General Motors Corp.

GENERAL MOTORS CORPORATION 481 experimental department employees, office clerical employees, techni- cal employees, professional employees , watchmen, guards, and all supervisors as defined in the Act. [Text of Direction of Election 10 omitted from publication.] 10 As we have directed an election in a larger unit than that requested by the Petitioner, we shall permit the Petitioner to withdraw from the election upon written notice to the Regional Director, within 10 days from the date of this decision. General Motors Corporation and International Union , United Automobile, Aircraft and Agricultural Implement Workers of America, UAW-AFL-CIO. Case No. 7-CA-2560. February 20, 1961 DECISION AND ORDER Upon charges duly filed by International Union, United Automo- bile, Aircraft and Agricultural Implement Workers of America, UAW-AFL-CIO, herein called UAW, the General Counsel of the Na- tional Labor Relations Board, by the Regional Director for the Seventh Region, issued a complaint and notice of hearing, dated De- cember 14, 1959, and an amended complaint and notice of hearing, dated January 27, 1960, alleging that the Respondent, General Motors Corporation, herein called GM, had engaged in and was engaging in certain unfair labor practices affecting commerce within the meaning of Section 8(a) (1) and (5) and Section 2(6) and (7) of the National Labor Relations Act, as amended. Copies of the complaint and notice of hearing, as amended, were duly served upon the Respondent and the UAW. The amended complaint alleges, in substance, that on or about October 27, 1959, GM refused and continuously to date has refused to comply with a request of the UAW, the exclusive representative of GM employees in an appropriate unit, to bargain concerning terms of an agreement supplementary to an existing agreement between the parties. The Respondent's answer, in effect, admits the factual allegations of the amended complaint, but denies the commission of any unfair labor practice. On February 10, 1960, a hearing was held in Detroit, Michigan, before Trial Examiner Albert P. Wheatley. The General Counsel, the UAW, GM, and the Intervenor 1 appeared. In addition to testi- mony taken, all the parties entered into a stipulation of facts; they waived the preparation and issuance of an Intermediate Report, and I The Intervenor is a group of GM employees in the appropriate unit who are opposed to the UAW's proposed supplemental agreement . The intervention was limited to the filing of briefs and oral argument. 130 NLRB No. 54. 597254-01-vol. 130-32 482 DECISIONS OF NATIONAL LABOR RELATIONS BOARD .agreed that this proceeding be transferred to the Board for findings of fact, conclusions of law, and a decision and order based on the plead- ings and record made at the hearing. On February 18,1960, the Board entered an order transferring this proceeding to it. On October 27, 1960, the Board heard oral argument in Washing- ton, D.C. The General Counsel, GM, UAW, and the Intervenor appeared at oral argument and filed briefs. By leave granted, the following filed briefs amicus curiae: The Oil, Chemical and Atomic Workers In- ternational Union; Commercial Telegraphers' Union, AFL-CIO; In- •diana State AFL-CIO, Indiana State Building and Construction Trades Council and Indiana Workers Protective Committee; Ameri- ^can Federation of Labor and Congress of Industrial Organizations; United Steelworkers of America, AFL-CIO ; National Manufacturers' Association; and the Retail Clerks International Association, AFL- ,CIO. Of the latter group, United Steelworkers of America, Com- mercial Telegraphers' Union, and Indiana State Building and Con- struction Trades Council also appeared and participated in the oral .argument. Upon the basis of the pleadings, the stipulation of facts, and the entire record in the case, the Board makes the following : FINDINGS of FACT I. THE BUSINESS OF THE RESPONDENT The Respondent, a Delaware corporation with its principal business office located in Detroit, Michigan, maintains numerous plants and fa- 'cilities in various States of the United States, including the State of :Michigan, where it fabricates, manufactures, and assembles automo- biles, automotive parts, and related products. Annually, the Respond- ent ships goods valued in excess of one million dollars from its plants .and facilities within the State of Michigan directly to points located outside the State of Michigan. We find that the Respondent is en- gaged in commerce within the meaning of the Act and that it will ,effectuate the purposes of the Act to assert jurisdiction in this case. II. THE LABOR ORGANIZATION INVOLVED International Union, United Automobile, Aircraft and Agricultural Implement Workers of America, UAW-AFL-CIO, is a labor organ- ization within the meaning of Section 2(5) of the Act, admitting to membership employees of the Respondent. For the reasons more fully explicated in their separate opinions, a majority of the Board is agreed that the Respondent did not unlaw- fully refuse to bargain with UAW, and that the complaint should therefore be dismissed. [The Board dismissed the complaint.] GENERAL MOTORS CORPORATION 483 CHAIRMAN LEEDOM, concurring : As indicated above, the facts are not in dispute, the parties having stipulated to an agreed statement. By letter of October 20, 1959, UAW requested GM to bargain con- cerning a proposal supplementary to their existing national agree- ment' under which the employees represented by UAW in nine GM plants in six Indiana cities (Anderson, Bedford, Kokomo, Indian- apolis, Marion, and Muncie) and new employees hired thereafter would be required as a condition of continued employment after 30 days following the date of such supplementary agreement or of their initial employment (whichever is later) to pay to the UAW a sum equal to the initiation fee charged by each of its local unions involved and a monthly sum equal to the regular dues required of union mem- bers at each location. By letter, dated October 27, 1959, GM answered, stating that as an "agency shop arrangement ... as ... detailed in your letter of October 20, 1959, would violate the National Labor Relations Act, as amended, if incorporated in a collective bargaining agreement, we respectfully decline to comply with your request...." The foregoing exchange of correspondence took place after a de- cision on June 19, 1959, by the Indiana Appellate Court, holding that an agency shop under which nonunion members are required, as a condition of employment, to pay the exclusive bargaining agent a fee, in the equivalent of dues, initiation fees, and assessments paid by union members, was a legal union-security arrangement in the State not- withstanding Indiana's right-to-work law.' The court reasoned that Indiana's right-to-work law, unlike right-to-work statutes of other jurisdictions which specifically prohibit or restrict agency-shop ar- rangements, only forbids arrangements requiring union membership, 2 The national agreement , in effect from October 2, 1958, until August 31, 1961, and thereafter from year to year , provides for maintenance of membership and a union shop, except as follows : "(4b) Anything herein to the contrary notwithstanding , an employee shall not be re- quired to become a member of, or continue membership in, the union , as a condition of employment, if employed in any state which prohibits , or otherwise makes unlawful, membership in a labor organization as a condition of employment." 9 The right-to-work law of the State of Indiana, the place of employment of the em- ployees involved herein, provides in pertinent part (Burn's Indiana Statutes, Ann. g 40-2703 C.P.S., Acts of 1957, ch. 19, sec. 3) : "No corporation or individual or association or labor organization shall solicit, enter into or extend any contract, agreement or understanding written or oral, to exclude from employment any person by reason of membership or nonmembership in a labor organiza- tion, to discharge or suspend from employment or layoff any person by reason of his refusal to join a labor organization . . . . Any such contract, agreement, or under- standing, written or oral, entered into or extended after the effective date of this Act, shall be null and void and of no force or effect . .. .11 Section 14 ( b) of the National Labor Relations Act provides : "Nothing in this Act shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law." 484 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and, as an agency shop does not require union membership, the In- diana statute did not apply to an agency-shop arrangement.' Apart from the issue concerning the validity of an agency-shop arrangement, all facts necessary for proof of an 8(a) (5) violation are either stipulated or conceded. The Respondent admits that "the charging party . . . is the certified collective bargaining represent- ative for all hourly-rate production and maintenance employees at the Respondent's aforementioned Indiana plant locations and services the employees whom it represents at each of these plants through its local union . . . ." The parties stipulated that, for the purposes of this case, they do not "intend to raise or rely" upon a provision in the national agreement which purports in broad terms to preclude any re- quirement of further bargaining during the term of the agreement. The parties are in agreement that, if UAW's proposal is lawful, the subject matter of the proposal constituted a mandatory subject for collective bargaining and that GM's refusal to bargain with respect to it would violate Section 8 (a) (5) ; but that, if UAW's proposal is un- lawful, GM had no legal obligation to bargain as to it. Thus, the issue to be determined is whether UAW's proposal for an agency-shop arrangement to cover GM employees employed in the State of Indiana is a lawful proposal under the National Labor Re- lations Act, as amended. As indicated, GM contends that UAW's proposed agency-shop clause is illegal under the provisions of Section 7 and Section 8 (a) (1) and (3).5 'Meade Electric Company v. Hogberg, 159 N.E. 2d 408 (1959), 44 LRRM 2312 6 Section 7 of the Act provides : "Employees shall have the right to self-organization, to form, join, or assist labor organizations, to bargain collectively through representatives of their own choosing, and to engage in other concerted activities for the purpose of collective bargaining or other mutual aid or protection, and shall also have the right to refrain from, any or all of such activities except to the extent that such right may be affected by an agreement requiring membership in a labor organization as a condition of employment as authorized in section 8(a)(3)." Section 8(a)(1) and (3), In relevant part, provides that: It shall be an unfair labor practice for an employer- "(1) to interfere with, restrain, or coerce employees in the exercise of the rights guaranteed in section 7; "(3) by discrimination in regard to hire or tenure of employment or any term or con- dition of employment to encourage or discourage membership in any labor organization : Provided, That nothing in this Act, or in any other statute of the United States, shall preclude an employer from making an agreement with a labor organization (not estab- lished, maintained, or assisted by any action defined in section 8(a) of this Act as an unfair labor practice) to require as a condition of employment membership therein on or after the thirtieth day following the