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Frances Perkins, Secretary

Isador Lubin, Commissioner (on leave)
A. F. Hinrichs, Acting Commissioner


Guaranteed-Employment and
Annual--W age Provisions in
U nion Agreements
Effective January 1945

Bulletin T^o. 828

For sale by the Superintendent o f Documents, U. S. Government Printing Office
Washington 25, D« C. - Price 10 cents



Extent and characteristics of guaranteed plans---------------------------------------Guaranty plans in manufacturing agreements----------------------------------------Number and coverage of plans-------------------------------------------------------Plans providing annual guaranties to all employees-------------------------Unconditional guaranties_______ - _____________________________
Conditional guaranties------------------------------------------------------------Annual guaranties to particular occupational groups-----------------------Unconditional guaranties to limited groups------------------------------Conditional guaranties to limited groups----------------------------------Guaranties for periods of less than a year---------------------------------------Guaranty plans in nonmanufacturing agreements-----------------------------------Number and coverage of plans-------------------------------------------------------Annual guaranties to all employees_________________________________
Unconditional guaranties---------------------------------------------------------Conditional guaranties________________________________________
Annual guaranties to particular occupational groups------------------------Guaranties for periods of less than a year---------------------------------------Unconditional guaranties______
Conditional guaranties------------------------------------------------------------Appendix A.— Sample guaranty plans___________________________________
George A. Hormel & Co.— Straight-time arrangement_______________
Nunn-Bush Shoe Co.— 52 week pay plan
Procter & Gamble— Guaranty of regular employment-----------------------





Letter of Transmittal

U n it e d

St a t e s


epartm ent





St a t is t ic s ,

Washington, D. C., April 12, 1945







I have the honor to transmit herewith a report on guaranteed-employment and
annual-wage provisions in union agreements. This report is based on a study of
over 6,500 agreements current as of January 1, 1945, covering over 8 million
This bulletin, a portion of which appeared in the April 1945 issue of Monthly
Labor Review, was prepared by Abraham Weiss in the Bureau’s Industrial
Relations Division under the direction of Florence Peterson, Chief.
A. F . H i n r i c h s , Acting Commissioner.





e r k in s ,

Secretary of Labor.

(V )


Bulletin 7^o. 828 o f the
U nited States Bureau o f Labor Statistics
[Reprinted from the M onthly L abor R eview , April 1945, with additional data]

Guaranteed-Employment and Annual-Wage Provisions
in Union Agreements
Sum m ary

IN KECENT years there has been great interest in various methods
of increasing the job security of American wage earners. The unem­
ployment-compensation laws, public-works programs, and sections of
the Fair Labor Standards Act represent governmental attempts to
provide full employment or measures for alleviating unemployment.
The various State unemployment-compensation laws not only provide
a limited income, after a waiting period and for a maximum number of
weeks, but some of them seek to encourage regularization by including
merit-rating provisions under which the employer’s unemployment
tax decreases in proportion to the increase in employment stabilization.
The Fair Labor Standards Act grants a partial exemption from the
overtime-pay requirements to those companies entering into agree­
ments with unions which guarantee continuous employment for 52
weeks and limit hours to 2,080 per year.
Although a number of employers have made efforts toward regular­
izing employment within their plants, only a few have gone so far as
to guarantee annual wages or employment to all or substantial por­
tions of their employees. The explanation of the infrequency of an­
nual-wage and guaranteed-employment plans in American industry
today lies in the very problem which such plans are designed to cor­
rect. As a rule, the only companies which feel they can guarantee
full-time employment or annual wages are those which have sub­
stantially solved the problem of regularizing employment. Some
guaranty plans, after being in operation for a year or two, have been
abandoned when the companies found they were unable to finance
them during a prolonged decrease in production.
Labor unions, of course, have always been keenly interested in all
efforts, governmental and private, to secure regular and full employ­
ment. On occasion, they have cooperated with employers in plans for
reducing seasonal fluctuations as well as programs for expanding the
business of a particular industry or company. Faced with the stark
fact of insufficient jobs for all, unions have sought to mitigate some
of the effects of job insecurity through share-the-work plans, seniority
rules, and dismissal pay for lay-offs. None of these measures, how­
ever, provides security of income or employment: Sharing work also
means sharing unemployment; seniority rules merely decide who is to
be laid off; dismissal pay only softens the blow from loss of job.



To an increasing extent unions are seeking job security for their
members through the inclusion of employment or wage guaranties in
their contracts with employers. The present report is confined to a
discussion of such guaranties in employer-union agreements.1 As
will be seen in the following pages, very few of the agreements cur­
rently in force contain a guaranty of employment, and most of those
which are in effect are limited in scope. Some restrict the guaranties
to particular groups of workers; some provide less than a year’s
guaranteed employment; some permit the employer to cancel or reduce
the guaranty under specified circumstances. None of them provides
guaranties of employment for prolonged periods of time, since they
are necessarily limited to the duration of the contracts, most of which
are in effect for only 1 year.
Limited as they are, the existing employment-guaranty provisions
in union agreements represent a partial fulfillment of workers’ quest
for job security; they may also indicate the beginning of a more
general adoption of plans which will provide some measure of security
to an increasing number of workers.
Extent and Characteristics o f Guaranteed Plans

Extent of plans.— Guaranteed employment or annual wages are
assured to approximately 42,500 out of the 8 million workers cov­
ered by the employer-union agreements analyzed (table 1). Most of
these workers (approximately 30,000) are employed in the service and
distributive industries, the agreements for which were negotiated
with companies employing relatively small numbers of workers.
Although there are a few outstanding examples’ in manufacturing
companies of considerable size, the total number of employees in
manufacturing industries who are covered by agreements providing
guaranteed employment is very small— about 12,500.
T able 1.—Extent of Employment and Annual-Wage Guaranty Provisions in Union


Agreements examined:
N um ber___________________________ _______________
Workers em ployed.................. ........ ...............................
Agreements providing guaranties:
N um ber____ ___ ____ __________________ _____ ____
Companies covered_______________________ ________
W orkers co v e re d _______________________ ______ ___

All industries


Manufacturing Nonmanufac­
turing indus­






1 The exact number of agreements and companies covered cannot be estimated since many of the agree­
ments are uniform and are separately signed by an unknown number of individual employers, and some
were negotiated through employers’ associations whose membership is not available. In such instances,
available em ployment data for industries and areas are used for estimating the number of workers covered
by the agreements.

Types of plans.—Broadly, the plans provided in current employerunion agreements are of two kinds— those guaranteeing employment
and those guaranteeing annual wages. The employment-guaranty
plans specify the number of weeks or hours of work to be provided to
employees each year, without specifying the amount of earnings to be
See M on th ly Labor Review, August 1940, p. 283, for report similar to this one.

received. In other words, what is guaranteed is a year’s job (or in
some cases, a fraction of a year) with the total annual earnings left a
variable. Under annual-wage plans, the employee is guaranteed a
weekly income throughout the year, regardless of daily or seasonal
fluctuations in employment. Actually, the distinction between
guaranteed employment and annual-wage plans is one of emphasis
only, for if the employer cannot furnish sufficient work to fulfill the
contract, wages must be paid for the remainder of the time guaranteed.
The significant differences among the several plans have to do with
the relative completeness of the guaranty, that is, how closely the
guaranty, whether expressed in wages or in work, comes to providing
the equivalent of full employment at normal wages.
Existing guaranty plans represent various arrangements and degrees
of regularizing employment or income. In some instances the regular
weeldy wage is assured for a given number of weeks and a proportion
of wages (half pay) is guaranteed during all or a specified number of
the remaining weeks. Certain plans guarantee a specified number
of hours’ or weeks’ work a year. Under the hour guaranty, weekly
earnings fluctuate according to the actual hours worked in any week;
under either plan, if less than 52 weeks or 2,080 horns are guaranteed,
the worker has no assurance of a full year’s employment or earnings.
Under some plans, full pay during weeks of less than full employ­
ment is compensated to the employer by extra work during peak
seasons with no increase in the weekly pay during these overtime
weeks; under others, the guaranteed wage represents a minimum to
which overtime is added when worked. Somewhat similar to a
guaranteed-wage plan is the wage-advance arrangement whereby an
employer makes a cash loan to eligible workers in “ short” weeks to
bring their wages up to specified amounts, these advances being sub­
sequently repaid by automatic deductions from wages earned during
full-time or overtime weeks. One well-known plan guarantees each
eligible employee 52 pay checks per year regardless of business con­
ditions or regularity of employment, but the total annual wage
fluctuates since the fund from which the pay checks are drawn is a
specified percentage of the company’s gross income.
Restrictive and qualifying provisions.—The plans differ not only with
respect to the proportion of a year’s normal income or work which is
guaranteed, but also as to the inclusiveness of the labor force that
benefits from the guaranties and as to the conditions, if any, which
relieve the employer of fulfilling the guaranty obligations. For ex­
ample, if the guaranty applies to only a small number of key employ­
ees, the plan may involve no major effort toward plant-wide stabiliza­
tion but represent merely a contractual arrangement for employees
who would in any case be fairly regularly employed. Even when the
plan covers most of the employees within the plant, benefits are neg­
ligible if there are reservations attached which tend to reduce the
guaranty as the hazards of unemployment increase.
The contractual obligation under any plan included in a general
employer-union agreement is necessarily limited to the effective period
of such agreement. Although a few agreements, particularly in the
trade industries, are in effect for 2 or 3 years, most of them are nego­
tiated for 1-year terms and the contractual guaranties therefore are
automatically limited to seasonal or intermittent situations rather than
to prolonged periods of business depression.
632928°—46------2 .

