The Maryland Drydock Co.

In the-Matter of THE MARYLAND DRYDOCK COMPANY and LOCAL No. 31 OF THE INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF-AMERICA In the Matter of THE MARYLAND DRYDOCK COMPANY and LOCAL No. 31 OF THE INDUSTRIAL UNION OF MARINE AND SHIPBUILDING WORKERS OF AMERICA Cases Nos. R-5212 and R-521 /,^,respectively.Decided May 11, 1543 Messrs. Earle K. Sh,awe and George W. Weasler, for the Board. Semmes, Bowen cC Se7nrnes, by Mr. Williaim'D. Macmillan; and Mr. William Purnell Hall, Jr., of Baltimore, Md., for the Company. Mr. M. H. Goldstein, of Philadelphia, Pa., for the Union. Mr. Robert Silagi, of counsel to the Board. DECISION AND ORDER STATEMENT OF THE CASE Upon petitions and amended petitions duly filed by Local No. 31 of the Industrial Union of Marine and Shipbuilding Workers of America, herein called the Union, alleging that a question affecting commerce had arisen concerning the representation of employees of The Maryland Drydock Company, Baltimore, Marylannd, herein called the Company, the National Labor Relations Board consolidated the petitions herein with other petitions filed by the Union covering other employees of the Company and provided for an appropriate hear- ing upon due notice before Will Maslow, Trial Examiner. Said hearing was held at Baltimore, Maryland, on April 14, 15, 16, and 17, 1943. The Company and the Union appeared and participated. All parties were afforded full opportunity to be heard, to examine and cross-examine witnesses, and to introduce evidence bearing on the issues. iCases Nos R-5211 and R-5213 49 N. L. R B No 105. -733 734 DECISIONS OF NATIONAL LABOR RELATIONS BOARD I For the purpose of decision the instant cases are hereby severed from Cases Nos. R-5211 and R-5213. At the hearing the Company moved to dismiss the petitions herein on the ground that the claimed unit in each is not appropriate, and the Union made several motions ,with respect to the segregation or combination of employees into appropriate units contingent upon possible 'rulings of the Board. The Trial Examiner referred the motions to the Board. For reasons appearing in Section III, infra, the motion of the Company is hereby granted and the motions of the Union are hereby denied. The Trial Examiner's rulings made at the hearing are free from prejudicial error and are hereby affirmed. On April 28 and May 1, 1943, re- sspectively, the Company and the Union filed briefs which the Board has considered. On May 4, 1943, oral argument was held before the Board in Washington, D. C. All parties appeared and participated. On that day the Company filed a memorandum of law which the Board has considered. Upon the entire record in the case, the Board makes the following : FINDINGS OF FACT 1. THE BUSINESS OF THE COMPANY The Maryland Drydock Company is a Maryland corporation en- gaged primarily in the repair of ocean-going vessels. The Company operates its main shipyard at Fairfield in Baltimore, Maryland, where it employs approximately 9,000 employees, about 8,500 of whom are production and maintenance employees. The Company also has an auxiliary unit known as the Pratt Street Works in the City of Balti- more, where it employs about 500 employees. Both plants are con- ducted as an integrated' operation. During the calendar year 1942, the aggregate value of all materials used by the Company at its ship- yard in Fairfield was in excess of $10,000,000, of which approximately 75 percent was delivered to said yard from points outside the State of Maryland and more than 75 percent of which was used in the repair .of ships for the United States Government. During-the same period the aggregate amount billed by the Company for such work exceeded $25,000,000, of which more than 50 percent was billed in respect of work on ships for the United States Government. The Company admits that it is engaged in commerce within the meaning of the National Labor Relations Act. II. TIM ORGANIZATION INVOLVED Local No. 31 of the Industrial Union of Marine and Shipbuilding Workers of America, affiliated with the Congress of Industrial Or- ,ganizations, is a labor organization admitting to membership em- ployees of the Company. T'H1; MARYLAND DRYDOCK COMPANY 735 III. THE ALLEGED APPROPRIATE UNITS Beginning on September 29, 1937, a series of meetings were held between officials of the Company and a committee representing the Baltimore Marine Council , an affiliate of the American Federation of Labor. These conferences culminated in a contract , executed on January 26, 1938, which covered "all the employees of the Company,, except office employees and employees in a supervisory capacity." inr the latter part of 1938, the Union petitioned the Board for a certifica- tion of representatives of the employees of the Company. As the result of a consent election held on December 7, 1938, the Union was. designated as the bargaining agent of the Company's then contingent, of approximately 1,200 employees . On February 17, 1939, a contract', was entered into between the Union and the Company which granted the Union recognition as the exclusive collective bargaining represent- ative of "all of the Company 's employees except those regularly on a salaried basis; engineering , office and clerical employees; guards; jani- tors; and employees (whether salaried or hourly-paid) who spend the majority of their time supervising other employees ." This agreement was for a term of 1 year and was to continue in force from year to year thereafter, unless- terminated or amended upon 30 days ' written notice by either party. Subsequently, new contracts were negotiated annu- ally which provided for the identical bargaining unit. The latest of these contracts was executed on June 17 , 1942, and will remain in effect until June 23, 1943. The contract presently in force contains a maintenance -of-member- ship clause. As part of the procedure for establishing a list of union members, the Union supplied the Company with a certified list of names of employees alleged to be members in good standing of the Union. The Company thereupon notified each employee whose name appeared on the list of the Union's contentions . A- dispute arose as to whether temporary supervisors who devoted all their time to super- vision were included within the bargaining unit as defined by the con- tract. On October 30, 1942, the question was referred to an arbitra- tion board headed by the chairman of a local panel of the National War Labor 'Board. The arbitration board upheld the Company's contention and ruled that temporary supervisors were not a part of the bargaining unit