A bill to outlaw replacing strikers - pending Congressional legislation

Nation's Business, June, 1993 by David Warner

Congress may bar employers from permanently replacing employees who strike for reasons such as wages and benefits.

William A. Stone was on the shop floor of his business, Louisville Plate Glass Co., along with three salesmen and two supervisors, cutting glass to fill customers' orders. Outside the Louisville, Ky., plant, 15 of his 25 employees--members of Local 1529 of the Glass Glazers and Painters International Union--were on strike for higher wages and benefits. The union was seeking an increse that would double Stone's labor costs over three years, he says.

The strike occurred in June 1977, in the midst of double-digit inflation and high interest rates. Stone and the five management employees continued to run the company's normally 15-man shop floor operation for almost a month, hoping the striking workers would back off from their position. "But they hardly gave," Stone says.

After six months on the picket line, the union was still seeking an 80 percent increase in wages and benefits.

The company started losing orders--it lost 50 percent of its volume in the first month ofthe strike. "It became apparent that either we replaced our [striking] employees or we would be out of business," says Stone.

So the firm hired seven new employees as permanent replacements for strikers. Eventually, eight of the strikers crossed the picket line to return to work. Because only seven of the 15 workers who went on strike were replaced, the eight who returned were given back their jobs.

Stone's company survived that labor unrest, primarily because he was able to replace the strikers. And the company has since expanded to three plants--two were added in Georgia--and 100 employees.

Congress, however, is considering a change in the law that enabled Stone's company to survive. Legislation pending in the House and Senate would bar employers from permanently replacing employees who walk off the job for economic reasons, such as wages and benefits.

Employers have been able to hire permanent replacements for economic strikers since 1935, when Congress passed the Wagner Act--also known as the National Labor Relations Act--which governs union organizing and collective bargaining.

The U.S. Supreme Court affirmed that ability as a "right" in a 1938 case, NLRB [National Labor Relations Board] vs. Mackay Radio & Telegraph Co. The high court also ruled in that case that permanent replacements were prohibited if the employer had committed an unfair labor practice, such as provoking a strike to "bust" the union.

The legislation pending in Congress, the Workplace Fairness Act, or striker-replacement bill--it's one of the top priorities of organized labor--would reverse the Supreme Court ruling dealing with economic strikes.

The Clinton administration supports the legislation.

The AFL-CIO and Labor Secretary Robert Reich maintain the legislation is needed to level the playing field between management and labor during contract negotiations. And Reich states that banning permanent replacements is a step toward ending what he and the unions assert has been 12 years of growing distrust between labor and management.

At recent House and Senate hearings on the striker-replacement bill, the labor secretary told lawmakers that "employees suffer as a result of strikes; they are putting their jobs and their livelihoods on the line."

Many labor-law experts, however, believe barring permanent replacements would have grave effects on the collective-bargaining process.

Daniel Yeager, a labor lawyer with the Labor Policy Association, a business-supported Washington, D.C., group focusing on human-resources issues, says the ability of the union to strike and the capability of management to hire permanent replacements are weapons whose "mere presence has the effect of bringing the parties to agreement at the bargaining table." If management lost its weapon, "unions would be able to call virtually risk-free strikes over any issue," says Yeager.

Republican Sens. Nancy Landon Kassebaum of Kansas and Orrin Hatch of Utah are expected to lead the opposition to the bill when it comes up for debate in the Senate. Kassebaum says that denying employers the ability to continue operations during a strike would foster more labor-management strife.

The legislation "will turn the clock back to the era of bitter, prolonged, and divisive strikes, where everyone loses--not only the workers but the economy as well," she says. Kassebaum is the ranking minority member of the Senate Labor and Human Resources Committee, the panel with jurisdiction over the bill in the Senate.

Management would have to accede to the union's demands or try to weather a strike, says John Irving, a partner in the Washington, D.C., law firm of Kirkland & Ellis and general counsel to the National Labor Relations Board from 1975-1979. Irving also believes taht in the absence of any risk that their members would be replaced, unions would be likely to strike more often and for longer periods.

Some industries can afford to take a strike for a while, says Irving. "But there are many, many others that ... simply can't afford to do that; they must continue to operate, or their competitors will be all too happy to permanently take their customers."