Management Problems Implicit in Multi-Employer Bargaining 9781512816143

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MANAGEMENT PROBLEMS IMPLICIT IN

MULTI-EMPLOYER BARGAINING Sylvester Garrett and

L. Reed Tripp

Published for the LABOR RELATIONS COUNCIL of the WHARTON SCHOOL OF FINANCE AND COMMERCE by the

UNIVERSITY

OF P E N N S Y L V A N I A Philadelphia 1949

PRESS

Copyright 1949 UNIVERSITY OF PENNSYLVANIA PRESS Manufactured in the United States of America

Sylvester Garrett is a member of the Philadelphia Bar and has served for several years as Labor Relations Coordinator in the flat glass industry for Libbey-Owens-Ford Glass Company and Pittsburgh Plate Glass Company. He was formerly Chairman of the Philadelphia Regional War Labor Board and Vice-Chairman of the National Wage Stabilization Board.

L. Reed Tripp, Ph.D., is a consulting economist in the flat glass industry. He is associated with Mr. Garrett in his work as coordinator of labor relations for Libbey-Owens-Ford Glass Company and Pittsburgh Plate Glass Company. He formerly served as Section Chief, Wage Stabilization Division, and Associate Director, Disputes Division, Philadelphia Regional War Labor Board.

Preface In their notable contribution to this series, Sylvester Garrett and Reed Tripp deal with the management problems that arise in effectuating a decision to bargain with a union on a multiemployer basis. It is no easy task to develop this subject. Management problems incident to the procedures of multi-employer bargaining cannot readily be distinguished from problems inherent in the practice of collective bargaining itself. A keen differentiation between these two types of problems is made in the report entitled Management Problems Implicit in Multi-Employer Bargaining. As a consequence, a considerable confusion in the current thinking about industry-wide bargaining should be cleared away. When a number of employers organize to engage in joint negotiations with a union, their principal task is to develop policies and positions which are, in a sense, the greatest common denominators of the needs of the individual concerns. No one policy will normally be ideally adapted to the needs of any one company. Group acceptance must be secured. A considerable part of the study made by Garrett and Tripp relates to the resulting problems. Those sections in their report dealing with the process of employer organization, the methods of handling selected subjects in negotiations, and the rise of conflicting interests among the employers are all valuable additions to industrial relations literature. In addition to the sections just referred to, the study includes analyses of two aspects of the management problem in joint dealing that should be mentioned particularly because they are pioneering contributions. Reference is to the treatment of two questions: (1) What are the objectives of management organization for multi-employer bargaining? (2) What controls may be desirable to assure reasonably uniform administration of group collective bargaining agreements? In grappling with these questions management is likely to cope with the most complex problems which confront it in the practice of multi-employer bargaining. Approximately half of the study is devoted to a practical "down-to-earth" discussion of typical difficulties encountered in the joint negotiation of specific issues. This study of cases is to discern the problems usually encountered in the specification of basic objectives. Issues discussed include union recognition and union security, general wage increases, wage incentives, wage [iii]

differentials, hours and overtime, technological changes, collateral wage issues, and seniority provisions. The authors conclude that "there should be recognition by both management and union representatives that all collective bargaining problems cannot be handled definitively in the group negotiations." In other words, although some subjects can be effectively dealt with on a joint employer basis, other subjects can usually best be negotiated on a company or local-plant basis. With this finding, an altogether new approach to industry-wide bargaining is indicated. Whether industry-wide bargaining is "good" or "bad" as a general proposition becomes subordinated to the question as to what functions should be assigned and withheld from the joint procedure. This is a new point of view but, it seems to me, quite a helpful one. The second question that has been singled out for special mention concerns the necessity of joint administrative controls over grievance handling if the benefits available to management through multi-employer negotiations are to be achieved. In a highly significant finding, the authors conclude that "Where no joint machinery has been established to facilitate employer cooperation in grievance handling and contract administration, the probability exists that some of the group will find that grievance handling or decisions reached by other companies in the group directly affect the handling of their own grievances or give rise to bargaining issues in ensuing negotiations." The relation between day-by-day grievance handling and multi-employer bargaining is thus made vividly clear. The first comprehensive consideration of the problems faced by companies who want to secure the advantages of multi-employer bargaining—notably avoidance of so-called whipsawing—has been made available in Management Problems Implicit in MultiEmployer Bargaining by Sylvester Garrett and Reed Tripp. The study will doubtless be of interest to those concerns, already engaged in multi-employer bargaining, which have felt the need for guides in the development of their programs. The GarrettTripp report will also be of assistance to many others who seek to arrive at a realistic and a comprehensive understanding of the many ramifications of industry-wide bargaining. , , ,.

GEORGE W .

Philadelphia December 28, 1948 [iv]

TAYLOR

TABLE OF CONTENTS CHAPTER

I II

PAGE

Introduction

1

Organization for Multi-Employer Bargaining

7

Multi-Employer Collective Bargaining Negotiations 1

Extent of Union Recognition and Union Security..

14

2

Wage Negotiations

18

(a) General Wage Increase

18

(b) Special Incentive Problems

23

(c) Wage Inequity and Differential Problems..

25

(d) Conclusion as to Wage Negotiations

28

3

Hours and "Overtime"

29

4

Technological Changes and Labor-Saving Devices.

32

5

"Fringe" or Collateral Wage Issues

38

6

Seniority Provisions

40

7

Employee Security Issues

42

An Evaluation of Problems in Negotiations III

14

44

Administration of the Agreement

49

Conclusion

59 [v]

Management Problems Implicit In Multi-Employer Bargaining Introduction

O

NE consequence of the paralyzing industry-wide strikes of the 1945-46 reconversion period was the development of a critical attitude by many observers toward the practice of "industrywide" collective bargaining. Such observers tended to reason that, since the great strikes of this period were industry-wide in incidence, they resulted from the practice of industry-wide bargaining. 1 This reasoning in part generated an unsuccessful effort to outlaw "industry-wide" bargaining in the Labor-Management Relations Act of 1947, in the hope that this would substantially reduce the possibility of industry-wide strikes. 2 Despite this widespread reaction, it is demonstrable upon reflection that the practice of industry-wide bargaining in itself did not cause the crippling strikes of the reconversion period. It appears probable that the extent of these strikes resulted largely from the industry-wide character of the unions involved, and from the nature of the issues at stake. In most of the industries affected, including steel, oil, meat-packing, automotive, electrical equipment, telephone, telegraph, and farm equipment, there was no industry-wide bargaining. In the railroad, coal-mining, and shipping situations, some form of industry-wide bargaining preceded the strikes, but can scarcely be said to have been the responsible cause of them. Nonetheless, some management spokesmen have urged proscription of industry-wide bargaining and have actively sought 1

A typical example of this reaction is f o u n d in t h e s t a t e m e n t of J a m e s H. M c G r a w in Business Week, December 6, 1947, pp. 76-77, characterizing industry-wide bargaining as a "public menace." s T h e Hartley Bill, passed by the House of Representatives prior to the joint conference resulting in t h e T a f t - H a r t l e y Act, prohibited competing employers f r o m e n g a g i n g in any concerted activities, collective bargaining, or arrangements In the formation of labor policy for collective bargaining unless all plants involved were less than 50 miles apart and regularly employed less than 100 persons. 80th Congress, lBt Session, H.B. 3020, Section 9 ( f ) ( 1 ) .

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this end.3 Such an attitude must rest, in part at least, on the belief that industry-wide bargaining is bad for management, whether or not it is good for unions. The widespread confusion as to the relationship between "industry-wide" bargaining and nation-wide strikes, as well as the current interest in its functioning, illustrate the necessity for careful study of the subject. There is a scarcity of factual information on the nature and forms of industry-wide bargaining, the advantages and problems it presents to unions and managements, its probable social consequences, and its effect on the likelihood of further government intervention in the handling of labor disputes. Only with answers to these and similar questions will it be possible to formulate intelligent general conclusions as to the value of industry-wide or multi-employer collective bargaining. The present monograph, as its title reveals, deals with only a limited aspect of multi-employer bargaining and does not purport to embody an over-all judgment as to the value of such a bargaining procedure. Rather, an effort has been made to deal with specific practical questions likely to be of importance in the development of multi-employer bargaining by any given group. These include: 1. How do employers organize for multi-employer bargaining? 2. What are the objectives of management organization for multiemployer bargaining? 3. What factors may lead to collapse of group bargaining? 4. How are particular bargaining subjects handled in multiemployer negotiations? 5. What typical conflicts of interest may arise in multi-employer bargaining groups? 6. What controls may be desirable to assure reasonably uniform administration of group collective bargaining agreements?

At the outset of our discussion, it should be stated that group bargaining offers distinct advantages to participating employers in many types of situations. In some industries, this type of bargaining may provide the only feasible method of stabilizing wages and other conditions of employment to a satisfactory extent so as to avoid "whipsawing" between employers in the granting of • A r e c e n t poll g r o u p polled a d d i t i o n of a C o m p a r e also

of l a b o r r e l a t i o n s d i r e c t o r s b y Business Week r e v e a l e d t h a t 53 p e r c e n t of t h e believed t h a t t h e L a b o r - M a n a g e m e n t R e l a t i o n s A c t s h o u l d b e " i m p r o v e d " b y b a n o n " i n d u s t r y - w i d e " b a r g a i n i n g ; Business Week, A u g u s t 21, 1948, p . 19. p u b l i c s t a t e m e n t s issued b y t h e N a t i o n a l A s s o c i a t i o n of M a n u f a c t u r e r s .

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concessions, or cutthroat competition based upon substandard wages and conditions of employment. There are situations also where the unified position achieved by the employers' group offers the only practical method of fending off a strong union's unilateral imposition of its demands upon individual employers. Multiemployer bargaining likewise tends to facilitate the collection of data and statistical material, and the retention of qualified personnel to deal with collective bargaining problems efficiently. Finally, this form of bargaining often provides the only feasible method of conducting negotiations without undue expenditure of time and effort by the employers and unions involved. All these advantages of group action do not exist in all the situations in which industry-wide or multi-employer bargaining is practiced, although usually the desire to obtain some or all of them has been an important factor leading employers to undertake joint action in collective bargaining with unions. In any given situation, employers considering this type of bargaining should ascertain what advantages they may reasonably expect to obtain from the relationship, and weigh them against the problems and difficulties which they individually and as a group are likely to encounter in acting jointly. The present paper thus has been written largely for the purpose of indicating what problems are likely to be encountered in this regard by the participating managements, and suggesting ways of avoiding or solving them, so that a reasonably informed judgment as to the expectable results of group action may be formulated. Notably, there are only a handful of industries in which industry-wide collective bargaining, regularly conducted on a national scale and covering substantially all of the industry, may be found. A Bureau of Labor Statistics study of last year lists the coal-mining, elevator installation and repair, glass and glassware, installation of automatic sprinklers, pottery and related products, stoves, and wallpaper industries as the sole illustrations of this type of bargaining. 4 There are, of course, numerous instances in which employers in a given industry join together on a regional, metropolitan-area, or "market-wide" basis,5 or where less than 1

6

Collective Bargaining with Associations and Groups of Employers, B L S Bulletin 897 (1947), especially Table 2, p . 3. T h e t e r m " m a r k e t - w i d e collective b a r g a i n i n g " is used by t h e T w e n t i e t h C e n t u r y F u n d ' s L a b o r C o m m i t t e e which r e c o m m e n d s t h a t m a n a g e m e n t a n d u n i o n s explore t h e a d v a n t a g e s of this t y p e of b a r g a i n i n g . Trends in Collective Bargaining ( T w e n t i e t h Century F u n d ) , p p . 232 fï.

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an entire industry is represented even though the negotiations cover a substantial portion of the industry, nationally, regionally, or locally. bargaining situations are probably most t Multi-employer numerous on a local basis in non-manufacturing industries. Many of these are city-wide contractors' associations or other employer groups in the building trades. Local service industries, such as laundries, dry cleaning, hotels and restaurants, trucking and building service industries, often bargain in employer groups and associations. Local bakeries, dairies, and retail stores likewise frequently are associated in bargaining. While such local group bargaining undoubtedly has a significant impact upon individual managements, more complex issues normally are faced when employers associate for bargaining purposes in manufacturing industries, or over wider geographic areas. Examples of group bargaining offering such greater complexity and scope of management problems appear in the needle trades, printing trades, glass and glassware, hosiery, textiles, railroads, milling, pulp and paper, and coal-mining industries. In analyzing the problems of group bargaining which devolve upon the participating managements, attention will be concentrated somewhat upon these multi-employer relationships of the more complex type, although the discussion of such relationships undoubtedly will have some relevance to bargaining groups of narrower scope. The present monograph is not limited to consideration of what may be described as instances of "pure" industry-wide bargaining. Many problems for participating managements in multiemployer collective bargaining arise whether all the given industry, or only a substantial part of it, is participating in the relationship. Thus, it has been profitable in the present study to review a wide variety of multi-employer bargaining relationships in attempting to analyze the major difficulties which this bargaining procedure is likely to present for participating employers. It is not easy in studying multi-employer bargaining to distinguish between the problems encountered by the participating managements as a result of collective bargaining itself, as distinguished from those attributable more directly to use of the procedure of multi-employer collective bargaining. Unless the importance of distinguishing the two types of problems is con[4]

stantly borne in mind, a study of management problems in multiemployer bargaining may be of little value. The areas of management function in which union penetration has occurred and the extent of such penetration have been considered recently by Professor Slichter 6 and Professor Chamberlain. 7 Professor Chamberlain's study notes the impact of collective bargaining on the financial control of business, particularly where unions press the "ability to pay" doctrine of wage determination, still greater effects on the production operations of management in such matters as job content, methods and speeds of operation, and even types of machinery, and the greatest degree of participation in the personnel decisions of management. Thus, any judgment as to the scope of management problems inherent in multi-employer bargaining should be formed only after a careful eifort to separate those effects upon management which are characteristic of the multi-employer bargaining relationship from those effects upon management which represent the normal and expectable impact of collective bargaining itself. The drawing of this distinction is not easy, since the basic bargaining objectives of unions may be, and usually are, industry-wide in nature whether or not the employers in the industry bargain together. 8 Thus, substantive issues of collective bargaining are often the same without regard to management organization for bargaining purposes. On the other hand, the procedure of joint bargaining undoubtedly does , present discernible problems to management as will be revealed in the ensuing discussion. Recent bargaining in the bituminous coal industry provides a profoundly important illustration of the necessity of drawing this distinction, if objective conclusions are to be reached in respect to the merits or disadvantages of multi-employer bargaining. Given the present state of unionization of the industry, the coal strikes of recent years probably would have occurred just as they did because of the nature of the collective bargaining objectives of the UMW, whether or not the employers purported to act jointly in the negotiations. 9 In recent negotiations in this industry, the "Slichter, The Challenge of Industrial Relations, Chapter II. 7 Chamberlain, The Union Challenge to Management Control, pp. 46 ff. 8 Cf. Taylor, Government Regulation of Industrial Relations, particularly pp. 75, 83 ff. 9 As indicated in Dr. Fisher's study in 1942, collective bargaining in the bituminous coal industry can be successful from the union viewpoint only if the entire industry is organized by the particular union, "Bituminous coal labor relations also support the contention of labor economista that successful collective bargaining must embrace substantially all producing

