Railway Labor Act Provides for Mediation of Labor Disputes Summary

  • Last updated on November 10, 2022

The 1926 Railway Labor Act set up mechanisms for mediating labor disputes acceptable both to organized labor and to the railroad companies, in the process guaranteeing the right to collective bargaining for workers.

Summary of Event

The 1926 Railway Labor Act brought peace to an industry plagued by strikes and violence. It created machinery acceptable to the railroad carriers and labor to mediate their disputes while guaranteeing labor’s long-sought goal of collective bargaining. The carriers submitted to these terms in exchange for excluding specific bargaining agents (unions) for labor from the act. This enabled the railroads to maintain their company unions, despite the intent of the act. [kw]Railway Labor Act Provides for Mediation of Labor Disputes (May 20, 1926) [kw]Labor Act Provides for Mediation of Labor Disputes, Railway (May 20, 1926) [kw]Act Provides for Mediation of Labor Disputes, Railway Labor (May 20, 1926) [kw]Mediation of Labor Disputes, Railway Labor Act Provides for (May 20, 1926) [kw]Labor Disputes, Railway Labor Act Provides for Mediation of (May 20, 1926) Railway Labor Act (1926) Labor law;collective bargaining rights Collective bargaining rights [g]United States;May 20, 1926: Railway Labor Act Provides for Mediation of Labor Disputes[06660] [c]Business and labor;May 20, 1926: Railway Labor Act Provides for Mediation of Labor Disputes[06660] [c]Laws, acts, and legal history;May 20, 1926: Railway Labor Act Provides for Mediation of Labor Disputes[06660] Coolidge, Calvin Daugherty, Harry M. Harding, Warren G. Hoover, Herbert Richberg, Donald Randall

The origins of the Railway Labor Act lie in a fiercely contested strike in 1922. That action stemmed from wage cuts ordered by the Railroad Labor Board Railroad Labor Board (RLB), an agency charged by the 1920 Transportation Act Transportation Act (1920) with monitoring and regulating wages and rates in the railroad industry. Staffed by appointees of President Warren G. Harding, who held strong antilabor views, the RLB rescinded wage increases granted in 1920. This action hit hardest the shopcraft and other workers not directly included in operating the railroads. At the same time, the RLB tolerated the Pennsylvania Railroad’s defiance of the RLB’s orders that carriers restore union contracts that they had unilaterally abrogated and that the carriers also dismantle recently established company unions. Fearing for their long-term survival, the shopcraft and nonoperating unions struck the railroad carriers on July 1, 1922, primarily over the issues of wages and hours. Labor strikes;railroad industry Hurt least by the reductions and conciliated by the RLB’s promise of no further wage cuts, the operating employees remained on the job.

Soon the strike took a new turn, as the carriers demanded an end to seniority rights, the very heart of union strength. In order to sustain operations, the companies recruited scores of strikebreakers to fill the positions held by striking workers. By eliminating seniority, the carriers eased their task of rehiring strikers and, as the unions asserted, created a massive surplus of railroad workers. By this measure, the railroad companies had raised the stakes from mere wages to union survival. The unions complained bitterly about the RLB’s decision to urge the carriers to try to break the strike and to allow the companies to broach the seniority issue.

Working behind the scenes, Secretary of Commerce Herbert Hoover proved unable to persuade the carriers to negotiate. The refusal angered Harding. By the fall of 1922, Harding had reversed his earlier stand. Frustrated by the unions’ continued rejection of the RLB demands for wage cuts, the president placed the blame for the prolonged strike squarely on the shoulders of organized labor. By the late summer, he had embraced Attorney General Harry M. Daugherty’s position of the strike’s illegality and agreed that only drastic action could prevent the country’s transportation system from grinding to a halt. With presidential backing, Daugherty used a sweeping injunction to end the strike action, forcing compliance with the RLB wage cuts. The injunction, issued by Judge James Wilkerson of the District Court of Chicago on September 1, 1922, exceeded past judicial orders by prohibiting picketing and even minimal communications among the strikers and their supporters. The measure outraged many moderate Republicans such as Hoover, who had advocated a cooperative rather than confrontational solution to the strike.

Faced with a hostile government and determined carriers, the unions had no choice but to return to work. Most unions followed the Baltimore & Ohio plan suggested by Hoover ally Daniel Willard, Willard, Daniel president of that railroad. The plan entailed negotiating with the companies on a separate basis in exchange for salvaging their seniority rights.

