NWLB Region II Office Files and Cases, 1939-1946
Collection Number: 5311

NATIONAL BOARD

The National War Labor Board was created on January 12, 1942, by Executive Order 9017. It was established on the recommendation of the Labor-management Conference of December 17-23, 1941, which had been called by President Roosevelt to suggest ways to prevent work stoppages that would be detrimental to the war effort. The primary purpose of the Board was to provide a means for the settlement of labor disputes that threatened to impede the effective prosecution of the war.

The National War Labor Board was a tripartite body, composed of four representatives each from labor, management and the public, appointed by the President. Executive Order 9017 also provided for four alternate employer and four alternate labor representatives. The alternates were to participate only in the absence of the regular members. Six members, regular or alternate, representing equally the three interested parties constituted a quorum for deciding cases. Less than two weeks after the NWLB was established, the President provided for the appointment of associate public members to act as mediators in labor disputes.

The NWLB, generally, handled only those disputes certified to it by the Secretary of Labor after the US Conciliation Service had failed to effect a settlement. If it wished, the Board could also assume jurisdiction of a dispute on its own motion after consultation with the Secretary of Labor. Upon taking jurisdiction of a case, the NWLB was authorized to settle the dispute through mediation, voluntary arbitration, or arbitration under the rules established by the Board.

From the Beginning, however, the NWLB insisted that the process of collective bargaining be fully utilized. William H. Davis, the first chairman of the Board, stated the Board's policy thus:

'It is more than ever necessary in war time that the peaceful processes of collective bargaining be preserved and utilized to the fullest extent. The existence of the National War Labor Board, providing machinery for the settlement of disputes, must in no way be considered as a substitute for the bargaining process.

Labor management must accept the obligation, so clear and compelling in time of war, to refrain from laying their compelling in time of war, to refrain from laying their incidental problems in the lap of government. This will require on the part of the unions, that they do not request certification to the Board of disputes which are not of major importance. It will require management in turn to refrain from abusing labor's voluntary surrender of the strike weapon by demonstrating a willingness to bargain colectively in good faith.'

The Board often sent back to the parties cases or issues in which the Board felt that collective bargaining had not been fully utilized. The fact that the disputants had not used the services of the US Conciliation Service proved to be grounds enough to send a case back to its originators.

The NWLB made an admirable beginning when, early in 1942, it found a solution to the difficult problem of union security. The Board adopted the "maintenance of membership" agreement. Union members or those who joined a union were required as part of any contract to remain union members for the life of the contract. Any member who failed to maintain good standing in the union was subject to discharge. Under this arrangement, which had its origins in the collective bargaining of the 1920s, neither a closed shop nor a union shop was to be enforced. The principle was consistently applied throughout the war, and ultimately covered some 3,000,000 workers, or approximately 20 per cent of all those covered by agreements.

Early in 1942, the government became greatly concerned over inflationary trends in the economy, and in April, 1942 adopted an over-all program for price and wage stabilization. The NWLB was instructed to stabilize the wage-rate structure of the country by restricting the amount of any wage increase ordered in a dispute case. In an attempt to conform with this program, the Board, in a steel dispute case in July 1942, adopted its "Little Steel formula."

The employees of the Little Steel companies had demanded wage increases amounting to a dollar a day. After lengthy hearings, the NWLB decided that any wage increase should be limited to an equivalent of the increase in the cost of living between January 1941, a time of relative price stability, and May 1942, when the anti-inflation program had officially gone into effect. On the basis of the Bureau of Labor Statistics cost of living index, this amounted to 15 per cent, and the Little Steel workers were awarded an increase of 44 cents per day rather than the dollar a day they had originally demanded. This was the so-called Little Steel Formula. It remained the basic criterion that the NWLB sought to follow in the settlement of all wage disputes.

