Inspired by the passage of the National Industrial Recovery Act, the 200 employees of the Colson Company in Elyria, OH organized themselves into a union, applied for and received a charter from the AFL , and in 1934 officially became Federal Union #19343.

Prior to US entry into WWII, the Colson company mainly made wheelchairs, castors, and bicycles. But with the war, the Elyria factory was retooled to produce machine gun parts, rockets, and stretchers for the Army. At its height during these years, the company employed as many as 500 workers.

After the War, the company struggled, particularly with respect to its bicycle line which now faced competition from sought-after European imports. And in the early 1950s, the company became mired in struggle with its organized workers.

In 1953, Jay Pritzker, a lawyer from Chicago, purchased the company and brought in his 26-year-old brother Robert to run it.

Before they owned the Hyatt hotel company, before they were billionaires, long before their grandchildren started hedge funds, went into politics, and/or became mega donors and philanthropists - the Pritzker family of Chicago made one of their first major investments - and proceeded to transform a moribund manufacturing company in an Ohio industrial town into a global platform for almost unthinkable intergenerational wealth creation.

But first they had to deal with pesky little Local 19343. And Robert had come to Elyria with a plan to do exactly that. Relying on an aggressive interpretation of the union contract’s “management rights” clause, he radically restructured production and discontinued the unprofitable bicycle product lines altogether. Pritzker also decided not to renew the company’s contract to produce rockets for the military.

That left Colson with a smaller workforce and a reduced product line of castors and wheelchairs.

And in 1957, the Pritzker’s shifted much of the profitable castor production to a non-union facility in Jonesboro, AR. Only about 30 or 40 workers remained employed in the Elyria factory, making wheelchairs and other medical products for a shrinking customer base. The union apparently was no longer in the picture, or at least there is no evidence that it was.

For several years after shifting most of its production to Arkansas, Colson leased a manufacturing facility at the Jonesboro airport. But the company was secretly scouting for a new state of the art facility which they ultimately found in Caruthersville, Missouri, where the town agreed to build a factory to their specifications.

According to a 1964 National Labor Relations Board Order*, Colson used a shell corporation to negotiate the lease with the city and had local businessmen serve as nominee shareholders to hide Colson’s ownership of the leaseholding entity.

One reason for the secrecy later stipulated in court by the Colson Corporation was because they “had under advisement a plan to close a plant in Ohio and wished no publicity as to their move.”

But there was another motive for this ruse, suspected by the Board and later affirmed by an Eighth Circuit Appeals Court ruling. **

Shortly after they opened the Caruthersville facility in 1963, workers there had begun a union organizing drive with the International Brotherhood of Boilermakers. The union presented the company with signed cards showing a majority (37 out of 50) wished to form a union.

When the company refused to recognize the union, claiming to have doubts that the union had actually produced valid cards for a majority of eligible workers, the union filed several unfair labor practice charges. The Board’s Order in 1964 found in favor of the union:

“we are convinced that the businessmen of Caruthersville acted as agents for the Respondent [Colson] in attempting to cause employees to abandon their interest in a union, and to revoke or destroy union authorization cards previously given to the Union. We also agree that the interrogation of employees [by the local businessmen] about their union sentiments on the eve of a scheduled representation election and attempted surveillance of employees' union activities were violative of Section 8(a) (1). All of such conduct supports our conclusion that Respondent's refusal to bargain was not motivated by a good-faith doubt about the Union's majority status but was designed to gain time in which to undermine the Union's majority. We conclude that Respondent's refusal to recognize and bargain with the Union on and after January 8, 1963, is violative of Section 8(a) (5) and (1)."

Colson appealed the Board’s Order to the Eighth Circuit U.S. Court of Appeals, which in 1965 upheld the Board’s Order in its entirety. ** With respect to the Board’s finding that the local businessmen in Caruthers had committed unfair labor practices, and that in doing so had acted as agents of the Colson Corporation, the Eighth Circuit panel opined:

“On this record considered as a whole, we find substantial evidentiary support for the Board's finding The Colson Corporation did not have a good faith doubt as to the majority status of the Union and that its refusal to bargain was motivated by a desire to gain time in which to dissipate that majority. There is also ample support for the Board's finding that The Colson Corporation was responsible for the coercive activity of its agents [the local businessmen] and that the employees were in fact intimidated and coerced.”

Following its unsuccessful appeal, Colson recognized the Union at the Caruthersville facility and entered into negotiations for a first contract. By then the Pritzkers had sold off the wheelchair division housed at the original Elyria plant to three former Colson managers, and had combined the castor company with another company it had acquired to form the Marmon Group.

* 148 N.L.R.B. No. 89.

** The Colson Corporation, Petitioner, v. National Labor Relations Board, Respondent, 347 F.2d 128 (8th Cir. 1965)

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