In the Matter of the Arbitration

between

NATIONAL ELEVATOR MANUFACTURING INDUSTRY, INC. A WAR D

and

INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS

The undersigned Arbitrator, having duly heard

the parties and having duly considered their allegations,

proofs and arguments,

Dsted:

AWARDS, as follows:

The grievance of the International Union is sustained. In determining the local wage rates of elevator constructors under Article V, Par. 1 of the Standard Agreement (Atlantic City Plan) the appropriate area committees of NEMI and Local Unions 132, 34 and 17 in Madison, Wisconsin, Indianapolis, Indiana and Cleveland, Ohio, shall use local building trades hourly wage rates agreed upon and established for such trades without reducing the amounts there­of by such deductions as are at issue in the current disputes involving elevator construct­ors rates in such localities. More particular­ly, it is awarded here that the hourly wage rate used under the Atlantic City Plan in the local­ities referred to shall include amounts which under building trades contract an employer is under a duty to deduct from the hourly wage of a building tradesman for vacations.

New York, New York August 15, 1964

/s/ Peter Seitz Peter seitz, Arbitrator

STATE OF NEW YORK )

COUNTY OF NEW YORK) SS:

On this 15 day of August, 1964, before me

personally appeared PETER SEITZ, to me known and

known to me to be the individual described in and

who executed the foregoing instrument and he duly

acknowledged to me that he executed the same.

lsi Myra T. Seitz Notary Public

In the Matter of the Arbitration

between

NATIONAL ELEVATOR MANUFACTURING INDUSTRY, INC.

and

INTERNATIONAL UNION OF ELEVATOR CONSTRUCTORS

OPINION

The Undersigned was selected by the Director

of the Federal Mediation and Conciliation Service to

serve as Arbitrator of the dispute described below.

Due notice thereof having been given, hear-

iugs were held on December 4 and 17, 1963 and on June II

18, 1964 in New York City, New York. The Industry

i7 A considerable volume of exhibits was introduced by the parties at the two hearings in December, 1963. Subsequently, when the Arbitrator sought a clarifica­tion of some of the matter in the record, a dispute arose between the parties as to the authority of certain bodies to make binding settlements for their principals. The Union then moved to reopen the record for further evidence on that subject matter. The motion was grant­ed and a supplemental hearing was conducted on June 18, 1964.

All witnesses in the cases were sworn. A trans­script of all proceedings was made available to the Arbi­trator. Counsel for both parties filed able briefs deal­ing exhaustively with the large volume of facts in the record.

-1-

was represented, thereat, by Fayette S. Dunn, Esquire,

its Attorney; the Union by Patrick C. O'Donoghue,

Esquire, its Attorney.

The dispute concerns the method of determin-

ing the wage rate to be paid locally by members of the

Industry to elevator constructors. That rate, under

the Standard (National) Agreement of the parties, is

computed by reference to the local building construction

trades rates (as will be hereinafter described) and the

question posed, as stated with, perhaps, greater pre-

cision is:

Does the Agreement of the parties con­template the use of the building con­struction trade rates stripped of de­ductions made for vacation plans, et cetera, or the building construction trade rates including an amount deduct­ed and withheld for vacation plans, et ceteria?gj

gj Or, alternatively stated, in the formulation of the Attorney for the Industry:

"Are the amounts deducted by employers from the wages of an "Atlantic City Plan" trade to provide vacation payor welfare, 'fringe payments' (within the meaning of 1B of Par. 1 of Article V of the Standard Agreement) that must be deducted from the wage rate of said trade before using it in the formula for establishing the wage rate of Elevator Construct­ors (in 1A of Par. 1 of Article V of said Standard Agreement)?"

-2-

BACKGROUND

The National Elevator Manufacturing Industry,

Inc. consists of some fifty members called Manufactur-

ers. The Union is an international union with some

ninety-six locals. Both Manufacturers and local Unions

are distributed throughout the United States. On Janu­

ary 25, 1962, the International Union, as a party,

negotiated a Standard Agreement having nation-wide ap-

plication with the Industry as a party. The Signatories

on behalf of the Industry were Messrs. D. D. Tofanelli,

R. B. Duncan and P. L. Martin, each of whom is associa-

ted with leading manufacturers in the Industry. These

three individuals are also the three members of the

Labor Committee of the Industry (which will be referred

to, herein, as "NEMI Committee~') 3/

jJ The booklet representing the Agreement shows an Indus­try signature "By" Mes-srs. Tofanelli, Duncan and Martin whose names are set forth without any reference to their representative capacities. Article I declares that the Industry "is authorized and empowered to negotiate and ex­ecute this agreement" on behalf of the manufacturer members whose names are listed. Similarly it declares that the In­ternational "makes this agreement for or on behalf of its affiliated Local Unions" which are listed.

Thus, both "parties" to the Agreement appear therein in a representative capacity on behalf of principals. The scope of authority of those who affixed their signatures to the Agreement on behalf of the Industry and the International Union is a subject of controversy and will be discussed infra •

The Standard Agreement has a history that goes

back at least to 1921 when the "Atlantic City Plan" (as

called) was written into it. This imaginative and unique

conception which is credited with having avoided strikes

and lockouts over wages in this Industry for over forty

years, was described as follows:

"At a meeting held in Atlantic City, July 11th-12th, 1921, between the representatives of the Elevator Manufacturers and members of the Executive Board of the International Union of Elevator Constructors, it was agreed that the average wage rate of the five high­est of the following seven principal building trades, namely, (1) bricklayers, (2) plasterers, (3) carpenters, (4) electricians, (5) sheet metal workers, (6) plumbers and steam fitters, (7) iron workers, be accepted as the wage rate for the elevator constructors mechanics; the wage rate for helpers to be t0i of t~~ mechanic IS rate". (Emphasis supplied).':!1

Thus, the parties established, so far as the writer is

informed, the only building construction trade wage-

setting system nation-wide in scope. This wage-setting

was to be done locally by reference to the wages of the

local building trade rates. The preamble to the 1946

Agreement provides that it shall be incorporated in and

lz) This quotation was taken from the September 1946 Agreement (Art. 3, Par. 5) the earliest expression of the Atlantic City Plan placed in the record of this case.

-4-

become a part of any agreements entered into by the Manu-

facturers and Local Unions; and no local agreements shall

be made changing the Standard Agreement except as it might

beprovided for therein. Also, Article 13, Par. 2 of the

1946-1951 Standard Agreement contained a "local option"

clause, so called, which permitted locals to negotiate

special conditions for described classes of work, except

thst the "wage rate" as determined in the Atlantic City

Plan (then Al-t. 3, Par. 5) "may not be chsnged".