beginning of such employment or the effective date of such agreement, whichever is the later, (I) if such labor organization is the representa- tive of the employees as provided in section 9(a), in the appropriate collective-bargaining unit covered by such agreement when made . . . : Provided further, That no employer shall justify any discrimination against an employee for nonmembership in a labor organi- zation (A) if he has reasonable grounds for believing that such membership was not available to the employee on the same terms and conditions generally applicable to other GENERAL MOTORS CORPORATION 485 More specifically, GM contends that the exercise of rights of em- ployees under Section 7 of the Act, as amended in 1947, and particu- larly the right to refrain from assisting a labor organization is lim- ited only by agreements requiring union membership as authorized in Section 8(a) (3). GM asserts that, because an agency shop re- quires nonunion employees to contribute financial support to a labor organization and because, for the reasons it hereinafter indicates, an agency-shop arrangement does not meet the requirements of Section 8(a) (3), an agency-shop arrangement, if adopted, would interfere with the exercise of rights guaranteed in Section 7, and would there- fore constitute a violation of Section 8 (a) (1). GM further contends that the first proviso to Section 8(a) (3) spells out the only type of agreement, i.e., an agreement limited to condition- ing continued employment upon membership in a labor organization, that may permissibly infringe upon rights guaranteed in Section 7 and not expose an employer to a violation of Section 8(a) (3). GM asserts that the first proviso to Section 8(a) (3) makes clear that to condition employment on anything other than membership in a labor organization is contrary to the statute. Finally, GM contends that, as UAW's proposal fails to meet the requirements of the first proviso to Section 8 (a) (3), its proposal would afford GM no protection from the sweep of the basic no-discrimination provision of Section 8(a) (3) were it to enforce an agency-shop agreement against employees who refuse to pay support money, and thus the proposal is illegal. On the other hand, the General Counsel and the UAW contend in substance that the first proviso to Section 8 (a) (3) merely defines the outer limits of permissible union-security provisions and that the proviso encompasses within its scope lesser forms of union-security arrangements, including the agency shop which requires only the payment of the equivalent of dues and initiation fees but does not compel membership in a labor organization. I agree with the Respondent, for the reasons set forth hereinafter, that the complaint should be dismissed. Although an "agency shop" agreement, such as that proposed by UAW, has been held to be lawful under the applicable law of Indiana, a "right-to-work" State, it is nevertheless, in my opinion, unlawful under the National Labor Rela- tions Act in such a "right-to-work" State. I reach this conclusion because, in my view, any union-security agreement, including one providing for an agency shop, necessarily interferes with the Section 7 right of employees to refrain from assist- ing a labor organization, and encourages membership in a labor organ- members, or (B) if he has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership ; . . . 486 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ization.6 Such an agreement is therefore clearly unlawful under Section 8(a) (1) and (3), unless it is saved by the proviso to Section 8 (a) (3) of the Act. That proviso permits an employer to make an agreement with a labor organization "to require as a condition of employment membership therein on or after the thirtieth day follow- ing the beginning of such employment or the effective date of such agreement, whichever is later...." [Emphasis supplied.] There is, however, no other provision in the Act which specifically legalizes the interference and encouragement inherent in an agency-shop arrange- ment, and the only question here is whether such an arrangement can be lawful under the National Labor Relations Act in a State like Indiana, where it is clear that an agreement requiring literal mem- bership' is prohibited by State law. To hold the agency shop lawful, one would have to conclude that Congress intended the word "mem- bership" in Sections 7 and 8(a) (3) to encompass not only literal membership, but also other relationships between employees and the union in the picture, while at the same time intending that the same word in Section 14(b) encompass only literal membership; or fur- ther, that Congress intended the word "membership" to mean one thing in Indiana and a different thing somewhere else. Such reason- ing I am not prepared to accept. Thus, the conclusion is inescapable that an agency-shop arrangement, whatever its status under Indiana law, cannot be lawful under the National Labor Relations Act in a State like Indiana where employment cannot lawfully be conditioned on literal membership. In support of their contention that an agency-shop agreement is lawful, the General Counsel and UAW rely on Public Service Com- pany of Colorado, 89 NLRB 418, and American Seating Company, 98 NLRB 800. Such reliance seems misplaced as, unlike the instant 9 As the record reflects, nonmembers would not be eligible to participate in union meetings, to vote on ratifications of agreements , or to vote on how their "support money" was to be spent. They would not be entitled as a matter of right to receive the Union's publication or strike benefits, to participate in the Union 's educational fund, or to have any of the other benefits guaranteed union members. Thus, although nonmembers would be required to pay to the UAW the equivalent of the initiation fee and dues paid by members, they would be denied benefits , available to members , which would be available to them, without additional financial burden, if they became members In these circum- stances nonmembers would necessarily be encouraged to become members. For, as the courts have held, the existence of discriminatory benefits, based on union membership, "is inherently conducive to increased union membership . . . by increasing the number of workers who would like to join and/or their quantum of desire,"-even though the Union would reject all applicants for membership NLRB v Gaynor News Company, Inc., 197 F. 2d 719 , 722-723 ( C A. 2), affd 347 U S. 17. If this is so when the union is closed, a fortiors is it so when as here the union is open . That the payment of money to a labor organization assists that organization is self-evident 7 By "literal membership" I mean the right of a union to require actual membership as a condition of employment , and a willingness to admit to membership all employees who tender the requisite initiation fees and dues ; cf. Union Starch & Refining Company, 87 NLRB 779, The Radio Officers' Union of the Commercial Telegraphers Union, AFL (A. H. Bull Steamship Company ) v N.L R.B ., 347 U.S. 17 Neither of these cases stands for the proposition that payment of initiation fees and dues can he required when literal member- ship cannot. GENERAL MOTORS CORPORATION 487 matter, both cases involved a valid agreement, requiring membership as a condition of employment, which was protected under the first proviso to Section 8 (a) (3) ; and neither case involved a "right-to- work" jurisdiction. Significantly, in both Public Service and Ameri- can Seating, no legal impediment existed to preclude the parties from entering into the contracts requiring all employees to be union mem- bers, and they made such contracts. Thus they were free to waive in certan instances, as they did, the maximum requirement of union membership and to require in lieu thereof some lesser form of union security, such as an agency-shop clause. The instant case is different in that, as indicated above, GM and UAW were not free under the National Labor Relations Act to require, of Indiana employees union membership as a condition of employ- ment, and so they were not free to require, as a condition of employ- ment of such employees, any lesser form of union security, such as an agency shop. For one cannot waive a right he does not have. Based on the foregoing considerations, I conclude that the agency- shop clause concerning which UAW requested GM to bargain is, under the National Labor Relations Act, illegal in Indiana, and that GM was under no obligation to negotiate concerning such a clause with UAW. Accordingly, GM not having violated the Act as alleged, the complaint should be dismissed. Whether an agency-shop arrangement, such as that proposed herein, would be lawful in a non-"right-to-work" State, is not before me and I express no opinion on that issue. MEMBER JENKINS , concurring : The parties stipulated to an agreed statement of or conceded to the facts herein. The National Agreement between the parties, in effect from Octo- ber 2, 1958, until August 31, 1961, and thereafter from year to year, provides for maintenance of membership and a union shop, except as to those employees "employed in any state which prohibits, or other- wise makes unlawful, membership in a labor organization as a condi- tion of employment." Application of the National Agreement is pro- hibited in Indiana by the Indiana right-to-work law." On June 19, 1959, the Indiana Appellate Court held the State right- to-work law inapplicable to a provision requiring all employees as a condition of employment to pay their exclusive bargaining agent a fee 8 The right-to-work law of the State of Indiana provides in pertinent part : "No corporation . .. or labor organization shall solicit, enter into or extend any con- tract, agreement or understanding written or oral, to exclude from employment any person by reason of membership or nonmembership in a labor organization , to discharge or sus- pend from employment or layoff any person by reason of his refusal to join a labor organization . . . . 11 ( Surf's Indiana Ann. Statutes § 40-2703 C P S , Acts of 1957, ch. 19, sec 3.) Although the statute asserts the right of employees to assist or refrain from assisting a labor organization , contractual interference with this right is not specifically proscribed. 