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efforts of the employers to conduct bargaining on an industry-wide basis actually appear to have been torpedoed by the UMW, which has obtained separate agreements from various segments of the industry and then forced acceptance by the balance. It is, therefore, not correct to assume, as most people do, that the recent strikes in the bituminous coal industry resulted from the practice of industry-wide collective bargaining. No small difficulty in studying multi-employer bargaining arises from the great variety of situations in which it is used, and the many forms which it has taken. The questions presented to participating managements inevitably vary somewhat in relation to the particular circumstances involved. Although some writers have set forth alleged advantages and disadvantages of multiemployer bargaining as though they invariably existed in all such arrangements, this is misleading.10 In any event, the present study does not purport to result from a detailed analysis of all of the various situations in which multi-employer bargaining is practiced. An effort has been made, however, to review a sufficient variety of multi-employer bargaining situations to present those problems which are fairly illustrative of the impact of multiemployer bargaining upon the freedom of action of the participating managements. For convenience, the problems thus analyzed are grouped into three general categories, depending on the phase of the relationship in which they are most likely to be encountered. fields s e r v i n g common m a r k e t s . " How Collective Bargaining Works (Twentieth Century F u n d ) , p . 277. Once t h e i n d u s t r y is t h u s organized, as is now t h e case in b i t u m i n o u s coal, t h e union has n o g r e a t i n t e r e s t in w h e t h e r t h e employers in t h e i n d u s t r y o r g a n i z e f o r t h e p u r p o s e of dealing w i t h t h e union. Actually, i t is possible f o r t h e union in such a situation t o o b t a i n g r e a t e r concessions when t h e employers a r e n o t effectively organized, a t least d u r i n g " u p s w i n g s " in the business cycle. 10 Cf. Ching, The Growth of Industry-Wide Bargaining, A m e r i c a n M a n a g e m e n t Association, Personnel Scries No. 109 ; and van Delden, Problems of Industry-Wide Collective Bargaining, American M a n a g e m e n t Association, P e r s o n n e l Series No, 96.

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I Organization for Multi-Employer Bargaining

The conduct of collective bargaining and administration of industrial relations bear directly on the operating efficiency of substantially all business enterprises of appreciable size. The formation of any multi-employer group for the purpose of collective bargaining, however informal, usually entails substitution of group action for individual employer action in the making of many decisions affecting industrial relations. No employer should enter into a multi-employer bargaining relationship without weighing the possible disadvantages of acting in conformity with group decisions against the gains which may be anticipated from participation in the group bargaining. Such a decision may not be difficult for the employer whose practical choice in bargaining alone is whether or not to go along with a "form" contract or other proposition leaving no room for negotiation. The extent to which group action is substituted for individual management action varies widely from one multiple bargaining relationship to another. The scope of the authority delegated to the group to act should be no greater than is essential to accomplish the purposes sought by formation of the group, and the participating employers thus should have a clear idea of the major common objectives which bring them together. Once these objectives are brought into focus, it is possible to consider what steps must be taken to permit a reasonable probability of attaining them, in view of the various economic, union, political, and personal factors involved. One group of employers finds it sufficient merely to pool their bargaining strength for périodic collective bargaining negotiations, leaving administration of the agreement and other bargaining problems to the individual employers dealing directly with the union or its locals. Another group may find it necessary to provide not only for cooperation in negotiations, but also for continuing control of administration of the agreement in the plants of all participating employers. Other employer groups may evolve programs falling between these extremes, depending on the circum[7]

stances. Needless to say, a paramount factor in this regard is the extent to which the unions involved press toward the superficially desirable but usually unattainable goal of absolute uniformity of all terms and conditions of employment. The needle trades, both in women's and men's clothing, have developed highly centralized authority for administration of the agreement, as well as for its negotiation, in those markets where they have successfully maintained collective bargaining relationships. Any recalcitrant non-complying member is subject to sanctions applied either by the association officers or by the union with association approval. Normally in these trades, important grievances and industrial relations matters are handled by association officials in cooperation with union officials and are not controlled by the individual management affected. These developments are not, as some suppose, simply the result of great union strength applied over the years to obtain greater control over the industry. In large measure, they are the result of the highly fluid nature of the industry, and the difficulties which this has occasioned for employers anxious to maintain decent standards. Employers in the needle trades may enter or leave business with comparative ease, since substantial investment in capital equipment is not required. A large proportion of the productive operations may be farmed out to other employers under the so-called "contract system," or even done by employees at home. Employers may move operations easily from one labor market to another. Most important, labor cost looms relatively large in the total cost of the finished garments. In these circumstances, the possibility of cutthroat competition based on substandard or sweatshop conditions is constantly present. As an authoritative recent study observes: "So footloose is the industry and so significant is any change in labor cost that even a minor wage differential may result in a shift from one market to another." 11 In the absence of the stabilizing influence of the union, there would be a return to the highly unsettled conditions of past years. Thus the union, in carrying out its objectives, is able to provide stable conditions with decent labor standards so that competition within the industry is more largely dependent on management efficiency, or style development, than on ability to achieve lower unit cost by "chiseling" on labor standards. The implementation of such a stabilization program u

S e e How

Collective

Bargaining

Works

( T w e n t i e t h C e n t u r y F u n d ) , p . 392.

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obviously requires constant supervision and control of the individual employers in the industry. This, therefore, is a major function of the typical employer association and union in this field. To some extent, the situation in the building trades and in book and job printing is comparable to that in the needle trades. For many years, when book and job printing employers were relatively unorganized, the union alone was responsible for bringing about a substantial degree of standardization of wages and conditions of employment by enforcement of its price scales. More recently, in some areas, relatively strong employers' associations have been developed and have asserted an interest jointly with the unions in the negotiation, interpretation, and enforcement of the agreements. In such cases, the employers' association has full power to discipline members who do not observe the terms of the agreements, and also acts for the individual employer in adjusting disputes with the union under the agreement. 12 In the building trades, the union business agent often deals directly with the various individual employers as to questions arising under collective bargaining agreements. Questions not thus settled are then referred to a committee of representatives of the employers' association and the building trades council. As might be expected in such a relatively unstable industry, the union plays a dominant role in stabilizing wages and other conditions and ofttimes is welcomed by the employers' association as a policeman to enforce standards upon competing non-association contractors as well as upon those who have come within the association fold. 13 Employers in more stable industries, with large capital investment and relatively smaller proportional labor cost, may not feel the same need for relatively close supervision of administration of the collective bargaining agreement. Employers in such industries are more stable and less mobile because of the large investment in plant and equipment. Competition in the reduction of productive cost is, in the nature of the operations, more likely to be in terms of scientific improvement in technique, machinery, and processes, in the development of product differences, and new lines or combinations of products. At least the relationship between wage rates and unit labor cost is likely to be substantially less obvious than in the needle trades, service industries, printing, ™Ibid„ pp. 144-48. 13 Ibid., especially p p . 205-7, 220-22.

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trucking, building trades, and the like.14 In such a situation there may be less incentive to seek substantially uniform central administration, and perhaps more difficulty in obtaining such a degree of uniformity. These observations are general, of course, and it must be recognized that the extent of union pressure to achieve uniformity or apparent uniformity in contract administration is a potent factor in determining how f a r the employer group should go in setting up its organization to deal with day-to-day problems of administering the agreement. Union attitudes and other relevant circumstances necessarily are subject to change or evolution, moreover, and the possibility of developments of this sort can be anticipated. Whatever the industry, however, it is clear that the acceptance by all participating employers of the necessity of conforming to group decisions is essential if the relationship is to prove successful. 15 No one, of course, voluntarily submits to group decisions unless he is convinced that over the long run the disadvantages of such a move will be at least offset by the gains which result. To formulate a judgment on this subject not only requires knowledge of the scope of the authority to be delegated to the group or association, as indicated above, but also requires a determination of the manner in which the group authority will be exercised, and the extent of the group control over the observance of group decisions by individual members of the group. Various multi-employer bargaining groups have developed widely different methods of determining group policy and exercising group authority. Some groups have set up incorporated associations and conferred authority upon the officers, or sometimes the directors, to conduct negotiations and enter into agreements binding upon all members.16 In other instances, a negotiating "Negotiation of uniform hourly rates in several competitive plants with complicated production processes falls f a r short of yielding equal unit labor cost. This is especially true where the plants have varying incentive or production bonus systems, which are not easily handled in multi-employer negotiations because of the infinite variation in the circumstances affecting the incentive system in each plant. Jc Unfortunately, many employers entering into a joint bargaining relationship do not appreciate this fact. The recent defection of the chain store group in the N e w York City trucking strike has resulted in a wage increase greater than the employer group was ready to give. If the individual companies cannot maintain a united front at this time, they lose the greatest advantage which multi-employer bargaining offers. See New York Times, September 11, 1948, p. 1. 16 Cf. National Association of Pressed and Blown Glassware, the United Potters Association, the stove industry Manufacturers Protective and Development Association, and the N e w York Shipping Association. See general discussion in Employers Associations and Collective Bargaining (Bureau of Labor Statistics), P a r t II, pp. 56-60.

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committee may be established, with the understanding that agreements reached are not binding until approved by the association or by a majority of the members. In the national negotiations conducted on behalf of Class I railroads, a national committee of fifteen representatives is established with appropriate regional representation, and each participating carrier executes a power of attorney giving its representatives authority to enter into binding agreements on the matters in negotiation. Other groups merely may set up an informal bargaining committee on a representative basis, and have an informal understanding that decisions reached by the committee will be accepted by the individual members of the group. 17 The Pacific Coast pulp and paper industry group, including eighteen companies and thirty-two plants, establishes a bargaining committee to act subject to ratification by a majority of the plants. 18 Under this arrangement, any participating employer can withdraw from the group prior to the commencement of a given scheduled collective bargaining conference, but is bound by the result approved by the majority in the absence of such withdrawal. Still others, as in flat glass, may have all individual employers participate in all negotiations and determine the various moves made. In this industry, two major negotiating groups exist, one including the Libbey-Owens-Ford Glass Company and the Pittsburgh Plate Glass Company, and the other including the American Window Glass Company and certain smaller sheet glass companies known as the Fourco Group. Infinite variety is possible in such arrangements, and the actual organization and procedure followed usually depend on the facts of the given situation. Where, as in the trucking industry, several thousand employers may be involved in a single negotiation, delegation of authority to a small bargaining group is essential to obtain satisfactory results. This is not true where only a few companies constitute the group. The prime objectives in determining organization and procedure for multi-employer bargaining should be (1) to assure that the interests and problems of each individual company will be 17

For example, the National Association of Cotton Manufacturers is a trade association whose Industrial Relations Service Department performs various services f o r its members, including the Fall River and N e w Bedford bargaining groups. Actual negotiations, however, are conducted by a committee of manufacturers whose personnel may change from year to year. Contract administration is on an individual mill or company basis. 13 Causes of Industrial Peace . . . Case Study, No. 1 (National Planning Association) pp. 8-9, 48-49.

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given the greatest possible degree of consideration in determining the group policy, and (2) to assure reasonable efficiency in the actual conduct of negotiations and the reaching of decisions. No doubt the greatest efficiency in carrying on negotiations could be obtained if a single individual spoke for the group with complete authority to bind all members. Few, if any, managements would be willing to confer such authority upon a single negotiator. The problem, of course, is like most other problems of organization in modern society, and satisfactory group decisions are possible if the affected employers are realistic enough to forego immediate self-interest in order to permit group development of a sound long-range program. There is reason to doubt that this aspect of multi-employer bargaining has been sufficiently analyzed by many managements participating in this form of bargaining. In recent negotiations, for example, we may find a number of instances in which the industry group has broken ranks after group decisions have been made, and some individual managements agreed to greater bargaining concessions than were satisfactory to the entire group. In the end, of course, the balance of the group has fallen in line. Notable instances of this have occurred in the bituminous coal industry. There, in the 1947 negotiations, the captive mine operators broke ranks and "wrote the ticket" for the entire industry by their agreement with Mr. Lewis. Then, in the 1948 negotiations, another group reached settlement first, and the captive mine operators were among the last to follow the leader. These defections in management ranks are nothing new in the coal industry.19 The 1946 and 1948 New York City trucking strikes both were settled only after the industry group had broken ranks. Many other instances of this type of breakdown of multi-employer bargaining can be found from time to time in the daily press. No doubt the possibility of this type of failure is enhanced by lack of a long-range viewpoint and full appreciation of the difficulties and responsibilities involved in multi-employer bargaining. Nowhere is an appreciation of these difficulties and responsibilities more important than in consideration of the authority to be given to the group representatives or officers in negotiations, and of the procedures for assuring fair consideration of the interests and u

How

Collective

Bargaining

Workt,

Chap. 6, passim.

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problems of all members in the determination of group policy.20 Just as the group ranks may be broken by those who are overcome by their anxiety to settle, even at greater cost than is appropriate in the group judgment, so may they be broken by those who refuse to abide by the result of the negotiations, or to live up to the agreement. In some relationships, this type of difficulty has been anticipated, and provision made for the application of sanctions either by the association or the union, or sometimes by an arbitrator. 21 Even when no penalties are provided, the success of the relationship requires that no employer should enter into multi-employer bargaining without definite acceptance of the necessity of conforming to group decisions, once such decisions have been made. 20

I t is r e p o r t e d t h a t t h e s o u t h e r n bituminous coal o p e r a t o r s this s u m m e r t r i e d t o b a r one o p e r a t o r , M r . H u b e r t K. Cook, f r o m negotiations w i t h t h e U M W because he w a s r e g a r d e d a s unduly s y m p a t h e t i c t o w a r d union demands. Fortune, S e p t e m b e r 1948, p . 131. 21 N o t a b l e i n s t a n c e s of this t y p e of a r r a n g e m e n t a r e f o u n d in t h e needle t r a d e s a n d p r i n t i n g trades.