For many years, Manufacturers and Local Unions,

pursuant to the formula provided in the quoted provisions

have agreed to their wage rates. From time to time, the

Standard Agreement was renegotiated with some chsnges.

In the period prior to 1946, the building

trade rates used as reference points for local Construct­

ors, 'jj rates were usually "raw" or "gross" rates in the

'iJ By "Constructors" reference is intended to employees

working in local areas for manufacturers subject to the

Standard Agreement.

sense that building trades and contractors contracted

locally for an hourly rate of compensation with little, if any,

provision for benefits or deductions from the pay en-

velope for what may be called "fringes". Little diffi-

culty in that period was experienced in the administra-

tion of the Atlantic City formula. Adjustments in Con-§!

structors' wages were limited to once in six months.

In Article 8 of the 1964 Agreement it was pro-

vided that inasmuch as vacations "may become general

at some future date in the Building Trades", whenever

five of such trades, locally, "obtain a vacation" an

International Representative of the International Union

and a National Representative of The Manufacturer shall 7J

meet "to establish an equitable plan."

In 1951, immediately following the provisions

quoted above with respect to the Atlantic City Plan

~ In 1961 this was extended to renegotiation of wage rates not more frequently than once in eleven months.

7J In 1951 the Standard Agreement reduced from five to four the number of Building Trades with vacations as the fact that should trigger a meeting to establish an equitable plan, locally, for the Constructors.

-6-

(then and thereafter designated as Article V, Par. LA)

there was added the following, designated Par. IB:

"It is agreed that in consideration of the granting of paid holidays as out­lined herein, only the hourly rates of the trades used in determining the wage rates are to be used. This means no fringe payments, such as welfare plans, tool or clothing allowances, etc., are to be used in determining the wage rates of members of the Union covered by this Agreement." (Emphasis supplied.)

In 1957, the parties provided (in Article XII,

Par. 1) that when three (formerly five, then four) of

the Building Trades, "obtain a vacation", locally, "the

Local Union shall receive vacation pay" in accordance

with Article XII, Paragraph 3; also, that "all Local

Unions that do not have vacations are to participate

in the Vacation Plan" in Article XII, Par. 3 of the

1957 Standard Agreement, effective January 1, 1958.

Article XII, Par. 3 then set forth a vacation

plan which gave "vacation pay credit" to employees

based on a percentage of hours actually worked. One who

worked less than five years was to receive not more than

forty hours in anyone year from anyone company; one

who worked more than five years, not more than eighty

hours. A number of other provisions set forth details

with respect to the administration of this first Vaca­

tion Plan, nation-wide in scope. For the present purposes

it will be noted only that this plan contemplated no

deduction from wages. The employer made vacation pay­

ments when as and if an employee became eligible for

vacation leave with pay.

The differences in construction that gave rise

to the present controversy first arose under the 1957-

1961 Standard Agreement. However, before undertaking

to delineate them, it might be well to complete the

historical analysis of the Standard Agreements.

The January 1, 1962--December 31, 1966 Standard

Agreement bears the date January 25, 1962. By this

time, apparently, vacation arrangements were much more

general in the Building Trades than theretofore. The

1962 standard Agreement, without more, provides for

"Vacation Pay" in line with the system for eligibility,

-8-

duration, administration, et cetera, first detailed

in the 1957 Agreement. With respect to the Atlantic

City Plan, the 1957 language, generally, was repeated

with this significant modification: in the second

sentence of Article V, Par. lB it was made to read:

"This means no fringe payments such as welfare plans, togls or clothing allow­a!!.ces, vacations,!::7 etc., are to be used." Lwith respect to the wage rates of the trades named in the Atlantic City Plan in determining the wage rates for Constructors covered by that Standard AgreementJ (Un­derscoring supplied.)

THE THREE DISPUTES IN ARBITRATION

This arbitra.tion proceeding results from the

inability of the parties to resolve their differences

with respect to the determination of the appropriate

wage rate for Constructors in three localities under

the Atlantic City Plan) as articulated in the 1962

Agreement) as follows:

1. Madison. Wisconsin: At issue is the appropri-

ate local Electrician's rate. The Manufacturers wish

§J The word "vacations", not emphasized or italicized in the Standsrd Agreement, was added to the pre-existing provision.

to deduct from the Electrician's rate a 20 cent deduc­

tion from the pay to the electrician for vacation pur­

poses which was agreed upon in the 1961-1964 Electrician's

Agreement with the local association of contractors. That

Agreement sets forth a rate of $4.34 for the period June

1, 1963 through May 31, 1964. With respect to "Vaca-

tion Fund" it says that the "emplo;)e r will deduct from

the wages of each employee the sum of twenty cents (20¢)

per hour for each hour of straight time pay* * *" and

a check for that amount, so deducted, shall be made pay­

able to a designated bank and sent to the Local Union

once a month. The Local Union is to send the check to

a designated bank for deposit in a "Vacation Fund" ac­

count. Employees are to give the employer written as­

signments authorizing such deductions. The question is

whether the Electrician's rate, used for the determina­

tion of the Constructor's rate under the Atlantic City

Plan shall be $4.34 or that amount, stripped of the 20

cent deduction, namely $4.14.

2. INDIANAPOLIS, INDIANA: At issue is the a.ppro-

priate rate to be used for Electricians, Bricklayers and

- 10 -

Pipe Trades.

In May, 1963, the Electrician's Agreement pro­

vided for an "hourly rate" of $4.40 for Journeyman

Wireman. Article XIII of that Agreement provides for a

Vacation Plan requiring "not less than five consecutive

working days per calendar year away from the Electrical

Industry. " Section III, Deductions, states that 20

cents per hour or 40 cents per overtime hour "shall be

deducted from the earnings of each employee" and forward­

ed to a Vacation Board. The Board designates a deposit­

ory where the employer checks are to be deposited and

individual checks shall be made for withdrawals pursuant

to the direction of the Board. All sums collected are

deposited and credited to individual employee accounts.

The Union claims the appropriate Electrician's

rates to be used is $4.40; the Industry, $4.20.

