found in Section 14b, which provided that "nothing in this act shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any state or territory when such execution or application is prohibited by state or territorial law." Taylor believed that this provision ran counter to the usual principle that state laws are superseded by federal legislation on the same subject matter. The Taft-Hartley Act not only applied to state law, but declared further that the state law should apply to employers engaged in interstate commerce as well as those whose business was purely local. The issue of whether a state should outlaw or continue to outlaw union security provisions is very much alive and is an emotionally charged subject. President Carter has the AFL-CIO pressing him on this issue currently as a reward for labor support in his election victory. These laws give no one a right to work—except insofar as union security provisions interfere with that right, from the point of view of the state legislators. Some observers believe that the issue itself is largely symbolic and political rather than economic. Taylor believed, however, that if we were to attain industrial democracy as we have attained political democracy, majority rule should cover the issue and there should be no such limitation as when members of an appropriate bargaining unit can refuse to join a union simply because they work in a state that has a right-to-work law. It is obvious that right-to-work laws and Section 14b of the act did indeed weaken union security, at least in certain parts of the United States. Taylor also had mixed feelings about the provisions of the Taft-

Government Encouragement of Collective Bargaining Hartley Act that dealt with the custody and administration of welfare funds. Prior to the act, the central administration of welfare funds had been established by collective bargaining. Moreover, the terms and conditions of the administration had been left to the parties under collective bargaining. Under free collective bargaining, parties were free to institute and operate welfare funds as they saw fit, said Taylor. The Senate hearings on corruption and welfare funds, particularly a review of the Teamsters Pension Fund, were the principal reason for this section of the Taft-Hartley Act. Taylor was not against the investigation of the Teamster Fund; he admitted that a great many funds had been corruptly handled. He believed, however, that where funds were being administered fairly and honorably, there was no good reason to have the government involved. He felt that welfare fund regulations represented a further example of the extension of government jurisdiction over substantive issues of industrial relations. He pointed out this fact in Government Regulation of Industrial Relations: "Management and the union need not agree upon a welfare fund but they can only establish one that conforms to the regulations laid down by the law."16 UNFAIR UNION LABOR PRACTICES

A list of unfair labor practices was set forth in the Taft-Hartley Act to balance in some manner the original list of unfair labor practices binding on employers in the Wagner Act. One item in the Taft-Hartley list was the issue of featherbedding. A union would commit an unfair labor practice if it caused or attempted to cause "an employer to pay or deliver, 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." Complaints arising under this section were to be decided by the NLRB. The public generally understands that a stand-by musician or an additional local driver for out-of-town trucks is an illustration of "featherbedding," a term first inserted as part of the Taft-Hartley Act and later contained in the L an drum-Griffin Act. What concerned Taylor was the fact that as a result of the so-called featherbedding clause in the 1947 act, negotiators were put on notice that agreement making could now involve some new peril. Items ranging all the way from "payment for time spent by employees waiting at a plant for work," to severance pay for employees displaced as a result of technological improvements now have to be appraised in relation to the ban on featherbedding. 16. P. 321.

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Taylor saw the need for some financial provision to compensate employees who lost their jobs due to the introduction of labor-saving machinery. The employer might be convinced that such a payment was fair but nevertheless "illegal" since it was in the nature of an "exaction" and constituted an attempt to cause an employer to deliver money for services not to be performed. Taylor pointed out that the featherbedding provision could be a boomerang if it caused an employer to continue operation of old machinery and to shelve plans for improved equipment because the employees refused to operate it. Taylor, in his clear logic, thought it might be possible to distinguish clearly and precisely between payments for services not performed that are patently undesirable and those that are necessary and worthwhile methods for solving certain industrial-relations problems. J U R I S D I C T I O N A L D I S P U T E S UNDER T A F T - H A R T L E Y

Concern over jurisdictional disputes in the Taft-Hartley Act took up a considerable amount of Taylor's time. There are many illustrations in industry of work stops because of a dispute between two unions as to which should be assigned work. At a time like this an employer's interests are adversely affected, even though he sometimes does not care who does the work as long as it gets done! Most jurisdictional strikes are not undertaken to exert pressure on the employer at all; their purpose is to preserve the disputed work for those union members to whom jurisdiction is ultimately granted. As a matter of abstract principle, most unions agree that jurisdictional strikes are inappropriate and that the labor movement has the responsibility to eliminate them. The AFL-CIO actually did set up its own formal internal-disputes machinery under arbitrator David Cole to settle internal jurisdictional disputes before they might go to the NLRB. Despite this, the Taft-Hartley Act set up procedural rules and provided for government action with regard to jurisdictional disputes. The awards depended on the government's evaluation of the merits of the contending positions. If no agreement was reached between the parties themselves, the NLRB was to determine who should perform the disputed work. It was clear, as Taylor saw it, that substantive matters of employment would then be decided by the government. T A Y L O R S IDEAS ON N A T I O N A L L A B O R P O L I C Y

To summarize Taylor's position on the Taft-Hartley Act, he did not view the act as leading to "slave labor." The early union responses were emotional reactions rather than a reasoned appraisal of the legislation.

Government Encouragement of Collective Bargaining Taylor believed that the act was not an outright pro-employer statute. He did see it as the inauguration of government-regulated collective bargaining. He believed that free collective bargaining had few all-out supporters in the ranks of labor, management, and the public because resolving every industrial-relations issue by the uninhibited use of economic power constituted neither an acceptable nor a workable policy. The problem of devising a national labor policy evolved around the ways in which free collective bargaining should be modified. One of the tests to apply to any regulatory proposal is whether or not reasonable regard has been given to preservation of the latitude and the judgment that management and union representatives may exercise in working out their problems. "That test," said Taylor, "is fundamental in a country dedicated to the proposition that relative freedom from government direction is essential to what we call a democratic way of life." Taylor observed that the first broad attempt to formulate a national labor policy was being brought about through the Wagner Act. Government assistance was not extended to employees in organizing their unions till it had been convincingly demonstrated in the absence of such a policy that the right of employees to organize would be thwarted. Employees never gave up their efforts to organize despite the odds against them, so the nation was plagued with receiving organizational strikes, frequently characterized by violence and distress. Government's decision to aid employee organization was aimed at developing collective bargaining as a stabilizing institution. By bringing about a stabilization of wages and working conditions and increasing the worker's purchasing power, collective bargaining was to be a strong bulwark against depressions. Although the national policy of the Wagner Act was promulgated at a time when wages and working standards were badly demoralized, only a limited modification of free collective bargaining was made. Government intervention into industrial relations was almost entirely restricted to the organizational steps preliminary to collective bargaining itself. The objective was to assist employees to organize and thereby gain an ability to help themselves. Once workers organized, their representatives and management's representatives retained the most comprehensive latitude in resolving their differences. They could work out their problems in whatever way they saw fit by such means as they might choose under a system in which an exercise of their own economic strength was the final arbitrament. By the test mentioned, the Wagner Act was not an unreasonable extension of the government's jurisdiction.

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It was a product of the 1929 Depression and contemplated stabilization and working conditions within and between industries by collective bargaining as essential to the maintenance of a private-enterprise system. The Taft-Hartley Act was a product of the inflationary movement that followed World War II. Employees did not require the assistance of government in mobilizing their economic power to defend against the demoralization of their standards of living. Even the unorganized employees did reasonably well for themselves. In consequence, collective bargaining did not seem nearly so essential to national well-being. In 1947 the use of union power to secure advances in employees' standard of living was put under scrutiny. Taylor saw the Taft-Hartley Act falling short of providing a sound national labor policy. He felt that it extended government regulation into areas where decisions could better be made by organized labor and management. A sound change in policy in 1947, he believed, could have been made by passage of legislation: ( 1 ) to revise union organizational rules without giving assistance to the creation of dual unionism or to creation of individual bargaining and without ignoring employer responsibility questions, ( 2 ) to require collective-bargaining procedures in specific terms such as provided for the negotiation of expiring agreements to assist the agreement-making process, and ( 3 ) to set up procedures for handling national emergencies along lines following the act. Concentration upon these matters would not have constituted a pellmell rush without guides or experience into unexplored areas. A labor policy so based would have recognized a national interest in building up collective bargaining rather than precipitately bypassing it in favor of legislative regulation. TAFT-HARTLEY IN PUBLIC-EMERGENCY DISPUTES

There have been at least thirty-four Taft-Hartley injunctions since the passage of the Act in 1947. It is time now that one reviewed Professor Taylor's evaluation of the emergency dispute projections of the act with what is commonly held as professional opinion of the adequacy of these provisions. As chairman of the Presidential Board of the Inquiry during the 1959 steel strike, Taylor had an opportunity at close hand to see the injunction work. H e came away somewhat disillusioned with the results of the emergency dispute provision and then launched himself into some new alternative to strikes and injunctions against strikes by his involvement with Kaiser Steel Corporation in a new tripartite panel which was to reconcile private decision making with

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public interest. He explored new possibilities in negotiation and developing means of voluntary arbitration. Taylor, in a provocative article published in 1961,'7 raised these questions concerning the operation of the Taft-Hartley injunction: "Ought the disputing parties to be held accountable prior to the creation of an emergency for the manner in which they discharge their collective bargaining responsibilities?" and "Is it wise to preclude a presidential or other board of inquiry from recommending a basis for settlement even though the parties are not close to agreement?"18 The kinds of national labor disputes that have occurred sharply over the years and are described as public-emergency disputes are those that logically and usefully can be defined as disputes between unions and companies over employment terms in which the public is unwilling or unable to permit a work stoppage to perform its collective-bargaining function because of the peril, costs, or inconvenience that would be entailed. Taylor in 1961 was somewhat a traditionalist. He viewed collective bargaining in the United States as predicated upon the premise that establishing employment terms is a private undertaking carried out through a series of decentralized decisions. Any question of the fairness of these decisions in terms of employment is answered by the fact that an agreement between the two parties actually took place. In the traditional sense, Taylor saw public interest protected by the restraints of the marketplace upon negotiators. He realized, however, that such a pluralistic system was not designed to create or effectuate a national wage policy. In the same article Taylor gave his view of extending collective bargaining: "The work stoppage, or the threat of it, constitutes the ultimate pressure for inducing an accommodation of opposing views as a matter of economic self-interest to the two parties directly involved in a particular negotiation. The strike and the lockout are devices or procedures, for resolving an underlying dispute between unions and companies over terms of employment."19 He directed his shots to the heart of the argument—that the theory of collective bargaining had not been extended to defer the establishment of employment terms when a strike is unavailable to perform its function. Under Taft-Hartley a national work stoppage is not permissible, and under the terms of an injunction the underlying dispute remains to be settled. 17. "The Adequacy of Taft-Hartley in Public Emergency Disputes," Annals of the American Academy of Political and Social Science 333 (January 1961): 76. 18. Ibid. 19. Ibid., p. 77.

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Thus, Taylor saw the emergency disputes provision of the TaftHartley Act as being in contradiction to the theory of collective bargaining. Using this thesis, he felt it necessary to embark upon some innovative procedures as alternatives to the use of the injunction. These alternatives are crucial. From them he recognized in the tripartite committee at Kaiser Steel, in the work done to offset the negative impacts of automation in meatpacking, and in the automation agreement between shipping employers and West Coast longshoremen, some possibilities for innovative problem solving. The heart of the problem is what should be the appropriate terms of employment when workers are ordered back to work under a Taft-Hartley injunction. There is a concern, too, that the availability of an injunction under prescribed circumstances can result in the tactical use of the injunction to support the bargaining strategy of one party or the other. Many presidents have looked for tactical machinery other than the injunction to be used in emergency disputes. Taylor believed in a "choice of remedies" approach. As mentioned earlier, the weakness of the emergency-dispute provisions of the Taft-Hartley Act stems from the fact that its procedures do not operate until after a national emergency dispute has occurred. Taylor sensed a need to induce an agreement before that dire event. While mediation is recognized as a vital part of the national policy, this process is generally conceived as providing third-party assistance to negotiators, but only to the extent that they choose to accept such assistance in their wholly private undertaking. There is a big question as to whether these negotiations are really an exclusively private matter; their failure can create a public emergency. Taylor found that procedural regulations have an indirect effect on substantive terms. Those incorporated in the Taft-Hartley Act greatly influenced the substantive terms hammered out under government pressure. What is it worth to avoid the consequences of going through the required legal procedures? Taylor chaired the fact-finding committee appointed by the president in the 1959 steel strike. He believed that the employer's last offer, the requirement for a final vote as required by Taft-Hartley, and the involvement of Congress were tremendously important factors in inducing the employers to offer concessions in the steel dispute. What would have happened finally if the steel strike had been permitted to continue? This is a matter of conjecture, but no one can be optimistic about disillusionment, costs, and the indirect results of national strikes. Taylor believed it was possible to call upon his own experiences in World War II in the direction of having procedural substitutes for the

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strike agreed to by those directly affected. The "no-strike no-lockout" agreement and the establishment of the tripartite National War Labor Board were worked out in accordance with an understanding reached by representatives of organized labor, organized management, and the government. But that was wartime! Even so, there are unexplored possibilities for negotiators in particular situations to develop their own forms of voluntary arbitration as substitutes for strikes, especially where a public emergency work stoppage might be in the making. Taylor believed fully that creative thinking would help reconcile private decision making and the public interest in the avoidance of crippling strikes. As was indicated earlier, he was strongly interested in the new directions and approaches being tried in the longshore and meatpacking industries as well as the long-range planning agreement made between the Kaiser Steel Corporation and the United Steel Workers of America. He saw potentials in these approaches; to him they represented a considered judgment that those interested in preserving collective bargaining had a responsibility to devise new methods to minimize or to avoid the costs of strikes and to create "mutually acceptable" criteria for settlement not based exclusively on arbitrament or in relative economic power. Taylor was concerned that the Taft-Hartley Act did not recognize that parties involved in collective bargaining were discharging their responsibilities correcdy, but that nevertheless a national emergency might arise and affect public interest. He also did not believe it wise to preclude a presidential board of inquiry or a similar kind of board for recommending a basis for settiement even though the parties were not yet close to an agreement. BOARDS OF INQUIRY UNDER TAFT-HARTLEY

Under the Taft-Hartley Act, a board of inquiry can be established only after a presidential finding that the dispute will "imperil the national health or safety." As previously noted, the mediation undertaken at early stages is essentially in line with the traditional idea that the dispute is principally a private affair. In reality, the dispute may not be conceived exclusively in such terms by the parties themselves. They seem to recognize a broader significance by accounting to the public for their conduct and negotiations through adversary advertisements of diverse kinds. Not always does information clarify issues for the public, and inherently the facts and arguments presented can scarcely be viewed as entirely objective presentations. It can happen that the dire state of national emergency is reached without a purposeful at-

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tempt exactly to define the real issues, let alone to narrow or resolve them. This failure to define issues was the case in the 1959 steel strike. The board stated: "Negotiations on the economic issues, as disclosed on the evidence submitted to this board, were impeded throughout the dispute by preconditions set by the parties. The companies refused to bargain about wages and fringes until their demands respecting work rules had first been resolved. The union was unwilling to discuss work rule provisions, which it held not to be negotiable. Since neither side would accept the precondition of the other, effective negotiations could not proceed." Taylor watched as events, as in a Greek tragedy, moved the country inevitably toward a virtually complete stoppage of production in the most basic of industries. Of course, there was public interest in these negotiations. The kind of bargaining initiated after the creation of a public emergency might well have been carried on before a critical state had been reached, if there had been a compelling reason and perhaps some strong pressure for the parties to do so. T A Y L O R S P R O P O S E D BOARD O F A C C O U N T A B I L I T Y

Taylor believed at various times that rather than utilize the TaftHartley Act injunction, a board of public accountability should be charged with the responsibility of viewing the manner in which the parties are meeting their collective bargaining responsibilities, before the day of crisis should occur. Such a board would represent modification of the generally accepted idea that mediation is an adjunct to a rathej exclusively private negotiation. Taylor pointed out that in the Taft-Hartley Act, it was the policy of the United States to recognize collective bargaining, to advance the effectiveness of this process by making available full and adequate governmental facilities for conciliation, mediation, and voluntary arbitratiom, and to encourage employers and the representatives of their employees to reach and maintain agreements. He noted adequate government facilities as going beyond mediation and viewed it as explicitly encouraging the setting up of the board of accountability to encourage the parties to define the issues precisely and tto work at their reconciliation. He perceived this to be a sort of publiic mediation, as distinct from the traditional private mediation. Taylor was also concerned with the limitation on the role of the board of inquiry as set up by the statute. In Section 206 of the TaftHartley Act, it was provided that the report of the board to the presi-

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dent "shall not contain any recommendations." This seemed to him to reflect the view that recommendations would be an undue government intrusion into an essentially private negotiation. The fear was that if the board of inquiry actually made recommendations, these recommendations might help one party or another. That party in turn might be impelled to seek these recommendations in order to gain an advantage over the other party. This would actually encourage an additional tactical step in the bargaining process. Taylor perceived a parallel in the Railway Labor Act, under which collective bargaining in the railroad industry does not begin in earnest until after a presidential emergency board has submitted its recommendations. He sensed this as creating a floor for collective bargaining rather than as a basis for negotiating settlement, and pointed out that the problems involved in taking the recommendation approach were surely more consonant with the basic principles of life in the U.S. democracy than would be compulsory arbitration. The important question in Taylor's mind was: "Can the recommendation device be utilized without enervating collective bargaining?" That is, can the possibility of its technical use in negotiation be minimized? He noted that the parties were averse to various procedures relating to fact-finding, mediation, and arbitration—compulsory or voluntary —when the issues had not been narrowed at all and even when there was still a possibility that the differences might be further widened by the activities of outsiders. On the other hand, he took into consideration the possible operation of a public board of accountability as one that would actually result in the narrowing of differences, thereby making acceptable the use of recommendations or of voluntary arbitration as a final resort. Following his appointment by President Eisenhower as chairman of the board of inquiry in the steel strike, and because he was known as a great mediator, Taylor was on the receiving end of many calls asking why he was sticking absolutely to the construction of the statute, why he could not or would not make recommendations. In essence these calls from senators and other statesmen said, "George, you're handling this matter; why don't you make recommendations so that we can settle this thing?" Thus, Taylor found himself in the middle between his natural inclinations toward mediation and the rigidities of construction under the statute he sought so literally to comply with. He considered the possibility of having a mediating agency recommend in specific terms the use of voluntary arbitration in the public interest. The proposed terms of arbitration would necessarily include a precise statement of the issues to be resolved, a panel .of persons from which

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a selection of arbitrators could be made, and other pertinent details. The implicit question to the parties would be: Why should a public emergency work stoppage be deemed preferable to arbitration along the specific lines suggested? He conceived one way of strengthening mediation as the spelling out of specific circumstances under which a governmental board could request and be granted the authority to make recommendations in particular cases after other available efforts of securing agreements had failed. "If the public interest is to be effectively recognized," said Taylor, "some modification of the concept of negotiations as a private matter is unavoidable." He pointed out frequently that it was traditional for unions and management stoutly to resist outside intervention into their private negotiations over contract renewals. The assumption has been that outsiders cannot give assistance because they are not informed about the business at hand. He realized, however, in the Kaiser Steel Plan and in many of the tripartite groups studying the meatpacking automation agreement, that a continuing tripartite commission or board blunted that argument. Moreover, outside assistance need not be imposed, but can be invited under terms and conditions agreed to by the parties themselves. This represents a voluntary agreement in the collective bargaining tradition which, if effective, would obviate the necessity for imposed arrangements.

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In the classroom.

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The first meeting of the President's Advisory Committee on Labor-Management Policy after the assumption of the presidency by Lyndon B. Johnson. With Taylor (seated opposite President Johnson) are James Reynolds, Walter Reuther, Ralph McGiü, Clark Kerr, Arthur Burns, Henry Ford II, David McDonald, Stuart Saunders, Joseph Block, George Meany, Joseph Keman, George Harrison, David Cole, Walter Heller, Luther Hodges, and Willard W. Wirtz.

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Receiving kudos from Governor Nelson Rockefeller for chairing the governor's advisory committee on public employment relations for New York State.

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Responding to a quip from President Truman at a meeting in the president's office on 28 August 1951, shortly before Taylor's resignation as chairman of the National Wage Stabilization Board. With Truman and Taylor are acting vice chairman Fred Bullen and acting chairman N. P. Feinsmger.

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The presidential fact-finding panel in the steel-labor dispute of 1959 reports to President Eisenhower at the White House. Left to right: President Eisenhower, John A. Perkins, Paul N. Lehoczky, and Chairman Ceorge W. Taylor.

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The first meeting, under President John Kennedy, of the President's Advisory Committee on Labor-Management Policy, February 1961. Receiving congratulations from Secretary of Labor Arthur Goldberg, President Kennedy, and Vice-President Johnson are, from left to right, Walter Reuther, George Taylor, and David Cole.

The Medal of Freedom.

The teacher.

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George W. Taylor was known as the father of grievance arbitration and had a reputation as being perhaps the number one labor-management mediator in the United States government At the same time, Taylor as a teacher, author, and government administrator was an acknowledged authority on the process of wage setting and wage determination. During World War II, he took a leave of absence from the Wharton School and served as vice-chairman and later as chairman of the War Labor Board under President Roosevelt. Most people realize that a nation can suffer not only military defeat, but also an economic defeat as a result of possible runaway inflation during a war period, effected in part by labor strife. Taylor dedicated himself to labor peace in wartime and drove himself in order to work with a tripartite board of representatives from labor, management, and the public. He soon became a public figure; during this service he became famous for promulgating the "Little Steel Formula" and the development of various wage criteria that permitted modest increases under wage stabilization. Such concepts as the cost-of-living increase, the productivity increase, and wage adjustments consonant with market levels became not only the bargaining criteria for variations from the pay freeze of World War II, but also the basic labor-management vocabulary in collegiate textbooks as well as in collective-bargaining negotiations. An important part of Taylor's work in his public career with the War

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Labor Board was the training of today's most renowned figures in government, academics, and labor relations. Such leaders as Shultz, Dunlop, and Wirtz always acknowledged and appreciated the training and inspiration received from Professor Taylor. They in turn developed younger specialists who now preside in the labor-management profession looking back to Taylor's leadership. At the end of World War II, Taylor became chairman of the advisory board of the Office of War Mobilization and Reconversion and continued to serve his country in its new battle to achieve economic "normalcy." At the start of the Korean War, President Truman requested Dr. Taylor to leave the University of Pennsylvania and become chairman of the National Wage Stabilization Board. During the Korean War, Taylor repeated essentially the same role he had performed as the nation's leader in wage controls during the World War II period. He was also able by virtue of his acknowledged leadership to form an experienced staff. He drew on his rich resources of World War II criteria and regulations to make the entire program of wage stabilization much easier to start than it had been when he helped to introduce the new concept in 1942. When Taylor looked back to World War II after many years, he indicated that one of the great achievements of America at war had been the integration of civilian strength in the war program largely on a voluntary nontotalitarian basis. In no area was voluntary cooperation more basic and more productive of results than in the labor-relations program of wartime America. Applied to industrial mediation, this principle came to be known as "voluntarism," and it was completely exemplified in the functions of the War Labor Board. Taylor had always been an ardent believer in running the gamut in collective bargaining—that the employee had the right to strike and that the employer had the right to close down the plant. He believed these rights were fundamental to those personal liberties that are so quickly lost in a totalitarian state. He envisioned the economic pressures of strikes and lockouts almost in an institutional role, because he saw them as the ultimate determinants of labor disputes. Taylor always believed that the right to strike "is related to a belief that men should not be required against their will to work for the benefit and profit of other men." He also believed "that the employer's right to close down his plant is related to the belief that ownership and direction of industrial enterprise should remain in private hands." 1 1. "Voluntarism in War Time Labor Relations," the General Magazine Historical Chronicle of the University of Pennsylvania (Spring 1 9 4 6 ) : 146.

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In the light of these beliefs, it is easy to see that he was troubled by what type of restrictions or qualifications on these fundamental rights might seem necessary in the general interest in wartime. He concluded that the only proper and democratic approach was the voluntary development of the required policy by those directly affected—that is, by labor and industry. Any imposition of restrictions or qualifications against the will of either industry or labor would result in a program which lacked the support of those affected. This could necessitate compulsion and sanctions because if the program were to be ignored, it would reveal the impotence of the government in time of war.

World War I Wage Regulation and Strike Control The United States, fortunately, was able to look back into history to see what had happened in World War I. As the war approached, the Wilson Administration was confronted by many serious labor problems. Labor was terribly upset that, despite the passage of the Clayton Act to restrain labor injunctions, the Supreme Court continued to disappoint the labor movement in interpreting the law. Railroads, which had dominant labor unions in the four major brotherhoods, were threatening strike at a time when the country could not permit it. President Wilson then went ahead and provided the leadership necessary to secure passage of the Adamson Act, which guaranteed an eight-hour day without loss of pay for all operating employees of railroads. This reduction from a ten-hour workday was quite a breakthrough. President Wilson actively courted labor support. He was concerned with what might happen as a result of strikes during wartime. As the country went closer to World War I, there was an attempt to establish tripartite boards in various critical industries. The American Federation of Labor, as the dominant labor confederation, was given responsibilities to represent labor on these boards. In exchange, the AFL was willing to cooperate with the government and tentatively indicated that it would operate without calling strikes. What was helpful was the Wilson leadership in calling together a conference of American leaders from both industry and labor. This group, after deliberating for several months, hammered out an eightpoint program which included pledges of no strikes or lockouts, freedom of workers to organize and bargain collectively, and the maintenance of the status quo on the question of the closed and open shop. In April 1918, Congress created the National War Labor Board of

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World War I, providing for a tripartite board of five members from labor, five from industry, and two public members. Things looked bright for labor and management as an agreement was developed which guaranteed the right of organization and a freeze on the closed shop issue. The understanding was that open shops could remain open and closed shops could remain closed for the duration of the war. The World War I board lasted for roughly one year. It was successful in encouraging increases in union membership as well as acceptance of normal collective bargaining activities. Because of the official recognition by government, organized labor increased its membership up to 5Vz million. By and large, the World War I NWLB settled practically all the cases referred to it. In certain critical instances when the board could not settle the cases, President Wilson either took over the plants or threatened to draft workers and bar them from war jobs. There appeared to be a genuine sense of cooperation and a patriotic feeling about supporting the board and its determinations. Pioneered by the NWLB were such critical issues as the appropriate bargaining unit, representative elections, and so on. These determinations for the period of World War I helped establish guidelines for what were to be faced by the future national labor boards under the National Industrial Recovery Act and the Wagner Act. The accomplishments of World War I were more in the direction of preventing strikes and lockouts than in holding down on wage increases in the way that this subject was to receive emphasis in World War II and the Korean War. One of the major weaknesses in wage control in World War I was the adoption by the government of the cost-plus contract. This is a contract in which the price to be paid to the contractor is not set in advance, but is fixed afterward, on the basis of cost, with a flat percentage fee of total costs going to the contractor as his profit. The cost-plus contract made haggling over wage rates and hours ridiculous. Wage increases merely meant higher costs, and higher costs in turn meant a larger fee. This highly strategic situation enabled unions to get immediate and dramatic improvements in terms, which attracted new members in large numbers. There were greater public and governmental pressures against the cost-plus contract during World War II, and hence this device did not have the same tendency to create inflation by higher wages. Many employers who faced organizing drives during the World War I period of high profits, noting that there might be possible labor trouble, simply shrugged their shoulders and recognized the union. During World War I, President Wilson appointed AFL head Samuel

Government Regulation of Wages Gompers to the advisory commission on the Council of National Defense. It was this relationship with Gompers that made organized labor have an equal representation with management in the staffing of the NWLB. The basic rules of the N W L B that had jurisdiction over all disputes between employers and employees in war production industries were: 1. No strikes or lockouts for the duration of the war (although no penalties were stipulated in case of breach). 2. The right of workers to organize in trade unions and bargain collectively through representatives of their own choosing. 3. No discharge of workers for union membership or legitimate union activities. 4. No coercive action by organized labor to force employees to join or employers to recognize the unions. The record of the N W L B in the 490 cases which it settled sounds like a preview of the work of the National Labor Relations Board under the Wagner Act. To quote the official historian of the AFL, Lewis L. Lorwin: In all cases where the issue of organization was involved, the board insisted upon reinstatement of workers discharged for union activity and forbade blacklisting in individual "yellow dog" contracts. Where the board could not secure for employees the right to bargain collectively through trade unions, it provided some form of joint dealing when the employees demanded it. Frequently the board took the initiative in setting up shop committees for handling local grievances, and sometimes local mediation boards were added. Such arrangements were looked at as preparatory steps for a trade unionism. That was the reason employers feared these committees and boards. 2 It will be noted that "the right of workers to organize and bargain collectively through representatives of their own choosing" was later successfully embodied in the Railway Labor Act (1926), the National Industrial Recovery Act (Section 7a 1933), and the National Labor Relations Act (the Wagner Act, 1935). World War I provided the tripartite program which later became the feature of government controls over labor and wages in World War II and in the Korean conflict. It did not provide the same firm grasp of the problem of runaway wages as was provided by the Taylor board in both the World War II and the Korean periods. It did, however, provide the first involvement of the government in less than a 2. Lewis L. Lorwin, The American Brookings Institution, 1933), p. 166.

