LI B R:A Ri-Y". OF THE U NI VERSITY Of ILLINOIS 629-13 no. HO Return this book on or before the Latest Date stamped below. University of Illinois Library -7 !9S9 »_•? H: **«•«* -4 i9SS ilB$ 4ft* 2i m AUG 2 19f» 21 B59 14 OCT 2 - 964 - • '"• ?fi 1964 B ^C 1 WW APR 2 AUG 2 ,75 91980 MAR WR1 9 08 1982 2 8 1985 L161— H41 AERONAUTICS BULLETIN NUMBER THREE £9.13 ""i fofl. UNIVERSITY OF ILLINOIS ,t '', INSTITUTE OF AERONAUTICS .,op.4 URBANA, ILLINOIS Labor Relations in the Air Transport Industry Under the Amended Railway Labor Act By E. B. McNatt UNIVERSITY OF ILLINOIS BULLETIN VOLUME 45, NUMBER 64, JUNE 26, 1948. Published ©very five days by the University of Illinois. Entered os second-class matter at the post office at Urbana, Illinois, under the Act of August 24, 1912. Office of Publication, 358 Administration Building, Urbana, Illinois. Acceptance for mailing at the special rate of postage provided for in Section 1103, Act of October 3, 1917, authorized July 31, 1918. THE INSTITUTE OF AERONAUTICS, established in 1945, is operated as the administrative agency responsible for the fostering and correlation of the educational and research activities related to aviation in all parts of the University. Other functions include academic instruction, flight training, management of the University of Illinois Airport, and aero- nautical research. In connection with the latter function, the Institute issues two types of publications . . . first, a group of reports on research results, and second, a series of bulletins on avia- tion subjects of an extension service nature to the citizens of the State. The following publications have been issued: Bulletin One: Municipal Airport Management, Leslie A. Bryan, 1 947. Bulletin Two: Landscape Planting for Airports, Florence B. Robinson, 1948. Bulletin Three: Labor Relations in the Air Transport Industry Under the Amended Rail- way Labor Act, E. B. McNatt, 1948. Publications of the Institute of Aeronautics will be sent free of charge upon request. 2500—5-48—38384 UNIVERSITY OF ILLINOIS INSTITUTE OF AERONAUTICS Leslie A. Bryan, Ph.D., LL.B., Director Bernice Schrader, A.M., Editor Aeronautics Bulletin — Number Three Labor Relations in the Air Transport Industry Under the Amended Railway Labor Act BY E. B. McNatt Professor of Economics College of Commerce and Business Administration University of Illinois Published by the University of Illinois, Urbana 1948 FOREWORD THIS MONOGRAPH is the third in a series of bulletins on avia- tion subjects which will be issued from time to time by our Institute of Aeronautics. It concerns a particularly timely subject — labor relations in the air transport industry. Also it represents a pioneering attempt to examine and evaluate the legal aspects of collective bargaining in the air transport industry on the basis of the experience of the last ten years. Dr. E. B. McNatt, the author, is Professor of Economics in the College of Commerce and Business Administration at the Univer- sity of Illinois. He has had wide experience as a teacher, author, and lecturer in the field of labor and industrial relations. During World War II he served as Director of Wage Stabilization of the Sixth Region War Labor Board. In addition he has had experience as a consultant on labor matters with industrial concerns and has served as an arbitrator in numerous labor disputes. The Institute of Aeronautics is glad to make available the in- formation contained in Professor McNatt's monograph. In it, as in all publications of the Institute, the author has been given complete freedom to express any opinions he may wish with the understand- ing that he takes sole responsibility therefor. Leslie A. Bryan Director April, 1948 r,/2 22 INTRODUCTION The general problem of industrial relations on United States com- mercial airlines until very recently had not attracted widespread public attention. However, the TWA pilots' strike of 1946 and the more recent National Airlines pilots' strike of 1948 have served to focus considerable public attention on the question of industrial relations in this industry and particularly upon the legal machinery established to maintain industrial peace. The purpose of this study is to examine the legal framework within which collective bargain- ing on the commercial airlines must function, to analyze the pro- visions of this legislation, and to appraise the results. Inasmuch as the air transport industry is specifically exempted from the coverage of the Federal Labor-Management Relations Act of 1947 (the Taft-Hartley law), just what are the legal rights, duties, and obligations of employers and employees on the com- mercial airlines? What legal machinery has been established for the adjustment of labor disputes? Are company unions and "yellow- dog" contracts illegal? Is the closed shop legal? Must an employer recognize and "bargain" with the representatives of any labor or- ganization the employees select? And does "bargaining" or "deal- ing" with these representatives mean a written collective agreement must be negotiated ? Does the present law of labor relations in this industry provide for compulsory arbitration in case the parties in dispute fail to reach an agreement? AMENDED RAILWAY LABOR ACT The law of labor relations and collective bargaining on the com- mercial airlines in this country today is found in the amended Railway Labor Act of 1926. 1 The amendment of 1936 extended practically the entire law of railway labor relations to the air transport industry. This was done by the addition of Title II to the Railway Labor Act. 2 Further strength was added to this provision '44 Stat. 577, amended in 1934, 48 Stat. 1185, and in 1936, 49 Stat. 1189. 2 Sec. 201 of Title II states, "All of the provisions of Title I of this Act are extended to and shall cover every common carrier by air engaged in interstate or foreign commerce, and every carrier by air transporting mail for or under contract with the U. S. Government, and every air pilot or other person who performs any work as an employee or subordinate official of such carrier 4 UNIVERSITY OF ILLINOIS by the Civil Aeronautics Act of 1938, the basic air transport law today, which states that any air carrier wishing to secure and to retain a certificate of convenience and necessity must comply with Title II of the Railway Labor Act. 3 In thus transferring to the brand new air transport industry, almost in toto, the existing body of railway labor law, which repre- sented the results of a half century of labor relations experience on the railroads, at least two important assumptions were made. In the first place, it was assumed that collective bargaining between the air carriers and their employees either was or would be the primary, if not the exclusive, form of employer-employee relations in this industry. Actually collective bargaining as a form of employer-employee relation on the commercial airlines was just "a-borning" in 1936 while, on the contrary, collective bargaining on the railroads had had at least a half century of experience, if not of acceptance. In the second place, it was assumed that, inasmuch as the legal machinery provided in the Railway Labor Act for maintaining industrial peace on the railroads apparently had been rather successful, there was no reason to believe it would be less successful if applied to the budding air transport industry. The validity of this assumption will be examined later in this study. The general purpose of the Railway Labor Act is stated to be the avoidance of any interruptions to interstate commerce, the protection of employee and employer rights of self-organization and association, and the orderly settlement of all disputes arising out of the negotiation of new contracts, or the interpretation of existing contracts. 