This Day in Labor History: April 5, 1938

On April 5, 1938, oral arguments began before the Supreme Court in the case of NLRB v. Mackay Radio and Telegraph Company. This case, while technically found in favor of labor, showed the very sharp limits of the Court in defending workers’ rights even at the height of the New Deal, when the decision allowed for companies to hire permanent strikebreakers to replace striking workers.

The silver capitalist John Mackay started what became Mackay Radio & Telegraph in 1884 to provide transatlantic telegraph service. The company expanded into radio and other telecommunications over the years. In 1934, the American Radio Telegraphists Association, which would later change its name to the American Communications Association when it joined the CIO, organized Mackay, starting with the radio operators. By 1935, it had organized quite a bit of the company and wanted a union contract. Of course, Mackay refused. Instead, it threatened to declare bankruptcy if the workers formed a union. The ARTA came back demanding not only union recognition, but a 48-hour work week and a 14 percent pay raise. They could not come to an agreement and the workers went on strike on October 5, 1935. By this time, Congress had passed and President Roosevelt had signed the National Labor Relations Act, guiding American labor relations and forcing companies to negotiate with workers. So the ARTA had hope.

But the strike was poorly planned because, as happens frequently, militant workers in one site generally ran the show and the rest of the workers scattered around the country were far less committed. So while 60 out of 62 employees in San Francisco went on strike, in most of the rest of the country, workers either struck for a day and then went back to work or did not strike at all. By October 8, the ARTA gave up. By this point, all the workers wanted was to go back to work. But Mackay had already replaced 11 of the 60 San Francisco workers. So the company said yes, but not for 11 workers. They could reapply. They did. Seven were rehired. The other four, the union’s biggest activists, were not rehired.

Outraged, the ARTA filed a complaint with the new National Labor Relations Board. The NLRB itself filed a compliant against Mackay. On February 20, 1936, the NLRB ruled that the company had discriminated against the four strikers in refusing to rehire them. It did not make any comment on whether the replacement workers were in fact strikebreakers, as they already worked for the company.

Mackay simply refused to comply with the NLRB’s order that they rehire the four workers. At this time, the constitutionality of the NLRB was in doubt, with companies believing that the Supreme Court would continue throwing out New Deal legislation. This corporate hope would only be dashed in West Coast Hotel Company v. Parrish, decided in March 1937. So when the NLRB decided to go to the courts to defend its decision, it did so gingerly. It was worried that the Court would declare the entire National Labor Relations Act unconstitutional. It wanted rock solid cases. It felt that Mackay qualified. But a panel on the Ninth Circuit ruled 2-1 in January 1937 not to enforce the NLRB’s order. Moreover, the majority decision ruled that the entire NLRA was unconstitutional. But this was an unclear ruling bound for appeal. First, the second judge wrote a concurring opinion that did say the NLRA was constitutional but that the strikers were no longer employees. And the dissenting judge ruled both that the NLRA was constitutional and that the strikers were still employees. Soon after, the Court issued its West Coast Hotel decision and then in April, NLRB v. Jones & Laughlin Steel Company, which explicitly upheld the constitutionality of the National Labor Relations Act. So the NLRB asked for a new hearing given that fact. But the Ninth Circuit continued to decline to enforce the NLRB’s ruling against Mackay.

So this was headed to the Supreme Court. Arguments started on April 5 and continued the next day. On May 16, a unanimous Court (7-0, with Cardozo not participating due to his declining health and Reed having just joined the Court) decided that while the NLRB absolutely had authority, the company could replace the strikebreakers permanently and did not have to hire back the four strikers. Owen Roberts wrote the opinion. He considered most of Mackay’s arguments irrelevant to the case. He also wrote that the strikers were in fact employees. The critical section was Roberts’ language on whether Mackay had committed an Unfair Labor Practice by not replacing the workers:

Although section 13 of the act, 29 U.S.C.A. 163, provides, ‘Nothing in this Act (chapter) shall be construed so as to interfere with or impede or diminish in any way the right to strike,’ it does not follow that an employer, guilty of no act denounced by the statute, has lost the right to protect and continue his business by supplying places left vacant by strikers. And he is not bound to discharge those hired to fill the places of strikers, upon the election of the latter to resume their employment, in order to create places for them.

In other words, the Ninth Circuit’s decision was overturned, but Mackay and any other company were free to replace strikers and not return those strikers to their jobs, no matter how a strike ended.

At the time, with union power growing, the implications of Mackay were not that clear. Most companies did rehire strikers because it would cause too many problems with their unions not to at the end of a labor conflict. But after 1970, with a newly emboldened corporate lobby seeking to recreate the Gilded Age, the impact of which is increasingly clear today, Mackay became weaponized by employers. It became the legal justification for the long-term replacement of strikers and the destruction of unions, first by Reagan during the air traffic controllers strike (although given that the strike was illegal, the legal justification was not hard to muster without this) and then by companies such as Phelps-Dodge, seeking to simply replace union workers. It created room for bad faith bargaining by employers, knowing that a strike might be the best thing that could happen because they could dump their unions entirely.

Mackay finally had to agree to a union contract in 1939. When, in 1948, the workers again struck, Mackay was able to use the decision from a decade earlier to permanently replace 60 strikers.

This is the 264th post in this series. Previous posts are archived here.