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compulsive way in preventing strikes and lockouts during war period. It thus encouraged both labor and management to think in terms of the basic issues that later became the collective bargaining rights of both parties under the NRA, the Wagner Act, and the Taft-Hartley Act.

World War II—The War Labor Board Shortly after the catastrophe of Pearl Harbor, President Roosevelt called into conference outstanding representatives of organized labor and prominent industrial leaders including many who were active in the National Association of Manufacturers and in the U.S. Chamber of Commerce. The task assigned to the conference was the joint creation of a national wartime labor policy. As they looked back on the experiences of World War I, they unanimously agreed that both the employees' right to strike and the employers' right to lockout as a way of resolving labor disputes should be suspended voluntarily for the duration of the war. The public interest called for the avoidance of interruptions to urgently needed production, despite any provocation. With the voluntary elimination of economic strength as the ultimate determinant of labor disputes, it became necessary to supply an alternate final determinant. Unresolved grievances would otherwise accumulate and impair employee and employer morale to the detriment of maximum war production. The conferees finally accepted the proposition that a National War Labor Board should be established to decide all labor disputes that were a threat to the effective prosecution of the war. In December 1941, Hitler learned what a democracy might do when beset with factional strife and thus prevented from waging an effective war. The voluntarily made no-strike, no-lockout agreement was the solid basis of America's World War II wartime labor policy. It permitted a miracle of production. Under the influence of labor experts such as Professor Taylor, the NWLB was not a board of compulsory arbitration. It became the custodian of the no-strike, no-lockout pledge. It was also an arbitration body for voluntary agreement. One might wonder about the source of authority for this program. Did it all come from the joint conference? The reality is that the overwhelming majority of American employees and American employers accepted the agreement as their own; they wanted it to work. During World War II the War Labor Board made determinations in more than

Government Regulation of Wages

20,000 labor disputes in which the parties accepted the board's determination as the final disposition. In only forty wartime experiences was a determination turned down by a union or a company. Although there was reluctance to accept the award on the part of one party or another, it was a basic belief that the board had been fair in determining relative equity and that there had to be a rationalized method for the systematic settlement of disputes. Otherwise there would have been drastic interruptions to production, and both parties would have suffered. The tripartite arrangement is a testimony that parties normally opposed to each other can set up a voluntary program for the good of the nation when they want to see the machinery work. In World War II, the War Labor Board was composed of four outstanding labor leaders, four prominent employers, and four members representing the public interest. This unique organization also served as a model för the many regional boards that were set up, each with the same tripartite representation. Procedurally, each member voted, and a majority vote was necessary for a decision. It soon became apparent that the public representatives on the board (many of them professors) were the key members who held the balance of power. Often the public members did not agree completely with either party, and as they looked at the evidence and the needs of the country, they felt that some intermediate position should be taken; thus they became creative leaders in labor-management affairs. MAINTENANCE OF MEMBERSHIP CLAUSES ( A WAY O U T )

In May 1942, Taylor, then vice-chairman of the NWLB, made an address in Scranton in which he stated: Since its inception, the National War Labor Board has been faced with two major issues—union security and wages. The nation expects the War Labor Board to settle these issues as they arise in particular cases. After three and a half months of deciding one case after another, the Board has made significant progress in determining the more general aspects of the union security problem. It is to be hoped that these decisions have disposed of the [union security problem] as a major issue in order that people may be free to bend their every effort to the winning of the war.3 3. " T h e Role of Organized L a b o r in Winning the W a r , " address at the annual convention of the Pennsylvania Federation of Labor, Town Hall, Scranton, 5 May 1942, pp. 4 and 5.

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He then explained that: In three successive major disputes, Walker-Turner, International Harvester and Federal Shipbuilding, the Board granted maintenance of membership clauses. Though the Board votes on these three cases were 8 to 4, with the employer members dissenting each time, the actual difference between the majority and minority was so narrow as to be almost invisible. In my opinion, the disposition of these three cases indicates that when a union claim for security has merit, a "maintenance of membership" clause may frequently be looked to as a solution and be developed in such a way as to insure that such a clause is acceptable. . . . In the International Harvester case, for example, a maintenance of membership clause becomes effective when it is approved by a majority of the union members in each plant. Both the WalkerTumer and the Federal Shipbuilding cases were significant in indicating that while failure of an employee to maintain union membership need not result in the loss of employment, [it carries with it] the imposition of some obligation such as continuing to assume certain financial costs to insure the proper carrying out of the agreement. A maintenance of membership clause requires simply that every person who has voluntarily joined the union is required to remain a member of the union for the duration of the contract. All those who joined later joined the union likewise bound to maintain their membership in good standing for the same period of time. This clause as applied by the Board, protects the union's existence and protects the individual's freedom of choice. I believe that American management is coming to recognize the inherent soundness of such union security provisions. They do not require an employee to join the union. They do recognize the need for stabilizing industrial relations. In the same speech, Taylor said, "The War Labor Board of World War I in 1918 guaranteed to the workers of this country something which they did not obtain by law until Congress passed the Wagner Act in 1935." He added that "if the Wagner Act were not on the statute books today, we would have to do what labor and industry did in 1918—we would have to invent it."4 As he looked back to the inception of the War Labor Board and World War II, he noted that there had not been a single authorized strike in the war industry since Pearl Harbor. As he looked at the record for the first three months of 1942, he noted that the man-days of idleness due to strikes affecting the war had been reduced to 6/100th of one percent of the total man-days worked. He said this record had never been surpassed by any other democratic nation in the world.5 4. Ibid., pp. 6, 7. 5. Ibid., p. 8.

Government Regulation of Wages

As the WLB began to mature during World War II, the country found itself benefiting by the highly professional attitudes and activities of the public members. With the active assistance of the labor and industry representatives on the board, the public members sought to work out solutions that would stabilize industrial relations and contribute to the maximum production of goods. Far from exercising the balance of power, the public members had to assume the responsibility for evolving workable solutions and then to get either labor or industry to support their program. A large majority of the votes were unanimous. Many more represented a sort of "sense of the meeting" and found all-round acceptability even when pro-forma negative votes were cast by labor or management. By common consent a majority vote became the action of the entire board, and almost without exception the board minority in any case recognized an obligation fully to support the final determination of the Board. One of the most notable characteristics of the board was the active public support of certain decisions by members who had vigorously opposed the very decisions in board sessions. TAYLORS DIRECTION OF THE WAR LABOR BOARD

The War Labor Board under Taylor's direction had become an institution dedicated to mediation procedures, to an extent and in a manner never before attempted. "Those who would call it compulsory arbitration," said Taylor, "make but a superficial analysis of its procedures."6 He saw the board's record as being an outstanding example of voluntarism and labor relations. The strength of the wartime policy lay in a high degree of acceptance which was developed in all major cases. Labor members of the board were in close and constant touch with their labor principals in each dispute case. The industry members worked similarly with the individual managements. The tripartite board afforded a means by which the parties to a dispute were kept informed of each plan under discussion to solve particular problems and were kept aware of the gradual development of the plan. Defects and proposed solutions were often brought into board discussions by the labor and industry members, and modifications and improvements were constantly made by the public members. Determinations in the major cases and in the policy-making cases evolved slowly and were not made full-blown. As a result of this process, it was usually possible to work out a decision in which the 6. Ibid.

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parties would acquiesce even though they might not embrace it enthusiastically. Where unanimous acquiescence of the parties was not possible, their awareness of what was going on and their knowledge of the reasons underlying the board actions removed the element of shock from the final decision and thus contributed to the settlement process. Taylor was a part of a development in World War II which he described as "a consent to lose" on the part of the parties. This was of major importance in settling labor disputes. In later life, he applied the same concept as the reciprocal of the so-called nonnegotiable demand which was being made in society during the sixties. In sum, the strengths of the National War Labor Board derived from its establishment by voluntary agreement of labor and industry, from its tripartite composition, and by the emphasis upon the mediation approach in all major cases and in all policy-making cases. After all, it was wartime and many persons looked at the NWLB as a kind of supreme court for the adjudication of labor disputes. Taylor did not believe that this was the proper evaluation of the board's work; he saw its task as primarily the consideration of claims for equity and the resolution of labor disputes in such a manner that the parties in conflict would, as far as possible, be convinced that they would receive equitable treatment. The attainment of these objectives, requiring cooperation during wartime, was made more difficult by the rigidities of the wage stabilization program that had to be developed by the board as a phase of its fight against inflation. W L B ASKED TO A D M I N I S T E R W A G E S T A B I L I Z A T I O N P R O G R A M

When the National War Labor Board was established in January 1942, it was charged solely with the responsibility for the settlement of labor disputes. However, to this responsibility there was added in October 1942 the duty of administering the wage stabilization program. Taylor viewed this combination of functions as an anomaly. He saw that the settlement of disputes called for great flexibility in seeking various formulas that could possibly resolve an issue and for sufficient latitude to provide equity irrespective of rules and regulations. On the other hand, he saw wage stabilization as resting upon relatively inflexible rules and regulations that afforded little elbowroom for working out solutions to wage issues. This inflexibility stemmed from the Economic Stabilization Act in which Congress ordered that wages be stabilized as far as was practicable at the level existing on 14 September 1942. With the coming of wage stabilization, it was apparent that restrictions on wage changes would have to apply uniformly to decisions and

Government Regulation of Wages disputes cases and in actions upon voluntarily submitted requests of employers to increase wages. There were, therefore, strong administrative reasons to support the combination of both functions under one agency. Through cases decided early in 1942, the NWLB had gone far in working out certain principles of wage stabilization. T H E " L I T T L E STEEL F O R M U L A "

One of the most famous of these principles was developed by Taylor and was the first to be accepted by the public. At first it appeared that President Roosevelt would oppose it. Now famous and part of the textbooks and the literature in labor relations, it is the so-called "Little Steel Formula," set forth in a decision of the board in July 1942. The relatively large wage increases that threatened to unstabilize the economy were being made voluntarily by employers to secure a full complement of employees despite the tightening manpower situation. It became urgent that the controls already established should be extended to voluntary increases. For these reasons, the War Labor Board was given the responsibility of approving or disapproving voluntarily submitted requests for authority to increase wages, even when these requests were a result of labor negotiations. During 1944 the boards caseload included approximately 6,500 dispute cases, but more than 200,000 voluntary applications. It should be noted, however, that the dispute cases were of overwhelming importance with respect to key issues, the development of major policy, and the vast number of employees directly or indirectly affected. According to Bloom and Northrup: Until October 1942, the War Labor Board had no authority over voluntary wage adjustments. During the first nine months of its existence, however, when its sole concern was with cases involving disputes between labor and management, the W L B developed its basic stabilization program which was later applied both to voluntary requests for wage adjustments (submitted either from management alone in nonunion plants or jointly from union and management in unionized plants) and to cases in which the WLB decided disputes between unions and management. 7 Bloom and Northrup also described how the so-called "Little Steel Formula" was to work: Basically, this formula provided that establishments which had not had an increase of fifteen percent, in average straight-time hourly 7. Bloom and Northrup, Economics of Labor Relations, wood, 111.: Richard D. Irwin, Inc., 1973, pp. 398-99.

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earnings since January 1941 (equivalent to the rise in living cost between January 1941 and May 1942), should be permitted to increase wages to this amount. It is noteworthy that wages were thus stabilized at this level without regard to increases in the cost of living that followed after May 1942.8 Bloom and Northrup also concluded that the impact of the stabilization of wages and salaries during World War II under the W L B was strong and unusually successful. The cost of living rose between January 1941 and July 1945 by only thirty-three percent, while for the same period, basic wage rates increased about twenty-four percent.9 However, annual earnings per worker rose more sharply than base rates during the war for such reasons as overtime, shift differentials, promotions, movement through salary ranges, merit increases, and by adjustment in incentive rates. After receipt of a special study "The Latimer Report," the War Labor Board opened up the whole subject of fringe benefits. This has come to haunt employers in later years. Freezing wages was not in the same category as deferred fringes such as insurance and health and welfare plans. As deferred benefits, many new fringes (including vacations and holidays) were considered as noninflationary. Wage adjustments to eliminate internal and external inequities were also granted to help the war effort. The board also established criteria for approving wage increases where increased productivity could be evidenced, since it considered heightened productivity as counterinflationary. After the wage-stabilization program was established by an Act of Congress in October 1942, the area of discretion left to the board in wage issues became limited. There were further successive limitations by reason of executive orders issued by the president and regulations issued by the director of economic stabilization. These regulations were certainly necessary to battle inflation; however, they introduced into the board's work inflexibilities that hindered the task of settling labor disputes. As Taylor looked back on his accomplishments as chairman of the War Labor Board in World War II, he saw that the wage-stabilization program could not have been effectuated without widespread interruptions to production—had it not been for its administration by the voluntarily established tripartite War Labor Board.10 8. Ibid., p. 399. 9. Ibid., pp. 3 9 9 - 4 0 0 . 10. "Volunteerism in Wartime Labor Relations," the General Historical Chronicle of the University of Pennsylvania: 152.

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Government Regulation of Wages He gave credit to the representatives of both labor and management for dedicated work on the War Labor Board, naming each member specifically in speeches and articles, but he generally failed to credit the public members by name in references to the board since, as chairman, he himself was a public member. The labor-management profession realized that it was the "professors" who as public members had met their tasks with a realistic approach. With the coming of V-J Day, the wartime task of the National War Labor Board was completed. The no-strike, no-lockout pledge of American labor and American industry expired after having been the sturdy cornerstone of wartime labor relations for over three and a half years. With the end of hostilities came a gradual change in the willingness of labor and industry to voluntarily accept board decisions as a substitute for negotiated industrial relations. A new national labor policy was needed for the reconversion period. Truman called a conference in late 1945 to work out the new policy, and Taylor became secretary of the President's Labor-Management Conference, which struggled with its charge from September to December 1945. The country looked eagerly to that conference, expecting it to evolve a new agreement restricting the right to strike and lockouts, at least during the critical days of reconversion. The very nature of that conference, according to Taylor, recognized that the rights involved could honestly be restricted only by agreement of the parties affected. While labor and management had learned well the need to cooperate in World War II, there was a different spirit aboard in the postwar era. It was now necessary for the conferees to balance the needs of the country for resumption of civilian production with the desirability of a labor-relations program that would exclude the government from a decisive role. The recommendation of the 1945 conference to the nation was that collective bargaining free of governmental influence or participation offered the most effective substitute for industrial warfare. In view of the lack of willingness of the conferees voluntarily to accept restrictions on the right to strike and lockout, it was not surprising that Congress moved with reluctance and caution before considering the possible imposition of restrictions. Many citizens wanted such restrictions, but they were not knowledgeable in industrial relations. The spirit of tripartism was on the wane and would not revive unless new and unusual national emergencies were to occur. Taylor once more favored the resumption of effective and responsive collective bargaining. The 1945 Labor-Management Conference concluded that while the

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union's right to strike and the employer's right to close down his plant might be voluntarily restricted in particular cases by the parties directly affected, these rights should not be qualified in any general way. These beliefs were to some extent ignored in the 1947 Taft-Hartley Act, which required that the parties not strike or lockout when national emergencies were created. The response to Taylor's concerns under the Taft-Hartley Act was the government injunction and the fact-finding boards. While Taylor recognized that the conference had failed, the main failure appeared to him to be the absence of fruitful consideration of the obligations of labor and industry that must be met if collective bargaining is to "be developed as a better mechanism for the avoidance of interruptions of production." 11 He felt this to be the top-priority question in the field of industrial relations. When Taylor made a key address before the Trade and Commerce Bar Association in New York City on 20 February 1946, he was already aware that collective bargaining failures had mounted since the end of World War II. There were plant seizures, orders to return to work, recommendations by government boards that were the same as compulsory arbitration. He saw the negative events of the post-control period as making very clear the tremendous responsibility of both industry and labor to make collective bargaining a more effective substitute for strikes and lockouts. He was concerned that if collective bargaining did not shape up, alternative methods of securing industrial peace might well be developed. Possibly he visualized the imminent Taft-Hartley Act. Despite Taylor's experience as chairman of a governmental War Labor Board controlling wages during World War II, he did not vary his basic opinion that the proper method of determining wages was through collective bargaining. In his 20 February 1946 speech he said: Not many persons today object to the principle that wages should be set by collective bargaining. But do people fully appreciate the significance of that statement of principle? . . . Wages are negotiated in thousands of separate transactions under widely varying economic conditions and by negotiators with different philosophies and points of view. There are, therefore, no allpervasive principles recognized as compelling. Negotiations are conducted moreover as an alternative for the exercise of the most powerful economic pressures which are available for the use of either side to gain objectives irrespective of their soundness. Since 11. Address before the Trade and Commerce B a r Association in Now York City, 2 0 February 1946, p. 3.

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the resort to the industrial warfare usually involves grave consequences to both parties, we count upon that to induce a compromise of differences and the consummation of an agreement. What it takes to avoid the use of economic force may be the most important factor in wage determination. These realities mean that wage determination cannot be accomplished by the rigid application of some pat formula even if we knew enough about economic relationships to devise such a formula.12 Taylor continued throughout his life to be a believer in the so-called "fair wage." He believed, however, that the fair wage "per se" may at times be a powerful determinant of wage levels, but effective collective bargaining is conducted so that the economic needs of particular companies and particular industries are taken into account. He saw the concept of the fair wage "per se" as excluding the "ability to pay" concept, which is so important to those interested in keeping plants running and in making jobs available. He found it difficult to utilize the "ability to pay" criterion in wage determination. Important though past experience may be, he believed the "ability to pay" principle provided only the starting point for the making of a future judgment. Controversial as the criterion may be, it certainly cannot be ignored in effective collective bargaining. The idea of a fair wage and the concept of the ability to pay are both important in wage determination; however, they must be balanced in each situation in order to provide the flexibility to which Taylor subscribed in contrast to the rigid adherence to a fixed formula. Although Taylor was perhaps the nation's outstanding administrator in determining wages during both World War II and the Korean War, he continued to believe that: When the government undertakes to determine wages, the flexible approach which is possible in collective bargaining tends to be lost. During World War II the War Labor Board stabilized wages by designating certain wages as fair and equitable, and they were effectuated without consideration to other pay factors. It was not possible during the war to order employees to work for less without ordering unfair inequitable wages. Ability to pay as a factor in wage determination was virtually suspended. The resulting inflexibilities were sometimes so impractical that the employees through their unions occasionally agreed with the employer to accept less than the Board had ordered as a means of protecting the competitive position of the company and their jobs.13 12. Ibid., pp. 1, 2. 13. Ibid., p. 8.

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The Korean Conflict When the Korean War started in June 1950, the United States had been experiencing a decade of both war and postwar prosperity of unprecedented magnitude, with full employment. The inflationary impact of the Korean War was immediate, but more because of psychological than basic economic reasons. For, despite full employment, war expenditures in bulk did not occur until after the greatest price increases had taken place. Immediately, consumers and producers alike seemed to act as if they had played the roles before. Goods were snapped up off the shelves, labor agreements were voluntarily opened to grant wage increases, factories worked overtime trying to fill the accelerated demands, prices rose sharply. Inflation was resulting not from a shortage of supply relative to demand, but because people expected shortages to occur and because they expected prices and wages to be stabilized World War II style. Everyone seemed busy buying, because they expected wartime shortages, which did occur because everyone was so busy buying and hoarding. Prices and wages rose sharply, and by the time price-control legislation was enacted soon after the Communists invaded South Korea, President Truman did not invoke it until after a serious wageprice spiral had already occurred. Once price and wage controls were invoked, the inflation halted its runaway course. Because of the psychological character of the inflation and the lack of any genuine supply shortage relative to demand, it is logical to assume that President Truman's slowness to invoke controls was a costly mistake. Once controls were invoked, however, they worked quite differently from those of World War II. DIFFERENCES B E T W E E N W L B I N WORLD W A R II AND W S B I N T H E KOREAN C O N F L I C T

Wage stabilization during the Korean War was to be administered by the National Wage Stabilization Board, a tripartite board of World War II. President Truman called Taylor to chair the board. He was a great asset to the country in view of his enormous World War II experience. Whereas the War Labor Board of World War II was created as an agency with power to act only in dispute cases and then later was granted authority over voluntary wage adjustments, the WSB in the Korean War was created to control voluntary wage adjustments and then later was given limited control over dispute cases.

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Although one dispute case, the steel workers' big steel controversy, just about put the finishing touches on the work of the Wage Stabilization Board, most of the controversies were cases in which employers and unions joined forces in an endeavor to obtain special consideration. Taylor saw the purpose of the freeze order of 1951 as being widely misunderstood. That order suddenly stopped disorderly movements of prices and wages that were aggravating the basic inflationary pressures by increasing the cost of armament, and solved the problem of allocating resources quickly for the defense program. That was, however, only the negative aspect of the freeze order. On the positive side, it provided an opportunity to work out orderly and less speculative movements of prices and of wages. Always an economist, Taylor pointed out in a University of Pennsylvania Law Review article that in a peacetime economy, prices determine the allocation of scarce goods—the preferred claimant is the one who can and will pay the highest price. In a defense economy, it is determined that armament needs will be met entirely irrespective of costs, not on the basis of free market forces. Hence, speculative bidding for scarce material can be disruptive to the defense program.14 When the economic freeze order was issued in January 1951, wage relationships were badly awry. During the preceding year, unionized employees had received varying increases depending upon when their labor agreement expired. Small increases of from two to three percent were given early in the year, but the cost of settlements increased sharply by the end of the year, with ten percent general wage increases becoming common. In contrast, a large number of white-collar and nonunion workers had received no wage increases at all in 1950, despite the rise in living costs. A rigid freeze of these distorted relationships would not only have been capricious and inequitable, but would have seriously interfered with employee morale in the maximum production of needed goods. The task of the Wage Stabilization Board, at least in the beginning, involved the substitution of orderly wage movements for disorderly ones, and the first phase of this work involved the approval of certain necessary wage adjustments. Distortions were to be handled by various adjustments approved by the board through General Regulation 6. These were: 1. The ten percent catch-up allowance: Groups of employees who had not received so much as a total ten percent general wage increase by 15 January 1950, could be "made-up" to that figure without specific 14. " W a g e Stabilization in a Defense Economy," University Law Review, January 1952, p. 501.

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or prior approval. This was to permit "wage laggards" to catch up with the increase in the cost of living. Only if a larger wage adjustment was sought by an employer operating with or without a union, would it have been necessary to secure the approval of the Wage Stabilization Board. Soon the ten percent limitation was widely looked upon as a ceiling. Every board approval of a request to increase wages beyond the ceiling in a specific case was commonly evaluated as "piercing the ceiling." 2. Base Rate Abnormality: The so-called ten percent catch-up allowance was devised on these two assumptions: a. Wage-rate relationship between plants and industries were generally on a stabilized basis on 15 January 1950. b. If increases up to a total of ten percent over January 1950 were permitted, the maladjustments created by the post-Korean changes in wage relationships would be largely eliminated. These assumptions were generally supported by the facts. But there were some exceptions that had to be provided for. For example: The shipbuilding industry had gone through a severe contraction of business before 1950. This was reflected in its relatively low wage rates as compared to other heavy industries. A ten percent wage increase over rates paid in January 1950 would continue a wage relationship which reflected depressed conditions. The shipbuilding industry requested a fifteen percent make-up allowance in 1951 to establish a stabilized relationship between its wage rates and those of related industries. This request, made at a time when the industry's orders started to move upward, was approved by the Wage Stabilization Board because of the base-rate abnormality just referred to. 3. Tandem Allowances: Wage adjustments could not be limited to ten percent over those prevailing on 15 January 1950 in still another type of situation. There were numerous cases where, just prior to the freeze, wage increases of, say fifteen percent, had been legally given to employees in one department of a company, but not to those in another department—usually the production workers had gotten a wage increase and the white-collar workers had not. Or, employees of one company, a wage leader in an area or an industry, could benefit by a twelve percent wage increase, while those of another company, the wage follower, were caught by the freeze. Immediately following the freeze, managements caught with this problem became fearful lest the consequent loss of manpower or poor employee morale impair the efficiency of operations and result in abnormal labor turnover. They insisted upon the essentiality of wage adjustments to reconstitute wage relationships. It was then provided under the wage-stabilization rules that where

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wages for two groups of employees had long moved together in tandem fashion and where such a long-established relationship had been disturbed by the wage freeze, wage increases totaling more than ten percent since 15 January 1950 could be given to the extent necessary to reconstitute the stabilized relationships. These new regulations looked backward. Their main purpose was to unravel a tangled web of wage relationships that was brought about in the absence of controls, subsequent to the initiation of the Korean conflict. Only after the tensions of a straightening-out process was it possible to consider policies to govern further changes in wages in response to changing economic conditions. COST-OF-LIVING ESCALATION

Taylor believed that wage stabilization could involve the linking of wage rates and cost of living. He thought regulations had to be promulgated to deal with the general level of wage rates. Central to the determination of such regulations is the consideration of tying in changes of wage rates with changes in the cost of living. Rapid increases in living costs could result in a reduced standard of living for all employees unless overtime or upgrading provided additional earnings to keep the weekly wages on a par with increased living costs. Taylor was responsible for General Regulation 8 15 of the Wage Stabilization Board.14 This stated that as a general proposition, "Wage rate increases proportionate to increases in the cost of living should be appropriate." Taylor subsequently noted that severe criticism had been directed against this policy. It had been called the device of "built-in inflation." When wage increases are permitted to match cost of living, higher prices will result, and there will be a constant upward movement in living costs. Thus, there is a danger of an inflation spiral. Taylor saw a critical test of the stabilization program as one in which there would be evidenced the willingness of employees substantially to restrict general wage increases to such an amount as will maintain real income. This would mean in essence that the general wage-rate level would provide for no improvement in real hourly wage rates during a defense emergency period. PRODUCTIVITY FACTORS

For a time, it appeared that organized labor would be reluctant to accept the rigid cost-of-living formula, but did see the logic of the "productivity factor." This acquiescence was more theoretical than 15. Ibid., p. 5 0 9 .