The most extended coverage in existing guaranty plans includes all
“ regular” or “ permanent” employees or all those who have completed
a probationary period, usually designated as 6 months. Other agree­
ments specify “ basic crew,” sometimes designated by name, or a fixed
total number, with provision for new persons to become eligible if
vacancies occur within the original group. The most restricted plans
limit the coverage to a relatively few highly skilled craftsmen and
foremen or particular groups, such as truck drivers.
Some of the plans covering the greatest number of employees have
no qualifying clauses; in other words, the employer is obligated to
fulfill the terms of the guaranty as long as the agreement is in effect,
no matter what circumstances may develop. Several specifically re­
voke the guaranties in case of bankruptcy or sale of the business and
reserve the right to suspend them in emergencies such as fire, flood,
strikes, and other situations beyond the management’s control. Some
plans go much farther and allow the employer to reduce or cancel his
obligations in case of “ serious decline of business” ; in most such cases,
however, this cannot be done without permission of the union or after
arbitration, and frequently dismissal wages are provided in lieu of
payment of the guaranteed annual wage.
Guaranty Plans in M anufacturing Agreem ents




Out of a total of about 6,500 agreements analyzed in manufacturing
industries, covering over 6 million workers, 131 provide some form of
guaranteed-employment or annual-wage plan. These cover approxi­
mately 12,500 workers in 142 manufacturing companies.4 Eightyeight of these companies, employing about 5,850 workers, guarantee a
full year’s employment or wages; the other 54 companies, employing
about 6,500 workers, provide guaranties of less than 1 year. Unquali­
fied year-round guaranties to all or most workers in the plant are
provided in only a few agreements, but these cover some of the largest
companies having guaranty provisions. Most of the guaranties, both
for the year and for shorter periods, have qualifying provisos which
allow cancellation or modification under specified circumstances and
limit the coverage to certain employees— to those on specified occu­
pations, to those in the company’s employ at the time the agreement
was signed, to a specified number, or to employees with a specified
period of service (table 2).
Most of the employment or wage guaranties in manufacturing in­
dustries are incorporated in 1-year agreements, although one plan
assures minimum annual wages for 5 years, subject to certain condi­
tions based on the employer’s financial ability. One plan, included in
uniform agreements signed separately by 58 companies in the textile
dyeing and finishing industry, is effective for approximately 2% years.
In the agreements analyzed, annual wage guaranties for all or
virtually all the company’s employees are provided by companies
engaged in the meat-packing, shoe, dairy, and leather-products in­
dustries. Limited groups of workers are covered by wage guaranties
signed by companies in the textile printing, finishing, and dyeing,
ladies’ apparel, grain-milling, and ice industries. Employment
guaranties, for both yearly and shorter periods, are provided by a
« Plans covering truck drivers only are considered under nonmanufacturing, even though the agreement
m ay be signed b y an employer in a manufacturing industry.

varying number of agreements in the grain- and cereal-milling, dairy,
syrups and preserves, electroplating, dress manufacturing, soap, tex­
tile refinishing and bleaching, fur designing, and millinery industries.
Although the majority of these agreements containing employment
or wage guaranties were signed by individual employers, most of them
are of a standard or uniform type. Fifty-eight textile dyeing and
finishing companies in the New York metropolitan area, and about
40 textile printing establishments are signatory to standard agree­
ments negotiated by unions with jurisdiction over skilled employees
and foremen only. One of the standard agreements included in this
study was with a local association of employers in the syrups and
preserves industry.
T able 2.— Characteristics of Guaranty Provisions in Collective Agreements in Manu­

facturing Industries
Num ber of


Num ber of

N um ber of

Total agreements analyzed, having guaranty provisions.




Annual guaranty.....................................................................
Covering all or most employees.....................................
Covering particular occupational groups.....................






Less than full-year guaranty.................................................
Covering all or most employees....................................
Covering particular occupational groups.....................
Unconditional................................. ..........................




Unconditional Guaranties

Five of the seven agreements which extend annual wage or employ­
ment guaranties to virtually all plant employees have no qualify­
ing clauses permitting modification or cancellation during the life of
the agreements. Two of these cover approximately 4,000 workers
employed by a meat-packing company, one covers about 1,000 shoe
workers, and two cover about 100 workers employed by dairy and
hardware companies. One of the latter, an agreement with a small
dairy in Wisconsin, pledges the employer to “ maintain such weekly
hours as will best serve its regular personnel maximum and continuous
employment; such hours to average 50 per week over a 1-year period,”
with time and a half for work over 40 hours in any 1 week.5 “ Kegular
personnel” includes workers who have completed the 300-hour pro­
bationary period.
A 1-year agreement with a southern hardware company6 assures
each employee a guaranteed minimum weekly wage, equal to 40
times his straight-time average hourly earnings for the preceding year,
each week during the life of the agreement. Time and a half is paid
for all hours over 8 worked in any 1 day or over 40 worked in any 1
« The union involved is the Food, Tobacco, Agricultural & Allied Workers (C . I. O.).
* Agreement negotiated b y the United Steelworkers of America (O. I. O.).

George A . Hormel & Co.— The Hormel annual-wage plan for all
plant personnel, as incorporated in its agreements covering its Austin
(Minn.) and East St. Louis (111.) plants,7 amounts to advances on
wages during periods of unemployment and repayment of such ad­
vances through the working of extra hours, during peak periods, up
to 53 hours. The hours of work fluctuate, but the weekly pay re­
mains unchanged.
Under the Hormel “ straight time” plan each worker is employed on
an annual basis and is assigned a regular weekly rate which is deter­
mined by budgeting over a 52-week period the estimated annual labor
cost of the department.8 The total annual labor expenses for a
department are estimated and one fifty-second part of this cost is
allocated as a weekly wage cost, which is divided into equal weekly
payments graduated according to occupation among the workers
.estimated as necessary to do the work, regardless of the number of
hours worked in any particular week. In return, employees regularly
attached to a department work as many hours as are required to
turn out the production scheduled, without extra pay, up to a maxi­
mum of 53 hours during peak periods; however, when they are
required to work more than 10 hours in any 1 day, overtime is paid
for hours worked in excess of 48 in that week.9
The yearly wage is calculated on the basis of a 40-hour week in
most departments, with an allowance for vacation and sick leave.
In other departments, in which the budget is insufficient to guarantee
40 hours’ pay or for which it is most difficult to forecast yearly pro­
duction accurately, the yearly wage is based on 38 or 36 hours’ pay
as a safety margin. If at the end of the year employees in these
departments have worked more than the hours paid for, they receive
a year-end check for extra hours actually worked.
Bonuses are paid to all plant employees (except a small group of
engineers, maintenance men, and elevator operators) if actual produc­
tion exceeds the estimated volume. In general, the scheduled annual
total of unit production divided by 2,000 constitutes one productionhour for the department. Each department is reimbursed for the
excess of production-hours over total man-hours actually worked,
and this money is thereupon allocated to the individual workers on
the basis of their “ hourly” rates.10 When members of a gang are
absent, their wages are credited to the gang, and are divided among
the employees in the gang at the end of the year.
Nunn-nush Shoe Co.— The Nunn-Bush plan, which was evolved as
a part of the management-worker partnership ideal, guarantees 52
pay checks a year to practically all employees with at least 2 years’
service.11 A specified percentage of wholesale value of shoes sold,
7 T he union at the Austin plant is the United Packinghouse Workers (C . I. O.) and that at the East
St. Louis plant is the Amalgamated M eat Cutters & Butcher W orkmen (A. F. of L .).
8 Data are from union agreement on file in Bureau of Labor Statistics and report entitled “ T he Hormel
Annual Wage, Wage Incentive and Joint Earnings Plans,” published b y George A . Hormel & Co., Febru­
ary 1944.
• Extra gang employees receive time and a half for work in excess of 12 hours a day or 56 per week,
maximum straight-time hours permissible under Section 7(b)(2) of the Fair Labor Standards A ct. A t the
East St. Louis plant, time and a half is paid to all employees for work over 10 hours per day or 53 per week.
i® The Hormel East St. Louis agreement provides that if at the end of the fiscal year production is less than
the budgeted volume of work “ the members of the group individually and collectively become indebted
to the com pany for producing that much extra work at the first opportunity, without extra pay.” If pro­
duction has exceeded the yearly schedule, each member of the group receives a bonus on the basis of one
fortieth of a week’s pay foi each specified unit of production in excess of quota.
ii The plan now covers the com pany’s Milwaukee plant only. A somewhat similar plan for the com­
pany’s Edgerton. W is., plant was discontinued at the outbreak of the war when most of the plant’s regular
employees went mto the armed services.

representing the ratio of labor costs to wholesale value of shoes as
determined from past years’ experience, is put into a Share Production
Fund from which all wage payments except those for overtime are
Individual weekly drawing accounts are established for each eligible
employee from this fund on the basis of one fifty-second of the indi­
vidual’s *'‘yearly differential rate,” obtained by multiplying the
worker’s present average hourly drawing by 2,080 (40 hours X 52).
Individual “ differential rates” vary according to occupation. A
reserve fund of 12% percent of the yearly differential rate is maintained
to insure regularity of income. Full weekly drawings (one fiftysecond of the individual’s yearly differential rate) are issued unless
the individual employee’s reserve falls below 5 percent of the annual
estimated income. When an individual’s reserve account exceeds
12% percent of the annual estimated income, the excess is paid as a
monthly (or adjusted compensation) check. The company pays the
prevailing rate of interest on savings-deposit accounts on the reserve.
Changes in the weekly drawing are made by increasing or decreasing
the yearly differential rate; a downward revision in weekly draw­
ing may be made if continued payment of the regular weekly drawing
would reduce the reserve below 5 percent of the annual estimated
The plan covers all employees with 2 years’ service except handi­
capped workers. Eligible workers are classified into A, B, and DB
members. Class A members, limited to 595, may not be laid off; the
others may be laid off if work for the first group falls below 40 hours
a week, but as long as employed they participate in the Share Pro­
duction Fund. Each month, the company furnishes the union with
an estimate of the status of the Share Production Fund and at the
end of the year union accountants are given access to the company’s
records to check the wholesale value of the shoes packed during the
life of the agreement and the wages paid out of the fund.
Conditional Guaranties

