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AX.1\.r.9\(l. xv); .C. . :«1 .. . 32.2.1 . i.‘ . . a. {k v..;¢.‘ur.a,.¢.-..\iy ... «12,1 .‘1: _ .~ .4 ABSTRACT A STUDY OF STRIKE SUBSIDIES by Vernon M. Briggs, Jr. Often public attention and sometimes public policy in the labor field are directed toward specific industrial encounters with emphasis, correspondingly, being placed upon expedient and quick solutions. Thus, the fact that the institution of collective bargaining itself has changed as it has evolved overtime frequently escapes the attention of the traditionally oriented observer. One such alteration has been the introduction of a variety of strike subsidy devices. For the purpose of this study, a strike subsidy is defined as a payment to a party directly involved in a strike--either individual or group, labor or management—— that stems from a formally written or tacitly understood private agreement or public statute and is intended to lessen the economic impact associated with the suspension of income or revenue during a strike period. The adoption and implementation of these devices, however, have been quite selective rather than universal. In quest of an explanation for their relatively limited acceptance, the characteristics and structure of bargaining Vernon M. Briggs, Jr. in those industries in which strike subsidization has become most prevalent and significant are studied. The specific employer devices included in the study are the comprehensive programs currently in Operation in the airline, newspaper, and railroad industries and the smaller scale plans in the Hawaiian sugar industry and the southern California agriculture industry. Several other mutual assistance programs that——to date—ehave not pro— gressed passed the prOposal stage are also included. In a similar fashion, the strike subsidy devices employed or available to national unions are also examined. The specific devices surveyed are national union strike benefit programs; unemployment compensation for primary strikers; strike assistance provided by public and private agencies; and a proposed——but now abandoned-— plan for the creation of a strike insurance program for union members in A.F.L.—C.I.O. affiliated unions. Information concerning the impetus for the creation of these programs, the procedures by which they Operate, and the degree to which they have achieved their originally envisioned goals was obtained mainly through personal inter— views with spokesmen for the involved groups. In addition, more detailed data was gathered through access to the research facilities of the trade associations, labor organi- zations, law firms, and government agencies concerned with the establishment, administration, and supervision of these plans. Vernon M. Briggs, Jr. Having examined individually the current programs and the associated bargaining settings that have spawned these devices, a comparative analysis of the common attributes of bargaining in these industries is undertaken. As a result of this comparison, it is concluded that the development of these mutual assistance programs has been motivated by more than simply an attempt to reduce the financial losses associated with a strike. Rather, these devices often appear to be the outward manifestation of short- comings that presently plague certain bargaining relation— ships. The evolution and perfection of these formal strike assistance programs, therefore, has been largely a reperv ’cussion from several unstable features of particular bar— _gaining structures. These characteristics, in turn, serve simultaneously to eXplain both the motivation for the establishment of the existing programs in certain bargaining situations and the unlikehood that they will spread in any meaningful way into others. The study ends with several recommendations for public policy in this area. A STUDY OF STRIKE SUBSIDIES By Vernon Mason Briggs, Jr. A THESIS Submitted to Michigan State University in partial fulfillment of the requirements for the degree of DOCTOR OF PHILOSOPHY Department of Economics 1965 ACKNOWLEDGMENTS To a significant degree, the completion of this study has been made possible only through the information, sug- gestions, and criticisms offered by a number of individ— uals and the research facilities made available by several organizations. While the following peOple and organizations are in no way to be held responsible for any shortcomings in my presentation or analysis, I wish to express my gratitude to all for their assistance. With respect to orgainizations, I wish to acknowledge the use of the research facilities of the Strike Section of the Division of Industrial Relations of the Bureau of Labor Statistics of the Department of Labor; the Public Dis- closure Unit of the Bureau of Labor—Management Reports -of the Department of Labor; the Library of Congress; the Library of the Association of American Railroads; the Public Documents Section and Library of the Civil Aero— nautics Board; the Research Department of the American Newspaper Guild; the Washington office of the Airline Pilots Association; and the Labor and Industrial Relations Library of Michigan State University. ii With respect to the provision of information, I wish to express my appreciation to Mr. Joseph BIOCh, Head of the Industrial Relations Research Division of the Bureau of Labor Statistics of the Department of Labor; Mr. William J. Driscoll, Bureau Counsel of the Bureau of Economic Regulation of the Civil Aeronautics Board; Mr. Richard P. Davis, Associate Director of Research and Information of the American Newspaper Guild; Mr. Stanfield Johnson, Chairman of the Southeastern Railroad Conference; and Mr. Charles A. Miller, Member of the law firm of Covington and Burling of Washington, D. C. Aside from those individuals who supplied information, I wish to acknowledge the invaluable suggestions and criticisms of the earlier drafts offered by my thesis committee. Specifically, I wish to express my indebted— ness to Professor Charles C. Killingsworth (Chairman); Professor Charles P. Larrowe; and Professor Fred K. Hoehler. Their provocative suggestions and perceptive criticisms were given with a spirit of encouragement which made this thesis seem more than simply the ful— fillment of the final requirements for the doctoral degree. I am especially grateful to Professor Killingsworth--not only for his aid in the completion of this thesis——but also for the guidance that he has given me throughout my entire graduate program. As his iii advisee, his student, and his graduate assistant, I have benefitted from each association. In the years ahead I hope that I shall be able to impart to my students some small measure of the enligtenment that he has given to me . To all of the above, I express my deepest appreciation. iv TABLE OF CONTENTS ACKNOWLEDGMENTS LIST OF TABLES INTRODUCTION . PART I. MANAGEMENT STRIKE SUBSIDY DEVICES Chapter I. THE ”MUTUAL AID PACT” OF THE AIRLINE INDUSTRY. II. THE "SERVICE INTERRUPTION INSURANCE POLICYH OF THE RAILROAD INDUSTRY . . III. THE ”SUSPENSION INSURANCE PROGRAM” IN NEWSPAPER PUBLISHING. IV. RELATED DEVELOPMENTS IN OTHER INDUSTRIES PART II. UNION STRIKE SUBSIDY DEVICES V. NATIONAL UNION STRIKE BENEFIT PROGRAMS. VI. STRIKE INSURANCE FOR UNIONS VII. RELATED DEVELOPMENTS CONCERNING OTHER FORMS OF EMPLOYEE STRIKE ASSISTANCE. PART III. CONCLUSIONS AND RECOMMENDATIONS VIII. CONCLUSIONS AND RECOMMENDATIONS BIBLIOGRAPHY APPENDICES. Page vi 72 ll7 .141 157 17A 185 198 232 2148 INTRODUCTION Often public attention and sometimes public policy in the labor field are directed toward Specific industrial en- counters with emphasis, correSpondingly, being placed upon expedient and quick solutions. Thus, the fact that the institution of collective bargaining itself has changed as it has evolved over time frequently escapes the attention of the traditionally oriented observer. One major altera— tion, which this dissertation undertakes to examine, has ! been the introduction of a variety of 'strike subsidies.” For the purpose of this study, a strike subsidy shall be defined as a payment to a party directly involved in a strike—~either individual or group, labor or management—- that stems from a formally written or tacitly understood private agreement or public statute and that is intended to lessen the economic impact associated with the suspension of income or of revenue during a strike period. The scope of the study is designed to be sufficiently broad to encom— pass the varied subsidy devices. At the same time, the study will specifically exclude the numerous informally agreed upon forms of strike assistance. One such excluded tactic is the practice of some unions which employ the hiring hall principle of reclassifying or relocating their members during strike periods in order that they might be employed elsewhere. Similarly, the existence of provisions in some government contracts and in corporate tax laws which, in effect, grant the financial support of the government to a struck employer are also excluded from discussion. Other infor— mal devices could be cited, but while known to exist, they are typically quite difficult to verify and to document. In any event, the concern of this thesis will be limited solely to the formal strike subsidy programs that are most prominent and furthest advanced in their implementation and operation. The relationship of the strike to the institution of collective bargaining is one of fundamental significance. Professor Neil W. Chamberlain has stated the relation to be as follows: Collective bargaining is a process of voluntary agreement, but agreement comes when the terms pro— posed by one of the parties appear more advantageous to the other than disagreement on those terms. Agreement thus depends on making disagreement costly. It is here that the strike——whether initiated by the union in support of demands which it makes on manage— ment or in rejection of demands which management makes on it—-plays its part. A stoppage of work is the chief means which the parties have of making disagreement costly to the other. The union threatens loss of production if management does not grant the concessions sought, in the belief that the consequent loss of employ— ment to its members will be less costly than agree— ment on the counterterms proffered by management. Or management threatens loss of employment if the union does not consent to its conditions, in the belief that the consequent loss of production will be less onerous than acceptance of the union‘s position. It is only when for either union or manage- ment loss of employment or loss of production is less advantageous than acceptance of the other s conditions that agreement is reached. The strike thus emerges as the most effective method of bringing pressure to bear on the other party in order to secure an agreement on terms. Without it——or the threat of its use——the agree- ment process would be unworkable.l The development of strike subsidy programs has been in direct response to quests by both labor and management to find methods to reduce the economic pressures attributable to the strike. These devices presently represent the culmination of efforts by each side to minimize the economic damage that the other side can inflict upon it as the result of a bar— gaining impasse. The effect of the presence of these mutual assistance plans is to mitigate both the business accounting costs and the economic opportunity costs associated with the strike. In the process of providing a partial income stream during a strike period, these devices have established an element of economic insulation. Such protection seeks as its primary objective to offset The supposed impelling powers for settlement——as outlined by Professor Chamberlain——that have in the past been associtted with a threatened or actual strike. .1 The question concerning the compatibility of strike subsidy devices with the public interesi in collective lNeil W. Chamberlain, Social Responsibility and Strikes (New York: Harper and Brothers, 195 ), p. 376. bargaining was first raised by W. Willard Wirtz--an ex— professor of labor law and currently Secretary of Labor. Secretary Wirtz commented as follows: Private collective bargaining seems to me to work only where one party or the other will be hurt before the public is hurt, and where one party or the other will be hurt badly enough to move toward a settlement before the public is hurt. In situations where employees receive strike bene— fits of one kind or another, and employers receive insurance payments which lessen the shock to them, there is a likelihood that the public is going to be hurt befgre either party is hurt enough to yell "uncle.'l The right to strike——while admittedly not an absolute right——represents a pillar>ofsupport to the maintenance and perpetuation of the system of collective bargaining in our nation. In recent years, the incidence of strike occurrence has declined sharply in the United States.3 Nevertheless, the growing interdependency of our society has witnessed increasing public dissatisfaction over the inconveniences associated with some of the strikes that have taken place. Secretary Wirtz has commented as follows: 2John Herling, ”The Strike Problem,” Washington Daily News (January 10, 1963), p. 23; also see Lee M. Cohen, nWirtz Sees Public Harm in Strike Fund Practices,H Washington Star (September 26, 1962), p. A—22; w. Willard Wirtz, ”The Chal- lenge to Free Collective Bargaining," Proceedings of the Sixteenth Annual Meeting of the National Academy of Arbi— trators (Washington: Bureau of National Affairs, 1963), p. 300. H 3Arthur M. Ross, HThe ProSpects for Industrial Conflict, Industrial Relations (October, 1961), pp. 57—7A. U7 . . .[Plublic toleration for strikes is diminishing rapidly This is partly a matter of economics. With the in— creasing Specialization of functions in the economy, and with the increasing interdependence of its units, more non—participants are hurt harder and faster by a Shutdown than used to be the case. We have always insisted that competition——which includes competition between employers and employees-—is worth what it ) costs the rest of us; but the cost has been going up. In the same vain, Professor Chamberlain has written: Because of the integrated nature of the American economy, a strike has consequences far more ramifying than are revealed by consideration of whether con— sumers can get along for a time without the final product. Producers who rely on the struck product, and others who depend on goods made with the struck product, as well as suppliers of the Struck unit, and other firms who supply not only the suppliers of the struck unit but also the directly and indirectly affected producers are all caught in the backwash of a stoppage. In many instances these repercussions are minor and work no substantial hardship, but in other instances they constitute the most important , L? effects of a strike./ Strike subsidy devices of both labor and management are Specifically designed to influence the force of a threatened in A ‘ l strike or the course of an actual strike. or txal reason, their role in the furtherance of the avowed gotl of our nation's labor policy of encouraging collective bargaining needs to be assessed carefully. 21LWirtz, op. cit., p. BOO. 5Neil W. Chamberlain and Jane M. Schilling, The Impact of Strikes (New York: Harper and Brothers, 195M), p. P51. - l a. See also the related discussion contained in Chamterlain s study on pp. 1—7 and 251—3. The actual development of most of these mutual assis— tance programs, however, represents a phase of an evolutionary process that is motivated by more than simply an attempt to reduce the financial losses associated with a strike. These devices often appear to be the outward manifestation of a pattern of shortcomings that are inherent in some bargaining relationships. Hence, the thesis of this study is: the development of formal strike subsidy devices has been largely a repercussion resulting from the common characteristics of particular bargaining structures and environments which simultaneously explain the impetus for their evolution in certain industries and limit the prOSpects of their introduc— tion into other industries. Part I seeks to identify, to explain, and to comment briefly about the mutual assistance plans established by employer groups. Emphasis is placed upon the most advanced programs that are currently in operation in the airline, neWSpaper, and railroad industries. Each of these three programs is discussed within the framework of the bargaining structure and environment that characterize labor—management relations in these industries. Part II duplicates the process for the relevant devices unions have developed. In order to avoid redundancy,much of the discussion concerning the development of industrial relations in the three indus— tries discussed in Part I——much of which also tends to explain the emphasis upon such devices by the unions in these industries—-is omitted from Part II. Part III contains a summary section which undertakes to compare the similari— ties and dissimilarities of the Specific devices and bar— gaining structures in which strike subsidization has become most advanced. In addition, Part III will contain the con— clusions and policy recommendations which this writer has drawn from the study. Part I MANAGEMENT STRIKE SUBSIDY DEVICES CHAPTER I THE "MUTUAL AID PACT” or THE AIRLINE INDUSTRY1 Introduction On October 30, 1958, representatives of six of the nation's twelve domestic trunk—line carriers and one inter— national carrier signed an agreement, effective retro— actively to October 20, 1958, establishing a program for partially protecting a struck participant from the normal economic losses associated with a strike period.2 The plan is known as the "Mutual Aid Pact.” The original six carrier signatories3 and the four other trunk—line carriers who later joined the pact usually account for approximately 1See Appendix A for a brief chronological outline of the major events relevant to the development of the current status of the Pact. 2See ”Joint Exhibits of the Airline Parties," Vol. I, C.A.B. Docket 9977 (March 31, 1962), Joint Exhibit No. 1, pp. 1—6, for a detailed account of the fifteen days immedi- ately preceding the signing of the Pact. 3American Airlines, Inc., Capital Airlines, Inc., Eastern Airlines, Inc., Pan American World Airlines, Inc., Trans World Airlines, Inc., and United Air Lines, Inc. uBraniff Airways, Inc., Continental Air lines, Inc., National Airlines (National no longer is a member), and Northwest Airlines, Inc. lO ninety per cent of the annual trunk—line traffic carried in the nation.5 Under the provisions of Section 412 (b) of the Federal Aviation Act,6 it was the statutory obligation of the carriers to present the agreement to the Civil Aeronautics Board (C. A. B.) for review. The C. A. B., in turn was re— quired under the law to rule as to whether or not the ob- jectives of the Pact were adverse to the "public interest.H On May 20, 1959, the C. A. B., in a 4—1 vote, extended its approval to the Pact subject to one minor modification. In the original agreement, it was proposed in the event of a strike affecting a Pact member that the struck carrier would refer its customers to the available flights of other Pact participants. Concerned with the competitive impli— cations of this clause, the C. A. B. asked that it be removed and the carriers acceded. It is important to note that the C. A. B.’S approval was granted at that time without the bene- fit of an evidentiary investigation and record having been compiled. In other words, the Pact was judged simply on its "face” value. This procedure led dissenting Board member G. Joseph Minetti to charge that the failure of the C. A. B. to hold a formal hearing to take evidence on this 5Civil Aeronautics Board Order No. E~l5413, p. 3. Delta Airlines, Inc., Northeast Airlines, Inc., and Western Airlines Inc., have not to date been members of the Pact. 649 U. s. c. 1382. 11 plan "is more consistent with laissez—faire concepts than with regulatory responsibility.H7 Within a year after the initial C.A.B. ruling, the original six carriers had been joined by four others due, essentially, to the widening of the coverage conditions of the Pact. The combination of the enlarged scope of the agreement, the extended application of its membership, and the filing of a detailed list of chjettions by Six of the major labor unions in the industry led the C.A.B. to recon- ln. hence, on June 20, ( sider its earlier passive positi 1960, the C.A.B. ordered a thorough inveStigation to be undertaken. AS a result, a long and detailed record has been developed over the four—year period. On July 16, 196A, the C.A.B.-—in a Split vote of three in favor, one opposed, and one in favor in part and opposed in part——granted approval to the Pact for a limited three—year trial period. General Nature of Labor Relations in the Industry Before discussing the Mutual Aid Pact itself, it is important to comment briefly upon the general nature of labor relations in the industry. Unquestionnbly, the domi- nant feature of virtually every aspect of this industry is 7Richard E. Mooney, ”C.A.B_ Aide Scorer Strike—Pact Plan," New York Times, May 2l, 1959, p. o2. 12 the degree of direct and indirect involvement of the federal government. As one writer has commented: Scheduled air transportation has always been the object of paternal federal concern and, in fact, originated as a public enterprise gnder Post Office sponsorship from 1918—1925. The beginning of public regulation of industrial relations in the industry dates back to 1936. In that year, Title 11 was added as an amendment to the Railway Labor Act of 1926. The amendment9 extended virtually all of the legal provisions applicable to railway labor relations under Title I to the airline industry. Later, in 1938, the Civil Aeronautics Act was passed. This law had the direct effect of establishing the C.A.B. as the regulatory agency for the industry and the indirect effect of perpetuating the industry structure that has continued to prevail up until today.10 Under the tenure of the C.A.B., the market structure has been such that approximately ninety per cent of the annual air traffic 8Mark L. Kahn, ”Mutual Strike Aid in the Airlines,” Papers Presented at the 1960 Spring Meeting of the Industrial Relations Research Association (May, 1960), p. 596. 9 149 Stat. 1189. lOHorace M. Gray, ”The Airline Industry,” in The Struc— ture of American Industry, Walter Adams (ed.) (3rd edition; New York: The Macmillan Company, 1961), pp. A7A—475. Since its eStablishment, the C.A.B. has not issued a single new trunkeline certificate. Aside from the ”piecemeal extensions,” "modifications,” and the transforming of ”certain monopoly routes into oligopoly routes,” the C.A.B. has refused to alter the original industry pattern that existed in 1938. 13 is carried by trunk—line carriers. With respect to labor policy, the Act of 1938 required that any carrier desiring to secure and to retain a certificate of convenience and necessity must comply with Title 11 of the Railway Labor Act.11 In 1958, the Federal Aviation Act was passed. Under this statute, most of the safety functions of the C.A.B. were taken over by the Federal Aviation Agency. The Act of 1958, however, also placed increased responsi— bilities upon the C.A.B. One of the stipulations of the Act was that the C.A.B. was to use as a criterion in evalu— athng'the acceptability of the actions of its subjects, therminner in which those actions affect the "public in— terest:." 'The major explanation for the industry characteristic of extensive governmental intervention into virtually every facet of its operations is to be found in the historical nature of the relationship between the industry and the economy.12 Originally, the industry assumed an important rOle-~which it has maintained-~in the development of the pOStal system of the nation. Later, as the civil and mili- tary potentialities of the airplane were realized, the N llSec. 401(1). 12Gray, op. cit., pp. A72-M73. 1M needs of the nation for advanced domestic transportation and developed national defense systems led to further federal involvement. In all periods, the necessity for the estab— lishment and the enforcement of safety standards has meant constant government supervision of many sectors of the industry. Thus, it is only logical to expect that the ram— ifications of the governmental activities in the industry would affect substantially the conduct of industrial rela— tions. Accordingly, one writer has observed: The most casual investigation of the airline industry should reveal that to talk about ”free” collective bargaining in such a context is highly unrealistic. this is primarily because airline labor relations cannot escape from the inhibitions imposed by the public's natural concern for the availability and sound development of air transportation. The special procedural constraints of the Railway Labor Act are but a minor part of the total picture. Of major im— port is the complex dose of economic and safety regu— lation, combined with subsidization as required, under which the industry has developed. Unions and managements alike have devoted much effort and large resources to lobbying and represen— tation before the C. A. B. and Congress as they in— evitably must. The relative bargaining strength of these unions and employers, even in their ostensibly "private” negotiations, is shaped to a major degree by the impact of governmental economic and safety decisions, so that the Government cannot be neutral with respect to union—management relations even if it would. The application of the Railway Labor Act has meant that a detailed apparatus for minimizing the likelihood of 13Mark L. Kahn, ”Mutual Strike Aid in the Airlines,” Monthly Labor Review, June, 1960, pp. 590—591. work stoppage is applied to the bargaining situation. One distinctive feature of the statute is its detailed regu— lation concerning the negotiation process. The bargaining participants are required to progress through a series of carefully prescribed ”steps”——each designed to enhance the opportunity for a settlement at that stage. These steps include obligatory conferences between the parties; of the National CO mediation attempts through the auspice Mediation Board (N.M.B.); the use of bipartisan system boards of adjustment—~which if a deadlock ensues may bring in a neutral referee——to proffer binding settlements of unresolved grievances and disputes arising out of contract interpretation; voluntary arbitration of issues regarding changes in rates of pay, rules, or working conditions; and the establishment of Presidential Emergency Boards to determine the relevant issues in dispute and, generally, to tender recommendations for terms of settlement. In Short, the present law governing labor relations in the industry requires compulsory negotiation and compulsory gOVeI‘nmental investigation and recommendations but it does not require compulsory arbitration of new contract terms, In addition to detailed regulation of the early Stages pertinent to the negotiation of a collective bar— gaining agreement, the Railway Labor Act is also concerned withthe administration of a contract onse it is is effect. 16 It is a legally punishable offense for any carrier to alter the wage rates, change a work rule, or vary a working condi— tion,14 except by following the procedures described in the Act.15 Thus, one writer has summed up the legal status that affects the collective bargaining environment in the indus- try with the following words: The present Railway Labor Act thus not only assumes that agreements resulting 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 enforceable contracts by either side. Air transportation agreements today, there- fore, represent contracts, establishing property rights for individual employees, which are enforceable through adjudication by adjustment boards.16 The justification cited for the introduction of this elabor— ate system of federal participation in matters relevant to industrial relations is that it is considered to be in the best interest of the nation to minimize the incidence of strikes in the field. Thus, the Railway Labor Act was ap— plied to the airline industry to achieve this social goal.17 It is against this broad background that the system of labor—management relations in the industry has developed. The first major union to be formed was the Air Line Pilots 14Title I, Sec. 2, paragraph 7. 15Title 1, Sec. 2, paragraph 6. The procedures in— volve attempts to make the parties themselves come to terms but, if these efforts should fail, then a ruling by a bi— partisan adjustment board—-with a neutral referee~~if nec— essary-—is final and binding. 16E. B. McNatt, Labor Relations in the Air Transport Industry, 1947—57 (Urbana: University of Illinois Press, 1958)) po 7. l71bid., p. 11. 17 Association in 1931. In the non-pilot occupations, trade unionism did not come until the early 1940's. In the years following the war, the rapid growth of the industry led to intensive unionization of all categories except the white collar occupations. Currently there are nine unions that represent the major job classifications that bargain with 18 the eleven domestic trunk-lines and one international carrier.19 In addition, most carriers also bargain with the several other minor unions. Moreover, not only does each trunk-line bargain with numerous unions but also there are, in many cases, several unions that compete to repre— sent each job classification. The rapid growth in union organization has been accompanied by a large increase in the number of labor agreements on file with the N.M.B. Speaking again in terms of the entire airline industry,20 the listing shown below is an indication of this development.21 18The number of domestic trunk—lines was reduced to eleven on June l, 1961, when Capital merged with United. 