4 To this end a number of general duties are prescribed. 5 For example, the duty of all carriers and their em- ployees "to exert every reasonable effort to make and maintain agreements concerning rates of pay, rules, and working conditions" is affirmed. That collective bargaining and negotiation is to be the primary and principal method of arriving at terms and conditions or carriers, subject to its or their continuing authority to supervise and direct the manner of rendition of his service." Section 202 continues: "The duties, requirements, penalties, benefits, and privileges prescribed and established by the provisions of Title I of this Act shall apply to said carriers by air and their employees in the same manner and to the same extent as though such carriers and their employees were specifically included within the definition of 'carrier' and 'employee,' respectively, in section 1 thereof." 3 Sec. 401 ( 1 ) . * Title I, Sec. 2. 5 Sec. 2. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 5 of employment is further stressed by the provision that "all dis- putes between a carrier and its employees shall be considered, and, if possible, decided, with all expedition, in conference between representatives designated and authorized so to confer, respectively, by the carrier or carriers and by the employees thereof interested in the dispute." 6 The right of employees and employers alike to designate indi- viduals or organizations as representatives, without interference, influence, or coercion by either party over the designation of repre- sentatives by the other, is guaranteed by the Act, and further strengthened by the provision which states that "representatives of employees for the purpose of this Act need not be persons in the employ of the carrier, and no carrier shall . . . seek in any manner to prevent the designation by its employees as their representatives of those who or which are not employees of the carrier." 7 Although this latter provision was obviously aimed at the rather common practice of many railroad companies in the 1920's of refusing to deal with "outside" labor organizations and insistence upon dealing with company or "inside" unions and of influencing their employees to designate such "inside" organizations as the employee repre- sentatives, this provision took on a new and different significance in the TWA pilots' strike of 1946. 8 The statutory recognition of the common law right of em- ployees to organize and bargain collectively through representatives of their own choosing is made real and meaningful by imposing upon employers the positive duty "to treat with" the certified representatives of the employees, and by prohibiting a series of activities by employers. 9 It is a misdemeanor, punishable by fine or imprisonment, or both, for any carrier "to interfere in any way with the organization of its employees" ; to use their funds to main- tain any organization of employees, or to pay representatives of employees; to deduct from wages dues for the use of any em- ployees' organization ; to require any employee to sign any contract or agreement promising to join or not to join any labor organiza- tion. 10 It is made the duty of United States district attorneys to institute proper proceedings and to prosecute, upon application of 6 Sec. 2, Par. 2. 7 Sec. 2, Par. 3. 8 See infra, pp. 21-3. 9 Sec. 2, Par. 9. 10 Sec. 2, Par. 4, 5. 6 UNIVERSITY OF ILLINOIS the duly designated representatives of the employees, all carriers who violate any of the above provisions, such prosecution to be without cost to the employees. These provisions outlaw, respec- tively, company domination of employee organizations, the check- off, the closed shop, and the "yellow-dog" or anti-union contract, in the air transport industry. Two other important features of the present law deserve special mention because of the additional obligations imposed upon carriers and employees, and, particularly, the prohibitions imposed upon the carriers. It is a misdemeanor, punishable by fine and imprison- ment, for any carrier to change the rates of pay, rules, or working conditions of its employees as a class, as incorporated in agree- ments, except in the manner prescribed in the agreements or in the Act. 11 Carriers and employees must each serve on the other written notice of proposed changes in existing agreements, or of a desire to make a new agreement. Such notices must be acknowl- edged within ten days, and within thirty days conferences must begin for the purpose of negotiating the proposed changes or the new agreement. 12 While these obligatory conferences are being held, or while a dispute is in the hands of the National Mediation Board, no changes in the rates of pay, rules, or working conditions by the carrier are permitted until the controversy has been finally acted upon by the Board in accordance with the Act. In addition, the carriers must advise their employees by printed and posted notices that all labor disputes will be handled in accordance with the requirements of the Act. 13 The present law thus not only assumes that agreements result- ing from collective bargaining will have been negotiated and will be in effect for most of the employees in this industry, but also gives these agreements legal recognition as binding contracts which cannot be broken lightly by either side. Air transport agreements today, therefore, represent contracts, establishing property rights for individual employees, which are enforceable through adjudica- tion by adjustment boards. The National Mediation Board, composed of three public mem- bers appointed by the President with the consent of the Senate, has two major functions under the present law. The first function con- 11 Sec. 2, Par. 7. 12 Sec. 2, Par. 6. 18 Sec. 2, Par. 8. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 7 cerns its role in the settlement of employee representation disputes. If among employees on a given airline a dispute arises as to what organization they desire to represent them in dealing with the man- agement, it is the duty of the Board, on request of either party, "to investigate such dispute and to certify, in writing, . . . the name or names of the individuals or organizations that have been designated and authorized to represent the employees involved in the dispute, and certify the same to the carrier." In such an investi- gation, the Mediation Board is authorized to take a secret ballot of the employees involved, "or to utilize any other appropriate method ... as shall insure the choice of representatives by the employees without interference, influence, or coercion exercised by the car- rier." The authority to designate who may participate in an em- ployee election, coupled with the majority rule provision, 14 gives the Board rather broad discretionary power in determining the class or craft for employee bargaining purposes. This provision, however, apparently guarantees that craft unionism rather than industrial unionism will be the primary structural form of employee organi- zation on the commercial airlines. The