Two of the 7 agreements which assure employment or wages on an
annual basis, to all the plant’s employees, include certain limitations
on the employer’s responsibility. These conditional guaranties cover
about 250 workers.
Under one of these, effective for 1 year with a grain mill,12the work
guaranty is 48 hours for millers, machine tenders, and one millwright,
and 40 hours each week for all other “ regular employees” (i. e., those
with at least 60 days’ service). Time and a half is paid for work over
8 hours per day or 40 per week. However, employees may be laid off
regardless of the guaranty during any prolonged shut-down caused
by an “ act of God, lightning, fire, or explosion.”
The other agreement, in effect for 5 years with a southern textile
dyeing company 13 employing about 200 workers, provides minimum
weekly wages ($18 for men and $15 for women)14to employees with 6
months’ service, but limits the company’s obligation to $8,000 per
year. In the case of employees who fail to report for work when
12 Agreement negotiated b y the American Federation of Grain Processors Council (A . F. of L .).
is Agreement negotiated b y the Federation of Dyers, Finishers, Printers, & Bleachers (C . I. O.).
i* During employment, the minimum hourly scale is 80 cents for men and 62 cents for women, or weekly
minimums, on a full 40-hour basis, of $32 and $24.80, respectively.

notified, the equivalent of the amount earned by workers in their
department is deducted from their weekly minimum, but such deduc­
tions are applied only during slack periods when application for the
weekly minimum is made.

In 69 of the 131 manufacturing agreements providing continuous
annual employment or a minimum annual wage, the guaranties are
limited to a specified number of the plants’ employees or to those
engaged in particular occupations. About 500 workers, employed
by 82 different firms, are covered by these guaranties. In 10 of these
agreements the guaranty is unqualified, but in the remaining 59 is
subject to cancellation or modification in emergencies.
Unconditioned Guaranties to Limited Groups

Of the 10 agreements which guarantee a minimum annual wage
to a limited number of workers 7 refer to or contain provisions similar
to section 7 (b) (2) of the Fair Labor Standards Act.16 Four of these,
with individual textile printing firms, were negotiated with a union
representing highly skilled printers only; the fifth, with 5 ice-manu­
facturing companies, was signed with a union consisting of only
engineers-in-charge and operating engineers; the sixth, with a midwestern millinery firm employing about 300 workers, limits the guar­
anty to foremen and 1 head machinist; and the seventh, with a grain
firm, is limited to maintenance employees and watchmen.16
Each of these seven plans restricts the annual hours to be worked—
2,000 hours under the textile-printing, ice-manufacturing, and grain­
milling agreements, and 2,080 hours under the millinery agreement.
The millinery and the four textile-printing agreements specify time
and a half for work over 40 hours per week, although the textile plans
permit the workweek to be extended by mutual consent to a maximum
of 48 hours. The ice-manufacturing and grain-milling agreements re­
quire overtime pay only after 12 hours per day or 56 hours per week.
Under the textile-printing agreements, employers unable to work as a
result of physical disabilities arising outside the course of their em­
ployment receive pay for not over 2 weeks, with the understanding
that the hours paid for shall be made up if possible. A discharged
employee receives 1 full week’s pay. Vacancies caused by discharge
must be filled immediately, for the remaining period of the contract.
The annual guaranties in 3 of the 10 agreements which limit the
guaranty to particular employees, but carry no other qualifications,
are not subject to the Fair Labor Standards Act. A Chicago dress
manufacturer guarantees cutters, representing about 10 percent of
the work force, a specified annual salary, exclusive of overtime.17 An
association of 10 employers engaged in the manufacture of syrups and
Under section 7 (b) (2) of the Fair Labor Standards Act of 1938, employers may obtain partial exemption
from the overtime requirements of the act b y entering into agreements (with unions certified as bofia fide by
the National Labor Relations Board) that provide for employment on an annual basis and limit hours of
work to 2,080 in any 52 consecutive weeks. Employees must be paid time and a half for hours over 12 per
day or 56 per week.
i« The unions signing these agreements are, respectively: Machine Printers Beneficial Association (Ind.);
International Union of Operating Engineers (A. F. of L.); United Hatters, Cap & Millinery Workers
(A. F. of L.); and Food, Tobacco, Agricultural & Allied Workers (C.I.O.). W hile this last agreement
does not specify annual employment or an annual wage, the guaranty is implied b y virtue of the overtime
it Agreement negotiated by International Ladies’ Garment Workers’ Union (A. F. of L.).

preserves, guarantees “ permanent routemen [driver-salesmen] and
cooks” 52 weeks of steady employment in each of the 2 years of the
agreement.18 One company, engaged in electroplating and employing
about 60 workers, guarantees 5 designated maintenance men 48
hours of work “ or the monetary equivalent thereof” in every week
during the 52-week period of the contract. The agreement does not
mention overtime pay.19
Conditional Guaranties to Limited Groups

Of the 59 agreements providing conditional guaranties to limited
numbers of employees, one is a 1-year grain-milling agreement
coveringfewer than 15 employees.20 It guarantees annual employment
to all those in the bargaining unit at the time the agreement was
negotiated, but not to employees thereafter hired; the guaranty is
void in the event of sale or liquidation. If it becomes necessary to
lay off more than 2 employees on the seniority list in order to maintain
the 52-week guaranty to the senior employees, and no agreement on
the lay-off is reached, the issue may be arbitrated. The guaranty
provides a minimum weekly wage equivalent to 40 times an em­
ployee’s hourly rate for 52 consecutive weeks, with time and a half
for all work in excess of 40 hours per week.
Fifty-eight agreements in the textile dyeing and finishing industry
in the Paterson (N. J.) and New York areas, negotiated by local
unions of foremen, skilled employees, semiskilled employees, and
assistant colorists, guarantee annual wages to these particular groups
of employees; the guaranty is cancelled in the event any plant or
department is shut down by “ Government directive order.” 121 An
employee whose services are ended because of “ job or department
elimination” receives severance pay equal to 2 percent of his annual
earnings for each year of service up to a maximum of 5 years, and any
discharged worker is entitled to 2 weeks’ severance pay (discharges
are not arbitrable).
Pay on the basis of 52 weeks per year is provided for all skilled em­
ployees who have passed a 30-day probationary period and to all
semiskilled employees and assistant colorists previously paid on a
basis of 52 weeks per year, “ provided, however, that this condition
shall not be construed to mean that if the employee’s relations with
the company are severed voluntarily or involuntarily, that such em­
ployee shall be entitled to the weekly wage based on the 52-week
principle.” For semiskilled employees and assistant colorists not
previously paid on the basis of 52 weeks per year, the agreement
provides half pay up to 14 weeks if the plant or department shuts
down for more than 6 weeks for lack of work. New employees, who
replace those on the 52-week basis leaving the company’s services
either because of discharge or by resignation, must be placed on the
full-year basis.




Employment or wage guaranties for periods of less than a full year
are provided in 55 of the 131 manufacturing agreements studied*•
i* Agreement negotiated b y United Retail, Wholesale & Department Store Employees (O .I.O.).
*• Agreement negotiated b y United Electrical, Radio & Machine Workers (O .I.O .).
negotiated b y the International Brotherhood of Teamsters, Chauffeurs, Warehousemen and
Helpers (A . F. of L .).
These local unions are affiliates of the Federation of Dyers, Finishers, Printers & Bleachers (C .I.O .),
m Agreement

which include guaranties. These cover about 6,500 workers and,
with a few exceptions, the guaranties are limited to particular groups
of employees and may be suspended by the employer either when
specific contingencies occur or “ at any time.”
Fur-clothing industry.—Under 1 agreement, negotiated for a 3-year
period with 12 employers employing a total of fewer than 50 fur de­
signers, patternmakers, and fitters,22 the annual guaranty amounts to
46 full weeks of work (except for fitters, who are guaranteed 47
weeks), exclusive of vacation with pay or overtime.
Dress manufacturing.—Under 2 dress-manufacturing agreements
in Wisconsin, negotiated for 3-year terms, a specified number of
permanent employees (about two-thirds of total plant employment)
are guaranteed 45 weeks or 1,800 hours of work for each contract
year.23 The employer, however, has the right to cancel the guaranty
if present wages are increased by 5 percent or if he is “ not * * *
able to comply with the guaranty of the equivalent of 45 weeks of
employment.” In the latter case the 5-percent increase in wages is
automatically effective.
The guaranty is exclusive of overtime but includes paid vacation
time, the latter being credited on the guaranty on a pro-rata basis in
case of cancellation. Vacancies among the permanent staff are auto­
matically filled by temporary workers “ whose efficiency averages 87%
percent of the base rate for three previous pay periods.” Permanent
workers absent “ for a legitimate reason or sickness for 2 months, or
less,” are entitled to return to the permanent list, if vacancies are
available at the time of the return. Employees absent from work
without legitimate excuse and without notification to the company
lose their permanent status, but determination of such status must
be mutually agreed upon by the company and union.
In the event the employer has been unable to furnish 1,800 hours’
work to the permanent employees during any contract year, he may
either pay a refund (minimum rate for piece workers and hourly rate
for time workers) for such hour deficit, or pay back 5 percent of the
earnings of such permanent employees from the beginning of the
yearly contract period. If the employer cancels the guaranty during
the contract year, the refund is based on the proportion of hours
worked to the prorated guaranty.
In the event the employer complies with the conditions and penal­
ties established for cancellation or nonfulfillment of the guaranty, he
is credited with State unemployment benefits received by the em­
ployees affected; but if employees find temporary employment else­
where, he is credited with such earnings against any hour or week
deficit resulting from such cancellation or nonfulfillment. If, how­
ever, he elects to pay to the employees.5 percent of earnings from the
date of any yearly contract period, in lieu of making up the horn
deficit, he is not credited with such unemployment benefits or earnings.
Time lost as a result of plant shut-downs caused by “ fire, tornado,
explosion, or any other catastrophe beyond the control of the em­
ployer” or by voluntary absence from work or through sickness, is
deducted from the guaranty. The employer is also relieved of obli­
gation in the event he discontinues business. All the terms and
conditions affecting the guaranty are subject to arbitration.
Agreement negotiated b y International Fur and Leather Workers’ Union (C. I. O.).
* Agreements negotiated b y International Ladies’ Garment W orkers’ Union (A. F. of L .).