In the wake of this massive confrontation, union members and moderate Republicans agreed that the industry needed a new mechanism to cope with grievances and disputes. The Special Committee Representing Railroad Labor Organizations prepared an initial report that outlined labor’s objectives in its relationships with the carriers. Union representatives turned this document over to Donald Randall Richberg, who had earned a reputation as the leading labor attorney for his work in the 1922 strike. Charged with resolving the problems inherent in the carrier-union relationship, Richberg integrated these recommendations into his proposed legislation aimed at establishing new negotiating procedures.

Richberg’s early drafts inevitably sparked controversy. The original proposal, known as the Howell-Barkley Bill, contained a provision that the carriers found particularly objectionable. It designated sixteen railroad labor organizations as specific bargaining agents for the rail employees. Acceptance of this condition would acknowledge carrier recognition of the unions, a position the railroad companies fiercely resisted. The two parties worked out a compromise, which President Calvin Coolidge signed on May 20, 1926.

The final version of the act disbanded the RLB and substituted new procedures for settling disputes. As a first step, these included conferences between the two parties to iron out differences on wages, hours, and other items in the contract. If the parties remained deadlocked, an adjustment board, which would handle disputes over interpretation of the terms of a contract, assumed jurisdiction. The act was vague as to whether a national board (favoring the unions) or a systemwide board (implicitly allowing for company unions) would hear the grievances. The carriers seized on the ambiguity of the act to maintain their employee representation schemes and bring grievances to systemwide boards. As late as 1933, 147 of the 233 largest carriers still maintained company unions that predated the 1926 law. The law included neither the means to enforce decisions nor the power to inflict penalties on guilty parties, therefore emboldening the railroad carriers. The weaker shopcraft and nonoperating workers proved most vulnerable to the company union strategy.

The National Mediation Board National Mediation Board was to intervene in disputes involving changes in a contract. The act required either party to provide a thirty-day prior notice before such changes went into effect. Once that period elapsed, the board would step in to negotiate a settlement. Arbitration stood as the absolute last choice of the board and occurred only if both parties agreed. If the mediation board perceived that the dispute endangered the transportation system, it could so inform the president, who could appoint an emergency board to deal with the crisis. The emergency board lacked enforcement power. The National Mediation Board’s course of moderation and accommodation contrasted sharply with the aggressive and hostile character of the RLB.

The Railway Labor Act of 1926 established industrial peace throughout the railroad industry and acted as a model for other industries seeking accommodation between company owners and union advocates. Its recognition of collective bargaining as an employee right opened alternatives for workers throughout the economy who had no access to any form of bargaining procedure.

Significance

The 1926 Railway Labor Act marked an important turning point in organized labor’s drive for recognition and the right to collective bargaining. It drew on earlier legislation such as the Erdman and Newlands Acts and played a critical role in the formulation of the 1933 Bankruptcy Act, Bankruptcy Act (1933) the 1934 amendments to the Railway Labor Act, and the 1935 Wagner Act. Wagner Act (1935) National Labor Relations Act (1935)

The Erdman Act of 1898 Erdman Act (1898) attempted to restore equality to the bargaining process between the railroad carriers and organized labor. The act applied only to operating employees—specifically, engineers, firemen, conductors, and trainmen—yet it moved toward establishing mediation procedures that dealt fairly with unions. It banned the “yellow-dog contract,” Yellow-dog contracts[Yellow dog contracts] which threatened workers engaged in union activity with dismissal. The act also outlawed blacklisting, which permanently barred union supporters from employment through a system of files that carriers maintained on dissidents. A court test struck down these last two provisions. The 1913 Newlands Act Newlands Act (1913) sought to keep alive the negotiation process by setting up the U.S. Board of Mediation and Conciliation, which again dealt only with the operating workers.

World War I created an atmosphere more favorable to union demands. The urgency of continued production, the need for industrial peace, and the government’s desire to placate unions sparked administrative and legislative decisions that favored organized labor. Even before the declaration of war, the railroad unions had won the eight-hour day with the passage of the Adamson Act Adamson Act (1916) in 1916. During the conflict, the federal government assumed control of the nation’s rail system. The government promoted standard wages and hours, long favored by the rail unions, and ensured that union members remained free of discriminatory practices by the carriers.