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II

Multi-Employer Collective Bargaining Negotiations The nature of the difficulties encountered by participating managements in group action may be illustrated by actual collective bargaining negotiations covering specific issues. The ensuing discussion, while by no means exhaustive, is calculated to bring some of these difficulties more clearly into view, to suggest the existence of others, and to set forth representative solutions to some of them, as developed in specific situations. It should not be inferred from this discussion that multiemployer bargaining is simply a long succession of problems and headaches not worth the effort. The valid reasons for substituting group for individual employer action usually are of such importance as to override the expectable difficulties of group action. The ensuing discussion may be valuable, however, in furnishing employers and union officials with some notion of the responsibilities which all parties must accept if group bargaining is to succeed, and in indicating types of problems to be anticipated and possible techniques for their avoidance or solution. A further note of warning may be appropriate. Much of the ensuing discussion deals with efforts by unions to impose uniform contract terms upon all employers in the group. This drive toward uniformity of wages, hours and conditions of employment is by no means manifested only in multi-employer bargaining situations. Rather, the drive toward uniformity in such matters must be recognized as a basic drive of most unions, which consciously strive to "take wages out of competition." Employers cannot avoid pressure toward uniformity merely by refraining from joint action. They may find, in fact, that their collective bargaining on an individual basis is largely a matter of conforming, as a minimum, to the results of another settlement between the same union and a leading employer in the industry. 1 . E X T E N T OF U N I O N RECOGNITION AND U N I O N

SECURITY

A t some stage in the operation of a business enterprise, various matters of fundamental policy have to be determined to guide [14]

the day-to-day decisions necessary to keep the enterprise constantly moving toward realization of its objective. Such a policy determination must be made by the typical management to shape and guide its program for dealing with the employees, who are essential to successful operation. Within recent years, many business enterprises were forced to recast their policy in this respect when faced with demands that they deal with unions representing their employees. Once a bare decision to "bargain collectively" with a union has been reached, however, managements usually vary widely in their implementation of the decision. A decision to engage in collective bargaining may simply constitute grudging acceptance of what seems as unpleasant as it is inescapable. A management with this attitude is likely to seek studiously to circumscribe collective bargaining within the narrowest possible limits. Another company may enter collective bargaining with a conviction that over the years such a method of dealing with its employees can contribute to efficiency of operations and lower unit cost. The latter type of company is likely to strive constantly to develop cooperative relations with the union and its officials, and through them to enlist the greatest possible cooperation from the employees. It is not unlikely that a group of employers in the initial stages of a multi-employer bargaining relationship will find substantial variation in the extent to which the different component employers accept the union and are ready to deal with it.22 Some of the employers may well be ready to recognize and deal with the union on all subjects affecting the employees' wages, hours, and conditions of employment, while other employers are unwilling to bargain with respect to specific subjects, such as pensions, insurance benefits, arbitrability of grievances, review of certain types of disciplinary action, and shift scheduling. This difference of approach can, and often does, continue down through the years even though employers are bargaining in a group. Whenever an issue is presented which highlights this difference, some difficulty may be expected in reaching a satisfactory compromise solution. A more sharply defined difference of opinion sometimes arises in dealing with the matter of union security. The closed shop, or 22

Some employers r e m a i n outside of b a r g a i n i n g associations in t h e i r i n d u s t r y because of u n willingness t o recognize t h e union o r g r a n t a p a r t i c u l a r f o r m of union security to i t b u t a d o p t all b a r g a i n i n g concessions g r a n t e d t h e union by t h e association.

[15]

more broadly union security, has been debated bitterly and doggedly for years, not only in bargaining negotiations, but in public gatherings and legislative chambers. Many state legislative bodies have proscribed the more complete types of union security clauses while Congress moved in the same direction in the Labor-Management Relations Act of 1947. Management spokesmen themselves are divided in favoring various degrees of union security. Many employers who have participated in multi-employer bargaining are among those who look with favor on a high degree of union security. It is interesting, in this connection, that many of the earlier employer associations in the needle trades, the book and job printing industry, the hosiery industry, the construction field, and in newspaper publishing as well as many other industries, were established primarily for the purpose of combating unionism. Some few non-union employer associations may be found in these fields today, but the bulk of the employers in these industries since have accepted a considerable degree of union security as either desirable or unavoidable; in many instances, prior to the impact of the Taft-Hartley Act, they operated under closed shop contracts. Indeed, in those industries where the union is recognized as stabilizing competitive operations which would otherwise be relatively fluid, the employers' group may believe it highly desirable to grant the union a closed shop, union shop, or some other effective form of union security. Such a concession not only permits the union to control and be responsible for its individual members, but also secures it in large measure from loss of its position as bargaining representative. Both of these factors strengthen the union's hand in performing its functions and permit it greater opportunity to concentrate on other important problems of the industry. Thus, in the book and job printing industry, where collective bargaining agreements generally reflect a design to standardize and stabilize labor conditions, the closed shop was general in incidence prior to the Taft-Hartley Act.23 In respect to the even more unstable building trades, one qualified observer has stated: Some responsible employers, in fact, favor it (i.e., the closed shop) because of conditions prevailing in the industry and they do not oppose cost-increasing practices and regulation of apprentices lest they undermine union aid in equalizing labor costs. Since labor is between 20 and 50 per "How

Collective Bargaining

Works,

pp. 142—43.

[16]

cent of total construction cost, the pressure to pay less than standard rates is very great. This is especially true for smaller contractors. As a result the larger contractors look to the union to "keep the contractors in line." To do this effectively the union needs the closed shop.24

In the needle trades, likewise, it has been common to find closed shop provisions. In men's clothing where the first employers' associations existed largely for the purpose of combating unionism, this type of organization has been supplanted by groups which have readily granted the Amalgamated Clothing Workers a closed shop throughout the bulk of the industry. 25 There is little doubt that employers in this industry tend to regard a strong union as of outstanding importance in stabilizing the industry. This attitude goes far to explain the negotiation of a five-year closed shop agreement with the Amalgamated covering most of the employees in the industry, shortly before passage of the TaftHartley Act. Even where the importance of the union as a stabilizing factor in the industry is not so obvious, some employers are convinced that operating efficiency is best served by complete acceptance of the union, including the granting of a closed or union shop as a device to stabilize and solidify relations with the union. This appears to be the situation in the newspaper publishing field.26 Nonetheless, it must be recognized that many employers in multiemployer bargaining groups look upon the granting of a closed shop or union shop as visionary in the extreme and fraught with grave danger for the future of our democratic institutions. In one recent group negotiation, where the union sought a union shop, it finally developed that all companies in the group, except one, were ready to make such an agreement. The one holdout, with a number of plants not actually involved in the negotiations, had long and successfully adhered to a policy laid down by its board of directors of opposing any form of union security clause. In the end, this policy gave way to the necessity of reaching a satisfactory group decision in the particular negotiation. Even after the Taft-Hartley Act narrowed the area of possible controversy in dealing with union security issues, there remained ample room for difference of opinion between managements on this point. As indicated in the 1948 soft coal negotiations, there Ibid., p. 212. Ibid., pp. 403-5. 420. "Ibid., p. 66.

24 x

[17]

may be serious differences between employers in the group as to the meaning and application of the law. The captive mine owners refused to grant a union shop to the UMW in the absence of compliance with certain provisions of the Act. Other operators were not deterred by these provisions from entering into a union shop agreement. The conspicuous strikes in 1947-48 by the International Typographical Union and other similar strikes also are indicative of difficulties of adjustment to the legislative standards. It is thus apparent that the legislative narrowing of the types of union security which may be granted lawfully did not eliminate the possibility of serious differences of opinion in employer groups as to what is practical, as well as lawful, in dealing with issues of this sort. The most troublesome differences of opinion among employer group members over the union security issue occur mainly in the early growth of a multi-employer bargaining relationship. Longer established bargaining groups find fewer points of difference among their members on this subject, apart from the impact of legislative changes, whether their adopted formula is based upon the closed shop or other types of union security and cooperation. 2 . WAGE NEGOTIATIONS

Multi-employer negotiation of wage issues usually involves a complex of problems, including those relating to the objectives and formulation of wage policies, the subsequent development of a unified management position within the group, and the application of negotiated wage settlements to different employer members. In addition to group consideration of general wage levels, multiemployer negotiations are often faced with questions of job-rate relationships, incentive and piece-rate plans, geographic differentials, and special group wage adjustments such as may be necessary for maintenance workers in contrast to direct production workers. (a)

General Wage Increase Basic management wage policies are not easily formulated under any set of bargaining circumstances, and the adoption of sound policy in the face of demands by a strong and widely organized union may be particularly difficult where the employer is acting alone. A recent study of company statements as to the bases for their wage policies reveals great diversity of thinking and apparent inconsistencies in such statements. Most of the [18]

companies studied are concerned primarily with what other companies are doing with respect to wages, as demonstrated by the almost unanimous interest of the group in comparative wage surveys. Although preference is stated by most companies for relating their wages to community wage levels, industry orientation of wage policies, both locally and over a broader area, is also revealed by the study to be a very important factor. 27 The handling of wage questions by multi-employer bargaining groups appears to be most successful on a local-area basis. Where the group is composed solely of companies in one industry in a particular locality, group determination of wage policy is made easier by the substantial homogeneity of the group. Nonetheless, companies from diverse industries have bargained together successfully under the auspices of the San Francisco Employers Council, where a homogeneous employee group was involved and local labor market conditions were a dominant consideration, rather than industry conditions. Despite the San Francisco and similar local experiences, it generally appears that multi-employer bargaining tends to develop an industry orientation of wage policy. Where the bargaining group includes companies from widely different labor markets, of course, such an orientation may lead to conflict with local wage levels in some communities. Thus, some bargaining groups have recognized geographic differentials in wage scales between outlying areas and market centers. 28 The conflict between following industry wage patterns and trying to keep in line with local-area levels is not limited to industry-wide bargaining. Multi-plant companies recognize the difficulty of consistency in this regard, and most companies which deal with widely organized unions have felt the impact in recent years of industry wage patterns which are often effective over a much larger area than the local community. A broadening of the geographic area of group bargaining in a given industry may be expected to accentuate the necessity of defining the industry closely if a satisfactory wage policy is to be developed. For example, in the West Coast pulp and paper industry bargaining group, the paper product fabricators have ^Lester, Company Wage Policies ( P r i n c e t o n U n i v e r s i t y , I n d u s t r i a l Relations Section, 1948). For example, the silk and rayon dyeing and finishing: industry, a n d established geographic wage differentials u n d e r n a t i o n a l b a r g a i n i n g in E n g l a n d a n d Sweden. Lester a n d Robie, Wages Under National and Regional Collective Bargaining (Princeton University, Industrial Relations Section, 1946), p p . 66, 97. Various branches of the needle trades, as well as coal mining, have similar differentials.

28

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sometimes found that a wage policy based upon their economic requirements of the time is somewhat at variance with a policy suited to the pulp mills in the same bargaining group. 29 Variation of product and difficulty of strict industry definition are factors, along with geographical location, which would make joint bargaining of northern and southern textile mills difficult. In order to assure substantial harmony of interest and identity of problems within the group, the West Coast pulp and paper employer group appears to have found it desirable to exclude all "converter" or secondary manufacturing establishments, except those which are integrated with primary manufacturers, either by location or management. In addition, this West Coast group has emphasized some limitation of the subject matter for joint collective bargaining, with reservation to local plants or companies of the obligation to bargain on other matters. Thus, harmony of interest is achieved in some measure by confining group negotiations to those matters in regard to which the participating members are more nearly alike. Consideration of factors of this sort before setting up a multi-employer bargaining group is essential, since there can be no implementation of collective bargaining objectives without an understanding of what the objectives are. If a major objective of the wage policy is to develop industry stabilization of wages, and to preclude whipsawing on upswings of the business cycle and undercutting on downswings, multi-employer bargaining in an industry can contribute materially toward that objective. If the objective, however, is to stress adherence to various community rate levels, industry-wide bargaining covering more than one area may be difficult at best. A hypothetical example may serve to illustrate the many different interests which are likely to be important in any large group of employers dealing with a general wage increase issue, if the various plants are located in different labor market areas. Employer A may believe that relatively high wage rates result in lower unit labor cost by attracting better-type employees and developing favorable employee attitudes; or he may find himself faced by neighboring plants in a high wage rate area which require a higher wage level than other members of the industry. Thus, he may favor granting a very substantial general increase as a " S e e Causes

of Industrial

Peace

. . . Case Study,

[20]

No. 1, p p . 68-66.

clean-cut way to wind up the negotiations. Employer B, in a lower wage rate area and with a higher unit labor cost, may be convinced that any substantial increase in payroll cost, such as Employer A would accept, would jeopardize his ability to continue in business. Employer C, in another labor market area, may be convinced that a substantial increase in payroll cost is permissible from his own viewpoint, but be confronted with community or customer pressures toward granting a lesser amount of increase. Because of peculiar manpower or staffing problems, Employer D may wish to grant a greater increase in lower-rated jobs, particularly in the starting rate, with a correspondingly smaller increase to higher-rated jobs. Other employers in the group, faced with other factors more or less unique to their own situations, such as problems of recruiting or holding skilled maintenance employees, may have still different interests to consider in determining their positions on a general wage increase issue. With these various interests playing among the employer group, there are bound to be varied reactions to the initial union wage proposal. If, for example, the union has asked a 25-cent per hour general increase, Employer A may believe that failure to grant at least a 15-cent per hour increase will interfere with his program for recruiting and maintaining a high type working force. Employer B might regard any increase of more than 5 cents per hour as ruinous. Employer D may favor an 8-cent general increase with an additional average payroll cost of 4 cents per hour concentrated in the form of special adjustments to lower-rated jobs, or possibly to maintenance jobs. The important fact, of course, is that each management's position is determined largely by the operating conditions which it must face. Thus, any common program which is evolved normally represents a compromise which, in varying degree, is distasteful to some portion of the participating employers unless, as rarely happens, their interests and attitudes are virtually identical. Moreover, once an initial decision is made in response to a union demand, it must be borne in mind that during the course of the negotiations circumstances may arise which will force reconsideration of the management position. Thus, if the employers decide to offer a 5-cent general increase initially, and move to 8 cents per hour, in order to lead to a settlement at 10 cents per hour, without any other adjustments, it may develop that the [21]

union will concentrate on obtaining special rate adjustments in addition to a flat increase of 10 cents per hour. In our hypothetical situation, such a union move would furnish Employer D with a cogent argument for reviewing the original management decision. Not infrequently this type of development has generated considerable friction within the management group which could scarcely arise in individual company negotiations, and in one recent situation led a major company, whose representative was serving as chairman of the companies' negotiating committee, to break ranks and settle individually with the union for 4 cents per hour more than was acceptable to the whole group. The differing ability of various companies in a group to absorb a particular wage increase can produce interesting consequences. If conditions generally indicate that a wage increase is required, and the bulk of the employers can meet the added cost burden, it is doubtful that the inability of a minority of the group to absorb the increase will be of controlling importance. Thus, the needs of the bulk of the group are likely to be served, even though this throws some of the employers into a dangerous cost position. When this type of situation arises, the resulting agreement may establish a new wage level for the whole group, but provide special differentials or machinery for later negotiations of differentials for the weaker companies. This has been done in the bituminous coal industry.30 There is also the possibility that the union, rather than lose the jobs at a particular employer's plant, in this kind of situation will seek to aid him in improving the efficiency of operations and reducing unit cost. In the full-fashioned hosiery industry, both the employers' association and the union have striven to improve efficiency of operations in marginal mills,31 and the Amalgamated Clothing Workers has cooperated frequently in reorganizations designed to increase efficiency, and actually has given direct financial aid to firms which were temporarily embarrassed.32 By these various devices, then, unions and employers alike have striven to keep marginal employers in business without, at the same time, permitting their financial plight to be a controlling consideration in determining the wages of the entire group involved in the negotiations. x Hov> Collective Bargaining •¿Ibid., pp. 604-6. "Ibid., pp. 431-36.