488 DECISIONS OF NATIONAL LABOR RELATIONS BOARD in the equivalent of dues, initiation fees, and assessments paid by union members in the bargaining unit. Following the well-settled rule that penal statutes are to be strictly construed, the court refused to construe a penal statute expressly prohibiting the entering into or application of an agreement requiring membership to proscribe an agreement which required support moneys, noting that : 9 ... It would seem that the clear, unequivocal language of the Indiana act was intended to apply to union membership and not to outlaw "agency shop" agreements which provide for the pay- ment of fees and dues to labor organizations properly designated as collective bargaining representatives. Had the legislature in- tended to make such provisions and such conduct illegal it should have been so expressly declared in the language of the act. On the ground that section 14(b) of the Federal Act "specifically authorizes and recognizes the validity of right-to-work laws of the several States," the Indiana Appellate Court found it unnecessary to consider the preemption problems which might arise were the State legislature also to attempt to regulate conduct encouraging member- ship in or assisting labor organizations representing employees en- gaged in an industry affecting commerce, that is, conduct covered by provisions of the Federal act other than the provisos to Section 8(a) (3). On October 20, 1959, the UAW asked GM by letter to bargain with respect to its proposal for a supplemental agreement to apply to its employees in Indiana which would require "employees represented by UAW who were not already members and new employees hired thereafter" "as a condition of continued employment after 30 days following the date of such supplemental agreement or their initial employment (whichever is later) to pay the UAW sums equal to the regular dues required of union members on such locations." The Union characterized this proposal as an "agency shop." The pro- posal was based on the terms found not unlawful under the Indiana right-to-work law by the State court, excluding assessments. On October 27, 1959, GM replied by letter respectfully declining to schedule a meeting "to enter into such a supplemental agreement" on the ground that the "agency shop arrangement as . . . detailed in the letter of October 20, 1959" "would violate the National Labor Relations Act, as amended, if incorporated in a collective bargaining agreement." On October 29, 1959, the UAW filed charges alleging that this re- fusal violated Section 8 (a) (1) and (5) of the Act. In answer to the complaints, GM admitted that it had refused to negotiate or enter into °Meade Electric Company v . Hogberg, 159 N.E. 2d 408 ( 1959), 44 LRRM 2312, 2315-2316 GENERAL MOTORS CORPORATION 489, a contract on the ground that it believed the proposal violative of the Federal Act but denied that its refusal violated Section 8(a) (1) and (5). At the hearing, the parties attempted further to clarify their posi- tions. Both stipulated that they would not raise or rely upon a pro- vision in the National Agreement intended to preclude requirement of further bargaining during the term of that agreement. UAW indicated that it would not change or modify the basic terms in its initial request during any subsequent bargaining conference which might be ordered, suggesting possible compromises on the length of the grace period afforded employees and similar matters as the only elements on which it might vary the proposal. GM indicated that it had no intention of expanding its reasons for refusing to negotiate or enter into the proposed supplemental agreement. Both parties agreed that they wanted a decision from the Board which definitely indicates, "that an `agency shop' under Taft-Hartley is either legal or illegal." At the request of the General Counsel, the Trial Examiner accepted the further stipulation that all the parties waived any remedy requir- ing the posting of any notices by the Respondent. Respondent introduced into evidence the Union's current constitu- tion and called Leonard Woodcock, union vice president in charge of the General Motors department of the Union since 1955, to explain the comparative union rights of members and nonmembers who would be required to pay the equivalent of a union initiation fee and monthly union dues under the Union's proposal. He testified that the non- members would not be eligible to participate in union meetings, to vote on ratification of agreements entered into or negotiated by the Union on their behalf, or to vote on how any of their "support money" was to be allocated by the Union. They would not be entitled as a matter of right to receive the Union's publication "Solidarity" nor would nonmembers have any guarantee that their payments would entitle them to strike benefits, participation in the Union's educational fund, or to any of the other benefits guaranteed union members, since, as he pointed out, "our constitution isn't written in terms of non- members." Not in Issue The agreement between the parties limits the issues to be considered by the Board. To eliminate possible doubt as to the import of this case for Board decisions involving Section 8(a) (5) and 8(b) (3), I feel it incumbent upon me to state some questions which are not here in issue. This case does not involve the question of the extent to which an employer must bargain on a subject of mandatory bargaining if but confronted with an initial illegal proposal thereon. Concededly "union security" is a subject of mandatory bargaining under the Act 490 DECISIONS OF NATIONAL LABOR RELATIONS BOARD and the mere request for an illegal union-security provision neither terminates the duty to bargain thereon nor itself constitutes a refusal to bargain.10 Nor the question whether the Respondent's explanation for its refusal to bargain on the "agency shop" proposal sufficed, with- out more, to fulfill its obligation to bargain thereon.ll In view of the disagreement among the able attorneys involved in this proceeding and the Board itself, I cannot say that, right or wrong, the legal reason given for refusal was not urged in good faith.12 It is also clear that the Respondent's position did not evince a mind closed to persuasion or without sincere purpose to find the basis for agreement, which in fact the parties have sought through their agreement to submit to the Board for its resolution their dispute as to the legality of the UAW's so-called "agency-shop" proposal. It is only that dispute which must be resolved. The Issue As presented by the parties, the issue to be determined is the legality of incorporating into a contract and enforcing a provision requiring all GM employees (not already members of the Union) and all new employees in the State of Indiana to make payments in the equivalent of initiation fees and dues to UAW as a condition of continued em- ployment. As stated by other participants in the proceeding, the issue was enlarged to include such questions as whether it would violate 8(a) (3) to agree to give employees an option to join the Union or to pay "service charges" or be fired and whether the Federal Act permits any form of "agency shop." Neither the parties nor the other participants attempted rigidly to define an "agency shop" or to distinguish, with any precision, among variations on "union shop" clauses,13 incorporating "modifications" such as maintenance of membership during the contract term for those who choose during the grace period to remain or to become members, a requirement of membership by all employees except (1) those having conscientious objections to some of the uniformly imposed require- ments for membership or to membership in any association including others than those of the religious body to which he belongs; (2) those "See The Andrew Jergens Company, 76 NLRB 363 , 365, enfd. 175 F. 2d 130, 133 (C.A. 9), cert. denied 338 U.S. 827 , and National Maritime Union of America , et at (The Texas Company ), 78 NLRB 971 , 981, enfd. 175 F. 2d 686 (C.A. 2), cert. denied 338 U.S. 954. 11 See The Cincinnati Steel Castings Company, 86 NLRB 592, 594. 12 Clearly , this is not a situation in which the Respondent urged, legal reasons which it knew or should have known were not valid or in which other factors reflect on its good faith. See The Andrew Jergens Company, 76 NLRB 363, 379. 1s In sustaining the constitutionality of the 1951 amendment to the Railway Labor Act permitting a "union-shop" comparable to that provided in the provisos to Section 8(a) (3) of the Taft-Hartley Act, Justic Douglas stated for the Court • ",The union shop is a variant of the closed shop , since union membership is required of every employee after the 60-day period designated by the Act." Railway Employes' Department, AFL, et at. v. Hanson, et at., 351 U.S. 225 at 231, footnote 3. GENERAL MOTORS CORPORATION 491 older employees who have consistently rejected union membership; (3) those employees who prefer to contribute to some charity or to some particular union activity in lieu of joining the union, and the like. Such variations among "modified union-shop" clauses are legion." There is similar variation among agreements characterized as estab- lishing an "agency shop," 15 as the contentions in this proceeding clearly illustrate. Under these circumstances, I think it better to avoid use of the label "agency shop." 16 I shall therefore limit my basic consideration to the question of the legality of the UAW's basic proposal. To repeat, that proposal, as stated in the request and in the complaints, reads : [T]he employees represented by the Union in Respondent's In- diana plants and facilities (not already members of the Union) and new employees hired thereafter shall be required as a condi- tion of continued employment after thirty days following the date of such supplementary agreement or of their initial employ- ment (whichever is later) to pay to the Union a sum equal to the initiation fee at each of the local unions involved and monthly sums equal to the regular dues required of its members at each location. It is to be noted that, unlike the "modified union-shop" clauses listed above, the UAW's proposal is unrelated to any contractual require- ment for union membership and without contractual specification of the employee's option to join or not to join. Although there are aux- iliary questions, the ultimate issue is whether a certified bargaining representative may, without regard to any agreement requiring mem- bership of any employee, condition the continued employment of non- members and new employees upon payments to it for such representa- tion of sums equal to the initiation fees and monthly dues required by it of members for membership. Statutory Provisions Involved in Contentions Section 7, as amended, guarantees employees the right to "form, join, or assist labor organizations" and "the right to refrain from any or all of such activities except to the extent that such right may be '4 For variations , see "Union Contract Clauses," CCH , Inc. (1954), par. 51,080; 51,080.28-.50; "Union Security and Checkoff," BNA, LRX 643-644. 15 The definition of "agency shop" as one which obligates "employees who don't join the Union to pay the equivalent of dues for the union's services" merges with a definition of "modified union shop" as one which requires "some but not all employees to belong." This merger is apparent from the different emphasis placed upon the precedent cited to the Board as controlling herein. 10 In sustaining the constitutionality of the right-to-work amendment to the Nebraska constitution and the North Carolina right-to-work laws, Justice Black found similarly ex- pedient the avoidance of references to "open ," "closed," "union," "union-security " shops and provisions. See Lincoln Federal Labor Union et al. v. Northwestern Iron and Metal Co., at al, 335 U S. 525, and Whitaker, et al. v. North Carolina, 335 U S. 525 , 528, at footnote 2. 