The unions found federal control far more in tune with their interests than was private ownership. The end of the war and the specter of company interests reclaiming control worried the unions. Quickly, their representatives brought forth the Plumb Plan, Plumb Plan which outlined a scenario in which the unions, the bondholders, and the shippers exercised administrative control of the industry. Organized labor clearly wished to hold on to the gains made during the war and to sustain what the workers perceived as favorable conditions.

The war’s end proved disappointing to organized labor. Collective bargaining faced a sustained assault by carriers. Railroads pushed for open shops, in which workers did not have to belong to unions, and workers saw a resurgence of yellow-dog contracts. The passage of the Railway Labor Act transformed the hostile environment that menaced the very existence of unions. The act salvaged the union goals first articulated in the Erdman Act and pursued through World War I. It revived collective bargaining and ended yellow-dog contracts in the rail industry while guaranteeing the long-term survival of unions. Its success provided a model that greatly influenced subsequent legislation regarding labor relations through the mid-1930’s and acted as a beacon for pro-union forces in the economy.

The revision of the 1890 Bankruptcy Law in June of 1933 demonstrated the continued influence of the Railway Labor Act. The Great Depression forced many railroads to the brink of ruin. Bankruptcy offered one alternative for troubled companies. It also opened the possibility of companies’ suspension of all union contracts. To prevent such an action, the unions insisted on amendments that enabled the terms of the Railway Labor Act to prevail despite economic contingencies and secured the right to self-organization free from carrier intrusion. The Emergency Railroad Transportation Act of 1933, Emergency Railroad Transportation Act (1933) with a one-year life, reiterated these provisions. Designed to promote efficiencies and reduce waste in the industry, that act ensured that no workers would lose their jobs as a result of measures enacted under this law.

In 1934, the unions sought permanent legislation to create a more stable workplace. Specifically, they intended to change the conditions that allowed company unions to persist in more than half the carriers. The 1934 amendments to the Railway Labor Act guaranteed employees the right to organize independent of carrier influence. The act also established the National Board of Adjustment, which acknowledged the unions as bargaining agents for the workers and created a new board of national mediation. The act gave the president the power to appoint members to this board, subject to congressional confirmation. The mediation board also exercised the authority to certify representatives from either side, a measure that preserved the autonomy of the unions. Equally as important, workers had the right to select their representatives through secret ballots, which isolated them from company pressures.

The success of the rail workers was illustrated most prominently in the formulation of the Wagner Act of 1935, which was the culmination of a drive for collective bargaining throughout the economy. Already the National Industrial Recovery Act National Industrial Recovery Act (1933) (NIRA) had incorporated boards of mediation and arbitration that had assumed a central role in the rail industry. Donald Richberg, who oversaw the writing of the Railway Labor Act, also participated in the preparation of the NIRA, so it is not surprising that there are similarities between the 1926 measure and the NIRA.

The Wagner Act, or National Labor Relations Act, replaced the NIRA, which was found to be unconstitutional. It repeated many of the staples of the Railway Labor Act and its 1934 revisions. Company unions and yellow-dog contracts fell by the wayside, and the law recognized the right of workers to organize, free of company interference, throughout all industries. Collective bargaining assumed a central role in labor-company relations. The Wagner Act, unlike the Railway Labor Act, acknowledged closed shops, in which workers had to belong to the union before beginning work, but these were subsequently outlawed in the Taft-Hartley Act of 1947. By the mid-1930’s, the unions had achieved their long-sought autonomy. Railway Labor Act (1926) Labor law;collective bargaining rights Collective bargaining rights

Further Reading
  • citation-type="booksimple"

    xlink:type="simple">Babson, Steve. The Unfinished Struggle: Turning Points in American Labor, 1877-Present. Lanham, Md.: Rowman & Littlefield, 1999. Concise and comprehensive history of the American labor movement. Includes notes and index.
  • citation-type="booksimple"

    xlink:type="simple">Bernstein, Irving. The Lean Years: A History of the American Worker, 1920-1933. 1960. Reprint. New York: Da Capo Press, 1983. One of the most thorough accounts of labor’s activities in the 1920’s and early 1930’s. Provides a complete account of the railway union-carrier relationship and explains the positions of the participants in the 1926 legislation. Contains one of the best and most detailed descriptions available of the various parts of the Railway Labor Act.
  • citation-type="booksimple"