since they spent more than 50 percent of their time in,supervising other employees. The petition in Case No . R-5212 seeks a unit comprised of tempo- rary supervisors and working leaders. The duties of these employees are as follows : Temporary supervisors , of whom there are about 450, are recruited from production employees with the rank of either first or second class mechanics, or in rare cases, with only the basic rating, of helper or handyman. For the supervision they perform, these em 736 DE,CIsIONS OF NATIONAL LABOR RELATION'S BOARD ployees receive , premium of 10 cents an hour. The classification of temporary supervisor is awarded on a day-to-day basis by the foreman of a particular department. While temporary supervisors nominally are appointed from day to day, actually the same individuals, as a general rule, are retained as temporary supervisors for indefinite pe- riods. Although in normal peacetime operations, temporary super- visors act somewhat in the nature of "working foremen," it is undis- puted that they presently spend all their time supervising and instruct- ing and assist only in rush or difficult jobs. The typical temporary supervisor today supervises the work of about 10 to 14 men. His iden- tification badge is different from that of ordinary employees. He has the authority to report loafing or incompetency of the men he.super- vises and io make recommendations as to their promotion to the fore- man. He is often consulted by the foreman about the aptitudes of the individuals under him. The Company employs about 170 working leaders. These employees, before the war, spent most of their time in supervision and went back to work with their tools in slack seasons. Since the war they spend all their time in supervision. A, working leader supervises the work of from one to six temporary supervisors, although occasionally a working leader will have only a gang of half a dozen men and no temporary supervisors under him. A working leader, unlike a tempo- rary supervisor, almost always has the basic rating of a first class mechanic. They likewise are paid on an hourly basis- but receive no bonus for supervision. The difference between the working leader and the temporary supervisor varies with the department. In peacetime, only those with the rank of working leader or higher are considered to be. part of the permanent supervisory staff. The petition in Case No. R-5214 seeks ,a unit of the 37 leaders em- ployed by the Company. A leader is a full-time supervisory employee who is forbidden by the existing union contract from working with tools. Of the present group, 21 leaders are hourly paid employees and 16 are on a salary basis. There is, however, no difference in function between them. Leaders are superior in rank to temporary supervisors and working leaders and are inferior to assistant foremen and fore- men. In some departments, where there are no assistant foremen, the leader acts as such. There are roughly two leaders to a depart- ment. No one below the rank of foreman is permitted by the manage- ment to hire, discipline, or discharge employees. However, all ranks of supervisors make recommendations to the foreman about the apti- tudes of the men under them; thus leaders may make recommenda- tions regarding working leaders, and working leaders may make rec- ommendations regarding temporary supervisors. A foreman may promote or demote a temporary supervisor without the concurrence THE MARYLAND DRYDOCK COMPANY 737 of the manager of the shipyard, but the latter's approval is required' for any change in status of an individual higher up in the ranks of the supervisory hierarchy. At the oral argument. it was conceded that these three groups exercise supervisory functions. , The Union urges that these categories of supervisory employees should either be merged with the existing contractual unit of non- supervisory production and maintenance' employees which the Union represents or be established as two separate appropriate- units: (1) temporary supervisors and working leaders and (2) leaders. The Company asserts (1) that these three groups of supervisory personnel are not "employees" within the meaning of the Act, (2) that temporary supervisors and working leaders should not be grouped in the same unit because the latter-exercise supervision over the former, and (3) that none of the groups can be included in the present contractual unit or a separate unit in these cases because the labor organization seeking to represent them also represents the employees they supervise. We have decided to dismiss the petitions in these cases. The peti- tioning union relies on the authority of the Union Collieries and God- chaux Sugar cases.2 An examination of the majority opinions in these cases reveals that they were not based on the view that units of foremen were desirable or salutary or would effectuate the purposes of the Act, but solely on the legal premise that supervisors were necessarily em- ployees within the meaning of the Act and therefore, constituted a "unit appropriate for the purpose of collective bargaining," within the meaning of Section 9 (b). On this question of law, the Board was divided and since as a result of the decision the Board -has been repeatedly asked to certify units of foremen in industries where such units previously did not exist, we have felt it incumbent upon us to reexamine the legal premise upon which these decisions rest. So far as the reported decisions of the Board indicate, it was not until 1942, when the Act was in its seventh year, that the Board was called upon to decide whether or not a unit composed entirely of super- visory employees was a unit appropriate for the purposes of collective bargaining as described in Section 9 (b). The necessity for deciding this question arose because of the duty imposed upon the Board by Section 9 (c), providing in part, "Whenever a question affecting com- merce arises concerning the representation of employees, the Board may investigate such controversy and certify . .." (Emphasis sup- plied). In the judgment of the majority of the Board the -answer to that question turned upon whether or not supervisors were neces- 2Mattes of Union Collie)ies Coal Company, 0a1moot, Pennsylvania and Mine Officials, Union of America (Ind ), 41 N L R. B 961, 44 N L R B 165; Matter of Godchaux Sugais, Inc. and United Sagan Wmhers, Local Industrial Union No 1186, C. I. 0., 44 ° N L R. B. 874 738 DECLSffONS OF NATIONAL LABOR RELATIONS BOARD sarily to be deemed employees for the purposes of the Act. In de- termining this question, the majority of the Board