Demise of The NLB
Senator Wagner, convinced by the fall of 1933 that the NLB needed replacement, began work on legislation which would establish a new statutory regime for labor relations in the United States.
Consulting with a key aide, Leon Keyserling, Wagner conceived of a "labor court" to hear cases involving labor disputes and fashion enforceable resolutions. Roosevelt evinced no interest in such a bill, so Wagner proceeded without him. Labor leaders were consulted in January 1934, and a bill was drafted in February.
The "Labor Disputes Act" was introduced in the Senate on March 1, 1934. The bill provided statutory authority for the existence of the NLB, and gave it exclusive enforcement authority over Section 7(a) of the NIRA. The NLB was given the authority to hold elections, but it was also authorized to prohibit acts of coercion by the employer against employees and required employers to bargain in good faith with the duly elected representatives of workers.
The bill explicitly incorporated the concept of exclusive representation. However, it did not require it, and left it up to the NLB to determine whether to apply the rule, given the facts of each case.
Wagner's bill received a hostile reception in Congress. The business community fought the bill ferociously, arguing that it contravened Roosevelt's own policies in the automobile case. The press, too, was adamantly opposed to the legislation. Administration spokespersons were ambivalent about the bill, when they mentioned it at all.
Nevertheless, Roosevelt and the Democratic leadership in Congress understood the need for action. A wave of large strikes swept the country in April and May, and a significant number of them were over the recognition issue. Senator David I. Walsh, Democrat from Massachusetts and chair of the Senate Committee on Education and Labor, quickly wrote a substitute bill, the "National Industrial Adjustment Bill".
The Walsh bill significantly altered many of the provisions of Wagner's bill. It permitted company unions, removed prohibitions on a refusal to bargain, and turned the Board's affirmative duty to determine the outlines of the bargaining unit into a voluntary one.
The Walsh bill won almost unanimous support from the president, the cabinet, the Senate and even from Wagner himself. Wagner was unhappy with the number of provisions which had been watered down, but believed that passage of some legislation was preferable to inaction. He also resolved to draft much stronger legislation after the fall elections. Nevertheless, the Walsh bill faced an uncertain future in the Senate. Congress needed to adjourn and return home to campaign for the fall elections, and the bill promised a lengthy fight.
Roosevelt once more directly intervened in order to win labor peace. Steelworker unions were threatening a nationwide strike. At a White House conference on June 12, 1934, Roosevelt called together Wagner, Walsh, U.S. Department of Labor secretary Frances Perkins, Senate majority leader Joseph T. Robinson, Representative Joseph W. Byrns and several aides. After discussion, Roosevelt himself dictated Public Resolution No. 44. The resolution authorized the president to create one or more new labor boards to enforce Section 7(a) by conducting investigations, subpoenaeing evidence and witnesses, holding elections and issuing orders.
Public Resolution No. 44 was introduced in the Senate the next day. Amended to expressly protect the right to strike, it passed both houses of Congress on unanimous voice-votes. Roosevelt signed the resolution on June 19, 1934.
Roosevelt issued Executive Order 6763 on June 29, 1934. The new order abolished the NLB. In its place, it established the National Labor Relations Board. The new NLRB had only three members: Lloyd K. Garrison, dean of the University of Wisconsin Law School, was its chairman; Harry A. Millis, professor of economics at the University of Chicago, and Edwin S. Smith, Commissioner of Labor and Industry for the state of Massachusetts, were its members.
The new law encouraged the proliferation of labor boards to cover various segments of industry. Roosevelt duly complied with business demands for these boards. Each board interpreted the law as it wished, and American labor law fragmented.
Wagner, however, proceeded to draft and in 1935 introduced a new bill, the National Labor Relations Act (NLRA). The NLRA was enacted and is the basis for private-sector labor relations in the United States to this day.
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