Cereal and grain companies.—The work-guaranty plan in a com­
pany making cereals24 includes a wage “ loan” when less than 30
hours’ work is provided in any week. This company, operating on a
normal 40-hour-week basis, guarantees a minimum of 1,704 working
hours annually, including vacation time, to employees with 3 years’
seniority, provided such workers have reported and worked whenever
work was available. The guaranty is subject to a deduction for time
lost through sickness or accident or shut-down of the mill, caused
directly or indirectly by fires, strikes, floods, and other causes beyond
the company’s control.
An employee with 3 or more years’ service who in any week earns
wages for less than 30 hours, owing to lack of work, is paid for the
actual hours worked plus (if he so requests) the difference between
actual earnings and 30 hours’ pay. The money advanced is deducted,
interest free, from the first week’s or weeks’ wages amounting to
more than 30 hours’ work. When employment is terminated for any
reason, all excess payments become immediately due and payable in
Five agreements, covering separate plants of another company
making cereals and other grain-mill products,25 with about 2,000
workers, contain a reference to the existing “ guaranteed work plan.”
Although the plan grants the company the right to modify or termi­
nate it at any time, 2 of these agreements provide that the plan shall
continue during their term; 1 restates the company’s right, “ in the
event of changed conditions,” to change or terminate the plan; and
the remaining 2 make no reference to this point.
This “ guaranteed work plan” assures 140 hours of work per month
and provides a system of lay-off pay to hourly and piece workers with
6 months’ accumulated service within a continuous 12-month period.
New employees are eligible to participate, after completing similar
service requirements, upon approval of the plant management.
Guaranteed time is calculated once a month and is included in the
pay for the latter half of each month. Vacation time is included in the
guaranty but time lost for personal reasons, sickness, and accident
is deducted.
In case of lay-off, a qualified employee is entitled to 70 hours’ pay
per month at his regular rate for from 2 to 6 months, depending on his
length of service, with a maximum of 6 months’ lay-off pay for 3 years’
service. Payments are discontinued, however, if full-time employ­
ment is obtained elsewhere or if an employee fails to return upon
request, or if he quits, is discharged, or is laid off because of destruc­
tion of property or because of the permanent closing of a plant or
department. An employee returning to work after a lay-off auto­
matically comes under the 140-hour guaranty for the calendar
month in which he returns, unless he was off for more than 6 months,
in which event he is considered as a new employee and not eligible
for guaranteed employment for another 6 months.
Procter & Gamble.— Nine agreements covering plants of the Procter
& Gamble Co.26refer to the company’s guaranteed-employment plan,
reaffirming the company’s right to terminate or modify it at any
time. The plan covers all hourly paid employees who have been in*2
2* Agreement negotiated b y the American Federation of Grain Processors (A. F. of L .).
28 Agreements negotiated b y locals of the Food, Tobacco, Agricultural & Allied Workers Union (C. I. O.)
20 Agreements are signed b y local unaffiliated plant unions. The guaranty applies at another plant of
this company, but is not referred to in the agreement for this plant.

the company’s service for a period of 2 years, except workers hired to
replace those in military service, who are considered temporary
employees. Eligible employees are guaranteed work for 48 weeks
per year, less time lost for holiday closings, disability because of
sickness or accident, voluntary absence, and certain emergencies such
as floods, fires, and strikes.
The plan has certain protective clauses which permit the company
to transfer employees to other work (even to that paid at a lower
rate), to change the number of hours constituting the established
workweek to which the guaranty applies, and to reduce the hours of
guaranteed work to 75 percent of the standard workweek in effect at
each plant.
Textile 'printing.— Wage guaranties amounting to less than a full
year’s earnings are provided in 37 agreements negotiated by a union27
which includes only highly skilled textile printers. In 17 of these,
covering silk-textile printing firms, printers and apprentices are
guaranteed full pay from January 1 to July 15, and half pay for any
period in the rest of the year during which they may be out of work,
with the stipulation that if hostilities should terminate prior to a
specified date or if Government orders or directives issued
prior to that date “ confront the industry with a curtailment of
business which reduces operations,” either party may, on 15 days’
notice, request negotiations on the advisability of “ maintaining or
modifying the full-work guaranty.” 28
The other 20 agreements covering cotton-textile printing firms,
provide no guaranty of full pay during specified periods but specify
without any qualifications “ one-half pay for any 17 weeks during
which, at any time throughput the terms of this contract, a printer is
not employed.” Under these agreements, employees receive a full
week’s wages, whether or not they work a full 40 hours, if they report
without previous lay-off notice from the company or if they work at
any time during any calendar week; under the silk-textile printing
agreements, they receive full pay if they report for work or if they
work at any time during any 3 days of any calendar week. Under
both plans, a printer who leaves a company’s employ, or who has
been discharged, must be replaced by another journeyman printer for
the remaining period of the agreement.
Guaranty Plans in Nonmanufacturing Agreem ents

Approximately 30,000 workers in nonmanufacturing industries, out
of an estimated 2 million workers under the nonmanufacturing
agreements included in this study, are covered by some form of employ­
ment or wage guaranty.29 Over 90 percent of these workers receive
year-round guaranties, while the others are assured employment or
wages for periods of less than a year.
Most of these plans cover persons employed in retail and whole­
sale trade, chiefly in New York City. Others cover workers in service
industries, such as cleaning and dyeing establishments, and in main­
tenance work in hotels, office buildings, and railroads, as well as public» Machine Printers Beneficial Association (Independent).
38 Foremen, under these agreements, “ must be hired on an annual basis and shall receive an annual salary
payable in equal weekly installments."
31 See footnote to table 1, page 2.

utility employees, press wireless operators, and employees in social
services, cemeteries, and custom tailoring. In several branches of
retail and wholesale trade, the agreements examined were negotiated
with employers’ associations and cover numbers of employers, while
elsewhere identical agreements have been signed separately by
individual employers.
Owing to the nature and type of the industries involved, the normal
size of establishment which these agreements cover is very small.
In addition, the guaranty most frequently covers only a portion of
the working staff—a “ basic crew” agreed upon at the time the agree­
ment was negotiated. According to some of the retail-trade agree­
ments—for example, those covering department or specialty stores—
only such skilled employees as custom tailors or furriers benefit from
the guaranties. However, with few exceptions, replacements of
covered employees are included in the plans, and there is no reduc­
tion, therefore, in the number of full-time guaranteed jobs.
The majority of the agreements which contain guaranties are in
effect for 2 years, and in one instance for 3 years. Most of them are
voidable under certain specified conditions, among which are liqui­
dation or discontinuance of business, withdrawal of capital, “ mate­
rial decrease in revenue,” “ unforeseen catastrophe,” “ conditions
arising out of the national emergency,” situations “ seriously affect­
ing either party,” etc. In the event of disagreement between the
parties on the necessity for the modification or termination of the
guaranty, arbitration is usually specified. Under a few plans, chiefly
in trade but including a telegraph agreement covering press wireless
operators, dismissal pay is granted to employees laid off.

Unconditional Guaranties

Some of the nonmanufacturing plans guarantee year-round work
to all employees without restrictions of any kind. Between 10,000
and 13,000 workers in over 2,400 retail establishments in New York
City are covered by such guaranties in 2-year agreements negotiated
with grocers, fur dealers, and men’s and boys’ clothing merchants and
in 1-year agreements covering retail liquor dealers.30
The food and grocery store 2-year agreements, negotiated with
several employers’ associations as well as with individual employers,
specify that all employees “ now or hereafter employed * * * are
to be continued in such employ during the life of the agreement,”
and no worker “ employed * * * continuously for a period of one
week or longer shall be discharged except with the written consent
of the * * * union.” The entry of a new partner into the firm
is not deemed cause for discharge. The fur and liquor agreements
guarantee 52 consecutive weeks of work, exclusive of overtime, and
the men’s and boys’ clothing agreements assure continuous employ­
ment to every “ steady” salesman and stock clerk throughout the life
of the 2-year agreement and thereafter, unless his employer gives him
and the union at least 2 weeks’ notice of discharge prior to the expira­
tion of the agreement. Both the food and clothing agreements
require that vacancies be filled immediately.
so These agreements were negotiated b y the Retail, Wholesale & Department Store Employees
(C . I. O .), Fur & Leather Workers Union (C . I. O .), Amalgamated Clothing Workers (C. I. O .), and
Retail Clerks International Protective Association (A. F. of L .), respectively.

