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compulsory union membership is not necessary in order for the unions to enjoy financial success from their endeavors. The unions need no further assistance than they already have under the great grant of powers given to them under prevailing Federal legislation. It is the individuals themselves, and the small businessman, who need protection of Congress in the enjoyment of all rights guaranteed to them under the Constitution of these United States, which promises that they will have full enjoyment of their rights guaranteed therein.
I therefore recommend to this committee that it guarantee to the individual his rights of free choice, so as to make this act consistent to the acts of courts, Federal agencies, and Congress itself, by keeping section 14(h), and thereby assist in maintaining this era of the individual.
The State chamber of commerce organizations in whose behalf I have been specifically authorized to testify are listed below:
Alabama State Chamber of Commerce.
Mr. Gatz. Our town of Paragould is one of 10,000 persons in a county of 25,000. My company was organized in 1950 with $20,000 capital stock, 5 employees, and 3,200 square feet of manufacturing space. I am trying to give you a background of how small business can be.
In 1962, my employees elected to affiliate with the IAM.
Now what my employees think of the idea of national legislation to abolish 14(b) is attested by their petition which is attached to this statement, and it reads as follows:
We, the undersigned, being hourly wage earners, believe that section 14(b) of the Taft-Hartley Act should not be revoked.
The right of the individual to decide for himself is the most sacred right Congress should strive to preserve.
We believe the elimination of section 14(b) of the Taft-Hartley Act would violate every principle for which America stands.
The petition is signed by all 33 employees.
In our community we have 3 industries employing 100 people or more. These industries are in our community because our people built the plants through the medium of private contributions augmented by private capital loans. These plants which they lease to these companies in order to create jobs for our people who have been displaced by the mechanical or technological revolution that has beset farming since the end of World War II.
Now, I repeat, the people, not the State, not the county government, and not the Federal Government recognized a need, and the people took positive action to remedy those needs.
As a result today, our county population is up 30 percent over 10 years ago. Our bank deposits are up 92 percent. Industrial jobs are up 155 percent. We have provided 2,100 jobs in our community. Industrial payrolls are up 200 percent--that is a $6 million dollar figure annually. Our farm employment in our county is 4,100.
Gentlemen, this is what free men in a free environment can accomplish for themselves.
Need I remind you that this country didn't get where it is today because of laws, but because of the actions of its people. Great Society can't be built by a government and you do not need to be a history student to recognize these facts.
They are going on today. A Great Society cannot be imposed upon a society-a Great Society will evolve from a people, and how a free choice can be a detriment to the national labor movement is a mystery to us.
I think it is rather ironic that 100 years ago the industrial North derided the South for having slavery. Today when 10 out of the 19 "right-to-work" States are of the South, the industrial North abhors the freedom and individuality of the same people.
If this proposed legislation is enacted, 54 million Americans who live in these 19 States will be immediately slapped in their economic faces by the Federal hand. That's one-third of our population, that is reduced to the servitude of union dictation at the whim of the Federal Government to repay a campaign promise.
This is not just a matter affecting the 54 million residents of the 19 States having "right-to-work” laws. This proposed legislation would preclude the people of the 31 remaining States from exercising their privilege of changing their minds.
Recently we had an experience with the State of Indiana through a public referendum repeal of their State "right-to-work” constitutional acts.
Last year the people in Oklahoma voted down a proposed constitutional amendment which would install a "right-to-work” feature in their constitution. We think that the people of Indiana and the people of Oklahoma have what they want by their choice—through a truly democratic process.
In closing, I would like to reiterate the words of two rather great and immortal Democratic Presidents. Mr. Roosevelt in 1932 in his commonwealth address stated:
A government must so order its functions as not to interfere with the individual.
And Mr. Truman in 1949, when he introduced his Fair Deal message to Congress said:
Democracy maintains that government is established for the benefit of the individual, and is charged with the responsibility of protecting the rights of the individual and his freedom in the exercise of his abilities.
I appeal to this committee and to the Senate as a whole with the question: Has our democracy arrived at the point wherein the people are too dumb to know what is good for themselves and consequently do they need a benevolent legislature to watch over them? I pray not.