second major function of the National Mediation Board concerns its role in mediation, arbitration, and investigation of dis- putes involving changes in rates of pay, rules, or working condi- tions. These disputes, of course, arise only in connection with the negotiation of new contracts. In such disputes, the Board is author- ized at t^e request of either party, or on its own initiative, to "use its best efforts, by mediation, to bring them [employees and man- agement] to agreement." If its mediating efforts fail, the Board must endeavor to induce the parties to submit their dispute to arbitration. Compulsory arbitration of disputes, however, is not required by the present law. Arbitration, being entirely voluntary, may be refused by either party to a dispute, without in any way violating the provisions of this Act. If arbitration is refused by either party, and if the dispute threatens "substantially to interrupt interstate commerce to a degree such as to deprive any section of the country of essential transportation service," the Board must notify the President, and he may, in his discretion, appoint an 14 Sec. 2, Par. 4. "The majority of any craft or class of employees shall have the right to determine who shall be the representative of the craft or class for the purposes of this Act." 8 UNIVERSITY OF ILLINOIS emergency board Jo investigate the facts as to the dispute and re- port thereon within thirty days. During this period, and for thirty days after the emergency board has made its report to the Presi- dent, "no change, except by agreement, shall be made by the parties to the controversy in the conditions out of which the dispute arose/' The maintenance of the status quo, while the emergency board is investigating and reporting the facts, places the final reliance upon the pressure of public opinion to compel a peaceful settlement of the dispute. Compulsory negotiation and compulsory investigation, but not compulsory arbitration, are thus required by the present law. A final provision in the present law of labor relations on the airlines deals with the establishment of adjustment boards to settle grievances and disputes growing out of the interpretation or appli- cation of existing agreements between the carriers and their employees. 15 The provision for adjustment boards to interpret and administer agreements on the airlines follows very closely the provision in Title I of the Railway Labor Act establishing adjust- ment boards in the railway industry. Thus it is made the duty of every air carrier and its employees, acting through their representa- tives, to establish a local or regional adjustment board for the settlement of grievances or disputes growing out of the interpreta- tion of their agreements. Such boards are to be established by agreement between the carrier or carriers concerned and representa- tives of their employees. The interpretation of agreements on the railroads, under the original 1926 Railway Labor Act, was left entirely to voluntarily established regional adjustment boards. Between 1926 and 1934, these voluntary regional adjustment boards on the railroads proved unsatisfactory. Being bi-partisan, they were frequently deadlocked; there was no provision for a neutral referee to break such a dead- lock, and there was no provision for an appeal to a national adjust- ment board for a final and binding award. The 1934 amendments to the Railway Labor Act largely corrected these defects as far as the railroad industry was concerned. To avoid the possibility of a similar experience with local or regional voluntary adjustment boards on the airlines, the present law provides for the establishment of a National Air Transport "Title II, Sec. 204 and 205. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 9 Adjustment Board. 16 This board is to be established when, in the judgment of the National Mediation Board, it shall be necessary "in order to provide for the prompt and orderly settlement of dis- putes . . . growing out of grievances or out of the interpretations or application of agreements." 17 The Mediation Board is empowered to direct that the air carriers select two representatives and that the national labor organizations representing airline employees select two representatives who shall constitute the National Air Trans- port Adjustment Board. The powers and duties of this board are made synonymous with those of the National Railroad Adjustment Board, including the use of a neutral referee in case of a deadlock and the issuance of final and binding awards. 18 Although in the present law no specific penalties are provided for failure to obey the decisions of either the Adjustment Board or the National Mediation Board, any carrier who. disobeys awards of the Adjustment Board or any arbitration board set up in accord- ance with this law is made subject to civil suits in Federal District Courts. 19 This definitely implied that all the duties and responsi- bilities established by the law could be enforced by appropriate court writs; and, in 1937, this implication was upheld in a broad United States Supreme Court ruling. 20 In this case, the court held that the legal obligation of a carrier to "treat with" the certified representatives of its employees imposed a positive duty on the carrier to negotiate with the representatives so certified. The court said, "It is, we think, not open to doubt that Congress intended that this requirement be mandatory upon the railroad employer, and that its command, in a proper case, be enforced by the courts." And further, "The statute does not undertake to compel agreement between the employer and employees, but it does command those preliminary steps without which no agreement can be reached. It at least requires the employer to meet and confer with the authorized representatives of its employees, to listen to their complaints, to make reasonable effort to compose differences — in short, to enter into a negotiation for the settlement of labor disputes." In this case, the court affirmed the use of the injunction in enforcing the obliga- 16 Title II, Sec. 205. "Ibid. "Title I, Sec. 3. "Title I, Sec. 3, Clause (p). 20 Virginian Railway Co. vs. System Federation No. 40, Railway Employees Dept. of the A. F. of L., 300 U. S. 515 (March 29, 1937). 10 UNIVERSITY OF ILLINOIS tion of a carrier to make no agreements with employee groups who were not certified by the National Mediation Board, and also up- held the power of the National Mediation Board to hold elections in representation disputes and to certify to the employer the majority choice as the sole employee representative. In summary, then, the present law of labor relations on the air- lines appears to establish rather definite rights, duties, and responsi- bilities for both employers and employees in the area of collective bargaining. The closed shop, the check-off, the "yellow-dog" con- tract, and company unions are all prohibited. Employers must bargain collectively with independently chosen employee representa- tives when and if these employees desire such representation. Agreements, once negotiated, must not be broken by either side. Disputes over the interpretation of agreements must be settled by adjustment boards, and disputes over the negotiation of new agree- ments must follow certain prescribed steps before a legal strike may be instituted. Compulsory arbitration is not required by the present legislation. It now remains to examine how and why this legislative machinery came to be adopted, and what the experience with these regulations has been to date. AIRLINE INDUSTRIAL RELATIONS EXPERIENCE The Impact of the Depression In sharp contrast with the railroads, the air transport industry is relatively new in our economy; collective bargaining in this industry is even newer. Prior to the great depression which started in 1929, the airlines were almost completely free from both labor organization and labor disputes. 