On October 3, 1942, the President issued Executive Order 9250 which established the Office of Economic Stabilization and set forth a comprehensive program for wage and salary stabilization. It provided, with certain exceptions to the Board's jurisdiction, that no wage changes, either increases or decreases, could be made unless approved by the National War Labor Board. The order also expanded the jurisdiction of the Board to cover all industries and all employees. Prior to this time, the Board could exercise jurisdiction only over those disputes that threatened to impede the war effort. Although it was concerned primarily with wages and salaries, Executive Order 9250 was interpreted as expanding the Board's jurisdiction to cover "all industries and all employees" in dispute cases also. Under this wage stabilization program, the NWLB could grant no increases in the wage rates prevailing on September 15, 1942 over those allowable under the Little Steel Formula except to correct "maladjustments" or "inequalities", to eliminate "substandards of living", to correct "gross inequities", or "to aid in the effective prosecution of the war."

Initially, when its function was limited to dispute settlement, the operations of the NWLB were centralized in Washington. With the additional job of administering wage controls, the Board was forced to decentralize its activities. In anticipation of a large volume of voluntary applications for wage increases following the issuance of Executive Order 9250, the Board announced on October 29 that it was establishing field offices for the use of employers and unions in filling out applications for wage adjustments.

On November 22, 1942, the NWLB announced the appointment of 10 acting Regional Directors with offices in New York City, Boston, Philadelphia, Cleveland, Chicago, Kansas City, Denver, San Francisco, Dallas, and Atlanta. At the same time, the NWLB appointed Regional Advisory Boards to assist the regional directors in the administration of the wage stabilization program. These were tripartite boards with four representatives each from labor, management, and the public. The members of the Regional Advisory Boards were selected locally and were inteded to provide the regional directors with "understanding of the local problems, and the sentiment of the local community, the region."

The authority of the regional director was very limited. He could approve only those applications for wage increases that were allowable under the Little Steel formula and that were submitted from within 29 specified industries. All other requests for increases had to be forwarded to Washington for final action by the National Board.

A steadily growing number of dispute cases led the NWLB to decentralize its dispute functions also. As the end of its first year of operation drew near, the Board had accumulated a backlog of 1,100 cases. The Board then decided to reconstitute the Regional Advisory Boards as Regional War Labor Boards. The new Boards were to have power to makke final decisions in both voluntary and dispute cases.

On January 21, 1943, the NWLB announced that it was establishing 12 regional boards;* 2 new regions having been created in addition to the existing 10. The Regional War Labor Boards were patterned after the National Board in structure as well as function, and the regional directors were designated as chairmen of the regional boards. The Region II board was the first to start functioning, and by March 21, 1943, all the regional boards were in operation. In June 1944, the Territorial War Labor Board for Hawaii was established.

The NWLB extended its decentralization program still further by creating special tripartite industry commissions and panels to deal with particular industries on a national rather than a regional basis. The Board felt that technical, economic, and other factors called for industry-wide treatment in these cases. The first organization of this type was the Metropolitan Milk Distributors' Commission established on September 11, 1942. This organization was soon followed by the West Coast Lumber Commission, the Nonferrous Metals Commission, the Trucking Commission, the Shipbuilding Commission, the Newspaper Printing and Publishing Panel, the War Shipping Panel, the Meat Packing Commission, the Steel Commission, and the Northern and Southern Textile Commissions. The panels were empowered only to make recommendations to the National Board or to the regional boards whereas the Commissions made final decisions subject only to appeal to the National Board. The jurisdiction of the regional boards did not extend to industries under the jurisdiction of the commissions. The NWLB delegated jurisdiction over voluntary and dispute cases in the building and construction industry to the Wage Adjustment Board of the Department of Labor. Many government agencies were also empowered to approve wage and salary changes for their own employees; the agencies were required only to make monthly reports of their rulings to the Board.

As finally organized, the National War Labor Board and its component parts had four basic functions to perform. First, the Board was to decide dispute cases. Second, it was to achieve conformance with its directive orders in dispute cases. The Board called this function "compliance." Third, it was the duty of the Board to stabilize wages through its power to approve adjustments in wage rates. Fourth, it was to achieve conformance with its principles of wage stabilization. This function was called "enforcement" to distinguish it from compliance in the dispute cases. The administration of these four basic functions -- dispute settlement, compliance, wage stabilization, and enforcement -- was the responsibility of the National War Labor Board until the end of the war.