19For a detailed listing of the certified employee representatives for each occupation on each individual carrier, See Twenty-ninth Annual Report of the National Mediation Board (Washington: U. S. Government Printing Office, 1963), p. 9M. 20The "entire airline industry” refers to trunk—lines, feeder lines, non-scheduled lines, and cargo carriers. 21Twenty—ninth. . .Board, ibid., p. 85. 18 Number of Labor Agreements Year On file with N.M.B. 1940 an 1945 98 1950 241 1955 275 1960 28A 1963 286 With the rapid growth of multiple unionism has come another distinctive characteristic of industrial relations in the industry. In almost every case, collective bar— gaining is conducted on a single—carrier and single—union basis. Several factors have given rise to this develop— ment. One cause has been the fact that each carrier has dissimilar operating problems. These unique conditions stem from the widespread differences that occur in the route patterns, time schedules, and types of equipment used by each carrier.22 Another factor has been the craft unionism that has grown out of the Railway Labor Act. A major function of N.M.B. is to resolve employee representation diSputes. If a dispute arises between employees over the issue of who is to be their bargaining agent, it is the obligation of the N.M.B. to resolve the question. The N.M.B. is required, upon the request by any party to the diSpute, to designate who is to participate 23 in the certification election. The standard relied 22 2 3Title I, Sec. 2, Paragraph 9. Kahn, op. cit., (I.R.R.A. Paper), n. 597. 19 upon by the N.M.B. to make such decisions is the so—called "majority rule provision” of the Act. Under this doctrine, "the majority of any craft or class of employees shall have the right to determine who shall be the representa- tive of the craft or class for the purposes of the Act."24 This representation provision of the Act was imposed upon the airline employees at a time when the industry itself was in its infancy. In virtually all other industries in the nation-—including the railroads—~the basis of union organization evolved over time upon a pattern determined by the employees themselves and by the inherent labor market characteristics of the particular industry. In the airline industry, the organizational pattern was decreed by Congress. Accordingly, in commenting upon the forced reliance of the N.M.B. upon the ”majority rule provision,” one writer has stated: This provision, however, apparently guarantees that craft unionism rather than industrial unionism will be the primary structural form of employee or— ganization on the commercial airlines. Since each craft has now developed its own Special problems and since several unions are rivals for the same members, the unions-—with the exception of the International Associ- ation of Machinists (I.A.M.)——have shown ”little or no 24Title I, Sec. 2, Paragraph A (The emphasis is supplied). 25McNatt, op. cit., p. 8. 20 f interest" inmulti—unitbargaining.86 Still another pressure favoring individual bargaining has been the interpretations given to the Railway Labor Act by the C. A. B. The Board has ruled that multi-unit bargaining ”cannot be imposed by any party to a dispute but must come only as a result of 27 , . . . ' Thus, since in most inStances the consent of all parties.’ it is to the advantage of one of the parties not to favor englargement of the bargaining unit, it is usually impossible for both parties to agree to bargain in any other manner than on a single—union and single—employer basis. A final consideration is the fact that the Air Transport Association (A. T. A.), the industry trade association, is quite weak in its duties and powers when compared with employer associ— ations in comparably large industries In fact, the position assumed by the A. T. A. in the development of the Mutual Aid Pact was only of minor significance and was limited solely ult, in the past U) to the early formative stages. As a re the A. T. A. has not provided any significant encouragement to attempts to seek industry—wide bargaining positions. The summary effect of all of these considerations had gener- ally been one of fostering an indifferent attitude among 26Ibid., p. 23. 278 c. A. B. 35A (19Afln 21 employers and unions toward the possibility and the desirability of bargaining at the industry level. Compounding the problems associated with multiple unionism has been another troublesome bargaining charac— teristic. Until recent years, it has been the "almost universal practice" of the airline unions to insist upon one year contracts.28 As a result, industrial peace nas usually been short—lived. The employers have often received annual demands for wage and rule changes from almost all of the unions with which they bargain. Recently, however, there has been some tendency toward somewhat longer contracts. The major element causing instability in industrial relations in the industry, however, has been the rapid in— roads made by advancing tecnnology. While certainly not peculiar to this industry alone, nevertheless, the diffi- culties of bargaining in an environment characterized by rapid technological change have been both numerous and onerous. On the employee side, some occupations have been created—-as the flight engineers which first appeared in 1948--as the direct result of adjustments in job content through the introduction of new equipment. During the same period, however, jobs like the flight radio officer and the flight navigator have been made obsclete Similarly, just as the introduction of the DC-n and the Constellation 28McNatt, op. cit., p. 23. in 1948 brought the flight engineers into existence, the coming of the jet liners in late l958 has treatened to eliminate them.29 The pace and breadth of technological change in the industry has raised many problems for all of the bargaining units. The uncertainty of the future has been further inflamed by the aforementioned presence of multiple unions on the industry level and rival unionism on the job level. As for the employers, the jet age has brought many managerial problems. The switch to jet air— craft has meant extensive capital investment, increased fixed costs, rapid obsolescenceof equipment, and—-for the first few years after the introduction of the larger and faster jets—-unplanned over—capacity. Thus, the need of employers for industrial peace in recent years has probably been without precedent. The likelihood that stable indus— trial relations could be achieved ih the industry, however, has never been dimmer. As a final consideration, mention should be made of the impact of a strike upon the service provided by the industry. Air passenger service is not an item that can be stockpiled prior to or recouped after a strike. When the service is demanded, it is needed at a particular time. 29Albert A. Blum, HFourth Man Out——Background of the Flight Engineer—Airline Pilot Conflict,” Labor Law Journal, August, 1962, pp. 649—657. 23 If the service is not available, the would—be—revenue is forever lost. Consequently, air tranSportation is one in— dustry today in which the strike weapon has retained its full economic effectiveness. It is within this framework that the Mutual Aid Pact was conceived and put into effect. Establishment of the Original Pact Origins As with virtually every aspect of the Pact, even its origin has been the subject of major controversy. The carriers claimed that it was a spontaneous reaction to the union use of a whipsaw tactic in strike against Capital Airlines beginning October 17, 1958. Capital had been one of six carriers that had been engaged in a contract diSpute with I. A. M. All six carriers had been joint parties in a single Presidential Emergency Board (Board No. 122) pro— . BO . ceedlng before the strike. Capital accepted the recommen— dations of the Board; I. A. M. rejected them. Capital, which was in serious financial difficulties,31 was struck while all of its competitors continued to operate (including, 30On only two previous occasions since the airline in- dustry was brought under the Railway Labor Act has more than one carrier been a party in a proceeding before an Emergency Board. They were Board No. 36 in 19A6 and No. 108 in 1955. 31”Joint Exhibits of the Airline Parties,” Vol. II C. A. B. Docket 9977 (December 18, 1961), Joint Exhibit A, p. 3. Testimony of Robert I. Wilson, Vice President——Per~ sonnel and Properties of Capital Airlines. 2A 32 of course, the five other carriers involved in the dispute). Thus, the carriers have stated that "the Capital strike was» unquestionably the immediate event that inSpired the Mutual Aid ageeement."33 The unions, on the other hand, argued——in a view later 34 sustained by the Hearing Examiner ——that the Pact had many antecedents insofar as attempts to joint action by airline employers to counter union strike actions were concerned.35 The unions contended that as far back as 1947 the carriers had attempted to establish group bargaining when the Airline Negotiating Conference was established and replaced in 1950 6 by the Airline Personnel Relations Conference.3 In the 32Ibid., pp. 1-A; see also ”Brief of the Carrier Parties to Examiner S. Thomas Simon,” C. A. B. Docket 9977 (November 29, 1962), p. 8. 33Ibid., ”Brief of the Carrier. . .to Examiner. . .," p. 8; see also, ”Joint Exhibits. . .,” Vol. II, op. cit., Joint Exhibit A, p. 1. 341! Initial Decision of Hearing Examiner S. Thomas Simon,” C. A. B. Docket No. 9977 (May 1A, l963), pp. 55—61. 35”Brief of the Union Parties to Hearing Examiner S. Thomas Simon in Opposition to Approval of Mutual Aid Pact,” C. A. B. Docket No. 9977 (November 29, 1962), pp. 28—33. 36The exact original purposes of these organizations arecylihe“vague” (ibid., pp. 56-57, esp. footnotes 91 and 92). Both organizations served virtually no consequence as bar- gaining entities. The Airline Negotiating Conference went out of existence shortly after its formation without ever assuming any significant role. The Airline Personnel Rela— tions Conference has served solely as a body for the gather— ing and disseminating of statistical information relevant to industrial relations matters. 95 months prior to the actual adoption of the Pact, several other devices had been seriously studied. An official of Trans World, which was about to introduce its jet equipment and was apprehensive about its effects on labor relations, had been working Y'for a long time” on a proposal which pertained solely to Trans World, Pan American, Ameri— can, and Eastern. These four carriers were to be the first to use jet equipment. The proposal simply entailed the principle that the operating competitors would pay over to a struck carrier an amount equal to the increased revenue received during the strike period. The exact details were never completed. Another proposal was also under study by officials connected with A. I. A. Their plan also centered upon the soon-to—be jet carriers. The idea involved the possibility of establishing a broad group bargaining plan which sought to avoid the possibility of a selective strike against one carrier by forcing the union to strike all of them. The strike against the group would be forced by having the struck carrier lease its equipment to the remaining carriers that were operating. The pilots on the other lines would, in all likelihood, refuse to fly the equipment and the non-struck carriers would be free either to dis— charge the pilots or to shut down their operations due to the fact that the pilots had breached the terms of their 26 37 contract. In this manner, group bargaining could be attained. The group bargaining plan was, if possible, to be merged with a mutual insurance plan. A special company was to be established by the interested carriers in Nebraska and additional insurance coverage would be sought from Lloyds of London.38 Thus, the unions claimed that "the original Pact was in fatt a step in an overall program of strike insurance and group bargaining by which the carriers were to exert increased pressure on the unions."39 Subsequently, the Hearing Examiner held that "the record is clear that the mutual aid principle had been under consideration by the major air carriers for at least a year ~ A prior to the execution of the original Pact.” 0 Provisions The operational principle upon which the original Pact was based can be stated simply—-but its actual mechanics 37”Brief of Union Parties . , . Examiner,H op. cit , C O ' ' C T—-—‘—‘— 1 pp. 29—30; als§, see ”Initial Decision . . , Examiner . , .,' op. cit., p. 5 , esp. footnote 96. 38Ibid., HBrief of Union Parties . . .,” p. 3o. 39Ibid., p. 3A. 40” p. 55. Initial Decision . . . Examiner . ,” op. cit , 27 are quite complicated. In the event that a strike occurred against one of the participating carriers involving any one of the three conditions for coverage, then: each party will pay over to the party suffering the strike an amount equal to its increased revenues attributable to the strike during theaterm thereof, less applicable added direct expense. These payments have subsequently been referred to as 1'wind- fall payments.H The three conditions which brought the strike within the scope of the original Pact were:u2 l. A strike called to enforce union demands in excess of or opposed to the recommendations of a Presidential Emergency Board appointed under section 10 of the Railway Labor Act. 2. A strike called before exhaustion of the pre— strike procedures of the Railway Labor Act. 3. A strike which is Hotherwise unlawful.H In an earlier draft of the original version, an official from Trans World suggested two other situations which would have made the Pact applicable};3 These were strikes for the purpose of compelling the employment of personnel—- 1. in excess of the number required by government regulations. 2. with training in skills not required or with greater qualifications than those required by the regulations. ulAgreement Dated October 20, 1958, C A.E. Docket 9977, p. 3. 42ibid., pp. 2-3. 43”Joint Exhibits of the Airline Parties,H Vol. I, C.A.B. Docket No. 9977, Joint Exhibit No. l, p. A. 28 These latter two provisions were removed from the final version of the original draft "so that the agreement would be confined to the principal objectives of strengthening the procedures of the Railway Labor Act."Lm Under the original Pact, the exact procedure for com- puting the amount of the windfall payment was determined individually by each of the carriers. Commenting on this point, J. Donald Bowers, an executive of United Airlines, stated that "each carrier retained freedom to compute its obligations as it throught best."45 Thus, each carrier devised its own definitions and its own formula for the pur- poses of computation. It is important to note that under the windfall payments provisions, the amount to be turned over to the struck competitor is determined by the paying carrier. The Original Objectives of Management The carrier members have contended from the beginning that the Pact is a ”defensive weapon” which is needed to correct an alleged ”imbalance" in bargaining power, in favor of the unions.46 Essentially, the explicit carrier qubid., p. 5. “5"Joiht Exhibits . . .,” Vol. II, op. cit., Joint Exhibit G, p. 2. 46 :E. 3., see "Brief to the Civil Aeronautics Board,” C.A.B. DQCket No. 9977 (January 5, 1959), pp. Aflff. 29 arguments are that the airline unions have developed a multi— tude of collective arrangements for inter-union and intra— union co—operation and concerted action, and that the loss of goodwill, the high post-strike costs associated with resuming normal operations, and the high fixed costs that cannot be reduced in times of shutdowns make the economic burden of a strike against a single carrier extremely severe. Implicit in the early consideration of the Pact was the fear that the introduction of the new and expensive jet aircraft would cause unrest among the unions. A candid statement of the objectives and justifications of the Pact in its early stages was provided in a supplemental brief filed by Trans World with the C.A.B., which states; Threatened by strikes, the carriers therefore, sought an arrangement which--consistent with the principle of self help~~would enable them if a strike occurred (1) to obtain revenue derived from what should have been their own traffic, (2) to prevent the unjust enrichment of others from their routes and trades, and A?) to minimize the incon- venience to the public. The Unions' Initial Reaction The airline unions bitterly assailed every aspect of the plan. A sampling of the earliest union reaction to the original Pact revealed such statements as: 47Supplemental Memorandum on Behalf of T.W.A., C.A B. Docket No. 9977, pp. A—B» 30 The financial aid agreement . . . would be in our opinion a declaration by the Board of "Open Warggre" upon all unions representing airline employees. Such an agreement, if allowed to stand, will make nationwide problems of every local labor dispute and will lead to extended bitter unrest as anti-union pressure is resisted by airline employees. 9 If anyone wished to invent a device for causing labor unrest and instability in the airline industry, they could not hays done better than the agreement before the Board. A tangible indication of the immediate apprehension felt by the unions was their announcement in September, 1959, of the proposed formation of their own mutual alliance. Subsequently, on April 12, 1960, seven airline unions51 joined together to form the Association of Air transport Unions (A.A.T.U.). It was the avowed purpose of this organ— ization to seek a common contract expiration date for their 48Letter from Mr. James F. Horst, Vice President of the TranSport Workers Union, to the Civil Aeronautics Board, November 5, 1958, contained in C.A.B. Docket No. 9977, p. 1. 49Letter from Mr. George R. Petty, Jr., President of the Flight Engineers Association, to the Civil Aeronautics Board November A, 1958, contained in C.A.B. Docket No. 9977, p. 1. 5O"Objections of the International Association of Machinists,” November 14, 1958, contained in C.A.B. Docket NO. 9977: p° 8‘ 51The seven unions were the Air Line Pilots Associa— tion, the Air Dispatchers Association, the Brotherhood of Railway and Steamship Clerks, the Flight Engineers Inter— national Association, the TranSport Workers Union, the Inter- national Association of Machinists, and the United Automo— bile Workers. The U.A.W.——which was representing a small bargaining unit connected with Continental Airlines——ceased to represent any carrier employees shortly afterward. As a result, it dropped out of this group and the subsequent pro— ceedings before the C.A.B. 31 bargaining units and to oppose the continuation of the Mutual Aid Pact by petitioning the C.A.B. for a review of the plan. The fact that such arch rivals as the Air Line Pilots Associ- ation and the Flight Engineers International Association and also the International Association of Machinists and the Transport Workers Union would unite into this single body is a good indication of how strongly the unions were opposed to the Pact. Yet despite the fears that drove the unions together, their lack of unity in the past soon reasserted itself. As a result the A.A.T.U. was inactive by November, 1960. The Coverage Problem Almost immediately after the adoption and implementa- tion of the original Pact, the carriers realized that the agreement was inadequate. The problem was that the limited terms of coverage of the Pact were also restricting par- ticipation by other carriers. It was quickly seen that the more trunk—lines that participated, the more successful the agreement would be. The other non—Pact competitors were under no obliga— tion to pay over to a struck carrier any windfall payments. Thus, Eastern found several of its direct competitors (Delta, Northeast and National) not in the Pact; United found Western to be a non—participant; and Pan American saw both North— west and Braniff outside the agreement. Consequently, these 32 lines in particular began to agitate for an expansion of the membership of the Pact. Eastern, in fact, threatened to pull out of the original Pact unless its competitors could be enticed into joining. In a letter to Robert B. Hawkins, Counsel for Capital Airlines, the President of Eastern wrote: Eastern feels very strongly that all the trunk carriers should be parties to the Mutual Aid Pro— gram, and we wish to give notice that we will not agree to an extension beyond October 20, l960, un— less the carrier participation is expandgg to in— clude Eastern's more direct competitors.“— Efforts had been made before to expand the participa— tion from the original six to the other seven trunk—lines. In fact, it was only shortly after the original agreement was signed on October 20, 1958, that overtures were made to the other trunk—lines to join “but none of them signed."53 The essential reason that the other seven abstained from jointing was dissatisfaction with the coverage condi— tions of the original Pact. The non—participants were all the smaller firms in the industry. These carriers believed that the agreement would not benefit them since a condition for the receipt of payments was that a strike be called following the issuance of recommendations by a Presidental 52”Joint Exhibits . _ ,” voi, l, op. cit., Appendix to Joint Exhibit 1, p. 22 tletter dated October 1A, 1959). 53Ibid,, Joint Exhibit 1, p, 7, 33 Emergency Board. The smaller carriers felt that there was little likelihood that such a Board would be convened if they were struck. Their position was reinforced by the H Eisenhower Administration‘s alleged policy at that time not to appoint Boards except where a strike would shut down one of the few largest carriers.”5fl Thus, if expanded membership were to be achieved, the coverage terms would have to be broadened. To accomplish this objective, an amendment to the original Pact was required. The Amendment of March 22 l96O , Coverage and Participation To remedy the coverage restraint which was serving to limit the participation rate, the carriers filed an amend~ ment to the original Pact on March 22, 1960. The amendment added a fourth criterion that would make a member carrier eligible for payments. Specifically, the coverage of the Pact was broadened to include a strike ”which has been called in the absence of the establishment of such a board [i.e., a Presidential Emergency Board] and the struck party H 5UmBrief of the Carrier . . . to Examiner ., Op. cit., p. ll; their view stemmed from a dispute in which the Administration declined to appoint an Emergency Board to study a threatened strike involving Western Air- lines and A. L. P. A. A strike of lO8 days ensued. 34 has in all respects acted in compliance with the Railway Labor Act."55 The immediate effect of the new coverage provision was just as the original pact members had hoped. 0n the same day that the amendment was filed with the C.A.B., Braniff, National, and Northwest officially notified the C.A.B. that they had joined. Shortly afterward, on April 7, 1960, Continental also gave official notice of its member— ship. Thus, only Delta, Northeast, and Western remained out- side the agreement. The overall effect of the amendment, however, was not merely to provide coverage for smaller firms which would not normally warrant the convening of an Emergency Board. At this stage it meant that any ”lawful” or ”unlawful” strike against a carrier would bring the Pact into operation. The A.T.A. was somewhat skeptical of the legality of the pro- posal but, apparently, felt it was worth the risk, In a letter to the President of Pan American,S G- Tipton, President of A.T.A., stated: . . . 0n the other hand, we have been concerned that an agreement which permitted payment to a struck carrier without regard to Egrcumstances would be criticized by the C.AOBAJV 55”Initial Decision . . . Examiner . , .,'~gp. cit., Appendix D, p. 139, 56”Joint Exhibits . . .,H Vol. l. op. cit., Appendix tocjoint Exhibit 1, p. 2A. Letter dated Jinafiry F, 1960. The stipulation that the struck party must have complied with all of the provisions of the Railway Labor Act, it would seem, was designed to minimize this fear. Shortcomings of the Amended Pact Soon after the amendment to broaden the coverage of the Pact to cover an additional circumstance, the Pact members found that the agreement was still not completely satisfactory. The obgeciiffis were 'utiedkmm they all came to the same conclusion. specifi;allv, the windfall '2’ payments were not providing JJGQuule protertion due to financial and computation l limitniimhs- W One of the problems came t; light when Continental sustained a small strike which caused it to reduce its service. For the most part, however, its flight schedule was unaffected. Continental requested, nonetheless, that if! its four competitors tender their windiall payments as . [-727 , . , . required under the Pact.’ fhe gamgetitors—-Americah, 1 57The original Poet and the wmehded Fwol were bo“fi silent on this issue as to whet er or not wirdfsll payments were payable in partial shutdowns nf serviwe, la Sure, 1960, a strike of Eastern's pilots in Miami, Florida, against Hinflight inspectioh'Y practices o“ the Federal Avi- ation Agency led to a partial ShquGWf. yhe s rike war classified as "unlawful“ under tne tern »f the Railww: Labor Act. The question of the htpllgfl ility gt the Punt to such a situation was sent to arbitru ion where, subse- quently, the arbitrator held that the P ct did cover such circumstances and that windfall payment were required from its competitors (see HJoint Exhibits. , .,” Vol. ll, op. cit., Joint Exhibit C, p. 73, As a: mside, it is of inter— ESE to note that Eastern had threatenej to wi“«dr w from The Pact if partial shutdowns were not included ‘uee, ”Toint Exhibits. . .,” Vol. l, Appendix l, p. 60} L {P \—‘ (T (U 4 K .0) U.) 36 Eastern, and Trans World—~replied that they could not dis— cern a significant increase in their passenger revenues that could be attributed to the partial shutdown. Thus, Continental charged that: It appeared to us that the mechanics of computing Hwindfall payments” were such that a carrier our size could easily establish Hwindfall payments” for which it was obligated as a consequence of a strike on a large carrier, but, on the other hand, the large carrier could find it very difficult to identify ”windfall paymentsH which it had obpéined as a result of a strike on an airline our size./ Soon afterward Continental served notice that it in- tended to withdraw as of December Bl, l96l. A second source of discontent was voiced by Pan Amer— ican. Their complaint stemmed from the fact that most of its competition was with foreign airlines who were not in— cluded in the Pact. Thus, Pan American found itself ob- ligated to pay out funds to its few domestic competitors but seldom receiving funds since most of its competitors were other international carriers. Accordingly, the air- line complained that it was on a Hone-way street.H Simi— larly, a memorandum written by an official of American Air— lines on this topic commented: Actually, the present formula simply does not apply to Pan American in event of their being struck, . . . In other words, it is a bit unrealistic to have ever included Ehem in a mutual aid pact with the domestic carriers./9 58Transcript of Hearings before Examiner, March 1, 1962, Vol. H, pp. 390-39l. 59”Joint Exhibits, . ,,” Vol. l, op. cit , Appendix to Joint Exhibit 1, p. 59 (memorandum dated 0 trber lC, 1960) / 37 Braniff, Northwest, and Trans World were also concerned with the problem. Yet in comparison with Pan American, the other three had many more domestic routes and were affected to a much lesser degree by the issue. The third cause of dissatisfaction was that several of the domestic carriers still did not find their chief competitors in the Pact. Thus, they reiterated their earlier H complaint that they were on the Hshort end of the balance sheet when it came to a comparison between amounts received and amounts paid out. Eastern still found Delta, Northeast, and-—as of December 3l, 196l—-National60 to be non—Pact members. United still saw Western outside the terms of the agreement. A fourth insufficiency, which was of a conjectural nature, gave rise to the concern of some parties. It was quite conceivable that the competitors of a struck carrier could normally be operating at full or nearly full capacity at the time of the strike. Consequently, little, if any, windfall payments would be forthcoming. Thus, the stage was set for another important amendment. As of this date, National withdrew from the Pact; £13, p. M. 38 The Amendment of March 26, T962 Early Stages of the Proposal The carriers had actually begun inquiries into possible method of increasing the payments at least as far back as 1960. In a letter of April ll, lath, s. G. Tipton, Presi— dent of A. T. A., wrote to the member carriers the following: It was the c»hsersrc of :1iiiwr amzng the initial signatories to the wwtu :l Aid l3(l that it should be supplemented by n ins,g: -zw'e ngye aimwangcnnent, I was requested to 1_nvestig are the feasibility of such a program. Enclosed is a mem rardum outlining our investigation and recommendation,©i In this memorandum, three alternative proposals were set forth. The first suggestion was CD ado apt a strike insurance program based almost entirely on the program that had been devised by the railroad industry and in operation Ch DJ since September, 1959. ' The se ord proposal was called M "an interline agreement with fixed benefits. Under this proposal--which is a modification 3f the railr ad program-- each airline would determine its minimum daily e {em e (called its daily indemnity) and these would be summed to obtain the total daily indemnity :or all 1f the tariiai- pating carriers. The ratio of tne two figures thus ob— tained would indicate the proportionate amount of payment which every carrier would be liable to pay to the struck v - - . - ' H 1 V _. . 