The Electrical Worker online
November 2022

Grounded in History
index.html Home    print Print    email Email

Go to
The End of Company Unions

When the United States entered World War I in 1917, the American labor force switched into high gear to produce weapons, ammunition and supplies. With so much demanded of labor, many trades saw an increase in membership, bargaining power and an expansion in rights. When the armistice was declared on Nov. 11, 1918, today celebrated as "Veterans Day" in the U.S. and "Remembrance Day" in Canada, consumer spending was up, factories were producing more goods than ever and the Roaring Twenties were just around the corner.

For the IBEW, our membership had nearly doubled from 60,000 in 1917 to 100,000 in 1920. It was in that year that the IBEW established a permanent International Office in Washington, D.C., a testament to our growing influence in the labor world.

With the war effort drawing down, however, corporate interests were keen on clawing back labor's gains. So began the era of company unions.

Promoted by John D. Rockefeller and given the name "The American Plan" to make it appear more patriotic, the company union movement forced employees to sign "yellow dog" contracts stating they would never join a trade union but instead could vote for company union representatives. These "unions" were staffed by company management and, by default, always held profits above people when it came to the demands of the workers. IBEW leaders quickly saw through the ruse.

Derided as "ultimate serfdom" by International President James Patrick Noonan in 1922, these company unions were known to use paid detectives to foment trouble and start dual movements within a trade to convince workers to leave their bona fide union. "No man who has the interests of the workers at heart will advise you to give up membership in your labor organization," said Noonan. "Those who do so either lack understanding or are the paid representatives of the employer."

Editions of this newspaper were filled with pleas from local unions to avoid the promoters of company unions "as you would any other kind of swindler." One such tale came from the June 1922 issue, which detailed how the Western Union Telegraph Company organized their own "Association of Western Union Employees" to antagonize the Commercial Telegraphers Union of America, a legitimate trade union. When the company announced it would reduce wages to the 1914 level, the "Association" happily accepted the reduction "doubtless as an act of kindness to the company which owned it. That is how a company union operates." Corporate interests did their work well, and by 1930 IBEW membership was reduced to pre-war levels at 60,000.

One of the hardest hit industries by "The American Plan" was the railroad. During the war, the rail system was nationalized by the United States Railroad Administration. A period of relative harmony followed, marked by the establishment of the 8-hour day and the right for shop crafts to fully unionize. But when the war ended and the rails were passed back into private hands, a new entity was created, the Railroad Labor Board (RLB).

While the RLB acknowledged the right of workers to organize, rail company executives lobbied hard to reduce wages for America's 2 million rail workers. In the words of Noonan, the companies "used their vast financial resources of accumulated war-time profits as insurance against strikes." Sure enough, when the RLB approved the wage reductions, 400,000 rail workers walked off the job on July 1, 1922. The strike ended a few months later with an injunction from the federal government, and many IBEW locals settled their demands through negotiations. But for IBEW members of System Council No. 3, the fight went on.

Formed in 1919, System Council No. 3 comprised IBEW railroad locals from Pennsylvania and adjoining states. It joined American Federation of Labor System Federation No. 90, which represented all 55,000 employees of the Pennsylvania Railroad Company. When the company passed back into private hands in 1920, the company refused to recognize its agreements with Federation No. 90. The President of Pennsylvania Railroad, William Atterbury, was a staunch supporter of "The American Plan" and forced his employees to elect representatives for a company union. The shop unions countered with an election of their own that saw 37,000 voting to stay with Federation No. 90. The RLB found both elections invalid and called for a new vote with both union options on the ballot. When Mr. Atterbury refused this compromise, System Council No. 3 and Federation No. 90 voted to strike on July 1, 1922, the same day as the national strike.

While other shop workers across the country could use their union representatives to settle the dispute, IBEW members of System Council No. 3 didn't have that option. They were still fighting for the basic right of representation. Leading the fight was George Woomer, a shop worker from Altoona, Pa., Local 733 and president of System Council No. 3. "Although the American people were led to believe that the war had made the world safe for democracy," wrote Woomer in the January 1923 Electrical Worker, "thousands of men are still fighting for democracy in our industry, and many of the railroad barons are beginning to realize that our shopmen mean to have some of that democracy."

For several years, Woomer's articles were front-page stories, detailing every twist and turn of the Council's battle against the Pennsylvania Railroad company union. The case eventually made it to the Supreme Court, which found in 1925 that the railroad was in violation of the RLB's standards for union representation. "The company union is all that we said it was, the child of the employer and doing his bidding at all times," wrote Woomer. "They have been reducing the wages of the employees they claim to represent. Our members are not falling for their bunk as they realize their benefits come from the one organization that can represent them — the IBEW."

By 1926, public pressure pushed Congress to pass the Railway Labor Act, which not only abolished the RLB and mandated collective bargaining with independent unions, but prohibited "yellow dog" contracts and outlawed company unions as well. Their demands having been met, the System Council No. 3 strike was finally called off in 1928. So, today let us celebrate the efforts of our brethren, who exactly one century ago, launched a vigorous defense of democracy in the workforce and brought an end to the "ultimate serfdom" of company unions.

For more on how to support the IBEW's preservation of its history, visit Have an idea for this feature? Send it to


Members of IBEW System Council No. 3, pictured here, stood up to the Pennsylvania Railroad Company's formation of a company union and went on strike in 1922.