In the matter of the Pipe Trades, in Indiana­

polis, the contract for Journeymen calls for $4.25 as

the "minimum rate of wages." Section 2 of Article IV

of the contract states that "the employer agrees to with-

-11-

hold weekly from the wages of all employees" a given sum

for each hour worked plus twenty five cents for each

overtime premium hour worked. These sums are to be paid

into the savings account of each employee at the Indiana

National Bank "for the sole and express purpose only of

providing each employee with funds to be used in taking

a vacation from his employment at least once each year."

The contract provides that prior to forwarding such sums

to the bank the Employer "shall make all legal withhold-

ings from the wages of each employee such as Federal In-

come Taxes, Indiana Gross Income Taxes, Social Security

Taxes, etc."

In the matter of Bricklayers, in Indianapolis,

the June, 1962 Agreement provided for a "rate of wages"

of $4.51 starting December 1, 1962. A supplemental

agreement, made effective that date, provided that:

"Contractors shall withhold from the pay of employees working in the jurisdiction of Local No. 3 (20¢) twenty cents per hour or any fractio~ thereof, wage increase of Dec. 1, 1962 Lsicd

These monies are required to be deposited in individual

accounts in Peoples Bank & Trust Co. for vacation pur-

-12-

poses under a vacation plan contained in a Supplement­

ary Agreement.

3. Cleveland. Ohio: Here the dispute involves

deductions from the pay of Electricians ($.15 for vaca­

tions) and Sheet Metal Works ($.075 for vacations).

The March 1, 1964 Agreement of the Electricians,

as amended May 1, 1962, provides for a "minimum rate of

wages" for Journeymen from May 1, 1963 to May 4, 1964

of $ .44 per hour. It also provides for a Vacation

Plan "to be financed by an authorized withhold from the

wages paid to all employees" under rules to be establish­

ed by a JOint Conference Committee. On June 10, 1963,

the Electricians entered into an Agreement with Central

National Bank of Cleveland providing for vacation ac­

counts to be set up in the name of individual employees,

the execution of employee authorizations for deductions

and for interest at the rate of 2.57% per annum. Monies

could be withdrawn after June 1 in any year. In case of

death, payment is to be made to the estate of an employee

or his surviving spouse. It is evident that these de­

ductions were made by employers in the same way in which

-13-

social security taxes or income taxes were withheld.

The "minimum rate of wages" for journeymen sheet

metal workers is stated to have been $4.46 per hour ef-

fective May 13, 1963. With respect to a Promotion Fund

(so-called) the contract calls for the employer to make

"contributions of 5 cents per hour; but with respect to

a Vacation Plan (Section l-C) it is provided, that:

"The employer shall deduct from wages of each employee an amount of 7M per hour for all hours paid for the Vacation Fund to be administered by a Board of Trustees * * *."

THE POSITION OF THE PARTIES

The Industry presents a number of points in

its argument but it seems fair to state that its prin-

cipal point is that "all mandatory payments made by an

employer for vacations or welfare fringe payments"/;'.rJ

to be stripped from the "hourly wage rate" under the At-

lantic City Plan, "whether they are payments in addi-

tion to a wage rate or take the form of deductions from

a wage rate." (See Industry brief, P. 5) . This view recog-

nizes no significant or material difference between a

- 14 -

contract providing for $4.00 an hour rate from which

the employer must pay a trustee $.20 an hour for vaca­

tions and $.10 an hour for welfare, on the one hand,

and a contract that provides $3.70 per hour with sup­

plementary payments of $.20 an hour for vacations and

$.10 per hour for welfare purposes, on the other. The

Industry position seems to be that any such mandatory

payments, however made, are "fringe" payments which the

second sentence of Article V, Par. 18 excluded from the

wage rates to be used in making computations of the

Constructor's rate under the Atlantic City Plan.

The Union argues thst the amounts represented

by the deductions from wages in the disputes referred

to are not "fringes" to be stripped from the wage rate

under Article V, Par. 18; that this view is supported

by custom and in particular the administration of the

Davis-Bacon Act by the Solicitor's Office in the Depart­

ment of Labor, the publications of statistics by the

Buresu of Labor Statistics snd the usages in the build­

ing and construction industry; and, finally, that both

-15-

on a local and at the highest level of contract admin-

istration there have been settlements and determina-

tions made by the parties that should govern the award

herein.

A. Are These Payments "Fringes" Which are Not to be included in Building Trade Wage Rates Under Article V, Par. IB?

Any approach to this question by way of diction-

ary definition of "fringe" gives little promise of suc-

cess. It is an exercise in semantic futility: Lexico-

graphers, lately, have taken to including every known

usage of a term in their definitions. Accordingly, if

"the devil can quote Scripture for his purpose", 2/ with

equal facility that resourceful advocate could also find

comfort in invoking dictionaries for whatever definition

seems to support his thesis. The problem is compounded

by the fact that "fringe" as a term in industrial rela-

tions usage is of recent vintage and does not appear to

have been used, most frequently, as a word of art. I am

under the impression that it gained most of its cur-

2/ The Merchant of Venice, Wm. Shakespeare, Act 1, Sc. 3, 1. 48.

-16-

rency in the days of the national wage stabilization

program when, to many, it meant any type of increase

not labeled a "wage rate increase" bargained by the

parties which the National War Labor Board, or its suc­

cessor, National Wage Stabilization Board, would approve

as not coming within the proscriptions of the policy as

inflationary or tending to hamper the successful prose­

cution of the war or adversely affecting the health of

the economy in the immediate post-war period. The term

was used then and is currently used now in many con­

texts. The question to be answered is not what it means

generally, but what it means in Article V, Par. lB.

At the time the Atlantic City Plan was launched,

and, undoubtedly, for many years thereafter, it was

characteristic of the building trades to bargain a

"raw" hourly wage rate as compensation for services.

"Benefits" (vacations, holidays, welfare, pensions,

jury pay, funeral pay, et cetera) were usually fur­

nished, if at all, directly out of the pay envelope.

-17-

Many pressures (the contents of the collective bargain­

ing contracts of industrial unions, the character of

the national wage stabilization program and a general

awakening to the importance of providing for the social

needs of both organized and unorganized workers) led

to the inclusion in the contracts of building trades

of provisions for what I have referred to as "benefits."

These "benefits" are provided for, mainly, in

two ways. Some benefits are furnished by an agreed

upon deduction from the gross wage and a withholding

and deduction of the monies (by trust indenture, bank

deposit or otherwise) for defraying the cost of the

benefit. Others are furnished by an agreement of the

employer to provide monies that would be available to

satisfy a designated need or purpose. Thus, for ex­

ample, under some collective bargaining contracts, the

employer, resorting to his own financing and insurance

devices, undertakes to pay certain pension monies to

eligible employees when they retire; under other con­

tracts a payment is irrevocably made by the employer

-18-

on behalf of and for the account of the employee (some-

times with employer contributions on a matching or

other basis) to a fiduciary or depository with the un-

derstanding that the monies are the vested property of

the employee, but to be released only for designated

purposes.