    xlink:type="simple">_______. Turbulent Years: A History of the American Worker, 1933-1941. Boston: Houghton Mifflin, 1970. Chapters 5 and 7 discuss the amendments to the Railway Labor Act and the Wagner Act, pinpointing the influence of the original legislation in the formulation of national labor policy. One of the most thorough accounts available on the labor-company debates of the 1930’s.
  • citation-type="booksimple"

    xlink:type="simple">Breen, W. J. Labor Market Politics and the Great War: The Department of Labor, the States, and the First U.S. Employment Service, 1907-1933. Kent, Ohio: Kent State University Press, 1997. History of the federal government’s involvement in labor issues through the critical period from before World War I through the early years of the Great Depression. Includes lengthy bibliography and index.
  • citation-type="booksimple"

    xlink:type="simple">Fleming, R. W. “The Significance of the Wagner Act.” In Labor and the New Deal, edited by Milton Derber and Edwin Young. New York: Da Capo Press, 1972. Provides a concise description of the various influences on preparation of the NIRA and the Wagner Act. Serves as a useful introduction to the debates of the era.
  • citation-type="booksimple"

    xlink:type="simple">Foner, Philip S. On the Eve of America’s Entrance into World War I, 1915-1916. Vol. 6 in History of the Labor Movement in the United States. New York: International Publishers, 1982. Provides a systematic description of labor conditions in the United States just prior to the nation’s participation in World War I. Includes a succinct description of the legislative history of labor relations in the rail industry from the Erdman Act of 1898 through the Adamson Act of 1916.
  • citation-type="booksimple"

    xlink:type="simple">Jacoby, Daniel. Laboring for Freedom: A New Look at the History of Labor in America. Armonk, N.Y.: M. E. Sharpe, 1998. Examines opposed ideas concerning freedom as manifested in labor history in the United States. Includes bibliography and index.
  • citation-type="booksimple"

    xlink:type="simple">Keller, Morton. Regulating a New Economy: Public and Economic Change in America, 1900-1930. Cambridge, Mass.: Harvard University Press, 1990. Chapter 3 contains a brief discussion of the development of the federal government’s transportation policies from the beginning of the twentieth century through the 1920’s. Stresses the complexity of the rail industry, which is subject to multiple influences. Indispensable source for readers seeking to understand the importance of regulation throughout society.
  • citation-type="booksimple"

    xlink:type="simple">Locklin, D. Philip. Economics of Transportation. 3d ed. Chicago: Richard D. Irwin, 1947. Chapter 12 lists all the relevant railroad legislation for the period, outlining each act in a concise fashion and providing a clear guide to its legal history. The description of the Railway Labor Act does not address the ambiguity of the law that enabled carriers to maintain their company unions.
  • citation-type="booksimple"

    xlink:type="simple">Montgomery, David. The Fall of the House of Labor: The Workplace, the State, and American Labor Activism, 1865-1925. New York: Cambridge University Press, 1987. One of the most analytic and detailed descriptions available of labor relations in general. Includes much information on the rail industry, particularly the activities of the operating unions and their role in the debates on national transportation policy both before and after World War I.
  • citation-type="booksimple"

    xlink:type="simple">Tomlins, Christopher L. The State and the Unions: Labor Relations, Law, and the Organized Labor Movement in America, 1889-1930. New York: Cambridge University Press, 1985. Chapter 4 traces the legal origins of collective bargaining, including brief descriptions of legislation in the rail industry.
  • citation-type="booksimple"

    xlink:type="simple">Vadney, Thomas E. The Wayward Liberal: A Political Biography of Donald Richberg. Lexington: University of Kentucky Press, 1970. Chapter 3 explains in detail Richberg’s role in the formation of pro-union railroad legislation. Provides a thorough account of Richberg’s motivations.
  • citation-type="booksimple"

    xlink:type="simple">Zieger, Robert H. Republicans and Labor, 1919-1929. Lexington: University of Kentucky Press, 1969. Excellent analysis of the influence of the Republican Party in shaping labor’s position in its relationship with the carriers. Particularly effective in explaining the reversal of the Republican Party from hostility toward the rail unions under President Harding and Attorney General Daugherty to the cooperative spirit promoted by Herbert Hoover under President Coolidge and embodied in the Railway Labor Act.

Creation of the U.S. Department of Commerce and Labor

U.S. Supreme Court Ruling Allows Yellow-Dog Contracts

Labor Unions Win Exemption from Antitrust Laws

Norris-La Guardia Act Strengthens Labor Organizations

Wagner Act

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