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actual. Unions did not mind accepting increases based upon the productivity factor as long as the worker did not have to justify the fact that actually he had more productivity resulting from his own inputs than from the additional inputs of the higher capital investment equipment and machinery. They liked the General Motors "Annual Improvement Factor," which provided annual unmeasured productivity awards based upon the theoretical concept for a four percent national growth in GNP. THE INTERPLANT INEQUITY RULE

In many cases involving small companies, additional wage increases had to be provided to meet the test of the competitive labor market and to support the defense program. This was recognized as the "interplant inequity." Typical cases arose as requests from a smallor medium-sized employer to raise wages "more nearly up to a level of a designated large company in the same community." Usually there was a complaint from the smaller manufacturer that he was losing employees to the larger neighbor and, "Is it the policy of the government to discriminate against small employers?" Taylor liked the essence of the "interplant wage inequity rule," which he followed during World War II. This was that wages more than ten percent below the average wage paid in the community for a certain job could be increased to a point of approximately ten percent below the average. Field examiners from the Bureau of Labor Statistics provided monthly data to Regional Wage Stabilization Offices so that these small-employer requests could be properly evaluated. THE INTRAPLANT INEQUITY RULE

The question was whether or not within the same plant wages paid various employees were proportionate to the skill, effort, and responsibilities required in the performance of a job. Whenever maladjustments would come about that could cause grievances or wildcat strikes, it was time certainly for settling these maladjustments through the interplant rule. Thus, internal wage inequities were eliminated through the application of this criterion. WAGE STABILIZATION PATTERN

A SERIES O F "LEAPFROGGING"

The approach of the War Labor Board in World War II was to set policy on the basis of its decisions in individual cases, particularly dispute cases. Earlier in this chapter it was noted that the basic sta-

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bilization doctrine in World War II was the "Little Steel Formula" and its development explained. The approach of the Wage Stabilization Board in the Korean War was quite different. Wages and prices were temporarily frozen on 25 January 1951. The WSB then began promulgating regulations governing conditions under which increases based on merit or length of service, promotions, and inequities could be granted without specific board approval. Unions and managements wanting permission for larger increases than allowed by the general regulations had to request specific permission from the board. As requests were granted, general regulations were changed. So, although an initial policy was set by general regulation, specific cases modified the regulations and resulted in new ones. In a sense, the wage stabilization pictured during the Korean War resembled a game of leapfrog. A general regulation that set a permissive wage increase ceiling was laid down. A special case came up and the increase permitted jumping the ceiling. Soon after the wage-price freeze on 25 January 1951, these leaps proceeded rapidly; then for a while they slowed down. In the end they took one big leap—the steel case—and then wage stabilization virtually collapsed. It was Taylor's own opinion that wage controls were anything but a conspicuous success during the Korean War. Why did controls work quite differently during World War II from the way they did during the Korean War? Several probable reasons are based on the different backgrounds of the times: the slow start of the defense program, the previous depression, and a lack of personal and business income savings and borrowing capacity served as deterrents to inflation at the start of World War II; with the Korean War, on the other hand, the United States entered after enjoying prosperity for more than a decade, plus plenty of personal income, business income savings, and borrowing capacity, all of which were used to bid prices up. During World War II, it was considered unpatriotic to contribute to inflation; also, there was the psychological part of the war effort wherein everyone was emotionally involved. On the other hand, the Korean War was only a lukewarm effort, both emotionally and psychologically. At the beginning of the Korean War, controls were seen coming, so prices and wages were built up before the controls were put on. The attitudes of union and management were quite different in the Korean War. At the beginning of World War II, management fought unions vigorously on all the major issues of wages, fringes, and union security. During World War II, management simply bided its time with unions, supposing perhaps the unions would disappear; manage-

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ment did not see them as a permanent institution. Wage stabilization therefore worked well in World War II because employers feared that wage increases would be ruinous to them. They were also concerned with the uncertainty of business fortunes in the postwar period. At the beginning of the Korean War, however, management found it could live with the unions. This was particularly true of large companies with requests for large wage increases, costly fringes, and the granting of union security. Consequently, these big corporations were much more interested in doing business normally than in having strikes. They had the same attitude about wage stabilization. In fact, General Motors and other large corporations argued against freezing cost-ofliving and "annual improvement" provisions contained in their agreements with UAW. Furthermore, at the beginning of World War II, unions were new in most industries and were not full accepted. But at the time of the Korean War, this had changed. LESS YIELDING ON W A G E CONTROL I N WORLD W A B Π

Among George Taylor's major contributions during World War II were the development of the "Little Steel Formula" and his success in playing "tough" with stabilization. He and his board stuck to the stabilization program, although there was liberalizing on fringes. During the Korean War no such tough position was adopted by the government. Executive branch pressure on the board was to prevent strikes; thus the Wage Stabilization Board made arrangements with major corporations in such cases as the United Automobile WorkersGeneral Motors agreement and then later applied the liberalized treatment to all other situations. Wage discussions in World War II were strengthened by the union and employer commitment not to strike. The nation would not accept interference with production. World War II's all-inclusive nonstrike pledge was accompanied by the establishment of a dispute settlement board with practically unlimited jurisdiction. According to George Taylor, the attitude of the WSB in the Korean War was that the major problem centered on the expressed need for wage stabilization rather than work stoppages. Apparently, during the Korean War, the government and the people could have their cake and eat it, too. The early fears of lack of consumer goods disappeared when it developed that the war could be carried on while consumer goods remained available. Before the wage stabilization program was begun during the Korean War, Taylor was asked what his opinion would be in connection with

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the possible modification of the wage provisions of long-term agreements in the automobile industry. These provisions had been described as a program for built-in inflation, because they provided for wage rates to follow cost-of-living changes and because the contemplated increases in productivity were to be compensated for. Despite the inclusion of an "annual improvement" factor in the UAW agreement it was very difficult to prove that this clause resulted in increased productivity. Taylor looked agonizingly into the question of whether or not existing labor agreements should be modified by wage stabilization. Yet, still using his feeling that "voluntarism" was the most important element in collective bargaining, he stated in an important speech in 1950: These agreements were negotiated without strikes. Their terms were not only mutually agreed upon as a practical way to ensure high production and high productivity but were highly hailed by many as examples of industrial statesmanship. [These new agreements] insure against work stoppages for a five year period. Steps [by government] to deliberately "unstabilize" what the [contractual] parties both consider a "stabilized" relationship would carry a heavy price for the gains [hopefully to be] achieved in the control of inflation. Such steps would morever have to be imposed upon the parties. 1 · It is obvious that Taylor's attitude about being "tough" changed somewhat between his assignments as chairman of the War Labor Board in World War II and as chairman of the Wage Stabilization Board in the Korean Conflict. Part of it, of course, was the fact that between the end of World War II and the beginning of the Korean War it became obvious that labor and management had developed a way of working together in which there was less probability for major disputes and strikes. LABOR AND MANAGEMENT ATTITUDES TO NO-STRIKE, NO-LOCKOUT AGREEMENTS

It was obvious that during the Korean War, labor and management would not agree to either voluntary or compulsory restrictions on the strike or lockout issues. The World War II agreement could not be repeated. Dr. Taylor pointed out: "Such a policy to be effective, would require first, a virtually unanimous support of those directly affected, 16. "Collective Bargaining and the Defense E c o n o m y , " Presidential address, Industrial Relations Research Association, Chicago, 2 9 December 1950, p. 5 .

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and second it would have to include an understanding about the voluntary mechanism which would have to be set up." 17 Taylor was against any government policies that would develop "blank check" arbitration. Were this procedure available, it would tend to impede the resolution of issues in the customary two-party bargaining. He also believed that the elimination of strike and lockout intimidation would remove the greatest inducement for compromise and agreement. In 1950 Taylor was somewhat apologetic for his views against nostrike, no-lockout prohibitions. He stated: The requirements of defense do not call for an all-embrasive nostrike policy [at this time]. Plans for drawing up our defenses are simply not being impeded by strikes. Collective bargaining is producing a much better record of peacefully negotiated agreements than was the case in 1941. That should be a cause for great satisfaction. The inflation control aspects of defense preparation do call, however, for a limitation upon the latitude of organized labor and of management as respects the wage terms of their labor agreement. 18 Taylor hoped the prohibitions would be self-imposed and the limited no-strike, no-lockout policy established by agreement in the collective bargaining tradition. T A Y L O R S CONCERN W I T H I M P A C T O F W A R T I M E I N F L A T I O N ON R E A L W A G E S

As Taylor became more perceptive of his new responsibilities with wage stabilization boards, he became intensely concerned with the mounting inflationary pressures and the desire for self-protection that had unleashed a scramble for more goods, higher prices, greater profits, and higher wages. He felt that the real wages of many persons had suffered and that in the scramble these persons were being trampled on. He said that he was thinking of the forty percent or more of all wage earners who had received no increase at all since 1948 or 1949. "To them inflation has already been a mighty harsh experience as it's been for those living on fixed incomes." 19 Taylor showed that he was not simply a labor arbitrator and an economist, but a man "with a 17. Ibid. 18. Ibid., p. 8. 19. "Wage Stabilization and Defense Economy," speech before a meeting of the Tool and Die Manufacturers Association, Detroit, 20 February 1951, p. 1, personal manuscript.

Government Regulation of Wages heart." Concerning the essential elements of a sound program of counterinflation, he said, "Those moves necessary are rigid restrictions upon personal and business credit; substantially higher taxes, a decrease in the nondefense items of the federal budget, greater savings and greater productivity." 20 He observed that the looseness or tightness of the direct wage and price control would be dependent on what was being done to bring about a better relationship between purchasing power and the supply of goods and services in the civilian market Large amounts of military supplies were being produced, with a subsequent increase in consumer purchasing power, but no balancing supply of consumer goods was available. Said Taylor, "We can't have our tanks and eat them too." CONCERN OVER WEAKENING OF W S B TRIPARTITTSM

Taylor became upset over the withdrawal of labor members from the Wage Stabilization Board in 1951. He saw a danger developing—that without a true tripartite board the only remaining alternative would be govemmentally imposed control of wages ultimately without price controls—and he noted the opportunity to continue a national wage policy only if it were grounded upon voluntarism and a tripartite board. TAYLOR THE PRICE AND WAGE ECONOMIST

Taylor saw the possibilities of controlling or not controlling inflation during the Korean War as providing the United States with only three alternatives: ( 1 ) runaway inflation, ( 2 ) controlled inflation, and ( 3 ) stabilization. He saw stabilization as the holding together of wages and prices close to the levels obtained after more normal relationships within the range and price structures had been established. While he considered controlled inflation with halfway measures better than runaway inflation, he certainly did not deem it as desirable as stabilization. This attitude made him very critical of Nixon's control programs in the years of the Nixon presidency. He also noted that runaway inflation since 1950 and the scramble to get set against the restriction of impending defense programs had brought about many distortions in the established wage relationships. These had to be corrected to restore a relatively well-balanced wage rate structure for the country. Taylor was "blue" about the few previous rounds of wage and price increases. "When the fifth round is completed," said Taylor, "then the next question will emerge: Can 20. Ibid., p. 2.

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wages be stabilized at the new level or will they have to be permitted to rise to new and higher levels because of the inadequacy of the measures taken to control inflation at its source? Will a 'sixth round' be necessary?"21 His position in the Korean War was quite different from that in World War II; now he appeared to be trying to balance wages with prices. He admitted that the cost of living might continue to rise and, if so, wage rates "can't be held at current levels."-2 He now tried to counter the argument that wage increases given in answer to cost-ofliving increases would create new inflationary pressures. While agreeing that it was a complex problem, he said firmly, "Let there be no mistaken notion that there could long be any freeze of wages or of the prices prevailing at some particular time. A freeze indicates a lifeless and inert form. We need life and activity. Wages are a share of national income but their movement and changes and their differential relationships are incident to the performance of highly essential economic functions."23 Taylor made it clear why he wanted a fairly fluid system rather than a freeze during the Korean War. He pointed out that wage settlements consummated through 1950 did not reflect current conditions. Early settlements were for only 5 or 6 cents an hour, later settlements for 15 to 22 cents an hour in anticipation of cost-of-living increases ahead. He saw the established and workable wage relationships between industries and plants as being disturbed by these various wage settlements made in 1950. He saw again that forty percent of all wage earners had received no wage increases in 1950. The reader can conclude that it was a hell of a mess. Included in this group were unionized employees and plants where business had been bad but had become good since the Korean outbreak. For this reason, to these groups a price freeze and a wage freeze would add up to a lasting and serious impairment of living standards. These were citizens who most anxiously awaited a price rollback rather than a freeze. Taylor believed that the first step towards a wage program had to deal with the "time-lag" wage adjustments. He felt that some permissible increases in wages from a specified date had to be provided in order to allow laggards to catch up if they could. He recommended a ten percent allowance to take care of the workers who were in the worst plight. He saw the ten percent allowance as appearing generous if looked upon solely as a measure for completing the "fifth round." 21. Ibid. 22. Ibid., p. 8. 23. Ibid.

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Taylor noted sadly that "the proposed 10% allowance was the immediate cause of the withdrawal of the labor members from the Wage Stabilization Board." 24 WSB BETTER WITH WAGE CONTROL THAN WITH STRIKES AND OTHER DISPUTES

Using the general constitutional authority, President Truman adopted a policy to deal with the labor disputes that seriously threatened to jeopardize the defense program. The president could certify a serious dispute to the Wage Stabilization Board, which was then responsible for making recommendations on how the issues should be settled. The board had no subpoena power, and although the recommendations could result in strong public pressure for acceptance by the parties, they could also be rejected. No one could properly call this "compulsory arbitration." There was no compulsion beyond that of public opinion for either party to participate in the procedure. The WSB did not want to be involved unless production went on at the same time. One of the earliest cases of this type, certified to the board, involved a great part of the copper mining industry along with the Mine, Mill and Smelter Workers Union. The union refused to call off its strike while the board examined the merits of the dispute. An injunction under the Taft-Hartley Act was immediately obtained by the executive branch of government. THE NIXON ADMINISTRATION AND WAGE AND PRICE CONTROLS

It has been pointed out that wage-price controls in both World War II and the Korean Conflict ran into similar problems but were not always able to provide the same solution. The Korean Conflict was a war, although undeclared; but the elements of national patriotism that brought labor, management, and the citizens together in a common effort during World War II were lacking in the Korean period. When the Nixon Administration introduced Phase I in August 1971, there was no war, but it was obvious that something had to be attempted to counter the trends of larger and larger wage adjustment rounds. By the summer of 1971, labor and the general citizenry were up in arms about the problem of climbing prices. Unemployment was on the increase. The strength of the American dollar was declining as the U.S. balance of payments deficits worsened. 2 4 . Ibid., p. 11.

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On 15 August 1971, President Nixon, who since his employment in the Office of Price Administration in World War II had been against the idea of a government bureaucracy devoted to wage-price control, nevertheless agreed to a number of drastic economic measures. These included suspending the convertibility of the dollar into gold, setting up some duties on specific imports, and freezing prices, wages and rents for ninety days. Phase I lasted from August to November 1971 and amounted to a three-month freeze on almost all wages and prices. Nixon carried out Phase I with a minimal staff, and the psychological shock was sufficiently effective without needing much in the way of policing machinery. Phase II, which lasted from 14 November 1971 to 11 January 1973, was a relatively inflexible program, quite unlike the guideline policies and procedures devised by the Taylor boards during wartime. The Phase II program restrained wage increases, including fringe benefits, to a 6.2 percent level. The government pretty much coerced corporations to limit their profit margins to what had been their upper-range experience for the preceding three years. Phase III lasted from 12 January to 13 June 1973 and was a directed effort throughout to decontrol the economy. It moved towards more flexibility and made it possible for operation on a somewhat selfadministering basis. There seemed to be a minimum of preplanning with respect to Nixonian controls, and business and labor were jerked from one set of regulations to another in short bursts. The sharp increase in the inflation rate (8.3 percent), especially in food prices (20.3 percent) and the increase in wholesale prices (24.4 percent) influenced President Nixon to terminate the program on 13 June 1973 and to introduce a new overall freeze. The new freeze lasted from 13 June to 11 August 1973 and was only a "holding section," while the administration feverishly sought new solutions to inflation. Phase IV, which began on 12 August 1973, was not much different from the rules promulgated for Phase III. Phase IV actually began to grant exemptions to a number of critical industries. Phase IV was pretty much phased out by the beginning of 1974. The CPI increase in Phase IV was even higher (9.6 percent) than in Phase III (8.3 percent) and in Phase II (3.3 percent). Much of the price spiral in Phase IV was the result of the oil price rise effected by the Arab combine. This had made it difficult for labor economists to assess the effectiveness of the Nixon control program. During the Nixon control period, much of the governmental direction was an acknowledgment of the Phillips curve principle. This

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theory believes that the inflation rate depends upon the unemployment rate or the capacity utilization rate. This represented a trade-off between inflation and unemployment which was calculated by economists to be a price increase of one percent when unemployment is five percent based on the ratios in the fifties and early sixties. In 1974 the inflation rate was more like ten percent, while the unemployment rate was about five percent. The same inconsistencies hold true at this writing (seven percent unemployment and seven percent inflation as of January 1979). The Nixon target during the controls period was to lick the adverse shift in the Phillips curve, resulting from the cost-push or inflationary expectations. 25 How was the Nixon wage and price control program administered? Responsibility for price controls was delegated to a seven-member commission composed wholly of public members. A fifteen-member tripartite pay board consisted of representatives of labor, business, and the public and was patterned after the Taylor boards. Unlike that of World War II, this board experienced much dissension, and it was partly for this reason and partly because of his lack of willingness to work with President Nixon that George Taylor stayed out of the wage control picture during these years. When Taylor had been chairman of the Taft-Hartley board overseeing the 1959 steel strike and appeared through his mediatory role to have a settlement of the dispute near at hand, the then Vice-President Nixon had intervened and took over the details of a much more expensive settlement. President Nixon visualized this deed as leading him into the presidency after the retirement of President Eisenhower. Taylor never forgot this and never offered his assistance to Mr. Nixon. The pay board was faced by a need to decide whether or not collective-bargaining wage adjustments already negotiated were to go into effect during the ninety-day freeze. The board ruled in November 1971 against permitting these retroactive adjustments. The five labor members were furious and dissented. Congress, by statute in December 1971, then made most of these retroactive payments possible. Generally, the labor members of the board were outvoted by a combination of business and public members. On 22 March 1972 all the labor members of the board except Nixon's good friend, Frank Fitzsimmons, president of the Teamsters' Union, quit. President Meany of the AFL-CIO criticized the stabilization program as being pro-business, and finally Nixon, in defense, restructured 25. Michael L. Wächter, "Did Wage-Price Wharton Quarterly 8 (Summer-Fall 1974).

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the board to a new total of seven members—five public, one business, and one labor. In review of this wage-stabilization program it appears that many of the criticisms of the board and its activities were deserved. At times the board did in fact appear political, and often made exceptions to its guidelines when threatened by possible strike action of major national unions. Furthermore, while most unions were struggling with the pay board's sometimes stringent guidelines, the construction unions appeared to be receiving more liberal treatment under a separate Construction Industry Stabilization Committee. The program sorely missed the interest and participation of Dr. George W. Taylor, who sat this one out on the sidelines after having been the father of wage stabilization both in World War II and during the Korean Conflict. CONCLUSIONS

The wage policies of the United States have been greatly affected by the wage-stabilization programs of World War II and the Korean Conflict. From the days of the Little Steel formula onward to the Nixon presidency, Taylor supplied the rationalization for these major programs, the leadership, and the team approach of gifted individuals and administrators. The criteria used by Taylor have passed into the everyday bargaining patterns of today's collective-bargaining system. Such terms as "tandem," "escalator clause," "productivity improvement," "interplant inequity," "ability to pay" are now part of the literature. Taylor's wage-control staff became the great labor academicians of the fifties through the seventies and the great arbitrators of our time. Little was accomplished, however, during the Nixon period of wage control that was creative, original, or meaningful.

7 George Taylor's Continuing Concern for the Public Interest BERNARD

INGSTER

Underpinning George Taylor's specific recommendations for the conduct of labor-management relations in both the private and public sectors was an abiding concern for the public interest, which he defined, to put it most simply, as the kind of society desired by most of those who live in it. Taylor did not believe he, or any individual, could define the kind of society Americans should have; he believed Americans did that—and wanted to do that—for themselves. He believed his own role was to understand the nature of a representative democracy, to look at its wellsprings and study its institutions, and to devise solutions to fundamental economic problems—particularly those involving employer-employee relationships—that would bolster the societal precepts implied in a nation such as ours. For George Taylor, collective bargaining was a social process that was essential for the preservation and extension of the economic and political structures of American life. Americans had long ago rejected the idea of living under a sovereign having total discretion over the lives of individual subjects. Instead, they had chosen to live in a representative democracy with governmental institutions designed to diffuse power, to provide checks and balances among powerful forces, and to allow participation of citizens in the policy making that affects their lives. The power is diffused through the levels of government: local, state, and federal. The checks and balances are provided by the countervailing powers of the executive, legislative, and judicial branches of government. The

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participation of citizens is assured through election of their representatives. Taylor sought to duplicate these forms of democratic life in the labor-management world. His lifelong support of the formation

of

unions is best understood in that light. In one sense, the unions can be seen as a form of countervailing power. T h e growth of the corporation which increased the power of the employer needed to be balanced with an organizational form that increased the power of the worker. Therefore, Taylor believed that the Wagner Act, which encouraged the formation of this countervailing power, was clearly in the public interest. Significantly, he called the union the "substitution of the twoparty system for the one-party system in labor relations."' A union could be seen also as a mechanism for achieving both representation and diffused power. Unions operated to resolve conflicts within their memberships and also to represent the views of the membership at high levels of management. In doing this, unions—as well as corporations, educational institutions, and professional organizations —are "private governments," Taylor said, that have been "deliberately created by men exercising their freedom of association."- T h e private governments might all have their own rules and regulations to which individuals must conform, but their main function is to do for individuals what a single person cannot do for himself. These organizations, he believed, provide a middle tier of institutions that enable a society to cope with change. Taylor felt that if all responsibility for meeting necessary change were assigned either to government or to the naked, isolated individual, society would fail. He emphasized that change was to be expected—the goals of society at one time might not be the goals of society at another. T h e individualism of Adam Smith was not considered antagonistic to the American Dream in the eighteenth century and into the nineteenth, when workers still contracted their individual labor to individual employers. But the rise of the corporation with its congregate power presented society a new problem to solve. And Americans want their problems solved in an environment that is both stable and peaceful. Taylor believed that stability of a political democracy was dependent on the capacity of the people to create and maintain

institutional

forms for ctealing with particular equity claims in an orderly manner, 1. "The Role of Labor Unions," Vital Speeches of the Day, 1 Stay 1962, p. 437. 2. "Restraint in the Public Interest," speech delivered at University of California, Berkeley, 27 May 1964.

Taylor's Concern for the Public Interest while avoiding coercion by special interests. Americans did this through the political process and through the passage of laws. George Taylor always emphasized the concept of a voluntary meeting of minds because the American political system emphasizes this. Decisions are to be made only after legislative debate and through compromise. The will of the majority is to prevail, but that will must be exercised in a way that is not so offensive to the minority that widespread disagreement and societal violence or chaos might ensue. Taylor pointed out that the will of the majority did not necessarily have to "make sense" to every mind. "When we are in the minority," he said, we "cannot always understand why the majority wills what it does. Indeed, the choices made under the democratic process of government are sometimes as startling as consumer choices made in the free markets where goods and services are subject to direct picking and choosing."3 Taylor had a favorite story he told to illustrate how the public interest might be manifested. It tells of a small municipality in New York State in which the mayor refused to include in his budget a recommendation for the purchase of a water tower for the town's fire department. The department wanted a water tower—called a snorkel —capable of dousing a fire in a building ten stories high, but the mayor pointed out that the tallest building in town was only five stories high. The conflict was resolved by a referendum. The people of the town voted for the high-rise snorkel. If the fire department thought this piece of equipment would enhance its image, that was what the voters wanted. Such a result should not surprise anyone, Taylor- commented, because we all have chosen snorkels of one kind or another in our time. The important thing to remember about the story is that the people in that community at that time wanted that solution and, since it was a solution which could not be said to lead to chaos or decay, it was clearly the "right" one.4 The same could be said of solutions in labormanagement relations. If those solutions satisfied the parties involved and were not offensive to the national welfare, then those were the "right" solutions, in Taylor's view. Another favorite Taylor story emphasized how vital he felt it is that agreements in the public interest be achieved. This story told of an ancient people, the Sumerians, who had turned the desert they lived in into a garden spot by building a series of irrigation ditches. But they 3.'"jPublic Employment: Strikes or Procedures?" Industrial tions Review 20 (July 1967): 619. 4. Ibid., pp. 619-20.

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began to fight about the time each citizen had to give to the upkeep of the dikes and about how much water each could take. Finally, in a burst of righteous indignation, they tore down the dikes. That was the end of the Sumerian civilization.' Taylor believed that the failure to agree, the failure to listen to and sometimes to accommodate the other person's point of view would mean the end of any civilization, including our own. Thus, it is in the interest of survival itself that our society must constantly seek ways of renewing its institutions, of ensuring the viability of its countervailing forces, of accommodating various segments with valid claims to equity, of finding new ways to reach agreement that will avoid chaos and, ultimately, decline. Taylor liked to say that the public interest required constant "social inventiveness."" Problems would continue to arise. New solutions had to be found. The Wagner Act was a solution to a problem in the public interest not only because it encouraged the formation of unions as countervailing powers, but because it helped them form in a peaceful way. Before passage of the act, the question of whether a union received recognition was answered strictly in terms of relative power. A strong union was able to win recognition, a strong management to reject it. And violence was often an outcome of proving which was stronger. The situation, said Taylor, had "some similarity to the instability associated with the succession of governments by coup d'etat in what we used to call under-developed nations." 7 Passage of the Wagner Act, which ended years of organizational strikes by providing for representation elections, may have brought forth new sets of questions, said Taylor, but it served the public interest by providing a way of dealing with equity claims in an orderly manner. Similarly, Taylor believed that other legislation, viewed as "prolabor," served the public interest in the same way. He wrote: As a nation, we have become increasingly concerned . . . about effecting a fair and equitable balance between the conflicting goals of efficiency in production and preservation of human values. The invisible hand of the market place did not provide compensation for men injured on the job, wages as a matter of right for men out of work, pensions for retired workers, or freedom from unjustified discharges. Much of the strength of this country has 5. "Strikes in Public Employment," Good Government 85 (Spring 1 9 6 8 ) : 9. 6. "A Liberal Education in the Computer Age," The Pennsylvania Gazette 61 (October 1 9 6 3 ) : 20. 7. " T h e Public Interest—Variations on an Old Theme," speech delivered at National Academy of Arbitrators, 29 January 1965, pp. 5 - 6 .

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derived from a strong drive for efficiency in competition moderated by an inherent compassion in the utilization of one factor of production—labor. Here is the really revolutionary idea of the past century. By laws, and the checks and balances of collective bargaining, the accommodation between conflicting objectives is effected. Human values have been conserved in our time to an extent unparallelled in all history. And we must remember that the failure of people to achieve personal objectives has, in other countries, resulted in political upheaval.s If American democracy was to survive, this kind of compromise and accommodation was required. In every segment of our national life, care had to be taken to ensure checks and balances to power. "Power surely has constructive uses," said Taylor, "but in our kind of society they do not include a destruction of the basic rights and equities of others. Economic might does not always make for economic right."0 The guiding principle of George Taylor's life was, of course, "our kind of society." Understanding that, it is easy to understand how he conceived those social mechanisms that would balance power, avoid compulsion (which is a by-product of uneven power), and bring about voluntary agreement within the framework of the public interest. It is easy to understand why he would favor the Wagner Act, but not TaftHartley; would favor fact-finding, but not compulsory arbitration. (He called the latter "unthinkable" in a democratic society.) But inventing such mechanisms is never easy. Two of the most difficult "public interest" challenges in Taylor's career, he believed, were in the areas of trying to interpose issues of importance to the national welfare into private collective-bargaining negotiations and ensuring that the public interest was served in labor relations in the public sector. Taylor felt he had made contributions to the solution of each, but both were far from being "solved." A discussion of Taylor's views in these two areas will further illustrate his concerns with the public interest.

Private Negotiations and the Public Interest Taylor believed that simply providing a means for labor and management to resolve their differences in a peaceful manner had been a major accomplishment in the public interest. However, he also real8. "The Role of Labor Unions," p. 435. 9. "Impasse Procedures—The Finality Question," speech delivered at Governor's Conference on Public Employment Relations, New York City, 15 October 1968, p. 3.

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ized that sometimes those decisions arrived at peacefully did not always serve wider public interests and, in fact, were sometimes antagonistic to them. The public increasingly saw the national welfare as being concerned not only with avoiding violence and bitter strikes, but also with such issues as avoiding inflation, depression, or an unfavorable balance of trade. Taylor worried that if the private parties to collective bargaining did not in some way incorporate this public interest in their negotiations, the government might be forced to greater involvement in their decisions. This was not a satisfactory result to someone dedicated to diffusion of power, to countervailing forces, and to the concept of encouraging a voluntary meeting of minds. But Taylor said again and again that management and labor could no longer concern themselves with only their own interests. 10 He did not believe he had the answer to the problem. He found most suggestions—some of them still being made today—lacking in some way. One popular form used by several modern U.S. presidents was termed by Taylor: "The exhortation." The president simply calls upon labor and management representatives involved in what is perceived to be a "public emergency dispute" to voluntarily recognize their overriding public responsibilities by settling their differences without a work stoppage or inflationary effect. 11 But simply to call for restraint, Taylor believed, did not answer the vital questions: How much restraint? What relative degree of wage determination vs. price determination? He felt more questions would be raised than answered by exhortation. 12 The only advantage such calls for restraint might have, in Taylor's view, is their relative acceptability to private interests, since they can so freely interpret the calls. And that, he felt, was not much of an advantage. Although he would not unduly disparage the possible indirect benefits of these pleadings, Taylor believed the effects could be moderate at best. He felt that vague calls for labor and management to worry about the "public interest" did not give either side anything firm enough to lean on. A union leader knows that if he or she foregoes an achievable wage increase—justifiable in an individual company or industry context—on the ground that it might contribute to a better balance of trade, the union members might well reject the agreement and the labor leader. The balance-of-trade problem may be as remote as the moon to a union member with a personal bank balance problem. 10. " T h e Role of Labor Unions," pp. 4 3 4 - 3 5 . 11. "Restraint in the Public Interest," p. 2. 12. " T h e Role of Labor Unions," p. 437.