Conditional Guaranties

A number of the other agreements in retail trade, both with em­
ployers’ associations and with individual employers, guarantee yearround employment to all employees but permit the guaranty to be
cancelled under certain specified circumstances. About 375 firms,
employing over 1,800 'workers in men’s hats and furnishings and cigar
and luncheonette stores, subway newsstands, and alteration and tailor­
ing of fur garments, provide such conditional guaranties.31 Except
for the fur and retail cigar and luncheonette store agreements which
run for 2 years, these are 1-year agreements and the guaranties assure
a minimum coverage through a provision that vacancies must be
filled immediately or within a few weeks.
The retail men’s wear agreements guarantee to each employee,
after a 2-week trial period, “ 52 consecutive weeks of employment”
but the employer retains the right to discharge employees, subject
to arbitration, under the following specified circumstances: For good
cause, such as insubordination or dishonesty; upon 2 weeks’ written
notice to the union and with its written consent; in the event a store
is discontinued; or when the employer is in need of “ relief.” The
last mentioned refers to a situation in which an employer’s business
has changed permanently for the worse, so that it is financially im­
possible for him to continue to employ his full staff of regular em­
ployees. “ Slack season” is expressly ruled out as a basis for discharge.
The employer has the right at the expiration of the agreement to
make changes in the labor force, provided the union is given 6 weeks’
prior notice, but no personnel changes may be made unless the union
accepts the change, within a week after notice. In disputed cases,
however, the employer may seek arbitration.
The agreements with retail cigar and luncheonette stores likewise
guarantee 52 consecutive weeks of employment, including limited
sick leave, for all employees retained after a 2-week trial period.
Three weeks’ dismissal pay is provided for employees affected by
“ a lay-off or a store closing * * * where less than 4 employees
are employed and where unemployment insurance is not being paid.”
No employee may be discharged, suspended, or laid off pending an
application to the union and a decision by the arbitrator, and the
entry of a new or additional partner or stockholder is specifically
mentioned as not being a sufficient cause for discharge.
A 2-year agreement with an association of fur merchants in Atlantic
City guarantees all employees 1,750 hours of work a year, which is
the equivalent of 50 weeks based on the standard 35-hour workweek.
Paid vacations of 1 or 2 weeks, depending upon length of service, are
also provided. The guaranty may be invalidated only in the event
of “ an unforeseen catastrophe which makes it physically impossible”
for the employer to furnish 1,750 hours of work and if the employer
“ actually does not have 1,750 hours of work for the particular year
except that an employer who violates this agreement by sending
work to outside contractors shall be deemed to guarantee 1,750 hours
of work in any event.”
Another agreement guarantees agents currently employed on sub­
way newsstands not less than 1 year’s employment, except for certain
31 Agreements for the men’s furnishings and luncheonette stores were negotiated b y the Retail, W hole­
sale & Department Store Employees (C . I . O.); for newsstands, b y the United Office and Professional Workers (C. I. O .); and for fur shops, b y the International Fur & Leather Workers’ Union (C. I. O.).

stands which are closed during the summer months, in which case
the guaranty is for 9 months’ employment. However, the company
reserves the ri^ht to discontinue the operation of any newsstand as
a result of conditions beyond its control and arising out of the national
emergency. In the event that the subways discontinue any present
services, the company may lay off men in proportion to the number
of stands discontinued. Relief from the guaranty clause in the event
of any unusual conditions—“ including material decreases in the rev­
enue from the stand” — is also granted.

About half (13,000) of the total workers in nonmanufacturing
industries, covered by year-round guaranties, include special groups
of employees who comprise only a part of the working force of about
2,000 employers. These workers include cemetery employees, truck
drivers, railroad maintenance and repair workers, public-utility
employees, social-service employees, inside cleaning and dyeing
workers, retail and wholesale clerks, bushelmen, and fur workers in
fur shops and department stores. The majority of these agreements
permit the employer to modify or cancel the guaranty under speci­
fied circumstances.
Two agreements for cemetery employees guarantee specified
amounts of employment to their “ regular” employees.32 One estab­
lishes 3 classifications of workers: “ Casual employees” ; a basic
crew of “ regular employees Class A ” who are paid regularly irrespec­
tive of weather conditions and may not be laid off; and a basic crew
of “ regular employees Class B ” who are guaranteed a minimum of
33 weeks of employment during the 9 months between April and
December. Basic Crews A and B have approximately the same
number of employees and vacancies must be filled within 2 weeks ex­
cept vacancies in the Class B quota after November 15. Any season’s
quota of Class B employees must include those in that classification
during the previous season and any necessary replacements to main­
tain the minimum crew. The other cemetery agreement provides
that no “ regular” employee shall be laid off during its 2-year term.
It establishes 6 days as the normal workweek but permits the
employer to limit the workweek to 5 days every alternate week and
specifies 3 months during which the workweek consists of 5 days only.
Another type of guaranty is found in standard agreements signed
by 448 companies in the retail and wholesale paper and paper-box
industry in New York City, under which each employer agrees to
employ “ not less than one chauffeur or driver for the full time of
52 weeks per year.” 33 Drivers may be discharged only for justified
cause, such as incompetence or failure to report an accident. Under
2-year agreements with an association of 23 employers and 3 inde­
pendent firms engaged in textile reLnishing and clothing manufacture,
90 drivers are guaranteed regular employment through a provision
that each of the signatory employers is to employ a specified minimum
number of drivers each working day.33
Bushelmen are guaranteed 40 hours of work per week, 52 weeks
per year, under a 1-year agreement signed by an association of retail
32 Both agreements negotiated b y the Food, Tobacco, Agricultural & Allied Workers (C. I. O.).
33 Agreements negotiated b y the International Brotherhood of Teamsters, etc. (A . F . of L .).

clothing merchants in New Haven, Conn.34 Five agreements, with
Chicago fur and department stores, guarantee 52 weeks’ work,
exclusive of overtime, to fur workers.35 In 3 of these cases, the
guaranty includes 1 week’s vacation; in the other two, 2 weeks
Under a “ continuity of employment” agreement between the Sea­
board Air Line Railway and various A. F. of L. shop-craft unions,
the parties negotiate in December of each year the size of a minimum
force (currently 2,300 employees) of “ mechanics, apprentices, helpers
and coach cleaners” who are guaranteed employment for 6 days per
week during the ei^suing 12-month period. In the event it is found
necessary to close permanently any shop or engine terminal during
the year, the company is not required to transfer the employees
affected to some other terminal on the system, but the established
minimum number of positions on the system must be maintained at
all times. Reductions in the size of the minimum force are permissible
under 2 conditions: (a) if the established minimum of coach cleaners
is found excessive, and (b) if “ any situation arises during the life of the
agreement which would seriously affect either party.” Joint con­
ferences must be held before reductions are made and if no solution is
reached either party may terminate the agreement on 10 days’ written
An agreement covering a public-utility company contains a “ guar­
anteed annual income” plan for certain listed monthly and hourly paid
employees.87 Those who are paid on a monthly basis are guaranteed
against deductions from their regular monthly wage during the 1-year
period of the contract “ because of lack of work or inability on the part
of the company to supply work.” Furthermore, no deduction is
made for time off, not to exceed 1 week, for necessary personal
reasons such as serious sickness or death in the immediate family,
provided such time off is made up by working two-thirds of the hours
lost. Listed employees who are on an hourly basis are given the
opportunity to work a minimum of 2,080 hours during the year,
including vacations and holidays. The guaranty is unconditional
except for men released in the event that the company is required by
the Government to institute a workweek in excess of 40 hours.
Under a 1-year agreement with a social-service agency, visiting
housekeepers who had at least \){ years’ service when the agreement
was signed are guaranteed an annual wage equal to 52 times their
regular rates.88 However, all earnings, including regular, overtime,
vacation, and sick-leave pay, are credited toward fulfillment of the
annual guaranty. Each visit is to be paid for at the time made at
the specified rate, and any balance due on the annual guaranty must
be paid in a lump sum within 2 weeks after the end of the year. The
wage guaranty is forfeited in the event of resignation or dismissal,
except when dismissal is caused by retrenchment or reorganization,
in which event the employee is entitled to payment of the proportion­
ate part of the guaranteed wage from the start ^of the 1-year period to
the date of dismissal, plus dismissal pay amounting to 1 week’s pay
for every year of service after 2 years’ service, up to a maximum of 6
weeks’ pay. Housekeepers on the guaranteed list are entitled to 2*3
34 Agreement negotiated b y the Amalgamated Clothing Workers (C . I. O.).
33 Agreements negotiated b y the International Fur & Leather Workers’ Union (C . I. O.).
33 Agreement negotiated b y International Union of Operating Engineers (A . F. of L .).
33 Agreement negotiated b y United Office & Professional Workers (C . I. O.).