61'JOint Exhibits. . .,' v: 1. l LLEECQ.U ,. lai t E\- hibit 1, p._393 the memorandum is 00-1ainea Tr fiooom W m D H < m Amvcmmsoca. Amomfi .Hm nongoooo . wmma soooooow s.sosm one Hausa: some: assesses Hashesaz co assessm--.a mamas 60 TABLE 2.-—Summary of Supplemental Payments Under Mutual Aid8 (October. 1963) (Thousands) Carrier Amount Paid Amount Received American l,O6l - Braniff 118 — Continental — — Eastern - 6,069 Northwest 308 — Pan American 1,023 - Trans World 169 - United 3.391 ‘ Total 6,O7O+ 6,069* aSource: HInitial Decision of Hearing Examiner," May 14, 1963 Appendix H, p. 151; there were no ”supple— mental paymentsH made between May - October, 1963. * These figures do not balance exactly due to rounding on my part and due to slight differences between the original figures of the paying carriers and those of the receiving carrier. 61 the concept. It has been employed only once—-in the June, 1962, strike against Eastern by the Flight Engineers. In that case, Eastern received $16,014, 517 in total mutual aid with $9,945,307 representing windfall payments and $6,069,21O representing supplemental payments. In other words, supplemental payments accounted for over one-third of the total aid received from the Pact. Participation Currently four of the existing eleven trunk—line carriers remain outside the Pact. Delta, Northeast, and Western have never shown any interest in joining the agreement. National, the largest of the non—participants, became embittered as a Pact member and withdrew. Due to a provision contained in the amended Pact of March 26, 1962, National cannot rejoin the Pact wittout making the net payments to the Pact members that it would have owed had it not withdrawn- As a result, it would appear unlikely that any of the itun=tmill join the Pact imiilie foreseeatle future. As a result the effectiveness of the windfall pay— ments will be diminished to the degree :tat would'te passengers of a struck carrier decide to use the facilities of the available non—participants. The effect of non— participants reducing the windfall payments is now, however, Somewhat mitigated by the operation of the supplemental payments amendment. 62 Coverage The amended Pact is currently applicable to virtually every strike situation. Only two strike circumstances would appear not to be covered-—namely: 1. if a carrier member violates the terms of the Railway Labor Act; 2. if union demands are equal to or less than the recommendations of a duly convened Emer— gency Board and the carrier refuses to accept the unionis demand. The supplemental payments concept now assumes that every participant can recoup at least twenty—five per cert of its normal air transport expense for the operations that are shut down during a strike. Should the windfall payment exceed this twenty—five per cent figure, the struck line would receive the additional amount. Hence, whether a struck Pact member should find one or more of his direct competitors——domestic or foreign-~to be non—participants is no longer of paramount importance. Each struck member is guaranteed the standard amount. While those lines that still find several of their direei competitors outside tre Pact may be envious of those carriers that may retoup an amount that exceeds the standard amount, the supplemertal payments provision seems to have ameliorated the complaints on this issue. Currently, there is no inditation of any dissatisfaction by any members on this point. 63 Liabilities On the liability side, the amended Pact does mean that all members assume a financial obligation whenever a fellow member is struck. Such added involvement in each otherls affairs may well be the source of heated controversy in the future between the members. One such instance has already occurred. At the 1963 annual meeting of the stock— holders of United Air Lines, the President of the Corpora- tion voiced strong objections to the operation of the Pact. The Wall Street Journal reported as follows: W. A. Patterson, President of United Air Lines, said he will recommend to Unitedqs directors that the company withdraw from the industry°s mutual aid strike insurance program. Mr. Patterson told the annual meeting that the mutual aid plan had been a big disappointment to United. He noted that an individual line may with» draw from the program on any December 31 providing it serves notice at least 6O days in advance. Aftertfluameeting . . . Mr. Patterson said he didn't object to a mutual aid program in itself- ”But, on the other hand, when you see the tlabor relations) policies of some carriers so opposed to your own, then it‘s timeto take action to protect your interests.H Mr. Patterson added that he had ”seen one or two strikes over issues where United had already peace— fully solved the problem,” and termed the strikes "senseless.” Y 97"United Air Head Opposes Mutual Aid Strike Plan,’ Wall Street Journal (April 26, 1963), p. 8; see also "Patterson Favors U. A. L. Withdrawal from Strike Pact,” Aviation Daily, Vol. 145 (April 29, 1963), p. 371, 6A United had paid the most into the Pact and had yet to collect a single cent. As the date for notification of intent to withdraw approached (i e., November 1, 1963), it became apparent that United had reconsidered its position, Instrumental in this reconsideration, undoubtedly, was the fact that United became a party to a major unresolved dispute with the I. A. M. which, on October 9, 1963, re- sulted in the establishment of a Presidential Emergency Board.98 With respect to the actual degree of financial in- volvement that each carrier assumes in the labor policies of another firm, the counsel for the carriers defended the supplemental payments liability as being a sound business practice. He stated: . . .Now, finally, it should be observed that there is a maximum limitation on each carrier‘s obligation to pay. But in return, it has a very much larger right to receive if need arises. Management can hardly be held irresponsible or unwise for entering into such an agreement any more than it would be held irresponsible for in— curring the expense of convenieng insurance lf a . . . u , great variety of Circumstances.// The "In and Out” Problem Membership in the Pact has been in the past the source of frequent problems. Eastern, Pan American, and United __ .__._.__.___—.. __,__ 98The diSpute was subsequently settled without a strike on December 18, 1963. 99Transcript of Oral Arguments before the Board, C. A. B. Docket No. 9977, pp. 20—21. 65 have at various times threatened to leave the Pact; Continental withdrew only to rejoin three months later; and National pulled out entirely. In order to stabilize the participation in the Pact and to prevent a carrier from joining the Pact when it was advantageous and leaving when it appeared to be detrimental, a section pertinent to this subject was included in the amendments of March, 1962. Withdrawal from the Pact is permitted from year to year as of December 31 with 6O days“3 prior notice. But the withdrawing carrier will remain liable for all payments under the agreement for a period of one year thereafter. As to joining the Pact, six months prior notice is required of any applicant who has not been a member before. As for a carrier who was a member once and who seeks readmit- tance, the carrier can rejoin only by making the net pay- ments that it would have been required to make had it not withdrawn. Comments The approval of the Pact by the C. A. B. will not significantly alter the industrial relations environment in the industry, The true source of the turmoil of the recent years has sprung from a commingling of several forces. The Pact itself assumes importance not as a cause but, rather, as a result of these disruptive factors. The most dominant of these considerations is the presence of 66 multi-unionism and of rival unionism, The perpetuation of such labor market characteristics can only mean that short term contracts and bitter union competition will con- tinue to be the rule. Moreover, multiple unionisn has greatly increased the exposure of the industry to strikes, The more unions in an industry, the greater the number of contracts, negotiations, contract expiration dates, and strike threats. Hence the more likely it is that a strike may be precipitated, The crew complement controversy that has affected many carriers on numerous occasions during the past six years provides an excellent example of this con- tention. Likewise, the uncertainty of the airline unions about the future role that advancing technology is to assume in the industry has in recent years been compounded by the miscalculations by management in general concerning the potential demand for the services of the industry. As a result, the unions have developed a feeling of apprete — sion and distrust of both the decision—making capacity and objectives of management. All—in—all, it has been these institutional barriers to compatibility that have been the true causes of the unrest in the past- It is unlikely that the Pact itself will contribute to an increase in the number of strikes in the industry. The pre—strike importance of the Pact seems to be of minor consequence. The true significance of the Pact will be revealed only after a strike has begun. When shut downs do 67 occur, they will undoubtedly tend to last longer and to generate increased bitterness. The Bureau has contended that it is the supplemental payments feature of the Pact that will cause these undesirable results, Actually, it would seem that both the windfall payments and the supple— mental payments would have similar effects, It is doubt— ful that a deletion of the supplemental payments would materially alter the attitudes of a union facing a strike with a Pact member who must rely solely upon windfall pay— ments. Similarly, whether a strike will be longer as a result of the carrier receiving both supplemental payments and windfall payments would depend entirely upon the par- ticular carrier involved, It may be that the windfall pay— ments could exceed the standard amount in which case the supplemental payments would not even be involved, Converse- ly, it could be that the revenue received by a member carrier-~like Continental——might be entirely made up of supplemental payments, What then is the difference in the outcomes of the two situations? It is not the type of pay- ment that is crucial to the determination of union attitudes on the length of strikes but, rather, the presence of the payments themselves regardless of their derivation that affects such matters. In any event, the acceptance of free collective bargaining as the desired method of resolving industrial diSputes in our nation is premised upon the use of private economic weapons. It is difficult to imagine 68 any type of such weaponry that would not, by definition, have such effects as are inherent in the Pact, The most important justification cited by the Bureau and in the dissenting opinion of Vice Chairman Murphy in their attacks upon the supplemental payments concept centers upon the possibility of a violation of the Railway Labor Act, The violation—-the unilateral estab— lishment of multi—unit bargaining-~is not, however, one of an explicit provision of the Actq Nowhere in the Act is there a mention either in support of or in opposition to multi-unit or industry—wide bargainingo The prohibition stems directly from an administrative interpretation given to the Act by the co A, B 100 The opinion of the c, A0.B; is based upon the allegation that such bargaining could lead to industry-wide shut downs which would violate the public interest section of the Federal Aviation Act which the C, A, B, is directed to prflleui, Such a rngltion does not seem tenablel If both the unions and the uarriers voluntarily agree to bargain on at industry—wide basis, it would be quite legal under the C, A, B,7s interpretation of the Act. How can the Board then claim that it is against the public interest if the parties are indirectly led to industry—wide bargaining, but that it is acceptable if they ‘5 voluntarily agree to such a development The potentiality 1008 c" A, 3, 35a (19A7lu 69 for a shut down of the entire industry is the same in either case. In many respects, industry-wide bargaining might conceivably contribute to industrial peace. Instead of witnessing a multitude of battles over the same issue-— as the pilot—flight engineers controversy--the problems could be resolved once and for all time. It is extremely unlikely that the unions would ever resort to an industry- wide strike. The airline unions are currently in the position of the railroad unions. Both know that a shut down of the entire industry could only lead to immediate federal intervention. While both industries are exempt from the national emergency provisions of the Taft-Hartley Act, the experience of the summer of 1963 in which the looming spectre of a nation—wide rail strike led Congress to paSS the first peace—time compulsory arbitration law should eliminate this device from the arsenal of useful union strike tactics. In many industries, multi-unit bargaining has proven quite successful. In the airline industry, however, its evolution has been virtually stymied. As long as both parties must agree before multi-unit bargaining can be introduced, and then only on an ad hoc basis, many of the aforementioned negative factors that have given rise to the Mutual Aid Pact are going to persist to disrupt indus— trial relations in the industry. 70 With reference to the contention that the supplemen- tal payments provision will encourage Pact members to seek similar solutions to common problems, it is logical to conclude that the Pact does provide impetus for such a development. It does not follow, however, that the Pact itself provides channels that actually make the achievement of common positions more likely to occur than would be possible in the absence of the agreement. There is no way that one or more Pact members can directly in- fluence the labor policies of another carrier except by threatening to withdraw themselves. If the complaining party should actually withdraw, then the issue becomes a moot point. There is one aspect of the supplemental payments pro- vision that should be observed during the three year trial period: in the event of a period of frequent strikes in the industry, marginal firms or firms losing money could find themselves in a difficult financial position. Tf these firms are in the role of paying out any substantial amount in the form of supplemental payments, their solvency could be threatened. It is not desirable labor policy that any provision of the Pact serve to remove a competitor from the industry or, more likely, to return a trunk—line to the direct government subsidy roles. On the other hand, should these same firms be on the receiving end of such payments, the supplemental payments provision could well 71 serve to protect these same firms from otherwise meeting such undesirable fates. Hence, one hopes that the C. A. B. will carefully study the experience under this section. On the positive side, the Pact does have several features that are desirable for a private bargaining sys- tem. Membership is open to all trunk air carriers who possess a certificate of convenience and necessity from the C. A. B. Every facet of the Pact is available for public inspection at the offices of the C. A. B. in Washinge ton. All payments and receipts under the Pact must be re- ported. The operation of the agreement is handled entirely by the carriers themselves. Hence, the Pact does not in— volve any select group who possess arbitrary administrative powers. The C. A. B. always retains the right to intervene at anytime if it should appear that the Fact is adversely affecting the public interest in the air transportation industry. In short, it seems that in this particular industry the Pact is but an outward manifestation of an extremely unstable and insecure labor relations foundation. The public interest could be better served if more attention were directed toward the causes of strikes than at the symptoms of trouble. THE ”SERVICE INTERBUPIION ixsvsthcs POLICY" OF THE RAILROAD iNDUSlFY Introduction ,- Effective as if Septemter ., "_,. é far—reaching program designed to minimize n garti', 'f tie revenue losses during strike periods teeth ":tatlwe on virtu— if? T ally every railroad in the nation r*;vi I: this date, each line had been offereo an Uflluf’.'1‘f ’~ gain. Cur— rently, the participating memters 2 c.»’* for ninety—nine per cent of the freight ton mileu 5‘6 ,m~ e ger miles ’;3 formuilly In (T) g i L «Tl i,— f‘ x I carried by the industry.1 known as the Service Interrnn=i,u I a v flare commoriy. it is calleo simrl; the ruili 'w “ ‘“e ' “. vwxe pie? Beginning in July, lflhh, : strike by . t of Railroad Trainmeh VB. h i -::e. ‘.‘L 4. toe Island Rail Road Company ’1. I = ; "*r+ t 1t« of the insurance pi n, the lite ‘F'ET l . . . , ”Briel on Behnll at 3496 (s. D. n, Y.), {January 1;. 2:4 . . j; r ere are :- 4 _..- .rf / proximately 19C participating llHGJ. . H.J road that is not currently n hemvet i. ‘ _ e“ for Haven, and Hartford Railroan T'i« ji'c n~- tyrged to w' draw from the p.an due to it; cutLC'“ r~:;:: -rutuw 73 twenty—six days that the shutdown lasted. Shortly after— ward, the B. R. T. brought suit against the L. I. R. R. and the Association of American Railroads (A. A. R.) challenging the legality of the insurance plan. The ensuing legal proceedings were of significance to the present study for two essential reasons. First, during the lengthy trial, many of the operational details of the policy became public for the first time. Secondly, the case itself was the initial legal test of the princi— ple of mutual assistance by employers through the use of strike insurance. Hence, the judicial rulings which were rendered by both the original and the appellate courts in upholding the plan established an important precedent. A Brief Background of Industrial Relations in the Industry The outstanding characteristic of the railroad indus- try is undoubtedly the fact that the government has tradi- tionally assumed a major role in virtually all of its affairs. The quasi—public nature of the industry stems from the fact that the federal government is an active force in both the product market and the labor market of the industry. Most operation decisions and rate—setting activities are regulated by the ”oldest and the most power— ful” of the regulatory agencies—~the Interstate Commerce Commission (I. C. C.). For example, the I. C. C. possesses power over decisions concerning rate changes, abandoment of 7A lines, consolidation proposals, security issues, and safety enforcement measures.2 Likewise, labor policies also have long been the subject of federal legislation,3 Currently, the major statutes governing employee relations are the Railway Labor Act, as amended; The Railroad Unemployment Insurance Act; and the Railroad Retirement Act. The latter two laws are counterparts, for railway labor, of the State Unemploy— ment Insurance Acts and the Social Security Act for labor in other industries. The Railway labor Act was discussed in the preceding chapter on the Mutual Aid Pact and, accordingly, the detailed mechanics do not nee. to be repeated here. In short, the amended Act contains guarantees for the right to organize and to bargain collectively, prohibitions a- gainst certain employer unfair labor aCts, and procedures to facilitate the peaceful settlement of disputes over con— tract interpretation and contract changes. The industry itself is certainly far from being com- petifltivc. Yet , iri the liroatl sernse, ~it cloes luave Erlbstgnitial_ competition from the other forms of surface, underground, air, and water transportation. Moreover, the inroads made 2 » . .. . Reed C, Richardson, The LocomOtlve Engineer l863-l963; A Century of Railway Labor Relations and Work Rules (Ann Arbor: Bureau of Industrial Relations, 1963), p. 33. 3For a description of the evolution of federal inter- vention into railroad labor relations, see ibid., Chapter xv; see also Jacob J. Kaufman, Collective Bargaining in the Rail— road Industry (New York: King‘s Crown Press, lQBM), Ch. V. 75 by these other modes of transportation have been increasing annually}l Labor costs are very high in the industry—- accounting for over half of the total operating expenses on the average line.5 Thus, alterations in the level of wages have a major effect upon the industry cost structure. The fact that the control over rates rests with the I. C. C. has meant that wage increases ”have had certain serious short-run financial consequences,"6 For if new rates are approved by the I. C. C., they are usually granted only after long, drawn—out proceedings but they are not retro- active. In addition, in some instances competitive condi— tions have not allowed the lines to increase their rates to the maximum allowed by the I. C. C.7 The interaction of all of these forces has been summed up by the leading writer on the subject as follows: Thus, the financial and competitive conditions of the railroads and the rate—making procedures of the Interstate Commerce Commission seriously affect the collective bargaining relationships between the carriers and their employees and explain, in part, the recurring strikes and t’e breakdown of collective bargaining in the industry. Management, in turn, has sought to find alternative methods of rescuing their respective lines from the economic A Kaufman, op. cit., pp. 7—9. 5Ibid., p. 10. 6Ibid. 7Ibid., pp. ld—ll. 8Ibid., p. 15. (see, infra, footnote 22 for a comment on more recent financial developments.) 76 quagmire of the past few decades. The two most prominent policies have been the consolidation of competing lines and the introduction of advanced technology. Both of these tactics have become the frequent subject of conflict between management and labor.9 Besides the problems emanating from the product market, the bargaining structure of the industry has also proved to be breeding ground of unrest. There are over fifty differ— ent craft unions that represent about 725,000 railroad workers.10 Most of the unions are quite small with the majority of the members being concentrated in twenty-three national labor unions. Of these twenty—three, five are known as the operating unions and the remainder are the major non—operating unions. Approximately twenty—five per cent of the unionized employees in the industry are in the operating brotherhoods. Typically the operating brother- hoods bargain as individual crafts while the non—operating unions tend to bargain on a federated basis. Besides the characteristic of multiple unionsm, there is also the element of rival unionism. In quite a number of instances, there are several unions competing for 9lbid., pp. lB-lT 10For a listing of the unions in the industry and the lines with which each bargains, see t 3 Twenty—ninth Annual Report of the National Medi tLJr Board (Washington: U. S. Government Printing Oilfice,1963), pp. 89—93. )— 77 the same members.11 The overlapping of jurisdictions has been especially true of the Brotherhood of Railway Trainmen which frequently competes with the ConductorsY Union and the Switchmen’s Union. Similarly, numerous conflicts have arisen in the past between the Brotherhood of Locomotive Engineers and the Brotherhood of Locomotive Firemen and aninemen. The disrupting effects upon industrial relations caused by the presence of multiple and rival unionism have only served to intensify the traditional militancy of the operating crafts. This militancy has developed due to ”the historical background of wage cuts in depressions, court injunctions, the use of militia in strikes, the use of vio— lence, and the hostility of management toward the workers.”12 Moreover, as was true in the airline industry, the highly fragmented bargaining structure of the railroad industry has greatly increased its exposure to strikes. The larger the number of unions, the more numerous are the contracts, negotiations, and strike threats. Multiple unionism has contributed instability and unrest to the development of collective bargaining in the railroad industry. In recent years, divisive forces have tended to in— crease. Falling employment figures in the industry have llIbid.; see also Kaufman, op. cit , pp. 46-S7n ngaufman, op. cit., p. A6. 78 meant declining union rosters, Consequently, the loss of members has weakened some of the unions and has meant in— creased rivalry between the unions for the workers who remain, Moreover, the problems associated with declining membership have led to many disputes over seniority, vacancy replacements, promotions, and pension rights, The net result of all of these internal and external sources of conflict has been that allattempts in the past to achieve complete or partial industrial unionism or even effective joint bargaining in the industry have failed,13 A final consideration concerns the actual impact of a strike upon management, Virtually all passenger service and much of the freight service carried by the railroads is not postponable, If the service cannot be provided at a prescribed time, then the business is lost entirely to other forms of transportation or through cancelled plans, Con- sequently, the industry is one of those in which the strike remains a potent weapon, The Establishment of the Service Interruption Policy _antributing Events The railroad industry has stated that the immediate cause giving rise to the development of the strike insurance ljlgido, pp, 47 and 52, 7 9 proposal was the alleged change in strike tactics employed . . . 1A 1. , . _ . by the railroad unions. Prior to l932, industry-Wide bargaining had occurred only intermittently, In 1932, eighteen unions, including most of the major ones, joined together and accepted a lu per cent wage reduction in - . . . m. . , . . . 1h order to aid the iinancially hard pressed railroadsi ’ Since then, bargaining at the national level has tended to be the standard. Accordingly, in the immediate post war period between lgflh-l950, rhere was one actual and 1 / three threatened industry-wide strikes. in virtually every instance, the striking uniwh was seeking to secure a se-tlement in excess of the recommendations offered by Presidential Emergency Baards, The avcidan e of or the ending of the strikes which either did or threatened to shut down the entire railroad industry was achieved only after federal intervention through :he use of injunctions, seizure, and ar special legislatiwr, As a result, the railroads have contended that “beginning in 1950, there was a shift in the tactics of railroai lac r away from the national strike to the selective or vrihsaw strike against l”Brief an Behalf »f the Defendant Railroads,” Fivil Action No. oC—BUQh (S. E, h. i l rMarrh lh, lghfl), pp, 59~h7 l/hichardson, Op. vll., pp“ Hal-Ut’, is}, gaufman, ins, cit , :qi. on— P (L \}’ 80 ”l7 The railroads have also one or a few of the railroads. pointed to the fact that the strikes since 1950 have been characterized by union attempts to secure terms that ex— ceeded the recommendations given by Presidential Emergency Boards. It is apparent that the shift in union strike tactics has occurred as a result of increasing awareness by union leaders of the shortcomings of nation—wide strikes. Mr. H. E. Gilbert, President of the Brotherhood of Locomo- tive Firemen and Enginemen, was quoted in 1960 as saying: There is no use kidding ourselves, If we tried that [i,e,, a nation—wide.stri5e] we’d get en— joined by a court in no time. With respect to the whipsaw charge, the unions have responded by saying that they have only been seeking the objective of "individual bargaining rather than industry—wide bar— gaining.”20 As for the practice of striking to attain benefits over and above those recommended by the government boards, l7”Brief. . .of Defendant Railroads,H op. cit., p. 62. 18lbid., pp. 62—63; The Union parties acknowledged this fact in their brief, ”Brief . . . Plaintiffs,” op. cit., p. A5, with the statement that ” the recommendations of the Emergency Boards have been generally unacceptable to labor in recent years.H lgWilliam B. Clabby, HUnions Harden Stand, Say Public Snubs Roads ’featherbed’ Attacks,” Wall Street Journal {March 17, 1960), p. 14. 0 ”Brief. , .Plaintiffs,” op. cit., p. a, 81 the unions have responded by stating that management has seemed to believe that labor should "invariably accept the findings of Presidentially—appointed-Emergency Boards." Thus, they have replied that there is nothing illegal or shameful about a decision ”to embark upon a legal strike in order to seek demands contrary to the recommendations of an Emergency Board.H21 While the interjection of the selective strike as a bargaining tactic and the continuation of the trend of the unions to seek settlement terms above those recommended by the reSpective government boards were important insti— gating considerations, the interest of the industry in a mutual assistance agreement was also aroused by other fac— tors, The year 1959 marked the beginning of the attempt by the railroads to institute their revised work rule plans. The railroads undoubtedly felt that the likelihood of strikes would be increased. Also, during this period, the industry claimed it was in a precarious financial position. In 1959 the average railroad was returning only 2.72% on invested capital.22 Therefore, many lines were not in a position to sustain any prolonged strike and were quite vulnerable to the use of a whipsaw strike pattern. 