Works, pp. 239, 275.

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(b)

Special Incentive Problems In the case of manufacturing industries particularly, the difficulty of determining a common policy as to wage increases may be enhanced by the varying incentive programs of the component companies. Whereas wage rates and job content, at least for "key" hourly-rated jobs, may be relatively similar among the various companies, their incentive programs may vary widely in the incentive principles applied, in the methods of computing incentive or bonus payments, in the level of earnings yielded, and in the relative proportions of total employees covered by incentives or bonuses. In those companies where, in the first instance, incentive standards were loosely set, or where, over the years, "slack" has crept into the incentive program, it may be important that any general increase be applied only to straight-time hourly rates, and not to incentive base rates, or perhaps that the general increase be applied only in a flat cents-per-hour amount, without being included in the incentive base.33 Let us suppose that the management group in a multi-employer bargaining relationship is convinced that a "general increase" of 10 cents per hour is necessary to satisfactory conclusion of the negotiations. Employer A has virtually all of his employees working under incentive or bonus arrangements, and their average hourly earnings as a result run 40 per cent above their average hourly wage rates. Employer B, on the other hand, has only 40 per cent of his employees working under incentives, and their average incentive earnings run only about 20 per cent above their average hourly rates. Employer C may have about 50 per cent of his employees working under incentives or bonuses, and their earnings may average about 50 per cent above base. In this situation Employers A and C may be expected to oppose inclusion of the 10-cent-per-hour general increase in the incentive base, while Employer B is likely to desire inclusion of the increase in the incentive base rates, in order not to imperil the operation of his incentive system. Employer A can point out, of course, that the 10-cent general increase actually will involve an increase of 14 cents per hour in payroll cost if it is applied to his incentive base rates. To the argument that such a payroll cost impact 33

Quite a p a r t f r o m industry-wide bargaining, this latter practice was followed widely from the war years through 1947 ; e.g., U. S. Steel, General Motors, General Electric, Westinghouse, etc.

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is solely the result of production above a fair day's work, Employer A can well reply that his incentive standards have become too loose or that he has extended bonuses to cover non-production groups without concomitant reduction in unit cost. Employer C, with an anticipated 121/2-cent-per-hour payroll cost, may feel even more keenly than A that his incentive standards are loose, even though he has not extended incentives or bonuses to employees whose work is not susceptible to accurate time studies. On the other hand, Employer B's incentive program is so tightly engineered that the earnings possibilities for his employees on incentive barely suffice in many instances to induce the employees to maintain their output at an incentive pace. Thus, whereas Employers A and C may seek to apply the general increase to all workers in a uniform cents-per-hour-amount, Employer B may insist upon its inclusion in all incentive base rates. Adoption of a compromise position in this type of situation may be difficult, since any formula for this purpose must be fair not only as among the employers, but also must be acceptable to the various local union groups involved. In the coal industry, application of general increases to incentive operations is left to direct negotiations between the locals and the individual employers.34 In 1947, the "Big Four" rubber companies in joint wage negotiations stipulated that the general increase granted should be "factored" into the incentive systems at each plant so as to produce an average increase similar to that granted all other workers on an hourly basis. In the flat glass industry in 1947, half of a general increase was applied to incentive base rates in part of the industry and all of the increase applied to base rates in another segment of the industry. Experiences similar to the above raise the more basic question of whether an individual company's wage policies can long exist if industry-wide collective bargaining is followed. It should be remembered that conformance to the unified group policy to a considerable degree is inherent in the multi-employer bargaining process. Apart from the techniques of application discussed above, group negotiations where incentives exist may be limited to prescribing uniform minimum rates, with the recognition of locally " A s early as 1898, v a r y i n g " t o n n a g e " r a t e s were established f o r t h e men actually mining- coal in the fields then dealing with t h e U M W , w i t h local differentials. Some of this differential s t r u c t u r e still exists. How Collective Bargaining Works, p p . 238-39.

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negotiated pay scales or bonus programs above these minimum standards. It has been the writers' experience in the flat glass industry that the two major companies bargaining jointly have not exchanged any information as to productivity or data which might lead to a comparison either of total unit cost or of unit labor cost. This attitude is reasonably expectable where companies, in bargaining jointly, are concerned with avoidance of major whipsawing rather than by a desire to use the joint bargaining to stabilize competitive conditions. In this respect, heavy manufacturing industries, such as steel, autos, pulp and paper, milling, and flat glass, appear to differ markedly from the needle trades, printing trades, service industries, and others, where stabilization of labor cost among various companies may be a principal objective. (c)

Wage Inequity and Differential

Problems

The principle of equal pay for equal work is frequently the basis for collective bargaining demands in multi-employer negotiations for elimination of geographic differentials, of intercompany differentials, and of inter-plant differentials. In multiemployer bargaining it is natural for the union representatives, in preparing for the negotiations, to search for instances of apparent inequities or inequalities among the wage rates paid by the various employers in the group. In the negotiations thereafter, the union committee may seek to have all lower rates for what is apparently the same job raised to the level of the highest-rated job which can be found. While this approach is by no means universally taken,35 the tendency for unions to make such a move is strong because of internal political considerations, and alleged wage inequities have become an important part of some multi-employer negotiations, particularly where operations are complicated and a wide variety of different jobs exists. This type of issue can be difficult to handle, since jobs with the same or similar titles may vary greatly in actual duties and responsibilities, and an accurate factual comparison may be impossible in negotiations with numerous representatives of various local union and management groups. If such issues are not handled intelligently, the rate structure of a particular plant or company may be put out of line and seeds sown "Lester and Robie conclude that wage uniformity is not an essential characteristic of multiemployer bargaining. Op. cit., pp. 90-91.

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for operating problems and presentation of resultant inequity claims in later negotiations. Where such individual rate adjustments result in any appreciable increase in payroll cost for particular employers in the group, moreover, it is likely that such employers will seek to have such added payroll cost given consideration in determining the amount of general increase or other concession granted in the negotiations. This effort will not be welcomed by other employer members of the group, whose rate structures are not affected by the correction of alleged inequities and who want to concentrate most or all of the increased payroll cost resulting from the negotiations in a general increase in wage rates. Apart from the question of cost impact of inequity adjustments, there may be differences of opinion as to the technique for meeting them. Some employers, with particularly aggravated problems, may favor adoption of a job evaluation or "job classification" technique.36 Others may look upon such an approach as cumbersome and expensive, and prefer direct inequity negotiations in the bargaining conference. Still others, with comparatively satisfactory wage structures, may desire to oppose taking any action as to inequities in the joint conference. The determination of appropriate compensation for skilled maintenance employees may involve both incentive and "inequity" aspects in multi-employer bargaining. The full-fashioned hosiery industry, which provides uniform piece rates in great detail for production operations in its "National Agreement" leaves the hourly rates of such maintenance employees as engineers and firemen for establishment by local mill negotiations with reference to prevailing rates for such occupations in the various localities.37 Often, however, this distinction between production and maintenance rates for local versus association determination is not made, so that whatever degree of uniformity is developed for production operations is also attempted in maintenance jobs, even though the local wage level discrepancies in craft rates invite more nearly direct comparison with these occupations. The appropriate relationship of skilled maintenance rates to M

S u c h a program, if undertaken on a multi-company basis, in itself presents staggering problems. A program of this sort was put across successfully by the West Coast P a p e r and Pulp Manufacturers Association and the International Union of Paper, Pulp and Sulphite Workers, A F L . "Kennedy, Effective Labor Arbitration, p. 12.

the production wage structure has been a problem of serious nature to nearly all manufacturing industry over a number of years. Many general wage increases in recent years have taken the form of a flat "cents per hour" amount to all employees.38 The repetition of flat increases of this type, whether or not adapted to meet the increases in living costs of the lowest-paid workers or other factors affecting general wage movements, has seriously distorted the proportionate relationship between skilled maintenance rates and common labor. Beginning with 1947 negotiations and again in 1948, the various bargaining units in basic steel extended the differentials between labor grades to meet this problem, and in 1948 large corporations in electrical manufacturing negotiated percentage adjustments for the first time in several years to yield more appropriate relationships of skills. Other industries in which wage increases have been granted in cents "across the board" have found that periodically special adjustments for skilled maintenance were required to reestablish appropriate job rate relationships. When an industry bargaining group is faced with the necessity of special treatment of the maintenance problem, however, individual member companies may differ markedly in the proper methods of treatment to use. Where the distorted relationship between maintenance and production rates has been aggravated by incentive earnings of production workers, an individual employer may decide that the best solution is to place maintenance workers on incentive. Some engineering authority can be summoned to support incentive applications to maintenance, though with considerable and costly clerical data and control records.39 Other companies in the bargaining group may adhere to the view that incentives should be restricted to direct production operations susceptible to work measurement, and that adjustments required to meet the "maintenance problem" should take the form of basic rate increases. Such a conflict of engineering viewpoints has led to important negotiating problems because the adoption of either approach might appear to preclude use of the other. In avoiding this type of conflict, companies favoring hourly rate adjustments for maintenance employees may apply a cents-per-hour premium above the industry rate in lieu of incentives or bonuses, while 38

The proximity of rates of loomfixers, a specialized maintenance classification in t h e textile industry, to the earnings of production workers was taken as cogent evidence of "compression" of t h e wage s t r u c t u r e in this industry by the National W a r Labor Board. 38 Lytle, Wage Incentive Methods, p p . 360-68.

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other units in the industry may apply bonuses to the old maintenance job rates. Such an approach is easier where union leaders are realistic enough to appreciate the necessity of reasonable flexibility in recognition of differing circumstances affecting companies in the group. (d)

Conclusion as to Wage

Negotiations

In multi-employer bargaining, all the various aspects of wage negotiation must be resolved in the give and take of individual employer interest and opinion within the group, unless certain specific aspects are recognized by the labor and management groups as appropriate for local or individual company and union determination. Often, the necessity of reaching group decisions seems onerous to individuals in the group, yet experience demonstrates that a reasonably homogeneous group of employers can develop a common wage program for handling problems such as those discussed above, often with considerably more success than if the companies acted alone. It seems apparent, moreover, that group bargaining tends to develop wage policy in relation to the circumstances of the specific industry. Where all or a substantial part of the industry in a given area participate in the evolution of a common program, it is inevitable that a broad view of the industry's problems will be engendered.40 During 1946, 1947, and to a lesser extent 1948, many industry leaders complained of the rigidity of so-called "rounds" or "patterns" of wage increases which seemed to spread irresistibly throughout the country, once bargaining by the major steel and automobile companies was completed, and leave insufficient room for consideration of special company or industry circumstances. A review of wage settlements in those years under group bargaining in such industries as clothing, hosiery, printing trades, building trades, and coal mining, indicates greater deviation in these industries from the dominant patterns each year than resulted in many instances from bargaining by individual employers. Viewed against the earlier bargaining history of these 40

In the recent study of company wage policies cited above, the most frequent factors stated in 1946 by company spokesmen for wage level changes were (1) rates paid by other firms in the area or industry, (2) union pressure, and (3) cost of living. Company's financial position and profits were among the least frequently cited and employees' productivity was barely mentioned. Shortages of qualified labor fell in between the first group of factors and the last group. Thus, underlying economic factors relating to market conditions, prospects, and costs, either for particular companies, or as these factors appear throughout the industry, are not shown to be dominant considerations in the formulation of individual company policies for the period covered. Lester, op. cit., p. 28.

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industries, the group settlements, whether higher or lower than so-called "national patterns," appear to have been adapted to the peculiar circumstances of the respective industries. 3. HOURS AND "OVERTIME"

The scheduling of plant operations, including employee hours of work, is of great importance in the management of most business enterprises. Since work schedules directly affect the employees in their daily lives, moreover, they can be a sensitive subject of collective bargaining. Many contracts have been drawn to retain management flexibility in planning the flow and volume of plant operations but, nonetheless, contain provisions for premium or penalty payments for particular hours worked by employees. Statutory overtime requirements under the Fair Labor Standards Act may be viewed in a sense as a nation-wide substitute for or supplement to collective bargaining, setting up uniform minimum standards to be observed by all employers covered. In the years following enactment of this legislation, however, unions often negotiated penalty or overtime pay provisions setting standards higher than the statutory minimum, such as requirements for extra pay for hours worked over eight in one day, on off-scheduled days, on Saturdays, Sundays, and holidays, as well as on the sixth and seventh consecutive days wojrked per week. Many major industries, including the bulk of the automobile and electrical equipment companies, have long observed penalty pay provisions for week-end work. Commonly, these provisions require time and one-half pay for Saturday work and double time for Sunday work. It is notable that the companies which have agreed to such provisions usually are scheduled on five-day per week operations, Monday through Friday, and that exemptions often are provided in their contracts for the infrequent continuous work schedules which are required of power house, custodial, and sometimes of maintenance employees.41 Occasionally, the employees on such continuous operations are so few that no exception is made with respect to them, but this is only a rare occurrence. While it is obvious that production workers in such industries " T h e major agreement in the bituminous coal industry provides special exemptions from the seven-hour day, thirty-five-hour week for employees engaged at power houses, substations, and pumps operating continuously for twenty-four hours daily. Arrangements between mine management and district officers of UMW could also be made for other continuous operations not specifically mentioned in the master agreement. Unnumbered section entitled "Maximum Hours and Working Time," in 1941 Appalachian Agreement between bituminous coal operators and the United Mine Workers.

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receive little or no Saturday or Sunday penalty pay, since no production operations are scheduled on these days, the precedent thus established has spread to other industries which are required to operate twenty-four hours a day, seven days a week, by the nature of their productive process.42 If an employer bargaining group includes some plants with all non-continuous operations, and other plants with a substantial portion of operations necessarily continuous in nature, a demand for Saturday and Sunday penalty pay would pose a very serious threat to unity of the employer group. Such a situation might arise if basic steel companies, with a large proportion of continuous operations, and steel fabricators having basically non-continuous processes were to endeavor to bargain jointly. The cost impact of a demand for Saturday and Sunday penalty pay would be very heavy among the basic steel companies and relatively unimportant to the fabricating shops. While this is perhaps an extreme illustration, it does make it obvious that essential dissimilarities in the operations of employers may make it difficult for them to bargain together when particular issues are raised. Even where the companies in a bargaining group have roughly similar operations, a demand for Saturday or Sunday penalty pay may have different cost impact among them. Suppose, as often happens, a union seeks time-and-a-half pay for all Saturday work and double-time pay for all Sunday work.43 Some employers in the group may have sufficient plant capacity to meet all orders by operating on a five-day week basis, if two or three shifts are operated. Others may not be able to do this, and are required to run six or even seven days a week to meet production requirements. Such companies may operate on a swing shift basis so that the individual employee's Saturday and Sunday hours normally fall within the first forty hours of the employee's work week and thus are not subject to penalty pay under the Fair Labor Standards Act. In this situation, the union proposal would severely increase payroll costs of the second group of firms while having little immediate effect on the costs of those in the first group. The latter employers, of course, would see little disadvantage in con12

A n u m b e r of companies in chemicals, g a s and electric utilities, plastics, flat glass, a n d o t h e r industries with necessarily continuous o p e r a t i o n s have g r a n t e d p e n a l t y p a y f o r S a t u r d a y o r Sunday work. " L o c a l customs, religion, union politics, b a r g a i n i n g g a i n s by rival unions, a n d social a t t i t u d e s , all m a y have a n i m p o r t a n t b e a r i n g u p o n t h e development of local union a t t i t u d e s t o w a r d negotiation of S a t u r d a y and S u n d a y p e n a l t y p a y .