The building trade agreements involved in this

arbitration bear a closer resemblance to the last men-

tioned variety of provisions, although to be sure, the

language used and the arrangements and procedures speci-

fied are not entirely uniform. The Madison, Wisconsin,

Electrician's contract, for example, 'uses the term "de-

duct" from wages; equal explicitness is not present in

all contracts, some of which merely call for a payment

to the bank. It is not entirely clear from a perusal

of this record how the tax problem is handled. It is

noted, however, that the Madison, Wisconsin, contract

referred to tells the employer to make

"all legal payroll withholdings for income tax, social security, unemployment insur­ance, etc. from the total of wages, includ­ing vacation allowance. and shall then with­hold the full amount of vacation allowance

-19-

for transmittal on a monthly basis to the bank. " (Emphasis supplied.)

It would appear, from the record as a whole, that the

employee's income tax on the vacation allowances (in

some unknown proportion of the situation throughout

the country) is withheld at the source by the employer.

This may not occur in other cases. Where it is done,

the action tends to give the monies the character of a

taJlable wage.

What then, is the character of these de-

ductions viewed through the prism of the Standard Agree-

ment and in the light of the probable purposes of the

Atlantic City Plan?

It is vain and futile to seek to ascertain

the true "intent" of the "founders" with respect to

vacation deductions because they probably did not ad-

dress their minds to that subject and may not have had

an actual intention with respect to the problem pre-

sented by this dispute. It does appear that they in-

tended to gear and calibrate wage movements in the In-

dustry with wage movements in the building trades. For

-20-

the purpose of argument, I shall assume that their pur-

pose extended only to "raw" wages, Le., pay in the

pay envelope of building tradesmen in view of the then

existing practices in the bargaining of the building

trades with contractors.

In 1951, however, the Industry having granted

paid holidays to Constructors, it was said that:

"only the hourly rates of the trades"

shall be used. If the term "hourly rates" stood alone,

conceivably it could mean gross hourly rate including

whatever amounts are withheld for benefit purposes.

"Hourly rate" signifies only the amount of dollars -and

cents which an employer is obligated to pay for an hour

or services in his employment without any reference to whom

or for what or how the money is to be spent.

Then the parties set forth that:

"This means no fringe payments ***, ,,1Qj

This was an equivocal direction, at the best, and the

iQJ The language used is curious in this respect: when tele­scoped, the provision reads "hourly rates * * * means no fringe payments * * *, II (Emphasis supplied.) "Rates", ordinarily, do not mean "payments"; they mayor may not include obligations of the employer not represented by the amount of the payroll check.

-21-

parties must have realized that the word "fringe" was

fraught with uncertainties; and, accordingly, they gave

examples of what was meant.

In 1951, "fringe payments" were described as

"such as welfare plans, tool or clothing allowances, etc. * * *."

In 1957, after the Standard Agreement provided for a

vacation plan, the word "vacatioos" was inserted after

"clothing allowances."

There is an inference, due to the relative

concurrence of events that, having given a certain kind

of vacation benefit to Constructors in the Standard

Agreement, the Industry did not desire to have "payments"

for such vacations included in the building trade rates

which were to be considered under the Atlantic City Plan.

An examination of Article XII of the Standard

Agreement, however, discloses that it is an entirely

different kind of vacation plan from the plans in the

building trades agreements under discussion. In the

Standard Agreement Plan, the employer does not deduct

monies or deposit them to the employee's individual ac-

count for dedicated purposes or withhold employees' in-

-22-

come taxes on the amount so deposited. He does no more

than to assume a future liability to pay vacation allow-

ances when, as and if an eligible employee takes his va-

cation. The vacation money can in no sense be "income"

to the employee until that future time when he receives

it. These considerations conduce to the conclusion that

the parties must have had in contemplation the elimina-

tion from the building trade hourly rate only vacation

allowances of the kind and character set up in the Stand-

ard Agreement. True, Par. 1B also excludes "fringe pay-

ments," such as "welfare plans" and the Welfare Plan in

Article XVII calls for regular payments and contribu-

tions for each hour of work. However, the Welfare Plan

contributions are made to a fUnd and do not assume the

character of the private vested monies of the employee-

such as the vacation deductions explicitly assigned by

the employee to be deposited on his behalf in an individ-

ual interest-bearing account.

I shall not deny that the picture of the status

of vacation deductions drawn from the language of the

Standard Agreement and the considerations I have mention-

ed is a clouded one and uncertain. There are considera-

tions urged by the Industry which have merit and which

-23-

tend to support its argument that any mandatory payment for

a benefit without regard to the manner or time of its pay-

ment by an employer constitutes a "fringe" which should

be stripped from the building trade rate. However, on

balance, I think the weight of the argument favors the

Union on the question whether Article V, Par. lB excludes

vacation deductions with the special characteristics of

those I have described and are involved in the three disputes

in arbitration. However, I choose not to base the accompany-

ing award on the considerations discussed in this portion of

my opinion which I regard only as fortifying and supporting

the conclusions expressed elsewhere.

B. ARGUMENTS BASED ON THE PROCEDURES OF THE DEPARTMENT OF LABOR AND THE CUSTOMS IN THE BUILDING CONSTRUCTION INDUSTRY.

I wish it to be understood that I do not base my

conclusions in the accompanying award on the point made by

the Union that, in publishing prevailing rates for con-

struction on federal projects, as required under the Davis-

Bacon Act, the Department of Labor includes in the mini-

mum wages deductions for vacations such as are in

-24-

issue in this case. The purposes of that statute might

well be served by such inclusion inasmuch as it would give

assurance that the gross labor costs of contractors operating

in the locality with union labor would not be undercut

by non-union contractors. This would have the practical

result of eliminating the cost of labor, benefits and

working conditions from the area in which contractors

would compete.

There is no indication, however, that in its pro­

cedures, the Department of Labor gives cognizance to such

considerations as are relevant to a construction of this

Standard Agreement. The fact that certain items are

included in a wage for the Davis-Bacon Act proves nothing

in the instant inquiry.