2llbid., p. 2. 25”Brief . . . Defendant Railroads,” op. cit., p. 63. The average figure of 2.72% return on invested ca ital is misleading. The financial positions of the respective lines 82 The railroads were also doubtful that the practice of government seizure in the late forties could be relied upon in the future. The tactic of peacetime seizures of the facilities of private industry had been struck down in a Supreme Court decision in 1952 (Youngstown Sheet and Tube Co. v. Sawyer).23 And lastly, the railroads sought a countervailing strike subsidy to the devices that were, in the event of a strike, used by the railroad unions to reduce the economic effects of income losses, Most of the unions had formal strike benefit funds that were collected nationally from all of the union membership and were payable in the industry vary widely. In 1959, for example, Fortune (see "The Fortune Directory II,” Fortune, August, 1959, p. 129) reported the following with respect to the rates of return sustained by the thirty-three largest lines for 1959: Rate of Return on Number of Firms New Invested Capital In Category Twice Average (over 5.A%) 9 Between 2.72% and 5.A% 11 Overall Average (2.72%) 0 Between C and 2.72% 9 Negative Return on Capital A Interestingly, however, twelve railroads are listed in Table 3 (infra p. 97) as having received payments under the program. Of the twelve, seven were among the thirty— three firms included in the Fortune survey, All seven Of these lines returned less than—the 2.72% on net in— vested capital 23343 U. S. 579 (1952); see also Kaufman, op. cit., pp, 131-133. 83 to the particular members on strike. Also, under the pro— visions of the Railroad Unemployment Insurance Act of 1938, strikers who have complied with all of the terms of the Railway Labor Act and with the constitution and bylaws of their union are entitled as of their first day of unemploy— ment to receive unemployment compensation benefits for up to 130 days.24 It was these events which, combined with the long history of unstable labor relations conditions, fostered the Service Interruption Policy. Specific Origins In a May, 1959, edition of the industry trade publi- cation, Railway Age, the following statement appeared: Lawyers from the A. A. R. and member roads are in— vestigating several plans for joint action if this fall's negotiations result in a strike against a single road. This was confirmed at a recent New York City press conference by A. A. R. President Daniel Loomis . . . Mr. Loomis pointed out that strike insurance and revenue sharing plans had been considered in the face of strike threats in the past, but that eventsggad not made it necessary to put them into effect. Indeed, as early as March, 1958, the Board of Directors of the A. A. R. requested their General Counsel, Gregory 8. Prince, to begin consideration of a feasible plan for mutual 24Both national strike benefit programs and unemploy— ment compensation during strikes will be discussed in Part II of the present study. 25"Strike Pact?" Railway Age, Vol» 146, No. 20 (May 18’ 1959), p. 70. 8A assistance.26 Accordingly, a committee of industry lawyers and insurance law specialists began to prepare a proposal. The determination of the insurer was accomplished as follows: After drafting the policy, counsel for A. A. R. met with Mr. Edward S. Hogg, a senior partner in the London insurance brokerage firm of Hogg, Robinson, and Capel-Cure, in May 1959 and Mr. Hogg recommended that the policy be written by Imperial Insurance Company, Ltd an insurance company that had previously been formed by gr. Hogg and his associates in Nassau, Bahamas Shortly thereafter on July 1, 1959, application for partici— pation in the insurance program were sent by the A. A. R. to ”every railroad in the United States." Accompanying the applications was a letter from the A. A. R. which sought to explain the procedures, costs, and administration of the proposal. The deadline for returning the applica— tions was August 15, 1959. Under the terms of the original policy, a minimum participation figure was established before the plan could become operative. The requirement was that member rail- roads must account in total for at least sixty—five per cent of the gross operating revenues of all railroads oper- ating within the United States (excluding Alaska and Hawaii) ”Brief . . . Plaintiffs,“ op. cit., p. 2, 27”Brief . . . of Defendant Railroads,H 2£L_£2£n: p. 12. 85 for the preceding year.28 During 1958, the railroads grossed $9.5 billion. Accordingly, the requirement meant that participants whose individual revenues aggregated to $6.2 billion in 1958 would be necessary to make the plan operational. This total could have been achieved if only the seventeen largest of the 113 Class I railroads in the nation had agreed to join.29 Concerning the like— lihood of reaching the required participation figure, one rail executive——before the outcome of the application requests was made public——was quoted as follows: . . . the plan has almost unanimous support from the industry. Even so thereYs the hidden per— suader that if some roads refuse to join, the word would leak ut and they would be wide open to union attack.38 In actuality, the response to the program was such that it was ”overwhelmingly accepted” by "practically the entire ”31 industry. Mr. Prince stated: 28"Service Interruption Policy ‘ issued by Imperial Insurance Company, Limited, Article X (original policy of 1959). In the revised version of 19 2, the figure for re- newa was lowered to 50% of the gross operating revenue of the industry for the preceding calendar year prior to the anniversary date of the policy. If this participation fig- ure is not attained, the insurance will cease automatically on the expiration date. 29William B. Clabby and Daniel R. Jones, ”Railroads Devise Plan to Hedge Their Risks If Unions Walk Out," Wall Street Journal (July 13, 1959), p. 12. A Class I railroad is one that has a gross operating revenue of more than $1,000,000 per year. 3OIbid., p. 1. 31Press Release by the Association of American Rail~ roads, Washington, D. C. (August 17, 1959). [Mimeographed material.) 86 We were not sure when we started out that we could get industrywide acceptance for such insurance. I can tell you, however, the 65% acceptance re— quired to go ahead with the plan wa§2well exceeded. We got almost unanimous acceptance. On August 24, 1959, the administrative officials of the program——known as the Advisory Committee——and their counsel met with the officials of the Imperial Insurance Company, Ltd., in Nassau. The Advisory Committee had reviewed and approved the individual application forms. As a result of this meeting, the Service Interruption Policy was officially adopted—~and inaugurated into ser- vice. The plan became effective September 1, 1959, for an initial three year period. The Conceptual Provisions of the Policy Administration The Service Interruption Policy is administered by a three—man Advisory Committee. Each member of the Committee is the chairman of one of the three regional bodies that form the organizational structure of the A. A. R. Specifi— cally, these men are the respective chairmen of the Eastern Railroad President s Conference, the Association of Western Railways, and the Association of Southeastern Railroads. 32Wilbur J. Brons, HRails Strike Insurance lTailor V I'- - MadeY ' The Journal of Commerce {November 5, 1959), p. 10. ) .. 87 The Advisory Committee has a position of importance in the insurance plan. Initially, the Committee must review the applications of all the railroads that seek to join the plan and certify that the submitted valuation of fixed costs that each respective railroad must bear in the event of a strike is a reasonable estimate. In the event of a strike, the Committee is required to make a determination as to whether or not the strike is a covered strike within the terms of the policy. Without an affir— mative determination, a participating line is ineligible for benefits. Should there be only a partial shutdown of service or a line, the Committee must both determine if the strike is covered and approve the amount of benefits to be received under the agreement. The Committee could alter the amount requested by a partially shutdown line if it would deem the request to be excessive. Coverage Under the terms of the policy, a railroad has an 33 indemnifiable ”work stoppage" when: 1. The strike is: Contrary to the provisions of the Railway Labor Act, or Is to enforce demands contrary to the recommendations of an Emergency Board ap~ pointed by the President of the United States, pursuant to the Railway Labor Act, or Q”; 9 CT 33”Service Interruption Policy,” op. cit , Article III (1962 version). 88 c. Is in resistance to the application of recommendations of such Emergency Boards, or 2. Where demands or proposals: a. Are directed or may then or thereafter affect, or b. Are made by insured railroads representing more than 50% of the aggregate of insured railroads‘ Daily Indemnities and such an Emergency Board has not been appointed or, if appointed has failed to make definite findings or recommendations on the merits thereof. If the Advisory Committee rules that the strike is covered, the struck carrier is entitled--in the event Of a total shutdown—-to an amount equal to the total fixed costs per day multiplied by the number of days that the strike continues. The maximum number of days that benefits would be forthcoming in any single dispute is limited to 365 days. The daily total fixed costs——called the daily indemnity——consists of the applicant‘s sum total dollar valuation of the daily cost of each of the following nine itemsz3u 1. Ad valorem and other taxes on carrier pr0perty not based on revenues or income. 2 Fixed interest on debt less the part apportion— able to non-carrier property. Mandatory payment to sinking funds provided for in mortgages on the applicants‘ carrier property. LO LL” - . . ; I . . 3' Application for Serv1ce Interruption Policy," Section 3, (a)—(i). Printed form associated with the Service Interruption Insurance Policy. 89 4. Interest or dividends on equipment trust certificates or conditional sales agreements. 5. Payments on the principal of equipment trust certificates or conditional sales agreements, or under leases or trackage agreements covering property used by the applicant in the carrier operations. 6. Insurance on carrier property or operations exclusive of this insurance. 7. Pension and payments into pension funds. 8. Contractual or iixeo obligations incurred in connection with l s operations. erVisory, official, and other in its opinion to preserve er properties in a standby e for resumption of services uspension of operations. 9. ffixaicost o forces nec applicants -(Di—b co condition suita at the end of a 1 In the case of a partial shutdown of service, the policy is Operational.35 The struck railroad is required to submit sufficient information con crning the strike to the Advisory Committee to enable it to determine if the strike is covered by the policy and the amount of benefits that it is entitled to receive. The Advisory Committee then notifies the insurance company of the amount it should pay to the struck line, The benefit procedure is then the sanms as iii Ltflfiil ;fiiutthmmns. Beneifijz Paynmiux; {V1 (”‘1 1‘ g z'. »“ I' l -. a" ,At - 3 ~ ~ V—. 4- .If.‘ - ‘- —. - , - 1. ,»\ A il‘.‘ ,1 - r .3 5 1 ~‘ x“ Ev /\ - ‘n: j" . A '- ihe stiuck udlllcl nur;.-uitiiy -he ru i uiy Commi-tet for each day that it seeks coverage. {he c;mmittee, if it 1a . .. - - = " J/SerVice lininnmiption Policyg an). JlL., Article if (b). 90 approves the request for coverage, then will notify the Imperial Insurance Company to pay the prescribed daily indemnity to the struck railroad. The payment by the in— surance company directly to the struck railroad must be made within twenty—one days after the receipt of the ap— proval notice. The entire procedure is repeated separately for each day that a covered strike continues. Premimum Payments Each participating railraod assumes an obligation for three different types of premiums when it subscribes to the insurance plan. The first is known as the minimum premium and is payable annually. The total of the minimum premiums paid by a_l of the participating members comes to $150,000.00 a year. It is paid to the insurance company for the purpose .1 of covering the expenses involved in the administration of {L the program. The amount paid by each railroad is base upon the ratio that the daily indemnity figure of each line 1‘ 0all7 indeunjiits of al './ }__J bears to the Iota cipating lines. Given the ftlloming fictitious numerical figures, the minimum premium would be computed thusly: total daily indemnity of own railroad $50,000 0wn ratio 2 : Total Daily Indemnities of All Participating Railroads $g,ooo,ooo l00 91 Therefore, the minimum premium for the fictitious railroad whose own daily indemnity is one—hundreth of the total daily indemnities of all participating railroads would be: own ratio x Total Minimum Premium 2 l X $1503000 2 $1,500. 100 l The second premium is paid only once-—namely, when the particular railroad joins the insurance agreement. This premium can be called an ”escrow premium” since it is, in fact, an amount that is placed in an escrow account. The purpose of this premium is to provide an emergency fund for the insurance company to be used only in the event that benefits are due to a struck line and the assessed third type of premium has not yet been received from a non—struck participant. In such an event, the assessed amount is de— ducted from the escrow premium. The escrow premium is equal to the daily indemnity of each subscribing railroad for one day. In terms of the aforementioned fictitious example, the railroad would have been required to deposit $50,000 in the escrow account before its own insurance would take ef— fect. Similarly, in the example, the total daily indemni— ties of all of the participants came to $5,000,000 which would also be the total sum of all the escrow premiums. Parenthetically, with regard to the escrow premium each participant receives four per cent annual interest on its deposit. In the event that the railroad should decide not to renew its policy, the entire principal and accumulated interest are refunded. 92 The third premium——called the additional premium—-is by far the most significant. After the Advisory Committee determines that a struck railroad is entitled to benefits, the insurance company obtains the funds to pay the benefit‘s by billing the non—struck members. The amount that each railroad is charged is equal to its prorated share of the daily indemnity due the struck railroad. This amount is the additional premium. In the example used above, the company whose own ratio is one—hundredthcfi‘the total indem— nity of all the participants would be required to pay one—hundredth<finthe daily indemnity of the struck line. Thus, if the daily indemnity of a struck carrier was equal to $75,000 per day, the fictitious railroad would be billed $750 per day as an additional premium for the duration of the strike against the other line. The $750 was obtained as follows: own ratio X daily indemnity of I 1 X $7g OOO : $750 struck railroad .——— -—2————— 100 l The additional premium that any one railroad must pay in a given year is subject to one of two limitations——which— ever occurs earlier. The first restraint is that the maximum number of days that benefits can be received by a struck carrier in any single work stoppage——or paid by the other policy holders-~is 365 days. The second restraint is that the maximum liability of any single participant for minimum and additional premiums is set at twenty times the daily 93 indemnity of each member.36 Accordingly, in the fictitious example the maximum liability that a railroad whose own daily indemnity is $50,000 per day would be either: daily indemnity of x 365 = total liability (l) own ratio X struck railroad under restraint #1 (2) own daily X 20 = total liability indemnity under restraint #2 $50,000 x 20 = $1,000,000 The additional premium, when viewed as an absolute sum, could prove to be an expensive liability.37 While it appears ini- tially that the magnitude of the assumed liability might be a hindrance to membership in the plan, the reverse side of the coin should be examined before a judgment is passed. The total amount of benefits that a railroad would be en— titled to receive--in terms of the fictitious example-—if it sustained a covered strike would be: own daily indemnity x 365 2 $50,000 x 365 : $l8,250,000 Thus, in this instance, a participating railroad would ac— cept a $1 million annual liability in exchange for an eligi- bility claim of over $18 million in the event of a strike. 36lbid., Article v (a). 37It should be noted that a struck railroad which is receiving benefits does not pay additional premiums during the period of the shutdowns [see ibid., Article J (a)]. 9A The absolute value of the amount of funds that the Service Interruption Policy could marshal can also be obtained from the figures as shown below: Total Daily Indemnities x 20 : Total Funds Available in of all Insured Railroads Any One Year To recapitulate briefly, the procedure that takes place in the event of a strike is as follows: after the Advisory Committee notifies the insurance CXNMNHUfthat an indemnifi— able dispute has occurred, the insurance company has twenty— one days to make its payment to the struck line. The insur— ance company, in the meantime, takes the total daily indem— nity of the struck railroad and divides it into separate bills based upon the ratio that each individual non—struck line bears to the total of all daily indemnities. The ad- ditional premium is then determined by multiplying the ratio of each non—struck line times the daily indemnity of the struck line. The insurance company computes the additional premium figures and bills each non-struck member. This pro— cess must be completed within two days after the approval notice is received from the Advisory Committee. Payment of the additional premium is due within fourteen days after the premium request is sent. In the event that payment is not received within this period, the insurance company may deduct the additional premium from the escrow account of the 95 line that failed to make its payment. The entire process is repeated for each day that the strike lasts.38 Nullifying Conditions The occurrence of either of two situations renders the entire insurance plan void in a particular dispute. One is that if the government should seize a struck line, no benefits are due the struck company.39 The second nullify— ing circumstance is if several railroads whose combined daily indemnities exceed fifty per cent of the total daily indemnities of all participating lines are struck.MO In this instance, as in the former. no benefits will be paid to any of the struck railroads. The theory in the second situation is that in any situation in which such a large number of railroads are shutdown, federal intervention seems certain.41 38The discussion in this paragraph is drawn from materi— al contained in ibid., Article V (b), (c), and (d). 39Ibid., Article VI (1)2 ll OIbid., Article VI (a). MlSee HRailroad Strike Insurance Plan Explained to Buyers at A. M. A. Meet,” The National Underwriter (November 13, 1959), p. 1; The same view was expressed by Mr. Stanfield Johnson, Chariman of the Association of Southeastern Railroads and a member of the Advisory Committee in a personal interview in Washington, D.C. (June 11, 1963); see also Clabby and Jones, op. cit., pp. 1 and 12. 96 The Actual Operation of the Policy Having reviewed the provisions of the Service Inter- ruption Policy, attention in section will be focused upon the implementation of the program. In Table 3 a partial listing--containing all disputes for which information is available—-is presented of the strikes in which the insurance plan has been involved. Aside from the strike against the Alton and Southern, all of the major disputes in which the plan has been operational are listed. In addition, five minor strikes were covered in the first four years that the insurance plan has been effective.“2 Thus, strike insurance was involved in a total of ten disputes between September 1, 1959 and October 1, 1963. The total of the daily indemnities of the approxi— mately 190 participating railroads was recently stated to be $5,842.242.72.43 From this figure, as alluded to earlier. the total amount of funds that conceivably could be raised under the terms of the policy can be obtained. Each partic— pant can be assessed a maximum of twenty times its individual 42Telephone conversation with Mr. Stanfield Johnson, October 1, 1963. Details on these strikes were not available. 43”Brief on Behalf of Plaintff—Appellants,” Before the Second Circuit Court, Docket No. 27989 (March l4, 1963), p. 3; also, Mr. Johnson in the interview of June 11, 1963, estimated the total daily indemnity figure to be ”approxi~ mately six million dollars.H H>wbm w.nuwmsaHmH bwmawsm ow wm%3obam wdo5®.w©:@opa.mw pods oosoeoao aeoo.ooo.oo aw.ooo.ooo.oo woosmwwmmoowmawos ow mocasommaows mmwwdomom. 2mmjwomaos U. 0.. mcSo PH. mew. G wmwwoomg ZdeSo moodos oocsoww. eso masHXm Hb—~j r_‘. —~' UN, l—< x, ‘ ‘ \_ ,_.4 }_J 211 F. Supp A91 108 Circuit. The union position was essentially identical to the arguments it had presented to the lower court. In ad— dition, however, the union claimed that Judge Ryan had erred in interpreting the Clayton Act and the Norris-La Guardia Act as specifically legalizing employer strike insurance. In opposition to that ruling, the union claimed that the relevant sections of the two Acts actually ”mean only that strike insurance payments or benefits to employees /o no) The position expressed by the rail— are to be protected. roads in their brief was essentially the same as in the original case. Ut) The Court of Appeals decided the case on June 14, 196 With Judge Irving P. Kaufman writing the opinion, the three- man panel unaminously affirmed the decision of the lower court]O Concerning the provisions OI the Railway Labor Act, The Court ruled: . . . the strike insurance plan, far fjom constituting a violation of the railroads' duty to bargain in good faith, was an instrument of self-help properly employed in the process of COilECLI/fi o3rgairing.lL 69”Brief . . . Plaintiffs—/ppcllants,“ mo tit., p ,2. sec also pp. 25—32 [Emphasis supplied j 70W. P. Kennedy v. hc lorg Islam) Rail F>ad Compan/ r . 319 F. 2nd 366'(2d Cir. 1965). 7lIbid., p. 371. 109 The alleged violations of the Sherman Act and the Interstate Commerce Act were quickly rejected as being completely in- applicable to the labor market; the former due to Section 6 of the Clayton Act 72 and the latter because the intent of the anti-pooling section was ”an expression of transporta— tion policy solely, and not of labor policy.”73 After labeling the union position Hwholly without merit,”74 the Court of Appeals decided £9£,t0 rule upon the important question concerning the specific legality of the plan under the existing labor statutes.75 Thus, the lower court ruling remained the final word on this major issue. The Decision of the U0 S. Supreme Court The B. R. T. thereupon appealed the verdicts of the lower courts to the United States Supreme Court, only to lose again. In the union’s p“tition, interestingly, the claim that the strike insurance fflfifll‘FiolatEC the terms of 72Ibid., p. 373. 4‘; 73Ibid., p. l ,, 7L1bid., p. S66, 751bid., p. jfu 110 the Railway Labor Act was dropped. The plea for reversal was based upon alleged violations of the Sherman Act and the Interstate Commerce Act.76 On October 14, 1963, the litigation came to an end when the Supreme Court denied the request for review.77 Comments The evolution of the Service interruption Policy pro- vides an example of the develapment of countervailing finan— cial power in collective bargainiig negotiations. In the decisions of the District Court and the Court of Appeals, the point was emphasized that in the strike against the L. I. R. R. both sides were heavily insulated against economic losses]8 While the L l. R. R. received $1,300,000 oo in insurance benefits, the 1,350 B. R T. strikers received $158,121.5A in strice benefits from the national union and $221,51A l; in unemployment benefits under the provisions of the Railroad Unemployment lnsurarqa .Act. In additicm1, $721,500 C?,i31.mu%tploymett tenefits 76"Peti tion lkn? a Writ; of Cerujmarari in) the Inuited Sta es Court of Appeals for In: Bruszo Ciruuit,' LNU“W in the Supreme Court of the U if‘v ~, '\I x, 1. j ' , IN ill :3 Lil’s) : : l {)5- l l l a 115 by existing provisions of the Clayton Act and the Norris— LaGuardia Act, the issue has not been completely resolved. While the District Court concluded that it was protected, the Court of Appeals refrained from ruling on this point. Consequently, the significance of this section of the deci— sion is weakened as a future citation in any other legal attacks upon the principle of strike insurance. It appears to this writer that the District Court interpreted the word ”insurance” as it appears in the Norris-LaGuardia Act in the broadest possible manner. For in examining the actual oper— ational provisions of the plan, it is impossible to find any element of commercial risk.79 The insurer can not lose a single cent. All benefits are paid by assessing the non— struck lines. The insurer actually is paid solely to per- form the administrative task of acting as an intermediary transfer agent. Moreover, "insurance” in its more standard usage implies an event which is shrouded with a degree of uncertainty. For the Service Interruption Policy to qualify as a true form of insurance would imply that management is absolutely helpless and has no control over the process of collective bargaining. It is doubtful that this is the case. 79See ”Railroad Strike Insurance Plan Explained to Buyers at A. M. A. Meet,” The National Underwriter (Novermber 13, 1959), p. l for a discussion of this point which concurs with my own conclusion. 116 A railroad company always has the alternatives of accepting the complete demands of a union or, more likely, of hag— gling, within a certain range without fear of a strike. This partial control over the outcome certainly poses doubt about the pure insurance aspects of the plan. While the terms Service Interruption Policy and strike insurance are used interchangeably, it is questionable whether or not they are synonymous. Nevertheless, the fact remains that the issue as to whether or not strike insurance is specifically protected by the Clayton Act and the Norris—LaGuardia Act is really only an academic question. The courts have authoritatively determined that the Interstate Commerce Act, the Railway Labor Act, and the Sherman Act do not prohibit the in— dustry’s strike insurance plan. The railroads may do what the law does not prohibit them from doing; the industry does not need a law saying that they may have strike insurance. CHAPTER III THE "SUSPENSION INSURANCE" PROGRAM IN NEWSPAPER PUBLISHING Introduction Unlike the public revelations of the details of the parallel strike subsidy programs in the airline and rail— road industries, the strike insurance plan in the newspaper publishing business--commonly referred to as ”suspension insurance”——nas not been the subject of a detailed public investigation. While many details of the program-eobtained through a variety of channels—~have become public informa— tion, management itself regards the program as being strictly a confidential matter. One business publication has commented as follows on its attempt to secure informa— tion directly from the publishers association: Officials connected with the fund [i.e., the News— paper Publishers Premium Fundl refuse to discuss it on the ground that the insurance is a private matter between the newspapers and the insurance carrier. My efforts to obtain information directly from the pub— lishers association met a similar response. l”Teamwork Cuts Strike Losses,” Nation's Business (July, 1960), p. 78. In a confidential interview with a representative of the American Newspaper Publishers Association, the main reason cited by the official for their preference for’secrecy 117 118 A Brief Review of Industrial Relations in the Industry In the daily newspaper publishing business, collective bargaining has long been the prevailing method for resolving issues concerning labor management relations. Indeed, the International Typographical Union (I. T. U.), founded in 1852, is today the oldest national union in the country. Until 1889, all of the printing trades were included within the ranks of I. T. U. With industry expansion and the growth of specialization associated with the introduction of new processes, several crafts split away and established their own unions. Currently, there are four major craft divisions in the industry. These are the typographers, the pressmen, the photoengravers, and the stereotypers and electrotypers. In addition to these specialized crafts, there are also the - mailers who handle the bundling and wrapping of the news— papers and the teamsters who distribute them. Of the esti— mated 160,000 production workers presently employed in the industry, about ninety per cent belong to unions. As for the non—production workers, the establishment of the American Newspaper Guild (A. N. G.) in 1933 was one of the earliest successful organizing campaigns of white collar workers in about virtually every facet of the agreement was that the association adheres to a philosophy that the less the unions - know about employer bargaining tactics the better the em— ployers like it. I was denied permission to quote him directly or to cite his name. 119 the nation. Over half of the editorial department employees and approximately a quarter of the commercial department employees in the industry are represented by A. N. G. In 1959 A. N. G. had 30,000 members. Thus, as in the railroads and airlines, a high degree of organization and multiple unionism are important characteristics of the industrial relations environment.3 As was true of those industries, the presence of multiple unionism greatly increases the exposure of the industry to strikes. The multiplicity of negotiation sessions, contract expiration dates, jurisdictional con— flicts, and strike threats is a constant threat to stable industrial relations practices. An actual strike by any one of the unions can shut down the entire operation. Production wages (which excludes editorial commercial department employees) account for approximately twenty—five per cent of total production costs, Production wages, how— ever, are about half of the total wage bill for all employees in the industry.4 When all costs are considered, the indus— try produces continually in the range of decreasing average 3Aside from the references to current figures, much of the descriptive material of this paragraph is drawn from Robert K. Burns, ”Daily Newspapers,” How Collective Bargaining Works (New York: The Twentieth Century Fund, 19 2 , pp. 39— 0 and 108—111. 