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ceding all or part of the union request, if other conditions of settlement were advantageous. 44 Needless to say, also, the payroll cost impact of such penalty pay provisions may loom so large as to substantially affect the amount of general increase which may be granted. 45 Other types of problems may be presented by the impact of penalty pay proposals. One illustration is afforded by a situation in which a number of companies employing driver-salesmen bargain jointly with a union representing such employees. The union in such a situation might request time-and-one-half pay for all hours worked in excess of forty per week, since such employees normally do not fall under the Fair Labor Standards Act. While some firms employ driver-salesmen wholly or partly on a commission basis, so that earnings are related to the effectiveness of the individual employee as a salesman, other companies may pay a straight salary or hourly rate on the basis of an assumed number of hours worked per week. The granting of the union request here would affect the individual companies differently. Those paying fixed compensation for an assumed work week of forty hours usually do so in order to assure that the employees not subject to close supervision will not loaf in making their calls, but will finish in as few hours as possible, thus actually working fewer than the forty hours weekly for forty hours' pay. This kind of program is logical where a single employee calls on a number of different customers, over a fixed route or territory, in the course of his regular work week. This program would very likely be upset if employees were given an incentive for stretching out their hours on the job in order to get penalty pay for hours over forty. Thus, such an employer would oppose penalty pay over forty hours for practical operating reasons which might have little significance to other employers in the group, particularly if their salesmen, as in bread, milk, or the like, make daily calls on each customer, and could be scheduled on a swing-shift basis, so that no driver worked " T h i s type of problem may be further complicated if some operations in all the companies are necessarily continuous, but the relative proportion of necessarily continuous operations varies substantially among the companies. Some companies may be willing to concede penalty pay for certain non-continuous hours, but for f e w e r or no continuous hours, because of relative cost impact. " I n its 1947 negotiations with U . S. Steel, the Steel workers sought time and a half pay for all Saturday hours, and double-time pay for all Sunday hours. These demands were dropped when it became clear that such payroll cost would preclude the possibility of obtaining a general increase.

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more than five days out of seven.46 Certainly, a general increase of equivalent amount would be preferable from the viewpoint of employers in the first category, and the group thus would have a difficult time agreeing on a common policy. This negotiating issue would thus be related to the development of a unified management position covering wages and other so-called "economic" issues in the entire settlement. 4. TECHNOLOGICAL CHANGES AND LABOR-SAVING DEVICES

As in the case of individual employers, multi-employer bargaining groups may face important bargaining problems flowing from technological change or introduction of labor-saving devices. Since such changes pose a threat to the employees' job security, they can give rise to important issues in collective bargaining. The natural resistance of employees to technological change or to machines which eliminate jobs often has been voiced through their collective bargaining representatives, whether the bargaining is on a group or individual employer basis. "The lasters' union fought the lasting machine, the stone cutters the stone planer, the granite cutters the hand-surfacing machine, the painters the paintspraying machine, the street railway workers the one-man car, the cigar makers the leaf-stripping machines, and the musicians mechanical music devices." Also, "the steamfitters have successfully resisted (for many years) the use of pipe-cutting and threading machines on the job and also the assembling of plumbing fixtures in the shop instead of on the job." "The building trades unions have probably had the greatest success in opposing laborsaving changes."47 What effect, if any, does the practice of multi-employer bargaining have upon the handling of this type of important bargaining problem? The answer to this question is uncertain at best. The Labor Committee of the Twentieth Century Fund, in recommending "wider application of market-wide bargaining," expressed the view that: " I t has often promoted the introduction of labor-saving devices in a sane, 'staggered' manner to cushion, or " T h e possible seriousness of scheduling problems in multi-employer bargaining is illustrated by the brewery strike in New York City in October 1948. One employer, dealing primarily with wholesalers, broke the unified management ranks in agreeing with the union to scrap the time schedules applying to retail deliveries. New York Times, Oct. 27, 1948, p. 29. Various other members of the group settled one by one, until finally the whole group had to drop the time schedules. "Slichter, Union Policies and Industrial Management (The Brookings Institution 1941) pp 207-8, 214.

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entirely offset, injurious social consequences of mass layoffs, and discharges." 48 One Committee member, Professor Slichter, did not join in this recommendation, but set forth the view that: . . . Furthermore, the larger the number of parties to the bargain on each side, the more strongly the cards tend to be stacked in favor of the status quo. It is not easy, for example, for a large number of employers to agree upon new demands. The lone pioneering employer who wishes to launch an experiment may receive little support even from other employers. 49

A s the foregoing seems to suggest, the mechanical improvement or technological innovation of a single firm in a multiemployer bargaining group may be opposed not only openly by the union, but also covertly by other employers in the group who are not in a position to benefit immediately from the particular innovation. There is no doubt that the possibility of this type of manipulation exists where employers bargain as a group, yet this fact alone does not establish that group bargaining itself tends to produce greater restrictions on technological change than would result from individual employer bargaining. A s Professor Slichter has noted, the building trades unions have probably had the greatest success in opposing labor-saving changes, and many persons have coupled this with the fact that multi-employer bargaining is widely practiced in the construction field to support an argument that this form of bargaining has been responsible for building trades restrictions on labor-saving changes. It is doubtful whether this argument can be sustained upon analysis, since conditions in the building construction industry might well result in the same limitations on labor-saving changes, even though group bargaining were not practiced. In the first place, the highly unstable and seasonal nature of the industry has led many employees to believe that work is definitely limited in extent and should be made to last as long as possible. This general attitude no doubt greatly intensifies the opposition which such employees, in common with those of other industries, can be expected to direct against any innovation which threatens the existence or duration of their jobs. Normally, the unions in the building trades, which may reflect this viewpoint, are extremely powerful and the individual contractors by no means strong enough to fight the unions on anything approaching even terms. Thus, it is reasonWilliamson and Harris, Trends in Collective "Ibid., pp. 232-33, n . 6.

Bargaining

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( 1 9 4 5 ) , p. 233.

able to suppose that, even without association bargaining, the building trades unions could develop and apply programs designed to protect jobs and job standards, including opposition to changes in methods of production. In this connection it may be significant that the various contractors associations in the field usually are relatively weak, and— as one leading observer notes—causes of strikes in the building trades often are found in the one-sided organization of the industry.60 Unfortunately, the outlines of the problem are hazy at best in the building trades, particularly in view of the frequent allegations of monopolistic practices, including dividing the market, price fixing, limitation of new devices and products, and the like. Taking all the circumstances of the industry into account, however, it is doubtful that the building trades experience establishes any necessary connection or causal relationship between the practice of multi-employer bargaining and limitations upon technological change or labor-saving devices. The experience in other industries differs considerably from that in the building trades, no doubt because of fundamental differences in relevant circumstances. The glass bottle industry, printing trades, flint glass, coal, and full-fashioned hosiery industries all provide examples of the introduction of labor-saving machinery without conspicuously greater difficulty than had bargaining been on an individual company basis. In each of these cases there was some period of union objection to the new devices, superseded, however, by attempted control and acceptance. The glass container industry has been characterized by multiemployer bargaining on a national basis for about fifty years. During this same period, drastic changes in technology brought about manifold increases in productivity.51 The Glass Bottle Blowers Association during those years succeeded in most cases in manning the machines as they were introduced, even though considerably less skill was usually required. At the same time, they accepted reductions in piece rates on hand operation and adjusted ••"How Collective Bargaining Works, especially pp. 192-96, 217-18. Milton Derber cites the increase in productivity due to the mechanical revolution in glass bottle making as ranging from 642 to 4010 per cent in bottles and jars. Ibid., p. 686. Professor Richard Lester cites Solomon Fabricant's ranking of twenty-five industries according to decline in total wage-earner hourB required per unit of production for a twenty-eight-year period with the glass industry ranking second to automobiles. "Proceedings of Wharton School Conference on Industry-Wide Bargaining," May 14, 1948, p. 51 (to be published in 1949 by the University of Pennsylvania Press as part of the Industry-Wide Collective Bargaining Series).

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shift rules to reduce employer costs and provide a competitive cost basis with the machines. Their main effort was to control the manning of the new devices, rather than to obstruct their introduction.52 It is clear that the existence of a multi-employer bargaining relationship in this instance did not impede technological advance. The union officials were aware of the inevitable trend to greater efficiency in methods. The collective bargaining relationship survived these painful periods and has persisted to the present day. The full-fashioned hosiery industry also has gone through substantial technological change during the period of multi-employer bargaining in that industry. The "National Agreement" in that industry provides for uniform piece rates for all companies in the association as applicable to standard conditions of work and equipment. Minor technical deviations of work methods or machines may not be substantial enough to warrant exceptions from the uniform rates. Thus, an incentive exists under these circumstances for individual managements to initiate major technological improvements, to establish lower unit costs, and obtain a competitive advantage. Thus, improvements have been introduced, often yielding higher employee earnings along with lower unit costs in the more progressive mills.53 The piece-rate method of compensation in this industry may well be the signficant factor in this connection, as has been suggested in the case of the men's clothing industry where limitation or restriction of output and opposition to introduction of machinery have not developed to any appreciable extent. 54 The New England Textile Association and the Textile Workers Union of America have negotiated a provision which assures the employer's right to change or introduce machines, processes, and methods of manufacture in the interests of efficient operation.55 Changes are classified as routine and technological, and procedures are prescribed for union discussion, protection of earnings, and arbitration of grievances. B3

Slichter, Union Policies and Industrial Management, Chap. I X . Cf. also G. E . Burnett, Chapters on Machinery and Labor, p p . 65-115. 1938 S u p p l e m e n t a r y rehabilitation agreements provided f o r wage cuts averaging 15 p e r cent in r e t u r n f o r a commitment by employers to purchase new and more efficient equipment. Thia example of bilateral action to increase productivity was in large p a r t due t o union f e a r of non-union competition, but illustrates considerable breadth of viewpoint. See Kennedy, op. cit., pp. 106-7. H How Collective Bargaining Works, p . 421. " F a l l River a n d N e w Bedford Textile Manufacturers Associations and Textile Workers of America (CIO) 1948, Article I V . 83

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Many unions today recognize that their basic interest in the problem of technological change lies in the effort to obtain some measure of job security for displaced employees, or compensating benefit, rather than in resistance to technological progress. For example, in the flat glass industry, the introduction of machinery, or equipment changes, is not limited by the contract but is recognized by the parties in a contract clause giving special seniority protection for employees affected by partial or permanent discontinuance of a department due to technological changes.56 In like vein, the National Agreement in the full-fashioned hosiery industry provides that "Any worker who is displaced from his job by virtue of technological improvements will be given the first opportunity for vacancy in other departments." 57 Professor Richard Lester has concluded after careful study that industry-wide bargaining has not tended to "place any additional restraint on technological improvement and new investment." In this connection he states that: Industry-wide bargaining may have favorable effects upon labor productivity for a number of reasons. By making wage scales more uniform geographically it helps to reduce employee dissatisfaction and labor turnover within the industry. Labor unrest is also likely to be reduced under industry-wide bargaining because it practically eliminates rival unionism from the bargaining unit and because, instead of a series of negotiations and upsetting changes, it enables the terms of employment for the whole industry to be settled for a year or two in a single negotiation. Our study indicated that industry-wide bargaining, by providing union security and encouraging factual, reasoned negotiations, was more likely to result in wage decisions that take into consideration the economic needs and interests of the whole industry over an extended period of time than is the case where the wage pattern for the industry is established by one employer serving as a wage leader or by local bargaining, with the union playing one firm against another. 58

Until greater evidence is available on this question, it may be said that multi-employer bargaining need not result in obstruction of technological advance and improvements in productivity. Opposition to technological change may arise under many types of collective bargaining relationships, depending to a considerable extent on the breadth of viewpoint as well as the relative strength " A g r e e m e n t s between the Libbey-Owens-Ford and P i t t s b u r g h P l a t e Glass Companies and t h e Federation of Glass, Ceramic and Silica S a n d W o r k e r s of A m e r i c a , C I O , S e c t i o n 5 ( i ) . B7 National L a b o r A g r e e m e n t 1943-1945, Full-Fashioned Hosiery Industry, Article B - 3 . 6 8 Lester, P a p e r on Economic Aspects of Industry-Wide B a r g a i n i n g , " P r o c e e d i n g s of W h a r t o n School C o n f e r e n c e , " May 14, 1948, p. 52.

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of the bargaining parties. The evidence of the more prominent bargaining groups of broad geographical scope over the past several decades does not appear to support the charge that multi-employer bargaining prevents or hinders technological change, even though it has not been proved that industry-wide bargaining renders technological advance easier than otherwise would be the case.59 Admittedly, the possibility exists in any group of employers that those not in a position to enjoy immediate benefits of a new device or technique may not give much support to those ready to capitalize on the change immediately, in resisting efforts to restrict its adoption. This type of development in the group would be a natural reflection of the various immediate interests of the component employers, although it might not reflect the long-run interest of any of them and scarcely could benefit the industry as a whole over the years. As the experience of many of the industries noted above suggests, it is possible for the group to develop a longrun policy of resisting restrictions on technological advance and to adhere to such a policy even though it offers immediate benefits to some in the group and not to others in the various situations which arise from time to time. If unity of the group can be achieved on such a policy, the bargaining strength of the whole group can then be applied successfully to resist limitations which an individual employer might not himself resist. In any event, consideration of the possible development of this type of bargaining issue should be anticipated by managements considering entry upon a multi-employer bargaining venture, and a clear understanding reached where possible as to group policy with respect to technological change. In closing this discussion, it should be noted that success in the handling of labor relations problems associated with technological advance depends to a significant degree upon the quality of union leadership at hand as well as upon the degree of management acumen devoted to the issue. There is perhaps an even greater premium on the quality of union leadership under conditions of multi-employer bargaining in view of the aggregate of power brought to bear on the situation. w

Actually, no b r o a d generalization a s t o w h e t h e r industry-wide b a r g a i n i n g impedes or facilitates technological c h a n g e c a n be made. T h e experience of some industries m a y differ widely f r o m t h a t of others. Moreover, a final j u d g m e n t as t o t h e situation in a n y given i n d u s t r y would probably be sound only if based on d a t a covering a long period of y e a r s ; such d a t a is rarely to be f o u n d . Finally, in viewing t h e experience of a n i n d u s t r y which has been characterized by induBtry-wide b a r g a i n i n g , one is in t h e position of h a v i n g to c o n j e c t u r e as t o w h a t t h e experience m i g h t have been in t h e absence of industry-wide b a r g a i n i n g .