492 DECISIONS OF NATIONAL LABOR RELATIONS BOARD affected by an agreement requiring membership in a labor organiza- tion as a condition of employment as authorized in Section 8(a) (3)." Section 8(a) (3) prohibits "discrimination" in regard to any term or condition of employment "to encourage or discourage membership in any labor organization," with a proviso that "nothing in this Act .. . shall preclude an employer from making an agreement with a labor organization (not established, maintained, or assisted by any action defined . . . as an unfair labor practice) to require as a condi- tion of employment membership therein," and further provides that "no employer shall justify any discrimination against an employee for nonmembership in a labor organization (A) if he he has reason- able grounds for believing that such membership was not available to the employee on the same terms and conditions generally applicable to other members, or (B) if he has reasonable grounds for believing that membership was denied or terminated for reasons other than the failure of the employee to tender the periodic dues and the initiation fees uniformly required as a condition of acquiring or retaining membership." [Emphasis supplied.] Contentions of the Partie's GM contends that UAW's proposed "agency shop" clause, if adopted and made effective, would cause it to violate Sections 8 (a) (3) and (1) and to interfere with rights accorded individual employees by Section 7 of the Act, as amended in 1947. GM asserts that the first proviso to Section 8(a) (3) spells out the only type of agreement which may affect the right of employees guar- anteed in Section 7, i.e., one conditioning continued employment on "membership." It contends that the UAW proposal would cause it to discriminate against employees for failure to assist a labor organi- zation, without regard for "membership" or "nonmembership" or the availability to the employees of membership, interfering with a right guaranteed in Section 7 and expressly qualified only by an "agree- ment requiring membership as authorized in section 8 (a) (3)." It further contends that requiring nonmember employees to contribute the same financial support to the Union as may, under Section 8 (a) (3) (B), be exacted as a condition of employment from members or re- quired to be tendered by non members as a condition of establishing job rights protected despite non membership under the existing Na- tional Agreement, where applicable, would penalize their refusal to join or illegally encourage their joining because members acquire benefits under the union constitution denied to nonmembers in bar- gaining units represented by the UAW. Finally GM contends that UAW's proposal fails to afford it protection from the broad sweep of the basic no-discrimination provision of Section 8(a) (3) were it t' GENERAL MOTORS CORPORATION 493 ,discharge employees who refuse to pay support money rather than "for nonmembership" which the statute states can be justified under certain conditions. GM asserts this is a case of first impression. On the other hand, the General Counsel and the UAW contend that the first proviso to Section 8(a) (3) merely defines the outer limits of permissible union-security provisions and that the proviso encom- passes within its scope lesser forms of union-security arrangements, including the "agency shop" which requires only the payment of the equivalent of dues but does not compel membership in a labor organi- zation. They rely on two cases : Public Service Company of Colorado, 89 NLRB 418, and American Seating Company, 98 NLRB 800. Other participants assert that the first proviso to Section 8(a) (3) delimits the maximum permissible reach of union-security provisions, but contend that proviso (B) has, in its application, equated the tender of initiation fees and dues with the maximum requirements of "mem- bership" making the equivalent exaction without regard for mem- bership as legal. Further policy arguments relate to the impact upon labor organizations in the so-called right-to-work States of the prob- lem of "free riders." Proponents of both positions rely on various statements in the Board and Court decisions in Union Starch cf Refining Company, 87 NLRB 779, and N.L.R.B. v. Radio O fflcers' Union of the Commercial Telegraphers' Union, AFL (A. H. Bull Steamship Company), 374 U.S. 17. Discussion Introduction The precise issue before the Board is a very narrow one. The Board is not dealing with a situation where the proposed agreement requires either membership in or support money payments by an employee who elects, pursuant to a contractual option, not to join a union. I would find such an agreement legal under Section 8 (a) (3). Having found such an agreement legal under the Federal Act, I would then be re- quired, by Section 14(b) of the Act," to look to the law of the State 17 Sec. 14 ( b) provides : "Nothing in this Act shall be construed as authorizing the execution or application of agreements requiring membership in a labor organization as a condition of employment in any State or Territory in which such execution or application is prohibited by State or Territorial law." Explicating the interrelation between State and Federal law regulating union-security agreements under the Wagner and Taft-Hartley Acts, Justic Frankfurter stated • "The contention that § 10 ( a) of the Wagner Act swept aside State law respecting the union shop must therefore be rejected. If any provision of the Act had that effect, it could only have been § 8(3), which explicitly deals with membership in a union as a condi- tion of employment . . . . States are left free to pursue their own more restrzetzve policies in the matter of union -security agreements . Because § 8 ( 3) of the new Act forbids the closed shop and strictly regulates the conditions under which a union -shop agreement may be entered, § 14(b) was included to forestall the inference that Federal power was to be exclusive " Algoma Plywood and Veneer Company v . Wisconsin Employment Relations Board, 336 U.S 301 , at 306-307, 314. [Emphasis supplied.] 494 DECISIONS OF NATIONAL LABOR RELATIONS BOARD where the agreement was made or applied to determine its validity under State law."' As both must be looked at, it is immaterial whether the Board looks first to the State law or to the Federal Act. The Board is not dealing with a situation where the proposed agreement "explicitly deals with membership in a union as a condition of em- ployment" as a requirement or as a option to a related requirement. It is not dealing with a situation in which an employer seeks to justify what would otherwise be "discrimination" by reason of the existence of an agreement requiring membership. It is confronted here with a provision which would require all nonmembers and new employees as a condition of employment to pay the equivalent of full initiation fees and dues. As membership is not involved as a requirement for or con- dition of employment, Section 8 (a) (3) may be read without refer- ence to any proviso.19 In this context, "[t]he unfair labor practice is for an employer to encourage or discourage membership by means of discrimination." 20 There can be no doubt that disparate conditioning of further employment upon payment of certain moneys is clearly discriminatory 2l It is as clear that such discrimination tends to en- courage membership by nonmembers and new employees and main- tenance of membership by present members, and to discourage membership in any other union, in violation of Section 8(a) (3). Consequently, the proposal advanced by the Union in this case is a proposal which does not have the sanction of Federal law. Analysis of Precedents Cited For the reasons stated above, the provisos to Section 8 (a) (3) are not involved in this case. Three of the chiefly cited cases turn on such provisos: Public Service, American Seating, and Union Starch. In the Public Service case, the Board found no unlawful discrimina- tion under Section 8(3) of the Wagner Act where an employee whose tender of initiation fees and dues in application for union member- ship had been rejected and who, subsequently becoming delinquent in his "support money" payment, was discharged under a contract which provided for a dues' equivalent in support-money as to all employees not covered by the maintenance-o f -membership clause. The ' Colgate-Palmolive-Peet Co. v. N.L R.B., 338 U.S. 355, 361. 19 "The meaning of the statute in its application to different circumstances may be de- batable. Clearly § 8(a) (3) may be read thus : It shall be an unfair labor practice for an employer to encourage or discourage membership in any labor organization by discrimina- tion in regard to hire or tenure of employment or any term or condition of employment." N.L.R B. v. International Brotherhood of Teamsters , etc. (Byers Transportation Co.), 196 F 2d 1, 4 (C.A. 8), reversed on another point 347 U S. 17. 20 The Radio Officers' Union of the Commeroial Telegraphers Union, AFL (A. H. Bull Steamship Company ) v. N.L.R.B., 347 U.S. 17, 42. This statement of the reading to be given the language of Section 8(a) (3) depended, of course , on the fact that no issue con- sidered related to the validity of a union-security contract or discriminations a valid union-shop contract might sanction. u Id., at 39, where the Court lists as "clearly discriminatory " : "involuntary reduction of seniority, refusal to hire for an available job, and disparate wage treatment." GENERAL MOTORS CORPORATION 495 Board did not consider the impact which the Taft-Hartley amend- ments incorporated on Section 7 and the provisos to 8(a) (3) or 14(b) would have on the range of permissible union-security provisions, be- cause the saving clause in Section 102 was operative. That was a Wagner Act case in which an employee was discharged for refusal to support a union which had denied him membership for an unascer- tained reason other than his refusal to tender appropriate moneys. The decision is not relevant for the purpose of construing either the main clause or first proviso to Section 8 (a) (3) of the Act. Were the option to join or to pay the equivalent in dues for support one free to the employee to make, he would be protected against such reprisal by proviso (A) or (B) to Section 8 (a) (3) of the Act. This is ap- parent from the decision in Union Starch protecting from discharge employees similarly denied membership upon the tender of such moneys. In the American Seating case, the Board permitted as a bar to an election a contract which required all employees covered by the con- tract, except those having religious objections to union membership, to become or remain members of the union and required all such re- ligious objectors to pay to the union a monthly sum equivalent to the amount of union dues. The contracting parties in both those cases were free to enter into a contract requiring as a condition of employ- ment union membership, and did so. Neither case involved support moneys for the representative from employees within the bargaining unit apart from some "agreement requiring membership." In both, the same contractual sanction was imposed against the member who failed to pay dues as was imposed against the nonmember who failed to make support money payments. Both acknowledged a distinction between the obligations of members to the labor organization of which they are members and of nonmembers represented by that labor or- ganization in a unit which includes members. I do not question the basis for either decision, merely the relevance of either as a guide to decision of the issues in this case. There is no clue in the Public Service decision that the alternatives were open to all employees within the bargaining unit. If membership were not equally available to all employees upon uniform terms the contractu- aily afforded option might in itself, under the Radio Officers' decision, illegally "encourage membership." 