REGIONAL BOARD

The Second Regional War Labor Board was the first regional board to come into existence. It was formally constituted on February 7, 1743. Region II had originally contained the states of New York and New Jersey, but, during the transition from a Regional Advisory Board to a Regional War Labor Board, twelve counties in southern New Jersey were transferred to the jurisdiction of Region III which had its headquarters in Philadelphia. A variety of factors prompted this change: travel difficulties and the schedules involved, the distance from the counties to the two headquarters cities, and, most important, the very high case load of the Second Region.

The National Board attempted to arrange regional boundaries in an effort to equalize the work load, but in this it was unsuccessful. It was later shown that the percentage of voluntary cases decided by all regional boards varied from 2.2 in Region IX and 2.4 in Region XII to 15.4 in Region VI and 16.7 in Region II. The percentage of the total number of dispute cases decided by all regional boards varied from 2.2 in Region IX and 2.8 in Region XII to 16.6 in Region VI and 13.0 in Region II.

Each regional office was organized according to a basic pattern imposed by the National Board. At the top of the regional organization chart appears an "office of the board." The office of the board included the board members and their administrative assistants, the boar'd recording secretary, and a director of information.

Four coordinate divisions were below the office of the board. First, the wage stabilization division was responsible for processing the wage issues in voluntary and in dispute cases. Second the disputes division was responsible for processing dispute cases and, generally, for compliance with the no-strike, no lock-out pledge. Third, the legal division was responsible for giving general legal advice, for reviewing the jurisdictional decisions of the Wage and Hour Division, and for enforcing wage stabilization regulations. Fourth, a division of administrative management was responsible for the general problems of internal administration- organization, processes, record control, finance, and personnel. Itw as within this structure, that the staff of the regional war labor board worked.

The structure of the Regional War Labor Boards duplicated that of the National Board, and the NWLB early decided to make the Board's regional directors the chairmen of the regional boards. The chairman then assisted the National Board in selecting the public members. Labor members were chosen through the CIO and AFL structures with formal recommendations coming through the labor members of the National Board. The chairmen made suggestions for the appointment of industry members, but responsibility for formal recommendation rested with industry members of the National Board. National business organizations such as the Chamber of Commerce and the National association of Manufacturers, assisted the industry members by suggesting business men who might be willing to serve.

The regional boards were established with all the general powers of the National Board. The authorization read in part:

The Regional War Labor Board is thereupon vested with all the powers of the National War Labor Board subject to conformity with the policies and rules laid down by the National War Labor Board..

The methods by which the regional board acquired jurisdiction over voluntary and dispute cases were quite different. Voluntary wage stabilization cases were submitted directly to the regional board by the Wage and Hour Division field offices. Dispute cases, however, had first to be certified to the National Board in Washington by the Secretary of Labor. The New Case Committee of the NWLB then determined what action the Board would take on each case. It could use a board agent to make a preliminary investigation, return the case to the Conciliation Service, retain the case itself, or direct a regional board or an industrial commission to assume jurisdiction.

The regional boards, however, were clearly instructed never to send a person to the scene of a strike, not to promise certification, and not to attempt the settlement of a strike until the National Board had given jurisdiction over it. Regional boards might get information on strikes or lock-outs, but only by means of "telephone or telegraph". When a regional board first heard of the possibility of a threatened strike or lockout, they were to notify the U.S. Conciliation Service and the National Board.

When the NWLB turned into a dispute case over to a regional board, four general types of action were possible. The regional board, after studying the case, might send it back to the National Board with the recommendation that the NWLB should not have exercised jurisdiction. The regional board might return the case to the parties with the instructions that they continue negotiations in order to reduce the number of issues presented. After further discussion between the parties, the regional board could again exercise jurisdiction. The regional board might refer the case back to the local office of the US Conciliation service, which would assist the parties in further negotiation. If the local office of the Conciliation Service failed to mediate the dispute, it would again refer the case to the regional board. Lastly, the regional board might simply begin to process the case.