Similarly, the fact that the Bureau of Labor

Statistics includes vacation deductions in hourly wages

is of no consequence in the instant inquiry.

It may be worthwhile in this connection, however,

to repeat an observation concerning the custom and prac­

tice of the building trades alluded to above. It is

-25-

well known and widely recognized that building trades

prefer to and customarily do express the compensation

for services in the contracts they bargain in gross

wage rates. Many industrial unions will express the

hourly rate in minimum amounts and their labor contracts

will set forth many provisions for benefits either to be

given directly by the employer or to be contributed for,

by him, into a fund. Until recently, this approach has

not been used by building trades whose preference it has

been to place emphasis upon a high minimum hourly wage

which, presumably, would comprehend the needs and bene­

fits of their members. In other words, until rather re­

cent times, typically, building trade contracts were not

characterized by the benefit (or, if you Will, "fringe")

provisions which were brought into vogue by industrial

unions with relatively lower hourly rates.

This tendency, it would seem, was given impetus

and momentum by the Davis-Bacon Act. No doubt, the self­

interest of building trades was served by articulating

the hourly rate at the highest possible level (and includ-

-26-

ing "fringes") in order to set minimum wage standards in

localities at a level that non-union contractors for con­

struction and repair might not evade or avoid. This be-

ing so, one is given to wonder why this Industry, which

is certainly sophisticated in the ways of the building

trades (and the administration of the Davis-Bacon Act)

did not seek to protect the position it argues for in

this case by some less equivocal and more precise and

meaningful language than appears in Article V, Par. lB.

It seems not unfair to expect that an Industry familiar

with the wage policies of the building trades, fully

aware that benefits and "fringes" of various'kinds were

finding their way into building trade contracts would want

to make absolutely certain that the building trade wage

used for Atlantic City Plan purposes does not include a

deduction for vacation monies such as are involved here.

The language employed, at the best, is ambiguous and equi­

vocal and raises a serious question as to whether, actu­

ally, any conscious mutual understanding was ever achieved

that the building trade rate was not to include the vacation

deduction.

-27-

here: .

C. ALLEGED SETTLEMENTS AND OTHER ACTIONS TENDING TO INDICATE HOW THE PARTIES THEMSELVES CON­STRUED ARTICLE V, PAR. lB.

There are two classes of situations to consider

1. The Company relies on a considerable number of in-

stances in which various "fringes" were stripped from

the building trade rates before being used for the compu-

tation of Constructor's rates under the Atlantic City

Plan. A list of these instances is set forth in Appendix

A of the Industry's brief.

That these actions have relevance, is clear. If

there were no better evidence available, one might be

justified in concluding that the manifestations of the

parties, as evidenced in these occurrences, disclose how

they themselves read their Agreement and what expectations

it justified in their minds.

However, there is better and more persuasive evi-

dence of the practical and administrative constructions

by the parties of their correlative rights and duties,

as will shortly appear.

-28-

First, it would appear that when the building trade

rate was first stripped of the "fringe" payment before

being used to compute the Constructor's rate under the

Atlantic City Plan, this was done without dispute, contro-

versy or the filing of a grievance or other complaint.

The action was local in that the decision was made and

the rates were determined by regional representatives of

NEMI and by local union officials. There is no indication,

in these cases, of awareness of the position taken by the

International Union.

Second, Article XXIV (Local Option) expressly excepts

from the permission to Local Unions to negotiate special

conditions attaching to certain described work "the wage

rate as determined by Article V, Par. 1A of the Agreement.1!/

Thus, the interpretation and construction of the Atlantic

City Plan or departures therefrom, were not matters confided

to the authority and powers of local union officials. If

ill No reference is made to Paragraph lB. I take this to be a drafting oversight, inasmuch as the material in the local option clause is believed to have antedated the legislating of Paragraph lB.

-29-

this be so, not much weight can be given to their actions

falling into the pattern of what the Industry considers to

be the correct administration of the Atlantic City Plan.

2. There have been settlements by national officers at

the highest level of authority inconsistent with the In­

dustry's current construction of the Agreement.

a) Atlanta Dispute. 1961.

In 1961, the regional NEMI Committee took the posi­

tion that an hourly rate for Electricians of $4.00

should be reduced by $.20 an hour, representing an employee­

authorized deduction for vacations.. The vacation plan,

expressed in a 1958 Agreement, provided that the vacation

allowance "shall be withheld from the employee's weekly

pay and shall be sent on a monthly transmittal to a bank

to be designated by an Administration Committee to be

deposited in employees' individual accounts." The em­

ployer was to make "all legal wi thholdings for income

tax, social security, unemployment compensation, etc.,

from the total of wages including vacation allowance and

-30-

shall then withhold the full amount of the vacation

allowance for transmittal on a monthly basis to the

bank. "

In early 1959, the Area NEMI Chairman raised the

question whether the $.10 was not a deductible fringe;

but, nevertheless, used an hourly .age rate for Elec-

tricians of $3.70 without deducting the vacation

monies.

In September, 1959, and March 1960, the parties

used the hourly rate in the Electrician's contract

without deducting the $.10 for vacations.lSI

In August, 1960, the local Union requested recog-

nition of an Electrician's rate of $4.00 per hour.

The Area NEMI'Chairman refused to allow it for more

than $3.80 (the $.10 vacation allowance for Electri­

cians having been increa sed to $ .20 in 1960).

This dispute, at this stage, was referred to Edwin

C. Magee, Secretary~reasurer of the International

Union and D. D. Tofanelli, Chairman of the Labor Committee

~ Apparently this was done despite the fact that, through error, the local Union representative initially demanded the Electrician's wage rate, less the $.10 vacation deduction.

-31-

or NEMI. Torane11i took the position that regardless or

the previous acceptance or the Electrician's rate in At-

lanta without having deducted the $.10 vacation money, the

vacation deduction was a "rringe" and was not to be

included in the Electrician's rate.

The matter came up berore the yearly meeting or the

Executive Board or the International Union and the Labor

Committee or NEMI in February, 1961 in Miami. According

to Mr. Magee:

"At the end or the discussion the Labor Committee or NEMI agreed to pay the requested increase and at the same time they said that they will pay but they still considered it a rringe. "13/ (R.44)

Magee testiried that Toranelli also stated that NEMI intend-

ed to make a rurther investigation, apparently, to determine

the relationship between Davis-Bacon published rates and the

.At1antic City Plan. 1!±/

13/ Thus, the Industry Labor Committee in errect granted the substance or the claim but merely verba1lized its adherence to its original position. One is reminded or Ga1i1eo, who, when rorced to recant berore the Inquisition his theory that the earth moved about the sun and not the sun around the earth was heard to mutter, sotto voce, "!pur si muove!" Laeverthe1ess it does moveL!

