National Labor Relations Act

Explanation and Analysis of the Document

Two reasons for passage of the act are identified in the first section of the legislation. First is the problem of industrial unrest. The purpose of the act, as stated, is to provide a mechanism to lessen the causes of labor disputes. This was a matter of great public interest at the time, given the surge in industrial disputes that had taken place in the immediate past and that were continuing as the legislation was debated.

In putting forward the act, Wagner and his supporters were all too well aware that all the major pieces of New Deal legislation were under threat or had been declared unconstitutional by lower courts and even the U.S. Supreme Court. Thus they sought specifically to identify why the legislation was constitutional. It is for this reason that interstate and foreign commerce is cited as the justification for taking action through this legislation. Under Article 1, Section 8, of the U.S. Constitution, Congress is assigned the power “to regulate Commerce with foreign Nations, and among the several States.” That Section 8 applied to matters of dispute between employers and workers had been a matter of considerable debate since the 1880s, and by 1935 there were established precedents to support both sides of the argument. In passing the NLRA, Congress was asserting its position on the issue and seeking a definitive answer to solve a serious national problem.

The second purpose of the act was to establish a National Labor Relations Board (NLRB). This was to be the major mechanism to reduce the causes of labor disputes. While a NLRB existed under the National Industrial Recovery Act and two earlier executive orders issued by President Roosevelt, it had no enforcement powers. Wagner's act laid out such powers for a new board.

Findings and Policy

Section 1 lays out the assumptions and arguments underpinning the legislation. The first assumption is that collective bargaining—the process by which employers and representatives of their employees meet together to discuss matters of mutual concern in good faith—is the key to industrial harmony. A refusal by employers to allow employees to organize themselves into unions that can then bargain with the company on behalf of their workers is stated as the main cause of the high level of industrial strife in America. The pressing need for unions to represent workers in negotiating with employers is explained by reference to the inequality of power between individual employees, who do not have the right to organize themselves independent of the company (through freedom of association), and corporations, which are able to increase their own powerful position by membership in industry or larger business organizations such as the National Association of Manufacturers or United States Chamber of Commerce. The act seeks to redress the imbalance of power between workers and employers by setting out practices that would level the playing field, thus reducing the antagonistic state of industrial relations in America.

The reason this should be a matter for government legislation and not merely a private matter between workers and their bosses is also laid out in this section. In addition to the constitutional justification mentioned in the first sentence of the act and repeated in this section, an argument is made directly that inequality in bargaining power had a substantial negative effect on the economy as a whole. Indeed, it was blamed for making business depressions worse. With the Great Depression as a backdrop, this was a powerful argument to make. In keeping with much thinking behind the New Deal, the act offered a way to stabilize industry and improve economic performance generally. It sought to radically change the balance of power within the American economy. Its authors fully expected that by guaranteeing the right of workers to organize and to bargain collectively with employers, work conditions, wages, and hours would all be improved and lead to higher industry standards. With higher wages, there would be more money circulating in the economy, greater purchasing power, and therefore more economic stability.

The section ends with an important declaration of policy. The United States would pursue its goal of eliminating important causes of obstruction to the free flow of commerce by encouraging collective bargaining and protecting the free exercise of labor unionization.

Definitions

Section 2 of the act contains definitions of terms used in the rest of the legislative text. An “employer” is defined as anyone acting in the interests of an employer but specifically excludes government in the United States at whatever level or anyone covered by the Railway Labor Act or any labor union officer or agent except in their capacity as an employer. An “employee,” beyond the obvious, includes anyone who ceases to be employed in connection with an ongoing labor dispute or any unfair labor practice if he or she has not obtained other roughly equivalent employment. Agriculture workers, domestic servants, and people employed by their families are not covered under the law.