relied primarily upon the statutory definition of "employee" in Section *2 (3), the relevant language of which reads as follows : "The term `employee' shall include any employee . . . but shall not include any individual employed as an agricultural laborer, or in the domestic service of any family or person at his home, or any individual employed by his parent or spouse." _ Because of the broadness of this language, and the fact that supervisors were not included among the three enumerated ex- ceptions the inference was drawn that Congress must therefore have intended to cover persons employed in supervisory capacity. There is nothing, however, in the committee reports or in the debates in the House and Senate which would indicate that this specific problem was ever considered by the' Congress. Moreover, although there are decisions of the Circuit Courts of Appeals holding that the Board did not err in finding that the discharge of foremen under particular cir- cumstances was a violation of Section 8 (3),s we have found no Court decisions which hold that units of foremen must be recognized by the Board as being appropriate for collective bargaining. Consequently, the question is still an open one. - While it may be conceded that the question is close, we fire no longer convinced that from the mere determination that a supervisor is an employee it follows that supervisors may constitute appropriate bar- gaining units. Such a theory seems logically to impel the conclusion that all employees not specifically omitted from this subsection fall also within Section 9 (b). The Board would then have to hold in each case that the highest corporate officials, including even presidents and general managers, were entitled to be included in appropriate collec- tive bargaining units, since everyone associated with a corporation, except the stockholders and the board of directors, is an employee. Such a construction of the Act ignores the fact that it was passed against the background of an industrial society in which the vast majority of business enterprises are conducted in the corporate form. While the maxim inclusio unius est exclusio alterius is a well- established canon of statutory construction, the courts have recognized 8 N. L. R. B. v. Skinner and Kennedy Statsconery Co., 113 F. (2) 667 ( C. C. A. 8) ; N. L. R. B. v. American Potash Company and Chemical Corp . 98 F. (2d) 448 (C. C. A. 9). Section 8 ( 3) makes it an unfair labor practice for an employer to discourage union mem- bership by discrimination in regard to hire and tenure of employment . Thus - the dis- charge of any employee , whether or not he is a union member, or eligible for membership in a union , for the purpose of discouraging union membership has been held violative of this subsection . Mooresville Cotton Mills v. N. L. R. B., 94 F. ( 2d) 61 (C. C. A. 4) ; Rapid Roller Co. v. N. L. R. B., 126 F. (2d) 452 (C. C. A. 7). THE MARYLAND DRYiDOCK COMPANY 739 its limitation, where its application leads to results so absurd as to make'it unreasonable to believe that they were intended by Congress.4 Thus the failure of Congress to expressly include "subordinate, officials" within the definition of employees in Section 2 (3),5 particu- larly when viewed in conjunction with the broad definition of "em- ployer" in Section 2 (2) of the Act, indicates that determination of this type of question is a function reserved to, the administrative dis- cretion of the Board. This conclusion -is supported moreover by the provisions of Section 9 (b) which render it incumbent upon the Board to consider whether the unit alleged to be appropriate in each case will insure to employees ,the full benefit of their right to self -organiza- tion and to collective bargaining and otherwise effectuate the policies of the Act (emphasis supplied). In making this determination it is relevant for us to inquire into the status in the managerial hierarchy of the personnel claiming to be an appropriate unit. It is likewise relevant for us to inquire as to the effect that their inclusion will have upon the exercise of the rights of self-organization and collective action of the production employees, and it is further relevant for us to inquire whether our determination in any particular case that supervisory employees constitute a unit appropriate for collective bargaining will so compromise the status of such employees as to result in disruption of the practice of collective bargaining rather than industrial peace. 4 See Church of the Holy Trinity v. United States, 143 U. S. 457 . In this case it was held that a contract under ' which a minister of the gospel entered the United States to accept a call from a church congregation although within the literal language of the contract labor laws, was not subject thereto since Congress could not have intended such a result The court said : It must be conceded that the act of the corporation is within the letter of this section, for the relation of rector to his church is one of service , and implies labor on the one side with compensation on the other . Not only are the general words labor and service both used , but also, as it were to guard against any narrow inter- pretation and emphasize a breadth of meaning , to them is added "of any kind ;" and, further, as noticed by the Circuit Judge in his opinion, the fifth section , which makes specific exceptions , among them professional actors, artists , lecturers , singers and domestic servants, strengthens the idea that every other kind of labor and service was intended to be reached by the first section . While there is great force to this reasoning, we cannot think Congress intended to denounce with penalties a trans- action like that in the present case. It is a familiar rule , that a thing may be within the letter of the statute and yet not within the statute , because not within its spirit, nor within the intention of its makers This has been often asserted , and the reports are full of cases illustrating its application . This is not the substitution of the will of the judge for that of the legislator , for frequently words of general mean-' ing are used in a statute , words broad enough to include an act in question, and yet a consideration of the whole legislation , or of the circumstances surrounding its enactment, or of the absurd results which follow from giving such broad meaning to the words , makes it unreasonable to believe that the legislator intended to include the particular act. 5 The Railway Labor Act, in which subordinate officials are expressly termed "employees," referred to in the first majority opinion , 41 N. L R. B. 961 , footnote 4, in no way sup- ports the inference that the National Labor Relations Act is to be similarly construed. 