41bid., pp. 35—36. 120 costs.5 Increased circulation does not affect the man—hour requirements for typographers, photoengravers, and stereo— typers. As for the pressmen, mailers, and teamsters, in— creased production actually tends to reduce man—hour requirements because greater economies in equipment and technique can be introduced as the scale of production is enlarged.6 Production under conditions of decreasing unit costs is, by definition, inconsistent with the survival of compe— titive conditions. Since most cities currently have at least one daily newspaper, the only route by which increased economies can be achieved——aside from simply growing with the rate of area population increase——is through consolida— tion. Consequently, competition in the product market has been rapidly dwindling. From its apogee of 2,461 dailies in 1916,7 the number has fallen to 1,761 in 1961.8 More— over 95.7 per cent of the American cities that had a daily 51bid., p. 36; see also Theodore J. Kreps, ”The News— paper Industry,” The Structure of American Industry (third edition), (ed.) Walter Adams (New York: The MacMillan Com— pany, 1961). pp. 515—516. 6For a discussion of the technological advances that larger circulation makes possible, see American Newspaper Publishers Association, Newspapers 1963, A Presentation to the Antitrust Subcommittee of theHouse Judiciary Committee, 1963 (Washington, D. 0., 1963), pp. 351—374. 7Burns, op. cit., p. 33. 8A. N. P. A. op. cit., p. 145. 121 newspaper in 1958 were one publisher towns.9 The consolida— tion trend has had a double edged effect upon collective bargaining. 0n the one hand, it has meant a stronger finan- cial structure for the surviving firms which allows for a more secure bargaining atmosphere. 0n the other hand, the decrease in the number of firms has reduced employment op— portunities in many areas which has aroused apprehension in many union quarters. The respective international unions in the industry have historically assumed a supervisory role over the nego— tiation powers of their member locals. Besides requiring approval of final contract terms negotiated by locals and approval of a strike before benefits can be paid from the national treasury, the internationals typically specify minimum conditions that must be met in all local agreements; require that the demands to be offered by the local to employers be approved by the international prior to actually being submitted; and guarantee and underwrite the enforce— ment of contract terms.10 Publishers vary as to the negotiation method employed. In the larger cities, bargaining is generally conducted through a local association of publishers. Typically, the 9Kreps, op. cit., p. 510. 10Most of the information cited in this paragraph is drawm from Burns, op. cit., pp. 42—43. 122 local association will employ a full—time labor expert who actually bargains with the respective unions. The local expert is always able to draw upon any information and resources available from the industry trade association—— the American Newspaper Publishers Association (A. N. P. A.). Outside the larger cities, the publishers often form state or regional publisher associations. The role assumed by these regional aSSOciations in bargaining matters differs widely. While often supplying statistical information and employing a labor relations expert to advise the members, these regional associations do not negotiate contracts for all of their participants as do their city counterparts. Hence, some newspapers bargain and sign contracts on a regional basis while others do so on an individual basis. A. N. P. A. membership in 1963 consisted of 873 daily news— papers which accounted for better than ninety per cent of the daily and Sunday newspaper circulation of the nation.11 The main function of the A. N. P. A. in the labor relations area is to gather, organize, and disseminate industrial relations information to its members.12 In recent years collective bargaining has been hampered by several developments. Despite the financial strengthening 11A. N. P. A. op, cit., p. 3; also, see footnote 2. 12Most of the information in this paragraph is drawn from Burns, op. cit., pp. 43—47. 123 that has occurred due to consolidation, the rise of com— peting news media for advertising dollars had adversely affected the revenue figures of many of the surviving dailies. Similarly, many city papers have been troubled by the expansion of suburban retail businesses and the decline of their principal advertisers which have been the larger downtown stores. Another major factor has been the rapid and extensive technical advances that have been introduced in the post—war years. This development has substantially increased the fixed costs of the publishers. Consequently, the foreseeable losses associated with a shutdown period have markedly risen in recent years. Also, as was the case in the airline and the railroad industries, the service provided by the industry is extremely time sensitive. The possibility of recouping strike losses once a settlement has been achieved is practically nil.l3 In summary, to employees the postwar period has brought a relative decline in employment opportunities and increased controversy over traditional job practices. To employers, the likelihood of strikes has been notably in— creased and anticipated revenues have often failed to materialize. Out of these growing difficulties came the strike insurance plan. 3Most of the information in this paragraph is drawn from A. N. P. A., op. cit., pp. 4— , 25—26, and 351—374. 124 The Establishment of the Suspension Insurance Program Strike insurance in this industry is actually the fore— runner of all management strike subsidy devices. The devel- opment of strike insurance by newspaper publishers dates back to the 1920‘s when it was possible to purchase such policies directly from several American insurance companies. Most of these companies did not survive the depression of 1A the 1930's There have been recent disclosures, however, that reveal that some form of continuous coverage for a few . . . . . . . . 15 dallles has been in existence since the thirties. ’ The actual establishment of the plan which is today referred to as "suspension insuranceH dates back to the 16 late forties. While rumored to exist, actual public con— firmation of the operation of the program did not occur until 1953 during the course of a strike against the Seattle Times. Mr. Charles Lindemand, publisher of the rival Seattle Post—Intelligencer——which was also participating in the joint contract renewal negotiations with A. N. G., but which was not struck at the time——remarked about the exis— tence of a strike insurance program in the Times dispute to 1“See footnote 2. C . 1. ., V 1, n‘ ', 12H. Howard Ostrln, ”Strike Insurance,' The Natlon (March 19, 1960), p. 250. 16”Strike Insurance Widely Adopted,” New York Times (September 9, 1960), p. 62; also, see footnote 2. .1 125 Mr. G. D. Conner. Mr. Conner was publisher of the Pacific Northwest Underwriter, a regional insurance magazine, and he printed a brief account of the plan. The story was quickly followed up and investigated by Advertising Age and by the Guild Reporter. Both publications subsequently printed the results of their limited findings.l7 By 1955, Fortune reported that ”almost every major daily in New York as well as in other cities carries strike insurance."l8 On June 30, 1955, at the Twenty—Second Annual Conven— tion of the American Newspaper Guild, the Guild adopted a resolution calling for an inquiry into the legality of the use of strike insurance in general and in a strike against the Brooklyn Eagle in particular.19 The following year, partly as a result of the resolution, an important ruling was made. In May, 1956, ten insurance companies in New York had filed their rates with the State Superintendent 20 of Insurance, Leffert Holy. A ruling on the compatibility l7”Publishers‘ Strike Insurance Operation Revealed; $3 Million are on Tap in Fund,” The Guild Reporter (Sep— tember ll, 1953), pp. 1 and 3. 18”Strike Insurance,” Fortune (April, 1955), p. 82. 19"Re Strike Insurance,” Memorandum of Mr. Max Pyle, Associate Director of Research and Information, American NeWSpaper Guild, Washington, D. C. (October 14, 1959), pp. 6—7. (Hereafter referred to as ”Pyle Memorandum. ) 20At that time the insurance was available for pur— Chase either from American firms or through representatives Of Lloyds of London. 126 of strike insurance with the insurance laws of the state was requested of the Attorney General of the State, Jacob K. Javits. On August 2, 1956, after a very short investigation, Javits wrote the following to the Guild: Upon investigation, this office learned that insurance against business losses due to strikes did exist and was being made available to members of the American Newspaper Publishers‘ Association. The material which this Department has acquired in course of the investigation, including copies of the insurance policies then in use, was re— ferred to the State Department of Insurance. On July 26, 1956, I was advised by that Department that the filings of each insurance company in— volved were rejected on the ground that approval of such coverage would be contrary to public policy. Since in the United States, insurance laws and regula— tions are established and administered by individual states, the effect of the prohibition by the State of New York——the only state to date to do so——was that the Newspaper Premium Fund Committee ”merely transferred its insurance to other 22 companies,” which were not franchised by the State of New York but which, nevertheless, could operate within the state. For the next few years the program was administered by the Newspaper Premium Fund Committee with the funds being 21Letter from Hon. Jacob K. Javits, Attorney General Of the State of New York, to Mr. William J. Farson Secre— tary—Treasurer, American Newspaper Guild (Augusu 2, 1956). Original copy is on file in the Washington, D. C. office of the guild. 22”Says Strike Insurance Against Public Policy,H Editor and Publisher (August 18, 1956), p. 127 shifted to a Canadian firm-—the Montreal Trust Company—— and the plan being underwritten by Lloyds of London through their legal representative in New York——Mendes and Mount.23 The actual operational details of the program were unknown to the public until the American Newspaper Guild acquired in March, 1959, a confidential memorandum dated May 29, 1958, which had been circulated by the Newspaper 24 Publishing Premium Fund Committee. The Provisions of the Plan The Memorandum of 1958 revealed the specific nature of the administration and coverage of the strike insurance program. The plan——”a group plan limited to risks sel— ected by the Underwriter”25——is open gnly to members of I A. No P. A. From the membership of A. N. P. A. a com— mittee ”was set up by the newspaper publishers interested in insurance covering losses that publishers may suffer ‘ as the result of business, interruptions caused by strikes.”26 This committee was and is known as the Newspaper 23Memorandum from the Newspaper Publishing Premium Committee to the Members of the American Newspaper Publishers Association'I (May 29, 1958), pp. 1 and 5. (Mimeographed copy obtained from the American Newspaper Guild office in Washington, D. C.) [Hereafter referred to as ”Memorandum of 1958 ”1 24Ibid., pp. 1—7; also see ”Strike Insurance Details Bared in Publishers Assn. Prospectus,” The Guild Reporter (March 27, 1959), pp. 1 and 2. 25”Memorandum of 1958,” op. cit., p. 1. 26Ibid. 128 Publishing Premium Fund Committee and it currently represents 27 the approximately #30 participating dailies. The committee is not a standing committee of the A. N. P. A.——which by the way disavows any_association at all with the strike inSur- ance program28——but, rather, it is an autonomous committee whose membership is composed solely of A. N. P. A. members selected by the newspapers which are adhering to the strike insurance program. The function of the committee is to advise the participating publishers on the administrative aspects of the plan and to negotiate with the underwriter for the most suitable provisions for operation and coverage. The benefits of the plan are available for both total and partial shutdowns and could be used to cover "fixed charges," ”expenses that cannot be eliminated during partial suspension,” and "profits that the insured is prevented from earning.”29 The benefits are available as of the eighth day after a covered strike begins. Using the figures that are revised from those outlined in the Memorandum of 1958,30 a struck daily can insure up to an amount equaling $11,000 per day, beginning with the eighth day of the 27”Insurance Helps——a Little,” Business Week (Decem~ ber 22, 1962), p. 19. 28See footnote 2. 29”Memorandum of 1958,” p. 2. 30 H Insurance Helps . . . ," op. cit., p. 19. 129 strike. The maximum aggregate coverage that any single daily can receive is $550,000. In addition, a total ceiling of $2,250,000 is set on the total amount of benefits that can be paid to any one city or to all news— papers which are signatories to any one labor contract as the result of any one strike. A provision is also made for an extra Sunday indemnity which is available for an extra charge. The plan includes payments to publishers who lock out their employees because of a strike against another paper in the same city. Each paper has its choice between coverage for up to 25 days or to 100 days. The cost of the insurance to each publisher is as follows:31 Annual Premium for Annual Premium Indemnity Period each $100 of per for each $100 of diem Indemnity Extra Sunday Indemnity 25 days $135.00 $12.30 100 days 225.00 20.30 The following is an example for a hypothetical strike situ— ation: Subject: One daily newspaper that has a weekday and Sunday edition Per Diem Indemnity (1) $7,000 7 days per week Extra Sunday Indemnity (2) $5,000 31The figures for the daily per diem premium are from ibid. p. 19, those for the extra Sunday coverage are from the ”Memorandum of 1958, ” op. cit. p. 130 Period of Coverage 100 days Computation of the cost: (1) $225.00 cost per hundred dollars for 100 days) X 70 number of hundreds of daily coverage) = $15,750.00 (2) $ 16.35 (cost per hundred dollars for extra X 50 Sunday indemnity) (number of hundreds of extra Sunday coverage) = $ 817.50 Total Annual Premium = $16,567.50 Thus, it can be seen that premium payments vary in propor— tion to the amounts of indemnity and that once set the premium is a fixed amount which is not subject to increase by assessments. Currently, the plan is administered by the Mutual Insurance Company, Limited, of Hamilton,Bermuda. Additional underwriting is provided by Lloyds of London. In order to collect the benefits, each newspaper must offer to arbitrate disputes with the exception of bargaining differences arising from or concerning news and editorial department reporters and writers, wel- fare or pension plans, the union shop, mainte— nance of membership, or the closed shop——except to the extent that provisions relating to these matters are included in contracts already in force or voluntarily entered into during the period of insurance. 2 32”Memorandum of 1958,” op. cit., p. 5. 131 Arbitration has had a long and varied history in this industry.33 Beginning in 1901, arbitration became the standard method of settlement of disputes arising from con- tract interpretation of agreements between A. N. P. A. and I. T. U.324 In 1902, wages and hours provisions of new contracts were added to the included list. In 1903, working conditions and shop rules——0ther than rules estab— lished by the international-—became arbitrable topics. The three other major craft unions soon afterward signed similar agreements with A. N. P. A. This was the pattern until 1922 when the international arbitration agreements ceased. The main cause of the breakdown was a dispute between A. N. P. A. and the pressmen, Stereotypers, and ph0toen— gravers over whether international union rules should be included as arbitable topics. A. N. P. A. said they should; the crafts said they should not be. In 1922 A. N. P. A. took the firm position that hereafter all international arbitration agreements ”must provide for unrestricted arbitration of all issues affecting both employee and pub— 35 lisher interests.H The typographers then joined the other three internationals in refusing to accede to this 33Burns, pp. 50—64. The remainder of this paragraph is based largely upon the material cited in this reference. 3MBetween 1901-1907, arbitration was compulsory for local unions but voluntary for local publishers. (In 1907, arbitration became voluntary for local unions if the pub—‘ lisher with which they bargain had not signed an agreement to arbitrate prior to a specific dispute. Ibid., p. 55. .—.———————. 351bid., p. 57. 132 position. Since 1922, however, voluntary arbitration has often been employed in various disputes in the succeeding years up to the present. Actions Taken by the Newspaper Unions As mentioned earlier, the initial action taken by the newspaper unions was the A. N. 0. resolution at its 1955 convention. Soon afterward came the ruling by the State of New York that the program was Hcontrary to public policy.” On the national level, the Guild sought a ruling by the U. S. Department of Justice in 1955 on the anti- trust implications of the plan. .No action was taken on the request.36 In a strike against the Ridder newspapers in St. Paul, Minnesota in 1958, the local Guild claimed that strike in- surance was involved and that its usage constituted an un— fair labor practice. No official complaint was filed. Nonetheless, as a result of a subsequent resolution passed by the local Guild, the two U. S. Senators from the state-— Hubert Humphrey MD) and Edward J. lhye (R)-—forwarded copies of the resolution to the Senate Select Committee on Improper Activities in Labor or Management Relations (the McClellan Committee) for study as a questionable 36” Y Pyle Memorandum,’ op. cit., p. 8. 133 management tactic.37 The matter, however, was not taken - . 38 up by the Committee. On the West Coast, a long and controversial strike began in late 1959 against the Oregonian and the Oregon Journal in Portland, Oregon. The two papers continued to operate despite the strike. The strike was an exception— ally bitter one. Both sides frequently charged the other with the usage of alleged unfair tactics——one of which was suSpension insurance. The culmination of these charges was the introduction, on February 15, 1960, of a resolution in the U. S. Senate by Senator Wayne Morse (D) of Oregon. The resolution contained the following relevant passage about the industry's assistance program: . . . Whereas it also appears that in order to escape their duty of settling labor disputes by the process of free collective bargaining certain newspaper employers, as a strike—breaking device, have subscribed to so—called strike insurance poli- cies, some of which have been negotiated outside the United States and Whereas it further appears that the employment of such strikebreaking devices is becoming an estab— lished pattern among newspaper employers to circum— vent the orderly process of free collective bar— gaining as a means for the settlement of labor dis— putes: Now, therefore, be it Resolved, that the Committee on labor and Public Welfare, or any duly authorized subcommittee thereof, 37Ibid., pp. 9‘10; See also HMcClellan Committee looks at 'Strike Insurance',” Editor and Publisher (February 1, 1958), p. 16. 38For a caustic comment concerning this develotment, see Ostrin, op. cit., p. 252. 139 is authorized. . . to examine, investigate, alld make a complete study of the extent to which news— paper employers who are involved in labor disputes with their employees have adopted the practice . . . of subscribing to so—called strike insurance as a means of coercing their employees and otherwise 99 subverting the process of collective bargaining. . . The resolution requested a report from the committee by January 31, 1961. The resolution, however, Hwas never acted on and died in the Senate Labor and Public Welfare Committee.”u© r—~4 y", Earlier, as a result of t Oregon dispute the Guild had again requested on October 28, 1960, that the U. S- Ml Attorney General rule on the legality of strike insurance. The Department of Justice, however, did not respond to the he request. 6 ITKECQuandaigruof EYE?1LTIOOS Despite their outward indignation for the insurance program, the unions which negotiate with the newspaper publishers have never seriously challenged the legality of the plan in a court of law. The basic reason is that the 39U. S. Congressional Record, Vol. 106, P pp. 2998—9 (Senate Resolution 271). 40Letter from Senator Morse to this writer, September 30, 1963. 41Russell Porter, HNewspaper Guild Asks U. S. Inquiry, New York Times (October 29, 1960), p. 27. 42 Letter’lhtnnlir. Herbert J3 liiller, Jr., Attorney General of the United States, to this December 30, 1963. art :, :3; S S 1 C‘- 1: a 1317." 1""? 1’) 1T; 8 17’ , f I 135 unions find themselves in an ideological dilemma. Its nature can be seen by contrasting the following portions of an exchange of letters between Mr. A. Andras, Director of Legislation of the Candaian Labour Congress, and Mr. Ellis T. Baker, Director of Research and Information of the American Newspaper Guild. In his initial letter, Mr. Andras writes: . . .I must confess a dilemma and I turn to you in hope that you may be able to clear it up for me. .It strikes me that it is somewhat difficult to argue against an employer strike insurance fund when unions have traditionally built up strike funds of their own. If an employer strike insurance fund Hdoes violence to the concept of bargaining in good faith,” presum— ably the building up of a large strike fund by a union like the U. A. W., for example, might be open to the same charge. . . My concern is that if the Canadian Labour Congress itself or its provincial (state) Federa— tions are to make respresentations, they should not be taunte Qwith the charge of the pot calling the kettle black. J In his response to the query of Mr. Andras, Mr. Ellis re— plied: . . I too have difficulty in distinguishing between strike insurance and strike funds, except as strike insurance may be subject to governmental regulation peculiar to insurance as in New York. Despite the resolution of our recent convention, our counsel believes that there is little hope of effectively getting at strike insurance in the U. S. through labour-relations or antitrust laws. He believes that a valid sociological distinction can be drawn between our modest combination of resources and those of the publishers (which are combinations Z43Letter from Mr. Andras, dated October 2, 1961. [The letter is contained in the files of the Guild Office ln Washington, D. 0.1 136 of capital), but he seriously doubts that since the passing of Louis Brandeis anyone can be found to draw such a distinction, least of all within the personnel of the National Labor Relations Board or its state counterparts." Thus, the fear that an attack upon the strike insurance scheme of management could lead to a retaliatory move by employers on union strike funds or, more likely,to a charge of hypocrisy, has resulted in an acquiescence by the news— paper unions to the maintenance of suSpension insurance with- in the publishing business. Likewise, the recent decision in the railroad case has undoubtedly reinforced the feeling of futility about any effort to attack the plan under the existing labor statutes. Consequently, there is nothing to indicate a change in the position of either labor or manage— ment with regard to the existence of strike insurance in the newspaper publishing business within the foreseeable future. Comments The development of suSpension insurance inthe news- lDaper publishing business is significant for at least one Haajor reason: to date it represents the most extensive attempt of employers in a non—regulated industry to establish a mutual financial assistance agreement. The important point, however, is not that such a device has MuReply letter from Mr. Baker to Mr. Andras, dated October 20, 1961, ibid. 137 become operative in a non—regulated industry; rather, it is of consequence to note the similar characteristics of the bargaining structure in the industries which have developed these programs. As will be developed in the con— clusions to this study, all of these industries are charac— terized by multiple unionism, a high degree of strike ex— posure, rapid introduction of technological change in recent years, rising fixed costs, and a time sensitive service that limits the ability to recoup strike losses. There is, however, one major distinction between the functioning of the newspaper plan and those in the air— line and railroad industries. In the case of the latter two industries, labor relations are closely regulated by the Railway Labor Act. Consequently, the mutual assistance programs are closely associated with the functioning of the Act. For a firm to receive benefits, it is usually necessary that the striking union violate the terms of the Act or strike against terms recommended by an Emergency Board. In the newspaper industry, the major applicable LLegislation is the National Labor Relations Act, as amended. VJith the possible exception of the national emergency provisions, this Act does not specify any comparable proce— dures to the Railway Labor Act for securing a settlement in a diSpute. Hence, the operation of the neWSpaper program has no direct dependence upon any existing labor statutes. ihl fact, the only requirement to receive benefits is that 138 the firm must offer to arbitrate the disputed subjects and any other issues that it unilaterally designates for inclusion in the arbitration offer. In order that the true significance of the impact of this plan in specific situations can be effectively evaluated (a task which is currently impossible), minimal ex post reports should be required. These reports should contain a statement of the incidents in which such funds are involved and the amount of funds received by the struck party. The employer— reporting sections of the Landrum—Oriffin Act45 should be amended to require that these reports be filed with the Bureau of Labor—Management Reports of the Department of Labor. Accordingly, the reports would be available for public inspection and study. Such a requirement would differ in no meaningful way from the present requirements imposed by the Act on the reporting of union strike benefit payments. On the positive side, suSpension insurance possesses several virtues thatdistinguish it from the other plans discussed. One feature is that there is no contingent liability on the other participants when any member is struck. Each firm, if it elects to take part, pays only its established premium for the year. As a result, the limited liability feature eliminates the possibility that a financially—hard—pressed firm could be contractually uBSection 203. 