It is worth noting that nothing was said about the settle­ment being made without prejudice or its inapplicability, as a precedent, in any like dispute which might arise.

1!±/ Torane11i indicated that the Atlanta rate was agreed upon "aga.inst my wishes." (R.266) and that he was "not in accord with what was done (R.293): however, it does appear that the Labor Committee "agreed to allow the Atlanta rate" (R.293) although the theory on which it proceeded to do so was unclear.

-32-

The Union pOints out that after the Atlanta, Georgia

problem with respect to Electrician's rates was resolved

on a national level in 1960, in a manner consistent with

the Union's position here, other settlements were arrived

at, locally, on March 1, 1961, September 30, 1961, August

1, 1962 and September 15, 1963. In each of such settle-

ments the Electrician's wage rate used included $.20 em-

ployee deductions for vacations.

b) Indianapolis. Indiana Dispute. June 1961.

In June 1961, Local 34 in Indianapolis request-

ed a wage increase based, in part, on an Electrician's

rate of $3.95 and a Sheetmetal Worker.'s rate of $3.93.

Both rates included vacation deductions. Since 1956, this

Local had used Electrician's rates which bad included vaca-

tion deductions. Apparently, Mahr, the Area NEMI Chairman,

raised no question as to the Electrician's rstes, but did

raise a question as to the Sheetmetal Workers' rate. He

was informed by one Eckerson, in New York, acting for Tofan-

elli, that the $.13 deduction for vacations in the Sheetmetal

situation "was definitely a fringe and should not be in-

cluded in the computation of the Elevator Constructors'

-33-

rate. " Accordingly, Mahr refused the local's request as

to that rate.

Magee then took the matter up with Tofanelli. On

August 7, 1961, Eckerson, acting for Tofanelli, advised

Magee that the Sheetmetal Workers vacation plan was a

fringe and that "this discussion is not one which concerns

money, but, rather, principle."

Magee took the matter to the meeting of the Executive

Board of the International Union and the Labor Committee of

NEMI in Atlantic City, in October, 1961. He presented a

letter from the Department of Labor certifying that the

Davis-Bacon rate for Sheetmetal Workers in Indianapolis

was $3.93 - or the rate claimed by the Local Union without

deducting the vacation money. According to Magee:

"the final outccme was that they agreed to ac­cept the rate that was submitted by the business agent." (R.138)

Tofanelli's testimony is:

"To settle the argument we agreed to pay the rate." (R. 295).

although he seems not to have a full recollection of what

occurred at that meeting. (R. 297.)

-34-

Following the Atlantic City meeting, Eckerson

wrote to Mahr on October 6, 1961, referring to the meeting

and stating:

"A decision was reached to the effect that the established wage rate for the Sheetmetal '~Q.rker in the Indianapolis area is $3.9.3.." Lwhich includes the vacation deduction~

Mahr, on October 9, 1961, then addressed NEMI mem-

bers in his area, confirming the $3.93 rate for Sheet-

metal Workers, and listing this rate and the $3.95 rate

for Electricians (which also included the vacation money)

as "correct and should be used in the computation of the

new elevator constructors' rate." Mahr referred to the

"official notice from the National NEMI Labor Corrnnittee,

dated October 6, 1961" as the basis of his authority.

c) The Second Indianapolis. Indiana Dispute and the Madison. Wisconsin Dispute.

The problem of the inclusion of vacation moneys

in the Sheetmetal Workers rate flared up again in July,

1962, after the matter, apparently, had been laid to rest

in October, 1961. Local Union #34 in Indianapolis asked

for an $.11 increase for the elevator constructors, based,

-35-

in part, on a Sheetmetal Workers' rate of $4.08, a Pipe

Trades' rate of $4.15 and an Electricians' rate of $4.15.

The Sheetmetal Workers Vacation Trust Agreement which set

forth the terms under which the vacation monies would be

administered and which wa's the basis of the October 1961

settlement in Atlantic City were still in effect. The

Pipe Trades provisions were, generally, similar, provi-

ding for employer withholdings for all ~axes and then

depositing the vacation funds in an individual employee

savings account. The employee, as in the other cases,

was required to execute a withholding authorization.

Mahr, the Area NEMI Chairman, informed the Local

Union that the National NEMI Committee agrees with him

that "these amounts are fringe and should not be included

in your rate compensation."

Subsequently, on July 18, 1962, Mahr wrote to

Tofanelli as "Na,tional Labor Chairman" asking ,that you

provide us with an official ruling covering this contro-

versy" and, "in the event you cannot provide us with an

official rulin~ L~fore July 25, 1962, the date of his

1:iI Note that Mahr did not ask for advice or for a recom-, mendation as to the appropriate procedure. He asked to be instructed by the highest authority in the Industry having to do with the administration of the relationship.

next meeting with the Local Uniou! * * * please take the

necessary steps to place this question before an Arbitra­

tion Committee as stipulated in Article XV of the Standard

Agreement. " (Underscoring supplied)

While this second Indianapolis problem was in

progress, Mahr refused (July 9, 1962) to give approval

to an Electrician's rate in Madison, Wisconsin, which in­

cluded a $.40 "fringe" consisting of deductions of $.15,

$.105 and ·$.20 "from the wages of each employee" for

"health and welfare premiums", "dues" and "vacation fund"

purposes, respectively. In each case a written assignment

or authorization was required to be given by the employee.

In the case of health and welfare premiums and dues, the monies

were to be sent to the Union; in the case of vacation deductions,

to a designated bank.

A meeting of the Executive Board of the International

Union and the Labor Committee of NEMI took place in New

Orleans, Louisiana, in October, 1962. The problem of de­

ductions from wages of building trade employees was

canvassed exhaustively with a view to settling on

-37-

some permanent basis for disposing of such problems.