531647-43-vol. 49-48 r 740 DECISIONS 0F NATIONAL LABOR RELATIONS BOARD We are not unmindful of the argument advanced by counsel for the Union that the development of mass production-industry has stripped foremen of much of the plenary authority and managerial discretion which was theirs in an earlier day. Nor are we unaware that the impetus toward foremen organizations stems largely from a desire to reestablish the bargaining power of foremen commensurate with the growth of employee self-organization. Likewise, it may be con- ceded that the position of supervisors would be improved if the pro- visions of the Act were extended to facilitate collective-bargaining by these groups. We are now persuaded that the benefits which super- visory employees might achieve through being certified as collective bargaining units would be outweighed not only by the dangers in- herent in the commingling of management and employee functions, but also in its possible restrictive effect upon the organizational free- dom of rank and file employees. It is not necessary to elaborate at length on either of these points. The very nature of a foreman's duties make him an instrumentality of management in dealing with labor. The duty of supervision with which he is principally charged implies a delegation of authority with respect to the selection, promotion, and discharge of the workers in his section. Although the delegation of -authority is no longer plenary in modern factories which have a central personnel system, there is no doubt that even the function of advising or recommending action with regard to personnel is sufficient to command respect and instill fear in the minds of subordinates. To hold that the National Labor Relations Act contemplated the representation of supervisory employees by the same organizations which might represent the sub- ordinates would be to view the statute as repudiating the historic prohibition of the common law against fiduciaries serving conflicting interests.' This Board has consistently taken the position that the actions of supervisory employees in encouraging or discouraging employee organization are attributable to management. It has been ably argued before us that in these cases the Board infers from the evi- dence that such interference by supervisors is merely it translation IIn Mernhaid v Salmon, 249 N Y 458 , 164 N . E. 545 ( 1926 ), Chief Judge Cardozo epitomized the legal obligations of a fiduciary Many foi ins of conduct permissible in a workaday world for those acting at arm's length , ale foibidden to those bound by fiduciary ties A trustee is held to some- thing stricter than the morals of the market place Not honesty alone, but the punctilio of an honor the most sensitive, is then the standard of behavior. As to this there has developed a tradition that is unbending and inveterate . Uncompromis- ing rigidity has been the attitude of courts of equity when petitioned to undermine the rule of undivided loyalty by the "disintegrating erosion" of particular exceptions. In oui opinion , one oho represents another in contractual negotiations O Wes no lesser duty to his principal THE MARYLAID DRYDOCK COMPANY 741 and effectuation of. the -policies of higher management , and that con- sequently a contrary rule might be appropriate where it appears that supervisors are dealing with management at arm's length. But im- putation to management of liability for the conduct of its supervisors arises not from the mere inference that foremen reflect company policy but also by virtue of the fact that full -fledged supervisors con- stitute management in the eyes of their subordinates . If they who are in a position, to impose penalties or dispense favor were free to participate in the choice of collective bargaining agents by their sub- ordinates, that full freedom of choice which the Act protects would soon disappear . Even in our earlier cases , the Board recognized the danger inherent in the organization of supervisors , and sought to protect the ordinary employees by refusing to sanction the establish- ment of bargaining units containing, both supervisors and their sub- ordinates . We are not convinced , however, that this measure affords adequate protection of the rights of the vast bulk of employees, whom the Act was specifically designed to protect . For, although super visors may nominally constitute a separate bargaining unit, it is clear that they may-as they did in the case at bar-affiliate with and designate as their representative the same union which represents their subordinates. We recognize that the practice of various craft unions, notably in the printing and maritime trades, has been to admit foremen to membership and to include them under collective agreements. This practice arose long before the adoption of the National Labor Rela- tions Act and operates quite independently of the sanction of • its provisions . While it may be assumed that the long history of union affiliation by foremen engaged in these crafts has brought acconmno- dation by both employers and employees , the Board has almost in- variably excluded foremen from bargaining units, even in these trades . In so doing, however, we have not intended, and we do not now intend to disrupt the rights which such supervisors may have obtained under collective agreements. The legislative history of the National Labor Relations Act indi- cates that the conditions which prevailed in the mass production in- dustries were the primary factors which led to its enactment. In these industries it was traditionally recognized by all parties that the interests of foremen lay predominantly with the management groups. We are of the opinion that in the present stage of industrial administration and employee self-organization, the establishment of bargaining units composed of supervisors exercising substantial man- agerial authority will impede the processes of collective bargaining, disrupt established managerial and production techniques , and mili- tate against effectuation of the policies of the Act. To the extent that our decisions in the Union Collieries , Godchaux Suga-, and sub- 742 DECISIONS' OF NATIONAL LABOR RELATIONS BOARD Sequent cases are inconsistent with this opinion, they are hereby over- ruled. We accordingly find that the units herein proposed are not 'appropriate units for collective bargaining within the meaning of Section 9 (b) of the Act and we shall