A “labor organization” is defined as any organization of any kind that exists to deal with employers over workplace issues. That such an organization can be defined beyond merely labor unions is specified by the term “agency or employee representation committee or plan.” Employee representation plans were company sponsored and relatively common in the mass-production industries of the 1920s. They continued into the 1930s, often declaring their independence by forming the basis of new labor union locals, especially in the upsurge in union membership that accompanied and followed passage of the National Industrial Recovery Act in 1933 and the NLRA itself in 1935. “Commerce,” as used in the act, refers to interstate commerce, while “affecting commerce,” always a negative term, is used to identify anything that tends to obstruct or burden interstate trade. A “labor dispute” is a disagreement about any of the terms of employment or concerning representation of people in negotiating issues related to the terms of employment. Finally, the “National Labor Relations Board” refers to the body established by the NLRA, while “old board” means a body of the same name established by presidential order in 1934 but did not have the same powers.

National Labor Relations Board

The NLRB was to consist of three members, two of whom would represent a quorum. In other words, if the third member of the board was absent or ill, had resigned, or had died, two members could exercise all the powers of the board. Members of the board were to serve terms of five years. They were to be appointed by the president but had to be confirmed by the Senate. The president had the power to name one of the members as chairman of the board and could remove board members after due process only for neglect of duty or wrongdoing while in office.

Other elements of Section 3 of the act stipulate that the NLRB should present a financial report to Congress and the president at the end of each financial year, specifying the cases heard, decisions rendered, details of all its employees, and a financial account. Salaries of board members are set in the wording of Section 4, as are parameters for hiring staff. To satisfy Frances Perkins, President Roosevelt's secretary of labor, who initially had been unenthusiastic about the proposed NLRA, the board is specifically denied authority to engage in conciliation or mediation activities or statistical work, services that remained under the Department of Labor. Everything from the old board was to be transferred to the new board, including employees, records, property, and papers. Section 5 states that the main office of the board is to be in Washington, D.C., though the board could meet anywhere else in the United States and exercise its powers. Section 6 gives authority to the board to make, amend, or revoke rules or regulations necessary to carry out the act.

The Right to Organize into Labor Unions

One of the major reasons for introduction of the NLRA was that the labor protection portion of the National Industrial Recovery Act, Section 7 (a), had proved inadequate. In Section 7 of the NLRA, the wording states explicitly that employees have the right to organize themselves into unions, to have representatives of their own choosing for the purpose of bargaining collectively with their employers, and to pursue activities for their own protection and mutual aid.

Unfair Labor Practices

Perhaps the most radical part of the NLRA lay in Section 8, which defines unfair labor practices. It was common practice for employers to resist the unionization efforts of their employees through a number of means, from outright dismissal to the use of spies and even private armies. In this act, the federal government interjects itself into relations between employees and employers to adjust the power relations between them. Employers are forbidden to interfere with the rights of workers to form or join a union and to exercise the functions of a union. Employers are also forbidden to interfere with or dominate the formation or administration of any labor organization. They are not allowed to discriminate against workers as labor union members in hiring or in holding a job. However, employers can make membership in a union duly certified as representing their employees a condition of employment. Employees who file charges or give testimony under the NLRA cannot be fired or discriminated against. Finally, it is deemed an unfair labor practice for employers to refuse to bargain collectively with the representatives of their employees chosen under the provisions of the act.

Representatives and Elections

Section 9 of the act provides that representatives chosen by a majority of workers within a bargaining unit should be the exclusive representatives of those workers for the purposes of collective bargaining, provided that at any time any individual or group of employees has the right to present grievances to their employer. The NLRB itself has the right to define what constitutes a bargaining unit within a particular company or plant. It might be an entire company or a factory, or it might be subdivided into operative or craft units. Any disputes as to who are the true representatives of the employees can be investigated and determined by the board in a manner laid out under Section 10, by a secret ballot of the employees or through any other suitable method. The record of any board order resulting from such an investigation or any petition to the courts for enforcement or review of the order are to be included in the transcript of the entire record of the case. Whatever the courts subsequently decide is to be based on the contents of the NLRB transcript.

Prevention of Unfair Labor Practices

Section 10 contains the real teeth of the legislation. It sets out the powers and procedures of the NLRB to prevent unfair labor practices. These powers are exclusive. In other words, in matters of unfair labor practices, no other code, law, or agreement can trump or outflank the jurisdiction of the NLRB.