The utility of Davis-Bacon rates, for this purpose was

considered. The Union officials left the meetings with

the understanding that some permanent solution was to

be reached. Subsequently, in November, Magee got the

impression from a discussion with Tofanelli in New York

that the Industry would accept the published Davis -Bacon

rates as the rates for the purpose of the Atlantic City

Plan.1Q/

Following the meeting in New York on November 14,

1962, Mahr wrote to the Local Union on the subject of

1Q/ Under cross-examination, Tofanelli refused to con­cede that the first Indianapolis rate was settled on the basis or theory of the applicability of the Davis-Bacon rate and would go no further than to say:

"To settle the argument we agreed to pay the rate." (R.295,297,298,299.)

and with respect to the New Orleans meeting, he testified:

"I think we caved in and gave you the cent in­crease or whatever it was to get it off the record. (R.302)

Apparently, the New Orleans meeting did end with a declar­ation by Tofanelli that the Industry would "look at this thing and come back with a solution" (R.302, 303) but this search never eventuated in any final formula or understand­ing of how the Standard Agreement should be interpreted. (R·303)

I , ,

the Indianapolis dispute:

'~e have been instructed to proceed with the settlement of your wage rate on the basis of the Davis-Bacon Act."

He proceeded to list, for Indianapolis, as a basis for

the determination of Ele~ator Constructor rates, the

Electrician's rate of $4.15 which, in July, he had refused

to approve on the ground that it included a "fringe."

Then, under date of November 20, 1962, on the sub-

ject of Indianapolis rates, Mahr addressed all NEMI mem-

bers in the area of which he was Chairman of the Labor

Committee, refer~ing to his previous rejection of build­

ing trade rates because they included a fringe and stated:

"We have just received instructions from the National N. E. M. I. Labor Committee to the effect that we should proceed to settle the elevator constructor rates in accordance with Davis-Bacon Act." (Underscoring supplied.)111

A similar letter was sent by ~lahr on the subject of the

Madison, Wisconsin dispute to all NEMI members in his area,

listing building trades rates as requested by the local

union without having stripped them of the "fringes."

111 Presumably, this action was taken by Mahr after receipt of what he called the "official ruling" he had requested in his letter of July 18, 1962, referred to supra.

-39-

DECISION

The facts in this case have been set forth in a

profusion of detail because, without a sound grasp of the

facts, the basis for decision cannot be understood.

Surveying the case as a whole, I am persuaded to

reach the following conclusions:

1) The language of the Standard Agreement is

ambiguous and equivocal as to whether deductions

required to be made by employers from the wages

of building trades employees are to be stripped

before they are used to determine Elevator Construct­

or rates under the Atlsntic City Plan provisions.

Based on contract language alone, no clear result

on this dispute could be expressed with confidence

in its fairness and justice. It does seem fair

and just, however, to observe, that, given the

common character of building trade wage rates and

the recent tendency to provide for various bene-

fits and employee plans--a tendency of which this

Industry cannot be said to have been unaware--

if the parties had truly bargained to strip the

-40-

cost of such benefits or plans from the gross wage rates,

such bargain would have been expressed with some clarity

and precision in the Standard Agreement. Par. IB, however,

falls far short of that objective, and, in fact, gives

some support to the position that the only fringe payments not

to be included in the building trade rates are those which

do not involve an immediate vesting of a property interest

in the employee-beneficiary -- such (by way of illustration),

as the vacation plan in Article XII of the Standard Agreement.

2) I find no basis for concluding that there

was any mutually arrived-at and mutually understood

agreement between these parties that the published

Davis-Bacon prevailing rates were to be regarded

as the approved rates for the purposes of the At­

lantic City Plan provisions; This is said despite

the fact that in Area 4, NEMI instructed its members

to use Davis-Bacon rates; and, also, despite the

fact that the parties, both, explored the use of

that Act extensively as a basis for the resolu­

tion of their controversies. However, the proof

-41-

that they actually reached agreement to use Davis-

Bacon rates in the fUture leaves much to be desired.

I am persuaded that when Mahr in his November 20,

1962 letter referred to settlement on the basis of

Bacon-Davis rates he was using "Bacon-Davis rates"

only as a loosely convenient and inaccurate label

for the rates actually agreed upon. So far as I

can determine, the rates agreed upon were identical,

in that case, with the Davis-Bacon rates.

The parties are bound to agree upon rates on

a case by case basis in the future, as in the past;

and, fortunately, they have provided themselves

with an arbitration forum in which disputes might

be resolved. They are free, of course, if they so

wish, to agree upon the use of Davis-Bacon rates.

3) The process of contract construction and in-

terpretation is, in essence, a search for what

both parties reasonably expected of each other in

consequence of the bargain they struck. Whenever

-42-

; , t

i , I I t ~ , ~ ,

I /

I ,

! [ l f

I

it speaks with clarity, their document is the

best evidence of their mutual will and undertakings.

Where the writing is unclear, their conduct, when

deliberate and considered, might shed consider­

able light upon how they, themselves, construed

the written embodiment of their understandings.

Here, the conduct of the parties goes far

to clarify what was not too satisfactorily express­

ed in the writing.

First, I find that the settlements made by

Local Unions and area committees of NEMI to be en­

titled to little weight as evidence. This knife

cuts both ways; because, just as some local unions

permitted vacation and other monies to be stripped

from the building trade rates, so, also did area

committees of NEMI fail to insist upon such rates

being reduced by the amount of vacation and other

deductions. Practice and usage become significant

when there is a conscious knowing and deliberate

acceptance of a certain way of doing things or the

parties may fairly be charged with a conscious,

knowing and deliberate acceptance of the pro­

cedure. Where the particular way of proceeding

was done without a conscious realization of the

considerations involved it sheds little light on

the true and basic intentions of the parties. The

local settlements relied on by the Industry here,

were not true settlements because the elements

of controversy presented in this arbitration case

were not in their minds at the time. In any event,

as the numerous letters in the record make plain,

the local unions and the area committees of NEMI

were not authorities whose decisions as to the

interpretation of the Atlantic City Plan provisions

could have major industry-wide significance as to

the meaning of the Standard Agreement. The local

option provision of the Standard Agreement under­

lines the incapacity . of those bodies to make policy

as to the subject matter of the Atlantic City Agree­

ment.

Second, we have for consideration the actions

-44-

of the parties at the national level and the sig­

nificance of the adjustments made at Miami, Florida,

in February, 1961, in Atlantic City, New Jersey,

in October, 1961 and in New Orleans, Louisiana,

in October, 1962. These actions and the letters

that resulted from the conferences have been the

subject of exhaustive exposition. They signify

that in 1961 and in 1962 (whatever might have been

in their minds in 1921 or in 1957 when "vacations"

was added to par. lB) the parties construed their

Agreement in a manner consistent with the Union's

position in this case. When the parties sat down

to bargain their January 1, 1962--December 31,

1966 Standard Agreement at the end of 1961, the

actions they took at Miami in February, 1961 (the

Atlanta dispute) and at Atlantic City in October,

1961 (The Indianapolis dispute) were before their

eyes. When they re-enacted Article V they did so

with the gloss and significance which their actions

at Miami and Atlantic City gave to Article V in

the previous Agreement. When the parties acted

as they did at and subsequent to the New Orleans

meeting in October, 1962 (with reference to the

Indianapolis and Madison disputes) they effective-

ly confirmed that interpretation, construction and

application of Article V, Par. lB.1§!

