Merit?

In thousands of U.S. firms, where union & management bargain out the workers' hour and wage scales, the boss each year rewards outstanding employees with independent merit raises above the scale. Last week the U.S. Supreme Court spiked the practice. Henceforth, said the court in effect, a company whose workers are covered by a union contract must, on demand, consult the union before giving merit raises.

The Supreme Court was sitting in judgment on a lawsuit involving Chattanooga's tiny J. H. Allison & Co. (meat packers). Until three years ago, Allison had considered it sound business practice to boost its best workers' pay above the general union scale. Then it ran up against some unexpected opposition. The company, said Local 402, Amalgamated Meat Cutters and Butcher Workmen of North America, A.F.L., had no right to single out workers for special raises without consulting the union.

When the National Labor Relations Board upheld the union, Allison appealed to the courts. The lower courts upheld NLRB. By refusing to review the decision, the Supreme Court, in effect, approved NLRB doctrine that merit raises are not merely rewards for good work, but also changes in the pay scale, therefore subject to collective bargaining under the Wagner Act.

To many a businessman this looked like sawing one of the strongest props from under the incentive wage system. All businessmen know that merit raises are potent stimulants to good work, particularly in businesses where production cannot be measured by articles produced (e.g., on newspapers, on the stage and in offices). The decision affected new as well as old employees. Labor experts now wondered whether an employer, for example, could still legally hire new help at more than the contract minimums unless the union was consulted.

Furthermore, it was plain to legal eagles that the ruling also affected non-union employees; under the Wagner and Taft-Hartley laws a union with a majority in the shop is the bargaining agent for all employees, whether they belong to the union or not. Said the New York Times: "The principle [established by the court] is a hazardous one in any kind of a free enterprise economy--free enterprise for the employee, as well as the employer. It takes from the resourceful employee . . . his chance individually to increase his earnings."

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