weeks’ paid sick leave per year; other absences are deducted from the
guaranty unless they total less than one-half day in any 1 day or an
aggregate of 2 days in any 1 year.
An agreement with a press wireless company guarantees “ at least
one-half pay of the full weekly wage in every week throughout the
year” to a total of 43 Morse operators highest on the seniority list,
and to all “ printer operators, maintenance men and radio operators
of at least 1 year’s seniority standing.” 39 The company reserves
the right to furlough the junior Morse operators on the guaranty list
and to hire or use other operators if those on the list refuse a job pro­
viding 30 hours’ work per week after posting by the company. When
the need for a particular job ends, the furloughed employee is restored
to the list. In case of “ jobs of local nature which are not required to
be bulletined,” employees on half-pay basis must be available for duty
should their services be required. The employer may elect to pay
dismissal pay in lieu of half-time pay at the rate of 1 full week’s wages
for every 6 months of service, up to a maximum of 26 weeks’ full pay.
Retail and wholesale trade agreements in New York City.— Over 1,500
employers in New York operating wholesale, jobbing, textile convert­
ing, warehouse, and retail establishments (excluding department
stores) have negotiated agreements which guarantee full-time employ­
ment to a “ basic crew” or to “ regular full-time workers” or to “ per­
manent* employees.” 40 It is estimated that 10,000 workers are
covered by these guaranties, most of which are in effect for 2 years,
although one with about 450 proprietors of retail furnishing and drygoods stores runs for 3 years. Under one of the plans covering about
400 shoe stores, regular part-time workers are guaranteed employ­
ment for at least 3 full days (or 3 nights and a Saturday) weekly for
52 consecutive weeks.
The size of the basic crew is negotiated for each individual establish­
ment, and in most cases is frozen for the duration of the agreement.
One association agreement provides for determination of the number
to be included through the grievance and arbitration machinery;
another stipulates that the size of the basic crew must equal the num­
ber of workers which the employer has continuously employed all
year round for the 12 months preceding the signing of the agreement.
Members of the basic crew are not subject to lay-off at any time
during the life of the agreement and, in most cases, vacancies in the
basic crew must be filled immediately. An exception is made in the
dry-goods agreements if the employee leaving enters business within
a 5-block radius of the employer’s store. According to this agreement,
extra employees may be hired for not over 6 weeks, but if retained for
periods in excess of a total of 12 weeks they become permanent em­
ployees. The number of extra employees is jointly determined by
the employer and the union, with resort to arbitration if there is a
difference of opinion.
According to about four-fifths of these agreements the. employer
has recourse to arbitration, “ should conditions arise during the term
of the agreement which necessitate a reduction of [basic crew] staff.”
Several, including an agreement covering retail shoe stores, state that
*• Agreement negotiated b y Commercial Telegraphers’ Union (A . F . of L .).
40 Some of these employers are covered b y association agreements; some were signed individually. Since
the latter contain virtually the same terms as the association agreements, the analysis is restricted to the
association agreements. Likewise, if the union has a form contract which is separately signed b y individual
employers, only one representative agreement is discussed. These agreements were negotiated b y the
United Retail, Wholesale and Department Store Employees (O. I. O.).

the basic-crew guaranty shall not be subject to arbitration. A few
of the agreements which permit arbitration specify the circumstances
which warrant a request by the employer for a reduction or lay-off
in the number of employees, e. g., permanent or substantial decline in
business other than seasonal 5ack time, permanent withdrawal of
capital, store closing, or “ some unavoidable cause which will make it
impossible for the employer to continue employing all the workers of
the basic crew.” Three agreements provide for termination of the
guaranty on dissolution, liquidation, consolidation, sale, bankruptcy*
or assignment for creditors, and one other specifies that no wages
shall be paid when the place of business is closed because of fire.
Employees who are affected by staff reduction are granted dismissal
pay under 4 agreements, and preferential rehiring rights under one of
these. In 3 cases the dismissal pay amounts to 2 weeks' wages but
in one instance applies only to lay-offs in stores where fewer than 4
workers are employed and which are not covered by unemployment
insurance. In the fourth agreement the amount of dismissal pay
varies with the length of service and depends on whether the dismissal
was a result of sale or entry of a partner, or because of adverse business.
The amounts range from the equivalent of 1 week's pay for less than
1 year's service to 6 weeks' pay after 3 years' service.

Of the approximately 30,000 workers in nonmanufacturing industries
protected by employment-guaranty provisions, 2,000 were covered by
provisions guaranteeing less than a year's employment or wages.
Such guaranties were found in agreements with over 200 firms em­
ploying workers in custom tailoring of women's garments and fur
coats, maintenance painting in hotels and office buildings, selling
and jobbing materials for the fur-manufacturing industry, cemetery
work, and retail salesmen in women's and children's wearing apparel
stores, truck drivers and chauffeurs, warehousemen, and polishers
employed by furniture stores. Some of these guaranties, although
applicable to only a fraction of the total force, are unconditional,
while others permit cancellation of the plan, generally in the event
of liquidation of the business.
Unconditional Guaranties

Two agreements negotiated with women's specialty stores in Chi­
cago guarantee $1,900 per year to about 60 custom tailors; in one,
taflors receive $55 per week for a 40-hour week and the guaranty
therefore amounts to 34% weeks' pay; in the other, the regular weekly
wage is $52.50 for a 35-hour week and the guaranty amounts to
slightly more than 36 weeks' pay.41
Twelve agreements guarantee employment to approximately 200
workers engaged in fur repairing and custom tailoring in both fur and
department stores in Cleveland and Chicago.42 In 8 of the agree­
ments, the minimum guaranty, exclusive of overtime, ranges from
38 to 44 weeks; in three agreements, in which the standard workweek
is 35 hours, it is 1,650 hours; in the twelfth it runs from the start of
the season on May 1 until February 1 (9 months) for cutters, operators,*
41 Agreements negotiated b y International Ladies’ Garment Workers’ Union (A. F. of L .).
** Agreements negotiated b y International Fur & Leather Workers’ Union (C . I. O.).

and nailers, and until the end of February (10 months) for finishers.
In addition to the specified guaranty, 3 agreements provide 1 week’s
paid vacation, and 1 agreement, 2 weeks’ paid vacation. One agree­
ment includes the vacation week in the 38-week guaranty.
A standard agreement, covering about 250 maintenance painters in
a number of hotels and office buildings in Cleveland, provides a
guaranty of not less than 42 weeks’ work, at 40 hours per week, in­
cluding 10 days’ annual sick leave and 14 days’ vacation with full
pay.43 The hourly rate for these workers is $1.25, whereas painters
. n general construction work, employed on a day-to-day basis, receive
$1.55 per hour.
An agreement covering cemetery workers in Milwaukee defines
regular employees as “ those employed regularly for 9 months, and
* * * on call during the balance of the year’ ’ and contains the follow­
ing guaranty: “ Regular employees shall be given an amount of employ­
ment between December 1 and April 1 that compares with the
average amount of employment during the same period of the 3 pre­
vious years.” 44
Conditional Guaranties

A plant-wide agreement covering a textile-bleaching firm guarantees
weekly paid truck drivers and helpers 48 weeks of work, but the
company reserves the right to lay off drivers “ in the event of an
unusual slack period or in a period of emergency where production
materially decreases.” 45
Three 2-year association agreements covering 44 employers and
150 employees dealing in materials used in the fur-manufacturing
industry guarantee full employment for 10 months each year, includ­
ing 7 days’ paid sick leave.46 During July and August, equal division
of available work is practiced. An employer who finds himself
overmanned during the guaranteed period of employment may
submit his case to arbitration, and the arbitrator, after examining
the employer’s records, may reduce the guaranteed period of em­
ployment, in which case the additional lay-off period is to be shared
among the employees affected. In the event of a general strike or
lockout among the wholesale fur manufacturers in New York City,
the arbitrator is to rule whether a division of work shall be instituted.
The agreement is automatically terminated when an employer liqui­
dates or discontinues his business.
Under an association agreement covering 8 retail furniture mer­
chants in New York City, about 40 chauffeurs, warehousemen, and
polishers are guaranteed work for a minimum of not less than 5 days
per week during 21 weeks of the year, a minimum of 4 days during
1 week, and a minimum of 3 days per week during the remaining 30
weeks, at a wage scale proportionate to the minimum weekly wage
scale.47 The agreement also provides 18 paid holidays and a minimum
of 10 paid Saturdays during the summer months, even though no
work is performed, but such holidays and Saturdays are not included
in the computation of the annual guaranty. No lay-offs may be made
“ because of insufficiency of business” during the term of the contract,
but the agreement is voided if the employer goes out of business.
43 Agreements negotiated b y International Brotherhood of Painters, Decorators & Paperhangers (A.F. of L .).
44 Agreement negotiated b y Food, Tobacco, Agricultural & Allied Workers (C. I. O.).
43 Agreement negotiated b y Textile Workers’ Union (O. I. O.).
4®Agreements negotiated b y International Fur & Leather Workers’ Union (C. I. O.).
47 Agreement negotiated b y International Brotherhood of Teamsters, etc. (A . F . of L .).