The record in this case was reopened, at the

request of the Union and additional testimony taken

with respect to the authority and competence of

the Labor Committee of NEMI and the Executive Com-

mittee of the International Union to make the

settlements on a national basis relied on here by

the Union. Additional statements of position

were made by the parties with respect to the pro-

fusion of evidence presented. My judgment is that

the relations between the parties will only be ex-

acerbated by any painstaking and analytical explora-

tion of the testimony and evidence on the subject;

and it is doubtful that there would be any profit

in burdening this opinion with the detail submit-

ted in support of the respective positions of the

parties. I shall content myself with saying only

1§! To this may be added the interesting circumstance that following the settlement made in the Atlanta dispute in 1961 (Miami meeting) the local groups in subsequent wage deter­minations continued to apply that settlement and," so far as is known, the current wages in that area reflect that settle­ment. Presumably, this is also true of the continued applica­tion, locally, of the other national settlements referred to herein.

-46-

that I have read the transcript of the reopened pro-

ceedings, carefully considered the statements of the

parties thereon subsequently forwarded to me, and

find that at the least. the Executive Committee of

the International Union and the Labor Committee of

NEMI had such ostensible authority to act on behalf

of their principals as to bind them, nationally in

the settlements made. However, the evidence also

justifies a finding that the practices and usages of

the parties, through the years, in the negotiation,

administration, modification, clarification and sup-

plementation of their agreements was lluch as to

clothe the Executive Committee of the International

Union and the Labor Committee of NEMI with plenary

authority to make the settlements referred to at the

annual meetings.

The Company observes, with respect to the set-

tlements, that

"it was in each case a non-controversial matter involving relatively small sums of money. The present case is not simi­lar in any way. It is being vigorously contested and is of large monetary import­ance."

The Company goes on to state that the instant controversy

involves some 10,000 Elevator Constructors and an adverse

decision could impose an "additional wage burden upon the

Industry of $2,000,000 to $4,000,000 per year" (letter of

Fayette Dunn to the Arbitrator, July 20, 1964).

The record does not bear out the Company·s·view

of the disputes which were settled as being minor and

parochial differences of a "non-controversial" character

having no relationship to or impact upon the board nation­

al panorama served by the national agreement.12I It is

evident that the positions of the parties were vigorously

stated and restated at successive meetings by individuals

on both sides ostensibly occupying the most responsible

positions, nationally, for administration of the relation-

ship between the parties. The disputes themselves, and the

nature of the questions raised, did not relate to matters

peculiar to the localities where they arose. The questions

asked were questions pertinent to the fixing of wages through-

out the country wherever the Atlantic City Plan was in ef-

fect. The parties could not settle anyone of those disputes

without the action having an impact, one way or another, on

iii Note that on August 7, 1961 Eckerson, acting for Tofanelli, stating that the vacation plan was a deductible "fringe", said, Significantly, that

"this discussion is not one which concerns money but, rath­er, principle." (Underscoring supplied.)

This statement is hardly consistent with the theory that the settlement was only a pragmatic and bargained "wash-out" of a minor and bothersome claim for a small sum at the cost of its nuisance value.

-48-

all wage fixing under the Atlantic City Plan. When the

highest authorities involved in the administration of

a labor agreement resolve an issue, however local in

its origin, which is potentially applicable to all

other localities affected by the Agreement, they can­

not avoid the precedential consequences of what they

have done unless, perhaps, it is mutually agreed that

the settlement was without prejudice and was not to

be invoked by either party in other like disputes.

There was no such agreement in this case.

The $2,000,000 to $4,000,000 per year figure

is, of course, of awesome proportions and even a labor­

management disputes arbitrator is compelled to pause

for breath when it is mentioned. It is readily conceded

that those who agreed to the settJements referred to

above never had it in mind that what they were doing

might conceivably involve such impressive sums and mone­

tary effects; but the end sought by the Union is the

normal and logical consequence of what they did. The

decision in this case, manifestly, cannot turn on the

extent of the monetary consequences of an award for the'

Union. There is no theory 0:1" adjudication that would

justify this. The decision must be based upon a construc­

tion and application of the understanding of the parties

as evidence by this written agreement and as manifested

by their conduct and actions thereunder to the extent

that they illuminated their understanding of their bargain.

The Industry says, in effect, that the interpre­

tation sought for by the Union is overreaching ("pie on pie")

pyramids benefits and that this departure from the

intentions of the founders sounds a death knell for the

Atlantic City Plan which has served the Union as well

as the Industry so well for so many years. As to this,

I must observe, first, that it is not the office or

function of any ad hoc Arbitrator to moralize or to

act as a labor relations consultant to the parties. It

is my duty to identify and to interpret and to apply the

bargain of the parties. If that bargain had been ex­

pressed with ringing clarity there would be no need

for arbitral services. It was not so expressed, and,

accordingly, there was a need for discerning its sub-

-50-

stance and contents from such evidence as was pre-

sented in the record. In any event, it is the bargain

that is the Arbitrator's quarry and goal, and I have

no business expressing myself on whether the Union

should have pursued this course.

Finally, I wish to remark that parties who pos-

sessed the good sense, ingenuity and sound relationship

that could make the Atlantic City Plan serve them so

well for many years should have the confidence to

believe that, in an industrial world that has changed

so radically since 1921, they will find means of future

accommodation and the furtherance of mutually-held ,

interests. Agreements are made in a context of current

facts of life. When the facts of life change those

agreements are subject to severe strains and pressures.

The writer knows of no other Agreements that have per-

sisted for such a length of time as the Atlantic City

Plan of these parties. It is not astonishing that, in

a changed industrial society, the parties should have

-51-

imparted to it a direction not contemplated, per-

haps, by its progenitors. I do not think it is a time

for mourning as the Industry's argument suggests to

me; but, rather, that the parties who have the capacity

to do so should adapt their old institutions to

changed conditions.

lsi Peter Seitz Peter Seitz, Arbitrator

-52-