Company Unions and Collective Bargaining

Report Outline
Recovery Act Guarantees and the Company Union
Company Union Organization Under Recovery Act
Company Unions Vs. Trade Unions
Wagner Bill to Outlaw Employer Influence in Unions

Recovery Act Guarantees and the Company Union

Roosevelt Action on Employee Representation

The Rapid Growth of company unions during the first ten months under the National Industrial Recovery Act has alarmed the trade union movement and aroused widespread fear that the collective bargaining guarantees of the act may be rendered ineffective. In an effort to out-law all except bona fide, labor organizations, Senator Wagner (D., N. Y.) incorporated in his proposed Labor Disputes Act, introduced on March 1, 1934, a section making it an “unfair labor practice” for an employer to initiate the formation of a union, participate in its activities, or attempt to influence its policies.

Extensive hearings were held on the Wagner bill, at which it was warmly advocated by organized labor and vigorously attacked by employers and representatives of company unions. To meet the claim that the measure. as drawn was discriminatory, in that it prevented coercion of employees by employers without also preventing their coercion by outside labor leaders, Wagner agreed to amend it to outlaw coercion from all sources. The chances of the hill's passage were materially diminished by the President's settlement, March 25, of the threatened automobile strike in which company unions and outside uninns were both recognized for purposes of joint collective bargaining with employers. The government favored no particular form of employee organization or representation, the President said. Its sole duty was to insure freedom of choice without coercion from any source. “In the settlement,” he added, “there is a framework for a new structure of industrial relations, a new understanding between employers and employees.” The Wagner bill is now believed to have little chance of enactment at this session of Congress in the absence of a strongly-worded declaration in its favor by the President.

If the company union is not to be outlawed, a bitter struggle between the two types of employee organization may be in preparation. It is quite possible, on the other hand, that the pressure of outside unions may force company unions to take a more aggressive stand, in order to retain the allegiance of their members. As groups of company unions are established in the same industry and the same locality, moreover, they will in all likelihood cooperate with each other, and thus may come more closely to resemble outside unions. In some instances the members of an outside union have obtained control of company union machinery by winning the company union election for officers. In such cases the company union may function virtually as a local of the outside trade union.