therefore dismiss the petition. ORDER, Upon the basis of the foregoing findings of fact and upon the entire record in the cases, the National Labor Relations Board hereby orders that the petitions for investigation and certification of repre- sentatives of employees of The Maryland Drydock Company, Balti- more, Maryland, filed by Local No. 31 of the Industrial Union of Marine and Shipbuilding Workers of America, in Cases Nos. R-5212 and R-5214 be, and they hereby are, dismissed. CHAIRMAN HARRY A. MILLIS, dissenting : I disagree with the policy established by, the majority in this decision that supervisory employees do not constitute units appro- priate for collective bargaining. Reduced to its basic terms, the majority opinion (1) admits that supervisors are "employees" within the meaning of the Act; (2) asserts that it is within the administra- tive discretion of the Board to determine, in each case, whether units of supervisory employees will insure to employees the full benefit of their right to self-organization and otherwise effectuate the policies of the Act; but (3) concludes that all supervisory employees through- out industry, with the possible exception of those who have a recog- nized history of union organization and collective bargaining behind them, may not constitute units appropriate for collective bargaining. With the first two propositions I agree.2 But I perceive no warrant ' This dissent was filed on May 20, 1943 . At the time of the issuance of the decision on May 11, 1943 Chairman Millis stated : "While I agree with some of the observations and conclusions contained in the majority opinion , I emphatically reject others , also the general position that, without regard to organizational set-up and relationships , petitions for "foremen's" units will not be entertained and acted upon by this Board. Inasmuch as the majority desires to issue this decision , at once I shall later prepare and file a dis- senting opinion." 2 It is to be noted that the dissenting opinions in the Union Collieries (41 N. L. R. B. 961 and 44 N. L. R.,B 165) and Godchaux Sugars (44 N. L. R. B. 874) cases , by one of the members of the present majority, have been interpreted as denying the first proposition above stated . See, for example, Chester Wright's Labor Letter, March 27, 1943. However, a careful examination of the text of these dissents reveals that this interpretation is erroneous. The assertion that the majority's findings of supervisory units in those cases were based "solely on the legal premise that supervisors were necessarily employees within the meaning of the Act" is plainly not correct. ' The majority in those cases found not only that they were "employees," but, as the opinions expressly state, that the units there found were appropriate within the meaning of Section 9 (b), I. e., that they would insure to employees the full benefit of their right to self-organization and collective bargaining and otherwise would effectuate the policies of the Act. In subsequent cases the Board dismissed several petitions involving supervisors , finding that the proposed units did not satisfy these criteria for various reasons. See Matter of Stanley Company of America, Varner Bros:, Warner Bros . Circuit Management Corp., Warner Bros . Theatres, Inc. and Circuit Settlement Corporation and United Office & Professional TPoncaii of America, t TIDE MARYLAND DRYDOCK COMPANY 743 in the 'Act, the history and experience of industrial relations of which we may take notice, or in the facts of this case as disclosed by the record, for concluding, as a matter of policy, that the protection by this Board of the right to collective bargaining under the 'Act should be denied to supervisory employees. Concededly, the Act does not prohibit establishing units of super- visory employees, and as the majority points out, there is nothing "in the committee reports or in the debates in the House and Senate which would' indicate that this specific problem was ever considered by the Congress." It follows, therefore, that it is within our power to find that units of supervisors are appropriate. Adherence to the mandate of the Act consequently requires us "in each case" to decide the appropriate unit with due regard to the statutory tests, which it is our duty to apply, of effectuating the broad policies of the Act and insuring full self-organizational rights to employees. Mani- festly to engraft upon the Act an amendment which denies to a sub- stantial segment of employees as a class the protection vouchsafed therein to all "employees" is not within the permissible bounds of administrative discretion. It is administrative legislation. The majority fears the possible harmful effects of organization and collective bargaining by foremen, in "dangers inherent in the com- mingling of management and employee functions." They foresee disruption of "established managerial and production techniques," and a "possible restrictive effect upon the organizational freedom of rank and file employees." We are told that it "is not necessary to elaborate at length on . . . these points," apparently because they are so self-evident. We are not referred to any data which demonstrate the "inherent" dangers, the "disruptive"' influences, or the "possible restrictive effects" which are present in or will flow from the recogni- tion of supervisors as appropriate bargaining units. In an effort to discover these dangers envisaged by the majority, I have examined the history of the trade union movement 3 and testimony recently affiliated with the Congress of Industrial Organizations, 45 N. L. It. B. 625; Matter of Boeing Aircraft Company and Association of Aircraft Supervisors of Seattle, Washington, 45 N. L. R. B. 630; Matter of Studebaker Corporation and International Union, United Automobile, Aircraft & Agricultural Implement Workers of America C. 1. 