22 In American Seating the ground for exoneration from the obligation of membership cannot be viewed as tending to encourage or discourage union membership. The option was with the employee and based on a nondiscriminatory considera- tion unrelated to union membership. The important distinction be- tween both cases and the present case is that both did involve explicit 22 The Radio Officers' Union of the Commercial Telegraphers Union, AFL (A. H. Bull Steamship Company) v. N.L.R.B., 347 U.S. 17, at 51-52. -496 DECISIONS OF NATIONAL LABOR RELATIONS BOARD contractual requirements for membership, and the alternatives were -related thereto. Unlike Public Service and American Seating, the valid union- :security agreement requiring membership in Union Starch afforded no alternatives to "membership" for the employee. As the employer had reasonable grounds for believing that membership was denied certain employees for "reasons other than the failure of the employee -to tender the periodic dues and initiation fees uniformly required as .a condition of acquiring or retaining membership," the question was whether the further proviso (B) to Section 8 (a) (3) protected an em- ployee who had made such tender from discharge for nonmembership. In a decision which considers at length the legislative history of the provisos to Section 8(a) (3), the Board concluded that proviso (B) )protects the employee who tenders the requisite amount of dues and 'initiation fee and is denied membership for any other reason, even -though that reason be nondiscriminatory. It concluded that if a union "imposes any other qualifications and conditions for membership with which he is unwilling to comply, such an employee may not be entitled 'to membership, but he is entitled to keep his job." 23 While this gives the employee the privilege of refusing with impunity to comply -with additional requirements for membership, or of membership, it (cannot be said to equate "membership" with the payment of periodic (dues and initiation fees 24 That decision has even less relevance for the present problem than those cases involving contractual alterna- tives to required membership. While Radio 0 fcers' Union contains a careful analysis of the prob- lem of encouragement of union membership by employers, within the meaning of Section 8(a) (3), none of the discriminatory Situations 25 therein found to encourage adherence to union obligations or to tend to encourage the desire for union "membership" involved any con- tractual obligation imposed upon employees as a condition for their continued employment. That decision becomes relevant here as a guide to the proper interpretation to be given such generic phrases. 23 See summary of holdings in Union Starch & Refining Co. v. N L.R.B., 186 F 2d 1008, 1011-1012 (C.A. 7), cert denied 342 U.S. 815. In conclusion , the court stated ( at 1012) "We agree that the Union had the right, under the statute here involved , to prescribe nondiscriminatory terms and conditions for acquiring membership in the Union , but we are unable to agree that it may adopt a rule that requires the discharge of an employee [pur- suant to a valid union-security provision ] for reasons other than the failure of the em- ployee to tender the periodic dues and initiation fees. We think the Board construed the statute in a reasonable manner and gave effect to all its provisions , and that its interpre- tation was in harmony with the purpose of Congress to prevent utilization of union security agreements except to compel payment of dues and initiation fees, and that the Board was justified in its conclusions " 24 To do so, absent the labor organization 's decision to that effect, ignores proviso (A) and the proviso to Section 8(b) (1) (A). 25I e., involuntary reduction of seniority for delinquent dues payments by a member, refusal to hire for an available job a member who sought employment without seeking clearance from the union and who was thereafter refused such clearance by the union, .disparate wage treatment of union members and nonmembers. GENERAL MOTORS CORPORATION 497 It is pertinent here that the Court there stated the limits to "per- missible encouragement" of "membership" by reference to contractual requirements for membership and in the context of the purposes of the provisos to Section 8 (a) (3), thusly : 26 The policy of the Act is to insulate employees' jobs from their organizational rights. Thus §§ 8(a) (3) and 8(b) (2) were de- signed to allow employees to freely exercise their right to join unions, be good, bad, or indifferent members, or abstain from join- ing any union without imperiling their livelihood. The only limitation Congress has chosen to impose on this right is specified in the proviso to § 8(a) (3) which authorizes employers to enter into certain union security contracts, but prohibits discharge under such contracts if membership "was not available to the employee on the same terms and conditions generally applicable to other members" or if "membership was denied or terminated for reasons other than the failure of the employee to tender peri- odic dues and initiation fees uniformly required as a condition of acquiring or retaining membership." 41 Lengthy legislative debate preceded the 1947 amendment to the Act which thus limited permissible employer discrimination. This legislative history clearly indicates that Congress intended to prevent utilization of union security agreements for any purpose other than to com- pel payment of union dues and fees. Thus Congress recognized the validity of unions' concern about "free riders," i.e., employees who receive the benefits of union representation but are unwilling to contribute their share of financial support to such union, and gave unions the power to contract to meet that problem while withholding from unions the power to cause the discharge of employees for any other reason. Thus an employer can discharge an employee for nonmembership in a union if the employer has entered a union security contract valid under the Act with such union, and if the other requirements of the proviso are met. No other discrimination aimed at encouraging employees to join, retain membership, or stay in good standing in a union is con- doned. [Emphasis supplied.] 41 . . . That Congress intended § 8(a) (3) to proscribe all discrimination to encour- age union membership not excepted by the proviso see H. Conf. Rept No. 510, 80th Cong, 1st Sess. 44, where it is stated that § 8 ( a) (3) "prohibits an employer from dis- criminating against an employee by reason of his membership or nonmembership in a labor organization , except to the extent he obligates himself to do so under the terms of a permitted union shop or maintenance of membership contract." [Empha- sis supplied.] I have set forth in its entirety that portion of the opinion relied upon, with benefit from partial quotation, both by those who contend The Radio Officers' Union of the Commercial Telegraphers Union, AFL (A. H Bull Steamship Company ) v. N.L R .B., 347 U.S. 17, 40-42. 597254-61-vol. 130-33 498 DECISIONS OF NATIONAL LABOR RELATIONS BOARD the UAW proposal valid and those who contend it illegal under the Act. In my opinion, this statement of the limits to permissible en- couragement of union membership restricts unions, in contractually guaranteeing their own financial security against "free riders," to agreements of the type contemplated by Congress, i.e., "a permitted union shop" or "maintenance of membership contract," both being agreements explicitly "requiring membership." However, the Court in the Radio Off eers' case was not passing upon the validity of a con- tract conditioning continued employment of employees who were not members of the contracting union and new employees upon their pay- ment to such union of moneys equivalent to regular initiation fees and dues. Conclusion Section 8 (a) (3) of the National Labor Relations Act makes unlaw- ful any contract term which illegally encourages or discourages union membership, specifically permitting (unless prohibited by State law) agreements "requiring union membership as a condition of con- tinued employment" under careful controls to guarantee that the union will be open to all who seek membership on the same terms and specifying the sole reason for which an employee may be discharged for "nonmembership," i.e., his failure to tender the periodic dues and initiation fees uniformly required "as a condition of acquiring or retaining membership." 27 Such statutory protection of "individual employees in their relations with labor organizations" to job rights affords a union no right to financial security through support moneys from nonmembers whom it represents in a unit not covered by a con- tract "requiring membership." It is one thing, where there is in existence a valid union-security agreement requiring membership, to allow an employee, at his option, not to become a member if he makes uniform payments in support of representation by his representative. It is quite another thing, when he cannot be required to become a member, to require such support from him. 27 The Board with judicial approval has construed the phrase "membership in a labor organization" to mean "membership" as that phrase is commonly construed and under- stood Union Starch f Refining Co v. N 1 R It , 186 F. 2d 1008, 1011-1012 (C A 7), cert denied 342 U.S 815, enfg 87 NLRB 779 To hold otherwise is to torture the clear and unambiguous words of the statute or not to give effect to all of its provisions E g., Sections 7, 8(a) (3), 8(b) (1) (A), 8(a) (2), 8(b) (5), 8(b) (f), 14(a), 14(b), 302-all of which contain references either to "members" or "membership" in labor organizations. There is no need to cite the authorities which support such an approach to the problem of interpretation to be given statutory terms having common meaning. As Justice Burton has stated , "The essential element of membership in an organized group" is the "desire of an individual to belong to the organization and a recognition by the organization that it considers him as a member " Jencks v. United States, 353 U S 657 , 679 This is in accord with the statutory definition of "member" contained in Section 3(o) of the Labor- Management Reporting and Disclosure Act of 1959 (Public Law 86-257, 73 Stat 519), i.e., "any person who has fulfilled the requirements for membership in such organization " GENERAL MOTORS CORPORATION 499 As the Supreme Court has noted, "it is common experience that the desire of employees to unionize is raised or lowered by the advantages thought to be attained by such action." za I can only conclude that the UAW proposal which would exact from all nonunion members and new employees in the bargaining unit, without regard for their obligations or election as to joining the union, the very same sums the Act sanctions as exactions which may be required from members as a condition of continued employment pursuant to a valid union-shop agreement can have no other foreseeable consequence than tending to encourage membership in the UAW or discourage membership in any other union. Realistically considered, the UAW sought a contract provision which, consistent with the prohibition within the State of contracts requiring membership, would nevertheless impose upon nonmembers and new employees the financial burden of supporting it as their rep- resentative and to the same extent it could impose such burden upon all employees it represents within a bargaining unit covered by a union-shop provision, valid both under Federal and State Law. This is tantamount to charging for representation, contrary to the rights of a bargaining representative required "not to discriminate in the execu- tion of its duties between its own members and employees who belong to another union or to no union." As the Court stated in Hughes Tool Company v. N.L.R.B.: 29 The Act makes no provision for paying the bargaining represent- atives. Where a union serves as such, it looks for its financial support to the agreement of its members to pay dues.... It must serve all employees alike as their representative, and secure itself in its office of representative only by the skill, efficiency, and fairness with which it executes that office. Based on these considerations, I conclude that the particular clause concerning which UAW requested GM to bargain was illegal and GM is under no obligation to negotiate thereon. Accordingly, finding that GM has not violated the Act as alleged, I join Chairman Leedom and Member Kimball in dismissing the complaint. MEMBER KIMBALL, concurring: I concur in the ultimate result reached by Chairman Leedom and Member Jenkins, and in agreement with them, I would dismiss the complaint herein which alleges a violation of Section 8(a) (5) of the Act. I also agree with their conclusion that the so-called agency-shop contract which the Union sought to negotiate with respondent does 2, The Radio Officers' Union of the Commercial Telegraphers Union, AFL (A. H. Bull Steamship Company) v. N.L R.B., 347 U S. 17, 51. 