When a charge of an unfair labor practice is brought, the NLRB or any agency or person acting in its behalf has the power to issue a formal complaint, stating the charges made. The complaint is then served upon the employer referred to in the charge. A notice of hearing at a time and place decided by the board within five days of the serving of the complaint is attached. The hearing takes place before the board or any member of it or an agent or agency nominated by the board. The person or employer complained of can file a response to the complaint and appear in person at the hearing if they so wish. The testimony given by them is then put into the record. If the board wishes, further testimony can be given and arguments heard at subsequent hearings. If at the end of the process the board believes that anyone named in the complaint has engaged in unfair labor practices, it issues a cease-and-desist order and takes action to put right the unfairness, which can include reinstatement of employees. The board also can require periodic reports demonstrating the extent to which its order has been complied with. If after all its hearings and testimony the board decides that no unfair labor practice is proved, it states its findings and issues an order dismissing the complaint. The flexibility given to the board is reflected in the fact that it can modify the complaint at any time before it is served and modify or set aside a part or all of a finding or order before the transcript is filed in a court of law.

The NLRB does not, of course, have its own means to enforce its rulings. What made the NLRA so hated by business was the NLRB's power to have its orders taken up by the higher court system of the United States. Nothing is automatic, however. If an NLRB order is ignored, it has to certify and file a complete transcript of its proceedings with the court. The court will then take over jurisdiction in the case and endeavor to render judgment within ten days. It will serve notice on the person named in the NLRB order and can grant temporary relief or a restraining order until it determines whether the NLRB order should be enforced, modified, or set aside. The power of the courts is limited, however, as the purpose of the courts is to review how the NLRB conducted its proceedings and if its conclusions are sound in all respects. Thus, no new arguments can be considered by the courts unless there are extraordinary circumstances as to why they have not been made to the board. Similarly, all NLRB findings of fact have to be accepted by the courts. Additional evidence can be introduced only if it can be shown that there are reasonable grounds for the evidence not to be heard by the board during its hearings. The jurisdiction of the court is exclusive. Its judgment and decree are final except in the case of appeal to a higher court.

In addition to the power of the NLRB to petition the courts to enforce its orders, anyone aggrieved by a board order granting or denying relief sought for an alleged unfair labor practice can also petition the same courts of appeal for a review. The court will proceed in the same way as if the board had brought the matter before the court.

Investigatory Powers

Section 11 of the NLRA lays out the investigatory powers of the NLRB. The board has the right to all relevant evidence in the case before it. It has the right to compel witnesses to appear and testify before the board and to produce evidence related to the investigation through the power of the subpoena. Board members or the board's designated agents can administer oaths, examine witnesses, and receive evidence. Refusal to obey a subpoena leads to an application by the board to the local district court, which has jurisdiction to order appearance before the board or the production of the required evidence. Failure to abide by such a court order will result in conviction for contempt of court. People cannot refuse to appear before the board or produce evidence on the ground that they would tend to incriminate themselves. Those who claim they would incriminate themselves if they testified can be compelled to testify but cannot be prosecuted for anything revealed by the evidence or testimony, only for perjury committed in testifying. Acceptable means of serving complaints, orders, and other papers of the board are laid out, together with payments for witnesses making depositions and appearing before the board. Other government departments and agencies have to give the board all documentation relevant to any matter before the board upon the direction of the president. In Section 12, punishment for people interfering in any way with the board in the pursuit of its duties is specified to include fines and imprisonment.

Limitations

In the final sections of the act, various limits are outlined. First, the right of workers to strike is specifically guaranteed by saying that nothing in the act should be interpreted to interfere with or diminish that right. Second, wherever provisions in previous acts of Congress might conflict with provisions of this act, the NLRA will prevail except in cases where the provisions of the NLRA cannot be validly enforced. Finally, if any part of the act or its provisions should be declared unconstitutional, the rest of the act should not be affected.