21 Wages and hours of airmail pilots during the period of government operation of the airmail service were very liberal and generally satisfactory to the pilots concerned. Progressive deterioration of labor standards, however, occurred after 1927 when privately owned airlines began to carry the mail under government contracts. With the onset of the depres- sion in 1929, this deterioration became quite rapid; wages were 21 A so-called "strike" by airmail pilots in 1919 was in reality only a spon- taneous protest by these pilots over a ruling by the Post Office Department that the mail must be carried on schedule regardless of weather conditions. Two early attempts at organization of pilots before 1929 had met with little success. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 11 reduced, hours of flying per week were increased, the method of wage payment was changed, bigger and faster planes were intro- duced, and a surplus of pilots developed. 22 The reaction of the pilots, formerly one of the most individualistic employee groups in the country, to these lower labor standards was immediate and tangible — the formation in 1930 of the Airline Pilots Association. The spectacular growth of this union during the next two years is recorded in the fact that over three- fourths of all commercial air- line pilots were enrolled in it by 1932. The first test of strength for this new employee organization came in January, 1932, as a result of a general reduction in pilot wages by the Century Airlines. The pilots struck against this wage reduction, and, when all efforts to settle the strike by negotiations failed, the union sought Congressional aid in protecting their labor standards and safeguarding their collective bargaining privileges. Although the union lost the strike, and the company was liquidated shortly thereafter, the appeal to Congress for help did result in bills being introduced which would have brought the entire air transport industry under the Railway Labor Act of 1926. The strong opposition of the airlines, with some support from the Post Office Department, however, succeeded in preventing the bills from ever reaching a vote. The change of administration in 1933 and the enactment of the N.R.A. with its famous Section 7(a) did much to convince all labor that a friendly administration was in power upon whom they could rely for support in time of need. Events in the field of air transport labor relations moved forward with bewildering rapidity during 1933 and 1934. First of all, the pilots were able to secure exemption from the minimum wage and maximum hour provisions of the N.R.A. codes of fair competition, on the ground that they were professional employees. In October, 1933, the leading airmail lines adopted a new hourly wage scale for pilots, and at the same time introduced faster planes. The pilots felt certain that the new wage scale and faster planes would result in lower earnings and voted to strike rather than accept the new rates. The strike was 22 In October, 1931, the actual earnings of pilots averaged $568.49 as com- pared with $600 to $650 a month under government operation. C. E. Puffer, "Air Transportation," Blakiston Co., Philadelphia, 1941, p. 557. 12 UNIVERSITY OF ILLINOIS averted when the newly created National Labor Board assumed jurisdiction. The Labor Board's famous Decision No. 83 was not announced until May 10, 1934, after the government had cancelled all airmail contracts and after it was clear that a new airmail policy was about to be adopted by the Congress. This decision not only established minimum wages and maximum hours for airline pilots, but also provided for an elaborate method of wage payment involving base pay, plus mileage pay, plus hourly pay, and plus bonuses. Unfor- tunately for the pilots, however, there was no one to whom the decision could be directed, inasmuch as the cancellation of airmail contracts had eliminated all the original airline companies who were parties to the dispute. Thus the Labor Board's award was made applicable only to airline pilots in general, but to no individual employer of these pilots. The pilots' union recognized the ineffec- tiveness of Decision No. 83 as it stood, and immediately asked Congress to make it effective by inclusion in the Airmail Act of 1934. 23 This the Congress did by making the securing and holding of an airmail contract conditional upon compliance with all deci- sions of the National Labor Board. Compliance with the wage and other provisions of Decision No. 83 by practically all domestic air carriers was thus achieved rather quickly. But there still remained one obstacle to securing the benefits of Decision No. 83 as permanent minimum labor standards for airline pilots ; this was the fact that the Board's award was to be effective for only one year. During this year (1934-35), the old National Labor Board was abolished, and the new National Labor Relations Board was created. The N.L.R.B. had no authority to mediate or arbitrate labor disputes or to hand down binding awards in disputes over wages and hours. Faced with the possibility of losing all the legal benefits of Decision No. 83, the airline pilots asked Congress to amend the Airmail Act of 1934 and make the provisions of Decision No. 83 a permanent minimum legislative floor for them. Congress did this by an amendment enacted on August 15, 1935. 24 This amendment extended indefinitely the effectiveness of the pro- visions of Decision No. 83 and, in addition, specifically provided 23 Public Law No. 308, 73rd Congress, Sec. 13. "Public Law No. 270, 74th Congress, Sec. 11. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 13 for improving these minimum standards by collective bargaining, but prohibited any lowering of these standards by collective bargain- ing or otherwise. These minimum pilot standards were further frozen into the labor law of the air transport industry by the in- clusion of a provision in the Civil Aeronautics Act of 1938 almost identical with the 1935 amendment to the Airmail Act. 25 Several reasons have been advanced for the Congressional action of 1936 extending the coverage of the Railway Labor Act to the air transport industry. One student has summarized these reasons as follows: 26 "First, there had been a number of labor disputes on the airlines, of which the five previously mentioned were important enough to warrant consideration by a federal agency. 27 Second, there had been difficulty in getting the minimum wage decision enforced. Third, the National Labor Board had been dissolved and the authority of the successor boards was quite differ- ent. It was felt that the importance of airmail service required some machinery for settlement of controversies on the airlines in a man- ner which would diminish the possibility of a long strike or stop- page of service. Finally, the Railway Labor Act had been improved by important amendments in 1934. It therefore seemed wise to utilize the same procedure which was functioning quite successfully on the railroads for similar situations on the airlines." In contrast with the earlier attempts to enact similar legislation, no organization in opposition to these bills appeared before either the House or Senate Committee hearings. 