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And so the union leader is likely to argue that since performance on the job is directly related to acceptable employment terms, the union is protecting the public interest by improving the workers' wages. And, by the same token, if a destructive proxy fight might be avoided, a company management will not refrain from increasing prices, if that is not only possible but also deemed essential for the sound operation of its business, even though the higher prices might adversely affect the Consumer Price Index. Management can claim that it exercised restraint in the amount of the increase.13 Taylor did not believe that a call for a more specific restraint would be any more effective than a call for a vague one. The problem with national guidelines and guideposts is that their applicability is stressed for some industries and not others. Following the guideposts might require a company with a pricing policy lower than the national trend to raise its prices to accommodate the wage guideposts, but another industry might have to lower prices to distribute the cost savings it would make under the guideposts. It is unreasonable, thought Taylor, to expect business thus to subordinate the pressures of the marketplace. The adverse economic consequences of such subordination have not been fully explored, he felt. One "magic number" also misses the point, thought Taylor, because it can be used to rationalize advocacy positions. A union leader will tend to concentrate on arguments showing that the equitable considerations referred to in the guidepost number entitle his members to receive a greater average level of increase, while management will try to prove that its employment costs should increase by less than average. Taylor claimed that because of guideposts, the differences to be bridged in collective bargaining ended up wider than they might otherwise have been. Guideposts on a microeconomic basis could be meaningful at a bargaining table, however, he believed. He felt such guides should be developed through the cooperative endeavor of representatives of the public and private interests. But he felt national guideposts did not hold much promise.14 Another popular suggestion for bringing wage and price considerations in the private sector in consonance with the public interest has been to reduce the size and thus, presumably, the power of unions. This particular viewpoint holds that "big labor," by exacting "unwarranted" wage increases and imposing "inefficient" conditions of work, is unilaterally responsible for inflation that threatens the national wel13. "Restraint in the Public Interest," p. 3. 14. "The Role of Labor Unions," pp. 438-39.

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fare. Taylor rejected this argument. He admitted that he shared some concern about the degree of power possessed by some unions and the manner in which they exercised that power, but he felt that talking about "monopoly power" of unions did not aid in any rational analysis of problems. Union power adverse to the public interest could be a concomitant of smallness as well as bigness, he demonstrated. Fragmented bargaining in the maritime industry, the airline industry, and the newspaper industry had given rise to public emergency disputes of great concern to the public. It did not necessarily follow, he argued, that bargaining on a local or fragmented basis would automatically bring about more wage restraint than bargaining on a broader basis. Taylor rejected all antiunion arguments. He felt that the "unions are too big" campaigns and the "right to work" campaigns merely obscured the real problems involving the public interest. He felt that an unfortunate consequence of such campaigns was an increase in tensions between union and management representatives at a time when the public interest, as he saw it, required even greater understanding and cooperation between them. 15 Taylor felt that the answer, if it were to be found, had to be sought in some mechanism that incorporated greater cooperation and understanding. He cited as a positive example President Kennedy's appointment of the Advisory Committee on Labor Management Policy. This committee was viewed by some as a potential public intruder in private affairs. And there was some skepticism about the willingness or ability of its labor, management, and public representatives to agree on anything. However, Taylor found this tripartite committee of public, labor, and management representatives valuable indeed. Its reports on automation, collective bargaining, foreign competition, and fiscal and monetary policy reflected, he believed, a notable meeting of minds. He did not claim that the committee developed any "basic ideas" for bridging the gap between governmental and private functions. He said merely that wide areas of agreement were found, that considerable common understandings were achieved by talking things over, and that these understandings were valuable to those at the bargaining tables. 16 Another example of finding a way to insert the public interest into private labor-management negotiations cited by Taylor was one in which he took part. This was the 1960 negotiations between Kaiser Steel and the steelworkers union. Labor and management voluntarily agreed to form a 'long range committee" of "public" members to help 15. "Restraint in the Public Interest," pp. 4—6. 16. Ibid., p. 7 .

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for the Public Interest

resolve collective bargaining issues. Taylor was asked to serve as chairman. Members of the committee had no decision-making power. They had a staff relationship to the parties. But Taylor believed that their presence put emphasis on public-interest issues, and he felt that there was a "strong likelihood that the public interest in an increasingly interdependent society would increasingly result in the designation of third parties to participate in collective bargaining."17 He felt this concept was not totally alien to labor or management, since voluntary arbitration of grievances by "outsiders" is almost universal, and both unions and companies already use staff assistants, even outside consultants, in their own operations. Taylor was asked by Iron Age, shortly after the Kaiser settlement, if a third party brought into collective bargaining disputes did not automatically benefit the union side, as some in management had claimed. Taylor replied that this was not so, unless one viewed the very existence of a joint determination process as benefiting the union side, and he acknowledged that some in management had this view. In that interview Taylor made it clear that he was not claiming impartial third-party participation in labor disputes was "the answer," but merely "an answer." It was "an answer" that appealed to Taylor because of its voluntary nature.18 Somehow or other, the public interest had to be given substance in the writing of labor relations contracts, and self-imposed restraints were the preferable way of doing it. Taylor suggested periodic economic reports for both sides in which the national economic situation would be directly related to private economics questions. Another solution, he said, could be public hearings in wage and price determinations. He had hope that the desire to avoid such hearings by itself would induce self-restraint.10 Taylor also felt that the public interest was served in finding ways to solve problems before they reached the crisis stage. He cited as an example of this the procedures developed for dealing with labor disputes at missile and space sites during the 1960s. A labor relations committee consisting of representatives from manufacturing and construction concerns, various labor organizations, contracting agencies, and mediators assigned by the Federal Mediation and Conciliation Service was established at each site. All parties had agreed that uninterrupted missile and space programs were vital to the public interest. 17. 1961, p. 18. 19.

"Should the Public Take Part in Labor Disputes?" Iron Age, 16 March 90. Ibid., pp. 92-93. "New Aims Urged for Labor Talks," New York Times, 1 October 1961.

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They therefore agreed to look to these committees to forecast and arrange for the settlement of disputes before they became acute. The committees intended to use all existing voluntary procedures fully and to devise new procedures where none existed. Because the committees were established, the unions agreed to a no-strike provision. Some wildcat strikes occurred anyway—Taylor indicated that even a neophyte in industrial relations knows that a legislative ban on strikes doesn't eliminate all stoppages—but the procedures worked out by the affected parties did resolve disputes that might ordinarily have been settled by a strike. Taylor believed that this was the indicated course in a representative democracy.20

The Strike and the Public Interest Taylor had always defended the strike in the private sector as consonant with the public interest because it was a means of balancing power in an economic struggle. However, he clearly did not believe that the strike was always consonant with the public interest. He believed it had no place at all in the public sector and a steadily declining role in the private sector. As early as 1948, Taylor said that where a work stoppage would create a public emergency, the use of economic force is, for all practical purposes, "not available to the parties for settling their dispute."21 Such strikes cannot be permitted to run their course, he believed, because they may actually exert more pressure upon the government to intervene than upon the disputants to modify their extreme positions. Therefore, they were not only anticonsumer but anticollective bargaining as well. Taylor believed there were other serious limitations to the use of the strike. Some problems were simply not susceptible to settlement by crisis collective bargaining. Work-rules disputes and adjudications of problems related to the impact of automation were examples he frequently cited. A strike deadline has a "sword of Damocles" effect, he believed, and the rule of reason is hard to introduce under such conditions. With strike deadlines facing the parties, the criterion for settlement usually becomes "What does it take to avoid a strike?" rather than "How can this particular problem be resolved?" Crisis 20. " T h e Role of Labor Unions," p. 437. 21. Speeches delivered at University of California, Berkeley, and University of Wisconsin, 1948. George W . Taylor Papers, University of Pennsylvania Library (looseleaf typed collection of speeches).

Taylor's Concern for the Public Interest

collective bargaining has resulted in long and costly strikes that, unhappily, don't even settle the issues.22 It also has resulted in what Taylor called "public emergency settlements" in which labor and management agree to terms that avoid a work stoppage for them but are deemed inflationary for the economy as a whole. As issues become more complex, Taylor believed, the strike should be viewed as a special-purpose tool, not a general-purpose one. Someday perhaps, he felt, the function now assigned the strike—putting economic pressure on the parties to recede from extreme positions—"will appear no more sensible than bloodletting as an earlier surgical practice." 23 There was historical precedent for deeming strikes in particular situations inimical to the public interest, he pointed out. The first strikes deemed unacceptable were the organizational strikes and, as noted earlier, Taylor felt the Wagner Act provided an alternative—election process—that led to peaceful recognition of unions. Also deemed unacceptable were the grievance strikes, which were replaced, by and large, by voluntary, binding arbitration. Although he continued to believe that the strike in the private sector still served a public interest because it was sometimes the only available device for inducing compromise and agreement and avoiding the less democratic alternative of having the terms of employment dictated by the government, Taylor indicated that he could not be sure that the economic and social costs of the strike will always be viewed as a fair price to pay for adherence to the principles of collective bargaining. In a 1967 speech, Taylor said he was deeply concerned that public confidence in the right to strike was at ebb tide.24 This impelled him, once more, to urge new social inventions. New social inventions were mandatory in the public sector, Taylor believed, because the strike could serve no public interest at all. The public sector was unique, he held. Government is not comparable to industry because it has a civil service system, a totally different budgeting system with a taxation function, and a different management structure. And, most important, it has a different kind of involvement with the public. Public interest in matters of government is of primary importance, Taylor believed. The concern of the public in the negotiation of a teacher contract, for example, is not merely in whether the teachers get a "break" or whether the taxes will rise; the public is equally interested in whether the process of collective bargaining will improve or 22. "Should the Public Take Part in Labor Disputes?" pp. 9 1 - 9 2 . 23. " T h e Role of Labor Unions," p. 437. 24. "Public Employment: Strikes or Procedures?" p. 623.

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decrease the chances of developing an educational program adapted to the needs of a changing world. The public may be willing to accept innovations in teaching, technological change, or programs to foster racial integration, even if these involve loss of seniority rights or some other cost to the school employees. The public interest in public employee matters is not easily defined, because the publics who have a stake in government are diverse and see their interests in different ways. This is the situation to a much greater extent than in the private sector. 25 The objective of collective bargaining, Taylor insisted, was not to provide employees with the means to "write their own ticket," but to provide for their effective participation in the establishment of their terms and conditions of employment. In both the private and public sectors, their interests had to accommodate the needs of society as a whole. But this was more difficult to do in the public sector. Taylor did have one caveat to his no-strikes-in-the-public-sector rule. He felt even here it could be a "special purpose tool" if the work stoppage were an expression of civil protest against patently unfair treatment. 20 A strike in the public sector, Taylor believed, meant that wages would be provided in terms of the ability of public employees to bring the public to its knees. The more vital employees would be the ones to get the greatest share of the budget—the transit workers, the sanitation people, the police. But Taylor believed that society's problems were such that public funds had to be allocated on a more responsible, rational basis. "The lion's share to the lion" may be a rule of some relevance in the private sector, he would say, but not in the public sector, if the representative government we seek to perfect is to be achieved. If a very strong union happens to get a very large increase and if the budget is already made, the only way the public executive may get funds to pay for it is by taking some away from other public demands on the budget. 27 In these circumstances, Taylor would insist on the "free release" of countervailing power. In a democracy, power cannot be the only rule; equities must prevail. As an example of public workers with little economic power, Taylor identified public mental hospital or welfare workers. The public generally would not suffer—in fact, would save money—if they withheld their services for a long while. But, warned Taylor, such distress visited upon the welfare recipients could undermine the society. 25. " T h e Public Interest in Collective Bargaining in E d u c a t i o n " (working p a p e r ) , George W . Taylor Papers, University of Pennsylvania Library, p. 3. 26. Ibid., p. 18. 27. Robert Cogliandro, " T h e Future of L a b o r Relations," Wharton Account 10 (Spring 1 9 7 1 ) : 5 - 6 .

Taylor's Concern

for the Public

Interest

Taylor was also concerned that a public strike, by definition, is intended to inflict hardship on innocent bystanders, including fellow workers, rather than on one who would be regarded in private industry as the "recalcitrant employer." Such strikes could also promote the creation of an unfavorable image of the labor movement as a whole. He feared that this would set in motion a critical reaction which could lead to retaliation through restrictive legislation.28 He lamented the fact that the focusing of attention upon the rightto-strike issue in the public sector in isolation from the totality of problems in government-employee relations had contributed to the lack of purposeful interest in devising acceptable substitutes for the strikes. He felt it also had the effect of limiting or forestalling the extension of full rights of organized employees to participate more effectively in the process of determining the conditions of their employment. Typically, he said, the scope of bargaining was severely limited in the state public employee relations laws that had been enacted by 1972.29 "In some quarters," Taylor said in the last article he wrote, "Compulsory arbitration in the public sector is being touted as the 'way out'." Consistently throughout his life, Taylor felt this was an inappropriate device for a representative democracy. What may seem at first glance a simple answer becomes exceedingly complex when compulsory arbitration is appraised for what it really is: a broad delegation of vital legislative authority to 'outsiders' responsible to no one and not subject to any of the checks and balances which are basic to our form of representative government. At the very least such delegation of authority to outsiders should be limited by the specification of guidelines of one form or another to avoid the possibility that delegation of legislative authority will in practice become abdication of legislative authority.30 In Pennsylvania, he pointed out, awards made by outsiders under the Compulsory Arbitration Act for policemen and fire fighters have been held by the courts to be binding upon the appropriate legislative body. A priority in legislative budget making is thus established by an outsider not elected and not subject to checks and balances. In both public- and private-sector collective bargaining, Taylor was 28. "Interim Report of the Governor's Committee on Public Employee Relations," George W. Taylor, chairman (State of New York, 17 June 1968), p. 20. 29. "Collective Bargaining in the Public Sector." In The Next Twenty-five Years oj Industrial Relations, Gerald G. Somers, ed. (University of Wisconsin: Industrial Relations Research Association Series, 1973), p. 31. 30. Ibid., p. 33.

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more sure of the processes that would not be effective in protecting the public interest than of those that would. He pleaded for a continuous search for new social inventions. The maintenance and enhancement of the strengths of our democratic society has always involved the creation of acceptable and workable balances between conflicting private interests as well as between private interests and the general welfare. We believe that by reasoning together under man-made institutions that permit participation and encourage persuasion, people are willing and able to accommodate as between the duties which alone hold a society together and the freedom to pursue directly self-serving objectives. Our own confrontation with history involves a severe test of the democratic principle to which we are all dedicated. In no areas, I believe is the test more exacting than in the labor management relationship.31

3 1 . " R e s t r a i n t in the P u b l i c I n t e r e s t , " p. 8.

8 Taylor's New Private Sector Solutions: The Kaiser Steel Plan EDWARD

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Creation of the Tripartite Long Range Committee at Kaiser Steel, in the 26 October 1959 agreement, can best be understood in light of the historical development of the collective-bargaining relationship in the steel industry. The significance of the steel industry to the economic health of the nation cannot be disputed. The interdependence of steel and other major industries, most notably auto and defense, is clear. Because of this critical role, its collective bargaining has been characterized by third-party intervention.

Collective Bargaining in the Steel Industry— World War 11-1958 During World War II, the activities and labor relations of the steel industry were closely monitored and directed by the National War Labor Board. Subsequently, between 1946 and 1959, the government exerted its influence on the collective-bargaining activities of the industry no fewer than five times. During the 1945-46 negotiations, federal wage and price policies obstructed wage increases that would bring about price increases. When negotiations led to a strike vote, a fact-finding panel was established by President Truman to investigate. The federal blessing was

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conferred upon a wage increase, and it was implied that a subsequent price increase would be sanctioned. Management held out, and a strike ensued. President Truman interceded to propose settlement terms that suggested both price and wage increases, and upon this proposal a settlement was built. Similar actions were employed to resolve a 1949 strike. Three years later, during the Korean War, a strike appeared imminent. President Truman acted once again, and referred the dispute to the tripartite Wage Stabilization Board. When a solution was not reached, he ordered seizure of the industry—an act shortly reversed by the Supreme Court. As the strike began, Congress suggested the use of a Taft-Hartley injunction. Truman opted for the exercise of informal influence, including the "suggestion" of arbitration. In 1955 the pattern of industry-wide bargaining was solidified, and 1956 negotiations found the industry pushing for contracts of longer duration. A strike materialized, and again federal influence was exerted. This time, it came in the form of conferences held by federal mediators. When these sessions proved fruitless, behind-the-scenes pressure was employed by the government. A three-year contract was reached.

1959 Steel

Negotiations

The critical 1959 negotiations opened with the parties concerned with inflation and unemployment. Initially, a strike was not anticipated, but a seemingly innocent proposal by management brought the workers up in arms. The celebrated "2B clause" (maintenance of work rules) was challenged by management as the steel companies sought greater freedom to improve efficiency on the local plant level. As tensions rose, President Eisenhower requested, and was granted, a fifteen-day extension. Vice-President Nixon met with labor and industry leaders, but to no avail. On 15 July the 1959 strike began. Approximately three months later, after considerable public outcry, a presidential Board of Inquiry led by George Taylor was established. Various forces pressed throughout for the use of arbitration to resolve the dispute. On 19 October 1959, with no resolution of the situation in sight, President Eisenhower implemented a Taft-Hartley injunction to end the 116-day strike. To the dismay of the union, the Supreme Court upheld the injunction, and the workers returned to work. Kaiser Steel withdrew from the "big steel" industrial committee and negotiated its own settlement. The remainder of the industry labored until 8 December to construct an agreement.

Private Sector Solutions: The Kaiser Steel Plan

It is obvious from these historical highlights of collective bargaining in the steel industry that the relationship was painfully built and repeatedly tested by turbulent negotiations and government interference. However, the 1959 negotiations appear to have been a catalyst which brought Kaiser and the union to consider searching for better ways to resolve common concerns. They shared a feeling that repeated intervention by government was a serious threat to the integrity and operation of the collective-bargaining process. The anticipation of this interference placed limitations on the costs of a strike and disturbed the balance of economic power upon which their relationship was built. There was a sentiment that each side, expecting intervention, became rigid in their attitudes and demands to avoid losing ground which would be irretrievable after the government became involved.

Steel Negotiations Leading to the Kaiser Plan The severity of government involvement ranged from "jawboning" to attempted seizure of the industry, and the repeated suggestion of arbitration as a means of resolution frightened both management and labor. They viewed the strike as an integral part of the bargaining process, and felt protection of this right was the key to maintaining industrial self-government. There was fear that if a means of preventing a repetition of the 1959 conflict was not found, the government would intercede with some form of restrictive legislation, thereby impairing the rights of private enterprise and organized labor. The search for a better way to resolve difficulties and protect these rights was predicated upon a belief that the best way to keep government out was to develop private agreement-making machinery to make government intervention unnecessary. The intent was to improve collective bargaining, not replace it, and to find some way of avoiding economic power plays, not outlaw them. In essence, there had developed a shared desire to seek a long-range approach to industrial peace through an appeal to rationality. Other influences may have served to make both union and Kaiser management amenable to such a joint pursuit. In the late fifties, foreign steel producers had begun to make inroads on the U.S. market. Today the steel industry is badly weakened because of the import gains of the fifties. The 1951 strike provided the foreign concerns with an ideal opportunity to develop relationships with American customers. This was a threat to both labor and management. Erosion of the domestic market implied dire consequences for the profits of the American producers and the employment of domestic workers. Future strikes

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would provide even greater opportunity for foreign invasion of the U.S. market. In addition, it had become common practice for customers to begin stockpiling steel as negotiations approached, thereby hedging against the possibility of a strike. This tendency served to intensify the cyclical nature of the industry. Capacity production required overtime of the workers, and they were able to build financial reserves to carry them through a short strike. Overtime costs strained the resources of the producers, and backlogs of orders reinforced the tendency of users to begin stockpiling early. As customers accumulated reserves, orders dropped off. If a strike did follow, both management and labor economic incentives to settle were lessened. If a strike was avoided, the result was idle plant capacity and layoffs. Thus it was in the interests of both management and labor to find some way to reassure the public that strike activity was not necessarily an automatic consequence of steel negotiations. NEED TO I M P R O V E TECHNOLOGY AND PRODUCTIVITY

A further concern in the industry, requiring a joint effort by management and labor, was management's desire to implement technological change and improve operating efficiency. It began in 1956, when the producers sought longer contracts to protect themselves from interruptions in production as they expanded plant capacity. In 1959, the "2B issue" arose out of a desire to improve plant-level efficiency. The future of the industry and its success in holding against foreign competition may have depended upon such technological advances. Yet, such changes connoted a profound impact upon employment. Foreseeing the problems this trend could present in future negotiations, the parties required some means to approach the issue without repeat of the troublesome work stoppages and subsequent government involvement.

Taylor and the Kaiser Long Range Sharing Plan These issues spelled the need for a new approach to the bargaining relationship. Taylor termed the effort a "task of social inventiveness" aimed at developing "a new technique as a substitute for the strike in settling these disputes that have caused so much difficulty." The tripartite committee was comprised of members representing the public, labor, and management. 1 It was envisioned as a rational mechanism to 1. P u b l i c m e m b e r s i n c l u d e d G . W . T a y l o r as c h a i r m a n and J o h n D u n l o p a n d D a v i d C o l e as m e m b e r s . D a v i d M a c D o n a l d , president of U S W A , H e a d e d l a b o r , a n d E d g a r Kaiser h e a d e d M a n a g e m e n t .

Private Sector Solutions: The Kaiser Steel Plan measure and appraise the situations giving rise to difficulties, in an atmosphere free of the pressures of contract negotiations. It was to be a forum for the frank and objective exchange of ideas and information. With the interests of all concerned parties represented, it was hoped that demands for compulsory arbitration would dissolve and other government interference obviated. The interests of the public would be served through the provision of steady employment, freedom from strikes, and security arrangements for employees displaced by technological change. Workers would benefit through these channels as well, in addition to sharing in the fruits of progress. Management could avoid future government intervention which it felt had caused unfavorable and ill-advised settlements, while gaining greater freedom to implement technological advances. Above all, there was pervasive concern by each of the parties for the future of the institution of collective bargaining. There was hope that if the committee were successful in its effort, the success would spill over into the rest of the industry and from there into all of organized labor. Indeed, Taylor and the others involved in the endeavor were seeking a means of revolutionizing collective bargaining and avoiding the costly impact which the economic consequences of strikes brings upon industry, labor, and the public. In many respects, the Kaiser approach was unique, but the atmosphere of the entire industry was charged with a desire to turn aside habitual conflict and discover new means to attack common problems. After the Kaiser Steel Long Range Committee was instituted, labor and management in "Big Steel" created a program designed to improve communications between management and workers. An industry-wide Human Relations Committee was established as an ongoing effort to bring a degree of rationality to the bargaining process. The concerns that led to the establishment of the Kaiser Long Range Committee are, for the most part, echoed in the seven areas of investigation that the committee agreed upon in its initial meeting: 1. The experience and problems which have arisen in Kaiser Steel in connection with technological changes in the past. 2. An evaluation of the operation of the grievance procedures and possible revisions in these procedures so as to overcome weaknesses, to streamline, and to examine new approaches. 3. Possible wider area of communication to employees concerning sales and production plans. 4. The advance dissemination by the company of information to its employees concerning plans for modernizing, automation, and expansion. 5. A review of the incentive methods used in light of the coming technological changes in the industry.

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6. The development of procedures which will operate to prevent strikes. 7. The development of a means of sharing the benefits of economic progress, including provisions for displaced employees.In summary, the Kaiser Long Range Committee was born of long, difficult experience with the traditional steel collective-bargaining relationships. The urgency of its mission was heightened by several threats to the future of the industry. Foreign invasion of the domestic market was a growing concern, a situation which could be exacerbated by future work stoppages. Technological change was needed to improve the efficiency of production, and its introduction was being blocked by fear and distrust between the bargaining parties. The cyclical nature of the industry was being reinforced by stockpiling, as users hedged against anticipated strikes. Above all, government intervention due to the critical nature of the industry was disrupting the bargaining relationship. The ominous possibility that the collective bargaining institution, and consequently the right to industrial selfgovernment, might fall as a result of this intervention, was in the air. T A Y L O R V I E W E D T H E KAISER PLAN AS A SOCIAL UNDERTAKING

It is evident in statements made by Taylor, during various press conferences and interviews, that he envisioned the Kaiser Plan as a broad and significant social undertaking, the import of which extended far beyond the needs of the Kaiser-Steelworkers relationship. This is not to say, however, that he did not feel it was important to prevent the "intrusion" of government into the private labor-management relationship. Moreover, he realized this phenomenon was a symptom of a problem in the modern collective-bargaining institution. He countered the notion that collective bargaining was a static art and foresaw that it would have to continue to adapt to changing environmental demands in order to survive as a functional process. In his opinion, there was a tendency for collective bargaining to be used thoughtlessly. Calling it "crisis collective bargaining," he noted that all too often the intermediate phase of the process—the administration of an agreement during the term of the contract—had broken down. Normal grievance procedures were subject to logjams and manipulation by the parties for purposes other than those for which they were intended; consequently, problems grew and festered, and 2 . G . W . T a y l o r , " C o l l e c t i v e B a r g a i n i n g : N e w A p p r o a c h e s to the P r o b l e m of A c h i e v i n g A g r e e m e n t , " Industrial R e l a t i o n s C o n f e r e n c e , University of M i c h i g a n , 3 0 M a r c h 1 9 6 1 , p. 4 .

Private Sector Solutions: The Kaiser Steel Plan when contract deadlines approached, the task of collective bargaining evolved into an effort to avoid work stoppages rather than to solve the problems. At the same time, Taylor zealously protected the third phase of collective bargaining, the strike. However, he qualified his opinion by describing the strike as a "special purpose tool" as opposed to a "general purpose tool." In an interview for Iron Age in 1961, he cited some of the developments that, in his opinion, required the improvement of collective bargaining: Along with recent economic changes, some emerging problems are not susceptible to settlement by crisis collective bargaining. Work rules and adjustments to the impact of so-called automation are examples. First joint discussions on these issues are often held at negotiations undertaken from behind Maginot Line-like positions to be held at all costs. A strike deadline has a sword of Damocles effect. The rule of reason is hard to introduce.. . . This is crisis collective bargaining. It has resulted in long and costly strikes, which, unhappily, don't even settle the issues. Something is wrong with crisis bargaining. It simply doesn't produce good results.® At one press conference after a meeting of the Long Range Committee, Taylor likened the existing need for further development of the collective-bargaining institution to that of a previous period of its history. Some of lis think that the institution of collective bargaining needs some adjustment to help it grapple with new problems that are emerging. In a word, this is the problem of avoiding strikes over the renewal of agreements. It might be compared with the problems that arose some years ago when parties used to have strikes over grievances . . . [from this] emerged arbitration negotiation. And now in labor agreements, after a small start, arbitration of one sort or another is almost universally used in order to make it unnecessary to have strikes during the term of a labor agreement. 4 Thus, with the Kaiser Long Range Committee as a laboratory, Dr. Taylor and his "co-scientists" labored to develop what he termed a "new procedural approach." He saw the experiment as an effort to better an institution he felt was a natural extension of the democratic process, without displacing it, believing they were "seeking to protect the private enterprise system and collective bargaining in order to 3. "Should the Public Take Part in Labor Disputes?" Iron Aue, 16 March 1961, pp. 90-93. 4. Ibid.