Senator McNAMARA. Thank you very much, Mr. Gatz. We appreciate your being here this morning. You made a fine contribution to our record, you can be sure your viewpoint will be given consideration.
Mr. Gatz. Thank you.
Senator Prouty. First let me congratulate you. As a representative of your chamber of commerce, I think you certainly did an excellent job.
Mr. Gatz. Thank you.
Mr. Gatz. That is correct.
Senator Prouty. Now, who instigated the petition which you attached to your statement?
Mr. Gatz. The petition that is attached to my statement came about in the following manner: when an appeal came from our State chamber of commerce to represent the State of Arkansas at the House hearing I wanted to make certain myself that I was on firm ground. So I called a general meeting of my entire organization-all the employees of my company, 33 of them-and I explained to them that I had been asked to go to Washington to appear before the House Labor Subcommittee in behalf of retaining section 14(b).
I wanted to know what my employees wanted me to do. I did not feel like I would be morally capable of coming to Washington and leclotura personal view because I do not think that this is what the
After discussing this thing, the request to come to Washington, I told the men that I would prepare a statement which would be a very simple statement of fact and it would be available for them if they cared to sign it.
You can see for yourself that they signed it. Now, I can say this is a pretty risky thing, as you can well imagine, if you have any experience with the National Labor Relations Board, to do what I did, but I personally felt that this was bigger than the NLRB; or anybody or anything. It was just bigger than this; I had to take the risk to know what my employees wanted and this is how it came about.
Senator PROUTY. I am sure there was no intimidation on your part but the fact remains you were the employer and obviously your employees knew your general feeling about the matter.
Mr. Gatz. That is correct.
Senator PROUTY. And conceivably some of them perhaps felt that they had no alternative other than to sign.
Mr. Gatz. Some of them did not sign.
Mr. Gatz. There are some that are not on there. Actually at the time this thing was gathered, we had more employees, if my statement deceives you.
I maintain a minimum of 33 the year around. Some did not sign.
Senator PROUTY. The employees that did not sign--are they--the employees who are no longer there?
Mr. Gatz. No, actually we have more employees now than we had at the time; everybody is still there, Senator.
Senator PROUTY. Thank you.
Sir, thank you for being here, we are very happy to have you present your testimony this morning. You may proceed in your own manner.
STATEMENT OF THOMAS E. SHROYER, AMERICAN RETAIL FED
ERATION; ACCOMPANIED BY HARRY F. BROWNE, AMERICAN RETAIL FEDERATION
Mr. SHROYER. Thank you, Mr. Chairman, first I would like permission to insert my statement in its entirety into the record because we do not intend to read it.
Senator McNAMARA. We are happy to have the complete statement for the record at this point.
Without objection, it will be so included.
PREPARED STATEMENT OF THOMAS E. SHROYER, THE AMERICAN RETAIL
FEDERATION Gentlemen, thank you for the opportunity of appearing before you today for the purpose of presenting to you the views of the American Retail Federation on the proposed legislation under consideration. The American Retail Federation is comprised of some 45 statewide and 31 national associations of retailers and. as such, represents the views of the retail industry of all types and sizes.
One of the most important committees of the American Retail Federation is its employee relations committee. That committee's membership is drawn from the various retail associations which make up the federation and from individual companies, both large and small, which are individual members of the federation. That committee has initiated a number of policy statements on Federal labor legislation. Such statements were submitted, in accordance with the rules of the federation, to all its constituent groups in the form of a ballot, and the entire membership formally approved by this ballot procedure the policy statements initiated by the employee relations committee. While some of these policy statements have been altered from time to time by the required procedure, two policy statements have remained unchanged since 1953. Both apply to the legislation now before this committee.
They are: (1) a statement that the State's right to prohibit compulsory unionism should not be repealed; and (2) a statement that any union should be required to demonstrate its majority in a secret ballot election conducted by the NLRB before such union is accorded bargaining representative status. Both policy statements were considered at length at a meeting of the full employee relations committee within the last 60 days. Both were reaffirmed by such committee and by the membership of ARF at its annual meeting held during the same week.