139 obligated to provide additional funds above the premium amount to a struck participant. Each newspaper knows. the exact cost of participation prior to its decision to seek coverage. The limited liability feature, however, has meant that the annual premium amount must be set quite high. This costliness of the program, consequently, raises the serious question concerning the possibility that the financially weakest firms in the industry may not be able to participate and are left vulnerable to the full economic impact of a strike. Unfortunately, since the membership lists are not public, it is impossible to assess the full significance of this question. Another feature of the plan is that it is basically self—operating. The relationship——unlike the railroad plan——is strictly between the struck carrier and the insurance company. While the exact coverage, verification, and payment processes are not public, it appears that there is little opportunity for any third party to become involved in the eligibility— forubenefits process. In general, it is improbable that suspension insurance, b37 its presence, has served to enhance the likelihood of S"Crikes occurring in the industry. The seven day waiting pei?iod in which no benefits are payable combined with the faCZt that the high fixed costs are only partially covered—— an<3 then only up to a limited amount and for a limited pel‘:iod—-would seem to assure that a publisher would always 140 prefer to continue operations. Moreover, it is possible that the plan——by offering a limited amount of counter— vailing funds to the widespread usage of strike benefits by the unions in this industry—-may decrease the likeli— hood of some strikes actually occurring. In either case, it seems doubtful that suspension insurance itself con— tributes in any significant way to employer intransigency at the bargaining tables. CHAPTER IV RELATED DEVELOPMENTS IN OTHER INDUSTRIES Introduction Since the public pronouncements concerning the formal agreements between the firms in the airline, newspaper, and railroad industries for assistance in the event of a strike against a participating member, variations of these programs either have come into existence or have been studied by other industries. In some instances the p'ograms have been instituted and operational for several years; in others, related proposals have been thoroughly investigated and subsequently rejected as being either infeasible or unde— sireable; while in still other situations, similar plans are currently under study for possible implementation at a later date. Management Assistance Plans in Operation fiawaiian Sugar Industry In 1956, twenty—six sugar plantation owners on the Hawaiian Island were faced with a threat of an industry— Wide strike stemming from a dispute with the International 1longshoremen's and Warehousemen‘s Union which represents lfll 1A2 the field, processing, and transportation workers. As a result, the twenty—six plantations—-working through the Hawaiian Sugar Planters' Association——adopted a mutual strike support plan——sometimes referred to as ”production insurance." The threatened strike was averted in 1956 but in early 1958 an industry—wide walkout that lasted for four months did occur and the insurance plan, consequently, was put into operation. The plan is unique in that it does not serve to cover losses due to the strike to the current sugar crop; rather, it is designed to aid in the coverage of damage sustained to future crops as a result of the original strike——in this instance, the damage sustained in 1959 and 1960.1 The strike in 1958 Hwas lOO% effective” in that the sugar owners made no effort to do any work on their plantations. The owners did ”no harvesting, weeding, fertilizing, rodent control, or-—most important of all—- ’3 irrigation.”L Since the sugar cane crop in Hawaii is allowed to grow for two years before harvesting, the strike was seen to have caused a serious dislocation of tDlanting and harvesting schedules which would take several years to correct adequately, Due to locational differences, \ 1 " '- - TT ”Strike Insurance Plan Gets Test, Business week, “Tune 28, 1958), p. 95; see also, ”Teamwork Cuts Strike Losses,” Nationls Business (July, 1960), p. 79. 2 HStrike Insurance Plan Gets Test,H op. cit , c. 95. 143 the impact——especially the lack of irrigation in the dry areas—~was unevely distributed among the plantations. In fact, it was the "recognition of this abnormal variation of risk in a strike [which] brought about the mutual support plan" that was "devised to correct some of the inequities imposed by industry—wide bargaining.H3 Operationally, the plan is referred to as a form of deductible insurance. The losses in the actual strike period are excluded from coverage but production losses for up to six years afterward are covered. Each one of the twenty—six plantations has established a normal annual production figure for itself. Following the strike year, the first one—third of the normal annual production figure is excluded from coverage——hence, the reference to deduc— tible insurance—-while the amount of losses sustained beyond this figure is compensated for at the rate of $.75 - A ,. . on the dollar. For example, one plantation may have estab— lished and have had mutual agreement that its normal annual production figure is 30,000 tons of sugar cane. Its production can fall by one—third-—to 20,000 tons per :Jear——the year following a strike with tne reduction in output being ascribed to a ”labor distrubance”——and the plan- tation owner would receive nothing from the strike plan. 3Ibid. Ll H .,_ Ibid.; see also ”Teamwork. . ., op. elt., p. 79. 14A If the figure should fall to, say, 15,000 tons for the year following the strike, the plantation would be entitled to an amount equal to seventy—five per cent of the dollar value of the 5,000 tons of sugar that were lost beyond the one—third of production deductible figure. The dollar value would be made up by an assessment on all of the twenty—six plantations (including the loss—reporting firm) and it would be payable in installments over future years. There is no record available as to the amount paid out to date under this plan. California Agriculture Following a two year organizational drive by the A. E. L.—C. I. O. to organize farm employees in California, an Agriculture Interinsurance Exchange representing numerous . L. . . . 5 grower organizatlons was established in May, 1961. The original agent for the indemnification policy was the Sutter Holding Company ofihunlCity, California. The plan envisions benefit coverage of up to seventy- five per cent of the expenses incurred for the proportion <3f the crop insured. The premium rates are based on the crops which are to be insured. Premiums on peaches, pears, tomatoes, prunes, and several other fruit tree crops were K 5”Strike Insurance is Offered California Farmers,” EEgll Street Journal (June 15, 1961), p. l. 145 set at $1.50 per $100 of insurance; hops, melons, lettuce, and other truck crops were set at $2.00 per $100 of in— surance; and sugar beets, walnuts, almonds, and ”other crops which involve less hand labor'1 were set at $1.00 per $lOO of insurance.6 These premium charges together with the associated benefits cover only the established proportion (75%) of actual charges and expenses associated L with the production of the covered crops themselves. Addi— tional transportation exLense coverage may be added to the basic policy for $.5O per $1CO of insurance and processing expense coverage can be added for an additional $2.00 per 7 Hence, as an illustrative example, $1OO of insurance. a farmer could purchase production insurance for a set amount of crop acreage——say fifty acres of peaches-—which has an anticipated amount of production expenses-—say $10,000. The farmer, accordingly, could purchase insurance on his peach crop acreage up to the amount of $7,5OO for the premium charge of $112.50 (i.e., $1,5O x 75). For a total premium of $225, he could purchase additional pro— tection coverage against loss caused by strike interference at the cannery with the processing of the insured crop. The insurance plan, however, Hdoes not insure against loss I of profits from the crop.’ l 6Jacqueline Stanton, ”Strike Insurance Plan Here,' Marysville (Cal.) Appeal~Democrat (May gj, l9cl), p. 1. 7Ibid. 8Ibid. 1A6 In the event that widespread losses were sustained as the result of a strike and depleted the insurance reserves, each farmer member would be liable for an additional assess— ment up to the total amount of his original insurance premium. While there is no public information concerning the total amounts actually paid out, the original insurance reserves totaled only about $100,COO.? There was one important prerequisite required of all farmers who wished to participate in the program. Namely, every member of the plan must ” pay prevailing wage rates and. . .comply with all applicable laws, rules, wage rates and. . .comply with laws on employment, wages and hours, ,_ . . . .,. 1O safety and housing, and working conditions” to be eligible for participation in the program. Management Assistance Plans Under Consideration The Trucking Industry Through the industry trade association, The American Trucking Association (A. T. A.), thC possibility of estab— lishing some form of mutual strike assistance has been under study for a number «f years. On February 12, 1990, Mr. Benjamin R. Miller, Director of Industrial Relations a H . . .,.., .,,_ a H j Strike Insuran;e is Ollered Calliornia Farmers, op. cit., p. 1. W H 1LStanton, op. Cit., t. l. 147 for the A. T. A., gave an address before the Regular Common Carrier Conference which met in Bal Harbour, Florida.11 In this address,Mr. Miller indicated a strong interest in the establishment of some sort of strike insurance program. At the same time, however, he was quick to point out the many difficulties that could conceivably result from attempts to introduce into the trucking industry any of the plans already in operation in the airline, newspaper, and railroad industries. Thus, his position was that: . . Service interruption insurance may be a moderate means of changing the imbalance at the bargainingtsxfle of the trucking industry. But I must tell you it may not be the panacea that some think. If it were a hundred per cent effec— tive, you might create exactly what came from the steel strike—-a national emergency. And you would have the Congress again saying: ”We can't stand such strife in this Nation; the government has to intervene." Any maybe we would have gone around the complete ciigle, back to government intervention and compulsion. From this position he concluded that: Let me leave you with the idea that we‘ve been working on it, we'll continue to work on it and we hope tO get your support in what will evolve as some conclusions from deep research and intel— ligent application to the pfgctical problems that these matters might create. While the address by Mr. Miller did not set forth any particular details of how such a program would be established llBenjamin R. Miller, ”New Developments in Labor n Relations-—A Discussion of Service Interruption Insurance, (February 12, 1960), pp. l—lO. (Reprint) 12Ibid., p. 10. 13Ibid. 1A8 in the trucking industry, it is indicative of the fact that the concept does contain an element of appeal to the industry. More recently, Mr. Robert E. Grindle, Assistant to the Director of Industrial Relations of A. T. A., stated that: The subject is still being explored, but thus far no plan has been approved for use by this industry. . . . The status of this matter remains substantially the same [as tpat stated in the ad— dress by Mr. Miller]. .14 Thus, while the subject may not be completely dormat, thereHHmCConH AUHCQHopmHHCm Z HoCmHszoQ .AHmHHoptC. eoCm HHCSQCSV flCoprHngHH; sCmoeoo ooCtC:WCH mooHOHdem pm HHCD COH ooCMCSmCH omMQQon CCoz Ho spHHHCHomqm Ho COHHtCHmem HmHC.m5po<: hCHCmQEoo H mCmeHm .m .m .ooCsowt mm. mm mm.H mm.Hm C W“ cm oo.H om.H om.sm C mm. om.H ms.H ms.m: o oH.H oe.H oo.m oo.om m mm.H H os.H H om.m H ch.meH H eOHCeC merHez eeHCem weHeHez eeHCei HCHeHez oz eHCeCem sHeeez eeHC Cooz 03% ECHEoCm HHCpCoz Coo: oCO ESHEoCC HHCHCoz ESHEoCm hHCpCoz eeeHe: m.HCmQEoo ooCmCsmCH mooonQEm age He meHCeeem see meeem Ce eHseeeem--. \ E mHmHCm pzw oHHnsm an coUH>OCm ooCmHmem< .nCoxCozHoon ooHHCDC oo.mmo.osw.mmH oo.mHs.wHH sHm.w oo.map.omH.H on.mmH.s HHH.noH oo.ooo.ooo.m oo.mHs.smm.mHH mmm.m: mmm.oH MsHasm moZHZL 22¢ UHH£:H HO EDH<> H HmCOH wommo Ho Lonesz coon Ho osHe> Hnoos po>Huoom Doom Ho mezzo; HmHOH CHCOZ oCo CH Doom MCH>Hooom onHHEmH Ho CoQEsz HwomCmH : -Hozomé >.L H... CC: HO> Coco: nSHQCsm HxCC> 3oz CH COHwaCoCEOc HCoEHOHCEoC: ooCmHmew< Ho oSHm> HmCOH popdooo< moHHHEmC Ho ConEsz HwHoe oopoonom mHCmoHHQd< Ho CoQESZ Home? wCHzHQo< mCoxCozHoopm Ho Conesz HmHoe oozmHmHmw< oHHCSL oCH wCHCSQ onoCow< mmmmH Ho oxHCHm Hompm oem>Hnm one oHHnad an oooHsosm ooceanwnell.m CHCHH 193 Comments The use of unemployment benefits as a strike subsidy introduces a new element into the study. All of the formal devices discussed up until this point have been developed and administered by the parties themselves. Unemployment compensation in strikes injects state government or, in the case of the railroad industry, the federal government into the collective bargaining arena. In both New York and Rhode Island, the funds become available only after a long waiting period. Hence, the role of unemployment compensation as a form of strike sub— sidization in these states is restricted to work stoppages of a relatively lengthy duration. In the railroad industry, however, there is no waiting period. When a strike occurs in the industry and the terms of the Railway Labor Act and the relevant union constitutional provisions have been ad— hered to, unemployment benefits are involved. Yet, despite the current limited applicability, the issue as to the desirability of this development combined with the possibility that these current programs could provide precedent for similar action elsewhere dictate that attention be focused upon these specific situations. In a broad discussion of labor policy in the United L States, the Labor Study Group1L of the Committee for 14The membership of the group consisted of: Clark Kerr (chairman, Douglass v. Brown, David L. Cole, John T. Dunlop, 194 Economic Development stated: But our endorsement of methods used by employers and unions to ease the financial burdens of labor disputes holds only when those methods are private. We oppose the payment of unemployment compensation to workers involved in a labor dispute, whether that dispute takes the form of a strike or lock out. State laws vary on this point, though most conform to our recommendation. Unemployment compensation is now available to striking railroad workers. To this writer, it is also difficult to reconcile the payment of unemployment compensation to primary strikers with a belief in a free collective bargaining system. Two fundamental objections to such a practice stand out. First, the part that the government should assume in the settle— ment process of private labor disputes should be restricted Whenever possible to that of an impartial third party. The involvement of governmental statutes and facilities to provide funds to primary strikers taints this role of neutrality with a distinct mark of partiality. Secondly, the fact that the funds used to pay these benefits are obtained solely from a tax upon employers sesms by defini— tion, to exclude these payments from even being considered as a source of income to primary strikers. Moreover, in the case of the railroad industry, the grounds presented in defense of the practice by the railroad unions are not William Y. Elliott, Albert Rees, Robert M. Solow, Philip Taft, and George W. Taylor. 15Committee for Economic Development, The Public Interest in National Labor Policy, A Report Prepared by the Labor Study Group (New York: Committee for Economic 13evelopment, 1961), p. 136. 195 convincing. The unions in the airline industry are simi— larly subjected to the same lengthy proceedings and ex— hausting provisions of the Railway Labor Act; but since employees on the airline industry are not covered by the Railroad Unemployment Insurance Act, they are not eligible for unemployment benefits in the event of an actual strike. Also the contention made by Mr. Schoene that these benefits serve as a device by which the union leader— ship can encourage compliance by the membership with es— tablished procedures is more of a rationalization for the existence of the practice than a justification for its continuance. Certainly the officials of every union in the country would welcome the presence of such a strike subsidy as a method of maintaining control over their own rank—and file who are sometimes restless during the negotiation period. There is no substantive reason why the railroad unions should enjoy such a singular privilege. With respect to the eligibility of primary strikers for unemployment benefits in the two states, the precise reasons for this practice are not available. Effective lobbying, however, would seem to be the most logical ex— planation. With respect to the assistance provided by public and private agencies (excluding unemployment compensation payments) the benefits——often in kind rather than monetary income-~are usually restricted in coverage, severely limited 196 in amount, and paid more often on the basis of need than of right. As a result, they do not, at present, represent a strike subsidy that is of any consequence in either magnitude or principle. PART III CONCLUSIONS AND RECOMMENDATIONS 197 Chapter VIII CONCLUSIONS AND RECOMMENDATIONS Conclusions Bargaining Structure and Environment Most of the strike subsidy devices discussed in this study have involved only three industries: the airline, newspaper, and railroad industries. Employers have recently devised and made operative the Mutual Aid Pact for the airlines, suspension insurance for the newspapers, and the Service Interruption Policy for the railroads. Unions in these indsutries have traditionally relied upon strike benefit programs which are both widespread in usage and substantial in benefit levels. In addition, the members of the railroad unions have been made eligible for unemploy- ment compensation coverage in most strikes. Initially, it would appear that the evolution of the employer plans could easily be explained in terms of strike power on the union side of the bargaining tables encouraging a recipro— cal response from the opposite side. Countervailing power, however, is only a partial explanation for the formal establishment of these employer plans. Had countervailing 198 199 power been a dominating consideration in their evolution, many more such devices would presumably have sprung up in numerous other bargaining situations. The fact that employer programs have not been formed elsewhere to any major degree casts strong doubt upon such a monistic explanation of their development. Actually, it appears that these devices became realities as a result of the interaction of several unique considerations. An examina- tion of the bargaining structure and environment of these industries reveals the prominent casual factors. The most outstanding characteristic of the bar— gaining structure in these industries is the presence of multiple unionism, although, as we have seen, this has not always been sufficient to induce employers to develop strike insurance plans. Each employer must bargain with a host of separate unions——anyone of which can shut down the entire operation of the firm. The presence of multiple unionism significantly increases the strike exposure of a firm and industry. The numerous contracts, negotiation sessions, strike threats, whip sawing, and tendencies toward jurisdictional controversies——to mention a few——supply bontiful opportunities for work stoppages to occur. Under the shadow of multiple union- ism, the flowering of stable industrial relations 201 a direct function of time—~both with respect to news coverage and advertising. Consequently, the opportunities for employers in these industries to stockpile an inven— tory prior to a strike or to recoup losses after a settle— ment is achieved are severely limited. Employees in these industries are, correspondingly, affected adversely by work stoppages. Opportunities for overtime employment before or after a strike period are often unavailable. Hence, both parties have ample reason to search for ways to protect themselves from strike losses. A derivative consideration from the issue of time sensitivity is the fact that the strike weapon has re— tained its full measure of economic potency. In some industries--like utilities, petroleum, and chemicals—— the introduction of highly automated equipment has meant that the human contribution and importance to the production process has been greatly diminished. As a result, when a strike occurs, operations of these industries have often continued unimpaired with respect both to revenue flows and consumer allegiances. Strike effectiveness,accordingly, has been markedly reduced in significance in these in— dustries. In the airline, newspaper, and railroad in— dustries, technological changes have also been numerous and far—reaching but they have not—~to date——been extensive enough to permit operations to continue in the face of a strike by one union, especially when supported by other 202 unions which refuse to cross a picket line. Thus, when shutdowns take place, revenue ceases and consumer loyalties often dissipate. As the length of a strike increases, these problems become more acute. In the postwar years, these three industries—-like many others--have experienced extensive changes in techno— logy. Fixed costs along with other quasi—fixed costs have risen noticeably in recent years.2 As a result, the costliness of a strike to a firm has been amplified with the passing of each year. A parallel can likewise be drawn to the plight of the worker during this same period. Since the end of war, the prosperity years have witnessed a rising standard of living for most groups in our society. Many union members now have home mortgages, installment purchases, children in college, insurance premiums, and other similar financial commitments that must be met regularly. To many employees in other industries, pre— strike or post-strike overtime employment affords an 2With respect to the movement of fixed costs in gen— eral, Charles . Schultze, in his Recent Inflation in the United States, Study Paper No. l for the Joint Economic Committee of the U.S. Congress (Washington: Government Printing Office, 1959) , has written: ”One of the major, though little noticed, features of the postwar period has been the rapid change in the cost structure of the American economy. The proportion of total costs accounted for by relatively fixed items of expense has risen sharply." (p. 79). 203 opportunity to mitigate at least a portion of these expenses. Such is generally not the case in the airline, newspaper, and railroad industires. Therefore, the unions in these industries have been prompted to develop strike benefit plans that have comparatively high benefit levels and, in the railroad case, to have unemployment compensation benefits available in most strikes as a supplement to their strike programs. As for the product market of these three industries, imperfect competition is the rule. The firms that compose these industries are typically oligOpolistic in their regional or franchised markets. When more than one firm is present in a specific market, the basically homogeneous nature of the service provided and the lack of noticeable price differentials between firms means that customers can with little hesitation, switch their purchases to a nonstruck competitor. Hence, to be truly effective, the employer plans require widespread participation within the industry, especially of the larger firms. If the plans lacked substantial membership, the few subscribers would be Vulnerable to a simultaneous strike which would mean that the non-participants could attract the customers of the shutdown firms and the objectives of the plan would be nullified. The more imperfect the market structure, the fewer the firms, the greater is the relative ease of ob— taining maximum participation. In the airline and railroad 204 industries, however, extensive membership is a necessary condition for the effective operation of their programs but it is not sufficient alone. Competition from alter- native forms of transportation currently represents the Achilles heel of these plans. In the future, it is pos— sible that inter-industry assistance agreements could be devised but, at-the present time, there is no indication that such arrangements have been contemplated. In news- paper publishing, the question of substitutes in not a paramount issue. Most cities and regional areas negotiate on an association basis. Frequently if one firm is struck, the others in the bargaining group shut down in sympathy. Hence, alternative choices to the reader and advertiser in local areas are often not available. While out—of—town newspapers can be shipped into a struck market area, these "imported” dailies may provide news coverage but they offer little, if any, lasting competition for the main source of income to the struck papers——namely, local and classified advertising. Moreover, once a strike is ended, most subscribers and advertisers return to their local paper. Consumer loyalties are more quickly renewed in the newspaper field than in the airline and railroad industries. The types of bargaining negotiations conducted between the parties does not seem to be a factor con- tributing to the furtherance or hindrance of these devices. 205 The airline industry bargains on an individual firm basis; the newspapers typcially on a city-wide or regional basis; and the railroads usually on an industry-wide basis although the strike pattern of the past few years has been one of strikes against single carriers. Similarly, examples of unions in other industries which bargain on the firm, region, or industry level and which provide strike benefit programs can be cited; conversely, examples of unions that bargain at each of these levels and which do not have such programs could also be cited. Typically, however, bargaining relationships which actually result in industry-wide strikes should negotiations be stalemated are illsuited for the operation of strike subsidy programs.3 Both the Mutual Aid Fact and the Service Interruption Policy are in— operative in the event of an industry-wide strike; the newspaper plan, however, could still theoretically function since the benefits are paid by an independent insurer rather than by other firms in the industry. But since most private insurance programs are funded upon the assumption that the insured risk will not simultaneously occur to all of the insurees, it is doubtful that the independent insurer could continue 3The minor strike plans operative in California agriculture and Hawaiian sugar (surpa, Chapter IV) were specifically designed for industry—wide strikes and there- fore, represent exceptions to this conclusion. These two plans have been neglected in the discussion in this chapter because they are small in operation and because their establishment was in response to a singular strike problem: perishability of present crops in the former and damage to future crops in the latter. 206 for any prolonged period to pay adequate benefits to the entire industry (or any major portion therof). By the same token, it is extremely difficult for a union to pro- vide an adequate strike benefit program if most of its members are on strike. Thus, few unions that both bar— gain and strike on an industry-wide basis have formal strike benefit programs. The economics of funding and administering such a program are virutally insurmount— able. Interunion financial assistance programs, however, have at various times been established to aid unions in just such a predicament.LL The Steelworkers Defense Fund is but one example of how unions which have members who are employed are able to muster funds to assist another national union whose majority of membership is on strike. These interunion programs have usually been on an ad hgg_basis and, as such, have been excluded from detailed discussion in this study. Thus, to recapitulte briefly, the preceding dis— cussion disclosed a pattern of stimulants to the develop— ment of strike subsidy devices. With respect to the employer plans, the three industries with the most advanced plans have several common characteristics that encourage the establishment of such programs. While other industries may have one or several of these traits, it is the com- bined presence of all of them which makes these plans both desireable and feasible. These factors are: 207 1. multiple unionism 2. retained potency of the strike weapon 3. rising fixed costs during the postwar years A. extremely time sensitive services or products 5. the use of whipsaw strikes by unions in the industry 6. imperfect product markets 7. a relatively homogeneous service or product 8. the availability of substitute services or products As for the union devices, it is logical to expect that several of the causes of industrial instability which have attracted management attention to strike sub- sidies would also contribute to union interest. While certainly not limited to the airline, newspaper, and railroad industries, the unions in these industries have an especially strong and widespread reliance upon strike subsidies. Motivation for the extensive usage of these devices is also found in the bargaining environment of these industries. The following factors have been im— portant interest stimulators: 1. multiple unionism 2. rival unionism 208 3. the derivative effect of the time sensitivity for the products and services of the firms upon the demand for labor 4. the practice of striking individual firms rather than entire industries While it is difficult to explain the presence of strike benefit programs elsewhere in terms of the above brief list, these considerations do materially aid in under— standing the major role assumed bytmmse fundsin these three industries. In no other bargaining situation are strike subsidies more important——with respect to magni— tude and prevalence——than they are to the unions in these industries. Having outlined the major factors that have promoted strike subsidies, it is immediately apparent that these characteristics areirytuniversally found in other bar— gaining structures and environments. In many labor— management relationships, strike subsidy programs would be inappropriate or infeasible. For employers, the following factors would tend to forestall the adoption of such plans: 1. Bargaining situations that are free from the constant harassment of multiple and rival unionism provide opportunity for the establish— ment of more reasoned and responsible relation— ships between the parties. 