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Current attempts to increase productivity in England have encountered the traditional hostility of British trade unions, organized in national bargaining groups, to the introduction of laborsaving machinery, although it must be admitted that management groups share the blame for retardation of technological development in England.60 Labor leaders in this country, including John L. Lewis, have cooperated in introducing similar types of machinery to those which have been resisted in England. The probability of getting both management and union leadership sufficiently enlightened to cope with such problems is undoubtedly greater in group bargaining, with the constant concern for a broad segment of an industry, than when negotiations are localized.61 5. "FRINGE" OR COLLATERAL WAGE ISSUES

Vacations, paid holidays, shift differentials, rest and lunch periods, call-in pay, insurance benefits, and other incidental employee benefits in recent years have come to be known as "fringe" items in collective bargaining negotiations. A more descriptive designation of these items might be "collateral wage issues," since such matters often involve substantial payroll cost and play an important part in wage negotiations. The widespread use of the "package" type of settlement in recent years has served to emphasize the close relationship between the cost of such items and the amount of general wage increase which is possible in the given negotiation. This was particularly true in the major 1947 settlements which were reported as involving a payroll cost increase of approximately 15 cents per hour. The major steel companies granted a 12V^-cent general increase and about 21/2 cents per hour of payroll cost for (1) better alignment of job rates, (2) elimination of area wage differentials, and (3) three weeks' vacation with pay to employees with twenty or more years of service. The typical automobile industry settlement included ll^-cents per hour general increase and an estimated 3^/2 cents per hour covering six paid holidays and minor improvements in vacation benefits. International Harvester and Allis-Chalmers, producing farm and other machinery, settled for T l e x n e r , " B r i t i s h L a b o r u n d e r t h e L a b o r G o v e r n m e n t , " U n i t e d S t a t e s B u r e a u of L a b o r Statistics, Monthly Labor Review, Oct. 1948, p . 870. ^ B a r n e t t found t h a t n a t i o n a l union policies to h i n d e r t h e introduction of m a c h i n e r y w e r e f r e q u e n t l y forced by s t r o n g local union a n d employee opposition. " W h e r e the control of t h e national union is g r e a t e r , t h e likelihood of dealing w i t h t h e question on a b e t t e r - i n f o r m e d basis is also g r e a t e r . " Op. cit., p . 142.

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111/2 cents plus six paid holidays, whereas the Aluminum Company granted 12-cents general increase and various insurance benefits estimated to cost 3 cents per hour. The major portion of the flat glass industry sought to approximate the 15-cent package by granting an 11-cent general increase and various penalty pay provisions and inequity adjustments. All of these negotiations proceeded largely on the basis of the over-all payroll cost impact of the total settlement. This realistic approach is likely to be used widely in bargaining where collateral wage issues are involved and, in multi-employer negotiations, will force the management representatives to determine how best to distribute a contemplated increase in payroll cost between various "fringe" items which may be under consideration and a possible general wage adjustment. This may tend to highlight any conflicting interests which the individual managements bring to the joint conference. For example, in one joint negotiation the various companies were faced with a choice between the granting of paid holidays or of an equivalent amount of general increase, with various plants represented in the negotiations experiencing conflicting local pressures —on the one hand for paid holidays, and on the other for a general increase in the minimum labor rate. Similar differences of opinion may arise as to other benefits, such as vacations, shift premiums, insurance benefits, or the like. Local pressures for any one of these items can develop largely without reference to the actual merits of the program. One source of such pressure may be the dominance of particular unions in the areas of various plants. Plants in automotive centers with strong UAW locals faced strong pressure to grant paid holidays in 1947, even though not in the automotive industry, and dealing with a union other than the UAW. Apart from their possible role as complicating factors in multi-employer negotiations, the various collateral wage items occasionally present special operating problems even where they are included in an agreement ultimately reached in multi-employer bargaining. Where shift premiums are negotiated, as has happened in recent years in most important manufacturing industries, it may be found that in the various plants employees' shifts may commence at different times, depending on the nature of the operations to which they are assigned. If the shift differentials are agreed upon in terms of, say, 4 cents per hour for employees [39]

on the second shift, and 6 cents per hour for employees on the third shift, it may happen that in particular local plants one group of employees working at a given time will receive a shift premium, whereas other employees working the same hours will not. On the other hand, if the premiums are assigned to specific hours worked, and paid to all employees working those hours, this may appear to work an inequity as to particular groups of employees, only part of whose hours fall within the agreement, yet whose work schedules are as onerous as those of employees receiving premium compensation for more hours each day. A similar situation has arisen in various negotiations with respect to paid rest and lunch periods, which has come into prominence as a bargaining issue particularly in the last five years. An attempt to negotiate a specific provision for granting such periods with pay to all employees may founder on the rocks of the divergent local requirements and practices. Many factory operations, because of the nature of particular jobs, allow employees to eat on the job. This practice is particularly the case where three shifts have been scheduled for a twenty-four hour basis, so that each shift has an over-all daily working schedule of eight hours. If the employee did not eat on the job, or during a rest period, he would work and receive pay for only seven and one-half hours per day at the most. Conditions vary considerably from job to job, from the employee who simply watches a machine-controlled process, setting gauges periodically, to the assembly operator who is relieved for stipulated rest periods, to the packer or shipper who works only on the day shift four hours at a stretch, with time off for lunch between the two periods of work. Thus, a uniform demand for a paid lunch period of one-half hour may vary in effect among the employees within a particular plant and is likely to vary considerably if the clause were to apply to a number of plants. 6. SENIORITY PROVISIONS

Seniority provisions are particularly important to unions and employees since they are a form of job insurance in layoffs, and ofttimes provide protection against the possibility of rankling discrimination in promotions and transfers. They are also important to management because of their bearing on employees' attitudes and on operating problems. Seniority provisions generally affect promotions, transfers, demotions, layoffs, and recall. Sometimes they affect temporary work assignments. [40]

Because of the importance of seniority in principle, the normal union drive toward uniformity extends here in many industries, particularly those which do not have a long background of collective bargaining. In such industries, the multi-employer bargaining group may be presented with demands that all promotions be made on the basis of seniority, that plant-wide seniority (as distinguished from departmental or division seniority) be recognized both in promotions and layoffs, and that seniority status be granted immediately upon employment without any probationary period. More recently, industry-wide seniority has been advanced as a union demand in the New York shipping industry and New York department store bargaining. Such demands often will not be precisely adapted to the needs of specific plants within the bargaining unit or of the local union and may actually run counter to specific local understandings or established practices governing such matters. Experience demonstrates that local conditions affecting the determination and application of a seniority policy are likely to vary considerably. Many local unions and managements recognize the desirability of the development and systematic application of promotion schedules, sometimes on a departmental basis or division basis, applicable to promotions and demotions. In other situations local conditions will not require or encourage development of such schedules. Where promotion schedules exist, in any event, they must be determined largely on the basis of local operating conditions. From one plant to another, moreover, there will be found considerable difference of opinion as to the relative significance of seniority and competence in determining promotions, including the view that senior employees are entitled to a trial period in any higher-rated jobs before being passed over in favor of an employee of lesser seniority. In other situations, the relative competence of various eligible employees may be a factor of controlling importance in promotions, even though not applied in demotions or contractions of working force. Generally, but not always, there is recognition that seniority is entitled to greater weight in the selection of employees to be retained in time of layoff or to be recalled when operations are stepped up after a slack period. Often, moreover, local considerations will be of dominant importance in determining whether work [41]

during slack periods will be distributed among all employees prior to a general layoff, or whether only employees with more than a specified amount of seniority will be entitled to share in such distribution of work in such periods. Thus it is that considerable difference of opinion exists among union leaders as well as management representatives as to whether plant-wide, divisional, or departmental seniority should be applied in periods of slack operations. Such opinions frequently reflect the particular experience which the individuals or groups have had in meeting concrete problems. The diversity of local circumstances and local opinion, both of unions and managements, often presents the question of whether seniority issues should be included at all in multi-employer negotiations, or included only with respect to establishment of general principles. If issues of this sort are negotiated by the group, it usually appears that they can best be handled on the basis of adoption of general principles, or possibly of minimum standards, but with recognition of the fact that local understandings supplementing or deviating from the general principles will be proper. This type of approach has been adopted in the flat glass industry, where various general principles governing layoffs, promotions, temporary employees, technological displacement, transfers, and the like, are laid down, but qualified by the statement that such rules "shall be followed in each factory in substantially the same manner as now exists." 62 In some situations it may be difficult to negotiate such a program for local autonomy and it is possible for the management representatives making such a proposal to engender the suspicion, or invite the charge, that their concern for a healthy amount of local autonomy masks a design to disrupt the multi-employer bargaining relationship or to undermine the position of the union. 7. EMPLOYEE SECURITY ISSUES

In recent years, collective bargaining demands have reflected an increasing interest of employees and unions in employee security. The most publicized of such demands in the first instance was that •'Section 9 of the 1948 Agreements of the Libbey-0wens-Ford Glass Company and the Pittsburgh Plate Glass Company with the Federation of Glass, Ceramic, and Silica Sand Workers, CIO. The same section goes on to provide: "Should any Plant Management or the Industrial Relations Committee in any plant desire to modify present practices with respect to these rules and regulations, but fail to agree upon such modification, the rules under Sections 5, 6, 7, and 8 (the seniority sections) shall automatically control."

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seeking some form of "guaranteed annual wage," but so-called health and welfare programs and pension programs have been more prominent in recent negotiations. It is apparent from these developments that union leaders are increasingly concerned over security of employment and with employee loss of income from sickness, accident, and death, as well as from old age. While few companies are likely under present conditions to find it easy to meet a request for any significant type of guaranteed annual wage, some may find that the peculiar circumstances of their business do permit consideration of less far-reaching programs designed to eliminate or minimize unusually severe fluctuations in their employment. Companies not subject to severe seasonal fluctuations in customer demand or other factors beyond control, thus may feel it desirable to explore the possibility of a limited form of job security program, applicable only to employees with substantial accumulated seniority. On the other hand, companies not thus situated may oppose any exploration of employment stabilization but view the development of an old-age retirement program or some security plans with less far-reaching commitments as a possibility. As to pensions, of course, the attitude of various companies may be affected largely by their relative ability to meet the extremely heavy initial outlays necessary to fund the program to meet the past service requirements of older employees. The cost of such a program will vary among employers by reason of the age distribution and other sociological characteristics of their employees. Without funding, mbreover, most companies would hesitate to embark on a pension program, and the current income situation of particular companies, as well as consideration for future business fluctuation, may preclude consideration of such a program because of the heavy initial financial outlay. Personnel policies designed to attract different age level groups of employees also may influence employer interest in these measures. A serious problem has arisen in at least one negotiation where some companies in the group have existing funded pension programs and others do not and are not in a position financially to establish such programs. In the particular negotiation, the union group pressed primarily for establishment of a pension program, and only incidentally raised a general wage increase issue. The companies without any pension program thereupon pressed for [43]

granting a wage increase, which would apply equally to all companies in the group, rather than institute a pension program. The company with the established and funded pension program finally agreed with the others that the whole group would grant a wage increase and oppose the union demand for a pension program, with the understanding that the companies as a group also would press for a bargaining concession which was particularly important to the company foregoing its favorable position to meet the pension issue. All of these factors tend to point up the difficulty of evolving a common program for managements to follow in multi-employer bargaining as to employee security issues, even though some companies in the group would be ready, were they acting individually, to consider taking some steps in the direction of meeting the basic employee interests giving rise to such requests in collective bargaining. If a common program is worked out, of course, it does not necessarily have to be set up on an industry-wide basis, as was done in the coal industry health and welfare fund, or even provide identical benefits in all companies.63 One such alternative approach is exemplified by the New England cotton textile industry agreement requiring that each employer shall, from January 1, 1948, provide certain specific insurance benefits.64 Joint negotiations in the flat glass industry recently provided for employer financing of previously existing contributory insurance plans, which were similar though not identical among the companies. Provision for contributing identical amounts to local community or other hospitalization programs in various plant locations was adopted. Although employee benefit programs have spread markedly in recent years, it is still the exception rather than the rule for such programs to be embodied in collective bargaining contracts, whether group or individual. If the negotiation of such provisions becomes more common in the future, it is likely that techniques will be developed to adapt such provisions to the varying requirements of the members of particular bargaining groups. A N EVALUATION OF PROBLEMS I N NEGOTIATIONS

Most problems faced by the component managements in multiemployer bargaining are reflections of the conflict of interests and 68

Various branches of t h e a p p a r e l i n d u s t r y have long operated w e l f a r e p l a n s covering a p a r ticular b r a n c h or metropolitan association; e.g., see M e r c h a n t s ' Ladies G a r m e n t Assn., Inc., and I n t e r n a t i o n a l Ladies G a r m e n t W o r k e r s ' U n i o n ( A F L ) , 1948, Article X I X . M F a l l River and N e w Bedford Textile Associations a n d Textile W o r k e r s of A m e r i c a , CIO, 1948, Article X I I .

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attitudes which is inherent in group action. In the course of negotiations some of the group are likely to become acutely aware of this aspect of the relationship as the individual employer contemplates the relatively greater cost impact upon his own operations of certain bargaining concessions which seem necessary in the judgment of the majority of the group. This will also be true, perhaps to a lesser extent, of those concessions which do not involve costs directly, but which affect efficiency of operations more in some companies than in others.65 Since problems of this sort can only be settled by compromising the conflicting interests and viewpoints, all members of the group should be prepared to proceed on this basis. A concession on one point by a given management may be made on the basis of obtaining group support for solution of a special problem which the same management has in some other phase of the negotiations. To be successful, this type of compromise and trading must be reasonably fair and satisfactory to all members of the group over the long run, and even in the short run of a single negotiation every effort should be made to achieve substantial unanimity behind the final settlement. A bare majority support is not enough. Such compromise settlements, though not relished by individual members of the group, may be considerably better than the several employers would obtain if bargaining alone. For example, in the trucking industry in recent years, a form contract has frequently been presented to individual employers under circumstances leaving little discretion for the employer but to sign. Such individual employer compliance may be because of weakness when bargaining alone or because the employer is indisposed to make an issue, with the possibility of strike developments, of contract terms affecting a small proportion of his employees. In somewhat different circumstances the smaller companies in the basic steel industry have found themselves confronted with settlement terms negotiated between the United States Steel Corporation and the United Steelworkers of America and have felt compelled to adopt similar terms. Thus, an individual steel company which has had no direct participation in setting the industry "pattern" might well have preferred to participate in a jointly developed settle®In reverse, of course, an individual employer may actually suffer less cost impact than others in the group will, receiving credit, as it were, f o r the average cost of the group settlement. Local unions also may be aware of an apparently disadvantageous bargaining position forced by the will of the entire union delegation.