147 F. 2d 69, 74-75 (CA. 5), cited with approval In Conley, et at. v. Gibson, et at., 355 U.S. 41, 46. 500 DECISIONS OF NATIONAL LABOR RELATIONS BOARD not fall within the mandatory field of collective bargaining. It would not fall within the protection of the proviso to Section 8(a) (3) of the Act, and thus would constitute a violation of Section 8(a) (1) and (3), as well as unlawful interference with the employees in the exer- cise of their rights guaranteed in Section 7 of the Act. I would further find that the granting of such a contract would constitute unlawful assistance to the labor organization in violation of Section 8(a) (2) of the Act, and a discharge requested by the Union thereunder and honored by the Employer would constitute violations of 8(b) (2), 8(a) (1), and 8(a) (3) of the Act. I am in agreement with so much of the rationale in the separate opinions of Chairman Leedom and Member Jenkins which supports the aforesaid conclusions of law. However, in view of the extreme importance of the question pre- sented by the instant case and its impact upon the broad field of labor relations, I feel I should set forth in some detail my principal ground in support of my ultimate decision to dismiss the complaint herein. The facts of record in the instant case upon which I rely and which I will treat with hereinafter are as follows : Respondent introduced into evidence the Union's current constitu- tion and called Leonard Woodcock, union vice president in charge of the General Motors department of the Union since 1955, to explain the comparative union rights of members and support money employees who would be required to pay the equivalent of a union initiation fee and monthly union dues under the Union's proposal. He testified that the support money employees would not be eligible to participate in union meetings, to vote on ratification of agreements entered into or negotiated by the Union on their behalf, or to vote on the use of their "support money" by the Union. They would not be entitled as a matter of right to receive the Union's publication, Solidarity, nor would these support-money employees have any guarantee that their payments would entitle them to strike benefits and participation in the Union's educational fund, or to any of the other economic benefits guaranteed union members, since, as Mr. Woodcock pointed out, "our constitution isn't written in terms of non-members." I find this evi- dence to demonstrate conclusively that not only are the support money employees excluded from the social benefits and activities of the Union but they are likewise not permitted a voice, or any form of participa- tion, apart from their contribution of support money, in formulation of policies, decisions, or any other of the Union's activities relating to their economic interests as employees or to the Union's representation of these interests vis-a-vis their employer. When Congress enacted the original Wagner Act it provided, among other things, that a labor organization when selected by a majority ,of the employees in an appropriate unit to act as their representative GENERAL MOTORS CORPORATION 501 for collective-bargaining purposes should become the exclusive agent of both the majority who voted for the selection of such an agent as well as of the dissenting minority who voted against such selection. The concept thus created is wholly statutory in origin .30 It is also settled that except for the Act, employers are not under compulsion of law bound to bargain collectively 31 In speaking of the nature of the duties imposed upon such bargaining agent, the Supreme Court in The Wallace Corporation v. N.L.R.B., 323 U.S. 248, 255 , held that: The duties of a bargaining agent selected under the terms of the Act extend beyond the mere representation of the interests of its own group members. By its selection as bargaining representa- tive, it has become the agent of all the employees , charged with the responsibility of representing their interests fairly and im- partially. [Emphasis supplied.] In enacting the proviso to Section 8(a) (3), Congress effected a compromise between allowing a total closed -shop situation and no compulsory unionism at all by delimiting the area within which a union acting as the exclusive bargaining agent could bargain with respect to compulsory union adherence. The proviso to Section 8(a) (3) was enacted to answer the argu- ment that employees who enjoyed the benefits of collective bargain- ing without paying their proportionate share of the cost of repre- sentation were "free riders ." 33 It follows therefrom that when such nonconsenting employees do pay their proportionate share of the cost of representation, particularly where, as under the proviso , the failure to so tender their dues and initiation fees places their job security in jeopardy when requested by the union , they should be allowed at least an economic voice in the functioning of the exclusive bargaining agent in its representation of them before the employer, and in its carrying out the statutory function of collective bargaining. That employee participation in the functioning of the exclusive bargaining agent is clearly contemplated by the Congress is shown by the very definition of terms in the Act itself. Thus- The term "representatives" includes any individual or labor organization. [Section 2 (4).] and further- The term "labor organization" means any organization of any kind, or any agency or employee representation committee or plan, in which employees participate and which exists for the so See Virginian Railway Company v. System Federation No. 40, etc , 300 U.S . 515, 544- 549; N .L R.B. v. Jones it Laughlin Steel Corporation, 301 U . S 1, 44-45. 'IN L R B. v. Jones it Laughlin Steel Corporation, supra; National Maritime Union of America v . Herzog, 78 F. Supp. 146, 155. a' S. Rept. No 105 of the Committee on Labor and Public welfare to accompany S. 1126, 80th Cong , 1st sess. 502 DECISIONS OF NATIONAL LABOR RELATIONS BOARD purpose, in whole or in part, of dealing with employers concern- ing grievances, labor disputes, wages, rates of pay, hours of em- ployment, or conditions of work . [Section 2 (5).] [Emphasis supplied.] It is thus clear that if, as in the instant case, those who would pay an equal fee for the Union to carry out its function as the exclusive bargaining agent are denied equal rights to participate in and benefit from the bargaining process, they would have a second-class status, and thus would be deprived of a fundamental right guaranteed in the Act. For these additional reasons I conclude that a demand to negotiate such an agreement is an unlawful demand not contemplated by the Act as a mandatory subject of collective bargaining. I therefore join Chairman Leedom and Member Jenkins in dis- missing the complaint herein in its entirety. MEMBERS RODGERS and FANNING, dissenting : This case comes to the Board upon a complaint alleging that the Respondent Company violated Section 8 (a) (1) and (5) by refusing to bargain with the Union concerning a proposed contractual provision, commonly referred to as an "agency shop" or "support money" clause." The proposed clause would require, as a condition of em- ployment, that all non-union-member employees of Respondent work- ing in the State of Indiana pay to the Union, 30 days after the date of their initial employment or the execution of the clause, a sum of money equivalent to the regular union dues and fees. In dismissing the complaint, our colleagues have determined that the proposed agency-shop provision, if adopted, would violate the Act. We disagree 34 To reach the ultimate issue, i.e., whether Respondent violated Sec- tion 8(a) (5), the Board must first determine whether any agency- shop provision could be considered as lawful under the Act.35 This determination would be dispositive of the case since if any such agree- ment is lawful it concededly would fall into the category of mandatory subjects as to which the Respondent could be compelled to bargain. 31 See Public Service Company of Colorado, 89 NLRB 418 , 422, at footnote 17; American Seating Company, 98 NLRB 800, 802. 84 The collective position of our colleagues presents us with three separate and disparate opinions , and indeed , we think, within each opinion different and inherently conflicting rationales . We believe, therefore , it will better serve the purpose of clarity to address ourselves in the main to a positive exposition of our findings on the legal issue , and limit our comments on the varied theories and authorities of the majority. ac The issue of the propriety of an agency shop as a subject of bargaining has come to the Board upon a stipulated record. In our opinion , the Board 's primary obligation is to decide this specific case involving a specific set of facts and based on the specific argu- ments which counsel has directed to our attention . Among other things , we cannot con- clude on this stipulated record that a bargaining impasse ensued from Respondent's re- fusal to negotiate on the proposed agency shop; nor do we find that Respondent ' s good- faith belief that an agency shop is unlawful under the Federal Act could constitute a defense if in fact it is not unlawful. GENERAL MOTORS CORPORATION 503 Before approaching the problem of the legality of an agency-shop agreement, two factors merit emphasis as they are both indispensable to a proper solution of the problem posed. First, all parties to this proceeding are in agreement that the Board is to decide this case under the Federal Act, applying Federal law, and without resorting to the law of any State. No party has proceeded on the ground that the proposed agency-shop agreement would violate Indiana's "right-to-work" law.36 And Respondent predicated its re- fusal to bargain with the Union on the belief that the proposed agency shop clause was unlawful without reference to Indiana law 3v Conse- quently, the Board is not required to treat the question in issue as in- volving anything other than the Federal Act, without reference to the limitation set forth in Section 14(b). Thus neither Section 14(b) re- lating to the withdrawal of the Federal Act where State law prohibits the "execution or application of agreements requiring membership in a labor organization as a condition of employment," nor in particular the "right-to-work" statute of Indiana or any other State need be reached in this case 38 Second, there is no suggestion made anywhere in this proceeding that membership in the Union is not available to any nonmember employee who wishes to join.39 Everyone concedes that the Union was not seeking to bargain over a clause requiring nonmember employ- 36 In the recent case of Meade Electric Co. v. Hagberg, 159 N .E. 2d 408, 44 LRRM 2312 (1959 ), the Indiana Appellate Court construed the Indiana "right-to-work" statute as not prohibiting an "agency shop" provision substantially similar to the clause proposed by the Union in the instant proceeding. It is significant to note that the Indiana statute is couched in terms of "membership" and "nonmembership" and, like the Federal Act ( sec. 7), grants to employees the right to assist or refrain from assisting a labor organization. And see, eg, Schernerhorn v. Local 1625, Retail Clerks, 47 LRRM 2300 ( Dec. 23, 1960), where a Florida court handed down a similar ruling under the Florida "right-to-work" law. 34 In its reply brief, the Respondent stated: "No one, much less the Respondent , is here contending that an 'agency shop' arrange- ment such as has been proposed by the UAW is illegal under Indiana law. The legality of 'agency shop' agreements under Indiana law is not in dispute in this proceeding." 