28 The proposed legislation was strongly endorsed by various governmental agencies and individuals, as well as numerous labor organizations. The Impact of World War II Despite the fact that the airline pilots were by far the most extensively organized group of employees on the airlines in 1936, 25 Public Law, No. 706, 75th Congress, Sec. 401 (L). 26 Puffer, op. cit., p. 569. 27 In addition to the pilots' dispute over wages and hours, four other minor disputes between individual air carriers and one or more of their employees had been decided by either the old National Labor Board or the new N.L.R.B. These disputes involved discharge for union activity, seniority, and refusal to bargain collectively. 28 See Federal Coordinator of Transportation, "Hours, Wages, and Working Conditions in Scheduled Air Transportation," Sen. Doc. 508, 74th Cong. 2nd Session, 1936, p. 75. 14 UNIVERSITY OF ILLINOIS they were not the first employee group to use the provisions of the Railway Labor Act. This was due, at least in part, to the fact that the pilots had already achieved such a high degree of security and protection of labor standards by the legislative wage and hour floors discussed above. The first collective bargaining contracts ne- gotiated under the new law were negotiated by the airline mechanics and the radio operators. Four such agreements covering wages, hours, and working conditions were negotiated in 1937 and filed with the National Mediation Board. 29 The first use of the Act's representation and mediation machinery occurred in 1938 when one representation case and three mediation cases were handled by the National Mediation Board. 30 Two of the mediation cases involved the airline mechanics ; the other involved the pilots. A total of six- teen agreements covering wages, hours, and working conditions were filed with the Board in 1938 — none of them covering the pilots. The first contract covering pilots was negotiated in 1939 be- tween the Airline Pilots Association and American Airlines. The rapid spread of collective bargaining among other employee groups by 1939 is evidenced by the fact that there were a total of thirty- four collective bargaining contracts on file with the Board that year, only one of which covered the pilots. 31 These contracts covered mechanics, radio operators, stewards and stewardesses, clerical and office employees, and several miscellaneous unskilled employee classifications, and they were negotiated with fourteen separate air carriers. 32 The first strike under the new law occurred in 1939 when the pilots on the Eastern Air Lines walked out in a dispute over rates of pay and rules. The Board's mediation machinery was un- able to prevent the strike, but, inasmuch as it was of short duration, no emergency board was established. This same year saw the machinery of the new law invoked in the settlement of one repre- sentation and four mediation cases; two of the mediation cases involved the pilots, and the other two involved the mechanics. 33 No use of either arbitration or emergency fact-finding boards had been made in this industry under the Railway Labor Act up to 1940. 34 29 Third Annual Report, National Mediation Board, 1937, p. 6. 30 Fourth Annual Report, 1938, pp. 7, 26, 30. 31 Fifth Annual Report, 1939, p. 5. 82 Ibid., pp. 26-7. ss Ibid., pp. 10, 22. 34 National Mediation Board, Eighth Annual Report, p. 10. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 15 The air transport industry expanded very rapidly during the early war years. Personnel of all classes in the employ of domestic airlines increased from 9,461, in 1939, to 19,877, in 1942 ; 35 and to 50,313, in 1945. 36 Revenue miles flown for domestic air carriers increased from 95,396,087, in 1940, to 172,577,029, in 1945. 37 Up to 1943, however, organization of airline personnel was confined largely to the pilots, co-pilots, and mechanics classifications. The ALPA represented the pilots, and co-pilots, and the International Association of Machinists and the International Air Line Mechanics Association represented the mechanics. The number of trade agree- ments between labor organizations and airline carriers increased from 34, in 1939, to 98, in 1945. 38 Between 1940 and 1945, the number of representation disputes in which the machinery of the Boards was invoked totaled 31, of which 25 occurred during 1944 and 1945. 39 In this same period 34 mediation cases were handled by the Board, 11 of these being in 1945. 40 Up to 1945, the media- tion cases involved the pilots and mechanic classifications ex- clusively with the pilots accounting for over three-fourths of the total. Three cases had gone to arbitration — two involving the pilots and one the mechanics ; and three emergency boards had been established under Title II of the Railway Labor Act. There were no strikes by any employee group on the airlines during the war ( 1940-45 ). 41 The wartime industrial relations experience on the airlines thus followed fairly closely the general industrial relations pattern in American industry. A National Railway Panel was established by Presidential Executive Order No. 9175, in May, 1942, to facilitate the settlement of labor disputes during the war. Also, a no-strike, no-lockout pledge for the duration of the war had been given the President by the carriers and unions. In addition, the Wage Sta- 35 Annual Report, Civil Aeronautics Board, 1942, p. 9. 36 Air Transport, "Facts and Figures," 9th ed., 1947, p. 8. "Annual Report, Civil Aeronautics Board, 1947, p. 53. 38 National Mediation Board, Eleventh Annual Report, 1945, p. 49. 39 See Appendix A, Table I. 40 Ibid. 41 Ibid. Two of the arbitration cases involved the pilots' union and the TWA. The disputes were over demands for increased wages for operating Boeing 307 equipment. Case A-901, ARB. 14 (1941) and Case A-1966, ARB. 48 (1945). The three emergency boards were created in 1945 to settle disputes between several airlines and the mechanics and communications employees, A-692 and A-1600. 16 UNIVERSITY OF ILLINOIS bilization Act of October, 1942, had included the employees in this industry as well as other industries. The short labor supply, the governmental controls over collective bargaining, the no-strike pledge, the patriotic incentive to avoid serious work stoppages, and the rising cost of living were all factors operating with about the same degree of intensity in the air transport industry as in other areas of industrial life — and with about the same result. Increased interest in and insistence upon organization and collective bargain- ing grew apace during the war period among industrial wage earn- ers in general. 42 Consequently, it is not surprising to find that employees on the commercial airlines increasingly turned to organ- ization and collective bargaining in working out employment rela- tions with their employers. The relatively large number of represen- tation disputes settled by the Board in 1944 and 1945 reflected not only the increasing interest of certain airline employees in organiza- tion, but also the keener competition among various labor organi- zations for members in the air transport industry. At any rate, V-J Day found the pilots and mechanics holding contracts covering wages, hours, and working conditions with every domestic airline in the United States except one. 43 Other labor contracts were scattered among some twelve to fifteen other employee classifica- tions on as many different airlines. 