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retain in the hands of management and labor—people directly affected by these things—the rights which are theirs under our kind of economy." He declined to brand the Kaiser approach with previously coined terms, stating, "It's not 'mediation' as that has been conceived. It's not 'fact-finding' as that term has been used." Rather, he envisioned this undertaking as a unique approach in which knowledgeable and recognized members of the public became an integral, yet not disruptive, part in the ongoing labor-management relationship. It was important to him that the extent of involvement of the public members be specified by labor and management, and he cautioned that the public members felt their role should revolve around procedural suggestions rather than operations decisions. Some parties say "We don't want outsiders in. They are not informed." As I understand it, the position between the Steelworkers and Kaiser is: "If some outsiders are working with us continually and a difficulty occurs, they are not uninformed outsiders. And if these parties work with us, ice are setting up the terms and basis upon which third parties come along with us. It is not imposed by government. It is something we choose to do by voluntary agreement."5 These attitudes were evident in Taylor's participation in the efforts of the Long Range Committee. The activities of the committee began at what an outsider might consider a sluggish pace. But the minutes of the meetings indicate that there was a concerted effort to nail down which problems could and should be addressed. Naturally, there passed a period during which the parties settled into their new roles and developed mutually acceptable means of investigating and handling the seven areas delineated in their first meeting. Under Taylor's skillful direction, dialog was generally free and frank as they set about their arduous task. The attitudes of management and labor were understandably protective of their respective constituencies, but there was apparently a genuine determination on the part of all concerned to find answers.

Grievance Procedures and Incentives The tasks that apparently required the greatest attention were communication, the grievance procedure, and incentives. Much of the actual study and investigation was done by appointed subcommittees 5 . I b i d . ( I t a l i c s in o r i g i n a l . )

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and centered on the activities of the Kaiser Steel Corporation at Fontana, California. At its second meeting, the committee discussed the history of legalistic arbitration in the steel industry's grievance procedure. A subcommittee was appointed to visit Fontana and investigate; thus, the committee discovered that many of the grievances centered on the incentive plans and that there was a substantial backlog of grievances. The nature of the grievance procedure was cited as a problem, along with its manipulation by management as well as labor. The subcommittee was able to meet with parties on the local level and discuss principles and procedures of grievance settlement. Eventually a new grievance procedure was developed by the local parties which brought the major responsibility for settlement back to the shop floor, and subsequently the backlog and the flow of new grievances were reduced. The matter of communications was handled similarly by another subcommittee. In January 1961, a not too surprising announcement was made. The task of the Long Range Committee was reviewed, and it was recommended that it be officially extended. The committee was invited to participate on a "continuing basis in promoting harmonious labor relations between the parties." It was stipulated that management and labor would meet for collective bargaining no later than sixty days prior to contract expiration. If necessary, the committee would meet thirty days later to review the status of negotiations. They were empowered to ( a ) Determine to take no action or to postpone action until there has been an opportunity for further bargaining; ( b ) Attend the bargaining sessions as observers; ( c ) Engage in mediation efforts, including private consultation with representatives of each of the parties; ( d ) Issue a private report to the parties summarizing the positions of the parties, defining the issues in dispute and making recommendations to the parties; and finally ( e ) Issue a public report, either prior or subsequent to the contract termination date. The Public Members shall not release a public report until such time as the Company and Union have had every responsible opportunity to come to an agreement.® This recommended supplemental agreement was subsequently agreed to by both union and management, and the thrust of the committee was officially extended beyond its original intent of developing a longrange sharing plan. It was a clear statement to government: We are 6. Long Range Sharing Plan—Kaiser Steel Corporation and United workers of America, 16 December 1972, Fontana, California, pp. 4 0 - 4 1 .

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confident that we are able to, and fully intend to take care of our own housekeeping! FONTANA PLANT AND STANDARDS UNDER NEW SHARING PLAN

It was perhaps the long-range sharing plan for the Fontana plant which posed the greatest challenge for all involved. The highly technical questions of what incentives were, what people were paid for, what "fruits" were to be divided, and how they were to be divided took more than two years to be resolved. In December 1962 the committee approved and forwarded a "Report on the Long Range Sharing Plan," in which they felt these questions had been well addressed and fairly solved for all concerned. Several points of this plan merit attention. It was determined that standards would be based on the results obtained in 1961, with different standards created for different products to accommodate changes in production levels and product mix. The standards included factors reflecting labor performance, materials usage, yield movements, and technological changes and were to be adjusted monthly by Bureau of Labor Statistics indices to prevent inflation. To shield the workers against the ill effects of technological change, a plantwide employment reserve was created, as part of the plan, to absorb displaced workers temporarily until permanent reassignments could be made. Also, it was specified that net gains from technological improvements, intended to reduce costs, would be shared. The plan stipulated that incentives would be calculated and paid monthly and that the parties could opt for allocation of a part of this share to be used for improving benefits. The plan was plantwide and covered employees not then participating in individual incentives and those employees who chose to switch from individual incentive to the new plan. The employees' share of the total net dollar gains generated under the plan was 32.5 percent. The plan also specified that any grievances arising from the new incentive program were to be handled in the standard grievance procedure stipulated by the contract. The recommendation indicated that the plarr was to be reviewed annually and could be terminated by either party on any fourth-year anniversary. SHRINKING BONUSES CAUSE TROUBLE

The plan received a favorable vote from labor on 14 January 1963 and was implemented through a carefully planned and executed educational program, including mass meetings and workshops. Initially, the

Private Sector Solutions: The Kaiser Steel Plan

plan was a huge, if costly, success. The steel industry broke out of a slump at the time the plan was effected, and the workers, inspired by their bonuses, went so far as to establish ad hoc committees to propose cost-saving ideas. These grass-roots efforts were heralded as a symbol of success. Other steel companies were fearful that union demands for similar plans would have to be fought; Kaiser paid dearly for its improved relationship with the steel union. Unfortunately, the boom soon ended in the steel industry, and disgruntled employees saw their bonuses shrink. The committee did not back away from the challenge, however, and went into the mills to talk with the workers. New questions and confusion about the operation of the plan surfaced and were met by continued efforts from the committee to make the plan viable. Work had proceeded on developing a plan for the employees of Kaiser's Montebello fabricating plant. This task proved trying, as it involved a completely distinct set of technical factors to be dealt with. The efforts of the committee continued as annual audits, monthly statements, and continued review of the workings of their experiments were effected. The success of the innovative efforts at Kaiser Steel must be considered in light of the broad objectives envisioned by Taylor. The fact that high-level representatives of management and labor were able to meet frequently and talk with each other, not at each other, is commendable in itself. Removing them from the emotion-charged contract bargaining table enabled the committee members to air and discuss ideas that would otherwise have been buried under a pile of negotiable demands. The informed input and guidance of the public members provided an opportunity for labor and management members to consider alternatives to seemingly no-win situations. Moreover, the methodical approach and efforts of all the members provided viable solutions to several intricate and complex problems. Had these been left to compound, as in the past, they could have caused the deterioration of the steel industry collective-bargaining relationship into an eventual regulated utility.

Current Status of the Kaiser Long Range Sharing Plan The sharing plan is still in operation at the Fontana plant. However, it has undergone several modifications and is today considered only a small part of the total incentive package at Kaiser. After the initial years, the novelty of the profit-sharing premise of the plan had worn off, and there were strong inclinations among many Kaiser employees to return to individual incentive plans. To some- degree, this desire

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was responded to, and the company began to return employees to their original incentive plans, with election being made by different units. The result of this was that there became different classifications of employees with respect to incentive coverage: those fully in the profitsharing plan, those who had opted to return to individual incentives, and those who, by virtue of a grandfather clause, never made it into the plan in the first instance. This situation was untenable to the union —individuals working side by side were receiving disparate pay. 1 9 7 2 STRIKE

In 1972 the union struck for forty-four days, in part over this issue, with intent to have everyone placed on the sharing plan. At the same time, individual incentives were to be maintained. Prior to the strike, it developed that Kaiser had the highest incentive labor cost in the industry, with little gain in productivity to offset it. The strike itself may have occurred as a result of a cost-control program instituted by Kaiser during 1971, a year the company netted only $355,000. The year's program had included significant staff reductions and operating personnel cutbacks. The operating personnel cutbacks, though not contrary to the agreements reached in the longrange sharing plan, were contrary to the spirit thereof. In the negotiations following the strike, a guaranteed sharing plan payout was bargained for and received. KAISER SHIFTS F R O M PRODUCTIVITY TO J O B PROTECTION

The major emphasis of the plan had, moreover, gradually begun to shift from productivity to job protection. The terms of the May 1974 agreement are essentially operative today. The long-range sharing plan was not even a topic in the last labor agreement. The new incentive plan provides for an Employment Reserve Obligation, under terms of which, should a technological or methods change in any department directly result in the layoff of employees, the reserve obligation offers the displaced employees, after they exercise their existing seniority rights, an opportunity to maintain employment. These employees perform work assignments throughout various departments, provide vacation replacement, fill temporary vacancies, train on jobs within the department, and avoid overtime whenever possible. Additional employment security provisions include a salary displacement differential for jobs eliminated when the individual is transferred to another job and a short-week benefit income supplement. The in-

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come supplement helps those who lose work following the installation of a technological improvement or new or improved work methods. In effect, they receive pay for forty hours even when working short weeks. PARTS OF KAISER PLAN STILL REMAIN

As for the economic calculations of the sharing plan incentive provisions, the original standard calculations were based on factors reflecting labor performance, materials costs, and yield movements such as "Job Cost Performance," "Shop Overhead Cost Performance," and "Kaiser Tonnage Processed." This has now changed so that only "labor performance" is a relevant factor in measuring improvements. This change was effected in or around 1972, because of inflation and the inability of the industry to increase prices to reflect the increased cost of materials and supplies. The standards and improvements in labor performance are in terms of "appropriately weighted" labor man-hours per finished ton of iron and steel produced and are compared with applicable 1961 standards with adjustments for new products. The original mechanism of calculations under the plan is not changed. TRIPARTITE C O M M I T T E E DISCONTINUED

As concerns the structural operation of the plan, the tripartite committee which included industry members, union members, and public members, is no longer in effect. Rather, the plan is "administered" inhouse with ad-hoc meetings between Kaiser's manager of labor relations and the union representative whenever a problem arises. No public member has sat for several years. What is left of the "plan" is, in effect self-administering.

1973 Steel Productivity Committees Outgrowths of Taylors Ideas T h e effect of the nationwide union program of productivity committees, instituted in 1973 under the term Experimental Negotiating Agreement ( E N A ) , is most interesting in this regard. This concept of committee effort is really a direct outgrowth of the Taylor idea. While the Kaiser Sharing Plan committee is no longer operative—largely because Kaiser's Plan is basically now a mechanical effort—the productivity committees effected through nationwide agreement are alive and well. The ENA calls for two separate bargaining procedures, one for na-

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tional issues and one for local plant-level issues. In the first regard, multi-employer bargaining takes place in the contract expiration year, and if agreement is not reached within a certain period, unresolved issues are submitted to an Impartial Arbitration Panel. For local issues, similar negotiating committees are set up, also with the intent of avoiding strikes and crisis bargaining. It appears that the productivity committees remain in force throughout the year and actually address issues of technological improvement, costs savings, and generally the work environment. These committees do not function as grievance committees, but rather deal with broader issues.

Conclusions George Taylor, John Dunlop, David Cole, and of course Edgar Kaiser and USWA's David MacDonald, had an idea that the "likes" of the 1959 steel strike ought not to be repeated. National bargaining up to 1959 had not provided an environment to reduce tensions and grievances during the life of the contract. Instead, national bargaining always began with thousands of unresolved local grievances that created national disharmony. The Kaiser Steel Long Range Sharing Plan, according to a statement made to the writer by Dr. Marvin Miller, then research director for the United Steelworkers of America, possibly saved the Fontana plant from going under. The plant badly needed an increase in productivity to be competitive to "big steel." In 1959, California's easy job market provided many job opportunities for workers and encouraged a fairly high attrition rate in the state's industry. High rates of labor turnover at Fontana favored the establishment of a plan whereby savings from maintenance or increased productivity with fewer employees was to create outstanding bonuses for the workers remaining. This could not have been possible in Pittsburgh, where attrition rates were low. Kaiser Steel annual reports during the years 1960-69 indicated that 19.4 million dollars were paid out in savings to employees. In the years after 1969 it became apparent from a review of annual reports that the plan was not working out well. Finally, by 1975-77, it appears there is no further mention of the Long Range Sharing Plan. Yet, Taylor and his colleagues on the tripartite committee broke ground which was followed in great part by the human relations committees and the "ENA" committees of the late sixties and the seventies in the steel agreements. Other industries likewise experimented with sharing plans based on the Kaiser program.

9 Taylor's New Public Sector Solutions: The Taylor Law BERNARD

INGSTER

In New York City where, unlike the rest of Americans, a majority of workers get to their jobs by public transit, an absence of subways and buses for thirteen days causes not just complaints but chaos. And so it was in 19Θ6 when 35,000 employees of the city-owned transit system went on strike. The public raged at its elected officials' obvious—and embarrassing—inability to either prevent the strike or curtail it. But the only weapon the officials had at their disposal was the state's Condon-Wadlin Act, which provided severe punishments for public employees who dared to strike. The law required the automatic dismissal of all strikers. It said that fired employees might be rehired, but they would remain on probation for five years and could not receive a pay raise for at least three years. Condon-Wadlin had been in existence since 1947, passed following a teachers' strike in Buffalo. It was rarely invoked, even more rarely enforced, and had never been effective in curbing public employee walkouts.1 The New York transit strike showed why. It was impossible as a practical matter to fire 35,000 employees. And the union made it clear that the strike would not end if the strikers were to be barred for three years from the raises they had won as a result of it. The governor and 1. Sidney H. Schanberg, "State Panel Asks for Replacement of CondonWadlin," New York Times, 8 April 1966, p. 1.

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the legislature capitulated by passing special legislation excusing the transit workers from the provisions of the law. The need for a new law with a new approach was manifest. Governor Nelson Rockefeller had vetoed a proposed new public employee law six months earlier because, like Condon-Wadlin, it relied on a punitive approach. Rockefeller called that "unworkable." 2 Immediately after the transit strike, on 15 January 1966, Rockefeller appointed a Committee on Public Employee Relations with George Taylor as its chairman. 3 Taylor had had a previous involvement in public employee matters in New York. In 1961 he had been chairman of the New York City Board of Education's Advisory Committee on Inquiry, which was studying ways to handle collective bargaining for teachers. Rockefeller charged the committee with responsibility to "make legislative proposals for protecting the public against the disruption of vital public services by illegal strikes, while at the same time protecting the rights of public employees." 4 The committee produced unanimous recommendations on 31 March 1966. The committee and its staff had extensively reviewed the federal law on employee relations, together with studies of its operation; had reviewed public-employee law experience in other states; had reviewed the history of Condon-Wadlin in New York, together with existing grievance procedures for public employees, and had held public hearings. Taylor kept no written memoranda of the deliberations of the committee to indicate the authorship of the specific ideas contained in the completed report, but his references to the ideas indicate they were totally in accord with his philosophy of balancing public interest and private rights. "Public employees have rights," he said, "which should be recognized, but without a roughshod infringement upon the fundamental rights of everybody else. A new balance has to be effected, but in such a way as to permit the employer to carry out his essential functions." 5 The Taylor committee sought ways to change the emphasis in state law from punishing strikers to providing for public employee partici2. Office of Governor of New York, "Veto Message," 22 June 1965. 3. Committee members included, besides Taylor: Frederick H. Harbison, professor of economics, Princeton University; D. Wight Bakke, Sterling Professor of Economics, Yale University; David L. Cole, chairman of the panel committee, American Arbitration Association; and John T. Dunlop, chairman of the Department of Economics, Harvard University. 4. "Final Report of the Governor's Committee on Public Employee Relations," George W . Taylor, chairman (State of New York, 31 March 1966), p. 9. 5. Peter Millones, "Architect of Taylor Law Says Right to Strike Is Overemphasized," New York Times, 16 October 1968.

Public Sector Solutions: The Taylor Law

pation in the establishment of their conditions of employment. The participation was to be in a form of collective bargaining appropriate to the public sector. Taylor was very precise about what he meant by "collective bargaining." In 1961, in the course of his New York City Board of Education assignment, he found that many of the school district employees were not sure whether they wanted collective bargaining and that "one powerful cause" of employee indecision was the fact that they didn't know what collective bargaining was." Taylor prepared a four-page definition to be distributed to the employees. It said in part, Collective bargaining is a way of arriving at decisions about the terms and conditions of employment . . . [It is] a negotiating and agreement-making process and not merely an opportunity to be heard or to be consulted. . . . If an agreement [between a union and the Board of Education] were reached on mutually satisfactory terms, it would bind both the Board and the employees. Even as to matters that might require further action by other governmental authorities, the Board and the employees' representatives could agree on recommendations to be made, which both would be obligated to support. 7 In drawing up recommendations for a state law in 1966, Taylor felt that it would be better to call the "negotiating and agreement-making'' process in the public sector by a new name: "collective negotiations." The term was chosen to emphasize that the public sector had unique characteristics that distinguished it from the private sector and required new procedures for resolving disputes, not including the strike. Taylor once commented ruefully that the term had not caught on— "perhaps to some extent," he said, "because the significance has not been fully understood and to some extent because it was."8 Unlike the private sector, the public sector was characterized by a fragmented management and union situation. In New York there were at least 8,600 employing entities including the state, cities, counties, towns, villages, school districts, public authorities, housing authorities, special districts, city departments, and urban renewal agencies. Many of these entities ran special installations 6. George W. Taylor to Dr. Charles H. Silver, 17 May 1961, George W. Taylor Papers, University of Pennsylvania Library. 7. "Collective Bargaining Is . . . ," George W. Taylor Papers, University of Pennsylvania Library. 8. "Collective Bargaining in the Public Sector," in The Next Twenty-Five Years of Industrial Relations, Gerald G. Somers, ed. (University of Wisconsin: Industrial Relations Research Association Series, 1973), p. 35.

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such as hospitals or prisons in which the employees had a plausible community of interest for separate collective representation. The governmental units varied not only in type but in size. The City of New York had more employees in 1965 than U.S. Steel, General Electric, or Standard Oil of New Jersey. As a direct employer, the State of New York would rank among the fifteen largest enterprises in the nation. And yet, as a witness at the public hearings conducted by the Taylor committee testified, New York also contained a community of just fifty residents with four public employees on the payroll. 0 Further, two basic models of employee organizations existed: the union model, such as the American Federation of Teachers, and the association model, such as the Civil Service Employees Association. The unions tended to define their membership in an exclusive rather than inclusive manner and preferred to bargain directly with an employer. Associations were more inclusive in membership and preferred to affect working conditions by influencing legislation. Both types of organizations were likely to continue in existence under a new public relations act, and any proposed legislation would have to be flexible enough to include them. Whether in a union or an association, a New York employee would also be affected by existing Civil Service regulations. The Civil Service Employees Association believed strongly in the existence of one overall unit representing all employees. The Civil Service proponents predicted that if the employees were organized by occupation or by function, employment terms would inevitably tend to be responsive to specific circumstances. And this could result in "leapfrogging"—that is, terms negotiated by one occupation group would be extended by "compulsive comparison." 10 The differences in points of view among employee groups were evident at the Taylor committee's public hearings as employee group representatives testified on the issue of the right to strike. The Civil Service Employees Association opposed strikes; the fire fighters' union wanted compulsory arbitration rather than the right to strike; the A F L - C I O representative believed all public employees should have the right to strike, except for police and fire fighters; and the sanitation workers, social service workers, and teachers were adamant in wanting the strike as a bargaining tool. The Taylor committee noted particularly that in the public sector, 9. H e a r i n g s b e f o r e the Governor's C o m m i t t e e on P u b l i c E m p l o y e e R e l a t i o n s ( r e m a r k s of R a y m o n d J . C o t h r a n , executive director, N e w York S t a t e C o n f e r e n c e of M a y o r s and O t h e r M u n i c i p a l Officers), 4 M a r c h 1 9 6 6 , p. 2 4 . 10. " F i n a l R e p o r t , " 3 1 M a r c h 1 9 6 6 , p. 1 2 .

Public Sector Solutions: The Taylor Law

when employer representatives and unions engage in collective negotiations, they do not—as would comparable representatives in the private sector—have total authority to reach final agreement. The public sector has not only an executive branch but a legislative branch as well, and it is the legislative branch that has the constitutional functions of budgeting and levying taxes to pay for the cost of a negotiated agreement. The committee felt that while there was a right of public employees to representatives of their own choosing, there was also an obligation on the part of those employees to "recognize that collective negotiations must be conducted within the framework of our democratic political structure out of which the civil service idea has evolved."11 The achievement of this would require careful attention to defining appropriate units for representation, the subject matter for joint negotiation, and the nature of the negotiated agreement. No one rigid procedure could be expected to accomplish this, the committee acknowledged. But there was to be one rigid prohibition to be observed: no strikes. This prohibition was required, in Taylor's view, because of a most important characteristic of the public sector. With few exceptions, the public sector lacks the constraints of the private sector marketplace that facilitate collective bargaining. The right of the employees to strike cannot, in the public sector, be balanced by the right of the employer to lockout or decide to close the enterprise. In a private collective-bargaining situation, Taylor held, both sides are under pressure, one not to lose jobs, the other not to lose production. (Yet, even in the private sector, he felt doubts had been raised about the compatibility with the public interest of unrestrained use of private economic power in the establishment of wages and prices.) Taylor felt the public sector needed negotiations impasse procedures of its own, shaped to the characteristics of the public employer in a democratic society. How then could public employees who cannot use the strike have an assured right to effectively negotiate collectively? In the following sections of this chapter, the Taylor committee's recommendations on this issue will be summarized and then compared with the law passed by the New York legislature. Comment will also be made about the changes in the law that were subsequently recommended by the committee to improve its effectiveness. The 1966 committee recommendations were divided into four sections : one dealing with determination of representation status, one with 11. Ibid.

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resolution of deadlocks, one with legal considerations (mainly the penalties for striking), and one with issues of being prepared for and conducting collective negotiations.

Determination of Representation Status New York State did not have any statutory declaration of the right of public employees to organize, and Taylor believed such a statement was essential. He felt an act establishing this right should also include a statutory means for resolving disputes on representation questions. Employee representative testimony at the committee's public hearings had repeatedly cited the need for an "impartial" board to handle these questions. Some testified that the methods developed at the federal level since 1935 for guaranteeing, certifying, and continuously protecting employee representation status in the private sector could be transferred without amendment to the public sector. Under such a proposal, a single labor relations board would decide all representation questions not already answered by New York State public employeeemployer mutual agreements, would hold elections, and would generally administer a new state law. But Taylor felt such simple duplication would not meet the special requirements of the public sector. The public sector, he held, demanded more flexibility. The great variety of existing arrangements for public-sector collective representation argued against a single pattern of employee participation. The Taylor committee did recommend the establishment of a State Public Employment Relations Board (PERB) empowered to define procedures to encourage effective collective negotiations. It was to be a three-member board with a full-time paid chairman. But the committee also recommended permitting the legislative bodies of local governments to establish their own procedures. These procedures would need to meet criteria established in the law that was to be administered by PERB. PERB would handle disputes arising from state authorities and their employees and also any disputes that local authorities chose to send it rather than handle at the local level. There was precedent for this multi-level approach. A 1963 New York law establishing grievance procedures for local governments applied a state procedure unless a local government adopted its own. During the hearings, Taylor had specifically asked a representative of municipal officials whether most communities had, in fact, opted to establish their own procedures, and he found they had. Taylor believed that the procedures for determining representation

Public Sector Solutions: The Taylor Law status should not be mandated, but the criteria for such a determination should be included in law. Taylor proposed three criteria for use in the determination of an appropriate unit for collective negotiations: First, there had to be a community of interest among employees included in the unit. Taylor felt it was important to avoid the "selfcarving out" of subgroups seeking specific gains for themselves and producing a "crazy quilt" of salary, wage, and benefits programs which would make such matters as internal employee relations and job transfer problems unnecessarily complex. Thus, the appropriate employee unit must have common applicability of the terms of employment. A unit should not be established, the Taylor committee said, "without consideration of the issues with respect to which an organization proposed to negotiate" or "without first exploring the universe of employees in a comprehensive government unit who are assumed to be treated equitably by terms established for all of them." 12 The committee suggested that a unit might be an occupation group, members of a department or installation, all employees in a political unit (town, city, county or state) or functional unit (school district, public authority), all employees for whom a common wage-and-hour structure and similar benefits apply, or all classified civil service employees in a city or the state for whom common entrance requirements, selection procedures, salary grade classifications, and the like apply. It would also be possible for organizations representing employees in small units to form coalitions or joint councils for negotiations of terms that apply to all of them. Community of interest could also apply on a craft or profession basis such as teachers, fire fighters, or police. Taylor pointed out that in the private sector it is automatically assumed that a supervisor should not be in the bargaining unit. In the public sector, Taylor said, this is not so clear. He advised "going slow" on this question. "The effectiveness of the employees' collective influence on the terms of their employment in some areas of public employment may be related more to the community than to the conflict of interests between employees and supervisors."13 Further, in a political process there may be a common interest between supervisors and employees in an appearance before a higher "management authority"— the legislature. Second, a representation status criterion to be considered would be whether the agency with whom the employee group seeks to negotiate has discretion to determine or recommend to another authority condi-

12. Ibid., p. 24. 13. Ibid., p. 25.

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tions of employment for that group. In this matter the public sector differs markedly from the private sector. With private organizations, unless multi-employer bargaining is involved, the employer representatives negotiating a contract tend to have authoritative discretion to conclude an agreement. But this is not the case in public employment. For example, in a city government, the administrators of a department of welfare may negotiate with employees over working rules, use of equipment, discipline, and other issues not involved in expenditure of money, but another stratum of employer may hold the administrative authority with respect to an overall personnel policy for city employees. Such might be the case with a Mayor's OfBce of Administration or a Civil Service Commission. Further, even a mayor's authority to conclude a contract with employee representatives is conditioned by the acceptability by the legislative branch of the costs of the proposed settlement. Such conditions, Taylor said, present both the employee organizations and the public executives with temptations—by the employee organization to claim unit boundaries solely on the basis of what will give it an immediate, pragmatic advantage in organizing efforts, and for the executive to refuse to negotiate on the grounds that certain items are "off limits" for him. Taylor suggests that there be a frank discussion at the time of recognition proceedings between the parties on the issues of the employer-unit areas of authority, appropriate subjects for negotiations, and the development of procedures for carrying joint agreements further to the employer level where meaningful decisions—short of the appropriations to implement them—can, in fact, be made. Such discussions, Taylor believed, would reduce the chances for disputes on unit determinations that might be settled otherwise than by mutual agreement. A third unit determination criterion, according to the Taylor committee, was the capability of the identified employee-employer unit to carry out its fundamental mission of serving the public. Just as private unions and managements must keep in mind the ultimate mission of making a profit and keeping the company in business, the public employee and employer must keep in mind that the public must be served. Therefore, while an employee unit must be appropriate to the employees being represented, issues of administrative orderliness and effectiveness must also be kept in mind on behalf of the public. After the decision is made concerning the appropriate negotiating unit, a problem of which organization the employees wish to have represent them may arise. The resolution of this will, in most circumstances, be solved by agreement, Taylor said. There would be signed

Public Sector Solutions: The Taylor Law

petitions or presentation of membership cards or dues deduction authorizations. But if there is a dispute, an election could be employed. Taylor did not believe it wise to let the employing agency itself decide the issue. The committee also raised the question of whether an employee organization should represent all employees in the unit or merely members of the organization. Taylor dismissed the alternative of proportional representation, with different organizations representing the employees in one category of employment, as highly questionable. (California at that time had adopted a law permitting teachers to have proportional representation, but Taylor felt there hadn't been time to judge that experience.) Exclusive representation would solve a lot of problems, in Taylor's view. The private-sector experience—including the not infrequent desire of employers to give less than permanent status to their obligation to bargain, and the problems of interunion rivalries—was instructive here. Taylor believed exclusive representation had special benefits for the public sector. It would eliminate the possibility that the executives of an agency would play one group of employees off against another. It would eliminate, for a period, interorganization rivalries. It would discourage the "splitting off" of functional groups in the employee organization to "go it on their own." It would simplify and systematize the conduct of employee and personnel relations. It would enhance the organization's ability to serve all the employees in the unit. And most especially, since a no-strike policy had to be achieved in the public interest, it was important to place major responsibilities on an employee organization for the conduct of all employees in the unit. The committee did not definitively argue for exclusivity in the law, however. It concluded: "The Public Employment Relations Board should make the problem of exclusivity as well as unit determination the focus of continuing study looking toward recommendations for legislation. In the meantime, it is probably wise to leave the matter of exclusivity to agreement between the parties and to the fact-finding boards."14 The committee recommended that to be recognized as the representative of employees, an organization should be able to present evidence of its representation claims and also, unique to the public sector, it should affirm that it asserts the right neither to strike nor to assist or participate in a strike. Once recognized, an employee organization would be accorded the right to represent employees in negotiations 14. Ibid., p. 30.