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ment, even though as a small company it might not have any very great influence in shaping the final industry determination. While problems of conflicting interest are inevitable in group employer action, and must be accepted in good part if a given relationship is to be successful, the incidence and severity of these difficulties can be minimized in a number of ways. Most important, a multi-employer bargaining arrangement has greater prospect of success if the component employers have substantially the same problems and interests; the greater the homogeneity of the group, the less likely are fundamental conflicts. In addition, the procedures adopted for the conduct of negotiations should be both fair and efficient. Thus, each employer, even though he may not be successful in putting across the program which seems best suited to his individual needs, will have assurance of an opportunity to present his views and challenge the arguments of those opposed and to participate directly, or through his representative, in developing a satisfactory compromise position if such is possible. In addition, there should be recognition by both management and union representatives that all collective bargaining problems cannot be handled definitively in the group negotiations. The attempt to deal in detail with all issues seems inevitably to produce unnecessary difficulty. Many matters, if handled at all in the group negotiations, are best dealt with either in general terms, leaving the implementation to the local groups, or by establishing broad minimum standards to be supplemented locally. The case for deliberate recognition of areas of local agreement may perhaps be set forth most graphically by quoting from the contract between the Northwest Flour, Feed, and Cereal Employers' Association and the American Federation of Grain Processors ( A F L ) : It is recognized that there are local conditions at individual Plants which cannot be covered properly in a single Area wide agreement. Accordingly, each Employer and each Local Union is authorized to enter into a Supplemental Agreement for each Plant, setting forth classifications of employment, rates of pay, seniority rules and other stipulations, not in substantial contradiction herewith, covering such local conditions. However, such Supplemental Agreements, including any amendments thereto or modifications thereof, shall become effective only when approved by both the Council and the Association. 66 "•Flour, Feed, and Cereal Employers' Association and American Federation of Grain Processors, 1948, Article II, Section 3 (a).

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The definition of appropriate subject matter for local or individual company determination rather than group determination is difficult, and various bargaining groups have differed markedly in the subjects deemed appropriate for local autonomy. A holiday clause is one often found in master contracts with considerable detail spelled out for general application. Yet the bituminous coal industry has left this provision to district determination. 67 Occasionally the selection of holidays will be left to local determination because of regional preferences. The principle of seniority is stated only in basic terms in the bituminous coal contract with the instruction that district conferences implement and effectuate the provision with detailed rules. The Northwest milling industry, on the other hand, provides for seniority regulations in considerable detail in the master agreement, including subsections dealing with plant-wide and occupational seniority, transfers, filling vacancies, probationary employees, etc.68 The Pacific Coast pulp and paper contract provides a short but very explicit clause providing for seniority in promotions as in layoffs "other things being equal," with specific provision that, after hearing recommendations from union committees, the judgment of management is final.69 Considerably detailed seniority provisions are also provided in the agreement covering the New England cotton textile industry where traditional job and skill alignments may make the problem somewhat simpler than in newer industries. 70 The Pacific Coast pulp and paper industry provides a long and detailed list of justifiable reasons for discharge while many contracts leave discipline questions mainly to local union and management determination under a general clause, often procedural in nature. 71 This group contract also goes into more detail than most in providing for details of shift scheduling. It states, however, that "within the basic provisions of this Agreement" a company " T h e 1941 Appalachian Agreement provides that "Holidays now recognized in various District Agreements shall be effective during the period of this Agreement." w F l o u r , Feed, and Cereal Employers' Association and American Federation of Grain Processors, 1948, Article V. ®® Pacific Coast Association of Pulp and Paper Manufacturers and International Brotherhood of Paper Makers and International Brotherhood of Pulp, Sulphite and Paper Millworkers ( A F L ) , 1948, Article X X . 70 Fall River and N e w Bedford Manufacturers Association and Textile Workers of America, 1948, Article IX. 71 Pacific Coast Association of Pulp and Paper Manufacturers and International Brotherhood of Paper Makers and International Brotherhood of Pulp, Sulphite and Paper Mill Workers ( A F L ) , 1948, Article XVII.

[47]

may vary schedules of shifts and hours per shift in departments to meet seasonal or emergency requirements.72 It may be said that, most commonly, such subjects as detailed seniority practice, promotion schedules, intra-plant inequities, transfers, temporary assignments, call-outs, shift scheduling, safety and health regulations, leaves of absence, use of bulletin boards, and discipline may best be relegated to local determination. The parties themselves, however, in drawing up a group contract must decide what particular matters, in their judgment, should be excluded from or handled only generally in the group negotiations. Their actual selection will depend upon the conditions of the industry, primarily, and must vary with the collective bargaining history and circumstances of the particular case. In this respect, the understanding and cooperation of union leaders is essential to avoid cluttering the negotiations with matters incapable of broad treatment except in terms of well-nigh meaningless generalities. In general, as is stated in a Bureau of Labor Statistics study,73 the larger the area embraced by the master contract, the greater the need for recognizing local differences in working conditions. This study lists a number of important instances in which this has been expressly recognized by the parties in their agreements,74 and an additional outstanding example is afforded by the coal industry, with its national, district, and local agreements. Whether or not the master agreement specifically recognizes the existence of local understandings, moreover, is not of controlling significance. In the nature of things, very few multi-employer bargaining relationships would be successful without them. As long as all parties are aware of the necessity of permitting sufficient flexibilty to take account of local or plant differences, and approach their negotiations reasonably, a satisfactory solution to this type of problem may be anticipated. •"Ibid.., Article X I . Associations and Collective Bargaining, P a r t I I ( B L S , 1947), pp. 97—106. " C a s k e t Manufacturers of Portland and United Brotherhood of Carpenters and Joiners, A F L ; Motor Truck Association of Southern California and International Brotherhood of Teamsters, A F L , ; Flour, Feed and Cereal Employers of Washington and Oregon and Northwest Council of Grain Processors, A F L .

nEmployere

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Ill Administration of the Agreement

The everyday relations between a company and union in handling grievances and other routine problems of mutual concern may be more important in determining the success of their bargaining relationship than the precise terms which they have embodied in their agreement. Contrary to an all-too-general impression, the settlement of grievances and related problems in collective bargaining is by no means a process of routine application of specific, definite, and measurable contract terms. The typical collective bargaining agreement is studded with such phrases as "just cause," "relatively equal ability," "without discrimination," "mutually satisfactory," "substantially as in the past," "beyond its control," "qualified to fill," "present practice," "new operations," "reasonable provisions," "fair consideration," "undue hardship," and other terms whereby the parties have striven to establish broad general standards of reasonable conduct for handling the countless problems which, as a practical matter, cannot be anticipated and specifically met in negotiations. Language of this sort necessarily permits widely different interpretations, all of which, in the light of the particular facts, may appear reasonable to the parties involved even though other persons would believe different interpretations to be required under similar circumstances. Clauses including general language of this sort obviously acquire their meaning and substance in the light of the practices and agreements of the parties living under the contract. Even the most carefully drawn agreement necessarily includes language which is broad in application, and does not provide a specific standard by which all grievances or complaints may be given a yes or no answer. In addition, it is almost inevitable that certain language which seemed clear in meaning when included in the agreement is unclear in the light of facts brought to light after the agreement has been signed. Finally, a certain amount of ambiguity seems unavoidable in most written documents negotiated in haste or under the tension of negotiations. In these respects, of course, [49]

the situation is somewhat akin to the adoption of a written constitution or enactment of a statute. Both, under our system of government, are subject to judicial interpretations, which in the course of years may supplement a brief document with volumes of interpretation and elaboration. The impossibility of avoiding some area of discretion in the application of carefully drawn statutory language has long been recognized by legislative bodies in the establishment of administrative agencies to apply broad statutory objectives to a variety of specific situations in the affected field.75 A collective bargaining agreement is not like a contract of sale, trust indenture, or promissory note, all of which usually define the entire relationship or transaction between the parties thereto. The written agreement may be merely incidental to a collective bargaining relationship which could well, and sometimes does, continue without any written agreement. Thus it is that the typical collective bargaining agreement does not constitute the bargaining relationship, but is an incident of it.76 It appropriately may be viewed as a skeletal framework, to which flesh and substance are added slowly by daily action of the parties.77 In the extreme, the same skeleton might serve as the framework either for a work of art or for a monstrosity. In a multi-employer bargaining relationship, of course, there may be many artists building simultaneously on the same skeletal framework. No one of them controls all of the actions which will lend pith and substance to the collective agreement. Where no joint machinery has been established to facilitate employer cooperation in grievance handling and contract administration, the probability exists that some of the group will find that grievance handling or decisions reached by other companies in the group directly affect the handling of their own grievances or give rise to bargaining issues in ensuing negotiations. This point was brought home forcibly to one group recently when the union in negotiations insisted upon inclusion in the agreement of a provision that no employee TO

A cogent illustration of this is afforded by t h e establishment of t h e j o i n t S e n a t e - H o u s e " w a t c h d o g " committee t o oversee the f u n c t i o n i n g of t h e L a b o r - M a n a g e m e n t Relations A c t of 1947 u n d e r the a d m i n i s t r a t i o n of t h e N L R B . All p a r t i e s recognized t h a t t h e i m p a c t of t h e legislation would depend largely on t h e m a n n e r in which it was a d m i n i s t e r e d . T h e situation in the m e n ' s clothing industry in this r e g a r d has been described t h u s : "All in all, t h e w r i t t e n a g r e e m e n t plays a s u r p r i s i n g l y u n i m p o r t a n t p a r t in t h e i n d u s t r y ' s collective b a r g a i n i n g , a n d exclusion of a n item does n o t m e a n it has been neglected. Added t o p r i n c i p l e s in t h e w r i t t e n a g r e e m e n t a r e others, equally i m p o r t a n t , embodied in a r b i t r a t i o n decisions, covered by oral a g r e e m e n t or simply t r a d i t i o n a l in the i n d u s t r y . " How Collective Bargaining Works, p. 416. 77 C f . Williamson a n d H a r r i s , Trends of Collective Bargaining, p . 116.

[50]

would be required to work overtime under any circumstances without the consent of both the employee and the local union. Upon probing, it developed that this sweeping demand resulted from action taken by the management of one plant only in discharging an employee who was unwilling, on fifteen minutes' notice, to stay over for another full shift after completing his regular eight-hour shift. The particular management felt that it was entitled to require any employee to accept overtime work, without advance notice and irrespective of the employee's personal commitments to make other use of his time. Since the union held this view to be entirely unreasonable, it sought in the negotiations with all of the companies to resolve any possible future argument on the same or similar, issue in its favor by obtaining a veto power over the scheduling of all daily or weekly overtime. Thus, it seems probable that, sooner or later, all multi-employer bargaining groups will encounter grievance or negotiation problems arising from different interpretations or applications of the common agreement. This probability has been recognized as important by some groups but not by others, and even where recognized as important, different techniques have been developed to minimize difficulties in this regard. The Bureau of Labor Statistics cites numerous examples of agreements reached by multi-employer bargaining groups, which either do not include any grievance procedure or which contemplate such machinery only at the local or individual company-union level.78 Two comparatively wellknown industry-wide bargaining relationships leave administration of agreements exclusively to the member companies, dealing directly with the union: the Wall Paper Institute with United Wall Paper Craftsmen and Workers (AFL) and the National Automatic Sprinkler and Fire Control Association with United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry (AFL). 79 Some associations, indeed, exist only for negotiations, and cease functioning until the next negotiation rolls around.80 It is unusual to find provision for handling of substantially all grievances by the association, rather than by the individual employer, except where the group is composed of a large number of •"Bureau of Labor Statistics, Employer 22, 127, 129. n lbid., p. 145. »Ibid., P a r t I, p. 4.

Associations

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and Collective

Bargaining,

Part III, pp. 121-

small employers who are glad to pass grievance problems on to association officers for handling. In many groups the practice is for each individual management to receive and deal with obviously routine grievances or like problems, but to call on an association representative for advice and assistance in any non-routine matter. Usually, where grievance problems are not settled by the individual management in this manner, the handling of the grievance is taken over by the association officials. This type of relative centralization of grievance handling occurs frequently in various needle trades, building trades, and printing trades groups, but is found in diverse other fields, including bakeries, service trades, and shipping. 81 Between the extremes of comparative centralization and complete decentralization are a variety of provisions often with a right of appeal to central agencies and district or national committees established jointly by the unions and employer to aid in settlement of disputes. Outstanding among these is the agreement between the Glass Container Manufacturers' Institute with the Glass Bottle Blowers Association (AFL) and the United States Potters Association with the National Brotherhood of Operative Potters (AFL) ,82 providing for local settlement of grievances and disputes with the right of appeal to central agencies or district and national committees. Another noteworthy example of group bargaining in which the parties have sought consistent application of the terms of their "national agreement" is afforded in the development of the impartial chairmanship of the full-fashioned hosiery industry. 83 The Pacific Coast pulp and paper industry group has developed a program of grievance handling which is significant in that it has been found useful by a group of stable and successful companies in an industry not characterized by cutthroat competition, and where the bulk of the companies appear well able, on an india Ibid., p p . 148-44. "Ibid., p p . 126, 146. " F o r a n excellent account of the e x p e r i e n c e of t h i s industry, see Kennedy, op. cit. I t is sign i f i c a n t t h a t one of t h e basic r i g h t s of m a n a g e m e n t developed i n the " c o m m o n l a w " of t h e hosiery i n d u s t r y u n d e r t h e g u i d a n c e of t h e i m p a r t i a l c h a i r m a n s h i p is m a n a g e m e n t ' s a d m i n i s t r a t i v e i n i t i a t i v e ; t h a t is, t h e r i g h t t o m a k e all i m m e d i a t e decisions in t h e p l a n t w i t h n o h i n d r a n c e s f r o m t h e union except t h r o u g h p r o t e s t a n d a p p e a l . This p r i n c i p l e had n o t been established in t h e industry p r i o r t o t h e i m p a r t i a l c h a i r m a n s h i p a n d w a s only established t h r o u g h a series of decisions which h a v e become a p a r t of t h e i n d u s t r i a l j u r i s p r u d e n c e of t h e i n d u s t r y . Similarly, t h e r i g h t t o u n i n t e r r u p t e d production a n d to choose methods of o p e r a t i o n a r e basic m a n a g e m e n t r i g h t s m a i n t a i n e d u n d e r this g r o u p b a r g a i n i n g . Basic union r i g h t s established or m a i n t a i n e d by t h e i m p a r t i a l c h a i r m a n s h i p include t h e r i g h t of p r o t e s t a n d a p p e a l , r e t r o a c t i v i t y of g r i e v a n c e settlements, union security, a n d sole discretion over i n t e r n a l union affairs (Chap. V I I ) .