44 The pilot contracts were all held by the ALPA, while the mechanics' contracts were split mainly between the International Association of Machinists and the Inter- national Air Line Mechanics Association. The Impact of Peace With the cessation of hostilities in August, 1945, the air trans- port industry joined in the general postwar boom of American business. Revenue miles flown by domestic air carriers increased from 172,577,029 in 1945, to 322,446,900 in 1947. 45 Domestic route mileage increased from 66,997 in October, 1945, to 123,846 in October, 1947, and foreign route mileage from 117,609 to 178,974 during the same period. 46 The number of transport aircraft, domes- tic and foreign, increased from 462 in October, 1945, to 930 in 42 Trade union membership in the United States increased during the war from around 7|/2 to 8 million in 1939 to between 15 and 16 million on V-J Day. 43 National Mediation Board, Eleventh Annual Report, 1945. ** Ibid. a Annual Report, Civil Aeronautics Board, 1947, p. 53. "Ibid., Annual Report, 1946, p. 1; Annual Report, 1947, p. 1. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 17 October, 1947, and the number of four-engined transports increased from 18 in October, 1945, to 404 in October, 1947. 47 Personnel of all classes in the employ of domestic airlines increased from 50,313 in 1945, to 69,127 in 1946, but dropped back to 61,711 in 1947. 48 During this same period (1945-47), personnel of all classes em- ployed on international airlines increased from 17,483 to 22,391. 49 The Civil Aeronautics Board has constructed a composite index of expansion and growth of air transportation in the United States which starts with 100 in 1941, reaches over 200 in 1945, and stood at 393 in October, 1947. 50 In addition, governmental wartime re- strictions and controls on wages and collective bargaining were almost completely abandoned shortly after V-J Day in 1945. It is in the light of these developments that postwar industrial relations on the airlines must be examined and appraised. The postwar wave of strikes, starting almost immediately after V-J Day and continuing well into 1946, reflected the generally unsettled industrial conditions incident to the reconversion of our economy from war to peace. This strike wave was further aug- mented by the general feeling of employee insecurity and the uncer- tainty of the postwar wage level. Industrial relations on the airlines were directly affected by all these factors. In addition, the great increase in personnel on both domestic and international airlines after V-J Day, plus the flood of returning servicemen — which appeared to be in excess of even the expanding personnel demands of the industry — increased the feeling of insecurity on the part of the average airline employee and thus increased his interest in collective bargaining. This accelerated interest in collective bargaining and union organization is clearly reflected in the industrial relations statistics for this period. 51 Out of a total of 168 agreements negotiated be- tween union organizations and air carriers from 1937 to July, 1947, 89, or 53 per cent of them, were negotiated in the last three of these years, and 70 were negotiated in 1946-47. 52 The number of representation disputes handled by the National Mediation Board 47 Ibid. 48 Air Transport, "Facts and Figures," 9th ed., 1947, p. 8. See Appendix B, Table II for domestic airline personnel for 1945 and 1946 by job classification. 49 Air Transport, "Facts and Figures," 9th ed., 1947, p. 8. 50 Annual Report, 1947, p. 39. "See Appendix A, Table I. 52 Ibid. 18 UNIVERSITY OF ILLINOIS increased from 8 in 1944 to 17 in 1945, to 24 in 1946, and 42 in 1947. 53 Out of a total of 99 representation disputes handled by the Board since 1937, 83, or 84 per cent of them, were handled in the period 1945-47. Likewise, out of a total of 109 mediation cases handled by the Board since 1937, 80, or 73 per cent of them, were handled in the postwar period ( 1945-47 ). 54 Organization of non-pilot personnel had proceeded at such a rapid pace in the postwar period that the 150 non-pilot contracts on file with the National Mediation Board on July 1, 1947, covered some 20 job classifications between 22 different unions and 19 different carriers. 55 The percentage of organization on the airlines in 1947 varied from 70-75 per cent of the approximate 7,000 pilots and co-pilots, to 40-50 per cent of the 20,000-odd mechanics, to considerably smaller percentages for stewardesses and office work- ers, down to no organization at all among supervisory personnel. But this postwar development was not achieved without consid- erable friction. Between 1945 and 1947, eleven cases of arbitration and six emergency boards were utilized under the Railway Labor Act, and three serious strikes took place, despite the machinery provided in this Act for the peaceful settlement of all labor dis- putes. 56 By far the most serious disputes on the airlines after V-J Day involved the carriers and the Air Line Pilots Association. As early as 1940, the TWA had introduced the four-engine stratoliner, and a dispute with the ALPA over pilots' compensation for this larger, faster plane required arbitration to settle it. Decision No. 83 would automatically have provided for some increase in pilots' pay for flying the four-engine stratoliner, but the ALPA wanted more. Finally an arbitration board awarded the pilots a bonus above the amount they would have received under Decision No. 83. 57 The same dispute arose in 1945 over increased pay for TWA pilots fly- ing a slightly new model of the stratoliner, and again an arbitration n Ibid. 5i Ibid. 58 Sec Appendix C, Table III. This table shows that the ALPA holds con- tracts with every listed airline except one ; the mechanics have contracts with every airline, but the earlier Air Line Mechanics Association has now been com- pletely eliminated, and the mechanics' contracts are divided among three unions: the UAW-CIO, the IAM, and the TWOA-CIO. The flight dispatchers have contracts with 12 of the 19 carriers listed, and the stewardesses with 11 of these carriers. B6 See Appendix A, Table I. "Case A-901, ARB. 14, National Mediation Board, Annual Report, 1942, p. 36. LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 19 board was necessary, and again additional pilot compensation was awarded. 58 In the summer of 1945, a number of airlines were contemplating the early introduction of still newer, heavier, and faster four- engine planes, 59 and the TWA had opened negotiations with the ALPA on the question of pilot pay for flying this new equipment. Despite the fact that Decision No. 83 would have provided auto- matically for higher pilot pay for flying the new equipment, nego- tiation got nowhere — not only between ALPA and the TWA but also between ALPA and other carriers anxious to use this new equipment. In December of 1945, thirteen air carriers formed the Air Lines Negotiating Committee and notified the ALPA that further bargaining in the four-engine dispute would be handled by this Committee. The ALPA refused to recognize or deal with the Air Lines Negotiating Committee, despite the clear cut statutory authority under the Railway Labor Act for this sort of a bargain- ing agent if the carriers so desired. After all efforts by the National Mediation Board to settle the dispute by mediation or voluntary arbitration had failed, the Presi- dent established an emergency fact-finding board in May, 1946, in order to avert a strike by the pilots. This board held hearings and made a report and recommendation to the President, in July, 1946. 