33 Notwithstanding that on the stipulated record the source of the governing law is to be Federal in nature, Chairman Leedom (whose rationale Member Kimball apparently adopts) has proceeded to construe State law. Thus, for example , he attempts to distinguish the Public Service and American Seating cases on the ground that "no legal impediment existed to preclude the parties from enter- ing into a contract requiring all employees to be union members." The "legal impediment" to which he impliedly alludes as existing in the instant case is the Indiana "right-to-work" law. The Chairman flatly states that the proposed agency shop is unlawful in Indiana, despite the judicial holding in Indiana to the contrary . In effect be would automatically forbid the agency shop, and we suppose all forms of union security , in any "right-to-work" jurisdiction purely on the basis of that label-implying that the "right-to-work" laws in all States must be regarded as identical and that not even the State will be allowed to say otherwise. Unlike our colleagues , we do not think It is the Board's province to undermine a State court decision interpreting a State statute. Especially is this so in this case where the Indiana Appellate Court has already rendered a formal decision as to the construction of the Indiana statute . Algoma Plywood and Veneer Company v. Wisconsin Employment Relations Board, 336 U S. 301, 307-314. 39 The record and briefs in the case affirmatively indicate the availability of membership to the Indiana employees. In their bargaining with respect to the agency-shop proposal, the parties could, of course, agree to insert in a contract that membership would be available but not required 504 DECISIONS OF NATIONAL LABOR RELATIONS BOARD ees to pay sums equal to dues and fees as a condition of employment while at the same time maintaining a closed union policy with respect to applicants for membership.40 Accordingly, the question of the legality of an agency-shop provision must be viewed as contemplating an arrangement in which, while employment is conditioned upon pay- ment of the equivalent of dues and fees, all employees are given the option of becoming, or refraining from becoming, members of the Union.41 In light of both these factors, there is no doubt in our mind that an agency-shop agreement is a permissable form of union security within the meaning of Sections 7 and 8(a) (3) of the Act. We are impelled by what we believe is the clear intention of the Congress as expressed in Section 8(a) (3) of the Act, in the legislative history of the Wagner 42 and Taft-Hartley 43 Acts, and by the Board and court deci- 40 Since the question of the extent to which a closed union policy might affect the legality of an agency-shop agreement is not an issue in this case, we find it unnecessary to reach that question. 41 We note that all our colleagues, and Member Kimball in particular, have placed great stress upon the testimony of Woodcock, the Union's vice president, which they construe as evidence of the fact that nonmember employees, who would be required to pay the equivalent of union dues and fees, would be deprived of certain benefits which members would acquire solely by virtue of their membership and as a matter of right. As reflected in the record, every question asked of Woodcock was with reference to the Union's constitution (and not with respect to the Union's agency-shop proposal) Woodcock re- sponded that there were no provisions in the constitution winch expressly set forth the rights of nonmembers to participate in union meetings , in union strike funds, to receive the union magazine, etc. But Woodcock also testified repeatedly that despite the absence of express provisions dealing with nonunion members' rights in the Union's constitution, the custom and practice of the Union, as deemed by it to be consistent with the constitution, is to grant all the rights accorded to members to nonmembers as well, if the nonmembers pay sums equal to dues and fees. Thus, Woodcock testified that the benefits afforded to members by the constitution are denied to those employees who "are non -members in the sense of non-paying to any extent" But, as to those who pay the equivalent of dues and fees, they are placed on the Union's rolls and "they are entitled to the same benefits as a member unless they themselves choose not to make them available to them." It is the statutory duty of the exclusive bargaining agent to represent equally all em- ployees in the unit, union members and nonmembers alike. Hughes Tool Co , 104 NLRB 318. There can be no dispute that the duty is legally fulfilled, for example, where under a concededly valid union-shop or maintenance-of-membership contract employees refrain from joining the union and are denied the intraunion organizational benefits afforded to members Nor in the maintenance-of-membership situation would the fact that non- members are not required to pay dues detract from the nondiscrimination and equal treat- ment to which they are entitled under the Act. The statute sanctions the enforceable collection of dues and fees from member s pursuant to a valid union-security contract plainly because Congress has vested in the majority union the obligation of statutory bargaining representative, and not on account of the internal organizational benefits, e g , fraternal, which the members receive. Nonmembers in the unit must be accorded the same representa- tion service, pertaining to wages, hours, and work conditions with the employer, and the statutory sanction for financial support of such service derives from the same source. This is reinforced by the congressional purpose, as conceded, of eliminating "free riders " The amount of the charges to the nonmembers is justified on the basis of a reasonable general classification. The Electric Auto Lite Company, 92 NLRB 1073, 1077 4' E g, "The Bill does nothing to facilitate closed shop agreements or to make them legal in any State where they may be illegal. It does not interfere with the status quo on this debatable subject but leaves the way open to such agreements as might now be legally consummated . . . [Emphasis supplied.] S Rept No. 573, 74th Cong , 1st secs., p. 11. That various forms and degrees of union-security contracts were then extant and permitted in many States was well known to Congress and, in particular, to the Board in its consideration of the Public Service case. 43 E g, Senator Taft in explaining the Section 8(a) (3) provisos • " . , while I think of it, I should like to say that the rule adopted by the [Conference] committee is sub- GENERAL MOTORS CORPORATION 505 sions in which that section has been constructed. Our colleagues, on the other hand, by apparently holding, inter alia, that an agency shop is permitted only as an alternative to, or waiver of, a valid union-shop or maintenance-of-membership provision,44 have taken a novel approach which not only ignores the clear legislative history and indeed the terms of the Act itself, but which also runs completely con- trary to well-established precedent.4s The basic problem, simply stated, is whether this form of union security, the agency shop, is, and was intended by Congress to be, embraced within the Section 8(a) (3) proviso. The question is clearly answered in the precedents, e.g., Public Service, American Seating, Union Starch, and Radio Officers. The unanimous Board in Public Service, after oral argument, ren- dered a careful and comprehensive opinion on all pertinent aspects- including the legislative history and technical questions of statutory construction-of essentially the same problem under the Wagner Act.46 The Board ruled that the Section 8(a) (3) proviso, which spe- cifically allows a "membership" requirement in a contract, was in- tended to be "permissive and not exclusive in character"; that it stantsally the rule now in effect in Canada . Apparently by a decision of the Justices of the Supreme Court of Canada in an arbitration case , the present rule in Canada is that there can be a closed shop or union shop, and the union does not have to admit an em- ployee who applied for membership, but the employee must nevertheless, pay dues, even though he does not join the union. If he pays the dues without 9osnirg the union, he has the right to be employed " [ Emphasis supplied .] 93 Congressional Record 5088, May 9, 1947. While not controlling of the legal issue , we note that, in a recent Bureau of National Affairs survey of 400 representative contracts , 6 percent contained agency-shop clauses. 46 LRR 458 , October 17, 1960; that , as appeared in the oral argument herein, in the 10 years since Public Service was decided the General Counsel has been dismissing charges alleging agency-shop contracts as unlawful , and contracts have been written involving large numbers of employees in reliance upon the Board 's holdings 44 We are assuming this much because of statements made to such effect in the majority opinions , although elements of the rationale in each of the various opinions appear to us to cast doubt on the validity of the agency shop under any circumstances In the majority opinions , and particularly in Chairman Leedom's concurrence , the argument is made that under the Federal Act the only permissible type of union -security agreement is one which conditions employment upon union "membership " Thus, the majority reasons, where "membership" can be required, there is nothing under the Federal Act precluding the parties from negotiating away a "membership" requirement and imposing in lieu thereof some lesser form of union security ( as, for example, an agency shop). The fallaciousness of this position is self-evident. For obviously , if the provisos to Section 8(a) (3) only permit agreements requiring "membership," then by a parity of reasoning all agreements requiring less than "membership ," whether or not they are rationalized as a "waiver" or "alternative" to a permissible membership requirement, would have to be considered unlawful . If parties can waive where they are allowed a "membership" requirement, logically they can accomplish the same result absent such allowance so far as the discrimination and interference provisions of the Act are con- cerned. It is inconceivable to us that Congress had such an unrealistic and meaningless purpose as advanced by our colleagues. 