Price of Defense

Many a small businessman confronted by a National Labor Relations Board complaint has ruefully decided it was cheaper to sign a consent decree, setting up new labor conditions in his plant, than to fight the case. Hartley Wade Barclay, editor of the industrial monthly Mill and Factory discovered one big reason why this is true. Intrigued by wholesale capitulation of small business in labor cases, Editor Barclay investigated the cost of defenses to NLRB complaints. Ruling out the automobile company cases because the amounts expended were so large that they would unbalance his study, he last week published his finding (based upon 76 company defenses in 28 States): The average cost of meeting an NLRB complaint (not including appeal to the courts) was $20,572. Since 54% of U. S. corporations have assets of less than $50,000 a year, most of them cannot afford the luxury of a defense.

Editor Barclay's bitter conclusion: to small businesses the Wagner Act "denies the right of a free trial and imposes only one alternative choice: economic suicide."

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