0. and Stude- baker Salaried Employees Independent Union, 46 N. L. R. B. 1315 3 Organization and collective bargaining by supervisory personnel have long been accepted in the maritime and railroad industries , in the former for more than 40 years. The 3 leading maritime unions of licensed officers in 1941 had a reported combined mem- bership of 13,000, and their agreements covered in 1939 about 38 percent of salt-water, Merchant Marine tonnage . Twentieth Century Fund, How Collective Bargaining Works, 1942; pp. 960, 963, 938 ; Maritime Labor Board , Report to the Prsident and to the Con- gress, March 1, 191,0, p. 106 . Although it is common knowledge that the licensed per- sonnel aboard ship exercise substantially more powers as representatives of management than the ordinary foremen in mass production industries , I find no discussion in labor relations literature to indicate that serious issues have arisen from their recognition for collective bargaining purposes. With respect to the railroad industry , there are purely supervisory unions and unions which represent supervisors and their subordinates but 744 . DECbSSONS OF NATIONAL LABOR RELATIONS BOARD given before the Committee on Military Affairs of the House of 'Representatives. These sources, as well as personal experience and observations, convince me that the assumptions and prophecies of the majority are not supportable. Should any of the dire consequences predicted by-the majority follow from the organization of supervisors, they would be prob- lems to be met by labor, through suitable forms of organization ; by management, through proper discipline of its supervisory and pro- duction forces; and if necessary, by the National Labor Relations Board, by its determination of appropriate units and its findings and orders against unfair labor, practices. The constructive solution of such problems, should they arise, would by no means be impossible. Thus, I believe that there is a solution to the delicate problem of maintaining necessary and proper authoritative relations between supervisory and subordinate employees, without sacrificing the right of either group to bargain collectively under-the Act. If, in the particular case, the Board deems it essential to the effectuation of the policies of the Act to segregate- supervisors from subordinates in a separate bargaining unit, it may go further and refuse to certify a union as the representative of supervisors unless'that union takes proper steps to insure that the line of demarkation between bargain- ing units shall be preserved within the organization itself. I believe that, in the interest of effectuating its determination as to the bound- aries of the appropriate unit; the Board may in its discretion require that supervisory and subordinate groups shall be independent of one another in union meetings, in the formulation of demands upon man- agement, and in the approval or disapproval of tentative agireements.4 ,Hence, I would be inclined to concur in the dismissal of the petitions in this particular case if the decision to do so- were predicated upon the petitioning union's failure to make proper provision for the organizational autonomy of the supervisors whom it seeks to repre- sent. I cannot agree, however, that the policies of the Act are in any way effectuated by denying to this large and important group of "employees" under any organizational conditions the most essen- tial of the rights guaranteed them in Section 7. in separate bargaining units. The National .Mediation Board has recognized the right of these employees to representation , their organization has raised no unusual problems. See Industrial Relations Division, United States Bureau of Labor 'Statistics, Memorandum No. 7, Union Menibership and Collectite Bargaining by Foremen, April 1943. ' If the grant- III, of collective baigaming rights to supervisory employees in the railroad industry had pnoyed unworkable, one would suppose that the Railway Labor Act would have peen amended to exclude "subordinate officials" from its coverage why is not the experience in these fields persuasive that a parallel development, within the framewoik of the Act, is feasible in the mass production industries? 4See clatter of R G. LeTourneau, Inc and Lndependent Induct,nal iro)Ae,s' Union, 36 N L R B 774; Matter of J. Greeneba,rnn Tanning Company, Plant ft3 and Ainerican Leather Workers Union, 49 N. L R B. 946, where the Board iefused, to certify organizations deemoi to be the successors to company-donunated organizations THE MARYLAND RRYDOCIi- COMPANY 745 In'reaching its conclusions, the majority fails to give proper weight to the distinction between the two essentially different aspects of the position of foremen. On the one hand, they are agents of manage- ment, carrying out (although not formulating)6 management policies in the plant, mine or shipyard. As such they act for management at the first step in the handling of grievances of rank and file employees; but they do not, in most cases, make decisions on grievances except in minor matters .6 They have no active part in the collective bargain- ing conferences between management and the union of rank and file.' In fact, one of their grievances is the lack of provision for confer- ences between management, foremen, and men on problems affecting all three groups." On the other hand, they are employees, in groups running into hundreds and even thousands in the great war industries, with serious problems of their own, as employees, in their -relations to the management. It is these problems, not whims, which have led to the current movement by these men for self-organization and col- lective bargaining. Parallel movements are found elsewhere, as in Great Britain for example. 0 5Indeed, in this case the supervisors petitioned for do not even participate in the weekly meetings of foremen 0 See the description by foremen of their jobs, including grievance procedures, in Heal- tugs before the Committee on Military Affairs, House of. Representatives, 78th Cony, 16t Sess, on II R 2239, H R 1742, H R. 1728, and H. R. 992, Full Utilization of Manpower, Marcia 25 to Apr il 23, 1943 - Esp , Part 7, pp. 331, 342-343 , Part 10, p 499 ' The word-picture of foremen at the conference table is difficult to recognize . In this connection, I am impelled to confess that I do not understand the majority's allusion to the legal principle that "fiduciaries" may not serve "conflicting interests," or the reference to Meinliard v Salmon, cited in footnote 6 of the majority opinion In the fiist place, the majority cites this principle as condemnatory merely of "the iepresenta- tion of supervisory employees by the same organizations which might represent the sub- ordinates," although, as I have pointed out above, the majority holds herein that super- visory employees generally cannot constitute appropiiate bargaining units, regardless of the foim their oiganization may take Further, the majoiity cannot seriously intend to refer to foremen tlienisehes as the "fiduciaries" of management, since it is generally true, as in this case, that the supervisory employees seeking representation for collec- tive bargaining do not participate in the formulation of manageiial policy and aie in no sense the iepositoiies of management's special tiusl or confidence