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and settlement of grievances, would have a dues checkoff privilege, and would have unchallenged representation status for up to twentyfour months.

Deadlocks Resolution in Collective Negotiations Taylor believed he could not make several points too strongly; that it was not possible to simply transfer private enterprise collective bargaining into the public sector, that the countervailing forces of the private sector did not exist in the public sector, and that new procedures had to be created to resolve conflict without resorting to strike. He admitted that in the past there had been unilateral and inequitable decisions by government administrators that they justified by wrapping themselves in the cloak of sovereignty. He conceded that both legislative bodies and public administrators have traditionally wanted to retain as much rule-making jurisdiction as they could. But he did not concede that the only way to balance this power was in according public employees the right to strike. Taylor suggested that balance was more likely to be found in widening the scope of bargaining. In the private sector, he said, there are limitations to the scope of bargaining that both sides recognize. And both sides bring to the table the authority to carry out the terms of their resulting agreement. The public sector is nebulous on both scores. The limits of bargaining and the authority to carry out the terms of an agreement are basically those that the public, as represented in the legislature, is willing to give. It is in the budget allocation and tax decisions of the legislators who are responsive to the public will that the executive branch of government and public employees need to find the resolution of impasses. Taylor firmly believed that if the strike were permitted, there would be extensive arguments over the retained rights of management. Knowing in advance that a strike was not possible would widen latitude for mutual agreement, he thought. In recommending dispute-settlement procedures, the Taylor committee attempted to avoid those that either might be too accessible and thus overused and reduced in effectiveness, or be too standardized and thus not ideally suited to all parties and all disputes. The first problem was to be avoided by relating the final impasse procedures to the legislative calendar. These procedures would be available only if the parties failed to reach agreement sixty days prior to the budget submission date established by law for the agency or unit of government. The second problem was to be avoided by encouraging a wide

Public Sector Solutions: The Taylor Law

variety of employee organizations to come up with much of their own dispute-settling machinery. Joint discussion in each collective relation, Taylor said, should be devoted to developing specific procedures that the parties would agree to use to resolve their disputes. The Taylor committee made some suggestions on procedures that might be adopted. These suggestions were by no means exhaustive and, says Taylor, the "resourcefulness and imagination [of the parties] may be expected to create still others more appropriate to their particular situation."16 The suggestions included: ( a ) advance commitment to submit a dispute to arbitration; ( b ) a determination to resolve a question according to a formula specifying that the wages, benefits, or other conditions of employment in the locality and type of work under discussion shall be governed by those prevailing in private or public employment in other designated localities or types of work; ( c ) the advance agreement to refer a dispute to fact finding with recommendations; ( d ) the advance agreement to establish one or more study committees to review together complex or difficult problems; and ( e ) the advance commitment to utilize mediation procedures. However, if the dispute is not settled on an agreed-upon basis, a final impasse procedure would be dictated by law, the committee recommended. In this procedure, the Public Employment Relations Board would first determine whether an impasse exists, would try to resolve it by mediation, but, if that failed, would appoint a fact-finding board of three members, each a representative of the public. Employee representatives at the Taylor committee's public hearings largely supported fact-finding. Taylor had shared at those hearings his personal view that fact-finding can be effective if the parties have attempted to do serious bargaining. Fact-finders can close the differences from "one mile apart" to a "quarter mile apart," and that is when the process can lead to settlement. He cautioned, however, that if the parties looked upon fact-finders as the substitute for solving their own problems, they would be disappointed.16 The Taylor committee recommended that fact-finders be appointed from a list of recognized experts maintained by PERB and drawn up after consultation with representatives of the employee and employer units. PERB could also appoint nonvoting advisors to the fact-finding board from each of the parties if it chose. The fact-finder would then listen to the contending parties, request data or make use of the available data on wages, benefits, and other employment practices kept by PERB, and finally, issue a majority recommendation to the legisla15. Ibid., p. 35. 16. Hearings, p. 12-3.

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ture no later than fifteen days prior to the submission of the budget or legislative deadline. The recommendations would not be binding on either the governmental agency or the employee agency, unless they so agreed. Even after the fact-finding recommendation, PERB could still take whatever steps it might deem appropriate to resolve the dispute—even making its own recommendations—but it could not appoint a second panel of fact-finders. Taylor felt that in a public forum, fact-finding has two particularly important uses: an unsubstantiated or extreme demand tends to lose force in this forum; and fact-finding helps crystallize thoughtful public opinion and news media comment. The latter has special significance when the public's business is involved. The alternative of compulsory arbitration was rejected totally. This had been the desire expressed in some of the testimony at the public hearings for use in disputes involving at least police and fire fighter groups, if not all public employees. However, the Taylor committee felt compulsory arbitration would frustrate the participation of employees and tend to encourage arbitrary and extreme positions on both sides. In the Taylor recommendations, if the dispute could not be resolved by the fact-finders, it would then have to be resolved by the local or state legislative body. The legislators would hold a "show cause" hearing at which the parties would review their positions. Public employee controversies should be taken to the political arena, not the streets, Taylor believed. "It is ultimately the Legislature and the political process which has to balance the interests of public employees with the rest of the community, to relate the compensation of public employees to the tax rate, and to appraise the extent and quality of public services and the efficiency of their performance to the aspirations of public employees."17 The paramount "legal considerations" discussed by the Taylor committee were those measures to be enforced if an employee organization defied the law and went on strike. Taylor believed that CondonWadlin had not prevented strikes because it relied only on punitive measures and had not provided any means by which public employees could participate in the determination of the terms and conditions of their employment. The new law should remedy the latter defect but, the committee recommended, it should not only retain the deterrents to strike in Condon-Wadlin, but strengthen and add to them. For Taylor, a ban of strikes, after all, was not taking away a right public employees had. Public employees had never had the right to 17. "Final Report," 31 March 1966, p. 39.

Public Sector Solutions: The Taylor Law strike. The new law was giving public employees new processes that could lead to the peaceful resolution of disputes. Taylor recommended that any work stoppage or slowdown by public employees to induce a change in terms and conditions of employment should be considered a strike. The first deterrent to such action would be the injunctive power of the courts. The Taylor committee recommended that the legislature eliminate the then existing $250-perday maximum fine for criminal contempt to allow the courts complete flexibility to determine a penalty. Criminal contempt citations should be used in these labor situations, the Taylor committee believed, because criminal law, unlike civil law, must be enforced. The committee did not believe the government agencies should have the right to waive or negotiate away the no-strike provision. In a letter to the committee, the Commerce and Industry Association of New York City had expressed the fear that the employer units would do just that. The association asked that strike penalties be made mandatory, and Taylor clearly agreed.18 The second deterrent would be the use of an existing provision in the Civil Service law for disciplining employees guilty of misconduct. Participating in a strike, slowdown, or work stoppage would subject an employee to reprimand, fine, demotion, suspension, or dismissal. Taylor had noted testimony in his personal copy of the 4 March 1966 hearings transcript in which a representative of municipal officials argued that individual penalties must be retained along with organizational penalties even if the individual penalties were small." A third deterrent would be borrowed from the law covering federal employee organizations. This requires that employee organizations striking in defiance of the no-strike pledge could, after a hearing before PERB, lose their representation rights and accompanying privileges such as the dues checkoff. This recommendation of the Taylor committee was also suggested in the previously cited letter from the Commerce and Industry Association. The association felt that CondonWadlin's punitive provisions had been too much directed against individual employees and that the new law should look more directly to the responsibility of the union organization itself. "I am hopeful," Taylor later wrote, "that the checkoff penalty which we recommended will have a significant degree of effectiveness."20 18. Commerce and Industry Association of New York City (unsigned memorandum) to Governor's Committee on Public Employee Relations, January 1966, George W. Taylor Papers, University of Pennsylvania Library. 19. Hearings, p. 24. 20. George W. Taylor to Leland Hazard, 24 February 1969, George W . Taylor Papers, University of Pennsylvania Library.

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If a P E R B hearing were required, P E R B would determine whether the employee representative organization was responsible for calling the strike or whether it tried to prevent it. It would also determine whether the employing agency or its representatives engaged in acts of extreme provocation. In the event of the latter, a strike might not be illegal. If an organization once lost its representation rights, it could not then have them reinstated without specifically agreeing not to assert the right to strike.

Implied Needs in Effective Collective

Negotiations

Taylor could not make recommendations for a collective-bargaining process and for penalties to deter strikes without also warning that no law and no penalty could be effective unless most of the people involved wanted them to be. The road to success in public employee relations, he cautioned, lay not only in building a legislative framework, but in ensuring the day-to-day conduct of sound collective relations. He felt it would be necessary to help the parties organize themselves to enter into these relationships, to help ensure skill in negotiations, to help develop greater knowledge of the conditions of public employment, and to help maintain broad, continuous communication between representatives of employees and their respective employers. It was incumbent on New York State, he felt, to develop the talent that would be required to make any public employment law work. This would not be easy. Public employers were many years behind the private sector in collective bargaining sophistication, even though public employment was the nation's leading "growth industry." Only eleven formal public employee collective-bargaining agreements existed in New York State at the time the Taylor committee was preparing its recommendations. The private sector, thought Taylor, had passed through three successive stages of emphasis in its experience with efforts to improve employee relations. First, there was an emphasis on procedures—unilaterally imposed devices like wage incentives and bonus plans. When that failed to satisfy the employee's desire for participation in the determination of working conditions, employers moved the emphasis to policies that would include some forms of employee participation. But even the best policies were not effective in the absence of good management. Thus, in addition to satisfying employee needs to be involved directly in establishing the terms and conditions of employment, unions—in the third stage of employee relations—generated pressures

Public Sector Solutions: The Taylor Law on employers to select and develop more competent managerial personnel. The public sector, in contrast, remained preoccupied at the procedures level. Few, if any, counterparts existed in state or local governments to the function of vice-president for industrial relations in private industry. When faced with demands from employees, public officials tended to simply improvise measures to deal with crisis situations. Usually, they were uncertain of their authority, unaware of precedents established elsewhere, and unable to call in qualified advisors. In short, they were underdeveloped in organization for effective employee relations. This was a situation that would need to change. Having skilled and knowledgeable people deal with public employee problems that were more complicated than any in the private sector was a requirement if any public-sector employee-relations legislation was to be effective. The Taylor committee recommended that state and local government and public authorities establish effective offices for public employee relations, that government-sponsored training programs be set up, that comparative data on salaries, pensions, and other fringe benefits—from the public and private sectors—be collected, and that research on the broader aspects of collective relations in public employment be encouraged and supported. Taylor recommended study of the operation of the employee grievance procedures that had been in existence in New York State and were to be continued. He suggested that joint employee-employer representatives working in fact-finding or research might be particularly appropriate for public employment. Since strikes were illegal, there might be greater incentive for the working out of effective substitute arrangements. Basically, Taylor was expressing again his abiding belief that the best procedures for successful collective-bargaining relations would not be those suggested by any panel of experts, including the one which he chaired, but those developed by the parties themselves. To the extent that a law provided the framework for mutual agreement, however, the law could help ensure success.

The Taylor Law Before submitting a proposed law to the legislature, the governor's staff discussed the Taylor committee's report with employee representative group leaders, asking for their recommendations. The most frequently requested changes related to the right to strike and to stronger representation privileges. Specifically, the employee leaders wanted the prohibition against strikes removed, and/or the "no-strike" affirmation

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requirement removed or softened, and/or the penalties for illegal strikes reduced. On this last issue, it was suggested that the requirement that a striking organization be decertified be modified by limiting the duration of the decertification, and also that a ceiling be placed on the possible fine for contempt for violating a no-strike injunction. The employee organization leaders wanted a requirement that the government bargain exclusively with the employee organization, if the organization represented a majority in the negotiating unit. They also wanted the PERB established on a tripartite basis—one member from labor, one member from government, and one chosen by the other two—rather than having all members appointed by the governor. They further asked for deletion of the final step in the proposed impasse procedure, the submission to the legislative body of the fact-finding board's report.21 The Public Employees' Fair Employment Law, enacted in April 1967 and effective on 1 September of that year, became known as the "Taylor Law" only because, Taylor explained, "its provisions were so controversial the politicians did not fight to have their own names on it."22 The law embodied most of the Taylor committee's recommendations. The employee representative organizations did not get their requested right to strike. The law recognized the right of public employees to organize, established procedures for the recognition of employee organizations, and established procedures for impasse resolution. It did not attempt to limit the scope of bargaining, and it left wide latitude for the parties in collective negotiations to come up with their own procedures for resolving disputes. However, there were some differences between the law and the Taylor recommendations, and some of these reflected the concerns of employee group leaders. In establishing the penalties for striking in defiance of the law, the legislators accepted Taylor's view that a labor organization should be stripped of its representation privileges, but they established a maximum period of loss of eighteen months. The legislature did not accept the Taylor proposal that the maximum fine the courts could levy for contempt be discretionary with the court. It established a new maximum fine of $10,000 a day in place of the then existing $250-a-day limit. The law combined the two penalties in a manner not suggested by the Taylor committee. It stated that an organization could be stripped of its representation privileges, which meant it no longer had the 21. Office of Governor of New York, "Areas of Disagreement," Staff 15 March 1966. 22. Millones, New York Times, 16 October 1968.

Report,

Public Sector Solutions: The Taylor Law privilege of dues checkoff. However, it also said that if a fine had been levied against the organization and any part of that fine was still unpaid, the dues checkoff would continue, with the money going directly to the court. Some aspects of the law reflected neither the thought of the Taylor committee nor the requests of the employee representatives. In establishing the Public Employment Relations Board, the legislature accepted Taylor's recommendation that the three-member board be appointed by the governor, but added a stricture that not more than two of the three could be members of the same political party. In establishing the final impasse procedure, the law required the fact-finder's report to be submitted to the legislature, but did not require the legislature to then hold a show-cause hearing at which both sides would discuss that report, as Taylor had proposed. Finally, although the Taylor committee advocated a flexible approach which would leave a great deal of problem solving to local law, it did not envision Section 212 of the Taylor Law, which gave New York City authority to adopt its own program entirely for those agencies which come under the mayor's jurisdiction. The New York Office of Collective Bargaining procedures could operate without a finding of "equivalence" by PERB unless PERB sought a judicial interpretation of the matter. When the law was enacted by the legislature, Governor Rockefeller described it as a "landmark of sound progress in a highly complicated and controversial field." Taylor called this description "fully justified," but later complained that the landmark character of the legislation was often obscured by the debates over the no-strike provision. The idea of not permitting strikes by public employees was nothing new, he argued. What was new, what made the law truly a landmark, was, Taylor said, "those features of the Law which recognized that governmental agencies have a responsibility to deal with their employees in accordance with standards which provide equitable treatment and to insure that the employees can participate effectively in the determination of their conditions of employment." 23 Although it was hailed by the governor, it was not long before the critics of the Taylor Law were heard. Six months after the law became effective, Theodore W. Kheel submitted an assessment of it to Anthony J. Travia, speaker of the New York Assembly. Kheel called the law a failure. He said the Taylor Law had not averted a fourteen-day New 23. "Strikes in Public Employment," Good Government

85 (Spring 1968), 10.

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York City teachers strike in September 1967. He argued that factfinding had exacerbated the conflict rather than solved it and that PERB did nothing to resolve the dispute. He asserted that the Taylor Law had been helpless to avert a nine-day sanitation workers strike in February 1968 and could not be credited at all for a last-minute settlement that avoided a strike by transit workers in December 1967.24 The law had not worked, he said, because its procedures were cumbersome and indecisive and its penalties ineffective, if not an impediment to settlement. The law did not recognize, he said, that its two objectives, to prevent strikes and at the same time grant public employees the right to bargain collectively and to participate in the determination of their working conditions, were essentially irreconcilable. There can be no joint determination, Kheel believed, that precludes the ability of employees to decisively reject their employer's last offer—that is, to strike. "Under the Taylor Law," he wrote, "the notion that joint determination or real bargaining can take place is a mirage once employees or their organizations acknowledge that the employer makes the final decision."25 Kheel's recommendation was a law that permitted strikes for some employee groups but not for others. He felt strikes should be barred in cases where they would imperil health or safety. Where agreement could not be reached in these latter cases, he suggested a Taft-Hartleytype injunction for a limited period, during which further efforts to settle the dispute could be made. And should that fail, the legislature "should be prepared to act as the Federal government has twice acted in national railroad disputes when a legal strike has occurred."26 The legislature should consider submitting the remaining issues to arbitration, but should not be a participant in negotiations, he believed. Taylor got his opportunity to reply to Kheel when Governor Rockefeller, on 19 February 1968, reconvened the original Governor's Committee on Public Employee Relations to make its own assessment of the success or failure of the Taylor Law. Said Taylor: "Without at all minimizing the seriousness of several strikes which have occurred, there is considerable evidence to support a conclusion that, in its initial stages, the Law is working well."27 He counted it a success that some two-thirds of New York public employees were organized as a result 24. Theodore W . Kheel, "Report to Speaker Anthony J. Travia on the Taylor Law with a Proposed Plan to Prevent Strikes by Public Workers," 21 February 1968, pp. 8 - 1 2 . 25. Ibid., p. 16. 26. Ibid., p. 32. 27. George W . Taylor to Nelson Rockefeller, 17 June 1968, contained in "Interim Report of the Governor's Committee on Public Employee Relations," George W . Taylor, chairman (State of New York, 17 June 1968).

Public Sector Solutions: The Taylor Law

of the law. Hundreds of first-time recognitions and negotiations had been peacefully concluded. The disputes cited by Kheel as examples of the failure of the Taylor Law, Taylor ascribed to the procedures of New York City's Office of Collective Bargaining. "There are in reality two laws," he said. "One applies to New York City, while the other applies to the rest of New York State." He pointed out that while the OCB and various employee unions had agreed on procedures to be followed as a substitute for strike, significant unions were not part of the agreement. He was not claiming, however, that had the Taylor Law been followed to the letter in New York City, no strikes would have occurred. It would be naive to suggest that such a stoppage would assuredly be avoided simply by following one set of impasse proceedings instead of another. If a union was determined to ignore the public interest, it would strike. . . . A forthright facing up to the difficult problems of public employee relations is gravely obstructed, we believe, by those "observers" who expound the view that agreements between governmental agencies and their employees cannot be "satisfactorily" consummated unless the threat of an illegal work stoppage is ever present. . . . These "observers" fail to understand the fact—or choose to ignore it—that negotiations in the public sector are, in critical respects, different from those in the private sector.28 Taylor reiterated his position that the private employer is under pressure to keep costs down to avoid serious competitive consequences, whereas the public employer may actually encounter adverse political consequences by a too-strenuous opposition to the union with which it bargains. Taylor had noted testimony on this point in his personal transcript of the March hearings. A witness had stated that a public employee—and his or her friends—could go to the polls and vote for that employee's employer. While it is true that an employee who is also a shareholder can "vote" for the employer in private industry, the share of the political vote an employee might round up in a small community is likely to be much larger than any impact an employeeshareholder could hope for.28 Kheel had argued that denying employees the right to strike gave the employer de facto unilateral power to set wages and working conditions. Taylor argued that giving public employees the right to strike would give them such an overwhelming advantage over the employers that it would be the unions, not government, that would wield uni28. "Interim Report," pp. 10-11. 29. Hearings, p. 24.

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lateral power. Further, argued Taylor, equitable treatment among the various classes of government employees cannot be provided if those unions with the power to bring the public to its knees through a strike exert this power to secure preferred treatment for their particular members. The interim report of the reconvened original Taylor committee, issued in June 1968, laid out areas in the operation of the Taylor Law that the committee felt deserved further study. Their final report, issued the following January, made specific recommendations in three of the areas and, in each case, those recommendations were adopted, with some additions, by the legislature in March as amendments to the law. One amendment related to impasse proceedings. As already described, the original 1966 Taylor report had recommended that the fact-finders' report be submitted to the legislative body which would then hold a show-cause hearing on why that report should or should not be accepted. Taylor continued to feel this was a notable omission in the adopted law, weakening the ability of the legislative bodies, as representatives of all the people and their needs, to act as instruments of finality in public-employee relations disputes. The Law was amended to provide for the show-cause hearing. A second change in impasse procedure adopted by the legislature required the fact-finders' report first to be submitted to the parties and then made public five days afterward, if agreement did not result. The original law required that the fact-finding report be submitted to the parties and the public at the same time. Taylor felt the delay would give the fact-finders an opportunity to work with the parties in attaining an agreement. Another major issue addressed by Taylor in 1969 relates to the deterrents provided to prevent strikes. Again Taylor was convinced he had been right the first time in his approach to penalties. The original 1966 recommendation had proposed no top limit on the fine that could be assessed in contempt cases and no limit to the length of time a labor organization might have its dues checkoff withdrawn. Taylor believed that penalties would be more effective if their extent were unknown. He felt the limits should be discretionary with the court in the case of the fines and with PERB in the case of the dues checkoff privilege. And here again, the legislature amended the law in accordance with Taylor's recommendation. In his discussion of penalties, Taylor noted two he felt had been ineffective. First, there was the practice of the courts of imprisoning a union leader whose organization had gone out on strike. Imprisonment was neither part of the Taylor Law nor a part of the 1966 Taylor com-

Public Sector Solutions: The Taylor Law mittee report. It is, however, a penalty that courts traditionally had at their disposal, and although Taylor did not favor using it, he also did not suggest trying to take the discretionary weapon away. A second issue involved penalties that could be assessed against individual strikers. The Taylor Law, at Taylor's urging, had made disciplining of strikers (ranging from suspension to dismissal) mandatory, not discretionary, and yet, in fact, that power was not used. Public employers had been reluctant to impose sanctions after a strike. As Taylor put it, "it's easier that way."30 In his 1969 report, he suggested requiring employer officers or bodies to submit written reports dealing with their handling of a strike, including discussion of issues such as how it came about, what efforts were made to terminate it, the names of those who may have been responsible for bringing it about, and the sanctions imposed. He believed this would put public pressure on employers to take some action. The amendment voted by the legislature handled the matter differently, although the legislature obviously gave heed to Taylor's concern about the need to make sure sanctions were applied. A new provision in the law provided that both an employee who engaged in a strike and a supervisory or managerial employee who consents to a strike would lose two days' pay for each day on strike—one day's pay for being absent, the other day's pay as a penalty. The employee would also be on probation for one year without tenure. This new sanction did not remove the old one, which provided for the possibility of suspension or dismissal. The new amendment provided for the right of an employee to appeal the disciplinary action. Significantly, it also made provision for the right of a taxpayer to "appeal"—that is, to institute court proceedings if the government failed to impose penalties or seek injunctive relief in the event of a strike. The third major issue in his 1969 report was the handling of disputes in New York City. As noted earlier, New York City was neither totally included under the Taylor Law nor totally separate from it. It provided its own impasse procedures, yet was to impose the Taylor Law penalties. The combination had been notably unsuccessful. In 1969 Taylor pointed to three aspects of this matter he believed of most concern. First, he noted that procedures of the Office of Collective Bargaining did not cover a large number of government entities either de jure or de facto. The nonparticipation of these employee organizations in OCB procedures limited its jurisdiction and enabled the organizations to move in and out of the OCB as it seemed tactically advantageous for 30. "Report of Governor's Committee on Public Employee Relations," George W . Taylor, chairman (State of New York, 23 January 1969), p. 15.

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them to do so. Taylor believed these ambiguities between coverage of the state law and the O C B had to be resolved. Second, he rioted problems in the timing of contract settlements. Unlike the procedures applicable to every other government and public employer in the state, O C B impasse procedures were not related to the city's budget year. Taylor believed that was a serious mistake, in that it impeded the employer's ability to properly allocate funds for programs essential to the public welfare. And third, he found the city's procedures lacking in "finality." Under OCB procedures there was no requirement that the recommendations of a fact-finding panel be made public, or any clear requirement that the recommendations be acted upon by the City Council. This was in clear contrast to the Taylor Law. Taylor recommended that the legislature require OCB and PERB to submit reports on the steps taken to bring procedures of O C B into "substantial equivalence" with the state law. And the legislature did so. In a separate "interim report" of the reconvened committee in 1968, Taylor noted that the 1966 recommendations had not provided for an explicit listing of unfair practices by public management or employee organizations, or for a special procedure to litigate charges of that nature. That was not the priority matter in getting the original legislation passed. However, he felt the time had come to review this need. Taylor made no recommendations along this line in his 1969 final report, but the legislature came up with a specific list of "improper practices" and a determination process in its 1969 amendments. Also in 1968, Taylor suggested study in the areas of the quality of settlements, conflict between Civil Service regulations and collective negotiations, problems with scope of bargaining, the possibility of special procedures for school districts, and the need for development of negotiating skills of employer and union staffs, but he made no specific recommendations concerning these matters. N o legislative action was taken on these issues in the 1969 amendments. The Taylor Law survived a legal challenge in 1968. The State of N e w York Court of Appeals upheld the constitutionality of the no-strike provision. The opinion stated: "Section 210 .. . designed to prevent the paralysis of government, offends against no constitutional guarantee or requirement. Self-interest of individual or organization may not be permitted to endanger the safety, health, or public welfare of the State or any of its subdivisions."31 31. L e g a l o p i n i o n of N e w Y o r k C o u r t of A p p e a l s , 21 N o v e m b e r 1968, p. 13. ( D e c i s i o n r e l a t e d to strike of U n i f o r m e d S a n i t a t i o n m e n ' s Association of N e w Y o r k City.)

Public Sector Solutions: The Taylor Law The Taylor committee's recommendations on public employee relations were consistently grounded in George Taylor's continuous concern about the nature of the institutions of a democratic society. The work of the Taylor committee was distinguished by its effort to understand fully how public services are delivered through public employees and what constitutional responsibilities of elected officials are. It is clear in 1966, when the committee's recommendations were made, Taylor did understand the fundamental nature of federal, state, and local governments. In the tradition of "social inventiveness," which he prized, he sought to fashion a new social process that would justly allow employees of these unique organizational entities to participate directly in the determination of their terms and conditions of employment. In an article he completed one week before his death on 15 December 1972, Taylor said that although he was "doubtless, not entirely objective about the matter," he felt the experience of the Taylor Law in New York was "worthy of consideration." He continued to believe that the major task for the future remains the creation of acceptable substitutes for strikes in the public sector. How well that task is carried out will surely determine the likelihood of legislative willingness to accord public employees the participation rights to which, in equity, they are entitled. 32

3 2 . "Collective Bargaining in the Public Sector," pp. 3 3 - 3 4 .

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George Taylor was fond of noting that we had achieved reasonable success in eliminating the strike as a device to decide representation and grievance questions. The procedures, government-run elections and grievance arbitration, were not without their problems, but, by and large, we had a system in place which worked and had acceptability. The principal remaining open area, negotiation of new contract terms or interests disputes, was of increasing concern to Taylor as he pondered the question of finality in the resolution of conflict. The central theme of Taylor's value system as respects finality in interests disputes was the desirability of employer and employee acceptance of the terms of employment. This "voluntarism," in Taylor's view, was a much-underestimated bulwark of democratic principles in our society. Taylor recognized the subtle and not-so-subtle implications of voluntarism. He wrote and spoke frequently on the subject. Although some of his ideas and approaches apply to both the private and public sectors, there is sufficient differentiation of his thoughts to warrant separate delineation.