We believe your committee must consider the right of employees to a secret ballot election in any recommendation it may make to the Senate which would repeal or modify section 14(b)). If the Federal law is to permit compulsory membership contracts throughout the United States, surely the union must represent the majority of the employees. We submit that under present NLRB interpretations many employers are ordered to bargain with a union which the majority of the employees do not wish to represent them. We propose to develop this point at length, but first we wish to tell this committee why our membership feels so
strongly that section 14(b) should remain unchanged. Proponents of the repeal of section 14(b) argue that they merely desire to create the situation where unions and employers may “freely” enter into compulsory membership contracts. As a practical matter the word "freely” is a misnomer. There is bargaining on wages and fringe benefits. There is no bargaining on the union shop. The employer is reduced to the position of saying “Yes” or “No." If he says “No” and sticks to it he must expect a strike or picketing. A retailer is more vulnerable to strikes and picketing than employers in other industries. When his store is shut down or his customers do not cross a picket line, he loses many customers whom he may never regain. Those lost sales are never recouped because competitors can satisfy the customer's needs.
Therefore the small retailer is easily forced to agree to compulsory membership and dues checkoff. The same is true of almost all of the giant retail chains.
We must admit that too often employers quickly agree to compulsory membership in exchange for a better break on wage and fringe benefits. Thus the employees lose. Furthermore, when recognition is based on a card check and the union does have a card majority, the employee has an additional loss. He has heard only the union arguments. There has been no “free speech.” Had he heard both sides and then voted he may well have voted for no union.
Proponents also argue 19 States versus 31 States as a ground for repeal of section 14(b). However, if this section is repealed Congress has taken away the right of the 31 States ever to enact a so-called right-to-work law.
We are also told that section 14(b) must be repealed in the interest of uniformity; We are not sure that there is always virtue in uniformity. For example, in the interest of uniformity, Congress could pass a law that once a union is certified, compulsory membership is mandatory in all contracts. But would anyone defend that kind of uniformity? Again, Congress could pass a law forbidding any form of compulsory membership. That would accomplish uniformity, but we doubt universal approval.
Prior witnesses speaking for repeal of section 14(b) argue that a union shop contract is merely the carrying out of the principle of majority rule. It is the very existence of a nonmajority which makes union shop, compulsory membership contracts most objectionable. The so-called sweetheart contracts, where the union obtains a compulsory membership contract for quick recognition, without expending the time and effort of an organizing campaign, are still with us. The employees obtain little or nothing in the way of increased benefits. The union and the employer may go through the motions of a card check to make everything appear legal and thus prevent another union more acceptable to the employees from obtaining bargaining rights. Card checks become discredited because of sweetheart contracts, but the NLRB has returned to card checks to order bargaining in the absence of an election. Proponents of repeal of section 14(b) who argue that union shop contracts carry out the principle of majority rule can hardly object to legislation which makes it conclusively clear that there is a majority. Without belaboring the point and repeating arguments of others on the principle involved, we want to say that the retail industry feels strongly that section 14(b) should not be repealed or modified.
On June 14, 1965, Senator Javits introduced a bill, S. 2133, which deserves earnest consideration by this committee. The Senator has recognized the growing evil of requiring bargaining on the basis of card checks. His bill also eliminates the only possible argument which could be made against the election requirement; namely, that an employer might destroy a real majority by unfair labor practices prior to the election.
Reliance on card checks instead of secret ballot elections by the NLRB is increasing. If it is not slowed down, sections 9 (election machinery) and 8(c) (free speech) may as well be repealed. A March 15, 1965, article in the U.S. News & World Report states the present NLRB policy with respect to the right of employees and employers to an election. T cases cited by the author are recent and the trend to reliance upon card checks is increasing. We have checked the cases cited and found the facts to be accurately stated. We request that this article be printed in the record of this hearing.
While Congress is struggling to secure the right to vote for all Americans, the NLRB is eliminating such right for the American workingman in determining union representation. The card check once regarded as the preliminary to sweetheart contracts has in the Board's opinion become most respectable.
In 1947, the Congress clearly indicated its objection to card checks when it deleted from section 9(c), 'or utilize any other suitable method to ascertain such representatives.”