If the majority means to imply that a union is the fiduciar y of' employees, whom it rep] esents in col- lective baiganing, this, in a sense, may be true But it does not follow that the union cannot properly represent, 'in bargaining relations with a common emplovei vaiious einplo.iee groups whose special interests may diverge in more or less degree, especially where the union's agency for the several groups is well known to all. Industrial, even cratt, unions insaiiably bargain for aggregations of emplo3ees whose separate interests may, and often do, come into conflict I apprehend that this common practice would not normally be regarded as incompatible with the standard of behavior imposed upon fidu- ciaries in Meinhaid v Salmon In that case, incidentally, the defendant's offense was appropriating to himself,,- without disclosure to his co-adsenturer (to whom, in matters pertaining to their joint enterprise, lie owed "undivided loyalty") "pre-emptive oppor- tunity that was . an incident of the enterprise" The salutary rule condemning such questionable dealing enunciated by the Pate Judge Cardozo seems to me to hale no applicability to the situation where supervisors-iii their capacity as employees-and subordinate employees both choose to be represented by the same labor organization in collective bargaining with a thud party, the employer 8 Full Utilization of Manpower, Part 7, pp. 334, 341 ; Part 10, p. 502 ; Part 13, p. 624. 746 DECISIONS OF NATIONAL LABOR RELATIONS BOARD The employers' case against foremen's organization and collective bargaining, in addition to the fallacious claim that supervisors are management and not employees, repeats many of the arguments formerly used by anti-union employers against the organization of rank and file employees in these same industries. It is said that supervisors have no need for collective bargaining, that they can get individually anything they could obtain through belonging to a union, that they advance on individual merit.3 It is said that if organized, they would no longer perform their duties properly, and that there would be a serious threat to production, even chaos.'° It is even asserted that collective bargaining by these groups would con- stitute a threat to the free-enterprise system, and turn over the con- trol and management of industrial plants from the owners and man- agers to the unions 11 There-is scant reason to assume that such speculations are any more justified in the case of the group in ques- tion than they have proved to be in the case of the organization of mass production workers.12 In passing, I need only mention the fact that the remarkable record of war production in this country is being achieved by labor and industry working under collective bargaining contracts to a far greater extent than ever before in our history. It is not far-fetched to believe that the wide adoption of orderly processes of collective bargaining and grievance handling is one " of the factors that has made this production record possible. Organization of foremen has recently become a fact at many points in the mass production industries and in mining, in addition to the widespread organization of supervisors in various forms in many industries ; notably building, printing, the metal trades, the mari- time and railroad industries.13 Since the recent testimony of fore- men before the Committee on Military Affairs of the House of Rep- resentatives, found in the Hearings on Full Utilization of Man- power,14 there is no occasion for speculation as to why these fore- men have organized and what they feel that they have already gained from their organizing efforts. The problems ^ which led to their self-organization are set forth in full and concrete detail in their testimony. A brief summary of only a few statements will indicate the nature of these problems. Ibid., Part 2, pp. 76, 85, 108, 111; Part 3, pp. 137, 15S 10 Ibid., Part 2, pp. 66-67, 71, 109 ; Part 3, p. 133 ; Part 4, p. 177 ; Part 9, p. 434. 11 Ibid, Part 2, p. 85 ; Part 3, p. 156 ; Part 4, pp. 177-178. 12 Cf. the admission of one employer that the original fears as to the effect of unioniza- tion had subsided. Ibid., Part 3, pp. 159-160. 79 Industrial Relations Division, United States Bureau of Labor Statistics, Memorandum, No. 7, Union Membership and Collective Bargaining by Foremen, April 1943. 14 Loc. cit THE MARYLAND DRYDOCK COMPANY 747 In the Union Collieries Coal Company,15 a spontaneous movement for self-organization developed among supervisors' after they were changed from monthly salaries to day work, with a subsequent decrease in the pay of the man testifying, from $230 a month to $22.05 for the first 2-week period, and the discharge and eviction from a company house of the leader of an employee committee which went to the superintendent to ask for more work. In an important motor company (Packard), according to this testimony, the great majority of the foremen joined the Foremen's Association of America because they were dissatisfied over their lack of seniority rights in contrast to the seniority protection of the hourly employees, lack of a right to hearing in event of discharge, failure to attain satisfactory adjustments in regard to overtime pay, sick leaves, and other grievances.- In the Ford Motor Company, which now negotiates with a Ford Chapter of the Foremen's Asso- ciation, with over 9,000 members,'7 -wage reclassifications and adjust- ments have been worked out and a wage agreement signed; 18 for the first time protection of the seniority of foremen has been achieved by a modification of the seniority clause in the UAW-CIO contract for production workers, after intervention of the Foremen's Asso- ciation before the National War Labor Board at the time of revi- sion of this contract; 1° adjustments of dismissals and other prob- lems of individual foremen are being made through the collective bargaining process.20 Members of foremen's unions in other automobile plants testified as to why they have organized. Comparing their own position with that of the organized rank and file, they feel their own insecurity, lack of protection against arbitrary discitarges, anil lack of seniority rights 21 A man promoted to a foreman's position, if he did not make good, would ordinarily be fired rather than demoted back to his original job.22 Individual barganing has not removed dissatisfaction over in- equalities in pay, as between foremen, and between foremen and men under them, who sometimes, on hourly rates and overtime, make more than their foremen.23 A sense of injustice as to pay for overtime appears frequently." Foremen have a sense of grievance over their 11 Full Ut8Zizatlon of Manpower, loc. cit., Part 13, pp 619-621, 627 11Ibtd., Part 10 , pp. 505-506, 511-515 11 Ibid, Part 7, p.' 373. 