95 Member Jenkins' opinion concludes that an agency -shop agreement is unlawful because It "can have no other forseeable consequence than tending to encourage membership in UAW or discourage membership in any other union." Chairman Leedom and, presumably, Member Kimball are in agreement with this conclusion. Of course all forms of union security , including the agency shop , naturally have such tendency or effect But if the agency shop is within the exemption of the Section 8(a) (3) proviso, as we believe it clearly is , this conclusion of our colleagues is a non sequitur 41 The case was decided after Taft -Hartley became effective , with full knowledge by the Board of the provisions and policy of the later statute. 506 DECISIONS OF NATIONAL LABOR RELATIONS BOARD merely sets the maximum limits of union security which may be ne- gotiated; and that the lesser forms of union security, e.g., an agency shop, were clearly permitted. We believe the case is manifestly sound. During the Taft-Hartley period, the Board in American Seat- ing expressly reaffirmed the holding in Public Service, stating: As the precise language of the 8(3) proviso in the Wagner Act was continued in the amended Act . . . , and because the legislative history of the amended Act indicates that Congress intended not to illegalize the practice of obtaining support pay- ments from nonunion members who would otherwise be "free riders," we find that the provision for support payments in the instant contract does not exceed the union-security agreements authorized by the Act." 98 NLRB 800, 802 (1952). [Emphasis supplied.] Indeed, on the bare face of it, it would seem wholly unreasonable that Congress would require that the union obtain a concession from the employer only in the maximum degrees of union security." Our colleagues seek to distinguish, limit, and in effect overrule these cases on narrow and reaching grounds.48 But the bases of decision in these cases are unmistakably stated therein and directly affect and control the legal issue here involved.49 As is quite evident, the majority is in error in ignoring the Union Starch and Radio Officers cases or brushing them aside as irrelevant. The Union Starch construction of Section 8 (a) (3) 50 has been an accepted and settled rule in many Board and court cases. In those " In the provisos to both Sections 8(3) of the Wagner Act and 8 (a)(3) of the Taft- Hartley Act, the public policy is stated . "That nothing in this Act , or in any other statute of the United States , shall preclude an employer from making [ such] an agree- ment . . [Emphasis supplied.] See Algoma Plywood and Veneer Company v. Wisconsin Employment Relations Board, 336 U.S. 301 . In making this statement of policy, did Congress intend to place upon the described form of union-security provision as to which it was thus proclaiming immunity from all its laws , a technical restriction , to wit : that it must contain a "membership" requirement? ' For example, Member Jenkins first sets forth the issues which are not involved in this proceeding, then he proceeds to dissect the statute by reading Section 8 ( a) (3) "without reference to any proviso;' and finally he attempts to sweep away the previously referred to cases on the grounds of irrelevancy It is of course fundamental statutory construc- tion that effect must be given to all provisions of a statute . In particular, Section 8(a) (3) cannot be read except in its entirety , with the provisos being an inextricable part as they serve to define and clarify the purport of the whole section. As will be further shown, these precedents are quite relevant and should not be lightly treated where to do so would overturn basic and soundly considered principles as to the meaning of pertinent statutory provisions, including Section 8(a)(3) and its provisos See also the Chairman's basis for distinguishing American Seating and Public Service, supra, footnote 38. 39 An interesting fact to be noted in the Public Service case ( at p. 419 ) is that after executing the "support money" clause , the employer sent a letter to the employees in which it explained that, while it would not agree to the union's proposal for a union shop because "there were employees who for their own personal reasons would not care to join the Union," the employer agreed to the alternative agency-shop clause to promote more bar- mony among the employees. 60 In Union Starch & Refining Company, 87 NLRB 779, enfd. 186 F. 2d 1008 (C.A. 7), cert. denied 342 U S. 815 ( and cited approvingly by the Supreme Court in Radio Officers'), the Board said : "We therefore read proviso ( B) as extending protection to any employee who tenders periodic dues and initiation fees without being accorded membership. If the GENERAL MOTORS CORPORATION 507 cases, even where "membership" is specifically required in a valid union-security contract, for all practical purposes the union cannot enforce the actual membership requirement but can obtain at most the periodic dues and initiation fees. Thus, a contract, such as the agency shop, which requires only that which the union under the Act can realistically and effectively enforce, must in all reason and equity be held lawful. (An agency shop does not require literal membership; nor does a union shop.) Otherwise, if the majority view is taken, the union should be permitted to enforce a union-shop requirement for literal membership, regardless of the nature of the union, its constitu- tion and by-laws, and the particular application of the Section 8 (b) (1) (A) proviso 51 Surely our colleagues are aware that to enforce such literal membership would run counter to the fundamental pre- cepts and philosophy of Taft-Hartley in protecting the rights and freedom of choice of employees vis-a-vis union membership. In the Radio Officers' case," the Supreme Court recognized : Lengthy legislative debate preceded the 1947 amendments to the Act which thus limited permissible employer discrimination. This legislative history clearly indicates that Congress intended to prevent utilization of union security agreements for any pur- pose other than to compel payment of union dues and fees. Thus Congress recognized the validity of unions' concern about "free riders," i.e., employees who receive the benefits of union repre- sentation but are unwilling to contribute their share of financial support to such union, and gave unions the power to contract to meet that problem while withholding from unions the power to cause the discharge of employees for any other reason. [Emphasis supplied.] In consequence of the foreging, the Court concluded that Congress intended to accord to employees the right "to join unions, be good, bad, or indifferent members, or abstain from joining any union without imperiling their livelihood." Certainly the Supreme Court clarified that which Congress sought to permit in the area of union security and that which it sought to limit. While Section 8(a) (3) is couched in terms of "membership," the Court noted that the-term had been "too restrictively interpreted" union imposes any other qualifications and conditions for membership with which he is unwilling to comply, such an employee may not be entitled to membership, but he is entitled to keep his job" (At p. 784.) And see 87 NLRB at 781, footnote 8, where the Board said • "The provisos of Section 8(a) (3) are specifically limited to protecting non- members of the contracting union, and cannot be converted into statements of the condi- tions which entitle an employee to membership rather than those which entitle him, as a nonmember, to keep his job " ii Which provides that the guarantee of employee rights in Section 7 "shall not impair the right of a labor organization to prescribe its own rules with respect to the acquisition or retention of membership therein " 52 The Radio Officers' Union of the Commercial Telegraphers Union, A13 L (A. H. Bull Steamship Company ) v. N.L.R.B., 347 U.S. 17, 40-41. 508 DECISIONS OF NATIONAL LABOR RELATIONS BOARD (by the Eighth Circuit). The Court provided a construction of that term, and the whole section in keeping with the basic policy of the amended Act, namely, "to insulate employees' jobs from their organi- zational rights." 53 By such a reading, the Court gave effect to the main thrust of the entire section, which is to protect employees in their hire or tenure of employment; and this was accomplished by equating the word "membership" with the status or right to be pro- tected from being discharged-a status which could not be interfered with so long as the employee tendered the requisite periodic dues and fees. Conversely, "nonmembership" was equated to a status which resulted only from a failure to tender such dues and fees, and which rendered the delinquent "nonmember" employee subject to being discharged.54 In view of the foregoing, we are unable to see how our colleagues can distinguish the instant agency-shop proposal from any other union-security proposal which predicates a right of discharge only upon an employee's failure to tender the equivalent of regular union dues and intintion fees. The Union sought to bargain concerning a clause which would leave the final decision as to membership or non- membership with each individual employee, at his option, but never- theless, to condition employment upon the payment of sums of money which would constitute each employee's "share of financial support." In our opinion, such a proposal fully comports with the congressional intention in Section 8(a) (3) for the allowance of union-security con- tracts, and, therefore, is a mandatory subject as to which the Respond- ent is obliged to bargain. Consequently, we would find that the Respondent violated Section 8 (a) (1) and (5) of the Act, as alleged.55 63 347 U.S. at 40 64 As stated by Senator Taft, "In other words, what we do, in effect, is to say that no one can get a free ride in such a shop. . . . The employee has to pay the union dues" [Emphasis supplied.] 93 Congressional Record 3953, April 23, 1947. 66 It is beyond the Board's authority to tell the parties what specific result they should reach in bargaining N.L R B. v. American National Insurance Co., 343 U.S. 395 Accord- ingly, by concluding that the proposed agency-shop agreement is a lawful and mandatory subject for bargaining, we would not impose a duty upon the Respondent to execute such an agency-shop clause, or any other clause ; the duty imposed would go no further than to direct the Respondent, upon request, to bargain in good faith. Valley Die Cast Corp. and Murray F. Robertson, Edward Torosian, Michael Polizzi and George M. Roberts and District Lodge No. 60, International Association of Machinists, AFL- CIO. Case No. 7-CA-92592. February 20, 1961 DECISION AND ORDER On July 25, 1960, Trial Examiner Arnold Ordman issued his Inter- mediate Report in the above-entitled proceeding, finding that the 130 NLRB No. 66.