The first step in processing a case was to determine the facts and issues in the case by allowing the parties to state their respective positions. In keeping with the tripartite structure, the regional board utilized tripartite panels in the field to hear the cases. These tripartite panels were used more often than any other type of fact-finding method. Since the panels heard the cases in the city or area where the dispute was located, panel members were usually chosen from the local area. Labor and industry names for general panel lists were supplied by union internationals and federations and by the state manufacturers' associations. Public members for the panel lists were selected by the public board members. The public representatives on the panels were usually people associated with colleges and universities, although practicing attorneys and clergymen were also sometimes used. After a hearing had been concluded, the panel made its report and recommendations to the regional board.

Another fact finding method that was frequently used by the regional boards, was the use of a "hearing officer". A hearing officer was a single person assigned to hear the disputants and to report the facts and issues involved in the case. He might be a local representative like most public members of panels, or he might be a staff member of the disputes division. Although the National Board frowned upon the use of hearing officers, Region II made extensive use of them, as did some of the other regional boards. Region X never used hearing officers.

Where encouragement was the rule, the regional board arranged to have the Conciliation Service officials suggest hearing officers. Hearing officers were used only for cases in which the disputed issues were few, in which there were no "hotly contested" issues, or in which highly technical issues were involved. Region II sometimes used wage analysts as hearing officers when the dispute involved technical wage issues that were the specialty of the particular analysts. Region II also authorized its new case committee to assign heaering officers in all cases that involved fewer than on ehundred employees, "whether or not a panel has been waived by the parties," as the National Board's rules of procedure required. Where the disputants objected, they could complain to the New Case Committee. As a result, of all the dispute cases heard in Region II, 40 per cent were heard by hearing officers.

In addition to the use of panels and hearing officers, regional boards used two other methods to gain the facts and cull the issues in dispute cases. When a case involved very few issues (especially non-wage issues) a regional board might dispense with an oral hearing and ask each disputant to submit his case in writing. This method was known by the name of "joint brief". Some regional boards occasionally dispensed with a pre-hearing entirely; a full board would hear the parties present their positions. Neither of these methods was used extensively.

The use of hearing officers was often justified in terms of savings in cost and of time in processing cases. The costs per day to have a tripartite panel hear a case averaged approximately $112 as compared to $55 for a hearing officer. A hearing officer usually averaged 80 days in presenting the case to the board whereas a panel took 100 days.

Advocates of the tripartite panels argued that in the long run the panels were more efficient. The panel members were more able to encourage the parties to bargain collectively, and the results achieved by collective bargaining were longer lasting and reduced the number of issues that the boards had to settle. Panels also offered a psychological advantage. The parties were said to "feel better" about their cases when they had a representative on the panel. It was also maintained to encourage recalcitrant employers and unions to comply with board orders; tripartite panels laid the groundwork for further tripartite action.

When a regional office received a hearing officer or panel report, the disputes division analyzed it, summarized it, and presented it to the board for action. This specialized job was usually performed by a review and analysis section of th edisputes division. The regional board then made its decision and a directive order was issued embodying its findings and conclusion. With each directive order issued by a regional board went a copy of the NWLB's "Rules of Appeals" which explained the Board's reconsideration and appeals procedure.

When the termination report for the Second Regional War Labor Board was written on December 26, 1945, the Board had disposed of 2,248 dispute cases. No cases remained open for action. Region II had processed 76,100 voluntary applications for permission to make wage adjustments, of which only 47 cases remained open for consideration. These cases, along with some remaining enforcement matters, were transferred to the newly organized National Wage Stablization Board for determination.

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NWLB Region II Office Files and Cases #5311. Kheel Center for Labor-Management Documentation and Archives, Cornell University Library.