11 Ibid, p 376 ; Part 10 , pp 490-493. 11 Ibid, Part 7. pp. 375, 377. 20 Ibtid , p 376 21 Ibid., pp 331, 344, 359-360. 22 Ibid., p 333. V 21 Ibid , pp. 332, 344-345, 356-357, 359. 24 Ibid., pp. 343 , 357, 364. 748 DECISIONS OF NATIONAL LABOR RELATIONS BOARD treatment, in comparison with that of the rank and file with powerful organization behind them. They feel that they are not treated with proper respect by superintendents in the presence of workers, and that management fails to back up foremen in their decisions.25 They feel that their point of view and problems are disregarded in the existing collective bargaining systems;-that they do not learn of decisions made in collective bargaining conferences as soon as do the men under them; that individual bargaining is an inadequate method of handling their own problems.26 They feel the need for organization of their own, both to deal with management on their own problems, and to -present the foreman's side of the case in matters affecting foremen, men, and management.2" Under present conditions, with union experience of many rank and file employees, and the rapid expansion of industry making it neces- sary to promote supervisors from the ranks, it is not surprising that in industries where the rank and file are organized, some supervisors have begun to feel the need for organization and collective bargaining for their self-protection. Already, in plants where they are recognized, they are reporting on their experience. Their testimony before the Committee on Military Affairs of the House of Representatives makes it unnecessary to rely on hypothetical arguments as to the results of such organization. Testimony by the president of the Ford Chapter of the Foremen's Association has already been cited as to gains in wage classification, protection of seniority, and the adjustment of grievances. He reported also 28 an increased spirit of cooperation among foremen. The marked increase in production in certain departments' lie attributes in part to the organized activities of foremen and the consequent better coopera- tion among them and between foremen and the men under them :29 "Our relationships with [the management] and our relationships with one another are on a whole lot more satisfactory basis today than they were a year ago." 30 Foremen from other companies testified as to the results of their organization. Even without recognition they already feel that they have more respect from management and they believe that more har- mony and cooperation will result.31 In other cases, organization of Ibul, pp. 332, 338, 341; Part 14, p. 656. 28 Ibad , Part 7, pp. 331, 334, 337, 344. 2' Ib,d, Part 10, p. 504; Pait 14, pp 670-672 28 Ibod , Part 10, pp 493-495. 20Ibid., p 493 ao Ibtid, p 495. 31 Ibid, Part 7, pp 333-34, 345 - THE 1\IA•RTLA\ D DIRTDOCK COMPANY 749 foremen already has promoted cooperation for greater efficiency in production.32 A significant, fact disregarded by the majority is the statement of the vice president of the, Company in the present case, in oral argu- ment, that many of their supervisory employees are union members and `f`are doing a bang-up job for us. The fact is, of course, that union membership by itself is of no importance. That is not the important thing. It is the extent of union activity." 33 Under ques- tioning later as to any cases of difficulty, he stated, "I can say that it is no problem at the present time in Maryland Drydock Company because of the supervisory employees being in the union." 34- I conclude that supervisors in mass production are a group of em- ployees whose right to organize and bargain collectively under the protection of the Act should no more be denied than that of any other group of employees. Bargaining through separate units, with their own organizations, or in separate local unions -affiliated with fhe internationals to which the rank and file locals are affiliated, or even through the same union as represents the rank and file, no problem's should arise which are not susceptible of solution as indicated above. The policy established by the majority attempts to prevent difficulties from arising through foremen's organization, by denying foremen's organization the protection of the Act. This is a policy of negation, which does nothing towards a constructive solution of the real prob- lems of the foremen. Of course, foremen, as employees, have the right to organize and to seek recognition. Perhaps many employers will' regard it as wise to grant this recognition. Insofar as such voluntary recognition is withheld, foremen must "grin and bear lt" or resort to the use of their economic power, an alternative which the Act was meant to discourage. But whatever may happen, any attempt to frustrate a legitimate desire for self-organization and col- lective bargaining by such groups can only be harmful to the cause of good industrial relations and efficient production. Indeed, denial of the right to bargain collectively under the Act is likely to cause foremen, "forgotten men,"' with their problems ,not threshed out, to suffer more in loyalty and to become more militant than would be the case if they were allowed to bargain under the Act and the dire predictions of the majority proved to have substantial foundation in fact, as I am convinced by observations and considerable experience they do not have. 92 Ibid , Part 10, pp 502, 50T 83 Matter of Maryland Dr ydoc! Company , 91ay 4, 1944. 84 Ibid. 750 DECISIONS OF NATIONAL LABOR RELATIONS BOARD It is not impossible-that employers may discover (as many of them have in the case of rank and file organization) that organized fore- men, with responsible leadership and met by their. managements in a constructive spirit, can be a positive force for good in industry. In a democratic society good industrial relations and efficient production must depend upon well-informed, self-respecting, and mutually co- operative relationships between the three groups directly involved in production-management, supervisory employees, and rank and file workers. Self-organization and collective bargaining by supervisors may contribute to the conditions necessary for good relationships and increased production. Of course, I have no objection whatever to the exception appar- ently allowed by the majority based upon history in the trade or industry. But I fail to see why history should stop now. 11