The Private Sector Voluntarism in the private sector meant that no agreement could be bargained without a "meeting of the minds" of the parties and "mutual

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acceptability" of the terms of employment negotiated. Management's relatively untrammeled power to manage had been trimmed by the Wagner Act to provide for a form of codetermination with regard to wages, hours, and working conditions. The initial problem of finality, then, is the ability of negotiators to work out an agreement. Although political problems immediately intrude on both sides, management generally can give its negotiators sufficient authority to consummate an agreement. Certainly, questions will arise as to the size and scope of the agreement, but management, with its authoritarian structure, is in a good position to handle these matters internally. A union presents a different set of problems. Authority flows from the bottom up, and union negotiators typically must present the package to the membership for ratification. The exercise of this ultimate authority by union membership to reject negotiated agreements has led some authorities to suggest that finality would be accomplished better by arming union leaders with the authority to bind their membership. Taylor felt that public policy would likely continue to support the notion that terms of employment must be acceptable not only to the union leaders, but also to the individuals who must work under them. Given this reality, he favored emphasis on a variety of approaches designed to enhance the ability of the parties to reach a meeting of minds. Taylor favored the development of cadres of better-paid and bettertrained mediators. He saw room for the parties to use private mediation when there was available an individual who uniquely enjoyed the trust and respect of the parties. Above all, he envisioned considerable room for the parties to be creative in their own efforts. "Prenegotiations bargaining" was a tool he advocated. The term, somewhat a misnomer, refers to the parties getting together before the exchange of demands to go over the relevant economic facts for the economy, industry, and firm as well as to examine hard data on the problems faced and to be faced. No negotiation was to take place until the parties had examined the "background" of bargaining, so to speak, and then they would be responsible for proposals designed to narrow the initial difference between them. Taylor also recommended the use of study groups; these might be set up prior to negotiation or could form during negotiations. Selected individuals would study some of the more complex issues in depth and away from the heat of the bargaining table. The product, it could be hoped, would enable the bargainers to work from more informed positions. The point is that finality in bargaining, if it is to be achieved voluntarily, requires professional attention and analysis. The parties could

The Elusiveness of Finality be helped and could help themselves. Leaving everything to the crucible of crisis negotiations was a mistake. Nevertheless, even with the best of wills, the threat of the strike or lockout could become real. ROLE O F THE STRIKE

Taylor felt that the rights of strike and lockout have an important function to perform. They insure that the conditions of employment will be imposed upon neither employees nor employers. The term "no contract, no work" is a popular expression of the conviction that men do not work except at terms voluntarily accepted. The avoidance or the termination of a work stoppage is the inducement for negotiators to modify extreme positions to the extent necessary to bring about a meeting-of-minds. The rights of strike and lockout constitute the ultimate pressure for agreement-making and cannot be outlawed without vitiating collective bargaining. When strikes and lockouts turn out to be unsatisfactory methods for resolving certain differences, therefore, their use can be restricted, in conformance with our ideals and convictions, only by a voluntary relinquishment by those who possess the rights of strike and of lockout. 1 He believed firmly that the function of the strike in the private sector was of "immeasurable value," not only in maintenance of grassroots democracy but in the preservation of the private-enterprise system. As time went on, Taylor became concerned that public acceptance of the right to private labor contract determination was being challenged. Guidelines and jawboning, not to mention controls per se, were indications that accommodation through collective bargaining of the needs of employers and employees was no longer the exclusive province of the parties. He noted: One consequence has been a growing public intolerance of strikes in the private sector. Stoppages, it is often said, cause more inconvenience and hardship to the public than to those directly involved, frequently do not expeditiously induce a private agreement, and result in terms of employment which constitute preferred treatment for a few to the disadvantage of the many. 2 Taylor recognized that inflationary forces and tougher world competition were forces that had to be considered. After all, union and man1. "The Arbitration Idea," Sidney Hillman Memorial Lecture, University of Wisconsin, 13 December 1954. 2. "Public Employment: Strikes or Procedures?" Industrial and Labor Relations Review 20 (July 1967): 623.

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agement leaders, as well as their constituencies, have a large stake in the national effort to accomplish a stable price level with minimal unemployment. He felt, however, that the case for tools such as guidelines had not yet been proven. A bridge between the needs of private interests and government interests is necessary, but it must not be one which gives undue emphasis to either party. He saw that there was a greater need for cooperation and accommodation between those responsible for private decision making and those engaged in public policy making. Although this goal had not been achieved, Taylor felt that useful efforts were present on the national scene designed to enhance finality, but without the unhealthy consequences of either unlimited bargaining or imposed conditions. Fundamentally, Taylor believed the rights of strike and lockout were necessary concomitants of private-sector bargaining. He was aware that not only strikes, but settlements themselves, could raise difficulties for the nation. In fact, he created the term "public-emergency settlement" to connote an agreement in which the benefit to the parties was clearly outweighed by the damage done in the marketplace. Observers increasingly felt that "the lion's share to the lion" was the guiding leitmotif of private-sector bargaining and that little could be done without fundamental alteration of bargaining structure. Taylor had little time for those who saw the "monopoly power of the union" best handled by enterprise or other limited bargaining. He pointed out that many of the bargains that had created problems would not be obviated with simple structural changes. More to the point, however, he felt that too many people were unduly pessimistic in assuming that the lion must always be atavistic. Market constraints were still present, and the roster of economic disaster was filled with organizations that ignored reality. He felt we were too ready to dismiss the possibility that we could build institutions where questions of equity were important. Power, in a democracy, should include respect for the basic rights of others—a lesson Taylor felt could be absorbed by the American labor movement. In sum, the threat of the strike or lockout was necessary for effective collective bargaining in the private sector. Without it, the chance of achieving mutually acceptable finality was small. Excessive settlements or hurtful strikes raised new questions about the desirability of private finality. Taylor saw much room for improved bargaining. He was interested in national developments that might offer some useful voluntary help to the parties. The realities of the marketplace impose discipline. The real test of collective bargaining lies in settling the vast majority of cases peacefully by analysis of the facts, persuasion, modi-

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fication of extreme positions, healthy compromise, and agreement. The resultant meeting of minds, in Taylor's view, had to embody a reasonable attention to public necessity. The idea of finality in bargaining as essentially a voluntaristic policy led Taylor to support voluntary arbitration of new contract terms as a desirable extension of collective bargaining.

Voluntary Arbitration The record shows that the parties who were almost universally willing to accept arbitration of future unknown grievances were almost equally opposed to arbitration of the known content of interest disputes. Most recently, the steel Experimental Negotiations Agreement—which Dr. Shils cites in chapter 8 as a "direct outgrowth of the Taylor idea"— is an illustration to the contrary, but it has not touched off any great wave of emulation. Nevertheless, Taylor saw considerable room for voluntary arbitration in those cases where the parties were unable or unwilling to accept the risk or cost of a work stoppage. This does not necessarily mean that the parties are thus foreclosed from a solution which represents a meeting of minds. In Taylor's mind, the achievement of finality through voluntary arbitration was a much more complex matter than generally supposed, and the parties could benefit greatly by an analysis of the complexities of finality vis-ä-vis voluntary arbitration. Taylor correcdy posited the notion that the parties were unhappy with the idea of an outsider determining the basic terms of employment for them. One important answer, according to Taylor, resided in the parties deciding just what they wanted from voluntary interest arbitration. In this connection, Taylor urged consideration of "restricted arbitration": Perhaps the risks of arbitration could be limited by turning to "restricted arbitration" and away from "open-end" arbitration. In "open-end" arbitration, determination of the dispute is on the basis of an arbitrator's own freely exercised judgment and selection of the criteria as to what constitutes fairness and equity. These obviously vary. The choice of an arbitrator whose views are wellknown could be tantamount to deciding the case. In what I term "restricted arbitration," in their agreement to arbitrate, the parties instruct the arbitrator as respects procedures and even as to criteria to be used in deciding the case.3 3. "The Voluntary Arbitration of Labor-Management Problems," Michigan Law School Summer Institute, 28 June 1950.

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Taylor recognized that the parties might face difficulty in settling upon the terms of a restricted arbitration. They may be agreed that it is desirable to avoid a work stoppage, but the very pressure which has kept them from a solution of their own making may deter them from achieving standards for an agreed-upon arbitration. In these cases, Taylor saw the role of the tripartite arbitration board as crucial. He favored all determination by a majority of a tripartite board. The neutral member would not have the option of making a final and binding determination. Nevertheless, his freedom to vote with either member of the board gave his views considerable weight. Taylor referred to the neutral in these cases as a mediator with a reserve power to arbitrate. In effect, he anticipated the concept of "med-arb," mentioned in chapter 2, which is receiving considerable attention today. The neutral charge was to work out a settlement which could be accepted by both his colleagues. The arbitrator was not there to simply accept one or the other of the extreme positions advanced. Taylor felt that the key criterion of meeting of minds in regular collective bargaining should carry over and be recognized as the goal of tripartite interest arbitration. Direct participation of representatives of the parties should provide the arbitrator with a deep understanding of the issues and of the range of practical solutions. In this process, the arbitrator must be prepared to modify his or her position when appropriate. There was always the possibility that the parties might hold fast to extreme positions. Here, Taylor argued that if the arbitrator could in conscience accept one of these positions as a rational outcome, it was in order to go along with that party. If neither position was acceptable, then Taylor would support the arbitrator's right to withdraw from the proceedings. He felt that the threat of such an action was usually sufficient to bring one or both of the parties to a more realistic position. Above all, Taylor recognized that the outcome of tripartite executive sessions precluded the damage which could be wrought by arbitration decisions coming "out of the blue." Taylor recognized that there was a common premise, held by a number of arbitrators, that the failure of the parties to agree meant that any resultant arbitration must be decided on the basis of criteria totally different from those that would have obtained had the parties bargained successfully to a conclusion. These arbitrators saw themselves as invested with the "public interest." The rule of reason was to hold sway, as opposed to the rule of force through a work stoppage. Taylor had serious doubts about such views. In the first place, there was the virtual impossibility of devising commonly accepted standards of fairness and equity. The very existence of collective bargaining was

The Elusiveness of Finality a testimonial to the problems inherent in achieving common ground. Second, if voluntary arbitration was conceived of as an extension of collective bargaining and not as a substitute for collective bargaining, what was wrong with seeking to approximate the results of collective bargaining? Finally, an imposed solution had the potential of generating considerable opposition. Even if the award failed to produce a work stoppage, there was the significant likelihood that explosions in subsequent bargaining were not only possible, but likely. Taylor thus felt that the uses of proper voluntary arbitration were desirable and to be encouraged. Once again, however, finality was not obtainable simply by adopting a mechanism and assuming that its use was frictionless. Finality was still elusive and could be accomplished only by proper attention of the parties to the form and type of voluntary arbitration to be adopted. More attention to these necessities could result in voluntary arbitration becoming a more viable extension of collective bargaining than in the past. COMPULSORY ARBITRATION

Taylor was consistently opposed to compulsory arbitration as a method of achieving finality in the private sector. He noted that required arbitration would tend to enlarge the number of issues rather than narrow them. One development he did not anticipate was the use of finaloffer arbitration by package. He also felt that compulsory arbitration often meant the imposition of terms according to the standards of the neutral. Here, too, many laws specify the criteria to be considered. Taylor himself urged the parties to develop their own criteria and procedures before using voluntary arbitration. Presumably, he would argue today that central criteria and procedures are not as desirable as tailored criteria and procedures developed by the parties for their own ends. However, even if Taylor were to concede some ground on compulsory arbitration as it has emerged, he would draw a sharp line on the fundamental bulwark underlying his thinking on compulsory arbitration. He saw compulsory arbitration as nothing more or less than an attack on democracy. Compulsory arbitration inevitably would require the government to come down on the side of enforcing the compulsory award. This meant there was a real likelihood of shifting collective bargaining from the economic to the political arena; the rules of collective bargaining could become a football kicked in the changing winds of political favoritism. Compulsory arbitration was not likely, in Taylor's mind, to stop strikes—it would simply make them illegal.

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This raised the question of painful sanctions and public willingness to accept these sanctions. Taylor often said, "Never reveal the impotence of government in a democratic society." We should avoid, wherever possible, testing the underlying power of government. The costs were too high: either the government would back off and living under law would be a mockery, or the government might hang tough and enforce law so vigorously as to move us toward a police state. These were high stakes, and Taylor was uncomfortable with what he saw as the potential of compulsory arbitration. The problem consistently given Taylor for analysis was the nationalemergency dispute, which he conceded represented a flaw in the theory of collective bargaining. How were we to achieve a meeting of the minds if direct negotiations failed and the parties were foreclosed from using the strike as the ultimate weapon to move away from their extreme positions? Taylor was fully aware that a true national emergency was a legitimate responsibility of government; government intervention was inevitable and could either specify the terms of settlement or influence them by powerful recommendations or required procedures. Taylor envisioned some room for fact-finding and participated in and supported the President's Advisory Committee on LaborManagement Policy in 1962 when it advocated that emergency dispute boards be empowered, at the president's discretion, to make public recommendations for settlement of particular disputes. Taylor was fond of pointing out that we had faced a severe national emergency in World War II. Representatives of labor and management worked out procedures for settling disputes and learned to live with the voluntary-arbitration machinery they established. W e managed to achieve a miracle of production during World War II. There was little doubt that the enlightened cooperation of management and labor was an integral part of that success. Skeptics might argue that the motivational level achievable in an international war involving national survival was hardly applicable to the realities of everyday labor relations. Taylor's position was that the lesson of World War II had pertinency. The War Labor Board should be studied by those who advocated more draconian measures in the event of another war or threatened war. The lesson for the more limited form of national emergency strike was the desirability of working out procedures voluntarily to avoid major government intervention. Taylor would have applauded the steel Experimental Negotiations Agreement. He would have noted, however, that the parties were in part influenced by the pressure of international competition. They were well aware that a strike could

The Elusiveness of Finality provide further disastrous inroads for foreign competition. They were also uncomfortable with the prospect of a strike taking them, as in the 1959 steel strike, to the White House, there to negotiate under the aegis of Vice-President Nixon. Taylor felt that sophisticated self-interest would lead the parties to think more about voluntary arbitration, particularly with the tripartite board and majority-vote rule. Should government intervention still be necessary, he felt the risks could be somewhat minimized. Situations were better handled on a case-by-case basis rather than by rote application of procedures. The Railway Labor Act had amply demonstrated that the application of fixed procedures had a way of gradually strangling bargaining. Taylor was aware that choice of procedures could be manipulated politically, but felt that this risk was less important than the stultifying effect of fixed procedures. Thus, Taylor saw compulsory arbitration as a serious threat to bargaining and democracy. It had a seductive air of finality about it. Taylor was concerned lest this aura make it acceptable to people who had not thought out the consequences. He frequently said, "Never take steps one, two, and three before you've thought out eight, nine and ten."

Joint Cooperative Efforts At the level of the individual relationship, there was room for considerable improvement in the finality record. Many options were available to the parties. Taylor noted: There are a variety of possibilities: advance commitment to arbitrate, use of comparative wage-rate criteria, fact finding with recommendations, special joint study committees, advance commitment to mediation procedures and many others. In other words, a very proper subject for collective negotiations is the question of mutually acceptable substitutes for the strike under circumstances of a particular relationship.4 While there was flexibility for the parties to work out better procedures and approaches at the micro level, Taylor was cognizant that the parties could use guidance and example from the national level. He was particularly pleased with the work of the President's Advisory Committee on Labor-Management Policy appointed by John F. Kennedy. Taylor noted that there had been considerable skepticism about 4. "Restraint in the Public Interest?" University of California, 27 May 1964.

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the committee when it was formed. Some saw it as an unwarranted intrusion of government into private affairs. Others recognized the tripartite nature of the twenty-one-person body, with its limited authority, and were less concerned about it as a threat than worried about the likelihood of failure and dissolution when tough questions were faced. Taylor noted that under President Kennedy, and later President Johnson, the committee was able to achieve a meeting of minds in reports on automation, collective bargaining, foreign competition, and fiscal and monetary policy. Useful meetings were held with the Council of Economic Advisors, and discussions on manpower, youth unemployment, and trade negotiations were held with other government officials. Taylor was fully aware that the committee could not begin to claim it had bridged the gap between government and private functions. Areas of agreement had been found and a mechanism established for talking things over. As Taylor saw it, the underlying concept of the Advisory Committee on Labor-Management Policy was a highly desirable one. Briefly, it stated that representatives of the interdependent interests involved might, through understanding, gradually increase the area of common agreement. This was a salutary proposition in tune with the tradition of Western democracy. Although the role of a president's advisory committee has shrunk since the sixties, there is today once more talk of major reconstitution. This talk comes on the heels of greater interest in worker participation on the part of European democracies. While the mechanisms for thoughtful debate are in place in the form of various presidential advisory committees, they have not been utilized to the extent desired by Taylor. Taylor was, in effect, stressing that improved finality was likely to require thoughtful input at the national level to provide guidance to the myriad of micro bargainers in our society. Many of the new and difficult questions that would likely affect the ability to achieve finality in bargaining needed the helpful input of senior peers at the national level. Labor-management task forces by industry could be particularly helpful. T H E PUBLIC SECTOR

Employees in both the private and public sectors possess the essential right to participate effectively in the determination of their conditions of employment. Taylor felt that the very stability of our political democracy was dependent on the ability to create institutional forms for dealing with equity claims in an orderly manner. He knew that

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public employees had historically been treated poorly. Under the doctrine of sovereignty, public employers had been all-powerful in the management of their political empires. True, Civil Service had placed some limitation on unfettered administrative determination, but the bulk of key public-employee decisions, including wages, hours, and many conditions of work, were determined unilaterally. Taylor was not surprised that public employees resorted to the strike, however illegal, to achieve their demands. The question for Taylor was: "Can acceptable procedures, other than the strike, be evolved which will provide equitable treatment to employees of the public without impairing performance of the essential functions of the agencies of representative government?"5 ROLE O F T H E STRIKE

During almost all of his lifetime, strikes by public employees were either illegal under statutes or held illegal by courts under the common law. Taylor applauded this position and argued that it was not an arbitrary exercise of sovereignty by nondemocratic government to deny to public employees the right to strike. He saw marked differences between the private and public sectors over what conflicting interests had to be accommodated in the establishment of terms and conditions of employment. According to Taylor, the government-employee relationship did not override the need of representative government to establish priorities via the budgeting process and to levy the taxes needed to achieve the sought ends. These determinations in the public sector amount to a type of consumer choice of government services and are a value to be conserved. Private-sector labor relations are constrained by the marketplace. The analog for the marketplace in the public sector is government action reflecting the will of the populace, either directly as under town meeting government or indirectly under representative government. Taylor felt it would be naive not to be aware of shortcomings in the marketplace and of legislative bodies in subordinating narrow interest to the general welfare. Nevertheless, failure to seek the ideal of government of, by, and for the people meant an abandonment of basic principles. The right to strike was, most assuredly, a mechanism which guaranteed the right of public employees to effective participation in determining the terms and conditions of employment. For Taylor, the answer to the question of whether the strike was compatible with the functioning of representative government was a negative one. 5. "Public Employment: Strikes or Procedures?" p. 618.

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Taylor argued that the right of public-employee participation in determination of terms and conditions of employment was central. The strike was only a mechanism. Taylor believed public-employee rights of participation could be made more effective, but the strike was the wrong mechanism to choose as the vehicle. In effect, the strike in the public sector was likely to achieve an unwarranted misdirection of resources and favor strategic value over the intent of the populace as manifested by elected representatives. Taylor would not have been surprised by the Proposition 13 vote in California. He was impatient with "easy" solutions focusing on the strike. These ran the continuum, from the hard-line approach to strikers, to the limited and selective right to strike. Taylor noted that the hard line had been exemplified by the excessive penalties of the Condon-Wadlin Act of New York. Punitive prison sentences settled nothing and made martyrs of the incarcerated. For a time, a New York City union leader who had not spent time in prison was judged an ineffective leader. Eventually, leaders had to be released for negotiations, and high financial penalties were set aside. Law was mocked when the legislature, ex post, excepted a strike from the penalties of the law. So too with limited and selective strikes. Taylor felt it virtually impossible to separate public employees into essential and nonessential categories. Yet, many observers were advocating a right to strike for public employees whose work could be considered less essential. Taylor was not satisfied with this answer. For example, he pointed out that ski instructors in a national park might be considered nonessential. However, the individual who broke his leg, or worse, because of the absence of the ski instructor might not see it the same way. Also, the prospect of a strike by so-called nonessential employees resulting in a reallocation of resources within the governmental unit amounted to a rejection of the primacy of democratic legislative determination and was likely to create significant intramural pressures for parity or adjustment. Taylor accepted the reality that illegal strikes would occur. Inevitably, sanctions would be required. He wanted the sanctions to be reasonable and fair, but stßl deterrents. He concentrated on financial sanctions. He was in favor of placing pressure on a union by withdrawing the checkoff for an illegal strike. This action would be for a fixed time period. The strikers themselves could be penalized by losing stated days of pay (two days of pay for one day of strike became the New York state formula) for participation in an illegal strike. Continued union misbehavior could result in loss of the right to bargain collectively.

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Taylor was uncomfortable with the emphasis on the strike and resulting penalties. He preferred that the discussion shift to other ground emphasizing new and improved impasse procedures. He felt that a major task of our generation was the creation of effective publicemployee participation rights without use of the strike. Social innovation was to be the key. As Taylor put it: The several branches of representative government . . . cannot avoid direct involvement in the labor relations pattern which is in the making. Together, they are the employer. The authority and decision-making latitude of each branch will be diluted by the new force. The crucial question is whether this government involvement is to be orderly or disorderly. The answer given to that question, especially in the fashioning of the final step of the impasse procedure, is uniquely important because the authority of elected legislative and executive officials of government is involved.®

COMPULSORY AND VOLUNTARY ARBITRATION

Just as Taylor opposed compulsory arbitration in the private sector, he was opposed to it for the public sector. He saw limitations to compulsory arbitration on both philosophical and practical grounds. There is considerable wishful thinking that the involvement of the legislative and executive branches of government can be minimized—or even avoided altogether—by having a board of impartial labor relations experts make a final and binding decision to resolve an impasse. While recognizing the apparent simplicity of compulsory arbitration, one should not be unaware of the consequences of the broad delegation of governmental authority which is entailed. An arbitration board would become a powerful arm of government acting without the checks and balances upon which we depend in the fashioning of our laws. Some additional difficult questions have to be faced. Is it sound and wise to consider the claims of one particular group of employees for their share of limited public funds in isolation from the claims of other employees? Or, to do so without regard to the leap-frogging effect upon the total wage bill of a decision made in narrow context? What effect would all this have upon the allocations of limited resources for other sorely needed services to the public? And, if a legislative body cannot or will not do what it takes to carry out an award by 6. "Impasse Procedures—The Finality Question," Governor's Conference on Public Employment Relations, New York City, 15 October 1968, p. 5.

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the impartial arbitrators, is it intended that a court will compel them to do so? Bringing such question into the appraisal of compulsory arbitration transforms an apparently easy answer into a very doubtful one.7 Taylor was opposed to compulsory arbitration in the private sector because he felt it to be incompatible with the private-enterprise system. He felt compulsory arbitration to be equally inappropriate for the public sector, but the problem there lay in its incompatibility with the representative government system. He noted illustratively that one of the first disputes to be arbitrated under Act 111, the Pennsylvania law providing for compulsory arbitration for police and fire fighter interest disputes, resulted in a wage award of thirty percent for Pittsburgh police. Although the increase might be justified by looking at the police in isolation, the effect of the award was disastrous. The City Council of Pittsburgh lacked the funds to implement the award and did not see how the money could be taken from other parts of an already tight budget. The City of Pittsburgh and fifty other municipalities called upon the state to fund the award. The state was unable or unwilling to find funds. The City Council finally had to levy a tax on hospital bills (which became known as the sick tax) and on college tuition and textbooks. Much litigation and bitterness ensued. Taylor wondered how long this type of situation could exist without undermining the very essence of representative government. Taylor saw some room for voluntary interest arbitration in the public sector. His approach and support for voluntary arbitration of interests disputes in the public sector was far more limited than his acceptance of the procedure in the private sector. He laid down strict conditions for the use of voluntary arbitration. The proceedings were to be based upon an agreement to arbitrate a particular dispute and were to include a stipulation of criteria for decision by the arbitration board. The stipulation would require union agreement, including presumably acceptance by the membership, of the terms under which arbitration was to take place. In addition, there was the prior acceptance of the procedure by the body responsible for enacting the laws necessary to effectuate an award. The approach represented a controlled delegation of governmental authority. Thus, it would not be unlike the power delegated to an administrative body to make a prevailing-wage determination. Taylor felt it would be naive to fail to recognize that obtaining such 7. " F a c t Finding and Recommendations," The 12 May 1969.

Collective

Bargaining

Forum,

The Elusiveness of Finality

an agreement from employees and governmental bodies was extremely difficult. The other side of the naivete coin lay in not realizing that open-end determination by compulsory arbitrators provided the "experts" with greater decision-making power than that accorded to elected officials. Taylor believed that the answer to interest-dispute settlement in the public sector was generally better found outside arbitration.

Fact-Finding and Show-Cause Hearings The elusiveness of finality is well illustrated by the uses of fact-finding in the railroad industry. The Railway Labor Act, created essentially by the parties, placed considerable emphasis on fact-finding when it was enacted in 1926. For approximately twenty years, emergency boards did excellent fact-finding jobs. Railroad industry and railroad labor were pleased, and the rest of the nation took notice. Indeed, serious consideration was given to extending fact-finding as a universal dispute-resolution device. Satisfaction, unfortunately, turned to disillusion. Taylor wrote: One can make a pretty good case to support the hypothesis that the system worked well when purposeful bi-partite collective bargaining resolved most of the issues and left but a relatively few to be dealt with through recommendations of the Emergency Board. The situation became quite different when collective bargaining on all issues was essentially deferred until after recommendations on all of them had been made by the Emergency Board. The recommendations then became the basis for starting negotiations and not for completing them.8 Despite the unsatisfactory Railway Labor Act history of fact-finding, Taylor felt the tool deserved attention in the public sector. There, in budget making, we have the task of ensuring that the claims of public employees are not improperly subordinated to the many claims for public funds. Some unions feel the only way to make certain of proper attention is by use of the strike—or, at least, the threat of the strike. As noted earlier, Taylor was satisfied that the strike was inappropriate for public employees. But he felt that unless suitable substitutes for the strike were developed, the outcome was likely to be a cycle of futility; illegal strikes would be followed by legislative imposition of increasingly harsh penalties. Avoidance of the issue was no 8. Ibid.

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solution, since it led to the breakdown of law. Under these circumstances, Taylor welcomed fact-finding with recommendations as a tool which at least offered some promise of breaking the cycle and aiding in the search for useful and fair methods of resolving public-sector interest disputes. Taylor saw the fact-finding and consequent scenario as follows: Fact finding and recommendations in impasse cases should be made on the basis of labor relations criteria applied to the particular case. If rejected by either party to the negotiations, the recommendations should nevertheless be presented to the legislative body along with the positions of the parties. The objective is to insure that employee claims be carefully evaluated in the competition for funds that occurs in the formulation of taxing and budget policies. The final decision, however, must remain with the legislative and executive officials who have a constitutional duty to carry out these formulations. Considering all the demands for public funds, the officials are responsible for deciding on whether there are, on balance, sound reasons to modify, upward or downward, fact finders' recommendations." In Taylor's view, show-cause hearings by a legislative body were an important opportunity providing the parties to state their positions with respect to the recommendations of the fact-finding board. The legislative body would not take final action on a budget or other legislative enactment until the hearings were concluded. The goal was to provide equity to all interests represented. The mechanism, fact-finding with recommendations, was to be a dispute-settlement procedure appropriately related to the legislative and budget-making processes. Taylor believed strongly that ultimate responsibility belonged in the legislative body. Strikes and lockouts were not acceptable. Alternative methods of finality that bound the legislature without its consent were likely to be self-defeating, in Taylor's view. The clearly expanding scope of bargaining in the public sector would probably be legislatively circumscribed if it extended beyond the range of legislative satisfaction. Similarly, wages and salaries were subject to bargaining exclusion, as in the federal sector, if outsiders made determinations unsatisfactory to legislative bodies. It was important that employees receive equity. Equity, however, required a balancing of interests. Fragmented groups creating imbalances in public-sector wage and other relationships were unacceptable to Taylor. He noted that although final authority for the consummation 9. "Using Factfinding and Recommendations in Impasses," Monthly Review (July 1 9 6 9 ) : 64.