209 2. Those industries whose products can be stock— piled prior to a strike or whose orders can be backlogged during a strike have little need for such programs. The long run effect of strikes in these industries may be inconsequential to total output, sales, and profit figures. 3. Industries in which automation has made substan— tail inroads into the performance of hitherto human job requirements may find themselves able to Operate at near capacity in spite of a strike period. A. Industries in which fixed costs are a relatively small percentage of total costs would have less need for such programs. 5. The more competitive the industry, the greater the number of firms and the more difficult it would be to attain widespread participation. 6. If industry—wide bargaining is accompanied by industry—wide strikes when attempts to reach an agreement fail, strike subsidy programs are—- from a practical vieWpoint——impossible. Likewise, there are several considerations on the labor side that serve to explain why certain unions have only token programs. While I have indicated above that there are several exceptions, the general validity of these restraining factors remains intact. The limiting factors are: 210 Industrial unionism minimizes strike exposure, reduces the threat of rival unionism, adapts more easily to technological change, and provides more latitude for the solutions of mutual union problems than does multiple craft unionism. Because sev— eral of the major causes of instability and in- creased strike incidence are absent, interest in strike subsidies is lessened. Unions whose members are employed in industries which can stockpile inventories and recoup busi— ness following a strike are often able to find overtime employment available to make up for lost income during a strike period. In these instances, union strike funds are of less con- sequence. Situations wherein industry-wide strikes are employed by unions or where retaliatory lock— outs are used by employers of non—struck firms in response to whipsaw strikes render strike bene— fit plans infeasible. The economics of sheer size makes adequate strike plans in many small unions impossible. Declining 1.. union membership in other unions may mean that some plans already in existence may have to be abandoned. 211 5. Unions in very competitive industries where wage rates are typically low are often precluded from establishing strike plans because of funding dif— ficulties. 6. In local, state, and federal governmental occupa- tions, where union membership is expanding, strikes are illegal. In many strategic defense industries. the strike weapon is rarely used because of im— mediate federal intervention. When strikes do occur, their duration is usually quite short, Hence, in these instances, strike subsidies are either irrelevant or obsolete. To summarize, it is apparent that strike subsidy devices are the product of certain almost unique sets of circumstances. The possibility that employer groups and unions——other than those already using such devices-— will in the near future adopt similar programs seems remote. While it is true than on the surface it would appear that such devices would have an alluring appeal to all bargaining situations, this section of the study has demonstrated that the successful operation of such programs is sharply restricted to a rather limited set of conditions. The limited applicability of these devices becomes even more obvious when the actual mechanics of the existing programs are examined closely. 212 The Devices Themselves In the preceding chapters, each strike subsidy device was examined individually. Without restating their specific provisions, it is necessary to present a brief comparative summary of the devices before turning to the subject of their compatibility with the public interest. Management Devices The type of administrative machinery required to supervise the employer plans varies. The airline plan requires no intermediary body; the newspaper plan employs a committee but its role is more supervisory than adminis— trative with respect to the dispensing-of—funds—process; the two minor plans in agriculture and sugar have boards but they too serve no meaningful role in the procedures for providing benefits. The railroad plan, by contrast, has a committee that does serve an active role in the opera- tion of the industry program. Participation in the programs of the respective industries is high. The continued financial and tactical success of these plans requires that this pattern be con— tinued. From a financial vieWpoint, the ability of these programs to provide adequate benefits to struck partici— pants and, simultaneously, to keep the cost of participa- tion minimal is premised upon the assumption of widespread industry participation—~especially of the major firms. As 213 for the tactical considerations, it is also of para- mount importance that as many firms in the industry as possible belong. Otherwise, it is possible for the unions involved in a dispute to negate the entire purpose of these devices by striking only the participants. The non—partici— pants would receive the benefits of sales to the customers of the struck firms without encountering any liabilities. Avoidance of such events was precisely the reason that these devices were established. Should the unions single out the non-participants for a strike, the firms protected by their strike subsidy program then are able to reap the benefits ofthe business of the struck non—participants and the strike subsidy program does not become involved. It is clear that non—participants are vulnerable to such tactics and undoubtedly such considerations are weighed by them when they decide not to become members. With respect to contingent liability, the pro— visions of each plan differ. In all cases, however, each participant assumes an equal degree of relative liability. With the lone exception of the newspaper plan, all of the remaining programs contain a stipulation that requires ad— ditional payments beyond original premiums. Nowhere in the plans that contain this additional liability feature is mention made of any variation in the financial status Of the individual members. A financially—hard—pressed 214 firm must either assume the additional liablitty or not participate. On the other hand, these weak sisters—— which are the traditional targets of whipsaw strikes—— are in far better financial position to weather such assaults with these plans than would ever be possible in their absence. Further, the plans which entail an addi— tional liability characteristically have a very low basic premium——if any at all. Hence, the opportunity for the weaker firms to join these programs——and risk later extra assessments up to some established maximum-—is enhanced. In the newspaper plan, there is no provision for additional premiums but the basic annual premium rate is quite high. For that reason, many of the smaller and marginal firms are prevented, by the costliness of membership, from join— ing. As for the legality of these programs, two plans have been subjected to legal tests. The Mutual Aid Pact was approved by the industry's regulatory body; the Service Interruption Policy was upheld following a civil suit in the federal courts. In both cases, the courts found that the respective plans were in no way in violation of existing labor statutes. In the railroad decision, the court of original jurisdiction went even further, stating that strike insurance is specifically protected by the Clayton Act and the Norris—LaGuardia Act. The appellate courts refused to rule on this aspect of the original decision. In any event, these decisions have made clear 215 the fact that there are no legal barriers to employer mutual assistance as long as the program is limited exclu- sively to matters concerning labor relations. In all of the plans, some form of eligibility re- quirement is imposed upon all would—be recipients. Should a struck firm fail to comply with these rquirements, it for— feits its claim for benefits. Typcially, the employer plans require adherence to the provisions of all applicable public statutes as a precondition for eligibility. Hence, these programs provide a positive incentive to individual firms to follow established procedures, and, as such, assist in the possibility of securing settlements. The newspaper plan represents an exception. The only stip— ulation that it requires for benefits is that the employer must offer to arbitrate the issues in direct dispute. The fact, however, that the employer may legitimately include additional subjects——such as international union rules—— in the arbitration offer and still receive full coverage can serve to provoke greater hostility than was originally involved. Thus, in the newspaper situation, it is dif— ficult to assess the true significance of this single eligibility requirement. It is apparent that the various employer plans—- while similar in objective——differ significantly in method. The explanation for their variance rests with the fact that each program has been tailored to the requirements and 216 specifications of its particular industry. While only certain industries are suited for the introduction of such devices, those which are suitable require specially adapted programs to meet their specific bargaining sit- uation. The highly sucessful program of one industry might be a failure if transplanted in_toto to another. The Mutual Aid Pact operates effectively in the air— line industry because the industry has only twelve trunk~ line carriers--eight of which are participants. On all of the most profitable routes, there is usually more than one carrier. When one is struck, the direct competitors on these routes benefit directly from the misfortune on the struck carrier. Moreover, because the direct competitors differ on most routes that each carrier operates, many airline firms are beneifciaries when one suffers a work stoppage. The fact that there may be one other competitor on a particular route—~but seldom more than two——means that it is a relatively easy proposition to detect a direct wind- fall gain during a strike period. In those situations where— in the windfall formula is complicated by other factors, the supplemental payments serve as a residual to assure that all members receive a minimum amount of coverage. The railroad industry would find the airline plan unsatisfactory to its needs. Iniflkirailroad industry, there are seldom direct competitors on specific routes. A single city may be served by more than one railroad but, 217 more frequently, the train lines connect different cities. Therefore, it is unlikely that one line would sustain any notable windfall benefit in the event of a strike. When direct competition is present, it is generally restricted to several regional lines rather than being dispersed widely among many different carriers as is true in the airline industry. The plans of both the airline and railroad industries are based upon the principle of self insurance. There is no commercial risk borne by any independent insurer. Self insurance is feasible in these industries because many of their members are among the nationls largest corporate and financial entities. Furthermore, due to the relative importance of uninterrupted operations in both industries to the national economy, government intervention can often be assured in both threatened and real strike situations. Hence, in the airline and railroad industries, the pos- sibility that any particular dispute will actually erupt into an actual strike is at least partially mitigated. The newspaper industry, on the other hand, is composed largely of relatively smaller corporations and it can seldom rely upon any comparable degree of government assistance in the prevention or abbreviation of its labor disputes. Con— sequently, the newspaper industry has been impelled to place its program with an independent insurer who does assume a direct risk in underwriting the plan. The participants in 218 the newspaper program are, accordingly, relieved of any ob— ligation for further assessments other than that required in the form of the initial premium. Such is not the case in the airline and railroad plans. Those firms which voluntarily decide to become members of those industry programs assume themselves the risk of additional pay— ments which are key features of their strike subsidy devices. The newspaper industry would find the airline plan incompatible with its bargaining structure. Most towns that have daily papers are one publisher towns. If a strike occurs, no windfall benefits are reaped by any— one. In the lafiger cities which generally have more than one daily, bargaining is usually conducted on a citywide association basis. If one newspaper is struck, the com— petitors typically also shut down for the duration of the work stoppage. Here again, there is no opportunity for windfall benefits to accrue to a competitor. From this discussion, it is clear that the trans- ferability of these programs is quite restricted. Each device is molded to fit the characteristics and need of the particular industry. Thus, it becomes apparent that not only are the industries which are suitable for such plans few in number, but also the possibility that any of the presently established programs could be transferred elsewhere is remote. 219 Union Strike Subsidies Four union strike subsidies have been reviewed. Of this group, union strike insurance never progressed further than the conceptual planning stage. Strike assistance funds provided by public and private sources have not—— to date-—achieved any status of consequence due to their isolated application, preference for payment in kind rather than cash, and tendency to base eligibility more upon need than on right. Therefore, the devices that deserve attention are limited to two programs: unemploy— ment compensation payments to primary strikers and national union strike benefit plans. As a rule, unemployment compensation payments are unavailable to primary strikers. Three special ex- ceptions, however, do place such plans in the catagory of an active strike subsidy device. The most prominent case is in the railroad industry where primary strikers who have abided by the provisions of the prevailing labor statutes and union constitutional requirements are eligible for such funds as of their first day of unemployment. The two other situations involve the state laws of Rhode Island and New Ybrk. In both states,pmimary strikers may receive benefits, but only after long waiting periods have elapsed. Accordingly, it is obvious that it is only in several select and isolated instances that unemployment 220 compensation becomes entangled in labor disputes as a formal strike subsidy. It is also quite unlikely that the pre— cedents established by these few exceptions will contribute to a future wider involvement of such funds in strikes. With respect to the existing union strike benefit programs, their significance as a strike subsidy devices varies widely from union to union. Consequently, it is difficult to assess and to synthesize their role in any precise manner. The typical strike benefit program is quite modest in the amount given to individual strikers—— especially when compared to earnings that are sacrificed during a strike period. Eligibility for funds is typically conditioned upon the adherence by the strikers to pre- cribed regulations and requirements imposed by each national union. Moreover, most programs make funds available only after a specified waiting period has expired. The likeli— hood that those union currently without similar programs will in the near future adopt such programs is small. The bar- gaining conditions which have made strike benefit programs unneeded, impractical, or unadaptable in the past will not be substantially altered in the near future. Thus, the fact remains that with but a few notable exceptions the situations in which union strike benefit programs actually constitute meaningful strike subsidy devices are most com— monly found in the airline, newspaper, and railroad in- dustries. 221 The Public Interest Attention now needs to be directed toward the com- patibility of the strike subsidy devices discussed in this study with the nation's avowed labor policy of protecting and furthering the institution of collective bargaining. Prior to undertaking such an examination, it is again necessary to place the topic in perspective. In most bargaining situations, the issue of strike subsidization is either nonexistent or such a minor one as to be insigni- ficant. It is only in the airline, newspaper, and railroad industries that these mutual assistance programs have become both widespread in practice and substantial in amount. In these industries both labor and management rely extensively upon such devices. As previously discussed, it seems quite unlikely that these subsidies will Spread in any noteworthy manner beyond these present situations. Consequently, any challenge presented by strike subsidies to the functioning of the collective bargaining process will be confined to a relatively small se tor of our nation‘s industrial complex. Their limited applicability does not mean, however, that their evolution is of no consequence. Putting aside the assertions made by spokesmen for labor and management who seem to adhere to the belief that these devices are providential if employed by their side but heresy if used by the other, two viewpoints have become 222 prominent.5 One position maintains that the evolution of strike subsidy devices is but a contemporary manifestation of the historic principle of voluntarism that has character- ized the course of labor and management relations in this country. This thesis is that both labor and management in these industries have been confronted with an extremely unstable bargaining climate which has led to frequent threatened and actual strikes. In response, both sides have sought themselves to find methods of minimizing the rising costs of an actual strike. The public policy conclusion of this line of thought is that as long as the programs are privately financed and operated and are not arbitrarily used to exclude any who wish to participate. public inter— ference is undesirable. Strong support for this position has come from the first Labor Study Group6 of the Com- mittee for Economic Development. In its survey of labor policy in the United States, this distinguished panel concluded as follows: Another employer bargaining device that has achieved prominence recently is strike insurance or 5E. ., see HTeamwork Cuts Strike Losses,” Natigni§_ Business July, 1960), pp. 76-79 and John Barry, TrStrike Insurance,” American Federationist (March, 1961), pp. 17—20. 6 To review the membership of this group, see supra, Chapter VII, footnote 1A. 223 mutual aid of one kind or another in the event of a strike. Typically, this is a device to relieve pressure on a struck employer or employers whose competitors continue operations. Suggestions have been made to strip employers of this weapon. Here again, however, strike insurance for employers seems little different from a union strike fund or the payment of privately financed strike benefits to union members. We oppose efforts to curtail the use of private strike insurance whether by employers or unions.7 The voluntarism supporters are quick to state their unequivocal opposition to any involvement of public funds-- as unemployment compensation--as forms of strike sub- sidization.8 A position which conflicts with the indifference espoused by the voluntarism advocates has been raised by Secretary of Labor W. Willard Wirtz. In an address before the National Academy of Arbitrators in 1963, the Secretary expressed a fear that increasing public criticism over the failure of several major negotiation efforts to resolve differences without resorting to the use of the strike weapon was endangering the future of collective bargaining. One factor cited in the address as con— tributing to this growing unrest was the role of strike subsidies. He stated: 7Committee for Economic Development, The Public Interest in National Labor Policy, A REport by the Labor Stud Group (New York: Committee for Economic Development, 1961 , pp. 135—136. 81bid., p. 136. 224 It is more frequently true now than it used to be that a shutdown will hurt the public badly before it hurts one party to it or the other party enough that someone has to cry uncle. Strike insurance programs for employers are intensifying this factor. It has been a significant fact in the New YOrk newspaper case that during most of its first month the Printers were receiving up to $90.00 a week in strike benefits and the Publishers were sharing in a substantial strike insurance program. Similarly, an earlier editorial in Business Week lends support to Wirtz‘s position. The editorial stated: Strike insurance, if widely adOpted, would help management to hold out even longer. And it would inevitably lead the unions to countervailing devices that would let them match, or more than match, management’s ability to resist. Those who get hurt, of course, are the members of that long suffering group known as the innocent bystanders. The result will be to increase the pressure to find other methods of settling indus- trial disputes-—and ones that may not be agreeable to either companies or unions. The group that really needs strike insurance is the public. The proponents of this more cautious approach to the role of strike subsidies in collective bargaining have had little to say concerning the actual public policy recommendations that stem from their postion. The only specific action taken to date by any public authority against these programs was the 1956 ruling in New York by the State Attorney General, Jacob K. Javits, which 9w. Willard Wirtz, ”The Challenge to Free Col— lective Bargaining,” Proceedings of the Sixteenth Annual Meetings of the National Academy of Arbitrators (Washington; Bureau of National Affairs, 1963), p. 300. lO”Strike Insurance,I 1960), p. 202. Business Week (September 17, 225 held thai time writing cu istrike insuierkledolicies was ”contrary to public policy.” The ruling was not legally challenged and, given the recent precedents in the rail— road case, it is doubtful that such a ban would-—if tested-— be sustained. An evaluation of the public interest aspects of strike subsidy devices should begin with an initial statement concerning the prevalence of the practice. As discussed earlier, it is a conclusion of this study that these devices are a result of a limiting set of bargain- ing structure characteristics that serve both to explain their evolution and to preclude the likelihood of their spread elsewhere. It is very unlikely that reliance upon such programs will spread beyond their present boundaries. Therefore the fear expressed in the afore— mentioned Business Week editorial that these devices may become commonplace seems quite unfounded. The role assumed by these programs in the bargaining process itself needs also to be examined. Two inter- related issues are involved: the effect upon the will of the parties to resist and the resulting impact upon strike incidence. It is of course true that the knowledge of the availability of a strike subsidy device does to some extent reduce the prospective monetary losses associated with failure to resolve a dispute. The significance of this awareness, however, must not be overly exaggerated. To this writer, it is difTicult to _Jt _magine that any party to a labor dispute would seriously .de:"5a strike snibsidy deinxxe-—wlth iixseeligibilitgr L_J.. GODS conditions, limited benefits, and waiting period requires mentse~as a real alternative to be weighed against the benefdixs to b (I) chieved from uninterrupted operations. T63 w ff many other factors are invslvci in the actual negotiation process that are far more significant explanations of .4 se factors r 313 m (1) actual bargaining impasses. A few of th the nature and past histrmfiy 3f negotiations between the parties; the feelings of the union membership or the ! corporate leadership on certain key issues; the security of the union; the fear 0 is? of customer loyalties; the profit position of the firm; and, most importantly, the increasing ramplexitv of the bargaining topics that confront negotiations today. Moreover, since both sides in the airline, newspaper, and railroad industries are aware that the other party has access to such programs, there is rm; tacticai,enivantage derixmwi frdnaijk3.know- ledge of having later recourse to such plans if an accord Cannot be reached. The availability of assistance to both bargaining participants serves to offset its pre- strike importance. Thus, while recognizing that strike Subsidy devices exert some influence upon negotiations, it is doubtful that their effect upon the bargaining 227 resistance of the parties or upon strike incidence is more than of minor consequence, One final question remains to be discussed with respect to public policy and strike subsidization: do these programs tend to prolong a strike once one occurs? Since they only become operational in the event of an actual strike, it is logical-—but not conclusive——to deduce that a subsidized strike will last longer than a non-subsidized strikeo lengthy strikes have become some“ what Gammon in the newspaper industry; less so in the airline industry; and least so in the railroad industry, In the latter two industries, however, the greater in- volvement of the government in their disputes may be part of the explanation of the shorter strike durations, Moreover,the combination of increasingly complex bar- gaining topics and of complicating background forces created by accelerated technological advances and a persistently high rate of unemployment means that it is difficult to appraise definitively the impact of strike subsidies in actual strikes, Nevertheless, it does appear that the effect of these programs upon the course of any given strike is unpredicableo The situation envisioned by Secretary Wirtz in which the public is harmed before the strike participants are seriously affected is quite conceivable, Because of the existence of these devices, either party to a dispute could remain uncompromising in 228 its position for a longer period than would be otherwise rational. Hence, while it is debatable whether or not strike subsidies prolong strikes, it is clear that these devices contribute nothing to the actual resolution of differences once a strike has begun. Since neither a conclusive indictment nor a complete exoneration of the effects of these devices upon strike duration is feasible, the uncertainty implies to this writer that minimum public safegrards should be implemented, The increasing interdependency of our society—— alluded to in the discussion of the remarks made by Pro— fessor Chamberlain and Secretary Wirtz in the introduction-— means that public policy may not be able to remain indif- ferent to the rise of possible impediments to rapid settle— mentsc The stakes are too high, The future of collective bargaining in these industries~—already under attack from some quarters-—may well rest with the recognition by both labor and management officials of the need to place more reliance upon measures which encourage accommodation of differences and less upon economic weaponry; When differences do occur-~as they inevitably will from time to time-—emphasis should not be placed upon methods that reward bargaining intransigency, It is hoped that the role of strike subsidy devices is analogous to the effects of an anesthesia which temporarily relieves some of the pain associated with the disorder while prompt 229 corrective measures are undertaken; It is not the ob- jective of strike subsidy devices to numb the parties to economic losses and thereby lengthen the settlement processo To the degree that these programs assume an ancillary role of merely extending assistance to a struck party, they should be tolerated; to the degree that they hamper good faith bargaining, they represent a potential threat to collective bargaining and the public interest, Thus, the conclusion to be drawn is not that these private strike assistance programs should be banned; but, rather that they should be supervised, If future events 1 demonstrate that these devices do represent——as the Co E, D, Labor Study Group believes—-only a continuation of the tradition of voluntarism in labor and management affairs, the operation of these programs will in no way be impaired by the recommendations of this study, Conversely it may be that the fears of Secretary Wirtz and former Attorney General of New York Javits will be realized, Strike duration, and intransigent bargaining could become even greater problems in these industries than they have been in the past, Should this prove to be the case, the recom- mendations below will assist an enlightened public evaluation of the degree to which these programs contribute to such undesirable trends, 230 Recommendations Specific recommendations concerning the opera— tions of the individual devices were offered at the end of each chapter, Those point need not be repeated, The broader public policy recommendation are as follows: I. With respect to employer strike subsidy programs, minimal reports—~similar to those currently required by the C. A. B. of the participants in the Mutual Aid Pact—— should be required of all such mutual assistance arrange- ments, In the regulated industries, the reports should be submitted to the relevant regulatory body, In the non- ! regulated industries, the reports should be filed with the Bureau of Labor-Management Reports of the Department of Labor. Section 203 of the Landrum—Griffin Act (the employer reporting section) should be amended to require such action, These reports should be filed annually and they should contain the following information: the par— ticular disputes in which such programs were involved; the amount of benefits received by each struck participant during the year; and the amount contributed by each non— struck participant to the program during the year, These reports should be available for public inspection and evaluation either at the main office of the relevant regulatory body or at the public disclosure facilities of Of the Bureau of Labor—Management Reports in Silver Spring, Maryland. 