60 The continued refusal of the pilots' union, however, to recognize the Air Lines Negotiating Committee as the carrier's bargaining agent blocked all attempts at further negotiation and settlement, either with TWA or with the twelve other lines. During August and September, all the lines represented by the Negotiating Com- mittee except one put the emergency board's recommended rates into effect unilaterally. The TWA pilots struck on October 21, 58 Case A-1966, ARB. 48, National Mediation Board, Eleventh Annual Re- port, 1945, p. 35. 59 The Douglas DC-4 Skymaster, the Lockheed Constellation, the Boeing Strato-Cruiser, and the Douglas DC-6. 60 Twelfth Annual Report, National Mediation Board, 1946, pp. 49-50. This board recommended some increases in pilot and co-pilot pay above those that would automatically have applied in Decision No. 83. The board defended unqualifiably the right of the carriers to bargain through the Air Lines Nego- tiating Committee if they so desired, but made their recommendation only with respect to TWA. The twelve other airline cases were remanded back to the parties for proper handling under the machinery of the Railway Labor Act. 20 UNIVERSITY OF ILLINOIS 1946, and remained out until an agreement to arbitrate the dispute ended the walk-out on November 15, 1946. 61 The second postwar breakdown in the machinery of the Rail- way Labor Act occurred in July, 1946, in the form of a short strike by the mechanics of the Northwest Airlines. 62 The Mediation Board had been unable to settle the dispute by mediation or arbi- tration, and an emergency board was established too late to avert a brief walk-out which resulted in the temporary grounding of all airline planes. The third major postwar failure of the Railway Labor Act to prevent a serious work stoppage on the airlines occurred in Septem- ber and October, 1947. In this dispute the pilots of the American Overseas Airline struck on September 30, 1947 and remained out until October 18, 1947. 63 On January 23, 24, and February 3, 1948, the clerks, mechanics, and pilots respectively of the National Airlines stopped work. 64 This represented the fourth major postwar failure of the Railway Labor Act to prevent a strike in the air transport industry. These strikes are still in progress at this writing and occurred after the Media- tion Board had exhausted all the machinery at its disposal in the effort to bring about a peaceful settlement of these disputes. "Thirteenth Annual Report, National Mediation Board, 1947, p. 2. The arbitration board later awarded the pilots pay increases somewhat higher than those recommended by the President's emergency board. Subsequent negotia- tions with the other airlines resulted in agreements providing for pilot pay in- creases in excess of the TWA award. 62 Case A-2334, Emergency Board No. 38, International Association of Ma- chinists and Northwest Airlines. The machinists struck to obtain a contract with the airline calling for higher pay and some changes in working rules. The Emergency Board's report granted some of the changes in working rules, but denied wage increase demands of the union. The company and the union later agreed to the higher pay scale anyway. 63 All planes of the American Overseas Airline were grounded from Septem- ber 30 to October 18 as a result of the pilots' strike. The dispute in this case involved the negotiation of a new agreement. Bargaining over its terms had been in process for some 22 months. The immediate cause of the strike was inability to agree on the settlement of a union grievance claim under the terms of the old contract. An agreement on wages and other matters had been reached before the work stoppage occurred. Although the National Mediation Board was unable to prevent the work stoppage in the first instance, it was instrumental in getting the strike called off and the eventual agreement consummated. The emergency fact-finding procedure of the Act was not invoked in this dispute. 64 The pertinent facts in these strikes appear to be as follows: The clerks became involved in a dispute with the company over wages and working condi- tions, and the contracting out of certain work to other concerns. They were LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 21 CONCLUSIONS The air transport industry in the United States came of age during the past decade. In coming of age, it necessarily experienced some of the trials, pains, and regulations that accompany industrial maturity. The regulations imposed during this period included rather close governmental controls over rates and service, as well as over labor relations. Among its trials and pains was the rather rapid development of trade unionism and collective bargaining among its employees. But, unlike the crafts or classes of employees on the railroads who had negotiated and revised employment agreements with their employers over a period of many years, the air transport employees and their employers had to build an entire new agreement structure, tailored to fit the particular characteris- tics of a new industry. And this had to be accomplished in the main by inexperienced negotiators on both sides. Thus, it was inevitable that a considerable amount of friction, disagreement, and organized by an affiliate of the I.A.M. The clerks walked out on January 23, 1948 and were followed the next day (January 24) by the mechanics. Osten- sibly the machinists stopped work to avoid crossing the picket line of the clerks, but actually they had a serious grievance with the company over contracting out its instrument repair work. The machinists insisted, however, their work stop- page was not a strike and hence was no violation of their contract. Shortly after the machinists quit work, the company obtained an injunction restraining the I.A.M. from acts of violence or threats of violence to N.A.L. property or personnel. On February 8, the N.A.L. filed a $750,000 damage suit against the I.A.M. for breach of contract, and a $5,000,000 damage suit alleging libel and slander by the I.A.M. as to the safety of N.A.L. equipment. The pilots' strike of February 3, 1948 goes back to the discharge of a pilot by N.A.L. in September 1945 as the result of a passenger plane crack-up at the Tampa, Florida, airport. The A.L.P.A. protested the dismissal and all efforts to settle the grievance by the Mediation Board failed, mainly due to the inability of the A.L.P.A. and the company to agree on a neutral referee. A strike over this grievance was barely averted by the Mediation Board on November 12, 1947. Then on February 3, after the clerks and machinists had quit work, the pilots walked out. The A.L.P.A. insists their strike is not a sympathy strike but is a strike resulting from (1) inability to redress a two and one-half year old grievance over a discharged pilot, and (2) "apprehension" on the part of the N.A.L. pilots over the