Labor

The Elusiveness of Finality of negotiations lay with the legislative body responsible for funding the bargain, public employees were not limited to the role of supplicants. Public employees had fact-finding and show-cause hearings available. Taylor believed the procedures and attendant publicity would act as constraints on the legislature, pushing them in the direction of a settlement viably accommodating all relevant interests. Thus, fact-finding with recommendations was to be an important tool in the workshop assigned to build stability and justice in the world of publicsector labor relations. STRIKE SUBSTITUTES AND CREATIVITY

Substitutes for the strike were too important for the parties to limit themselves to the mandated arrangements of their public-sector law. Taylor termed voluntary agreement on effective substitutes for the strike a vital negotiable. He was particularly pleased with Article 209, Section 2 of the Taylor Law in New York, which dealt with this matter as follows: Public employers are hereby empowered to enter into written agreements with recognized or certified employee organizations setting forth procedures to be invoked in the event of disputes which reach an impasse in the course of collective negotiations.10 Thus, mandated dispute-settlement procedures in the Taylor Law were applicable to those jurisdictions that elected not to design their own. Freedom was available for creativity in achieving interest-dispute finality within the limits compatible with the authority of the parties. There were many possibilities: the parties could create their own versions of advance commitment to arbitrate or use comparative wagerate data, fact-finding with recommendations, special joint study committees, and/or mediation. The parties were to be encouraged to design and tailor their own dispute-settlement garment. The approach was rooted in Taylor's deep-seated faith in voluntarism.

In Sum, The achievement of finality in either the private or public sector is a complex and subtle matter improperly left solely to the vagaries of crisis bargaining. While voluntarism was one important base for a 10. "Public-Employee Unions—Pro and Con," Good 1 9 6 8 ) : 14.

Government

(Spring

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successful collective-bargaining system, voluntarism must imply creative and responsible bargaining by the parties. Another important touchstone for collective bargaining was its contribution to the maintenance of viable democracy. In the private sector, this meant that the strike or threat of a strike had a useful role to play in achieving agreement and preserving democratic freedom. Without the strike, there was no impetus to real bargaining. At the same time, the use of the strike as a pure power ploy to achieve unwarranted gains carried the seeds of its own destruction. Taylor stressed useful government support of bargaining as well as creative and innovative efforts by the parties themselves to improve bargaining. Mediation was to be increasingly professionalized. There was some room for private-sector fact-finding in certain disputes. Voluntary arbitration had its place. Taylor was implacably opposed to compulsory arbitration in the private sector. Compulsory arbitration raised such serious questions as its chilling effect on bargaining and the potential need for sanctions that could in time undermine democracy. Taylor was concerned about the national-emergency strike and recognized that it represented a defect in the theory of private-sector bargaining. He was somewhat heartened by the fact that many so-called emergency disputes were really nothing more than public-inconvenience disputes. The public sector created a new range of problems. Taylor was impatient with the notion of automatic transfer of private-sector philosophy to public-sector disputes. For one thing, he saw no room for the strike and was not persuaded that public-sector activities could be divided into essential and nonessential areas. Mediation was, of course, important. There was a considerably enlarged role for fact-finding. Above all, the parties were to be encouraged to develop their own dispute-settlement mechanisms. In the crunch, public employees and employers still at impasse after fact-finding were to participate in show-cause hearings held by the legislative body responsible for the negotiating group's budget. The widely advocated substitute of compulsory arbitration left Taylor uncomfortable with the transfer of budget-making authority, in effect, to nonelected and nonresponsible neutrals. Taylor thus stressed voluntarism, democracy, and responsibility in the quest for finality in bargaining. Without strenuous efforts to achieve these desiderata, the very shape of our existence as a society was threatened. Meaningful and useful finality in bargaining was a matter warranting our best efforts.

Postscript Dr. George W. Taylor,, 1901-1972: A Product of and Influence on American Life ROSE

DEWOLF

George W. Taylor's name never became a household word. The general public never recognized all he had done for them, how deeply his ideas have influenced American life. But that was okay with him. George Taylor never yearned for celebrity. In fact, a few years before his death, he was asked if he'd cooperate in a biography of his life. "No," he said. "If I tell all the inside stories I know, I'd have to betray confidence and I don't want to do that. But if I don't tell everything I know, why bother?" The fact that Taylor didn't feel he should bother has bothered others. After all, he had a basic involvement in the construction of the first minimum wage law in the country. Back in the 1930s Taylor was an advisor to President Roosevelt, who sent him on a tour of industry in the South. When he found that people were being paid only nine cents an hour, he came back to Washington determined to make that illegal. Taylor influenced and strongly contributed to the development of the Wagner Act giving unions the right to organize, and he helped draft the Social Security Act that older Americans find mighty important. And who was better than George Taylor at finding ways to resolve conflict? He had the knack of creating a solution that would make both sides in a dispute think they had won. No small talent that! Former Secretary of Labor Willard Wirtz once said that had it not

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been for George Taylor, collective bargaining in its present form might not have developed. Taylor was the center of a group of men who made collective bargaining in the United States develop and thrive. In short, although George Taylor was a modest man, his accomplishments were anything but. And his ideas, written about in this volume, are worthy of review. This man who worked hard to find ways to avoid unfairness, bitterness, and strife was a lifelong Republican. Taylor believed in capitalism and he was not—in all his efforts on behalf of the working man— ever trying to "change the system." He was trying to protect it and make it work. George Taylor grew up in Kensington, a working-class section of Philadelphia. He was a son of management, not of labor, but it bothered him that fights between the bosses and the workers often grew so bitter that trolleys were overturned, and people were killed. And he determined to find ways to tum those fights into negotiations. In high school, he was a star athlete, captain of both the football and baseball teams. (Taylor liked to tell a story on himself from those years. He was pitching for his team, he said, and the opposition was having no trouble getting hits off him. "C'mon, Taylor," screamed a fan as a new batter stepped up to the plate. "Bear down and hold him to a double.") He was offered athletic scholarships, but turned them down in order to pursue his interest in labor relations at the University of Pennsylvania. That was the start of a forty-eight-year relationship with Penn's Wharton School. Except for a four-year stint as chairman of the Department of Business Administration at Albright College in Reading, Pennsylvania (just after receiving his B.S. in economics in 1924), Taylor was at Penn until he retired in 1971. Taylor's scholarly doctoral dissertation for Penn made headlines across the country in 1929—and went into three printings—but not because of its skillful qualities in analyzing Philadelphia's hosiery industry. Reporters were more interested in Taylor's observation that when the economy was good women's skirts became shorter and when the economy was bad, the skirt length came down. As a professor, Taylor was revered; as an arbitrator or presidential advisor, he was constantly in demand. "They never call me until both sides are mired in concrete," he complained. On the touchiest issues like wage controls or legislation affecting public employees, Taylor was called to help. (A listing of Taylor's career assignments and awards can be found in the Introduction.)

Postscript: George W. Taylor Taylor used to tell a story about one meeting with President Truman. The two of them were, for some reason, on the floor looking for something—maybe an electrical outlet. Truman asked Taylor to come to Washington. Taylor quipped: "How do you refuse a president when he's asking you on his knees?" Edith Taylor recalls that when Truman first asked her husband to take an assignment, George Taylor felt he ought to let Truman know that he'd voted for Thomas E. Dewey. Truman said that didn't affect his offer at all, but he'd like to discuss the matter further. Truman whipped out a pad and pencil. "Tell me," he asked Taylor, "what were your reasons for picking Dewey?" Taylor listed the issues as he saw them one by one, outlining Dewey's stand on them. Truman would comment: "You're right there" or "No, wrong." Finally, the president toted up the score and announced: "Professor, you flunked." Of the five presidents George Taylor served in his career, he felt most at ease, says Edith Taylor, with Truman, for two reasons. First, both men shared a common interest in Greek history and second, Taylor believed that Truman understood labor-management relations best. George Taylor was a man who loved his work. But he also loved his wife and made sure she was with him when he traveled and that his work did not intrude on his time with her. He would get up early and plan his day carefully. But he made sure that he finished his work during the day and did not bring it home. Taylor was well-known as a man of humor and wit. (When a steel executive—in mid-negotiation—said, "Let's not get bogged down in details," Taylor retorted: "Let's not get bogged down in generalities.") But possibly what those who knew him remember best about George Taylor is that he was a man who had deep and abiding respect for his fellow human beings—no matter their race, religion, sex, or social class. Long before the modern Women's Liberation Movement, George Taylor the arbitrator rejected a management proposal to pay female employees only eighty percent of the wages paid to men. "There is no proof," Taylor wrote, "scientific or otherwise, that women are twenty percent less capable than men." George Taylor was always willing to hear the other person's point of view. "Labor strikes," he said, "are never black or white but shades of gray and once you look at those you begin to get some idea of the other side's problem. For instance, the worker's problem may be one of getting the money to buy his wife a new spring hat. This is just as real to him as management's problem of getting money to buy new

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equipment. If each side understands the facts then there is less real difficulty in negotiating . . . usually." George Taylor believed that the unique characteristic of America was the willingness of its people to "mutually agree." A meeting of minds, he said, is what democracy is based on. Taylor's ideas—designed to bring about that meeting of minds—are what this book has documented. Taylor's legacy to the field of labor relations is a continuing challenge to find even better ways to help people mutually agree.

APPENDIX

George W. Taylor

(1901-1972)

Education 1919 Graduated from Frankford High School. 1923 B.S. in Economics, Wharton School of Finance and Commerce, University of Pennsylvania. 1926 MBA, Wharton School of Finance and Commerce, University of Pennsylvania. 1929 Ph.D., Graduate School of Arts and Sciences, University of Pennsylvania.

Teaching Assignments 1923

1924-29 1929-49 1937-64

Instructor, Geography and Industry Department, Wharton School of Finance and Commerce, University of Pennsylvania. Chairman, Department of Business Administration, Albright College, Reading, Pennsylvania—Football Coach. Research Associate, Industrial Research Department, University of Pennsylvania. Associate Professor and Professor, Labor Relations, Wharton School of Finance and Commerce, University of Pennsylvania.

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Appendix 1964-71

Gaylord P. and Mary Louise Hamwell Professor of Industry, University of Pennsylvania (Emeritus 1971-72).

Outside Assignments 1931-41

1933-35

Impartial Chairman under National Labor Agreement, Full Fashioned Hosier)' Manufacturers of America, Inc. and the American Federation of Hosiery Workers. Chairman, National Labor Board, Philadelphia District

(NRA). 1935 1935-61 1937-38 1941—42 1942-45 1945 1945 1946-47 1947-61 1948-49 1949 1951 1952 1953

1953-59

1959 1959-63

Assistant Deputy Administrator (NRA). Impartial Chairman for Men's Clothing Industry, Philadelphia. Advisor, National Fair Labor Standards Administration. Impartial Umpire, General Motors Corporation and United Automobile Workers. Vice Chairman, National War Labor Board (World War I I ) . Named by President Roosevelt. Chairman, National War Labor Board. Secretary, President's National Labor-Management Conference. Under President Truman. Chairman, Advisory Board of the Office of War Mobilization and Reconversion. Impartial Chairman for Women's Apparel Industry, Philadelphia. Consultant to Hoover Commission on Reorganization of the Executive Branch of Government. President, Industrial Relations Research Association. Chairman, National Wage Stabilization Board (Korean War). Arbitrator, CIO Jurisdictional Disputes. Impartial Chairman for the Philadelphia Waist and Dress Manufacturers Association and the Philadelphia Joint Board, Waist and Dressmakers Union, ILGWU. Arbitrartor, General Building Contractors Association and the Building and Construction Trades Council of Philadelphia and vicinity. Chairman, Presidential Board of Inquiry for the Steel Strike. Appointed by President Eisenhower. Chairman, Long Range Committee, Kaiser Steel Corporation and United Steel Workers of America.

Appendix 1960 1960-68 1962 1964 1966 1967 1968

Faculty Member, Seminar for American Studies, Salzburg, Austria. Member, President's Advisory Committee on Labor-Management Policy. Appointed by President Kennedy. Chairman, President's Board of Inquiry, Aerospace Industry. Presidential Mediator, National Railroad Dispute. Chairman, Governor's Advisory Committee on Public Employment Relations (New York). Presidential Mediator, Railroad-Shopcraft Unions Dispute. Chairman, Presidential Panel, Copper Dispute.

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Index

Abelson, Paul, 30 "ability to pay," 145, 160 accommodation, 75-81 passim Adamson Act, 133 AFL-CIO, 52, 112, 114, 159, 192 Amalgamated Clothing Workers of America, 3, 29, 33, 90, 96 American Arbitration Association, 34, 40, 80 American Federation of Labor (AFL), 49, 50, 54-56 passim, 78. See also AFL-CIO American Federation of Teachers, 192 American Friends Service Committee, 77 Apex Hosiery Mill case, 91 anticollective bargaining, 170 arbitration, 25-6, 79, 188; "blank check," 154; compulsory, 121, 165, 173, 219-21, 225-27; grievance, 2947; open-end, 217; "restricted," 217; tripartite, 218; voluntary, 108-9, 217-19, 225-27 Armour, 71, 85 Bakke, Wight, 56, 61 base rate abnormality, 148 Blue Eagle, 93, 94 board of inquiry, 119-20, 176 board of public accountability, 109, 120-22

Braden, J. Noble, 40, 80 "business unionism," 56

Carter, Jimmy, 112 catch-up allowance, 147-48 "choice of remedies," 118 CIO, 5, 52, 56. See also AFL-CIO Civil Service, 192, 196, 201, 210. See also Taylor Law "clashing philosophies," 62 Clayton Act, 91, 92-3, 133 "code of ethics," 40 Cole, David, 20, 114, 188 collective bargaining, 6, 37, 41, 49-74, 76, 78-9, 144, 161, 175-76, 215; alternatives to, 71-3; "crisis," 17071, 180; "free," 93; shortcomings of, 73, 84; and Taft-Hartley Act, 107-8. See also Kaiser Steel Corp., TaftHartley Act, Taylor Law Commons, John R., 49, 53-66 passim, 69 Communists, 104, 146 community of interest, 195 Compulsory Arbitration Act, 173 Conciliation Service, 5, 84-5, 104. See also Federal Mediation and Conciliation Service Condon-Wadlin Act, 5, 189-90, 200-1, 224 "consent to lose," 66, 139 Construction Industry Stabilization Committee, 160 cost-of-living escalation, 149 Council of Economic Advisors, 222 countervailing forces, 162, 164, 166

240

Index Dash, G. Allan, 4, 20, 36 Davis, Will, 77 decision making, 6 0 - 1 democracy, 161; government in, 220; society, 211; survival of American, 165 Depression, the, 32, 49, 92, 116. See also Wagner Act "Device of the Common Rule," 52 Dewey, Thomas, 233 "discipline for cause," 37 "do it and grieve," 30 "dual unionism," 54 Dunlop, John, 4, 20, 70, 132, 188 Economic Stabilization Act, 139 Eisenhower, Dwight, 159, 176 Emergency Board, 227 "equality of bargaining," 51, 62-4, 76 "escalator clause," 160 "expansion of market theory," 54 Experimental Negotiating Agreement ( E N A ) , 187, 188, 217, 220 fact-finding, 165, 199-200, 204, 22730 passim fairness and equity, 66-7 "fair wage," 145 featherbedding, 103, 105, 113. See also Taft-Hartley Act Federal Mediation and Conciliation Service (FMCS), 36, 82-6 passim, 104, 169 federal sector, 228 Federal Shipbuilding case, 138 finality, 210, 213-30 Fitzsimmons, Frank, 159 Ford Company, 77 Gardner, John W., 74 General Motors, 4, 32, 34-6, 58, 78, 81, 90, 152 Goldberg, Arthur J., 20 Gomberg, William, 96 Gompers, Samuel, 49, 50, 78, 134-5 grievance procedures, 38-41, 182-85 passim, 190, 194, 213. See also arbitration group determination, 61-2, 77 guideposts, 167 Hartley, Fred, 101. See also TaftHartley Act Hillman, Sidney, 56-7 Hoover Commission for the Reorganization of the Federal Government, 4, 36 hosiery industry, 1 - 3 passim, 22, 30-3, 39, 78, 81, 85, 90, 91 Hoxie, Robert F., 49, 55-6, 72

impartial chairman, 41-4, 90 incentives, 182-85 individual bargaining, 51, 77 industrial democracy, 57-61 Industrial Relations Research Association, 14 inequity, interplant, 150, 160; intraplant, 150 inflation, wartime effect on real wages, 154-55; forces of, 215 intellectuals in labor, 53 interests disputes, 213 International Harvester, 138 International Ladies Garment Workers Union, 29, 90 Iron Age, 169, 181 Israel, 72 Jackson, Elmore, 77 jawboning, 177 "job consciousness," 51 "job control," 51 Johnson, Hugh, 93 Johnson, L. B., 110, 222 Jones and Laughlin decision, 99 Kaiser, Edgar, 188 Kaiser Steel Corp., 5, 36, 71, 83, 85, 116-22 passim, 168, 175-88; Fontana plant, 183-84; Long Range Sharing Plan, 36, 168, 185-86; Montebello fabricating plant, 185 Kennedy, John F., 5, 20, 168, 222 Kennedy, Thomas, 36 Kheel, Theodore W., 205-7 Korean War, 83, 110, 132, 134, 14657, 176. See also Truman, Wage Stabilization Board labor-management, 22, 35-6, 75, 77, 90, 104, 143, 162, 168, 177, 220-22 passim. See also National Labor Board, National Labor Relations Board, Taft-Hartley Act, Wagner Act Landrum-Griffin Act, 100, 111 Latimer Report, 142 "leapfrogging," 150-1, 192, 225 Leiserson, William, 29, 80, 82 Lewis, John L., 10 "Little Steel Formula," 4, 131, 14142, 151, 152, 160 lockout, 39, 69, 70, 89, 135, 136, 215 Long Range Planning Committee, 36, 168. See also Kaiser Steel Corp. Lorwin, Lewis, 135 MacDonald, David; 188 management: see labor-management Marxism, 50, 53-4, 56, 64

Index Mayor's Office of Administration (idea of), 196 Meany, George, 159 "med-arb," 34, 218 mediation, 40, 81-7, 118, 139, 214, 230. See also Federal Mediation and Conciliation Service "meeting of minds," 40, 60, 64-5, 7 5 7, 81, 87, 163, 213-17 passim, 222, 234 men's clothing, 3, 33 Meyer, Arthur, 77 Millis, Harry, 29, 80 Mine, Mill and Smelter Workers Union, 157 "mutual acceptability," 40, 213, 221 "mutual agreement," 64-6, 76, 81, 87 "mutuality of interests," 57 "mutual survival," 56 National Academy of Arbitrators, 35, 36, 80 National Association of Manufacturers, 136 National Defense Mediation Board, 79 National Fair Labor Standards Administration, 3 National Industrial Recovery Act ( N I R A ) , 89-98 passim, 134-35. See also National Recovery Act National Labor Board, 3, 94 National Labor-Management Conference, 35 National Labor Relations Act, 91, 135 National Labor Relations Board ( N L R B ) , 9 5 - 8 passim, 107 National Recovery Act (NRA), 3, 92-4 passim. See also National Industrial Recovery Act National W a g e Stabilization Board, 85, 132, 146 National War Labor Board ( N W L B ) , 4, 119, 133-35 passim, 175. See also War Labor Board negotiation of contract terms, 213 New York: (city) 29, 189-210, 224; (state) 85, 192, 224: Court of Appeals, 210, 224; Office of Collective Bargaining ( O C B ) , 20710 passim; Public Employee Relations Law, 5, 36, 189. See also Taylor Law Nixon administration, 155-60 passim, 176, 221 "no contract, no work," 215 Norris-LaGuardia Act, 92, 93, 104 no strike, no lockout, 38, 119, 153-54 "no surprise" concept, 24 Office of Price Administration, 158

Office of War Mobilization and Reconversion, 4, 132 "official unconcern," 95 "our kind of society," 165 Pearl Harbor, 136, 138 Pennsylvania law on compulsory arbitration, 226 Perlman, Selig, 49-56 passim, 62, 67, 69 Phillips curve, 158-59 Pittsburgh, 226 pluralism, 6 0 - 1 prenegotiations bargaining, 214 President's Advisory Committee on Labor-Management Policy, 5, 221 President's National LaborManagement Conference, 4, 35-6, 143 "private enterprise" system, 60 "private government," 162 private negotiations, 214; and public interest, 165-70 productivity factors, 149-50, 160 property rights theory, 96 Proposition 13, 224 Public Employees' Fair Employment Law of New York, 204. See also Taylor Law Public Employment Relations Board ( P E R B ) , 194, 199-206 passim, 210 public interest, 70, 71, 97, 109-10, 116-19, 161-74, 179, 214-17 passim, 222-23; compulsory arbitration and, 173; policy and regulation, 131-60; private negotiations and, 165-70; the strike and, 170-74 Quaker ideas, 64 railroad industry, 5, 81 Railway Labor Act, 56, 92n, 121, 135, 221, 227 Railway Labor Board, 94 "recalcitrant employer," 173 Reuther, Walter, 34 right-to-work, 102, 108, 112-13, 168. See also Taft-Hartley Act. Rock, Eli, 36 Rockefeller, Nelson, 5, 190, 205. See also Taylor Law Roosevelt, F. D., 4, 98, 131, 140, 231. See also Little Steel Formula, W a r Labor Board Schechter Poultry Corp. v. United States, 95 Sherman Act, 91 shipbuilding industry, 148

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Index show-cause, 227-29 Shulman, Harry, 58, 77 Simkin, William, 5, 32, 77, 82, 86 Smith, Adam, 162 "social inventiveness," 164 Social Security Act, 231 steel industry, 8, 71, 94, 168, 179, 187-88; Cooperative Wage Study Program, 18. See also Kaiser Steel Corp., "Little Steel Formula" steel strike, 5, 118 steelworkers, 147, 168 strike, 3, 39, 96, 103, 192; function of, 68-71, 89, 170-74, 176, 186, 213, 223; illegal, 225; organizational, 171; penalties, 201, 208-9; role of finalitv in, 215; substitutions for, 229; wildcat, 69, 89, 170. See also Condon-Wadlin Act, Taft-Hartley Act, Taylor Law Supreme Court, 38, 39, 176 "sword of Damocles" effect, 170, 181 Taft-Hartley Act, 51, 54, 84, 93, 9 8 122, 136, 144, 165, 176, 206 "tandem," 160; allowances, 148 Taylor, Edith, 27, 233 Taylor, George W . : advisor, 8; arbitrator, 22, 24, 29-47; biographical sketch, 1-8; collective bargaining theory development, 49-79; chairman, 78: counselor, 15-21; friend, 26-7; impartial chairman, 3, 21-3, 30, 36, 39; and Kaiser Steel, 178-82; maxims and anecdotes, 11, 13, 16, 17, 163-64, 221, 233; price and wage economist, 155-57; speaker, 14; Taft-Hartley attitude, 105-22; teacher, 10-28; umpire, 43-4; voluntary mediation concept, 85; writing, 13—4. See also accommodation, arbitration, collective bargaining, Kaiser Steel Corp., "Little Steel Formula," mediation, National Labor Relations Board, Taylor Law, Wage Stabilization Board, War Labor Board Taylor Law, 5, 36, 97, 189-211; amendments to original, 208-9; Article 209, Sec. 2, 229; criticism of, 205-ΰ; details of, 203-10; legal challenge to, 210 Teamsters Pension Fund, 113 Textile Workers Union, 90 Travia, Anthony J., 205 trilogy decisions, 38 tripartitism, 45, 81, 85-7 passim, 116, 122, 139, 155. See also Kaiser Steel Corp., Taylor Law, War Labor Board Truman, Harry, 5, 35, 101, 108, 132,

146, 175-76. See also Wage Stabilization Board, War Labor Board, World War II umpire, 43-4, 78 Underwear and Hosiery Review, 49, 66 unions, 30, 78, 90, 162, 214; countervailing powers, 164; misbehavior, 224; security, 67-8, 110-11; unfair practices, 113-14. See also CondonWadlin Act, individual unions, National Labor Board, National Labor Relations Board, Taylor Law, Wagner Act United Automobile Workers (UAW), 4, 32, 34, 36, 58, 152 United Nations, 77 United Steelworkers of America, 5, 38, 119, 188. See also Kaiser Steel Corp., steel voluntarism, 78, 85, 132, 139, 153, 163, 213, 229-30. See also arbitration, voluntary wages, control of, 157, 175; effect of wartime inflation on, 154—55; Nixon administration and, 157-60 passim; reductions in industry, 22; time-lag adjustment of, 156 Wage Stabilization Board (WSB), 56, 71, 83, 110, 132, 147-48, 151, 157, 176; compared with War Labor Board, 146. See also Korean War, Truman Wagner Act, 56, 62-3, 71, 76-8, 89, 91-8 passim, 106, 134, 162, 164-65, 171, 214, 231; pre-Wagner Act labor-management policy, 92-7 Walker-Turner case, 138 War Labor Board ( W L B ) , 25, 32, 35-6, 71, 79, 81, 110, 220; "alumni," 35; compared with Wage Stabilization Board, 146. See also World War II Webb theories, 49, 51-3, 62-3, 67 Wharton, Joseph, 2, 7; School, 1, 2, 89, 131, 232 willingness to lose, 40, 62 Willits, Joseph H„ 7 - 8 Wirtz, Willard, 4, 7, 110, 132, 231 Wilson administration, 133—35 Wilson, Charles, 34 Wisconsin school, 53 Witte, Edwin, 29 World War I, 91, 133-36; II, 4, 34-5, 79, 84-5, 116, 118, 131-46 passim, 151-52, 175-76, 220 "yellow dog" contracts, 91, 93, 135 Yugoslavian system, 72

Contributors

served as associate chairman of the Department of Industry at the Wharton School when George W. Taylor was chairman during the years 1960-63. He also worked closely with Dr. Taylor during the sixties when Taylor chaired Wharton's Labor Relations Council. Dr. Shils was chairman of the Department of Management at Wharton from 1968 to 1976, part of which time Dr. Taylor remained a professor in the same department until his retirement in 1971. Dr. Shils is currently professor of management at the University of Pennsylvania and Director of the Wharton School Entrepreneurial Center, and is still active as a labor negotiator and arbitrator in both the public and private sectors. He is the author of such books as Finances and Financial Administration of the School District of Philadelphia (1940); Automation and Industrial Relations (1963); and Teachers, Administrators and Collective Bargaining (1968); as well as over one hundred articles in major economics and labor relations journals. EDWABD Β. SHILS

j . CERSHENFELD is professor of industrial relations at Temple University. The author of three books and over twenty-five articles in industrial relations, Dr. Gershenfeld received the Ph.D. degree from the University of Pennsylvania, where he studied under George W. Taylor. His business experience covers ten years with two corporations. Dr. Gershenfeld was an industrial relations analyst for the Wage Stabilization Board, a research associate for the Shipbuilders Union, WALTER

244

Contributors and is currently active as an arbitrator, mediator, and fact-finder in labor-management disputes. maintains an independent consulting practice relating to the management of human resources, and is both a member of the faculty and a consultant to Rutgers University. He is one of the editors of Scope of Public Sector Bargaining and contributes to professional journals. Dr. Ingster works extensively with institutions of higher learning, and has been a labor relations advisor for the Commonwealth of Pennsylvania. He also worked with George W. Taylor during personnel research at Edward Hay Associates. BERNABD INGSTER

W I L L I A M M . WEINBERG is professor of industrial relations and chairman of the Research Department, Institute of Management and Labor Relations, Rutgers University, and also functions as an arbitrator and mediator. A doctoral student under George W. Taylor at the University of Pennsylvania, Dr. Weinberg was chairman of the New Jersey State Board of Mediation. He served as executive director of the New Jersey Public Employers-Employees Relations Study Commission, and was Vice Chairman of the New Jersey Study Commission on public employee negotiations problems. E. SIMKIN served as associate arbitrator with George W. Taylor in the hosiery, clothing, and dress industry, and was a graduate student under Taylor at the University of Pennsylvania. For more than three decades, Dr. Simkin has been a labor arbitrator for both government and industry, and has served as director of the Federal Mediation and Conciliation Service. He has been a lecturer at the Harvard School of Business.

WILLIAM

is a daily columnist for the Philadelphia Evening Bulletin. She first met George Taylor during the Philadelphia Orchestra musicians' strike in 1966.

ROSE DEWOLF