New York women’s apparel stores.—Under 2-year agreements with an
em ployed association and a number of independent employers, both
“ steady” and “ steady-extra” sales clerks in retail ladies’ and children’s
apparel stores in New York City are guaranteed employment for
specified periods each year.48 The association contract, covering
about 800 workers, insures “ steady sales clerks” a minimum employ­
ment of 10% months in each year and “ steady-extra sales clerks” 19
consecutive weeks starting October 1, and 12 consecutive weeks
starting March 15.49 The standard agreement with nonassociation
members provides the same guaranty to “ steady employees” but 4
more weeks to “ steady-extra employees.” Under both plans, “ steady
sales clerks” receive 2 weeks’ paid vacation and “ steady-extra sales
clerks” 1 week’s paid vacation in addition to the employment guaranty.
In all these stores not more than 1 “ steady-extra sales clerk” may be
employed for every 2 “ steady sales clerks,” except that 1 “ steadyextra sales clerk” is permitted where only 1 “ steady sales clerk” is
presently employed.
Vacancies among “ steady” or “ steady-extra” sales clerks, no matter
what the cause, must be filled immediately. For new employees a
2-week trial period, which may be increased to 3 weeks at the employ­
er’s request, is specified in the association agreement while the inde­
pendent employer agreement provides for 1 week. Should any em­
ployee prove to be unsatisfactory during the trial period, a successor
must be hired “ so that there shall be no lapse of time between the
termination of the trial period of the unsatisfactory employee and
the employment of his successor.”
Under the association agreement, the employer reserves the right
to change his sales force either 2 weeks prior to the expiration of the
first year of the agreement, or 2 weeks prior to the expiration of the
agreement. Employees affected are to receive 2 weeks’ notice; if
the change is desired after the first year of the agreement, the employer
must also submit a written statement of the reason for such change to
the union and the association.
The association contract (but not the independent standard con­
tract) frees the employer of his obligations to furnish minimum em­
ployment in the event of a bona fide liquidation or if the employer
discontinues his business. Should the employer reenter business
prior to the expiration of the agreement, either individually or by
entering into a partnership, he resumes his obligations from the date
of reentry into business until the expiration of the agreement.
Licensed officers on Great Lakes and inland waterways vessels.—
Licensed deck and engine officers on Great Lakes and inland river
vessels receive employment or wage guaranties under 22 agreements
examined. Fourteen of these cover licensed engine officers and 8
cover licensed deck officers, although 2 of the latter cover pursers and
stewards only.50
Under several agreements, a company may modify its guaranty
and lay off affected personnel after a period of 7 days if vessel service
is discontinued because of marine disaster, condemnation by the
Bureau of Marine Inspection and Navigation, or sale, commandeering,
« Agreements negotiated b y United Retail, Wholesale & Department Store Employees (O. I. O.).
In certain specified sections of the city “ steady-sales clerks” must be employed for a minimum period
of 10 months each year and “ steady-extra sales clerks” for 18 consecutive weeks in the fall season and for
11 consecutive weeks in the raring season.
» Agreements covering engine officers were negotiated b y the Marine Engineers' Beneficial Association
(O. I. O .); those for deck officers, b y the Masters, Mates & Pilots (A . F . of L.),

or taking over by Government authority. In contrast, one agree­
ment provides that “ suspension of operations— shall not relieve [the
company] from its guaranty of the said 6 months’ continuous employ­
Guaranties for engine officers run from 6 months to a full year.
Two plans guarantee employment for 12 months; six for 10 months;
two for 9% months; and three for 9 months. The fourteenth guaran­
tees 6 months’ pay when boats operate from 4 to 6 months in a year,
8 months’ pay when boats operate from 6 to 8 months, 10 months’
pay for from 8 to 10 months, and 12 months’ pay when boats operate
more than 10 months. In 6 of the 14 agreements, junior officers on
Class A vessels, and all officers on other than Class A vessels receive
lesser guaranties, usually 1 month less, but amounting to 3 months
less in one agreement.
Under one agreement all engine officers on Class A vessels receive
their regular monthly salary each month for the full period of the
agreement, including 4 weeks’ vacation. On other vessels, the chief
and first assistant engineer, though guaranteed 12 months’ work in
each year, receive less pay during the lay-up season, which includes
6 weeks’ paid vacation at lay-up wages. Second assistant engineers
on these vessels, who work a major portion of the operating season
and who are still in service at the end of the season, are guaranteed
3 months’ work additional, including 4 weeks’ vacation at lay-up pay.
Guaranties in the agreements analyzed covering deck officers run from
5 to 12 months. One provides 12 months, two provide 10 months,
two provide 8 months, one provides 7 months, one provides 6 months,
and the eighth, covering two groups of pursers, 5 and 7 months,

A ppendix A .— Sample Guaranty Plans
G E O R G E A . H O R M E L & C O .— S T R A I G H T -T I M E A R R A N G E M E N T

Each employee regularly assigned to a straight-time department will receive
the weekly rate of pay provided for him in the latest approval of the straighttime plan for his department. This rate of pay will be subject to any increases or
decreases affecting the plant as a whole. Each employee will receive his regular
pay check every week except when absent beyond regularly provided sick leave
or vacation. * * *
The straight-time arrangement with respect to any department may be can­
celled at any time that department fails to abide by all working agreements, or at
any time the discontinuance of the straight-time arrangement in some other
department directly affecting it requires the cancellation.
If other hour limitations become established by law, this plan will be changed
to conform to such law, or if the company considers the straight-time plan un­
workable because of the passage of any such law, the whole straight-time arrange­
ment, or any part of it, may be cancelled as of the effective date of any such law.
Any time any department becomes dissatisfied with the straight-time arrange­
ment and wishes to cancel it, such cancellation may be effected in the usual manner
of handling grievances.
Otherwise straight-time arrangement may be discontinued only by thirty days’
advance notice of desire to make such discontinuance at the end of the company’s
fiscal year. * * *
If there is any increase or decrease in the amount of work required to produce
the budgeted volume, a corresponding adjustment will be made in the department
volume budget or in the number of people in the department. The choice as to
which adjustment shall be made will be left to a decision by a majority in the
department in case the change is an increase.
In case the required amount of work is reduced sufficiently to permit the removal
of one or more employees, such employees will be transferred from the department
on a seniority basis. When the manufacture of some item is discontinued, or
when, because of a change in method of operation, certain job or jobs are discon­
tinued, it is understood that it will be necessary to reduce the straight-time gang
correspondingly. Such reductions will be made on the basis of seniority.
Except as provided in the 2 preceding paragraphs * * * there will be no
reduction in the number of employees in any straight-time department within a
period of one year from the latest approval of the straight-time arrangement for
that department. Any employee who is laid off from a straight-time depart­
ment may find employment elsewhere on the basis of his regular seniority rights,
or, on application, may be transferred, at his regular rate of pay, to the “ extra
gang” which will be maintained to handle extra work, temporary replacements,
and other business requirements which cannot be handled by the regular straighttime departments. During the period of any one fiscal year, this extra gang will
not be reduced below the number who have been transferred to it from regular
straight-time employment, thus maintaining employment with full pay for at
least one year for the number of individuals originally assigned to the straighttime schedule for any year.
Any employee laid off from the extra gang may find other employment on the
basis of his seniority rights.
For each department for which it is possible to establish some measure of the
work to be done, the budgeted annual volume will be stated. (See schedule B
In any year in which the department produces less than the budgeted annual
volume, the members of the department, individually and collectively, become
indebted to the company for producing that much work at the first opportunity.
At the end of any year in which the cumulated production of the department
is in excess of the cumulated budgeted annual volume, bonuses will be paid the
members of the department. These bonuses will be calculated on the basis of
what the cost of the extra production would be by adding more employees to
Schedule B referred to in the plan is not reproduced.

( 22)

the department, and the specific method of calculating it with respect to the
department will be found in Schedule B attached.
At the end of any year in which the cumulated production of the department
is in excess of the cumulated budgeted annual volume, and during which regular
members of the department have been absent without pay and without being re­
placed, the cost of such replacements will be put in a “ kitty” to be distributed
among the members of the department in whatever manner the majority of the
department may agree.
For each department there will be maintained what will be known as a “ kitty.”
Schedule B attached will show the department work budget, if any. Unless
otherwise provided in schedule B for those departments having work budgets,
employees docked for absence, and employees absent on vacations granted on the
basis of 5, 15 or 20 years’ service, will be replaced.
Replacements will be made in either men or money. That is to'say, if the
department does not require a replacement man, the money for the replacement
will go to the department kitty.
The management will have the right to insist on replacements if the tonnage
produced falls below the daily or weekly volume which the company’s business
requires, or if the average actual hours worked is or threatens to be in excess
of 40 hours per week.
The department committee will direct whether replacement money will be
paid to individuals in the gang or whether it will remain in the department kitty.
The money in the department kitty will be distributed among the members of
the department at the end of each fiscal year, and in whatever manner the
majority of the department may agree.
N U N N -B U S H


C O .— 5 2 W E E K PAY PLAN

A. Definition, Gross Amount, Determination Thereof
The parties hereto agree that the capital, management, and labor interest in
the business of the Nunn-Bush Shoe Co., shall constitute a true partnership
insofar as sharing the proceeds of production. The parties further agree that
* * * percent of the wholesale value of the Nunn-Bush shoes * * *
packed during the term of this agreement shall be a fair reward for the labor
interests as below limited. The management accordingly agrees that during the
period of this agreement the amount paid to “ labor interests” below limited
shall equal * * * percent of the wholesale value of the Nunn-Bush shoes
* * * packed during the term of this agreement * * *
In determining the wholesale price of the shoes packed during the term of this
agreement, the prevailing wholesale prices at the time of packing shall be used,
except that allowances shall be made for damaged shoes, and which said allowance
shall be determined in the manner established by the usual custom. In addition
thereto, management agrees that all sample and trial shoes produced shall be
credited at the highest wholesale price prevailing in the month when the sample
or trial is completed.
The management further agrees to notify the union of any conferences with
respect to contemplated changes in the wholesale price list and to permit any
duly authorized agent or agents of the union to attend such conferences.
The management further agrees to give free access to the necessary books and
records of the management and full cooperation once during each calendar year
to an auditor or auditors selected by the union to check the wholesale value of
the shoes packed during the life of this agreement and the earnings paid out of
the workers’ share-production fund. The management further agrees to forward
to the union each month during the term of this agreement its most accurate
estimate of the status of the said workers’ share-production fund * * *.

