NWLB Arbitration regarding Electrical Transcription Manufacturers and American Federation of Musicians

The American Federation of Musicians, AF of L, unilaterally decided the minimum terms and conditions of employment. They never negotiated a contract with a broadcasting, electrical transcription or recording company.



The Union believed that mechanized music was displacing live musicians so they entered into conferences in 1937 with the broadcasting, recording and transcription companies concerning this matter. The conferences resulted in the broadcasting industry accepting the so-called quota agreement, under which the independent stations and stations affiliated with networks agreed to spend more money on staff musicians. The term of this agreement was set at two years, but in 1938 the Department of Justice advised the parties that the agreement was illegal.



In 1938, the Union adopted a policy of "licensing" recording and transcription companies. The license allowed union musicians to work

for these companies on the condition that the companies limit the use of their products to non-commercial purposes. At no time-did the license contain any of the terms and conditions being fixed unilaterally by the union and all licenses being terminable at its will. The courts in RCA Mfg. Company vs Whiteman case held that the limitation on the use of phonograph records which the parties had agreed to could not be enforced. Therefore, the purpose of the license arrangement was largely defeated, but they continued to renew the license until 1942.



The Musicians Union in 1942 decided that the only way to alleviate the unemployment of musicians caused by recorded music was to refuse to work for recording and transcription companies. The union made no demands on the employers, but on August 1, 1942, all union members stopped making records and transcriptions.



Early in August 1942, the Department of Justice charged the union with violation of the anti-trust laws. The complaint was dismissed in

the lower courts on the ground that the controversy was a labor dispute and the union was, therefore, immune from such prosecution. The Supreme Court affirmed this decision.



The next development was a hearing before a subcommittee of the Senate Committee on Interstate Commerce, pursuant to Senate Resolution 276, 77th Congress, second session, regarding the use of mechanical reproduction of music. The hearings were held on a number of days in September and then discontinued until February 1943. The February hearings disclosed for the first time the unions demands. The principle demand involved payment to the unions of an agreed sum on each recording made, and the fund thus created was to be used in various ways for the alleviation of unemployment.



The employers upon hearing the union demands rejected them and took steps to bring the controversy before the National War Labor Board on the grounds that the cessation of work constitutes a work stoppage seriously interfering with the war effort and they asked the Board to terminate the strike.



The War Labor Board refused to terminate the strike and set up a National War Labor Board Panel to conduct hearings. The Panel was composed of: Arthur S. Meyer, Chairman and Public Member; Max Zavitsky, Labor Member; Gilbert E. Fuller, Industry Member. The Panel started the hearings on September 7, 1943 and on September 9 decided to adjourn until September 20, so as the Musician Union and World Broadcasting System could put their verbal contract agreement into written form. The hearing was reconvened on September 21 and then adjourned until September 27. On September 29 World Broadcasting System and Musicians Union signed an agreement. The Panel at this time adjourned until October 20, 1943 at the request of ths parties so that they could negotiate privately. The Panel on various occasions at the request of the parties acted as mediator. When the hearings were resumed on October 20, 1943, six of the seven original companies had signed agreements with the union.



The remaining company, National Broadcasting Co., was joined at this time by two additional companies, RCA-Victor Division and Columbia Recording Corporation, to the proceeding. The Panel finished its hearings on November 22, 1943 and submitted its report and recommendations to the National War Labor Board on March 9, 1944. The National War Labor Board on June 15, 1944 issued its decision on this case.



The unions position in the hearings was that: the Board did not have jurisdiction because there was no strike, no substantial interference

with the war effort, no labor dispute, and the members of the union are not the employees of the phonograph and transcription companies, but of the band leaders, contractors and symphony associations, none of whom are parties to this proceeding; the union demanded that the company pay money into the union's unemployment fund and that the union receive financial rrenumeration for phonograph records made for home consumption and used commercially.



The companies position in the hearing was that: how do you measure unemployment of musicians and to what extent is the nemployment of musicians due to records and transcriptions which fellow union members helped create; the use of an unemployment fund would aggravate rather than relieve unemployment due to the fact that the Musician Union is an open union; the com panies maintained that the unemployment fund is really a wage increase and is contrary to the Wage Stabilization Program; the adoption of the Union's demands would result in the creation of a private system of un employment relief and a undermining of our National Social Security System;

the companies proposed that the Union and the companies unite in pressing for copyright legislation so as to prevent records designed for home use from being used commercially without remuneration.



The Panel besides having to evaluate the demands of both sides had to consider if the Unions demand for an unemployment fund was a "customary" demand or a usual and novel demand which the union was able to impose due to wartime conditions. The N.W.L.B. cannot impose on companies unusual and novel union demands which arise due to wartime conditions.