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vidual basis, to maintain trained staff personnel to handle all industrial relations problems. This group includes eighteen companies, operating thirty-two plants, all of which handle grievances in the initial stages with authority to make settlements where a new interpretation of the agreement or novel problem is not involved. Whenever there is any doubt in the mind of a plant management as to the correct interpretation or application of the agreement, however, it is obliged to submit a full statement of the facts, with local union concurrence in the statement if possible, to a "Permanent Classification Committee" maintained by the employers, which has authority to issue binding rulings for guidance of all plant managements in the group. As indicated, this machinery is for management guidance primarily, and if a particular ruling is not acceptable to the union, it may be pressed through the grievance procedure and comes before a "Joint Relations Board" consisting of an equal number of management and union representatives, as the last step before arbitration. The decisions of this board, as well as any arbitration awards which become necessary, are followed by all companies in all future situations presenting the same issue. It is interesting that in order to assure objective group action no representative of the company involved in any specific interpretation problem is permitted to sit on the Joint Relations Board during consideration of such problem. The Flour, Feed and Cereal Employers Association has set up arrangements somewhat similar to those just described. This group includes twelve substantial companies operating about twenty plants engaged in the manufacture of flour, feed, and other cereal products. The companies have formed a corporation for handling labor relations matters of mutual interest with provision that major decisions will be made by its board of directors, and an arrangement for employment of a full-time secretary. The latter official participates in all grievance meetings which reach the stage of consideration locally by the top plant management and top local union officials. It is the responsibility of the secretary to insure that all important grievances are handled in such meetings in a consistent fashion, bearing in mind the interest of the entire group. Where a novel or doubtful question is raised in connection with such a grievance, it is thus possible for the secretary of the Association either to suggest the appropriate course of action or to suggest deferring final action so as to permit consideration in the [53]

next higher step in the grievance procedure, before a permanent joint committee of management and union representatives. Representatives of the affected company do not participate in the deliberations of this joint committee. Any decisions reached by the committee or in any subsequent arbitration awards are applied by all companies uniformly in future similar situations. In each of the last two instances cited, the participating companies have come to accept the desirability of an appreciable degree of centralization in the handling of important grievances as the only feasible method of avoiding whipsawing, cluttering contract negotiations with grievance problems and jeopardizing friendly relations with the unions involved, as a result of ineptitude on the part of particular plant managements in handling grievances. The varying degree of centralization of guidance and control in group grievance handling, from one situation to another, has some counterpart in the varying practices as to what particular bargaining subjects are, or are not, regarded as appropriate for some measure of group control. Some group contracts, for example, provide that grievances involving interpretation of the language of the agreement will be handled by the association rather than by the individual employer, while other types of grievances may be settled without intervention of the association.84 In selecting subjects appropriate for handling by group machinery, as distinguished from those susceptible to local settlement, the experience of industries engaging in group bargaining points to no single rule. For example, the administration of a discharge provision would seem to be a subject in which local deviations in practice might develop, without regard to the uniformity which may be desired for "economic" terms of the contract. Yet, in a number of printing trades associations and some apparel groups, discharges are singled out for special associationunion settlement proceedings, in distinction to other grievances which are handled locally.85 While these special discharge procedures may be designed for expeditious handling, freer from possible pressures at the shop level, they illustrate the difficulty of marking out certain fields as being generally of group significance and others as being of local importance only. Similarly, in most M

BLS, op. eit., Part III, p. 128.

"Ibid.,

p. 118.

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industries, safety and health regulations would appear to be primarily of local significance, but the U. S. Potters Association with the National Brotherhood of Operative Potters, and Waterfront Employers Association of the Pacific Coast with the International Longshoremen's and Warehousemen's Union are examples of bargaining groups which have set up special association-union committees to establish safety and health standards, probably because of conditions peculiar to their respective industries.86 In some situations, where the need for industry stabilization is particularly apparent, association determination of rate grievances may be required to prevent upsetting the negotiated scale by an accumulation of small changes. The men's clothing industry is characterized by frequent changes in models of garments and type of fabric, necessitating almost continuous activity in piecerate determination. The process by which closer control over new rate grievances is maintained, in contrast to the handling of less important grievances in the shop, is described in one study as follows: . . . The rate to be set for each operation—often only a fraction of a cent per garment—is determined by a two-man 'price committee,' representing the joint board (i.e. the union) and the employer. Both representatives must be intimately acquainted with the processes of manufacture. If the two members of the committee fail to agree—which rarely occurs—the price is determined by the impartial chairman. In practice the union representative has great influence, and in small firms he acts almost independently.87

In this type of situation, the union with the consent of the employers assumes the responsibility for policing all new rates to maintain stability. In the late 1930's, however, the international officers of the Amalgamated Clothing Workers were too preoccupied elsewhere to maintain the desired close supervision of this system. At a time when different sections of the industry were scrambling for shares of the market after the invalidation of NRA, concessions were made to company after company to such an extent that a new stabilization program for the sewing processes was ultimately adopted by the Amalgamated with the support of the employers' association. The "Stabilization Plan" of 1939 in this industry sought an equalization of labor cost among competing manufacturers for suits in six defined grades. Under "Ibid., 87How

p. 117a. Collective

Bargaining

Works,

p. 425.

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this plan, hourly earnings might vary on the same job from one company to another by reason of the share of the standard labor cost for the grade allocated to different operations. The plan included registration of contractors and the fixing of contractors' prices and employment by the Amalgamated of full-time inspectors to police the industry. 88 Under multi-employer bargaining in the full-fashioned hosiery industry, with its complex uniform piece-rate scale, over half of the grievances presented to the Impartial Chairman for determination in recent years have been wage-rate grievances. Some of these involve piece rates which are local in nature and are set for special methods or special conditions in a particular plant. Even in these cases, however, the Impartial Chairman in setting the rate must be aware of its effect on the wage structure of the industry if the distinguishing circumstances should spread to other plants. 89 Many of the rate grievances reaching the Impartial Chairman apply to new models or processes, on which decisions will be effective over an important segment of the industry. The great care shown in the establishment of new rates in full-fashioned hosiery, as well as in the men's clothing industry described above, stems from the important relationship of all new rates to the entire wage structure and even to economic trends in the industries. If rates involving new machines or other processes are not set at proper levels, the improper relationship will affect the competitive position of companies within the group and may unduly retard or hasten the development of new processes throughout the industry. This fact is undoubtedly of major importance in requiring the centralized handling of new wage-rate grievances under these multi-employer arrangements for contract administration. While most multi-employer bargaining associations have recognized the importance of day-to-day grievance handling and contract administration, the various techniques adopted provide no clue to what might be regarded as an ideal method of avoiding undue difficulty and friction arising from differing applications of the contract. It seems clear that each group, in conjunction with the unions involved, has tended to develop a program for grievance handling adapted to the specific problems at hand. As in the establishment of their association itself, the par»Ibid., p p . 436-39. " K e n n e d y , op. cit., p. 68.

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ticipating employers should approach the problem of contract administration in the light of the major objectives to be accomplished by working together. The long-range objectives of associated employers in the needle, printing, or building trades may be quite different from those in wallpaper manufacturing or in railroading. In the first type of situation, competition based solely on wage practices or other conditions of employment may be a distinct possibility. Thus, the agreements in these industries are likely to provide for control of all individual employers, both in the observance of contract terms and in the handling of non-routine grievances.90 Where this control includes arbitration as the terminal point in the grievance machinery, the association and union officers are readily able to assure contract observance by all individual employers, particularly where the arbitrator has specific authority to issue "mandatory directions, prohibitions or orders directed to or against any party breaking the collective agreement." 91 Thus, where an important object of the association is to achieve stability in an industry which otherwise would be highly unstable, the agreements of the parties may tend to establish specific and far-reaching machinery to control day-to-day application of the substantive terms of the agreement. The need for establishment of such machinery may be much less obvious, on the other hand, to employers whose operations are stable, and not conducive to cutthroat competition on the basis of lower wage rates or other conditions of employment, and who have not dealt with an alert, aggressive union. It is also apparent that the relative size of the various employers in a group may determine whether it is desirable to have grievances and contract administration centrally handled. Where several thousand small trucking firms, several hundred restaurants, a number of retailers, or a group of night clubs combine for bargaining purposes, they may find it advantageous to share the 90

The agreement between the Publishers Association of N e w York City and International Typographical Union ( A F L ) , Section 10, provides: " N o deviation from the terms of this contract shall be allowed by any party hereto unless by joint agreement between the contracting parties. And it is further provided that when any deviation f r o m this contract by a signatory Publisher is called to the Union's attention by the Publishers' Association of New York City in writing and same is not corrected within 30 days after notice, then any member of the Publishers' Association shall be entitled to put into effect the same conditions." D1 See the 1943 agreement (extended through 1948) between Merchants' Ladies Garment Association, Inc., and International Ladies Garment Workers' Union ( A F L ) , Article XLV—Grievance Procedure—Arbitration. This same article spells out that any "decision reached by the managers of the parties hereto or their deputies, or rendered by the Impartial Chairman, shall have the effect of a judgment entered upon an award made, as provided in the Arbitration Laws of the State of N e w York."

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expense of a full-time office to handle year-round problems in expert fashion, since none of the individual employers has the facilities to do the job properly for itself. Finally, the program followed by the unions in dealing with an employers' group may have controlling effect in shaping the employers' policies for administering the agreement. Some unions may develop a fetish for absolute uniformity in all terms and conditions of employment, including grievance settlements. In an effort to apply this policy, practices prevailing in one plant because of conditions existing there may be pressed upon another plant which has different conditions. In like vein, grievance settlements or other contract interpretations resulting from special conditions in some plants may be made the basis for demands in subsequent negotiations for all plants. Where this situation exists, employers in the group may conclude that group action of some sort is a necessary preliminary to final settlement of some or all grievances, even though other conditions might not be regarded as warranting the establishment of central machinery for grievance handling. In the last analysis, one broad guiding principle may be stated for determining the method of handling grievances: no greater degree of centralization should be undertaken than is desirable for efficient and intelligent handling of the grievances, and adequate to support the basic program of the group. Just what procedure is appropriate in a given situation must be determined on the basis of the facts of that situation. Such a determination ofttimes must be made jointly with the union in negotiations, and most certainly will be largely affected by the nature of the union, its policies, and its officers.

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Conclusion Multi-employer collective bargaining emphasizes group action rather than individual employer action and thus in some situations may restrict the exercise of full discretion by each of the participating managements. Freedom of individual action in bargaining alone often may be illusory where union organization has proceeded f a r toward the underlying union goal of enforcing standard or stabilized wages and working conditions throughout an industry, area, or market. In those industries in which union organization has not proceeded f a r or where differently affiliated labor unions exist over a given market or area, a different set of circumstances will confront a particular employer in considering joining forces with other employers. Even where a union already has achieved the power to assure that the individual employer will substantially follow industry "patterns" or standards as to wages and working conditions, the employer still has to decide whether multi-employer action would add unnecessary restrictions to his freedom of action, even though perhaps largely of a procedural type. The extent of restriction implicit in group action necessarily varies from one situation to another, depending in large measure upon the techniques and procedures applied. In a successful group bargaining relationship, the advantages derived from the association should more than offset any disadvantages resulting from any restriction upon individual discretion. An individual management's consciousness of restraint upon individual action during group bargaining is likely to be especially keen during contract negotiations as to issues which involve substantially different payroll cost impact among the companies, or issues which some are able to meet but others cannot for practical operating reasons. In these situations, the tendency of some employers to pull away from the group and make individual settlements is likely to be very strong, especially if they have not been thoroughly sold on the necessity for group action, and also if the union group openly invites such breaking of ranks or insists on a position which greatly encourages it. The possibility of such diffi[59]

culty is enhanced if the employers' organization is not well conceived, with adequate opportunity afforded for full consideration of the special problems and interests of the various member companies. Recent instances of management defections in this type of bargaining underscore the proposition that little purpose is served by multi-employer collective bargaining unless the component employers have organized intelligently and are prepared to hang together for the long pull, even at the occasional cost of relatively disadvantageous settlements from the individual management's viewpoint. If they would proceed on a realistic basis, therefore, each individual management must approach the various group problems in a spirit of compromise and accept a certain amount of trading of concessions in order to obtain substantial unanimity of the group behind a feasible program. No company should elect to participate in multi-employer bargaining without full appreciation of this aspect of the relationship and readiness to accept all decisions reached under the procedures of the association. The decision to accept this degree of responsibility to the group can be made intelligently only after appraisal of the gains likely to be achieved as a result of group rather than individual action, and an analysis of the manner in which group decisions will be made and applied. A general difficulty sometimes presented to multi-employer bargaining groups arises from the possible enlargement of the number of issues raised in negotiations. Avoidance of this difficulty requires alertness and ability on the part of both management and union negotiators. Some groups have had considerable success in meeting this problem, first, by careful delineation of major subjects for treatment in the group bargaining, with provision for local or individual negotiations on other subjects and, second, by careful attention to the development of grievance machinery to prevent grievances from being injected into the group negotiations with disruptive effect. In the day-to-day administration of the collective bargaining agreement, multi-employer groups have been faced with the danger of whipsawing and the possibility that precedent-making decisions by single employers will embarrass other members of the group. Some restraint on individual employer action in grievance handling may arise in meeting this situation. The extent to which this is true, again, varies from one situation to another, depending on a [60]

number of factors. In some instances, formal machinery for centralized control over contract administration and all important grievances has been perfected. In other situations, no such machinery exists, but a developing tendency in the direction of such centralized control is discernible in almost all bargaining groups. Needless to say, this type of development may depend in large part on the objectives of the participating employers and union. Much of the responsibility for success or failure of multiemployer bargaining rests with the unions involved, and especially with their responsible officers. Mature and experienced labor leaders have come to recognize that multi-employer bargaining cannot be made to do too much. The development of this attitude is attributable in large part to the fact that the differences in local or plant problems and interests which tend to divide the management group are reflected in the union group as well. Thus, while it may be easy for a union in joint bargaining to work out its initial demands by throwing a sop to all the local groups, when it becomes necessary to pare down the initial bundle of proposals in order to make a settlement possible, the conflict between various local or plant interests ofttimes will become as apparent as among the management groups.92 The task of driving through a compromise position which will make settlement possible is a sobering experience for any union official, and one well calculated to develop an appreciation of the internal problems of the management group. In successful multi-employer bargaining relationships, therefore, management and union leaders usually have come to accept the notion that they share a common responsibility for its success. This makes for an appreciation of the difficulties likely to be encountered on both sides of the bargaining table, and a readiness to deal with them realistically. If both sides approach the relationship in this fashion, the expectable difficulties can be kept within bounds, and the likelihood of a successful outcome of the undertaking greatly enhanced. MIt ¡a n o t u n c o m m o n f o r various local g r o u p s on t h e union side to r e f u s e to accept t h e g r o u p settlement. This largely accounted f o r the collapse of industry-wide b a r g a i n i n g in t h e N e w Y o r k t r u c k i n g i n d u s t r y in 1948. See also K e r r a n d Randall, Crown Zeüerbach and the Pacific Coaat Pulp and Paper Industry ( N a t i o n a l P l a n n i n g Association. 1948), p . 65.

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