mechanical safety of the planes as a result of the regular airline mechanics' walk-out. The company received an injunction against the A.L.P.A. restraining acts of violence or threatened violence to company property or personnel on February 17, 1948. Previously (February 8), the company had filed a $5,000,000 damage suit against the A.L.P.A. charging libel and slander with reference to alleged A.L.P.A. statements that the company's planes were unsafe. The company has recruited non-union pilots, mechanics, and clerks, and, at the present time, the airline is operating planes on most of its regular runs. 22 UNIVERSITY OF ILLINOIS misunderstanding would arise in connection with the whole process of collective bargaining. The National Mediation Board and the machinery provided in the Railway Labor Act did yeoman service in minimizing the fric- tion and smoothing the way for the orderly functioning of collective bargaining in the air transport industry. During these formative years when employees and employers were trying to familiarize themselves with the nature and content of collective bargaining, the Board contributed immeasurably to the progress and understanding of collective negotiations by pointing out the respective rights, duties, privileges, and prohibitions imposed on both parties by this legislation. It is inconceivable, for example, that all employee representation disputes over the choice of collective bargaining agents could have been peacefully reconciled in this new industry without some such machinery as that provided for in the Railway Labor Act. Likewise, it is improbable that the 168 new agreements negotiated could have been consummated with so few work stop- pages had it not been for the guiding and controlling influence of this legislation. The 122 mediation and arbitration cases handled by the Board between 1937 and 1947 further strengthen the belief that industrial peace was promoted on the airlines by virtue of their inclusion in 1936 under the Railway Labor Act. Trade agreements in the industry today cover a large portion of the non-supervisory personnel and include most of the features found in non-airline agreements. Rather detailed provisions cover- ing the method and amount of wage payment, hours, seniority, vacations, grievance machinery, and, in some cases, health, accident, old age, and death benefits are typical in these contracts. In the handling of grievances, most union-carrier contracts provide for an appeal for final settlement to a bipartisan system adjustment board. These boards are company-wide in scope for each employee group under contract and are composed of two company and two union representatives. Provision usually is made for a neutral referee in case the board becomes deadlocked. The jurisdiction of these boards is limited strictly to grievances growing out of the interpre- ts ion or administration of existing contracts. Apparently these system adjustment boards have worked rather well in settling grievance disputes without recourse to a higher authority. At least, LABOR RELATIONS IN THE AIR TRANSPORT INDUSTRY 23 no great pressure has developed to date to establish a National Air Transport Adjustment Board as provided for under Title II. 65 In attempting to account for the failure to establish such a National Board, one student has summed up the case as follows: 'There has not been any serious pressure from carrier or employee groups for such an agency. The former are fearful that it would develop policies and procedures based on the much-criticized National Rail- road Adjustment Board. The air transport unions do not feel that the agency as proposed makes adequate provision for representation of various employee classes. The Act calls for only a four-man board composed of two carrier, one pilot, and one ground crew representative. That would not only exclude numerous non-pilot groups, but it would compel the ALPA to share authority with another organization on equal terms, a suggestion it does not con- template favorably. So long as the present system adjustment boards function with reasonable satisfaction, there appears little likelihood that a National Air Transport Adjustment Board will be established." 66 The postwar strikes on the airlines, however, have raised a question in the minds of some people as to the adequacy or effec- tiveness of the Railway Labor Act in maintaining industrial peace in the air transport industry. Before reaching a hasty judgment on this subject, however, several factors should be considered. First of all, if industrial relations in this industry are not too good at present, it should be stressed again that collective bargaining is new in this field. Time and experience probably will bring a better un- derstanding and appreciation of mutual problems, and also will tend to bring a better disciplined membership, a wiser and more temperate leadership on both sides, and a greater will to settle all disputes around the conference table. Mature industrial relations promote industrial peace ; immature ones are more prone to strife. Second, the industrial relations difficulties on the airlines during the past two years were part of the generally unsettled postwar conditions prevailing in most all industry. Strikes and work stop- pages were part of the psychology of the times. The airline disputes 65 Cf. supra, p. 8. Such a board was to be established when and if the National Mediation Board deemed it necessary. 66 Herbert Northrup, "Collective Bargaining by Air Line Pilots," Quarterly Journal of Economics, August, 1947, p. 568. 24 UNIVERSITY OF ILLINOIS were undoubtedly affected by this prevailing sentiment. A different industrial relations atmosphere in the future may very well produce different results. Third, Decision No. 83 has been a disturbing in- fluence on industrial relations, at least between the pilots and the air carriers. The high legislative floor under wages and the ceiling over hours have made it difficult for collective bargaining to function normally under the Act; bargaining is limited to raising labor standards, never to lowering them. Fourth, general improvement in airline industrial relations will depend in large measure on the pilots and their employers. Like the railroad train service brother- hoods, the pilots hold the strategic position and have the highest bargaining power on the airlines. If the pilots develop satisfactory relations with their employers under the present legal machinery, other airline unions will be influenced to follow. The pilots, how- ever, must abandon such ill-advised policies as refusing to recognize any bargaining agent the carriers choose to represent them, and insistence upon new negotiations every time a new plane is intro- duced if industrial peace is to be secured. But if this analysis seems to imply that the Railway Labor Act is being advanced as a ' 'model" for maintaining industrial peace generally, let us hasten to add that such a conclusion is not intended, nor, do we believe, warranted. The emergency fact-finding proce- dure in this law is no sure guarantee of a strikeless industry. In fact, we know of no legislation that will insure this result in a free democracy. All that we would like to offer in conclusion is that this legislation in general has made the rocky road of collective bargaining in the air transport industry a little smoother. 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