Drawing Accounts and Classification of Membership

In order to effect an orderly distribution of the union members’ share of the
receipts of the company, the parties agree that a drawing account system, as
hereinafter more fully set forth, shall be employed * * * percent of the
wholesale value, as hereinbefore adjusted, of the Nunn-Bush shoes * * *
packed during the life of this agreement * * * shall be credited to the
aforementioned drawing account by management.
That furthermore all payments made, except as provided in the section of this
contract designated “ overtime” shall be charged to the aforenamed drawing

account, which said payments have been classified under the heading of “ wages”
on the books of the company. This group of employees, as hereinafter more
fully set forth, shall constitute the “ labor interest” hereinabove referred to.
This said labor interest shall consist of the following classifications of member­
ship and the rights, interests and benefits of each classification:
“ The class A membership shall consist of those workers whose service record
began with the Nunn-Bush Shoe Co. prior to March 1, 1942, and such workers
who have attained a class A rating since said time, except those workers who,
because of a disqualification as hereinafter more fully set forth, were unable to
attain the said class A membership. The class A worker shall constitute a
permanent labor force and shall not be subject to lay-offs. The class A workers
are to share exclusively in whatever production that can be secured by the man­
agement until such time as increased production necessitates additional workers,
as hereinafter enumerated.”
The total membership of class A workers is limited to 595, including those
class A members and workers who attain a class A membership while on leave
of absence; it being understood that care must be taken that the rights of all
workers who are on leave of absence are preserved when promotions to class A
memberships are made.
' “ The class B membership shall consist of all those workers except those herein­
after or hereinbefore classified as otherwise, who have been employed at the
Nunn-Bush Shoe Co., Milwaukee plant, for a period of at least 2 years. These
said class B members shall immediately begin to participate in the share produc­
tion plan at the commencement of the first 4-week period after the second anni­
versary of their employment, and they shall be entitled to all the rights, interests
and benefits of the class A membership, except that they may be subject to lay­
off in accordance with the terms of this contract.
“ The class C membership shall consist of all workers who had not reached the
age of 45 years at the time of their commencing employment at the Nunn-Bush
Shoe Co., Milwaukee plant, such members, of course, being members in good
standing in the * * * union * * * but who shall have served less than 2 years.
“ The class D membership shall consist of those workers who are 45 years of
age or more at the commencement of their employment with the company and
who have not previously earned a higher classification as hereinbefore set forth.
“ The class DB membership shall consist of those class D members who have
completed 2 years of employment with the company and who are eligible to the
share production plan. The same is hereinbefore explained in reference to
class B members. However, such class DB members shall at no time be eligible
for promotion to class A membership.
“ The class HA membership shall consist of those workers who were previously
classified as class A members but who, because of their physical or mental impedi­
ment, were unable to perform the minimum of work provided in the various fac­
tory schedules and consequently were taken out of the share production plan.
Such members are to be paid on an hourly basis. Otherwise, they shall have
the same rights and benefits of the class A membership with respect to lay-offs.
“ The class HB membership shall consist of those workers who were previously
classified as class B but who possessed some physical or mental impediment and
could not perform the minimum amount of work provided in the various factory
schedules and consequently were taken out of the share production plan. Such
members shall be paid on an hourly basis.”
Class B members shall be promoted to class A membership according to seniority
upon vacancy occurring in the class A membership hereinbefore set forth and
agreed upon as being limited to 595, due to death, resignation, discharge or perma­
nent termination of employment. Provided, however, if there are no members
in the class B membership, then the class C members shall be promoted to class A
membership according to seniority upon vacancies occurring in the class A
membership; provided further, however, that such class C members shall have at
least 2 years’ service record at the Milwaukee plant of the * * * company.
All classes A, B, and DB employees are to equally share in production in accord­
ance with the present existing agreement with the management.
All classes B and DB members may be laid off when production needs are not
sufficient to maintain class A members working at least 40 hours per week. In
the event of necessity of lay-off, there shall be no discrimination between class C
and class D members, except on a basis of seniority rights. That furthermore in
the event of a further lay-off, there shall be no discrimination between a class B
employee and a class DB employee, also, except on the basis of seniority rights.

Classes HA, HB, C, and D members are wage earners and work for a stipulated
amount per hour, the total of their wages being paid out of the gross share before
any balance is allocated to the accounts of classes A, B, and DB.
Earnings of classes A, B, and DB members are to be allocated to the individual
account of each of said members, that member being paid in cash any balance to
his or her credit after providing for a reserve fund of 12% percent of his or her
annual estimated income which said reserve includes provision for holidays,
vacation period or sick leave as hereinafter more fully set forth. The adjust­
ments on said individual accounts shall be made at the end of each 4-week period
and when the reserve in each individual account exceeds 12% percent of the
annual estimated income, the excess shall be paid during the following 4-week
period, permission being granted to management to include said excess in the
regular weekly drawing. * * *
Management further agrees to pay interest on the balance in the individual
reserve accounts of the said classes A, B, and DB members at the same rate as is
currently being paid by banks on savings deposit accounts (currently agreed at
1 percent per annum) except, however, such computations shall be made at the
end of the 4-week period in accordance with the adjustments made on the indi­
vidual account of each member. * * *
It is agreed that during the period of this contract, changes may be made in
the differential base rates upon mutual agreement by and between management
and the executive board of the union.
It is agreed for the purpose of calculating the drawing account of each indi­
vidual member of the union, a yearly differential rate of 2,080, or 40 X 52, multi­
plied by the present average hourly drawing, shall be the basis of calculation.
However, adjustments in individual differential rates may be made during the
period of this agreement, but such individual adjustments shall not be effective
or paid until approved by the executive board of the union; provided, however,
that when production department members are called to do maintenance work,
they shall receive compensation at a rate agreed upon by and between the man­
agement and the executive board of the union; * * *
C. Stabilized Annual Income
For the purpose of stabilizing annual earnings of the employees of the company
in the union’s jurisdiction, it is agreed that each class A, B, and DB member shall
receive at least 1 drawing for each week that this agreement is effective, and that
the amount of such drawing will be at least 1/52 of the member’s yearly differential
rate except as that differential rate may be changed in accordance with the pro­
vision permitting adjustments of the individual rates and except as the multiplier
can be changed in accordance with the provision hereinafter relating to “ over­
drafts.” However, for the purpose of establishing in all departments uniformity
of drawing for absence, due to recognized cause, the union agrees that each class
A, B, and DB member shall be entitled during the term of this contract to 5 days
of absence with drawings for recognized cause.
D. Reserve and Overdraft
The parties agree that it is highly advisable to establish a reserve in the workers’
fund of each individual class A, B, and DB member, in such instances as herein­
before set forth, in order to guard against the disruptance of drawing schedules due
to adverse business conditions and both parties agree to promote the accumulation
and maintenance of such reserve accordingly. Commencing February 26, 1945,
this reserve shall consist of 12% percent of the annual estimated income, the same
being computed by multiplying the present average hourly drawing by 2,080.
The said 12%, percent individual reserve account shall include drawing for 1-week
vacation, 5 holidays and 5 sick days. However, managment will continue to pay
the regular weekly drawing including weeks with holidays, vacation and 5 days of
sick leave, if by so doing the individual reserve is not reduced below 5 percent of
the annual estimated income but no monthly or adjusted compensation payments
will be had if by so doing, the said reserve is reduced to a sum less than 12)4 per­
cent of the annual estimated income.
When it is apparent that due to adverse business conditions the said reserve
accounts shall be depleted if no change is made, the drawing account rates shall
be revised by agreement between the management and the executive board of the
union to a point where the reserve account will at no time be less than 5 percent
of the annual estimated income.


The following provisions constitute the plan known as The Proctor & Gamble
Guaranty of Regular Employment and will apply at such factories of the * * *
Company * * * as have been duly notified in writing of their inclusion in
said plan by order of the board of directors of the * * * Company. * * *
To the employees located at such factories as above stated whose pay is com­
puted on an hourly rate, and who have had at least 24 consecutive months of
employment immediately preceding the application of this plan to their employ­
ment, the undersigned company hereby guarantees regular employment for not
less than 48 weeks (or its time equivalent) in each calendar year less only time
lost by reason of holiday closings, vacation with pay, disability due to sickness or
injury, voluntary absence, or due to fires, floods, strikes, or other emergency
whether like the foregoing or not, and subject to the following provisions:
Regular employment shall be understood to mean employment for not less
than the hour week established from time to time by the company as the standard
hour week at each of its factories.
When an employee first comes under this guaranty after January 1 of any
calendar year, the company guarantees to him under the terms and provisions
outlined herein that he shall not be unemployed in excess of 4 weeks (or its time
equivalent), plus time lost for reasons herein stated, during the remainder of the
calendar year.
The company reserves the right under the guaranty to transfer any employee
to work other than that at which he is regularly employed, and to compensate
him for the same in accordance with the wage rate which prevails for the work
to which he has been transferred.
Upon authorization from the board of directors and without changing the
established hour week, the hours of work for employees coming within the terms
of this guaranty may be limited to 75 percent of the established hour week less
time lost for reasons stated above, whenever in the opinion of the board of direc­
tors such action seems justified.
Any individual hired to replace an employee leaving for military service or
training, or for other services made necessary by a national emergency, shall be
considered a temporary employee and he shall be so informed at the time of his
employment. The company will not consider such an employee within this
guaranty. If at a later date subsequent to his employment, conditions should
warrant it, within the sole discretion of the company, he may be informed that
he is then eligible for this guaranty in accordance with the terms of this plan.
The right to discharge any employee at any time is reserved to the company
employing such employee.
This guaranty of employment has been established because the company be­
lieves it to be sound business practice and a desirable protection for its employees.
It is the intent of the company to maintain it, but the company must and does
reserve the unqualified right, to be exercised at its sole discretion, to withdraw
this guaranty at any of its factories, or to terminate or to modify this guaranty
at any time.