231 20 Section 201(b) of the Landrum—Griffin Act (the labor organization reporting section) has already been interpreted by the Bureau of Labor-Management Reports to require that unions must annually report the amount paid— out in the form of strike benefitsi It would be more use- ful for evaluation purposes if the Bureau would require that these aggregate figures be broken down into the amounts actually paid in particular disputes, The Bureau should incorporate such a stipulation in its future annual report formso 39 The payment of unemployment compensation tenefits to primary strikers interjects the public sector into the realm of strike subsidization, The most notable and common characteristic of the other devices discussed in this paper is their private nature) Consequently, this writer is in agreement with the recommendation of the C, E, D, Labor Study Group on this matteri The state laws of New York and Rhode Island and the pertinent section of the Railraod Unemployment Insurance Act should be amended to eliminate the eligibility of primary strikers for such fundsi BI BLI OGPfiPHY ' U SELECTED BIBLIOGRAPHY I. General Books Chamberlain, Neil W. Social Responsibility and Strikes. New York: Harper and Brothers, 1953. Chamberlain, Neil W. and Shilling. Jan N. The Impact of Strikes. New York: Harper and Brothers, l95fl. (I) Knowles, K, G, J) Co Strikes: A Study In Industrial Conflict. Oxford: Basil Blackwell, 1952, pp. 120- 2; 232—3. Articles and Periodicals "And Profiting Prom It.h Labor (October 27. l962), p. H. Barry, John. HStrike Insurance: A Threat to Collective Bargaining,” American Federationist (March, 1961), pp. 17-20. Butler, Robert A. ”Taxation—-Federal Income TaX--Strike Insurance Agreements," Michigan law Review (February. l962), pp. M74-H98. Cohn, Lee M. HWirtz Sees Public Harm in Strike Fund Practice ” Washin ton Evenin‘ Star (Se tember 26, , . 1962), p, A-22. H Herling, John. ”The Strike Problem, _ Washington Daily News (January 10, 1963), p. 23. ”Need Asserted for Curbs on 'Inequalities‘ in Bargaining in Transport Labor Disputes,H Traffic World (February 9. 1963). pp. 31—35; 62—63. Ostrin, H. Howard. HStrike Insurance,” The Nation, Vol. 190 March 19, 1960), pp, 249~252. Pierson, Frank C. HRecent Employer All ances in Perspective,H Industrial Relations (October. 223 _/ }___ r (m L—J. ,__. ’ a 1" "U C __ I" r— ., PV' 3) a). 934 Riesel, Victor. "Industry Attempts to Establish Insurance Against Strike Losses,H Industrial Bulletin (November, 1960), pp. 14—17. Shils, Edward B. "Transportation's Labor Crisis,” Harvard Business Review (May, 1964), pp. 84—98. "Strike Insurance,” Business Week (September, 17, 1960), p. 202. ”Strike Insurance Widely Adopted,” New York Times (September 9; 1960), p. 10. ”Teamwork Cuts Strike Losses,” Nation‘s Business (July, 1960), pp. Z6-79. ”The Hidden Bargainers,H Free Labour World (May, 1961), pp. 196—200. Tuerkheimer, Frank M. HStrike Insurance: An Analysis of the Legality of Interemployer Economic Aid Under Present Federal Legislation,H New York University Law Review (January, 1963), pp. 126—1A7. Reports Committee for Economic Development. The Public Interest in National Labor Policy. A Report prepared by the Labor Study Group. New YOrk: Committee for Economic Development, 1961. Interviews Personal interview with Mr. Joseph Bloch, Head of the Industrial Relations Research Division of the Bureau of Labor Statistics, Department of Labor, Washington, D. G., May 2, 1963. II. Airline Industry Books and Pamphlets McNatt, E. B. Labor Relations in the Air Transport Industry. Urbana, Illinois: University of Illinois Institute of Aviation, 1958. I\) (A) kfl Articles and Periodicals "Airline Unions Ask C. A. B. Review of Decision on Carriers' Mutual Aid Pack," Daily Labor Report, No. 116 (June 1A, 1963), A—l to A-2. Alfino, Anthony P. HThe Airlines‘ Pact for Mutual Strike Aid,” Management Record, XXII (October, 1960), pp. ll—lfl; 33—34 (published by the National Industrial Conference Board). ”Examiner Holds Air Carriers‘ Amended Mutual Aid Pact Entitled to Approval,” Daily labor Report, No. 95 (May 15, 1963), pp. A—9 to A—ll. Gray, Horace M. HThe Airline Industry,” The Structure of American Industry. :3rd edition. Edited by Walter Adams. New York: Macmillan Company, 1961. Kahn, Mark L. ”Mutual Strike Aid in the Airlines,” 5 ; Monthly Labor Review :June. 1960), pp. 589-591. ' ”Mutual Strike Aid in the Airlines,” _ngers Presented at the 1960 Spring Meeting. Madison: Industrial Relations and Research Association, 1960, pp- 595-606. ”Patterson Gives Position on Mutual Aid Pact,” Aviation Daily, vol. 1A8, No. 16 (September 2A, 1963), p. 132. "Patterson Favors U. A. L- Withdrawal from Strike Pact," Aviation Daily, Vol. lug, No. A2 (April 29, 1963), p. 371. Perlman, David L. ”Airlines‘ Strike Pact invalidation Sought,H A.F.L.-C.I.C. News (December 8. 1962), pp.l and 3. HSeven Unions Form New Association to Counteract Airlines' Mutual Aid Pact,” Business Week_(June 18, 1960), p. 62. ”UAl.Soores Strike Pact,” Atlanta Journal (April 30, I963). ”UAL Sees Black Ink Ahead, Strike Insurance Opposed,” Buffalo News (April 26, 1963). ”Unions Ask C. A. B. Not to Approve Airlines' New Strike Insurance,” Business Week (April 26, 1963). |\) L10 ”United Air Head opposes Mutual Aid Strike Plan,” Wall Street Journal (April 26. 1963). p. 8. Unpublished Material Bosilevas, James M. HEmergency Board Created Under Section 10 of the Railway Labor Act in 1958 Gave Rise to the Airline Mutual Assistance Pact and the Compulsory Arbitration issue.” Unpublished M,A. Thesis, South— eastern University, Washington, D. C., 1960. ”Summary and Classification of Evidence of Mutual Aid and Assistance Among Labor Organizations,” An unpublished memorandum prepared by the counsels for the airline carriers for proceedings pursuant to C. A. B. Docket 9977, Undated. (Mimeographed-) Legal Briefs ; ”Brief to the Civil Aeronautics Board on Relal7 f American i 0 Airlines, Inc., Capital Airlines, Inc.. Eastern Air— /‘ ' ‘ r f) lines, Inc., Pan American Worli llde, IJS , Trans '- o - . — _‘ r a ,v_ > A o fl — o ‘_ I, World Airlines, Inc., and Jnlled Alrllnes. C- A. B. DOCKet NO. 997(, January :9 1339, HObjections of Association of l Transport Unions to Amended Aid Pact and Request for Hearing,” C, A. B. Docket No. 9977, April 12. 1 ”Joint Exhibits of the Airline Falti«s.“ vol l, c. A 5. Docket 9977, March 31, 1961. ”Joint Exhibits of the Airline Parties,“ vol. Il--Direct Exhibits, December 18, 1961. ”Joint Exhibits of the Airline Parties,” vol. lll——Ad- ditional Exhibits C, A. B. Docket No. 9977 (undated). HStatement of PositionH (by the Bureau of Economic Regulation), C. A. B. Docket N0. 9977, AGQUSL 13, 1962. HBrief of Union Parties to Hearing Examiner S. Thomas Simon in Opposition to Approval of Mutual Aid Pact, as Amended,” c. A. s, Docket No. 9977, November 29, 1962. | . . . e . . (Brief of the Carrier Parties to Examiner S. Thomas Simon,” C. A B. Docket No. 9977. November 29, 1962. . ) 237 ”Reply Brief of the Union Parties,” C. A. B. Docket No. 9977, January 18, 1963- ”Reply Brief of the Carrier Parties to Examiner S. Thomas Simon,” C. A. B. Docket No. 9977, January 18, 1963. ”Initial Decisions of Hearing Examiner S. Thomas Simon," C. A. B. Docket No. 9977, May 14, 1963, ”Petition of (Union Parties) for Review of Initial Decision of Hearing Examiner S. Thomas Simon,” C. A. B. Docket No. 9977, June 8, I963. ”Petition of the Bureau of Economic Regulation for Discre— tionary Review,” C. A. B. Docket No. 9977; June l0, 1963. ”Brief of the Bureau of Economic Regulation to the Board,” C. A. B. Docket No. 9977, October 10, 1963. ”Brief of the Carrier Parties to the Civil Aeronautics . 4 Board,” C. A. B. Docket No. 9977, October 10, 1963. ”Brief of Union Parties in Support of Board Disapproval of Mutual Aid Pact As Amended,” c. A. B. Docket No. 9977, October 10, 1963. ”Memorandum of the Carrier Parties,” C. A. B. Docket 9977, October 29, 1963. ”Opinion of the Board,H C. A. B. Docket No. 9977, Order No. E-2loAA (dated July lo, 196A). Interviews Personal interview with Mr. William J. Driscoll, Bureau Counsel, Bureau of Economic Regulation, Civil Aeronautics Board, Washington, D. 0., September A, 1963. Personal Interview with Mr. Charles A. Miller, Counsel for the Airline Carriers in Proceedings before the Civil Aeronautics Board, Washington, D. C., September 10, 1963. Personal interview with Mr. Ralph L. Wiser, Examiner for the Civil Aeronautics Board, Washington, D. 0., September A, 1963. 238 III. Railroad Industry Books and Pamphlets Kaufman, Jacob J. Collective Bargaining in the Railroad Industry. New York: King's Crown Press, 1954. Richardson, Reed C. The Locomotive Engineer l863—l963. Ann Arbor: University of Michigan Press, 1963. Articles and Periodicals Brons, W. J. ”Rails Strike Insurance TTailor Made',” Journal of Commerce (November 5, 1959), p. l. ”BRT sues LlRR.” Railway Age, vol. 149, No. ll (September 12, 1960), p. 65. Clabby, William B. ”Unions Harden Stand, Say Pubic Snubs‘ Roads 'Featherbed' Attacks,” Wall Street Journal (March 17, 1960), pp. 1, l4. Clabby, William B. and Jones, David R. ”Railroads Devise Plan to Hedge Their Risks If Unions Walk Out,” Wall Street Journal (July l3, 1959), pp. 1 and 12. ‘ . ”Insurance for Railroads Against Strike Losses Awaits Majority Vote of Raods,” Traffic World (July 18, 1959). pp. 29—30. ”Is ‘Bargaining’ So Sacred?” Railway Age, vol. 155, No. 6 (August 5, 1963), p. 42. H ”Most Railroads Apply for Strike Insurance, Washington Post, (August 20, 1959). ”Most Rails Back Strike Insurance Plan, Group Says,” Wall Street Journal (August 18, 1959), p. 26. ”New Focus on Strike Insurance,” Business Week (September 24, l960), p. 29. Nuccio, Sal R. ”Most Roads Hold Strike Insurance,” New York Times (March A, 1962), pp. 1, ll. ”Rail Insurance Gets Its First Test on an Unexpected Front,” Wall Street Journal (February 18, 1959). 238 III. Railroad Industry Books and Pamphlets Kaufman, Jacob J. Collective Bargaining in the Railroad Industry. New York: King's Crown Press, 1954. Richardson, Reed C. The Locomotive Engineer l863-l963. Ann Arbor: University of Michigan Press, 1963. Articles and Periodicals Brons, W. J. ”Rails Strike Insurance ’Tailor Made',” Journal of Commerce (November 5, 1959), p. l. "BRT sues LIRR,” Railway Age, Vol. 1A9, No. ll (September l2, 1960), p. 65. Clabby, William B. ”Unions Harden Stand,Eny Publicskums' ! Roads 'Featherbed' Attacks,” Wall Street Journal (March l7, 1960), pp. 1, l4. Clabby, William B. and Jones, David R. ”Railroads Devise Plan to Hedge Their Risks If Unions Walk Out,” Wall Street Journal (July 13, 1959), pp. l and 12. ”Insurance for Railroads Against Strike Losses Awaits Majority Vote of Roads,” Traffic World (July 18, 1959): PP. 29-30. ”Is ‘Bargaining' So Sacred?” Railway Age, Vol. l55. No. 6 (August 5, 1963), p. A2. ”Most Railroads Apply for Strike Insurance,” Washington Post, (August 20, 1959). ”Most Rails Back Strike Insurance Plan, Group Says,” Wall Street Journal (August 18, 1959), p. 26. ”New Focus on Strike Insurance,” Business Week (September 24, 1960), p. 29. Nuccio, Sal R. ”Most Roads Hold Strike Insurance,” New York Times (March 4, 1962), pp. 1, ll. ”Rail Insurance Gets Its First Test on an Unexpected Front,” Wall Street Journal (February 18, I959). 239 ”Railroads OK Strike—Loss Insurance,” Star (August 18, 1959). Washington Evening ”Railroad Strike Insurance Plan Explained to Buyers at A.M.A. Meet,” The National Underwriter (November 13, 1959), pp. 1—2. Seldin, Joel. ”Charges Railroads Spend Millions In Quest of Aid,” New York Sunday Herald Tribune (November 26, 1961). ”Strike Benefits Gave C. & N. W. 3-Month Profit Despite Revenue Drop,” Wall Street Journal (October 17, 1962), p. 21. ”Strike Insurance Plan Revealed,” Railway Age (July 20, 1959), pp. 13 and 55. ”Strike Pact?” Railway Age, Vol 146. NO- 20 (May 18: 1959): . p. 70. = ”Strike the Railroads—-Paralyze the Nation,” Railway Age, Vol. 155, No. 8 (August 19, 1963), p. 19. ”Union Tactics Compelled L. I. R. R. . . .,” Railway Age, Vol. 1A9, No. 17 (October 2A, 1960), p. 7. Reports Monroe, J. Elmer. A Review of Railroad Operations in 1959. Washington, D. C.: Association of American Railroads, 1960, p. 20. Unpublished Materials Association of American Railroads. A press release announc- ing the establishment of a ”Service Interruption” insurance policy. Washington, July 13, 1959. (Mimeographed.) . A press release confirming the adoption of the ”Service Interruption Insurance” program by the industry. Washington, August 17, 1959. (Mimeo— graphed.) The Imperial Insurance Company, Limited. ”Service Inter- ruption Policy,” Specimen Copy of the Original 1959 Version. 240 ”Service Interruption Policy,” Specimen Copy of the Renewal Version Railroad Labor Executives' Association. Press release No. 92 concerning an address by G. E. Leighty, Chairman of the R. L. E. A., to the 37th Convention of the Brotherhood of Locomotive Firemen and Enginemen. Washington, July 27, 1959. (Mimeographed.) Legal Briefs ”Brief on Behalf of Plaintiffs,” W. P. Kennedy (Plaintiff) vs. The Long Island Railroad Company, e§_alf (Defendants), January 17, 1962. ”Brief on Behalf of Defendant Railroads and the Association of American Railroads,” W. P. Kennedy (Plaintiff) vs. The Long Island Railroad Company, et;.al.(Defendants), March 16, 1962. . J ”Repllerief on Behalf of Plaintiffs,” W. P. Kennedy (Plaintiff) vs. The Long Island Railroad Company, e2 al., (Defendants), April 19, 1962. ”Reply Brief on Behalf of Defendant Railroads and the Association of American Railroads,” W. P. Kennedy (Plaintiff) vs. The Long Island Railroad Company, e§_al, (Defendants), June 4, 1962. ”Brief on Behalf of Plaintiffs--Appellants,” W. P. Kennedy (Plaintiff—Appellants) vs. The Long Island Railroad Company, et 31. (Defendant—Appellants),March 14, 1965. ”Petition For A Writ of Certiorari to the United States Court of Appeals for the Second Circuit,” W. P. Kennedy (Petitioner) vs. The Long Island Railroad Company, 32.3l- (Respondents), October Term, 1963. Legal Citations 319 F Supp. 2nd 366 (2d. Cir., 1963). 211 F Supp. A78 (S.D.N.Y., 1962). 32 U. S. L. Week 3138 (October 1A, 1963) (No. 312). 241 Interview Personal interview with Mr. Stanfield Johnson, Chairman of the Southeastern Railroad Conference, Washington, D. C., June 11, 1963 Letter Letter from Mr. Arnold B. Elkind, Counsel for the Brother— hood of Railroad Trainmen, New York, N. Y., July 9, 1963. IV. Newspaper Publishing Business Articles and Periodicals Burns, Robert K. ”Daily Newspapers,” How Collective Bargaining Works. New York: .Twentieth Century Fund, 1942. ”ControlharReports Strike Insurance Covers Earnings and Extra Costs,” The Guild Reporter (May 27, 1955), p. 1. ”Discloses $120,000 Insurance Payments in Haverhill Strike,” The Guild Reporter (September 28, 1962), p. l. ”Guild Must Build Defenses with $$, Officers Declare,” The Guild Reporter (March 27, 1959), p. 2. 1 ”Insurance Helps——A Little,‘ Business Week (December 22, 1962), p. 19. ”Insurance Payoff,” The Guild Reporter (December 28, 1962), p. 1. Kreps, Theodore J. ”The Newspaper Industry,” The Structure of American Industry. 3rd edition. Edited by Walter Adams. New YOrk: Macmillan Company, 1961. ”McClellan Staff Looks At 'Strike Insurance’,” Editor and Publisher (February 1, 1958), p. 16. Porter, Russell. ”Newspaper Guild Asks U. S. Inquiry,” New York Times (October 29, 1960), p. 27. "Publishers Continue Full Coverage Ignoring N. Y. Ban on Strike Insurance,” The Guild Reporter (August 2A, 1956), p. 1. ”Publishers Paid Eagle that Quarter—Million Out of Their Own Strike Insurance Funds,H The Guild Reporter (June 23, 1958). p. 1. ”Publishers‘ Strike Insurance Operations Revealed; $3 Million Are on Tap in Fund,” The Guild Reporter (September 11, 1953), pp. 1 and 3. ”Says Strike Insurance Against Public Policy,” Editor and Publisher (August 18, 1956), p. 66. ”Strike Insurance,” Editor and Publisher (September 19, 1953), p. 34. "Strike Insurance,H Fortune (April, 1955), p. 82. 1 "Strike Insurance: $1 Million Ace-in—Hole,' Oregon Labor Press (December 25, 1959), p. 6. "Strike Insurance Details Bared in Publishers Association Prospectus,H The Guild Reporter (March 27, 1959), pp. 1 and 2. U. S Congressional Record. Vol. 106, Part 2, pp. 2498—2499. Reports American Newspaper Publishers Association. Newspapers 1963. A Presentation to the Antitrust Subcommittee of the House Judiciary Committe, 1963. Unpublished Material ”MEmorandum from the Newspaper Publishing Premium Committee to the Members of the American Newspaper Publishers Association.” May 29, 1958. (Mimeographed copy.) HMemo: Re Strike Insurance,” from Mr. Max Pyle, Associate Director of Research and Information of the American Newspaper Guild (October 14, 1959). (Typewritten copy from the files of the American Newspaper Guild.) 243 Interviews Personal interview with an official of the American Newspaper Publishers Association, Washington, D. 0., September 11, .1963. [Permission to cite his name was denied.] Personal interview with Mr. Richard P. Davis, Associate Director of Research and Information, American News— paper Guild, Washington, D. 0., November 5, 1963. Letters and Memorandum Letter from Mr. Arthur B. Hanson, General Counsel for the American Newspaper Publishers AssociatiOn, Washington, D. 0., September 3, 1963. Letter from Mr. Herbert J. Miller, Jr. Assistant Attorney General, Washington, D. 0., December 30, 1963. Letter from the Honorable Wayne Morse, United States Senator, from Oregon, September 30, 1963. Memorandum from the Honorable Jacob K. Javits, United States Senator from New York, September 10, 1963. V. Miscellaneous Management Proposals Articles and Periodicals ”Aid Pact by Steel Poses Legal ISSUE.” New York Times (May 7. 1959). p. 26. Miller, Benjamin R. ”New Developments in Labor Relations.” A Discussion of Service Interruption Insurance Delivered before the Board of Governors of the Regular Common Carrier Conference, American Trucking Associa— tion, Inc., February 12, 1960. ”New California Company Plans to Sell Strike Loss Insurance to Farmers,” Business Week (May 20, 1961). ”Printshops Too.” The Guild Reporter (January 11: 1953): p. 7. Raskin, A. H. HSteel Companies Consider Pooling Profits in a Strike,” New York Times (May 7, 1959), pp. 1 and 27. 244 Stanton, Jacquelin. "Strike Insurance Plan Here," 4 Marysville (Cal.) Appeal-Democrat, (May 23, 1961). Stieber, Jack. ."Company Cooperation in Collective Bargaining in the Basic Steel Industry,” Labor Law Journal (July, 1960), pp. 614-621. "Steel‘s Mutual Aid Proposal,” Business Week (May 16, 1959): pp. 26-27. "Strike Insurance for Printers,” The Typographical Journal (February, 1963), p. 56. "Strike Insurance Is Offered California Farmers,” Wall Street Journal (June 15, 1961), p. 1. "Strike Insurance Plan Gets Test,” Business Week (June 28, 1958). p- 95. ”The Pressure is on MCDonald,” The Iron Age (May 28, 1959), pp. 70-71. "Tough Bargaining Ahead in Steel,” The Iron Age (May 7. 1959), pp. 56-57. Letters Letters from Mr. Robert E. Grindle, Assistant to the Director of the Industrial Relations Department of the American Trucking, Inc., Washington, Do 0., September 13, 1963. Letter from Mr. Wallace N. Flint, Vice President, National Association of Food Chainsy Washington, D. 0. October 5, 1963. VI. Union Strike Benefit Program Articles and Periodicals "ANG Borrows $500,000 to Pay Strike Benefits,” The Guild Reporter (January 11, 1963), p. 1. McKew, John J. HNational Union Strike Benefits--196l,” Management Record, XXIII (July-August, 1961) pp. 29-37. "Strikes,” AFL—CIO Collective Bargaining Report, Vol. 3, No. 11 (November, 1958), pp. 65072. 245 "Strikes: Myth vs. Reality,” reprinted copy from AFL—CIO American Federationist (March, 1963). "Unions Build Strike Power,” Nation’s Business (January, 1960), pp. 62-65. Reports United Steelworkers of America. Assistance Provided by Public and Private Agencies During the Steel Strike of 1959. A Report prepared by I. W. Abel, Secretary— Treasurer of the United Steelworkers of America. Pittsburgh: United Steelworkers of America, 1960. The 1959 Steel Strike. A Report prepared by The United Steelworkers of America. Pittsburgh: United Steelworkers of America, 1960. Personal Interviews Personal interview with Mr. Rubin Oswald, Economist in the Collective Bargaining Division of the Research Depart- ment of the AFL-CIO, Washington, D. 0., August 22, 1963. Personal interview with Mr. August Cantfil, Head of the Research Department of the Bureau of Labor—Management Reports, Department of Labor, Silver Spring, Maryland, August 26, 1963. Personal interview with Mr. Joseph D. Keenan, Secretary, International Brotherhood of Electrical Workers, Washington, D. 0., January 10, 1964. VII. Unemployment Compensation During Strikes Books Turnbull, John G., Williams, 0. Arthur, and Cheit, Earl F. Economics and Social Security. New York; The Ronald Press, 1957, Chapter 13. 246 Articles and Periodicals Lewis, Willard A. ”Unemployment Compensationin Labor Disputes,” Management Record, XXIII (January, 1961), pp. 2-6; 23-34. Public Documents U S. House of Representatives, Committee on Interstate and Foreign Commerce. Hearings on Railroad Retirement and Railroad Unemployment Insurance Legislation. 85th Congress 1st Session, March 14, 15, 19, 25—26, and 27, 1957. pp. 434-435, 463-465, and 483-485. Hearings on Railroad Retirement and Railroad Unemployment Insurance Legislation, 1959. 86th Congress, lst Session, February 3, 4, 5, 16, and 17, 1959, pp. 127—131—130, and 172-177. U 8. House of Representatives, Committee on Ways and Means. Hearings, Amendments to Social Security Act. 79th Congress, 2nd Session, June 3, 4, 5, 6, and 7, 1946. pp. 1323-1325, and 1402—1403. Letters Letter from Mr. Donald S. Beattie, Executive Secretary— Treasurer, Railway Labor Executives‘ Association, Washington, D. 0., April 21, 1964. VIII. Union Strike Insurance Articles ”Firm to Cover Strike Pay Loss,” Wilmington News (February 28, 1957). Sagot, Leonard M. ”Insurance Company to Sell Strike Insurance to Union Members,’ The Mailer (August, 1959), pp. 3-4. 247 Report ”Actuarial Examination of Feasibility of Work Stoppage Insurance for the United Employees Insurance Company.1 Report made by E. P. Higgins and Company, Accountants and Actuaries, Philadelphia, Pennsylvania, March 13, 1958. [Loaned from the law offices of Kilboran & Van Brunt, Wilmington, Delaware.] 1 Unpublished Material H ”Prospectus of the United Employees Insurance 00. Issued March 2, 1959. ”Re: Work Stoppage Insurance for Organized Labor." A thermofax copy of a form letter sent by Anthony Freitas, Secretary-Treasurer, United Employees Insurance Company, to ”All International Labor Organizations' (undated). The United Employees Insruance Company. ”Insurance Policy." Specimen copy of the original policy. [Loaned from the law offices of Kilboran and Van Brunt, Wilmington, Delaware.] Letters Letter from Mr. John Van Brunt, Jr., Attorney for the United Employees Insurance Company, Wilmington, Delaware, December 13, 1963. APPENDICES 248 APPENDIX A The following is a brief chronological listing of the major events in the development of the Mutual Aid Pact of the airline industry. October 30, 1958 Six airline carriers (American, Capital Eastern, Pan American, Trans World, and United) signed the original Pact which was effective retroactively to October 20, 1958. The Pact was based upon a ”wind— fall payments” concept wherein the in- creased revenue received by a Pact member attributable to a strike against another Pact member——less applicable direct expenses——would be returned to the struck carrier. ' November 3, 1958 The Pact was officially filed with the Civil Aeronautics Board (0. A. B.) and assigned the title of Agreement of C. A. B. 12633. May 20, 1959 The C. A. B. in a 4—1 vote issued its Order No. E—13899 which extended tenta— tive approval to the Pact subject to the deletion of a portion of a clause which related to the routing of traffic by a struck carrier to another Pact member. This approval was given without an evidentiary hearing having been held. March 22, 1960 The Pact members filed an amendment exe— cuted March 7, 1960, to broaden the scope of the Pact to provide payments to a struck carrier member for strikes called in the absence of the establish— ment of a Presidential Emergency Board if the struck carrier has in all reSpects acted in compliance with the Railway Labor Act. March 22, 1960 Nationa1,Braniff, and Northwest joined the Pact. 249 April 7, 1960 April 12, 1960 June 20, 1960 October 24, 1960 April 3, 1961 June 1, 1961 July 28, 1961 October 27, 1961 November 2, 1961 250 Continental joined the Pact. Objections to the amended Pact were filed with the C. A. B. by six air-1 line unions (Airline Pilots, Airline Dispatchers,Brotherhood of Railway and Steamship Clerks, Flight Engineers, International Association of Machinists and the Transport Workers Union) and the Association of Air Transport Unions (a combination of the AFL—CIO unions associated with the airline industry—— it has been inactive since November, 1960, and, according, it has dropped out of the proceedings). The C. A. B. ordered an investigation of the amended Pact (Order E—l5413). The Pact was renewed until December 31, 1961. In addition, an amendment was added which stated that withdrawal from the Pact by any member would be effective as of December 31 of any year after 1960. At least 60 days prior written notice was required of such an intention where— upon any other member could withdraw, effective the same date upon 30 days prior written notice. The C. A. B. approved the merger of Capi— tal Airlines with United Airlines under the "failing business” doctrine (Order E-16605). Capital merged with United Airlines. National advised the members of the Pact that it wished to withdraw as of that date; National, however, was advised by United that it could not withdraw until December 31, 1961, under the terms of the amended Pact. Continental gave notice to the other Pact members that it planned to withdraw from the Pact as of December 31, 1961. National filed notice of its intention to withdraw from the Pact as of Decem— ber 31, 1961. 251 March 26, 1962 The Pact members filed several amendments executed March 22, 1962, and effective December 31, 1961. The two most impor— tant additions pertained to the extension of coverage to strikes when a Presidential Emergency Board issued its report without Specific recommendations for settlement and to the establishment of the "supple— mentary payments" provision which guaran— teed that at least twenty—five per cent of a total carrier's "normal air trans— port operating expenses” would be covered in the event of a strike. May 14, 1963 The initial decision of the Hearing Examiner was issued upholding the validity of the ”windfall payments" and the ”supplemental payments" pro- vision of the Pact. July 11, 1963 The C. A. B. issued order E-19796 exer— cising its right of discretionary review of the Examiner's initial decision. October 29, 1963 The carrier parties filed a memorandum stating that a common agreement had been reached for establishing a single formula for the computation of payments under the Pact. July 10, 1964 The G. A. B. issued Order E—21044 in which it extended approval to the Mutual Aid Pact——in its entirety——for a three year period from the date of this deci- sion. The vote was three in favor, one dissenting in part, and one dissenting in total. 1With the adoption of the latter amendment, Continental Airlines rejoined the Pact as of this date. APPENDIX B The major portion of Part I of this paper was devoted to a discussion of the formal subsidy programs conceived by management in the airline, railroad, and newspaper publishing industries. Looking at the other side of the market in these same three industries, the following three tables are designed to determine the Specific national unions in these industries that provide strike benefits and to indicate the actual magnitude of these payments. The data was compiled from reviewing the annual LM-2 (for unions whose gross re— ceipts exceed $30,000 a year) and LM-3 (for unions whose gross receipts are less than $30,000 a year) financial re— port forms as required under the Labor—Management Reporting and Disclosure Act of 1959. These individual union reports are on file with the Bureau of Labor—Management Reports of the Department of Labor and were reviewed at their facilities in Silver Spring, Maryland on August 26 and 27 and Septem— ber 13, 1963. 252 253 ®. ®. ®. 1: 0m .C:b OHQIQm< :CHZD .AOLZF w.:oEHOLp:L >32HH:: w. I: u: 1: am .HSh .UCH mo .oznw< MCOEOLHE m>HpoEoooq oz: :05 (Gauge zmzfifldm 0:: do .oomm< .LOQZH "meekcflgEm hazaazz Anompoe. 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